HB 0133 2003
1	CHAMBER ACTION
2
3
4
5
6	The Committee on Insurance recommends the following:
7
8	Committee Substitute
9	Remove the entire bill and insert:
10	A bill to be entitled
11	An act relating to firefighter and municipal police
12	pensions; creating ss. 175.1015 and 185.085, F.S.;
13	requiring the Department of Revenue to create and maintain
14	a database for use by insurers for certain purposes;
15	providing insurers with incentives for using the database;
16	providing penalties for failure to use the database;
17	requiring local governments to provide information to the
18	department; appropriating funds to the department for the
19	administration of the database; authorizing the department
20	to adopt rules; providing for distribution of certain tax
21	revenues through 2007; providing for basing future
22	distributions of excise tax revenues to certain
23	municipalities and special fire control districts upon
24	calendar year 2003 distributions; providing for future
25	repeal; amending ss. 175.351 and 185.35, F.S.; revising
26	the term "extra benefits" with respect to pension plans
27	for firefighters and pension plans for municipal police
28	officers; providing an appropriation; providing an
29	effective date.
30
31	Be It Enacted by the Legislature of the State of Florida:
32
33	Section 1. Section 175.1015, Florida Statutes, is created
34	to read:
35	175.1015 Determination of local premium tax situs.--
36	(1)(a) Any insurance company that is obligated to report
37	and remit the excise tax on property insurance premiums imposed
38	under s. 175.101 shall be held harmless from any liability for
39	taxes, interest, or penalties that would otherwise be due solely
40	as a result of an assignment of an insured property to an
41	incorrect local taxing jurisdiction if the insurance company
42	exercises due diligence in applying an electronic database
43	provided by the Department of Revenue under subsection (2).
44	Insurance companies that do not use the electronic database
45	provided by the Department of Revenue or that do not exercise
46	due diligence in applying the electronic database are subject to
47	a 0.5-percent penalty on the portion of the premium pertaining
48	to any insured risk that is improperly assigned, whether
49	assigned to an improper local taxing jurisdiction, not assigned
50	to a local taxing jurisdiction when it should be assigned to a
51	local taxing jurisdiction, or assigned to a local taxing
52	jurisdiction when it should not be assigned to a local taxing
53	jurisdiction.
54	(b) Any insurance company that is obligated to report and
55	remit the excise tax on commercial property insurance premiums
56	imposed under s. 175.101 and is unable, after due diligence, to
57	assign an insured property to a specific local taxing
58	jurisdiction for purposes of complying with paragraph (a) shall
59	remit the excise tax on commercial property insurance premiums
60	using a methodology of apportionment in a manner consistent with
61	the remittance for the 2002 calendar year.
62	(2)(a) The Department of Revenue shall, subject to
63	legislative appropriation, create as soon as practical and
64	feasible, and thereafter shall maintain, an electronic database
65	that gives due and proper regard to any format that is approved
66	by the American National Standards Institute's Accredited
67	Standards Committee X12 and that designates for each street
68	address and address range in the state, including any multiple
69	postal street addresses applicable to one street location, the
70	local taxing jurisdiction in which the street address and
71	address range is located and the appropriate code for each such
72	participating local taxing jurisdiction, identified by one
73	nationwide standard numeric code. The nationwide standard
74	numeric code must contain the same number of numeric digits, and
75	each digit or combination of digits must refer to the same level
76	of taxing jurisdiction throughout the United States and must be
77	in a format similar to FIPS 55-3 or other appropriate standard
78	approved by the Federation of Tax Administrators and the
79	Multistate Tax Commission. Each address or address range must be
80	provided in standard postal format, including the street number,
81	street number range, street name, and zip code. Each year after
82	the creation of the initial database, the Department of Revenue
83	shall annually create and maintain a database for the current
84	tax year. Each annual database must be calendar-year specific.
85	(b)1. Each participating local taxing jurisdiction shall
86	furnish to the Department of Revenue all information needed to
87	create the electronic database as soon as practical and
88	feasible. The information furnished to the Department of Revenue
89	must specify an effective date.
90	2. Each participating local taxing jurisdiction shall
91	furnish to the Department of Revenue all information needed to
92	create and update the current year's database, including changes
93	in annexations, incorporations, and reorganizations and any
94	other changes in jurisdictional boundaries, as well as changes
95	in eligibility to participate in the excise tax imposed under
96	this chapter. The information must specify an effective date and
97	must be furnished to the Department of Revenue by July 1 of the
98	current year.
99	3. The Department of Revenue shall create and update the
100	current year's database in accordance with the information
101	furnished by participating local taxing jurisdictions under
102	subparagraph 1. or subparagraph 2., as appropriate. To the
103	extent practicable, the Department of Revenue shall post each
104	new annual database on a web site by September 1 of each year.
105	Each participating local taxing jurisdiction shall have access
106	to this web site and, within 30 days thereafter, shall provide
107	any corrections to the Department of Revenue. The Department of
108	Revenue shall finalize the current year's database and post it
109	on a web site by November 1 of the tax year. If a dispute in
110	jurisdictional boundaries cannot be resolved so that changes in
111	boundaries may be included, as appropriate, in the database by
112	November 1, the changes may not be retroactively included in the
113	current year's database and the boundaries will remain the same
114	as in the previous year's database. The finalized database must
115	be used in assigning policies and premiums to the proper local
116	taxing jurisdiction for the insurance premium tax return due on
117	the following March 1. The Department of Revenue shall furnish
118	the annual database on magnetic or electronic media to any
119	insurance company or vendor that requests the database for the
120	sole purpose of assigning insurance premiums to the proper local
121	taxing jurisdiction for the excise tax imposed under this
122	chapter. Information contained in the electronic database is
123	conclusive for purposes of this chapter. The electronic database
124	is not an order, a rule, or a policy of general applicability.
125	4. Each annual database must identify the additions,
126	deletions, and other changes to the preceding version of the
127	database.
128	(3)(a) As used in this section, the term "due diligence"
129	means the care and attention that is expected from and is
130	ordinarily exercised by a reasonable and prudent person under
131	the circumstances.
132	(b) Notwithstanding any law to the contrary, an insurance
133	company is exercising due diligence if the insurance company
134	complies with the provisions of paragraph (1)(b) or if the
135	insurance company assigns an insured's premium to local taxing
136	jurisdictions in accordance with the Department of Revenue's
137	annual database and:
138	1. Expends reasonable resources to accurately and reliably
139	implement such method;
140	2. Maintains adequate internal controls to correctly
141	include in its database of policyholders the location of the
142	property insured, in the proper address format, so that matching
143	with the department's database is accurate; and
144	3. Corrects errors in the assignment of addresses to local
145	taxing jurisdictions within 120 days after the insurance company
146	discovers the errors.
147	(4) There is annually appropriated from the moneys
148	collected under this chapter and deposited in the Police and
149	Firefighter's Premium Tax Trust Fund an amount sufficient to pay
150	the expenses of the Department of Revenue in administering this
151	section, but not to exceed $50,000 annually, adjusted annually
152	by the lesser of a 5-percent increase or the percentage of
153	growth in the total collections.
154	(5) The Department of Revenue shall adopt rules necessary
155	to administer this section, including rules establishing
156	procedures and forms.
157	(6) Any insurer that is obligated to collect and remit the
158	tax on property insurance imposed under s. 175.101 shall be held
159	harmless from liability, including, but not limited to, any tax,
160	interest, or penalties, which would otherwise be due solely as a
161	result of an assignment of an insured property to an incorrect
162	local taxing jurisdiction, based on the collection and remission
163	of the tax accruing before January 1, 2004, provided the insurer
164	collects and reports this tax consistent with filings for
165	periods before January 1, 2004. Further, any insurer that is
166	obligated to collect and remit the tax on property insurance
167	imposed under this section shall not be subject to an
168	examination under s. 624.316 or s. 624.3161 which would occur
169	solely as a result of an assignment of an insured property to an
170	incorrect local taxing jurisdiction, based on the collection and
171	remission of such tax accruing before January 1, 2004.
172	(7)(a) Notwithstanding any other provision of law, no
173	methodology, formula, or database that is adopted in any year
174	after January 1, 2004, may result in a distribution to a
175	participating municipality or special fire control district that
176	has a retirement plan created pursuant to this chapter of an
177	amount of excise tax which is less than the amount distributed
178	to such participating municipality or special fire control
179	district for calendar year 2003. However, if the total proceeds
180	to be distributed for the current year from the excise tax
181	imposed under s. 175.101 are less than the total amount
182	distributed for calendar year 2003, each participating
183	municipality shall receive a current year distribution that is
184	proportionate to its share of the total 2003 calendar year
185	distribution. If the total proceeds to be distributed for the
186	current year from the excise tax imposed under s. 175.101 is
187	greater than or equal to the total amount distributed for
188	calendar year 2003, each participating municipality and special
189	fire control district shall initially be distributed a minimum
190	amount equal to the amount received for calendar year 2003. The
191	remaining amount to be distributed for the current year, less
192	the minimum distribution amount, shall be distributed to those
193	municipalities and special fire control districts with a
194	current-year reported amount that is greater than the amount
195	distributed to such municipality or special fire control
196	district for calendar year 2003. Each municipality and special
197	fire control district eligible for distribution of this
198	remaining amount shall receive its proportionate share of the
199	remaining amount based upon the amount reported for that
200	municipality or special fire control district, greater than the
201	calendar year 2003 distribution for the current year, to the
202	total amount over the calendar year 2003 distribution for all
203	municipalities and special fire control districts with a current
204	year reported amount that is greater than the calendar year 2003
205	distribution.
206	(b) If a new municipality or special fire control district
207	elects to participate under this chapter during any year after
208	January 1, 2004, such municipality or special fire control
209	district shall receive the total amount reported for the current
210	year for such municipality or special fire control district. All
211	other participating municipalities and special fire control
212	districts shall receive a current year distribution, calculated
213	as provided in this subsection, which is proportionate to their
214	share of the total 2003 calendar year distribution after
215	subtracting the amount paid to the new participating plans.
216	(c) This subsection expires January 1, 2007.
217	Section 2. Subsection (1) of section 175.351, Florida
218	Statutes, is amended to read:
219	175.351 Municipalities and special fire control districts
220	having their own pension plans for firefighters.--For any
221	municipality, special fire control district, local law
222	municipality, local law special fire control district, or local
223	law plan under this chapter, in order for municipalities and
224	special fire control districts with their own pension plans for
225	firefighters, or for firefighters and police officers, where
226	included, to participate in the distribution of the tax fund
227	established pursuant to s. 175.101, local law plans must meet
228	the minimum benefits and minimum standards set forth in this
229	chapter.
230	(1) PREMIUM TAX INCOME.--If a municipality has a pension
231	plan for firefighters, or a pension plan for firefighters and
232	police officers, where included, which in the opinion of the
233	division meets the minimum benefits and minimum standards set
234	forth in this chapter, the board of trustees of the pension
235	plan, as approved by a majority of firefighters of the
236	municipality, may:
237	(a) Place the income from the premium tax in s. 175.101 in
238	such pension plan for the sole and exclusive use of its
239	firefighters, or for firefighters and police officers, where
240	included, where it shall become an integral part of that pension
241	plan and shall be used to pay extra benefits to the firefighters
242	included in that pension plan; or
243	(b) Place the income from the premium tax in s. 175.101 in
244	a separate supplemental plan to pay extra benefits to
245	firefighters, or to firefighters and police officers where
246	included, participating in such separate supplemental plan.
247
248	The premium tax provided by this chapter shall in all cases be
249	used in its entirety to provide extra benefits to firefighters,
250	or to firefighters and police officers, where included. However,
251	local law plans in effect on October 1, 1998, shall be required
252	to comply with the minimum benefit provisions of this chapter
253	only to the extent that additional premium tax revenues become
254	available to incrementally fund the cost of such compliance as
255	provided in s. 175.162(2)(a). When a plan is in compliance with
256	such minimum benefit provisions, as subsequent additional
257	premium tax revenues become available, they shall be used to
258	provide extra benefits. For the purpose of this chapter,
259	"additional premium tax revenues" means revenues received by a
260	municipality or special fire control district pursuant to s.
261	175.121 that exceed that amount received for calendar year 1997
262	and the term "extra benefits" means benefits in addition to or
263	greater than those provided to general employees of the
264	municipality and in addition to those in existence for
265	firefighters on March 12, 1999. Local law plans created by
266	special act before May 23, 1939, shall be deemed to comply with
267	this chapter.
268	Section 3. Section 185.085, Florida Statutes, is created
269	to read:
270	185.085 Determination of local premium tax situs.--
271	(1)(a) Any insurance company that is obligated to report
272	and remit the excise tax on casualty insurance premiums imposed
273	under s. 185.08 shall be held harmless from any liability for
274	taxes, interest, or penalties that would otherwise be due solely
275	as a result of an assignment of an insured property to an
276	incorrect local taxing jurisdiction if the insurance company
277	exercises due diligence in applying an electronic database
278	provided by the Department of Revenue under subsection (2).
279	Insurance companies that do not use the electronic database
280	provided by the Department of Revenue or that do not exercise
281	due diligence in applying the electronic database are subject to
282	a 0.5-percent penalty on the portion of the premium pertaining
283	to any insured risk that is improperly assigned, whether
284	assigned to an improper local taxing jurisdiction, not assigned
285	to a local taxing jurisdiction when it should be assigned to a
286	local taxing jurisdiction, or assigned to a local taxing
287	jurisdiction when it should not be assigned to a local taxing
288	jurisdiction.
289	(b) Any insurance company that is obligated to report and
290	remit the excise tax on commercial casualty insurance premiums
291	imposed under s. 185.08 and is unable, after due diligence, to
292	assign an insured property to a specific local taxing
293	jurisdiction for purposes of complying with paragraph (a) shall
294	remit the excise tax on commercial casualty insurance premiums
295	using a methodology of apportionment in a manner consistent with
296	the remittance for the 2002 calendar year.
297	(2)(a) The Department of Revenue shall, subject to
298	legislative appropriation, create as soon as practical and
299	feasible, and thereafter shall maintain, an electronic database
300	that gives due and proper regard to any format that is approved
301	by the American National Standards Institute's Accredited
302	Standards Committee X12 and that designates for each street
303	address and address range in the state, including any multiple
304	postal street addresses applicable to one street location, the
305	local taxing jurisdiction in which the street address and
306	address range is located and the appropriate code for each such
307	participating local taxing jurisdiction, identified by one
308	nationwide standard numeric code. The nationwide standard
309	numeric code must contain the same number of numeric digits, and
310	each digit or combination of digits must refer to the same level
311	of taxing jurisdiction throughout the United States and must be
312	in a format similar to FIPS 55-3 or other appropriate standard
313	approved by the Federation of Tax Administrators and the
314	Multistate Tax Commission. Each address or address range must be
315	provided in standard postal format, including the street number,
316	street number range, street name, and zip code. Each year after
317	the creation of the initial database, the Department of Revenue
318	shall annually create and maintain a database for the current
319	tax year. Each annual database must be calendar-year specific.
320	(b)1. Each participating local taxing jurisdiction shall
321	furnish to the Department of Revenue all information needed to
322	create the electronic database as soon as practical and
323	feasible. The information furnished to the Department of Revenue
324	must specify an effective date.
325	2. Each participating local taxing jurisdiction shall
326	furnish to the Department of Revenue all information needed to
327	create and update the current year's database, including changes
328	in annexations, incorporations, and reorganizations and any
329	other changes in jurisdictional boundaries, as well as changes
330	in eligibility to participate in the excise tax imposed under
331	this chapter. The information must specify an effective date and
332	must be furnished to the Department of Revenue by July 1 of the
333	current year.
334	3. The Department of Revenue shall create and update the
335	current year's database in accordance with the information
336	furnished by participating local taxing jurisdictions under
337	subparagraph 1. or subparagraph 2., as appropriate. To the
338	extent practicable, the Department of Revenue shall post each
339	new annual database on a web site by September 1 of each year.
340	Each participating local taxing jurisdiction shall have access
341	to this web site and, within 30 days thereafter, shall provide
342	any corrections to the Department of Revenue. The Department of
343	Revenue shall finalize the current year's database and post it
344	on a web site by November 1 of the tax year. If a dispute in
345	jurisdictional boundaries cannot be resolved so that changes in
346	boundaries may be included, as appropriate, in the database by
347	November 1, the changes may not be retroactively included in the
348	current year's database and the boundaries will remain the same
349	as in the previous year's database. The finalized database must
350	be used in assigning policies and premiums to the proper local
351	taxing jurisdiction for the insurance premium tax return due on
352	the following March 1. The Department of Revenue shall furnish
353	the annual database on magnetic or electronic media to any
354	insurance company or vendor that requests the database for the
355	sole purpose of assigning insurance premiums to the proper local
356	taxing jurisdiction for the excise tax imposed under this
357	chapter. Information contained in the electronic database is
358	conclusive for purposes of this chapter. The electronic database
359	is not an order, a rule, or a policy of general applicability.
360	4. Each annual database must identify the additions,
361	deletions, and other changes to the preceding version of the
362	database.
363	(3)(a) As used in this section, the term "due diligence"
364	means the care and attention that is expected from and is
365	ordinarily exercised by a reasonable and prudent person under
366	the circumstances.
367	(b) Notwithstanding any law to the contrary, an insurance
368	company is exercising due diligence if the insurance company
369	complies with the provisions of paragraph (1)(b) or if the
370	insurance company assigns an insured's premium to local taxing
371	jurisdictions in accordance with the Department of Revenue's
372	annual database and:
373	1. Expends reasonable resources to accurately and reliably
374	implement such method;
375	2. Maintains adequate internal controls to correctly
376	include in its database of policyholders the location of the
377	property insured, in the proper address format, so that matching
378	with the department's database is accurate; and
379	3. Corrects errors in the assignment of addresses to local
380	taxing jurisdictions within 120 days after the insurance company
381	discovers the errors.
382	(4) There is annually appropriated from the moneys
383	collected under this chapter and deposited in the Police and
384	Firefighter's Premium Tax Trust Fund an amount sufficient to pay
385	the expenses of the Department of Revenue in administering this
386	section, but not to exceed $50,000 annually, adjusted annually
387	by the lesser of a 5-percent increase or the percentage of
388	growth in the total collections.
389	(5) The Department of Revenue shall adopt rules necessary
390	to administer this section, including rules establishing
391	procedures and forms.
392	(6)(a) Notwithstanding any other provision of law, no
393	methodology, formula, or database that is adopted in any year
394	after January 1, 2004, may result in a distribution to a
395	participating municipality that has a retirement plan created
396	pursuant to this chapter of an amount of excise tax which is
397	less than the amount distributed to such participating
398	municipality for calendar year 2003. However, if the total
399	proceeds to be distributed for the current year from the excise
400	tax imposed under s. 185.08 are less than the total amount
401	distributed for calendar year 2003, each participating
402	municipality shall receive a current year distribution that is
403	proportionate to its share of the total 2003 calendar year
404	distribution. If the total proceeds to be distributed for the
405	current year from the excise tax imposed under s. 185.08 are
406	greater than or equal to the total amount distributed for
407	calendar year 2003, each participating municipality shall
408	initially be distributed a minimum amount equal to the amount
409	received for calendar year 2003. The remaining amount to be
410	distributed for the current year, which equals the total to be
411	distributed for the current year less minimum distribution
412	amount shall be distributed to those municipalities with a
413	current-year reported amount that is greater than the amount
414	distributed to such municipality for calendar year 2003. Each
415	municipality eligible for distribution of this remaining amount
416	shall receive its proportionate share of the remaining amount
417	based upon the amount reported for that municipality, above the
418	calendar year 2003 distribution for the current year, to the
419	total amount over the calendar year 2003 distribution for all
420	municipalities with a current year reported amount that is
421	greater than the calendar year 2003 distribution.
422	(b) If a new municipality elects to participate under this
423	chapter during any year after January 1, 2004, such municipality
424	shall receive the total amount reported for the current year for
425	such municipality. All other participating municipalities shall
426	receive a current year distribution, calculated as provided in
427	this section, which is proportionate to their share of the total
428	2003 calendar year distribution after subtracting the amount
429	paid to the new participating plans.
430	(c) This subsection expires January 1, 2007.
431	(7) Any insurer that is obligated to collect and remit the
432	tax on casualty insurance imposed under s. 185.08 shall be held
433	harmless from liability, including, but not limited to, any tax,
434	interest, or penalties, which would otherwise be due solely as a
435	result of an assignment of an insured risk to an incorrect local
436	taxing jurisdiction, based on the collection and remission of
437	the tax accruing before January 1, 2004, provided the insurer
438	collects and reports this tax consistent with filings for
439	periods before January 1, 2004. Further, any insurer that is
440	obligated to collect and remit the tax on casualty insurance
441	imposed under this section shall not be subject to an
442	examination under s. 624.316 or s. 624.3161 which would occur
443	solely as a result of an assignment of an insured risk to an
444	incorrect local taxing jurisdiction, based on the collection and
445	remission of such tax accruing before January 1, 2004.
446	Section 4. Subsection (1) of section 185.35, Florida
447	Statutes, is amended to read:
448	185.35 Municipalities having their own pension plans for
449	police officers.--For any municipality, chapter plan, local law
450	municipality, or local law plan under this chapter, in order for
451	municipalities with their own pension plans for police officers,
452	or for police officers and firefighters where included, to
453	participate in the distribution of the tax fund established
454	pursuant to s. 185.08, local law plans must meet the minimum
455	benefits and minimum standards set forth in this chapter:
456	(1) PREMIUM TAX INCOME.--If a municipality has a pension
457	plan for police officers, or for police officers and
458	firefighters where included, which, in the opinion of the
459	division, meets the minimum benefits and minimum standards set
460	forth in this chapter, the board of trustees of the pension
461	plan, as approved by a majority of police officers of the
462	municipality, may:
463	(a) Place the income from the premium tax in s. 185.08 in
464	such pension plan for the sole and exclusive use of its police
465	officers, or its police officers and firefighters where
466	included, where it shall become an integral part of that pension
467	plan and shall be used to pay extra benefits to the police
468	officers included in that pension plan; or
469	(b) May place the income from the premium tax in s. 185.08
470	in a separate supplemental plan to pay extra benefits to the
471	police officers, or police officers and firefighters where
472	included, participating in such separate supplemental plan.
473
474	The premium tax provided by this chapter shall in all cases be
475	used in its entirety to provide extra benefits to police
476	officers, or to police officers and firefighters, where
477	included. However, local law plans in effect on October 1, 1998,
478	shall be required to comply with the minimum benefit provisions
479	of this chapter only to the extent that additional premium tax
480	revenues become available to incrementally fund the cost of such
481	compliance as provided in s. 185.16(2). When a plan is in
482	compliance with such minimum benefit provisions, as subsequent
483	additional tax revenues become available, they shall be used to
484	provide extra benefits. For the purpose of this chapter,
485	"additional premium tax revenues" means revenues received by a
486	municipality pursuant to s. 185.10 that exceed the amount
487	received for calendar year 1997 and the term "extra benefits"
488	means benefits in addition to or greater than those provided to
489	general employees of the municipality and in addition to those
490	in existence for police officers on March 12, 1999. Local law
491	plans created by special act before May 23, 1939, shall be
492	deemed to comply with this chapter.
493	Section 5. The sum of $300,000 is appropriated from the
494	General Revenue Fund to the Department of Revenue for the one-
495	time expense of creating the original database called for by ss.
496	175.1015 and 185.085, Florida Statutes, as created by this act,
497	and to begin the implementation process for use of the database.
498	It is the intent of the Legislature in providing this
499	appropriation that the database for ss. 175.1015 and 185.085,
500	Florida Statutes, as created by this act, be available for use
501	in determining the allocation of premiums to the various
502	municipalities and special fire control districts for the 2004
503	insurance premium tax return that is due by March 1, 2005.
504	Section 6. This act shall take effect January 1, 2004.