Florida Senate - 2016 CS for SB 1652 By the Committee on Community Affairs; and Senators Bradley, Bean, and Hutson 578-02605-16 20161652c1 1 A bill to be entitled 2 An act relating to discretionary sales surtaxes; 3 amending s. 112.64, F.S.; authorizing a county to 4 apply proceeds of a pension liability surtax toward 5 reducing the unfunded liability of a defined benefit 6 retirement plan or system; specifying the method of 7 determining the amortization schedule if a surtax is 8 approved; amending s. 212.055, F.S.; authorizing a 9 county to levy a pension liability surtax by ordinance 10 if certain conditions are met; prescribing the form of 11 the ballot statement; requiring the Department of 12 Revenue and participating local governments to 13 distribute the surtax proceeds, less administrative 14 fees; requiring the ordinance to specify the method 15 and frequency of distributing proceeds; prohibiting a 16 defined benefit retirement plan or system from 17 receiving surtax proceeds after a certain level of 18 actuarial funding is reached; requiring that surtax 19 proceeds be used to reduce or amortize the unfunded 20 liability of the system or plan; specifying conditions 21 under which the surtax terminates; limiting the 22 combined rate of specified discretionary sales 23 surtaxes; providing an effective date. 24 25 Be It Enacted by the Legislature of the State of Florida: 26 27 Section 1. Subsection (6) of section 112.64, Florida 28 Statutes, is renumbered as subsection (7), and a new subsection 29 (6) is added to that section, to read: 30 112.64 Administration of funds; amortization of unfunded 31 liability.— 32 (6)(a) Notwithstanding any other provision of this part, 33 the proceeds of a pension liability surtax imposed by a county 34 pursuant to s. 212.055, which is levied for the purpose of 35 funding or amortizing the unfunded liability of a defined 36 benefit retirement plan or system, excluding the Florida 37 Retirement System, shall be actuarially recognized, and the 38 county shall apply the present value of the total projected 39 proceeds of the surtax to reduce the unfunded liability or to 40 amortize it as part of the county’s annual required 41 contribution, beginning with the fiscal year immediately 42 following approval of the pension liability surtax. The unfunded 43 liability amortization schedule must be adjusted beginning with 44 the fiscal year immediately following approval of the pension 45 liability surtax and amortized over a period of 30 years. 46 (b) The payroll of all employees in classifications covered 47 by a closed retirement plan or system that receives funds from 48 the pension liability surtax must be included in determining the 49 unfunded liability amortization schedule for the closed plan, 50 regardless of the plan in which the employees currently 51 participate, and the payroll growth assumption must be adjusted 52 to reflect the payroll of those employees when calculating the 53 amortization of the unfunded liability. 54 Section 2. Subsection (9) is added to section 212.055, 55 Florida Statutes, to read: 56 212.055 Discretionary sales surtaxes; legislative intent; 57 authorization and use of proceeds.—It is the legislative intent 58 that any authorization for imposition of a discretionary sales 59 surtax shall be published in the Florida Statutes as a 60 subsection of this section, irrespective of the duration of the 61 levy. Each enactment shall specify the types of counties 62 authorized to levy; the rate or rates which may be imposed; the 63 maximum length of time the surtax may be imposed, if any; the 64 procedure which must be followed to secure voter approval, if 65 required; the purpose for which the proceeds may be expended; 66 and such other requirements as the Legislature may provide. 67 Taxable transactions and administrative procedures shall be as 68 provided in s. 212.054. 69 (9) PENSION LIABILITY SURTAX.— 70 (a) The governing body of a county may levy a pension 71 liability surtax to fund underfunded defined benefit retirement 72 plans or systems, pursuant to an ordinance conditioned to take 73 effect upon approval by a majority vote of the electors of the 74 county voting in a referendum, at a rate that may not exceed 0.5 75 percent. The county may not impose a pension liability surtax 76 unless the underfunded defined benefit retirement plan or system 77 is below 80 percent of actuarial funding at the time the 78 ordinance or referendum is passed. The most recent actuarial 79 report submitted to the Department of Management Services 80 pursuant to s. 112.63 must be used to establish the level of 81 actuarial funding for purposes of determining eligibility to 82 impose the surtax. The governing body of a county may only 83 impose the surtax if: 84 1. The employees, including police officers and 85 firefighters, who enter employment on or after the date that the 86 local government meets the requirements for enacting the pension 87 liability surtax, may not enroll in a defined benefit retirement 88 plan or system that will receive the surtax proceeds. 89 2. The county currently levies a local government 90 infrastructure surtax pursuant to subsection (2) which is 91 scheduled to terminate and is not subject to renewal. 92 3. The pension liability surtax does not take effect until 93 the local government infrastructure surtax described in 94 subparagraph 2. is terminated. 95 (b) A referendum to adopt a pension liability surtax must 96 meet the requirements of s. 101.161 and must include a brief and 97 general description of the purposes for which the surtax 98 proceeds will be used. 99 (c) Pursuant to s. 212.054(4), the proceeds of the surtax 100 collected under this subsection, less an administrative fee that 101 may be retained by the department, shall be distributed by the 102 department to the local government. The local government shall 103 distribute the proceeds it receives from the department, less an 104 administrative fee not to exceed 2 percent of the surtax 105 collected, to an eligible defined benefit retirement plan or 106 system, except the Florida Retirement System. The ordinance 107 providing for the imposition of the pension liability surtax 108 must specify the method of determining the percentage of the 109 proceeds, and the frequency of such payments, distributed to 110 each eligible defined benefit retirement plan or system. The 111 pension liability surtax proceeds may be used only to reduce or 112 amortize the unfunded actuarial liability of the defined benefit 113 retirement plan or system. A defined benefit retirement plan or 114 system may no longer receive the surtax proceeds once the plan 115 or system reaches or exceeds 100 percent of actuarial funding. 116 If the local government makes advanced payments toward the 117 unfunded liability of an underfunded defined benefit retirement 118 plan or system which are secured by future revenues associated 119 with the surtax, the local government may fully reimburse itself 120 from the surtax proceeds for such payments. 121 (d) Notwithstanding s. 212.054(5), a pension liability 122 surtax imposed pursuant to this subsection shall terminate for 123 any defined benefit retirement plan or system when the actuarial 124 funding level of that plan or system reaches or exceeds 100 125 percent. 126 (e) Notwithstanding any other provision of this section, a 127 county may not levy local option sales surtaxes authorized in 128 this subsection and subsections (2), (3), (4), and (5) in excess 129 of a combined rate of 1 percent. 130 Section 3. This act shall take effect July 1, 2016.