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.