Committee Packet - Florida Senate Commerce and Tourism (February 15, 2021)

Summary

Committee packet for the Florida Senate Commerce and Tourism committee meeting of Monday, February 15, 2021, with Senator Hooper as Chair. Its expanded agenda lists SB 72, SB 374, SB 598, CS/SB 46, SB 602, SB 704, SB 734, SB 778 and SPB 7020 with bill descriptions, introducers and committee actions. The packet includes a Bill Analysis and Fiscal Impact Statement dated February 12, 2021 on SB 72, Civil Liability for Damages Relating to COVID-19. It states that SB 72 creates civil liability protections against COVID-19-related claims for individuals, businesses, governmental entities, and other organizations, but excludes healthcare providers.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Cite this document

“Committee Packet - Florida Senate Commerce and Tourism (February 15, 2021).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2021-02-15-post-meeting-packet-4710-309fc4452e/, SHA-256 493f6ccb70b5f87000b3b30188e9fac5e1938fa86fc4a5297ef423c037f2c345.

Full text

Selection From: 02/15/2021 - Commerce and Tourism (3:30 PM - 6:00 PM) 2021 Regular Session
Committee Packet 02/12/2021 3:31 PM
Agenda Order

SB 72 by Brandes (CO-INTRODUCERS) Perry, Baxley; (Identical to H 00007) Civil Liability for Damages
Tab 1
Relating to COVID-19
475864 A S CM, Torres btw L.163 - 164: 02/12 02:53 PM
407288 A S CM, Torres btw L.163 - 164: 02/12 02:54 PM

Tab 2 SB 374 by Bradley; (Identical to H 00511) Fair Repair of Agricultural Equipment

Tab 3 SB 598 by Perry; Back-to-school Sales Tax Holiday

Tab 4 CS/SB 46 by RI, Hutson; (Identical to H 00737) Craft Distilleries
406678 A S CM, Hutson btw L.252 - 253: 02/12 11:02 AM

Tab 5 SB 602 by Burgess; (Identical to H 00339) Business Organizations
454720 A S CM, Burgess btw L.427 - 428: 02/12 01:06 PM

SB 704 by Gruters (CO-INTRODUCERS) Stewart, Pizzo, Berman, Cruz, Hutson, Torres, Taddeo,
Tab 6
Hooper, Ausley, Harrell, Rouson, Wright, Bracy, Polsky; (Identical to H 00757) Entertainment Industry

Tab 7 SB 734 by Gruters; Sales Tax Holiday for Disaster Preparedness Supplies
906656 D S CM, Gruters Delete everything after 02/12 11:03 AM

Tab 8 SB 778 by Hooper; (Identical to H 00675) Florida Tourism Marketing

Tab 9 SPB 7020 by CM; OGSR/County Tourism Promotion Agencies/Florida Tourism Industry Marketing Corporation

Page 1 of 1
2021 Regular Session The Florida Senate
COMMITTEE MEETING EXPANDED AGENDA
COMMERCE AND TOURISM
Senator Hooper, Chair
Senator Wright, Vice Chair

MEETING DATE: Monday, February 15, 2021
TIME: 3:30—6:00 p.m.
PLACE: Toni Jennings Committee Room, 110 Senate Building

MEMBERS: Senator Hooper, Chair; Senator Wright, Vice Chair; Senators Burgess, Diaz, Garcia, Gruters,
Hutson, Pizzo, Powell, Taddeo, and Torres

BILL DESCRIPTION and
TAB BILL NO. and INTRODUCER SENATE COMMITTEE ACTIONS COMMITTEE ACTION

PUBLIC TESTIMONY WILL BE RECEIVED FROM ROOM A1 AT THE DONALD L.
TUCKER CIVIC CENTER, 505 W PENSACOLA STREET, TALLAHASSEE, FL 32301

1 SB 72 Civil Liability for Damages Relating to COVID-19;
Brandes Providing requirements for a civil action based on a
(Identical H 7) COVID-19-related claim; providing that the plaintiff
has the burden of proof in such action; providing a
statute of limitations; providing severability; providing
retroactive applicability, etc.

JU 01/25/2021 Favorable
CM 02/15/2021
RC

2 SB 374 Fair Repair of Agricultural Equipment; Citing this act
Bradley as the "Agricultural Equipment Fair Repair Act";
(Identical H 511) requiring original equipment manufacturers of
agricultural equipment to provide certain
manufacturing, diagnostic, and repair information to
independent repair providers and owners; prohibiting
the original equipment manufacturers from excluding
certain information concerning security-related
functions, etc.

AG 01/27/2021 Favorable
CM 02/15/2021
RC

3 SB 598 Back-to-school Sales Tax Holiday; Providing
Perry exemptions from the sales and use tax on the retail
sale of certain clothing, wallets, bags, school
supplies, personal computers, and personal
computer-related accessories during a specified
timeframe; defining terms; specifying locations where
the exemptions do not apply; authorizing certain
dealers to opt out of participating in the tax holiday,
subject to certain requirements, etc.

CM 02/15/2021
FT
AP

S-036 (10/2008)
02082021.1522 Page 1 of 3
COMMITTEE MEETING EXPANDED AGENDA
Commerce and Tourism
Monday, February 15, 2021, 3:30—6:00 p.m.

BILL DESCRIPTION and
TAB BILL NO. and INTRODUCER SENATE COMMITTEE ACTIONS COMMITTEE ACTION

4 CS/SB 46 Craft Distilleries; Authorizing craft distilleries to be
Regulated Industries / Hutson licensed as specified vendors under certain
(Identical H 737, Compare S 142) circumstances; requiring certain alcoholic beverages
to be obtained through a licensed distributor;
prohibiting a distillery from operating as a craft
distillery until certain requirements are met;
authorizing persons to have common ownership in
craft distilleries under certain circumstances; requiring
a minimum percentage of a craft distillery’s total
finished branded products to be distilled in this state
and contain one or more Florida agricultural products
after a specified date, etc.

RI 01/26/2021 Fav/CS
CM 02/15/2021
RC

5 SB 602 Business Organizations; Revising requirements
Burgess relating to inspecting certain records of limited liability
(Identical H 339) companies; revising the circumstances under which
shareholders are entitled to appraisal rights and
certain payments; entitling corporations to prepay a
shareholder if the shareholder makes a demand for
payment; revising requirements for proceedings
relating to unsettled demands for payment, etc.

CM 02/15/2021
JU
RC

6 SB 704 Entertainment Industry; Creating the Film, Television,
Gruters and Digital Media Targeted Rebate Program within
(Identical H 757) the Department of Economic Opportunity under the
supervision of the Commissioner of Film and
Entertainment; requiring that film, television, and
digital media projects being produced in this state
meet specified criteria for rebate eligibility; requiring
an applicant that receives funding to make a good
faith effort to use existing providers of infrastructure or
equipment in this state and to employ residents of this
state; requiring the Florida Film and Entertainment
Advisory Council to determine a score for each
qualified project using specified criteria, etc.

CM 02/15/2021
ATD
AP

S-036 (10/2008)
02082021.1522 Page 2 of 3
COMMITTEE MEETING EXPANDED AGENDA
Commerce and Tourism
Monday, February 15, 2021, 3:30—6:00 p.m.

BILL DESCRIPTION and
TAB BILL NO. and INTRODUCER SENATE COMMITTEE ACTIONS COMMITTEE ACTION

7 SB 734 Sales Tax Holiday for Disaster Preparedness
Gruters Supplies; Providing exemptions from the sales and
use tax for specified disaster preparedness supplies
during a specified timeframe; requiring purchasers of
certain items to furnish a specified affidavit and
information to the selling dealer; providing a criminal
penalty for furnishing a false affidavit with certain
intent; authorizing the Department of Revenue to
adopt emergency rules, etc.

CM 02/15/2021
FT
AP

8 SB 778 Florida Tourism Marketing; Authorizing the Florida
Hooper Tourism Industry Marketing Corporation to carry
(Identical H 675) forward unexpended state appropriations into
succeeding fiscal years; removing the scheduled
repeal of the corporation; removing the scheduled
repeal of the Division of Tourism Marketing within
Enterprise Florida, Inc., etc.

CM 02/15/2021
ATD
AP

Consideration of proposed bill:

9 SPB 7020 OGSR/County Tourism Promotion Agencies/Florida
Tourism Industry Marketing Corporation; Amending a
provision which provides an exemption from public
records requirements for trade secrets held by county
tourism promotion exemption; amending a provision
which provides an exemption from public records
requirements for the identity of a person who
responds to a marketing or advertising research
project conducted by the Florida Tourism Industry
Marketing Corporation and for certain trade secrets;
removing the scheduled repeal of the exemption, etc.

Other Related Meeting Documents

S-036 (10/2008)
02082021.1522 Page 3 of 3
The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)

Prepared By: The Professional Staff of the Committee on Commerce and Tourism

BILL: SB 72
INTRODUCER: Senator Brandes and others
SUBJECT: Civil Liability for Damages Relating to COVID-19
DATE: February 12, 2021 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Davis Cibula JU Favorable
2. Harmsen McKay CM Pre-meeting
3. RC

I. Summary:

SB 72 creates civil liability protections for individuals, businesses, governmental entities, and
other organizations against COVID-19-related claims. The bill, however, excludes healthcare
providers from the liability protections created in the bill.

The bill establishes preliminary requirements that a plaintiff must complete before the case is
allowed to proceed. A court must determine whether:
 The complaint was pled with particularity;
 A physician’s affidavit was simultaneously submitted stating that, within a reasonable degree
of medical certainty, the physician believed that the defendant caused, through acts or
omissions, the plaintiff’s damages, injury, or death. If the plaintiff did not meet these
requirements, the court must dismiss the action, but the plaintiff is not barred from correcting
the deficiencies and refiling the claim.
 The defendant made a good faith effort to substantially comply with authoritative or
controlling health standards when the action accrued. If the court determines that the
defendant made the requisite good faith effort, the defendant is immune from civil liability.
If, in contrast, the court determines that the defendant did not make the requisite good faith
effort, the action may proceed.

If a plaintiff meets these preliminary requirements, then he or she bears the burden of proving
that the defendant did not make the good faith effort. Additionally, the plaintiff must meet the
heightened standard of proving that the defendant’s acts or omissions were grossly negligent by
the clear and convincing evidence standard.

A COVID-19-related lawsuit must be brought within 1 year after a cause of action accrues unless
the cause of action occurred before the effective date of the bill. However, if a cause accrues
before the effective date of the bill, the plaintiff has 1 year from the effective date of the act to
bring the claim.
BILL: SB 72 Page 2

The bill takes effect upon becoming a law and applies retroactively. However, the bill does not
apply in a civil action against a particular defendant if the suit is filed before the bill’s effective
date.

II. Present Situation:

Background

The COVID-19 pandemic has affected the state of Florida in ways that were unimaginable one
year ago. The toll on individuals, businesses, and the economy has been catastrophic. According
to the Department of Health, 1,790,743 positive COVID-19 cases have been diagnosed in the
state, 74,884 residents have been hospitalized, and 28,048 people have died of the virus.1

As the pandemic forced businesses to close, millions of Americans lost their jobs. The U.S.
economy contracted at the greatest rate since World War II. In Florida, general revenue
collections for Fiscal Year 2019-20 were down nearly $1.9 billion from the forecast projections
made in January 2020. The vast majority of the loss, 84.7 percent, came from a loss of sales tax
revenues, the largest component and category most affected by the pandemic. The Revenue
Estimating Conference adopted a forecast for sales tax revenues in December 2020, as compared
to the January 2020 forecast, that anticipates a loss to General Revenue of approximately $2
billion in Fiscal Year 2020-21 and $1 billion in Fiscal Year 2021-22. The sales tax losses are
attributable to a substantial loss in the tourism and recreation areas, often driven by out-of-state
tourism, and also by reduced sales to local residents at restaurants and venues, including leisure
activities impacted by the pandemic.2

Governor DeSantis issued Executive Order No. 20-52 on March 9, 2020, declaring a state of
emergency and issuing guidelines to halt, mitigate, or reduce the spread of the outbreak. The
order has been extended 5 times,3 most recently by Executive Order No. 20-316, issued on
December 29, 2020.

During the pandemic, government-issued health standards and guidance detailing how to best
combat the virus have sometimes been in conflict. They sometimes changed rapidly, making
appropriate responses difficult. Businesses and individuals often scurried to provide appropriate
responses based upon the information they received at any given time.

As businesses and entities struggle to re-open or keep their doors open, a growing concern has
been expressed that unfounded or opportunistic lawsuits for COVID-19-related claims could
threaten their financial survival. The concern is that time, attention, and financial resources
diverted to respond to the lawsuits could be the difference between individuals and entities
1
Florida Department of Health, Division of Disease Control and Health Protection, Florida’s COVID-19 Data and
Surveillance Dashboard, https://experience.arcgis.com/experience/96dd742462124fa0b38ddedb9b25e429 (last visited Feb.
10, 2021).
2
Executive Summary, Revenue Estimating Conference for the General Revenue Fund & Financial Outlook Statement,
August 14, 2020, and subsequently updated. http://edr.state.fl.us/Content/conferences/generalrevenue/archives/200814gr.pdf
(last visited Feb. 12, 2021).
3
A state of emergency declared under the State Emergency Management Act may not last for more than 60 days unless it is
renewed by the Governor. Section 252.36(2), F.S.
BILL: SB 72 Page 3

succeeding or failing as they attempt to emerge from the pandemic. One protection that has been
offered is the provision of heightened legal immunity from COVID-19 claims to fend off
meritless lawsuits and preserve scant resources.

COVID-Related Lawsuits

According to the Congressional Research Service,4 a growing number of plaintiffs have filed tort
lawsuits in hopes of being compensated for personal injuries that resulted from alleged exposure
to COVID-19 or from the failure of a defendant to properly treat the virus. Some examples of the
lawsuits include:

 The relatives of deceased family members, who allegedly contracted the virus in the
workplace, have filed cases stating that the employers caused the decedents’ deaths because
they failed to implement workplace safety measures.

 Many cruise ship passengers have filed lawsuits against cruise lines alleging that the cruise
line exposed them to the virus or caused them to contract the virus while on a cruise.

 Plaintiffs have sued assisted living facilities and nursing homes. They allege that their
relatives died because these entities negligently exposed their relatives to the virus or failed
to diagnose them in a timely or appropriate manner, and then treat the symptoms.

 Businesses that folded have sued their insurance companies challenging the denial of their
coverage for claims of business interruptions.

 Consumers have filed suits seeking financial reimbursement for travel, events, and season
passes at recreational venues which were cancelled or closed because of the pandemic.

 Employees have sued their employers alleging that the employer unlawfully terminated them
because they contracted the virus.

 Stockholders have sued public companies alleging that the companies violated federal
securities laws when they did not accurately state the pandemic’s toll on the companies’
finances as required in mandatory disclosure statements.5

The Congressional Research Service states that proponents of COVID-19 liability protections
assert that litigation and the cost of legal fees will cripple businesses, individuals, schools, and
non-profit organizations and deter the organizations from reopening. Proponents are concerned
that these entities will shape their business decision-making to avoid liability. This unwillingness
to continue or reopen businesses will delay the national economic recovery. Others believe that

4
The Congressional Research Service works solely for the U.S. Congress and provides policy and legal analysis to both
members and committees of the House and Senate. It is a legislative branch agency housed within the Library of Congress.
https://www.loc.gov/crsinfo/.
5
Congressional Research Service, COVID-19 Liability: Tort, Workplace Safety, and Securities Law (Sept. 24, 2020),
https://crsreports.congress.gov/product/pdf/R/R46540 (last visited Feb. 12, 2021).
BILL: SB 72 Page 4

many COVID-19-realted claims “are generally meritless, and therefore serve primarily to benefit
plaintiffs’ lawyers rather than vindicate injured person’s legal rights.”6

In contrast, opponents of liability protections disagree. They maintain that organizations would
encounter only minimal legal exposure for COVID-19 liability. The opponents also contend that
providing a shield for defendants would harm the public by permitting defendants to commit
negligent acts with legal protections. It would also remove any incentives for businesses to take
precautions against the spread of the virus.7

Florida Lawsuits

It is difficult to determine how many COVID-19-related lawsuits have been filed in the state.
Staff contacted the Office of the State Courts Administrator to ask if it could determine how
many claims have been filed in the state courts. The office did not have that data available. One
database estimates that 582 complaints relating to COVID-19 have been filed in Florida, but this
data does not delineate between those which are filed in state courts versus federal courts. 8

Many of the claims that have been filed in the federal district courts of the state are suits against
cruise ship lines where passengers allege that they contracted the virus while on the cruise.

Legislative and Executive Responses of Other States

At least 14 states have enacted legislation to provide civil liability immunity to individuals and
entities from COVID-19-related claims.9 At least two additional states have issued executive
orders to provide liability limitations.10 These laws do not reflect separate healthcare liability
protections. To date, no similar federal legislation has been enacted, although S. 4317 was
introduced in the Senate on July 27, 2020, and referred to committee.11

In general terms, the legislation enacted by other states provides protections if a defendant acts in
good faith to substantially comply with the applicable COVID-19 standards. The immunity does
not apply if the defendant’s acts or omissions constitute gross negligence or willful or wanton
misconduct.

6
Id. at 2.
7
Id. at 3.
8
Hunton Andrews Kurth LLP, COVID-19 Complaint Tracker, https://www.huntonak.com/en/covid-19-tracker.html (last
visited Feb. 12, 2021).
9
The states are: Georgia, Idaho, Iowa, Kansas, Louisiana, Michigan, Mississippi, Nevada, North Carolina, Ohio, Oklahoma,
Tennessee, Utah, and Wyoming. Additional, and sometimes separate, legislation has been enacted by 17 states that provides
medical liability limitations for health care facilities and workers. The database was current as of December 14, 2020.
National Conference of State Legislatures, State Action on Coronavirus (COVID-19),
https://www.ncsl.org/research/health/state-action-on-coronavirus-covid-19.aspx#db (last visited Feb. 12, 2021).
10
Alabama Executive Order signed by Governor Kay Ivey on May 8, 2020, and Arkansas Executive Order 20-33 signed by
Governor Asa Hutchison on June 5, 2020.
11
Safe to Work Act, s. 4317 –116th Cong. (2020) https://www.congress.gov/bill/116th-congress/senate-bill/4317/actions (last
visited Feb. 12, 2021).
BILL: SB 72 Page 5

Torts: Negligence, Elements, and Standards

A tort is a civil legal action to recover damages for a loss, injury, or death due to the conduct of
another. Some have characterized a tort as a civil wrong, other than a claim for breach of
contract, in which a remedy is provided through damages.12 When a plaintiff files a tort claim, he
or she alleges that the defendant’s “negligence” caused the injury. Negligence is defined as the
failure to use reasonable care. It means the care that a reasonably careful person would use under
similar circumstances. According to the Florida Standard Jury Instructions, negligence means
“doing something that a reasonably careful person would not do” in a similar situation or “failing
to do something that a reasonably careful person would do” in a similar situation.13

When a plaintiff seeks to recover damages for a personal injury and alleges that the injury was
caused by the defendant’s negligence, the plaintiff bears the legal burden of proving that the
defendant’s alleged action was a breach of the duty that the defendant owed to the plaintiff.14

Negligence Pleadings
To establish a claim for relief and initiate a negligence lawsuit, a plaintiff must file a
“complaint.” The complaint must state a cause of action and contain: a short and plain statement
establishing the court’s jurisdiction, a short and plain statement of the facts showing why the
plaintiff is entitled to relief, and a demand for judgment for relief that the plaintiff deems himself
or herself entitled. The defendant responds with an “answer,” and provides in short and plain
terms the defenses to each claim asserted, admitting or denying the averments in response.15

Under the Florida Rules of Civil Procedure, there is a limited group of allegations that must be
pled with “particularity.” These allegations include allegations of fraud, mistake, and a denial of
performance or occurrence.16

Four Elements of a Negligence Claim
To establish liability, the plaintiff must prove four elements:
Duty – That the defendant owed a duty, or obligation, of care to the plaintiff;
Breach – That the defendant breached that duty by not conforming to the standard required;
Causation – That the breach of the duty was the legal cause of the plaintiff’s injury; and
Damages – That the plaintiff suffered actual harm or loss.

Burden or Standard of Proof
A “burden of proof” is the obligation a party bears to prove a material fact. The “standard of
proof” is the level or degree to which an issue must be proved.17 The plaintiff carries the burden

12
BLACK’S LAW DICTIONARY (11th ed. 2019).
13
Fla. Std. Jury Instr. Civil 401.3, Negligence.
14
Florida is a comparative negligence jurisdiction as provided in s. 768.81(2), F.S. In lay terms, if a plaintiff and defendant
are both at fault, a plaintiff may still recover damages, but those damages are reduced proportionately by the degree that the
plaintiff’s negligence caused the injury.
15
Fla. R. Civ. P. 1.110.
16
Fla. R. Civ. P. 1.120(b) and (c).
17
5 Fla. Prac. Civil Practice s. 16.1, (2020 ed.)
BILL: SB 72 Page 6

of proving, by a specific legal standard, that the defendant breached the duty that was owed to
the plaintiff that resulted in the injury. In civil cases, two standards of proof generally apply:
 The “greater weight of the evidence” standard, which applies most often in civil cases, or
 The “clear and convincing evidence” standard, which applies less often, and is a higher
standard of proof.18

However, both of these standards are lower than the “reasonable doubt” standard which is used
in criminal prosecutions.”19 Whether the greater weight standard or clear and convincing
standard applies is determined by case law or the statutes that govern the underlying substantive
issues.20

Greater Weight of the Evidence
The greater weight of the evidence standard of proof means “the more persuasive and convincing
force and effect of the entire evidence in the case.”21 Some people explain the “greater weight of
the evidence” concept to mean that, if each party’s evidence is placed on a balance scale, the side
that dips down, even by the smallest amount, has met the burden of proof by the greater weight
of the evidence.

Clear and Convincing
The clear and convincing standard, a higher standard of proof than a preponderance of the
evidence, requires that the evidence be credible and the facts which the witness testifies to must
be remembered distinctly. The witness’s testimony “must be precise and explicit and the
witnesses must be lacking in confusion as to the facts in issue.” The evidence must be so strong
that it guides the trier of fact to a firm conviction, to which there is no hesitation, that the
allegations are true.22

Standards of Care and Degrees of Negligence
Courts have developed general definitions for the degrees of negligence.

Slight Negligence
Slight negligence is generally defined to mean the failure to exercise a great amount of care. 23

Ordinary Negligence
Ordinary negligence, which is also referred to as simple negligence, is the standard of care
applied to the vast majority of negligence cases. It is characterized as the conduct that a
reasonable and prudent person would know could possibly cause injury to a person or property.24

18
Id.
19
Thomas D. Sawaya, Florida Personal Injury Law and Practice with Wrongful Death Actions, s. 24:4 (2020).
20
5 Fla. Prac. Civil Practice s. 16.1 (2020 ed.).
21
Fla. Std. Jury Instr. 401.3, Greater Weight of the Evidence.
22
Slomowitz v. Walker, 429 So. 2d 797, 800 (Fla. 4th DCA 1983) as discussed in the Sawaya treatise, supra at note 19.
23
Sawaya, supra at s. 2:12.
24
Id.
BILL: SB 72 Page 7

Gross Negligence
Gross negligence means the failure of a person to exercise slight care. Florida courts have
defined gross negligence as the type of conduct that a “reasonably prudent person knows will
probably and most likely result in injury to another” person.25

In order for a plaintiff to succeed on a claim involving gross negligence, he or she must prove:
 Circumstances, which, when taken together, create a clear and present danger;
 Awareness that the danger exists; and
 A conscious, voluntary act or omission to act, that will likely result in an injury.26, 27

Access to Courts – Kluger v. White

The State Constitution provides in Article 1, s. 21, the “Access to courts” section,

The courts shall be open to every person for redress of any injury, and justice
shall be administered without sale, denial or delay.

Case law has demonstrated, however, that this provision is not absolute. In 1973, the Florida
Supreme Court issued an opinion, Kluger v. White,28 a case which construed the access to courts
provision. In broad terms, the case before the Court involved the abolition of a statute governing
a tort action for property damage in an automobile accident case. When the Legislature abolished
the remedy, it did not provide an alternative protection to the injured party.

The Court was confronted with the issue of whether the Legislature could abolish a right of
access to the courts. The Court determined that the Legislature may not abolish a pre-1968
common law right or a statutory cause of action unless the Legislature provides a reasonable
alternative to that action or unless an overpowering public necessity exists for abolishing the
right of action. The Court applies a three-part test to determine whether a statute violates the
access to courts provision:
 Does the change abolish a preexisting right of access?
 If so, whether a reasonable alternative exists to protect that preexisting right of access.
 If no reasonable alternative exists, whether an overwhelming public necessity exists.29

Restrictions on the ability to bring a lawsuit have been upheld as constitutional, but the point at
which a restriction becomes an unconstitutional bar is not well defined.

Statute of Limitations

A statute of limitations establishes a time limit for a plaintiff to file an action, or the case will be
barred. An action for a negligence claim must be brought within 4 years after the cause of action
accrues.30

25
Id.
26
Id.
27
Culpable negligence is a fourth degree of negligence but is not discussed in this analysis.
28
Kluger v. White, 281 So. 2d 1 (Fla. 1973).
29
Eller v. Shova, 630 So. 2d 537 (Fla. 1993).
30
Section 95.11(3), F.S.
BILL: SB 72 Page 8

Statutes of limitations are created to encourage a plaintiff to initiate an action while witnesses
and evidence can be found. They also serve as a shield to protect a defendant from having to
defend against a claim that occurred so long ago that precise memories have grown hazy.31 A
statute of limitations begins to run when the cause of action accrues. A cause of action accrues
when the last element constituting the cause of action occurs.32 In a personal injury action based
on the negligent act of another, the last element occurs when the plaintiff is injured.33

Retroactive Application of a Statute

Under Florida law, statutes are presumed to operate prospectively, not retroactively. In other
words, statutes generally apply only to actions that occur on or after the effective date of the
legislation, not before the legislation becomes effective.

The Florida Supreme Court has noted that, under the rules of statutory construction, if statutes
are to operate retroactively, the Legislature must clearly express that intent for the statute to be
valid.34 When statutes that are expressly retroactive have been litigated and appealed, the courts
have been asked to determine whether the statute applies to cases that were pending at the time
the statute went into effect. The conclusion often turns on whether the statute is procedural or
substantive.

In a recent Florida Supreme Court case, the Court acknowledged that “[t]he distinction between
substantive and procedural law is neither simple nor certain.”35 The Court further acknowledged
that their previous pronouncements regarding the retroactivity of procedural laws have been less
than precise and have been unclear.36

Courts, however, have invalidated the retroactive application of a statute if the statute impairs
vested rights, creates new obligations, or imposes new penalties.37 Still, in other cases, the courts
have permitted statutes to be applied retroactively if they do not create new, or take away, vested
rights, but only operate to further a remedy or confirm rights that already exist.38

In a case challenging the application of an increase in the standard of proof from a
preponderance of the evidence to the clear and convincing evidence standard after the plaintiff
had filed a complaint, the court concluded that the statute could apply retroactively.39 The
Florida Supreme Court has noted that burden of proof requirements are procedural and may be
abrogated retroactively because litigants do not have a vested right in a method of procedure.40

31
35 Fla. Jur 2d Limitations and Laches s. 1 (2020).
32
Section 95.031(1), F.S.
33
35 Fla. Jur 2d Limitations and Laches s. 65 (2020).
34
Walker & LaBerge, Inc., v. Halligan, 344 So. 2d 239 (Fla. 1977).
35
Love v. State, 286 So. 3d 177, 183 (Fla. 2019) quoting Caple v. Tuttle’s Design-Build, Inc., 753 So. 2d 49, 53 (Fa. 2000).
36
Love at 184.
37
R.A.M. of South Florida, Inc. v. WCI Communities, Inc., 869 So. 2d 1210 (Fla 2004).
38
Ziccardi v. Strother, 570 So. 2d 1319 (Fla. 1990).
39
Stein v.Miller Industries, Inc., 564 So. 2d 539 (Fla. 4th DCA 1990).
40
Walker & LaBerge, Inc. v. Halligan, 344 So. 2d 239, 243 (Fla. 1977).
BILL: SB 72 Page 9

The Court also permitted retroactive application of a statute that altered the plaintiff’s burden of
proof.41

III. Effect of Proposed Changes:

SB 72 provides heightened liability protections against COVID-19-related claims due to the
threat of unknown and potentially unbounded liability claims that may arise from the pandemic.
The protections are extended widely to all persons, businesses, or other entities except for
healthcare providers.

WHEREAS Clauses

According to the “Whereas Clauses” the State continues to operate under a declared state of
emergency, but one in which Floridians must be allowed to earn a living and support their
families, and one in which businesses are encouraged to operate safely and contribute to the
state’s success, well-being, and economic recovery. Because the Legislature recognizes the
significant risks that businesses, entities, and institutions accept to provide services to the public
during the pandemic, the Legislature is willing to extend protections to alleviate liability
concerns, while continuing to provide for the public health. The final clause notes that the
Legislature finds that the unprecedented nature of the COVID-19 pandemic, and the indefinite
legal environment that has followed, require swift and decisive action.

Legislative Findings

According to the legislative findings, the creation of heightened legal protections is necessary to
reduce the threat of unlimited liability and legal exposure for businesses, educational institutions,
governmental entities, and religious institutions as they seek to recover and contribute to the
well-being of the state. The legislative findings conclude that there are no alternative means to
meet this public necessity of providing legal protections caused by the sudden and unprecedented
nature of the COVID-19 pandemic. Therefore, the public interest, as a whole, is best served by
providing relief to these entities so that they may remain viable and contribute to the economic
recovery of the state.

Legislative findings have a unique place in case law. The Florida Supreme Court has determined
that they are to be given great weight. In the case of University of Miami v. Echarte case, the
Court stated that “legislative determinations of public purpose and facts are presumed correct
and entitled to deference, unless clearly erroneous.”42 The Court reflected on the Kluger decision
and referred to its test. The Court also examined whether the Legislature expressly found that no
alternative or less onerous method existed, thereby establishing a necessary requirement.

41
Love, supra.
42
University of Miami v. Echarte, 618 So. 2d 189, 196 (Fla. 1993).
BILL: SB 72 Page 10

Pursuing a COVID-19 –Related Claim

A COVID-19-related Claim Defined and Who is Protected Under the Bill
A COVID-19-related claim is defined as a civil liability claim for damages, injury, or death that
arises from, or is related to, COVID-19.43 The bill provides protections for any civil liability
claim against a person,44 a natural person, business entity, including certain charitable
organizations and non-profits, a public or non-public educational institution, a governmental
entity, or a religious institution. Although the bill extensively defines what or who a healthcare
provider is, healthcare providers are excluded from the liability protections established by the
bill. The bill provides definitions for an educational institution, governmental entity, healthcare
provider, and a religious institution.

Preliminary Procedures for a Plaintiff
The bill requires two preliminary steps from a plaintiff. In each civil action for a COVID-19-
related claim, a plaintiff must:
 Set forth the pleadings with particularity; and
 Provide, at the same time that the complaint is filed, an affidavit signed by a physician,
stating that the plaintiff’s COVID-19-related claim for damages, injury, or death was caused
by the defendant’s acts or omissions. The physician who submits an affidavit must be
actively licensed in the state. Additionally, the physician must state that it is his or her belief,
within a reasonable degree of medical certainty, that the plaintiff’s COVID-related damages,
injury, or death occurred as a result of the defendant’s acts or omissions.

These preliminary procedures are similar to the pre-suit investigation requirements for a claimant
filing a medical malpractice claim. According to s. 766.104(1), F.S., the attorney filing the action
must make a reasonable investigation to determine that there are grounds for a good-faith belief
that negligence has occurred in the care or treatment of the claimant. The complaint or initial
pleading must contain a certificate of counsel stating that a reasonable investigation supported
the belief that there are grounds for an action against the defendant. Good faith may be
demonstrated if the claimant or counsel has received a written opinion from an expert that there
appears to be evidence of medical negligence. If the court determines that the certificate was not
made in good faith and that there is no justiciable issue presented against the health care
provider, the court must award attorney fees and taxable costs against the claimant’s counsel and
must submit the matter to The Florida Bar for disciplinary review against the attorney.

The Court’s Responsibilities

Before a trial may proceed, a court must determine whether:

43
A “COVID-19-related claim” is defined as” a civil liability claim against a person, including a natural person, a business
entity, an educational institution, a governmental entity, or a religious institution which arises from or is related to COVID-
19, otherwise known as the novel coronavirus. The term includes any such claim for damages, injury, or death. Any such
claim, no matter how denominated, is a COVID-19 related claim for purposes of this section. The term does not include a
claim against a healthcare provider, regardless of whether the healthcare provider meets one or more of the definitions in this
subsection.”
44
A “person” is broadly defined in the statutes to include individuals, children, firms, associations, joint adventures,
partnerships, estates, trusts, business trusts, syndicates, fiduciaries, corporations, and all other groups or combinations.
Section 1.01(3), F.S.
BILL: SB 72 Page 11

 The plaintiff submitted a complaint that was pled with particularity; and
 The physician’s affidavit complied with the necessary requirements.

If the plaintiff did not meet these two requirements, the court must dismiss the case without
prejudice, meaning that the plaintiff is not prohibited from correcting deficiencies and refiling
the claim.

The court must also determine whether a defendant made a good faith effort to substantially
comply with authoritative or controlling government-issued health standards or guidance at the
time that the cause of action accrued. At this stage of the proceeding, the only admissible
evidence is limited to evidence pertinent to whether the defendant made a good faith effort to
comply with the health standards of guidance.

If the court decides that the defendant met the good faith compliance burden, the defendant is
immune from civil liability and the proceeding ends. However, if the court determines that the
defendant did not make a good faith effort, the plaintiff may proceed. In order to prevail, the
plaintiff must demonstrate that the defendant acted with at least gross negligence which is proven
by clear and convincing evidence. If these two burdens are not met, the defendant will not be
held liable for an act or omission pertaining to a COVID-19-related claim. The plaintiff bears the
burden of proving that the defendant did not make a good faith effort to substantially comply
with the authoritative or controlling government-issued health standards or guidance that were in
place at the time the action accrued.

The Plaintiff’s Burden to Prove Gross Negligence by the Clear and Convincing Standard

As discussed above in the “Present Situation,” gross negligence is defined as the type of conduct
that a reasonably prudent person knows will probably and most likely result in an injury to
another person. Under this standard, a plaintiff will need to prove that the defendant’s conduct
was grossly negligent, meaning that the likelihood of injury to another person was known by the
defendant to be imminent.

The plaintiff will need to demonstrate gross negligence by the “clear and convincing” standard of
evidence. This is applied less often in civil cases and is a higher standard of proof than the
greater weight of the evidence standard. To meet this standard, the plaintiff must provide
evidence that is credible, that is remembered distinctly by the witness, and must be so strong that
the trier of fact has a firm conviction, without hesitation, that the allegations are true.

Taken together, a plaintiff has high burdens to prevail in a COVID-19-related claim.

Statute of Limitations

SB 72 requires a plaintiff to bring a civil action within 1 year after the cause of action accrues.
Generally, a negligence action must be brought within 4 years after a cause of action accrues.
Therefore, this bill reduces the amount of time that a plaintiff has to bring an action. If, however,
the cause of action accrues before the effective date of the bill, which is the date it becomes law,
the plaintiff has one year from the effective date of the bill to bring a claim. While this could be a
reduction in the amount of time that a plaintiff has to bring a COVID-19-related claim, there is
BILL: SB 72 Page 12

precedent for this. Court opinions have held that a reduction in the statute of limitations is not
unconstitutional if the claimant is given a reasonable amount of time to file the action.45

Retroactive Application

This act takes effect upon becoming a law and applies retroactively. The bill applies retroactively
to actions filed after the effective date of the bill even if the action accrued before the effective
date. The bill, however, does not apply to a claim that is filed against a particularly named
defendant before the effective date of the bill.

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

None.

B. Public Records/Open Meetings Issues:

None.

C. Trust Funds Restrictions:

None.

D. State Tax or Fee Increases:

None.

E. Other Constitutional Issues:

None identified.

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

None.

B. Private Sector Impact:

The Florida Bar submitted a brief response on the Agency Bill Analysis Request form
and stated that it had not identified any fiscal impact with the proposed legislation. The
response also stated that The Florida Bar would not be providing an analysis for the bill
and does not have an official legislative position for the proposed legislation.46

45
Foley v. Morris, 339 So. 2d 215 (Fla. 1976).
46
The Florida Bar, SB 72 Analysis, (Jan. 12, 2021) (on file with the Senate Committee on Commerce and Tourism).
BILL: SB 72 Page 13

C. Government Sector Impact:

The Office of the State Courts Administrator states that the bill’s impact on the judicial
workload cannot be quantified with data that is currently available. The analysis stated,
however, that the bill is not anticipated to create a significant increase to the judicial
workload. The analysis did note that the Rules of Civil Procedure and jury instructions
might need to be reviewed and revised to make certain that they accommodate the new
procedures created in the bill. The analysis also stated that the additional requirements for
plaintiffs could result in fewer COVID-19-related cases being filed, possibly reducing
revenues from civil filing fees, but there is not enough information to accurately
determine this.47

VI. Technical Deficiencies:

None.

VII. Related Issues:

None.

VIII. Statutes Affected:

This bill creates s. 768.38 of the Florida Statutes.

IX. Additional Information:

A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)

None.

B. Amendments:

None.

This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.

47
Office of the State Courts Administrator, 2021 Judicial Impact Statement, SB 72 (Jan. 21, 2021)
http://abar.laspbs.state.fl.us/ABAR/Attachment.aspx?ID=31076 (last visited Feb. 12, 2021).
Florida Senate - 2021 COMMITTEE AMENDMENT
Bill No. SB 72

Ì475864LÎ475864

LEGISLATIVE ACTION
Senate . House
.
.
.
.
.

The Committee on Commerce and Tourism (Torres) recommended the
following:

1 Senate Amendment (with title amendment)
2
3 Between lines 163 and 164
4 insert:
5 (5)(a) For the purposes of benefits provided under chapters
6 112 and 440 and any other benefits provided by law to
7 individuals suffering injury or illness through the course and
8 scope of employment, the following individuals shall be presumed
9 to have contracted COVID-19 in the course and scope of his or
10 her employment:

Page 1 of 3
2/12/2021 2:02:33 PM 577-02086-21
Florida Senate - 2021 COMMITTEE AMENDMENT
Bill No. SB 72

Ì475864LÎ475864

11 1. A person licensed under chapter 458, chapter 459,
12 chapter 461, chapter 463, chapter 464, chapter 465, chapter 466,
13 or chapter 483;
14 2. An employee of a:
15 a. Facility licensed, certified, or approved by any state
16 agency and for which chapter 395, chapter 400, chapter 429, or
17 chapter 766 apply;
18 b. Federally qualified health center as defined in 42
19 U.S.C. s. 1396d(l)(2)(B); or
20 c. Sole proprietorship, group practice, partnership, or
21 corporation that provides health care services by physicians
22 covered by s. 627.419, that is directly supervised by one or
23 more of such physicians, and that is wholly owned by one or more
24 of those physicians or by a physician and the spouse, parent,
25 child, or sibling of that physician;
26 3. An emergency medical technician as defined in s.
27 401.23(11); or
28 4. A paramedic as defined in 401.23(17).
29 (b) The presumption in paragraph (a) may be rebutted if the
30 defendant proves by clear and convincing evidence that the
31 individual’s infection did not arise out of the course and scope
32 of his or her employment.
33
34 ================= T I T L E A M E N D M E N T ================
35 And the title is amended as follows:
36 Delete line 8
37 and insert:
38 providing a statute of limitations; providing that
39 certain individuals are presumed to have contracted

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Florida Senate - 2021 COMMITTEE AMENDMENT
Bill No. SB 72

Ì475864LÎ475864

40 COVID-19 in the course and scope of their employment;
41 specifying how a defendant may rebut such presumption;
42 providing

Page 3 of 3
2/12/2021 2:02:33 PM 577-02086-21
Florida Senate - 2021 COMMITTEE AMENDMENT
Bill No. SB 72

Ì407288NÎ407288

LEGISLATIVE ACTION
Senate . House
.
.
.
.
.

The Committee on Commerce and Tourism (Torres) recommended the
following:

1 Senate Amendment (with title amendment)
2
3 Between lines 163 and 164
4 insert:
5 (5) Any business that is insured under an insurance policy
6 providing coverage for premises liability shall receive a rebate
7 of any insurance premiums paid or accrued from an insurance
8 carrier or insurance provider for any period where the business
9 was unable to use the business premises due to authoritative or
10 controlling government-issued health standards or guidance.

Page 1 of 2
2/12/2021 1:57:49 PM 577-02089-21
Florida Senate - 2021 COMMITTEE AMENDMENT
Bill No. SB 72

Ì407288NÎ407288

11
12 ================= T I T L E A M E N D M E N T ================
13 And the title is amended as follows:
14 Delete line 8
15 and insert:
16 providing a statute of limitations; requiring that
17 certain businesses receive rebates from insurance
18 carriers or providers for any period where the
19 business was unable to use the business premises due
20 to certain government-issued standards or guidance;
21 providing

Page 2 of 2
2/12/2021 1:57:49 PM 577-02089-21
Florida Senate - 2021 SB 72 Florida Senate - 2021 SB 72

By Senator Brandes

24-00824B-21 202172__ 24-00824B-21 202172__
1 A bill to be entitled 30 WHEREAS, Floridians must be allowed to earn a living and
2 An act relating to civil liability for damages 31 support their families without unreasonable government
3 relating to COVID-19; creating s. 768.38, F.S.; 32 intrusion, and
4 providing legislative findings and intent; defining 33 WHEREAS, the Governor’s responsible reopening strategy
5 terms; providing requirements for a civil action based 34 allowed businesses to continue to safely operate, bolstering
6 on a COVID-19-related claim; providing that the 35 consumer confidence, while also enforcing reasonable
7 plaintiff has the burden of proof in such action; 36 restrictions, and
8 providing a statute of limitations; providing 37 WHEREAS, the Legislature recognizes that certain
9 severability; providing retroactive applicability; 38 businesses, entities, and institutions operating within the
10 providing an effective date. 39 state are essential to the state’s continuing success and well-
11 40 being, and
12 WHEREAS, on March 9, 2020, Governor Ron DeSantis issued 41 WHEREAS, the Legislature recognizes that many businesses,
13 Executive Order Number 20-52 declaring a state of emergency for 42 entities, and institutions accept significant risk in order to
14 the State of Florida due to the COVID-19 pandemic, and 43 provide their services to the public, and
15 WHEREAS, in light of the ongoing nature of the COVID-19 44 WHEREAS, the Legislature further recognizes that the threat
16 pandemic, the Governor has repeatedly extended the state of 45 of frivolous and potentially limitless civil liability,
17 emergency, including most recently on December 29, 2020, in 46 especially in the wake of a pandemic, causes businesses,
18 Executive Order Number 20-316, and 47 entities, and institutions to react in a manner detrimental to
19 WHEREAS, the State of Florida continues under a declared 48 the state’s economy and residents, and
20 state of emergency, and 49 WHEREAS, the Legislature recognizes that practical, bright-
21 WHEREAS, throughout the declared state of emergency, the 50 line guidance protecting prudent businesses, entities, and
22 Governor’s executive orders included industry-specific 51 institutions significantly alleviates such liability concerns,
23 restrictions to prevent the spread of COVID-19 based on the best 52 while also continuing to provide for the public health, and
24 information available at the time, allowing and encouraging 53 WHEREAS, the Legislature finds that the unprecedented and
25 certain businesses to continue to safely operate, and 54 rare nature of the COVID-19 pandemic, together with the
26 WHEREAS, a strong and vibrant economy is essential to 55 indefinite legal environment that has followed, requires the
27 ensure that Floridians may continue in their meaningful work and 56 Legislature to act swiftly and decisively, NOW, THEREFORE,
28 ultimately return to the quality of life they enjoyed before the 57
29 COVID-19 outbreak, and 58 Be It Enacted by the Legislature of the State of Florida:

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Florida Senate - 2021 SB 72 Florida Senate - 2021 SB 72

24-00824B-21 202172__ 24-00824B-21 202172__
59 88 (b) “COVID-19-related claim” means a civil liability claim
60 Section 1. Section 768.38, Florida Statutes, is created to 89 against a person, including a natural person, a business entity,
61 read: 90 an educational institution, a governmental entity, or a
62 768.38 Liability protections for COVID-19-related claims.— 91 religious institution which arises from or is related to COVID-
63 (1) The Legislature finds that the COVID-19 outbreak in the 92 19, otherwise known as the novel coronavirus. The term includes
64 state threatens the continued viability of certain business 93 any such claim for damages, injury, or death. Any such claim, no
65 entities, educational institutions, governmental entities, and 94 matter how denominated, is a COVID-19-related claim for purposes
66 religious institutions that contribute to the overall well-being 95 of this section. The term does not include a claim against a
67 of the state. The threat of unknown and potentially unbounded 96 healthcare provider, regardless of whether the healthcare
68 liability to such businesses, entities, and institutions, in the 97 provider meets one or more of the definitions in this
69 wake of a pandemic that has already left many of these 98 subsection.
70 businesses, entities, and institutions vulnerable, has created 99 (c) “Educational institution” means a school, including a
71 an overpowering public necessity to provide an immediate and 100 preschool, elementary school, middle school, junior high school,
72 remedial legislative solution. Therefore, the Legislature 101 secondary school, career center, or postsecondary school,
73 intends for certain business entities, educational institutions, 102 whether public or nonpublic.
74 governmental entities, and religious institutions to enjoy 103 (d) “Governmental entity” means the state or any political
75 heightened legal protections against liability as a result of 104 subdivision thereof, including the executive, legislative, and
76 the COVID-19 pandemic. The Legislature also finds that there are 105 judicial branches of government; the independent establishments
77 no alternative means to meet this public necessity, especially 106 of the state, counties, municipalities, districts, authorities,
78 in light of the sudden, unprecedented nature of the COVID-19 107 boards, or commissions; or any agencies that are subject to
79 pandemic. The Legislature finds the public interest as a whole 108 chapter 286.
80 is best served by providing relief to these businesses, 109 (e) “Healthcare provider” means:
81 entities, and institutions so that they may remain viable and 110 1. A provider as defined in s. 408.803.
82 continue to contribute to the state. 111 2. A clinical laboratory providing services in the state or
83 (2) As used in this section, the term: 112 services to health care providers in the state, if the clinical
84 (a) “Business entity” has the same meaning as provided in 113 laboratory is certified by the Centers for Medicare and Medicaid
85 s. 606.03. The term also includes a charitable organization as 114 Services under the federal Clinical Laboratory Improvement
86 defined in s. 496.404 and a corporation not for profit as 115 Amendments and the federal rules adopted thereunder.
87 defined in s. 617.01401. 116 3. A federally qualified health center as defined in 42

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24-00824B-21 202172__ 24-00824B-21 202172__
117 U.S.C. s. 1396d(l)(2)(B), as that definition exists on the 146 is limited to evidence tending to demonstrate whether the
118 effective date of this act. 147 defendant made such a good faith effort.
119 4. Any site providing health care services which was 148 b. If the court determines that the defendant made such a
120 established for the purpose of responding to the COVID-19 149 good faith effort, the defendant is immune from civil liability.
121 pandemic pursuant to any federal or state order, declaration, or 150 c. If the court determines that the defendant did not make
122 waiver. 151 such a good faith effort, the plaintiff may proceed with the
123 5. A health care practitioner as defined in s. 456.001. 152 action. However, absent at least gross negligence proven by
124 6. A health care professional licensed under part IV of 153 clear and convincing evidence, the defendant is not liable for
125 chapter 468. 154 any act or omission relating to a COVID-19-related claim.
126 7. A home health aide as defined in s. 400.462(15). 155 (d) The burden of proof is upon the plaintiff to
127 (f) “Religious institution” has the same meaning as 156 demonstrate that the defendant did not make a good faith effort
128 provided in s. 496.404. 157 under subparagraph (c)2.
129 (3) In a civil action based on a COVID-19-related claim: 158 (4) A civil action for a COVID-19-related claim must be
130 (a) The complaint must be pled with particularity. 159 commenced within 1 year after the cause of action accrues.
131 (b) At the same time the complaint is filed, the plaintiff 160 However, a plaintiff whose cause of action for a COVID-19-
132 must submit an affidavit signed by a physician actively licensed 161 related claim accrued before the effective date of this act must
133 in the state which attests to the physician’s belief, within a 162 commence such action within 1 year of the effective date of this
134 reasonable degree of medical certainty, that the plaintiff’s 163 act.
135 COVID-19-related damages, injury, or death occurred as a result 164 Section 2. If any provision of this act or its application
136 of the defendant’s acts or omissions. 165 to any person or circumstance is held invalid, the invalidity
137 (c) The court must determine, as a matter of law, whether: 166 does not affect other provisions or applications of the act
138 1. The plaintiff complied with paragraphs (a) and (b). If 167 which can be given effect without the invalid provision or
139 the plaintiff did not comply with paragraphs (a) and (b), the 168 application, and to this end the provisions of this act are
140 court must dismiss the action without prejudice. 169 severable.
141 2. The defendant made a good faith effort to substantially 170 Section 3. This act shall take effect upon becoming a law
142 comply with authoritative or controlling government-issued 171 and shall apply retroactively. However, the provisions of this
143 health standards or guidance at the time the cause of action 172 act shall not apply in a civil action against a particularly
144 accrued. 173 named defendant which is commenced before the effective date of
145 a. During this stage of the proceeding, admissible evidence 174 this act.

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The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)

Prepared By: The Professional Staff of the Committee on Commerce and Tourism

BILL: SB 374
INTRODUCER: Senator Bradley
SUBJECT: Fair Repair of Agricultural Equipment
DATE: February 12, 2021 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Argote Becker AG Favorable
2. Reeve McKay CM Pre-meeting
3. RC

I. Summary:

SB 374 creates the “Agricultural Equipment Fair Repair Act,” requiring original equipment
manufacturers of agricultural equipment to provide certain manufacturing, diagnostic, and repair
information to independent repair providers and owners. Original equipment manufacturers are
prohibited from excluding certain information concerning security-related functions from
information provided to an owner or independent repair provider.

The bill does not apply to motor vehicle manufacturers or motor vehicle dealers. Additionally, a
civil penalty may be collected from any original equipment manufacturer found to be in violation
of the bill’s provisions.

The bill takes effect July 1, 2021.

II. Present Situation:

Agricultural Equipment Manufacturers and Dealers Act

Section 686.401, F.S., provides that the distribution and sale of equipment primarily designed for
or used in agriculture affects the general economy of the state, the public interest, and the public
welfare.1 It is therefore deemed necessary to regulate the conduct of manufacturers, distributors,
and dealers of agricultural equipment doing business in Florida in order to prevent fraud, unfair
business practices, unfair methods of competition, impositions, and other abuses upon its
citizens.2 Currently, the state does not regulate the distribution of information related to
manufacturing, diagnostics, and repair between original equipment manufacturers (OEMs) and
independent repair providers and owners.

1
See ch. 686, F.S.
2
Id.
BILL: SB 374 Page 2

Right to Repair Legislation

Over 32 states have considered right to repair legislation, and 20 of those states introduced
legislation in 2019 alone. Though its legislation is related to vehicle manufacturers,
Massachusetts3 has been the only state successful in this endeavor to date. Georgia,4 New York,5
Washington,6 Missouri,7 Kansas,8 and Nebraska9 are among the states that have introduced
legislation surrounding the availability of diagnostic and repair information to any independent
repair provider or owner of products manufactured by an OEM.

Massachusetts
Massachusetts law requires vehicle owners and independent repair facilities in Massachusetts to
have access to the same vehicle diagnostic and repair information made available to
manufacturers, dealers located in Massachusetts, and authorized repair facilities.10 The
Massachusetts legislation includes provisions similar to provisions in this bill, including
protections surrounding trade secrets and the terms of an authorized repair agreement.

Association of Equipment Manufacturers and Equipment Dealers Association

The Association of Equipment Manufacturers and the Equipment Dealers Association created
R2R Solutions, which compiles maintenance, diagnostic, and repair information for tractors and
combines.11 The publication is available online and includes access to manuals, product guides,
product service demonstrations, fleet management information, and other information related to
repairs. R2R Solutions provides owners with access to descriptions for fault codes on equipment,
allowing owners the ability to choose whether to repair machinery independently or turn to an
authorized repair provider.

III. Effect of Proposed Changes:

The Agricultural Equipment Fair Repair Act

The bill creates s. 686.35, F.S., to be known as the “Agricultural Equipment Fair Repair Act.”
The bill requires that original equipment manufacturers (OEMs) provide diagnostic and repair
documentation, including updates and corrections to embedded software, to any independent
repair provider or owner of equipment manufactured by the OEM. Such information must be
available free of charge or provided to an independent repair provider or owner in the same
manner that the OEM would divulge such information to an authorized repair provider.
Following the dissemination of this information, the OEM is not responsible for the content and
functionality of such aftermarket diagnostic tools, diagnostics, or service information systems.

3
Mass. Gen. Laws Ann. ch. 165, § 93K (2013).
4
Georgia HB 286 (2019).
5
New York SB 710 (2020).
6
Washington HB 1342 (2020).
7
Missouri HB 1079 (2019).
8
Kansas HB 2122 (2017).
9
Nebraska LB 67 (2017).
10
Supra note 3.
11
Association of Equipment Manufacturers, Right to Repair, available at https://www.aem.org/advocacy-old/right-to-repair
(last visited Feb. 12, 2021).
BILL: SB 374 Page 3

Definitions

The bill defines:
 Authorized repair provider;
 Embedded software;
 Equipment;
 Fair and reasonable terms;
 Firmware;
 Independent repair provider;
 Motor vehicle;
 Motor vehicle dealer;
 Motor vehicle manufacturer;
 Original equipment manufacturer;
 Owner;
 Part; and
 Trade secret.

Information Concerning Security-Related Functions

The bill requires that diagnostic, service, and repair documentation needed to reset a security-
related electronic function be included in information provided to an owner or independent repair
provider. If such documentation is not included, the necessary documentation must be obtained
by an owner or independent repair provider through the appropriate secure data release systems.

Exclusions

The bill explicitly does not:
 Require that an OEM divulge a trade secret;
 Interfere with the terms of an agreement between the OEM and an authorized repair provider
with the exception of any provision within the agreement that waives, avoids, restricts, or
limits an OEM’s compliance with the terms defined within this bill;
 Require that OEMs or authorized repair providers give an owner or independent repair
provider access to non-diagnostic and repair documentation provided by an OEM to an
authorized repair provider pursuant to the terms of an authorized repair agreement; or
 Apply to motor vehicle manufacturers, any product or service of a motor vehicle
manufacturer, or motor vehicle dealers.

Other Provisions

The bill provides that any OEM found in violation of the provisions set forth in the bill is liable
to a civil penalty of up to $500 per violation.

Effective Date

This bill takes effect July 1, 2021.
BILL: SB 374 Page 4

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

None.

B. Public Records/Open Meetings Issues:

None.

C. Trust Funds Restrictions:

None.

D. State Tax or Fee Increases:

None.

E. Other Constitutional Issues:

None.

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

None.

B. Private Sector Impact:

Original equipment manufacturers may be susceptible to liability if modifications are
made on equipment that result in serious injury. Original equipment manufacturers may
also be subject to a decrease in revenue related to repairs as owners will be authorized to
seek repair services from independent repair providers and may be subject to a civil
penalty of not more than $500.

Owners of equipment will acquire the ability to maintain, service, repair, and rebuild their
agricultural equipment on their own accord or by the repair shop of their choice as a
result of the provisions implemented by this bill. This may cause a positive fiscal impact
for owners as they will no longer bear the cost of transportation of faulty equipment to an
authorized repair provider or dealer for service.

C. Government Sector Impact:

The bill creates a new civil penalty of up to $500, which may increase revenue if the
provisions set forth by this bill are violated.
BILL: SB 374 Page 5

VI. Technical Deficiencies:

Line 41 defines “fair and reasonable terms,” but that definition is not used elsewhere in the bill.

VII. Related Issues:

As written, the bill allows equipment owners autonomy over repairs. Equipment owners will
have the ability to make modifications that may lead to environmental, safety, and liability
implications for customers and dealers.

VIII. Statutes Affected:

The bill creates section 686.35 of the Florida Statutes.

IX. Additional Information:

A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)

None.

B. Amendments:

None.

This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.
Florida Senate - 2021 SB 374 Florida Senate - 2021 SB 374

By Senator Bradley

5-00459-21 2021374__ 5-00459-21 2021374__
1 A bill to be entitled 30 provided on firmware delivered with the equipment for the
2 An act relating to the fair repair of agricultural 31 purpose of equipment operation, including all relevant patches
3 equipment; providing a short title; creating s. 32 and fixes made by the original equipment manufacturer for this
4 686.35, F.S.; defining terms; requiring original 33 purpose. The term includes, but is not limited to, a basic
5 equipment manufacturers of agricultural equipment to 34 internal operating system, an internal operating system, a
6 provide certain manufacturing, diagnostic, and repair 35 machine code, an assembly code, a robot code, or a microcode.
7 information to independent repair providers and 36 (c) “Equipment” means digital electronic equipment, or a
8 owners; prohibiting the original equipment 37 part for such equipment, which is originally manufactured for
9 manufacturers from excluding certain information 38 farm equipment, including combines, tractors, implements, self-
10 concerning security-related functions; providing 39 propelled equipment, and related attachments and implements, and
11 construction and applicability; providing civil 40 that is manufactured for distribution and sale in this state.
12 liability; providing an effective date. 41 (d) “Fair and reasonable terms” means an equitable price in
13 42 light of relevant factors, including, but not limited to:
14 Be It Enacted by the Legislature of the State of Florida: 43 1. The net cost to the authorized repair provider for
15 44 similar information obtained from an original equipment
16 Section 1. This act may be cited as the “Agricultural 45 manufacturer, excluding any discounts, rebates, or other
17 Equipment Fair Repair Act.” 46 incentive programs;
18 Section 2. Section 686.35, Florida Statutes, is created to 47 2. The cost to the original equipment manufacturer for
19 read: 48 preparing and distributing the information, excluding any
20 686.35 Fair repair of agricultural equipment.— 49 research and development costs incurred in designing and
21 (1) As used in this section, the term: 50 implementing, upgrading, or altering the product, but including
22 (a) “Authorized repair provider” means an individual or an 51 amortized capital costs for the preparation and distribution of
23 entity that has an arrangement for a definite or indefinite 52 the information;
24 period in which an original equipment manufacturer grants to a 53 3. The price charged by other original equipment
25 separate individual or entity a license to use a trade name, 54 manufacturers for similar information;
26 service mark, or related characteristic for the purpose of 55 4. The price charged by original equipment manufacturers
27 offering repair services under the name of the original 56 for similar information before the launch of original equipment
28 equipment manufacturer. 57 manufacturer websites;
29 (b) “Embedded software” means any programmable instructions 58 5. The ability of aftermarket technicians or shops to

5-00459-21 2021374__ 5-00459-21 2021374__
59 afford the information; 88 to a franchise agreement; is engaged in the diagnosis, service,
60 6. The means by which the information is distributed; 89 maintenance, or repair of motor vehicles or motor vehicle
61 7. The extent to which the information is used, including 90 engines pursuant to such franchise agreement; and has obtained a
62 the number of users and the frequency, duration, and volume of 91 license under s. 320.27.
63 use; and 92 (i) “Motor vehicle manufacturer” means a person or business
64 8. Inflation. 93 engaged in the manufacturing or assembling of new motor
65 (e) “Firmware” means a software program or set of 94 vehicles.
66 instructions programmed on a hardware device to allow the device 95 (j) “Original equipment manufacturer” means a person or
67 to communicate with other computer hardware. 96 business that, in the ordinary course of business, is engaged in
68 (f) “Independent repair provider” means a person or 97 the selling or leasing of new equipment to a person or business
69 business operating in this state which is not affiliated with an 98 and is engaged in the diagnosis, service, maintenance, or repair
70 original equipment manufacturer or an original equipment 99 of such equipment.
71 manufacturer’s authorized repair provider and which is engaged 100 (k) “Owner” means a person or business that owns or leases
72 in the diagnosis, service, maintenance, or repair of equipment. 101 a digital electronic product purchased or used in this state.
73 However, an original equipment manufacturer meets the definition 102 (l) “Part” means a replacement part, either new or used,
74 of an independent repair provider when such original equipment 103 which the original equipment manufacturer makes available to the
75 manufacturer engages in the diagnosis, service, maintenance, or 104 authorized repair provider for purposes of effecting repair.
76 repair of equipment that is not affiliated with the original 105 (m) “Trade secret” means anything tangible or intangible or
77 equipment manufacturer. 106 electronically stored or kept which constitutes, represents,
78 (g) “Motor vehicle” means any vehicle that is designed for 107 evidences, or records intellectual property, including secret or
79 transporting persons or property on a street or highway and 108 confidentially held designs, processes, procedures, formulas,
80 certified by the motor vehicle manufacturer under all applicable 109 inventions, or improvements or secret or confidentially held
81 federal safety and emissions standards and requirements for 110 scientific, technical, merchandising, production, financial,
82 distribution and sale in the United States. The term does not 111 business, or management information. The term also includes any
83 include a motorcycle or a recreational vehicle or manufactured 112 other trade secret as defined in 18 U.S.C. 1839, as such section
84 home equipped for habitation. 113 existed on January 1, 2020.
85 (h) “Motor vehicle dealer” means a person or business that, 114 (2) For equipment sold and used in this state, the original
86 in the ordinary course of business, is engaged in the selling or 115 equipment manufacturer shall make available diagnostic and
87 leasing of new motor vehicles to a person or business pursuant 116 repair documentation, including repair technical updates and

5-00459-21 2021374__ 5-00459-21 2021374__
117 updates and corrections to embedded software, to any independent 146 provision of warranty or recall repair work by an authorized
118 repair provider or owner of equipment manufactured by such 147 repair provider on behalf of an original equipment manufacturer
119 original equipment manufacturer. The information must be made 148 pursuant to such authorized repair agreement, except that any
120 available for no charge or provided in the same manner as the 149 provision in such an authorized repair agreement which purports
121 original equipment manufacturer makes such diagnostic and repair 150 to waive, avoid, restrict, or limit an original equipment
122 documentation available to an authorized repair provider. 151 manufacturer’s compliance with this section is void and
123 Thereafter, the original equipment manufacturer is not 152 unenforceable.
124 responsible for the content and functionality of such 153 (c) Require original equipment manufacturers or authorized
125 aftermarket diagnostic tools, diagnostics, or service 154 repair providers to provide an owner or independent repair
126 information systems. 155 provider access to nondiagnostic and repair documentation
127 (3) Original equipment manufactured by the original 156 provided by an original equipment manufacturer to an authorized
128 equipment manufacturer which is sold or used in this state to 157 repair provider pursuant to the terms of an authorized repair
129 provide security-related functions may not exclude diagnostic, 158 agreement.
130 service, and repair documentation that is necessary to reset a 159 (5) This section does not apply to motor vehicle
131 security-related electronic function from information provided 160 manufacturers, any product or service of a motor vehicle
132 to an owner or independent repair provider. If such 161 manufacturer, or motor vehicle dealers.
133 documentation is excluded under this section, the documentation 162 (6) Any original equipment manufacturer found in violation
134 necessary to reset an immobilizer system or a security-related 163 of this section is liable to a civil penalty of not more than
135 electronic module must be obtained by an owner or independent 164 $500 for each violation.
136 repair provider through the appropriate secure data release 165 Section 3. This act shall take effect July 1, 2021.
137 systems.
138 (4) This section may not be construed to do any of the
139 following:
140 (a) Require an original equipment manufacturer to divulge a
141 trade secret.
142 (b) Abrogate, interfere with, contradict, or alter the
143 terms of an agreement executed and in force between an
144 authorized repair provider and an original equipment
145 manufacturer, including, but not limited to, the performance or

Prepared By: The Professional Staff of the Committee on Commerce and Tourism

BILL: SB 598
INTRODUCER: Senator Perry
SUBJECT: Back-to-school Sales Tax Holiday
DATE: February 12, 2021 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Reeve McKay CM Pre-meeting
2. FT
3. AP

I. Summary:

SB 598 establishes a 10-day “back-to-school” sales tax holiday from Friday, July 30 to Sunday,
August 8, 2021, for certain clothing, school supplies, personal computers, and personal
computer-related accessories.

The bill appropriates $237,000 in nonrecurring funds from the General Revenue Fund to the
Department of Revenue in Fiscal Year 2021-2022.

The Revenue Estimating Conference has not yet estimated the revenue impact of the bill.

The bill takes effect upon becoming law.

II. Present Situation:

Florida Sales Tax

Florida levies a 6 percent sales and use tax on the sale or rental of most tangible personal
property,1 admissions,2 transient rentals,3 and a limited number of services. Chapter 212, F.S.,
contains provisions authorizing the levy and collection of Florida’s sales and use tax, as well as
the exemptions and credits applicable to certain items or uses under specified circumstances.
Sales tax is added to the price of the taxable good or service and collected from the purchaser at

1
Section 212.05(1)(a)1.a, F.S.
2
Section 212.04(b), F.S.
3
Section 212.03(1)(a), F.S.
BILL: SB 598 Page 2

the time of sale.4 Sales tax receipts accounted for approximately 79 percent of the state’s General
Revenue in Fiscal Year 2019-2020.5

Section 212.055, F.S., authorizes counties to impose local discretionary sales surtaxes in addition
to the state sales tax. A surtax applies to “all transactions occurring in the county which
transactions are subject to the state tax imposed on sales, use, services, rentals, admissions, and
other transactions by [ch. 212, F.S.], and communications services as defined in ch. 202.”6 The
discretionary sales surtax is based on the tax rate imposed by the county where the taxable goods
or services are sold or delivered. Discretionary sales surtax rates currently levied vary by county
in a range of 0.5 to 2.5 percent.7

“Back-to-School” Sales Tax Holidays
Florida has enacted a “back-to-school” sales tax holiday 18 times since 1998. The Florida
Residents’ Tax Relief Act of 1998 established Florida’s first tax holiday, during which clothing
purchases of $50 or less were exempt from tax.8 Backpacks were added to the tax holiday in
1999 and school supplies were added in 2001. In 2013, the Legislature expanded the exemption
to include personal computers and related accessories selling for $750 or less, purchased for
noncommercial home or personal use. The duration of “back-to-school” sales tax holidays has
varied from 3 to 10 days. The type and value of exempt items have also varied.9

Florida’s 75 school districts began the 2020-2021 school year between August 10 and August 31,
2020.10

III. Effect of Proposed Changes:

The bill establishes a 10-day period, from July 30 to August 8, 2021, during which the following
items are exempt from the state sales tax and local discretionary sales surtaxes:
 Clothing with a sales price of $60 or less per item. “Clothing” is defined as any article of
wearing apparel intended to be worn on or about the human body, excluding watches,
watchbands, jewelry, umbrellas, and handkerchiefs, and all footwear, excluding skis, swim
fins, in-line skates, and rollerblades;
 Wallets and bags with a sales price of $50 or less per item, including handbags, backpacks,
fanny packs, and diaper bags, but excluding briefcases, suitcases, and other garment bags;
 School supplies with a sales price of $15 or less per item. “School supplies” is defined as
pens, pencils, erasers, crayons, notebooks, notebook filler paper, legal pads, binders, lunch
boxes, construction paper, markers, folders, poster board, composition books, poster paper,

4
See s. 212.07(2), F.S.
5
Office of Economic and Demographic Research, Florida Tax Handbook, 16 (2020), available at
http://edr.state.fl.us/Content/revenues/reports/tax-handbook/taxhandbook2020.pdf (last visited Feb. 12, 2021).
6
Section 212.054(2)(a), F.S.
7
Supra note 5, at 231-232.
8
Chapter 98-341, Laws of Fla.
9
Supra note 5, at 159-165.
10
Florida Department of Education, PK-12 Public School Data Publications and Reports, available at
http://www.fldoe.org/accountability/data-sys/edu-info-accountability-services/pk-12-public-school-data-pubs-
reports/index.stml (last visited Feb. 12, 2021).
BILL: SB 598 Page 3

scissors, cellophane tape, glue or paste, rulers, computer disks, staplers and staples used to
secure paper products, protractors, compasses, and calculators;
 Personal computers with a sales price of $1,000 or less per item. “Personal computers”
includes electronic book readers, laptops, desktops, handhelds, tablets, or tower computers
and excludes cellular telephones, video game consoles, digital media receivers, or devices
that are not primarily designed to process data; and
 Personal computer-related accessories with a sales price of $1,000 or less per item. “Personal
computer-related accessories” includes keyboards, mice, personal digital assistants, monitors,
other peripheral devices, modems, routers, and non-recreational software regardless of
whether the accessories are used in association with a personal computer base unit. The term
excludes furniture or systems, devices, software, monitors with a television tuner, or
peripherals that are designed or intended primarily for recreational use.

The bill allows a business to opt out of participating in the sales tax holiday if less than 5 percent
of the business’s gross sales of tangible personal property in the prior calendar consisted of items
that would be exempt under the bill. A business meeting this threshold must notify the
Department of Revenue (DOR) in writing by July 29, 2021, of its election to collect sales tax
during the holiday. The business must post a copy of that notice in a conspicuous location at its
place of business.

The exemptions provided for in the bill do not apply to the following:
 Sales within a theme park or entertainment complex, as defined in s. 509.013(9), F.S.;
 Sales within a public lodging establishment, as defined in s. 509.013(4), F.S.; and
 Sales within an airport, as defined in s. 330.27(2), F.S.

The bill appropriates, for the 2021-2022 fiscal year, $237,000 in nonrecurring funds from the
General Revenue Fund to the DOR to implement the sales tax holiday. Funds remaining
unexpended as of June 30, 2022, shall revert and be reappropriated for the same purpose in
Fiscal Year 2022-2023.

The DOR may adopt emergency rules pursuant to s. 120.54(4), F.S., for the purpose of
implementing the bill.

The bill takes effect upon becoming law.

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

Article VII, s. 18 of the Florida Constitution governs laws that require counties and
municipalities to spend funds, limit the ability of counties and municipalities to raise
revenue, or reduce the percentage of state tax shared with counties and municipalities.

Subsection (b) of s. 18, Art. VII of the Florida Constitution provides that except upon
approval of each house of the Legislature by two-thirds vote of the membership, the
legislature may not enact, amend, or repeal any general law if the anticipated effect of
doing so would be to reduce the authority that municipalities or counties have to raise
BILL: SB 598 Page 4

revenue in the aggregate, as such authority existed on February 1, 1989. However, the
mandates requirements do not apply to laws having an insignificant impact,11, 12 which is
$2.2 million or less for Fiscal Year 2021-2022.13

B. Public Records/Open Meetings Issues:

None.

C. Trust Funds Restrictions:

None.

D. State Tax or Fee Increases:

None.

E. Other Constitutional Issues:

None.

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

The Revenue Estimating Conference has not yet met regarding the bill.

B. Private Sector Impact:

Persons purchasing exempted items during the sales tax holidays will realize savings.

C. Government Sector Impact:

The bill appropriates, for the 2021-2022 fiscal year, $237,000 in nonrecurring funds from
the General Revenue Fund to the DOR to implement the “back-to-school” sales tax
holiday.

VI. Technical Deficiencies:

None.

VII. Related Issues:

None.
11
FLA. CONST. art. VII, s. 18(d).
12
An insignificant fiscal impact is the amount not greater than the average statewide population for the applicable fiscal year
multiplied by $0.10. See Florida Senate Committee on Community Affairs, Interim Report 2012-115: Insignificant Impact,
(September 2011), available at http://www.flsenate.gov/PublishedContent/Session/2012/InterimReports/2012-115ca.pdf (last
visited Feb. 12, 2021).
13
Based on the Demographic Estimating Conference’s population adopted on November 13, 2020. The conference packet is
available at http://edr.state.fl.us/Content/conferences/population/ConferenceResults.pdf (last visited Feb. 12, 2021).
BILL: SB 598 Page 5

VIII. Statutes Affected:

The bill creates two undesignated sections of chapter law.

IX. Additional Information:

A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)

None.

B. Amendments:

None.

This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.
Florida Senate - 2021 SB 598 Florida Senate - 2021 SB 598

By Senator Perry

8-00932-21 2021598__ 8-00932-21 2021598__
1 A bill to be entitled 30 about the human body, excluding watches, watchbands, jewelry,
2 An act relating to a back-to-school sales tax holiday; 31 umbrellas, and handkerchiefs; and
3 providing exemptions from the sales and use tax on the 32 2. All footwear, excluding skis, swim fins, in-line skates,
4 retail sale of certain clothing, wallets, bags, school 33 and roller skates.
5 supplies, personal computers, and personal computer- 34 (b) School supplies having a sales price of $15 or less per
6 related accessories during a specified timeframe; 35 item. As used in this paragraph, the term “school supplies”
7 defining terms; specifying locations where the 36 means pens, pencils, erasers, crayons, notebooks, notebook
8 exemptions do not apply; authorizing certain dealers 37 filler paper, legal pads, binders, lunch boxes, construction
9 to opt out of participating in the tax holiday, 38 paper, markers, folders, poster board, composition books, poster
10 subject to certain requirements; authorizing the 39 paper, scissors, cellophane tape, glue or paste, rulers,
11 Department of Revenue to adopt emergency rules; 40 computer disks, staplers and staples used to secure paper
12 providing an appropriation; providing an effective 41 products, protractors, compasses, and calculators.
13 date. 42 (2) The tax levied under chapter 212, Florida Statutes, may
14 43 not be collected during the period from 12:01 a.m. on July 30,
15 Be It Enacted by the Legislature of the State of Florida: 44 2021, through 11:59 p.m. on August 8, 2021, on the retail sale
16 45 of personal computers or personal computer-related accessories
17 Section 1. Clothing, wallets, bags, school supplies, 46 having a sales price of $1,000 or less per item and purchased
18 personal computers, and personal computer-related accessories; 47 for noncommercial home or personal use. As used in this
19 sales tax holiday.— 48 subsection, the term:
20 (1) The tax levied under chapter 212, Florida Statutes, may 49 (a) “Personal computers” includes electronic book readers,
21 not be collected during the period from 12:01 a.m. on July 30, 50 laptops, desktops, handhelds, tablets, or tower computers. The
22 2021, through 11:59 p.m. on August 8, 2021, on the retail sale 51 term does not include cellular telephones, video game consoles,
23 of: 52 digital media receivers, or devices that are not primarily
24 (a) Clothing, wallets, or bags, including handbags, 53 designed to process data.
25 backpacks, fanny packs, and diaper bags, but excluding 54 (b) “Personal computer-related accessories” includes
26 briefcases, suitcases, and other garment bags, having a sales 55 keyboards, mice, personal digital assistants, monitors, other
27 price of $60 or less per item. As used in this paragraph, the 56 peripheral devices, modems, routers, and nonrecreational
28 term “clothing” means: 57 software, regardless of whether the accessories are used in
29 1. Any article of wearing apparel intended to be worn on or 58 association with a personal computer base unit. The term does

Page 1 of 4 Page 2 of 4
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2021 SB 598 Florida Senate - 2021 SB 598

8-00932-21 2021598__ 8-00932-21 2021598__
59 not include furniture or systems, devices, software, monitors 88 unencumbered from this appropriation as of June 30, 2022, shall
60 with a television tuner, or peripherals that are designed or 89 revert and be reappropriated for the same purpose in the 2022-
61 intended primarily for recreational use. 90 2023 fiscal year.
62 (3) The tax exemptions provided in this section do not 91 Section 3. This act shall take effect upon becoming a law.
63 apply to sales within a theme park or entertainment complex as
64 defined in s. 509.013(9), Florida Statutes, within a public
65 lodging establishment as defined in s. 509.013(4), Florida
66 Statutes, or within an airport as defined in s. 330.27(2),
67 Florida Statutes.
68 (4) The tax exemptions provided in this section may apply
69 at the option of a dealer if less than 5 percent of the dealer’s
70 gross sales of tangible personal property in the prior calendar
71 year consisted of items that would be exempt under this section.
72 If a qualifying dealer chooses not to participate in the tax
73 holiday, the dealer must notify the Department of Revenue in
74 writing by July 29, 2021, of its election to collect sales tax
75 during the holiday and must post a copy of that notice in a
76 conspicuous location at its place of business.
77 (5) The Department of Revenue may, and all conditions are
78 deemed met to, adopt emergency rules pursuant to s. 120.54(4),
79 Florida Statutes, for the purpose of implementing this section.
80 Notwithstanding any other law, emergency rules adopted pursuant
81 to this subsection are effective for 6 months after adoption and
82 may be renewed during the pendency of procedures to adopt
83 permanent rules addressing the subject of the emergency rule.
84 Section 2. For the 2021-2022 fiscal year, the sum of
85 $237,000 in nonrecurring funds is appropriated from the General
86 Revenue Fund to the Department of Revenue for the purpose of
87 implementing this act. Funds remaining unexpended or

Page 3 of 4 Page 4 of 4
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)

Prepared By: The Professional Staff of the Committee on Commerce and Tourism

BILL: CS/SB 46
INTRODUCER: Regulated Industries Committee and Senator Hutson
SUBJECT: Craft Distilleries
DATE: February 12, 2021 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Oxamendi Imhof RI Fav/CS
2. Reeve McKay CM Pre-meeting
3. RC

Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes

I. Summary:

CS/SB 46 revises the licensing requirements for craft distilleries. The bill creates s. 565.02(12),
F.S., to provide a quota license exemption for certain craft distilleries to qualify for a vendor’s
license if the craft distillery is located on a property within a destination entertainment venue, as
defined by the bill, and open for tours during normal business hours

The bill also amends s. 565.03, F.S., to increase the production limit for distilleries to qualify as
craft distilleries from 75,000 gallons per year to 250,000 gallons per year. Craft distilleries may
only sell up to 75,000 gallons of branded products in gift shops or tasting rooms and may not
ship products to customers. A maximum of 10 craft distilleries meeting certain requirements may
share common ownership. Effective July 1, 20206, a minimum of 60 percent of a craft
distillery’s total finished branded products must be distilled in the state and contain one or more
of Florida’s agricultural products.

The bill allows craft distilleries to qualify for a permit to conduct tastings at Florida fairs, trade
shows, farmers markets, expositions, and festivals.

The bill takes effect July 1, 2021.
BILL: CS/SB 46 Page 2

II. Present Situation:

Division of Alcoholic Beverages and Tobacco

The Division of Alcoholic Beverages and Tobacco (division) within the Department of Business
and Professional Regulation administers and enforces1 the Beverage Law,2 which regulates the
manufacture, distribution, and sale of wine, beer, and liquor.3

Three-Tier System

In the United States, the regulation of alcohol since the repeal of Prohibition has traditionally
been based upon a “three-tier system.” The system requires separation of the manufacture,
distribution, and sale of alcoholic beverages. The manufacturer creates the beverages; the
distributor obtains the beverages from the manufacturer and delivers them to the vendor. The
vendor (retailer) makes the ultimate sale to the consumer. Manufacturers cannot sell directly to
retailers or directly to consumers.4

Generally, Florida follows the three-tier system. Only licensed vendors are permitted to sell
alcoholic beverages directly to consumers at retail.5 Licensed manufacturers, distributors, and
registered exporters are prohibited from also being licensed as vendors.6 Manufacturers are also
generally prohibited from having an interest in a vendor and from distributing directly to a
vendor.7

Tied House Evil Prohibitions
The system is deeply rooted in the perceived evils of the “tied house” in which a bar is owned or
operated by a manufacturer or the manufacturer exercises undue influence over the retail
vendor.8 Activities are heavily regulated to prevent a manufacturer or distributor from having a
financial interest, directly or indirectly, in the establishment or business of a licensed vendor.

Three-Tier System Exceptions
Exceptions to the three-tier regulatory system permit in-state wineries,9 breweries,10 and craft
distilleries to sell directly to consumers.11 Restaurants licensed as vendors (brew pubs) may
manufacture a limited quantity of malt beverages and sell directly to consumers for consumption
on the licensed premises of the restaurant.12

1
Section 561.02, F.S.
2
Section 561.01(6), F.S., provides that the “Beverage Law” means chs. 561, 562, 563, 564, 565, 567, and 568, F.S.
3
See s. 561.14, F.S.
4
Id.
5
Section 561.14(3), F.S. However, see the exceptions provided in ss. 561.221 and 565.03, F.S.
6
Section 561.22, F.S.
7
Sections 563.022(14) and 561.14(1), F.S.
8
Jessica C. Starns, The Dangers of Common Ownership in an Uncommon Industry: Alcohol Policy in America and the
Timeless Relevance of Tied-House Restrictions (2017), available at https://www.centerforalcoholpolicy.org/wp-
content/uploads/2017/03/The-Dangers-of-Common-Ownership-in-an-Uncommon-Industry.pdf (last visited Feb. 12, 2021).
9
See s. 561.221(1), F.S.
10
See s. 561.221(2), F.S.
11
See s. 565.03, F.S.
12
See s. 561.221(3), F.S.
BILL: CS/SB 46 Page 3

A winery, even if licensed as a distributor,13 may be licensed as a vendor for a licensed premises
situated on property contiguous to the manufacturing premises of the winery. A winery may not
be issued more than three vendor licenses.14

Quota Licenses

Section 561.20, F.S., limits, by county, the number of alcoholic beverage licenses that may be
issued to permit the sale of liquor (distilled spirits) to one license per 7,500 residents within the
county. These limited alcoholic beverage licenses are known as “quota” licenses. New quota
licenses are created and issued when there is an increase in the population of a county. The
licenses can also be issued when a county initially changes from a county which does not permit
the sale of intoxicating liquor to one that does permit their sale. The quota license is the only
alcoholic beverage license that is limited in number; all other types of alcoholic beverage
licenses are available without limitation. A person, firm, or corporation may not have an interest,
directly or indirectly, in more than 30 percent of the number of quota licenses in a county.15

Quota License Exceptions
Current law permits certain types of businesses or persons to be licensed sell beer, wine, and
liquor without any limitation on the number of such licenses which may be issued in a county,
i.e., such licenses are not subject to the quota in s. 561.20, F.S. Quota license exceptions are
known as “special licenses.”

Section 561.20(2), F.S., provides several exceptions to the number of licenses that permit the
sale of beer, wine, and distilled spirits. The exceptions include restaurants, caterers, hotels and
motels, specialty centers built on government-owned land, bowling establishments, and airports.

The Beverage Law provides a limited exception to the quota license limitation to permit the
division to issue an alcoholic beverage license (for the sale of beer, wine, and liquor) to:
 An operator of railroads or sleeping cars and a vendor in railroad transit stations.16
 Operators of steamships and steamship lines, buses and bus lines, or airplanes and airlines
engaged in interstate or foreign commerce or flying between fixed terminals and upon fixed
schedules in this state.17
 Persons associated together as a chartered or incorporated club, if not organized for the
purpose of evading license taxes and meeting certain conditions, including any golf club
operated by or on behalf of any incorporated municipality in this state, and any veterans' or
fraternal organization of national scope.18
 A caterer at a horse or dog racetrack or jai alai fronton.19

13
Section 561.14(1), F.S., permits manufacturers to distribute at wholesale to licensed distributors and to no one else within
the state, unless authorized by statute.
14
See s. 561. 221(1), F.S.
15
Section 561.20(6), F.S.
16
Section 565.02(2), F.S.
17
Section 565.02(3), F.S.
18
Section 565.02(4), F.S.
19
Section 565.02(5), F.S.
BILL: CS/SB 46 Page 4

 A vendor who operates places of business where consumption on the premises is permitted,
which premises are located within a theme park complex and meeting specified conditions.20
 A marine exhibition park complex meeting specified conditions.21
 A state-chartered legal entity not for profit organized principally for the purpose of
supporting or managing the affairs of a symphony orchestra.22
 The operator of a passenger vessel engaged exclusively in foreign commerce.23
 A state-chartered legal entity not for profit organized principally for the purpose of operating
a theater with live performances and not fewer than 100 seats.24
 The John and Mable Ringling Museum of Art direct-support organization.25

Distilleries and Craft Distilleries

Section 565.01, F.S., defines the terms “liquor,” “distilled spirits,” “spirituous liquors,”
“spirituous beverages,” or “distilled spirituous liquors” to mean “that substance known as ethyl
alcohol, ethanol, or spirits of wine in any form, including all dilutions and mixtures thereof from
whatever source or by whatever process produced.”

A “distillery” is a manufacturer of distilled spirits,26 and a “craft distillery” is a licensed distillery
that produces 75,000 or fewer gallons of distilled spirits per calendar year on its premises. A
distillery must notify the division in writing of its decision to qualify as a craft distillery. 27

All distilleries engaged solely in the business of manufacturing distilled spirits, or engaged in the
business of blending and rectifying distilled spirits, must pay a state license tax for each plant or
branch operating in Florida. Distilleries pay $4,000 annually for the license tax and craft
distilleries pay $1,000. Persons who engage in the business of distilling spirits may also rectify
and blend spirituous liquors without paying an additional license tax.28

Retail Sales by Craft Distilleries

A craft distillery is allowed to sell to consumers branded products29 distilled on the licensed
premises. The products must be in factory-sealed containers that are filled at the distillery and
sold for off-premises consumption.30 The sales must occur at the distillery’s souvenir gift shop
located on private property contiguous to the licensed distillery premises.31 The craft distillery is
not required to obtain, in addition to its manufacturer’s license, a vendor’s license in order to sell
distilled spirits to consumers.

20
Section 565.02(6), F.S.
21
Section 565.02(7), F.S.
22
Section 565.02(8), F.S.
23
Section 565.02(9), F.S.
24
Section 565.02(10), F.S.
25
Section 565.02(11), F.S.
26
Section 565.03(1)(c), F.S.
27
Section 565.03(1)(b), F.S.
28
Section 565.03(3), F.S.
29
Section 565.03(1)(a), F.S., defines “branded product” to mean “any distilled spirits product manufactured on site, which
requires a federal certificate and label approval by the Federal Alcohol Administration Act or federal regulations.”
30
Section 565.03(2)(c), F.S.
31
Id.
BILL: CS/SB 46 Page 5

A craft distillery must report to the division within five business days after it has reached the
75,000-gallon production limit and cease making sales to consumers on the day after it reaches
the production limit.32

A craft distillery may not ship, arrange to ship, or deliver distilled spirits to consumers, except in
a face to face transaction. However, a craft distillery may ship, arrange to ship, or deliver
distilled spirits to manufacturers of distilled spirits, wholesale distributors of distilled spirits,
state and federal bonded warehouses, and exporters.33

A craft distillery may not transfer its license or any ownership interest to any individual or entity
with a direct or indirect interest in another distillery licensed in any other state, territory, or
country.34 However, a craft distillery may be affiliated with another distillery that produces
75,000 or fewer gallons per calendar year of distilled spirits on its premises or in any other state,
territory, or country.35

A craft distillery must submit beverage excise taxes on distilled spirits sold to consumers in its
monthly report to the division.36

Declaratory Statement

On January 19, 2018, the division issued a declaratory statement interpreting
s. 565.03(2)(c), F.S., to permit a craft distillery to sell to consumers, at its souvenir gift shop, a
product comprised of a blend of liquors distilled on the premises of the craft distillery and liquors
distilled by other manufacturers away from the premises. The craft distillery may then, at the
craft distillery, fill individual containers with the final, blended liquor product for sale at its
souvenir gift shop.37 However, a craft distillery may not sell to consumers a product comprised
of a blend of only liquors distilled by other manufacturers away from the craft distillery’s
licensed premises.38

Deliveries by Licensees

Section 561.57(1), F.S., permits an alcoholic beverages vendor to make deliveries away from its
place of business for sales made at the licensed place of business. Telephone, electronic, or mail
orders received at a vendor’s licensed place of business are construed as a sale actually made at
the vendor’s licensed place of business.

32
Section 565.03(2)(c)3., F.S.
33
Section 565.03(2)(c)4., F.S.
34
Section 565.03(2)(c)5., F.S.
35
Section 565.03(2)(c)6., F.S.
36
Section 565.03(5), F.S. Section 565.12, F.S., requires manufactures and distributors to pay an excise tax on alcoholic
beverages, with the tax rate per gallon depending on the percent of alcohol by volume of the beverage. Section 565.13, F.S.,
requires every distributor selling spirituous beverages within the state to pay the tax to the division monthly on or before the
10th day of the following month.
37
Final Order on Petition for Declaratory Statement, In Re: Petition for Declaratory Statement Before the Division Of
Alcoholic Beverages and Tobacco, On behalf of Drum Circle Distilling, LLC, DS 2017-071 (DABT Case No. 2017-052675),
January 19, 2018, (on file with Senate Committee on Regulated Industries).
38
Id.
BILL: CS/SB 46 Page 6

Deliveries made by a manufacturer, distributor, or a vendor away from its place of business may
only be made in vehicles owned or leased by the vendor, or in a third-party vehicle pursuant to a
contract with a third party, including, but not limited to, common carriers.39

By acceptance of an alcoholic beverage license and the use of vehicles owned by or leased by the
vendor, the vendor agrees the vehicle is subject to be inspected and searched without a search
warrant by employees of the division or law enforcement officers to ascertain compliance with
all provisions of the alcoholic beverage laws.40

Common carriers41 may transport alcoholic beverages.42 The recipient’s age and identity must be
verified at the time of delivery. All deliveries by a licensee or a third-party must comply with s.
562.11, F.S., which prohibits selling, giving, serving, or permitting to be served alcoholic
beverages to a person under 21 years of age.43

A “permit carrier” is a licensee authorized to make deliveries under s. 561.57, F.S.44

Alcoholic Beverage Tastings

Section 563.09, F.S., permits manufacturers, distributors, and importers of beer to conduct
sampling activities that include the tasting of beer on the licensed premises of vendors authorized
to sell alcoholic beverages for consumption on premises and, if the licensed premises is an
establishment with at least 10,000 square feet or a package store, on the licensed premises of
vendors authorized to sell alcoholic beverages for consumption off premises. A vendor may also
conduct a tasting on its licensed premises using beer from its own inventory.

Section 564.08, F.S., permits licensed wine distributors and vendors to conduct wine tastings at
any licensed premises authorized to sell wine or spirituous beverages by package or for
consumption on premises without violating s. 561.42, F.S., provided that the conduct of the wine
tasting is limited to and directed toward the general public of the age of legal consumption.

A certified Florida Farm Winery45 may be issued a permit by the division to conduct tasting and
sales of wine produced by certified Florida Farm Wineries at Florida fairs, trade shows,
expositions, and festivals. The certified Florida Farm Winery must pay all entry fees and must
have a winery representative present during the event. The permit is limited to the length of the
event.46

39
Section 561.57(2), F.S.
40
Id.
41
Section 561.01(19), F.S., defines a “common carrier” as “any person, firm, or corporation that undertakes for hire, as a
regular business, the transportation of persons or commodities from place to place, offering its services to all who choose to
employ it and pay its charges.”
42
Section 561.57(5), F.S.
43
Section 561.57(6), F.S.
44
Section 561.01(20), F.S.
45
Section 599.004, F.S., establishes the Florida Farm Winery Program within the Department of Agriculture and Consumer
Services. The requirements for certification include that a winery produce or sell less than 250,000 gallons of wine annually
and that 60 percent of the wine produced is made from state agricultural products.
46
Section 561.221(1)(b), F.S.
BILL: CS/SB 46 Page 7

Section 565.17, F.S., permits licensed distributors of spirituous beverages and vendors to
conduct spirituous beverage tastings at any licensed premises authorized to sell spirituous
beverages by package or for consumption on premises without violating s. 561.42, F.S., provided
that the conduct of the spirituous beverage tasting is limited to and directed toward the general
public of the age of legal consumption.

Community Redevelopment Areas

The Community Redevelopment Act of 1969 authorizes a county or municipality to create a
community redevelopment agency (CRA) as a means of redeveloping slums and blighted areas.47
The act defines a “blighted area” as an area in which there are a substantial number of
deteriorated structures causing economic distress or endangerment to life or property and in
which two or more of the factors listed in s. 163.340(8), F.S., are present. However, an area may
also be classified as blighted if one of the aforementioned factors is present and all taxing
authorities with jurisdiction over the area agree that the area is blighted by interlocal agreement
or by passage of a resolution by the governing bodies.48

Either a county or a municipal government may create a CRA. A county or municipality may
create a CRA upon the adoption of a finding of necessity and a finding that a CRA is necessary
for carrying out the community redevelopment goals embodied by the act.49 A CRA created by a
county may only operate within the boundaries of a municipality when the municipality has
concurred by resolution with the community redevelopment plan adopted by the county. A CRA
created by a municipality may not include more than 80 percent of the municipality if it was
created after July 1, 2006.50

The act allows the local governing body creating a CRA to choose between two structures for the
agency governing board. One option is to appoint a board of commissioners consisting of five to
nine members serving four-year terms.51 The second option is for the local governing body to
appoint itself as the agency board of commissioners.52 A community redevelopment plan must be
in place before a CRA can engage in operations.53

There are currently 222 active community redevelopment agencies in Florida.54

III. Effect of Proposed Changes:

Section 1 of the bill creates s. 565.02(12), F.S., to provide a quota license exemption for certain
craft distilleries to qualify for a vendor’s license for the sale of beer, wine, and liquor.

47
Chapter 163, F.S., part III.
48
Section 163.340(8), F.S.
49
Section 163.356(1), F.S.
50
Section 163.340(10), F.S.
51
Section 163.356(2), F.S.
52
Section 163.357(1)(a), F.S.
53
Section 163.360(1), F.S.
54
Dept. of Economic Opportunity, Special District Accountability Program, Official List of Special Districts Online,
available at http://specialdistrictreports.floridajobs.org/webreports/criteria.aspx (last visited Feb. 12, 2021).
BILL: CS/SB 46 Page 8

Under the bill, a craft distillery may be licensed as a vendor for alcoholic beverages from other
manufacturers consumed on the premises if the craft distillery is located on a property within a
destination entertainment venue and is in operation and open for tours during normal businesses
hours at least 5 days a week.

The bill defines a destination entertainment venue (DEV) as a venue located in a designated
community redevelopment area (CRA), owned by any person licensed as a craft distillery located
within the venue, and served by multimodal transportation options. DEVs must also be located
within a contiguous area of at least 15 acres that contains indoor and outdoor event venues with
capacities of 150 and 1,000 people, respectively, and one or more licensed craft distilleries with
identical ownerships.

All craft distilleries licensed as a vendor in a CRA must be located within the same DEV, share
identical ownership, and distill, blend, or rectify at least 50,000 gallons of blended product per
calendar year. No more than three craft distilleries may be licensed as a vendor in a CRA.

Craft distilleries licensed as a vendor are prohibited from making package sales for off-premises
consumption or making deliveries or shipments of alcoholic beverages, except as authorized in s.
565.03, F.S.

Alcoholic beverages not manufactured at the craft distillery must be obtained by a licensed
distributor.

Section 2 amends the craft distillery requirements in s. 565.03, F.S.

The bill increases the production limit for distilleries to qualify as craft distilleries from 75,000
gallons per year to 250,000 gallons per year. A distillery may not operate as a craft distillery
until the Division of Alcoholic Beverages and Tobacco has received notice of, and verified that,
a distillery meets the production limits.

Craft distilleries may only sell up to 75,000 gallons of branded products distilled, rectified, or
blended on the craft distillery’s premises directly to consumers each year; such sales may only be
sold by the drink for consumption on the premises or by the package in factory-sealed containers
for consumption off the premises, and may only be sold in the craft distillery’s souvenir gift shop
or tasting room. The bill prohibits craft distilleries from shipping products to customers and
clarifies that sales made directly to customers may only be face-to-face transactions. However,
the bill repeals the six container limit on individual sales. Craft distilleries are responsible for
submitting any excise taxes due on distilled spirits.

Effective July 1, 2026, a minimum of 60 percent of a craft distillery’s total finished branded
products must be distilled in the state and contain one or more of Florida’s agricultural products.

The bill prohibits any one person from sharing common ownership in more than 10 craft
distilleries, provided that four produce up to 250,000 gallons of distilled spirits a year each and
six produce up to 50,000 gallons a year each. “Common ownership” means having a direct or
indirect financial interest in two or more distilleries by the same person.
BILL: CS/SB 46 Page 9

Section 3 amends s. 565.17, F.S., to allow craft distilleries to qualify for a permit to conduct
tastings at Florida fairs, trade shows, farmers markets, expositions, and festivals.

Section 4 provides an effective date of July 1, 2021.

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

None.

B. Public Records/Open Meetings Issues:

None.

C. Trust Funds Restrictions:

None.

D. State Tax or Fee Increases:

None.

E. Other Constitutional Issues:

None.

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

None.

B. Private Sector Impact:

The bill may increase total sales revenue for craft distilleries by 1) allowing craft
distilleries to sell their branded products to consumers by the drink and by 2) repealing
the six individual container limit on sales of each of the craft distillery’s branded products
to a consumer at a craft distillery’s souvenir gift shop.

The bill would provide additional sources of revenue for craft distilleries located in a
community redevelopment area that qualify for a vendor’s license, as specified in the bill.

C. Government Sector Impact:

Tax revenue from the sale of craft distillery products may increase if sales to consumers
increase under this bill.
BILL: CS/SB 46 Page 10

VI. Technical Deficiencies:

None.

VII. Related Issues:

None.

VIII. Statutes Affected:

This bill substantially amends the following sections of the Florida Statutes: 565.02, 565.03, and
565.17.

IX. Additional Information:

A. Committee Substitute – Statement of Substantial Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)

CS by Regulated Industries on January 26, 2021:
The committee substitute:
 Deletes the definition of common ownership in the bill and requires any craft
distilleries that share ownership in the destination entertainment venue must have
identical ownership.
 Requires each distillery in a destination entertainment venue to produce at least
50,000 gallons of liquor each calendar year.
 Deletes the provision providing that other licensed alcoholic vendors may lease a
licensed premises within a destination entertainment venue.
 Clarifies that souvenir gift shop and tasting rooms must be located within the state.
 Reinstates current law to clarify that craft distilleries may be affiliated with other craft
distilleries in this state, and in other states or countries that do not exceed the
production limit at each licensed distillery location.
 Provides an effective date of July 1, 2026 for the requirement that a minimum of 60
percent of the craft distillery’s total branded products must be distilled in this state
and contain one or more Florida agricultural products.

B. Amendments:

None.

This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.
Florida Senate - 2021 COMMITTEE AMENDMENT
Bill No. CS for SB 46

Ì406678VÎ406678

LEGISLATIVE ACTION
Senate . House
.
.
.
.
.

The Committee on Commerce and Tourism (Hutson) recommended the
following:

1 Senate Amendment (with directory and title amendments)
2
3 Between lines 252 and 253
4 insert:
5 (6) A craft distillery shall keep complete and accurate
6 records of all alcoholic beverages received from any point
7 within or outside the state from another manufacturer, or from a
8 broker or sales agent or importer, including any delivery
9 invoice or other record of the common or contract carrier of
10 freight making the delivery of such alcoholic beverages. The

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Bill No. CS for SB 46

Ì406678VÎ406678

11 records shall be kept and maintained for a period of 3 years, as
12 required by s. 561.55.
13
14 ====== D I R E C T O R Y C L A U S E A M E N D M E N T ======
15 And the directory clause is amended as follows:
16 Delete line 113
17 and insert:
18 amended and a new subsection (6) is added and present subsection
19 (6) and (7) of that section are redesignated as (7) and (8),
20 respectively, to read:
21
22 ================= T I T L E A M E N D M E N T ================
23 And the title is amended as follows:
24 Delete line 36
25 and insert:
26 making technical changes; requiring the keeping of
27 records for alcoholic beverages received from
28 specified persons; amending s. 565.17, F.S.;

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Florida Senate - 2021 CS for SB 46 Florida Senate - 2021 CS for SB 46

By the Committee on Regulated Industries; and Senator Hutson

580-01309-21 202146c1 580-01309-21 202146c1
1 A bill to be entitled 30 prohibitions on the transfer of a craft distillery
2 An act relating to craft distilleries; amending s. 31 license or ownership interest in such license;
3 565.02, F.S.; defining the term “destination 32 revising prohibitions relating to affiliated ownership
4 entertainment venue”; authorizing craft distilleries 33 of craft distilleries; authorizing a craft distillery
5 to be licensed as specified vendors under certain 34 to transfer specified distilled spirits from certain
6 circumstances; providing requirements for such 35 locations to its souvenir gift shop and tasting room;
7 licenses; providing requirements for craft 36 making technical changes; amending s. 565.17, F.S.;
8 distilleries for such licenses; prohibiting a licensee 37 authorizing craft distilleries to conduct spirituous
9 from taking certain actions; requiring certain 38 beverage tastings under certain circumstances;
10 alcoholic beverages to be obtained through a licensed 39 requiring the division to issue permits to craft
11 distributor; amending s. 565.03, F.S.; redefining the 40 distilleries to conduct tastings and sales at certain
12 terms “branded product” and “craft distillery”; 41 locations; specifying requirements for distilleries
13 prohibiting a distillery from operating as a craft 42 for such permits; providing an effective date.
14 distillery until certain requirements are met; 43
15 authorizing persons to have common ownership in craft 44 Be It Enacted by the Legislature of the State of Florida:
16 distilleries under certain circumstances; defining the 45
17 term “common ownership”; requiring a minimum 46 Section 1. Present subsection (12) of section 565.02,
18 percentage of a craft distillery’s total finished 47 Florida Statutes, is redesignated as subsection (13), and a new
19 branded products to be distilled in this state and 48 subsection (12) is added to that section, to read:
20 contain one or more Florida agricultural products 49 565.02 License fees; vendors; clubs; caterers; and others.—
21 after a specified date; revising the requirements and 50 (12)(a) As used in this subsection, the term “destination
22 prohibitions on the sale of branded products to 51 entertainment venue” means a venue that:
23 consumers by a licensed craft distillery; revising the 52 1. Is located in a designated community redevelopment area
24 circumstances for which a craft distillery must report 53 authorized under an adopted community redevelopment plan to
25 certain information about the production of distilled 54 support urban redevelopment and economic development;
26 spirits to the Division of Alcoholic Beverages and 55 2. Is owned by any person licensed as a craft distillery
27 Tobacco of the Department of Business and Professional 56 located within the destination entertainment venue;
28 Regulation; revising prohibitions on the shipment of 57 3. Is adjacent to and served by multimodal transportation
29 certain products by a craft distillery; revising 58 options, including, at a minimum, bicycle and pedestrian trails

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580-01309-21 202146c1 580-01309-21 202146c1
59 included on an adopted city or county trails map and mass 88 division under s. 565.03 for the craft distillery, including its
60 transit routes established by a city, county, or regional 89 souvenir gift shop or tasting room.
61 transportation authority; and 90 (d) No more than three craft distilleries may be licensed
62 4. Is located within a contiguous area of at least 15 91 as a vendor in a community redevelopment area under this
63 acres, including associated parking and stormwater requirements 92 subsection. Craft distilleries licensed as a vendor under this
64 as required by local law, regulation, or ordinance, and that 93 subsection must be located within the same destination
65 contains: 94 entertainment venue and must share identical ownership, and each
66 a. At least one indoor event venue with a minimum capacity 95 craft distillery must distill, blend, or rectify at least 50,000
67 of 150 people which is fully serviced by a connected onsite 96 gallons of branded products per calendar year.
68 kitchen; 97 (e) Except as otherwise provided in this paragraph, a craft
69 b. At least one outdoor event venue with a minimum capacity 98 distillery licensed as a vendor under this subsection shall be
70 of 1,000 people which has regularly occurring live entertainment 99 treated as a vendor and is subject to all provisions relating to
71 on a stage that is at least 12 feet deep and 16 feet wide; and 100 such vendors licensed to sell alcoholic beverages for
72 c. One or more licensed craft distilleries sharing 101 consumption on premises. A craft distillery licensed as a vendor
73 identical ownership. 102 may not make package sales for off-premises consumption or make
74 (b) Notwithstanding any other provisions of the Beverage 103 any delivery or shipment of alcoholic beverages away from the
75 Law, upon the payment of the appropriate fees, a craft 104 destination entertainment venue or the craft distillery, unless
76 distillery licensed in this state may be licensed as a vendor 105 such shipment or delivery is authorized for a craft distillery
77 only for consumption on the premises of alcoholic beverages 106 under s. 565.03.
78 manufactured by other manufacturers and acquired through a 107 (f) Alcoholic beverages manufactured by another licensed
79 distributor. The issuance of a license under this paragraph is 108 manufacturer, including branded products manufactured at another
80 not subject to any quota or limitation, except that the craft 109 craft distillery location sharing identical ownership, must be
81 distillery must be: 110 obtained through a licensed distributor.
82 1. Located on property within a destination entertainment 111 Section 2. Paragraphs (a) and (b) of subsection (1) and
83 venue; and 112 subsections (2) and (5) of section 565.03, Florida Statutes, are
84 2. In operation and open for tours during normal business 113 amended to read:
85 hours at least 5 days a week. 114 565.03 License fees; manufacturers, distributors, brokers,
86 (c) The vendor license may be issued only for the premises 115 sales agents, and importers of alcoholic beverages; vendor
87 included on the licensed premises sketch on file with the 116 licenses and fees; distilleries and craft distilleries.—

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117 (1) As used in this section, the term: 146 50,000 gallons or less of distilled spirits per calendar year.
118 (a) “Branded product” means any distilled spirits product 147
119 that: 148 As used in this paragraph, the term “common ownership” means
120 1. Is owned by a craft distillery; 149 having a direct or indirect financial interest in two or more
121 2. Contains distilled spirits that are manufactured by 150 distilleries by the same person.
122 distilling, rectifying, or blending by the craft distillery on 151 (c) Effective July 1, 2026, a minimum of 60 percent of a
123 its licensed premises; and 152 craft distillery’s total finished branded products must be
124 3. Has manufactured on site, which requires a federal 153 distilled in this state and contain one or more Florida
125 certificate and label approval by the Federal Government Alcohol 154 agricultural products.
126 Administration Act or federal regulations. 155 (d) A distillery or a craft distillery authorized to do
127 (b) “Craft distillery” means a licensed distillery in this 156 business under the Beverage Law shall pay an annual state
128 state which distills, rectifies, or blends 250,000 that produces 157 license tax for each plant or branch operating in the state, as
129 75,000 or fewer gallons or less of distilled spirits per 158 follows:
130 calendar year of distilled spirits on its premises and has 159 1. A distillery engaged in the business of manufacturing
131 notified the division in writing of its decision to qualify as a 160 distilled spirits: $4,000.
132 craft distillery. 161 2. A craft distillery engaged in the business of
133 (2)(a) A distillery may not operate as a craft distillery 162 manufacturing distilled spirits: $1,000.
134 until the distillery has provided to the division written 163 3. A person engaged in the business of rectifying and
135 notification that it meets the criteria specified in paragraph 164 blending spirituous liquors and nothing else: $4,000.
136 (1)(b). Upon the division’s receipt of the notification and its 165 (e)(b) A licensed distillery or licensed craft distillery
137 verification that the distillery meets all such criteria, the 166 may Persons licensed under this section who are in the business
138 division shall add the designation of craft distiller on the 167 of distilling spirituous liquors may also engage in the business
139 distillery’s license. 168 of rectifying or and blending spirituous liquors without the
140 (b) A person may not share common ownership in more than 10 169 payment of an additional license tax.
141 craft distilleries, provided that no more than: 170 (f)(c) A craft distillery licensed under this section may
142 1. Four of the distilleries each distill, rectify, or blend 171 sell directly to consumers up to 75,000 gallons per calendar
143 250,000 gallons or less of distilled spirits per calendar year; 172 year of, at its souvenir gift shop, branded products that are
144 and 173 manufactured by the craft distillery distilled on its premises.
145 2. Six of the distilleries each distill, rectify, or blend 174 A craft distillery may sell branded products directly to

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175 consumers by the drink for consumption on the premises or by the 204 consumers must comply with the container limits in s. 565.10,
176 package in factory-sealed containers for consumption off the 205 per calendar year for the consumer’s personal use and not for
177 premises in this state in factory-sealed containers that are 206 resale and who are present at the distillery’s licensed premises
178 filled at the distillery for off-premises consumption. Such 207 in this state.
179 sales are authorized only in the craft distillery’s souvenir 208 3. A craft distillery must report to the division within 5
180 gift shop or tasting room located on private property contiguous 209 days after it exceeds reaches the production limits or is no
181 to the licensed distillery premises. Branded products sold to 210 longer operating under the requirements or limitations provided
182 consumers must have been distilled, rectified, or blended on the 211 in paragraph (1)(b). Any retail sales of branded products by the
183 distillery premises that is located contiguous to the craft 212 drink or by the package to consumers at the craft distillery’s
184 distillery’s souvenir gift shop or tasting room. The souvenir 213 licensed premises are prohibited beginning the day after it
185 gift shop or tasting room must be in this state and included on 214 exceeds reaches the production limitation.
186 the sketch or diagram defining the licensed premises submitted 215 3.4. A craft distillery may not ship or arrange to ship any
187 with the distillery’s license application. All sketch or diagram 216 of its branded products or any other alcoholic beverages
188 revisions by the distillery shall require the division’s 217 distilled spirits to consumers and may sell and deliver only to
189 approval verifying that the locations of the souvenir gift shops 218 consumers within the state in a face-to-face transaction at the
190 and tasting rooms shop location operated by the licensed 219 distillery property. However, a craft distillery distiller
191 distillery are is owned or leased by the distillery and on 220 licensed under this section may ship, arrange to ship, or
192 property contiguous to the distillery’s production building in 221 deliver such spirits to any manufacturers of distilled spirits,
193 this state. 222 wholesale distributors of distilled spirits, state or federal
194 1. Except as authorized under s. 565.17(2), a craft 223 bonded warehouses, or and exporters.
195 distillery may not sell any factory-sealed individual containers 224 4.5. Except as provided in subparagraph 5. subparagraph 6.,
196 of spirits to consumers except in face-to-face sales 225 it is unlawful to transfer a craft distillery license for a
197 transactions with such consumers at the craft distillery’s 226 distillery that produces 75,000 or fewer gallons per calendar
198 licensed premises. Such branded products must be in compliance 227 year of distilled spirits on its premises or any ownership
199 with the container limits under s. 565.10 and be intended for 228 interest in such license to an individual or entity that has a
200 personal consumption rather than for resale who are making a 229 direct or indirect ownership interest in any distillery that
201 purchase of no more than six individual containers of each 230 distills, rectifies, or blends 250,000 gallons or more per
202 branded product. 231 calendar year of distilled spirits under any license issued
203 2. Each container sold in face-to-face transactions with 232 licensed in this state; in another state, territory, or country;

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Florida Senate - 2021 CS for SB 46 Florida Senate - 2021 CS for SB 46

580-01309-21 202146c1 580-01309-21 202146c1
233 or by the United States Government to distill manufacture, 262 561.42, provided that the conduct of the spirituous beverage
234 blend, or rectify distilled spirits for beverage purposes. 263 tasting shall be limited to and directed toward the general
235 5.6. Except as provided in paragraph (b), a craft 264 public of the age of legal consumption.
236 distillery may shall not have its ownership affiliated with 265 (2) Craft distilleries may conduct tastings and sales of
237 another distillery, unless such distillery is owned by an 266 distilled spirits produced by the craft distilleries at Florida
238 individual or entity that distills, rectifies, or blends 250,000 267 fairs, trade shows, farmers markets, expositions, and festivals.
239 gallons or less per calendar year of distilled spirits produces 268 The division shall issue permits to craft distilleries for such
240 75,000 or fewer gallons per calendar year of distilled spirits 269 tastings and sales. A craft distillery must pay all entry fees
241 on each of its premises in this state or in another state, 270 and must have a distillery representative present during the
242 territory, or country. 271 event. The permit is limited to the duration and physical
243 6. A craft distillery may transfer up to 75,000 gallons per 272 location of the event.
244 calendar year of its branded products that it distills, 273 Section 4. This act shall take effect July 1, 2021.
245 rectifies, or blends from its federal bonded space, nonbonded
246 space at its licensed premises, or storage areas to its souvenir
247 gift shop and tasting room.
248 (5) A craft distillery making sales under paragraph (2)(f)
249 paragraph (2)(c) is responsible for submitting any excise taxes
250 due to the state on distilled spirits on beverages under the
251 Beverage Law with in its monthly report to the division with any
252 tax payments due to the state.
253 Section 3. Section 565.17, Florida Statutes, is amended to
254 read:
255 565.17 Beverage tastings by distributors, craft
256 distilleries, and vendors.—
257 (1) A licensed distributor of spirituous beverages, a craft
258 distillery as defined in s. 565.03, or any vendor, is authorized
259 to conduct spirituous beverage tastings upon any licensed
260 premises authorized to sell spirituous beverages by package or
261 for consumption on premises without being in violation of s.

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The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)

Prepared By: The Professional Staff of the Committee on Commerce and Tourism

BILL: SB 602
INTRODUCER: Senator Burgess
SUBJECT: Business Organizations
DATE: February 12, 2021 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Harmsen McKay CM Pre-meeting
2. JU
3. RC

I. Summary:

SB 602 amends several sections of the Florida Business Corporation Act (FBCA), ch. 607, F.S.,
and related statutes to address concerns raised by corporations and the legal community pursuant
to a complete revision of the FBCA in 2019.1 Specifically, the bill:
 Narrows the circumstances under which a shareholder may assert his or her appraisal rights;
 Modifies the market out exception to accommodate privately-held corporations whose stock
is not traded on an organized market, but who do have a comparable trading process;
 Addresses appraisal arbitrage, wherein disinterested parties abuse the appraisal rights
afforded under Florida law to churn additional profits from the process;
 Makes clarifying and conforming changes to fix minor errors in the 2019 and 20202 FBCA
legislation;
 Revises the requirements for eligible entities to use the name of a dissolved corporation; and
 Clarifies the application of corporation not-for-profit statutes in ch. 617, F.S., to the operation
of condominiums, cooperatives, homeowners associations, timeshares, and mobile
homeowners associations organized under chs. 718, 719, 720, 721, and 723, F.S.

II. Present Situation:

In 2019, the Legislature substantially amended ch. 607, F.S., the Florida Business Corporation
Act (FBCA), to reflect changes to the Model Business Corporation Act3 and ch. 605, F.S., the
Florida Revised Limited Liability Corporate Act (FRLLCA). In 2020, the Legislature made
several clarifying and conforming changes to the FBCA.

1
Chapter 2019-90, Laws of Fla. CS/CS/HB 1009 was signed into law on June 7, 2019, and took effect on January 1, 2020.
2
Chapter 2020-32, Laws of Fla. CS/SB 828 was signed into law on June 3, 2020, and took effect immediately upon
becoming law.
3
American Bar Association, Model Business Corporation Act (2016),
https://www.americanbar.org/content/dam/aba/administrative/business_law/corplaws/2016_mbca.authcheckdam.pdf (last
visited Feb. 12, 2021).
BILL: SB 602 Page 2

Since the 2019 update of the FBCA, the Florida Bar Business Law Section (Business Law
Section) has identified three additional areas of concern.4 This bill, drafted with input from the
Business Law Section and other community stakeholders, modifies the FBCA’s provisions to
address perceived abuses and fairness issues.

Further discussion of the present situation is discussed below in conjunction with the Effect of
Proposed Changes.

III. Effect of Proposed Changes:

Appraisal Rights

Minority shareholders may dissent to corporate or majority shareholder action by asserting their
appraisal rights, pursuant to ss. 607.1301-607.1340, F.S., which requires a corporation to buy the
minority shareholders’ stock at its “fair value.”5 This remedy is one of the few protections
against actions that “… fundamentally change the nature of the shareholders’ investments
without the check and balance of informed shareholder approval, and [provide] the opportunity
for dissenters to withdraw from the corporation.”6

A minority shareholder may assert his or her appraisal rights only in specific instances where a
fundamental corporate change occurs, including (and subject to substantial restrictions and
limits) the domestication or conversion to another type of business entity, a merger or share
exchange, a disposition of all or substantially all of the corporation’s assets, an amendment to the
corporation’s articles of incorporation that creates fractional shares, and in other cases involving
a corporation’s articles of incorporation, bylaws, or a resolution of its board of directors.7, 8

The appraisal process is effectuated through a judicial hearing, where a court appraises the fair
value of the shareholder’s interests and assesses the corporation for payment of both the fair
value and any accrued interest, calculated according to s. 55.03, F.S.

Triggers of a Minority Shareholder’s Appraisal Rights
Section 3 amends s. 607.1302, F.S., to narrow the instances that trigger a minority shareholder’s
appraisal rights. Section 607.1302(1)(g), F.S., currently entitles shareholders to assert appraisal
rights where an amendment to the articles of incorporation or bylaws adversely alters or
abolishes the shareholder’s voting rights or other rights. The Florida Bar received input that this
entitlement could lead to unnecessary and superficial filing of charter amendments that do not
actually alter the fundamental corporate governance for the purpose of unjust assertion of

4
Florida Bar Business Law Section, Chapter 607 Drafting Subcommittee, White Paper for S.B. 602 & H.B. 339: An Act
Relating to Corporations and Other Entities, 1-2 (Feb., 2021), on file with the Senate Committee on Commerce and Tourism.
5
Section 607.1302(1), F.S. Section 607.1301(5), F.S., defines “fair value” as the value of the corporation’s shares
immediately before the effectiveness of the corporate action in question, using commonly-used valuation concepts and
techniques, without discounting for lack of marketability or minority status of the shares.
6
Gregory Yadley and Christina Nethero, Florida Corporate Practice: Appraisal Rights s. 11:1 (2020); see also, South End
Improvement Group, Inc. by & through Bank of New York v. Mulliken, 602 So. 2d 1327, 1332 (Fla. 4th DCA 1992).
7
Section 607.1302(1), F.S.
8
Gregory Yadley and Christina Nethero, Florida Corporate Practice: Appraisal Rights s. 11:2.C (2020).
BILL: SB 602 Page 3

appraisal rights.9 To prevent such frivolous charter amendments, the bill deletes the broader
entitlement in s. 607.1302(1)(g), F.S.

Section 3 also amends s. 607.1302(1)(h), F.S., to allow minority shareholders who experience
specific fundamental corporate changes to assert appraisal rights. This right extends only to
shareholders in a corporation with 100 or fewer shareholders, whose shares were authorized on,
or after October 1, 2003.

Minority shareholders may still assert their appraisal rights under several other bases enumerated
in s. 607.1302(1), F.S.

Market Out Exception to Appraisal Rights
Thirty-eight states, including Florida, operate under the “market out exception,” which restricts
the appraisal rights available to shareholders of stock in large or publicly traded corporations.
“[P]ublic shareholders presumptively have an available market. [W]hen a public market exists…,
public shareholders must employ market price instead of court-appraisal as the measure of their
interests.”10

In Florida, the market out exception excludes shareholders from asserting appraisal rights if their
shares are a covered security; are not a covered security, but are traded in an organized market;
or are issued by an open end management investment company that is registered with the
Securities and Exchange Commission.11

Section 3 broadens the market out exception found in s. 607.1302(2), F.S., by prohibiting
appraisal actions that are asserted in connection with a corporation’s merger, share exchange, or
disposition of corporate assets (as permitted by the corporation’s articles of incorporation or
bylaws), or those that adversely affect a shareholder of a closely held corporation or a
shareholder who holds shares issued prior to October 1, 2003.

This amendment will limit a minority shareholder’s ability to assert his or her appraisal rights, if
made pursuant to s. 607.1302(1)(f) or (h), F.S., if the shares can be sold on an organized market
that is liquid and where the value of the shares is reasonably calculated to arrive at a price that
reflects an arm’s length transaction.

Section 3 also amends the market out exception to apply where the shares held are not a covered
security, and therefore are not traded in an organized market, but are subject to a “comparable
trading process.” The bill defines a “comparable trading process” as one where (1) the share’s
market price is determined at least quarterly based on an independent valuation and by following
a formalized process that is designed to determine a value for the corporation’s shares that is
comparable to the value of a comparable publicly traded company; and (2) the corporation
repurchases the shares at pricing set by its board of directors based on the independent valuation
and subject to established terms and conditions that have been provided to the shareholders. This

9
Florida Bar Business Law Section, Chapter 607 Drafting Subcommittee, supra note 4, at 3-4.
10
Gil Matthews, The “Market Exception” in Appraisal Statutes, (Mar. 30, 2020),
https://corpgov.law.harvard.edu/2020/03/30/the-market-exception-in-appraisal-statues/ (last visited Feb. 12, 2021).
11
Section 607.1302(2)(a), F.S.
BILL: SB 602 Page 4

will permit companies that meet these requirements to prohibit appraisal actions by their
minority shareholders, and to instead apply the market out exception.

Section 607.1302(2)(b), F.S., outlines the point in time at which a minority shareholder’s right to
assert appraisal rights is determined. Section 3 of the bill clarifies that, in cases in which the
corporate action in question will be approved by shareholders’ signed, written consent, the
corporate qualities must be scrutinized at the point at which the record date was fixed to
determine the shareholders entitled to sign the consent.

Abuse of Appraisal Rights

The Florida Bar has perceived an abuse of the appraisal rights provisions in Florida.12 Appraisal
arbitrage is when activist investors buy up shares of a corporation merely for the purpose of
gaining earnings on any possible upside to the corporation’s shares, and asserting appraisal rights
to earn interest off of the action.13 This bill seeks to address the arbitrage issue by:
 Involving courts in the determination of the appropriate interest to award in appraisal matters,
and giving them leeway to award no interest;
 Giving corporations the right to prepay their interest: and
 Requiring the shareholder to acquire a beneficial ownership of shares prior to the initiation of
the applicable corporate action that gave rise to appraisal.

Award of Accrued Interest in an Appraisal Action
Section 2 amends s. 607.1301, F.S., to update the definition of “accrued interest” as it applies to
a shareholder’s appraisal rights. Currently, interest on payments made pursuant to an assertion of
one’s appraisal rights is calculated at the statutory judgment interest rate as described in s. 55.03,
F.S. The bill requires the parties in an appraisal action either to agree to an interest rate between
themselves, or to accept a rate determined by a court to be equitable. The court’s rate may not
exceed the statutory judgment rate described in s. 55.03, F.S. Additionally, this section permits a
court to prohibit the payment of interest where it finds that the shareholder who asserted his or
her appraisal rights acted arbitrarily or not in good faith in doing so.

Sections 6, 7, and 8 make conforming changes to ss. 607.1322, 607.1326, and 607.1330, F.S.,
respectively, to reflect both that the rate of interest is variable, and that a court may choose not to
award accrued interest pursuant to the amended definition of the term in section 2 of the bill.

Prepayment of Interest
Section 7 amends s. 607.1326, F.S., to give corporations the option to prepay the fair value of
the shares that are subject a shareholder’s appraisal action. Such prepayment shortens the amount
of time during which interest can accrue, and therefore mitigates risk to the corporation.
Specifically, the bill allows the corporation to prepay all, or any part of the amount, that it

12
Florida Bar Business Law Section, Chapter 607 Drafting Subcommittee, White Paper for S.B. 602 & H.B. 339: An Act
Relating to Corporations and Other Entities, 6 (Feb., 2021), on file with the Senate Committee on Commerce and Tourism.
13
American Bar Association, Appraisal Arbitrage (May 14, 2020),
https://www.americanbar.org/groups/business_law/publications/the_business_lawyer/find_by_subject/buslaw_tbl_mci_appra
isal/#:~:text=In%20the%20controversial%20practice%20of,the%20price%20of%20the%20deal.&text=Thus%2C%20awards
%20that%20are%20skewed,practices%20likely%20encourage%20appraisal%20arbitrage. (last visited Feb. 12, 2021).
BILL: SB 602 Page 5

determines is due to the shareholder. If the corporation makes the prepayment within 90 days
after the appraisal notice, then the corporation may only be liable for the accrued interest on any
amount above what it prepaid to the shareholder. If the corporation makes a payment after the
90-day period, but before a judicial determination of the interest due, then the corporation must
prepay at the statutory judgment rate provided for in s. 55.03, F.S., and may be liable for
additional interest on any excess payment due, calculated from the date the corporate action
became effective.

Section 8 makes conforming changes to s. 607.1330, F.S., to acknowledge the prepayment
options provided for in section 7 of the bill.

Beneficial Ownership Required by Record Date
Sections 4 and 5 amend ss. 607.1303 and 607.1321, F.S., respectively, to require a shareholder
who wishes to assert his or her appraisal rights to have a beneficial ownership of his or her shares
in the corporation by the record date established for the triggering corporate action. Additionally,
the bill now requires the shareholder to assert his or her appraisal rights as to all of the shares he
or she owns.

Section 5 also amends s. 607.1321, F.S., to require shareholders to have beneficially owned
shares in the corporation on the date a tender offer for purchase was made pursuant to s.
607.11035, F.S.

Clarifying and Conforming Changes

Section 1 makes a non-substantive grammar change to s. 605.0410, F.S.

Sales in dissolution were transferred to ss. 607.1401-607.1410, F.S., by the 2019 FBCA
legislation. Section 3 removes a reference to a sale in dissolution from s. 607.1302(1)(d), F.S., to
conform to prior changes. This section also makes a nonsubstantive grammatical change to s.
607.1302(1)(c), F.S.

SB 892 (2019) inadvertently changed the period of time that a dissolved entity’s name is
unavailable after the effective date of its dissolution from 120 days to 1 year. Section 9 reverts to
the 120-day period and makes a separate, non-substantive conforming change.

Section 11 clarifies that ch. 617, F.S., regarding corporations not-for-profit, applies to ch. 718,
F.S., regarding condominiums, ch. 719, F.S., regarding cooperatives, ch. 720, F.S., regarding
homeowners associations, ch. 721, F.S., F.S., regarding timeshares, and ch. 723, F.S., regarding
mobile homeowners associations, only to the extent that there is a conflict between the chapters.
The bill further clarifies that chs. 718-721 and 723, F.S., control where a conflict arises between
those chapters and ch. 617, F.S.

Section 10 updates cross-references to correct scrivener errors.

Effective Date

Section 12 of the bill provides that the bill takes effect upon becoming law.
BILL: SB 602 Page 6

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

None.

B. Public Records/Open Meetings Issues:

None.

C. Trust Funds Restrictions:

None.

D. State Tax or Fee Increases:

None.

E. Other Constitutional Issues:

None identified.

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

None.

B. Private Sector Impact:

Several changes will impact certain shareholders negatively; this may be counteracted by
the reduction of inflated payments to appraisal arbitrageurs. Additionally, corporations
and shareholders will need to familiarize themselves with the changes made to their
rights and responsibilities.

C. Government Sector Impact:

The bill deletes the provision that defined the interest applicable in appraisal proceedings.
As a result, courts may be called on more frequently to determine the interest rate and
accrued interest due in such cases.

VI. Technical Deficiencies:

None.

VII. Related Issues:

None.
BILL: SB 602 Page 7

VIII. Statutes Affected:

This bill substantially amends the following sections of the Florida Statutes: 605.0410, 607.1301,
607.1302, 607.1303, 607.1321, 607.1322, 607.1326, 607.1330, 607.1405, 617.0825, and
617.1703.

IX. Additional Information:

A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)

None.

B. Amendments:

None.

This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.
Florida Senate - 2021 COMMITTEE AMENDMENT
Bill No. SB 602

Ì454720|Î454720

LEGISLATIVE ACTION
Senate . House
.
.
.
.
.

The Committee on Commerce and Tourism (Burgess) recommended the
following:

1 Senate Amendment (with title amendment)
2
3 Between lines 427 and 428
4 insert:
5 Section 10. Section 617.0725, Florida Statutes, is amended
6 to read:
7 617.0725 Quorum.—An amendment to the articles of
8 incorporation or the bylaws which adds, changes, or deletes a
9 greater or lesser quorum or voting requirement must meet the
10 same quorum or voting requirement and be adopted by the same

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2/10/2021 4:40:37 PM 577-02035-21
Florida Senate - 2021 COMMITTEE AMENDMENT
Bill No. SB 602

Ì454720|Î454720

11 vote and voting groups required to take action under the quorum
12 and voting requirements then in effect or proposed to be
13 adopted, whichever is greater. This section does not apply to
14 any corporation that is an association, as defined in s.
15 720.301(9), or any corporation regulated under chapter 718 or
16 chapter 719.
17
18 ================= T I T L E A M E N D M E N T ================
19 And the title is amended as follows:
20 Between lines 28 and 29
21 insert:
22 amending s. 617.0725, F.S.; providing applicability;

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2/10/2021 4:40:37 PM 577-02035-21
Florida Senate - 2021 SB 602 Florida Senate - 2021 SB 602

By Senator Burgess

20-00386B-21 2021602__ 20-00386B-21 2021602__
1 A bill to be entitled 30 applicability; providing an effective date.
2 An act relating to business organizations; amending s. 31
3 605.0410, F.S.; revising requirements relating to 32 Be It Enacted by the Legislature of the State of Florida:
4 inspecting certain records of limited liability 33
5 companies; amending s. 607.1301, F.S.; revising the 34 Section 1. Paragraph (b) of subsection (3) of section
6 definition of the term “accrued interest”; amending s. 35 605.0410, Florida Statutes, is amended to read:
7 607.1302, F.S.; revising the circumstances under which 36 605.0410 Records to be kept; rights of member, manager, and
8 shareholders are entitled to appraisal rights and 37 person dissociated to information.—
9 certain payments; revising limitations relating to 38 (3) In a manager-managed limited liability company, the
10 such rights and payments; revising applicability; 39 following rules apply:
11 amending s. 607.1303, F.S.; revising the circumstances 40 (b) During regular business hours and at a reasonable
12 in which certain shareholders may assert specified 41 location specified by the company, a member may inspect and
13 appraisal rights; amending s. 607.1321, F.S.; revising 42 copy:
14 requirements for shareholders who wish to assert 43 1. The records described in subsection (1); and
15 appraisal rights relating to specified corporate 44 2. Full information regarding the activities, affairs,
16 actions; amending s. 607.1322, F.S.; making a 45 financial condition, and other circumstances of the company as
17 technical change; amending s. 607.1326, F.S.; 46 is just and reasonable if:
18 entitling corporations to prepay a shareholder if the 47 a. The member seeks the information for a purpose
19 shareholder makes a demand for payment; specifying 48 reasonably related to the member’s interest as a member; and or
20 when interest is applicable to such prepayments; 49 b. The member makes a demand in a record received by the
21 making technical changes; amending s. 607.1330, F.S.; 50 company, describing with reasonable particularity the
22 revising requirements for proceedings relating to 51 information sought and the purpose for seeking the information,
23 unsettled demands for payment; revising the 52 and if the information sought is directly connected to the
24 eligibility requirements for shareholders entitled to 53 member’s purpose.
25 the fair value of shares during court proceedings; 54 Section 2. Subsection (1) of section 607.1301, Florida
26 making technical and conforming changes; amending s. 55 Statutes, is amended to read:
27 607.1405, F.S.; revising the requirements for eligible 56 607.1301 Appraisal rights; definitions.—The following
28 entities to use the name of a dissolved corporation; 57 definitions apply to ss. 607.1301-607.1340:
29 amending ss. 617.0825 and 617.1703, F.S.; revising 58 (1) “Accrued interest” means interest from the date the

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59 corporate action becomes effective until the date of payment, at 88 2. If such corporation is a subsidiary and the merger is
60 the rate agreed to by the corporation and the shareholder 89 governed by s. 607.1104;
61 asserting appraisal rights, or at the rate determined by the 90 (c) Consummation of a share exchange to which the
62 court to be equitable, which rate may not be greater than the 91 corporation is a party as the corporation whose shares will be
63 rate of interest of interest determined for judgments pursuant 92 acquired, except that appraisal rights shall not be are not
64 to s. 55.03; however, if the court finds that the shareholder 93 available to any shareholder of the corporation with respect to
65 asserting appraisal rights acted arbitrarily or otherwise not in 94 any class or series of shares of the corporation that is not
66 good faith, no interest shall be allowed by the court, 95 acquired in the share exchange;
67 determined as of the effective date of the corporate action. 96 (d) Consummation of a disposition of assets pursuant to s.
68 Section 3. Subsections (1) and (2) of section 607.1302, 97 607.1202 if the shareholder is entitled to vote on the
69 Florida Statutes, are amended to read: 98 disposition, including a sale in dissolution, except that
70 607.1302 Right of shareholders to appraisal.— 99 appraisal rights shall not be available to any shareholder of
71 (1) A shareholder of a domestic corporation is entitled to 100 the corporation with respect to shares or any class or series
72 appraisal rights, and to obtain payment of the fair value of 101 if:
73 that shareholder’s shares, in the event of any of the following 102 1. Under the terms of the corporate action approved by the
74 corporate actions: 103 shareholders there is to be distributed to shareholders in cash
75 (a) Consummation of a domestication or a conversion of such 104 the corporation’s net assets, in excess of a reasonable amount
76 corporation pursuant to s. 607.11921 or s. 607.11932, as 105 reserved to meet claims of the type described in ss. 607.1406
77 applicable, if shareholder approval is required for the 106 and 607.1407, within 1 year after the shareholders’ approval of
78 domestication or the conversion; 107 the action and in accordance with their respective interests
79 (b) Consummation of a merger to which such corporation is a 108 determined at the time of distribution; and
80 party: 109 2. The disposition of assets is not an interested
81 1. If shareholder approval is required for the merger under 110 transaction;
82 s. 607.1103 or would be required but for s. 607.11035, except 111 (e) An amendment of the articles of incorporation with
83 that appraisal rights shall not be available to any shareholder 112 respect to a class or series of shares which reduces the number
84 of the corporation with respect to shares of any class or series 113 of shares of a class or series owned by the shareholder to a
85 that remains outstanding after consummation of the merger where 114 fraction of a share if the corporation has the obligation or the
86 the terms of such class or series have not been materially 115 right to repurchase the fractional share so created;
87 altered; or 116 (f) Any other merger, share exchange, disposition of

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117 assets, or amendment to the articles of incorporation, in each 146 2. Altering or abolishing the voting rights pertaining to
118 case to the extent provided as of the record date by the 147 any of his, her, or its shares, except as such rights may be
119 articles of incorporation, bylaws, or a resolution of the board 148 affected by the voting rights of new shares then being
120 of directors providing for appraisal rights, except that no 149 authorized of any existing or new class or series of shares;
121 bylaw or board resolution providing for appraisal rights may be 150 3. Effecting an exchange, cancellation, or reclassification
122 amended or otherwise altered except by shareholder approval; 151 of any of his, her, or its shares, when such exchange,
123 (g) An amendment to the articles of incorporation or bylaws 152 cancellation, or reclassification would alter or abolish the
124 of the corporation, the effect of which is to alter or abolish 153 shareholder’s voting rights or alter his, her, or its percentage
125 voting or other rights with respect to such interest in a manner 154 of equity in the corporation, or effecting a reduction or
126 that is adverse to the interest of such shareholder, except as 155 cancellation of accrued dividends or other arrearages in respect
127 the right may be affected by the voting or other rights of new 156 to such shares;
128 shares then being authorized of a new class or series of shares; 157 4. Reducing the stated redemption price of any of the
129 (h) An amendment to the articles of incorporation or bylaws 158 shareholder’s redeemable shares, altering or abolishing any
130 of a corporation, the effect of which is to adversely affect the 159 provision relating to any sinking fund for the redemption or
131 interest of the shareholder by altering or abolishing appraisal 160 purchase of any of his, her, or its shares, or making any of
132 rights under this section; 161 his, her, or its shares subject to redemption when they are not
133 (h)(i) With regard to a class of shares prescribed in the 162 otherwise redeemable;
134 articles of incorporation in any corporation as to which that 163 5. Making noncumulative, in whole or in part, dividends of
135 particular class of shares was in existence prior to October 1, 164 any of the shareholder’s preferred shares which had theretofore
136 2003, including any shares within that class subsequently 165 been cumulative;
137 authorized by amendment, and for classes of shares authorized on 166 6. Reducing the stated dividend preference of any of the
138 or after October 1, 2003, in any corporation with 100 or fewer 167 shareholder’s preferred shares; or
139 shareholders prior to October 1, 2003, including any shares 168 7. Reducing any stated preferential amount payable on any
140 within that class subsequently authorized by amendment, any 169 of the shareholder’s preferred shares upon voluntary or
141 amendment of the articles of incorporation if the shareholder is 170 involuntary liquidation;
142 entitled to vote on the amendment and if such amendment would 171 (i)(j) An amendment of the articles of incorporation of a
143 adversely affect such shareholder by: 172 social purpose corporation to which s. 607.504 or s. 607.505
144 1. Altering or abolishing any preemptive rights attached to 173 applies;
145 any of his, her, or its shares; 174 (j)(k) An amendment of the articles of incorporation of a

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175 benefit corporation to which s. 607.604 or s. 607.605 applies; 204 as of:
176 (k)(l) A merger, domestication, conversion, or share 205 1. The record date fixed to determine the shareholders
177 exchange of a social purpose corporation to which s. 607.504 206 entitled to receive notice of the meeting of shareholders to act
178 applies; or 207 upon the corporate action requiring appraisal rights, the record
179 (l)(m) A merger, domestication, conversion, or share 208 date fixed to determine the shareholders entitled to sign a
180 exchange of a benefit corporation to which s. 607.604 applies. 209 written consent approving the corporate action requiring
181 (2) Notwithstanding subsection (1), the availability of 210 appraisal rights, or, in the case of an offer made pursuant to
182 appraisal rights under paragraphs (1)(a), (b), (c), (d), and 211 s. 607.11035, the date of such offer; or
183 (e), (f), and (h) shall be limited in accordance with the 212 2. If there will be no meeting of shareholders, no written
184 following provisions: 213 consent approving the corporate action, and no offer is made
185 (a) Appraisal rights shall not be available for the holders 214 pursuant to s. 607.11035, the close of business on the day
186 of shares of any class or series of shares which is: 215 before the consummation of the corporate action or the effective
187 1. A covered security under s. 18(b)(1)(A) or (B) of the 216 date of the amendment of the articles, as applicable.
188 Securities Act of 1933; 217 (c) Paragraph (a) is not applicable and appraisal rights
189 2. Not a covered security, but traded in an organized 218 shall be available pursuant to subsection (1) for the holders of
190 market (or subject to a comparable trading process) and has at 219 any class or series of shares where the corporate action is an
191 least 2,000 shareholders and the outstanding shares of such 220 interested transaction.
192 class or series have a market value of at least $20 million, 221 (d) For the purposes of subparagraph (a)2., a comparable
193 exclusive of the value of outstanding shares held by the 222 trading process exists if:
194 corporation’s subsidiaries, by the corporation’s senior 223 1. The market price of the corporation’s shares is
195 executives, by the corporation’s directors, and by the 224 determined at least quarterly based on an independent valuation
196 corporation’s beneficial shareholders and voting trust 225 and by following a formalized process that is designed to
197 beneficial owners owning more than 10 percent of the outstanding 226 determine a value for the corporation’s shares that is
198 shares; or 227 comparable to the value of comparable publicly traded companies;
199 3. Issued by an open end management investment company 228 and
200 registered with the Securities and Exchange Commission under the 229 2. The corporation repurchases the shares at the price set
201 Investment Company Act of 1940 and which may be redeemed at the 230 by its board of directors based upon the independent valuation
202 option of the holder at net asset value. 231 and subject to certain terms and conditions established by the
203 (b) The applicability of paragraph (a) shall be determined 232 corporation and provides the corporation’s shareholders with a

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233 trading market comparable to that typically available had the 262 if the shares as to which the record shareholder objects and the
234 corporation’s shares been traded in an organized market. 263 record shareholder’s other shares were registered in the names
235 Section 4. Subsection (1) of section 607.1303, Florida 264 of different record shareholders.
236 Statutes, is amended, and paragraph (c) is added to subsection 265 (2) A beneficial shareholder and a voting trust beneficial
237 (2) of that section, to read: 266 owner may assert appraisal rights as to shares of any class or
238 607.1303 Assertion of rights by nominees and beneficial 267 series held on behalf of the shareholder only if such
239 owners.— 268 shareholder:
240 (1) A record shareholder may assert appraisal rights as to 269 (c) Acquired all shares of the class or series before the
241 fewer than all the shares registered in the record shareholder’s 270 record date established under s. 607.1321 in connection with the
242 name but owned by a beneficial shareholder or a voting trust 271 applicable corporate action.
243 beneficial owner only if: 272 Section 5. Subsections (1), (2), and (3) of section
244 (a) The record shareholder objects with respect to all 273 607.1321, Florida Statutes, are amended to read:
245 shares of the class or series owned by the beneficial 274 607.1321 Notice of intent to demand payment.—
246 shareholder or the voting trust beneficial owner; 275 (1) If a proposed corporate action requiring appraisal
247 (b) The particular beneficial shareholder or voting trust 276 rights under s. 607.1302 is submitted to a vote at a
248 beneficial owner acquired all such shares before the record date 277 shareholders’ meeting, a shareholder who wishes to assert
249 established under s. 607.1321 in connection with the applicable 278 appraisal rights with respect to any class or series of shares:
250 corporate action; and 279 (a) Must have beneficially owned the shares of such class
251 (c) The record shareholder and notifies the corporation in 280 or series as of the record date for the shareholders’ meeting at
252 writing of its the name and address (if the record shareholder 281 which the proposed corporate action is to be submitted to a
253 beneficially owns the shares as to which appraisal rights are 282 vote;
254 being asserted) or notifies the corporation in writing of the 283 (b) Must deliver to the corporation before the vote is
255 name and address of the particular of each beneficial 284 taken written notice of the shareholder’s intent, if the
256 shareholder or voting trust beneficial owner on whose behalf 285 proposed corporate action is effectuated, to demand payment for
257 appraisal rights are being asserted. 286 all shares of such class or series beneficially owned by the
258 287 shareholder as of the record date for the shareholders’ meeting
259 The rights of a record shareholder who asserts appraisal rights 288 at which the proposed corporate action is to be submitted to a
260 for only part of the shares held of record in the record 289 vote if the proposed corporate action is effectuated; and
261 shareholder’s name under this subsection shall be determined as 290 (c)(b) Must not vote, or cause or permit to be voted, any

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291 shares of such class or series in favor of the proposed 320 any shares of such class or series in response to such offer.
292 corporate action. 321 Section 6. Paragraph (a) of subsection (2) of section
293 (2) If a proposed corporate action requiring appraisal 322 607.1322, Florida Statutes, is amended to read:
294 rights under s. 607.1302 is to be approved by written consent, a 323 607.1322 Appraisal notice and form.—
295 shareholder who wishes to assert appraisal rights with respect 324 (2) The appraisal notice must be delivered no earlier than
296 to any class or series of shares: 325 the date the corporate action became effective, and no later
297 (a) Must have beneficially owned the shares of such class 326 than 10 days after such date, and must:
298 or series as of the record date established for determining who 327 (a) Supply a form that specifies the date that the
299 is entitled to sign a written consent; 328 corporate action became effective and that provides for the
300 (b) Must assert such appraisal rights for all shares of 329 shareholder to state:
301 such class or series beneficially owned by the shareholder as of 330 1. The shareholder’s name and address.
302 the record date for determining who is entitled to sign the 331 2. The number, classes, and series of shares as to which
303 written consent; and 332 the shareholder asserts appraisal rights.
304 (c) Must not sign a consent in favor of the proposed 333 3. That the shareholder did not vote for or consent to the
305 corporate action with respect to that class or series of shares. 334 transaction.
306 (3) If a proposed corporate action specified in s. 335 4. Whether the shareholder accepts the corporation’s offer
307 607.1302(1) does not require shareholder approval pursuant to s. 336 as stated in subparagraph (b)4.
308 607.11035, a shareholder who wishes to assert appraisal rights 337 5. If the offer is not accepted, the shareholder’s
309 with respect to any class or series of shares: 338 estimated fair value of the shares and a demand for payment of
310 (a) Must have beneficially owned the shares of such class 339 the shareholder’s estimated value plus accrued interest, if and
311 or series as of the date the offer to purchase is made pursuant 340 to the extent applicable.
312 to s. 607.11035; 341 Section 7. Section 607.1326, Florida Statutes, is amended
313 (b) Must deliver to the corporation before the shares are 342 to read:
314 purchased pursuant to the offer a written notice of the 343 607.1326 Procedure if shareholder is dissatisfied with
315 shareholder’s intent to demand payment if the proposed corporate 344 offer.—
316 action is effected for all shares of such class or series 345 (1) A shareholder who is dissatisfied with the
317 beneficially owned by the shareholder as of the date the offer 346 corporation’s offer as set forth pursuant to s. 607.1322(2)(b)4.
318 to purchase is made pursuant to s. 607.11035; and 347 must notify the corporation on the form provided pursuant to s.
319 (c)(b) Must not tender, or cause or permit to be tendered, 348 607.1322(1) of that shareholder’s estimate of the fair value of

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349 the shares and demand payment of that estimate plus accrued 378 previously made to the shareholder by the corporation pursuant
350 interest, if and to the extent applicable. 379 to this paragraph.
351 (2) A shareholder who fails to notify the corporation in 380 (b) If such prepayment is made more than 90 days after the
352 writing of that shareholder’s demand to be paid the 381 earlier of the date on which the appraisal notice is provided by
353 shareholder’s stated estimate of the fair value plus accrued 382 the corporation under s. 607.1322(1) or the deadline date by
354 interest, if and to the extent applicable, under subsection (1) 383 which the appraisal notice is required to be provided by the
355 within the timeframe set forth in s. 607.1322(2)(b)2. waives the 384 corporation under s. 607.1322(2), the prepayment must include
356 right to demand payment under this section and shall be entitled 385 accrued interest on the amount of the prepayment, calculated at
357 only to the payment offered by the corporation pursuant to s. 386 the rate of interest determined for judgments pursuant to s.
358 607.1322(2)(b)4. 387 55.03 and calculated and accrued from the date that the
359 (3) With respect to a shareholder who properly makes demand 388 corporate action became effective through the date of the
360 for payment pursuant to subsection (1), at any time after the 389 prepayment previously made to the shareholder by the corporation
361 shareholder makes such demand, including during a court 390 pursuant to this paragraph. In addition, accrued interest will
362 proceeding under s. 607.1330, the corporation shall have the 391 be payable to the shareholder entitled to appraisal rights on
363 right to prepay to the shareholder all or any portion of the 392 such amounts, if any, determined to be due to the shareholder in
364 amount that the corporation determines to be due under s. 393 excess of the prepaid amount, calculated and accrued from the
365 607.1322(2)(b)3. and the shareholder shall be obligated to 394 date on which the corporate action became effective.
366 accept such prepayment. 395 Section 8. Subsections (1) and (5) of section 607.1330,
367 (a) If such prepayment is made within 90 days after the 396 Florida Statutes, are amended to read:
368 earlier of the date on which the appraisal notice is provided by 397 607.1330 Court action.—
369 the corporation under s. 607.1322(1) or the deadline date by 398 (1) If a shareholder makes demand for payment under s.
370 which the appraisal notice is required to be provided by the 399 607.1326 which remains unsettled, the corporation shall commence
371 corporation under s. 607.1322(2), accrued interest will be 400 a proceeding within 60 days after receiving the payment demand
372 payable, if at all, to the shareholder entitled to appraisal 401 and petition the court to determine the fair value of the shares
373 rights, calculated and accrued from the date on which the 402 and accrued interest, if and to the extent applicable,
374 corporate action became effective and only on amounts that are 403 calculated and accrued from the date the corporate action became
375 determined to be due to the shareholder and are above the amount 404 effective and taking into account the amount of any prepayment
376 so prepaid. Accrued interest will not be payable to the 405 previously made to the shareholder by the corporation pursuant
377 shareholder entitled to appraisal rights on the prepayment 406 to s. 607.1326(3) from the date of the corporate action. If the

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407 corporation does not commence the proceeding within the 60-day 436 Section 11. Section 617.1703, Florida Statutes, is amended
408 period, any shareholder who has made a demand pursuant to s. 437 to read:
409 607.1326 may commence the proceeding in the name of the 438 617.1703 Application of chapter.—
410 corporation. 439 (1)(a) This chapter is applicable to a corporation that is
411 (5) Each shareholder entitled to appraisal rights who is 440 an association as defined in and regulated by any of chapter 718
412 made a party to the proceeding is entitled to judgment for the 441 regarding condominiums, chapter 719 regarding cooperatives,
413 amount of the fair value of such shareholder’s shares as found 442 chapter 720 regarding homeowners’ associations, chapter 721
414 by the court, plus accrued interest, if and to the extent 443 regarding timeshares, or chapter 723 regarding mobile
415 applicable and as found by the court, taking into account the 444 homeowners’ associations, except:
416 amount of any prepayment previously made to the shareholder by 445 1. For In the event of any conflict between the provisions
417 the corporation pursuant to s. 607.1326(3). 446 of this chapter and chapter 718 regarding condominiums, chapter
418 Section 9. Subsection (5) of section 607.1405, Florida 447 719 regarding cooperatives, chapter 720 regarding homeowners’
419 Statutes, is amended to read: 448 associations, chapter 721 regarding timeshares, or chapter 723;
420 607.1405 Effect of dissolution.— 449 or
421 (5) Except as provided in s. 607.1422(4), the name of a 450 2. As otherwise provided for in chapter 718, chapter 719,
422 dissolved corporation is not available for assumption or use by 451 chapter 720, chapter 721, or chapter 723.
423 another eligible entity until 120 days 1 year after the 452 (b) If subparagraph (a)1. or subparagraph (a)2. applies
424 effective date of dissolution unless the dissolved corporation 453 regarding mobile home owners’ associations, the applicable
425 provides the department with a record, signed as required by s. 454 provisions of such other respective chapters shall apply.
426 607.0120, permitting the immediate assumption or use of the name 455 (2) The provisions of ss. 617.0605-617.0608 do not apply to
427 by another eligible entity. 456 corporations regulated by any of the foregoing chapters or to
428 Section 10. Subsection (9) of section 617.0825, Florida 457 any other corporation where membership in the corporation is
429 Statutes, is amended to read: 458 required pursuant to a document recorded in the county property
430 617.0825 Board committees and advisory committees.— 459 records.
431 (9) This section does not apply to a committee established 460 Section 12. This act shall take effect upon becoming a law.
432 under chapter 718, chapter 719, or chapter 720 to perform the
433 functions set forth in s. 718.303(3), s. 719.303(3), s.
434 720.305(2), s. 720.303(2), or s. 720.3035(1), or s. 720.405,
435 respectively.

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The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)

Prepared By: The Professional Staff of the Committee on Commerce and Tourism

BILL: SB 704
INTRODUCER: Senator Gruters and others
SUBJECT: Entertainment Industry
DATE: February 12, 2021 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Reeve McKay CM Pre-meeting
2. ATD
3. AP

I. Summary:

SB 704 creates the Film, Television, and Digital Media Targeted Rebate Program (program)
within the Department of Economic Opportunity in order to broaden the entertainment industry’s
impact, enhance tourism, and encourage more family-friendly productions to be produced in
Florida.

The program gives rebates on qualified expenditures to film, television, and digital media
production projects that, among other requirements, employ a crew of which at least 60 percent
are Florida residents and spend at least 70 percent of their production days in Florida. A project
may only receive a rebate after it has completed production and its expenditures have been
verified by the Office of Film and Entertainment.

The program is subject to legislative appropriation, but the bill does not contain any
appropriation of state funds.

The bill takes effect upon becoming law.

II. Present Situation:

The Florida Office of Film and Entertainment (OFE) within the Department of Economic
Opportunity (DEO) develops, markets, promotes, and provides services to the state’s
entertainment industry.1 The Florida Film and Entertainment Advisory Council (council) serves
as an advisory body to the DEO and OFE to provide industry insight and expertise related to the
state’s entertainment industry.2

1
Section 288.1251, F.S.
2
Section 288.1252, F.S.
BILL: SB 704 Page 2

Entertainment Industry Sales Tax Exemption

The Entertainment Industry Sales Tax Exemption (tax exemption program), administered by the
OFE, offers a sales and use tax certificate of exemption to production companies that create
qualified productions in Florida.3 The tax exemption program offers exemptions from taxes
levied under ch. 212, F.S., for the following:
 Lease or rental of real property used as an integral part of the performance of qualified
production services, including photography, casting, location scouting, stage support, and
wardrobe;4
 Fabrication labor when a producer is using his or her own equipment and personnel to
produce a qualified motion picture;5
 Purchase or lease of motion picture or video equipment and sound recording equipment used
in Florida for motion picture or television production or for the production of master tapes
and master records;6 and
 Purchase, lease, storage, or use of blank master tapes, records, films, or video tapes.7

To qualify for these tax exemptions, production companies must submit an application to the
Department of Revenue (DOR) which must then be approved by the OFE. If a company has
operated a business in Florida at a permanent address for at least 12 consecutive months, it is
eligible for a one-year certificate of exemption. Companies that do not qualify for a one-year
certificate are eligible for a 90-day certificate of exemption.

The OFE has estimated that qualified production companies have received $46.3 million in
exemptions between Fiscal Years 2016-2017 and 2018-2019.8

Entertainment Industry Financial Incentive Program

The Entertainment Industry Financial Incentive Program (incentive program) was created to
encourage the use of Florida as a site for filming, for the digital production of films, and to
develop and sustain the workforce and infrastructure for film, digital media, and entertainment
production.9 The incentive program offered transferrable tax credits for qualified expenditures
relating to filming and media production activities in Florida, including wages, equipment,
rentals, and other expenditures made to Florida vendors for qualified entertainment industry
productions. Qualified productions that completed their projects and had their expenses verified
by the OFE could receive between 20 and 30 percent of their qualified expenditures in tax
credits, capped at $8 million in tax credits awarded per project.10 Recipients were permitted to

3
Section 288.1258, F.S.
4
Section 212.039(1)(a)9., F.S.
5
Section 212.06(1)(b), F.S.
6
Section 212.08(5)(f), F.S.
7
Section 212.08(12)(a), F.S.
8
Office of Economic and Demographic Research, Return on Investment for the Entertainment Industry Incentive Programs,
7 (2021), available at http://edr.state.fl.us/Content/returnoninvestment/EntertainmentIndustryIncentivePrograms2021.pdf
(last visited Feb. 12, 2021).
9
Section 288.1254(2), F.S.
10
Florida Office of Film and Entertainment, Fiscal Year 2017-2018 Annual Report 5 (2018), available at
https://filminflorida.com/wp-content/uploads/2018/11/Office-of-Film-and-Entertainment-Annual-Report-FY-2017-
2018_FINAL.pdf (last visited Feb. 12, 2021)
BILL: SB 704 Page 3

apply their tax credits to their corporate income taxes, sales taxes, or both; alternately, recipients
could sell their tax credits on the market or back to the state at a reduced rate.11

The incentive program began on July 1, 2010, and sunset on June 30, 2016.12

Local Incentive Programs

Several local governments in Florida offer their own film and entertainment production
incentives, including:13
 Miami-Dade County’s TV, Film, and Entertainment Production Incentive, a performance-
based program that grants up to $100,000 to productions that spend at least $1 million in the
county if at least 70 percent of the hired vendors are county registered businesses;
 Hillsborough County’s rebate program, which offers a rebate of up to 10% on expenditures
within the county in excess of $100,000; and
 Duval County’s Jacksonville Film and Television Job and Business Creation Program, a
performance-based program that offers a 10% rebate upon spending at least $50,000 on
qualified expenditures and hiring Duval County residents.

Other States’ Incentives

The popularity of entertainment industry incentives has decreased among state legislatures. In
2009, 44 states offered some form of incentive, compared to only 31 states that offered an
incentive in 2018.14 Of states considered competitive to Florida, Georgia offers one of the most
generous incentive programs; the state continues to fund its tax credit program at the level of
demand by placing no cap on tax credits that can be earned.15

III. Effect of Proposed Changes:

The bill creates the Film, Television, and Digital Media Targeted Rebate Program (program)
within the DEO, to be supervised by the Commissioner of Film and Entertainment
(commissioner). The program gives rebates to film, television, and digital media production
projects that provide high returns on investment and economic benefit to the state in order to
broaden the entertainment industry’s impact, enhance tourism, and encourage more family-
friendly productions to be produced in Florida.

Upon completion, a project is eligible to receive a rebate of up to 23 percent of its qualified
expenditures, or $2 million, whichever is less. A project’s qualified expenditures must be
verified before the project may receive a rebate, and rebates are subject to repayment if a project
submits fraudulent information.

11
Supra note 8, at 5 and 6.
12
Id.
13
Film Florida, Local Incentive Programs, available at https://filmflorida.org/state-resources/ (last visited Feb. 12, 2021).
14
National Conference of State Legislatures, State Film Production Incentives and Programs (February 2018), available at
https://www.ncsl.org/research/fiscal-policy/state-film-production-incentives-and-programs.aspx (last visited Feb. 12, 2021).
15
Georgia Department of Economic Development, Film, Television, and Digital Entertainment Tax Credit, available at
https://www.georgia.org/industries/film-entertainment/georgia-film-tv-production/production-incentives (last visited Feb. 12,
2021).
BILL: SB 704 Page 4

General Requirements

A project is eligible for a rebate under the program if it:
 Is a film, television, or digital media project that is not obscene, as defined in s. 847.001,
F.S.;
 Has projected qualified expenditures of at least $1.5 million if the project is a film or digital
media project, or at least $500,000 per episode if the project is a television show;
 Employs a crew of which at least 60 percent are Florida residents and at least one is a
military veteran;
 Is projected to spend at least 70 percent of its total production days in the state;
 Will not receive a sales tax exemption through the Florida entertainment sales tax exemption
established under s. 288.1258, F.S.;
 Makes a good faith effort to use existing Florida providers of infrastructure or equipment and
to employ cast and crew who are Florida residents;
 Agrees to include marketing that promotes Florida tourism or Florida’s film and
entertainment industry on its project, including, at minimum, placing a “Filmed in Florida” or
“Produced in Florida” logo in its end credits;
 Permits the commissioner or an affiliate and at least two guests to visit the project’s
production site; and
 Provides at least five photos of the production to the commissioner for use in promoting
Florida as a film, television, or digital media production location or tourist destination.

Application Process

To become a qualified project that is eligible to receive a rebate, an applicant must submit an
application to the commissioner. There are two application windows for the rebate program per
fiscal year, the start date of which will be determined by the commissioner. The first window
may begin before, and must end no later than 5 business days after, July 1. The second window
must end no later than 5 business days after December 1.

An applicant may submit an application for no more than five projects in any one fiscal year.
Except in the case of a television pilot and the television series the pilot is based on being
certified in the same fiscal year, however, only one project per applicant may be certified within
a fiscal year. A proposed project must begin production within 6 months of July 1 if applying in
the first application window, or within 6 months of January 1, if applying in the second window.

Application
In addition to an affidavit signed by the applicant that the information on the application is
correct and the applicant’s Florida tax identification number, applications must include a film,
television, or digital media project’s:
 Proof of funding;
 Employment information, including employment numbers for Florida residents;
 Line-item budget and detailed qualified expenditures budget;
 Distribution plan to assist in determining the project’s potential economic impact in the state;
 Expected total qualified expenditures for wages paid to Florida residents;
 Expected total qualified and nonqualified expenditures in the state;
BILL: SB 704 Page 5

 Latest script, a production schedule, a Day Out of Days report, and a list of the expected
shooting locations, if the project is a film or a pilot episode of a television project;
 Latest scripts for at least two episodes, a production schedule, a Day Out of Days report, and
a list of the expected shooting locations, if the project is a television project; and
 Game design document, including a production schedule, if the project is a digital media
project.

Scoring Criteria
The commissioner and the council must devise, before the first application window opens, a
priority order and scoring system that qualified projects will be evaluated based on. In addition to
other criteria the council may deem necessary, the scoring system must include consideration of
a project’s:
 Overall qualified expenditures;
 Full-time equivalent jobs created;
 Length of employment and wages paid to Florida residents, in addition to pension, health,
and welfare benefits;
 Estimated direct and indirect tourism benefit;
 Production in an underutilized area;
 Status as a family-friendly production;
 Employment of a Florida resident as a writer, producer, or star;
 Use of a Florida film, television, or digital media school’s assistance;
 Leadership team’s track record;
 Employment of veterans who are residents of Florida; and
 Employment of graduates of Florida film schools.

Review
Within a reasonable period of time after an application window’s last day, the commissioner
must complete a review of the applications. The commissioner must then submit to the council a
package detailing each applicant’s:
 Eligibility for the rebate program;
 Expected qualified expenditures;
 Maximum rebate amount;
 Status as a family friendly project;16
 Percent of production proposed to occur in an underutilized area,17 if any; and
 Registration as a corporation in the state.

16
The bill defines “family friendly” as having cross-generational appeal; being appropriate in theme, content, and language
for a broad family audience; embodying a responsible resolution of issues; not containing any act of drunkenness, illicit drug
use, sex, nudity, gratuitous violence, or vulgar or profane language; and not portraying smoking any substance in a positive
light.
17
The bill defines “underutilized area” as any county within the state other than Broward, Miami-Dade, Orange, or Seminole
County.
BILL: SB 704 Page 6

The commissioner may contact each applicant with questions and gather any additional
information as necessary and must notify the council of the date and time the council must
convene to score each qualified project.18 The council may meet in person or by conference call.

Using its scoring system, the council will determine a score for each qualified project; the
highest scores must be applied to projects determined to provide the best economic impact and
return on investment to the state. The commissioner makes the final decision on certifying or
rejecting each qualified project.

Award of Rebates and Verification of Expenditures

After the council scores a project, the commissioner must make a determination on whether to
certify or reject each project and send a notice of the decision to each applicant. The
commissioner must include in a certified project’s notice the specific percentage of qualified
expenditures for which it is eligible and the maximum rebate it may receive.

The commissioner must also give the DEO a list of certified projects19 and each project’s
maximum allowance in order for the DEO to set aside enough money to fund the total maximum
rebates that may be awarded. However, when setting aside funds for applications submitted and
certified during the first application window, the DEO may not use more than 60 percent of the
funds appropriated to the program or rolled-over from any fiscal year. Any funds not set aside
for the first application window roll over for use in the next application window. If all funds are
set aside for certified projects, additional applications cannot be accepted until more funds
become available. Funds appropriated to the rebate program are not subject to reversion.

Rebate Allowances
Under the bill, qualified projects may receive a rebate of up to 20 percent of its verified qualified
expenditures. A project may receive an additional 3 percent rebate if 75 percent of the project’s
production takes place in an underutilized area or of its content is deemed family friendly. A
project may not receive more than one bonus, and rebates may not exceed $2 million.

The bill defines “qualified expenditures” to mean expenditures made in the state made solely for
preproduction, production, or postproduction of a qualified project, including:
 Rented or leased goods or services provided by a vendor that is registered with the
Department of State or the Department of Revenue, has a physical address in the state other
than a post office box, and employs one or more Florida residents on a full-time basis;
 Salaries and wages of up to $200,000 for Florida residents;
 Rented or leased cars, trucks, and trailers;
 Catered meals and on-set craft service supplies;
 Personal protective equipment from in-state vendors for use on set in order to mitigate the
transmission of viruses, including masks, gloves, test kits, and hand sanitizer; and
 Rented hotel rooms or other accommodations.

18
A film, television, or media project for which a complete application has been submitted to the commissioner and accepted
for consideration and scoring is considered a “qualified project”
19
A qualified project is considered to be a “certified project” after it has been scored, has been determined to meet or exceed
the desired criteria, and has rebate funds allocated to it based on its estimated qualified expenditures.
BILL: SB 704 Page 7

Qualified expenditures exclude expenditures made before a qualification for the program;
expenditures made via Internet transaction; expenditures for airfare; or any costs related to
development, marketing, or distribution.

Verification
The commissioner must develop a process to verify a certified project’s actual qualified
expenditures and rebate bonus eligibility after a certified project has completed its work in the
state. The process must require the submission by a project within 120 days after making its last
qualified expenditure, but no later than 1 year after its production start date, of:
 Data substantiating each qualified expenditure, as verified by an independent certified public
accountant (CPA) licensed by the state;
 Documents verifying the Florida residency of persons represented as such;
 The project’s final script;
 The project’s most recent production board and shooting schedule;
 The project’s most recent credit list, which shows where the required marketing logo will
appear;
 The project’s cast list and final crew list with contact information;
 Verification that at least one person employed by the project is a military veteran; and
 An affidavit or written declaration signed under the penalty of perjury that states that all
salaries, wages, and other compensation submitted as qualified expenditures are in
compliance with the program’s requirements.

The verification process must also require a compliance audit, conducted by an independent CPA
at the project’s expense, to substantiate a project’s qualified expenditures. The audit and a report
of the audit’s findings must be submitted to the commissioner within a reasonable period of time
after the commissioner’s initial receipt of records from the project.

The commissioner must report to the DEO the final verified amount of actual qualified
expenditures a project made and the amount of the rebate, including any bonus, owed to a
project. The DEO must then approve the final rebate amount and issue the rebate within a
reasonable period of time.

Disqualification
A certified project may be disqualified and may not receive a rebate if it:
 Does not begin principal photography within 30 days before or 90 days after the project’s
start date;
 Does not abide by the policies, procedures, deadlines, or requirements of the program’s
verification process;
 Changes the project’s start date without notifying the commissioner;
 Submits fraudulent information; or
 Uses the entertainment industry sales tax exemption established under s. 288.1258, F.S.

Applicants that submit fraudulent information are liable for reimbursement of the costs
associated with the review, processing, investigation, and prosecution of the fraudulent
submission, in addition to a penalty double the rebate amount and any criminal penalty assessed.
BILL: SB 704 Page 8

Other Provisions

The DEO is granted rulemaking authority to administer the rebate program.

The commissioner must provide an annual report on the program each November 1 identifying
the return on investment and economic benefits attributable to the program for the previous fiscal
year.

The Film, Television, and Digital Media Rebate Program expires on June 30, 2025, at which
point any funds appropriated to the program not earmarked and set aside for certified projects
will revert back to the General Revenue Fund. All other remaining funds must revert back to the
General Revenue Fund no later than October 31, 2026.

The bill takes effect upon becoming law.

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

None.

B. Public Records/Open Meetings Issues:

None.

C. Trust Funds Restrictions:

None.

D. State Tax or Fee Increases:

None.

E. Other Constitutional Issues:

None.

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

The Revenue Estimating Conference has not yet met regarding the bill.

B. Private Sector Impact:

Qualified film, television, or digital media projects that make qualified expenditures
under the rebate program may have their expenses offset by a rebate at the culmination of
the project. Because qualified expenditures are required, to a certain extent, to be made to
Florida vendors, businesses, and residents, these parties may see a positive financial
BILL: SB 704 Page 9

impact. However, this impact depends on the availability of funds appropriated to the
program.

C. Government Sector Impact:

None.

VI. Technical Deficiencies:

None.

VII. Related Issues:

None.

VIII. Statutes Affected:

This bill creates an undesignated section of the Florida Statutes.

IX. Additional Information:

A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)

None.

B. Amendments:

None.

This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.
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By Senator Gruters

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1 A bill to be entitled 30 relating to the certification or rejection of
2 An act relating to the entertainment industry; 31 qualified projects in a timely manner; requiring the
3 creating the Film, Television, and Digital Media 32 department to earmark and set aside funding necessary
4 Targeted Rebate Program within the Department of 33 to fund the total maximum that may be awarded to the
5 Economic Opportunity under the supervision of the 34 certified projects, if funds are available; requiring
6 Commissioner of Film and Entertainment; providing 35 the commissioner to develop a process to verify the
7 purposes for the program; defining terms; requiring 36 actual qualified expenditures and rebate bonus
8 that film, television, and digital media projects 37 eligibility of a certified project after the project’s
9 being produced in this state meet specified criteria 38 work in this state is complete; providing requirements
10 for rebate eligibility; authorizing applicants to 39 for the verification process; requiring that the
11 receive rebates up to a specified amount, including 40 rebate be issued within a reasonable period of time
12 bonuses; requiring an applicant that receives funding 41 upon approval of the final rebate amount by the
13 to make a good faith effort to use existing providers 42 department; requiring that certain marketing be
14 of infrastructure or equipment in this state and to 43 included with a project; requiring certified projects
15 employ residents of this state; requiring the 44 to allow certain persons to visit the production site
16 commissioner to set application windows for the 45 upon request of the commissioner and after providing
17 rebate; providing requirements for the department 46 the commissioner with reasonable notice; specifying
18 relating to earmarking and setting aside rebate funds; 47 that the commissioner or his or her affiliate is not
19 providing procedures and requirements for applicants 48 required to visit the production site; requiring the
20 applying for the rebate; requiring the commissioner to 49 department to disqualify a project under certain
21 take specified action within a reasonable period of 50 circumstances; providing for liability and imposing
22 time; requiring the Florida Film and Entertainment 51 civil and criminal penalties for an applicant that
23 Advisory Council to determine a score for each 52 submits fraudulent information; providing for
24 qualified project using specified criteria; requiring 53 rulemaking; requiring the commissioner to provide an
25 the commissioner to determine the priority order and 54 annual report to the Governor and the Legislature on a
26 scoring system of the specified criteria with 55 specified date; providing that certain appropriated
27 assistance from the council and certain other persons; 56 funds are not subject to reversion; providing for the
28 requiring the council to use certain criteria; 57 expiration of the program; providing an effective
29 requiring the commissioner to take certain actions 58 date.

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59 88 it based on the project’s estimated qualified expenditures.
60 Be It Enacted by the Legislature of the State of Florida: 89 (b) “Commissioner” means the Commissioner of Film and
61 90 Entertainment as described in s. 288.1251(1)(b), Florida
62 Section 1. Film, Television, and Digital Media Targeted 91 Statutes.
63 Rebate Program.— 92 (c) “Council” means the Florida Film and Entertainment
64 (1) CREATION AND PURPOSES OF PROGRAM.—The Film, Television, 93 Advisory Council.
65 and Digital Media Targeted Rebate Program is created within the 94 (d) “Department” means the Department of Economic
66 Department of Economic Opportunity under the supervision of the 95 Opportunity.
67 Commissioner of Film and Entertainment. 96 (e) “Digital media project” means a commercial video game,
68 (a) The purpose of the program is to boost this state’s 97 including an educational video game, which includes at least 30
69 economic prosperity by: 98 minutes of game play time. The term does not include a project
70 1. Creating high-paying jobs; 99 that may be considered obscene, as defined in s. 847.001,
71 2. Broadening the film, television, and digital media 100 Florida Statutes.
72 industry’s impact on the state by giving a modest bonus for 101 (f) “Family friendly” means having cross-generational
73 projects that take place in underutilized areas; 102 appeal; being appropriate in theme, content, and language for a
74 3. Enhancing tourism by choosing projects that encourage 103 broad family audience; embodying a responsible resolution of
75 tourists to visit this state; and 104 issues; not containing any act of drunkenness, illicit drug use,
76 4. Encouraging more family-friendly productions to be 105 sex, nudity, gratuitous violence, or vulgar or profane language;
77 produced in this state. 106 and not portraying smoking any substance in a positive light.
78 (b) This purpose shall be accomplished by providing a 107 (g) “Film project” means a theatrical, direct-to-video,
79 limited rebate to projects that provide the highest return on 108 television, cable, Internet, streaming service, or animated
80 investment and economic benefit to the state, as determined 109 narrative motion picture at least 75 minutes in length. The term
81 after a project has made its expenditures in the state. 110 does not include a project deemed by the office to have content
82 (2) DEFINITIONS.—As used in this act, unless the context 111 that is obscene, as defined in s. 847.001, Florida Statutes.
83 otherwise requires, the term: 112 (h) “Florida resident” means a person who has a valid
84 (a) “Certified project” means a qualified project that has 113 Florida driver license or Florida identification card issued
85 been scored by the council, has been determined by the 114 under s. 322.051, Florida Statutes, and has signed an affidavit
86 commissioner to meet or exceed the desired economic impact and 115 confirming residency.
87 other criteria of the program, and has rebate funds allocated to 116 (i) “Office” means the Office of Film and Entertainment

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117 within the department. 146 amounts paid per diem to a worker who is a Florida resident and
118 (j) “Principal photography” means, for a film project or 147 amounts paid through payroll service companies, and benefits
119 television project, the filming of major or significant 148 such as pension, health, and welfare payments for technical and
120 components of the project which involve lead actors, or, for a 149 production crews, directors, producers, and performers. For
121 digital media project, the period of time during which the work 150 purposes of this sub-subparagraph, payments do not include wages
122 of the majority of the crew is dedicated solely to the project. 151 for executives, legal staff, or other corporate staff who are
123 (k) “Production start date” means: 152 not employed to work solely on the project.
124 1. For film and television projects, the start date of 153 c. Rented or leased cars, trucks, and trailers if the
125 principal photography, as listed in the project’s application. 154 vehicles or trailers are registered with the Florida Department
126 2. For digital media projects, the start date of final 155 of Highway Safety and Motor Vehicles.
127 storyboards or a later date as specified in the project’s 156 d. Purchases of catered meals and on-set craft service
128 application. 157 supplies.
129 (l)1. “Qualified expenditures” means expenditures made in 158 e. Purchases of personal protective equipment from in-state
130 this state and paid to residents of this state or to businesses 159 vendors or suppliers for use on set, in the production office,
131 registered in this state and made solely for preproduction, 160 or with other activities directly related to production, such as
132 production, or postproduction of the qualified project, 161 providing off-set truck drivers with personal protective
133 including the following: 162 equipment, in order to mitigate the transmission of viruses.
134 a. Rented or leased goods or services provided by a vendor 163 Such purchases are limited to items for personal use only, such
135 or supplier in this state which is registered with the 164 as masks, gloves, test kits, and hand sanitizer.
136 Department of State or the Department of Revenue; which has a 165 f. Rented hotel rooms or other accommodations for cast or
137 physical address in this state other than a post office box; and 166 crew.
138 which employs one or more Florida residents on a full-time 167 2. The term does not include expenditures not expressly
139 basis. The term does not include rebilled goods or services 168 identified in subparagraph 1., expenditures made before
140 provided by an in-state company from out-of-state vendors or 169 qualification for the program, expenditures made via Internet
141 suppliers. When services provided by the vendor or supplier 170 transactions, expenditures for airfare, or any costs associated
142 include personal services or labor, only personal services or 171 with development, marketing, or distribution.
143 labor provided by Florida residents qualifies. 172 3. For the purposes of a digital media project, the term
144 b. Payments to Florida residents in the form of salary or 173 includes only those qualified expenditures made within 9 months
145 wages up to a maximum of $200,000 per resident, including 174 after the project’s first qualified expenditure.

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175 (m) “Qualified project” means a film project, television 204 (a) To be eligible for a rebate, an applicant must be
176 project, or digital media project that meets the application 205 registered to do business in this state and must be producing a
177 requirements and for which a complete application for the 206 project that:
178 program has been submitted to the commissioner and accepted for 207 1. Has projected qualified expenditures of:
179 consideration by the office. The term does not include a weather 208 a. For a film project, at least $1.5 million;
180 or market program; a sporting event or a sporting event 209 b. For a television project, at least $500,000 per episode;
181 broadcast; a gala; an awards show; a production that solicits 210 or
182 funds; a home shopping program; a political program; a gambling- 211 c. For a digital media project, at least $1.5 million;
183 related project or production; a concert production; a news or 212 2. Is projected to employ a crew, including cast and stand-
184 current events show; a sports or sports recap show; a 213 ins, but not including extras, also known as background
185 pornographic production; or any production deemed obscene under 214 performers, of which at least 60 percent will be residents of
186 chapter 847, Florida Statutes. 215 this state and at least one member will be a military veteran;
187 (n) “Television project” means a television pilot program 216 3. Is projected to spend at least 70 percent of its total
188 or a television series that: 217 production days in this state; and
189 1. Is a scripted drama, comedy, animation, or reality show; 218 4. Will not receive a sales tax certificate of exemption
190 2. Has a runtime to fit, at minimum, a 30-minute program 219 pursuant to s. 288.1258, Florida Statutes, for the project.
191 slot, but no longer than required to fit a 60-minute program 220 (b) A project may receive a rebate in the amount of up to
192 slot; and 221 20 percent of its verified qualified expenditures. A bonus may
193 3. If the television project is a television series, has a 222 be earned in the amount of an additional 3 percentage points if
194 minimum of 7 episodes; or, if the television project is a 223 75 percent of the project’s production in this state will take
195 reality program or series, at least 10 episodes. 224 place in an underutilized area or if its content is deemed
196 225 family friendly. A certified project may not receive more than
197 The term does not include a project deemed by the office to have 226 one bonus, and the total that may be awarded under any rebate
198 content that is obscene, as defined in s. 847.001, Florida 227 may not exceed 23 percent of its verified qualified expenditures
199 Statutes. 228 or $2 million, whichever is less.
200 (o) “Underutilized area” means any county in this state 229 (c) A certified project must make a good faith effort to
201 other than Broward County, Miami-Dade County, Orange County, or 230 use existing providers of infrastructure or equipment in this
202 Seminole County. 231 state, when available, including providers of camera gear, grip
203 (3) REBATE ELIGIBILITY.— 232 and lighting equipment, vehicles, and postproduction services,

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233 and to employ cast and crew who are residents of this state. 262 the same fiscal year, only one project per applicant may be
234 (4) APPLICATION WINDOWS.—Applications must be accepted for 263 certified within a fiscal year.
235 the program during two application windows each fiscal year. The 264 (c) The application must include:
236 commissioner shall set a start date for both application 265 1. Proof of funding;
237 windows. However, the first application window may begin before 266 2. Project-related employment information, including
238 the start of the fiscal year and must end no later than 5 267 employment numbers for residents of this state;
239 business days after July 1, and the second application window 268 3. A full line-item budget and a detailed qualified
240 must end no later than 5 business days after December 1. 269 expenditures budget;
241 (a) The department may not earmark or set aside more than 270 4. A detailed distribution plan to assist with determining
242 60 percent of any appropriated or rolled-over rebate funds for 271 the potential economic impact of the project in this state;
243 any given fiscal year for applications submitted during the 272 5. The applicant’s expected total qualified expenditures
244 first application window. Rebate funds not earmarked and set 273 for wages paid to residents of this state;
245 aside for applicants applying during one application window roll 274 6. The applicant’s expected total qualified expenditures
246 over for use in the next application window. 275 and nonqualified expenditures in this state;
247 (b) If all rebate funds are earmarked and set aside for 276 7. For a film project, the latest script, a production
248 certified projects, additional applications may not be accepted 277 schedule, a Day Out of Days report, and a list of the expected
249 until more funds become available for the program. 278 shooting locations;
250 (5) APPLICATION PROCESS.— 279 8. For a digital media project, a detailed game design
251 (a) A company that plans to produce a film, television, or 280 document, including a production schedule;
252 digital project in this state may submit an application to the 281 9. For a television project that is a pilot, a final
253 commissioner during one of the two application windows. Each 282 script, a production schedule, a Day Out of Days report, and a
254 fiscal year, a project must have a production start date that is 283 list of the expected shooting locations;
255 within 6 months after July 1 if applying in the first window or 284 10. For a television project that is a series, the latest
256 within 6 months after January 1 if applying in the second 285 scripts for at least two episodes and a production schedule, a
257 window. 286 Day Out of Days report, and a list of the expected shooting
258 (b) An applicant or its parent company may submit an 287 locations for the first episode;
259 application for no more than five projects in any single fiscal 288 11. An affirmation signed by the applicant that the
260 year. However, except in the case of a television pilot and the 289 information on the application is correct;
261 television series the pilot is based on being certified within 290 12. The applicant’s Florida tax identification number.

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291 (d) Within a reasonable period of time after the last 320 specified in paragraph (b) must be determined by the
292 business day of each application window, the commissioner shall: 321 commissioner, with assistance from the council and other
293 1. Review all applications submitted during the application 322 persons, as determined by the commissioner, before the first
294 window and determine the eligibility of each applicant; 323 application window.
295 2. Determine each applicant’s expected qualified 324 (b) The council shall use, at a minimum, the following
296 expenditures; 325 criteria in determining a qualified project’s score:
297 3. Determine the maximum rebate amount that each eligible 326 1. The amount of the project’s overall qualified
298 applicant may be awarded; 327 expenditures.
299 4. Determine whether an eligible applicant’s project is 328 2. The amount of the project’s Florida-resident wages.
300 deemed family friendly; 329 3. The number of full-time-equivalent jobs created by the
301 5. Determine the percentage of the applicant’s production, 330 project.
302 if any, which is proposed to occur in an underutilized area; 331 4. Whether the project provides pension, health, and
303 6. Determine whether each eligible applicant is a 332 welfare benefits to its workforce in this state.
304 corporation registered in this state; 333 5. The estimated direct and indirect tourism benefit of the
305 7. Contact each applicant with any questions, as necessary; 334 project, based on the submitted distribution plan.
306 8. Gather any additional information needed to address the 335 6. The duration of Florida-resident employment for the
307 criteria specified under subsection (6); 336 project.
308 9. Assemble a package containing the details of each 337 7. What percentage of the project, if any, is being made in
309 eligible applicant’s project and deliver it to each council 338 an underutilized area.
310 member; and 339 8. Whether the project is family friendly.
311 10. Give notice to the council of the date and time when 340 9. Whether the project has a Florida-resident writer,
312 the council must convene to assess each qualified project. The 341 producer, or star.
313 council may meet in person or by conference call. 342 10. Whether a Florida film, television, or digital media
314 (e) The council shall determine a score for each qualified 343 school will assist with the production of the project.
315 project using the criteria specified under subsection (6), with 344 11. Whether the project leadership team has a successful
316 the highest scores going to projects determined to provide the 345 track record.
317 best economic impact and return on investment to this state. 346 12. The number of Florida-resident veterans the project
318 (6) CRITERIA FOR DETERMINING PROJECT SCORES.— 347 will hire.
319 (a) The priority order and scoring system of the criteria 348 13. The number of Florida film school graduates the project

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349 will hire as cast or crew. 378 a. Data substantiating each qualified expenditure which has
350 (7) NOTIFICATION OF DECISION.— 379 been audited by an independent certified public accountant
351 (a) After the council determines a project’s score, the 380 licensed in this state, as required under subparagraph 4.;
352 commissioner shall, in a timely manner: 381 b. Copies of documents verifying residency of persons
353 1. Make a final determination on certifying or rejecting 382 represented as being residents of this state;
354 each qualified project, giving consideration to the council’s 383 c. The final script;
355 scoring. 384 d. The most recent production board and shooting schedule;
356 2. Provide a list of certified projects to the department 385 e. The most recent credit list showing where the credits
357 which includes the associated maximum rebate amounts that the 386 required under subsection (9) will appear;
358 respective applicants may receive. 387 f. A cast list and a final crew list with contact
359 3. Notify each certified project of the specified 388 information;
360 percentage of qualified expenditures for which it is eligible 389 g. For any veterans employed by the project, a copy of at
361 and the maximum rebate amount that it may receive. 390 least one of the veterans’ DD Form 214, as issued by the United
362 4. Provide a notice of rejection to each rejected 391 States Department of Defense, or another acceptable form of
363 applicant; however, the failure to notify an applicant of its 392 identification as specified by the Department of Veterans’
364 rejection does not deem the applicant’s project a certified 393 Affairs; and
365 project. 394 h. Any other information determined necessary by the
366 (b) Based on the final determination of the commissioner, 395 commissioner.
367 the department shall earmark and set aside the amount necessary 396 2. Signing, and submission to the commissioner, by the lead
368 to fund the total maximum that may be awarded for the certified 397 producer or studio executive in charge of the certified project,
369 projects, if funds are available. 398 of an affidavit or written declaration signed under the penalty
370 (8) VERIFICATION PROCESS.— 399 of perjury as specified in s. 92.525, Florida Statutes, stating
371 (a) The commissioner shall develop a process to verify the 400 that all salaries, wages, and other compensation submitted as
372 actual qualified expenditures and rebate bonus eligibility of a 401 qualified expenditures are in compliance with this section.
373 certified project after the project’s work in this state is 402 3. The information and affidavit required by subparagraphs
374 complete. The process must require all of the following: 403 1. and 2. must be received by the commissioner within 120 days
375 1. Submission to the commissioner of at least all of the 404 after the certified project has made its last qualified
376 following information, electronically or in hard copy, or both, 405 expenditure, but no later than 1 year after its production start
377 by each certified project: 406 date. Pursuant to the rules adopted by the department, the

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407 commissioner may, upon a showing of good cause, grant a one-time 436 approved by the commissioner and the logo of the local film
408 extension of this deadline. 437 office, if applicable. A digital media project must also supply
409 4. The conducting of a compliance audit, at the certified 438 a 5-second or longer animated logo with “Produced in Florida” or
410 project’s expense, by an independent certified public accountant 439 other text, including the logo of the local digital media
411 who is a resident of this state to substantiate the qualified 440 office, if applicable, as preapproved by the commissioner, in a
412 expenditures, and submission of a report of the audit findings, 441 manner easily seen by a consumer of the digital media project.
413 including substantiating data, to the commissioner within a 442 The commissioner shall provide the logos for the purposes
414 reasonable period of time after the initial receipt of records 443 specified in this paragraph, not including the logo for a local
415 from the certified project. 444 office, which must be provided by the applicable office.
416 (b) The commissioner shall review the report and data 445 (b) A certified project must allow the commissioner, or an
417 required under paragraph (a) within a reasonable period of time 446 affiliate, and a minimum of two guests to visit the production
418 after receipt of the report and data and shall report to the 447 site upon the request of the commissioner. Upon such request,
419 department the final verified amount of actual qualified 448 the certified project must give the commissioner reasonable
420 expenditures the certified project made and the amount of the 449 notice of a visit date and time that is acceptable to the
421 rebate, including any bonus, due the project. 450 production. The commissioner or an affiliate is not required to
422 (c) Upon approval by the department of the final rebate 451 make a visit to the set.
423 amount, which may not exceed the maximum specified in the notice 452 (c) A certified project must provide at least five
424 provided under subparagraph (7)(a)3., the rebate must be issued 453 preapproved photos of the production to the commissioner and
425 within a reasonable period of time. 454 grant the commissioner free use of the photos in promoting this
426 (9) MARKETING AND TOURISM REQUIREMENT.— 455 state as a film, television, or digital media production
427 (a) The commissioner shall ensure, as a condition of 456 location or tourist destination.
428 receiving a rebate under this section, that a certified project 457 (10) DISQUALIFICATION.—The department shall disqualify a
429 includes marketing promoting this state as a tourist destination 458 certified project and may not issue a rebate to the project if
430 or film and entertainment production destination. At a minimum, 459 the project:
431 the marketing must include placement in the end credits of a 460 (a) Does not begin principal photography in this state
432 “Filmed in Florida” or “Produced in Florida” logo with size and 461 within the period beginning 30 days before and ending 90 days
433 placement commensurate to other logos included in the end 462 after the project’s listed production start date. Pursuant to
434 credits or, if no logos are used, the statement “Filmed in 463 department rule, the commissioner may, upon a showing of good
435 Florida” or “Produced in Florida” or a similar statement 464 cause, grant a one-time extension of this deadline;

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465 (b) Does not abide by the policies, procedures, deadlines, 494 (14) FUNDS NOT SUBJECT TO REVERSION.—Notwithstanding s.
466 or requirements of the application verification process; 495 216.301, Florida Statutes, funds appropriated for this purpose
467 (c) Does not notify the commissioner of any change in the 496 shall not be subject to reversion.
468 production start date before commencing production; 497 (15) EXPIRATION.—The Film, Television, and Digital Media
469 (d) Submits fraudulent information; or 498 Targeted Rebate Program expires June 30, 2025, at which point
470 (e) Uses the state sales tax exemption established under s. 499 all remaining appropriated funds not earmarked and set aside for
471 288.1258, Florida Statutes. 500 certified projects must revert to the General Revenue Fund. All
472 (11) FRAUD.—An applicant that submits fraudulent 501 remaining appropriated funds must revert to the General Revenue
473 information under this section is liable for reimbursement of 502 Fund no later than October 31, 2026.
474 the reasonable costs and fees associated with the review, 503 Section 2. This act shall take effect upon becoming a law.
475 processing, investigation, and prosecution of the fraudulent
476 submission. An applicant that obtains a rebate under this
477 section through a claim that is fraudulent shall reimburse the
478 program for the rebate awarded and reasonable costs and fees
479 associated with the review, processing, investigation, and
480 prosecution of the fraudulent claim and shall pay a civil
481 penalty in an amount equal to double the rebate amount and any
482 criminal penalty assessed against the applicant.
483 (12) RULES; POLICIES; PROCEDURES.—The department may adopt
484 rules and shall develop policies and procedures to administer
485 this section, including, but not limited to, rules specifying
486 requirements for the application and approval process and the
487 determination of qualified expenditures.
488 (13) ANNUAL REPORT.—Each November 1, the commissioner shall
489 provide an annual report on the program for the previous fiscal
490 year to the Governor, the President of the Senate, and the
491 Speaker of the House of Representatives. The report must
492 identify the return on investment associated with, and economic
493 benefits to this state attributable to, the program.

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The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)

Prepared By: The Professional Staff of the Committee on Commerce and Tourism

BILL: SB 734
INTRODUCER: Senator Gruters
SUBJECT: Sales Tax Holiday for Disaster Preparedness Supplies
DATE: February 12, 2021 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Reeve McKay CM Pre-meeting
2. FT
3. AP

I. Summary:

SB 734 establishes a 17-day “disaster preparedness” sales tax holiday, from Friday, May 28, to
Sunday, June 13, 2021, for certain disaster preparedness supplies.

The bill appropriates $70,072 in nonrecurring funds from the General Revenue Fund to the
Department of Revenue in Fiscal Year 2020-2021.

The Revenue Estimating Conference has not yet estimated the revenue impact of the bill.

The bill takes effect upon becoming law.

II. Present Situation:

Florida Sales Tax

1
Section 212.05(1)(a)1.a, F.S.
2
Section 212.04(b), F.S.
3
Section 212.03(1)(a), F.S.
4
See s. 212.07(2), F.S.
5
Office of Economic and Demographic Research, Florida Tax Handbook, 16 (2020), available at
http://edr.state.fl.us/Content/revenues/reports/tax-handbook/taxhandbook2020.pdf (last visited Feb. 12, 2021).
BILL: SB 734 Page 2

“Disaster Preparedness” Sales Tax Holidays
Florida has enacted a “disaster preparedness” sales tax holiday eight times since 2005, exempting
specified items in preparation for the Atlantic hurricane season that officially begins June 1 of
each year. The types and values of exempted items have varied, and length of the exemption
periods has varied from 3 to 18 days.8

The Florida Division of Emergency Management recommends having a disaster supply kit with
items such as a battery operated radio, flashlight, batteries, and first-aid kit to last for a minimum
of 7 days.9

III. Effect of Proposed Changes:

The bill establishes a 17-day period, from Friday, May 28, to Sunday, June 13, 2021, during
which the following items are exempt from the state sales tax and local discretionary sales
surtaxes:
 Portable self-powered light sources selling for $20 or less;
 Portable self-powered radios, two-way radios, or weather-band radios selling for $50 or less;
 Tarpaulins or other flexible waterproof sheeting selling for $50 or less;
 Any items normally sold as, or generally advertised as, ground anchor systems or tie-down
kits selling for $50 or less;
 Gas or diesel fuel tanks selling for $25 or less;
 Packages of AA-cell, AAA-cell, C-cell, D-cell, 6-volt, or 9-volt batteries, excluding
automobile and boat batteries, selling for $30 or less;
 Nonelectric food storage coolers selling for $30 or less;
 Portable generators used to provide light or communications or to preserve food selling for
$750 or less;
 Reusable ice selling for $10 or less;
 Impact-resistant windows, when sold in units of 20 or fewer; and
 Impact-resistant doors and impact-resistant garage doors, when sold in units of 10 or fewer.

The exemptions for impact-resistant windows, doors, and garage doors apply to purchases made
by an owner of residential real property where the impact-resistant windows, doors, or garage

6
Section 212.054(2)(a), F.S.
7
Supra note 5, at 231-232.
8
Id. at 163.
9
Florida Division of Emergency Management, Plan & Prepare: Disaster Supply Kit Checklist, available at
https://www.floridadisaster.org/planprepare/hurricane-supply-checklist/ (last visited Feb. 12, 2021).
BILL: SB 734 Page 3

doors will be installed. The bill defines “impact-resistant” to mean that the window, door, or
garage door complies with the standards for protection of openings and for windborne debris
protection in the Florida Building Code, 7th Edition (2020) Residential, or in the Florida Building
Code, 7th Edition (2020) Building. The purchaser must furnish to the selling dealer an affidavit
stating that the impact-resistant items are to be used on residential property owned by the
purchaser. The affidavit must include the name of the owner and the address of the residential
property where the items will be installed. If a person furnishes a false affidavit in order to evade
payment of the sales tax, the purchaser is subject to repayment of the tax plus a mandatory
penalty of 200 percent of the tax in addition to a fine and punishment as provided by law for a
conviction of a felony of the third degree.10

The bill appropriates $70,072 in nonrecurring funds in Fiscal Year 2020-2021 from the General
Revenue Fund to the Department of Revenue (DOR) for the purpose of implementing the sales
tax holiday. Funds remaining unexpended as of June 30, 2021, shall revert and be re-
appropriated for the same purpose in the 2021-2022 fiscal year.

The DOR may adopt emergency rules pursuant to s. 120.54(4), F.S., for the purpose of
implementing the bill.

The bill takes effect upon becoming law.

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

10
S. 212.085, F.S.
BILL: SB 734 Page 4

mandates requirements do not apply to laws having an insignificant impact,11, 12 which is
$2.1 million or less for Fiscal Year 2020-2021.13

B. Public Records/Open Meetings Issues:

None.

C. Trust Funds Restrictions:

None.

D. State Tax or Fee Increases:

None.

E. Other Constitutional Issues:

None.

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

The Revenue Estimating Conference has not yet met regarding the bill.

B. Private Sector Impact:

Persons purchasing items from stores participating in the sales tax holiday will realize
savings.

C. Government Sector Impact:

The bill appropriates $70,072 in nonrecurring funds from the General Revenue Fund to
the Department of Revenue in Fiscal Year 2020-2021 to administer the sales tax holiday.

VI. Technical Deficiencies:

None.

VII. Related Issues:

None.

11
FLA. CONST. art. VII, s. 18(d).
12
An insignificant fiscal impact is the amount not greater than the average statewide population for the applicable fiscal year
multiplied by $0.10. See Florida Senate Committee on Community Affairs, Interim Report 2012-115: Insignificant Impact,
(September 2011), available at http://www.flsenate.gov/PublishedContent/Session/2012/InterimReports/2012-115ca.pdf (last
visited Feb. 12, 2021).
13
Based on the Demographic Estimating Conference’s population adopted on November 13, 2020. The conference packet is
available at http://edr.state.fl.us/Content/conferences/population/ConferenceResults.pdf (last visited Feb. 12, 2021).
BILL: SB 734 Page 5

VIII. Statutes Affected:

The bill creates two undesignated sections of chapter law.

IX. Additional Information:

A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)

None.

B. Amendments:

None.

This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.
Florida Senate - 2021 COMMITTEE AMENDMENT
Bill No. SB 734

Ì906656EÎ906656

LEGISLATIVE ACTION
Senate . House
.
.
.
.
.

The Committee on Commerce and Tourism (Gruters) recommended the
following:

1 Senate Amendment (with title amendment)
2
3 Delete everything after the enacting clause
4 and insert:
5 Section 1. Present subsection (2) of section 201.25,
6 Florida Statutes, is redesignated as subsection (3), and a new
7 subsection (2) is added to that section, to read:
8 201.25 Tax exemptions for certain loans.—There shall be
9 exempt from all taxes imposed by this chapter:
10 (2) Any federal loan made in response to a state of

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Florida Senate - 2021 COMMITTEE AMENDMENT
Bill No. SB 734

Ì906656EÎ906656

11 emergency declared by executive order or proclamation of the
12 Governor under s. 252.36.
13 Section 2. Disaster preparedness supplies; sales tax
14 holiday.—
15 (1) The tax levied under chapter 212, Florida Statutes, may
16 not be collected during the period from 12:01 a.m. on May 28,
17 2021, through 11:59 p.m. on June 13, 2021, on the sale of:
18 (a) A portable self-powered light source selling for $20 or
19 less.
20 (b) A portable self-powered radio, two-way radio, or
21 weather-band radio selling for $50 or less.
22 (c) A tarpaulin or other flexible waterproof sheeting
23 selling for $50 or less.
24 (d) An item normally sold as, or generally advertised as, a
25 ground anchor system or tie-down kit selling for $50 or less.
26 (e) A gas or diesel fuel tank selling for $25 or less.
27 (f) A package of AA-cell, AAA-cell, C-cell, D-cell, 6-volt,
28 or 9-volt batteries, excluding automobile and boat batteries,
29 selling for $30 or less.
30 (g) A nonelectric food storage cooler selling for $30 or
31 less.
32 (h) A portable generator used to provide light or
33 communications or preserve food in the event of a power outage
34 selling for $750 or less.
35 (i) Reusable ice selling for $10 or less.
36 (j) Impact-resistant windows, when sold in units of 20 or
37 fewer.
38 (k) Impact-resistant doors and impact-resistant garage
39 doors, when sold in units of 10 or fewer.

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Florida Senate - 2021 COMMITTEE AMENDMENT
Bill No. SB 734

Ì906656EÎ906656

40
41 The exemptions under paragraphs (j) and (k) apply to purchases
42 made by an owner of residential real property where the impact-
43 resistant windows, impact-resistant doors, or impact-resistant
44 garage doors will be installed. For the purposes of this
45 section, the term “impact-resistant” means that the window,
46 door, or garage door complies with the standards for protection
47 of openings and for windborne debris protection in the Florida
48 Building Code, 7th Edition (2020) Residential, or in the Florida
49 Building Code, 7th Edition (2020) Building. The purchaser must
50 furnish to the selling dealer an affidavit stating that the
51 impact-resistant windows, impact-resistant doors, or impact-
52 resistant garage doors to be exempted are for the exclusive use
53 designated herein and must include the name of the owner making
54 the purchase and the address of the residential real property
55 where the items will be installed. Any person furnishing a false
56 affidavit to such effect for the purpose of evading payment of
57 any tax imposed under chapter 212, Florida Statutes, is subject
58 to the penalties set forth in s. 212.085, Florida Statutes, and
59 as otherwise provided by law.
60 (2) The tax exemptions provided in this section do not
61 apply to sales within a theme park or entertainment complex as
62 defined in s. 509.013(9), Florida Statutes, within a public
63 lodging establishment as defined in s. 509.013(4), Florida
64 Statutes, or within an airport as defined in s. 330.27(2),
65 Florida Statutes.
66 (3) The Department of Revenue may, and all conditions are
67 deemed met to, adopt emergency rules pursuant to s. 120.54(4),
68 Florida Statutes, for the purpose of implementing this section.

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Florida Senate - 2021 COMMITTEE AMENDMENT
Bill No. SB 734

Ì906656EÎ906656

69 Notwithstanding any other law, emergency rules adopted pursuant
70 to this subsection are effective for 6 months after adoption and
71 may be renewed during the pendency of procedures to adopt
72 permanent rules addressing the subject of the emergency rule.
73 (4) For the 2020-2021 fiscal year, the sum of $70,072 in
74 nonrecurring funds is appropriated from the General Revenue Fund
75 to the Department of Revenue for the purpose of implementing
76 this section. Funds remaining unexpended or unencumbered from
77 this appropriation as of June 30, 2021, shall revert and be
78 reappropriated for the same purpose in the 2021-2022 fiscal
79 year.
80 (5) This section shall take effect upon becoming a law.
81 Section 3. Except as otherwise expressly provided in this
82 act, and except for this section, which shall take effect upon
83 this act becoming a law, this act shall take effect July 1,
84 2021.
85 ================= T I T L E A M E N D M E N T ================
86 And the title is amended as follows:
87 Delete everything before the enacting clause
88 and insert:
89 A bill to be entitled
90 An act relating to tax exemptions; amending s. 201.25,
91 F.S.; exempting federal loans made in response to a
92 state of emergency from the excise tax imposed on
93 documents; providing exemptions from the sales and use
94 tax for specified disaster preparedness supplies
95 during a specified timeframe; providing applicability
96 for certain exemptions; defining the term “impact-
97 resistant”; requiring purchasers of certain items to

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Florida Senate - 2021 COMMITTEE AMENDMENT
Bill No. SB 734

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98 furnish a specified affidavit and information to the
99 selling dealer; providing a criminal penalty for
100 furnishing a false affidavit with certain intent;
101 specifying locations where the exemptions do not
102 apply; authorizing the Department of Revenue to adopt
103 emergency rules; providing an appropriation; providing
104 effective dates.

Page 5 of 5
2/12/2021 10:26:02 AM 577-02044-21
Florida Senate - 2021 SB 734 Florida Senate - 2021 SB 734

By Senator Gruters

23-00711A-21 2021734__ 23-00711A-21 2021734__
1 A bill to be entitled 30 ground anchor system or tie-down kit selling for $50 or less.
2 An act relating to a sales tax holiday for disaster 31 (e) A gas or diesel fuel tank selling for $25 or less.
3 preparedness supplies; providing exemptions from the 32 (f) A package of AA-cell, AAA-cell, C-cell, D-cell, 6-volt,
4 sales and use tax for specified disaster preparedness 33 or 9-volt batteries, excluding automobile and boat batteries,
5 supplies during a specified timeframe; providing 34 selling for $30 or less.
6 applicability for certain exemptions; defining the 35 (g) A nonelectric food storage cooler selling for $30 or
7 term “impact-resistant”; requiring purchasers of 36 less.
8 certain items to furnish a specified affidavit and 37 (h) A portable generator used to provide light or
9 information to the selling dealer; providing a 38 communications or preserve food in the event of a power outage
10 criminal penalty for furnishing a false affidavit with 39 selling for $750 or less.
11 certain intent; specifying locations where the 40 (i) Reusable ice selling for $10 or less.
12 exemptions do not apply; authorizing the Department of 41 (j) Impact-resistant windows, when sold in units of 20 or
13 Revenue to adopt emergency rules; providing an 42 fewer.
14 appropriation; providing an effective date. 43 (k) Impact-resistant doors and impact-resistant garage
15 44 doors, when sold in units of 10 or fewer.
16 Be It Enacted by the Legislature of the State of Florida: 45
17 46 The exemptions under paragraphs (j) and (k) apply to purchases
18 Section 1. Disaster preparedness supplies; sales tax 47 made by an owner of residential real property where the impact-
19 holiday.— 48 resistant windows, impact-resistant doors, or impact-resistant
20 (1) The tax levied under chapter 212, Florida Statutes, may 49 garage doors will be installed. For the purposes of this
21 not be collected during the period from 12:01 a.m. on May 28, 50 section, the term “impact-resistant” means that the window,
22 2021, through 11:59 p.m. on June 13, 2021, on the sale of: 51 door, or garage door complies with the standards for protection
23 (a) A portable self-powered light source selling for $20 or 52 of openings and for windborne debris protection in the Florida
24 less. 53 Building Code, 7th Edition (2020) Residential, or in the Florida
25 (b) A portable self-powered radio, two-way radio, or 54 Building Code, 7th Edition (2020) Building. The purchaser must
26 weather-band radio selling for $50 or less. 55 furnish to the selling dealer an affidavit stating that the
27 (c) A tarpaulin or other flexible waterproof sheeting 56 impact-resistant windows, impact-resistant doors, or impact-
28 selling for $50 or less. 57 resistant garage doors to be exempted are for the exclusive use
29 (d) An item normally sold as, or generally advertised as, a 58 designated herein and must include the name of the owner making

Page 1 of 3 Page 2 of 3
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2021 SB 734

23-00711A-21 2021734__
59 the purchase and the address of the residential real property
60 where the items will be installed. Any person furnishing a false
61 affidavit to such effect for the purpose of evading payment of
62 any tax imposed under chapter 212, Florida Statutes, is subject
63 to the penalties set forth in s. 212.085, Florida Statutes, and
64 as otherwise provided by law.
65 (2) The tax exemptions provided in this section do not
66 apply to sales within a theme park or entertainment complex as
67 defined in s. 509.013(9), Florida Statutes, within a public
68 lodging establishment as defined in s. 509.013(4), Florida
69 Statutes, or within an airport as defined in s. 330.27(2),
70 Florida Statutes.
71 (3) The Department of Revenue may, and all conditions are
72 deemed met to, adopt emergency rules pursuant to s. 120.54(4),
73 Florida Statutes, for the purpose of implementing this section.
74 Notwithstanding any other law, emergency rules adopted pursuant
75 to this subsection are effective for 6 months after adoption and
76 may be renewed during the pendency of procedures to adopt
77 permanent rules addressing the subject of the emergency rule.
78 Section 2. For the 2020-2021 fiscal year, the sum of
79 $70,072 in nonrecurring funds is appropriated from the General
80 Revenue Fund to the Department of Revenue for the purpose of
81 implementing this act. Funds remaining unexpended or
82 unencumbered from this appropriation as of June 30, 2021, shall
83 revert and be reappropriated for the same purpose in the 2021-
84 2022 fiscal year.
85 Section 3. This act shall take effect upon becoming a law.

Page 3 of 3
CODING: Words stricken are deletions; words underlined are additions.
The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)

Prepared By: The Professional Staff of the Committee on Commerce and Tourism

BILL: SB 778
INTRODUCER: Senator Hooper
SUBJECT: Florida Tourism Marketing
DATE: February 12, 2021 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Reeve McKay CM Pre-meeting
2. ATD
3. AP

I. Summary:

SB 778 permits VISIT FLORIDA to carry forward any unexpended state appropriations into
succeeding fiscal years.

The bill also removes the scheduled repeal date of October 1, 2023, for both VISIT FLORIDA
and the Division of Tourism Marketing within Enterprise Florida, Inc.

The bill takes effect upon becoming law.

II. Present Situation:

Enterprise Florida, Inc., and VISIT FLORIDA

Enterprise Florida, Inc., (EFI) is a non-profit corporation created to act as the state’s economic
development organization, using expertise from both the private and public sectors. EFI is not a
unit of state government.1

EFI is statutorily required to maintain at least five divisions related to the following areas:
 International trade and business development;
 Business retention and recruitment;
 Tourism marketing;
 Minority business development; and
 Sports industry development.2

1
Sections 288.901(1) and (2), F.S.
2
Section 288.92, F.S.
BILL: SB 778 Page 2

EFI’s Division of Tourism Marketing is the mechanism created in statute through which EFI
interacts and contracts with its direct support organization, VISIT FLORIDA. VISIT FLORIDA
is the fictitious name for the Florida Tourism Industry Marketing Corporation, a non-profit
corporation that serves as Florida’s statewide destination marketing organization and represents
the state’s tourism industry.3 In practice, VISIT FLORIDA is EFI’s tourism marketing division.
The division is staffed by VISIT FLORIDA, but that staff is not employed by EFI. 4 VISIT
FLORIDA’s primary responsibilities include:
 Administering domestic and international advertising campaigns;
 Conducting research on tourism and travel trends;
 Coordinating domestic and international marketing activities; and
 Managing the state’s four welcome centers.5

VISIT FLORIDA is required to develop a four-year marketing plan for the state that addresses
issues such as continuation of tourism growth in Florida, expansion to new or underrepresented
markets, coordination with local and private sector partners on tourism advertising, and
addressing emergency responses to disasters from a marketing standpoint.6

EFI, in conjunction with the Department of Economic Opportunity (DEO), appoints VISIT
FLORIDA’s 31-member board of directors. The board provides guidance, input, and insight into
the evolution and development of VISIT FLORIDA programs, processes, and messages; acts as
a steering council for various committees; and works directly with VISIT FLORIDA executive
staff to guide strategy.7 VISIT FLORIDA’s board of directors is composed of 16 regional
members, with at least two representing each of the six statutorily designated geographic areas of
the state, and 15 additional tourism industry related members, including:
 One from the statewide rental car industry;
 Seven from tourist-related statewide associations;
 Three from county destination marketing organizations;
 One from the cruise industry;
 One from an automobile and travel services membership organization;
 One from the airline industry; and
 One from the space tourism industry.8

Both VISIT FLORIDA and EFI’s division of tourism marketing will sunset on October 1, 2023,
unless reviewed and saved from repeal by the Legislature.9

3
Section 288.1226, F.S. The fictitious name is registered with the Department of State, registration no. G18000088414.
4
Section 288.923(5), F.S.
5
Office of Program Policy Analysis and Government Accountability, Florida Economic Development Program Evaluations
– Year 8, 13 (December 2020), available at https://oppaga.fl.gov/Documents/Reports/20-08.pdf (last visited Feb. 12, 2021).
Pursuant to s. 288.12265, F.S., VISIT FLORIDA contracts with the Department of Transportation through EFI to employ
staff and operate the welcome centers. See also VISIT FLORIDA, Florida Welcome Centers, available at
https://www.visitflorida.com/en-us/visitor-services/florida-welcome-centers.html (last visited Feb. 12, 2021).
6
Section 288.923(4)(c), F.S.
7
Supra note 5, at 12.
8
Section 288.1226(4), F.S.
9
Sections 288.1226(14) and 288.923(6), F.S. SB 362 (Reg. Sess. 2020) extended the repeal date of both VISIT FLORIDA
and EFI’s Division of Tourism Marketing from July 1, 2020 to October 1, 2023. See ss. 1-2, ch. 2020-16, Laws of Fla.
BILL: SB 778 Page 3

Appropriations
For the 2020-2021 fiscal year, VISIT FLORIDA received an appropriation of $50 million.10
Payments are made to VISIT FLORIDA through EFI from the DEO. VISIT FLORIDA enters
into a funding agreement with EFI and the DEO and an operating agreement with EFI.11

Generally, any funds appropriated to agencies that have not been disbursed and not identified as
incurred obligations by June 30 of each year revert back to the fund from which it was
appropriated;12 funds for incurred obligations carry over to the next fiscal year and revert back if
left undisbursed by September 30.13 VISIT FLORIDA reverted a total of $5,535.17 to the
Tourism Promotional Trust Fund in Fiscal Years 2015-2016 through 2019-2020.14

Section 288.9015(2)(e), F.S., permits EFI to carry forward any unexpended state appropriations
into succeeding fiscal years.

Economic Development Programs Evaluations

Pursuant to s. 288.0001(2)(b), F.S., the Office of Program Policy Analysis and Government
Accountability (OPPAGA) and the Office of Economic and Demographic Research (EDR) must
provide a detailed analysis of certain economic development programs according to a recurring
schedule established in law. VISIT FLORIDA’s most recent evaluation was completed in
January 2021 and covered Fiscal Years 2016-2017, 2017-2018, and 2018-2019.

OPPAGA Review
OPPAGA is required to evaluate programs for effectiveness and value to the state taxpayers and
to provide recommendations for consideration by the Legislature. The review determined that
Florida is outpacing several other states in tourism growth and has a significant competitive
advantage compared to other states with strong tourism industries, such as California, Nevada,
New York, and Texas.15

As a public-private partnership, VISIT FLORIDA is required to obtain private sector
contributions to match public contributions. Eligible matching contributions come from four
categories:
 Direct cash contributions;
 Fees for services;

10
Specific Appropriation 2294, s. 6, ch. 2020-111, L.O.F.
11
See Funding Agreement SB20-003 – Agreement between the Department of Economic Opportunity, Enterprise Florida,
Inc., and the Florida Tourism Industry Marketing Corporation, executed September 13, 2019, available at
https://facts.fldfs.com/Search/ContractDetail.aspx?AgencyId=400000&ContractId=S0118&Tab=1 (last visited Feb. 12,
2021).
12
Section 216.301(1)(a), F.S.
13
Section 216.301(1)(b), F.S. Section 216.011(1)(tt), F.S., defines an “incurred obligation” as a legal obligation for goods or
services that have been contracted for or received or incurred by the state and referred to as a payable in the state’s financial
system.
14
Transparency Florida, Department of Economic Opportunity Division of Strategic Business Development Reversion
History, available at http://www.transparencyflorida.gov/Reports/ReversionHistoryReport.aspx?FY=&RT=RV (last visited
Feb. 12, 2021).
15
Supra note 5, at 11.
BILL: SB 778 Page 4

 Cooperative advertising, which is limited to partner expenditures for paid media placement
and actual market value of contributed products, air time, and print space; and
 In-kind contributions, which is limited to the actual market value of promotional
contributions of partner-supplied benefits or of nonpartner-supplied airtime or print space.16

VISIT FLORIDA has continually met the statutorily required one-to-one match of public and
private funding. Over the review period, 83 percent of private sector contributions were in the
form of industry-contributed promotional value.17 On average, VISIT FLORIDA spends
59 percent of its annual budget on media and industry cooperative advertising efforts; most of
the remaining expenditures are comprised of fees and services and salaries and benefits.18
Certain contracts are subject to several reporting and transparency requirements.19

VISIT FLORIDA’s paying partners, which include members of the hospitality, entertainment,
and outdoor recreation industries, have expressed overall support for the agency’s mission and
services.

EDR Review
The EDR is required to analyze the economic benefits of the programs included in the
OPPAGA’s program evaluation. Economic benefit is defined as the direct, indirect, and induced
gains in state revenues as a percentage of the state’s investment, including state grants, tax
exemptions, tax refunds, tax credits, and other state incentives.20 The EDR uses the terms
economic benefit and return on investment (ROI) synonymously; these terms do not address the
overall effectiveness or benefit of a program and instead focus on tangible financial gains or
losses to state revenues.21

In its most recent review period, VISIT FLORIDA generated a positive ROI of 3.27. For every
dollar spent on VISIT FLORIDA’s marketing efforts, the state received $3.27 back in tax
revenue. From the state’s investment of $228 million over the review period, VISIT FLORIDA
contributed approximately $15.85 billion to Florida’s GDP and $744.64 million in state revenue.
VISIT FLORIDA’s positive ROI benefited from both the aggregate amount of spending and the
types of purchases made by tourists, the majority of which are subject to state sales and use tax.22

Though it is difficult to determine VISIT FLORIDA’s precise influence on the state’s tourism
industry compared to that of other marketing efforts due to the many determinants of tourism
demand, the EDR used the agency’s Direct Influencer Study to approximate that, over the review

16
Section 288.1226(6), F.S.
17
Supra note 5, at 14.
18
Id. at 15.
19
Chapter 2017-233, s. 17, Laws of Fla., created reporting and transparency requirements for contracts valued at $500,000 or
more as well as new provisions for private sector contributions. See s. 288.1226(6) and (13), F.S.
20
Section 288.005(1), F.S.
21
Office of Economic and Demographic Research, Return on Investment for VISIT FLORIDA, 1 (January 2021), available at
http://edr.state.fl.us/Content/returnoninvestment/Tourism2021.pdf (last visited Feb. 12, 2021). ROI is calculated by summing
state revenues generated by a program less state expenditures invested in the program, and dividing that amount by the state’s
investment. EDR uses the Statewide Model, a model that simulates Florida’s economy and captures the indirect and induced
economic activity resulting from direct program effects, to calculate these numbers.
22
Id. at 30.
BILL: SB 778 Page 5

period, the agency was responsible for approximately 9.1 percent of all marketing-influenced
tourists. This amounts to an estimated 17.57 million domestic out-of-state tourists and 2.35
million international tourists attributable to VISIT FLORIDA’s marketing efforts.23

III. Effect of Proposed Changes:

The bill amends s. 288.1226, F.S., to permit VISIT FLORIDA to carry forward any unexpended
state appropriations into succeeding fiscal years.

The bill also removes the scheduled repeal date for both VISIT FLORIDA and the Division of
Tourism Marketing within Enterprise Florida, Inc. Without the bill, the statutory authorizations
for these entities will expire on October 1, 2023.

The bill takes effect upon becoming law.

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

None.

B. Public Records/Open Meetings Issues:

None.

C. Trust Funds Restrictions:

None.

D. State Tax or Fee Increases:

None.

E. Other Constitutional Issues:

None.

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

None.

B. Private Sector Impact:

None.

23
Id. at 24. This label is used to distinguished tourists from those who visited Florida due to other influences, such as visiting
family and friends or participating in a specific hobby or pastime.
BILL: SB 778 Page 6

C. Government Sector Impact:

Unexpended appropriations carried forward by VISIT FLORIDA will not be available for
reappropriation by the Legislature.

VI. Technical Deficiencies:

None.

VII. Related Issues:

None.

VIII. Statutes Affected:

This bill substantially amends the following sections of the Florida Statutes: 288.1226 and
288.923.

IX. Additional Information:

A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)

None.

B. Amendments:

None.

This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.
Florida Senate - 2021 SB 778 Florida Senate - 2021 SB 778

By Senator Hooper

16-00901A-21 2021778__ 16-00901A-21 2021778__
1 A bill to be entitled 30 reviewed and saved from repeal by the Legislature.
2 An act relating to Florida tourism marketing; amending 31 Section 3. This act shall take effect upon becoming a law.
3 s. 288.1226, F.S.; authorizing the Florida Tourism
4 Industry Marketing Corporation to carry forward
5 unexpended state appropriations into succeeding fiscal
6 years; removing the scheduled repeal of the
7 corporation; amending s. 288.923, F.S.; removing the
8 scheduled repeal of the Division of Tourism Marketing
9 within Enterprise Florida, Inc.; providing an
10 effective date.
11
12 Be It Enacted by the Legislature of the State of Florida:
13
14 Section 1. Subsection (14) of section 288.1226, Florida
15 Statutes, is amended, and paragraph (q) is added to subsection
16 (5) of that section, to read:
17 288.1226 Florida Tourism Industry Marketing Corporation;
18 use of property; board of directors; duties; audit.—
19 (5) POWERS AND DUTIES.—The corporation, in the performance
20 of its duties:
21 (q) May carry forward any unexpended state appropriations
22 into succeeding fiscal years.
23 (14) REPEAL.—This section is repealed October 1, 2023,
24 unless reviewed and saved from repeal by the Legislature.
25 Section 2. Subsection (6) of section 288.923, Florida
26 Statutes, is amended to read:
27 288.923 Division of Tourism Marketing; definitions;
28 responsibilities.—
29 (6) This section is repealed October 1, 2023, unless

Page 1 of 2 Page 2 of 2
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)

Prepared By: The Professional Staff of the Committee on Commerce and Tourism

BILL: SPB 7020
INTRODUCER: For consideration by the Commerce and Tourism Committee
SUBJECT: OGSR/County Tourism Promotion Agencies/Florida Tourism Industry Marketing
Corporation
DATE: February 12, 2021 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Reeve McKay Pre-meeting

I. Summary:

SPB 7020 saves from repeal the public records exemption relating to trade secrets held by a
county tourism promotion agency. The bill also saves from repeal the public records exemption
for the identity of any person who responds to a marketing or advertising research project
conducted by the Florida Tourism Industry Marketing Corporation, doing business as VISIT
FLORIDA, or trade secrets obtained pursuant to such activities.

Unless saved from repeal by the Legislature, both exemptions are scheduled to sunset on October
2, 2021.

The bill takes effect October 1, 2021.

II. Present Situation:

Access to Public Records - Generally

The Florida Constitution provides that the public has the right to inspect or copy records made or
received in connection with official governmental business.1 The right to inspect or copy applies
to the official business of any public body, officer, or employee of the state, including all three
branches of state government, local governmental entities, and any person acting on behalf of the
government.2

Additional requirements and exemptions related to public records are found in various statutes
and rules, depending on the branch of government involved. For instance, section 11.0431,
Florida Statutes (F.S.), provides public access requirements for legislative records. Relevant
exemptions are codified in s. 11.0431(2)-(3), F.S., and the statutory provisions are adopted in the

1
FLA. CONST. art. I, s. 24(a).
2
Id.
BILL: SPB 7020 Page 2

rules of each house of the legislature.3 Florida Rule of Judicial Administration 2.420 governs
public access to judicial branch records.4 Lastly, chapter 119, F.S., provides requirements for
public records held by executive agencies.

Executive Agency Records – The Public Records Act

Chapter 119, F.S., known as the Public Records Act, provides that all state, county and
municipal records are open for personal inspection and copying by any person, and that
providing access to public records is a duty of each agency.5

A public record includes virtually any document or recording, regardless of its physical form or
how it may be transmitted.6 The Florida Supreme Court has interpreted the statutory definition of
“public record” to include “material prepared in connection with official agency business which
is intended to perpetuate, communicate, or formalize knowledge of some type.7

The Florida Statutes specify conditions under which public access to public records must be
provided. The Public Records Act guarantees every person’s right to inspect and copy any public
record at any reasonable time, under reasonable conditions, and under supervision by the
custodian of the public record.8 A violation of the Public Records Act may result in civil or
criminal liability.9

The Legislature may exempt public records from public access requirements by passing a
general law by a two-thirds vote of both the House and the Senate.10 The exemption must state
with specificity the public necessity justifying the exemption and must be no broader than
necessary to accomplish the stated purpose of the exemption.11

3
See Rule 1.48, Rules and Manual of the Florida Senate, (2018-2020) and Rule 14.1, Rules of the Florida House of
Representatives, Edition 2, (2018-2020)
4
State v. Wooten, 260 So. 3d 1060 (Fla. 4th DCA 2018).
5
Section 119.01(1), F.S. Section 119.011(2), F.S., defines “agency” as “any state, county, district, authority, or municipal
officer, department, division, board, bureau, commission, or other separate unit of government created or established by law
including, for the purposes of this chapter, the Commission on Ethics, the Public Service Commission, and the Office of
Public Counsel, and any other public or private agency, person, partnership, corporation, or business entity acting on behalf
of any public agency.”
6
Section 119.011(12), F.S., defines “public record” to mean “all documents, papers, letters, maps, books, tapes, photographs,
films, sound recordings, data processing software, or other material, regardless of the physical form, characteristics, or means
of transmission, made or received pursuant to law or ordinance or in connection with the transaction of official business by
any agency.”
7
Shevin v. Byron, Harless, Schaffer, Reid and Assoc., Inc., 379 So. 2d 633, 640 (Fla. 1980).
8
Section 119.07(1)(a), F.S.
9
Section 119.10, F.S. Public records laws are found throughout the Florida Statutes, as are the penalties for violating those
laws.
10
FLA. CONST. art. I, s. 24(c).
11
Id. See, e.g., Halifax Hosp. Medical Center v. News-Journal Corp., 724 So. 2d 567 (Fla. 1999) (holding that a public
meetings exemption was unconstitutional because the statement of public necessity did not define important terms and did
not justify the breadth of the exemption); Baker County Press, Inc. v. Baker County Medical Services, Inc., 870 So. 2d 189
(Fla. 1st DCA 2004) (holding that a statutory provision written to bring another party within an existing public records
exemption is unconstitutional without a public necessity statement).
BILL: SPB 7020 Page 3

General exemptions from the public records requirements are contained in the Public Records
Act.12 Specific exemptions often are placed in the substantive statutes relating to a particular
agency or program.13

When creating a public records exemption, the Legislature may provide that a record is “exempt”
or “confidential and exempt.” Custodians of records designated as “exempt” are not prohibited
from disclosing the record; rather, the exemption means that the custodian cannot be compelled
to disclose the record.14 Custodians of records designated as “confidential and exempt” may not
disclose the record except under circumstances specifically defined by the Legislature.15

Open Government Sunset Review Act

The Open Government Sunset Review Act16 (the Act) prescribes a legislative review process for
newly created or substantially amended17 public records or open meetings exemptions, with
specified exceptions.18 It requires the automatic repeal of such exemption on October 2nd of the
fifth year after creation or substantial amendment, unless the Legislature reenacts the
exemption.19

The Act provides that a public records or open meetings exemption may be created or
maintained only if it serves an identifiable public purpose and is no broader than is necessary.20
An exemption serves an identifiable purpose if it meets one of the following purposes and the
Legislature finds that the purpose of the exemption outweighs open government policy and
cannot be accomplished without the exemption:
 It allows the state or its political subdivisions to effectively and efficiently administer a
governmental program, and administration would be significantly impaired without the
exemption;21
 It protects sensitive, personal information, the release of which would be defamatory, cause
unwarranted damage to the good name or reputation of the individual, or would jeopardize
the individual’s safety. If this public purpose is cited as the basis of an exemption, however,
only personal identifying information is exempt;22 or
 It protects information of a confidential nature concerning entities, such as trade or business
secrets.23

12
See, e.g., s. 119.071(1)(a), F.S. (exempting from public disclosure examination questions and answer sheets of
examinations administered by a governmental agency for the purpose of licensure).
13
See, e.g., s. 213.053(2)(a), F.S. (exempting from public disclosure information contained in tax returns received by the
Department of Revenue).
14
See Williams v. City of Minneola, 575 So. 2d 683, 687 (Fla. 5th DCA 1991).
15
WFTV, Inc. v. The School Board of Seminole, 874 So. 2d 48 (Fla. 5th DCA 2004).
16
Section 119.15, F.S.
17
An exemption is considered to be substantially amended if it is expanded to include more records or information or to
include meetings as well as records. Section 119.15(4)(b), F.S.
18
Section 119.15(2)(a) and (b), F.S., provide that exemptions that are required by federal law or are applicable solely to the
Legislature or the State Court System are not subject to the Open Government Sunset Review Act.
19
Section 119.15(3), F.S.
20
Section 119.15(6)(b), F.S.
21
Section 119.15(6)(b)1., F.S.
22
Section 119.15(6)(b)2., F.S.
23
Section 119.15(6)(b)3., F.S.
BILL: SPB 7020 Page 4

The Act also requires specified questions to be considered during the review process.24 In
examining an exemption, the Act directs the Legislature to carefully question the purpose and
necessity of reenacting the exemption.

If the exemption is continued and expanded, then a public necessity statement and a two-thirds
vote for passage are required.25 If the exemption is continued without substantive changes or if
the exemption is continued and narrowed, then a public necessity statement and a two-thirds vote
for passage are not required. If the Legislature allows an exemption to sunset, the previously
exempt records will remain exempt unless provided for by law.26

Trade Secrets

Section 812.081, F.S., defines a “trade secret” as information used in the operation of a business
which provides the business an advantage or an opportunity to obtain an advantage over those
who do not know it. The term includes scientific, technical, commercial, and financial
information. 27 Irrespective of the field to which the trade secret pertains, a trade secret is
considered to be secret; of value; for use or in use by the business; and of advantage to the
business, or providing an opportunity to obtain an advantage, over those who do not know it or
use it.28

Florida law contains a variety of provisions that make trade secret information exempt or
confidential and exempt from public records requirements. Some exemptions only protect trade
secrets, while others protect “proprietary business information” and define that term to
specifically include trade secrets.

Public Records Exemption for Trade Secrets Held by a County Tourism Promotion Agency

Section 125.0104(9)(d)3., F.S., provides a public records exemption for trade secrets, as defined
in s. 812.081, F.S., held by a county tourism promotion agency. In 2016, the Legislature
expanded the definition of a trade secret in s. 812.081, F.S., to include financial information.29
Thus, all public records exemptions for trade secrets were considered to have been substantially
amended and subject to the Open Government Sunset Review Act. The public records exemption

24
Section 119.15(6)(a), F.S. The specified questions are:
 What specific records or meetings are affected by the exemption?
 Whom does the exemption uniquely affect, as opposed to the general public?
 What is the identifiable public purpose or goal of the exemption?
 Can the information contained in the records or discussed in the meeting be readily obtained by alternative means?
If so, how?
 Is the record or meeting protected by another exemption?
 Are there multiple exemptions for the same type of record or meeting that it would be appropriate to merge?
25
See generally s. 119.15, F.S.
26
Section 119.15(7), F.S.
27
Section 812.081(1)(c), F.S.
28
Id.
29
Chapter 2016-6, s. 21, Laws of Fla., provides a public necessity statement with a rationale for expanding the public records
exemption for trade secrets. The statement recognized that businesses are often required to provide financial information to
public entities for regulatory or other purposes and that the disclosure of such information to competitors would be
detrimental to businesses.
BILL: SPB 7020 Page 5

for trade secrets in s. 125.0104(9)(d)3., F.S., is scheduled to be repealed on October 2, 2021,
unless it is reviewed and saved from repeal by the Legislature.

Open Government Sunset Review of s. 125.0104, F.S.
In September 2020, the Senate Committee on Commerce and Tourism and the House Oversight,
Transparency, and Public Management Subcommittee sent an Open Government Sunset Review
questionnaire to the county tourism promotion agencies operating within the state regarding the
scheduled repeal of the public records exemption and the need to maintain said exemption.
Agencies were asked about the types of records held, how records that contain trade secrets are
reviewed, public records requests, and various other questions related to how agencies work with
public records that contain trade secrets. The surveyed agencies reported holding public records
containing trade secrets that include contracts, financial and budget information, consumer trend
data, marketing initiatives and research, visitor center and convention center data, business leads,
industry partner contacts, consumer databases, administrative records, funding requests,
purchased data, and paid research. Agencies cited the need to remain competitive and effectively
market their counties as the general purposes of using trade secret information. Of the agencies
that responded to the questionnaire, 13 reported receiving a public records request for a records
containing trade secrets within the last 4 years. The questionnaire also asked agencies whether
they recommend that the Legislature repeal or reenact the public record exemption, the majority
of which recommended reenacting the exemption as it is written.

Public Records Exemption for VISIT FLORIDA

Section 288.1226(9), F.S., provides a public records exemption for the identity of any person
who responds to a marketing or advertising research project conducted by VISIT FLORIDA, or
trade secrets as defined by s. 812.081, F.S., obtained through such activities. In 2016, the
Legislature expanded the definition of a trade secret in s. 812.081, F.S., to include financial
information.30 Thus, all public records exemptions for trade secrets were considered to have been
substantially amended and subject to the Open Government Sunset Review Act. The public
records exemption for information and trade secrets in s. 288.1226(9), F.S., is scheduled to be
repealed on October 2, 2021, unless it is reviewed and saved from repeal by the Legislature.

Open Government Sunset Review of s. 288.1226, F.S.
In August 2020, the Senate Committee on Commerce and Tourism and the House Oversight,
Transparency, and Public Management Subcommittee held a meeting with a representative from
VISIT FLORIDA to discuss marketing projects or advertising research projects and how records
associated with those projects are handled, the types of records that include trade secret
information, and how VISIT FLORIDA addresses public record requests for such records.

Representatives from VISIT FLORIDA stated that they rely on the ability to protect trade secrets
gathered from marketing projects in order to remain competitive. Specifically, VISIT FLORIDA
tends to apply the exemption to data gathered from marketing projects and research that will be
used to further develop other marketing strategies. Because VISIT FLORIDA is subject to
several reporting and transparency requirements necessitating making contracts and other

30
Id.
BILL: SPB 7020 Page 6

documents available to the public, VISIT FLORIDA relies on the exemption found in s.
288.1226(9), F.S., to protect information found in the publicly available contracts and
documents, such as the timing and distribution locations of marketing activities before the
activities take place and financial information relating to the marketing activities, from use by
competing destinations.

VISIT FLORIDA recommended the Legislature reenact the exemption as written in order to
remain at a competitive advantage.

III. Effect of Proposed Changes:

SPB 7020 amends s. 125.0104, F.S., to remove the scheduled repeal of the public records
exemption for trade secrets held by a county tourism promotion agency. The bill also amends s.
288.1226, F.S., to remove the scheduled repeal of the public records exemption for the identity
of any person who responds to a marketing or advertising research project conducted by the
Florida Tourism Industry Marketing Corporation, doing business as VISIT FLORIDA, or trade
secrets obtained through such activities.

Under the bill trade secrets held by a county tourism promotion agency, as well as information
and trade secrets obtained by VISIT FLORIDA, will continue to be exempt from public
disclosure beyond October 2, 2021.

The bill takes effect October 1, 2021.

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

None.

B. Public Records/Open Meetings Issues:

Vote Requirement
Article I, s. 24(c) of the State Constitution requires a two-thirds vote of the members
present and voting for final passage of a bill creating or expanding an exemption to the
public records requirements. The bill continues current public records exemptions beyond
their scheduled repeal dates. Thus, the bill does not require an extraordinary vote for
enactment.

Public Necessity Statement
Article I, s. 24(c) of the State Constitution requires a bill creating or expanding an
exemption to the public records requirements to state with specificity the public necessity
justifying the exemption. This bill continues current public records exemptions without
substantial amendment. Thus, a statement of public necessity is not required.
BILL: SPB 7020 Page 7

Breadth of Exemption
Article I, s. 24(c) of the State Constitution requires an exemption to the public records
requirements to be no broader than necessary to accomplish the stated purpose of the law.
The purpose of the law is to protect the identity of any person who responds to a
marketing or advertising research project conducted by VISIT FLORIDA, or trade secrets
as defined by s. 812.081, F.S., obtained through such activities, and to protect trade
secrets, as defined in s. 812.081, F.S., held by a county tourism promotion agency. This
bill continues the public records exemption for information and trade secrets held by
VISIT FLORIDA and for trade secrets held by a county tourism promotion agency. The
exemption does not appear to be broader than necessary to accomplish the purpose of the
law.

C. Trust Funds Restrictions:

None.

D. State Tax or Fee Increases:

None.

E. Other Constitutional Issues:

None.

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

None.

B. Private Sector Impact:

None.

C. Government Sector Impact:

None.

VI. Technical Deficiencies:

None.

VII. Related Issues:

None.
BILL: SPB 7020 Page 8

VIII. Statutes Affected:

This bill substantially amends the following sections of the Florida Statutes: 125.0104 and
288.1226.

IX. Additional Information:

A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)

None.

B. Amendments:

None.

This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.
Florida Senate - 2021 (PROPOSED BILL) SPB 7020 Florida Senate - 2021 (PROPOSED BILL) SPB 7020

FOR CONSIDERATION By the Committee on Commerce and Tourism

577-00918A-21 20217020pb 577-00918A-21 20217020pb
1 A bill to be entitled 30 which, if released, would reveal the identity of persons or
2 An act relating to a review under the Open Government 31 entities who provide data or other information as a response to
3 Sunset Review Act; amending s. 125.0104, F.S., which 32 a sales promotion effort, an advertisement, or a research
4 provides an exemption from public records requirements 33 project or whose names, addresses, meeting or convention plan
5 for trade secrets held by county tourism promotion 34 information or accommodations or other visitation needs become
6 agencies; removing the scheduled repeal of the 35 booking or reservation list data, is exempt from s. 119.07(1)
7 exemption; amending s. 288.1226, F.S., which provides 36 and s. 24(a), Art. I of the State Constitution.
8 an exemption from public records requirements for the 37 2. The following information, when held by a county tourism
9 identity of a person who responds to a marketing or 38 promotion agency, is exempt from s. 119.07(1) and s. 24(a), Art.
10 advertising research project conducted by the Florida 39 I of the State Constitution:
11 Tourism Industry Marketing Corporation and for certain 40 a. Booking business records, as defined in s. 255.047.
12 trade secrets; removing the scheduled repeal of the 41 b. Trade secrets and commercial or financial information
13 exemption; providing an effective date. 42 gathered from a person and privileged or confidential, as
14 43 defined and interpreted under 5 U.S.C. s. 552(b)(4), or any
15 Be It Enacted by the Legislature of the State of Florida: 44 amendments thereto.
16 45 3. A trade secret, as defined in s. 812.081, held by a
17 Section 1. Paragraph (d) of subsection (9) of section 46 county tourism promotion agency is exempt from s. 119.07(1) and
18 125.0104, Florida Statutes, is amended to read: 47 s. 24(a), Art. I of the State Constitution. This subparagraph is
19 125.0104 Tourist development tax; procedure for levying; 48 subject to the Open Government Sunset Review Act in accordance
20 authorized uses; referendum; enforcement.— 49 with s. 119.15 and shall stand repealed on October 2, 2021,
21 (9) COUNTY TOURISM PROMOTION AGENCIES.—In addition to any 50 unless reviewed and saved from repeal through reenactment by the
22 other powers and duties provided for agencies created for the 51 Legislature.
23 purpose of tourism promotion by a county levying the tourist 52 Section 2. Subsection (9) of section 288.1226, Florida
24 development tax, such agencies are authorized and empowered to: 53 Statutes, is amended to read:
25 (d) Undertake marketing research and advertising research 54 288.1226 Florida Tourism Industry Marketing Corporation;
26 studies and provide reservations services and convention and 55 use of property; board of directors; duties; audit.—
27 meetings booking services consistent with the authorized uses of 56 (9) PUBLIC RECORDS EXEMPTION.—The identity of any person
28 revenue as set forth in subsection (5). 57 who responds to a marketing project or advertising research
29 1. Information given to a county tourism promotion agency 58 project conducted by the corporation in the performance of its

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Florida Senate - 2021 (PROPOSED BILL) SPB 7020

577-00918A-21 20217020pb
59 duties on behalf of Enterprise Florida, Inc., or trade secrets
60 as defined by s. 812.081 obtained pursuant to such activities,
61 are exempt from s. 119.07(1) and s. 24(a), Art. I of the State
62 Constitution. This subsection is subject to the Open Government
63 Sunset Review Act in accordance with s. 119.15 and shall stand
64 repealed on October 2, 2021, unless reviewed and saved from
65 repeal through reenactment by the Legislature.
66 Section 3. This act shall take effect October 1, 2021.

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