The Florida Senate, Committee Meeting Expanded Agenda: Commerce and Tourism, April 12, 2011

Summary

This is the expanded agenda of The Florida Senate Committee on Commerce and Tourism for its meeting on Tuesday, April 12, 2011, with Senator Detert as Chair and Senator Dockery as Vice Chair. The agenda lists bills including SB 150 on career and education planning and SB 1884 on consumer protection. A bill analysis of SB 150, introduced by Senator Smith, says the career exploration course taken by middle grades students and required for promotion must be aligned to the National Career Clusters, and the bill deletes the requirement that the Department of Education develop course frameworks. The bill is effective July 1, 2011. A bill analysis of SB 1884 says a post-transaction third-party seller may not charge a consumer unless it provides a simple mechanism to stop recurring charges.

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

“The Florida Senate, Committee Meeting Expanded Agenda: Commerce and Tourism, April 12, 2011.” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/senate-cm-expanded-agenda-7508-674b559bfa/, SHA-256 c26a6961d04bb6ba091268e17c42c33aa379324f0fc1835de9e8aa997ffd9058.

Full text

2011 Regular Session The Florida Senate
COMMITTEE MEETING EXPANDED AGENDA
COMMERCE AND TOURISM
Senator Detert, Chair
Senator Dockery, Vice Chair

MEETING DATE: Tuesday, April 12, 2011
TIME: 9:15 a.m.—12:15 p.m.
PLACE: James E. "Jim" King, Jr., Committee Room, 401 Senate Office Building

MEMBERS: Senator Detert, Chair; Senator Dockery, Vice Chair; Senators Flores, Gaetz, Lynn, Montford, and
Ring

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

1 SB 150 Career and Education Planning; Revises the general
Smith requirements for middle grades promotion to require
(Identical H 67, Compare H 1249) that a course in career and education planning
explore the National Career Clusters.

ED 02/21/2011 Favorable
CM 04/12/2011
BC

2 CS/SB 560 Sale of Advertising; Cites this act as the "John
Transportation / Wise Anthony Wilson Bicycle Safety Act." Provides for the
Department of Environmental Protection to enter into
concession agreements for naming rights of state
greenway and trail facilities or property or commercial
advertising to be displayed on state greenway and
trail facilities or property. Provides for distribution of
proceeds from such concession agreements.

TR 03/09/2011 Temporarily Postponed
TR 03/22/2011 Not Considered
TR 03/29/2011 Fav/CS
CM 04/12/2011
EP
BC

3 SB 622 Secondhand Dealers and Secondary Metals
Hays Recyclers; Defines "appropriate law enforcement
(Similar H 343) official." Clarifies a provision requiring that the
secondhand dealers transaction form be delivered to
the appropriate law enforcement official. Requires
that a secondary metals recycler complete a
transaction form and transmit it to the appropriate law
enforcement official within 24 hours after the
acquisition of regulated metals. Authorizes such
recyclers to use an electronic database and transmit
transaction forms electronically, etc.

CM 04/12/2011
CJ
BC

S-036 (10/2008)
04082011.1152 Page 1 of 4
COMMITTEE MEETING EXPANDED AGENDA
Commerce and Tourism
Tuesday, April 12, 2011, 9:15 a.m.—12:15 p.m.

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

4 SB 790 Tax Credits; Revises the priority of tax credits that
Altman may be taken against the corporate income tax or the
(Similar CS/H 143) franchise tax. Authorizes aerospace-sector jobs tax
credits and tuition reimbursement tax credits.
Authorizes a tax credit to aerospace businesses
based on the salary or tuition reimbursed to certain
employees. Specifies the maximum annual amount of
tax credits for an aerospace business. Provides fines
and criminal penalties for certain unlawful claims of
tax credits, etc.

CM 04/12/2011
BC

5 SB 854 Production and Shipment of Wine; Authorizes the
Negron direct shipment of wine into and within this state for
(Identical H 837) personal consumption only. Requires licensure of
winery shippers by the Division of Alcoholic
Beverages and Tobacco. Provides license
requirements. Requires recipients of a direct
shipment of wine to be at least 21 years of age.
Requires proof of age of a recipient. Provides for the
payment of taxes, a monthly report, and
recordkeeping by winery shippers, etc.

RI 03/29/2011 Favorable
CM 04/12/2011
BC

6 CS/SB 920 Possession of Stolen Credit or Debit Cards; Prohibits
Criminal Justice / Ring possession of a stolen credit or debit card in specified
(Compare CS/H 339) circumstances. Provides penalties. Provides that a
retailer or retail employee who possesses, receives,
or returns a stolen credit or debit card without
knowledge that the card is stolen or in order to
investigate the card's theft or unlawful use does not
commit a violation of the act.

CJ 03/22/2011 Fav/CS
CM 04/12/2011
AG

7 SB 1080 Exemptions/Tax on Sales, Use, & Other
Altman Transactions; Exempts certain items used to
(Identical H 675) manufacture, produce, or modify gas turbine engine
parts from the tax on sales, use, and other
transactions.

CM 04/12/2011
BC

S-036 (10/2008)
04082011.1152 Page 2 of 4
COMMITTEE MEETING EXPANDED AGENDA
Commerce and Tourism
Tuesday, April 12, 2011, 9:15 a.m.—12:15 p.m.

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

8 CS/SB 1284 Biodiesel; Defines the term "renewable feedstocks."
Agriculture / Bennett Exempts certain biodiesel manufacturers from
bonding requirements. Exempts certain biodiesel
manufacturers from specific taxes on diesel fuel.
Redefines the term "pollutants" to exclude certain
biodiesel. Provides legislative findings regarding the
sale of diesel containing biodiesel. Establishes
standards for the amount of biodiesel that must be
contained in diesel fuel. Requires dealers and
wholesalers to provide certified fuel analyses upon
the department's request, etc.

AG 03/21/2011 Fav/CS
CM 04/12/2011
BC

9 SB 1384 Transfer of Tax Liabilities; Requires that a circuit court
Altman having jurisdiction over a taxpayer who fails to file a
(Compare CS/CS/H 907, S 2044) final tax return and to make tax payment for a
business provide at least 20 days' written notice
before issuing a temporary injunction enjoining further
business activity. Specifies additional conditions for a
transferee of a business, assets of the business, or
stock of goods to establish that the business has no
tax liability arising from the transfer, etc.

CM 04/12/2011
JU
BC

10 SB 1424 Telemarketing; Deletes restrictions on the business-
Benacquisto to-business sales exemption of the Florida
(Identical H 4015) Telemarketing Act.

CM 04/12/2011
BC

11 SB 1542 Corporate Income Tax Credits; Establishes the
Siplin Florida Public School Tax Credit Program. Provides
(Identical H 475) for credits against the corporate income tax for
contributions to public schools for certain purposes.
Authorizes public schools to determine how to use
undesignated contributions. Requires the Department
of Revenue to apportion a dollar amount of tax credits
to each school board receiving eligible contributions.
Specifies certain taxpayers as ineligible to receive the
corporate tax credit, etc.

CM 04/12/2011
ED
BC

S-036 (10/2008)
04082011.1152 Page 3 of 4
COMMITTEE MEETING EXPANDED AGENDA
Commerce and Tourism
Tuesday, April 12, 2011, 9:15 a.m.—12:15 p.m.

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

12 SB 1610 State Minimum Wage; Provides for calculating the
Detert Florida minimum wage when the state minimum wage
(Compare CS/H 1425) and the federal minimum wage for the prior year is
lower than the adjusted real wage, etc.

CM 04/12/2011
GO
BC

13 SB 1772 Self-service Storage Facilities; Redefines the term
Hays "last known address, to conform to changes made by
(Similar H 459) the act. Revises notice requirements related to
enforcing an owner’s lien. Allows postal notice by
first-class mail, along with a certificate of mailing.
Allows electronic mail notice. Deletes provisions
relating to advertisement requirements. Clarifies
provisions relating to the right to create contractual
liens or limitations on liability.

CM 04/12/2011
CA
JU

14 SB 1884 Consumer Protection; Prohibits a post-transaction
Gaetz third-party seller from charging a consumer for a good
(Similar CS/CS/H 1303) or service sold over the Internet unless certain
disclosures are made and the seller receives the
informed consent of the consumer. Requires a post-
transaction third-party seller to provide a simple
mechanism for a consumer to cancel a purchase of a
good or service and stop any recurring charges.
Prohibits an initial merchant from disclosing certain
account numbers of a consumer to a post-transaction
third-party seller under certain circumstances, etc.

CM 04/12/2011
BC

S-036 (10/2008)
04082011.1152 Page 4 of 4
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 Commerce and Tourism Committee

BILL: SB 150
INTRODUCER: Senator Smith
SUBJECT: Career and Education Planning
DATE: April 11, 2011 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Carrouth Matthews ED Favorable
2. Hrdlicka Cooper CM Pre-meeting
3. BC
4.
5.
6.

I. Summary:

Under SB 150, the career exploration course taken by middle grades students and required for
promotion must be aligned to the National Career Clusters, as supported by Florida’s Career
Clusters Initiative. Course alignment to career clusters will serve to support student awareness of
labor market trends and careers available in the global economy and to provide a framework for
middle grades career exploration.

The bill deletes the provision to require the Department of Education to develop course
frameworks and professional development materials for the middle grades career exploration
course.

This bill amends section 1003.4156 of the Florida Statutes.

II. Present Situation:

Middle Grades Career Exploration and Planning
To be promoted from middle school, s. 1003.4156, F.S., requires a student to successfully
complete: three middle school or higher courses in English, mathematics, social studies, and
science; and one course in career and education planning to be completed in grades 7 or 8. Each
student is required to complete a personalized academic and career plan by the end of the career
and education planning course.

The career and education planning course may be taught by any member of the instructional staff
and must include career exploration using CHOICES or a comparable program. Current law,
however, does not require exploration of any specific career fields.
BILL: SB 150 Page 2

The Florida Department of Education (DOE) recommends using the CHOICES Explorer1 and
Career Futures2 programs for the career exploration component of the course. School districts
may purchase the CHOICES Explorer and Career Futures from DOE.3

Career Clusters4
To effectively prepare students for tomorrow’s workforce, schools must help students achieve in
more challenging coursework by providing students with relevant contexts for learning. By
providing a connection to future goals, students are often motivated to work harder and enroll in
more rigorous courses.5 “Career clusters link what students learn in school with the knowledge
and skills they need for success in college and careers.” It also serves to identify pathways from
secondary school to two- and four-year colleges, graduate school, and the workplace.

National Career Clusters
The National Career Technical Education Foundation (NCTEF) established the States’ Career
Clusters Initiative6 to provide career clusters as a tool for seamless transition from education to
careers. Currently, there are 16 identified workforce areas within the National Career Clusters.7
The 16 clusters represent all career possibilities and serve as a method of organizing instruction
and applied learning in career and technical preparation courses, career academies, work-based
learning programs, smaller learning communities, magnet and charter schools, and secondary
schools that are restructuring around career themes.

Florida’s Career Clusters Initiative8
Florida is actively partnering in the States’ Career Clusters Initiative. The career clusters serve as
a framework for Florida’s required career exploration course at the middle grades. The following
list identifies the 16 career clusters and includes one additional cluster adopted by Florida in the
area of energy.9
Agriculture, food, and natural resources;
Architecture and construction;

1
CHOICES Explorer is an online education and career exploration system that provides extensive libraries of education,
career, and recreation articles. The site provides career profiles, postsecondary program descriptions, career videos, and other
career exploration resources. Students can research individual academic subjects or take the Career Finder or Major Finder
assessments to determine which academic, career, and majors interest them. Students can also combine their assessment
results and career goals with the personalized education plan in FACTS.org.
2
Career Futures is career exploration and planning software available on CD-ROM that provides students with access to
information on more than 650 occupations. It is designed to develop a student’s self-awareness and career exploration skills.
Career Futures employs hands-on activities that demonstrate how interests, education, earnings, and skills relate to the
workplace.
3
See DOE, Florida Choices website at https://access.bridges.com/auth/login.do?sponsor=7 (last visited 4/7/2011).
4
For a definition of “career clusters” see http://www.careerclusters.org/aboutus.php?define=CC (last visited 4/7/2011).
5
See NCTEF, More about Career Clusters, available at http://www.careerclusters.org/whatis.php (last visited 4/7/2011).
6
The initiative helps states as they connect career technical education to education, workforce preparation, and economic
development. The initiative promotes information-sharing, techniques, and methods to aid the development and
implementation of career clusters within states. See NCTEF state website at http://www.careerclusters.org/index.php (last
visited 4/7/2011).
7
See NCTEF, The 16 Career Clusters, available at http://www.careerclusters.org/16clusters.cfm (last visited 4/7/2011).
8
See DOE, Career and Technical Education Programs, Academic Year 2011/2012 Curriculum Frameworks By Career
Cluster, available at http://www.fldoe.org/workforce/dwdframe/ (last visited 4/7/2011).
9
Email correspondence with the Vice Chancellor, Division of Workforce Education, Florida Department of Education, April
16, 2010, on file with the Education Pre-K – 12 Committee.
BILL: SB 150 Page 3

Arts, audio/visual technology, and communications;
Business management and administration;
Education and training;
Finance;
Government and public administration;
Health science;
Hospitality and tourism;
Human services;
Information Technology;
Law, public safety, corrections, and security;
Manufacturing;
Marketing;
Science, technology, engineering, and mathematics;
Transportation, distribution, and logistics; and
Energy (Florida only).10

The Division of Career and Adult Education within DOE publishes the curriculum frameworks
aligned to the career clusters delineated by the U.S. Department of Education.

Course Frameworks and Professional Education Associated with Middle Grades Career
Exploration
In 2010, DOE reviewed and updated the current frameworks for the middle grades career
exploration course which identifies student performance standards. The Course Code Directory
identifies the courses that meet the middle grades promotion requirement and schools must use
one of the approved courses to meet the career planning and exploration requirement.11

To assist teachers in planning a comprehensive middle school career course, DOE developed the
Educator’s Toolkit on Career and Education Planning (Toolkit). The on-line professional
development Toolkit provides easy access to classroom activities, lesson plans, and related web-
based resources.12

III. Effect of Proposed Changes:

SB 150 requires that the career exploration course taken by middle grades students and required
for promotion purposes must be aligned to the National Career Clusters, as supported by
Florida’s Career Clusters Initiative. Course alignment to career clusters will serve to support
student awareness of labor market trends and careers available in the global economy and to
provide a framework for middle grades career exploration. Middle school students who are
exposed to relevant career information may be better prepared to acquire skills that will enable
them to earn industry certifications at the high school level in high-wage, high-skill, and high-
demand careers.

10
Based on recommendations by statewide advisory groups, Florida added Energy as the 17th career cluster in 2009.
11
There are 62 courses currently approved for the middle grades career course and can be accessed at:
http://www.fldoe.org/workforce/ced/pdf/approved-courses.pdf (last visited 4/7/2011).
12
See DOE, links to Toolkit modules at http://www.fldoe.org/workforce/ced/ (last visited 4/7/2011).
BILL: SB 150 Page 4

The bill deletes the provision to require DOE to develop course frameworks and professional
development materials for the middle grades career exploration course. Current law provides for
flexibility in how the course is delivered, allowing any member of the instructional staff to teach
the course and permitting the course to be integrated with other coursework. Eliminating the
course frameworks and associated professional development materials could diminish student
career exploration and may affect the opportunity for middle school students to effectively
choose courses or be academically prepared for high school courses required in career areas in
which they may be interested.

The bill is effective July 1, 2011.

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

None.

B. Public Records/Open Meetings Issues:

None.

C. Trust Funds Restrictions:

None.

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

None.

B. Private Sector Impact:

None.

C. Government Sector Impact:

None.

VI. Technical Deficiencies:

The Department of Education bill analysis requests that the bill require that the career course be
aligned to Florida’s Career Clusters rather than the National Career Clusters to include Florida’s
addition of the Energy workforce area.13

13
Florida Department of Education Legislative Bill Analysis, December 20, 2010, on file with the Committee.
BILL: SB 150 Page 5

VII. Related Issues:

None.

VIII. Additional Information:

A. Committee Substitute – Statement of Substantial 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.
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 Commerce and Tourism Committee

BILL: CS/SB 560
INTRODUCER: Transportation Committee and Senator Wise
SUBJECT: Sale of Advertising
DATE: April 10, 2011 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Eichin Spalla TR Fav/CS
2. Pugh Cooper CM Pre-meeting
3. BC
4.
5.
6.

Please see Section VIII. for Additional Information:
A. COMMITTEE SUBSTITUTE..... x Statement of Substantial Changes
B. AMENDMENTS........................ Technical amendments were recommended
Amendments were recommended
Significant amendments were recommended

I. Summary:

Florida has one of the most-extensive and popular networks of greenways and trails in the United
States. Much of the network has been acquired and managed using public dollars.

CS/SB 560 creates the “John Anthony Wilson Bicycle Safety Act of 2011,” which authorizes the
Department of Environmental Protection (DEP) to enter into agreements with not-for-profit or
private-sector entities allowing those entities to advertise on state-owned greenway and trail
facilities in the form of naming rights and commercial displays.

The bill contains restrictions or approval on placement, size, term, content, materials, and
construction. It also describes how proceeds from the agreements are to be distributed: 90
percent to the appropriate DEP trust fund to manage and operate state trails and greenways, and
10 percent to district school boards to pay for bicycle safety programs.

DEP is authorized to adopt rules to implement the bill’s provisions.

CS/SB 560 creates s. 260.014, F.S.
BILL: CS/SB 560 Page 2

II. Present Situation:

Florida Greenways and Trails
The 1979 Legislature enacted ch. 79-110, L.O.F., entitled the "Florida Recreational Trails Act of
1979." The purpose of the Act was to provide for a network of recreational and scenic trails to be
used for hiking, biking, horseback riding, canoeing, and jogging, which trails were to be
designated as the “Florida Recreational Trails System.” DEP (formerly the Department of
Natural Resources) was encouraged to use areas within or connecting state parks and forests,
national parks and forests, local parks, public rights-of-way, and existing trails.

In 1983, the Florida Trail was designated as the Florida National Scenic Trail, and today, it is a
1,500-mile-long trail, including both National Scenic Trail certified and non-certified miles,
which stretches from the Panhandle of Florida to the Big Cypress National Preserve.1 Portions of
the trail are components of the Florida Greenways and Trails program, the successor to the
Recreational Trails System.

In 1987, the Florida Rails-to-Trails program at the department was created to provide an
emphasis on the acquisition and development of abandoned railroad corridors for use as public
recreational trails, and to contribute to the preservation of wildlife habitat. Many railroad lines
run along river corridors and coastal plains, areas with the most scenic views and productive
habitat. Until 1990, the program depended on annual legislative appropriations, but the creation
of the Preservation 2000 (P2000) program changed that. The P2000 program was created as a
10-year, $3 billion bond program to acquire environmentally sensitive lands for conservation,
protection, restoration and preservation purposes. The Rails-to-Trails program was provided with
$3.9 million a year in funding under P2000 through 1996.

In 1996, the Florida Legislature enacted ch. 96-389, L.O.F., which renamed the Recreational
Trails System Act as the “Florida Greenways and Trails Act,” and provided for a statewide
system of greenways and trails for recreational and conservation purposes and uses. Greenways
were defined to be “linear open spaces established along either a natural corridor, such as a
riverfront, stream valley, or ridgeline, or over land along a railroad right-of-way converted to
recreational use...” and trails were defined to mean “linear corridors and any adjacent support
parcels on land or water providing public access for recreation or authorized alternative modes of
transportation.” P2000 funding for Rails-to-Trails was extended through 2000, and was
succeeded by funding from the Florida Forever program, as well as other state and federal
funding programs.

In 2005, the Florida Legislature enacted ch. 2005-87, L.O.F., to recognize the Florida National
Scenic Trail (trail) as Florida's official statewide non-motorized trail from the Florida Panhandle
to the Everglades and the Florida Keys. It further recognized the federal government's major
contributions and the efforts of private landowners, state government and non-profit entities in
establishing the trail. Private landowners were encouraged to continue to allow the use of private
property for trail purposes, through incentives and liability protection.

1
Florida Trail Association, Hike Florida on Florida’s Own National Scenic Trail, available at http://www.floridatrail.org.
Last visited March 25, 2011.
BILL: CS/SB 560 Page 3

The Office of Greenways & Trails (OGT)
An office within DEP, OGT provides statewide coordination to establish, expand, and promote
Florida’s Statewide System of Greenways and Trails. OGT manages trails and other lands as key
components of the Florida greenways and trails system, and partners with nearly 30 communities
that manage state acquired greenways and trails through sublease agreements. OGT manages a
multi-million dollar capital budget consisting of federal Transportation Enhancement grants and
fixed capital funds for the development of trails and facilities on state managed properties.2

OGT coordinates with, and provides assistance to, local governments, developers, state and
federal agencies, private landowners, and other interested citizens or advocates regarding the
acquisition, designation, establishment, and management of greenways and trails projects. OGT
works to expand the statewide network through a 1.5-percent annual allocation of Florida
Forever funding, about $4.5 million annually, for acquisition of trails. OGT administers the
Recreational Trails Program (RTP), a federally funded competitive grant program providing
financial assistance to local communities for the development of trails. Since inception, RTP has
assisted communities in 42 Florida counties to establish and expand trails.

Florida’s state trails and the Cross Florida Greenway had the highest annual visitation ever in
2009 with more than 4 million visitors, generating an estimated economic impact of $95
million.3

Florida Trail Association
The Florida Trail Association is a private, non-profit volunteer organization founded in 1966,
whose mission is to develop, maintain, promote, and protect a continuous hiking trail that runs
the length of the state, as well as the loop and side trails throughout the state.4

Outdoor Advertising
Sections 337.407 and 479.11(8), F.S., prohibit advertising signs from being placed in the right-
of-way of any road on the interstate highway system, the federal-aid primary highway system,
the State Highway System, or the State Park Road System.

Section 260.016, F.S., sets forth general powers that DEP may use in managing and overseeing
the Florida Greenways and Trails System. These powers include charging user fees or rentals but
do not specifically authorize DEP to sell naming rights or allow commercial displays.

III. Effect of Proposed Changes:

CS/SB 560 creates s. 260.0144, F.S., authorizing DEP to enter into concession agreements that
allow not-for-profit or private-sector businesses or entities the right to advertise on state-owned
property.

2
Greenways and Trails, Florida Department of Environmental Protection, available at http://www.dep.state.fl.us/gwt. Last
visited April 7, 2011.
3
See http://www.dep.state.fl.us/gwt/PDF/OfficeOverview.pdf. Site last visited April 7, 2011.
4
Florida Trail Association, Hike Florida on Florida’s Own National Scenic Trail, available at http://www.floridatrail.org.
Last visited April 7, 2011.
BILL: CS/SB 560 Page 4

Section 1: Names this legislation the “John Anthony Wilson Bicycle Safety Act.” Mr. Wilson5
was a veteran firefighter for the city of Boca Raton and a cycling enthusiast who was struck and
killed by a motor vehicle in February of this year while riding his bike.

Section 2: Creates s. 260.0144, F.S., to authorize DEP to enter into concession agreements for
naming rights or the display of commercial advertising on certain state-owned greenway and trail
facilities or property, subject to the following restrictions:
Placement of signage or displays shall be only at trailheads, trail intersections, directional
or distance markers, interpretive exhibits, and parking areas.
The size of the signage or display is limited to 16 square feet at trailheads and parking
areas and 4 square feet at all other areas.
Any concession agreement must be for a minimum 1-year term unless extended by a
multiyear agreement.
The name or display must be approved by DEP before installation.
Materials and construction for signage must meet standards which are to be established
by DEP.
All costs associated with the signage must be borne by the concessionaire.

Any agreement under this section may be terminated by DEP at its discretion.

Additionally, CS/SB 560 specifies that the naming rights and commercial displays contemplated
by the concession agreements are for public relations or advertising purposes for the
concessionaires, and as such, are not to be construed as having any relationship with the
department other than as set forth in the terms of the concession agreements.

Proceeds from the concession agreements are to be distributed as follows:
90 percent to the appropriate DEP trust fund used for the management and operation of
state greenway or trail facilities and properties; and
10 percent, as prorated by population, to district school boards to be used only for its
bicycle education program or Safe Route to Schools program. The share of any school
district that does not have such programs shall be deposited into the appropriate DEP
trust fund.

CS/SB 560 authorizes DEP to adopt rules to administer the act.

Section 3: Provides an effective date of July 1, 2011.

Other Potential Implications:
CS/SB 560 introduces a potential conflict with existing state and federal law. Sections 337.407
and 479.11(8), F.S., prohibit advertising signs from being placed in the right-of-way of any road
on the interstate highway system, the federal-aid primary highway system, the State Highway
System, or the State Park Road System. Sign placement permitted by the bill could potentially
conflict with these provisions, depending on the location.

5
More information about the life of Mr. Wilson is available at http://www.ci.boca-
raton.fl.us/fire/pdf/PressReleases/2011/wilson.pdf and at http://www.palmbeachpost.com/news/hundreds-from-across-
florida-gather-to-mourn-boca-1247122.html. Sites last visited April 7, 2011.
BILL: CS/SB 560 Page 5

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

None.

B. Public Records/Open Meetings Issues:

None.

C. Trust Funds Restrictions:

None.

D. Other Constitutional Issues:

CS/SB 560 requires DEP approval prior to the installation of naming signage or an
advertising display. It is not clear whether the intent of this language is to provide
authority to regulate the content of a message communicated by a display or simply
whether the signage meets material and construction standards. Regardless, the provision
may give rise to claims based on alleged interference with constitutionally protected free
speech. Further, the language could be argued to vest absolute discretion in DEP to
decide appropriate content, the exercise of which can be expected to result in litigation
challenging the constitutionality of the law either on the face of the law or as it is applied
by DEP.

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

The Revenue Estimating Conference has not considered this bill yet and, accordingly, the
amount of revenue that might be realized due to this bill is not known at this time.

B. Private Sector Impact:

Indeterminate.

C. Government Sector Impact:

Indeterminate.

VI. Technical Deficiencies:

None.

VII. Related Issues:

None.
BILL: CS/SB 560 Page 6

VIII. Additional Information:

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

CS by Transportation on March 29, 2011:
The CS removes language authorizing advertising on state-owned transportation property
under regulation by the Governor’s Office of Tourism, Trade, and Economic
Development, and replaces it with language authorizing advertising on state greenway
and trail facilities or properties under regulation by DEP. It sets forth standards and
restrictions that the advertising must meet, including approval by DEP. It gives DEP
rulemaking authority to implement the bill and directs how the proceeds from the sale of
advertising are to be distributed.

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 - 2011 COMMITTEE AMENDMENT
Bill No. SB 622

Ì256688cÎ256688

LEGISLATIVE ACTION
Senate . House
.
.
.
.
.

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

1 Senate Amendment (with title amendment)
2
3 Delete everything after the enacting clause
4 and insert:
5 Section 1. Paragraph (j) is added to subsection (1) of
6 section 538.03, Florida Statutes, to read:
7 538.03 Definitions; applicability.—
8 (1) As used in this part, the term:
9 (j) “Appropriate law enforcement official” means the
10 sheriff of the county in which a secondhand dealer is located
11 or, in the case of a secondhand dealer located within a
12 municipality, the police chief of the municipality in which the

Page 1 of 8
4/8/2011 4:47:06 PM 577-04081-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 622

Ì256688cÎ256688

13 secondhand dealer is located; however, any sheriff or police
14 chief may designate as the appropriate law enforcement official
15 for the county or municipality, as applicable, any law
16 enforcement officer working within the county or municipality
17 headed by that sheriff or police chief. This paragraph does not
18 limit the power and responsibilities of the sheriff.
19 Section 2. Subsection (1) of section 538.04, Florida
20 Statutes, is amended to read:
21 538.04 Recordkeeping requirements; penalties.—
22 (1) Secondhand dealers shall complete a secondhand dealers
23 transaction form at the time of the actual transaction. A
24 secondhand dealer shall maintain a copy of a completed
25 transaction form on the registered premises for at least 1 year
26 after the date of the transaction. However, the secondhand
27 dealer shall maintain a copy of the transaction form for not
28 less than 3 years. Unless other arrangements have been agreed
29 upon by the secondhand dealer and the appropriate law
30 enforcement agency, the secondhand dealer shall, within 24 hours
31 after the acquisition of any secondhand goods, deliver to the
32 appropriate law enforcement official police department of the
33 municipality where the goods were acquired or, if the goods were
34 acquired outside of a municipality, to the sheriff’s department
35 of the county where the goods were acquired, a record of the
36 transaction on a form approved by the Department of Law
37 Enforcement. Such record shall contain:
38 (a) The time, date, and place of the transaction.
39 (b) A complete and accurate description of the goods
40 acquired, including the following information, if applicable:
41 1. Brand name.

Page 2 of 8
4/8/2011 4:47:06 PM 577-04081-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 622

Ì256688cÎ256688

42 2. Model number.
43 3. Manufacturer’s serial number.
44 4. Size.
45 5. Color, as apparent to the untrained eye.
46 6. Precious metal type, weight, and content if known.
47 7. Gemstone description, including the number of stones, if
48 applicable.
49 8. In the case of firearms, the type of action, caliber or
50 gauge, number of barrels, barrel length, and finish.
51 9. Any other unique identifying marks, numbers, or letters.
52 (c) A description of the person from whom the goods were
53 acquired, including:
54 1. Full name, current residential address, workplace, and
55 home and work phone numbers.
56 2. Height, weight, date of birth, race, gender, hair color,
57 eye color, and any other identifying marks.
58 3. The right thumbprint, free of smudges and smears, of the
59 person from whom the goods were acquired.
60 (d) Any other information required by the form approved by
61 the Department of Law Enforcement.
62 Section 3. Subsection (10) is added to section 538.18,
63 Florida Statutes, to read:
64 538.18 Definitions.—As used in this part, the term:
65 (10) “Appropriate law enforcement official” means the
66 sheriff of the county in which a secondary metals recycler is
67 located or, in the case of a secondary metals recycler located
68 within a municipality, the police chief of the municipality in
69 which the secondary metals recycler is located; however, any
70 sheriff or police chief may designate as the appropriate law

Page 3 of 8
4/8/2011 4:47:06 PM 577-04081-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 622

Ì256688cÎ256688

71 enforcement official for the county or municipality, as
72 applicable, any law enforcement officer working within the
73 county or municipality headed by that sheriff or police chief.
74 This subsection does not limit the power and responsibilities of
75 the sheriff.
76 Section 4. Section 538.19, Florida Statutes, is amended to
77 read:
78 538.19 Records required.—
79 (1) A secondary metals recycler shall complete a
80 transaction form at the time of the actual transaction. Unless
81 other arrangements have been agreed upon, the secondary metals
82 recycler shall, within 24 hours after acquiring the regulated
83 metals, deliver to the appropriate law enforcement official a
84 record of the transaction on a form approved by the Department
85 of Law Enforcement. The recycler shall also maintain a legible
86 record of all purchase transactions to which the such secondary
87 metals recycler is a party.
88 (2) The following information must be maintained on the a
89 form approved by the Department of Law Enforcement for each
90 purchase transaction:
91 (a) The name and address of the secondary metals recycler.
92 (b) The name, initials, or other identification of the
93 individual entering the information on the ticket.
94 (c) The date and time of the transaction.
95 (d) The weight, quantity, or volume, and a description of
96 the type of regulated metals property purchased in a purchase
97 transaction.
98 (e) The amount of consideration given in a purchase
99 transaction for the regulated metals property.

Page 4 of 8
4/8/2011 4:47:06 PM 577-04081-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 622

Ì256688cÎ256688

100 (f) A signed statement from the person delivering the
101 regulated metals property stating that she or he is the rightful
102 owner of, or is entitled to sell, the regulated metals property
103 being sold. If the purchase involves a stainless steel beer keg,
104 the seller must provide written documentation from the
105 manufacturer that the seller is the owner of the stainless steel
106 beer keg or is an employee or agent of the manufacturer.
107 (g) The distinctive number from the personal identification
108 card of the person delivering the regulated metals property to
109 the secondary metals recycler.
110 (h) A description of the person from whom the goods were
111 acquired, including:
112 1. Full name, current residential address, workplace, and
113 home and work phone numbers.
114 2. Height, weight, date of birth, race, gender, hair color,
115 eye color, and any other identifying marks.
116 3. The right thumbprint, free of smudges and smears.
117 4. Vehicle description to include the make, model, and tag
118 number of the vehicle and trailer of the person selling the
119 regulated metals property.
120 5. Any other information required by the form approved by
121 the Department of Law Enforcement.
122 (i) A photograph, videotape, or digital image of the
123 regulated metals being sold.
124 (j) A photograph, videotape, or similar likeness of the
125 person receiving consideration in which such person’s facial
126 features are clearly visible.
127 (3) Any secondary metals recycler may, with the approval of
128 the appropriate law enforcement official, use that maintains an

Page 5 of 8
4/8/2011 4:47:06 PM 577-04081-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 622

Ì256688cÎ256688

129 electronic database containing the information required in
130 subsection (2) paragraph (2)(h), along with an oath of ownership
131 with a signature of the seller of the secondary metals being
132 purchased by the secondary metals recycler and a right
133 thumbprint that has no smudges and smears on the oath of
134 ownership for each purchase transaction, shall be exempt from
135 the records requirement of paragraph (2)(h). A secondary metals
136 recycler complies with the requirements of this section if it
137 maintains an electronic database containing the information
138 required by subsection (2) paragraph (2)(h) as long as the
139 electronic information required by subsection (2) paragraph
140 (2)(h), along with an electronic oath of ownership with an
141 electronic signature of the seller of the secondary metals being
142 purchased by the secondary metals recyclers and an electronic
143 image of the seller’s right thumbprint that has no smudges and
144 smears, can be downloaded onto a paper form in the image of the
145 form approved by the Department of Law Enforcement as provided
146 in subsection (2).
147 (4) If an appropriate law enforcement official supplies the
148 software and the secondary metals recycler has the computer
149 ability, the recycler shall electronically transmit regulated
150 metals transaction records required by this section. If a
151 recycler does not have such ability, the appropriate law
152 enforcement official may provide the recycler with a computer
153 and necessary equipment to electronically transmit such records.
154 The appropriate law enforcement official shall retain ownership
155 of the computer, unless otherwise agreed upon, and the recycler
156 shall maintain the computer in good working order, ordinary wear
157 and tear excepted. A recycler who transmits such records

Page 6 of 8
4/8/2011 4:47:06 PM 577-04081-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 622

Ì256688cÎ256688

158 electronically is not required to also provide the original or
159 paper copies of the forms to the appropriate law enforcement
160 official. However, such official may, for purposes of a criminal
161 investigation, require the recycler to provide the original of a
162 transaction form that has been electronically transferred within
163 24 hours after receipt of the request.
164 (5)(4) A secondary metals recycler shall maintain or cause
165 to be maintained the information required by this section for
166 not less than 5 years from the date of the purchase transaction.
167 (6)(5) If a purchase transaction involves the transfer of
168 regulated metals property from a secondary metals recycler
169 registered with the department to another secondary metals
170 recycler registered with the department, the secondary metals
171 recycler receiving the regulated metals property shall record
172 the name and address of the secondary metals recycler from which
173 it received the regulated metals property in lieu of the
174 requirements of paragraph (2)(h).
175 Section 5. This act shall take effect July 1, 2011.
176
177 ================= T I T L E A M E N D M E N T ================
178 And the title is amended as follows:
179 Delete everything before the enacting clause
180 and insert:
181 A bill to be entitled
182 An act relating to secondhand dealers and secondary
183 metals recyclers; amending ss. 538.03 and 538.18,
184 F.S.; defining the term “appropriate law enforcement
185 official”; amending s. 538.04, F.S.; clarifying a
186 provision requiring that the secondhand dealers

Page 7 of 8
4/8/2011 4:47:06 PM 577-04081-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 622

Ì256688cÎ256688

187 transaction form be delivered to the appropriate law
188 enforcement official; amending s. 538.19, F.S.;
189 requiring that a secondary metals recycler complete a
190 transaction form and transmit it to the appropriate
191 law enforcement official within 24 hours after the
192 acquisition of regulated metals; authorizing such
193 recyclers to use an electronic database and transmit
194 transaction forms electronically; providing for
195 appropriate law enforcement officials to provide
196 software and computer equipment to recyclers;
197 requiring that a recycler produce an original form in
198 certain situations; providing an effective date.

Page 8 of 8
4/8/2011 4:47:06 PM 577-04081-11
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 Commerce and Tourism Committee

BILL: SB 622
INTRODUCER: Senator Hays
SUBJECT: Secondhand dealers and secondary metals recyclers
DATE: April 11, 2011 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. McCarthy Cooper CM Pre-meeting
2. CJ
3. BC
4.
5.
6.

I. Summary:

This bill expands the reporting requirements on secondhand dealers, secondary metals recyclers,
and pawnbrokers whose place of business is located in municipalities. These businesses would
be required to deliver – either copies of or electronically – records of purchase transactions to
both the Sheriff and the Chief of Police. If the Sheriff or Chief of Police have different systems
or requirements for receiving these records, this may require the dealer to have two separate
systems for maintaining and reporting purchase transactions.

This bill also imposes new requirements and limits on secondary metals recyclers in their
retention and transmission of purchase transaction records to local law enforcement. This bill:
Requires recyclers to deliver purchase transaction records to both the Sheriff and, if in a
city, the Chief of Police within 24 hours, rather than only maintain such records;
Expands the reporting requirements of recyclers that submit purchase transaction
information electronically, and requires that the electronic submission of the information
be approved by the appropriate law enforcement official;
Requires recyclers to submit purchase transaction information electronically if the
appropriate law enforcement official supplies the appropriate software and, if necessary,
the appropriate hardware; and
Requires recyclers to provide the original transaction form, when requested by the
appropriate law enforcement official, for purposes of a criminal investigation.
The bill creates a uniform definition for “appropriate law enforcement official” for the provisions
relating to reporting of purchase transactions by secondhand dealers, secondary metals recyclers,
and pawnshops.
BILL: SB 622 Page 2

This bill amends the following sections of the Florida Statutes: 538.03, 538.04, 538.18, 538.19,
and 539.001.

II. Present Situation:

A secondhand dealer is any person, who is not a secondary metals recycler and who is engaged
in the business of purchasing, consigning, or trading secondhand goods.1 Secondhand dealers are
responsible for maintaining a record of all sale transactions. A copy of a completed transaction
form must be maintained for at least 3 years. The secondhand dealers must provide local law
enforcement with a record of each transaction within 24 hours of the transaction on a form
approved by FDLE. The form may be submitted by electronic transmission if the secondhand
dealer is capable of doing so and if the law enforcement agency permits.2

A secondary metals recycler (recycler) is any person who is engaged in the business of
gathering or obtaining ferrous or nonferrous metals, or is in the business of performing the
manufacturing process by which ferrous metals or nonferrous metals are converted into raw
material products.3 Recyclers are required to maintain legible records of all purchase transactions
to which the recycler is a party. A recycler must keep the information required for a period of 5
years from the date of the purchase transaction.4 During the usual and customary business hours
of a recycler, a law enforcement officer has the right to inspect all purchased regulated metals
property in the possession of the recycler, as well as all records required to be maintained.5

A pawnbroker means a person who is engaged in the business of advancing funds on the
security of pledged goods on condition that the pledged goods are left in the possession of the
pawnbroker for the duration of the pawn and may be redeemed by the pledgor on the terms and
conditions contained under law.6 A pawnbroker must maintain a copy of each completed
pawnbroker transaction form on the pawnshop premises for at least 1 year after the date of the
transaction. On or before the end of each business day, the pawnbroker must deliver to the
appropriate law enforcement official the original pawnbroker transaction forms for each of the
transactions occurring during the previous business day, unless other arrangements have been
agreed upon between the pawnbroker and the appropriate law enforcement official. Submission
of the pawnbroker transaction forms may be made electronically.7

III. Effect of Proposed Changes:

This bill creates a uniform definition for “appropriate law enforcement official” for the
provisions relating to reporting of purchase transactions by secondhand dealers, secondary
metals recyclers, and pawnshops.

“Appropriate law enforcement official” means the sheriff of the county in which a
(business) is located and, in the case of a (business) located within a municipality, the
1
See s. 538.03(1)(a), F.S.
2
See s. 538.04, F.S.
3
See s. 538.18(8), F.S.
4
See s. 538.19(4), F.S.
5
See s. 538.20, F.S.
6
See s. 539.001, F.S.
7
See s. 539.001(9), F.S.
BILL: SB 622 Page 3

police chief of the municipality in which the (business) is located; however, any sheriff or
police chief may designate as the appropriate law enforcement official for the county or
municipality, as applicable, any law enforcement officer working within the county or
municipality headed by that sheriff or police chief. This subsection does not limit the
power and responsibilities of the sheriff. (Emphasis added)

As previously stated, current law requires secondhand dealers and pawnbrokers to report to the
sheriff if the business is located in the unincorporated area of the county. If the business is
located within a municipality, the business is required to report to the police department of the
municipality.

The consequence of this definition, and related statutory changes, is to expand the reporting
requirements to secondhand dealers and pawnshops whose place of business is located in
municipalities. These businesses would be required to deliver – either copies of or electronically
– records of purchase transactions to both the Sheriff and the Chief of Police. If the Sheriff and
the Chief of Police have different systems for receiving these records, it may require the dealer
have two separate systems for maintaining and reporting such purchase transactions. If the law
enforcement agencies involved use the same system (either paper copies or electronic records),
this requirement may not be too burdensome.

The definition also includes a provision stating that the definition “does not limit the power and
responsibilities of the sheriff.”

The bill also imposes new reporting requirements on secondary metals recyclers and require, if
the business is located in a municipality, purchase transaction records be submitted to both the
Sheriff and the Chief of Police.

Section 1 amends s. 538.03, F.S., to create a definition for “appropriate law enforcement
official” for the provisions relating to reporting of purchase transactions by secondhand dealers,
consistent with the definition used for secondary metals recyclers and pawnshops, as proposed in
this bill.

Section 2 amends s. 538.04, F.S., to designate the “appropriate law enforcement official” – as
defined in Section 1 of the bill – as the entity whom secondhand dealers must submit purchase
transactions.

Section 3 amends s. 538.18, F.S., to create a definition for “appropriate law enforcement
official” for the provisions relating to reporting of purchase transactions by secondary metals
recyclers, consistent with the definition used for secondhand dealers and pawnshops, as proposed
in this bill.

Section 4 amends s. 538.19, F.S., to impose additional reporting requirements on secondary
metals recyclers.

Currently, s. 538.19(1), F.S., requires recyclers to maintain a record of purchase transactions on
forms approved by the Department of Law Enforcement. Subsection (2) specifies the
information that must be included in the purchase transaction form. Such records must be
BILL: SB 622 Page 4

maintained for 5 years and be available for inspection by law enforcement officers. Subsection
(1) is amended to require such transaction forms be delivered to the appropriate law enforcement
official within 24 hours of the transaction.

Currently, recyclers that maintain an electronic database containing a limited amount of the
information required on the approved purchase transaction forms – a description of the seller,
oath of ownership, and right thumbprint of the seller – that can be downloaded onto a paper form
approved by the Department of Law Enforcement, are deemed in compliance with the
requirements of the entire section. Section 538.19(3), F.S., is amended to require all of the
reporting requirements of subsection (2) be satisfied, and that electronic submission of the
information be approved by the appropriate law enforcement official.

Subsection (4) is created to require recyclers to submit purchase transaction information
electronically if the appropriate law enforcement official supplies the appropriate software and
the recycler has the hardware to accommodate the software. If the recycler does not have the
appropriate hardware, the appropriate law enforcement official is authorized to provide the
equipment. The conditions for the provision and ownership of such equipment is specified. In
addition, the recycler is required to provide the original transaction form within 24 hours, when
requested by the appropriate law enforcement official, for purposes of a criminal investigation.

Section 5 amends s. 539.001, F.S., the definition of “appropriate law enforcement official” for
the provisions relating to reporting of purchase transactions by pawnshops, consistent with the
definition used for secondhand dealers and secondary metals recyclers, as proposed in this bill.

Section 6 provides and effective date of July, 2011.

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

None.

B. Public Records/Open Meetings Issues:

None.

C. Trust Funds Restrictions:

None.

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

None.
BILL: SB 622 Page 5

B. Private Sector Impact:

This bill places a reporting requirement on secondary metals recyclers. To the extent that
the recycler, or his staff, would have to be trained on a computer system or manually
transmit the transaction reports to the appropriate law enforcement agency, there will be
an indeterminate cost to the business.

The bill also creates the possibility of dual reporting of transactions by secondhand
dealers, secondary metals recyclers, and pawnbrokers based upon where the business is
located. This could increase the costs to the owner in complying with this requirement.

C. Government Sector Impact:

The cost to law enforcement in providing computer equipment to secondary metals
recyclers cannot be determined at this time. There should be some cost savings for law
enforcement to the extent that data is transmitted electronically, thereby, decreasing the
data input costs.

VI. Technical Deficiencies:

None.

VII. Related Issues:

VIII. Additional Information:

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

None.

B. Amendments:

None

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

BILL: SB 790
INTRODUCER: Senator Altman
SUBJECT: Tax Credits
DATE: April 11, 2011 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Hrdlicka Cooper CM Pre-meeting
2. BC
3.
4.
5.
6.

I. Summary:

The retirement of the Space Shuttle is projected to leave in its wake the loss of at least 9,000
Florida jobs directly associated with the program. State and regional economic development and
workforce training agencies are developing strategies to address this potential loss of jobs,
ranging from the recruitment of new companies to offering retraining in related fields.

Currently, aerospace businesses can utilize, depending on their location and investment, 12
general business incentives and at least 4 business sales tax exemptions. Additionally, the
Legislature has created the Qualified Defense Contractor and Spaceflight Business (QDSC) Tax
Refund program, which reimburses a number of taxes to eligible companies based on job
creation.

SB 790 seeks to address, in part, the job-loss issue by creating two new corporate income tax
credits related to aerospace employment:
The Aerospace-Sector Jobs Tax Credit is a maximum $12,500 per qualified employee
annually, and is based on wages subject to the unemployment tax. The credit is equal to
10 percent of the compensation paid each qualified employee for the first though fifth
years of employment.
The Tuition Reimbursement Tax Credit is equal to 50 percent of the tuition for which an
aerospace business reimbursed a qualified employee in a single tax year. The credit may
only be claimed if the qualified employee was awarded an undergraduate or graduate
degree, a technical certification, or a certification from a training program coordinated by
Workforce Florida, Inc., within 1 year after being hired by the aerospace business.
BILL: SB 790 Page 2

The bill creates s. 220.1811, F.S., and amends ss. 220.02 and 220.13, F.S.

II. Present Situation:

Aerospace Work Force
The last mission for the Space Shuttle program is scheduled for April 2011. The “moon to
Mars” successor program, known as Constellation, that was scheduled to begin in 2015, was
cancelled. Instead, the National Aeronautics and Space Administration (NASA) will focus on
research and development for robotic exploration, the development of human spaceflight
vehicles in the U.S. commercial market, and, as part of the agency’s federal FY 2012-13 budget
request, the development of a heavy-lift rocket and crew capsule.1 The intervening period
between the retirement of the Space Shuttle program and whichever direction the space program
takes next is referred to as the “shuttle gap,” in which a number of employees in the aerospace
industry, in Florida and elsewhere, may lose their current jobs.2

In August 2007, the Brevard Workforce Development Board, Inc., (BWDB) estimated that
shuttle-related activity in Florida supports a workforce level of approximately 9,235 employees
(6,340 United Space Alliance employees and 2,895 sub-tier and related support contractor
employees). The majority of this workforce is located at or near the Kennedy Space Center.
However, the total economic impact of the Shuttle Program is statewide, and it has a specific
shuttle-related supplier base of some 1,046 companies throughout the state.3

The BWDB further found that Shuttle workforce skills are highly translatable to any work that
the state pursues as part of its next generation space activities. The BWDB estimates that one-
third of the Florida Shuttle-related workforce will need transition assistance to a different
industry or occupation, and one-third will need skills upgrades for the next generation space
programs, public or private. The remaining one-third is expected to retire.4 Disregarding the
number of employees who will retire, the BWDB estimates that at least 9,000 aerospace workers
will lose their current positions.

In response to this anticipated shuttle gap, the 2008 Florida Legislature appropriated $1.25
million to:
…be used to provide services focused on retention and retraining of skilled talent in the
space industry and shall include workforce skills analysis, training, and placement

1
NASA, Fiscal Year 2012 Budget Estimates, available at
http://www.nasa.gov/pdf/516684main_FY12_summary_Budget_Briefing_final_21411_rev1.pdf (last visited 4/7/2011).
2
Efforts to Address Workforce Issues Related to the Space Program, The Florida Senate Committee on Commerce, , Issue
Brief 2009-305 (October 2008), at http://www.flsenate.gov/data/Publications/2009/Senate/reports/interim_reports/pdf/2009-
305cm.pdf (last visited 4/7/2011).
3
Brevard Workforce Development Board, Inc., “Aerospace Workforce Outlook Report,” Executive Summary, August 2007.
4
Brevard Workforce Development Board, Inc., “Aerospace Workforce Outlook Report,” Executive Summary, August 2007.
BILL: SB 790 Page 3

services, and may include communications efforts. Workforce Florida, Inc., shall develop
a plan to implement this program.5

BWDB received a $15 million National Emergency Grant from the U.S. Department of Labor in
July 2010 to implement programs for transitioning aerospace workers.

Besides retraining efforts, BWDB, the local economic development council, Space Florida,
Enterprise Florida, Inc., and other entities are working to recruit new aerospace-related
companies or technology-based businesses that could employ the already-skilled Shuttle
workforce.

The Qualified Defense Contractor and Spaceflight Business (QDSC) Tax Refund Program 6
Amended in 2008 to include aerospace companies,7 the QDSC was designed to recruit, retain,
and encourage expansion of the high-wage, high-skilled jobs in a competitive industry. This tax
incentive targets the following types of projects: consolidation of certain Department of Defense
(DOD) contracts; conversion of DOD production jobs to non-defense production jobs; projects
involving the reuse of defense-related facilities for specific activities; the manufacturing,
processing, and assembly of space flight vehicles; and a number of other activities related to
space flight.

Since its inception, 44 QDSC applications have been received, and 30 have been approved.
There are 5 active QDSC projects, which have created or retained 1,504 jobs over the years with
an average wage of nearly $53,780, and which have received a total of $5.9 million in tax
refunds.8

III. Effect of Proposed Changes:

SB 790 is one attempt to address the loss of high-skilled jobs in Florida due to the retirement of
the Space Shuttle by encouraging new or existing aerospace businesses in Florida to expand their
workforce, and to reimburse certain employees’ education expenses.

Section 220.02, F.S., lists tax credits in the order in which they may be claimed against a
corporate income tax liability. Section 1 of the bill amends this section to add the new corporate
tax credits to the end of the list.

Section 2 amends s. 220.13, F.S., to require corporate income taxpayers to add the amount of the
new credits taken for a particular tax year to their adjusted federal income.

5
From the Special Employment Security Administration Trust Fund. Line Item 2202, ch. 2008-152, L.O.F. Workforce
Florida, Inc., received federal funds and grants in 2009 to continue dislocated aerospace workforce initiatives (about $2.2
million).
6
Section 288.1045, F.S.
7
Chapter 2008-89, L.O.F.
8
Enterprise Florida, Inc., 2010 Incentives Report, p. 19-20, available at
http://www.eflorida.com/IntelligenceCenter/download/ER/BRR_Incentives_Report.pdf (last visited 4/7/2011).
BILL: SB 790 Page 4

Two aerospace-related tax credits, the Aerospace Sector Jobs Tax Credit and the Tuition
Reimbursement Tax Credit, are authorized in Section 3 of the bill, with the creation of s.
220.1811, F.S.

Tax Credits
The Aerospace Sector Jobs Tax Credit is a maximum $12,500 per qualified employee annually,
and is based on wages subject to the unemployment tax. The credit is equal to 10 percent of the
compensation paid each qualified employee for the first though fifth years of employment.

The Tuition Reimbursement Tax Credit is equal to 50 percent of the tuition for which an
aerospace business reimbursed a qualified employee in a single tax year. The credit may only be
claimed if the qualified employee was awarded an undergraduate or graduate degree, a technical
certification, or a certification from a Workforce Florida, Inc., training program within 1 year
after being hired by the aerospace business. The business must claim the credit within 4 years of
hiring the qualified employee. The bill leaves the amount of tuition to be reimbursed up to the
business.

For both types of credits, aerospace businesses may carry forward any unused credits up to 5
years. The business may use the carryover credits in a subsequent year if its tax liability exceeds
the unused credit even after applying other tax credits, pursuant to s. 220.02(8), F.S.

A business cannot claim both credits for the same employee. The maximum amount of credits
any aerospace business may claim in a single calendar year is $200,000; the total amount of
credits claimed under the program in a calendar year by all eligible businesses is capped at $2
million. Additionally, an aerospace business may not carry over more tax credits in an amended
return than were claimed on the original return for the taxable year. This subsection does not
limit increases in the amount of credit claimed on an amended return due to the use of any
carryforward credits.

Application process
An aerospace business may apply to the Department of Revenue (DOR) for authorization to
claim the new credits. The applications must be filed under oath and include the business’s name
and address, documentation that it is an aerospace business, certain information about each
employee for which a tax credit is sought, and a statement indicating which credit the applicant
is seeking. The business bears the burden of demonstrating to DOR’s satisfaction that it meets
the requirements for the tax credits.

Penalties
Any aerospace business that fraudulently claims either of these credits is liable for repayment of
the credit, plus a mandatory penalty in the amount of 200 percent of the credit, plus interest at the
rate provided in s. 220.807, F.S. The business also is presumed to have committed a third-degree
felony, which is punishable as provided in ss. 775.082, 775.083, or 775.084, F.S.

Similarly, an aerospace business that makes an underpayment of tax as a result of a grossly
overstated claim for either of these credits commits a third-degree felony. As used in the bill, the
term “grossly overstated claim” means a claim in an amount in excess of 100 percent of the
amount of credit allowable.
BILL: SB 790 Page 5

Definitions
The bill defines the terms “aerospace business,” “qualified employee,” and “tuition reimbursed
to a qualified employee” for purposes of the new tax credits.

Rulemaking
DOR is authorized to adopt rules to prescribe any necessary forms required to claim one of the
new tax credits, and to provide guidelines and procedures required to administer the program.

Expiration
Section 220.1811, F.S., with the exception of the credit-carryover provisions and the limits on
the carryover of credits, expires December 31, 2021. An aerospace business may not claim a new
tax credit created by this bill after that date. However, an aerospace business may claim tax
credits carried over from a previous year, if they are still within the 5-year window.

Section 4 provides an effective date of January 1, 2012, and specifies that the bill is applicable to
tax years that begin on or after that date.

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

None.

B. Public Records/Open Meetings Issues:

None.

C. Trust Funds Restrictions:

None.

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

The Revenue Estimating Conference met on March 11, 2011, and determined that the tax
credits created by this bill would have an annual recurring impact of $2 million.

B. Private Sector Impact:

Aerospace company workers may benefit if their employers are encouraged by the
availability of the tax credit to reimburse their tuition expenses. Aerospace companies
may benefit because they could use either the jobs tax credit or the tuition reimbursement
tax credit to expand their workforce and hire employees who are continuing their
education.
BILL: SB 790 Page 6

C. Government Sector Impact:

DOR estimates that to implement the two new tax credits it will incur a cost of $28,800 to
modify the SUNTAX system. Other changes, including Taxpayer Information
Publications, tax form changes, returns processing, and revenue accounting to determine
eligibility for the tax credits, can be managed with existing resources or at no additional
costs.

VI. Technical Deficiencies:

None.

VII. Related Issues:

In federal FY 2008, NASA estimated the total impact of the agency’s activity in Florida was $4.1
billion in output, $2.1 billion of household income, and 40,802 jobs. “This activity also
generated $246 million of federal taxes and $103 million of state and local taxes. The largest
share of the impact – 98% of the output impact, 99% of the income impact and 99% of the
employment impact – occurred in Central Florida.”9

For the Tuition Reimbursement Tax Credit, the bill leaves the amount of tuition to be reimbursed
up to the business. Thus in one situation, a business could decide to reimburse a new employee’s
entire 4 years of college tuition, and in another situation, a business may only reimburse the last
year of tuition, or a portion there of, during which the employee worked for the business.

VIII. Additional Information:

A. Committee Substitute – Statement of Substantial 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.

9
See NASA, Economic Impact of NASA in Florida FY 2008, available at
http://www.nasa.gov/centers/kennedy/pdf/318131main_economic-impact08.pdf (last visited 3/20/2010).
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 854

Ì704562&Î704562

LEGISLATIVE ACTION
Senate . House
.
.
.
.
.

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

1 Senate Amendment
2
3 Delete lines 57 - 58
4 and insert:
5 wine within this state or any other state may ship wines

Page 1 of 1
4/11/2011 10:57:43 AM 577-04041-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 854

Ì1711867Î171186

LEGISLATIVE ACTION
Senate . House
.
.
.
.
.

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

1 Senate Amendment
2
3 Delete lines 107 - 123
4 and insert:
5 (b) The division may issue a license under this section
6 only if the applicant or licensee has not violated the
7 conditions of licensure or the requirements or limitations of
8 this section.

Page 1 of 1
4/11/2011 10:52:53 AM 577-04042-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 854

Ì506406ÂÎ506406

LEGISLATIVE ACTION
Senate . House
.
.
.
.
.

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

1 Senate Amendment
2
3 Delete line 169
4 and insert:
5 surtax imposed under s. 212.055 and collected by licensed winery
6 shippers located outside this state shall be deposited into the

Page 1 of 1
4/11/2011 3:54:40 PM CM.CM.04157
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 Commerce and Tourism Committee

BILL: SB 854
INTRODUCER: Senator Negron
SUBJECT: Production and Shipment of Wine
DATE: April 8, 2011 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Oxamendi Imhof RI Favorable
2. Hrdlicka Cooper CM Pre-meeting
3. BC
4.
5.
6.

I. Summary:

SB 854 regulates the direct shipment of wine to Florida consumers by winery shippers and
provides for licensure and regulation of winery shippers by the Division of Alcoholic Beverage
and Tobacco (division). To legally ship wine directly to Florida consumers, an in-state or out-of-
state winery shipper must meet the following basic qualifications for licensure. A winery shipper
must:
Be a manufacturer of wine that holds all applicable state and federal wine manufacturer
permits and licenses;
Not manufacture more than 250,000 gallons of wine per year, or be a subsidiary, or
affiliated with, a winery that manufactures more than 250,000 gallons of wine annually;
Not ship, or cause to be shipped, more than 12 cases of wine per calendar year to a
household address;
Meet the same basic license qualifications required for other Florida alcoholic beverage
licensees; and
Pay a $250 license fee and renewal fee.

The bill also prohibits consumers from purchasing more than 12 cases of wine each calendar
year. The bill provides that a licensed winery shipper may ship wine directly only to persons who
are at least 21 years of age for personal use and not for resale. To ensure compliance with this
requirement the bill requires that the winery shipper must:
Verify the age of the purchaser at the time of sale and delivery; and
Comply with the bill’s container labeling requirement.
BILL: SB 854 Page 2

The bill also requires that the common carriers used to deliver the wine must keep records of
wine deliveries into Florida for three years.

The bill requires that the winery shippers collect and remit all applicable excise taxes on wine to
the division and sales taxes to the Department of Revenue, including discretionary local sales
surtaxes. To ensure compliance with these requirements the bill requires that winery shippers:
Register as a Primary American Source of Supply under s. 564.045, F.S.;
Register with the Florida Department of Revenue;
Calculate sales taxes as if the sale took place in this state;
File a $5,000 bond with the division;
Make monthly reports to the division;
Maintain records of sales for three years; and
Submit to state audits.

The bill provides that licensed winery shippers consent to the jurisdiction of the division, any
other state agency, and the courts of this state. They must also appoint a registered agent for
acceptance of service of process.

It provides a second degree misdemeanor for any winery shipper, common carrier, permit carrier,
or other commercial conveyance that delivers, ships, or causes to be shipped wine to a person
under the age of 21. It provides a second degree misdemeanor for a consumer who violates the
provisions of the bill by, for example, purchasing more than 12 cases of wine from winery
shippers during a calendar year. A person who provides a winery shipper with a false date of
birth would also commit a second degree misdemeanor.

The bill requires that at least 60 percent of wine produced by a Certified Florida Farm Winery
must be made from Florida agricultural products. The Commissioner of Agriculture may waive
this requirement in times of hardship. The bill authorizes the division to adopt rules to implement
and administer the provisions of the act.

This bill substantially amends the following sections of the Florida Statutes: 561.24, 561.54,
561.545, 564.045, and 599.004.

This bill creates section 561.222, F.S.

II. Present Situation:

Florida’s Three-Tier System
In the United States, the regulation of alcohol has traditionally been through what is termed the
“three-tier system.” The system requires that the manufacture, distribution, and sale of alcoholic
beverages be separated. Retailers must buy their products from distributors who in turn buy their
products from the manufacturers. Manufacturers cannot sell directly to retailers or directly to
consumers. The system is deeply rooted in the perceived evils of the “tied house” in which a bar
BILL: SB 854 Page 3

is owned or operated by a manufacturer or the manufacturer exercises undue influence over the
retail vendor.1

There are some exceptions to this regulatory system. The exceptions include allowing beer brew
pubs to manufacture malt beverages and to sell them to consumers,2 allowing individuals to
bring small quantities of alcohol back from trips out-of-state,3 and allowing in-state wineries to
manufacture and sell directly to consumers.4

In Florida, alcoholic beverages are regulated by the Beverage Law.5 These provisions regulate
the manufacture, distribution, and sale of wine, beer, and liquor via manufacturers, distributors,
and vendors.6 The Division of Alcoholic Beverage and Tobacco (division) within the
Department of Business and Professional Regulation is the agency authorized to administer and
enforce the Beverage Law.7

In a three-tier system, each license classification has clearly delineated functions. For example,
in Florida, only licensed vendors are permitted to sell alcoholic beverages directly to consumers
at retail.8 A manufacturer of wine may not be licensed as a distributor.9 Florida law also prohibits
any distributor or vendor from having an interest in any manufacturer.10

In Granholm v. Heald (Granholm),11 the U.S. Supreme Court held that states can regulate
alcoholic beverages through a three-tier system, but states cannot provide an exception to that
system that is limited to in-state businesses, i.e., in-state wine manufacturers.

Sales made outside the established three-tier systems by out-of-state alcoholic beverage
manufacturers and retailers to consumers in another state are commonly termed “direct
shipment.” The term also includes sales made directly to consumers by in-state manufacturers.

According to the Wine Institute,12 as of July 2010, 37 states and the District of Columbia allow
direct shipment of wine to consumers and many of these states require a license or permit.13

1
Erik D. Price, Time to Untie the House? Revisiting the Historical Justifications of Washington’s Three-Tier System
Challenged by Costco v. Washington State Liquor Control Board, a copy can be found at:
http://www.wsba.org/media/publications/barnews/2004/june-04-price.htm (last visited 4/9/2011).
2
See s 561.221(2), F.S., which permits the limited manufacture of beer by vendors (brew pubs).
3
See s. 562.16, F.S., which permits the possession of less than one gallon of untaxed alcoholic beverages when purchased by
the possessor out-of-state in accordance with the laws of the state where purchased and brought into the state by the
possessor.
4
See s. 561.221, F.S.
5
The Beverage Law means chs. 561, 562, 563, 564, 565, 567, and 568, F.S. See s. 561.01(6), F.S.
6
See s. 561.14, F.S.
7
Section 561.02, F.S.
8
Section 561.14(3), F.S. However, see discussion regarding the exception for certified Florida Farm Wineries in s. 561.221,
F.S.
9
See s. 561.24, F.S. However, see discussion regarding the exception for Florida manufacturers of wine in s. 561.221, F.S.
10
See s. 561.42, F.S.
11
Granholm v. Heald, 544 U.S. 460 (2005). Certiorari was granted at 541 U.S. 1062 (2004).
12
The Wine Institute is an advocacy and public policy association for California wine. It represents more than 1000 wineries
and affiliated businesses in California. See http://www.wineinstitute.org (Last visited 4/9/2011).
13
Florida is included in this list due to the injunction against enforcement of the provisions of ss. 561.54(1)-(2) and
561.545(1), F.S., in the Bainbridge case (see discussion below). Florida consumers are required by s. 212.06(8), F.S., to pay
BILL: SB 854 Page 4

Thirteen states prohibit direct shipment of wine to consumers.14 The Wine Institute includes
Florida among the states in which direct shipment is permitted but requires the payment of excise
taxes and consumer taxes.

Granholm v. Heald
In Granholm, consolidated cases from Michigan and New York, the U.S. Supreme Court held
that a state cannot allow in-state wineries to sell wine directly to consumers in that state while
simultaneously prohibiting out-of-state wineries from also selling wine directly to consumers.
The decision invalidated laws in Michigan and New York that discriminated between in-state
and out-of-state wine manufacturers in this manner.

Michigan and New York regulated the sale and importation of wine through three-tier systems
and required separate licenses for manufacturers, wholesalers, and retailers. These schemes
allowed in-state, but not out-of-state, wineries to make direct sales to consumers. The Court held
that this differential treatment violated the Commerce Clause, Art.I, s. 8, cl. 3 of the U.S.
Constitution, which provides that “[t]he Congress shall have Power…To regulate Commerce
with foreign Nations, and among the several States, and with the Indian Tribes…”

Michigan Law
Under the Michigan law in place at the time,15 wine producers were required to distribute their
wine through wholesalers. Michigan had an exception for the approximately 40 in-state wineries
that were eligible for a wine maker license that allowed the direct shipment of wine to in-state
consumers. Out-of-state wineries could apply for an out-of-state seller of wine license that
allowed them to sell to in-state wholesalers, but not directly to Michigan consumers.16

In the Michigan case, Michigan residents, joined by an out-of-state winery, sued Michigan
officials, claiming that the state’s laws violated the Commerce Clause. The state and an in-state
wholesalers association responded that the direct shipment ban was a valid exercise of
Michigan’s power under the Twenty-first Amendment of the U.S. Constitution. The Twenty-first
Amendment provides in s. 2 that “[t]he transportation or importation into any State, Territory, or
possession of the United States for delivery or use therein of intoxicating liquors, in violation of
the law thereof, is hereby prohibited.” The United States District Court for the Eastern District of
Michigan sustained the scheme, but the United States Court of Appeals for the Sixth Circuit
reversed,17 rejecting the argument that the Twenty-first Amendment immunizes state liquor laws
from Commerce Clause provisions and holding that there was no showing that the state could not
meet its policy objectives through nondiscriminatory means.

use taxes on their out-of-state purchases, but the excise tax on wine imposed by s. 564.04, F.S., requires payment of the
excise tax by manufacturers and distributors.
14
The Wine Institute, Direct Shipment Laws by State for Wineries (July 1, 2010), available at
http://www.wineinstitute.org/files/direct_shipping_laws_map.pdf (Last visited 4/9/2011).
15
See Michigan Comp. Laws Ann. ss. 436.1109(1), 436.1305, 436.1403, and 436.1607(1) (West 2000).
16
Effective December 16, 2005, Michigan amended its law to allow direct shipment of wine under certain circumstances,
P.A. 2005, No. 268. See Mich. Comp. Laws Ann. s. 436.1203. Michigan’s direct wine shipping requirements can be found at
http://www.michigan.gov/documents/LC-MW102_154466_7.DirectShipperRequirements.pdf (Last visited 4/9/2011). It
allows for a winery anywhere in the US that obtains a direct shippers permit from the State of Michigan to ship up to 1,500
cases (9 liters per case) of wine annually to Michigan consumers. The winery must have an approved direct shipper's permit,
register with the Michigan Department of Treasury, and pay sales and excise taxes. The license fee is $100.
17
Heald v. Engler, 342 F.3d 517 (6th Cir. 2003).
BILL: SB 854 Page 5

New York Law
New York’s licensing scheme was somewhat different from Michigan’s.18 It also provided for
distribution through the three-tier system and made exceptions for in-state farm wineries.
Wineries that produced wine only from New York grapes could apply for a license that allowed
direct shipment to in-state consumers. An out-of-state winery could ship directly to consumers
only if the winery became licensed as a New York Winery, established a distribution operation in
New York, and had a physical presence in the state, i.e., a warehouse, office, or storeroom.
Moreover, out-of-state wineries that established the requisite in-state presence were still not
eligible for the farm winery license that provides the most direct means of shipping to New York
consumers. Instead, they had to obtain a separate license that authorized direct shipping to
consumers. New York law did not require a separate direct shipping license for its farm
wineries.19

In the New York case, out-of-state wineries and their New York customers filed suit against state
officials, seeking a declaration that the State’s direct shipment laws violated the Commerce
Clause. State liquor wholesalers and retailers’ representatives joined in support of the state. The
United States District Court for the Southern District of New York granted the plaintiffs’
summary judgment against the state, but the United States Court of Appeals for the Second
Circuit reversed, holding that New York’s laws fell within the state’s powers under the Twenty-
first Amendment.20

Supreme Court Decision
The United States Supreme Court consolidated the Michigan and New York cases into a single
case to address this issue:
Does a State regulatory scheme that permits in-state wineries to directly ship
alcohol to consumers but restricts the ability of out-of-state wineries to do so
violate the dormant Commerce Clause in light of Section 2 of the Twenty-first
Amendment?21

The U.S. Supreme Court held in Granholm that:
the laws in both States discriminate against interstate commerce in violation of the
Commerce Clause, Art. I, s. 8, cl. 3, [United States Constitution] and that the
discrimination is neither authorized nor permitted by the Twenty-first
Amendment. Accordingly, we affirm the judgment of the Court of Appeals for the
Sixth Circuit, which invalidated the Michigan laws; and we reverse the judgment
of the Court of Appeals for the Second Circuit, which upheld the New York
laws.22
18
See N. Y. Alco. Bev. Cont. Law Ann. ss.76-a(3) and 76-a(6)(a) and ss. 3(20-a) and 3(37) (West Supp. 2005).
19
New York amended its law, effective August 11, 2005 to provide for a Direct Shipper’s License under certain
circumstances. See N. Y. Alco. Bev. Cont. Law Ann. s. 79-c. To be eligible for a license, the applicant out-of-state wine
manufacturer must be located in a state that allows New York State wine manufacturers substantially similar direct wine
shipping privileges. The applicant must have a tax authority certificate, register as an alcoholic beverage distributor, and
consent to New York State jurisdiction, among other requirements. The direct wine shipper may not ship more than 36 cases
of wine (9 liters per case) to a New York resident. The license fee is $125 for an interstate direct shipper’s license.
20
Swedenburg v. Kelly, 358 F.3d 223 (2nd Cir. 2004).
21
Granholm, 544 U.S. at 472.
22
Granholm, 544 U.S. at 466.
BILL: SB 854 Page 6

Granholm explicitly noted that states may regulate the distribution and sale of wine via a three-
tier system of licensed manufacturers, distributors, and retailers. The court also noted that states
may prohibit the direct shipment of alcoholic beverages to consumers.23 However, states may not
impose requirements on interstate commerce that discriminate in favor of in-state interests.
States can regulate imported wine only to the same extent and in the same manner that they
regulate domestically produced wine. The court applied the rule that the court must still consider
whether a state’s regulatory regime “advances a legitimate local purpose that cannot be
adequately served by reasonable nondiscriminatory alternatives.”24

In Granholm, the court noted that New York could provide adequate safeguards for direct
shipping of wine with licensing and self-reporting, because these methods were sufficient for
wine distributed through the three-tier system. The court also noted that licensees could be
required to submit regular sales reports and remit taxes. The court observed that licensing,
reporting, and tax requirements have been used by other states that permit direct shipping and
that these states have reported no problems with tax collection.25 The court also noted that this is
the approach sanctioned by the National Conference of State Legislatures in their Model Direct
Shipping Bill.

Florida’s Direct Shipping Prohibition
Section 561.545(1), F.S., prohibits the direct shipping of all alcoholic beverages to consumers
from out-of-state. It also prohibits common carriers from transporting alcoholic beverages from
an out-of-state location to anyone in this state who does not hold a valid manufacturer,
wholesaler, or exporter’s license, or who is not a state-bonded warehouse.

A first violation of this prohibition results in the issuance of an order to show cause why a cease
and desist order should not be issued. A violation within two years of a cease and desist order, or
within two years of a previous conviction, constitutes a felony of the third degree.

Section 561.545(5), F.S., provides an exception for the direct shipping of sacramental alcoholic
beverages to bona fide religious organizations as authorized by the division. It also exempts
registered exporters.

Section 561.54(1), F.S., prohibits deliveries of alcoholic beverages from out-of-state by common
or permit carriers, operators of privately owned cars, trucks, buses, or other conveyances, except
to manufacturers, wholesalers, or exporters, or bonded warehouses in this state. Section
561.54(2), F.S., provides a cause of action for any licensee who is aggrieved by a violation of
this prohibition. The court must assess damages equal to three times the amount of delivery
charges or the fair market value of the merchandise unlawfully brought into the state. The court
must also award the plaintiff its costs and reasonable attorney’s fees.

23
The court’s analysis is based, in part, upon the Webb-Kenyon Act, 27 U.S.C. s. 122, which prohibits the shipping of
alcoholic beverages into a state in violation of that states laws, and the Twenty First Amendment of the U.S. Constitution.
24
See Granholm, 544 U.S. at 489, quoting New Energy Co. of Ind. v. Limbach, 486 U.S. 269, 278 (1988).
25
See Granholm, 544 U.S. at 491.
BILL: SB 854 Page 7

Florida’s prohibition against direct shipping is limited to the direct shipping of alcoholic
beverages from out-of-state to Florida; it does not prohibit direct shipping from a Florida winery
to another state or from a Florida winery to a person in Florida.

Sales by Florida Wineries
Florida law provides an exception to the general prohibition against manufacturers of alcoholic
beverages selling directly to consumers. Florida permits in-state wine26 manufacturers to sell
their wines directly to consumers. The premises licensed to conduct vendor sales must be
situated on property contiguous to the manufacturing process.27 Florida also permits wineries
that are certified by the Department of Agriculture and Consumer Services as a Florida Farm
Winery to conduct tastings and sales of wine directly to consumers at Florida fairs, trade shows,
expositions, and festivals.28

Florida wine manufacturers may also function in all three tiers of the state’s regulatory system.
Wineries may distribute any alcoholic beverages, including beer and liquor.29 Although
s. 561.24, F.S., prohibits manufacturers from being licensed as a distributor, this prohibition does
not apply to Florida wineries.

Certified Florida Farm Wineries
To qualify as a certified Florida Farm Winery, a winery must meet each of the following
standards:
1. Produce or sell less than 250,000 gallons of wine annually.
2. Maintain a minimum of 10 acres of owned or managed vineyards in Florida.
3. Be open to the public for tours, tastings, and sales at least 30 hours each week.
4. Make annual application to the department for recognition as a Florida Farm Winery, on
forms provided by the department.
5. Pay an annual application and registration fee of $100.30

According to industry representatives, many Florida wines are blended with citrus or grapes
grown outside the state. Current law does not require that wines from certified Florida Farm
Wineries must consist of any particular percentage of Florida-grown grapes or other Florida-
grown agriculture products.

Bainbridge v. Turner
Florida’s direct shipping prohibition was challenged in the case of Bainbridge v. Turner by wine
consumers and out-of-state wineries.31 This law suit challenged Florida’s statutory scheme

26
Section 564.01(1), F.S., defines the term “wine” to mean:
all beverages made from fresh fruits, berries, or grapes, either by natural fermentation or by natural
fermentation with brandy added, in the manner required by the laws and regulations of the United States, and
includes all sparkling wines, champagnes, combination of the aforesaid beverages, vermouths, and like
products. Sugar, flavors, and coloring materials may be added to wine to make it conform to the consumer’s
taste, except that the ultimate flavor or the color of the product may not be altered to imitate a beverage other
than wine or to change the character of the wine.
27
See s. 561.221(1), F.S.
28
See s. 561.221(2), F.S.
29
See s. 561.14(1), F.S.
30
See s. 599.004, F.S., which establishes the Florida Farm Winery program within the Department of Agriculture and
Consumer Services.
BILL: SB 854 Page 8

prohibiting out-of-state wineries from shipping their products directly to Florida consumers
while permitting in-state wineries to do so.

Before the Supreme Court issued its decision in Granholm, the case resulted in two written
federal appellate court opinions. In the first opinion, Bainbridge v. Martelli (Bainbridge I),32 the
United States District Court for the Middle District of Florida held that s. 561.54, F.S., and the
statutory scheme that bars direct shipping violated the Commerce Clause. In Bainbridge v.
Turner (Bainbridge II),33 the United States Eleventh Circuit Court of Appeals held that, if
Florida could demonstrate that its statutory scheme was closely related to raising revenue and
was not a pretext to mere protectionism, Florida’s statutory scheme could be upheld against a
Commerce Clause challenge. The appellate court remanded the case to the district court for
further consideration of this issue.

The case was held in abeyance because of the pending cases before the U.S. Supreme Court. On
August 5, 2005, the United States District Court for the Middle District of Florida issued an
order finding ss. 561.54(1)-(2) and 561.545(1), F.S., violated the Commerce Clause and were
therefore unconstitutional under the authority in Granholm, and enjoined the enforcement of
these provisions.34 The court found that these statutes discriminate against out-of-state wineries
by prohibiting them from selling and delivering wine directly to customers in Florida when in-
state wineries are not so prohibited.

Primary American Source of Supply Brand Registration
Section 564.045, F.S., requires registration of wine brands for the purpose of tax revenue control.
Before being shipped, sold, or offered for sale to a distributor or importer in Florida, a wine
brand must be registered by the brand’s “primary American source of supply,” which
s. 564.045(1), F.S., defines as the:
manufacturer, vintner, winery, or bottler, or their legally authorized exclusive
agent, who, if the product cannot be secured directly from the manufacturer by an
American distributor, is the source closest to the manufacturer in the channel of
commerce from whom the product can be secured by an American distributor, or
who, if the product can be secured directly from the manufacturer by an American
distributor, is the manufacturer. It shall also include any applicant who directly
purchases vinous beverages from a manufacturer, vintner, winery, or bottler who
represents that there is no primary American source of supply for the brand and
such applicant must petition the division for approval of licensure.

The annual license fee for each brand is $15. All Florida wineries that conduct direct sales to
consumers must register the brands they sell and pay the fee for each brand. According to the
Wine Institute, some states require brands and labels to be registered before shipping those
brands to consumers in the state.

31
Bainbridge v. Turner, No. 8:99-CV-2681-T-27TBM (M.D. Fla.).
32
Bainbridge v. Martelli, 148 F.Supp.2d 1306 (M.D. Fla. 2001).
33
Bainbridge v. Turner, 311 F.3d 1104 (11th Cir. 2002).
34
Bainbridge v. Turner, No. 8:99-CV-2681-T-27TBM (M.D. Fla. August 5, 2005).
BILL: SB 854 Page 9

License Fees
Under the Beverage Law, Florida wine manufacturers pay a state license tax for a manufacture’s
license, a distributor’s license if they distribute their wines, and a vendor’s license if they sell
their wines at retail. Section 564.02(2)(a), F.S., imposes a license tax of $1,000 for a license to
engage in the manufacturing or bottling of wines and nothing else. Section 561.02(2)(b), F.S.,
imposes a license tax of $1,250 to distribute wines, malt beverages, and fortified wines. Section
564.02(1), F.S., imposes the license taxes for vendors who sell wine.

Vendor licenses are divided into two types: vendors operating a business where beverages are
sold for consumption on the premises, and vendors operating a business where beverages are
sold only for consumption off the premises. The vendor license tax for consumption off the
premises is equal to 50 percent of the license tax for the applicable vendor’s license for
consumption on the premises. The license tax for consumption on the premises is dependent on
the population size of the county where the vendor’s premises is located. These license taxes
range from $120 for counties having a population of less than 25,000 to $280 for counties having
a population of over 100,000. According to industry representatives, some wine manufacturers
have a consumption on the premises license for sales and wine tastings at the winery.

If licensed as a vendor, a manufacturer would also be subject to the annual surtax imposed by
s. 564.025, F.S., which is equal to 40 percent of the license fee for each wine vendor, regardless
of the wine’s alcoholic content.

Federal Wine Producer Permits
The Federal Alcohol Administration Act (FAA Act)35 requires a basic permit issued by the
Alcohol and Tobacco Tax and Trade Bureau (Tax and Trade Bureau or bureau) within the U.S.
Department of the Treasury (formerly the Bureau of Alcohol, Tobacco, and Firearms) to engage
in the business of importing into the United States distilled spirits, wine, or malt beverages. A
basic permit is required to engage in the business of producing distilled spirits, producing wine,
rectifying or blending distilled spirits or wine, or bottling, or warehousing and bottling, distilled
spirits in the business of distilling spirits or producing wine, and for persons who engage in the
business of purchasing for resale at wholesale distilled spirits, wine or malt beverages. The Tax
and Trade Bureau, as of April 2011, lists 7.259 active federal basic permits in the U.S. for wine
premises (wineries). Retailers and beer manufacturers (brewers) are not required to obtain a basic
permit under the FAA Act.

Interim Project 2006-146 - Direct Shipment of Wine to Florida Consumers
The Senate Committee on Regulated Industries was assigned Interim Project Report 2006-146 to
study the issues presented by the direct shipment of wine to Florida consumers by unlicensed
out-of-state persons.36 This study included a review of the status of the current law and surveying
the concerns of the affected interests. The interim project resulted in the recommendation that the
Legislature either continue to prohibit all direct shipment of wines into Florida and eliminate the
ability of in-state wine manufacturers to sell wine directly to consumers, or legalize the direct
shipment of wine and regulate the practice.

35
See Federal Alcohol Administration Act, codified at 27 U.S.C. s. 203. See also, 27 C.F.R. part 1subpart C, section 1.20.
36
See Direct Shipment of Wine to Florida Consumers, Interim Report No. 2006-146, Senate Committee on Regulated
Industries, October 2005.
BILL: SB 854 Page 10

The study recommended that a single license classification to license out-of-state and in-state
direct shippers of wines should be created and that licensure should be required as a condition of
legal direct shipping. The study recommended the following licensure options:
Licensure may be limited to persons who operate a winery located in the United States
and hold all state and federal permits necessary to operate the winery;
The Legislature may permit persons operating a winery outside the United States to
qualify for licensure;
In addition, the Legislature may permit non-manufacturers, e.g., out-of-state retailers, to
be licensed direct shippers; and
If the Legislature opts to limit licensed direct shippers to wine manufacturers, it may
require that a winery licensed as a direct shipper must produce or sell less than 250,000
gallons of wine annually.

In addition to licensure, the study recommended consideration of the following options for
regulating direct shipment of wine:
Require, as a condition of licensure, that out-of-state direct shippers must satisfy all of the
minimum license qualification requirements required under the Beverage Law for a
Florida alcoholic beverage license;
Require, as a condition of licensure, that the license holder submit to the jurisdiction of
the regulatory agency and the courts of this state in regards to compliance with the laws
of this state;
Limit direct shipment sales to sales for personal consumption, and prohibit the resale at
retail of wines purchased directly from a direct shipper;
Require age verification procedures for the point of delivery, point of sale, or both, that,
at minimum, require that an adult provide proof of age with a valid photographic
identification at the time of the delivery;
Require that containers of wine shipped directly to consumers must be conspicuously
labeled with words that identify them as containing alcohol requiring the signature of a
person 21 years of age or older before delivery can be made;
Impose specific shipping requirements on common carriers, including requiring that the
common carrier must require that the recipient of wine provide proof of age, and that the
recipient of the wine must sign an acknowledgment of receipt. The common carrier
should also be required to refuse delivery if the recipient refuses to provide proof of age;
Require that direct shippers remit to the state all applicable Florida excise and sales taxes;
Require that direct shippers register all wine brands before shipping, selling, or offering
for sale any wine to a consumer in Florida;
Require payment of a license fee comparable to the fee required for an in-state wine
vendor;
Require that direct shippers maintain records of sales and shipments of wine into Florida,
and require that the direct shippers permit state regulators to have access to these records;
Require that direct shippers pay all attorney’s fees and costs in any action to collect
unpaid taxes;
Require monthly reporting to the Division of Alcoholic Beverage and Tobacco that
details all shipment of wine into Florida, including the number of bottles shipped, to
whom the wine was shipped, the identity of the common carrier making the shipment,
and the brands shipped;
BILL: SB 854 Page 11

Require periodic audits of direct shippers by the division, that all required reports should
be signed by a certified public accountant, or both; and
Require that direct shippers pay all travel related costs necessary to conduct a compliance
audit of an out-of-state direct shipper if the state auditor must travel out-of-state to
conduct the audit.

III. Effect of Proposed Changes:

Section 1 creates s. 561.222, F.S., to provide for the licensure of winery shippers.

Legislative Intent
Section 561.222(1), F.S., sets forth the legislative intent. The bill states that strict regulation of
the sale of alcoholic beverages promotes temperance by discouraging consumption by underage
persons, the abusive consumption by adults, and the collection of excise and sales taxes. The bill
also reaffirms the legislative intent that the direct shipment of beer and spirits to residents of this
state remains prohibited.

Licensure Requirements
Section 561.222(2), F.S., establishes the license requirements for a winery shipper license. It
provides that a winery may directly ship wine to a resident of this state only with a winery
shipper’s license.

Section 561.222(2)(a), F.S., provides that, to qualify for the license, a winery must:
Not manufacture or sell more than 250,000 gallons of wine per year;
Ship wines that the winery manufactures;
Obtain a winery shipper’s license.

Licensed wineries may only ship to residents of this state that are at least 21 years of age for that
person’s personal use and not for resale. The bill does not specifically prohibit retail vendors
from purchasing wine from a winery shipper.37
To qualify for the license, a winery shipper must also:
Hold a wine producer basic permit issued in accordance with the Federal Alcohol
Administration Act.38
Hold a current wine manufacturer’s license from the state in which it manufacturers
wine; and
Hold a current license as a Primary American Source of Supply under s. 564.045, F.S.
and register with the division all brands shipped.

37
Section 561.14(3), F.S., prohibits a retail vendor from purchasing an alcoholic beverage from a person that is not licensed
as a vendor, manufacturer, bottler, or distributor under the Beverage Law. It also prohibits a retail vendor from importing, or
engaging in the importation of, any alcoholic beverages from places beyond the limits of the state. It is not clear whether
purchases by a retail vendor from an out-of-state winery for the purpose of resale to consumers constitutes the importation of
wine under the beverage law because s. 561.14(3), F.S., defines acting as an importer as selling, “or to cause to be sold,
shipped, and invoiced, alcoholic beverages to licensed manufacturers or licensed distributors, and to no one else, in this
state.”
38
See Federal Alcohol Administration Act, codified at 27 U.S.C. s. 203.
BILL: SB 854 Page 12

The bill also requires that applicants for a winery shipper’s license must qualify for licensure
under s. 561.15, F.S.39 It is uncertain what effect the requirement to meet the license qualification
requirements under s. 561.15, F.S., would have on the availability of out-of-state wines from out-
of-state wineries. Based on a review of federal wine permit requirements, and the wine
manufacturer license requirements in California, New York, Oregon, and Washington,40
Florida’s alcoholic beverage license requirements appear to be more extensive than those states’
minimum licensure requirements. For example, California does not have a specific minimum age
requirement. California law requires that a licensee not have any felony conviction or conviction
related to its beverage law, but California law does not set specific time periods.41 According to
the California Department of Alcoholic Beverage Control, convicted felons may be licensed by
the department if they can demonstrate that they have been rehabilitated. It is not clear whether a
felony in another state would disqualify an applicant in California. Whether the applicant is a
rehabilitated felon is within the discretion of the California Department of Alcoholic Beverage
Control.

The bill requires a license application under s. 561.17, F.S., for licensure as a winery shipper,
and provides that the information on the license application must be in the same information
required by the division for licensure as a wine manufacturer. The winery shipper license
application must include a copy of the following:
The current basic permit as a wine producer and blenders permit issued in accordance
with the Federal Alcohol Administration Act;
The current state license to manufacture wine;
Appointment of a registered agent in Florida for acceptance of service of process, which
must be maintained and notification to the division of any change in the appointment;
A sales tax registration number issued by the Department of Revenue;
An affirmation of consent to the jurisdiction in the court of Florida and its agencies for
the enforcement of s. 561.222, F.S., and any related laws or rules, including actions by
third parties for violations of this section;
A surety bond with the division for payment of taxes. The bill requires a surety bond in
the amount of $5,000, but the division may accept a lesser bond if the volume of business
done by the winery shippers is such that a lesser bond would be adequate to secure tax
payments. If the winery already has a surety bond on file with the division an additional
bond is not required. The bill further provides that the division may not accept a bond of
less than $1,000. It deems the surety bond currently on file with the division pursuant to
s. 561.37, F.S., to comply with this provision; and
Payment of a $250 license fee, which must be renewed by August 1 of each year by
paying a renewal fee of $250.

39
Section 561.15, F.S., sets forth the basic qualifications for an alcoholic beverage license. To qualify, an applicant must be
of good moral character and not less than 21 years of age. Section 561.15, F.S., also prohibits licensure and licensure renewal
to persons convicted of:
Any beverage law violation in this state, any other state, or the United States in the past five years;
Any felony in this state, any other state, or the United States in the past fifteen years; or
Any criminal violation of the controlled substance act of this state, any other state, or the United States.
40
According to the Wine Institute, these states represent approximately 98 percent of its member wineries.
41
Cal. Bus. Prof. Code, ss. 23952 and 23958.
BILL: SB 854 Page 13

Regarding the requirement that an applicant must consent to jurisdiction of the Florida courts for
actions by third parties, it is not clear that s. 561.222, F.S., provides a cause of action that may be
maintained by a third party.

Section 561.222(2)(b), F.S., specifies the following conditions under which the division may
issue or renew a winery shipper license:
Not violating the conditions of licensure, requirements, or limitations in s. 561.222, F.S.;
Producing or selling less than 250,000 gallons of wine annually;
Not having a subsidiary or being otherwise affiliated winery that manufactures more than
250,000 gallons of wine annually;
Not having an appointed distributor in this state, unless the winery gives the distributor
one-year’s notice of its intent to obtain a winery shipper’s license or the winery provides
to the division a copy of the applicant’s contract with the appointed distributor showing
that the winery does not violate the requirements of the law.

The term “affiliated wineries” is not defined by the bill or in the Florida Statutes.

Age Verification and Shipping Requirements
Section 561.222(3)(a), F.S., provides age verification and shipping requirements for winery
shippers and common carriers who ship wines from a winery shipper.

The bill requires that winery shippers verify the purchaser’s age at the point of purchase before
completing a sale and requires that the winery shippers refuse to sell wine to any person younger
than 21 years of age. The bill does not specify a method of verification.

The bill provides a labeling requirement for each box of wine shipped directly to a resident of
this state. Winery shippers must ensure that each box is conspicuously labeled with the following
information:
That the package contains alcohol;
The recipient must be at least 21 years of age; and
The signature of the recipient is required.

The bill requires that winery shippers must refuse to ship or cause to be shipped more than 12
cases containing more than nine liters each of its wine per calendar year to any “one household
address” and “any household member’s work address” in this state. The bill also prohibits
consumers from purchasing more than 12 cases42 containing more than nine liters each of its
wine per calendar year.

The bill uses the terms “household,” “household address,” and “household member” but does not
define the terms.43 It is not clear whether the use of alternate terms may lead to ambiguity and

42
According to an industry representative, a standard case contains 12 bottles of wine, each bottle holds 750 milliliters,
which equals 9 liters of wine per standard case.
43
Section 196.075(1)(a), F.S., relating to the homestead exemption for persons 65 and older, defines the term household to
mean “a person or group of persons living together in a room or group of rooms as a housing unit, but the term does not
include persons boarding in or renting a portion of the dwelling.” Section 409.509(4), F.S., defines a “household” as an
individual or group of individuals living in a dwelling unit defined by the Department of Community Affairs.
BILL: SB 854 Page 14

difficulty in enforcement. For example, if more than one household shares the same address,
each household at the single address may be limited to purchasing less than the maximum
allowable wine per year because of the bill’s delivery restriction. Additionally, it is unclear of the
effect of the purchase of wine by a business would not also constitute a “household member’s
work address,” and thus affect the purchase of wine by a business.

The winery shippers and common carriers must also require, before delivery, the signature of a
person 21 years of age or older using one of the valid forms of identification specified in the bill,
including a valid Florida driver’s license or identification card,44 an identification card issued by
this state or another state, a passport, or United States armed services identification card.

As noted previously, the bill does not specifically prohibit the purchase of wine by alcoholic
beverage vendors from a winery shipper. Although the bill requires that the sale of wines under
s. 561.222, F.S., must be for personal use and not for resale, the bill does not specifically prohibit
the purchase by vendors from winery shippers or the resale by vendors of wine purchased from a
winery shipper. It is a second degree misdemeanor for any person to sell alcoholic beverages
without an alcoholic beverage license issued by the division.45 It is not clear whether the bill
prohibits licensed vendors from receiving wine from a licensed winery shipper. Section
561.14(3), F.S., prohibits retail vendors from purchasing or acquiring “in any manner for the
purpose of resale any alcoholic beverages from any person not licensed as a vendor,
manufacturer, bottler, or distributor under the Beverage Law.” The bill does not clarify whether a
winery shipper is a manufacturer under the meaning of the prohibitions in s. 561.14(3), F.S., and
whether a vendor is prohibited from purchasing wine from a winery shipper.46

Section 561.222(3)(b), F.S., requires that licensed winery shippers obtain the common carrier’s
written policy declaring that the common carrier shall, before delivery, adhere to the age
verification requirements of this bill.

Section 561.222(3)(c), F.S., requires that a winery shipper must offer to its distributor for
purchase and sale per calendar year the same brands and quantities of wine shipped per calendar
year under this bill.

Taxes
Section 561.222(4), F.S., requires that winery shippers pay monthly taxes to the Department of
Revenue and all sales and excise taxes on wine to the division for sales in the preceding month.
The bill provides that taxes shall be calculated as if the sale took place in this state and calculated
as if the sales took place at the location where the delivery occurred. The bill requires the
collection and payment of the discretionary sales surtaxes tax (local option sales tax), and that
those funds must be deposited into the Discretionary Sales Surtax Clearing Trust Fund described
in s. 212.054(4)(c), F.S., and distributed as provided in that provision.

44
See s. 322.051, F.S.
45
Section 562.12, F.S.
46
Although s. 561.14(3), F.S., also prohibits the importation of alcoholic beverages by a retail vendor from places beyond the
limits of the state, it is not clear whether purchase from an out-of-state winery shipper would constitute importation. The
importation prohibition in s. 561.14(3), F.S., would not apply to purchases from in-state winery shippers. Therefore, the
application of the importation prohibition to out-of-state winery shippers may raise constitutional concerns related to the
disparate treatment of in-state and out-of-state winery shippers.
BILL: SB 854 Page 15

In current law, s. 212.054(4)(b), F.S., requires that surtax collected by dealers located in the
county must be returned to that county. The proceeds are transferred to the Discretionary Sales
Surtax Clearing Trust Fund. The provision in the bill would conflict with s. 212.054(4)(b), F.S.,
to the extent it would require the in-state wineries not to return the collect discretionary tax to the
county in which they are located.47

Under current law, s. 212.0596, F.S, requires dealers making mail order sales in Florida to
collect and remit Florida sales tax pursuant to s. 212.15, F.S. Section 212.15, F.S., provides for
the monthly collection of sales tax and provides that the sales are due to the department on the
first day of the succeeding month and are delinquent on the 21st day of such month.

Current law, in s. 212.0596(6), F.S., provides that dealers making mail order sales48 in Florida
are exempt from collecting and remitting any local option surtax unless the dealer is located in a
county that imposes a surtax, the order is placed through the dealer’s location in such county, and
the property purchased is delivered into such county, or into another county that imposes a
surtax. The bill would exclude winery shippers’ sales from this exemption.

Reporting and Recordkeeping Requirements
Section 561.222(5), F.S., requires that winery shippers report to the division, on a monthly basis,
the following information regarding shipments during the previous month to residents of this
state:
Whether any wine was shipped;
Quantity and brands of wine shipped;
Total price of wine shipped;
Amount of excise tax paid to the division; and
Any other information that the division determines necessary to enforce this section.

This report is not required if the licensee files a monthly report pursuant to s. 561.55, F.S., that
contains all the required information.49

Section 561.222(6), F.S., requires each winery shipper licensee to maintain records,
electronically or otherwise, for at least three years after the date of delivery. The records must be
available for inspection by the Department of Revenue (DOR) and division upon request. The
bill requires that winery shippers be audited at least once per year. It also requires that winery
shippers furnish any documents within 30 days after a request is made.

47
See DOR 2011 Bill Analysis (February 16, 2011), on file with the committee.
48
Section 212.0596(1), F.S., defines “mail order sale” to include tangible personal property ordered by mail or any other
means of communication.
49
In-state winery shippers would be required to file monthly reports under ss. 561.55 and 561.222, F.S. Under s. 561.55, F.S.,
licensed manufacturers are required to make monthly reports showing the amount of:
(a) Beverages manufactured or sold within the state and to whom sold;
(b) Beverages imported from beyond the limits of the state and to whom sold;
(c) Beverages exported beyond the limits of the state, to whom sold, the place where sold, and the address of the
person to whom sold.
BILL: SB 854 Page 16

The bill specifies the records that must be maintained by a winery shipper regarding wines
shipped to residents of Florida, including:
The license issued under s. 561.222, F.S.;
Records of all wines ordered, sold, or shipped, the purchasers’ names, address, and dates
of birth of the purchasers,
The name of the person to whom the wine was shipped, and the date of the shipment,
quantity, and brands shipped; and
All contracts with the common carriers for delivery, including the carrier’s written wine
delivery policy.

Common Carrier Requirements
Section 561.222(7), F.S., sets forth requirements for common carriers that deliver wines for the
winery shippers. The bill requires that the common carriers:
Register with the division and acknowledge the intent to deliver wines and the
requirements for delivery of wine shipments;
Maintain a written wine delivery policy as specified in the bill;
Refuse to deliver wine to recipients who appear to be under 21 years of age and who do
not present a valid identification; and
Obtain the recipient’s signature.

The bill requires that the common carriers maintain such records for three years, and make the
records available for inspection upon request by the division.

Penalties
Section 561.222(8), F.S., provides that the division may suspend or revoke a winery shipper’s
license or impose a fine for a violation of this section under its authority in s. 561.29, F.S., and
any other cause of action authorized in that section. Section 561.29, F.S., provides various
grounds for the suspension, revocation, or levying a fine against an alcoholic beverage licensee,
including violations related to failure to maintain qualifications, violations of specified laws in
other jurisdictions, and failure to comply with an order of the division.

Section 561.222(8), F.S., imposes criminal penalties. It provides a second degree misdemeanor
violation for any winery shipper that ships or causes to be shipped wine to a person in this state
under the age of 21.50 This criminal penalty applies to a “winery shipper licensee.” If a winery
that is not licensed under s. 561.222, F.S., ships wine to a Florida consumer under 21 years of
age, the criminal penalty does not appear to apply.51

The bill provides a second degree misdemeanor violation for any common carrier, permit carrier,
or other commercial conveyance that delivers wine directly to any person in this state who is
under 21 years of age.

50
Section 775.082(4)(b), F.S., provides that a second degree misdemeanor is punishable by imprisonment for a finite term
not longer than 60 days. Section 775.083(1)(e), F.S., provides that a second degree misdemeanor could also be punishable by
a fine of not more than $500.
51
Section 562.11, F.S., prohibits the selling, giving, or serving of an alcoholic beverage to a person under 21 years of age.
The penalty is a misdemeanor of the second degree.
BILL: SB 854 Page 17

A second degree misdemeanor violation is also provided for persons who obtain wine from a
winery shipper in violation of s. 561.222, F.S. the only prohibition against obtaining wine in s.
561.222, F.S., is the prohibition against consumers purchasing more than 12 cases of wine from
winery shippers per calendar year. Under this penalty provision, a consumer could be charged
with a second degree misdemeanor if he or she purchases more than 12 case of wine from winery
shippers during a calendar year.

A person who provides a winery shipper with a false date of birth also commits a second degree
misdemeanor.

Rulemaking
Section 561.222(9), F.S., authorizes the division to adopt rules to administer and enforce the
section.

Primary American Source of Supply Brand Registration
Section 5 amends s. 564.045, F.S., to require winery shippers applying for licensure as a primary
American source of supply brand registration to meet other licensure requirements in ss. 561.15
and 561.17, F.S.

Other Shipping Provisions
The bill amends the shipping prohibitions in ss. 561.54 (Section 3) and 561.545 (Section 4), F.S.,
to exempt direct shipment of wine by licensed winery shippers to persons 21 years of age or
older.

Florida Farm Wineries
Section 2 amends s. 561.24(5), F.S., to provide that any manufacturer of wine holding a license
as a distributor on July 1, 2011, shall be entitled to renewal of that license. The bill deletes the
provision that this subsection does not apply to certified Florida Farm wineries. The effect of this
provision is to restrict any certified Florida Farm Winery from being licensed as a distributor if
the winery is not licensed as a distributor on the effective date of this act.

Section 6 amends s. 599.004, F.S., to revise the qualifications for a Florida Farm Winery to
replace the term “vineyards” with a reference to lands in Florida which produce commodities
used in the production of wine. It also requires that at least 60 percent of wine produced by a
Certified Florida Farm Winery shall be made from Florida agricultural products. The bill
authorizes the Commissioner of Agriculture to waive this requirement in times of hardship. The
bill does not define hardship.

Severability
Section 7 provides for severability if any provision of the act or its application to any person or
circumstance is held invalid.

This provision does not reference the severability of any specific provisions in the bill. As noted
in the Manual for Drafting General Bills for the Florida Senate, the “[c]ourts do not need a
severability section to sever unconstitutional provisions or applications and allow the other
BILL: SB 854 Page 18

provisions or applications to stand.”52 If a severability clause is included in a bill, the standard
severability clause provides:

If any provision of this act or the application thereof to any person or circumstance is held
invalid, the invalidity shall not affect other provisions or applications of the act which can be
given effect without the invalid provision or application, and to this end the provisions of this act
are declared severable.53

Effective Date
Section 8 provides an effective date of July 1, 2011.

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

None.

B. Public Records/Open Meetings Issues:

None.

C. Trust Funds Restrictions:

None.

D. Other Constitutional Issues:

Gallonage Limits
This bill raises Commerce Clause concerns under the U.S. Constitution because it
prohibits direct shippers who produce more than 250,000 gallons of wine per year from
being licensed to directly ship wine to Florida consumers. According to representatives
for Florida producers, none of Florida’s certified farm wineries produce more than the
250,000 gallons annually. Consequently, the limitation would only affect out-of-state
wineries, and the bill may be considered as discriminating against out-of-state direct
shippers because it provides for the regulation of out-of-state direct shippers of wine in a
manner that differs from the requirements imposed on in-state wineries.

In Granholm v. Heald,54 the U.S. Supreme Court held that laws in New York and
Michigan that discriminated between in-state and out-of-state wineries in the regulation
of the direct shipment of wine were unconstitutional. The Supreme Court held that these
states’ laws discriminated against interstate commerce in violation of the Commerce
Clause, Art. I, s. 8, cl. 3 of United States Constitution and that the discrimination was not
authorized or permitted by the Twenty-first Amendment. The court stated that when a
state statute directly regulates or discriminates against interstate commerce, or when its

52
Manual for Drafting General Bills, Legal Research and Drafting Services, Office of the Secretary of the Senate, The
Florida Senate (5th Edition, 1999) at page 50.
53
Id.
54
Granholm, 544 U.S. at n. 19.
BILL: SB 854 Page 19

effect is to favor in-state economic interests over out-of-state interests, the court has
generally struck down the statute without further inquiry. In determining the extent to
which states may impose requirements on interstate commerce that discriminate in favor
of in-state interests, Granholm applied the rule that states can generally regulate imported
wine only to the same extent and in the same manner that they regulate domestically
produced wine. If there is any disparate treatment, the court must consider whether a
state’s regulatory regime “advances a legitimate local purpose that cannot be adequately
served by reasonable nondiscriminatory alternatives.”55 It is not clear what “legitimate
local purpose” is served by the 250,000 gallon limit that is not discriminatory in favor of
in-state interests.

Alternatively, a gallonage cap may not violate the commerce clause as interpreted in
Granholm if the cap is applied even-handedly to all in-state and out-of-state wineries. If
limited to the issue of discrimination against interstate interests through distinctions
between in-state and out-of-state wineries to the commerce clause concern in Granholm
may not be implicated.

Four states have imposed limits on the number of gallons that wineries can produce
annually to be eligible to direct ship wines to consumers in the state. The constitutionality
of gallonage limits in Kentucky, Massachusetts, and Arizona have been challenged. The
gallonage cap in Ohio has not been challenged. The gallonage limits in Arizona and
Kentucky have been held to be constitutional. However, the gallonage limit in
Massachusetts was held to be unconstitutional.

In the Kentucky case, Cherry Hill Vineyards, L.L.C. v. Hudgins,56 the court held that the
state’s 50,000 gallon limit did not discriminate against out-of-state producers and did not
violate Granholm because the limit provides similar licensing opportunities to in-state
and out-of-state wineries. The court stated that the limit does not give Kentucky wineries
a competitive advantage over similarly situated out-of-state wineries.

In the Arizona case, Black Star Farms, L.L.C. v. Oliver, 57 the U.S. District Court for the
District of Arizona found the state’s 20,000 gallon limit was constitutional. It noted that
the number of out-of-state wineries that produced less than 20,000 gallons of wine a year
“dwarfed the number of in-state wineries” that were able to qualify for Arizona’s direct
shipment license. The district court also stated that “the simple fact that there are more
out-of-state wineries than in-state wineries that produce more than 20,000 gallons of wine
per year and are thus required to adhere to the three-tiered distribution system in order to
gain access to Arizona's wine market does not by itself establish patent discrimination in
effect against interstate commerce.”58 On appeal, the U.S. District Court of Appeals for
the Ninth Circuit also held that the state’s 20,000 gallon limit was constitutional. 59 The
Ninth Circuit noted that, when the gallonage cap was adopted in 2006, only one winery in
Arizona produced more than 20,000 gallons. It also noted that, in 2004, wineries

55
Granholm, 544 U.S. at n. 22.
56
Cherry Hill Vineyards v. Hudgins, L.L.C., 488 F.S. Supp.2d 601 (W.D. Ky. 2006).
57
Black Star Farms, L.L.C. v. Oliver, 544 F.Supp.2d 913 (D. Ariz. 2008).
58
Id. at 925-926.
59
Black Star Farms, L.L.C. v. Oliver, 2010 WL 1443284 (9th Cir. 2010).
BILL: SB 854 Page 20

producing more than 25,000 gallons of wine per year accounted for about 98 percent of
the total wine production in the United States. The Ninth Circuit then noted that more
than 70 percent of the all wineries produced less than 25,000 gallon per year. The court
reasoned that the Arizona statute applied to all small wineries whether located in-state or
out-of-state.

However, in Family Winemakers of California v. Jenkins, 60 the court held that the 30,000
gallon limit in Massachusetts to be unconstitutional because it had the discriminatory
effect and purpose to change the competitive balance between in-state and out-of-state
wineries to the benefit of the in-state wineries. All of the Massachusetts wineries
produced less than the 30,000 gallon limit.

Regulation of Common Carriers
The bill’s requirements for winery shippers and common carriers raise concerns relating
to federal preemption over the regulation of common carriers. The bill requires that
common carriers maintain delivery records for three years and make the records available
to inspection by the division upon request. In Rowe v. New Hampshire Motor Transport
Association,61 the U.S. Supreme Court held that federal regulation of carriers, including
the Motor Carrier Act of 198062 and the Federal Aviation Administration Authorization
Act of 1994,63 pre-empted the State of Maine’s regulations for the delivery of tobacco
products that were intended to prevent the delivery and sale of tobacco products to
minors. Maine’s regulations required that the persons shipping cigarettes into Maine
utilize only delivery companies that used specified delivery services, including recipient-
verification services. The Supreme Court rejected the state’s argument that its regulations
were intended to prevent minors from obtaining cigarettes.

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

The bill imposes a $250 license and an annual $250 license renewal fee for the winery
shipper license created under s. 561.222, F.S. Winery shipper licensees would have to
pay excise taxes and sales taxes to the state.

As of the date of this analysis, the Revenue Estimating Conference (REC) has not
determined the revenue impact of this bill. The bill is substantively identical to CS/SB
1096, that was filed during the 2008 Regular Session and that died in messages having
passed the Senate. For CS/SB 1096, the REC determined that the bill would have
generated $4 million in revenue for FY 2008-09 on an annualized basis. Of this amount,
$3 million was General Revenue, $0.5 million for the Alcoholic Beverage and Tobacco
Trust Fund, and $0.5 million for local revenue.

60
Family Winemakers of California v. Jenkins, 592 F.3d 1 (1st Cir. 2010).
61
Rowe v. New Hampshire Motor Transport Association, 128 S.Ct. 989 (2008).
62
94 Stat. 793.
63
108 Stat. 1605-1606.
BILL: SB 854 Page 21

According to DOR, it is receiving approximately 850 monthly tax payment reports
evidencing out-of-state wine deliveries to approximately 20,000 recipients. The division
is uncertain whether all of the wine shippers are wineries.

For December 2010, the division’s records indicate that 22,826 total gallons of wine were
reported as shipped into the state directly to consumers. During that time, $57,729.61 in
excises taxes was paid to the division for that month. Since January 2006, $1,861,225.55
in excise taxes has been paid to the division for the direct shipment of wine.

According to the division, Florida could be missing between $407,606 and $639,440 in
excise taxes per year from unreported and unpaid out-of-state direct shipment wine sales
to Florida consumers.64

The division may also collect additional fees for registration of wine brands for the 2,575
estimated wineries that will become licensed in Florida as a result of the bill.

B. Private Sector Impact:

The Department of Business and Professional Regulation estimates that 2,575 wineries
nationwide would become licensed winery shippers. In addition to the license fee, winery
shipper licensees would incur costs related to the record keeping and reporting
requirements of the bill.

Common carriers may incur expenses to comply with the record keeping requirements of
this bill. One common carrier, United Parcel Service (UPS), expressed its concerns with
the provision in s. 561.222(7)(d), F.S., that requires common carriers to maintain delivery
records for three years and make the records available to inspection by the division upon
request. UPS advised there would be significant costs related to maintaining its records of
wine deliveries to Florida for three years. There also may be costs, including legal
expenses, related to responding to the division’s inspection requests. It is not clear to
what extent the UPS’s concerns reflect the concerns of other common carriers.

C. Government Sector Impact:

The Department of Business Regulation estimated a total cost of $282,312 in FY 2011-
12, $225,796 in FY 2012-13, and $227,834 in FY 2013-14 to implement and administer
the provisions of the bill. These costs include three additional full-time ($157,832
recurring) and 11.5 OPS employees ($58,496 non-recurring) to accommodate the
increased workload; and changes necessary to adapt the electronic system for filing
monthly product movement and excise tax reports under development.65 Other changes
necessary to computer systems used by the Department of Business Regulation can be
accomplished within existing resources.

64
See Department of Business Regulation 2011 Legislative Analysis (February 16, 2011), on file with the committee.
65
Id.
BILL: SB 854 Page 22

VI. Technical Deficiencies:

The bill creates s. 561.222(4), F.S., to require that winery shippers collect and pay the
discretionary sales surtaxes tax (local option sales tax). Section 212.054(4)(b), F.S., requires that
surtax collected by dealers located in the county must be returned to that county. The proceeds
are transferred to the Discretionary Sales Surtax Clearing Trust Fund. The provision in the bill
would conflict with s. 212.054(4)(b), F.S., to the extent it would require the in-state wineries not
to return the collected discretionary tax to the county in which they are located. 66

VII. Related Issues:

None.

VIII. Additional Information:

A. Committee Substitute – Statement of Substantial 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.

66
See DOR 2011 Bill Analysis (February 16, 2011), on file with the committee.
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 Commerce and Tourism Committee

BILL: CS/SB 920
INTRODUCER: Criminal Justice Committee and Senator Ring
SUBJECT: Possession of Stolen Credit or Debit Cards
DATE: April 11, 2011 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Erickson Cannon CJ Fav/CS
2. Hrdlicka Cooper CM Pre-meeting
3. AG
4.
5.
6.

Please see Section VIII. for Additional Information:
A. COMMITTEE SUBSTITUTE..... X Statement of Substantial Changes
B. AMENDMENTS........................ Technical amendments were recommended
Amendments were recommended
Significant amendments were recommended

I. Summary:

CS/SB 920 (the bill) makes it a third degree felony to knowingly possess, receive, or retain
custody of a credit or debit card that has been taken from the possession, custody, or control of
another person without the cardholder’s consent and with the intent to impede recovery of the
card by the cardholder.

The bill also specifies that this new offense does not apply to a retailer or retail employee who, in
the ordinary course of business, possesses, receives, or returns a credit card or debit card that the
retailer or retail employee does not know was stolen; or who possesses, receives, or retains a
credit card or debit card that the retailer or retail employee knows is stolen for the purpose of an
investigation into the circumstances regarding the theft of the card or its possible unlawful use.

This bill substantially amends section 817.60 of the Florida Statutes.
BILL: CS/SB 920 Page 2

II. Present Situation:

Section 817.60, F.S., is part of Part II of ch. 817, F.S., which is the 1967 “State Credit Card
Crime Act.”1 This statute provides criminal penalties2 for various crimes relating to credit cards.3
The specific offenses are as follows:

Taking or retaining possession of a credit card taken: First degree misdemeanor: Person
takes a credit card from the possession, custody, or control of another person without the
cardholder’s consent or, with knowledge the credit card has been so taken, receives the credit
card with the intent to use it, to sell it, or to transfer it to another person other than the issuer
or the cardholder.4
Theft of a credit card lost, mislaid, or delivered by mistake: First degree misdemeanor:
Person receives a credit card that he or she knows to have been lost, mislaid, or delivered by
mistake as to the identity or address of the cardholder, and retains the credit card with the
intent to use, sell, or transfer the credit card to another person other than the issuer or the
cardholder.5
Purchase or sale of another person’s credit card: First degree misdemeanor: Person other
than the credit card issuer sells a credit card or buys a credit card from a person other than the
issuer.6
Obtaining control of a credit card as security for a debt: First degree misdemeanor: Person,
with intent to defraud the credit card issuer, a person or organization providing money,
goods, services, or anything else of value, or any other person, obtains control over a credit
card as security for a debt.7
Dealing in another person’s credit card: Third degree felony: Person other than the credit
card issuer, during any 12-month period, receives two or more credit cards issued in the
name or names of different cardholders, which cards he or she has reason to know were taken
or retained under circumstances which constitute credit card theft or a violation of this part.8
Forgery of another person’s credit card: Third degree felony: Person, with intent to defraud
a purported credit card issuer or a person or organization providing money, goods, services,
or anything else of value or any other person, falsely makes, falsely embosses, or falsely

1
Section 817.57, F.S.
2
The statute specifies that offenses are subject to the penalties set forth in s. 817.67(1), F.S., or s. 817.67(2), F.S., as
applicable. Section 817.67(1), F.S., provides that a person who is subject to the penalties of this subsection is guilty of a first
degree misdemeanor. A first degree misdemeanor is punishable by up to 1 year in county jail and a fine of up to $1,000 may
also be imposed. Sections 775.082 and 775.083, F.S. Section 817.67(2), F.S., provides that a person who is subject to the
penalties of this subsection is guilty of a third degree felony. A third degree felony is punishable by up to 5 years in state
prison and a fine of up to $5,000 may also be imposed. Sections 775.082 and 775.083, F.S.
3
“Credit card” is defined to mean “any instrument or device, whether known as a credit card, credit plate, bank service card,
banking card, check guarantee card, electronic benefits transfer (EBT) card, or debit card, or by any other name, issued with
or without fee by an issuer for the use of the cardholder in obtaining money, goods, services, or anything else of value on
credit or for use in an automated banking device to obtain any of the services offered through the device.” Section 817.58(4),
F.S.
4
Section 817.60(1), F.S. “Taking a credit card without consent includes obtaining it by conduct defined or known as statutory
larceny, common-law larceny by trespassory taking, common-law larceny by trick or embezzlement or obtaining property by
false pretense, false promise or extortion.”
5
Section 817.60(2), F.S.
6
Section 817.60(3), F.S.
7
Section 817.60(4), F.S.
8
Section 817.60(5), F.S.
BILL: CS/SB 920 Page 3

alters in any manner a credit card or utters such a credit card or, with intent to defraud, has a
counterfeit credit card or any invoice, voucher, sales draft, or other representation or
manifestation of a counterfeit credit card in his or her possession, custody, or control.9
Signing another person’s card: First degree misdemeanor: Person other than the holder of a
credit card or a person authorized by the cardholder, signs the credit card with the intent to
defraud the credit card issuer or a person or organization providing money, goods, services,
or anything else of value or any other person.10

III. Effect of Proposed Changes:

Section 1 creates s. 817.60(8), F.S., to create a new crime related to credit cards. A person
commits unlawful possession of a stolen credit or debit card when the person knowingly
possesses, receives, or retains custody of a credit or debit card11 that has been taken from the
possession, custody, or control of another person without the cardholder’s consent and with the
intent to impede recovery of the card by the cardholder. The person is subject to the penalties set
forth in s. 817.67(2), F.S., which are third degree felony penalties: up to 5 years in state prison
and a potential fine of up to $5,000.12

This new offense does not apply to a retailer or retail employee who, in the ordinary course of
business, possesses, receives, or returns a credit card or debit card that the retailer or retail
employee does not know was stolen; or who possesses, receives, or retains a credit card or debit
card that the retailer or retail employee knows is stolen for the purpose of an investigation into
the circumstances regarding the theft of the card or its possible unlawful use.

Section 2 provides an effective date of October 1, 2011.

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

None.

B. Public Records/Open Meetings Issues:

None.

9
Section 817.60(6), F.S. “A person other than an authorized credit card manufacturer or issuer who possesses two or more
counterfeit credit cards is presumed to have violated this subsection. A person falsely makes a credit card when he or she
makes or draws in whole or in part a device or instrument which purports to be the credit card of a named issuer but which is
not such a credit card because the issuer did not authorize the making or drawing or when he or she alters a credit card which
was validly issued. A person falsely embosses a credit card when, without the authorization of the named issuer, he or she
completes a credit card by adding any of the matter, other than the signature of the cardholder, which an issuer requires to
appear on the credit card before it can be used by a cardholder.”
10
Section 817.60(7), F.S.
11
“Debit card” is not a term defined in the bill, ch. 817, F.S., or the Florida Statutes. However, courts may look “to case law
or related statutory provisions which define the term, and where a statute does not specifically define words of common
usage, such words are construed in their plain and ordinary sense.” State v. Hagan, 387 So.2d 943, 945 (Fla.1980).
12
Sections 775.082 and 775.083, F.S.
BILL: CS/SB 920 Page 4

C. Trust Funds Restrictions:

None.

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

None.

B. Private Sector Impact:

None.

C. Government Sector Impact:

The Criminal Justice Impact Conference, which provides the final, official estimate of the
prison bed impact, if any, of legislation, estimates that the bill has an insignificant prison
bed impact because it creates an unranked third degree felony.13

VI. Technical Deficiencies:

None.

VII. Related Issues:

None.

VIII. Additional Information:

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

CS by Criminal Justice on March 22, 2011:
The CS revises a provision that specifies that the new offense involving possession of a
stolen credit card or debit card does not apply to a retailer or retail employee in specified
circumstances.

B. Amendments:

None.

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

13
“Unranked” is a descriptive term for a noncapital felony that is not specifically ranked in the offense severity ranking chart
in s. 921.0022, F.S. If the felony is not ranked in the chart, it is ranked pursuant to s. 921.0023, F.S., based on its felony
degree. An unranked third degree felony is a Level 1 offense. Id. A first-time offender convicted of only the unranked third
degree felony would score a nonprison sanction as the lowest permissible sentence. Section 921.0024, F.S. Further, in this
first-time offender scenario, a non prison sanction would be required unless the sentencing court made written findings that
this sanction could present a danger to the public. Section 775.082(10), F.S.
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 Commerce and Tourism Committee

BILL: SB 1080
INTRODUCER: Senator Altman
SUBJECT: Exemptions/Tax on Sales, Use, & Other Transactions
DATE: April 11, 2011 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Hrdlicka Cooper CM Pre-meeting
2. BC
3.
4.
5.
6.

I. Summary:

SB 1080 creates an exemption from the sales and use tax for certain items used to manufacture,
produce, or modify gas turbine engine parts.

This bill creates s. 212.08(7)(iii), F.S.

II. Present Situation:

Sales and Use Taxes
Chapter 212, F.S., contains the state’s statutory provisions authorizing the levying 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. The statutes currently provide more than 200 different
exemptions. Florida imposes a 6 percent tax on tangible personal property sold, used, consumed,
distributed, stored for use or consumption, rented, or leased in Florida.1

Turbines
“A turbine is any kind of spinning device that uses the action of a fluid to produce work.”2 Fluids
typically used in turbines include air, wind, water, steam and helium. Windmills and
hydroelectric dams are two examples of turbine action being used to turn the core of an electrical
generator to produce power.

1
See ss. 212.05 and 212.06, F.S.
2
See Langston, Lee S., and George Opdyke, Jr., “Introduction to Gas Turbines for Non-Engineers,” Global Gas Turbine
News, Volume 37: 1997, No.2, available at http://files.asme.org/IGTI/101/13001.pdf (last visited 4/5/2011) .
BILL: SB 1080 Page 2

Gas turbines were first developed in the 1930s, and were used to generate electricity and power
airplane flight. Gas turbines use a compressor to draw in and compress gas (usually air), then a
combustor (or burner) adds fuel (such as propane, natural gas, kerosene or jet fuel) to heat the
compressed gas, and a turbine extracts power from the hot air flow. The gas turbine is an internal
combustion engine employing a continuous combustion process. Gas turbines are also known as
combustion turbines, turboshaft engines, or gas turbine engines in power generation and marine
applications and as jet engines, jet turbine engines, turbojets, turbofans, fanjets, turboprops or
prop jets in aviation applications.

Gas turbines have many applications, and are used in power plants, tanks, jets, helicopters and
trains.

III. Effect of Proposed Changes:

Section 1 creates a new exemption from the tax on sales, use, and other transactions under s.
212.08(7), F.S. The bill exempts cores, patterns, dies, and molds consumed in the production of
castings used to manufacture, produce, or modify gas turbine engine parts.

Section 2 provides an effective date of July 1, 2011.

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

Article VII, s. 18 of the Florida Constitution, excuses counties and municipalities from
complying with laws requiring them to spend funds or to take an action unless certain
conditions are met.

Subsection (b) of the provision prohibits the Legislature from “enacting, amending, or
repealing any general law if the anticipated effect” is to reduce county or municipal
aggregate revenue generating authority as it existed on February 1, 1989. The exception
to this prohibition is if the Legislature passes such a law by 2/3 of the membership of
each chamber.

Subsection (d) provides an exemption from this prohibition. Laws determined to have an
“insignificant fiscal impact,” which means an amount not greater than the average
statewide population for the applicable fiscal year times $0.10 (which is $1.88 million for
FY 2011-12), are exempt.

The Revenue Estimating Conference estimated that this bill will have a $200,000 fiscal
impact annually on local governments. Consequently, it is exempt from the mandates
restriction due to its insignificant fiscal impact.

B. Public Records/Open Meetings Issues:

None.
BILL: SB 1080 Page 3

C. Trust Funds Restrictions:

None.

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

The Revenue Estimating Conference met on March 11, 2011, and made the following
assessment of the impact of this exemption:
FY 2010-2011 FY 2011-2012 FY 2012-2013 FY 2013-2014
General Revenue (0.6) (0.7) (0.7) (0.8)
State Trust (Insignificant) (Insignificant) (Insignificant) (Insignificant)
Total State
(0.6) (0.7) (0.7) (0.8)
Impact

FY 2010-2011 FY 2011-2012 FY 2012-2013 FY 2013-2014
Revenue Sharing (Insignificant) (Insignificant) (Insignificant) (Insignificant)
Local Gov’t Half
(0.1) (0.1) (0.1) (0.1)
Cent
Local Option (0.1) (0.1) (0.1) (0.1)
Total Local
(0.2) (0.2) (0.2) (0.2)
Impact

FY 2010-2011 FY 2011-2012 FY 2012-2013 FY 2013-2014
Total Impact (0.8) (0.9) (0.9) (1.0)

B. Private Sector Impact:

Purchasers of these items will benefit from the exemption of these items from taxes.

C. Government Sector Impact:

The Department of Revenue has indicated that this bill would have an insignificant
impact on its operations.

VI. Technical Deficiencies:

None.

VII. Related Issues:

Turbine engines are classified by the type of fluid used to drive the engine. In general, the
manufacturing process for all engines is the same and uses the same materials (cores, patterns,
dies, and molds), although they may vary by type of metal. The exemption provided by this bill
is limited to gas turbine engines; items used for the manufacture of other engines would not be
eligible. The exemption would need to be prorated for companies that produce parts for more
than one type of turbine.
BILL: SB 1080 Page 4

VIII. Additional Information:

A. Committee Substitute – Statement of Substantial 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 - 2011 COMMITTEE AMENDMENT
Bill No. CS for SB 1284

Ì440824#Î440824

LEGISLATIVE ACTION
Senate . House
.
.
.
.
.

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

1 Senate Amendment (with title amendment)
2
3 Delete everything after the enacting clause
4 and insert:
5 Section 1. Subsection (31) is added to section 206.01,
6 Florida Statutes, to read:
7 206.01 Definitions.—As used in this chapter:
8 (31) “Renewable feedstocks” mean crops and animal products
9 that may be used to produce fuel or energy.
10 Section 2. Subsection (5) of section 206.02, Florida
11 Statutes, is amended to read:
12 206.02 Application for license; temporary license; terminal

Page 1 of 3
4/11/2011 7:26:24 AM CM.CM.04143
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. CS for SB 1284

Ì440824#Î440824

13 suppliers, importers, exporters, blenders, biodiesel
14 manufacturers, and wholesalers.—
15 (5) Each biodiesel manufacturer must meet the reporting,
16 bonding, and licensing requirements prescribed for wholesalers
17 by this chapter, except that biodiesel manufacturers are exempt
18 from the bonding requirements of this chapter only for B100 and
19 B99 biodiesel fuel that the biodiesel manufacturer makes from
20 renewable feedstocks originating in this state.
21 Section 3. Subsection (8) of section 206.874, Florida
22 Statutes, is added to read:
23 206.874 Exemptions.—
24 (8) B100 and B99 biodiesel fuel, of which at least 50
25 percent is made from renewable feedstocks originating in this
26 state, is exempt from the taxes imposed by this part.
27 Section 4. Subsection (5) of section 206.9925, Florida
28 Statutes, is amended to read:
29 206.9925 Definitions.—As used in this part:
30 (5) “Pollutants” includes any petroleum product as defined in
31 subsection (4) as well as pesticides, ammonia, and chlorine;
32 lead-acid batteries, including, but not limited to, batteries
33 that are a component part of other tangible personal property;
34 and solvents as defined in subsection (6), but the term excludes
35 liquefied petroleum gas, medicinal oils, and waxes. Products
36 intended for application to the human body or for use in human
37 personal hygiene or for human ingestion are not pollutants,
38 regardless of their contents. B100 or B99 biodiesel
39 manufactured in this state is not a pollutant if at least 50
40 percent of the manufacturer’s annual production of B100 or B99
41 is from renewable feedstocks originating in this state. For the

Page 2 of 3
4/11/2011 7:26:24 AM CM.CM.04143
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. CS for SB 1284

Ì440824#Î440824

42 purpose of the tax imposed under s. 206.9935(1), “pollutants”
43 also includes crude oil.
44 Section 5. The Department of Revenue is authorized, and all
45 conditions are deemed met, to adopt emergency rules pursuant to
46 ss. 120.536(1) and 120.54, Florida Statutes, to administer the
47 provisions of this act. The emergency rules shall remain in
48 effect for 6 months after the rules are adopted, and the rules
49 may be renewed during the pendency of procedures to adopt
50 permanent rules addressing the subject of the emergency rule.
51 Section 6. This act shall take effect January 1, 2012.
52
53
54 ================= T I T L E A M E N D M E N T ================
55 And the title is amended as follows:
56 Delete everything before the enacting clause
57 and insert:
58 A bill to be entitled
59 An act relating to biodiesel; amending s. 206.01, F.S.;
60 defining the term “renewable feedstocks”; amending s. 206.02,
61 F.S.; exempting certain biodiesel manufacturers from bonding
62 requirements; amending s. 206.874, F.S.; exempting certain
63 biodiesel manufacturers from specific taxes on diesel fuel;
64 amending s. 206.9925, F.S.; redefining the term “pollutants” to
65 exclude certain biodiesel; amending s. 526.202, F.S.;
66 authorizing the Department of Revenue to adopt emergency rules
67 to implement the provisions of this act; providing an effective
68 date.

Page 3 of 3
4/11/2011 7:26:24 AM CM.CM.04143
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 Commerce and Tourism Committee

BILL: CS/SB 1284
INTRODUCER: Committee on Agriculture and Senator Bennett
SUBJECT: Biodiesel
DATE: April 11, 2011 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Weidenbenner Spalla AG Fav/CS
2. Pugh Cooper CM Pre-meeting
3. BC
4.
5.
6.

I. Summary:

Biodiesel is an alternative fuel produced from agricultural products such as soy beans, canola,
camelina grass, mustard seeds, used vegetable-based cooking oils, and other organic products.
Most alternative diesel fuel commercially available is a blend of 20-percent biodiesel and 80-
percent regular diesel, denoted as “B20.”

The State of Florida has promoted biodiesel in recent years by supporting grant programs and
providing tax credits or exemptions to eligible businesses.

CS/SB 1284 attempts to further the biodiesel industry in Florida by eliminating a bond
requirement and certain motor fuel taxes on biodiesel fuel. Specifically, the bill:
Requires all diesel fuel sold in Florida to contain a minimum 2 percent of biodiesel
effective December 31, 2011, and provides guidelines for that percentage to be increased
to 5 percent;
Exempts from taxation biodiesel fuel manufactured by a biodiesel manufacturer who
produces at least 50 percent of its annual production of 100-percent biodiesel (or B100)
from Florida renewable feedstocks;
BILL: CS/SB 1284 Page 2

Eliminates the bond requirement for any biodiesel manufacturer who produces at least 50
percent of its annual production of 100-percent biodiesel (or B100) from Florida
renewable feedstocks;
Defines “renewable feedstocks”;
Extends statutory provisions making it unlawful to sell or distribute gasoline that does not
meet state standards to apply to the sale or distribution of diesel fuel;
Provides reporting requirements to the Department of Agriculture and Consumer Services
(DACS); and
Expresses legislative findings about the importance of biodiesel.

CS/SB 1254 substantially amends ss. 206.01, 206.02, 206.874, 206.9925, 526.202, 526.203, and
526.205, F.S.

II. Present Situation:

Biodiesel background
In s. 206.86(14), F.S., “biodiesel” is defined as any product made from nonpetroleum-based oils
or fats that is suitable for use in diesel-powered engines. Biodiesel also is included in the
statutory definition of diesel fuel, in s. 206.86(1), F.S.

Some of the types of crops that might be used to make biodiesel or biofuels are switchgrass;
sugarcane; miscanthus; sweet sorghum; soybeans; peanuts; canola; and elephantgrass, according
to research conducted the by University of Florida Institute of Food and Agricultural Sciences. 1
Other studies indicate that used palm oil, canola oil, and other cooking oils are good sources.2

Various governmental entities and private companies have incorporated biodiesel in their
transportation fleets, including:3
Public bus fleets in Fort Lauderdale, Orlando, and Jacksonville;
Florida Power & Light;
Disney World and Universal Studios;
TriRail in its trains;
School buses in Manatee County; and
Water taxis used in Port Everglades.

Fuel Taxation
The state imposes a tax on the sale, use, distribution, or consumption of motor fuel.4 Diesel fuel
is addressed separately in law, taxed differently, and generally considered to be subject to a
highway tax, imposed for the purpose of constructing and maintaining the highways of the state.5

1
Reports available at: http://edis.ifas.ufl.edu/topic_series_production_of_biofuel. Site last visited April 6, 2011.
2
“Sustainable Biodiesel Progress in Florida in the Next 10 Years,” by Dr. Randell Wedel. PowerPoint Presentation dated
August 26-27, 2009. Available at:
http://stlucie.ifas.ufl.edu/pdfs/Biofuel%20Feedstocks/vonWedel%20USDA%20FtPrc%208-26-09.pdf.
3
Ibid.
4
Chapter 206, F.S., provides for the taxation of motor and other fuels.
5
Part II of ch. 206, F.S.
BILL: CS/SB 1284 Page 3

Biodiesel manufacturers are subject to the same reporting and licensing requirements as
wholesalers.6

The 2011 amount of state and local taxes per gallon of diesel fuel is 30 cents,7 and includes the
following:
A 4-cents-per-gallon excise tax;
A 1-cent-per-gallon tax, known as the “ninth-cent fuel tax”;
A 6-cents-per-gallon tax, known as a “local-option fuel tax”;
A 6.8-cents-per-gallon State Comprehensive Enhanced Transportation System Tax;8 and
A 12.2-cents-per-gallon state “fuel sales tax.”9

Section 206.874, F.S., provides for exemptions to these taxes on diesel fuel under certain
conditions. Such conditions include:10
The tax status of the person involved in the removal or entry of the diesel fuel;
The delivery of diesel fuel out-of-state;
Fuel limited to a specified “local use,” typically pertaining to off-road, non-highway
activity, such as the use of diesel fuel for home heating, or for contained farming
operations;
Biodiesel fuel manufactured by a public or private secondary school that produces less
than 1,000 gallons annually for the sole use at the school, by its employees, or its
students;11 and
Dyed diesel fuel (fuel marked for nontaxable purposes) used in school buses to transport
students and school employees. Pursuant to this provision, a school district is still
required to register as a “local government user of diesel fuel,” and to remit a return, but
is authorized to apply for credit.12

Each fuel supplier, importer, exporter, wholesaler, blender, and biodiesel manufacturer operating
in Florida is required to post a bond with DOR in the approximate amount of three times the
average monthly tax levied on its operation, not to exceed $100,000, to assure compliance with
tax reporting and payment requirements.13

Additionally, fuels are subject to Florida excise taxes, generally on a per-barrel basis, to help pay
for environmental cleanup. The producers and importers of fuel products pay these excise taxes.
The excise tax revenues are deposited in the Coastal Protection Trust Fund and Inland Protection
Trust Fund, pursuant to Part IV of ch. 206, F.S. The minimum tax rate is different for different

6
Section 206.02(5), F.S.
7
DOR fuel tax tips sheet, available at https://taxlaw.state.fl.us/wordfiles/MSF%20TIP%2010B05-02.pdf. The federal tax on
diesel fuel for 2011 is an additional 24.4 cents per gallon.
8
Section 206.4608, F.S., provides that this tax, based on the amount of local-option taxes assessed, is spent on approved road
projects in the counties where the tax is collected, to the extent practicable.
9
Section 206.87(1), F.S.
10
Section 206.874, F.S.
11
Section 206.874(7), F.S. This exemption currently applies at least to the Oak Hall School, a private school in Gainesville,
which has an on-site operation to turn used cooking oil into biodiesel to supplement regular diesel fuel used in the school’s
lawnmowers. See: http://www.oakhall.org/default.aspx?RelID=609681&issearch=biodiesel.
12
Section 206.874(4)(a),(b), and (d), F.S.
13
Section 206.05, F.S.
BILL: CS/SB 1284 Page 4

types of pollutants, but will increase automatically if the balances in these trust funds drop below
certain thresholds.

Pollutants, defined as any petroleum products and a host of other chemicals,14 are subject to an
excise tax under Part IV, ch. 206, F.S., unless exempt under s. 206.9941, F.S. Biodiesel is not
exempt, nor is it excluded in the definition of “pollutants.”

Promotion of Biodiesel by the federal government and other states
The federal government offers a number of incentives to promote the development of biodiesel:15
The Alternative Fuel Infrastructure Tax Credit, equal to 30 percent of the cost of
equipment to create B20 or other types of alternative fuels that was placed into service
after 2005 but before 2011. For equipment placed into service in 2011, the tax credit is
capped at $30,000.
Biodiesel Mixture Excise Tax Credit, equal to $1 per gallon of pure biodiesel, agri-
biodiesel, or renewable diesel blended with petroleum diesel to produce a mixture
containing at least 0.1-percent diesel fuel for any biodiesel blender that is registered with
the IRS. Only blenders that have produced and sold or used the qualified biodiesel
mixture as a fuel in their trade or business are eligible for the tax credit, which expires
December 31, 2011.
Biodiesel Income Tax Credit, which may be claimed by any taxpayer that delivers pure,
unblended biodiesel (B100) into the tank of a vehicle or uses B100 as an on-road fuel in
his or her business. If the biodiesel was sold at retail, only the person that sold the fuel
and placed it into the tank of the vehicle is eligible for the tax credit. The incentive is
allowed as a credit against the taxpayer's federal income tax liability. This tax credit
expires December 31, 2011.
Small Agri-Biodiesel Producer Tax Credit of 10 cents per gallon is available to any agri-
biodiesel producer that is registered with the IRS, which sells the fuel either wholesale or
retail, has no more than 60 million gallons of productive capacity, and meets other
criteria. This tax credit also expires December 31, 2011.
A number of grants and loans for biodiesel producers.

The federal government has a regulatory component to promoting the use of biodiesel and other
alternative fuels.16 The national RFS Renewable Fuel Standard (RFS) Program was developed to
increase the volume of renewable fuel that is blended into traditional petroleum-based fuels, and
was authorized by the Energy Policy Act of 2005. The Energy Independence and Security Act of
2007 increased and expanded these requirements. In 2010, 12.95 billion gallons of renewable
fuel must be available for use, increasing to 36 billion gallons per year by 2022. Beginning in
2010, a certain percentage of the renewable fuel blended into transportation fuels must be
cellulosic biofuel, biomass-based diesel, and advanced biofuel. The U.S. Environmental
Protection Agency oversees the implementation and enforcement of these requirements.

14
Defined in s. 206.9925(5), F.S.
15
See http://www.afdc.energy.gov/afdc/laws/laws/US/tech/3251. Site last visited April 7, 2011.
16
See http://www.afdc.energy.gov/afdc/laws/laws/US/reg/3838. Site last visited April 7, 2011.
BILL: CS/SB 1284 Page 5

Every state offers one or more incentives to promote the development or use of biodiesel,17 from
tax credits to grants. Two states – Minnesota and Oregon – currently require that all of the diesel
fuel sold within their jurisdiction be blended with at least 5-percent biodiesel, while Washington
and Pennsylvania require a 2-percent blending. Several other states are in the process of
considering legislation requiring blended biodiesel or have recently passed the requirement.

Florida Incentives for Biodiesel and Alternative Fuels
In recent years, Florida has created or expanded a number of incentives to promote the
development and use of alternative fuels.

The Florida Renewable Fuel Standard Act (act)18 contains a legislative finding that it is vital to
the public interest and the state’s economy to require that all gasoline sold in the state contain a
percentage of agriculturally derived, denatured ethanol. The act also required that all gasoline
sold in Florida, beginning December 31, 2010, be “blended,” meaning it must contain a mixture
of gasoline and ethanol. Finally, the act makes it unlawful to sell gasoline in Florida that fails to
meet the requirements of the act.

Also available to alternative energy producers were several sales tax exemptions for machinery
and equipment, but many of these specifically geared to biodiesel or other alternative energy
producers expired last year. Still available are state incentive programs such as the:
Qualified Target Industry tax refund program,19 which provides refunds of certain taxes
paid to targeted industry sectors, including Clean Energy, which create at least 10 jobs
paying at least 115 percent of the statewide or area private-sector wage, and meet other
criteria;
Quick Action Closing Fund,20 which is a grant to eligible targeted businesses focusing on
job creation that can demonstrate at least $5-to-$1 payback of the state’s investment; and
Innovation Incentive Program,21 which provides a grant for alternative or renewable
energy projects that create 35 jobs paying 130 percent of the statewide and area private-
sector wage, and meet other criteria.

The Department of Environmental Protection and the Governor’s Energy and Climate
Commission (commission)22 awarded more than $42 million in state energy grants from FY
2006-2007 through FY 2008-2009 to renewable or alternative energy projects, while the
Department of Agriculture has distributed up to $25 million in state grants appropriated by the
Legislature in 2007 through the Farm-to-Fuels program. Neither program has received state

17
See the interactive U.S. map on the Department of Energy website, at
http://www.afdc.energy.gov/afdc/fuels/biodiesel_laws.html. Site last visited April 7, 2011.
18
Sections 526.201-526.207, F.S. (ch. 2008-227, L.O.F.)
19
Section 288.108, F.S.
20
Section 288.1088, F.S.
21
Section 288.1089, F.S.
22
A listing of some of the renewable and alternative energy incentives offered by Florida, and the dollar amounts expended,
is available at the commission’s website. See
http://www.myfloridaclimate.com/climate_quick_links/florida_energy_climate_commission/state_energy_initiatives. Site
last visited April 7, 2011.
BILL: CS/SB 1284 Page 6

funding in recent years, although the commission has administered the federal energy grants
available through the American Recovery and Reinvestment Act of 2009.23

Pursuant to s. 403.973(3)(f), F.S., an expedited permitting process is available for projects
resulting in the production of biofuels cultivated on a minimum of 1,000 acres for use in a
biofuel or biodiesel processing facility or a facility generating renewable energy, as defined in s.
366.91(2)(d), F.S.

III. Effect of Proposed Changes:

Section 1 amends s. 206.01, F.S., to define “renewable feedstocks” to mean crops and animal
products that may be used to produce fuel or energy.

Section 2 amends s. 206.02, F.S., to eliminate the requirement for a bond for a biodiesel
manufacturer whose annual production of B100 is derived at least 50 percent from renewable
feedstocks originating in Florida.

Section 3 amends s. 206.874, F.S., to create an exemption from the motor fuel taxes imposed by
s. 206.87, F.S., for biodiesel fuel produced by a manufacturer whose annual production of B100
is derived at least 50 percent from renewable feedstocks originating in Florida.

Section 4 amends s. 206.9925, F.S., to amend the definition of “pollutants” to exclude biodiesel
manufactured in this state by a manufacturer whose annual production of B100 is derived at least
50 percent from renewable feedstocks originating in Florida. This excludes such manufacturers
from having to pay excise taxes into the Coastal Protection and Inland Protection trust funds.

Section 5 amends s. 526.202, F.S., to extend legislative findings concerning the importance of
requiring gasoline offered for sale to contain a percentage of ethanol to include a finding that
diesel offered for sale contain a certain, but unspecified, percentage of biodiesel.

Section 6 amends s. 526.203, F.S., to incorporate definitions for “biodiesel” and “diesel fuel” by
reference to other sections of the Florida Statutes.

CS/SB 1284 also amends the definition of statutory “fuel standards” to require that all diesel fuel
contain at least 2 percent biodiesel (B2), effective December 31, 2011. That percentage will
increase to 5 percent (B5) when the annualized capacity of biodiesel production facilities in
Florida reaches 233 million gallons, which is determined to be approximately 8 percent of the
annual biodiesel consumption in this state.

The bill also:
Requires DACS to notify all dealers and wholesalers when that goal has been attained;
Requires all dealers and wholesalers to begin selling diesel fuel that contains a minimum
of 5 percent of biodiesel no later than 2 months after receiving the DACS notice;
23
See:
http://www.myfloridaclimate.com/climate_quick_links/florida_energy_climate_commission/arra_funding_and_opportunities
Site last visited April 7, 2011.
BILL: CS/SB 1284 Page 7

Requires the dealers and wholesalers to provide DACS a certified fuel analysis of any
biodiesel received, upon the agency’s request;
Creates an exemption from the requirements for using renewable or alternative fuels in
gasoline-powered boats; and
Requires each terminal supplier, importer, blender, and wholesaler to submit in their
monthly report to the DOR the number of gallons of diesel and biodiesel sold.

Section 7 amends s. 526.205, F.S., to make it unlawful to sell or distribute diesel which fails to
meet the state’s requirements for the sale of liquid fuels. Additionally, it allows any terminal
supplier, importer, blender, or wholesaler until September 30, 2011, to seek an extension from
DACS from compliance with the new biodiesel requirements.

Section 8 provides an effective date of July 1, 2011.

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

None.

B. Public Records/Open Meetings Issues:

None.

C. Trust Funds Restrictions:

None.

D. Other Constitutional Issues:

CS/SB 1284 potentially raises Commerce Clause issues.

Congress is expressly permitted by the U.S. Constitution to regulate interstate commerce,
by the Commerce Clause (Article I, Section 8). The powers over commerce not delegated
to the federal government by the U.S. Constitution are reserved to the states.

The states retain exclusive control over intrastate commerce - commerce that begins and
ends entirely within the borders of a single state. In other words, states may control that
commerce which is completely internal, which is carried on between one person and
another in a state, and which does not extend to or affect other states.

The power of Congress generally does not extend to the purely internal commerce of the
states, and Congress cannot, under the Commerce Clause, enact a regulation which by its
terms applies to intrastate commerce unless the regulated activity exerts a substantial
affect on interstate commerce.24

24
Interstate commerce is generally trade and other business activities between those located in different states, for example
traffic in goods and travel of people between states. Black's Law Dictionary (8th ed. 2004), Commerce.
BILL: CS/SB 1284 Page 8

In fact, Congress may control commingled interstate and intrastate operations wherever
the interstate and intrastate transactions are so related that the regulation of the one
involves the control of the other; otherwise Congress would be denied the exercise of its
constitutional authority and the states, not the nation, would be supreme within the
national field.

Additionally, states may not enact legislation nominally of local concern, that in reality is
aimed at interstate commerce or by its necessary operation is a means of gaining a local
benefit by burdening those outside the state.25 Any state or local regulation that
discriminates against out-of-state commerce by providing an advantage to in-state
commerce is suspect under the Dormant Commerce Clause of the U.S. Constitution.

A state or local regulation offering economic protectionism or isolation, whether by
design or in effect is ripe for challenge under the Dormant Commerce Clause. For
example, the U.S. Supreme Court held in New Energy Company of Indiana v. Limbach,
486 U.S. 269 (1988), that Ohio’s tax credit for ethanol producers from Ohio, or for states
granting a reciprocal tax credit for Ohio-produced ethanol, was constitutionally invalid
under the Dormant Commerce Clause as an unlawful burden on interstate commerce.

It could be argued that, to the extent that producers of biodiesel made with at least 50-
percent, Florida-grown renewable feedstocks gain a competitive pricing and regulatory
advantage over out-of-state biodiesel producers without access to Florida-grown
renewable feedstocks, this bill may enact a discriminatory burden on interstate
commerce. If this is so, the bill could be ripe for a Dormant Commerce Clause challenge
by an affected party.

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

Indeterminate. The Revenue Estimating Conference is scheduled to evaluate the fiscal
impact of CS/SB 1284 at its April 11, 2011, meeting.

B. Private Sector Impact:

Manufacturers of biodiesel fuel and growers of renewable feedstock used for that purpose
would realize financial savings of an indeterminate amount depending on their volume of
production due to tax and bonding requirements being exempted by the bill.

C. Government Sector Impact:

DOR estimates it would incur a one-time expense of $53,812 to implement the change in
tax provisions brought about by the bill.

25
Adapted from AMJUR COMMERCE § 29, AMJUR COMMERCE § 21
BILL: CS/SB 1284 Page 9

VI. Technical Deficiencies:

DOR has suggested that elimination of the bond requirement in s. 206.02, F.S., to assure
payment of tax for each biodiesel manufacturer that is licensed as a wholesaler which processes
at least 50 percent of its B100 biodiesel production from renewable feedstocks has the effect of
removing a bond requirement on the manufacturer’s other products, potentially exposing the
state to a significant loss if the manufacturer defaults on payment of tax on products other than
the exempt biodiesel.

Committee staff also suggests that the use of the phrase “B100 biodiesel production” is a limiting
criterion for the various tax exemptions and other incentives in the bill, and possibly incongruent
with the requirements elsewhere in the bill requiring sale of blended B2 biodiesel by the end of
2011.

VII. Related Issues:

None.

VIII. Additional Information:

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

CS by Agriculture on March 21, 2011:
The CS defined “renewable feedstocks” and it deleted that section in the bill that would
have exempted the cultivation of nonnative plants from compliance with certain statutory
permit and bonding requirements.

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 - 2011 COMMITTEE AMENDMENT
Bill No. SB 1384

Ì379386YÎ379386

LEGISLATIVE ACTION
Senate . House
.
.
.
.
.

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

1 Senate Amendment (with title amendment)
2
3
4 Delete everything after the enacting clause
5 and insert:
6 Section 1. Section 213.758, Florida Statutes, is amended to
7 read:
8 213.758 Transfer of tax liabilities.—
9 (1) As used in this section, the term:
10 (a) “Business” means any activity regularly engaged in by
11 any person, or caused to be engaged in by any person, for the
12 purpose of private or public gain, benefit, or advantage. The

Page 1 of 9
4/11/2011 9:07:31 AM 577-04163-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1384

Ì379386YÎ379386

13 term does not include occasional or isolated sales or
14 transactions involving property or services by a person who does
15 not hold himself or herself out as engaged in business. A
16 discrete division or portion of a business is not a separate
17 business and must be aggregated with all other divisions or
18 portions that constitute a business if the division or portion
19 is not a separate legal entity.
20 (b) “Financial institution” means a financial institution
21 as defined in s. 655.005 and any person who controls, is
22 controlled by, or is under common control with a financial
23 institution as defined in s. 655.005.
24 (c) “Insider” means a person as defined in s. 726.102(7),
25 and a manager of, or a managing member of, a person who controls
26 a limited liability company or a relative thereof as defined in
27 s. 726.102(11).
28 (d)(a) “Involuntary transfer” means a transfer of a
29 business, assets of a business, or stock of goods of a business
30 made without the consent of the transferor, including, but not
31 limited to, a transfer:
32 1. That occurs due to the foreclosure of a security
33 interest issued to a person who is not an insider as defined in
34 s. 726.102;
35 2. That results from an eminent domain or condemnation
36 action;
37 3. Pursuant to chapter 61, chapter 702, or the United
38 States Bankruptcy Code;
39 4. To a financial institution, as defined in s. 655.005, if
40 the transfer is made to satisfy the transferor’s debt to the
41 financial institution; or

Page 2 of 9
4/11/2011 9:07:31 AM 577-04163-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1384

Ì379386YÎ379386

42 5. To a third party to the extent that the proceeds are
43 used to satisfy the transferor’s indebtedness to a financial
44 institution as defined in s. 655.005. If the third party
45 receives assets worth more than the indebtedness, the transfer
46 of the excess may not be deemed an involuntary transfer.
47 (e) “Stock of goods” means the inventory of a business held
48 for sale to customers in the ordinary course of business.
49 (f) “Tax” means any tax, interest, penalty, surcharge, or
50 fee administered by the department pursuant to chapter 443 or
51 any of the chapters specified in s. 213.05, excluding chapter
52 220, the corporate income tax code.
53 (g)(b) “Transfer” means every mode, direct or indirect,
54 with or without consideration, of disposing of or parting with a
55 business, assets of the business, or stock of goods of the
56 business, and includes, but is not limited to, assigning,
57 conveying, demising, gifting, granting, or selling, other than
58 to customers in the ordinary course of business, to a transferee
59 or to a group of transferees who are acting in concert. A
60 business is considered transferred when there is a transfer of
61 more than 50 percent of:
62 1. The business;
63 2. The assets of the business; or
64 3. The stock of goods of the business.
65 (2) A taxpayer engaged in a business who is liable for any
66 tax arising from the operation of that business, interest,
67 penalty, surcharge, or fee administered by the department
68 pursuant to chapter 443 or described in s. 72.011(1), excluding
69 corporate income tax, and who quits the a business without the
70 benefit of a purchaser, successor, or assignee, or without

Page 3 of 9
4/11/2011 9:07:31 AM 577-04163-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1384

Ì379386YÎ379386

71 transferring the business, assets of the business, or stock of
72 goods of a business to a transferee, must file a final return
73 for the business and make full payment of all taxes arising from
74 the operation of that business within 15 days after quitting the
75 business. A taxpayer who fails to file a final return and make
76 payment may not engage in any business in this state until the
77 final return has been filed and all taxes, interest, or
78 penalties due have been paid. The Department of Legal Affairs
79 may seek an injunction at the request of the department to
80 prevent further business activity of a taxpayer who fails to
81 file a final return and make payment of the taxes associated
82 with the operation of the business until such taxes tax,
83 interest, or penalties are paid. A temporary injunction
84 enjoining further business activity shall may be granted by a
85 circuit court with jurisdiction over the taxpayer if the
86 department has provided at least 20 days’ prior written notice
87 to the taxpayer without notice.
88 (3) A taxpayer who is liable for taxes with respect to a
89 business, interest, or penalties levied under chapter 443 or any
90 of the chapters specified in s. 213.05, excluding corporate
91 income tax, who transfers the taxpayer’s business, assets of the
92 business, or stock of goods of the business, must file a final
93 return and make full payment within 15 days after the date of
94 transfer.
95 (4)(a) A transferee, or a group of transferees acting in
96 concert, of more than 50 percent of a business, assets of a
97 business, or stock of goods of a business is liable for any
98 unpaid tax, interest, or penalties owed by the transferor
99 arising from the operation of that business unless:

Page 4 of 9
4/11/2011 9:07:31 AM 577-04163-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1384

Ì379386YÎ379386

100 1.a. The transferor provides a receipt or certificate of
101 compliance from the department to the transferee showing that
102 the transferor has not received a notice of audit and the
103 transferor has filed all required tax returns and has paid all
104 tax arising is not liable for taxes, interest, or penalties from
105 the operation of the business identified on the returns filed;
106 and
107 b. There were no insiders in common between the transferor
108 and the transferee at the time of the transfer; or
109 2. The department finds that the transferor is not liable
110 for taxes, interest, or penalties after an audit of the
111 transferor’s books and records. The audit may be requested by
112 the transferee or the transferor and, if not done pursuant to
113 the certified audit program under s. 213.285, must be completed
114 by the department within 90 days after the records are made
115 available to the department. The department may charge a fee for
116 the cost of the audit if it has not issued a notice of intent to
117 audit by the time the request for the audit is received.
118 (b) A transferee may withhold a portion of the
119 consideration for a business, assets of the business, or stock
120 of goods of the business to pay the tax taxes, interest, or
121 penalties owed to the state by the transferor taxpayer arising
122 from the operation of the business. The transferee shall pay the
123 withheld consideration to the state within 30 days after the
124 date of the transfer. If the consideration withheld is less than
125 the transferor’s liability, the transferor remains liable for
126 the deficiency.
127 (c) A transferee who acquires the business or stock of
128 goods and fails to pay the taxes, interest, or penalties due may

Page 5 of 9
4/11/2011 9:07:31 AM 577-04163-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1384

Ì379386YÎ379386

129 not engage in any business in the state until the taxes,
130 interest, or penalties are paid. The Department of Legal Affairs
131 may seek an injunction at the request of the department to
132 prevent further business activity of a transferee who is liable
133 for unpaid tax of a transferor and who fails to pay or cause to
134 be paid the transferee’s maximum liability for such tax due
135 until such maximum liability for the tax is, interest, or
136 penalties are paid. A temporary injunction enjoining further
137 business activity shall may be granted by a circuit court with
138 jurisdiction over the transferee if: without notice.
139 1. The assessment against the transferee is final and
140 either:
141 a. The time for filing a contest under s. 72.011 has
142 expired; or
143 b. Any contest filed pursuant to s. 72.011 resulted in a
144 final and nonappealable judgment sustaining any part of the
145 assessment; and
146 2. The department has provided at least 20 days’ prior
147 written notice to the transferee of its intention to seek an
148 injunction.
149 (5) The transferee, or transferees acting in concert, of
150 more than 50 percent of a business, assets of the business, or
151 stock of goods of a business who are liable for any tax pursuant
152 to this section shall be are jointly and severally liable with
153 the transferor for the payment of the tax taxes, interest, or
154 penalties owed to the state from the operation of the business
155 by the transferor up to the transferee’s or transferees’ maximum
156 liability for such tax due.
157 (6) The maximum liability of a transferee pursuant to this

Page 6 of 9
4/11/2011 9:07:31 AM 577-04163-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1384

Ì379386YÎ379386

158 section is equal to the fair market value of the business,
159 assets of the business, or stock of goods of the business
160 property transferred to the transferee or the total purchase
161 price paid by the transferee for the business, assets of the
162 business, or stock of goods of the business, whichever is
163 greater.
164 (a) The fair market value must be determined net of any
165 liens or liabilities, with the exception of liens or liabilities
166 owed to insiders.
167 (b) The total purchase price must be determined net of
168 liens and liabilities against the assets, with the exception of:
169 1. Liens or liabilities owed to insiders.
170 2. Liens or liabilities assumed by the transferee that are
171 not liens or liabilities owed to insiders.
172 (7) After notice by the department of transferee liability
173 under this section, the transferee has 60 days within which to
174 file an action as provided in chapter 72.
175 (8) This section does not impose liability on a transferee
176 of a business, assets of a business, or stock of goods of a
177 business pursuant to an involuntary transfer.
178 (9) The department may adopt rules necessary to administer
179 and enforce this section.
180 Section 2. Subsection (17) of section 213.053, Florida
181 Statutes, as amended by chapter 2010-280, Laws of Florida, is
182 amended to read:
183 213.053 Confidentiality and information sharing.—
184 (17) The department may provide to the person against whom
185 transferee liability is being asserted pursuant to s. 213.758 s.
186 212.10(1) information relating to the basis of the claim.

Page 7 of 9
4/11/2011 9:07:31 AM 577-04163-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1384

Ì379386YÎ379386

187 Section 3. Section 202.31, Florida Statutes, is repealed.
188 Section 4. Section 212.10, Florida Statutes, is repealed.
189 Section 5. This act shall take effect July 1, 2011.
190
191 ================= T I T L E A M E N D M E N T ================
192 And the title is amended as follows:
193 Delete everything before the enacting clause
194 and insert:
195 A bill to be entitled
196 An act relating to the transfer of tax liability;
197 amending s. 213.758, F.S.; providing definitions;
198 revising provisions relating to tax liability when a
199 person transfers or quits a business; providing that
200 the transfer of the assets of a business or stock of
201 goods of a business under certain circumstances is
202 considered a transfer of the business; requiring the
203 Department of Revenue to provide certain notification
204 to a business before a circuit court shall temporarily
205 enjoin business activity by that business; providing
206 that transferees of the business are liable for
207 certain taxes unless specified conditions are met;
208 requiring the department to conduct certain audits
209 relating to the tax liability of transferors and
210 transferees of a business within a specified time
211 period; requiring certain notification by the
212 Department of Revenue to a transferee before a circuit
213 court shall enjoin business activity in an action
214 brought by the Department of Legal Affairs seeking an
215 injunction; specifying a transferor and transferee of

Page 8 of 9
4/11/2011 9:07:31 AM 577-04163-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1384

Ì379386YÎ379386

216 the assets of a business are jointly and severally
217 liable for certain tax payments up to a specified
218 maximum amount; specifying the maximum liability of a
219 transferee; providing methods for calculating the fair
220 market value or total purchase price of specified
221 business transfers to determine maximum tax liability
222 of transferees; amending s. 213.053, F.S.; authorizing
223 the Department of Revenue to provide certain tax
224 information to a transferee against whom tax liability
225 is being asserted pursuant to s. 213.758, F.S.;
226 repealing s. 202.31, F.S., relating to the tax
227 liability and criminal liability of dealers of
228 communications services who make certain transfers
229 related to a communications services business;
230 repealing s. 212.10, F.S., relating to a dealer’s tax
231 liability and criminal liability for sales tax when
232 certain transfers of a business occur; providing an
233 effective date.

Page 9 of 9
4/11/2011 9:07:31 AM 577-04163-11
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 Commerce and Tourism Committee

BILL: SB 1384
INTRODUCER: Senator Altman
SUBJECT: Transfer of Tax Liabilities
DATE: April 11, 2011 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Hrdlicka Cooper CM Pre-meeting
2. JU
3. BC
4.
5.
6.

I. Summary:

SB 1384 consolidates and revises the statutes which deal with the transfer of tax liabilities.

In general, a person who buys a business (transferee) assumes the tax liabilities of the seller
(transferor), unless an exception applies. Current law provides three different statutes relating to
tax liability related to the transfer of a business to new ownership. This bill repeals two specific
statutes (sales and communications) and amends the statute relating to taxes owed.

The bill revises the requirements for a transferee to take possession of a business without
assuming any outstanding tax liabilities of a transferor. Current law provides that if the transferor
provides a certificate from the Department of Revenue showing that no taxes are owed and the
department conducts an audit finding no liability for taxes, the transferee can take possession
without assuming any tax liability. This bill allows the transferee to take the business without
assuming the transferor’s liabilities under either of the following two circumstances:
The transferee receives a certificate of compliance from the transferor showing that the
transferor has not received notice of audit, has filed all required tax returns, has paid the tax
due from those returns, and there are no insiders in common between the transferor and the
transferee; or
The Department of Revenue conducts an audit, at the request of the transferee or transferor,
and finds that the transferor is not liable for any taxes.

The bill amends s. 213.758, F.S., and repeals ss. 212.10 and 202.31, F.S.
BILL: SB 1384 Page 2

II. Present Situation:

Transfer of Tax Liabilities
Florida Statutes currently has three statutes which describe what is required when a business is
transferred or sold as it relates to tax liability. Section 212.10, F.S., governs sales and use tax
liability when a business is quit or sold.1 In 2000, s. 202.31, F.S., was enacted to govern the
transfer of communications services tax liability related to communications services businesses.2
Section 213.758, F.S., was enacted in 2010 as a comprehensive statute to govern the transfer of
tax liability for all taxes administered by the Department of Revenue (DOR), excluding the
corporate income tax.3

Section 213.758, F.S.
A taxpayer who quits a business without selling, assigning, or transferring the business must
make a final return and full payment for any taxes due, excluding corporate income tax, within
15 days of quitting the business.4 Similarly, a taxpayer who transfers a business must make a
final return and full payment for any taxes due, excluding corporate income tax, within 15 days
of the date of transfer.5

The transferee, or group of transferees, of more than 50 percent of a business is also liable for the
taxes due by the transferor, unless the transferor provides the transferee a receipt or certificate
from DOR showing that the transferor is not liable for taxes and DOR conducts an audit and
finds that the transferor is not liable for taxes. DOR is permitted to charge a fee to perform these
audits. The maximum liability for a transferee is the greater of the fair market value of the
business or the purchase price paid. However, a transferee becomes liable for outstanding taxes
only for voluntary transfers. The transferee may withhold a portion of the consideration to pay
the taxes to pay to the department within 30 days of the date of transfer.6

Transferees or taxpayers who quit a business without paying all taxes due are prohibited from
engaging in any business until the tax liability is paid. DOR may request the Department of
Legal Affairs (DLA) to seek an injunction to prevent further business activity until all taxes due
have been paid and the injunction may be granted without notice.

Sections 202.31 and 212.10, F.S.
Sections 202.31 and 212.10, F.S., govern the transfer of tax liability for communications and
services tax and sales and use tax, respectively. The procedures pursuant to those statutes are
substantially similar to those in s. 213.758, F.S. However, ss. 202.31 and s. 212.10, F.S., provide
for misdemeanor criminal penalties for violations of the tax transfer provisions.7

1
This statute has been in Florida law in some form since 1949. S. 10, ch. 26319, L.O.F.
2
Sections 23, 58, ch. 2000-260, L.O.F. See also s. 38, ch. 2001-140, L.O.F.
3
Chapter 2010-166, L.O.F. For a list of all taxes administered by DOR, see s. 213.05, F.S. Section 220.829, F.S., governs the
transfer of tax liability for corporate income taxes
4
Section 213.758(2), F.S., refers to taxes, interest, penalties, surcharges, or fees pursuant to ch. 443, F.S., or described in s.
72.011(1), F.S., excluding the corporate income tax.
5
Section 213.758(3), F.S., refers to taxes, interest, or penalties levied under ch. 443, F.S., or specified in s. 213.05, F.S.,
excluding the corporate income tax.
6
Section 213.758(1)(a) defines an “involuntary transfer” as a transfer due to the foreclosure by a non-insider, from eminent
domain or condemnation actions, those involved in a bankruptcy proceeding, or to satisfy a debt to a financial institution.
7
Sections 212.10(5) and 202.31(5), F.S.
BILL: SB 1384 Page 3

III. Effect of Proposed Changes:

Section 1 consolidates and revises the statutes which deal with the transfer of tax liabilities into
s. 213.758, F.S..

Tax Liability
This bill allows the transferee to take possession of a business without assuming the transferor’s
outstanding tax liabilities under either of the following two circumstances:
The transferee receives a certificate of compliance from the transferor showing that the
transferor has not received notice of audit, has filed all required tax returns, has paid the tax
due from those returns, and there are no insiders in common between the transferor and the
transferee; or
The Department of Revenue conducts an audit and finds that the transferor is not liable for
any taxes. Either the transferee or transferor may request that the department conduct an
audit, and if requested, the department must complete the audit within 90 days.

Section 213.758(6), F.S., is amended to clarify that the maximum tax liability of the transferee is
the fair market value or purchase price paid for the business, whichever is greater, net of any
liens or liability to non-insiders.

Injunctions
This bill requires 20 days written notice to a taxpayer before the Department of Legal Affairs
may seek an injunction from a circuit court to enjoin further business activity by the taxpayer on
the grounds of failure to pay taxes. Current law does not require notice before a court issues an
injunction.

If a transferee is liable for unpaid tax, the bill requires that after receiving written notice by DOR
of unpaid tax the transferee has 60 days to pay the tax, after which time they may not engage in
any business activity within the until the tax liability is paid. However, a transferee may continue
to do business if the transferee files an action as provided in ch. 72, F.S.; although a court may
require the transferee to post a bond or other security.

The bill also requires 20 days written notice to a transferee before the Department of Legal
Affairs may seek an injunction from a circuit court to enjoin further business activity by the
transferee on the grounds of failure to pay taxes. Current law does not require a 60-day time
period to pay taxes or a 20-day notice before a court issues an injunction.

Definitions
The bill creates definitions for the terms “business,” “financial institution,” “insider,” “stock of
goods,” and “tax.” The existing definition of “transfer” is expanded to include that a business is
transferred when there is a transfer of more than 50 percent of the business, the assets of the
business, or the stock of goods of the business.

Rulemaking
The bill removes the grant of rulemaking authority to DOR provided in s. 213.758(9), F.S.
BILL: SB 1384 Page 4

Repeal of Statutes
Section 3 repeals s. 202.31, F.S. which relates to the transfer of sales and use tax liability, and
Section 4 repeals s. 212.10, F.S., which relates to the transfer of communications services tax
liability. With the creation of s. 213.758, F.S., in 2010 and the changes proposed in Section 1 of
the bill, these two statutes are no longer necessary. The repeal of these statutes eliminates the
misdemeanor penalty provisions for violations of these statutes.

Cross-References
Section 2 amends s. 213.053, F.S., to correct a cross-reference.

Effective Date
Section 5 provides an effective date of July 1, 2011.

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

Article VII, s. 18 of the Florida Constitution, excuses counties and municipalities from
complying with laws requiring them to spend funds or to take an action unless certain
conditions are met.

The Revenue Estimating Conference estimated that the bill would have an indeterminate
negative fiscal impact annually on local governments. It is unknown at this time if the bill
would meet the exemption provided in subsection (d); however, the bill may be exempt
from the mandates prohibition if the bill were to be passed by 2/3 of the membership of
each chamber.

B. Public Records/Open Meetings Issues:

None.

C. Trust Funds Restrictions:

None.
BILL: SB 1384 Page 5

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

The Revenue Estimating Conference met on March 11, 2011, and adopted an
indeterminate negative fiscal impact on state and local revenues for the bill.

B. Private Sector Impact:

The bill clarifies the conditions under which a transferee may be liable for unpaid tax of a
transferor.

C. Government Sector Impact:

None.

VI. Technical Deficiencies:

None.

VII. Related Issues:

Section 220.829, F.S., governs the transfer of tax liability for corporate income taxes.

VIII. Additional Information:

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

None.

B. Amendments:

None.

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

BILL: SB 1424
INTRODUCER: Senator Benacquisto
SUBJECT: Telemarketing
DATE: April 11, 2011 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. McCarthy Cooper CM Pre-meeting
2. BC
3.
4.
5.
6.

I. Summary:

Section 501.604(10), F.S., exempts business-to-business sales, where:
The commercial telephone seller has been operating continuously for at least 3 years
under the same business name and has at least 50 percent of its dollar volume consisting
of repeat sales to existing businesses;
The purchaser business intends to resell or offer for purposes of advertisement or as a
promotional item the property or goods purchased; or
The purchaser business intends to use the property or goods purchased in a recycling,
reuse, remanufacturing, or manufacturing process.

This bill deletes these conditions, thereby exempting all business-to-business sales from the
Florida Telemarketing Act with the exceptions noted in the act relating to filing a notarized
affidavit of exemption with the Department of Agriculture and Consumer Services (DACS),
displaying the affidavit of exemption at its business location, regulations regarding the timing of
calls, and blocking of the seller identity.

This bill substantially amends the following sections of the Florida Statutes: 501.604.

II. Present Situation:

The Florida Telemarketing Act requires non-exempt businesses and their salespersons that
engage in the sale of consumer goods or services by telephone in Florida to register with DACS
and pay a fee. A commercial telephone seller is a person who engages in commercial telephone
solicitation on his or her own behalf or through salespersons. A salesperson is any individual
employed, appointed, or authorized by a commercial telephone seller, regardless of whether the
BILL: SB 1424 Page 2

commercial telephone seller refers to the individual as an agent, representative, or independent
contractor, who attempts to solicit or solicits a sale on behalf of the commercial telephone seller.

Section 501.604(10), F.S., exempts business-to-business sales, where:
The commercial telephone seller has been operating continuously for at least 3 years
under the same business name and has at least 50 percent of its dollar volume consisting
of repeat sales to existing businesses;
The purchaser business intends to resell, or offer for purposes of advertisement or as a
promotional item, the property or goods purchased; or
The purchaser business intends to use the property or goods purchased in a recycling,
reuse, remanufacturing, or manufacturing process.

However, exempt businesses must:
file an affidavit of exemption with DACS; 1
must display the affidavit of exemption at its business location;2
comply with regulations regarding the timing of calls which prohibit commercial calls
before 8 a.m. or after 9:00 p.m.;3 and
avoid the intentional blocking of the seller identity - commercial telephone caller may
not take any intentional action to prevent transmission of the telephone solicitor’s name
or telephone number to the party called when the equipment is capable to providing the
information.4

III. Effect of Proposed Changes:

Section 1 amends s. 501.604(10), F.S., to exempt all business-to-business sales from complying
with the Florida Telemarketing Act. However, these exempt businesses will still be required to
comply with filing a notarized affidavit of exemption with DACS, display the affidavit of
exemption at its business location, and comply with regulations regarding the timing of calls and
blocking of the seller identity.

Section 2 provides an effective date July 1, 2011.

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

None.

B. Public Records/Open Meetings Issues:

None.

1
Section 501.608(1)(b), F.S.
2
Section 501.608(2), F.S.
3
Section 501.616(6), F.S.
4
Section 501.616(7), F.S.
BILL: SB 1424 Page 3

C. Trust Funds Restrictions:

None.

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

This bill has the potential to reduce fees to DACS depending on how many individuals it
would effect. In its analysis of this bill, DACS has not shown any decrease in revenue
based on this bill.5

B. Private Sector Impact:

Currently an applicant for licensure as a commercial telephone seller must pay a $1,500
fee, and post a bond, letter of credit, or certificate of deposit in a minimum amount of
$50,000.67 A salesperson must also pay a $50 licensing fee if he is working for a non-
exempt entity that falls under the telemarketing act.

This bill could eliminate the costs associated with registering with DACS under the
Telemarketing Statute for those companies who would not currently have qualified under
existing law. This bill would also eliminate the $50 licensing fee per salesman.

C. Government Sector Impact:

None.

VI. Technical Deficiencies:

None.

VII. Related Issues:

None.

VIII. Additional Information:

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

None.

B. Amendments:

None.

5
DACS analysis on file with the Senate Commerce and Tourism Committee dated March 3, 2011.
6
Section 501.605(5)(b), F.S.
7
Section 501.611(2), F.S.
BILL: SB 1424 Page 4

This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1542

Ì899100uÎ899100

LEGISLATIVE ACTION
Senate . House
.
.
.
.
.

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

1 Senate Amendment (with title amendment)
2
3 Between lines 33 and 34
4 insert:
5 Section 1. Subsection (8) of section 220.02, Florida
6 Statutes, is amended to read:
7 220.02 Legislative intent.—
8 (8) It is the intent of the Legislature that credits
9 against either the corporate income tax or the franchise tax be
10 applied in the following order: those enumerated in s. 631.828,
11 those enumerated in s. 220.191, those enumerated in s. 220.181,
12 those enumerated in s. 220.183, those enumerated in s. 220.182,

Page 1 of 5
4/11/2011 8:51:04 AM 577-04104-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1542

Ì899100uÎ899100

13 those enumerated in s. 220.1895, those enumerated in s. 221.02,
14 those enumerated in s. 220.184, those enumerated in s. 220.186,
15 those enumerated in s. 220.1845, those enumerated in s. 220.19,
16 those enumerated in s. 220.185, those enumerated in s. 220.1875,
17 those enumerated in s. 220.192, those enumerated in s. 220.193,
18 those enumerated in s. 288.9916, those enumerated in s.
19 220.1899, and those enumerated in s. 220.1896, and those
20 enumerated in s. 220.1877.
21 Section 2. Paragraph (a) of subsection (1) of section
22 220.13, Florida Statutes, is amended to read:
23 220.13 “Adjusted federal income” defined.—
24 (1) The term “adjusted federal income” means an amount
25 equal to the taxpayer’s taxable income as defined in subsection
26 (2), or such taxable income of more than one taxpayer as
27 provided in s. 220.131, for the taxable year, adjusted as
28 follows:
29 (a) Additions.—There shall be added to such taxable income:
30 1. The amount of any tax upon or measured by income,
31 excluding taxes based on gross receipts or revenues, paid or
32 accrued as a liability to the District of Columbia or any state
33 of the United States which is deductible from gross income in
34 the computation of taxable income for the taxable year.
35 2. The amount of interest which is excluded from taxable
36 income under s. 103(a) of the Internal Revenue Code or any other
37 federal law, less the associated expenses disallowed in the
38 computation of taxable income under s. 265 of the Internal
39 Revenue Code or any other law, excluding 60 percent of any
40 amounts included in alternative minimum taxable income, as
41 defined in s. 55(b)(2) of the Internal Revenue Code, if the

Page 2 of 5
4/11/2011 8:51:04 AM 577-04104-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1542

Ì899100uÎ899100

42 taxpayer pays tax under s. 220.11(3).
43 3. In the case of a regulated investment company or real
44 estate investment trust, an amount equal to the excess of the
45 net long-term capital gain for the taxable year over the amount
46 of the capital gain dividends attributable to the taxable year.
47 4. That portion of the wages or salaries paid or incurred
48 for the taxable year which is equal to the amount of the credit
49 allowable for the taxable year under s. 220.181. This
50 subparagraph shall expire on the date specified in s. 290.016
51 for the expiration of the Florida Enterprise Zone Act.
52 5. That portion of the ad valorem school taxes paid or
53 incurred for the taxable year which is equal to the amount of
54 the credit allowable for the taxable year under s. 220.182. This
55 subparagraph shall expire on the date specified in s. 290.016
56 for the expiration of the Florida Enterprise Zone Act.
57 6. The amount of emergency excise tax paid or accrued as a
58 liability to this state under chapter 221 which tax is
59 deductible from gross income in the computation of taxable
60 income for the taxable year.
61 7. That portion of assessments to fund a guaranty
62 association incurred for the taxable year which is equal to the
63 amount of the credit allowable for the taxable year.
64 8. In the case of a nonprofit corporation which holds a
65 pari-mutuel permit and which is exempt from federal income tax
66 as a farmers’ cooperative, an amount equal to the excess of the
67 gross income attributable to the pari-mutuel operations over the
68 attributable expenses for the taxable year.
69 9. The amount taken as a credit for the taxable year under
70 s. 220.1895.

Page 3 of 5
4/11/2011 8:51:04 AM 577-04104-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1542

Ì899100uÎ899100

71 10. Up to nine percent of the eligible basis of any
72 designated project which is equal to the credit allowable for
73 the taxable year under s. 220.185.
74 11. The amount taken as a credit for the taxable year under
75 s. 220.1875. The addition in this subparagraph is intended to
76 ensure that the same amount is not allowed for the tax purposes
77 of this state as both a deduction from income and a credit
78 against the tax. This addition is not intended to result in
79 adding the same expense back to income more than once.
80 12. The amount taken as a credit for the taxable year under
81 s. 220.192.
82 13. The amount taken as a credit for the taxable year under
83 s. 220.193.
84 14. Any portion of a qualified investment, as defined in s.
85 288.9913, which is claimed as a deduction by the taxpayer and
86 taken as a credit against income tax pursuant to s. 288.9916.
87 15. The costs to acquire a tax credit pursuant to s.
88 288.1254(5) that are deducted from or otherwise reduce federal
89 taxable income for the taxable year.
90 16. The amount equal to the credit claimed for the taxable
91 year under s. 220.1877. The addition in this subparagraph is
92 intended to ensure that the same amount is not allowed for tax
93 purposes of this state as both a deduction from income and a
94 credit against the tax. This addition is not intended to result
95 in adding the same expense back to income more than once.
96
97 ================= T I T L E A M E N D M E N T ================
98 And the title is amended as follows:
99 Between lines 2 and 3

Page 4 of 5
4/11/2011 8:51:04 AM 577-04104-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1542

Ì899100uÎ899100

100 insert:
101 amending s. 220.02, F.S.; adding the tax credit
102 allowed under the Florida Public School Tax Credit
103 Program to the tax credits that are applied against
104 the corporate income tax; amending s. 220.13, F.S.;
105 redefining the term “adjusted federal income” to
106 include the public school funding tax credit;
107 prohibiting a taxpayer from receiving a credit greater
108 than the amount of the contribution;

Page 5 of 5
4/11/2011 8:51:04 AM 577-04104-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1542

Ì801604wÎ801604

LEGISLATIVE ACTION
Senate . House
.
.
.
.
.

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

1 Senate Amendment (with title amendment)
2
3 Delete line 192
4 and insert:
5 Section 2. The Department of Revenue is authorized and all
6 conditions are deemed met, to adopt emergency rules pursuant to
7 ss. 120.536(1) and 120.54, Florida Statutes, to administer the
8 provisions of this act. The emergency rules shall remain in
9 effect for 6 months after the rules are adopted and the rules
10 may be renewed during the pendency of procedures to adopt
11 permanent rules addressing the subject of the emergency rules.
12 Section 3. This act shall take effect January 1, 2012.

Page 1 of 2
4/11/2011 8:52:35 AM 577-04109-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1542

Ì801604wÎ801604

13
14 ================= T I T L E A M E N D M E N T ================
15 And the title is amended as follows:
16 Delete line 30
17 and insert:
18 limitation; authorizing the Department of Revenue to
19 adopt emergency rules to administer the act; providing
20 an effective date.

Page 2 of 2
4/11/2011 8:52:35 AM 577-04109-11
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 Commerce and Tourism Committee

BILL: SB 1542
INTRODUCER: Senator Siplin
SUBJECT: Corporate Income Tax Credits
DATE: April 11, 2011 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Pugh Cooper CM Pre-meeting
2. ED
3. BC
4.
5.
6.

I. Summary:

Florida currently offers state tax credits in exchange for business contributions to the Florida Tax
Credit Scholarship Program, designed to assist low-income students who attend private schools.
This program is capped at $140 million for FY 10-11.

SB 1542 would create a similar credit against corporate income tax liabilities for businesses that
make contributions to Florida public schools, to support educational expenses or tutoring,
mentoring, or extracurricular programs, or other specified purposes.

The tax credit is equal to 100 percent of the contribution but may not exceed 75 percent of the
contributor’s tax liability after all other credits for which the contributor is eligible have been
taken. The tax credits are capped at $118 million per state fiscal year.

Recipient schools must use the contributions for the purposes selected by the contributors, except
that any undesignated contributions may be used as determined by the schools, relying upon
recommendations of the applicable school advisory councils. Also, each recipient school must
annually report to the Department of Revenue (DOR) information about the amount and number
of contributions it received the previous calendar year, and how much it spent.

Unused credits may be carried forward for up to 3 years, and a taxpayer’s credits may not be
transferred to another entity unless all of the original taxpayer’s assets are transferred in the same
transaction to the other entity.

SB 1542 creates s. 220.1877, F.S.
BILL: SB 1542 Page 2

II. Present Situation:

The Corporate Income Tax Credit Scholarships for K-12 Students
The Legislature established the Corporate Income Tax Credit Scholarship Program in 20011 to
expand educational opportunities for low-income students.2 The program enables these students
to attend private schools using scholarships financed with contributions from businesses, in
exchange for those businesses receiving 100 percent of their contributions as a credit against
their corporate income3 or insurance premium tax4 liabilities, as a credit against businesses
eligible for direct payment of sales and use taxes,5 the excise taxes owed on oil or natural gas
production,6 on malt beverages, and on other alcoholic beverages.7

Businesses participating in the scholarship program make contributions to non-profit scholarship
funding organizations (SFOs), and receive tax credits equal to the amount of these contributions,
not to exceed 75 percent of their corporate or premium insurance tax liabilities. The maximum
amount of tax credits that may be granted annually under the program was capped originally at
$50 million, but over the years that cap has increased so that for FY 10-11, the cap is $140
million.8

As of November 2010, there were 1,073 private schools in 60 counties serving 32,320 students
who received scholarships under this program.9 More information is available on the 2009-2010
school year; according to a report compiled by the Florida Department of Education’s school
choice website:10
28,927 students received scholarships;
1,033 private schools – of which 79 percent were described as “religious” and 21 percent
as “non-religious – participated in the program;
Each scholarship was valued at $3,950;
A total of $106 million in contributions were made by businesses, who later received tax
credits; and
Four SFOs participated in the 2009-2010 school year – Step Up For Students, based in
Jacksonville; The Carrie Meek Foundation, based in Tampa; Lightbearers, Inc., based in
Daytona Beach; and Educate Today, based in Tampa.

1
Originally s. 220.187, F.S. (ch. 2000-225, L.O.F.); however, this section was transferred in 2010 to s. 1002.395, F.S. (ch.
2010-24, L.O.F.)
2
Information in this section about the Corporate Income Tax Credit Scholarship Program was taken from Report No. 08-68
“The Corporate Income Tax Credit Scholarship Program Saves State Dollars,” prepared by the Office of Program Policy
Analysis & Government Accountability. Published in December 2008.
3
Section 220.1875, F.S.
4
Section 624.51055, F.S.
5
Section 212.1831, F.S. Eligible companies are those whose operations do not collect sales taxes nor lend themselves to
immediate computation of sales taxes owed. The best example is an interstate trucking company that leases its vehicles.
Because the trucks may drive through multiple states as they deliver goods, the lessee must wait until the end of each month
to calculate, for Florida tax purposes, how many miles were driven in Florida to compute the state sales tax owed on the
lease.
6
Section 211.0251, F.S.
7
Section 561.1211, F.S.
8
Section 1002.395(5)(a)1., F.S. Subsequent subparagraphs describe how the cap is calculated in subsequent fiscal years.
9
See http://www.floridaschoolchoice.org/Information/CTC/quarterly_reports/ftc_report_nov2010.pdf.
10
See http://www.floridaschoolchoice.org/Information/CTC/files/ctc_fast_facts.pdf.
BILL: SB 1542 Page 3

Tax Credit Information
Because the amount of tax credits is capped, corporations must apply, and DOR must approve,
the tax credits prior to the companies, which made eligible contributions, claiming the credits on
their tax returns.

According to information provided by DOR, for the state’s 2010-11 fiscal year, where the credit
allocation process for this scholarship program began on January 1, 2010, the following credit
allocations were made to 104 different taxpayers:
$70.79 million for corporate income tax liability;
$21.90 million for insurance premium tax liability;
$38.9 million for the malt beverage excise tax liability; and
$8.14 million for the liquor and other alcoholic beverage excise tax liability.

DOR says most of the taxpayers have not yet filed their tax returns, because of the difference in
tax year and fiscal year for corporations and because of the longer filing period for corporations.

Private Contributions to K-12 Public Schools in Florida
Sixty of Florida’s 67 school districts have direct-support organizations called “education
foundations” that serve as direct support organizations for the districts. The statewide
Consortium of Florida Education Foundations (CFEF)11 claims in its 2009-2010 annual report
that nearly $40 million was contributed to Florida public schools in FY 2008-2009. The CFEF
supports programs promoting literacy and STEM (Science, Technology, Engineering & Math)
education, as well as assistance for low-performing students and support for career and technical
education.

Additionally, the state Department of Education reported that school districts maintain an
account for “gifts, grants, and bequests,” which likely includes contributions. The total reported
in FY 2009-2010 was $11,664,313.12

III. Effect of Proposed Changes:

SB 1542 creates the Florida Public School Tax Credit Program, by which businesses subject to
the state corporate income or insurance premium tax may receive credits against those liabilities
by contributing to Florida public schools. The program is capped at $118 million per fiscal year.
The tax credit is equal to 100 percent of the contribution but may not exceed 75 percent of the
contributor’s tax liability after all other credits for which the contributor is eligible have been
taken.

Section 1: Creates s. 220.1877, F.S., which outlines a program awarding state tax credits for
contributing tax credits to public schools to defray school expenses and sponsor other programs.
SB 1542 includes definitions of terms used, and expresses a number of legislative findings about
the importance of expanding educational opportunities and improving the quality of educational
services in state, so that children will receive higher-quality educations.

11
Website at http://www.cfef.net/.
12
Information on file with the Senate Commerce Committee.
BILL: SB 1542 Page 4

Uses of contributions
The contributions may be used to pay for a public school’s educational expense or for the
school’s programs related to:
Special assistance;
Tutoring;
The Foundation for Florida’s Future;13
Mentoring;
Extracurricular activities;
Character education; and
Pay-to-play fees for sports programs.

The contributing business may designate the specific use to which its contribution must be
applied. However, each public school that receives contributions not designated for a specific
purpose can determine how the contributions are used. The school’s advisory council may make
recommendations as to how best to apply undesignated contributions.

All eligible contributions received by a public school shall be deposited in a manner consistent
with s. 17.57(2), F.S.

Reporting Requirement
SB 1542 requires each public school that receives fees or a cash contribution to report to DOR,
in a form prescribed by DOR, the following information;
The total number of fee and cash contribution payments received during the previous
calendar year;
The total dollar amount of fees and contributions received during the previous calendar
year; and
The total dollar amount from fees and contributions received that were spent by the
public school during the previous calendar year.

Administration of Tax Credits
The bill creates a tax credit equal to 100 percent of an eligible contribution to a Florida public
school against any tax due in a taxable year from a contributing business. The credit is allowed
against the corporate income tax liabilities taxes imposed in ch. 220, F.S., during the same
taxable year as the contribution was made. However, such a credit may not exceed 75 percent of
the tax due under this chapter for the taxable year, after the application of any other allowable
credits by the taxpayer. This new tax credit must be reduced by the difference between the
amount of federal corporate income tax owed by the contributing taxpayer, taking into account
the credit, and the amount of federal corporate income tax without application of this credit.

The amount of new tax credits and carryforward tax credits available each fiscal year is capped
at $118 million, for this new program and for the tax credits available to insurance companies
participating in the Corporate Income Tax Credit Scholarship Program for private school
students, pursuant to s. 624.51055, F.S. Insurers who participate in the private-school scholarship
program will not be able to participate in this new program.

13
Information about the foundation is at http://www.foundationforfloridasfuture.org/. Site last visited April 8, 2011.
BILL: SB 1542 Page 5

DOR is authorized to apportion to each district school board the total dollar amount of tax credits
available to taxpayers who make eligible contributions to a public school in the school board’s
district. The apportionment will be calculated based on multiplying each school district’s
percentage of the previous fiscal year’s statewide total number of unweighted, full-time
equivalent students times $118 million. The applicable dollar amount resulting from the
calculation for each school district will be apportioned to the school board for allocation by DOR
to taxpayers in accordance with DOR rules adopted to implement this provision.

An eligible business who files a Florida consolidated return as a member of an affiliated group
pursuant to s. 220.131(1), F.S., may be allowed the credit on a consolidated return basis;
however, the total credit taken by the affiliated group is subject to the same 75- percent
limitation. A business can only transfer its credits earned under this program to another entity if
all of the business’ assets are transferred in the same transaction to the other entity. Eligible
taxpayers also may choose, beginning with the January 1, 2012, tax year for corporations, to
rescind their share of the tax credit, with DOR approval, with the rescinded amount becoming
available under the cap for other eligible taxpayers to claim, on a first-come, first-served basis.

Finally, a business may carry forward any unused credits, because of insufficient tax liability, for
up to 3 years. This applies to tax credits awarded on the basis of contributions made after January
1, 2012.

DOR and the Department of Education are authorized to develop a cooperative agreement to
assist in the administration of this new tax credit/scholarship program, and to adopt any
necessary rules. Specifically, DOR is authorized to adopt rules to implement the new program,
including rules establishing application forms and procedures, and governing the allocation of
tax credits and carryforward credits on a first-come, first-served basis.

Preservation of Credits
SB 1542 specifies that if any provision or portion of the bill related to tax credits is held
unconstitutional by any court or is otherwise declared invalid, the unconstitutionality or
invalidity shall not affect any credits earned by any taxpayer, with respect to any contribution
paid to a public school before the date of a determination of unconstitutionality or invalidity.
Such credit shall be allowed as if a determination of unconstitutionality or invalidity had not
been made, provided that nothing in this bill, or in combination with any other provision of law,
results in the allowance of any credit to any taxpayer in excess of $1 of credit for each dollar
paid to a public school.

Section 2: Provides an effective date of July 1, 2011.

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

None.

B. Public Records/Open Meetings Issues:

None.
BILL: SB 1542 Page 6

C. Trust Funds Restrictions:

None.

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

The Revenue Estimating Conference has not met to evaluate SB 1542. The bill caps the
annual amount of tax credits that could be awarded and claimed at $118 million under the
new Florida Public School Tax Credit Program and that portion of the separate Corporate
Income Tax Credit Scholarship Program that is claimed by insurance companies against
their premium insurance tax liabilities. As noted above in Section II, DOR has calculated
that insurers who contributed to the private school scholarship program are eligible to
receive nearly $22 million in tax credits. This means that the new public school
contribution program could actually generate only $96 million for contributing
businesses. If the full amount of $118 million was contributed to public schools, then the
contributing businesses would receive less than a $1-to-$1 exchange rate for their
contributions.

B. Private Sector Impact:

Indeterminate, but likely positive for those businesses that choose to participate.

C. Government Sector Impact:

Indeterminate. DOR is likely to incur some costs in administering the new program.

VI. Technical Deficiencies:

DOR staff has identified a number of technical deficiencies related to accounting for the tax
credits on tax returns. The sponsor’s staff has indicated an amendment will be prepared to
address these issues.

VII. Related Issues:

None.

VIII. Additional Information:

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

None.

B. Amendments:

None.
BILL: SB 1542 Page 7

This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1610

Ì166334'Î166334

LEGISLATIVE ACTION
Senate . House
.
.
.
.
.

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

1 Senate Amendment (with title amendment)
2
3 Delete lines 19 - 42
4 and insert:
5 448.110(5)(a).
6 Section 2. Present subsections (3) through (11) of section
7 448.110, Florida Statutes, are renumbered as subsections (4)
8 through (12), respectively, a new subsection (3) is added to
9 that section, and paragraph (a) of present subsection (4) and
10 paragraph (a) of present subsection (6) of that section are
11 amended, to read:
12 448.110 State minimum wage; annual wage adjustment;

Page 1 of 4
4/11/2011 8:54:44 AM CM.CM.04159
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1610

Ì166334'Î166334

13 enforcement.—
14 (3) As used in this section, the term:
15 (a) "Adjusted real wage rate" means the wage rate
16 establishing purchasing power parity with the base-period wage
17 rate of $6.15 set pursuant to subsection (4).
18 (b) "Federal minimum wage rate" means the minimum wage rate
19 set by the Federal Government.
20 (c) "CPI-W" means the Consumer Price Index for Urban Wage
21 Earners and Clerical Workers for the South Region, not
22 seasonally adjusted, or a successor index as calculated by the
23 United States Department of Labor.
24 (5)(4)(a) Beginning September 30, 2005, and annually on
25 September 30 thereafter, the Agency for Workforce Innovation
26 shall calculate an adjusted real state minimum wage rate by
27 using increasing the state minimum wage by the rate of inflation
28 for the 12 months before prior to September 1. In calculating
29 the adjusted real state minimum wage rate, the agency shall
30 calculate the rate of inflation by computing the percentage
31 change in the CPI-W. Each year the rate of inflation is
32 multiplied by the previous year's computed adjusted real wage
33 rate. This amount shall be added to or subtracted from the
34 previous year's computed adjusted real wage rate use the
35 Consumer Price Index for Urban Wage Earners and Clerical
36 Workers, not seasonally adjusted, for the South Region or a
37 successor index as calculated by the United States Department of
38 Labor. The computed adjusted real wage rate becomes the Florida
39 minimum wage, as defined in s. 448.109(1)(b), when both the
40 previous year's Florida minimum wage rate and the current
41 federal minimum wage rate are lower than the adjusted real wage

Page 2 of 4
4/11/2011 8:54:44 AM CM.CM.04159
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1610

Ì166334'Î166334

42 rate. If the adjusted real wage rate is lower than the previous
43 year's Florida minimum wage and lower than the federal minimum
44 wage rate, then the higher of the two shall be the Florida
45 minimum wage for the subsequent year. The adjusted real wage
46 rate shall be the only basis used for calculating the subsequent
47 year's adjusted real wage rate. Each Florida adjusted state
48 minimum wage rate shall take effect on the following January 1,
49 with the initial adjusted minimum wage rate to take effect on
50 January 1, 2006.
51 (7)(6)(a) Any person aggrieved by a violation of this
52 section may bring a civil action in a court of competent
53 jurisdiction against an employer violating this section or a
54 party violating subsection (6) (5). However, prior to bringing
55 any claim for unpaid minimum wages pursuant to this section, the
56 person aggrieved shall notify the employer alleged to have
57 violated this section, in writing, of an intent to initiate such
58 an action. The notice must identify the minimum wage to which
59 the person aggrieved claims entitlement, the actual or estimated
60 work dates and hours for which payment is sought, and the total
61 amount of alleged unpaid wages through the date of the notice.
62
63 ================= T I T L E A M E N D M E N T ================
64 And the title is amended as follows:
65 Delete lines 5 - 7
66 and insert:
67 calculating the adjusted real wage rate and its
68 application as the Florida minimum wage when both the
69 previous year's Florida minimum wage and the Federal
70 minimum wage are lower; providing definitions;

Page 3 of 4
4/11/2011 8:54:44 AM CM.CM.04159
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1610

Ì166334'Î166334

71 conforming a cross-reference;

Page 4 of 4
4/11/2011 8:54:44 AM CM.CM.04159
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 Commerce and Tourism Committee

BILL: SB 1610
INTRODUCER: Senator Detert
SUBJECT: State Minimum Wage
DATE: April 11, 2011 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Hrdlicka Cooper CM Pre-meeting
2. GO
3. BC
4.
5.
6.

I. Summary:

The Agency for Workforce Innovation is required to annually calculate and publish the state
minimum wage. SB 1610 provides greater specificity to the Agency for Workforce Innovation to
calculate the state minimum wage.

This bill amends ss. 448.109 and 448.110, F.S.

II. Present Situation:

A constitutional amendment to Florida’s Constitution took effect on May 2, 2005, which
established the state minimum wage.1 The Legislature enacted the Florida Minimum Wage Act
in 2005 to implement the constitutional provisions.2

The Agency for Workforce Innovation (AWI) is required to annually calculate and publish the
state minimum wage. Current law requires employers to pay employees a minimum wage at an
hourly rate published by AWI for all hours worked in Florida. Only those individuals entitled to
receive the federal minimum wage under the federal Fair Labor Standards Act and its
implementing regulations are eligible to receive the state minimum wage.

Minimum Wage Calculation
AWI must calculate an adjusted state minimum wage rate by increasing the state minimum wage
by the rate of inflation for the 12 months prior to September 1. In calculating the adjusted state

1
Section 24, Art. X, of the State Constitution.
2
Chapter 2005-353, L.O.F.
BILL: SB 1610 Page 2

minimum wage, AWI must use the Consumer Price Index (CPI) for Urban Wage Earners and
Clerical Workers, not seasonally adjusted, for the South Region.3 Neither the statute nor the
Constitution specifically address deflation in the computation of the minimum wage.

In interpreting the intent of the Legislature to calculate a state minimum wage, AWI computes
the percentage change in the CPI for the 12 months prior to September 1 and multiplies it times
the prior year’s computed Adjusted Real Wage Rate. This provides the amount to be added to, or
subtracted from, the previous year’s computed Adjusted Real Wage Rate.

The higher of the previous year’s state minimum wage, the Adjusted Real Wage Rate, or the
Federal minimum wage rate4 becomes the state minimum wage for the year. The state minimum
wage takes effect on the following January 1, unless a new Federal minimum wage rate is issued
and that rate is higher. For example, on July 24, 2009, the new Federal minimum wage rate of
$7.25 became the new adjusted state minimum wage rate because it was higher than the state
minimum wage rate at the time of $7.21.

AWI’s method for calculating the state minimum wage rate is currently the subject of a lawsuit.
Florida Legal Services and the National Employment Law Project recently filed the lawsuit on
behalf of four individual workers and three organizations that represent low-wage employees.5
The plaintiffs claim that AWI should not have accounted for the decrease in the CPI (deflation)
in 2009 when calculating future years' minimum wages. The case is currently pending.

III. Effect of Proposed Changes:

This bill amends the state minimum wage statutes to provide greater specificity to AWI in its
calculation of the state minimum wage. The bill clarifies that the state minimum wage cannot
drop when there is deflation, but that AWI should account for deflation when computing future
rates. Additionally, the bill clarifies the relationship between the Federal minimum wage and the
state minimum wage.

Section 2 amends s. 448.110, F.S., to provide greater specificity to AWI as to how to calculate
the state minimum wage. AWI is directed to first calculate the difference between the CPI from
August of the previous year and then August of the current year. The difference will be the rate
of inflation or deflation. The difference is then applied to the previous year’s wage rate
calculation to create the Adjusted Real Wage Rate. This method allows for parity between the
Adjusted Real Wage Rate and the cost of living.

The bill specifies that the Adjusted Real Wage Rate becomes the state minimum wage when both
the previous year’s state minimum wage and the Federal minimum wage are lower than the
Adjusted Real Wage Rate.

Section 1 amends s. 448.109, F.S. to include a cross-reference.

Section 3 provides an effective date of July 1, 2011.
3
Section 448.110(4)(a), F.S.
4
29 U.S.C. 206. See 29 U.S.C. 218(a) , which permits a state minimum wage higher than the federal wage.
5
Cadet, et. al. v. Florida Agency for Workforce Innovation, 37 2011 CA 000072 (2nd Cir. Fla., 2011).
BILL: SB 1610 Page 3

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

None.

B. Public Records/Open Meetings Issues:

None.

C. Trust Funds Restrictions:

None.

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

None.

B. Private Sector Impact:

None. This bill does not change the manner in which the state minimum wage is currently
calculated.

C. Government Sector Impact:

None.

VI. Technical Deficiencies:

The Agency for Workforce Innovation reports that the current bill still does not provide enough
clarity to the minimum wage rate calculation.

VII. Related Issues:

None.

VIII. Additional Information:

A. Committee Substitute – Statement of Substantial 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 - 2011 COMMITTEE AMENDMENT
Bill No. SB 1772

Ì295640$Î295640

LEGISLATIVE ACTION
Senate . House
.
.
.
.
.

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

1 Senate Amendment (with title amendment)
2
3 Delete lines 26 - 101
4 and insert:
5 Section 2. Subsections (1), (3), and (8) of section 83.806,
6 Florida Statutes, are amended to read:
7 83.806 Enforcement of lien.—An owner’s lien as provided in
8 s. 83.805 may be satisfied as follows:
9 (1) The tenant shall be notified by written notice
10 delivered in person or by first-class certified mail, along with
11 a certificate of mailing, to the tenant’s last known address and
12 conspicuously posted at the self-service storage facility or on

Page 1 of 2
4/7/2011 5:56:33 PM 577-04009-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1772

Ì295640$Î295640

13 the self-contained storage unit.
14 (3) Any notice given pursuant to this section shall be
15 presumed delivered when it is deposited with the United States
16 Postal Service, registered, and properly addressed with postage
17 prepaid.
18 (8) In the event of a sale under this section, the owner
19
20 ================= T I T L E A M E N D M E N T ================
21 And the title is amended as follows:
22 Delete lines 8 - 9
23 and insert:
24 of mailing; allowing electronic mail notice;

Page 2 of 2
4/7/2011 5:56:33 PM 577-04009-11
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 Commerce and Tourism Committee

BILL: SB 1772
INTRODUCER: Senator Hays
SUBJECT: Self-service storage facilities
DATE: April 11, 2011 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. McCarthy Cooper CM Pre-meeting
2. CA
3. JU
4.
5.
6.

I. Summary:

This bill changes the notice requirements related to enforcing an owner’s lien against goods
stored in a self-service storage facility. Specifically, it allows for postal notice by first-class mail,
along with a certificate of mailing, rather than certified mail; allows electronic mail notice; and
deletes the requirement that the sale or disposition of the property be advertised or posted in the
neighborhood where the storage facility is located.

In addition, it expands the provision relating to the right to create contractual liens or limitations
on liability.

This bill substantially amends the following sections of the Florida Statutes: 83.803, 83.806, and
83.808.

II. Present Situation:

The Florida Self-storage Facility Act (act) controls the relationship between the owner of a self
storage facility and a tenant who has entered into an agreement with him. This act controls the
enforcement of an owners lien, including the notice requirements for the advertisement of sale of
the personal property of the tenant who is in default.1

1
Part III of ch. 83, F.S.
BILL: SB 1772 Page 2

Currently the last known address is defined in s. 83.803, F.S., as the address provided by the
tenant in the latest rental agreement or the address provided by the tenant by hand delivery, or
certified mail in a subsequent written notice of a change of address.2

With respect to the enforcement of lien, the tenant must be notified by written notice delivered in
person or by certified mail to the tenant’s last known address, and conspicuously posted at the
self-service storage facility or on the self-contained storage unit.3 The notice must include:
An itemized statement of the owner’s claim;
A description of the personal property;
A demand for payment within a specified time, not less than 14 days after delivery of the
notice;
A conspicuous statement that unless the claim is paid within the time stated in the notice
the personal property will be advertised for sale or other disposition and will be sold or
otherwise disposed of at a specified time and place; and
The name, street address, and telephone number of the owner whom the tenant may
contact to respond to the notice.

Any notice given in the enforcement action is presumed delivered when it is deposited with the
United States Postal Service, registered, and properly addressed with postage prepaid.4

After the expiration of the time given in the notice, an advertisement of the sale or other
disposition must be published once a week for 2-consecutive weeks in a newspaper of general
circulation in the area where the self-service storage facility or self-contained storage unit is
located. Inasmuch as any sale may involve property of more than one tenant, a single
advertisement may be used to dispose of property at any one sale.5

In the event of a sale, the owner must provide a notice of any balance remaining to the tenant
either in person or by certified mail. The owner must also provide a notice of the amount of the
sale proceeds to the tenant or secured lienholders in person or by certified mail.6

If there is no newspaper of general circulation in the area where the self-service storage facility
or self-contained storage unit is located, the advertisement shall be posted at least 10 days before
the date of the sale or other disposition in not fewer than three conspicuous places in the
neighborhood where the self-service storage facility or self-contained storage unit is located.7

Section 83.808, F.S., specifically provides that nothing in the Self-storage Facility Act should be
construed as in any manner impairing or affecting the right of parties to create liens by special
contract or agreement, or in any manner impair or affect any other lien arising at common law, in

2
Section 83.303(6), F.S.
3
See U.S. Postal Service http://www.usps.com/send/waystosendmail/extraservices/certifiedmailservice.htm (last visited April
8, 2011).
4
See U.S. Postal Service http://www.usps.com/send/waystosendmail/extraservices/registeredmailservice.htm (last visited
April 8, 2011).
5
Section 83.806(4), F.S.
6
Section 83.806(8), F.S.
7
Section 83.806(4)(b), F.S.
BILL: SB 1772 Page 3

equity, or by any statute of this state, or any other lien not provided for with respect to the
owner’s lien.

III. Effect of Proposed Changes:

Section 1 amends s. 83.803, F.S., to expand the definition of last known address to include the
street address, post office box, or electronic mail address provided by the tenant or in a
subsequent written change of address notice provided by first-class mail, or electronic mail. The
bill removes the provision for notice of change of address being provided by the tenant by
certified mail.

Section 2 amends s. 83.806, F.S., to remove the requirement that a tenant be notified by
certified mail of the owners claim. The bill also alters the criteria for the creation of the
presumption that the notice required by the statute was delivered to the tenant by removing the
requirement that the notice be sent by registered mail.

The bill deletes subsection (4), which requires a newspaper advertisement of the sale or other
disposition of the property. Specifically, this subsection requires that the advertisement must be
published once a week for 2-consecutive weeks in a newspaper of general circulation in the area
where the self-service storage facility or self-contained storage unit is located. If there is no
newspaper of general circulation in the area where the self-service storage facility or self-
contained storage unit is located, the advertisement must be posted at least 10 days before the
date of the sale or other disposition in not fewer than three conspicuous places in the
neighborhood where the self-service storage facility or self-contained storage unit is located.

The bill allows notice be given by first class mail rather than certified mail with respect to the
notice of the amount of the sale proceeds or any balance remaining after the sale.

Section 3 amends s. 83.808, F.S., by clarifying that this statute does not impair or affect the right
of parties to create liens or limitations on liability by special contract or agreement.

Section 4 provides an effective date of July 1, 2011.

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

None.

B. Public Records/Open Meetings Issues:

None.

C. Trust Funds Restrictions:

None.
BILL: SB 1772 Page 4

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

None.

B. Private Sector Impact:

The bill will lower the costs for owners of self storage facilities with respect to providing
the required notice to tenants and secured lienholders under the self storage facility act.

C. Government Sector Impact:

None.

VI. Technical Deficiencies:

None.

VII. Related Issues:

None.

VIII. Additional Information:

A. Committee Substitute – Statement of Substantial 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 - 2011 COMMITTEE AMENDMENT
Bill No. SB 1884

Ì286294FÎ286294

LEGISLATIVE ACTION
Senate . House
.
.
.
.
.

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

1 Senate Amendment
2
3 Delete lines 30 - 38
4 and insert:
5 Internet; and
6 2. Solicits the purchase of such good or service over the
7 Internet through an initial merchant after the consumer has
8 initiated a transaction with the initial merchant.
9
10 The term does not include the initial merchant, a subsidiary or
11 corporate affiliate of the initial merchant, or a successor of
12 the initial merchant.

Page 1 of 1
4/11/2011 2:41:03 PM 577-04214-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1884

Ì143864=Î143864

LEGISLATIVE ACTION
Senate . House
.
.
.
.
.

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

1 Senate Amendment
2
3 Delete lines 71 - 108
4 and insert:
5 3. Sending a written notice to the consumer confirming a
6 transaction by first-class United States mail or e-mail before
7 processing the consumer’s credit card, or otherwise charging the
8 consumer, or shortly thereafter. Such notice must clearly and
9 conspicuously disclose the following:
10 a. The good or service purchased.
11 b. The amount that the consumer will be charged.
12 c. The timing and frequency of charges.

Page 1 of 3
4/11/2011 4:19:06 PM 577-04215-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1884

Ì143864=Î143864

13 d. A short and plain statement disclosing the post-
14 transaction third-party seller’s cancellation and refund policy.
15 e. A telephone number, mailing address, Internet address,
16 and e-mail address where the post-transaction third-party seller
17 can be contacted.
18 f. The name or brand name of the initial merchant, if
19 known.
20 g. The name or brand name of the post-transaction third-
21 party seller.
22 h. That the post-transaction third-party seller is an
23 unaffiliated and separate entity from the initial merchant.
24 i. That the consumer is being charged by the post-
25 transaction third-party seller for a transaction that is
26 separate from the consumer’s transaction with the initial
27 merchant.
28 4. If the notice described in subparagraph 3. is sent by e-
29 mail, the only words appearing in the subject line shall be
30 “Notice that ...(name or brand name of post-transaction third-
31 party seller... is charging your ...(type of account)....”
32 (3) PROHIBITION ON DISCLOSING DATA.—An initial merchant may
33 not disclose a consumer’s credit card number, debit card number,
34 bank account number, or other account number, or disclose other
35 consumer billing information, to a post-transaction third-party
36 seller.
37 (4) MECHANISM TO STOP RECURRING CHARGES REQUIRED.—A post-
38 transaction third-party seller may not:
39 (a) Charge a consumer without providing a simple mechanism
40 for the consumer to cancel the good or service, and stop
41 charges, within a reasonable time after delivery of the written

Page 2 of 3
4/11/2011 4:19:06 PM 577-04215-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1884

Ì143864=Î143864

42 notice confirming the transaction; or
43 (b) Change its vendor code, or otherwise materially change
44 the way the post-transaction third-party seller is identified on
45 the consumer’s account, more than once per year, unless the
46 post-transaction third-party seller provides the consumer with
47 written notice of the change.

Page 3 of 3
4/11/2011 4:19:06 PM 577-04215-11
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 Commerce and Tourism Committee

BILL: SB 1884
INTRODUCER: Senator Gaetz
SUBJECT: Consumer protection
DATE: April 11, 2011 REVISED:

ANALYST STAFF DIRECTOR REFERENCE ACTION
1. McCarthy Cooper CM Pre-meeting
2. BC
3.
4.
5.
6.

I. Summary:

This bill prohibits a post-transaction third-party seller from charging a consumer for a good or
service sold over the Internet unless specific disclosures are made and the seller receives the
informed consent of the consumer. It also requires a post-transaction third-party seller to provide
a simple mechanism for a consumer to cancel a purchase of a good or service and stop any
recurring charges. Finally, it prohibits an initial merchant from disclosing a consumers

“…credit card, debit card, bank account, or other account number or other billing
information to a post-transaction third-party seller for use in an internet-based sale of any
good or service from that post-transaction third-party seller.”

This bill is very similar to recently enacted federal law, enacted to counter “negative option
marketing,” which refers to a category of commercial transactions in which sellers interpret a
customer‟s failure to take an affirmative action, either to reject an offer or cancel an agreement,
as assent to be charged for goods or services.

By including these same protections in our statutes, Florida has jurisdiction to enforce the
consumer protections provided in the act under state law.

The bill creates an undesignated section of law in the Florida Statutes.
BILL: SB 1884 Page 2

II. Present Situation:

Florida Law

Currently Florida law does not specifically address unfair and deceptive practices with respect to
internet sales practices.

Federal Law

Congress, based on the findings below, passed S. 3386: Restore Online Shoppers‟ Confidence
act (act) in late 2010. 1 Congress found:

The Internet has become an important channel of commerce in the United States,
accounting for billions of dollars in retail sales every year. Over half of all
American adults have now either made an online purchase or an online travel
reservation. Consumer confidence is essential to the growth of online commerce.
To continue its development as a marketplace, the Internet must provide
consumers with clear, accurate information and give sellers an opportunity to
fairly compete with one another for consumers‟ business. An investigation by the
Senate Committee on Commerce, Science, and Transportation found abundant
evidence that the aggressive sales tactics many companies use against their online
customers have undermined consumer confidence in the Internet and thereby
harmed the American economy. The Committee showed that, in exchange for
„„bounties‟‟ and other payments, hundreds of reputable online retailers and
websites shared their customers‟ billing information, including credit card and
debit card numbers, with third party sellers through a process known as „„data
pass.‟‟ These third party sellers in turn used aggressive, misleading sales tactics to
charge millions of American consumers for membership clubs the consumers did
not want. Third party sellers offered membership clubs to consumers as they were
in the process of completing their initial transactions on hundreds of websites.
These third party „„posttransaction‟‟ offers were designed to make consumers
think the offers were part of the initial purchase, rather than a new transaction
with a new seller. Third party sellers charged millions of consumers for
membership clubs without ever obtaining consumers‟ billing information,
including their credit or debit card information, directly from the consumers.
Because third party sellers acquired consumers‟ billing information from the
initial merchant through „„data pass,‟‟ millions of consumers were unaware they
had been enrolled in membership clubs. The use of a „„data pass‟‟ process defied
consumers‟ expectations that they could only be charged for a good or a service if
they submitted their billing information, including their complete credit or debit
card numbers. Third party sellers used a free trial period to enroll members, after
which they periodically charged consumers until consumers affirmatively
canceled the memberships. This use of „„free-to-pay conversion‟‟ and „„negative
option‟‟ sales took advantage of consumers‟ expectations that they would have an

1
Public Law No: 111-345.
BILL: SB 1884 Page 3

opportunity to accept or reject the membership club offer at the end of the trial
period.2

The act provides three important protections for online consumers. First, it would make it
unlawful for a post-transaction third-party seller – a seller who markets goods and services
online through an initial merchant after a consumer has initiated a transaction – to charge, or
attempt to charge, a consumer for any good or service sold in an online transaction, unless:
The seller clearly discloses to the consumer all the material terms of the transaction;
and
The seller has obtained the consumer‟s consent before charging their credit card, bank
account, or other financial account. Importantly, as a part of that consent, such sellers
must obtain directly from the consumer the full financial account number to be
charged.

Second, it would make it unlawful for any online seller to transfer a consumer‟s financial
account number to a third party seller.

Finally, the act would make it unlawful for a seller to charge, or attempt to charge, a consumer
for any good or service with a negative option feature in an online transaction, unless:
The seller clearly discloses to the consumer all the material terms of the transaction;
The seller has obtained the consumer‟s consent before charging their credit card, bank
account, or other financial account; and
The seller provides a simple way for the consumer to stop charges.3

Violations of the act and its regulations are treated as unfair or deceptive acts or practices. The
Federal Trade Commission is charged with enforcement of the act in the same manner, by the
same means, and with the same jurisdiction, powers, and duties as though all applicable terms
and provisions of the Federal Trade Commission act (15 U.S.C. 41 et seq) were incorporated into
and made part of this act. The act allows the attorney general of a state, or other authorized state
officer, alleging a violation of the act or any regulation issued under the act to bring an action on
behalf of the residents of the state in any United States district court for the district in which the
defendant is found, resides, or transacts business, or wherever venue is proper under section
1391 of title 28, United States Code, to obtain appropriate injunctive relief. However, the state
must provide notice to the FTC and a copy of the complaint immediately upon instituting an
action. The act allows the FTC to intervene in the actions filed by the attorney general.

III. Effect of Proposed Changes:

Section 1 creates an undesignated section of law in the Florida Statutes, to prohibit a post-
transaction third-party seller from charging a consumer for a good or service sold over the
Internet unless specific disclosures are made and the seller receives the informed consent of the
consumer. It also requires a post-transaction third-party seller to provide a simple mechanism for

2
S. 3386(2).
3
Statement by FTC Chairman Jon Leibowitz Regarding House and Senate Passage of Legislation to Combat Deceptive
Online Sales Tactics http://www.ftc.gov/opa/2010/12/negoption.shtm (last visited April 7, 2011).
BILL: SB 1884 Page 4

a consumer to cancel a purchase of a good or service and stop any recurring charges. Finally, it
prohibits an initial merchant from disclosing a consumer‟s:

The bill creates the following definitions:
“Initial merchant” means a person who has obtained a consumer‟s billing information
directly from the consumer through an Internet transaction initiated by the consumer.
“Post-transaction third-party seller” means a person who:
o Sells, or offers for sale, any good or service on the Internet;
o Solicits the purchase of such good or service on the Internet through an initial
merchant after the consumer has initiated a transaction with the initial merchant;
and
o Is not:
 The initial merchant;
 A subsidiary or corporate affiliate of the initial merchant; or
 A successor of the initial merchant.

A post-transaction third-party seller may not charge or attempt to charge any consumer‟s credit
card, debit card, bank account, or other account for any good or service sold in a transaction
effected on the internet unless:
Before obtaining the consumer‟s billing information, the post-transaction third-party
seller has clearly and conspicuously disclosed to the consumer all material terms of the
transaction, including:
o A description of the good or service being offered;
o The fact that the post-transaction third-party seller is not affiliated with the initial
merchant, which must include disclosure of the name of the post-transaction third-
party seller in a manner that clearly differentiates the post-transaction third-party
seller from the initial merchant;
o The cost of the good or service; and
o How and when charges will be imposed by the post-transaction third-party seller;
and
The post-transaction third-party seller has received the express informed consent for the
charges from the consumer whose credit card, debit card, bank account, or other account
will be charged by:
o Obtaining from the consumer:
 The full account number of the account to be charged, or other account
information necessary to complete the transaction; and
 The consumer‟s name and address and a means to contact the consumer.
o Requiring the consumer to perform an additional affirmative action, such as
clicking on a confirmation button or checking a box that clearly and
conspicuously indicates the consumer‟s consent to be charged the amount
disclosed; and
o Sending a written notice to the consumer by first-class United States mail or
electronic mail at least 20 days before charging the consumer, which notice
BILL: SB 1884 Page 5

clearly and conspicuously confirms the transaction and discloses the following:
 The good or service purchased;
 The amount to be charged to the consumer;
 When the consumer will be charged and whether the charges are recurring;
 That the consumer may cancel at any time by calling a telephone number
provided in the notice or may cancel in a writing sent to an address or
electronic address provided in the notice;
 The name of the initial merchant and that the post-transaction third-party
seller is a separate entity from the initial merchant; and
 That the consumer is being charged by the post-transaction third-party
seller for a transaction that is separate from the transaction the consumer
made with the initial merchant.

The written notice must include a simple mechanism for the consumer to cancel the good or
service and stop recurring charges by telephone, electronic mail, or United States mail. If the
notice is sent by electronic mail, the only words appearing in the subject line shall be “notice that
we are charging your [insert type of account] account.”

The bill also prohibits disclosing data used to facilitate certain deceptive internet sales
transactions. An initial merchant may not disclose a credit card, debit card, bank account, or
other account number, or other billing information to a post-transaction third-party seller for use
in an Internet-based sale of any good or service from that post-transaction third-party seller.

A post-transaction third-party seller may not charge a consumer unless it provides a simple
mechanism for the consumer to stop recurring charges via telephone, electronic mail, and United
States mail.

A person who violates this section commits an unfair and deceptive trade practice under part II
of ch. 501, F.S., and is subject to any remedies or penalties available for a violation of that part.

By including in our statutes the same protections provided in federal law, Florida has jurisdiction
to enforce these consumer protections in state courts.

Section 2 This act shall take effect July 1, 2011.

IV. Constitutional Issues:

A. Municipality/County Mandates Restrictions:

None.

B. Public Records/Open Meetings Issues:

None.

C. Trust Funds Restrictions:

None.
BILL: SB 1884 Page 6

V. Fiscal Impact Statement:

A. Tax/Fee Issues:

None.

B. Private Sector Impact:

This will create additional cost for the post-transaction third-party seller in that they will
now have to provide notice and acquire additional information directly from the
consumer.

The bill should create a more consumer friendly internet experience for Florida residents
knowing that the initial merchant cannot simply transfer their information to a
post-transaction third-party seller

C. Government Sector Impact:

To the extent that the Attorney General or state attorneys decide to pursue enforcement of
the provisions of the act, there will be a corresponding impact on our court system.

VI. Technical Deficiencies:

None.

VII. Related Issues:

None.

VIII. Additional Information:

A. Committee Substitute – Statement of Substantial 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.

File and source

File: senate-CM-expanded-agenda-7508.pdf
Size: 1,753,626 bytes
SHA-256: c26a6961d04bb6ba091268e17c42c33aa379324f0fc1835de9e8aa997ffd9058
Our copy: senate-CM-expanded-agenda-7508.pdf
Original: No public link identified.