Section 2: Description of Data and Sources

Transcription

1 REVENUE ESTIMATING CONFERENCE Tax: Gross Receipts/ Sales and Use Tax Issue: Nuclear Generating Asset Retirement Financing Bill Number(s): CS/HB7109 Section 7, CS/CS/SB288 Section 8 Entire Bill x Partial Bill: HB Section 7; SB Section 8 LOCAL IMPACT Sponsor(s): Sen Latvala, Rep La Rosa, Rep Peters Month/Year Impact Begins: July 1, 2015 Date of Analysis: April 23, 2015 Section 1: Narrative a. Current Law: After the Hurricanes and Tropical storms in 2004 and 2005, a new financing mechanism, called securitization, was created to allow investor-owned electric utilities to petition the PSC to finance storm recovery costs. The purpose of the mechanism was to allow utilities to establish a nonbypassable charge to the utility s customers and provide a secure stream of revenue payments to the separate legal entity from which the bonds would be paid. b. Proposed Change: The bill creates a similar financing mechanism for investor-owned utilities, subject to the terms of an order of the PSC, approving the creation of Nuclear Asset-recovery Bonds to recover certain costs associated with the premature retirement of a nuclear plant. The PSC must find that the utility s use of the financing mechanism will avoid or significantly mitigate rate impacts to customers as compared with traditional financing methods of recovery for costs. Section 2: Description of Data and Sources Discussions with Public Service Commission The Florida Tax Guide for Municipal Electric Utilities (page 35) Gross Receipts Charges. Gross receipts charges are not exempt from gross receipts taxes. Gross receipts taxes should be remitted on gross receipt charges included in customer bills, whether or not those charges are separately stated Section 3: Methodology (Include Assumptions and Attach Details) Please see attached. It is assumed the Nuclear Asset Recovery Charges are Taxable, based on the Florida Tax Guide for Municipal Electric Utilities. In 2013 there was a settlement in Duke Energy vs Public Council setting the valuation of unrecovered costs from CR3 s early retirement at 1.46bn. It is assumed that this site would be the most ready to enact the mechanisms provided in the language and issue Nuclear Asset Recovery Bonds. The impact is derived from approximating current costs of financing under traditional methods and comparing that to the new mechanism s financing advantages and how those would impact gross receipts, state sales tax and the regulatory assessment fee. Under traditional methods the bond financing rate for AAA Corporate Bonds is 4.59%, according to the NEEC s latest forecast. Under this new method it is believed that the rate could fall to as low as 2.6%. That equates to a 16.4% decline in financing costs, along with the associated tax revenues. The high estimate is based on an impact beginning January 1, 2017 and the low is based on an impact beginning January 1, This analysis takes into account only the local portion of the bill. DOR publishes data relating to the tax rates for Public Services across municipalities and counties. The PSC s Statistics of Florida Electric Utility Industry breaks out the counties that Duke Energy is currently operating in the state. An effective rate was calculated at the municipal level and county level in the territories Duke energy operates in. Those effective rates were then weighted by the population and unincorporated vs incorporated populations for their respective rates. For example, the public service tax rate for counties had the unincorporated population of only counties with a tax rate divided by the total population of all counties that Duke Energy operates in. The ratio was then applied against the against the average public service tax rate for counties. Likewise, the same general methodology was applied for the municipal rates. An average franchise fee of 6% was used and weighted against the population incorporated in the appropriate Duke Energy Counties. 445

2 REVENUE ESTIMATING CONFERENCE Tax: Gross Receipts/ Sales and Use Tax Issue: Nuclear Generating Asset Retirement Financing Bill Number(s): CS/HB7109 Section 7, CS/CS/SB288 Section 8 The Impact that follows is ONLY the franchise fee and public service taxes. The high estimate assumes an effective rate of 10% across the board. The middle estimate is based off industry provided effective rates and the low uses FDEC population statistics and DOR data regarding local data to create a blended rate. Section 4: Proposed Fiscal Impact Local: (1.2m) (4.7m) (0.7m) (2.7m) (0.4m) (1.5m) (4.7m) (4.7m) (2.7m) (2.7m) (1.5m) (1.5m) (4.7m) (4.7m) (2.7m) (2.7m) (1.5m) (1.5m) (4.7m) (4.7m) (2.7m) (2.7m) (1.5m) (1.5m) (4.7m) (4.7m) (2.7m) (2.7m) (1.5m) (1.5m) Total (1.1m) (4.3m) (4.3m) (4.3m) (4.3m) (4.3m) (4.3m) (4.3m) (4.3m) (4.3m) List of affected Trust Funds: Sales and Use Tax, PECO, Regulatory TF Section 5: Consensus Estimate (Adopted: 04/27/2015): The Conference adopted the middle estimate. GR Trust Local/Other Total Cash Recurring (0.1) (0.4) (0.3) (1.2) (0.7) (2.7) (1.1) (4.3) (0.4) (0.4) (1.2) (1.2) (2.7) (2.7) (4.3) (4.3) (0.4) (0.4) (1.2) (1.2) (2.7) (2.7) (4.3) (4.3) (0.4) (0.4) (1.2) (1.2) (2.7) (2.7) (4.3) (4.3) (0.4) (0.4) (1.2) (1.2) (2.7) (2.7) (4.3) (4.3) 446

3 Principal Asset Value 1,460,000,000 Base Assumptions: Equity 8.12% Nuclear Asset Recovery Bond Rate 2.60% Debt 4.59% Difference Total Financing Costs over 20 Years* 2,631,507,900 Total Financing Costs over 20 Years 1,890,835,298 (740,672,602) Tax Rates Gross 65,787,698 Gross 47,270,882 (18,516,815) Gross Receipts (Reg) 2.500% Gross 17,788,993 Gross 12,782,047 (5,006,947) Gross Receipts (Swap) 2.600% Sales and Use 29,762,354 Sales and Use 21,385,347 (8,377,007) Sales and Use Tax 4.350% Public Service Tax- (Weighted) 72,366,467 Public Service Tax- (Weighted) 51,997,971 (20,368,497) Public Service Tax- Municipal 2.750% Public Service Tax- (Weighted) 48,419,745 Public Service Tax- (Weighted) 34,791,369 (13,628,376) Public Service Tax- County 1.840% Franchise (Weighted) 68,419,205 Franchise (Weighted) 49,161,718 (19,257,488) Franchise Fee 2.600% Regulatory Assessment 1,894,686 Regulatory Assessment Fee 1,361,401 (533,284) Regulatory Assessment Fee 0.072% Total Tax over 20 Years 304,439,149 Total Tax over 20 Years 218,750,736 (85,688,413) Annualized Gross Receipts 4,178,835 Annualized Gross Receipts 3,002,646 (1,176,188) Annualized Sales Tax 1,488,118 Annualized Sales Tax 1,069,267 (418,850) Annualized Public Service Tax 6,039,311 Annualized Public Service Tax 4,339,467 (1,699,844) Annualized Franchise Fee 3,420,960 Annualized Franchise Fee 2,458,086 (962,874) Annualized Regulatory Assessment Fee 94,734 Annualized Regulatory Assessment Fee 68,070 (26,664) Total Impact Sales and Use Tax Impact (1,071,105) (104,713) (4,284,421) (418,850) (4,284,421) (418,850) (4,284,421) (418,850) (4,284,421) (418,850) Trust Local (300,713) (665,680) (1,202,852) (2,662,718) (1,202,852) (2,662,718) (1,202,852) (2,662,718) (1,202,852) (2,662,718) *Separate bond calculator was used to approximate financing costs 447

4 Tax: Sales and Use Tax Issue: Sports Facilities Distributions Bill Number(s): CS/SB 1214 REVENUE ESTIMATING CONFERENCE Entire Bill X Partial Bill: Section 52 Sponsor(s): Month/Year Impact Begins: July 1, 2015 Date of Analysis: 4/23/15 Section 1: Narrative a. Current Law: S provides applicants state funding under s (6)(d)6.f. for the public purpose of constructing, reconstructing, renovating, or improving a sports facility. The expected amount of average annual new incremental state sales taxes generated by sales at the facility must be at least 500,000 above the baseline for the applicant to be eligible to receive a distribution under this section. Under s (6)(a)1 4. the annual distribution amount an applicant may receive is determined. If the total project cost is 200 million or greater, the annual distribution amount may be up to 3 million. If the total project cost is at least 100 million but less than 200 million, the annual distribution amount may be up to 2 million. If the total project cost is less than 100 million and more than 30 million, the annual distribution amount may be up to 1 million. (6)(d) The department shall notify the Department of Revenue of the applicant s initial certification, and the Department of Revenue shall begin distributions within 45 days after such notification or upon a date specified by the department as requested by the approved applicant, whichever is later. b. Proposed Change: Effective July 1, 2015, the four sports development project applications reviewed by the DEO and recommended to the Legislature for approval are approved pursuant to s (4)(e) F.S. The Department of Economic Opportunity shall certify the applicants for sports development projects no later than August 15, Section 2: Description of Data and Sources Used distribution amounts found in s (6)(a)1 4 and the list of applicants from EDR. Section 3: Methodology (Include Assumptions and Attach Details) The four applicants are Daytona International Speedway, LLC which could receive 3 million a year, the South Florida Stadium which could receive 3 million per year, the City of Orlando which could receive 2 million per year, and the City of Jacksonville which could receive 1 million per year. The middle and low estimates reflect a one and two month lag respectively, in distributions. Section 4: Proposed Fiscal Impact (9.0m) (9.0m) (8.3m) (9.0m) (7.5m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) (9.0m) List of affected Trust Funds: General Revenue Section 5: Consensus Estimate (Adopted: 04/27/2015): The Conference adopted the middle estimate. GR Trust Local/Other Total Cash Recurring (8.3) (9.0) (8.3) (9.0) (9.0) (9.0) (9.0) (9.0) (9.0) (9.0) (9.0) (9.0) (9.0) (9.0) (9.0) (9.0) (9.0) (9.0) (9.0) (9.0) 480

5 REVENUE ESTIMATING CONFERENCE Tax: Sales and Use/ Corporate/ Ad Valorem Issue: Enterprise Zone Benefits/ 3 year limited extension Bill Number(s): CS/SB 1214 Proposed Amendment Entire Bill Partial Bill: Section 51 Sponsor(s): Month/Year Impact Begins: Date of Analysis: Section 1: Narrative a. Current Law: Currently enterprise zones are going to expire on December 31, 2015 b. Proposed Change: (1) For purposes of this section, the term eligible business means a business that entered into a contract with the Department of Economic Opportunity for an economic development program under ss , , , , , or , Florida Statutes, between January 1, 2012, and July 1, 2015, for a project located in an enterprise zone which was designated pursuant to s , Florida Statutes 2014, as of May 1, (2) An eligible business may apply to the Department of Economic Opportunity for the following incentives, if the contract with the Department of Economic Opportunity is still deemed active by the department and has not expired or terminated: (a) The property tax exemption for a licensed child care facility under s , Florida Statutes (b) The building materials sales tax refund under s (5)(g), Florida Statutes (c) The business equipment sales tax refund under s (5)(h), Florida Statutes (d) The electrical sales tax exemption under s (15), Florida Statutes, (e) The enterprise zone jobs tax credit under s , Florida Statutes (f) The enterprise zone jobs tax credit under s , Florida Statutes (g) The enterprise zone property tax credit under s , Florida Statutes (3) The Department of Economic Opportunity must provide a list of eligible businesses annually to the Department of Revenue. The Department of Economic Opportunity must also provide notice to the Department of Revenue upon the expiration or termination of a contract. (4) From January 1, 2016 to December 31, 2018, the Department of Economic Opportunity is designated to perform all the duties and responsibilities that were performed by the governing body or enterprise zone development agency having jurisdiction over the enterprise zone under ss , (5) (g) and (h), (15), , and , Florida Statutes 2014, including receipt and review of applications, and certifications. (5) This section is effective January 1, 2016, and expires on December 31, Section 2: Description of Data and Sources Department of Economic Opportunity (DEO) Enterprise Zone detail reports Property Tax Oversight report on exempt child care facilities Section 3: Methodology (Include Assumptions and Attach Details) This Estimate consists of 6 pieces, one for each type of extended enterprise zone benefit. The basis for much of the analysis comes from detailed reports from the DEO reports on which businesses would be able to apply for the extended benefits. There is a total of 34 eligible businesses. The first section relates to the property tax exemption under s There were 199 facilities exempt in 2013 and The average exempt value per facility for these two periods was 217,552. The high assumes that 20% of businesses will have a childcare facility with the average value from The middle assumes that 10% of businesses will have a childcare facility with the average value from The low assumes that 5% of businesses will have a childcare facility with the average value from For the purposes of the estimate it is also assumed the value of the childcare facilities does not change over time. This exemption ends when the proposed language expires, and should affect the tax rolls for 2016, 2017, and

6 REVENUE ESTIMATING CONFERENCE Tax: Sales and Use/ Corporate/ Ad Valorem Issue: Enterprise Zone Benefits/ 3 year limited extension Bill Number(s): CS/SB 1214 Proposed Amendment The second section relates to the building material sales tax refund under s (5) (g). It is assumed that all businesses will be able to take advantage of this refund within the forecast period, and that the refunds will be evenly distributed for the affected periods. The requirements for the refund specify that the refund must be applied for within 6 months of the activity for this reason the affected period is 3 years plus 6 months. The high estimate assumes that that the businesses qualify for 10,000 per parcel due to at least 20% of the employees of the business coming from the enterprise zone, and that there are three parcels per business project. The low estimate assumes that that the businesses qualify for 5,000 per parcel due to less than 20% of the employees of the business coming from the enterprise zone, and that there is one parcel per business project. The middle is the average of the high and the low. The third section relates to the business equipment sales tax refund under s (5) (h). Capital investment for eligible businesses is used to find the total investment of 532,534,810 for all projects. ). It is assumed that all businesses will be able to take advantage of this refund within the forecast period, and that the refunds will be evenly distributed for the affected periods. The requirements for the refund specify that the refund must be applied for within 6 months of the activity for this reason the affected period is 3 years plus 6 months. The high estimate assumes an investment window of 4 years and that 50% of capital investment is in business equipment with values greater than 5,000. The middle estimate assumes an investment window of 6 years and that 40% of capital investment is in business equipment with values greater than 5,000. The low assumes an investment window of 8 years and that 30% of capital investment is in business equipment with values greater than 5,000. The fourth section relates to the electrical sales tax exemption under s (15). The annual enterprise zone report data was used to find the relationship between the electrical sales tax exemption and the rest of the extended benefits. For and the electrical exemption represented and additional 5% on top of the rest of the benefits. The electrical exemption for the estimate is 5% multiplied by the total for the rest of the benefits. The exemption lasts for 5 years, and the value is held constant for and The fifth section consists of the Jobs credit taken against sales and use tax under s , or against corporate income tax under s Detailed data on wages and new employees for the affected business was used as the basis for this estimate. The high assumes that for projects in rural enterprise zones 70% of employees are from the enterprise zone, for projects in Non-Rural enterprise zones 30% of the employees reside in the zone, and that 10% in the welfare transition program from all projects. The middle assumes that for projects in rural enterprise zones 50% of employees reside in the zone, for projects in Non-Rural enterprise zones 20% of the employees reside in the zone, and that 7% in the welfare transition program from all projects.. The low assumes that for projects in rural enterprise zones 19% of employees reside in the zone, for projects in Non-Rural enterprise zones 10% of the employees reside in the zone, and that 4% in the welfare transition program from all projects. For all estimates it is assumed that the welfare transition rate for the credit is 42.5%. It is assumed that 60% of the credits generated are taken against sales tax based on the annual enterprise zone report. The middle is the average of the high and the low. The credit shall be allowed for up to 24 consecutive months. The sixth section consists of the property tax credit under s It is assumed that all businesses will be affected by this credit. It was assumed that 70% of the capital investment amount was real property improvements qualifying for the credit Statewide average millage of mills was multiplied to the assumed real property value to obtain maximum property tax per project. The high assumes 3 parcels per business, and that the business employs at least 20% of their workforce from the enterprise zone. Impact was limited to 50,000 per parcel for the high. The low assumes 1 parcel per business, and that the business employs less than 20% of their workforce from the enterprise zone. Impact was limited to 25,000 per parcel in the low. The middle is the average of the high and the low. This credit is granted from 5 years and will first be taken against returns in The proposed language takes effect on January 1, 2016, and expires on December 31,

7 REVENUE ESTIMATING CONFERENCE Tax: Sales and Use/ Corporate/ Ad Valorem Issue: Enterprise Zone Benefits/ 3 year limited extension Bill Number(s): CS/SB 1214 Proposed Amendment Section 4: Proposed Fiscal Impact Sales and Use Tax (6.1 M) (3.4M) (1.7 M) (8.8 M) (5.2 M) (2.4 M) (8.5 M) (4.9 M) (2.3 M) (4.6 M) (2.7 M) (1.4 M) (1.1 M) (0.7 M) (0.4 M) Corporate Income tax (1.1 M) (0.7 M) (0.3 M) (2.7 M) (1.6 M) (0.6 M) (4.0 M) (2.7 M) (1.4 M) (2.7 M) (2.0 M) (1.2 M) (1.9 M) (1.4 M) (1.0 M) Property Tax (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) Total (7.1 M) (4.1 M) (2.0 M) (11.5 M) (6.8 M) (3.1 M) (12.5 M) (7.7 M) (3.8 M) (7.3 M) (4.7 M) (2.6 M) (3.0 M) (2.1 M) (1.3 M) List of affected Trust Funds: Sales, Corporate, Ad Valorem Section 5: Consensus Estimate (Adopted: 04/27/2015): The Conference adopted the following non-recurring impacts for the individual incentive pieces of the Enterprise Zone Act: Childcare Facilities: Negative Insignificant for FY through FY Building Materials Sales Tax Refund: (.1m) for FY through FY Business Equipment Sales Tax Refund: (.8m) for FY through FY and (.4m) for FY Electrical Energy Sales Tax Exemption: Negative Insignificant for FY and (.1m) for FY through FY Corporate Income Tax Jobs Credits: FY (.3m), FY (.7m), FY (.6m), FY (.3m), FY (.1m) Sales and Use Tax Jobs Credits: FY (.2m), FY (.4m), FY (.4m), FY (.2m), FY (.1m) Corporate Income Tax Credit for Ad Valorem paid: (.4m) for FYs through

8 REVENUE ESTIMATING CONFERENCE Tax: Sales and Use/ Corporate/ Ad Valorem Issue: Enterprise Zone Benefits/ 3 year limited extension Bill Number(s): CS/SB 1214 Proposed Amendment GR Trust Revenue Sharing Local Half Cent Cash Recurring (1.2) 0.0 (Insignificant) 0.0 (Insignificant) 0.0 (0.1) (1.9) 0.0 (Insignificant) 0.0 (Insignificant) 0.0 (0.1) (2.2) 0.0 (Insignificant) 0.0 (Insignificant) 0.0 (0.1) (1.5) 0.0 (Insignificant) 0.0 (Insignificant) 0.0 (Insignificant) (0.8) 0.0 (Insignificant) 0.0 (Insignificant) Local Option Total Local Total (0.1) 0.0 (0.2) 0.0 (1.4) (0.1) 0.0 (0.2) 0.0 (2.1) (0.1) 0.0 (0.2) 0.0 (2.4) (Insignificant) 0.0 (Insignificant) 0.0 (1.5) (Insignificant) 0.0 (0.8)

9 Enterprise Zone Benefits/ 3 Year Limited Extension Summary of DEO Data A B C D E F G New Jobs by year Number of Affected businesses Rural NonRural Total Section Property Tax Exemption for licensed child care facility Millage Rate (School) Millage Rate (Non-School) Millage Rate (total) Licensed Child Care Facility Exemptions Exemption Value Number of Facilities Average Exemption Total Impact - Current Exemption ,513, , , ,071, , ,351 CY to FY ,292, ,552 Percent of affected businesses 20% 10% 5% Number of affected businesses * 1,479, , ,838 School impact 10,997 5,498 2,749 Non-School impact 16,180 8,090 4,045 Total Impact 27,176 13,588 6,794 *Assumes no change in exemption value for forecast period. Possible impact for 2016, 2017, and 2018 property tax rolls. *For the purposes of the totals at the bottom the impacts here are added for fiscal years , , and April 27, 2015 Impact Conference 1

10 Enterprise Zone Benefits/ 3 Year Limited Extension A B C D E F G Section (5)(g) building materials sales tax refund High Assumes the business meets the 20% requirement for EZ employees and there are 3 parcels involved in each project Low assumes the business does not meet the 20% requirement and there is only 1 parcel involved in each project Middle is the average of the High and the Low 34 Affected businesses in all estimates Total impact is evenly distributed across periods available for refund (3 years plus 6 months). Number of Businesses Parcels per Business 3 1 Refund/ Parcel 10,000 7,500 High (10K/parcel) Low (5K/parcel) Total 1,020, ,000 per month 24, , Monthly value * affected months in each fiscal year Affected months ,714 98,357 51, , , , , , , ,714 98,357 51,000 6 Section (5)(h) Business Equipment Sales Tax Refund Per DEO research files affected businesses will be investing M High Assumes 50% spent on Business Equipment with price > 5,000 and a 4 year investment period Middle Assumes 40% spent on Business Equipment with price > 5,000 and a 6 year investment period Low Assumes 20% spent on Business equipment with price > 5,000 and an 8 year investment period Total impact is evenly distributed across periods available for refund (3 years plus 6 months). Total investment 532,534,810 Investment periods Years Spending on Business Equipment 50% 40% 20% Spending per Year 66,566,851 35,502,321 13,313,370 Sales tax refunds available per year 3,994,011 2,130, , ,994,011 2,130, , ,994,011 2,130, , ,994,011 2,130, , ,997,006 1,065, , April 27, 2015 Impact Conference 2

11 Enterprise Zone Benefits/ 3 Year Limited Extension A B C D E F G Section (15) Electrical Energy Sales Tax Exemption Electrical Energy exemption is approximately 5% of value of the total of the rest Enterprise zone incentives 2.5% applied to the total from all other Enterprise Zone incentives Exemption lasts for 5 years Total incentives ,806,818 3,800,999 1,327, ,940,551 7,239,933 2,467, ,934,152 6,874,136 2,346,656 Electricity exemption , ,050 33, , ,997 61, , ,707 58, , ,707 58, , ,707 58, April 27, 2015 Impact Conference 3

12 Enterprise Zone Benefits/ 3 Year Limited Extension A B C D E F G Section Enterprise Zone Jobs tax credit against Sales and Use Tax and Enterprise Zone Jobs credit against corporate tax High assumes either that in rural enterprise zones at least 20% of employees are from the Enterprise zone or that the employees are participating in the welfare transition program making 8 more than the Minimum Wage Low assumes that less than 20% of employees are from the Enterprise Zone The EZ jobs credit against Sales and Use Tax Represents 60% of the Total EZ job Credits Middle is the Average of the High and the Low Credit shall be allowed for up to 24 consecutive months Summary of DEO Data New Jobs by year Jobs times Average Wage 102 Number of Affected businesses 103 Rural NonRural Total ,662,150 27,678,989 32,341, ,477,806 13,477, ,939,178 16,939,178 Assumed % Employees per year Residing in 107 Zone 108 Rural 109 Urban Assumed % Employees Welfare to Work 112 Rural 113 Urban High 70% 30% High 10% 10% Middle 50% 20% Middle 7% 7% Low 19% 7.5% Low 2% 2% Calculated credits generated per year - Rural ,666, ,187, , Calculated credits generated per year NonRural ,667, ,484, , ,587, ,209, , ,524, ,520, , total credits per year CY to Fy High 5,334, ,921, ,112, ,524, High 2,667, ,627, ,016, ,818, , Middle 3,671, ,881, ,729, ,520, Low 955, ,272, , , Low 477, ,114, , , , April 27, 2015 Impact Conference 4

13 Enterprise Zone Benefits/ 3 Year Limited Extension A B C D E F G Credit against Sales tax (assumed 60% of total) ,600, , , ,976, ,322, , ,610, ,103, , ,690, ,012, , , , , Credit Against Corporate (assumed 40% of total) ,066, , , ,651, ,548, , ,406, ,402, , ,127, , , , , , Section Enterprise Zone Property Tax Credit High Assumes the business meets the 20% requirement for EZ employees and there are 3 parcels involved in each project Low assumes the business does not meet the 20% requirement and there is only 1 parcel involved in each project Middle is the average of the High and the Low Assumes real property equals 70% of capital investment Uses 2014 Aggregate Millage of For Low uses assumed real property*millage and caps impact at 37,500 Number of Businesses for High Uses assumed real property /3 * millage and caps impact at 50,000 Parcels per Business Affected businesses in all estimates Credit/ Parcel 50,000 25,000 Will not be able to first be taken until High (50K/parcel) Low (25K/parcel) Credit is granted for 5 years Annual credit 1,604, , ,604,680 1,014, , ,604,680 1,014, , ,604,680 1,014, , ,604,680 1,014, , April 27, 2015 Impact Conference 5

14 Enterprise Zone Benefits/ 3 Year Limited Extension Total Impact A B C D E F G High* Middle Low Year (7.1 M) (4.0 M) (1.4 M) (11.5 M) (6.6 M) (2.1 M) (12.5 M) (7.2 M) (2.4 M) (7.2 M) (4.2 M) (1.5 M) (3.0 M) (1.8 M) (0.7 M) Sales Tax Impact 184 High* Middle Low 185 Year (6.1 M) (8.8 M) (8.5 M) (4.4 M) (1.1 M) (3.4 M) (5.0 M) (4.8 M) (2.5 M) (0.6 M) (1.2 M) (1.6 M) (1.6 M) (0.8 M) (0.2 M) 193 Corporate Income Tax Impact 194 High* Middle Low 195 Year (1.1 M) (2.7 M) (4.0 M) (2.7 M) (1.9 M) (0.6 M) (1.5 M) (2.4 M) (1.7 M) (1.2 M) (0.2 M) (0.4 M) (0.8 M) (0.6 M) (0.5 M) 490 April 27, 2015 Impact Conference 6

15 Tax: Highway Safety Fees Issue: Rural Letter Carriers Bill Number(s): CS/SB 160 REVENUE ESTIMATING CONFERENCE X Entire Bill Partial Bill: Sponsor(s): Fiscal Policy and Evers Month/Year Impact Begins: Becoming Law Date of Analysis: 4/23/2015 Section 1: Narrative a. Current Law: Section , Florida Statutes, provides the Florida Safety Belt Law that requires a motor vehicle operator, front seat passengers, and all passengers under 18 years of age to wear safety belts while the vehicle is in motion. b. Proposed Change: Section , Florida Statutes is amended to read a rural letter carrier of the United States Postal Service is not required to be restrained by a safety belt while performing duties in the course of his or her employment on a designated postal route. Section 2: Description of Data and Sources Senate Fiscal Policy 2015 Legislative Bill Analysis CS/SB 160 (3/19/2015) Conversation with North Florida District Representative for the Florida Rural Letter Carriers Association Distribution Schedule of Court-Related Filing Fees, Service Charges, Costs, and Fines, including a Recording Fee Schedule, Updated October 2014 Handbook PO-603, Rural Carrier Duties and Responsibilities ( ), available at Bureau of Labor Statistics, Occupational Employment Statistics, available at Section 3: Methodology (Include Assumptions and Attach Details) According to the Bureau of Labor Statistics, Florida has approximately 18,000 Postal Service Mail Carriers (as of May 2014). According to the Florida Rural Letter Carriers Association, there were approximately 9,000 Rural Mail Carriers in Florida in the same time frame. Because Uniform Traffic Citation data do not include occupation of recipient, of these approximately 9,000 Rural Mail Carriers, it is unknown the number of citations issued for failure to use a safety belt under current administration. Furthermore, United States Postal Service employees are governed by federal regulations that allow for Rural Mail Carriers to not wear a safety belt providing the carrier determines it is safe. The proposed language would align Florida Statute with these Federal regulations. This change would reduce the potential pool of drivers subject to the penalties for failure to wear a safety belt (30 plus administrative costs [ total]) resulting in a loss of revenue. Because it is unknown how many citations have been and will be issued for Rural Mail Carriers and under Federal Regulations these citations can be dismissed if challenged (according to the Florida Rural Letter Carriers Association citations that have been issued have been done so erroneously because Federal Regulations allow for non-wearing. While a small number who receive these citations do end up paying the fines, most are dismissed), the loss of revenue is insignificant. Section 4: Proposed Fiscal Impact (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant)

16 Tax: Highway Safety Fees Issue: Rural Letter Carriers Bill Number(s): CS/SB 160 REVENUE ESTIMATING CONFERENCE List of affected Trust Funds: General Revenue Funds State Courts Revenue Trust Fund State Attorneys Revenue Trust Fund Public Defenders Revenue Trust Fund The Clerks of Court Trust Fund Section 5: Consensus Estimate (Adopted: 04/27/2015): The Conference adopted the proposed impact. GR Trust Local/Other Total Cash Recurring (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant) (Insignificant)