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2005 Legislative Session Wrap-Up
Tuesday, March 8, 2005 brought many new faces to Tallahassee
It is estimated that in the elections of 2006 and 2008, nearly 70 current members of the 120-member Florida House and ten members of the 40-member Senate will be term limited out of their seats. While term limits may have seemed like a way to ensure that the days of 20-year tenures in the House and Senate would cease to exist, they have caused, what some believe, is an interesting power shift in the legislative process.
Years ago, members of the Florida House and Senate would be elected to their respective chambers, serve their first few terms on committees that were not as powerful as those that controlled the state budget or legislative calendar, and then work their way up into leadership positions. Many times, this ascension to leadership could take ten to 15 years. Now, however, the pressure on new lawmakers to compete for leadership positions within their first term in office has created a new dynamic in political horse trading. While loyalty by the party faithful has paid off well, a limit of eight years in office has created a practice of seeking commitments for House Speaker or Senate President from fellow legislators before they are even elected.
Now, however, the “tenured members” in the legislative process don’t hold public office. In fact, many never will. Those who have become the concentration of power are committee staff directors, staff analysts, or similar positions in the House and Senate. These individuals have a knowledge base that may sometimes surpass those who they are hired to serve.
Most Republican members serving in the Florida House don’t remember what it was like be the minority party and sit in the back rows of the chamber. For nearly 120 years, Democrats controlled the Florida House. In 1996, voters swung Republicans into a majority party that has grown to 84 of 120 members.
When Republicans gained control of the Senate in the 1994 election after splitting the chamber 20 Republicans to 20 Democrats in 1992, party lines were not so evident with regard to votes on policies or issues. In what has been historically termed the “upper chamber” the current political division between 26 Republicans and 14 Democrats does not appear to be as wide as the House.
On the last night of session, the House and Senate passed a $63.1 billion state budget for the 2005-06 fiscal year. Negotiations this year between both chambers were not as acrimonious as the last several sessions- most likely due to the new leadership and nearly $5 billion more in state revenue.
Due to our efforts, the 2005-06 FY state budget includes $100,000 to fund the Board of Accountancy’s Minority Scholarship Program and $200,000 for the Unlicensed Activity Campaign. A $3 portion of Florida CPA licenses are earmarked for Minority Scholarships. In addition, $5 from each license is earmarked to combat unlicensed activity. Since the passage of legislation supported by the FICPA 1998 that created the program the BOA has provided $408,000 to 79 students seeking an accounting degree.
Look to the left for more information on the Florida budget for FY 2005-06.
Auditor General Task Force
Coordinate with the state Auditor General, the Governor’s Office of Policy and Budget and the state Comptroller in the implementation of the Single Audit Act in the state of Florida, designed to establish uniform requirements for audits of any recipients of state funds (local governments and nonprofit agencies) and to promote the efficient and effective use of audit resources.
Substitute Communications Systems
Two years ago the definition of “substitute communications systems” was amended to read – s. 202.11(16) - "Substitute communications system" means any telephone system, or other system capable of providing communications services, which a person purchases, installs, rents, or leases for his or her own use to provide himself or herself with services used as a substitute for any switched service or dedicated facility by which a dealer of communications services provides a communication path. In the fall of 2003, the DOR tried to draft rules to enforce the tax. This onerous tax was met with strong opposition from the business community as it would have cost millions of dollars to implement.
For CPAs preparing financial statements for companies subject to the tax, the confusion was only complicated by rules drafted by DOR in the fall of 2003 that were never enforced in hopes that the tax would be repealed during the 2004 session. When that didn’t happen, a special session last December was nearly expanded to include the discussion of legislation to repeal the tax on substitute communications systems. This move was predicated by a concern by public companies in Florida that provisions in Sarbanes/Oxley would require disclosure for public companies of the potential tax liablility even though DOR was not enforcing the collection of the tax.
During the 2005 regular session, we participated in a coalition with nearly thirty other business groups to support the passage of HB 49 by Rep. John Stargel and SB 818 by Sen. Mike Haridopolos to repeal the tax on substitute communications systems. HB 49 unanimously passed all three committees of reference in the House and the House floor on March 10, 2005 by a vote of 117 – 0. SB 818 was not heard before a committee. Instead, a second bill in the Senate similar to SB 818 was filed by Sen. Lee Constantine. This bill, SB 2070, was similar to HB 49 but included language for a moratorium on the tax instead of a full repeal.
In a speech on January 18, Governor Bush indicated that he supported the full repeal. Despite our lobbying efforts, HB 49 sat on the Senate calendar for over seven weeks after it passed the House. On the last night of session, SB 2070 was amended to include a full repeal, passed the Senate by a vote of 40 to 0 and sent to the House. However, at 11:00 p.m., the House had not received the bill in messages from the Senate. Apparently, the Senate President had been holding the bill at the rostrom. The Senate Secretary actually walked the bill across the 4th floor rotunda from the Senate floor to the House floor. The House took up the bill shortly before midnight and sent it to the Governor.
The FICPA supports a repeal of the communications services tax as it relates to the taxation of substitute communications systems.
SB 2070 – Communications Services – Sen. Lee Constantine (R-22)
Other Bills of Interest
Bill Number - Title - Sponsor
SB 56 – Streamlined Sales & Use Tax – Sen. Skip Campbell (D-32)