Agenda 10/27/2009 Item #16K 7Agenda Item No. 16K7
October 27, 2009
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EXECUTIVE SUMMARY
Report to the Collier County Board of County Commissioners regarding the legal effect
and application of Florida Statute § 212.055(8) (Senate Bill No. 1000, the Emergency Fire
Rescue Services and Facilities Surtax).
OBJECTIVE: During its October 13, 2009 meeting, the Board of County Commissioners
directed the County Attorney to review and report back on the implications of Senate Bill 1000
(also known as the Emergency Fire Rescue Services and Facilities Surtax), which is now
codified as Florida Statutes § 212.055($). As set forth below, it is the recommendation of the
County Attorney that the Board take no action with respect to this matter until a majority of the
independent fire districts demonstrate that they are in favor of this optional surtax.
CONSIDERATIONS: Florida Statutes § 212.055(8) (the "Emergency Fire /Rescue Surtax)
allows certain counties, such as Collier, to levy, by ordinance, a local discretionary sales surtax
of up to one (1) percent for emergency fire rescue services and facilities if such surtax is
approved by a majority of the electors of the county voting in a referendum held for such
purpose. Emergency fire and rescue services includes, but is not limited to: (1) preventing and
extinguishing fires; (2) protecting and saving life and property from fires, natural or intentional
acts, or disasters; (3) enforcing county or state fire prevention codes and laws pertaining to
preventing and controlling fires; and (4) providing prehospital emergency medical treatment. As
a condition precedent to any county holding a referendum on the surtax, it must first enter into an
interlocal agreement with a majority of the special districts that provide emergency fire and
rescue services within the county.
Local Discretionary Sales Surtaxes: Local discretional sales surtaxes apply to all
transactions subject to the state tax imposed on sales, use, services, rentals, admissions, and other
authorized transactions pursuant to Florida Statutes, chapter 212. The discretionary sales surtax
must be collected when the transaction occurs in, or when delivery is into, a county that imposes
the surtax, and the sale is subject to the state's sales and use tax.
The Emergency Fire /Rescue Surtax would be levied in place of ad valorem millage
currently used to fund emergency fire rescue services. That is, any ad valorem and non -ad
valorem taxes used to provide emergency fire rescue services must be reduced by the amount of
the tax collected.
Notably, Florida Statutes §§ 212.054 -.055 authorize certain counties to levy, by
ordinance, eight discretionary sales surtaxes; including the Emergency Fire Rescue Services and
Facilities Surtax. Current law allows eligible counties to impose two separate discretionary
surtaxes without expiration. If the county elected to seek the imposition of this discretionary
surtax and it became law, it would only have one remaining discretionary surtax available as a
potential revenue source.
Implementation and Operation of Sales Surtax: A county that has adopted an
ordinance authorizing the surtax, and has entered into an interlocal agreement with a majority of
the fire /rescue services providers in the county, must then place the proposed levy of the surtax
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on a referendum ballot of a regularly scheduled election. The ordinance would take effect if
approved by a majority of the electors of the county.
The State Department of Revenue ( "DOR ") is charged with administering, collecting,
and enforcing the surtax as required by Florida Statutes, chapter 212.054(4). The surtax, less
DOR's administration costs, must be distributed by the county to the special fire /rescue districts
that entered into the interlocal agreement. The county may charge an administrative fee of the
actual costs incurred in receiving and distributing the surtax, not to exceed two (2) percent. The
pro rata distribution of surtax funds to the special fire /rescue districts participating in the
interlocal agreement shall be based upon "each entity's expenditures of ad valorem taxes and
non -ad valorem assessments for fire control and emergency rescue services in each of the
immediately 5 fiscal years to the total of the expenditures for all participating entities."
Fiscal Impact: The Florida House of Representative's Staff Analysis offered the
following comments on the potential fiscal impact of the surtax.
• The Revenue Estimating Conference concluded the law would have an indeterminate
positive fiscal impact on local governments.
• Counties that pursue the surtax will incur costs to hold the referendum and to implement
the provisions of the bill.
• Residents in a county where a referendum is approved and an ordinance becomes law
will realize a reduction in ad valorem taxes and non -ad valorem assessments for
fire /rescue services but will pay a higher sales tax rate.
• Any surtax collections exceeding projected collections in any fiscal year must be used to
further reduce ad valorem taxes in the next fiscal year. Those proceeds must be applied
as a rebate to the final millage after the Truth in Millage (TRIM) Notice is completed.
• Florida DOR's Office of Tax Research issued Revenue Estimates for the Local
Government Half -Cent Sales Tax for the local fiscal year ending September 30, 2010, for
Collier County in the amount of $29,042,622. By extrapolating that number to a full cent
sales tax, the potential revenue realized by an additional penny tax is $58,085,244; of
course, that number is fluid based upon sales.
LeLlislative Support: The Florida Association of Counties took a neutral position as S.B.
1000 worked its way through the legislature. The primary proponent of the legislation was the
Professional Firefighters & Paramedics of Palm Beach County.
FISCAL IMPACT: S.B. 1000 shifts funding Fire and Rescue Services from private property
owners to tourists, visitors, and those who simply shop in Collier County, all of whom arguably
benefit to some degree from fire and rescue services. If implemented, the fiscal impact will vary
widely among County residents. Some County residents directly pay property taxes, others do
not. Those who pay both property taxes and federal income taxes are in different tax brackets,
and benefit to different degrees on deducting property taxes from their income tax. The effect
on retail businesses within Collier County will also vary widely. Increasing sales taxes often
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results in decreased retail sales. Businesses near the Lee County border and those who compete
against intemet retailers may find themselves disproportionately impacted by this optional
surtax. If the Board has any interest in this matter, an independent economic impact study could
prove helpful in understanding the financial impacts to the community.
GROWTH MANAGEMENT IMPACT: None.
RECOMMENDATION: The benefits of implementing this optional surtax are not readily
apparent to the County Attorney. That said, as a condition precedent to any county holding a
referendum on the surtax, it must first enter into an interlocal agreement with a majority of the
special districts that provide emergency fire and rescue services within the county. Accordingly,
it is the recommendation of the County Attorney that the Board take no action with respect to
this matter until a majority of the independent fire districts signify that they are in favor of this
optional surtax. Should this occur, the Board may wish to commission an economic analysis to
determine the fiscal impact to the County. The issue of fire district consolidation and a potential
consolidation bill could also impact the analysis.
Prepared by: Jeffrey A. Klatzkow, County Attorney
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Agenda Item No. 16K7
October 27, 2009
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COLLIER COUNTY
BOARD OF COUNTY COMMISSIONERS
Item Number: 16K7
Item Summary: Report to the Collier County Board of County Commissioners regarding the legal effect and
application of Florida Statute 212.055(8) (Senate Bill No. 1000, the Emergency Fire Rescue
Services and Facilities Surtax).
Meeting Date: 10/27/2009 9:00:00 AM
Prepared By
Jeff Klatzkow
County Attorney
Date
County Attorney
County Attorney Office
1012012009 2:38:10 PM
Approved By
Jeff Klatzkow
County Attorney
Date
County Attorney
County Attorney Office
1012012009 2:44 PM
Approved By
John A. Yonkosky
Director of the Office of Management
Date
County Manager's Office
Office of Management & Budget
10/20/2009 3:39 PM
Approved By
Leo E. Ochs, Jr.
Deputy County Manager
Date
Board of County
County Manager's Office
10/2012009 4:40 PM
Commissioners
file: / /C: \AgendaTest \Export\137 - October 27, 2009 \16. CONSENT AGENDA \] 6K. COUN... 10/21/2009