Florida Senate - 2010                                    SB 1130 
 
By Senator Constantine 
22-00964-10                                           20101130__ 
1                        A bill to be entitled 
2         An act relating to the Local Government Revenue 
3         Intercept Act; creating s. 218.387, F.S.; providing a 
4         short title; providing definitions; providing that a 
5         local government may authorize by resolution or 
6         ordinance the Department of Revenue to intercept 
7         certain revenues in order to replenish the debt 
8         service reserve or other payment for local government 
9         bonds; providing certain requirements for such 
10         resolution or ordinance; specifying certain 
11         obligations and restrictions on the local government 
12         with respect to such interception; authorizing the 
13         department to adopt rules; providing an effective 
14         date. 
15 
16  Be It Enacted by the Legislature of the State of Florida: 
17 
18         Section 1. Section 218.387, Florida Statutes, is created to 
19  read: 
20         218.387 Local Government Revenue Intercept Act.— 
21         (1) This section may be cited as the “Local Government 
22  Revenue Intercept Act.” 
23         (2) As used in this section, the term: 
24         (a) “Available revenues” means local government funds 
25  derived from one or more of the following: the communications 
26  services tax, the local government half-cent sales tax, a local 
27  option fuel tax, or revenue sharing. 
28         (b) “Bonds” means any bond, loan, promissory note, lease 
29  purchase agreement, certificate of participation, installment 
30  sale, lease, or similar financing mechanism or financial 
31  arrangement of a local government, whether or not a debt for 
32  legal purposes. 
33         (c) “Communications services tax” means the communications 
34  services tax collected pursuant to chapter 202 for distribution 
35  to local governments. 
36         (d) “Department” means the Department of Revenue. 
37         (e) “Intercept program” means an authorized process for 
38  intercepting a local government’s available revenues as provided 
39  in subsection (3). 
40         (f) “Local government” means any county or municipality, or 
41  any county or municipality that individually or collectively 
42  participates with a separate legal entity created under s. 
43  163.01 for the purpose of financing or refinancing bonds and the 
44  separate legal entity. 
45         (g) “Local government half-cent sales tax” means the local 
46  government half-cent sales tax collected pursuant to part VI of 
47  this chapter for distribution to local governments. 
48         (h) “Local option fuel tax” means any optional fuel tax 
49  collected by a county, municipality, or other political 
50  subdivision pursuant to chapter 206 for distribution to local 
51  governments. 
52         (i) “Revenue sharing” means funds available pursuant to 
53  part II of this chapter for distribution to local governments. 
54         (3) A local government may, by resolution or ordinance, 
55  authorize the department to intercept the local government’s 
56  available revenues as specified in this section. 
57         (a) The resolution or ordinance must: 
58         1. Specifically authorize the department to intercept 
59  available revenues collected or held by the state for the local 
60  government and use the revenues to replenish the debt service 
61  reserve or other similar payment account for the local 
62  government bonds if the local government failed to make a 
63  required debt service or other similar payment and the bond 
64  account has been drawn upon to make such payment. 
65         2. Specifically authorize the department to intercept 
66  available revenues that have not been pledged to other current 
67  or future bonds of the local government. 
68         3. Specifically authorize the department to intercept 
69  available revenues, if any, as needed from the following sources 
70  in the following order of priority: 
71         a. Funds derived from revenue sharing which are restricted 
72  under s. 218.25(4) and not permitted to be assigned, pledged, or 
73  set aside for debt service or other similar payment. 
74         b. Funds derived from the local government half-cent sales 
75  tax. 
76         c. Funds derived from the communications services tax. 
77         d. Funds derived from a local option fuel tax if the bonds 
78  relate to an authorized use of such funds. 
79         e. Any remaining funds derived from revenue sharing. 
80         4. Specify the trustee or paying agent for the local 
81  government bonds, specifically authorize the department to 
82  receive and act on requests by the trustee or paying agent to 
83  intercept available revenues, and acknowledge that the local 
84  government is responsible for informing the department of any 
85  changes to the trustee or paying agent within 30 days after such 
86  change. 
87         5. Require that local government bonds have a cash-funded 
88  debt service or other similar payment reserve equal to the 
89  maximum annual debt service or other similar payment, and 
90  require that payment dates for principal and interest for the 
91  bonds be no more frequent than quarterly. 
92         6. Inform the department of the debt service or other 
93  similar payment schedule for the local government bonds. 
94         7. Provide that the local government has reasonably 
95  determined in good faith that anticipated available revenues in 
96  each fiscal year during the term or length of the local 
97  government bonds will be at least 1.75 times the maximum annual 
98  amount of debt service or other similar payment on the bonds. 
99         8. Acknowledge that the local government may not amend or 
100  repeal the resolution or ordinance establishing the intercept 
101  program without the concurrence of a majority of the purchasers, 
102  holders, and owners of the local government bonds, or an entity 
103  authorized to act on the behalf of the purchasers, holders, and 
104  owners. 
105         9. Acknowledge that the resolution or ordinance authorizing 
106  the intercept program must be included and made a part of the 
107  bond resolution or other bond agreement. 
108         (b) The local government shall provide a copy of the 
109  ordinance or resolution to the department and the Division of 
110  Bond Finance of the State Board of Administration. Within 30 
111  days after receipt, the department shall acknowledge and accept 
112  the ordinance or resolution after it has determined that the 
113  ordinance or resolution contains all the required authorizations 
114  and information specified in this subsection, or, if not, inform 
115  the local government in writing of any deficiencies with the 
116  ordinance or resolution. 
117         (4) A local government’s funds, as restricted under revenue 
118  sharing under s. 218.25(4) and not permitted to be assigned, 
119  pledged, or set aside for debt service or other similar payment, 
120  must be available revenues subject to being intercepted as 
121  provided in this section. Available revenues under an intercept 
122  program of 1.75 times the maximum annual amount of debt service 
123  or other similar payment on the local government bonds are 
124  provided solely to prevent a default on local government bonds 
125  and may not be considered in any calculation for additional 
126  local government bonds. The department shall implement only the 
127  specific provisions of this section and is not responsible for 
128  providing the local government’s demographic or revenue history. 
129  The local government and trustee or paying agent shall jointly 
130  inform the department of the termination of local government 
131  bonds subject to the intercept program. 
132         (5) The trustee or paying agent for local government bonds 
133  subject to an intercept program must provide the department and 
134  the local government with at least 60 days’ written notice of 
135  the need to intercept the local government’s available revenues, 
136  the exact amount of revenues to be intercepted, the date the 
137  intercepted revenues are to be deposited with the trustee or 
138  paying agent, and wiring or other instructions for transmitting 
139  the revenues. Upon receiving the notice, the department shall 
140  intercept the local government’s available revenues, if the 
141  revenues are otherwise required to be distributed to the local 
142  government by the department, and transmit the revenues as 
143  specified by the trustee or paying agent in a timely manner. The 
144  department shall be paid for all costs it incurs in 
145  administering this section. 
146         (6) A local government’s bonds subject to an intercept 
147  program do not constitute an obligation of the state, a debt of 
148  the state, or a pledge of the full faith and credit or taxing 
149  power of the state. Revenues payable under an intercept program 
150  are payable only from available revenues as provided in this 
151  section. An intercept program does not constitute the state’s 
152  assumption of a debt of a local government. The state covenants 
153  with the purchasers, holders, and owners of bonds covered under 
154  an intercept program that it will not repeal, revoke, rescind, 
155  modify, or amend the provisions of this section in a manner that 
156  would abrogate the rights or protections of such purchasers, 
157  holders, and owners of bonds. 
158         (7) The department may adopt forms or rules to administer 
159  this section. 
160         Section 2. This act shall take effect upon becoming a law.