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 Committee on Finance and Tax
BILL: CS/SB 284
INTRODUCER: Governmental Oversight and Accountability Committee and Senator Brodeur
SUBJECT: Energy
DATE: March 13, 2023
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Limones-Borja McVaney GO Fav/CS
2. Gross Babin FT Pre-meeting
3. FP
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/SB 284 exempts from sales tax the components and labor used in an electric vehicle
conversion. The bill defines “electric vehicle conversion” to mean replacing the gas or diesel
powertrain technology of a motor vehicle with 100 percent battery electric powertrain
technology.
The bill revises the vehicle procurement requirements for the state purchasing plan. Specifically,
the bill requires vehicles of a given use class to be selected for procurement based on the lowest
lifetime ownership costs, including costs for fuel, operations, and maintenance rather than on the
greatest fuel efficiency available, when fuel economy data is available. The current exemption to
this requirement is continued for emergency response vehicles.
The bill removes requirements that state agencies use ethanol and biodiesel fuel when available,
and that certain entities procure biofuels for fleets when possible.
The bill requires the Department of Management Services to make recommendations before
July 1, 2024, regarding the procurement of electric vehicles and natural gas fuel vehicles along
with the best practices for integrating these vehicles into existing fleets.
The bill expands the definition of “single-trade inspection” for purposes of building code
inspection services to include inspections of the installation of electric vehicle charging stations
and solar energy and energy storage installations or alterations. This allows the property owner
REVISED: BILL: CS/SB 284 Page 2
to contract with a private provider for the inspection services rather than rely solely on the local
government code inspectors.
The Revenue Estimating Conference determined that the effect of exempting electric vehicle
conversions from the sales and use tax results in a $0.5 million reduction to General Revenue
Fund receipts and a $0.1 million reduction to local government revenues beginning in Fiscal
Year 2023-2024.
The Department of Management Services will incur costs modifying the configuration of the
Fleet Management Information System. Local governments may have reduced workloads
relating to code inspections, but will experience a similar decline in revenues associated with
those inspections conducted by private providers.
The bill takes effect July 1, 2023.
II. Present Situation:
Florida Sales and Use Tax
Florida levies a 6 percent sales and use tax (sales tax) on the sale or rental of most tangible
personal property, admissions,
1
transient rentals,
2
and a limited number of services,
3
and a 5.5
percent sales and use tax on the rental of commercial real estate.
4
Chapter 212, F.S., authorizes
the levy and collection of Florida’s sales tax, and provides exemptions and credits applicable to
certain items or uses under specified circumstances. Florida requires a dealer to add the tax to the
sales price of the taxable good or service and collect it from the purchaser at the time of sale.
5
In addition to the state tax, counties may levy local discretionary surtax, comprised of separate
surtaxes.
6
A surtax applies to “all transactions occurring in the county which transactions are
subject to the state tax imposed on sales, use, services, rentals, admissions, and other transactions
by [ch. 212, F.S.], and communications services as defined in ch. 202.”
7
Discretionary sales
surtax rates currently levied vary by county in a range from 0.0 to 1.5 percent.
8
Although Florida’s sales tax is predominately limited to the taxation of tangible personal
property, services that are a part of a sale must be included in the sales price charged to a
consumer.
9
Furthermore, the sales price must include the consideration for a transaction which
requires both labor and material to alter, remodel, maintain, adjust, or repair tangible personal
1
Section 212.04, F.S.
2
Section 212.03, F.S.
3
Section 212.05(1)(i), F.S.
4
Section 212.031, F.S.
5
See ss. 212.07(2) and 212.06(3)(a), F.S.
6
Section 212.055, F.S.
7
Section 212.054, F.S.
8
Office of Economic and Demographic Research (EDR), The Florida Legislature, Florida Tax Handbook, 2022 Local
Discretionary Sales Surtax Rates in Florida’s Counties, 231-232 (2022), available at
http://edr.state.fl.us/content/revenues/reports/tax-handbook/taxhandbook2020.pdf (last visited Mar. 07, 2023).
9
Section 212.02(16), F.S. See also 12A-1.006, F.A.C. BILL: CS/SB 284 Page 3
property.
10
For example, the total charge made to a customer for a repair or modification of an
automobile is subject to sales tax.
Procurement of Commodities or Contractual Services
Chapter 287, F.S., specifies the procedures for the state procurement of commodities or
contractual services. The Department of Management Services (DMS) oversees state purchasing
activity, including professional and contractual services, as well as commodities needed to
support agency activities.
11
The DMS establishes purchasing agreements and procures state term
contracts for commodities and contractual services, and establishes uniform procurement
policies, rules, and procedures.
12
The DMS negotiates contracts and purchasing agreements that
are intended to leverage the state’s buying power. The DMS is directed to consider the life-cycle
cost of commodities purchased by the state.
13
The DMS is authorized to establish energy-
efficiency standards for major energy-consuming products.
14
State agencies may use a variety of procurement methods, depending on the cost and
characteristics of the needed good or service, the complexity of the procurement, and the number
of available vendors. These methods include the following:
Single source contracts,
15
used when an agency determines that only one vendor is available
to provide a commodity or service at the time of purchase;
Invitations to bid,
16
used when an agency determines that standard services or goods will
meet needs, wide competition is available and the vendor’s experience will not greatly
influence the agency’s results;
Requests for proposals,
17
used when the procurement requirements allow for consideration of
various solutions and the agency believes more than two or three vendors exist who can
provide the required goods or services; and
Invitations to negotiate,
18
used when negotiations are determined to be necessary to obtain
the best value and involve a request for highly complex, customized, mission-critical
services, by an agency dealing with a limited number of vendors.
For procurement of commodities or contractual services in excess of $35,000, agencies must use
a competitive solicitation process.
19
However, specific contractual services and commodities are
not subject to competitive solicitation requirements.
20
10
Id.
11
Sections 287.032 and 287.042, F.S.
12
Id.; see Rule 60A-1002, F.A.C.
13
Section 287.083(1), F.S.
14
Section 287.083(3), F.S.
15
Section 287.057(3)(c), F.S.
16
Section 287.057(1)(a), F.S.
17
Section 287.057(1)(b), F.S.
18
Section 287.057(1)(c), F.S.
19
Section 287.057(1), F.S.
20
Section 287.057(3)(e), F.S. BILL: CS/SB 284 Page 4
Climate-friendly Public Business
Section 286.29, F.S., requires state agencies to:
Consult with the “Florida Climate-Friendly Preferred Products List,”
21
in procuring products
from state term contracts.
22
If the price is comparable, then they shall procure such
products.
23
Contract only with hotels or conference facilities for meetings and conferences as recognized
by the Green Lodging Program.
24,25
Ensure vehicles meet minimum maintenance schedules shown to reduce fuel consumption
and report such compliance to the DMS.
26
When procuring new vehicles, to define the
intended purpose for such vehicle which will then be chosen based on greatest fuel efficiency
available for a given use class, when fuel economy data is available.
27
Use ethanol and biodiesel blended fuels when available.
28
Procure biofuels for fleet, to the greatest extent practicable, if the agency administers central
fueling operations.
29
Florida Building Codes
The purpose and intent of the Florida Building Code (building code) is to provide a mechanism
for the uniform adoption, updating, interpretation, and enforcement of a single, unified state
building code.
30
The Building Code consists of a single set of documents that apply to the design,
construction, erection, alteration, modification, repair or demolition of public or private
buildings, structures, or facilities in Florida. The Building Code must be applied, administered,
and enforced uniformly and consistently from jurisdiction to jurisdiction.
31
Contractors and property owners are permitted to hire licensed Building Code administrators,
engineers, and architects, referred to as “private providers,” to review building plans, perform
21
The DMS keeps a Florida Climate-Friendly Preferred Products List at
https://www.dms.myflorida.com/business_operations/state_purchasing/state_contracts_and_agreements/florida_climate_frien
dly_preferred_products_list, (last visited Mar. 07, 2023).
22
Section 286.29(1), F.S.
23
Id.
24
The Florida Department of Environmental Protection designates and recognizes lodging facilities that make a commitment
to conserve and protect Florida's natural resources through the Florida Green Lodging Program. To become designated,
facilities must conduct a thorough property assessment and implement a specified number of environmental practices in five
areas of sustainable operations: (1) communication and education with customers, employees, and the public; (2) waste
reduction, reuse and recycling; (3) water conservation; (4) energy efficiency; and (5) indoor air quality. See, Green Lodging,
https://floridadep.gov/osi/green-lodging/content/about-florida-green-lodging-program (Last visited Mar. 07, 2023).
25
Section 286.29(2), F.S.
26
Section 286.29(3), F.S., requires state agencies to report compliance to the DMS through the Equipment Management
Information System database. The DMS is implementing a new Statewide Fleet Management Information System that can be
used to manage cost information and reports to ensure the effective and efficient use, operation, maintenance, repair, and
replacement of motor vehicles, watercraft, and aircraft. See, Fleet Management Information System,
https://www.dms.myflorida.com/business_operations/fleet_management_and_federal_property_assistance/fleet_management
/fleet_management_information_system (Last visited Mar. 07, 2023).
27
Id.
28
Section 286.29(5), F.S.
29
Id.
30
See Part IV, ch. 553, F.S.
31
Section 553.72(1), F.S. BILL: CS/SB 284 Page 5
building inspections, and prepare certificates of completion.
32
A private provider and any duly
authorized representative may only perform building code inspection services that are set forth in
statute, including single-trade inspections. A “single-trade inspection” is defined as:
[a]ny inspection focused on a single construction trade, such as plumbing,
mechanical, or electrical. The term includes, but is not limited to, inspections of
door or window replacements; fences and block walls more than 6 feet high
from the top of the wall to the bottom of the footing; stucco or plastering;
reroofing with no structural alteration; HVAC replacements; ductwork or fan
replacements; alteration or installation of wiring, lighting, and service panels;
water heater changeouts; sink replacements; and repiping.
33
A private provider cannot provide building code inspection services to any building designed or
constructed by the private provider or the private provider’s firm.
34
A fee owner or the fee
owner’s contractor who uses a private provider to provide building code inspection services must
notify the local building official in writing that a private provider has been contracted to perform
the required inspections of construction, including single-trade inspections.
35
If the fee owner or
the fee owner’s contractor makes any changes to the listed private providers or the services to be
provided by such private providers the fee owner’s contractors must update the notice to reflect
such changes.
36
III. Effect of Proposed Changes:
Section 1 amends s. 212.08, F.S., to exempt from sales tax the components and labor used in an
electric vehicle conversion. The bill defines “electric vehicle conversion” to mean replacing the
gas or diesel powertrain technology of a motor vehicle with 100 percent battery electric
powertrain technology.
Section 2 amends s. 286.29, F.S., to require any governmental entity that purchases under the
state purchasing plan to select vehicles based on the lowest lifetime ownership costs, including
costs for fuel, operations, and maintenance, rather than based on the greatest fuel efficiency
available when fuel economy data is available. The section deletes the current law requirement
that state agencies use ethanol and biodiesel fuel when available. It also removes the requirement
that state agencies that administer central fueling operations for state-owned vehicles procure
biofuels for fleet needs to the greatest extent practicable. The current exemption to this
requirement continues for emergency response vehicles.
Section 3 requires the DMS to make recommendations before July 1, 2024, to state agencies,
including state colleges and universities, and local governments regarding the procurement of
electric vehicles and natural gas fuel vehicles and the best practices for integrating those vehicles
into existing fleets.
32
Section 553.791, F.S.
33
Id.
34
Id.
35
Section 553.791(4), F.S.
36
Id. BILL: CS/SB 284 Page 6
Section 4 amends s. 553.791, F.S., to expand the definition of “single-trade inspection” to
include the inspection of an installation of electric vehicle charging stations and solar energy and
energy storage installations or alterations.
Section 5 provides the bill takes effect July 1, 2023.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
Article VII, s. 18 of the Florida Constitution governs laws that require counties and
municipalities to spend funds, limit the ability of counties and municipalities to raise
revenue, or reduce the percentage of state tax shared with counties and municipalities.
Subsection (b) of Art. VII, s. 18 of the Florida Constitution provides that except upon
approval of each house of the Legislature by two-thirds vote of the membership, the
legislature may not enact, amend, or repeal any general law if the anticipated effect of
doing so would be to reduce the authority that municipalities or counties have to raise
revenue in the aggregate, as such authority existed on February 1, 1989. However, the
mandates requirements do not apply to laws having an insignificant impact,
37,38
which is
$2.3 million or less for Fiscal Year 2023-2024.
39
The Revenue Estimating Conference determined the effect of exempting electric vehicle
conversions from the sales and use tax would limit the ability local governments have to
raise revenue through the local option sales tax by $0.1 million. Therefore, the bill may
not be a mandate subject to the requirements in Article VII, s. 18 of the Florida
Constitution.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
D. State Tax or Fee Increases:
The bill does not create or increase a state tax or fee as specified in Article VII, s. 19 of
the Florida Constitution.
37
FLA. CONST. art. VII, s. 18(d).
38
An insignificant fiscal impact is the amount not greater than the average statewide population for the applicable fiscal year
multiplied by $0.10. See Florida Senate Committee on Community Affairs, Interim Report 2012-115: Insignificant Impact,
(September 2011), available at http://www.flsenate.gov/PublishedContent/Session/2012/InterimReports/2012-115ca.pdf (last
visited March 7, 2023).
39
Based on the Demographic Estimating Conference’s estimated population adopted on July 18, 2022. The conference
packet is available at http://edr.state.fl.us/Content/conferences/population/archives/220718demographic.pdf (last visited
March 7, 2023). BILL: CS/SB 284 Page 7
E. Other Constitutional Issues:
None identified.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
The Revenue Estimating Conference determined the effect of exempting electric vehicle
conversions from the sales and use tax results in a $0.5 million reduction to General
Revenue Fund receipts and $0.1 million reduction to local government revenues
beginning in Fiscal Year 2023-2024.
B. Private Sector Impact:
Section 4 of the bill, allowing the use of private providers to inspect the installation of
electric vehicle charging stations and solar energy and energy storage installations or
alterations, may increase efficiencies and lower costs for its owners. Additionally,
persons qualified to be a private provider will be able to offer official inspection services,
increasing business opportunities.
C. Government Sector Impact:
To implement section 3 of the bill, the DMS states that modifications, including a
possible configuration in the Fleet Management Information System, will be necessary to
capture information needed to make recommendations.
40
Section 4 of the bill, allowing the use of private providers to inspect the installation of
electric vehicle charging stations and solar energy and energy storage installations or
alterations, may reduce the workload of the local governments relating to inspections;
however, each inspection performed by a private provider will reduce the revenue
otherwise collected by the local governmental entity that would have conducted the
inspection.
VI. Technical Deficiencies:
None.
VII. Related Issues:
The Department of Management Services has stated that the July 1, 2024, implementation date
would be challenging due to the need to consult with outside experts on best practices for
integrating electric vehicles into the existing fleet.
41
40
Department of Management Services, 2023 Agency Legislative Bill Analysis, available at:
http://abar.laspbs.state.fl.us/ABAR/Attachment.aspx?ID=34198 (Last visited Mar. 07, 2023).
41
Id. BILL: CS/SB 284 Page 8
VIII. Statutes Affected:
This bill substantially amends sections 212.08, 286.29, and 553.791 of the Florida Statutes.
IX. Additional Information:
A. Committee Substitute – Statement of Substantial Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
CS by Governmental Oversight and Accountability on February 20, 2023:
The committee substitute:
Exempts from sales tax the components and labor used in an electric vehicle
conversion.
Defines “electric vehicle conversion” to mean replacing the gas or diesel powertrain
technology of a motor vehicle with 100 percent battery electric powertrain
technology.
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.