This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h1195.WMC
DATE: 1/19/2024
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 1195 Millage Rates
SPONSOR(S): Garrison
TIED BILLS: IDEN./SIM. BILLS: SB 1202, HB 1141, SB 1322
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Ways & Means Committee Rexford Aldridge
2) Local Administration, Federal Affairs & Special
Districts Subcommittee
3) State Affairs Committee
SUMMARY ANALYSIS
Ad valorem taxes are annual taxes levied by counties, cities, school districts and certain special districts.
These taxes are based on the just value of real and tangible personal property as determined by county
property appraisers on January 1 of each year. Each year, local governing boards levy millage rates (i.e., tax
rates) on the taxable value of property to generate the property tax revenue contemplated in their annual
budgets.
The Florida Constitution prescribes specific maximum millage rates that can be levied by each local
government, except for special districts, which can levy a maximum rate as determined by voters. To ensure
that local governments collect roughly the same amount of ad valorem revenue as the prior year, statute
provides a formula for calculating the yearly maximum millage rates that local governments can charge.
The governing body of a county, a municipality, or an independent special district votes to adopt the yearly
millage rates. By a majority vote, a governing board can adopt the maximum millage rate calculated using the
formula. Local governments are allowed to override this maximum rate by extraordinary votes of their
governing boards or by referendum.
A higher rate may be adopted only under the following conditions:
A rate of not more than 110 percent of the maximum rate must be adopted by a two-thirds vote of the
governing body; or
A rate in excess of 110 percent of the maximum rate must be adopted by a unanimous vote the
governing body or by a three-fourths vote of the membership of the governing body if the governing
body has nine or more members, or if the rate is approved by a referendum.
The bill amends section 200.065(5), F.S., to require a two-thirds vote of the governing body of a county,
municipality, or independent special district in order to pass any millage rate increase.
The bill has an effective date of July 1, 2024.
STORAGE NAME: h1195.WMC PAGE: 2
DATE: 1/19/2024
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Property Taxes in Florida
The Florida Constitution reserves ad valorem taxation to local governments and prohibits the state from
levying ad valorem taxes on real and tangible personal property.
1
The ad valorem tax is an annual tax
levied by counties, municipalities, school districts, and some special districts based on the value of real
and tangible personal property as of January 1 of each year.
2
The Florida Constitution requires that all
property be assessed at just value for ad valorem tax purposes,
3
and it provides for specified
assessment limitations, property classifications, and exemptions.
4
After the property appraiser
considers any assessment limitation or use classification affecting the just value of a property, an
assessed value is produced. The assessed value is then reduced by any exemptions to produce the
taxable value.
5
Each year, local governing boards levy millage rates (i.e., tax rates) on taxable value to
generate the property tax revenue contemplated in their annual budgets.
Maximum Millage Rates
The Florida Constitution prescribes specific maximum millage rates that can be levied by each local
government, except for special districts.
6
The maximum millage rate that can be charged by a special
district is determined by law approved by vote of the electors who are owners of freeholds in the special
district’s jurisdiction and are not wholly exempt from taxation.
7
The constitution prohibits the levy of ad
valorem taxes in excess of the following:
Ten mills for county purposes,
Ten mills for municipal purposes,
Ten mills for school purposes, and
One mill for water management purposes, except in Northwest Florida (limit is .05 mills).
8
Property taxes levied for the payment of bonds and taxes levied for periods not longer than two years,
when authorized by a vote of the electors, are not subject to millage limitations.
9
The Rolled-Back Rate
Chapter 200, F.S., is titled “Determination of Millage” and generally governs the process, procedures
and limitations on the establishment of millage rates by units of local government with ad valorem
taxing authority.
A central concept is the “rolled-back rate,” as defined in s. 200.065(1), F.S., which is:
1
Art. VII, s. 1(a), Fla. Const.
2
S. 192.001(12), F.S., defines “real property” as land, buildings, fixtures, and all other improvements to land. The terms “land,” “real
estate,” “realty,” and “real property” may be used interchangeably. S. 192.001(11)(d), F.S., defines “tangible personal property” as all
goods, chattels, and other articles of value (but does not include the vehicular items enumerated in Art. VII, s. 1(b), Fla. Const., and
elsewhere defined) capable of manual possession and whose chief value is intrinsic to the article itself.
3
Art. VII, s. 4, Fla. Const.
4
Art. VII, ss. 3, 4, and 6, Fla. Const.
5
S. 196.031, F.S.
6
Art. VII, s. 9(b), Fla. Const.
7
Id.
8
Art. VII, s. 9, Fla. Const. A mill is equal to $1 per $1,000 of value, or .001. A tax rate of 10 mills is equal to 1%.
9
Art. VII, s. 9(b), Fla. Const. STORAGE NAME: h1195.WMC PAGE: 3
DATE: 1/19/2024
[A] millage rate which, exclusive of new construction, additions to structures, deletions,
increases in the value of improvements that have undergone a substantial rehabilitation which
increased the assessed value of such improvements by at least 100 percent, property added
due to geographic boundary changes, total taxable value of tangible personal property within
the jurisdiction in excess of 115 percent of the previous year's total taxable value, and any
dedicated increment value, will provide the same ad valorem tax revenue for each taxing
authority as was levied during the prior year less the amount, if any, paid or applied as a
consequence of an obligation measured by the dedicated increment value.
If a local government levies a property tax rate in excess of the rolled-back rate, such levy must be
characterized as a tax increase in the authorizing resolution or ordinance and in the advertisement
required prior to adoption of a final millage rate and budget.
10
Millage Rates in Excess of the Rolled-back Rate
In 2007, the Legislature enacted statutory changes to Chapter 200,
11
that created a formula using the
rolled-back rate to determine the maximum millage rate (and implicitly a maximum revenue) that could
be levied by a non-school taxing authority governing board by a simple majority vote.
The maximum millage rate that most non-school taxing authorities can levy by a simple majority vote is
the rolled-back rate assuming the previous year’s maximum millage rate was actually levied, adjusted
by the change in Florida per capita personal income.
12
Local governments are allowed to override this
maximum rate by extraordinary votes of their governing boards or by referendum. A higher rate may be
adopted only under the following conditions:
A rate of not more than 110 percent of the rolled-back rate based on the previous year’s
maximum millage rate, adjusted for change in per capita Florida personal income, may be
adopted if approved by a two-thirds vote of the membership of the governing body of the taxing
authority; or
A rate in excess of 110 percent may be adopted if approved by a unanimous vote of the
membership of the governing body of the taxing authority or by a three-fourths vote of the
membership of the governing body if the governing body has nine or more members, or if the
rate is approved by a referendum.
13
Effect of Proposed Changes
The bill amends section 200.065(5), F.S., requiring a two-thirds vote of the governing body of a county,
municipality, or independent special district in order to pass any millage rate increase.
B. SECTION DIRECTORY:
Section 1: Amends s. 200.065, F.S. to require a two-thirds vote of the governing body of a county,
municipality, or independent special district in order to pass certain millage rate increases.
Section 2: Provides an effective date.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
10
Ss. 200.065(2)(d) and (3)(a).
11
Ch. 2007-321, Laws of Fla.
12
S. 200.065(5), F.S. The calculation of Florida per capita personal income is to be provided by the Office of Economic and
Demographic Research, per s. 200.001(8)(i), F.S.
13
S. 200.065(5)(a), F.S. STORAGE NAME: h1195.WMC PAGE: 4
DATE: 1/19/2024
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
None.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Subsection 18(b), art. VII of the Florida Constitution provides that the Legislature, except upon
approval by a two-thirds vote, may not enact a general law if the anticipated effect of doing so would
be to reduce the authority that counties or municipalities have to raise revenues in the aggregate.
It is unclear whether requiring a two-thirds vote of the governing body of a county or municipality in
order to pass any millage rate increase represents a reduction in revenue raising authority as
contemplated by subsection 18(b). If the purpose of subsection 18(b) is to determine whether the
amount of potential revenue available to counties and municipalities was reduced, then this bill does
not reduce that potential and the requirement for a two-thirds vote of the Legislature is not
applicable. However, if the purpose of subsection 18(b) is to consider the methods for adopting a
millage rate, then the provisions of this bill (requiring a two-thirds vote of the governing body of a
county or municipality to pass any millage rate increase) may be considered a mandate requiring a
two-thirds vote of the Legislature.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES