This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives. STORAGE NAME: h1417.ISC DATE: 2/13/2024 HOUSE OF REPRESENTATIVES STAFF ANALYSIS BILL #: HB 1417 Funding for Environmental Resource Management SPONSOR(S): Buchanan TIED BILLS: IDEN./SIM. BILLS: SB 1638 REFERENCE ACTION ANALYST STAFF DIRECTOR or BUDGET/POLICY CHIEF 1) Infrastructure Strategies Committee Gawin Harrington 2) Appropriations Committee SUMMARY ANALYSIS The state administers various programs related to conserving and protecting Florida’s natural resources. Through the Florida Forever Program, the state has purchased more than 899,574 acres of conservation lands for approximately $3.3 billion. Additionally, through the Rural and Family Lands Protection Program, the state has acquired conservation easements for over 69,000 acres of working agricultural land. The state also invests in improving water quality throughout the state through programs such as the water quality improvement grant program and the federal Clean Water State Revolving Fund loan program, which are administered by the Department of Environmental Protection (DEP). The State of Florida entered into a gaming compact with the Seminole Tribe of Florida (Seminole Tribe) on April 17, 2021, which was amended on May 17, 2021 (the 2021 Compact). The Legislature subsequently ratified the 2021 Compact in a special legislative session. The United States Department of the Interior approved the 2021 Compact on August 6, 2021, which became effective upon publication of notice in the Federal Register. The 2021 Compact establishes a guaranteed minimum payment period for the first five years of the compact, during which the Seminole Tribe is required to make specified revenue share payments to the state. The bill states that the Legislature recognizes that the conservation and preservation of the land and water resources of the state are essential to maintaining the quality of life enjoyed by Floridians. Therefore, the bill dedicates revenues from the 2021 Compact between the Seminole Tribe and the state to acquire and manage conservation lands and to address water quality issues in the state. The bill requires the Legislature to appropriate 96 percent of the revenue share payments received under the 2021 Compact for land conservation, the management of conservation lands, and water quality improvements. The bill will have a negative fiscal impact on the General Revenue Fund, but an offsetting positive fiscal impact on state programs utilized for conservation land and water quality improvement projects. STORAGE NAME: h1417.ISC PAGE: 2 DATE: 2/13/2024 FULL ANALYSIS I. SUBSTANTIVE ANALYSIS A. EFFECT OF PROPOSED CHANGES: Background Conservation Lands Florida Forever Program The Florida Forever Program is the state’s conservation and recreation lands acquisition program. 1 Since 2001, the state has purchased more than 902,011 acres of land for approximately $3.3 billion. 2 Florida Forever supports a wide range of goals, including water resource protection, coastal resiliency, preservation of cultural resources, public access to outdoor recreation, and the restoration and maintenance of public lands. 3 The Acquisition and Restoration Council (ARC) is a 10-member body that makes recommendations on the acquisition, management, and disposal of state-owned lands. 4 The Department of Environmental Protection (DEP) provides primary staff to support ARC. ARC is responsible for developing the Florida Forever priority list, which consists of ranked land acquisition projects that are deemed suitable as conservation property and meet Florida Forever goals. 5 ARC members determine the priority of lands based on weighted criteria. 6 Anyone can propose a project for consideration for the priority list. To develop the list, ARC accepts applications from state agencies, local governments, nonprofit and for-profit organizations, private land trusts, and private individuals for project proposals eligible for Florida Forever funding. 7 ARC then submits the list to the Board of Trustees of the Internal Improvement Trust Fund (Board) for approval. 8 The Board comprises the Governor, Attorney General, Chief Financial Officer, and Commissioner of Agriculture. The Florida Forever priority list is used by DEP to prioritize projects with the available Florida Forever funds allocated annually by the Legislature. To be considered for acquisition, a project must have a willing seller and be on the list. Rural and Family Lands Protection Program The Rural and Family Lands Protection Program (RFLPP) is a land preservation program within the Department of Agriculture and Consumer Services (DACS) that was created to protect agricultural lands through the acquisition of permanent agricultural land conservation easements. 9 Through the RFLPP, DACS, on behalf of the Board, is authorized to allocate money to acquire perpetual, less-than- fee interests in land, enter into agricultural protection agreements, and enter into resource conservation agreements. 10 To qualify for acquisition, the agricultural land must protect the integrity and function of working landscapes, ensure opportunities for viable agricultural activities on working lands threatened by conversion to other uses, and meet certain public purposes. 11 Under the RFLPP, lands must be acquired pursuant to a priority ranking process that is similar to the process for creating the Florida Forever priority list. 12 Through the RFLPP, the state has acquired 1 Section 259.105, F.S. Such acquisitions include less-than-fee agreements. 2 Department of Environmental Protection (DEP), Florida Forever, https://floridadep.gov/floridaforever (last visited Jan. 26, 2024). 3 See s. 259.105(2)(a), F.S. 4 Section 259.035(3), F.S. 5 Section 259.105(8)-(9), F.S. 6 Section 259.105(10), F.S. 7 Section 259.105(7)(a), F.S. 8 Section 259.04(1)(c), F.S. 9 DACS, Rural and Family Lands Protection Program, https://www.fdacs.gov/Consumer-Resources/Protect-Our-Environment/Rural- and-Family-Lands-Protection-Program (last visited Jan. 26, 2024). 10 Section 570.71(1), F.S. 11 Id. 12 Section 259.105(3)(i)1., F.S. STORAGE NAME: h1417.ISC PAGE: 3 DATE: 2/13/2024 conservation easements for over 69,000 acres of working agricultural land. 13 All perpetual easements acquired under the RFLPP must adhere to best management practices established by DACS. 14 Florida Wildlife Corridor The Florida Wildlife Corridor (Corridor), depicted below, 15 is a geographically defined area comprising over 18 million acres of land, which include 10 million acres of conservation lands and 8 million acres of opportunity areas that do not have conservation status. 16 In 2021, the Legislature created the Wildlife Corridor Act (Act) to codify the Corridor and recognize that lands and waters that provide the state’s green infrastructure and vital habitat for wide-ranging wildlife need to be preserved and protected. 17 The purpose of the Act was to create incentives for conservation and sustainable development while preserving the green infrastructure. 18 The Act, in pertinent part, directed DEP to promote and encourage various methods of investing in and protecting the Corridor, including encouraging all agencies that acquire lands to include in their land-buying efforts the acquisition of sufficient legal interest in opportunity areas to ensure the continued viability of the Corridor. 19 Because there is no land acquisition program specifically for acquiring lands that are located within the Corridor, initiatives such as the Florida Forever Program and the Rural and Family Lands Protection Program are used to acquire such lands. Conservation Land Management The Board is charged with the management, control, supervision, conservation, and protection of all lands owned or vested to the state or any of its agencies, departments, boards, or commissions. 20 State lands acquired as part of the Florida Forever Program or other land conservation programs are required 13 DACS, Rural and Family Lands Protection Program, https://www.fdacs.gov/Consumer-Resources/Protect-Our-Environment/Rural- and-Family-Lands-Protection-Program (last visited Jan. 26, 2024). 14 Rule 5I-7.014(3), F.A.C. 15 Florida Wildlife Corridor, FL Wildlife Corridor, available at https://floridawildlifecorridor.org/wp- content/uploads/2021/08/FLWildlifeCorridor.pdf (last visited Jan. 26, 2024). 16 DEP, Florida Wildlife Corridor, available at https://floridadep.gov/sites/default/files/Florida_Wildlife_Corridor.pdf (last visited Jan. 26, 2024). 17 Chapter 2021-181, L.O.F. 18 Section 259.1055(3), F.S. 19 Section 259.1055(5), F.S. 20 Section 253.03(1), F.S. STORAGE NAME: h1417.ISC PAGE: 4 DATE: 2/13/2024 to be managed to ensure the conservation of the state’s plant and animal species and to ensure the accessibility of state lands for the benefit and enjoyment of all people of the state, both present and future. 21 Additionally, all such lands are required to be managed in a manner that provides the greatest combination of benefits to the public and to the natural resources, that provides opportunities for public outdoor recreation that are compatible with the conservation and protection of public lands, and that aligns with the purposes for which the lands were acquired. 22 The Fish and Wildlife Conservation Commission is the lead land management entity for the state. 23 DACS and DEP also manage state lands. Water Quality Phosphorus and nitrogen are naturally present in water and are essential nutrients for the healthy growth of plant and animal life. 24 The correct balance of both nutrients is necessary for a healthy ecosystem; however, excessive nitrogen and phosphorus can cause significant water quality problems. 25 Phosphorus and nitrogen are derived from natural and human-made sources. 26 Human- made sources include sewage disposal systems (wastewater treatment facilities and septic systems), overflows of storm and sanitary sewers (untreated sewage), agricultural production and irrigation practices, and stormwater runoff. 27 Water Quality Regulation The federal Clean Water Act (CWA) 28 establishes the basic structure for regulating discharges of pollutants into the waters of the United States and regulating quality standards for surface waters. 29 The CWA requires states to develop lists of waterbodies that do not meet water quality standards, which are called impaired waters. 30 If DEP determines that any waters are impaired, the waterbody or segment must be placed on the verified list of impaired waters and a total maximum daily load (TMDL) must be calculated. 31 DEP is the lead agency coordinating the development and implementation of TMDLs. 32 Once a TMDL is adopted, 33 DEP may develop and implement a basin management action plan (BMAP), which is a restoration plan for the watersheds and basins connected to the impaired water body 34 that is included on DEP’s Verified List. BMAPs address the pollutant-causing impairments to a water body and are one of the primary mechanisms DEP utilizes to achieve TMDLs. 35 Water Quality Project Funding Programs DEP, in coordination with WMDs, awards grants to governmental entities for the water quality improvement grant program, 36 previously known as the wastewater grant program. 37 The water quality improvement grant program must be used for projects that improve the quality of water bodies that are not attaining nutrient or nutrient-related standards, have an established TMDL, or are located within a BMAP, a reasonable assurance plan, an accepted alternative restoration plan area, or a rural area of 21 Section 253.034(1), F.S. 22 Id. 23 Florida Fish and Wildlife Conservation Commission, Terrestrial Habitat Management Plans, https://myfwc.com/conservation/management-plans/terrestrial/ (last visited Feb. 12, 2024). 24 U.S. Environmental Protection Agency (EPA), The Issue, https://www.epa.gov/nutrientpollution/problem (last visited Jan. 26, 2024). 25 Id. 26 Id. 27 EPA, Sources and Solutions, https://www.epa.gov/nutrientpollution/sources-and-solutions (last visited Jan. 26, 2024). 28 33 U.S.C. section 1251 et seq. 29 EPA, Summary of the Clean Water Act, https://www.epa.gov/laws-regulations/summary-clean-water-act (last visited Jan. 17, 2024). 30 Rule 62-300.200(7), F.A.C. Impaired water means mean a waterbody or waterbody segment that does not meet its applicable water quality standards established in rule due in whole or in part to discharges of pollutants from point or nonpoint sources. 31 Sections 403.067(1) and 403.067(4), F.S.; DEP, Verified List Waterbody IDs (WBIDs), https://geodata.dep.state.fl.us/datasets/FDEP::waterbody-ids-wbids/about (last visited Jan. 26, 2024). 32 Section 403.061, F.S. 33 Section 403.067(6)(c), F.S. TMDLs are established in rule for each water body or water body segment. 34 Section 403.067(7)(a)1., F.S. 35 DEP, Guidance on Developing Restoration Plans as Alternatives to TMDLs – Assessment Category 4b and 4e Plans, June 2015, 2, https://floridadep.gov/sites/default/files/4b4ePlansGuidance.pdf (last visited Jan. 26, 2024). 36 Section 403.0673, F.S. 37 Chapter 2023-169, L.O.F. STORAGE NAME: h1417.ISC PAGE: 5 DATE: 2/13/2024 opportunity. These grants may be used for specified projects related to onsite sewage treatment and disposal systems, domestic wastewater treatment facilities, stormwater treatment facilities, projects in BMAPs, or projects listed in city or county capital improvement elements. 38 DEP submits an annual report identifying the projects funded through the grant program to the Governor and Legislature. 39 Established within the CWA is the Clean Water State Revolving Fund (CWSRF), which is a federal financial assistance program for a wide range of water infrastructure projects administered through the states. 40 The CWSRF program provides low-interest loans for the planning, designing, and construction of wastewater, stormwater, and nonpoint source pollution prevention projects. 41 Small, disadvantaged communities may also be eligible for grants, which can significantly reduce the amount owed on a CWSRF loan. 42 DEP receives applications throughout the year and compiles a priority list. 43 Projects are prioritized according to the extent to which each project is intended to remove, mitigate, or prevent adverse effects on surface or ground water quality and public health. 44 2021 Seminole Gaming Compact Gaming compacts are regulated by the Federal Indian Gaming Regulatory Act (IGRA) 45 and state law. 46 The State of Florida entered into a gaming compact with the Seminole Tribe of Florida (Seminole Tribe) on April 7, 2010 (the 2010 Compact). In 2021, the Governor entered into a new compact with the Seminole Tribe on April 17, 2021, which was amended on May 17, 2021 (the 2021 Compact). 47 The Legislature subsequently ratified the 2021 Compact in a special legislative session. 48 The U.S. Department of the Interior approved the 2021 Compact on August 6, 2021, 49 which became effective upon publication of notice in the Federal Register. 50 The 2021 Compact supersedes the 2010 Compact. Revenue Sharing under the 2021 Compact The 2021 Compact establishes a guaranteed minimum payment period for the first five years of the compact. During the five-year period, the Seminole Tribe is required to make guaranteed minimum revenue share payments as specified, to total $2.5 billion. The revenue share payments must be paid by the Seminole Tribe to the state as follows: Percentage payments for slots, raffles, drawings, and new games range from 12 percent of net win 51 up to $2 billion, to 25 percent of net win greater than $3.5 billion. 52 Percentage payments for table games range from 15 percent of net win up to $1 billion, to 25 percent of net win greater than $2 billion. 53 38 Section 403.0673(2), F.S. 39 Section 403.0673(7), F.S. 40 33 U.S.C. section 1383; EPA, Clean Water State Revolving Fund, https://www.epa.gov/cwsrf/about-clean-water-state-revolving- fund-cwsrf#works (last visited Jan. 17, 2024). 41 DEP, State Revolving Fund, https://floridadep.gov/wra/srf (last visited Jan. 17, 2024); DEP, CWSRF Program, https://floridadep.gov/wra/srf/content/cwsrf-program (last visited Jan. 17, 2024). Funds are made available for planning, design, and construction loans. Id. 42 Id. 43 Id. DEP adopted its most recent priority list on May 17, 2023. DEP, CWSRF SFY2023 Priority List, available at https://floridadep.gov/sites/default/files/CWSRF%20SFY2023%20Priority%20List.pdf (last visited Jan. 17, 2024). 44 Rule 62-503.300(1)(e), F.A.C. 45 25 U.S.C. s. 2701, et seq. 46 Sections 285.710, F.S., and 285.712, F.S. 47 Office of Economic & Demographic Research (EDR), Revenue Estimating Conference Indian Gaming Revenues, http://www.edr.state.fl.us/Content/conferences/Indian-gaming/IndianGamingSummary.pdf (last visited Jan. 24, 2024). 48 Chapter 2021-268, L.O.F. 49 The Secretary of the Interior may approve or disapprove of a compact within 45 days of submission, but if no action is taken within the 45-day timeframe, the compact is considered to have been approved but only to the extent that the compact is consistent with federal law. 25 U.S.C. s. 2701(10)(d). The Secretary of the Interior did not act on the 2021 Compact. 50 U.S. Department of the Interior, Seminole Tribe and State of Florida Tribal State Gaming Compact, available at https://www.bia.gov/sites/default/files/dup/assets/as- ia/oig/pdf/508%20Compliant%202021.08.11%20Seminole%20Tribe%20Gaming%20Compact.pdf (last visited Jan. 24, 2024). 51 “Net Win” means the total receipts from the play of all covered games less all prize payouts and free play or promotional credits issued by the Seminole Tribe. 2021 Gaming Compact Between the Seminole Tribe of Florida and the State of Florida, 13, available at https://www.flgov.com/wp-content/uploads/pdfs/2021%20Gaming%20Compact.pdf (last visited Jan. 23, 2024). 52 Id. at 46-47. 53 Id. at 48. STORAGE NAME: h1417.ISC PAGE: 6 DATE: 2/13/2024 Percentage payment for tribal sports betting is 13.75 percent of net win, excluding the net win received by the Seminole Tribe on pari-mutuel sports betting. 54 Percentage payment for pari-mutuel sports betting is 10 percent of net win received by the Seminole Tribe on pari-mutuel sports betting. 55 The Seminole Tribe’s guaranteed minimum revenue share payment is $400 million per year for the first five years. 56 At the end of the third year of the five-year guaranteed minimum payment period, if the total revenue share payments are less than $1.5 billion, the Seminole Tribe must pay the difference to the state. 57 At the end of the fifth year of the five-year guaranteed minimum payment period, if the total revenue share payments are less than $2.5 billion, the Seminole Tribe must pay the difference to the state. 58 The specific revenue share payment amounts the Seminole Tribe is required to pay to the state are calculated as outlined in the chart below in accordance with the 2021 Compact. SUMMARY OF REVENUE SHARE PAYMENTS - 2021 Gaming Compact (Revenue Share Payments by the Seminole Tribe to the State in Billions) Slots, Raffles and Drawings, and New Games Net Win Revenue Share $0-2B 12% $2-2.5B 17.5% $2.5-3B 20% $3-3.5B 22.5% > $3.5B 25% Table Games Net Win Revenue Share $0-1B 15% $1-1.5B 17.5% $1.5-2B 22.5% > $2B 25% The state began receiving payments pursuant to the 2021 Compact in October of 2021. 59 The Seminole Tribe continued revenue sharing with the state through February 2022, after which time they discontinued all payments. Between October 2021 and February 2022, the state received five payments of $37.5 million, totaling $187.5 million. 60 Litigation The 2021 Compact has been subject to litigation in federal and state courts. In federal court, the Secretary of the Interior’s approval of the 2021 Compact was challenged on the basis that the sports betting provision was illegal under various federal laws, including the IGRA. 61 The U.S. District Court for the District of Columbia set aside federal approval of the 2021 Compact on November 22, 2021. On June 30, 2023, the U.S. Court of Appeals for the District of Columbia vacated the lower court’s opinion, finding the 2021 Compact did not violate federal law. 62 The plaintiffs then requested the U.S. Supreme 54 Id. at 48-49. 55 Id. 56 Id. at 51-52. 57 Id. at 51. 58 Id. 59 EDR, Revenue Estimating Conference Indian Gaming Revenues, http://www.edr.state.fl.us/Content/conferences/Indian- gaming/IndianGamingSummary.pdf (last visited Jan. 24, 2024). 60 Id. 61 West Flagler Associates, Ltd. v. Haaland, 573 F. Supp. 3d 260, 265 (D.D.C. 2021). 62 West Flagler Associates, Ltd. v. Haaland, 71 F. 4th 1059, 1068-1070 (D.C. 2023). STORAGE NAME: h1417.ISC PAGE: 7 DATE: 2/13/2024 Court to issue a stay to prevent the 2021 Compact from being executed while they filed an appeal with the Supreme Court. The stay was ultimately denied. 63 Additionally, litigation relating to the legality of the 2021 Compact is currently pending in the Florida Supreme Court. 64 The 2021 Compact is being challenged on the basis that the Governor’s and Legislature’s actions expanded casino gambling in violation of the Florida Constitution. Effect of the Bill The bill states that the Legislature recognizes that the conservation and preservation of the land and water resources of the state are essential to maintaining the quality of life enjoyed by Floridians. Therefore, the bill dedicates revenues from the 2021 Compact between the Seminole Tribe and the state to acquire and manage conservation lands and to address water quality issues in the state. The bill requires the Legislature to appropriate 96 percent of the revenue share payments received under the 2021 Compact for land conservation, the management of conservation lands, and water quality improvements. B. SECTION DIRECTORY: Section 1. Creates s. 380.095, F.S., related to dedicated funding for conservation lands and water quality improvements. Section 2. Provides an effective date of upon becoming a law. II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT A. FISCAL IMPACT ON STATE GOVERNMENT: 1. Revenues: See Fiscal Comments. 2. Expenditures: See Fiscal Comments. B. FISCAL IMPACT ON LOCAL GOVERNMENTS: 1. Revenues: None. 2. Expenditures: None. C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR: None. D. FISCAL COMMENTS: 63 West Flagler Associates, Ltd. v. Haaland, 144 S. Ct. 10 (2023). The Chief Justice initially granted the temporary stay, but later vacated it. 64 See West Flagler Associates, Ltd. v. DeSantis, SC2023-1333, (Fla. Sept. 26, 2023). The plaintiffs allege that the execution and ratification of the 2021 Compact and the enactment of implementing legislation are unconstitutional under Art. X, s. 30, Fla. Const.; See also Florida Courts, West Flagler Associates, Ltd. v. DeSantis, https://acis.flcourts.gov/portal/court/68f021c4-6a44-4735-9a76- 5360b2e8af13/case/0e5d7fd2-697d-4da7-a447-b1e4bccb450b (last visited Feb. 1, 2024). STORAGE NAME: h1417.ISC PAGE: 8 DATE: 2/13/2024 The bill dedicates funding for conservation lands and water quality improvement. Specifically, the bill requires 96 percent of the revenue share payments received under the 2021 Compact to be appropriated for land conservation, the management of conservation lands, and water quality improvement projects. Absent this legislation, revenue share payments would be credited to General Revenue. The bill has a negative impact to General Revenue balances, but an offsetting positive impact to environmental programs receiving appropriations from this legislation. The overall revenue impact is indeterminate. The Revenue Estimating Conference is scheduled to meet on February 20, 2024, to forecast expected revenues. III. COMMENTS A. CONSTITUTIONAL ISSUES: 1. Applicability of Municipality/County Mandates Provision: Not applicable. This bill does not appear to affect county or municipal governments. 2. Other: None. B. RULE-MAKING AUTHORITY: None. C. DRAFTING ISSUES OR OTHER COMMENTS: None. IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES Not applicable.