Legislative Update

By Florida Senator Burt L. Saunders

Florida is one of a handful of states that has an intangibles tax. The tax charges $2 per every $1,000 of value on intangible assets such as stocks, bonds, mutual funds and a portion of accounts receivable. The result is that many small businesses pay intangibles tax on their accounts receivable and on money that their customers owe them. The intangibles tax also punishes people who have saved and invested for their future because it assesses not only income, but the accumulation of income.

Moreover, the intangibles tax acts as an impediment to economic development and places in-state businesses at a competitive disadvantage with other states. According to a study conducted by Florida TaxWatch, the intangibles tax has resulted in two major employers deciding to locate in states other than Florida just last year. Enterprise Florida estimated that the loss of jobs from those two companies alone to be 1,964 jobs and $55 million in direct and indirect earnings to our state.

Last year, legislators passed a bill that began the phase-out of the intangibles tax on accounts receivable. The bill exempted one-third of a business's accounts receivable and called for a two-thirds exemption in 1999 and total elimination by 2000. More importantly, the bill raised the minimum amount owed that would require a return from $5 to $60, saving nearly 180,000 individuals and 96,000 small businesses from having to file an annual return and pay the tax.

Committed to the continued elimination of this burdensome tax, the 1999 Legislature passed an intangibles tax relief bill that will offer tax savings to 480,000 individuals and 180,000 businesses. The bill also implements the second year of a three-year phase-out of the intangibles tax on business accounts receivable, and also reduces the millage rate from 2 mils to 1.5 mils.

Our economy has remained strong, and we have been able to take action on the second year phase-out of the intangibles tax. You can count on a total repeal of this tax in 2000.

Eminent Domain Bill to Help Land Owners

By Florida Representative Carole Green

The 1999 Legislative Session ended on April 30, 1999. Out of 2,637 bills filed in the House and Senate, 499 bills were passed. The overall atmosphere of the Session was pro-business, with the passage of bills for Tort Reform and various tax credits to businesses.

One bill passed by the Legislature impacts Florida's Eminent Domain statutes and will have ramifications on the business community in high growth areas such as Southwest Florida. Eminent domain is the power of the state to take private property for public use. Such power is restricted under both federal and state constitutions. Article X of the Florida Constitution prohibits the government from taking property through the exercise of eminent domain without full compensation.

However, payment of compensation for intangible losses and incidental or consequential damages is not required by the constitution, but is granted or withheld simply as a matter of legislative grace.

Florida Senate Bill 940, which was included in House Bill 591 for final passage, may increase the amount of compensation to property owners, specifically with respect to business damages.

This is good news to any property owner who has ever had to deal with this frightening scenario. This law requires a negotiation process, and it requires that the condemning authority give notice of the proceedings and a written offer of compensation to the property owner(s). The business owner must submit a notice of business damages in writing during the mediation process, and the condemning authority is required to pay all reasonable costs and attorney's fees incurred on behalf of the business owner in this process.

The bill's language was chosen with extensive input from the business community, the Florida League of Cities and the Florida Association of Counties. While these Eminent Domain changes do not go as far as the business community would like, it is a step in the right direction. If you wish to obtain a copy of this law, please contact my office at (941) 433-6775.

Life After Y2K: Protecting Florida Businesses from Frivolous Lawsuits

By United States Congressman Porter J. Goss (FL-14)

As we look ahead to the new millennium, this milestone means something different to everyone. But, there is one thing we all (especially business owners) will have to face as the calendar races toward the year 2000 -- the Y2K computer bug. The task of revamping and protecting an entire business computer system is not an easy or an inexpensive one, but in this high-tech era, it is crucial.

For the next six months, our nation will undergo an unprecedented level of technological preparation. As the year 2000 approaches, we want to encourage businesses, both small and large, to take the necessary steps to ensure a smooth transition for their employees and consumers, while avoiding unnecessary lawsuits. Small business is the engine that drives the economy in Southwest Florida. Many of our mom and pop businesses are small enough that they could be ruined by an onslaught of litigation due to a possible Y2K related computer failure.

The public expects businesses to accept responsibility for damage if they do not act in good faith and address this problem. However, in protecting this public trust, we also must strive to create an environment where businesses feel confident that they can make their best effort. Businesses should be allowed to address the Y2K bug without the threat of a trial-lawyer- sponsored "sweepstakes" hanging over their heads.

The Year 2000 Readiness and Responsibility Act passed the House this spring, and it offers a common-sense solution to this unique problem. The bill makes people liable only for their portion of the fault, so experts who can act to fix Y2K computer problems do so without fear of liability for problems they did not create. The legislation does not limit victims' rights to recover for personal injuries in any way, but it does limit punishment of individuals and groups who act promptly and in good faith.

The Senate and House worked out the differences in their two bills during joint negotiations. The main goal was to produce a plan that would escape President Clinton's looming death threat, while ensuring U.S. businesses are safe from unfair and frivolous Y2K lawsuits. The President is expected to sign the end product into law this summer.

Our Southwest Florida businesses truly help mold our community into one of the most special places in our great country. Yet, those entrepreneurs are already burdened with too many hurdles (many put there by the government) that they must face in day to day operations. This plan is a chance for the government to help those same folks avoid the byte of unfair lawsuits and those out to make a