Florida lawmakers passed a tax break for the state's manufacturing sector, a top priority for Gov. Rick Scott this legislative session.
But the final vote could spark a legal challenge. The House vote of 68-48 falls below a margin in the state constitution required of any law that reduces tax revenue that is shared with local government.
House Speaker Will Weatherford contended afterward that the vote was still legal, but the House refused to share any legal opinions to bolster Weatherford's argument.
House Democratic Leader Perry Thurston, D-Plantation, predicted that the bill (HB 7007) would be quickly challenged in court once signed.
Democrats objected to the bill because House Republicans cut off debate and would not answer any questions about the legislation. The vote capped a tense, chaotic day where Democrats were forcing the House to read bills in full for a second straight day because of their ongoing protest that House Republicans will not pass a bill that draws down federal aid.
Weatherford, R-Wesley Chapel, was unapologetic for stifling debate.
"I think reading every bill for two days some people would say is a little bit undemocratic," Weatherford said.
The approval of the bill came quickly after languishing in limbo for most of the session.
Senators approved the tax break that afternoon as part of an overarching economic development bill (HB 7007) that passed 37-3.
The bill also includes provisions for the creation of a nonprofit board to manage money from settlements from the 2010 Gulf of Mexico oil spill.
The Legislature's passage of the tax break gives Scott another potential win. The governor already is praising lawmakers for setting aside money for teacher pay raises.
"This is a huge victory for families across Florida," said Scott. For too long, Florida manufacturers have been targeted by a tax on manufacturing equipment that other states didn’t burden their companies with. With this legislation, that unfair advantage came to an end. By removing the tax on manufacturing equipment, Florida businesses will now be able meet their full potential and finally be on a level playing field when competing against other states and countries. Manufacturers outside of our state will now have access to our 15 ports and incredible workforce. I applaud the Legislature for doing the right thing to grow jobs and opportunities for Florida families. This is a huge victory for the Sunshine State."
"It is great to finish tonight on a bill that gives the governor of one of his top priorities," Weatherford said. "It is going to create jobs; it's going to diversify the economy."
And a compromise on a Medicaid expansion alternative — also on Scott's wish list — was in the wings but seems unlikely to pass the House. That would have completed Scott's policy trifecta.
The manufacturing tax break — if upheld as legal — would go into effect from April 30, 2014 to April 30, 2017. It would exempt manufacturers from paying the 6 percent state sales tax on new equipment purchases.
By not collecting the tax, the state's coffers could take an $18 million hit the first year. The "first year" is actually the last two months of the state's fiscal year, meaning the cost could rise to over $100 million the first full year.
But Sen. Dorothy Hukill, the Port Orange Republican who shepherded the deal in the Senate, said the break recognizes "the vital importance of manufacturing to our economy." Florida took a hit in the recession with downturns in construction and tourism.
"We currently now are at a disadvantage when compared to other states, and the Southern states," she said. "To encourage our manufacturers to purchase (equipment) and hire new employees, this exemption is appropriate."
Senate Democratic Leader Chris Smith, one of the three Democrats who voted against the bill, said he feared the exemption would actually cause firms to lay off workers as they automate more work.
"What I would hate to do is read in my paper that, because of the tax break, a factory buys new equipment tax-free, and because of that, fires 10 people," he said.
The bill also creates a nonprofit "Triumph Gulf Coast" board to safeguard any funds recovered by Attorney General Pam Bondi.
The attorney general sued BP and Halliburton before the statute of limitations expired on the 2010 Deepwater Horizon disaster's third anniversary.
Sen. Nancy Detert, R-Venice, said the new public-private board would not control Gulf recovery money coming from the federal RESTORE Act.