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/CS/SB 820
INTRODUCER: Finance and Tax Committee; Education Pre-K -12 Committee; and Senator Grall and
others
SUBJECT: Child Care and Early Learning Providers
DATE: February 12, 2024 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Sabitsch Bouck ED Fav/CS
2. Gross Khan FT Fav/CS
3. AP
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Technical Changes
I. Summary:
CS/CS/SB 820 allows municipalities to exempt licensed preschools from special assessments,
provides tax credits for child care, modifies requirements for licensing of child care providers,
and affects homeowners insurance for large family child care homes.
Specifically, the bill:
 Modifies the existing exemption from special assessments levied by municipalities to include
preschools.
 Provides tax credits to taxpayers who operate a child care facility or make contributions to
child care facilities on behalf of employees. Eligible taxpayers are those that pay the
corporate income tax, insurance premium tax, severance taxes on oil and gas production,
alcoholic beverages tax, and sales tax paid by direct pay permit holders.
 Provides an exemption from licensing for certain entities operating a child care facility solely
attended by its employees.
 Modifies requirements related to licensing of child care facilities by the Department of
Children and Families including limitations on violations, implementation of abbreviated
inspections, background screening, and personnel training.
 Removes annual notifications that child care facilities are required to provide parents
regarding immunization and leaving children in cars.
 Requires county commissions to annually affirm continued services for locally managed
licensing of child care facilities.
BILL: CS/CS/SB 820 Page 2
 Clarifies cancelation and coverage from residential property insurance for large family child
care homes.
The Revenue Estimating Conference has not analyzed the bill; however, the bill is not expected
to change the analysis completed for the prior version. The REC determined that the prior
version of the bill would first affect state revenue in Fiscal Year 2025-2026 by an indeterminate
amount. Thereafter, the General Revenue Fund would be reduced by $5.0 million each year.
Local revenue was determined to be reduced by $4.4 million beginning in Fiscal Year 2024-
2025.
The bill takes effect on July 1, 2024, except where otherwise specified.
II. Present Situation:
The present situation is presented in Section III under the Effect of Proposed Changes.
III. Effect of Proposed Changes:
Special Assessments
Present Situation
There are 67 county governments and over 400 municipal governments. Municipalities levy and
collect special assessments to fund capital improvements and municipal services including but
not limited to: fire protection, emergency medical services, garbage disposal, sewer
improvement, street improvement, and parking facilities. Small municipalities with a population
fewer than 100 persons may use special assessments to fund special security and crime
prevention services and facilities.1
Property owned or occupied by a religious institution, a public or private elementary, middle, or
high school, or by a governmentally financed, insured, or subsidized housing facility that is used
primarily for persons who are elderly or disabled is exempt from any special assessments levied
by a municipality.2 There are over 8,500 licensed preschools in Florida.3
Effect of Proposed Changes
The bill modifies s. 170.201, F.S., to add any public or private preschool to those properties that
are exempt from special assessments levied by local governments and municipalities. The bill
defines a preschool as a licensed child care facility4 serving children under five years of age.
1
Section 170.201, F.S.
2
Section 170.201(2), F.S.
3
Department of Children and Families, Child Care Provider List, 11-1-2023, available at
https://www.myflfamilies.com/sites/default/files/2023-11/Public%20-%202023-11-1%20-%20Statewide.pdf (last visited Jan.
25, 2024).
4
See s. 402.305, F.S.
BILL: CS/CS/SB 820 Page 3
Tax Collections and Credits
Present Situation
Early Learning Tax Incentive
Beginning in 1998, a corporate income taxpayer or insurance premium taxpayer was authorized
to take a credit against their tax liability for costs associated with the establishment of a child
care facility or for costs paid toward child care on behalf of their employees. The provision
expired in 2008.5 Additionally, there is no tax credit program for any taxpayer of severance tax,
sales and use tax, corporate income tax, insurance premium tax, or alcoholic beverage tax to
receive credit for contributions made to a child care facility on behalf of employees.
Corporate Income Tax
Florida imposes a 5.5 percent tax on the taxable income of certain corporations and financial
institutions doing business in Florida.6 Corporate income tax is remitted to the Department of
Revenue (DOR) and distributed to the General Revenue Fund. Net collections of corporate
income tax in Fiscal Year 2022-2023 were $5.2 billion.7
Insurance Premium Tax
Florida imposes a 1.75 percent tax on most Florida insurance premiums.8 Insurance premium
taxes are paid by insurance companies under ch. 624, F.S., and are remitted to the DOR. These
revenues are distributed to the General Revenue Fund with additional distributions to the
Insurance Regulatory Trust Fund, the Police & Firefighters Premium Tax Trust Fund, and the
Emergency Management Preparedness & Assistance Trust Fund. Net collections of insurance
premium taxes in Fiscal Year 2023-2023 were $1.4 billion with distributions to the General
Revenue Fund of $1.05 billion.9
Severance Taxes on Oil and Gas Production
Oil and gas production severance taxes are imposed on persons who sever oil or gas in Florida
for sale, transport, storage, profit, or commercial use.10 These taxes are remitted to the DOR and
distributed to the General Revenue Fund with additional distributions to the Minerals Trust Fund
and to the counties where production occurred. Receipts from the severance taxes on oil and gas
are estimated to be $3.2 million in Fiscal Year 2022-2023 with distributions to the General
Revenue Fund of $2.0 million.11
5
Section 220.19, F.S. (2008).
6
Sections 220.11(2) and 220.63(2), F.S.
7
Office of Economic and Demographic Research, Memo, July 31, 2023, available at
http://edr.state.fl.us/Content/conferences/generalrevenue/CITNetCollections_FY2022-23.pdf (last visited Jan 25, 2024).
8
Section 624.509, F.S. (Different tax rates apply to wet marine and transportation insurance, self-insurance, and annuity
premiums.)
9
Florida Revenue Estimating Conference, 2023 Florida Tax Handbook (Oct. 2023), 117, available at
http://edr.state.fl.us/content/revenues/reports/tax-handbook/taxhandbook2023.pdf (last visited Jan. 25, 2024).
10
Sections 211.02(1) and 211.025, F.S.
11
Supra note 8 at 185.
BILL: CS/CS/SB 820 Page 4
Sales Taxes Paid by Direct Pay Permit Holders
Florida law authorizes the DOR to establish a process for the self-accrual of sales taxes due. The
process involves the DOR granting a direct pay permit to a taxpayer, who then pays the taxes
directly to the DOR.12
Alcoholic Beverage Taxes
Florida imposes excise taxes on malt beverages, wines, and other beverages.13 The taxes are due
from manufacturers, distributors and vendors of malt beverages, and from manufacturers and
distributors of wine, liquor, and other specified alcoholic beverages. Taxes are remitted to the
Division of Alcoholic Beverages and Tobacco (Division) in the Department of Business and
Professional Regulation (DBPR).
The Division is responsible for supervising the conduct, management, and operation of the
manufacturing, packaging, distribution, and sale of all alcoholic beverages in Florida.14
Distributions of the excise taxes on alcoholic beverages are made to the General Revenue Fund,
the Alcoholic Beverage and Tobacco Trust Fund, and Viticulture Trust Fund. Collections of
alcoholic beverage taxes were $317 million in Fiscal Year 2022-2023 with distributions to
General Revenue of $311 million.15
Effect of Proposed Changes
The bill creates s. 211.0254, F.S., to allow a child care tax credit granted under s. 402.261, F.S.,
to be taken against any tax due for oil and gas production under ss. 211.02 and 211.025, F.S.,
Together with a credit to scholarship funding organizations, the New Worlds Reading Initiative,
and other charitable organizations, the maximum credit which may be taken is limited to 50
percent of the tax due on the return for which the credits are taken. In addition, the provision
establishes the priority in which this credit may be taken.
The bill creates s. 212.1835, F.S., to allow a child care tax credit granted under s. 402.261, F.S.,
to be taken against any tax due from a direct pay permit holder and provides certain requirements
included filing and paying taxes electronically.
The bill modifies s. 220.19, F.S., to allow a child care tax credit granted under s. 402.261, F.S.,
to be taken against any tax due from a corporate income tax taxpayer for its taxable years
beginning on or after January 1, 2025. Further provided are requirements and limitations
regarding those tax credits. The bill removes provisions related to the carry forward of unused
credits and repayment of child care facility start-up credits, which are provided in s. 402.261,
F.S., created by the bill.
12
Section 212.183, F.S., and rule 12A-1.0911, F.A.C. Direct pay permit holders include: dealers who annually make
purchases in excess of $10 million per year in any county; dealers who annually purchase at least $100,000 of tangible
personal property, including maintenance and repairs for their own use; dealers who purchase promotional materials whose
ultimate use is unknown at purchase; eligible air carriers, vessels, railroads, and motor vehicles engaged in interstate and
foreign commerce; and dealers who lease realty from a number of independent property owners.
13
Sections 563.05, 564.06, and 565.12, F.S.
14
Section 561.02, F.S.
15
Supra note 8.
BILL: CS/CS/SB 820 Page 5
The bill creates s. 402.261, F.S., a child care tax credit for (1) 50 percent of the startup costs of
an eligible child care facility (2) operating an eligible child care facility for the taxpayer’s
employees and (3) making payments to an eligible child care facility on behalf of an employee.
A credit may be taken against tax liability due under the following taxes:
 Corporate income tax;
 Insurance premium tax;
 Severance taxes on oil and gas production;
 Alcoholic beverage tax on beer, wine, and spirits; or
 Self-accrued sales tax liability of direct pay permit holders.
A taxpayer who operates an eligible child care facility may receive a credit of 50 percent of the
startup costs of the facility for the taxable year in which the facility begins operating. The
maximum amount of credit that may be granted is based on the number of employees as follows:
 One-19 employees, the maximum credit is $1 million.
 Twenty-250 employees, the maximum credit is $500,000.
 Two hundred fifty one or more employees, the maximum credit is $250,000.
A taxpayer who operates an eligible child care facility for the taxpayer’s employees may receive
a credit of $300 per month for each eligible child enrolled in the facility. The maximum amount
of credit that may be granted is based on the number of employees as follows:
 One-19 employees, the maximum credit is $50,000.
 Twenty-250 employees, the maximum credit is $500,000.
 Two hundred fifty one or more employees, the maximum credit is $1 million.
A taxpayer who makes payment to an eligible child care facility in the name and for the benefit
of an employee of the taxpayer is allowed a credit of 100 percent of the payment up to $3,600
per child. The maximum amount of credit that may be granted is based on the number of
employees as follows:
 One-19 employees, maximum credit is $50,000.
 Twenty-250 employees, maximum credit is $500,000.
 Two hundred fifty one or more employees, maximum credit is $1 million.
The maximum annual tax credit amount that may be granted to all taxpayers is $5 million in each
state fiscal year, beginning in Fiscal Year 2024-2025.
The bill allows taxpayers to make application for the tax credits beginning October 1, 2024, and
it outlines the requirements of the application process to be developed by the Department of
Revenue (DOR), priority of applications, timelines for review of applications with notices of
approval or denial, and it provides the DOR with rulemaking authority.
The bill creates s. 561.1214, F.S., to allow a child care tax credit granted under s. 402.261, F.S,
to be taken against, any excise tax due, beginning January 1, 2025, for beer, wine, and liquor,
except for excise taxes imposed on wine produced by manufactures in the state from products
grown in the state. The credit allowed may not exceed 90 percent of the tax due on the return.
BILL: CS/CS/SB 820 Page 6
The bill modifies s. 624.5107, F.S., to allow a child care tax credit granted under s. 402.261, F.S,
to be taken against any excise tax due, for its taxable years beginning on or after January 1, 2025,
on insurance premiums under s. 624.509, F.S. and provides restrictions of the credit. The bill
removes the provision allowing the carry forward of the credit for up to five years and the
provision for repayment of a credit for child care facility startup cost if the facility does not
operate for at least five years.
The bill modifies s. 624.509, F.S., to include the child care tax credit taken under s. 624.5107,
F.S., in the list of order in which credits may be taken against the insurance premium tax.
Finally, the bill provides the DOR with authority to adopt emergency rules to implement the bill
and allows any emergency rules to be effective for six months following the adoption of the bill.
The emergency rulemaking authority may be renewed. The provision is effective upon becoming
law and expires on July 1, 2025.
Insurance
Present Situation
Homeowners' insurance is a specific type of property insurance. Homeowners' insurance covers
damage or loss by theft and against perils which can include fire, and storm damage. It also may
insure the owner for accidental injury or death for which the owner may be legally responsible.
Mortgage lenders usually require homeowners' insurance as part of the mortgage terms.16
While homeowners' insurance can specifically refer to the insurance of a house, it also
encompasses the insurance of other types of structures associated with personal residences,
including tenants (renters) and condominium unit owners.17
Florida recognizes that family day care homes fulfill a vital role in providing child care and that
residential property insurance coverage should not be canceled, denied, or fail to be renewed
solely on the basis of the family day care services at the residence. The potential liability of
residential property insurers is substantially increased by the operation of child care services on
the premises. Contractual liabilities that arise in connection with the operation of the family day
care home are excluded from residential property insurance policies unless they are specifically
included in such coverage.18
In addition to family day care services, there are also over 400 large family day care services in
Florida.19 A large family day care home is an occupied residence in which child care is regularly
provided for children from as least two unrelated families where there is payment for the care
provided and which has