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 Appropriations
BILL: CS/CS/CS/SB 1186
INTRODUCER: Appropriations Committee; Finance and Tax Committee; Community Affairs
Committee; and Senator Brandes
SUBJECT: Property Assessments for Elevated Properties
DATE: April 22, 2021 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Hackett Ryon CA Fav/CS
2. Gross Babin FT Fav/CS
3. Gross Sadberry AP Fav/CS
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/CS/CS/SB 1186 is the implementing bill for SJR 1182, which proposes an amendment to the
Florida Constitution to authorize the Legislature to prohibit an increase in the assessed value of
residential property as a result of any change or improvement made to improve the property’s
resistance to flood damage.
The bill provides that the assessed value of residential property may not increase if the property
is voluntarily elevated to meet National Flood Insurance Program and Florida Building Code
elevation requirements. Such property, at the time of elevation, may not have been deemed
uninhabitable, and it cannot be subject to any unpaid property taxes, special assessments, county
or municipal utility charges, or other government-imposed liens. Additionally, the assessment
limitation will not apply to the property if, after voluntary elevation, the property classification
changes.
The Revenue Estimating Conference has not analyzed the bill. However, the amendments
incorporated into the current version of the bill are unlikely to significantly change the impact.
The prior version of the bill was estimated to reduce local government revenues by $5.8 million
beginning in Fiscal Year 2023-2024, with a $25.1 million recurring reduction.
The bill will take effect on the effective date of the amendment proposed by SJR 1182 or a
similar joint resolution having substantially the same specific intent and purpose. If approved by
BILL: CS/CS/CS/SB 1186 Page 2
the electors, the proposed amendment (SJR 1182) and CS/CS/SB 1186 will take effect on
January 1, 2023.
II. Present Situation:
General Overview of Property Taxation
The ad valorem tax or “property tax” is an annual tax levied by counties, municipalities, school
districts, and some special districts. The tax is based on the taxable value of property as of
January 1 of each year.1 The property appraiser annually determines the “just value”2 of property
within the taxing jurisdiction and then applies relevant exclusions, assessment limitations, and
exemptions to determine the property’s “taxable value.”3 Tax bills are mailed in November of
each year based on the previous January 1 valuation and payment is due by March 31.
The Florida Constitution prohibits the state from levying ad valorem taxes on real estate or
tangible personal property,4 and it limits the Legislature’s authority to provide for property
valuations at less than just value, unless expressly authorized.5 For example, the Legislature may
prohibit from increasing the assessed value of residential property those improvements made to
enhance the property’s resistance to wind damage or installations of solar or renewable energy
source devices.6 Currently, the Legislature has implemented the assessment limitation for the
installation of renewable energy source devices.7
Changes, Additions, and Improvements to Real Property
In general, changes, additions, or improvements to real property are assessed at just value as of
the first January 1 after they are substantially completed.8 However, when property is damaged
or destroyed by calamity or misfortune, the property may be repaired or replaced without the
change, addition, or improvement being assessed at just value; rather, the change, addition, or
improvement is assigned the taxable value and other tax characteristics (i.e. assessment
limitation) that the damaged or replaced property had before being damaged or destroyed. This
treatment has certain limitations. For instance, the change, addition, or improvement may not
exceed 110 percent of the square footage of the property before it was damaged or destroyed.9
Any square footage greater than 110 percent of the replaced property is assessed at just value.
1
Both real property and tangible personal property are subject to tax. Section 192.001(12), F.S., defines “real property” as
land, buildings, fixtures, and all other improvements to land. Section 192.001(11)(d), F.S., defines “tangible personal
property” as all goods, chattels, and other articles of value capable of manual possession and whose chief value is intrinsic to
the article itself.
2
Property must be valued at “just value” for purposes of property taxation, unless the Florida Constitution provides
otherwise. FLA. CONST. art VII, s. 4. Just value has been interpreted by the courts to mean the fair market value that a willing
buyer would pay a willing seller for the property in an arm’s-length transaction. See Walter v. Shuler, 176 So. 2d 81 (Fla.
1965); Deltona Corp. v. Bailey, 336 So. 2d 1163 (Fla. 1976); Southern Bell Tel. & Tel. Co. v. Dade County, 275 So. 2d 4
(Fla. 1973).
3
See s. 192.001(2) and (16), F.S.
4
FLA. CONST. art. VII, s. 1(a).
5
See FLA. CONST. art. VII, s. 4.
6
FLA. CONST. art. VII, s. 4(i).
7
Section 193.624, F.S.
8
Sections 193.155(4)(a), 193.1554(6)(a), and 193.1555(6)(a), F.S.
9
Sections 193.155(4)(b), 193.1554(6)(b), and 193.1555(6)(b), F.S.
BILL: CS/CS/CS/SB 1186 Page 3
For residential property, the 110 percent limitation does not apply if the change, addition, or
improvement is made to property that is no larger than 1,500 square feet after it is repaired or
replaced.10
Rebuilding of damaged property must commence within 3 years of the damage (or 5 years for
damage caused by Hurricane Michael) to qualify for the assessment limitation described above.
Resistance to Flood Damage
Hurricanes and severe storms cause flooding throughout Florida and sea-level rise may increase
the potency of flood damage over time.11 As of 2019, Florida held over one-third of the flood
insurance policies issued by the National Flood Insurance Program (NFIP), a federal entity
created in 1968 to provide standardized flood insurance.12 According to the Federal Emergency
Management Agency (FEMA), 1,719,376 properties in Florida are at risk of flooding in a
100-year storm.13
Flood damage can be mitigated via multiple strategies. These might include large structural
mitigation public works projects, such as dams, seawalls, levees.14 Mitigation can also include
improvements made to individual properties, such as elevating structures, filling basements, and
waterproofing.15 They might also include non-structural mitigation as well, such as maintaining
land to allow for storm water runoff, waterproofing basements, installing check valves capable of
preventing water backup, and elevating furnaces, heaters, and electrical panels.16
Voluntary Property Elevation
Surveyors and architects use Flood Insurance Rate Maps, maps produced by FEMA which
delineate base flood elevations,17 to determine minimum building height. Buildings constructed
before a community was under elevation regulations or before FEMA produced the area’s first
flood map may now be considered below safe elevation, and at high risk for flood damage.
Buildings may be raised after construction either by lifting an existing house and constructing a
new foundation below, or by leaving the house in place and building an elevated floor within the
10
Sections 193.155(4)(b), F.S.
11
Rebecca Lindsey, Climate Change: Global Sea Level, National Oceanic and Atmospheric Administration, (Jan. 25, 2021),
available at: https://www.climate.gov/news-features/understanding-climate/climate-change-global-sea-level (last visited
April 8, 2021).
12
Facts + Statistics: Flood Insurance, Insurance Information Institute, available at: https://www.iii.org/fact-statistic/facts-
statistics-flood-insurance (last visited April 8, 2021).
13
Emily Mahoney and Zachary Sampson, Florida has thousands more properties with high flood risk than FEMA says,
according to new study, Tampa Bay Times, (Jun. 29, 2020) available at:
https://www.tampabay.com/news/environment/2020/06/29/florida-has-thousands-more-properties-with-high-flood-risk-than-
fema-says-according-to-new-study/ (last visited April 9, 2021).
14
Beverly Cigler, U.S. Floods: The Necessity of Mitigation, State and Local Government Review, Volume 49 Issue 2, (Sept.
22, 2017), available at: https://www.napawash.org/uploads/Standing_Panel_Blogs/cigler-floods-and-mitigation-Sept.-
20172.pdf (last visited April 9, 2021).
15
Id.
16
Id.
17
The “base flood elevation” is the elevation of surface water resulting from a flood that has a 1 percent chance of happening
annually. See Base Flood Elevation (BFE), FEMA, (Mar. 5, 2020), available at: https://www.fema.gov/node/404233 (last
visited April 8, 2021).
BILL: CS/CS/CS/SB 1186 Page 4
house or adding an upper story.18 When a house is lifted, its new foundation may be made of
continuous walls, or columns or pilings which would allow access to the area below the newly
elevated house.19
NFIP Elevation Certificate
An NFIP Elevation Certificate is a form produced by FEMA used to provide information which
can ensure compliance with community floodplain ordinances, determine a property’s insurance
rate, and be used as evidence to have a FEMA flood plain map altered.20 An elevation certificate
must in most cases be completed by a licensed land surveyor, engineer, architect, or designated
local official.21 The completed document includes location and elevation data from the property,
the corresponding Flood Insurance Rate Map, community information, and photographic proof
elevation certificates that are typically required when new construction or substantial
improvements occur on a property resting at least in part or below a limit set by local authorities.
Nationwide, the average cost for having an elevation certificate completed is on average $600.22
Florida Building Code Elevation Requirements
The Florida Building Code requires the construction or reconstruction of residential properties
follow specific guidelines to mitigate potential damage that might be caused by flood waters in
areas designated as “flood hazard areas” and “coastal high-hazard areas.” For example, buildings
in flood hazard areas must have their lowest floors elevated above the base flood elevation plus
one foot, or the design flood elevation, whichever is higher.23
III. Effect of Proposed Changes:
Sections 1 and 2 amend ss. 193.155 and 193.1554, F.S., respectively, to provide that the
assessed value of a residential property may not increase if the property is voluntarily elevated to
meet NFIP and Florida Building Code elevation requirements and the square footage of the
property, as improved, does not exceed 110 percent of the original square footage.
The area below an elevated structure that is created as a result of elevating the property may not
be included in the property’s 110 percent calculation when it is solely designated for parking,
storage, or access and does not exceed 110 percent of the original property’s square footage.
In addition, the assessed value may not increase if the total square footage of the property as
elevated does not exceed 1,500 square feet.
The portions of property in excess of these limits are subject to assessment at just value.
18
Chapter 5: Elevating Your House, Homeowner’s Guide to Retrofitting, FEMA, available at:
https://www.fema.gov/pdf/rebuild/mat/sec5.pdf (last visited April 8, 2021).
19
Id.
20
Elevation Certificate and Instructions, FEMA National Flood Insurance Program, available at:
https://www.pinellascounty.org/drs/PDF/FEMA_Elevation_Certificate_086-0-33.pdf (last visited April 8, 2021).
21
Id.
22
Josh Price, What Does an Elevation Certificate Cost?, MassiveCert.com, available at:
https://www.massivecert.com/blog/what-does-elevation-certificate-cost (last visited April 8, 2021).
23
International Code Council, Inc., 2020 Florida Building Code, Residential, 7th Edition, (July 2020), Section 322.2.1,
available at: https://floridabuilding.org/bc/bc_default.aspx (last visited April 8, 2021).
BILL: CS/CS/CS/SB 1186 Page 5
To qualify for this assessment limitation, the owner must provide the property appraiser with
elevation certificates for both the original and elevated property.
In addition, the property may not have been deemed uninhabitable, and it may not be subject to
unpaid property tax assessments, special assessments, county or municipal utility charges, or
other government-imposed liens at the time of elevation.
The assessment limitation will not apply to the property if, after voluntary elevation, the property
classification changes. For example, a classification change from single family residential to
multifamily residential.
The bill defines “voluntary elevation” to mean the elevation of an existing nonconforming
property or the removal and rebuilding of a nonconforming property.
Section 3 provides that the bill takes effect on the effective date of SJR 1182 or a similar joint
resolution having substantially the same specific intent and purpose, if such amendment to the
Florida Constitution is approved at the general election24 held in November 2022, or at an earlier
special election specifically authorized by law for that purpose.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
Article VII, s. 18(b) of the Florida Constitution provides that, except upon the approval of
each house of the Legislature by a two-thirds vote of the membership, the Legislature
may not enact, amend, or repeal any general law if the anticipated effect of doing so
would be to reduce the authority that municipalities or counties have to raise revenue in
the aggregate, as such authority existed on February 1, 1989. However, the mandates
requirements do not apply to laws having an insignificant impact,25, 26 which for Fiscal
Year 2021-2022 is forecast at approximately $2.2 million.27
Staff estimates that the bill will reduce local government revenues by an amount in
excess of $2.2 million beginning in Fiscal Year 2023-2024. Therefore, this bill may be a
mandate subject to the requirements of Art. VII, s. 18(b) of the Florida Constitution. See
Section V. Fiscal Impact Statement.
24
Section 97.021(16), F.S., defines “general election” as an election held on the first Tuesday after the first Monday in
November in the even-numbered years, for the purpose of filling national, state, county, and district offices and for voting on
constitutional amendments not otherwise provided for by law.
25
FLA. CONST. art. VII, s. 18(d).
26
An insignificant fiscal impact is the amount not greater than the average statewide population for the applicable fiscal year
multiplied by $0.10. See Florida Senate Committee on Community Affairs, Interim Report 2012-115: Insignificant Impact,
(September 2011), available at: http://www.flsenate.gov/PublishedContent/Session/2012/InterimReports/2012-115ca.pdf
(last visited Feb. 03, 2021).
27
Based on the Demographic Estimating Conference’s April 1, 2021, estimated population adopted on Nov. 13, 2020. The
conference packet is available at http://edr.state.fl.us/Content/conferences/population/ConferenceResults.pdf (last visited
Feb. 03, 2021).
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B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
D. State Tax or Fee Increases:
This bill does not create or raise state taxes or fees. Therefore, the requirements of
Art. VII, s. 19 of the Florida Constitution do not apply.
E. Other Constitutional Issues:
None identified.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
The Revenue Estimating Conference has not analyzed the bill. However, the