Tax Incentive Evaluation Law: Florida

Fact Sheet January 21, 2015 Read time:

Projects: Economic Development

This page is no longer being updated. As of June 15, 2017, newer tax incentive evaluation fact sheets are available here.

To ensure that economic development tax incentives are achieving their goals effectively, many states have approved laws requiring regular, rigorous, independent evaluations of these programs. For a list of states that have passed evaluation laws since the start of 2012, click here.

Florida

H.B. 7007, enacted May 17, 2013

What it does

Requires evaluation of all major tax incentives
Economic development incentive programs are reviewed on a three-year cycle. Two legislative offices, one with expertise at program evaluation and one with expertise measuring economic results, conduct evaluations.
Ensures that agencies share relevant information
State agencies are instructed to provide data as needed to legislative staff members who evaluate programs. When provided with tax data, legislative staff must follow existing confidentiality requirements.

Requires evaluation of all major tax incentives

Economic development incentive programs are reviewed on a three-year cycle.

Two legislative offices, one with expertise at program evaluation and one with expertise measuring economic results, conduct evaluations.

Ensures that agencies share relevant information

State agencies are instructed to provide data as needed to legislative staff members who evaluate programs.

When provided with tax data, legislative staff must follow existing confidentiality requirements.

Excerpt from Florida’s law: Two legislative offices share analysis responsibilities

(3) Pursuant to the schedule established in subsection (2), the Office of Economic and Demographic Research shall evaluate and determine the economic benefits, as defined in s. 288.005, [Florida Statutes,] of each program over the previous 3 years. The analysis must also evaluate the number of jobs created, the increase or decrease in personal income, and the impact on state gross domestic product from the direct, indirect, and induced effects of the state's investment in each program over the previous 3 years.

(a) For the purpose of evaluating tax credits, tax refunds, sales tax exemptions, cash grants, and similar programs, the Office of Economic and Demographic Research shall evaluate data only from those projects in which businesses received state funds during the evaluation period. Such projects may be fully completed, partially completed with future fund disbursal possible pending performance measures, or partially completed with no future fund disbursal possible as a result of a business's inability to meet performance measures.

(b) The analysis must use the model developed by the Office of Economic and Demographic Research, as required in s. 216.138, [Florida Statutes,] to evaluate each program. The office shall provide a written explanation of the key assumptions of the model and how it is used. If the office finds that another evaluation model is more appropriate to evaluate a program, it may use another model, but it must provide an explanation as to why the selected model was more appropriate.

(4) Pursuant to the schedule established in subsection (2), [the Office of Program Policy Analysis and Government Accountability] shall evaluate each program over the previous 3 years for its effectiveness and value to the taxpayers of this state and include recommendations on each program for consideration by the Legislature. The analysis may include relevant economic development reports or analyses prepared by the Department of Economic Opportunity, Enterprise Florida, Inc., or local or regional economic development organizations; interviews with the parties involved; or any other relevant data.

(5) The Office of Economic and Demographic Research and OPPAGA must be given access to all data necessary to complete the Economic Development Programs Evaluation, including any confidential data. The offices may collaborate on data collection and analysis.