Businesses hoping the state will continue to pay for certain damages sustained on projects contracted with state agencies might need to temper their expectations.
The Senate Policy Steering Committee on Ways and Means voted unanimously Thursday to absolve the state of paying certain early-termination and liquidated-damage fees on contracted projects, and cap state leases of personal property at $500,000.
The bill, which also passed its last committee unanimously, is now headed to the floor.
Bill sponsor Sen. J.D. Alexander, R-Lake Wales, says the measure will eliminate an overabundance of contract projects and ease the demand on the state budget.
Barney Bishop, president and CEO of Associated Industries of Florida, claims the legislation is too prohibitive.
Our issue is, this will be literally thousands of state contracts, Bishop told Alexander.
Thousands of contracts for millions of dollars of debt, retorted Alexander in a heated debate with the head of one of the states major business lobbying groups.
Alexander, chairman of the committee, said SB 1706 will eliminate needless or risky projects.
The bill exempts the state from paying liquidated damages, which encompasses damages to a person or a persons rights or property, on agency-contracted projects, with exceptions for a few programs.
It absolves the state of paying early-termination fees for breached contracts with agencies and contracts for which the state cannot pay the full amount in a fiscal year.
The bill also exempts the state from assuming responsibility for interest payments that an agency cant afford to make.
In addition, the bill caps state leases of private property at $500,000 and limits agencies to renewable yearly leases. It also requires agencies to notify the Legislature or governor of any contract costing more than $10 million.
Neither Alexander nor Bishop could quantify exactly how many contracts or businesses would be affected if the bill passes. But both agreed it was a massive amount.
Bishop has been lobbying Alexander to change the bill at every stage of the process, but he has only been successful at convincing him to adopt one of several amendments.
Bishop said he recognizes the need to regulate and restrict high-cost projects, but the changes Alexander is proposing will result in more work for regulators and fewer opportunities for businesses to contract with the state.
The draconian message that youre sending here isnt going to get you to the promised land, he told Alexander.
The $500,000 lease cap is too low, Bishop told Alexander. He has proposed several times that Alexander raise the lease cap to $2 million.
Theres going to be less incentive to do business, Bishop said.
