The Florida Senate

288.1089  Innovation Incentive Program.--

(1)  The Innovation Incentive Program is created within the Office of Tourism, Trade, and Economic Development to ensure that sufficient resources are available to allow the state to respond expeditiously to extraordinary economic opportunities and to compete effectively for high-value research and development and innovation business projects.

(2)  As used in this section, the term:

(a)  "Average private sector wage" means the statewide average wage in the private sector or the average of all private sector wages in the county or in the standard metropolitan area in which the project is located as determined by the Agency for Workforce Innovation.

(b)  "Brownfield area" means an area designated as a brownfield area pursuant to s. 376.80

(c)  "Cumulative investment" means cumulative capital investment and all eligible capital costs, as defined in s. 220.191

(d)  "Director" means the director of the Office of Tourism, Trade, and Economic Development.

(e)  "Enterprise zone" means an area designated as an enterprise zone pursuant to s. 290.0065

(f)  "Fiscal year" means the state fiscal year.

(g)  "Innovation business" means a business expanding or locating in this state that is likely to serve as a catalyst for the growth of an existing or emerging technology cluster or will significantly impact the regional economy in which it is to expand or locate.

(h)  "Jobs" means full-time equivalent positions, as that term is consistent with terms used by the Agency for Workforce Innovation and the United States Department of Labor for purposes of unemployment compensation tax administration and employment estimation, resulting directly from a project in this state. The term does not include temporary construction jobs.

(i)  "Match" means funding from local sources, public or private, which will be paid to the applicant and which is equal to 100 percent of an award. Eligible match funding may include any tax abatement granted to the applicant under s. 196.1995 or the appraised market value of land, buildings, infrastructure, or equipment conveyed or provided at a discount to the applicant. Complete documentation of a match payment or other conveyance must be presented to and verified by the office prior to transfer of state funds to an applicant. An applicant may not provide, directly or indirectly, more than 5 percent of match funding in any fiscal year. The sources of such funding may not include, directly or indirectly, state funds appropriated from the General Revenue Fund or any state trust fund, excluding tax revenues shared with local governments pursuant to law.

(j)  "Office" means the Office of Tourism, Trade, and Economic Development.

(k)  "Project" means the location to or expansion in this state by an innovation business or research and development applicant approved for an award pursuant to this section.

(l)  "Research and development" means basic and applied research in the sciences or engineering, as well as the design, development, and testing of prototypes or processes of new or improved products. Research and development does not include market research, routine consumer product testing, sales research, research in the social sciences or psychology, nontechnological activities, or technical services.

(m)  "Research and development facility" means a facility that is predominately engaged in research and development activities. For purposes of this paragraph, the term "predominantly" means at least 51 percent of the time.

(n)  "Rural area" means a rural city, rural community, or rural county as defined in s. 288.106

(3)  To be eligible for consideration for an innovation incentive award, an innovation business or research and development entity must submit a written application to Enterprise Florida, Inc., before making a decision to locate new operations in this state or expand an existing operation in this state. The application must include, but not be limited to:

(a)  The applicant's federal employer identification number, unemployment account number, and state sales tax registration number. If such numbers are not available at the time of application, they must be submitted to the office in writing prior to the disbursement of any payments under this section.

(b)  The location in this state at which the project is located or is to be located.

(c)  A description of the type of business activity, product, or research and development undertaken by the applicant, including six-digit North American Industry Classification System codes for all activities included in the project.

(d)  The applicant's projected investment in the project.

(e)  The total investment, from all sources, in the project.

(f)  The number of net new full-time equivalent jobs in this state the applicant anticipates having created as of December 31 of each year in the project and the average annual wage of such jobs.

(g)  The total number of full-time equivalent employees currently employed by the applicant in this state, if applicable.

(h)  The anticipated commencement date of the project.

(i)  A detailed explanation of why the innovation incentive is needed to induce the applicant to expand or locate in the state and whether an award would cause the applicant to locate or expand in this state.

(j)  If applicable, an estimate of the proportion of the revenues resulting from the project that will be generated outside this state.

(4)  To qualify for review by the office, the applicant must, at a minimum, establish the following to the satisfaction of Enterprise Florida, Inc., and the office:

(a)  The jobs created by the project must pay an estimated annual average wage equaling at least 130 percent of the average private sector wage. The office may waive this average wage requirement at the request of Enterprise Florida, Inc., for a project located in a rural area, a brownfield area, or an enterprise zone, when the merits of the individual project or the specific circumstances in the community in relationship to the project warrant such action. A recommendation for waiver by Enterprise Florida, Inc., must include a specific justification for the waiver and be transmitted to the office in writing. If the director elects to waive the wage requirement, the waiver must be stated in writing and the reasons for granting the waiver must be explained.

(b)  A research and development project must:

1.  Serve as a catalyst for an emerging or evolving technology cluster.

2.  Demonstrate a plan for significant higher education collaboration.

3.  Provide the state, at a minimum, a break-even return on investment within a 20-year period.

4.  Be provided with a one-to-one match from the local community. The match requirement may be reduced or waived in rural areas of critical economic concern or reduced in rural areas, brownfield areas, and enterprise zones.

(c)  An innovation business project in this state, other than a research and development project, must:

1.a.  Result in the creation of at least 1,000 direct, new jobs at the business; or

b.  Result in the creation of at least 500 direct, new jobs if the project is located in a rural area, a brownfield area, or an enterprise zone.

2.  Have an activity or product that is within an industry that is designated as a target industry business under s. 288.106 or a designated sector under s. 288.108

3.a.  Have a cumulative investment of at least $500 million within a 5-year period; or

b.  Have a cumulative investment that exceeds $250 million within a 10-year period if the project is located in a rural area, brownfield area, or an enterprise zone.

4.  Be provided with a one-to-one match from the local community. The match requirement may be reduced or waived in rural areas of critical economic concern or reduced in rural areas, brownfield areas, and enterprise zones.

(5)  Enterprise Florida, Inc., shall evaluate proposals for innovation incentive awards and transmit recommendations for awards to the office. Such evaluation and recommendation must include, but need not be limited to:

(a)  A description of the project, its required facilities, and the associated product, service, or research and development associated with the project.

(b)  The percentage of match provided for the project.

(c)  The number of full-time equivalent jobs that will be created by the project, the total estimated average annual wages of such jobs, and the types of business activities and jobs likely to be stimulated by the project.

(d)  The cumulative investment to be dedicated to the project within 5 years and the total investment expected in the project if more than 5 years.

(e)  The projected economic and fiscal impacts on the local and state economies relative to investment.

(f)  A statement of any special impacts the project is expected to stimulate in a particular business sector in the state or regional economy or in the state's universities and community colleges.

(g)  A statement of any anticipated or proposed relationships with state universities.

(h)  A statement of the role the incentive is expected to play in the decision of the applicant to locate or expand in this state.

(i)  A recommendation and explanation of the amount of the award needed to cause the applicant to expand or locate in this state.

(j)  A discussion of the efforts and commitments made by the local community in which the project is to be located to induce the applicant's location or expansion, taking into consideration local resources and abilities.

(k)  A recommendation for specific performance criteria the applicant would be expected to achieve in order to receive payments from the fund and penalties or sanctions for failure to meet or maintain performance conditions.

(l)  For a research and development facility project:

1.  A description of the extent to which the project has the potential to serve as catalyst for an emerging or evolving cluster.

2.  A description of the extent to which the project has or could have a long-term collaborative research and development relationship with one or more universities or community colleges in this state.

3.  A description of the existing or projected impact of the project on established clusters or targeted industry sectors.

4.  A description of the project's contribution to the diversity and resiliency of the innovation economy of this state.

5.  A description of the project's impact on special needs communities, including, but not limited to, rural areas, distressed urban areas, and enterprise zones.

(6)  In consultation with Enterprise Florida, Inc., the office may negotiate the proposed amount of an award for any applicant meeting the requirements of this section. In negotiating such award, the office shall consider the amount of the incentive needed to cause the applicant to locate or expand in this state in conjunction with other relevant applicant impact and cost information and analysis as described in this section. Particular emphasis shall be given to the potential for the project to stimulate additional private investment and high-quality employment opportunities in the area.

(7)  Upon receipt of the evaluation and recommendation from Enterprise Florida, Inc., the director shall recommend to the Governor the approval or disapproval of an award. In recommending approval of an award, the director shall include proposed performance conditions that the applicant must meet in order to obtain incentive funds and any other conditions that must be met before the receipt of any incentive funds. The Governor shall consult with the President of the Senate and the Speaker of the House of Representatives before giving approval for an award. Upon approval of an award, the Executive Office of the Governor shall release the funds pursuant to the legislative consultation and review requirements set forth in s. 216.177

(8)  Upon approval by the Governor and release of the funds as set forth in subsection (7), the director shall issue a letter certifying the applicant as qualified for an award. The office and the applicant shall enter into an agreement that sets forth the conditions for payment of incentives. The agreement must include the total amount of funds awarded; the performance conditions that must be met to obtain the award or portions of the award, including, but not limited to, net new employment in the state, average wage, and total cumulative investment; demonstration of a baseline of current service and a measure of enhanced capability; the methodology for validating performance; the schedule of payments; and sanctions for failure to meet performance conditions, including any clawback provisions.

(9)  Enterprise Florida, Inc., shall assist the office in validating the performance of an innovation business or research and development facility that has received an award. At the conclusion of the innovation incentive award agreement, or its earlier termination, Enterprise Florida, Inc., shall, within 90 days, report the results of the innovation incentive award to the Governor, the President of the Senate, and the Speaker of the House of Representatives.

(10)  Enterprise Florida, Inc., shall develop business ethics standards based on appropriate best industry practices which shall be applicable to all award recipients. The standards shall address ethical duties of business enterprises, fiduciary responsibilities of management, and compliance with the laws of this state. Enterprise Florida, Inc., may collaborate with the State University System in reviewing and evaluating appropriate business ethics standards. Such standards shall be provided to the Governor, the President of the Senate, and the Speaker of the House of Representatives by December 31, 2006. An award agreement entered into on or after December 31, 2006, shall require a recipient to comply with the business ethics standards developed pursuant to this section.

History.--s. 3, ch. 2006-55.