Senate Bill sb2110c1
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    Florida Senate - 2006                           CS for SB 2110
    By the Committee on Commerce and Consumer Services; and
    Senator Saunders
    577-2059-06
  1                      A bill to be entitled
  2         An act relating to entertainment industry
  3         economic development; amending s. 212.08, F.S.;
  4         authorizing the use of certain entertainment
  5         industry tax credits as a refund against sales
  6         and use tax liability under certain
  7         circumstances; providing requirements,
  8         procedures, and limitations; authorizing the
  9         Department of Revenue to adopt rules; amending
10         s. 220.02, F.S.; revising the order of priority
11         list of applicable credits against certain
12         taxes; transferring, renumbering, and amending
13         s. 288.1254, F.S.; revising the entertainment
14         industry financial incentive program to provide
15         corporate income tax credits to qualified
16         entertainment entities rather than
17         reimbursements from appropriations; revising
18         provisions relating to definitions, creation
19         and scope, application procedures, approval
20         process, eligibility, required documents,
21         qualified productions, and annual reports;
22         providing criteria and limitations for awards
23         of tax credits; providing marketing
24         requirements; requiring the Office of Tourism,
25         Trade, and Economic Development and Department
26         of Revenue to adopt rules; providing liability
27         for reimbursement of certain costs and fees
28         associated with fraudulent applications;
29         providing for future repeal; amending s.
30         477.0135, F.S.; correcting a cross-reference;
31         providing an effective date.
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    Florida Senate - 2006                           CS for SB 2110
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 1  Be It Enacted by the Legislature of the State of Florida:
 2  
 3         Section 1.  Paragraph (r) is added to subsection (5) of
 4  section 212.08, Florida Statutes, to read:
 5         212.08  Sales, rental, use, consumption, distribution,
 6  and storage tax; specified exemptions.--The sale at retail,
 7  the rental, the use, the consumption, the distribution, and
 8  the storage to be used or consumed in this state of the
 9  following are hereby specifically exempt from the tax imposed
10  by this chapter.
11         (5)  EXEMPTIONS; ACCOUNT OF USE.--
12         (r)  Entertainment industry tax credits; authorization;
13  eligibility for credits.--Beginning July 1, 2006, any company
14  engaged in producing filmed entertainment in this state that
15  has registered with the department under this chapter to
16  collect or remit sales or use tax and has satisfied the
17  requirements enumerated in and has received credits under s.
18  220.192 may use the award of credits against the tax imposed
19  by this chapter as provided by this section.
20         1.  The credit shall be granted as a refund against
21  state sales and use taxes reported on returns and remitted in
22  the 12 months preceding the date of application to the
23  department for the credit.
24         2.  A company may not be awarded more than $2 million
25  in tax credits under this paragraph and s. 220.192, unless the
26  production is a high-impact television series as defined in s.
27  220.192(2)(b), in which case the production shall be eligible
28  for a maximum tax credit award of $3 million.
29         3.  The total amount of tax credits which may be
30  granted for all programs approved under this paragraph and s.
31  220.192 is $25 million in any state fiscal year.
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 1         4.  A company may use the tax credit against the tax
 2  liability imposed under this chapter, in whole or in part, and
 3  against the liability imposed under chapter 220, so long as
 4  the credit is actually applied only once.
 5         5.  The department may adopt rules pursuant to ss.
 6  120.536(1) and 120.54 to administer this paragraph, as
 7  provided by s. 220.192(6)(b).
 8         Section 2.  Subsection (8) of section 220.02, Florida
 9  Statutes, is amended to read:
10         220.02  Legislative intent.--
11         (8)  It is the intent of the Legislature that credits
12  against either the corporate income tax or the franchise tax
13  be applied in the following order: those enumerated in s.
14  631.828, those enumerated in s. 220.191, those enumerated in
15  s. 220.181, those enumerated in s. 220.183, those enumerated
16  in s. 220.182, those enumerated in s. 220.1895, those
17  enumerated in s. 221.02, those enumerated in s. 220.184, those
18  enumerated in s. 220.186, those enumerated in s. 220.1845,
19  those enumerated in s. 220.19, those enumerated in s. 220.185,
20  and those enumerated in s. 220.187, and those enumerated in s.
21  220.192.
22         Section 3.  Section 288.1254, Florida Statutes, is
23  transferred and renumbered as section 220.192, Florida
24  Statutes, and amended to read:
25         220.192 288.1254  Entertainment industry financial
26  incentive program; creation; purpose; definitions; application
27  procedure; approval process; reimbursement eligibility;
28  submission of required documentation; recommendations for
29  credit award payment; policies and procedures; fraudulent
30  claims.--
31  
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 1         (1)  CREATION AND PURPOSE OF PROGRAM.--Subject to
 2  specific appropriation, There is created within the Office of
 3  Film and Entertainment an entertainment industry financial
 4  incentive program. The purpose of this program is to encourage
 5  the use of this state as a site for filming and developing and
 6  sustaining the workforce and infrastructure providing
 7  production services for filmed entertainment.
 8         (2)  DEFINITIONS.--As used in this section, the term:
 9         (a)  "Filmed entertainment" means a theatrical or
10  direct-to-video motion picture, a made-for-television motion
11  picture teleproduction, a commercial, a music video, an
12  industrial or educational film, a promotional video or film, a
13  documentary film, a television pilot, a presentation for a
14  television pilot, a television special, a television series,
15  including, but not limited to, a drama, a reality, a comedy, a
16  soap opera, a telenovela, a game show, and a miniseries
17  production, or a digital-media-effects production by the
18  entertainment industry to be sold or displayed in an
19  electronic medium, excluding news shows and sporting events.
20  As used in this paragraph, the term "motion picture" means a
21  motion picture made on or by film, tape, or otherwise and
22  produced by means of a motion picture camera, electronic
23  camera or device, tape device, any combination of the
24  foregoing, or any other means, method, or device now used or
25  which may hereafter be adopted. As used in this paragraph, the
26  term "digital-media-effects" means visual elements created
27  through the modification of already existing or newly created
28  visual elements for film, video, or animated media through the
29  use of digital 2D/3D animation or painting, motion capture, or
30  compositing technologies. For purposes of this section, the
31  
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 1  term "filmed entertainment" does not include the electronic
 2  gaming industry or sporting events.
 3         (b)  "High-impact television series" means a production
 4  created to run multiple production seasons with an estimated
 5  order of at least seven episodes per season and qualified
 6  expenditures of at least $625,000 per episode.
 7         (c)(b)  "Production costs" means the costs of real,
 8  tangible, and intangible property used and services performed
 9  primarily or customarily in the production, including
10  preproduction and postproduction, of qualified filmed
11  entertainment. Production costs generally include, but are not
12  limited to:
13         1.  Wages, salaries, or other compensation, including
14  amounts paid through payroll service companies, for technical
15  and production crews, directors, producers, and performers who
16  are residents of this state.
17         2.  Expenditures for sound stages, backlots, production
18  editing, digital effects, sound recordings, sets, and set
19  construction.
20         3.  Expenditures for rental equipment, including, but
21  not limited to, cameras and grip or electrical equipment.
22         4.  Expenditures for meals, travel, and accommodations,
23  and goods used in producing filmed entertainment that is
24  located and doing business in this state.
25         5.  Expenditures for goods and services used in
26  producing filmed entertainment.
27         (d)(c)  "Qualified expenditures" means production costs
28  incurred in this state within the current state fiscal year
29  for goods purchased or leased from or services provided by
30  purchased, leased, or employed from a resident of this state
31  or a vendor or supplier who is located and doing business in
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 1  this state, or payments to residents of this state in the form
 2  of salary, wages, or other compensation but excluding wages,
 3  salaries, and or other compensation paid to the two
 4  highest-paid residents of this state employees.
 5         (e)(d)  "Qualified production" means filmed
 6  entertainment that meets or exceeds minimum qualified makes
 7  expenditures required in this state for the total or partial
 8  production of filmed entertainment. Productions that are
 9  deemed by the Office of Film and Entertainment to contain
10  obscene content, as defined by the United States Supreme
11  Court, are not qualified productions. Also, a production is
12  not a qualified production if it is determined that the first
13  day of principal photography in this state occurred on or
14  before the date of submitting its application to the Office of
15  Film and Entertainment or prior to certification by the Office
16  of Tourism, Trade, and Economic Development.
17         (f)(e)  "Qualified production company relocation
18  project" means a corporation, limited liability company,
19  partnership, corporate headquarters, or other legal private
20  entity engaged in the production of filmed entertainment that
21  is domiciled in another state or country and relocates its
22  operations to this state, is organized under the laws of this
23  or any other state or country, and includes as one of its
24  primary purposes digital-media-effects or motion picture and
25  television production, or postproduction.
26         (3)  APPLICATION PROCEDURE; APPROVAL PROCESS.--
27         (a)  Any company engaged in this state in producing
28  filmed entertainment may submit an application to the Office
29  of Film and Entertainment for the purpose of determining
30  qualification for an award of credits against the tax imposed
31  by this chapter as receipt of reimbursement provided in this
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 1  section. The office must be provided information required to
 2  determine if the production is a qualified production and to
 3  determine the qualified expenditures, production costs, and
 4  other information necessary for the office to determine both
 5  eligibility for the tax credit and level of reimbursement.
 6         (b)  A digital-media-effects company in the state which
 7  furnishes digital material to filmed entertainment may submit
 8  an application to the Office of Film and Entertainment for the
 9  purpose of determining qualification for receipt of
10  reimbursement authorized by this section. The office must be
11  provided information required to determine if the company is
12  qualified and to determine the amount of reimbursement.
13         (c)  Any corporation, limited liability company,
14  partnership, corporate headquarters, or other private entity
15  domiciled in another state which includes as one of its
16  primary purposes digital-media-effects or motion picture and
17  television production and which is considering relocation to
18  this state may submit an application to the Office of Film and
19  Entertainment for the purpose of determining qualification for
20  reimbursement under this section.
21         (d)1.  The Office of Film and Entertainment shall
22  establish a process by which an application is accepted and
23  reviewed and reimbursement eligibility and reimbursement
24  amount are determined. The Office of Film and Entertainment
25  may request assistance from a duly appointed local film
26  commission in determining qualifications for reimbursement and
27  compliance.
28         1.2.  The Office of Film and Entertainment shall
29  develop a standardized application form for use in qualifying
30  an applicant as approving a qualified production, a qualified
31  relocation project, or a company qualifying under paragraph
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 1  (a), paragraph (b), or paragraph (c). The application form for
 2  qualifying an applicant as a qualified production must
 3  include, but need not be limited to, production-related
 4  information on employment, proposed total production budgets,
 5  planned expenditures in this state which are intended for use
 6  exclusively as an integral part of preproduction, production,
 7  or postproduction activities engaged primarily in this state,
 8  and a signed affirmation from the applicant Office of Film and
 9  Entertainment that the information on the application form has
10  been verified and is correct. The application form shall be
11  distributed to applicants by the Office of Film and
12  Entertainment or local film commissions.
13         2.3.  Within 10 business days after receipt of an
14  application, the Office of Film and Entertainment shall review
15  the application to determine if the application contains all
16  the information required by this subsection and meets the
17  criteria set out in this section. The office shall qualify all
18  applications that contain the information and meet the
19  criteria set out in this section as eligible to receive a tax
20  credit or shall notify the applicant that the requirements for
21  qualification have not been met. If the application is
22  qualified, the office shall recommend to the Office of
23  Tourism, Trade, and Economic Development approval of the
24  maximum amount of the tax credit to be awarded. The Office of
25  Film and Entertainment must complete its review of each
26  application within 5 days after receipt of the completed
27  application, including all required information, and it must
28  notify the applicant of its determination within 10 business
29  days after receipt of the completed application and required
30  information.
31  
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 1         3.4.  Within 10 business days after receiving notice
 2  from the Office of Film and Entertainment of qualification of
 3  an applicant as a qualified production and a recommended
 4  approval of the maximum amount of tax credit to be awarded,
 5  the Office of Tourism, Trade, and Economic Development shall
 6  certify the maximum tax credit award, if any. The
 7  certification shall be transmitted to the applicant and to the
 8  executive director of the Department of Revenue. The applicant
 9  shall be responsible for forwarding a certified application to
10  the Department of Revenue. Upon determination that all
11  criteria are met for qualification for reimbursement, The
12  Office of Film and Entertainment shall notify the applicant of
13  such approval. the office shall also notify the Office of
14  Tourism, Trade, and Economic Development of the applicant
15  approval and amount of reimbursement required. The Office of
16  Tourism, Trade, and Economic Development shall make final
17  determination for actual reimbursement.
18         4.5.  The Office of Film and Entertainment shall deny
19  an application if it determines that:
20         a.  The application is not complete or does not meet
21  the requirements of this section; or
22         b.  The tax credit amount reimbursement sought does not
23  meet the requirements of this section for such reimbursement.
24         (4)  CREDIT REIMBURSEMENT ELIGIBILITY; SUBMISSION OF
25  REQUIRED DOCUMENTATION; APPLICATION RECOMMENDATIONS FOR
26  TRANSFER PAYMENT.--
27         (a)  Tax credit award.--A production of filmed
28  entertainment that is qualified by the Office of Film and
29  Entertainment and is certified by the Office of Tourism,
30  Trade, and Economic Development is eligible for a tax credit
31  for reimbursement of up to 15 percent of its qualified
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 1  qualifying expenditures in this state on a filmed
 2  entertainment program that demonstrates a minimum of $850,000
 3  in total qualified expenditures for the entire run of the
 4  project, versus the budget on a single episode, within the
 5  fiscal year from July 1 to June 30. However, the maximum
 6  reimbursement that may be made with respect to any filmed
 7  entertainment program is $2 million. All reimbursements under
 8  this section are subject to appropriation.
 9         (b)  Production spanning 2 state fiscal years.--A
10  qualified production that starts in one state fiscal year and
11  finishes in the next state fiscal year shall have all
12  qualified expenditures from both state fiscal years certified
13  for the latter state fiscal year. This requirement does not
14  apply to the commercials and music video queue described in
15  subparagraph (d)3.
16         (c)  Aggregate tax credit available.--The aggregate
17  amount of tax credits allowed under this section in any state
18  fiscal year is $25 million. If the total amount of allocated
19  tax credits applied for in any state fiscal year exceeds the
20  aggregate amount of tax credits authorized annually under this
21  section, such excess shall be treated as having been applied
22  for on the first day of the next state fiscal year in which
23  tax credits remain available for allocation. However, no more
24  than an aggregate amount of $100 million in tax credits shall
25  be allocated in state fiscal year 2006-2007, aggregate
26  allocations in state fiscal year 2007-2008 may not exceed $133
27  million, aggregate allocations in state fiscal year 2008-2009
28  may not exceed $166 million, and aggregate allocations in
29  state fiscal years 2009-2010 and thereafter may not exceed
30  $200 million. At such time as $200 million of tax credits have
31  been allocated, no additional tax credits shall be allocated.
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 1         (d)  Filmed entertainment queues.--Tax credits awarded
 2  Payments under this section in a state fiscal year shall be
 3  made to qualified productions according to a production's
 4  principal photography start date, for those qualified
 5  productions having entered into the first queue as cited in
 6  subparagraph 1. or the second queue cited in subparagraph 2.
 7  within the first 2 weeks after the queue's opening. All other
 8  qualified productions entering into either queue after the
 9  initial 2-week openings shall be on a first-come, first-served
10  basis until the appropriation for that fiscal year is
11  exhausted. On February 1 of each year, the remaining funds
12  within both queues shall be combined into a single queue and
13  distributed based on a project's principal photography start
14  date. The eligibility of qualified productions may not carry
15  over from year to year, but such productions may reapply for
16  eligibility under the guidelines established for doing so. The
17  Office of Film and Entertainment shall develop a procedure to
18  ensure that qualified productions continue on a reasonable
19  schedule until completion. If a qualified production is not
20  continued according to a reasonable schedule, the office shall
21  withdraw its eligibility and reallocate the funds to the next
22  qualified productions already in the queue that have yet to
23  receive their full maximum or 15-percent financial
24  reimbursement, if they have not started principal photography
25  by the time the funds become available.
26         1.  Film, television, and episodic queue.--Theatrical
27  or direct-to-video motion pictures, made-for-television
28  movies, commercials, music videos, industrial and educational
29  films, promotional videos or films, documentary films,
30  television specials, television series, including, but not
31  limited to, miniseries and telenovelas, and
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 1  digital-media-effects productions by the entertainment
 2  industry to be sold or displayed in an electronic medium that
 3  demonstrate a minimum of $625,000 in total qualified
 4  expenditures for the entire run of the project, which, for a
 5  television series, means a season even if the season is not
 6  completed in the same state fiscal year in which principal
 7  photography began, shall have their own separate queue
 8  established, and such queue shall have dedicated to it 60
 9  percent of all available tax credits in any state fiscal year
10  for which this section applies of the state incentive money.
11  The maximum tax credit award that may be made from this queue
12  for any single production is $2 million, unless the production
13  is a high-impact television series, in which case the
14  production shall be eligible for a maximum tax credit award of
15  $3 million, provided such production meets the other criteria
16  of this section. On March 1 of each year, the remaining tax
17  credits within this queue shall be merged into a general queue
18  and may be used for other purposes of this section as
19  determined by the Office of Film and Entertainment. A
20  television series, including, but not limited to, a qualified
21  high-impact television series, is not eligible for a tax
22  credit award under this section after its fifth production
23  season. A qualified high-impact television series shall be
24  allowed first position in this queue for its first five
25  production seasons in this state if the application is
26  received by the Office of Film and Entertainment within the
27  first 2 weeks after the queue's opening. A qualified
28  high-impact television series must file an application for
29  each state fiscal year in which it is eligible to receive the
30  credit, unless otherwise provided in this section.
31  
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 1         2.  Television pilot queue.--Television pilots and,
 2   presentations for television pilots for television series
 3  intended to be shot in this state and, or television series,
 4  including, but not limited to, drama, reality, comedy, soap
 5  opera, telenovela, game show, or miniseries productions, by
 6  the entertainment industry to be sold or displayed in an
 7  electronic medium that demonstrate a minimum of $625,000 in
 8  total qualified expenditures for the pilot episode or
 9  presentation shall have their own separate queue established,
10  and such queue shall have dedicated to it 20 40 percent of all
11  available tax credits in any given state fiscal year for which
12  this section applies of the state incentive money. The maximum
13  tax credit award that may be made from this queue for any
14  single project is $2 million. On March 1 of each year, the
15  remaining tax credits within this queue shall be merged into a
16  general queue and may be used for other purposes of this
17  section as determined by the Office of Film and Entertainment.
18         3.  Commercials and music video queue.--Commercials and
19  music videos by the entertainment industry to be sold or
20  displayed in an electronic medium that demonstrate a minimum
21  of $500,000 in combined total qualified expenditures from a
22  production company during the state fiscal year with a minimum
23  of $75,000 in qualified expenditures for each production shall
24  have their own separate queue established. Such queue shall
25  have dedicated to it 20 percent of available tax credits in
26  any given state fiscal year for which this section applies.
27  The maximum tax credit award that may be made from this queue
28  for any single production company is $500,000 for a state
29  fiscal year. On April 1 of each year, the remaining tax
30  credits within this queue shall be merged into a general queue
31  
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 1  and may be used for other purposes of this section as
 2  determined by the Office of Film and Entertainment.
 3         (e)  Loss of eligibility; reallocation of tax
 4  credits.--If a qualified production is not continued according
 5  to a reasonable schedule or the Office of Film and
 6  Entertainment is notified that a qualified production will no
 7  longer be produced, the office shall withdraw the production's
 8  eligibility for tax credits and reallocate the tax credits to
 9  the next qualified productions already in the queue that have
10  yet to receive a full tax credit if such next qualified
11  productions have not started principal photography by the time
12  the tax credits become available.
13         (f)  Verification of tax credit award.--The Office of
14  Film and Entertainment shall develop a process by which a
15  qualified production that has been certified by the Office of
16  Tourism, Trade, and Economic Development shall submit to the
17  Office of Film and Entertainment, in a timely manner after
18  production ends and after making all of its qualified
19  expenditures, verifying data to substantiate each qualified
20  expenditure. The Office of Film and Entertainment shall report
21  to the Office of Tourism, Trade, and Economic Development the
22  final verified amount of actual qualified expenditures made by
23  the qualified production. The Office of Tourism, Trade, and
24  Economic Development shall then notify the executive director
25  of the Department of Revenue that the qualified production has
26  met all requirements of the incentive program and shall
27  recommend the final amount of the tax credit.
28         (g)(b)  Use of tax credit; carry forward.--The tax
29  credit available under this section shall only be surrendered
30  in satisfaction of the tax owed by a qualified production
31  company under this chapter and only up to the face amount of
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 1  the credit. If the qualified production company cannot use the
 2  entire tax credit in the state fiscal year in which the credit
 3  is approved, any excess may be carried over to a succeeding
 4  state fiscal year. A tax credit granted under this section and
 5  applied against taxes imposed under this chapter may be
 6  carried forward only for a maximum of 5 state fiscal years
 7  following the state fiscal year in which the credit was
 8  approved. A digital-media-effects company in the state which
 9  furnishes digital material to filmed entertainment may be
10  eligible for a payment in an amount not to exceed 5 percent of
11  its annual gross revenues on qualified expenditures as defined
12  in paragraph (2)(c) before taxes or $100,000, whichever is
13  less. A company applying for payment must submit documentation
14  annually as required by the Office of Film and Entertainment
15  for determination of eligibility of claimed billing and
16  determination of the amount of payment for which the company
17  is eligible.
18         (h)(c)  Transfer of tax credits.--Upon application and
19  approval by the Department of Revenue, a taxpayer may sell or
20  assign, in whole or in part, a tax credit granted under this
21  section. The sale or assignment of any amount of the tax
22  credit may not be exchanged for consideration received by the
23  taxpayer of less than 85 percent of the transferred amount of
24  tax credit. The purchaser or assignee shall surrender the tax
25  credit in the state fiscal year acquired from the qualified
26  production company and otherwise may carry the tax credit over
27  subject to the same limitations on tax credit usage as the
28  qualified production company awarded the tax credit. The
29  purchaser may not sell, assign, or otherwise transfer the tax
30  credit. Tax credits granted by this section may not be sold or
31  assigned, in whole or in part, until all credits the taxpayer
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 1  is eligible to use under this chapter and chapter 212 are
 2  exhausted. The Department of Revenue may adopt rules pursuant
 3  to ss. 120.536(1) and 120.54 to administer this paragraph, as
 4  provided in paragraph (6)(b). A qualified relocation project
 5  that is certified by the Office of Film and Entertainment is
 6  eligible for a one-time incentive payment in an amount equal
 7  to 5 percent of its annual gross revenues before taxes for the
 8  first 12 months of conducting business in its Florida domicile
 9  or $200,000, whichever is less. A company applying for payment
10  must submit documentation as required by the Office of Film
11  and Entertainment for determination of eligibility of claimed
12  billing and determination of the amount of payment for which
13  the company is eligible.
14         (i)(d)  Noncorporate distributions of tax credits.--A
15  qualified production company that is not a corporation, as
16  defined in s. 220.03(1)(e), shall elect to make an
17  application, a digital-media-effects company, or a qualified
18  relocation project applying for a payment under this section
19  must submit documentation for claimed qualified expenditures
20  to the Department of Revenue as provided in paragraph (h) or
21  distribute tax credits awarded under this section to its
22  partners or members in proportion to the respective
23  distributive share of such partners' or members' income or
24  loss in the state fiscal year in which such tax credits were
25  approved. A tax credit granted under this section and applied
26  against taxes imposed under this chapter shall be carried
27  forward only for a maximum of 5 state fiscal years following
28  the state fiscal year in which the credit was approved Office
29  of Film and Entertainment. The Department of Revenue may adopt
30  rules pursuant to ss. 120.536(1) and 120.54 to administer this
31  paragraph, as provided in paragraph (6)(b).
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    577-2059-06
 1         (j)(e)  Use of tax credits.--A company may use the tax
 2  credit against the tax liability imposed under this chapter,
 3  in whole or in part, and against the tax liability imposed
 4  under chapter 212. The Office of Film and Entertainment shall
 5  notify the Office of Tourism, Trade, and Economic Development
 6  whether an applicant meets the criteria for reimbursement and
 7  shall recommend the reimbursement amount. The Office of
 8  Tourism, Trade, and Economic Development shall make the final
 9  determination for actual reimbursement.
10         (5)  MARKETING REQUIREMENTS.--The Office of Film and
11  Entertainment shall ensure appropriate marketing materials,
12  including promotions of this state as a tourist or filming
13  destination, are required when appropriate to be included on
14  any filmed entertainment as a condition of receiving a tax
15  credit under this section. The Office of Film and
16  Entertainment shall consult with appropriate entities for the
17  development and implementation of marketing materials.
18         (6)(5)  RULES POLICIES AND PROCEDURES.--
19         (a)  The Office of Tourism, Trade, and Economic
20  Development shall adopt rules pursuant to ss. 120.536(1) and
21  120.54 policies and procedures to implement this section,
22  including, but not limited to, rules specifying requirements
23  for the application and approval process, records required for
24  submission for substantiation of credit awards for
25  reimbursement, and determination of and qualification for
26  credit awards, and marketing requirements for credit
27  recipients reimbursement.
28         (b)  The Department of Revenue may adopt rules pursuant
29  to ss. 120.536(1) and 120.54 to administer the provisions of
30  this section, including rules governing the manner and form of
31  documentation required to claim tax credits granted or
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    Florida Senate - 2006                           CS for SB 2110
    577-2059-06
 1  transferred under this section, and may establish guidelines
 2  as to the requisites for an affirmative showing of
 3  qualification for tax credits granted or transferred under
 4  this section.
 5         (7)(6)  FRAUDULENT CLAIMS.--
 6         (a)  Any applicant who submits an application under
 7  this section that includes fraudulent information is liable
 8  for reimbursement of the reasonable costs and fees associated
 9  with the review, processing, investigation, and prosecution of
10  the application.
11         (b)  An eligible entity or company that obtains a
12  credit payment under this section through a claim that it
13  knows is fraudulent is liable for reimbursement of the credit
14  amount paid plus a penalty in an amount double the credit
15  payment and reimbursement of reasonable costs, which penalty
16  is in addition to any criminal penalty to which the entity or
17  company is liable for the same acts, plus interest. The entity
18  or company is also liable for costs and fees incurred by the
19  state in investigating and prosecuting the fraudulent claim.
20         (8)(7)  ANNUAL REPORT.--The Office of Film and
21  Entertainment shall provide an annual report for the previous
22  state fiscal year, due October 1, to the Governor, the
23  President of the Senate, and the Speaker of the House of
24  Representatives outlining the return on investment to the
25  state on tax credits awarded funds expended pursuant to this
26  section.
27         (9)  REPEAL.--This section is repealed July 1, 2014.
28         Section 4.  Subsection (5) of section 477.0135, Florida
29  Statutes, is amended to read:
30         477.0135  Exemptions.--
31  
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    Florida Senate - 2006                           CS for SB 2110
    577-2059-06
 1         (5)  A license is not required of any individual
 2  providing makeup, special effects, or cosmetology services to
 3  an actor, stunt person, musician, extra, or other talent
 4  during a production recognized by the Office of Film and
 5  Entertainment as a qualified production as defined in s.
 6  220.192 288.1254(2). Such services are not required to be
 7  performed in a licensed salon. Individuals exempt under this
 8  subsection may not provide such services to the general
 9  public.
10         Section 5.  This act shall take effect July 1, 2006.
11  
12          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
13                         Senate Bill 2110
14                                 
15  The committee substitute differs from the bill in the
    following ways:
16  
    -    Provides that the entertainment industry tax credit may
17       be applied against sales tax as well as corporate income
         tax;
18  
    -    Limits tax credits per individual recipient by providing
19       that qualified productions are eligible for tax credits
         equal to 15 percent, rather than 100 percent, of
20       qualified expenditures;
21  -    Provides that the entertainment industry corporate income
         tax credits must be claimed after all other corporate
22       income tax credits are claimed;
23  -    Removes one of the categories of qualified productions
         that are eligible for tax credits, the independent film
24       and video queue;
25  -    Provides for maximum tax credit allocations allowed in
         certain fiscal years, and provides that once the maximum
26       allocations are met, no more credits can be allocated;
27  -    Provides that television series may only receive tax
         credits for the first 5 production seasons;
28  
    -    Authorizes the Department of Revenue to adopt rules to
29       administer the program; and
30  -    Requires that the Department of Revenue receive tax
         credit applications from the applicants and receive
31       notification of certification of qualified productions.
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