Senate Bill sb0624c1

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    Florida Senate - 2006                            CS for SB 624

    By the Committee on Commerce and Consumer Services; and
    Senator Saunders




    577-1709-06

  1                      A bill to be entitled

  2         An act relating to economic development;

  3         amending s. 212.08, F.S.; conforming provisions

  4         to the revision creating designated urban job

  5         tax credit areas; amending s. 212.097, F.S.;

  6         revising provisions providing for an urban job

  7         tax credit program to apply to designated urban

  8         job tax credit areas rather than high-crime

  9         areas; revising and providing definitions,

10         eligibility criteria, application procedures

11         and requirements, and area characteristics and

12         criteria; amending s. 220.1895, F.S., to

13         conform; deleting an obsolete provision;

14         amending s. 288.99, F.S.; conforming provisions

15         to the revision creating designated urban job

16         tax credit areas; providing an effective date.

17  

18  Be It Enacted by the Legislature of the State of Florida:

19  

20         Section 1.  Paragraph (o) of subsection (5) of section

21  212.08, Florida Statutes, is amended to read:

22         212.08  Sales, rental, use, consumption, distribution,

23  and storage tax; specified exemptions.--The sale at retail,

24  the rental, the use, the consumption, the distribution, and

25  the storage to be used or consumed in this state of the

26  following are hereby specifically exempt from the tax imposed

27  by this chapter.

28         (5)  EXEMPTIONS; ACCOUNT OF USE.--

29         (o)  Building materials in redevelopment projects.--

30         1.  As used in this paragraph, the term:

31  

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 1         a.  "Building materials" means tangible personal

 2  property that becomes a component part of a housing project or

 3  a mixed-use project.

 4         b.  "Housing project" means the conversion of an

 5  existing manufacturing or industrial building to housing units

 6  in a designated an urban job tax credit high-crime area,

 7  enterprise zone, empowerment zone, Front Porch Community,

 8  designated brownfield area, or urban infill area and in which

 9  the developer agrees to set aside at least 20 percent of the

10  housing units in the project for low-income and

11  moderate-income persons or the construction in a designated

12  brownfield area of affordable housing for persons described in

13  s. 420.0004(9), (10), or (14), or in s. 159.603(7).

14         c.  "Mixed-use project" means the conversion of an

15  existing manufacturing or industrial building to mixed-use

16  units that include artists' studios, art and entertainment

17  services, or other compatible uses. A mixed-use project must

18  be located in a designated an urban job tax credit high-crime

19  area, enterprise zone, empowerment zone, Front Porch

20  Community, designated brownfield area, or urban infill area,

21  and the developer must agree to set aside at least 20 percent

22  of the square footage of the project for low-income and

23  moderate-income housing.

24         d.  "Substantially completed" has the same meaning as

25  provided in s. 192.042(1).

26         2.  Building materials used in the construction of a

27  housing project or mixed-use project are exempt from the tax

28  imposed by this chapter upon an affirmative showing to the

29  satisfaction of the department that the requirements of this

30  paragraph have been met. This exemption inures to the owner

31  through a refund of previously paid taxes. To receive this

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    Florida Senate - 2006                            CS for SB 624
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 1  refund, the owner must file an application under oath with the

 2  department which includes:

 3         a.  The name and address of the owner.

 4         b.  The address and assessment roll parcel number of

 5  the project for which a refund is sought.

 6         c.  A copy of the building permit issued for the

 7  project.

 8         d.  A certification by the local building code

 9  inspector that the project is substantially completed.

10         e.  A sworn statement, under penalty of perjury, from

11  the general contractor licensed in this state with whom the

12  owner contracted to construct the project, which statement

13  lists the building materials used in the construction of the

14  project and the actual cost thereof, and the amount of sales

15  tax paid on these materials. If a general contractor was not

16  used, the owner shall provide this information in a sworn

17  statement, under penalty of perjury. Copies of invoices

18  evidencing payment of sales tax must be attached to the sworn

19  statement.

20         3.  An application for a refund under this paragraph

21  must be submitted to the department within 6 months after the

22  date the project is deemed to be substantially completed by

23  the local building code inspector. Within 30 working days

24  after receipt of the application, the department shall

25  determine if it meets the requirements of this paragraph. A

26  refund approved pursuant to this paragraph shall be made

27  within 30 days after formal approval of the application by the

28  department. The provisions of s. 212.095 do not apply to any

29  refund application made under this paragraph.

30  

31  

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 1         4.  The department shall establish by rule an

 2  application form and criteria for establishing eligibility for

 3  exemption under this paragraph.

 4         5.  The exemption shall apply to purchases of materials

 5  on or after July 1, 2000.

 6         Section 2.  Section 212.097, Florida Statutes, is

 7  amended to read:

 8         (Substantial rewording of section. See

 9         s. 212.097, F.S., for present text.)

10         212.097  Designated Urban Job Tax Credit Area

11  Program.--

12         (1)  As used in this section, the term:

13         (a)  "Designated urban job tax credit area" means an

14  area designated by the Office of Tourism, Trade, and Economic

15  Development pursuant to subsection (5). Such an area includes

16  an area designated as a federal empowerment zone pursuant to

17  the Taxpayer Relief Act of 1997 or the Community Tax Relief

18  Act of 2000. A designated urban job tax credit area shall

19  retain its designation for a period of 5 years following the

20  date of designation.

21         (b)  "Eligible business" means any business entity that

22  is located in a designated urban job tax credit area and that

23  is predominantly engaged in, or is headquarters for a business

24  predominantly engaged in, activities usually provided for

25  consideration by firms classified within the following

26  standard industrial classifications: SIC 01-SIC 09

27  (agriculture, forestry, and fishing); SIC 20-SIC 39

28  (manufacturing); SIC 52-SIC 57 and SIC 59 (retail); SIC 422

29  (public warehousing and storage); SIC 70 (hotels and other

30  lodging places); SIC 7391 (research and development); SIC 781

31  (motion picture production and allied services); SIC 7992

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    Florida Senate - 2006                            CS for SB 624
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 1  (public golf courses); SIC 7996 (amusement parks); and a

 2  targeted industry eligible for the qualified target industry

 3  business tax refund under s. 288.106. A call center or similar

 4  customer service operation that services a multistate market

 5  or international market is also an eligible business. Excluded

 6  from eligible receipts are receipts from retail sales, except

 7  such receipts for SIC 52-SIC 57 and SIC 59 (retail) hotels and

 8  other lodging places classified in SIC 70, public golf courses

 9  in SIC 7992, and amusement parks in SIC 7996. For purposes of

10  this paragraph, the term "predominantly" means that more than

11  50 percent of the business's gross receipts from all sources

12  is generated by those activities usually provided for

13  consideration by firms in the specified standard industrial

14  classification. The determination of whether the business is

15  located in a designated urban job tax credit area must be

16  based on the date of application for the credit under this

17  section. Commonly owned and controlled entities are considered

18  a single business entity.

19         (c)  "Existing business" means any eligible business

20  that does not meet the criteria for a new business.

21         (d)  "New business" means any eligible business first

22  beginning operation on a site in a designated urban job tax

23  credit area and clearly separate from any other commercial or

24  business operation of the business entity within a designated

25  urban job tax credit area. A business entity that operated an

26  eligible business within a designated urban job tax credit

27  area within the 48 months before the period provided for

28  application by subsection (2) is not considered a new

29  business.

30         (e)  "Office" means the Office of Tourism, Trade, and

31  Economic Development.

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 1         (f)  "Qualified employee" means any employee of an

 2  eligible business who performs duties in connection with the

 3  operations of the business on a regular, full-time basis for

 4  an average of at least 36 hours per week for at least 3 months

 5  within the designated urban job tax credit area in which the

 6  eligible business is located. An owner or partner of the

 7  eligible business is not a qualified employee. The term also

 8  includes an employee leased from an employee leasing company

 9  licensed under chapter 468, if such employee has been

10  continuously leased to the employer for an average of at least

11  36 hours per week for more than 6 months.

12         (g)  "Urban infill and redevelopment area" means an

13  area or areas designated by a local government where:

14         1.  Public services such as water and wastewater,

15  transportation, schools, and recreation are already available

16  or are scheduled to be provided in an adopted 5-year schedule

17  of capital improvements;

18         2.  The area, or one or more neighborhoods within the

19  area, suffers from pervasive poverty, unemployment, and

20  general distress as defined by s. 290.0058;

21         3.  The area exhibits a proportion of properties that

22  are substandard, overcrowded, dilapidated, vacant or

23  abandoned, or functionally obsolete which is higher than the

24  average for the local government;

25         4.  More than 50 percent of the area is within 1/4 mile

26  of a transit stop, or a sufficient number of such transit

27  stops will be made available concurrent with the designation;

28  and

29         5.  The area includes or is adjacent to community

30  redevelopment areas, brownfields, enterprise zones, or Main

31  Street programs, or has been designated by the state or

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    Florida Senate - 2006                            CS for SB 624
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 1  Federal Government as an urban redevelopment, revitalization,

 2  or infill area under empowerment zone, enterprise community,

 3  or brownfield showcase community programs or similar programs.

 4         (2)  A county or municipality, or a county and one or

 5  more municipalities together, may apply to the office for the

 6  designation of an area as a designated urban job tax credit

 7  area in accordance with subsection (3).  Applications must be

 8  received by the office no later than April 30 of 2007 and

 9  every 5 years thereafter.

10         (3)  In order for an area to qualify as a designated

11  urban job tax credit area, the following requirements must be

12  met:

13         (a)  The local government seeking designation must

14  adopt a resolution prior to the date of application for

15  designation which:

16         1.  Finds that an urban area exists in such county or

17  municipality, or in both the county and one or more

18  municipalities, which chronically exhibits extreme and

19  unacceptable levels of poverty, unemployment, physical

20  deterioration, and economic disinvestment.

21         2.  Determines that the rehabilitation, conservation,

22  or redevelopment, or a combination thereof, of such an urban

23  area is necessary in the interest of the health, safety, and

24  welfare of the residents of such county or municipality, or

25  such county and one or more municipalities.

26         3.  Determines that the revitalization of such an urban

27  area can occur if the public sector or private sector can be

28  induced to invest its own resources in productive enterprises

29  that build or rebuild the economic viability of the area.

30         (b)  The local government seeking designation

31  demonstrates to the office that the area:

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    Florida Senate - 2006                            CS for SB 624
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 1         1.a.  Has at least 40 percent of its residents earning

 2  wages on an annual basis which are equal to or less than the

 3  annual wage of a person who is earning minimum wage; or

 4         b.  Has more than 20 percent of its residents or

 5  families living below the federal standard of poverty for

 6  individuals or a family of four;

 7         2.  Has an unemployment rate at least 3 percentage

 8  points higher than the state's unemployment rate;

 9         3.  Has an arrest rate higher than the state's average

10  rate for crimes such as drug sale, drug possession,

11  prostitution, vandalism, and civil disturbances, as recorded

12  by the total crime index of the Department of Law Enforcement;

13  and

14         4.a.  Has 50 percent or more of its residents who rent;

15         b.  Has property values that are within the lower 50

16  percent of the county's assessed property values;

17         c.  Has more than 5 percent of its commercial buildings

18  currently vacant or condemned within the previous 24 months;

19  or

20         d.  With respect to at least 25 percent of tax or

21  special-assessment delinquencies, the amount of the

22  delinquency exceeds the fair value of the land.

23         (c)  The selected area has a continuous boundary or

24  consists of not more than three noncontiguous parcels.

25         (d)  The selected area does not exceed the following

26  mileage limitation:

27         1.  For areas having a total population of 150,000

28  persons or more, the selected area does not exceed 20 square

29  miles and is within 10 miles of the urban infill and

30  redevelopment area of a municipality.

31  

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 1         2.  For areas having a total population of 50,000

 2  persons or more, but fewer than 150,000 persons, the selected

 3  area does not exceed 10 square miles and is within 7.5 miles

 4  of the urban infill and redevelopment area of a municipality.

 5         3.  For areas having a total population of 20,000

 6  persons or more, but fewer than 50,000 persons, the selected

 7  area does not exceed 5 square miles and is within 5 miles of

 8  the urban infill and redevelopment area of a municipality.

 9         4.  For areas having a total population of fewer than

10  20,000 persons, the selected area does not exceed 3 square

11  miles and is within 3 miles of the urban infill and

12  redevelopment area of a municipality.

13         (4)  A municipality, or a county and one or more

14  municipalities together, may not nominate more than one urban

15  area. However, any county as defined by s. 125.011(1) may

16  nominate no more than three urban areas.

17         (5)  On June 30, 2007, and every 5 years thereafter,

18  the office may designate no more than 30 areas that meet the

19  requirements of subsection (3). If there are more than 30

20  applications in any year, the office shall rank the areas by

21  level of distress and designate the 30 areas having the

22  highest level of distress.

23         (6)  A new eligible business may apply for a tax credit

24  under this subsection once at any time during its first year

25  of operation. A new eligible business in a designated urban

26  job tax credit area which has at least 10 qualified employees

27  on the date of application shall receive a $1,000 tax credit

28  for each such employee.

29         (7)  An existing eligible business may apply for a tax

30  credit under this subsection at any time it is entitled to

31  such credit, except as restricted by this subsection. An

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 1  existing eligible business in a designated urban job tax

 2  credit area which, on the date of application, has at least

 3  five more qualified employees than it had 1 year prior to its

 4  date of application shall receive a $1,000 credit for each

 5  such additional employee. An existing eligible business may

 6  apply for the credit under this subsection no more than once

 7  in any 12-month period. Any existing eligible business that

 8  has received a credit under subsection (6) may not apply for

 9  the credit under this subsection sooner than 12 months after

10  the application date for the credit under subsection (6). To

11  be eligible for a tax credit under this subsection, the number

12  of qualified employees employed 1 year prior to the

13  application date must be no lower than the number of qualified

14  employees on the application date on which a credit under this

15  section was based for any previous application, including an

16  application under subsection (6).

17         (8)  For any new eligible business receiving a credit

18  pursuant to subsection (6), an additional $500 credit shall be

19  provided for any qualified employee who is a

20  welfare-transition-program participant. For any existing

21  eligible business receiving a credit pursuant to subsection

22  (7), an additional $500 credit shall be provided for any

23  qualified employee who is a welfare-transition-program

24  participant. Such employee must be employed on the application

25  date and have been employed less than 1 year. This credit

26  shall be in addition to other credits pursuant to this

27  section. Appropriate documentation concerning the eligibility

28  of an employee for this credit must be submitted as determined

29  by the department.

30         (9)(a)  In order to claim this credit, an eligible

31  business must file under oath with the office a statement that

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 1  includes the name and address of the eligible business and any

 2  other information that is required to process the application.

 3         (b)  Within 30 working days after receipt of an

 4  application for credit, the office shall review the

 5  application to determine whether it contains all the

 6  information required by this subsection and meets the criteria

 7  set out in this section. Subject to the provisions of

 8  paragraph (c), the office shall approve all applications that

 9  contain the information required by this subsection and meet

10  the criteria set out in this section as eligible to receive a

11  credit.

12         (c)  The maximum credit amount that may be approved

13  during any calendar year is $5 million. The Department of

14  Revenue, in conjunction with the office, shall notify the

15  governing bodies in areas designated under this section when

16  the $5-million-maximum amount has been reached. Applications

17  must be considered for approval in the order in which they are

18  received without regard to whether the credit is for a new or

19  existing business. This limitation applies to the value of the

20  credit as contained in approved applications. Approved credits

21  may be taken in the time and manner allowed pursuant to this

22  section.

23         (10)  If the application is insufficient to support the

24  credit authorized in this section, the office shall deny the

25  credit and notify the business of that fact. The business may

26  reapply for this credit within 3 months after such

27  notification.

28         (11)  If the credit under this section is greater than

29  can be taken on a single tax return, excess amounts may be

30  taken as credits on any tax return submitted within 12 months

31  after the approval of the application by the department.

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 1         (12)  It is the responsibility of each business to

 2  affirmatively demonstrate to the satisfaction of the

 3  Department of Revenue that it meets the requirements of this

 4  section.

 5         (13)  Any person who fraudulently claims this credit is

 6  liable for repayment of the credit plus a mandatory penalty of

 7  100 percent of the credit and is guilty of a misdemeanor of

 8  the second degree, punishable as provided in s. 775.082 or s.

 9  775.083.

10         (14)  A corporation may take the credit under this

11  section against its corporate income tax liability, as

12  provided in s. 220.1895. However, a corporation that applies

13  its job tax credit against the tax imposed by chapter 220 may

14  not receive the credit provided for in this section. A credit

15  may be taken against only one tax.

16         (15)  The department shall adopt rules governing the

17  manner and form of applications for credit and may establish

18  guidelines concerning the requisites for an affirmative

19  showing of qualification for the credit under this section.

20         (16)  Notwithstanding subsections (6), (7), and (8), an

21  eligible business located in an area designated under this act

22  as of June 30, 2006, shall retain its program and tax credit

23  eligibility through June 30, 2012, if the business complies

24  with the job-creation requirements. This subsection expires

25  July 1, 2012.

26         Section 3.  Section 220.1895, Florida Statutes, is

27  amended to read:

28         220.1895  Rural Job Tax Credit and Designated Urban

29  High-Crime Area Job Tax Credit.--There shall be allowed a

30  credit against the tax imposed by this chapter amounts

31  approved by the Office of Tourism, Trade, and Economic

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 1  Development pursuant to the Rural Job Tax Credit Program in s.

 2  212.098 and the Designated Urban High-Crime Area Job Tax

 3  Credit Area Program in s. 212.097. A corporation that uses its

 4  credit against the tax imposed by this chapter may not take

 5  the credit against the tax imposed by chapter 212. If any

 6  credit granted under this section is not fully used in the

 7  first year for which it becomes available, the unused amount

 8  may be carried forward for a period not to exceed 5 years. The

 9  carryover may be used in a subsequent year when the tax

10  imposed by this chapter for such year exceeds the credit for

11  such year under this section after applying the other credits

12  and unused credit carryovers in the order provided in s.

13  220.02(8).

14         Section 4.  Subsection (2) of section 288.99, Florida

15  Statutes, is amended to read:

16         288.99  Certified Capital Company Act.--

17         (2)  PURPOSE.--The primary purpose of this act is to

18  stimulate a substantial increase in venture capital

19  investments in this state by providing an incentive for

20  insurance companies to invest in certified capital companies

21  in this state which, in turn, will make investments in new

22  businesses or in expanding businesses, including

23  minority-owned or minority-operated businesses and businesses

24  located in a designated Front Porch community, enterprise

25  zone, designated urban job tax credit high-crime area, rural

26  job tax credit county, or nationally recognized historic

27  district. The increase in investment capital flowing into new

28  or expanding businesses is intended to contribute to

29  employment growth, create jobs which exceed the average wage

30  for the county in which the jobs are created, and expand or

31  diversify the economic base of this state.

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 1         Section 5.  This act shall take effect July 1, 2006.

 2  

 3          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
 4                         Senate Bill 624

 5                                 

 6  The committee substitute differs from the bill in the
    following ways:
 7  
    -    Re-organizes s. 212.097, F.S., for clarity.
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    -    Provides application (April 30, 2007) and designation
 9       (June 30, 2007) deadlines, to help the Office of Tourism,
         Trade, and Economic Development administer the program.
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