CS/CS/HB 1325

1
A bill to be entitled
2An act relating to entertainment industry economic
3development; providing a short title; amending s.
4288.1254, F.S.; revising the entertainment industry
5financial incentive program to provide corporate income
6tax and sales and use tax credits to qualified
7entertainment entities rather than reimbursements from
8appropriations; revising provisions relating to
9definitions, creation and scope, application procedures,
10approval process, eligibility, required documents,
11qualified and certified productions, and annual reports;
12providing duties and responsibilities of the Office of
13Film and Entertainment, the Office of Tourism, Trade, and
14Economic Development, and the Department of Revenue
15relating to the tax credits; providing criteria and
16limitations for awards of tax credits; providing a total
17amount available for tax credits; providing for uses,
18allocations, election, distributions, and carryforward of
19the tax credits; providing for use of consolidated
20returns; providing for partnership and noncorporate
21distributions of tax credits; providing for succession of
22tax credits; providing requirements for transfer of tax
23credits; requiring a purchaser of transferred tax credits
24to pay a percentage of the amount paid to fund specified
25film education grants; providing priority allocation of
26tax credits; providing for withdrawal of tax credit
27eligibility; establishing queues; authorizing the Office
28of Tourism, Trade, and Economic Development to adopt
29rules, policies, and procedures; authorizing the
30Department of Revenue to adopt rules and conduct audits;
31providing for revocation and forfeiture of tax credits;
32providing liability for reimbursement of certain costs and
33fees associated with a fraudulent claim; requiring an
34annual report to the Governor and the Legislature;
35providing for future repeal; creating s. 288.1256, F.S.;
36establishing the Florida Graduate Film Investment Fund;
37requiring administration by the Office of Film and
38Entertainment; providing for deposit of funds; requiring
39that funds be used for certain family-friendly films;
40amending s. 288.1252, F.S.; requiring the Florida Film and
41Entertainment Advisory Council to advise on films produced
42under the Florida Graduate Film Investment Fund; amending
43s. 220.02, F.S.; including tax credits enumerated in s.
44288.1254, F.S., in the order of application of credits
45against certain taxes; amending s. 213.053, F.S.;
46authorizing the Department of Revenue to provide tax
47credit information to the Office of Film and Entertainment
48and the Office of Tourism, Trade, and Economic
49Development; amending s. 212.08, F.S.; requiring
50electronic funds transfer for the entertainment industry
51tax credit; providing procedures; repealing s. 288.1255,
52F.S., to remove the requirement that annual funding for
53the entertainment industry financial incentive program be
54subject to legislative appropriation; providing
55severability; providing an effective date.
56
57Be It Enacted by the Legislature of the State of Florida:
58
59     Section 1.  This act may be cited as the "Don Davis
60Entertainment Industry Economic Development Act."
61     Section 2.  Section 288.1254, Florida Statutes, is amended
62to read:
63(Substantial rewording of section. See s. 288.1254,
64F.S., for present text.)
65     288.1254  Entertainment industry financial incentive
66program.--
67     (1)  CREATION AND PURPOSE OF PROGRAM.--There is created
68within the Office of Film and Entertainment an entertainment
69industry financial incentive program. The purpose of this
70program is to encourage the use of this state as a site for
71filming and to develop and sustain the workforce and
72infrastructure for film and entertainment production.
73     (2)  DEFINITIONS.--As used in this section, the term:
74     (a)  "Certified production" means a qualified production
75that has tax credits allocated to it based on its estimated
76qualified expenditures, up to its maximum certified amount of
77tax credits, by the Office of Tourism, Trade, and Economic
78Development. A qualified production is not a certified
79production if its first day of principal photography in the
80state occurs before it is certified by the Office of Tourism,
81Trade, and Economic Development, unless it is a previously
82certified production spanning fiscal years and required to make
83an application for continuing the same production in the
84subsequent year.
85     (b)  "Digital media project" means a production of
86interactive entertainment, including a video game, simulation,
87or animation, including a production intended for Internet or
88wireless distribution, that is produced for commercial or
89educational distribution. The term "digital media project" does
90not include a production deemed by the Office of Film and
91Entertainment to contain obscene content as defined in s.
92847.001(10).
93     (c)  "High-impact television series" means a production
94created to run multiple production seasons with an estimated
95order of at least seven episodes per season and qualified
96expenditures of at least $625,000 per episode.
97     (d)  "Off-season certified production" means a certified
98production, other than a digital media project or an animated
99production, that films 75 percent or more of its principal
100photography days from June 1 through November 30.
101     (e)  "Production" means a theatrical or direct-to-video
102motion picture, a made-for-television motion picture, a
103commercial, a music video, an industrial or educational film, an
104infomercial, a documentary film, a television pilot, a
105presentation for a television pilot, a television series,
106including, but not limited to, a drama, a reality, a comedy, a
107soap opera, a telenovela, a game show, miniseries production, or
108a digital media project by the entertainment industry. One
109season of a television series is considered one production. The
110term "production" does not include a weather or market program,
111a sporting event, a sports show, a gala, a production that
112solicits funds, a home shopping program, a political program, a
113political documentary, political advertising, a gambling-related
114project or production, a concert production, or a local,
115regional, or Internet-only news show, current events show, or
116current affairs show. A production may be produced on or by
117film, tape, or otherwise and produced by means of a motion
118picture camera, electronic camera or device, tape device,
119computer, any combination of the foregoing, or any other means,
120method, or device now used or that may hereafter be adopted.
121     (f)  "Production expenditures" means the costs of tangible
122and intangible property used and services performed primarily
123and customarily in the production, including pre-production and
124post-production, excluding development, marketing, and
125distribution costs. Production expenditures generally include,
126but are not limited to:
127     1.  Wages, salaries, or other compensation, including
128amounts paid through payroll service companies, for technical
129and production crews, directors, producers, and performers.
130     2.  Expenditures for sound stages, backlots, production
131editing, digital effects, sound recordings, sets, and set
132construction.
133     3.  Expenditures for rental equipment, including, but not
134limited to, cameras and grip or electrical equipment.
135     4.  Expenditures for meals, travel, and accommodations.
136     (g)  "Qualified expenditures" means production expenditures
137incurred in this state by a qualified production for the
138following:
139     1.  Goods purchased or leased from, or services provided
140by, a Florida vendor or supplier who is registered with the
141Department of State or the Department of Revenue and doing
142business in this state.
143     2.  Payments to residents of this state in the form of
144salary, wages, or other compensation up to a maximum of $400,000
145per resident for the general production queue and the
146independent Florida filmmaker queue and up to a maximum of
147$200,000 for the digital media queue.
148
149For a qualified production involving an event, such as an awards
150show, qualified expenditures exclude expenditures solely
151associated with the event itself and not directly required by
152the production. A qualified production's expenditures made prior
153to certification shall not be considered qualified expenditures,
154with the exception of those incurred by a commercial, a music
155video, or the pickup of additional episodes of a television
156series within a single season.
157     (h)  "Qualified production" means a production in this
158state that meets the requirements of this section and the
159minimum qualified expenditures and requirements of its
160appropriate queue. A qualified production's combined production
161cast and below-the-line production crew positions must be filled
162by at least 50 percent Florida residents or students enrolled
163full-time in a film and entertainment-related course of study at
164a Florida institution of higher education, or a combination
165thereof. For purposes of this section, proof of Florida
166residency is a valid Florida driver's license or other state-
167issued Florida identification confirming residency in the state.
168Productions that are deemed by the Office of Film and
169Entertainment to contain obscene content as defined in s.
170847.001(10) are not qualified productions.
171     (i)  "Qualified production company" means a corporation,
172limited liability company, partnership, or other legal entity
173engaged in producing a qualified production.
174     (3)  APPLICATION PROCEDURE; APPROVAL PROCESS.--
175     (a)  Program application.--A qualified production company
176in this state producing a qualified production may submit a
177program application to the Office of Film and Entertainment for
178the purpose of determining qualification for an award of tax
179credits authorized by this section no earlier than 1 year before
180the anticipated production start date. The office must be
181provided information required to determine whether the
182production is a qualified production and to determine the
183qualified expenditures and other information necessary for the
184office to determine eligibility for the tax credits.
185     (b)  Required documentation.--The Office of Film and
186Entertainment shall develop a program application form for use
187in qualifying an applicant as a qualified production. The
188program application form for qualifying an applicant as a
189qualified production must include, but need not be limited to,
190production-related information on Florida resident employment, a
191detailed budget of planned qualified expenditures, and a signed
192affirmation from the applicant that the information on the
193program application form has been verified and is correct. The
194program application form shall be distributed to applicants by
195the Office of Film and Entertainment or by local film
196commissions.
197     (c)  Application process.--The Office of Film and
198Entertainment shall establish a process by which a program
199application is accepted and reviewed and by which tax credit
200eligibility and amount are determined. The Office of Film and
201Entertainment may request assistance from a duly appointed local
202film commission in determining qualification for the tax credit
203and compliance with the provisions of this section.
204     (d)  Certification.--Within 10 business days after receipt
205of a program application, the Office of Film and Entertainment
206shall review the application and upon its determination that the
207program application contains all the information required by
208this subsection and meets the criteria set out in this section,
209the Office of Film and Entertainment shall qualify the applicant
210and recommend to the Office of Tourism, Trade, and Economic
211Development that the applicant be certified for the tax credit
212and suggest a maximum tax credit award amount. Within 5 business
213days after its receipt of the recommendation, the Office of
214Tourism, Trade, and Economic Development shall reject or shall
215certify the maximum recommended tax credit award, if any, to the
216applicant and to the executive director of the Department of
217Revenue.
218     (e)  Grounds for denial.--The Office of Film and
219Entertainment shall deny an application if it determines that:
220     1.  The application is not complete or does not meet the
221requirements of this section; or
222     2.  The tax credit sought does not meet the requirements of
223this section.
224     (f)  Verification of actual qualified expenditures.--The
225Office of Film and Entertainment shall develop a process by
226which a certified production shall submit, in a timely manner
227after production ends and after making all of its qualified
228expenditures, data substantiating each qualified expenditure to
229an independent Florida-licensed certified public accountant. The
230accountant shall conduct an audit, at the certified production's
231expense, to substantiate each qualified expenditure and shall
232submit the results and all substantiating data to the Office of
233Film and Entertainment, which shall review and report to the
234Office of Tourism, Trade, and Economic Development the final
235verified amount of actual qualified expenditures made by the
236certified production. The Office of Tourism, Trade, and Economic
237Development shall then notify the executive director of the
238Department of Revenue that the certified production has met the
239requirements of the incentive program and shall approve the
240final amount of the tax credit award. The Office of Tourism,
241Trade, and Economic Development shall award all tax credits for
242the previous fiscal year by September 30.
243     (g)  Promoting Florida.--The Office of Film and
244Entertainment shall ensure that, as a condition of receiving a
245tax credit under this section, marketing materials promoting
246this state as a tourist destination or film and entertainment
247production destination are included, when appropriate, at no
248cost to the state, which shall include, at a minimum, placement
249in the end credits of a Filmed in Florida logo, the look and
250content of which shall be developed and supplied by the Office
251of Film and Entertainment, with size and placement commensurate
252to other logos included in the end credits. If no logos are
253used, the end credits shall include "Filmed in Florida utilizing
254Florida's Entertainment Industry Financial Incentive" or a
255similar statement preapproved by the Office of Film and
256Entertainment.
257     (4)  TAX CREDIT ELIGIBILITY; ELECTION AND DISTRIBUTION;
258CARRYFORWARD; CONSOLIDATED RETURNS; PARTNERSHIP AND NONCORPORATE
259DISTRIBUTIONS; MERGERS OR ACQUISITIONS.--
260     (a)  Tax credit authorization.--For fiscal years beginning
261on or after July 1, 2007, and ending June 30, 2010, a qualified
262production is eligible for a tax credit against taxes due under
263chapter 220 or taxes collected or accrued under chapter 212.
264     (b)  Total tax credit.--The total amount of tax credits
265that may be awarded under this section is $75 million, allocated
266$25 million each fiscal year the incentive remains in effect. If
267the total amount of allocated credits applied for in any fiscal
268year exceeds the aggregate amount of tax credits allowed for
269such year under this section, such excess shall be treated as
270having been applied for on the first day of the next fiscal year
271in which credits are available. In any fiscal year, tax credits
272that are not awarded or that are forfeited due to withdrawal of
273a certified production or to a production's actual qualified
274expenditures being less than the certified amount shall be
275available for award in subsequent fiscal years.
276     (c)  Election and distribution of tax credits.--A certified
277production company receiving a tax credit award under this
278section shall, at the time the credit is awarded by the Office
279of Tourism, Trade, and Economic Development after production is
280completed and all requirements to receive a credit award have
281been met, make an irrevocable election to apply the credit
282against taxes due under chapter 220, against taxes collected or
283accrued under chapter 212, or against a stated combination of
284the two taxes. The election shall be binding upon any
285distributee, successor, transferee, or purchaser. The Office of
286Tourism, Trade, and Economic Development shall notify the
287Department of Revenue of any election made pursuant to this
288paragraph.
289     (d)  Tax credit carryforward.--If the certified production
290company cannot use the entire tax credit in the taxable year or
291reporting period in which the credit is awarded because of
292insufficient tax liability on the part of the certified
293production, any excess amount may be carried forward to a
294succeeding taxable year or reporting period. A tax credit
295applied against taxes imposed under chapter 212 may be carried
296forward for a maximum of 5 years following the date of award. A
297tax credit applied against taxes imposed under chapter 220 may
298be carried forward for a maximum of 5 taxable years following
299the qualified production company's taxable year in which the
300credit was awarded, after which period the credit expires and
301may not be used.
302     (e)  Consolidated returns.--A certified production company
303that files a Florida consolidated return as a member of an
304affiliated group under s. 220.131(1) may be allowed the credit
305on a consolidated return basis up to the amount of the tax
306imposed upon the consolidated group under chapter 220.
307     (f)  Partnership and noncorporate distributions.--A
308qualified production company that is not a corporation as
309defined in s. 220.03 may elect to distribute tax credits awarded
310under this section to its partners or members in proportion to
311their respective distributive income or loss in the taxable
312fiscal year in which the tax credits were awarded.
313     (g)  Mergers or acquisitions.--Tax credits available under
314this section to a certified production company may succeed to a
315surviving or acquiring entity subject to the same conditions and
316limitations as described in this section; however, they may not
317be transferred again by the surviving or acquiring entity.
318     (5)  TRANSFER OF TAX CREDITS.--
319     (a)  Authorization.--Upon application to the Office of Film
320and Entertainment and approval by the Office of Tourism, Trade,
321and Economic Development, a certified production company, or a
322partner or member that has received a distribution under
323paragraph (4)(f), may elect to transfer, in whole or in part,
324any unused credit amount granted under this section. An election
325to transfer any unused tax credit amount under chapter 212 or
326chapter 220 must be made no later than 5 years from the date the
327credit was awarded, after which period the credit expires and
328may not be used. The Office of Tourism, Trade, and Economic
329Development shall notify the Department of Revenue of the
330election and transfer.
331     (b)  Number of transfers permitted.--A certified production
332company that has elected to apply a credit amount against taxes
333remitted under chapter 212 is permitted a one-time transfer of
334unused credits to one transferee. A certified production company
335that has elected to apply a credit amount against taxes due
336under chapter 220 is permitted a one-time transfer of unused
337credits to no more than four transferees, and such transfers
338shall occur in the same taxable year.
339     (c)  Minimum consideration.--The transfer or purchase of
340any amount of the tax credit shall not be exchanged for less
341than 75 percent of the credit's value.
342     (d)  Transferee rights and limitations.--The transferee is
343subject to the same rights and limitations as the certified
344production company awarded the tax credit, except that the
345transferee may not sell or otherwise transfer the tax credit.
346     (e)  Written contractual notice.--No less than 3 business
347days prior to the certified production company's election to
348transfer its awarded tax credit, the Office of Film and
349Entertainment shall receive written contractual notice, on a
350form approved by the Office of Tourism, Trade, and Economic
351Development and signed by both the certified production and the
352transferee, describing the terms of the transfer and the
353intention of any purchaser to allocate payment for the film
354education program under paragraph (f) at the time the transfer
355is made.
356     (f)  Film education fee.--
357     1.  A purchaser of any transferred tax credit under this
358subsection shall pay an amount equal to 5 percent of the total
359amount paid for the tax credit into the Grants and Donations
360Trust Fund under s. 14.2015(2)(f) administered by the Office of
361Tourism, Trade, and Economic Development for film education
362programs. The fees collected under this paragraph shall be
363subject to specific appropriation by the Legislature.
364     a.  Fifty percent of the fee collected under this paragraph
365shall be made available to the Office of Film and Entertainment
366for the purpose described in s. 288.1256.
367     b.  Fifty percent of the fee collected under this paragraph
368shall be transferred and provided to film and digital media
369programs at Florida institutions of higher education approved by
370the Office of Film and Entertainment to be applied as a grant
371toward production costs for a student-made production. To be
372eligible for this grant, a student-made production may not
373contain obscene content as defined in s. 847.001(10). The
374recipient of the transfer may choose the approved film or
375digital media program to receive these funds.
376     2.  This paragraph shall not apply to the transfer of tax
377credits to an affiliated company of the certified production.
378     (g)  Rulemaking.--The Department of Revenue may adopt rules
379pursuant to ss. 120.536(1) and 120.54 to administer this
380subsection, as provided in subsection (7).
381     (6)  PRIORITY ALLOCATION OF TAX CREDITS; ELIGIBILITY
382WITHDRAWAL; QUEUES.--
383     (a)  Tax credit priority.--Eligibility of a qualified
384production for a tax credit award shall be determined on a
385first-come, first-served basis within its appropriate queue. A
386qualified production shall be placed into the appropriate queue
387and subject to the requirements of that queue.
388     (b)  Withdrawal of tax credit eligibility.--A qualified or
389certified production shall continue on a reasonable schedule,
390which means beginning principal photography in the state no
391sooner than 45 calendar days before and no later than 45
392calendar days after the date provided in the production's
393program application. The Office of Tourism, Trade, and Economic
394Development shall withdraw the eligibility of a qualified or
395certified production that does not continue on a reasonable
396schedule and recertify the tax credits to the next qualified or
397certified production or productions in the respective queue that
398have not been certified for their full maximum award and have
399not started principal photography before the tax credits become
400available.
401     (c)  Queues.--
402     1.  General production queue.--
403     a.  A qualified production, excluding commercials, music
404videos, and digital media projects, that demonstrates a minimum
405of $625,000 in total qualified expenditures shall be eligible
406for tax credits equal to 15 percent of its actual qualified
407expenditures up to a maximum of $8 million. A qualified
408production spanning state fiscal years may combine qualified
409expenditures from state fiscal years to satisfy the threshold.
410     b.  A qualified production company that produces national
411or regional commercials, music videos, or both may be eligible
412for a tax credit award if it demonstrates a minimum of $100,000
413in qualified expenditures per national or regional commercial or
414music video and exceeds a combined threshold of $500,000 after
415combining actual qualified expenditures from qualified
416commercials, music videos, or both during a single state fiscal
417year. After a qualified production company that produces
418commercials, music videos, or both reaches the threshold of
419$500,000, it shall be eligible to apply for certification for a
420tax credit award. The maximum tax credit award shall be equal to
42115 percent of its actual qualified expenditures up to a maximum
422of $500,000.
423     c.  Eighty-five percent of all tax credits available under
424this section in any state fiscal year shall be dedicated to this
425queue.
426     d.  An off-season certified production in this queue shall
427be eligible for an additional 5-percent tax credit on actual
428qualified expenditures. An off-season certified production that
429does not complete 75 percent of principal photography as a
430result of a hurricane or tropical storm disruption shall not be
431disqualified from eligibility for the additional 5-percent
432credit as a result of the disruption.
433     e.  A certified production within this queue that spans
434state fiscal years shall have all qualified expenditures
435certified for the state fiscal year in which the last actual
436qualified expenditure is anticipated to be made.
437     f.  A qualified production in this queue shall make a good
438faith effort to utilize Florida's existing infrastructure of
439equipment providers, including camera gear, grip and lighting
440equipment, vehicle providers, and post-production services when
441available in-state.
442     g.  A qualified high-impact television series shall be
443allowed first position in this queue for tax credits not yet
444certified.
445     2.  Independent Florida filmmaker queue.--An independent
446Florida film that meets the criteria of this queue and
447demonstrates a minimum of $100,000, but not more than $625,000,
448in total qualified expenditures shall be eligible for tax
449credits equal to 15 percent of its actual qualified
450expenditures. Five percent of all tax credits available under
451this section in any state fiscal year shall be dedicated to this
452queue. To qualify for this queue, a qualified production must:
453     a.  Be planned as a feature film or documentary of no less
454than 70 minutes in length.
455     b.  Provide evidence of 50 percent of the financing for its
456total budget in an escrow account or other form dedicated to the
457production.
458     c.  Do all major post-production in this state.
459     d.  Employ Florida workers in at least six of the following
460eight key positions:
461     (I)  Writer.
462     (II)  Director.
463     (III)  Producer.
464     (IV)  Director of Photography.
465     (V)  Star or one of the lead actors.
466     (VI)  Unit Production Manager.
467     (VII)  Editor.
468     (VIII)  Production Designer.
469
470For purposes of this sub-subparagraph, a "Florida worker" means
471a person who has been a resident of this state for at least 1
472year prior to a production's application or a person who is
473attending a Florida film school or Florida college, university,
474or community college full-time or has graduated from such
475school, college, university, or community college within 5 years
476prior to the production's application. Projects that extend
477beyond a fiscal year must reapply each fiscal year in order to
478be eligible for a tax credit award for that year.
479     3.  Digital media projects queue.--A qualified production
480that is a digital media project that demonstrates a minimum of
481$300,000 in total qualified expenditures shall be eligible for a
482tax credit equal to 10 percent of its actual qualified
483expenditures up to a maximum of $1 million. Ten percent of all
484tax credits available under this section in any state fiscal
485year shall be dedicated to this queue.
486     a.  For purposes of this subparagraph, "qualified
487expenditures" are the wages or salaries paid to Florida resident
488labor working on a single qualified digital media project.
489     b.  A qualified production company producing digital media
490projects may not qualify for more than three projects in any one
491fiscal year. Projects that extend beyond a fiscal year must
492reapply each fiscal year in order to be eligible for a tax
493credit award for that year.
494     (7)  RULES, POLICIES, AND PROCEDURES.--
495     (a)  The Office of Tourism, Trade, and Economic Development
496may adopt rules pursuant to ss. 120.536(1) and 120.54 and
497develop policies and procedures to implement and administer this
498section, including, but not limited to, rules specifying
499requirements for the application and approval process, records
500required for substantiation for tax credits, procedures for
501making the election in paragraph (4)(c), and the manner and form
502of documentation required to claim tax credits awarded or
503transferred under this section, determination of, qualification
504for, and certification for tax credits, implementation of the
505Florida Graduate Film Investment Fund in s. 288.1256, and
506marketing requirements for tax credit recipients.
507     (b)  The Department of Revenue may adopt rules pursuant to
508ss. 120.536(1) and 120.54 to administer this section, including
509rules governing the examination and audit procedures required to
510administer this section and the manner and form of documentation
511required to claim tax credits awarded or transferred under this
512section.
513     (8)  AUDIT AUTHORITY; REVOCATION AND FORFEITURE OF TAX
514CREDITS; FRAUDULENT CLAIMS.--
515     (a)  Audit authority.--The Department of Revenue may
516conduct examinations and audits as provided in s. 213.34 to
517verify that tax credits under this section have been received,
518transferred, and applied according to the requirements of this
519section. If the Department of Revenue determines that tax
520credits have not been received, transferred, or applied as
521required by this section, it may, in addition to the remedies
522provided in this subsection, pursue recovery of such funds
523pursuant to the laws and rules governing the assessment of
524taxes.
525     (b)  Revocation of tax credits.--The Office of Tourism,
526Trade, and Economic Development may revoke or modify any written
527decision qualifying, certifying, or otherwise granting
528eligibility for tax credits under this section if it is
529discovered that the tax credit applicant submitted any false
530statement, representation, or certification in any application,
531record, report, plan, or other document filed in an attempt to
532receive tax credits under this section. The Office of Tourism,
533Trade, and Economic Development shall immediately notify the
534Department of Revenue of any revoked or modified orders
535affecting previously granted tax credits. Additionally, the
536applicant must notify the Department of Revenue of any change in
537its tax credit claimed.
538     (c)  Forfeiture of tax credits.--A determination by the
539Department of Revenue, as a result of an audit or examination by
540the Department of Revenue or from information received from the
541Office of Film and Entertainment, that an applicant received tax
542credits pursuant to this section to which the applicant was not
543entitled is grounds for forfeiture of previously claimed and
544received tax credits. The applicant is responsible for returning
545forfeited tax credits to the Department of Revenue, and such
546funds shall be paid into the General Revenue Fund of the state.
547Tax credits purchased in good faith are not subject to
548forfeiture unless the transferee submitted fraudulent
549information in the purchase or failed to meet the requirements
550in subsection (5).
551     (d)  Fraudulent claims.--Any applicant that submits
552information under this section that includes fraudulent
553information is liable for reimbursement of the reasonable costs
554and fees associated with the review, processing, investigation,
555and prosecution of the fraudulent claim. An applicant that
556obtains a credit payment under this section through a claim that
557is fraudulent is liable for reimbursement of the credit amount
558claimed plus a penalty in an amount double the credit amount
559claimed and reimbursement of reasonable costs, which penalty is
560in addition to any criminal penalty to which the applicant is
561liable for the same acts. The applicant is also liable for costs
562and fees incurred by the state in investigating and prosecuting
563the fraudulent claim.
564     (9)  ANNUAL REPORT.--The Office of Film and Entertainment
565shall provide an annual report for the previous fiscal year, due
566October 1, to the Governor, the President of the Senate, and the
567Speaker of the House of Representatives outlining the return on
568investment to the state on funds expended pursuant to this
569section.
570     (10)  REPEAL.--This section is repealed July 1, 2010,
571except that the tax credit carryforward provided in this section
572shall continue to be valid for the period specified.
573     Section 3.  Section 288.1256, Florida Statutes, is created
574to read:
575     288.1256  Florida Graduate Film Investment Fund.--
576     (1)  The Office of Film and Entertainment shall create and
577administer a program, using moneys deposited into the Office of
578Tourism, Trade, and Economic Development's Grants and Donations
579Trust Fund pursuant to s. 288.1254(5)(f), to award either a
580grant or a loan guarantee for films that are:
581     (a)  Written, produced, and directed by Florida residents
582who are graduates of an Office of Film and Entertainment
583approved film program at a Florida institution of higher
584education; and
585     (b)  Determined by the Commissioner of Film and
586Entertainment, with the advice of the Florida Film and
587Entertainment Advisory Council, to be family friendly based on
588the review of the script and a personal interview with the
589director. Family-friendly productions are those that have cross-
590generational appeal; would be considered suitable for viewing by
591children age 5 and older; are appropriate in theme, content, and
592language for a broad family audience; embody a responsible
593resolution of issues; and do not exhibit any act of smoking,
594sex, nudity, or vulgar or profane language.
595     (2)  Films that are deemed by the Office of Film and
596Entertainment to contain obscene content as defined in s.
597847.001(10) are not eligible for this program.
598     Section 4.  Paragraph (j) is added to subsection (5) of
599section 288.1252, Florida Statutes, to read:
600     288.1252  Florida Film and Entertainment Advisory Council;
601creation; purpose; membership; powers and duties.--
602     (5)  POWERS AND DUTIES.--The Florida Film and Entertainment
603Advisory Council shall have all the powers necessary or
604convenient to carry out and effectuate the purposes and
605provisions of this act, including, but not limited to, the power
606to:
607     (j)  Advise whether a film produced under s. 288.1256 meets
608the criteria delineated in that section.
609     Section 5.  Subsection (8) of section 220.02, Florida
610Statutes, is amended to read:
611     220.02  Legislative intent.--
612     (8)  It is the intent of the Legislature that credits
613against either the corporate income tax or the franchise tax be
614applied in the following order: those enumerated in s. 631.828,
615those enumerated in s. 220.191, those enumerated in s. 220.181,
616those enumerated in s. 220.183, those enumerated in s. 220.182,
617those enumerated in s. 220.1895, those enumerated in s. 221.02,
618those enumerated in s. 220.184, those enumerated in s. 220.186,
619those enumerated in s. 220.1845, those enumerated in s. 220.19,
620those enumerated in s. 220.185, those enumerated in s. 220.187,
621those enumerated in s. 220.192, and those enumerated in s.
622220.193, and those enumerated in s. 288.1254.
623     Section 6.  Paragraph (z) is added to subsection (8) of
624section 213.053, Florida Statutes, to read:
625     213.053  Confidentiality and information sharing.--
626     (8)  Notwithstanding any other provision of this section,
627the department may provide:
628     (z)  Information relative to tax credits taken under s.
629288.1254 to the Office of Film and Entertainment and the Office
630of Tourism, Trade, and Economic Development.
631
632Disclosure of information under this subsection shall be
633pursuant to a written agreement between the executive director
634and the agency. Such agencies, governmental or nongovernmental,
635shall be bound by the same requirements of confidentiality as
636the Department of Revenue. Breach of confidentiality is a
637misdemeanor of the first degree, punishable as provided by s.
638775.082 or s. 775.083.
639     Section 7.  Paragraph (q) is added to subsection (5) of
640section 212.08, Florida Statutes, to read:
641     212.08  Sales, rental, use, consumption, distribution, and
642storage tax; specified exemptions.--The sale at retail, the
643rental, the use, the consumption, the distribution, and the
644storage to be used or consumed in this state of the following
645are hereby specifically exempt from the tax imposed by this
646chapter.
647     (5)  EXEMPTIONS; ACCOUNT OF USE.--
648     (q)  Entertainment industry tax credit; requirement for
649electronic funds transfer.--
650     1.  For the fiscal years beginning July 1, 2007, and ending
651June 30, 2010, a qualified production, as defined in s.
652288.1254(2)(h), is eligible for tax credits against its state
653sales and use tax liabilities as provided in s. 288.1254.
654     2.  The credit shall be deducted from any sales and use tax
655remitted by the dealer to the department by electronic funds
656transfer and can only be deducted on a sales and use tax return
657initiated through electronic data interchange. The dealer shall
658separately state the credit on the electronic return. The net
659amount of tax due and payable must be remitted by electronic
660funds transfer. If the credit for the qualified expenditures is
661larger than the amount owed on the sales and use tax return, the
662amount of the credit may be carried forward to a succeeding
663reporting period. A dealer may only obtain a credit using the
664method described in this subparagraph. A dealer is not
665authorized to obtain a credit by applying for a refund.
666     Section 8.  Section 288.1255, Florida Statutes, is
667repealed.
668     Section 9.  If any provision of this act or the application
669thereof to any person or circumstance is held invalid, the
670invalidity shall not affect other provisions or applications of
671the act which can be given effect without the invalid provision
672or application, and to this end the provisions of this act are
673declared severable.
674     Section 10.  This act shall take effect July 1, 2007.


CODING: Words stricken are deletions; words underlined are additions.