HB 1237

1	A bill to be entitled
2	An act relating to the corporate income tax; providing
3	legislative findings and intent; amending s. 220.03, F.S.;
4	revising definitions; providing additional definitions;
5	amending s. 220.13, F.S.; revising the definition of the
6	term "adjusted federal income"; prohibiting certain
7	deductibles for certain water's edge group members;
8	providing an additional subtraction from adjusted federal
9	income; creating s. 220.136, F.S.; defining the term
10	"water's edge group reporting method"; requiring water's
11	edge group members to use a certain group income reporting
12	method; providing methodology requirements; providing
13	return filing requirements; requiring domestic disclosure
14	spreadsheet filing requirements; providing a definition;
15	authorizing the Department of Revenue to adopt rules and
16	forms; amending ss. 220.14, 220.15, 220.183, 220.1845,
17	220.187, 220.19, 220.191, 220.192, 220.193, 220.51, and
18	220.64, F.S.; replacing or deleting provisions relating to
19	consolidated returns for affiliated groups to conform to
20	water's edge group requirements; amending s. 376.30781,
21	F.S.; conforming a cross-reference; providing for
22	transitional rules; repealing s. 220.131, F.S., relating
23	to consolidated returns for affiliated groups; providing
24	appropriations; providing an effective date.
25
26	Be It Enacted by the Legislature of the State of Florida:
27
28	Section 1.  Legislative finding; intent.--The Legislature
29	finds that a separate accounting system for corporations is
30	sometimes inadequate to accurately measure the income of
31	multinational and multistate corporations doing business in this
32	state and this may create tax disadvantages for corporations in
33	this state in competition with those multinational and
34	multistate corporations. Corporate business is increasingly
35	conducted through groups of commonly owned corporations, it is
36	the intent of the Legislature to adopt a combined system of
37	income tax reporting for corporations to more accurately measure
38	the business activities of corporations.
39	Section 2.  Paragraphs (y) and (z) of subsection (1) of
40	section 220.03, Florida Statutes, are amended, and paragraphs
41	(gg) and (hh) are added to that subsection, to read:
42	220.03  Definitions.--
43	(1)  SPECIFIC TERMS.--When used in this code, and when not
44	otherwise distinctly expressed or manifestly incompatible with
45	the intent thereof, the following terms shall have the following
46	meanings:
47	(y)  "Taxable year" or "tax year" means the calendar or
48	fiscal year upon the basis of which net income is computed under
49	this code, including, in the case of a return made for a
50	fractional part of a year, the period for which such return is
51	made.
52	(z)  "Taxpayer" means any corporation subject to the tax
53	imposed by this code, and includes all corporations that are
54	members of a water's edge group for which a consolidated return
55	is filed under s. 220.131. However, "taxpayer" does not include
56	a corporation having no individuals (including individuals
57	employed by an affiliate) receiving compensation in this state
58	as defined in s. 220.15 when the only property owned or leased
59	by said corporation (including an affiliate) in this state is
60	located at the premises of a printer with which it has
61	contracted for printing, if such property consists of the final
62	printed product, property which becomes a part of the final
63	printed product, or property from which the printed product is
64	produced.
65	(gg)  "Tax haven" means a jurisdiction that, for a
66	particular tax year in question, is identified by the
67	Organization for Economic Co-operation and Development as a tax
68	haven or as having a harmful preferential tax regime or a
69	jurisdiction that has no, or a nominal, effective tax on
70	relevant income and:
71	1.  Has laws or practices that prevent effective exchange
72	of information for tax purposes with other governments regarding
73	taxpayers subject to, or benefiting from, the tax regime;
74	2.  Lacks transparency. For purposes of this subparagraph,
75	a tax regime lacks transparency if the details of legislative,
76	legal, or administrative provisions are not open to public
77	scrutiny and apparent, or are not consistently applied among
78	similarly situated taxpayers;
79	3.  Facilitates the establishment of foreign-owned entities
80	without the need for a local substantive presence or prohibits
81	these entities from having any commercial impact on the local
82	economy;
83	4.  Explicitly or implicitly excludes the jurisdiction's
84	resident taxpayers from taking advantage of the tax regime's
85	benefits or prohibits enterprises that benefit from the regime
86	from operating in the jurisdiction's domestic market; or
87	5.  Has created a tax regime which is favorable for tax
88	avoidance, based upon an overall assessment of relevant factors,
89	including, but not limited to, whether the jurisdiction has a
90	significant untaxed offshore financial or other services sector
91	relative to its overall economy.
92
93	For purposes of this paragraph, the term "tax regime" means a
94	set or system of rules, laws, regulations, or practices by which
95	taxes are imposed on any person, corporation, or entity or on
96	any income, property, incident, indicia, or activity pursuant to
97	governmental authority.
98	(hh)  "Water's edge group" means a group of corporations
99	related through common ownership the business activities of
100	which are integrated with, dependent upon, or contribute to a
101	flow of value among members of the group. When 50 percent or
102	more of the outstanding voting stock of a corporation is under
103	direct or indirect ownership or control of such a group, the
104	corporation shall be considered to be part of a water's edge
105	group. A corporation shall be considered unitary unless clearly
106	shown by the facts and circumstances of the individual case to
107	not be a member of a water's edge group. When direct or indirect
108	ownership or control is less than 50 percent of the outstanding
109	voting stock, all elements of the business activities shall be
110	considered in determining whether a corporation qualifies as a
111	member of a water's edge group. A water's edge group shall not
112	include the income of any corporation which conducts business
113	outside the United States if 80 percent or more of the
114	corporation's property and payroll, as determined by the
115	apportionment factors described in ss. 220.15 and 220.151, is
116	assignable to locations outside the United States. In
117	determining whether voting stock is owned indirectly, the
118	attribution rules of s. 318 of the Internal Revenue Code of
119	1986, as amended, shall be used. For purposes of this paragraph,
120	the term "United States" is restricted to the states of the
121	United States, the District of Columbia, and the Commonwealth of
122	Puerto Rico. All income of a water's edge group is presumed to
123	be apportionable business income. A taxpayer has the burden of
124	proof regarding the issue of whether or not a corporation is a
125	member of a water's edge group and whether or not such income is
126	apportionable business income.
127	Section 3.  Subsection (1) of section 220.13, Florida
128	Statutes, is amended to read:
129	220.13  "Adjusted federal income" defined.--
130	(1)  The term "adjusted federal income" means an amount
131	equal to the taxpayer's taxable income as defined in subsection
132	(2), or such taxable income of more than one taxpayer as
133	provided in s. 220.136 220.131, for the taxable year, adjusted
134	as follows:
135	(a)  Additions.--There shall be added to such taxable
136	income:
137	1.  The amount of any tax upon or measured by income,
138	excluding taxes based on gross receipts or revenues, paid or
139	accrued as a liability to the District of Columbia or any state
140	of the United States which is deductible from gross income in
141	the computation of taxable income for the taxable year.
142	2.  The amount of interest which is excluded from taxable
143	income under s. 103(a) of the Internal Revenue Code or any other
144	federal law, less the associated expenses disallowed in the
145	computation of taxable income under s. 265 of the Internal
146	Revenue Code or any other law, excluding 60 percent of any
147	amounts included in alternative minimum taxable income, as
148	defined in s. 55(b)(2) of the Internal Revenue Code, if the
149	taxpayer pays tax under s. 220.11(3).
150	3.  In the case of a regulated investment company or real
151	estate investment trust, an amount equal to the excess of the
152	net long-term capital gain for the taxable year over the amount
153	of the capital gain dividends attributable to the taxable year.
154	4.  That portion of the wages or salaries paid or incurred
155	for the taxable year which is equal to the amount of the credit
156	allowable for the taxable year under s. 220.181. This
157	subparagraph shall expire on the date specified in s. 290.016
158	for the expiration of the Florida Enterprise Zone Act.
159	5.  That portion of the ad valorem school taxes paid or
160	incurred for the taxable year which is equal to the amount of
161	the credit allowable for the taxable year under s. 220.182. This
162	subparagraph shall expire on the date specified in s. 290.016
163	for the expiration of the Florida Enterprise Zone Act.
164	6.  The amount of emergency excise tax paid or accrued as a
165	liability to this state under chapter 221 which tax is
166	deductible from gross income in the computation of taxable
167	income for the taxable year.
168	7.  That portion of assessments to fund a guaranty
169	association incurred for the taxable year which is equal to the
170	amount of the credit allowable for the taxable year.
171	8.  In the case of a nonprofit corporation which holds a
172	pari-mutuel permit and which is exempt from federal income tax
173	as a farmers' cooperative, an amount equal to the excess of the
174	gross income attributable to the pari-mutuel operations over the
175	attributable expenses for the taxable year.
176	9.  The amount taken as a credit for the taxable year under
177	s. 220.1895.
178	10.  Up to nine percent of the eligible basis of any
179	designated project which is equal to the credit allowable for
180	the taxable year under s. 220.185.
181	11.  The amount taken as a credit for the taxable year
182	under s. 220.187.
183	12.  The amount taken as a credit for the taxable year
184	under s. 220.192.
185	13.  The amount taken as a credit for the taxable year
186	under s. 220.193.
187	(b)  Subtractions.--
188	1.  There shall be subtracted from such taxable income:
189	a.  The net operating loss deduction allowable for federal
190	income tax purposes under s. 172 of the Internal Revenue Code
191	for the taxable year,
192	b.  The net capital loss allowable for federal income tax
193	purposes under s. 1212 of the Internal Revenue Code for the
194	taxable year,
195	c.  The excess charitable contribution deduction allowable
196	for federal income tax purposes under s. 170(d)(2) of the
197	Internal Revenue Code for the taxable year, and
198	d.  The excess contributions deductions allowable for
199	federal income tax purposes under s. 404 of the Internal Revenue
200	Code for the taxable year.
201
202	However, a net operating loss and a capital loss shall never be
203	carried back as a deduction to a prior taxable year, but all
204	deductions attributable to such losses shall be deemed net
205	operating loss carryovers and capital loss carryovers,
206	respectively, and treated in the same manner, to the same
207	extent, and for the same time periods as are prescribed for such
208	carryovers in ss. 172 and 1212, respectively, of the Internal
209	Revenue Code. A deductible may not be allowed for net operating
210	losses, net capital losses, or excess contribution deductions
211	under ss. 170(d)(2), 172, 1212, and 404 of the Internal Revenue
212	Code of 1986, as amended, for a member of a water's edge group
213	that is not United States member.
214	2.  There shall be subtracted from such taxable income any
215	amount to the extent included therein the following:
216	a.  Dividends treated as received from sources without the
217	United States, as determined under s. 862 of the Internal
218	Revenue Code.
219	b.  All amounts included in taxable income under s. 78 or
220	s. 951 of the Internal Revenue Code.
221
222	However, as to any amount subtracted under this subparagraph,
223	there shall be added to such taxable income all expenses
224	deducted on the taxpayer's return for the taxable year which are
225	attributable, directly or indirectly, to such subtracted amount.
226	Further, no amount shall be subtracted with respect to dividends
227	paid or deemed paid by a Domestic International Sales
228	Corporation.
229	3.  In computing "adjusted federal income" for taxable
230	years beginning after December 31, 1976, there shall be allowed
231	as a deduction the amount of wages and salaries paid or incurred
232	within this state for the taxable year for which no deduction is
233	allowed pursuant to s. 280C(a) of the Internal Revenue Code
234	(relating to credit for employment of certain new employees).
235	4.  There shall be subtracted from such taxable income any
236	amount of nonbusiness income included therein.
237	5.  There shall be subtracted any amount of taxes of
238	foreign countries allowable as credits for taxable years
239	beginning on or after September 1, 1985, under s. 901 of the
240	Internal Revenue Code to any corporation which derived less than
241	20 percent of its gross income or loss for its taxable year
242	ended in 1984 from sources within the United States, as
243	described in s. 861(a)(2)(A) of the Internal Revenue Code, not
244	including credits allowed under ss. 902 and 960 of the Internal
245	Revenue Code, withholding taxes on dividends within the meaning
246	of sub-subparagraph 2.a., and withholding taxes on royalties,
247	interest, technical service fees, and capital gains.
248	6.  There shall be subtracted from such taxable income, to
249	the extent included in such taxable income, amounts received by
250	a member of a water's edge group that was a dividend paid by
251	another member of the same water's edge group.
252	7.6.  Notwithstanding any other provision of this code,
253	except with respect to amounts subtracted pursuant to
254	subparagraphs 1. and 3., any increment of any apportionment
255	factor which is directly related to an increment of gross
256	receipts or income which is deducted, subtracted, or otherwise
257	excluded in determining adjusted federal income shall be
258	excluded from both the numerator and denominator of such
259	apportionment factor. Further, all valuations made for
260	apportionment factor purposes shall be made on a basis
261	consistent with the taxpayer's method of accounting for federal
262	income tax purposes.
263	(c)  Installment sales occurring after October 19, 1980.--
264	1.  In the case of any disposition made after October 19,
265	1980, the income from an installment sale shall be taken into
266	account for the purposes of this code in the same manner that
267	such income is taken into account for federal income tax
268	purposes.
269	2.  Any taxpayer who regularly sells or otherwise disposes
270	of personal property on the installment plan and reports the
271	income therefrom on the installment method for federal income
272	tax purposes under s. 453(a) of the Internal Revenue Code shall
273	report such income in the same manner under this code.
274	(d)  Nonallowable deductions.--A deduction for net
275	operating losses, net capital losses, or excess contributions
276	deductions under ss. 170(d)(2), 172, 1212, and 404 of the
277	Internal Revenue Code which has been allowed in a prior taxable
278	year for Florida tax purposes shall not be allowed for Florida
279	tax purposes, notwithstanding the fact that such deduction has
280	not been fully utilized for federal tax purposes.
281	Section 4.  Section 220.136, Florida Statutes, is created
282	to read:
283	220.136  Water's edge groups; special reporting
284	requirements.--
285	(1)  For purposes of this section, the term "water's edge
286	group reporting method" means the determination of taxable
287	business profits for a group of entities conducting a unitary
288	business by adding combined net income and the additions and
289	deductions provided in s. 220.13 for members of the group and
290	apportioning the results as provided in ss. 220.15 and 220.151.
291	(2)  All members of a water's edge group shall use the
292	water's edge group reporting method. Under the water's edge
293	group reporting method:
294	(a)  Adjusted federal income for purposes of s. 220.12
295	means the sum of adjusted federal income for all members of the
296	group determined for a concurrent taxable year.
297	(b)  The denominators of the apportionment factors shall be
298	calculated for all members of the water's edge group combined.
299	(c)  The statutory apportionment formula shall be used for
300	all members of the water's edge group, unless an alternate
301	method is determined to be more appropriate by the department.
302	(d)  Intercompany sales transactions made between members
303	of the water's edge group shall be eliminated in the computation
304	of the sales factor pursuant to ss. 220.15 and 220.151. As used
305	in this subsection, the term "sales" includes, but is not
306	limited to, loans, payments for the use of intangibles,
307	dividends, and management fees.
308	(e)  Each taxpayer shall apportion adjusted federal income
309	under s. 220.15 as a member of a water's edge group that files a
310	water's edge group return under this section based upon the
311	apportionment factors described in s. 220.15. For purposes of
312	this subsection, each special industry member included in a
313	water's edge group filing a water's edge group return under this
314	section, which would otherwise be permitted to use a special
315	method of apportionment under s. 220.151, shall construct the
316	numerator of its sales, property, and payroll factors,
317	respectively, by multiplying the denominator of each such factor
318	by the premiums or revenue miles factor ratio otherwise
319	applicable pursuant to s. 220.151 in the manner prescribed by
320	the department by rule.
321	(f)  For purposes of this subsection, each special industry
322	member included in a water's edge group return, which member
323	would otherwise be permitted to use a special method of
324	apportionment under s. 220.151, shall construct the numerator of
325	its sales, property, and payroll factors, respectively, by
326	multiplying the denominator of each such factor by the premiums
327	or revenue miles factor ratio otherwise applicable pursuant to
328	s. 220.151 in the manner prescribed by the department by rule.
329	(g)  The income attributable to the activities in this
330	state of a corporation exempt from taxation because of Pub. L.
331	No. 86-272 is excluded from the sales factor numerator on a
332	water's edge group filing a combined water's edge group return
333	even though an affiliated corporation may have nexus with this
334	state and is subject to tax in this state.
335	(3)(a)  The single water's edge group return must be filed
336	in the name and with the federal employer identification number
337	of the parent corporation if the parent is a member of a water's
338	edge group and has nexus with this state. If there is no parent
339	corporation, if the parent is not a water's edge group member,
340	or if the parent does not have nexus with this state, the
341	members of the water's edge group shall choose a Florida
342	taxpayer member to file the return. After such a filing member
343	has been selected, such member must remain the same in
344	subsequent years unless an ownership change occurs or the filing
345	member no longer has nexus with this state. The return must be
346	signed by a responsible officer of the filing member as the
347	agent of all members of the water's edge group subject to tax by
348	this state.
349	(b)  If the taxable years of the members of the water's
350	edge group differ, the filing member's taxable year must be used
351	to determine the net income for this state of the water's edge
352	group. If the precise amount of a water's edge group member's
353	income can be readily determined from the books for the months
354	involved in the filing member's taxable year, those actual
355	amounts shall be used. In the absence of such a precise
356	determination, the income of a water's edge group member must be
357	converted to conform to the taxable year of the filing member on
358	the basis of the number of months falling within the applicable
359	taxable year. This method may be used only if the return can be
360	timely filed after the member's taxable year ends. As an
361	alternative, the water's edge group may include in its taxable
362	income all of the taxable income of a group member whose taxable
363	year ends within the taxable year of the water's edge group.
364	Once one of these methods is used for a water's edge group
365	member, that member must continue to use that method for
366	succeeding years for as long as the corporation remains a member
367	of the water's edge group. After the combined taxable income of
368	the water's edge group is determined based upon the filing
369	member's taxable year, the apportionment factor must be computed
370	on the basis of the same taxable year.
371	(4)  A water's edge group shall file a domestic disclosure
372	spreadsheet in the manner and form prescribed by rule by the
373	department. The term "domestic disclosure spreadsheet" means a
374	spreadsheet that fully discloses the income reported to each
375	state, the state tax liability, the method used for apportioning
376	or allocating income to the various states, and other
377	information provided for by rule as may be necessary to
378	determine the proper amount of tax due to each state and to
379	identify the water's edge group.
380	(5)  The department may adopt rules and forms by rule as
381	may be necessary or appropriate to administer and implement this
382	section. It is the intent of the Legislature, by this section,
383	to grant the department extensive authority to adopt rules and
384	forms describing and defining principles for determining the
385	existence of a water's edge group business, definitions of
386	common control, and methods of reporting and related forms,
387	principles, and definitions.
388	Section 5.  Subsection (3) of section 220.14, Florida
389	Statutes, is amended to read:
390	220.14  Exemption.--
391	(3)  Only one exemption shall be allowed to taxpayers
392	filing a combined water's edge group consolidated return under
393	this code.
394	Section 6.  Paragraph (c) of subsection (5) of section
395	220.15, Florida Statutes, is amended to read:
396	220.15  Apportionment of adjusted federal income.--
397	(5)  The sales factor is a fraction the numerator of which
398	is the total sales of the taxpayer in this state during the
399	taxable year or period and the denominator of which is the total
400	sales of the taxpayer everywhere during the taxable year or
401	period.
402	(c)  Sales of a financial organization, including, but not
403	limited to, banking and savings institutions, investment
404	companies, real estate investment trusts, and brokerage
405	companies, occur in this state if derived from:
406	1.  Fees, commissions, or other compensation for financial
407	services rendered within this state;
408	2.  Gross profits from trading in stocks, bonds, or other
409	securities managed within this state;
410	3.  Interest received within this state, other than
411	interest from loans secured by mortgages, deeds of trust, or
412	other liens upon real or tangible personal property located
413	without this state, and dividends received within this state;
414	4.  Interest charged to customers at places of business
415	maintained within this state for carrying debit balances of
416	margin accounts, without deduction of any costs incurred in
417	carrying such accounts;
418	5.  Interest, fees, commissions, or other charges or gains
419	from loans secured by mortgages, deeds of trust, or other liens
420	upon real or tangible personal property located in this state or
421	from installment sale agreements originally executed by a
422	taxpayer or the taxpayer's agent to sell real or tangible
423	personal property located in this state;
424	6.  Rents from real or tangible personal property located
425	in this state; or
426	7.  Any other gross income, including other interest,
427	resulting from the operation as a financial organization within
428	this state.
429
430	In computing the amounts under this paragraph, any amount
431	received by a member of an affiliated group (determined under s.
432	1504(a) of the Internal Revenue Code, but without reference to
433	whether any such corporation is an "includable corporation"
434	under s. 1504(b) of the Internal Revenue Code) from another
435	member of such group shall be included only to the extent such
436	amount exceeds expenses of the recipient directly related
437	thereto.
438	Section 7.  Paragraphs (f) and (g) of subsection (1) of
439	section 220.183, Florida Statutes, are amended to read:
440	220.183  Community contribution tax credit.--
441	(1)  AUTHORIZATION TO GRANT COMMUNITY CONTRIBUTION TAX
442	CREDITS; LIMITATIONS ON INDIVIDUAL CREDITS AND PROGRAM
443	SPENDING.--
444	(f)  A taxpayer who files a Florida consolidated return as
445	a member of an affiliated group pursuant to s. 220.131(1) may be
446	allowed the credit on a consolidated return basis.
447	(f)(g)  A taxpayer who is eligible to receive the credit
448	provided for in s. 624.5105 is not eligible to receive the
449	credit provided by this section.
450	Section 8.  Subsection (1) of section 220.1845, Florida
451	Statutes, is amended to read:
452	220.1845  Contaminated site rehabilitation tax credit.--
453	(1)  AUTHORIZATION FOR TAX CREDIT; LIMITATIONS.--
454	(a)  A credit in the amount of 50 percent of the costs of
455	voluntary cleanup activity that is integral to site
456	rehabilitation at the following sites is available against any
457	tax due for a taxable year under this chapter:
458	1.  A drycleaning-solvent-contaminated site eligible for
459	state-funded site rehabilitation under s. 376.3078(3);
460	2.  A drycleaning-solvent-contaminated site at which
461	cleanup is undertaken by the real property owner pursuant to s.
462	376.3078(11), if the real property owner is not also, and has
463	never been, the owner or operator of the drycleaning facility
464	where the contamination exists; or
465	3.  A brownfield site in a designated brownfield area under
466	s. 376.80.
467	(b)  A tax credit applicant, or multiple tax credit
468	applicants working jointly to clean up a single site, may not be
469	granted more than $500,000 per year in tax credits for each site
470	voluntarily rehabilitated. Multiple tax credit applicants shall
471	be granted tax credits in the same proportion as their
472	contribution to payment of cleanup costs. Subject to the same
473	conditions and limitations as provided in this section, a
474	municipality, county, or other tax credit applicant which
475	voluntarily rehabilitates a site may receive not more than
476	$500,000 per year in tax credits which it can subsequently
477	transfer subject to the provisions in paragraph (f) (g).
478	(c)  If the credit granted under this section is not fully
479	used in any one year because of insufficient tax liability on
480	the part of the corporation, the unused amount may be carried
481	forward for a period not to exceed 5 years. The carryover credit
482	may be used in a subsequent year when the tax imposed by this
483	chapter for that year exceeds the credit for which the
484	corporation is eligible in that year under this section after
485	applying the other credits and unused carryovers in the order
486	provided by s. 220.02(8). Five years after the date a credit is
487	granted under this section, such credit expires and may not be
488	used. However, if during the 5-year period the credit is
489	transferred, in whole or in part, pursuant to paragraph (f) (g),
490	each transferee has 5 years after the date of transfer to use
491	its credit.
492	(d)  A taxpayer that files a consolidated return in this
493	state as a member of an affiliated group under s. 220.131(1) may
494	be allowed the credit on a consolidated return basis up to the
495	amount of tax imposed upon the consolidated group.
496	(d)(e)  A tax credit applicant that receives state-funded
497	site rehabilitation under s. 376.3078(3) for rehabilitation of a
498	drycleaning-solvent-contaminated site is ineligible to receive
499	credit under this section for costs incurred by the tax credit
500	applicant in conjunction with the rehabilitation of that site
501	during the same time period that state-administered site
502	rehabilitation was underway.
503	(e)(f)  The total amount of the tax credits which may be
504	granted under this section is $2 million annually.
505	(f)(g)1.  Tax credits that may be available under this
506	section to an entity eligible under s. 376.30781 may be
507	transferred after a merger or acquisition to the surviving or
508	acquiring entity and used in the same manner and with the same
509	limitations.
510	2.  The entity or its surviving or acquiring entity as
511	described in subparagraph 1., may transfer any unused credit in
512	whole or in units of no less than 25 percent of the remaining
513	credit. The entity acquiring such credit may use it in the same
514	manner and with the same limitation as described in this
515	section. Such transferred credits may not be transferred again
516	although they may succeed to a surviving or acquiring entity
517	subject to the same conditions and limitations as described in
518	this section.
519	3.  In the event the credit provided for under this section
520	is reduced either as a result of a determination by the
521	Department of Environmental Protection or an examination or
522	audit by the Department of Revenue, such tax deficiency shall be
523	recovered from the first entity, or the surviving or acquiring
524	entity, to have claimed such credit up to the amount of credit
525	taken. Any subsequent deficiencies shall be assessed against any
526	entity acquiring and claiming such credit, or in the case of
527	multiple succeeding entities in the order of credit succession.
528	(g)(h)  In order to encourage completion of site
529	rehabilitation at contaminated sites being voluntarily cleaned
530	up and eligible for a tax credit under this section, the tax
531	credit applicant may claim an additional 25 percent of the total
532	cleanup costs, not to exceed $500,000, in the final year of
533	cleanup as evidenced by the Department of Environmental
534	Protection issuing a "No Further Action" order for that site.
535	Section 9.  Paragraphs (c) and (d) of subsection (5) of
536	section 220.187, Florida Statutes, are amended to read:
537	220.187  Credits for contributions to nonprofit
538	scholarship-funding organizations.--
539	(5)  AUTHORIZATION TO GRANT SCHOLARSHIP FUNDING TAX
540	CREDITS; LIMITATIONS ON INDIVIDUAL AND TOTAL CREDITS.--
541	(c)  A taxpayer who files a Florida consolidated return as
542	a member of an affiliated group pursuant to s. 220.131(1) may be
543	allowed the credit on a consolidated return basis; however, the
544	total credit taken by the affiliated group is subject to the
545	limitation established under paragraph (a).
546	(c)(d)  Effective for tax years beginning January 1, 2006,
547	a taxpayer may rescind all or part of its allocated tax credit
548	under this section. The amount rescinded shall become available
549	for purposes of the cap for that state fiscal year under this
550	section to an eligible taxpayer as approved by the department if
551	the taxpayer receives notice from the department that the
552	rescindment has been accepted by the department and the taxpayer
553	has not previously rescinded any or all of its tax credit
554	allocation under this section more than once in the previous 3
555	tax years. Any amount rescinded under this paragraph shall
556	become available to an eligible taxpayer on a first-come, first-
557	served basis based on tax credit applications received after the
558	date the rescindment is accepted by the department.
559	Section 10.  Paragraphs (g) and (h) of subsection (1) of
560	section 220.19, Florida Statutes, are amended to read:
561	220.19  Child care tax credits.--
562	(1)  AUTHORIZATION TO GRANT TAX CREDITS; LIMITATIONS.--
563	(g)  A taxpayer that files a consolidated return in this
564	state as a member of an affiliated group under s. 220.131(1) may
565	be allowed the credit on a consolidated return basis.
566	(g)(h)  A taxpayer that is eligible to receive credit under
567	s. 624.5107 is ineligible to receive credit under this section.
568	Section 11.  Paragraph (c) of subsection (3) of section
569	220.191, Florida Statutes, is amended to read:
570	220.191  Capital investment tax credit.--
571	(3)
572	(c)  The credit granted under this subsection may be used
573	in whole or in part by the qualifying business or any
574	corporation that is either a member of that qualifying
575	business's affiliated group of corporations, is a related entity
576	taxable as a cooperative under subchapter T of the Internal
577	Revenue Code, or, if the qualifying business is an entity
578	taxable as a cooperative under subchapter T of the Internal
579	Revenue Code, is related to the qualifying business. Any entity
580	related to the qualifying business may continue to file as a
581	member of a Florida-nexus consolidated group pursuant to a prior
582	election made under s. 220.131(1), Florida Statutes (1985), even
583	if the parent of the group changes due to a direct or indirect
584	acquisition of the former common parent of the group. Any credit
585	can be used by any of the affiliated companies or related
586	entities referenced in this paragraph to the same extent as it
587	could have been used by the qualifying business. However, any
588	such use shall not operate to increase the amount of the credit
589	or extend the period within which the credit must be used.
590	Section 12.  Subsection (2) of section 220.192, Florida
591	Statutes, is amended to read:
592	220.192  Renewable energy technologies investment tax
593	credit.--
594	(2)  TAX CREDIT.--For tax years beginning on or after
595	January 1, 2007, a credit against the tax imposed by this
596	chapter shall be granted in an amount equal to the eligible
597	costs. Credits may be used in tax years beginning January 1,
598	2007, and ending December 31, 2010, after which the credit shall
599	expire. If the credit is not fully used in any one tax year
600	because of insufficient tax liability on the part of the
601	corporation, the unused amount may be carried forward and used
602	in tax years beginning January 1, 2007, and ending December 31,
603	2012, after which the credit carryover expires and may not be
604	used. A taxpayer that files a consolidated return in this state
605	as a member of an affiliated group under s. 220.131(1) may be
606	allowed the credit on a consolidated return basis up to the
607	amount of tax imposed upon the consolidated group. Any eligible
608	cost for which a credit is claimed and which is deducted or
609	otherwise reduces federal taxable income shall be added back in
610	computing adjusted federal income under s. 220.13.
611	Section 13.  Paragraphs (e), (f), (g), (h), and (i) of
612	subsection (3) of section 220.193, Florida Statutes, are amended
613	to read:
614	220.193  Florida renewable energy production credit.--
615	(3)  An annual credit against the tax imposed by this
616	section shall be allowed to a taxpayer, based on the taxpayer's
617	production and sale of electricity from a new or expanded
618	Florida renewable energy facility. For a new facility, the
619	credit shall be based on the taxpayer's sale of the facility's
620	entire electrical production. For an expanded facility, the
621	credit shall be based on the increases in the facility's
622	electrical production that are achieved after May 1, 2006.
623	(e)  A taxpayer that files a consolidated return in this
624	state as a member of an affiliated group under s. 220.131(1) may
625	be allowed the credit on a consolidated return basis up to the
626	amount of tax imposed upon the consolidated group.
627	(e)(f)1.  Tax credits that may be available under this
628	section to an entity eligible under this section may be
629	transferred after a merger or acquisition to the surviving or
630	acquiring entity and used in the same manner with the same
631	limitations.
632	2.  The entity or its surviving or acquiring entity as
633	described in subparagraph 1. may transfer any unused credit in
634	whole or in units of no less than 25 percent of the remaining
635	credit. The entity acquiring such credit may use it in the same
636	manner and with the same limitations under this section. Such
637	transferred credits may not be transferred again although they
638	may succeed to a surviving or acquiring entity subject to the
639	same conditions and limitations as described in this section.
640	3.  In the event the credit provided for under this section
641	is reduced as a result of an examination or audit by the
642	department, such tax deficiency shall be recovered from the
643	first entity or the surviving or acquiring entity to have
644	claimed such credit up to the amount of credit taken. Any
645	subsequent deficiencies shall be assessed against any entity
646	acquiring and claiming such credit, or in the case of multiple
647	succeeding entities in the order of credit succession.
648	(f)(g)  Notwithstanding any other provision of this
649	section, credits for the production and sale of electricity from
650	a new or expanded Florida renewable energy facility may be
651	earned between January 1, 2007 and June 30, 2010. The combined
652	total amount of tax credits which may be granted for all
653	taxpayers under this section is limited to $5 million per state
654	fiscal year.
655	(g)(h)  A taxpayer claiming a credit under this section
656	shall be required to add back to net income that portion of its
657	business deductions claimed on its federal return paid or
658	incurred for the taxable year which is equal to the amount of
659	the credit allowable for the taxable year under this section.
660	(h)(i)  A taxpayer claiming credit under this section may
661	not claim a credit under s. 220.192. A taxpayer claiming credit
662	under s. 220.192 may not claim a credit under this section.
663	Section 14.  Section 220.51, Florida Statutes, is amended
664	to read:
665	220.51  Promulgation of rules and regulations.--In
666	accordance with the Administrative Procedure Act, chapter 120,
667	the department is authorized to make, promulgate, and enforce
668	such reasonable rules and regulations, and to prescribe such
669	forms relating to the administration and enforcement of the
670	provisions of this code, as it may deem appropriate, including:
671	(1)  Rules for initial implementation of this code and for
672	taxpayers' transitional taxable years commencing before and
673	ending after January 1, 1972.;
674	(2)  Rules or regulations to clarify whether certain
675	groups, organizations, or associations formed under the laws of
676	this state or any other state, country, or jurisdiction shall be
677	deemed "taxpayers" for the purposes of this code, in accordance
678	with the legislative declarations of intent in s. 220.02.; and
679	(3)  Regulations relating to consolidated reporting for
680	affiliated groups of corporations, in order to provide for an
681	equitable and just administration of this code with respect to
682	multicorporate taxpayers.
683	Section 15.  Section 220.64, Florida Statutes, is amended
684	to read:
685	220.64  Other provisions applicable to franchise tax.--To
686	the extent that they are not manifestly incompatible with the
687	provisions of this part, parts I, III, IV, V, VI, VIII, IX, and
688	X of this code and ss. 220.12, 220.13, 220.136, 220.15, and
689	220.16 apply to the franchise tax imposed by this part. Under
690	rules prescribed in s. 220.131, a consolidated return may be
691	filed by any affiliated group of corporations composed of one or
692	more banks or savings associations, its or their Florida parent
693	corporation, and any nonbank or nonsavings subsidiaries of such
694	parent corporation.
695	Section 16.  Subsection (9) of section 376.30781, Florida
696	Statutes, is amended to read:
697	376.30781  Partial tax credits for rehabilitation of
698	drycleaning-solvent-contaminated sites and brownfield sites in
699	designated brownfield areas; application process; rulemaking
700	authority; revocation authority.--
701	(9)  On or before March 31, the Department of Environmental
702	Protection shall inform each eligible tax credit applicant of
703	the amount of its partial tax credit and provide each eligible
704	tax credit applicant with a tax credit certificate that must be
705	submitted with its tax return to the Department of Revenue to
706	claim the tax credit or be transferred pursuant to s.
707	220.1845(1)(g)(h). Credits will not result in the payment of
708	refunds if total credits exceed the amount of tax owed.
709	Section 17.  Transition rules.--
710	(1)  For the first taxable year beginning on or after
711	January 1, 2009, a taxpayer that filed a Florida return for the
712	preceding taxable year and is a member of a water's edge group
713	shall compute its income together with all members of the
714	water's edge group and file a separate corporate income tax
715	return or may elect to combine its tax return with all members
716	of the water's edge group.
717	(2)  An affiliated group of corporations that filed a
718	Florida consolidated return pursuant to an election provided in
719	former s. 220.131, Florida Statutes, shall cease filing a
720	Florida consolidated return for taxable years beginning on or
721	after January 1, 2009, and shall file water's edge group returns
722	or may elect to file a combined water's edge group return.
723	(3)  An affiliated group of corporations that filed a
724	Florida consolidated return pursuant to the election provided in
725	s. 220.131(1), Florida Statutes (1985), that allowed the
726	affiliated group to make an election with 90 days after December
727	20, 1984, or upon filing the taxpayer's first return after
728	December 20, 1984, whichever occurred later, shall cease filing
729	a Florida consolidated return using that method for taxable
730	years beginning on or after January 1, 2009, and shall file
731	water's edge group returns or may elect to file a combined
732	water's edge group return.
733	Section 18.  Section 220.131, Florida Statutes, is
734	repealed.
735	Section 19.  Of the funds recaptured by this act, the sum
736	of $50 million is appropriated from the General Revenue Fund to
737	the State University System for workforce education, to be
738	allocated by the Board of Governors; the sum of $50 million is
739	appropriated from the General Revenue Fund to community colleges
740	for workforce education, to be allocated by the State Board of
741	Education; and the remainder of such funds, as determined by the
742	Revenue Estimating Conference, shall be appropriated from the
743	General Revenue Fund to the various school districts to reduce
744	the required local effort, to be allocated as provided in the
745	General Appropriations Act.
746	Section 20.  This act shall take effect July 1, 2008.

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