HB 507

1	A bill to be entitled
2	An act relating to economic development; requiring the
3	Department of Economic Opportunity to designate a
4	director of manufacturing; providing responsibilities
5	for the director; amending s. 220.191, F.S., relating
6	to a tax credit program for capital investment by
7	certain qualifying businesses; removing the creation
8	or retention of jobs as a criteria for a qualified
9	project; requiring a capital investment of at least
10	$10 million as a criteria for a qualified project;
11	increasing the period authorized for a tax credit
12	under the program; creating a new category of annual
13	tax credit; providing additional annual credits for
14	sales taxes and ad valorem taxes paid by certain
15	qualifying businesses; providing tax credits for
16	qualifying businesses that are located out of state;
17	amending s. 288.106, F.S., relating to a tax refund
18	program for qualified target industry businesses;
19	providing legislative intent for the encouragement of
20	capital investment; providing that a capital
21	investment of a specified amount qualifies a target
22	industry business for the tax refund; creating s.
23	288.1084, F.S.; creating the Manufacturing Capital
24	Investment Tax Refund Program within the Department of
25	Economic Opportunity; providing legislative findings
26	and declarations; providing definitions; providing for
27	amounts of capital investments for certain
28	manufacturing businesses that are eligible for tax
29	refunds; providing for the application and approval
30	process for qualified projects; authorizing the
31	Division of Strategic Business Development in the
32	Department of Economic Opportunity to adopt rules;
33	providing an effective date.
34
35	Be It Enacted by the Legislature of the State of Florida:
36
37	Section 1.  The Department of Economic Opportunity shall
38	designate a director of manufacturing who shall:
39	(1)  Serve as the liaison between state, regional, and
40	local agencies and manufacturers expanding in or relocating to
41	the state;
42	(2)  Provide the manufacturers with permit applications for
43	all potential state and regional permits that are needed; and
44	(3)  Facilitate the dissemination of information to
45	manufacturers about opportunities available for expanding in or
46	locating to this state.
47	Section 2.  Section 220.191, Florida Statutes, is amended
48	to read:
49	220.191  Capital investment tax credit.-
50	(1)  DEFINITIONS.-For purposes of this section:
51	(a)  "Commencement of operations" means the beginning of
52	active operations by a qualifying business of the principal
53	function for which a qualifying project was constructed.
54	(b)  "Cumulative capital investment" means the total
55	capital investment in land, buildings, and equipment made in
56	connection with a qualifying project during the period from the
57	beginning of construction of the project to the commencement of
58	operations.
59	(c)  "Eligible capital costs" means all expenses incurred
60	by a qualifying business in connection with the acquisition,
61	construction, installation, and equipping of a qualifying
62	project during the period from the beginning of construction of
63	the project to the commencement of operations, including, but
64	not limited to:
65	1.  The costs of acquiring, constructing, installing,
66	equipping, and financing a qualifying project, including all
67	obligations incurred for labor and obligations to contractors,
68	subcontractors, builders, and materialmen.
69	2.  The costs of acquiring land or rights to land and any
70	cost incidental thereto, including recording fees.
71	3.  The costs of architectural and engineering services,
72	including test borings, surveys, estimates, plans and
73	specifications, preliminary investigations, environmental
74	mitigation, and supervision of construction, as well as the
75	performance of all duties required by or consequent to the
76	acquisition, construction, installation, and equipping of a
77	qualifying project.
78	4.  The costs associated with the installation of fixtures
79	and equipment; surveys, including archaeological and
80	environmental surveys; site tests and inspections; subsurface
81	site work and excavation; removal of structures, roadways, and
82	other surface obstructions; filling, grading, paving, and
83	provisions for drainage, storm water retention, and installation
84	of utilities, including water, sewer, sewage treatment, gas,
85	electricity, communications, and similar facilities; and offsite
86	construction of utility extensions to the boundaries of the
87	property.
88
89	Eligible capital costs do shall not include the cost of any
90	property previously owned or leased by the qualifying business.
91	(d)  "Income generated by or arising out of the qualifying
92	project" means the qualifying project's annual taxable income as
93	determined by generally accepted accounting principles and under
94	s. 220.13.
95	(e)  "Jobs" means full-time equivalent positions, as that
96	term is consistent with terms used by the Department of Economic
97	Opportunity and the United States Department of Labor for
98	purposes of unemployment tax administration and employment
99	estimation, resulting directly from a project in this state. The
100	term does not include temporary construction jobs involved in
101	the construction of the project facility.
102	(e)(f)  "Qualifying business" means a business that which
103	establishes a qualifying project in this state and that which is
104	certified by the Department of Economic Opportunity to receive
105	tax credits pursuant to this section.
106	(f)(g)  "Qualifying project" means a facility in this state
107	meeting one or more of the following criteria:
108	1.  A new or expanding facility in this state which is a
109	manufacturing facility or creates at least 100 new jobs in this
110	state and is in one of the high-impact sectors identified by
111	Enterprise Florida, Inc., and certified by the Department of
112	Economic Opportunity pursuant to s. 288.108(6), including, but
113	not limited to, aviation, aerospace, automotive, and silicon
114	technology industries. However, between July 1, 2011, and June
115	30, 2014, the requirement that a facility be in a high-impact
116	sector is waived for any otherwise eligible business from
117	another state which locates all or a portion of its business to
118	a Disproportionally Affected County. For purposes of this
119	section, the term "Disproportionally Affected County" means Bay
120	County, Escambia County, Franklin County, Gulf County, Okaloosa
121	County, Santa Rosa County, Walton County, or Wakulla County.
122	2.  A new or expanded facility in this state which is
123	engaged in manufacturing and makes a capital investment of at
124	least $10 million or a target industry designated pursuant to
125	the procedure specified in s. 288.106(2) and which makes is
126	induced by this credit to create or retain at least 1,000 jobs
127	in this state, provided that at least 100 of those jobs are new,
128	pay an annual average wage of at least 130 percent of the
129	average private sector wage in the area as defined in s.
130	288.106(2), and make a cumulative capital investment of at least
131	$100 million on or after July 1, 2012. Jobs may be considered
132	retained only if there is significant evidence that the loss of
133	jobs is imminent. Notwithstanding subsection (2), annual credits
134	against the tax imposed by this chapter may not exceed 50
135	percent of the increased annual corporate income tax liability
136	or the premium tax liability generated by or arising out of a
137	project qualifying under this subparagraph. A facility that
138	qualifies under this subparagraph for an annual credit against
139	the tax imposed by this chapter may take the tax credit for a
140	period not to exceed 10 5 years.
141	3.  A new or expanded headquarters facility in this state
142	which locates in an enterprise zone and brownfield area and is
143	induced by this credit to make create at least 1,500 jobs which
144	on average pay at least 200 percent of the statewide average
145	annual private sector wage, as published by the Department of
146	Economic Opportunity, and which new or expanded headquarters
147	facility makes a cumulative capital investment in this state of
148	at least $250 million.
149	(2)(a)  An annual credit against the tax imposed by this
150	chapter shall be granted to any qualifying business in an amount
151	equal to 5 percent of the eligible capital costs generated by a
152	qualifying project, for a period not to exceed 20 years
153	beginning with the commencement of operations of the project.
154	Unless assigned as described in this subsection, the tax credit
155	shall be granted against only the corporate income tax liability
156	or the premium tax liability generated by or arising out of the
157	qualifying project, and the sum of all tax credits provided
158	pursuant to this section may shall not exceed 100 percent of the
159	eligible capital costs of the project. A In no event may any
160	credit granted under this section may not be carried forward or
161	backward by any qualifying business with respect to a subsequent
162	or prior year. The annual tax credit granted under this section
163	may shall not exceed the following percentages of the annual
164	corporate income tax liability or the premium tax liability
165	generated by or arising out of a qualifying project:
166	1.  One hundred percent for a qualifying project that which
167	results in a cumulative capital investment of at least $100
168	million.
169	2.  Seventy-five percent for a qualifying project that
170	which results in a cumulative capital investment of at least $50
171	million but less than $100 million.
172	3.  Fifty percent for a qualifying project that which
173	results in a cumulative capital investment of at least $25
174	million but less than $50 million.
175	4.  Twenty-five percent for a qualifying project that
176	results in a cumulative capital investment of at least $25
177	million, but less than $10 million.
178	(b)  A qualifying project that which results in a
179	cumulative capital investment of less than $10 $25 million is
180	not eligible for the capital investment tax credit. An insurance
181	company claiming a credit against premium tax liability under
182	this program is shall not be required to pay any additional
183	retaliatory tax levied pursuant to s. 624.5091 as a result of
184	claiming such credit. Because credits under this section are
185	available to an insurance company, s. 624.5091 does not limit
186	such credit in any manner.
187	(c)  A qualifying business that establishes a qualifying
188	project that includes locating a new solar panel manufacturing
189	facility in this state that generates a minimum of 400 jobs
190	within 6 months after commencement of operations with an average
191	salary of at least $50,000 may assign or transfer the annual
192	credit, or any portion thereof, granted under this section to
193	any other business. However, the amount of the tax credit that
194	may be transferred in any year shall be the lesser of the
195	qualifying business's state corporate income tax liability for
196	that year, as limited by the percentages applicable under
197	paragraph (a) and as calculated prior to taking any credit
198	pursuant to this section, or the credit amount granted for that
199	year. A business receiving the transferred or assigned credits
200	may use the credits only in the year received, and the credits
201	may not be carried forward or backward. To perfect the transfer,
202	the transferor shall provide the department with a written
203	transfer statement notifying the department of the transferor's
204	intent to transfer the tax credits to the transferee; the date
205	the transfer is effective; the transferee's name, address, and
206	federal taxpayer identification number; the tax period; and the
207	amount of tax credits to be transferred. The department shall,
208	upon receipt of a transfer statement conforming to the
209	requirements of this paragraph, provide the transferee with a
210	certificate reflecting the tax credit amounts transferred. A
211	copy of the certificate must be attached to each tax return for
212	which the transferee seeks to apply such tax credits.
213	(d)  If the credit granted under subparagraph (a)1. is not
214	fully used in any one year because of insufficient tax liability
215	on the part of the qualifying business, the unused amounts may
216	be used in any one year or years beginning with the 21st year
217	after the commencement of operations of the project and ending
218	the 30th year after the commencement of operations of the
219	project.
220	(3)(a)  Notwithstanding subsection (2), An annual credit
221	against the tax imposed by this chapter or chapter 212 or ad
222	valorem taxes paid as defined in s. 220.03(1) shall be granted
223	to a qualifying business that which establishes a qualifying
224	project pursuant to subparagraph (1)(f)3. (1)(g)3., in an amount
225	equal to the lesser of $15 million or 5 percent of the eligible
226	capital costs made in connection with a qualifying project, for
227	a period not to exceed 20 years beginning with the commencement
228	of operations of the project. The tax credit shall be granted
229	against the corporate income tax liability of the qualifying
230	business and as further provided in paragraph (c). The total tax
231	credit provided pursuant to this subsection shall be equal to no
232	more than 100 percent of the eligible capital costs of the
233	qualifying project.
234	(b)  If the credit granted under this subsection is not
235	fully used in any one year because of insufficient tax liability
236	on the part of the qualifying business, the unused amount may be
237	carried forward for a period not to exceed 20 years after the
238	commencement of operations of the project. The carryover credit
239	may be used in a subsequent year when the tax imposed by this
240	chapter for that year exceeds the credit for which the
241	qualifying business is eligible in that year under this
242	subsection after applying the other credits and unused
243	carryovers in the order provided by s. 220.02(8).
244	(c)  The credit granted under this subsection may be used
245	in whole or in part by the qualifying business or any
246	corporation that is either a member of that qualifying
247	business's affiliated group of corporations, is a related entity
248	taxable as a cooperative under subchapter T of the Internal
249	Revenue Code, or, if the qualifying business is an entity
250	taxable as a cooperative under subchapter T of the Internal
251	Revenue Code, is related to the qualifying business. Any entity
252	related to the qualifying business may continue to file as a
253	member of a Florida-nexus consolidated group pursuant to a prior
254	election made under s. 220.131(1), Florida Statutes (1985), even
255	if the parent of the group changes due to a direct or indirect
256	acquisition of the former common parent of the group. Any credit
257	can be used by any of the affiliated companies or related
258	entities referenced in this paragraph to the same extent as it
259	could have been used by the qualifying business. However, any
260	such use does shall not operate to increase the amount of the
261	credit or extend the period within which the credit must be
262	used.
263	(4)  Prior to receiving tax credits pursuant to this
264	section, a qualifying business must achieve and maintain the
265	minimum employment goals beginning with the commencement of
266	operations at a qualifying project and continuing each year
267	thereafter during which tax credits are available pursuant to
268	this section.
269	(4)(5)  Applications shall be reviewed and certified
270	pursuant to s. 288.061. The Department of Economic Opportunity,
271	upon a recommendation by Enterprise Florida, Inc., shall first
272	certify a business as eligible to receive tax credits pursuant
273	to this section before prior to the commencement of operations
274	of a qualifying project, and such certification shall be
275	transmitted to the Department of Revenue. Upon receipt of the
276	certification, the Department of Revenue shall enter into a
277	written agreement with the qualifying business specifying, at a
278	minimum, the method by which income generated by or arising out
279	of the qualifying project will be determined.
280	(5)(6)  The Department of Economic Opportunity, in
281	consultation with Enterprise Florida, Inc., may is authorized to
282	develop the necessary guidelines and application materials for
283	the certification process described in subsection (4) (5).
284	(6)(7)  The qualifying business shall It shall be the
285	responsibility of the qualifying business to affirmatively
286	demonstrate to the satisfaction of the Department of Revenue
287	that the such business meets the job creation and capital
288	investment requirements of this section.
289	(7)  Qualifying businesses, including corporations that are
290	not domiciled in this state, subchapter S corporations under the
291	Internal Revenue Code, limited liability companies, sole
292	proprietorships, or partnerships, may take credits pursuant to
293	this chapter against taxes paid pursuant to chapter 212 or ad
294	valorem taxes paid as defined in s. 220.03(1).
295	(8)  The Department of Revenue may specify by rule the
296	methods by which a project's pro forma annual taxable income is
297	determined.
298	Section 3.  Subsection (1) and paragraph (e) of subsection
299	(6) of section 288.106, Florida Statutes, are amended to read:
300	288.106  Tax refund program for qualified target industry
301	businesses.-
302	(1)  LEGISLATIVE FINDINGS AND DECLARATIONS.-The Legislature
303	finds that retaining and expanding existing businesses in the
304	state, encouraging the creation of new businesses in the state,
305	attracting new businesses from outside the state, and generally
306	providing conditions favorable for the growth of target
307	industries creates high-quality, high-wage employment
308	opportunities for residents of the state and strengthens the
309	state's economic foundation. The Legislature also finds that
310	incentives narrowly focused in application and scope tend to be
311	more effective in achieving the state's economic development
312	goals. The Legislature further finds that higher-wage jobs
313	reduce the state's share of hidden costs, such as public
314	assistance and subsidized health care associated with low-wage
315	jobs. Therefore, the Legislature declares that it is the policy
316	of the state to encourage capital investment, the growth of
317	higher-wage jobs, and a diverse economic base by providing state
318	tax refunds to qualified target industry businesses that
319	originate or expand in the state or that relocate to the state,
320	regardless of the legal structure of those businesses.
321	(6)  ANNUAL CLAIM FOR REFUND.-
322	(e)  A prorated tax refund, less a 5 percent 5-percent
323	penalty, shall be approved for a qualified target industry
324	business if all other applicable requirements have been
325	satisfied and the business proves to the satisfaction of the
326	office that:
327	1.  It has achieved at least 80 percent of its projected
328	employment; and
329	2.  The average wage paid by the business is at least 90
330	percent of the average wage specified in the tax refund
331	agreement, but in no case less than 115 percent of the average
332	private sector wage in the area available at the time of
333	certification, or 150 percent or 200 percent of the average
334	private sector wage if the business requested the additional
335	per-job tax refund authorized in paragraph (3)(b) for wages
336	above those levels. The prorated tax refund shall be calculated
337	by multiplying the tax refund amount for which the qualified
338	target industry business would have been eligible, if all
339	applicable requirements had been satisfied, by the percentage of
340	the average employment specified in the tax refund agreement
341	which was achieved, and by the percentage of the average wages
342	specified in the tax refund agreement which was achieved.
343	Section 4.  Section 288.1084, Florida Statutes, is created
344	to read:
345	288.1084  Manufacturing Capital Investment Tax Refund
346	Program.-
347	(1)  LEGISLATIVE FINDINGS AND DECLARATIONS.-The Legislature
348	finds that attracting and expanding manufacturing businesses in
349	this state will accelerate capital investment, increase exports,
350	and provide high-quality, high-wage employment opportunities for
351	residents, and will enhance overall the state's economy. To meet
352	the needs of these manufacturing businesses, programs are needed
353	which provide incentives for significant capital investment.
354	Therefore, the Legislature declares that it is the policy of the
355	state to encourage the location and expansion of manufacturing
356	businesses in this state by providing state tax refunds for
357	capital investment.
358	(2)  DEFINITIONS.-As used in this section, the term:
359	(a)  "Business" means an employing unit, as defined in s.
360	443.036, which is registered for unemployment compensation
361	purposes with the state agency providing unemployment tax
362	collection services.
363	(b)  "Capital investment" means the total capital
364	investment in land, buildings, and equipment in this state made
365	in connection with a qualifying project for no longer than the 3
366	years following the beginning of construction, initiation of the
367	project, or the purchase of machinery and equipment and until
368	the commencement of operations.
369	(c)  "Division" means the Division of Strategic Business
370	Development in the Department of Economic Opportunity.
371	(d)  "Economic benefits" means the gains in state or local
372	tax revenue as a percentage of the state or local investment.
373	The state or local investment includes state grants, tax
374	exemptions, tax refunds, tax credits, and other state or local
375	incentives. The economic-benefits calculation may be expressed
376	as a ratio of the increase in state or local revenues as
377	compared to the state or local investment.
378	(e)  "Eligible capital costs" means all expenses incurred
379	by a qualifying business in connection with the acquisition,
380	construction, installation, and equipping of a qualifying
381	project for no longer than the 3-year period following the
382	beginning of construction, initiation of the project, or
383	purchase of machinery and equipment, and until the commencement
384	of operations, including, but not limited to:
385	1.  The costs of acquiring, constructing, installing,
386	equipping, and financing a qualifying project, including all
387	obligations incurred for labor and obligations to contractors,
388	subcontractors, builders, and materialmen.
389	2.  The costs of acquiring land or rights to land and any
390	cost incidental thereto, including recording fees.
391	3.  The costs of architectural and engineering services,
392	including test borings, surveys, estimates, plans and
393	specifications, preliminary investigations, environmental
394	mitigation, and supervision of construction, as well as the
395	performance of all duties required by or consequent to the
396	acquisition, construction, installation, and reequipping of a
397	qualifying project.
398	4.  The costs associated with the installation of fixtures
399	and equipment; surveys, including archaeological and
400	environmental surveys; site tests and inspections; subsurface
401	site work and excavation; removal of structures, roadways, and
402	other surface obstructions; filling, grading, paving, and
403	provisions for drainage, storm water retention, and installation
404	of utilities, including water, sewer, sewage treatment, gas,
405	electricity, communications, and similar facilities; and offsite
406	construction for utility extensions to the boundaries of the
407	property.
408
409	Eligible capital costs do not include the cost of any property
410	previously owned or leased by the qualifying business.
411	(f)  "Expansion of an existing business" means the
412	expansion of an existing business in this state by or through
413	additions to real or personal property, resulting in a net
414	increase in new capital investment of at least $10 million.
415	(g)  "Fiscal year" means the fiscal year of the state.
416	(h)  "Manufacturing" means a business in NAICS Codes 31,
417	32, or 33.
418	(i)  "NAICS" means those classifications contained in the
419	North American Industry Classification System, as published in
420	2007 by the Office of Management and Budget, Executive Office of
421	the President, and updated periodically.
422	(j)  "New or expanding business" means a business that
423	applies for a tax refund under this section before beginning or
424	expanding operations in this state and that is a legal entity
425	separate from any other commercial or industrial operation owned
426	by the same business. The business may be a company incorporated
427	in any state or nation, a limited liability company, a sole
428	proprietorship, a partnership, a subchapter S corporation, or
429	any other legally accepted business entity.
430	(k)  "Project" means the creation of a new business or the
431	expansion of an existing business for a period not to exceed 3
432	years.
433	(l)  "Qualified project" means a proposal by a business
434	that is designed to produce a positive economic benefit to the
435	state consistent with the provisions of this chapter.
436	(m)  "Tax refund" means a refund against:
437	1.  Corporate income taxes imposed pursuant to chapter 220.
438	2.  Insurance premium tax imposed pursuant to s. 624.509.
439	3.  Sales, use, and other transactions imposed pursuant to
440	chapter 212.
441	4.  Intangible personal property taxes imposed pursuant to
442	chapter 199.
443	5.  Emergency excise taxes imposed pursuant to chapter 221.
444	6.  Excise taxes on documents imposed pursuant to chapter
445	201.
446	7.  Ad valorem taxes paid as defined in s. 220.03(1).
447	8.  State communications services taxes imposed pursuant to
448	chapter 202.
449	9.  State gross receipts tax for utility services imposed
450	pursuant to chapter 203.
451	10.  State motor and other fuel taxes imposed pursuant to
452	chapter 206.
453	(3)  TAX REFUND; ELIGIBLE AMOUNTS.-
454	(a)  A qualified project is allowed a refund from the
455	Economic Development Incentives Account within the Economic
456	Development Trust Fund, established under s. 288.095, for the
457	amount of taxes paid for eligible capital costs certified by the
458	division which were paid by the business.
459	(b)  A qualified project may receive tax refund payments
460	equal to 10 percent of the capital investment made.
461	(c)  The amount of refunds made to all projects under this
462	section and s. 288.106 may not exceed the amount of funds set
463	aside for the Economic Development Incentives Account within the
464	Economic Development Trust Fund.
465	(d)  A qualified project may not receive a refund under
466	this section for any amount of credit, refund, or exemption
467	previously granted to that business for any of the taxes listed
468	in subsection (2).
469	(e)  Refunds made available under this section may not be
470	expended in connection with the relocation of a business from
471	one community in the state to another community unless the
472	division determines that, without such relocation, the business
473	will move outside the state or determines that the business has
474	a compelling economic rationale for relocation which is
475	consistent with the intent of this section.
476	(f)  A business that fraudulently claims a refund under
477	this section:
478	1.  Is liable for the amount of refund, which shall be
479	repaid and deposited into the Economic Development Incentives
480	Account within the Economic Development Trust Fund, and a
481	mandatory penalty in the amount of 200 percent of the tax
482	refund, which shall be deposited into the General Revenue Fund.
483	2.  Commits a felony of the third degree, punishable as
484	provided in s. 775.082, s. 775.083, or s. 775.084.
485	(4)  APPLICATION AND APPROVAL PROCESS.-To apply for
486	certification as an eligible business under this section, the
487	business must propose to make a $10 million or greater capital
488	investment and file an application with the division before the
489	business locates or expands existing operations in the state.
490	The application must include, but need not be limited to:
491	(a)  The applicant's federal employer identification number
492	and, if applicable, state sales tax registration number.
493	(b)  The location of the applicant's proposed permanent
494	facility.
495	(c)  A description of the type of business activity or
496	product covered by the project, including a minimum of a five-
497	digit NAICS code for all activities included in the project.
498	(d)  The proposed amount of capital investment to be made
499	for each year of the project.
500	(e)  The anticipated commencement date of the project.
501	(f)  A brief statement explaining how the estimated tax
502	refunds to be requested will affect the decision of the
503	applicant to locate or expand in this state.
504	(g)  Any other information that the division determines is
505	appropriate for a capital investment refund.
506
507	The division shall annually certify those projects that qualify
508	for refunds.
509	(5)  RULE DEVELOPMENT.-The division may adopt rules to
510	administer this section.
511	Section 5.  This act shall take effect July 1, 2012.

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