Florida Senate - 2014                                     SB 596
       
       
        
       By Senator Evers
       
       
       
       
       
       2-00469-14                                             2014596__
    1                        A bill to be entitled                      
    2         An act relating to defense contracting; creating s.
    3         288.1046, F.S.; providing definitions; authorizing
    4         certain prime contractors to apply to the Department
    5         of Economic Opportunity to certify that such
    6         contractors may reduce their computation of adjusted
    7         federal income by a certain amount when awarded a
    8         prime contract; providing requirements to apply for a
    9         reduction in computation of income; requiring a prime
   10         contractor to apply separately for each qualified
   11         subcontract award and to provide documentation;
   12         providing guidelines for the department to certify an
   13         award; authorizing the department and the Department
   14         of Revenue to adopt rules; providing an effective
   15         date.
   16          
   17  Be It Enacted by the Legislature of the State of Florida:
   18  
   19         Section 1. Section 288.1046, Florida Statutes, is created
   20  to read:
   21         288.1046 Defense works in Florida incentive.—
   22         (1) As used in this section, the term:
   23         (a) “Florida prime contractor” means a business entity
   24  operating in the state which is awarded a prime contract.
   25         (b) “Florida small business subcontractor” means a business
   26  entity that:
   27         1. Maintains its primary place of business in this state;
   28         2. Has 250 or fewer employees;
   29         3. Is awarded a subcontract from a Florida prime
   30  contractor; and
   31         4. Has no subsidiary or affiliate business relationship to
   32  the Florida prime contractor making the award.
   33         (c) “Prime contract” means a contract that is awarded
   34  directly from the Federal Government.
   35         (d) “Qualified defense work” means a prime contract awarded
   36  for manufacturing, engineering, construction, distribution,
   37  research, development, or other activities related to equipment,
   38  supplies, technology, or other goods or services that directly
   39  or indirectly support the United States Armed Forces or that can
   40  be reasonably determined to support national security, including
   41  space-related activities. The term does not include work that
   42  only may be awarded locally by a military installation and does
   43  not include contracts awarded before October 1, 2013.
   44         (e) “Qualified subcontract award” means qualified defense
   45  work, in part or in whole, subcontracted from a Florida prime
   46  contractor to a Florida small business subcontractor which is
   47  executed in this state and is approved by the department.
   48         (2) A Florida prime contractor may apply to the department
   49  to certify that the Florida prime contractor may reduce its
   50  computation of adjusted federal income under s. 220.13 by an
   51  amount equal to 4 percent of the subcontract award if the
   52  Florida prime contractor:
   53         (a) Is subject to chapter 220;
   54         (b) Is awarded qualified defense work; and
   55         (c) Awards a qualified subcontract award.
   56         (3) A Florida prime contractor may claim the incentive
   57  under subsection (2) for each qualified subcontract award. A
   58  Florida prime contractor must apply separately to the department
   59  for each qualified subcontract award and provide the department
   60  with required documentation, including, but not limited to, the
   61  application for the award and copies of contracts, tax records,
   62  or employment records.
   63         (4) The department may establish application, approval,
   64  appeal, and accountability processes as necessary. The
   65  department may consult with Enterprise Florida, Inc., and the
   66  Florida Defense Support Task Force as necessary to administer
   67  this section.
   68         (a) The department shall provide a letter certifying a
   69  qualified subcontract award to a Florida prime contractor for
   70  use when the business entity files its taxes. Certifications
   71  apply beginning in the 2014 tax year.
   72         (b) The department may certify, for each Florida prime
   73  contractor applicant per tax year, up to $250 million in
   74  aggregate qualified subcontract awards, equaling $10 million in
   75  reduced taxable income and $550,000 in reduced taxes.
   76         (c) The department may certify in total, per tax year, up
   77  to $2.5 billion in aggregate qualified subcontract awards,
   78  equaling $100 million in reduced taxable income and $5.5 million
   79  in reduced taxes.
   80         (d) For a multiyear qualified subcontract award:
   81         1. The department shall certify the full amount of the
   82  award under paragraphs (b) and (c) in the year it is awarded.
   83         2. The Florida prime contractor may claim the incentive in
   84  the tax year in which payment is made to the Florida small
   85  business subcontractor.
   86         (5) The department and the Department of Revenue may adopt
   87  rules to administer this section.
   88         Section 2. This act shall take effect July 1, 2014.