The Florida Senate

624.5107  Child care tax credits; definitions; authorization; limitations; eligibility and application requirements; administration; expiration.--

(1)  DEFINITIONS.--As used in this section:

(a)  "Child care facility startup costs" means expenditures for substantial renovation, equipment, including playground equipment and kitchen appliances and cooking equipment, real property, including land and improvements, and for reduction of debt, made in connection with the establishment of a child care facility as defined by s. 402.302, or any facility providing daily care to children who are mildly ill, which is located in this state on the insurer's premises and used by the employees of the insurer.

(b)  "Operation of a child care facility" means operation of a child care facility as defined by s. 402.302, or any facility providing daily care to children who are mildly ill, which is located in this state within 5 miles of at least one place of business of the insurer and which is used by the employees of the insurer.

(c)  "Department" means the Department of Revenue.

(d)  "Executive director" means the executive director of the Department of Revenue.

(2)  AUTHORIZATION TO GRANT TAX CREDITS; LIMITATIONS.--

(a)1.  A credit of 50 percent of the startup costs of child care facilities operated by an insurer for its employees is allowed against any tax due for a taxable year under s. 624.509 or s. 624.510. A credit against such tax is also allowed for the operation of a child care facility by an insurer for its employees, which credit is in the amount of $50 per month for each child enrolled in the facility.

2.  A credit is allowed against any tax due for a taxable year under s. 624.509 or s. 624.510 for any insurer that makes payments directly to a child care facility as defined by s. 402.302 which is licensed in accordance with s. 402.305, or to any facility providing daily care to children who are mildly ill, which payments are made in the name of and for the benefit of an employee of the insurer in this state whose child attends the child care facility during the employee's working hours. The credit shall be an amount equal to 50 percent of the amount of such child care payments.

(b)  An insurer may not receive more than $50,000 in annual tax credits for all approved child care costs that the insurer incurs in any one year.

(c)  The total amount of tax credits which may be granted for all programs approved under this section and s. 220.19 is $2 million annually.

(d)  An application for tax credit under this section must be approved by the executive director.

(e)  If the credit granted under this section is not fully used in any one year because of insufficient tax liability on the part of the insurer, the unused amount may be carried forward for a period not to exceed 5 years. The carryover credit may be used in a subsequent year when the tax imposed by s. 624.509 or s. 624.510 for that year exceeds the credit for which the insurer is eligible in that year under this section.

(f)  If an insurer receives a credit for child care facility startup costs, and the facility fails to operate for at least 5 years, a pro rata share of the credit must be repaid, in accordance with the formula: A = C x (1 - (N/60)), where:

1.  "A" is the amount in dollars of the required repayment.

2.  "C" is the total credits taken by the insurer for child care facility startup costs.

3.  "N" is the number of months the facility was in operation.

This repayment requirement is inapplicable if the insurer goes out of business or can demonstrate to the department that its employees no longer want to have a child care facility.

(3)  ELIGIBILITY REQUIREMENTS.--

(a)  A child care facility with respect to which an insurer claims a child care tax credit must be a child care facility as defined by s. 402.302 and must be licensed in accordance with s. 402.305, or must be a facility providing daily care to children who are mildly ill.

(b)  The services of a child care facility for which an insurer claims a child care tax credit under subparagraph (2)(a)1. must be available to all employees of the insurer or must be allocated on a first-come, first-served basis, and must be used by employees of the insurer.

(c)  Child care payments for which an insurer claims a credit under subparagraph (2)(a)2. shall not exceed the amount charged by the child care facility to other children of like age and abilities of persons not employed by the insurer.

(4)  APPLICATION REQUIREMENTS.--Any insurer that wishes to participate in this program must submit to the department an application for tax credit which sets forth the proposal for establishing a child care facility for the use of its employees or for payment of the cost of child care for its employees. This application must state the anticipated startup costs and the number of children to be enrolled, in the case of credit claimed under subparagraph (2)(a)1., or the number of children for whom child care costs will be paid, in the case of credit claimed under subparagraph (2)(a)2.

(5)  ADMINISTRATION.--

(a)  The Department of Revenue may adopt all rules pursuant to the Administrative Procedure Act to administer this section, including rules for the approval or disapproval of proposals submitted by insurers and rules to provide for cooperative arrangements between for-profit and not-for-profit entities.

(b)  The executive director's decision to approve or disapprove a proposal must be in writing, and, if the proposal is approved, the decision must state the maximum credit allowable to the insurer.

(c)  All approvals for the granting of the tax credit require prior verification by the Department of Children and Family Services or local licensing agency that the insurer meets the licensure requirements as defined in s. 402.302 and is currently licensed in accordance with s. 402.305, or is a facility providing daily care to children who are mildly ill.

(d)  Verification of the child care provider as an approved facility must be in writing and must be attached to the credit application form submitted to the Department of Revenue.

(6)  EXPIRATION.--This section expires on June 30, 2008, except that paragraph (2)(e), which relates to carryover credits, and paragraph (2)(f), which relates to repaying tax credits in specified circumstances, do not expire on that date.

History.--s. 5, ch. 98-293.