Senate Bill 1564

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    Florida Senate - 1998                                  SB 1564

    By Senator McKay





    26-703-98

  1                      A bill to be entitled

  2         An act relating to the tax on sales, use, and

  3         other transactions; amending s. 212.08, F.S.;

  4         amending the exemption for machinery and

  5         equipment used in silicon technology production

  6         and research and development; deleting the

  7         requirement that the exemption be accomplished

  8         through the refund of taxes that were

  9         previously paid; deleting the provision that

10         the refund is subject to a specific annual

11         legislative appropriation; providing an

12         effective date.

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14  Be It Enacted by the Legislature of the State of Florida:

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16         Section 1.  Paragraph (j) of subsection (5) of section

17  212.08, Florida Statutes, is amended to read:

18         212.08  Sales, rental, use, consumption, distribution,

19  and storage tax; specified exemptions.--The sale at retail,

20  the rental, the use, the consumption, the distribution, and

21  the storage to be used or consumed in this state of the

22  following are hereby specifically exempt from the tax imposed

23  by this chapter.

24         (5)  EXEMPTIONS; ACCOUNT OF USE.--

25         (j)  Machinery and equipment used in silicon technology

26  production and research and development.--

27         1.  Industrial machinery and equipment purchased for

28  use in silicon technology facilities certified under

29  subparagraph 5. to manufacture, process, compound, or produce

30  silicon technology products for sale or for use by these

31  facilities are exempt from the tax imposed by this chapter.

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    Florida Senate - 1998                                  SB 1564
    26-703-98




  1         2.  Machinery and equipment are exempt from the tax

  2  imposed by this chapter if purchased for use predominately in

  3  silicon wafer research and development activities in a silicon

  4  technology research and development facility certified under

  5  subparagraph 5.

  6         3.  In addition to meeting The exemptions authorized in

  7  subparagraphs 1. and 2. accrue to the taxpayer through a

  8  refund of previously paid taxes. A refund may not be made

  9  unless the criteria mandated by subparagraph 1. or

10  subparagraph 2., a have been met and the business must be has

11  been certified by the Office of Tourism, Trade, and Economic

12  Development as authorized in this paragraph in order to

13  qualify for exemption under this paragraph.

14         4.a.  To be eligible to receive the exemption provided

15  by subparagraph 1. or subparagraph 2., a qualifying business

16  entity shall apply to Enterprise Florida, Inc. The application

17  shall be developed by the Office of Tourism, Trade, and

18  Economic Development in consultation with Enterprise Florida,

19  Inc.

20         b.  Enterprise Florida, Inc., shall review each

21  submitted application and information and determine whether or

22  not the application is complete within 5 working days. Once an

23  application is complete, Enterprise Florida, Inc., shall,

24  within 10 working days, evaluate the application and recommend

25  approval or disapproval of the application to the Office of

26  Tourism, Trade, and Economic Development.

27         c.  Upon receipt of the application and recommendation

28  from Enterprise Florida, Inc., the Office of Tourism, Trade,

29  and Economic Development shall certify within 5 working days

30  those applicants who are found to meet the requirements of

31  this section and notify the applicant, Enterprise Florida,

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    Florida Senate - 1998                                  SB 1564
    26-703-98




  1  Inc., and the department of the certification. If the Office

  2  of Tourism, Trade, and Economic Development finds that the

  3  applicant does not meet the requirements of this section, it

  4  shall notify the applicant and Enterprise Florida, Inc.,

  5  within 10 working days that the application for certification

  6  has been denied and the reasons for denial. The Office of

  7  Tourism, Trade, and Economic Development has final approval

  8  authority for certification under this section.

  9         5.a.  A business certified to receive this exemption

10  may apply once each year for the exemption refund of all

11  eligible taxes paid during the previous calendar year. The

12  refund shall be subject to a specific annual appropriation

13  from the Legislature to the Office of Tourism, Trade, and

14  Economic Development for the payment of such refunds.

15         b.  The first claim submitted by a business may include

16  all eligible expenditures made after the date the business was

17  certified.

18         c.  To apply for the annual exemption refund, the

19  business shall submit a refund claim to the Office of Tourism,

20  Trade, and Economic Development, which claim indicates and

21  documents the sales and use taxes otherwise payable paid on

22  eligible machinery and equipment. The claim must shall also

23  indicate, for program evaluation purposes only, the average

24  number of full-time equivalent employees at the facility over

25  the preceding calendar year, the average wage and benefits

26  paid to those employees over the preceding calendar year, and

27  the total investment made in real and tangible personal

28  property over the preceding calendar year or, for the first

29  claim submitted, since the date of certification. The

30  department shall assist the Office of Tourism, Trade, and

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    Florida Senate - 1998                                  SB 1564
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  1  Economic Development in evaluating and verifying information

  2  provided in the application for exemption an annual refund.

  3         d.  An application for refund must be submitted to the

  4  Office of Tourism, Trade, and Economic Development by February

  5  15 of each year. In the event that the Legislature does not

  6  appropriate an amount sufficient to satisfy all refund

  7  applications received by the Office of Tourism, Trade, and

  8  Economic Development, the office shall, not later than April

  9  15 of each year, determine the proportion of each refund claim

10  which shall be paid by dividing the amount appropriated for

11  tax refunds for the fiscal year by the total of refund claims

12  received. The amount of each claim for a tax refund shall be

13  multiplied by the resulting quotient. If, after the payment of

14  all such refund claims, there are appropriated funds

15  remaining, the office shall recalculate the proportion for

16  each refund claim and adjust the amount of each claim

17  accordingly.

18         d.e.  The Office of Tourism, Trade, and Economic

19  Development may use the information reported on the claims for

20  evaluation purposes only and shall prepare an annual report on

21  the exemption program and its cost and impact. The annual

22  report for the preceding fiscal year shall be submitted to the

23  Governor, the President of the Senate, and the Speaker of the

24  House of Representatives by September 30 of each fiscal year.

25  This report may be submitted in conjunction with the annual

26  report required in s. 288.095(3)(c).

27         6.  A business certified to receive this exemption may

28  elect to designate one or more state universities or community

29  colleges as recipients of up to 100 percent of the amount of

30  the exemption refund for which they may qualify. To receive

31  these funds the tax refund or portion of the tax refund, the

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    Florida Senate - 1998                                  SB 1564
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  1  institution must agree to match the these funds so earned with

  2  equivalent cash, programs, services, or other in-kind support

  3  on a one-to-one basis in the pursuit of research and

  4  development projects as requested by the certified business.

  5  The rights to any patents, royalties, or real or intellectual

  6  property must be vested in the business unless otherwise

  7  agreed to by the business and the university or community

  8  college.

  9         7.  As used in this paragraph, the term:

10         a.  "Predominately" means at least 50 percent of the

11  time in qualifying research and development.

12         b.  "Research and development" means basic and applied

13  research in the science or engineering, as well as the design,

14  development, and testing of prototypes or processes of new or

15  improved products. Research and development does not include

16  market research, routine consumer product testing, sales

17  research, research in the social sciences or psychology,

18  nontechnological activities, or technical services.

19         c.  "Silicon technology products" means raw silicon

20  wafers that are transformed into semiconductor memory or logic

21  wafers, including wafers containing mixed memory and logic

22  circuits; related assembly and test operations; active-matrix

23  flat panel displays; semiconductor chips; and related silicon

24  technology products as determined by the Office of Tourism,

25  Trade, and Economic Development.

26         Section 2.  This act shall take effect July 1, 1998.

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    Florida Senate - 1998                                  SB 1564
    26-703-98




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  2                          SENATE SUMMARY

  3    Amends the exemption from the tax on sales, use, and
      other transactions which applies to machinery and
  4    equipment used in silicon technology production and
      research and development. Deletes the requirement that
  5    such an exemption be accomplished through the refund of
      taxes paid during the previous calendar year. Deletes the
  6    provision that the refund is subject to a specific annual
      legislative appropriation.
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