Senate Bill 0742c2

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    Florida Senate - 1998                     CS for CS for SB 742

    By the Committees on Education, Commerce and Economic
    Opportunities and Senators Clary and Diaz-Balart




    304-1795A-98

  1                      A bill to be entitled

  2         An act relating to sponsored research and

  3         development; amending s. 220.15, F.S.;

  4         providing that certain property and payroll

  5         associated with sponsored research and

  6         development at certain universities will be

  7         disregarded in calculating apportionment of

  8         adjusted federal income and that such research

  9         will not, alone, cause a corporation to incur

10         state income tax liability; defining the term

11         "sponsored research contract"; authorizing the

12         Department of Revenue to adopt rules; requiring

13         a report; providing an effective date.

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

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17         Section 1.  Paragraph (c) is added to subsection (2) of

18  section 220.15, Florida Statutes, paragraph (c) is added to

19  subsection (4) of that section, and subsection (8) is added to

20  that section, to read:

21         220.15  Apportionment of adjusted federal income.--

22         (2)  The property factor is a fraction the numerator of

23  which is the average value of the taxpayer's real and tangible

24  personal property owned or rented and used in this state

25  during the taxable year or period and the denominator of which

26  is the average value of such property owned or rented and used

27  everywhere.

28         (c)  The property factor fraction shall not include any

29  real or tangible personal property located in this state that

30  is certified to the Department of Revenue to be dedicated

31  exclusively to research and development activities performed

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    Florida Senate - 1998                     CS for CS for SB 742
    304-1795A-98




  1  pursuant to sponsored research contracts conducted in

  2  conjunction with and through a university that is a member of

  3  the State University System or a nonpublic university that is

  4  chartered in Florida and conducts graduate programs at the

  5  professional or doctoral level. The Board of Regents must

  6  certify the contracts for members of the State University

  7  System and the president of the university must certify the

  8  contracts for a nonpublic university. As used in this

  9  paragraph, the term "sponsored research contract" means an

10  agreement executed by parties that include at least the

11  university and the taxpayer. Funding for sponsored research

12  contracts may be provided from public or private sources.

13         (4)  The payroll factor is a fraction the numerator of

14  which is the total amount paid in this state during the

15  taxable year or period by the taxpayer for compensation and

16  the denominator of which is the total compensation paid

17  everywhere during the taxable year or period.

18         (c)  The payroll factor fraction shall not include any

19  compensation paid to any employee located in this state that

20  is certified to the Department of Revenue as paid to employees

21  dedicated exclusively to research and development activities

22  performed pursuant to sponsored research contracts conducted

23  in conjunction with and through a university that is a member

24  of the State University System or a nonpublic university that

25  is chartered in Florida and conducts graduate programs at the

26  professional or doctoral level. The Board of Regents must

27  certify the contracts for members of the State University

28  System and the president of the university must certify the

29  contracts for a nonpublic university. As used in this

30  paragraph, the term "sponsored research contract" means an

31  agreement executed by parties that include at least the

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    Florida Senate - 1998                     CS for CS for SB 742
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  1  university and the taxpayer. Funding for sponsored research

  2  contracts may be provided from public or private sources.

  3         (8)  No research and development activities certified

  4  as being conducted in conjunction with and through an eligible

  5  university within this state shall cause any corporation to

  6  become subject to the taxes imposed by this chapter if the

  7  corporation would otherwise not be subject to the tax levied

  8  herein. The property and payroll eliminated from the

  9  apportionment formula pursuant to the provisions of paragraphs

10  (2)(c) and (4)(c) shall be eliminated only for the duration of

11  the contractual period specified in the contracts for the

12  conduct of the sponsored research. The reduction in tax due as

13  a result of the property and payroll eliminated from the

14  apportionment formula pursuant to the provisions of paragraphs

15  (2)(c) and (4)(c) may not exceed the amount paid to the

16  participating university for the conduct of the sponsored

17  research. No sponsored research contracts in existence prior

18  to July 1, 1997, shall be eligible to participate in the

19  provisions of paragraphs (2)(c) and (4)(c).

20         Section 2.  The Department of Revenue may adopt rules

21  pursuant to the Administrative Procedure Act to implement

22  paragraphs (2)(c) and (4)(c) and subsection (8) of section

23  220.15, Florida Statutes, as created by this act. The Board of

24  Regents and the president of each participating nonpublic

25  university shall monitor the various sponsored research

26  contracts and make a report to the Legislature by February 1,

27  2000, which shall provide any necessary information which

28  indicates if the provisions of this act have been successful

29  in attracting additional sponsored research contracts.

30         Section 3.  This act shall take effect July 1, 1998.

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    Florida Senate - 1998                     CS for CS for SB 742
    304-1795A-98




  1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
  2                            CS/SB 742

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  4  The committee substitute for the committee substitute differs
    from Committee Substitute for Senate Bill 742 in that it
  5  would:

  6  Create conditions under which corporations could receive a tax
    exemption for their sponsored research contracts with
  7  nonpublic universities.

  8  Define "sponsored research contract."

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