House Bill hb0289c1
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Florida House of Representatives - 2002 CS/HB 289
By the Council for Competitive Commerce and
Representatives Andrews, Wallace, Alexander, Bullard, Ball,
Farkas, McGriff, Allen, Baxley, Mayfield, Wishner, Seiler,
Weissman, Kendrick and Brummer
1 A bill to be entitled
2 An act relating to incentives to promote new
3 product development; providing a short title;
4 creating s. 288.1172, F.S.; providing
5 definitions; providing for licensing of certain
6 products or technologies by donor companies to
7 receiving companies for production and
8 marketing; providing duties of such companies,
9 the Office of Tourism, Trade, and Economic
10 Development, and the Department of Revenue;
11 providing requirements for product development
12 agreements; providing that donor companies may
13 be granted a credit which may be used to fund
14 sponsored research at a state university, as
15 reimbursement for the purchase of machinery,
16 equipment, or building supplies used in a
17 Florida manufacturing facility, or as a
18 corporate income tax credit; requiring the
19 office to certify certain amounts to the
20 department; requiring the department to make
21 certain distributions; authorizing donor
22 companies to elect to change the type of
23 credit, payment, or reimbursement under certain
24 circumstances; providing requirements for such
25 election; creating s. 220.115, F.S.; requiring
26 receiving companies to file a corporate tax
27 return and remit to the state certain fees in
28 addition to any corporate income tax due;
29 relieving receiving companies of payments to
30 donor companies under certain circumstances;
31 providing remedies against a donor company when
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1 a receiving company fails to remit funds;
2 providing for application of administrative and
3 penalty provisions of ch. 220, F.S.; creating
4 s. 220.1825, F.S.; providing for a credit
5 against the corporate income tax for donor
6 companies that so elect; providing for
7 carryover of the credit; providing for rules;
8 amending s. 220.02, F.S.; providing order of
9 credits against the corporate income tax;
10 amending s. 212.20, F.S.; requiring the
11 Department of Revenue to make certain
12 distributions within a time certain under
13 certain circumstances; providing an effective
14 date.
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16 Be It Enacted by the Legislature of the State of Florida:
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18 Section 1. This act may be cited as the "New Product
19 Transfer Enhancement Act."
20 Section 2. Section 288.1172, Florida Statutes, is
21 created to read:
22 288.1172 Licensing of products or technologies by
23 donor companies to receiving companies; credits and use
24 thereof.--
25 (1) The purpose of this section is to promote economic
26 growth by providing an incentive for corporations which have
27 developed or patented products or technologies they do not
28 wish to develop further to license those items to companies
29 located in Florida for production and marketing.
30 (2) As used in this section:
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1 (a) "Annual statement of donor credit" means the
2 statement produced by the Office of Tourism, Trade, and
3 Economic Development for each donor company listing the total
4 amount of credit available to the donor company for all of the
5 product development agreements it has entered into. This
6 statement shall also include any additional information
7 specified in the product development agreement.
8 (b) "Annual statement of fees due" means the statement
9 submitted by the receiving company to the Office of Tourism,
10 Trade, and Economic Development and the Department of Revenue
11 each year, which lists the amount of fees and royalties owed
12 by it under the product development agreement to the donor
13 company for the preceding calendar year. This statement shall
14 also contain any additional information specified in the
15 product development agreement.
16 (c) "Donor company" means an entity subject to the tax
17 imposed by chapter 220 which has developed or holds the patent
18 for a product or technology that it does not wish to develop
19 itself and which has entered into a product development
20 agreement.
21 (d) "Product development agreement" means a contract
22 or series of contracts which provides the receiving company
23 with the right to produce and market a product or technology
24 which was developed or patented by the donor company.
25 (e) "Receiving company" means a business operating in
26 Florida which has entered into a product development agreement
27 for the purpose of obtaining the right to produce and market a
28 product or technology from a donor company.
29 (3) The Office of Tourism, Trade, and Economic
30 Development shall actively seek out corporations which may be
31 interested in becoming donor companies and Florida businesses
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1 which may be interested in becoming receiving companies and
2 attempt to facilitate the formation of product development
3 agreements.
4 (4) To qualify under this section, a product
5 development agreement shall specify that a minimum of 75
6 percent of the jobs created by the production of the new
7 product or technology shall be located in Florida. In
8 addition, the agreement shall specify the amount of
9 compensation to be remitted by the receiving company for the
10 license, and the type of credit the donor company has elected
11 to receive. The agreement shall further provide for submission
12 by the receiving company of an annual statement of fees due to
13 both the Office of Tourism, Trade, and Economic Development
14 and the Department of Revenue and shall specify the
15 information to be included in the statement.
16 (5) Each receiving company shall submit an annual
17 statement of fees due to the Office of Tourism, Trade, and
18 Economic Development and the Department of Revenue by February
19 1 each year, in a format approved by the Office of Tourism,
20 Trade, and Economic Development. The Office of Tourism,
21 Trade, and Economic Development shall be responsible for
22 producing an annual statement of donor credit for each donor
23 company using the information contained in the statements. The
24 donor credit for each donor company shall equal 94.5 percent
25 of the total of the amounts specified in the annual statements
26 of fees due from all receiving companies with which it has
27 entered into a product development agreement. In any year the
28 total amount of credits granted under all annual statements of
29 donor credit shall not exceed 94.5 percent of the amount due
30 to the state under all annual statements of fees due.
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1 (6) The Office of Tourism, Trade, and Economic
2 Development shall send the annual statement of donor credit to
3 each donor company by March 1 each year. These statements
4 shall contain the information specified by the product
5 development agreement. The type of credit, payment, or
6 reimbursement specified in the product development agreement
7 cannot be changed for the initial tax year. A donor company
8 may elect to change the type of credit, payment, or
9 reimbursement in subsequent tax years by filing a written
10 election with the Office of Tourism, Trade, and Economic
11 Development in the format specified by the office. The
12 election must be received by the Office of Tourism, Trade, and
13 Economic Development at least 30 days prior to the due date
14 for the annual statement of fees due for that tax year. A
15 donor company may elect only one type of credit, payment, or
16 reimbursement for a tax year. The Office of Tourism, Trade,
17 and Economic Development shall also submit to the Department
18 of Revenue a statement, in a format approved by the
19 department, which certifies the amount of credit due to each
20 donor company, the identities of the receiving companies from
21 which those credits originated, and the type of credit the
22 donor company has elected to receive. The Office of Tourism,
23 Trade, and Economic Development shall certify to the
24 Department of Revenue the amount of the corporate income tax
25 credit, purchase price reimbursement, or payment of sponsored
26 research elected by each donor company. Within 90 days after
27 such certification, the Department of Revenue shall distribute
28 purchase price reimbursements and sponsored research payments
29 pursuant to s. 212.20(6)(d)7.e.
30 (7) The donor company may elect to apply the amount
31 specified in the annual statement of donor credit as a
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1 corporate income tax credit under s. 220.1825, as a payment to
2 a state university's division of sponsored research under
3 subsection (8), or as a purchase price refund under subsection
4 (9). In no case shall the combined benefits exceed the amount
5 specified in the annual statement of donor credit.
6 (8) A donor company which is providing funding for
7 sponsored research at a state university in this state may
8 elect to use its donor credit to fund such research. If the
9 donor company elects to apply its donor credit in this manner,
10 it shall submit this request to the Department of Revenue on a
11 form approved by the department. At a minimum, the form shall
12 specify the donor company, the research being sponsored, and
13 the state university at which the research is being conducted.
14 The Department of Revenue shall then request the Office of the
15 Comptroller to transfer to the appropriate university's
16 division of sponsored research the amount shown on the donor
17 company's annual statement of donor credit. The Office of the
18 Comptroller and the Department of Revenue may adopt rules to
19 implement this subsection.
20 (9) A donor company shall be eligible to receive a
21 reimbursement for the purchase price paid on the purchase of
22 machinery and equipment which is installed in any of its
23 Florida manufacturing facilities, or for the building
24 materials used in the construction or rehabilitation of any of
25 its Florida manufacturing facilities. This reimbursement
26 shall be limited to the amount shown on the annual statement
27 of donor credit which the donor company has elected to apply
28 as a purchase reimbursement. Application for such
29 reimbursement shall be made on a form approved by the
30 Department of Revenue and accompanied by any supporting
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1 documentation required by the department. The Department of
2 Revenue may adopt rules to implement this subsection.
3 Section 3. Section 220.115, Florida Statutes, is
4 created to read:
5 220.115 Fees due from receiving companies pursuant to
6 s. 288.1172.--In addition to the tax imposed by this chapter,
7 any company which has entered into a product development
8 agreement pursuant to s. 288.1172 as a receiving company shall
9 remit to the state the funds listed as due on the annual
10 statement of fees due which the company has submitted to both
11 the Office of Tourism, Trade, and Economic Development and the
12 Department of Revenue. Even if no tax is due under this
13 chapter and a return would not normally be required, a Florida
14 corporate income tax return shall be filed by the receiving
15 company, and the funds listed on the annual statement of fees
16 due shall be remitted to the department, subject to all filing
17 requirements, fines, and penalties specified for returns and
18 taxes due under this chapter. The payment to the state of the
19 funds listed as due on the annual statement of fees shall
20 discharge the receiving company from the payment to the donor
21 company of these same funds. If a receiving company fails to
22 timely remit to the Department of Revenue the funds listed as
23 due on the annual statement of fees due, neither a corporate
24 income tax credit, a payment for sponsored research, nor a
25 purchase price reimbursement shall be allowed to the donor
26 company for that tax year. The department may adopt rules
27 requiring the information that it considers necessary to
28 ensure that the funds due under this section are properly
29 reported and paid, including, but not limited to, rules
30 relating to the methods, forms (including returns to be filed
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1 by the receiving companies), deadlines, and penalties for
2 providing the information required under this section.
3 Section 4. Section 220.1825, Florida Statutes, is
4 created to read:
5 220.1825 Credit for donor companies pursuant to s.
6 288.1172.--A credit against the tax imposed by this chapter
7 shall be allowed to a donor company which has entered into a
8 product development agreement pursuant to s. 288.1172, and
9 which has elected to apply its donor credit as a corporate
10 income tax credit. Such credit shall be limited to 94.5
11 percent of the amount stated in the annual statement of fees
12 due submitted to the Office of Tourism, Trade, and Economic
13 Development by the receiving companies. If any credit granted
14 under this section is not fully used in the first year for
15 which it becomes available, the unused amount may be carried
16 forward for a period not to exceed 5 years. The Department of
17 Revenue may adopt rules relating to the method of reporting
18 and claiming this credit.
19 Section 5. Subsection (8) of section 220.02, Florida
20 Statutes, is amended to read:
21 220.02 Legislative intent.--
22 (8) It is the intent of the Legislature that credits
23 against either the corporate income tax or the franchise tax
24 be applied in the following order: those enumerated in s.
25 631.828, those enumerated in s. 220.191, those enumerated in
26 s. 220.181, those enumerated in s. 220.183, those enumerated
27 in s. 220.182, those enumerated in s. 220.1895, those
28 enumerated in s. 221.02, those enumerated in s. 220.184, those
29 enumerated in s. 220.186, those enumerated in s. 220.1845,
30 those enumerated in s. 220.19, those enumerated in s. 220.185,
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1 and those enumerated in s. 220.187, and those enumerated in s.
2 220.1825.
3 Section 6. Paragraph (d) of subsection (6) of section
4 212.20, Florida Statutes, is amended to read:
5 212.20 Funds collected, disposition; additional powers
6 of department; operational expense; refund of taxes
7 adjudicated unconstitutionally collected.--
8 (6) Distribution of all proceeds under this chapter
9 and s. 202.18(1)(b) and (2)(b) shall be as follows:
10 (d) The proceeds of all other taxes and fees imposed
11 pursuant to this chapter or remitted pursuant to s.
12 202.18(1)(b) and (2)(b) shall be distributed as follows:
13 1. In any fiscal year, the greater of $500 million,
14 minus an amount equal to 4.6 percent of the proceeds of the
15 taxes collected pursuant to chapter 201, or 5 percent of all
16 other taxes and fees imposed pursuant to this chapter or
17 remitted pursuant to s. 202.18(1)(b) and (2)(b) shall be
18 deposited in monthly installments into the General Revenue
19 Fund.
20 2. Two-tenths of one percent shall be transferred to
21 the Solid Waste Management Trust Fund.
22 3. After the distribution under subparagraphs 1. and
23 2., 9.653 percent of the amount remitted by a sales tax dealer
24 located within a participating county pursuant to s. 218.61
25 shall be transferred into the Local Government Half-cent Sales
26 Tax Clearing Trust Fund.
27 4. After the distribution under subparagraphs 1., 2.,
28 and 3., 0.065 percent shall be transferred to the Local
29 Government Half-cent Sales Tax Clearing Trust Fund and
30 distributed pursuant to s. 218.65.
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1 5. For proceeds received after July 1, 2000, and after
2 the distributions under subparagraphs 1., 2., 3., and 4., 2.25
3 percent of the available proceeds pursuant to this paragraph
4 shall be transferred monthly to the Revenue Sharing Trust Fund
5 for Counties pursuant to s. 218.215.
6 6. For proceeds received after July 1, 2000, and after
7 the distributions under subparagraphs 1., 2., 3., and 4.,
8 1.0715 percent of the available proceeds pursuant to this
9 paragraph shall be transferred monthly to the Revenue Sharing
10 Trust Fund for Municipalities pursuant to s. 218.215. If the
11 total revenue to be distributed pursuant to this subparagraph
12 is at least as great as the amount due from the Revenue
13 Sharing Trust Fund for Municipalities and the Municipal
14 Financial Assistance Trust Fund in state fiscal year
15 1999-2000, no municipality shall receive less than the amount
16 due from the Revenue Sharing Trust Fund for Municipalities and
17 the Municipal Financial Assistance Trust Fund in state fiscal
18 year 1999-2000. If the total proceeds to be distributed are
19 less than the amount received in combination from the Revenue
20 Sharing Trust Fund for Municipalities and the Municipal
21 Financial Assistance Trust Fund in state fiscal year
22 1999-2000, each municipality shall receive an amount
23 proportionate to the amount it was due in state fiscal year
24 1999-2000.
25 7. Of the remaining proceeds:
26 a. Beginning July 1, 2000, and in each fiscal year
27 thereafter, the sum of $29,915,500 shall be divided into as
28 many equal parts as there are counties in the state, and one
29 part shall be distributed to each county. The distribution
30 among the several counties shall begin each fiscal year on or
31 before January 5th and shall continue monthly for a total of 4
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1 months. If a local or special law required that any moneys
2 accruing to a county in fiscal year 1999-2000 under the
3 then-existing provisions of s. 550.135 be paid directly to the
4 district school board, special district, or a municipal
5 government, such payment shall continue until such time that
6 the local or special law is amended or repealed. The state
7 covenants with holders of bonds or other instruments of
8 indebtedness issued by local governments, special districts,
9 or district school boards prior to July 1, 2000, that it is
10 not the intent of this subparagraph to adversely affect the
11 rights of those holders or relieve local governments, special
12 districts, or district school boards of the duty to meet their
13 obligations as a result of previous pledges or assignments or
14 trusts entered into which obligated funds received from the
15 distribution to county governments under then-existing s.
16 550.135. This distribution specifically is in lieu of funds
17 distributed under s. 550.135 prior to July 1, 2000.
18 b. The department shall distribute $166,667 monthly
19 pursuant to s. 288.1162 to each applicant that has been
20 certified as a "facility for a new professional sports
21 franchise" or a "facility for a retained professional sports
22 franchise" pursuant to s. 288.1162. Up to $41,667 shall be
23 distributed monthly by the department to each applicant that
24 has been certified as a "facility for a retained spring
25 training franchise" pursuant to s. 288.1162; however, not more
26 than $208,335 may be distributed monthly in the aggregate to
27 all certified facilities for a retained spring training
28 franchise. Distributions shall begin 60 days following such
29 certification and shall continue for not more than 30 years.
30 Nothing contained in this paragraph shall be construed to
31 allow an applicant certified pursuant to s. 288.1162 to
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1 receive more in distributions than actually expended by the
2 applicant for the public purposes provided for in s.
3 288.1162(6). However, a certified applicant is entitled to
4 receive distributions up to the maximum amount allowable and
5 undistributed under this section for additional renovations
6 and improvements to the facility for the franchise without
7 additional certification.
8 c. Beginning 30 days after notice by the Office of
9 Tourism, Trade, and Economic Development to the Department of
10 Revenue that an applicant has been certified as the
11 professional golf hall of fame pursuant to s. 288.1168 and is
12 open to the public, $166,667 shall be distributed monthly, for
13 up to 300 months, to the applicant.
14 d. Beginning 30 days after notice by the Office of
15 Tourism, Trade, and Economic Development to the Department of
16 Revenue that the applicant has been certified as the
17 International Game Fish Association World Center facility
18 pursuant to s. 288.1169, and the facility is open to the
19 public, $83,333 shall be distributed monthly, for up to 168
20 months, to the applicant. This distribution is subject to
21 reduction pursuant to s. 288.1169. A lump sum payment of
22 $999,996 shall be made, after certification and before July 1,
23 2000.
24 e. Within 90 days after issuance of the annual
25 statement of donor credit by the Office of Tourism, Trade, and
26 Economic Development to the Department of Revenue certifying
27 the amount to be paid to each corporation that is due a
28 purchase price refund or payment for sponsored research
29 pursuant to s. 288.1172, the department shall distribute such
30 amount to each corporation using proceeds as provided in this
31 subparagraph.
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1 8. All other proceeds shall remain with the General
2 Revenue Fund.
3 Section 7. This act shall take effect January 1, 2003.
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