Senate Bill sb0562c1

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    Florida Senate - 2002                            CS for SB 562

    By the Committee on Commerce and Economic Opportunities; and
    Senator Cowin




    310-2328-02

  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         and the Department of Revenue; providing

10         requirements for product development

11         agreements; providing that donor companies may

12         be granted a credit which may be used to fund

13         sponsored research at a state university, as

14         reimbursement for the purchase of machinery,

15         equipment, or building supplies used in a

16         Florida manufacturing facility, or as a

17         corporate income tax credit; requiring the

18         department to certify certain amounts and make

19         certain distributions; authorizing donor

20         companies to elect to change the type of

21         credit, payment, or reimbursement under certain

22         circumstances; providing requirements for such

23         election; providing for rules; creating s.

24         220.115, F.S.; requiring receiving companies to

25         file a corporate tax return and remit to the

26         state certain fees in addition to any corporate

27         income tax due; relieving receiving companies

28         of payments to donor companies under certain

29         circumstances; providing remedies against a

30         donor company when a receiving company fails to

31         remit funds; providing for application of

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    Florida Senate - 2002                            CS for SB 562
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  1         administrative and penalty provisions of ch.

  2         220, F.S.; providing for rules; creating s.

  3         220.1825, F.S.; providing for a credit against

  4         the corporate income tax for donor companies

  5         that so elect; providing for carryover of the

  6         credit; providing for rules; amending s.

  7         220.02, F.S.; providing order of credits

  8         against the corporate income tax; amending s.

  9         212.20, F.S.; requiring the Department of

10         Revenue to make certain distributions within a

11         time certain under certain circumstances;

12         providing an effective date.

13  

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

15  

16         Section 1.  This act may be cited as the "New Product

17  Transfer Enhancement Act."

18         Section 2.  Section 288.1172, Florida Statutes, is

19  created to read:

20         288.1172  Licensing of products or technologies by

21  donor companies to receiving companies; credits and use

22  thereof.--

23         (1)  The purpose of this section is to promote economic

24  growth by providing an incentive for corporations that have

25  developed or patented products or technologies they do not

26  wish to develop further to license those items to companies

27  located in Florida for production and marketing.

28         (2)  As used in this section, the term:

29         (a)  "Annual statement of donor credit" means the

30  statement produced by the department for each donor company

31  listing the total amount of credit available to the donor

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    Florida Senate - 2002                            CS for SB 562
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  1  company for all of the product development agreements it has

  2  entered into. This statement shall also include any additional

  3  information specified in the product development agreement.

  4         (b)  "Annual statement of fees due" means the statement

  5  submitted by the receiving company to the department each

  6  year, which lists the amount of fees and royalties owed by it

  7  under the product development agreement to the donor company

  8  for the preceding calendar year. This statement shall also

  9  contain any additional information specified in the product

10  development agreement.

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

12         (d)  "Donor company" means an entity subject to the tax

13  imposed by chapter 220 which has developed or holds the patent

14  for a product or technology that it does not wish to develop

15  itself and which has entered into a product development

16  agreement.

17         (e)  "Product development agreement" means a contract

18  or series of contracts which provides the receiving company

19  with the right to produce and market a product or technology

20  which was developed or patented by the donor company.

21         (f)  "Receiving company" means a business operating in

22  Florida which has entered into a product development agreement

23  for the purpose of obtaining the right to produce and market a

24  product or technology from a donor company.

25         (3)  To qualify under this section, a product

26  development agreement shall specify that a minimum of 75

27  percent of the jobs created by the production of the new

28  product or technology shall be located in Florida. In

29  addition, the agreement shall specify the amount of

30  compensation to be remitted by the receiving company for the

31  license, and the type of credit the donor company has elected

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    Florida Senate - 2002                            CS for SB 562
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  1  to receive. The agreement shall further provide for submission

  2  by the receiving company of an annual statement of fees due to

  3  the department and shall specify the information to be

  4  included in the statement.

  5         (4)  Each receiving company shall submit an annual

  6  statement of fees due to the department by February 1 each

  7  year, in a format approved by the department.  The department

  8  shall be responsible for producing an annual statement of

  9  donor credit for each donor company using the information

10  contained in the statements. The donor credit for each donor

11  company shall equal 94.5 percent of the total of the amounts

12  specified in the annual statements of fees due from all

13  receiving companies with which it has entered into a product

14  development agreement. In any year the total amount of credits

15  granted under all annual statements of donor credit shall not

16  exceed 94.5 percent of the amount due to the state under all

17  annual statements of fees due.

18         (5)(a)  By March 1 each year, the department shall

19  certify the amount of corporate income tax credit, purchase

20  price reimbursement, or payment of sponsored research due each

21  donor company.

22         (b)  Within 30 days after certification under paragraph

23  (a), the department shall send an annual statement of donor

24  credit to each donor company. This statement shall contain the

25  information specified by the product development agreement.

26  The type of credit, payment, or reimbursement specified in the

27  product development agreement may not be changed for the

28  initial tax year. A donor company may elect to change the type

29  of credit, payment, or reimbursement in subsequent tax years

30  by filing a written election with the department in a format

31  specified by the department. The department must receive such

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    Florida Senate - 2002                            CS for SB 562
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  1  election at least 30 days before the due date for the annual

  2  statement of fees due for that tax year. A donor company may

  3  elect only one type of credit, payment, or reimbursement for a

  4  tax year.

  5         (c)  Within 90 days after certification under paragraph

  6  (a), the department shall distribute purchase price

  7  reimbursements and sponsored research payments pursuant to s.

  8  212.20(6)(d)7.e.

  9         (6)  The donor company may elect to apply the amount

10  specified in the annual statement of donor credit as a

11  corporate income tax credit under s. 220.1825, as a payment to

12  a state university's division of sponsored research under

13  subsection (7), or as a purchase price reimbursement under

14  subsection (8).  In no case shall the combined benefits exceed

15  the amount specified in the annual statement of donor credit.

16         (7)  A donor company which is providing funding for

17  sponsored research at a state university in this state may

18  elect to use its donor credit to fund such research.  If the

19  donor company elects to apply its donor credit in this manner,

20  it shall submit this request to the department on a form

21  approved by the department.  At a minimum, the form shall

22  specify the donor company, the research being sponsored, and

23  the state university at which the research is being conducted.

24  The department shall then request the Office of the

25  Comptroller to transfer to the appropriate university's

26  division of sponsored research the amount shown on the donor

27  company's annual statement of donor credit.  The Office of the

28  Comptroller may adopt rules necessary to administer this

29  subsection.

30         (8)  A donor company shall be eligible to receive a

31  reimbursement for the purchase price paid on the purchase of

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    Florida Senate - 2002                            CS for SB 562
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  1  machinery and equipment which is installed in any of its

  2  Florida manufacturing facilities, or for the building

  3  materials used in the construction or rehabilitation of any of

  4  its Florida manufacturing facilities.  This reimbursement

  5  shall be limited to the amount shown on the annual statement

  6  of donor credit which the donor company has elected to apply

  7  as a purchase reimbursement.  Application for such

  8  reimbursement shall be made on a form approved by the

  9  department and accompanied by any supporting documentation

10  required by the department.

11         (9)  The department may adopt rules necessary to

12  administer this section.

13         Section 3.  Section 220.115, Florida Statutes, is

14  created to read:

15         220.115  Fees due from receiving companies pursuant to

16  s. 288.1172.--In addition to the tax imposed by this chapter,

17  any company which has entered into a product development

18  agreement pursuant to s. 288.1172 as a receiving company shall

19  remit to the state the funds listed as due on the annual

20  statement of fees due which the company has submitted to the

21  department. Even if no tax is due under this chapter and a

22  return would not normally be required, a Florida corporate

23  income tax return shall be filed by the receiving company, and

24  the funds listed on the annual statement of fees due shall be

25  remitted to the department, subject to all filing

26  requirements, fines, and penalties specified for returns and

27  taxes due under this chapter. The payment to the state of the

28  funds listed as due on the annual statement of fees shall

29  discharge the receiving company from the payment to the donor

30  company of these same funds. If a receiving company fails to

31  timely remit to the department the funds listed as due on the

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    Florida Senate - 2002                            CS for SB 562
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  1  annual statement of fees due, neither a corporate income tax

  2  credit, a payment for sponsored research, nor a purchase price

  3  reimbursement shall be allowed to the donor company for that

  4  tax year. The department may adopt rules requiring the

  5  information that it considers necessary to ensure that the

  6  funds due under this section are properly reported and paid,

  7  including, but not limited to, rules relating to the methods,

  8  forms (including returns to be filed by the receiving

  9  companies), deadlines, and penalties for providing the

10  information required under this section.

11         Section 4.  Section 220.1825, Florida Statutes, is

12  created to read:

13         220.1825  Credit for donor companies pursuant to s.

14  288.1172.--A credit against the tax imposed by this chapter

15  shall be allowed to a donor company which has entered into a

16  product development agreement pursuant to s. 288.1172, and

17  which has elected to apply its donor credit as a corporate

18  income tax credit. Such credit shall be limited to 94.5

19  percent of the amount stated in the annual statement of fees

20  due submitted to the department by the receiving companies. If

21  any credit granted under this section is not fully used in the

22  first year for which it becomes available, the unused amount

23  may be carried forward for a period not to exceed 5 years. The

24  department may adopt rules relating to the method of reporting

25  and claiming this credit.

26         Section 5.  Subsection (8) of section 220.02, Florida

27  Statutes, is amended to read:

28         220.02  Legislative intent.--

29         (8)  It is the intent of the Legislature that credits

30  against either the corporate income tax or the franchise tax

31  be applied in the following order: those enumerated in s.

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    Florida Senate - 2002                            CS for SB 562
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  1  631.828, those enumerated in s. 220.191, those enumerated in

  2  s. 220.181, those enumerated in s. 220.183, those enumerated

  3  in s. 220.182, those enumerated in s. 220.1895, those

  4  enumerated in s. 221.02, those enumerated in s. 220.184, those

  5  enumerated in s. 220.186, those enumerated in s. 220.1845,

  6  those enumerated in s. 220.19, those enumerated in s. 220.185,

  7  and those enumerated in s. 220.187, and those enumerated in s.

  8  220.1825.

  9         Section 6.  Paragraph (d) of subsection (6) of section

10  212.20, Florida Statutes, is amended to read:

11         212.20  Funds collected, disposition; additional powers

12  of department; operational expense; refund of taxes

13  adjudicated unconstitutionally collected.--

14         (6)  Distribution of all proceeds under this chapter

15  and s. 202.18(1)(b) and (2)(b) shall be as follows:

16         (d)  The proceeds of all other taxes and fees imposed

17  pursuant to this chapter or remitted pursuant to s.

18  202.18(1)(b) and (2)(b) shall be distributed as follows:

19         1.  In any fiscal year, the greater of $500 million,

20  minus an amount equal to 4.6 percent of the proceeds of the

21  taxes collected pursuant to chapter 201, or 5 percent of all

22  other taxes and fees imposed pursuant to this chapter or

23  remitted pursuant to s. 202.18(1)(b) and (2)(b) shall be

24  deposited in monthly installments into the General Revenue

25  Fund.

26         2.  Two-tenths of one percent shall be transferred to

27  the Solid Waste Management Trust Fund.

28         3.  After the distribution under subparagraphs 1. and

29  2., 9.653 percent of the amount remitted by a sales tax dealer

30  located within a participating county pursuant to s. 218.61

31  

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    Florida Senate - 2002                            CS for SB 562
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  1  shall be transferred into the Local Government Half-cent Sales

  2  Tax Clearing Trust Fund.

  3         4.  After the distribution under subparagraphs 1., 2.,

  4  and 3., 0.065 percent shall be transferred to the Local

  5  Government Half-cent Sales Tax Clearing Trust Fund and

  6  distributed pursuant to s. 218.65.

  7         5.  For proceeds received after July 1, 2000, and after

  8  the distributions under subparagraphs 1., 2., 3., and 4., 2.25

  9  percent of the available proceeds pursuant to this paragraph

10  shall be transferred monthly to the Revenue Sharing Trust Fund

11  for Counties pursuant to s. 218.215.

12         6.  For proceeds received after July 1, 2000, and after

13  the distributions under subparagraphs 1., 2., 3., and 4.,

14  1.0715 percent of the available proceeds pursuant to this

15  paragraph shall be transferred monthly to the Revenue Sharing

16  Trust Fund for Municipalities pursuant to s. 218.215. If the

17  total revenue to be distributed pursuant to this subparagraph

18  is at least as great as the amount due from the Revenue

19  Sharing Trust Fund for Municipalities and the Municipal

20  Financial Assistance Trust Fund in state fiscal year

21  1999-2000, no municipality shall receive less than the amount

22  due from the Revenue Sharing Trust Fund for Municipalities and

23  the Municipal Financial Assistance Trust Fund in state fiscal

24  year 1999-2000. If the total proceeds to be distributed are

25  less than the amount received in combination from the Revenue

26  Sharing Trust Fund for Municipalities and the Municipal

27  Financial Assistance Trust Fund in state fiscal year

28  1999-2000, each municipality shall receive an amount

29  proportionate to the amount it was due in state fiscal year

30  1999-2000.

31         7.  Of the remaining proceeds:

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    Florida Senate - 2002                            CS for SB 562
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  1         a.  Beginning July 1, 2000, and in each fiscal year

  2  thereafter, the sum of $29,915,500 shall be divided into as

  3  many equal parts as there are counties in the state, and one

  4  part shall be distributed to each county.  The distribution

  5  among the several counties shall begin each fiscal year on or

  6  before January 5th and shall continue monthly for a total of 4

  7  months.  If a local or special law required that any moneys

  8  accruing to a county in fiscal year 1999-2000 under the

  9  then-existing provisions of s. 550.135 be paid directly to the

10  district school board, special district, or a municipal

11  government, such payment shall continue until such time that

12  the local or special law is amended or repealed.  The state

13  covenants with holders of bonds or other instruments of

14  indebtedness issued by local governments, special districts,

15  or district school boards prior to July 1, 2000, that it is

16  not the intent of this subparagraph to adversely affect the

17  rights of those holders or relieve local governments, special

18  districts, or district school boards of the duty to meet their

19  obligations as a result of previous pledges or assignments or

20  trusts entered into which obligated funds received from the

21  distribution to county governments under then-existing s.

22  550.135.  This distribution specifically is in lieu of funds

23  distributed under s. 550.135 prior to July 1, 2000.

24         b.  The department shall distribute $166,667 monthly

25  pursuant to s. 288.1162 to each applicant that has been

26  certified as a "facility for a new professional sports

27  franchise" or a "facility for a retained professional sports

28  franchise" pursuant to s. 288.1162. Up to $41,667 shall be

29  distributed monthly by the department to each applicant that

30  has been certified as a "facility for a retained spring

31  training franchise" pursuant to s. 288.1162; however, not more

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    Florida Senate - 2002                            CS for SB 562
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  1  than $208,335 may be distributed monthly in the aggregate to

  2  all certified facilities for a retained spring training

  3  franchise. Distributions shall begin 60 days following such

  4  certification and shall continue for not more than 30 years.

  5  Nothing contained in this paragraph shall be construed to

  6  allow an applicant certified pursuant to s. 288.1162 to

  7  receive more in distributions than actually expended by the

  8  applicant for the public purposes provided for in s.

  9  288.1162(6). However, a certified applicant is entitled to

10  receive distributions up to the maximum amount allowable and

11  undistributed under this section for additional renovations

12  and improvements to the facility for the franchise without

13  additional certification.

14         c.  Beginning 30 days after notice by the Office of

15  Tourism, Trade, and Economic Development to the Department of

16  Revenue that an applicant has been certified as the

17  professional golf hall of fame pursuant to s. 288.1168 and is

18  open to the public, $166,667 shall be distributed monthly, for

19  up to 300 months, to the applicant.

20         d.  Beginning 30 days after notice by the Office of

21  Tourism, Trade, and Economic Development to the Department of

22  Revenue that the applicant has been certified as the

23  International Game Fish Association World Center facility

24  pursuant to s. 288.1169, and the facility is open to the

25  public, $83,333 shall be distributed monthly, for up to 168

26  months, to the applicant. This distribution is subject to

27  reduction pursuant to s. 288.1169.  A lump sum payment of

28  $999,996 shall be made, after certification and before July 1,

29  2000.

30         e.  Within 90 days after certifying the amount of

31  purchase price reimbursement or payment of sponsored research

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    Florida Senate - 2002                            CS for SB 562
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  1  due each donor company pursuant to s. 288.1172, the department

  2  shall distribute such amount using proceeds as provided in

  3  this subparagraph.

  4         8.  All other proceeds shall remain with the General

  5  Revenue Fund.

  6         Section 7.  This act shall take effect January 1, 2003.

  7  

  8          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
  9                         Senate Bill 562

10                                 

11  The committee substitute substantively differs from SB 562 in
    the following ways:
12  
    1)  Provides for the Department of Revenue to administer all
13  provisions of the act, instead of sharing those duties with
    the Office of Tourism, Trade, and Economic Development.
14  
    2)  Deletes the provision requiring the Office of Tourism,
15  Trade, and Economic Development to market the provisions of
    the act and facilitate the formation of product development
16  agreements between donor and receiving companies.

17  3)  Establishes procedures for the Department of Revenue to
    certify and disburse certain payments relating to donor
18  companies.

19  4)  Provides for a donor company to elect to receive only one
    type of compensation per year.
20  
    5)  Specifies that a qualifying donor company may receive a
21  reimbursement for the purchase price paid on the purchase of
    machinery and equipment that is installed in "its," instead of
22  any, Florida manufacturing facility.

23  6)  Provides that a receiving company, upon payment to the
    state of the funds listed on its annual statement of fees due,
24  is discharged from its obligation to pay such funds to a donor
    company.
25  
    7)  Provides that a donor company may not receive any
26  compensation from the state unless the receiving company with
    which it has a product development agreement remits the funds
27  listed on its annual statement of fees due to the state in a
    timely matter.
28  

29  

30  

31  

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