| 1 | The Committee on Finance & Tax recommends the following: |
| 2 |
|
| 3 | Committee Substitute |
| 4 | Remove the entire bill and insert: |
| 5 |
|
| 6 | A bill to be entitled |
| 7 | An act relating to the Florida High-Speed Rail Authority; |
| 8 | amending s. 341.8203, F.S.; redefining the terms |
| 9 | "authority" and "high-speed rail system"; amending s. |
| 10 | 341.840, F.S.; revising the tax exemption of the authority |
| 11 | and its agents and contractors; providing for annual |
| 12 | redetermination of eligibility for exemption; providing |
| 13 | for recapture of taxes when an exemption is used |
| 14 | inappropriately; providing for rules; providing an |
| 15 | effective date. |
| 16 |
|
| 17 | Be It Enacted by the Legislature of the State of Florida: |
| 18 |
|
| 19 | Section 1. Subsections (2) and (6) of section 341.8203, |
| 20 | Florida Statutes, are amended to read: |
| 21 | 341.8203 Definitions.--As used in this act, unless the |
| 22 | context clearly indicates otherwise, the term: |
| 23 | (2) "Authority" means the Florida High-Speed Rail |
| 24 | Authority and its agents. However, for purposes of s. 341.840, |
| 25 | the term does not include any agent of the authority except as |
| 26 | provided in that section. |
| 27 | (6) "High-speed rail system" means any high-speed fixed |
| 28 | guideway system for transporting people or goods, which system |
| 29 | is capable of operating at speeds in excess of 120 miles per |
| 30 | hour, including, but not limited to, a monorail system, dual |
| 31 | track rail system, suspended rail system, magnetic levitation |
| 32 | system, pneumatic repulsion system, or other system approved by |
| 33 | the authority. The term includes a corridor and structures |
| 34 | essential to the operation of the line, including the land, |
| 35 | structures, improvements, rights-of-way, easements, rail lines, |
| 36 | rail beds, guideway structures, stations, platforms, switches, |
| 37 | yards, parking facilities, power relays, switching houses, and |
| 38 | rail stations, associated development, and also includes any |
| 39 | other facilities or equipment used exclusively or useful for the |
| 40 | purposes of high-speed rail system design, construction, |
| 41 | operation, maintenance, or the financing of the high-speed rail |
| 42 | system. |
| 43 | Section 2. Section 341.840, Florida Statutes, is amended |
| 44 | to read: |
| 45 | 341.840 Tax exemption.-- |
| 46 | (1) The exercise of the powers granted by this act will be |
| 47 | in all respects for the benefit of the people of this state, for |
| 48 | the increase of their commerce, welfare, and prosperity, and for |
| 49 | the improvement of their health and living conditions., and as |
| 50 | The design, construction building, operation, maintenance, and |
| 51 | financing of a high-speed rail system by the authority, or its |
| 52 | agent, or the owner or lessee thereof, as herein authorized, |
| 53 | constitutes the performance of an essential public function. |
| 54 | (2)(a) For the purposes of this section, the term |
| 55 | "authority" does not include agents of the authority other than |
| 56 | contractors who qualify as such pursuant to subsection (7). |
| 57 | (b) For the purposes of this section, any item or property |
| 58 | that is within the definition of "associated development" in s. |
| 59 | 341.8203(1) shall not be considered to be part of the high-speed |
| 60 | rail system as defined in s. 341.8203(6). |
| 61 | (3)(a) Purchases or leases of tangible personal property |
| 62 | or real property by the authority, excluding agents of the |
| 63 | authority, are exempt from taxes imposed by chapter 212 as |
| 64 | provided in s. 212.08(6). Purchases or leases of tangible |
| 65 | personal property that is incorporated into the high-speed rail |
| 66 | system as a component part thereof, as determined by the |
| 67 | authority, by agents of the authority or the owner of the high- |
| 68 | speed rail system are exempt from sales or use taxes imposed by |
| 69 | chapter 212. Leases, rentals, or licenses to use real property |
| 70 | granted to agents of the authority or the owner of the high- |
| 71 | speed rail system are exempt from taxes imposed by s. 212.031 if |
| 72 | the real property becomes part of such system. The exemptions |
| 73 | granted in this subsection do not apply to sales, leases, or |
| 74 | licenses by the authority, agents of the authority, or the owner |
| 75 | of the high-speed rail system. |
| 76 | (b) The exemption granted in paragraph (a) to purchases or |
| 77 | leases of tangible personal property by agents of the authority |
| 78 | or by the owner of the high-speed rail system applies only to |
| 79 | property that becomes a component part of such system. It does |
| 80 | not apply to items, including, but not limited to, cranes, |
| 81 | bulldozers, forklifts, other machinery and equipment, tools and |
| 82 | supplies, or other items of tangible personal property used in |
| 83 | the construction, operation, or maintenance of the high-speed |
| 84 | rail system when such items are not incorporated into the high- |
| 85 | speed rail system as a component part thereof. |
| 86 | (4) Any bonds or other, neither the authority, its agent, |
| 87 | nor the owner of such system shall be required to pay any taxes |
| 88 | or assessments upon or in respect to the system or any property |
| 89 | acquired or used by the authority, its agent, or such owner |
| 90 | under the provisions of this act or upon the income therefrom, |
| 91 | any security, and all notes, mortgages, security agreements, |
| 92 | letters of credit, or other instruments that arise out of or are |
| 93 | given to secure the repayment of bonds or other security, issued |
| 94 | by the authority, or on behalf of the authority therefor, their |
| 95 | transfer, and the income therefrom, including any profit made on |
| 96 | the sale thereof, shall at all times be free from taxation of |
| 97 | every kind by the state, the counties, and the municipalities |
| 98 | and other political subdivisions in the state. This subsection, |
| 99 | however, does not exempt from taxation or assessment the |
| 100 | leasehold interest of a lessee in any project or any other |
| 101 | property or interest owned by the lessee. The exemption granted |
| 102 | by this subsection is not applicable to any tax imposed by |
| 103 | chapter 220 on interest income or profits on the sale of debt |
| 104 | obligations owned by corporations. |
| 105 | (5) When property of the authority is leased to another |
| 106 | person or entity, the property shall be exempt from ad valorem |
| 107 | taxation only if the use by the lessee qualifies the property |
| 108 | for exemption under s. 196.199. |
| 109 | (6) A leasehold interest held by the authority is not |
| 110 | subject to intangible tax. However, if a leasehold interest held |
| 111 | by the authority is subleased to a nongovernmental lessee, such |
| 112 | subleasehold interest shall be deemed to be an interest |
| 113 | described in s. 199.023(1)(d), and is subject to the intangible |
| 114 | tax. |
| 115 | (7)(a) In order to be considered an agent of the authority |
| 116 | for purposes of the exemption from sales and use tax granted by |
| 117 | subsection (3) for tangible personal property incorporated into |
| 118 | the high-speed rail system, a contractor of the authority that |
| 119 | purchases or fabricates such tangible personal property must be |
| 120 | certified by the authority as provided in this subsection. |
| 121 | (b)1. A contractor must apply for a renewal of the |
| 122 | exemption not later than December 1 of each calendar year. |
| 123 | 2. A contractor must apply to the authority on the |
| 124 | application form adopted by the authority, which shall develop |
| 125 | the form in consultation with the Department of Revenue. |
| 126 | 3. The authority shall review each submitted application |
| 127 | and determine whether it is complete. The authority shall notify |
| 128 | the applicant of any deficiencies in the application within 30 |
| 129 | days. Upon receipt of a completed application, the authority |
| 130 | shall evaluate the application for exemption under this |
| 131 | subsection and issue a certification that the contractor is |
| 132 | qualified to act as an agent of the authority for purposes of |
| 133 | this section or a denial of such certification within 30 days. |
| 134 | The authority shall provide the Department of Revenue with a |
| 135 | copy of each certification issued upon approval of an |
| 136 | application. Upon receipt of a certification from the authority, |
| 137 | the Department of Revenue shall issue an exemption permit to the |
| 138 | contractor. |
| 139 | (c)1. The contractor may extend a copy of its exemption |
| 140 | permit to its vendors in lieu of paying sales tax on purchases |
| 141 | of tangible personal property qualifying for exemption under |
| 142 | this section. Possession of a copy of the exemption permit |
| 143 | relieves the seller of the responsibility of collecting tax on |
| 144 | the sale, and the Department of Revenue shall look solely to the |
| 145 | contractor for recovery of tax upon a determination that the |
| 146 | contractor was not entitled to the exemption. |
| 147 | 2. The contractor may extend a copy of its exemption |
| 148 | permit to real property subcontractors supplying and installing |
| 149 | tangible personal property that is exempt under subsection (3). |
| 150 | Any such subcontractor is authorized to extend a copy of the |
| 151 | permit to the subcontractor's vendors in order to purchase |
| 152 | qualifying tangible personal property tax-exempt. If the |
| 153 | subcontractor uses the exemption permit to purchase tangible |
| 154 | personal property that is determined not to qualify for |
| 155 | exemption under subsection (3), the Department of Revenue may |
| 156 | assess and collect any tax, penalties, and interest that are due |
| 157 | from either the contractor holding the exemption permit or the |
| 158 | subcontractor that extended the exemption permit to the seller. |
| 159 | (d) Any contractor authorized to act as an agent of the |
| 160 | authority under this section shall maintain the necessary books |
| 161 | and records to document the exempt status of purchases and |
| 162 | fabrication costs made or incurred under the permit. In |
| 163 | addition, an authorized contractor extending its exemption |
| 164 | permit to its subcontractors shall maintain a copy of the |
| 165 | subcontractor's books, records, and invoices indicating all |
| 166 | purchases made by the subcontractor under the authorized |
| 167 | contractor's permit. If, in an audit conducted by the Department |
| 168 | of Revenue, it is determined that tangible personal property |
| 169 | purchased or fabricated claiming exemption under this section |
| 170 | does not meet the criteria for exemption, the amount of taxes |
| 171 | not paid at the time of purchase or fabrication shall be |
| 172 | immediately due and payable to the Department of Revenue, |
| 173 | together with the appropriate interest and penalty, computed |
| 174 | from the date of purchase, in the manner prescribed by chapter |
| 175 | 212. |
| 176 | (e) If a contractor fails to apply for a high-speed rail |
| 177 | system exemption permit, or if a contractor initially determined |
| 178 | by the authority to not qualify for exemption is subsequently |
| 179 | determined to be eligible, the contractor shall receive the |
| 180 | benefit of the exemption in this subsection through a refund of |
| 181 | previously paid taxes for transactions that otherwise would have |
| 182 | been exempt. A refund may not be made for such taxes without the |
| 183 | issuance of a certification by the authority that the contractor |
| 184 | was authorized to make purchases tax-exempt and a determination |
| 185 | by the Department of Revenue that the purchases qualified for |
| 186 | the exemption. |
| 187 | (f) The authority may adopt rules governing the |
| 188 | application process for exemption of a contractor as an |
| 189 | authorized agent of the authority. |
| 190 | (g) The Department of Revenue may adopt rules governing |
| 191 | the issuance and form of high-speed rail system exemption |
| 192 | permits, the audit of contractors and subcontractors using such |
| 193 | permits, the recapture of taxes on nonqualified purchases, and |
| 194 | the manner and form of refund applications. |
| 195 | Section 3. This act shall take effect January 1, 2005. |