Senate Bill sb2212c1

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    Florida Senate - 2005                           CS for SB 2212

    By the Committee on Commerce and Consumer Services; and
    Senator Saunders




    577-1842-05

  1                      A bill to be entitled

  2         An act relating to economic development;

  3         amending s. 212.08, F.S.; conforming provisions

  4         to the designated urban job tax credit area

  5         revision; amending s. 212.097, F.S.; revising

  6         provisions providing for an urban job tax

  7         credit program to apply to designated urban job

  8         tax credit areas rather than high-crime areas;

  9         revising and providing definitions, eligibility

10         criteria, application procedures and

11         requirements, and area characteristics and

12         criteria; amending s. 220.1895, F.S., to

13         conform; deleting an obsolete provision;

14         amending s. 288.99, F.S.; conforming provisions

15         to the designated urban job tax credit area

16         revision; providing an effective date.

17  

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

19  

20         Section 1.  Paragraph (o) of subsection (5) of section

21  212.08, Florida Statutes, is amended to read:

22         212.08  Sales, rental, use, consumption, distribution,

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

24  the rental, the use, the consumption, the distribution, and

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

26  following are hereby specifically exempt from the tax imposed

27  by this chapter.

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

29         (o)  Building materials in redevelopment projects.--

30         1.  As used in this paragraph, the term:

31  

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 1         a.  "Building materials" means tangible personal

 2  property that becomes a component part of a housing project or

 3  a mixed-use project.

 4         b.  "Housing project" means the conversion of an

 5  existing manufacturing or industrial building to housing units

 6  in a designated an urban job tax credit high-crime area,

 7  enterprise zone, empowerment zone, Front Porch Community,

 8  designated brownfield area, or urban infill area and in which

 9  the developer agrees to set aside at least 20 percent of the

10  housing units in the project for low-income and

11  moderate-income persons or the construction in a designated

12  brownfield area of affordable housing for persons described in

13  s. 420.0004(9), (10), or (14), or in s. 159.603(7).

14         c.  "Mixed-use project" means the conversion of an

15  existing manufacturing or industrial building to mixed-use

16  units that include artists' studios, art and entertainment

17  services, or other compatible uses. A mixed-use project must

18  be located in a designated an urban job tax credit high-crime

19  area, enterprise zone, empowerment zone, Front Porch

20  Community, designated brownfield area, or urban infill area,

21  and the developer must agree to set aside at least 20 percent

22  of the square footage of the project for low-income and

23  moderate-income housing.

24         d.  "Substantially completed" has the same meaning as

25  provided in s. 192.042(1).

26         2.  Building materials used in the construction of a

27  housing project or mixed-use project are exempt from the tax

28  imposed by this chapter upon an affirmative showing to the

29  satisfaction of the department that the requirements of this

30  paragraph have been met. This exemption inures to the owner

31  through a refund of previously paid taxes. To receive this

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    Florida Senate - 2005                           CS for SB 2212
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 1  refund, the owner must file an application under oath with the

 2  department which includes:

 3         a.  The name and address of the owner.

 4         b.  The address and assessment roll parcel number of

 5  the project for which a refund is sought.

 6         c.  A copy of the building permit issued for the

 7  project.

 8         d.  A certification by the local building code

 9  inspector that the project is substantially completed.

10         e.  A sworn statement, under penalty of perjury, from

11  the general contractor licensed in this state with whom the

12  owner contracted to construct the project, which statement

13  lists the building materials used in the construction of the

14  project and the actual cost thereof, and the amount of sales

15  tax paid on these materials. If a general contractor was not

16  used, the owner shall provide this information in a sworn

17  statement, under penalty of perjury. Copies of invoices

18  evidencing payment of sales tax must be attached to the sworn

19  statement.

20         3.  An application for a refund under this paragraph

21  must be submitted to the department within 6 months after the

22  date the project is deemed to be substantially completed by

23  the local building code inspector. Within 30 working days

24  after receipt of the application, the department shall

25  determine if it meets the requirements of this paragraph. A

26  refund approved pursuant to this paragraph shall be made

27  within 30 days after formal approval of the application by the

28  department. The provisions of s. 212.095 do not apply to any

29  refund application made under this paragraph.

30  

31  

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 1         4.  The department shall establish by rule an

 2  application form and criteria for establishing eligibility for

 3  exemption under this paragraph.

 4         5.  The exemption shall apply to purchases of materials

 5  on or after July 1, 2000.

 6         Section 2.  Section 212.097, Florida Statutes, is

 7  amended to read:

 8         212.097  Designated Urban High-Crime Area Job Tax

 9  Credit Area Program.--

10         (1)  As used in this section, the term:

11         (a)  "Eligible business" means any sole proprietorship,

12  firm, partnership, or corporation that is located in a

13  designated urban job tax credit area qualified county and is

14  predominantly engaged in, or is headquarters for a business

15  predominantly engaged in, activities usually provided for

16  consideration by firms classified within the following

17  standard industrial classifications: SIC 01-SIC 09

18  (agriculture, forestry, and fishing); SIC 20-SIC 39

19  (manufacturing); SIC 52-SIC 57 and SIC 59 (retail); SIC 422

20  (public warehousing and storage); SIC 70 (hotels and other

21  lodging places); SIC 7391 (research and development); SIC 781

22  (motion picture production and allied services); SIC 7992

23  (public golf courses); and SIC 7996 (amusement parks); and a

24  targeted industry eligible for the qualified target industry

25  business tax refund under s. 288.106. A call center or similar

26  customer service operation that services a multistate market

27  or international market is also an eligible business. In

28  addition, the Office of Tourism, Trade, and Economic

29  Development may, as part of its final budget request submitted

30  pursuant to s. 216.023, recommend additions to or deletions

31  from the list of standard industrial classifications used to

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    Florida Senate - 2005                           CS for SB 2212
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 1  determine an eligible business, and the Legislature may

 2  implement such recommendations. Excluded from eligible

 3  receipts are receipts from retail sales, except such receipts

 4  for SIC 52-SIC 57 and SIC 59 (retail) hotels and other lodging

 5  places classified in SIC 70, public golf courses in SIC 7992,

 6  and amusement parks in SIC 7996. For purposes of this

 7  paragraph, the term "predominantly" means that more than 50

 8  percent of the business's gross receipts from all sources is

 9  generated by those activities usually provided for

10  consideration by firms in the specified standard industrial

11  classification. The determination of whether the business is

12  located in a designated urban job tax credit qualified

13  high-crime area and the tier ranking of that area must be

14  based on the date of application for the credit under this

15  section. Commonly owned and controlled entities are to be

16  considered a single business entity.

17         (b)  "Qualified employee" means any employee of an

18  eligible business who performs duties in connection with the

19  operations of the business on a regular, full-time basis for

20  an average of at least 36 hours per week for at least 3 months

21  within the designated urban job tax credit qualified

22  high-crime area in which the eligible business is located. An

23  owner or partner of the eligible business is not a qualified

24  employee. The term also includes an employee leased from an

25  employee leasing company licensed under chapter 468, if such

26  employee has been continuously leased to the employer for an

27  average of at least 36 hours per week for more than 6 months.

28         (c)  "New business" means any eligible business first

29  beginning operation on a site in a designated urban job tax

30  credit qualified high-crime area and clearly separate from any

31  other commercial or business operation of the business entity

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    Florida Senate - 2005                           CS for SB 2212
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 1  within a designated urban job tax credit qualified high-crime

 2  area. A business entity that operated an eligible business

 3  within a designated urban job tax credit qualified high-crime

 4  area within the 48 months before the period provided for

 5  application by subsection (2) is not considered a new

 6  business.

 7         (d)  "Existing business" means any eligible business

 8  that does not meet the criteria for a new business.

 9         (e)  "Designated urban job tax credit Qualified

10  high-crime area" means an area selected by the Office of

11  Tourism, Trade, and Economic Development in the following

12  manner: every fifth third year, the office shall designate

13  rank and tier those areas nominated under subsection (7),

14  according to the highest level of distress experienced in the

15  categories enumerated under subsection (7). The Office of

16  Tourism, Trade, and Economic Development shall designate the

17  30 highest-distress-profile urban areas as eligible

18  participants under the Designated Urban Job Tax Credit Area

19  Program. following prioritized criteria:

20         1.  Highest arrest rates within the geographic area for

21  violent crime and for such other crimes as drug sale, drug

22  possession, prostitution, vandalism, and civil disturbances;

23         2.  Highest reported crime volume and rate of specific

24  property crimes such as business and residential burglary,

25  motor vehicle theft, and vandalism;

26         3.  Highest percentage of reported index crimes that

27  are violent in nature;

28         4.  Highest overall index crime volume for the area;

29  and

30         5.  Highest overall index crime rate for the geographic

31  area.

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 1  

 2  Tier-one areas are ranked 1 through 5 and represent the

 3  highest crime areas according to this ranking. Tier-two areas

 4  are ranked 6 through 10 according to this ranking. Tier-three

 5  areas are ranked 11 through 15. Notwithstanding this

 6  definition, "designated urban job tax credit qualified

 7  high-crime area" also means an area that has been designated

 8  as a federal Empowerment Zone pursuant to the Taxpayer Relief

 9  Act of 1997 or the Community Tax Relief Act of 2000. An area

10  designated under this section as of December 31, 2005, shall

11  retain the designation through December 31, 2010, and a

12  business that is eligible for the tax credit as of June 30,

13  2005, within a designated area shall retain the same tax

14  credit amounts through December 31, 2010, which were available

15  to the business on June 30, 2005, if the business complies

16  with the job-creation requirements. An area designated

17  pursuant to this section shall retain the designation for a

18  period not to exceed 5 years after the effective date of

19  designation. Thereafter, any such area or any other area

20  eligible for designation may seek approval from the office for

21  designation. Such a designated area is ranked in tier three

22  until the areas are reevaluated by the Office of Tourism,

23  Trade, and Economic Development.

24         (f)  "Urban" means a densely populated nonrural area

25  located within an urban county that consists of a cluster of

26  one or more census blocks, each of which has a population

27  density of at least 400 people per square mile, or an area

28  defined as an urbanized area by the most recent United States

29  Census.

30         (g)  "Urban infill and redevelopment area" means an

31  area or areas designated by a local government where:

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 1         1.  Public services such as water and wastewater,

 2  transportation, schools, and recreation are already available

 3  or are scheduled to be provided in an adopted 5-year schedule

 4  of capital improvements;

 5         2.  The area, or one or more neighborhoods within the

 6  area, suffers from pervasive poverty, unemployment, and

 7  general distress as defined by s. 290.0058;

 8         3.  The area exhibits a proportion of properties that

 9  are substandard, overcrowded, dilapidated, vacant or

10  abandoned, or functionally obsolete which is higher than the

11  average for the local government;

12         4.  More than 50 percent of the area is within  1/4

13  mile of a transit stop, or a sufficient number of such transit

14  stops will be made available concurrent with the designation;

15  and

16         5.  The area includes or is adjacent to community

17  redevelopment areas, brownfields, enterprise zones, or Main

18  Street programs, or has been designated by the state or

19  Federal Government as an urban redevelopment, revitalization,

20  or infill area under empowerment zone, enterprise community,

21  or brownfield showcase community programs or similar programs.

22         (2)  A new eligible business may apply for a tax credit

23  under this subsection once at any time during its first year

24  of operation. A new eligible business in a designated urban

25  job tax credit tier-one qualified high-crime area which has at

26  least 10 qualified employees on the date of application shall

27  receive a $1,500 tax credit for each such employee. A new

28  eligible business in a tier-two qualified high-crime area

29  which has at least 20 qualified employees on the date of

30  application shall receive a $1,000 tax credit for each such

31  employee. A new eligible business in a tier-three qualified

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 1  high-crime area which has at least 30 qualified employees on

 2  the date of application shall receive a $500 tax credit for

 3  each such employee.

 4         (3)  An existing eligible business may apply for a tax

 5  credit under this subsection at any time it is entitled to

 6  such credit, except as restricted by this subsection. An

 7  existing eligible business in a designated urban job tax

 8  credit tier-one qualified high-crime area which on the date of

 9  application has at least 5 more qualified employees than it

10  had 1 year prior to its date of application shall receive a

11  $1,500 tax credit for each such additional employee. An

12  existing eligible business in a tier-two qualified high-crime

13  area which on the date of application has at least 10 more

14  qualified employees than it had 1 year prior to its date of

15  application shall receive a $1,000 credit for each such

16  additional employee. An existing business in a tier-three

17  qualified high-crime area which on the date of application has

18  at least 15 more qualified employees than it had 1 year prior

19  to its date of application shall receive a $500 tax credit for

20  each such additional employee. An existing eligible business

21  may apply for the credit under this subsection no more than

22  once in any 12-month period. Any existing eligible business

23  that received a credit under subsection (2) may not apply for

24  the credit under this subsection sooner than 12 months after

25  the application date for the credit under subsection (2).

26         (4)  For any new eligible business receiving a credit

27  pursuant to subsection (2), an additional $500 credit shall be

28  provided for any qualified employee who is a welfare

29  transition program participant. For any existing eligible

30  business receiving a credit pursuant to subsection (3), an

31  additional $500 credit shall be provided for any qualified

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 1  employee who is a welfare transition program participant. Such

 2  employee must be employed on the application date and have

 3  been employed less than 1 year. This credit shall be in

 4  addition to other credits pursuant to this section regardless

 5  of the tier-level of the high-crime area. Appropriate

 6  documentation concerning the eligibility of an employee for

 7  this credit must be submitted as determined by the department.

 8         (5)  To be eligible for a tax credit under subsection

 9  (3), the number of qualified employees employed 1 year prior

10  to the application date must be no lower than the number of

11  qualified employees on the application date on which a credit

12  under this section was based for any previous application,

13  including an application under subsection (2).

14         (6)  Any county or municipality, or a county and one or

15  more municipalities together, may apply to the Office of

16  Tourism, Trade, and Economic Development for the designation

17  of an area as a designated urban job tax credit high-crime

18  area after the adoption by the governing body or bodies of a

19  resolution that:

20         (a)  Finds that an urban a high-crime area exists in

21  such county or municipality, or in both the county and one or

22  more municipalities, which chronically exhibits extreme and

23  unacceptable levels of poverty, unemployment, physical

24  deterioration, and economic disinvestment.;

25         (b)  Determines that the rehabilitation, conservation,

26  or redevelopment, or a combination thereof, of such an urban a

27  high-crime area is necessary in the interest of the health,

28  safety, and welfare of the residents of such county or

29  municipality, or such county and one or more municipalities.;

30  and

31  

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 1         (c)  Determines that the revitalization of such an

 2  urban a high-crime area can occur if the public sector or

 3  private sector can be induced to invest its own resources in

 4  productive enterprises that build or rebuild the economic

 5  viability of the area.

 6         (7)  The governing body of the entity nominating the

 7  area shall demonstrate provide to the Office of Tourism,

 8  Trade, and Economic Development that the area following:

 9         (a)1.  Has at least forty percent of its residents

10  earning wages on an annual basis which are equal to or less

11  than the annual wage of a person who is earning minimum wage;

12  or

13         2.  Has more than 20 percent of its residents or

14  families living below the federal standard of poverty for

15  individuals or a family of four The overall index crime rate

16  for the geographic area;

17         (b)  The overall index crime volume for the area;

18         (b)(c)  Has an unemployment rate at least 3 percentage

19  points higher than the state's unemployment rate; The

20  percentage of reported index crimes that are violent in

21  nature;

22         (c)(d)  Has an arrest rate higher than the state's

23  average rate for such crimes as drug sale, drug possession,

24  prostitution, vandalism, and civil disturbances, as recorded

25  by the total crime index of the Department of Law Enforcement;

26  and The reported crime volume and rate of specific property

27  crimes such as business and residential burglary, motor

28  vehicle theft, and vandalism; and

29         (d)(e)1.  Has 50 percent or more of its residents who

30  rent;

31  

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 1         2.  Has property values that are within the lower 50

 2  percent of the county's assessed property values;

 3         3.  Has more than 5 percent of its commercial buildings

 4  currently vacant or condemned within the previous 24 months;

 5  or

 6         4.  With respect to at least 25 percent of tax or

 7  special assessment delinquencies, the amount of the

 8  delinquency exceeds the fair value of the land The arrest

 9  rates within the geographic area for violent crime and for

10  such other crimes as drug sale, drug possession, prostitution,

11  disorderly conduct, vandalism, and other public-order

12  offenses.

13         (8)  A municipality, or a county and one or more

14  municipalities together, may not nominate more than one urban

15  high-crime area. However, any county as defined by s.

16  125.011(1) may nominate no more than three urban high-crime

17  areas.

18         (9)  An area nominated by a county or municipality, or

19  a county and one or more municipalities together, for

20  designation as a designated urban job tax credit high-crime

21  area shall be eligible only if it meets the following

22  criteria:

23         (a)  The selected area does not exceed 20 square miles

24  and either has a continuous boundary or consists of not more

25  than three noncontiguous parcels;

26         (b)  The selected area does not exceed the following

27  mileage limitation:

28         1.  For areas communities having a total population of

29  150,000 persons or more, the selected area does not exceed 20

30  square miles and is within 10 miles of the urban infill and

31  redevelopment area of a city.

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 1         2.  For areas communities having a total population of

 2  50,000 persons or more, but fewer than 150,000 persons, the

 3  selected area does not exceed 10 square miles and is within

 4  7.5 miles of the urban infill and redevelopment area of a

 5  city.

 6         3.  For areas communities having a total population of

 7  20,000 persons or more, but fewer than 50,000 persons, the

 8  selected area does not exceed 5 square miles and is within 5

 9  miles of the urban infill and redevelopment area of a city.

10         4.  For areas communities having a total population of

11  fewer than 20,000 persons, the selected area does not exceed 3

12  square miles and is within 3 miles of the urban infill and

13  redevelopment area of a city.

14         (10)(a)  In order to claim this credit, an eligible

15  business must file under oath with the Office of Tourism,

16  Trade, and Economic Development a statement that includes the

17  name and address of the eligible business and any other

18  information that is required to process the application.

19         (b)  Within 30 working days after receipt of an

20  application for credit, the Office of Tourism, Trade, and

21  Economic Development shall review the application to determine

22  whether it contains all the information required by this

23  subsection and meets the criteria set out in this section.

24  Subject to the provisions of paragraph (c), the Office of

25  Tourism, Trade, and Economic Development shall approve all

26  applications that contain the information required by this

27  subsection and meet the criteria set out in this section as

28  eligible to receive a credit.

29         (c)  The maximum credit amount that may be approved

30  during any calendar year is $5 million, of which $1 million

31  shall be exclusively reserved for tier-one areas. The

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 1  Department of Revenue, in conjunction with the Office of

 2  Tourism, Trade, and Economic Development, shall notify the

 3  governing bodies in areas designated under this section as

 4  urban high-crime areas when the $5 million maximum amount has

 5  been reached. Applications must be considered for approval in

 6  the order in which they are received without regard to whether

 7  the credit is for a new or existing business. This limitation

 8  applies to the value of the credit as contained in approved

 9  applications. Approved credits may be taken in the time and

10  manner allowed pursuant to this section.

11         (11)  If the application is insufficient to support the

12  credit authorized in this section, the Office of Tourism,

13  Trade, and Economic Development shall deny the credit and

14  notify the business of that fact. The business may reapply for

15  this credit within 3 months after such notification.

16         (12)  If the credit under this section is greater than

17  can be taken on a single tax return, excess amounts may be

18  taken as credits on any tax return submitted within 12 months

19  after the approval of the application by the department.

20         (13)  It is the responsibility of each business to

21  affirmatively demonstrate to the satisfaction of the

22  Department of Revenue that it meets the requirements of this

23  section.

24         (14)  Any person who fraudulently claims this credit is

25  liable for repayment of the credit plus a mandatory penalty of

26  100 percent of the credit and is guilty of a misdemeanor of

27  the second degree, punishable as provided in s. 775.082 or s.

28  775.083.

29         (15)  A corporation may take the credit under this

30  section against its corporate income tax liability, as

31  provided in s. 220.1895. However, a corporation that applies

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 1  its job tax credit against the tax imposed by chapter 220 may

 2  not receive the credit provided for in this section. A credit

 3  may be taken against only one tax.

 4         (16)  The department shall adopt rules governing the

 5  manner and form of applications for credit and may establish

 6  guidelines concerning the requisites for an affirmative

 7  showing of qualification for the credit under this section.

 8         Section 3.  Section 220.1895, Florida Statutes, is

 9  amended to read:

10         220.1895  Rural Job Tax Credit and Designated Urban

11  High-Crime Area Job Tax Credit.--There shall be allowed a

12  credit against the tax imposed by this chapter amounts

13  approved by the Office of Tourism, Trade, and Economic

14  Development pursuant to the Rural Job Tax Credit Program in s.

15  212.098 and the Designated Urban High-Crime Area Job Tax

16  Credit Area Program in s. 212.097. A corporation that uses its

17  credit against the tax imposed by this chapter may not take

18  the credit against the tax imposed by chapter 212. If any

19  credit granted under this section is not fully used in the

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

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

22  carryover may be used in a subsequent year when the tax

23  imposed by this chapter for such year exceeds the credit for

24  such year under this section after applying the other credits

25  and unused credit carryovers in the order provided in s.

26  220.02(8). The Office of Tourism, Trade, and Economic

27  Development shall conduct a review of the Urban High-Crime

28  Area Job Tax Credit and the Rural Job Tax Credit Program and

29  submit its report to the Governor, the President of the

30  Senate, and the Speaker of the House of Representatives by

31  February 1, 2000.

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 1         Section 4.  Subsection (2) of section 288.99, Florida

 2  Statutes, is amended to read:

 3         288.99  Certified Capital Company Act.--

 4         (2)  PURPOSE.--The primary purpose of this act is to

 5  stimulate a substantial increase in venture capital

 6  investments in this state by providing an incentive for

 7  insurance companies to invest in certified capital companies

 8  in this state which, in turn, will make investments in new

 9  businesses or in expanding businesses, including

10  minority-owned or minority-operated businesses and businesses

11  located in a designated Front Porch community, enterprise

12  zone, designated urban job tax credit high-crime area, rural

13  job tax credit county, or nationally recognized historic

14  district. The increase in investment capital flowing into new

15  or expanding businesses is intended to contribute to

16  employment growth, create jobs which exceed the average wage

17  for the county in which the jobs are created, and expand or

18  diversify the economic base of this state.

19         Section 5.  This act shall take effect July 1, 2005.

20  

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 1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
 2                         Senate Bill 2212

 3                                 

 4  The committee substitute differs from the bill in that it:

 5  --   Removes the revision of the "business property used in an
         enterprise zone" sales tax incentive, restoring the
 6       current law purchase threshold of $5000;

 7  --   Provides that OTTED shall designate urban job tax credit
         areas every five years rather than three;
 8  
    --   Provides that an urban job tax that, designated as of
 9       December 31, 2005, shall retain that designation through
         December 31, 2010; and that eligible businesses will
10       retain the same tax credit amounts through 2010;

11  --   Replaces the definition of "central business district"
         (an obsolete census definition) with "urban infill and
12       redevelopment area";

13  --   Removes the proposed requirement that urban job tax area
         candidates demonstrate specific education
14       characteristics;

15  --   Revises the workforce and employment, crime, and property
         characteristics that an urban job tax area must
16       demonstrate to become designated;

17  --   Removes provisions allowing businesses in Designated
         Urban Job Tax Credit Areas, Rural Job Tax Credit Areas,
18       and Enterprise Zones to transfer unused credits;

19  --   Removes provisions authorizing OTTED to recertify
         existing enterprise zones and approved enterprise zone
20       boundary changes; and

21  --   Removes the extension of the Enterprise Zone Act repeal
         date.
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                                  17

CODING: Words stricken are deletions; words underlined are additions.