HB 1283

1	A bill to be entitled
2	An act relating to innovation incentives; creating s.
3	288.1089, F.S.; providing legislative findings and intent;
4	creating within the Office of Tourism, Trade, and Economic
5	Development the Innovation Incentive Program for certain
6	purposes; providing definitions; limiting innovation
7	incentive awards; establishing the Innovation Incentive
8	Account within the Economic Development Trust Fund;
9	providing award application and eligibility requirements
10	and procedures; providing business applicant qualification
11	requirements; providing proposal evaluation and
12	recommendations requirements for Enterprise Florida, Inc.;
13	authorizing the office to negotiate award amounts to
14	applicants; providing negotiation requirements; requiring
15	the director of the office to make recommendations to the
16	Governor for approval or disapproval of certain projects;
17	providing recommendation requirements; requiring
18	consultation with the Legislature; providing for
19	certification of applicants as qualified innovation
20	businesses; providing for incentive payment agreements;
21	providing requirements for investment of funds in the
22	Innovation Incentive Account within the Economic
23	Development Trust Fund; requiring Enterprise Florida,
24	Inc., to assist the office in validating certain business
25	performances; requiring a report; authorizing the Governor
26	to reallocate certain funds for certain purposes;
27	providing for transfer of certain unallocated funds to the
28	General Revenue Fund; providing for future repeal of s.
29	288.1089, F.S., relating to the Innovation Incentive
30	Program; providing appropriations; providing limitations;
31	providing effective dates.
32
33	Be It Enacted by the Legislature of the State of Florida:
34
35	Section 1.  Section 288.1089, Florida Statutes, is created
36	to read:
37	288.1089  Innovation incentive.--
38	(1)  LEGISLATIVE FINDINGS AND INTENT; CREATION OF
39	INNOVATION INCENTIVE PROGRAM.--
40	(a)  The Legislature finds that science-based research
41	projects of significant scale and world-class excellence can
42	help to strengthen and expedite the growth of the innovation
43	economy of this state. World-class research institutes and
44	research and development operations can serve as catalysts for
45	evolving technology clusters, boost the talent base of this
46	state at the very highest levels, benefit the existing research
47	and university base of this state with increased research and
48	development collaboration, and help to spawn new businesses
49	based in this state. Serious regional, national, and
50	international competition exists for these projects and in most
51	instances, when all available resources for economic development
52	have been used, the state continues to encounter severe
53	competitive disadvantages in vying for these research and
54	development opportunities.
55	(b)  The Legislature further finds that attracting,
56	retaining, and providing favorable conditions for the growth of
57	certain innovation business operations in this state provides
58	widespread economic benefits to the public through high-quality
59	employment opportunities at such operations and in related
60	operations attracted to this state or region through an enhanced
61	entrepreneurial climate in the state or region, and the
62	resulting business and employment opportunities, and through the
63	stimulation and enhancement of the state's universities and
64	community colleges. As with research and development operations,
65	when all available resources for economic development have been
66	used, the state continues to encounter severe competitive
67	disadvantages in vying for these high-impact business
68	operations.
69	(c)  It is the intent of the Legislature to provide
70	resources to meet the unique needs of attracting the growth and
71	location of catalyst projects in this state of a significant
72	scale that will serve as platforms for emerging or evolving
73	technology clusters or increase research, development, and
74	collaboration between the universities of this state and the
75	state's private sector and, in so doing, make meaningful
76	progress toward an unparalleled state of innovation.
77	(d)  The Legislature therefore hereby creates within the
78	Office of Tourism, Trade, and Economic Development the
79	Innovation Incentive Program for qualified innovation businesses
80	to ensure that sufficient resources shall be available to
81	respond to extraordinary economic opportunities and to compete
82	effectively for those research and development operations and
83	innovation business projects in this state.
84	(2)  DEFINITIONS.--As used in this section:
85	(a)  "Average wage" means the statewide private sector
86	average wage or the average of all private sector wages and
87	salaries in the county or in the standard metropolitan area in
88	which the applicant is located as determined by the Agency for
89	Workforce Innovation.
90	(b)  "Competitive gap" means the difference between the
91	cost and benefits of locating the project in this state versus
92	identified locations under consideration in other states or
93	countries when the total cost of start-up and operations,
94	incentive offers, and other relevant factors are considered in
95	this state versus those alternative locations.
96	(c)  "Cumulative investment" means the total private
97	investment in buildings and equipment made by a qualified, new
98	business since the beginning of construction of such facility or
99	an expanding business in this state since the beginning of the
100	expansion project.
101	(d)  "Director" means the director of the Office of
102	Tourism, Trade, and Economic Development.
103	(e)  "Eligible business" means a business meeting the
104	requirements of subsection (5).
105	(f)  "Fiscal year" means the state fiscal year.
106	(g)  "Jobs" means full-time equivalent positions, as that
107	term is consistent with terms used by the Agency for Workforce
108	Innovation and the United States Department of Labor for
109	purposes of unemployment compensation tax administration and
110	employment estimation, resulting directly from a project in this
111	state. The term does not include temporary construction jobs
112	involved in the construction of a project facility.
113	(h)  "Match" means funding from local sources, public or
114	private, which is paid to the qualified business and which is
115	equal to 100 percent of an award. Eligible match funding may
116	include any tax abatement granted to that business under s.
117	196.1995 or the appraised market value of land, buildings,
118	infrastructure, or equipment conveyed or provided at a discount
119	to that business. Complete documentation of a match payment or
120	other conveyance must be presented to and verified by the office
121	prior to transfer of state funds to the qualified business. A
122	qualified business may not provide, directly or indirectly, more
123	than 5 percent of match funding in any fiscal year. The sources
124	of such funding may not include, directly or indirectly, state
125	funds appropriated from the General Revenue Fund or any state
126	trust fund, excluding tax revenues shared with local governments
127	pursuant to law.
128	(i)  "Office" means the Office of Tourism, Trade, and
129	Economic Development.
130	(j)  "Predominately" means at least 50 percent of the time.
131	(k)  "Qualified business" means an eligible business that
132	has been approved to receive an economic investment innovation
133	fund incentive award.
134	(l)  "Research and development" means basic and applied
135	research in the sciences or engineering, as well as the design,
136	development, and testing of prototypes or processes of new or
137	improved products. Research and development does not include
138	market research, routine consumer product testing, sales
139	research, research in the social sciences or psychology,
140	nontechnological activities, or technical services.
141	(m)  "Research and development facility" means a facility
142	that is predominately engaged in research and development
143	activities.
144	(3)  INNOVATION INCENTIVE AWARDS; LIMITATION.--The total
145	amount of active innovation incentive awards may not exceed the
146	amount remaining in the Innovation Incentive Account within the
147	Economic Development Trust Fund, which account is established.
148	(4)  AWARD APPLICATION; ELIGIBILITY.--To be eligible for
149	consideration for an innovation incentive award, a business or
150	research and development entity must submit a written
151	application to Enterprise Florida, Inc., before the applicant
152	has made the decision to locate new operations in this state or
153	before the applicant has made the decision to expand an existing
154	operation in this state. The application shall include, but not
155	be limited to:
156	(a)  The applicant's federal employer identification
157	number, unemployment account number, and state sales tax
158	registration number. If such numbers are not available at the
159	time of application, they must be submitted to the office in
160	writing prior to the disbursement of any payments under this
161	section.
162	(b)  The location in this state at which the project is
163	located or is to be located.
164	(c)  A description of the type of business activity,
165	product, or research and development undertaken by the project,
166	including six-digit North American Industry Classification
167	System codes for all activities included in the project.
168	(d)  The applicant's projected investment in the project.
169	(e)  The total investment, from all sources, in the
170	project.
171	(f)  The number of net new full-time equivalent jobs in
172	this state the applicant anticipates having created as of
173	December 31 of each year of the project and the average wage of
174	such jobs.
175	(g)  The total number of full-time equivalent employees
176	currently employed by the applicant in this state and the number
177	employed at the facility.
178	(h)  The anticipated commencement date of the project.
179	(i)  A detailed explanation of why the innovation incentive
180	is needed to induce the applicant to expand or locate in the
181	state and how the incentive will close or help close the
182	competitive gap impeding the applicant's decision to locate or
183	expand in this state.
184	(j)  If applicable, an estimate of the proportion of the
185	revenues resulting from the project that will be generated
186	outside this state.
187	(5)  REVIEW QUALIFICATIONS.--To qualify for review by the
188	office, the applicant must, at a minimum, establish the
189	following to the satisfaction of Enterprise Florida, Inc., and
190	the office:
191	(a)  The jobs proposed to be created under the application
192	must pay an estimated annual average wage equaling at least 130
193	percent of the average private sector wage in the area where the
194	applicant is to be located or the statewide private sector
195	average wage. The office may waive this average wage requirement
196	at its discretion or at the request of Enterprise Florida, Inc.
197	The wage requirement may only be waived for a project located in
198	a brownfield area designated under s. 376.80, in a rural city or
199	rural county as defined in s. 288.106, or in an enterprise zone
200	and only when the merits of the individual project or the
201	specific circumstances in the community in relationship to the
202	project warrant such action. If Enterprise Florida, Inc., makes
203	such a recommendation, the recommendation must be transmitted in
204	writing and the specific justification for the waiver
205	recommendation must be explained. If the director elects to
206	waive the wage requirement, the waiver must be stated in writing
207	and the reasons for granting the waiver must be explained.
208	(b)  For a research and development project:
209	1.  The project must serve as a catalyst for an emerging or
210	evolving technology cluster.
211	2.  The project must demonstrate a plan for significant
212	higher education collaboration.
213	3.  The project must provide the state a break-even return
214	on investment within a 20-year period.
215	4.  The project must be provided with a one to one match
216	from the local community. The match requirement may be reduced
217	or waived in rural areas of critical economic concern or reduced
218	in rural communities, brownfields, and enterprise zones within
219	an urban county.
220	(c)  For a innovation business project in this state, other
221	than a research and development project:
222	1.a.  The project must result in the creation of at least
223	1,000 direct, new jobs at the business; or
224	b.  If the project is located in a rural city or rural
225	county as defined in s. 288.106, the project must result in the
226	creation of at least 750 direct, new jobs.
227	2.  The activity or product for the applicant's project
228	must be within an industry or industries that have been
229	designated as a target industry business under s. 288.106 or a
230	high-impact sector under s. 288.108.
231	3.a.  The cumulative investment in the project is at least
232	$500 million within a 3-year period; or
233	b.  If the project is located in a rural city or rural city
234	as defined in s. 288.106, or in an enterprise zone, the
235	cumulative investment in the project must exceed $375 million
236	within a 3-year period.
237	(6)  PROPOSAL EVALUATION AND RECOMMENDATIONS.--Enterprise
238	Florida, Inc., shall evaluate individual proposals for
239	innovation incentive projects and transmit to the office
240	recommendations regarding the use of appropriated funds for such
241	projects. Such evaluation and recommendation must include, but
242	need not be limited to:
243	(a)  A description of the type of operation, its required
244	facilities, and the associated product, service, or research and
245	development associated with the project.
246	(b)  The number of full-time equivalent jobs that will be
247	created by the project, the total estimated average annual wages
248	of such jobs, and the types of business activities and jobs
249	stimulated by the investment.
250	(c)  The cumulative investment to be dedicated to the
251	project within 3 years and the total investment expected in the
252	project if more than 3 years.
253	(d)  The economic and fiscal impacts on the local and state
254	economies relative to investment.
255	(e)  A statement of any special impacts the project is
256	expected to stimulate in a particular business sector in the
257	state or regional economy or in the state's universities and
258	community colleges.
259	(f)  A statement of any anticipated or proposed
260	relationships with state universities.
261	(g)  A statement of the role the incentive is expected to
262	play in the decision of the applicant to locate or expand in
263	this state.
264	(h)  A recommendation of the amount of the innovation
265	incentive that is needed to close a competitive gap, including
266	an explanation of why an incentive of that amount is needed to
267	induce the applicant to expand or locate in this state.
268	(i)  A discussion of the efforts and commitments made by
269	the local community in which the project is to be located to
270	induce the project location or expansion, taking into
271	consideration local resources and abilities.
272	(j)  A recommendation for specific performance criteria the
273	applicant would be expected to achieve to receive any payments
274	from the fund and penalties or sanctions for failure to meet or
275	maintain performance conditions.
276	(k)  For a research and development facility project:
277	1.  A description of the extent to which the project has
278	the potential to serve as catalyst for an emerging or evolving
279	technology cluster.
280	2.  The percentage of match provided for the project.
281	3.  A description of the extent to which the project has or
282	could have a long-term collaborative research and development
283	relationship with a state university or community college.
284	4.  A description of the existing or projected impact of
285	the project on established technology clusters or targeted
286	industry sectors.
287	5.  A description of the project's contribution to the
288	diversity and resiliency of the innovation economy of this
289	state.
290	6.  A description of the project's impact on special needs
291	communities, including, but not limited to, rural areas,
292	distressed urban areas, and enterprise zones.
293	(7)  AWARD NEGOTIATION; CONSIDERATIONS.--The office, in
294	consultation with Enterprise Florida, Inc., may negotiate the
295	proposed amount of an award for any eligible applicant. In
296	negotiating such award, the office shall consider the amount of
297	the incentive needed to close the competitive gap in conjunction
298	with other relevant applicant impact and cost information and
299	analysis as described in this section. Particular emphasis shall
300	be given to the potential for the project to stimulate
301	additional private investment and high-quality employment
302	opportunities in the area.
303	(8)  AWARD APPROVAL OR DISAPPROVAL.--Upon receipt of the
304	evaluation and recommendation from Enterprise Florida, Inc., the
305	director shall recommend to the Governor approval or disapproval
306	of a project. In recommending approval of a project, the
307	director shall include proposed performance conditions that the
308	project must meet to obtain incentive funds and any other
309	conditions that must be met prior to the receipt of any
310	incentive funds. The Governor shall consult with the President
311	of the Senate and the Speaker of the House of Representatives
312	before giving approval for a project. Upon approval of a
313	project, the Executive Office of the Governor shall release the
314	funds pursuant to the legislative consultation and review
315	requirements set forth in 216.177.
316	(9)  AWARD AGREEMENT.--Upon approval by the Governor and
317	release of the funds as set forth in subsection (8), the
318	director shall issue a letter certifying the applicant as a
319	qualified innovation business. The office and the business shall
320	enter into an agreement that sets forth the conditions for
321	payment of incentives. The agreement must include the total
322	amount of funds awarded; the performance conditions that must be
323	met to obtain the award or portions of the award, including, but
324	not limited to, net new employment in the state, average wage,
325	and total investment; demonstration of a baseline of current
326	service and a measure of enhanced capability; the methodology
327	for validating performance; the schedule of payments; and
328	sanctions for failure to meet performance conditions.
329	(10)  INVESTMENT OF FUNDS.--Funds allocated to the
330	Innovation Incentive Account shall be invested pursuant to s.
331	17.57, and any interest earned on such investments shall be
332	transferred from the Economic Development Trust Fund to the
333	General Revenue Fund.
334	(11)  PERFORMANCE VALIDATION; REPORT.--Enterprise Florida,
335	Inc., shall assist the office in validating the qualified
336	business's performance. At the conclusion of the innovation
337	incentive award agreement, or its earlier termination,
338	Enterprise Florida, Inc. shall, within 90 days, report the
339	results of the innovation incentive award to the Governor, the
340	President of the Senate, and the Speaker of the House of
341	Representatives.
342	(12)  ADDITIONAL USES OF INNOVATION INCENTIVE PROGRAM
343	ALLOCATIONS.--The Governor may, in an emergency or special
344	circumstance, and in consultation with the President of the
345	Senate and the Speaker of the House of Representatives,
346	reallocate unencumbered funds appropriated to the Innovation
347	Incentive Program to supplement economic development programs
348	and operations established by law. The Executive Office of the
349	Governor shall recommend approval of the transfer and release of
350	the funds pursuant to the legislative consultation and review
351	requirements set forth in s. 216.177.
352	Section 2.  Effective July 1, 2011, s. 288.1089, Florida
353	Statutes, is repealed. Upon that date, any unobligated funds
354	remaining in the Economic Development Trust Fund from the
355	transfer made in section 3 of this act shall be transferred back
356	to the General Revenue Fund. Notwithstanding the provisions of
357	s. 216.301(1), Florida Statutes, and pursuant to s. 216.351,
358	Florida Statutes, any funds remaining in the Innovation
359	Incentive Account within the Economic Development Trust Fund
360	that are obligated to a properly approved project under the
361	Innovation Incentive Program, but that are only partially
362	disbursed, shall remain in the Economic Development Trust Fund
363	to be disbursed by the Office of Tourism, Trade, and Economic
364	Development pursuant to the terms of the originally approved
365	contract.
366	Section 3.  For fiscal year 2006-2007, the sum of
367	$250,000,000 is transferred from the General Revenue Fund to the
368	Innovation Incentive Account within the Economic Development
369	Trust Fund to be used for the purposes of the Innovation
370	Incentive Program under s. 288.1089, Florida Statutes. Funds
371	transferred under this section are not subject to the service
372	charge set forth in s. 215.20, Florida Statutes.
373	Section 4.  Beginning in fiscal year 2006-2007 and annually
374	for the next 4 fiscal years, the sum of $50,000,000 is
375	appropriated from the Innovation Incentive Account within the
376	Economic Development Trust Fund to the Office of Tourism, Trade,
377	and Economic Development to be used to implement the purposes of
378	the Innovation Incentive Program. During any fiscal year to
379	which this act applies, the Office of Tourism, Trade, and
380	Economic Development may request additional budget authority as
381	necessary to locate a new business in this state or to expand an
382	existing business in this state so long as the request meets the
383	purposes of the Innovation Incentive Program and is approved
384	pursuant to s. 288.1089(8), Florida Statutes. However, under no
385	circumstances shall the total funds used to implement the
386	Innovation Incentive Program exceed the amount funded under
387	section 3 of this act.
388	Section 5.  Except as otherwise expressly provided in this
389	act, this act shall take effect July 1, 2006.

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