HB 1321

CS

CHAMBER ACTION

1	The Finance & Tax Committee recommends the following:
2
3	Council/Committee Substitute
4	Remove the entire bill and insert:
5	A bill to be entitled
6	An act relating to entertainment industry economic
7	development; amending s. 212.08, F.S.; providing for an
8	entertainment industry credit of sales and use taxes paid
9	on qualified expenditures; providing criteria,
10	requirements, procedures, and limitations on the credit;
11	providing for uses of the credit; providing duties and
12	responsibilities of the Office of Film and Entertainment
13	and the Department of Revenue; authorizing the Office of
14	Tourism, Trade, and Economic Development to adopt rules;
15	providing for liability for fraudulent credit
16	applications; amending s. 213.053, F.S.; authorizing the
17	Department of Revenue to provide certain tax credit and
18	tax refund information to the Office of Film and
19	Entertainment and the Office of Tourism, Trade, and
20	Economic Development; amending s. 220.02, F.S.; revising
21	the order of priority list of applicable credits against
22	certain taxes; creating s. 220.192, F.S.; providing for an
23	entertainment industry corporate income tax credit of a
24	percentage of certain qualified expenditures; providing
25	criteria, requirements, procedures, and limitations on the
26	credit; providing for uses and allocations of the credit;
27	authorizing the Office of Tourism, Trade, and Economic
28	Development to adopt rules; providing for liability for
29	fraudulent credit applications; providing for use and
30	carryforward of the credit; providing for transfers of the
31	credit; providing for noncorporate distributions of tax
32	credits; authorizing the Department of Revenue to adopt
33	rules; amending s. 288.1254, F.S.; revising the
34	entertainment industry financial incentive program to
35	provide corporate income tax and sales and use tax credits
36	to qualified entertainment entities rather than
37	reimbursements from appropriations; revising provisions
38	relating to definitions, creation and scope, application
39	procedures, approval process, eligibility, required
40	documents, qualified productions, and annual reports;
41	providing criteria and limitations for awards of tax
42	credits; providing marketing requirements; requiring the
43	Office of Tourism, Trade, and Economic Development and
44	Department of Revenue to adopt rules; providing liability
45	for reimbursement of certain costs and fees associated
46	with fraudulent applications; providing for future repeal;
47	providing an effective date.
48
49	Be It Enacted by the Legislature of the State of Florida:
50
51	Section 1.  Paragraph (r) is added to subsection (5) of
52	section 212.08, Florida Statutes, to read:
53	212.08  Sales, rental, use, consumption, distribution, and
54	storage tax; specified exemptions.--The sale at retail, the
55	rental, the use, the consumption, the distribution, and the
56	storage to be used or consumed in this state of the following
57	are hereby specifically exempt from the tax imposed by this
58	chapter.
59	(5)  EXEMPTIONS; ACCOUNT OF USE.--
60	(r)  Entertainment industry tax credit; authorization;
61	eligibility for credits.--
62	1.  Beginning July 1, 2006, a qualified production company
63	is eligible for tax credits of taxes paid on qualified
64	expenditures as defined in s. 288.1254 as provided in this
65	paragraph:
66	a.  The credit shall be granted as a refund of sales and
67	use tax paid by a qualifying production company on qualified
68	expenditures in the fiscal year preceding the date of
69	application.
70	b.  To be eligible to receive the credit, an applicant must
71	be a qualified production company as defined in s.
72	288.1258(1)(b).
73	c.  A qualified production company may not be awarded more
74	than $2 million in tax credits under this paragraph and s.
75	220.192 per year unless the production is a high-impact
76	television series, in which case the qualified production shall
77	be eligible for a maximum tax credit award of $3 million. The
78	tax credit available under this paragraph shall only be
79	surrendered in satisfaction of the tax owed by a qualified
80	production company under this chapter and only up to the face
81	amount of the credit. If the qualified production company cannot
82	use the entire tax credit in the taxable year in which the
83	credit is approved, any excess may be carried over to a
84	succeeding taxable year. A tax credit granted under this
85	paragraph and applied against taxes imposed under this chapter
86	may be carried forward only for a maximum of 5 taxable years
87	following the taxable year in which the credit was approved.
88	Five years after the date a credit is granted under this
89	paragraph, the credit expires and may not be used.
90	d.  The aggregate amount of tax credits allowed under this
91	paragraph and s. 220.192 in any state fiscal year is $25
92	million. If the total amount of allocated tax credits applied
93	for in any state fiscal year exceeds the aggregate amount of tax
94	credits authorized annually under this paragraph, such excess
95	shall be treated as having been applied for on the first day of
96	the next state fiscal year in which tax credits remain available
97	for allocation. However, no more than an aggregate amount of $30
98	million in tax credits shall be allocated between July 1, 2006,
99	and June 30, 2007. The cumulative amount of credits that may be
100	allocated between July 1, 2006, and June 30, 2009, shall not
101	exceed $75 million. At such time as $75 million of tax credits
102	have been allocated, no additional tax credits may be allocated.
103	e.  The tax credits awarded under this paragraph may only
104	be used by the qualified production company to whom the credits
105	were awarded. Credits awarded under this paragraph may not be
106	sold, assigned, or otherwise transferred, in whole or in part.
107	2.a.  To be eligible to receive the credit provided by this
108	paragraph, a qualified production company shall apply to the
109	Office of Film and Entertainment prior to September 1 of each
110	year for a refund of sales and use taxes paid on qualified
111	expenditures in the preceding fiscal year.
112	b.  The Office of Film and Entertainment shall develop,
113	with the cooperation of the department, a standardized
114	application form for use in applying for the credit.
115	c.  Upon receipt of an application, the Office of Film and
116	Entertainment shall review the application and information and
117	determine whether or not the application is complete within 10
118	working days. An application shall not be considered complete
119	unless the application includes copies of invoices upon which
120	Florida sales tax is separately stated, other proof that Florida
121	tax was paid on the purchase of the qualified expenditures, and
122	other documentation as required by the department. The Office of
123	Film and Entertainment shall notify the applicant within 15
124	calendar days of any deficiencies in the application. Upon
125	receipt of a completed application, the Office of Film and
126	Entertainment shall evaluate the application for credit under
127	this paragraph and issue an approval or a denial to the
128	applicant within an additional 15 calendar days. The Office of
129	Film and Entertainment shall provide the department with a copy
130	of each completed application that has been approved. Within 30
131	days after receiving a copy of an approval, the department shall
132	issue a refund directly to the qualified production company in
133	the amount shown on the approval issued by the Office of Film
134	and Entertainment, notwithstanding the provisions of s. 215.26.
135	The provisions of s. 212.095 do not apply to this paragraph.
136	d.  The Office of Tourism, Trade, and Economic Development
137	may adopt rules pursuant to ss. 120.536(1) and 120.54 to
138	implement this paragraph, including, but not limited to, rules
139	specifying requirements for the application and approval
140	process, records required for substantiation of credit awards,
141	and determination of and qualification for credit awards.
142	3.a.  Any applicant who submits an application under this
143	paragraph that includes fraudulent information is liable for
144	reimbursement of the reasonable costs and fees associated with
145	the review, processing, investigation, and prosecution of the
146	application.
147	b.  An eligible entity or company that obtains a credit
148	payment under this paragraph through a claim that is fraudulent
149	is liable for reimbursement of the credit amount paid plus a
150	penalty in an amount double the credit payment and reimbursement
151	of reasonable costs, which penalty is in addition to any
152	criminal penalty to which the entity or company is liable for
153	the same acts, plus interest. The entity or company is also
154	liable for costs and fees incurred by the state in investigating
155	and prosecuting the fraudulent claim.
156	Section 2.  Paragraph (k) of subsection (7) of section
157	213.053, Florida Statutes, is amended, and paragraph (y) is
158	added to that subsection, to read:
159	213.053  Confidentiality and information sharing.--
160	(7)  Notwithstanding any other provision of this section,
161	the department may provide:
162	(k)1.  Payment information relative to chapters 199, 201,
163	212, 220, 221, and 624 to the Office of Tourism, Trade, and
164	Economic Development, or its employees or agents that are
165	identified in writing by the office to the department, in the
166	administration of the tax refund program for qualified defense
167	contractors authorized by s. 288.1045 and the tax refund program
168	for qualified target industry businesses authorized by s.
169	288.106.
170	2.  Information relative to tax credits taken by a business
171	under s. 220.191 and exemptions or tax refunds received by a
172	business under s. 212.08(5)(j) and (r) to the Office of Tourism,
173	Trade, and Economic Development, or its employees or agents that
174	are identified in writing by the office to the department, in
175	the administration and evaluation of the capital investment tax
176	credit program authorized in s. 220.191 and the semiconductor,
177	defense, and space tax exemption program authorized in s.
178	212.08(5)(j).
179	(y)  Information relative to tax credits taken under s.
180	220.192 and tax refunds received by a business under s.
181	212.08(5)(r) to the Office of Film and Entertainment and the
182	Office of Tourism, Trade, and Economic Development.
183
184	Disclosure of information under this subsection shall be
185	pursuant to a written agreement between the executive director
186	and the agency. Such agencies, governmental or nongovernmental,
187	shall be bound by the same requirements of confidentiality as
188	the Department of Revenue. Breach of confidentiality is a
189	misdemeanor of the first degree, punishable as provided by s.
190	775.082 or s. 775.083.
191	Section 3.  Subsection (8) of section 220.02, Florida
192	Statutes, is amended to read:
193	220.02  Legislative intent.--
194	(8)  It is the intent of the Legislature that credits
195	against either the corporate income tax or the franchise tax be
196	applied in the following order: those enumerated in s. 631.828,
197	those enumerated in s. 220.191, those enumerated in s. 220.181,
198	those enumerated in s. 220.183, those enumerated in s. 220.182,
199	those enumerated in s. 220.1895, those enumerated in s. 221.02,
200	those enumerated in s. 220.184, those enumerated in s. 220.186,
201	those enumerated in s. 220.1845, those enumerated in s. 220.19,
202	those enumerated in s. 220.185, and those enumerated in s.
203	220.187, and those enumerated under s. 220.192.
204	Section 4.  Section 220.192, Florida Statutes, is created
205	to read:
206	220.192  Entertainment industry tax credit; authorization;
207	eligibility for credits.--
208	(1)  TAX CREDITS; ELIGIBILITY; AWARD;
209	ALLOCATION.--Beginning July 1, 2006, a qualified production
210	company is eligible for tax credits in the amount of 15 percent
211	of qualified expenditures, as defined in s. 288.1254.
212	(a)  The credit shall be granted against the tax imposed
213	and owing under this chapter by a qualifying production company
214	for the taxable year in which the application was granted.
215	(b)  To be eligible to receive the credit, an applicant
216	must be a qualified production company as defined in s.
217	288.1258(1)(b).
218	(c)  A qualified production company may not be awarded more
219	than a total of $2 million in tax credits under this section and
220	s. 212.08 per year unless the production is a high-impact
221	television series, in which case the production shall be
222	eligible for a maximum total tax credit award of $3 million. The
223	tax credit available under this section shall only be
224	surrendered in satisfaction of the tax owed under this chapter
225	by a qualified production company under this chapter and only up
226	to the face amount of the credit. If the qualified production
227	company cannot use the entire tax credit in the taxable year in
228	which the credit is approved, any excess may be carried over to
229	a succeeding taxable year. A tax credit granted under this
230	section and applied against taxes imposed under this chapter may
231	be carried forward only for a maximum of 5 taxable years
232	following the taxable year in which the credit was approved.
233	Five years after the date a credit is granted under this
234	section, the credit expires and may not be used.
235	(d)  The aggregate amount of tax credits allowed under this
236	section and s. 212.08(5)(r) in any state fiscal year is $25
237	million. If the total amount of allocated tax credits applied
238	for in any state fiscal year exceeds the aggregate amount of tax
239	credits authorized annually under this section, such excess
240	shall be treated as having been applied for on the first day of
241	the next state fiscal year in which tax credits remain available
242	for allocation. However, no more than an aggregate amount of $30
243	million in tax credits shall be allocated between July 1, 2006,
244	and June 30, 2007. The cumulative amount of credits that may be
245	allocated between July 1, 2006, and June 30, 2009, shall not
246	exceed $75 million. At such time as $75 million of tax credits
247	have been allocated, no additional tax credits may be allocated.
248	(2)  RULES.--The Office of Tourism, Trade, and Economic
249	Development may adopt rules pursuant to ss. 120.536(1) and
250	120.54 to implement this section, including, but not limited to,
251	rules specifying requirements for the application and approval
252	process, records required for substantiation of credit awards,
253	and determination of and qualification for credit awards.
254	(3)  FRAUDULENT CLAIMS.--
255	(a)  Any applicant who submits an application under this
256	section that includes fraudulent information is liable for
257	reimbursement of the reasonable costs and fees associated with
258	the review, processing, investigation, and prosecution of the
259	application.
260	(b)  An eligible entity or company that obtains a credit
261	payment under this section through a claim that is fraudulent is
262	liable for reimbursement of the credit amount paid plus a
263	penalty in an amount double the credit payment and reimbursement
264	of reasonable costs, which penalty is in addition to any
265	criminal penalty to which the entity or company is liable for
266	the same acts, plus interest. The entity or company is also
267	liable for costs and fees incurred by the state in investigating
268	and prosecuting the fraudulent claim.
269	(4)  USE OF TAX CREDIT; CARRY FORWARD.--The tax credit
270	available under this section shall only be surrendered in
271	satisfaction of the tax owed by a qualified production company
272	under this chapter and only up to the face amount of the credit.
273	If the qualified production company cannot use the entire tax
274	credit in the taxable year in which the credit is approved, any
275	excess may be carried over to a succeeding taxable year. A tax
276	credit granted under this section and applied against taxes
277	imposed under this chapter may be carried forward only for a
278	maximum of 5 taxable years following the taxable year in which
279	the credit was approved. Five years after the date a credit is
280	granted under this section, the credit expires and may not be
281	used.
282	(5)  TRANSFER OF TAX CREDITS.--Upon application to and
283	approval by the Department of Revenue, a qualified production
284	company may sell, in whole or in part, a tax credit granted
285	under this section. The sale or assignment of any amount of the
286	tax credit shall not be exchanged for consideration received by
287	the qualified production company of less than 85 percent of the
288	transferred amount of tax credit. The qualified production
289	company must transfer at least 10 percent of the remaining
290	credits to each purchaser and may not conduct more than three
291	transfers. The purchaser of the tax credit granted under s.
292	288.1254 shall use the tax credit in the state fiscal year the
293	tax credit is acquired from the qualified production company and
294	otherwise may carry the tax credit over subject to the same
295	limitations on tax credit usage as the qualified production
296	company awarded the tax credit. The purchaser of the tax credit
297	may not sell or otherwise transfer the tax credit. The
298	Department of Revenue may adopt rules pursuant to ss. 120.536(1)
299	and 120.54 to administer this subsection.
300	(6)  NONCORPORATE DISTRIBUTIONS OF TAX CREDITS.--A
301	qualified production company that is not a corporation as
302	defined in s. 220.03 shall elect to make an application to the
303	Department of Revenue to distribute tax credits awarded under
304	this section to its partners or members in proportion to the
305	respective distributive share of such partners' or members'
306	income or loss in the taxable fiscal year in which such tax
307	credits were approved. A tax credit granted under this section
308	and applied against taxes imposed under this chapter may be
309	carried forward only for a maximum of 5 taxable years following
310	the state fiscal year in which the credit was approved.
311	(7)  USE OF TAX CREDITS.--A qualified production company
312	may use the tax credit against the tax liability imposed under
313	this chapter, in whole or in part, or against the sales tax paid
314	on qualified expenditures as defined in s. 288.1254.
315	(8)  AGGREGATE TAX CREDIT AVAILABLE.--The aggregate amount
316	of tax credits allowed under this section in any state fiscal
317	year is $25 million. If the total amount of allocated tax
318	credits applied for in any state fiscal year exceeds the
319	aggregate amount of tax credits authorized annually under this
320	section, such excess shall be treated as having been applied for
321	on the first day of the next state fiscal year in which tax
322	credits remain available for allocation. However, no more than
323	an aggregate amount of $30 million in tax credits granted under
324	this section or s. 212.08(5)(r) shall be allocated between July
325	1, 2006, and June 30, 2007. The cumulative amount of credits
326	that may be allocated between July 1, 2006, and June 30, 2009,
327	may not exceed $75 million. At such time as $75 million of tax
328	credits granted under this section or s. 212.08(5)(r) have been
329	allocated, no additional tax credits shall be allocated.
330	(9)  RULES.--The Department of Revenue may adopt rules
331	pursuant to ss. 120.536(1) and 120.54 to administer the
332	provisions of this section, including rules governing the manner
333	and form of documentation required to claim tax credits granted
334	or transferred under this section, and may establish guidelines
335	as to the requirements for an affirmative showing of
336	qualification for tax credits granted or transferred under this
337	section.
338	Section 5.  Section 288.1254, Florida Statutes, is amended
339	to read:
340	288.1254  Entertainment industry financial incentive
341	program; creation; purpose; definitions; application procedure;
342	approval process; reimbursement eligibility; submission of
343	required documentation; recommendations for credit award
344	payment; policies and procedures; fraudulent claims.--
345	(1)  CREATION AND PURPOSE OF PROGRAM.--Subject to specific
346	appropriation, There is created within the Office of Film and
347	Entertainment an entertainment industry financial incentive
348	program. The purpose of this program is to encourage the use of
349	this state as a site for filming and developing and sustaining
350	the workforce and infrastructure providing production services
351	for filmed entertainment.
352	(2)  DEFINITIONS.--As used in this section, the term:
353	(a)  "Filmed entertainment" means a theatrical or
354	direct-to-video motion picture, a made-for-television motion
355	picture teleproduction, a commercial, a music video, an
356	industrial or educational film, a promotional video or film, a
357	documentary film, a television pilot, a television special, a
358	presentation for a television pilot, a television series,
359	including, but not limited to, a drama, a reality, a comedy, a
360	soap opera, a telenovela, a game show, and a miniseries
361	production, or a digital-media-effects production by the
362	entertainment industry to be sold or displayed in an electronic
363	medium, excluding news shows and sporting events. As used in
364	this paragraph, the term "motion picture" means a motion picture
365	made on or by film, tape, or otherwise and produced by means of
366	a motion picture camera, electronic camera or device, tape
367	device, any combination of the foregoing, or any other means,
368	method, or device now used or which may hereafter be adopted. As
369	used in this paragraph, the term "digital-media-effects" means
370	visual elements created through the modification of already
371	existing or newly created visual elements for film, video, or
372	animated media through the use of digital 2D/3D animation or
373	painting, motion capture, or compositing technologies. For
374	purposes of this section, the term "filmed entertainment" does
375	not include the electronic gaming industry or sporting events.
376	(b)  "High-impact television series" means a production
377	created to run multiple production seasons with an estimated
378	order of at least seven episodes per season and qualified
379	expenditures of at least $625,000 per episode.
380	(c)(b)  "Production costs" means the costs of real,
381	tangible, and intangible property used and services performed
382	primarily or customarily in the production, including
383	preproduction and postproduction, of qualified filmed
384	entertainment. Production costs generally include, but are not
385	limited to:
386	1.  Wages, salaries, or other compensation, including
387	amounts paid through payroll service companies, for technical
388	and production crews, directors, producers, and performers who
389	are residents of this state.
390	2.  Expenditures for sound stages, backlots, production
391	editing, digital effects, sound recordings, sets, and set
392	construction.
393	3.  Expenditures for rental equipment, including, but not
394	limited to, cameras and grip or electrical equipment.
395	4.  Expenditures for meals, travel, and accommodations, and
396	goods used in producing filmed entertainment that is located and
397	doing business in this state.
398	5.  Expenditures for goods and services used in producing
399	filmed entertainment.
400	(d)(c)  "Qualified expenditures" means production costs
401	incurred in this state within the current state fiscal year for
402	goods purchased or leased from or services provided by
403	purchased, leased, or employed from a resident of this state or
404	a vendor or supplier who is located and doing business in this
405	state or payments to residents of this state in the form of
406	salary, wages, or other compensation, but excluding wages,
407	salaries, or other compensation paid to the two highest-paid
408	residents of this state participating in the qualified
409	production employees.
410	(e)(d)  "Qualified production" means filmed entertainment
411	that meets or exceeds minimum qualified makes expenditures
412	required in this state for the total or partial production of
413	filmed entertainment. Productions that are deemed by the Office
414	of Film and Entertainment to contain obscene content, as defined
415	by the United States Supreme Court, are not qualified
416	productions. Also, a production is not a qualified production if
417	it is determined that the first day of principal photography in
418	this state occurred on or before the date of submitting its
419	application to the Office of Film and Entertainment or prior to
420	certification by the Office of Tourism, Trade, and Economic
421	Development.
422	(f)(e)  "Qualified production company relocation project"
423	means a corporation, limited liability company, partnership,
424	corporate headquarters, or other legal private entity engaged in
425	the production of filmed entertainment that is domiciled in
426	another state or country and relocates its operations to this
427	state, is organized under the laws of this or any other state or
428	country, and includes as one of its primary purposes digital-
429	media-effects or motion picture and television production, or
430	postproduction.
431	(3)  APPLICATION PROCEDURE; APPROVAL PROCESS.--
432	(a)  Any company engaged in this state in producing filmed
433	entertainment may submit an application to the Office of Film
434	and Entertainment for the purpose of determining qualification
435	for an award of credits against the taxes by the sales tax paid
436	on qualified expenditures as defined in s. 288.1254 and the
437	corporate income tax imposed by chapter 220 receipt of
438	reimbursement provided in this section. The office must be
439	provided information required to determine if the production is
440	a qualified production and to determine the qualified
441	expenditures, production costs, and other information necessary
442	for the office to determine both eligibility for the tax credit
443	and level of reimbursement.
444	(b)  A digital-media-effects company in the state which
445	furnishes digital material to filmed entertainment may submit an
446	application to the Office of Film and Entertainment for the
447	purpose of determining qualification for receipt of
448	reimbursement authorized by this section. The office must be
449	provided information required to determine if the company is
450	qualified and to determine the amount of reimbursement.
451	(c)  Any corporation, limited liability company,
452	partnership, corporate headquarters, or other private entity
453	domiciled in another state which includes as one of its primary
454	purposes digital-media-effects or motion picture and television
455	production and which is considering relocation to this state may
456	submit an application to the Office of Film and Entertainment
457	for the purpose of determining qualification for reimbursement
458	under this section.
459	(d)1.  The Office of Film and Entertainment shall establish
460	a process by which an application is accepted and reviewed and
461	reimbursement eligibility and reimbursement amount are
462	determined. The Office of Film and Entertainment may request
463	assistance from a duly appointed local film commission in
464	determining qualifications for reimbursement and compliance.
465	1.2.  The Office of Film and Entertainment shall develop a
466	standardized application form for use in qualifying an applicant
467	as approving a qualified production, a qualified relocation
468	project, or a company qualifying under paragraph (a), paragraph
469	(b), or paragraph (c). The application form for qualifying an
470	applicant as a qualified production must include, but need not
471	be limited to, production-related information on employment,
472	proposed total production budgets, planned expenditures in this
473	state which are intended for use exclusively as an integral part
474	of preproduction, production, or postproduction activities
475	engaged primarily in this state, and a signed affirmation from
476	the applicant Office of Film and Entertainment that the
477	information on the application form has been verified and is
478	correct. The application form shall be distributed to applicants
479	by the Office of Film and Entertainment or local film
480	commissions.
481	2.3.  Within 10 business days after receipt of an
482	application, the Office of Film and Entertainment shall review
483	the application to determine if the application contains all the
484	information required by this subsection and meets the criteria
485	set out in this section. The office shall qualify all
486	applications that contain the information and meet the criteria
487	set out in this section as eligible to receive a tax credit or
488	shall notify the applicant that the requirements for
489	qualification have not been met. If the application is
490	qualified, the office shall recommend to the Office of Tourism,
491	Trade, and Economic Development approval of the maximum amount
492	of the tax credit to be awarded. The Office of Film and
493	Entertainment must complete its review of each application
494	within 5 days after receipt of the completed application,
495	including all required information, and it must notify the
496	applicant of its determination within 10 business days after
497	receipt of the completed application and required information.
498	3.4.  Within 10 business days after receiving notice from
499	the Office of Film and Entertainment of qualification of an
500	applicant as a qualified production and a recommended approval
501	of the maximum amount of tax credit to be awarded, the Office of
502	Tourism, Trade, and Economic Development shall certify the
503	maximum tax credit award, if any. The certification shall be
504	transmitted to the applicant and to the executive director of
505	the Department of Revenue. The applicant shall be responsible
506	for forwarding a certified application to the Department of
507	Revenue. Upon determination that all criteria are met for
508	qualification for reimbursement, the Office of Film and
509	Entertainment shall notify the applicant of such approval. The
510	office shall also notify the Office of Tourism, Trade, and
511	Economic Development of the applicant approval and amount of
512	reimbursement required. The Office of Tourism, Trade, and
513	Economic Development shall make final determination for actual
514	reimbursement.
515	4.5.  The Office of Film and Entertainment shall deny an
516	application if the office it determines that:
517	a.  The application is not complete or does not meet the
518	requirements of this section; or
519	b.  The tax credit amount reimbursement sought does not
520	meet the requirements of this section for such reimbursement.
521	(4)  CREDIT REIMBURSEMENT ELIGIBILITY; SUBMISSION OF
522	REQUIRED DOCUMENTATION; APPLICATION RECOMMENDATIONS FOR TRANSFER
523	PAYMENT.--
524	(a)  Tax credit award.--A production of filmed
525	entertainment that is qualified by the Office of Film and
526	Entertainment and is certified by the Office of Tourism, Trade,
527	and Economic Development is eligible for corporate tax credits
528	granted pursuant to s. 220.192 and credits against sales tax
529	paid on qualified expenditures pursuant to s. 212.08(5)(r) in an
530	amount equal a reimbursement of up to 15 percent of its
531	qualified qualifying expenditures.
532	(b)  Production spanning 2 state fiscal years.--A qualified
533	production that starts in one state fiscal year and finishes in
534	the next state fiscal year shall have all qualified expenditures
535	from both state fiscal years certified for the latter state
536	fiscal year. This requirement does not apply to the commercials
537	and music video queue described in subparagraph (d)3.
538	(c)  Aggregate tax credit available.--The aggregate amount
539	of tax credits allowed under this section in any state fiscal
540	year is $25 million. If the total amount of allocated tax
541	credits applied for in any state fiscal year exceeds the
542	aggregate amount of tax credits authorized annually under this
543	section, such excess shall be treated as having been applied for
544	on the first day of the next state fiscal year in which tax
545	credits remain available for allocation. However, no more than
546	an aggregate amount of $30 million in tax credits granted
547	pursuant to this section and ss. 212.08(5)(r) and 220.192 shall
548	be allocated between July 1, 2006, and June 30, 2007. The
549	cumulative amount of credits that may be allocated between July
550	1, 2006, and June 30, 2009, may not exceed $75 million. At such
551	time as $75 million of tax credits granted pursuant to this
552	section and ss. 212.08(5)(r) and 220.192 have been allocated, no
553	additional tax credits may be allocated in this state on a
554	filmed entertainment program that demonstrates a minimum of
555	$850,000 in total qualified expenditures for the entire run of
556	the project, versus the budget on a single episode, within the
557	fiscal year from July 1 to June 30. However, the maximum
558	reimbursement that may be made with respect to any filmed
559	entertainment program is $2 million. All reimbursements under
560	this section are subject to appropriation.
561	(d)  Filmed entertainment queues.--Tax credits awarded
562	Payments under this section in a state fiscal year shall be made
563	to qualified productions according to a production's principal
564	photography start date, for those qualified productions having
565	entered into the first queue as cited in subparagraph 1. or the
566	second queue cited in subparagraph 2. within the first 2 weeks
567	after the queue's opening. All other qualified productions
568	entering into either queue after the initial 2-week openings
569	shall be on a first-come, first-served basis until the
570	appropriation for that fiscal year is exhausted. On February 1
571	of each year, the remaining funds within both queues shall be
572	combined into a single queue and distributed based on a
573	project's principal photography start date. The eligibility of
574	qualified productions may not carry over from year to year, but
575	such productions may reapply for eligibility under the
576	guidelines established for doing so. The Office of Film and
577	Entertainment shall develop a procedure to ensure that qualified
578	productions continue on a reasonable schedule until completion.
579	If a qualified production is not continued according to a
580	reasonable schedule, the office shall withdraw its eligibility
581	and reallocate the funds to the next qualified productions
582	already in the queue that have yet to receive their full maximum
583	or 15-percent financial reimbursement, if they have not started
584	principal photography by the time the funds become available.
585	1.  Film, television, and episodic queue.--Theatrical or
586	direct-to-video motion pictures, made-for-television movies,
587	commercials, music videos, industrial and educational films,
588	promotional videos or films, documentary films, television
589	specials, television series, including, but not limited to,
590	miniseries and telenovelas, and digital-media-effects
591	productions by the entertainment industry to be sold or
592	displayed in an electronic medium that demonstrate a minimum of
593	$625,000 in total qualified expenditures for the entire run of
594	the project, which, for a television series, means a season even
595	if the season is not completed in the same state fiscal year in
596	which principal photography began, shall have their own separate
597	queue established, and such queue shall have dedicated to it 60
598	percent of all available tax credits in any state fiscal year
599	for which this section applies. The maximum tax credit award
600	that may be made from this queue for any single production is $2
601	million unless the production is a high-impact television
602	series, in which case the production shall be eligible for a
603	maximum tax credit award of $3 million, provided such production
604	meets the other criteria of this section. On March 1 of each
605	year, the remaining tax credits within this queue shall be
606	merged into a general queue and may be used for other purposes
607	of this section as determined by the Office of Film and
608	Entertainment. A television series, including, but not limited
609	to, a qualified high-impact television series, is not eligible
610	for a tax credit award under this section after its fifth
611	production season in this state. A qualified high-impact
612	television series shall be allowed first position in this queue
613	for its first five production seasons in this state if the
614	application is received by the Office of Film and Entertainment
615	within the first 2 weeks after the queue's opening. A qualified
616	high-impact television series must file an application for each
617	state fiscal year in which it is eligible to receive the credit,
618	unless otherwise provided in this section of the state incentive
619	money.
620	2.  Television pilot queue.--Television pilots and,
621	presentations for television pilots for television series
622	intended to be shot in this state and, or television series,
623	including, but not limited to, drama, reality, comedy, soap
624	opera, telenovela, game show, or miniseries productions, by the
625	entertainment industry to be sold or displayed in an electronic
626	medium that demonstrate a minimum of $625,000 in total qualified
627	expenditures for the pilot episode or presentation shall have
628	their own separate queue established, and such queue shall have
629	dedicated to it 20 40 percent of all available tax credits in
630	any given state fiscal year for which this section applies. The
631	maximum tax credit award that may be made from this queue for
632	any single pilot episode or presentation is $2 million. On March
633	1 of each year, the remaining tax credits within this queue
634	shall be merged into a general queue and may be used for other
635	purposes of this section as determined by the Office of Film and
636	Entertainment.
637	3.  Commercials and music video queue.--Commercials and
638	music videos by the entertainment industry to be sold or
639	displayed in an electronic medium that demonstrate a minimum of
640	$500,000 in combined total qualified expenditures from a
641	production company during the state fiscal year with a minimum
642	of $75,000 in qualified expenditures for each production shall
643	have their own separate queue established. Such queue shall have
644	dedicated to it 20 percent of available tax credits in any given
645	state fiscal year for which this section applies. The maximum
646	tax credit award that may be made from this queue for any single
647	production company is $500,000 for a state fiscal year. On April
648	1 of each year, the remaining tax credits within this queue
649	shall be merged into a general queue and may be used for other
650	purposes of this section as determined by the Office of Film and
651	Entertainment.
652	(e)  Loss of eligibility; reallocation of tax credits.--If
653	a qualified production is not continued according to a
654	reasonable schedule or the Office of Film and Entertainment is
655	notified that a qualified production will no longer be produced,
656	the office shall withdraw the production's eligibility for tax
657	credits and reallocate the tax credits to the next qualified
658	productions already in the queue that have yet to receive a full
659	tax credit if such next qualified productions have not started
660	principal photography by the time the tax credits become
661	available.
662	(f)  Verification of tax credit award.--The Office of Film
663	and Entertainment shall develop a process by which a qualified
664	production that has been certified by the Office of Tourism,
665	Trade, and Economic Development shall submit to the Office of
666	Film and Entertainment, in a timely manner after production ends
667	and after making all of its qualified expenditures, verifying
668	data to substantiate each qualified expenditure. The Office of
669	Film and Entertainment shall report to the Office of Tourism,
670	Trade, and Economic Development the final verified amount of
671	actual qualified expenditures made by the qualified production.
672	The Office of Tourism, Trade, and Economic Development shall
673	then notify the executive director of the Department of Revenue
674	that the qualified production has met all requirements of the
675	incentive program and shall recommend the final amount of the
676	tax credit of the state incentive money.
677	(b)  A digital-media-effects company in the state which
678	furnishes digital material to filmed entertainment may be
679	eligible for a payment in an amount not to exceed 5 percent of
680	its annual gross revenues on qualified expenditures as defined
681	in paragraph (2)(c) before taxes or $100,000, whichever is less.
682	A company applying for payment must submit documentation
683	annually as required by the Office of Film and Entertainment for
684	determination of eligibility of claimed billing and
685	determination of the amount of payment for which the company is
686	eligible.
687	(g)(c)  Transfer of tax credits.--Upon application and
688	approval by the Department of Revenue, a qualified production
689	company may sell, in whole or in part, a tax credit granted
690	pursuant to this section and s. 220.192. The sale of any amount
691	of the tax credit shall not be exchanged for consideration
692	received by the qualified production company of less than 85
693	percent of the transferred amount of tax credit. The qualified
694	production company must transfer at least 10 percent of the
695	remaining credits to each purchaser and may not conduct more
696	than three transfers. The purchaser shall surrender the tax
697	credit in the state fiscal year acquired from the qualified
698	production company and otherwise may carry the tax credit over
699	subject to the same limitations on tax credit usage as the
700	qualified production company awarded the tax credit. The
701	purchaser may not sell or otherwise transfer the tax credit. The
702	Department of Revenue may adopt rules pursuant to ss. 120.536(1)
703	and 120.54 to administer this paragraph, as provided in
704	paragraph (6)(b). A qualified relocation project that is
705	certified by the Office of Film and Entertainment is eligible
706	for a one-time incentive payment in an amount equal to 5 percent
707	of its annual gross revenues before taxes for the first 12
708	months of conducting business in its Florida domicile or
709	$200,000, whichever is less. A company applying for payment must
710	submit documentation as required by the Office of Film and
711	Entertainment for determination of eligibility of claimed
712	billing and determination of the amount of payment for which the
713	company is eligible.
714	(h)(d)  Noncorporate distribution of tax credits.--A
715	qualified production company that is not a corporation as
716	defined in s. 220.03 shall elect to make an application to the
717	Department of Revenue as provided in paragraph (g) or distribute
718	tax credits awarded under this section to its partners or
719	members in proportion to the respective distributive share of
720	such partners' or members' income or loss in the state fiscal
721	year in which such tax credits were approved. A tax credit
722	granted under this section and applied against taxes imposed
723	under this chapter shall be carried forward only for a maximum
724	of 5 taxable years following the state fiscal year in which the
725	credit was approved. The Department of Revenue may adopt rules
726	pursuant to ss. 120.536(1) and 120.54 to administer this
727	paragraph, as provided in paragraph (6)(b), a digital-media-
728	effects company, or a qualified relocation project applying for
729	a payment under this section must submit documentation for
730	claimed qualified expenditures to the Office of Film and
731	Entertainment.
732	(i)(e)  Use of tax credits.--A qualified production company
733	may use the tax credit against the tax liability imposed under
734	s. 220.192, in whole or in part, or against the sales tax paid
735	under chapter 212 in whole or in part The Office of Film and
736	Entertainment shall notify the Office of Tourism, Trade, and
737	Economic Development whether an applicant meets the criteria for
738	reimbursement and shall recommend the reimbursement amount. The
739	Office of Tourism, Trade, and Economic Development shall make
740	the final determination for actual reimbursement.
741	(5)  MARKETING REQUIREMENTS.--The Office of Film and
742	Entertainment shall ensure appropriate marketing materials,
743	including, but not limited to, promotions of this state as a
744	tourist or filming destination, are required when appropriate
745	to be included on any filmed entertainment as a condition of
746	receiving a tax credit under this section. The Office of Film
747	and Entertainment shall consult with appropriate entities for
748	the development and implementation of marketing materials.
749	(6)(5)  RULES POLICIES AND PROCEDURES.--
750	(a)  The Office of Tourism, Trade, and Economic Development
751	shall adopt rules pursuant to ss. 120.536(1) and 120.54 policies
752	and procedures to implement this section, including, but not
753	limited to, rules specifying requirements for the application
754	and approval process, records required for submission for
755	substantiation of credit awards for reimbursement, and
756	determination of and qualification for credit awards, and
757	marketing requirements for credit recipients reimbursement.
758	(b)  The Department of Revenue may adopt rules pursuant to
759	ss. 120.536(1) and 120.54 to administer the provisions of this
760	section, including rules governing the manner and form of
761	documentation required to claim tax credits granted or
762	transferred under this section, and may establish guidelines as
763	to the requisites for an affirmative showing of qualification
764	for tax credits granted or transferred under this section.
765	(7)(6)  FRAUDULENT CLAIMS.--
766	(a)  Any applicant who submits an application under this
767	section that includes fraudulent information is liable for
768	reimbursement of the reasonable costs and fees associated with
769	the review, processing, investigation, and prosecution.
770	(b)  An eligible entity or company that obtains a credit
771	payment under this section through a claim that it knows is
772	fraudulent is liable for reimbursement of the credit amount paid
773	plus a penalty in an amount double the credit payment and
774	reimbursement of reasonable costs, which penalty is in addition
775	to any criminal penalty to which the entity or company is liable
776	for the same acts, plus interest. The entity or company is also
777	liable for costs and fees incurred by the state in investigating
778	and prosecuting the fraudulent claim.
779	(8)(7)  ANNUAL REPORT.--The Office of Film and
780	Entertainment shall provide an annual report for the previous
781	state fiscal year, due October 1, to the Governor, the President
782	of the Senate, and the Speaker of the House of Representatives
783	outlining the return on investment to the state on tax credits
784	awarded funds expended pursuant to this section.
785	(9)  REPEAL.--This section is repealed July 1, 2009.
786	Section 6.  This act shall take effect July 1, 2006.

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