HB 1321CS

CHAMBER ACTION



1The State Infrastructure Council recommends the following:
2
3     Council/Committee Substitute
4     Remove the entire bill and insert:
5
A bill to be entitled
6An act relating to entertainment industry economic
7development; amending s. 212.08, F.S.; providing for an
8entertainment industry credit of sales and use taxes paid
9on qualified expenditures; providing criteria,
10requirements, procedures, and limitations on the credit;
11providing for uses of the credit; providing duties and
12responsibilities of the Office of Film and Entertainment,
13the Office of Tourism, Trade, and Economic Development,
14and the Department of Revenue; authorizing the Office of
15Tourism, Trade, and Economic Development to adopt rules;
16providing for liability for fraudulent credit
17applications; amending s. 213.053, F.S.; authorizing the
18Department of Revenue to provide certain tax credit and
19tax refund information to the Office of Film and
20Entertainment and the Office of Tourism, Trade, and
21Economic Development; amending s. 220.02, F.S.; revising
22the order of priority list of applicable credits against
23certain taxes; creating s. 220.192, F.S.; providing for an
24entertainment industry corporate income tax credit of a
25percentage of certain qualified expenditures; providing
26criteria, requirements, procedures, and limitations on the
27credit; providing for aggregate amounts of tax credits
28available; providing for uses and allocations of the
29credit; providing for use and carryforward of the credit;
30providing for transfers of the credit; providing for
31noncorporate distributions of tax credits; authorizing the
32Office of Tourism, Trade, and Economic Development and the
33Department of Revenue to adopt rules; providing for
34liability for fraudulent credit applications; amending s.
35288.1254, F.S.; revising the entertainment industry
36financial incentive program to provide corporate income
37tax and sales and use tax credits to qualified
38entertainment entities rather than reimbursements from
39appropriations; revising provisions relating to
40definitions, creation and scope, application procedures,
41approval process, eligibility, required documents,
42qualified productions, and annual reports; providing
43criteria and limitations for awards of tax credits;
44providing marketing requirements; requiring the Office of
45Tourism, Trade, and Economic Development and Department of
46Revenue to adopt rules; providing liability for
47reimbursement of certain costs and fees associated with
48fraudulent applications; providing for future repeal;
49providing an appropriation; providing an effective date.
50
51Be It Enacted by the Legislature of the State of Florida:
52
53     Section 1.  Paragraph (r) is added to subsection (5) of
54section 212.08, Florida Statutes, to read:
55     212.08  Sales, rental, use, consumption, distribution, and
56storage tax; specified exemptions.--The sale at retail, the
57rental, the use, the consumption, the distribution, and the
58storage to be used or consumed in this state of the following
59are hereby specifically exempt from the tax imposed by this
60chapter.
61     (5)  EXEMPTIONS; ACCOUNT OF USE.--
62     (r)  Entertainment industry tax credit; authorization;
63eligibility for credits.--
64     1.  Beginning July 1, 2006, a qualified production company
65is eligible for tax credits of taxes paid on qualified
66expenditures as defined in s. 288.1254 as provided in this
67paragraph:
68     a.  The credit shall be granted as a refund of sales and
69use tax paid by a qualifying production company on qualified
70expenditures in the fiscal year preceding the date of
71application.
72     b.  To be eligible to receive the credit, an applicant must
73be a qualified production company as defined in s.
74288.1258(1)(b).
75     c.  A qualified production company may not be awarded more
76than $2 million in tax credits under this paragraph and s.
77220.192 per year unless the production is a high-impact
78television series, in which case the qualified production shall
79be eligible for a maximum tax credit award of $3 million per
80year. The tax credit available under this paragraph shall
81consist only of the tax paid by a qualified production company
82under this chapter and only up to the face amount of the credit.
83If the qualified production company cannot use the entire tax
84credit in the state fiscal year in which the credit is approved,
85any excess may be carried over to a succeeding state fiscal
86year. A tax credit granted under this paragraph and applied
87against sales and use taxes imposed under this chapter may be
88carried forward only for a maximum of 5 state fiscal years
89following the state fiscal year in which the credit was
90approved. Five years after the date a credit is granted under
91this paragraph, the credit expires and may not be used.
92     d.  The aggregate amount of tax credits allowed under this
93paragraph and s. 220.192 in any state fiscal year is $25
94million. If the total amount of allocated tax credits applied
95for in any state fiscal year exceeds the aggregate amount of tax
96credits authorized annually under this paragraph, such excess
97shall be treated as having been applied for on the first day of
98the next state fiscal year in which tax credits remain available
99for allocation. However, no more than an aggregate amount of $30
100million in tax credits shall be allocated between July 1, 2006,
101and June 30, 2007. The cumulative amount of credits that may be
102allocated between July 1, 2006, and June 30, 2009, shall not
103exceed $75 million. At such time as $75 million of tax credits
104have been allocated, no additional tax credits may be allocated.
105     e.  The tax credits awarded under this paragraph may only
106be used by the qualified production company to whom the credits
107were awarded. Credits awarded under this paragraph may not be
108sold, assigned, or otherwise transferred, in whole or in part.
109     2.a.  To be eligible to receive the credit provided by this
110paragraph, a qualified production company shall apply to the
111Office of Film and Entertainment prior to September 1 of each
112year for a refund of sales and use taxes paid on qualified
113expenditures in the preceding fiscal year.
114     b.  The Office of Film and Entertainment shall develop,
115with the cooperation of the department, a standardized
116application form for use in applying for the credit.
117     c.  Upon receipt of an application, the Office of Film and
118Entertainment shall review the application and information and
119determine whether or not the application is complete within 15
120business days. An application shall not be considered complete
121unless the application includes copies of invoices upon which
122Florida sales and use tax is separately stated, other proof that
123Florida sales and use tax was paid on the purchase of the
124qualified expenditures, and other documentation as required by
125the department. The Office of Film and Entertainment shall
126notify the applicant within 20 business days after receipt of
127the application of any deficiencies in the application. Upon
128receipt of a completed application, the Office of Film and
129Entertainment shall evaluate the application for credit under
130this paragraph and the Office of Tourism, Trade, and Economic
131Development shall issue an approval or a denial to the applicant
132within an additional 15 business days. The Office of Film and
133Entertainment shall provide the department with a copy of each
134completed application that has been approved. Within 30 days
135after receiving a copy of an approval, the department shall
136issue a refund directly to the qualified production company in
137the amount shown on the approval issued by the Office of
138Tourism, Trade, and Economic Development, notwithstanding the
139provisions of s. 215.26. The provisions of s. 212.095 do not
140apply to this paragraph.
141     d.  The Office of Tourism, Trade, and Economic Development
142may adopt rules pursuant to ss. 120.536(1) and 120.54 to
143implement this paragraph, including, but not limited to, rules
144specifying requirements for the application and approval
145process, records required for substantiation of credit awards,
146and determination of and qualification for credit awards.
147     3.a.  Any applicant who submits an application under this
148paragraph that includes fraudulent information is liable for
149reimbursement of the reasonable costs and fees associated with
150the review, processing, investigation, and prosecution.
151     b.  An eligible entity or company that obtains a credit
152payment under this paragraph through a claim that is fraudulent
153is liable for reimbursement of the credit amount paid plus a
154penalty in an amount double the credit payment and reimbursement
155of reasonable costs, which penalty is in addition to any
156criminal penalty to which the entity or company is liable for
157the same acts, plus interest. The entity or company is also
158liable for costs and fees incurred by the state in investigating
159and prosecuting the fraudulent claim.
160     Section 2.  Paragraph (k) of subsection (7) of section
161213.053, Florida Statutes, is amended, and paragraph (y) is
162added to that subsection, to read:
163     213.053  Confidentiality and information sharing.--
164     (7)  Notwithstanding any other provision of this section,
165the department may provide:
166     (k)1.  Payment information relative to chapters 199, 201,
167212, 220, 221, and 624 to the Office of Tourism, Trade, and
168Economic Development, or its employees or agents that are
169identified in writing by the office to the department, in the
170administration of the tax refund program for qualified defense
171contractors authorized by s. 288.1045 and the tax refund program
172for qualified target industry businesses authorized by s.
173288.106.
174     2.  Information relative to tax credits taken by a business
175under s. 220.191 and exemptions or tax refunds received by a
176business under s. 212.08(5)(j) and (r) to the Office of Tourism,
177Trade, and Economic Development, or its employees or agents that
178are identified in writing by the office to the department, in
179the administration and evaluation of the capital investment tax
180credit program authorized in s. 220.191 and the semiconductor,
181defense, and space tax exemption program authorized in s.
182212.08(5)(j).
183     (y)  Information relative to tax credits taken under s.
184220.192 and tax refunds received by a business under s.
185212.08(5)(r) to the Office of Film and Entertainment and the
186Office of Tourism, Trade, and Economic Development.
187
188Disclosure of information under this subsection shall be
189pursuant to a written agreement between the executive director
190and the agency. Such agencies, governmental or nongovernmental,
191shall be bound by the same requirements of confidentiality as
192the Department of Revenue. Breach of confidentiality is a
193misdemeanor of the first degree, punishable as provided by s.
194775.082 or s. 775.083.
195     Section 3.  Subsection (8) of section 220.02, Florida
196Statutes, is amended to read:
197     220.02  Legislative intent.--
198     (8)  It is the intent of the Legislature that credits
199against either the corporate income tax or the franchise tax be
200applied in the following order: those enumerated in s. 631.828,
201those enumerated in s. 220.191, those enumerated in s. 220.181,
202those enumerated in s. 220.183, those enumerated in s. 220.182,
203those enumerated in s. 220.1895, those enumerated in s. 221.02,
204those enumerated in s. 220.184, those enumerated in s. 220.186,
205those enumerated in s. 220.1845, those enumerated in s. 220.19,
206those enumerated in s. 220.185, and those enumerated in s.
207220.187, and those enumerated under s. 220.192.
208     Section 4.  Section 220.192, Florida Statutes, is created
209to read:
210     220.192  Entertainment industry tax credit; authorization;
211eligibility for credits.--
212     (1)  TAX CREDITS; ELIGIBILITY; AWARD;
213ALLOCATION.--Beginning July 1, 2006, a qualified production
214company is eligible for tax credits in the amount of 15 percent
215of qualified expenditures, as defined in s. 288.1254.
216     (a)  The credit shall be granted against the tax imposed
217and owing under this chapter by a qualified production company
218for the taxable year in which the application was granted.
219     (b)  To be eligible to receive the credit, an applicant
220must be a qualified production company as defined in s.
221288.1258(1)(b).
222     (c)  A qualified production company may not be awarded more
223than a total of $2 million in tax credits under this section and
224s. 212.08(5)(r) per year unless the production is a high-impact
225television series, in which case the production shall be
226eligible for a maximum total tax credit award of $3 million per
227year.
228     (2)  AGGREGATE TAX CREDIT AVAILABLE.--The aggregate amount
229of tax credits allowed under this section and s. 212.08(5)(r) in
230any state fiscal year is $25 million. If the total amount of
231allocated tax credits applied for in any state fiscal year
232exceeds the aggregate amount of tax credits authorized annually
233under this section, such excess shall be treated as having been
234applied for on the first day of the next state fiscal year in
235which tax credits remain available for allocation. However, no
236more than an aggregate amount of $30 million in tax credits
237shall be allocated between July 1, 2006, and June 30, 2007. The
238cumulative amount of credits that may be allocated between July
2391, 2006, and June 30, 2009, shall not exceed $75 million. At
240such time as $75 million of tax credits have been allocated, no
241additional tax credits may be allocated.
242     (3)  USE OF TAX CREDIT; CARRY FORWARD.--The tax credit
243available for use under this section for a taxable year is
244limited to the amount of the tax due under this chapter by a
245qualified production company. If the qualified production
246company cannot use the entire tax credit in the taxable year in
247which the credit is approved, any excess may be carried over to
248a succeeding taxable year. A tax credit granted under this
249section and applied against taxes imposed under this chapter may
250be carried forward only for a maximum of 5 taxable years
251following the taxable year in which the credit was approved.
252Five years after the date a credit is granted under this
253section, the credit expires and may not be used.
254     (4)  TRANSFER OF TAX CREDITS.--Upon application to and
255approval by the Department of Revenue, a qualified production
256company may sell, in whole or in part, a tax credit granted
257under this section. The sale of any amount of the tax credit
258shall not be exchanged for consideration received by the
259qualified production company of less than 85 percent of the
260transferred amount of tax credit. The qualified production
261company must transfer at least 10 percent of the remaining
262credits to each purchaser and may not conduct more than three
263transfers. The purchaser of the tax credit granted under this
264section and s. 288.1254 shall use the tax credit in the state
265fiscal year the tax credit is acquired from the qualified
266production company and otherwise may carry the tax credit over
267subject to the same limitations on tax credit usage as the
268qualified production company awarded the tax credit. The
269purchaser of the tax credit may not sell or otherwise transfer
270the tax credit. The Department of Revenue may adopt rules
271pursuant to ss. 120.536(1) and 120.54 to administer this
272subsection as provided in subsection (7).
273     (5)  NONCORPORATE DISTRIBUTIONS OF TAX CREDITS.--A
274qualified production company that is not a corporation as
275defined in s. 220.03 shall elect to make an application to the
276Department of Revenue to distribute tax credits awarded under
277this section to its partners or members in proportion to the
278respective distributive share of such partners' or members'
279income or loss in the taxable year in which such tax credits
280were approved. A tax credit granted under this section and
281applied against taxes imposed under this chapter may be carried
282forward only for a maximum of 5 taxable years following the
283state fiscal year in which the credit was approved.
284     (6)  USE OF TAX CREDITS.--A qualified production company
285may use the tax credit against the tax liability imposed under
286this chapter, in whole or in part, and for a refund of sales and
287use tax paid on qualified expenditures as provided in s.
288212.08(5)(r), the combination of which may not exceed the
289limitations provided in paragraph (1)(c).
290     (7)  RULES.--
291     (a)  The Office of Tourism, Trade, and Economic Development
292may adopt rules pursuant to ss. 120.536(1) and 120.54 to
293implement this section, including, but not limited to, rules
294specifying requirements for the application and approval
295process, records required for substantiation of credit awards,
296and determination of and qualification for credit awards.
297     (b)  The Department of Revenue may adopt rules pursuant to
298ss. 120.536(1) and 120.54 to administer the provisions of this
299section, including rules governing the manner and form of
300documentation required to claim tax credits granted or
301transferred under this section, and may establish guidelines as
302to the requirements for an affirmative showing of qualification
303for tax credits granted or transferred under this section.
304     (8)  FRAUDULENT CLAIMS.--
305     (a)  Any applicant who submits an application under this
306section that includes fraudulent information is liable for
307reimbursement of the reasonable costs and fees associated with
308the review, processing, investigation, and prosecution.
309     (b)  An eligible entity or company that obtains a credit
310payment under this section through a claim that is fraudulent is
311liable for reimbursement of the credit amount paid plus a
312penalty in an amount double the credit payment and reimbursement
313of reasonable costs, which penalty is in addition to any
314criminal penalty to which the entity or company is liable for
315the same acts, plus interest. The entity or company is also
316liable for costs and fees incurred by the state in investigating
317and prosecuting the fraudulent claim.
318     Section 5.  Section 288.1254, Florida Statutes, is amended
319to read:
320     288.1254  Entertainment industry financial incentive
321program; creation; purpose; definitions; application procedure;
322approval process; reimbursement eligibility; submission of
323required documentation; recommendations for credit award
324payment; policies and procedures; fraudulent claims.--
325     (1)  CREATION AND PURPOSE OF PROGRAM.--Subject to specific
326appropriation, There is created within the Office of Film and
327Entertainment an entertainment industry financial incentive
328program. The purpose of this program is to encourage the use of
329this state as a site for filming and developing and sustaining
330the workforce and infrastructure providing production services
331for filmed entertainment by granting tax credits for qualified
332production companies applicable to the corporate income tax
333imposed in s. 220.11 and a refund of sales and use taxes as
334provided in s. 212.08(5)(r).
335     (2)  DEFINITIONS.--As used in this section, the term:
336     (a)  "Filmed entertainment" means a theatrical or
337direct-to-video motion picture, a made-for-television motion
338picture teleproduction, a commercial, a music video, an
339industrial or educational film, a promotional video or film, a
340documentary film, a television pilot, a television special, a
341presentation for a television pilot, a television series,
342including, but not limited to, a drama, a reality, a comedy, a
343soap opera, a telenovela, a game show, and a miniseries
344production, or a digital-media-effects production by the
345entertainment industry to be sold or displayed in an electronic
346medium, excluding news shows and sporting events. As used in
347this paragraph, the term "motion picture" means a motion picture
348made on or by film, tape, or otherwise and produced by means of
349a motion picture camera, electronic camera or device, tape
350device, any combination of the foregoing, or any other means,
351method, or device now used or which may hereafter be adopted. As
352used in this paragraph, the term "digital-media-effects" means
353visual elements created through the modification of already
354existing or newly created visual elements for film, video, or
355animated media through the use of digital 2D/3D animation or
356painting, motion capture, or compositing technologies. For
357purposes of this section, the term "filmed entertainment" does
358not include the electronic gaming industry or sporting events.
359     (b)  "High-impact television series" means a production
360created to run multiple production seasons with an estimated
361order of at least seven episodes per season and qualified
362expenditures of at least $625,000 per episode.
363     (c)(b)  "Production costs" means the costs of real,
364tangible, and intangible property used and services performed
365primarily or customarily in the production, including
366preproduction and postproduction, of qualified filmed
367entertainment. Production costs generally include, but are not
368limited to:
369     1.  Wages, salaries, or other compensation, including
370amounts paid through payroll service companies, for technical
371and production crews, directors, producers, and performers who
372are residents of this state.
373     2.  Expenditures for sound stages, backlots, production
374editing, digital effects, sound recordings, sets, and set
375construction.
376     3.  Expenditures for rental equipment, including, but not
377limited to, cameras and grip or electrical equipment.
378     4.  Expenditures for meals, travel, and accommodations, and
379goods used in producing filmed entertainment that is located and
380doing business in this state.
381     5.  Expenditures for goods and services used in producing
382filmed entertainment.
383     (d)(c)  "Qualified expenditures" means production costs
384incurred in this state within the current state fiscal year for
385goods purchased or leased from or services provided by
386purchased, leased, or employed from a resident of this state or
387a vendor or supplier who is located and doing business in this
388state or payments to residents of this state in the form of
389salary, wages, or other compensation, but excluding wages,
390salaries, or other compensation paid to the two highest-paid
391residents of this state participating in the qualified
392production employees.
393     (e)(d)  "Qualified production" means filmed entertainment
394that meets or exceeds minimum qualified makes expenditures
395required in this state for the total or partial production of
396filmed entertainment. Productions that are deemed by the Office
397of Film and Entertainment to contain obscene content, as defined
398by the United States Supreme Court, are not qualified
399productions. Also, a production is not a qualified production if
400it is determined that the first day of principal photography in
401this state occurred on or before the date of submitting its
402application to the Office of Film and Entertainment or prior to
403certification by the Office of Tourism, Trade, and Economic
404Development.
405     (f)(e)  "Qualified production company relocation project"
406means a corporation, limited liability company, partnership,
407corporate headquarters, or other legal private entity engaged in
408the production of filmed entertainment that is domiciled in
409another state or country and relocates its operations to this
410state, is organized under the laws of this or any other state or
411country, and includes as one of its primary purposes digital-
412media-effects or motion picture and television production, or
413postproduction.
414     (3)  APPLICATION PROCEDURE; APPROVAL PROCESS.--
415     (a)  Any company engaged in this state in producing filmed
416entertainment may submit an application to the Office of Film
417and Entertainment for the purpose of determining qualification
418for an award of tax credits receipt of reimbursement provided in
419this section. The office must be provided information required
420to determine if the production is a qualified production and to
421determine the qualified expenditures, production costs, and
422other information necessary for the office to determine both
423eligibility for the tax credit and level of reimbursement.
424     (b)  A digital-media-effects company in the state which
425furnishes digital material to filmed entertainment may submit an
426application to the Office of Film and Entertainment for the
427purpose of determining qualification for receipt of
428reimbursement authorized by this section. The office must be
429provided information required to determine if the company is
430qualified and to determine the amount of reimbursement.
431     (c)  Any corporation, limited liability company,
432partnership, corporate headquarters, or other private entity
433domiciled in another state which includes as one of its primary
434purposes digital-media-effects or motion picture and television
435production and which is considering relocation to this state may
436submit an application to the Office of Film and Entertainment
437for the purpose of determining qualification for reimbursement
438under this section.
439     (d)1.  The Office of Film and Entertainment shall establish
440a process by which an application is accepted and reviewed and
441reimbursement eligibility and reimbursement amount are
442determined. The Office of Film and Entertainment may request
443assistance from a duly appointed local film commission in
444determining qualifications for reimbursement and compliance.
445     1.2.  The Office of Film and Entertainment shall develop a
446standardized application form for use in qualifying an applicant
447as approving a qualified production, a qualified relocation
448project, or a company qualifying under paragraph (a), paragraph
449(b), or paragraph (c). The application form for qualifying an
450applicant as a qualified production must include, but need not
451be limited to, production-related information on employment,
452proposed total production budgets, planned expenditures in this
453state which are intended for use exclusively as an integral part
454of preproduction, production, or postproduction activities
455engaged primarily in this state, and a signed affirmation from
456the applicant Office of Film and Entertainment that the
457information on the application form has been verified and is
458correct. The application form shall be distributed to applicants
459by the Office of Film and Entertainment or local film
460commissions.
461     2.3.  Within 10 business days after receipt of an
462application, the Office of Film and Entertainment shall review
463the application to determine if the application contains all the
464information required by this subsection and meets the criteria
465set out in this section. The office shall qualify all
466applications that contain the information and meet the criteria
467set out in this section as eligible to receive a tax credit or
468shall notify the applicant that the requirements for
469qualification have not been met. If the application is
470qualified, the office shall recommend to the Office of Tourism,
471Trade, and Economic Development approval of the maximum amount
472of the tax credit to be awarded. The Office of Film and
473Entertainment must complete its review of each application
474within 5 days after receipt of the completed application,
475including all required information, and it must notify the
476applicant of its determination within 10 business days after
477receipt of the completed application and required information.
478     3.4.  Within 10 business days after receiving notice from
479the Office of Film and Entertainment of qualification of an
480applicant as a qualified production and a recommended approval
481of the maximum amount of tax credit to be awarded, the Office of
482Tourism, Trade, and Economic Development shall certify the
483maximum tax credit award, if any. The certification shall be
484transmitted to the applicant and to the executive director of
485the Department of Revenue. The applicant shall be responsible
486for forwarding a certified application to the Department of
487Revenue. Upon determination that all criteria are met for
488qualification for reimbursement, the Office of Film and
489Entertainment shall notify the applicant of such approval. The
490office shall also notify the Office of Tourism, Trade, and
491Economic Development of the applicant approval and amount of
492reimbursement required. The Office of Tourism, Trade, and
493Economic Development shall make final determination for actual
494reimbursement.
495     4.5.  The Office of Film and Entertainment shall deny an
496application if the office it determines that:
497     a.  The application is not complete or does not meet the
498requirements of this section; or
499     b.  The tax credit amount reimbursement sought does not
500meet the requirements of this section for such reimbursement.
501     (4)  CREDIT REIMBURSEMENT ELIGIBILITY; SUBMISSION OF
502REQUIRED DOCUMENTATION; APPLICATION RECOMMENDATIONS FOR TRANSFER
503PAYMENT.--
504     (a)  Tax credit award.--A production of filmed
505entertainment that is qualified by the Office of Film and
506Entertainment and is certified by the Office of Tourism, Trade,
507and Economic Development is eligible for corporate income tax
508credits granted pursuant to s. 220.192 in an amount equal a
509reimbursement of up to 15 percent of its qualified qualifying
510expenditures and credits granted against sales and use tax paid
511on qualified expenditures pursuant to s. 212.08(5)(r).
512     (b)  Production spanning 2 state fiscal years.--A qualified
513production that starts in one state fiscal year and finishes in
514the next state fiscal year shall have all qualified expenditures
515from both state fiscal years certified for the latter state
516fiscal year. This requirement does not apply to the commercials
517and music video queue described in subparagraph (d)3.
518     (c)  Aggregate tax credit available.--The aggregate amount
519of tax credits allowed under this section in any state fiscal
520year is $25 million. If the total amount of allocated tax
521credits applied for in any state fiscal year exceeds the
522aggregate amount of tax credits authorized annually under this
523section, such excess shall be treated as having been applied for
524on the first day of the next state fiscal year in which tax
525credits remain available for allocation. However, no more than
526an aggregate amount of $30 million in tax credits granted
527pursuant to this section and ss. 212.08(5)(r) and 220.192 shall
528be allocated between July 1, 2006, and June 30, 2007. The
529cumulative amount of credits that may be allocated between July
5301, 2006, and June 30, 2009, may not exceed $75 million. At such
531time as $75 million of tax credits granted pursuant to this
532section and ss. 212.08(5)(r) and 220.192 have been allocated, no
533additional tax credits may be allocated in this state on a
534filmed entertainment program that demonstrates a minimum of
535$850,000 in total qualified expenditures for the entire run of
536the project, versus the budget on a single episode, within the
537fiscal year from July 1 to June 30. However, the maximum
538reimbursement that may be made with respect to any filmed
539entertainment program is $2 million. All reimbursements under
540this section are subject to appropriation.
541     (d)  Filmed entertainment queues.--Tax credits awarded
542Payments under this section in a state fiscal year shall be made
543to qualified productions according to a production's principal
544photography start date, for those qualified productions having
545entered into the first queue as cited in subparagraph 1. or the
546second queue cited in subparagraph 2. within the first 2 weeks
547after the queue's opening. All other qualified productions
548entering into either queue after the initial 2-week openings
549shall be on a first-come, first-served basis until the
550appropriation for that fiscal year is exhausted. On February 1
551of each year, the remaining funds within both queues shall be
552combined into a single queue and distributed based on a
553project's principal photography start date. The eligibility of
554qualified productions may not carry over from year to year, but
555such productions may reapply for eligibility under the
556guidelines established for doing so. The Office of Film and
557Entertainment shall develop a procedure to ensure that qualified
558productions continue on a reasonable schedule until completion.
559If a qualified production is not continued according to a
560reasonable schedule, the office shall withdraw its eligibility
561and reallocate the funds to the next qualified productions
562already in the queue that have yet to receive their full maximum
563or 15-percent financial reimbursement, if they have not started
564principal photography by the time the funds become available.
565     1.  Film, television, and episodic queue.--Theatrical or
566direct-to-video motion pictures, made-for-television movies,
567commercials, music videos, industrial and educational films,
568promotional videos or films, documentary films, television
569specials, television series, including, but not limited to,
570miniseries and telenovelas, and digital-media-effects
571productions by the entertainment industry to be sold or
572displayed in an electronic medium that demonstrate a minimum of
573$625,000 in total qualified expenditures for the entire run of
574the project, which, for a television series, means a season even
575if the season is not completed in the same state fiscal year in
576which principal photography began, shall have their own separate
577queue established, and such queue shall have dedicated to it 60
578percent of all available tax credits in any state fiscal year
579for which this section applies. The maximum tax credit award
580that may be made from this queue for any single production is $2
581million per year unless the production is a high-impact
582television series, in which case the production shall be
583eligible for a maximum tax credit award of $3 million per year,
584provided such production meets the other criteria of this
585section. On March 1 of each year, the remaining tax credits
586within this queue shall be merged into a general queue and may
587be used for other purposes of this section as determined by the
588Office of Film and Entertainment. A television series,
589including, but not limited to, a qualified high-impact
590television series, is not eligible for a tax credit award under
591this section after its fifth production season in this state. A
592qualified high-impact television series shall be allowed first
593position in this queue for its first five production seasons in
594this state if the application is received by the Office of Film
595and Entertainment within the first 2 weeks after the queue's
596opening. A qualified high-impact television series must file an
597application for each state fiscal year in which it is eligible
598to receive the credit, unless otherwise provided in this section
599of the state incentive money.
600     2.  Television pilot queue.--Television pilots and,
601presentations for television pilots for television series
602intended to be shot in this state and, or television series,
603including, but not limited to, drama, reality, comedy, soap
604opera, telenovela, game show, or miniseries productions, by the
605entertainment industry to be sold or displayed in an electronic
606medium that demonstrate a minimum of $625,000 in total qualified
607expenditures for the pilot episode or presentation shall have
608their own separate queue established, and such queue shall have
609dedicated to it 20 40 percent of all available tax credits in
610any given state fiscal year for which this section applies. The
611maximum tax credit award that may be made from this queue for
612any single pilot episode or presentation is $2 million. On March
6131 of each year, the remaining tax credits within this queue
614shall be merged into a general queue and may be used for other
615purposes of this section as determined by the Office of Film and
616Entertainment.
617     3.  Commercials and music video queue.--Commercials and
618music videos by the entertainment industry to be sold or
619displayed in an electronic medium that demonstrate a minimum of
620$500,000 in combined total qualified expenditures from a
621production company during the state fiscal year with a minimum
622of $75,000 in qualified expenditures for each production shall
623have their own separate queue established. Such queue shall have
624dedicated to it 20 percent of available tax credits in any given
625state fiscal year for which this section applies. The maximum
626tax credit award that may be made from this queue for any single
627production company is $500,000 for a state fiscal year. On April
6281 of each year, the remaining tax credits within this queue
629shall be merged into a general queue and may be used for other
630purposes of this section as determined by the Office of Film and
631Entertainment.
632     (e)  Loss of eligibility; reallocation of tax credits.--If
633a qualified production is not continued according to a
634reasonable schedule or the Office of Film and Entertainment is
635notified that a qualified production will no longer be produced,
636the office shall withdraw the production's eligibility for tax
637credits and reallocate the tax credits to the next qualified
638productions already in the queue that have yet to receive a full
639tax credit if such next qualified productions have not started
640principal photography by the time the tax credits become
641available.
642     (f)  Verification of tax credit award.--The Office of Film
643and Entertainment shall develop a process by which a qualified
644production that has been certified by the Office of Tourism,
645Trade, and Economic Development shall submit to the Office of
646Film and Entertainment, in a timely manner after production ends
647and after making all of its qualified expenditures, verifying
648data to substantiate each qualified expenditure. The Office of
649Film and Entertainment shall report to the Office of Tourism,
650Trade, and Economic Development the final verified amount of
651actual qualified expenditures made by the qualified production.
652The Office of Tourism, Trade, and Economic Development shall
653then notify the executive director of the Department of Revenue
654that the qualified production has met all requirements of the
655incentive program and shall recommend the final amount of the
656tax credit of the state incentive money.
657     (g)  Use of tax credit; carry forward.--
658     1.  The tax credit available under s. 212.08(5)(r) shall
659consist only of the tax paid by a qualified production company
660under chapter 212 and only up to the face amount of the credit.
661If the qualified production company cannot use the entire tax
662credit in the state fiscal year in which the credit is approved,
663any excess may be carried over to a succeeding state fiscal
664year. A tax credit granted under s. 212.08(5)(r) and applied
665against sales and use taxes imposed under chapter 212 may be
666carried forward only for a maximum of 5 state fiscal years
667following the state fiscal year in which the credit was
668approved. Five years after the date a credit is granted under s.
669212.08(5)(r), the credit expires and may not be used.
670     2.  The tax credit available for use under s. 220.192 for a
671taxable year is limited to the amount of the tax due under
672chapter 220 by a qualified production company. If the qualified
673production company cannot use the entire tax credit in the
674taxable year in which the credit is approved, any excess may be
675carried over to a succeeding taxable year. A tax credit granted
676under s. 220.192 and applied against taxes imposed under chapter
677220 may be carried forward only for a maximum of 5 taxable years
678following the taxable year in which the credit was approved.
679Five years after the date a credit is granted under s. 220.192,
680the credit expires and may not be used.
681     (h)  Transfer of tax credits.--Upon application to and
682approval by the Department of Revenue, a qualified production
683company may sell, in whole or in part, a tax credit granted
684pursuant to this section and s. 220.192. The sale of any amount
685of the tax credit shall not be exchanged for consideration
686received by the qualified production company of less than 85
687percent of the transferred amount of tax credit. The qualified
688production company must transfer at least 10 percent of the
689remaining credits to each purchaser and may not conduct more
690than three transfers. The purchaser shall surrender the tax
691credit in the state fiscal year acquired from the qualified
692production company and otherwise may carry the tax credit over
693subject to the same limitations on tax credit usage as the
694qualified production company awarded the tax credit. The
695purchaser may not sell or otherwise transfer the tax credit. The
696Department of Revenue may adopt rules pursuant to ss. 120.536(1)
697and 120.54 to administer this paragraph, as provided in
698paragraph (6)(b).
699     (i)  Noncorporate distribution of tax credits.--A qualified
700production company that is not a corporation as defined in s.
701220.03 shall elect to make an application to the Department of
702Revenue as provided in paragraph (h) or distribute tax credits
703awarded under this section to its partners or members in
704proportion to the respective distributive share of such
705partners' or members' income or loss in the state fiscal year in
706which such tax credits were approved. A tax credit granted
707pursuant to this section and s. 220.192 and applied against
708taxes imposed under chapter 220 shall be carried forward only
709for a maximum of 5 taxable years following the state fiscal year
710in which the credit was approved. The Department of Revenue may
711adopt rules pursuant to ss. 120.536(1) and 120.54 to administer
712this paragraph, as provided in paragraph (6)(b).
713     (j)  Use of tax credits.--A qualified production company
714may use the tax credit against the tax liability imposed under
715s. 220.192, in whole or in part, and for a refund of sales and
716use taxes paid on qualified expenditures as provided in s.
717212.08(5)(r) the combination of which may not exceed the credit
718limitations provided in this section.
719     (b)  A digital-media-effects company in the state which
720furnishes digital material to filmed entertainment may be
721eligible for a payment in an amount not to exceed 5 percent of
722its annual gross revenues on qualified expenditures as defined
723in paragraph (2)(c) before taxes or $100,000, whichever is less.
724A company applying for payment must submit documentation
725annually as required by the Office of Film and Entertainment for
726determination of eligibility of claimed billing and
727determination of the amount of payment for which the company is
728eligible.
729     (c)  A qualified relocation project that is certified by
730the Office of Film and Entertainment is eligible for a one-time
731incentive payment in an amount equal to 5 percent of its annual
732gross revenues before taxes for the first 12 months of
733conducting business in its Florida domicile or $200,000,
734whichever is less. A company applying for payment must submit
735documentation as required by the Office of Film and
736Entertainment for determination of eligibility of claimed
737billing and determination of the amount of payment for which the
738company is eligible.
739     (d)  A qualified production, a digital-media-effects
740company, or a qualified relocation project applying for a
741payment under this section must submit documentation for claimed
742qualified expenditures to the Office of Film and Entertainment.
743     (e)  The Office of Film and Entertainment shall notify the
744Office of Tourism, Trade, and Economic Development whether an
745applicant meets the criteria for reimbursement and shall
746recommend the reimbursement amount. The Office of Tourism,
747Trade, and Economic Development shall make the final
748determination for actual reimbursement.
749     (5)  MARKETING REQUIREMENTS.--The Office of Film and
750Entertainment shall ensure appropriate marketing materials,
751including, but not limited to, promotions of this state as a
752tourist or filming destination, are required when appropriate
753to be included on any filmed entertainment as a condition of
754receiving a tax credit under this section. The Office of Film
755and Entertainment shall consult with appropriate entities for
756the development and implementation of marketing materials.
757     (6)(5)  RULES POLICIES AND PROCEDURES.--
758     (a)  The Office of Tourism, Trade, and Economic Development
759shall adopt rules pursuant to ss. 120.536(1) and 120.54 policies
760and procedures to implement this section, including, but not
761limited to, rules specifying requirements for the application
762and approval process, records required for submission for
763substantiation of credit awards for reimbursement, and
764determination of and qualification for credit awards, and
765marketing requirements for credit recipients reimbursement.
766     (b)  The Department of Revenue may adopt rules pursuant to
767ss. 120.536(1) and 120.54 to administer the provisions of this
768section, including rules governing the manner and form of
769documentation required to claim tax credits granted or
770transferred under this section, and may establish guidelines as
771to the requisites for an affirmative showing of qualification
772for tax credits granted or transferred under this section.
773     (7)(6)  FRAUDULENT CLAIMS.--
774     (a)  Any applicant who submits an application under this
775section that includes fraudulent information is liable for
776reimbursement of the reasonable costs and fees associated with
777the review, processing, investigation, and prosecution.
778     (b)  An eligible entity or company that obtains a credit
779payment under this section through a claim that it knows is
780fraudulent is liable for reimbursement of the credit amount paid
781plus a penalty in an amount double the credit payment and
782reimbursement of reasonable costs, which penalty is in addition
783to any criminal penalty to which the entity or company is liable
784for the same acts, plus interest. The entity or company is also
785liable for costs and fees incurred by the state in investigating
786and prosecuting the fraudulent claim.
787     (8)(7)  ANNUAL REPORT.--The Office of Film and
788Entertainment shall provide an annual report for the previous
789state fiscal year, due October 1, to the Governor, the President
790of the Senate, and the Speaker of the House of Representatives
791outlining the return on investment to the state on tax credits
792awarded funds expended pursuant to this section.
793     (9)  REPEAL.--This section is repealed July 1, 2009.
794     Section 6.  For the fiscal year 2006-2007, one full-time
795equivalent position is authorized and the sums of $44,863 in
796recurring funds and $4,843 in nonrecurring funds are
797appropriated from the General Revenue Fund to the Department of
798Revenue for the purpose of funding the provisions of this act.
799     Section 7.  This act shall take effect July 1, 2006.


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