HB 1321

1
A bill to be entitled
2An act relating to entertainment industry economic
3development; amending s. 212.08, F.S.; providing for an
4entertainment industry credit of sales and use taxes paid
5on qualified expenditures; providing criteria,
6requirements, procedures, and limitations on the credit;
7providing for uses of the credit; providing duties and
8responsibilities of the Office of Film and Entertainment,
9the Office of Tourism, Trade, and Economic Development,
10and the Department of Revenue; authorizing the Office of
11Tourism, Trade, and Economic Development to adopt rules;
12providing for liability for fraudulent credit
13applications; amending s. 213.053, F.S.; authorizing the
14Department of Revenue to provide certain tax credit and
15tax refund information to the Office of Film and
16Entertainment and the Office of Tourism, Trade, and
17Economic Development; amending s. 220.02, F.S.; revising
18the order of priority list of applicable credits against
19certain taxes; creating s. 220.192, F.S.; providing for an
20entertainment industry corporate income tax credit of a
21percentage of certain qualified expenditures; providing
22criteria, requirements, procedures, and limitations on the
23credit; providing for aggregate amounts of tax credits
24available; providing for uses and allocations of the
25credit; providing for use and carryforward of the credit;
26providing for transfers of the credit; providing for
27noncorporate distributions of tax credits; authorizing the
28Office of Tourism, Trade, and Economic Development and the
29Department of Revenue to adopt rules; providing for
30liability for fraudulent credit applications; amending s.
31288.1254, F.S.; revising the entertainment industry
32financial incentive program to provide corporate income
33tax and sales and use tax credits to qualified
34entertainment entities rather than reimbursements from
35appropriations; revising provisions relating to
36definitions, creation and scope, application procedures,
37approval process, eligibility, required documents,
38qualified productions, and annual reports; providing
39criteria and limitations for awards of tax credits;
40providing marketing requirements; requiring the Office of
41Tourism, Trade, and Economic Development and Department of
42Revenue to adopt rules; providing liability for
43reimbursement of certain costs and fees associated with
44fraudulent applications; providing for future repeal;
45providing an appropriation; providing an effective date.
46
47Be It Enacted by the Legislature of the State of Florida:
48
49     Section 1.  Paragraph (r) is added to subsection (5) of
50section 212.08, Florida Statutes, to read:
51     212.08  Sales, rental, use, consumption, distribution, and
52storage tax; specified exemptions.--The sale at retail, the
53rental, the use, the consumption, the distribution, and the
54storage to be used or consumed in this state of the following
55are hereby specifically exempt from the tax imposed by this
56chapter.
57     (5)  EXEMPTIONS; ACCOUNT OF USE.--
58     (r)  Entertainment industry tax credit; authorization;
59eligibility for credits.--
60     1.  Beginning July 1, 2006, a qualified production company
61is eligible for tax credits of taxes paid on qualified
62expenditures as defined in s. 288.1254 as provided in this
63paragraph:
64     a.  The credit shall be granted as a refund of sales and
65use tax paid by a qualifying production company on qualified
66expenditures in the fiscal year preceding the date of
67application.
68     b.  To be eligible to receive the credit, an applicant must
69be a qualified production company as defined in s.
70288.1258(1)(b).
71     c.  A qualified production company may not be awarded more
72than $2 million in tax credits under this paragraph and s.
73220.192 per year unless the production is a high-impact
74television series, in which case the qualified production shall
75be eligible for a maximum tax credit award of $3 million per
76year. The tax credit available under this paragraph shall
77consist only of the tax paid by a qualified production company
78under this chapter and only up to the face amount of the credit.
79If the qualified production company cannot use the entire tax
80credit in the state fiscal year in which the credit is approved,
81any excess may be carried over to a succeeding state fiscal
82year. A tax credit granted under this paragraph and applied
83against sales and use taxes imposed under this chapter may be
84carried forward only for a maximum of 5 state fiscal years
85following the state fiscal year in which the credit was
86approved. Five years after the date a credit is granted under
87this paragraph, the credit expires and may not be used.
88     d.  The aggregate amount of tax credits allowed under this
89paragraph and s. 220.192 in any state fiscal year is $25
90million. If the total amount of allocated tax credits applied
91for in any state fiscal year exceeds the aggregate amount of tax
92credits authorized annually under this paragraph, such excess
93shall be treated as having been applied for on the first day of
94the next state fiscal year in which tax credits remain available
95for allocation. However, no more than an aggregate amount of $30
96million in tax credits shall be allocated between July 1, 2006,
97and June 30, 2007. The cumulative amount of credits that may be
98allocated between July 1, 2006, and June 30, 2009, shall not
99exceed $75 million. At such time as $75 million of tax credits
100have been allocated, no additional tax credits may be allocated.
101     e.  The tax credits awarded under this paragraph may only
102be used by the qualified production company to whom the credits
103were awarded. Credits awarded under this paragraph may not be
104sold, assigned, or otherwise transferred, in whole or in part.
105     2.a.  To be eligible to receive the credit provided by this
106paragraph, a qualified production company shall apply to the
107Office of Film and Entertainment prior to September 1 of each
108year for a refund of sales and use taxes paid on qualified
109expenditures in the preceding fiscal year.
110     b.  The Office of Film and Entertainment shall develop,
111with the cooperation of the department, a standardized
112application form for use in applying for the credit.
113     c.  Upon receipt of an application, the Office of Film and
114Entertainment shall review the application and information and
115determine whether or not the application is complete within 15
116business days. An application shall not be considered complete
117unless the application includes copies of invoices upon which
118Florida sales and use tax is separately stated, other proof that
119Florida sales and use tax was paid on the purchase of the
120qualified expenditures, and other documentation as required by
121the department. The Office of Film and Entertainment shall
122notify the applicant within 20 business days after receipt of
123the application of any deficiencies in the application. Upon
124receipt of a completed application, the Office of Film and
125Entertainment shall evaluate the application for credit under
126this paragraph and the Office of Tourism, Trade, and Economic
127Development shall issue an approval or a denial to the applicant
128within an additional 15 business days. The Office of Film and
129Entertainment shall provide the department with a copy of each
130completed application that has been approved. Within 30 days
131after receiving a copy of an approval, the department shall
132issue a refund directly to the qualified production company in
133the amount shown on the approval issued by the Office of
134Tourism, Trade, and Economic Development, notwithstanding the
135provisions of s. 215.26. The provisions of s. 212.095 do not
136apply to this paragraph.
137     d.  The Office of Tourism, Trade, and Economic Development
138may adopt rules pursuant to ss. 120.536(1) and 120.54 to
139implement this paragraph, including, but not limited to, rules
140specifying requirements for the application and approval
141process, records required for substantiation of credit awards,
142and determination of and qualification for credit awards.
143     3.a.  Any applicant who submits an application under this
144paragraph that includes fraudulent information is liable for
145reimbursement of the reasonable costs and fees associated with
146the review, processing, investigation, and prosecution.
147     b.  An eligible entity or company that obtains a credit
148payment under this paragraph through a claim that is fraudulent
149is liable for reimbursement of the credit amount paid plus a
150penalty in an amount double the credit payment and reimbursement
151of reasonable costs, which penalty is in addition to any
152criminal penalty to which the entity or company is liable for
153the same acts, plus interest. The entity or company is also
154liable for costs and fees incurred by the state in investigating
155and prosecuting the fraudulent claim.
156     Section 2.  Paragraph (k) of subsection (7) of section
157213.053, Florida Statutes, is amended, and paragraph (y) is
158added to that subsection, to read:
159     213.053  Confidentiality and information sharing.--
160     (7)  Notwithstanding any other provision of this section,
161the department may provide:
162     (k)1.  Payment information relative to chapters 199, 201,
163212, 220, 221, and 624 to the Office of Tourism, Trade, and
164Economic Development, or its employees or agents that are
165identified in writing by the office to the department, in the
166administration of the tax refund program for qualified defense
167contractors authorized by s. 288.1045 and the tax refund program
168for qualified target industry businesses authorized by s.
169288.106.
170     2.  Information relative to tax credits taken by a business
171under s. 220.191 and exemptions or tax refunds received by a
172business under s. 212.08(5)(j) and (r) to the Office of Tourism,
173Trade, and Economic Development, or its employees or agents that
174are identified in writing by the office to the department, in
175the administration and evaluation of the capital investment tax
176credit program authorized in s. 220.191 and the semiconductor,
177defense, and space tax exemption program authorized in s.
178212.08(5)(j).
179     (y)  Information relative to tax credits taken under s.
180220.192 and tax refunds received by a business under s.
181212.08(5)(r) to the Office of Film and Entertainment and the
182Office of Tourism, Trade, and Economic Development.
183
184Disclosure of information under this subsection shall be
185pursuant to a written agreement between the executive director
186and the agency. Such agencies, governmental or nongovernmental,
187shall be bound by the same requirements of confidentiality as
188the Department of Revenue. Breach of confidentiality is a
189misdemeanor of the first degree, punishable as provided by s.
190775.082 or s. 775.083.
191     Section 3.  Subsection (8) of section 220.02, Florida
192Statutes, is amended to read:
193     220.02  Legislative intent.--
194     (8)  It is the intent of the Legislature that credits
195against either the corporate income tax or the franchise tax be
196applied in the following order: those enumerated in s. 631.828,
197those enumerated in s. 220.191, those enumerated in s. 220.181,
198those enumerated in s. 220.183, those enumerated in s. 220.182,
199those enumerated in s. 220.1895, those enumerated in s. 221.02,
200those enumerated in s. 220.184, those enumerated in s. 220.186,
201those enumerated in s. 220.1845, those enumerated in s. 220.19,
202those enumerated in s. 220.185, and those enumerated in s.
203220.187, and those enumerated under s. 220.192.
204     Section 4.  Section 220.192, Florida Statutes, is created
205to read:
206     220.192  Entertainment industry tax credit; authorization;
207eligibility for credits.--
208     (1)  TAX CREDITS; ELIGIBILITY; AWARD;
209ALLOCATION.--Beginning July 1, 2006, a qualified production
210company is eligible for tax credits in the amount of 15 percent
211of qualified expenditures, as defined in s. 288.1254.
212     (a)  The credit shall be granted against the tax imposed
213and owing under this chapter by a qualified production company
214for the taxable year in which the application was granted.
215     (b)  To be eligible to receive the credit, an applicant
216must be a qualified production company as defined in s.
217288.1258(1)(b).
218     (c)  A qualified production company may not be awarded more
219than a total of $2 million in tax credits under this section and
220s. 212.08(5)(r) per year unless the production is a high-impact
221television series, in which case the production shall be
222eligible for a maximum total tax credit award of $3 million per
223year.
224     (2)  AGGREGATE TAX CREDIT AVAILABLE.--The aggregate amount
225of tax credits allowed under this section and s. 212.08(5)(r) in
226any state fiscal year is $25 million. If the total amount of
227allocated tax credits applied for in any state fiscal year
228exceeds the aggregate amount of tax credits authorized annually
229under this section, such excess shall be treated as having been
230applied for on the first day of the next state fiscal year in
231which tax credits remain available for allocation. However, no
232more than an aggregate amount of $30 million in tax credits
233shall be allocated between July 1, 2006, and June 30, 2007. The
234cumulative amount of credits that may be allocated between July
2351, 2006, and June 30, 2009, shall not exceed $75 million. At
236such time as $75 million of tax credits have been allocated, no
237additional tax credits may be allocated.
238     (3)  USE OF TAX CREDIT; CARRY FORWARD.--The tax credit
239available for use under this section for a taxable year is
240limited to the amount of the tax due under this chapter by a
241qualified production company. If the qualified production
242company cannot use the entire tax credit in the taxable year in
243which the credit is approved, any excess may be carried over to
244a succeeding taxable year. A tax credit granted under this
245section and applied against taxes imposed under this chapter may
246be carried forward only for a maximum of 5 taxable years
247following the taxable year in which the credit was approved.
248Five years after the date a credit is granted under this
249section, the credit expires and may not be used.
250     (4)  TRANSFER OF TAX CREDITS.--Upon application to and
251approval by the Department of Revenue, a qualified production
252company may sell, in whole or in part, a tax credit granted
253under this section. The sale of any amount of the tax credit
254shall not be exchanged for consideration received by the
255qualified production company of less than 85 percent of the
256transferred amount of tax credit. The qualified production
257company must transfer at least 10 percent of the remaining
258credits to each purchaser and may not conduct more than three
259transfers. The purchaser of the tax credit granted under this
260section and s. 288.1254 shall use the tax credit in the state
261fiscal year the tax credit is acquired from the qualified
262production company and otherwise may carry the tax credit over
263subject to the same limitations on tax credit usage as the
264qualified production company awarded the tax credit. The
265purchaser of the tax credit may not sell or otherwise transfer
266the tax credit. The Department of Revenue may adopt rules
267pursuant to ss. 120.536(1) and 120.54 to administer this
268subsection as provided in subsection (7).
269     (5)  NONCORPORATE DISTRIBUTIONS OF TAX CREDITS.--A
270qualified production company that is not a corporation as
271defined in s. 220.03 shall elect to make an application to the
272Department of Revenue to distribute tax credits awarded under
273this section to its partners or members in proportion to the
274respective distributive share of such partners' or members'
275income or loss in the taxable year in which such tax credits
276were approved. A tax credit granted under this section and
277applied against taxes imposed under this chapter may be carried
278forward only for a maximum of 5 taxable years following the
279state fiscal year in which the credit was approved.
280     (6)  USE OF TAX CREDITS.--A qualified production company
281may use the tax credit against the tax liability imposed under
282this chapter, in whole or in part, and for a refund of sales and
283use tax paid on qualified expenditures as provided in s.
284212.08(5)(r), the combination of which may not exceed the
285limitations provided in paragraph (1)(c).
286     (7)  RULES.--
287     (a)  The Office of Tourism, Trade, and Economic Development
288may adopt rules pursuant to ss. 120.536(1) and 120.54 to
289implement this section, including, but not limited to, rules
290specifying requirements for the application and approval
291process, records required for substantiation of credit awards,
292and determination of and qualification for credit awards.
293     (b)  The Department of Revenue may adopt rules pursuant to
294ss. 120.536(1) and 120.54 to administer the provisions of this
295section, including rules governing the manner and form of
296documentation required to claim tax credits granted or
297transferred under this section, and may establish guidelines as
298to the requirements for an affirmative showing of qualification
299for tax credits granted or transferred under this section.
300     (8)  FRAUDULENT CLAIMS.--
301     (a)  Any applicant who submits an application under this
302section that includes fraudulent information is liable for
303reimbursement of the reasonable costs and fees associated with
304the review, processing, investigation, and prosecution.
305     (b)  An eligible entity or company that obtains a credit
306payment under this section through a claim that is fraudulent is
307liable for reimbursement of the credit amount paid plus a
308penalty in an amount double the credit payment and reimbursement
309of reasonable costs, which penalty is in addition to any
310criminal penalty to which the entity or company is liable for
311the same acts, plus interest. The entity or company is also
312liable for costs and fees incurred by the state in investigating
313and prosecuting the fraudulent claim.
314     Section 5.  Section 288.1254, Florida Statutes, is amended
315to read:
316     288.1254  Entertainment industry financial incentive
317program; creation; purpose; definitions; application procedure;
318approval process; reimbursement eligibility; submission of
319required documentation; recommendations for credit award
320payment; policies and procedures; fraudulent claims.--
321     (1)  CREATION AND PURPOSE OF PROGRAM.--Subject to specific
322appropriation, There is created within the Office of Film and
323Entertainment an entertainment industry financial incentive
324program. The purpose of this program is to encourage the use of
325this state as a site for filming and developing and sustaining
326the workforce and infrastructure providing production services
327for filmed entertainment by granting tax credits for qualified
328production companies applicable to the corporate income tax
329imposed in s. 220.11 and a refund of sales and use taxes as
330provided in s. 212.08(5)(r).
331     (2)  DEFINITIONS.--As used in this section, the term:
332     (a)  "Filmed entertainment" means a theatrical or
333direct-to-video motion picture, a made-for-television motion
334picture teleproduction, a commercial, a music video, an
335industrial or educational film, a promotional video or film, a
336documentary film, a television pilot, a television special, a
337presentation for a television pilot, a television series,
338including, but not limited to, a drama, a reality, a comedy, a
339soap opera, a telenovela, a game show, and a miniseries
340production, or a digital-media-effects production by the
341entertainment industry to be sold or displayed in an electronic
342medium, excluding news shows and sporting events. As used in
343this paragraph, the term "motion picture" means a motion picture
344made on or by film, tape, or otherwise and produced by means of
345a motion picture camera, electronic camera or device, tape
346device, any combination of the foregoing, or any other means,
347method, or device now used or which may hereafter be adopted. As
348used in this paragraph, the term "digital-media-effects" means
349visual elements created through the modification of already
350existing or newly created visual elements for film, video, or
351animated media through the use of digital 2D/3D animation or
352painting, motion capture, or compositing technologies. For
353purposes of this section, the term "filmed entertainment" does
354not include the electronic gaming industry or sporting events.
355     (b)  "High-impact television series" means a production
356created to run multiple production seasons with an estimated
357order of at least seven episodes per season and qualified
358expenditures of at least $625,000 per episode.
359     (c)(b)  "Production costs" means the costs of real,
360tangible, and intangible property used and services performed
361primarily or customarily in the production, including
362preproduction and postproduction, of qualified filmed
363entertainment. Production costs generally include, but are not
364limited to:
365     1.  Wages, salaries, or other compensation, including
366amounts paid through payroll service companies, for technical
367and production crews, directors, producers, and performers who
368are residents of this state.
369     2.  Expenditures for sound stages, backlots, production
370editing, digital effects, sound recordings, sets, and set
371construction.
372     3.  Expenditures for rental equipment, including, but not
373limited to, cameras and grip or electrical equipment.
374     4.  Expenditures for meals, travel, and accommodations, and
375goods used in producing filmed entertainment that is located and
376doing business in this state.
377     5.  Expenditures for goods and services used in producing
378filmed entertainment.
379     (d)(c)  "Qualified expenditures" means production costs
380incurred in this state within the current state fiscal year for
381goods purchased or leased from or services provided by
382purchased, leased, or employed from a resident of this state or
383a vendor or supplier who is located and doing business in this
384state or payments to residents of this state in the form of
385salary, wages, or other compensation, but excluding wages,
386salaries, or other compensation paid to the two highest-paid
387residents of this state participating in the qualified
388production employees.
389     (e)(d)  "Qualified production" means filmed entertainment
390that meets or exceeds minimum qualified makes expenditures
391required in this state for the total or partial production of
392filmed entertainment. Productions that are deemed by the Office
393of Film and Entertainment to contain obscene content, as defined
394by the United States Supreme Court, are not qualified
395productions. Also, a production is not a qualified production if
396it is determined that the first day of principal photography in
397this state occurred on or before the date of submitting its
398application to the Office of Film and Entertainment or prior to
399certification by the Office of Tourism, Trade, and Economic
400Development.
401     (f)(e)  "Qualified production company relocation project"
402means a corporation, limited liability company, partnership,
403corporate headquarters, or other legal private entity engaged in
404the production of filmed entertainment that is domiciled in
405another state or country and relocates its operations to this
406state, is organized under the laws of this or any other state or
407country, and includes as one of its primary purposes digital-
408media-effects or motion picture and television production, or
409postproduction.
410     (3)  APPLICATION PROCEDURE; APPROVAL PROCESS.--
411     (a)  Any company engaged in this state in producing filmed
412entertainment may submit an application to the Office of Film
413and Entertainment for the purpose of determining qualification
414for an award of tax credits receipt of reimbursement provided in
415this section. The office must be provided information required
416to determine if the production is a qualified production and to
417determine the qualified expenditures, production costs, and
418other information necessary for the office to determine both
419eligibility for the tax credit and level of reimbursement.
420     (b)  A digital-media-effects company in the state which
421furnishes digital material to filmed entertainment may submit an
422application to the Office of Film and Entertainment for the
423purpose of determining qualification for receipt of
424reimbursement authorized by this section. The office must be
425provided information required to determine if the company is
426qualified and to determine the amount of reimbursement.
427     (c)  Any corporation, limited liability company,
428partnership, corporate headquarters, or other private entity
429domiciled in another state which includes as one of its primary
430purposes digital-media-effects or motion picture and television
431production and which is considering relocation to this state may
432submit an application to the Office of Film and Entertainment
433for the purpose of determining qualification for reimbursement
434under this section.
435     (d)1.  The Office of Film and Entertainment shall establish
436a process by which an application is accepted and reviewed and
437reimbursement eligibility and reimbursement amount are
438determined. The Office of Film and Entertainment may request
439assistance from a duly appointed local film commission in
440determining qualifications for reimbursement and compliance.
441     1.2.  The Office of Film and Entertainment shall develop a
442standardized application form for use in qualifying an applicant
443as approving a qualified production, a qualified relocation
444project, or a company qualifying under paragraph (a), paragraph
445(b), or paragraph (c). The application form for qualifying an
446applicant as a qualified production must include, but need not
447be limited to, production-related information on employment,
448proposed total production budgets, planned expenditures in this
449state which are intended for use exclusively as an integral part
450of preproduction, production, or postproduction activities
451engaged primarily in this state, and a signed affirmation from
452the applicant Office of Film and Entertainment that the
453information on the application form has been verified and is
454correct. The application form shall be distributed to applicants
455by the Office of Film and Entertainment or local film
456commissions.
457     2.3.  Within 10 business days after receipt of an
458application, the Office of Film and Entertainment shall review
459the application to determine if the application contains all the
460information required by this subsection and meets the criteria
461set out in this section. The office shall qualify all
462applications that contain the information and meet the criteria
463set out in this section as eligible to receive a tax credit or
464shall notify the applicant that the requirements for
465qualification have not been met. If the application is
466qualified, the office shall recommend to the Office of Tourism,
467Trade, and Economic Development approval of the maximum amount
468of the tax credit to be awarded. The Office of Film and
469Entertainment must complete its review of each application
470within 5 days after receipt of the completed application,
471including all required information, and it must notify the
472applicant of its determination within 10 business days after
473receipt of the completed application and required information.
474     3.4.  Within 10 business days after receiving notice from
475the Office of Film and Entertainment of qualification of an
476applicant as a qualified production and a recommended approval
477of the maximum amount of tax credit to be awarded, the Office of
478Tourism, Trade, and Economic Development shall certify the
479maximum tax credit award, if any. The certification shall be
480transmitted to the applicant and to the executive director of
481the Department of Revenue. The applicant shall be responsible
482for forwarding a certified application to the Department of
483Revenue. Upon determination that all criteria are met for
484qualification for reimbursement, the Office of Film and
485Entertainment shall notify the applicant of such approval. The
486office shall also notify the Office of Tourism, Trade, and
487Economic Development of the applicant approval and amount of
488reimbursement required. The Office of Tourism, Trade, and
489Economic Development shall make final determination for actual
490reimbursement.
491     4.5.  The Office of Film and Entertainment shall deny an
492application if the office it determines that:
493     a.  The application is not complete or does not meet the
494requirements of this section; or
495     b.  The tax credit amount reimbursement sought does not
496meet the requirements of this section for such reimbursement.
497     (4)  CREDIT REIMBURSEMENT ELIGIBILITY; SUBMISSION OF
498REQUIRED DOCUMENTATION; APPLICATION RECOMMENDATIONS FOR TRANSFER
499PAYMENT.--
500     (a)  Tax credit award.--A production of filmed
501entertainment that is qualified by the Office of Film and
502Entertainment and is certified by the Office of Tourism, Trade,
503and Economic Development is eligible for corporate income tax
504credits granted pursuant to s. 220.192 in an amount equal a
505reimbursement of up to 15 percent of its qualified qualifying
506expenditures and credits granted against sales and use tax paid
507on qualified expenditures pursuant to s. 212.08(5)(r).
508     (b)  Production spanning 2 state fiscal years.--A qualified
509production that starts in one state fiscal year and finishes in
510the next state fiscal year shall have all qualified expenditures
511from both state fiscal years certified for the latter state
512fiscal year. This requirement does not apply to the commercials
513and music video queue described in subparagraph (d)3.
514     (c)  Aggregate tax credit available.--The aggregate amount
515of tax credits allowed under this section in any state fiscal
516year is $25 million. If the total amount of allocated tax
517credits applied for in any state fiscal year exceeds the
518aggregate amount of tax credits authorized annually under this
519section, such excess shall be treated as having been applied for
520on the first day of the next state fiscal year in which tax
521credits remain available for allocation. However, no more than
522an aggregate amount of $30 million in tax credits granted
523pursuant to this section and ss. 212.08(5)(r) and 220.192 shall
524be allocated between July 1, 2006, and June 30, 2007. The
525cumulative amount of credits that may be allocated between July
5261, 2006, and June 30, 2009, may not exceed $75 million. At such
527time as $75 million of tax credits granted pursuant to this
528section and ss. 212.08(5)(r) and 220.192 have been allocated, no
529additional tax credits may be allocated in this state on a
530filmed entertainment program that demonstrates a minimum of
531$850,000 in total qualified expenditures for the entire run of
532the project, versus the budget on a single episode, within the
533fiscal year from July 1 to June 30. However, the maximum
534reimbursement that may be made with respect to any filmed
535entertainment program is $2 million. All reimbursements under
536this section are subject to appropriation.
537     (d)  Filmed entertainment queues.--Tax credits awarded
538Payments under this section in a state fiscal year shall be made
539to qualified productions according to a production's principal
540photography start date, for those qualified productions having
541entered into the first queue as cited in subparagraph 1. or the
542second queue cited in subparagraph 2. within the first 2 weeks
543after the queue's opening. All other qualified productions
544entering into either queue after the initial 2-week openings
545shall be on a first-come, first-served basis until the
546appropriation for that fiscal year is exhausted. On February 1
547of each year, the remaining funds within both queues shall be
548combined into a single queue and distributed based on a
549project's principal photography start date. The eligibility of
550qualified productions may not carry over from year to year, but
551such productions may reapply for eligibility under the
552guidelines established for doing so. The Office of Film and
553Entertainment shall develop a procedure to ensure that qualified
554productions continue on a reasonable schedule until completion.
555If a qualified production is not continued according to a
556reasonable schedule, the office shall withdraw its eligibility
557and reallocate the funds to the next qualified productions
558already in the queue that have yet to receive their full maximum
559or 15-percent financial reimbursement, if they have not started
560principal photography by the time the funds become available.
561     1.  Film, television, and episodic queue.--Theatrical or
562direct-to-video motion pictures, made-for-television movies,
563commercials, music videos, industrial and educational films,
564promotional videos or films, documentary films, television
565specials, television series, including, but not limited to,
566miniseries and telenovelas, and digital-media-effects
567productions by the entertainment industry to be sold or
568displayed in an electronic medium that demonstrate a minimum of
569$625,000 in total qualified expenditures for the entire run of
570the project, which, for a television series, means a season even
571if the season is not completed in the same state fiscal year in
572which principal photography began, shall have their own separate
573queue established, and such queue shall have dedicated to it 60
574percent of all available tax credits in any state fiscal year
575for which this section applies. The maximum tax credit award
576that may be made from this queue for any single production is $2
577million per year unless the production is a high-impact
578television series, in which case the production shall be
579eligible for a maximum tax credit award of $3 million per year,
580provided such production meets the other criteria of this
581section. On March 1 of each year, the remaining tax credits
582within this queue shall be merged into a general queue and may
583be used for other purposes of this section as determined by the
584Office of Film and Entertainment. A television series,
585including, but not limited to, a qualified high-impact
586television series, is not eligible for a tax credit award under
587this section after its fifth production season in this state. A
588qualified high-impact television series shall be allowed first
589position in this queue for its first five production seasons in
590this state if the application is received by the Office of Film
591and Entertainment within the first 2 weeks after the queue's
592opening. A qualified high-impact television series must file an
593application for each state fiscal year in which it is eligible
594to receive the credit, unless otherwise provided in this section
595of the state incentive money.
596     2.  Television pilot queue.--Television pilots and,
597presentations for television pilots for television series
598intended to be shot in this state and, or television series,
599including, but not limited to, drama, reality, comedy, soap
600opera, telenovela, game show, or miniseries productions, by the
601entertainment industry to be sold or displayed in an electronic
602medium that demonstrate a minimum of $625,000 in total qualified
603expenditures for the pilot episode or presentation shall have
604their own separate queue established, and such queue shall have
605dedicated to it 20 40 percent of all available tax credits in
606any given state fiscal year for which this section applies. The
607maximum tax credit award that may be made from this queue for
608any single pilot episode or presentation is $2 million. On March
6091 of each year, the remaining tax credits within this queue
610shall be merged into a general queue and may be used for other
611purposes of this section as determined by the Office of Film and
612Entertainment.
613     3.  Commercials and music video queue.--Commercials and
614music videos by the entertainment industry to be sold or
615displayed in an electronic medium that demonstrate a minimum of
616$500,000 in combined total qualified expenditures from a
617production company during the state fiscal year with a minimum
618of $75,000 in qualified expenditures for each production shall
619have their own separate queue established. Such queue shall have
620dedicated to it 20 percent of available tax credits in any given
621state fiscal year for which this section applies. The maximum
622tax credit award that may be made from this queue for any single
623production company is $500,000 for a state fiscal year. On April
6241 of each year, the remaining tax credits within this queue
625shall be merged into a general queue and may be used for other
626purposes of this section as determined by the Office of Film and
627Entertainment.
628     (e)  Loss of eligibility; reallocation of tax credits.--If
629a qualified production is not continued according to a
630reasonable schedule or the Office of Film and Entertainment is
631notified that a qualified production will no longer be produced,
632the office shall withdraw the production's eligibility for tax
633credits and reallocate the tax credits to the next qualified
634productions already in the queue that have yet to receive a full
635tax credit if such next qualified productions have not started
636principal photography by the time the tax credits become
637available.
638     (f)  Verification of tax credit award.--The Office of Film
639and Entertainment shall develop a process by which a qualified
640production that has been certified by the Office of Tourism,
641Trade, and Economic Development shall submit to the Office of
642Film and Entertainment, in a timely manner after production ends
643and after making all of its qualified expenditures, verifying
644data to substantiate each qualified expenditure. The Office of
645Film and Entertainment shall report to the Office of Tourism,
646Trade, and Economic Development the final verified amount of
647actual qualified expenditures made by the qualified production.
648The Office of Tourism, Trade, and Economic Development shall
649then notify the executive director of the Department of Revenue
650that the qualified production has met all requirements of the
651incentive program and shall recommend the final amount of the
652tax credit of the state incentive money.
653     (g)  Use of tax credit; carry forward.--
654     1.  The tax credit available under s. 212.08(5)(r) shall
655consist only of the tax paid by a qualified production company
656under chapter 212 and only up to the face amount of the credit.
657If the qualified production company cannot use the entire tax
658credit in the state fiscal year in which the credit is approved,
659any excess may be carried over to a succeeding state fiscal
660year. A tax credit granted under s. 212.08(5)(r) and applied
661against sales and use taxes imposed under chapter 212 may be
662carried forward only for a maximum of 5 state fiscal years
663following the state fiscal year in which the credit was
664approved. Five years after the date a credit is granted under s.
665212.08(5)(r), the credit expires and may not be used.
666     2.  The tax credit available for use under s. 220.192 for a
667taxable year is limited to the amount of the tax due under
668chapter 220 by a qualified production company. If the qualified
669production company cannot use the entire tax credit in the
670taxable year in which the credit is approved, any excess may be
671carried over to a succeeding taxable year. A tax credit granted
672under s. 220.192 and applied against taxes imposed under chapter
673220 may be carried forward only for a maximum of 5 taxable years
674following the taxable year in which the credit was approved.
675Five years after the date a credit is granted under s. 220.192,
676the credit expires and may not be used.
677     (h)  Transfer of tax credits.--Upon application to and
678approval by the Department of Revenue, a qualified production
679company may sell, in whole or in part, a tax credit granted
680pursuant to this section and s. 220.192. The sale of any amount
681of the tax credit shall not be exchanged for consideration
682received by the qualified production company of less than 85
683percent of the transferred amount of tax credit. The qualified
684production company must transfer at least 10 percent of the
685remaining credits to each purchaser and may not conduct more
686than three transfers. The purchaser shall surrender the tax
687credit in the state fiscal year acquired from the qualified
688production company and otherwise may carry the tax credit over
689subject to the same limitations on tax credit usage as the
690qualified production company awarded the tax credit. The
691purchaser may not sell or otherwise transfer the tax credit. The
692Department of Revenue may adopt rules pursuant to ss. 120.536(1)
693and 120.54 to administer this paragraph, as provided in
694paragraph (6)(b).
695     (i)  Noncorporate distribution of tax credits.--A qualified
696production company that is not a corporation as defined in s.
697220.03 shall elect to make an application to the Department of
698Revenue as provided in paragraph (h) or distribute tax credits
699awarded under this section to its partners or members in
700proportion to the respective distributive share of such
701partners' or members' income or loss in the state fiscal year in
702which such tax credits were approved. A tax credit granted
703pursuant to this section and s. 220.192 and applied against
704taxes imposed under chapter 220 shall be carried forward only
705for a maximum of 5 taxable years following the state fiscal year
706in which the credit was approved. The Department of Revenue may
707adopt rules pursuant to ss. 120.536(1) and 120.54 to administer
708this paragraph, as provided in paragraph (6)(b).
709     (j)  Use of tax credits.--A qualified production company
710may use the tax credit against the tax liability imposed under
711s. 220.192, in whole or in part, and for a refund of sales and
712use taxes paid on qualified expenditures as provided in s.
713212.08(5)(r) the combination of which may not exceed the credit
714limitations provided in this section.
715     (b)  A digital-media-effects company in the state which
716furnishes digital material to filmed entertainment may be
717eligible for a payment in an amount not to exceed 5 percent of
718its annual gross revenues on qualified expenditures as defined
719in paragraph (2)(c) before taxes or $100,000, whichever is less.
720A company applying for payment must submit documentation
721annually as required by the Office of Film and Entertainment for
722determination of eligibility of claimed billing and
723determination of the amount of payment for which the company is
724eligible.
725     (c)  A qualified relocation project that is certified by
726the Office of Film and Entertainment is eligible for a one-time
727incentive payment in an amount equal to 5 percent of its annual
728gross revenues before taxes for the first 12 months of
729conducting business in its Florida domicile or $200,000,
730whichever is less. A company applying for payment must submit
731documentation as required by the Office of Film and
732Entertainment for determination of eligibility of claimed
733billing and determination of the amount of payment for which the
734company is eligible.
735     (d)  A qualified production, a digital-media-effects
736company, or a qualified relocation project applying for a
737payment under this section must submit documentation for claimed
738qualified expenditures to the Office of Film and Entertainment.
739     (e)  The Office of Film and Entertainment shall notify the
740Office of Tourism, Trade, and Economic Development whether an
741applicant meets the criteria for reimbursement and shall
742recommend the reimbursement amount. The Office of Tourism,
743Trade, and Economic Development shall make the final
744determination for actual reimbursement.
745     (5)  MARKETING REQUIREMENTS.--The Office of Film and
746Entertainment shall ensure appropriate marketing materials,
747including, but not limited to, promotions of this state as a
748tourist or filming destination, are required when appropriate
749to be included on any filmed entertainment as a condition of
750receiving a tax credit under this section. The Office of Film
751and Entertainment shall consult with appropriate entities for
752the development and implementation of marketing materials.
753     (6)(5)  RULES POLICIES AND PROCEDURES.--
754     (a)  The Office of Tourism, Trade, and Economic Development
755shall adopt rules pursuant to ss. 120.536(1) and 120.54 policies
756and procedures to implement this section, including, but not
757limited to, rules specifying requirements for the application
758and approval process, records required for submission for
759substantiation of credit awards for reimbursement, and
760determination of and qualification for credit awards, and
761marketing requirements for credit recipients reimbursement.
762     (b)  The Department of Revenue may adopt rules pursuant to
763ss. 120.536(1) and 120.54 to administer the provisions of this
764section, including rules governing the manner and form of
765documentation required to claim tax credits granted or
766transferred under this section, and may establish guidelines as
767to the requisites for an affirmative showing of qualification
768for tax credits granted or transferred under this section.
769     (7)(6)  FRAUDULENT CLAIMS.--
770     (a)  Any applicant who submits an application under this
771section that includes fraudulent information is liable for
772reimbursement of the reasonable costs and fees associated with
773the review, processing, investigation, and prosecution.
774     (b)  An eligible entity or company that obtains a credit
775payment under this section through a claim that it knows is
776fraudulent is liable for reimbursement of the credit amount paid
777plus a penalty in an amount double the credit payment and
778reimbursement of reasonable costs, which penalty is in addition
779to any criminal penalty to which the entity or company is liable
780for the same acts, plus interest. The entity or company is also
781liable for costs and fees incurred by the state in investigating
782and prosecuting the fraudulent claim.
783     (8)(7)  ANNUAL REPORT.--The Office of Film and
784Entertainment shall provide an annual report for the previous
785state fiscal year, due October 1, to the Governor, the President
786of the Senate, and the Speaker of the House of Representatives
787outlining the return on investment to the state on tax credits
788awarded funds expended pursuant to this section.
789     (9)  REPEAL.--This section is repealed July 1, 2009.
790     Section 6.  For the fiscal year 2006-2007, one full-time
791equivalent position is authorized and the sums of $44,863 in
792recurring funds and $4,843 in nonrecurring funds are
793appropriated from the General Revenue Fund to the Department of
794Revenue for the purpose of funding the provisions of this act.
795     Section 7.  This act shall take effect July 1, 2006.


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