Florida Senate - 2006 COMMITTEE AMENDMENT
Bill No. CS for SB 2110
Barcode 941844
CHAMBER ACTION
Senate House
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04/25/2006 10:13 AM .
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11 The Committee on Government Efficiency Appropriations (Posey)
12 recommended the following amendment:
13
14 Senate Amendment (with title amendment)
15 Delete everything after the enacting clause
16
17 and insert:
18 Section 1. Paragraph (r) is added to subsection (5) of
19 section 212.08, Florida Statutes, to read:
20 212.08 Sales, rental, use, consumption, distribution,
21 and storage tax; specified exemptions.--The sale at retail,
22 the rental, the use, the consumption, the distribution, and
23 the storage to be used or consumed in this state of the
24 following are hereby specifically exempt from the tax imposed
25 by this chapter.
26 (5) EXEMPTIONS; ACCOUNT OF USE.--
27 (r) Entertainment industry tax credit; authorization;
28 eligibility for credits.--
29 1. Beginning July 1, 2006, a qualified production
30 company is eligible for tax credits of taxes paid on qualified
31 expenditures, as defined in s. 288.1254, as provided in this
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1 paragraph:
2 a. The credit shall be granted as a refund of sales
3 and use tax paid by a qualifying production company on
4 qualified expenditures in the fiscal year preceding the date
5 of application.
6 b. To be eligible to receive the credit, an applicant
7 must be a qualified production company as defined in s.
8 288.1258(1)(b).
9 c. A qualified production company may not be awarded
10 more than $2 million in tax credits under this paragraph and
11 s. 220.192 per year unless the production is a high-impact
12 television series, in which case the qualified production
13 shall be eligible for a maximum tax credit award of $3
14 million. The tax credit available under this paragraph shall
15 be surrendered only in satisfaction of the tax owed by a
16 qualified production company under this chapter and only up to
17 the face amount of the credit. If the qualified production
18 company cannot use the entire tax credit in the taxable year
19 in which the credit is approved, any excess may be carried
20 over to a succeeding taxable year. A tax credit granted under
21 this paragraph and applied against taxes imposed under this
22 chapter may be carried forward only for a maximum of 5 taxable
23 years following the taxable year in which the credit was
24 approved. Five years after the date a credit is granted under
25 this paragraph, the credit expires and may not be used.
26 d. The aggregate amount of tax credits allowed under
27 this paragraph and s. 220.192 in any state fiscal year is $25
28 million. If the total amount of allocated tax credits applied
29 for in any state fiscal year exceeds the aggregate amount of
30 tax credits authorized annually under this paragraph, such
31 excess shall be treated as having been applied for on the
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1 first day of the next state fiscal year in which tax credits
2 remain available for allocation. However, no more than an
3 aggregate amount of $30 million in tax credits shall be
4 allocated between July 1, 2006, and June 30, 2007. The
5 cumulative amount of credits which may be allocated between
6 July 1, 2006, and June 30, 2009, may not exceed $75 million.
7 At such time as $75 million of tax credits have been
8 allocated, no additional tax credits may be allocated.
9 e. The tax credits awarded under this paragraph may be
10 used only by the qualified production company to whom the
11 credits were awarded. Credits awarded under this paragraph may
12 not be sold, assigned, or otherwise transferred, in whole or
13 in part.
14 2.a. To be eligible to receive the credit provided by
15 this paragraph, a qualified production company shall apply to
16 the Office of Film and Entertainment prior to September 1 of
17 each year for a refund of sales and use taxes paid on
18 qualified expenditures in the preceding fiscal year.
19 b. The Office of Film and Entertainment shall develop,
20 with the cooperation of the department, a standardized
21 application form for use in applying for the credit.
22 c. Upon receipt of an application, the Office of Film
23 and Entertainment shall review the application and information
24 and determine whether or not the application is complete
25 within 10 working days. An application shall not be considered
26 complete unless the application includes copies of invoices
27 upon which Florida sales tax is separately stated, other proof
28 that Florida tax was paid on the purchase of the qualified
29 expenditures, and other documentation as required by the
30 department. The Office of Film and Entertainment shall notify
31 the applicant within 15 calendar days of any deficiencies in
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1 the application. Upon receipt of a completed application, the
2 Office of Film and Entertainment shall evaluate the
3 application for credit under this paragraph and issue an
4 approval or a denial to the applicant within an additional 15
5 calendar days. The Office of Film and Entertainment shall
6 provide the department with a copy of each completed
7 application that has been approved. Within 30 days after
8 receiving a copy of an approval, the department shall issue a
9 refund directly to the qualified production company in the
10 amount shown on the approval issued by the Office of Film and
11 Entertainment, notwithstanding the provisions of s. 215.26.
12 The provisions of s. 212.095 do not apply to this paragraph.
13 d. The Office of Tourism, Trade, and Economic
14 Development may adopt rules pursuant to ss. 120.536(1) and
15 120.54 to implement this paragraph, including, but not limited
16 to, rules specifying requirements for the application and
17 approval process, records required for substantiation of
18 credit awards, and determination of and qualification for
19 credit awards.
20 3.a. Any applicant who submits an application under
21 this paragraph which includes fraudulent information is liable
22 for reimbursement of the reasonable costs and fees associated
23 with the review, processing, investigation, and prosecution of
24 the application.
25 b. An eligible entity or company that obtains a credit
26 payment under this paragraph through a claim that is
27 fraudulent is liable for reimbursement of the credit amount
28 paid plus a penalty in an amount double the credit payment and
29 reimbursement of reasonable costs, which penalty is in
30 addition to any criminal penalty to which the entity or
31 company is liable for the same acts, plus interest. The entity
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1 or company is also liable for costs and fees incurred by the
2 state in investigating and prosecuting the fraudulent claim.
3 Section 2. Paragraph (k) of subsection (7) of section
4 213.053, Florida Statutes, is amended, and paragraph (y) is
5 added to that subsection, to read:
6 213.053 Confidentiality and information sharing.--
7 (7) Notwithstanding any other provision of this
8 section, the department may provide:
9 (k)1. Payment information relative to chapters 199,
10 201, 212, 220, 221, and 624 to the Office of Tourism, Trade,
11 and Economic Development, or its employees or agents that are
12 identified in writing by the office to the department, in the
13 administration of the tax refund program for qualified defense
14 contractors authorized by s. 288.1045 and the tax refund
15 program for qualified target industry businesses authorized by
16 s. 288.106.
17 2. Information relative to tax credits taken by a
18 business under s. 220.191 and exemptions or tax refunds
19 received by a business under s. 212.08(5)(j) and (r) to the
20 Office of Tourism, Trade, and Economic Development, or its
21 employees or agents that are identified in writing by the
22 office to the department, in the administration and evaluation
23 of the capital investment tax credit program authorized in s.
24 220.191 and the semiconductor, defense, and space tax
25 exemption program authorized in s. 212.08(5)(j).
26 (y) Information relative to tax credits taken under s.
27 220.192 and tax refunds received by a business under s.
28 212.08(5)(r) to the Office of Film and Entertainment and the
29 Office of Tourism, Trade, and Economic Development.
30
31 Disclosure of information under this subsection shall be
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1 pursuant to a written agreement between the executive director
2 and the agency. Such agencies, governmental or
3 nongovernmental, shall be bound by the same requirements of
4 confidentiality as the Department of Revenue. Breach of
5 confidentiality is a misdemeanor of the first degree,
6 punishable as provided by s. 775.082 or s. 775.083.
7 Section 3. Subsection (8) of section 220.02, Florida
8 Statutes, is amended to read:
9 220.02 Legislative intent.--
10 (8) It is the intent of the Legislature that credits
11 against either the corporate income tax or the franchise tax
12 be applied in the following order: those enumerated in s.
13 631.828, those enumerated in s. 220.191, those enumerated in
14 s. 220.181, those enumerated in s. 220.183, those enumerated
15 in s. 220.182, those enumerated in s. 220.1895, those
16 enumerated in s. 221.02, those enumerated in s. 220.184, those
17 enumerated in s. 220.186, those enumerated in s. 220.1845,
18 those enumerated in s. 220.19, those enumerated in s. 220.185,
19 and those enumerated in s. 220.187, and those enumerated under
20 s. 220.192.
21 Section 4. Section 220.192, Florida Statutes, is
22 created to read:
23 220.192 Entertainment industry tax credit;
24 authorization; eligibility for credits.--
25 (1) TAX CREDITS; ELIGIBILITY; AWARD;
26 ALLOCATION.--Beginning July 1, 2006, a qualified production
27 company is eligible for tax credits in the amount of 15
28 percent of qualified expenditures, as defined in s. 288.1254.
29 (a) The credit shall be granted against the tax
30 imposed and owing under this chapter by a qualifying
31 production company for the taxable year in which the
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1 application was granted.
2 (b) To be eligible to receive the credit, an applicant
3 must be a qualified production company as defined in s.
4 288.1258(1)(b).
5 (c) A qualified production company may not be awarded
6 more than a total of $2 million in tax credits under this
7 section and s. 212.08 per year unless the production is a
8 high-impact television series, in which case the production
9 shall be eligible for a maximum total tax credit award of $3
10 million. The tax credit available under this section shall be
11 surrendered only in satisfaction of the tax owed under this
12 chapter by a qualified production company under this chapter
13 and only up to the face amount of the credit. If the qualified
14 production company cannot use the entire tax credit in the
15 taxable year in which the credit is approved, any excess may
16 be carried over to a succeeding taxable year. A tax credit
17 granted under this section and applied against taxes imposed
18 under this chapter may be carried forward for only a maximum
19 of 5 taxable years following the taxable year in which the
20 credit was approved. Five years after the date a credit is
21 granted under this section, the credit expires and may not be
22 used.
23 (d) The aggregate amount of tax credits allowed under
24 this section and s. 212.08(5)(r) in any state fiscal year is
25 $25 million. If the total amount of allocated tax credits
26 applied for in any state fiscal year exceeds the aggregate
27 amount of tax credits authorized annually under this section,
28 such excess shall be treated as having been applied for on the
29 first day of the next state fiscal year in which tax credits
30 remain available for allocation. However, no more than an
31 aggregate amount of $30 million in tax credits shall be
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1 allocated between July 1, 2006, and June 30, 2007. The
2 cumulative amount of credits which may be allocated between
3 July 1, 2006, and June 30, 2009, may not exceed $75 million.
4 At such time as $75 million of tax credits have been
5 allocated, no additional tax credits may be allocated.
6 (2) RULES.--The Office of Tourism, Trade, and Economic
7 Development may adopt rules pursuant to ss. 120.536(1) and
8 120.54 to implement this section, including, but not limited
9 to, rules specifying requirements for the application and
10 approval process, records required for substantiation of
11 credit awards, and determination of and qualification for
12 credit awards.
13 (3) FRAUDULENT CLAIMS.--
14 (a) Any applicant who submits an application under
15 this section which includes fraudulent information is liable
16 for reimbursement of the reasonable costs and fees associated
17 with the review, processing, investigation, and prosecution of
18 the application.
19 (b) An eligible entity or company that obtains a
20 credit payment under this section through a claim that is
21 fraudulent is liable for reimbursement of the credit amount
22 paid plus a penalty in an amount double the credit payment and
23 reimbursement of reasonable costs, which penalty is in
24 addition to any criminal penalty to which the entity or
25 company is liable for the same acts, plus interest. The entity
26 or company is also liable for costs and fees incurred by the
27 state in investigating and prosecuting the fraudulent claim.
28 (4) USE OF TAX CREDIT; CARRYFORWARD.--The tax credit
29 available under this section shall be surrendered only in
30 satisfaction of the tax owed by a qualified production company
31 under this chapter and only up to the face amount of the
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1 credit. If the qualified production company cannot use the
2 entire tax credit in the taxable year in which the credit is
3 approved, any excess may be carried over to a succeeding
4 taxable year. A tax credit granted under this section and
5 applied against taxes imposed under this chapter may be
6 carried forward only for a maximum of 5 taxable years
7 following the taxable year in which the credit was approved.
8 Five years after the date a credit is granted under this
9 section, the credit expires and may not be used.
10 (5) TRANSFER OF TAX CREDITS.--Upon application to and
11 approval by the Department of Revenue, a qualified production
12 company may sell, in whole or in part, a tax credit granted
13 under this section. The sale or assignment of any amount of
14 the tax credit shall not be exchanged for consideration
15 received by the qualified production company of less than 85
16 percent of the transferred amount of tax credit. The qualified
17 production company must transfer at least 10 percent of the
18 remaining credits to each purchaser and may not conduct more
19 than three transfers. The purchaser of the tax credit granted
20 under s. 288.1254 shall use the tax credit in the state fiscal
21 year the tax credit is acquired from the qualified production
22 company and otherwise may carry the tax credit over subject to
23 the same limitations on tax credit usage as the qualified
24 production company awarded the tax credit. The purchaser of
25 the tax credit may not sell or otherwise transfer the tax
26 credit. The Department of Revenue may adopt rules pursuant to
27 ss. 120.536(1) and 120.54 to administer this subsection.
28 (6) NONCORPORATE DISTRIBUTIONS OF TAX CREDITS.--A
29 qualified production company that is not a corporation as
30 defined in s. 220.03 shall elect to make an application to the
31 Department of Revenue to distribute tax credits awarded under
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1 this section to its partners or members in proportion to the
2 respective distributive share of such partners' or members'
3 income or loss in the taxable fiscal year in which such tax
4 credits were approved. A tax credit granted under this section
5 and applied against taxes imposed under this chapter may be
6 carried forward only for a maximum of 5 taxable years
7 following the state fiscal year in which the credit was
8 approved.
9 (7) USE OF TAX CREDITS.--A qualified production
10 company may use the tax credit against the tax liability
11 imposed under this chapter, in whole or in part, or against
12 the sales tax paid on qualified expenditures as defined in s.
13 288.1254.
14 (8) AGGREGATE TAX CREDIT AVAILABLE.--The aggregate
15 amount of tax credits allowed under this section in any state
16 fiscal year is $25 million. If the total amount of allocated
17 tax credits applied for in any state fiscal year exceeds the
18 aggregate amount of tax credits authorized annually under this
19 section, such excess shall be treated as having been applied
20 for on the first day of the next state fiscal year in which
21 tax credits remain available for allocation. However, no more
22 than an aggregate amount of $30 million in tax credits granted
23 under this section or s. 212.08(5)(r) shall be allocated
24 between July 1, 2006, and June 30, 2007. The cumulative amount
25 of credits that may be allocated between July 1, 2006, and
26 June 30, 2009, may not exceed $75 million. At such time as $75
27 million of tax credits granted under this section or s.
28 212.08(5)(r) have been allocated, no additional tax credits
29 shall be allocated.
30 (9) RULES.--The Department of Revenue may adopt rules
31 pursuant to ss. 120.536(1) and 120.54 to administer the
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1 provisions of this section, including rules governing the
2 manner and form of documentation required to claim tax credits
3 granted or transferred under this section, and may establish
4 guidelines as to the requirements for an affirmative showing
5 of qualification for tax credits granted or transferred under
6 this section.
7 Section 5. Section 288.1254, Florida Statutes, is
8 amended to read:
9 288.1254 Entertainment industry financial incentive
10 program; creation; purpose; definitions; application
11 procedure; approval process; reimbursement eligibility;
12 submission of required documentation; recommendations for
13 credit award payment; policies and procedures; fraudulent
14 claims.--
15 (1) CREATION AND PURPOSE OF PROGRAM.--Subject to
16 specific appropriation, There is created within the Office of
17 Film and Entertainment an entertainment industry financial
18 incentive program. The purpose of this program is to encourage
19 the use of this state as a site for filming and developing and
20 sustaining the workforce and infrastructure providing
21 production services for filmed entertainment.
22 (2) DEFINITIONS.--As used in this section, the term:
23 (a) "Filmed entertainment" means a theatrical or
24 direct-to-video motion picture, a made-for-television motion
25 picture teleproduction, a commercial, a music video, an
26 industrial or educational film, a promotional video or film, a
27 documentary film, a television pilot, a television special, a
28 presentation for a television pilot, a television series,
29 including, but not limited to, a drama, a reality, a comedy, a
30 soap opera, a telenovela, a game show, and a miniseries
31 production, or a digital-media-effects production by the
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1 entertainment industry to be sold or displayed in an
2 electronic medium, excluding news shows and sporting events.
3 As used in this paragraph, the term "motion picture" means a
4 motion picture made on or by film, tape, or otherwise and
5 produced by means of a motion picture camera, electronic
6 camera or device, tape device, any combination of the
7 foregoing, or any other means, method, or device now used or
8 which may hereafter be adopted. As used in this paragraph, the
9 term "digital-media-effects" means visual elements created
10 through the modification of already existing or newly created
11 visual elements for film, video, or animated media through the
12 use of digital 2D/3D animation or painting, motion capture, or
13 compositing technologies. For purposes of this section, the
14 term "filmed entertainment" does not include the electronic
15 gaming industry or sporting events.
16 (b) "High-impact television series" means a production
17 created to run multiple production seasons with an estimated
18 order of at least seven episodes per season and qualified
19 expenditures of at least $625,000 per episode.
20 (c)(b) "Production costs" means the costs of real,
21 tangible, and intangible property used and services performed
22 primarily or customarily in the production, including
23 preproduction and postproduction, of qualified filmed
24 entertainment. Production costs generally include, but are not
25 limited to:
26 1. Wages, salaries, or other compensation, including
27 amounts paid through payroll service companies, for technical
28 and production crews, directors, producers, and performers who
29 are residents of this state.
30 2. Expenditures for sound stages, backlots, production
31 editing, digital effects, sound recordings, sets, and set
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1 construction.
2 3. Expenditures for rental equipment, including, but
3 not limited to, cameras and grip or electrical equipment.
4 4. Expenditures for meals, travel, and accommodations,
5 and goods used in producing filmed entertainment that is
6 located and doing business in this state.
7 5. Expenditures for goods and services used in
8 producing filmed entertainment.
9 (d)(c) "Qualified expenditures" means production costs
10 incurred in this state within the current state fiscal year
11 for goods purchased or leased from or services provided by
12 purchased, leased, or employed from a resident of this state
13 or a vendor or supplier who is located and doing business in
14 this state or payments to residents of this state in the form
15 of salary, wages, or other compensation, but excluding wages,
16 salaries, or other compensation paid to the two highest-paid
17 residents of this state participating in the qualified
18 production employees.
19 (e)(d) "Qualified production" means filmed
20 entertainment that meets or exceeds minimum qualified makes
21 expenditures required in this state for the total or partial
22 production of filmed entertainment. Productions that are
23 deemed by the Office of Film and Entertainment to contain
24 obscene content, as defined by the United States Supreme
25 Court, are not qualified productions. Also, a production is
26 not a qualified production if it is determined that the first
27 day of principal photography in this state occurred on or
28 before the date of submitting its application to the Office of
29 Film and Entertainment or prior to certification by the Office
30 of Tourism, Trade, and Economic Development.
31 (f)(e) "Qualified production company relocation
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1 project" means a corporation, limited liability company,
2 partnership, corporate headquarters, or other legal private
3 entity engaged in the production of filmed entertainment that
4 is domiciled in another state or country and relocates its
5 operations to this state, is organized under the laws of this
6 or any other state or country, and includes as one of its
7 primary purposes digital-media-effects or motion picture and
8 television production, or postproduction.
9 (3) APPLICATION PROCEDURE; APPROVAL PROCESS.--
10 (a) Any company engaged in this state in producing
11 filmed entertainment may submit an application to the Office
12 of Film and Entertainment for the purpose of determining
13 qualification for an award of credits against the taxes by the
14 sales tax paid on qualified expenditures as defined in s.
15 288.1254 and the corporate income tax imposed by chapter 220
16 receipt of reimbursement provided in this section. The office
17 must be provided information required to determine if the
18 production is a qualified production and to determine the
19 qualified expenditures, production costs, and other
20 information necessary for the office to determine both
21 eligibility for the tax credit and level of reimbursement.
22 (b) A digital-media-effects company in the state which
23 furnishes digital material to filmed entertainment may submit
24 an application to the Office of Film and Entertainment for the
25 purpose of determining qualification for receipt of
26 reimbursement authorized by this section. The office must be
27 provided information required to determine if the company is
28 qualified and to determine the amount of reimbursement.
29 (c) Any corporation, limited liability company,
30 partnership, corporate headquarters, or other private entity
31 domiciled in another state which includes as one of its
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1 primary purposes digital-media-effects or motion picture and
2 television production and which is considering relocation to
3 this state may submit an application to the Office of Film and
4 Entertainment for the purpose of determining qualification for
5 reimbursement under this section.
6 (d)1. The Office of Film and Entertainment shall
7 establish a process by which an application is accepted and
8 reviewed and reimbursement eligibility and reimbursement
9 amount are determined. The Office of Film and Entertainment
10 may request assistance from a duly appointed local film
11 commission in determining qualifications for reimbursement and
12 compliance.
13 1.2. The Office of Film and Entertainment shall
14 develop a standardized application form for use in qualifying
15 an applicant as approving a qualified production, a qualified
16 relocation project, or a company qualifying under paragraph
17 (a), paragraph (b), or paragraph (c). The application form for
18 qualifying an applicant as a qualified production must
19 include, but need not be limited to, production-related
20 information on employment, proposed total production budgets,
21 planned expenditures in this state which are intended for use
22 exclusively as an integral part of preproduction, production,
23 or postproduction activities engaged primarily in this state,
24 and a signed affirmation from the applicant Office of Film and
25 Entertainment that the information on the application form has
26 been verified and is correct. The application form shall be
27 distributed to applicants by the Office of Film and
28 Entertainment or local film commissions.
29 2.3. Within 10 business days after receipt of an
30 application, the Office of Film and Entertainment shall review
31 the application to determine if the application contains all
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1 the information required by this subsection and meets the
2 criteria set out in this section. The office shall qualify all
3 applications that contain the information and meet the
4 criteria set out in this section as eligible to receive a tax
5 credit or shall notify the applicant that the requirements for
6 qualification have not been met. If the application is
7 qualified, the office shall recommend to the Office of
8 Tourism, Trade, and Economic Development approval of the
9 maximum amount of the tax credit to be awarded. The Office of
10 Film and Entertainment must complete its review of each
11 application within 5 days after receipt of the completed
12 application, including all required information, and it must
13 notify the applicant of its determination within 10 business
14 days after receipt of the completed application and required
15 information.
16 3.4. Within 10 business days after receiving notice
17 from the Office of Film and Entertainment of qualification of
18 an applicant as a qualified production and a recommended
19 approval of the maximum amount of tax credit to be awarded,
20 the Office of Tourism, Trade, and Economic Development shall
21 certify the maximum tax credit award, if any. The
22 certification shall be transmitted to the applicant and to the
23 executive director of the Department of Revenue. The applicant
24 shall be responsible for forwarding a certified application to
25 the Department of Revenue. Upon determination that all
26 criteria are met for qualification for reimbursement, the
27 Office of Film and Entertainment shall notify the applicant of
28 such approval. The office shall also notify the Office of
29 Tourism, Trade, and Economic Development of the applicant
30 approval and amount of reimbursement required. The Office of
31 Tourism, Trade, and Economic Development shall make final
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1 determination for actual reimbursement.
2 4.5. The Office of Film and Entertainment shall deny
3 an application if the office it determines that:
4 a. The application is not complete or does not meet
5 the requirements of this section; or
6 b. The tax credit amount reimbursement sought does not
7 meet the requirements of this section for such reimbursement.
8 (4) CREDIT REIMBURSEMENT ELIGIBILITY; SUBMISSION OF
9 REQUIRED DOCUMENTATION; APPLICATION RECOMMENDATIONS FOR
10 TRANSFER PAYMENT.--
11 (a) Tax credit award.--A production of filmed
12 entertainment that is qualified by the Office of Film and
13 Entertainment and is certified by the Office of Tourism,
14 Trade, and Economic Development is eligible for corporate tax
15 credits granted pursuant to s. 220.192 and credits against
16 sales tax paid on qualified expenditures pursuant to s.
17 212.08(5)(r) in an amount equal a reimbursement of up to 15
18 percent of its qualified qualifying expenditures.
19 (b) Production spanning 2 state fiscal years.--A
20 qualified production that starts in one state fiscal year and
21 finishes in the next state fiscal year shall have all
22 qualified expenditures from both state fiscal years certified
23 for the latter state fiscal year. This requirement does not
24 apply to the commercials and music video queue described in
25 subparagraph (d)3.
26 (c) Aggregate tax credit available.--The aggregate
27 amount of tax credits allowed under this section in any state
28 fiscal year is $25 million. If the total amount of allocated
29 tax credits applied for in any state fiscal year exceeds the
30 aggregate amount of tax credits authorized annually under this
31 section, such excess shall be treated as having been applied
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1 for on the first day of the next state fiscal year in which
2 tax credits remain available for allocation. However, no more
3 than an aggregate amount of $30 million in tax credits granted
4 pursuant to this section and ss. 212.08(5)(r) and 220.192
5 shall be allocated between July 1, 2006, and June 30, 2007.
6 The cumulative amount of credits which may be allocated
7 between July 1, 2006, and June 30, 2009, may not exceed $75
8 million. At such time as $75 million of tax credits granted
9 pursuant to this section and ss. 212.08(5)(r) and 220.192 have
10 been allocated, no additional tax credits may be allocated in
11 this state on a filmed entertainment program that demonstrates
12 a minimum of $850,000 in total qualified expenditures for the
13 entire run of the project, versus the budget on a single
14 episode, within the fiscal year from July 1 to June 30.
15 However, the maximum reimbursement that may be made with
16 respect to any filmed entertainment program is $2 million. All
17 reimbursements under this section are subject to
18 appropriation.
19 (d) Filmed entertainment queues.--Tax credits awarded
20 Payments under this section in a state fiscal year shall be
21 made to qualified productions according to a production's
22 principal photography start date, for those qualified
23 productions having entered into the first queue as cited in
24 subparagraph 1. or the second queue cited in subparagraph 2.
25 within the first 2 weeks after the queue's opening. All other
26 qualified productions entering into either queue after the
27 initial 2-week openings shall be on a first-come, first-served
28 basis until the appropriation for that fiscal year is
29 exhausted. On February 1 of each year, the remaining funds
30 within both queues shall be combined into a single queue and
31 distributed based on a project's principal photography start
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1 date. The eligibility of qualified productions may not carry
2 over from year to year, but such productions may reapply for
3 eligibility under the guidelines established for doing so. The
4 Office of Film and Entertainment shall develop a procedure to
5 ensure that qualified productions continue on a reasonable
6 schedule until completion. If a qualified production is not
7 continued according to a reasonable schedule, the office shall
8 withdraw its eligibility and reallocate the funds to the next
9 qualified productions already in the queue that have yet to
10 receive their full maximum or 15-percent financial
11 reimbursement, if they have not started principal photography
12 by the time the funds become available.
13 1. Film, television, and episodic queue.--Theatrical
14 or direct-to-video motion pictures, made-for-television
15 movies, commercials, music videos, industrial and educational
16 films, promotional videos or films, documentary films,
17 television specials, television series, including, but not
18 limited to, miniseries and telenovelas, and
19 digital-media-effects productions by the entertainment
20 industry to be sold or displayed in an electronic medium which
21 demonstrate a minimum of $625,000 in total qualified
22 expenditures for the entire run of the project, which, for a
23 television series, means a season even if the season is not
24 completed in the same state fiscal year in which principal
25 photography began, shall have their own separate queue
26 established, and such queue shall have dedicated to it 60
27 percent of all available tax credits in any state fiscal year
28 for which this section applies. The maximum tax credit award
29 that may be made from this queue for any single production is
30 $2 million unless the production is a high-impact television
31 series, in which case the production shall be eligible for a
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1 maximum tax credit award of $3 million, provided such
2 production meets the other criteria of this section. On March
3 1 of each year, the remaining tax credits within this queue
4 shall be merged into a general queue and may be used for other
5 purposes of this section as determined by the Office of Film
6 and Entertainment. A television series, including, but not
7 limited to, a qualified high-impact television series, is not
8 eligible for a tax credit award under this section after its
9 fifth production season in this state. A qualified high-impact
10 television series shall be allowed first position in this
11 queue for its first five production seasons in this state if
12 the application is received by the Office of Film and
13 Entertainment within the first 2 weeks after the queue's
14 opening. A qualified high-impact television series must file
15 an application for each state fiscal year in which it is
16 eligible to receive the credit, unless otherwise provided in
17 this section of the state incentive money.
18 2. Television pilot queue.--Television pilots and,
19 presentations for television pilots for television series
20 intended to be shot in this state and, or television series,
21 including, but not limited to, drama, reality, comedy, soap
22 opera, telenovela, game show, or miniseries productions, by
23 the entertainment industry to be sold or displayed in an
24 electronic medium which demonstrate a minimum of $625,000 in
25 total qualified expenditures for the pilot episode or
26 presentation shall have their own separate queue established,
27 and such queue shall have dedicated to it 20 40 percent of all
28 available tax credits in any given state fiscal year for which
29 this section applies. The maximum tax credit award that may be
30 made from this queue for any single pilot episode or
31 presentation is $2 million. On March 1 of each year, the
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1 remaining tax credits within this queue shall be merged into a
2 general queue and may be used for other purposes of this
3 section as determined by the Office of Film and Entertainment.
4 3. Commercials and music video queue.--Commercials and
5 music videos by the entertainment industry to be sold or
6 displayed in an electronic medium which demonstrate a minimum
7 of $500,000 in combined total qualified expenditures from a
8 production company during the state fiscal year with a minimum
9 of $75,000 in qualified expenditures for each production shall
10 have their own separate queue established. Such queue shall
11 have dedicated to it 20 percent of available tax credits in
12 any given state fiscal year for which this section applies.
13 The maximum tax credit award that may be made from this queue
14 for any single production company is $500,000 for a state
15 fiscal year. On April 1 of each year, the remaining tax
16 credits within this queue shall be merged into a general queue
17 and may be used for other purposes of this section as
18 determined by the Office of Film and Entertainment.
19 (e) Loss of eligibility; reallocation of tax
20 credits.--If a qualified production is not continued according
21 to a reasonable schedule or the Office of Film and
22 Entertainment is notified that a qualified production will no
23 longer be produced, the office shall withdraw the production's
24 eligibility for tax credits and reallocate the tax credits to
25 the next qualified productions already in the queue that have
26 yet to receive a full tax credit if such next qualified
27 productions have not started principal photography by the time
28 the tax credits become available.
29 (f) Verification of tax credit award.--The Office of
30 Film and Entertainment shall develop a process by which a
31 qualified production that has been certified by the Office of
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1 Tourism, Trade, and Economic Development shall submit to the
2 Office of Film and Entertainment, in a timely manner after
3 production ends and after making all of its qualified
4 expenditures, verifying data to substantiate each qualified
5 expenditure. The Office of Film and Entertainment shall report
6 to the Office of Tourism, Trade, and Economic Development the
7 final verified amount of actual qualified expenditures made by
8 the qualified production. The Office of Tourism, Trade, and
9 Economic Development shall then notify the executive director
10 of the Department of Revenue that the qualified production has
11 met all requirements of the incentive program and shall
12 recommend the final amount of the tax credit of the state
13 incentive money.
14 (b) A digital-media-effects company in the state which
15 furnishes digital material to filmed entertainment may be
16 eligible for a payment in an amount not to exceed 5 percent of
17 its annual gross revenues on qualified expenditures as defined
18 in paragraph (2)(c) before taxes or $100,000, whichever is
19 less. A company applying for payment must submit documentation
20 annually as required by the Office of Film and Entertainment
21 for determination of eligibility of claimed billing and
22 determination of the amount of payment for which the company
23 is eligible.
24 (g)(c) Transfer of tax credits.--Upon application and
25 approval by the Department of Revenue, a qualified production
26 company may sell, in whole or in part, a tax credit granted
27 pursuant to this section and s. 220.192. The sale of any
28 amount of the tax credit shall not be exchanged for
29 consideration received by the qualified production company of
30 less than 85 percent of the transferred amount of tax credit.
31 The qualified production company must transfer at least 10
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1 percent of the remaining credits to each purchaser and may not
2 conduct more than three transfers. The purchaser shall
3 surrender the tax credit in the state fiscal year acquired
4 from the qualified production company and otherwise may carry
5 the tax credit over subject to the same limitations on tax
6 credit usage as the qualified production company awarded the
7 tax credit. The purchaser may not sell or otherwise transfer
8 the tax credit. The Department of Revenue may adopt rules
9 pursuant to ss. 120.536(1) and 120.54 to administer this
10 paragraph, as provided in paragraph (6)(b). A qualified
11 relocation project that is certified by the Office of Film and
12 Entertainment is eligible for a one-time incentive payment in
13 an amount equal to 5 percent of its annual gross revenues
14 before taxes for the first 12 months of conducting business in
15 its Florida domicile or $200,000, whichever is less. A company
16 applying for payment must submit documentation as required by
17 the Office of Film and Entertainment for determination of
18 eligibility of claimed billing and determination of the amount
19 of payment for which the company is eligible.
20 (h)(d) Noncorporate distribution of tax credits.--A
21 qualified production company that is not a corporation as
22 defined in s. 220.03 shall elect to make an application to the
23 Department of Revenue as provided in paragraph (g) or
24 distribute tax credits awarded under this section to its
25 partners or members in proportion to the respective
26 distributive share of such partners' or members' income or
27 loss in the state fiscal year in which such tax credits were
28 approved. A tax credit granted under this section and applied
29 against taxes imposed under this chapter shall be carried
30 forward only for a maximum of 5 taxable years following the
31 state fiscal year in which the credit was approved. The
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1 Department of Revenue may adopt rules pursuant to ss.
2 120.536(1) and 120.54 to administer this paragraph, as
3 provided in paragraph (6)(b), a digital-media-effects company,
4 or a qualified relocation project applying for a payment under
5 this section must submit documentation for claimed qualified
6 expenditures to the Office of Film and Entertainment.
7 (i)(e) Use of tax credits.--A qualified production
8 company may use the tax credit against the tax liability
9 imposed under s. 220.192, in whole or in part, or against the
10 sales tax paid under chapter 212 in whole or in part The
11 Office of Film and Entertainment shall notify the Office of
12 Tourism, Trade, and Economic Development whether an applicant
13 meets the criteria for reimbursement and shall recommend the
14 reimbursement amount. The Office of Tourism, Trade, and
15 Economic Development shall make the final determination for
16 actual reimbursement.
17 (5) MARKETING REQUIREMENTS.--The Office of Film and
18 Entertainment shall ensure that appropriate marketing
19 materials, including, but not limited to, promotions of this
20 state as a tourist or filming destination, are required, when
21 appropriate, to be included on any filmed entertainment as a
22 condition of receiving a tax credit under this section. The
23 Office of Film and Entertainment shall consult with
24 appropriate entities for the development and implementation of
25 marketing materials.
26 (6)(5) RULES POLICIES AND PROCEDURES.--
27 (a) The Office of Tourism, Trade, and Economic
28 Development shall adopt rules pursuant to ss. 120.536(1) and
29 120.54 policies and procedures to implement this section,
30 including, but not limited to, rules specifying requirements
31 for the application and approval process, records required for
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1 submission for substantiation of credit awards for
2 reimbursement, and determination of and qualification for
3 credit awards, and marketing requirements for credit
4 recipients reimbursement.
5 (b) The Department of Revenue may adopt rules pursuant
6 to ss. 120.536(1) and 120.54 to administer the provisions of
7 this section, including rules governing the manner and form of
8 documentation required to claim tax credits granted or
9 transferred under this section, and may establish guidelines
10 as to the requisites for an affirmative showing of
11 qualification for tax credits granted or transferred under
12 this section.
13 (7)(6) FRAUDULENT CLAIMS.--
14 (a) Any applicant who submits an application under
15 this section which includes fraudulent information is liable
16 for reimbursement of the reasonable costs and fees associated
17 with the review, processing, investigation, and prosecution.
18 (b) An eligible entity or company that obtains a
19 credit payment under this section through a claim that it
20 knows is fraudulent is liable for reimbursement of the credit
21 amount paid plus a penalty in an amount double the credit
22 payment and reimbursement of reasonable costs, which penalty
23 is in addition to any criminal penalty to which the entity or
24 company is liable for the same acts, plus interest. The entity
25 or company is also liable for costs and fees incurred by the
26 state in investigating and prosecuting the fraudulent claim.
27 (8)(7) ANNUAL REPORT.--The Office of Film and
28 Entertainment shall provide an annual report for the previous
29 state fiscal year, due October 1, to the Governor, the
30 President of the Senate, and the Speaker of the House of
31 Representatives outlining the return on investment to the
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1 state on tax credits awarded funds expended pursuant to this
2 section.
3 (9) REPEAL.--This section is repealed July 1, 2009.
4 Section 6. This act shall take effect July 1, 2006.
5
6
7 ================ T I T L E A M E N D M E N T ===============
8 And the title is amended as follows:
9 Delete everything before the enacting clause
10
11 and insert:
12 A bill to be entitled
13 An act relating to entertainment industry
14 economic development; amending s. 212.08, F.S.;
15 providing for an entertainment industry credit
16 of sales and use taxes paid on qualified
17 expenditures; providing criteria, requirements,
18 procedures, and limitations on the credit;
19 providing for uses of the credit; providing
20 duties and responsibilities of the Office of
21 Film and Entertainment and the Department of
22 Revenue; authorizing the Office of Tourism,
23 Trade, and Economic Development to adopt rules;
24 providing for liability for fraudulent credit
25 applications; amending s. 213.053, F.S.;
26 authorizing the Department of Revenue to
27 provide certain tax credit and tax refund
28 information to the Office of Film and
29 Entertainment and the Office of Tourism, Trade,
30 and Economic Development; amending s. 220.02,
31 F.S.; revising the order of priority list of
26
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1 applicable credits against certain taxes;
2 creating s. 220.192, F.S.; providing for an
3 entertainment industry corporate income tax
4 credit of a percentage of certain qualified
5 expenditures; providing criteria, requirements,
6 procedures, and limitations on the credit;
7 providing for uses and allocations of the
8 credit; authorizing the Office of Tourism,
9 Trade, and Economic Development to adopt rules;
10 providing for liability for fraudulent credit
11 applications; providing for use and
12 carryforward of the credit; providing for
13 transfers of the credit; providing for
14 noncorporate distributions of tax credits;
15 authorizing the Department of Revenue to adopt
16 rules; amending s. 288.1254, F.S.; revising the
17 entertainment industry financial incentive
18 program to provide corporate income tax and
19 sales and use tax credits to qualified
20 entertainment entities rather than
21 reimbursements from appropriations; revising
22 provisions relating to definitions, creation
23 and scope, application procedures, approval
24 process, eligibility, required documents,
25 qualified productions, and annual reports;
26 providing criteria and limitations for awards
27 of tax credits; providing marketing
28 requirements; requiring the Office of Tourism,
29 Trade, and Economic Development and the
30 Department of Revenue to adopt rules; providing
31 liability for reimbursement of certain costs
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1 and fees associated with fraudulent
2 applications; providing for future repeal;
3 providing an effective date.
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