HB 449

1	A bill to be entitled
2	An act relating to economic development; amending s.
3	212.08, F.S.; conforming provisions to the revision
4	creating designated urban job tax credit areas; amending
5	s. 212.097, F.S.; revising provisions providing for an
6	urban job tax credit program to apply to designated urban
7	job tax credit areas rather than high-crime areas;
8	revising and providing definitions, eligibility criteria,
9	application procedures and requirements, and area
10	characteristics and criteria; amending ss. 220.1895 and
11	288.99, F.S.; conforming provisions to the revision
12	creating designated urban job tax credit areas; providing
13	an effective date.
14
15	Be It Enacted by the Legislature of the State of Florida:
16
17	Section 1.  Paragraph (o) of subsection (5) of section
18	212.08, Florida Statutes, is amended to read:
19	212.08  Sales, rental, use, consumption, distribution, and
20	storage tax; specified exemptions.--The sale at retail, the
21	rental, the use, the consumption, the distribution, and the
22	storage to be used or consumed in this state of the following
23	are hereby specifically exempt from the tax imposed by this
24	chapter.
25	(5)  EXEMPTIONS; ACCOUNT OF USE.--
26	(o)  Building materials in redevelopment projects.--
27	1.  As used in this paragraph, the term:
28	a.  "Building materials" means tangible personal property
29	that becomes a component part of a housing project or a mixed-
30	use project.
31	b.  "Housing project" means the conversion of an existing
32	manufacturing or industrial building to housing units in a
33	designated an urban job tax credit high-crime area, enterprise
34	zone, empowerment zone, Front Porch Community, designated
35	brownfield area, or urban infill area and in which the developer
36	agrees to set aside at least 20 percent of the housing units in
37	the project for low-income and moderate-income persons or the
38	construction in a designated brownfield area of affordable
39	housing for persons described in s. 420.0004(9), (10), or (14),
40	or in s. 159.603(7).
41	c.  "Mixed-use project" means the conversion of an existing
42	manufacturing or industrial building to mixed-use units that
43	include artists' studios, art and entertainment services, or
44	other compatible uses. A mixed-use project must be located in a
45	designated an urban job tax credit high-crime area, enterprise
46	zone, empowerment zone, Front Porch Community, designated
47	brownfield area, or urban infill area, and the developer must
48	agree to set aside at least 20 percent of the square footage of
49	the project for low-income and moderate-income housing.
50	d.  "Substantially completed" has the same meaning as
51	provided in s. 192.042(1).
52	2.  Building materials used in the construction of a
53	housing project or mixed-use project are exempt from the tax
54	imposed by this chapter upon an affirmative showing to the
55	satisfaction of the department that the requirements of this
56	paragraph have been met. This exemption inures to the owner
57	through a refund of previously paid taxes. To receive this
58	refund, the owner must file an application under oath with the
59	department which includes:
60	a.  The name and address of the owner.
61	b.  The address and assessment roll parcel number of the
62	project for which a refund is sought.
63	c.  A copy of the building permit issued for the project.
64	d.  A certification by the local building code inspector
65	that the project is substantially completed.
66	e.  A sworn statement, under penalty of perjury, from the
67	general contractor licensed in this state with whom the owner
68	contracted to construct the project, which statement lists the
69	building materials used in the construction of the project and
70	the actual cost thereof, and the amount of sales tax paid on
71	these materials. If a general contractor was not used, the owner
72	shall provide this information in a sworn statement, under
73	penalty of perjury. Copies of invoices evidencing payment of
74	sales tax must be attached to the sworn statement.
75	3.  An application for a refund under this paragraph must
76	be submitted to the department within 6 months after the date
77	the project is deemed to be substantially completed by the local
78	building code inspector. Within 30 working days after receipt of
79	the application, the department shall determine if it meets the
80	requirements of this paragraph. A refund approved pursuant to
81	this paragraph shall be made within 30 days after formal
82	approval of the application by the department. The provisions of
83	s. 212.095 do not apply to any refund application made under
84	this paragraph.
85	4.  The department shall establish by rule an application
86	form and criteria for establishing eligibility for exemption
87	under this paragraph.
88	5.  The exemption shall apply to purchases of materials on
89	or after July 1, 2000.
90	Section 2.  Section 212.097, Florida Statutes, is amended
91	to read:
92	212.097  Designated Urban High-Crime Area Job Tax Credit
93	Area Program.--
94	(1)  As used in this section, the term:
95	(a)  "Eligible business" means any sole proprietorship,
96	firm, partnership, or corporation that is located in a
97	designated urban job tax credit area qualified county and is
98	predominantly engaged in, or is headquarters for a business
99	predominantly engaged in, activities usually provided for
100	consideration by firms classified within the following standard
101	industrial classifications: SIC 01-SIC 09 (agriculture,
102	forestry, and fishing); SIC 20-SIC 39 (manufacturing); SIC 52-
103	SIC 57 and SIC 59 (retail); SIC 422 (public warehousing and
104	storage); SIC 70 (hotels and other lodging places); SIC 7391
105	(research and development); SIC 781 (motion picture production
106	and allied services); SIC 7992 (public golf courses); and SIC
107	7996 (amusement parks); and a targeted industry eligible for the
108	qualified target industry business tax refund under s. 288.106.
109	A call center or similar customer service operation that
110	services a multistate market or international market is also an
111	eligible business. In addition, the Office of Tourism, Trade,
112	and Economic Development may, as part of its final budget
113	request submitted pursuant to s. 216.023, recommend additions to
114	or deletions from the list of standard industrial
115	classifications used to determine an eligible business, and the
116	Legislature may implement such recommendations. Excluded from
117	eligible receipts are receipts from retail sales, except such
118	receipts for SIC 52-SIC 57 and SIC 59 (retail) hotels and other
119	lodging places classified in SIC 70, public golf courses in SIC
120	7992, and amusement parks in SIC 7996. For purposes of this
121	paragraph, the term "predominantly" means that more than 50
122	percent of the business's gross receipts from all sources is
123	generated by those activities usually provided for consideration
124	by firms in the specified standard industrial classification.
125	The determination of whether the business is located in a
126	designated urban job tax credit qualified high-crime area and
127	the tier ranking of that area must be based on the date of
128	application for the credit under this section. Commonly owned
129	and controlled entities are to be considered a single business
130	entity.
131	(b)  "Qualified employee" means any employee of an eligible
132	business who performs duties in connection with the operations
133	of the business on a regular, full-time basis for an average of
134	at least 36 hours per week for at least 3 months within the
135	designated urban job tax credit qualified high-crime area in
136	which the eligible business is located. An owner or partner of
137	the eligible business is not a qualified employee. The term also
138	includes an employee leased from an employee leasing company
139	licensed under chapter 468, if such employee has been
140	continuously leased to the employer for an average of at least
141	36 hours per week for more than 6 months.
142	(c)  "New business" means any eligible business first
143	beginning operation on a site in a designated urban job tax
144	credit qualified high-crime area and clearly separate from any
145	other commercial or business operation of the business entity
146	within a designated urban job tax credit qualified high-crime
147	area. A business entity that operated an eligible business
148	within a designated urban job tax credit qualified high-crime
149	area within the 48 months before the period provided for
150	application by subsection (2) is not considered a new business.
151	(d)  "Existing business" means any eligible business that
152	does not meet the criteria for a new business.
153	(e)  "Designated urban job tax credit Qualified high-crime
154	area" means an area selected by the Office of Tourism, Trade,
155	and Economic Development in the following manner: every fifth
156	third year, the office shall designate rank and tier those areas
157	nominated under subsection (7), according to the highest level
158	of distress experienced in the categories enumerated under
159	subsection (7). The Office of Tourism, Trade, and Economic
160	Development shall designate the 30 highest-distress-profile
161	urban areas as eligible participants under the Designated Urban
162	Job Tax Credit Area Program. following prioritized criteria:
163	1.  Highest arrest rates within the geographic area for
164	violent crime and for such other crimes as drug sale, drug
165	possession, prostitution, vandalism, and civil disturbances;
166	2.  Highest reported crime volume and rate of specific
167	property crimes such as business and residential burglary, motor
168	vehicle theft, and vandalism;
169	3.  Highest percentage of reported index crimes that are
170	violent in nature;
171	4.  Highest overall index crime volume for the area; and
172	5.  Highest overall index crime rate for the geographic
173	area.
174
175	Tier-one areas are ranked 1 through 5 and represent the highest
176	crime areas according to this ranking. Tier-two areas are ranked
177	6 through 10 according to this ranking. Tier-three areas are
178	ranked 11 through 15. Notwithstanding this definition,
179	"designated urban job tax credit qualified high-crime area" also
180	means an area that has been designated as a federal Empowerment
181	Zone pursuant to the Taxpayer Relief Act of 1997 or the
182	Community Tax Relief Act of 2000. An area designated under this
183	section as of June 30, 2006, shall retain the designation
184	through June 30, 2013. A business qualified in such a designated
185	area under this section, as this section was in effect on or
186	before June 30, 2006, and eligible for the applicable tax credit
187	as of June 30, 2006, shall retain the same qualification and tax
188	credit amounts through June 30, 2013, that were available to the
189	business on June 30, 2006, if the business complies with the
190	job-creation requirements. Any area designated pursuant to this
191	section shall retain the designation for a period not to exceed
192	7 years after the effective date of designation. Thereafter, any
193	such area or any other area eligible for designation may seek
194	approval from the office for designation.
195	(f)  "Urban" means a densely populated nonrural area
196	located within an urban county that consists of a cluster of one
197	or more census blocks, each of which has a population density of
198	at least 400 people per square mile, or an area defined as an
199	urbanized area by the most recent United States Census.
200	(g)  "Urban infill and redevelopment area" means an area or
201	areas designated by a local government where:
202	1.  Public services such as water and wastewater,
203	transportation, schools, and recreation are already available or
204	are scheduled to be provided in an adopted 5-year schedule of
205	capital improvements;
206	2.  The area, or one or more neighborhoods within the area,
207	suffers from pervasive poverty, unemployment, and general
208	distress as defined by s. 290.0058;
209	3.  The area exhibits a proportion of properties that are
210	substandard, overcrowded, dilapidated, vacant or abandoned, or
211	functionally obsolete which is higher than the average for the
212	local government;
213	4.  More than 50 percent of the area is within 1/4 mile of
214	a transit stop, or a sufficient number of such transit stops
215	will be made available concurrent with the designation; and
216	5.  The area includes or is adjacent to community
217	redevelopment areas, brownfields, enterprise zones, or Main
218	Street programs, or has been designated by the state or Federal
219	Government as an urban redevelopment, revitalization, or infill
220	area under empowerment zone, enterprise community, or brownfield
221	showcase community programs or similar programs. Such a
222	designated area is ranked in tier three until the areas are
223	reevaluated by the Office of Tourism, Trade, and Economic
224	Development.
225	(2)  A new eligible business may apply for a tax credit
226	under this subsection once at any time during its first year of
227	operation. A new eligible business in a designated urban job tax
228	credit tier-one qualified high-crime area which has at least 10
229	qualified employees on the date of application shall receive a
230	$1,500 tax credit for each such employee. A new eligible
231	business in a tier-two qualified high-crime area which has at
232	least 20 qualified employees on the date of application shall
233	receive a $1,000 tax credit for each such employee. A new
234	eligible business in a tier-three qualified high-crime area
235	which has at least 30 qualified employees on the date of
236	application shall receive a $500 tax credit for each such
237	employee.
238	(3)  An existing eligible business may apply for a tax
239	credit under this subsection at any time it is entitled to such
240	credit, except as restricted by this subsection. An existing
241	eligible business in a designated urban job tax credit tier-one
242	qualified high-crime area which on the date of application has
243	at least 5 more qualified employees than it had 1 year prior to
244	its date of application shall receive a $1,500 tax credit for
245	each such additional employee. An existing eligible business in
246	a tier-two qualified high-crime area which on the date of
247	application has at least 10 more qualified employees than it had
248	1 year prior to its date of application shall receive a $1,000
249	credit for each such additional employee. An existing business
250	in a tier-three qualified high-crime area which on the date of
251	application has at least 15 more qualified employees than it had
252	1 year prior to its date of application shall receive a $500 tax
253	credit for each such additional employee. An existing eligible
254	business may apply for the credit under this subsection no more
255	than once in any 12-month period. Any existing eligible business
256	that received a credit under subsection (2) may not apply for
257	the credit under this subsection sooner than 12 months after the
258	application date for the credit under subsection (2).
259	(4)  For any new eligible business receiving a credit
260	pursuant to subsection (2), an additional $500 credit shall be
261	provided for any qualified employee who is a welfare transition
262	program participant. For any existing eligible business
263	receiving a credit pursuant to subsection (3), an additional
264	$500 credit shall be provided for any qualified employee who is
265	a welfare transition program participant. Such employee must be
266	employed on the application date and have been employed less
267	than 1 year. This credit shall be in addition to other credits
268	pursuant to this section regardless of the tier-level of the
269	high-crime area. Appropriate documentation concerning the
270	eligibility of an employee for this credit must be submitted as
271	determined by the department.
272	(5)  To be eligible for a tax credit under subsection (3),
273	the number of qualified employees employed 1 year prior to the
274	application date must be no lower than the number of qualified
275	employees on the application date on which a credit under this
276	section was based for any previous application, including an
277	application under subsection (2).
278	(6)  Any county or municipality, or a county and one or
279	more municipalities together, may apply to the Office of
280	Tourism, Trade, and Economic Development for the designation of
281	an area as a designated urban job tax credit high-crime area
282	after the adoption by the governing body or bodies of a
283	resolution that:
284	(a)  Finds that an urban a high-crime area exists in such
285	county or municipality, or in both the county and one or more
286	municipalities, which chronically exhibits extreme and
287	unacceptable levels of poverty, unemployment, physical
288	deterioration, and economic disinvestment.;
289	(b)  Determines that the rehabilitation, conservation, or
290	redevelopment, or a combination thereof, of such an urban a
291	high-crime area is necessary in the interest of the health,
292	safety, and welfare of the residents of such county or
293	municipality, or such county and one or more municipalities.;
294	and
295	(c)  Determines that the revitalization of such an urban a
296	high-crime area can occur if the public sector or private sector
297	can be induced to invest its own resources in productive
298	enterprises that build or rebuild the economic viability of the
299	area.
300	(7)  The governing body of the entity nominating the area
301	shall demonstrate provide to the Office of Tourism, Trade, and
302	Economic Development that the area following:
303	(a)1.  Has at least forty percent of its residents earning
304	wages on an annual basis which are equal to or less than the
305	annual wage of a person who is earning minimum wage; or
306	2.  Has more than 20 percent of its residents or families
307	living below the federal standard of poverty for individuals or
308	a family of four;
309	(b)  Has an unemployment rate at least 3 percentage points
310	higher than the state's unemployment rate;
311	(c)  Has an arrest rate higher than the state's average
312	rate for such crimes as drug sale, drug possession,
313	prostitution, vandalism, and civil disturbances, as recorded by
314	the total crime index of the Department of Law Enforcement; and
315	(d)1.  Has 50 percent or more of its residents who rent;
316	2.  Has property values that are within the lower 50
317	percent of the county's assessed property values;
318	3.  Has more than 5 percent of its commercial buildings
319	currently vacant or condemned within the previous 24 months; or
320	4.  With respect to at least 25 percent of tax or special
321	assessment delinquencies, the amount of the delinquency exceeds
322	the fair value of the land The overall index crime rate for the
323	geographic area;
324	(b)  The overall index crime volume for the area;
325	(c)  The percentage of reported index crimes that are
326	violent in nature;
327	(d)  The reported crime volume and rate of specific
328	property crimes such as business and residential burglary, motor
329	vehicle theft, and vandalism; and
330	(e)  The arrest rates within the geographic area for
331	violent crime and for such other crimes as drug sale, drug
332	possession, prostitution, disorderly conduct, vandalism, and
333	other public-order offenses.
334	(8)  A municipality, or a county and one or more
335	municipalities together, may not nominate more than one urban
336	high-crime area. However, any county as defined by s. 125.011(1)
337	may nominate no more than three urban high-crime areas.
338	(9)  An area nominated by a county or municipality, or a
339	county and one or more municipalities together, for designation
340	as a designated urban job tax credit high-crime area shall be
341	eligible only if it meets the following criteria:
342	(a)  The selected area does not exceed 20 square miles and
343	either has a continuous boundary or consists of not more than
344	three noncontiguous parcels;
345	(b)  The selected area does not exceed the following
346	mileage limitation:
347	1.  For areas communities having a total population of
348	150,000 persons or more, the selected area does not exceed 20
349	square miles and is within 10 miles of the urban infill and
350	redevelopment area of a city.
351	2.  For areas communities having a total population of
352	50,000 persons or more, but fewer than 150,000 persons, the
353	selected area does not exceed 10 square miles and is within 7.5
354	miles of the urban infill and redevelopment area of a city.
355	3.  For areas communities having a total population of
356	20,000 persons or more, but fewer than 50,000 persons, the
357	selected area does not exceed 5 square miles and is within 5
358	miles of the urban infill and redevelopment area of a city.
359	4.  For areas communities having a total population of
360	fewer than 20,000 persons, the selected area does not exceed 3
361	square miles and is within 3 miles of the urban infill and
362	redevelopment area of a city.
363	(10)(a)  In order to claim this credit, an eligible
364	business must file under oath with the Office of Tourism, Trade,
365	and Economic Development a statement that includes the name and
366	address of the eligible business and any other information that
367	is required to process the application.
368	(b)  Within 30 working days after receipt of an application
369	for credit, the Office of Tourism, Trade, and Economic
370	Development shall review the application to determine whether it
371	contains all the information required by this subsection and
372	meets the criteria set out in this section. Subject to the
373	provisions of paragraph (c), the Office of Tourism, Trade, and
374	Economic Development shall approve all applications that contain
375	the information required by this subsection and meet the
376	criteria set out in this section as eligible to receive a
377	credit.
378	(c)  The maximum credit amount that may be approved during
379	any calendar year is $5 million, of which $1 million shall be
380	exclusively reserved for tier-one areas. The Department of
381	Revenue, in conjunction with the Office of Tourism, Trade, and
382	Economic Development, shall notify the governing bodies in areas
383	designated under this section as urban high-crime areas when the
384	$5 million maximum amount has been reached. Applications must be
385	considered for approval in the order in which they are received
386	without regard to whether the credit is for a new or existing
387	business. This limitation applies to the value of the credit as
388	contained in approved applications. Approved credits may be
389	taken in the time and manner allowed pursuant to this section.
390	(11)  If the application is insufficient to support the
391	credit authorized in this section, the Office of Tourism, Trade,
392	and Economic Development shall deny the credit and notify the
393	business of that fact. The business may reapply for this credit
394	within 3 months after such notification.
395	(12)  If the credit under this section is greater than can
396	be taken on a single tax return, excess amounts may be taken as
397	credits on any tax return submitted within 12 months after the
398	approval of the application by the department.
399	(13)  It is the responsibility of each business to
400	affirmatively demonstrate to the satisfaction of the Department
401	of Revenue that it meets the requirements of this section.
402	(14)  Any person who fraudulently claims this credit is
403	liable for repayment of the credit plus a mandatory penalty of
404	100 percent of the credit and is guilty of a misdemeanor of the
405	second degree, punishable as provided in s. 775.082 or s.
406	775.083.
407	(15)  A corporation may take the credit under this section
408	against its corporate income tax liability, as provided in s.
409	220.1895. However, a corporation that applies its job tax credit
410	against the tax imposed by chapter 220 may not receive the
411	credit provided for in this section. A credit may be taken
412	against only one tax.
413	(16)  The department shall adopt rules governing the manner
414	and form of applications for credit and may establish guidelines
415	concerning the requisites for an affirmative showing of
416	qualification for the credit under this section.
417	Section 3.  Section 220.1895, Florida Statutes, is amended
418	to read:
419	220.1895  Rural Job Tax Credit and Designated Urban High-
420	Crime Area Job Tax Credit.--There shall be allowed a credit
421	against the tax imposed by this chapter amounts approved by the
422	Office of Tourism, Trade, and Economic Development pursuant to
423	the Rural Job Tax Credit Program in s. 212.098 and the
424	Designated Urban High-Crime Area Job Tax Credit Area Program in
425	s. 212.097. A corporation that uses its credit against the tax
426	imposed by this chapter may not take the credit against the tax
427	imposed by chapter 212. If any credit granted under this section
428	is not fully used in the first year for which it becomes
429	available, the unused amount may be carried forward for a period
430	not to exceed 5 years. The carryover may be used in a subsequent
431	year when the tax imposed by this chapter for such year exceeds
432	the credit for such year under this section after applying the
433	other credits and unused credit carryovers in the order provided
434	in s. 220.02(8).
435	Section 4.  Subsection (2) and paragraph (j) of subsection
436	(3) of section 288.99, Florida Statutes, are amended to read:
437	288.99  Certified Capital Company Act.--
438	(2)  PURPOSE.--The primary purpose of this act is to
439	stimulate a substantial increase in venture capital investments
440	in this state by providing an incentive for insurance companies
441	to invest in certified capital companies in this state which, in
442	turn, will make investments in new businesses or in expanding
443	businesses, including minority-owned or minority-operated
444	businesses and businesses located in a designated Front Porch
445	community, enterprise zone, designated urban job tax credit
446	high-crime area, rural job tax credit county, or nationally
447	recognized historic district. The increase in investment capital
448	flowing into new or expanding businesses is intended to
449	contribute to employment growth, create jobs which exceed the
450	average wage for the county in which the jobs are created, and
451	expand or diversify the economic base of this state.
452	(3)  DEFINITIONS.--As used in this section, the term:
453	(j)  "Qualified business" means the Digital Divide Trust
454	Fund established under the State of Florida Technology Office or
455	a business that meets the following conditions as evidenced by
456	documentation required by commission rule:
457	1.  The business is headquartered in this state and its
458	principal business operations are located in this state or at
459	least 75 percent of the employees are employed in the state.
460	2.  At the time a certified capital company makes an
461	initial investment in a business, the business would qualify for
462	investment under 13 C.F.R. s. 121.301(c), which is involved in
463	manufacturing, processing or assembling products, conducting
464	research and development, or providing services.
465	3.  At the time a certified capital company makes an
466	initial investment in a business, the business certifies in an
467	affidavit that:
468	a.  The business is unable to obtain conventional
469	financing, which means that the business has failed in an
470	attempt to obtain funding for a loan from a bank or other
471	commercial lender or that the business cannot reasonably be
472	expected to qualify for such financing under the standards of
473	commercial lending;
474	b.  The business plan for the business projects that the
475	business is reasonably expected to achieve in excess of $25
476	million in sales revenue within 5 years after the initial
477	investment, or the business is located in a designated Front
478	Porch community, enterprise zone, designated urban job tax
479	credit high crime area, rural job tax credit county, or
480	nationally recognized historic district;
481	c.  The business will maintain its headquarters in this
482	state for the next 10 years and any new manufacturing facility
483	financed by a qualified investment will remain in this state for
484	the next 10 years, or the business is located in a designated
485	Front Porch community, enterprise zone, designated urban job tax
486	credit high crime area, rural job tax credit county, or
487	nationally recognized historic district; and
488	d.  The business has fewer than 200 employees and at least
489	75 percent of the employees are employed in this state. For
490	purposes of this subsection, the term also includes the Florida
491	Black Business Investment Board, any entity majority owned by
492	the Florida Black Business Investment Board, or any entity in
493	which the Florida Black Business Investment Board holds a
494	majority voting interest on the board of directors.
495	4.  The term does not include:
496	a.  Any business predominantly engaged in retail sales,
497	real estate development, insurance, banking, lending, or oil and
498	gas exploration.
499	b.  Any business predominantly engaged in professional
500	services provided by accountants, lawyers, or physicians.
501	c.  Any company that has no historical revenues and either
502	has no specific business plan or purpose or has indicated that
503	its business plan is solely to engage in a merger or acquisition
504	with any unidentified company or other entity.
505	d.  Any company that has a strategic plan to grow through
506	the acquisition of firms with substantially similar business
507	which would result in the planned net loss of Florida-based jobs
508	over a 12-month period after the acquisition as determined by
509	the office.
510	Section 5.  This act shall take effect July 1, 2006.

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