HB 0449

CS

CHAMBER ACTION

1	The Economic Development, Trade & Banking Committee recommends
2	the following:
3
4	Council/Committee Substitute
5	Remove the entire bill and insert:
6	A bill to be entitled
7	An act relating to economic development; amending s.
8	212.08, F.S.; conforming provisions to the revision
9	creating designated urban job tax credit areas; amending
10	s. 212.097, F.S.; revising provisions providing for an
11	urban job tax credit program to apply to designated urban
12	job tax credit areas rather than high-crime areas;
13	revising and providing definitions, eligibility criteria,
14	application procedures and requirements, and area
15	characteristics and criteria; amending ss. 220.1895 and
16	288.99, F.S.; conforming provisions to the revision
17	creating designated urban job tax credit areas; providing
18	an effective date.
19
20	Be It Enacted by the Legislature of the State of Florida:
21
22	Section 1.  Paragraph (o) of subsection (5) of section
23	212.08, Florida Statutes, is amended to read:
24	212.08  Sales, rental, use, consumption, distribution, and
25	storage tax; specified exemptions.--The sale at retail, the
26	rental, the use, the consumption, the distribution, and the
27	storage to be used or consumed in this state of the following
28	are hereby specifically exempt from the tax imposed by this
29	chapter.
30	(5)  EXEMPTIONS; ACCOUNT OF USE.--
31	(o)  Building materials in redevelopment projects.--
32	1.  As used in this paragraph, the term:
33	a.  "Building materials" means tangible personal property
34	that becomes a component part of a housing project or a mixed-
35	use project.
36	b.  "Housing project" means the conversion of an existing
37	manufacturing or industrial building to housing units in a
38	designated an urban job tax credit high-crime area, enterprise
39	zone, empowerment zone, Front Porch Community, designated
40	brownfield area, or urban infill area and in which the developer
41	agrees to set aside at least 20 percent of the housing units in
42	the project for low-income and moderate-income persons or the
43	construction in a designated brownfield area of affordable
44	housing for persons described in s. 420.0004(9), (10), or (14),
45	or in s. 159.603(7).
46	c.  "Mixed-use project" means the conversion of an existing
47	manufacturing or industrial building to mixed-use units that
48	include artists' studios, art and entertainment services, or
49	other compatible uses. A mixed-use project must be located in a
50	designated an urban job tax credit high-crime area, enterprise
51	zone, empowerment zone, Front Porch Community, designated
52	brownfield area, or urban infill area, and the developer must
53	agree to set aside at least 20 percent of the square footage of
54	the project for low-income and moderate-income housing.
55	d.  "Substantially completed" has the same meaning as
56	provided in s. 192.042(1).
57	2.  Building materials used in the construction of a
58	housing project or mixed-use project are exempt from the tax
59	imposed by this chapter upon an affirmative showing to the
60	satisfaction of the department that the requirements of this
61	paragraph have been met. This exemption inures to the owner
62	through a refund of previously paid taxes. To receive this
63	refund, the owner must file an application under oath with the
64	department which includes:
65	a.  The name and address of the owner.
66	b.  The address and assessment roll parcel number of the
67	project for which a refund is sought.
68	c.  A copy of the building permit issued for the project.
69	d.  A certification by the local building code inspector
70	that the project is substantially completed.
71	e.  A sworn statement, under penalty of perjury, from the
72	general contractor licensed in this state with whom the owner
73	contracted to construct the project, which statement lists the
74	building materials used in the construction of the project and
75	the actual cost thereof, and the amount of sales tax paid on
76	these materials. If a general contractor was not used, the owner
77	shall provide this information in a sworn statement, under
78	penalty of perjury. Copies of invoices evidencing payment of
79	sales tax must be attached to the sworn statement.
80	3.  An application for a refund under this paragraph must
81	be submitted to the department within 6 months after the date
82	the project is deemed to be substantially completed by the local
83	building code inspector. Within 30 working days after receipt of
84	the application, the department shall determine if it meets the
85	requirements of this paragraph. A refund approved pursuant to
86	this paragraph shall be made within 30 days after formal
87	approval of the application by the department. The provisions of
88	s. 212.095 do not apply to any refund application made under
89	this paragraph.
90	4.  The department shall establish by rule an application
91	form and criteria for establishing eligibility for exemption
92	under this paragraph.
93	5.  The exemption shall apply to purchases of materials on
94	or after July 1, 2000.
95	Section 2.  Section 212.097, Florida Statutes, is amended
96	to read:
97	212.097  Designated Urban High-Crime Area Job Tax Credit
98	Area Program.--
99	(1)  As used in this section, the term:
100	(a)  "Eligible business" means any sole proprietorship,
101	firm, partnership, or corporation that is located in a
102	designated urban job tax credit area qualified county and is
103	predominantly engaged in, or is headquarters for a business
104	predominantly engaged in, activities usually provided for
105	consideration by firms classified within the following standard
106	industrial classifications: SIC 01-SIC 09 (agriculture,
107	forestry, and fishing); SIC 20-SIC 39 (manufacturing); SIC 52-
108	SIC 57 and SIC 59 (retail); SIC 422 (public warehousing and
109	storage); SIC 70 (hotels and other lodging places); SIC 7391
110	(research and development); SIC 781 (motion picture production
111	and allied services); SIC 7992 (public golf courses); and SIC
112	7996 (amusement parks); and a targeted industry eligible for the
113	qualified target industry business tax refund under s. 288.106.
114	A call center or similar customer service operation that
115	services a multistate market or international market is also an
116	eligible business. In addition, the Office of Tourism, Trade,
117	and Economic Development may, as part of its final budget
118	request submitted pursuant to s. 216.023, recommend additions to
119	or deletions from the list of standard industrial
120	classifications used to determine an eligible business, and the
121	Legislature may implement such recommendations. Excluded from
122	eligible receipts are receipts from retail sales, except such
123	receipts for SIC 52-SIC 57 and SIC 59 (retail) hotels and other
124	lodging places classified in SIC 70, public golf courses in SIC
125	7992, and amusement parks in SIC 7996. For purposes of this
126	paragraph, the term "predominantly" means that more than 50
127	percent of the business's gross receipts from all sources is
128	generated by those activities usually provided for consideration
129	by firms in the specified standard industrial classification.
130	The determination of whether the business is located in a
131	designated urban job tax credit qualified high-crime area and
132	the tier ranking of that area must be based on the date of
133	application for the credit under this section. Commonly owned
134	and controlled entities are to be considered a single business
135	entity.
136	(b)  "Qualified employee" means any employee of an eligible
137	business who performs duties in connection with the operations
138	of the business on a regular, full-time basis for an average of
139	at least 36 hours per week for at least 3 months within the
140	designated urban job tax credit qualified high-crime area in
141	which the eligible business is located. An owner or partner of
142	the eligible business is not a qualified employee. The term also
143	includes an employee leased from an employee leasing company
144	licensed under chapter 468, if such employee has been
145	continuously leased to the employer for an average of at least
146	36 hours per week for more than 6 months.
147	(c)  "New business" means any eligible business first
148	beginning operation on a site in a designated urban job tax
149	credit qualified high-crime area and clearly separate from any
150	other commercial or business operation of the business entity
151	within a designated urban job tax credit qualified high-crime
152	area. A business entity that operated an eligible business
153	within a designated urban job tax credit qualified high-crime
154	area within the 48 months before the period provided for
155	application by subsection (2) is not considered a new business.
156	(d)  "Existing business" means any eligible business that
157	does not meet the criteria for a new business.
158	(e)  "Designated urban job tax credit Qualified high-crime
159	area" means an area selected by the Office of Tourism, Trade,
160	and Economic Development in the following manner: every fifth
161	third year, the office shall designate rank and tier those areas
162	nominated under subsection (7), according to the highest level
163	of distress experienced in the categories enumerated under
164	subsection (7). The Office of Tourism, Trade, and Economic
165	Development shall designate the 30 highest-distress-profile
166	urban areas as eligible participants under the Designated Urban
167	Job Tax Credit Area Program. following prioritized criteria:
168	1.  Highest arrest rates within the geographic area for
169	violent crime and for such other crimes as drug sale, drug
170	possession, prostitution, vandalism, and civil disturbances;
171	2.  Highest reported crime volume and rate of specific
172	property crimes such as business and residential burglary, motor
173	vehicle theft, and vandalism;
174	3.  Highest percentage of reported index crimes that are
175	violent in nature;
176	4.  Highest overall index crime volume for the area; and
177	5.  Highest overall index crime rate for the geographic
178	area.
179
180	Tier-one areas are ranked 1 through 5 and represent the highest
181	crime areas according to this ranking. Tier-two areas are ranked
182	6 through 10 according to this ranking. Tier-three areas are
183	ranked 11 through 15. Notwithstanding this definition,
184	"designated urban job tax credit qualified high-crime area" also
185	means an area that has been designated as a federal Empowerment
186	Zone pursuant to the Taxpayer Relief Act of 1997 or the
187	Community Tax Relief Act of 2000. An area designated under this
188	section as of June 30, 2006, shall retain the designation
189	through June 30, 2012. A business qualified in such a designated
190	area under this section, as this section was in effect on or
191	before June 30, 2006, and eligible for the applicable tax credit
192	as of June 30, 2006, shall retain the same qualification and tax
193	credit amounts through June 30, 2012, that were available to the
194	business on June 30, 2006, if the business complies with the
195	job-creation requirements. Any area designated pursuant to this
196	section shall retain the designation for a period not to exceed
197	6 years after the effective date of designation. Thereafter, any
198	such area or any other area eligible for designation may seek
199	approval from the office for designation.
200	(f)  "Urban" means a densely populated nonrural area
201	located within an urban county that consists of a cluster of one
202	or more census blocks, each of which has a population density of
203	at least 400 people per square mile, or an area defined as an
204	urbanized area by the most recent United States Census.
205	(g)  "Urban infill and redevelopment area" means an area or
206	areas designated by a local government where:
207	1.  Public services such as water and wastewater,
208	transportation, schools, and recreation are already available or
209	are scheduled to be provided in an adopted 5-year schedule of
210	capital improvements;
211	2.  The area, or one or more neighborhoods within the area,
212	suffers from pervasive poverty, unemployment, and general
213	distress as defined by s. 290.0058;
214	3.  The area exhibits a proportion of properties that are
215	substandard, overcrowded, dilapidated, vacant or abandoned, or
216	functionally obsolete which is higher than the average for the
217	local government;
218	4.  More than 50 percent of the area is within 1/4 mile of
219	a transit stop, or a sufficient number of such transit stops
220	will be made available concurrent with the designation; and
221	5.  The area includes or is adjacent to community
222	redevelopment areas, brownfields, enterprise zones, or Main
223	Street programs, or has been designated by the state or Federal
224	Government as an urban redevelopment, revitalization, or infill
225	area under empowerment zone, enterprise community, or brownfield
226	showcase community programs or similar programs. Such a
227	designated area is ranked in tier three until the areas are
228	reevaluated by the Office of Tourism, Trade, and Economic
229	Development.
230	(2)  A new eligible business may apply for a tax credit
231	under this subsection once at any time during its first year of
232	operation. A new eligible business in a designated urban job tax
233	credit tier-one qualified high-crime area which has at least 10
234	qualified employees on the date of application shall receive a
235	$1,500 tax credit for each such employee. A new eligible
236	business in a tier-two qualified high-crime area which has at
237	least 20 qualified employees on the date of application shall
238	receive a $1,000 tax credit for each such employee. A new
239	eligible business in a tier-three qualified high-crime area
240	which has at least 30 qualified employees on the date of
241	application shall receive a $500 tax credit for each such
242	employee.
243	(3)  An existing eligible business may apply for a tax
244	credit under this subsection at any time it is entitled to such
245	credit, except as restricted by this subsection. An existing
246	eligible business in a designated urban job tax credit tier-one
247	qualified high-crime area which on the date of application has
248	at least 5 more qualified employees than it had 1 year prior to
249	its date of application shall receive a $1,500 tax credit for
250	each such additional employee. An existing eligible business in
251	a tier-two qualified high-crime area which on the date of
252	application has at least 10 more qualified employees than it had
253	1 year prior to its date of application shall receive a $1,000
254	credit for each such additional employee. An existing business
255	in a tier-three qualified high-crime area which on the date of
256	application has at least 15 more qualified employees than it had
257	1 year prior to its date of application shall receive a $500 tax
258	credit for each such additional employee. An existing eligible
259	business may apply for the credit under this subsection no more
260	than once in any 12-month period. Any existing eligible business
261	that received a credit under subsection (2) may not apply for
262	the credit under this subsection sooner than 12 months after the
263	application date for the credit under subsection (2).
264	(4)  For any new eligible business receiving a credit
265	pursuant to subsection (2), an additional $500 credit shall be
266	provided for any qualified employee who is a welfare transition
267	program participant. For any existing eligible business
268	receiving a credit pursuant to subsection (3), an additional
269	$500 credit shall be provided for any qualified employee who is
270	a welfare transition program participant. Such employee must be
271	employed on the application date and have been employed less
272	than 1 year. This credit shall be in addition to other credits
273	pursuant to this section regardless of the tier-level of the
274	high-crime area. Appropriate documentation concerning the
275	eligibility of an employee for this credit must be submitted as
276	determined by the department.
277	(5)  To be eligible for a tax credit under subsection (3),
278	the number of qualified employees employed 1 year prior to the
279	application date must be no lower than the number of qualified
280	employees on the application date on which a credit under this
281	section was based for any previous application, including an
282	application under subsection (2).
283	(6)  Any county or municipality, or a county and one or
284	more municipalities together, may apply to the Office of
285	Tourism, Trade, and Economic Development for the designation of
286	an area as a designated urban job tax credit high-crime area
287	after the adoption by the governing body or bodies of a
288	resolution that:
289	(a)  Finds that an urban a high-crime area exists in such
290	county or municipality, or in both the county and one or more
291	municipalities, which chronically exhibits extreme and
292	unacceptable levels of poverty, unemployment, physical
293	deterioration, and economic disinvestment.;
294	(b)  Determines that the rehabilitation, conservation, or
295	redevelopment, or a combination thereof, of such an urban a
296	high-crime area is necessary in the interest of the health,
297	safety, and welfare of the residents of such county or
298	municipality, or such county and one or more municipalities.;
299	and
300	(c)  Determines that the revitalization of such an urban a
301	high-crime area can occur if the public sector or private sector
302	can be induced to invest its own resources in productive
303	enterprises that build or rebuild the economic viability of the
304	area.
305	(7)  The governing body of the entity nominating the area
306	shall demonstrate provide to the Office of Tourism, Trade, and
307	Economic Development that the area following:
308	(a)1.  Has at least forty percent of its residents earning
309	wages on an annual basis which are equal to or less than the
310	annual wage of a person who is earning minimum wage; or
311	2.  Has more than 20 percent of its residents or families
312	living below the federal standard of poverty for individuals or
313	a family of four;
314	(b)  Has an unemployment rate at least 3 percentage points
315	higher than the state's unemployment rate;
316	(c)  Has an arrest rate higher than the state's average
317	rate for such crimes as drug sale, drug possession,
318	prostitution, vandalism, and civil disturbances, as recorded by
319	the total crime index of the Department of Law Enforcement; and
320	(d)1.  Has 50 percent or more of its residents who rent;
321	2.  Has property values that are within the lower 50
322	percent of the county's assessed property values;
323	3.  Has more than 5 percent of its commercial buildings
324	currently vacant or condemned within the previous 24 months; or
325	4.  With respect to at least 25 percent of tax or special
326	assessment delinquencies, the amount of the delinquency exceeds
327	the fair value of the land The overall index crime rate for the
328	geographic area;
329	(b)  The overall index crime volume for the area;
330	(c)  The percentage of reported index crimes that are
331	violent in nature;
332	(d)  The reported crime volume and rate of specific
333	property crimes such as business and residential burglary, motor
334	vehicle theft, and vandalism; and
335	(e)  The arrest rates within the geographic area for
336	violent crime and for such other crimes as drug sale, drug
337	possession, prostitution, disorderly conduct, vandalism, and
338	other public-order offenses.
339	(8)  A municipality, or a county and one or more
340	municipalities together, may not nominate more than one urban
341	high-crime area. However, any county as defined by s. 125.011(1)
342	may nominate no more than three urban high-crime areas.
343	(9)  An area nominated by a county or municipality, or a
344	county and one or more municipalities together, for designation
345	as a designated urban job tax credit high-crime area shall be
346	eligible only if it meets the following criteria:
347	(a)  The selected area does not exceed 20 square miles and
348	either has a continuous boundary or consists of not more than
349	three noncontiguous parcels;
350	(b)  The selected area does not exceed the following
351	mileage limitation:
352	1.  For areas communities having a total population of
353	150,000 persons or more, the selected area does not exceed 20
354	square miles and is within 10 miles of the urban infill and
355	redevelopment area of a city.
356	2.  For areas communities having a total population of
357	50,000 persons or more, but fewer than 150,000 persons, the
358	selected area does not exceed 10 square miles and is within 7.5
359	miles of the urban infill and redevelopment area of a city.
360	3.  For areas communities having a total population of
361	20,000 persons or more, but fewer than 50,000 persons, the
362	selected area does not exceed 5 square miles and is within 5
363	miles of the urban infill and redevelopment area of a city.
364	4.  For areas communities having a total population of
365	fewer than 20,000 persons, the selected area does not exceed 3
366	square miles and is within 3 miles of the urban infill and
367	redevelopment area of a city.
368	(10)(a)  In order to claim this credit, an eligible
369	business must file under oath with the Office of Tourism, Trade,
370	and Economic Development a statement that includes the name and
371	address of the eligible business and any other information that
372	is required to process the application.
373	(b)  Within 30 working days after receipt of an application
374	for credit, the Office of Tourism, Trade, and Economic
375	Development shall review the application to determine whether it
376	contains all the information required by this subsection and
377	meets the criteria set out in this section. Subject to the
378	provisions of paragraph (c), the Office of Tourism, Trade, and
379	Economic Development shall approve all applications that contain
380	the information required by this subsection and meet the
381	criteria set out in this section as eligible to receive a
382	credit.
383	(c)  The maximum credit amount that may be approved during
384	any calendar year is $5 million, of which $1 million shall be
385	exclusively reserved for tier-one areas. The Department of
386	Revenue, in conjunction with the Office of Tourism, Trade, and
387	Economic Development, shall notify the governing bodies in areas
388	designated under this section as urban high-crime areas when the
389	$5 million maximum amount has been reached. Applications must be
390	considered for approval in the order in which they are received
391	without regard to whether the credit is for a new or existing
392	business. This limitation applies to the value of the credit as
393	contained in approved applications. Approved credits may be
394	taken in the time and manner allowed pursuant to this section.
395	(11)  If the application is insufficient to support the
396	credit authorized in this section, the Office of Tourism, Trade,
397	and Economic Development shall deny the credit and notify the
398	business of that fact. The business may reapply for this credit
399	within 3 months after such notification.
400	(12)  If the credit under this section is greater than can
401	be taken on a single tax return, excess amounts may be taken as
402	credits on any tax return submitted within 12 months after the
403	approval of the application by the department.
404	(13)  It is the responsibility of each business to
405	affirmatively demonstrate to the satisfaction of the Department
406	of Revenue that it meets the requirements of this section.
407	(14)  Any person who fraudulently claims this credit is
408	liable for repayment of the credit plus a mandatory penalty of
409	100 percent of the credit and is guilty of a misdemeanor of the
410	second degree, punishable as provided in s. 775.082 or s.
411	775.083.
412	(15)  A corporation may take the credit under this section
413	against its corporate income tax liability, as provided in s.
414	220.1895. However, a corporation that applies its job tax credit
415	against the tax imposed by chapter 220 may not receive the
416	credit provided for in this section. A credit may be taken
417	against only one tax.
418	(16)  The department shall adopt rules governing the manner
419	and form of applications for credit and may establish guidelines
420	concerning the requisites for an affirmative showing of
421	qualification for the credit under this section.
422	Section 3.  Section 220.1895, Florida Statutes, is amended
423	to read:
424	220.1895  Rural Job Tax Credit and Designated Urban High-
425	Crime Area Job Tax Credit.--There shall be allowed a credit
426	against the tax imposed by this chapter amounts approved by the
427	Office of Tourism, Trade, and Economic Development pursuant to
428	the Rural Job Tax Credit Program in s. 212.098 and the
429	Designated Urban High-Crime Area Job Tax Credit Area Program in
430	s. 212.097. A corporation that uses its credit against the tax
431	imposed by this chapter may not take the credit against the tax
432	imposed by chapter 212. If any credit granted under this section
433	is not fully used in the first year for which it becomes
434	available, the unused amount may be carried forward for a period
435	not to exceed 5 years. The carryover may be used in a subsequent
436	year when the tax imposed by this chapter for such year exceeds
437	the credit for such year under this section after applying the
438	other credits and unused credit carryovers in the order provided
439	in s. 220.02(8).
440	Section 4.  Subsection (2) and paragraph (j) of subsection
441	(3) of section 288.99, Florida Statutes, are amended to read:
442	288.99  Certified Capital Company Act.--
443	(2)  PURPOSE.--The primary purpose of this act is to
444	stimulate a substantial increase in venture capital investments
445	in this state by providing an incentive for insurance companies
446	to invest in certified capital companies in this state which, in
447	turn, will make investments in new businesses or in expanding
448	businesses, including minority-owned or minority-operated
449	businesses and businesses located in a designated Front Porch
450	community, enterprise zone, designated urban job tax credit
451	high-crime area, rural job tax credit county, or nationally
452	recognized historic district. The increase in investment capital
453	flowing into new or expanding businesses is intended to
454	contribute to employment growth, create jobs which exceed the
455	average wage for the county in which the jobs are created, and
456	expand or diversify the economic base of this state.
457	(3)  DEFINITIONS.--As used in this section, the term:
458	(j)  "Qualified business" means the Digital Divide Trust
459	Fund established under the State of Florida Technology Office or
460	a business that meets the following conditions as evidenced by
461	documentation required by commission rule:
462	1.  The business is headquartered in this state and its
463	principal business operations are located in this state or at
464	least 75 percent of the employees are employed in the state.
465	2.  At the time a certified capital company makes an
466	initial investment in a business, the business would qualify for
467	investment under 13 C.F.R. s. 121.301(c), which is involved in
468	manufacturing, processing or assembling products, conducting
469	research and development, or providing services.
470	3.  At the time a certified capital company makes an
471	initial investment in a business, the business certifies in an
472	affidavit that:
473	a.  The business is unable to obtain conventional
474	financing, which means that the business has failed in an
475	attempt to obtain funding for a loan from a bank or other
476	commercial lender or that the business cannot reasonably be
477	expected to qualify for such financing under the standards of
478	commercial lending;
479	b.  The business plan for the business projects that the
480	business is reasonably expected to achieve in excess of $25
481	million in sales revenue within 5 years after the initial
482	investment, or the business is located in a designated Front
483	Porch community, enterprise zone, designated urban job tax
484	credit high crime area, rural job tax credit county, or
485	nationally recognized historic district;
486	c.  The business will maintain its headquarters in this
487	state for the next 10 years and any new manufacturing facility
488	financed by a qualified investment will remain in this state for
489	the next 10 years, or the business is located in a designated
490	Front Porch community, enterprise zone, designated urban job tax
491	credit high crime area, rural job tax credit county, or
492	nationally recognized historic district; and
493	d.  The business has fewer than 200 employees and at least
494	75 percent of the employees are employed in this state. For
495	purposes of this subsection, the term also includes the Florida
496	Black Business Investment Board, any entity majority owned by
497	the Florida Black Business Investment Board, or any entity in
498	which the Florida Black Business Investment Board holds a
499	majority voting interest on the board of directors.
500	4.  The term does not include:
501	a.  Any business predominantly engaged in retail sales,
502	real estate development, insurance, banking, lending, or oil and
503	gas exploration.
504	b.  Any business predominantly engaged in professional
505	services provided by accountants, lawyers, or physicians.
506	c.  Any company that has no historical revenues and either
507	has no specific business plan or purpose or has indicated that
508	its business plan is solely to engage in a merger or acquisition
509	with any unidentified company or other entity.
510	d.  Any company that has a strategic plan to grow through
511	the acquisition of firms with substantially similar business
512	which would result in the planned net loss of Florida-based jobs
513	over a 12-month period after the acquisition as determined by
514	the office.
515	Section 5.  This act shall take effect July 1, 2006.

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