HB 0449CS

CHAMBER ACTION




1The Commerce Council recommends the following:
2
3     Council/Committee Substitute
4     Remove the entire bill and insert:
5
A bill to be entitled
6An act relating to economic development; amending s.
7212.08, F.S.; conforming provisions to the revision
8creating designated urban job tax credit areas; amending
9s. 212.097, F.S.; revising provisions providing for an
10urban job tax credit program to apply to designated urban
11job tax credit areas rather than high-crime areas;
12revising and providing definitions, eligibility criteria,
13application procedures and requirements, area
14characteristics and criteria, and area designation
15limitations; providing for tax credits to certain
16businesses; providing procedures and requirements for and
17limitations on tax credits; providing duties and
18responsibilities of the Office of Tourism, Trade, and
19Economic Development; providing for liability and a
20criminal penalty for fraudulent claim of the credit;
21providing limitations on corporations claiming the credit
22against certain taxes; authorizing the Department of
23Revenue to adopt rules and establish guidelines; providing
24for retention of the program and tax credit eligibility
25and amount by certain businesses for a certain time;
26providing for future repeal; amending ss. 220.1895 and
27288.99, F.S.; conforming provisions to the revision
28creating designated urban job tax credit areas; creating
29s. 290.0078, F.S.; authorizing Charlotte County or
30Charlotte County and the City of Punta Gorda to apply to
31the Office of Tourism, Trade, and Economic Development for
32designation of an enterprise zone; providing requirements;
33authorizing the office to designate an enterprise zone;
34providing an effective date.
35
36Be It Enacted by the Legislature of the State of Florida:
37
38     Section 1.  Paragraph (o) of subsection (5) of section
39212.08, Florida Statutes, is amended to read:
40     212.08  Sales, rental, use, consumption, distribution, and
41storage tax; specified exemptions.--The sale at retail, the
42rental, the use, the consumption, the distribution, and the
43storage to be used or consumed in this state of the following
44are hereby specifically exempt from the tax imposed by this
45chapter.
46     (5)  EXEMPTIONS; ACCOUNT OF USE.--
47     (o)  Building materials in redevelopment projects.--
48     1.  As used in this paragraph, the term:
49     a.  "Building materials" means tangible personal property
50that becomes a component part of a housing project or a mixed-
51use project.
52     b.  "Housing project" means the conversion of an existing
53manufacturing or industrial building to housing units in a
54designated an urban job tax credit high-crime area, enterprise
55zone, empowerment zone, Front Porch Community, designated
56brownfield area, or urban infill area and in which the developer
57agrees to set aside at least 20 percent of the housing units in
58the project for low-income and moderate-income persons or the
59construction in a designated brownfield area of affordable
60housing for persons described in s. 420.0004(9), (10), or (14),
61or in s. 159.603(7).
62     c.  "Mixed-use project" means the conversion of an existing
63manufacturing or industrial building to mixed-use units that
64include artists' studios, art and entertainment services, or
65other compatible uses. A mixed-use project must be located in a
66designated an urban job tax credit high-crime area, enterprise
67zone, empowerment zone, Front Porch Community, designated
68brownfield area, or urban infill area, and the developer must
69agree to set aside at least 20 percent of the square footage of
70the project for low-income and moderate-income housing.
71     d.  "Substantially completed" has the same meaning as
72provided in s. 192.042(1).
73     2.  Building materials used in the construction of a
74housing project or mixed-use project are exempt from the tax
75imposed by this chapter upon an affirmative showing to the
76satisfaction of the department that the requirements of this
77paragraph have been met. This exemption inures to the owner
78through a refund of previously paid taxes. To receive this
79refund, the owner must file an application under oath with the
80department which includes:
81     a.  The name and address of the owner.
82     b.  The address and assessment roll parcel number of the
83project for which a refund is sought.
84     c.  A copy of the building permit issued for the project.
85     d.  A certification by the local building code inspector
86that the project is substantially completed.
87     e.  A sworn statement, under penalty of perjury, from the
88general contractor licensed in this state with whom the owner
89contracted to construct the project, which statement lists the
90building materials used in the construction of the project and
91the actual cost thereof, and the amount of sales tax paid on
92these materials. If a general contractor was not used, the owner
93shall provide this information in a sworn statement, under
94penalty of perjury. Copies of invoices evidencing payment of
95sales tax must be attached to the sworn statement.
96     3.  An application for a refund under this paragraph must
97be submitted to the department within 6 months after the date
98the project is deemed to be substantially completed by the local
99building code inspector. Within 30 working days after receipt of
100the application, the department shall determine if it meets the
101requirements of this paragraph. A refund approved pursuant to
102this paragraph shall be made within 30 days after formal
103approval of the application by the department. The provisions of
104s. 212.095 do not apply to any refund application made under
105this paragraph.
106     4.  The department shall establish by rule an application
107form and criteria for establishing eligibility for exemption
108under this paragraph.
109     5.  The exemption shall apply to purchases of materials on
110or after July 1, 2000.
111     Section 2.  Section 212.097, Florida Statutes, is amended
112to read:
113(Substantial rewording of section. See
114s. 212.097, F.S., for current text.)
115     212.097  Designated Urban Job Tax Credit Area Program.--
116     (1)  As used in this section, the term:
117     (a)  "Designated urban job tax credit area" means an area
118designated by the Office of Tourism, Trade, and Economic
119Development pursuant to subsection (5). Such an area includes an
120area designated as a federal empowerment zone pursuant to the
121Taxpayer Relief Act of 1997 or the Community Tax Relief Act of
1222000. A designated urban job tax credit area shall retain its
123designation for a period of 5 years after the date of
124designation.
125     (b)  "Eligible business" means any business entity located
126in a designated urban job tax credit area that is predominantly
127engaged in, or is headquarters for a business predominantly
128engaged in, activities usually provided for consideration by
129firms classified within the following standard industrial
130classifications: SIC 01-SIC 09 (agriculture, forestry, and
131fishing); SIC 20-SIC 39 (manufacturing); SIC 52-SIC 57 and SIC
13259 (retail); SIC 422 (public warehousing and storage); SIC 70
133(hotels and other lodging places); SIC 7391 (research and
134development); SIC 781 (motion picture production and allied
135services); SIC 7992 (public golf courses); SIC 7996 (amusement
136parks); and a targeted industry eligible for the qualified
137target industry business tax refund under s. 288.106. A call
138center or similar customer service operation that services a
139multistate market or international market is also an eligible
140business. Excluded from eligible receipts are receipts from
141retail sales, except such receipts for hotels (retail)
142classified in SIC 52-SIC 57 and SIC 59 and other lodging places
143classified in SIC 70, public golf courses classified in SIC
1447992, and amusement parks classified in SIC 7996. For purposes
145of this paragraph, the term "predominantly" means that more than
14650 percent of the business's gross receipts from all sources is
147generated by those activities usually provided for consideration
148by firms in the specified standard industrial classification.
149The determination of whether the business is located in a
150designated urban job tax credit area must be based on the date
151of application for the credit under this section. Commonly owned
152and controlled entities are to be considered a single business
153entity.
154     (c)  "Existing business" means any eligible business that
155does not meet the criteria for a new business.
156     (d)  "New business" means any eligible business first
157beginning operation on a site in a designated urban job tax
158credit area and clearly separate from any other commercial or
159business operation of the business entity within a designated
160urban job tax credit area. A business entity that operated an
161eligible business within a designated urban job tax credit area
162within the 48 months before the period provided for application
163by subsection (2) is not considered a new business.
164     (e)  "Office" means the Office of Tourism, Trade, and
165Economic Development.
166     (f)  "Qualified employee" means any employee of an eligible
167business who performs duties in connection with the operations
168of the business on a regular, full-time basis for an average of
169at least 36 hours per week for at least 3 months within the
170designated urban job tax credit area in which the eligible
171business is located. An owner or partner of the eligible
172business is not a qualified employee. The term also includes an
173employee leased from an employee leasing company licensed under
174chapter 468 if such employee has been continuously leased to the
175employer for an average of at least 36 hours per week for more
176than 6 months.
177     (g)  "Urban infill and redevelopment area" means an area or
178areas designated by a local government in which:
179     1.  Public services such as water and wastewater,
180transportation, schools, and recreation are already available or
181are scheduled to be provided in an adopted 5-year schedule of
182capital improvements.
183     2.  The area, or one or more neighborhoods within the area,
184suffers from pervasive poverty, unemployment, and general
185distress as described in s. 290.0058.
186     3.  The area exhibits a proportion of properties that are
187substandard, overcrowded, dilapidated, vacant or abandoned, or
188functionally obsolete which is higher than the average for the
189local government.
190     4.  More than 50 percent of the area is within 1/4 mile of
191a transit stop, or a sufficient number of such transit stops
192will be made available concurrent with the designation.
193     5.  The area includes or is adjacent to community
194redevelopment areas, brownfields, enterprise zones, or Main
195Street programs or has been designated by the state or Federal
196Government as an urban redevelopment, revitalization, or infill
197area under empowerment zone, enterprise community, or brownfield
198showcase community programs or similar programs.
199     (2)  A county or municipality, or a county and one or more
200municipalities together, may apply to the office for the
201designation of an area as a designated urban job tax credit area
202in accordance with subsection (3). Applications must be received
203by the office no later than April 30, 2007, and every 5 years
204thereafter.
205     (3)  In order for an area to qualify as a designated urban
206job tax credit area, the following requirements must be met:
207     (a)  The local government seeking designation must adopt a
208resolution prior to the date of application for designation
209that:
210     1.  Finds that an urban area exists in such county or
211municipality, or in both the county and one or more
212municipalities, that chronically exhibits extreme and
213unacceptable levels of poverty, unemployment, physical
214deterioration, and economic disinvestment.
215     2.  Determines that the rehabilitation, conservation, or
216redevelopment, or a combination of rehabilitation, conservation,
217or redevelopment, of such an urban area is necessary in the
218interest of the health, safety, and welfare of the residents of
219such county or municipality, or such county and one or more
220municipalities.
221     3.  Determines that the revitalization of such an urban
222area can occur if the public sector or private sector can be
223induced to invest resources in productive enterprises that build
224or rebuild the economic viability of the area.
225     (b)  The local government seeking designation demonstrates
226to the office that the area:
227     1.a.  Has at least 40 percent of its residents earning
228wages on an annual basis that are equal to or less than the
229annual wage of a person who is earning minimum wage; or
230     b.  Has more than 20 percent of its residents or families
231living below the federal standard of poverty for individuals or
232a family of four.
233     2.  Has an unemployment rate at least 3 percentage points
234higher than the state's unemployment rate.
235     3.  Has an arrest rate higher than the state's average rate
236for such crimes as drug sale, drug possession, prostitution,
237vandalism, and civil disturbances, as recorded by the total
238crime index of the Department of Law Enforcement.
239     4.a.  Has 50 percent or more of its residents who rent;
240     b.  Has property values that are within the lower 50
241percent of the county's assessed property values;
242     c.  Has more than 5 percent of its commercial buildings
243currently vacant or condemned within the previous 24 months; or
244     d.  With respect to at least 25 percent of tax or special
245assessment delinquencies, the amount of the delinquency exceeds
246the fair value of the land.
247     (c)  The selected area has a continuous boundary or
248consists of not more than three noncontiguous parcels.
249     (d)  The selected area does not exceed the following
250mileage limitation:
251     1.  For areas having a total population of 150,000 persons
252or more, the selected area does not exceed 20 square miles and
253is within 10 miles of the urban infill and redevelopment area of
254a city.
255     2.  For areas having a total population of 50,000 persons
256or more but fewer than 150,000 persons, the selected area does
257not exceed 10 square miles and is within 7.5 miles of the urban
258infill and redevelopment area of a city.
259     3.  For areas having a total population of 20,000 persons
260or more but fewer than 50,000 persons, the selected area does
261not exceed 5 square miles and is within 5 miles of the urban
262infill and redevelopment area of a city.
263     4.  For areas having a total population of fewer than
26420,000 persons, the selected area does not exceed 3 square miles
265and is within 3 miles of the urban infill and redevelopment area
266of a city.
267     (4)  A municipality, or a county and one or more
268municipalities together, may not nominate more than one urban
269area. However, any county as defined in s. 125.011(1) may not
270nominate more than three urban areas.
271     (5)  On June 30, 2007, and every 5 years thereafter, the
272office may designate no more than 30 areas that meet the
273requirements of subsection (3). If there are more than 30
274applications in any year, the office shall rank the areas by
275level of distress and designate the 30 areas with the most need.
276     (6)  A new eligible business may apply for a tax credit
277under this subsection once at any time during its first year of
278operation. A new eligible business in a designated urban job tax
279credit area that has at least 10 qualified employees on the date
280of application shall receive a $1,000 tax credit for each such
281employee.
282     (7)  An existing eligible business may apply for a tax
283credit under this subsection at any time and is entitled to such
284credit except as restricted by this subsection. An existing
285eligible business in a designated urban job tax credit area that
286on the date of application has at least five more qualified
287employees than the business had 1 year prior to the business's
288date of application shall receive a $1,000 credit for each such
289additional employee. An existing eligible business may apply for
290the credit under this subsection no more than once in any 12-
291month period. Any existing eligible business that received a
292credit under subsection (6) may not apply for the credit under
293this subsection sooner than 12 months after the application date
294for the credit under subsection (6). To be eligible for a tax
295credit under this subsection, the number of qualified employees
296employed 1 year prior to the application date must be no lower
297than the number of qualified employees on the application date
298on which a credit under this section was based for any previous
299application, including an application under subsection (6).
300     (8)  For any new eligible business receiving a credit
301pursuant to subsection (6) or any existing eligible business
302receiving a credit pursuant to subsection (7), an additional
303$500 credit shall be provided for any qualified employee who is
304a welfare transition program participant. Such employee must be
305employed on the credit application date and must have been
306employed less than 1 year. This credit shall be in addition to
307other credits pursuant to this section. Appropriate
308documentation concerning the eligibility of an employee for the
309additional credit under this subsection must be submitted as
310determined by the department.
311     (9)(a)  In order to claim the credit provided by this
312section, an eligible business must file under oath with the
313office a statement that includes the name and address of the
314eligible business and any other information that is required to
315process the application.
316     (b)  Within 30 working days after receipt of an application
317for the credit, the office shall review the application to
318determine whether it contains all the information required by
319this subsection and meets the criteria specified in this
320section. Subject to the provisions of paragraph (c), the office
321shall approve all applications that contain the information
322required by this subsection and meet the criteria specified  in
323this section as eligible to receive the credit.
324     (c)  The maximum credit amount that may be approved during
325any calendar year is $5 million. The Department of Revenue, in
326conjunction with the office, shall notify the governing bodies
327in areas designated under this section when the $5 million
328maximum amount has been reached. Applications must be considered
329for approval in the order in which they are received without
330regard to whether the credit is for a new or existing business.
331This limitation applies to the value of the credit as contained
332in approved applications. Approved credits may be taken in the
333time and manner allowed pursuant to this section.
334     (10)  If the application is insufficient to support the
335credit authorized in this section, the office shall deny the
336credit and notify the business of the denial. The business may
337reapply for the credit within 3 months after such notification.
338     (11)  If the credit provided under this section is greater
339than can be taken on a single tax return, excess amounts may be
340taken as credits on any tax return submitted within 12 months
341after the approval of the application by the department.
342     (12)  It is the responsibility of each business to
343affirmatively demonstrate to the satisfaction of the Department
344of Revenue that the business meets the requirements of this
345section.
346     (13)  Any person who fraudulently claims the credit
347provided by this section is liable for repayment of the credit
348plus a mandatory penalty of 100 percent of the credit and
349commits a misdemeanor of the second degree, punishable as
350provided in s. 775.082 or s. 775.083.
351     (14)  A corporation may take the credit under this section
352against its corporate income tax liability as provided in s.
353220.1895. However, a corporation that applies its job tax credit
354against the tax imposed by chapter 220 may not receive the
355credit provided for in this section. A credit may be taken
356against only one tax.
357     (15)  The department shall adopt rules pursuant to ss.
358120.536(1) and 120.54 governing the manner and form of
359applications for credit and may establish guidelines concerning
360the requisites for an affirmative showing of qualification for
361the credit under this section.
362     (16)  Notwithstanding subsections (6), (7), and (8), an
363eligible business located in an area designated under this
364section as of June 30, 2006, shall retain its program and tax
365credit eligibility and amount through June 30, 2012, if the
366business complies with the job creation requirements of this
367section in effect on that date. This subsection is repealed July
3681, 2012.
369     Section 3.  Section 220.1895, Florida Statutes, is amended
370to read:
371     220.1895  Rural Job Tax Credit and Designated Urban High-
372Crime Area Job Tax Credit.--There shall be allowed a credit
373against the tax imposed by this chapter amounts approved by the
374Office of Tourism, Trade, and Economic Development pursuant to
375the Rural Job Tax Credit Program in s. 212.098 and the
376Designated Urban High-Crime Area Job Tax Credit Area Program in
377s. 212.097. A corporation that uses its credit against the tax
378imposed by this chapter may not take the credit against the tax
379imposed by chapter 212. If any credit granted under this section
380is not fully used in the first year for which it becomes
381available, the unused amount may be carried forward for a period
382not to exceed 5 years. The carryover may be used in a subsequent
383year when the tax imposed by this chapter for such year exceeds
384the credit for such year under this section after applying the
385other credits and unused credit carryovers in the order provided
386in s. 220.02(8).
387     Section 4.  Subsection (2) and paragraph (j) of subsection
388(3) of section 288.99, Florida Statutes, are amended to read:
389     288.99  Certified Capital Company Act.--
390     (2)  PURPOSE.--The primary purpose of this act is to
391stimulate a substantial increase in venture capital investments
392in this state by providing an incentive for insurance companies
393to invest in certified capital companies in this state which, in
394turn, will make investments in new businesses or in expanding
395businesses, including minority-owned or minority-operated
396businesses and businesses located in a designated Front Porch
397community, enterprise zone, designated urban job tax credit
398high-crime area, rural job tax credit county, or nationally
399recognized historic district. The increase in investment capital
400flowing into new or expanding businesses is intended to
401contribute to employment growth, create jobs which exceed the
402average wage for the county in which the jobs are created, and
403expand or diversify the economic base of this state.
404     (3)  DEFINITIONS.--As used in this section, the term:
405     (j)  "Qualified business" means the Digital Divide Trust
406Fund established under the State of Florida Technology Office or
407a business that meets the following conditions as evidenced by
408documentation required by commission rule:
409     1.  The business is headquartered in this state and its
410principal business operations are located in this state or at
411least 75 percent of the employees are employed in the state.
412     2.  At the time a certified capital company makes an
413initial investment in a business, the business would qualify for
414investment under 13 C.F.R. s. 121.301(c), which is involved in
415manufacturing, processing or assembling products, conducting
416research and development, or providing services.
417     3.  At the time a certified capital company makes an
418initial investment in a business, the business certifies in an
419affidavit that:
420     a.  The business is unable to obtain conventional
421financing, which means that the business has failed in an
422attempt to obtain funding for a loan from a bank or other
423commercial lender or that the business cannot reasonably be
424expected to qualify for such financing under the standards of
425commercial lending;
426     b.  The business plan for the business projects that the
427business is reasonably expected to achieve in excess of $25
428million in sales revenue within 5 years after the initial
429investment, or the business is located in a designated Front
430Porch community, enterprise zone, designated urban job tax
431credit high crime area, rural job tax credit county, or
432nationally recognized historic district;
433     c.  The business will maintain its headquarters in this
434state for the next 10 years and any new manufacturing facility
435financed by a qualified investment will remain in this state for
436the next 10 years, or the business is located in a designated
437Front Porch community, enterprise zone, designated urban job tax
438credit high crime area, rural job tax credit county, or
439nationally recognized historic district; and
440     d.  The business has fewer than 200 employees and at least
44175 percent of the employees are employed in this state. For
442purposes of this subsection, the term also includes the Florida
443Black Business Investment Board, any entity majority owned by
444the Florida Black Business Investment Board, or any entity in
445which the Florida Black Business Investment Board holds a
446majority voting interest on the board of directors.
447     4.  The term does not include:
448     a.  Any business predominantly engaged in retail sales,
449real estate development, insurance, banking, lending, or oil and
450gas exploration.
451     b.  Any business predominantly engaged in professional
452services provided by accountants, lawyers, or physicians.
453     c.  Any company that has no historical revenues and either
454has no specific business plan or purpose or has indicated that
455its business plan is solely to engage in a merger or acquisition
456with any unidentified company or other entity.
457     d.  Any company that has a strategic plan to grow through
458the acquisition of firms with substantially similar business
459which would result in the planned net loss of Florida-based jobs
460over a 12-month period after the acquisition as determined by
461the office.
462     Section 5.  Section 290.0078, Florida Statutes, is created
463to read:
464     290.0078  Enterprise zone designation for Charlotte County
465or Charlotte County and the City of Punta Gorda.--Charlotte
466County or Charlotte County and the City of Punta Gorda may apply
467to the Office of Tourism, Trade, and Economic Development for
468designation of one enterprise zone encompassing an area not to
469exceed 10 square miles. The enterprise zone shall be located in
470an area encompassing the Charlotte County Airport Authority
471property and bounded by U.S. Highway 17 to the north and Jones
472Loop Road to the south. The application must be submitted by
473December 31, 2006, and must comply with the requirements of s.
474290.0055, with the exception of s. 290.0055(4)(c).
475Notwithstanding the provisions of s. 290.0065 limiting the total
476number of enterprise zones designated and the number of
477enterprise zones within a population category, the Office of
478Tourism, Trade, and Economic Development may designate one
479enterprise zone under this section. The Office of Tourism,
480Trade, and Economic Development shall establish the initial
481effective date of the enterprise zone designated pursuant to
482this section.
483     Section 6.  This act shall take effect July 1, 2006.


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