HB 449

1
A bill to be entitled
2An act relating to economic development; amending s.
3212.08, F.S.; conforming provisions to the revision
4creating designated urban job tax credit areas; amending
5s. 212.097, F.S.; revising provisions providing for an
6urban job tax credit program to apply to designated urban
7job tax credit areas rather than high-crime areas;
8revising and providing definitions, eligibility criteria,
9application procedures and requirements, area
10characteristics and criteria, and area designation
11limitations; providing for tax credits to certain
12businesses; providing procedures and requirements for and
13limitations on tax credits; providing duties and
14responsibilities of the Office of Tourism, Trade, and
15Economic Development; providing for liability and a
16criminal penalty for fraudulent claim of the credit;
17providing limitations on corporations claiming the credit
18against certain taxes; authorizing the Department of
19Revenue to adopt rules and establish guidelines; providing
20for retention of the program and tax credit eligibility
21and amount by certain businesses for a certain time;
22providing for future repeal; amending ss. 220.1895 and
23288.99, F.S.; conforming provisions to the revision
24creating designated urban job tax credit areas; creating
25s. 290.0078, F.S.; authorizing Charlotte County or
26Charlotte County and the City of Punta Gorda to apply to
27the Office of Tourism, Trade, and Economic Development for
28designation of an enterprise zone; providing requirements;
29authorizing the office to designate an enterprise zone;
30providing an effective date.
31
32Be It Enacted by the Legislature of the State of Florida:
33
34     Section 1.  Paragraph (o) of subsection (5) of section
35212.08, Florida Statutes, is amended to read:
36     212.08  Sales, rental, use, consumption, distribution, and
37storage tax; specified exemptions.--The sale at retail, the
38rental, the use, the consumption, the distribution, and the
39storage to be used or consumed in this state of the following
40are hereby specifically exempt from the tax imposed by this
41chapter.
42     (5)  EXEMPTIONS; ACCOUNT OF USE.--
43     (o)  Building materials in redevelopment projects.--
44     1.  As used in this paragraph, the term:
45     a.  "Building materials" means tangible personal property
46that becomes a component part of a housing project or a mixed-
47use project.
48     b.  "Housing project" means the conversion of an existing
49manufacturing or industrial building to housing units in a
50designated an urban job tax credit high-crime area, enterprise
51zone, empowerment zone, Front Porch Community, designated
52brownfield area, or urban infill area and in which the developer
53agrees to set aside at least 20 percent of the housing units in
54the project for low-income and moderate-income persons or the
55construction in a designated brownfield area of affordable
56housing for persons described in s. 420.0004(9), (10), or (14),
57or in s. 159.603(7).
58     c.  "Mixed-use project" means the conversion of an existing
59manufacturing or industrial building to mixed-use units that
60include artists' studios, art and entertainment services, or
61other compatible uses. A mixed-use project must be located in a
62designated an urban job tax credit high-crime area, enterprise
63zone, empowerment zone, Front Porch Community, designated
64brownfield area, or urban infill area, and the developer must
65agree to set aside at least 20 percent of the square footage of
66the project for low-income and moderate-income housing.
67     d.  "Substantially completed" has the same meaning as
68provided in s. 192.042(1).
69     2.  Building materials used in the construction of a
70housing project or mixed-use project are exempt from the tax
71imposed by this chapter upon an affirmative showing to the
72satisfaction of the department that the requirements of this
73paragraph have been met. This exemption inures to the owner
74through a refund of previously paid taxes. To receive this
75refund, the owner must file an application under oath with the
76department which includes:
77     a.  The name and address of the owner.
78     b.  The address and assessment roll parcel number of the
79project for which a refund is sought.
80     c.  A copy of the building permit issued for the project.
81     d.  A certification by the local building code inspector
82that the project is substantially completed.
83     e.  A sworn statement, under penalty of perjury, from the
84general contractor licensed in this state with whom the owner
85contracted to construct the project, which statement lists the
86building materials used in the construction of the project and
87the actual cost thereof, and the amount of sales tax paid on
88these materials. If a general contractor was not used, the owner
89shall provide this information in a sworn statement, under
90penalty of perjury. Copies of invoices evidencing payment of
91sales tax must be attached to the sworn statement.
92     3.  An application for a refund under this paragraph must
93be submitted to the department within 6 months after the date
94the project is deemed to be substantially completed by the local
95building code inspector. Within 30 working days after receipt of
96the application, the department shall determine if it meets the
97requirements of this paragraph. A refund approved pursuant to
98this paragraph shall be made within 30 days after formal
99approval of the application by the department. The provisions of
100s. 212.095 do not apply to any refund application made under
101this paragraph.
102     4.  The department shall establish by rule an application
103form and criteria for establishing eligibility for exemption
104under this paragraph.
105     5.  The exemption shall apply to purchases of materials on
106or after July 1, 2000.
107     Section 2.  Section 212.097, Florida Statutes, is amended
108to read:
109(Substantial rewording of section. See
110s. 212.097, F.S., for current text.)
111     212.097  Designated Urban Job Tax Credit Area Program.--
112     (1)  As used in this section, the term:
113     (a)  "Designated urban job tax credit area" means an area
114designated by the Office of Tourism, Trade, and Economic
115Development pursuant to subsection (5). Such an area includes an
116area designated as a federal empowerment zone pursuant to the
117Taxpayer Relief Act of 1997 or the Community Tax Relief Act of
1182000. A designated urban job tax credit area shall retain its
119designation for a period of 5 years after the date of
120designation.
121     (b)  "Eligible business" means any business entity located
122in a designated urban job tax credit area that is predominantly
123engaged in, or is headquarters for a business predominantly
124engaged in, activities usually provided for consideration by
125firms classified within the following standard industrial
126classifications: SIC 01-SIC 09 (agriculture, forestry, and
127fishing); SIC 20-SIC 39 (manufacturing); SIC 52-SIC 57 and SIC
12859 (retail); SIC 422 (public warehousing and storage); SIC 70
129(hotels and other lodging places); SIC 7391 (research and
130development); SIC 781 (motion picture production and allied
131services); SIC 7992 (public golf courses); SIC 7996 (amusement
132parks); and a targeted industry eligible for the qualified
133target industry business tax refund under s. 288.106. A call
134center or similar customer service operation that services a
135multistate market or international market is also an eligible
136business. Excluded from eligible receipts are receipts from
137retail sales, except such receipts for hotels (retail)
138classified in SIC 52-SIC 57 and SIC 59 and other lodging places
139classified in SIC 70, public golf courses classified in SIC
1407992, and amusement parks classified in SIC 7996. For purposes
141of this paragraph, the term "predominantly" means that more than
14250 percent of the business's gross receipts from all sources is
143generated by those activities usually provided for consideration
144by firms in the specified standard industrial classification.
145The determination of whether the business is located in a
146designated urban job tax credit area must be based on the date
147of application for the credit under this section. Commonly owned
148and controlled entities are to be considered a single business
149entity.
150     (c)  "Existing business" means any eligible business that
151does not meet the criteria for a new business.
152     (d)  "New business" means any eligible business first
153beginning operation on a site in a designated urban job tax
154credit area and clearly separate from any other commercial or
155business operation of the business entity within a designated
156urban job tax credit area. A business entity that operated an
157eligible business within a designated urban job tax credit area
158within the 48 months before the period provided for application
159by subsection (2) is not considered a new business.
160     (e)  "Office" means the Office of Tourism, Trade, and
161Economic Development.
162     (f)  "Qualified employee" means any employee of an eligible
163business who performs duties in connection with the operations
164of the business on a regular, full-time basis for an average of
165at least 36 hours per week for at least 3 months within the
166designated urban job tax credit area in which the eligible
167business is located. An owner or partner of the eligible
168business is not a qualified employee. The term also includes an
169employee leased from an employee leasing company licensed under
170chapter 468 if such employee has been continuously leased to the
171employer for an average of at least 36 hours per week for more
172than 6 months.
173     (g)  "Urban infill and redevelopment area" means an area or
174areas designated by a local government in which:
175     1.  Public services such as water and wastewater,
176transportation, schools, and recreation are already available or
177are scheduled to be provided in an adopted 5-year schedule of
178capital improvements.
179     2.  The area, or one or more neighborhoods within the area,
180suffers from pervasive poverty, unemployment, and general
181distress as described in s. 290.0058.
182     3.  The area exhibits a proportion of properties that are
183substandard, overcrowded, dilapidated, vacant or abandoned, or
184functionally obsolete which is higher than the average for the
185local government.
186     4.  More than 50 percent of the area is within 1/4 mile of
187a transit stop, or a sufficient number of such transit stops
188will be made available concurrent with the designation.
189     5.  The area includes or is adjacent to community
190redevelopment areas, brownfields, enterprise zones, or Main
191Street programs or has been designated by the state or Federal
192Government as an urban redevelopment, revitalization, or infill
193area under empowerment zone, enterprise community, or brownfield
194showcase community programs or similar programs.
195     (2)  A county or municipality, or a county and one or more
196municipalities together, may apply to the office for the
197designation of an area as a designated urban job tax credit area
198in accordance with subsection (3). Applications must be received
199by the office no later than April 30, 2007, and every 5 years
200thereafter.
201     (3)  In order for an area to qualify as a designated urban
202job tax credit area, the following requirements must be met:
203     (a)  The local government seeking designation must adopt a
204resolution prior to the date of application for designation
205that:
206     1.  Finds that an urban area exists in such county or
207municipality, or in both the county and one or more
208municipalities, that chronically exhibits extreme and
209unacceptable levels of poverty, unemployment, physical
210deterioration, and economic disinvestment.
211     2.  Determines that the rehabilitation, conservation, or
212redevelopment, or a combination of rehabilitation, conservation,
213or redevelopment, of such an urban area is necessary in the
214interest of the health, safety, and welfare of the residents of
215such county or municipality, or such county and one or more
216municipalities.
217     3.  Determines that the revitalization of such an urban
218area can occur if the public sector or private sector can be
219induced to invest resources in productive enterprises that build
220or rebuild the economic viability of the area.
221     (b)  The local government seeking designation demonstrates
222to the office that the area:
223     1.a.  Has at least 40 percent of its residents earning
224wages on an annual basis that are equal to or less than the
225annual wage of a person who is earning minimum wage; or
226     b.  Has more than 20 percent of its residents or families
227living below the federal standard of poverty for individuals or
228a family of four.
229     2.  Has an unemployment rate at least 3 percentage points
230higher than the state's unemployment rate.
231     3.  Has an arrest rate higher than the state's average rate
232for such crimes as drug sale, drug possession, prostitution,
233vandalism, and civil disturbances, as recorded by the total
234crime index of the Department of Law Enforcement.
235     4.a.  Has 50 percent or more of its residents who rent;
236     b.  Has property values that are within the lower 50
237percent of the county's assessed property values;
238     c.  Has more than 5 percent of its commercial buildings
239currently vacant or condemned within the previous 24 months; or
240     d.  With respect to at least 25 percent of tax or special
241assessment delinquencies, the amount of the delinquency exceeds
242the fair value of the land.
243     (c)  The selected area has a continuous boundary or
244consists of not more than three noncontiguous parcels.
245     (d)  The selected area does not exceed the following
246mileage limitation:
247     1.  For areas having a total population of 150,000 persons
248or more, the selected area does not exceed 20 square miles and
249is within 10 miles of the urban infill and redevelopment area of
250a city.
251     2.  For areas having a total population of 50,000 persons
252or more but fewer than 150,000 persons, the selected area does
253not exceed 10 square miles and is within 7.5 miles of the urban
254infill and redevelopment area of a city.
255     3.  For areas having a total population of 20,000 persons
256or more but fewer than 50,000 persons, the selected area does
257not exceed 5 square miles and is within 5 miles of the urban
258infill and redevelopment area of a city.
259     4.  For areas having a total population of fewer than
26020,000 persons, the selected area does not exceed 3 square miles
261and is within 3 miles of the urban infill and redevelopment area
262of a city.
263     (4)  A municipality, or a county and one or more
264municipalities together, may not nominate more than one urban
265area. However, any county as defined in s. 125.011(1) may not
266nominate more than three urban areas.
267     (5)  On June 30, 2007, and every 5 years thereafter, the
268office may designate no more than 30 areas that meet the
269requirements of subsection (3). If there are more than 30
270applications in any year, the office shall rank the areas by
271level of distress and designate the 30 areas with the most need.
272     (6)  A new eligible business may apply for a tax credit
273under this subsection once at any time during its first year of
274operation. A new eligible business in a designated urban job tax
275credit area that has at least 10 qualified employees on the date
276of application shall receive a $1,000 tax credit for each such
277employee.
278     (7)  An existing eligible business may apply for a tax
279credit under this subsection at any time and is entitled to such
280credit except as restricted by this subsection. An existing
281eligible business in a designated urban job tax credit area that
282on the date of application has at least five more qualified
283employees than the business had 1 year prior to the business's
284date of application shall receive a $1,000 credit for each such
285additional employee. An existing eligible business may apply for
286the credit under this subsection no more than once in any 12-
287month period. Any existing eligible business that received a
288credit under subsection (6) may not apply for the credit under
289this subsection sooner than 12 months after the application date
290for the credit under subsection (6). To be eligible for a tax
291credit under this subsection, the number of qualified employees
292employed 1 year prior to the application date must be no lower
293than the number of qualified employees on the application date
294on which a credit under this section was based for any previous
295application, including an application under subsection (6).
296     (8)  For any new eligible business receiving a credit
297pursuant to subsection (6) or any existing eligible business
298receiving a credit pursuant to subsection (7), an additional
299$500 credit shall be provided for any qualified employee who is
300a welfare transition program participant. Such employee must be
301employed on the credit application date and must have been
302employed less than 1 year. This credit shall be in addition to
303other credits pursuant to this section. Appropriate
304documentation concerning the eligibility of an employee for the
305additional credit under this subsection must be submitted as
306determined by the department.
307     (9)(a)  In order to claim the credit provided by this
308section, an eligible business must file under oath with the
309office a statement that includes the name and address of the
310eligible business and any other information that is required to
311process the application.
312     (b)  Within 30 working days after receipt of an application
313for the credit, the office shall review the application to
314determine whether it contains all the information required by
315this subsection and meets the criteria specified in this
316section. Subject to the provisions of paragraph (c), the office
317shall approve all applications that contain the information
318required by this subsection and meet the criteria specified  in
319this section as eligible to receive the credit.
320     (c)  The maximum credit amount that may be approved during
321any calendar year is $5 million. The Department of Revenue, in
322conjunction with the office, shall notify the governing bodies
323in areas designated under this section when the $5 million
324maximum amount has been reached. Applications must be considered
325for approval in the order in which they are received without
326regard to whether the credit is for a new or existing business.
327This limitation applies to the value of the credit as contained
328in approved applications. Approved credits may be taken in the
329time and manner allowed pursuant to this section.
330     (10)  If the application is insufficient to support the
331credit authorized in this section, the office shall deny the
332credit and notify the business of the denial. The business may
333reapply for the credit within 3 months after such notification.
334     (11)  If the credit provided under this section is greater
335than can be taken on a single tax return, excess amounts may be
336taken as credits on any tax return submitted within 12 months
337after the approval of the application by the department.
338     (12)  It is the responsibility of each business to
339affirmatively demonstrate to the satisfaction of the Department
340of Revenue that the business meets the requirements of this
341section.
342     (13)  Any person who fraudulently claims the credit
343provided by this section is liable for repayment of the credit
344plus a mandatory penalty of 100 percent of the credit and
345commits a misdemeanor of the second degree, punishable as
346provided in s. 775.082 or s. 775.083.
347     (14)  A corporation may take the credit under this section
348against its corporate income tax liability as provided in s.
349220.1895. However, a corporation that applies its job tax credit
350against the tax imposed by chapter 220 may not receive the
351credit provided for in this section. A credit may be taken
352against only one tax.
353     (15)  The department shall adopt rules pursuant to ss.
354120.536(1) and 120.54 governing the manner and form of
355applications for credit and may establish guidelines concerning
356the requisites for an affirmative showing of qualification for
357the credit under this section.
358     (16)  Notwithstanding subsections (6), (7), and (8), an
359eligible business located in an area designated under this
360section as of June 30, 2006, shall retain its program and tax
361credit eligibility and amount through June 30, 2012, if the
362business complies with the job creation requirements of this
363section in effect on that date. This subsection is repealed July
3641, 2012.
365     Section 3.  Section 220.1895, Florida Statutes, is amended
366to read:
367     220.1895  Rural Job Tax Credit and Designated Urban High-
368Crime Area Job Tax Credit.--There shall be allowed a credit
369against the tax imposed by this chapter amounts approved by the
370Office of Tourism, Trade, and Economic Development pursuant to
371the Rural Job Tax Credit Program in s. 212.098 and the
372Designated Urban High-Crime Area Job Tax Credit Area Program in
373s. 212.097. A corporation that uses its credit against the tax
374imposed by this chapter may not take the credit against the tax
375imposed by chapter 212. If any credit granted under this section
376is not fully used in the first year for which it becomes
377available, the unused amount may be carried forward for a period
378not to exceed 5 years. The carryover may be used in a subsequent
379year when the tax imposed by this chapter for such year exceeds
380the credit for such year under this section after applying the
381other credits and unused credit carryovers in the order provided
382in s. 220.02(8).
383     Section 4.  Subsection (2) and paragraph (j) of subsection
384(3) of section 288.99, Florida Statutes, are amended to read:
385     288.99  Certified Capital Company Act.--
386     (2)  PURPOSE.--The primary purpose of this act is to
387stimulate a substantial increase in venture capital investments
388in this state by providing an incentive for insurance companies
389to invest in certified capital companies in this state which, in
390turn, will make investments in new businesses or in expanding
391businesses, including minority-owned or minority-operated
392businesses and businesses located in a designated Front Porch
393community, enterprise zone, designated urban job tax credit
394high-crime area, rural job tax credit county, or nationally
395recognized historic district. The increase in investment capital
396flowing into new or expanding businesses is intended to
397contribute to employment growth, create jobs which exceed the
398average wage for the county in which the jobs are created, and
399expand or diversify the economic base of this state.
400     (3)  DEFINITIONS.--As used in this section, the term:
401     (j)  "Qualified business" means the Digital Divide Trust
402Fund established under the State of Florida Technology Office or
403a business that meets the following conditions as evidenced by
404documentation required by commission rule:
405     1.  The business is headquartered in this state and its
406principal business operations are located in this state or at
407least 75 percent of the employees are employed in the state.
408     2.  At the time a certified capital company makes an
409initial investment in a business, the business would qualify for
410investment under 13 C.F.R. s. 121.301(c), which is involved in
411manufacturing, processing or assembling products, conducting
412research and development, or providing services.
413     3.  At the time a certified capital company makes an
414initial investment in a business, the business certifies in an
415affidavit that:
416     a.  The business is unable to obtain conventional
417financing, which means that the business has failed in an
418attempt to obtain funding for a loan from a bank or other
419commercial lender or that the business cannot reasonably be
420expected to qualify for such financing under the standards of
421commercial lending;
422     b.  The business plan for the business projects that the
423business is reasonably expected to achieve in excess of $25
424million in sales revenue within 5 years after the initial
425investment, or the business is located in a designated Front
426Porch community, enterprise zone, designated urban job tax
427credit high crime area, rural job tax credit county, or
428nationally recognized historic district;
429     c.  The business will maintain its headquarters in this
430state for the next 10 years and any new manufacturing facility
431financed by a qualified investment will remain in this state for
432the next 10 years, or the business is located in a designated
433Front Porch community, enterprise zone, designated urban job tax
434credit high crime area, rural job tax credit county, or
435nationally recognized historic district; and
436     d.  The business has fewer than 200 employees and at least
43775 percent of the employees are employed in this state. For
438purposes of this subsection, the term also includes the Florida
439Black Business Investment Board, any entity majority owned by
440the Florida Black Business Investment Board, or any entity in
441which the Florida Black Business Investment Board holds a
442majority voting interest on the board of directors.
443     4.  The term does not include:
444     a.  Any business predominantly engaged in retail sales,
445real estate development, insurance, banking, lending, or oil and
446gas exploration.
447     b.  Any business predominantly engaged in professional
448services provided by accountants, lawyers, or physicians.
449     c.  Any company that has no historical revenues and either
450has no specific business plan or purpose or has indicated that
451its business plan is solely to engage in a merger or acquisition
452with any unidentified company or other entity.
453     d.  Any company that has a strategic plan to grow through
454the acquisition of firms with substantially similar business
455which would result in the planned net loss of Florida-based jobs
456over a 12-month period after the acquisition as determined by
457the office.
458     Section 5.  Section 290.0078, Florida Statutes, is created
459to read:
460     290.0078  Enterprise zone designation for Charlotte County
461or Charlotte County and the City of Punta Gorda.--Charlotte
462County or Charlotte County and the City of Punta Gorda may apply
463to the Office of Tourism, Trade, and Economic Development for
464designation of one enterprise zone encompassing an area not to
465exceed 10 square miles. The enterprise zone shall be located in
466an area encompassing the Charlotte County Airport Authority
467property and bounded by U.S. Highway 17 to the north and Jones
468Loop Road to the south. The application must be submitted by
469December 31, 2006, and must comply with the requirements of s.
470290.0055, with the exception of s. 290.0055(4)(c).
471Notwithstanding the provisions of s. 290.0065 limiting the total
472number of enterprise zones designated and the number of
473enterprise zones within a population category, the Office of
474Tourism, Trade, and Economic Development may designate one
475enterprise zone under this section. The Office of Tourism,
476Trade, and Economic Development shall establish the initial
477effective date of the enterprise zone designated pursuant to
478this section.
479     Section 6.  This act shall take effect July 1, 2006.


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