HB 1325

1	A bill to be entitled
2	An act relating to entertainment industry economic
3	development; amending s. 288.1254, F.S.; revising the
4	entertainment industry financial incentive program to
5	provide corporate income tax and sales and use tax credits
6	to qualified entertainment entities rather than
7	reimbursements from appropriations; revising provisions
8	relating to definitions, creation and scope, application
9	procedures, approval process, eligibility, required
10	documents, qualified and certified productions, and annual
11	reports; providing duties and responsibilities of the
12	Office of Film and Entertainment, the Office of Tourism,
13	Trade, and Economic Development, and the Department of
14	Revenue relating to the tax credits; providing criteria
15	and limitations for awards of tax credits; providing total
16	aggregate amount available for tax credits; providing for
17	uses, allocations, election, distributions, and
18	carryforward of the tax credits; providing for use of
19	consolidated returns; providing for partnership and
20	noncorporate distributions of tax credits; providing for
21	succession of tax credits; providing requirements for
22	transfer of tax credits; requiring a recipient of
23	transferred tax credits to pay a percentage of the amount
24	paid to fund specified film education grants; providing
25	priority allocation of tax credits; providing for
26	withdrawal of tax credit eligibility; establishing queues;
27	authorizing the Office of Tourism, Trade, and Economic
28	Development to adopt rules, policies, and procedures;
29	authorizing the Department of Revenue to adopt rules and
30	conduct audits; providing for revocation and forfeiture of
31	tax credits; providing liability for reimbursement of
32	certain costs and fees associated with a fraudulent claim;
33	requiring an annual report to the Governor and the
34	Legislature; providing for future repeal; creating s.
35	288.1256, F.S.; establishing the Florida Graduate Film
36	Investment Fund; requiring administration by the Office of
37	Film and Entertainment; providing for deposit of funds;
38	requiring that funds be used for certain family-friendly
39	films; amending s. 288.1252, F.S.; requiring the Florida
40	Film and Entertainment Advisory Council to advise on films
41	produced under the Florida Graduate Film Investment Fund;
42	amending s. 220.02, F.S.; including tax credits enumerated
43	in s. 288.1254, F.S., in the order of application of
44	credits against certain taxes; amending s. 213.053, F.S.;
45	authorizing the Department of Revenue to provide tax
46	credit information to the Office of Film and Entertainment
47	and the Office of Tourism, Trade, and Economic
48	Development; amending s. 212.08, F.S.; requiring
49	electronic funds transfer for the entertainment industry
50	tax credit; providing procedures; repealing s. 288.1255,
51	F.S., to remove the requirement that annual funding for
52	the entertainment industry financial incentive program be
53	subject to legislative appropriation; providing an
54	effective date.
55
56	Be It Enacted by the Legislature of the State of Florida:
57
58	Section 1.  Section 288.1254, Florida Statutes, is amended
59	to read:
60	(Substantial rewording of section. See s. 288.1254,
61	F.S., for present text.)
62	288.1254  Entertainment industry financial incentive
63	program.--
64	(1)  CREATION AND PURPOSE OF PROGRAM.--There is created
65	within the Office of Film and Entertainment an entertainment
66	industry financial incentive program. The purpose of this
67	program is to encourage the use of this state as a site for
68	filming and to develop and sustain the workforce and
69	infrastructure for film and entertainment production.
70	(2)  DEFINITIONS.--As used in this section, the term:
71	(a)  "Production" means a theatrical or direct-to-video
72	motion picture, a made-for-television motion picture, a
73	commercial, a music video, an industrial or educational film, an
74	infomercial, a documentary film, a television pilot, a
75	presentation for a television pilot, a television series,
76	including, but not limited to, a drama, a reality, a comedy, a
77	soap opera, a telenovela, a game show, miniseries production, or
78	a digital media project by the entertainment industry. One
79	season of a television series is considered one production. The
80	term "production" does not include a weather or market program,
81	a sporting event, a sports show, a gala, a production that
82	solicits funds, a home shopping program, a political program, a
83	political documentary, political advertising, a gambling-related
84	project or production, a concert production, or a local,
85	regional, or Internet-only news show, current events show, or
86	current affairs show. A production may be produced on or by
87	film, tape, or otherwise and produced by means of a motion
88	picture camera, electronic camera or device, tape device,
89	computer, any combination of the foregoing, or any other means,
90	method, or device now used or that may hereafter be adopted.
91	(b)  "Digital media project" means a production of
92	interactive entertainment, including a video game, simulation,
93	or animation, including a production intended for Internet or
94	wireless distribution, that is produced for commercial or
95	education distribution. The term "digital media project" does
96	not include a production deemed by the Office of Film and
97	Entertainment to contain obscene content as defined by the
98	United States Supreme Court.
99	(c)  "Production expenditures" means the costs of tangible
100	and intangible property used and services performed primarily
101	and customarily in the production, including pre-production and
102	post-production, excluding development and distribution costs.
103	Production expenditures generally include, but are not limited
104	to:
105	1.  Wages, salaries, or other compensation, including
106	amounts paid through payroll service companies, for technical
107	and production crews, directors, producers, and performers.
108	2.  Expenditures for sound stages, backlots, production
109	editing, digital effects, sound recordings, sets, and set
110	construction.
111	3.  Expenditures for rental equipment, including, but not
112	limited to, cameras and grip or electrical equipment.
113	4.  Expenditures for meals, travel, and accommodations.
114	(d)  "Qualified expenditures" means production expenditures
115	incurred in this state by a qualified production for the
116	following:
117	1.  Goods purchased or leased from, or services provided
118	by, a Florida vendor or supplier who is registered with the
119	Department of State or the Department of Revenue and doing
120	business in this state.
121	2.  Payments to residents of this state in the form of
122	salary, wages, or other compensation up to a maximum of $400,000
123	per resident.
124
125	For a qualified production involving an event, such as an awards
126	show, qualified expenditures exclude expenditures solely
127	associated with the event itself and not directly required by
128	the production. A qualified production's expenditures made prior
129	to certification shall not be considered qualified expenditures,
130	with the exception of those incurred by a commercial, a music
131	video, or the pickup of additional episodes of a television
132	series within a single season.
133	(e)  "Qualified production" means a production in this
134	state that meets the requirements of this section and the
135	minimum qualified expenditures and requirements of its
136	appropriate queue. A qualified production's combined production
137	cast and below-the-line production crew positions must be filled
138	by at least 50 percent Florida residents or students enrolled
139	full-time in a film and entertainment-related course of study at
140	a Florida institution of higher education, or a combination
141	thereof. For purposes of this section, proof of Florida
142	residency is a valid Florida driver's license or other state-
143	issued Florida identification confirming residency in the state.
144	Productions that are deemed by the Office of Film and
145	Entertainment to contain obscene content as defined by the
146	United States Supreme Court are not qualified productions.
147	(f)  "Certified production" means a qualified production
148	that has tax credits allocated to it based on its estimated
149	qualified expenditures, up to its maximum certified amount of
150	tax credits, by the Office of Tourism, Trade, and Economic
151	Development. A qualified production is not a certified
152	production if its first day of principal photography in the
153	state occurs before it is certified by the Office of Tourism,
154	Trade, and Economic Development, unless it is a previously
155	certified production spanning fiscal years and required to make
156	an application for continuing the same production in the
157	subsequent year.
158	(g)  "Qualified production company" means a corporation,
159	limited liability company, partnership, or other legal entity
160	engaged in producing a qualified production.
161	(h)  "Off-season certified production" means a certified
162	production, other than a digital media project or an animated
163	production, that films 75 percent or more of its principal
164	photography days from June 1 through November 30.
165	(3)  APPLICATION PROCEDURE; APPROVAL PROCESS.--
166	(a)  Program application.--A qualified production company
167	in this state producing a qualified production may submit a
168	program application to the Office of Film and Entertainment for
169	the purpose of determining qualification for an award of tax
170	credits authorized by this section. The office must be provided
171	information required to determine whether the production is a
172	qualified production and to determine the qualified expenditures
173	and other information necessary for the office to determine
174	eligibility for the tax credits.
175	(b)  Required documentation.--The Office of Film and
176	Entertainment shall develop a program application form for use
177	in qualifying an applicant as a qualified production. The
178	program application form for qualifying an applicant as a
179	qualified production must include, but need not be limited to,
180	production-related information on Florida resident employment, a
181	detailed budget of planned qualified expenditures, and a signed
182	affirmation from the applicant that the information on the
183	program application form has been verified and is correct. The
184	program application form shall be distributed to applicants by
185	the Office of Film and Entertainment or by local film
186	commissions.
187	(c)  Application process.--The Office of Film and
188	Entertainment shall establish a process by which a program
189	application is accepted and reviewed and by which tax credit
190	eligibility and amount are determined. The Office of Film and
191	Entertainment may request assistance from a duly appointed local
192	film commission in determining qualification for the tax credit
193	and compliance with the provisions of this section.
194	(d)  Certification.--Within 10 business days after receipt
195	of a program application, the Office of Film and Entertainment
196	shall review the application. Upon its determination that the
197	program application contains all the information required by
198	this subsection and meets the criteria set out in this section,
199	the Office of Film and Entertainment shall qualify the applicant
200	and recommend to the Office of Tourism, Trade, and Economic
201	Development that the applicant be certified for the tax credit
202	and suggest a maximum tax credit award amount. Within 5 business
203	days after its receipt of the recommendation, the Office of
204	Tourism, Trade, and Economic Development shall reject or shall
205	certify the maximum recommended tax credit award, if any, to the
206	applicant and to the executive director of the Department of
207	Revenue.
208	(e)  Grounds for denial.--The Office of Film and
209	Entertainment shall deny an application if it determines that:
210	1.  The application is not complete or does not meet the
211	requirements of this section; or
212	2.  The tax credit sought does not meet the requirements of
213	this section.
214	(f)  Verification of actual qualified expenditures.--The
215	Office of Film and Entertainment shall develop a process by
216	which a certified production shall submit, in a timely manner
217	after production ends and after making all of its qualified
218	expenditures, data substantiating each qualified expenditure to
219	an independent Florida-licensed certified public accountant. The
220	accountant shall conduct an audit, at the certified production's
221	expense, to substantiate each qualified expenditure and shall
222	submit the results and all substantiating data to the Office of
223	Film and Entertainment, which shall review and report to the
224	Office of Tourism, Trade, and Economic Development the final
225	verified amount of actual qualified expenditures made by the
226	certified production. The Office of Tourism, Trade, and Economic
227	Development shall then notify the executive director of the
228	Department of Revenue that the certified production has met the
229	requirements of the incentive program and shall recommend the
230	final amount of the tax credit award.
231	(g)  Promoting Florida.--The Office of Film and
232	Entertainment shall ensure that, as a condition of receiving a
233	tax credit under this section, appropriate marketing materials,
234	including, but not limited to, promotions of this state as a
235	tourist or film and entertainment production destination, are
236	included in any production when appropriate. The Office of Film
237	and Entertainment may consult with promotional agencies and
238	other appropriate entities for the development and
239	implementation of marketing materials.
240	(4)  TAX CREDIT ELIGIBILITY; ELECTION AND DISTRIBUTION;
241	CARRYFORWARD; CONSOLIDATED RETURNS; PARTNERSHIP AND NONCORPORATE
242	DISTRIBUTIONS; MERGERS OR ACQUISITIONS.--
243	(a)  Tax credit authorization.--For fiscal years beginning
244	on or after July 1, 2007, and ending June 30, 2010, qualified
245	production is eligible for a tax credit against taxes due under
246	chapter 220 or taxes collected or accrued under chapter 212.
247	(b)  Total aggregate tax credit.--The aggregate amount of
248	the tax credits allowed under this section in any state fiscal
249	year is a minimum of $75 million.
250	(c)  Election and distribution of tax credits.--A certified
251	production company receiving a tax credit award under this
252	section shall, at the time the credit is awarded by the
253	Department of Revenue after production is completed and all
254	requirements to receive a credit award have been met, make an
255	irrevocable election to apply the credit against taxes due under
256	chapter 220, against taxes collected or accrued under chapter
257	212, or against a stated combination of the two taxes. The
258	election shall be binding upon any distributee, successor,
259	transferee, or purchaser.
260	(d)  Tax credit carryforward.--If the certified production
261	company cannot use the entire tax credit in the taxable year or
262	reporting period in which the credit is awarded because of
263	insufficient tax liability on the part of the certified
264	production, any excess amount may be carried forward to a
265	succeeding taxable year or reporting period. A tax credit
266	awarded under this section and applied against taxes imposed
267	under chapter 212 or chapter 220 may be carried forward only for
268	a maximum of 5 taxable years following the taxable year in which
269	the credit was awarded, after which period the credit expires
270	and may not be used.
271	(e)  Consolidated returns.--A certified production company
272	that files a Florida consolidated return as a member of an
273	affiliated group under s. 220.131(1) may be allowed the credit
274	on a consolidated return basis up to the amount of the tax
275	imposed upon the consolidated group under chapter 220.
276	(f)  Partnership and noncorporate distributions.--A
277	qualified production company that is not a corporation as
278	defined in s. 220.03 may elect to distribute tax credits awarded
279	under this section to its partners or members in proportion to
280	their respective distributive income or loss in the taxable
281	fiscal year in which the tax credits were awarded.
282	(g)  Mergers or acquisitions.--Tax credits available under
283	this section to a certified production company may succeed to a
284	surviving or acquiring entity subject to the same conditions and
285	limitations as described in this section; however, they may not
286	be transferred again by the surviving or acquiring entity.
287	(5)  TRANSFER OF TAX CREDITS.--
288	(a)  Authorization.--Upon application to the Office of Film
289	and Entertainment and approval by the Office of Tourism, Trade,
290	and Economic Development, a certified production company may
291	elect to transfer, in whole or in part, any unused credit amount
292	granted under this section. An election to transfer any unused
293	tax credit amount under chapter 212 must be made at the time the
294	tax credit is awarded. An election to transfer any unused tax
295	credit amount under chapter 220 must be made no later than 5
296	years from the date the credit was awarded, after which period
297	the credit expires and may not be used. The Office of Tourism,
298	Trade, and Economic Development shall notify the Department of
299	Revenue of the election and transfer.
300	(b)  Number of transfers permitted.--A certified production
301	company that has elected to apply a credit amount against taxes
302	remitted under chapter 212 is permitted a one-time transfer of
303	that amount to one transferee. A certified production company
304	that has elected to apply a credit amount against taxes due
305	under chapter 220 is permitted a one-time transfer of that
306	amount to no more than three transferees, and such transfers
307	shall occur in the same taxable year.
308	(c)  Minimum consideration.--The transfer of any amount of
309	the tax credit shall not be exchanged for consideration received
310	by the certified production of less than 75 percent of the
311	transferred amount of the tax credit.
312	(d)  Transferee rights and limitations.--The transferee is
313	subject to the same rights and limitations as the certified
314	production company awarded the tax credit, except that the
315	transferee may not sell or otherwise transfer the tax credit.
316	(e)  Film education.--
317	1.  A recipient of any transferred tax credit under this
318	subsection shall pay an amount equal to 5 percent of the total
319	amount paid for the tax credit as a film education grant,
320	divided equally between the following two programs:
321	a.  One-half of the total film education grant shall be
322	paid into the Grants and Donations Trust Fund under s.
323	14.2015(2)(f) administered by the Office of Tourism, Trade, and
324	Economic Development and applied by the Office of Film and
325	Entertainment for the purpose described in s. 288.1256.
326	b.  One-half of the total film education grant shall be
327	paid directly to an Office of Film and Entertainment-approved
328	film program at a Florida institution of higher education to be
329	applied as a grant toward production costs for a student-made
330	production.
331	2.  The Office of Film and Entertainment shall ensure that
332	the transferee has made full cash payment of the film education
333	grant before the Office of Tourism, Trade, and Economic
334	Development approves the tax credit transfer.
335	3.  An affiliated recipient company of a transferred tax
336	credit by a certified production shall not be subject to this
337	subsection, nor shall certified productions in the independent
338	Florida filmmaker queue.
339	(f)  Rulemaking.--The Department of Revenue may adopt rules
340	pursuant to ss. 120.536(1) and 120.54 to administer this
341	subsection, as provided in subsection (7).
342	(6)  PRIORITY ALLOCATION OF TAX CREDITS; ELIGIBILITY
343	WITHDRAWAL; QUEUES.--
344	(a)  Tax credit priority.--Eligibility of a qualified
345	production for a tax credit award shall be determined on a
346	first-come, first-served basis within its appropriate queue. A
347	qualified production shall be placed into the appropriate queue
348	and subject to the requirements of that queue.
349	(b)  Withdrawal of tax credit eligibility.--A qualified or
350	certified production shall continue on a reasonable schedule,
351	which means opening its production office in the state no sooner
352	than 30 calendar days before and no later than 30 days after the
353	date provided in the production's program application, and
354	beginning principal photography in the state no sooner than 30
355	calendar days before and no later than 30 days after the date
356	provided in the production's program application. The Office of
357	Tourism, Trade, and Economic Development shall withdraw the
358	eligibility of a qualified or certified production that does not
359	continue on a reasonable schedule and recertify the tax credits
360	to the next qualified or certified production or productions in
361	the respective queue that have not been certified for their full
362	maximum award and have not started principal photography before
363	the tax credits become available.
364	(c)  Queues.--
365	1.  General production queue.--
366	a.  A qualified production, excluding commercials, music
367	videos, and digital media projects, that demonstrates a minimum
368	of $625,000 in total qualified expenditures shall be eligible
369	for tax credits equal to 15 percent of its actual qualified
370	expenditures up to a maximum of $8 million. A qualified
371	production spanning state fiscal years may combine qualified
372	expenditures from both state fiscal years to satisfy the
373	threshold.
374	b.  A qualified production company that produces national
375	or regional commercials, music videos, or both may be eligible
376	for a tax credit award if it demonstrates a minimum of $100,000
377	in qualified expenditures per national or regional commercial or
378	music video and exceeds a combined threshold of $500,000 after
379	combining actual qualified expenditures from qualified
380	commercials, music videos, or both during a single state fiscal
381	year. The maximum tax credit award shall be equal to 15 percent
382	of its actual qualified expenditures up to a maximum of
383	$500,000. After a qualified production company that produces
384	commercials, music videos, or both reaches the threshold of
385	$500,000, it shall be eligible to apply for certification for a
386	tax credit award.
387	c.  At least 85 percent of all tax credits available under
388	this section in any state fiscal year shall be dedicated to this
389	queue.
390	d.  An off-season certified production in this queue shall
391	be eligible for an additional 5-percent tax credit on actual
392	qualified expenditures. An off-season certified production that
393	does not complete 75 percent of principal photography as a
394	result of a hurricane or tropical storm disruption shall not be
395	disqualified from eligibility for the additional 5-percent
396	credit as a result of the disruption.
397	e.  If the total amount of tax credits certified to this
398	queue exceeds the aggregate amount of the tax credits authorized
399	annually, such excess shall be treated as having been applied
400	for on the first day of the next state fiscal year in which tax
401	credits remain available for allocation to this queue.
402	f.  A certified production within this queue that spans
403	state fiscal years shall have all qualified expenditures
404	certified for the state fiscal year in which the last actual
405	qualified expenditure is anticipated to be made.
406	g.  A qualified production in this queue shall make a good
407	faith effort to utilize Florida's existing infrastructure of
408	equipment providers, including camera gear, grip and lighting
409	equipment, vehicle providers, and post-production services when
410	available in-state.
411	2.  Independent Florida filmmaker queue.--An independent
412	Florida film that meets the criteria of this queue and
413	demonstrates a minimum of $100,000, but not more than $625,000,
414	in total qualified expenditures shall be eligible for tax
415	credits equal to 15 percent of its actual qualified
416	expenditures. Five percent of all tax credits available under
417	this section in any state fiscal year shall be dedicated to this
418	queue, but not more than $2 million in any state fiscal year. To
419	qualify for this queue, a qualified production must:
420	a.  Be planned as a feature film or documentary of no less
421	than 70 minutes in length.
422	b.  Provide evidence of 50 percent of the financing for its
423	total budget in an escrow account or other form dedicated to the
424	production.
425	c.  Do all major post-production in this state.
426	d.  Employ Florida workers in at least six of the following
427	eight key positions:
428	(I)  Writer.
429	(II)  Director.
430	(III)  Producer.
431	(IV)  Director of Photography.
432	(V)  Star or one of the lead actors.
433	(VI)  Unit Production Manager.
434	(VII)  Editor.
435	(VIII)  Production Designer.
436
437	For purposes of this sub-subparagraph, a "Florida worker" means
438	a person who has been a resident of this state for at least 1
439	year prior to a production's application or a person who is
440	attending a Florida film school or Florida college, university,
441	or community college full-time or has graduated from such
442	school, college, university, or community college within 5 years
443	prior to the production's application.
444	3.  Digital media projects queue.--A qualified production
445	that is a digital media project that demonstrates a minimum of
446	$300,000 in total qualified expenditures shall be eligible for a
447	tax credit equal to 10 percent of its actual qualified
448	expenditures up to a maximum of $1 million. Ten percent of all
449	tax credits available under this section in any state fiscal
450	year shall be dedicated to this queue.
451	a.  For purposes of this subparagraph, "qualified
452	expenditures" are the wages or salaries paid to Florida resident
453	labor working on a single qualified digital media project, up to
454	a maximum of $200,000 in wages or salaries paid per resident of
455	this state.
456	b.  A qualified production company producing digital media
457	projects may not qualify for more than three projects in any one
458	fiscal year. Projects that extend beyond a fiscal year must
459	reapply each fiscal year in order to be eligible for a tax
460	credit award for that year.
461	(7)  RULES, POLICIES, AND PROCEDURES.--
462	(a)  The Office of Tourism, Trade, and Economic Development
463	may adopt rules pursuant to ss. 120.536(1) and 120.54 and
464	develop policies and procedures to implement and administer this
465	section, including, but not limited to, rules specifying
466	requirements for the application and approval process, records
467	required for substantiation for tax credits, procedures for
468	making the election in paragraph (4)(c), and the manner and form
469	of documentation required to claim tax credits awarded or
470	transferred under this section, determination of, qualification
471	for, and certification for tax credits, implementation of the
472	Florida Graduate Film Investment Fund in s. 288.1256, and
473	marketing requirements for tax credit recipients.
474	(b)  The Department of Revenue may adopt rules pursuant to
475	ss. 120.536(1) and 120.54 to administer this section, including
476	rules governing the examination and audit procedures required to
477	administer this section and the manner and form of documentation
478	required to claim tax credits awarded or transferred under this
479	section.
480	(8)  AUDIT AUTHORITY; REVOCATION AND FORFEITURE OF TAX
481	CREDITS; FRAUDULENT CLAIMS.--
482	(a)  Audit authority.--The Department of Revenue may
483	conduct examinations and audits as provided in s. 213.34 to
484	verify that tax credits under this section have been received,
485	transferred, and applied according to the requirements of this
486	section. This information is subject to the confidentiality
487	requirements of chapter 213. If the Department of Revenue
488	determines that tax credits have not been received, transferred,
489	or applied as required by this section, it may, in addition to
490	the remedies provided in this subsection, pursue recovery of
491	such funds pursuant to the laws and rules governing the
492	assessment of taxes.
493	(b)  Revocation of tax credits.--The Office of Tourism,
494	Trade, and Economic Development may revoke or modify any written
495	decision qualifying, certifying, or otherwise granting
496	eligibility for tax credits under this section if it is
497	discovered that the tax credit applicant submitted any false
498	statement, representation, or certification in any application,
499	record, report, plan, or other document filed in an attempt to
500	receive tax credits under this section. The Office of Film and
501	Entertainment shall immediately notify the Department of Revenue
502	of any revoked or modified orders affecting previously granted
503	tax credits. Additionally, the taxpayer must notify the
504	Department of Revenue of any change in its tax credit claimed.
505	(c)  Forfeiture of tax credits.--A determination by the
506	Department of Revenue, as a result of an audit or examination by
507	the Department of Revenue or from information received from the
508	Office of Film and Entertainment, that a taxpayer received tax
509	credits pursuant to this section to which the taxpayer was not
510	entitled is grounds for forfeiture of previously claimed and
511	received tax credits. The taxpayer is responsible for returning
512	forfeited tax credits to the Department of Revenue, and such
513	funds shall be paid into the General Revenue Fund of the state.
514	In the event the credit provided for under this section is
515	reduced as a result of an examination or audit by the Department
516	of Revenue, the tax deficiency shall be recovered from the first
517	entity or the surviving or acquiring entity to have claimed the
518	credit up to the amount of the credit taken. Any subsequent
519	deficiencies shall be assessed against any entity acquiring and
520	claiming the credit or, in the case of multiple succeeding
521	entities, in the order of tax credit succession.
522	(d)  Fraudulent claims.--Any applicant who submits
523	information under this section that includes fraudulent
524	information is liable for reimbursement of the reasonable costs
525	and fees associated with the review, processing, investigation,
526	and prosecution of the fraudulent claim. An eligible entity,
527	qualified production company, or certified production that
528	obtains a credit payment under this section through a claim that
529	is fraudulent is liable for reimbursement of the credit amount
530	claimed plus a penalty in an amount double the credit amount
531	claimed and reimbursement of reasonable costs, which penalty is
532	in addition to any criminal penalty to which the eligible
533	entity, qualified production company, or certified production is
534	liable for the same acts. The entity or company is also liable
535	for costs and fees incurred by the state in investigating and
536	prosecuting the fraudulent claim.
537	(9)  ANNUAL REPORT.--The Office of Film and Entertainment
538	shall provide an annual report for the previous fiscal year, due
539	October 1, to the Governor, the President of the Senate, and the
540	Speaker of the House of Representatives outlining the return on
541	investment to the state on funds expended pursuant to this
542	section.
543	(10)  REPEAL.--This section is repealed July 1, 2010,
544	except that the tax credit carryforward provided in this section
545	shall continue to be valid for the period specified.
546	Section 2.  Section 288.1256, Florida Statutes, is created
547	to read:
548	288.1256  Florida Graduate Film Investment Fund.--
549	(1)  The Office of Film and Entertainment shall create and
550	administer a program, using moneys deposited into the Office of
551	Tourism, Trade, and Economic Development's Grants and Donations
552	Trust Fund pursuant to s. 288.1254(5)(e), to award either a
553	grant or a loan guarantee for films that are:
554	(a)  Written, produced, and directed by Florida residents
555	who are graduates of an Office of Film and Entertainment
556	approved film program at a Florida institution of higher
557	education; and
558	(b)  Determined by the Commissioner of Film and
559	Entertainment, with the advice of the Florida Film and
560	Entertainment Advisory Council, to be family friendly based on
561	the review of the script and a personal interview with the
562	director.
563	(2)  Films that are deemed by the Office of Film and
564	Entertainment to contain obscene content as defined by the
565	United States Supreme Court are not eligible for this program.
566	Section 3.  Paragraph (j) is added to subsection (5) of
567	section 288.1252, Florida Statutes, to read:
568	288.1252  Florida Film and Entertainment Advisory Council;
569	creation; purpose; membership; powers and duties.--
570	(5)  POWERS AND DUTIES.--The Florida Film and Entertainment
571	Advisory Council shall have all the powers necessary or
572	convenient to carry out and effectuate the purposes and
573	provisions of this act, including, but not limited to, the power
574	to:
575	(j)  Advise whether a film produced under s. 288.1256 meets
576	the criteria delineated in that section.
577	Section 4.  Subsection (8) of section 220.02, Florida
578	Statutes, is amended to read:
579	220.02  Legislative intent.--
580	(8)  It is the intent of the Legislature that credits
581	against either the corporate income tax or the franchise tax be
582	applied in the following order: those enumerated in s. 631.828,
583	those enumerated in s. 220.191, those enumerated in s. 220.181,
584	those enumerated in s. 220.183, those enumerated in s. 220.182,
585	those enumerated in s. 220.1895, those enumerated in s. 221.02,
586	those enumerated in s. 220.184, those enumerated in s. 220.186,
587	those enumerated in s. 220.1845, those enumerated in s. 220.19,
588	those enumerated in s. 220.185, those enumerated in s. 220.187,
589	those enumerated in s. 220.192, and those enumerated in s.
590	220.193, and those enumerated in s. 288.1254.
591	Section 5.  Paragraph (z) is added to subsection (8) of
592	section 213.053, Florida Statutes, to read:
593	213.053  Confidentiality and information sharing.--
594	(8)  Notwithstanding any other provision of this section,
595	the department may provide:
596	(z)  Information relative to tax credits taken under s.
597	288.1254 to the Office of Film and Entertainment and the Office
598	of Tourism, Trade, and Economic Development.
599
600	Disclosure of information under this subsection shall be
601	pursuant to a written agreement between the executive director
602	and the agency. Such agencies, governmental or nongovernmental,
603	shall be bound by the same requirements of confidentiality as
604	the Department of Revenue. Breach of confidentiality is a
605	misdemeanor of the first degree, punishable as provided by s.
606	775.082 or s. 775.083.
607	Section 6.  Paragraph (q) is added to subsection (5) of
608	section 212.08, Florida Statutes, to read:
609	212.08  Sales, rental, use, consumption, distribution, and
610	storage tax; specified exemptions.--The sale at retail, the
611	rental, the use, the consumption, the distribution, and the
612	storage to be used or consumed in this state of the following
613	are hereby specifically exempt from the tax imposed by this
614	chapter.
615	(5)  EXEMPTIONS; ACCOUNT OF USE.--
616	(q)  Entertainment industry tax credit; requirement for
617	electronic funds transfer.--
618	1.  For the fiscal years beginning July 1, 2007, and ending
619	June 30, 2010, a qualified production, as defined in s.
620	288.1254(2)(e), is eligible for tax credits against its state
621	sales and use tax liabilities as provided in s. 288.1254.
622	2.  The credit shall be deducted from any sales and use tax
623	remitted by the dealer to the department by electronic funds
624	transfer and can only be deducted on a sales and use tax return
625	initiated through electronic data interchange. The dealer shall
626	separately state the credit on the electronic return. The net
627	amount of tax due and payable must be remitted by electronic
628	funds transfer. If the credit for the qualified expenditures is
629	larger than the amount owed on the sales and use tax return, the
630	amount of the credit may be carried forward to a succeeding
631	reporting period. A dealer may only obtain a credit using the
632	method described in this subparagraph. A dealer is not
633	authorized to obtain a credit by applying for a refund.
634	Section 7.  Section 288.1255, Florida Statutes, is
635	repealed.
636	Section 8.  This act shall take effect July 1, 2007.

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