| 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 a |
| 16 | total 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 purchaser 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) "Certified production" means a qualified production |
| 72 | that has tax credits allocated to it based on its estimated |
| 73 | qualified expenditures, up to its maximum certified amount of |
| 74 | tax credits, by the Office of Tourism, Trade, and Economic |
| 75 | Development. A qualified production is not a certified |
| 76 | production if its first day of principal photography in the |
| 77 | state occurs before it is certified by the Office of Tourism, |
| 78 | Trade, and Economic Development, unless it is a previously |
| 79 | certified production spanning fiscal years and required to make |
| 80 | an application for continuing the same production in the |
| 81 | subsequent year. |
| 82 | (b) "Digital media project" means a production of |
| 83 | interactive entertainment, including a video game, simulation, |
| 84 | or animation, including a production intended for Internet or |
| 85 | wireless distribution, that is produced for commercial or |
| 86 | educational distribution. The term "digital media project" does |
| 87 | not include a production deemed by the Office of Film and |
| 88 | Entertainment to contain obscene content as defined in s. |
| 89 | 847.001(10). |
| 90 | (c) "High-impact television series" means a production |
| 91 | created to run multiple production seasons with an estimated |
| 92 | order of at least seven episodes per season and qualified |
| 93 | expenditures of at least $625,000 per episode. |
| 94 | (d) "Off-season certified production" means a certified |
| 95 | production, other than a digital media project or an animated |
| 96 | production, that films 75 percent or more of its principal |
| 97 | photography days from June 1 through November 30. |
| 98 | (e) "Production" means a theatrical or direct-to-video |
| 99 | motion picture, a made-for-television motion picture, a |
| 100 | commercial, a music video, an industrial or educational film, an |
| 101 | infomercial, a documentary film, a television pilot, a |
| 102 | presentation for a television pilot, a television series, |
| 103 | including, but not limited to, a drama, a reality, a comedy, a |
| 104 | soap opera, a telenovela, a game show, miniseries production, or |
| 105 | a digital media project by the entertainment industry. One |
| 106 | season of a television series is considered one production. The |
| 107 | term "production" does not include a weather or market program, |
| 108 | a sporting event, a sports show, a gala, a production that |
| 109 | solicits funds, a home shopping program, a political program, a |
| 110 | political documentary, political advertising, a gambling-related |
| 111 | project or production, a concert production, or a local, |
| 112 | regional, or Internet-only news show, current events show, or |
| 113 | current affairs show. A production may be produced on or by |
| 114 | film, tape, or otherwise and produced by means of a motion |
| 115 | picture camera, electronic camera or device, tape device, |
| 116 | computer, any combination of the foregoing, or any other means, |
| 117 | method, or device now used or that may hereafter be adopted. |
| 118 | (f) "Production expenditures" means the costs of tangible |
| 119 | and intangible property used and services performed primarily |
| 120 | and customarily in the production, including pre-production and |
| 121 | post-production, excluding development, marketing, and |
| 122 | distribution costs. Production expenditures generally include, |
| 123 | but are not limited to: |
| 124 | 1. Wages, salaries, or other compensation, including |
| 125 | amounts paid through payroll service companies, for technical |
| 126 | and production crews, directors, producers, and performers. |
| 127 | 2. Expenditures for sound stages, backlots, production |
| 128 | editing, digital effects, sound recordings, sets, and set |
| 129 | construction. |
| 130 | 3. Expenditures for rental equipment, including, but not |
| 131 | limited to, cameras and grip or electrical equipment. |
| 132 | 4. Expenditures for meals, travel, and accommodations. |
| 133 | (g) "Qualified expenditures" means production expenditures |
| 134 | incurred in this state by a qualified production for the |
| 135 | following: |
| 136 | 1. Goods purchased or leased from, or services provided |
| 137 | by, a Florida vendor or supplier who is registered with the |
| 138 | Department of State or the Department of Revenue and doing |
| 139 | business in this state. |
| 140 | 2. Payments to residents of this state in the form of |
| 141 | salary, wages, or other compensation up to a maximum of $400,000 |
| 142 | per resident for the general production queue and the |
| 143 | independent Florida filmmaker queue and up to a maximum of |
| 144 | $200,000 for the digital media queue. |
| 145 |
|
| 146 | For a qualified production involving an event, such as an awards |
| 147 | show, qualified expenditures exclude expenditures solely |
| 148 | associated with the event itself and not directly required by |
| 149 | the production. A qualified production's expenditures made prior |
| 150 | to certification shall not be considered qualified expenditures, |
| 151 | with the exception of those incurred by a commercial, a music |
| 152 | video, or the pickup of additional episodes of a television |
| 153 | series within a single season. |
| 154 | (h) "Qualified production" means a production in this |
| 155 | state that meets the requirements of this section and the |
| 156 | minimum qualified expenditures and requirements of its |
| 157 | appropriate queue. A qualified production's combined production |
| 158 | cast and below-the-line production crew positions must be filled |
| 159 | by at least 50 percent Florida residents or students enrolled |
| 160 | full-time in a film and entertainment-related course of study at |
| 161 | a Florida institution of higher education, or a combination |
| 162 | thereof. For purposes of this section, proof of Florida |
| 163 | residency is a valid Florida driver's license or other state- |
| 164 | issued Florida identification confirming residency in the state. |
| 165 | Productions that are deemed by the Office of Film and |
| 166 | Entertainment to contain obscene content as defined in s. |
| 167 | 847.001(10) are not qualified productions. |
| 168 | (i) "Qualified production company" means a corporation, |
| 169 | limited liability company, partnership, or other legal entity |
| 170 | engaged in producing a qualified production. |
| 171 | (3) APPLICATION PROCEDURE; APPROVAL PROCESS.-- |
| 172 | (a) Program application.--A qualified production company |
| 173 | in this state producing a qualified production may submit a |
| 174 | program application to the Office of Film and Entertainment for |
| 175 | the purpose of determining qualification for an award of tax |
| 176 | credits authorized by this section no earlier than 1 year before |
| 177 | the anticipated production start date. The office must be |
| 178 | provided information required to determine whether the |
| 179 | production is a qualified production and to determine the |
| 180 | qualified expenditures and other information necessary for the |
| 181 | office to determine eligibility for the tax credits. |
| 182 | (b) Required documentation.--The Office of Film and |
| 183 | Entertainment shall develop a program application form for use |
| 184 | in qualifying an applicant as a qualified production. The |
| 185 | program application form for qualifying an applicant as a |
| 186 | qualified production must include, but need not be limited to, |
| 187 | production-related information on Florida resident employment, a |
| 188 | detailed budget of planned qualified expenditures, and a signed |
| 189 | affirmation from the applicant that the information on the |
| 190 | program application form has been verified and is correct. The |
| 191 | program application form shall be distributed to applicants by |
| 192 | the Office of Film and Entertainment or by local film |
| 193 | commissions. |
| 194 | (c) Application process.--The Office of Film and |
| 195 | Entertainment shall establish a process by which a program |
| 196 | application is accepted and reviewed and by which tax credit |
| 197 | eligibility and amount are determined. The Office of Film and |
| 198 | Entertainment may request assistance from a duly appointed local |
| 199 | film commission in determining qualification for the tax credit |
| 200 | and compliance with the provisions of this section. |
| 201 | (d) Certification.--Within 10 business days after receipt |
| 202 | of a program application, the Office of Film and Entertainment |
| 203 | shall review the application and upon its determination that the |
| 204 | program application contains all the information required by |
| 205 | this subsection and meets the criteria set out in this section, |
| 206 | the Office of Film and Entertainment shall qualify the applicant |
| 207 | and recommend to the Office of Tourism, Trade, and Economic |
| 208 | Development that the applicant be certified for the tax credit |
| 209 | and suggest a maximum tax credit award amount. Within 5 business |
| 210 | days after its receipt of the recommendation, the Office of |
| 211 | Tourism, Trade, and Economic Development shall reject or shall |
| 212 | certify the maximum recommended tax credit award, if any, to the |
| 213 | applicant and to the executive director of the Department of |
| 214 | Revenue. |
| 215 | (e) Grounds for denial.--The Office of Film and |
| 216 | Entertainment shall deny an application if it determines that: |
| 217 | 1. The application is not complete or does not meet the |
| 218 | requirements of this section; or |
| 219 | 2. The tax credit sought does not meet the requirements of |
| 220 | this section. |
| 221 | (f) Verification of actual qualified expenditures.--The |
| 222 | Office of Film and Entertainment shall develop a process by |
| 223 | which a certified production shall submit, in a timely manner |
| 224 | after production ends and after making all of its qualified |
| 225 | expenditures, data substantiating each qualified expenditure to |
| 226 | an independent Florida-licensed certified public accountant. The |
| 227 | accountant shall conduct an audit, at the certified production's |
| 228 | expense, to substantiate each qualified expenditure and shall |
| 229 | submit the results and all substantiating data to the Office of |
| 230 | Film and Entertainment, which shall review and report to the |
| 231 | Office of Tourism, Trade, and Economic Development the final |
| 232 | verified amount of actual qualified expenditures made by the |
| 233 | certified production. The Office of Tourism, Trade, and Economic |
| 234 | Development shall then notify the executive director of the |
| 235 | Department of Revenue that the certified production has met the |
| 236 | requirements of the incentive program and shall approve the |
| 237 | final amount of the tax credit award. The Office of Tourism, |
| 238 | Trade, and Economic Development shall award all tax credits for |
| 239 | the previous fiscal year by September 30. |
| 240 | (g) Promoting Florida.--The Office of Film and |
| 241 | Entertainment shall ensure that, as a condition of receiving a |
| 242 | tax credit under this section, marketing materials promoting |
| 243 | this state as a tourist destination or film and entertainment |
| 244 | production destination are included, when appropriate, at no |
| 245 | cost to the state, which shall include, at a minimum, placement |
| 246 | in the end credits of a Filmed in Florida logo, the look and |
| 247 | content of which shall be developed and supplied by the Office |
| 248 | of Film and Entertainment, with size and placement commensurate |
| 249 | to other logos included in the end credits. If no logos are |
| 250 | used, the end credits shall include "Filmed in Florida utilizing |
| 251 | Florida's Entertainment Industry Financial Incentive" or a |
| 252 | similar statement preapproved by the Office of Film and |
| 253 | Entertainment. |
| 254 | (4) TAX CREDIT ELIGIBILITY; ELECTION AND DISTRIBUTION; |
| 255 | CARRYFORWARD; CONSOLIDATED RETURNS; PARTNERSHIP AND NONCORPORATE |
| 256 | DISTRIBUTIONS; MERGERS OR ACQUISITIONS.-- |
| 257 | (a) Tax credit authorization.--For fiscal years beginning |
| 258 | on or after July 1, 2007, and ending June 30, 2010, a qualified |
| 259 | production is eligible for a tax credit against taxes due under |
| 260 | chapter 220 or taxes collected or accrued under chapter 212. |
| 261 | (b) Total tax credit.--The total amount of tax credits |
| 262 | allowed under this section is $75 million. The tax credits |
| 263 | available for each fiscal year shall be as follows: 40 percent |
| 264 | of the total for fiscal year 2007-2008, 50 percent of the total |
| 265 | for fiscal year 2008-2009, and the remainder of the total for |
| 266 | fiscal year 2009-2010. In any fiscal year, tax credits that are |
| 267 | not awarded or that are forfeited due to withdrawal of a |
| 268 | certified production or to a production's actual qualified |
| 269 | expenditures being less than the certified amount shall be |
| 270 | available for award in subsequent fiscal years. |
| 271 | (c) Election and distribution of tax credits.--A certified |
| 272 | production company receiving a tax credit award under this |
| 273 | section shall, at the time the credit is awarded by the Office |
| 274 | of Tourism, Trade, and Economic Development after production is |
| 275 | completed and all requirements to receive a credit award have |
| 276 | been met, make an irrevocable election to apply the credit |
| 277 | against taxes due under chapter 220, against taxes collected or |
| 278 | accrued under chapter 212, or against a stated combination of |
| 279 | the two taxes. The election shall be binding upon any |
| 280 | distributee, successor, transferee, or purchaser. |
| 281 | (d) Tax credit carryforward.--If the certified production |
| 282 | company cannot use the entire tax credit in the taxable year or |
| 283 | reporting period in which the credit is awarded because of |
| 284 | insufficient tax liability on the part of the certified |
| 285 | production, any excess amount may be carried forward to a |
| 286 | succeeding taxable year or reporting period. A tax credit |
| 287 | awarded under this section and applied against taxes imposed |
| 288 | under chapter 212 or chapter 220 may be carried forward for a |
| 289 | maximum of 5 taxable years following the taxable year in which |
| 290 | the credit was awarded, after which period the credit expires |
| 291 | and may not be used. |
| 292 | (e) Consolidated returns.--A certified production company |
| 293 | that files a Florida consolidated return as a member of an |
| 294 | affiliated group under s. 220.131(1) may be allowed the credit |
| 295 | on a consolidated return basis up to the amount of the tax |
| 296 | imposed upon the consolidated group under chapter 220. |
| 297 | (f) Partnership and noncorporate distributions.--A |
| 298 | qualified production company that is not a corporation as |
| 299 | defined in s. 220.03 may elect to distribute tax credits awarded |
| 300 | under this section to its partners or members in proportion to |
| 301 | their respective distributive income or loss in the taxable |
| 302 | fiscal year in which the tax credits were awarded. |
| 303 | (g) Mergers or acquisitions.--Tax credits available under |
| 304 | this section to a certified production company may succeed to a |
| 305 | surviving or acquiring entity subject to the same conditions and |
| 306 | limitations as described in this section; however, they may not |
| 307 | be transferred again by the surviving or acquiring entity. |
| 308 | (5) TRANSFER OF TAX CREDITS.-- |
| 309 | (a) Authorization.--Upon application to the Office of Film |
| 310 | and Entertainment and approval by the Office of Tourism, Trade, |
| 311 | and Economic Development, a certified production company may |
| 312 | elect to transfer, in whole or in part, any unused credit amount |
| 313 | granted under this section. An election to transfer any unused |
| 314 | tax credit amount under chapter 212 or chapter 220 must be made |
| 315 | no later than 5 years from the date the credit was awarded, |
| 316 | after which period the credit expires and may not be used. The |
| 317 | Office of Tourism, Trade, and Economic Development shall notify |
| 318 | the Department of Revenue of the election and transfer. |
| 319 | (b) Number of transfers permitted.--A certified production |
| 320 | company that has elected to apply a credit amount against taxes |
| 321 | remitted under chapter 212 is permitted a one-time transfer of |
| 322 | unused credits to one transferee. A certified production company |
| 323 | that has elected to apply a credit amount against taxes due |
| 324 | under chapter 220 is permitted a one-time transfer of unused |
| 325 | credits to no more than four transferees, and such transfers |
| 326 | shall occur in the same taxable year. |
| 327 | (c) Minimum consideration.--The transfer or purchase of |
| 328 | any amount of the tax credit shall not be exchanged for less |
| 329 | than 75 percent of the credit's value. |
| 330 | (d) Transferee rights and limitations.--The transferee is |
| 331 | subject to the same rights and limitations as the certified |
| 332 | production company awarded the tax credit, except that the |
| 333 | transferee may not sell or otherwise transfer the tax credit. |
| 334 | (e) Written contractual notice.--No more than 5 business |
| 335 | days prior to the certified production company's election to |
| 336 | transfer its awarded tax credit, the Office of Film and |
| 337 | Entertainment shall receive written contractual notice, on a |
| 338 | form approved by the Office of Tourism, Trade, and Economic |
| 339 | Development and signed by both the certified production and the |
| 340 | transferee, describing the terms of the transfer and the |
| 341 | intention of any purchaser to allocate payment for the film |
| 342 | education program under paragraph (f) at the time the transfer |
| 343 | is made. |
| 344 | (f) Film education fee.-- |
| 345 | 1. A purchaser of any transferred tax credit under this |
| 346 | subsection shall pay an amount equal to 5 percent of the total |
| 347 | amount paid for the tax credit into the Grants and Donations |
| 348 | Trust Fund under s. 14.2015(2)(f) administered by the Office of |
| 349 | Tourism, Trade, and Economic Development for film education |
| 350 | programs. The fees collected under this paragraph shall be |
| 351 | subject to specific appropriation by the Legislature. |
| 352 | a. Fifty percent of the fee collected under this paragraph |
| 353 | shall be made available to the Office of Film and Entertainment |
| 354 | for the purpose described in s. 288.1256. |
| 355 | b. Fifty percent of the fee collected under this paragraph |
| 356 | shall be transferred and provided to film and digital media |
| 357 | programs at Florida institutions of higher education approved by |
| 358 | the Office of Film and Entertainment to be applied as a grant |
| 359 | toward production costs for a student-made production. To be |
| 360 | eligible for this grant, a student-made production may not |
| 361 | contain obscene content as defined in s. 847.001(10). The |
| 362 | recipient of the transfer may choose the approved film or |
| 363 | digital media program to receive these funds. |
| 364 | 2. This paragraph shall not apply to the transfer of tax |
| 365 | credits to an investor, an investment company, or an affiliated |
| 366 | company of the certified production. |
| 367 | (g) Rulemaking.--The Department of Revenue may adopt rules |
| 368 | pursuant to ss. 120.536(1) and 120.54 to administer this |
| 369 | subsection, as provided in subsection (7). |
| 370 | (6) PRIORITY ALLOCATION OF TAX CREDITS; ELIGIBILITY |
| 371 | WITHDRAWAL; QUEUES.-- |
| 372 | (a) Tax credit priority.--Eligibility of a qualified |
| 373 | production for a tax credit award shall be determined on a |
| 374 | first-come, first-served basis within its appropriate queue. A |
| 375 | qualified production shall be placed into the appropriate queue |
| 376 | and subject to the requirements of that queue. |
| 377 | (b) Withdrawal of tax credit eligibility.--A qualified or |
| 378 | certified production shall continue on a reasonable schedule, |
| 379 | which means beginning principal photography in the state no |
| 380 | sooner than 45 calendar days before and no later than 45 |
| 381 | calendar days after the date provided in the production's |
| 382 | program application. The Office of Tourism, Trade, and Economic |
| 383 | Development shall withdraw the eligibility of a qualified or |
| 384 | certified production that does not continue on a reasonable |
| 385 | schedule and recertify the tax credits to the next qualified or |
| 386 | certified production or productions in the respective queue that |
| 387 | have not been certified for their full maximum award and have |
| 388 | not started principal photography before the tax credits become |
| 389 | available. |
| 390 | (c) Queues.-- |
| 391 | 1. General production queue.-- |
| 392 | a. A qualified production, excluding commercials, music |
| 393 | videos, and digital media projects, that demonstrates a minimum |
| 394 | of $625,000 in total qualified expenditures shall be eligible |
| 395 | for tax credits equal to 15 percent of its actual qualified |
| 396 | expenditures up to a maximum of $8 million. A qualified |
| 397 | production spanning state fiscal years may combine qualified |
| 398 | expenditures from state fiscal years to satisfy the threshold. |
| 399 | b. A qualified production company that produces national |
| 400 | or regional commercials, music videos, or both may be eligible |
| 401 | for a tax credit award if it demonstrates a minimum of $100,000 |
| 402 | in qualified expenditures per national or regional commercial or |
| 403 | music video and exceeds a combined threshold of $500,000 after |
| 404 | combining actual qualified expenditures from qualified |
| 405 | commercials, music videos, or both during a single state fiscal |
| 406 | year. After a qualified production company that produces |
| 407 | commercials, music videos, or both reaches the threshold of |
| 408 | $500,000, it shall be eligible to apply for certification for a |
| 409 | tax credit award. The maximum tax credit award shall be equal to |
| 410 | 15 percent of its actual qualified expenditures up to a maximum |
| 411 | of $500,000. |
| 412 | c. Eighty-five percent of all tax credits available under |
| 413 | this section in any state fiscal year shall be dedicated to this |
| 414 | queue. |
| 415 | d. An off-season certified production in this queue shall |
| 416 | be eligible for an additional 5-percent tax credit on actual |
| 417 | qualified expenditures. An off-season certified production that |
| 418 | does not complete 75 percent of principal photography as a |
| 419 | result of a hurricane or tropical storm disruption shall not be |
| 420 | disqualified from eligibility for the additional 5-percent |
| 421 | credit as a result of the disruption. |
| 422 | e. A certified production within this queue that spans |
| 423 | state fiscal years shall have all qualified expenditures |
| 424 | certified for the state fiscal year in which the last actual |
| 425 | qualified expenditure is anticipated to be made. |
| 426 | f. A qualified production in this queue shall make a good |
| 427 | faith effort to utilize Florida's existing infrastructure of |
| 428 | equipment providers, including camera gear, grip and lighting |
| 429 | equipment, vehicle providers, and post-production services when |
| 430 | available in-state. |
| 431 | g. A qualified high-impact television series shall be |
| 432 | allowed first position in this queue for tax credits not yet |
| 433 | certified. |
| 434 | 2. Independent Florida filmmaker queue.--An independent |
| 435 | Florida film that meets the criteria of this queue and |
| 436 | demonstrates a minimum of $100,000, but not more than $625,000, |
| 437 | in total qualified expenditures shall be eligible for tax |
| 438 | credits equal to 15 percent of its actual qualified |
| 439 | expenditures. Five percent of all tax credits available under |
| 440 | this section in any state fiscal year shall be dedicated to this |
| 441 | queue. To qualify for this queue, a qualified production must: |
| 442 | a. Be planned as a feature film or documentary of no less |
| 443 | than 70 minutes in length. |
| 444 | b. Provide evidence of 50 percent of the financing for its |
| 445 | total budget in an escrow account or other form dedicated to the |
| 446 | production. |
| 447 | c. Do all major post-production in this state. |
| 448 | d. Employ Florida workers in at least six of the following |
| 449 | eight key positions: |
| 450 | (I) Writer. |
| 451 | (II) Director. |
| 452 | (III) Producer. |
| 453 | (IV) Director of Photography. |
| 454 | (V) Star or one of the lead actors. |
| 455 | (VI) Unit Production Manager. |
| 456 | (VII) Editor. |
| 457 | (VIII) Production Designer. |
| 458 |
|
| 459 | For purposes of this sub-subparagraph, a "Florida worker" means |
| 460 | a person who has been a resident of this state for at least 1 |
| 461 | year prior to a production's application or a person who is |
| 462 | attending a Florida film school or Florida college, university, |
| 463 | or community college full-time or has graduated from such |
| 464 | school, college, university, or community college within 5 years |
| 465 | prior to the production's application. Projects that extend |
| 466 | beyond a fiscal year must reapply each fiscal year in order to |
| 467 | be eligible for a tax credit award for that year. |
| 468 | 3. Digital media projects queue.--A qualified production |
| 469 | that is a digital media project that demonstrates a minimum of |
| 470 | $300,000 in total qualified expenditures shall be eligible for a |
| 471 | tax credit equal to 10 percent of its actual qualified |
| 472 | expenditures up to a maximum of $1 million. Ten percent of all |
| 473 | tax credits available under this section in any state fiscal |
| 474 | year shall be dedicated to this queue. |
| 475 | a. For purposes of this subparagraph, "qualified |
| 476 | expenditures" are the wages or salaries paid to Florida resident |
| 477 | labor working on a single qualified digital media project. |
| 478 | b. A qualified production company producing digital media |
| 479 | projects may not qualify for more than three projects in any one |
| 480 | fiscal year. Projects that extend beyond a fiscal year must |
| 481 | reapply each fiscal year in order to be eligible for a tax |
| 482 | credit award for that year. |
| 483 | (7) RULES, POLICIES, AND PROCEDURES.-- |
| 484 | (a) The Office of Tourism, Trade, and Economic Development |
| 485 | may adopt rules pursuant to ss. 120.536(1) and 120.54 and |
| 486 | develop policies and procedures to implement and administer this |
| 487 | section, including, but not limited to, rules specifying |
| 488 | requirements for the application and approval process, records |
| 489 | required for substantiation for tax credits, procedures for |
| 490 | making the election in paragraph (4)(c), and the manner and form |
| 491 | of documentation required to claim tax credits awarded or |
| 492 | transferred under this section, determination of, qualification |
| 493 | for, and certification for tax credits, implementation of the |
| 494 | Florida Graduate Film Investment Fund in s. 288.1256, and |
| 495 | marketing requirements for tax credit recipients. |
| 496 | (b) The Department of Revenue may adopt rules pursuant to |
| 497 | ss. 120.536(1) and 120.54 to administer this section, including |
| 498 | rules governing the examination and audit procedures required to |
| 499 | administer this section and the manner and form of documentation |
| 500 | required to claim tax credits awarded or transferred under this |
| 501 | section. |
| 502 | (8) AUDIT AUTHORITY; REVOCATION AND FORFEITURE OF TAX |
| 503 | CREDITS; FRAUDULENT CLAIMS.-- |
| 504 | (a) Audit authority.--The Department of Revenue may |
| 505 | conduct examinations and audits as provided in s. 213.34 to |
| 506 | verify that tax credits under this section have been received, |
| 507 | transferred, and applied according to the requirements of this |
| 508 | section. This information is subject to the confidentiality |
| 509 | requirements of chapter 213. If the Department of Revenue |
| 510 | determines that tax credits have not been received, transferred, |
| 511 | or applied as required by this section, it may, in addition to |
| 512 | the remedies provided in this subsection, pursue recovery of |
| 513 | such funds pursuant to the laws and rules governing the |
| 514 | assessment of taxes. |
| 515 | (b) Revocation of tax credits.--The Office of Tourism, |
| 516 | Trade, and Economic Development may revoke or modify any written |
| 517 | decision qualifying, certifying, or otherwise granting |
| 518 | eligibility for tax credits under this section if it is |
| 519 | discovered that the tax credit applicant submitted any false |
| 520 | statement, representation, or certification in any application, |
| 521 | record, report, plan, or other document filed in an attempt to |
| 522 | receive tax credits under this section. The Office of Film and |
| 523 | Entertainment shall immediately notify the Department of Revenue |
| 524 | of any revoked or modified orders affecting previously granted |
| 525 | tax credits. Additionally, the applicant must notify the |
| 526 | Department of Revenue of any change in its tax credit claimed. |
| 527 | (c) Forfeiture of tax credits.--A determination by the |
| 528 | Department of Revenue, as a result of an audit or examination by |
| 529 | the Department of Revenue or from information received from the |
| 530 | Office of Film and Entertainment, that an applicant received tax |
| 531 | credits pursuant to this section to which the applicant was not |
| 532 | entitled is grounds for forfeiture of previously claimed and |
| 533 | received tax credits. The applicant is responsible for returning |
| 534 | forfeited tax credits to the Department of Revenue, and such |
| 535 | funds shall be paid into the General Revenue Fund of the state. |
| 536 | Tax credits purchased in good faith are not subject to |
| 537 | forfeiture unless the transferee submitted fraudulent |
| 538 | information in the purchase or failed to meet the requirements |
| 539 | in subsection (5). |
| 540 | (d) Fraudulent claims.--Any applicant that submits |
| 541 | information under this section that includes fraudulent |
| 542 | information is liable for reimbursement of the reasonable costs |
| 543 | and fees associated with the review, processing, investigation, |
| 544 | and prosecution of the fraudulent claim. An applicant that |
| 545 | obtains a credit payment under this section through a claim that |
| 546 | is fraudulent is liable for reimbursement of the credit amount |
| 547 | claimed plus a penalty in an amount double the credit amount |
| 548 | claimed and reimbursement of reasonable costs, which penalty is |
| 549 | in addition to any criminal penalty to which the applicant is |
| 550 | liable for the same acts. The applicant is also liable for costs |
| 551 | and fees incurred by the state in investigating and prosecuting |
| 552 | the fraudulent claim. |
| 553 | (9) ANNUAL REPORT.--The Office of Film and Entertainment |
| 554 | shall provide an annual report for the previous fiscal year, due |
| 555 | October 1, to the Governor, the President of the Senate, and the |
| 556 | Speaker of the House of Representatives outlining the return on |
| 557 | investment to the state on funds expended pursuant to this |
| 558 | section. |
| 559 | (10) REPEAL.--This section is repealed July 1, 2010, |
| 560 | except that the tax credit carryforward provided in this section |
| 561 | shall continue to be valid for the period specified. |
| 562 | Section 2. Section 288.1256, Florida Statutes, is created |
| 563 | to read: |
| 564 | 288.1256 Florida Graduate Film Investment Fund.-- |
| 565 | (1) The Office of Film and Entertainment shall create and |
| 566 | administer a program, using moneys deposited into the Office of |
| 567 | Tourism, Trade, and Economic Development's Grants and Donations |
| 568 | Trust Fund pursuant to s. 288.1254(5)(f), to award either a |
| 569 | grant or a loan guarantee for films that are: |
| 570 | (a) Written, produced, and directed by Florida residents |
| 571 | who are graduates of an Office of Film and Entertainment |
| 572 | approved film program at a Florida institution of higher |
| 573 | education; and |
| 574 | (b) Determined by the Commissioner of Film and |
| 575 | Entertainment, with the advice of the Florida Film and |
| 576 | Entertainment Advisory Council, to be family friendly based on |
| 577 | the review of the script and a personal interview with the |
| 578 | director. Family-friendly productions are those that have cross- |
| 579 | generational appeal; would be considered suitable for viewing by |
| 580 | children age 5 and older; are appropriate in theme, content, and |
| 581 | language for a broad family audience; embody a responsible |
| 582 | resolution of issues; and do not exhibit any act of smoking, |
| 583 | sex, nudity, or vulgar or profane language. |
| 584 | (2) Films that are deemed by the Office of Film and |
| 585 | Entertainment to contain obscene content as defined in s. |
| 586 | 847.001(10) are not eligible for this program. |
| 587 | Section 3. Paragraph (j) is added to subsection (5) of |
| 588 | section 288.1252, Florida Statutes, to read: |
| 589 | 288.1252 Florida Film and Entertainment Advisory Council; |
| 590 | creation; purpose; membership; powers and duties.-- |
| 591 | (5) POWERS AND DUTIES.--The Florida Film and Entertainment |
| 592 | Advisory Council shall have all the powers necessary or |
| 593 | convenient to carry out and effectuate the purposes and |
| 594 | provisions of this act, including, but not limited to, the power |
| 595 | to: |
| 596 | (j) Advise whether a film produced under s. 288.1256 meets |
| 597 | the criteria delineated in that section. |
| 598 | Section 4. Subsection (8) of section 220.02, Florida |
| 599 | Statutes, is amended to read: |
| 600 | 220.02 Legislative intent.-- |
| 601 | (8) It is the intent of the Legislature that credits |
| 602 | against either the corporate income tax or the franchise tax be |
| 603 | applied in the following order: those enumerated in s. 631.828, |
| 604 | those enumerated in s. 220.191, those enumerated in s. 220.181, |
| 605 | those enumerated in s. 220.183, those enumerated in s. 220.182, |
| 606 | those enumerated in s. 220.1895, those enumerated in s. 221.02, |
| 607 | those enumerated in s. 220.184, those enumerated in s. 220.186, |
| 608 | those enumerated in s. 220.1845, those enumerated in s. 220.19, |
| 609 | those enumerated in s. 220.185, those enumerated in s. 220.187, |
| 610 | those enumerated in s. 220.192, and those enumerated in s. |
| 611 | 220.193, and those enumerated in s. 288.1254. |
| 612 | Section 5. Paragraph (z) is added to subsection (8) of |
| 613 | section 213.053, Florida Statutes, to read: |
| 614 | 213.053 Confidentiality and information sharing.-- |
| 615 | (8) Notwithstanding any other provision of this section, |
| 616 | the department may provide: |
| 617 | (z) Information relative to tax credits taken under s. |
| 618 | 288.1254 to the Office of Film and Entertainment and the Office |
| 619 | of Tourism, Trade, and Economic Development. |
| 620 |
|
| 621 | Disclosure of information under this subsection shall be |
| 622 | pursuant to a written agreement between the executive director |
| 623 | and the agency. Such agencies, governmental or nongovernmental, |
| 624 | shall be bound by the same requirements of confidentiality as |
| 625 | the Department of Revenue. Breach of confidentiality is a |
| 626 | misdemeanor of the first degree, punishable as provided by s. |
| 627 | 775.082 or s. 775.083. |
| 628 | Section 6. Paragraph (q) is added to subsection (5) of |
| 629 | section 212.08, Florida Statutes, to read: |
| 630 | 212.08 Sales, rental, use, consumption, distribution, and |
| 631 | storage tax; specified exemptions.--The sale at retail, the |
| 632 | rental, the use, the consumption, the distribution, and the |
| 633 | storage to be used or consumed in this state of the following |
| 634 | are hereby specifically exempt from the tax imposed by this |
| 635 | chapter. |
| 636 | (5) EXEMPTIONS; ACCOUNT OF USE.-- |
| 637 | (q) Entertainment industry tax credit; requirement for |
| 638 | electronic funds transfer.-- |
| 639 | 1. For the fiscal years beginning July 1, 2007, and ending |
| 640 | June 30, 2010, a qualified production, as defined in s. |
| 641 | 288.1254(2)(h), is eligible for tax credits against its state |
| 642 | sales and use tax liabilities as provided in s. 288.1254. |
| 643 | 2. The credit shall be deducted from any sales and use tax |
| 644 | remitted by the dealer to the department by electronic funds |
| 645 | transfer and can only be deducted on a sales and use tax return |
| 646 | initiated through electronic data interchange. The dealer shall |
| 647 | separately state the credit on the electronic return. The net |
| 648 | amount of tax due and payable must be remitted by electronic |
| 649 | funds transfer. If the credit for the qualified expenditures is |
| 650 | larger than the amount owed on the sales and use tax return, the |
| 651 | amount of the credit may be carried forward to a succeeding |
| 652 | reporting period. A dealer may only obtain a credit using the |
| 653 | method described in this subparagraph. A dealer is not |
| 654 | authorized to obtain a credit by applying for a refund. |
| 655 | Section 7. Section 288.1255, Florida Statutes, is |
| 656 | repealed. |
| 657 | Section 8. This act shall take effect July 1, 2007. |