Florida Senate - 2009                                    SB 2034
       
       
       
       By the Committee on Commerce
       
       
       
       
       577-02170A-09                                         20092034__
    1                        A bill to be entitled                      
    2         An act relating to the Innovation Incentive Program;
    3         amending s. 288.1089, F.S.; defining the terms
    4         “commission,” “industry wage,” “naming opportunities,”
    5         and “net royalty revenues”; expanding the definition
    6         of “project” to include alternative and renewable
    7         energy applicants; requiring that an application for
    8         an incentive award include certain information;
    9         authorizing the waiver or reduction of requirements
   10         relating to matching funds for alternative and
   11         renewable energy projects; requiring that Enterprise
   12         Florida, Inc., evaluate proposals for all categories
   13         of innovation incentive awards and solicit comments
   14         from the Florida Energy and Climate Commission before
   15         making its recommendations; providing requirements for
   16         such evaluations and recommendations; providing
   17         additional criteria for a research and development
   18         facility; deleting qualifying criteria for alternative
   19         and renewable energy projects; creating additional
   20         evaluation criteria for alternative and renewable
   21         energy projects; requiring that the Executive Office
   22         of the Governor release funds upon review and approval
   23         of an award by the Legislative Budget Commission;
   24         requiring the Office of Tourism, Trade, and Economic
   25         Development and the recipient of an award to enter
   26         into a contract setting forth conditions for the
   27         payment of incentive funds; requiring that such
   28         agreement include certain provisions; requiring that
   29         agreements signed after a specified date contain
   30         certain additional provisions; requiring that
   31         Enterprise Florida, Inc., submit a report containing
   32         certain information within a specified period after
   33         the conclusion of such agreement to the Governor, the
   34         President of the Senate, and the Speaker of the House
   35         of Representatives; requiring that each recipient of
   36         an award comply with certain business ethics standards
   37         developed by Enterprise Florida, Inc.; deleting
   38         provisions authorizing Enterprise Florida, Inc., to
   39         collaborate with the State University System in
   40         reviewing and evaluating business ethics standards;
   41         requiring that the office submit to the Governor, the
   42         President of the Senate, and the Speaker of the House
   43         of Representatives a report containing certain
   44         information; specifying a date on which the office
   45         shall begin submitting such reports; requiring that
   46         the Office of Program Policy Analysis and Government
   47         Accountability and the Office of the Auditor General
   48         submit a joint report; requiring that such reports be
   49         submitted at specified intervals; requiring that such
   50         reports include certain information; authorizing the
   51         office to seek the assistance of certain government
   52         entities for certain purposes; providing an effective
   53         date.
   54  
   55  Be It Enacted by the Legislature of the State of Florida:
   56  
   57         Section 1. Subsections (1), (2), and (3), paragraph (d) of
   58  subsection (4), and subsections (5), (7), (8), (9), and (10) of
   59  section 288.1089, Florida Statutes, are amended, and subsections
   60  (11) and (12) are added to that section, to read:
   61         288.1089 Innovation Incentive Program.—
   62         (1) The Innovation Incentive Program is created within the
   63  Office of Tourism, Trade, and Economic Development to ensure
   64  that sufficient resources are available to allow the state to
   65  respond expeditiously to extraordinary economic opportunities
   66  and to compete effectively for high-value research and
   67  development, and innovation business, and alternative and
   68  renewal energy projects.
   69         (2) As used in this section, the term:
   70         (a) “Alternative and renewable energy” means electrical,
   71  mechanical, or thermal energy produced from a method that uses
   72  one or more of the following fuels or energy sources: ethanol,
   73  cellulosic ethanol, biobutanol, biodiesel, biomass, biogas,
   74  hydrogen fuel cells, ocean energy, hydrogen, solar, hydro, wind,
   75  or geothermal.
   76         (b) “Average private sector wage” means the statewide
   77  average wage in the private sector or the average of all private
   78  sector wages in the county or in the standard metropolitan area
   79  in which the project is located as determined by the Agency for
   80  Workforce Innovation.
   81         (c) “Brownfield area” means an area designated as a
   82  brownfield area pursuant to s. 376.80.
   83         (d)”Commission” means the Florida Energy and Climate
   84  Commission.
   85         (e)(d) “Cumulative investment” means cumulative capital
   86  investment and all eligible capital costs, as defined in s.
   87  220.191.
   88         (f)(e) “Director” means the director of the Office of
   89  Tourism, Trade, and Economic Development.
   90         (g)(f) “Enterprise zone” means an area designated as an
   91  enterprise zone pursuant to s. 290.0065.
   92         (h)(g) “Fiscal year” means the state fiscal year.
   93         (i)“Industry wage” means the average annual wage paid to
   94  employees in a particular industry, as designated by the North
   95  American Industry Classification System (NAICS), and compiled by
   96  the Bureau of Labor Statistics of the United States Department
   97  of Labor.
   98         (j)(h) “Innovation business” means a business expanding or
   99  locating in this state that is likely to serve as a catalyst for
  100  the growth of an existing or emerging technology cluster or will
  101  significantly impact the regional economy in which it is to
  102  expand or locate.
  103         (k)(i) “Jobs” means full-time equivalent positions, as that
  104  term is consistent with terms used by the Agency for Workforce
  105  Innovation and the United States Department of Labor for
  106  purposes of unemployment compensation tax administration and
  107  employment estimation, resulting directly from a project in this
  108  state. The term does not include temporary construction jobs.
  109         (l)“Naming opportunities” means charitable donations from
  110  any person or entity in consideration for the right to have all
  111  or a portion of the facility named for or in the memory of any
  112  person, living or dead, or for any entity.
  113         (m)“Net royalty revenues” means all royalty revenues less
  114  the cost of obtaining, maintaining, and enforcing related patent
  115  and intellectual property rights, both foreign and domestic.
  116         (n)(j) “Match” means funding from local sources, public or
  117  private, which will be paid to the applicant and which is equal
  118  to 100 percent of an award. Eligible match funding may include
  119  any tax abatement granted to the applicant under s. 196.1995 or
  120  the appraised market value of land, buildings, infrastructure,
  121  or equipment conveyed or provided at a discount to the
  122  applicant. Complete documentation of a match payment or other
  123  conveyance must be presented to and verified by the office prior
  124  to transfer of state funds to an applicant. An applicant may not
  125  provide, directly or indirectly, more than 5 percent of match
  126  funding in any fiscal year. The sources of such funding may not
  127  include, directly or indirectly, state funds appropriated from
  128  the General Revenue Fund or any state trust fund, excluding tax
  129  revenues shared with local governments pursuant to law.
  130         (o)(k) “Office” means the Office of Tourism, Trade, and
  131  Economic Development.
  132         (p)(l) “Project” means the location to or expansion in this
  133  state by an innovation business, a or research and development
  134  applicant, or an alternative and renewable energy applicant
  135  approved for an award pursuant to this section.
  136         (q)(m) “Research and development” means basic and applied
  137  research in the sciences or engineering, as well as the design,
  138  development, and testing of prototypes or processes of new or
  139  improved products. Research and development does not include
  140  market research, routine consumer product testing, sales
  141  research, research in the social sciences or psychology,
  142  nontechnological activities, or technical services.
  143         (r)(n) “Research and development facility” means a facility
  144  that is predominately engaged in research and development
  145  activities. For purposes of this paragraph, the term
  146  “predominantly” means at least 51 percent of the time.
  147         (s)(o) “Rural area” means a rural city, rural community, or
  148  rural county as defined in s. 288.106.
  149         (3) To be eligible for consideration for an innovation
  150  incentive award, an innovation business, a or research and
  151  development entity, or an alternative and renewable energy
  152  company project must submit a written application to Enterprise
  153  Florida, Inc., before making a decision to locate new operations
  154  in this state or expand an existing operation in this state. The
  155  application must include, but not be limited to:
  156         (a) The applicant's federal employer identification number,
  157  unemployment account number, and state sales tax registration
  158  number. If such numbers are not available at the time of
  159  application, they must be submitted to the office in writing
  160  prior to the disbursement of any payments under this section.
  161         (b) The location in this state at which the project is
  162  located or is to be located.
  163         (c) A description of the type of business activity,
  164  product, or research and development undertaken by the
  165  applicant, including six-digit North American Industry
  166  Classification System codes for all activities included in the
  167  project.
  168         (d) The applicant's projected investment in the project.
  169         (e) The total investment, from all sources, in the project.
  170         (f) The number of net new full-time equivalent jobs in this
  171  state the applicant anticipates having created as of December 31
  172  of each year in the project and the average annual wage of such
  173  jobs.
  174         (g) The total number of full-time equivalent employees
  175  currently employed by the applicant in this state, if
  176  applicable.
  177         (h) The anticipated commencement date of the project.
  178         (i) A detailed explanation of why the innovation incentive
  179  is needed to induce the applicant to expand or locate in the
  180  state and whether an award would cause the applicant to locate
  181  or expand in this state.
  182         (j) If applicable, an estimate of the proportion of the
  183  revenues resulting from the project that will be generated
  184  outside this state.
  185         (4) To qualify for review by the office, the applicant
  186  must, at a minimum, establish the following to the satisfaction
  187  of Enterprise Florida, Inc., and the office:
  188         (d) For an alternative and renewable energy project in this
  189  state, the project must:
  190         1. Demonstrate a plan for significant collaboration with an
  191  institution of higher education;
  192         2. Provide the state, at a minimum, a break-even return on
  193  investment within a 20-year period;
  194         3. Include matching funds provided by the applicant or
  195  other available sources. The match requirement may be reduced or
  196  waived in rural areas of critical economic concern or reduced in
  197  rural areas, brownfield areas, and enterprise zones This
  198  requirement may be waived if the office and the department
  199  determine that the merits of the individual project or the
  200  specific circumstances warrant such action;
  201         4. Be located in this state; and
  202         5. Provide at least 35 direct, new jobs that pay an
  203  estimated annual average wage that equals at least 130 percent
  204  of the average private sector wage. The average wage requirement
  205  may be waived if the office and the commission determine that
  206  the merits of the individual project or the specific
  207  circumstances warrant such action; and
  208         6.Meet one of the following criteria:
  209         a.Result in the creation of at least 35 direct, new jobs
  210  at the business.
  211         b.Have an activity or product that uses feedstock or other
  212  raw materials grown or produced in this state.
  213         c.Have a cumulative investment of at least $50 million
  214  within a 5-year period.
  215         d.Address the technical feasibility of the technology, and
  216  the extent to which the proposed project has been demonstrated
  217  to be technically feasible based on pilot project
  218  demonstrations, laboratory testing, scientific modeling, or
  219  engineering or chemical theory that supports the proposal.
  220         e.Include innovative technology and the degree to which
  221  the project or business incorporates an innovative new
  222  technology or an innovative application of an existing
  223  technology.
  224         f.Include production potential and the degree to which a
  225  project or business generates thermal, mechanical, or electrical
  226  energy by means of a renewable energy resource that has
  227  substantial long-term production potential. The project must, to
  228  the extent possible, quantify annual production potential in
  229  megawatts or kilowatts.
  230         g.Include and address energy efficiency and the degree to
  231  which a project demonstrates efficient use of energy, water, and
  232  material resources.
  233         h.Include project management and the ability of management
  234  to administer and complete the business project.
  235         (5) Enterprise Florida, Inc., shall evaluate proposals for
  236  all three categories of innovation incentive awards and transmit
  237  recommendations for awards to the office. Before making its
  238  recommendations on alternative and renewable energy projects,
  239  Enterprise Florida, Inc., shall solicit comments and
  240  recommendations from the Florida Energy and Climate Commission
  241  for alternative and renewable energy project proposals. For each
  242  project, Such evaluation and recommendation to the office must
  243  include, but need not be limited to:
  244         (a) A description of the project, its required facilities,
  245  and the associated product, service, or research and development
  246  associated with the project.
  247         (b) The percentage of match provided for the project.
  248         (c) The number of full-time equivalent jobs that will be
  249  created by the project, the total estimated average annual wages
  250  of such jobs, and the types of business activities and jobs
  251  likely to be stimulated by the project.
  252         (d) The cumulative investment to be dedicated to the
  253  project within 5 years and the total investment expected in the
  254  project if more than 5 years.
  255         (e) The projected economic and fiscal impacts on the local
  256  and state economies relative to investment.
  257         (f) A statement of any special impacts the project is
  258  expected to stimulate in a particular business sector in the
  259  state or regional economy or in the state's universities and
  260  community colleges.
  261         (g) A statement of any anticipated or proposed
  262  relationships with state universities.
  263         (h) A statement of the role the incentive is expected to
  264  play in the decision of the applicant to locate or expand in
  265  this state.
  266         (i) A recommendation and explanation of the amount of the
  267  award needed to cause the applicant to expand or locate in this
  268  state.
  269         (j) A discussion of the efforts and commitments made by the
  270  local community in which the project is to be located to induce
  271  the applicant's location or expansion, taking into consideration
  272  local resources and abilities.
  273         (k) A recommendation for specific performance criteria the
  274  applicant would be expected to achieve in order to receive
  275  payments from the fund and penalties or sanctions for failure to
  276  meet or maintain performance conditions.
  277         (l) Additional evaluative criteria for a research and
  278  development facility project include:
  279         1. A description of the extent to which the project has the
  280  potential to serve as catalyst for an emerging or evolving
  281  cluster.
  282         2. A description of the extent to which the project has or
  283  could have a long-term collaborative research and development
  284  relationship with one or more universities or community colleges
  285  in this state.
  286         3. A description of the existing or projected impact of the
  287  project on established clusters or targeted industry sectors.
  288         4. A description of the project's contribution to the
  289  diversity and resiliency of the innovation economy of this
  290  state.
  291         5. A description of the project's impact on special needs
  292  communities, including, but not limited to, rural areas,
  293  distressed urban areas, and enterprise zones.
  294         (m)Additional evaluative criteria for alternative and
  295  renewable energy proposals include:
  296         1.The availability of matching funds or other in-kind
  297  contributions applied to the total project from an applicant.
  298  The commission shall give greater preference to projects that
  299  provide such matching funds or other in-kind contributions.
  300         2.The degree to which the project stimulates in-state
  301  capital investment and economic development in metropolitan and
  302  rural areas, including the creation of jobs and the future
  303  development of a commercial market for renewable energy
  304  technologies.
  305         3.The extent to which the proposed project has been
  306  demonstrated to be technically feasible based on pilot project
  307  demonstrations, laboratory testing, scientific modeling, or
  308  engineering or chemical theory that supports the proposal.
  309         4.The degree to which the project incorporates an
  310  innovative new technology or an innovative application of an
  311  existing technology.
  312         5.The degree to which a project generates thermal,
  313  mechanical, or electrical energy by means of a renewable energy
  314  resource that has substantial long-term production potential.
  315         6.The degree to which a project demonstrates efficient use
  316  of energy and material resources.
  317         7.The degree to which the project fosters overall
  318  understanding and appreciation of renewable energy technologies.
  319         8.The ability to administer a complete project.
  320         9.Project duration and timeline for expenditures.
  321         10.The geographic area in which the project is to be
  322  conducted in relation to other projects.
  323         11.The degree of public visibility and interaction.
  324         (7) Upon receipt of the evaluation and recommendation from
  325  Enterprise Florida, Inc., and from the Florida Energy and
  326  Climate Commission for alternative and renewable energy project
  327  proposals, the director shall recommend to the Governor the
  328  approval or disapproval of an award. In recommending approval of
  329  an award, the director shall include proposed performance
  330  conditions that the applicant must meet in order to obtain
  331  incentive funds and any other conditions that must be met before
  332  the receipt of any incentive funds. The Governor shall consult
  333  with the President of the Senate and the Speaker of the House of
  334  Representatives before giving approval for an award. Upon review
  335  and approval of an award by the Legislative Budget Commission,
  336  the Executive Office of the Governor shall release the funds
  337  pursuant to the legislative consultation and review requirements
  338  set forth in s. 216.177.
  339         (8)(a)After the conditions Upon approval by the Governor
  340  and release of the funds as set forth in subsection (7) have
  341  been met, the director shall issue a letter certifying the
  342  applicant as qualified for an award. The office and the award
  343  recipient applicant shall enter into an agreement that sets
  344  forth the conditions for payment of the incentive funds
  345  incentives. The agreement must include, at a minimum:
  346         1. The total amount of funds awarded.;
  347         2. The performance conditions that must be met in order to
  348  obtain the award or portions of the award, including, but not
  349  limited to, net new employment in the state, average wage, and
  350  total cumulative investment.;
  351         3. Demonstration of a baseline of current service and a
  352  measure of enhanced capability.;
  353         4. The methodology for validating performance.;
  354         5. The schedule of payments.; and
  355         6. Sanctions for failure to meet performance conditions,
  356  including any clawback provisions.
  357         (b)Additionally, agreements signed on or after July 1,
  358  2009, must include the following provisions:
  359         1.Notwithstanding subsection (4), a requirement that the
  360  jobs created by the recipient of the incentive funds pay an
  361  annual average wage at least equal to the relevant industry's
  362  annual average wage or at least 130 percent of the average
  363  private-sector wage, whichever is greater.
  364         2.A reinvestment requirement. Each recipient of an award
  365  shall reinvest up to 15 percent of net royalty revenues,
  366  including revenues from spin-off companies and the revenues from
  367  the sale of stock it receives from the licensing or transfer of
  368  inventions, methods, processes, and other patentable discoveries
  369  conceived or reduced to practice using its facilities in Florida
  370  or its Florida-based employees, in whole or in part, and to
  371  which the recipient of the grant becomes entitled during the 20
  372  years following the effective date of its agreement with the
  373  office. Each recipient of an award also shall reinvest up to 15
  374  percent of the gross revenues it receives from naming
  375  opportunities associated with any facility it builds in this
  376  state. Reinvestment payments shall commence no later than 6
  377  months after the recipient of the grant has received the final
  378  disbursement under the contract and shall continue until the
  379  maximum reinvestment, as specified in the contract, has been
  380  paid. Reinvestment payments shall be remitted to the office for
  381  deposit in the Biomedical Research Trust Fund for companies
  382  specializing in biomedicine or life sciences, or in the Economic
  383  Development Trust Fund for companies specializing in fields
  384  other than biomedicine or the life sciences. If these trust
  385  funds no longer exist at the time of the reinvestment, the
  386  state's share of reinvestment shall be deposited in their
  387  successor trust funds as determined by law. Each recipient of an
  388  award shall annually submit a schedule of the shares of stock
  389  held by it as payment of the royalty required by this paragraph
  390  and report on any trades or activity concerning such stock. Each
  391  recipient's reinvestment obligations survive the expiration or
  392  termination of its agreement with the state.
  393         3.Requirements for the establishment of internship
  394  programs or other learning opportunities for educators and
  395  secondary, postsecondary, graduate, and doctoral students.
  396         4.A requirement that the recipient submit quarterly
  397  reports and annual reports related to activities and performance
  398  to the office, according to standardized reporting periods.
  399         5.A requirement for an annual accounting to the office of
  400  the expenditure of funds disbursed under this section.
  401         6.A process for amending the agreement.
  402         (9) Enterprise Florida, Inc., shall assist the office in
  403  validating the performance of an innovation business, a or
  404  research and development facility, or an alternative and
  405  renewable energy business that has received an award. At the
  406  conclusion of the innovation incentive award agreement, or its
  407  earlier termination, Enterprise Florida, Inc., shall, within 90
  408  days, submit a report the results of the innovation incentive
  409  award to the Governor, the President of the Senate, and the
  410  Speaker of the House of Representatives detailing whether the
  411  recipient of the innovation incentive grant achieved its
  412  specified outcomes.
  413         (10) Each recipient of an award shall comply with
  414  Enterprise Florida, Inc., shall develop business ethics
  415  standards developed by Enterprise Florida, Inc., which are based
  416  on appropriate best industry practices which shall be applicable
  417  to all award recipients. The standards shall address ethical
  418  duties of business enterprises, fiduciary responsibilities of
  419  management, and compliance with the laws of this state.
  420  Enterprise Florida, Inc., may collaborate with the State
  421  University System in reviewing and evaluating appropriate
  422  business ethics standards. Such standards shall be provided to
  423  the Governor, the President of the Senate, and the Speaker of
  424  the House of Representatives by December 31, 2006. An award
  425  agreement entered into on or after December 31, 2006, shall
  426  require a recipient to comply with the business ethics standards
  427  developed pursuant to this section.
  428         (11)(a)Beginning January 5, 2010, and every year
  429  thereafter, the office shall submit to the Governor, the
  430  President of the Senate, and the Speaker of the House of
  431  Representatives a report summarizing the activities and
  432  accomplishments of the recipients of grants from the Innovation
  433  Incentive Program during the previous 12 months and an
  434  evaluation by the office of whether the recipients are catalysts
  435  for additional direct and indirect economic development in
  436  Florida.
  437         (b)Beginning March 1, 2010, and every third year
  438  thereafter, the Office of Program Policy Analysis and Government
  439  Accountability and the Florida Auditor General's Office shall
  440  jointly release a report evaluating the Innovation Incentive
  441  Program's progress toward creating clusters of high-wage, high
  442  skilled, complementary industries that serve as catalysts for
  443  economic growth specifically in the regions in which they are
  444  located, and generally for the state as a whole. Such report
  445  should include critical analyses of quarterly and annual
  446  reports, annual audits, and other documents prepared by the
  447  Innovation Incentive program awardees; relevant economic
  448  development reports prepared by the office, Enterprise Florida,
  449  Inc., and local or regional economic development organizations;
  450  interviews with the parties involved; and any other relevant
  451  data. Such report should also include legislative
  452  recommendations, if necessary, on how to improve the Innovation
  453  Incentive Program so that the program reaches its anticipated
  454  potential as a catalyst for direct and indirect economic
  455  development in this state.
  456         (12)The office may seek the assistance of the Office of
  457  Program Policy Analysis and Government Accountability, the
  458  Legislature's Office of Economic and Demographic Research, and
  459  other entities for the purpose of developing performance
  460  measures or techniques to quantify the synergistic economic
  461  development impacts that awardees of grants are having within
  462  their communities.
  463         Section 2. This act shall take effect July 1, 2009.