HB 43

1
A bill to be entitled
2An act relating to the entertainment industry; amending s.
3288.1254, F.S.; renaming the entertainment industry
4financial incentive program as the entertainment industry
5financial incentive and tax credit program; revising the
6program to provide qualified entertainment entities with a
7choice of corporate income tax and sales and use tax
8credits or reimbursement from appropriations; revising
9provisions relating to definitions, creation and scope,
10application procedures, approval process, eligibility,
11required documents, qualified and certified productions,
12queues, fraud, and annual reports; providing duties and
13responsibilities of the Office of Film and Entertainment,
14the Office of Tourism, Trade, and Economic Development,
15and the Department of Revenue relating to the tax credits;
16providing criteria and limitations for awards of tax
17credits; providing a total amount available for tax
18credits; providing for uses, allocations, election,
19distributions, and carryforward of the tax credits;
20providing for use of consolidated returns; providing for
21partnership and noncorporate distributions of tax credits;
22providing for succession of tax credits; providing
23requirements for transfer of tax credits; requiring a
24purchaser of transferred tax credits to pay a percentage
25of the amount paid to fund specified film education
26grants; providing priority allocation of financial
27incentive and tax credits; providing for withdrawal of tax
28credit eligibility; authorizing the Office of Tourism,
29Trade, and Economic Development to adopt rules, policies,
30and procedures; authorizing the Department of Revenue to
31adopt rules and conduct audits; providing for revocation
32and forfeiture of tax credits; providing liability for
33reimbursement of certain costs and fees associated with a
34fraudulent claim; providing for future expiration of tax
35credit authorization except for carryforward of tax
36credits authorized prior to that date; creating s.
37288.1256, F.S.; establishing the Florida Graduate Film
38Investment Program; requiring administration by the Office
39of Film and Entertainment; providing for deposit of funds;
40requiring that funds be used for certain family-friendly
41films; amending s. 288.1252, F.S.; requiring the Florida
42Film and Entertainment Advisory Council to advise on films
43produced under the Florida Graduate Film Investment
44Program; amending s. 220.13, F.S.; including a portion of
45the entertainment industry tax credit, as provided in s.
46288.1254, F.S., for the purpose of calculating a
47taxpayer's net income; amending s. 220.02, F.S.; including
48tax credits enumerated in s. 288.1254, F.S., in the order
49of application of credits against certain taxes; amending
50s. 213.053, F.S.; authorizing the Department of Revenue to
51provide tax credit information to the Office of Film and
52Entertainment and the Office of Tourism, Trade, and
53Economic Development; amending s. 212.08, F.S.; requiring
54electronic funds transfer for the entertainment industry
55tax credit; providing procedures; providing rulemaking
56authority; providing for severability; providing an
57effective date.
58
59Be It Enacted by the Legislature of the State of Florida:
60
61     Section 1.  Section 288.1254, Florida Statutes, is amended
62to read:
63     288.1254  Entertainment industry financial incentive and
64tax credit program.--
65     (1)  DEFINITIONS.--As used in this section, the term:
66     (a)  "Certified production" means a qualified production
67that has financial incentive funds allocated or tax credits
68awarded to it by the Office of Tourism, Trade, and Economic
69Development based on its estimated qualified expenditures. The
70term excludes a production if its first day of principal
71photography in this state occurred before the production is
72certified by the Office of Tourism, Trade, and Economic
73Development, unless the production spans more than 1 fiscal
74year, was a certified production on the first day of such
75photography, and is required to submit an application for
76continuing the same production in the subsequent year.
77     (b)  "Certified production company" means a qualified
78production company that has received a financial incentive
79allocation or a tax credit award for a certified production.
80     (c)(b)  "Digital media project" means a production of
81interactive entertainment which is produced for distribution in
82commercial or educational markets, including a video game,
83simulation, or animation, or a production intended for Internet
84or wireless distribution. The term excludes a production deemed
85by the Office of Film and Entertainment to contain obscene
86content as defined in s. 847.001(10).
87     (d)  "Financial incentive," "financial incentive payment,"
88or "incentive funding" means a monetary reimbursement for
89qualified expenditures based upon legislative appropriation.
90     (e)(c)  "High-impact television series" means a production
91created to run multiple production seasons having an estimated
92order of at least seven episodes per season and qualified
93expenditures of at least $625,000 per episode.
94     (f)(d)  "Off-season certified production" means a
95production, other than a digital media project or an animated
96production, which films 75 percent or more of its principal
97photography days from June 1 through November 30.
98     (g)(e)  "Production" means a theatrical, or direct-to-
99video, or motion picture; a made-for-television motion picture;
100a commercial; a music video; an industrial or educational film;
101an infomercial; a documentary film; a television pilot program,
102including; a presentation for a television pilot program; a
103television series, including, but not limited to, a drama, a
104reality show, a comedy, a soap opera, a telenovela, a game show,
105or a miniseries production; or a digital media project by the
106entertainment industry. One season of a television series is
107considered one production. The term excludes a weather or market
108program; a sporting event; a sports show; a gala; a production
109that solicits funds; a home shopping program; a political
110program; a political documentary; political advertising; a
111gambling-related project or production; a concert production; a
112pornographic production; or a local, regional, or Internet-
113distributed-only news show, current-events show, pornographic
114production, or current-affairs show. A production may be
115produced on or by film, tape, or otherwise by means of a motion
116picture camera; electronic camera or device; tape device;
117computer; any combination of the foregoing; or any other means,
118method, or device now used or later adopted.
119     (h)(f)  "Production expenditures" means the costs of
120tangible and intangible property used and services performed
121primarily and customarily in the production, including
122preproduction and postproduction, excluding costs for
123development, marketing, and distribution. Production
124expenditures include, but are not limited to:
125     1.  Wages, salaries, or other compensation, including
126amounts paid through payroll service companies, for technical
127and production crews, directors, producers, and performers.
128     2.  Expenditures for sound stages, backlots, production
129editing, digital effects, sound recordings, sets, and set
130construction.
131     3.  Expenditures for rental equipment, including, but not
132limited to, cameras and grip or electrical equipment.
133     4.  Expenditures for meals, travel, and accommodations.
134     (i)(g)  "Qualified expenditures" means production
135expenditures incurred in this state by a qualified production
136for:
137     1.  Goods purchased or leased from, or services provided
138by, a vendor or supplier in this state which is registered with
139the Department of State or the Department of Revenue and doing
140business in this state.
141     2.  Payments to residents of this state in the form of
142salary, wages, or other compensation up to a maximum of $400,000
143per resident for the general production queue and the
144independent Florida filmmaker queue and up to a maximum of
145$200,000 for the digital media queue.
146
147For a qualified production involving an event, such as an awards
148show, the term excludes expenditures solely associated with the
149event itself and not directly required by the production. The
150term excludes expenditures prior to certification, with the
151exception of those incurred for a commercial, a music video, or
152the pickup of additional episodes of a television series within
153a single season.
154     (j)(h)  "Qualified production" means a production in this
155state meeting the requirements of this section and the minimum
156qualified expenditures and requirements of its appropriate
157queue. The term excludes a production:
158     1.  In which less than 50 percent of the positions that
159make up its production cast and below-the-line production crew
160are filled by residents of this state, whose residency is
161demonstrated by a valid Florida driver's license or other state-
162issued identification confirming residency, or students enrolled
163full-time in a film-and-entertainment-related course of study at
164an institution of higher education in this state; or
165     2.  That is deemed by the Office of Film and Entertainment
166to contain obscene content as defined in s. 847.001(10).
167     (k)(i)  "Qualified production company" means a corporation,
168limited liability company, partnership, or other legal entity
169engaged in producing a qualified production.
170     (2)  CREATION AND PURPOSE OF PROGRAM.--The entertainment
171industry financial incentive and tax credit program is created
172within the Office of Film and Entertainment. The purpose of this
173program is to encourage the use of this state as a site for
174filming and to develop and sustain the workforce and
175infrastructure for film and entertainment production.
176     (3)  APPLICATION PROCEDURE; APPROVAL PROCESS.--
177     (a)  A qualified production company in this state producing
178a qualified production may submit a program application to the
179Office of Film and Entertainment for the purpose of determining
180certification for a financial incentive or for an award of tax
181credits authorized by this section. The applicant shall provide
182the office with information required to determine whether the
183production is a qualified production and to determine the
184qualified expenditures and other information necessary for the
185office to determine certification.
186     (b)  The Office of Film and Entertainment shall develop an
187application form for use in qualifying an applicant as a
188qualified production. The form must include, but need not be
189limited to, production-related information concerning employment
190of residents in this state, a detailed budget of planned
191qualified expenditures, and the applicant's signed affirmation
192that the information on the form has been verified and is
193correct. The Office of Film and Entertainment and local film
194commissions shall distribute the form.
195     (c)  The Office of Film and Entertainment shall establish a
196process by which an application is accepted and reviewed for
197certification for a financial incentive or for tax credit
198eligibility and by which the amount of the financial incentive
199or tax credit award is determined. The office may request
200assistance from a duly appointed local film commission in
201determining qualification for the financial incentive allocation
202or tax credit award and compliance with this section.
203     (d)  The Office of Film and Entertainment shall review the
204application within 10 business days after receipt. Upon its
205determination that the application contains all the information
206required by this subsection and meets the criteria set out in
207this section, the office shall qualify the applicant and
208recommend to the Office of Tourism, Trade, and Economic
209Development that the applicant for a financial incentive be
210certified for a maximum amount of available funds and that the
211applicant for a tax credit be certified for the tax credit and
212for a maximum tax credit award amount. Within 5 business days
213after receipt of the recommendation, the Office of Tourism,
214Trade, and Economic Development shall reject the recommendation
215or certify the applicant and shall certify the maximum
216recommended tax credit award, if any, to the applicant and to
217the executive director of the Department of Revenue.
218     (e)  The Office of Film and Entertainment shall deny an
219application if it determines that the application is not
220complete or the production or the tax credit sought does not
221meet the requirements of this section.
222     (f)  The Office of Film and Entertainment shall develop a
223process to verify the actual qualified expenditures of a
224certified production. The process must require:
225     1.  A certified production to submit, in a timely manner
226after production ends and after making all of its qualified
227expenditures, data substantiating each qualified expenditure to
228an independent certified public accountant licensed in this
229state;
230     2.  Such accountant to conduct an audit, at the certified
231production's expense, to substantiate each qualified expenditure
232and submit the results as a report, along with all
233substantiating data, to the Office of Film and Entertainment;
234and
235     3.  The Office of Film and Entertainment to review the
236accountant's submittal and report to the Office of Tourism,
237Trade, and Economic Development the final verified amount of
238actual qualified expenditures made by the certified production.
239     (g)1.4.  The Office of Tourism, Trade, and Economic
240Development shall determine and approve the incentive amount or
241the final amount of the tax credit award for to each certified
242applicant. The Office of Tourism, Trade, and Economic
243Development shall then notify the executive director of the
244Department of Revenue that the certified production has met the
245requirements of the financial incentive and tax credit program.
246     2.  The Office of Tourism, Trade, and Economic Development
247shall award all tax credits for the previous year by September
24830.
249     (h)(g)  The Office of Film and Entertainment shall ensure
250that, as a condition of receiving incentive funding or a tax
251credit under this section, marketing materials promoting this
252state as a tourist destination or film and entertainment
253production destination are included, when appropriate, at no
254cost to the state, which must, at a minimum, include placement
255in the end credits of a "Filmed in Florida" logo with size and
256placement commensurate to other logos included in the end
257credits or, if no logos are used, the statement "Filmed in
258Florida using Florida's Entertainment Industry Financial
259Incentive," or a similar statement approved by the Office of
260Film and Entertainment before such placement. The Office of Film
261and Entertainment shall develop a "Filmed in Florida" logo and
262supply it for the purposes specified in this paragraph.
263     (4)  TAX CREDIT ELIGIBILITY; ELECTION AND DISTRIBUTION;
264CARRYFORWARD; CONSOLIDATED RETURNS; PARTNERSHIP AND NONCORPORATE
265DISTRIBUTIONS; MERGERS OR ACQUISITIONS.--
266     (a)  Tax credit authorization.--For fiscal years beginning
267on or after July 1, 2009, and ending June 30, 2012, a qualified
268production is eligible for a tax credit against taxes due under
269chapter 220 or taxes collected or accrued under chapter 212.
270     (b)  Total tax credit.--The total amount of tax credits
271that may be awarded under this section is $75 million, allocated
272$25 million each fiscal year the incentive remains in effect. If
273the total amount of allocated credits applied for in any fiscal
274year exceeds the aggregate amount of tax credits allowed for
275such year under this section, such excess shall be treated as
276having been applied for on the first day of the next fiscal year
277in which credits are available. In any fiscal year, tax credits
278that are not awarded or that are forfeited due to the withdrawal
279of a certified production or to a production's actual qualified
280expenditures being less than the certified amount shall be
281available for award in subsequent fiscal years.
282     (c)  Election and distribution of tax credits.--A certified
283production company receiving a tax credit award under this
284section shall, at the time the credit is awarded by the Office
285of Tourism, Trade, and Economic Development after production is
286completed and all requirements to receive a credit award have
287been met, make an irrevocable election to apply the credit
288against taxes due under chapter 220, against taxes collected or
289accrued under chapter 212, or against a stated combination of
290the two taxes. The election shall be binding upon any
291distributee, successor, transferee, or purchaser. The Office of
292Tourism, Trade, and Economic Development shall notify the
293Department of Revenue of any election made pursuant to this
294paragraph within 5 business days of such election.
295     (d)  Tax credit carryforward.--If the certified production
296company cannot use the entire tax credit in the taxable year or
297reporting period in which the credit is awarded because of
298insufficient tax liability on the part of the certified
299production company, any excess amount may be carried forward to
300a succeeding taxable year or reporting period. A tax credit
301applied against taxes imposed under chapter 212 may be carried
302forward for a maximum of 5 years following the date of award,
303after which period the credit expires and may not be used. A tax
304credit applied against taxes imposed under chapter 220 may be
305carried forward for a maximum of 5 taxable years following the
306qualified production company's taxable year in which the credit
307was awarded, after which period the credit expires and may not
308be used.
309     (e)  Consolidated returns.--A certified production company
310that files a Florida consolidated return as a member of an
311affiliated group under s. 220.131(1) may be allowed the tax
312credit on a consolidated return basis up to the amount of the
313tax imposed upon the consolidated group under chapter 220.
314     (f)  Partnership and noncorporate distributions.--A
315qualified production company that is not a corporation as
316defined in s. 220.03 may elect to distribute tax credits awarded
317under this section to its partners or members in proportion to
318their respective distributive income or loss in the taxable year
319in which the tax credits were awarded.
320     (g)  Mergers or acquisitions.--Tax credits available under
321this section to a certified production company may succeed to a
322surviving or acquiring entity subject to the same conditions and
323limitations as described in this section; however, they may not
324be transferred again by the surviving or acquiring entity.
325     (5)  TRANSFER OF TAX CREDITS.--
326     (a)  Authorization.--Upon application to the Office of Film
327and Entertainment and approval by the Office of Tourism, Trade,
328and Economic Development, a certified production company, or a
329partner or member that has received a distribution under
330paragraph (4)(f), may elect to transfer, in whole or in part,
331any unused tax credit amount granted under this section. An
332election to transfer any unused tax credit amount under chapter
333212 or chapter 220 must be made no later than 5 years from the
334date the credit was awarded, after which period the credit
335expires and may not be used. The Office of Tourism, Trade, and
336Economic Development shall notify the Department of Revenue of
337the election and transfer within 5 business days of such
338election and transfer.
339     (b)  Number of transfers permitted.--A certified production
340company that has elected to apply a credit amount against taxes
341remitted under chapter 212 is permitted a one-time transfer of
342unused credits to one transferee. A certified production company
343that has elected to apply a credit amount against taxes due
344under chapter 220 is permitted a one-time transfer of unused
345credits to no more than four transferees, and such transfers
346shall occur in the same taxable year.
347     (c)  Minimum consideration.--The transfer or purchase of
348any amount of the tax credit shall not be exchanged for less
349than 75 percent of the credit's value.
350     (d)  Transferee rights and limitations.--The transferee is
351subject to the same rights and limitations as the certified
352production company awarded the tax credit, except that the
353transferee may not sell or otherwise transfer the tax credit.
354     (e)  Written contractual notice.--No later than 3 business
355days prior to the certified production company's election to
356transfer its awarded tax credit, the Office of Film and
357Entertainment shall receive written contractual notice, on a
358form approved by the Office of Tourism, Trade, and Economic
359Development and signed by both the certified production company
360and the transferee, describing the terms of the transfer and the
361intention of any purchaser to allocate payment for the film
362education program under paragraph (f) at the time the transfer
363is made.
364     (f)  Film education fee.--
365     1.  A purchaser of any transferred tax credit under this
366subsection shall pay an amount equal to 5 percent of the total
367amount paid for the tax credit into the Grants and Donations
368Trust Fund within the Executive Office of the Governor for use
369by the Office of Film and Entertainment within the Office of
370Tourism, Trade, and Economic Development for film education
371programs. The fees collected under this paragraph shall be
372subject to specific appropriation by the Legislature.
373     a.  Fifty percent of the fee collected under this paragraph
374shall be made available to the Office of Film and Entertainment
375for the purpose described in s. 288.1256.
376     b.  Fifty percent of the fee collected under this paragraph
377shall be transferred and provided to film and digital media
378programs at Florida institutions of higher education approved by
379the Office of Film and Entertainment to be applied as a grant
380toward production costs for a student-made production. To be
381eligible for this grant, a student-made production may not
382contain obscene content as defined in s. 847.001(10). The
383recipient of the transfer may choose the approved film or
384digital media program to receive these funds.
385     2.  This paragraph shall not apply to the transfer of tax
386credits to an affiliated company of the certified production.
387     (6)(4)  PRIORITY FOR INCENTIVE FUNDING AND ALLOCATION OF
388TAX CREDITS; WITHDRAWAL OF ELIGIBILITY; QUEUES.--
389     (a)  Priority for incentive funding and tax credit
390awards.--The priority of a qualified production for incentive
391funding or a tax credit award must be determined on a first-
392come, first-served basis within its appropriate queue. Each
393qualified production must be placed into the appropriate queue
394and is subject to the requirements of that queue.
395     (b)(e)  Withdrawal of eligibility Schedule.--Each qualified
396production or certified production shall continue on a
397reasonable schedule, which means beginning principal photography
398in this state no more than 45 calendar days before or after the
399date provided in the production's program program's application
400under subsection (3). The Office of Tourism, Trade, and Economic
401Development shall withdraw the eligibility of a qualified
402production or a certified production for incentive funding or a
403tax credit award if any such production does not continue on a
404reasonable schedule. The office shall recertify the tax credits
405to the next qualified or certified production or productions in
406the respective queue that have not been certified for their full
407maximum award and have not started principal photography before
408the tax credits become available.
409     (c)(b)  General production queue.--Eighty-five percent of
410incentive funding appropriated or of all tax credits awarded
411under this section in any state fiscal year must be dedicated to
412the general production queue. A production certified under this
413queue is eligible for a reimbursement or a tax credit award
414equal to 15 percent of its actual qualified expenditures. Within
415this queue:
416     1.  A qualified production, excluding commercials, music
417videos, and digital media projects, which demonstrates a minimum
418of $625,000 in qualified expenditures is eligible for up to a
419maximum of $8 million in incentive funding or a tax credit
420award. A qualified production spanning multiple state fiscal
421years may combine qualified expenditures from such fiscal years
422to satisfy the threshold.
423     2.  A qualified production company that produces national,
424international, or regional commercials, or music videos may be
425eligible for a maximum of $500,000 in incentive funding or a tax
426credit award if it demonstrates a minimum of $100,000 in
427qualified expenditures per national, international, or regional
428commercial or music video and exceeds a combined threshold of
429$500,000 after combining actual qualified expenditures from
430qualified commercials and music videos during a single state
431fiscal year. After a qualified production company that produces
432commercials, music videos, or both reaches the threshold of
433$500,000, it is eligible to apply for certification for
434incentive funding or a tax credit award.
435     3.  An off-season certified production is eligible for an
436additional 5-percent incentive funding or tax credit award on
437actual qualified expenditures. An off-season certified
438production that does not complete 75 percent of principal
439photography due to disruption caused by a hurricane or tropical
440storm may not be disqualified from eligibility for the
441additional 5-percent incentive or tax credit award as a result
442of the disruption.
443     4.  Each qualified production shall make a good faith
444effort to use existing providers of infrastructure or equipment
445in this state, including providers of camera gear, grip and
446lighting equipment, vehicle providers, and postproduction
447services when available in-state.
448     5.  A qualified high-impact television series shall be
449allowed first position in this queue for incentive funding or
450tax credits not yet certified.
451     (d)(c)  Independent Florida filmmaker queue.--Five percent
452of incentive funding appropriated or tax credits available under
453this section in any state fiscal year must be dedicated to the
454independent Florida filmmaker queue. A production certified
455under this queue is eligible for a financial incentive or tax
456credit award reimbursement equal to 15 percent of its actual
457qualified expenditures. An independent Florida film that meets
458the criteria of this queue and demonstrates a minimum of
459$100,000, but not more than $625,000, in total qualified
460expenditures is eligible for incentive funding or a tax credit
461award. To qualify for this queue, a qualified production must:
462     1.  Be planned as a feature film or documentary of no less
463than 70 minutes in length.
464     2.  Provide evidence of 50 percent of the financing for its
465total budget in an escrow account or other form dedicated to the
466production.
467     3.  Do all major postproduction in this state.
468     4.  Employ Florida workers in at least six of the following
469key positions: writer, director, producer, director of
470photography, star or one of the lead actors, unit production
471manager, editor, or production designer. As used in this
472subparagraph, the term "Florida worker" means a person who has
473been a resident of this state for at least 1 year before a
474production's application under subsection (3) was submitted or a
475person who graduated from a film school, college, university, or
476community college in this state no more than 5 years before such
477submittal or who is enrolled full-time in such a school,
478college, or university.
479     (e)(d)  Digital media projects queue.--Ten percent of
480incentive funding appropriated or tax credits available under
481this section in any state fiscal year shall be dedicated to the
482digital media projects queue. A production certified under this
483queue is eligible for a financial incentive or tax credit award
484reimbursement equal to 10 percent of its actual qualified
485expenditures. A qualified production that is a digital media
486project that demonstrates a minimum of $300,000 in total
487qualified expenditures is eligible for a maximum of $1 million
488in incentive funding or a tax credit award. As used in this
489paragraph, the term "qualified expenditures" means the wages or
490salaries paid to a resident of this state for working on a
491single qualified digital media project, up to a maximum of
492$200,000 in wages or salaries paid per resident. A qualified
493production company producing digital media projects may not
494qualify for more than three projects in any 1 fiscal year.
495Projects that extend beyond a fiscal year must reapply each
496fiscal year in order to be eligible for incentive funding or a
497tax credit award for that year.
498     (f)  Family-friendly productions.--A certified production
499determined by the Commissioner of Film and Entertainment, with
500the advice of the Florida Film and Entertainment Advisory
501Council, to be family friendly based on the review of the script
502and an interview with the director is eligible for an additional
503financial incentive or tax credit award reimbursement equal to 2
504percent of its actual qualified expenditures. Family-friendly
505productions are those that have cross-generational appeal; would
506be considered suitable for viewing by children age 5 and older;
507are appropriate in theme, content, and language for a broad
508family audience; embody a responsible resolution of issues; and
509do not exhibit any act of smoking, sex, nudity, or vulgar or
510profane language.
511     (g)  Productions in partnership with postsecondary
512education programs.--A certified production determined by the
513Commissioner of Film and Entertainment to have partnered with a
514state public postsecondary film-and-entertainment-related
515educational program in the production is eligible for an
516additional financial incentive or tax credit of 10 percent of
517its actual qualified expenditures. Productions in partnership
518with such postsecondary educational programs are those that
519provide opportunities for students through internships or in
520other capacities that will assist students in their educational
521responsibilities and in preparation for their future positions
522in the film and entertainment industry upon graduation.
523     (7)(5)  RULES, POLICIES, AND PROCEDURES.--
524     (a)  The Office of Tourism, Trade, and Economic Development
525may adopt rules under ss. 120.536(1) and 120.54 and develop
526policies and procedures to administer this section, including,
527but not limited to, rules specifying requirements for the
528application and approval process; records required for
529substantiation for incentive funding and tax credit awards;
530procedures for making the election in paragraph (4)(c); the
531manner and form of documentation required to claim tax credits
532awarded or transferred under this section; the determination of,
533qualification for, and certification for tax credits; the
534implementation of the Florida Graduate Film Investment Program
535in s. 288.1256; and marketing requirements for tax credit
536recipients.
537     (b)  The Department of Revenue may adopt rules pursuant to
538ss. 120.536(1) and 120.54 prescribing the forms and
539documentation needed to substantiate a claim for the tax credit
540and the specific procedures and guidelines for claiming the tax
541credit awarded or transferred under this section.
542     (8)  AUDIT AUTHORITY; REVOCATION AND FORFEITURE OF TAX
543CREDITS; FRAUDULENT CLAIMS.--
544     (a)  Audit authority.--The Department of Revenue may
545conduct examinations and audits as provided in s. 213.34 to
546verify that tax credits under this section have been received,
547transferred, and applied according to the requirements of this
548section. If the Department of Revenue determines that tax
549credits have not been received, transferred, or applied as
550required by this section, it may, in addition to the remedies
551provided in this subsection, pursue recovery of such funds
552pursuant to the laws and rules governing the assessment of
553taxes.
554     (b)  Revocation of tax credits.--The Office of Tourism,
555Trade, and Economic Development may revoke or modify any written
556decision qualifying, certifying, or otherwise granting
557eligibility for tax credits under this section if it is
558discovered that the tax credit applicant submitted any false
559statement, representation, or certification in any application,
560record, report, plan, or other document filed in an attempt to
561receive tax credits under this section. The Office of Tourism,
562Trade, and Economic Development shall immediately notify the
563Department of Revenue of any revoked or modified orders
564affecting previously certified tax credits.
565     (c)  Forfeiture of tax credits.--A determination by the
566Department of Revenue, as a result of an audit or examination by
567the Department of Revenue or from information received from the
568Office of Film and Entertainment, that an applicant received tax
569credits pursuant to this section to which the applicant was not
570entitled is grounds for forfeiture of previously claimed and
571awarded tax credits. The applicant is responsible for
572immediately returning forfeited tax credits to the Department of
573Revenue, together with the appropriate interest and penalty,
574computed from the date of receipt of such credits, and such
575funds shall be paid into the General Revenue Fund of the state.
576Tax credits purchased in good faith are not subject to
577forfeiture unless the transferee submitted fraudulent
578information in the purchase or failed to meet the requirements
579in subsection (5). The Department of Revenue shall immediately
580notify the Office of Tourism, Trade, and Economic Development of
581the forfeiture of previously claimed and awarded tax credits.
582     (d)(7)  Fraudulent claims FRAUD.--Any applicant that
583submits information under this section that includes fraudulent
584information is liable for reimbursement of the reasonable costs
585and fees associated with the review, processing, investigation,
586and prosecution of the fraudulent claim. An applicant that
587obtains a financial an incentive payment or a tax credit amount
588under this section through a claim that is fraudulent is liable
589for reimbursement of the financial incentive payment or tax
590credit amount plus a penalty in an amount double the financial
591incentive payment or the tax credit amount claimed and
592reimbursement of reasonable costs. The penalty is in addition to
593any criminal penalty to which the applicant is liable for the
594same acts. The applicant is also liable for costs and fees
595incurred by the state in investigating and prosecuting the
596fraudulent claim.
597     (9)(6)  ANNUAL REPORT.--Each October 1, the Office of Film
598and Entertainment shall provide an annual report for the
599previous fiscal year to the Governor, the President of the
600Senate, and the Speaker of the House of Representatives which
601outlines the return on investment and economic benefits to the
602state on funds expended pursuant to this section.
603     (10)  TAX CREDIT EXPIRATION.--On July 1, 2012, tax credits
604under this section may no longer be authorized, except that the
605tax credit carryforward provided for in this section shall
606continue to be valid for the period specified.
607     Section 2.  Section 288.1256, Florida Statutes, is created
608to read:
609     288.1256  Florida Graduate Film Investment Program.--
610     (1)  The Office of Film and Entertainment shall create and
611administer a program, using moneys deposited into the Grants and
612Donations Trust Fund of the Executive Office of the Governor
613pursuant to s. 288.1254(5)(f), to award either a grant or a loan
614guarantee for films that are:
615     (a)  Written, produced, and directed by Florida residents
616who are graduates of an Office of Film and Entertainment
617approved film program at a Florida institution of higher
618education; and
619     (b)  Determined by the Commissioner of Film and
620Entertainment, with the advice of the Florida Film and
621Entertainment Advisory Council, to be family-friendly based on
622the review of the script and a personal interview with the
623director. Family-friendly productions are those that have cross-
624generational appeal; would be considered suitable for viewing by
625children age 5 and older; are appropriate in theme, content, and
626language for a broad family audience; embody a responsible
627resolution of issues; and do not exhibit any act of smoking,
628sex, nudity, or vulgar or profane language.
629     (2)  Films that are deemed by the Office of Film and
630Entertainment to contain obscene content as defined in s.
631847.001(10) are not eligible for this program.
632     Section 3.  Paragraph (j) is added to subsection (5) of
633section 288.1252, Florida Statutes, to read:
634     288.1252  Florida Film and Entertainment Advisory Council;
635creation; purpose; membership; powers and duties.--
636     (5)  POWERS AND DUTIES.--The Florida Film and Entertainment
637Advisory Council shall have all the powers necessary or
638convenient to carry out and effectuate the purposes and
639provisions of this act, including, but not limited to, the power
640to:
641     (j)  Advise whether a film produced under s. 288.1256 meets
642the criteria delineated in that section.
643     Section 4.  Paragraph (a) of subsection (1) of section
644220.13, Florida Statutes, is amended to read:
645     220.13  "Adjusted federal income" defined.--
646     (1)  The term "adjusted federal income" means an amount
647equal to the taxpayer's taxable income as defined in subsection
648(2), or such taxable income of more than one taxpayer as
649provided in s. 220.131, for the taxable year, adjusted as
650follows:
651     (a)  Additions.--There shall be added to such taxable
652income:
653     1.  The amount of any tax upon or measured by income,
654excluding taxes based on gross receipts or revenues, paid or
655accrued as a liability to the District of Columbia or any state
656of the United States which is deductible from gross income in
657the computation of taxable income for the taxable year.
658     2.  The amount of interest which is excluded from taxable
659income under s. 103(a) of the Internal Revenue Code or any other
660federal law, less the associated expenses disallowed in the
661computation of taxable income under s. 265 of the Internal
662Revenue Code or any other law, excluding 60 percent of any
663amounts included in alternative minimum taxable income, as
664defined in s. 55(b)(2) of the Internal Revenue Code, if the
665taxpayer pays tax under s. 220.11(3).
666     3.  In the case of a regulated investment company or real
667estate investment trust, an amount equal to the excess of the
668net long-term capital gain for the taxable year over the amount
669of the capital gain dividends attributable to the taxable year.
670     4.  That portion of the wages or salaries paid or incurred
671for the taxable year which is equal to the amount of the credit
672allowable for the taxable year under s. 220.181. This
673subparagraph shall expire on the date specified in s. 290.016
674for the expiration of the Florida Enterprise Zone Act.
675     5.  That portion of the ad valorem school taxes paid or
676incurred for the taxable year which is equal to the amount of
677the credit allowable for the taxable year under s. 220.182. This
678subparagraph shall expire on the date specified in s. 290.016
679for the expiration of the Florida Enterprise Zone Act.
680     6.  The amount of emergency excise tax paid or accrued as a
681liability to this state under chapter 221 which tax is
682deductible from gross income in the computation of taxable
683income for the taxable year.
684     7.  That portion of assessments to fund a guaranty
685association incurred for the taxable year which is equal to the
686amount of the credit allowable for the taxable year.
687     8.  In the case of a nonprofit corporation which holds a
688pari-mutuel permit and which is exempt from federal income tax
689as a farmers' cooperative, an amount equal to the excess of the
690gross income attributable to the pari-mutuel operations over the
691attributable expenses for the taxable year.
692     9.  The amount taken as a credit for the taxable year under
693s. 220.1895.
694     10.  Up to nine percent of the eligible basis of any
695designated project which is equal to the credit allowable for
696the taxable year under s. 220.185.
697     11.  The amount taken as a credit for the taxable year
698under s. 220.187.
699     12.  The amount taken as a credit for the taxable year
700under s. 220.192.
701     13.  The amount taken as a credit for the taxable year
702under s. 220.193.
703     14.  Any amount in excess of $25,000 allowable as a
704deduction for federal income tax purposes under s. 179 of the
705Internal Revenue Code of 1986, as amended, for the taxable year.
706     15.  Any amount allowable as a deduction for federal income
707tax purposes under s. 167 or s. 168 of the Internal Revenue Code
708of 1986, as amended, for the taxable year to the extent that
709such amount includes bonus depreciation allowable as deduction
710under s. 168(k).
711     16.  The amount taken as a credit for the taxable year
712under s. 288.1254.
713     Section 5.  Subsection (8) of section 220.02, Florida
714Statutes, is amended to read:
715     220.02  Legislative intent.--
716     (8)  It is the intent of the Legislature that credits
717against either the corporate income tax or the franchise tax be
718applied in the following order: those enumerated in s. 631.828,
719those enumerated in s. 220.191, those enumerated in s. 220.181,
720those enumerated in s. 220.183, those enumerated in s. 220.182,
721those enumerated in s. 220.1895, those enumerated in s. 221.02,
722those enumerated in s. 220.184, those enumerated in s. 220.186,
723those enumerated in s. 220.1845, those enumerated in s. 220.19,
724those enumerated in s. 220.185, those enumerated in s. 220.187,
725those enumerated in s. 220.192, and those enumerated in s.
726220.193, and those enumerated in s. 288.1254. The Department of
727Revenue may adopt rules pursuant to ss. 120.536(1) and 120.54
728prescribing the forms and documentation needed to substantiate a
729claim for the tax credit and the specific procedures and
730guidelines for claiming the credit awarded or transferred under
731s. 288.1254.
732     Section 6.  Paragraph (z) is added to subsection (8) of
733section 213.053, Florida Statutes, to read:
734     213.053  Confidentiality and information sharing.--
735     (8)  Notwithstanding any other provision of this section,
736the department may provide:
737     (z)  Information relative to tax credits taken under s.
738288.1254 to the Office of Film and Entertainment and the Office
739of Tourism, Trade, and Economic Development.
740
741Disclosure of information under this subsection shall be
742pursuant to a written agreement between the executive director
743and the agency. Such agencies, governmental or nongovernmental,
744shall be bound by the same requirements of confidentiality as
745the Department of Revenue. Breach of confidentiality is a
746misdemeanor of the first degree, punishable as provided by s.
747775.082 or s. 775.083.
748     Section 7.  Paragraph (q) is added to subsection (5) of
749section 212.08, Florida Statutes, to read:
750     212.08  Sales, rental, use, consumption, distribution, and
751storage tax; specified exemptions.--The sale at retail, the
752rental, the use, the consumption, the distribution, and the
753storage to be used or consumed in this state of the following
754are hereby specifically exempt from the tax imposed by this
755chapter.
756     (5)  EXEMPTIONS; ACCOUNT OF USE.--
757     (q)  Entertainment industry tax credit; requirement for
758electronic funds transfer.--
759     1.  For the fiscal years beginning July 1, 2009, and ending
760June 30, 2012, a qualified production, as defined in s.
761288.1254(1)(j), is eligible for tax credits against its state
762sales and use tax liabilities as provided in s. 288.1254.
763     2.  The credit shall be deducted from any sales and use tax
764remitted by the dealer to the department by electronic funds
765transfer and can only be deducted on a sales and use tax return
766initiated through electronic data interchange. The dealer shall
767separately state the credit on the electronic return. The net
768amount of tax due and payable must be remitted by electronic
769funds transfer. If the credit for the qualified expenditures is
770larger than the amount owed on the sales and use tax return, the
771amount of the credit may be carried forward to a succeeding
772reporting period. A dealer may only obtain a credit using the
773method described in this subparagraph. A dealer is not
774authorized to obtain a credit by applying for a refund.
775     3.  The department may adopt rules pursuant to ss.
776120.536(1) and 120.54 to implement and administer this
777paragraph, including rules prescribing the forms and
778documentation needed to substantiate a claim for the tax credit
779and the specific procedures and guidelines for claiming the
780credit awarded or transferred under this paragraph.
781     Section 8.  If any provision of this act or the application
782thereof to any person or circumstance is held invalid, the
783invalidity shall not affect other provisions or applications of
784the act which can be given effect without the invalid provision
785or application, and to this end the provisions of this act are
786declared severable.
787     Section 9.  This act shall take effect July 1, 2009.


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