HB 13A

1	A bill to be entitled
2	An act relating to the corporate income tax; providing
3	legislative findings and intent; amending s. 220.03, F.S.;
4	revising definitions; providing additional definitions;
5	amending s. 220.13, F.S.; revising the definition of the
6	term "adjusted federal income"; prohibiting certain
7	deductibles for certain water's edge group members;
8	providing an additional subtraction from adjusted federal
9	income; creating s. 220.136, F.S.; defining the term
10	"water's edge group reporting method"; requiring water's
11	edge group members to use a certain group income reporting
12	method; providing methodology requirements; providing
13	return filing requirements; requiring domestic disclosure
14	spreadsheet filing requirements; providing a definition;
15	authorizing the Department of Revenue to adopt rules and
16	forms; amending ss. 220.14, 220.15, 220.183, 220.1845,
17	220.187, 220.19, 220.191, 220.192, 220.193, 220.51, and
18	220.64, F.S.; replacing or deleting provisions relating to
19	consolidated returns for affiliated groups to conform to
20	water's edge group requirements; amending s. 376.30781,
21	F.S.; conforming cross-references; providing for
22	transitional rules; repealing s. 220.131, F.S., relating
23	to consolidated returns for affiliated groups; providing
24	appropriations; providing an effective date.
25
26	Be It Enacted by the Legislature of the State of Florida:
27
28	Section 1.  Legislative finding; intent.--The Legislature
29	finds that a separate accounting system for corporations is
30	sometimes inadequate to accurately measure the income of
31	multinational and multistate corporations doing business in this
32	state and this may create tax disadvantages for corporations in
33	this state in competition with those multinational and
34	multistate corporations. Corporate business is increasingly
35	conducted through groups of commonly owned corporations, it is
36	the intent of the Legislature to adopt a combined system of
37	income tax reporting for corporations to more accurately measure
38	the business activities of corporations.
39	Section 2.  Paragraphs (y) and (z) of subsection (1) of
40	section 220.03, Florida Statutes, are amended, and paragraphs
41	(gg) and (hh) are added to that subsection, to read:
42	220.03  Definitions.--
43	(1)  SPECIFIC TERMS.--When used in this code, and when not
44	otherwise distinctly expressed or manifestly incompatible with
45	the intent thereof, the following terms shall have the following
46	meanings:
47	(y)  "Taxable year" or "tax year" means the calendar or
48	fiscal year upon the basis of which net income is computed under
49	this code, including, in the case of a return made for a
50	fractional part of a year, the period for which such return is
51	made.
52	(z)  "Taxpayer" means any corporation subject to the tax
53	imposed by this code, and includes all corporations that are
54	members of a water's edge group for which a consolidated return
55	is filed under s. 220.131. However, "taxpayer" does not include
56	a corporation having no individuals (including individuals
57	employed by an affiliate) receiving compensation in this state
58	as defined in s. 220.15 when the only property owned or leased
59	by said corporation (including an affiliate) in this state is
60	located at the premises of a printer with which it has
61	contracted for printing, if such property consists of the final
62	printed product, property which becomes a part of the final
63	printed product, or property from which the printed product is
64	produced.
65	(gg)  "Tax haven" means a jurisdiction that, for a
66	particular tax year in question, is identified by the
67	Organization for Economic Co-operation and Development as a tax
68	haven or as having a harmful preferential tax regime or a
69	jurisdiction that has no, or a nominal, effective tax on
70	relevant income and:
71	1.  Has laws or practices that prevent effective exchange
72	of information for tax purposes with other governments regarding
73	taxpayers subject to, or benefiting from, the tax regime;
74	2.  Lacks transparency. For purposes of this subparagraph,
75	a tax regime lacks transparency if the details of legislative,
76	legal, or administrative provisions are not open to public
77	scrutiny and apparent, or are not consistently applied among
78	similarly situated taxpayers;
79	3.  Facilitates the establishment of foreign-owned entities
80	without the need for a local substantive presence or prohibits
81	these entities from having any commercial impact on the local
82	economy;
83	4.  Explicitly or implicitly excludes the jurisdiction's
84	resident taxpayers from taking advantage of the tax regime's
85	benefits or prohibits enterprises that benefit from the regime
86	from operating in the jurisdiction's domestic market; or
87	5.  Has created a tax regime which is favorable for tax
88	avoidance, based upon an overall assessment of relevant factors,
89	including, but not limited to, whether the jurisdiction has a
90	significant untaxed offshore financial or other services sector
91	relative to its overall economy.
92
93	For purposes of this paragraph, the term "tax regime" means a
94	set or system of rules, laws, regulations, or practices by which
95	taxes are imposed on any person, corporation, or entity or on
96	any income, property, incident, indicia, or activity pursuant to
97	governmental authority.
98	(hh)  "Water's edge group" means a group of corporations
99	related through common ownership the business activities of
100	which are integrated with, dependent upon, or contribute to a
101	flow of value among members of the group. When 50 percent or
102	more of the outstanding voting stock of a corporation is under
103	direct or indirect ownership or control of such a group, the
104	corporation shall be considered to be part of a water's edge
105	group. A corporation shall be considered unitary unless clearly
106	shown by the facts and circumstances of the individual case to
107	not be a member of a water's edge group. When direct or indirect
108	ownership or control is less than 50 percent of the outstanding
109	voting stock, all elements of the business activities shall be
110	considered in determining whether a corporation qualifies as a
111	member of a water's edge group. A water's edge group shall not
112	include the income of any corporation which conducts business
113	outside the United States if 80 percent or more of the
114	corporation's property and payroll, as determined by the
115	apportionment factors described in ss. 220.15 and 220.151, is
116	assignable to locations outside the United States. In
117	determining whether voting stock is owned indirectly, the
118	attribution rules of s. 318 of the Internal Revenue Code of
119	1986, as amended, shall be used. For purposes of this paragraph,
120	the term "United States" is restricted to the states of the
121	United States, the District of Columbia, and the Commonwealth of
122	Puerto Rico. All income of a water's edge group is presumed to
123	be apportionable business income. A taxpayer has the burden of
124	proof regarding the issue of whether or not a corporation is a
125	member of a water's edge group and whether or not such income is
126	apportionable business income.
127	Section 3.  Subsection (1) and paragraph (f) of subsection
128	(2) of section 220.13, Florida Statutes, are amended to read:
129	220.13  "Adjusted federal income" defined.--
130	(1)  The term "adjusted federal income" means an amount
131	equal to the taxpayer's taxable income as defined in subsection
132	(2), or such taxable income of more than one taxpayer as
133	provided in s. 220.136 220.131, for the taxable year, adjusted
134	as follows:
135	(a)  Additions.--There shall be added to such taxable
136	income:
137	1.  The amount of any tax upon or measured by income,
138	excluding taxes based on gross receipts or revenues, paid or
139	accrued as a liability to the District of Columbia or any state
140	of the United States which is deductible from gross income in
141	the computation of taxable income for the taxable year.
142	2.  The amount of interest which is excluded from taxable
143	income under s. 103(a) of the Internal Revenue Code or any other
144	federal law, less the associated expenses disallowed in the
145	computation of taxable income under s. 265 of the Internal
146	Revenue Code or any other law, excluding 60 percent of any
147	amounts included in alternative minimum taxable income, as
148	defined in s. 55(b)(2) of the Internal Revenue Code, if the
149	taxpayer pays tax under s. 220.11(3).
150	3.  In the case of a regulated investment company or real
151	estate investment trust, an amount equal to the excess of the
152	net long-term capital gain for the taxable year over the amount
153	of the capital gain dividends attributable to the taxable year.
154	4.  That portion of the wages or salaries paid or incurred
155	for the taxable year which is equal to the amount of the credit
156	allowable for the taxable year under s. 220.181. This
157	subparagraph shall expire on the date specified in s. 290.016
158	for the expiration of the Florida Enterprise Zone Act.
159	5.  That portion of the ad valorem school taxes paid or
160	incurred for the taxable year which is equal to the amount of
161	the credit allowable for the taxable year under s. 220.182. This
162	subparagraph shall expire on the date specified in s. 290.016
163	for the expiration of the Florida Enterprise Zone Act.
164	6.  The amount of emergency excise tax paid or accrued as a
165	liability to this state under chapter 221 which tax is
166	deductible from gross income in the computation of taxable
167	income for the taxable year.
168	7.  That portion of assessments to fund a guaranty
169	association incurred for the taxable year which is equal to the
170	amount of the credit allowable for the taxable year.
171	8.  In the case of a nonprofit corporation which holds a
172	pari-mutuel permit and which is exempt from federal income tax
173	as a farmers' cooperative, an amount equal to the excess of the
174	gross income attributable to the pari-mutuel operations over the
175	attributable expenses for the taxable year.
176	9.  The amount taken as a credit for the taxable year under
177	s. 220.1895.
178	10.  Up to nine percent of the eligible basis of any
179	designated project which is equal to the credit allowable for
180	the taxable year under s. 220.185.
181	11.  The amount taken as a credit for the taxable year
182	under s. 220.187.
183	12.  The amount taken as a credit for the taxable year
184	under s. 220.192.
185	13.  The amount taken as a credit for the taxable year
186	under s. 220.193.
187	14.  Any amount in excess of $25,000 allowable as a
188	deduction for federal income tax purposes under s. 179 of the
189	Internal Revenue Code of 1986, as amended, for the taxable year.
190	15.  Any amount allowable as a deduction for federal income
191	tax purposes under s. 167 or s. 168 of the Internal Revenue Code
192	of 1986, as amended, for the taxable year to the extent that
193	such amount includes bonus depreciation allowable as deduction
194	under s. 168(k).
195	(b)  Subtractions.--
196	1.  There shall be subtracted from such taxable income:
197	a.  The net operating loss deduction allowable for federal
198	income tax purposes under s. 172 of the Internal Revenue Code
199	for the taxable year,
200	b.  The net capital loss allowable for federal income tax
201	purposes under s. 1212 of the Internal Revenue Code for the
202	taxable year,
203	c.  The excess charitable contribution deduction allowable
204	for federal income tax purposes under s. 170(d)(2) of the
205	Internal Revenue Code for the taxable year, and
206	d.  The excess contributions deductions allowable for
207	federal income tax purposes under s. 404 of the Internal Revenue
208	Code for the taxable year.
209
210	However, a net operating loss and a capital loss shall never be
211	carried back as a deduction to a prior taxable year, but all
212	deductions attributable to such losses shall be deemed net
213	operating loss carryovers and capital loss carryovers,
214	respectively, and treated in the same manner, to the same
215	extent, and for the same time periods as are prescribed for such
216	carryovers in ss. 172 and 1212, respectively, of the Internal
217	Revenue Code. A deductible may not be allowed for net operating
218	losses, net capital losses, or excess contribution deductions
219	under ss. 170(d)(2), 172, 1212, and 404 of the Internal Revenue
220	Code of 1986, as amended, for a member of a water's edge group
221	that is not a United States member.
222	2.  There shall be subtracted from such taxable income any
223	amount to the extent included therein the following:
224	a.  Dividends treated as received from sources without the
225	United States, as determined under s. 862 of the Internal
226	Revenue Code.
227	b.  All amounts included in taxable income under s. 78 or
228	s. 951 of the Internal Revenue Code.
229
230	However, as to any amount subtracted under this subparagraph,
231	there shall be added to such taxable income all expenses
232	deducted on the taxpayer's return for the taxable year which are
233	attributable, directly or indirectly, to such subtracted amount.
234	Further, no amount shall be subtracted with respect to dividends
235	paid or deemed paid by a Domestic International Sales
236	Corporation.
237	3.  In computing "adjusted federal income" for taxable
238	years beginning after December 31, 1976, there shall be allowed
239	as a deduction the amount of wages and salaries paid or incurred
240	within this state for the taxable year for which no deduction is
241	allowed pursuant to s. 280C(a) of the Internal Revenue Code
242	(relating to credit for employment of certain new employees).
243	4.  There shall be subtracted from such taxable income any
244	amount of nonbusiness income included therein.
245	5.  There shall be subtracted any amount of taxes of
246	foreign countries allowable as credits for taxable years
247	beginning on or after September 1, 1985, under s. 901 of the
248	Internal Revenue Code to any corporation which derived less than
249	20 percent of its gross income or loss for its taxable year
250	ended in 1984 from sources within the United States, as
251	described in s. 861(a)(2)(A) of the Internal Revenue Code, not
252	including credits allowed under ss. 902 and 960 of the Internal
253	Revenue Code, withholding taxes on dividends within the meaning
254	of sub-subparagraph 2.a., and withholding taxes on royalties,
255	interest, technical service fees, and capital gains.
256	6.  There shall be subtracted from such taxable income, to
257	the extent included in such taxable income, amounts received by
258	a member of a water's edge group that was a dividend paid by
259	another member of the same water's edge group.
260	7.6.  Notwithstanding any other provision of this code,
261	except with respect to amounts subtracted pursuant to
262	subparagraphs 1. and 3., any increment of any apportionment
263	factor which is directly related to an increment of gross
264	receipts or income which is deducted, subtracted, or otherwise
265	excluded in determining adjusted federal income shall be
266	excluded from both the numerator and denominator of such
267	apportionment factor. Further, all valuations made for
268	apportionment factor purposes shall be made on a basis
269	consistent with the taxpayer's method of accounting for federal
270	income tax purposes.
271	(c)  Installment sales occurring after October 19, 1980.--
272	1.  In the case of any disposition made after October 19,
273	1980, the income from an installment sale shall be taken into
274	account for the purposes of this code in the same manner that
275	such income is taken into account for federal income tax
276	purposes.
277	2.  Any taxpayer who regularly sells or otherwise disposes
278	of personal property on the installment plan and reports the
279	income therefrom on the installment method for federal income
280	tax purposes under s. 453(a) of the Internal Revenue Code shall
281	report such income in the same manner under this code.
282	(d)  Nonallowable deductions.--A deduction for net
283	operating losses, net capital losses, or excess contributions
284	deductions under ss. 170(d)(2), 172, 1212, and 404 of the
285	Internal Revenue Code which has been allowed in a prior taxable
286	year for Florida tax purposes shall not be allowed for Florida
287	tax purposes, notwithstanding the fact that such deduction has
288	not been fully utilized for federal tax purposes.
289	(2)  For purposes of this section, a taxpayer's taxable
290	income for the taxable year means taxable income as defined in
291	s. 63 of the Internal Revenue Code and properly reportable for
292	federal income tax purposes for the taxable year, but subject to
293	the limitations set forth in paragraph (1)(b) with respect to
294	the deductions provided by ss. 172 (relating to net operating
295	losses), 170(d)(2) (relating to excess charitable
296	contributions), 404(a)(1)(D) (relating to excess pension trust
297	contributions), 404(a)(3)(A) and (B) (to the extent relating to
298	excess stock bonus and profit-sharing trust contributions), and
299	1212 (relating to capital losses) of the Internal Revenue Code,
300	except that, subject to the same limitations, the term:
301	(f)  "Taxable income," in the case of a corporation which
302	is a member of an affiliated group of corporations filing a
303	consolidated income tax return for the taxable year for federal
304	income tax purposes, means taxable income of such corporation
305	for federal income tax purposes as if such corporation had filed
306	a separate federal income tax return for the taxable year and
307	each preceding taxable year for which it was a member of an
308	affiliated group, unless a consolidated return for the taxpayer
309	and others is required or elected under s. 220.131;
310	Section 4.  Section 220.136, Florida Statutes, is created
311	to read:
312	220.136  Water's edge groups; special reporting
313	requirements.--
314	(1)  For purposes of this section, the term "water's edge
315	group reporting method" means the determination of taxable
316	business profits for a group of entities conducting a unitary
317	business by adding combined net income and the additions and
318	deductions provided in s. 220.13 for members of the group and
319	apportioning the results as provided in ss. 220.15 and 220.151.
320	(2)  All members of a water's edge group shall use the
321	water's edge group reporting method. Under the water's edge
322	group reporting method:
323	(a)  Adjusted federal income for purposes of s. 220.12
324	means the sum of adjusted federal income for all members of the
325	group determined for a concurrent taxable year.
326	(b)  The denominators of the apportionment factors shall be
327	calculated for all members of the water's edge group combined.
328	(c)  The statutory apportionment formula shall be used for
329	all members of the water's edge group, unless an alternate
330	method is determined to be more appropriate by the department.
331	(d)  Intercompany sales transactions made between members
332	of the water's edge group shall be eliminated in the computation
333	of the sales factor pursuant to ss. 220.15 and 220.151. As used
334	in this subsection, the term "sales" includes, but is not
335	limited to, loans, payments for the use of intangibles,
336	dividends, and management fees.
337	(e)  Each taxpayer shall apportion adjusted federal income
338	under s. 220.15 as a member of a water's edge group that files a
339	water's edge group return under this section based upon the
340	apportionment factors described in s. 220.15. For purposes of
341	this subsection, each special industry member included in a
342	water's edge group filing a water's edge group return under this
343	section, which would otherwise be permitted to use a special
344	method of apportionment under s. 220.151, shall construct the
345	numerator of its sales, property, and payroll factors,
346	respectively, by multiplying the denominator of each such factor
347	by the premiums or revenue miles factor ratio otherwise
348	applicable pursuant to s. 220.151 in the manner prescribed by
349	the department by rule.
350	(f)  For purposes of this subsection, each special industry
351	member included in a water's edge group return, which member
352	would otherwise be permitted to use a special method of
353	apportionment under s. 220.151, shall construct the numerator of
354	its sales, property, and payroll factors, respectively, by
355	multiplying the denominator of each such factor by the premiums
356	or revenue miles factor ratio otherwise applicable pursuant to
357	s. 220.151 in the manner prescribed by the department by rule.
358	(g)  The income attributable to the activities in this
359	state of a corporation exempt from taxation because of Pub. L.
360	No. 86-272 is excluded from the sales factor numerator on a
361	water's edge group filing a combined water's edge group return
362	even though an affiliated corporation may have nexus with this
363	state and is subject to tax in this state.
364	(3)(a)  The single water's edge group return must be filed
365	in the name and with the federal employer identification number
366	of the parent corporation if the parent is a member of a water's
367	edge group and has nexus with this state. If there is no parent
368	corporation, if the parent is not a water's edge group member,
369	or if the parent does not have nexus with this state, the
370	members of the water's edge group shall choose a Florida
371	taxpayer member to file the return. After such a filing member
372	has been selected, such member must remain the same in
373	subsequent years unless an ownership change occurs or the filing
374	member no longer has nexus with this state. The return must be
375	signed by a responsible officer of the filing member as the
376	agent of all members of the water's edge group subject to tax by
377	this state.
378	(b)  If the taxable years of the members of the water's
379	edge group differ, the filing member's taxable year must be used
380	to determine the net income for this state of the water's edge
381	group. If the precise amount of a water's edge group member's
382	income can be readily determined from the books for the months
383	involved in the filing member's taxable year, those actual
384	amounts shall be used. In the absence of such a precise
385	determination, the income of a water's edge group member must be
386	converted to conform to the taxable year of the filing member on
387	the basis of the number of months falling within the applicable
388	taxable year. This method may be used only if the return can be
389	timely filed after the member's taxable year ends. As an
390	alternative, the water's edge group may include in its taxable
391	income all of the taxable income of a group member whose taxable
392	year ends within the taxable year of the water's edge group.
393	Once one of these methods is used for a water's edge group
394	member, that member must continue to use that method for
395	succeeding years for as long as the corporation remains a member
396	of the water's edge group. After the combined taxable income of
397	the water's edge group is determined based upon the filing
398	member's taxable year, the apportionment factor must be computed
399	on the basis of the same taxable year.
400	(4)  A water's edge group shall file a domestic disclosure
401	spreadsheet in the manner and form prescribed by rule by the
402	department. The term "domestic disclosure spreadsheet" means a
403	spreadsheet that fully discloses the income reported to each
404	state, the state tax liability, the method used for apportioning
405	or allocating income to the various states, and other
406	information provided for by rule as may be necessary to
407	determine the proper amount of tax due to each state and to
408	identify the water's edge group.
409	(5)  The department may adopt rules and forms by rule as
410	may be necessary or appropriate to administer and implement this
411	section. It is the intent of the Legislature, by this section,
412	to grant the department extensive authority to adopt rules and
413	forms describing and defining principles for determining the
414	existence of a water's edge group business, definitions of
415	common control, and methods of reporting and related forms,
416	principles, and definitions.
417	Section 5.  Subsection (3) of section 220.14, Florida
418	Statutes, is amended to read:
419	220.14  Exemption.--
420	(3)  Only one exemption shall be allowed to taxpayers
421	filing a combined water's edge group consolidated return under
422	this code.
423	Section 6.  Paragraph (c) of subsection (5) of section
424	220.15, Florida Statutes, is amended to read:
425	220.15  Apportionment of adjusted federal income.--
426	(5)  The sales factor is a fraction the numerator of which
427	is the total sales of the taxpayer in this state during the
428	taxable year or period and the denominator of which is the total
429	sales of the taxpayer everywhere during the taxable year or
430	period.
431	(c)  Sales of a financial organization, including, but not
432	limited to, banking and savings institutions, investment
433	companies, real estate investment trusts, and brokerage
434	companies, occur in this state if derived from:
435	1.  Fees, commissions, or other compensation for financial
436	services rendered within this state;
437	2.  Gross profits from trading in stocks, bonds, or other
438	securities managed within this state;
439	3.  Interest received within this state, other than
440	interest from loans secured by mortgages, deeds of trust, or
441	other liens upon real or tangible personal property located
442	without this state, and dividends received within this state;
443	4.  Interest charged to customers at places of business
444	maintained within this state for carrying debit balances of
445	margin accounts, without deduction of any costs incurred in
446	carrying such accounts;
447	5.  Interest, fees, commissions, or other charges or gains
448	from loans secured by mortgages, deeds of trust, or other liens
449	upon real or tangible personal property located in this state or
450	from installment sale agreements originally executed by a
451	taxpayer or the taxpayer's agent to sell real or tangible
452	personal property located in this state;
453	6.  Rents from real or tangible personal property located
454	in this state; or
455	7.  Any other gross income, including other interest,
456	resulting from the operation as a financial organization within
457	this state.
458
459	In computing the amounts under this paragraph, any amount
460	received by a member of an affiliated group (determined under s.
461	1504(a) of the Internal Revenue Code, but without reference to
462	whether any such corporation is an "includable corporation"
463	under s. 1504(b) of the Internal Revenue Code) from another
464	member of such group shall be included only to the extent such
465	amount exceeds expenses of the recipient directly related
466	thereto.
467	Section 7.  Paragraphs (f), (g), and (h) of subsection (1)
468	of section 220.183, Florida Statutes, are amended to read:
469	220.183  Community contribution tax credit.--
470	(1)  AUTHORIZATION TO GRANT COMMUNITY CONTRIBUTION TAX
471	CREDITS; LIMITATIONS ON INDIVIDUAL CREDITS AND PROGRAM
472	SPENDING.--
473	(f)  A taxpayer who files a Florida consolidated return as
474	a member of an affiliated group pursuant to s. 220.131(1) may be
475	allowed the credit on a consolidated return basis.
476	(f)(g)  A taxpayer who is eligible to receive the credit
477	provided for in s. 624.5105 is not eligible to receive the
478	credit provided by this section.
479	(g)(h)  Notwithstanding paragraph (c), and for the 2008-
480	2009 fiscal year only, the total amount of tax credit which may
481	be granted for all programs approved under this section, s.
482	212.08(5)(p), and s. 624.5105 is $13 million annually for
483	projects that provide homeownership opportunities for low-income
484	or very-low-income households as defined in s. 420.9071(19) and
485	(28) and $3.5 million annually for all other projects. This
486	paragraph expires June 30, 2009.
487	Section 8.  Subsection (1) of section 220.1845, Florida
488	Statutes, is amended to read:
489	220.1845  Contaminated site rehabilitation tax credit.--
490	(1)  AUTHORIZATION FOR TAX CREDIT; LIMITATIONS.--
491	(a)  A credit in the amount of 50 percent of the costs of
492	voluntary cleanup activity that is integral to site
493	rehabilitation at the following sites is available against any
494	tax due for a taxable year under this chapter:
495	1.  A drycleaning-solvent-contaminated site eligible for
496	state-funded site rehabilitation under s. 376.3078(3);
497	2.  A drycleaning-solvent-contaminated site at which site
498	rehabilitation is undertaken by the real property owner pursuant
499	to s. 376.3078(11), if the real property owner is not also, and
500	has never been, the owner or operator of the drycleaning
501	facility where the contamination exists; or
502	3.  A brownfield site in a designated brownfield area under
503	s. 376.80.
504	(b)  A tax credit applicant, or multiple tax credit
505	applicants working jointly to clean up a single site, may not be
506	granted more than $500,000 per year in tax credits for each site
507	voluntarily rehabilitated. Multiple tax credit applicants shall
508	be granted tax credits in the same proportion as their
509	contribution to payment of cleanup costs. Subject to the same
510	conditions and limitations as provided in this section, a
511	municipality, county, or other tax credit applicant which
512	voluntarily rehabilitates a site may receive not more than
513	$500,000 per year in tax credits which it can subsequently
514	transfer subject to the provisions in paragraph (f) (g).
515	(c)  If the credit granted under this section is not fully
516	used in any one year because of insufficient tax liability on
517	the part of the corporation, the unused amount may be carried
518	forward for up to 5 years. The carryover credit may be used in a
519	subsequent year if the tax imposed by this chapter for that year
520	exceeds the credit for which the corporation is eligible in that
521	year after applying the other credits and unused carryovers in
522	the order provided by s. 220.02(8). If during the 5-year period
523	the credit is transferred, in whole or in part, pursuant to
524	paragraph (f) (g), each transferee has 5 years after the date of
525	transfer to use its credit.
526	(d)  A taxpayer that files a consolidated return in this
527	state as a member of an affiliated group under s. 220.131(1) may
528	be allowed the credit on a consolidated return basis up to the
529	amount of tax imposed upon the consolidated group.
530	(d)(e)  A tax credit applicant that receives state-funded
531	site rehabilitation under s. 376.3078(3) for rehabilitation of a
532	drycleaning-solvent-contaminated site is ineligible to receive
533	credit under this section for costs incurred by the tax credit
534	applicant in conjunction with the rehabilitation of that site
535	during the same time period that state-administered site
536	rehabilitation was underway.
537	(e)(f)  The total amount of the tax credits which may be
538	granted under this section is $2 million annually.
539	(f)(g)1.  Tax credits that may be available under this
540	section to an entity eligible under s. 376.30781 may be
541	transferred after a merger or acquisition to the surviving or
542	acquiring entity and used in the same manner and with the same
543	limitations.
544	2.  The entity or its surviving or acquiring entity as
545	described in subparagraph 1., may transfer any unused credit in
546	whole or in units of at least 25 percent of the remaining
547	credit. The entity acquiring such credit may use it in the same
548	manner and with the same limitation as described in this
549	section. Such transferred credits may not be transferred again
550	although they may succeed to a surviving or acquiring entity
551	subject to the same conditions and limitations as described in
552	this section.
553	3.  If the credit is reduced due to a determination by the
554	Department of Environmental Protection or an examination or
555	audit by the Department of Revenue, the tax deficiency shall be
556	recovered from the first entity, or the surviving or acquiring
557	entity that claimed the credit up to the amount of credit taken.
558	Any subsequent deficiencies shall be assessed against the entity
559	acquiring and claiming the credit, or in the case of multiple
560	succeeding entities in the order of credit succession.
561	(g)(h)  In order to encourage completion of site
562	rehabilitation at contaminated sites being voluntarily cleaned
563	up and eligible for a tax credit under this section, the tax
564	credit applicant may claim an additional 25 percent of the total
565	cleanup costs, not to exceed $500,000, in the final year of
566	cleanup as evidenced by the Department of Environmental
567	Protection issuing a "No Further Action" order for that site.
568	(h)(i)  In order to encourage the construction of housing
569	that meets the definition of affordable provided in s. 420.0004,
570	an applicant for the tax credit may claim an additional 25
571	percent of the total site rehabilitation costs that are eligible
572	for tax credits under this section, not to exceed $500,000. In
573	order to receive this additional tax credit, the applicant must
574	provide a certification letter from the Florida Housing Finance
575	Corporation, the local housing authority, or other governmental
576	agency that is a party to the use agreement indicating that the
577	construction on the brownfield site has received a certificate
578	of occupancy and the brownfield site has a properly recorded
579	instrument that limits the use of the property to housing that
580	meets the definition of affordable provided in s. 420.0004.
581	(i)(j)  In order to encourage the redevelopment of a
582	brownfield site, as defined in the brownfield site
583	rehabilitation agreement, that is hindered by the presence of
584	solid waste, as defined in s. 403.703, a tax credit applicant,
585	or multiple tax credit applicants working jointly to clean up a
586	single brownfield site, may also claim costs required to address
587	solid waste removal as defined in this paragraph in accordance
588	with rules of the Department of Environmental Protection.
589	Multiple tax credit applicants shall be granted tax credits in
590	the same proportion as each applicant's contribution to payment
591	of solid waste removal costs. These costs are eligible for a tax
592	credit provided the applicant submits an affidavit stating that,
593	after consultation with appropriate local government officials
594	and the Department of Environmental Protection, to the best of
595	the applicant's knowledge according to such consultation and
596	available historical records, the brownfield site was never
597	operated as a permitted solid waste disposal area or was never
598	operated for monetary compensation and the applicant submits all
599	other documentation and certifications required by this section.
600	Under this section, wherever reference is made to "site
601	rehabilitation," the Department of Environmental Protection
602	shall instead consider whether or not the costs claimed are for
603	solid waste removal. Tax credit applications claiming costs
604	pursuant to this paragraph shall not be subject to the calendar-
605	year limitation and January 31 annual application deadline, and
606	the Department of Environmental Protection shall accept a one-
607	time application filed subsequent to the completion by the tax
608	credit applicant of the applicable requirements listed in this
609	section. A tax credit applicant may claim 50 percent of the cost
610	for solid waste removal, not to exceed $500,000, after the
611	applicant has determined solid waste removal is completed for
612	the brownfield site. A solid waste removal tax credit
613	application may be filed only once per brownfield site. For the
614	purposes of this section, the term:
615	1.  "Solid waste disposal area" means a landfill, dump, or
616	other area where solid waste has been disposed of.
617	2.  "Monetary compensation" means the fees that were
618	charged or the assessments that were levied for the disposal of
619	solid waste at a solid waste disposal area.
620	3.  "Solid waste removal" means removal of solid waste from
621	the land surface or excavation of solid waste from below the
622	land surface and removal of the solid waste from the brownfield
623	site. The term also includes:
624	a.  Transportation of solid waste to a licensed or exempt
625	solid waste management facility or to a temporary storage area.
626	b.  Sorting or screening of solid waste prior to removal
627	from the site.
628	c.  Deposition of solid waste at a permitted or exempt
629	solid waste management facility, whether the solid waste is
630	disposed of or recycled.
631	(j)(k)  In order to encourage the construction and
632	operation of a new health care facility as defined in s. 408.032
633	or s. 408.07, or a health care provider as defined in s. 408.07
634	or s. 408.7056, on a brownfield site, an applicant for a tax
635	credit may claim an additional 25 percent of the total site
636	rehabilitation costs, not to exceed $500,000, if the applicant
637	meets the requirements of this paragraph. In order to receive
638	this additional tax credit, the applicant must provide
639	documentation indicating that the construction of the health
640	care facility or health care provider by the applicant on the
641	brownfield site has received a certificate of occupancy or a
642	license or certificate has been issued for the operation of the
643	health care facility or health care provider.
644	Section 9.  Paragraphs (c) and (d) of subsection (5) of
645	section 220.187, Florida Statutes, are amended to read:
646	220.187  Credits for contributions to nonprofit
647	scholarship-funding organizations.--
648	(5)  AUTHORIZATION TO GRANT SCHOLARSHIP FUNDING TAX
649	CREDITS; LIMITATIONS ON INDIVIDUAL AND TOTAL CREDITS.--
650	(c)  A taxpayer who files a Florida consolidated return as
651	a member of an affiliated group pursuant to s. 220.131(1) may be
652	allowed the credit on a consolidated return basis; however, the
653	total credit taken by the affiliated group is subject to the
654	limitation established under paragraph (a).
655	(c)(d)  Effective for tax years beginning January 1, 2006,
656	a taxpayer may rescind all or part of its allocated tax credit
657	under this section. The amount rescinded shall become available
658	for purposes of the cap for that state fiscal year under this
659	section to an eligible taxpayer as approved by the department if
660	the taxpayer receives notice from the department that the
661	rescindment has been accepted by the department and the taxpayer
662	has not previously rescinded any or all of its tax credit
663	allocation under this section more than once in the previous 3
664	tax years. Any amount rescinded under this paragraph shall
665	become available to an eligible taxpayer on a first-come, first-
666	served basis based on tax credit applications received after the
667	date the rescindment is accepted by the department.
668	Section 10.  Paragraphs (g) and (h) of subsection (1) of
669	section 220.19, Florida Statutes, are amended to read:
670	220.19  Child care tax credits.--
671	(1)  AUTHORIZATION TO GRANT TAX CREDITS; LIMITATIONS.--
672	(g)  A taxpayer that files a consolidated return in this
673	state as a member of an affiliated group under s. 220.131(1) may
674	be allowed the credit on a consolidated return basis.
675	(g)(h)  A taxpayer that is eligible to receive credit under
676	s. 624.5107 is ineligible to receive credit under this section.
677	Section 11.  Paragraph (c) of subsection (3) of section
678	220.191, Florida Statutes, is amended to read:
679	220.191  Capital investment tax credit.--
680	(3)
681	(c)  The credit granted under this subsection may be used
682	in whole or in part by the qualifying business or any
683	corporation that is either a member of that qualifying
684	business's affiliated group of corporations, is a related entity
685	taxable as a cooperative under subchapter T of the Internal
686	Revenue Code, or, if the qualifying business is an entity
687	taxable as a cooperative under subchapter T of the Internal
688	Revenue Code, is related to the qualifying business. Any entity
689	related to the qualifying business may continue to file as a
690	member of a Florida-nexus consolidated group pursuant to a prior
691	election made under s. 220.131(1), Florida Statutes (1985), even
692	if the parent of the group changes due to a direct or indirect
693	acquisition of the former common parent of the group. Any credit
694	can be used by any of the affiliated companies or related
695	entities referenced in this paragraph to the same extent as it
696	could have been used by the qualifying business. However, any
697	such use shall not operate to increase the amount of the credit
698	or extend the period within which the credit must be used.
699	Section 12.  Subsection (2) of section 220.192, Florida
700	Statutes, is amended to read:
701	220.192  Renewable energy technologies investment tax
702	credit.--
703	(2)  TAX CREDIT.--For tax years beginning on or after
704	January 1, 2007, a credit against the tax imposed by this
705	chapter shall be granted in an amount equal to the eligible
706	costs. Credits may be used in tax years beginning January 1,
707	2007, and ending December 31, 2010, after which the credit shall
708	expire. If the credit is not fully used in any one tax year
709	because of insufficient tax liability on the part of the
710	corporation, the unused amount may be carried forward and used
711	in tax years beginning January 1, 2007, and ending December 31,
712	2012, after which the credit carryover expires and may not be
713	used. A taxpayer that files a consolidated return in this state
714	as a member of an affiliated group under s. 220.131(1) may be
715	allowed the credit on a consolidated return basis up to the
716	amount of tax imposed upon the consolidated group. Any eligible
717	cost for which a credit is claimed and which is deducted or
718	otherwise reduces federal taxable income shall be added back in
719	computing adjusted federal income under s. 220.13.
720	Section 13.  Paragraphs (e), (f), (g), (h), (i), (j), and
721	(k) of subsection (3) of section 220.193, Florida Statutes, are
722	amended to read:
723	220.193  Florida renewable energy production credit.--
724	(3)  An annual credit against the tax imposed by this
725	section shall be allowed to a taxpayer, based on the taxpayer's
726	production and sale of electricity from a new or expanded
727	Florida renewable energy facility. For a new facility, the
728	credit shall be based on the taxpayer's sale of the facility's
729	entire electrical production. For an expanded facility, the
730	credit shall be based on the increases in the facility's
731	electrical production that are achieved after May 1, 2006.
732	(e)  A taxpayer that files a consolidated return in this
733	state as a member of an affiliated group under s. 220.131(1) may
734	be allowed the credit on a consolidated return basis up to the
735	amount of tax imposed upon the consolidated group.
736	(e)(f)1.  Tax credits that may be available under this
737	section to an entity eligible under this section may be
738	transferred after a merger or acquisition to the surviving or
739	acquiring entity and used in the same manner with the same
740	limitations.
741	2.  The entity or its surviving or acquiring entity as
742	described in subparagraph 1. may transfer any unused credit in
743	whole or in units of no less than 25 percent of the remaining
744	credit. The entity acquiring such credit may use it in the same
745	manner and with the same limitations under this section. Such
746	transferred credits may not be transferred again although they
747	may succeed to a surviving or acquiring entity subject to the
748	same conditions and limitations as described in this section.
749	3.  In the event the credit provided for under this section
750	is reduced as a result of an examination or audit by the
751	department, such tax deficiency shall be recovered from the
752	first entity or the surviving or acquiring entity to have
753	claimed such credit up to the amount of credit taken. Any
754	subsequent deficiencies shall be assessed against any entity
755	acquiring and claiming such credit, or in the case of multiple
756	succeeding entities in the order of credit succession.
757	(f)(g)  Notwithstanding any other provision of this
758	section, credits for the production and sale of electricity from
759	a new or expanded Florida renewable energy facility may be
760	earned between January 1, 2007, and June 30, 2010. The combined
761	total amount of tax credits which may be granted for all
762	taxpayers under this section is limited to $5 million per state
763	fiscal year.
764	(g)(h)  A taxpayer claiming a credit under this section
765	shall be required to add back to net income that portion of its
766	business deductions claimed on its federal return paid or
767	incurred for the taxable year which is equal to the amount of
768	the credit allowable for the taxable year under this section.
769	(h)(i)  A taxpayer claiming credit under this section may
770	not claim a credit under s. 220.192. A taxpayer claiming credit
771	under s. 220.192 may not claim a credit under this section.
772	(i)(j)  When an entity treated as a partnership or a
773	disregarded entity under this chapter produces and sells
774	electricity from a new or expanded renewable energy facility,
775	the credit earned by such entity shall pass through in the same
776	manner as items of income and expense pass through for federal
777	income tax purposes. When an entity applies for the credit and
778	the entity has received the credit by a pass-through, the
779	application must identify the taxpayer that passed the credit
780	through, all taxpayers that received the credit, and the
781	percentage of the credit that passes through to each recipient
782	and must provide other information that the department requires.
783	(j)(k)  A taxpayer's use of the credit granted pursuant to
784	this section does not reduce the amount of any credit available
785	to such taxpayer under s. 220.186.
786	Section 14.  Section 220.51, Florida Statutes, is amended
787	to read:
788	220.51  Promulgation of rules and regulations.--In
789	accordance with the Administrative Procedure Act, chapter 120,
790	the department is authorized to make, promulgate, and enforce
791	such reasonable rules and regulations, and to prescribe such
792	forms relating to the administration and enforcement of the
793	provisions of this code, as it may deem appropriate, including:
794	(1)  Rules for initial implementation of this code and for
795	taxpayers' transitional taxable years commencing before and
796	ending after January 1, 1972.;
797	(2)  Rules or regulations to clarify whether certain
798	groups, organizations, or associations formed under the laws of
799	this state or any other state, country, or jurisdiction shall be
800	deemed "taxpayers" for the purposes of this code, in accordance
801	with the legislative declarations of intent in s. 220.02.; and
802	(3)  Regulations relating to consolidated reporting for
803	affiliated groups of corporations, in order to provide for an
804	equitable and just administration of this code with respect to
805	multicorporate taxpayers.
806	Section 15.  Section 220.64, Florida Statutes, is amended
807	to read:
808	220.64  Other provisions applicable to franchise tax.--To
809	the extent that they are not manifestly incompatible with the
810	provisions of this part, parts I, III, IV, V, VI, VIII, IX, and
811	X of this code and ss. 220.12, 220.13, 220.136, 220.15, and
812	220.16 apply to the franchise tax imposed by this part. Under
813	rules prescribed in s. 220.131, a consolidated return may be
814	filed by any affiliated group of corporations composed of one or
815	more banks or savings associations, its or their Florida parent
816	corporation, and any nonbank or nonsavings subsidiaries of such
817	parent corporation.
818	Section 16.  Subsections (9) and (10) of section 376.30781,
819	Florida Statutes, are amended to read:
820	376.30781  Tax credits for rehabilitation of drycleaning-
821	solvent-contaminated sites and brownfield sites in designated
822	brownfield areas; application process; rulemaking authority;
823	revocation authority.--
824	(9)  On or before May 1, the Department of Environmental
825	Protection shall inform each tax credit applicant that is
826	subject to the January 31 annual application deadline of the
827	applicant's eligibility status and the amount of any tax credit
828	due. The department shall provide each eligible tax credit
829	applicant with a tax credit certificate that must be submitted
830	with its tax return to the Department of Revenue to claim the
831	tax credit or be transferred pursuant to s. 220.1845(1)(f)(g).
832	The May 1 deadline for annual site rehabilitation tax credit
833	certificate awards shall not apply to any tax credit application
834	for which the department has issued a notice of deficiency
835	pursuant to subsection (8). The department shall respond within
836	90 days after receiving a response from the tax credit applicant
837	to such a notice of deficiency. Credits may not result in the
838	payment of refunds if total credits exceed the amount of tax
839	owed.
840	(10)  For solid waste removal, new health care facility or
841	health care provider, and affordable housing tax credit
842	applications, the Department of Environmental Protection shall
843	inform the applicant of the department's determination within 90
844	days after the application is deemed complete. Each eligible tax
845	credit applicant shall be informed of the amount of its tax
846	credit and provided with a tax credit certificate that must be
847	submitted with its tax return to the Department of Revenue to
848	claim the tax credit or be transferred pursuant to s.
849	220.1845(1)(f)(g). Credits may not result in the payment of
850	refunds if total credits exceed the amount of tax owed.
851	Section 17.  Transition rules.--
852	(1)  For the first taxable year beginning on or after
853	January 1, 2010, a taxpayer that filed a Florida return for the
854	preceding taxable year and is a member of a water's edge group
855	shall compute its income together with all members of the
856	water's edge group and file a separate corporate income tax
857	return or may elect to combine its tax return with all members
858	of the water's edge group.
859	(2)  An affiliated group of corporations that filed a
860	Florida consolidated return pursuant to an election provided in
861	former s. 220.131, Florida Statutes, shall cease filing a
862	Florida consolidated return for taxable years beginning on or
863	after January 1, 2010, and shall file water's edge group returns
864	or may elect to file a combined water's edge group return.
865	(3)  An affiliated group of corporations that filed a
866	Florida consolidated return pursuant to the election provided in
867	s. 220.131(1), Florida Statutes (1985), that allowed the
868	affiliated group to make an election with 90 days after December
869	20, 1984, or upon filing the taxpayer's first return after
870	December 20, 1984, whichever occurred later, shall cease filing
871	a Florida consolidated return using that method for taxable
872	years beginning on or after January 1, 2010, and shall file
873	water's edge group returns or may elect to file a combined
874	water's edge group return.
875	Section 18.  Section 220.131, Florida Statutes, is
876	repealed.
877	Section 19.  Of the funds recaptured by this act, the sum
878	of $50 million is appropriated from the General Revenue Fund to
879	the State University System for workforce education, to be
880	allocated by the Board of Governors; the sum of $50 million is
881	appropriated from the General Revenue Fund to community colleges
882	for workforce education, to be allocated by the State Board of
883	Education; and the remainder of such funds, as determined by the
884	Revenue Estimating Conference, shall be appropriated from the
885	General Revenue Fund to the various school districts to reduce
886	the required local effort, to be allocated as provided in the
887	General Appropriations Act.
888	Section 20.  This act shall take effect July 1, 2009.

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