Florida Senate - 2011 SB 1542 By Senator Siplin 19-01078-11 20111542__ 1 A bill to be entitled 2 An act relating to corporate income tax credits; 3 creating s. 220.1877, F.S.; providing legislative 4 findings and purposes; providing definitions; 5 establishing the Florida Public School Tax Credit 6 Program; providing for credits against the corporate 7 income tax for contributions to public schools for 8 certain purposes; providing limitations; authorizing 9 public schools to determine how to use undesignated 10 contributions; requiring public schools to report 11 certain information to the Department of Revenue; 12 limiting the total annual amount of credits; requiring 13 the department to apportion a dollar amount of tax 14 credits to each school board receiving eligible 15 contributions; providing a formula for apportioning 16 the dollar amount of tax credits to each school board 17 for allocation by the department to taxpayers applying 18 for corporate income tax credits; providing 19 requirements for taxpayers filing consolidated 20 returns; providing procedures and requirements for 21 rescinding credits; providing for use of rescinded 22 credits by other taxpayers; specifying certain 23 taxpayers as ineligible to receive the corporate tax 24 credit; specifying administrative rules for use and 25 application of the credit; requiring the Department of 26 Revenue and the State Board of Education to adopt 27 rules; providing requirements for deposits of eligible 28 contributions; providing criteria for preservation of 29 tax credits under certain circumstances; providing a 30 limitation; providing an effective date. 31 32 Be It Enacted by the Legislature of the State of Florida: 33 34 Section 1. Section 220.1877, Florida Statutes, is created 35 to read: 36 220.1877 Credits for contributions to public schools for 37 public school expenses.— 38 (1) FINDINGS AND PURPOSE.— 39 (a) The Legislature finds that: 40 1. It has the inherent power to determine subjects of 41 taxation for general or particular public purposes. 42 2. Expanding educational opportunities and improving the 43 quality of educational services within the state are valid 44 public purposes that the Legislature may promote using its 45 sovereign power to determine subjects of taxation and exemptions 46 from taxation. 47 3. Expanding educational opportunities and the healthy 48 competition they promote are critical to improving the quality 49 of education in the state and to ensuring that all children 50 receive the high-quality education to which they are entitled. 51 (b) The purpose of this section is to: 52 1. Enable taxpayers to make private, voluntary 53 contributions to public schools in order to promote the general 54 welfare. 55 2. Enable children in this state to achieve a greater level 56 of excellence in their education. 57 3. Improve the quality of education in this state, both by 58 expanding educational opportunities for children and by creating 59 incentives for public schools to achieve excellence. 60 4. Allow corporations to claim education tax credits for 61 direct payments to public schools for educational expenses, 62 special assistance, tutoring, Foundation for Florida’s Future, 63 mentoring, extracurricular activities, character education 64 programs, and pay-to-play fees associated with mental and 65 physical student development. 66 (2) DEFINITIONS.—As used in this section, the term: 67 (a) “Department” means the Department of Revenue. 68 (b) “Eligible contribution” means a monetary contribution 69 from a taxpayer, subject to the restrictions provided in this 70 section, to a public school. 71 (c) “Public school” means a school in this state that 72 provides education to students in any grades K-12 in a public 73 school district. 74 (3) PROGRAM.—The Florida Public School Tax Credit Program 75 is established. 76 (4) AUTHORIZATION TO GRANT PUBLIC SCHOOL FUNDING TAX 77 CREDITS; LIMITATIONS ON INDIVIDUAL AND TOTAL CREDITS.— 78 (a)1. There is allowed a credit of 100 percent of an 79 eligible contribution against any tax due for a taxable year 80 under this chapter. The credit is allowed against the taxes 81 imposed by this chapter for the amount of any fees paid or cash 82 contributions made by a taxpayer during the taxable year to a 83 public school located in this state for the support of 84 educational expenses, special assistance, tutoring, the 85 Foundation for Florida’s Future, mentoring, extracurricular 86 activities, character education programs, and pay-to-play fees. 87 The taxpayer may designate the specific use to which the 88 contribution must be applied. However, such a credit may not 89 exceed 75 percent of the tax due under this chapter for the 90 taxable year, after the application of any other allowable 91 credits by the taxpayer. The credit granted by this section 92 shall be reduced by the difference between the amount of federal 93 corporate income tax taking into account the credit granted by 94 this section and the amount of federal corporate income tax 95 without application of the credit granted by this section. 96 2. Each public school that receives contributions that are 97 not designated for a specific purpose shall determine how the 98 contributions are used. The school advisory council may make 99 recommendations as to how best to apply undesignated 100 contributions. 101 3. A public school that receives fees or a cash 102 contribution shall report to the department, in a form 103 prescribed by the department: 104 a. The total number of fee and cash contribution payments 105 received during the previous calendar year. 106 b. The total dollar amount of fees and contributions 107 received during the previous calendar year. 108 c. The total dollar amount from fees and contributions 109 received that were spent by the public school during the 110 previous calendar year. 111 (b) For each state fiscal year, the total amount of tax 112 credits and carryforward of tax credits which may be granted 113 under this section and s. 624.51055 is $118 million. The 114 department shall apportion to each district school board the 115 total dollar amount of tax credits available to taxpayers who 116 make eligible contributions to a public school in the school 117 board’s district pursuant to subparagraph (a)1. The dollar 118 amount apportioned to each school board shall be calculated by 119 multiplying each school district’s percentage of the previous 120 fiscal year’s statewide total number of unweighted full-time 121 equivalent students times $118 million. The applicable dollar 122 amount resulting from the calculation for each school district 123 shall be apportioned to the school board for allocation by the 124 department to taxpayers in accordance with rules adopted under 125 subsection (5). 126 (c) A taxpayer who files a Florida consolidated return as a 127 member of an affiliated group pursuant to s. 220.131(1) may be 128 allowed the credit on a consolidated return basis; however, the 129 total credit taken by the affiliated group is subject to the 130 limitation established under paragraph (a). 131 (d) Effective for tax years beginning January 1, 2012, a 132 taxpayer may rescind all or part of its allocated tax credit 133 under this section. The amount rescinded shall become available 134 for purposes of the cap for that state fiscal year under this 135 section to an eligible taxpayer as approved by the department if 136 the taxpayer receives notice from the department that the 137 rescission has been accepted by the department and the taxpayer 138 has not previously rescinded any or all of its tax credit 139 allocation under this section more than once in the previous 3 140 tax years. Any amount rescinded under this paragraph shall 141 become available to an eligible taxpayer on a first-come, first 142 served basis based on tax credit applications received after the 143 date the rescission is accepted by the department. 144 (e) A taxpayer who is eligible to receive the credit 145 provided for in s. 624.51055 is not eligible to receive the 146 credit provided by this section. 147 (5) ADMINISTRATION; RULES.— 148 (a) If the credit granted pursuant to this section is not 149 fully used in any one year because of insufficient tax liability 150 on the part of the corporation, the unused amount may be carried 151 forward for a period not to exceed 3 years; however, any 152 taxpayer that seeks to carry forward an unused amount of tax 153 credit must submit an application for allocation of tax credits 154 or carryforward credits as required in paragraph (d) in the year 155 that the taxpayer intends to use the carryforward. This 156 carryforward applies to all approved contributions made after 157 January 1, 2012. A taxpayer may not convey, assign, or transfer 158 the credit authorized by this section to another entity unless 159 all of the assets of the taxpayer are conveyed, assigned, or 160 transferred in the same transaction. 161 (b) An application for a tax credit pursuant to this 162 section shall be submitted to the department on forms 163 established by rule of the department. 164 (c) The department and the Department of Education shall 165 develop a cooperative agreement to assist in the administration 166 of this section. 167 (d) The department shall adopt rules necessary to 168 administer this section, including rules establishing 169 application forms and procedures and governing the allocation of 170 tax credits and carryforward credits under this section on a 171 first-come, first-served basis. 172 (e) The State Board of Education shall adopt rules to 173 administer this section as it relates to the roles of the 174 Department of Education and the Commissioner of Education. 175 (6) DEPOSITS OF ELIGIBLE CONTRIBUTIONS.—All eligible 176 contributions received by a public school shall be deposited in 177 a manner consistent with s. 17.57(2). 178 (7) PRESERVATION OF CREDIT.—If any provision or portion of 179 subsection (4) or the application thereof to any person or 180 circumstance is held unconstitutional by any court or is 181 otherwise declared invalid, the unconstitutionality or 182 invalidity shall not affect any credit earned under subsection 183 (4) by any taxpayer with respect to any contribution paid to a 184 public school before the date of a determination of 185 unconstitutionality or invalidity. Such credit shall be allowed 186 at such time and in such a manner as if a determination of 187 unconstitutionality or invalidity had not been made, provided 188 that nothing in this subsection by itself or in combination with 189 any other provision of law shall result in the allowance of any 190 credit to any taxpayer in excess of one dollar of credit for 191 each dollar paid to a public school. 192 Section 2. This act shall take effect July 1, 2011.