Florida Senate - 2011 SB 1686
By Senator Detert
23-01464A-11 20111686__
1 A bill to be entitled
2 An act relating to economic development; creating s.
3 288.005, F.S.; providing definitions; amending s.
4 288.095, F.S.; making technical changes; deleting
5 obsolete provisions; deleting a requirement for
6 Enterprise Florida, Inc., to prepare an annual report;
7 amending s. 288.106, F.S.; deleting a definition;
8 revising criteria for the designation of target
9 industries developed by the Office of Tourism, Trade,
10 and Economic Development; requiring the Office of
11 Tourism, Trade, and Economic Development to consider
12 the economic benefits when awarding economic
13 development incentives and certifying a business as a
14 qualified target industry business; amending s.
15 288.1088, F.S.; requiring awards from the Quick Action
16 Closing Fund to have a positive economic benefit;
17 amending s. 288.90151, F.S.; revising legislative
18 intent; providing that private sector support for the
19 operations of Enterprise Florida, Inc., includes cash
20 jointly raised by Enterprise Florida, Inc., and a
21 private statewide business organization that supports
22 collaborative projects; requiring the Office of
23 Economic and Demographic Research to hire an economic
24 analysis firm to assist in the development of a
25 methodology for establishing and reporting of economic
26 benefits of awards from the Quick Action Closing Fund;
27 amending s. 288.906, F.S.; revising the required
28 contents of an annual report by Enterprise Florida,
29 Inc.; creating s. 288.907, F.S.; requiring Enterprise
30 Florida, Inc., to create an annual incentives report;
31 specifying the required components of the report;
32 amending s. 288.911, F.S.; requiring Enterprise
33 Florida, Inc., to cooperate with VISIT Florida in the
34 promotion of this state to businesses in target
35 industries and high-impact industries; requiring that
36 certain counties and municipalities annually provide
37 to Enterprise Florida, Inc., an overview of certain
38 local economic development activities; amending s.
39 288.7771, F.S.; conforming a cross-reference to
40 changes made by the act; providing an effective date.
41
42 Be It Enacted by the Legislature of the State of Florida:
43
44 Section 1. Section 288.005, Florida Statutes, is created to
45 read:
46 288.005 Definitions.—As used in this chapter, the term:
47 (1) “Economic benefits” mean the direct, indirect, or
48 induced gains in state tax revenues as a percentage of the
49 state’s investment. The state’s investment includes state
50 grants, tax exemptions, tax refunds, tax credits, and other
51 state incentives. The economic-benefits calculation may be
52 expressed as a ratio of the increase in state revenues as
53 compared to the state’s investment.
54 (2) “Office” means the Office of Tourism, Trade, and
55 Economic Development in the Executive Office of the Governor.
56 Section 2. Subsection (3) of section 288.095, Florida
57 Statutes, is amended to read:
58 288.095 Economic Development Trust Fund.—
59 (3)(a) The office of Tourism, Trade, and Economic
60 Development may approve applications for certification pursuant
61 to ss. 288.1045(3) and 288.106. However, the total state share
62 of tax refund payments scheduled in all active certifications in
63 any for fiscal year 2001-2002 may not exceed $35 $30 million.
64 The total for each subsequent fiscal year may not exceed $35
65 million.
66 (b) The total amount of tax refund claims approved for
67 payment by the office of Tourism, Trade, and Economic
68 Development based on actual project performance may not exceed
69 the amount appropriated to the Economic Development Incentives
70 Account for such purposes for the fiscal year. Claims for tax
71 refunds under ss. 288.1045 and 288.106 shall be paid in the
72 order the claims are approved by the office of Tourism, Trade,
73 and Economic Development. If In the event the Legislature does
74 not appropriate an amount sufficient to satisfy the tax refunds
75 under ss. 288.1045 and 288.106 in a fiscal year, the office of
76 Tourism, Trade, and Economic Development shall pay the tax
77 refunds from the appropriation for the following fiscal year. By
78 March 1 of each year, the office of Tourism, Trade, and Economic
79 Development shall notify the legislative appropriations
80 committees of the Senate and House of Representatives of any
81 anticipated shortfall in the amount of funds needed to satisfy
82 claims for tax refunds from the appropriation for the current
83 fiscal year.
84 (c) By December 31 of each year, Enterprise Florida, Inc.,
85 shall submit a complete and detailed report to the Governor, the
86 President of the Senate, the Speaker of the House of
87 Representatives, and the director of the Office of Tourism,
88 Trade, and Economic Development of all applications received,
89 recommendations made to the Office of Tourism, Trade, and
90 Economic Development, final decisions issued, tax refund
91 agreements executed, and tax refunds paid or other payments made
92 under all programs funded out of the Economic Development
93 Incentives Account, including analyses of benefits and costs,
94 types of projects supported, and employment and investment
95 created. Enterprise Florida, Inc., shall also include a separate
96 analysis of the impact of such tax refunds on state enterprise
97 zones designated pursuant to s. 290.0065, rural communities,
98 brownfield areas, and distressed urban communities. The report
99 must also discuss the efforts made by the Office of Tourism,
100 Trade, and Economic Development to amend tax refund agreements
101 to require tax refund claims to be submitted by January 31 for
102 the net new full-time equivalent jobs in this state as of
103 December 31 of the preceding calendar year. The report must also
104 list the name and tax refund amount for each business that has
105 received a tax refund under s. 288.1045 or s. 288.106 during the
106 preceding fiscal year. The Office of Tourism, Trade, and
107 Economic Development shall assist Enterprise Florida, Inc., in
108 the collection of data related to business performance and
109 incentive payments.
110 (c)(d) Moneys in the Economic Development Incentives
111 Account may be used only to pay tax refunds and other payments
112 authorized under s. 288.1045, s. 288.106, or s. 288.107.
113 (d)(e) The Office of Tourism, Trade, and Economic
114 Development may adopt rules necessary to carry out the
115 provisions of this subsection, including rules providing for the
116 use of moneys in the Economic Development Incentives Account and
117 for the administration of the Economic Development Incentives
118 Account.
119 Section 3. Paragraphs (q) and (t) of subsection (2) and
120 paragraph (c) of subsection (4) of section 288.106, Florida
121 Statutes, are amended, and present paragraphs (r) through (u) of
122 subsection (2) are redesignated as paragraphs (q) through (t),
123 respectively, to read:
124 288.106 Tax refund program for qualified target industry
125 businesses.—
126 (2) DEFINITIONS.—As used in this section:
127 (q) “Return on investment” means the gain in state revenues
128 as a percentage of the state’s investment. The state’s
129 investment includes state grants, tax exemptions, tax refunds,
130 tax credits, and other state incentives.
131 (s)(t) “Target industry business” means a corporate
132 headquarters business or any business that is engaged in one of
133 the target industries identified pursuant to the following
134 criteria developed by the office in consultation with Enterprise
135 Florida, Inc.:
136 1. Future growth.—Industry forecasts should indicate strong
137 expectation for future growth in both employment and output,
138 according to the most recent available data. Special
139 consideration should be given to businesses that export goods
140 to, or provide services in, international markets and businesses
141 that replace domestic and international imports of goods or
142 services.
143 2. Stability.—The industry should not be subject to
144 periodic layoffs, whether due to seasonality or sensitivity to
145 volatile economic variables such as weather. The industry should
146 also be relatively resistant to recession, so that the demand
147 for products of this industry is not typically subject to
148 decline during an economic downturn.
149 3. High wage.—The industry should pay relatively high wages
150 compared to statewide or area averages.
151 4. Market and resource independent.—The location of
152 industry businesses should not be dependent on Florida markets
153 or resources as indicated by industry analysis, except for
154 businesses in the renewable energy industry.
155 5. Industrial base diversification and strengthening.—The
156 industry should contribute toward expanding or diversifying the
157 state’s or area’s economic base, as indicated by analysis of
158 employment and output shares compared to national and regional
159 trends. Special consideration should be given to industries that
160 strengthen regional economies by adding value to basic products
161 or building regional industrial clusters as indicated by
162 industry analysis. Special consideration should also be given to
163 the development of strong industrial clusters that include
164 defense and homeland security businesses.
165 6. Positive impact Economic benefits.—The industry is
166 expected to have strong positive impacts on or benefits to the
167 state or regional economies.
168
169 The term does not include any business engaged in retail
170 industry activities; any electrical utility company; any
171 phosphate or other solid minerals severance, mining, or
172 processing operation; any oil or gas exploration or production
173 operation; or any business subject to regulation by the Division
174 of Hotels and Restaurants of the Department of Business and
175 Professional Regulation. Any business within NAICS code 5611 or
176 5614, office administrative services and business support
177 services, respectively, may be considered a target industry
178 business only after the local governing body and Enterprise
179 Florida, Inc., make a determination that the community where the
180 business may locate has conditions affecting the fiscal and
181 economic viability of the local community or area, including but
182 not limited to, factors such as low per capita income, high
183 unemployment, high underemployment, and a lack of year-round
184 stable employment opportunities, and such conditions may be
185 improved by the location of such a business to the community. By
186 January 1 of every 3rd year, beginning January 1, 2011, the
187 office, in consultation with Enterprise Florida, Inc., economic
188 development organizations, the State University System, local
189 governments, employee and employer organizations, market
190 analysts, and economists, shall review and, as appropriate,
191 revise the list of such target industries and submit the list to
192 the Governor, the President of the Senate, and the Speaker of
193 the House of Representatives.
194 (4) APPLICATION AND APPROVAL PROCESS.—
195 (c) Each application meeting the requirements of paragraph
196 (b) must be submitted to the office for determination of
197 eligibility. The office shall review and evaluate each
198 application based on, but not limited to, the following
199 criteria:
200 1. Expected contributions to the state’s economy,
201 consistent with the state strategic economic development plan
202 adopted by Enterprise Florida, Inc.
203 2. The economic benefits return on investment of the
204 proposed award of tax refunds under this section and the
205 economic benefits of return on investment for state incentives
206 proposed for the project. The Office of Economic and Demographic
207 Research shall review and evaluate the methodology and model
208 used to calculate the economic benefits return on investment and
209 shall report its findings by September 1 of every 3rd year,
210 beginning September 1, 2010, to the President of the Senate and
211 the Speaker of the House of Representatives.
212 3. The amount of capital investment to be made by the
213 applicant in this state.
214 4. The local financial commitment and support for the
215 project.
216 5. The effect of the project on the unemployment rate in
217 the county where the project will be located.
218 6. The effect of the award on the viability of the project
219 and the probability that the project would be undertaken in this
220 state if such tax refunds are granted to the applicant.
221 7. The expected long-term commitment of the applicant to
222 economic growth and employment in this state resulting from the
223 project.
224 8. A review of the business’s past activities in this state
225 or other states, including whether such business has been
226 subjected to criminal or civil fines and penalties. This
227 subparagraph does not require the disclosure of confidential
228 information.
229 Section 4. Subsection (2) of section 288.1088, Florida
230 Statutes, is amended to read:
231 288.1088 Quick Action Closing Fund.—
232 (2) There is created within the Office of Tourism, Trade,
233 and Economic Development the Quick Action Closing Fund. Projects
234 eligible for receipt of funds from the Quick Action Closing Fund
235 shall:
236 (a) Be in an industry as referenced in s. 288.106.
237 (b) Have a positive economic benefit payback ratio of at
238 least 5 to 1.
239 (c) Be an inducement to the project’s location or expansion
240 in the state.
241 (d) Pay an average annual wage of at least 125 percent of
242 the areawide or statewide private sector average wage.
243 (e) Be supported by the local community in which the
244 project is to be located.
245 Section 5. Section 288.90151, Florida Statutes, is amended
246 to read:
247 288.90151 Economic benefit Return on investment from
248 activities of Enterprise Florida, Inc.; private sector support.—
249 (1) The public funds appropriated each year for the
250 operation of Enterprise Florida, Inc., are invested in this
251 public-private partnership to enhance international trade and
252 economic development, to spur job-creating investments, and to
253 create new employment opportunities for Floridians. This policy
254 will be the Legislature’s priority consideration when reviewing
255 the return of the public’s investment in funding the activities
256 of return-on-investment for Enterprise Florida, Inc.
257 (2) It is also the intent of the Legislature that
258 Enterprise Florida, Inc., coordinate its operations with local
259 economic-development organizations to maximize the state and
260 local economic benefits of creating and retaining return-on
261 investment to create jobs for Floridians.
262 (3) It is further the intent of the Legislature to maximize
263 private sector support in operating Enterprise Florida, Inc., as
264 an endorsement of its value and as an enhancement of its
265 efforts.
266 (4)(a) The state’s operating investment in Enterprise
267 Florida, Inc., is the budget contracted by the office of
268 Tourism, Trade, and Economic Development to Enterprise Florida,
269 Inc., less funding that is directed by the Legislature to be
270 subcontracted to a specific recipient.
271 (b) The board of directors of Enterprise Florida, Inc.,
272 shall adopt for each upcoming fiscal year an operating budget
273 for the organization that specifies the intended uses of the
274 state’s operating investment and a plan for securing private
275 sector support to Enterprise Florida, Inc. Each fiscal year
276 private sector support to Enterprise Florida, Inc., shall equal
277 no less than 100 percent of the state’s operating investment,
278 including at least $1 million in cash as defined in paragraph
279 (5)(a), and an additional $400,000 in cash as defined in
280 paragraphs (5)(a), (b), and (c).
281 (5) Private sector support in operating Enterprise Florida,
282 Inc., includes:
283 (a) Cash given directly to Enterprise Florida, Inc., for
284 its operations, excluding contributions from grantees or
285 companies having contracts with Enterprise Florida, Inc., which
286 represent more than 5 percent of the value of all contracts with
287 Enterprise Florida, Inc., exclusive of grants, or more than 5
288 percent of the company’s revenues. Cash in this category is not
289 subject to restrictions on the use of appropriated funds;
290 (b) Cash jointly raised by Enterprise Florida, Inc., and a
291 local economic development organization, a group of such
292 organizations, or a private, statewide business organization
293 that supports collaborative projects;
294 (c) Cash generated by fees charged for products or services
295 of Enterprise Florida, Inc., and by sponsorship of events,
296 missions, programs, and publications; and
297 (d) In-kind contributions directly to Enterprise Florida,
298 Inc., including: business expenditures; business services
299 provided; business support; or other business contributions that
300 augment the operations, program, activities, or assets of
301 Enterprise Florida, Inc., including, but not limited to: an
302 individual’s time and expertise; sponsored publications; private
303 sector staff services; payment for advertising placements;
304 sponsorship of events; sponsored or joint research; discounts on
305 leases or purchases; mission or program sponsorship; and
306 copayments, stock, warrants, royalties, or other private
307 resources dedicated to Enterprise Florida, Inc.
308 (6) Enterprise Florida, Inc., shall fully comply with the
309 performance measures, standards, and sanctions in its contracts
310 with the office of Tourism, Trade, and Economic Development
311 under s. 14.2015(2)(h) and (7). The office of Tourism, Trade,
312 and Economic Development shall ensure, to the maximum extent
313 possible, that the contract performance measures are consistent
314 with performance measures that the office is required to develop
315 and track under performance-based program budgeting.
316 (7) As part of the annual report required under s. 288.906,
317 Enterprise Florida, Inc., shall provide the Legislature with
318 information quantifying the return on the public’s investment
319 return-on-investment as described in this section for fiscal
320 year 1997-1998 and each subsequent fiscal year. The annual
321 report shall also include the results of a customer-satisfaction
322 survey of businesses served, as well as the lead economic
323 development staff person of each organization that is a primary
324 partner.
325 (8) Enterprise Florida, Inc., in consultation with the
326 Office of Economic and Demographic Research Program Policy
327 Analysis and Government Accountability, shall hire an economic
328 analysis firm to assist in the development of develop the
329 methodology for establishing and reporting economic benefits
330 return-on-investment and in-kind contributions as described in
331 this section and shall hire a firm experienced in survey
332 research to develop, analyze, and report on the results of the
333 customer-satisfaction survey. The Office of Economic and
334 Demographic Research Program Policy Analysis and Government
335 Accountability shall review and offer feedback on the
336 methodology before it is implemented.
337 Section 6. Section 288.906, Florida Statutes, is amended to
338 read:
339 288.906 Annual report of Enterprise Florida, Inc.; audits.
340 Prior to December 1 of each year, Enterprise Florida, Inc.,
341 shall submit to the Governor, the President of the Senate, the
342 Speaker of the House of Representatives, the Senate Minority
343 Leader, and the House Minority Leader a complete and detailed
344 report including, but not limited to:
345 (1) A description of the operations and accomplishments of
346 Enterprise Florida, Inc., and its boards and advisory committees
347 or similar groups created by Enterprise Florida, Inc., and an
348 identification of any major trends, initiatives, or developments
349 affecting the performance of any program or activity.
350 (2) An evaluation of progress towards achieving
351 organizational goals and specific performance outcomes, both
352 short-term and long-term, established pursuant to s. 288.905.
353 (3) Methods for implementing and funding the operations of
354 Enterprise Florida, Inc., and its boards, including the private
355 sector support required under s. 288.90151.
356 (4) A description of the operations and accomplishments of
357 Enterprise Florida, Inc., and its boards with respect to
358 aggressively marketing Florida’s rural communities and
359 distressed urban communities as locations for potential new
360 investment and job creation, aggressively assisting in the
361 creation, retention, and expansion of existing businesses and
362 job growth in these communities, and aggressively assisting
363 these communities in the identification and development of new
364 economic development opportunities.
365 (5) A description and evaluation of the operations and
366 accomplishments of Enterprise Florida, Inc., and its boards with
367 respect to interaction with local and private economic
368 development organizations, including the an identification of
369 each organization that is a primary partner and any specific
370 programs or activities that which promoted the activities of
371 such organizations and an identification of any specific
372 programs or activities that which promoted a comprehensive and
373 coordinated approach to economic development in this state.
374 (6) An assessment of job creation that directly benefits
375 participants in the welfare transition program.
376 (7) The annual report shall also include the results of a
377 customer-satisfaction survey of businesses served. Enterprise
378 Florida, Inc., shall hire a firm experienced in survey research
379 to develop, analyze, and report on the results of the customer
380 satisfaction survey.
381 (8)(7) An annual compliance and financial audit of accounts
382 and records by an independent certified public accountant at the
383 end of its most recent fiscal year performed in accordance with
384 rules adopted by the Auditor General.
385
386 The detailed report required by this section subsection shall
387 also include the information identified in subsections (1)-(8)
388 (1)-(7), if applicable, for any board established within the
389 corporate structure of Enterprise Florida, Inc.
390 Section 7. Section 288.907, Florida Statutes, is created to
391 read:
392 288.907 Annual incentives report by Enterprise Florida,
393 Inc.—
394 (1) In addition to the annual report required under s.
395 288.906, Enterprise Florida, Inc., by December 30 of each year,
396 shall provide the Governor, the President of the Senate, and the
397 Speaker of the House of Representatives a detailed incentives
398 report quantifying the economic benefits for each of the
399 following economic development incentive programs recommended by
400 Enterprise Florida, Inc., in its recruitment efforts: the
401 Qualified Target Industry Tax Refund Program, the Quick Action
402 Closing Fund, the Qualified Defense Contractor and Space Flight
403 Business Tax Refund Program, the High-Impact Business incentive,
404 the Capital Investment Tax Credit Program, the Brownfield
405 Redevelopment Bonus Refunds incentive, and the Economic
406 Development Transportation grant program.
407 (a) The annual incentives report must include for each
408 incentive program:
409 1. A brief description of the incentive program.
410 2. The amount of awards granted, by year, since inception.
411 3. Beginning in 2015, the economic benefits, as defined in
412 s. 288.005(1), based on the actual amount of private capital
413 invested, actual number of jobs created, and actual wages paid
414 for incentive agreements completed during the previous 3 years.
415 4. Beginning in 2015, the report shall also include the
416 actual amount of private capital invested, actual number of jobs
417 created, and actual wages paid for incentive agreements
418 completed during the previous 3 years for each target industry
419 sector.
420 (b) For projects completed during the previous state fiscal
421 year, the report must include:
422 1. The number of economic development incentive
423 applications received.
424 2. The number of recommendations made to the office by
425 Enterprise Florida, Inc., including the number recommended for
426 approval and the number recommended for denial.
427 3. The number of final decisions issued by the office for
428 approval and for denial.
429 4. The projects for which a tax refund, tax credit, or cash
430 grant agreement was executed, identifying:
431 a. The number of jobs committed to be created.
432 b. The amount of capital investments committed to be made.
433 c. The annual average wage committed to be paid.
434 d. The amount of state economic development incentives
435 committed to the project from each incentive program under the
436 project’s terms of agreement with the office.
437 (c) For economic development projects that received tax
438 refunds, tax credits, or cash grants under the terms of an
439 agreement for incentives, the report must identify:
440 1. The number of jobs actually created.
441 2. The amount of capital investments actually made.
442 3. The annual average wage paid.
443 (d) For a project receiving economic development incentives
444 approved by the office and receiving federal or local
445 incentives, the report must include a description of the federal
446 or local incentives, if available.
447 (e) The report must state the number of withdrawn or
448 terminated projects that did not fulfill the terms of their
449 agreements with the office and consequently are not receiving
450 incentives.
451 (f) The report must include an analysis of the economic
452 benefits, as defined in s. 288.005(1), of tax refunds, tax
453 credits, or other payments made to projects locating or
454 expanding in state enterprise zones, rural communities,
455 brownfield areas, or distressed urban communities.
456 (g) The report must identify the target industry businesses
457 and high-impact businesses.
458 (h) The report must describe the trends relating to
459 business interest in, and usage of, the various incentives, and
460 the number of minority- or woman-owned businesses receiving
461 incentives.
462 (2) The office shall assist Enterprise Florida, Inc., in
463 the preparation of the annual incentives report.
464 Section 8. Section 288.911, Florida Statutes, is amended to
465 read:
466 288.911 Creation and implementation of a marketing and
467 image campaign.—
468 (1) Enterprise Florida, Inc., in cooperation collaboration
469 with VISIT Florida and the private sector, shall create a
470 marketing campaign to help attract, develop, and retain target
471 industry businesses and high-impact businesses to information
472 technology businesses in this state. The campaign must be
473 coordinated with any existing economic development promotion
474 efforts in this state, and shall be jointly funded from private
475 and public resources.
476 (2) The message of the campaign shall be to increase
477 national and international awareness of this state as a state
478 ideally suited for the successful advancement of businesses
479 within the state’s target industries and high-impact industries
480 the information technology business sector. Marketing strategies
481 shall include development of promotional materials, Internet and
482 print advertising, public relations and media placement, trade
483 show attendance at information technology events, and
484 appropriate followup activities. Efforts to promote this state
485 as a high-technology business leader must include identification
486 and coordination of existing clusters of target industry
487 businesses and high-impact businesses and business technology
488 resources, partnerships with economic development organizations
489 and private sector businesses, continued retention and growth of
490 businesses based in this state that produce high-technology
491 products or use high-technology skills for manufacturing, and
492 recruitment of new business in such area.
493 Section 9. Inventory of communities seeking to recruit
494 businesses.—By September 30 of each year, a county or
495 municipality that has a population of at least 25,000 or its
496 local economic development organization must submit to
497 Enterprise Florida, Inc., a brief overview of the strengths,
498 services, and economic development incentives that its community
499 offers. The local government or its local economic development
500 organization must also identify any industries that it is
501 encouraging to locate or relocate to its area.
502 Section 10. Section 288.7771, Florida Statutes, is amended
503 to read:
504 288.7771 Annual report of Florida Export Finance
505 Corporation.—The corporation shall annually prepare and submit
506 to Enterprise Florida, Inc., for inclusion in its annual report
507 required by s. 288.907 s. 288.095 a complete and detailed report
508 setting forth:
509 (1) The report required in s. 288.776(3).
510 (2) Its assets and liabilities at the end of its most
511 recent fiscal year.
512 Section 11. This act shall take effect July 1, 2011.