Florida Senate - 2012                                    SB 1592
       
       
       
       By Senator Braynon
       
       
       
       
       33-01413-12                                           20121592__
    1                        A bill to be entitled                      
    2         An act relating to economic development subsidies;
    3         providing definitions; providing a process for an
    4         applicant corporation to apply for an economic
    5         development subsidy using an application developed by
    6         the Department of Economic Opportunity; prohibiting a
    7         recipient corporation from receiving an economic
    8         development subsidy if the cost per job created
    9         exceeds a specified amount; providing a method for
   10         determining the cost; providing criteria for granting
   11         economic development subsidies; requiring that the
   12         recipient corporation provide certain information to
   13         the governing body; requiring that the governing body
   14         provide the information to the department; requiring
   15         each granting body that approves an economic
   16         development project to file an annual progress report
   17         with the department; providing for the information
   18         required in each biennial progress report; requiring
   19         the department to compile and publish information
   20         received in the annual and biennial progress reports;
   21         requiring a recipient corporation to allow the
   22         department access to the project site and to the
   23         records; providing for a penalty if the recipient
   24         corporation fails to allow access; requiring that the
   25         department report on expenditures for economic
   26         development subsidies; requiring that property-taxing
   27         entities report property tax reductions and abatements
   28         to the department; providing criteria for the
   29         information that must be included in the report;
   30         requiring that the department compile and publish
   31         information received in the annual reports; requiring
   32         the Department of Revenue to submit annually to the
   33         Legislature a unified economic development budget;
   34         providing that a recipient corporation that fails to
   35         meet certain standards is in default and must return
   36         the economic development subsidy to the granting body;
   37         providing requirements for determining default;
   38         providing procedures for the return of the economic
   39         development subsidy; authorizing certain individuals
   40         and organizations to bring a civil action if a
   41         granting body fails to enforce the requirements of the
   42         act; providing that certain information is a public
   43         record; clarifying that the act does not require or
   44         authorize a recipient corporation to reduce wages or
   45         benefits established under a collective bargaining
   46         agreement or state or federal wage law; providing an
   47         effective date.
   48  
   49         WHEREAS, while the state and local governments have granted
   50  numerous economic development subsidies in the last 25 years,
   51  the real wage levels and health care benefits of working
   52  families have declined, and
   53         WHEREAS, if employees receive low wages and reduced
   54  benefits, the jobs often impose hidden costs to taxpayers in the
   55  form of Medicaid costs, food stamps, earned income tax credits,
   56  and other forms of public assistance to the working poor and
   57  their families, and
   58         WHEREAS, citizen participation in economic development has
   59  been impeded by a lack of readily accessible information
   60  regarding expenditures and outcomes for economic development
   61  programs, and
   62         WHEREAS, in order to improve the effectiveness of
   63  expenditures for economic development programs and ensure that
   64  the programs achieve the goal of raising living standards for
   65  working families, it is necessary to centralize the collection
   66  and analysis of data, make information regarding those
   67  expenditures publicly available, and enact certain safeguards
   68  for the use of funds for economic development, NOW, THEREFORE,
   69  
   70  Be It Enacted by the Legislature of the State of Florida:
   71  
   72         Section 1. Subsidies for economic development.—
   73         (1) DEFINITIONS.—As used in this section, the term:
   74         (a) “Applicant corporation” means any person, association,
   75  corporation, joint venture, partnership, or other entity that
   76  applies for an economic development subsidy.
   77         (b) “Corporate parent” means any person, association,
   78  corporation, joint venture, partnership, or other entity that
   79  owns or controls 50 percent or more of a recipient corporation.
   80         (c) “Date of subsidy” means the date that a granting body
   81  provides the initial monetary value of an economic development
   82  subsidy to a recipient corporation. However, if the subsidy is
   83  for the installation of new equipment, the date of subsidy is
   84  the date that the corporation puts the equipment into service,
   85  or, if the subsidy is for improvements to property, the date of
   86  subsidy is the date that the improvements are completed or the
   87  date that the corporation occupies the property, whichever is
   88  earlier.
   89         (d) “Department” means the Department of Economic
   90  Opportunity.
   91         (e) “Economic development subsidy” means any expenditure of
   92  public funds having a value of at least $25,000 for the purpose
   93  of stimulating economic development within the state, including,
   94  but not limited to, bonds, grants, loans, loan guarantees, tax
   95  increment financing, fee waivers, land price subsidies, matching
   96  funds, tax abatements, tax exemptions, and tax credits. The term
   97  also includes benefits resulting by virtue of a project being
   98  located in an enterprise zone or empowerment zone.
   99         (f) “Full-time job” means an ongoing job in which an
  100  individual is employed by a recipient corporation for at least
  101  35 hours per week.
  102         (g) “Granting body” means any agency, board, office, public
  103  benefit corporation or authority of the state, or local
  104  governmental unit that provides an economic development subsidy.
  105         (h) “Local governmental unit” means an agency, board,
  106  commission, office, public benefit corporation, or public
  107  authority of a political subdivision of the state.
  108         (i) “New employee” means a full-time employee who
  109  represents a net increase in the number of individuals employed
  110  within this state by the recipient corporation. The term does
  111  not include an employee who performs a job that was previously
  112  performed by another employee of the recipient corporation if
  113  that job existed for at least 6 months before the new employee
  114  is hired.
  115         (j) “Part-time job” means an ongoing job in which an
  116  individual is employed by a recipient corporation for less than
  117  35 hours per week.
  118         (k) “Project” means a facility site or a business,
  119  commercial, or industrial operation for which an economic
  120  development subsidy is granted.
  121         (l) “Property-taxing entity” means a governmental entity
  122  that levies a tax, fee, or surcharge upon real or personal
  123  property.
  124         (m) “Recipient corporation” means any person, association,
  125  corporation, joint venture, partnership, or other entity that
  126  receives an economic development subsidy.
  127         (n) “Small business” means a corporation whose corporate
  128  parent, and any subsidiaries thereof, employed fewer than 20
  129  full-time employees or had total gross receipts of less than $1
  130  million during the most recent calendar year.
  131         (o) “State” means an agency, board, commission, office,
  132  public benefit corporation, or public benefit authority of the
  133  state.
  134         (p) “Subsidy value” means the face value of an economic
  135  development subsidy provided to a recipient corporation.
  136         (q) “Temporary job” means a job in which an individual is
  137  hired for a season or for a limited period of time.
  138         (2) APPLICATION FOR ECONOMIC DEVELOPMENT SUBSIDIES.—
  139         (a) An applicant corporation may apply for an economic
  140  development subsidy by completing an application on a form
  141  prepared by the Department of Economic Opportunity and
  142  submitting the form to the granting body. The application must
  143  include:
  144         1.An application tracking number for the granting body and
  145  the project;
  146         2.The name, street and mailing address, and phone number
  147  of the chief officer of the granting body;
  148         3.The name, street and mailing address, and phone number
  149  of the chief officer of the applicant corporation’s corporate
  150  parent;
  151         4.The name, street and mailing address, and phone number
  152  of the chief officer of the applicant corporation;
  153         5.The street address of the project site, if applicable;
  154         6.The three-digit North American Industry Classification
  155  System number for each type of industry involved in the project;
  156         7.The total number of individuals employed by the
  157  applicant corporation for the project on the date of the
  158  application, and the number of individuals employed, categorized
  159  by full-time, part-time, and temporary jobs;
  160         8. The total number of individuals employed in the state by
  161  the applicant corporation’s corporate parent, and its
  162  subsidiaries, as of December 31 of the prior fiscal year,
  163  categorized by full-time, part-time, and temporary jobs;
  164         9.The economic development subsidy for which the applicant
  165  corporation is applying and the subsidy value;
  166         10.The number of new jobs expected to be created by the
  167  applicant corporation for the project, categorized by full-time,
  168  part-time, and temporary jobs;
  169         11.The average hourly wage to be paid to all current and
  170  new employees of the project, categorized by full-time, part
  171  time, and temporary jobs, and also categorized by wage groups as
  172  follows:
  173         a. A wage of $6 or less an hour;
  174         b. A wage of $6.01 to $7 an hour;
  175         c. A wage of $7.01 to $8 an hour;
  176         d. A wage of $8.01 to $9 an hour;
  177         e. A wage of $9.01 to $10 an hour;
  178         f. A wage of $10.01 to $11 an hour;
  179         g. A wage of $11.01 to $12 an hour;
  180         h. A wage of $12.01 to $13 an hour
  181         i. A wage of $13.01 to $14 an hour; and
  182         j. A wage of $14.01 or more per hour;
  183         12.The average hourly wage paid to nonmanagerial employees
  184  for the industries involved in the project, as established by
  185  the United States Bureau of Labor Statistics for projects
  186  located in a metropolitan statistical area, as defined by the
  187  federal Office of Management and Budget;
  188         13.The average weekly wage paid to nonmanagerial employees
  189  in the county for industries involved in the project, as
  190  established by the United States Bureau of Labor Statistics for
  191  projects located outside metropolitan statistical areas, as
  192  defined by the federal Office of Management and Budget;
  193         14.The type and amount of health care coverage that the
  194  applicant corporation will provide employees within 90 days
  195  after commencement of employment at the project, including any
  196  costs to be borne by the employees;
  197         15.A list of the economic development subsidies that the
  198  applicant corporation is requesting and the name of any other
  199  granting body from which a subsidy is sought;
  200         16.A statement as to whether the economic development
  201  subsidy may reduce employment at any other business controlled
  202  by the applicant corporation or its corporate parent, within or
  203  outside the state, resulting from automation, merger,
  204  acquisition, corporate restructuring, or other business
  205  activity; and
  206         17.A certification by the chief officer of the applicant
  207  corporation as to the accuracy of the information provided on
  208  the application.
  209         (b) If the granting body approves the application, it must
  210  send a copy of the approved application to the department within
  211  15 days after the approval. If the application is not approved,
  212  the granting body shall retain the application in its records.
  213         (3) SUBSIDY LIMIT AND JOB QUALITY STANDARDS.—
  214         (a) A granting body may not grant an economic development
  215  subsidy if the cost per job is greater than $35,000. The cost
  216  shall be determined by dividing the amount of the subsidy by the
  217  number of full-time jobs expected to be created by the applicant
  218  corporation as approved by the granting body.
  219         (b) A granting body may grant a subsidy to a recipient
  220  corporation if the wages paid to employees at the project site
  221  are equal to or exceed 85 percent of the average wage as
  222  established pursuant to subparagraphs (2)(a)12. and 13. However,
  223  for small businesses, the average wage must equal or exceed 75
  224  percent of the wages established in subparagraphs (2)(a)12. and
  225  13. The computation of wages under this paragraph applies only
  226  to a recipient corporation that provides the health care
  227  coverage as approved in its application.
  228         (4) PROGRESS REPORTS.—
  229         (a)1.Each recipient corporation shall file a progress
  230  report with the granting body for each project by not later than
  231  January 1 of each year. The report must include:
  232         a.The application tracking numbers for the project and
  233  granting body;
  234         b.The name, street and mailing addresses, phone number,
  235  and chief officer of the granting body;
  236         c. The name, street and mailing addresses, phone number,
  237  and chief officer of the recipient corporation;
  238         d.A summary of the number of jobs required, created, and
  239  lost, categorized by full-time, part-time, and temporary jobs
  240  and by wage groups;
  241         e.The type and amount of health care coverage provided to
  242  each employee of the project and any costs of the health care
  243  coverage which are borne by the employees;
  244         f.A comparison of the total employment in the state by the
  245  recipient’s corporate parent on the date of the application and
  246  on the date of the report, categorized by full-time, part-time,
  247  and temporary jobs;
  248         g.A statement as to whether the use of the economic
  249  development subsidy during the previous fiscal year has reduced
  250  employment at any other business controlled by the recipient
  251  corporation or its corporate parent, within or outside the state
  252  as a result of automation, merger, acquisition, corporate
  253  restructuring, or other business activity; and
  254         h.A signed certification by the chief officer of the
  255  recipient corporation as to the accuracy of the information
  256  provided in the progress report.
  257         2.Each recipient corporation must file an annual progress
  258  report for the duration of the subsidy, or not less than 5
  259  years, whichever period is greater.
  260         3.The granting body shall provide a copy of each progress
  261  report from the recipient corporations to the department by
  262  February 1. After the first year, the granting body shall file
  263  an annual progress report that states whether each recipient
  264  corporation is in compliance with its job creation and wage and
  265  benefit goals and whether the corporate parent is in compliance
  266  with its employment requirement.
  267         (b)1.Not later than 15 days after the second anniversary
  268  of the date of subsidy, the granting body must file with the
  269  department a biennial progress report that includes the
  270  information provided by the recipient corporation pursuant to
  271  paragraph (a).
  272         2.The granting body shall state in the biennial progress
  273  report to the department whether the recipient corporation has
  274  achieved its job creation and wage and benefit goals and whether
  275  the corporate parent has maintained 90 percent of its employment
  276  in the state.
  277         (c) The department shall compile a summary of the
  278  information received in the progress reports and publish the
  279  information in both written and electronic form and post the
  280  information on the department’s website.
  281         (d) The recipient corporation shall allow the granting body
  282  and the department access at all reasonable times to the project
  283  site and the records of the recipient corporation in order to
  284  monitor the project and to prepare progress reports.
  285         (e) A recipient corporation that fails to provide the
  286  granting body with the information or access required pursuant
  287  to paragraphs (c) and (d) is subject to a fine of not less than
  288  $500 per day commencing 10 working days after the February 1
  289  deadline, and of not less than $1,000 per day commencing 20 days
  290  after the deadline.
  291         (5) UNIFIED REPORTING OF PROPERTY TAX REDUCTIONS AND
  292  ABATEMENTS.—
  293         (a) Each property-taxing entity shall annually report to
  294  the department by October 1 of each year, on a form prepared by
  295  the department:
  296         1. Information regarding real property located in the
  297  property-taxing entity’s jurisdiction which received a property
  298  tax abatement or reduction for the purpose of stimulating
  299  economic development during the fiscal year. Information shall
  300  include, but need not be limited to: the name of the property
  301  owner; the address of the property; the start and end dates of
  302  the property tax reduction or abatement; the schedule of the tax
  303  reduction; each tax abatement, reduction, and exemption for the
  304  property; and the amount of property tax revenue not paid to the
  305  property-taxing entity as a result of the reduction or
  306  abatement.
  307         2. The total property tax revenue not paid during the
  308  fiscal year as a result of all property tax reductions and
  309  abatements in each jurisdiction of the property-taxing entity.
  310         (b) The department shall provide a copy of each report to
  311  the Department of Revenue and shall annually compile the
  312  information contained in the reports required under
  313  subparagraphs (a)1. and 2. and publish summaries of the
  314  information in both written and electronic form and post the
  315  information on the department’s website.
  316         (6) REPORTING OF ECONOMIC DEVELOPMENT COSTS AND
  317  EXPENDITURES.—
  318         (a) The Department of Revenue shall annually report to the
  319  Legislature all direct and indirect costs and expenditures for
  320  economic development during the prior fiscal year, including,
  321  but not limited to:
  322         1.The amount of uncollected state tax revenues resulting
  323  from every corporate tax credit, abatement, exemption, and
  324  reduction provided by the state or a local governmental unit,
  325  including, but not limited to, gross receipts, income, sales,
  326  use, raw materials, excise, property, utility, and inventory
  327  taxes.
  328         2.The name of each recipient corporation that claimed any
  329  tax credit, abatement, exemption, or reduction reported under
  330  subparagraph 1. of a value equal to or greater than $5,000,
  331  together with the dollar amount received by each recipient
  332  corporation. A tax credit, abatement, exemption, or reduction
  333  received by a corporation of less than $5,000 need not be
  334  itemized, but the Department of Revenue shall report an
  335  aggregate dollar amount for each type of tax credit, abatement,
  336  exemption, or reduction and the number of recipient corporations
  337  aggregated for each.
  338         3. The funds appropriated by the Legislature for economic
  339  development, including budget line items for each state-funded
  340  entity concerned with economic development, including, but not
  341  limited to, state programs, vocational education programs, state
  342  university research programs, manufacturing extension services,
  343  workforce investment boards, economic development commissions,
  344  industrial development authorities, regional development
  345  authorities, and finance authorities.
  346         (b) The Department of Revenue shall annually compile the
  347  information provided under paragraph (a) and submit a unified
  348  economic development budget to the Legislature by October 1.
  349         (7) DEFAULT.—
  350         (a) A recipient corporation must fulfill the requirements
  351  for job creation, wages, health care coverage, and other
  352  benefits within 2 years after the date of subsidy. The recipient
  353  corporation must maintain the requirements for job creation,
  354  wages, health care coverage, and other benefits while the
  355  subsidy is in effect, or for 5 years, whichever period is
  356  longer.
  357         (b) The corporate parent of a recipient corporation must
  358  maintain at least 90 percent of its employment in the state
  359  while the economic development subsidy is in effect, or for 5
  360  years, whichever period is longer.
  361         (c)The recipient corporation shall return to the granting
  362  body the economic development subsidy if the recipient
  363  corporation fails to meet the requirements pursuant to paragraph
  364  (a) or paragraph (b), as follows:
  365         1.If the recipient corporation fails to create the
  366  required number of jobs or to pay the required wages or
  367  benefits, the amount repaid shall be based on the pro rata
  368  amount by which the unfulfilled jobs, wages, or benefits compare
  369  to the total amount of the economic development subsidy.
  370         2.If the corporate parent fails to maintain 90 percent of
  371  its employment in the state, the rate of repayment shall be two
  372  times the percentage by which the employment is less than 90
  373  percent.
  374         (d) The granting body shall notify the recipient
  375  corporation of the required repayment of the economic
  376  development subsidy and state the reasons and amount to be
  377  repaid. The recipient corporation shall remit to the granting
  378  body the payment within 60 calendar days after the date of the
  379  notice.
  380         (e) If a recipient corporation defaults on the requirements
  381  for receiving an economic development subsidy for 3 consecutive
  382  calendar years, the granting body shall declare the recipient
  383  corporation unqualified, and notify the department and the
  384  recipient corporation of the declaration of default. The
  385  recipient corporation must pay to the granting body all
  386  remaining value of the economic development subsidy it has not
  387  previously repaid within 180 calendar days after the date of the
  388  notice of the default.
  389         (8) PRIVATE ENFORCEMENT ACTION.—If a granting body fails to
  390  enforce any provision of this section, any individual who paid
  391  personal income taxes to the state in the calendar year before
  392  the year in dispute, or any organization representing such
  393  taxpayers, may bring a civil action in a court of competent
  394  jurisdiction to compel enforcement under this section. The court
  395  may award reasonable attorney fees and costs to a prevailing
  396  taxpayer or organization.
  397         (9) PUBLIC RECORD DISCLOSURE.—Any record required to be
  398  prepared or maintained under this section, including, but not
  399  limited to, an application, progress report, default notice, or
  400  any other related record or proceeding, is subject to chapter
  401  119, Florida Statutes.
  402         (10) PREEMPTION.—This section does not require or authorize
  403  any recipient corporation to reduce wages or benefits
  404  established under a collective bargaining agreement or state or
  405  federal prevailing wage law.
  406         Section 2. This act shall take effect July 1, 2012.