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.