Bill Text: FL S0774 | 2011 | Regular Session | Introduced


Bill Title: Economic Development

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2011-05-07 - Indefinitely postponed and withdrawn from consideration [S0774 Detail]

Download: Florida-2011-S0774-Introduced.html
       Florida Senate - 2011                                     SB 774
       
       
       
       By Senator Ring
       
       
       
       
       32-00462-11                                            2011774__
    1                        A bill to be entitled                      
    2         An act relating to economic development; creating the
    3         Commercialization Credit Transfer Program; providing
    4         legislative findings that it is in the state’s
    5         interest to promote the commercialization of products
    6         and services developed by technology companies;
    7         amending s. 213.053, F.S.; authorizing the Department
    8         of Revenue to share certain confidential information
    9         with the Office of Tourism, Trade, and Economic
   10         Development; amending s. 220.02, F.S.; adding the
   11         certified credits available under s. 220.194, F.S., to
   12         the list of credits that may be taken against state
   13         corporate income tax; amending s. 220.13, F.S.;
   14         redefining the term “adjusted federal income” in
   15         relation to net operating losses transferred and
   16         payments received for a certified credit pursuant to
   17         the Commercialization Credit Transfer Program;
   18         amending s. 220.16, F.S.; providing for the allocation
   19         of financial assistance pursuant to the
   20         Commercialization Credit Transfer Program as income in
   21         this state; creating s. 220.194, F.S.; creating the
   22         Commercialization Credit Transfer Program; providing a
   23         purpose, intent, goals, and objectives; providing
   24         definitions; requiring the office to certify eligible
   25         companies for the transfer of corporate income tax net
   26         operating loss amounts as certified credits; providing
   27         qualifications and an application process and
   28         requirements; requiring an application fee; providing
   29         for an application deadline; requiring the office to
   30         grant or deny an application within a specified time
   31         after receiving a completed application; providing for
   32         calculating the certified credit amount; providing a
   33         maximum amount that may be transferred; providing a
   34         penalty; requiring each certified company to file an
   35         annual report with the office; requiring the office to
   36         create an annual report; requiring the office to adopt
   37         rules; authorizing the Department of Revenue to adopt
   38         rules; providing appropriations; providing for future
   39         repeal of the Commercialization Credit Transfer
   40         Program; providing an effective date.
   41  
   42  Be It Enacted by the Legislature of the State of Florida:
   43  
   44         Section 1. Legislative findings.—The Legislature finds that
   45  it is in the best interests of this state to promote the
   46  commercialization of products and services developed by
   47  technology companies in this state which can lead to the
   48  creation of high-wage and high-skilled jobs. One mechanism to
   49  this end is the Commercialization Credit Transfer Program.
   50         Section 2. Paragraph (cc) is added to subsection (8) of
   51  section 213.053, Florida Statutes, to read:
   52         213.053 Confidentiality and information sharing.—
   53         (8) Notwithstanding any other provision of this section,
   54  the department may provide:
   55         (cc) Information relative to tax credits taken under s.
   56  220.194 to the Office of Tourism, Trade, and Economic
   57  Development.
   58  
   59  Disclosure of information under this subsection shall be
   60  pursuant to a written agreement between the executive director
   61  and the agency. Such agencies, governmental or nongovernmental,
   62  shall be bound by the same requirements of confidentiality as
   63  the Department of Revenue. Breach of confidentiality is a
   64  misdemeanor of the first degree, punishable as provided by s.
   65  775.082 or s. 775.083.
   66         Section 3. Subsection (8) of section 220.02, Florida
   67  Statutes, is amended to read:
   68         220.02 Legislative intent.—
   69         (8) It is the intent of the Legislature that credits
   70  against either the corporate income tax or the franchise tax be
   71  applied in the following order: those enumerated in s. 631.828,
   72  those enumerated in s. 220.191, those enumerated in s. 220.181,
   73  those enumerated in s. 220.183, those enumerated in s. 220.182,
   74  those enumerated in s. 220.1895, those enumerated in s. 221.02,
   75  those enumerated in s. 220.184, those enumerated in s. 220.186,
   76  those enumerated in s. 220.1845, those enumerated in s. 220.19,
   77  those enumerated in s. 220.185, those enumerated in s. 220.1875,
   78  those enumerated in s. 220.192, those enumerated in s. 220.193,
   79  those enumerated in s. 288.9916, those enumerated in s.
   80  220.1899, and those enumerated in s. 220.1896, and those
   81  enumerated in s. 220.194.
   82         Section 4. Paragraph (b) of subsection (1) of section
   83  220.13, Florida Statutes, is amended to read:
   84         220.13 “Adjusted federal income” defined.—
   85         (1) The term “adjusted federal income” means an amount
   86  equal to the taxpayer’s taxable income as defined in subsection
   87  (2), or such taxable income of more than one taxpayer as
   88  provided in s. 220.131, for the taxable year, adjusted as
   89  follows:
   90         (b) Subtractions.—
   91         1. There shall be subtracted from such taxable income:
   92         a. The net operating loss deduction allowable for federal
   93  income tax purposes under s. 172 of the Internal Revenue Code
   94  for the taxable year,
   95         b. The net capital loss allowable for federal income tax
   96  purposes under s. 1212 of the Internal Revenue Code for the
   97  taxable year,
   98         c. The excess charitable contribution deduction allowable
   99  for federal income tax purposes under s. 170(d)(2) of the
  100  Internal Revenue Code for the taxable year, and
  101         d. The excess contributions deductions allowable for
  102  federal income tax purposes under s. 404 of the Internal Revenue
  103  Code for the taxable year, except that any net operating loss
  104  transferred pursuant to s. 220.194 may not be deducted by the
  105  seller.
  106  
  107  However, a net operating loss and a capital loss shall never be
  108  carried back as a deduction to a prior taxable year, but all
  109  deductions attributable to such losses shall be deemed net
  110  operating loss carryovers and capital loss carryovers,
  111  respectively, and treated in the same manner, to the same
  112  extent, and for the same time periods as are prescribed for such
  113  carryovers in ss. 172 and 1212, respectively, of the Internal
  114  Revenue Code.
  115         2. There shall be subtracted from such taxable income any
  116  amount to the extent included therein the following:
  117         a. Dividends treated as received from sources without the
  118  United States, as determined under s. 862 of the Internal
  119  Revenue Code.
  120         b. All amounts included in taxable income under s. 78 or s.
  121  951 of the Internal Revenue Code.
  122  
  123  However, as to any amount subtracted under this subparagraph,
  124  there shall be added to such taxable income all expenses
  125  deducted on the taxpayer’s return for the taxable year which are
  126  attributable, directly or indirectly, to such subtracted amount.
  127  Further, no amount shall be subtracted with respect to dividends
  128  paid or deemed paid by a Domestic International Sales
  129  Corporation.
  130         3. In computing “adjusted federal income” for taxable years
  131  beginning after December 31, 1976, there shall be allowed as a
  132  deduction the amount of wages and salaries paid or incurred
  133  within this state for the taxable year for which no deduction is
  134  allowed pursuant to s. 280C(a) of the Internal Revenue Code
  135  (relating to credit for employment of certain new employees).
  136         4. There shall be subtracted from such taxable income any
  137  amount of nonbusiness income included therein, including
  138  payments received for a certified credit pursuant to s. 220.194.
  139         5. There shall be subtracted any amount of taxes of foreign
  140  countries allowable as credits for taxable years beginning on or
  141  after September 1, 1985, under s. 901 of the Internal Revenue
  142  Code to any corporation which derived less than 20 percent of
  143  its gross income or loss for its taxable year ended in 1984 from
  144  sources within the United States, as described in s.
  145  861(a)(2)(A) of the Internal Revenue Code, not including credits
  146  allowed under ss. 902 and 960 of the Internal Revenue Code,
  147  withholding taxes on dividends within the meaning of sub
  148  subparagraph 2.a., and withholding taxes on royalties, interest,
  149  technical service fees, and capital gains.
  150         6. Notwithstanding any other provision of this code, except
  151  with respect to amounts subtracted pursuant to subparagraphs 1.
  152  and 3., any increment of any apportionment factor which is
  153  directly related to an increment of gross receipts or income
  154  which is deducted, subtracted, or otherwise excluded in
  155  determining adjusted federal income shall be excluded from both
  156  the numerator and denominator of such apportionment factor.
  157  Further, all valuations made for apportionment factor purposes
  158  shall be made on a basis consistent with the taxpayer’s method
  159  of accounting for federal income tax purposes.
  160         Section 5. Subsection (5) is added to section 220.16,
  161  Florida Statutes, to read:
  162         220.16 Allocation of nonbusiness income.—Nonbusiness income
  163  shall be allocated as follows:
  164         (5) The amount of financial assistance received in exchange
  165  for transferring a net operating loss as authorized by s.
  166  220.194 is allocable to this state.
  167         Section 6. Section 220.194, Florida Statutes, is created to
  168  read:
  169         220.194Commercialization Credit Transfer Program; transfer
  170  of net loss carryforward as a certified credit.—
  171         (1)PURPOSE; GOALS AND OBJECTIVES.—It is the intent of the
  172  Legislature that the Commercialization Credit Transfer Program
  173  act as a catalyst for eligible technology companies to
  174  accelerate their revenue and job growth and their market
  175  penetration by monetizing their net operating losses into
  176  transferable credits. The program’s objectives include:
  177         (a)Accelerating the entry of new technology-based products
  178  and services into the marketplace;
  179         (b)Producing high-wage, technology-based jobs for this
  180  state; and
  181         (c)Encouraging the expansion of high-impact technology
  182  based firms in this state.
  183         (2)DEFINITIONS.—As used in this section, the term:
  184         (a)“Certified credit” means the product of the net
  185  operating loss generated in the current year apportioned to
  186  Florida, multiplied by the corporate income tax rate imposed
  187  during the year in which the loss occurred.
  188         (b)“Department” means the Department of Revenue.
  189         (c)“Office” means the Office of Tourism, Trade, and
  190  Economic Development.
  191         (3)ELIGIBILITY.—A company seeking to transfer a certified
  192  credit shall be certified by the office if it timely files a
  193  completed application and meets the requirements of this
  194  subsection. For purposes of this subsection, all conditions in
  195  paragraphs (a)-(g) must be met by the date that the application
  196  is filed with the office. In order to be certified, a company
  197  must demonstrate that it:
  198         (a)Is registered with the Secretary of State to operate in
  199  this state and is operating in Florida.
  200         (b)Is primarily engaged in developing, manufacturing,
  201  producing, or providing technology for commercial or public
  202  purposes and has a federally assigned NAICS code identifying the
  203  company as such.
  204         (c)Has fewer than 100 full-time employees worldwide,
  205  including full-time employees leased to the applicant, of which
  206  at least 75 percent work full time in this state at the time the
  207  transfer of certified credits is first allowed.
  208         (d)Has been audited by an independent certified public
  209  accountant, and:
  210         1.Has not had positive net income in either of the 2
  211  previous years of ongoing operations;
  212         2.Has reported a net operating loss in either of the 2
  213  previous years of operation; and
  214         3.Is not at least 50 percent owned or controlled, directly
  215  or indirectly, by another corporation that has demonstrated
  216  positive net income in either of the 2 previous years of ongoing
  217  operations, or is not part of a consolidated group of affiliated
  218  corporations, as filed for federal income tax purposes, which in
  219  the aggregate demonstrated positive net income in either of the
  220  2 previous years of ongoing operations.
  221         (e)Has at least one active application for a patent under
  222  35 U.S.C. s. 111(a) on file with the United States Patent and
  223  Trademark Office.
  224         (f)Has received research grants from governmental
  225  entities, foundations, or other private entities, or received
  226  financial assistance from investors.
  227         (g)Has an established business plan that describes its
  228  commercialization strategy, a business-development plan that
  229  includes revenue projections and a strategy for becoming
  230  profitable, and a timeline for development which addresses
  231  revenue growth and job creation in this state.
  232         (h)Has certified that:
  233         1.It will not transfer a certified credit in exchange for
  234  private financial assistance in an amount that is less than 80
  235  percent of the certified credit;
  236         2.All proceeds from the transfer will be expended to
  237  support the operation or expansion of the company’s business
  238  activity in this state; and
  239         3.Upon transfer of a certified credit, it will notify the
  240  office of the amount within 30 days after each certified credit
  241  is transferred, the amount of the financial compensation for the
  242  credit received, and the identity of the purchaser of the
  243  certified credit.
  244         (4)APPLICATION FOR CERTIFICATION.—
  245         (a)A completed application must be filed with the office
  246  on or after 2 p.m. on the first business day of August
  247  commencing in 2011. The office may investigate the
  248  qualifications of each company applicant and may require by rule
  249  the applicant to provide such evidence of its qualification as
  250  is necessary to ensure compliance with the requirements of this
  251  section, including, but not limited to, the state corporate
  252  income tax return supporting the request for certification of a
  253  certified credit, audited financial statements, federal tax
  254  returns, and state and federal employment filings.
  255         (b)The office shall require a nonrefundable application
  256  fee of $100 per application submitted. The department shall
  257  cooperate with the office in its review of the applications.
  258         (c)The office shall grant or deny an application in full
  259  or in part within 90 days after receiving a completed
  260  application containing the necessary information, including
  261  payment of the application fee. If the office denies any part of
  262  the application, it shall inform the applicant of the grounds
  263  for the denial.
  264         (d)This section does not create a presumption that a
  265  company applicant will be approved by the office to transfer its
  266  certified credits. However, the office may issue a nonbinding
  267  opinion letter, upon the request of a prospective applicant, as
  268  to its eligibility and the potential amount of certified credits
  269  available.
  270         (5)CALCULATION OF CERTIFIED CREDIT TRANSFER AMOUNT AND
  271  LIMITATIONS.—When submitting an application for certification, a
  272  company shall state the amount of the net operating loss,
  273  including any net operating loss carryover, which it requests to
  274  be transferred as a certified credit. To the extent allowed as a
  275  deduction in this state, a reported net operating loss not
  276  otherwise taken may be certified by the office for transfer by a
  277  certified company in exchange for private financial assistance
  278  from a purchaser as follows:
  279         (a)The net operating loss shall be transferred as a
  280  certified credit.
  281         (b)The maximum amount of certified credits which a company
  282  may transfer during its existence may not exceed $1 million.
  283         (c)The office may not certify the transfer of more than $3
  284  million in certified credits during a state fiscal year.
  285         (d)The certified company is liable if, after a transfer,
  286  its net operating loss is adjusted by amendment or as a result
  287  of any other recomputation or redetermination of federal or
  288  Florida taxable income or loss. The certified company is also
  289  liable for a penalty equal to the amount of the credit
  290  transferred, reduced in proportion to the amount of the net
  291  operating loss certified for transfer over the amount of the
  292  certified net operating loss disallowed.
  293         (e)The certified company and its successors shall maintain
  294  all records necessary to support the reported amount of
  295  certified credits.
  296         (6)PURCHASE OF TRANSFERRED CERTIFIED CREDITS.—
  297         (a)The certified credit must be reported as a credit
  298  against tax due by the unaffiliated corporate purchaser on the
  299  next tax return due to be filed by the purchaser, but in no case
  300  may it be reported later than 1 year after the date of transfer.
  301         (b)If the certified credit is larger than the amount owed
  302  the state on the tax return for the time period in which the
  303  credit is claimed, after applying the other credits and unused
  304  credit carryovers in the order provided in s. 220.02(8), the
  305  amount of the credit for that time period shall be the amount
  306  owed the state on that tax return. Unused certified credit
  307  amounts remaining may not be carried forward.
  308         (c)The purchaser of a certified credit amount may not
  309  further sell, or otherwise transfer, the certified credit
  310  amount.
  311         (d)It is the responsibility of the certified company that
  312  transferred the certified credit amount to notify the office,
  313  within 30 days after transfer, of the amount of each certified
  314  credit transferred, the amount of the financial assistance
  315  received, and the identity of the purchaser of the certified
  316  credit. The office shall certify to the department the same
  317  information within 14 working days.
  318         (7)REPORTING REQUIREMENTS.—
  319         (a) Each company that is certified to transfer its
  320  certified credit must provide the office with an annual report
  321  on its development covering the year after it receives funds
  322  from transferring its certified credits. The report must include
  323  a summary of the company’s commercialization strategy; business
  324  development plan; timeline for development; and actual
  325  employment and employment projections, both total and within
  326  this state only. The report is due January 3 of each applicable
  327  year.
  328         (b) The office shall provide a report by February 1 each
  329  year to the Governor, the President of the Senate, and the
  330  Speaker of the House of Representatives containing a synopsis of
  331  the individual company reports described in paragraph (a).
  332         (8)RULEMAKING AUTHORITY.—
  333         (a)The office shall adopt rules to administer this
  334  section. The rules must establish the criteria for qualified
  335  technology research and experimental development, production, or
  336  provision of technology for commercial or public purposes; the
  337  format of application forms; and the procedures to implement the
  338  program.
  339         (b)The department may adopt rules to administer this
  340  section.
  341         Section 7. (1)The sum of $.... is appropriated to the
  342  Economic Development Trust Fund to be drawn, as needed, to pay
  343  the administrative costs incurred by the Office of Tourism,
  344  Trade, and Economic Development and associated with implementing
  345  the commercialization credit transfer program.
  346         (2)The sum of $.... is appropriated to the Department of
  347  Revenue to pay the initial administrative costs associated with
  348  amending tax forms, modifying computer software, creating a
  349  tracking system for the transferred credits, and otherwise
  350  implementing the commercialization credit transfer program.
  351         Section 8. Section 220.194, Florida Statutes, is repealed
  352  effective June 30, 20l6, unless reviewed and saved from repeal
  353  through reenactment by the Legislature.
  354         Section 9. This act shall take effect July 1, 2011.

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