Bill Text: FL S1394 | 2019 | Regular Session | Introduced
Bill Title: Entertainment Industry Financial Incentive Program
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2019-05-03 - Died in Commerce and Tourism [S1394 Detail]
Download: Florida-2019-S1394-Introduced.html
Florida Senate - 2019 SB 1394 By Senator Torres 15-01226-19 20191394__ 1 A bill to be entitled 2 An act relating to the entertainment industry 3 financial incentive program; reviving, readopting, and 4 amending s. 288.1254, F.S., relating to the 5 entertainment industry financial incentive program; 6 deleting terms; revising the purpose of the 7 entertainment industry financial incentive program; 8 revising the application process for the program; 9 revising the certification process for tax credit 10 awards under the program; requiring that the names of 11 certain cities, towns, and counties be included in 12 certain credits; revising the process for determining 13 the priority of a qualified production for tax credit 14 awards; revising the eligibility requirements for a 15 tax credit award and the amount of tax credits that 16 may be awarded; revising the date on which or after 17 which a certified production company or certain 18 persons may relinquish tax credits; revising the 19 aggregate amount of tax credits that may be certified 20 per fiscal year; requiring that a specified amount of 21 funding be allocated to counties; authorizing a local 22 film commission to negotiate tax credit awards with a 23 potential certified production company; authorizing 24 allocations that are not encumbered by a specified 25 date to be made available to other counties; providing 26 for a scheduled repeal of the act; providing 27 exceptions; providing an effective date. 28 29 Be It Enacted by the Legislature of the State of Florida: 30 31 Section 1. Notwithstanding the repeal of section 288.1254, 32 Florida Statutes, in section 15 of chapter 2012-32, Laws of 33 Florida, section 288.1254, Florida Statutes, is revived, 34 readopted, and amended to read: 35 288.1254 Entertainment industry financial incentive 36 program.— 37 (1) DEFINITIONS.—As used in this section, the term: 38 (a) “Certified production” means a qualified production 39 that has tax credits allocated to it by the department based on 40 the production’s estimated qualified expenditures, up to the 41 production’s maximum certified amount of tax credits, by the 42 department. The term does not include a production if its first 43 day of principal photography or project start date in this state 44 occurs before the production is certified by the department, 45 unless the production spans more than 1 fiscal year, was a 46 certified production on its first day of principal photography 47 or project start date in this state, and submits an application 48 for continuing the same production for the subsequent fiscal 49 year. 50 (b) “Digital media project” means a production of 51 interactive entertainment that is produced for distribution in 52 commercial or educational markets. The term includes a video 53 game or production intended for Internet or wireless 54 distribution, an interactive website, digital animation, and 55 visual effects, including, but not limited to, three-dimensional 56 movie productions and movie conversions. The term does not 57 include a production that contains content that is obscene as 58 defined in s. 847.001. 59 (c) “High-impact digital media project” means a digital 60 media project that has qualified expenditures greater than $4.5 61 million. 62 (d) “High-impact television series” means a production 63 created to run multiple production seasons and having an 64 estimated order of at least seven episodes per season and 65 qualified expenditures of at least $625,000 per episode. 66 (e) “Off-season certified production” means a feature film, 67 independent film, or television series or pilot that films 75 68 percent or more of its principal photography days from June 1 69 through November 30. 70 (f) “Principal photography” means the filming of major or 71 significant components of the qualified production which involve 72 lead actors. 73 (g) “Production” means a theatrical or direct-to-video 74 motion picture; a made-for-television motion picture; visual 75 effects or digital animation sequences produced in conjunction 76 with a motion picture; a commercial; a music video; an 77 industrial or educational film; an infomercial; a documentary 78 film; a television pilot program; a presentation for a 79 television pilot program; a television series, including, but 80 not limited to, a drama, a reality show, a comedy, a soap opera, 81 a telenovela, a game show, an awards show, or a miniseries 82 production; or a digital media project by the entertainment 83 industry. One season of a television series is considered one 84 production. The term does not include a weather or market 85 program; a sporting event or a sporting event broadcast; a gala; 86 a production that solicits funds; a home shopping program; a 87 political program; a political documentary; political 88 advertising; a gambling-related project or production; a concert 89 production; a local, regional, or Internet-distributed-only news 90 show or current-events show; a sports news or sports recap show; 91 a pornographic production; or any production deemed obscene 92 under chapter 847. A production may be produced on or by film, 93 tape, or otherwise by means of a motion picture camera; 94 electronic camera or device; tape device; computer; any 95 combination of the foregoing; or any other means, method, or 96 device. 97 (h) “Production expenditures” means the costs of tangible 98 and intangible property used for, and services performed 99 primarily and customarily in, production, including 100 preproduction and postproduction, but excluding costs for 101 development, marketing, and distribution. The term includes, but 102 is not limited to: 103 1. Wages, salaries, or other compensation paid to legal 104 residents of this state, including amounts paid through payroll 105 service companies, for technical and production crews, 106 directors, producers, and performers. 107 2. Net expenditures for sound stages, backlots, production 108 editing, digital effects, sound recordings, sets, and set 109 construction. 110 3. Net expenditures for rental equipment, including, but 111 not limited to, cameras and grip or electrical equipment. 112 4. Up to $300,000 of the costs of newly purchased computer 113 software and hardware unique to the project, including servers, 114 data processing, and visualization technologies, which are 115 located in and used exclusively in the state for the production 116 of digital media. 117 5. Expenditures for meals, travel, and accommodations. For 118 purposes of this paragraph, the term “net expenditures” means 119 the actual amount of money a qualified production spent for 120 equipment or other tangible personal property, after subtracting 121 any consideration received for reselling or transferring the 122 item after the qualified production ends, if applicable. 123 (i) “Qualified expenditures” means production expenditures 124 incurred in this state by a qualified production for: 125 1. Goods purchased or leased from, or services, including, 126 but not limited to, insurance costs and bonding, payroll 127 services, and legal fees, which are provided by, a vendor or 128 supplier in this state that is registered with the Department of 129 State or the Department of Revenue, has a physical location in 130 this state, and employs one or more legal residents of this 131 state. This does not include rebilled goods or services provided 132 by an in-state company from out-of-state vendors or suppliers. 133 When services provided by the vendor or supplier include 134 personal services or labor, only personal services or labor 135 provided by residents of this state, evidenced by the required 136 documentation of residency in this state, qualify. 137 2. Payments to legal residents of this state in the form of 138 salary, wages, or other compensation up to a maximum of $400,000 139 per resident unless otherwise specified in subsection (4). A 140 completed declaration of residency in this state must accompany 141 the documentation submitted to the office for reimbursement. 142 143 For a qualified production involving an event, such as an awards 144 show, the term does not include expenditures solely associated 145 with the event itself and not directly required by the 146 production. The term does not include expenditures incurred 147 before certification, with the exception of those incurred for a 148 commercial, a music video, or the pickup of additional episodes 149 of a high-impact television series within a single season. Under 150 no circumstances may the qualified production include in the 151 calculation for qualified expenditures the original purchase 152 price for equipment or other tangible property that is later 153 sold or transferred by the qualified production for 154 consideration. In such cases, the qualified expenditure is the 155 net of the original purchase price minus the consideration 156 received upon sale or transfer. 157 (j) “Qualified production” means a production in this state 158 meeting the requirements of this section. The term does not 159 include a production: 160 1. In which, for the first 2 years of the incentive 161 program, less than 50 percent, and thereafter, less than 60 162 percent, of the positions that make up its production cast and 163 below-the-line production crew, or, in the case of digital media 164 projects, less than 75 percent of such positions, are filled by 165 legal residents of this state, whose residency is demonstrated 166 by a valid Florida driver license or other state-issued 167 identification confirming residency, or students enrolled full 168 time in a film-and-entertainment-related course of study at an 169 institution of higher education in this state; or 170 2. That contains obscene content as defined in s. 171 847.001(10). 172 (k) “Qualified production company” means a corporation, 173 limited liability company, partnership, or other legal entity 174 engaged in one or more productions in this state. 175 (l) “Qualified digital media production facility” means a 176 building or series of buildings and their improvements in which 177 data processing, visualization, and sound synchronization 178 technologies are regularly applied for the production of 179 qualified digital media projects or the digital animation 180 components of qualified productions. 181 (m) “Qualified production facility” means a building or 182 complex of buildings and their improvements and associated 183 backlot facilities in which regular filming activity for film or 184 television has occurred for a period of no less than 1 year and 185 which contain at least one sound stage of at least 7,800 square 186 feet. 187(n) “Regional population ratio” means the ratio of the188population of a region to the population of this state. The189regional population ratio applicable to a given fiscal year is190the regional population ratio calculated by the Office of Film191and Entertainment using the latest official estimates of192population certified under s. 186.901, available on the first193day of that fiscal year.194(o) “Regional tax credit ratio” means a ratio the numerator195of which is the sum of tax credits awarded to productions in a196region to date plus the tax credits certified, but not yet197awarded, to productions currently in that region and the198denominator of which is the sum of all tax credits awarded in199the state to date plus all tax credits certified, but not yet200awarded, to productions currently in the state. The regional tax201credit ratio applicable to a given year is the regional tax202credit ratio calculated by the Office of Film and Entertainment203using credit award and certification information available on204the first day of that fiscal year.205(p) “Underutilized region” for a given state fiscal year206means a region with a regional tax credit ratio applicable to207that fiscal year that is lower than its regional population208ratio applicable to that fiscal year. The following regions are209established for purposes of making this determination:2101. North Region, consisting of Alachua, Baker, Bay,211Bradford, Calhoun, Clay, Columbia, Dixie, Duval, Escambia,212Franklin, Gadsden, Gilchrist, Gulf, Hamilton, Holmes, Jackson,213Jefferson, Lafayette, Leon, Levy, Liberty, Madison, Nassau,214Okaloosa, Putnam, Santa Rosa, St. Johns, Suwannee, Taylor,215Union, Wakulla, Walton, and Washington Counties.2162. Central East Region, consisting of Brevard, Flagler,217Indian River, Lake, Okeechobee, Orange, Osceola, Seminole, St.218Lucie, and Volusia Counties.2193. Central West Region, consisting of Citrus, Hernando,220Hillsborough, Manatee, Marion, Polk, Pasco, Pinellas, Sarasota,221and Sumter Counties.2224. Southwest Region, consisting of Charlotte, Collier,223DeSoto, Glades, Hardee, Hendry, Highlands, and Lee Counties.2245. Southeast Region, consisting of Broward, Martin, Miami225Dade, Monroe, and Palm Beach Counties.226 (n)(q)“Interactive website” means a website or group of 227 websites that includes interactive and downloadable content, and 228 creates 25 new Florida full-time equivalent positions operating 229 from a principal place of business located within Florida. An 230 interactive website or group of websites must provide 231 documentation that those jobs were created to the Office of Film 232 and Entertainment prior to the award of tax credits. Each 233 subsequent program application must provide proof that 25 234 Florida full-time equivalent positions are maintained. 235 (2) CREATION AND PURPOSE OF PROGRAM.—The entertainment 236 industry financial incentive program is created within the 237 Office of Film and Entertainment. The purpose of this program is 238 to encourage the use of this state and all of the counties in 239 this state as a site for filming, for the digital production of 240 films, and to develop and sustain the workforce and 241 infrastructure for film, digital media, and entertainment 242 production. 243 (3) APPLICATION PROCEDURE; APPROVAL PROCESS.— 244 (a) Program application.—A qualified production company 245 producing a qualified production in this state may submit a 246 program application to the Office of Film and Entertainment for 247 the purpose of determining qualification for an award of tax 248 credits authorized by this section no earlier than 180 days 249 before the first day of principal photography or project start 250 date in this state. The applicant shall provide the Office of 251 Film and Entertainment with information required to determine 252 whether the production is a qualified production and to 253 determine the qualified expenditures and other information 254 necessary for the office to determine eligibility for the tax 255 credit. 256 (b) Required documentation.—The Office of Film and 257 Entertainment shall develop an application form for qualifying 258 an applicant as a qualified production. The form must include, 259 but need not be limited to, production-related information 260 concerning employment of residents in this state, a detailed 261 budget of planned qualified expenditures, and the applicant’s 262 signed affirmation that the information on the form has been 263 verified and is correct. The Office of Film and Entertainment 264 and local film commissions shall distribute the form. 265 (c) Application process.—The Office of Film and 266 Entertainment shall establish a process by which an application 267 is accepted and reviewed and by which tax credit eligibility and 268 the award amount are determined in conjunction with county 269 allocations. The Office of Film and Entertainment shallmay270 request assistance from a duly appointed local film commission 271 in determining compliance with this section. A certified high 272 impact television series may submit an initial application for 273 no more than two successive seasons, notwithstanding the fact 274 that the successive seasons have not been ordered. The 275 successive season’s qualified expenditure amounts shall be based 276 on the current season’s estimated qualified expenditures. Upon 277 the completion of production of each season, a high-impact 278 television series may submit an application for no more than one 279 additional season. 280 (d) Certification.—The Office of Film and Entertainment 281 shall review the application within 15 business days after 282 receipt. Upon its determination that the application contains 283 all the information required by this subsection and meets the 284 criteria set out in this section, the Office of Film and 285 Entertainment shall qualify the applicant and recommend to the 286 department that the applicant be certified for the maximum tax 287 credit award amount per qualifying county. Within 5 business 288 days after receipt of the recommendation, the department shall 289 reject the recommendation or certify the maximum recommended tax 290 credit award, if any, to the applicant, to the applicable local 291 film commissions, and to the executive director of the 292 Department of Revenue. 293 (e) Grounds for denial.—The Office of Film and 294 Entertainment shall deny an application if it determines that 295 the application is not complete or the production or application 296 does not meet the requirements of this section. Within 90 days 297 after submitting a program application, except with respect to 298 applications in the independent and emerging media queue, a 299 production must provide proof of project financing to the Office 300 of Film and Entertainment, otherwise the project is deemed 301 denied and withdrawn. A project that has been withdrawn may 302 submit a new application upon providing the Office of Film and 303 Entertainment proof of financing. 304 (f) Verification of actual qualified expenditures.— 305 1. The Office of Film and Entertainment shall develop a 306 process to verify the actual qualified expenditures of a 307 certified production. The process must require: 308 a. A certified production to submit, in a timely manner 309 after production ends in this state and after making all of its 310 qualified expenditures in this state, data substantiating each 311 qualified expenditure, including documentation on the net 312 expenditure on equipment and other tangible personal property by 313 the qualified production, to an independent certified public 314 accountant licensed in this state; 315 b. Such accountant to conduct a compliance audit, at the 316 certified production’s expense, to substantiate each qualified 317 expenditure and submit the results as a report, along with the 318 required substantiating data, to the Office of Film and 319 Entertainment; and 320 c. The Office of Film and Entertainment to review the 321 accountant’s submittal and report to the department the final 322 verified amount of actual qualified expenditures made by the 323 certified production. 324 2. The department shall determine and approve the final tax 325 credit award amount to each certified applicant based on the 326 final verified amount of actual qualified expenditures and shall 327 notify the executive director of the Department of Revenue in 328 writing that the certified production has met the requirements 329 of the incentive program and of the final amount of the tax 330 credit award. The final tax credit award amount may not exceed 331 the maximum tax credit award amount certified under paragraph 332 (d). 333 (g) Promoting Florida.—The Office of Film and Entertainment 334 shall ensure that, as a condition of receiving a tax credit 335 under this section, marketing materials promoting this state as 336 a tourist destination or film and entertainment production 337 destination are included, when appropriate, at no cost to the 338 state, which must, at a minimum, include placement of a “Filmed 339 in Florida” or “Produced in Florida” logo in the end credits and 340 a list of the cities, towns, and counties where filming 341 occurred. The placement of a “Filmed in Florida” or “Produced in 342 Florida” logo on all packaging material and hard media is also 343 required, unless such placement is prohibited by licensing or 344 other contractual obligations. The size and placement of such 345 logo shall be commensurate to other logos used. If no logos are 346 used, the statement “Filmed in Florida using Florida’s 347 Entertainment Industry Financial Incentive,” or a similar 348 statement approved by the Office of Film and Entertainment, 349 shall be used. The Office of Film and Entertainment shall 350 provide a logo and supply it for the purposes specified in this 351 paragraph. A 30-second “Visit Florida” promotional video must 352 also be included on all optical disc formats of a film, unless 353 such placement is prohibited by licensing or other contractual 354 obligations. The 30-second promotional video shall be approved 355 and provided by the Florida Tourism Industry Marketing 356 Corporation in consultation with the Commissioner of Film and 357 Entertainment. 358 (4) TAX CREDIT ELIGIBILITY; TAX CREDIT AWARDS; QUEUES; 359 ELECTION AND DISTRIBUTION; CARRYFORWARD; CONSOLIDATED RETURNS; 360 PARTNERSHIP AND NONCORPORATE DISTRIBUTIONS; MERGERS AND 361 ACQUISITIONS.— 362 (a) Priority for tax credit award.—The priority of a 363 qualified production for tax credit awards must be determined 364 by: 365 1. The highest percentage of production filmed and produced 366 in this state or the highest projected positive fiscal impact 367 for this state; and 368 2. The availability of unencumbered fundson a first-come,369first-served basis within its appropriate queue. Each qualified370production must be placed into the appropriate queue and is371subject to the requirements of that queue. 372 (b) Tax credit eligibility.— 373 1. General production queue.—Ninety-four percent of tax 374 credits authorized pursuant to subsection (6) in any state 375 fiscal year must be dedicated to the general production queue. 376 The general production queue consists of all qualified 377 productions other than those eligible for the commercial and 378 music video queue or the independent and emerging media 379 production queue. A qualified production that demonstrates a 380 minimum of $625,000 in qualified expenditures is eligible for 381 tax credits equal to up to 35 percent20 percentof its actual 382 qualified expenditures or $8 million, whichever is less, 383 determined by film commission offices in the counties where 384 production will take placeup to a maximumof $8 million. A 385 qualified production that incurs qualified expenditures during 386 multiple state fiscal years may combine those expenditures to 387 satisfy the $625,000 minimum threshold. 388 a. An off-season certified production that is a feature 389 film, independent film, or television series or pilot is 390 eligible for an additional 5 percent tax credit on actual 391 qualified expenditures, but such tax credit may not cause the 392 qualified production to exceed the 35 percent tax credit cap 393 prescribed in subparagraph 1. An off-season certified production 394 that does not complete 75 percent of principal photography due 395 to a disruption caused by a hurricane or tropical storm may not 396 be disqualified from eligibility for the additional 5 percent 397 credit as a result of the disruption. 398 b. If more than 45 percent of the sum of total tax credits 399 initially certified and awarded after April 1, 2012, total tax 400 credits initially certified after April 1, 2012, but not yet 401 awarded, and total tax credits available for certification after 402 April 1, 2012, but not yet certified has been awarded for high 403 impact television series, then no high-impact television series 404 is eligible for tax credits under this subparagraph. Tax credits 405 initially certified for a high-impact television series after 406 April 1, 2012, may not be awarded if the award will cause the 407 percentage threshold in this sub-subparagraph to be exceeded. 408 This sub-subparagraph does not prohibit the award of tax credits 409 certified before April 1, 2012, for high-impact television 410 series. 411 c. Subject to sub-subparagraph b., first priority in the 412 queue for tax credit awards not yet certified shall be given to 413 high-impact television series and high-impact digital media 414 projects. For the purposes of determining priority between a 415 high-impact television series and a high-impact digital media 416 project, the first position must go to the first application 417 received. Thereafter, priority shall be determined by 418 alternating between a high-impact television series and a high 419 impact digital media project on a first-come, first-served 420 basis. However, if the Office of Film and Entertainment receives 421 an application for a high-impact television series or high 422 impact digital media project that would be certified but for the 423 alternating priority, the office may certify the project as 424 being in the priority position if an application that would 425 normally be the priority position is not received within 5 426 business days. 427d. A qualified production for which at least 67 percent of428its principal photography days occur within a region designated429as an underutilized region at the time that the production is430certified is eligible for an additional 5 percent tax credit.431 d.e.A qualified production that employs students enrolled 432 full-time in a film and entertainment-related or digital media 433 related course of study at an institution of higher education in 434 this state is eligible for an additional 4515percent tax 435 credit on qualified expenditures that are wages, salaries, or 436 other compensation paid to such students, not to exceed a 437 combined total of 38 percent of all qualified expenditures. The 438 additional 4515percent tax credit is also applicable to 439 persons hired within 12 months after graduating from a film and 440 entertainment-related or digital media-related course of study 441 at an institution of higher education in this state. The 442 additional 4515percent tax credit applies to qualified 443 expenditures that are wages, salaries, or other compensation 444 paid to such recent graduates for 1 year after the date of 445 hiring. 446 e.f.A qualified production for which 50 percent or more of 447 its principal photography occurs at a qualified production 448 facility, or a qualified digital media project or the digital 449 animation component of a qualified production for which 50 450 percent or more of the project’s or component’s qualified 451 expenditures are related to a qualified digital media production 452 facility, is eligible for an additional 5 percent tax credit on 453 actual qualified expenditures, not to exceed a combined total of 454 38 percent of all qualified expenditures for production activity 455 at that facility. 456 f.g.A qualified production is not eligible for tax credits 457 provided under this paragraph totaling more than 3830percent 458 of its actual qualified expenses. 459 2. Commercial and music video queue.—Three percent of tax 460 credits authorized pursuant to subsection (6) in any state 461 fiscal year must be dedicated to the commercial and music video 462 queue. A qualified production company that produces national or 463 regional commercials or music videos may be eligible for a tax 464 credit award if it demonstrates a minimum of $100,000 in 465 qualified expenditures per national or regional commercial or 466 music video and exceeds a combined threshold of $500,000 after 467 combining actual qualified expenditures from qualified 468 commercials and music videos during a single state fiscal year. 469 After a qualified production company that produces commercials, 470 music videos, or both reaches the threshold of $500,000, it is 471 eligible to apply for certification for a tax credit award. The 472 maximum credit award shall be equal to 20 percent of its actual 473 qualified expenditures up to a maximum of $500,000. If there is 474 a surplus at the end of a fiscal year after the Office of Film 475 and Entertainment certifies and determines the tax credits for 476 all qualified commercial and video projects, such surplus tax 477 credits shall be carried forward to the following fiscal year 478 and are available to any eligible qualified productions under 479 the general production queue. 480 3. Independent and emerging media production queue.—Three 481 percent of tax credits authorized pursuant to subsection (6) in 482 any state fiscal year must be dedicated to the independent and 483 emerging media production queue. This queue is intended to 484 encourage independent film and emerging media production in this 485 state. Any qualified production, excluding commercials, 486 infomercials, or music videos, which demonstrates at least 487 $20,000$100,000, but not more than $625,000, in total qualified 488 expenditures is eligible for tax credits equal to up to 30equal489to 20percent of its actual qualified expenditures, determined 490 by the local film commission in the county where the production 491 takes place. If a surplus exists at the end of a fiscal year 492 after the Office of Film and Entertainment certifies and 493 determines the tax credits for all qualified independent and 494 emerging media production projects, such surplus tax credits 495 shall be carried forward to the following fiscal year and are 496 available to any eligible qualified productions under the 497 general production queue. 498 4. Family-friendly productions.—A certified theatrical or 499 direct-to-video motion picture production or video game 500 determined by the Commissioner of Film and Entertainment, with 501 the advice of the Florida Film and Entertainment Advisory 502 Council, to be family-friendly, based on review of the script 503 and review of the final release version, is eligible for an 504 additional tax credit equal to 5 percent of its actual qualified 505 expenditures. Family-friendly productions are those that have 506 cross-generational appeal; would be considered suitable for 507 viewing by children age 5 or older; are appropriate in theme, 508 content, and language for a broad family audience; embody a 509 responsible resolution of issues; and do not exhibit or imply 510 any act of smoking, sex, nudity, or vulgar or profane language. 511 (c) Withdrawal of tax credit eligibility.—A qualified or 512 certified production must continue on a reasonable schedule, 513 which includes beginning principal photography or the production 514 project in this state no more than 45 calendar days before or 515 after the principal photography or project start date provided 516 in the production’s program application. The department shall 517 withdraw the eligibility of a qualified or certified production 518 that does not continue on a reasonable schedule. 519 (d) Election and distribution of tax credits.— 520 1. A certified production company receiving a tax credit 521 award under this section shall, at the time the credit is 522 awarded by the department after production is completed and all 523 requirements to receive a credit award have been met, make an 524 irrevocable election to apply the credit against taxes due under 525 chapter 220, against state taxes collected or accrued under 526 chapter 212, or against a stated combination of the two taxes. 527 The election is binding upon any distributee, successor, 528 transferee, or purchaser. The department shall notify the 529 Department of Revenue of any election made pursuant to this 530 paragraph. 531 2. A qualified production company is eligible for tax 532 credits against its sales and use tax liabilities and corporate 533 income tax liabilities as provided in this section. However, tax 534 credits awarded under this section may not be claimed against 535 sales and use tax liabilities or corporate income tax 536 liabilities for any tax period beginning before July 1, 2011, 537 regardless of when the credits are applied for or awarded. 538 (e) Tax credit carryforward.—If the certified production 539 company cannot use the entire tax credit in the taxable year or 540 reporting period in which the credit is awarded, any excess 541 amount may be carried forward to a succeeding taxable year or 542 reporting period. A tax credit applied against taxes imposed 543 under chapter 212 may be carried forward for a maximum of 5 544 years after the date the credit is awarded. A tax credit applied 545 against taxes imposed under chapter 220 may be carried forward 546 for a maximum of 5 years after the date the credit is awarded, 547 after which the credit expires and may not be used. 548 (f) Consolidated returns.—A certified production company 549 that files a Florida consolidated return as a member of an 550 affiliated group under s. 220.131(1) may be allowed the credit 551 on a consolidated return basis up to the amount of the tax 552 imposed upon the consolidated group under chapter 220. 553 (g) Partnership and noncorporate distributions.—A qualified 554 production company that is not a corporation as defined in s. 555 220.03 may elect to distribute tax credits awarded under this 556 section to its partners or members in proportion to their 557 respective distributive income or loss in the taxable year in 558 which the tax credits were awarded. 559 (h) Mergers or acquisitions.—Tax credits available under 560 this section to a certified production company may succeed to a 561 surviving or acquiring entity subject to the same conditions and 562 limitations as described in this section; however, they may not 563 be transferred again by the surviving or acquiring entity. 564 (5) TRANSFER OF TAX CREDITS.— 565 (a) Authorization.—Upon application to the Office of Film 566 and Entertainment and approval by the department, a certified 567 production company, or a partner or member that has received a 568 distribution under paragraph (4)(g), may elect to transfer, in 569 whole or in part, any unused credit amount granted under this 570 section. An election to transfer any unused tax credit amount 571 under chapter 212 or chapter 220 must be made no later than 5 572 years after the date the credit is awarded, after which period 573 the credit expires and may not be used. The department shall 574 notify the Department of Revenue of the election and transfer. 575 (b) Number of transfers permitted.—A certified production 576 company that elects to apply a credit amount against taxes 577 remitted under chapter 212 is permitted a one-time transfer of 578 unused credits to one transferee. A certified production company 579 that elects to apply a credit amount against taxes due under 580 chapter 220 is permitted a one-time transfer of unused credits 581 to no more than four transferees, and such transfers must occur 582 in the same taxable year. 583 (c) Transferee rights and limitations.—The transferee is 584 subject to the same rights and limitations as the certified 585 production company awarded the tax credit, except that the 586 initial transferee shall be permitted a one-time transfer of 587 unused credits to no more than two subsequent transferees, and 588 such transfers must occur in the same taxable year as the 589 credits were received by the initial transferee, after which the 590 subsequent transferees may not sell or otherwise transfer the 591 tax credit. 592 (6) RELINQUISHMENT OF TAX CREDITS.— 593 (a) Beginning July 1, 20192011, a certified production 594 company, or any person who has acquired a tax credit from a 595 certified production company pursuant to subsections (4) and 596 (5), may elect to relinquish the tax credit to the Department of 597 Revenue in exchange for 90 percent of the amount of the 598 relinquished tax credit. 599 (b) The Department of Revenue may approve payments to 600 persons relinquishing tax credits pursuant to this subsection. 601 (c) Subject to legislative appropriation, the Department of 602 Revenue shall request the Chief Financial Officer to issue 603 warrants to persons relinquishing tax credits. Payments under 604 this subsection shall be made from the funds from which the 605 proceeds from the taxes against which the tax credits could have 606 been applied pursuant to the irrevocable election made by the 607 certified production company under subsection (4) are deposited. 608 (7) ANNUAL ALLOCATION OF TAX CREDITS.— 609 (a) The aggregate amount of the tax credits that may be 610 certified pursuant to paragraph (3)(d) may not exceed $36 611 million per fiscal year.:612 1. The county for each House of Representatives district 613 must be allocated $300,000 on a pro rata basis based on the 614 percentage of the district located within the countyFor fiscal615year 2010-2011, $53.5 million. 616 2. A county film commission office may negotiate with a 617 potential certified production company as to the percentage of 618 the total tax credits awarded it receives, pending approval from 619 the Office of Film and Entertainment and not to exceed 35 620 percent of the production company’s qualified expendituresFor621fiscal year 2011-2012, $74.5 million. 6223. For fiscal years 2012-2013, 2013-2014, 2014-2015, and6232015-2016, $42 million per fiscal year.624 (b) Any portion of the maximum amount of tax credits 625 established per fiscal year in paragraph (a) whichthatis not 626 certified as of the end of a fiscal year mustshallbe carried 627 forward and made available for certification during the 628 following 2 fiscal years, in addition to the amounts available 629 for certification under paragraph (a) for those fiscal years. 630 Any allocations assigned to a county which are not encumbered by 631 March 1 of the year in which the allocations were assigned may 632 be available to all counties with priority based on a project 633 rating decided by the Office of Film and Entertainment. 634 (c) Upon approval of the final tax credit award amount 635 pursuant to subparagraph (3)(f)2., an amount equal to the 636 difference between the maximum tax credit award amount 637 previously certified under paragraph (3)(d) and the approved 638 final tax credit award amount shall immediately be available for 639 recertification during the current and following fiscal years in 640 addition to the amounts available for certification under 641 paragraph (a) for those fiscal years. 642 (d) If, during a fiscal year, the total amount of credits 643 applied for, pursuant to paragraph (3)(a), exceeds the amount of 644 credits available for certification in that fiscal year, such 645 excess shall be treated as having been applied for on the first 646 day of the next fiscal year in which credits remain available 647 for certification. 648 (8) RULES, POLICIES, AND PROCEDURES.— 649 (a) The department may adopt rules pursuant to ss. 650 120.536(1) and 120.54 and develop policies and procedures to 651 implement and administer this section, including, but not 652 limited to, rules specifying requirements for the application 653 and approval process, records required for substantiation for 654 tax credits, procedures for making the election in paragraph 655 (4)(d), the manner and form of documentation required to claim 656 tax credits awarded or transferred under this section, and 657 marketing requirements for tax credit recipients. 658 (b) The Department of Revenue may adopt rules pursuant to 659 ss. 120.536(1) and 120.54 to administer this section, including 660 rules governing the examination and audit procedures required to 661 administer this section and the manner and form of documentation 662 required to claim tax credits awarded, transferred, or 663 relinquished under this section. 664 (9) AUDIT AUTHORITY; REVOCATION AND FORFEITURE OF TAX 665 CREDITS; FRAUDULENT CLAIMS.— 666 (a) Audit authority.—The Department of Revenue may conduct 667 examinations and audits as provided in s. 213.34 to verify that 668 tax credits under this section are received, transferred, and 669 applied according to the requirements of this section. If the 670 Department of Revenue determines that tax credits are not 671 received, transferred, or applied as required by this section, 672 it may, in addition to the remedies provided in this subsection, 673 pursue recovery of such funds pursuant to the laws and rules 674 governing the assessment of taxes. 675 (b) Revocation of tax credits.—The department may revoke or 676 modify any written decision qualifying, certifying, or otherwise 677 granting eligibility for tax credits under this section if it is 678 discovered that the tax credit applicant submitted any false 679 statement, representation, or certification in any application, 680 record, report, plan, or other document filed in an attempt to 681 receive tax credits under this section. The department shall 682 immediately notify the Department of Revenue of any revoked or 683 modified orders affecting previously granted tax credits. 684 Additionally, the applicant must notify the Department of 685 Revenue of any change in its tax credit claimed. 686 (c) Forfeiture of tax credits.—A determination by the 687 Department of Revenue, as a result of an audit pursuant to 688 paragraph (a) or from information received from the Office of 689 Film and Entertainment, that an applicant received tax credits 690 pursuant to this section to which the applicant was not entitled 691 is grounds for forfeiture of previously claimed and received tax 692 credits. The applicant is responsible for returning forfeited 693 tax credits to the Department of Revenue, and such funds shall 694 be paid into the General Revenue Fund of the state. Tax credits 695 purchased in good faith are not subject to forfeiture unless the 696 transferee submitted fraudulent information in the purchase or 697 failed to meet the requirements in subsection (5). 698 (d) Fraudulent claims.—Any applicant that submits 699 fraudulent information under this section is liable for 700 reimbursement of the reasonable costs and fees associated with 701 the review, processing, investigation, and prosecution of the 702 fraudulent claim. An applicant that obtains a credit payment 703 under this section through a claim that is fraudulent is liable 704 for reimbursement of the credit amount plus a penalty in an 705 amount double the credit amount. The penalty is in addition to 706 any criminal penalty to which the applicant is liable for the 707 same acts. The applicant is also liable for costs and fees 708 incurred by the state in investigating and prosecuting the 709 fraudulent claim. 710 (10) ANNUAL REPORT.—Each November 1, the Office of Film and 711 Entertainment shall submit an annual report for the previous 712 fiscal year to the Governor, the President of the Senate, and 713 the Speaker of the House of Representatives which outlines the 714 incentive program’s return on investment and economic benefits 715 to the state. The report must also include an estimate of the 716 full-time equivalent positions created by each production that 717 received tax credits under this section and information relating 718 to the distribution of productions receiving credits by 719 geographic region and type of production. The report must also 720 include the expenditures report required under s. 288.1253(3) 721 and the information describing the relationship between tax 722 exemptions and incentives to industry growth required under s. 723 288.1258(5). 724 (11) REPEAL.—This section is repealed July 1, 20242016, 725 except that: 726 (a) Tax credits certified under paragraph (3)(d) before 727 July 1, 20242016, may be awarded under paragraph (3)(f) on or 728 after July 1, 20242016, if the other requirements of this 729 section are met. 730 (b) Tax credits carried forward under paragraph (4)(e) 731 remain valid for the period specified. 732 (c) Subsections (5), (8) and (9) shall remain in effect 733 until July 1, 20292021. 734 Section 2. This act shall take effect July 1, 2019.