FEDC Inside Track For Legislative Affairs: Week Seven–Florida Legislative Budget Conferences Imminent
Apr 13, 2010
Photo: State Representative Ellyn Bogdanoff (above) is the lead Florida House of Representatives negotiator on Senate Bill 1752, the large economic development package passed unanimously by the Senate on March 25. Bill sponsor Senator Don Gaetz represents the Senate on this issue.
The Senate Committees on Transportation and Economic Development Appropriations and Finance and Tax considered economic development-related legislation as Week Seven of the 2010 Florida Legislative Session gained momentum.
Meanwhile, although the House and Senate have passed their respective budgets, Appropriations Chairs are still awaiting their allocations from legislative leadership in order to begin the budget conference process. Conference committees were expected to begin during the latter portion of this week, but now likely will not commence until next week.
Details of Senate Bill 1752, the large economic development package passed unanimously by the Senate on March 25, 2010 are still being discussed between lead negotiators Senator Don Gaetz (the bill sponsor) and State Representative Ellyn Bogdanoff. A final version of the bill is expected to materialize during the conference process.
Other pending economic development legislation includes:
CS/HB 451 – Relating to Space Florida by the House Committee on Economic Development Policy and State Representative Steve Crisafulli
HB 451 would terminate the existing Space Florida Board of Directors 90 days after the law takes effect. In addition to reducing the number of ex officio voting members on the Board from 5 to 4, the bill would require the Lieutenant Governor to serve as the Governor’s designee. It also would remove the Commissioner of Education from the Board. Under the provisions of HB 451, designees of ex officio members are given the authority to vote. Further, the bill reduces the number of Board members appointed by the Governor from 12 to 9, along with other composition changes to the Board. HB 451 would require all voting Board members to be Florida residents or have a business enterprise in the State, but would not alter the powers and duties of the Board, nor would it impact the scope of Space Florida’s rulemaking authority.
HB 451 remains on the House Special Order calendar, where it awaits second reading.
- To view House Finance and Tax Council analysis of HB 451, click here.
CS/CS/1st Eng/HB 697 – Relating to Entertainment Industry Economic Development by the House Finance and Tax Council, Economic Development Policy Committee and State Representative Stephen Precourt
HB 697 creates the Entertainment Industry Financial Incentive Program, which would award transferrable tax credits for certain expenditures associated with qualified productions. Generally, the credits are 20 percent of qualified expenditures, with additional amounts available in certain circumstances. HB 697 bill provides that qualified production companies may apply for tax credit awards based upon specified amounts of qualified expenditures that meet or exceed minimum requirements. Qualified expenditures are production expenditures are purchased or leased goods or services that are provided by a Florida vendor or supplier that is registered with the Florida Department of State or the Department of Revenue. A wide range of production types can qualify. Examples include motion pictures, televisions series, television pilots and digital media projects.
HB 697 provides accountability through procedures to audit and verify the spending upon which the credits are based. Credits awarded may be used to offset corporate income tax or sales and use tax liabilities. Unused tax credits may be transferred or carried forward under certain circumstances. However, no credits may be claimed against tax liabilities for tax periods beginning prior to July 1, 2011. The program expires July 1, 2015, except for tax credit carry forward provisions.
After unanimous passage by the House on April 6, the bill remains in Senate Messages at this time.
- To view the March 29, 2010 House Finance and Tax Council analysis, click here.
CS/CS/1st Eng. HB 983 – Relating to the Florida Research Commercialization Matching Grant by the House Finance and Tax Council, Economic Development Policy Committee and State Representative Matt Hudson
Effective July 1, 2010, CS/CS/1st Eng. HB 983 would create the Florida Research Commercialization Matching Grant Program to assist small or startup companies that take advantage of federal and state partnerships to accelerate their growth and market penetration. A business eligible for this program must be registered with the Florida Department of State, have its primary office in Florida, as well as the majority of its employees. Any related principal research by the company must also be conducted in Florida. An eligible business also must have already received a Phase I federal research grant and been invited to apply for a Phase II federal research grant.
CS/CS/1st Eng. HB 983 bill directs the Florida Institute for the Commercialization of Public Research (“Institute”) to serve as the program administrator and contract manager for recipients of these matching grants. Under the provisions of the bill, the Institute will establish program policies, coordinate grant reviews and provide final awards to qualified applicants. The Institute is directed to grant an award to a qualified applicant if the applicant has obtained a Phase II award under the federal Small Business Innovation Research Program or Small Business Technology Transfer Program and executes a performance contract with the Institute.
The Institute is also directed to provide an annual report to Florida’s Governor and legislative leadership on the program’s progress.
CS/CS/1st Eng. HB 983 provides for the program to make one-time awards of up to $250,000 per project to a qualified applicant, subject to legislative appropriation. A minimum of 75 percent of a project’s total funding must be from sources other than the state grant. Administrative costs for the program are limited to no more than five percent of legislative appropriations for the program. The bill provides a $4 million non-recurring General Revenue Fund appropriation to the Institute for the Implementation of the Florida Research Commercialization Matching Grant Program.
After unanimous passage in the House on April 6, CS/CS/1st Eng. HB 983 remains in Senate Messages.
- To view a March 29, 2010 House Finance and Tax Council analysis, click here.
CS/SB 1430 relating to Entertainment Industry Economic Development by the Committee on Commerce and Senator Mike Haridopolos
On today’s Finance and Tax Committee agenda and similar to CS/CS/1st Eng. HB 697, CS/SB 1430 replaces Florida’s existing film and entertainment incentive with a transferrable credit against sales and corporate income taxes for qualified expenditures. This tax credit is estimated to be $75 million annually from Fiscal Year 2010-’11 to Fiscal Year 2014-’15. Credits cannot be claimed against tax liability until after July 1, 2011.
As amended by the Committee on Commerce, CS/SB 1430 would rename and reorganize the categories of film and entertainment productions, while raising the amount of qualified expenditures on which the tax credit amounts will be based for all types of productions to 20 percent. Currently, the incentive for general productions is based on 15 percent of qualified expenditures. For commercials and independent programs, the basis is 10 percent.
CS/SB 1430 is on the Senate Committee on Finance and Tax agenda for today. It must still proceed through the Senate Committees on Transportation and Economic Development Appropriations; Policy and Steering and Ways and Means.
- To view a March 26, 2010 Senate Committee on Commerce analysis, click here.
CS/CS/SB 1856 relating to the Qualified Target Industry Tax Refund Program by the Senate Committees on Finance and Tax; Commerce
Florida’s Qualified Target Industry (“QTI”) Incentive Tax Refund Program, which sunsets on June 30, 2010 due to lack of resources, was created in 1994 as part of a retooling of Florida’s economic development efforts. The QTI program was designed to encourage the recruitment or creation of higher-paying, higher-skilled jobs for Floridians by awarding eligible businesses refunds of certain state or local taxes paid in exchange for creating jobs. While the amount of the refund is based on the wages paid, number of jobs created and where in the State the eligible business chooses to locate or expand, the minimum refund is $3,000 per employee over the term of the incentive agreement signed by the business and the Governor’s Office of Tourism, Trade and Economic Development (“OTTED”).
CS/SB 1856, which would be effective on July 1, 2010, would make a number of changes to the QTI program, including:
- Extending the QTI program until June 30, 2020;
- Directing OTTED to begin a post-award evaluation of QTI projects;
- Directing OTTED and Enterprise Florida to review and revise the Targeted Industry List, with assistance from academics and stakeholders every three years;
- Codifying Enterprise Florida Inc.’s practice of calculating a return on investment (“ROI”) for QTI projects and creating a definition of “ROI;”
- Requiring the Legislature’s Office of Economic and Demographic Research to review and evaluate the methodology and model used by EFI to calculate the ROI and report its findings to the Legislature; and
- Exempting renewable-energy economic development projects from the requirement that qualified target industries must be independent of Florida resources and markets.
CS/SB 1856 is on today’s Transportation and Economic Development Appropriations agenda.
- To view the Senate Committee on Transportation and Economic Development’s April 12, 2010 analysis, click here.
Should you have any questions or comments, please contact Tracy Mayernick (tmayernick@cftlaw.com) at Colodny Fass.
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