Bill Text: FL S0316 | 2015 | Regular Session | Introduced
Bill Title: Economic Business Incentives
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2015-01-27 - Withdrawn prior to introduction [S0316 Detail]
Download: Florida-2015-S0316-Introduced.html
Florida Senate - 2015 SB 316 By Senator Hukill 8-00066-15 2015316__ 1 A bill to be entitled 2 An act relating to economic business incentives; 3 amending s. 212.08, F.S.; revising the sales tax 4 exemption for certain business purchases of industrial 5 machinery and equipment; deleting certain limitations 6 on the exemption; revising procedural requirements for 7 the exemption; deleting the sales tax exemption for 8 machinery and equipment used for certain federal 9 procurement contracts; conforming cross-references; 10 amending ss. 212.0602, 220.183, 288.0001, 290.0056, 11 290.007, 624.5105, and 1011.94, F.S.; conforming 12 cross-references; providing an effective date. 13 14 Be It Enacted by the Legislature of the State of Florida: 15 16 Section 1. Paragraphs (b), (d), and (h) of subsection (5) 17 of section 212.08, Florida Statutes, are amended, present 18 paragraphs (e) through (q) of that subsection are redesignated 19 as paragraphs (d) through (p), respectively, and paragraph (f) 20 of subsection (15) of that section is amended, to read: 21 212.08 Sales, rental, use, consumption, distribution, and 22 storage tax; specified exemptions.—The sale at retail, the 23 rental, the use, the consumption, the distribution, and the 24 storage to be used or consumed in this state of the following 25 are hereby specifically exempt from the tax imposed by this 26 chapter. 27 (5) EXEMPTIONS; ACCOUNT OF USE.— 28 (b) Machinery and equipment used by manufacturersto29increase productive output.— 30 1. Industrial machinery and equipment purchased for 31exclusiveuse in this state by anewbusinessin spaceport32activities as defined by s. 212.02 or for use in newbusinesses33 that manufactures, processes, compounds, or produces 34manufacture, process, compound, or produce for saleitems of 35 tangible personal property for sale at fixed locations isare36 exempt from the tax imposed by this chapter if, at the time of 37 the purchase, the purchaser furnishes the seller with a signed 38 certificate stating that the items to be exempted are for 39 exclusive use as provided in this paragraph. The certificate 40 relieves the seller of the responsibility of collecting the tax 41 on the sale of such items, and the department shall look solely 42 to the purchaser for recovery of the tax if it determines that 43 the purchaser was not entitled to the exemptionupon an44affirmative showing by the taxpayer to the satisfaction of the45department that such items are used in a new business in this46state.Such purchases must be made before the date the business47first begins its productive operations, and delivery of the48purchased item must be made within 12 months after that date.492. Industrial machinery and equipment purchased for50exclusive use by an expanding facility which is engaged in51spaceport activities as defined by s. 212.02 or for use in52expanding manufacturing facilities or plant units which53manufacture, process, compound, or produce for sale items of54tangible personal property at fixed locations in this state are55exempt from any amount of tax imposed by this chapter upon an56affirmative showing by the taxpayer to the satisfaction of the57department that such items are used to increase the productive58output of such expanded facility or business by not less than 559percent.603.a. To receive an exemption provided by subparagraph 1. or61subparagraph 2., a qualifying business entity shall apply to the62department for a temporary tax exemption permit. The application63shall state that a new business exemption or expanded business64exemption is being sought. Upon a tentative affirmative65determination by the department pursuant to subparagraph 1. or66subparagraph 2., the department shall issue such permit.67b. The applicant shall maintain all necessary books and68records to support the exemption. Upon completion of purchases69of qualified machinery and equipment pursuant to subparagraph 1.70or subparagraph 2., the temporary tax permit shall be delivered71to the department or returned to the department by certified or72registered mail.73c. If, in a subsequent audit conducted by the department,74it is determined that the machinery and equipment purchased as75exempt under subparagraph 1. or subparagraph 2. did not meet the76criteria mandated by this paragraph or if commencement of77production did not occur, the amount of taxes exempted at the78time of purchase shall immediately be due and payable to the79department by the business entity, together with the appropriate80interest and penalty, computed from the date of purchase, in the81manner prescribed by this chapter.82d. If a qualifying business entity fails to apply for a83temporary exemption permit or if the tentative determination by84the department required to obtain a temporary exemption permit85is negative, a qualifying business entity shall receive the86exemption provided in subparagraph 1. or subparagraph 2. through87a refund of previously paid taxes. No refund may be made for88such taxes unless the criteria mandated by subparagraph 1. or89subparagraph 2. have been met and commencement of production has90occurred.914. The department shall adopt rules governing applications92for, issuance of, and the form of temporary tax exemption93permits; provisions for recapture of taxes; and the manner and94form of refund applications, and may establish guidelines as to95the requisites for an affirmative showing of increased96productive output, commencement of production, and qualification97for exemption.98 2.5.The exemption doesexemptions provided in99subparagraphs 1. and 2. donot apply to industrial machinery or 100 equipment purchased or used by an electric utility company 101companies, a communications companycompanies, an oil or gas 102 exploration or production operationoperations, a publishing 103 firmfirmsthat doesdonot export at least 50 percent of its 104theirfinished product out of the state, aanyfirm subject to 105 regulation by the Division of Hotels and Restaurants of the 106 Department of Business and Professional Regulation, or aany107 firm that does not manufacture, process, compound, or produce 108 for sale items of tangible personal propertyor that does not109use such machinery and equipment in spaceport activities as110required by this paragraph. The exemption appliesexemptions111provided in subparagraphs 1. and 2. shall applyto industrial 112 machinery and equipment purchased for use in phosphate or other 113 solid minerals severance, mining, or processing operations. 114 3.6.For the purposes of the exemption, the termexemptions115provided in subparagraphs 1. and 2., these terms have the116following meanings:117a.“industrial machinery and equipment” means tangible 118 personal property or other property that has a depreciable life 119 of 3 years or more andthatis used as an integral part in the 120 manufacturing, processing, compounding, or production of 121 tangible personal property for saleor is exclusively used in122spaceport activities. A building and its structural components 123 are not industrial machinery and equipment unless the building 124 or structural component is so closely related to the industrial 125 machinery and equipment whichthatit houses or supports that 126 the building or structural component can be expected to be 127 replaced when the machinery and equipment are replaced. Heating 128 and air-conditioning systems are not industrial machinery and 129 equipment unless the sole justification for their installation 130 is to meet the requirements of the production process, even 131 though the system may provide incidental comfort to employees or 132 serve, to an insubstantial degree, nonproduction activities. The 133 term includes parts and accessories for industrial machinery and 134 equipmentonly to the extent that the exemption thereof is135consistent with the provisions of this paragraph. 136b. “Productive output” means the number of units actually137produced by a single plant, operation, or product line in a138single continuous 12-month period, irrespective of sales.139Increases in productive output shall be measured by the output140for 12 continuous months selected by the expanding business141after completion of the installation of such machinery or142equipment over the output for the 12 continuous months143immediately preceding such installation. However, in no case may144such time period begin later than 2 years after completion of145the installation of the new machinery and equipment. The units146used to measure productive output shall be physically comparable147between the two periods, irrespective of sales.148(d)Machinery and equipment used under federal procurement149contract.—1501. Industrial machinery and equipment purchased by an151expanding business which manufactures tangible personal property152pursuant to federal procurement regulations at fixed locations153in this state are exempt from the tax imposed in this chapter154upon an affirmative showing by the taxpayer to the satisfaction155of the department that such items are used to increase the156implicit productive output of the expanded business by not less157than 10 percent. The percentage of increase is measured as158deflated implicit productive output for the calendar year during159which the installation of the machinery or equipment is160completed or during which commencement of production utilizing161such items is begun divided by the implicit productive output162for the preceding calendar year. In no case may the commencement163of production begin later than 2 years following completion of164installation of the machinery or equipment.1652. The amount of the exemption allowed shall equal the166taxes otherwise imposed by this chapter on qualifying industrial167machinery or equipment reduced by the percentage of gross168receipts from cost-reimbursement type contracts attributable to169the plant or operation to total gross receipts so attributable,170accrued for the year of completion or commencement.1713. The exemption provided by this paragraph shall inure to172the taxpayer only through refund of previously paid taxes. Such173refund shall be made within 30 days of formal approval by the174department of the taxpayer’s application, which application may175be made on an annual basis following installation of the176machinery or equipment.1774. For the purposes of this paragraph, the term:178a. “Cost-reimbursement type contracts” has the same meaning179as in 32 C.F.R. s. 3-405.180b. “Deflated implicit productive output” means the product181of implicit productive output times the quotient of the national182defense implicit price deflator for the preceding calendar year183divided by the deflator for the year of completion or184commencement.185c. “Eligible costs” means the total direct and indirect186costs, as defined in 32 C.F.R. ss. 15-202 and 15-203, excluding187general and administrative costs, selling expenses, and profit,188defined by the uniform cost-accounting standards adopted by the189Cost-Accounting Standards Board created pursuant to 50 U.S.C. s.1902168.191d. “Implicit productive output” means the annual eligible192costs attributable to all contracts or subcontracts subject to193federal procurement regulations of the single plant or operation194at which the machinery or equipment is used.195e. “Industrial machinery and equipment” means tangible196personal property or other property that has a depreciable life197of 3 years or more, that qualifies as an eligible cost under198federal procurement regulations, and that is used as an integral199part of the process of production of tangible personal property.200A building and its structural components are not industrial201machinery and equipment unless the building or structural202component is so closely related to the industrial machinery and203equipment that it houses or supports that the building or204structural component can be expected to be replaced when the205machinery and equipment are replaced. Heating and air206conditioning systems are not industrial machinery and equipment207unless the sole justification for their installation is to meet208the requirements of the production process, even though the209system may provide incidental comfort to employees or serve, to210an insubstantial degree, nonproduction activities. The term211includes parts and accessories only to the extent that the212exemption of such parts and accessories is consistent with the213provisions of this paragraph.214f. “National defense implicit price deflator” means the215national defense implicit price deflator for the gross national216product as determined by the Bureau of Economic Analysis of the217United States Department of Commerce.2185. The exclusions provided in subparagraph (b)5. apply to219this exemption. This exemption applies only to machinery or220equipment purchased pursuant to production contracts with the221United States Department of Defense and Armed Forces, the222National Aeronautics and Space Administration, and other federal223agencies for which the contracts are classified for national224security reasons. In no event shall the provisions of this225paragraph apply to any expanding business the increase in226productive output of which could be measured under the227provisions of sub-subparagraph (b)6.b. as physically comparable228between the two periods.229 (g)(h)Business property used in an enterprise zone.— 230 1. Business property purchased for use by a business 231businesseslocated in an enterprise zone which is subsequently 232 used in an enterprise zone isshall beexempt from the tax 233 imposed by this chapter. This exemption inures to the business 234 only through a refund of previously paid taxes. A refund shall 235 be authorized upon an affirmative showing by the taxpayer, to 236 the satisfaction of the department, that the requirements of 237 this paragraph have been met. 238 2. To receive a refund, the business must fileunder oath239 with the governing body or enterprise zone development agency 240 that hashavingjurisdiction over the enterprise zone where the 241 business is located, as applicable, an application, under oath, 242 which includes: 243 a. The name and address of the business claiming the 244 refund. 245 b. The identifying number assigned pursuant to s. 290.0065 246 to the enterprise zone in which the business is located. 247 c. A specific description of the property for which a 248 refund is sought, including its serial number or other permanent 249 identification number. 250 d. The location of the property. 251 e. The sales invoice or other proof of purchase of the 252 property, showing the amount of sales tax paid, the date of 253 purchase, and the name and address of the sales tax dealer from 254 whom the property was purchased. 255 f. Whether the business is a small business as defined by 256 s. 288.703. 257 g. If applicable, the name and address of each permanent 258 employee of the business, including, for each employee who is a 259 resident of an enterprise zone, the identifying number assigned 260 pursuant to s. 290.0065 to the enterprise zone in which the 261 employee resides. 262 3. Within 10 working days after receipt of an application, 263 the governing body or enterprise zone development agency shall 264 review the application to determine if it containsallthe 265 information required underpursuant tosubparagraph 2. and meets 266 the criteria specifiedset outin this paragraph. The governing 267 body or agency shall certify all applications that contain the 268 information required underpursuant tosubparagraph 2. and meet 269 the criteria specifiedset outin this paragraph as eligible to 270 receive a refund. If applicable, the governing body or agency 271 shall also certify if 20 percent of the employees of the 272 business are residents of an enterprise zone, excluding 273 temporary and part-time employees. The certification mustshall274 be in writing, and a copy of the certification mustshallbe 275 transmitted to the executive director of the departmentof276Revenue. The business isshall beresponsible for forwarding a 277 certified application to the department within the time 278 specified in subparagraph 4. 279 4. An application for a refund pursuant to this paragraph 280 must be submitted to the department within 6 months after the 281 tax is due on the business property that is purchased. 282 5. The amount refunded on purchases of business property 283 under this paragraph mustshallbe the lesser of 97 percent of 284 the sales tax paid on such business property or $5,000, or, if 285no less than20 percent or more of the employees of the business 286 are residents of an enterprise zone, excluding temporary and 287 part-time employees, the amount mustrefunded on purchases of288business property under this paragraphshallbe the lesser of 97 289 percent of the sales tax paid on such business property or 290 $10,000. A refund mustapproved pursuant to this paragraph shall291 be made within 30 days after formal approval by the department 292 of the application for the refund. A refund may not be granted 293under this paragraphunless the amount to be refunded exceeds 294 $100 in sales tax paid on purchases made within a 60-day time 295 period. 296 6. The department shall adopt rules governing the manner 297 and form of refund applications and may establish guidelines as 298 to the requisites for an affirmative showing of qualification 299 for exemption under this paragraph. 300 7. If the department determines that the business property 301 is used outside an enterprise zone within 3 years afterfromthe 302 date of purchase, the amount of taxes refunded to the business 303 purchasing such business property isshallimmediatelybedue 304 and payable to the department by the business, together with the 305 appropriate interest and penalty, computed from the date of 306 purchase, in the manner provided by this chapter. 307 Notwithstanding this subparagraph, business property used 308 exclusively in: 309 a. Licensed commercial fishing vessels, 310 b. Fishing guide boats, or 311 c. Ecotourism guide boats 312 313 that leave and return to a fixed location within an area 314 designated under s. 379.2353, Florida Statutes 2010, are 315 eligible for the exemptionprovided under this paragraphif the 316allrequirements of this paragraph are met. TheSuchvessels and 317 boats must be owned by a business that is eligible to receive 318 the exemptionprovided under this paragraph. This exemption does 319 not apply to the purchase of a vessel or boat. 320 8. The department shall deduct an amount equal to 10 321 percent of each refund granted under this paragraph from the 322 amount transferred into the Local Government Half-cent Sales Tax 323 Clearing Trust Fund pursuant to s. 212.20 for the county area in 324 which the business property is located and shall transfer that 325 amount to the General Revenue Fund. 326 9. For the purposes of this exemption, the term “business 327 property” means new or used property defined as “recovery 328 property” in s. 168(c) of the Internal Revenue Code of 1954, as 329 amended, except: 330 a. Property classified as 3-year property under s. 331 168(c)(2)(A) of the Internal Revenue Code of 1954, as amended; 332 b. Industrial machinery and equipment as defined in 333 subparagraph (b)3.sub-subparagraph (b)6.a.and eligible for 334 exemption under paragraph (b); 335 c. Building materials as defined in sub-subparagraph 336 (f)8.a.(g)8.a.; and 337 d. Business property having a sales price of under $5,000 338 per unit. 339 10. This paragraph expires on the date specified in s. 340 290.016 for the expiration of the Florida Enterprise Zone Act. 341 (15) ELECTRICAL ENERGY USED IN AN ENTERPRISE ZONE.— 342 (f) For the purpose of the exemptionprovidedin this 343 subsection, the term “qualified business” means a business that 344whichis: 345 1. First occupying a new structure to which electrical 346 service, other than that used for construction purposes, has not 347 been previously providedor furnished; 348 2. Newly occupying an existing, remodeled, renovated, or 349 rehabilitated structure to which electrical service, other than 350 that used for remodeling, renovation, or rehabilitation of the 351 structure, has not been providedor furnishedin the three 352 preceding billing periods; or 353 3. Occupying a new, remodeled, rebuilt, renovated, or 354 rehabilitated structure for which a refund has been granted 355 pursuant to paragraph (5)(f)(5)(g). 356 Section 2. Section 212.0602, Florida Statutes, is amended 357 to read: 358 212.0602 Education; limited exemption.—To facilitate 359 investment in education and job training,there is also exempt360from the taxes levied under this chapter, subject to the361provisions of this section,the purchase or lease of materials, 362 equipment, and other items or the license in or lease of real 363 property by ananyentity, institution, or organization that is 364 primarily engaged in teaching students to perform any of the 365 activities or services described in s. 212.031(1)(a)9., that 366 conducts classes at a fixed location located in this state, that 367 is licensed under chapter 1005, and that has at least 500 368 enrolled students is exempt from the taxes levied under this 369 chapter. AnAnyentity, institution, or organization meeting the 370 requirements of this section shall be deemed to qualify for the 371 exemptions underinss. 212.031(1)(a)9. and 212.08(5)(e) 372212.08(5)(f)and (12), and to qualify for an exemption for its 373 purchase or lease of materials, equipment, and other items used 374 for education or demonstration of the school’s curriculum, 375 including supporting operations.Nothing inThis section does 376 notshallpreclude an entity described in this section from 377 qualifying for any other exemption provided underforinthis 378 chapter. 379 Section 3. Paragraph (c) of subsection (1) of section 380 220.183, Florida Statutes, is amended to read: 381 220.183 Community contribution tax credit.— 382 (1) AUTHORIZATION TO GRANT COMMUNITY CONTRIBUTION TAX 383 CREDITS; LIMITATIONS ON INDIVIDUAL CREDITS AND PROGRAM 384 SPENDING.— 385 (c) The total amount of tax credit which may be granted for 386 all programs approved under this section, s. 212.08(5)(o)s.387212.08(5)(p), and s. 624.5105 is $18.4 million annually for 388 projects that provide homeownership opportunities for low-income 389 households or very-low-income households as those terms are 390 defined in s. 420.9071 and $3.5 million annually for all other 391 projects. 392 Section 4. Paragraph (c) of subsection (2) of section 393 288.0001, Florida Statutes, is amended to read: 394 288.0001 Economic Development Programs Evaluation.—The 395 Office of Economic and Demographic Research and the Office of 396 Program Policy Analysis and Government Accountability (OPPAGA) 397 shall develop and present to the Governor, the President of the 398 Senate, the Speaker of the House of Representatives, and the 399 chairs of the legislative appropriations committees the Economic 400 Development Programs Evaluation. 401 (2) The Office of Economic and Demographic Research and 402 OPPAGA shall provide a detailed analysis of economic development 403 programs as provided in the following schedule: 404 (c) By January 1, 2016, and every 3 years thereafter, an 405 analysis of the following: 406 1. The qualified defense contractor and space flight 407 business tax refund program established under s. 288.1045. 408 2. The tax exemption for semiconductor, defense, or space 409 technology sales established under s. 212.08(5)(i)s.410212.08(5)(j). 411 3. The Military Base Protection Program established under 412 s. 288.980. 413 4. The Manufacturing and Spaceport Investment Incentive 414 Program formerly established under s. 288.1083. 415 5. The Quick Response Training Program established under s. 416 288.047. 417 6. The Incumbent Worker Training Program established under 418 s. 445.003. 419 7. International trade and business development programs 420 established or funded under s. 288.826. 421 Section 5. Paragraph (a) of subsection (9) of section 422 290.0056, Florida Statutes, is amended to read: 423 290.0056 Enterprise zone development agency.— 424 (9) The following powers and responsibilities shall be 425 performed by the governing body creating the enterprise zone 426 development agency acting as the managing agent of the 427 enterprise zone development agency, or, contingent upon approval 428 by such governing body, such powers and responsibilities shall 429 be performed by the enterprise zone development agency: 430 (a) To review, process, and certify applications for state 431 enterprise zone tax incentives pursuant to ss. 212.08(5)(f) and 432 (g)ss.212.08(5)(g), (h),and (15); 212.096; 220.181; and 433 220.182. 434 Section 6. Subsections (4) and (5) of section 290.007, 435 Florida Statutes, are amended to read: 436 290.007 State incentives available in enterprise zones.—The 437 following incentives are provided by the state to encourage the 438 revitalization of enterprise zones: 439 (4) The sales tax exemption for building materials used in 440 the rehabilitation of real property in enterprise zones provided 441 in s. 212.08(5)(f)s.212.08(5)(g). 442 (5) The sales tax exemption for business equipment used in 443 an enterprise zone provided in s. 212.08(5)(g)s.212.08(5)(h). 444 Section 7. Paragraph (c) of subsection (1) of section 445 624.5105, Florida Statutes, is amended to read: 446 624.5105 Community contribution tax credit; authorization; 447 limitations; eligibility and application requirements; 448 administration; definitions; expiration.— 449 (1) AUTHORIZATION TO GRANT TAX CREDITS; LIMITATIONS.— 450 (c) The total amount of tax credit which may be granted for 451 all programs approved under this section and ss. 212.08(5)(o) 452ss.212.08(5)(p)and 220.183 is $18.4 million annually for 453 projects that provide homeownership opportunities for low-income 454 households or very-low-income households as those terms are 455 defined in s. 420.9071 and $3.5 million annually for all other 456 projects. 457 Section 8. Subsection (1) of section 1011.94, Florida 458 Statutes, is amended to read: 459 1011.94 University Major Gifts Program.— 460 (1) TheThere is established aUniversity Major Gifts 461 Program is established. The purpose of the program is to enable 462 each university to provide donors with an incentive in the form 463 of matching grants for donations for the establishment of 464 permanent endowments and sales tax exemption matching funds 465 received pursuant to s. 212.08(5)(i)s.212.08(5)(j), which must 466 be invested, with the proceeds of the investment used to support 467 libraries and instruction and research programs,as defined by 468 the Board of Governors. 469 Section 9. This act shall take effect January 1, 2016.