These Rules will administer section 220.194, Florida Statutes. The Department of Economic Opportunity is mandated to adopt rules in order to instruct spaceflight businesses on how to comply with this section of Florida Statutes. The Rules provide ...

 

DEPARTMENT OF ECONOMIC OPPORTUNITY

Division of Strategic Business Development

RULE NOS.:RULE TITLES:

73A-5.001Applicability and Limitations

73A-5.002Definitions

73A-5.003Tables

73A-5.004Application Process for Approval to Earn Tax Credits or to Create Transferable Tax Credits

73A-5.005Early Review of an Application for Approval

73A-5.006Application Process for Certification to Take or Transfer Tax Credits

73A-5.007Revocation or Modification of Certification to Take or Transfer Tax Credits

73A-5.008Forms

PURPOSE AND EFFECT: These Rules will administer Section 220.194, Florida Statutes. The Department of Economic Opportunity is mandated to adopt rules in order to instruct spaceflight businesses on how to comply with this section of Florida Statutes. The Rules provide guidance to spaceflight businesses by providing timelines, applications, and definitions needed to implement the Florida Space Business Incentives Act.

SUMMARY: These Rules address how space flight businesses can qualify and apply for tax incentives for their business activities that will attract launch, payload, research, and development, as well as other space business, to the State of Florida. These Rules provide the form and applications needed for space flight businesses to apply, receive, and/or transfer tax credits. These Rules clarify deadlines for application submittal.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: The Agency has performed a review of the statutory requirements and has determined that its proposed rules 73A-5 have no adverse impact or regulatory costs which exceed any of the criteria established in Section 120.541(2)(a), Florida Statutes. The rules are therefore expected be able to take effect without the need of being ratified by the Legislature.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 220.194(8) FS.

LAW IMPLEMENTED: 220.194 FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAR.

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Katherine Morrison, Division of Strategic Business Development, Department of Economic Opportunity, 107 E. Madison Street, Mail Station 80, Caldwell Building, Tallahassee, Florida 32399, [phone]

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

73A-5.001 Applicability and Limitations.

(1) This chapter applies to an Applicant as defined in Rule 73A-5.002, F.A.C. An Applicant shall submit an Application for Approval using Form DEO/SBD194(1), or an Application for Certification using Form DEO/SBD 194(2), using the parameters established in Table 1 and Table 2, of Rule 73A-5.003, F.A.C., and must be an eligible “Taxpayer” as defined in section 220.03, Florida Statutes.  Copies of these Forms are available from the Department of Economic Opportunity (DEO) at 107 E. Madison Street, Mail Station 80, Caldwell Building, Tallahassee, Florida 32399, or on DEO’s website:  http://www.floridajobs.org.

(2) An Applicant shall not submit an Application for Approval to Earn Nontransferable Corporate Income Tax Credits and an Application for Approval to Create Transferable Net Operating Loss Tax Credits in the same State Fiscal Year.  The deadlines established for submittal of an Application for Approval are shown in Table 1 of Rule 73A-5.003, F.A.C.

(3)  An Applicant shall not submit an Application for Certification of a Nontransferable Corporate Income Tax Credit and an Application for Certification of a Transferable Net Operating Loss Tax Credit in the same State Fiscal Year.  The deadlines established for submittal of an Application for Certification are shown in Table 1 of Rule 73A-5.003, F.A.C.

(4) Only one category of Application for Approval may be submitted in a single State Fiscal Year, and only one category of Application for Certification shall be approved in a single State Fiscal Year. Incomplete applications do not secure a place in the first-come, first-served application line.  Therefore, the application deadlines established in Table 1 of Rule 73A-5.003, F.A.C., are intended to allow sufficient time for application deficiencies to be corrected.

(5) The maximum Nontransferable Tax Credit amount that shall be approved by DEO, the maximum Nontransferable Corporate Income Tax Credit that shall be certified by DEO, and the minimum amount of Spaceflight Project Job Creation and non-state funded investment amounts which may be included in an application, are shown in Table 2 of Rule 73A-5.003, F.A.C.  No Applications to Earn Nontransferable Corporate Income Tax Credits shall be approved after October 1, 2017; therefore no such Applications shall be accepted by DEO after July 31, 2017.

(6) The maximum Transferable Net Operating Loss Tax Credit that shall be approved by DEO, the maximum Transferable Net Operating Loss Tax Credit that shall be certified by DEO, and the minimum amount of Spaceflight Project Job Creation and non-state funded investment amounts which may be included in an application are shown in Table 2 of Rule 73A-5.003, F.A.C.  No Applications to Create Nontransferable Corporate Income Tax Credits shall be approved after October 1, 2017; therefore no such Applications shall be accepted by DEO after July 31, 2017.

(7) An Applicant’s Application for Certification must include the documented creation of 35 “new jobs.”  The period for the creation of these new jobs does not begin until after an Application for Approval is approved by DEO.  Once the 35 new jobs have been created, the new employees must be paid at least 115% of the statewide or countywide average annual private sector wage for 3 years, as described in section 220.194, Florida Statutes, before the Applicant is eligible to submit the relevant Application for Certification.

(8) Each application will be completely evaluated and no Applicant will receive approval or certification until DEO is able to verify the requirements set forth in Sections 220.194(4), (5) and (6), Florida Statutes. Applicants must provide assistance to DEO when verification is necessary.  DEO may use, but is not limited to, the following methods of verification of the information submitted:

(a) Request more detailed information or explanation from the Applicant in writing; and/or

(b) Examine the methods of the calculations used in the application process; and/or

(c) Meet with and/or discuss concerns with the Applicant or its designated authority.

(9) An Applicant seeking a tax credit pursuant to Section 220.194, Florida Statutes, shall use Form DEO/SBD 194(1) or Form DEO/SBD194(2), adopted pursuant to this Chapter and incorporated herein by reference, for the Tax Credit Applications defined in Table 1 of Rule 73A-5.003, F.A.C.  Applicants shall submit their applications to Space Florida at 505 Odyssey Way, Suite 300, Exploration Park, Florida 32953, for preliminary review at least 30 days prior to the submittal deadlines identified in Table 1 of Rule 73A-5.003, F.A.C.  Upon receipt of an Application for Approval or Certification, as provided in the Act and by this Chapter, Space Florida will assist DEO and the Applicant by completely evaluating such application and either providing the Applicant with a written favorable recommendation or a written explanation of the application’s deficiencies within 60 days of receiving the relevant application. The Applicant shall only submit applications to DEO that include a positive recommendation from Space Florida.

(10) An application for Approval or for Certification will not be considered by DEO unless it includes a written and positive recommendation from Space Florida. The Applicant must submit its application to DEO using the application processes adopted pursuant to this Chapter.

(11) Applicants must file their annual report on the spaceflight project’s progress with the Department of Economic Opportunity by October 1 of the relevant year.

(12) DOR will not disburse any funds in connection with the Nontransferable Corporate Income Tax Credit or with the Transferable Net Operating Loss Tax Credit programs, regardless if the total credits certified exceed the amount of tax owed.

Rulemaking Authority 220.194(8) FS. Law Implemented 220.194(4) FS. History–New_________.

 

73A-5.002 Definitions.

This Rule defines terms and phrases used throughout Chapter 73A-5, F.A.C. In this Chapter, terms and phrases shall have the meanings defined by Section 220.194, Florida Statutes, or by this Rule. Terms and phrases not defined by statute or rule shall be construed according to their plain meaning, and in all cases with the objective of advancing the purpose of the rule in which they appear.

(1) “Act” means Section 15 of Chapter 2011-76, Laws of Florida, codified at Section 220.194, Florida Statutes.

(2) “Applicant” means a Spaceflight Business registered with the Department of State and engaged in (a) spaceflight project(s), that has submitted an Application for Approval and/or an Application for Certification to the Department of Economic Opportunity.

(3)  “Application for Approval” means Form DEO/SBD194(1), Florida Space Business Incentive Act: Application for Approval.

(4) “Application for Certification” means Form DEO/SBD194(2), Florida Space Business Incentive Act: Application for Certification.

(5) “Certification Letter” means the “Spaceflight Business Incentive Program Certification Decision Letter,” signed by the Department of Economic Opportunity and provided to the Certified Applicant.

(6) “DOR” means the Florida Department of Revenue, whose email address is: [e-mail].

(7) “DEO” or “Department of Economic Opportunity” means the Florida Department of Economic Opportunity, whose address is 107 East Madison Street, Caldwell Building, Tallahassee, Florida 32399.

(8) “Job Creation” means at least 35 new, direct, full-time jobs, located in this state, that have been created as a result of the Applicant’s eligible spaceflight project activities.

(9) “Letter of Approval” means the letter issued by the Department of Economic Opportunity to an Applicant approving an Application for Approval within 60 days after the receipt of the completed application.

(10) “Letter of Certification” means the letter issued by the Department of Economic Opportunity to an Applicant approving their Application for Certification within 90 days after the receipt of the completed application. The Department of Economic Opportunity shall include in the Letter of Certification any restrictions imposed. A copy of the Letter of Certification shall be submitted to the Department of Revenue within 10 days of being issued.

(11) “Notice of Intent to Deny an Application for Approval” means the notice issued by the Department of Economic Opportunity to an Applicant denying their Application for Approval.  Such Notice of Intent to Deny an Application for Approval shall inform the Applicant of the grounds for the denial.

(12) “Notice of Intent to Deny an Application for Certification” means the notice issued by the Department of Economic Opportunity to an Applicant denying their Application for Certification.  Such Notice of Intent to Deny an Application for Certification shall inform the Applicant of the grounds for the denial.

(13) “Notice of Revocation or Modification” means the notice issued by the Department of Economic Opportunity to an Applicant and to the Department of Revenue revoking or modifying a Certification.  The Department of Economic Opportunity may issue a Notice of Revocation or Modification where it determines that a certified spaceflight business made a false statement or representation in any application, record, report, plan, or other document filed in an attempt to receive tax credits under the Act and/or this Chapter. The Department of Economic Opportunity shall immediately notify the Department of Revenue of any revoked or modified orders affecting previously granted tax credits. The certified spaceflight business must notify the Department of Economic Opportunity and the Department or Revenue of any change in its claimed tax credit.

(14) “State” means the State of Florida, either as a political entity or in the sense of geographical boundaries, as made clear from the context.

(15) “Transfer Statement” means Form DEO/SBD194(3).

(16) “Transferable Tax Credit” means a certified spaceflight business’s Florida net operating loss that would otherwise be available to be taken on a return filed under this chapter, provided that the activity giving rise to such net operating loss must have occurred after July 1, 2011.

Rulemaking Authority 220.194(8) FS. Law Implemented 220.194 FS. History–New__________.

 

73A-5.003 Tables.

Table 1: Submittal of Applications for Nontransferable and Transferable Tax Credits per Rules 73A-5.001 and 73A-5.004, F.A.C.

	Applications for Approval		Applications for Certification
Application  Type	“Approval” to Earn Nontransferable Corporate Income Tax Credits1	“Approval” to Create Transferable Net Operating Loss Tax Credits1	“Certification” of a Nontransferable Corporate Income Tax Credit	“Certification” of a Transferable Net Operating Loss Tax Credit
Number of Complete Applications Allowed	One	One	One	One
Application Deadline for Applicants requesting one type of Tax Credit Certification1	July 1, 2017	July 1, 2017	?	?
Application Deadline for Applicants requesting both types of Tax Credit  Certification1	May 31, 2017	May 31, 2017	?	?

1 The job creation and investment requirement are per tax credit.  In order to claim both credits the Applicant must have created a minimum of 70 eligible jobs and must have invested at least $30,000,000 as a direct result of the Applicant’s eligible Florida Spaceflight Projects.  The investment cannot be from the use of state funds.

 

Table 2: Tax Credit Maximum Amounts and Minimum Requirements for Eligible Spaceflight Projects in Florida

	Nontransferable Corporate Income Tax Credit	Transferable Net Operating Loss Tax Credit
Application Frequency per State Fiscal Year	Once	Once
Nonrefundable Application Fee	$250	$250
For Use in Taxable Year Beginning	October 1, 2015	October 1, 2015
Maximum Tax Credit per Applicant and Maximum Tax Credits per Program	$1,000,000/Applicant $3,000,000 Cumulative	$2,500,000/Applicant $7,000,000 Cumulative
Minimum Direct Jobs Created and Investment made during the Preceding 3-years1	35 Jobs $15,000,000 in Investment	35 Jobs $15,000,000 in Investment
Maximum Percentage of Tax Liability for the Taxable Year in Which the Credit is Taken	50%	Not Applicable
Timeframe for Net Operating Loss Tax Credit	Not Applicable	The immediate 3 taxable years before the transfer, but subsequent to July 1, 2011

1 The job creation and investment requirement are per tax credit.  In order to claim both credits the Applicant must have created a minimum of 70 eligible jobs and must have invested at least $30,000,000 as a direct result of the Applicant’s eligible Florida Spaceflight Projects. The investment cannot be from the use of state funds.

Rulemaking Authority 220.194(8) FS. Law Implemented 220.194(5), (6) FS. History–New _________.

 

73A-5.004 Application Process for Approval to Earn Tax Credits or to Create Transferable Tax Credits.

In addition to the approval process outlined in Section 220.194, Florida Statutes, and this Chapter, Applications for Approval are subject to the following requirements:

(1) In order to request a tax credit under the Act and this Chapter, an Application for Approval must be submitted to DEO in accordance with the timelines established in Table 1 of Rule 73A-5.003, F.A.C. All Applications for Approval that are submitted to DEO must include a written and positive recommendation from Space Florida addressing the Applicant’s likelihood of receiving a Letter of Approval from DEO.

(2) Approval of any available tax credits shall be provided on a first-come, first-served basis, based on the date that an Applicant’s completed application is date stamped as being received by DEO. An Applicant may submit a hardcopy of their Application for Approval to DEO at 107 E. Madison Street, Mail Station 80, Caldwell Building, Tallahassee, Florida 32399, or electronically at:  http://www.floridajobs.org. The time indicated on the electronic confirmation will serve as the Applicant’s date stamp.

(3) Within 30 days of the date stamp, an application shall be reviewed by DEO for completeness and to determine whether the application contains all required information. If necessary, this review will include an interview with the contact person listed on the application.

(4) If DEO determines that all required information has been submitted, it shall deem the application complete and begin the process of approving or denying the application.

(5) If DEO determines that the Application for Approval is incomplete, DEO shall notify the Applicant by email, and advise the Applicant on what is missing from the application.  The Applicant shall have 30 days from the date of such email to correct any deficiencies and resubmit the Application for Approval for entry into the first-come, first-served application line.

Rulemaking Authority 220.194(8) FS. Law Implemented 220.194(5) FS. History–New___________.

 

73A-5.005 Early Review of an Application for Approval.

In addition to the process outlined in Section 220.194, Florida Statutes, and this Chapter, Applications for Approval are subject to the following:

(1) An Applicant may submit an electronic copy of its Application for Approval to DEO for early review; however, the electronic copy must include the written and positive recommendation from Space Florida in order to be reviewed.   An application submitted for early review will not secure an Applicant’s place in the first-come, first-served application line.

(2) DEO will not accept an incomplete placeholder application, but, following review of the application, will advise the Applicant of all known deficiencies for correction.

Rulemaking Authority 220.194(8) FS. Law Implemented 220.194(7) FS. History–New _________.

 

73A-5.006 Application Process for Certification to Take or Transfer Tax Credits.

In addition to the application requirements in section 220.194, Florida Statutes, and this Chapter, Applications for Certification are subject to the following:

(1) In order to take or transfer tax credits under the Act and this Chapter, an Approved spaceflight business must submit an Application for Certification in accordance with Section 220.194, Florida Statutes, within the timelines established in Table 1 of Rule 73A-5.003, F.A.C., and the minimum requirements established in Table 2 of Rule 73A-5.003, F.A.C. All Applications for Certification that are submitted to DEO must include a written and positive recommendation from Space Florida addressing the Applicant’s likelihood of receiving a Letter of Certification from DEO.

(2) An Applicant may submit a hardcopy of its Application for Certification along with the $250 nonrefundable application review fee to DEO at 107 E. Madison Street, Mail Station 80, Caldwell Building, Tallahassee, Florida 32399.

(3) Within 30 days of its receipt, DEO shall review an Application for Certification for completeness and to determine whether the application contains all required information. Applications that do not include the $250 nonrefundable application review fee will not be reviewed. If necessary, the review will include an interview with the contact person listed on the Application for Certification.

(4) If DEO determines that all the required information has been submitted, it shall deem the application complete and begin the process of approving or denying the application.

(5) If DEO determines that the Application for Certification is incomplete, DEO shall notify the Applicant via e-mail, and advise the Applicant of what is missing from the application. The Applicant shall have 30 days from the date of such email to correct any deficiencies and resubmit the Application for Certification.

(6) DEO may approve such a transfer in writing or via email, to an Applicant.

(7) Once transferred, a Net Operating Loss Tax Credit may not be transferred again.

Rulemaking Authority 220.194(8) FS. Law Implemented 220.194(5), (6) FS. History–New__________.

 

73A-5.007 Revocation or Modification of Certification to Take or Transfer Tax Credits.

(1) At any time, DEO may revoke or modify a Certification Letter granting the eligibility for tax credits if it finds that the certified spaceflight business made a false statement or representation in any application, record, report, plan, or other document filed in an attempt to receive tax credits under the Act or this Chapter by issuing the certified spaceflight business a Notice of Intent to Deny an Application for Certification, via certified mail.

(2) Within 30 days of its receipt of a Notice of Intent to Deny an Application for Certification a certified spaceflight business shall notify DEO in writing if it disputes any allegation(s) contained in the Notice. The certified spaceflight business shall identify all of the allegations it specifically denies and explain why it believes DEO’s determination is in error.

(3) If the certified spaceflight business does not dispute the Notice of Intent to Deny an Application for Certification within 30 days of the certified mail received date, the original notice shall become final and DEO shall issue the certified spaceflight business a Notice of Revocation or Modification.

(4) The certified spaceflight business may not use or transfer a tax credit once a Notification of Revocation or Modification has been issued; unless DEO, the DOR and the certified spaceflight business all agree in writing that the Notice of Revocation or Modification was in error.

(5) DEO may submit an electronic copy of a Notice of Intent to Deny an Application for Certification or a Notice of Revocation or Modification to the DOR.

Rulemaking Authority 220.194(8) FS. Law Implemented 220.194(7) FS. History–New_________.

 

73A-5.008 Forms.

(1) The following forms are prescribed for use with these rules and are incorporated by reference:

(a) Form DEO/SBD194(1), Application for Approval, effective______________.

(b) Form DEO/SBD194(2), Application for Certification, effective____________.

(c) Form DEO/SBD194(3), Transfer Statement, effective ______________.

(2) These forms may be obtained without cost from the Department of Economic Opportunity (DEO) at 107 E. Madison Street, Mail Station 80, Caldwell Building, Tallahassee, Florida 32399, or on DEO’s website:  http://www.floridajobs.org.

Rulemaking Authority 220.194(8) FS. Law Implemented 220.194(7) FS. History–New_________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Katherine Morrison, Division of Strategic Business Development

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Jesse Panuccio

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: May 30, 2013

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: May 15, 2013