Title
Enterprise Zone Program Re-Designation (B)
Explanation
The City of Gainesville, pursuant to the amended Florida Enterprise Zone Act of 1982, and in accordance with Chapter 290, F.S., adopted an Enterprise Zone in February, 1995. The Enterprise Zone consisted of three geographic areas covering approximately 10 square miles. The intent of establishing the Enterprise Zone, as indicated in the adopting Resolution, was to provide both state and local incentives in order to induce private investment in these identified economically distressed areas.
In addition to the adopting Resolution instituting the Enterprise Zone, several steps were taken to implement its intent. These included: 1) adoption of a Strategic Plan, outlining the specific objectives of the Program; 2) establishing, by Ordinance, a Gainesville Enterprise Zone Development Agency (GEZDA), responsible for carrying out and overseeing activities associated with the Enterprise Zone Program; and 3) establishment, by Ordinance, of several local incentives, pursuant to Chapter 290, F.S., available to businesses located in the Enterprise Zone including a 50% reduction in building permit and development fees, a 50% reduction in occupational license tax and a 50% reduction in the municipal tax on electric energy.
In addition to locally offered incentives, the Florida Department of Revenue administers a menu of State incentives that include: 1) State Sales Tax Refunds on Building Materials and Business Equipment; 2) State Sales Tax or Corporate Income Tax Credits for Job Creation; 3) Corporate Income Tax Credit, based upon ad valorem taxes paid; 4) State Sales Tax Exemption for Electrical Energy; and 5) the Community Contribution Tax Credit Program.
The Florida Legislature recently reviewed the Florida Enterprise Zone Program in the 2005 Legislative Session to determine whether the Program should be reinstated. This is due to the fact that per Chapter 290, F.S., the Program was due to sunset on December 31, 2005.
The Florida Legislature reenacted the program per Chapter 2005-287, Laws of Florida, House Bill 1725 with the following features: 1) extends the expiration date of the Enterprise Zone Program to December 31, 2015; 2) provides opportunities for existing Enterprise Zones to apply for re-designation (including a request to amend their boundaries); if not approved for re-designation they expire on December 31, 2005; 3) institutes a procedure for re-designation; 4) adds measurable goals as an element of the Enterprise Zone Annual Report; and 5) modifies the State Sales Tax Refund on Building Materials. To comply with the legislation, all applications for re-designation must be submitted to the State of Florida by November 30, 2005.
The Gainesville Enterprise Zone Development Agency (GEZDA) is currently in the process of studying the issue and will be making recommendations to the City Commission sometime in late October or early November; however, initial policy direction regarding the Enterprise Zone Program is requested by staff.
Fiscal Note
Incentives provided by the State of Florida in the context of the Enterprise Zone program, as described above, do not impact the City's budget. A preliminary review of annual reports filed with the State of Florida through the most recent submission indicates that local incentives (including 50% reduction in permitting and development fees, 50% reduction in occupational license tax and 50% reduction in municipal tax on electric energy), total between $175,000 - $200,000 annually.
Recommendation
The City Commission: 1) direct staff to work with the GEZDA Board on the application for re-designation, amendment of existing boundaries, continuation of local incentives, and the institution of SMART goals; and 2) direct staff to prepare the required submission materials for Enterprise Zone re-designation for future presentation to the City Commission.