Notice is hereby given that the following changes have been made to the proposed rule in accordance with subparagraph 120.54(3)(d)1., F.S., published in Vol.32,No.02, January 13, 2006 issue of the Florida Administrative Weekly.

In response to written comments received from the Joint Administrative Procedures Committee, dated February 8, 2006, the second sentence of sub-sub-subparagraph (3)(e)3.a.(I) and the seventh sentence of sub-sub-subparagraph (3)(e)3.a.(II) of Rule 12B-8.001, F.A.C., have been changed so that, when adopted, that those sub-sub-subparagraphs will read:

a.(I) When current year CAPCO credits, future year CAPCO credits or carryover CAPCO credits are transferred in whole or in part, written notification of such action must be provided to the Department of Revenue, Return Reconciliation Process, Insurance Premium Tax, 5050 W. Tennessee St., Bldg. F-3, Tallahassee, FL 32399-0100. This notification must be made at the earlier of within 30 days of such action or 30 days prior to when such IPT return on which such CAPCO credits could initially be claimed is due. The notification is required to contain the name and federal identification number of the original CAPCO investor, the name and federal identification number of the seller (if different from the original CAPCO investor), the name and federal identification number of the purchaser, the amount and type of CAPCO credit being transferred/sold, and a schedule tracking the amount of CAPCO credit granted the original investor and the use of such CAPCO credit through the date of transfer/sale.

(II) Transfer/sale of Future Year and Carryover CAPCO Credit Example. Insurer Z made an investment of certified capital in a CAPCO of $1,000,000 in 1999 and earned a CAPCO credit of $1,000,000. Insurer Z may use up to $100,000 of its CAPCO credit, including any carryover CAPCO credit, each IPT year, beginning with the 2000 IPT return, until the CAPCO credit is used in its entirety. In 2000, 2001, 2002, 2003, and 2004, Insurer Z used CAPCO credits of $100,000, $100,000, $100,000, $75,000, and $30,000, respectively. Insurer Z did not transfer any of its 2000, 2001, 2002, 2003, or 2004 current year CAPCO credits, as it had no affiliates. Insurer Z had a carryover CAPCO credit of $95,000 ($25,000 from 2003 and $70,000 from 2004), which could be used by Insurer Z on its 2010 IPT return. On December 1, 2005, Insurer Z sells all of its remaining CAPCO credits and carryover credits, including its 2005 current year CAPCO credit, to Insurer M. By December 31, 2005 [the earlier of December 31, 2005 (30 days after the date of transfer), or January 31, 2006 (30 days prior to the due date of the 2005 IPT return, the return on which the transferred CAPCO credits could initially be claimed)], Insurer Z sent a letter to the Department of Revenue stating that it sold all of its CAPCO credits to Insurer M. The letter included the federal identification numbers of Insurer Z and Insurer M. The letter also included a breakdown of how insurer Z used its CAPCO credits from 2000 to 2004 ($405,000 of CAPCO credits used by Insurer Z - $100,000 used on its 2000 IPT year, $100,000 used on its 2001 IPT year, $100,000 used on its 2002 IPT year, $75,000 used on its 2003 IPT year, and $30,000 used on its 2004 IPT year) and a recap of the amount of CAPCO credits sold (CAPCO credits of $100,000 per year for IPT years 2005 through 2009 and a $95,000 CAPCO credit carryover available for the 2010 IPT year for a total of $595,000). Insurer M started claiming CAPCO credits beginning with its 2005 IPT return. Insurer M will include a statement with each of its IPT returns on which it is claiming a CAPCO credit that it purchased its CAPCO credit from Insurer Z on December 1, 2005.