Florida Senate - 2010                                    SB 1992
       
       
       
       By Senator Ring
       
       
       
       
       32-01654-10                                           20101992__
    1                        A bill to be entitled                      
    2         An act relating to Florida ports investments; creating
    3         s. 311.23, F.S.; providing a short title; providing a
    4         purpose; providing definitions; providing requirements
    5         for certification to operate as a certified capital
    6         company; providing application requirements; providing
    7         for an application fee and annual certification
    8         renewal fees; providing application review and
    9         approval and certification administration and
   10         enforcement duties and responsibilities of the
   11         Department of Financial Services; providing grounds
   12         for denial of certification or decertification;
   13         providing for investments by the Office of Tourism,
   14         Trade, and Economic Development in port-related
   15         activities; specifying allocations for certain port
   16         activities and investments; providing requirements for
   17         capital allocation and investment; providing for a
   18         premium tax credit; providing for carryforward of the
   19         credit; providing limitations on the credit; providing
   20         limitations on the amount of tax credits; providing
   21         requirements for the office to administer the
   22         allocation of tax credits; providing requirements and
   23         procedures for a credit claim process; providing
   24         penalties for perjury for false written declaration
   25         involving verification of certain documentation;
   26         authorizing the Department of Revenue to conduct
   27         audits; providing investment requirements; providing
   28         for state participation; providing requirements and
   29         procedures for decertification; preserving audit
   30         authority of the Chief Financial Officer; providing
   31         criteria for deficiency assessments; providing
   32         penalties for failure to report and timely pay any tax
   33         due; providing for transferability of unused credits;
   34         providing a definition; providing reporting
   35         requirements; providing for deposit of fees;
   36         authorizing the Department of Revenue to adopt rules;
   37         authorizing the Office of Tourism, Trade, and Economic
   38         Development to adopt rules; providing an effective
   39         date.
   40  
   41  Be It Enacted by the Legislature of the State of Florida:
   42  
   43         Section 1. Section 311.23, Florida Statutes, is created to
   44  read:
   45         311.23 Florida Ports Investment Act.—
   46         (1) SHORT TITLE.—This section may be cited as the “Florida
   47  Ports Investment Act.”
   48         (2) PURPOSE.—The primary purpose of this section is to
   49  stimulate a substantial increase in the state’s port
   50  infrastructure by providing an incentive for insurance companies
   51  to invest in certified port activities in this state which, in
   52  turn, will generate investments in new port businesses or in
   53  expanding port businesses. The increase in investment capital
   54  flowing into new or expanding port activities and businesses is
   55  intended to contribute to employment growth, create jobs that
   56  exceed the average wage for the county in which the jobs are
   57  created, and expand or diversify the economic base of this
   58  state.
   59         (3) DEFINITIONS.—As used in this section, the term:
   60         (a) “Affiliate of an insurance company” means:
   61         1. Any person directly or indirectly beneficially owning,
   62  whether through rights, options, convertible interests, or
   63  otherwise, controlling, or holding power to vote 10 percent or
   64  more of the outstanding voting securities or other voting
   65  ownership interests of the insurance company;
   66         2. Any person 10 percent or more of whose outstanding
   67  voting securities or other voting ownership interest is directly
   68  or indirectly beneficially owned, whether through rights,
   69  options, convertible interests, or otherwise, controlled, or
   70  held with power to vote by the insurance company;
   71         3. Any person directly or indirectly controlling,
   72  controlled by, or under common control with the insurance
   73  company;
   74         4. A partnership in which the insurance company is a
   75  general partner; or
   76         5. Any person who is a principal, director, employee, or
   77  agent of the insurance company or an immediate family member of
   78  the principal, director, employee, or agent.
   79         (b) “Certified capital” means an investment of cash by a
   80  certified investor in a certified capital company which fully
   81  funds the purchase price of either or both its equity interest
   82  in the certified capital company or a qualified debt instrument
   83  issued by the certified capital company.
   84         (c) “Certified capital company” means a corporation,
   85  partnership, or limited liability company that:
   86         1. Is certified by the office under this section;
   87         2. Receives investments of certified capital from two or
   88  more unaffiliated certified investors; and
   89         3. Makes investments in qualified port businesses as its
   90  primary activity.
   91         (d) “Certified investor” means any insurance company
   92  subject to premium tax liability under s. 624.509 that
   93  contributes certified capital.
   94         (e) “Department” means the Department of Financial
   95  Services.
   96         (f) “Office” means the Office of Tourism, Trade, and
   97  Economic Development.
   98         (g) “Premium tax liability” means any liability incurred by
   99  an insurance company under s. 624.509.
  100         (h) “Principal” means an executive officer of a
  101  corporation, partner of a partnership, manager of a limited
  102  liability company, or any other person with equivalent executive
  103  functions.
  104         (i) “Qualified port business” means the ports and
  105  associated facilities listed in s. 403.021(9)(b) which meet the
  106  following qualifications:
  107         1. The port is headquartered in this state and its
  108  principal business operations are located in this state.
  109         2. Regional projects use the port’s foreign trade zone for
  110  purposes involving manufacturing, processing or assembling of
  111  products, or conducting or providing services.
  112         3. The port has applied and qualified for investment
  113  funding under paragraph (5)(d).
  114         (j) “Qualified debt instrument” means a debt instrument, or
  115  a hybrid of a debt instrument, issued by a certified capital
  116  company, at par value or a premium, with an original maturity
  117  date of at least 5 years after the date of issuance, a repayment
  118  schedule that is no faster than a level principal amortization
  119  over a 5-year period, and interest, distribution, or payment
  120  features that are not related to the profitability of the
  121  certified capital company or the performance of the certified
  122  capital company’s investment portfolio.
  123         (k) “Qualified distribution” means any distribution or
  124  payment to equity holders of a certified capital company for:
  125         1. Costs and expenses of forming, syndicating, managing,
  126  and operating the certified capital company, including an annual
  127  management fee in an amount that does not exceed 2.5 percent of
  128  the certified capital of the certified capital company, plus
  129  reasonable and necessary fees in accordance with industry custom
  130  for professional services, including, but not limited to, legal
  131  and accounting services, related to the operation of the
  132  certified capital company; or
  133         2. Any projected increase in federal or state taxes,
  134  including penalties and interest related to state and federal
  135  income taxes, of the equity owners of a certified capital
  136  company resulting from the earnings or other tax liability of
  137  the certified capital company to the extent that the increase is
  138  related to the ownership, management, or operation of a
  139  certified capital company.
  140         (4) CERTIFICATION; GROUNDS FOR DENIAL OR DECERTIFICATION.—
  141         (a) To operate as a certified capital company, a
  142  corporation, partnership, or limited liability company must be
  143  certified by the department pursuant to this section.
  144         (b) An applicant for certification as a certified capital
  145  company must file a verified application with the department on
  146  or before December 1, 2010, in a form that the department may
  147  prescribe by rule. The applicant shall submit a nonrefundable
  148  application fee of $7,500 to the department. The applicant shall
  149  provide:
  150         1. The name of the applicant and the address of its
  151  principal office and each office in this state.
  152         2. The applicant’s form and place of organization and the
  153  relevant organizational documents, bylaws, and amendments or
  154  restatements of such documents, bylaws, or amendments.
  155         3. Evidence from the Department of State that the applicant
  156  is registered with the Department of State as required by law,
  157  maintains an active status with the Department of State, and has
  158  not been dissolved or had its registration revoked, canceled, or
  159  withdrawn.
  160         4. The applicant’s proposed method of doing business.
  161         5. The applicant’s financial condition and history,
  162  including an audit report on the financial statements prepared
  163  in accordance with generally accepted accounting principles
  164  showing net capital of not less than $500,000 within 90 days
  165  after the date the application is submitted to the department.
  166  If the date of the application is more than 90 days after the
  167  preparation of the applicant’s fiscal year-end financial
  168  statements, the applicant may file financial statements reviewed
  169  by an independent certified public accountant for the period
  170  subsequent to the audit report, together with the audited
  171  financial statement for the most recent fiscal year. If the
  172  applicant has been in business less than 12 months and has not
  173  prepared an audited financial statement, the applicant may file
  174  a financial statement reviewed by an independent certified
  175  public accountant.
  176         (c) On or before December 31, 2010, the department shall
  177  grant or deny certification as a certified capital company. If
  178  the department denies certification within the time period
  179  specified, the department shall inform the applicant of the
  180  grounds for the denial. If the department has not granted or
  181  denied certification within the time specified, the application
  182  shall be deemed approved. The department shall approve the
  183  application if the department finds that:
  184         1. The applicant satisfies the requirements of paragraph
  185  (b).
  186         2. No evidence exists that the applicant has committed any
  187  act specified in paragraph (d).
  188         3. At least two of the principals have a minimum of 5 years
  189  of experience making venture capital investments out of private
  190  equity funds, with not less than $20 million being provided by
  191  third-party investors for investment in the early stage of
  192  operating businesses. At least one full-time manager or
  193  principal of the certified capital company who has such
  194  experience must be primarily located in an office of the
  195  certified capital company which is based in this state.
  196         (d) The department may deny certification or decertify a
  197  certified capital company if the grounds for decertification are
  198  not removed or corrected within 90 days after the notice of such
  199  grounds is received by the certified capital company. The
  200  department may deny certification or decertify a certified
  201  capital company if the certified capital company fails to
  202  maintain common stock or paid-in capital of at least $500,000,
  203  or if the department determines that the applicant, or any
  204  principal or director of the certified capital company, has:
  205         1. Violated any provision of this section;
  206         2. Made a material misrepresentation or false statement or
  207  concealed any essential or material fact from any person during
  208  the application process or with respect to information and
  209  reports required of certified capital companies under this
  210  section;
  211         3. Been convicted of, or entered a plea of guilty or nolo
  212  contendere to, a crime against the laws of this state or any
  213  other state or of the United States or any other country or
  214  government, including a fraudulent act in connection with the
  215  operation of a certified capital company, or in connection with
  216  the performance of fiduciary duties in another capacity;
  217         4. Been adjudicated liable in a civil action on grounds of
  218  fraud, embezzlement, misrepresentation, or deceit; or
  219         5.a. Been the subject of any decision, finding, injunction,
  220  suspension, prohibition, revocation, denial, judgment, or
  221  administrative order by any court of competent jurisdiction,
  222  administrative law judge, or any state or federal agency,
  223  national securities, commodities, or option exchange, or
  224  national securities, commodities, or option association,
  225  involving a material violation of any federal or state
  226  securities or commodities law or any rule or regulation adopted
  227  under such law, or any rule or regulation of any national
  228  securities, commodities, or options exchange, or national
  229  securities, commodities, or options association; or
  230         b. Been the subject of any injunction or adverse
  231  administrative order by a state or federal agency regulating
  232  banking, insurance, finance or small loan companies, real
  233  estate, mortgage brokers, or other related or similar
  234  industries.
  235         (e) The certified capital company shall file a copy of its
  236  certification with the department by January 31, 2011.
  237         (f) Any offering material involving the sale of securities
  238  of the certified capital company shall include the following
  239  statement: “By authorizing the formation of a certified capital
  240  company, the State of Florida does not endorse the quality of
  241  management or the potential for earnings of such company and is
  242  not liable for damages or losses to a certified investor in the
  243  company. Use of the word ‘certified’ in an offering does not
  244  constitute a recommendation or endorsement of the investment by
  245  the State of Florida. Investments in a certified capital company
  246  prior to the time such company is certified are not eligible for
  247  premium tax credits. If applicable provisions of law are
  248  violated, the state may require forfeiture of unused premium tax
  249  credits and repayment of used premium tax credits by the
  250  certified investor.”
  251         (g) An insurance company or any affiliate of an insurance
  252  company may not manage or control, directly or indirectly, the
  253  direction of investments of a certified capital company. This
  254  prohibition does not preclude a certified investor, insurance
  255  company, or any other party from exercising its legal rights and
  256  remedies, which may include interim management of a certified
  257  capital company, if a certified capital company is in default of
  258  its obligations under law or its contractual obligations to such
  259  certified investor, insurance company, or other party.
  260         (h) On or before December 31 of each year, each certified
  261  capital company shall pay to the department an annual,
  262  nonrefundable renewal certification fee of $5,000. Renewal fees
  263  may not be required within 6 months after the date of initial
  264  certification.
  265         (i) The department shall administer and provide for the
  266  enforcement of certification requirements for certified capital
  267  companies as provided in this section. The department may adopt
  268  any rules necessary to carry out its duties, obligations, and
  269  powers related to certification, renewal of certification, or
  270  decertification of certified capital companies and may perform
  271  any other acts necessary for the proper administration and
  272  enforcement of such duties, obligations, and powers.
  273         (j) Decertification of a certified capital company under
  274  this subsection does not affect the ability of certified
  275  investors in the certified capital company from claiming future
  276  premium tax credits earned as a result of an investment in the
  277  certified capital company during the period in which it was duly
  278  certified.
  279         (5) INVESTMENTS BY THE OFFICE IN PORT-RELATED ACTIVITIES.—
  280         (a)1. The office shall seek to maintain the state’s
  281  advantage in ports and related industries. In order to maintain
  282  that advantage, the office shall:
  283         a. Allocate at least 60 percent of the capital to direct
  284  port activities as described in s. 402.021(9).
  285         b. Allocate at least 20 percent of the capital to port
  286  related activities as specified in s. 403.021(9).
  287         c. Allocate at least 20 percent of the capital to education
  288  related to ports and port-related studies under the New Florida
  289  Initiative developed by the Florida Board of Governors of the
  290  State University System.
  291         2. The capital raised under this section shall be allocated
  292  by July 1, 2012.
  293         3. An individual port project may not consume more than 15
  294  percent of the total revenues of the corporation’s intake.
  295         (b) All capital not invested in qualified port businesses:
  296         1. Must be held in a financial institution as defined by s.
  297  655.005(1)(h) or held by a broker-dealer registered under s.
  298  517.12.
  299         2. Must be invested only in:
  300         a. United States Treasury obligations;
  301         b. Certificates of deposit or other obligations, maturing
  302  within 3 years after acquisition of such certificates or
  303  obligations, issued by any financial institution or trust
  304  company incorporated under the laws of the United States;
  305         c. Marketable obligations, maturing within 5 years or less
  306  after the acquisition of such obligations, which are rated “A”
  307  or better by any nationally recognized credit rating agency;
  308         d. Mortgage-backed securities, with an average life of 5
  309  years or less, after the acquisition of such securities, which
  310  are rated “A” or better by any nationally recognized credit
  311  rating agency;
  312         e. Collateralized mortgage obligations and real estate
  313  mortgage investment conduits that are direct obligations of an
  314  agency of the Federal Government; are not private-label issues;
  315  are in book-entry form; and do not include the classes of
  316  interest only, principal only, residual, or zero; or
  317         f. Interests in money market funds, the portfolio of which
  318  is limited to cash and obligations described in sub
  319  subparagraphs a.-d.
  320         (c) The aggregate amount of all investments in qualified
  321  port businesses made by the certified capital company from the
  322  date of its certification shall be considered in the calculation
  323  of the percentage requirements under paragraph (a).
  324         (d) When an investment in a qualified port business is
  325  ready, the port must petition the office to receive funding and
  326  certify that the investment is of a beneficial nature to the
  327  port, is ready to proceed within 60 days for design,
  328  construction, and permitting, and will create a lasting economic
  329  impact as defined by the office. Applications for funding must
  330  be made to the office under rules adopted by the office.
  331         (6) PREMIUM TAX CREDIT; AMOUNT; LIMITATIONS.—
  332         (a) Any certified investor who makes an investment of
  333  certified capital shall earn a vested credit against premium tax
  334  liability equal to 100 percent of the certified capital invested
  335  by the certified investor. Certified investors shall be entitled
  336  to use no more than 10 percentage points of the vested premium
  337  tax credit, including any carryforward credits under this
  338  section, per year beginning with premium tax filings for
  339  calendar year 2012. Any premium tax credits not used by
  340  certified investors in any single year may be carried forward
  341  and applied against the premium tax liabilities of such
  342  investors for subsequent calendar years. The carryforward credit
  343  may be applied against subsequent premium tax filings through
  344  calendar year 2029.
  345         (b) The credit to be applied against premium tax liability
  346  in any single year may not exceed the premium tax liability of
  347  the certified investor for that taxable year.
  348         (c) A certified investor claiming a credit against premium
  349  tax liability earned through an investment in a certified
  350  capital company shall not be required to pay any additional
  351  retaliatory tax levied pursuant to s. 624.5091 as a result of
  352  claiming such credit. Because credits under this section are
  353  available to a certified investor, s. 624.5091 does not limit
  354  such credit in any manner.
  355         (d) The amount of tax credits vested under this section
  356  shall not be considered in ratemaking proceedings involving a
  357  certified investor.
  358         (7) ANNUAL TAX CREDIT; MAXIMUM AMOUNT; ALLOCATION PROCESS.—
  359         (a) The total amount of tax credits which may be allocated
  360  by the office shall not exceed $500 million. The total amount of
  361  tax credits which may be used by certified investors under this
  362  section shall not exceed $25 million annually.
  363         (b) The office shall be responsible for allocating premium
  364  tax credits as provided for in this section to certified capital
  365  companies.
  366         (c) Each certified capital company must apply to the office
  367  for an allocation of premium tax credits for potential certified
  368  investors by March 15, 2011, on a form developed by the office
  369  with the cooperation of the Department of Revenue. The form
  370  shall be accompanied by an affidavit from each potential
  371  certified investor confirming that the potential certified
  372  investor has agreed to make an investment of certified capital
  373  in a certified capital company up to a specified amount, subject
  374  only to the receipt of a premium tax credit allocation pursuant
  375  to this subsection. No allocation shall be made to the potential
  376  investors of a certified capital company unless such certified
  377  capital company has filed premium tax allocation claims that
  378  would result in an allocation to the potential investors in such
  379  certified capital company of not less than $15 million in the
  380  aggregate.
  381         (d) On or before April 1, 2011, the office shall inform
  382  each certified capital company of its share of total premium tax
  383  credits available for allocation to each of its potential
  384  investors.
  385         (e) If a certified capital company does not receive
  386  certified capital equaling the amount of premium tax credits
  387  allocated to a potential certified investor for which the
  388  investor filed a premium tax allocation claim within 10 business
  389  days after the investor received a notice of allocation, the
  390  certified capital company shall notify the office by overnight
  391  common carrier delivery service of the company’s failure to
  392  receive the capital. That portion of the premium tax credits
  393  allocated to the certified capital company shall be forfeited.
  394  If the office must make a pro rata allocation under paragraph
  395  (f), it shall reallocate such available credits among the other
  396  certified capital companies on the same pro rata basis as the
  397  initial allocation.
  398         (f) If the total amount of capital committed by all
  399  certified investors to certified capital companies in premium
  400  tax allocation claims exceeds the aggregate cap on the amount of
  401  credits that may be awarded, the premium tax credits that may be
  402  allowed to any one certified investor shall be allocated using
  403  the following ratio:
  404  
  405                        A/B = X/>$500,000,000                      
  406  
  407  Where the letter “A” represents the total amount of certified
  408  capital that certified investors have agreed to invest in any
  409  one certified capital company, the letter “B” represents the
  410  aggregate amount of certified capital that all certified
  411  investors have agreed to invest in all certified capital
  412  companies, the letter “X” is the numerator and represents the
  413  total amount of premium tax credits and certified capital that
  414  may be allocated to a certified capital company in calendar year
  415  2011, and $500 million is the denominator and represents the
  416  total amount of premium tax credits and certified capital that
  417  may be allocated to all certified investors in calendar year
  418  2011. Any such premium tax credits are not first available for
  419  utilization until annual filings are made in 2012 for calendar
  420  year 2011, and the tax credits may be used at a rate not to
  421  exceed 10 percent annually.
  422         (g) The maximum amount of certified capital for which
  423  premium tax allocation claims may be filed on behalf of any
  424  certified investor and its affiliates by one or more certified
  425  capital companies may not exceed $25 million.
  426         (h) To the extent that less than $500 million in certified
  427  capital is raised in connection with the procedure set forth in
  428  paragraphs (c)-(g), the department may adopt rules to allow a
  429  subsequent allocation of the remaining premium tax credits
  430  authorized under this section.
  431         (8) ANNUAL TAX CREDIT; CLAIM PROCESS.—
  432         (a) On an annual basis, on or before December 31, each
  433  certified capital company shall file with the department and the
  434  office, in consultation with the department, on a form
  435  prescribed by the office, for each calendar year:
  436         1. The total dollar amount the certified capital company
  437  received from certified investors, the identity of the certified
  438  investors, and the amount received from each certified investor
  439  during the immediately preceding calendar year.
  440         2. The total dollar amount the certified capital company
  441  invested and the amount invested in qualified port businesses,
  442  together with the identity and location of those businesses and
  443  the amount invested in each qualified port business during the
  444  immediately preceding calendar year.
  445         3. For informational purposes only, the total number of
  446  permanent, full-time jobs created or retained by the qualified
  447  port business during the immediately preceding calendar year,
  448  the average wage of the jobs created or retained, the industry
  449  sectors in which the qualified port businesses operate, and any
  450  additional capital invested in qualified port businesses from
  451  sources other than certified capital companies.
  452         (b) The form shall be verified by one or more principals of
  453  the certified capital company submitting the form. Verification
  454  shall be accomplished as provided in s. 92.525(1)(b) and subject
  455  to the provisions of s. 92.525(3).
  456         (c) The office shall review the form, and any supplemental
  457  documentation, submitted by each certified capital company for
  458  the purpose of verifying:
  459         1. That the businesses in which certified capital has been
  460  invested by the certified capital company are in fact qualified
  461  port businesses and that the amount of certified capital
  462  invested by the certified capital company is as represented in
  463  the form.
  464         2. The amount of certified capital invested in the
  465  certified capital company by the certified investors.
  466         3. The amount of premium tax credit available to certified
  467  investors.
  468         (d) The Department of Revenue may audit and examine the
  469  accounts, books, or records of certified capital companies and
  470  certified investors to ascertain the correctness of any report
  471  and financial return that has been filed and to ascertain a
  472  certified capital company’s compliance with the tax-related
  473  provisions of this section.
  474         (e) This subsection shall take effect January 1, 2011.
  475         (9) REQUIREMENT FOR FULL INVESTMENT; STATE PARTICIPATION.—
  476         (a) A certified capital company may make qualified
  477  distributions at any time. In order to make a distribution to
  478  its equity holders, other than a qualified distribution, a
  479  certified capital company must have invested an amount
  480  cumulatively equal to 100 percent of its certified capital in
  481  investments in qualified port businesses. Payments to debt
  482  holders of a certified capital company, however, may be made
  483  without restriction with respect to repayments of principal and
  484  interest on indebtedness owed to them by a certified capital
  485  company, including indebtedness of the certified capital company
  486  on which certified investors earned premium tax credits. A debt
  487  holder that is also a certified investor or equity holder of a
  488  certified capital company may receive payments with respect to
  489  such debt without restrictions.
  490         (b) Cumulative distributions from a certified capital
  491  company to its certified investors and equity holders, other
  492  than qualified distributions, in excess of the certified capital
  493  company’s original certified capital and any additional capital
  494  contributions to the certified capital company may be audited by
  495  a nationally recognized certified public accounting firm
  496  acceptable to the office, at the expense of the certified
  497  capital company, if the department directs such an audit to be
  498  conducted. The audit shall determine whether aggregate
  499  cumulative distributions from the certified capital company to
  500  all certified investors and equity holders, other than qualified
  501  distributions, have equaled the sum of the certified capital
  502  company’s original certified capital and any additional capital
  503  contributions to the certified capital company. If at the time
  504  of any such distribution made by the certified capital company,
  505  such distribution taken together with all other such
  506  distributions made by the certified capital company, other than
  507  qualified distributions, exceeds in the aggregate the sum of the
  508  certified capital company’s original certified capital and any
  509  additional capital contributions to the certified capital
  510  company, as determined by the audit, the certified capital
  511  company shall pay to the Department of Revenue 10 percent of the
  512  portion of such distribution in excess of such amount. Payments
  513  to the Department of Revenue by a certified capital company
  514  pursuant to this paragraph may not exceed the aggregate amount
  515  of tax credits used by all certified investors in such certified
  516  capital company.
  517         (10) DECERTIFICATION.—
  518         (a) The department shall conduct an annual review of each
  519  certified capital company to determine if the certified capital
  520  company is abiding by the requirements of certification, to
  521  advise the certified capital company as to the eligibility
  522  status of its investments in qualified port businesses, and to
  523  ensure that no investment has been made in violation of this
  524  section. The cost of the annual review shall be paid by each
  525  certified capital company.
  526         (b) This subsection does not limit the Chief Financial
  527  Officer’s authority to conduct audits of certified capital
  528  companies as deemed appropriate and necessary.
  529         (c) Any material violation of this section, or a finding
  530  that the certified capital company or any principal or director
  531  thereof has committed any act specified in paragraph (4)(d),
  532  constitutes grounds for decertification of the certified capital
  533  company. If the department determines that a certified capital
  534  company is no longer in compliance with the certification
  535  requirements of this section, the department shall, by written
  536  notice, inform the officers of such company that the company may
  537  be subject to decertification 90 days after the date of mailing
  538  of the notice, unless the deficiencies are corrected and the
  539  company is again found to be in compliance with all
  540  certification requirements.
  541         (d) At the end of the 90-day grace period, if the certified
  542  capital company is still not in compliance with the
  543  certification requirements, the department may issue a notice to
  544  revoke or suspend the certification or to impose an
  545  administrative fine. The department shall advise each respondent
  546  of the right to an administrative hearing under chapter 120
  547  prior to final action by the department.
  548         (e) If the department revokes a certification, such
  549  revocation shall also deny, suspend, or revoke the
  550  certifications of all affiliates of the certified capital
  551  company.
  552         (f) Decertification of a certified capital company for
  553  failure to meet all requirements for continued certification
  554  under paragraph (5)(a) may cause the recapture of premium tax
  555  credits previously claimed by such company and the forfeiture of
  556  future premium tax credits to be claimed by certified investors
  557  with respect to such certified capital company, as follows:
  558         1. Decertification of a certified capital company within 3
  559  years after its certification date shall cause the recapture of
  560  all premium tax credits previously claimed by such company and
  561  the forfeiture of all future premium tax credits to be claimed
  562  by certified investors with respect to such company.
  563         2. When a certified capital company meets all requirements
  564  for continued certification under subparagraph (5)(a)1. and
  565  subsequently fails to meet the requirements for continued
  566  certification under subparagraph (5)(a)2., the premium tax
  567  credits that have been or will be taken by certified investors
  568  within 3 years after the certification date of the certified
  569  capital company are not subject to recapture or forfeiture;
  570  however, all premium tax credits that have been or will be taken
  571  by certified investors after the third anniversary of the
  572  certification date of the certified capital company are subject
  573  to recapture or forfeiture.
  574         3. When a certified capital company meets all requirements
  575  for continued certification under subparagraphs (5)(a)1. and 2.
  576  and subsequently fails to meet the requirements for continued
  577  certification under subparagraph (5)(a)3., the premium tax
  578  credits that have been or will be taken by certified investors
  579  within 4 years after the certification date of the certified
  580  capital company are not subject to recapture or forfeiture;
  581  however, all premium tax credits that have been or will be taken
  582  by certified investors after the fourth anniversary of the
  583  certification date of the certified capital company are subject
  584  to recapture and forfeiture.
  585         4. If a certified capital company has met all requirements
  586  for continued certification under paragraph (5)(a), but the
  587  company is subsequently decertified, the premium tax credits
  588  that have been or will be taken by certified investors within 5
  589  years after the certification date of the company are not
  590  subject to recapture or forfeiture. Premium tax credits to be
  591  taken after the 5th year of certification are subject to
  592  forfeiture only if the certified capital company is decertified
  593  within 5 years after its certification date.
  594         5. If a certified capital company has invested an amount
  595  cumulatively equal to 100 percent of its certified capital in
  596  investments in qualified port businesses, all premium tax
  597  credits claimed or to be claimed by its certified investors are
  598  not subject to recapture or forfeiture.
  599         (g) Decertification of a certified capital company pursuant
  600  to subsection (4) or this subsection does not affect the ability
  601  of certified investors in such certified capital company to
  602  continue to claim future premium tax credits earned as an
  603  investment in the certified capital company during the period in
  604  which it was duly certified.
  605         (h) The office shall send written notice to the address of
  606  each certified investor whose premium tax credit has been
  607  subject to recapture or forfeiture, using the address last shown
  608  on the last premium tax filing.
  609         (i) The certified investor is responsible for returning to
  610  the Department of Revenue any forfeited insurance premium tax
  611  credits, and such funds shall be paid into the General Revenue
  612  Fund.
  613         (j) The certified investor shall file with the Department
  614  of Revenue an amended return or such other report as the
  615  department may prescribe by rule and pay any required tax, not
  616  later than 60 days after the decertification has been agreed to
  617  or finally determined, whichever shall first occur.
  618         (k) A notice of deficiency may be issued:
  619         1. At any time within 5 years after the date such
  620  notification is given; or
  621         2. At any time if a certified investor fails to notify the
  622  Department of Revenue.
  623  
  624  In either case, the amount of any proposed assessment set forth
  625  in such notice shall be limited to the amount of any deficiency
  626  resulting under this section from the recomputation of the
  627  certified investor’s insurance premium tax and, if applicable,
  628  its retaliatory tax for the taxable year giving effect only to
  629  the item or items reflected in the decertification adjustment.
  630         (l) Any certified investor who fails to report and timely
  631  pay any tax due as a result of the forfeiture of its insurance
  632  premium tax credit is in violation of this subsection and is
  633  subject to a penalty of 10 percent of any underpayment or
  634  delinquent taxes due and payable.
  635         (m) When any taxpayer fails to pay any amount due as a
  636  result of the forfeiture of its insurance premium tax credit as
  637  provided for in this subsection, on or before the due date as
  638  specified in this subsection, interest shall be due on any
  639  insurance premium or retaliatory tax deficiency resulting from
  640  such forfeiture, at the rate of 12 percent per year from the due
  641  date of such amended return until paid.
  642         (11) TRANSFERABILITY.—The claim of a transferee of a
  643  certified investor’s unused premium tax credit shall be
  644  permitted in the same manner and subject to the same provisions
  645  and limitations of this section as the original certified
  646  investor. The term “transferee” means any person who:
  647         (a) Through the voluntary sale, assignment, or other
  648  transfer of the business or control of the business of the
  649  certified investor, including the sale or other transfer of
  650  stocks or assets by merger, consolidation, or dissolution,
  651  succeeds to all or substantially all of the business and
  652  property of the certified investor;
  653         (b) Becomes by operation of law or otherwise the parent
  654  company of the certified investor;
  655         (c) Directly or indirectly owns, whether through rights,
  656  options, convertible interests, or otherwise, controls, or holds
  657  power to vote 10 percent or more of the outstanding voting
  658  securities or other ownership interest of the certified
  659  investor;
  660         (d) Is a subsidiary of the certified investor or has 10
  661  percent or more of its outstanding voting securities or other
  662  ownership interests directly or indirectly owned, whether
  663  through rights, options, convertible interests, or otherwise, by
  664  the certified investor; or
  665         (e) Directly or indirectly controls, is controlled by, or
  666  is under common control with the certified investor.
  667         (12) REPORTING REQUIREMENTS.—The office shall report on an
  668  annual basis to the Governor, the President of the Senate, and
  669  the Speaker of the House of Representatives on or before April
  670  1:
  671         (a) The total dollar amount each certified capital company
  672  received from all certified investors and any other investor,
  673  the identity of the certified investors, and the total amount of
  674  premium tax credit used by each certified investor for the
  675  previous calendar year.
  676         (b) The total dollar amount invested by each certified
  677  capital company and that portion invested in qualified port
  678  businesses, the identity and location of those businesses, the
  679  amount invested in each qualified port business, and the total
  680  number of permanent, full-time jobs created or retained by each
  681  qualified port business.
  682         (c) The return for the state as a result of the certified
  683  capital company investments in qualified port businesses,
  684  including the extent to which:
  685         1. Certified capital company investments have contributed
  686  to employment growth.
  687         2. The wage level of businesses in which certified capital
  688  companies have invested exceeds the average wage for the county
  689  in which the jobs are located.
  690         3. The investments of the certified capital companies in
  691  qualified port businesses have contributed to expanding or
  692  diversifying the economic base of the state.
  693         (13) FEES.—All fees and charges of any nature collected by
  694  the department under this section shall be paid into the State
  695  Treasury and credited to the General Revenue Fund.
  696         (14) RULEMAKING AUTHORITY.—
  697         (a) The Department of Revenue may by rule prescribe forms
  698  and procedures for the tax credit filings, audits, and
  699  forfeiture of premium tax credits described in this section, and
  700  for certified capital company payments under paragraph (9)(b).
  701         (b) The office may adopt any rules necessary to carry out
  702  its respective duties, obligations, and powers related to the
  703  administration, review, and reporting provisions of this section
  704  and may perform any other acts necessary for the proper
  705  administration and enforcement of such duties, obligations, and
  706  powers.
  707         Section 2. This act shall take effect July 1, 2010.