House Bill hb0293c1
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
By the Committee on Information Technology and
Representatives Crow and Mack
1 A bill to be entitled
2 An act relating to the Certified Capital
3 Company Act; amending s. 288.99, F.S.; revising
4 definitions; defining the terms "Program One"
5 and "Program Two"; revising procedures and
6 dates for certification and decertification
7 under Program One and Program Two; revising the
8 process for earning premium tax credits;
9 providing a limitation on tax credits under
10 Program Two; authorizing the Department of
11 Banking and Finance to levy a fine; providing
12 for distributions under both programs;
13 providing an effective date.
14
15 Be It Enacted by the Legislature of the State of Florida:
16
17 Section 1. Subsections (3) and (4), paragraph (a) of
18 subsection (5), paragraph (a) of subsection (6), paragraphs
19 (a), (c), (d), (e), (f), (g), and (h) of subsection (7),
20 paragraph (a) of subsection (8), subsection (9), and paragraph
21 (f) of subsection (10) of section 288.99, Florida Statutes,
22 are amended to read:
23 288.99 Certified Capital Company Act.--
24 (3) DEFINITIONS.--As used in this section, the term:
25 (a) "Affiliate of an insurance company" means:
26 1. Any person directly or indirectly beneficially
27 owning, whether through rights, options, convertible
28 interests, or otherwise, controlling, or holding power to vote
29 10 percent or more of the outstanding voting securities or
30 other ownership interests of the insurance company;
31
1
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 2. Any person 10 percent or more of whose outstanding
2 voting securities or other ownership interest is directly or
3 indirectly beneficially owned, whether through rights,
4 options, convertible interests, or otherwise, controlled, or
5 held with power to vote by the insurance company;
6 3. Any person directly or indirectly controlling,
7 controlled by, or under common control with the insurance
8 company;
9 4. A partnership in which the insurance company is a
10 general partner; or
11 5. Any person who is a principal, director, employee,
12 or agent of the insurance company or an immediate family
13 member of the principal, director, employee, or agent.
14 (b) "Certified capital" means an investment of cash by
15 a certified investor in a certified capital company which
16 fully funds the purchase price of either or both its equity
17 interest in the certified capital company or a qualified debt
18 instrument issued by the certified capital company.
19 (c) "Certified capital company" means a corporation,
20 partnership, or limited liability company which:
21 1. Is certified by the department in accordance with
22 this act.
23 2. Receives investments of certified capital from two
24 or more certified investors.
25 3. Makes qualified investments as its primary
26 activity.
27 (d) "Certified investor" means any insurance company
28 subject to premium tax liability pursuant to s. 624.509 that
29 contributes certified capital.
30 (e) "Department" means the Department of Banking and
31 Finance.
2
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 (f) "Director" means the director of the Office of
2 Tourism, Trade, and Economic Development.
3 (g) "Early stage technology business" means a
4 qualified business that is:
5 1. Involved, at the time of the certified capital
6 company's initial investment in such business, in activities
7 related to developing initial product or service offerings,
8 such as prototype development or the establishment of initial
9 production or service processes;. The term includes a
10 qualified business that is
11 2. Less than 2 years old and has, together with its
12 affiliates, less than $3 million in annual revenues for the
13 fiscal year immediately preceding the initial investment by
14 the certified capital company on a consolidated basis, as
15 determined in accordance with generally accepted accounting
16 principles;. The term also includes
17 3. The Florida Black Business Investment Board;,
18 4. Any entity that is majority owned by the Florida
19 Black Business Investment Board;,or
20 5. Any entity in which the Florida Black Business
21 Investment Board holds a majority voting interest on the board
22 of directors; or
23 6. Any entity that is defined under s. 288.703(2).
24 (h) "Office" means the Office of Tourism, Trade, and
25 Economic Development.
26 (i) "Premium tax liability" means any liability
27 incurred by an insurance company under the provisions of s.
28 624.509.
29 (j) "Principal" means an executive officer of a
30 corporation, partner of a partnership, manager of a limited
31
3
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 liability company, or any other person with equivalent
2 executive functions.
3 (k)1. "Qualified business" means a business that meets
4 the following conditions as evidenced by documentation
5 required by department rule:
6 a.1. The business is headquartered in this state and
7 its principal business operations are located in this state.
8 b.2. At the time a certified capital company makes an
9 initial investment in a business, the business is a small
10 business concern as defined in 13 C.F.R. s. 121.201, "Size
11 Standards Used to Define Small Business Concerns" of the
12 United States Small Business Administration which is involved
13 in manufacturing, processing or assembling products,
14 conducting research and development, or providing services.
15 c.3. At the time a certified capital company makes an
16 initial investment in a business, the business certifies in an
17 affidavit that:
18 (I)a. The business is unable to obtain conventional
19 financing, which means that the business has failed in an
20 attempt to obtain funding for a loan from a bank or other
21 commercial lender or that the business cannot reasonably be
22 expected to qualify for such financing under the standards of
23 commercial lending;
24 (II)b. The business plan for the business projects
25 that the business is reasonably expected to achieve in excess
26 of $25 million in sales revenue within 5 years after the
27 initial investment, or the business is located in a designated
28 Front Porch community, enterprise zone, urban high crime area,
29 rural job tax credit county, or nationally recognized historic
30 district;
31
4
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 (III)c. The business will maintain its headquarters in
2 this state for the next 10 years and any new manufacturing
3 facility financed by a qualified investment will remain in
4 this state for the next 10 years, or the business is located
5 in a designated Front Porch community, enterprise zone, urban
6 high crime area, rural job tax credit county, or nationally
7 recognized historic district; and
8 (IV)d. The business has fewer than 200 employees and
9 at least 75 percent of the employees are employed in this
10 state. For purposes of this subsection, the term "qualified
11 business" also includes the Florida Black Business Investment
12 Board, any entity majority owned by the Florida Black Business
13 Investment Board, or any entity in which the Florida Black
14 Business Investment Board holds a majority voting interest on
15 the board of directors.
16
17 A business predominantly engaged in retail sales, real estate
18 development, insurance, banking, lending, oil and gas
19 exploration, or engaged in professional services provided by
20 accountants, lawyers, or physicians does not constitute a
21 qualified business.
22 2. The term "qualified business" does not include:
23 a. Any business predominantly engaged in retail sales,
24 real estate development, insurance, banking, lending, or oil
25 and gas exploration.
26 b. Any business predominantly engaged in professional
27 services provided by accountants, lawyers, or physicians.
28 c. Any company that has no historical revenues and
29 either has no specific business plan or purpose or has
30 indicated that its business plan is solely to engage in a
31
5
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 merger or acquisition with any unidentified company or other
2 entity.
3 d. Any company that has a strategic plan to grow
4 through the acquisition of firms with substantially similar
5 business which would result in the planned net loss of
6 Florida-based jobs over a 12-month period after the
7 acquisition as determined by the department.
8 (l) "Qualified debt instrument" means a debt
9 instrument, or a hybrid of a debt instrument, issued by a
10 certified capital company, at par value or a premium, with an
11 original maturity date of at least 5 years after the date of
12 issuance, a repayment schedule which is no faster than a level
13 principal amortization over a 5-year period, and interest,
14 distribution, or payment features which are not related to the
15 profitability of the certified capital company or the
16 performance of the certified capital company's investment
17 portfolio.
18 (m) "Qualified distribution" means any distribution or
19 payment by to equity holders of a certified capital company
20 for:
21 1. Reasonable costs and expenses, including
22 professional fees, of forming and, syndicating the certified
23 capital company, if no such costs are paid to a certified
24 investor;,
25 2. Reasonable costs of managing, and operating the
26 certified capital company, not exceeding 5 percent of the
27 certified capital in any single year, including an annual
28 management fee in an amount that does not exceed 2.5 percent
29 of the certified capital of the certified capital company;,
30 plus
31
6
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 3. Reasonable and necessary fees in accordance with
2 industry custom for professional services, including, but not
3 limited to, legal and accounting services, related to the
4 operation of the certified capital company; or.
5 4.2. Any projected increase in federal or state taxes,
6 including penalties and interest related to state and federal
7 income taxes, of the equity owners of a certified capital
8 company resulting from the earnings or other tax liability of
9 the certified capital company to the extent that the increase
10 is related to the ownership, management, or operation of a
11 certified capital company.
12 (n)1. "Qualified investment" means the investment of
13 cash by a certified capital company in a qualified business
14 for the purchase of any debt, equity, or hybrid security of
15 any nature and description whatsoever, including a debt
16 instrument or security which has the characteristics of debt
17 but which provides for conversion into equity or equity
18 participation instruments such as options or warrants.
19 2. The term "qualified investment" does not include:
20 a. Any investment made after the effective date of
21 this act the contractual terms of which require the repayment
22 of any portion of the principal in instances, other than
23 default as determined by department rule, within 12 months
24 following the initial investment by the certified capital
25 company unless such investment has a repayment schedule no
26 faster than a level principal amortization of at least 2
27 years;
28 b. Any "follow-on" or "add-on" investment except for
29 the amount by which the new investment is in addition to the
30 amount of the certified capital company's initial investment
31
7
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 returned to it other than in the form of interest, dividends,
2 or other types of profit participation or distributions; or
3 c. Any investment in a qualified business or affiliate
4 of a qualified business that exceeds 15 percent of certified
5 capital.
6 (o) "Program One" means the $150 million in premium
7 tax credits issued under this act in 1999, the allocation of
8 such credits under this act, and the regulation of certified
9 capital companies and investments made by them hereunder.
10 (p) "Program Two" means the $250 million in premium
11 tax credits to be issued under this act after April 1, 2002,
12 the allocation of such credits under this act, and the
13 regulation of certified capital companies and investments made
14 by them hereunder.
15 (4) CERTIFICATION; GROUNDS FOR DENIAL OR
16 DECERTIFICATION.--
17 (a) To operate as a certified capital company, a
18 corporation, partnership, or limited liability company must be
19 certified by the department pursuant to this act.
20 (b) An applicant for certification as a certified
21 capital company must file a verified application with the
22 department on or before December 1, 1998, or November 1, 2001,
23 in the case of applicants for Program Two, in a form which the
24 department may prescribe by rule. The applicant shall submit
25 a nonrefundable application fee of $7,500 to the department.
26 The applicant shall provide:
27 1. The name of the applicant and the address of its
28 principal office and each office in this state.
29 2. The applicant's form and place of organization and
30 the relevant organizational documents, bylaws, and amendments
31 or restatements of such documents, bylaws, or amendments.
8
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 3. Evidence from the Department of State that the
2 applicant is registered with the Department of State as
3 required by law, maintains an active status with the
4 Department of State, and has not been dissolved or had its
5 registration revoked, canceled, or withdrawn.
6 4. The applicant's proposed method of doing business.
7 5. The applicant's financial condition and history,
8 including an audit report on the financial statements prepared
9 in accordance with generally accepted accounting principles
10 showing net worth capital of not less than $500,000 within 90
11 days before after the date the application is submitted to the
12 department. If the date of the application is more than 90
13 days after preparation of the applicant's fiscal year-end
14 financial statements, the applicant may file financial
15 statements reviewed by an independent certified public
16 accountant for the period subsequent to the audit report,
17 together with the audited financial statement for the most
18 recent fiscal year. If the applicant has been in business
19 less than 12 months, and has not prepared an audited financial
20 statement, the applicant may file a financial statement
21 reviewed by an independent certified public accountant.
22 6. Copies of any offering materials used or proposed
23 to be used by the applicant in soliciting investments of
24 certified capital from certified investors.
25 (c) On December 31, 1998, or December 31, 2001, in the
26 case of applicants for Program Two, the department shall grant
27 or deny certification as a certified capital company. If the
28 department denies certification within the time period
29 specified, the department shall inform the applicant of the
30 grounds for the denial. If the department has not granted or
31 denied certification within the time specified, the
9
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 application shall be deemed approved. The department shall
2 approve the application if the department finds that:
3 1. The applicant satisfies the requirements of
4 paragraph (b).
5 2. No evidence exists that the applicant has committed
6 any act specified in paragraph (d).
7 3. At least two of the principals have a minimum of 5
8 years of experience making venture capital investments out of
9 private equity funds, with not less than $20 million being
10 provided by third-party investors for investment in the early
11 stage of operating businesses. At least one full-time manager
12 or principal of the certified capital company who has such
13 experience must be primarily located in an office of the
14 certified capital company which is based in this state.
15 4. The applicant's proposed method of doing business
16 and raising certified capital as described in its offering
17 materials and other materials submitted to the department
18 conforms with the requirements of this act.
19 (d) The department may deny certification or decertify
20 a certified capital company if the grounds for decertification
21 are not removed or corrected within 90 days after the notice
22 of such grounds is received by the certified capital company.
23 The department may deny certification or decertify a certified
24 capital company if the certified capital company fails to
25 maintain a net worth of at least $500,000, or if the
26 department determines that the applicant, or any principal or
27 director of the certified capital company, has:
28 1. Violated any provision of this section;
29 2. Made a material misrepresentation or false
30 statement or concealed any essential or material fact from any
31 person during the application process or with respect to
10
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 information and reports required of certified capital
2 companies under this section;
3 3. Been convicted of, or entered a plea of guilty or
4 nolo contendere to, a crime against the laws of this state or
5 any other state or of the United States or any other country
6 or government, including a fraudulent act in connection with
7 the operation of a certified capital company, or in connection
8 with the performance of fiduciary duties in another capacity;
9 4. Been adjudicated liable in a civil action on
10 grounds of fraud, embezzlement, misrepresentation, or deceit;
11 or
12 5.a. Been the subject of any decision, finding,
13 injunction, suspension, prohibition, revocation, denial,
14 judgment, or administrative order by any court of competent
15 jurisdiction, administrative law judge, or any state or
16 federal agency, national securities, commodities, or option
17 exchange, or national securities, commodities, or option
18 association, involving a material violation of any federal or
19 state securities or commodities law or any rule or regulation
20 adopted under such law, or any rule or regulation of any
21 national securities, commodities, or options exchange, or
22 national securities, commodities, or options association; or
23 b. Been the subject of any injunction or adverse
24 administrative order by a state or federal agency regulating
25 banking, insurance, finance or small loan companies, real
26 estate, mortgage brokers, or other related or similar
27 industries.
28 (e) The certified capital company shall file a copy of
29 its certification with the office by January 31, 1999.
30 (e)(f) Any offering material involving the sale of
31 securities of the certified capital company shall include the
11
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 following statement: "By authorizing the formation of a
2 certified capital company, the State of Florida does not
3 endorse the quality of management or the potential for
4 earnings of such company and is not liable for damages or
5 losses to a certified investor in the company. Use of the
6 word 'certified' in an offering does not constitute a
7 recommendation or endorsement of the investment by the State
8 of Florida. Investments in a certified capital company prior
9 to the time such company is certified are not eligible for
10 premium tax credits. If applicable provisions of law are
11 violated, the state may require forfeiture of unused premium
12 tax credits and repayment of used premium tax credits by the
13 certified investor."
14 (f)(g) No insurance company or any affiliate of an
15 insurance company shall, directly or indirectly, own (whether
16 through rights, options, convertible interests, or otherwise)
17 10 percent or more of the equity interests of or manage or
18 control the direction of investments of a certified capital
19 company or have, through ownership or any agreement or
20 understanding, the right to participate in 10 percent or more
21 of the profits of a certified capital company. This
22 prohibition does not preclude a certified investor, insurance
23 company, or any other party from exercising its legal rights
24 and remedies, which may include interim management of a
25 certified capital company, if a certified capital company is
26 in default of its obligations under law or its contractual
27 obligations to such certified investor, insurance company, or
28 other party.
29 (g)(h) On or before December 31 of each year, each
30 certified capital company shall pay to the department an
31 annual, nonrefundable renewal certification fee of $5,000. If
12
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 a certified capital company fails to pay its renewal fee by
2 the specified deadline, the company must pay a late fee of
3 $5,000 in addition to the renewal fee on or by January 31 of
4 each year in order to continue its certification in the
5 program. On or before April 30 of each year, each certified
6 capital company shall file audited financial statements with
7 the department. No renewal fees shall be required within 6
8 months after the date of initial certification.
9 (h)(i) The department shall administer and provide for
10 the enforcement of certification requirements for certified
11 capital companies as provided in this act. The department may
12 adopt any rules necessary to carry out its duties,
13 obligations, and powers related to certification, renewal of
14 certification, or decertification of certified capital
15 companies and may perform any other acts necessary for the
16 proper administration and enforcement of such duties,
17 obligations, and powers.
18 (i)(j) Decertification of a certified capital company
19 under this subsection does not affect the ability of certified
20 investors in such certified capital company from claiming
21 future premium tax credits earned as a result of an investment
22 in the certified capital company during the period in which it
23 was duly certified.
24 (5) INVESTMENTS BY CERTIFIED CAPITAL COMPANIES.--
25 (a) To remain certified, a certified capital company
26 must make qualified investments according to the following
27 schedule:
28 1. At least 20 percent of its certified capital must
29 be invested in qualified investments by December 31, 2000, or,
30 in the case of certified capital raised under Program Two, by
31 December 31, 2003.
13
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 2. At least 30 percent of its certified capital must
2 be invested in qualified investments by December 31, 2001, or,
3 in the case of certified capital raised under Program Two, by
4 December 31, 2004.
5 3. At least 40 percent of its certified capital must
6 be invested in qualified investments by December 31, 2002, or,
7 in the case of certified capital raised under Program Two, by
8 December 31, 2005.
9 4. At least 50 percent of its certified capital must
10 be invested in qualified investments by December 31, 2003, or,
11 in the case of certified capital raised under Program Two, by
12 December 31, 2006. At least 50 percent of such qualified
13 investments must be invested in early stage technology
14 businesses.
15 (6) PREMIUM TAX CREDIT; AMOUNT; LIMITATIONS.--
16 (a) Any certified investor who makes an investment of
17 certified capital shall earn a vested credit against premium
18 tax liability equal to 100 percent of the certified capital
19 invested by the certified investor. Certified investors shall
20 be entitled to use no more than 10 percentage points of the
21 vested premium tax credit earned under a particular program,
22 including any carryforward credits from such program under
23 this act, per year beginning with premium tax filings for
24 calendar year 2000 for credits earned under Program One and
25 calendar year 2003 for credits earned under Program Two. Any
26 premium tax credits not used by certified investors in any
27 single year may be carried forward and applied against the
28 premium tax liabilities of such investors for subsequent
29 calendar years. The carryforward credit may be applied
30 against subsequent premium tax filings through calendar year
31 2017.
14
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 (7) ANNUAL TAX CREDIT; MAXIMUM AMOUNT; ALLOCATION
2 PROCESS.--
3 (a) The total amount of tax credits which may be
4 allocated by the office shall not exceed $150 million with
5 respect to Program One and $250 million with respect to
6 Program Two. The total amount of tax credits which may be used
7 by certified investors under this act shall not exceed $15
8 million annually with respect to credits earned under Program
9 One and $25 million annually with respect to credits earned
10 under Program Two.
11 (c) Each certified capital company must apply to the
12 office for an allocation of premium tax credits for potential
13 certified investors by March 15, 1999, or by March 15, 2002,
14 in the case of credits allocable under Program Two, on a form
15 developed by the office with the cooperation of the Department
16 of Revenue. The form shall be accompanied by an affidavit
17 from each potential certified investor confirming that the
18 potential certified investor has agreed to make an investment
19 of certified capital in a certified capital company up to a
20 specified amount, subject only to the receipt of a premium tax
21 credit allocation pursuant to this subsection. No allocation
22 shall be made to the potential investors of a certified
23 capital company under Program Two unless such certified
24 capital company has filed premium tax allocation claims that
25 would result in an allocation to the potential investors in
26 such certified capital company of not less than $15 million in
27 the aggregate.
28 (d) On or before April 1, 1999, or April 1, 2002, in
29 the case of Program Two, the office shall inform each
30 certified capital company of its share of total premium tax
31
15
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 credits available for allocation to each of its potential
2 investors.
3 (e) If a certified capital company does not receive
4 certified capital equaling the amount of premium tax credits
5 allocated to a potential certified investor for which the
6 investor filed a premium tax allocation claim within 10
7 business days after the investor received a notice of
8 allocation, the certified capital company shall notify the
9 office by overnight common carrier delivery service of the
10 company's failure to receive the capital. That portion of the
11 premium tax credits allocated to the certified capital company
12 shall be forfeited. The department may levy a fine of not more
13 than $50,000 on any certified investor that does not invest
14 the full amount of certified capital allocated by the
15 department to such investor in accordance with the affidavit
16 filed on its behalf. If the office must make a pro rata
17 allocation under paragraph (f), the office shall reallocate
18 such available credits among the other certified capital
19 companies on the same pro rata basis as the initial
20 allocation.
21 (f) If the total amount of capital committed by all
22 certified investors to certified capital companies in premium
23 tax allocation claims under Program Two exceeds the aggregate
24 cap on the amount of credits that may be awarded under Program
25 Two, the premium tax credits that may be allowed to any one
26 certified investor under Program Two shall be allocated using
27 the following ratio:
28
29 A/B = X/$250,000,000
30 A/B = X/$150,000,000
31
16
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 where the letter "A" represents the total amount of certified
2 capital certified investors have agreed to invest in any one
3 certified capital company under Program Two, the letter "B"
4 represents the aggregate amount of certified capital that all
5 certified investors have agreed to invest in all certified
6 capital companies under Program Two, the letter "X" is the
7 numerator and represents the total amount of premium tax
8 credits and certified capital that may be allocated to a
9 certified capital company after April 1, 2002 in calendar year
10 1999, and $250 $150 million is the denominator and represents
11 the total amount of premium tax credits and certified capital
12 that may be allocated to all certified investors in calendar
13 year 2002 1999. Any such premium tax credits are not first
14 available for utilization until annual filings are made in
15 2001 for calendar year 2000 in the case of Program One, and
16 until annual filings are made in 2004 for calendar year 2003
17 in the case of Program Two, and the tax credits may be used at
18 a rate not to exceed 10 percent annually per program.
19 (g) The maximum amount of certified capital for which
20 premium tax allocation claims may be filed on behalf of any
21 certified investor and its affiliates by one or more certified
22 capital companies may not exceed $15 million with respect to
23 Program One and $25 million with respect to Program Two.
24 (h) To the extent that less than $250 $150 million in
25 certified capital is raised in connection with the procedure
26 set forth in paragraphs (c)-(g), the department may adopt
27 rules to allow a subsequent allocation of the remaining
28 premium tax credits authorized under this section.
29 (8) ANNUAL TAX CREDIT; CLAIM PROCESS.--
30 (a) On an annual basis, on or before January December
31 31, each certified capital company shall file with the
17
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 department and the office, in consultation with the
2 department, on a form prescribed by the office, for each
3 calendar year:
4 1. The total dollar amount the certified capital
5 company received from certified investors, the identity of the
6 certified investors, and the amount received from each
7 certified investor during the immediately preceding calendar
8 year.
9 2. The total dollar amount the certified capital
10 company invested and the amount invested in qualified
11 businesses, together with the identity and location of those
12 businesses and the amount invested in each qualified business
13 during the immediately preceding calendar year.
14 3. For informational purposes only, the total number
15 of permanent, full-time jobs either created or retained by the
16 qualified business during the immediately preceding calendar
17 year, the average wage of the jobs created or retained, the
18 industry sectors in which the qualified businesses operate,
19 and any additional capital invested in qualified businesses
20 from sources other than certified capital companies.
21 (9) REQUIREMENT FOR 100 PERCENT INVESTMENT; STATE
22 PARTICIPATION.--
23 (a) A certified capital company may make qualified
24 distributions at any time. In order to make a distribution to
25 its equity holders, other than a qualified distribution out of
26 funds related to a particular program, a certified capital
27 company must have invested an amount cumulatively equal to 100
28 percent of its certified capital raised under such program in
29 qualified investments. Payments to debt holders of a certified
30 capital company, however, may be made without restriction with
31 respect to repayments of principal and interest on
18
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 indebtedness owed to them by a certified capital company,
2 including indebtedness of the certified capital company on
3 which certified investors earned premium tax credits. A debt
4 holder that is also a certified investor or equity holder of a
5 certified capital company may receive payments with respect to
6 such debt without restrictions.
7 (b) Cumulative distributions from a certified capital
8 company out of funds related to a particular program to its
9 certified investors and equity holders under such program,
10 other than qualified distributions, in excess of the certified
11 capital company's original certified capital raised under such
12 program and any additional capital contributions to the
13 certified capital company with respect to such program may be
14 audited by a nationally recognized certified public accounting
15 firm acceptable to the department, at the expense of the
16 certified capital company, if the department directs such
17 audit be conducted. The audit shall determine whether
18 aggregate cumulative distributions from the funds related to a
19 particular program made by the certified capital company to
20 all certified investors and equity holders under such program,
21 other than qualified distributions, have equaled the sum of
22 the certified capital company's original certified capital
23 raised under such program and any additional capital
24 contributions to the certified capital company with respect to
25 such program. If at the time of any such distribution made by
26 the certified capital company, such distribution taken
27 together with all other such distributions from the funds
28 related to such program made by the certified capital company,
29 other than qualified distributions, exceeds in the aggregate
30 the sum of the certified capital company's original certified
31 capital raised under such program and any additional capital
19
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 contributions to the certified capital company with respect to
2 such program, as determined by the audit, the certified
3 capital company shall pay to the Department of Revenue 10
4 percent of the portion of such distribution in excess of such
5 amount. Payments to the Department of Revenue by a certified
6 capital company pursuant to this paragraph shall not exceed
7 the aggregate amount of tax credits used by all certified
8 investors in such certified capital company for such program.
9 (10) DECERTIFICATION.--
10 (f) Decertification of a certified capital company for
11 failure to meet all requirements for continued certification
12 under paragraph (5)(a) with respect to the certified capital
13 raised under a particular program may cause the recapture of
14 premium tax credits previously claimed by such company under
15 such program and the forfeiture of future premium tax credits
16 to be claimed by certified investors under such program with
17 respect to such certified capital company, as follows:
18 1. Decertification of a certified capital company
19 within 3 years after its certification date with respect to a
20 particular program shall cause the recapture of all premium
21 tax credits earned under such program and previously claimed
22 by such company and the forfeiture of all future premium tax
23 credits earned under such program which are to be claimed by
24 certified investors with respect to such company.
25 2. When a certified capital company meets all
26 requirements for continued certification under subparagraph
27 (5)(a)1. with respect to certified capital raised under a
28 particular program and subsequently fails to meet the
29 requirements for continued certification under the provisions
30 of subparagraph (5)(a)2. with respect to certified capital
31 raised under such program, those premium tax credits earned
20
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 under such program which have been or will be taken by
2 certified investors within 3 years after the certification
3 date of the certified capital company with respect to such
4 program shall not be subject to recapture or forfeiture;
5 however, all premium tax credits earned under such program
6 that have been or will be taken by certified investors after
7 the third anniversary of the certification date of the
8 certified capital company for such program shall be subject to
9 recapture or forfeiture.
10 3. When a certified capital company meets all
11 requirements for continued certification under subparagraphs
12 (5)(a)1. and 2. with respect to a particular program and
13 subsequently fails to meet the requirements for continued
14 certification under the subparagraph (5)(a)3. with respect to
15 such program, those premium tax credits earned under such
16 program which have been or will be taken by certified
17 investors within 4 years after the certification date of the
18 certified capital company with respect to such program shall
19 not be subject to recapture or forfeiture; however, all
20 premium tax credits earned under such program that have been
21 or will be taken by certified investors after the fourth
22 anniversary of the certification date of the certified capital
23 company with respect to such program shall be subject to
24 recapture and forfeiture.
25 4. If a certified capital company has met all
26 requirements for continued certification under paragraph
27 (5)(a) with respect to certified capital raised under a
28 particular program, but such company is subsequently
29 decertified, those premium tax credits earned under such
30 program which have been or will be taken by certified
31 investors within 5 years after the certification date of such
21
CODING: Words stricken are deletions; words underlined are additions.
Florida House of Representatives - 2001 CS/HB 293
197-340-01
1 company with respect to such program shall not be subject to
2 recapture or forfeiture. Those premium tax credits earned
3 under such program and to be taken subsequent to the 5th year
4 of certification with respect to such program shall be subject
5 to forfeiture only if the certified capital company is
6 decertified within 5 years after its certification date with
7 respect to such program.
8 5. If a certified capital company has invested an
9 amount cumulatively equal to 100 percent of its certified
10 capital raised under a particular program in qualified
11 investments, all premium tax credits claimed or to be claimed
12 by its certified investors under such program shall not be
13 subject to recapture or forfeiture.
14 Section 2. This act shall take effect July 1, 2001.
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
22
CODING: Words stricken are deletions; words underlined are additions.