HB 1817

1	A bill to be entitled
2	An act relating to review under the Open Government Sunset
3	Review Act; amending s. 288.99, F.S., the "Certified
4	Capital Company Act"; removing the October 2, 2005, repeal
5	of information relating to an active investigation or
6	office review of a certified capital company scheduled
7	under the Open Government Sunset Review Act; narrowing the
8	exemption; eliminating the exemption from public records
9	requirements for social security numbers of any customers
10	of a certified capital company, complainants, or persons
11	associated with a certified capital company or qualified
12	business; eliminating references to specified premium tax
13	credits under the act designated as "Program One" and
14	"Program Two"; providing editorial and conforming changes;
15	providing for the future repeal of the Certified Capital
16	Company Act; providing an effective date.
17
18	Be It Enacted by the Legislature of the State of Florida:
19
20	Section 1.  Section 288.99, Florida Statutes, is amended to
21	read:
22	288.99  Certified Capital Company Act.--
23	(1)  SHORT TITLE.--This section may be cited as the
24	"Certified Capital Company Act."
25	(2)  PURPOSE.--The primary purpose of this act is to
26	stimulate a substantial increase in venture capital investments
27	in this state by providing an incentive for insurance companies
28	to invest in certified capital companies in this state which, in
29	turn, will make investments in new businesses or in expanding
30	businesses, including minority-owned or minority-operated
31	businesses and businesses located in a designated Front Porch
32	community, enterprise zone, urban high-crime area, rural job tax
33	credit county, or nationally recognized historic district. The
34	increase in investment capital flowing into new or expanding
35	businesses is intended to contribute to employment growth,
36	create jobs which exceed the average wage for the county in
37	which the jobs are created, and expand or diversify the economic
38	base of this state.
39	(3)  DEFINITIONS.--As used in this section, the term:
40	(a)  "Affiliate of an insurance company" means:
41	1.  Any person directly or indirectly beneficially owning,
42	whether through rights, options, convertible interests, or
43	otherwise, controlling, or holding power to vote 15 percent or
44	more of the outstanding voting securities or other voting
45	ownership interests of the insurance company;
46	2.  Any person 15 percent or more of whose outstanding
47	voting securities or other voting ownership interest is directly
48	or indirectly beneficially owned, whether through rights,
49	options, convertible interests, or otherwise, controlled, or
50	held with power to vote by the insurance company;
51	3.  Any person directly or indirectly controlling,
52	controlled by, or under common control with the insurance
53	company;
54	4.  A partnership in which the insurance company is a
55	general partner; or
56	5.  Any person who is a principal, director, employee, or
57	agent of the insurance company or an immediate family member of
58	the principal, director, employee, or agent.
59	(b)  "Certified capital" means an investment of cash by a
60	certified investor in a certified capital company which fully
61	funds the purchase price of either or both its equity interest
62	in the certified capital company or a qualified debt instrument
63	issued by the certified capital company.
64	(c)  "Certified capital company" means a corporation,
65	partnership, or limited liability company which:
66	1.  Is certified by the office in accordance with this act.
67	2.  Receives investments of certified capital from two or
68	more unaffiliated certified investors.
69	3.  Makes qualified investments as its primary activity.
70	(d)  "Certified investor" means any insurance company
71	subject to premium tax liability pursuant to s. 624.509 that
72	invests certified capital.
73	(e)  "Commission" means the Financial Services Commission.
74	(f)  "Early stage technology business" means a qualified
75	business that is:
76	1.  Involved, at the time of the certified capital
77	company's initial investment in such business, in activities
78	related to developing initial product or service offerings, such
79	as prototype development or the establishment of initial
80	production or service processes;
81	2.  Less than 2 years old and has, together with its
82	affiliates, less than $3 million in annual revenues for the
83	fiscal year immediately preceding the initial investment by the
84	certified capital company on a consolidated basis, as determined
85	in accordance with generally accepted accounting principles;
86	3.  The Florida Black Business Investment Board;
87	4.  Any entity that is majority owned by the Florida Black
88	Business Investment Board; or
89	5.  Any entity in which the Florida Black Business
90	Investment Board holds a majority voting interest on the board
91	of directors.
92	(g)  "Office" means the Office of Financial Regulation of
93	the commission.
94	(h)  "Premium tax liability" means any liability incurred
95	by an insurance company under the provisions of ss. 624.509 and
96	624.5091.
97	(i)  "Principal" means an executive officer of a
98	corporation, partner of a partnership, manager of a limited
99	liability company, or any other person with equivalent executive
100	functions.
101	(j)  "Qualified business" means the Digital Divide Trust
102	Fund established under the State of Florida Technology Office or
103	a business that meets the following conditions as evidenced by
104	documentation required by commission rule:
105	1.  The business is headquartered in this state and its
106	principal business operations are located in this state or at
107	least 75 percent of the employees are employed in the state.
108	2.  At the time a certified capital company makes an
109	initial investment in a business, the business would qualify for
110	investment under 13 C.F.R. s. 121.301(c), which is involved in
111	manufacturing, processing or assembling products, conducting
112	research and development, or providing services.
113	3.  At the time a certified capital company makes an
114	initial investment in a business, the business certifies in an
115	affidavit that:
116	a.  The business is unable to obtain conventional
117	financing, which means that the business has failed in an
118	attempt to obtain funding for a loan from a bank or other
119	commercial lender or that the business cannot reasonably be
120	expected to qualify for such financing under the standards of
121	commercial lending;
122	b.  The business plan for the business projects that the
123	business is reasonably expected to achieve in excess of $25
124	million in sales revenue within 5 years after the initial
125	investment, or the business is located in a designated Front
126	Porch community, enterprise zone, urban high crime area, rural
127	job tax credit county, or nationally recognized historic
128	district;
129	c.  The business will maintain its headquarters in this
130	state for the next 10 years and any new manufacturing facility
131	financed by a qualified investment will remain in this state for
132	the next 10 years, or the business is located in a designated
133	Front Porch community, enterprise zone, urban high crime area,
134	rural job tax credit county, or nationally recognized historic
135	district; and
136	d.  The business has fewer than 200 employees and at least
137	75 percent of the employees are employed in this state. For
138	purposes of this subsection, the term also includes the Florida
139	Black Business Investment Board, any entity majority owned by
140	the Florida Black Business Investment Board, or any entity in
141	which the Florida Black Business Investment Board holds a
142	majority voting interest on the board of directors.
143	4.  The term does not include:
144	a.  Any business predominantly engaged in retail sales,
145	real estate development, insurance, banking, lending, or oil and
146	gas exploration.
147	b.  Any business predominantly engaged in professional
148	services provided by accountants, lawyers, or physicians.
149	c.  Any company that has no historical revenues and either
150	has no specific business plan or purpose or has indicated that
151	its business plan is solely to engage in a merger or acquisition
152	with any unidentified company or other entity.
153	d.  Any company that has a strategic plan to grow through
154	the acquisition of firms with substantially similar business
155	which would result in the planned net loss of Florida-based jobs
156	over a 12-month period after the acquisition as determined by
157	the office.
158	(k)  "Qualified debt instrument" means a debt instrument,
159	or a hybrid of a debt instrument, issued by a certified capital
160	company, at par value or a premium, with an original maturity
161	date of at least 5 years after the date of issuance, a repayment
162	schedule which is no faster than a level principal amortization
163	over a 5-year period, and interest, distribution, or payment
164	features which are not related to the profitability of the
165	certified capital company or the performance of the certified
166	capital company's investment portfolio.
167	(l)  "Qualified distribution" means any distribution or
168	payment by a certified capital company for:
169	1.  Reasonable costs and expenses, including, but not
170	limited to, professional fees, of forming and syndicating the
171	certified capital company, if no such costs or expenses are paid
172	to a certified investor, except as provided in subparagraph
173	(4)(f)2., and the total cash, cash equivalents, and other
174	current assets permitted by sub-subparagraph (5)(b)3.g. that can
175	be converted into cash within 5 business days available to the
176	certified capital company at the time of receipt of certified
177	capital from certified investors, after deducting the costs and
178	expenses of forming and syndicating the certified capital
179	company, including any payments made over time for obligations
180	incurred at the time of receipt of certified capital but
181	excluding other future qualified distributions and payments made
182	under paragraph (9)(a), are an amount equal to or greater than
183	50 percent of the total certified capital allocated to the
184	certified capital pursuant to subsection (7);
185	2.  Reasonable costs of managing and operating the
186	certified capital company, not exceeding 5 percent of the
187	certified capital in any single year, including an annual
188	management fee in an amount that does not exceed 2.5 percent of
189	the certified capital of the certified capital company;
190	3.  Reasonable and necessary fees in accordance with
191	industry custom for professional services, including, but not
192	limited to, legal and accounting services, related to the
193	operation of the certified capital company; or
194	4.  Any projected increase in federal or state taxes,
195	including penalties and interest related to state and federal
196	income taxes, of the equity owners of a certified capital
197	company resulting from the earnings or other tax liability of
198	the certified capital company to the extent that the increase is
199	related to the ownership, management, or operation of a
200	certified capital company.
201	(m)1.  "Qualified investment" means the investment of cash
202	by a certified capital company in a qualified business for the
203	purchase of any debt, equity, or hybrid security, including a
204	debt instrument or security that has the characteristics of debt
205	but which provides for conversion into equity or equity
206	participation instruments such as options or warrants.
207	2.  The term does not include:
208	a.  Any investment made after the effective date of this
209	act the contractual terms of which require the repayment of any
210	portion of the principal in instances, other than default as
211	determined by commission rule, within 12 months following the
212	initial investment by the certified capital company unless such
213	investment has a repayment schedule no faster than a level
214	principal amortization of at least 2 years;
215	b.  Any "follow-on" or "add-on" investment except for the
216	amount by which the new investment is in addition to the amount
217	of the certified capital company's initial investment returned
218	to it other than in the form of interest, dividends, or other
219	types of profit participation or distributions; or
220	c.  Any investment in a qualified business or affiliate of
221	a qualified business that exceeds 15 percent of certified
222	capital.
223	(n)  "Program One" means the $150 million in premium tax
224	credits issued under this section in 1999, the allocation of
225	such credits under this section, and the regulation of certified
226	capital companies and investments made by them hereunder.
227	(o)  "Program Two" means the $150 million in premium tax
228	credits to be issued under subsection (17), the allocation of
229	such credits under this section, and the regulation of certified
230	capital companies and investments made by them hereunder.
231	(4)  CERTIFICATION; GROUNDS FOR DENIAL OR
232	DECERTIFICATION.--
233	(a)  To operate as a certified capital company, a
234	corporation, partnership, or limited liability company must be
235	certified by the Department of Banking and Finance or the office
236	pursuant to this act.
237	(b)  An applicant for certification as a certified capital
238	company must file a verified application with the Department of
239	Banking and Finance on or before December 1, 1998, a date
240	determined in rules adopted pursuant to subsection (17) in the
241	case of applicants for Program Two, in a form which the
242	commission may prescribe by rule. The applicant shall submit a
243	nonrefundable application fee of $7,500 to the office. The
244	applicant shall provide:
245	1.  The name of the applicant and the address of its
246	principal office and each office in this state.
247	2.  The applicant's form and place of organization and the
248	relevant organizational documents, bylaws, and amendments or
249	restatements of such documents, bylaws, or amendments.
250	3.  Evidence from the Department of State that the
251	applicant is registered with the Department of State as required
252	by law, maintains an active status with the Department of State,
253	and has not been dissolved or had its registration revoked,
254	canceled, or withdrawn.
255	4.  The applicant's proposed method of doing business.
256	5.  The applicant's financial condition and history,
257	including an audit report on the financial statements prepared
258	in accordance with generally accepted accounting principles. The
259	applicant must have, at the time of application for
260	certification, an equity capitalization of at least $500,000 in
261	the form of cash or cash equivalents. The applicant must
262	maintain this equity capitalization until the applicant receives
263	an allocation of certified capital pursuant to this act. If the
264	date of the application is more than 90 days after preparation
265	of the applicant's fiscal year-end financial statements, the
266	applicant may file financial statements reviewed by an
267	independent certified public accountant for the period
268	subsequent to the audit report, together with the audited
269	financial statement for the most recent fiscal year. If the
270	applicant has been in business less than 12 months, and has not
271	prepared an audited financial statement, the applicant may file
272	a financial statement reviewed by an independent certified
273	public accountant.
274	6.  Copies of any offering materials used or proposed to be
275	used by the applicant in soliciting investments of certified
276	capital from certified investors.
277	(c)  Within 60 days after receipt of a verified
278	application, the office shall grant or deny certification as a
279	certified capital company. If the office denies certification
280	within the time period specified, the office shall inform the
281	applicant of the grounds for the denial. If the office has not
282	granted or denied certification within the time specified, the
283	application shall be deemed approved. The office shall approve
284	the application if the office finds that:
285	1.  The applicant satisfies the requirements of paragraph
286	(b).
287	2.  No evidence exists that the applicant has committed any
288	act specified in paragraph (d).
289	3.  At least two of the principals have a minimum of 5
290	years of experience making venture capital investments out of
291	private equity funds, with not less than $20 million being
292	provided by third-party investors for investment in the early
293	stage of operating businesses. At least one full-time manager or
294	principal of the certified capital company who has such
295	experience must be primarily located in an office of the
296	certified capital company which is based in this state.
297	4.  The applicant's proposed method of doing business and
298	raising certified capital as described in its offering materials
299	and other materials submitted to the office conforms with the
300	requirements of this section.
301	(d)  The office may deny certification or decertify a
302	certified capital company if the grounds for decertification are
303	not removed or corrected within 90 days after the notice of such
304	grounds is received by the certified capital company. The office
305	may deny certification or decertify a certified capital company
306	if the certified capital company fails to maintain common stock
307	or paid-in capital of at least $500,000, or if the office
308	determines that the applicant, or any principal or director of
309	the certified capital company, has:
310	1.  Violated any provision of this section;
311	2.  Made a material misrepresentation or false statement or
312	concealed any essential or material fact from any person during
313	the application process or with respect to information and
314	reports required of certified capital companies under this
315	section;
316	3.  Been convicted of, or entered a plea of guilty or nolo
317	contendere to, a crime against the laws of this state or any
318	other state or of the United States or any other country or
319	government, including a fraudulent act in connection with the
320	operation of a certified capital company, or in connection with
321	the performance of fiduciary duties in another capacity;
322	4.  Been adjudicated liable in a civil action on grounds of
323	fraud, embezzlement, misrepresentation, or deceit; or
324	5.a.  Been the subject of any decision, finding,
325	injunction, suspension, prohibition, revocation, denial,
326	judgment, or administrative order by any court of competent
327	jurisdiction, administrative law judge, or any state or federal
328	agency, national securities, commodities, or option exchange, or
329	national securities, commodities, or option association,
330	involving a material violation of any federal or state
331	securities or commodities law or any rule or regulation adopted
332	under such law, or any rule or regulation of any national
333	securities, commodities, or options exchange, or national
334	securities, commodities, or options association; or
335	b.  Been the subject of any injunction or adverse
336	administrative order by a state or federal agency regulating
337	banking, insurance, finance or small loan companies, real
338	estate, mortgage brokers, or other related or similar
339	industries.
340	(e)  Any offering material involving the sale of securities
341	of the certified capital company shall include the following
342	statement: "By authorizing the formation of a certified capital
343	company, the State of Florida does not endorse the quality of
344	management or the potential for earnings of such company and is
345	not liable for damages or losses to a certified investor in the
346	company. Use of the word 'certified' in an offering does not
347	constitute a recommendation or endorsement of the investment by
348	the State of Florida. Investments in a certified capital company
349	prior to the time such company is certified are not eligible for
350	premium tax credits. If applicable provisions of law are
351	violated, the state may require forfeiture of unused premium tax
352	credits and repayment of used premium tax credits by the
353	certified investor."
354	(f)1.  No insurance company or any affiliate of an
355	insurance company shall, directly or indirectly, own, whether
356	through rights, options, convertible interests, or otherwise, 15
357	percent or more of the voting equity interests of or manage or
358	control the direction of investments of a certified capital
359	company. This prohibition does not preclude a certified
360	investor, insurance company, or any other party from exercising
361	its legal rights and remedies, which may include interim
362	management of a certified capital company, if a certified
363	capital company is in default of its obligations under law or
364	its contractual obligations to such certified investor,
365	insurance company, or other party. Nothing in this subparagraph
366	shall limit an insurance company's ownership of nonvoting equity
367	interests in a certified capital company.
368	2.  A certified capital company may obtain a guaranty,
369	indemnity, bond, insurance policy or other payment undertaking
370	in favor of all of the certified investors of the certified
371	capital company and its affiliates; provided that the entity
372	from which such guaranty, indemnity, bond, insurance policy or
373	other payment undertaking is obtained may not be a certified
374	investor of, or be affiliated with more than one certified
375	investor of, the certified capital company.
376	(g)  On or before December 31 of each year, each certified
377	capital company shall pay to the office an annual, nonrefundable
378	renewal certification fee of $5,000. If a certified capital
379	company fails to pay its renewal fee by the specified deadline,
380	the company must pay a late fee of $5,000 in addition to the
381	renewal fee on or by January 31 of each year in order to
382	continue its certification in the program. On or before April 30
383	of each year, each certified capital company shall file audited
384	financial statements with the office. No renewal fees shall be
385	required within 6 months after the date of initial
386	certification.
387	(h)  The commission and office shall administer and provide
388	for the enforcement of certification requirements for certified
389	capital companies as provided in this act. The commission may
390	adopt any rules necessary to carry out its duties, obligations,
391	and powers related to certification, renewal of certification,
392	or decertification of certified capital companies and the
393	commission and office may perform any other acts necessary for
394	the proper administration and enforcement of such duties,
395	obligations, and powers.
396	(i)  Decertification of a certified capital company under
397	this subsection does not affect the ability of certified
398	investors in such certified capital company from claiming future
399	premium tax credits earned as a result of an investment in the
400	certified capital company during the period in which it was duly
401	certified.
402	(5)  INVESTMENTS BY CERTIFIED CAPITAL COMPANIES.--
403	(a)  To remain certified, a certified capital company must
404	make qualified investments according to the following schedule:
405	1.  At least 20 percent of its certified capital must be
406	invested in qualified investments by December 31, 2000.
407	2.  At least 30 percent of its certified capital must be
408	invested in qualified investments by December 31, 2001.
409	3.  At least 40 percent of its certified capital must be
410	invested in qualified investments by December 31, 2002.
411	4.  At least 50 percent of its certified capital must be
412	invested in qualified investments by December 31, 2003. At least
413	50 percent of such qualified investments must be invested in
414	early stage technology businesses.
415	(b)  All capital not invested in qualified investments by
416	the certified capital company:
417	1.  Must be held in a financial institution as defined by
418	s. 655.005(1)(h) or held by a broker-dealer registered under s.
419	517.12, except as set forth in sub-subparagraph 3.g.
420	2.  Must not be invested in a certified investor of the
421	certified capital company or any affiliate of the certified
422	investor of the certified capital company, except for an
423	investment permitted by sub-subparagraph 3.g., provided
424	repayment terms do not permit the obligor to directly or
425	indirectly manage or control the investment decisions of the
426	certified capital company.
427	3.  Must be invested only in:
428	a.  Any United States Treasury obligations;
429	b.  Certificates of deposit or other obligations, maturing
430	within 3 years after acquisition of such certificates or
431	obligations, issued by any financial institution or trust
432	company incorporated under the laws of the United States;
433	c.  Marketable obligations, maturing within 10 years or
434	less after the acquisition of such obligations, which are rated
435	"A" or better by any nationally recognized credit rating agency;
436	d.  Mortgage-backed securities, with an average life of 5
437	years or less, after the acquisition of such securities, which
438	are rated "A" or better by any nationally recognized credit
439	rating agency;
440	e.  Collateralized mortgage obligations and real estate
441	mortgage investment conduits that are direct obligations of an
442	agency of the United States Government; are not private-label
443	issues; are in book-entry form; and do not include the classes
444	of interest only, principal only, residual, or zero;
445	f.  Interests in money market funds, the portfolio of which
446	is limited to cash and obligations described in sub-
447	subparagraphs a.-d.; or
448	g.  Obligations that are issued by an insurance company
449	that is not a certified investor of the certified capital
450	company making the investment, that has provided a guarantee
451	indemnity bond, insurance policy, or other payment undertaking
452	in favor of the certified capital company's certified investors
453	as permitted by subparagraph (3)(l)1. or an affiliate of such
454	insurance company as defined by subparagraph (3)(a)3. that is
455	not a certified investor of the certified capital company making
456	the investment, provided that such obligations are:
457	(I)  Issued or guaranteed as to principal by an entity
458	whose senior debt is rated "AA" or better by Standard &
459	Poor's Ratings Group or such other nationally recognized credit
460	rating agency as the commission may by rule determine.
461	(II)  Not subordinated to other unsecured indebtedness of
462	the issuer or the guarantor.
463	(III)  Invested by such issuing entity in accordance with
464	sub-subparagraphs 3.a.-f.
465	(IV)  Readily convertible into cash within 5 business days
466	for the purpose of making a qualified investment unless such
467	obligations are held to provide a guarantee, indemnity bond,
468	insurance policy, or other payment undertaking in favor of the
469	certified capital company's certified investors as permitted by
470	subparagraph (3)(l)1.
471	(c)  The aggregate amount of all qualified investments made
472	by the certified capital company from the date of its
473	certification shall be considered in the calculation of the
474	percentage requirements under paragraph (a).
475	(6)  PREMIUM TAX CREDIT; AMOUNT; LIMITATIONS.--
476	(a)  Any certified investor who makes an investment of
477	certified capital shall earn a vested credit against premium tax
478	liability equal to 100 percent of the certified capital invested
479	by the certified investor. Certified investors shall be entitled
480	to use no more than 10 percentage points of the vested premium
481	tax credit earned under a particular program, including any
482	carryforward credits from such program under this act, per year
483	beginning with premium tax filings for calendar year 2000 for
484	credits earned under Program One. Any premium tax credits not
485	used by certified investors in any single year may be carried
486	forward and applied against the premium tax liabilities of such
487	investors for subsequent calendar years.
488	(b)  The credit to be applied against premium tax liability
489	in any single year may not exceed the premium tax liability of
490	the certified investor for that taxable year.
491	(c)  A certified investor claiming a credit against premium
492	tax liability earned through an investment in a certified
493	capital company shall not be required to pay any additional
494	retaliatory tax levied pursuant to s. 624.5091 as a result of
495	claiming such credit. Because credits under this section are
496	available to a certified investor, s. 624.5091 does not limit
497	such credit in any manner.
498	(d)  The amount of tax credits vested under the Certified
499	Capital Company Act shall not be considered in ratemaking
500	proceedings involving a certified investor.
501	(7)  ANNUAL TAX CREDIT; MAXIMUM AMOUNT; ALLOCATION
502	PROCESS.--
503	(a)  The total amount of tax credits which may be allocated
504	by the Office of Tourism, Trade, and Economic Development shall
505	not exceed $150 million with respect to Program One and $150
506	million with respect to Program Two. The total amount of tax
507	credits which may be used by certified investors under this act
508	shall not exceed $15 million annually with respect to credits
509	earned under Program One and $15 million annually with respect
510	to credits earned under Program Two.
511	(b)  The Office of Tourism, Trade, and Economic Development
512	shall be responsible for allocating premium tax credits as
513	provided for in this act to certified capital companies.
514	(c)  Each certified capital company must apply to the
515	Office of Tourism, Trade, and Economic Development for an
516	allocation of premium tax credits for potential certified
517	investors on a form developed by the Office of Tourism, Trade,
518	and Economic Development with the cooperation of the Department
519	of Revenue. The form shall be accompanied by an affidavit from
520	each potential certified investor confirming that the potential
521	certified investor has agreed to make an investment of certified
522	capital in a certified capital company up to a specified amount,
523	subject only to the receipt of a premium tax credit allocation
524	pursuant to this subsection. No certified capital company shall
525	submit premium tax allocation claims on behalf of certified
526	investors that in the aggregate would exceed the total dollar
527	amount appropriated by the Legislature for the specific program.
528	No allocation shall be made to the potential investors of a
529	certified capital company under Program Two unless such
530	certified capital company has filed premium tax allocation
531	claims of not less than $15 million in the aggregate.
532	(d)  The Office of Tourism, Trade, and Economic Development
533	shall inform each certified capital company of its share of
534	total premium tax credits available for allocation to each of
535	its potential investors.
536	(e)  If a certified capital company does not receive
537	certified capital equaling the amount of premium tax credits
538	allocated to a potential certified investor for which the
539	investor filed a premium tax allocation claim within 10 business
540	days after the investor received a notice of allocation, the
541	certified capital company shall notify the Office of Tourism,
542	Trade, and Economic Development by overnight common carrier
543	delivery service of the company's failure to receive the
544	capital. That portion of the premium tax credits allocated to
545	the certified capital company shall be forfeited. If the Office
546	of Tourism, Trade, and Economic Development must make a pro rata
547	allocation under paragraph (f), that office shall reallocate
548	such available credits among the other certified capital
549	companies on the same pro rata basis as the initial allocation.
550	(f)  If the total amount of capital committed by all
551	certified investors to certified capital companies in premium
552	tax allocation claims under Program Two exceeds the aggregate
553	cap on the amount of credits that may be awarded under Program
554	Two, the premium tax credits that may be allowed to any one
555	certified investor under Program Two shall be allocated using
556	the following ratio:
557
558	A/B = X/>$150,000,000
559
560	where the letter "A" represents the total amount of certified
561	capital certified investors have agreed to invest in any one
562	certified capital company under Program Two, the letter "B"
563	represents the aggregate amount of certified capital that all
564	certified investors have agreed to invest in all certified
565	capital companies under Program Two, the letter "X" is the
566	numerator and represents the total amount of premium tax credits
567	and certified capital that may be allocated to a certified
568	capital company on a date determined by rule adopted by the
569	commission pursuant to subsection (17), and $150 million is the
570	denominator and represents the total amount of premium tax
571	credits and certified capital that may be allocated to all
572	certified investors under Program Two. Any such premium tax
573	credits are not first available for utilization until annual
574	filings are made in 2001 for calendar year 2000 in the case of
575	Program One, and the tax credits may be used at a rate not to
576	exceed 10 percent annually per program.
577	(g)  The maximum amount of certified capital for which
578	premium tax allocation claims may be filed on behalf of any
579	certified investor and its affiliates by one or more certified
580	capital companies may not exceed $15 million for Program One and
581	$22.5 million for Program Two.
582	(h)  To the extent that less than $150 million in certified
583	capital is raised in connection with the procedure set forth in
584	paragraphs (c)-(g), the commission may adopt rules to allow a
585	subsequent allocation of the remaining premium tax credits
586	authorized under this section.
587	(i)  The Office of Tourism, Trade, and Economic Development
588	shall issue a certification letter for each certified investor,
589	showing the amount invested in the certified capital company
590	under each program. The applicable certified capital company
591	shall attest to the validity of the certification letter.
592	(8)  ANNUAL TAX CREDIT; CLAIM PROCESS.--
593	(a)  On an annual basis, on or before January 31, each
594	certified capital company shall file with the office and the
595	Office of Tourism, Trade, and Economic Development, in
596	consultation with the office, on a form prescribed by the Office
597	of Tourism, Trade, and Economic Development, for each calendar
598	year:
599	1.  The total dollar amount the certified capital company
600	received from certified investors, the identity of the certified
601	investors, and the amount received from each certified investor
602	during the immediately preceding calendar year.
603	2.  The total dollar amount the certified capital company
604	invested and the amount invested in qualified businesses,
605	together with the identity and location of those businesses and
606	the amount invested in each qualified business during the
607	immediately preceding calendar year.
608	3.  For informational purposes only, the total number of
609	permanent, full-time jobs either created or retained by the
610	qualified business during the immediately preceding calendar
611	year, the average wage of the jobs created or retained, the
612	industry sectors in which the qualified businesses operate, and
613	any additional capital invested in qualified businesses from
614	sources other than certified capital companies.
615	(b)  The form shall be verified by one or more principals
616	of the certified capital company submitting the form.
617	Verification shall be accomplished as provided in s.
618	92.525(1)(b) and subject to the provisions of s. 92.525(3).
619	(c)  The Office of Tourism, Trade, and Economic Development
620	shall review the form, and any supplemental documentation,
621	submitted by each certified capital company for the purpose of
622	verifying:
623	1.  That the businesses in which certified capital has been
624	invested by the certified capital company are in fact qualified
625	businesses, and that the amount of certified capital invested by
626	the certified capital company is as represented in the form.
627	2.  The amount of certified capital invested in the
628	certified capital company by the certified investors.
629	3.  The amount of premium tax credit available to certified
630	investors.
631	(d)  The Department of Revenue is authorized to audit and
632	examine the accounts, books, or records of certified capital
633	companies and certified investors for the purpose of
634	ascertaining the correctness of any report and financial return
635	which has been filed, and to ascertain a certified capital
636	company's compliance with the tax-related provisions of this
637	act.
638	(9)  REQUIREMENT FOR 100 PERCENT INVESTMENT; STATE
639	PARTICIPATION.--
640	(a)  A certified capital company may make qualified
641	distributions at any time. In order to make a distribution to
642	its equity holders, other than a qualified distribution from
643	funds related to a particular program, a certified capital
644	company must have invested an amount cumulatively equal to 100
645	percent of its certified capital raised under such program in
646	qualified investments. Payments to debt holders of a certified
647	capital company, however, may be made without restriction with
648	respect to repayments of principal and interest on indebtedness
649	owed to them by a certified capital company, including
650	indebtedness of the certified capital company on which certified
651	investors earned premium tax credits. A debt holder that is also
652	a certified investor or equity holder of a certified capital
653	company may receive payments with respect to such debt without
654	restrictions.
655	(b)  Cumulative distributions from a certified capital
656	company from funds related to a particular program to its
657	certified investors and equity holders under such program, other
658	than qualified distributions, in excess of the certified capital
659	company's original certified capital raised under such program
660	and any additional capital contributions to the certified
661	capital company with respect to such program may be audited by a
662	nationally recognized certified public accounting firm
663	acceptable to the office, at the expense of the certified
664	capital company, if the office directs such audit be conducted.
665	The audit shall determine whether aggregate cumulative
666	distributions from the funds related to a particular program
667	made by the certified capital company to all certified investors
668	and equity holders under such program, other than qualified
669	distributions, have equaled the sum of the certified capital
670	company's original certified capital raised under such program
671	and any additional capital contributions to the certified
672	capital company with respect to such program. If at the time of
673	any such distribution made by the certified capital company,
674	such distribution taken together with all other such
675	distributions from the funds related to such program made by the
676	certified capital company, other than qualified distributions,
677	exceeds in the aggregate the sum of the certified capital
678	company's original certified capital raised under such program
679	and any additional capital contributions to the certified
680	capital company with respect to such program, as determined by
681	the audit, the certified capital company shall pay to the
682	Department of Revenue 10 percent of the portion of such
683	distribution in excess of such amount. Payments to the
684	Department of Revenue by a certified capital company pursuant to
685	this paragraph shall not exceed the aggregate amount of tax
686	credits used by all certified investors in such certified
687	capital company for such program.
688	(10)  DECERTIFICATION.--
689	(a)  The office shall conduct an annual review of each
690	certified capital company to determine if the certified capital
691	company is abiding by the requirements of certification, to
692	advise the certified capital company as to the eligibility
693	status of its qualified investments, and to ensure that no
694	investment has been made in violation of this act. The cost of
695	the annual review shall be paid by each certified capital
696	company.
697	(b)  Nothing contained in this subsection shall be
698	construed to limit the Chief Financial Officer's or the office's
699	authority to conduct audits of certified capital companies as
700	deemed appropriate and necessary.
701	(c)  Any material violation of this section, or a finding
702	that the certified capital company or any principal or director
703	thereof has committed any act specified in paragraph (4)(d),
704	shall be grounds for decertification of the certified capital
705	company. If the office determines that a certified capital
706	company is no longer in compliance with the certification
707	requirements of this act, the office shall, by written notice,
708	inform the officers of such company that the company may be
709	subject to decertification 90 days after the date of mailing of
710	the notice, unless the deficiencies are corrected and such
711	company is again found to be in compliance with all
712	certification requirements.
713	(d)  At the end of the 90-day grace period, if the
714	certified capital company is still not in compliance with the
715	certification requirements, the office may issue a notice to
716	revoke or suspend the certification or to impose an
717	administrative fine. The office shall advise each respondent of
718	the right to an administrative hearing under chapter 120 prior
719	to final action by the office.
720	(e)  If the office revokes a certification, such revocation
721	shall also deny, suspend, or revoke the certifications of all
722	affiliates of the certified capital company.
723	(f)  Decertification of a certified capital company for
724	failure to meet all requirements for continued certification
725	under paragraph (5)(a) with respect to the certified capital
726	raised under a particular program may cause the recapture of
727	premium tax credits previously claimed by such company under
728	such program and the forfeiture of future premium tax credits to
729	be claimed by certified investors under such program with
730	respect to such certified capital company, as follows:
731	1.  Decertification of a certified capital company within 3
732	years after its certification date with respect to a particular
733	program shall cause the recapture of all premium tax credits
734	earned under such program and previously claimed by such company
735	and the forfeiture of all future premium tax credits earned
736	under such program which are to be claimed by certified
737	investors with respect to such company.
738	2.  When a certified capital company meets all requirements
739	for continued certification under subparagraph (5)(a)1. with
740	respect to certified capital raised under a particular program
741	and subsequently fails to meet the requirements for continued
742	certification under the provisions of subparagraph (5)(a)2. with
743	respect to certified capital raised under such program, those
744	premium tax credits earned under such program which have been or
745	will be taken by certified investors within 3 years after the
746	certification date of the certified capital company with respect
747	to such program shall not be subject to recapture or forfeiture;
748	however, all premium tax credits earned under such program that
749	have been or will be taken by certified investors after the
750	third anniversary of the certification date of the certified
751	capital company for such program shall be subject to recapture
752	or forfeiture.
753	3.  When a certified capital company meets all requirements
754	for continued certification under subparagraphs (5)(a)1. and 2.
755	with respect to a particular program and subsequently fails to
756	meet the requirements for continued certification under
757	subparagraph (5)(a)3. with respect to such program, those
758	premium tax credits earned under such program which have been or
759	will be taken by certified investors within 4 years after the
760	certification date of the certified capital company with respect
761	to such program shall not be subject to recapture or forfeiture;
762	however, all premium tax credits earned under such program that
763	have been or will be taken by certified investors after the
764	fourth anniversary of the certification date of the certified
765	capital company with respect to such program shall be subject to
766	recapture and forfeiture.
767	4.  If a certified capital company has met all requirements
768	for continued certification under paragraph (5)(a) with respect
769	to certified capital raised under a particular program, but such
770	company is subsequently decertified, those premium tax credits
771	earned under such program which have been or will be taken by
772	certified investors within 5 years after the certification date
773	of such company with respect to such program shall not be
774	subject to recapture or forfeiture. Those premium tax credits
775	earned under such program to be taken subsequent to the 5th year
776	of certification with respect to such program shall be subject
777	to forfeiture only if the certified capital company is
778	decertified within 5 years after its certification date with
779	respect to such program.
780	5.  If a certified capital company has invested an amount
781	cumulatively equal to 100 percent of its certified capital
782	raised under a particular program in qualified investments, all
783	premium tax credits claimed or to be claimed by its certified
784	investors under such program shall not be subject to recapture
785	or forfeiture.
786	(g)  Decertification of a certified capital company
787	pursuant to subsection (4) or this subsection does not affect
788	the ability of certified investors in such certified capital
789	company to continue to claim future premium tax credits earned
790	as an investment in the certified capital company during the
791	period in which it was duly certified.
792	(h)  The Office of Tourism, Trade, and Economic Development
793	shall send written notice to the address of each certified
794	investor whose premium tax credit has been subject to recapture
795	or forfeiture, using the address last shown on the last premium
796	tax filing.
797	(i)  The certified investor is responsible for returning to
798	the Department of Revenue any forfeited insurance premium tax
799	credits, and such funds shall be paid into the General Revenue
800	Fund of the state.
801	(j)  The certified investor shall file with the Department
802	of Revenue an amended return or such other report as the
803	commission may prescribe by rule and pay any required tax, not
804	later than 60 days after such decertification has been agreed to
805	or finally determined, whichever shall first occur.
806	(k)  A notice of deficiency may be issued:
807	1.  At any time within 5 years after the date such
808	notification is given; or
809	2.  At any time if a certified investor fails to notify the
810	Department of Revenue.
811
812	In either case, the amount of any proposed assessment set forth
813	in such notice shall be limited to the amount of any deficiency
814	resulting under this act from the recomputation of the certified
815	investor's insurance premium tax and, if applicable, its
816	retaliatory tax for the taxable year giving effect only to the
817	item or items reflected in the decertification adjustment.
818	(l)  Any certified investor who fails to report and timely
819	pay any tax due as a result of the forfeiture of its insurance
820	premium tax credit is in violation of this subsection and is
821	subject to a penalty of 10 percent of any underpayment or
822	delinquent taxes due and payable.
823	(m)  When any taxpayer fails to pay any amount due as a
824	result of the forfeiture of its insurance premium tax credit as
825	provided for in this subsection, on or before the due date as
826	specified in this subsection, interest shall be due on any
827	insurance premium or retaliatory tax deficiency resulting from
828	such forfeiture, at the rate of 12 percent per year from the due
829	date of such amended return until paid.
830	(11)  TRANSFERABILITY.--The premium tax credit established
831	pursuant to this act may be transferred or sold. The Department
832	of Revenue shall adopt rules to facilitate the transfer or sale
833	of such premium tax credits. A transfer or sale shall not affect
834	the time schedule for taking the premium tax credit as provided
835	in this act. Any premium tax credits recaptured shall be the
836	liability of the taxpayer who actually claimed the premium tax
837	credits. The claim of a transferee of a certified investor's
838	unused premium tax credit shall be permitted in the same manner
839	and subject to the same provisions and limitations of this act
840	as the original certified investor.
841	(12)  REPORTING REQUIREMENTS.--The Office of Tourism,
842	Trade, and Economic Development shall report on an annual basis
843	to the Governor, the President of the Senate, and the Speaker of
844	the House of Representatives on or before April 1:
845	(a)  The total dollar amount each certified capital company
846	received from all certified investors and any other investor,
847	the identity of the certified investors, and the total amount of
848	premium tax credit used by each certified investor for the
849	previous calendar year.
850	(b)  The total dollar amount invested by each certified
851	capital company and that portion invested in qualified
852	businesses, the identity and location of those businesses, the
853	amount invested in each qualified business, and the total number
854	of permanent, full-time jobs created or retained by each
855	qualified business.
856	(c)  The return for the state as a result of the certified
857	capital company investments, including the extent to which:
858	1.  Certified capital company investments have contributed
859	to employment growth.
860	2.  The wage level of businesses in which certified capital
861	companies have invested exceed the average wage for the county
862	in which the jobs are located.
863	3.  The investments of the certified capital companies in
864	qualified businesses have contributed to expanding or
865	diversifying the economic base of the state.
866	(13)  FEES.--All fees and charges of any nature collected
867	by the office pursuant to this act shall be paid into the State
868	Treasury and credited to the General Revenue Fund.
869	(14)  RULEMAKING AUTHORITY.--
870	(a)  The Department of Revenue may by rule prescribe forms
871	and procedures for the tax credit filings, audits, and
872	forfeiture of premium tax credits described in this section, and
873	for certified capital company payments under paragraph (9)(b).
874	(b)  The commission and the Office of Tourism, Trade, and
875	Economic Development may adopt any rules necessary to carry out
876	their respective duties, obligations, and powers related to the
877	administration, review, and reporting provisions of this section
878	and may perform any other acts necessary for the proper
879	administration and enforcement of such duties, obligations, and
880	powers.
881	(15)(a)  PUBLIC RECORDS EXEMPTION; CONFIDENTIALITY OF
882	INVESTIGATION AND REVIEW INFORMATION.--Except as otherwise
883	provided by this section, any information relating to an
884	investigation or office review of a certified capital company,
885	including any consumer complaint, is confidential and exempt
886	from the provisions of s. 119.07(1) and s. 24(a), Art. I of the
887	State Constitution until the investigation or review is complete
888	or ceases to be active. Such information shall remain
889	confidential and exempt from the provisions of s. 119.07(1) and
890	s. 24(a), Art. I of the State Constitution after the
891	investigation or review is complete or ceases to be active if
892	the information is submitted to any law enforcement or
893	administrative agency for further investigation, and shall
894	remain confidential and exempt from the provisions of s.
895	119.07(1) and s. 24(a), Art. I of the State Constitution until
896	that agency's investigation is complete or ceases to be active.
897	For purposes of this subsection, an investigation or review
898	shall be considered "active" so long as the office, a law
899	enforcement agency, or an administrative agency is proceeding
900	with reasonable dispatch and has a reasonable good faith belief
901	that the investigation may lead to the filing of an
902	administrative, civil, or criminal proceeding. This section
903	shall not be construed to prohibit disclosure of information
904	which is required by law to be filed with the office and which,
905	but for the investigation, would otherwise be subject to s.
906	119.07(1).
907	(b)  Except as necessary to enforce the provisions of this
908	chapter, a consumer complaint or information relating to an
909	investigation or review shall remain confidential and exempt
910	from s. 119.07(1) and s. 24(a), Art. I of the State Constitution
911	after an investigation or review is complete or ceases to be
912	active to the extent disclosure would:
913	1.  Reveal a trade secret as defined in s. 688.002 or s.
914	812.081.
915	2.  Jeopardize the integrity of another active
916	investigation or review.
917	3.  Disclose the identity of a confidential source. or
918	4.  Disclose investigative techniques or procedures.
919	(c)  Nothing in this section shall be construed to prohibit
920	the office from providing information to any law enforcement or
921	administrative agency. Any law enforcement or administrative
922	agency receiving such confidential and exempt information in
923	connection with its official duties shall maintain the
924	confidential and exempt status confidentiality of the
925	information so long as it would otherwise be confidential and
926	exempt from s. 119.07(1) and s. 24(a), Art. I of the State
927	Constitution.
928	(d)  In the event office personnel are or have been
929	involved in an investigation or review of such nature as to
930	endanger their lives or physical safety or that of their
931	families, the home addresses, telephone numbers, places of
932	employment, and photographs of such personnel, together with the
933	home addresses, telephone numbers, photographs, and places of
934	employment of spouses and children of such personnel and the
935	names and locations of schools and day care facilities attended
936	by the children of such personnel are confidential and exempt
937	from s. 119.07(1).
938	(e)  All information obtained by the office from any person
939	which is only made available to the office on a confidential or
940	similarly restricted basis shall be confidential and exempt from
941	s. 119.07(1). This exemption shall not be construed to prohibit
942	disclosure of information which is specifically required by law
943	to be filed with the office or which is otherwise subject to s.
944	119.07(1).
945	(f)  If information subject to this subsection is offered
946	in evidence in any administrative, civil, or criminal
947	proceeding, the presiding officer may, in his or her discretion,
948	prevent the disclosure of information which would be
949	confidential pursuant to paragraph (b).
950	(16)  CIVIL LIABILITY.--(g)  A privilege against civil
951	liability is granted to a person with regard to information or
952	evidence furnished to the office, unless such person acts in bad
953	faith or with malice in providing such information or evidence.
954	(17)  This section shall stand repealed December 31, 2010.
955	(h)  This subsection is subject to the Open Government
956	Sunset Review Act of 1995 in accordance with s. 119.15, and
957	shall stand repealed on October 2, 2005, unless reviewed and
958	saved from repeal through reenactment by the Legislature.
959	(16)  CONFIDENTIALITY OF SOCIAL SECURITY NUMBERS.--The
960	social security number of any customer of a certified capital
961	company, complainant, or person associated with a certified
962	capital company or qualified business, is exempt from s.
963	119.07(1). This subsection is subject to the Open Government
964	Sunset Review Act of 1995 in accordance with s. 119.15, and
965	shall stand repealed on October 2, 2005, unless reviewed and
966	saved from repeal through reenactment by the Legislature.
967	(17)  Notwithstanding the limitations set forth in
968	paragraph (7)(a), in the first fiscal year in which the total
969	insurance premium tax collections as determined by the Revenue
970	Estimating Conference exceed collections for fiscal year 2000-
971	2001 by more than the total amount of tax credits issued
972	pursuant to this section which were used by certified investors
973	in that year, the Office of Tourism, Trade, and Economic
974	Development may allocate to certified investors in accordance
975	with paragraph (7)(a) tax credits for Program Two. The
976	commission shall establish, by rule, a date and procedures by
977	which certified capital companies must file applications for
978	allocations of such additional premium tax credits, which date
979	shall be no later than 180 days from the date of determination
980	by the Revenue Estimating Conference. With respect to new
981	certified capital invested and premium tax credits earned
982	pursuant to this subsection, the schedule specified in
983	subparagraphs (5)(a)1.-4. is satisfied by investments by
984	December 31 of the 2nd, 3rd, 4th, and 5th calendar year,
985	respectively, after the date established by the commission for
986	applications of additional premium tax credits. The commission
987	shall adopt rules by which an entity not already certified as a
988	certified capital company may apply for certification as a
989	certified capital company for participation in this additional
990	allocation. The insurance premium tax credit authorized by
991	Program Two may not be used by certified investors until the
992	annual return due March 1, 2004, and may be used on all
993	subsequent returns and estimated payments; however,
994	notwithstanding the provisions of s. 624.5092(2)(b), the
995	installments of taxes due and payable on April 15, 2004, and
996	June 15, 2004, shall be based on the net tax due in 2003 not
997	taking into account credits granted pursuant to this section for
998	Program Two.
999	Section 2.  This act shall take effect upon becoming a law.

CODING: Words stricken are deletions; words underlined are additions.