Senate Bill sb1938c1

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    Florida Senate - 2005                           CS for SB 1938

    By the Committee on Commerce and Consumer Services; and
    Senators Sebesta and Saunders


  1                      A bill to be entitled

  2         An act relating to aerospace; creating s.

  3         196.1999, F.S.; providing for an exemption from

  4         ad valorem taxes for certain space

  5         laboratories; providing for the exemption to

  6         apply retroactively to January 1, 2005;

  7         repealing s. 196.1994, F.S., which expired

  8         effective July 1, 2004, and which provided an

  9         exemption from ad valorem taxes for certain

10         space laboratories; creating ss. 331.501,

11         331.502, 331.503, 331.504, 331.505, 331.506,

12         and 331.507, F.S.; providing a popular name;

13         creating the Florida Aerospace Infrastructure

14         Act; providing legislative findings and intent;

15         providing definitions; creating the Florida

16         Aerospace Infrastructure Investment Program

17         within the Florida Aerospace Finance

18         Corporation; providing purposes; providing for

19         funding the program; requiring the corporation

20         to administer the program; providing

21         requirements; providing the corporation with

22         investment authorizations, criteria,

23         requirements, and limitations; creating the

24         Independent Investment Committee within the

25         corporation; providing purposes of the

26         committee; providing for appointment of

27         committee members and criteria; providing for

28         terms; requiring members to serve without

29         compensation; providing for per diem and travel

30         expenses; providing committee responsibilities;

31         specifying tax-exempt status of the


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    Florida Senate - 2005                           CS for SB 1938

 1         corporation; exempting the corporation from all

 2         state and local taxes; providing an exception;

 3         requiring the corporation to prepare and submit

 4         annual reports; providing for severability;

 5         providing an appropriation; providing effective

 6         dates.


 8  Be It Enacted by the Legislature of the State of Florida:


10         Section 1.  Effective upon this act becoming a law and

11  applying retroactively to January 1, 2005, section 196.1999,

12  Florida Statutes, is created to read:

13         196.1999  Space laboratories and carriers

14  exemption.--Notwithstanding other provisions of this chapter,

15  a module, pallet, rack, locker, and any necessary associated

16  hardware and subsystem, owned by any person and intended to be

17  used to transport or store cargo used for a space laboratory

18  for the primary purpose of conducting scientific research in

19  space, is deemed to carry out a scientific purpose and is

20  exempt from ad valorem taxation.

21         Section 2.  Section 196.1994, Florida Statutes, is

22  repealed.

23         Section 3.  Sections 331.501, 331.502, 331.503,

24  331.504, 331.505, 331.506, and 331.507, Florida Statutes, are

25  created to read:

26         331.501  Florida Aerospace Infrastructure Act; popular

27  name.--Sections 331.501-331.507 may be cited as the "Florida

28  Aerospace Infrastructure Act."

29         331.502  Legislative findings and intent.--The

30  Legislature finds that there is a critical need for capital

31  assistance to aerospace business expansion and economic


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    Florida Senate - 2005                           CS for SB 1938

 1  development opportunities in this state, as well as enhancing

 2  the financing of needed new aerospace infrastructure in this

 3  state. The aerospace industry in this state could be assisted

 4  by a program established to invest in projects proposed by

 5  state and private sector entities which provide a clear

 6  economic benefit to the state and which support the growth of

 7  the employment and technology base of the aerospace industry

 8  in this state. It is the intention of the Legislature to

 9  provide much-needed funding to support the growth of the

10  aerospace industry and related high technology industry in

11  this state.

12         331.503  Definitions.--For the purposes of ss.

13  331.501-331.507, the term:

14         (1)  "Aerospace industry" means the industry concerned

15  with the design and manufacture of aircraft, rockets,

16  missiles, spacecraft, satellites, space vehicles, space

17  stations, or space facilities, or components thereof, and

18  equipment, systems, facilities, simulators, programs, and

19  activities related thereto.

20         (2)  "Board" means the governing board of the Florida

21  Aerospace Finance Corporation.

22         (3)  "Committee" means the Independent Investment

23  Committee created in s. 331.505 to provide investment

24  recommendations to the corporation for implementation.

25         (4)  "Corporation" means the Florida Aerospace Finance

26  Corporation created by s. 331.407.

27         (5)  "Dealer" means an entity conducting business at a

28  fixed location at the Kennedy Space Center or the Cape

29  Canaveral Air Force Station that sells admissions to

30  attractions or tours at such facility pursuant to a contract



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    Florida Senate - 2005                           CS for SB 1938

 1  or subcontract with the National Aeronautics and Space

 2  Administration.

 3         (6)  "Program" means the Florida Aerospace

 4  Infrastructure Program created in s. 331.504.

 5         331.504  Florida Aerospace Infrastructure Program.--

 6         (1)  The Florida Aerospace Infrastructure Program is

 7  created within the Florida Aerospace Finance Corporation to

 8  finance needed industry expansion and infrastructure projects

 9  that may be proposed by the state's space partnerships, the

10  aerospace industry, or the sponsor of any aerospace-related

11  economic development or technology investment activity

12  involving aerospace business expansion and job retention. The

13  program shall support the growth of the aerospace industry and

14  related high-technology industries in this state.

15         (2)  Grants from the Florida Aerospace Infrastructure

16  Investment Trust Fund, if established by law, shall be used to

17  fund the program. The Department of Revenue shall transfer

18  from the General Revenue Fund to the Florida Aerospace

19  Infrastructure Investment Fund those sales taxes on tangible

20  personal property, admissions, tours, and leases or licenses

21  of real property generated by dealers conducting business at

22  the Kennedy Space Center and the Cape Canaveral Air Force

23  Station pursuant to ss. 212.04(1)(a), 212.05, and

24  212.031(1)(a). Each dealer shall file a return each month with

25  the Department of Revenue with segregated tax information

26  regarding taxes collected on sales, admissions, tours, leases,

27  and licenses. The Department of Revenue shall be subject to

28  the same confidentiality provisions as are applicable to

29  returns and information filed with it, pursuant to s. 213.053.

30         (3)  The corporation shall administer the program with

31  recommendations from the committee, subject to adequate due


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    Florida Senate - 2005                           CS for SB 1938

 1  diligence and adherence to investment policies and procedures

 2  of the corporation.

 3         (4)  The corporation shall ensure that:

 4         (a)  Investment recommendations are implemented in

 5  accordance with the board's policies and procedures.

 6         (b)  An investment reserve account for future

 7  investment requirements is established to receive deposits

 8  from the Office of Tourism, Trade, and Economic Development.

 9         (c)  The portfolio of the fund is monitored and a

10  quarterly report is provided to the committee, the

11  corporation, Enterprise Florida, Inc., and the Office of

12  Tourism, Trade, and Economic Development.

13         (5)(a)  The corporation may provide direct loans, loan

14  guarantees, direct grants for advancement of intellectual

15  property, and other investment participation as necessary to

16  ensure success of total financings undertaken.

17         (b)  Investment proposals may not be made for operating

18  expenses for any state activity, but shall be directed to the

19  development of aerospace infrastructure, technology, and

20  intellectual property that advances the capabilities of the

21  aerospace industry in this state.

22         (c)  The corporation shall seek co-investors in any

23  investment transaction the corporation makes, ensuring that

24  the corporation is not the sole investor in the transaction.

25  The corporation may waive this provision if investment

26  circumstances warrant such waiver.

27         (d)  The corporation shall not commit more than 20

28  percent of the funds in the investment pool to any single

29  investment.

30         (e)  The corporation shall endeavor to leverage the

31  investment pool through use of loan guarantee capabilities of


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    Florida Senate - 2005                           CS for SB 1938

 1  the Small Business Administration and other state and federal

 2  guarantee sources.

 3         (f)  The corporation shall be reimbursed for reasonable

 4  costs of investment and fund administration, including legal,

 5  accounting, and other costs necessary to carry out its

 6  responsibilities in conducting due diligence and which are not

 7  otherwise reimbursed by the companies seeking or receiving

 8  investment, as well as those administrative costs incurred by

 9  the corporation in providing administrative services to the

10  committee.

11         (g)  The corporation may not pledge or represent that

12  the corporation is authorized to pledge the full faith and

13  credit of the state.

14         (h)  The corporation shall adopt policies and

15  procedures necessary to carry out its responsibilities under

16  ss. 331.501-331.507, particularly with respect to the fund's

17  responsibilities in direct lending, loan support, or direct

18  grant or capital investment for projects approved for support

19  by the fund. These policies shall be adopted prior to the

20  expenditure of funds from grants for the program by the Office

21  of Tourism, Trade, and Economic Development.

22         (i)  The corporation shall develop an application and

23  review process for investment proposals submitted for

24  consideration by the committee.

25         (j)  The corporation shall ensure that the program is

26  open to aerospace entities that are domiciled in this state or

27  are establishing facilities and infrastructure in the state

28  resulting in employment and economic benefit to this state.

29         331.505  Independent Investment Committee.--

30         (1)  The Independent Investment Committee is created

31  within the Florida Aerospace Finance Corporation.


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    Florida Senate - 2005                           CS for SB 1938

 1         (2)  The purpose of the committee is to receive

 2  proposals from any of this state's space partnerships,

 3  entities involved in economic development activities, or

 4  Florida-based aerospace corporations to finance projects

 5  through the program, as well as to recommend criteria for

 6  investment proposals to be submitted to the committee,

 7  recommend evaluation criteria for the committee, and review

 8  and recommend investments to be made through the program by

 9  the corporation.

10         (3)(a)  The committee shall consist of five voting

11  members as follows:

12         1.  One representative or designee appointed by each of

13  the following:

14         a.  The board of supervisors of the Florida Space

15  Authority.

16         b.  The board of directors of Enterprise Florida, Inc.

17         c.  The board of directors of the Florida Aerospace

18  Finance Corporation.

19         2.  Two representatives of the aerospace industry

20  appointed by the other three entities represented on the

21  committee.

22         (b)  Each voting member shall serve a 3-year term and,

23  except for the initial terms, which shall begin upon

24  appointment and terminate on June 30, 2008, shall begin on

25  July 1. Members appointed pursuant to subparagraph (a)1. shall

26  serve at the pleasure of the appointing authority. Members

27  appointed pursuant to subparagraph (a)2. shall serve at the

28  pleasure of the Governor. Initial appointments shall be made

29  no later than 60 days after July 1, 2005.

30         (c)  Persons appointed pursuant to paragraph (a), if

31  employed full time by any entity that applies for financial


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    Florida Senate - 2005                           CS for SB 1938

 1  support, must disclose their related interest and recuse

 2  themselves from voting on that project.

 3         (d)  All members must be residents of the state.

 4         (e)  All members must have an investment, banking, or

 5  aerospace industry background.

 6         (f)  Committee members shall serve without compensation

 7  but are entitled to reimbursement for travel and per diem

 8  expenses in accordance with policies and procedures

 9  established by the corporation's board and s. 112.061 for

10  necessary expenses in the performance of their duties,

11  including attending board meetings and conducting board

12  business.

13         (4)  The committee shall:

14         (a)  Review and recommend investments in projects

15  proposed by state space partnerships, economic development

16  organizations, and private sector entities which have a clear

17  economic benefit to the state and which support growth of its

18  aerospace industry employment and technology base as well as

19  enhancing aerospace infrastructure projects in this state.

20         (b)  Review progress information reports resulting from

21  projects approved for support by the corporation.

22         (c)  Recommend and assist the corporation in reviewing,

23  drafting, and executing any contracts or other instruments

24  necessary for the corporation to exercise its powers.

25         (d)  Recommend policies and procedures with respect to

26  setting criteria for investment proposals to be submitted to

27  the fund, evaluation criteria for the fund, monitoring

28  requirements, and investment and approval guidelines for all

29  investments to be made through the program.

30         (e)  Ensure that each proposed project is judged on the

31  merit of the project, its perceived need, and the investment


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    Florida Senate - 2005                           CS for SB 1938

 1  return, benefit, or overall value to the aerospace industry

 2  capability in this state.

 3         (f)  Assess, as part of its recommendation process,

 4  whether investment returns or value and capital preservation

 5  objectives exist for each recommended investment.

 6         (g)  Review whether appropriate investment and

 7  retention of the program's capital base or other benefits are

 8  realized through the investments of the program, except in the

 9  case of a grant or equity investment, which shall be made

10  based on value received by the program.

11         331.506  Florida Aerospace Finance Corporation;

12  tax-exempt status.--The Florida Aerospace Finance Corporation,

13  as created by s. 331.407, is granted tax-exempt status. The

14  corporation is not required to pay taxes on any project or

15  other property owned by the corporation or upon any resulting

16  income. All notes, mortgages, security agreements, letters of

17  credit, or other instruments that arise out of or are given to

18  secure the payment of debt issued in conjunction with a

19  project financed under the corporation's authority are also

20  free from taxation by the state or any other local unit,

21  political subdivision, or instrumentality of the state. The

22  tax exemption granted is not applicable to taxes imposed on

23  interest, income, or profits on debt obligations owned by the

24  corporation.

25         331.507  Annual report.--By September 30 of each year,

26  the corporation shall submit to the Governor, the President of

27  the Senate, the Speaker of the House of Representatives, the

28  Senate Minority Leader, and the House Minority Leader a

29  complete and detailed report in accordance with s. 331.419 and

30  setting forth:



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    Florida Senate - 2005                           CS for SB 1938

 1         (1)  An evaluation of its activities and

 2  recommendations for change.

 3         (2)  The program's impact on the participation of

 4  private banks and other private organizations and individuals

 5  in the corporation's financing programs, and other economic

 6  and social benefits to businesses in this state.

 7         (3)  The program's assets and liabilities at the end of

 8  its most recent fiscal year.

 9         Section 4.  If any provision of this act or its

10  application to any person or circumstance is held invalid, the

11  invalidity does not affect other provisions or applications of

12  this act which can be given effect without the invalid

13  provision or application, and, to this end, the provisions of

14  this act are declared severable.

15         Section 5.  The sum of $4.1 million is appropriated

16  from the Florida Aerospace Infrastructure Trust Fund to fund

17  the Florida Aerospace Infrastructure Program.

18         Section 6.  Except as otherwise expressly provided in

19  this act and except for this section, which shall take effect

20  upon becoming a law, this act shall take effect July 1, 2005.













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    Florida Senate - 2005                           CS for SB 1938

                       COMMITTEE SUBSTITUTE FOR
 2                         Senate Bill 1938


 4  The committee substitute differs from the bill in that it:

 5  -    Clarifies that the ad valorem tax exemption applies to
         storage components used to transport or store cargo used
 6       for a space laboratory, which is used for scientific
    -    Creates the Florida Aerospace Infrastructure Investment
 8       Program, rather than the Florida Aerospace Infrastructure
         Investment Fund, to be funded by the Florida Aerospace
 9       Infrastructure Investment Trust Fund, which is created in
         CS/SB 2078;
    -    Specifies that the Department of Revenue must transfer
11       from General Revenue sales tax on tangible personal
         property, admissions, tours, leases or license of real
12       property, generated by dealers at Kennedy Space Center
         and Cape Canaveral Air Force Station, to the trust fund;
    -    Requires each dealer to file a monthly return with DOR
14       with segregated tax information;

15  -    Removes the requirement that the corporation and OPPAGA
         develop goals and objectives to provide the Governor and
16       the Legislature with a quantitative evaluation of the
    -    Provides a severability clause; and
    -    Provides an appropriation of $4.1 million from the trust
19       fund to the program.














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