Florida Senate - 2010                             CS for SB 1992
       By the Committee on Commerce; and Senator Ring
       577-04347-10                                          20101992c1
    1                        A bill to be entitled                      
    2         An act relating to Florida ports investments; creating
    3         s. 311.23, F.S.; providing a short title; providing a
    4         purpose; providing definitions; creating the Florida
    5         Ports Investment Corporation; subjecting the
    6         corporation to certain public-meetings and public
    7         records requirements; providing authority and
    8         requirements for the corporation; providing for a
    9         board of directors; providing for appointment of board
   10         members; providing for investments by the corporation
   11         in certain port projects; providing port project
   12         funding criteria; providing requirements for capital
   13         allocation and investments; providing requirements for
   14         certain uninvested capital; providing requirements for
   15         investments; providing for a premium tax credit;
   16         providing for carryforward of the credit; providing
   17         limitations on the credit; providing limitations on
   18         the amount of tax credits; providing investment
   19         requirements; providing procedures, requirements, and
   20         limitations for transfers of unused credits;
   21         authorizing the corporation and the Office of Tourism,
   22         Trade, and Economic Development to charge certain
   23         fees; providing reporting requirements; authorizing
   24         the Department of Revenue and the office to adopt
   25         rules; amending s. 213.053, F.S.; authorizing the
   26         Department of Revenue to provide certain information
   27         to the office; providing an effective date.
   29  Be It Enacted by the Legislature of the State of Florida:
   31         Section 1. Section 311.23, Florida Statutes, is created to
   32  read:
   33         311.23 Florida Ports Investment Act.—
   34         (1) SHORT TITLE.—This section may be cited as the “Florida
   35  Ports Investment Act.”
   36         (2) PURPOSE.—The primary purpose of this section is to
   37  stimulate a substantial increase in the state’s port
   38  infrastructure by providing an incentive for investment in new
   39  or expanding port and port-related projects. The increase in
   40  investment capital flowing into new or expanding port activities
   41  and businesses is intended to contribute to employment growth,
   42  create jobs that exceed the average wage for the county in which
   43  the jobs are located, and expand or diversify the economic base
   44  of this state.
   45         (3) DEFINITIONS.—As used in this section, the term:
   46         (a) “Corporation” means the Florida Ports Investment
   47  Corporation created under subsection (4).
   48         (b) “Investment capital” means an investment of cash by a
   49  participating investor in the corporation in exchange for the
   50  tax credits provided in this section.
   51         (c) “Office” means the Office of Tourism, Trade, and
   52  Economic Development.
   53         (d) “Participating investor” means any qualified investor
   54  subject to the Internal Revenue Code and that contributes
   55  investment capital pursuant to this section.
   56         (e) “Premium tax liability” means any liability incurred by
   57  an insurance company under s. 624.509.
   58         (f) “Qualified port project” means the ports listed in s.
   59  403.021(9)(b) or any associated business or project that uses
   60  those ports for the movement of goods and people, as determined
   61  by the corporation.
   64         (a) The Florida Ports Investment Corporation is created as
   65  a corporation not for profit, to be incorporated under the
   66  provisions of chapter 617, and registered with the Department of
   67  State as a Florida entity. The Legislature determines that
   68  public policy dictates that the corporation operate in the most
   69  open and accessible manner consistent with its public purpose.
   70  Therefore, the Legislature specifically declares that the
   71  corporation and its advisory company are subject to the public
   72  records and meetings requirements of chapters 119 and 286.
   73         (b) The corporation:
   74         1. May receive, hold, invest, and administer funds and make
   75  expenditures consistent with the purposes of this section.
   76         2. May make purchases, sales, exchanges, investments, and
   77  reinvestments for and on behalf of the funds received pursuant
   78  to this section.
   79         3. Maintain all official records related to its activities.
   80         4. Shall retain, pursuant to the provisions of s. 287.055,
   81  at least one investment advisory company domiciled in the state
   82  of Florida, with at least 5 years of experience in working with
   83  investors seeking tax credits or other debt-driven instruments,
   84  to assist the corporation in carrying out the provisions of this
   85  section.
   86         5. Shall timely provide the office with information about
   87  its participating investors and the amount of their investments
   88  to assist the office in awarding the available tax credits, and
   89  a list of certified port projects.
   90         6. Shall assist the office in developing the required
   91  annual report in subsection (10).
   92         (c) The corporation shall be governed by a board of
   93  directors comprised of:
   94         1. The director of the office, who shall serve as the
   95  chair.
   96         2. Two members appointed by the Governor, two members
   97  appointed by the President of the Senate, and two members
   98  appointed by the Speaker of the House of Representatives. These
   99  appointed members must have significant experience in
  100  international business, transportation, law, or logistics.
  101  Appointed members are subject to any restrictions on conflicts
  102  of interest specified in the organizational documents of the
  103  corporation and may not have any interest in any investments
  104  made by the corporation pursuant to subsection (5).
  105         3. The chair of the Florida Seaport Transportation and
  106  Economic Development Council.
  107         4. The Secretary of Transportation.
  108         5. Each appointed member shall be appointed for a term of 4
  109  years. A vacancy on the board shall be filled by the appointing
  110  official for the member whose vacancy is to be filled or whose
  111  term has expired. An appointed member may be removed by the
  112  appointing official for that member, for cause. Absence from
  113  three consecutive meetings shall result in automatic removal.
  114  Any appointed member is eligible for reappointment.
  115         6. Members of the board shall serve without compensation,
  116  but may be reimbursed for all reasonable, necessary, and actual
  117  expenses as determined and approved by the board pursuant to s.
  118  112.061.
  121         (a)1. The corporation shall seek to maintain the economic
  122  competitiveness of Florida’s ports and their related import and
  123  export industries by funding projects that increase the ports’
  124  capacity to handle freight; are consistent with approved seaport
  125  master plans; and improve economic productivity for the state or
  126  the region in which projects are located. Also eligible for
  127  investment capital under this section are on-port projects that
  128  are eligible for federal financial assistance consistent with
  129  criteria developed for federal freight transportation grant
  130  programs, including, but not limited to, the Transportation
  131  Investment Generating Economic Recovery (TIGER), Projects of
  132  National and Regional Significance (PNRS), National
  133  Infrastructure Investment (NII), and the National Corridor
  134  Infrastructure Improvement (NCII) program.
  135         2. The capital received under this section shall be
  136  allocated to eligible projects commencing by July 1, 2012, or
  137  held in accordance with paragraph (b).
  138         3. Funding for such projects shall be on a matching basis
  139  as determined by the corporation, except that at least 25
  140  percent of total project funds must come from port funds, local
  141  funds, private funds, or federal funds.
  142         (b) The corporation shall hold all capital that is received
  143  under this section and that is not invested in qualified port
  144  projects, and such capital:
  145         1. Must be held in a financial institution as defined by s.
  146  655.005(1)(h) or held by a broker-dealer registered under s.
  147  517.12.
  148         2. Must be invested only in:
  149         a. United States Treasury obligations;
  150         b. Certificates of deposit or other obligations, maturing
  151  within 3 years after acquisition of such certificates or
  152  obligations, issued by any financial institution or trust
  153  company incorporated under the laws of the United States;
  154         c. Marketable obligations, maturing within 5 years or less
  155  after the acquisition of such obligations, which are rated “A”
  156  or better by any nationally recognized credit rating agency; or
  157         d. Interests in money market funds, the portfolio of which
  158  is limited to cash and obligations described in sub
  159  subparagraphs a.-c.
  160         (c) All investment decisions shall be made by the
  161  corporation, which must certify that each project is of a
  162  beneficial nature to a port listed in s. 403.021(9)(b); is ready
  163  to proceed within 60 days for design, construction, and
  164  permitting; and will create a lasting economic impact as
  165  determined by the board. Applications for funding by qualified
  166  port projects must be made to the corporation. The board, in
  167  consultation with the office, may establish procedural rules for
  168  the application form, application procedures, and criteria for
  169  making investment decisions based upon the requirements
  170  established in this paragraph.
  172         (a) Any participating investor who makes an investment of
  173  investment capital shall earn a vested credit against premium
  174  tax liability equal to 100 percent of the face amount of the
  175  credits purchased by the participating investor and such
  176  investments may not be subject to recapture, disallowance,
  177  forfeiture, or reduction.
  178         (b) Participating investors shall be entitled to use no
  179  more than 10 percentage points of the vested premium tax credit,
  180  including any carryforward credits under this section, per year
  181  beginning with premium tax filings for calendar year 2013.
  182         (c) Any premium tax credits not used by participating
  183  investors in any single year may be carried forward and applied
  184  against the premium tax liabilities of such investors for
  185  subsequent calendar years. The carryforward credit may be
  186  applied against subsequent premium tax filings through calendar
  187  year 2029.
  188         (d) The credit to be applied against premium tax liability
  189  in any single year may not exceed the premium tax liability of
  190  the participating investor for that taxable year.
  191         (e) A participating investor claiming a credit against
  192  premium tax liability earned through an investment in the
  193  corporation, or a transferee, is not required to pay any
  194  additional retaliatory tax levied pursuant to s. 624.5091 as a
  195  result of claiming such credit. Because credits under this
  196  section are available to a participating investor, s. 624.5091
  197  does not limit such credit in any manner.
  199         (a) The total amount of tax credits which may be allocated
  200  by the office may not exceed $100 million. The total amount of
  201  tax credits which may be used by participating investors under
  202  this section may not exceed $10 million annually.
  203         (b) The office shall be responsible for allocating premium
  204  tax credits as provided for in this section to participating
  205  investors. A participating investor must submit an application
  206  to the office for the tax credit authorized in this section.
  207         (8) TRANSFER OF TAX CREDITS.—
  208         (a) Upon application to and approval by the office, a
  209  participating investor may elect to transfer, in whole or in
  210  part, any unused credit amount granted under this section. The
  211  office shall notify the Department of Revenue of the election
  212  and transfer.
  213         (b) A participating investor that elects to apply a credit
  214  amount against taxes remitted under s. 624.509 is permitted a
  215  one-time transfer of unused credits to one transferee, and such
  216  transfer must occur in the same taxable year.
  217         (c) The transferee is subject to the same rights and
  218  limitations as the participating investor awarded the tax
  219  credit, except that the transferee may not sell or otherwise
  220  transfer the tax credit.
  223         (a) Audit authority.—The Department of Revenue may conduct
  224  examinations and audits as provided in s. 213.34 to verify that
  225  tax credits under this section are received, transferred, and
  226  applied according to the requirements of this section. If the
  227  Department of Revenue determines that tax credits are not
  228  received, transferred, or applied as required by this section,
  229  it may, in addition to the remedies provided in this subsection,
  230  pursue recovery of such funds pursuant to the laws and rules
  231  governing the assessment of taxes.
  232         (b) Revocation of tax credits.—The office may revoke or
  233  modify any written decision qualifying, certifying, or otherwise
  234  granting eligibility for tax credits under this section if it is
  235  discovered that the tax credit applicant submitted any false
  236  statement, representation, or certification in any application,
  237  record, report, plan, or other document filed in an attempt to
  238  receive tax credits under this section. The office shall
  239  immediately notify the Department of Revenue of any revoked or
  240  modified orders affecting previously granted tax credits.
  241  Additionally, the applicant must notify the Department of
  242  Revenue of any change in its tax credit claimed.
  243         (c) Forfeiture of tax credits.—A determination by the
  244  Department of Revenue, as a result of an audit or examination by
  245  the Department of Revenue or from information received from the
  246  office, that an applicant received tax credits pursuant to this
  247  section to which the applicant was not entitled is grounds for
  248  forfeiture of previously claimed and received tax credits. The
  249  applicant is responsible for returning forfeited tax credits to
  250  the Department of Revenue, and such funds shall be paid into the
  251  General Revenue Fund of the state. Tax credits purchased in good
  252  faith are not subject to forfeiture unless the transferee
  253  submitted fraudulent information in the purchase or otherwise
  254  failed to meet the requirements of this section.
  255         (d) Fraudulent claims.—Any applicant that submits
  256  fraudulent information under this section is liable for
  257  reimbursement of the reasonable costs and fees associated with
  258  the review, processing, investigation, and prosecution of the
  259  fraudulent claim. An applicant that obtains a credit payment
  260  under this section through a claim that is fraudulent is liable
  261  for reimbursement of the credit amount plus a penalty in an
  262  amount double the credit amount. The penalty is in addition to
  263  any criminal penalty to which the applicant is liable for the
  264  same acts. The applicant is also liable for costs and fees
  265  incurred by the state in investigating and prosecuting the
  266  fraudulent claim.
  267         (10) REPORTING REQUIREMENTS.—Beginning February 1, 2013,
  268  and every year thereafter, the office shall report on an annual
  269  basis to the Governor, the President of the Senate, and the
  270  Speaker of the House of Representatives:
  271         (a) The total dollar amount received by the corporation
  272  from all participating investors and any other investor, the
  273  identity of the participating investors, and the total amount of
  274  premium tax credit used by each participating investor for the
  275  previous calendar year.
  276         (b) The total dollar amount invested by the corporation in
  277  qualified port projects, the identity and location of those
  278  projects, the amount invested in each qualified port project,
  279  and the total number of permanent, full-time jobs created or
  280  retained by each qualified port project.
  281         (c) The return for the state as a result of the investments
  282  in qualified port projects, including the extent to which:
  283         1. Investments have contributed to employment growth.
  284         2. The wage level of businesses in which the corporation
  285  has invested exceeds the average wage for the county in which
  286  the jobs are located.
  287         3. The investments of the corporation in qualified port
  288  projects have contributed to expanding or diversifying the
  289  economic base of the state.
  290         (11) FEES.—The corporation may charge reasonable fees for
  291  administering and processing applications by qualified port
  292  projects for funding pursuant to paragraph (5)(c), and the
  293  office may charge reasonable fees for administering and
  294  processing applications by participating investors for tax
  295  credits pursuant to subsection (7). Any fee charged by the
  296  corporation or office under this subsection for an application
  297  may not exceed the actual cost incurred by the corporation or
  298  office in administering and processing any application for
  299  funding or a tax credit.
  300         (12) RULEMAKING AUTHORITY.—
  301         (a) The Department of Revenue may adopt rules pursuant to
  302  ss. 120.536(1) and 120.54 to administer this section, including,
  303  but not limited to, rules governing the examination and audit
  304  procedures required to administer this section and the manner
  305  and form of documentation required to claim tax credits awarded
  306  or transferred under this section.
  307         (b) The office may adopt rules pursuant to ss. 120.536(1)
  308  and 120.54 and develop procedures to administer this section,
  309  including, but not limited to, rules specifying requirements for
  310  the application and approval process, records required for
  311  substantiation for tax credits, and the manner and form of
  312  documentation required to claim tax credits awarded or
  313  transferred under this section.
  314         Section 2. Paragraph (z) is added to subsection (8) of
  315  section 213.053, Florida Statutes, to read:
  316         213.053 Confidentiality and information sharing.—
  317         (8) Notwithstanding any other provision of this section,
  318  the department may provide:
  319         (z) Information relating to tax credits taken under s.
  320  624.509 to the Office of Tourism, Trade, and Economic
  321  Development.
  323  Disclosure of information under this subsection shall be
  324  pursuant to a written agreement between the executive director
  325  and the agency. Such agencies, governmental or nongovernmental,
  326  shall be bound by the same requirements of confidentiality as
  327  the Department of Revenue. Breach of confidentiality is a
  328  misdemeanor of the first degree, punishable as provided by s.
  329  775.082 or s. 775.083.
  330         Section 3. This act shall take effect July 1, 2010.