1 | A bill to be entitled |
2 | An act relating to capital formation for infrastructure |
3 | projects; amending ss. 288.9621, 288.9622, and 288.9623, |
4 | F.S.; conforming a short title, revising legislative |
5 | findings and intent, and providing definitions for the |
6 | Florida Capital Formation Act; conforming cross- |
7 | references; creating s. 288.9627, F.S.; providing for |
8 | creation of the Florida Infrastructure Fund Partnership; |
9 | providing the partnership's purpose and duties; providing |
10 | for management of the partnership by the Florida |
11 | Opportunity Fund; authorizing the fund to lend moneys to |
12 | the partnership; requiring the partnership to raise funds |
13 | from investment partners; providing for commitment |
14 | agreements with and issuance of certificates to investment |
15 | partners; authorizing the partnership to invest in certain |
16 | infrastructure projects; requiring the partnership to |
17 | submit an annual report to the Governor and Legislature; |
18 | prohibiting the partnership from pledging the credit or |
19 | taxing power of the state or its political subdivisions; |
20 | prohibiting the partnership from investing in projects |
21 | with or accepting investments from certain companies; |
22 | creating s. 288.9628, F.S.; creating the Florida |
23 | Infrastructure Investment Trust; providing for powers and |
24 | duties, a board of trustees, and an administrative officer |
25 | of the trust; providing for the trust's issuance of |
26 | certificates to investment partners; specifying that the |
27 | certificates guarantee the availability of tax credits |
28 | under certain conditions; authorizing the trust and the |
29 | fund to charge fees; limiting the amount of tax credits |
30 | that may be claimed or applied against state taxes in any |
31 | year; providing for the redemption of certificates or sale |
32 | of tax credits; providing for the issuance of the tax |
33 | credits by the Department of Revenue; specifying the taxes |
34 | against which the credits may be applied; limiting the |
35 | period within which tax credits may be used; providing for |
36 | the state's obligation for use of the tax credits; |
37 | limiting the liability of the fund; providing for the |
38 | transferability of certificates and tax credits; requiring |
39 | the department to provide a certain written assurance to |
40 | the trust under certain circumstances; specifying that |
41 | certain provisions regulating securities transactions do |
42 | not apply to certificates and tax credits transferred or |
43 | sold under the act; amending s. 213.053, F.S.; authorizing |
44 | the department to disclose certain information to the |
45 | partnership and the trust relative to certain tax credits; |
46 | providing an effective date. |
47 |
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48 | Be It Enacted by the Legislature of the State of Florida: |
49 |
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50 | Section 1. Section 288.9621, Florida Statutes, is amended |
51 | to read: |
52 | 288.9621 Short title.-This part Sections 288.9621-288.9625 |
53 | may be cited as the "Florida Capital Formation Act." |
54 | Section 2. Subsections (1) and (2) of section 288.9622, |
55 | Florida Statutes, are amended to read: |
56 | 288.9622 Findings and intent.- |
57 | (1) The Legislature finds and declares that there is a |
58 | need to increase the availability of seed capital and early |
59 | stage venture equity capital for emerging companies in the |
60 | state, including, without limitation, enterprises in life |
61 | sciences, information technology, advanced manufacturing |
62 | processes, aviation and aerospace, and homeland security and |
63 | defense, as well as other strategic technologies and |
64 | infrastructure funding. |
65 | (2) It is the intent of the Legislature that this part ss. |
66 | 288.9621-288.9625 serve to mobilize private investment in a |
67 | broad variety of venture capital partnerships in diversified |
68 | industries and geographies; retain private sector investment |
69 | criteria focused on rate of return; use the services of highly |
70 | qualified managers in the venture capital industry regardless of |
71 | location; facilitate the organization of the Florida Opportunity |
72 | Fund as an investor in seed and early stage businesses, |
73 | infrastructure projects, venture capital funds, infrastructure |
74 | funds, and angel funds; and precipitate capital investment and |
75 | extensions of credit to and in the Florida Opportunity Fund. |
76 | Section 3. Section 288.9623, Florida Statutes, is amended |
77 | to read: |
78 | 288.9623 Definitions.-As used in this part, the term ss. |
79 | 288.9621-288.9625: |
80 | (1) "Board" means the board of directors of the Florida |
81 | Opportunity Fund. |
82 | (2) "Certificate" means a contract between the trust and |
83 | an investment partner that guarantees the availability of tax |
84 | credits for use by the partner, or for transfer or sale under s. |
85 | 288.9628, in order to guarantee the partner's investment capital |
86 | in the partnership. |
87 | (3) "Commitment agreement" means a contract between the |
88 | partnership and an investment partner under which the partner |
89 | commits to providing a specified amount of investment capital in |
90 | exchange for an ownership interest in the partnership. |
91 | (4)(2) "Fund" means the Florida Opportunity Fund. |
92 | (5) "Infrastructure project" means a capital project in |
93 | the state for a facility or other infrastructure need in the |
94 | state with respect to any of the following: water or wastewater |
95 | system, communication system, power system, transportation |
96 | system, renewable energy system, ancillary or support system for |
97 | any of these types of projects, or other strategic |
98 | infrastructure located within the state. |
99 | (6) "Investment capital" means the total capital committed |
100 | by the investment partner for an equity interest in the |
101 | partnership pursuant to a commitment agreement. |
102 | (7) "Investment partner" or "partner" means a person, |
103 | other than the partnership, the fund, or the trust, who |
104 | purchases an ownership interest in the partnership or a |
105 | transferee of such interest. |
106 | (8) "Net capital loss" means an amount equal to the |
107 | difference between the total investment capital actually |
108 | advanced by the investment partner to the partnership and the |
109 | amount of the aggregate actual distributions received by the |
110 | investment partner. |
111 | (9) "Partnership" means the Florida Infrastructure Fund |
112 | Partnership. |
113 | (10) "Tax credits" means credits issued against the taxes |
114 | specified in s. 288.9628(7)(c). |
115 | (11) "Trust" means the Florida Infrastructure Investment |
116 | Trust. |
117 | Section 4. Section 288.9627, Florida Statutes, is created |
118 | to read: |
119 | 288.9627 Florida Infrastructure Fund Partnership; |
120 | creation; duties.- |
121 | (1) The Florida Opportunity Fund shall facilitate the |
122 | creation of the Florida Infrastructure Fund Partnership, which |
123 | shall be organized and operated under chapter 620 as a private, |
124 | for-profit limited partnership or limited liability partnership |
125 | with the fund as a general partner. The partnership shall manage |
126 | its business affairs and conduct business consistent with its |
127 | organizing documents and the purposes described in this section. |
128 | However, the partnership is not an instrumentality of the state. |
129 | (2) The primary purpose of the partnership is to raise |
130 | investment capital and invest the capital in infrastructure |
131 | projects in the state that promote economic development. |
132 | (3)(a) The fund, as the general partner of the |
133 | partnership, shall manage the partnership's business affairs, |
134 | including, but not limited to: |
135 | 1. Hiring one or more investment managers to assist with |
136 | management of the partnership through a solicitation for |
137 | qualified investment managers for the raising and investing of |
138 | capital by the partnership. Any such investment manager must |
139 | have maintained an office in the state for at least 2 years |
140 | before such solicitation with a full-time investment |
141 | professional. The evaluation of an investment manager candidate |
142 | must address the investment manager's level of experience, |
143 | quality of management, investment philosophy and process, |
144 | demonstrable success in fundraising, and prior investment |
145 | results. |
146 | 2. Soliciting and negotiating the terms of, contracting |
147 | for, and receiving investment capital with the assistance of the |
148 | investment managers or other service providers. |
149 | 3. Receiving investment returns. |
150 | 4. Disbursing returns to investment partners. |
151 | 5. Approving investments. |
152 | 6. Engaging in other activities necessary to operate the |
153 | partnership. |
154 | (b) The fund may lend up to $750,000 to the partnership to |
155 | pay the initial expenses of organizing the partnership and |
156 | soliciting investment partners. |
157 | (4)(a) The partnership shall raise funds from investment |
158 | partners for investment in infrastructure projects in the state |
159 | by entering into commitment agreements with such partners on |
160 | terms approved by the fund's board. |
161 | (b) The Florida Infrastructure Investment Trust shall, |
162 | pursuant to s. 288.9628, concurrently with the execution of a |
163 | commitment agreement with an investment partner, issue a |
164 | certificate. |
165 | (c) The partnership shall provide a copy of each |
166 | commitment agreement to the trust upon execution of the |
167 | agreement by all parties. |
168 | (d) The partnership may enter into commitment agreements |
169 | with investment partners beginning July 1, 2011. The total |
170 | principal investment capital payable to the partnership under |
171 | all commitment agreements may not exceed the total aggregate |
172 | amount of $700 million. However, if the partnership does not |
173 | obtain commitment agreements totaling at least $100 million by |
174 | December 1, 2012, the partnership must cancel any executed |
175 | agreement and return the investment capital of each investment |
176 | partner who executed an agreement. |
177 | (5)(a) The partnership may only invest in an |
178 | infrastructure project: |
179 | 1. That fulfills an important infrastructure need in the |
180 | state. |
181 | 2. That raises funding from other sources so that the |
182 | total amount invested in the project is at least twice the |
183 | amount invested by the partnership, inclusive of the |
184 | partnership's investment. |
185 | 3. For which legal measures exist, appropriate to the |
186 | individual project, to ensure that the project is not |
187 | fraudulently closed to the detriment of the residents of the |
188 | state. |
189 | (b) The partnership may not invest more than 20 percent of |
190 | its total available investment capital in any single |
191 | infrastructure project. |
192 | (c) The partnership may not invest in any infrastructure |
193 | project that involves any phase of a project authorized under |
194 | the Florida Rail Enterprise Act, ss. 341.8201-341.842. |
195 | (6) The partnership may only invest in an infrastructure |
196 | project based on an evaluation of the following: |
197 | (a) A written business plan for the project, including all |
198 | expected revenue sources. |
199 | (b) The likelihood of the project's attracting operating |
200 | capital from investment partners, grants, or other lenders. |
201 | (c) The management team for the proposed project. |
202 | (d) The project's potential for job creation in the state. |
203 | (e) The financial resources of the entity proposing the |
204 | project. |
205 | (f) The partnership's assessment that the project |
206 | reasonably provides a continuing benefit for residents of the |
207 | state. |
208 | (g) Other factors not inconsistent with this section that |
209 | are deemed by the partnership as relevant to the likelihood of |
210 | the project's success. |
211 | (7) By December 1 of each year beginning in 2011, the |
212 | partnership shall submit an annual report of its activities to |
213 | the Governor, the President of the Senate, and the Speaker of |
214 | the House of Representatives. The annual report must include, at |
215 | a minimum: |
216 | (a) An accounting of the amounts of investment capital |
217 | raised and disbursed by the partnership and the progress of the |
218 | partnership, including the progress of each infrastructure |
219 | project in which the partnership has invested. |
220 | (b) A description of the costs and benefits to the state |
221 | that result from the partnership's investments, including a list |
222 | of infrastructure projects; the costs and benefits of those |
223 | projects to the state and, if applicable, the county or |
224 | municipality; the number of businesses and associated industries |
225 | affected; the number, types, and average annual wages of the |
226 | jobs created or retained; and the impact on the state's economy. |
227 | (c) Independently audited financial statements, including |
228 | statements that show receipts and expenditures during the |
229 | preceding fiscal year for the operational costs of the |
230 | partnership. |
231 | (8) The partnership may not pledge the credit or taxing |
232 | power of the state or any political subdivision thereof and may |
233 | not make its debts payable from any moneys or resources except |
234 | those of the partnership. An obligation of the partnership is |
235 | not an obligation of the state or any political subdivision |
236 | thereof but is an obligation of the partnership, payable |
237 | exclusively from the partnership's resources. |
238 | (9) The partnership may not invest in an infrastructure |
239 | project with, or accept investment capital from, a company |
240 | described in s. 215.472 or a scrutinized company as defined in |
241 | s. 215.473, and the entity owning an infrastructure project in |
242 | which the partnership has invested must provide reasonable |
243 | assurances to the partnership that the entity will not provide |
244 | such a company or scrutinized company with an ownership interest |
245 | in the infrastructure project. |
246 | Section 5. Section 288.9628, Florida Statutes, is created |
247 | to read: |
248 | 288.9628 Florida Infrastructure Investment Trust; |
249 | creation; duties; issuance of certificates; applications for tax |
250 | credits.- |
251 | (1)(a) There is created the Florida Infrastructure |
252 | Investment Trust, which shall be organized as a state |
253 | beneficiary public trust to be administered by a board of |
254 | trustees. The powers and duties of the board of trustees under |
255 | this section are deemed to be performed for essential public |
256 | purposes. |
257 | (b) The board of trustees shall consist of the executive |
258 | director of the Department of Revenue, the director of the |
259 | Office of Tourism, Trade, and Economic Development, and the vice |
260 | chair of Enterprise Florida, Inc., or their designees. The board |
261 | of trustees shall appoint an administrative officer who may act |
262 | on behalf of the trust under the direction of the board of |
263 | trustees. |
264 | (c) Members of the board of trustees and the board's |
265 | administrative officer shall serve without compensation but are |
266 | entitled to reimbursement of their expenses. Each member of the |
267 | board of trustees has a duty of care to the trust in his or her |
268 | capacity as a trustee. Neither a member nor the administrative |
269 | officer may have a financial interest in any investment partner. |
270 | (2) The trust may hire consultants, retain professional |
271 | services, issue certificates, sell tax credits in accordance |
272 | with paragraph (5)(b), expend funds, invest funds, contract, |
273 | bond or insure against loss, or perform any other act necessary |
274 | to administer this section. |
275 | (3)(a) The trust shall, pursuant to s. 288.9627 and this |
276 | section, issue certificates to investment partners in the |
277 | Florida Infrastructure Fund Partnership, or their assignees, |
278 | guaranteeing the availability of tax credits of a maximum amount |
279 | equal to the investment capital committed by such investment |
280 | partners to the partnership. |
281 | (b) The trust and the fund may each seek reimbursement of |
282 | their respective reasonable costs and expenses from the |
283 | partnership by charging a fee for the issuance of certificates |
284 | to investment partners of up to 0.25 percent of the aggregate |
285 | investment capital committed to the partnership by the |
286 | investment partners who are issued certificates. |
287 | (c) The total aggregate amount of all tax credits made |
288 | available under the terms of certificates issued by the trust |
289 | may not exceed $700 million, and each certificate must include |
290 | the maximum amount of the tax credits that may be issued under |
291 | such certificate, which shall be the total amount of investment |
292 | capital committed to the partnership by the investment partner. |
293 | (d) A certificate shall be issued concurrently with a |
294 | commitment agreement between the investment partner and the |
295 | partnership. A certificate issued by the trust must include a |
296 | specific calendar year maturity date designated by the trust of |
297 | at least 12 years after issuance. Contingent tax credits may not |
298 | be claimed or redeemed except by an investment partner or |
299 | purchaser in accordance with this section and the terms of a |
300 | certificate issued by the trust. |
301 | (e) Once investment capital is committed to the |
302 | partnership by an investment partner pursuant to his or her |
303 | commitment agreement, the certificate is binding, and the |
304 | partnership, the trust, and the Department of Revenue may not |
305 | modify, terminate, or rescind the certificate, except for |
306 | administrative items, including the assignment or sale of tax |
307 | credits guaranteed to be available under the terms of a |
308 | certificate. |
309 | (4)(a) The partnership shall provide written notice to |
310 | each investment partner if, on the maturity date of his or her |
311 | certificate, the partner has a net capital loss. The notice must |
312 | include, at a minimum: |
313 | 1. A good faith estimate of the fair market value of the |
314 | partnership's assets as of the date of the notice. |
315 | 2. The total investment capital of all investment partners |
316 | as of the date of the notice. |
317 | 3. The total amount of distributions received by the |
318 | investment partners. |
319 | 4. The amount of the tax credits the investment partner is |
320 | entitled to be issued by the Department of Revenue. |
321 | (b) The partnership shall concurrently provide a copy of |
322 | each investment partner's notice to the trust. |
323 | (c) Upon receipt of the notice from the partnership, each |
324 | affected investment partner may make a one-time election to: |
325 | 1. Have tax credits issued to the investment partner; |
326 | 2. Have the trust sell, on the partner's behalf, the tax |
327 | credits guaranteed to be available under the terms of the |
328 | partner's certificate with the proceeds of the sale to be paid |
329 | to the partner by the trust; or |
330 | 3. Maintain the investment partner's investment in the |
331 | partnership. |
332 | (d) Except as provided in paragraph (6)(c), the election |
333 | made by an investment partner under paragraph (c) is final and |
334 | may not be revoked or modified. |
335 | (e) An investment partner must provide written notice to |
336 | the partnership and the trust of his or her election within 30 |
337 | days after his or her receipt of the notice from the |
338 | partnership. If an investment partner fails to provide notice |
339 | within 30 days, the investment partner is deemed to have elected |
340 | to maintain his or her investment in the partnership under |
341 | subparagraph (c)3. |
342 | (5)(a) If an investment partner makes the election under |
343 | subparagraph (4)(c)1. to have tax credits issued to him or her, |
344 | the trust shall apply to the Department of Revenue on the |
345 | partner's behalf for issuance of the tax credits in his or her |
346 | name in an amount equal to such partner's net capital loss. In |
347 | order to receive the tax credits, the investment partner must |
348 | agree in writing to transfer his or her ownership interest in |
349 | the partnership to the fund. |
350 | (b) If an investment partner makes the election under |
351 | subparagraph (4)(c)2., the trust shall exercise its best efforts |
352 | to sell the tax credits. In order to receive the proceeds from |
353 | the trust's sale of the tax credits, the investment partner must |
354 | agree in writing to transfer his or her ownership interest in |
355 | the partnership to the fund. A purchaser's payment for tax |
356 | credits must be made to the trust on behalf of the investment |
357 | partner or, upon the partner's request, directly to the |
358 | investment partner. The trust may sell tax credits in an amount |
359 | not to exceed the lesser of: |
360 | 1. The maximum amount of the tax credits available under |
361 | the terms of certificate issued to the investment partner; or |
362 | 2. The amount of tax credits necessary to yield net |
363 | proceeds to the investment partner equal to his or her net |
364 | capital loss as of the date of the partnership's notice. |
365 | (6)(a) Within 30 days after receipt of an investment |
366 | partner's election to be issued tax credits under paragraph |
367 | (5)(a), or within 30 days after the sale of tax credits under |
368 | paragraph (5)(b), the trust shall apply to the Department of |
369 | Revenue for issuance of the tax credits on behalf of the partner |
370 | or on behalf of the purchaser of the tax credits, as applicable. |
371 | However, the trust's failure to timely submit an application to |
372 | the Department of Revenue does not affect the investment |
373 | partner's or purchaser's eligibility for the tax credits. |
374 | (b) The trust's application for tax credits must include |
375 | the partnership's certification of the amount of tax credits to |
376 | be issued, the identity of the taxpayer to whom the tax credits |
377 | are to be issued, and the tax against which the credits shall be |
378 | applied. The Department of Revenue shall issue the tax credits |
379 | within 30 days after receipt of a timely and complete |
380 | application. |
381 | (c) The trust shall provide the investment partner with |
382 | written notice if, within 90 days after the partner's election, |
383 | the trust is unable to sell enough tax credits to yield net |
384 | proceeds to the investment partner equal to his or her net |
385 | capital loss as of the date of the partnership's notice and tax |
386 | credits available under the terms of the partner's certificate |
387 | remain unsold. Within 30 days after receipt of such notice, the |
388 | investment partner may: |
389 | 1. Revoke his or her prior election and make a new |
390 | election under paragraph (4)(c); or |
391 | 2. Modify the election and: |
392 | a. Have unsold tax credits issued to him or her, to the |
393 | extent that unsold tax credits are available, in an amount equal |
394 | to the partner's net capital loss, less the proceeds of any sold |
395 | credits; or |
396 | b. Have the trust continue to sell tax credits until the |
397 | partner's net capital loss is satisfied or the maximum amount of |
398 | tax credits available under the partner's certificate is |
399 | reached, whichever occurs first. |
400 |
|
401 | Within 30 days after such modified election, the trust shall |
402 | apply to the Department of Revenue in accordance with paragraph |
403 | (a) for issuance of tax credits on behalf of the investment |
404 | partner and on behalf of the purchasers in the amount of their |
405 | purchased credits. |
406 | (7)(a) The Department of Revenue may not issue more than |
407 | $700 million in tax credits. The trust may not approve tax |
408 | credits in excess of the total capital committed through |
409 | commitment agreements. |
410 | (b) The amount of tax credits that may be claimed by the |
411 | owner of the credits, or applied against state taxes, in any one |
412 | state fiscal year may not exceed an amount equal to $150 million |
413 | multiplied by a fraction the numerator of which is the amount of |
414 | credits that the Department of Revenue issued to such owner and |
415 | the denominator of which is the amount of all credits that the |
416 | Department of Revenue issued to all tax credit owners. |
417 | (c) Tax credits issued by the Department of Revenue under |
418 | this section may be used by the owner of the credits as an |
419 | offset against any state taxes owed to the state under chapter |
420 | 212, chapter 220, or ss. 624.509 and 624.5091. The offset may be |
421 | applied by the owner on any return for an eligible tax due on or |
422 | after the date that the credits are issued by the Department of |
423 | Revenue but within 7 years after the credits are issued. The |
424 | owner of the tax credits may elect to have the amount authorized |
425 | in the credits, or any portion thereof, claimed as a refund of |
426 | taxes paid rather than applied as an offset against eligible |
427 | taxes if such election is made within 7 years after the credits |
428 | are issued. |
429 | (d) To the extent that tax credits issued under this |
430 | section are used by their owner either as credits against taxes |
431 | due or to obtain payment from the state, the amount of such |
432 | credits becomes an obligation to the state by the partnership, |
433 | secured exclusively by the ownership interest transferred to the |
434 | fund by the investment partner whose investment generated the |
435 | tax credits. In such case, the state's recovery is limited to |
436 | such forfeited ownership interest. The Department of Revenue |
437 | shall account for tax credits used under this section and make |
438 | such information available to the partnership. The fund, as |
439 | general partner, is not liable to the state for repayment of the |
440 | used tax credits. |
441 | (e) Any certificate and related tax credits issued under |
442 | this section are transferable in whole or in part by their |
443 | owner. An owner of a certificate or tax credits must notify the |
444 | trust and the Department of Revenue of any such transfer. |
445 | (8) The Department of Revenue, upon the request of the |
446 | trust, shall provide the trust with a written assurance that the |
447 | certificates issued by the trust will be honored by the |
448 | Department of Revenue as provided in this section. |
449 | (9) Chapter 517 does not apply to the certificates and tax |
450 | credits transferred or sold under this section. |
451 | Section 6. Paragraph (dd) is added to subsection (8) of |
452 | section 213.053, Florida Statutes, as amended by chapter 2010- |
453 | 280, Laws of Florida, to read: |
454 | 213.053 Confidentiality and information sharing.- |
455 | (8) Notwithstanding any other provision of this section, |
456 | the department may provide: |
457 | (dd) Information relative to tax credits under ss. |
458 | 288.9627 and 288.9628 to the Florida Infrastructure Fund |
459 | Partnership and the Florida Infrastructure Investment Trust. |
460 |
|
461 | Disclosure of information under this subsection shall be |
462 | pursuant to a written agreement between the executive director |
463 | and the agency. Such agencies, governmental or nongovernmental, |
464 | shall be bound by the same requirements of confidentiality as |
465 | the Department of Revenue. Breach of confidentiality is a |
466 | misdemeanor of the first degree, punishable as provided by s. |
467 | 775.082 or s. 775.083. |
468 | Section 7. This act shall take effect July 1, 2011. |