Florida Senate - 2012 SENATOR AMENDMENT
Bill No. HB 7087, 2nd Eng.
Barcode 473340
LEGISLATIVE ACTION
Senate . House
.
.
.
Floor: WD .
03/09/2012 11:01 AM .
—————————————————————————————————————————————————————————————————
—————————————————————————————————————————————————————————————————
Senator Richter moved the following:
1 Senate Amendment to Amendment (401580) (with title
2 amendment)
3
4 Between lines 993 and 994
5 insert:
6 Section 14. Section 288.9621, Florida Statutes, is amended
7 to read:
8 288.9621 Short title.—This part Sections 288.9621-288.9625
9 may be cited as the “Florida Capital Formation Act.”
10 Section 15. Subsections (1) and (2) of section 288.9622,
11 Florida Statutes, are amended to read:
12 288.9622 Findings and intent.—
13 (1) The Legislature finds and declares that there is a need
14 to increase the availability of seed capital and early stage
15 venture equity capital for emerging companies in the state,
16 including, without limitation, enterprises in life sciences,
17 information technology, advanced manufacturing processes,
18 aviation and aerospace, and homeland security and defense, as
19 well as other strategic technologies and infrastructure funding.
20 (2) It is the intent of the Legislature that this part ss.
21 288.9621-288.9625 serve to mobilize private investment in a
22 broad variety of venture capital partnerships in diversified
23 industries and geographies; retain private sector investment
24 criteria focused on rate of return; use the services of highly
25 qualified managers in the venture capital industry regardless of
26 location; facilitate the organization of the Florida Opportunity
27 Fund as an investor in seed and early stage businesses,
28 infrastructure projects, venture capital funds, infrastructure
29 funds, and angel funds; and precipitate capital investment and
30 extensions of credit to and in the Florida Opportunity Fund.
31 Section 16. Section 288.9623, Florida Statutes, is amended
32 to read:
33 288.9623 Definitions.—As used in this part, the term ss.
34 288.9621-288.9625:
35 (1) “Board” means the board of directors of the Florida
36 Opportunity Fund.
37 (2) “Certificate” means a contract between the trust and an
38 investment partner which guarantees the availability of tax
39 credits for use by the partner, or for transfer or sale under s.
40 288.9628, in order to guarantee the partner’s investment capital
41 in the partnership.
42 (3) “Commitment agreement” means a contract between the
43 partnership and an investment partner under which the partner
44 commits to providing a specified amount of investment capital in
45 exchange for an ownership interest in the partnership.
46 (4)(2) “Fund” means the Florida Opportunity Fund.
47 (5) “Infrastructure project” means a capital project in the
48 state for a facility or other infrastructure need in the state
49 with respect to any of the following: water or wastewater
50 system, communication system, power system, transportation
51 system, renewable energy system, ancillary or support system for
52 any of these types of projects, or other strategic
53 infrastructure located within the state.
54 (6) “Investment capital” means the total capital committed
55 by the investment partner for an equity interest in the
56 partnership pursuant to a commitment agreement.
57 (7) “Investment partner” or “partner” means a person, other
58 than the partnership, the fund, or the trust, who purchases an
59 ownership interest in the partnership or a transferee of such
60 interest.
61 (8) “Net capital loss” means an amount equal to the
62 difference between the total investment capital actually
63 advanced by the investment partner to the partnership and the
64 amount of the aggregate actual distributions received by the
65 investment partner.
66 (9) “Partnership” means the Florida Infrastructure Fund
67 Partnership.
68 (10) “Tax credits” means credits issued against the taxes
69 specified in s. 288.9628(7)(c).
70 (11) “Trust” means the Florida Infrastructure Investment
71 Trust.
72 Section 17. Section 288.9627, Florida Statutes, is created
73 to read:
74 288.9627 Florida Infrastructure Fund Partnership; creation;
75 duties.—
76 (1) The Florida Opportunity Fund shall facilitate the
77 creation of the Florida Infrastructure Fund Partnership, which
78 shall be organized and operated under chapter 620 as a private,
79 for-profit limited partnership or limited liability partnership
80 with the fund as a general partner. The partnership shall manage
81 its business affairs and conduct business consistent with its
82 organizing documents and the purposes described in this section.
83 However, the partnership is not an instrumentality of the state.
84 (2) The primary purpose of the partnership is to raise
85 investment capital and invest the capital in infrastructure
86 projects in the state that promote economic development.
87 (3)(a) The fund, as the general partner of the partnership,
88 shall manage the partnership’s business affairs, including, but
89 not limited to:
90 1. Hiring one or more investment managers to assist with
91 management of the partnership through a solicitation for
92 qualified investment managers for the raising and investing of
93 capital by the partnership. Any such investment manager must
94 have maintained an office in the state for at least 2 years
95 before such solicitation with a full-time investment
96 professional. The evaluation of an investment manager candidate
97 must address the investment manager’s level of experience,
98 quality of management, investment philosophy and process,
99 demonstrable success in fundraising, and prior investment
100 results.
101 2. Soliciting and negotiating the terms of, contracting
102 for, and receiving investment capital with the assistance of the
103 investment managers or other service providers.
104 3. Receiving investment returns.
105 4. Disbursing returns to investment partners.
106 5. Approving investments.
107 6. Engaging in other activities necessary to operate the
108 partnership.
109 (b) The fund may lend up to $750,000 to the partnership to
110 pay the initial expenses of organizing the partnership and
111 soliciting investment partners.
112 (4)(a) The partnership shall raise funds from investment
113 partners for investment in infrastructure projects in the state
114 by entering into commitment agreements with such partners on
115 terms approved by the fund’s board.
116 (b) The Florida Infrastructure Investment Trust shall,
117 pursuant to s. 288.9628, concurrently with the execution of a
118 commitment agreement with an investment partner, issue a
119 certificate.
120 (c) The partnership shall provide a copy of each commitment
121 agreement to the trust upon execution of the agreement by all
122 parties.
123 (d) The partnership may enter into commitment agreements
124 with investment partners beginning July 1, 2012. The total
125 principal investment capital payable to the partnership under
126 all commitment agreements may not exceed the total aggregate
127 amount of $700 million. However, if the partnership does not
128 obtain commitment agreements totaling at least $100 million by
129 December 1, 2013, the partnership must cancel any executed
130 agreement and return the investment capital of each investment
131 partner who executed an agreement.
132 (5)(a) The partnership may only invest in an infrastructure
133 project:
134 1. That fulfills an important infrastructure need in the
135 state.
136 2. That raises funding from other sources so that the total
137 amount invested in the project is at least twice the amount
138 invested by the partnership, inclusive of the partnership’s
139 investment.
140 3. For which legal measures exist, appropriate to the
141 individual project, to ensure that the project is not
142 fraudulently closed to the detriment of the residents of the
143 state.
144 (b) The partnership may not invest more than 20 percent of
145 its total available investment capital in any single
146 infrastructure project.
147 (c) The partnership may not invest in any infrastructure
148 project that involves any phase of a project authorized under
149 the Florida Rail Enterprise Act, ss. 341.8201-341.842.
150 (6) The partnership may only invest in an infrastructure
151 project based on an evaluation of the following:
152 (a) A written business plan for the project, including all
153 expected revenue sources.
154 (b) The likelihood of the project’s attracting operating
155 capital from investment partners, grants, or other lenders.
156 (c) The management team for the proposed project.
157 (d) The project’s potential for job creation in the state.
158 (e) The financial resources of the entity proposing the
159 project.
160 (f) The partnership’s assessment that the project
161 reasonably provides a continuing benefit for residents of the
162 state.
163 (g) Other factors not inconsistent with this section that
164 are deemed by the partnership as relevant to the likelihood of
165 the project’s success.
166 (7) By December 1 of each year beginning in 2012, the
167 partnership shall submit an annual report of its activities to
168 the Governor, the President of the Senate, and the Speaker of
169 the House of Representatives. The annual report must include, at
170 a minimum:
171 (a) An accounting of the amounts of investment capital
172 raised and disbursed by the partnership and the progress of the
173 partnership, including the progress of each infrastructure
174 project in which the partnership has invested.
175 (b) A description of the costs and benefits to the state
176 that result from the partnership’s investments, including a list
177 of infrastructure projects; the costs and benefits of those
178 projects to the state and, if applicable, the county or
179 municipality; the number of businesses and associated industries
180 affected; the number, types, and average annual wages of the
181 jobs created or retained; and the impact on the state’s economy.
182 (c) Independently audited financial statements, including
183 statements that show receipts and expenditures during the
184 preceding fiscal year for the operational costs of the
185 partnership.
186 (8) The partnership may not pledge the credit or taxing
187 power of the state or any political subdivision thereof and may
188 not make its debts payable from any moneys or resources except
189 those of the partnership. An obligation of the partnership is
190 not an obligation of the state or any political subdivision
191 thereof but is an obligation of the partnership, payable
192 exclusively from the partnership’s resources.
193 (9) The partnership may not invest in an infrastructure
194 project with, or accept investment capital from, a company
195 described in s. 215.472 or a scrutinized company as defined in
196 s. 215.473, and the entity owning an infrastructure project in
197 which the partnership has invested must provide reasonable
198 assurances to the partnership that the entity will not provide
199 such a company or scrutinized company with an ownership interest
200 in the infrastructure project.
201 Section 18. Section 288.9628, Florida Statutes, is created
202 to read:
203 288.9628 Florida Infrastructure Investment Trust; creation;
204 duties; issuance of certificates; applications for tax credits.—
205 (1)(a) There is created the Florida Infrastructure
206 Investment Trust, which shall be organized as a state
207 beneficiary public trust to be administered by a board of
208 trustees. The powers and duties of the board of trustees under
209 this section are deemed to be performed for essential public
210 purposes.
211 (b) The board of trustees shall consist of the executive
212 director of the Department of Revenue, the executive director of
213 the Department of Economic Opportunity, and the vice chair of
214 Enterprise Florida, Inc., or their designees. The board of
215 trustees shall appoint an administrative officer who may act on
216 behalf of the trust under the direction of the board of
217 trustees.
218 (c) Members of the board of trustees and the board’s
219 administrative officer shall serve without compensation but are
220 entitled to reimbursement of their expenses. Each member of the
221 board of trustees has a duty of care to the trust in his or her
222 capacity as a trustee. Neither a member nor the administrative
223 officer may have a financial interest in any investment partner.
224 (2) The trust may hire consultants, retain professional
225 services, issue certificates, sell tax credits in accordance
226 with paragraph (5)(b), expend funds, invest funds, contract,
227 bond or insure against loss, or perform any other act necessary
228 to administer this section.
229 (3)(a) The trust shall, pursuant to s. 288.9627 and this
230 section, issue certificates to investment partners in the
231 Florida Infrastructure Fund Partnership, or their assignees,
232 guaranteeing the availability of tax credits of a maximum amount
233 equal to the investment capital committed by such investment
234 partners to the partnership.
235 (b) The trust and the fund may each seek reimbursement of
236 their respective reasonable costs and expenses from the
237 partnership by charging a fee for the issuance of certificates
238 to investment partners of up to 0.25 percent of the aggregate
239 investment capital committed to the partnership by the
240 investment partners who are issued certificates.
241 (c) The total aggregate amount of all tax credits made
242 available under the terms of certificates issued by the trust
243 may not exceed $700 million, and each certificate must include
244 the maximum amount of the tax credits that may be issued under
245 such certificate, which shall be the total amount of investment
246 capital committed to the partnership by the investment partner.
247 (d) A certificate shall be issued concurrently with a
248 commitment agreement between the investment partner and the
249 partnership. A certificate issued by the trust must include a
250 specific calendar year maturity date designated by the trust of
251 at least 12 years after issuance. Contingent tax credits may not
252 be claimed or redeemed except by an investment partner or
253 purchaser in accordance with this section and the terms of a
254 certificate issued by the trust.
255 (e) Once investment capital is committed to the partnership
256 by an investment partner pursuant to his or her commitment
257 agreement, the certificate is binding, and the partnership, the
258 trust, and the Department of Revenue may not modify, terminate,
259 or rescind the certificate, except for administrative items,
260 including the assignment or sale of tax credits guaranteed to be
261 available under the terms of a certificate.
262 (4)(a) The partnership shall provide written notice to each
263 investment partner if, on the maturity date of his or her
264 certificate, the partner has a net capital loss. The notice must
265 include, at a minimum:
266 1. A good faith estimate of the fair market value of the
267 partnership’s assets as of the date of the notice.
268 2. The total investment capital of all investment partners
269 as of the date of the notice.
270 3. The total amount of distributions received by the
271 investment partners.
272 4. The amount of the tax credits the investment partner is
273 entitled to be issued by the Department of Revenue.
274 (b) The partnership shall concurrently provide a copy of
275 each investment partner’s notice to the trust.
276 (c) Upon receipt of the notice from the partnership, each
277 affected investment partner may make a one-time election to:
278 1. Have tax credits issued to the investment partner;
279 2. Have the trust sell, on the partner’s behalf, the tax
280 credits guaranteed to be available under the terms of the
281 partner’s certificate with the proceeds of the sale to be paid
282 to the partner by the trust; or
283 3. Maintain the investment partner’s investment in the
284 partnership.
285 (d) Except as provided in paragraph (6)(c), the election
286 made by an investment partner under paragraph (c) is final and
287 may not be revoked or modified.
288 (e) An investment partner must provide written notice to
289 the partnership and the trust of his or her election within 30
290 days after his or her receipt of the notice from the
291 partnership. If an investment partner fails to provide notice
292 within 30 days, the investment partner is deemed to have elected
293 to maintain his or her investment in the partnership under
294 subparagraph (c)3.
295 (5)(a) If an investment partner makes the election under
296 subparagraph (4)(c)1. to have tax credits issued to him or her,
297 the trust shall apply to the Department of Revenue on the
298 partner’s behalf for issuance of the tax credits in his or her
299 name in an amount equal to such partner’s net capital loss. In
300 order to receive the tax credits, the investment partner must
301 agree in writing to transfer his or her ownership interest in
302 the partnership to the fund.
303 (b) If an investment partner makes the election under
304 subparagraph (4)(c)2., the trust shall exercise its best efforts
305 to sell the tax credits. In order to receive the proceeds from
306 the trust’s sale of the tax credits, the investment partner must
307 agree in writing to transfer his or her ownership interest in
308 the partnership to the fund. A purchaser’s payment for tax
309 credits must be made to the trust on behalf of the investment
310 partner or, upon the partner’s request, directly to the
311 investment partner. The trust may sell tax credits in an amount
312 not to exceed the lesser of:
313 1. The maximum amount of the tax credits available under
314 the terms of the certificate issued to the investment partner;
315 or
316 2. The amount of tax credits necessary to yield net
317 proceeds to the investment partner equal to his or her net
318 capital loss as of the date of the partnership’s notice.
319 (6)(a) Within 30 days after receipt of an investment
320 partner’s election to be issued tax credits under paragraph
321 (5)(a), or within 30 days after the sale of tax credits under
322 paragraph (5)(b), the trust shall apply to the Department of
323 Revenue for issuance of the tax credits on behalf of the partner
324 or on behalf of the purchaser of the tax credits, as applicable.
325 However, the trust’s failure to timely submit an application to
326 the Department of Revenue does not affect the investment
327 partner’s or purchaser’s eligibility for the tax credits.
328 (b) The trust’s application for tax credits must include
329 the partnership’s certification of the amount of tax credits to
330 be issued, the identity of the taxpayer to whom the tax credits
331 are to be issued, and the tax against which the credits shall be
332 applied. The Department of Revenue shall issue the tax credits
333 within 30 days after receipt of a timely and complete
334 application.
335 (c) The trust shall provide the investment partner with
336 written notice if, within 90 days after the partner’s election,
337 the trust is unable to sell enough tax credits to yield net
338 proceeds to the investment partner equal to his or her net
339 capital loss as of the date of the partnership’s notice and tax
340 credits available under the terms of the partner’s certificate
341 remain unsold. Within 30 days after receipt of such notice, the
342 investment partner may:
343 1. Revoke his or her prior election and make a new election
344 under paragraph (4)(c); or
345 2. Modify the election and:
346 a. Have unsold tax credits issued to him or her, to the
347 extent that unsold tax credits are available, in an amount equal
348 to the partner’s net capital loss, less the proceeds of any sold
349 credits; or
350 b. Have the trust continue to sell tax credits until the
351 partner’s net capital loss is satisfied or the maximum amount of
352 tax credits available under the partner’s certificate is
353 reached, whichever occurs first.
354
355 Within 30 days after such modified election, the trust shall
356 apply to the Department of Revenue in accordance with paragraph
357 (a) for issuance of tax credits on behalf of the investment
358 partner and on behalf of the purchasers in the amount of their
359 purchased credits.
360 (7)(a) The Department of Revenue may not issue more than
361 $700 million in tax credits. The trust may not approve tax
362 credits in excess of the total capital committed through
363 commitment agreements.
364 (b) The amount of tax credits that may be claimed by the
365 owner of the credits, or applied against state taxes, in any one
366 state fiscal year may not exceed an amount equal to $150 million
367 multiplied by a fraction, the numerator of which is the amount
368 of credits that the Department of Revenue issued to such owner
369 and the denominator of which is the amount of all credits that
370 the Department of Revenue issued to all tax credit owners.
371 (c) Tax credits issued by the Department of Revenue under
372 this section may be used by the owner of the credits as an
373 offset against any state taxes owed to the state under chapter
374 212, chapter 220, or ss. 624.509 and 624.5091. The offset may be
375 applied by the owner on any return for an eligible tax due on or
376 after the date that the credits are issued by the Department of
377 Revenue but within 7 years after the credits are issued. The
378 owner of the tax credits may elect to have the amount authorized
379 in the credits, or any portion thereof, claimed as a refund of
380 taxes paid rather than applied as an offset against eligible
381 taxes if such election is made within 7 years after the credits
382 are issued.
383 (d) To the extent that tax credits issued under this
384 section are used by their owner either as credits against taxes
385 due or to obtain payment from the state, the amount of such
386 credits becomes an obligation to the state by the partnership,
387 secured exclusively by the ownership interest transferred to the
388 fund by the investment partner whose investment generated the
389 tax credits. In such case, the state’s recovery is limited to
390 such forfeited ownership interest. The Department of Revenue
391 shall account for tax credits used under this section and make
392 such information available to the partnership. The fund, as
393 general partner, is not liable to the state for repayment of the
394 used tax credits.
395 (e) Any certificate and related tax credits issued under
396 this section are transferable in whole or in part by their
397 owner. An owner of a certificate or tax credits must notify the
398 trust and the Department of Revenue of any such transfer.
399 (8) The Department of Revenue, upon the request of the
400 trust, shall provide the trust with a written assurance that the
401 certificates issued by the trust will be honored by the
402 Department of Revenue as provided in this section.
403 (9) Chapter 517 does not apply to the certificates and tax
404 credits transferred or sold under this section.
405 Section 19. Paragraph (cc) is added to subsection (8) of
406 section 213.053, Florida Statutes, to read:
407 213.053 Confidentiality and information sharing.—
408 (8) Notwithstanding any other provision of this section,
409 the department may provide:
410 (cc) Information relative to tax credits under ss. 288.9627
411 and 288.9628 to the Florida Infrastructure Fund Partnership and
412 the Florida Infrastructure Investment Trust.
413
414 Disclosure of information under this subsection shall be
415 pursuant to a written agreement between the executive director
416 and the agency. Such agencies, governmental or nongovernmental,
417 shall be bound by the same requirements of confidentiality as
418 the Department of Revenue. Breach of confidentiality is a
419 misdemeanor of the first degree, punishable as provided by s.
420 775.082 or s. 775.083.
421
422 ================= T I T L E A M E N D M E N T ================
423 And the title is amended as follows:
424 Delete line 1269
425 and insert:
426 program; amending ss. 288.9621, 288.9622, and
427 288.9623, F.S.; conforming a short title, revising
428 legislative findings and intent, and providing
429 definitions for the Florida Capital Formation Act;
430 conforming cross-references; creating s. 288.9627,
431 F.S.; providing for creation of the Florida
432 Infrastructure Fund Partnership; providing the
433 partnership’s purpose and duties; providing for
434 management of the partnership by the Florida
435 Opportunity Fund; authorizing the fund to lend moneys
436 to the partnership; requiring the partnership to raise
437 funds from investment partners; providing for
438 commitment agreements with and issuance of
439 certificates to investment partners; authorizing the
440 partnership to invest in certain infrastructure
441 projects; requiring the partnership to submit an
442 annual report to the Governor and Legislature;
443 prohibiting the partnership from pledging the credit
444 or taxing power of the state or its political
445 subdivisions; prohibiting the partnership from
446 investing in projects with or accepting investments
447 from certain companies; creating s. 288.9628, F.S.;
448 creating the Florida Infrastructure Investment Trust;
449 providing for powers and duties, a board of trustees,
450 and an administrative officer of the trust; providing
451 for the trust’s issuance of certificates to investment
452 partners; specifying that the certificates guarantee
453 the availability of tax credits under certain
454 conditions; authorizing the trust and the fund to
455 charge fees; limiting the amount of tax credits that
456 may be claimed or applied against state taxes in any
457 year; providing for the redemption of certificates or
458 sale of tax credits; providing for the issuance of the
459 tax credits by the Department of Revenue; specifying
460 the taxes against which the credits may be applied;
461 limiting the period within which tax credits may be
462 used; providing for the state’s obligation for use of
463 the tax credits; limiting the liability of the fund;
464 providing for the transferability of certificates and
465 tax credits; requiring the department to provide a
466 certain written assurance to the trust under certain
467 circumstances; specifying that certain provisions
468 regulating securities transactions do not apply to
469 certificates and tax credits transferred or sold under
470 the act; amending s. 213.053, F.S.; authorizing the
471 department to disclose certain information to the
472 partnership and the trust relative to certain tax
473 credits; amending s. 288.9915, F.S.; revising