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)
    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.
  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.
  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.
  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