Florida Senate - 2014                          SENATOR AMENDMENT
       Bill No. HB 5601
                              LEGISLATIVE ACTION                        
                    Senate             .             House              

       Senator Bean moved the following:
    1         Senate Amendment to Amendment (965938) 
    3         Delete lines 983 - 1226
    4  and insert:
    5  by 90 days after funds are appropriated for the program, and
    6  award the contract in accordance with the competitive bidding
    7  requirements in s. 287.057.
    8         (b) The department shall select as fund administrator a
    9  private sector entity that demonstrates the ability to implement
   10  the program under this section and that meets the requirements
   11  set forth in this section. Preference shall be given to
   12  applicants that are headquartered in this state. Additional
   13  consideration may be given to applicants that have experience in
   14  the management of economic development or job creation-related
   15  funds. The qualifications for the fund administrator must
   16  include, but are not limited to:
   17         1. A demonstrated track record of managing private sector
   18  equity or debt funds in the entertainment and media industries.
   19         2. The ability to demonstrate through a partnership
   20  agreement that a qualified lending partner is in place which has
   21  the capability of providing leverage of a minimum of 2.5 times
   22  the capital amount of the QTV Fund, for financing the production
   23  cost of qualified television content in the form of senior debt.
   24         (c) For overseeing and administering the QTV Fund, the fund
   25  administrator shall be reimbursed for the costs the fund
   26  administrator incurs in establishing and operating the fund
   27  related to the state’s investment, which shall be paid from
   28  state funds in the QTV Fund. Any additional private investment
   29  capital in the segregated accounts is responsible for its own
   30  management fees. The fund administrator is entitled to a
   31  reasonable profit, but such distribution may not be made from
   32  the principal funds from the original appropriation.
   33         (d) The fund administrator shall provide services defined
   34  under this section for the duration of the QTV Fund term unless
   35  removed by the department. The contract between the department
   36  and the fund administrator shall set forth the circumstances
   37  under which the contract may be terminated.
   39         (a) Authority to contract.—The fund administrator may enter
   40  into agreements with qualified lending partners for concurrent
   41  lending through the QTV Fund. A loan made by the qualified
   42  lending partner must be accounted for separately from the state
   43  funds or other private investment capital. Such loan shall be
   44  made as senior debt. The fund administrator may raise private
   45  investment capital for mezzanine equity and other equity or
   46  raise junior capital for concurrent lending through the QTV
   47  Fund. However, loans from private investment capital may not be
   48  made at more favorable terms and conditions than the terms and
   49  conditions of the state funds in the QTV Fund. The state
   50  appropriation must be maintained in a separate account from
   51  private investment capital and administered in a separate legal
   52  investment entity or entities. Private investment capital and
   53  loans shall be segregated from each other, and funds may not be
   54  commingled.
   55         (b) General duties.—The fund administrator:
   56         1. Shall prudently manage the funds in the QTV Fund as a
   57  revolving loan fund.
   58         2. Shall contract with one or more qualified lending
   59  partners.
   60         3. Shall provide improvement of the credit profile of a
   61  structured financial transaction for qualified production
   62  companies that produce qualified television content meeting the
   63  criteria in subsection (7).
   64         4. May raise additional private investment capital to be
   65  held in separate accounts, in addition to the leverage provided
   66  by the qualified lending partner.
   67         5. Shall administer the QTV Fund in accordance with this
   68  part.
   69         6. Shall agree to maintain the recipient’s books and
   70  records relating to funds received from the department according
   71  to generally accepted accounting principles and in accordance
   72  with s. 215.97(7) and to make those books and records available
   73  to the department for inspection upon reasonable notice. The
   74  books and records must be maintained with detailed records
   75  showing the use of proceeds from loans to fund qualified
   76  television content.
   77         7. Shall maintain its registered office in this state
   78  throughout the duration of the contract.
   79         (c) Financial reporting.—The fund administrator shall
   80  annually submit to the department by February 28 audited
   81  financial statements for the preceding tax year which are
   82  audited by an independent certified public accountant after the
   83  end of each year in which the fund administrator is under
   84  contract with the department. In addition to providing an
   85  independent opinion on the annual financial statements, such
   86  audit provides a basis for verifying the segregation of state
   87  funds from those of any private investment capital.
   88         (d) Program reporting.—The fund administrator shall submit
   89  a report to the department by February 28 after the end of each
   90  year in which the fund administrator is under contract with the
   91  department. The report must include information on the loans
   92  made in the preceding calendar year, including:
   93         1. The name of the qualified television content.
   94         2. The names of the counties in which the production
   95  occurred.
   96         3. The number of jobs created and retained as a result of
   97  the production.
   98         4. The loan amounts, including the amount of private
   99  investment capital and funds provided by a qualified lending
  100  partner.
  101         5. The loan repayment status for each loan.
  102         6. The number and amounts of any loans with payments past
  103  due.
  104         7. The number and amounts of any loans in default.
  105         8. A description of the assets securing the loans.
  106         9. Other information and documentation required by the
  107  department.
  108         (e) Plan of accountability.—The fund administrator shall
  109  submit an annual plan of accountability of economic development,
  110  including a report detailing the job creation resulting from the
  111  QTV Fund loans made during the current year and cumulatively
  112  since the inception of the program. The fund administrator shall
  113  also provide any additional information requested by the
  114  department pertaining to economic development and job creation
  115  in the state.
  116         (f) Conflict-of-interest statement.—The fund administrator
  117  shall provide a conflict-of-interest statement from its
  118  governing board certifying that no board member, director,
  119  employee, agent, immediate family member thereof, or other
  120  person connected to or affiliated with the fund administrator is
  121  receiving or will receive any type of compensation or
  122  remuneration from a production company that has received or will
  123  receive funds from the loan program or from a qualified lending
  124  partner. The department may waive this requirement for good
  125  cause shown.
  126         (6) LOAN STRUCTURE.—
  127         (a) The QTV Fund may make loans to production companies to
  128  fund production costs or provide improvement of the credit
  129  profile of a structured financial transaction for qualified
  130  television content that meets the criteria requirements of
  131  subsection (7). To make a loan, the fund administrator shall
  132  consider the types of eligible collateral, the credit worthiness
  133  of the project, the producer’s track record, the possibility
  134  that the project will encourage, enhance, or create economic
  135  benefits, and the extent to which assistance would foster
  136  innovative public-private partnerships and attract private debt
  137  or equity investment.
  138         (b) The QTV Fund loan package shall be secured by
  139  contractual and predictable sources of repayment such as
  140  domestic and international broadcaster license agreements and
  141  other ancillary revenues that are derived from media content
  142  rights. Unsecured loans may not be made.
  143         (c) The loans shall be made on the basis of a second lien
  144  or primary security rights on the media assets listed in
  145  paragraph (b).
  146         (d) The QTV Fund shall provide funding only in conjunction
  147  with senior loans provided by a qualified lending partner. Loans
  148  from the fund may be subordinated to senior debt from the
  149  qualified lending partner and may not exceed 30 percent of the
  150  total production funding cost of any particular project.
  151         (e) The production company’s repayment of a loan shall be
  152  in accordance with the broadcast license agreement and the
  153  delivery of qualified television content to the major
  154  broadcaster and shall be within 60 days after such delivery.
  155         (f) Loans made by the QTV Fund may not exceed 36 months in
  156  duration, except for extenuating circumstances for which the
  157  fund administrator may grant an extension upon making written
  158  findings to the department specifying the conditions requiring
  159  the extension.
  160         (g) The fund administrator or a board member, employee, or
  161  agent thereof, or an immediate family member of a board member,
  162  employee, or agent, may not have a financial interest in an
  163  entity that is awarded a loan under a loan program and may not
  164  benefit directly or indirectly from the making of such loan. A
  165  loan may not be made to a person if it violates this paragraph.
  166  As used in this section, the term “immediate family” means a
  167  parent, child, or spouse, or other relative by blood, marriage,
  168  or adoption, of a board member, employee, or agent of the loan
  169  administrator.
  170         (h) Except for funds appropriated to the department for the
  171  loan program, the credit of the state may not be pledged. The
  172  state is not liable or obligated in any way for claims against
  173  the QTV Fund or against the fund administrator, the qualified
  174  lending partner, or the department.
  176  administrator must, at a minimum, consider the following
  177  criteria for evaluating the qualifying television content:
  178         (a) The content is intended for broadcast by a major
  179  broadcaster on a major network, cable, or streaming channel.
  180         (b) The content is produced in this state, or a minimum of
  181  80 percent of the production budget must be spent in this state.
  182  This requirement may be amended by the fund administrator upon
  183  notice to the department. Such notice must include a specific
  184  justification for the change and must be transmitted to the
  185  department in writing. The department has 10 business days to
  186  object to the change. If the department does not object within
  187  10 business days, the change is deemed acceptable by the
  188  department, and the fund administrator may grant the amendment.
  189         (c) If the content is a series, there is a programming
  190  order for at least 13 episodes. This requirement may be amended
  191  by the fund administrator upon notice to the department. Such
  192  notice must include a specific justification for the change and
  193  must be transmitted to the department in writing. The department
  194  has 10 business days to object to the change. If the department
  195  does not object within 10 business days, the change is deemed
  196  acceptable by the department, and the fund administrator may
  197  grant the amendment.
  198         (d) The producer must have a contract in place with a major
  199  broadcaster to acquire content programming under a customary
  200  broadcast license agreement and the contract must cover at least
  201  60 percent of the budget.
  202         (e) The producer must retain a foreign sales agent and must
  203  be able to provide the fund administrator with the foreign sales
  204  agent’s official estimates of foreign and ancillary sales.
  205         (f) The project must be bonded and secured by an industry
  206  approved completion guarantor if the production cost per episode
  207  exceeds $1 million. This requirement may be waived if the loan
  208  applicant provides the fund administrator with evidence of
  209  adequate structure to protect the state’s funds.
  210         (8) AUDITOR GENERAL AUDIT.—The Auditor General may conduct
  211  operational audits, as defined in s. 11.45, of the QTV Fund and
  212  fund administrator. The scope of audit must include, but is not
  213  limited to, internal controls evaluations, internal audit
  214  functions, reporting and performance requirements for the use of
  215  the funds, and compliance with state and federal law. The fund
  216  administrator shall provide to the Auditor General any detail or
  217  supplemental data required.
  218         (9) RULEMAKING AUTHORITY.—The department may adopt rules to
  219  administer this section.
  220         (10) EXPIRATION.—This section expires December 31, 2024, at
  221  which point all funds remaining in the QTV Fund revert to the
  222  General Revenue Fund.
  223         (11) EMERGENCY RULES.—
  224         (a) The executive director of the department is authorized,
  225  and all conditions are deemed met, to adopt emergency rules
  226  pursuant to ss. 120.536(1) and 120.54(4) for the purpose of
  227  implementing this section.
  228         (b) Notwithstanding any other law, the emergency rules
  229  adopted pursuant to paragraph (a) remain in effect for 6 months
  230  after adoption and may be renewed during the pendency of
  231  procedures to adopt permanent rules addressing the subject of
  232  the emergency rules.
  233         (c) This subsection expires October 1, 2015.
  234         Section 18. Effective July 1, 2015, paragraph (b) of
  235  subsection (2) of section 288.0001, Florida Statutes, is amended
  236  to read:
  237         288.0001 Economic Development Programs Evaluation.—The
  238  Office of Economic and Demographic Research and the Office of
  239  Program Policy Analysis and Government Accountability (OPPAGA)
  240  shall develop and present to the Governor, the President of the
  241  Senate, the Speaker of the House of Representatives, and the
  242  chairs of the legislative appropriations committees the Economic
  243  Development Programs Evaluation.
  244         (2) The Office of Economic and Demographic Research and
  245  OPPAGA shall provide a detailed analysis of economic development
  246  programs as provided in the following schedule:
  247         (b) By January 1, 2018 2015, and every 3 years thereafter,
  248  an