Florida Senate - 2014                          SENATOR AMENDMENT
       Bill No. HB 5601
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Floor: WD            .                                
             05/01/2014 03:29 PM       .                                

       Senator Bean moved the following:
    1         Senate Amendment to Amendment (526842) (with title
    2  amendment)
    4         Before line 6
    5  insert:
    6         Section 1. Section 288.127, Florida Statutes, is created to
    7  read:
    8         288.127 Qualified television loan fund.—
    9         (1) DEFINITIONS.—As used in this section, the term:
   10         (a) “Fund administrator” means a private sector
   11  organization under contract with the department to manage and
   12  administer the QTV Fund.
   13         (b) “Major broadcaster” means broadcasting organizations
   14  that include, but are not limited to, television broadcasting
   15  networks, cable television, direct broadcast satellite,
   16  telecommunications companies, and internet streaming or other
   17  digital media platforms.
   18         (c) “Private investment capital” means capital from
   19  private, nongovernmental funding sources that will be coinvested
   20  with the QTV Fund in segregated accounts.
   21         (d) “Qualified lending partner” means a financial
   22  institution, as defined in s. 655.005, selected by a fund
   23  administrator that has demonstrated capability in providing
   24  financing to television production and specialized expertise in
   25  intellectual property, tax credit programs, customary broadcast
   26  license agreements, advertising inventories, and ancillary
   27  revenue sources, and a combined portfolio in film, television,
   28  and entertainment media of at least $500 million.
   29         (e) “Qualified television content” means series, mini
   30  series, or made-for-TV content produced by a qualified
   31  production company that has in place a distribution contract
   32  with a major broadcaster, under a customary broadcast license
   33  agreement. The term does not include a production that contains
   34  content that is obscene, as defined in s. 847.001.
   35         (f) “QTV Fund” means the qualified television loan fund.
   36         (2) PURPOSE.—The purpose of the QTV Fund is to create a
   37  public-private partnership in the form of a revolving loan fund
   38  to administer a loan program for television production. The QTV
   39  Fund shall be privately managed under state oversight to
   40  incentivize the use of this state as a site for producing
   41  qualified television content and to develop and sustain the
   42  workforce and infrastructure for television content production.
   43         (3) CREATION.—The qualified television loan fund is created
   44  within the department. The QTV Fund shall be a public fund that
   45  is privately managed by the fund administrator under contract
   46  with the department. The department shall disburse the funds
   47  appropriated for this program to the fund administrator to
   48  invest in the QTV Fund during the existence of the program
   49  pursuant to this section and the contract between the fund
   50  administrator and the department. State funds in the QTV Fund
   51  may be used only to enter into loan agreements and to pay any
   52  administrative costs or other authorized fees under this
   53  section.
   54         (a) The QTV Fund shall be a revolving loan fund that
   55  invests and reinvests the principal and interest of the fund in
   56  accordance with s. 617.2104 in a manner so as to not subject the
   57  funds to state or federal taxes and to be consistent with the
   58  investment policy statement adopted by the fund administrator.
   59  As production companies repay the principal and interest to the
   60  QTV Fund, state funds, less any QTV Fund expenses, shall be
   61  returned to the account to be lent to subsequent borrowers.
   62         (b) Funds from the QTV Fund shall be disbursed by the fund
   63  administrator through a lending vehicle to make short-term loans
   64  pursuant to this section.
   65         (4) FUND ADMINISTRATOR.—
   66         (a) The department shall contract with a fund administrator
   67  by 90 days after funds are appropriated for the program, and
   68  award the contract in accordance with the competitive bidding
   69  requirements in s. 287.057.
   70         (b) The department shall select as fund administrator a
   71  private sector entity that demonstrates the ability to implement
   72  the program under this section and that meets the requirements
   73  set forth in this section. Preference shall be given to
   74  applicants that are headquartered in this state. Additional
   75  consideration may be given to applicants that have experience in
   76  the management of economic development or job creation-related
   77  funds. The qualifications for the fund administrator must
   78  include, but are not limited to:
   79         1. A demonstrated track record of managing private sector
   80  equity or debt funds in the entertainment and media industries.
   81         2. The ability to demonstrate through a partnership
   82  agreement that a qualified lending partner is in place which has
   83  the capability of providing leverage of a minimum of 2.5 times
   84  the capital amount of the QTV Fund, for financing the production
   85  cost of qualified television content in the form of senior debt.
   86         (c) For overseeing and administering the QTV Fund, the fund
   87  administrator shall be reimbursed for the costs the fund
   88  administrator incurs in establishing and operating the fund
   89  related to the state’s investment, which shall be paid from
   90  state funds in the QTV Fund. Any additional private investment
   91  capital in the segregated accounts is responsible for its own
   92  management fees. The fund administrator is entitled to a
   93  reasonable profit, but such distribution may not be made from
   94  the principal funds from the original appropriation.
   95         (d) The fund administrator shall provide services defined
   96  under this section for the duration of the QTV Fund term unless
   97  removed by the department. The contract between the department
   98  and the fund administrator shall set forth the circumstances
   99  under which the contract may be terminated.
  101         (a) Authority to contract.—The fund administrator may enter
  102  into agreements with qualified lending partners for concurrent
  103  lending through the QTV Fund. A loan made by the qualified
  104  lending partner must be accounted for separately from the state
  105  funds or other private investment capital. Such loan shall be
  106  made as senior debt. The fund administrator may raise private
  107  investment capital for mezzanine equity and other equity or
  108  raise junior capital for concurrent lending through the QTV
  109  Fund. However, loans from private investment capital may not be
  110  made at more favorable terms and conditions than the terms and
  111  conditions of the state funds in the QTV Fund. The state
  112  appropriation must be maintained in a separate account from
  113  private investment capital and administered in a separate legal
  114  investment entity or entities. Private investment capital and
  115  loans shall be segregated from each other, and funds may not be
  116  commingled.
  117         (b) General duties.—The fund administrator:
  118         1. Shall prudently manage the funds in the QTV Fund as a
  119  revolving loan fund.
  120         2. Shall contract with one or more qualified lending
  121  partners.
  122         3. Shall provide improvement of the credit profile of a
  123  structured financial transaction for qualified production
  124  companies that produce qualified television content meeting the
  125  criteria in subsection (7).
  126         4. May raise additional private investment capital to be
  127  held in separate accounts, in addition to the leverage provided
  128  by the qualified lending partner.
  129         5. Shall administer the QTV Fund in accordance with this
  130  part.
  131         6. Shall agree to maintain the recipient’s books and
  132  records relating to funds received from the department according
  133  to generally accepted accounting principles and in accordance
  134  with s. 215.97(7) and to make those books and records available
  135  to the department for inspection upon reasonable notice. The
  136  books and records must be maintained with detailed records
  137  showing the use of proceeds from loans to fund qualified
  138  television content.
  139         7. Shall maintain its registered office in this state
  140  throughout the duration of the contract.
  141         (c) Financial reporting.—The fund administrator shall
  142  annually submit to the department by February 28 audited
  143  financial statements for the preceding tax year which are
  144  audited by an independent certified public accountant after the
  145  end of each year in which the fund administrator is under
  146  contract with the department. In addition to providing an
  147  independent opinion on the annual financial statements, such
  148  audit provides a basis for verifying the segregation of state
  149  funds from those of any private investment capital.
  150         (d) Program reporting.—The fund administrator shall submit
  151  a report to the department by February 28 after the end of each
  152  year in which the fund administrator is under contract with the
  153  department. The report must include information on the loans
  154  made in the preceding calendar year, including:
  155         1. The name of the qualified television content.
  156         2. The names of the counties in which the production
  157  occurred.
  158         3. The number of jobs created and retained as a result of
  159  the production.
  160         4. The loan amounts, including the amount of private
  161  investment capital and funds provided by a qualified lending
  162  partner.
  163         5. The loan repayment status for each loan.
  164         6. The number and amounts of any loans with payments past
  165  due.
  166         7. The number and amounts of any loans in default.
  167         8. A description of the assets securing the loans.
  168         9. Other information and documentation required by the
  169  department.
  170         (e) Plan of accountability.—The fund administrator shall
  171  submit an annual plan of accountability of economic development,
  172  including a report detailing the job creation resulting from the
  173  QTV Fund loans made during the current year and cumulatively
  174  since the inception of the program. The fund administrator shall
  175  also provide any additional information requested by the
  176  department pertaining to economic development and job creation
  177  in the state.
  178         (f) Conflict-of-interest statement.—The fund administrator
  179  shall provide a conflict-of-interest statement from its
  180  governing board certifying that no board member, director,
  181  employee, agent, immediate family member thereof, or other
  182  person connected to or affiliated with the fund administrator is
  183  receiving or will receive any type of compensation or
  184  remuneration from a production company that has received or will
  185  receive funds from the loan program or from a qualified lending
  186  partner. The department may waive this requirement for good
  187  cause shown.
  188         (6) LOAN STRUCTURE.—
  189         (a) The QTV Fund may make loans to production companies to
  190  fund production costs or provide improvement of the credit
  191  profile of a structured financial transaction for qualified
  192  television content that meets the criteria requirements of
  193  subsection (7). To make a loan, the fund administrator shall
  194  consider the types of eligible collateral, the credit worthiness
  195  of the project, the producer’s track record, the possibility
  196  that the project will encourage, enhance, or create economic
  197  benefits, and the extent to which assistance would foster
  198  innovative public-private partnerships and attract private debt
  199  or equity investment.
  200         (b) The QTV Fund loan package shall be secured by
  201  contractual and predictable sources of repayment such as
  202  domestic and international broadcaster license agreements and
  203  other ancillary revenues that are derived from media content
  204  rights. Unsecured loans may not be made.
  205         (c) The loans shall be made on the basis of a second lien
  206  or primary security rights on the media assets listed in
  207  paragraph (b).
  208         (d) The QTV Fund shall provide funding only in conjunction
  209  with senior loans provided by a qualified lending partner. Loans
  210  from the fund may be subordinated to senior debt from the
  211  qualified lending partner and may not exceed 30 percent of the
  212  total production funding cost of any particular project.
  213         (e) The production company’s repayment of a loan shall be
  214  in accordance with the broadcast license agreement and the
  215  delivery of qualified television content to the major
  216  broadcaster and shall be within 60 days after such delivery.
  217         (f) Loans made by the QTV Fund may not exceed 36 months in
  218  duration, except for extenuating circumstances for which the
  219  fund administrator may grant an extension upon making written
  220  findings to the department specifying the conditions requiring
  221  the extension.
  222         (g) The fund administrator or a board member, employee, or
  223  agent thereof, or an immediate family member of a board member,
  224  employee, or agent, may not have a financial interest in an
  225  entity that is awarded a loan under a loan program and may not
  226  benefit directly or indirectly from the making of such loan. A
  227  loan may not be made to a person if it violates this paragraph.
  228  As used in this section, the term “immediate family” means a
  229  parent, child, or spouse, or other relative by blood, marriage,
  230  or adoption, of a board member, employee, or agent of the loan
  231  administrator.
  232         (h) Except for funds appropriated to the department for the
  233  loan program, the credit of the state may not be pledged. The
  234  state is not liable or obligated in any way for claims against
  235  the QTV Fund or against the fund administrator, the qualified
  236  lending partner, or the department.
  238  administrator must, at a minimum, consider the following
  239  criteria for evaluating the qualifying television content:
  240         (a) The content is intended for broadcast by a major
  241  broadcaster on a major network, cable, or streaming channel.
  242         (b) The content is produced in this state, or a minimum of
  243  80 percent of the production budget must be spent in this state.
  244  This requirement may be amended by the fund administrator upon
  245  notice to the department. Such notice must include a specific
  246  justification for the change and must be transmitted to the
  247  department in writing. The department has 10 business days to
  248  object to the change. If the department does not object within
  249  10 business days, the change is deemed acceptable by the
  250  department, and the fund administrator may grant the amendment.
  251         (c) If the content is a series, there is a programming
  252  order for at least 13 episodes. This requirement may be amended
  253  by the fund administrator upon notice to the department. Such
  254  notice must include a specific justification for the change and
  255  must be transmitted to the department in writing. The department
  256  has 10 business days to object to the change. If the department
  257  does not object within 10 business days, the change is deemed
  258  acceptable by the department, and the fund administrator may
  259  grant the amendment.
  260         (d) The producer must have a contract in place with a major
  261  broadcaster to acquire content programming under a customary
  262  broadcast license agreement and the contract must cover at least
  263  60 percent of the budget.
  264         (e) The producer must retain a foreign sales agent and must
  265  be able to provide the fund administrator with the foreign sales
  266  agent’s official estimates of foreign and ancillary sales.
  267         (f) The project must be bonded and secured by an industry
  268  approved completion guarantor if the production cost per episode
  269  exceeds $1 million. This requirement may be waived if the loan
  270  applicant provides the fund administrator with evidence of
  271  adequate structure to protect the state’s funds.
  272         (8) AUDITOR GENERAL AUDIT.—The Auditor General may conduct
  273  operational audits, as defined in s. 11.45, of the QTV Fund and
  274  fund administrator. The scope of audit must include, but is not
  275  limited to, internal controls evaluations, internal audit
  276  functions, reporting and performance requirements for the use of
  277  the funds, and compliance with state and federal law. The fund
  278  administrator shall provide to the Auditor General any detail or
  279  supplemental data required.
  280         (9) RULEMAKING AUTHORITY.—The department may adopt rules to
  281  administer this section.
  282         (10) EXPIRATION.—This section expires December 31, 2024, at
  283  which point all funds remaining in the QTV Fund revert to the
  284  General Revenue Fund.
  285         (11) EMERGENCY RULES.—
  286         (a) The executive director of the department is authorized,
  287  and all conditions are deemed met, to adopt emergency rules
  288  pursuant to ss. 120.536(1) and 120.54(4) for the purpose of
  289  implementing this section.
  290         (b) Notwithstanding any other law, the emergency rules
  291  adopted pursuant to paragraph (a) remain in effect for 6 months
  292  after adoption and may be renewed during the pendency of
  293  procedures to adopt permanent rules addressing the subject of
  294  the emergency rules.
  295         (c) This subsection expires October 1, 2015.
  296         Section 2. Effective July 1, 2015, paragraph (b) of
  297  subsection (2) of section 288.0001, Florida Statutes, is amended
  298  to read:
  299         288.0001 Economic Development Programs Evaluation.—The
  300  Office of Economic and Demographic Research and the Office of
  301  Program Policy Analysis and Government Accountability (OPPAGA)
  302  shall develop and present to the Governor, the President of the
  303  Senate, the Speaker of the House of Representatives, and the
  304  chairs of the legislative appropriations committees the Economic
  305  Development Programs Evaluation.
  306         (2) The Office of Economic and Demographic Research and
  307  OPPAGA shall provide a detailed analysis of economic development
  308  programs as provided in the following schedule:
  309         (b) By January 1, 2018 2015, and every 3 years thereafter,
  310  an analysis of the following:
  311         1. The entertainment industry financial incentive program
  312  established under s. 288.1254.
  313         2. The entertainment industry sales tax exemption program
  314  established under s. 288.1258.
  315         3. The VISIT Florida Tourism Industry Marketing Corporation
  316  and its programs established or funded under ss. 288.122,
  317  288.1226, 288.12265, and 288.124.
  318         4. The Florida Sports Foundation and related programs
  319  established under ss. 288.1162, 288.11621, 288.1166, 288.1167,
  320  288.1168, 288.1169, and 288.1171.
  321         5. The qualified television loan fund established under s.
  322  288.127.
  324  ================= T I T L E  A M E N D M E N T ================
  325  And the title is amended as follows:
  326         Delete line 1394
  327  and insert:
  328         An act relating to economic development; creating s.
  329         288.127, F.S.; providing definitions; providing a
  330         purpose; creating the qualified television loan fund;
  331         requiring the Department of Economic Opportunity to
  332         contract with a fund administrator; providing fund
  333         administrator qualifications; providing for the fund
  334         administrator’s compensation and removal; specifying
  335         the fund administrator powers and duties; providing
  336         the structure of the loans; providing qualified
  337         television content criteria; permitting the Auditor
  338         General to conduct an operational audit of the fund
  339         and the fund administrator; authorizing the Department
  340         of Economic Opportunity to adopt rules; providing for
  341         expiration of the act; providing emergency rulemaking
  342         authority; providing for expiration of the emergency
  343         rulemaking authority; amending s. 288.0001, F.S.;
  344         requiring an analysis of the qualified television loan
  345         fund in the Economic Development Programs Evaluation;
  346         amending s. 202.11, F.S.;