Florida Senate - 2016 COMMITTEE AMENDMENT
Bill No. SB 226
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LEGISLATIVE ACTION
Senate . House
Comm: RCS .
01/20/2016 .
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The Committee on Commerce and Tourism (Ring) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Delete lines 95 - 417
4 and insert:
5 Section 2. Subsections (1) and (2) of section 288.9622,
6 Florida Statutes, are amended, and subsection (5) is added to
7 that section, to read:
8 288.9622 Findings and intent.—
9 (1) The Legislature finds and declares that there is a need
10 to increase the availability of seed capital and early stage
11 venture equity capital for emerging companies in the state,
12 including, without limitation, enterprises in life sciences,
13 information technology, advanced manufacturing processes,
14 aviation and aerospace, and homeland security and defense, as
15 well as other strategic technologies and for the purpose of
16 supporting the public interest by leveraging public investment
17 in infrastructure funding.
18 (2) It is the intent of the Legislature that this part
19 serves ss. 288.9621-288.9625 serve to mobilize private
20 investment in a broad variety of venture capital partnerships in
21 diversified industries and geographies; retain private sector
22 investment criteria focused on rate of return; use the services
23 of highly qualified managers in the venture capital industry
24 regardless of location; facilitate the organization of the
25 Florida Opportunity Fund as an investor in seed and early stage
26 businesses, infrastructure projects, venture capital funds,
27 infrastructure funds, and angel funds; and precipitate capital
28 investment and extensions of credit to and in the Florida
29 Opportunity Fund.
30 (5) It is the intent of the Legislature that the Florida
31 Opportunity Fund create, manage, operate, and invest in and from
32 infrastructure funds, including the creation and operation of
33 the Florida Infrastructure Fund Partnership; and that Florida
34 Infrastructure Fund Partnership investments are focused on
35 infrastructure development that could assist in mitigating, in
36 whole or in part, the financial burden of the state for projects
37 that could be funded directly by public funds.
38 Section 3. Section 288.9623, Florida Statutes, is amended
39 to read:
40 288.9623 Definitions.—As used in this part, the term ss.
41 288.9621-288.9625:
42 (1) “Board” means the board of directors of the Florida
43 Opportunity Fund.
44 (2) “Commitment agreement” means a contract between the
45 partnership and an investment partner in which the partner
46 commits to providing a specified amount of investment capital in
47 exchange for an ownership interest in the partnership.
48 (3) “Contingent state revenue bonds” means state revenue
49 bonds that are contingent upon a net capital loss incurred by an
50 investment partner under s. 288.9629 and that are payable by the
51 Department of Revenue from certain revenues received by the
52 state under chapter 212, chapter 220, or ss. 624.509 and
53 624.5091.
54 (4) “Corporation” means the Florida Development Finance
55 Corporation.
56 (5)(2) “Fund” means the Florida Opportunity Fund.
57 (6) “Infrastructure project” means a capital project in
58 this state which addresses the need for a facility or other
59 strategic infrastructure that serves a public purpose, including
60 a water or a wastewater system, a communication system, a power
61 system, a transportation system, a renewable energy system,
62 other strategic infrastructure located in the state, or an
63 ancillary or support system for any such project.
64 (7) “Investment capital” means the total capital committed
65 by the investment partner, pursuant to a commitment agreement,
66 for an equity interest in the partnership.
67 (8) “Investment partner” or “partner” means a person other
68 than the partnership, the fund, or the trust that purchases or
69 is the transferee of an ownership interest in the partnership.
70 (9) “Net capital loss” means an amount equal to the
71 difference between the actual total investment capital advanced
72 by the investment partner to the partnership and the actual
73 amount of the aggregate distributions received by the investment
74 partner.
75 (10) “Partnership” means the Florida Infrastructure Fund
76 Partnership.
77 Section 4. Section 288.9628, Florida Statutes, is created
78 to read:
79 288.9628 Florida Infrastructure Fund Partnership; creation;
80 duties.—
81 (1) The Florida Opportunity Fund shall facilitate the
82 creation of the Florida Infrastructure Fund Partnership, which
83 shall be organized and operated under chapter 620 as a private,
84 for-profit limited partnership or limited liability partnership
85 with the fund as a general partner. The partnership shall manage
86 its business affairs and conduct business consistent with its
87 organizing documents and the purposes described in this section.
88 However, the partnership is not an instrumentality of the state.
89 (2) The primary purposes of the partnership are to raise
90 investment capital and to invest the capital in infrastructure
91 projects in the state which promote economic development by
92 leveraging private investment into public infrastructure
93 projects.
94 (3)(a) As the general partner of the partnership, the fund
95 shall manage the partnership’s business affairs. At a minimum,
96 the fund shall:
97 1. Hire one or more investment managers to assist with
98 management of the partnership and to oversee the raising and
99 investing of capital by the partnership. The evaluation of
100 candidates must address their level of experience, investment
101 philosophy and process, demonstrable success in fundraising, and
102 prior investment results. Only candidates who have maintained an
103 office with a full-time investment professional in this state
104 for at least 2 years before the solicitation may be considered.
105 2. With the assistance of the investment manager or other
106 service providers, solicit, negotiate the terms of, contract
107 for, and receive investment capital.
108 3. Receive investment returns.
109 4. Disburse returns to investment partners.
110 5. Approve investments.
111 (b) The fund may lend up to $750,000 to the partnership to
112 pay the initial expenses associated with the organization of the
113 partnership and solicitation of investment partners.
114 (4)(a) Beginning July 1, 2016, the partnership shall enter
115 into commitment agreements with investment partners for
116 investment in the partnership under terms approved by the fund’s
117 board.
118 (b) The total aggregate amount of principal investment
119 capital payable to the partnership under all commitment
120 agreements may not exceed $350 million. If the partnership does
121 not obtain commitment agreements totaling at least $100 million
122 by December 1, 2017, the partnership shall cancel any executed
123 agreement and return the investment capital of each investment
124 partner who executed an agreement.
125 (5)(a) The partnership may invest only in an infrastructure
126 project:
127 1. That fulfills an important infrastructure need in the
128 state which could otherwise be funded by public investment.
129 2. That raises funding from other sources so that the total
130 amount invested in the project is at least twice the amount
131 invested by the partnership, inclusive of the partnership’s
132 investment.
133 3. For which legal measures exist, appropriate to the
134 individual project, to ensure that the project is not closed due
135 to fraud, to the detriment of the residents of the state.
136 (b) The partnership may not invest more than 20 percent of
137 its total available investment capital in any single
138 infrastructure project.
139 (c) The partnership may not invest in any infrastructure
140 project that involves any phase of a project authorized under
141 the Florida Rail Enterprise Act, ss. 341.8201-341.842.
142 (6) Before investing in an infrastructure project, the
143 partnership shall assess whether the project will provide a
144 continuing benefit to the residents of the state and evaluate
145 the following:
146 (a) A written business plan for the project, including all
147 expected revenue sources.
148 (b) The likelihood that the project will attract operating
149 capital from additional investors, other lenders, or grants.
150 (c) The management team for the proposed project.
151 (d) The project’s potential for job creation in the state.
152 (e) The financial resources of the entity proposing the
153 project.
154 (f) Other factors that are consistent with this section and
155 that are deemed by the partnership to be relevant to the
156 likelihood of the project’s success and public benefit derived
157 from the investment.
158 (7) Beginning December 1, 2016, and each December 1
159 thereafter, the partnership shall submit an annual report of its
160 activities to the Governor, the President of the Senate, and the
161 Speaker of the House of Representatives. The annual report must
162 include, at a minimum:
163 (a) An accounting of the amounts of investment capital
164 raised and disbursed by the partnership and the progress of the
165 partnership, including the progress of each infrastructure
166 project in which the partnership has invested.
167 (b) A description of the costs and benefits to the state of
168 the partnership’s investment in infrastructure projects,
169 including a list of such projects; the costs and benefits of
170 such projects to the state and, if applicable, to the county or
171 municipality in which the project is located; the number of
172 businesses and associated industries affected; the number and
173 types of jobs created or retained, and the average annual wages
174 of such jobs; and the impact on the state economy.
175 (c) Independently audited financial statements, including
176 statements that show receipts and expenditures from the
177 preceding fiscal year for the operational costs of the
178 partnership.
179 (8) The partnership may not make its debts payable from any
180 moneys or resources other than those of the partnership. An
181 obligation of the partnership is not an obligation of the state
182 or any political subdivision thereof and is payable exclusively
183 from the partnership’s resources.
184 (9) The partnership may not invest in an infrastructure
185 project with, or accept investment capital from, a prohibited
186 company described in s. 215.472 or a scrutinized company as
187 defined in s. 215.473, and the entity owning an infrastructure
188 project in which the partnership has invested must provide
189 reasonable assurances to the partnership that the entity will
190 not provide such a prohibited company or scrutinized company
191 with an ownership interest in the infrastructure project.
192 Section 5. Section 288.9629, Florida Statutes, is created
193 to read:
194 288.9629 Issuance of contingent state revenue bonds for the
195 Florida Infrastructure Fund Partnership.—
196 (1)(a) Pursuant to s. 288.9628 and this section, the
197 Florida Development Finance Corporation shall issue contingent
198 state revenue bonds to investment partners in the Florida
199 Infrastructure Fund Partnership in a maximum amount equal to the
200 investment capital committed by such investment partners to the
201 partnership.
202 (b) The corporation and the fund may seek reimbursement for
203 their respective reasonable costs and expenses related to the
204 partnership by charging a fee for the issuance of contingent
205 state revenue bonds to investment partners. The fee may be up to
206 0.25 percent of the aggregate investment capital committed to
207 the partnership by the investment partners who are issued bonds.
208 (c) The total aggregate amount of all contingent state
209 revenue bonds issued by the corporation may not exceed $350
210 million.
211 (d) A contingent state revenue bond must be issued
212 concurrently with a commitment agreement between the investment
213 partner and the partnership. A contingent state revenue bond
214 issued by the corporation must include a specific calendar year
215 maturity date designated by the corporation, which must be at
216 least 12 years after the date of the agreement. Contingent state
217 revenue bonds may be claimed or redeemed only by an investment
218 partner or purchaser in accordance with this section and the
219 terms of the contingent state revenue bond.
220 (e) After the investment capital is committed to the
221 partnership by an investment partner and a contingent state
222 revenue bond is issued to the investment partner, the bond is
223 binding, and the partnership, the trust, the state, the
224 Department of Revenue, and the Florida Development Finance
225 Corporation may not substantively modify, terminate, or rescind
226 the related contingent state revenue bond. A contingent state
227 revenue bond may be modified to reflect the assignment or sale
228 of contingent state revenue bonds and for other administrative
229 purposes.
230 (2)(a) The partnership shall provide written notice to each
231 investment partner if, on the maturity date in its commitment
232 agreement, the partner has a net capital loss. At a minimum, the
233 notice must include:
234 1. A good faith estimate of the fair market value of the
235 partnership’s assets as of the date of the notice.
236 2. The total investment capital provided by all investment
237 partners as of the date of the notice.
238 3. The total amount of distributions received by the
239 investment partners.
240 4. The amount payable by the Department of Revenue pursuant
241 to the contingent state revenue bonds to which the investment
242 partner is entitled.
243 (b) The partnership shall concurrently provide a copy of
244 each such notice to the corporation.
245 (c) Upon receipt of the notice from the partnership, each
246 affected investment partner may make a one-time election to:
247 1. Transfer its ownership interest in the partnership and
248 seek payment on the contingent state revenue bond in accordance
249 with the bond’s terms; or
250 2. Maintain the partner’s investment in the partnership.
251 (d) The one-time election authorized in paragraph (c) is
252 final and may not be revoked or modified. However, if the
253 investment partner elects to maintain its investment in the
254 partnership, it may make a new election if it receives a
255 subsequent notice pursuant to subsection (2).
256 (e) An investment partner shall provide written notice to
257 the partnership and the corporation of its election within 30
258 days after its receipt of the notice from the partnership. If an
259 investment partner fails to timely provide such notice, the
260 investment partner is deemed to have elected to maintain its
261 investment in the partnership under subparagraph (c)2.
262 (3) If an investment partner makes the election under
263 subparagraph (2)(c)1., the investment partner must agree in
264 writing to transfer its ownership interest in the partnership to
265 the fund.
266 (4)(a) The corporation may not issue more than $350 million
267 in contingent state revenue bonds and may not approve contingent
268 state revenue bonds in excess of the total capital committed
269 through commitment agreements.
270 (b) At any time 90 days or more after the date of such
271 owner’s election under paragraph (2)(c), contingent state
272 revenue bonds issued by the corporation under this section may
273 be claimed for payment by the owner of such bonds by the
274 Department of Revenue from revenues received by the state under
275 chapter 212, chapter 220, or ss. 624.509 and 624.5091.
276 (c) The amount of contingent state revenue bonds which may
277 be claimed by the owner of the bonds in any given state fiscal
278 year may not exceed an amount equal to $75 million multiplied by
279 a fraction, the numerator of which is the amount of bonds that
280 the corporation issued to such owner and the denominator of
281 which is the total amount of all bonds that the corporation
282 issued to contingent state revenue bond owners.
283 (d) Contingent state revenue bonds issued by the
284 corporation under this section may be used by the owner of the
285 bonds.
286 (e) To the extent that contingent state revenue bonds
287 issued under this section are used by their owner to obtain
288 payment from the state, the amount of such bonds becomes an
289 obligation to the state by the partnership, secured exclusively
290 by the ownership interest transferred to the fund by the
291 investment partner whose investment generated the contingent
292 state revenue bonds. In such case, the state’s recovery is
293 limited to such forfeited ownership interest. The corporation
294 shall account for contingent state revenue bonds used under this
295 section and make such information available to the partnership.
296 The fund, as general partner, is not liable to the state for
297 repayment of the used contingent state revenue bonds.
298 (f) Contingent state revenue bonds issued under this
299 section are transferable in whole or in part by their owner. An
300 owner of contingent state revenue bonds must notify the
301 corporation of any such transfer.
302 (5) The Department of Revenue, upon the request of the
303 partnership, shall provide the partnership or an investment
304 partner with a written assurance that the contingent state
305 revenue bonds will be honored by the corporation and the
306 Department of Revenue as provided in this section.
307 (6) Chapter 517 does not apply to contingent state revenue
308 bonds transferred or sold under this section.
309 Section 6. Paragraph (cc) is added to subsection (8) of
310 section 213.053, Florida Statutes, to read:
311 213.053 Confidentiality and information sharing.—
312 (8) Notwithstanding any other provision of this section,
313 the department may provide:
314 (cc) Information relating to contingent state revenue bonds
315 under
316
317 ================= T I T L E A M E N D M E N T ================
318 And the title is amended as follows:
319 Delete lines 4 - 86
320 and insert:
321 conforming a provision to changes made by the act;
322 amending s. 288.9622, F.S.; modifying legislative
323 findings and intent relating to the need for seed
324 capital and venture equity capital to include
325 infrastructure funding; conforming a provision to
326 changes made by the act; amending s. 288.9623, F.S.;
327 defining terms; conforming a provision to changes made
328 by the act; creating s. 288.9628, F.S.; creating the
329 Florida Infrastructure Fund Partnership as a private,
330 for-profit limited partnership or limited liability
331 partnership; providing for management of the
332 partnership by the Florida Opportunity Fund; providing
333 that the partnership is not an instrumentality of the
334 state; providing the partnership’s purposes and
335 duties; authorizing the fund to lend moneys to the
336 partnership; requiring the partnership to enter into
337 commitment agreements with investment partners;
338 providing requirements for commitment agreements;
339 limiting the infrastructure projects that a
340 partnership may invest in; prohibiting the partnership
341 from investing more than a specified percentage of its
342 total available investment capital in any single
343 infrastructure project; prohibiting the partnership
344 from investing in any infrastructure project that
345 involves a project authorized under the Florida Rail
346 Enterprise Act; providing evaluation requirements for
347 infrastructure projects; requiring the partnership to
348 submit an annual report to the Governor and the
349 Legislature; prohibiting the partnership from making
350 its debts payable from any money or resources other
351 than those of the partnership; prohibiting the
352 partnership from investing in projects with or
353 accepting investments from certain companies; creating
354 s. 288.9629, F.S.; requiring the Florida Development
355 Finance Corporation to issue contingent state revenue
356 bonds to investment partners in the Florida
357 Infrastructure Fund Partnership; authorizing the
358 corporation and the fund to charge fees; limiting the
359 amount of such fees; prohibiting the total aggregate
360 amount of all contingent state revenue bonds from
361 exceeding a specified amount; requiring a contingent
362 state revenue bond to be issued concurrently with a
363 certain commitment agreement; providing requirements
364 for such bonds; requiring the partnership to provide a
365 specified written notice to each investment partner
366 under certain circumstances; specifying the minimum
367 content for such notice; requiring the partnership to
368 concurrently provide a copy of the notice to the
369 corporation; authorizing each affected investment
370 partner to make specified one-time elections upon the
371 receipt of the notice; providing that such elections
372 are final and may not be revoked or modified;
373 requiring an investment partner to provide written
374 notice to the partnership and the corporation of its
375 election within a specified period after its receipt
376 of notice from the partnership; requiring an
377 investment partner to agree in writing to a certain
378 transfer under certain circumstances; prohibiting the
379 corporation from issuing contingent state revenue
380 bonds in excess of a specified amount; prohibiting the
381 corporation from approving contingent state revenue
382 bonds in excess of a specified amount; authorizing the
383 owner of contingent state revenue bonds to claim such
384 bonds; prohibiting the owner of contingent state
385 revenue bonds from claiming bonds in excess of a
386 specified amount; providing that contingent state
387 revenue bonds become an obligation to the state by the
388 partnership in certain circumstances; requiring the
389 corporation to account for such bonds and make such
390 information available to the partnership; providing
391 that the fund, as general partner, is not liable to
392 the state for the repayment of used contingent state
393 revenue bonds; providing that contingent state revenue
394 bonds issued under this section are transferable in
395 whole or in part by their owner; requiring the
396 Department of Revenue to provide a certain written
397 assurance to the partnership under certain
398 circumstances; providing applicability; amending s.
399 213.053, F.S.; authorizing the department to disclose
400 certain information to the partnership and the
401 corporation relative to certain contingent state
402 revenue