Florida Senate - 2018 COMMITTEE AMENDMENT Bill No. SB 1606 Ì533118"Î533118 LEGISLATIVE ACTION Senate . House Comm: RCS . 02/20/2018 . . . . ————————————————————————————————————————————————————————————————— ————————————————————————————————————————————————————————————————— The Committee on Commerce and Tourism (Taddeo) recommended the following: 1 Senate Amendment (with title amendment) 2 3 Delete everything after the enacting clause 4 and insert: 5 Section 1. Section 288.1259, Florida Statutes, is created 6 to read: 7 288.1259 Florida Motion Picture Capital Corporation.— 8 (1) DEFINITIONS.—As used in this section, the term: 9 (a) “Account” means the Florida Motion Picture Capital 10 Account. 11 (b) “Board” means the corporation’s board of directors. 12 (c) “Corporation” means the Florida Motion Picture Capital 13 Corporation. 14 (d) “High-wage jobs” are jobs that pay at least 120 percent 15 of the median wage for the arts, design, entertainment, sports, 16 and media occupations category as determined by the most recent 17 State Occupational Employment and Wage Estimates for this state 18 published by the United States Department of Labor’s Bureau of 19 Labor Statistics. 20 (e) “In-state expenditures” means the costs of tangible 21 property used in this state and services performed by residents 22 of this state for a scripted production, including preproduction 23 and postproduction, but excluding costs for development, 24 marketing, and distribution. 25 (f) “President” means the chief executive officer of the 26 corporation. 27 (g) “Scripted production” or “production” means a feature 28 film at least 70 minutes in length, whether produced for 29 theatrical, television, or direct-to-video release; a television 30 series created to run multiple seasons having an order for 31 distribution of at least five episodes; or a miniseries, which 32 is produced predominately from a written screenplay or teleplay. 33 The term does not include a commercial, an infomercial, or a 34 political advertisement; a reality show; a game show; an awards 35 show; a music video; an industrial or educational film; a 36 weather or market program; a sporting event or sporting event 37 broadcast; a gala; a production that solicits funds; a home 38 shopping program; a political program; a documentary; a 39 gambling-related production; a concert production; a local, 40 regional, or Internet-distributed-only news show or current 41 events show; a sports news or sports recap show; a video game; a 42 pornographic production; or any production deemed obscene under 43 chapter 847. 44 (h) “Television” includes broadcast, cable, and Internet 45 television. 46 (2) CORPORATION.—The Florida Motion Picture Capital 47 Corporation is created as a nonprofit corporation, to be 48 incorporated under chapter 617 and approved by the Department of 49 State. The corporation shall be organized on a nonstock basis. 50 The purpose of the corporation is to encourage the use of this 51 state as a site for scripted productions by providing financing 52 to such productions. The corporation is subject to the 53 provisions of chapter 119 relating to public records and the 54 provisions of chapter 286 relating to public meetings and 55 records. 56 (3) POWERS AND LIMITATIONS.— 57 (a) The corporation is authorized to provide financing to 58 scripted productions in this state pursuant to the criteria, 59 bylaws, rules, and policies adopted by the board, which must 60 include the following: 61 1. The corporation shall provide financing to productions 62 that it estimates will generate the greatest economic impact to 63 this state. 64 2. The amount of financing provided to a production must 65 not exceed the amount of the production’s in-state expenditures 66 for that production. 67 3. The financing provided to a production must rank and 68 remain pari passu with the highest class of ownership in the 69 production, such that, in the event of liquidation or 70 bankruptcy, the corporation’s investment shares the highest 71 priority with other preferred shareholders. 72 4. Any financing provided under this section must be less 73 than one-half of the cost of the production’s total shares or 74 other ownership interest. 75 5. The amount of financing provided to any one production 76 must not exceed 12.5 percent of the sum of the remaining amount 77 of uncommitted funds in the account plus the amounts of all 78 outstanding investments in other productions. 79 6. The corporation may not have any voting rights, creative 80 control, or management authority over a production receiving 81 financing under this section. 82 7. The corporation shall limit the return on its 83 investments by establishing variable limits on returns that 84 account for time value and reduce returns in exchange for a 85 production’s early buyout of financing positions. For a 86 production exercising an early buyout, the corporation shall 87 limit its return on investment to the minimum that is 88 actuarially measurable and credible and sufficiently related to 89 actual and expected losses to ensure the corporation’s self 90 sufficiency and preservation of the state appropriations 91 provided for the investment. 92 8. The corporation shall establish an application process 93 and conduct at least two application periods per fiscal year, 94 providing no more than 40 percent of the total funds in the 95 account for the fiscal year to productions in any one 96 application period. 97 (b) The board shall adopt objective criteria for evaluating 98 applications for financing scripted productions in this state. 99 1. The criteria must require: 100 a. The production to use a bonded third-party collection 101 account management firm to ensure that the corporation receives 102 all funds due from sales proceeds in accordance with a waterfall 103 agreement included in the corporation’s investment terms. 104 b. Presales or sales estimates from a sales agency that has 105 sold at least $50 million in feature films which are based on 106 the cast and script of the production and which reflect a value 107 of at least 1.5 times the exposure of the corporation. 108 c. The production to carry an insurance package from an 109 insurance company rated “A” or higher by A.M. Best Company which 110 must include general liability insurance, workers’ compensation, 111 and key cast and director insurance that covers the costs of 112 disruption or replacement downtime in the event of illness or 113 other loss of services from such individuals. If at least 75 114 percent of the production’s filming schedule occurs after June 1 115 and before November 30, the production’s insurance package must 116 include hurricane coverage. 117 d. The production to provide proof of funds for the 118 remaining budget within 60 days after application approval and 119 place the remaining budget in escrow before the release of 120 corporation funds. 121 e. That the lead producer or production company has 122 completed, sold, and delivered at least five feature films, or 123 the production must provide a completion bond. 124 f. That the production’s budget, script, and filming 125 schedule have been evaluated and approved by a production expert 126 selected by the board. 127 g. The production budget to include contingency funds in an 128 amount equal to at least 5 percent of the total budget. Up to 40 129 percent of the contingency funds may be expended during 130 production without the approval of the board. The remaining 131 contingency funds may only be expended with prior approval of 132 the board. 133 h. The board to release corporation funds to a production 134 in the following manner: 135 (I) Fifty percent of corporation funds shall be released on 136 the first day of principal photography. 137 (II) Twenty-five percent of corporation funds shall be 138 released upon completion of principal photography. 139 (III) Twenty-five percent of corporation funds shall be 140 released after final picture lock, as that term is generally 141 understood in the production industry. 142 i. The production company to provide the board with the 143 right to inspect and audit the weekly cost reports and general 144 ledger of the production throughout preproduction, production, 145 and postproduction. 146 2. Preference shall be given to: 147 a. Productions that will generate the greatest comparative 148 economic impact for this state. The corporation shall make a 149 determination of each project’s comparative economic impact to 150 this state by comparing the project budgets submitted during the 151 application period and determining which projects create the 152 greatest number of high-wage jobs for state residents and 153 propose the most significant in-state expenditures as a 154 percentage of total production expenditures. 155 b. Productions in which the proposed financing by the 156 corporation is lowest as a percentage of the production’s total 157 shares or other ownership interest. 158 c. Productions with the quickest deployment, in which the 159 production’s in-state expenditures will begin soonest after the 160 corporation commits to financing. 161 d. Productions by companies with a verifiable track record 162 in producing successful productions. 163 e. Productions by production companies based in this state 164 or by producers, writers, or directors who are residents of this 165 state. 166 f. Productions expected to significantly increase tourism 167 to the state by using a screenplay or teleplay based on a 168 Florida story or including recognizable locations in this state. 169 g. Productions whose development demonstrates the 170 likelihood of success, including, but not limited to, having a 171 recognized director, actor, or other creative talent attached to 172 the production. 173 h. Productions in which the corporation’s financing is 174 matched from local sources, including, but not limited to, 175 county or municipal agencies, local film commissions, or other 176 community resources. 177 (c) The corporation may charge fees, including, but not 178 limited to, application fees from productions seeking financing 179 under this section, but such fees may not exceed the reasonable 180 estimated cost of the activity for which the fee is charged, 181 such as the cost of processing an application. 182 (4) BOARD OF DIRECTORS; POWERS AND DUTIES.— 183 (a)1. The board shall consist of seven members who are 184 permanent residents of this state. Minority and gender 185 representation must be considered when making appointments to 186 the board. The board shall be composed of the following: 187 a. Two members who have experience in investment banking 188 and funds management focused on feature film and television 189 production. 190 b. Three members who have recent experience and are 191 recognized leaders in the production of feature films or 192 television in this state. Such members may include, but are not 193 limited to, producers, directors, production managers or 194 supervisors, or similar persons in positions of production 195 leadership. 196 c. One member who represents businesses that provide 197 supplies for feature film and television production in this 198 state, such as small businesses through which productions buy or 199 rent equipment, house and feed cast and crew, purchase supplies 200 and raw materials, or build production infrastructure. 201 d. One member who represents this state’s feature film and 202 television workforce. 203 2. The initial board shall be appointed as follows: 204 a. The Florida Venture Forum and the Florida Chamber of 205 Commerce shall each appoint one member pursuant to sub 206 subparagraph 1.a. 207 b. The Governor, the President of the Senate, and the 208 Speaker of the House of Representatives shall each appoint one 209 member pursuant to sub-subparagraph 1.b. 210 c. The department shall appoint one member pursuant to sub 211 subparagraph 1.c. 212 d. The Congress of Motion Picture Associations of Florida 213 shall appoint one member pursuant to sub-subparagraph 1.d. 214 215 To establish staggered terms, the initial members appointed by 216 the Florida Chamber of Commerce and the Congress of Motion 217 Picture Associations of Florida shall be appointed to 1-year 218 terms; the initial members appointed by the President of the 219 Senate and the Speaker of the House of Representatives shall be 220 appointed to 2-year terms; and the initial members appointed by 221 the Governor, the department, and the Florida Venture Forum 222 shall be appointed to 3-year terms. 223 3. Board members shall serve for a term of 3 years and are 224 eligible for reappointment. Vacancies shall be filled by 225 appointment in the same manner as the member whose position is 226 being filled. Vacancies shall be filled within 30 days after the 227 date of the vacancy. A vacancy that occurs before the scheduled 228 expiration of the term of a member shall be filled for the 229 remainder of the unexpired term. 230 (b) Board members are subject to the Code of Ethics for 231 Public Officers and Employees as set forth in part III of 232 chapter 112. A board member must abstain from voting and comply 233 with the disclosure requirements of s. 112.3143 if there appears 234 to be a possible conflict under s. 112.311, s. 112.313, or s. 235 112.3143. This paragraph does not prohibit any principal by whom 236 a board member is retained, as defined in s. 112.3143(1)(a), 237 from applying for or receiving financing under this section. 238 (c) A board member must, with respect to an application for 239 financing which is currently pending before the corporation or 240 which the board member knows or reasonably expects will be 241 submitted to the corporation within 180 days, refrain from 242 commenting on or discussing the application outside of a board 243 meeting with the applicant or any person retained by the 244 applicant. 245 (d) Board members shall serve without compensation but may 246 be reimbursed in accordance with s. 112.061 for all necessary 247 expenses in the performance of their duties, including attending 248 board meetings and conducting board business. 249 (e) The board shall: 250 1. Before the expenditure of funds from the account, adopt 251 bylaws, rules, and policies that are necessary to carry out the 252 corporation’s responsibilities under this section. 253 2. Hold regularly scheduled meetings, at least once per 254 application period, in order to carry out the objectives and 255 responsibilities of the board. 256 (5) ACCOUNT.— 257 (a) The board shall create the account for the purpose of 258 receiving state, federal, county, municipal, and private 259 financial resources, and the returns from productions financed 260 by allocations from those resources, and for the purposes of 261 this section. The account shall be under the exclusive control 262 of the board. 263 (b) Appropriations provided to the corporation for 264 financing productions shall be deposited into the account. 265 (c) The board may deposit the funds of the account with 266 state or federally chartered financial institutions in this 267 state and may invest any funds not allocated to a production 268 during a fiscal year in permissible securities as described in 269 s. 560.210(1). 270 (d) Dividend payments received from the investments made by 271 the corporation shall be redeposited into the account to be used 272 for the purposes of this section. 273 (e) The corporation shall keep its operating expenses to 274 the minimum amount necessary. Such operating expenses shall be 275 funded by appropriations provided for that purpose and from net 276 returns from financing provided under this section. 277 (f) Any claims against the account shall be paid solely 278 from the account. Under no circumstances shall the credit of the 279 state be pledged other than funds appropriated by law to the 280 account, nor shall the state be liable or obligated in any way 281 for claims on the account or against the corporation. 282 (6) PRESIDENT OF THE CORPORATION.— 283 (a) The board shall appoint a president. The president must 284 be knowledgeable about private and public financing of feature 285 film and television projects. 286 (b) The president shall serve at the pleasure of the board 287 and shall receive a salary and benefits as fixed by the board. 288 The president’s salary and benefits may not exceed the salary 289 and benefits authorized to be paid to the Governor. 290 (c) The president shall administer the programs of the 291 corporation and perform such duties as delegated by the board. 292 (d) The president shall provide support staff to the board 293 as requested. 294 (e) The president shall submit an annual budget to be 295 approved by the board. 296 (7) PUBLIC NOTICE OF FINANCING; ANNUAL REPORT; AUDIT.— 297 (a) The corporation shall notify the department upon final 298 execution of each contract or agreement by which the corporation 299 provides financing to a production. The corporation shall also 300 publish and maintain a copy of the notice on the corporation’s 301 website while the financing remains outstanding. To provide 302 adequate notice to the businesses and workforce that supply 303 feature film and television production in this state, the notice 304 must include, but need not be limited to, a brief description of 305 the production, the name of the production company, and, to the 306 extent available, the names of the director, cinematographer, 307 production designer, costume designer, and transportation 308 coordinator. 309 (b) The corporation shall submit a report to the department 310 on all corporation activities for the previous fiscal year as a 311 supplement to the department’s annual report required under s. 312 20.60. This supplemental report must include: 313 1. A status report on all projects currently being financed 314 through the corporation, the number of projects financed 315 pursuant to this section, the dollar amount of financing 316 provided to such projects, and the names of the recipients; and 317 2. Information as to the economic impact of the projects 318 financed by the corporation. 319 (c) The Auditor General shall annually conduct a financial 320 audit, as defined in s. 11.45, of the corporation and the 321 account. 322 Section 2. Paragraph (b) of subsection (10) of section 323 20.60, Florida Statutes, is amended to read 324 20.60 Department of Economic Opportunity; creation; powers 325 and duties.— 326 (10) The department, with assistance from Enterprise 327 Florida, Inc., shall, by November 1 of each year, submit an 328 annual report to the Governor, the President of the Senate, and 329 the Speaker of the House of Representatives on the condition of 330 the business climate and economic development in the state. 331 (b) The report must incorporate annual reports of other 332 programs, including: 333 1. Information provided by the Department of Revenue under 334 s. 290.014. 335 2. Information provided by enterprise zone development 336 agencies under s. 290.0056 and an analysis of the activities and 337 accomplishments of each enterprise zone. 338 3. The Economic Gardening Business Loan Pilot Program 339 established under s. 288.1081 and the Economic Gardening 340 Technical Assistance Pilot Program established under s. 341 288.1082. 342 4. A detailed report of the performance of the Black 343 Business Loan Program and a cumulative summary of quarterly 344 report data required under s. 288.714. 345 5. The Rural Economic Development Initiative established 346 under s. 288.0656. 347 6. The Florida Unique Abilities Partner Program. 348 7. The Florida Motion Picture Capital Corporation 349 established under s. 288.1259. 350 Section 3. This act shall take effect July 1, 2018. 351 352 ================= T I T L E A M E N D M E N T ================ 353 And the title is amended as follows: 354 Delete everything before the enacting clause 355 and insert: 356 A bill to be entitled 357 An act relating to film and television production; 358 creating s. 288.1259, F.S.; defining terms; 359 establishing the Florida Motion Picture Capital 360 Corporation to encourage the use of this state as a 361 site for scripted productions by providing financing 362 to certain productions; providing powers of and 363 imposing limitations on the corporation; requiring the 364 board of directors to adopt specified criteria for 365 evaluating applications for financing; requiring 366 productions to use a bonded third-party collection 367 account management firm; requiring that certain 368 presales or sales estimates meet a specified minimum 369 value; requiring productions to carry an insurance 370 package meeting certain standards; requiring 371 productions to provide certain proof of funds within a 372 specified period; requiring that the lead producer or 373 production company have a specified sales record or 374 provide a completion bond; requiring that certain 375 items be evaluated and approved by a production expert 376 selected by the board; requiring that the production 377 budget include a certain amount of contingency funds; 378 providing for the release of corporation funds 379 according to a specified schedule; requiring the board 380 to approve the expenditure of certain contingency 381 funds; requiring the board to release corporation 382 funds to a production in a specified manner; requiring 383 the production company to allow the board to inspect 384 and audit certain reports and ledgers within a certain 385 timeframe; requiring the board to give preference to 386 productions that meet specified criteria; authorizing 387 the corporation to charge certain fees; requiring the 388 board to be composed of certain members; providing for 389 the appointment of the board, terms for the board, and 390 guidelines for the board; prohibiting board members 391 from discussing certain pending applications with 392 applicants outside of a board meeting for a specified 393 period; requiring board members to serve without 394 compensation; authorizing the board members to be 395 reimbursed for certain expenses; requiring the board 396 to adopt bylaws, rules, and policies before the 397 expenditure of funds; requiring the board to hold 398 regularly scheduled meetings; requiring the board to 399 create the Florida Motion Picture Capital Account and 400 maintain exclusive control of the account; authorizing 401 the board to deposit funds with certain institutions 402 and to invest certain funds in permissible securities; 403 requiring that certain dividend payments be 404 redeposited in the account for a specified purpose; 405 requiring that the corporation’s operating expenses be 406 kept to a minimum and funded by appropriations and 407 certain net returns; requiring that a claim against 408 the account be solely paid from the account; requiring 409 the board to appoint a president who meets specified 410 criteria; limiting the salary and benefits of the 411 president; providing the powers and duties of the 412 president; requiring the corporation to provide 413 certain notice of financing contracts or agreements to 414 the Department of Economic Opportunity and on the 415 corporation’s website for a specified period of time; 416 requiring that the notice include specified 417 information; requiring the corporation to submit a 418 supplemental report to the department which contains 419 certain information; requiring the Auditor General to 420 conduct an annual financial audit of the corporation 421 and the account; amending s. 20.60, F.S.; conforming a 422 provision to changes made by the act; providing an 423 effective date.