Bill Text: FL S0252 | 2011 | Regular Session | Introduced


Bill Title: Florida Infrastructure Fund Partnership

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2011-01-12 - Withdrawn from Commerce and Tourism; Governmental Oversight and Accountability; Budget [S0252 Detail]

Download: Florida-2011-S0252-Introduced.html
       Florida Senate - 2011                                     SB 252
       
       
       
       By Senator Ring
       
       
       
       
       32-00092-11                                            2011252__
    1                        A bill to be entitled                      
    2         An act relating to the Florida Infrastructure Fund
    3         Partnership; amending s. 288.9622, F.S.; providing
    4         legislative intent to increase the availability of
    5         later stage venture equity capital and infrastructure
    6         funding; amending s. 288.9623, F.S.; providing
    7         definitions; creating s. 288.9627, F.S.; creating the
    8         Florida Infrastructure Fund Partnership; specifying
    9         the purpose and duties of the partnership, which is to
   10         facilitate investment in the state’s infrastructure;
   11         authorizing the partnership to enter into agreements
   12         with investors by a certain date; providing investment
   13         criteria; requiring an annual report to the Governor
   14         and Legislature; providing limitations; creating s.
   15         288.9628, F.S.; creating the Florida Infrastructure
   16         Investment Trust; providing membership; providing
   17         duties; authorizing the trust to issue certificates to
   18         investors, which are redeemable as tax credits;
   19         providing procedures and requirements for submitting
   20         an application to the Department of Revenue for a tax
   21         credit; providing that a certificate and any related
   22         tax credit may be sold and transferred; providing how
   23         the credits may be used; requiring the department to
   24         adopt rules; requiring the trust to develop systems
   25         for registering and verifying tax credits; providing
   26         an effective date.
   27  
   28  Be It Enacted by the Legislature of the State of Florida:
   29  
   30         Section 1. Section 288.9622, Florida Statutes, is amended
   31  to read:
   32         288.9622 Findings and intent.—
   33         (1) The Legislature finds and declares that there is a need
   34  exists to increase the availability of seed capital, and early
   35  and later stage venture equity capital, and infrastructure
   36  funding for businesses or projects emerging companies in the
   37  state, including, without limitation, enterprises in life
   38  sciences, information technology, advanced manufacturing
   39  processes, aviation and aerospace, infrastructure, and homeland
   40  security and defense, as well as other strategic technologies.
   41         (2) It is the intent of The Legislature intends that the
   42  provisions of this part ss. 288.9621-288.9625 serve to mobilize
   43  private investment in a broad variety of venture capital
   44  partnerships in diversified industries and geographies; retain
   45  private sector investment criteria focused on rate of return;
   46  use the services of highly qualified managers in the venture
   47  capital industry regardless of location; facilitate the
   48  organization of the Florida Opportunity Fund as an investor in
   49  seed and early and later stage businesses, infrastructure
   50  projects, venture capital funds, infrastructure funds, and angel
   51  funds; and precipitate capital investment and extensions of
   52  credit to and in the Florida Opportunity Fund.
   53         (3) It is the intent of The Legislature intends to mobilize
   54  venture equity capital for investment in such a manner that
   55  creates as to result in a significant potential to create new
   56  businesses and jobs in this state which that are based on high
   57  growth potential technologies, products, or services and that
   58  will further diversify the economy of this state.
   59         (4) It is the intent of The Legislature intends that an
   60  institute be created to mentor, market, and attract capital to
   61  such commercialization ventures throughout the state.
   62         Section 2. Section 288.9623, Florida Statutes, is amended
   63  to read:
   64         288.9623 Definitions.—As used in this part, the term ss.
   65  288.9621-288.9625:
   66         (1) “Board” means the board of directors of the Florida
   67  Opportunity Fund.
   68         (2) “Certificate” means a contract between the trust and a
   69  designated investor pursuant to which a tax credit is available
   70  and issued to the designated investor.
   71         (3) “Commitment agreement” means a contract between the
   72  partnership and a designated investor pursuant to which the
   73  designated investor commits to providing a specified amount of
   74  investment capital in exchange for an ownership interest in the
   75  partnership.
   76         (4) “Designated investor” means a person, other than the
   77  partnership, fund, or trust, who purchases an ownership interest
   78  in the partnership or is a transferee of a certificate or tax
   79  credit.
   80         (5)(2) “Fund” means the Florida Opportunity Fund.
   81         (6) “Partnership” means the Florida Infrastructure Fund
   82  Partnership.
   83         (7) “Tax credit” means a contingent tax credit issued
   84  pursuant to s. 288.9628.
   85         (8) “Trust” means the Florida Infrastructure Investment
   86  Trust.
   87         Section 3. Section 288.9627, Florida Statutes, is created
   88  to read:
   89         288.9627 Florida Infrastructure Fund Partnership.—
   90         (1) The fund shall facilitate the creation of the Florida
   91  Infrastructure Fund Partnership, which is a private, for-profit,
   92  limited or limited liability partnership, organized and operated
   93  under chapter 620. The partnership is not an instrumentality of
   94  the state. The partnership shall manage its business affairs and
   95  conduct business in accordance with its organizational documents
   96  and the purposes set forth in this section.
   97         (2) The primary purpose of the partnership is to make
   98  investments in infrastructure projects located in this state
   99  which foster economic development in this state. For purposes of
  100  this section, the term “infrastructure” means the assets that a
  101  society uses to facilitate the operation of its economy or
  102  provide an economic or social benefit to a community,
  103  municipality, state, or other political subdivision, including,
  104  without limitation, roads, water, and wastewater systems,
  105  communications facilities, power systems, transportation
  106  systems, communication systems, bridges, railways, ports,
  107  airports, tunnels, renewable energy facilities, ancillary or
  108  support systems of the foregoing, and other strategic
  109  infrastructure needs of the state.
  110         (3) The fund, as general partner, is authorized and
  111  responsible for managing the business affairs of the
  112  partnership, including, without limitation, the engagement of
  113  its investment manager or managers to assist with the management
  114  of the partnership; soliciting and negotiating the terms of,
  115  contracting for, and receiving investment capital with the
  116  assistance of its investment manager or other service providers;
  117  receiving investment returns; paying investors; approving
  118  investments in order to provide financial returns, together with
  119  strategic returns designed to result in a significant potential
  120  to create or retain jobs in this state and further diversify the
  121  economy of this state; and such other activities necessary to
  122  operate the partnership. The fund may loan the partnership up to
  123  $350,000 to be used to pay initial expenses incurred in the
  124  organization of the partnership and the solicitation of
  125  investors.
  126         (4) The partnership shall raise funds from designated
  127  investors for making investments in state infrastructure
  128  projects by entering into a commitment agreement with such
  129  investors on terms approved by the fund’s board. The partnership
  130  shall provide a copy of each commitment agreement to the trust
  131  upon the execution of the agreement by all parties to the
  132  agreement.
  133         (5) Pursuant to s. 288.9628, contemporaneously with a
  134  commitment agreement from a designated investor to the
  135  partnership, the trust shall issue certificates that may be
  136  redeemable for contingent tax credits in order to provide
  137  incentives or guarantees to the designated investor for making a
  138  commitment to the partnership.
  139         (6) The partnership may enter into commitment agreements
  140  with designated investors beginning July 1, 2011. The total
  141  principal investment payable to the partnership under all
  142  commitment agreements with designated investors and the total
  143  amount of contingent tax certificates that may be issued
  144  pursuant to this section may not exceed $350 million.
  145         (7) The partnership may invest only in infrastructure
  146  projects that have raised equity or debt capital from other
  147  sources so that the total amount invested in an infrastructure
  148  project is at least twice the amount invested by the
  149  partnership. However, the partnership may not invest more than
  150  20 percent of its total funds available for investment in any
  151  single infrastructure project.
  152         (8) The partnership shall make investments in
  153  infrastructure projects that are based on an evaluation of the
  154  following factors:
  155         (a) The written business plan for the project, including
  156  all expected revenue sources.
  157         (b) The likelihood of the project attracting operating
  158  capital from investors, grants, or other lenders.
  159         (c) The management team for the proposed project.
  160         (d) The project’s potential for job creation in this state.
  161         (e) The financial resources of the company proposing the
  162  project.
  163         (f) The presence of reasonable safeguards for the project
  164  to provide continued benefit to state residents.
  165         (g) Any other factors deemed by the partnership to be
  166  relevant to the likelihood of the project’s success and not
  167  inconsistent with this section.
  168         (9) Beginning December 1, 2011, and annually thereafter,
  169  the partnership shall issue an annual report concerning its
  170  activities to the Governor, the President of the Senate, and the
  171  Speaker of the House of Representatives. At a minimum, the
  172  annual report must include:
  173         (a) An accounting of the amount of investments disbursed by
  174  the partnership and the progress of the partnership, including
  175  the progress of infrastructure projects that have been directly
  176  invested in by the partnership.
  177         (b) A description of the benefits to the state resulting
  178  from the partnership, including the number of businesses and
  179  associated industries positively affected, the number of jobs
  180  maintained or created, and the positive impact on the state’s
  181  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         (10) The partnership and the fund may not pledge the credit
  187  or taxing power of the state or any political subdivision of the
  188  state, and may not make its debts payable out of any moneys or
  189  resources except those of the partnership or the fund.
  190  Obligations of the partnership and the fund are not obligations
  191  of the state or any political subdivision of the state but are
  192  obligations of the partnership or the fund which are payable
  193  solely from the partnership’s or fund’s resources.
  194         (11) The partnership may not accept investment from a
  195  financial institution or company identified in s. 215.472 or a
  196  scrutinized company as that term is defined in s. 215.473, and
  197  may not make any investment in an infrastructure project in
  198  which such institution or company has an ownership interest. The
  199  entity that owns the infrastructure project invested in by the
  200  partnership shall provide reasonable assurances to the
  201  partnership that it will not provide an ownership interest in
  202  the infrastructure project to a financial institution or company
  203  identified in s. 215.472 or a scrutinized company.
  204         Section 4. Section 288.9628, Florida Statutes, is created
  205  to read:
  206         288.9628Florida Infrastructure Investment Trust; issuance
  207  of certificates and contingent tax credits.—
  208         (1) The Florida Infrastructure Investment Trust, a state
  209  beneficiary public trust administered by a board of trustees, is
  210  created. The exercise of the powers conferred by this section by
  211  the trust’s board of trustees is deemed to be a public purpose.
  212         (2) The board of trustees consists of the executive
  213  director of the Office of Trade, Tourism, and Economic
  214  Development, the vice chair of Enterprise Florida, Inc., and the
  215  chief executive officer of Enterprise Florida, Inc., or their
  216  respective designees.
  217         (a) An administrative officer under the direction of the
  218  board of trustees may act on behalf of the trust.
  219         (b) Members of the board of trustees shall serve without
  220  compensation but members, the administrative officer of the
  221  board of trustees, and other board employees are entitled to
  222  reimbursement pursuant to s. 112.061 for all reasonable,
  223  necessary, and actual expenses as determined and approved by the
  224  board.
  225         (c) Members may not have an interest in any person to whom
  226  a tax credit is allocated and issued by the trust.
  227         (3) The trust may seek reimbursement of its reasonable
  228  costs and expenses from the partnership by charging a fee for
  229  the issuance of certificates to designated investors of up to
  230  0.25 percent of the aggregate investment capital committed to
  231  the partnership by designated investors that received a
  232  certificate.
  233         (4) The trust may engage consultants, retain professional
  234  services, issue certificates and contingent tax credits, sell
  235  tax credits in accordance with paragraph (8)(d), expend funds,
  236  invest funds, contract, bond or insure against loss, or perform
  237  any other act necessary to carry out its purpose.
  238         (5) Pursuant to this section, the trust shall issue
  239  certificates that may be redeemable for tax credits in order to
  240  provide an incentive to designated investors to make equity
  241  investments in the partnership. All certificates issued by the
  242  trust, and tax credits issued in accordance with such
  243  certificates, may not exceed a total of $350 million in tax
  244  credits. The certificates shall be issued contemporaneously with
  245  an investment commitment by a designated investor. A certificate
  246  shall have a specific calendar year maturity date that is at
  247  least 12 years after the date of issuance as designated by the
  248  trust. A certificate and the related tax credit is transferable,
  249  in whole or in part, by the designated investor. A tax credit
  250  may not be claimed or redeemed except by a designated investor
  251  or transferee in accordance with the terms of the certificate.
  252         (6) Within 30 days after entering into a commitment
  253  agreement with a designated investor, the trust shall submit to
  254  the Department of Revenue an application for the issuance of a
  255  contingent tax credit to the designated investor in the name of
  256  the trust for the benefit of the designated investor. Within 60
  257  days after receipt of such application, the department shall
  258  issue the contingent tax credit to the trust for the benefit of
  259  the designated investor. The contingent tax credit shall be
  260  issued by the department on terms consistent with the terms of
  261  the respective certificate issued by the partnership to the
  262  designated investor. At the request of the trust, the department
  263  shall provide additional reasonable assurances to a designated
  264  investor that it is entitled to a tax credit in accordance with
  265  the terms of this section and the certificate.
  266         (7) The trust shall include in each certificate the maximum
  267  amount of a tax credit which may be issued to a designated
  268  investor and identify the specific calendar year the certificate
  269  may be redeemed. The initial maximum amount is the total amount
  270  of investment capital committed to the partnership by the
  271  designated investor. However, subject only to paragraph (8)(e),
  272  the amount of the tax credit issued to a designated investor
  273  under a certificate is limited to the designated investor’s net
  274  capital investment, which is equivalent to the difference
  275  between the total investment capital actually advanced by the
  276  designated investor to the partnership and an amount that equals
  277  at least the aggregate actual distributions received by the
  278  designated investor and any predecessor in interest of the
  279  certificate. The trust shall clearly indicate on the certificate
  280  the amount of committed investment, the amount of the
  281  partnership’s equity interest issued to the designated investor,
  282  and the calculation formula for determining the amount of the
  283  tax credit which may be claimed. Once funds are invested by a
  284  designated investor, the certificate is binding on the trust and
  285  the Department of Revenue and may not be modified, terminated,
  286  or rescinded.
  287         (8) If on the maturity date of the certificate, the total
  288  net capital investment provided to the partnership from the
  289  designated investor holding the certificate is greater than
  290  zero, the partnership shall provide written notification of this
  291  circumstance to each designated investor in the partnership.
  292         (a) In the notification to each designated investor, the
  293  partnership must provide a good faith estimate of the fair
  294  market value of the partnership’s assets as of the date of the
  295  notice; the total capital investment of all designated investors
  296  as of the date of the notice; the total amount of distributions
  297  received by the designated investors; the amount of the tax
  298  credit available to the designated investor, if any, if elected
  299  by that designated investor; and any schedule for the amount of
  300  tax credit which may be claimed by the designated investor in a
  301  given year pursuant to paragraph (e). A copy of each investor
  302  notice shall be provided at the same time to the trust holding
  303  the designated investor’s contingent tax certificate and to the
  304  Department of Revenue.
  305         (b) Upon receipt of notice from the partnership, each
  306  affected designated investor may elect one of the following:
  307         1. Have a tax credit certificate issued to it in an amount
  308  equal to the amount of the tax credit available to the
  309  designated investor in accordance with the terms of this section
  310  and the certificate;
  311         2. Have tax credits sold by the trust on behalf of the
  312  designated investor, with the proceeds of the sale to be paid by
  313  the trust to the designated investor; or
  314         3. Maintain its investment in the partnership.
  315  
  316  The designated investor must provide written notification to the
  317  partnership and the trust of its election within 30 days after
  318  the designated investor’s receipt of notification from the
  319  partnership. If the designated investor fails to provide notice
  320  within 30 days, the designated investor is deemed to have
  321  elected the option set forth in subparagraph 3.
  322         (c) If the designated investor elects to have a tax credit
  323  issued to itself, the trust shall advise the Department of
  324  Revenue and apply on behalf of the designated investor to the
  325  department for the issuance of a tax credit certificate in the
  326  name of the investor. In order to receive the tax credit
  327  certificate, the designated investor must agree in writing to
  328  transfer its limited partnership interest in the partnership to
  329  the fund. The application for the tax credit must include the
  330  original contingent tax credit certificate held by the trust for
  331  the designated investor, a copy of the notice provided to the
  332  designated investor by the partnership, a copy of the designated
  333  investor’s written notice to the trust and the partnership of
  334  its election to have the tax credit issued to it, and a copy of
  335  the designated investor’s written agreement to transfer its
  336  limited partnership interest in the partnership to the fund. The
  337  application must be submitted by the trust within 30 days after
  338  the trust’s receipt of the designated investor’s election;
  339  however, the trust’s failure to timely submit the application
  340  does not prevent the designated investor from being eligible to
  341  receive the tax credit certificate if the designated investor
  342  submits an application for the tax credit certificate within 90
  343  days after the submission of its election notice to the trust.
  344  The department shall issue the tax credit certificate within 30
  345  days after its receipt of a timely and complete application. Any
  346  tax credit issued may be transferred, in whole or in part, by
  347  its holder pursuant to paragraph (g).
  348         (d) If the designated investor elects to sell the tax
  349  credits held by the trust, the trust shall exercise its best
  350  efforts to sell the tax credits. The trust may sell tax credits
  351  in amounts of no more than the initial maximum amount of the
  352  contingent tax credit issued to the designated investor, or such
  353  amount as is necessary to yield proceeds to the designated
  354  investor equal to its net capital investment as of the date of
  355  the partnership’s notice, whichever is less; however, the
  356  aggregate amount of tax credits sold may not exceed an amount
  357  that is 7 percent above the designated investor’s net capital
  358  investment. In order to receive the proceeds of the trust’s sale
  359  of tax credits, the designated investor must agree in writing to
  360  transfer its limited partnership interest in the partnership to
  361  the fund. Within 30 days after the trust’s sale of the tax
  362  credits, the trust shall notify the designated investor and the
  363  partnership and apply to the Department of Revenue for the
  364  issuance of a tax credit certificate or certificates in the name
  365  of the person or persons who purchased the credits. The
  366  application must include the original contingent tax credit
  367  certificate held by the trust for the designated investor, a
  368  copy of the notice provided to the investor by the partnership,
  369  a copy of the investor’s written notice to the trust and the
  370  partnership of its election to have the credit issued to it, a
  371  copy of the purchase agreement or agreements executed by the
  372  purchaser or purchasers, and a copy of the investor’s written
  373  agreement to transfer its limited partnership interest in the
  374  partnership to the fund. The department shall issue the tax
  375  credit certificate or certificates applied for within 30 days
  376  after its receipt of a timely and complete application. If the
  377  designated investor’s tax credits have been sold by the trust to
  378  more than one person, the department shall issue tax credit
  379  certificates to such persons in amounts as designated by the
  380  trust in the application. If the trust is unable to sell the
  381  designated investor’s tax credits within 90 days after the date
  382  of the designated investor’s election, the investor has the
  383  continuing option after that date to revoke or modify its prior
  384  election and elect to have a tax credit certificate issued
  385  directly to it for the amount of any unsold credit. Within 30
  386  days after such election by the designated investor, the trust
  387  shall notify the partnership and apply to the department for the
  388  issuance of a tax credit certificate or certificates in the name
  389  of the designated investor in the amount of any unsold credit
  390  and in the name of the persons who purchased any portion of the
  391  credit. Payment by the purchaser for the tax credit, or any
  392  increment thereof, shall be made to the trust on behalf of the
  393  designated investor or directly to the designated investor as
  394  elected by the investor.
  395         (e) Any tax credit allowed under a tax credit certificate
  396  issued by the Department of Revenue under this section may be
  397  used by the owner as an offset against any taxes owed to the
  398  state pursuant to any of the provisions listed in s.
  399  72.011(1)(a). The offset may be applied by the owner on any
  400  return for an eligible tax due on or after the date on which the
  401  tax credit certificate was issued by the department but no more
  402  than 7 years after the tax credit certificate was issued. The
  403  owner of the tax credit may elect to have all or any portion of
  404  the amount authorized in the tax credit certificate paid to it
  405  by the state or be claimed as a refundable credit rather than
  406  applied as an offset against eligible taxes if such election is
  407  made within 7 years after the tax credit certificate was issued,
  408  and if the amount elected to be paid in any calendar year is no
  409  greater than 25 percent of the initial maximum amount of the
  410  related certificate and any balance is available the following
  411  year for payment or offset. If the designated investor does not
  412  file a return in this state and elects to claim the tax credit
  413  as a refundable credit, the investor may request the trust to
  414  seek the refundable credit on its behalf.
  415         (f) To the extent that any tax credit provided for in this
  416  section is used by its owner as a credit against taxes due or to
  417  obtain payment from the state, such amount becomes an obligation
  418  of the partnership to the state secured solely by the limited
  419  partnership interest transferred to the fund by the designated
  420  investor whose investment generated the used credit. In such
  421  case, the state’s recovery is limited to the forfeited limited
  422  partnership interest. The Department of Revenue shall account
  423  for tax credits used or paid under this section and make such
  424  information available to the partnership. The fund, as general
  425  partner, has no liability to the state for repayment of the used
  426  tax credits from the fund’s separate assets unrelated to its
  427  interest in the partnership.
  428         (g) Any certificate and related tax credit issued under
  429  this section is transferrable in whole or in part by its owner;
  430  however, such transfer may not extend the time within which the
  431  credit must be exercised by the owner or any transferee. Any
  432  owner of a tax credit certificate who transfers the tax credit
  433  or any portion thereof to any other person must notify the trust
  434  and Department of Revenue in writing of such transfer, including
  435  notification of the amount of tax credit transferred and the
  436  person to whom the credit was transferred.
  437         (9) The Department of Revenue shall work with the
  438  partnership and the trust to establish the procedures, which
  439  shall be adopted by rule, to be followed in using the tax
  440  credits in accordance this section.
  441         (10) The trust, in conjunction with the Department of
  442  Revenue, shall develop a system for registering any certificate
  443  and related tax credit issued or transferred pursuant to this
  444  section and a system that allows verification that any tax
  445  credit claimed on a tax return is valid and that any transfers
  446  of the certificate and related tax credit are made in accordance
  447  with this section.
  448         Section 5. This act shall take effect July 1, 2011.

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