Bill Text: FL S0990 | 2018 | Regular Session | Comm Sub
Bill Title: Rural Communities
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Failed) 2018-03-10 - Died in Appropriations Subcommittee on Transportation, Tourism, and Economic Development [S0990 Detail]
Download: Florida-2018-S0990-Comm_Sub.html
Florida Senate - 2018 CS for SB 990
By the Committee on Commerce and Tourism; and Senators Montford
and Gibson
577-02139-18 2018990c1
1 A bill to be entitled
2 An act relating to rural communities; creating s.
3 288.062, F.S.; providing a short title; defining
4 terms; requiring the Department of Economic
5 Opportunity to accept an application seeking approval
6 as a rural growth fund; requiring that the application
7 include certain materials, including an application
8 fee; requiring the department to grant or deny the
9 application within a specified time; prohibiting the
10 department from approving more than a certain amount
11 of investment authority or investor contributions;
12 requiring the department to deny an application if the
13 application does not meet certain requirements;
14 authorizing an applicant whose application was denied
15 to provide additional information to the department
16 within a certain timeframe; requiring the department
17 to review and reconsider an application that has
18 additional information submitted within a certain
19 timeframe; prohibiting the department from reducing
20 the investment authority of an application or denying
21 an application for reasons other than the ones listed;
22 requiring the department to certify an applicant that
23 has his or her application approved; requiring the
24 rural growth fund to collect contributions and
25 investments within a certain timeframe; requiring the
26 rural growth fund to send documentation of the
27 contributions and investments to the department;
28 requiring the department to provide a tax credit
29 certificate; providing that a rural growth fund’s
30 certification will lapse for failure to comply;
31 requiring the department to redistribute lapsed
32 investment authority; providing that a taxpayer who
33 makes an investor contribution is vested with a credit
34 against state premium tax liability; providing
35 restrictions on the credit; requiring that a taxpayer
36 claiming a credit submit a copy of the tax credit
37 certificate with his or her tax return; requiring the
38 department to revoke the tax credit certificate if the
39 rural growth fund exits the program or fails to meet
40 certain requirements; providing a formula for
41 calculating the maximum amount of investments the
42 rural growth fund can count toward satisfying tax
43 credit certificate requirements; requiring the
44 department to give reasons for a pending revocation of
45 a tax credit certificate; specifying that the rural
46 growth fund has 90 days from the dispatch of the
47 notice to correct violations; requiring the department
48 to distribute reverted investment authority among
49 certain rural growth funds; authorizing the rural
50 growth fund to submit an exit application after a
51 specified time; requiring the department to respond to
52 an exit application within a certain timeframe;
53 prohibiting the department from unreasonably denying
54 an exit application; prohibiting the department from
55 revoking the rural growth fund’s tax credit
56 certificate after the rural growth fund has exited the
57 program; authorizing the rural growth fund to request
58 a written opinion from the department about potential
59 investments; specifying that an out-of-state business
60 relocating employees to this state must satisfy a
61 specific definition within a certain timeframe before
62 a new principal place of business operations is
63 recognized; requiring the rural growth fund to submit
64 a report to the department at a specified time;
65 requiring that the report provide certain
66 documentation; requiring the rural growth fund to
67 submit an annual report to the department; requiring
68 that the annual report include certain information;
69 providing for rulemaking; requiring the department to
70 notify the Department of Revenue of any insurance
71 company that is allocated tax credits; providing
72 applicability; providing an effective date.
73
74 Be It Enacted by the Legislature of the State of Florida:
75
76 Section 1. Section 288.062, Florida Statutes, is created to
77 read:
78 288.062 Florida Rural Community Jobs and Business
79 Resiliency Act.—
80 (1) This section may be cited as the “Florida Rural
81 Community Jobs and Business Resiliency Act.”
82 (2) As used in this section, the term:
83 (a) “Affiliate” means an entity that, directly or
84 indirectly through one or more intermediaries, controls, is
85 controlled by, or is under common control with another entity.
86 For purposes of this paragraph, an entity is controlled by
87 another entity if the controlling entity holds, directly or
88 indirectly, the majority voting or ownership interest in the
89 controlled entity or has control over the day-to-day operations
90 of the controlled entity by contract or law.
91 (b) “Closing date” means the date that a rural growth fund
92 has collected all amounts specified by paragraph (3)(f).
93 (c) “Department” means the Department of Economic
94 Opportunity.
95 (d) “Investment authority” means the amount stated on the
96 certification notice issued pursuant to paragraph (3)(e).
97 (e) “Investor contribution” means an investment of cash, by
98 a person with a state premium tax liability and equal to the
99 amount specified on a tax certificate issued by the department,
100 in a rural growth fund for an equity interest in the rural
101 growth fund or a debt instrument, at par value or premium, which
102 has a maturity date at least 5 years after the closing date.
103 (f) “Principal place of business operations” means the
104 place or places at which business operations are located, and
105 where at least 60 percent of the business’s employees work or
106 where employees that are paid at least 60 percent of the
107 business’s payroll work.
108 (g) “Rural business” means a business that at the time of
109 the initial rural growth investment in the company by a rural
110 growth fund:
111 1. Has fewer than 200 employees;
112 2. Has its principal place of business operations in one or
113 more rural communities in the state; and
114 3. Is engaged in industries related to agribusiness,
115 manufacturing, plant sciences, services, or technology, or if
116 not engaged in such industries, upon a determination by the
117 department that the investment will be beneficial to the rural
118 community and the economic growth of the state.
119 (h) “Rural community” means a county with a population of
120 75,000 or fewer.
121 (i) “Rural growth fund” means an entity certified by the
122 department pursuant to paragraph (3)(e).
123 (j) “Rural growth investment” means any capital or equity
124 investment by a rural growth fund in a rural business or any
125 loan granted to a rural business by a rural growth fund with a
126 stated maturity at least 1 year after the date of issuance.
127 (k) “State premium tax liability” means any liability
128 incurred by any entity under s. 624.509 or s. 624.5091.
129 (3)(a) Beginning September 1, 2018, the department shall
130 accept applications for certification as a rural growth fund on
131 a form prescribed by the department. The application must
132 include:
133 1. The total investment authority sought by the applicant
134 under the applicant’s business plan submitted pursuant to
135 subparagraph 5.;
136 2. A copy of the applicant’s, or an affiliate of the
137 applicant’s, license as a rural business investment company
138 under 7 U.S.C. s. 2009cc or as a small business investment
139 company under 15 U.S.C. s. 681;
140 3. Evidence that, as of the date the application is
141 submitted, the applicant or affiliates of the applicant have
142 invested at least $100 million in private companies located in
143 non-metropolitan counties as defined by the federal Office of
144 Management and Budget on the basis of county or county
145 equivalent units;
146 4. An estimate of the number of jobs that will be created
147 or retained in this state because of the applicant’s rural
148 growth investments;
149 5. A business plan that includes a revenue impact
150 assessment projecting state and local tax revenue to be
151 generated by the applicant’s proposed rural growth investments.
152 The business plan must be prepared by a nationally recognized
153 independent third-party economic forecasting firm using a
154 dynamic economic forecasting model that analyzes the applicant’s
155 business plan for a period of 10 years following the date the
156 application is submitted to the department;
157 6. A signed affidavit from each investor stating the amount
158 of investor contributions each taxpayer commits to make; and
159 7. An application fee of $5,000.
160 (b) Within 30 days after receipt of a completed application
161 containing the information set forth in paragraph (a), the
162 department shall grant or deny the application. The department
163 shall deem applications received on the same day as received
164 simultaneously. The department may not approve more than $100
165 million in investment authority and may not approve more than
166 $60 million in investor contributions under this section. If
167 requests for investment authority exceed this limitation, the
168 department shall proportionally reduce the investment authority
169 and the investor contributions for each approved application as
170 necessary to avoid exceeding the limit.
171 (c) The department shall deny an application if:
172 1. The application is incomplete or the application fee is
173 not paid in full;
174 2. The revenue impact assessment submitted pursuant to
175 subparagraph (a)5. does not demonstrate that the applicant’s
176 business plan will result in a positive economic impact on this
177 state over a 10-year period which exceeds the cumulative amount
178 of tax credits that would be issued to the applicant’s
179 investors;
180 3. The investor contributions described in affidavits
181 submitted pursuant to subparagraph (a)6. do not total at least
182 60 percent of the total amount of investment authority sought
183 under the applicant’s business plan; or
184 4. The department has already approved the maximum amount
185 of investment authority and investor contributions allowed under
186 paragraph (b).
187 (d) Within 15 days after notice that the department has
188 denied an application, the applicant may provide additional
189 information to the department to complete, clarify, or cure any
190 defects in the application identified by the department. The
191 department shall review and reconsider any application
192 supplemented by additional information within 30 days after the
193 original submission date of the application.
194 (e) The department may not reduce the requested investment
195 authority of a rural growth fund or deny a rural growth fund
196 application for reasons other than those described in paragraph
197 (b). Upon approval of an application, the department shall send
198 a notice to the applicant certifying the applicant as a rural
199 growth fund and specifying the amount of the applicant’s
200 investment authority and the investor contributions required
201 from each taxpayer that submitted an affidavit with the rural
202 growth fund’s application.
203 (f)1. Within 60 days after receiving an approval issued
204 pursuant to paragraph (e), a rural growth fund shall collect all
205 investor contributions and collect additional investments of
206 cash that are, when added to the investor contributions, at
207 least equal to the rural growth fund’s investment authority.
208 Within 65 days after receiving an approval issued pursuant to
209 paragraph (e), a rural growth fund shall send the department
210 documentation that sufficiently proves that the amounts
211 described in this subparagraph were collected.
212 2. Upon receipt of the documentation required by
213 subparagraph 1., the department shall provide a tax credit
214 certificate in the amount of the investor contribution to each
215 taxpayer who made such investor contribution.
216 (g) A rural growth fund’s certification lapses if the rural
217 growth fund fails to fully comply with paragraph (f). When a
218 certification lapses, the corresponding investment authority and
219 investor contributions do not count toward the limits on program
220 funding prescribed by paragraph (b). The department shall
221 allocate any lapsed investment authority pro rata to each rural
222 growth fund that was not awarded the full investment authority
223 it applied for. A rural growth fund may allocate, at its
224 discretion, the associated investor contribution authority to
225 any taxpayer with state premium tax liability. The department
226 may award any remaining investment authority to new applicants.
227 (4)(a) A taxpayer that makes an investor contribution is
228 vested with an earned credit against state premium tax liability
229 which is equal to the taxpayer’s investor contribution. Twenty
230 percent of the credit may be used in each taxable year,
231 beginning with the calendar year following the second
232 anniversary of the closing date and concluding in the calendar
233 year following the sixth anniversary of the closing date,
234 exclusive of amounts carried forward pursuant to paragraph (c).
235 (b) The credit is nonrefundable and may not be sold,
236 transferred, or allocated to any entity other than an affiliate
237 with state premium tax liability at the time of the submission
238 of the investor’s affidavit included in the rural growth fund’s
239 application.
240 (c) The amount of the credit claimed by a taxpayer may not
241 exceed the amount of the taxpayer’s state premium tax liability
242 for the tax year in which the credit is claimed. Any amount of
243 tax credit that the entity does not claim in a taxable year may
244 be carried forward for use in future taxable years for a period
245 not to exceed 10 years.
246 (d) A taxpayer claiming a credit under this section must
247 submit a copy of the tax credit certificate with his or her tax
248 return for each taxable year that the credit is claimed.
249 (5)(a) The department must revoke a tax credit certificate
250 issued under subparagraph (3)(f)2. if, with respect to a rural
251 growth fund before it exits the program in accordance with
252 paragraph (e), any of the following occurs:
253 1. Within 2 years after the closing date, the rural growth
254 fund does not invest 100 percent of its investment authority in
255 rural growth investments in this state;
256 2. The rural growth fund, after investing 100 percent of
257 its investment authority in rural growth investments in this
258 state within 2 years after the closing date, fails to maintain
259 rural growth investments equal to 100 percent of its investment
260 authority until the seventh anniversary after the closing date.
261 For the purposes of this subparagraph, an investment is
262 “maintained” even if it is sold or repaid so long as the rural
263 growth fund reinvests an amount equal to the capital returned or
264 recovered from the original investment, exclusive of any profits
265 realized, in other rural growth investments in this state within
266 12 months after the receipt of such capital. Amounts received
267 periodically by a rural growth fund are treated as continuously
268 invested in rural growth investments if the amounts are
269 reinvested in one or more rural growth investments by the end of
270 the following calendar year. A rural growth fund is not required
271 to reinvest capital returned from rural growth investments after
272 the sixth anniversary of the closing date, and such rural growth
273 investments are considered held continuously by the rural growth
274 fund through the seventh anniversary of the closing date;
275 3. Before exiting the program in accordance with paragraph
276 (e), the rural growth fund makes a distribution or payment that
277 results in the rural growth fund having less than 100 percent of
278 its investment authority invested in rural growth investments in
279 this state or available for investment in rural growth
280 investments and held in cash and other marketable securities; or
281 4. The rural growth fund makes a rural growth investment in
282 a rural business that directly, or indirectly through an
283 affiliate, owns, has the right to acquire an ownership interest
284 in, makes a loan to, or makes an investment in the rural growth
285 fund, an affiliate of the rural growth fund, or an investor in
286 the rural growth fund. This subparagraph does not apply to
287 investments in publicly traded securities by a rural business or
288 an owner or an affiliate of such rural business. For purposes of
289 this subparagraph, a rural growth fund is not considered an
290 affiliate of a rural business solely because of its rural growth
291 investment in that business.
292 (b) The maximum amount of rural growth investments in a
293 rural business, including amounts invested in affiliates of the
294 rural business, which a rural growth fund may count toward its
295 satisfaction of the requirements of subparagraphs (a)1. and 2.
296 is the greater of $5 million or 20 percent of its investment
297 authority.
298 (c) Before revoking tax credit certificates under this
299 subsection, the department must notify the rural growth fund of
300 the reasons for the pending revocation. The rural growth fund
301 has 90 days after the date the notice was dispatched to correct
302 any violation outlined in the notice to the satisfaction of the
303 department in order to avoid revocation of the tax credit
304 certificate.
305 (d) If a tax credit certificate is revoked under this
306 subsection, the associated investment authority and investor
307 contributions may not count toward the limit on total investment
308 authority and investor contributions described by paragraph
309 (3)(b). The department shall award reverted investment authority
310 pro rata to each rural growth fund awarded less than the
311 requested investment authority for which it applied. Such a
312 rural growth fund may allocate, in its discretion, the
313 associated investor contribution authority to any taxpayer with
314 state premium tax liability. The department may award any
315 remaining investment authority to new applicants.
316 (e) On or after the seventh anniversary of the closing
317 date, a rural growth fund may apply to the department to exit
318 the program and no longer be subject to regulation. The
319 department must respond to the application within 30 days after
320 receiving the application. The department must approve the
321 application if none of the rural growth fund’s tax credit
322 certificates have been revoked and the rural growth fund has not
323 received notice of a revocation that is currently pending. The
324 department may not unreasonably deny an exit application
325 submitted pursuant to this paragraph. If the application is
326 denied, the notice must include the reasons for the denial.
327 (f) The department may not revoke a tax credit certificate
328 after a rural growth fund exits the program.
329 (6) Before making a rural growth investment, a rural growth
330 fund may request that the department issue a written opinion as
331 to whether the business in which it proposes to invest satisfies
332 the definition of a rural business. The department, no later
333 than 15 business days after the receipt of the request, shall
334 notify the rural growth fund of its determination. If the
335 department fails to notify the rural growth fund of its
336 determination by the 15th business day, the business is
337 considered a rural business.
338 (7) An out-of-state business that agrees to relocate
339 employees using the proceeds of a rural growth investment to
340 establish its principal place of business operations in a rural
341 community in the state is deemed to have its principal place of
342 business operations in this new location provided it meets the
343 definition of paragraph (2)(f) within 180 days after receiving
344 the rural growth investment, unless the department agrees to a
345 later date.
346 (8)(a) Each rural growth fund shall submit a report to the
347 department on or before the fifth business day after the second
348 anniversary of the closing date. The report must provide
349 documentation as to each rural growth investment and include:
350 1. A bank statement evidencing each rural growth
351 investment;
352 2. The name, location, and industry of each rural business
353 receiving a rural growth investment, including either evidence
354 that the business qualified as a rural business at the time the
355 investment was made or a determination letter pursuant to
356 subsection (6);
357 3. As of December 31 of the preceding calendar year, the
358 number of employment positions created or retained because of
359 the rural growth fund’s rural growth investments; and
360 4. Any other information required by the department.
361 (b) Thereafter, the rural growth fund shall submit an
362 annual report to the department by February 15 for the duration
363 of the compliance period. The report must include:
364 1. As of December 31 of the preceding calendar year, the
365 number of employment positions created or retained because of
366 the rural growth fund’s rural growth investments;
367 2. The average annual salary of the positions described in
368 subparagraph 1.; and
369 3. Any other information required by the department.
370 (c) The rural growth fund must provide the department with
371 an annual report for a redeemed or repaid rural growth
372 investment if the annual report for such investment is
373 available.
374 (9) The department may adopt rules to implement this act.
375 (10) The department shall notify the Department of Revenue
376 of the name of any insurance company allocated tax credits
377 pursuant to this act and the amount of such credits.
378 (11) This section only applies to tax returns or reports
379 originally due on or after January 1, 2019.
380 Section 2. This act shall take effect July 1, 2018.
