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.