Bill Text: FL S1576 | 2017 | Regular Session | Comm Sub
Bill Title: Florida Film Investment Corporation
Spectrum: Bipartisan Bill
Status: (Failed) 2017-05-05 - Died in Appropriations Subcommittee on Transportation, Tourism, and Economic Development [S1576 Detail]
Download: Florida-2017-S1576-Comm_Sub.html
Florida Senate - 2017 CS for SB 1576 By the Committee on Commerce and Tourism; and Senator Gibson 577-03939-17 20171576c1 1 A bill to be entitled 2 An act relating to the Florida Film Investment 3 Corporation; creating s. 288.1259, F.S.; defining 4 terms; creating the Florida Film Investment 5 Corporation and stating its purpose; authorizing the 6 corporation to make investments in scripted 7 productions in the state subject to certain 8 conditions; requiring the board of directors to 9 establish criteria, bylaws, rules, and policies for 10 making investments; requiring the board to adopt 11 criteria that give preference to certain productions; 12 authorizing the corporation to charge fees subject to 13 certain limits; providing membership requirements for 14 the board; specifying term requirements; providing 15 that board members are subject to the code of ethics 16 for public officers and employees; providing voting 17 and compliance requirements; providing applicability; 18 prohibiting board members from commenting on or 19 discussing certain applications for a specified 20 timeframe; providing that the board serves without 21 compensation; authorizing the board to be reimbursed 22 for specified expenses; requiring the board to adopt 23 rules and hold meetings; requiring the board to create 24 the Florida Film Investment Account for specified 25 purposes; requiring funds appropriated to the 26 corporation to be deposited in the account; 27 authorizing the board to deposit a portion of funds 28 into a bank and invest the remaining portion in 29 specified securities; requiring dividends to be 30 deposited in the account; providing for the board’s 31 operating expenses; requiring claims against the 32 corporation to be paid from the account; requiring the 33 board to appoint a president; specifying that the 34 president serves at the pleasure of the board and is 35 compensated as determined by the board; requiring the 36 president to perform certain duties of the 37 corporation; requiring the president to submit an 38 annual budget to be approved by the board; requiring 39 the corporation to notify the Department of Economic 40 Opportunity upon final execution of certain contracts 41 or agreements; providing notice requirements; 42 providing an effective date. 43 44 Be It Enacted by the Legislature of the State of Florida: 45 46 Section 1. Section 288.1259, Florida Statutes, is created 47 to read: 48 288.1259 Florida Film Investment Corporation.— 49 (1) DEFINITIONS.—As used in this section, the term: 50 (a) “Account” means the Florida Film Investment Account. 51 (b) “Board” means the corporation’s board of directors. 52 (c) “Corporation” means the Florida Film Investment 53 Corporation. 54 (d) “In-state expenditures” means the costs of tangible 55 property used in this state, and services performed by residents 56 of this state, for scripted production, including preproduction 57 and postproduction, but excluding costs for development, 58 marketing, and distribution. 59 (e) “President” means the chief executive officer of the 60 corporation. 61 (f) “Scripted production” or “production” means a feature 62 film of at least 70 minutes in length, whether produced for 63 theatrical, television, or direct-to-video release; a television 64 series created to run multiple seasons and having an order for 65 distribution of at least five episodes, or a miniseries, which 66 is produced predominantly from a written screenplay or teleplay. 67 The term does not include a commercial, infomercial, or 68 political advertising; a reality show; a game show; an awards 69 show; a music video; an industrial or educational film; a 70 weather or market program; a sporting event or sporting event 71 broadcast; a gala; a production that solicits funds; a home 72 shopping program; a political program; a documentary; a 73 gambling-related production; a concert production; a local, 74 regional, or Internet-distributed-only news show or current 75 events show; a sports news or sports recap show; a video game; a 76 pornographic production; or any production deemed obscene under 77 chapter 847. A production may be produced on or by film, video 78 tape, or otherwise through the use of a motion picture camera, 79 digital camera or device, video tape device, computer, any 80 combination of the foregoing, or by any other means, method, or 81 device. 82 (g) “Television” includes broadcast, cable, and Internet 83 television. 84 (h) “Tier one sales agency” means an agency that has sold 85 at least $50 million in feature films. 86 (2) CORPORATION.—The Florida Film Investment Corporation is 87 created as a corporation not for profit, to be incorporated 88 under chapter 617 and approved by the Department of State. The 89 corporation shall be organized on a nonstock basis. The purpose 90 of the corporation is to encourage this state to be used as a 91 site for scripted productions through equity investment in such 92 productions. 93 (3) POWERS AND LIMITATIONS.— 94 (a) The corporation may make equity investments in scripted 95 productions in this state pursuant to the criteria, bylaws, 96 rules, and policies adopted by the board which must include all 97 of the following: 98 1. The corporation shall make investments in productions 99 that it estimates will generate maximum economic impact to the 100 state by providing high-wage jobs for Florida residents and 101 significant in-state expenditures. 102 2. The amount of the corporation’s investment in a 103 production must not exceed the amount of the production’s in 104 state expenditures for that production. 105 3. The corporation’s investment in a production must rank 106 and remain equal with the highest class of ownership in the 107 production, such that, in the event of liquidation or 108 bankruptcy, the corporation’s investment share retains the 109 highest priority with other preferred shareholders. 110 4. An equity investment made by the corporation under this 111 section must be less than one-half of the production’s total 112 shares or other ownership interest. 113 5. The amount of the corporation’s investment in any one 114 production must not exceed 12.5 percent of the sum of the 115 remaining amount of uncommitted funds in the account plus the 116 amounts of all outstanding investments in other productions. 117 6. The corporation must not have any voting rights, 118 creative control, or management authority over a production 119 receiving an equity investment under this section. 120 7. The corporation shall limit the return on its 121 investments, establishing variable limits on returns that 122 account for time value and reduce returns in exchange for a 123 production’s early buyout of investment equity. For a production 124 exercising an early buyout, the corporation shall limit its 125 return on investment to the minimum that is actuarially 126 measurable, credible, and sufficiently related to actual and 127 expected losses to ensure the corporation’s self-sufficiency and 128 preservation of the state appropriations provided for 129 investment. 130 8. The corporation shall conduct at least two investment 131 cycles per fiscal year, committing no more than 40 percent of 132 its total investment in productions for the fiscal year in any 133 one investment cycle. 134 (b) The board shall adopt objective criteria for making 135 equity investments in scripted productions in this state. 136 1. The criteria must require: 137 a. The production to use a bonded third-party collection 138 account management firm to ensure that the corporation receives 139 all funds due from sales proceeds in accordance with a waterfall 140 agreement included in the corporation’s investment terms. 141 b. Presales or sales estimates based on the cast and script 142 of the production from a tier one sales agency which reflect a 143 value of at least 1.5 times the exposure of the corporation. 144 c. The production to carry an insurance package from an 145 insurance company rated “A” or higher by A.M. Best Company which 146 must include general liability insurance, workers’ compensation, 147 and key cast and director insurance that covers the costs of 148 disruption or replacement downtime in the event of illness or 149 other loss of services from such individuals. If at least 75 150 percent of the production’s filming schedule occurs after June 1 151 and before November 30, the production’s insurance package must 152 include hurricane coverage. 153 d. The production to provide proof of funds for the 154 remaining budget within 60 days after tentative approval and 155 place the remaining budget in escrow before the release of 156 corporation funds. 157 e. That the lead producer or production company has 158 completed, sold, and delivered at least five feature films, or 159 the production must provide a completion bond. 160 f. That the production’s budget, script, and filming 161 schedule have been evaluated and approved by a production expert 162 selected by the board. 163 g. The production budget to include contingency funds in an 164 amount equal to at least 5 percent of the total budget. Up to 40 165 percent of the contingency funds may be expended during 166 production without the approval of the board. The remaining 167 contingency funds may only be expended with prior approval of 168 the board. 169 h. The board to release corporation funds to a production 170 in the following manner: 171 (I) Fifty percent of corporation funds shall be released on 172 the first day of principal photography. 173 (II) Twenty-five percent of corporation funds shall be 174 released upon completion of principal photography. 175 (III) Twenty-five percent of corporation funds shall be 176 released after final picture lock, as that term is generally 177 understood in the production industry. 178 i. The production company to provide the board with the 179 right to inspect and audit the weekly cost reports and general 180 ledger of the production throughout preproduction, production, 181 and postproduction. 182 2. The criteria shall give preference to: 183 a. Productions with the greatest economic impact to the 184 state as demonstrated by the greatest number of high-wage jobs 185 provided for state residents and the greatest amount of in-state 186 expenditures as a percentage of total production expenditures. 187 b. Productions in which the proposed investment by the 188 corporation is lowest as a percentage of the production’s total 189 shares or other ownership interests. 190 c. Productions with the quickest deployment, in which the 191 production’s in-state expenditures will be made soonest after 192 the corporation’s investment. 193 d. Productions by companies with a verifiable track record 194 of producing successful productions. 195 e. Productions by state-based production companies or by 196 producers, writers, or directors who are state residents. 197 f. Productions estimated to significantly increase tourism 198 to the state by using a screenplay or teleplay based on a 199 Florida story or including recognizable state locations. 200 g. Productions whose development demonstrates the 201 likelihood of their success, including, but not limited to, 202 having a recognized director, actor, or other creative talent 203 attached to the production. 204 h. Productions in which the corporation’s investment is 205 matched from local sources, such as county or municipal 206 agencies, local film commissions, or other community resources. 207 (c) The corporation may charge fees, such as application 208 fees, from productions seeking equity investment under this 209 section, but such fees may not exceed the reasonable estimated 210 cost of the activity for which the fee is charged, such as the 211 cost of processing an application. 212 (4) BOARD OF DIRECTORS; POWERS AND DUTIES.— 213 (a)1. The corporation shall have a board of directors 214 consisting of seven members who are permanent residents of the 215 state. Minority and gender representation must be considered 216 when making appointments to the board. The board shall be 217 composed of the following members: 218 a. Two members with experience in investment banking and 219 funds management focused on feature film and television 220 production. 221 b. Three members who have recent experience and are 222 recognized leaders in the production of feature films or 223 television in this state. Such board members may include, but 224 are not limited to, producers, directors, production managers or 225 supervisors, or similar persons in positions of production 226 leadership. 227 c. One member representing businesses that provide supplies 228 for feature film and television production in the state, such as 229 small businesses through which production companies buy or rent 230 equipment, house and feed cast and crew, purchase supplies and 231 raw materials, or build production infrastructure. 232 d. One member representing the state’s feature film and 233 television workforce. 234 2. The initial board of directors shall be appointed as 235 follows: 236 a. The Florida Venture Forum and the Florida Chamber of 237 Commerce shall each appoint one member pursuant to sub 238 subparagraph 1.a. 239 b. The Governor, the President of the Senate, and the 240 Speaker of the House of Representatives shall each appoint one 241 member pursuant to sub-subparagraph 1.b. 242 c. The Department of Economic Opportunity shall appoint one 243 member pursuant to sub-subparagraph 1.c. 244 d. The Congress of Motion Picture Associations of Florida 245 shall appoint one member pursuant to sub-subparagraph 1.d. 246 247 To establish staggered terms, three of the initial board members 248 shall be appointed to 1-year terms, two initial board members 249 shall be appointed to 2-year terms, and two initial board 250 members shall be appointed to 3-year terms. 251 3. Board members shall serve for a term of 3 years and be 252 eligible for reappointment. Vacancies shall be filled by the 253 board within 30 days after the vacancy occurs. 254 (b) Board members are subject to the code of ethics for 255 public officers and employees as set forth in part III of 256 chapter 112. A board member must abstain from voting and must 257 comply with the disclosure requirements of s. 112.3143 if there 258 appears to be a possible conflict under s. 112.311, s. 112.313, 259 or s. 112.3143. This paragraph does not prohibit any principal 260 by whom a board member is retained, as described in s. 261 112.3143(1)(a), from applying for or receiving an equity 262 investment under this section. 263 (c) A board member must, with respect to an application for 264 an equity investment which is pending before the corporation or 265 an application the board member knows or reasonably expects will 266 be submitted to the corporation within 180 days, refrain from 267 commenting on or discussing the application outside of a board 268 meeting with the applicant or any person retained by the 269 applicant. 270 (d) Board members shall serve without compensation but may 271 be reimbursed in accordance with s. 112.061 for all necessary 272 expenses in the performance of their duties, including attending 273 board meetings and conducting board business. 274 (e) The board shall: 275 1. Before the expenditure of funds from the Florida Film 276 Investment Account, adopt bylaws, rules, and policies necessary 277 to carry out the corporation’s responsibilities under this 278 section. 279 2. Hold regularly scheduled meetings, at least once per 280 investment cycle, in order to carry out the objectives and 281 responsibilities of the board. 282 (5) ACCOUNT.— 283 (a) The board shall create the Florida Film Investment 284 Account for the purpose of receiving state, federal, county, 285 municipal, and private financial resources, and the return from 286 investments of those resources, and for the purposes of this 287 section. The account shall be under the exclusive control of the 288 board. 289 (b) Appropriations provided to the corporation for making 290 equity investments shall be deposited into the account. 291 (c) The board may deposit the funds of the account with 292 state or federally chartered financial institutions in this 293 state and may invest the remaining portion in permissible 294 investments as described in s. 560.210(1). 295 (d) Dividend payments received from the investments made by 296 the corporation shall be redeposited in the account to be used 297 to support the purposes of this section. 298 (e) The corporation shall keep its operating expenses to 299 the minimum amount necessary. Such operating expenses shall be 300 funded by appropriations provided for that purpose and from net 301 returns on investments made under this section. 302 (f) Any claims against the account shall be paid solely 303 from the account. Under no circumstances shall the credit of the 304 state be pledged, other than funds appropriated by law to the 305 account, nor shall the state be liable or obligated in any way 306 for claims on the account or against the corporation. 307 (6) PRESIDENT OF THE CORPORATION.— 308 (a) The board shall appoint a president. The president must 309 be knowledgeable about private and public financing of feature 310 film and television projects. 311 (b) The president shall serve at the pleasure of the board 312 and shall receive a salary and benefits as determined by the 313 board. 314 (c) The president shall administer the programs of the 315 corporation and perform such duties as are delegated by the 316 board. 317 (d) The president shall provide staff to the board as 318 requested. 319 (e) The president shall submit an annual budget to be 320 approved by the board. 321 (7) PUBLIC NOTICE OF INVESTMENTS.—The corporation shall 322 notify the Department of Economic Opportunity upon final 323 execution of each contract or agreement by which the corporation 324 makes an equity investment in a production. The corporation 325 shall also publish and maintain a copy of the notice on the 326 corporation’s website while the investment remains outstanding. 327 To provide adequate notice to the businesses and workforce that 328 provide supplies for feature film and television production in 329 the state, the notice shall include, but need not be limited to, 330 a brief description of the production, the name of the 331 production company, and, to the extent available, the names of 332 the director, cinematographer, production designer, costume 333 designer, and transportation coordinator. 334 Section 2. This act shall take effect July 1, 2017.