October 23, 2020
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_h0973__
HB 973

1
A bill to be entitled
2An act relating to Florida ports investments; creating s.
3311.23, F.S.; providing a short title; providing a
4purpose; providing definitions; providing requirements for
5certification to operate as a certified capital company;
6providing application requirements; providing for an
7application fee and annual certification renewal fees;
8providing application review and approval and
9certification administration and enforcement duties and
10responsibilities of the Department of Financial Services;
11providing grounds for denial of certification or
12decertification; providing for investments by the Office
13of Tourism, Trade, and Economic Development in port
14related activities; specifying allocations for certain
15port activities and investments; providing requirements
16for capital allocation and investment; providing for a
17premium tax credit; providing for carryforward of the
18credit; providing limitations on the credit; providing
19limitations on the amount of tax credits; providing
20requirements for the office to administer the allocation
21of tax credits; providing requirements and procedures for
22a credit claim process; providing penalties for perjury
23for false written declaration involving verification of
24certain documentation; authorizing the Department of
25Revenue to conduct audits; providing investment
26requirements; providing for state participation; providing
27requirements and procedures for decertification;
28preserving audit authority of the Chief Financial Officer;
29providing criteria for deficiency assessments; providing
30penalties for failure to report and timely pay any tax
31due; providing for transferability of unused credits;
32providing a definition; providing reporting requirements;
33providing for deposit of fees; authorizing the Department
34of Revenue to adopt rules; authorizing the Office of
35Tourism, Trade, and Economic Development to adopt rules;
36providing an effective date.
37
38Be It Enacted by the Legislature of the State of Florida:
39
40     Section 1.  Section 311.23, Florida Statutes, is created to
41read:
42     311.23  Florida Ports Investment Act.-
43     (1)  SHORT TITLE.-This section may be cited as the "Florida
44Ports Investment Act."
45     (2)  PURPOSE.-The primary purpose of this section is to
46stimulate a substantial increase in the state's port
47infrastructure by providing an incentive for insurance companies
48to invest in certified port activities in this state which, in
49turn, will generate investments in new port businesses or in
50expanding port businesses. The increase in investment capital
51flowing into new or expanding port activities and businesses is
52intended to contribute to employment growth, create jobs that
53exceed the average wage for the county in which the jobs are
54created, and expand or diversify the economic base of this
55state.
56     (3)  DEFINITIONS.-As used in this section, the term:
57     (a)  "Affiliate of an insurance company" means:
58     1.  Any person directly or indirectly beneficially owning,
59whether through rights, options, convertible interests, or
60otherwise, controlling, or holding power to vote 10 percent or
61more of the outstanding voting securities or other voting
62ownership interests of the insurance company;
63     2.  Any person 10 percent or more of whose outstanding
64voting securities or other voting ownership interest is directly
65or indirectly beneficially owned, whether through rights,
66options, convertible interests, or otherwise, controlled, or
67held with power to vote by the insurance company;
68     3.  Any person directly or indirectly controlling,
69controlled by, or under common control with the insurance
70company;
71     4.  A partnership in which the insurance company is a
72general partner; or
73     5.  Any person who is a principal, director, employee, or
74agent of the insurance company or an immediate family member of
75the principal, director, employee, or agent.
76     (b)  "Certified capital" means an investment of cash by a
77certified investor in a certified capital company which fully
78funds the purchase price of either or both its equity interest
79in the certified capital company or a qualified debt instrument
80issued by the certified capital company.
81     (c)  "Certified capital company" means a corporation,
82partnership, or limited liability company that:
83     1.  Is certified by the office under this section;
84     2.  Receives investments of certified capital from two or
85more unaffiliated certified investors; and
86     3.  Makes investments in qualified port businesses as its
87primary activity.
88     (d)  "Certified investor" means any insurance company
89subject to premium tax liability under s. 624.509 that
90contributes certified capital.
91     (e)  "Department" means the Department of Financial
92Services.
93     (f)  "Office" means the Office of Tourism, Trade, and
94Economic Development.
95     (g)  "Premium tax liability" means any liability incurred
96by an insurance company under s. 624.509.
97     (h)  "Principal" means an executive officer of a
98corporation, partner of a partnership, manager of a limited
99liability company, or any other person with equivalent executive
100functions.
101     (i)  "Qualified port business" means the ports and
102associated facilities listed in s. 403.021(9)(b) that meet the
103following qualifications:
104     1.  The port is headquartered in this state and its
105principal business operations are located in this state.
106     2.  Regional projects use the port's foreign trade zone for
107purposes involving manufacturing, processing or assembling of
108products, or conducting or providing services.
109     3.  The port has applied and qualified for investment
110funding under paragraph (5)(d).
111     (j)  "Qualified debt instrument" means a debt instrument,
112or a hybrid of a debt instrument, issued by a certified capital
113company, at par value or a premium, with an original maturity
114date of at least 5 years after the date of issuance, a repayment
115schedule that is no faster than a level principal amortization
116over a 5-year period, and interest, distribution, or payment
117features that are not related to the profitability of the
118certified capital company or the performance of the certified
119capital company's investment portfolio.
120     (k)  "Qualified distribution" means any distribution or
121payment to equity holders of a certified capital company for:
122     1.  Costs and expenses of forming, syndicating, managing,
123and operating the certified capital company, including an annual
124management fee in an amount that does not exceed 2.5 percent of
125the certified capital of the certified capital company, plus
126reasonable and necessary fees in accordance with industry custom
127for professional services, including, but not limited to, legal
128and accounting services, related to the operation of the
129certified capital company; or
130     2.  Any projected increase in federal or state taxes,
131including penalties and interest related to state and federal
132income taxes, of the equity owners of a certified capital
133company resulting from the earnings or other tax liability of
134the certified capital company to the extent that the increase is
135related to the ownership, management, or operation of a
136certified capital company.
137     (4)  CERTIFICATION; GROUNDS FOR DENIAL OR DECERTIFICATION.-
138     (a)  To operate as a certified capital company, a
139corporation, partnership, or limited liability company must be
140certified by the department pursuant to this section.
141     (b)  An applicant for certification as a certified capital
142company must file a verified application with the department on
143or before December 1, 2010, in a form that the department may
144prescribe by rule. The applicant shall submit a nonrefundable
145application fee of $7,500 to the department. The applicant shall
146provide:
147     1.  The name of the applicant and the address of its
148principal office and each office in this state.
149     2.  The applicant's form and place of organization and the
150relevant organizational documents, bylaws, and amendments or
151restatements of such documents, bylaws, or amendments.
152     3.  Evidence from the Department of State that the
153applicant is registered with the Department of State as required
154by law, maintains an active status with the Department of State,
155and has not been dissolved or had its registration revoked,
156canceled, or withdrawn.
157     4.  The applicant's proposed method of doing business.
158     5.  The applicant's financial condition and history,
159including an audit report on the financial statements prepared
160in accordance with generally accepted accounting principles
161showing net capital of not less than $500,000 within 90 days
162after the date the application is submitted to the department.
163If the date of the application is more than 90 days after the
164preparation of the applicant's fiscal year-end financial
165statements, the applicant may file financial statements reviewed
166by an independent certified public accountant for the period
167subsequent to the audit report, together with the audited
168financial statement for the most recent fiscal year. If the
169applicant has been in business less than 12 months and has not
170prepared an audited financial statement, the applicant may file
171a financial statement reviewed by an independent certified
172public accountant.
173     (c)  On or before December 31, 2010, the department shall
174grant or deny certification as a certified capital company. If
175the department denies certification within the time period
176specified, the department shall inform the applicant of the
177grounds for the denial. If the department has not granted or
178denied certification within the time specified, the application
179shall be deemed approved. The department shall approve the
180application if the department finds that:
181     1.  The applicant satisfies the requirements of paragraph
182(b).
183     2.  No evidence exists that the applicant has committed any
184act specified in paragraph (d).
185     3.  At least two of the principals have a minimum of 5
186years of experience making venture capital investments out of
187private equity funds, with not less than $20 million being
188provided by third-party investors for investment in the early
189stage of operating businesses. At least one full-time manager or
190principal of the certified capital company who has such
191experience must be primarily located in an office of the
192certified capital company which is based in this state.
193     (d)  The department may deny certification or decertify a
194certified capital company if the grounds for decertification are
195not removed or corrected within 90 days after the notice of such
196grounds is received by the certified capital company. The
197department may deny certification or decertify a certified
198capital company if the certified capital company fails to
199maintain common stock or paid-in capital of at least $500,000,
200or if the department determines that the applicant, or any
201principal or director of the certified capital company, has:
202     1.  Violated any provision of this section;
203     2.  Made a material misrepresentation or false statement or
204concealed any essential or material fact from any person during
205the application process or with respect to information and
206reports required of certified capital companies under this
207section;
208     3.  Been convicted of, or entered a plea of guilty or nolo
209contendere to, a crime against the laws of this state or any
210other state or of the United States or any other country or
211government, including a fraudulent act in connection with the
212operation of a certified capital company, or in connection with
213the performance of fiduciary duties in another capacity;
214     4.  Been adjudicated liable in a civil action on grounds of
215fraud, embezzlement, misrepresentation, or deceit; or
216     5.a.  Been the subject of any decision, finding,
217injunction, suspension, prohibition, revocation, denial,
218judgment, or administrative order by any court of competent
219jurisdiction, administrative law judge, or any state or federal
220agency, national securities, commodities, or option exchange, or
221national securities, commodities, or option association,
222involving a material violation of any federal or state
223securities or commodities law or any rule or regulation adopted
224under such law, or any rule or regulation of any national
225securities, commodities, or options exchange, or national
226securities, commodities, or options association; or
227     b.  Been the subject of any injunction or adverse
228administrative order by a state or federal agency regulating
229banking, insurance, finance or small loan companies, real
230estate, mortgage brokers, or other related or similar
231industries.
232     (e)  The certified capital company shall file a copy of its
233certification with the department by January 31, 2011.
234     (f)  Any offering material involving the sale of securities
235of the certified capital company shall include the following
236statement: "By authorizing the formation of a certified capital
237company, the State of Florida does not endorse the quality of
238management or the potential for earnings of such company and is
239not liable for damages or losses to a certified investor in the
240company. Use of the word 'certified' in an offering does not
241constitute a recommendation or endorsement of the investment by
242the State of Florida. Investments in a certified capital company
243prior to the time such company is certified are not eligible for
244premium tax credits. If applicable provisions of law are
245violated, the state may require forfeiture of unused premium tax
246credits and repayment of used premium tax credits by the
247certified investor."
248     (g)  An insurance company or any affiliate of an insurance
249company may not manage or control, directly or indirectly, the
250direction of investments of a certified capital company. This
251prohibition does not preclude a certified investor, insurance
252company, or any other party from exercising its legal rights and
253remedies, which may include interim management of a certified
254capital company, if a certified capital company is in default of
255its obligations under law or its contractual obligations to such
256certified investor, insurance company, or other party.
257     (h)  On or before December 31 of each year, each certified
258capital company shall pay to the department an annual,
259nonrefundable renewal certification fee of $5,000. Renewal fees
260may not be required within 6 months after the date of initial
261certification.
262     (i)  The department shall administer and provide for the
263enforcement of certification requirements for certified capital
264companies as provided in this section. The department may adopt
265any rules necessary to carry out its duties, obligations, and
266powers related to certification, renewal of certification, or
267decertification of certified capital companies and may perform
268any other acts necessary for the proper administration and
269enforcement of such duties, obligations, and powers.
270     (j)  Decertification of a certified capital company under
271this subsection does not affect the ability of certified
272investors in the certified capital company from claiming future
273premium tax credits earned as a result of an investment in the
274certified capital company during the period in which it was duly
275certified.
276     (5)  INVESTMENTS BY THE OFFICE IN PORT-RELATED ACTIVITIES.-
277     (a)1.  The office shall seek to maintain the state's
278advantage in ports and related industries. In order to maintain
279that advantage, the office shall:
280     a.  Allocate at least 60 percent of the capital to direct
281port activities as described in s. 402.021(9).
282     b.  Allocate at least 20 percent of the capital to port-
283related activities as specified in s. 403.021(9).
284     c.  Allocate at least 20 percent of the capital to
285education related to ports and port-related studies under the
286New Florida Initiative developed by the Florida Board of
287Governors of the State University System.
288     2.  The capital raised under this section shall be
289allocated by July 1, 2012.
290     3.  An individual port project may not consume more than 15
291percent of the total revenues of the corporation's intake.
292     (b)  All capital not invested in qualified port businesses:
293     1.  Must be held in a financial institution as defined by
294s. 655.005(1)(h) or held by a broker-dealer registered under s.
295517.12.
296     2.  Must be invested only in:
297     a.  United States Treasury obligations;
298     b.  Certificates of deposit or other obligations, maturing
299within 3 years after acquisition of such certificates or
300obligations, issued by any financial institution or trust
301company incorporated under the laws of the United States;
302     c.  Marketable obligations, maturing within 5 years or less
303after the acquisition of such obligations, which are rated "A"
304or better by any nationally recognized credit rating agency;
305     d.  Mortgage-backed securities, with an average life of 5
306years or less, after the acquisition of such securities, which
307are rated "A" or better by any nationally recognized credit
308rating agency;
309     e.  Collateralized mortgage obligations and real estate
310mortgage investment conduits that are direct obligations of an
311agency of the Federal Government; are not private-label issues;
312are in book-entry form; and do not include the classes of
313interest only, principal only, residual, or zero; or
314     f.  Interests in money market funds, the portfolio of which
315is limited to cash and obligations described in sub-
316subparagraphs a.-d.
317     (c)  The aggregate amount of all investments in qualified
318port businesses made by the certified capital company from the
319date of its certification shall be considered in the calculation
320of the percentage requirements under paragraph (a).
321     (d)  When an investment in a qualified port business is
322ready, the port must petition the office to receive funding and
323certify that the investment is of a beneficial nature to the
324port, is ready to proceed within 60 days for design,
325construction, and permitting, and will create a lasting economic
326impact as defined by the office. Applications for funding must
327be made to the office under rules adopted by the office.
328     (6)  PREMIUM TAX CREDIT; AMOUNT; LIMITATIONS.-
329     (a)  Any certified investor who makes an investment of
330certified capital shall earn a vested credit against premium tax
331liability equal to 100 percent of the certified capital invested
332by the certified investor. Certified investors shall be entitled
333to use no more than 10 percentage points of the vested premium
334tax credit, including any carryforward credits under this
335section, per year beginning with premium tax filings for
336calendar year 2012. Any premium tax credits not used by
337certified investors in any single year may be carried forward
338and applied against the premium tax liabilities of such
339investors for subsequent calendar years. The carryforward credit
340may be applied against subsequent premium tax filings through
341calendar year 2029.
342     (b)  The credit to be applied against premium tax liability
343in any single year may not exceed the premium tax liability of
344the certified investor for that taxable year.
345     (c)  A certified investor claiming a credit against premium
346tax liability earned through an investment in a certified
347capital company shall not be required to pay any additional
348retaliatory tax levied pursuant to s. 624.5091 as a result of
349claiming such credit. Because credits under this section are
350available to a certified investor, s. 624.5091 does not limit
351such credit in any manner.
352     (d)  The amount of tax credits vested under this section
353shall not be considered in ratemaking proceedings involving a
354certified investor.
355     (7)  ANNUAL TAX CREDIT; MAXIMUM AMOUNT; ALLOCATION
356PROCESS.-
357     (a)  The total amount of tax credits which may be allocated
358by the office shall not exceed $500 million. The total amount of
359tax credits which may be used by certified investors under this
360section shall not exceed $25 million annually.
361     (b)  The office shall be responsible for allocating premium
362tax credits as provided for in this section to certified capital
363companies.
364     (c)  Each certified capital company must apply to the
365office for an allocation of premium tax credits for potential
366certified investors by March 15, 2011, on a form developed by
367the office with the cooperation of the Department of Revenue.
368The form shall be accompanied by an affidavit from each
369potential certified investor confirming that the potential
370certified investor has agreed to make an investment of certified
371capital in a certified capital company up to a specified amount,
372subject only to the receipt of a premium tax credit allocation
373pursuant to this subsection. No allocation shall be made to the
374potential investors of a certified capital company unless such
375certified capital company has filed premium tax allocation
376claims that would result in an allocation to the potential
377investors in such certified capital company of not less than $15
378million in the aggregate.
379     (d)  On or before April 1, 2011, the office shall inform
380each certified capital company of its share of total premium tax
381credits available for allocation to each of its potential
382investors.
383     (e)  If a certified capital company does not receive
384certified capital equaling the amount of premium tax credits
385allocated to a potential certified investor for which the
386investor filed a premium tax allocation claim within 10 business
387days after the investor received a notice of allocation, the
388certified capital company shall notify the office by overnight
389common carrier delivery service of the company's failure to
390receive the capital. That portion of the premium tax credits
391allocated to the certified capital company shall be forfeited.
392If the office must make a pro rata allocation under paragraph
393(f), it shall reallocate such available credits among the other
394certified capital companies on the same pro rata basis as the
395initial allocation.
396     (f)  If the total amount of capital committed by all
397certified investors to certified capital companies in premium
398tax allocation claims exceeds the aggregate cap on the amount of
399credits that may be awarded, the premium tax credits that may be
400allowed to any one certified investor shall be allocated using
401the following ratio:
402
403
A/B = X/>$500,000,000
404
405Where the letter "A" represents the total amount of certified
406capital that certified investors have agreed to invest in any
407one certified capital company, the letter "B" represents the
408aggregate amount of certified capital that all certified
409investors have agreed to invest in all certified capital
410companies, the letter "X" is the numerator and represents the
411total amount of premium tax credits and certified capital that
412may be allocated to a certified capital company in calendar year
4132011, and $500 million is the denominator and represents the
414total amount of premium tax credits and certified capital that
415may be allocated to all certified investors in calendar year
4162011. Any such premium tax credits are not first available for
417utilization until annual filings are made in 2012 for calendar
418year 2011, and the tax credits may be used at a rate not to
419exceed 10 percent annually.
420     (g)  The maximum amount of certified capital for which
421premium tax allocation claims may be filed on behalf of any
422certified investor and its affiliates by one or more certified
423capital companies may not exceed $25 million.
424     (h)  To the extent that less than $500 million in certified
425capital is raised in connection with the procedure set forth in
426paragraphs (c)-(g), the department may adopt rules to allow a
427subsequent allocation of the remaining premium tax credits
428authorized under this section.
429     (8)  ANNUAL TAX CREDIT; CLAIM PROCESS.-
430     (a)  On an annual basis, on or before December 31, each
431certified capital company shall file with the department and the
432office, in consultation with the department, on a form
433prescribed by the office, for each calendar year:
434     1.  The total dollar amount the certified capital company
435received from certified investors, the identity of the certified
436investors, and the amount received from each certified investor
437during the immediately preceding calendar year.
438     2.  The total dollar amount the certified capital company
439invested and the amount invested in qualified port businesses,
440together with the identity and location of those businesses and
441the amount invested in each qualified port business during the
442immediately preceding calendar year.
443     3.  For informational purposes only, the total number of
444permanent, full-time jobs either created or retained by the
445qualified port business during the immediately preceding
446calendar year, the average wage of the jobs created or retained,
447the industry sectors in which the qualified port businesses
448operate, and any additional capital invested in qualified port
449businesses from sources other than certified capital companies.
450     (b)  The form shall be verified by one or more principals
451of the certified capital company submitting the form.
452Verification shall be accomplished as provided in s.
45392.525(1)(b) and subject to the provisions of s. 92.525(3).
454     (c)  The office shall review the form, and any supplemental
455documentation, submitted by each certified capital company for
456the purpose of verifying:
457     1.  That the businesses in which certified capital has been
458invested by the certified capital company are in fact qualified
459port businesses and that the amount of certified capital
460invested by the certified capital company is as represented in
461the form.
462     2.  The amount of certified capital invested in the
463certified capital company by the certified investors.
464     3.  The amount of premium tax credit available to certified
465investors.
466     (d)  The Department of Revenue may audit and examine the
467accounts, books, or records of certified capital companies and
468certified investors to ascertain the correctness of any report
469and financial return that has been filed and to ascertain a
470certified capital company's compliance with the tax-related
471provisions of this section.
472     (e)  This subsection shall take effect January 1, 2011.
473     (9)  REQUIREMENT FOR FULL INVESTMENT; STATE PARTICIPATION.-
474     (a)  A certified capital company may make qualified
475distributions at any time. In order to make a distribution to
476its equity holders, other than a qualified distribution, a
477certified capital company must have invested an amount
478cumulatively equal to 100 percent of its certified capital in
479investments in qualified port businesses. Payments to debt
480holders of a certified capital company, however, may be made
481without restriction with respect to repayments of principal and
482interest on indebtedness owed to them by a certified capital
483company, including indebtedness of the certified capital company
484on which certified investors earned premium tax credits. A debt
485holder that is also a certified investor or equity holder of a
486certified capital company may receive payments with respect to
487such debt without restrictions.
488     (b)  Cumulative distributions from a certified capital
489company to its certified investors and equity holders, other
490than qualified distributions, in excess of the certified capital
491company's original certified capital and any additional capital
492contributions to the certified capital company may be audited by
493a nationally recognized certified public accounting firm
494acceptable to the office, at the expense of the certified
495capital company, if the department directs such an audit to be
496conducted. The audit shall determine whether aggregate
497cumulative distributions from the certified capital company to
498all certified investors and equity holders, other than qualified
499distributions, have equaled the sum of the certified capital
500company's original certified capital and any additional capital
501contributions to the certified capital company. If at the time
502of any such distribution made by the certified capital company,
503such distribution taken together with all other such
504distributions made by the certified capital company, other than
505qualified distributions, exceeds in the aggregate the sum of the
506certified capital company's original certified capital and any
507additional capital contributions to the certified capital
508company, as determined by the audit, the certified capital
509company shall pay to the Department of Revenue 10 percent of the
510portion of such distribution in excess of such amount. Payments
511to the Department of Revenue by a certified capital company
512pursuant to this paragraph may not exceed the aggregate amount
513of tax credits used by all certified investors in such certified
514capital company.
515     (10)  DECERTIFICATION.-
516     (a)  The department shall conduct an annual review of each
517certified capital company to determine if the certified capital
518company is abiding by the requirements of certification, to
519advise the certified capital company as to the eligibility
520status of its investments in qualified port businesses, and to
521ensure that no investment has been made in violation of this
522section. The cost of the annual review shall be paid by each
523certified capital company.
524     (b)  This subsection does not limit the Chief Financial
525Officer's authority to conduct audits of certified capital
526companies as deemed appropriate and necessary.
527     (c)  Any material violation of this section, or a finding
528that the certified capital company or any principal or director
529thereof has committed any act specified in paragraph (4)(d),
530constitutes grounds for decertification of the certified capital
531company. If the department determines that a certified capital
532company is no longer in compliance with the certification
533requirements of this section, the department shall, by written
534notice, inform the officers of such company that the company may
535be subject to decertification 90 days after the date of mailing
536of the notice, unless the deficiencies are corrected and the
537company is again found to be in compliance with all
538certification requirements.
539     (d)  At the end of the 90-day grace period, if the
540certified capital company is still not in compliance with the
541certification requirements, the department may issue a notice to
542revoke or suspend the certification or to impose an
543administrative fine. The department shall advise each respondent
544of the right to an administrative hearing under chapter 120
545prior to final action by the department.
546     (e)  If the department revokes a certification, such
547revocation shall also deny, suspend, or revoke the
548certifications of all affiliates of the certified capital
549company.
550     (f)  Decertification of a certified capital company for
551failure to meet all requirements for continued certification
552under paragraph (5)(a) may cause the recapture of premium tax
553credits previously claimed by such company and the forfeiture of
554future premium tax credits to be claimed by certified investors
555with respect to such certified capital company, as follows:
556     1.  Decertification of a certified capital company within 3
557years after its certification date shall cause the recapture of
558all premium tax credits previously claimed by such company and
559the forfeiture of all future premium tax credits to be claimed
560by certified investors with respect to such company.
561     2.  When a certified capital company meets all requirements
562for continued certification under subparagraph (5)(a)1. and
563subsequently fails to meet the requirements for continued
564certification under subparagraph (5)(a)2., the premium tax
565credits that have been or will be taken by certified investors
566within 3 years after the certification date of the certified
567capital company are not subject to recapture or forfeiture;
568however, all premium tax credits that have been or will be taken
569by certified investors after the third anniversary of the
570certification date of the certified capital company are subject
571to recapture or forfeiture.
572     3.  When a certified capital company meets all requirements
573for continued certification under subparagraphs (5)(a)1. and 2.
574and subsequently fails to meet the requirements for continued
575certification under subparagraph (5)(a)3., the premium tax
576credits that have been or will be taken by certified investors
577within 4 years after the certification date of the certified
578capital company are not subject to recapture or forfeiture;
579however, all premium tax credits that have been or will be taken
580by certified investors after the fourth anniversary of the
581certification date of the certified capital company are subject
582to recapture and forfeiture.
583     4.  If a certified capital company has met all requirements
584for continued certification under paragraph (5)(a), but the
585company is subsequently decertified, the premium tax credits
586that have been or will be taken by certified investors within 5
587years after the certification date of the company are not
588subject to recapture or forfeiture. Premium tax credits to be
589taken after the 5th year of certification are subject to
590forfeiture only if the certified capital company is decertified
591within 5 years after its certification date.
592     5.  If a certified capital company has invested an amount
593cumulatively equal to 100 percent of its certified capital in
594investments in qualified port businesses, all premium tax
595credits claimed or to be claimed by its certified investors are
596not subject to recapture or forfeiture.
597     (g)  Decertification of a certified capital company
598pursuant to subsection (4) or this subsection does not affect
599the ability of certified investors in such certified capital
600company to continue to claim future premium tax credits earned
601as an investment in the certified capital company during the
602period in which it was duly certified.
603     (h)  The office shall send written notice to the address of
604each certified investor whose premium tax credit has been
605subject to recapture or forfeiture, using the address last shown
606on the last premium tax filing.
607     (i)  The certified investor is responsible for returning to
608the Department of Revenue any forfeited insurance premium tax
609credits, and such funds shall be paid into the General Revenue
610Fund.
611     (j)  The certified investor shall file with the Department
612of Revenue an amended return or such other report as the
613department may prescribe by rule and pay any required tax, not
614later than 60 days after the decertification has been agreed to
615or finally determined, whichever shall first occur.
616     (k)  A notice of deficiency may be issued:
617     1.  At any time within 5 years after the date such
618notification is given; or
619     2.  At any time if a certified investor fails to notify the
620Department of Revenue.
621
622In either case, the amount of any proposed assessment set forth
623in such notice shall be limited to the amount of any deficiency
624resulting under this section from the recomputation of the
625certified investor's insurance premium tax and, if applicable,
626its retaliatory tax for the taxable year giving effect only to
627the item or items reflected in the decertification adjustment.
628     (l)  Any certified investor who fails to report and timely
629pay any tax due as a result of the forfeiture of its insurance
630premium tax credit is in violation of this subsection and is
631subject to a penalty of 10 percent of any underpayment or
632delinquent taxes due and payable.
633     (m)  When any taxpayer fails to pay any amount due as a
634result of the forfeiture of its insurance premium tax credit as
635provided for in this subsection, on or before the due date as
636specified in this subsection, interest shall be due on any
637insurance premium or retaliatory tax deficiency resulting from
638such forfeiture, at the rate of 12 percent per year from the due
639date of such amended return until paid.
640     (11)  TRANSFERABILITY.-The claim of a transferee of a
641certified investor's unused premium tax credit shall be
642permitted in the same manner and subject to the same provisions
643and limitations of this section as the original certified
644investor. The term "transferee" means any person who:
645     (a)  Through the voluntary sale, assignment, or other
646transfer of the business or control of the business of the
647certified investor, including the sale or other transfer of
648stocks or assets by merger, consolidation, or dissolution,
649succeeds to all or substantially all of the business and
650property of the certified investor;
651     (b)  Becomes by operation of law or otherwise the parent
652company of the certified investor;
653     (c)  Directly or indirectly owns, whether through rights,
654options, convertible interests, or otherwise, controls, or holds
655power to vote 10 percent or more of the outstanding voting
656securities or other ownership interest of the certified
657investor;
658     (d)  Is a subsidiary of the certified investor or has 10
659percent or more of its outstanding voting securities or other
660ownership interests directly or indirectly owned, whether
661through rights, options, convertible interests, or otherwise, by
662the certified investor; or
663     (e)  Directly or indirectly controls, is controlled by, or
664is under common control with the certified investor.
665     (12)  REPORTING REQUIREMENTS.-The office shall report on an
666annual basis to the Governor, the President of the Senate, and
667the Speaker of the House of Representatives on or before April
6681:
669     (a)  The total dollar amount each certified capital company
670received from all certified investors and any other investor,
671the identity of the certified investors, and the total amount of
672premium tax credit used by each certified investor for the
673previous calendar year.
674     (b)  The total dollar amount invested by each certified
675capital company and that portion invested in qualified port
676businesses, the identity and location of those businesses, the
677amount invested in each qualified port business, and the total
678number of permanent, full-time jobs created or retained by each
679qualified port business.
680     (c)  The return for the state as a result of the certified
681capital company investments in qualified port businesses,
682including the extent to which:
683     1.  Certified capital company investments have contributed
684to employment growth.
685     2.  The wage level of businesses in which certified capital
686companies have invested exceeds the average wage for the county
687in which the jobs are located.
688     3.  The investments of the certified capital companies in
689qualified port businesses have contributed to expanding or
690diversifying the economic base of the state.
691     (13)  FEES.-All fees and charges of any nature collected by
692the department under this section shall be paid into the State
693Treasury and credited to the General Revenue Fund.
694     (14)  RULEMAKING AUTHORITY.-
695     (a)  The Department of Revenue may by rule prescribe forms
696and procedures for the tax credit filings, audits, and
697forfeiture of premium tax credits described in this section, and
698for certified capital company payments under paragraph (9)(b).
699     (b)  The office may adopt any rules necessary to carry out
700its respective duties, obligations, and powers related to the
701administration, review, and reporting provisions of this section
702and may perform any other acts necessary for the proper
703administration and enforcement of such duties, obligations, and
704powers.
705     Section 2.  This act shall take effect July 1, 2010.


CODING: Words stricken are deletions; words underlined are additions.
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