Florida Senate - 2018                        COMMITTEE AMENDMENT
       Bill No. SB 1606
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  02/20/2018           .                                

       The Committee on Commerce and Tourism (Taddeo) recommended the
    1         Senate Amendment (with title amendment)
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. Section 288.1259, Florida Statutes, is created
    6  to read:
    7         288.1259Florida Motion Picture Capital Corporation.—
    8         (1)DEFINITIONS.—As used in this section, the term:
    9         (a)“Account” means the Florida Motion Picture Capital
   10  Account.
   11         (b)“Board” means the corporation’s board of directors.
   12         (c)“Corporation” means the Florida Motion Picture Capital
   13  Corporation.
   14         (d)“High-wage jobs” are jobs that pay at least 120 percent
   15  of the median wage for the arts, design, entertainment, sports,
   16  and media occupations category as determined by the most recent
   17  State Occupational Employment and Wage Estimates for this state
   18  published by the United States Department of Labor’s Bureau of
   19  Labor Statistics.
   20         (e)“In-state expenditures” means the costs of tangible
   21  property used in this state and services performed by residents
   22  of this state for a scripted production, including preproduction
   23  and postproduction, but excluding costs for development,
   24  marketing, and distribution.
   25         (f)“President” means the chief executive officer of the
   26  corporation.
   27         (g)“Scripted production” or “production” means a feature
   28  film at least 70 minutes in length, whether produced for
   29  theatrical, television, or direct-to-video release; a television
   30  series created to run multiple seasons having an order for
   31  distribution of at least five episodes; or a miniseries, which
   32  is produced predominately from a written screenplay or teleplay.
   33  The term does not include a commercial, an infomercial, or a
   34  political advertisement; a reality show; a game show; an awards
   35  show; a music video; an industrial or educational film; a
   36  weather or market program; a sporting event or sporting event
   37  broadcast; a gala; a production that solicits funds; a home
   38  shopping program; a political program; a documentary; a
   39  gambling-related production; a concert production; a local,
   40  regional, or Internet-distributed-only news show or current
   41  events show; a sports news or sports recap show; a video game; a
   42  pornographic production; or any production deemed obscene under
   43  chapter 847.
   44         (h)“Television” includes broadcast, cable, and Internet
   45  television.
   46         (2)CORPORATION.—The Florida Motion Picture Capital
   47  Corporation is created as a nonprofit corporation, to be
   48  incorporated under chapter 617 and approved by the Department of
   49  State. The corporation shall be organized on a nonstock basis.
   50  The purpose of the corporation is to encourage the use of this
   51  state as a site for scripted productions by providing financing
   52  to such productions. The corporation is subject to the
   53  provisions of chapter 119 relating to public records and the
   54  provisions of chapter 286 relating to public meetings and
   55  records.
   56         (3)POWERS AND LIMITATIONS.—
   57         (a)The corporation is authorized to provide financing to
   58  scripted productions in this state pursuant to the criteria,
   59  bylaws, rules, and policies adopted by the board, which must
   60  include the following:
   61         1.The corporation shall provide financing to productions
   62  that it estimates will generate the greatest economic impact to
   63  this state.
   64         2.The amount of financing provided to a production must
   65  not exceed the amount of the production’s in-state expenditures
   66  for that production.
   67         3.The financing provided to a production must rank and
   68  remain pari passu with the highest class of ownership in the
   69  production, such that, in the event of liquidation or
   70  bankruptcy, the corporation’s investment shares the highest
   71  priority with other preferred shareholders.
   72         4.Any financing provided under this section must be less
   73  than one-half of the cost of the production’s total shares or
   74  other ownership interest.
   75         5.The amount of financing provided to any one production
   76  must not exceed 12.5 percent of the sum of the remaining amount
   77  of uncommitted funds in the account plus the amounts of all
   78  outstanding investments in other productions.
   79         6.The corporation may not have any voting rights, creative
   80  control, or management authority over a production receiving
   81  financing under this section.
   82         7.The corporation shall limit the return on its
   83  investments by establishing variable limits on returns that
   84  account for time value and reduce returns in exchange for a
   85  production’s early buyout of financing positions. For a
   86  production exercising an early buyout, the corporation shall
   87  limit its return on investment to the minimum that is
   88  actuarially measurable and credible and sufficiently related to
   89  actual and expected losses to ensure the corporation’s self
   90  sufficiency and preservation of the state appropriations
   91  provided for the investment.
   92         8.The corporation shall establish an application process
   93  and conduct at least two application periods per fiscal year,
   94  providing no more than 40 percent of the total funds in the
   95  account for the fiscal year to productions in any one
   96  application period.
   97         (b)The board shall adopt objective criteria for evaluating
   98  applications for financing scripted productions in this state.
   99         1.The criteria must require:
  100         a.The production to use a bonded third-party collection
  101  account management firm to ensure that the corporation receives
  102  all funds due from sales proceeds in accordance with a waterfall
  103  agreement included in the corporation’s investment terms.
  104         b.Presales or sales estimates from a sales agency that has
  105  sold at least $50 million in feature films which are based on
  106  the cast and script of the production and which reflect a value
  107  of at least 1.5 times the exposure of the corporation.
  108         c.The production to carry an insurance package from an
  109  insurance company rated “A” or higher by A.M. Best Company which
  110  must include general liability insurance, workers’ compensation,
  111  and key cast and director insurance that covers the costs of
  112  disruption or replacement downtime in the event of illness or
  113  other loss of services from such individuals. If at least 75
  114  percent of the production’s filming schedule occurs after June 1
  115  and before November 30, the production’s insurance package must
  116  include hurricane coverage.
  117         d.The production to provide proof of funds for the
  118  remaining budget within 60 days after application approval and
  119  place the remaining budget in escrow before the release of
  120  corporation funds.
  121         e.That the lead producer or production company has
  122  completed, sold, and delivered at least five feature films, or
  123  the production must provide a completion bond.
  124         f.That the production’s budget, script, and filming
  125  schedule have been evaluated and approved by a production expert
  126  selected by the board.
  127         g.The production budget to include contingency funds in an
  128  amount equal to at least 5 percent of the total budget. Up to 40
  129  percent of the contingency funds may be expended during
  130  production without the approval of the board. The remaining
  131  contingency funds may only be expended with prior approval of
  132  the board.
  133         h.The board to release corporation funds to a production
  134  in the following manner:
  135         (I)Fifty percent of corporation funds shall be released on
  136  the first day of principal photography.
  137         (II)Twenty-five percent of corporation funds shall be
  138  released upon completion of principal photography.
  139         (III)Twenty-five percent of corporation funds shall be
  140  released after final picture lock, as that term is generally
  141  understood in the production industry.
  142         i.The production company to provide the board with the
  143  right to inspect and audit the weekly cost reports and general
  144  ledger of the production throughout preproduction, production,
  145  and postproduction.
  146         2.Preference shall be given to:
  147         a.Productions that will generate the greatest comparative
  148  economic impact for this state. The corporation shall make a
  149  determination of each project’s comparative economic impact to
  150  this state by comparing the project budgets submitted during the
  151  application period and determining which projects create the
  152  greatest number of high-wage jobs for state residents and
  153  propose the most significant in-state expenditures as a
  154  percentage of total production expenditures.
  155         b.Productions in which the proposed financing by the
  156  corporation is lowest as a percentage of the production’s total
  157  shares or other ownership interest.
  158         c.Productions with the quickest deployment, in which the
  159  production’s in-state expenditures will begin soonest after the
  160  corporation commits to financing.
  161         d.Productions by companies with a verifiable track record
  162  in producing successful productions.
  163         e.Productions by production companies based in this state
  164  or by producers, writers, or directors who are residents of this
  165  state.
  166         f.Productions expected to significantly increase tourism
  167  to the state by using a screenplay or teleplay based on a
  168  Florida story or including recognizable locations in this state.
  169         g.Productions whose development demonstrates the
  170  likelihood of success, including, but not limited to, having a
  171  recognized director, actor, or other creative talent attached to
  172  the production.
  173         h.Productions in which the corporation’s financing is
  174  matched from local sources, including, but not limited to,
  175  county or municipal agencies, local film commissions, or other
  176  community resources.
  177         (c)The corporation may charge fees, including, but not
  178  limited to, application fees from productions seeking financing
  179  under this section, but such fees may not exceed the reasonable
  180  estimated cost of the activity for which the fee is charged,
  181  such as the cost of processing an application.
  183         (a)1.The board shall consist of seven members who are
  184  permanent residents of this state. Minority and gender
  185  representation must be considered when making appointments to
  186  the board. The board shall be composed of the following:
  187         a.Two members who have experience in investment banking
  188  and funds management focused on feature film and television
  189  production.
  190         b.Three members who have recent experience and are
  191  recognized leaders in the production of feature films or
  192  television in this state. Such members may include, but are not
  193  limited to, producers, directors, production managers or
  194  supervisors, or similar persons in positions of production
  195  leadership.
  196         c.One member who represents businesses that provide
  197  supplies for feature film and television production in this
  198  state, such as small businesses through which productions buy or
  199  rent equipment, house and feed cast and crew, purchase supplies
  200  and raw materials, or build production infrastructure.
  201         d.One member who represents this state’s feature film and
  202  television workforce.
  203         2.The initial board shall be appointed as follows:
  204         a.The Florida Venture Forum and the Florida Chamber of
  205  Commerce shall each appoint one member pursuant to sub
  206  subparagraph 1.a.
  207         b.The Governor, the President of the Senate, and the
  208  Speaker of the House of Representatives shall each appoint one
  209  member pursuant to sub-subparagraph 1.b.
  210         c.The department shall appoint one member pursuant to sub
  211  subparagraph 1.c.
  212         d.The Congress of Motion Picture Associations of Florida
  213  shall appoint one member pursuant to sub-subparagraph 1.d.
  215  To establish staggered terms, the initial members appointed by
  216  the Florida Chamber of Commerce and the Congress of Motion
  217  Picture Associations of Florida shall be appointed to 1-year
  218  terms; the initial members appointed by the President of the
  219  Senate and the Speaker of the House of Representatives shall be
  220  appointed to 2-year terms; and the initial members appointed by
  221  the Governor, the department, and the Florida Venture Forum
  222  shall be appointed to 3-year terms.
  223         3.Board members shall serve for a term of 3 years and are
  224  eligible for reappointment. Vacancies shall be filled by
  225  appointment in the same manner as the member whose position is
  226  being filled. Vacancies shall be filled within 30 days after the
  227  date of the vacancy. A vacancy that occurs before the scheduled
  228  expiration of the term of a member shall be filled for the
  229  remainder of the unexpired term.
  230         (b)Board members are subject to the Code of Ethics for
  231  Public Officers and Employees as set forth in part III of
  232  chapter 112. A board member must abstain from voting and comply
  233  with the disclosure requirements of s. 112.3143 if there appears
  234  to be a possible conflict under s. 112.311, s. 112.313, or s.
  235  112.3143. This paragraph does not prohibit any principal by whom
  236  a board member is retained, as defined in s. 112.3143(1)(a),
  237  from applying for or receiving financing under this section.
  238         (c)A board member must, with respect to an application for
  239  financing which is currently pending before the corporation or
  240  which the board member knows or reasonably expects will be
  241  submitted to the corporation within 180 days, refrain from
  242  commenting on or discussing the application outside of a board
  243  meeting with the applicant or any person retained by the
  244  applicant.
  245         (d)Board members shall serve without compensation but may
  246  be reimbursed in accordance with s. 112.061 for all necessary
  247  expenses in the performance of their duties, including attending
  248  board meetings and conducting board business.
  249         (e)The board shall:
  250         1.Before the expenditure of funds from the account, adopt
  251  bylaws, rules, and policies that are necessary to carry out the
  252  corporation’s responsibilities under this section.
  253         2.Hold regularly scheduled meetings, at least once per
  254  application period, in order to carry out the objectives and
  255  responsibilities of the board.
  256         (5)ACCOUNT.—
  257         (a)The board shall create the account for the purpose of
  258  receiving state, federal, county, municipal, and private
  259  financial resources, and the returns from productions financed
  260  by allocations from those resources, and for the purposes of
  261  this section. The account shall be under the exclusive control
  262  of the board.
  263         (b)Appropriations provided to the corporation for
  264  financing productions shall be deposited into the account.
  265         (c)The board may deposit the funds of the account with
  266  state or federally chartered financial institutions in this
  267  state and may invest any funds not allocated to a production
  268  during a fiscal year in permissible securities as described in
  269  s. 560.210(1).
  270         (d)Dividend payments received from the investments made by
  271  the corporation shall be redeposited into the account to be used
  272  for the purposes of this section.
  273         (e)The corporation shall keep its operating expenses to
  274  the minimum amount necessary. Such operating expenses shall be
  275  funded by appropriations provided for that purpose and from net
  276  returns from financing provided under this section.
  277         (f)Any claims against the account shall be paid solely
  278  from the account. Under no circumstances shall the credit of the
  279  state be pledged other than funds appropriated by law to the
  280  account, nor shall the state be liable or obligated in any way
  281  for claims on the account or against the corporation.
  283         (a)The board shall appoint a president. The president must
  284  be knowledgeable about private and public financing of feature
  285  film and television projects.
  286         (b)The president shall serve at the pleasure of the board
  287  and shall receive a salary and benefits as fixed by the board.
  288  The president’s salary and benefits may not exceed the salary
  289  and benefits authorized to be paid to the Governor.
  290         (c)The president shall administer the programs of the
  291  corporation and perform such duties as delegated by the board.
  292         (d)The president shall provide support staff to the board
  293  as requested.
  294         (e)The president shall submit an annual budget to be
  295  approved by the board.
  297         (a) The corporation shall notify the department upon final
  298  execution of each contract or agreement by which the corporation
  299  provides financing to a production. The corporation shall also
  300  publish and maintain a copy of the notice on the corporation’s
  301  website while the financing remains outstanding. To provide
  302  adequate notice to the businesses and workforce that supply
  303  feature film and television production in this state, the notice
  304  must include, but need not be limited to, a brief description of
  305  the production, the name of the production company, and, to the
  306  extent available, the names of the director, cinematographer,
  307  production designer, costume designer, and transportation
  308  coordinator.
  309         (b) The corporation shall submit a report to the department
  310  on all corporation activities for the previous fiscal year as a
  311  supplement to the department’s annual report required under s.
  312  20.60. This supplemental report must include:
  313         1. A status report on all projects currently being financed
  314  through the corporation, the number of projects financed
  315  pursuant to this section, the dollar amount of financing
  316  provided to such projects, and the names of the recipients; and
  317         2. Information as to the economic impact of the projects
  318  financed by the corporation.
  319         (c) The Auditor General shall annually conduct a financial
  320  audit, as defined in s. 11.45, of the corporation and the
  321  account.
  322         Section 2. Paragraph (b) of subsection (10) of section
  323  20.60, Florida Statutes, is amended to read
  324         20.60 Department of Economic Opportunity; creation; powers
  325  and duties.—
  326         (10) The department, with assistance from Enterprise
  327  Florida, Inc., shall, by November 1 of each year, submit an
  328  annual report to the Governor, the President of the Senate, and
  329  the Speaker of the House of Representatives on the condition of
  330  the business climate and economic development in the state.
  331         (b) The report must incorporate annual reports of other
  332  programs, including:
  333         1. Information provided by the Department of Revenue under
  334  s. 290.014.
  335         2. Information provided by enterprise zone development
  336  agencies under s. 290.0056 and an analysis of the activities and
  337  accomplishments of each enterprise zone.
  338         3. The Economic Gardening Business Loan Pilot Program
  339  established under s. 288.1081 and the Economic Gardening
  340  Technical Assistance Pilot Program established under s.
  341  288.1082.
  342         4. A detailed report of the performance of the Black
  343  Business Loan Program and a cumulative summary of quarterly
  344  report data required under s. 288.714.
  345         5. The Rural Economic Development Initiative established
  346  under s. 288.0656.
  347         6. The Florida Unique Abilities Partner Program.
  348         7.The Florida Motion Picture Capital Corporation
  349  established under s. 288.1259.
  350         Section 3. This act shall take effect July 1, 2018.
  352  ================= T I T L E  A M E N D M E N T ================
  353  And the title is amended as follows:
  354         Delete everything before the enacting clause
  355  and insert:
  356                        A bill to be entitled                      
  357         An act relating to film and television production;
  358         creating s. 288.1259, F.S.; defining terms;
  359         establishing the Florida Motion Picture Capital
  360         Corporation to encourage the use of this state as a
  361         site for scripted productions by providing financing
  362         to certain productions; providing powers of and
  363         imposing limitations on the corporation; requiring the
  364         board of directors to adopt specified criteria for
  365         evaluating applications for financing; requiring
  366         productions to use a bonded third-party collection
  367         account management firm; requiring that certain
  368         presales or sales estimates meet a specified minimum
  369         value; requiring productions to carry an insurance
  370         package meeting certain standards; requiring
  371         productions to provide certain proof of funds within a
  372         specified period; requiring that the lead producer or
  373         production company have a specified sales record or
  374         provide a completion bond; requiring that certain
  375         items be evaluated and approved by a production expert
  376         selected by the board; requiring that the production
  377         budget include a certain amount of contingency funds;
  378         providing for the release of corporation funds
  379         according to a specified schedule; requiring the board
  380         to approve the expenditure of certain contingency
  381         funds; requiring the board to release corporation
  382         funds to a production in a specified manner; requiring
  383         the production company to allow the board to inspect
  384         and audit certain reports and ledgers within a certain
  385         timeframe; requiring the board to give preference to
  386         productions that meet specified criteria; authorizing
  387         the corporation to charge certain fees; requiring the
  388         board to be composed of certain members; providing for
  389         the appointment of the board, terms for the board, and
  390         guidelines for the board; prohibiting board members
  391         from discussing certain pending applications with
  392         applicants outside of a board meeting for a specified
  393         period; requiring board members to serve without
  394         compensation; authorizing the board members to be
  395         reimbursed for certain expenses; requiring the board
  396         to adopt bylaws, rules, and policies before the
  397         expenditure of funds; requiring the board to hold
  398         regularly scheduled meetings; requiring the board to
  399         create the Florida Motion Picture Capital Account and
  400         maintain exclusive control of the account; authorizing
  401         the board to deposit funds with certain institutions
  402         and to invest certain funds in permissible securities;
  403         requiring that certain dividend payments be
  404         redeposited in the account for a specified purpose;
  405         requiring that the corporation’s operating expenses be
  406         kept to a minimum and funded by appropriations and
  407         certain net returns; requiring that a claim against
  408         the account be solely paid from the account; requiring
  409         the board to appoint a president who meets specified
  410         criteria; limiting the salary and benefits of the
  411         president; providing the powers and duties of the
  412         president; requiring the corporation to provide
  413         certain notice of financing contracts or agreements to
  414         the Department of Economic Opportunity and on the
  415         corporation’s website for a specified period of time;
  416         requiring that the notice include specified
  417         information; requiring the corporation to submit a
  418         supplemental report to the department which contains
  419         certain information; requiring the Auditor General to
  420         conduct an annual financial audit of the corporation
  421         and the account; amending s. 20.60, F.S.; conforming a
  422         provision to changes made by the act; providing an
  423         effective date.