Florida Senate - 2018                                    SB 1606
       By Senator Taddeo
       40-01128-18                                           20181606__
    1                        A bill to be entitled                      
    2         An act relating to film and television production;
    3         creating s. 288.1259, F.S.; defining terms;
    4         establishing the Florida Motion Picture Capital
    5         Corporation to encourage the use of this state as a
    6         site for scripted productions by providing financing
    7         to certain productions; providing powers of the
    8         corporation; requiring the board of directors to adopt
    9         specified criteria for evaluating a financing
   10         application; requiring the production to use a bonded
   11         third-party collection account management firm;
   12         requiring that certain presales or sales estimates
   13         meet a specified minimum value; requiring a production
   14         to carry an insurance package meeting certain
   15         standards; requiring a production to provide certain
   16         proof of funds within a specified period; requiring
   17         the lead producer or production company to have a
   18         specified sales record or provide a completion bond;
   19         requiring that certain items be evaluated and approved
   20         by a production expert selected by the board;
   21         requiring the production budget to include a certain
   22         amount of contingency funds; providing for the release
   23         of corporation funds according to a specified
   24         schedule; requiring the board to approve the
   25         expenditure of certain contingency funds; requiring
   26         the board to release corporation funds to a production
   27         in a specified manner; requiring the production
   28         company to allow the board to inspect and audit
   29         certain reports and ledgers within a certain
   30         timeframe; requiring the board to give preference to
   31         productions that meet specified criteria; authorizing
   32         the corporation to charge certain fees; requiring the
   33         board to be composed of certain members; providing for
   34         the appointment of the initial board, terms for the
   35         board, and guidelines for the board; prohibiting a
   36         board member from discussing certain pending
   37         applications with applicants outside of a board
   38         meeting for a specified period; requiring a board
   39         member to serve without compensation; authorizing the
   40         board members to be reimbursed for certain expenses;
   41         requiring the board to adopt bylaws, rules, and
   42         policies before the expenditure of funds; requiring
   43         the board to hold regularly scheduled meetings;
   44         requiring the board to create the Florida Motion
   45         Picture Capital Account and maintain exclusive control
   46         of the account; authorizing the board to deposit funds
   47         with certain institutions and to invest certain funds
   48         in permissible securities; requiring that certain
   49         dividend payments be redeposited in the account for a
   50         specified purpose; requiring that the corporation’s
   51         operating expenses be kept to a minimum and funded by
   52         appropriations and certain net returns; requiring that
   53         a claim against the account be solely paid from the
   54         account; requiring the board to appoint a president
   55         who meets specified criteria; providing the powers and
   56         duties of the president; requiring the corporation to
   57         provide certain notice of financing contracts or
   58         agreements to the Department of Economic Opportunity
   59         and on the corporation’s website for a specified
   60         period of time; requiring that the notice include
   61         specified information; providing an effective date.
   63  Be It Enacted by the Legislature of the State of Florida:
   65         Section 1. Section 288.1259, Florida Statutes, is created
   66  to read:
   67         288.1259Florida Motion Picture Capital Corporation.—
   68         (1)DEFINITIONS.—As used in this section, the term:
   69         (a)“Account” means the Florida Motion Picture Capital
   70  Account.
   71         (b)“Board” means the corporation’s board of directors.
   72         (c)“Corporation” means the Florida Motion Picture Capital
   73  Corporation.
   74         (d)“High-wage jobs” are jobs that pay at least 120 percent
   75  of the median wage for the arts, design, entertainment, sports,
   76  and media occupations category as determined by the most recent
   77  State Occupational Employment and Wage Estimates for this state
   78  published by the United States Department of Labor’s Bureau of
   79  Labor Statistics.
   80         (e)“In-state expenditures” means the costs of tangible
   81  property used in this state and services performed by residents
   82  of this state for a scripted production, including preproduction
   83  and postproduction, but excluding costs for development,
   84  marketing, and distribution.
   85         (f)“President” means the chief executive officer of the
   86  corporation.
   87         (g)“Scripted production” or “production” means a feature
   88  film at least 70 minutes in length, whether produced for
   89  theatrical, television, or direct-to-video release; a television
   90  series created to run multiple seasons having an order for
   91  distribution of at least five episodes; or a miniseries, which
   92  is produced predominately from a written screenplay or teleplay.
   93  The term does not include a commercial, an infomercial, or a
   94  political advertisement; a reality show; a game show; an awards
   95  show; a music video; an industrial or educational film; a
   96  weather or market program; a sporting event or sporting event
   97  broadcast; a gala; a production that solicits funds; a home
   98  shopping program; a political program; a documentary; a
   99  gambling-related production; a concert production; a local,
  100  regional, or Internet-distributed-only news show or current
  101  events show; a sports news or sports recap show; a video game; a
  102  pornographic production; or any production deemed obscene under
  103  chapter 847.
  104         (h)“Television” includes broadcast, cable, and Internet
  105  television.
  106         (2)CORPORATION.—The Florida Motion Picture Capital
  107  Corporation is created as a nonprofit corporation, to be
  108  incorporated under chapter 617 and approved by the Department of
  109  State. The corporation shall be organized on a nonstock basis.
  110  The purpose of the corporation is to encourage the use of this
  111  state as a site for scripted productions by providing financing
  112  to such productions.
  113         (3)POWERS AND LIMITATIONS.—
  114         (a)The corporation is authorized to provide financing to
  115  scripted productions in this state pursuant to the criteria,
  116  bylaws, rules, and policies adopted by the board, which must
  117  include the following:
  118         1.The corporation shall provide financing to productions
  119  that it estimates will generate the greatest economic impact to
  120  this state.
  121         2.The amount of financing provided to a production must
  122  not exceed the amount of the production’s in-state expenditures
  123  for that production.
  124         3.The financing provided to a production must rank and
  125  remain pari passu with the highest class of ownership in the
  126  production, such that, in the event of liquidation or
  127  bankruptcy, the corporation’s investment shares the highest
  128  priority with other preferred shareholders.
  129         4.Any financing provided under this section must be less
  130  than one-half of the cost of the production’s total shares or
  131  other ownership interest.
  132         5.The amount of financing provided to any one production
  133  must not exceed 12.5 percent of the sum of the remaining amount
  134  of uncommitted funds in the account plus the amounts of all
  135  outstanding investments in other productions.
  136         6.The corporation may not have any voting rights, creative
  137  control, or management authority over a production receiving
  138  financing under this section.
  139         7.The corporation shall limit the return on its
  140  investments by establishing variable limits on returns that
  141  account for time value and reduce returns in exchange for a
  142  production’s early buyout of financing positions. For a
  143  production exercising an early buyout, the corporation shall
  144  limit its return on investment to the minimum that is
  145  actuarially measurable and credible and sufficiently related to
  146  actual and expected losses to ensure the corporation’s self
  147  sufficiency and preservation of the state appropriations
  148  provided for the investment.
  149         8.The corporation shall establish an application process
  150  and conduct at least two application periods per fiscal year,
  151  providing no more than 40 percent of the total funds in the
  152  Florida Motion Picture Capital Account for the fiscal year to
  153  productions in any one application period.
  154         (b)The board shall adopt objective criteria for evaluating
  155  applications for financing scripted productions in this state.
  156         1.The criteria must require:
  157         a.The production to use a bonded third-party collection
  158  account management firm to ensure that the corporation receives
  159  all funds due from sales proceeds in accordance with a waterfall
  160  agreement included in the corporation’s investment terms.
  161         b.Presales or sales estimates from a sales agency that has
  162  sold at least $50 million in feature films which are based on
  163  the cast and script of the production and which reflect a value
  164  of at least 1.5 times the exposure of the corporation.
  165         c.The production to carry an insurance package from an
  166  insurance company rated “A” or higher by A.M. Best Company which
  167  must include general liability insurance, workers’ compensation,
  168  and key cast and director insurance that covers the costs of
  169  disruption or replacement downtime in the event of illness or
  170  other loss of services from such individuals. If at least 75
  171  percent of the production’s filming schedule occurs after June 1
  172  and before November 30, the production’s insurance package must
  173  include hurricane coverage.
  174         d.The production to provide proof of funds for the
  175  remaining budget within 60 days after application approval and
  176  place the remaining budget in escrow before the release of
  177  corporation funds.
  178         e.That the lead producer or production company has
  179  completed, sold, and delivered at least five feature films, or
  180  the production must provide a completion bond.
  181         f.That the production’s budget, script, and filming
  182  schedule have been evaluated and approved by a production expert
  183  selected by the board.
  184         g.The production budget to include contingency funds in an
  185  amount equal to at least 5 percent of the total budget. Up to 40
  186  percent of the contingency funds may be expended during
  187  production without the approval of the board. The remaining
  188  contingency funds may only be expended with prior approval of
  189  the board.
  190         h.The board to release corporation funds to a production
  191  in the following manner:
  192         (I)Fifty percent of corporation funds shall be released on
  193  the first day of principal photography.
  194         (II)Twenty-five percent of corporation funds shall be
  195  released upon completion of principal photography.
  196         (III)Twenty-five percent of corporation funds shall be
  197  released after final picture lock, as that term is generally
  198  understood in the production industry.
  199         i.The production company to provide the board with the
  200  right to inspect and audit the weekly cost reports and general
  201  ledger of the production throughout preproduction, production,
  202  and postproduction.
  203         2.Preference shall be given to:
  204         a.Productions that will generate the greatest comparative
  205  economic impact for this state. The corporation shall make a
  206  determination of each project’s comparative economic impact to
  207  this state by comparing the project budgets submitted during the
  208  application period and determining which projects create the
  209  greatest number of high-wage jobs for state residents and
  210  propose the most significant in-state expenditures as a
  211  percentage of total production expenditures.
  212         b.Productions in which the proposed financing by the
  213  corporation is lowest as a percentage of the production’s total
  214  shares or other ownership interest.
  215         c.Productions with the quickest deployment, in which the
  216  production’s in-state expenditures will begin soonest after the
  217  corporation commits to financing.
  218         d.Productions by companies with a verifiable track record
  219  in producing successful productions.
  220         e.Productions by production companies based in this state
  221  or by producers, writers, or directors who are residents of this
  222  state.
  223         f.Productions expected to significantly increase tourism
  224  to the state by using a screenplay or teleplay based on a
  225  Florida story or including recognizable locations in this state.
  226         g.Productions whose development demonstrates the
  227  likelihood of success, including, but not limited to, having a
  228  recognized director, actor, or other creative talent attached to
  229  the production.
  230         h.Productions in which the corporation’s financing is
  231  matched from local sources, including, but not limited to,
  232  county or municipal agencies, local film commissions, or other
  233  community resources.
  234         (c)The corporation may charge fees, including, but not
  235  limited to, application fees from productions seeking financing
  236  under this section, but such fees may not exceed the reasonable
  237  estimated cost of the activity for which the fee is charged,
  238  such as the cost of processing an application.
  240         (a)1.The board shall consist of seven members who are
  241  permanent residents of this state. Minority and gender
  242  representation must be considered when making appointments to
  243  the board. The board shall be composed of the following:
  244         a.Two members who have experience in investment banking
  245  and funds management focused on feature film and television
  246  production.
  247         b.Three members who have recent experience and are
  248  recognized leaders in the production of feature films or
  249  television in this state. Such members may include, but are not
  250  limited to, producers, directors, production managers or
  251  supervisors, or similar persons in positions of production
  252  leadership.
  253         c.One member who represents businesses that provide
  254  supplies for feature film and television production in this
  255  state, such as small businesses through which productions buy or
  256  rent equipment, house and feed cast and crew, purchase supplies
  257  and raw materials, or build production infrastructure.
  258         d.One member who represents this state’s feature film and
  259  television workforce.
  260         2.The initial board shall be appointed as follows:
  261         a.The Florida Venture Forum and the Florida Chamber of
  262  Commerce shall each appoint one member pursuant to sub
  263  subparagraph 1.a.
  264         b.The Governor, the President of the Senate, and the
  265  Speaker of the House of Representatives shall each appoint one
  266  member pursuant to sub-subparagraph 1.b.
  267         c.The department shall appoint one member pursuant to sub
  268  subparagraph 1.c.
  269         d.The Congress of Motion Picture Associations of Florida
  270  shall appoint one member pursuant to sub-subparagraph 1.d.
  272  To establish staggered terms, the initial members appointed by
  273  the Florida Chamber of Commerce and the Congress of Motion
  274  Picture Associations of Florida shall be appointed to 1-year
  275  terms; the initial members appointed by the President of the
  276  Senate and the Speaker of the House of Representatives shall be
  277  appointed to 2-year terms; and the initial members appointed by
  278  the Governor, the department, and the Florida Venture Forum
  279  shall be appointed to 3-year terms.
  280         3.Board members shall serve for a term of 3 years and are
  281  eligible for reappointment. Vacancies shall be filled by the
  282  board within 30 days after the date of the vacancy. A vacancy
  283  that occurs before the scheduled expiration of the term of a
  284  member shall be filled for the remainder of the unexpired term.
  285         (b)Board members are subject to the Code of Ethics for
  286  Public Officers and Employees as set forth in part III of
  287  chapter 112. A board member must abstain from voting and comply
  288  with the disclosure requirements of s. 112.3143 if there appears
  289  to be a possible conflict under s. 112.311, s. 112.313, or s.
  290  112.3143. This paragraph does not prohibit any principal by whom
  291  a board member is retained, as defined in s. 112.3143(1)(a),
  292  from applying for or receiving financing under this section.
  293         (c)A board member must, with respect to an application for
  294  financing which is currently pending before the corporation or
  295  which the board member knows or reasonably expects will be
  296  submitted to the corporation within 180 days, refrain from
  297  commenting on or discussing the application outside of a board
  298  meeting with the applicant or any person retained by the
  299  applicant.
  300         (d)Board members shall serve without compensation but may
  301  be reimbursed in accordance with s. 112.061 for all necessary
  302  expenses in the performance of their duties, including attending
  303  board meetings and conducting board business.
  304         (e)The board shall:
  305         1.Before the expenditure of funds from the Florida Motion
  306  Picture Capital Account, adopt bylaws, rules, and policies that
  307  are necessary to carry out the corporation’s responsibilities
  308  under this section.
  309         2.Hold regularly scheduled meetings, at least once per
  310  application period, in order to carry out the objectives and
  311  responsibilities of the board.
  312         (5)ACCOUNT.—
  313         (a)The board shall create the Florida Motion Picture
  314  Capital Account for the purpose of receiving state, federal,
  315  county, municipal, and private financial resources, and the
  316  returns from productions financed by allocations from those
  317  resources, and for the purposes of this section. The account
  318  shall be under the exclusive control of the board.
  319         (b)Appropriations provided to the corporation for
  320  financing productions shall be deposited into the account.
  321         (c)The board may deposit the funds of the account with
  322  state or federally chartered financial institutions in this
  323  state and may invest any funds not allocated to a production
  324  during a fiscal year in permissible securities as described in
  325  s. 560.210(1).
  326         (d)Dividend payments received from the investments made by
  327  the corporation shall be redeposited into the account to be used
  328  for the purposes of this section.
  329         (e)The corporation shall keep its operating expenses to
  330  the minimum amount necessary. Such operating expenses shall be
  331  funded by appropriations provided for that purpose and from net
  332  returns from financing provided under this section.
  333         (f)Any claims against the account shall be paid solely
  334  from the account. Under no circumstances shall the credit of the
  335  state be pledged other than funds appropriated by law to the
  336  account, nor shall the state be liable or obligated in any way
  337  for claims on the account or against the corporation.
  339         (a)The board shall appoint a president. The president must
  340  be knowledgeable about private and public financing of feature
  341  film and television projects.
  342         (b)The president shall serve at the pleasure of the board
  343  and shall receive a salary and benefits as fixed by the board.
  344         (c)The president shall administer the programs of the
  345  corporation and perform such duties as delegated by the board.
  346         (d)The president shall provide support staff to the board
  347  as requested.
  348         (e)The president shall submit an annual budget to be
  349  approved by the board.
  350         (7)PUBLIC NOTICE OF FINANCING.—The corporation shall
  351  notify the department upon final execution of each contract or
  352  agreement by which the corporation provides financing to a
  353  production. The corporation shall also publish and maintain a
  354  copy of the notice on the corporation’s website while the
  355  financing remains outstanding. To provide adequate notice to the
  356  businesses and workforce that supply feature film and television
  357  production in this state, the notice must include, but need not
  358  be limited to, a brief description of the production, the name
  359  of the production company, and, to the extent available, the
  360  names of the director, cinematographer, production designer,
  361  costume designer, and transportation coordinator.
  362         Section 2. This act shall take effect July 1, 2018.