Florida Senate - 2018                             CS for SB 1606
       By the Committee on Commerce and Tourism; and Senators Taddeo
       and Gibson
       577-03432-18                                          20181606c1
    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 and
    8         imposing limitations on the corporation; requiring the
    9         board of directors to adopt specified criteria for
   10         evaluating applications for financing; requiring
   11         productions to use a bonded third-party collection
   12         account management firm; requiring that certain
   13         presales or sales estimates meet a specified minimum
   14         value; requiring productions to carry an insurance
   15         package meeting certain standards; requiring
   16         productions to provide certain proof of funds within a
   17         specified period; requiring that the lead producer or
   18         production company have a specified sales record or
   19         provide a completion bond; requiring that certain
   20         items be evaluated and approved by a production expert
   21         selected by the board; requiring that the production
   22         budget include a certain amount of contingency funds;
   23         providing for the release of corporation funds
   24         according to a specified schedule; requiring the board
   25         to approve the expenditure of certain contingency
   26         funds; requiring the board to release corporation
   27         funds to a production in a specified manner; requiring
   28         the production company to allow the board to inspect
   29         and audit 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 board, terms for the board, and
   35         guidelines for the board; prohibiting board members
   36         from discussing certain pending applications with
   37         applicants outside of a board meeting for a specified
   38         period; requiring board members to serve without
   39         compensation; authorizing the board members to be
   40         reimbursed for certain expenses; requiring the board
   41         to adopt bylaws, rules, and policies before the
   42         expenditure of funds; requiring the board to hold
   43         regularly scheduled meetings; requiring the board to
   44         create the Florida Motion Picture Capital Account and
   45         maintain exclusive control of the account; authorizing
   46         the board to deposit funds with certain institutions
   47         and to invest certain funds in permissible securities;
   48         requiring that certain dividend payments be
   49         redeposited in the account for a specified purpose;
   50         requiring that the corporation’s operating expenses be
   51         kept to a minimum and funded by appropriations and
   52         certain net returns; requiring that a claim against
   53         the account be solely paid from the account; requiring
   54         the board to appoint a president who meets specified
   55         criteria; limiting the salary and benefits of the
   56         president; providing the powers and duties of the
   57         president; requiring the corporation to provide
   58         certain notice of financing contracts or agreements to
   59         the Department of Economic Opportunity and on the
   60         corporation’s website for a specified period of time;
   61         requiring that the notice include specified
   62         information; requiring the corporation to submit a
   63         supplemental report to the department which contains
   64         certain information; requiring the Auditor General to
   65         conduct an annual financial audit of the corporation
   66         and the account; amending s. 20.60, F.S.; conforming a
   67         provision to changes made by the act; providing an
   68         effective date.
   70  Be It Enacted by the Legislature of the State of Florida:
   72         Section 1. Section 288.1259, Florida Statutes, is created
   73  to read:
   74         288.1259Florida Motion Picture Capital Corporation.—
   75         (1)DEFINITIONS.—As used in this section, the term:
   76         (a)“Account” means the Florida Motion Picture Capital
   77  Account.
   78         (b)“Board” means the corporation’s board of directors.
   79         (c)“Corporation” means the Florida Motion Picture Capital
   80  Corporation.
   81         (d)“High-wage jobs” are jobs that pay at least 120 percent
   82  of the median wage for the arts, design, entertainment, sports,
   83  and media occupations category as determined by the most recent
   84  State Occupational Employment and Wage Estimates for this state
   85  published by the United States Department of Labor’s Bureau of
   86  Labor Statistics.
   87         (e)“In-state expenditures” means the costs of tangible
   88  property used in this state and services performed by residents
   89  of this state for a scripted production, including preproduction
   90  and postproduction, but excluding costs for development,
   91  marketing, and distribution.
   92         (f)“President” means the chief executive officer of the
   93  corporation.
   94         (g)“Scripted production” or “production” means a feature
   95  film at least 70 minutes in length, whether produced for
   96  theatrical, television, or direct-to-video release; a television
   97  series created to run multiple seasons having an order for
   98  distribution of at least five episodes; or a miniseries, which
   99  is produced predominately from a written screenplay or teleplay.
  100  The term does not include a commercial, an infomercial, or a
  101  political advertisement; a reality show; a game show; an awards
  102  show; a music video; an industrial or educational film; a
  103  weather or market program; a sporting event or sporting event
  104  broadcast; a gala; a production that solicits funds; a home
  105  shopping program; a political program; a documentary; a
  106  gambling-related production; a concert production; a local,
  107  regional, or Internet-distributed-only news show or current
  108  events show; a sports news or sports recap show; a video game; a
  109  pornographic production; or any production deemed obscene under
  110  chapter 847.
  111         (h)“Television” includes broadcast, cable, and Internet
  112  television.
  113         (2)CORPORATION.—The Florida Motion Picture Capital
  114  Corporation is created as a nonprofit corporation, to be
  115  incorporated under chapter 617 and approved by the Department of
  116  State. The corporation shall be organized on a nonstock basis.
  117  The purpose of the corporation is to encourage the use of this
  118  state as a site for scripted productions by providing financing
  119  to such productions. The corporation is subject to the
  120  provisions of chapter 119 relating to public records and the
  121  provisions of chapter 286 relating to public meetings and
  122  records.
  123         (3)POWERS AND LIMITATIONS.—
  124         (a)The corporation is authorized to provide financing to
  125  scripted productions in this state pursuant to the criteria,
  126  bylaws, rules, and policies adopted by the board, which must
  127  include the following:
  128         1.The corporation shall provide financing to productions
  129  that it estimates will generate the greatest economic impact to
  130  this state.
  131         2.The amount of financing provided to a production must
  132  not exceed the amount of the production’s in-state expenditures
  133  for that production.
  134         3.The financing provided to a production must rank and
  135  remain pari passu with the highest class of ownership in the
  136  production, such that, in the event of liquidation or
  137  bankruptcy, the corporation’s investment shares the highest
  138  priority with other preferred shareholders.
  139         4.Any financing provided under this section must be less
  140  than one-half of the cost of the production’s total shares or
  141  other ownership interest.
  142         5.The amount of financing provided to any one production
  143  must not exceed 12.5 percent of the sum of the remaining amount
  144  of uncommitted funds in the account plus the amounts of all
  145  outstanding investments in other productions.
  146         6.The corporation may not have any voting rights, creative
  147  control, or management authority over a production receiving
  148  financing under this section.
  149         7.The corporation shall limit the return on its
  150  investments by establishing variable limits on returns that
  151  account for time value and reduce returns in exchange for a
  152  production’s early buyout of financing positions. For a
  153  production exercising an early buyout, the corporation shall
  154  limit its return on investment to the minimum that is
  155  actuarially measurable and credible and sufficiently related to
  156  actual and expected losses to ensure the corporation’s self
  157  sufficiency and preservation of the state appropriations
  158  provided for the investment.
  159         8.The corporation shall establish an application process
  160  and conduct at least two application periods per fiscal year,
  161  providing no more than 40 percent of the total funds in the
  162  account for the fiscal year to productions in any one
  163  application period.
  164         (b)The board shall adopt objective criteria for evaluating
  165  applications for financing scripted productions in this state.
  166         1.The criteria must require:
  167         a.The production to use a bonded third-party collection
  168  account management firm to ensure that the corporation receives
  169  all funds due from sales proceeds in accordance with a waterfall
  170  agreement included in the corporation’s investment terms.
  171         b.Presales or sales estimates from a sales agency that has
  172  sold at least $50 million in feature films which are based on
  173  the cast and script of the production and which reflect a value
  174  of at least 1.5 times the exposure of the corporation.
  175         c.The production to carry an insurance package from an
  176  insurance company rated “A” or higher by A.M. Best Company which
  177  must include general liability insurance, workers’ compensation,
  178  and key cast and director insurance that covers the costs of
  179  disruption or replacement downtime in the event of illness or
  180  other loss of services from such individuals. If at least 75
  181  percent of the production’s filming schedule occurs after June 1
  182  and before November 30, the production’s insurance package must
  183  include hurricane coverage.
  184         d.The production to provide proof of funds for the
  185  remaining budget within 60 days after application approval and
  186  place the remaining budget in escrow before the release of
  187  corporation funds.
  188         e.That the lead producer or production company has
  189  completed, sold, and delivered at least five feature films, or
  190  the production must provide a completion bond.
  191         f.That the production’s budget, script, and filming
  192  schedule have been evaluated and approved by a production expert
  193  selected by the board.
  194         g.The production budget to include contingency funds in an
  195  amount equal to at least 5 percent of the total budget. Up to 40
  196  percent of the contingency funds may be expended during
  197  production without the approval of the board. The remaining
  198  contingency funds may only be expended with prior approval of
  199  the board.
  200         h.The board to release corporation funds to a production
  201  in the following manner:
  202         (I)Fifty percent of corporation funds shall be released on
  203  the first day of principal photography.
  204         (II)Twenty-five percent of corporation funds shall be
  205  released upon completion of principal photography.
  206         (III)Twenty-five percent of corporation funds shall be
  207  released after final picture lock, as that term is generally
  208  understood in the production industry.
  209         i.The production company to provide the board with the
  210  right to inspect and audit the weekly cost reports and general
  211  ledger of the production throughout preproduction, production,
  212  and postproduction.
  213         2.Preference shall be given to:
  214         a.Productions that will generate the greatest comparative
  215  economic impact for this state. The corporation shall make a
  216  determination of each project’s comparative economic impact to
  217  this state by comparing the project budgets submitted during the
  218  application period and determining which projects create the
  219  greatest number of high-wage jobs for state residents and
  220  propose the most significant in-state expenditures as a
  221  percentage of total production expenditures.
  222         b.Productions in which the proposed financing by the
  223  corporation is lowest as a percentage of the production’s total
  224  shares or other ownership interest.
  225         c.Productions with the quickest deployment, in which the
  226  production’s in-state expenditures will begin soonest after the
  227  corporation commits to financing.
  228         d.Productions by companies with a verifiable track record
  229  in producing successful productions.
  230         e.Productions by production companies based in this state
  231  or by producers, writers, or directors who are residents of this
  232  state.
  233         f.Productions expected to significantly increase tourism
  234  to the state by using a screenplay or teleplay based on a
  235  Florida story or including recognizable locations in this state.
  236         g.Productions whose development demonstrates the
  237  likelihood of success, including, but not limited to, having a
  238  recognized director, actor, or other creative talent attached to
  239  the production.
  240         h.Productions in which the corporation’s financing is
  241  matched from local sources, including, but not limited to,
  242  county or municipal agencies, local film commissions, or other
  243  community resources.
  244         (c)The corporation may charge fees, including, but not
  245  limited to, application fees from productions seeking financing
  246  under this section, but such fees may not exceed the reasonable
  247  estimated cost of the activity for which the fee is charged,
  248  such as the cost of processing an application.
  250         (a)1.The board shall consist of seven members who are
  251  permanent residents of this state. Minority and gender
  252  representation must be considered when making appointments to
  253  the board. The board shall be composed of the following:
  254         a.Two members who have experience in investment banking
  255  and funds management focused on feature film and television
  256  production.
  257         b.Three members who have recent experience and are
  258  recognized leaders in the production of feature films or
  259  television in this state. Such members may include, but are not
  260  limited to, producers, directors, production managers or
  261  supervisors, or similar persons in positions of production
  262  leadership.
  263         c.One member who represents businesses that provide
  264  supplies for feature film and television production in this
  265  state, such as small businesses through which productions buy or
  266  rent equipment, house and feed cast and crew, purchase supplies
  267  and raw materials, or build production infrastructure.
  268         d.One member who represents this state’s feature film and
  269  television workforce.
  270         2.The initial board shall be appointed as follows:
  271         a.The Florida Venture Forum and the Florida Chamber of
  272  Commerce shall each appoint one member pursuant to sub
  273  subparagraph 1.a.
  274         b.The Governor, the President of the Senate, and the
  275  Speaker of the House of Representatives shall each appoint one
  276  member pursuant to sub-subparagraph 1.b.
  277         c.The department shall appoint one member pursuant to sub
  278  subparagraph 1.c.
  279         d.The Congress of Motion Picture Associations of Florida
  280  shall appoint one member pursuant to sub-subparagraph 1.d.
  282  To establish staggered terms, the initial members appointed by
  283  the Florida Chamber of Commerce and the Congress of Motion
  284  Picture Associations of Florida shall be appointed to 1-year
  285  terms; the initial members appointed by the President of the
  286  Senate and the Speaker of the House of Representatives shall be
  287  appointed to 2-year terms; and the initial members appointed by
  288  the Governor, the department, and the Florida Venture Forum
  289  shall be appointed to 3-year terms.
  290         3.Board members shall serve for a term of 3 years and are
  291  eligible for reappointment. Vacancies shall be filled by
  292  appointment in the same manner as the member whose position is
  293  being filled. Vacancies shall be filled within 30 days after the
  294  date of the vacancy. A vacancy that occurs before the scheduled
  295  expiration of the term of a member shall be filled for the
  296  remainder of the unexpired term.
  297         (b)Board members are subject to the Code of Ethics for
  298  Public Officers and Employees as set forth in part III of
  299  chapter 112. A board member must abstain from voting and comply
  300  with the disclosure requirements of s. 112.3143 if there appears
  301  to be a possible conflict under s. 112.311, s. 112.313, or s.
  302  112.3143. This paragraph does not prohibit any principal by whom
  303  a board member is retained, as defined in s. 112.3143(1)(a),
  304  from applying for or receiving financing under this section.
  305         (c)A board member must, with respect to an application for
  306  financing which is currently pending before the corporation or
  307  which the board member knows or reasonably expects will be
  308  submitted to the corporation within 180 days, refrain from
  309  commenting on or discussing the application outside of a board
  310  meeting with the applicant or any person retained by the
  311  applicant.
  312         (d)Board members shall serve without compensation but may
  313  be reimbursed in accordance with s. 112.061 for all necessary
  314  expenses in the performance of their duties, including attending
  315  board meetings and conducting board business.
  316         (e)The board shall:
  317         1.Before the expenditure of funds from the account, adopt
  318  bylaws, rules, and policies that are necessary to carry out the
  319  corporation’s responsibilities under this section.
  320         2.Hold regularly scheduled meetings, at least once per
  321  application period, in order to carry out the objectives and
  322  responsibilities of the board.
  323         (5)ACCOUNT.—
  324         (a)The board shall create the account for the purpose of
  325  receiving state, federal, county, municipal, and private
  326  financial resources, and the returns from productions financed
  327  by allocations from those resources, and for the purposes of
  328  this section. The account shall be under the exclusive control
  329  of the board.
  330         (b)Appropriations provided to the corporation for
  331  financing productions shall be deposited into the account.
  332         (c)The board may deposit the funds of the account with
  333  state or federally chartered financial institutions in this
  334  state and may invest any funds not allocated to a production
  335  during a fiscal year in permissible securities as described in
  336  s. 560.210(1).
  337         (d)Dividend payments received from the investments made by
  338  the corporation shall be redeposited into the account to be used
  339  for the purposes of this section.
  340         (e)The corporation shall keep its operating expenses to
  341  the minimum amount necessary. Such operating expenses shall be
  342  funded by appropriations provided for that purpose and from net
  343  returns from financing provided under this section.
  344         (f)Any claims against the account shall be paid solely
  345  from the account. Under no circumstances shall the credit of the
  346  state be pledged other than funds appropriated by law to the
  347  account, nor shall the state be liable or obligated in any way
  348  for claims on the account or against the corporation.
  350         (a)The board shall appoint a president. The president must
  351  be knowledgeable about private and public financing of feature
  352  film and television projects.
  353         (b)The president shall serve at the pleasure of the board
  354  and shall receive a salary and benefits as fixed by the board.
  355  The president’s salary and benefits may not exceed the salary
  356  and benefits authorized to be paid to the Governor.
  357         (c)The president shall administer the programs of the
  358  corporation and perform such duties as delegated by the board.
  359         (d)The president shall provide support staff to the board
  360  as requested.
  361         (e)The president shall submit an annual budget to be
  362  approved by the board.
  364         (a) The corporation shall notify the department upon final
  365  execution of each contract or agreement by which the corporation
  366  provides financing to a production. The corporation shall also
  367  publish and maintain a copy of the notice on the corporation’s
  368  website while the financing remains outstanding. To provide
  369  adequate notice to the businesses and workforce that supply
  370  feature film and television production in this state, the notice
  371  must include, but need not be limited to, a brief description of
  372  the production, the name of the production company, and, to the
  373  extent available, the names of the director, cinematographer,
  374  production designer, costume designer, and transportation
  375  coordinator.
  376         (b) The corporation shall submit a report to the department
  377  on all corporation activities for the previous fiscal year as a
  378  supplement to the department’s annual report required under s.
  379  20.60. This supplemental report must include:
  380         1. A status report on all projects currently being financed
  381  through the corporation, the number of projects financed
  382  pursuant to this section, the dollar amount of financing
  383  provided to such projects, and the names of the recipients; and
  384         2. Information as to the economic impact of the projects
  385  financed by the corporation.
  386         (c) The Auditor General shall annually conduct a financial
  387  audit, as defined in s. 11.45, of the corporation and the
  388  account.
  389         Section 2. Paragraph (b) of subsection (10) of section
  390  20.60, Florida Statutes, is amended to read
  391         20.60 Department of Economic Opportunity; creation; powers
  392  and duties.—
  393         (10) The department, with assistance from Enterprise
  394  Florida, Inc., shall, by November 1 of each year, submit an
  395  annual report to the Governor, the President of the Senate, and
  396  the Speaker of the House of Representatives on the condition of
  397  the business climate and economic development in the state.
  398         (b) The report must incorporate annual reports of other
  399  programs, including:
  400         1. Information provided by the Department of Revenue under
  401  s. 290.014.
  402         2. Information provided by enterprise zone development
  403  agencies under s. 290.0056 and an analysis of the activities and
  404  accomplishments of each enterprise zone.
  405         3. The Economic Gardening Business Loan Pilot Program
  406  established under s. 288.1081 and the Economic Gardening
  407  Technical Assistance Pilot Program established under s.
  408  288.1082.
  409         4. A detailed report of the performance of the Black
  410  Business Loan Program and a cumulative summary of quarterly
  411  report data required under s. 288.714.
  412         5. The Rural Economic Development Initiative established
  413  under s. 288.0656.
  414         6. The Florida Unique Abilities Partner Program.
  415         7.The Florida Motion Picture Capital Corporation
  416  established under s. 288.1259.
  417         Section 3. This act shall take effect July 1, 2018.