Post-Meeting Packet — Senate Commerce and Tourism Committee (January 14, 2020)
Summary
Post-meeting packet for the 2020 Regular Session Commerce and Tourism meeting of 01/14/2020, 2:30 PM to 4:30 PM. The agenda lists SB 838 by Simmons (Business Organizations), SB 848 by Montford (Rural Communities), SB 886 by Powell (Errors in Deeds) and SB 1192 by Gruters (Tax on Aviation Fuel). The bill analysis says CS/SB 838 amends the Florida Business Corporation Act to make clarifying and conforming changes, to allow persons other than board directors to serve on not-for-profit corporations' board committees, and to re-instate the Florida Department of State's ability to direct interrogatories. The Senate Commerce Committee log records SB 848 passed favorable, SB 838 passed CS, SB 886 pass favorably and SB 1192 passes favorably.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Cite this document
“Post-Meeting Packet — Senate Commerce and Tourism Committee (January 14, 2020).”
Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2020-01-14-post-meeting-packet-5327-c806e18001/
, SHA-256 4ddd8de497e08ea2c333aa9e6ab8599f658b5ca9efbab891a892ec384a529444.Full text
01/14/2020 - Commerce Tourism (2:30 PM - 4:30 PM) 2020 Regular Session
Customized 01/15/2020 9:34 AM
Agenda Order
Tab 1 SB 838 by Simmons; (Similar to CS/H 00495) Business Organizations
761118 A S RCS CM, Simmons Delete L.242 - 321. 01/15 09:31 AM
281600 A S RCS CM, Simmons btw L.648 - 649: 01/15 09:31 AM
621802 A S RCS CM, Simmons Delete L.1900 - 2004: 01/15 09:31 AM
506566 A S RCS CM, Simmons btw L.2086 - 2087: 01/15 09:31 AM
Tab 2 SB 848 by Montford (CO-INTRODUCERS) Perry, Baxley; (Similar to H 00891) Rural Communities
Tab 3 SB 886 by Powell; (Similar to H 00567) Errors in Deeds
Tab 4 SB 1192 by Gruters; (Compare to H 06061) Tax on Aviation Fuel
Page 1 of 1
The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Commerce and Tourism
BILL: CS/SB 838
INTRODUCER: Commerce and Tourism Committee and Senator Simmons
SUBJECT: Business Organizations
DATE: January 15, 2020 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Harmsen McKay CM Fav/CS
2. JU
3. RC
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/SB 838 amends several sections of the Florida Business Corporation Act, ch. 607, F.S., and
its related statutes to:
Make clarifying and conforming changes to, and fix minor errors in, the 2019 Florida
Business Corporation Act legislation;1
Modify the laws that govern the makeup of not-for-profit corporations’ board committees to
allow persons other than board directors to serve on those committees; and
Re-instate the Florida Department of State’s ability to direct interrogatories to a corporation
to determine the corporation’s compliance with ch. 607, F.S.
II. Present Situation:
In 2019, the Legislature substantially amended ch. 607, F.S., the Florida Business Corporation
Act (FBCA),2 to better reflect recent changes to the Model Business Corporation Act3 and ch.
605, F.S., the Florida Revised Limited Liability Corporate Act (FRLLCA). These changes were
made with the input of the Florida Bar’s Business Law Section (Business Law Section). Since
1
Chapter 2019-90, L.O.F. CS/CS/HB 1009 was signed into law on June 7, 2019, and took effect on January 1, 2020.
2
Id.
3
American Bar Association, Model Business Corporation Act (2016),
https://www.americanbar.org/content/dam/aba/administrative/business_law/corplaws/2016_mbca.authcheckdam.pdf (last
visited Jan. 14, 2020).
BILL: CS/SB 838 Page 2
final passage of the 2019 legislation, the Business Law Section has identified errors and
inconsistencies to the 2019 legislation. This bill, in part, attempts to resolve the issues identified.
Further discussion of the present situation is discussed below in conjunction with the Effect of
Proposed Changes.
III. Effect of Proposed Changes:
Interrogatories issued by the Department of State
The 2019 FBCA revision inadvertently deleted language from s. 607.0130, F.S., that permitted
the Department of State (Department) to direct interrogatories4 to a corporation that was
regulated under the FBCA, or to any of its officers or directors.5 The Department used these
interrogatories to determine a corporation’s compliance with the FBCA and could institute civil
proceedings against a corporation found to be in violation.6
Section 67 creates s. 607.1703, F.S., to restore the Department’s authority to issue
interrogatories to corporations that operate pursuant to the FBCA, and to their officers or
directors. Like the deleted FBCA provision, the bill:
Gives the corporation 30 days to respond, or longer if the Department permits;
Requires that interrogatories directed to an individual be answered by that individual;
Provides timeframes for filing a court record relating to the interrogatories; and
Grants powers and duties to the Department to administer the FBCA, including authority to:
o Institute a civil action in a circuit court to collect a penalty, fee, or tax that is owed to the
state by the corporation, and to compel any legally required finding, qualification, or
registration;
o File a lis pendens7 against any property owned by the corporation;
o Refer its findings to the Department of Legal Affairs for the purpose of initiating further
action; and
o Adopt rules necessary to carry out the FBCA.
The bill slightly modifies the FBCA’s prior language to specify that the Department may serve
interrogatories on a domestic or foreign corporation, and to change references from a
corporation’s “president, vice president, secretary, or assistant secretary” to a corporation’s
“officer or director” [or] “shareholder… or fiduciary,” when specified.
4
“Interrogatories” are a list of questions posed by one party to its opposing party in a civil action as part of the discovery
process. The recipient must answer the questions under oath. Interrogatory Legal Information Institute, available at
https://www.law.cornell.edu/wex/interrogatory (last visited Jan. 14, 2020).
5
See Ch. 2019-90, Laws of Fla.; see also The Florida Bar Business Law Section, Proposed Modifications to Chapter 607
(Jan. 24, 2019)(on file with the Senate Committee on Commerce and Tourism).
6
Section 607.0130 (2007).
7
A “lis pendens,” is filed with the clerk of the court to provide written notice that a lawsuit has been filed that involves either
title to or a claimed ownership interest in real property. See Legal Information Institute, Lis Pendens,
https://www.law.cornell.edu/wex/lis_pendens (last visited Jan. 14, 2020).
BILL: CS/SB 838 Page 3
Not-for-Profit Corporation Board Committees
A not-for-profit corporation’s board of directors is vested with the corporation’s powers8 and
must fulfill the corporation’s obligations to its members, beneficiaries, donors, and community.9
The board of directors may also appoint board directors to serve as members of a corporate
committee, which acts with the board’s full authority, except that the committee cannot: 10
Approve or recommend for approval actions or proposals that members must approve;
Fill board or board committee vacancies; or
Adopt, amend, or repeal the bylaws.
Florida law does not allow a not-for-profit corporation’s board to appoint non-directors to its
board committees. Despite a lack of authority, it is believed that many not-for-profit corporations
include non-director members on the board committees.11
The Model Not-For-Profit Corporation Act permits a not-for-profit corporation’s board to create
an advisory committee made up of non-director appointees. The Model Not-For-Profit
Corporation Act also dictates that an advisory committee may not have board authority, and may
only make recommendations to the board or the not-for-profit corporation’s officers or
members.12
Section 77 authorizes a not-for-profit corporation’s board of directors to create board committees
and appoint as members thereto any person, whether or not they serve as a director for the not-
for-profit corporation’s board, subject to the following requirements:
If an executive committee is created by a resolution of the board of directors, the board may
appoint non-board members, but the majority of the executive committee’s membership must
consist of board directors; and
If the committee is created by the board or is otherwise authorized by the articles of
incorporation or bylaws, and its scope of authority relates to director elections, nominations,
or credentials, or is otherwise involved in the director election process, the committee’s
membership may be made up of entirely non-board members; and
If an advisory committee is created by the corporation, its membership may consist of any
number of non-directors, but the advisory committee may not act on behalf of the board,
exercise any board power or authority, or bind the not-for-profit corporation to any action.
The advisory committee may make recommendations to the board or corporate officers or
members, however.
8
See s. 617.01401(2), F.S. (defining a “board of directors” as the “group of persons vested with the management of the
affairs of the corporation…”, and s. 607.0302, F.S., which outlines corporate duties as the powers to: sue and be sued;
purchase, lease or acquire, and own, hold, improve, use and deal with, real or personal property; sell, convey, mortgage, or
otherwise dispose of all or part of its property; lend or borrow money; and make contracts and incur liabilities.
9
Jeffrey A. Baskies and Cara Freedman, To Protect and to Serve: The Duties and Responsibilities of Directors of Florida
Not-For-Profit Corporations, Florida Bar Journal Vol. 89, No. 9 (Nov. 2015), available at https://www.floridabar.org/the-
florida-bar-journal/to-protect-and-to-serve-the-duties-and-responsibilities-of-directors-of-florida-not-for-profit-corporations/
(last visited Jan. 14, 2020).
10
Section 617.0825(1) and (3), F.S.
11
The Florida Bar Business Law Section, White Paper for S.B. [838] & H.B. [495], (Oct. 21, 2019)(on file with the Senate
Committee on Commerce and Tourism).
12
American Bar Association Committee on Nonprofit Organizations, Model Nonprofit Corporation Act §8.25 (3d ed. 2008).
BILL: CS/SB 838 Page 4
Additionally, the bill defines a non-director committee member’s responsibility, fiduciary duty,13
and liability protections14 as equal to those provided to a director committee member.
This section does not apply to a condominium, cooperative, or homeowners’ association board’s
fining or architectural review committees acting pursuant to ss. 718.303(3), 719.303(3), and
720.303(2) or 720.3035(1), respectively.
Conforming Changes
The bill amends ss. 607.0120, 607.0125, 607.0141, 607.0620, 607.0720, 607.1002, 607.11921,
607.1202, 607.1302, 607.1333, 607.1422, 607.1431, 607.14401, 607.1502, 607.1504, 607.15091,
607.1602, and 605.0116 to provide for consistent terminology throughout ch. 607, F.S., by
amending the following terms from:
o “act” to “chapter;”
o “action” to “proceeding;”
o “representative” to “authorized representative;”
o “corporation” to “domestic corporation or foreign corporation;”
o “his or her” to “his, her, or its;”
o “business entity” to “eligible entity;”15
o “successor” to “successor or assignee;”
o “rights of action” to “proceedings and actions;” and
o “do business” to “transact business.”
The bill also amends ss. 607.1103, 607.1106, 607.11920, 607.11921, 607.11923, 607.11924,
607.11935, 607.1432, 607.1520, and 607.504 to:
Add references to obligations, other securities, eligible interests, and rights to acquire any
combination of shares, securities, cash, or property in connection with organic transactions;
Ensure consistent use of the term “separate voting group;”
Change “the receiver” to “any receiver” to reflect that a court may appoint and order
compensation for one or more receivers;
Tailor a reference regarding the process for the withdrawal and cancellation of certificate of
authority for a foreign corporation to refer to a foreign corporation, rather than to “it;” and
Clarify that an entity may elect to become a social purpose corporation by domestication.
Clarifying Changes
The bill makes clarifying changes to ss. 607.0601, 607.0602, 607.0705, 607.0808, 607.0850,
607.0901, 607.1102, 607.1103, 607.11921, 607.11932, 607.1501, 607.1509, and 607.1602. The
changes include:
13
A director must discharge his or her duties to the corporation in good faith, with the care of an ordinarily prudent person in
a similar position, and in a manner he or she reasonably believes to be in the not-for-profit corporation’s best interest. See s.
617.0830(1)(a)-(c), F.S.
14
A director is not liable for monetary damages for any statement, vote, decision to act or not act, or failure to act, unless the
director breached his or her duties. See ss. 607.0831 and 617.0830, F.S.
15
An “eligible entity” is a domestic corporation, foreign corporation, nonprofit corporation, general partnership, limited
partnership, limited liability company, real estate investment trust, or any other foreign or domestic entity that is organized
under an organic law. Section 607.01401(28)(a), F.S.
BILL: CS/SB 838 Page 5
Specifying that a series of shares that has voting rights is authorized to receive the
corporation’s net assets upon its dissolution;
Replacing language to clarify that a series of shares may exist only within one class of shares
rather than in one or more classes;
Changing the term “checks in payment” to “payment” to permit forms of payment to
shareholders other than by check;
Permitting a corporate board to meet on the issue of removal of a board director and any
additional purpose, if all of the purposes are stated on a properly distributed meeting notice;
Expanding the definition of “expenses” to include reasonable attorney fees and expenses;
Replacing, in the context of affiliated transactions governed by s. 607.0901, F.S., the term
“shares” with “interests” to accommodate those entities that do not have shares;
Clarifying that a domestic corporation may acquire all of, or one or more classes or series of,
both another corporation’s shares and its rights to acquire shares;
Ensuring that laws that govern organic transactions contemplate the transaction of all of the
following: obligations, other securities, eligible interests, and rights to acquire any
combination of shares, securities, cash, or property;
Specifying that s. 607.1103(6)(a), F.S., details the voting procedures on a plan of merger
only;
Permitting a corporation’s articles of incorporation to limit or eliminate specific voting
rights, or any combination thereof, as applies to a plan of merger or plan for share exchange;
Clarifying that ch. 607, F.S., in addition to a foreign corporation’s articles of incorporation or
board action, may require a vote greater than a quorum to approve the foreign corporation’s
plan of domestication or plan of conversion;
Clarifying that a foreign corporation that maintains an account (not just a bank account) in a
financial institution is not transacting business, and is therefore not subject to the
Department’s regulatory authority in virtue thereof;
Replacing an incorrect word to clarify that a statement of change or similar document is
effective when it has been filed with the department, not by it; and
Specifying that a shareholder may only inspect the records of actions taken without a meeting
by a board committee of the corporation.
Cross-Reference Corrections
The bill corrects missing or incorrect cross references in ss. 607.1406, 607.1422, 607.1430,
607.1504, 607.1604, and 607.1622, F.S.
The bill also modifies the sections, subsections, or paragraphs to which provisions apply in ss.
607.0721 and 607.605.0702, F.S.
Grammar, Punctuation, and Duplicative Language Corrections
The bill corrects non-substantive grammar and punctuation errors in ss. 607.0127, 607.01401,
607.0501, 607.0623, 607.0630, 607.0704, 607.0732, 607.0750, 607.0832, 607.0855, 607.0858,
607.1003, 607.11 03, 607.11035, 607.11045, 607.11932, 607.11935, 607.1303, 607.1320,
607.1340, 607.1403, 607.1430, 607.1503, 607.1505, 607.1507, 607.15101, 605.0702, 605.0716,
and 617.0501.
BILL: CS/SB 838 Page 6
The bill also deletes unnecessary and duplicative language in ss. 605.1104, 607.0630, 607.0707,
and 607.1301.
Effective Date
Section 78 provides that the act takes effect upon becoming law.
BILL: CS/SB 838 Page 7
Bill Section Directory
Section 1 Section 607.0120, F.S. Section 44 Section 607.1320, F.S.
Section 2 Section 607.0123, F.S. Section 45 Section 607.1333, F.S.
Section 3 Section 607.0125, F.S. Section 46 Section 607.1340, F.S.
Section 4 Section 607.0127, F.S. Section 47 Section 607.1403, F.S.
Section 5 Section 607.01401, F.S. Section 48 Section 607.1406, F.S.
Section 6 Section 607.0141, F.S. Section 49 Section 607.1422, F.S.
Section 7 Section 607.0501, F.S. Section 50 Section 607.1430, F.S.
Section 8 Section 607.0601, F.S. Section 51 Section 607.1431, F.S.
Section 9 Section 607.0602, F.S. Section 52 Section 607.1432, F.S.
Section 10 Section 607.0620, F.S. Section 53 Section 607.14401, F.S.
Section 11 Section 607.0623, F.S. Section 54 Section 607.1501, F.S.
Section 12 Section 607.0630, F.S. Section 55 Section 607.1502, F.S.
Section 13 Section 607.0704, F.S. Section 56 Section 607.1503, F.S.
Section 14 Section 607.0705, F.S. Section 57 Section 607.1504, F.S.
Section 15 Section 607.0707, F.S. Section 58 Section 607.1505, F.S.
Section 16 Section 607.0720, F.S. Section 59 Section 607.1507, F.S.
Section 17 Section 607.0721, F.S. Section 60 Section 607.1509, F.S.
Section 18 Section 607.0732, F.S. Section 61 Section 607.15091, F.S.
Section 19 Section 607.0750, F.S. Section 62 Section 607.15101, F.S.
Section 20 Section 607.0808, F.S. Section 63 Section 607.1520, F.S.
Section 21 Section 607.0832, F.S. Section 64 Section 607.1602, F.S.
Section 22 Section 607.0850, F.S. Section 65 Section 607.1504, F.S.
Section 23 Section 607.0855, F.S. Section 66 Section 607.1622, F.S.
Section 24 Section 607.0858, F.S. Section 67 Section 607.1703, F.S.
Section 25 Section 607.0901, F.S. Section 68 Section 607.1907, F.S.
Section 26 Section 607.1002, F.S. Section 69 Section 607.504, F.S.
Section 27 Section 607.1003, F.S. Section 70 Section 605.0116, F.S.
Section 28 Section 607.1102, F.S. Section 71 Section 605.0207, F.S.
Section 29 Section 607.1103, F.S. Section 72 Section 605.0215, F.S.
Section 30 Section 607.11035, F.S. Section 73 Section 605.0702, F.S.
Section 31 Section 607.11045, F.S. Section 74 Section 605.0716, F.S.
Section 32 Section 607.1106, F.S. Section 75 Section 605.1104, F.S.
Section 33 Section 607.11920, F.S. Section 76 Section 617.0501, F.S.
Section 34 Section 607.11921, F.S. Section 77 Section 617.0825, F.S.
Section 35 Section 607.11923, F.S. Section 78 Effective Date
Section 36 Section 607.11924, F.S.
Section 37 Section 607.11932, F.S.
Section 38 Section 607.11933, F.S.
Section 39 Section 607.11935, F.S.
Section 40 Section 607.1202, F.S.
Section 41 Section 607.1301, F.S.
Section 42 Section 607.1302, F.S.
Section 43 Section 607.1303, F.S.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
D. State Tax or Fee Increases:
None.
E. Other Constitutional Issues:
None.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None.
B. Private Sector Impact:
None.
C. Government Sector Impact:
None.
VI. Technical Deficiencies:
None.
VII. Related Issues:
None.
VIII. Statutes Affected:
This bill creates s. 607.1703 of the Florida Statutes and substantially amends the following
sections of the Florida Statutes: 607.0120, 607.0123, 607.0125, 607.0127, 607.01401, 607.0141,
607.0501, 607.0601, 607.0602, 607.0620, 607.0623, 607.0630, 607.0704, 607.0705, 607.0707,
607.0720, 607.0721, 607.0732, 607.0750, 607.0808, 607.0832, 607.0850, 607.0855, 607.0858,
BILL: CS/SB 838 Page 10
607.0901, 607.1002, 607.1003, 607.1102, 607.1103, 607.11035, 607.11045, 607.1106,
607.11920, 607.11921, 607.11923, 607.11924, 607.11932, 607.11933, 607.11935, 607.1202,
607.1301, 607.1302, 607.1303, 607.1320, 607.1333, 607.1340, 607.1403, 607.1406, 607.1422,
607.1430, 607.1431, 607.1432, 607.14401, 607.1501, 607.1502, 607.1503, 607.1504, 607.1505,
607.1507, 607.1509, 607.15091, 607.15101, 607.1520, 607.1602, 607.1604, 607.1622, 607.1907,
607.504, 605.0116, 605.0207, 605.0215, 605.0702, 605.0716, 605.1104, 617.0501, 617.0825.
IX. Additional Information:
A. Committee Substitute – Statement of Substantial Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
CS by Commerce and Tourism on January 14, 2020:
Deletes unnecessary language that implies that a corporation could obtain a life
insurance policy for a shareholder that is not a natural person;
Clarifies that a favorable vote of a majority of all shares entitled to vote on an
amendment are required to amend a corporation’s articles of incorporation;
Provides that changes made to board committee membership requirements do not
apply to condominium, cooperative, or homeowner’s association committees that
perform specific duties; and
Deletes duplicative rulemaking authority in chs. 605 and 607, F.S.
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.
Florida Senate - 2020 COMMITTEE AMENDMENT
Bill No. SB 838
Ì761118$Î761118
LEGISLATIVE ACTION
Senate . House
Comm: RCS .
01/15/2020 .
.
.
.
The Committee on Commerce and Tourism (Simmons) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Delete lines 242 - 321.
4
5 ================= T I T L E A M E N D M E N T ================
6 And the title is amended as follows:
7 Delete line 8
8 and insert:
9 607.0125, 607.0127, 607.01401, 607.0141,
Page 1 of 1
1/13/2020 10:43:00 AM 577-02183-20
Florida Senate - 2020 COMMITTEE AMENDMENT
Bill No. SB 838
Ì281600iÎ281600
LEGISLATIVE ACTION
Senate . House
Comm: RCS .
01/15/2020 .
.
.
.
The Committee on Commerce and Tourism (Simmons) recommended the
following:
1 Senate Amendment (with directory amendment)
2
3 Between lines 648 and 649
4 insert:
5 (5) Unless this chapter, the articles of incorporation, or
6 the board of directors, acting pursuant to subsection (3),
7 requires a greater vote or a greater quorum, the approval of the
8 amendment requires the approval of the shareholders at a meeting
9 at which a quorum exists consisting of at least a majority of
10 the shares entitled to be cast on the amendment exists, and, if
Page 1 of 2
1/13/2020 10:45:07 AM 577-02184-20
Florida Senate - 2020 COMMITTEE AMENDMENT
Bill No. SB 838
Ì281600iÎ281600
11 any class or series of shares is entitled to vote as a separate
12 group on the amendment, except as provided in s. 607.1004(3),
13 the approval of each such separate voting group at a meeting at
14 which a quorum of the voting group exists consisting of at least
15 a majority of the votes entitled to be cast on the amendment by
16 that voting group.
17
18 ====== D I R E C T O R Y C L A U S E A M E N D M E N T ======
19 And the directory clause is amended as follows:
20 Delete lines 631 - 632
21 and insert:
22 Section 28. Paragraph (a) of subsection (2) and subsections
23 (4) and (5) of section 607.1003, Florida Statutes, are amended
24 to read:
Page 2 of 2
1/13/2020 10:45:07 AM 577-02184-20
Florida Senate - 2020 COMMITTEE AMENDMENT
Bill No. SB 838
Ì621802uÎ621802
LEGISLATIVE ACTION
Senate . House
Comm: RCS .
01/15/2020 .
.
.
.
The Committee on Commerce and Tourism (Simmons) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Delete lines 1900 - 2004
4 and insert:
5 Section 69. Section 607.1907, Florida Statutes, is amended
6 to read:
7 607.1907 Saving provision.—
8 (1) Except as to procedural provisions, chapter 2019-90,
9 Laws of Florida, this act does not affect a pending action or
10 proceeding or a right accrued before January 1, 2020, and a
Page 1 of 6
1/13/2020 10:48:46 AM 577-02187-20
Florida Senate - 2020 COMMITTEE AMENDMENT
Bill No. SB 838
Ì621802uÎ621802
11 pending civil action or proceeding may be completed, and a right
12 accrued may be enforced, as if chapter 2019-90, Laws of Florida,
13 this act had not become effective.
14 (2) If a penalty or punishment for violation of a statute
15 or rule is reduced by chapter 2019-90, Laws of Florida, this
16 act, the penalty or punishment, if not already imposed, shall be
17 imposed in accordance with chapter 2019-90, Laws of Florida this
18 act.
19 Section 70. Subsection (3) of section 607.504, Florida
20 Statutes, is amended to read:
21 607.504 Election of social purpose corporation status.—
22 (3) If an entity elects to become a social purpose
23 corporation by amendment of the articles of incorporation or by
24 a merger, domestication, conversion, or share exchange, the
25 shareholders of the entity are entitled to appraisal rights
26 under and pursuant to ss. 607.1301-607.1340.
27 Section 71. Subsection (1) of section 605.0116, Florida
28 Statutes, is amended to read:
29 605.0116 Change of name or address by registered agent.—
30 (1) If a registered agent changes his, or her, or its name
31 or address, the agent may deliver to the department for filing a
32 statement of change that provides the following:
33 (a) The name of the limited liability company or foreign
34 limited liability company represented by the registered agent.
35 (b) The name of the registered agent as currently shown in
36 the records of the department for the limited liability company
37 or foreign limited liability company.
38 (c) If the name of the registered agent has changed, his,
39 her, or its new name.
Page 2 of 6
1/13/2020 10:48:46 AM 577-02187-20
Florida Senate - 2020 COMMITTEE AMENDMENT
Bill No. SB 838
Ì621802uÎ621802
40 (d) If the address of the registered agent has changed, the
41 new address.
42 (e) A statement that the registered agent has given the
43 notice required under subsection (2).
44 Section 72. Subsections (2) and (7) of section 605.0207,
45 Florida Statutes, are amended to read:
46 605.0207 Effective date and time.—Except as otherwise
47 provided in s. 605.0208, and subject to s. 605.0209(3), any
48 document delivered to the department for filing under this
49 chapter may specify an effective time and a delayed effective
50 date. In the case of initial articles of organization, a prior
51 effective date may be specified in the articles of organization
52 if such date is within 5 business days before the date of
53 filing. Subject to ss. 605.0114, 605.0115, 605.0208, and
54 605.0209, a record filed by the department is effective:
55 (2) If the record filed specifies an effective time, but
56 not a prior or delayed effective date, on the date the record is
57 accepted, as evidenced by the department’s endorsement, and
58 filed at the time specified in the filing.
59 (7) If the record filed a filed document does not specify
60 the time zone or place at which the date or time, or both, is to
61 be determined, the date or time, or both, at which it becomes
62 effective shall be those prevailing at the place of filing in
63 this state.
64 Section 73. Section 605.0215, Florida Statutes, is amended
65 to read:
66 605.0215 Certificates to be received in evidence and
67 evidentiary effect of certified copy of filed document.—All
68 certificates issued by the department in accordance with this
Page 3 of 6
1/13/2020 10:48:46 AM 577-02187-20
Florida Senate - 2020 COMMITTEE AMENDMENT
Bill No. SB 838
Ì621802uÎ621802
69 chapter shall be taken and received in all courts, public
70 offices, and official bodies as prima facie evidence of the
71 facts stated. A certificate from the department delivered with a
72 copy of a document filed by the department bearing the signature
73 of the secretary of state, which may be in facsimile, and the
74 seal of this state, is conclusive evidence that the original
75 document is on file with the department.
76 Section 74. Paragraph (b) of subsection (2) of section
77 605.0702, Florida Statutes, is amended to read:
78 605.0702 Grounds for judicial dissolution.—
79 (2)
80 (b) For purposes of As used in this section, the term
81 “deadlock sale provision” means a provision in an operating
82 agreement which is or may be applicable in the event of a
83 deadlock among the managers or the members of the limited
84 liability company which the members of the company are unable to
85 break and which provides for a deadlock breaking mechanism,
86 including, but not limited to:
87 1. A redemption or a purchase and sale of interests;
88 2. A governance change, among or between members;
89 3. The sale of the company or all or substantially all of
90 the assets of the company; or
91 4. A similar provision that, if initiated and effectuated,
92 breaks the deadlock by causing the transfer of interests, a
93 governance change, or the sale of all or substantially all of
94 the company’s assets.
95 Section 75. Subsection (2) of section 605.0716, Florida
96 Statutes, is amended to read:
97 605.0716 Judicial review of denial of reinstatement.—
Page 4 of 6
1/13/2020 10:48:46 AM 577-02187-20
Florida Senate - 2020 COMMITTEE AMENDMENT
Bill No. SB 838
Ì621802uÎ621802
98 (2) Within 30 days after service of a notice of denial of
99 reinstatement, a limited liability company may appeal the denial
100 by petitioning the Circuit Court of Leon County to set aside the
101 dissolution. The petition must be served on the department and
102 must contain a copy of the department’s notice of administrative
103 dissolution, the company’s application for reinstatement, and
104 the department’s notice of denial.
105 Section 76. Subsection (4) of section 605.1104, Florida
106 Statutes, is amended to read:
107 605.1104 Interrogatories by department; other powers of
108 department.—
109 (4) The department has the power and authority reasonably
110 necessary to administer this chapter efficiently, to perform the
111 duties herein imposed upon it, and to adopt reasonable rules
112 necessary to carry out its duties and functions under this
113 chapter.
114
115 ================= T I T L E A M E N D M E N T ================
116 And the title is amended as follows:
117 Delete lines 51 - 59
118 and insert:
119 findings to the Department of Legal Affairs; amending
120 ss. 607.1907, 607.504, and 605.0116, F.S.; making
121 technical changes; amending s. 605.0207, F.S.;
122 specifying that certain documents accepted by the
123 department for filing are effective on the date the
124 records are accepted by the department; making a
125 technical change; amending ss. 605.0215, 605.0702,
126 605.0716, 605.1104, and 617.0501, F.S.; making
Page 5 of 6
1/13/2020 10:48:46 AM 577-02187-20
Florida Senate - 2020 COMMITTEE AMENDMENT
Bill No. SB 838
Ì621802uÎ621802
127 technical
Page 6 of 6
1/13/2020 10:48:46 AM 577-02187-20
Florida Senate - 2020 COMMITTEE AMENDMENT
Bill No. SB 838
Ì506566BÎ506566
LEGISLATIVE ACTION
Senate . House
Comm: RCS .
01/15/2020 .
.
.
.
The Committee on Commerce and Tourism (Simmons) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Between lines 2086 and 2087
4 insert:
5 (9) This section does not apply to a committee established
6 under chapter 718, chapter 719, or chapter 720 to perform the
7 functions set forth in s. 718.303(3), s. 719.303(3), s.
8 720.303(2), or s. 720.3035(1), respectively.
9
10 ================= T I T L E A M E N D M E N T ================
Page 1 of 2
1/13/2020 10:46:53 AM 577-02185-20
Florida Senate - 2020 COMMITTEE AMENDMENT
Bill No. SB 838
Ì506566BÎ506566
11 And the title is amended as follows:
12 Delete line 70
13 and insert:
14 authorizations for advisory committees; providing
15 applicability; providing an
Page 2 of 2
1/13/2020 10:46:53 AM 577-02185-20
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
By Senator Simmons
9-00311B-20 2020838__ 9-00311B-20 2020838__
1 A bill to be entitled 30 procedure to approve a plan of domestication; making a
2 An act relating to business organizations; amending s. 31 technical change; amending ss. 607.11923 and
3 607.0120, F.S.; making technical changes; amending s. 32 607.11924, F.S.; making technical changes; amending s.
4 607.0123, F.S.; specifying that certain documents 33 607.11932, F.S.; revising an exception for the
5 accepted by the Department of State for filing are 34 procedure to approve a plan of conversion; making a
6 effective on the date the documents are accepted by 35 technical change; amending ss. 607.11933, 607.11935,
7 the department; making technical changes; amending ss. 36 607.1202, 607.1301, 607.1302, 607.1303, 607.1320,
8 607.0125, 607.0127, 607.01401, 607.0141, 607.0302, 37 607.1333, 607.1340, 607.1403, 607.1406, 607.1422,
9 607.0501, and 607.0601, F.S.; making technical 38 607.1430, 607.1431, 607.1432, 607.14401, 607.1501,
10 changes; amending s. 607.0602, F.S.; revising the 39 607.1502, 607.1503, 607.1504, 607.1505, 607.1507,
11 authority of a board of directors to reclassify 40 607.1509, 607.15091, 607.15101, 607.1520, 607.1602,
12 certain unissued shares; amending ss. 607.0620, 41 607.1604, and 607.1622, F.S.; making technical
13 607.0623, 607.0630, 607.0704, 607.0705, 607.0707, 42 changes; creating s. 607.1703, F.S.; authorizing the
14 607.0720, 607.0721, 607.0732, and 607.0750, F.S.; 43 department to direct certain interrogatories to
15 making technical changes; amending s. 607.0808, F.S.; 44 certain corporations and to officers or directors of
16 revising the required contents of a meeting notice 45 certain corporations; providing requirements for
17 relating to the removal of a director by shareholders; 46 answering the interrogatories; providing requirements
18 amending s. 607.0832, F.S.; making a technical change; 47 for the department relating to interrogatories;
19 amending s. 607.0850, F.S.; revising the definition of 48 authorizing the department to bring certain actions;
20 the term “expenses”; amending ss. 607.0855 and 49 authorizing the department to file a lis pendens
21 607.0858, F.S.; making technical changes; amending s. 50 against certain property and to certify certain
22 607.0901, F.S.; revising definitions; amending ss. 51 findings to the Department of Legal Affairs; providing
23 607.1002 and 607.1003, F.S.; making technical changes; 52 for powers and duties of the Department of State;
24 amending s. 607.1102, F.S.; authorizing a domestic 53 amending ss. 607.1907, 607.504, and 605.0116, F.S.;
25 corporation to acquire one or more classes or series 54 making technical changes; amending s. 605.0207, F.S.;
26 of shares under certain circumstances; amending ss. 55 specifying that certain documents accepted by the
27 607.1103, 607.11035, 607.11045, 607.1106, and 56 department for filing are effective on the date the
28 607.11920, F.S.; making technical changes; amending s. 57 records are accepted by the department; making a
29 607.11921, F.S.; revising an exception for the 58 technical change; amending ss. 605.0215, 605.0702,
Page 1 of 72 Page 2 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
59 605.0716, and 617.0501, F.S.; making technical 88 under this chapter may specify an effective time and a delayed
60 changes; amending s. 617.0825, F.S.; authorizing a 89 effective date. In the case of initial articles of
61 board of directors to appoint persons to serve on 90 incorporation, a prior effective date may be specified in the
62 certain committees; requiring that a majority of the 91 articles of incorporation if such date is within 5 business days
63 persons on such committees be directors; providing 92 before the date of filing.
64 exceptions; making technical changes; providing 93 (1) Subject to s. 607.0124, a document accepted for filing
65 responsibilities and duties for non-director committee 94 is effective:
66 members; authorizing a corporation to create or 95 (a) If the record filed filing does not specify an
67 authorize the creation of advisory committees; 96 effective time and does not specify a prior or a delayed
68 specifying an advisory committee is not a committee of 97 effective date, on the date and at the time the record filing is
69 the board of directors; providing prohibitions and 98 accepted, as evidenced by the department’s endorsement of the
70 authorizations for advisory committees; providing an 99 date and time on the filing.
71 effective date. 100 (b) If the record filed filing specifies an effective time,
72 101 but not a prior or delayed effective date, on the date the
73 Be It Enacted by the Legislature of the State of Florida: 102 record filing is accepted, as evidenced by the department’s
74 103 endorsement, and filed at the time specified in the filing.
75 Section 1. Subsection (10) of section 607.0120, Florida 104 (c) If the record filed filing specifies a delayed
76 Statutes, is amended to read: 105 effective date, but not an effective time, at 12:01 a.m. on the
77 607.0120 Filing requirements.— 106 earlier of:
78 (10) When the document is delivered to the department for 107 1. The specified date; or
79 filing, the correct filing fee, and any other tax, license fee, 108 2. The 90th day after the date the record is filed of the
80 or penalty required to be paid by this chapter act or other law 109 filing.
81 shall be paid or provision for payment made in a manner 110 (d) If the record filed filing specifies a delayed
82 permitted by the department. 111 effective date and an effective time, at the specified time on
83 Section 2. Subsections (1) and (2) of section 607.0123, 112 the earlier of:
84 Florida Statutes, are amended to read: 113 1. The specified date; or
85 607.0123 Effective time and date of document.—Except as 114 2. The 90th day after the date the record is filed of the
86 otherwise provided in s. 607.0124(5), and subject to s. 115 filing.
87 607.0124(4), any document delivered to the department for filing 116 (e) If the record filed filing is of initial articles of
Page 3 of 72 Page 4 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
117 incorporation and specifies an effective date before the date of 146 evidentiary effect of certified copy of filed document.—All
118 the filing, but no effective time, at 12:01 a.m. on the later 147 certificates issued by the department pursuant to this chapter
119 of: 148 must be taken and received in all courts, public offices, and
120 1. The specified date; or 149 official bodies as prima facie evidence of the facts stated. A
121 2. The 5th business day before the date of the record is 150 certificate the department delivered with a copy of a document
122 filed filing. 151 filed by the department, bearing the signature of the secretary
123 (f) If the record filed filing is of initial articles of 152 of state, which may be in facsimile, and the seal of this the
124 incorporation and specifies an effective time and an effective 153 state, is conclusive evidence that the original document is on
125 date before the date of the filing, at the specified time on the 154 file with the department.
126 later of: 155 Section 5. Subsections (1), (2), (22), (51), (61), and (63)
127 1. The specified date; or 156 of section 607.01401, Florida Statutes, are amended to read:
128 2. The 5th business day before the date the record is filed 157 607.01401 Definitions.—As used in this chapter, unless the
129 of the filing. 158 context otherwise requires, the term:
130 (2) If the record filed a filed document does not specify 159 (1) “Acquired eligible entity” means the a domestic or
131 the time zone or place at which the date or time, or both, is to 160 foreign eligible entity that will have all of one or more
132 be determined, the date or time, or both, at which it becomes 161 classes or series of its shares or eligible interests acquired
133 effective shall be those prevailing at the place of filing in 162 in a share exchange.
134 this state. 163 (2) “Acquiring eligible entity” means the a domestic or
135 Section 3. Subsection (3) of section 607.0125, Florida 164 foreign eligible entity that will acquire all of one or more
136 Statutes, is amended to read: 165 classes or series of shares or eligible interests of the
137 607.0125 Filing duties of the department.— 166 acquired eligible entity in a share exchange.
138 (3) If the department refuses to file a document, the 167 (22) “Domesticating corporation” means the a domestic
139 department shall return the document to the domestic or foreign 168 corporation that approves a plan of domestication pursuant to s.
140 corporation or its authorized representative within 15 days 169 607.11921, or the a foreign corporation that approves a
141 after the document was received for filing, together with a 170 domestication pursuant to the organic law of the foreign
142 brief, written explanation of the reason for refusal. 171 corporation.
143 Section 4. Section 607.0127, Florida Statutes, is amended 172 (51) “New interest holder liability,” in the context of a
144 to read: 173 merger or share exchange, means interest holder liability of a
145 607.0127 Certificates to be received in evidence; 174 person resulting from a merger or share exchange that is:
Page 5 of 72 Page 6 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
175 (a) In respect of an eligible entity which is different 204 (e) The articles of incorporation of a general cooperative
176 from the eligible entity and not the same eligible entity in 205 association or a limited cooperative association;
177 which the person held shares or eligible interests, immediately 206 (f) The certificate of trust of a statutory trust or
178 before the merger or share exchange became effective; or 207 similar record of a business trust; or
179 (b) In respect of the same eligible entity as the one in 208 (g) The articles of incorporation of a real estate
180 which the person held shares or eligible interests, immediately 209 investment trust.
181 before the merger or share exchange became effective if: 210 (63) “Record date” means the date fixed for determining the
182 1. The person did not have interest holder liability 211 identity of the corporation’s shareholders and their share
183 immediately before the merger or share exchange became 212 holdings for purposes of this chapter. Unless another time is
184 effective; or 213 specified when the record date is fixed, the determination shall
185 2. The person had interest holder liability immediately 214 be made as of the close of the business at the principal office
186 before the merger or share exchange became effective, the terms 215 of the corporation on the date so fixed.
187 and conditions of which were changed when the merger or share 216 Section 6. Subsections (4) and (11) of section 607.0141,
188 exchange became effective. 217 Florida Statutes, are amended to read:
189 (61) “Public organic record” means a record, the filing of 218 607.0141 Notice.—
190 which by a governmental body is required to form an entity, and 219 (4) Written notice to a domestic corporation or to a
191 or an amendment to or restatement of such record. Where a public 220 foreign corporation authorized to transact business in this
192 organic record has been amended or restated, the term means the 221 state may be addressed:
193 public organic record as last amended or restated. The term 222 (a) To its registered agent at the domestic corporation’s
194 includes the following: 223 or foreign corporation’s registered office; or
195 (a) The articles of incorporation of a corporation for 224 (b) To the domestic corporation or foreign corporation or
196 profit; 225 to the domestic corporation’s or foreign corporation’s secretary
197 (b) The articles of incorporation of a nonprofit 226 at the domestic corporation’s or foreign corporation’s principal
198 corporation; 227 office or electronic mail address as authorized and shown in its
199 (c) The certificate of limited partnership of a limited 228 most recent annual report or, in the case of a domestic
200 partnership; 229 corporation or foreign corporation that has not yet delivered an
201 (d) The articles of organization, certificate of 230 annual report, in a domestic corporation’s articles of
202 organization, or certificate of formation of a limited liability 231 incorporation or in a foreign corporation’s application for
203 company; 232 certificate of authority.
Page 7 of 72 Page 8 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
233 (11) If this chapter act prescribes requirements for 262 officers and employees in accordance with s. 607.0833;
234 notices or other communications in particular circumstances, 263 (6) To purchase, receive, subscribe for, or otherwise
235 those requirements govern. If articles of incorporation or 264 acquire; own, hold, vote, use, sell, mortgage, lend, pledge, or
236 bylaws prescribe requirements for notices or other 265 otherwise dispose of; and deal in and with shares or other
237 communications not less stringent than the requirements of this 266 interests in, or obligations of, any other entity;
238 section or other provisions of this chapter act, those 267 (7) To make contracts and guarantees, incur liabilities,
239 requirements govern. The articles of incorporation or bylaws may 268 borrow money, issue its notes, bonds, and other securities and
240 authorize or require delivery of notices of meetings of 269 obligations (which may be convertible into or include the option
241 directors by electronic transmission. 270 to purchase other securities of the corporation), and secure any
242 Section 7. Section 607.0302, Florida Statutes, is amended 271 of its obligations by mortgage or pledge of any of its property,
243 to read: 272 franchises, or income and make contracts of guaranty and
244 607.0302 General powers.—Unless its articles of 273 suretyship which are necessary or convenient to the conduct,
245 incorporation provide otherwise, every corporation has perpetual 274 promotion, or attainment of the business of a corporation the
246 duration and succession in its corporate name and has the same 275 majority of the outstanding shares of which is owned, directly
247 powers as an individual to do all things necessary or convenient 276 or indirectly, by the contracting corporation; a corporation
248 to carry out its business and affairs, including power: 277 which owns, directly or indirectly, a majority of the
249 (1) To sue and be sued, complain, and defend in its 278 outstanding shares of the contracting corporation; or a
250 corporate name; 279 corporation the majority of the outstanding shares of which is
251 (2) To have a corporate seal, which may be altered at will 280 owned, directly or indirectly, by a corporation which owns,
252 and to use it or a facsimile of it, by impressing or affixing it 281 directly or indirectly, the majority of the outstanding shares
253 or in any other manner reproducing it; 282 of the contracting corporation, which contracts of guaranty and
254 (3) To purchase, receive, lease, or otherwise acquire, and 283 suretyship shall be deemed to be necessary or convenient to the
255 own, hold, improve, use, and otherwise deal with real or 284 conduct, promotion, or attainment of the business of the
256 personal property or any legal or equitable interest in property 285 contracting corporation, and make other contracts of guaranty
257 wherever located; 286 and suretyship which are necessary or convenient to the conduct,
258 (4) To sell, convey, mortgage, pledge, create a security 287 promotion, or attainment of the business of the contracting
259 interest in, lease, exchange, and otherwise dispose of all or 288 corporation;
260 any part of its property; 289 (8) To lend money, invest and reinvest its funds, and
261 (5) To lend money to, and use its credit to assist, its 290 receive and hold real and personal property as security for
Page 9 of 72 Page 10 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
291 repayment; 320 associate, or manager of any corporation, partnership, joint
292 (9) To conduct its business, locate offices, and exercise 321 venture, trust, or other entity.
293 the powers granted by this chapter within or without this state; 322 Section 8. Subsections (1) and (5) of section 607.0501,
294 (10) To elect directors and appoint officers, employees, 323 Florida Statutes, are amended to read:
295 and agents of the corporation and define their duties, fix their 324 607.0501 Registered office and registered agent.—
296 compensation, and lend them money and credit; 325 (1) Each corporation shall designate and continuously
297 (11) To make and amend bylaws, not inconsistent with its 326 maintain in this state:
298 articles of incorporation or with the laws of this state, for 327 (a) A registered office, which may be the same as its place
299 managing the business and regulating the affairs of the 328 of business in this state; and
300 corporation; 329 (b) A registered agent, which must be:
301 (12) To make donations for the public welfare or for 330 1. An individual who resides in this state whose business
302 charitable, scientific, or educational purposes; 331 address is identical to the address of the registered office;
303 (13) To transact any lawful business that will aid 332 2. Another domestic entity that is an authorized entity and
304 governmental policy; 333 whose business address is identical to the address of the
305 (14) To make payments or donations or do any other act not 334 registered office; or
306 inconsistent with law that furthers the business and affairs of 335 3. A foreign entity authorized to transact business in this
307 the corporation; 336 state which is an authorized entity and whose business address
308 (15) To pay pensions and establish pension plans, pension 337 is identical to the address of the registered office.
309 trusts, profit-sharing plans, share bonus plans, share option 338 (5) The department shall maintain an accurate record of the
310 plans, and benefit or incentive plans for any or all of its 339 registered agent agents and registered office for service of
311 current or former directors, officers, employees, and agents and 340 process and shall promptly furnish any information disclosed
312 for any or all of the current or former directors, officers, 341 thereby upon request and payment of the required fee.
313 employees, and agents of its subsidiaries; 342 Section 9. Subsection (2) of section 607.0601, Florida
314 (16) To provide insurance for its benefit on the life of 343 Statutes, is amended to read:
315 any of its directors, officers, or employees, or on the life of 344 607.0601 Authorized shares.—
316 any shareholder for the purpose of acquiring at his, or her, or 345 (2) The articles of incorporation must authorize:
317 its death shares of its stock owned by the shareholder or by the 346 (a) One or more classes or series of shares that together
318 spouse or children of the shareholder; and 347 have unlimited voting rights, and
319 (17) To be a promoter, incorporator, partner, member, 348 (b) One or more classes or series of shares (which may be
Page 11 of 72 Page 12 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
349 the same class or series or classes or series as those with 378 defaulting subscriber or his, or her, or its legal
350 voting rights) that together are entitled to receive the net 379 representative shall be entitled to be paid the excess of the
351 assets of the corporation upon dissolution. 380 sale proceeds over the sum of the amount due and unpaid on the
352 Section 10. Subsection (1) of section 607.0602, Florida 381 subscription and the reasonable expenses incurred in selling the
353 Statutes, is amended to read: 382 shares, but in no event shall the defaulting subscriber or his,
354 607.0602 Terms of class or series determined by board of 383 or her, or its legal representative be entitled to be paid an
355 directors.— 384 amount greater than the amount paid by the subscriber on the
356 (1) If the articles of incorporation so provide, the board 385 subscription.
357 of directors is authorized, without shareholder approval, to: 386 Section 12. Subsection (1) of section 607.0623, Florida
358 (a) Classify any unissued shares into one or more classes 387 Statutes, is amended to read:
359 or into one or more series within a class; 388 607.0623 Share dividends.—
360 (b) Reclassify any unissued shares of any class into one or 389 (1) Unless the articles of incorporation provide otherwise,
361 more classes or into one or more series within a class one or 390 shares may be issued pro rata and without consideration to the
362 more classes; or 391 corporation’s shareholders or to the shareholders of one or more
363 (c) Reclassify any unissued shares of any series of any 392 classes or series of or shares. An issuance of shares under this
364 class into one or more classes or into one or more series within 393 subsection is a share dividend.
365 a class. 394 Section 13. Paragraphs (c) and (d) of subsection (2) of
366 Section 11. Subsection (5) of section 607.0620, Florida 395 section 607.0630, Florida Statutes, are amended to read:
367 Statutes, is amended to read: 396 607.0630 Shareholders’ preemptive rights.—
368 607.0620 Subscriptions for shares.— 397 (2) A statement included in the articles of incorporation
369 (5) If a subscriber defaults in payment of money or 398 that “the corporation elects to have preemptive rights” (or
370 property under a subscription agreement entered into before 399 words of similar import) means that the following principles
371 incorporation, the corporation may collect the amount owed as 400 apply except to the extent the articles of incorporation
372 any other debt. Alternatively, unless the subscription agreement 401 expressly provide otherwise:
373 provides otherwise, the corporation may rescind the agreement 402 (c) There is no preemptive right with respect to:
374 and may sell the shares if the debt remains unpaid more than 20 403 1. Shares issued as compensation to directors, officers,
375 days after the corporation delivers written demand for payment 404 agents, or employees of the corporation, its subsidiaries, or
376 to the subscriber. If the subscription agreement is rescinded 405 its affiliates;
377 and the shares sold, then, notwithstanding the rescission, the 406 2. Shares issued to satisfy conversion or option rights
Page 13 of 72 Page 14 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
407 created to provide compensation to directors, officers, agents, 436 required to be given to any shareholder under this chapter or
408 or employees of the corporation, its subsidiaries, or its 437 the articles of incorporation or bylaws of any corporation to
409 affiliates; 438 whom:
410 3. Shares authorized in the articles of incorporation that 439 (a) Notice of two consecutive annual meetings, and all
411 are issued within 6 months from the effective date of 440 notices of meetings or the taking of action by written consent
412 incorporation; 441 without a meeting to such person during the period between such
413 4. Shares issued pursuant to a plan of reorganization 442 two consecutive annual meetings; or
414 approved by a court of competent jurisdiction pursuant to a law 443 (b) All, and at least two payments checks in payment of
415 of this state or of the United States; or 444 dividends or interest on securities during a 12-month period,
416 5. Shares issued for consideration other than money. 445
417 (d) Holders of shares of any class or series without 446 have been sent by first-class United States mail, addressed to
418 general voting rights but with preferential rights to 447 the shareholder at such person’s address as it appears in the
419 distributions to receive the net assets upon dissolution have no 448 record of shareholders of the corporation, maintained in
420 preemptive rights with respect to shares of any class or series. 449 accordance with s. 607.1601(4), and returned undeliverable, then
421 Section 14. Subsection (7) of section 607.0704, Florida 450 the giving of such notice to such person shall not be required.
422 Statutes, is amended to read: 451 Any action or meeting which is taken or held without notice to
423 607.0704 Action by shareholders without a meeting.— 452 such person has the same force and effect as if such notice has
424 (7) The notice requirements in subsection (3) do not delay 453 been duly given. If any such person delivers to the corporation
425 the effectiveness of actions taken by written consent, and a 454 a written notice setting forth such person’s then current
426 failure to comply with such notice requirement does not 455 address, the requirement that a notice be given to such person
427 invalidate actions taken by written consent. This subsection 456 with respect to future notices shall be reinstated.
428 shall may not be deemed to limit judicial power to fashion any 457 Section 16. Subsections (2), (9), and (10) of section
429 appropriate remedy in favor of a shareholder adversely affected 458 607.0707, Florida Statutes, are amended to read:
430 by a failure to give such notice within the required time 459 607.0707 Record date.—
431 period. 460 (2) If not otherwise provided by or pursuant to the bylaws,
432 Section 15. Subsection (5) of section 607.0705, Florida 461 the record date for determining shareholders entitled to demand
433 Statutes, is amended to read: 462 a special meeting is the date the first shareholder delivers his
434 607.0705 Notice of meeting.— 463 or her demand to the corporation.
435 (5) Notwithstanding the foregoing, whenever notice is 464 (9) Shares of a corporation’s own stock acquired by the
Page 15 of 72 Page 16 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
465 corporation between the record date for determining shareholders 494 date for voting. A shareholder or the shareholder’s agent or
466 entitled to notice of or to vote at a meeting of shareholders 495 attorney is entitled on written demand to inspect and, subject
467 and the time of the meeting may be voted on at the meeting by 496 to the requirements of s. 607.1602(3), copy a list during
468 the holder of record as of the record date and shall be counted 497 regular business hours and at his, or her, or its expense,
469 in determining the total number of outstanding shares entitled 498 during the period it is available for inspection.
470 to be voted at the meeting. 499 Section 18. Subsection (3) of section 607.0721, Florida
471 (2)(10) If not otherwise fixed under s. 607.0703 or 500 Statutes, is amended to read:
472 otherwise provided by or pursuant to the bylaws, the record date 501 607.0721 Voting entitlement of shares.—
473 for determining shareholders entitled to demand a special 502 (3) Shares held by the corporation in a fiduciary capacity
474 meeting is the earliest date on which a signed shareholder 503 for the benefit of any person are entitled to vote unless they
475 demand is delivered to the corporation. A written demand for a 504 are held for the benefit of, or otherwise belong to, the
476 special meeting is not effective unless, within 60 days of the 505 corporation directly, or indirectly through an entity of which a
477 earliest date on which such a demand delivered to the 506 majority of the voting power is held directly or indirectly by
478 corporation as required by s. 607.0702 was signed, written 507 the corporation or which is otherwise controlled by the
479 demands signed by shareholders holding at least the percentage 508 corporation. For the purposes of this section subsection,
480 of votes specified in or fixed in accordance with s. 509 “voting power” means the current power to vote in the election
481 607.0702(1)(b) have been delivered to the corporation. 510 of directors of a corporation or to elect, select, or appoint
482 Section 17. Subsection (2) of section 607.0720, Florida 511 those persons who will govern another entity.
483 Statutes, is amended to read: 512 Section 19. Subsection (2) of section 607.0732, Florida
484 607.0720 Shareholders’ list for meeting.— 513 Statutes, is amended to read:
485 (2) The shareholders’ list for notice must be available for 514 607.0732 Shareholder agreements.—
486 inspection by any shareholder for a period of 10 days prior to 515 (2) An agreement authorized by this section shall be:
487 the meeting or such shorter time as exists between the record 516 (a)1. Set forth or referenced in the articles of
488 date and the meeting and continuing through the meeting at the 517 incorporation or bylaws and approved by all persons who are
489 corporation’s principal office, at a place identified in the 518 shareholders at the time of the agreement; or
490 meeting notice in the city where the meeting will be held, or at 519 2. Set forth in a written agreement that is signed by all
491 the office of the corporation’s transfer agent or registrar. Any 520 persons who are shareholders at the time of the agreement and
492 separate shareholders’ list for voting, if different, must be 521 such written agreement is made known to the corporation; and
493 similarly available for inspection promptly after the record 522 (b) Subject to termination or amendment only by all persons
Page 17 of 72 Page 18 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
523 who are shareholders at the time of the termination or 552 another action, must be taken by the shareholders in order to
524 amendment, unless the agreement provides otherwise. 553 authorize the transaction. In such action, the vote or consent
525 Section 20. Subsection (1) of section 607.0750, Florida 554 of shareholders who are not disinterested shareholders may be
526 Statutes, is amended to read: 555 counted.
527 607.0750 Direct action by shareholder.— 556 Section 23. Subsection (4) of section 607.0850, Florida
528 (1) Subject to subsection (2), a shareholder may maintain a 557 Statutes, is amended to read:
529 direct action against another shareholder, an officer, a 558 607.0850 Definitions.—In ss. 607.0850-607.0859, the term:
530 director, or the company, to enforce the shareholder’s rights 559 (4) “Expenses” includes reasonable attorney fees and
531 and otherwise protect the shareholder’s interests, including 560 expenses, including those incurred in connection with any
532 rights and interests under the articles of incorporation, the 561 appeal.
533 bylaws or this chapter or arising independently of the 562 Section 24. Subsection (2) of section 607.0855, Florida
534 shareholder relationship. 563 Statutes, is amended to read:
535 Section 21. Subsection (4) of section 607.0808, Florida 564 607.0855 Determination and authorization of
536 Statutes, is amended to read: 565 indemnification.—
537 607.0808 Removal of directors by shareholders.— 566 (2) The determination shall be made:
538 (4) A director may be removed by the shareholders only at a 567 (a) If there are two or more qualified directors, by the
539 meeting of shareholders called for the purpose of removing the 568 board of directors by a majority vote of all of the qualified
540 director, and the meeting notice must state that the removal of 569 directors, a majority of whom shall for such purposes constitute
541 the director is the purpose, or one of the purposes, of the 570 a quorum, or by a majority of the members of a committee of two
542 meeting. 571 or more qualified directors appointed by such a vote; or
543 Section 22. Subsection (7) of section 607.0832, Florida 572 (b) By independent special legal counsel:
544 Statutes, is amended to read: 573 1. Selected in the manner prescribed by paragraph (a); or
545 607.0832 Director conflicts of interest.— 574 2. If there are fewer than two qualified directors,
546 (7) If Where shareholders’ action under this section does 575 selected by the board of directors, in which selection directors
547 not satisfy a quorum or voting requirement applicable to the 576 who are not qualified directors may participate; or
548 authorization of the transaction by shareholders as required by 577 (c) By the shareholders, but shares owned by or voted under
549 the articles of incorporation, the bylaws, this chapter, or any 578 the control of a director or officer who, at the time of the
550 other law, an action to satisfy those authorization 579 determination, is not a qualified director or an officer who is
551 requirements, whether as part of the same action or by way of 580 a party to the proceeding may not be counted as votes in favor
Page 19 of 72 Page 20 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
581 of the determination. 610 otherwise, of the power to direct or cause the direction of the
582 Section 25. Subsection (1) of section 607.0858, Florida 611 management and policies of a person. A person who is the owner
583 Statutes, is amended to read: 612 of 20 percent or more of the outstanding voting interests shares
584 607.0858 Variation by corporate action; application of ss. 613 of any corporation, partnership, unincorporated association, or
585 607.0850-607.0859.— 614 other entity is presumed to have control of such entity, in the
586 (1) The indemnification provided pursuant to ss. 607.0851 615 absence of proof by a preponderance of the evidence to the
587 and 607.0852 and the advancement of expenses provided pursuant 616 contrary. Notwithstanding the foregoing, a person shall not be
588 to s. 607.0853 are not exclusive, and a corporation may, by a 617 deemed to have control of an entity if such person holds voting
589 provision in its articles of incorporation, bylaws, or any 618 interests shares, in good faith and not for the purpose of
590 agreement, or by vote of shareholders or disinterested 619 circumventing this section, as an agent, bank, broker, nominee,
591 directors, or otherwise, obligate itself in advance of the act 620 custodian, or trustee for one or more beneficial owners who do
592 or omission giving rise to a proceeding to provide any other or 621 not individually or as a group have control of such entity.
593 further indemnification or advancement of expenses to any of its 622 Section 27. Subsection (11) of section 607.1002, Florida
594 directors or officers. Any such obligatory provision shall be 623 Statutes, is amended to read:
595 deemed to satisfy the requirements for authorization referred to 624 607.1002 Amendment by board of directors.—Unless the
596 in ss. 607.0853(3) and 607.0855(3). Any such provision that 625 articles of incorporation provide otherwise, a corporation’s
597 obligates the corporation to provide indemnification to the 626 board of directors may adopt one or more amendments to the
598 fullest extent permitted by law shall be deemed to obligate the 627 corporation’s articles of incorporation without shareholder
599 corporation to advance funds to pay for or reimburse expenses in 628 approval:
600 accordance with s. 607.0853 to the fullest extent permitted by 629 (11) To make any other change expressly permitted by this
601 law, unless the provision specifically provides otherwise. 630 chapter act to be made without shareholder approval.
602 Section 26. Paragraph (f) of subsection (1) of section 631 Section 28. Paragraph (a) of subsection (2) and subsection
603 607.0901, Florida Statutes, is amended to read: 632 (4) of section 607.1003, Florida Statutes, are amended to read:
604 607.0901 Affiliated transactions.— 633 607.1003 Amendment by board of directors and shareholders.—
605 (1) For purposes of this section: 634 If a corporation has issued shares, an amendment to the articles
606 (f) “Control,” “controlling,” “controlled by,” and “under 635 of incorporation shall be adopted in the following manner:
607 common control with” mean the possession, directly or 636 (2)(a) Except as provided in s. ss. 607.1002, s. 607.10025,
608 indirectly, through the ownership of voting interests shares, by 637 s. and 607.1008, or and, with respect to restatements that do
609 contract, arrangement, understanding, relationship, or 638 not require shareholder approval, s. 607.1007, the amendment
Page 21 of 72 Page 22 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
639 shall then be approved by the shareholders. 668 5. Cash.
640 (4) If the amendment is required to be approved by the 669 6. Other property.
641 shareholders, and the approval is to be given at a meeting, the 670 7. Any combination of the foregoing; or
642 corporation must notify each shareholder, whether or not 671 (b) All of the shares of one or more classes or series of
643 entitled to vote, of the meeting of shareholders at which the 672 shares or rights to acquire shares of a domestic corporation may
644 amendment is to be submitted for approval. The notice must be 673 be acquired by another domestic or foreign eligible entity,
645 given in accordance with s. 607.0705; must state that the 674 pursuant to a plan of share exchange, in exchange for:
646 purpose, or one of the purposes, of the meeting is to consider 675 1. Shares or other securities.
647 the amendment; and must contain or be accompanied by a copy of 676 2. Eligible interests.
648 the amendment. 677 3. Obligations.
649 Section 29. Subsections (1) and (6) of section 607.1102, 678 4. Rights to acquire shares, other securities, or eligible
650 Florida Statutes, are amended to read: 679 interests.
651 607.1102 Share exchange.— 680 5. Cash.
652 (1) By complying with this chapter, including adopting a 681 6. Other property.
653 plan of share exchange in accordance with subsection (3) and 682 7. Any combination of the foregoing.
654 complying with s. 607.1103: 683 (6) A plan of share exchange may be amended only with the
655 (a) A domestic corporation may acquire all of the shares or 684 consent of each party to the share exchange, except as provided
656 one or more classes or series of shares or rights to acquire 685 in the plan. A domestic eligible entity may approve an amendment
657 shares of one or more classes or series of shares or rights to 686 to a plan:
658 acquire shares of another domestic or foreign corporation, or 687 (a) In the same manner as the plan was approved, if the
659 all of the eligible interests of one or more classes or series 688 plan does not provide for the manner in which it may be amended;
660 of interests of a domestic or foreign eligible entity, or any 689 or
661 combination of the foregoing, pursuant to a plan of share 690 (b) In the manner provided in the plan, except that
662 exchange, in exchange for: 691 shareholders, members, or interest holders that were entitled to
663 1. Shares or other securities. 692 vote on or consent to approval of the plan are entitled to vote
664 2. Eligible interests. 693 on or consent to any amendment of the plan that will change:
665 3. Obligations. 694 1. The amount or kind of shares or other securities;
666 4. Rights to acquire shares, other securities, or eligible 695 eligible interests; obligations; rights to acquire shares, other
667 interests. 696 securities, or eligible interests; cash; or other property; or
Page 23 of 72 Page 24 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
697 any combination of the foregoing, to be received under the plan 726 2. Section 607.0826 applies.
698 by the shareholders, members, or interest holders of the 727 (c) If either subparagraph (b)1. or subparagraph (b)2.
699 acquired eligible entity; or 728 applies, the board shall inform the shareholders of the basis
700 2. Any of the other terms or conditions of the plan if the 729 for its so proceeding without such recommendation.
701 change would adversely affect such shareholders, members, or 730 (3) The board of directors may set conditions for the
702 interest holders in any material respect. 731 approval of the proposed merger or share exchange by the
703 Section 30. Section 607.1103, Florida Statutes, is amended 732 shareholders or the effectiveness of the plan of merger or the
704 to read: 733 plan of share exchange.
705 607.1103 Action on a plan of merger or share exchange.—In 734 (4) If the plan of merger or the plan of share exchange is
706 the case of a domestic corporation that is a party to a merger 735 required to be approved by the shareholders, and if the approval
707 or is the acquired eligible entity in a share exchange, the plan 736 is to be given at a meeting, the corporation shall notify each
708 of merger or the plan of share exchange must be adopted in the 737 shareholder, regardless of whether entitled to vote, of the
709 following manner: 738 meeting of shareholders at which the plan is submitted for
710 (1) The plan of merger or the plan of share exchange shall 739 approval in accordance with s. 607.0705. The notice shall also
711 first be adopted by the board of directors of such domestic 740 state that the purpose, or one of the purposes, of the meeting
712 corporation. 741 is to consider the plan of merger or the plan of share exchange,
713 (2)(a) Except as provided in subsections (8), (10), and 742 regardless of whether or not the meeting is an annual or a
714 (11), and in ss. 607.11035 and 607.1104, the plan of merger or 743 special meeting, and contain or be accompanied by a copy of the
715 the plan of share exchange shall then be adopted by the 744 plan. If the corporation is to be merged into an existing
716 shareholders. 745 foreign or domestic eligible entity, the notice must also
717 (b) In submitting the plan of merger or the plan of share 746 include or be accompanied by a copy of the articles of
718 exchange to the shareholders for approval, the board of 747 incorporation and bylaws or the organic rules of that eligible
719 directors shall recommend that the shareholders approve the 748 entity into which the corporation is to be merged. If the
720 plan, or in the case of an offer referred to in s. 749 corporation is to be merged with a domestic or foreign eligible
721 607.11035(1)(b), that the shareholders tender their shares to 750 entity and a new domestic or foreign eligible entity is to be
722 the offeror in response to the offer, unless: 751 created pursuant to the merger, the notice must include or be
723 1. The board of directors makes a determination that 752 accompanied by a copy of the articles of incorporation and
724 because of conflicts of interest or other special circumstances, 753 bylaws or the organic rules of the new eligible entity.
725 it should not make such a recommendation; or 754 Furthermore, if applicable, the notice shall contain a clear and
Page 25 of 72 Page 26 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
755 concise statement that, if the plan of merger or share exchange 784 plan to be amended to include the type of amendment to the
756 is effected, shareholders dissenting therefrom may be entitled, 785 articles of incorporation referenced in subparagraph 1., by each
757 if they comply with the provisions of this chapter regarding 786 class or series of shares of the corporation that would have
758 appraisal rights, to be paid the fair value of their shares, and 787 been entitled to vote as a separate voting group on any such
759 shall be accompanied by a copy of ss. 607.1301-607.1340. 788 amendment to the articles of incorporation.; or
760 (5) Unless this chapter, the articles of incorporation, or 789 3. By each class or series of shares of the corporation
761 the board of directors (acting pursuant to subsection (3)) 790 that is to be converted under the plan of merger into shares;
762 requires a greater vote or a greater quorum in the respective 791 other securities; eligible interests; obligations; rights to
763 case, approval of the plan of merger or the plan of share 792 acquire shares, other securities, or eligible interests; cash;
764 exchange shall require the approval of the shareholders at a 793 property; or any combination of the foregoing.; or
765 meeting at which a quorum exists by a majority of the votes 794 4. If the plan contains a provision that would allow the
766 entitled to be cast on the plan, and, if any class or series of 795 plan to be amended to convert other classes or series of shares
767 shares is entitled to vote as a separate voting group on the 796 of the corporation, by each class or series of shares of the
768 plan of merger or the plan of share exchange, the approval of 797 corporation that would have been entitled to vote as a separate
769 each such separate voting group at a meeting at which a quorum 798 voting group if the plan were to be so amended.
770 of the voting group is present by a majority of the votes 799 (b) Subject to subsection (7), voting by a class or series
771 entitled to be cast on the merger or share exchange by that 800 as a separate voting group is required on a plan of share
772 voting group. 801 exchange:
773 (6)(a) Subject to subsection (7), voting by a class or 802 1. By each class or series that is to be exchanged in the
774 series as a separate voting group is required on a plan of 803 exchange, with each class or series constituting a separate
775 merger: 804 voting group.; or
776 1. By each class or series of shares of the corporation 805 2. If the plan contains a provision that would allow the
777 that would be entitled to vote as a separate voting group on any 806 plan to be amended to include the type of amendment to the
778 provision in the plan which, if such provision had been 807 articles of incorporation referenced in subparagraph (a)1., by
779 contained in a proposed amendment to the articles of 808 each class or series of shares of the corporation that would
780 incorporation of a surviving corporation, would have entitled 809 have been entitled to vote as a separate voting group on any
781 the class or series to vote as a separate voting group on the 810 such amendment to the articles of incorporation.
782 proposed amendment under s. 607.1004.; or 811 (c) Subject to subsection (7), voting by a class or series
783 2. If the plan contains a provision that would allow the 812 as a separate voting group is required on a plan of merger or a
Page 27 of 72 Page 28 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
813 plan of share exchange if the group is entitled under the 842 to new interest holder liability, approval of the plan of merger
814 articles of incorporation to vote as a separate voting group to 843 or the plan of share exchange shall require, in connection with
815 approve the plan of merger or the plan of share exchange, 844 the transaction, the signing by each such shareholder of a
816 respectively. 845 separate written consent to become subject to such new interest
817 (7) The articles of incorporation may expressly limit or 846 holder liability, unless in the case of a shareholder that
818 eliminate the separate voting rights provided in any one or more 847 already has interest holder liability with respect to such
819 of subparagraphs (6)(a)3. and 4. and subparagraph (6)(a)3., 848 domestic corporation:
820 subparagraph (6)(a)4., or subparagraph (6)(b)1. as to any class 849 (a) The new interest holder liability is with respect to a
821 or series of shares, except when the plan of merger or the plan 850 domestic or foreign corporation (which may be a different or the
822 for share exchange: 851 same domestic corporation in which the person is a shareholder);
823 (a) Includes what is or would be, in effect, an amendment 852 and
824 subject to any one or more of subparagraphs (6)(a)1. and 2. and 853 (b) The terms and conditions of the new interest holder
825 (6)(b)2.; and 854 liability are substantially identical to those of the existing
826 (b) Will not affect a substantive business combination. 855 interest holder liability (other than for changes that reduce or
827 (8) Unless the corporation’s articles of incorporation 856 eliminate such interest holder liability).
828 provide otherwise, approval by the corporation’s shareholders of 857 (10) Unless the articles of incorporation otherwise
829 a plan of merger is not required if: 858 provide, approval of a plan of share exchange by the
830 (a) The corporation will survive the merger; 859 shareholders of a domestic corporation is not required if the
831 (b) The articles of incorporation of the surviving 860 corporation is the acquiring eligible entity in the share
832 corporation will not differ (except for amendments enumerated in 861 exchange.
833 s. 607.1002) from its articles of incorporation before the 862 (11) Unless the articles of incorporation otherwise
834 merger; and 863 provide, shares in the acquired eligible entity not to be
835 (c) Each shareholder of the surviving corporation whose 864 exchanged under the plan of share exchange are not entitled to
836 shares were outstanding immediately prior to the effective date 865 vote on the plan.
837 of the merger will hold the same number of shares, with 866 Section 31. Subsection (1) of section 607.11035, Florida
838 identical designations, preferences, rights, and limitations, 867 Statutes, is amended to read:
839 immediately after the effective date of the merger. 868 607.11035 Shareholder approval of a merger or share
840 (9) If, as a result of a merger or share exchange, one or 869 exchange in connection with a tender offer.—
841 more shareholders of a domestic corporation would become subject 870 (1) Unless the articles of incorporation otherwise provide,
Page 29 of 72 Page 30 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
871 shareholder approval of a plan of merger or a plan of share 900 response to the offer and not properly withdrawn;
872 exchange under s. 607.1103(1)(b) is not required if: 901 (f) The shares listed below are collectively entitled to
873 (a) The plan of merger or share exchange expressly: 902 cast at least the minimum number of votes on the merger or share
874 1. Permits or requires the merger or share exchange to be 903 exchange that, absent this section, would be required by this
875 effected under this section; and 904 chapter and by the articles of incorporation for the approval of
876 2. Provides that, if the merger or share exchange is to be 905 the merger or share exchange by the shareholders and by each
877 effected under this section, the merger or share exchange will 906 other voting group entitled to vote on the merger or share
878 be effected as soon as practicable following the satisfaction of 907 exchange at a meeting at which all shares entitled to vote on
879 the requirement in paragraph (f); 908 the approval were present and voted:
880 (b) Another party to the merger, the acquiring eligible 909 1. Shares purchased by the offeror in accordance with the
881 entity in the share exchange, or a parent of another party to 910 offer;
882 the merger or the parent of the acquiring eligible entity in the 911 2. Shares otherwise owned by the offeror or by any parent
883 share exchange, makes an offer to purchase, on the terms 912 of the offeror or any wholly owned subsidiary of any of the
884 provided in the plan of merger or the plan of share exchange, 913 foregoing; and
885 any and all of the outstanding shares of the corporation that, 914 3. Shares subject to an agreement that provides that they
886 absent this section, would be entitled to vote on the plan of 915 are to be transferred, contributed, or delivered to the offeror,
887 merger or the plan of share exchange, except that the offer may 916 any parent of the offeror, or any wholly owned subsidiary of any
888 exclude shares of the corporation that are owned at the 917 of the foregoing in exchange for shares or eligible interests in
889 commencement of the offer by the corporation, the offeror, or 918 such offeror, parent, or subsidiary;
890 any parent of the offeror, or by any wholly owned subsidiary of 919 (g) The offeror or a wholly owned subsidiary of the offeror
891 any of the foregoing; 920 merges with or into, or effects a share exchange in which it
892 (c) The offer discloses that the plan of merger or the plan 921 acquires shares of, the corporation; and
893 of share exchange provides that the merger or share exchange 922 (h) Each outstanding share of each class or series of
894 will be effected as soon as practicable following the 923 shares of the corporation that the offeror is offering to
895 satisfaction of the requirement in paragraph (f) and that the 924 purchase in accordance with the offer, and that is not purchased
896 shares of the corporation that are not tendered in response to 925 in accordance with the offer, is to be converted in the merger
897 the offer will be treated pursuant to paragraph (h); 926 into, or into the right to receive, or is to be exchanged in the
898 (d) The offer remains open for at least 10 days; 927 share exchange for, or for the right to receive, the same amount
899 (e) The offeror purchases all shares properly tendered in 928 and kind of securities, eligible interests, obligations, rights,
Page 31 of 72 Page 32 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
929 cash, other property, or any combination of the foregoing, to be 958 become the property and contract rights of and become vested in
930 paid or exchanged in accordance with the offer for each share of 959 the survivor, without transfer, reversion, or impairment;
931 that class or series of shares that is tendered in response to 960 (d) All debts, obligations, and other liabilities of each
932 the offer, except that shares of the corporation that are owned 961 domestic or foreign eligible entity that is a party to the
933 by the corporation or that are described in subparagraph (f)2. 962 merger, other than the survivor, become debts, obligations, and
934 or subparagraph (f)3. need not be converted into or exchanged 963 liabilities of the survivor;
935 for the consideration described in this paragraph. 964 (e) The name of the survivor may be, but need not be,
936 Section 32. Subsection (1) of section 607.11045, Florida 965 substituted in any pending proceeding for the name of any party
937 Statutes, is amended to read: 966 to the merger whose separate existence ceased in the merger;
938 607.11045 Holding company formation by merger by certain 967 (f) Neither the rights of creditors nor any liens upon the
939 corporations.— 968 property of any corporation party to the merger shall be
940 (1) This section applies only to a corporation that has 969 impaired by such merger;
941 shares registered pursuant to s. 12 of the Securities Exchange 970 (g) If the survivor is a domestic eligible entity, the
942 Act of 1934, or held of record by not fewer than 2,000 971 articles of incorporation and bylaws or the organic rules of the
943 shareholders. 972 survivor are amended to the extent provided in the plan of
944 Section 33. Subsection (1) of section 607.1106, Florida 973 merger;
945 Statutes, is amended to read: 974 (h) The articles of incorporation and bylaws or the organic
946 607.1106 Effect of merger or share exchange.— 975 rules of a survivor that is a domestic eligible entity and is
947 (1) When a merger becomes effective: 976 created by the merger become effective;
948 (a) The domestic or foreign eligible entity that is 977 (i) The shares, obligations, and other securities (and the
949 designated in the plan of merger as the survivor continues or 978 rights to acquire shares, obligations, or other securities) of
950 comes into existence, as the case may be; 979 each domestic or foreign corporation party to the merger, and
951 (b) The separate existence of every domestic or foreign 980 the eligible interests in any other eligible entity that is a
952 eligible entity that is a party to the merger, other than the 981 party to the merger, that are to be converted in accordance with
953 survivor, ceases; 982 the terms of the merger into shares or other securities;
954 (c) All real property and other property, including any 983 eligible interests; obligations; rights to acquire shares, other
955 interest therein and all title thereto, owned by, and every 984 securities, or eligible interests; cash; other property; or any
956 contract right possessed by, each domestic or foreign eligible 985 combination of the foregoing, are converted, and the former
957 entity that is a party to the merger, other than the survivor, 986 holders of such shares, obligations, other securities, and
Page 33 of 72 Page 34 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
987 eligible interests (and the rights to acquire shares, 1016 rights to acquire shares of the domesticating corporation into
988 obligations, other securities, or other eligible interests) are 1017 shares or other securities, obligations, rights to acquire
989 entitled only to the rights provided to them by those terms of 1018 shares or other securities, cash, other property, or any
990 the merger or to any rights they may have under s. 607.1302 or 1019 combination of the foregoing;
991 under the organic law governing the eligible entity; 1020 (d) The proposed organic rules of the domesticated
992 (j) Except as provided by law or the plan of merger, all 1021 corporation which must be in writing; and
993 the rights, privileges, franchises, and immunities of each 1022 (e) The other terms and conditions of the domestication.
994 eligible entity that is a party to the merger, other than the 1023 Section 35. Subsections (5) and (6) of section 607.11921,
995 survivor, become the rights, privileges, franchises, and 1024 Florida Statutes, are amended to read:
996 immunities of the survivor; and 1025 607.11921 Action on a plan of domestication.—In the case of
997 (k) If the survivor exists before the merger: 1026 a domestication of a domestic corporation into a foreign
998 1. All the property and contract rights of the survivor 1027 jurisdiction, the plan of domestication shall be adopted in the
999 remain its property and contract rights without transfer, 1028 following manner:
1000 reversion, or impairment; 1029 (5) Unless this chapter, the articles of incorporation, or
1001 2. The survivor remains subject to all of its debts, 1030 the board of directors acting pursuant to subsection (3),
1002 obligations, and other liabilities; and 1031 require a greater vote or a greater quorum in the respective
1003 3. Except as provided by law or the plan of merger, the 1032 case, approval of the plan of domestication requires:
1004 survivor continues to hold all of its rights, privileges, 1033 (a) The approval of the shareholders at a meeting at which
1005 franchises, and immunities. 1034 a quorum exists consisting of a majority of the votes entitled
1006 Section 34. Subsection (3) of section 607.11920, Florida 1035 to be cast on the plan; and
1007 Statutes, is amended to read: 1036 (b) Except as provided in subsection (6), the approval of
1008 607.11920 Domestication.— 1037 each class or series of shares voting as a separate voting group
1009 (3) In a domestication under subsection (2), the 1038 at a meeting at which a quorum of the voting group exists
1010 domesticating eligible entity must enter into a plan of 1039 consisting of a majority of the votes entitled to be cast on the
1011 domestication. The plan of domestication must include: 1040 plan by that voting group.
1012 (a) The name of the domesticating corporation; 1041 (6) The articles of incorporation may expressly limit or
1013 (b) The name and jurisdiction of formation of the 1042 eliminate the separate voting rights provided in paragraph
1014 domesticated corporation; 1043 (5)(b) as to any class or series of shares, except when the
1015 (c) The manner and basis of reclassifying the shares and 1044 public organic rules of the foreign corporation resulting from
Page 35 of 72 Page 36 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
1045 the domestication include what would be in effect an amendment 1074 domesticated corporation under its organic rules as set forth in
1046 that would entitle the class or series to vote as a separate 1075 the plan of domestication; or
1047 voting group under s. 607.1004 if it were a proposed amendment 1076 3. Any of the other terms or conditions of the plan, if the
1048 of the articles of incorporation of a domestic domesticating 1077 change would adversely affect the shareholder in any material
1049 corporation. 1078 respect.
1050 Section 36. Subsection (1) of section 607.11923, Florida 1079 Section 37. Subsection (1) and paragraph (d) of subsection
1051 Statutes, is amended to read: 1080 (3) of section 607.11924, Florida Statutes, are amended to read:
1052 607.11923 Amendment of a plan of domestication; 1081 607.11924 Effect of domestication.—
1053 abandonment.— 1082 (1) When a domestication becomes effective:
1054 (1) A plan of domestication of a domestic corporation 1083 (a) All real property and other property owned by the
1055 adopted under s. 607.11920(3) may be amended: 1084 domesticating corporation, including any interests therein and
1056 (a) In the same manner as the plan of domestication was 1085 all title thereto, and every contract right possessed by the
1057 approved, if the plan does not provide for the manner in which 1086 domesticating corporation, are the property and contract rights
1058 it may be amended; or 1087 of the domesticated corporation without transfer, reversion, or
1059 (b) In the manner provided in the plan of domestication, 1088 impairment;
1060 except that a shareholder that was entitled to vote on or 1089 (b) All debts, obligations, and other liabilities of the
1061 consent to approval of the plan is entitled to vote on or 1090 domesticating corporation are the debts, obligations, and other
1062 consent to any amendment of the plan that will change: 1091 liabilities of the domesticated corporation;
1063 1. The amount or kind of shares or other securities; 1092 (c) The name of the domesticated corporation may be, but
1064 obligations; rights to acquire shares or, other securities, or 1093 need not be, substituted for the name of the domesticating
1065 eligible interests; cash; other property; or any combination of 1094 corporation in any pending proceeding;
1066 the foregoing, to be received by any of the shareholders or 1095 (d) The organic rules of the domesticated corporation
1067 holders of rights to acquire shares or, other securities, or 1096 become effective;
1068 eligible interests of the domesticating corporation under the 1097 (e) The shares and other securities (and the rights to
1069 plan; 1098 acquire shares or other securities) or equity interests of the
1070 2. The organic rules of the domesticated corporation that 1099 domesticating corporation are reclassified into shares, or other
1071 are to be in writing and that will be in effect immediately 1100 securities, obligations, rights to acquire shares or other
1072 after the domestication becomes effective, except for changes 1101 securities, cash, or other property, or any combination of the
1073 that do not require approval of the shareholders of the 1102 foregoing, in accordance with the terms of the domestication,
Page 37 of 72 Page 38 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
1103 and the shareholders or equity owners of the domesticating 1132 by the shareholders of such domestic corporation.
1104 corporation are entitled only to the rights provided to them by 1133 (5) Unless this chapter, the articles of incorporation, or
1105 those terms and to any appraisal rights they may have under the 1134 the board of directors acting pursuant to subsection (3),
1106 organic law of the domesticating corporation; and 1135 require a greater vote or a greater quorum in the respective
1107 (f) The domesticated corporation is: 1136 case, approval of the plan of conversion requires:
1108 1. Incorporated under and subject to the organic law of the 1137 (a) The approval of the shareholders at a meeting at which
1109 domesticated corporation; 1138 a quorum exists consisting of a majority of the votes entitled
1110 2. The same corporation, without interruption, as the 1139 to be cast on the plan; and
1111 domesticating corporation; and 1140 (b) The approval of each class or series of shares voting
1112 3. Deemed to have been incorporated or formed on the date 1141 as a separate voting group at a meeting at which a quorum of the
1113 the domesticating corporation was originally incorporated. 1142 voting group exists consisting of a majority of the votes
1114 (3) Except as otherwise provided in the organic law or 1143 entitled to be cast on the plan by that voting group.
1115 organic rules of a domesticating foreign corporation, the 1144 Section 39. Paragraph (a) of subsection (4) of section
1116 interest holder liability of a shareholder or equity holder in a 1145 607.11933, Florida Statutes, is amended to read:
1117 foreign corporation that is domesticated into this state who had 1146 607.11933 Articles of conversion; effectiveness.—
1118 interest holder liability in respect of such domesticating 1147 (4)(a) If the a converted eligible entity is a domestic
1119 corporation before the domestication becomes effective shall be 1148 eligible entity, the conversion becomes effective when the
1120 as follows: 1149 articles of conversion are effective.
1121 (d) The shareholder or equity holder shall may not, by 1150 Section 40. Subsection (1) and paragraph (d) of subsection
1122 reason of such prior interest holder liability, have interest 1151 (4) of section 607.11935, Florida Statutes, are amended to read:
1123 holder liability with respect to any interest holder liabilities 1152 607.11935 Effect of conversion.—
1124 that are incurred after the domestication becomes effective. 1153 (1) When a conversion becomes effective:
1125 Section 38. Paragraph (a) of subsection (2) and subsection 1154 (a) All real property and other property owned by,
1126 (5) of section 607.11932, Florida Statutes, are amended to read: 1155 including any interest therein and all title thereto, and every
1127 607.11932 Action on a plan of conversion.—In the case of a 1156 contract right possessed by, the converting eligible entity
1128 conversion of a domestic corporation to a domestic or foreign 1157 remain the property and contract rights of the converted
1129 eligible entity other than a domestic corporation, the plan of 1158 eligible entity without transfer, reversion, or impairment;
1130 conversion must be adopted in the following manner: 1159 (b) All debts, obligations, and other liabilities of the
1131 (2)(a) The plan of conversion must shall then be approved 1160 converting eligible entity remain the debts, obligations, and
Page 39 of 72 Page 40 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
1161 other liabilities of the converted eligible entity; 1190 converting eligible entity; and
1162 (c) The name of the converted eligible entity may be, but 1191 3. Deemed to have been incorporated or otherwise organized
1163 need not be, substituted for the name of the converting eligible 1192 on the date that the converting eligible entity was originally
1164 entity in any pending action or proceeding; 1193 incorporated or organized.
1165 (d) If the converted eligible entity is a filing entity, a 1194 (4) Except as otherwise provided in the organic law or the
1166 domestic corporation, or a domestic or foreign nonprofit 1195 organic rules of the domestic or foreign eligible entity, the
1167 corporation, its public organic record and its private organic 1196 interest holder liability of an interest holder in a converting
1168 rules become effective; 1197 eligible entity that converts to a domestic corporation who had
1169 (e) If the converted eligible entity is a nonfiling entity, 1198 interest holder liability in respect of such converting eligible
1170 its private organic rules become effective; 1199 entity before the conversion becomes effective shall be as
1171 (f) If the converted eligible entity is a limited liability 1200 follows:
1172 partnership, the filing required to become a limited liability 1201 (d) The eligible interest holder shall may not, by reason
1173 partnership and its private organic rules become effective; 1202 of such prior interest holder liability, have interest holder
1174 (g) The shares, obligations, eligible interests, and other 1203 liability with respect to any interest holder liabilities that
1175 securities (and the rights to acquire shares, obligations, 1204 arise after the conversion becomes effective.
1176 eligible interests, or other securities) and obligations of the 1205 Section 41. Subsection (4) of section 607.1202, Florida
1177 converting eligible entity are reclassified into shares, other 1206 Statutes, is amended to read:
1178 securities, eligible interests, obligations, rights to acquire 1207 607.1202 Shareholder approval of certain dispositions.—
1179 shares, or other securities, or eligible interests, obligations, 1208 (4) If the disposition is required to be approved by the
1180 cash, other property, or any combination of the foregoing 1209 shareholders under subsection (1) and if the approval is to be
1181 thereof, in accordance with the terms of the conversion, and the 1210 given at the meeting, the corporation shall notify each
1182 shareholders or interest holders of the converting eligible 1211 shareholder, regardless of whether entitled to vote, of the
1183 entity are entitled only to the rights provided to them by those 1212 meeting of shareholders at which the disposition is to be
1184 terms and to any rights they may have under s. 607.1302 or under 1213 submitted for approval. The notice must state that the purpose,
1185 the organic law of the converting eligible entity; and 1214 or one of the purposes, of the meeting is to consider the
1186 (h) The converted eligible entity is: 1215 disposition and shall contain a description of the disposition
1187 1. Deemed to be incorporated or organized under and subject 1216 and the consideration to be received by the corporation.
1188 to the organic law of the converted eligible entity; 1217 Furthermore, the notice shall contain a clear and concise
1189 2. Deemed to be the same entity without interruption as the 1218 statement that, if the transaction is effected, shareholders
Page 41 of 72 Page 42 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
1219 dissenting therefrom are or may be entitled, if they comply with 1248 3. Was a senior executive or director of the corporation or
1220 the provisions of this chapter act regarding appraisal rights, 1249 a senior executive of any affiliate of the corporation, and will
1221 to be paid the fair value of their shares and such notice must 1250 receive, as a result of the corporate action, a financial
1222 be accompanied by a copy of ss. 607.1301-607.1340. 1251 benefit not generally available to other shareholders as such,
1223 Section 42. Subsection (2) and paragraph (a) of subsection 1252 other than:
1224 (6) of section 607.1301, Florida Statutes, are amended to read: 1253 a. Employment, consulting, retirement, or similar benefits
1225 607.1301 Appraisal rights; definitions.—The following 1254 established separately and not as part of or in contemplation of
1226 definitions apply to ss. 607.1301-607.1340: 1255 the corporate action;
1227 (2) “Affiliate” means a person that directly or indirectly 1256 b. Employment, consulting, retirement, or similar benefits
1228 through one or more intermediaries controls, is controlled by, 1257 established in contemplation of, or as part of, the corporate
1229 or is under common control with, another person or is a senior 1258 action that are not more favorable than those existing before
1230 executive of such person. For purposes of paragraph (6)(a), a 1259 the corporate action or, if more favorable, that have been
1231 person is deemed to be an affiliate of its senior executives. 1260 approved on behalf of the corporation in the same manner as is
1232 (6) “Interested transaction” means a corporate action 1261 provided in s. 607.0832; or
1233 described in s. 607.1302(1), other than a merger pursuant to s. 1262 c. In the case of a director of the corporation who, in the
1234 607.1104, involving an interested person in which any of the 1263 corporate action, will become a director or governor of the
1235 shares or assets of the corporation are being acquired or 1264 acquirer or any of its affiliates in the corporate action,
1236 converted. As used in this definition: 1265 rights and benefits as a director or governor that are provided
1237 (a) “Interested person” means a person, or an affiliate of 1266 on the same basis as those afforded by the acquirer generally to
1238 a person, who at any time during the 1-year period immediately 1267 other directors or governors of such entity or such affiliate.
1239 preceding approval by the board of directors of the corporate 1268 Section 43. Subsection (1) of section 607.1302, Florida
1240 action: 1269 Statutes, is amended to read:
1241 1. Was the beneficial owner of 20 percent or more of the 1270 607.1302 Right of shareholders to appraisal.—
1242 voting power of the corporation, other than as owner of excluded 1271 (1) A shareholder of a domestic corporation is entitled to
1243 shares; 1272 appraisal rights, and to obtain payment of the fair value of
1244 2. Had the power, contractually or otherwise, other than as 1273 that shareholder’s shares, in the event of any of the following
1245 owner of excluded shares, to cause the appointment or election 1274 corporate actions:
1246 of 25 percent or more of the directors to the board of directors 1275 (a) Consummation of a domestication or a conversion of such
1247 of the corporation; or 1276 corporation pursuant to s. 607.11921 or s. 607.11932, as
Page 43 of 72 Page 44 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
1277 applicable, if shareholder approval is required for the 1306 and 607.1407, within 1 year after the shareholders’ approval of
1278 domestication or the conversion; 1307 the action and in accordance with their respective interests
1279 (b) Consummation of a merger to which such corporation is a 1308 determined at the time of distribution; and
1280 party: 1309 2. The disposition of assets is not an interested
1281 1. If shareholder approval is required for the merger under 1310 transaction;
1282 s. 607.1103 or would be required but for s. 607.11035, except 1311 (e) An amendment of the articles of incorporation with
1283 that appraisal rights shall not be available to any shareholder 1312 respect to a class or series of shares which reduces the number
1284 of the corporation with respect to shares of any class or series 1313 of shares of a class or series owned by the shareholder to a
1285 that remains outstanding after consummation of the merger where 1314 fraction of a share if the corporation has the obligation or the
1286 the terms of such class or series have not been materially 1315 right to repurchase the fractional share so created;
1287 altered; or 1316 (f) Any other merger, share exchange, disposition of
1288 2. If such corporation is a subsidiary and the merger is 1317 assets, or amendment to the articles of incorporation, in each
1289 governed by s. 607.1104; 1318 case to the extent provided by the articles of incorporation,
1290 (c) Consummation of a share exchange to which the 1319 bylaws, or a resolution of the board of directors, except that
1291 corporation is a party as the corporation whose shares will be 1320 no bylaw or board resolution providing for appraisal rights may
1292 acquired, except that appraisal rights are not available to any 1321 be amended or otherwise altered except by shareholder approval;
1293 shareholder of the corporation with respect to any class or 1322 (g) An amendment to the articles of incorporation or bylaws
1294 series of shares of the corporation that is not acquired in the 1323 of the corporation, the effect of which is to alter or abolish
1295 share exchange; 1324 voting or other rights with respect to such interest in a manner
1296 (d) Consummation of a disposition of assets pursuant to s. 1325 that is adverse to the interest of such shareholder, except as
1297 607.1202 if the shareholder is entitled to vote on the 1326 the right may be affected by the voting or other rights of new
1298 disposition, including a sale in dissolution, except that 1327 shares then being authorized of a new class or series of shares;
1299 appraisal rights shall not be available to any shareholder of 1328 (h) An amendment to the articles of incorporation or bylaws
1300 the corporation with respect to shares or any class or series 1329 of a corporation, the effect of which is to adversely affect the
1301 if: 1330 interest of the shareholder by altering or abolishing appraisal
1302 1. Under the terms of the corporate action approved by the 1331 rights under this section;
1303 shareholders there is to be distributed to shareholders in cash 1332 (i) With regard to a class of shares prescribed in the
1304 the corporation’s net assets, in excess of a reasonable amount 1333 articles of incorporation prior to October 1, 2003, including
1305 reserved to meet claims of the type described in ss. 607.1406 1334 any shares within that class subsequently authorized by
Page 45 of 72 Page 46 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
1335 amendment, any amendment of the articles of incorporation if the 1364 involuntary liquidation;
1336 shareholder is entitled to vote on the amendment and if such 1365 (j) An amendment of the articles of incorporation of a
1337 amendment would adversely affect such shareholder by: 1366 social purpose corporation to which s. 607.504 or s. 607.505
1338 1. Altering or abolishing any preemptive rights attached to 1367 applies;
1339 any of his, or her, or its shares; 1368 (k) An amendment of the articles of incorporation of a
1340 2. Altering or abolishing the voting rights pertaining to 1369 benefit corporation to which s. 607.604 or s. 607.605 applies;
1341 any of his, or her, or its shares, except as such rights may be 1370 (l) A merger, domestication, conversion, or share exchange
1342 affected by the voting rights of new shares then being 1371 of a social purpose corporation to which s. 607.504 applies; or
1343 authorized of any existing or new class or series of shares; 1372 (m) A merger, domestication, conversion, or share exchange
1344 3. Effecting an exchange, cancellation, or reclassification 1373 of a benefit corporation to which s. 607.604 applies.
1345 of any of his, or her, or its shares, when such exchange, 1374 Section 44. Subsection (1) of section 607.1303, Florida
1346 cancellation, or reclassification would alter or abolish the 1375 Statutes, is amended to read:
1347 shareholder’s voting rights or alter his, or her, or its 1376 607.1303 Assertion of rights by nominees and beneficial
1348 percentage of equity in the corporation, or effecting a 1377 owners.—
1349 reduction or cancellation of accrued dividends or other 1378 (1) A record shareholder may assert appraisal rights as to
1350 arrearages in respect to such shares; 1379 fewer than all the shares registered in the record shareholder’s
1351 4. Reducing the stated redemption price of any of the 1380 name but owned by a beneficial shareholder or a voting trust
1352 shareholder’s redeemable shares, altering or abolishing any 1381 beneficial owner only if the record shareholder objects with
1353 provision relating to any sinking fund for the redemption or 1382 respect to all shares of the class or series owned by the
1354 purchase of any of his, or her, or its shares, or making any of 1383 beneficial shareholder or the a voting trust beneficial owner
1355 his, or her, or its shares subject to redemption when they are 1384 and notifies the corporation in writing of the name and address
1356 not otherwise redeemable; 1385 of each beneficial shareholder or voting trust beneficial owner
1357 5. Making noncumulative, in whole or in part, dividends of 1386 on whose behalf appraisal rights are being asserted. The rights
1358 any of the shareholder’s preferred shares which had theretofore 1387 of a record shareholder who asserts appraisal rights for only
1359 been cumulative; 1388 part of the shares held of record in the record shareholder’s
1360 6. Reducing the stated dividend preference of any of the 1389 name under this subsection shall be determined as if the shares
1361 shareholder’s preferred shares; or 1390 as to which the record shareholder objects and the record
1362 7. Reducing any stated preferential amount payable on any 1391 shareholder’s other shares were registered in the names of
1363 of the shareholder’s preferred shares upon voluntary or 1392 different record shareholders.
Page 47 of 72 Page 48 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
1393 Section 45. Subsection (1) of section 607.1320, Florida 1422 to be paid for the shares, which right the corporation shall be
1394 Statutes, is amended to read: 1423 obliged to satisfy when the restrictions of this section do not
1395 607.1320 Notice of appraisal rights.— 1424 apply.
1396 (1) If a proposed corporate action described in s. 1425 Section 47. Subsection (1) of section 607.1340, Florida
1397 607.1302(1) is to be submitted to a vote at a shareholders’ 1426 Statutes, is amended to read:
1398 meeting, the meeting notice (or, where no approval of such 1427 607.1340 Other remedies limited.—
1399 action is required pursuant to s. 607.11035, the offer made 1428 (1) A shareholder entitled to appraisal rights under this
1400 pursuant to s. 607.11035), must state that the corporation has 1429 chapter may not challenge a completed corporate action for which
1401 concluded that shareholders are, are not, or may be entitled to 1430 appraisal rights are available unless such corporate action was
1402 assert appraisal rights under this chapter. If the corporation 1431 either:
1403 concludes that appraisal rights are or may be available, a copy 1432 (a) Not authorized and approved in accordance with the
1404 of ss. 607.1301-607.1340 must accompany the meeting notice or 1433 applicable provisions of this chapter; or
1405 offer sent to those record shareholders entitled to exercise 1434 (b) Procured as a result of fraud, a material
1406 appraisal rights. 1435 misrepresentation, or an omission of a material fact necessary
1407 Section 46. Subsection (1) of section 607.1333, Florida 1436 to make statements made, in light of the circumstances in which
1408 Statutes, is amended to read: 1437 they were made, not misleading.
1409 607.1333 Limitation on corporate payment.— 1438 Section 48. Subsection (3) of section 607.1403, Florida
1410 (1) No payment shall be made to a shareholder seeking 1439 Statutes, is amended to read:
1411 appraisal rights if, at the time of payment, the corporation is 1440 607.1403 Articles of dissolution.—
1412 unable to meet the distribution standards of s. 607.06401. In 1441 (3) For purposes of ss. 607.1401-607.1410, the term
1413 such event, the shareholder shall, at the shareholder’s option: 1442 “dissolved corporation” means a corporation whose articles of
1414 (a) Withdraw his, or her, or its notice of intent to assert 1443 dissolution have become effective and includes a successor
1415 appraisal rights, which shall in such event be deemed withdrawn 1444 entity. Further, for the purposes of this subsection, the term
1416 with the consent of the corporation; or 1445 “successor entity” includes a trust, receivership, or other
1417 (b) Retain his, or her, or its status as a claimant against 1446 legal entity governed by the laws of this state to which the
1418 the corporation and, if it is liquidated, be subordinated to the 1447 remaining assets and liabilities of a dissolved corporation are
1419 rights of creditors of the corporation, but have rights superior 1448 transferred and which exists solely for the purposes of
1420 to the shareholders not asserting appraisal rights, and if the 1449 prosecuting and defending suits by or against the dissolved
1421 corporation is not liquidated, retain his, or her, or its right 1450 corporation, thereby enabling the dissolved corporation to
Page 49 of 72 Page 50 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
1451 settle and close the business of the dissolved corporation, to 1480 then owed by the corporation at the rates provided by law laws
1452 dispose of and convey the property of the dissolved corporation, 1481 at the time the corporation applies for reinstatement, together
1453 to discharge the liabilities of the dissolved corporation, and 1482 with an application for reinstatement prescribed and furnished
1454 to distribute to the dissolved corporation’s shareholders any 1483 by the department, which is signed by both the registered agent
1455 remaining assets, but not for the purpose of continuing the 1484 and an officer or director of the corporation and states:
1456 activities and affairs for which the dissolved corporation was 1485 (a) The name of the corporation;
1457 organized. 1486 (b) The street address of the corporation’s principal
1458 Section 49. Paragraph (a) of subsection (5) of section 1487 office and mailing address;
1459 607.1406, Florida Statutes, is amended to read: 1488 (c) The date of the corporation’s organization;
1460 607.1406 Known claims against dissolved corporation.— 1489 (d) The corporation’s federal employer identification
1461 (5)(a) For purposes of ss. 607.1401-607.1410, the term this 1490 number or, if none, whether one has been applied for;
1462 section, “known claims” means any claim or liability that, as of 1491 (e) The name, title or capacity, and address of at least
1463 the date of the giving of the written notice contemplated by 1492 one officer or director of the corporation; and
1464 subsections (1) and (2): 1493 (f) Additional information that is necessary or appropriate
1465 1. Has matured sufficiently on or prior to the effective 1494 to enable the department to carry out this chapter.
1466 date of the dissolution to be legally capable of assertion 1495 (6) If the name of the dissolved corporation has been
1467 against the dissolved corporation; or 1496 lawfully assumed in this state by another eligible business
1468 2. Is unmatured as of the effective date of the dissolution 1497 entity, the department shall require the dissolved corporation
1469 but will mature in the future solely based on the passage of 1498 to amend its articles of incorporation to change its name before
1470 time. 1499 accepting its application for reinstatement.
1471 Section 50. Subsections (1) and (6) of section 607.1422, 1500 Section 51. Subsection (1), paragraph (b) of subsection
1472 Florida Statutes, are amended to read: 1501 (3), and subsection (4) of section 607.1430, Florida Statutes,
1473 607.1422 Reinstatement following administrative 1502 are amended to read:
1474 dissolution.— 1503 607.1430 Grounds for judicial dissolution.—
1475 (1) A corporation that is administratively dissolved under 1504 (1) A circuit court may dissolve a corporation or order
1476 s. 607.1420 or that was dissolved under former s. 607.1421 1505 such other remedy as provided in s. 607.1434:
1477 before January 1, 2020, may apply to the department for 1506 (a) In a proceeding by the Department of Legal Affairs to
1478 reinstatement at any time after the effective date of 1507 dissolve a corporation if it is established that:
1479 dissolution. The corporation must submit all fees and penalties 1508 1. The corporation obtained its articles of incorporation
Page 51 of 72 Page 52 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
1509 through fraud; or 1538 that:
1510 2. The corporation has continued to exceed or abuse the 1539 1. The creditor’s claim has been reduced to judgment, the
1511 authority conferred upon it by law. 1540 execution on the judgment returned unsatisfied, and the
1512 1541 corporation is insolvent; or
1513 The enumeration in subparagraphs 1. and 2. of grounds for 1542 2. The corporation has admitted in writing that the
1514 involuntary dissolution does not exclude actions or special 1543 creditor’s claim is due and owing and the corporation is
1515 proceedings by the Department of Legal Affairs or any state 1544 insolvent;
1516 official for the annulment or dissolution of a corporation for 1545 (d) In a proceeding by the corporation to have its
1517 other causes as provided in any other statute of this state; 1546 voluntary dissolution continued under court supervision; or
1518 (b) In a proceeding by a shareholder to dissolve a 1547 (e) In a proceeding by a shareholder if the corporation has
1519 corporation if it is established that: 1548 abandoned its business and has failed within a reasonable period
1520 1. The directors are deadlocked in the management of the 1549 of time to liquidate and distribute its assets and dissolve.
1521 corporate affairs, the shareholders are unable to break the 1550 (3)
1522 deadlock, and: 1551 (b) For purposes of As used in this section, the term
1523 a. Irreparable injury to the corporation is threatened or 1552 “deadlock sale provision” means a provision in a shareholder
1524 being suffered; 1553 agreement that complies with s. 607.0732, which is or may be
1525 b. The business and affairs of the corporation can no 1554 applicable in the event of a deadlock among the directors or
1526 longer be conducted to the advantage of the shareholders 1555 shareholders of the corporation, which neither the directors nor
1527 generally because of the deadlock; or 1556 the shareholders, as applicable, of the corporation are able to
1528 c. Both sub-subparagraphs a. and b.; or 1557 break,; and which provides for a deadlock breaking mechanism,
1529 2. The shareholders are deadlocked in voting power and have 1558 including, but not limited to:
1530 failed to elect successors to directors whose terms have expired 1559 1. A redemption or a purchase and sale of shares or other
1531 or would have expired upon qualification of their successors; 1560 equity securities;
1532 3. The corporate assets are being misapplied or wasted, 1561 2. A governance change;
1533 causing material injury to the corporation; or 1562 3. A sale of the corporation or all or substantially all of
1534 4. The directors or those in control of the corporation 1563 the assets of the corporation; or
1535 have acted, are acting, or are reasonably expected to act in a 1564 4. A similar provision that, if initiated and effectuated,
1536 manner that is illegal or fraudulent; 1565 breaks the deadlock by causing the transfer of the shares or
1537 (c) In a proceeding by a creditor if it is established 1566 other equity securities, a governance change, or a sale of the
Page 53 of 72 Page 54 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
1567 corporation or all or substantially all of the corporation’s 1596 continued, or participated in a proceeding under s. 607.1430 and
1568 assets. 1597 has acted arbitrarily, frivolously, vexatiously, or not in good
1569 (4) A deadlock sale provision in a shareholder agreement 1598 faith, the court may, in its discretion, award attorney fees and
1570 that which complies with s. 607.0732 which is not initiated and 1599 other reasonable expenses to the other parties to the proceeding
1571 effectuated before the court enters an order of judicial 1600 action who have been affected adversely by such actions.
1572 dissolution under subparagraph (1)(b)1. or subparagraph 1601 Section 53. Subsection (5) of section 607.1432, Florida
1573 (1)(b)2., as the case may be, or an order directing the purchase 1602 Statutes, is amended to read:
1574 of petitioner’s interest under s. 607.1436, does not adversely 1603 607.1432 Receivership or custodianship.—
1575 affect the rights of shareholders to seek judicial dissolution 1604 (5) The court from time to time during the receivership or
1576 under subparagraph (1)(b)1. or subparagraph (1)(b)2., as the 1605 custodianship may order compensation paid and expense
1577 case may be, or the rights of the corporation or one or more 1606 disbursements or reimbursements made to any the receiver or
1578 shareholders to purchase the petitioner’s interest under s. 1607 custodian and his, her, or its counsel from the assets of the
1579 607.1436. The filing of an action for judicial dissolution on 1608 corporation or proceeds from the sale of the assets.
1580 the grounds described in subparagraph (1)(b)1. or subparagraph 1609 Section 54. Section 607.14401, Florida Statutes, is amended
1581 (1)(b)2., as the case may be, or an election to purchase the 1610 to read:
1582 petitioner’s interest under s. 607.1436, does not adversely 1611 607.14401 Deposit with Department of Financial Services.—
1583 affect the right of a shareholder to initiate an available 1612 Assets of a dissolved corporation that should be transferred to
1584 deadlock sale provision under the shareholder agreement that 1613 a creditor, claimant, or shareholder of the corporation who
1585 complies with s. 607.0732 or to enforce a shareholder-initiated 1614 cannot be found or who is not competent to receive them shall be
1586 or an automatically-initiated deadlock sale provision if the 1615 reduced to cash and deposited with the Department of Financial
1587 deadlock sale provision is initiated and effectuated before the 1616 Services for safekeeping. When the creditor, claimant, or
1588 court enters an order of judicial dissolution under subparagraph 1617 shareholder furnishes satisfactory proof of entitlement to the
1589 (1)(b)1. or subparagraph (1)(b)2., as the case may be, or an 1618 amount or assets deposited, the Department of Financial Services
1590 order directing the purchase of petitioner’s interest under s. 1619 shall pay such person or his, or her, or its representative that
1591 607.1436. 1620 amount.
1592 Section 52. Subsection (5) of section 607.1431, Florida 1621 Section 55. Paragraphs (c), (h), and (k) of subsection (2)
1593 Statutes, is amended to read: 1622 of section 607.1501, Florida Statutes, are amended to read:
1594 607.1431 Procedure for judicial dissolution.— 1623 607.1501 Authority of foreign corporation to transact
1595 (5) If the court determines that any party has commenced, 1624 business required; activities not constituting transacting
Page 55 of 72 Page 56 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
1625 business.— 1654 rights of action arising out of the transaction of business in
1626 (2) The following activities, among others, do not 1655 this state.
1627 constitute transacting business within the meaning of subsection 1656 Section 57. Subsection (2) of section 607.1503, Florida
1628 (1): 1657 Statutes, is amended to read:
1629 (c) Maintaining bank accounts in financial institutions. 1658 607.1503 Application for certificate of authority.—
1630 (h) Securing or collecting debts or enforcing mortgages or 1659 (2) The foreign corporation shall deliver with a completed
1631 security interests in property securing the debts, or and 1660 application under subsection (1) a certificate of existence or a
1632 holding, protecting, or maintaining property so acquired. 1661 record of similar import, duly authenticated, not more than 90
1633 (k) Owning and controlling a subsidiary corporation 1662 days prior to delivery of the application to the department,
1634 incorporated in or limited liability company formed in, or 1663 signed by the official having custody of the foreign
1635 transacting business within, this state; or voting the shares of 1664 corporation’s publicly filed records in its jurisdiction of
1636 any such subsidiary corporation; or voting the membership 1665 incorporation. A translation of the certificate, under oath of
1637 interests of any such limited liability company, which it has 1666 the translator, must be attached to a certificate which is in a
1638 lawfully acquired. 1667 language other than the English language.
1639 Section 56. Subsections (3) and (8) of section 607.1502, 1668 Section 58. Paragraph (c) of subsection (1) and paragraph
1640 Florida Statutes, are amended to read: 1669 (c) of subsection (2) of section 607.1504, Florida Statutes, are
1641 607.1502 Effect of failure to have a certificate of 1670 amended to read:
1642 authority.— 1671 607.1504 Amended certificate of authority.—
1643 (3) A court may stay a proceeding commenced by a foreign 1672 (1) A foreign corporation authorized to transact business
1644 corporation or its successor or assignee until it determines 1673 in this state shall deliver for filing an amendment to its
1645 whether the foreign corporation or its successor or assignee 1674 certificate of authority to reflect a change in any of the
1646 requires a certificate of authority. If it so determines, the 1675 following:
1647 court may further stay the proceeding until the foreign 1676 (c) The name and street address in this state of the
1648 corporation or its successor or assignee has obtained a 1677 foreign corporation’s registered agent in this state, unless the
1649 certificate of authority to transact business in this state. 1678 change was timely made in accordance with s. 607.1508 or s.
1650 (8) If a foreign corporation transacts business in this 1679 607.15091 s. 607.0502 or s. 607.05031.
1651 state without a certificate of authority or cancels its 1680 (2) The amendment must be filed within 90 days after the
1652 certificate of authority, it appoints the secretary of state as 1681 occurrence of a change described in subsection (1), must be
1653 its agent for service of process in proceedings and actions for 1682 signed by an officer of the foreign corporation, and must state
Page 57 of 72 Page 58 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
1683 the following: 1712 (3) A registered agent is terminated upon the earlier of:
1684 (c) The date the foreign corporation was authorized to 1713 (a) The 31st day after the department files the statement
1685 transact do business in this state. 1714 of resignation; or
1686 Section 59. Subsection (1) of section 607.1505, Florida 1715 (b) When a statement of change or other record designating
1687 Statutes, is amended to read: 1716 a new registered agent is filed with by the department.
1688 607.1505 Effect of a certificate of authority.— 1717 Section 62. Subsection (1) of section 607.15091, Florida
1689 (1) Unless the department determines that than an 1718 Statutes, is amended to read:
1690 application for a certificate of authority of a foreign 1719 607.15091 Change of name or address by registered agent.—
1691 corporation to transact business in this state does not comply 1720 (1) If a registered agent changes his, or her, or its name
1692 with the filing requirements of this chapter, the department 1721 or address, the agent may deliver to the department for filing a
1693 shall, upon payment of all filing fees, authorize the foreign 1722 statement of change containing the following:
1694 corporation to transact business in this state and file the 1723 (a) The name of the foreign corporation represented by the
1695 application for certificate of authority. 1724 registered agent.
1696 Section 60. Subsection (3) of section 607.1507, Florida 1725 (b) The name of the registered agent as currently shown in
1697 Statutes, is amended to read: 1726 the records of the department for the corporation.
1698 607.1507 Registered office and registered agent of foreign 1727 (c) If the name of the registered agent has changed, his,
1699 corporation.— 1728 her, or its new name.
1700 (3) Each initial registered agent, and each successor 1729 (d) If the address of the registered agent has changed, the
1701 registered agent that is appointed, shall file a statement in 1730 new address.
1702 writing with the department, in the form and manner prescribed 1731 (e) A statement that the registered agent has given the
1703 by the department, accepting the appointment as a registered 1732 notice required under subsection (2).
1704 agent while simultaneously being designated as the registered 1733 Section 63. Subsection (7) of section 607.15101, Florida
1705 agent. The statement of acceptance must provide that the 1734 Statutes, is amended to read:
1706 registered agent is familiar with, and accepts, the obligations 1735 607.15101 Service of process, notice, or demand on a
1707 of that position. 1736 foreign corporation.—
1708 Section 61. Subsection (3) of section 607.1509, Florida 1737 (7) Any notice or demand on a foreign corporation under
1709 Statutes, is amended to read: 1738 this chapter may be given or made: to the chair of the board,
1710 607.1509 Resignation of registered agent of foreign 1739 the president, any vice president, the secretary, or the
1711 corporation.— 1740 treasurer of the foreign corporation; to the registered agent of
Page 59 of 72 Page 60 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
1741 the foreign corporation at the registered office of the foreign 1770 corporation established under s. 607.0825, if the shareholder
1742 corporation in this state; or to any other address in this state 1771 gives the corporation written notice of the shareholder’s demand
1743 that is in fact the principal office of the foreign corporation 1772 at least 5 business days before the date on which the
1744 in this state. 1773 shareholder wishes to inspect and copy.
1745 Section 64. Paragraph (e) of subsection (1) of section 1774 (2) A shareholder of a corporation is entitled to inspect
1746 607.1520, Florida Statutes, is amended to read: 1775 and copy, during regular business hours at a reasonable location
1747 607.1520 Withdrawal and cancellation of certificate of 1776 specified by the corporation, any of the following records of
1748 authority for foreign corporation.— 1777 the corporation if the shareholder meets the requirements of
1749 (1) To cancel its certificate of authority to transact 1778 subsection (3) and gives the corporation written notice of the
1750 business in this state, a foreign corporation must deliver to 1779 shareholder’s demand at least 5 business days before the date on
1751 the department for filing a notice of withdrawal of certificate 1780 which the shareholder wishes to inspect and copy:
1752 of authority. The certificate of authority is canceled when the 1781 (a) Excerpts from minutes of any meeting of, or records of
1753 notice of withdrawal becomes effective pursuant to s. 607.0123. 1782 any actions taken without a meeting by, the corporation’s board
1754 The notice of withdrawal of certificate of authority must be 1783 of directors and board committees of the corporation maintained
1755 signed by an officer or director and state the following: 1784 in accordance with s. 607.1601(1);
1756 (e) That the foreign corporation it revokes the authority 1785 (b) The financial statements of the corporation maintained
1757 of its registered agent to accept service on its behalf and 1786 in accordance with s. 607.1601(2);
1758 appoints the secretary of state as its agent for service of 1787 (c) Accounting records of the corporation;
1759 process based on a cause of action arising during the time it 1788 (d) The record of shareholders maintained in accordance
1760 was authorized to transact business in this state. 1789 with s. 607.1601(4); and
1761 Section 65. Subsections (1), (2), and (8) of section 1790 (e) Any other books and records.
1762 607.1602, Florida Statutes, are amended to read: 1791 (8) A corporation may deny any demand for inspection made
1763 607.1602 Inspection of records by shareholders.— 1792 pursuant to subsection (2) if the demand was made for an
1764 (1) A shareholder of a corporation is entitled to inspect 1793 improper purpose, or if the demanding shareholder has within 2
1765 and copy, during regular business hours at the corporation’s 1794 years preceding his, or her, or its demand sold or offered for
1766 principal office, any of the records of the corporation 1795 sale any list of shareholders of the corporation or any other
1767 described in s. 607.1601(1), excluding minutes of meetings of, 1796 corporation, has aided or abetted any person in procuring any
1768 and records of actions taken without a meeting by, the 1797 list of shareholders for any such purpose, or has improperly
1769 corporation’s board of directors and any board committees of the 1798 used any information secured through any prior examination of
Page 61 of 72 Page 62 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
1799 the records of the corporation or any other corporation. 1828 the confidentiality of, such records demanded to which the
1800 Section 66. Subsections (1) and (3) of section 607.1604, 1829 demanding shareholder had been unwilling to agree.
1801 Florida Statutes, are amended to read: 1830 Section 67. Subsections (2) and (4) of section 607.1622,
1802 607.1604 Court-ordered inspection.— 1831 Florida Statutes, are amended to read:
1803 (1) If a corporation does not allow a shareholder who 1832 607.1622 Annual report for department.—
1804 complies with s. 607.1602(1) to inspect and copy any records 1833 (2) If an annual report contains the name and address of a
1805 required by that subsection to be available for inspection, the 1834 registered agent which differs from the information shown in the
1806 circuit court in the applicable county may summarily order 1835 records of the department immediately before the annual report
1807 inspection and copying of the records demanded at the 1836 becomes effective, the differing information in the annual
1808 corporation’s expense upon application of the shareholder. If 1837 report is considered a statement of change under s. 607.0502 or
1809 the court orders inspection and copying of the records demanded 1838 s. 607.1508, as the case may be.
1810 under s. 607.1602(1) s. 607.1601(1), it shall also order the 1839 (4) The first annual report must be delivered to the
1811 corporation to pay the shareholder’s expenses, including 1840 department between January 1 and May 1 of the year following the
1812 reasonable attorney fees, incurred to obtain the order and 1841 calendar year in which a domestic corporation’s articles of
1813 enforce its rights under this section. 1842 incorporation became effective or a foreign corporation obtained
1814 (3) If the court orders inspection or and copying of the 1843 its certificate of authority to transact business in this state.
1815 records demanded under s. 607.1602(2), it may impose reasonable 1844 Subsequent annual reports must be delivered to the department
1816 restrictions on the disclosure, use, or distribution of, and 1845 between January 1 and May 1 of each calendar year thereafter. If
1817 reasonable obligations to maintain the confidentiality of, such 1846 one or more forms of annual report are submitted for a calendar
1818 records, and it shall also order the corporation to pay the 1847 year, the department shall file each of them and make the
1819 shareholder’s expenses incurred, including reasonable attorney 1848 information contained in them part of the official record. The
1820 fees, incurred to obtain the order and enforce its rights under 1849 first form of annual report filed in a calendar year shall be
1821 this section unless the corporation establishes that the 1850 considered the annual report for that the calendar year, and
1822 corporation refused inspection in good faith because the 1851 each report filed after that one in the same calendar year shall
1823 corporation had: 1852 be treated as an amended report for that calendar year.
1824 (a) A reasonable basis for doubt about the right of the 1853 Section 68. Section 607.1703, Florida Statutes, is created
1825 shareholder to inspect or copy the records demanded; or 1854 to read:
1826 (b) Required reasonable restrictions on the disclosure, 1855 607.1703 Interrogatories by department; other powers of
1827 use, or distribution of, and reasonable obligations to maintain 1856 department.—
Page 63 of 72 Page 64 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
1857 (1) The department may direct to any domestic corporation 1886 Department of Legal Affairs may deem appropriate, all
1858 or foreign corporation subject to this chapter, and to any 1887 interrogatories and answers that disclose a violation of this
1859 officer or director of any domestic corporation or foreign 1888 chapter.
1860 corporation subject to this chapter, interrogatories reasonably 1889 (3) The department may, based upon its findings under this
1861 necessary and proper to enable the department to ascertain 1890 section or as provided in s. 213.053(15), bring an action in
1862 whether the domestic corporation or foreign corporation has 1891 circuit court to collect any penalties, fees, or taxes
1863 complied with the provisions of this chapter applicable to the 1892 determined to be due and owing the state and to compel any
1864 domestic corporation or foreign corporation. The interrogatories 1893 filing, qualification, or registration required by law. In
1865 must be answered within 30 days after the date of mailing, or 1894 connection with such proceeding, the department may, without
1866 within such additional time as fixed by the department. The 1895 prior approval by the court, file a lis pendens against any
1867 answers to the interrogatories must be full and complete and 1896 property owned by the corporation and may further certify any
1868 must be made in writing and under oath. If the interrogatories 1897 findings to the Department of Legal Affairs for the initiation
1869 are directed to an individual, they must be answered by the 1898 of an action permitted pursuant to this chapter which the
1870 individual, and if directed to a domestic corporation or foreign 1899 Department of Legal Affairs may deem appropriate.
1871 corporation, they must be answered by an officer or director of 1900 (4) The department has the power and authority reasonably
1872 the domestic corporation or foreign corporation, by a 1901 necessary to administer this chapter efficiently, to perform the
1873 shareholder if there are no officers or directors of the 1902 duties herein imposed upon it, and to adopt reasonable rules
1874 domestic corporation or foreign corporation, or by a fiduciary 1903 necessary to carry out its duties and functions under this
1875 if the corporation is in the hands of a receiver, trustee, or 1904 chapter.
1876 other court-appointed fiduciary. 1905 Section 69. Section 607.1907, Florida Statutes, is amended
1877 (2) The department need not file a record in a court of 1906 to read:
1878 competent jurisdiction to which the interrogatories relate until 1907 607.1907 Saving provision.—
1879 the interrogatories are answered as provided in this chapter, 1908 (1) Except as to procedural provisions, chapter 2019-90,
1880 and is not required to file a record if the answers disclose 1909 Laws of Florida, this act does not affect a pending action or
1881 that the record is not in conformity with the requirements of 1910 proceeding or a right accrued before January 1, 2020, and a
1882 this chapter or if the department has determined that the 1911 pending civil action or proceeding may be completed, and a right
1883 parties to such document have not paid all fees, taxes, and 1912 accrued may be enforced, as if chapter 2019-90, Laws of Florida,
1884 penalties due and owing this state. The department shall certify 1913 this act had not become effective.
1885 to the Department of Legal Affairs, for such action as the 1914 (2) If a penalty or punishment for violation of a statute
Page 65 of 72 Page 66 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
1915 or rule is reduced by chapter 2019-90, Laws of Florida, this 1944 Section 72. Subsections (2) and (7) of section 605.0207,
1916 act, the penalty or punishment, if not already imposed, shall be 1945 Florida Statutes, are amended to read:
1917 imposed in accordance with chapter 2019-90, Laws of Florida this 1946 605.0207 Effective date and time.—Except as otherwise
1918 act. 1947 provided in s. 605.0208, and subject to s. 605.0209(3), any
1919 Section 70. Subsection (3) of section 607.504, Florida 1948 document delivered to the department for filing under this
1920 Statutes, is amended to read: 1949 chapter may specify an effective time and a delayed effective
1921 607.504 Election of social purpose corporation status.— 1950 date. In the case of initial articles of organization, a prior
1922 (3) If an entity elects to become a social purpose 1951 effective date may be specified in the articles of organization
1923 corporation by amendment of the articles of incorporation or by 1952 if such date is within 5 business days before the date of
1924 a merger, domestication, conversion, or share exchange, the 1953 filing. Subject to ss. 605.0114, 605.0115, 605.0208, and
1925 shareholders of the entity are entitled to appraisal rights 1954 605.0209, a record filed by the department is effective:
1926 under and pursuant to ss. 607.1301-607.1340. 1955 (2) If the record filed specifies an effective time, but
1927 Section 71. Subsection (1) of section 605.0116, Florida 1956 not a prior or delayed effective date, on the date the record is
1928 Statutes, is amended to read: 1957 accepted, as evidenced by the department’s endorsement, and
1929 605.0116 Change of name or address by registered agent.— 1958 filed at the time specified in the filing.
1930 (1) If a registered agent changes his, or her, or its name 1959 (7) If the record filed a filed document does not specify
1931 or address, the agent may deliver to the department for filing a 1960 the time zone or place at which the date or time, or both, is to
1932 statement of change that provides the following: 1961 be determined, the date or time, or both, at which it becomes
1933 (a) The name of the limited liability company or foreign 1962 effective shall be those prevailing at the place of filing in
1934 limited liability company represented by the registered agent. 1963 this state.
1935 (b) The name of the registered agent as currently shown in 1964 Section 73. Section 605.0215, Florida Statutes, is amended
1936 the records of the department for the limited liability company 1965 to read:
1937 or foreign limited liability company. 1966 605.0215 Certificates to be received in evidence and
1938 (c) If the name of the registered agent has changed, his, 1967 evidentiary effect of certified copy of filed document.—All
1939 her, or its new name. 1968 certificates issued by the department in accordance with this
1940 (d) If the address of the registered agent has changed, the 1969 chapter shall be taken and received in all courts, public
1941 new address. 1970 offices, and official bodies as prima facie evidence of the
1942 (e) A statement that the registered agent has given the 1971 facts stated. A certificate from the department delivered with a
1943 notice required under subsection (2). 1972 copy of a document filed by the department bearing the signature
Page 67 of 72 Page 68 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
1973 of the secretary of state, which may be in facsimile, and the 2002 must contain a copy of the department’s notice of administrative
1974 seal of this state, is conclusive evidence that the original 2003 dissolution, the company’s application for reinstatement, and
1975 document is on file with the department. 2004 the department’s notice of denial.
1976 Section 74. Paragraph (b) of subsection (2) of section 2005 Section 76. Subsection (1) of section 617.0501, Florida
1977 605.0702, Florida Statutes, is amended to read: 2006 Statutes, is amended to read:
1978 605.0702 Grounds for judicial dissolution.— 2007 617.0501 Registered office and registered agent.—
1979 (2) 2008 (1) Each corporation shall have and continuously maintain
1980 (b) For purposes of As used in this section, the term 2009 in this state:
1981 “deadlock sale provision” means a provision in an operating 2010 (a) A registered office which may be the same as its
1982 agreement which is or may be applicable in the event of a 2011 principal office; and
1983 deadlock among the managers or the members of the limited 2012 (b) A registered agent, who may be either:
1984 liability company which the members of the company are unable to 2013 1. An individual who resides in this state whose business
1985 break and which provides for a deadlock breaking mechanism, 2014 office is identical with such registered office; or
1986 including, but not limited to: 2015 2.a. Another domestic entity that is an authorized entity
1987 1. A redemption or a purchase and sale of interests; 2016 whose business address is identical to the address of the
1988 2. A governance change, among or between members; 2017 registered office;, or
1989 3. The sale of the company or all or substantially all of 2018 b. A foreign entity authorized to transact business in this
1990 the assets of the company; or 2019 state that is an authorized entity and whose business address is
1991 4. A similar provision that, if initiated and effectuated, 2020 identical to the address of the registered office.
1992 breaks the deadlock by causing the transfer of interests, a 2021 Section 77. Section 617.0825, Florida Statutes, is amended
1993 governance change, or the sale of all or substantially all of 2022 to read:
1994 the company’s assets. 2023 617.0825 Board committees and advisory committees.—
1995 Section 75. Subsection (2) of section 605.0716, Florida 2024 (1) Unless the articles of incorporation or the bylaws
1996 Statutes, is amended to read: 2025 otherwise provide, the board of directors, by resolution adopted
1997 605.0716 Judicial review of denial of reinstatement.— 2026 by a majority of the full board of directors, may create an
1998 (2) Within 30 days after service of a notice of denial of 2027 executive committee and one or more other committees of the
1999 reinstatement, a limited liability company may appeal the denial 2028 board and appoint directors or such other persons as the board
2000 by petitioning the Circuit Court of Leon County to set aside the 2029 of directors designates to serve on such committee or
2001 dissolution. The petition must be served on the department and 2030 committees. The majority of the persons on each committee must
Page 69 of 72 Page 70 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 838 Florida Senate - 2020 SB 838
9-00311B-20 2020838__ 9-00311B-20 2020838__
2031 be directors. 2060 serve at the pleasure of the board of directors. The board, by
2032 (2) Notwithstanding subsection (1), a board committee may 2061 resolution adopted in accordance with and consistent with
2033 be composed of less than a majority of directors or entirely of 2062 subsection (1), may designate one or more directors as alternate
2034 non-directors if: 2063 members of any such committee who may act in the place and stead
2035 (a) The committee is created by the board of directors or 2064 of any absent member or members at any meeting of such
2036 is otherwise authorized by the articles of incorporation or the 2065 committee.
2037 bylaws; and 2066 (6) A committee member who is not a director has the same
2038 (b) The committee relates to the election, nomination, 2067 responsibility and fiduciary duties with respect to activities
2039 qualification, or credentials of directors or is involved in the 2068 of such committee, and the same liability protections, as a
2040 process of electing directors. designate from among its members 2069 committee member who is a director.
2041 an executive committee and one or more other committees each of 2070 (7)(4) Neither the designation of any such committee, the
2042 which, 2071 delegation thereto of authority, nor action by such committee
2043 (3) To the extent provided by the board of directors in a 2072 pursuant to such authority shall alone constitute compliance by
2044 such resolution or in the articles of incorporation or the 2073 any member of the board of directors not a member of the
2045 bylaws of the corporation, each such committee shall have and 2074 committee in question with his or her responsibility to act in
2046 may exercise powers and all the authority of the board of 2075 good faith, in a manner he or she reasonably believes to be in
2047 directors, except that no such committee shall have the power or 2076 the best interests of the corporation, and with such care as an
2048 authority to: 2077 ordinarily prudent person in a like position would use under
2049 (a) Approve or recommend to members actions or proposals 2078 similar circumstances.
2050 required by this act to be approved by members. 2079 (8) A corporation may create or authorize the creation of
2051 (b) Fill vacancies on the board of directors or any 2080 one or more advisory committees with any number of persons on
2052 committee thereof. 2081 the committee being non-directors. An advisory committee:
2053 (c) Adopt, amend, or repeal the bylaws. 2082 (a) Is not a committee of the board of directors; and
2054 (4)(2) Unless the articles of incorporation or the bylaws 2083 (b) May not act on behalf of or exercise any of the powers
2055 provide otherwise, ss. 617.0820, 617.0822, 617.0823, and 2084 or authority of the board of directors or bind the corporation
2056 617.0824, which govern meetings, notice and waiver of notice, 2085 to any action, but may make recommendations to the board of
2057 and quorum and voting requirements of the board of directors, 2086 directors, to the officers, or to the members.
2058 apply to committees and their members as well. 2087 Section 78. This act shall take effect upon becoming a law.
2059 (5)(3) Each committee must have two or more members who
Page 71 of 72 Page 72 of 72
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Proposed Modifications to Chapter 607
(Florida Business Corporation Act)
January 24, 2019
The Florida Bar Business Law Section ("Section") has a long history of proposing entity statutes
for our state. The Section comprehensively updated and modernized Florida's corporate statute in
the late 1980s, updated Florida's partnership statute in the mid 1990s, updated Florida's limited
partnership statute in the early 2000s, and updated Florida's LLC statute in the late 1990s and, in
a far more comprehensive fashion, in 2013, and the Section is now – once again – proposing to
update and modernize Florida's corporate statute.
Florida is a Model Act/Uniform Laws state with respect to its entity statutes, but unlike Delaware,
for example, the Section is not in a position to propose and pursue significant changes to our State's
entity statutes on a year-in and year-out basis. Thus, the Section's efforts to update and modernize
the State's entity statutes have tended to be to present large comprehensive bills to replace older
entity statutes with updated and modernized ones. That is not to say that the Section has not
previously made proposals to update and modernize provisions of the Florida Business
Corporation Act ("FBCA"), but that these previous efforts since 1989 have generally been on
selected topics and have not been on a comprehensive basis.
When it comes to for-profit corporations in Florida, Florida generally follows the revised Model
Business Corporation Act (the "MBCA" or the "Model Act"), which is promulgated by the
Corporate Laws Committee of the ABA Business Law Section. Although the Model Act has
changed extensively over the past thirty-five years, Chapter 607 has been overhauled only once
(in 1989) and otherwise has endured patchwork amendments, with more significant changes in
1996 and 2003. Recently, in 2016, the MBCA itself was updated and modernized in its entirety.
For all of these reasons, it has been deemed a necessity to consider comprehensively amending
Florida's corporate statute so that Florida keeps pace with modern statutory developments relating
to corporations.
There are a large number of entities organized in Florida. At the beginning of 2018, Florida had
760,000 corporations and almost 1.2 million limited liability companies in existence - probably
more than any other state – growing at the rate of about 100,000 new corporations and more than
250,000 new LLCs per year (while the net growth is smaller, because many corporations and LLCs
are dissolved each year, it is still significant growth under any circumstances). Because so many
of the users of Florida's entity statutes are private companies, Florida's entity laws have tended to
be as proscriptive as possible to offer clarity in our law for users that range from non-lawyers, to
lawyers who are not necessary experts in entity matters, and to judges, all of whom are able to
benefit from the proscriptive guidance in our State's entity statutes.
In 2014, a drafting task force (the "Drafting Subcommittee" or the "Subcommittee") was organized
under the auspices of the Corporations, Securities and Financial Services Committee of the Section
to make recommendations as to proposed changes to the FBCA. The Drafting Subcommittee's
mission statement was to comprehensively study Florida’s business corporation statute and to
propose a more cohesive revision and set of amendments with the purpose of (i) bringing Florida's
business corporation statute in line with the revisions to the MBCA and the trends affecting the
use of corporations by businesses today, (ii) maintaining Florida’s competiveness with other
jurisdictions, (iii) seeking to fix issues presented by the existing statute that have been experienced
by practitioners in practice and in litigating disputes concerning the operations of Florida
corporations, and (iv) continuing to encourage formation and use of Florida corporations, where
appropriate.
The proposal includes changes to Chapter 607 of the Florida Statutes, harmonizing changes to
other Florida entity statutes to make them consistent with revised Chapter 607, and necessary
corrections to cross references appearing in other Chapter 607 sections and in other Florida
Statutes (the "Updated Act").
The following bullet point summary of the Updated Act has been prepared by the co-chairs of the
Subcommittee to facilitate the review of the proposed statute by interested persons. References in
this bullet point summary to "Existing Law" refer to existing Chapter 607 of the Florida Statutes.
References to "Updated Act" refer to Chapter 607, and to certain corresponding, mirror and/or
related provisions of certain other chapters of the Florida Statutes, as proposed to be revised.
Unlike the recent revision to Florida’s limited liability company statute, where Chapter 608 was
replaced entirely by Chapter 605, the proposed revisions to the FBCA, although extensive, are all
being made within existing Chapter 607 of the Florida Statutes.
The proposal contemplates that if it is passed by the Florida legislature during the 2019 legislative
session, it will become effective for all Florida corporations as of January 1, 2020.
OVERVIEW OF THE UPDATED ACT
The Updated Act follows, for the most part, the 2016 version of the Model Act, yet deviates in a
number of respects by:
(i) retaining certain non-Model Act provisions already contained in existing Chapter 607;
(ii) borrowing language from the Delaware General Corporation Law ("DGCL"); and
(iii)borrowing parallel language and approaches from the Florida Revised Limited Liability
Company Act ("FRLLCA") for purposes of harmonizing the two statutes on issues where
harmonization is considered appropriate.
The Updated Act introduces more definitions than were set forth in Existing Law, many of which
are necessary because of new provisions not contained in Existing Law. The Updated Act also
updates and tries to become more consistent in the use of certain defined terms and terminology
(such as references to the "department" and the "chapter" and the use of the term "signed" rather
than "executed").
Some of the more important changes reflected in the Updated Act are as follows:
Clarifies the extent to which plans and filed documents can be dependent on facts
objectively ascertainable outside a plan or filed document;
2
Modifies and expands the terms as to the date and time when a filed document under
Chapter 607 is effective, paralleling (for the most part) the comparable provision in
FRLLCA;
Modifies the provisions relating to correcting filed documents, such that corrections can be
filed at any time and will no longer be limited to the 30 day period following the initial
filing;
In several places, and at the request of the Florida Department of State, Division of
Corporations (the "Department"), modifies the proper jurisdiction for bringing actions
against the Florida Department of State from the county where a corporation’s principal
place of business is located to Leon County, Florida;
Harmonizes the specifics to be contained in a certificate of status with how the Department
currently operates, paralleling (for the most part) the comparable provision in FRLLCA;
Updates definitions of "electronic," "electronic record," "electronic transmission,"
"record," and "sign" and methods of giving, transmitting and delivering notice to be more
in tune with current and anticipated electronic technology;
Adds the concept of "qualified director" to identify who should be considered a truly
independent director for purposes of the updated derivative action provisions, the updated
director conflict of interest provisions, and the updated indemnification provisions;
Consistent with what has been considered implicit under the Existing Law (but was not
expressly stated), expressly authorizes Articles of Incorporation and/or bylaws to include
exclusive forum provisions relative to proceedings addressing internal corporate claims;
Expressly prohibits provisions in Articles of Incorporation or in bylaws purporting to
impose liability upon a shareholder for attorneys’ fees or expenses in connection with an
internal corporate claim proceeding, but allows such provisions to be included in a
shareholders’ agreement that complies with the requirements of s. 607.0732 of the FBCA;
Makes it expressly clear that proxy access provisions in corporate bylaws are permissible;
Adds language to expressly authorize a corporation (consistent with current Department
practice) to adopt an otherwise prohibited name if written consent from the other entity
using that name is obtained and filed and the names are not identical;
Adds back the concept of a short term reservation of a corporate name prior to
incorporation, which was removed from the statute in 1998;
Expands the types of entities that can serve as a registered agent for a corporation,
paralleling the comparable provision in FRLLCA (for the most part);
Updates service of process provisions for corporations;
3
Authorizes boards of directors to delegate to committees and/or any officers authorization
to issue equity compensation awards, without specifying limits;
Updates provisions dealing with participation in meetings by way of remote
communications in order to take into account existing and future technological
developments;
Expressly allows for bi-furcated record dates for shareholders meetings (i.e., who gets
notice vs. who gets to vote);
Consistent with what has been considered implicit under the Existing Law (but was not
expressly stated), expressly states that the failure to provide the 10-day notice of an action
taken by written consent does not invalidate or delay the effectiveness of the action taken;
Seeks to clarify obligations with respect to the maintaining of, and rights to access,
shareholder lists;
Clarifies when shares of a corporation are considered owned by that corporation and thus
not entitled to a vote;
Changes the language used to identify public companies by keying into corporations with
shares registered under section 12 of the Securities Exchange Act of 1934;
Adds a separate provision addressing in detail and, by way of guidance, the way in which
inspectors of election operate, particularly for public companies;
Through changes to section titles, clarifies that there is a difference between "voting
agreements" and "shareholders agreements;"
Eliminates the statutory restriction that shareholder agreements that change traditional
corporate norms can only be implemented by corporations with 100 or fewer shareholders;
Expressly validates fee shifting provisions in certain shareholders' agreements
unanimously adopted under s. 607.0732 of the FBCA;
In the context of what is not permitted to be included in shareholders' agreements that
change traditional corporate norms, removes the examples of what is considered contrary
to public policy, instead leaving that determination to the courts;
Clarifying what is considered the current law to the effect that, notwithstanding the
statutorily authorized shareholder agreements which require all shareholders to be parties
to be enforceable, agreements among selected groups of shareholders (yet less than all)
will still be enforceable between and among such contracting shareholders to the extent
otherwise valid under general contract law principles;
Provides greater detail and instruction for addressing derivative actions by expanding
provisions and breaking out the procedural aspects of derivative actions into seven separate
4
sections (addressing standing, the requirement to plead demand unless demand would be
futile, stay of proceedings, process for evaluating whether to dismiss the action,
discontinuance or settlement of the action, payment of expenses, and nonapplicability to
foreign corporations) and changing certain of those procedural aspects;
Adds statutory language expressly authorizing a court to appoint a custodian or receiver in
a proceeding by a shareholder, but outside the context of a dissolution proceeding and, as
for appointing a receiver, without any need to show insolvency;
Adds statutory language expressly authorizing the appointment by a court of a provisional
director in a proceeding by a shareholder where a deadlock exists and outside the context
of a dissolution proceeding;
Adds statutory language expressly authorizing a court to remove a director, in a derivative
proceeding, under certain specified circumstances;
Modifies how director vacancies in director positions that have been elected by a separate
voting group shall be filled;
Updates provisions relating to the composition, operation, and authority of board
committees, including authorizing board committees comprised of one board member and
modifying what actions cannot be delegated to a board committee;
Eliminates the provision in current law that imposes limits on the ability of a board of
directors to delegate the issuance or sale of shares, or the designation of relative rights
preferences and limitations of a voting group, to a Board committee, and instead authorizes
such ability to delegate without the need to establish parameters;
Clarifies the statutory language addressing director fiduciary duty standards and the
business judgment rule, but without intending to make any substantive change;
Adds an express authorization for a corporation to enter into an agreement containing a
"force the vote" provision;
Includes extensive modifications to the director conflicts of interest provision to match the
conflict of interest approach adopted in FRLLCA, and particularly to make clear that (i) an
"unfair" conflict of interest transaction cannot be "sanitized" by an approval of disinterested
directors (now called qualified directors) or disinterested shareholders, and (ii) approval of
a conflict of interest transaction by qualified directors or disinterested shareholders will
shift the burden of who has to prove that such transaction is or was fair;
Adds a statutory provision expressly addressing in some detail the standards of conduct for
officers, paralleling the statutory fiduciary duties of directors, with the intent of replacing
common law agency principles, and adds "up the line" reporting obligations and rights to
reasonably rely on certain others and certain information;
5
Provides greater detail and instruction with respect to indemnification of directors and
officers by expanding provisions and breaking out the existing "long" indemnification
statute into ten separate sections (providing certain definitions, addressing permissive
versus mandatory indemnification (including the need to be "wholly successful" to obtain
statutorily mandated indemnification), advancing of expenses, court ordered
indemnification, determination of whether standards for permissible indemnification have
been met, power to purchase indemnification insurance, ability to indemnify beyond
statutory indemnification, and the outside limits on the ability to indemnify);
Allows the authorization for director approved share splits or combinations without
shareholder approval, which are already available under Existing Law to corporations with
35 or more shareholders, to also be available to corporations with fewer than 35
shareholders;
With respect to amendments to the articles of incorporation that need to be approved by
shareholders, modifies the statute to require that a full copy of the amendment (and not just
a summary) must be provided to shareholders for approval;
Adds "interest holder liability" concepts in various places including with respect to
amendments to articles of incorporation, mergers, share exchanges, conversions, and
domestications;
Adds provisions relating to authorizing bylaws to include certain provisions relating to
majority voting for directors and holdover directors;
Modifies provisions for judicial dissolution and appointment of receivers and custodians
in the context of judicial dissolution proceedings, including adding "oppression" as one of
the grounds for judicial dissolution (subject to a limitation that only a shareholder who
holds more than 10% of a corporation's outstanding common stock may bring an action
seeking judicial dissolution based on oppression);
Adds provisions to allow shareholders who enter into a shareholders' agreement complying
with s. 607.0732 of the FBCA to include a deadlock sale provision or a shareholder
oppressive action sale provision in their shareholders' agreement that, if applicable, will be
given effect instead of allowing for judicial dissolution in the event of deadlock or
shareholder oppressive action;
Modifies provisions governing approvals required for certain affiliated party transactions
engaged in primarily by public companies, including changes in certain percentage
thresholds and clarifications in terms of how boards of directors can bless such transactions
without the need for shareholder approval;
Modifies provisions governing organic transactions like mergers, share exchanges,
conversions, domestications, and sales of all or substantially all of the assets;
Adds provisions permitting the merger of corporations without a shareholder vote
following a tender offer, if certain conditions are met;
6
Modifies provisions regarding conversions so as to more clearly address both inbound and
outbound conversions;
Modifies provisions governing domestications so as to expand domestications to include
in-bound domestications by foreign corporations and out-bound domestications by Florida
corporations into foreign corporations, so long as the domestication is permitted under the
laws of the foreign jurisdiction, such that moving a corporation into a different state of
organization can effectively be achieved, at the election of the corporation, by either a
domestication, a merger, or a conversion;
Modifies appraisal rights provisions, including adding events that trigger appraisal rights,
and providing clarifications to the procedural aspects of the appraisal rights provisions,
particularly in dealing with organic transactions approved by way of written consent; and
Modifies provisions that address the obligations of corporations to make financial
statements available to shareholders, the maintenance of corporate records, and the
inspection rights of shareholders and directors.
A few things did not change from before and a few of the new items in the Model Act are not
proposed to be adopted. The Drafting Subcommittee:
Did NOT add the provisions in the Model Act relating to "ratification of defective acts."
Did NOT add the provision in the Model Act permitting corporations to include in their
articles of incorporation a provision that limits or eliminates a director’s or an officer’s
duty to present a business opportunity to the corporation.
Did NOT add the provision in the Model Act that requires shareholder approval of any
share issuances of more than 20% of voting power.
Did NOT add default rules contained in the Model Act for the conduct of a shareholders
meeting.
Did NOT include the provision in the Model Act requiring the duration of a voting trust to
be expressly set forth in the voting trust instrument.
If you have any questions about the Updated Act, please feel free to contact the co-chairs of the
Subcommittee, Philip B. Schwartz (philip.schwartz@akerman.com) and Gary I. Teblum
(gteblum@trenam.com).
7
WHITE PAPER FOR S.B. ____ & H.B. ___
"AN ACT RELATING TO BUSINESS ORGANIZATIONS"
Prepared by
The Florida Bar Business Law Section
Chapter 607 Drafting Subcommittee
Co-Chairs, Philip B. Schwartz and Gary I. Teblum
October 21, 2019
INTRODUCTION & BACKGROUND
During the 2019 Florida Legislative Session, a bill was presented to the Florida
legislature proposing comprehensive changes to Chapter 607 of the Florida Statutes, the Florida
Business Corporation Act, and to make harmonizing changes to certain other Florida entity
statutes. The bill passed the Florida House of Representatives on April 25, 2019 and the Florida
Senate on April 30, 2019. It was signed by Governor DeSantis on June 7, 2019 and will become
effective for all Florida corporations on January 1, 2020. The bill as adopted has been designated
as Laws of Florida, Chapter 2019-90 (the "revised act"). The bill that became the revised act was
developed by the Chapter 607 Drafting Subcommittee (the "Drafting Subcommittee") of the
Corporations, Securities and Financial Services Committee of the Business Law Section of The
Florida Bar.
The revised act includes (i) changes that follow the 2016 version of the Model Business
Corporation Act, which the model statute on which Chapter 607 is based, (ii) language changes
that make the statutory provisions more understandable and usable by those who have to work
with the statute (including judges), including fixing issues in the existing statute that have been
identified over the years, (iii) changes that borrow parallel language and approaches from the
Florida Revised Limited Liability Company Act ("FRLLCA") for purposes of harmonizing the
two statutes on issues where harmonization was considered appropriate, and (iv) necessary
corrections to cross references. The revised act also retains certain non-Model Act provisions
already contained in existing Chapter 607 and continues, in certain cases, to borrow language
from the Delaware General Corporation Law.
The revised act was a large piece of legislation (the bill that passed the legislature was
more than 500 pages). In the course of the Drafting Subcommittee's final review of the
legislation as adopted, a number of glitches were identified, including typos, errors in cross
references, and inconsistencies in the structure and/or terminology used in various sections. In
order to address these various glitches that have been identified, a bill (designated as H.B. ____
and S.B. _____) has been drafted for presentation to the Florida legislature for consideration
during the 2020 Legislative Session.
For the most part, the glitches do not have a substantive impact on the revised act as
adopted and are merely corrections to what are obvious glitch errors in the 2019 legislation.
These particular non-substantive changes are described generically below. There are, however, a
very limited number of glitches that are in need of correction because they do not reflect the
intent of the proponents of the 2019 legislation – and those particular corrections might be
considered to have more of a substantive effect on the meaning and operation of the affected
provisions. These limited number of potentially substantive glitch corrections, and the effect
thereof, are described more specifically below.
Finally, there is one additional provision in the bill that reflects a substantive change.
This change relates to the permitted composition of committees of boards of directors of Florida
not-for profit corporations. During the 2019 legislative session, the Drafting Committee was
approached by a large Florida not-for-profit health care system that wanted to add an amendment
to the bill that would expressly allow non-board members to serve on board committees of
Florida not-for-profit corporations. The members of the Drafting Committee believed that the
concept of what was being proposed made sense, but wanted to study the proposal before
recommending its addition to the Florida Not-For-Profit Corporation Act (Chapter 617, Florida
Statutes). Following passage of the revised act, the Drafting Subcommittee studied this topic and,
working with the proponents of this change, crafted a revised version of §617.0825 that
addresses the needs and concerns of not-for-profit corporations in this state while providing
necessary protections from a corporate governance perspective. The portion of the bill
addressing this change is described in more detail below and reflects the results of this dialog.
CORRECTIONS AND CLEAN UP ITEMS
The overwhelming number of changes included in the proposed legislation are in the
nature of glitch fixes to the legislation passed in the 2019 legislative session (Chapter 2019-90,
Laws of Florida). These changers correct typographical errors, grammatical errors, incorrect
wording and inadvertent lack of parallel wording in comparable sections of the revised act as
adopted. For example, the 2019 legislation intended to change all references to Chapter 607 so
that they read "chapter" instead of "act." In several places, that change was not picked up.
All of the changes in the bill, other than the one change to §617.0825 that is described
below, are believed to fall into the category of glitch fixes. However, for several of the glitches,
further explanation was considered advisable and that further explanation is set forth in the
"Specific Glitch Provisions" section of this white paper.
SPECIFIC GLITCH PROVISIONS
Changes to §607.0707. When subsection (10) was added to §607.0707 by Laws 2019-
90, the section ended up with two subsections addressing the same concept, but with slightly
different language. The intent had been to replace the language in subsection (2) with the more
current Model Act language that was added in subsection (10), but this change was inadvertently
not presented in this fashion in the statute. The change in the bill effectuates this intended
change. But rather than presenting this change as a deletion of subsection (10) and showing the
addition in full in subsection (2), subsection (2) is instead deleted and the numbering of
subsection (10) is changed to show it is intended to become subsection (2). Although the bill
language actually shows the numbering out of order, it is our understanding, based on
discussions with legislative bill drafting personnel, that the correct numbering and ordering of
the sections will appear in the actual statute once this bill is adopted.
Changes to §§ 607.1106, 607.11920, 607.11923, 607.11924 and 607.11935. These
sections deal with certain organic transactions for corporations, such as mergers, share
exchanges, domestications and conversions. In each such organic transaction, the statute
addresses the ability to effectuate an exchange of shares, rights to acquire shares and other
securities of the corporation into other equity interests, rights to acquire equity interests and/or
other property. In reviewing the provisions in these sections following adoption of the revised
act, it was discovered that the language identifying the exchanged shares, rights to acquire shares
2
and securities and the language identifying the shares, rights to acquire shares, and other property
which would result from the exchange was not parallel in those sections, in a situation where it is
believed that parallel language should have been used. The bill creates parallel language for the
terminology of the list of exchanged items and the property into which these items are being
exchanged in each of these sections. These changes are not intended to be substantive, but rather
are intended to clarify that all of these sections should deal with this topic in a parallel manner.
Changes to §607.1703. In the course of revising Chapter 607, language concerning the
ability of the Florida Department of State (the "Department"), in its administration of compliance
with Chapter 607, to direct interrogatories to corporations and other persons was inadvertently
left out of the revised act. The intent had been to remove the interrogatories language from
§607.0130 and move it instead to a standalone section (consistent with §605.1104 of FRLLCA).
Unfortunately, however, the standalone section never was added to the 2019 legislation.
Representatives of the Department brought this omission to the attention of the Drafting
Subcommittee following adoption of the revised act, and this proposed addition of new
§607.1703 is intended to fix that glitch.
Changes to §607.1907. This section of Chapter 607, which is a savings provision to the
effect that, notwithstanding the change in the chapter effectuated by the 2019 legislation,
pending actions and proceedings and rights accrued prior to January 1, 2020, the effective date of
the 2019 legislation are preserved. In referring to the 2019 legislation, the changes to §607.1907
effectuated by the 2019 legislation used references to "this act." If is believed that the
terminology "this act" tends to be confusing and that these references should instead be to
"chapter 2019-90, Laws of Florida" in each place where "this act" is referenced in §607.1907.
CHANGE TO §617.0825 OF THE FLORIDA NOT-FOR-PROFIT
CORPORATION ACT
During the 2019 legislative session, the Drafting Subcommittee was approached by a large
Florida not-for-profit health care system that proposed a modification to §617.0825 that it was
seeking to have added as an amendment to the bill that became the revised act. The proposal was
intended to modify that section to expressly permit not-for-profit corporations to designate non-
board members to committees of the board, in a manner similar to statutory changes that are
contained in the not-for-profit corporation statutes in Texas and Illinois. The Drafting
Subcommittee believed this basic concept made sense, but also felt that if a proposal on this
topic were to be added to Chapter 617 it would be advisable to include certain controls for
corporate governance purposes. An agreement was reached not to include this proposed change
in the 2019 legislation, but rather to study the issue, with an understanding that if agreement was
reached on proposed changes to this section, they would be included in this glitch bill legislation.
Over the summer months in 2019, representatives of the Drafting Subcommittee studied
the issue in more detail, including reviewing how this issue is addressed in §8.25 of the Model
Not-For-Profit Corporation Act. Based on the results of that study and further discussions with
representatives of the not-for-profit health care system that made the request, compromise
language was developed and approved. The proposed changes to §617.0825 are the results of
3
that further study and compromise and are believed by the Drafting Subcommittee to be good
policy changes that give not-for-profit corporations the necessary flexibility to organize their
committees (consistent with the way many not-for-profit corporations are believed to act today,
notwithstanding that it is not permitted under the current statute) but at the same time with
corporate governance protections that are appropriate under the circumstances.
If this proposal is adopted, with the exception of a not-for-profit corporation's nominating
committees (which under the proposed revision will be allowed to be comprised of as many non-
board members as provided for in the not-for-profit corporation's bylaws), board committees for
not-for-profit corporations will be allowed to include non-board members, but only so long as a
majority of the persons on the committee are board members. Moreover, any non-board member
serving on a board committee will have the same responsibility and fiduciary duties with respect
to the activities of such committee (as well as the same liability protections) as board members
serving on the committee.
Finally, consistent with the Model Not-For-Profit Corporation Act, if the bill is adopted, a
Florida not-for-profit corporation will be expressly authorized to create one or more advisory
committees with no limit on the number of non-board persons who could serve on such an
advisory committee; but such advisory committee will not be considered a committee of the
board, cannot be delegated board authority, and can only make recommendations to the board,
the corporation’s officers and/or the corporation’s members for their consideration.
Further information. This white paper was prepared by the Drafting Committee. The
co-chairs of the Drafting Committee, Philip B. Schwartz and Gary I. Teblum, are available to
answer any questions regarding the glitch bill. The contact information for Messrs. Schwartz and
Teblum is as follows:
Philip B. Schwartz Gary I. Teblum
Akerman LLP Trenam Law
(954) 468-2455 (813) 227-7457
philip.schwartz@akerman.com GTeblum@trenam.com
4
CD
-0)
¦Q
5
CO
.c
0
co 0 (/) > £
1 1 CO
c
ro o
0
0
CT3
"5
Ct5
0) CD -T-j
•8 >- -c S
0 C 5
fc2
C
¦Q 2
QQ -£ -S
O c: -Q
c 0 CD C
CQ C CL.O
1C Q. -g
3 CO
1
Z3
C CD
C O
CD
C i •4->
ro
-2
S c *S 00
0) . . To
1 D)
0
O) 50
o
*= g.
Is
s CD
o
-C
I
==; 13
CO
CC
0 o
CO CO
CL ro s 0 C 0
i_
Q.-b= 0
-t
C ro CO ro c
8 'do
+- CD
0 1s
.
-+->
¦>>
as
N n CD
jD
J
O
¦ C
o
-3
-2 w
co E
k-
o
M
c 0
0 -Q
AP EARANCERECORD > C CD
CD
-4-J
CD
¦Q
w
c
ra CO CD
D) -C E
< o CD
(DeliverBOTHcopiesofthisformtotheSenatororSenateProfesionalStafconductingthemeting) CD
C
&
0 O
O Z5 u
LL D) C o
&o C
'- ¦ 0 ¦c
Q c -4 > CD
Co 0 O
c C O
oo CD
_0 O) CD L_ iS
(/) C Q.
O © I• 0 0 0 c»
V 0 CL 0 .c
a. E 1 Q. CD
o to 0 13 CL CL CD
I- Z > < V) < Thisformispartofthepublicrecordforthismeeting.s-001(10/14/14)
b'
o
¦Q
-Q z .to
-c
CD ,S Kj to
1D
Q.
TO"
Jt-.
3
m 05 §
to
CD
¦B
C
0
•0 G>< (b >-
-c
0
O 5|
b<3 TO
QQ t; -s a-Q
"c 0 <8 o c
0 cd c:
CQ <D Cr c Q. ,Q L_ to CD
1 cu g-to 13 Q. o
C
Q)
)' C [= O
s V) c 2 to -S
0 i / ,<o
c D)
0 Ia
to ~
S to
s CD
0 ..
D) S3 to co
C 05 c£ c c
o o o
E 05 s
S
== ~o
0 gcbS2b
UJ s_
CL- : 0
-i <
o.
C <S to to
8 D) te to
CO ®
0 gE
•&
-t
to as
N '> Ow
JO cS
_Q o
JL O to c
B to
C
2 to
jTO 05
) Is
to cfc;
£ E. s
o
i - o
c to
0
AP EARANCERECORD >-
to J®
\) \n h- Cb
O to
c o
05
0 C to
c P
Q D)
OD
<
(DeliverBOTHcopiesofthisformtotheSenatororSenateProfesionalStafconductingthemeting) O C
\
E q -t-*
to
0
o
¦5
D) C
5 £
C 0 >2
cd
-t
c c
0 cb
0 co
to O)
D)
0
i_
C "l
Q.
m 0 0
I- S 05 C£ 0
-Q CD CL
CL
° 5
-to <
Q.
O < Thisformispartofthepublicrecordforthismeting.s-oi(10/14/14)
The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Commerce and Tourism
BILL: SB 848
INTRODUCER: Senator Montford and others
SUBJECT: Rural Communities
DATE: January 13, 2020 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Harmsen McKay CM Favorable
2. FT
3. AP
I. Summary:
SB 848 creates s. 288.062, F.S., the Florida Rural Jobs and Business Recovery Act. The bill
allows investors to earn state insurance premium tax credits equal to their investment in certified
growth funds. In turn, the growth funds will invest in certain businesses located in Florida’s non-
urbanized areas. The bill caps investment at a level that will result in no more than $5 million in
tax credits cumulatively claimed each year and no more than $25 million in total credits under
the program.
The Department of Economic Opportunity will administer the program by certifying growth
funds, granting tax credits to investors, and if necessary, revoking the fund’s tax credits and
authority.
The bill provides ongoing requirements for the growth funds to meet while participating in the
program, allows growth funds to reinvest their rural growth investments, and outlines steps for a
growth fund to withdraw from the program.
The bill takes effect July 1, 2020, and applies to tax returns due on or after January 1, 2021.
II. Present Situation:
The U.S. Census Bureau defines urban areas as urbanized areas of 50,000 or more population
and urban clusters of at least 2,500 and less than 50,000 population.1 The U.S. Census Bureau
considers anything that is not an urban area to be rural.2 Geographically, 86.2 percent of
Florida’s land lies in rural areas but only 8.8 percent of Florida’s population lives in those rural
1
U.S. Census Bureau, Defining Rural at the U.S. Census Bureau: American Community Survey and Geography Brief, (Dec.
2016), available at https://www2.census.gov/geo/pdfs/reference/ua/Defining_Rural.pdf (last visited Jan. 13, 2020).
2
Id. at 1.
BILL: SB 848 Page 2
areas.3 Higher population density in Florida’s urban areas drives a more robust jobs market and
overall economic development.4
Economic Development Incentives Targeted to Florida’s Rural Communities
Rural Economic Development Initiative
The Rural Economic Development Initiative (REDI) encourages and facilitates the location and
expansion of economic development projects of significant scale in Florida’s rural communities.5
The REDI, which is administered by the Department of Economic Opportunity (DEO),
coordinates the efforts and resources of state and regional agencies on the problems that affect
the fiscal, economic, and community viability of Florida’s economically distressed rural
communities.6 In particular, the REDI acts in rural areas of opportunity7 (RAO) to promote the
location or expansion of businesses to the RAO to serve as economic generators.8
Regional Rural Development Grants Program9
The Regional Rural Development Grants Program provides matching grants to build the
professional capacity of Florida’s regional economic development organizations (EDO).10 A
grant to an EDO is capped at $50,000, or $150,000 if located in an RAO, per year; the EDO must
match the state’s grant with non-state resources.11 In Fiscal Year 2018-2019, the DEO allocated
$682,300 to EDOs.12
Rural Infrastructure Fund13
The Florida Rural Infrastructure Fund (Fund) provides grants and loans to local governments and
businesses to facilitate the planning, preparation, and financing of traditional economic
development or nature-based tourism infrastructure projects that encourage job creation and
capital investment in rural communities.14 The amount awarded and any required local
3
Florida Legislature Office of Economic and Demographic Research, Florida: An Economic Overview Focusing on County
Differences, 10 (Jan. 8, 2019), available at
http://edr.state.fl.us/Content/presentations/economic/EconomicOverviewFocusingonCounty%20Differences.pdf (last visited
Jan. 13, 2020).
4
Id. at 8-13.
5
Section 288.0656, F.S.
6
Section 288.0656(3), F.S.
7
Section 288.0656(2)(d), F.S., defines a “rural area of opportunity” as a rural community, or a region composed of rural
communities, designated by the Governor, which has been adversely affected by an extraordinary economic event, severe or
chronic distress, or a natural disaster or that presents a unique economic development opportunity of regional impact.
8
See ss. 288.0656(7)(c), (2)(a) F.S.
9
Section 288.018, F.S.
10
Section 288.018(1), F.S.
11
Section 288.018(1), F.S.
12
Florida Dep’t of Economic Opportunity, 2019 Incentives Report, p. 18, available at
http://www.floridajobs.org/docs/default-source/reports-and-legislation/2018-2019-annual-incentives-report---
final.pdf?sfvrsn=c2a340b0_2 (last visited Jan. 13, 2020). The DEO may allocate up to $750,000 from the Rural Community
Development Revolving Loan Fund to the Regional Rural Development Grants Program. Id.
13
Section 288.0655, F.S.
14
Section 288.0655(2)(b), F.S.
BILL: SB 848 Page 3
government match vary based on whether the project is located in an RAO, a catalyst site, or
rural community.15 In Fiscal Year 2018-2019, the DEO awarded $2,711,307 through the Fund.16
Federal Rural Business Investment Company and Small Business Investment Programs 17,18
Rural Business Investment Companies (RBIC) and Small Business Investment Companies
(SBIC) are privately owned and managed investment funds that are licensed and regulated by the
U.S. Department of Agriculture and Rural Development19 and Small Business Administration
(SBA)20 respectively, that make capital investments in small businesses located in rural
communities or other qualifying businesses.
An RBIC or SBIC program offers incentives for private capital to invest in small businesses,
startups, low-income areas, or regions otherwise under economic distress. These programs often
include special criteria for a certain quantity of the credit to focus on rural or underdeveloped
areas.
Economic Development Incentives that use Tax Credits
Rural Job Tax Credit Program21
The Florida Rural Job Tax Credit Program offers a tax credit incentive for eligible businesses
that are located within a designated qualified rural area to create new jobs. The tax credit ranges
from $1,000 to $1,500 per qualified employee and can be taken against either the businesses’
corporate income tax or sales and use tax liabilities. A business is limited to no more than
$500,000 of tax credits per year.22 The DEO administers this program, and may approve up to $5
million in tax credits per year; in calendar year 2018, the DEO approved $141,000 in rural job
tax credits.23
Florida New Markets Development Program24
The Florida New Markets Development Program (NMDP), similar to the program created in this
bill, uses tax credits to spur economic development. The NMDP allows Florida taxpayers to earn
tax credits against corporate income tax and insurance premium tax by investing in qualified
community development entities (CDEs) that make investments in qualified low-income
community businesses. CDEs are domestic corporations or partnerships that have a primary role
in administering the tax credit program and act as intermediaries between the investors,
15
See Florida Dep’t of Economic Opportunity, Rural Infrastructure Fund, available at
http://www.floridajobs.org/community-planning-and-development/rural-community-programs/rural-infrastructure-fund (last
visited Jan. 13, 2020).
16
Florida Dep’t of Economic Opportunity, supra note 12, at 18.
17
7 U.S.C. s. 2009cc et seq.; 7 C.F.R. s. 4290 et seq. (2009).
18
15 U.S.C. s. 681-688.
19
United Stated Department of Agriculture and Rural Development, Rural Business Investment Program, available at
https://www.rd.usda.gov/programs-services/rural-business-investment-program (last visited Jan. 13, 2020).
20
U.S. Small Business Administration, Become an SBIC, available at https://www.sba.gov/partners/sbics/apply-be-sbic (last
visited Jan. 13, 2020).
21
Sections 212.098, and 220.1895, F.S.
22
Section 212.098(6)(d), F.S.
23
Florida Dep’t of Economic Opportunity, supra note 12, at 19.
24
Sections 288.991-.9922, F.S.
BILL: SB 848 Page 4
financiers, and low-income community businesses. The NMDP is modeled after the federal New
Markets Tax Credit program.25 The NMDP is capped at a cumulative investment that would
result in no more than $216.34 million in tax credits, and an annual investment that would result
in no more than $36.6 million in a single fiscal year.26 The NMDP has exhausted its credit
allocation. It has not issued tax credits since Fiscal Year 2014-2015.27
Examples of Similar Rural Jobs Acts in Other States
Utah passed a substantially similar bill, the Utah Rural Jobs Act, which authorizes up to $42
million in tax credits, and caps the total contributions one entity may make under the program at
$24.36 million. Additionally, Utah assesses a $50,000 annual fee that is split between all the
certified growth fund entities.28
In 2017, Georgia created the Georgia Agribusiness and Rural Jobs Act, which is designed to spur
$100 million in capital investments in rural businesses in the state. Investors may redeem up to
$15 million in tax credits annually for four years (for a total of $60 million tax credits) against
their corporate income tax and premium tax liabilities.29
Similar legislation has been proposed in several other states, including Kentucky30 and
Washington. Additionally, New Markets Tax Credit Programs, which are structurally similar to
the program created by the bill, are active in several other states, including Florida.31
III. Effect of Proposed Changes:
The bill creates s. 288.062, F.S., the “Florida Rural Job and Business Recovery Act.” The bill
uses tax credits against the state insurance premium tax to incentivize investors to give funds to
certified growth fund entities that, in turn, will make capital or equity investments, or loans with
a maturity date of at least one year, in growth businesses located in non-urbanized areas of the
state or in an urbanized area within a county designated by Federal Emergency Management
Agency declaration FEMA-4399-DR if the urbanized area had sustained winds in excess of 100
miles per hour during Hurricane Michael. The bill caps the amount of investments at a level that
will result in no more than $5 million in tax credits claimed under the program each year and $25
million in tax credits claimed under the program in total.
A growth business is one that:
Has fewer than 200 employees;
25
Florida Legislature Office of Economic and Demographic Research, Economic Evaluation for Select State Economic
Development Incentive Programs, 32-36 (Mar. 2017), available at
http://edr.state.fl.us/content/returnoninvestment/ROISELECTPROGRAMS2017final.pdf (last visited Jan. 13, 2020).
26
Section 288.9914(3)(c), F.S.
27
Florida Dep’t of Economic Opportunity, 2017 Incentives Report, 11 available at http://www.floridajobs.org/docs/default-
source/reports-and-legislation/2017-annual-incentives-report.pdf?sfvrsn=4 (last visited Jan. 13, 2020).
28
Utah Code Annotated s. 63N-4-301, et seq. (2017).
29
Ga. Code Annotated s. 33-1-25, et seq. (2017).
30
Kentucky House Bill 203 (2019), https://apps.legislature.ky.gov/record/19rs/hb203.html (last visited Jan. 13, 2020).
31
Doug Farquhar, Jump-Starting Rural Economies (Apr. 2018), available at http://www.ncsl.org/research/environment-and-
natural-resources/jump-starting-rural-economies.aspx (last visited Jan. 13, 2020).
BILL: SB 848 Page 5
Has its principal place of business operations in an area of Florida that is defined as not
urbanized by the U.S. Census Bureau; and
Participates in approved agriculture, forestry, fishing, hunting; mining, oil, and gas
extraction; utilities; construction; manufacturing; transportation and warehousing;
professional, scientific, or technical services; healthcare and social assistance; or any industry
determined by the DEO to be beneficial to the area.
The DEO will administer the program and monitor jobs created or retained as a result of the
growth fund entities’ investments in growth businesses.
Tax Credit Application, Approval, and Allocation
Beginning September 1, 2020, the DEO must accept applications for approval as a growth fund.
The application must include the following:
Total investment authority sought by the applicant;
Evidence that the applicant or an affiliate of the applicant is licensed as a rural business
investment company or small business investment company, as defined in federal law;32
Evidence that at least one principal in the rural business investment company or small
business investment company is, and has been for at least four years, an officer or employee
of the applicant or an affiliate of the applicant on the date the application is submitted;
Evidence that the applicant or its affiliates have invested at least $100 million in private
companies that are located in nonmetropolitan counties;
An estimate of the total number of new annual jobs that will be created and jobs retained in
the state as a result of the applicant’s growth investments;
A business plan that includes a 10-year revenue impact estimate of the proposed growth
investments, including the investment’s effect on state and local tax revenues, and state
expenditures. This business plan must be prepared by an independent third-party economic
forecasting firm that uses a dynamic economic forecasting model;
A signed affidavit from the applicant’s investors stating the investment each commits to
make; and
A commitment by the growth fund applicant to give first priority to growth investments
located in those counties designated by Federal Emergency Management Agency declaration
FEMA-4399-DR.
The DEO must grant or deny an application within 45 days of its receipt. The DEO must deny an
application if:
The application is incomplete;
The applicant does not qualify as a growth fund;
The business plan does not evidence that the positive revenue impact on this state over a 10-
year period will be greater than the cumulative amount of tax credits that would be issued to
the applicant’s investors;
32
See 7 U.S.C. s. 2009cc et seq. and 15 U.S.C. s. 681 et seq.
BILL: SB 848 Page 6
The growth fund has failed to commit investor contributions equal to at least 75 percent of
the investment authority it seeks; or
The DEO has already approved the investment authority permitted.
If the DEO denies an application on certain grounds, the applicant has 15 days to cure the defect.
The DEO must review the additional filing and issue an ultimate decision within 30 days of the
application’s initial submission. Additionally, the DEO may not approve or deny an application
that is submitted after another for which additional information was needed until it approves or
denies the “first” or “initial” application with additional information.
Upon approval of an application, the DEO must provide a notice to the applicant that certifies it
as a growth fund, states the fund’s investment authority, and specifies the investor contributions
required. Ten percent of the fund’s investment authority must consist of equity investments
contributed by the fund’s affiliates.
The DEO may not reduce the growth fund’s investment authority from that requested on its
application unless such an allocation would cause the DEO to exceed the year’s permitted tax
credits. If the DEO approves applications received on the same day that seek investment
authorities that would collectively exceed the permitted annual tax credits, the DEO must
approve both applicants, but proportionally reduce each applicant’s investment authority and
investor contributions to comply with the tax credit limit.
Within 60 days of its certification, a growth fund must collect all of its committed investor
contributions and any additional cash investments. The fund must provide proof to the DEO that
it collected all required contributions and investments within 65 days of certification. A fund’s
certification will be subject to revocation if it fails to perform these duties.
The DEO must provide tax credit certificates to investors upon notice from a certified fund that it
collected the investor’s contribution.
Tax Credit Established
An investor in a fund is vested with an earned credit against its state premium tax liability equal
to the value of its contribution to the fund. The investor may not sell, transfer, or allocate the
credit to any entity other than an affiliate of the fund.
An investor may claim 20 percent of its credit each taxable year from the year that the fund
collects the investor contributions and any additional investments (defined in the bill as the
“closing date”) through the fourth anniversary of such date. If an investor’s annual tax credit
portion exceeds its state premium tax liability for the year, the investor may carry forward the
excess for up to 10 years. In order to claim a credit, the investor must submit a copy of the tax
credit certificate with its tax return for each taxable year it claims the credit.
The DEO must provide the Department of Revenue (DOR) with the names and Federal
Employment Identification Numbers of insurance companies that are allocated tax credits under
the program and the amount of credit awarded to each company.
BILL: SB 848 Page 7
Revocation of Tax Credit Certificates and Exit From the Program
The DEO must revoke a tax credit certificate if:
The fund fails to collect all of its investor contributions and any other required investments;
The fund does not invest 100 percent of its investment authority in state growth investments
within two years after the closing date;
The fund fails to maintain investments equal to 100 percent of its investment authority until
the sixth anniversary of its closing date (with a permitted 12 months between receipt of
capital and reinvestment of that capital);
The fund makes a distribution or payment that results in the fund having less than 100
percent of its investment authority invested in Florida growth investments, or available for
state growth investments and held in cash or other securities; or
The fund invests in a growth business that directly, or indirectly through an affiliate, owns,
has the right to acquire an ownership interest in, makes a loan to, or makes an investment in
the fund, an affiliate of the fund, or an investor of the fund.
The DEO must give a growth fund notice of a pending revocation and the fund has 90 days to
cure any violation. If the DEO revokes tax credits after a growth fund has collected its investor
contribution obligations, then the revoked growth fund’s investment authority and collected
investor contributions will not count toward the program’s limit on investment authority and
investor contributions.
On or after the seventh anniversary of the closing date, a growth fund may apply to the DEO to
exit the program. The DEO must approve the request within 30 days if no tax credit certificates
issued to the fund’s investors have been revoked, and the fund’s certification has not been
revoked or is not currently subject to revocation.
The DEO may not revoke a tax credit certificate after a fund exits the program.
Growth Fund’s Reporting Obligations
Each fund must submit an annual report to the DEO on or before the fifth business day after each
anniversary of its closing date. The report must include:
A bank statement evidencing each of the fund’s investments;
The name, location, and industry of each growth business that receives a growth investment
or evidence that a growth business qualified as such at the time the fund made the
investment;
The number of employment positions at the growth business on the date of the fund’s initial
investment;
The number of new and retained annual jobs and their average salary at each growth
business;
The cumulative amount of growth investments made in the growth business;
Any other information required by the DEO; and
If available, a report on redeemed or repaid growth investments.
BILL: SB 848 Page 8
Distributions to the Growth Fund’s Equity Holders
A growth fund that has not exited the program may not make any distribution that results in the
diminishment of its investments below its certified investment authority.
After its exit from the program, a growth fund may make distributions in excess of its investment
authority, in accordance with certain restrictions. Specifically, a growth fund that distributes an
amount greater than its investment authority to its equity holders must also make a payment to
the DEO equal to the proposed distribution multiplied by the difference between one and a
fraction the numerator of which is the aggregate number of new and retained annual jobs
reported in the fund’s annual report and the denominator of which is the projected number of
new and retained annual jobs reported on the fund’s application. No payment is due if the
aggregate number of new and retained jobs equals or exceeds the number of new or retained jobs
that were initially projected.
Additionally, after it exits the program, the fund may not make a payment to its equity holders
unless it has invested at least 150 percent of its investment authority in growth investments. The
fund must annually report its growth investments to the DEO until it has made the required
growth investments.
Miscellaneous
A fund may request the DEO to issue a written opinion advising whether a potential investment
business qualifies as a growth business; if the DEO does not respond within 15 days of the
request, the business is deemed a growth business.
The bill grants the DEO rulemaking authority to implement this program.
The bill applies only to tax returns or reports originally due on or after January 1, 2021.
The bill takes effect July 1, 2020, and expires on December 21, 2031.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
BILL: SB 848 Page 9
D. State Tax or Fee Increases:
None.
E. Other Constitutional Issues:
None.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
The Revenue Estimating Conference (REC) has not yet determined the fiscal impact of
this year’s bill. During the 2019 Legislative Session, the REC reviewed CS/HB 739
(2019), which is substantially similar to the provisions of SB 848 (2020).33 The REC
found that CS/HB 739 (2019) would reduce General Revenue Fund receipts by $5
million a year, with a two-year lag after the bill takes effect until the first credit is taken,
and would have a $5 million recurring reduction.34 Both CS/HB 739 (2019) and SB 848
(2020) cap total credits claimed under the program at $25 million.
B. Private Sector Impact:
Businesses in non-urbanized areas may be able to access funding that would not have
otherwise been available to them through traditional financing institutions, e.g., bank
loans. However, these investments will still likely have fees and interest attached to them.
A certified growth fund will likely see a positive financial impact as the result of its
activity under the program. Similarly, growth fund investors will see a positive impact on
their tax liabilities as a result of their use of tax credits issued under the program.
C. Government Sector Impact:
The DEO may incur administrative costs to implement and operate the program.
The DOR reports that it will be required to modify the Unified Tax (SUNTAX) System
and make related updates to rules and forms. The total estimated cost of these updates is
$80,368.35
VI. Technical Deficiencies:
The DEO is required to notify the DOR of the name of each insurance company that is allocated
tax credits, but it not required to provide the fund’s closing date or notification of any subsequent
revocation or lapse of the credits. Similarly, the DEO is not required to notify the DOR of the
33
Florida Legislature Office of Economic and Demographic Research, CS/HB 739 Analysis, 32-36 (Mar. 27, 2019), available
at http://edr.state.fl.us/Content/conferences/revenueimpact/archives/2019/_pdf/page289-291.pdf (last visited Jan. 13, 2020).
34
Id. at 291.
35
Florida Department of Revenue, SB 848 Agency Analysis pps. 5-7 (Dec. 5, 2019) (on file with the Senate Committee on
Commerce and Tourism).
BILL: SB 848 Page 10
sale, transfer, or allocation of a credit or the identifying information of the subsequent credit
recipient. The DOR will require such information to be able to determine an investor’s or
affiliate’s eligibility to claim the credit.36 The DOR also states that the taxpayer should be
required to provide a reconciliation schedule with its tax return to assist with tracking the amount
of the credit granted and used by the initial investor or its affiliate.37
VII. Related Issues:
It is unclear how the calculation of the program’s overall investment authority will be affected if
a growth fund’s certification is revoked after it has otherwise claimed part of its credits, pursuant
to section 11 of the bill.
Further guidance could be provided regarding how, or whether, a tax credit may be applied to an
investor’s insurance premium tax liability or retaliatory tax liability (which, together, constitute
the “state premium tax liability” as defined on lines 164-165 of the bill). The DOR notes that it is
uncertain whether a taxpayer will be able to split its credit between the two tax liabilities, or if it
must exhaust one liability first before it may apply the credit to the next.38 This may cause
confusion in processing or claiming the credit.
VIII. Statutes Affected:
This bill creates section 288.062 of the Florida Statutes.
IX. Additional Information:
A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
None.
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.
36
Id. at 4.
37
Id. at 4.
38
Id. at 4.
Florida Senate - 2020 SB 848 Florida Senate - 2020 SB 848
By Senator Montford
3-00617-20 2020848__ 3-00617-20 2020848__
1 A bill to be entitled 30 investor contribution authority to certain taxpayers;
2 An act relating to rural communities; creating s. 31 granting a credit against state premium tax liability
3 288.062, F.S.; providing a short title; defining 32 for specified investors; providing restrictions on the
4 terms; requiring the Department of Economic 33 credit; requiring that taxpayers claiming a credit
5 Opportunity to accept applications for approval as 34 submit a copy of the tax credit certificate with their
6 growth funds in a specified manner; requiring certain 35 tax return; requiring the department to revoke a tax
7 information to be submitted in an application; 36 credit certificate under certain circumstances;
8 requiring the department to approve or deny 37 authorizing growth funds to request certain
9 applications within a specified timeframe; prohibiting 38 determinations from the department; providing a
10 the department from approving more than a certain 39 formula for calculating the maximum amount of
11 amount of investment authority or investor 40 investments; specifying a timeframe within which
12 contributions; requiring the department to deny 41 growth funds may correct violations to avoid
13 applications under certain circumstances; authorizing 42 revocation of a tax credit certificate; authorizing
14 an applicant whose application was denied to provide 43 the department to distribute reverted investment
15 additional information within a certain timeframe to 44 authority among certain growth funds; authorizing
16 cure defects in the application; requiring the 45 growth funds to submit an exit application; providing
17 department to review and reconsider such applications 46 a timeframe and procedures for use by the department
18 within a certain timeframe; prohibiting the department 47 in handling exit applications; prohibiting growth
19 from reducing the investment authority of an 48 funds that have exited the program from making certain
20 application or denying an application unless certain 49 distributions or paying certain fees under certain
21 circumstances are met; requiring the department to 50 circumstances; requiring growth funds to remit certain
22 certify approved applications; providing requirements 51 payments to the department under certain
23 for certified growth funds; requiring the department 52 circumstances; prohibiting the department from
24 to provide a tax credit certificate to certain 53 revoking a growth fund’s tax credit certificate after
25 taxpayers; requiring the department to revoke a growth 54 it exits the program; requiring growth funds to submit
26 fund’s certification under specified conditions; 55 an annual report to the department; requiring that the
27 requiring the department to distribute revoked 56 annual report include certain information; providing
28 investment authority among certain growth funds; 57 for rulemaking; requiring the department to notify the
29 authorizing growth funds to allocate associated 58 Department of Revenue of any insurance company that is
Page 1 of 17 Page 2 of 17
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 848 Florida Senate - 2020 SB 848
3-00617-20 2020848__ 3-00617-20 2020848__
59 allocated tax credits; specifying that a growth fund 88 employment position that is filled, pays a high wage, and
60 is deemed to be a recipient of state financial 89 requires at least 35 hours of work per week or any other period
61 assistance under certain circumstances; providing 90 of time generally accepted by custom, industry, or practice as
62 applicability; providing for future expiration; 91 full-time employment.
63 providing an effective date. 92 (e) “Growth business” means a business that, at the time a
64 93 growth fund initially invests in the business:
65 Be It Enacted by the Legislature of the State of Florida: 94 1. Has fewer than 200 employees;
66 95 2. Has its principal business operations in at least one
67 Section 1. Section 288.062, Florida Statutes, is created to 96 growth zone in this state; and
68 read: 97 3. Is engaged in North American Industry Classification
69 288.062 Florida Rural Jobs and Business Recovery Act.— 98 System sectors: 11, 21, 22, 23, 31-33, 48-49, 54, or 62.
70 (1) This section may be cited as the “Florida Rural Jobs 99 However, if the business is not engaged in such industries, the
71 and Business Recovery Act.” 100 department shall determine whether the investment will create
72 (2) The following terms when used in this section shall 101 new jobs or retain jobs.
73 have the following meanings unless the context clearly indicates 102 (f) “Growth fund” means an entity certified by the
74 otherwise: 103 department under subsection (7).
75 (a) “Affiliate” means an entity that directly, or 104 (g) “Growth investment” means any capital or equity
76 indirectly through one or more intermediaries, controls, is 105 investment in a growth business or any loan to a growth business
77 controlled by, or is under common control with another entity. 106 with a stated maturity at least 1 year after the date of
78 For the purposes of this paragraph, an entity is controlled by 107 issuance.
79 another entity if the controlling entity holds, directly or 108 (h) “Growth zone” means:
80 indirectly, the majority voting or ownership interest in the 109 1. All locations outside an urbanized area with a
81 controlled entity or has control over the day-to-day operations 110 population equal to or greater than 50,000, as identified by the
82 of the controlled entity. 111 United States Census Bureau; or
83 (b) “Closing date” means the date on which a growth fund 112 2. Any urbanized area within a county designated by Federal
84 has collected all amounts specified by paragraph (8)(a). 113 Emergency Management Agency declaration FEMA-4399-DR if the
85 (c) “Department” means the Department of Economic 114 urbanized area had sustained winds in excess of 100 miles per
86 Opportunity. 115 hour during Hurricane Michael.
87 (d) “Full-time high wage employment position” means an 116 (i) “High wage” means a wage in any county which is greater
Page 3 of 17 Page 4 of 17
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 848 Florida Senate - 2020 SB 848
3-00617-20 2020848__ 3-00617-20 2020848__
117 than 100 percent of the county average. 146 preceding calendar year; and
118 (j) “Investment authority” means the amount certified by 147 2. The number of full-time high wage employment positions
119 the department under subsection (7). At least 75 percent of a 148 at the growth business on the date of the initial growth
120 growth fund’s investment authority must consist of investor 149 investment.
121 contributions. 150
122 (k) “Investor contribution” means a cash investment in a 151 If the resulting total is less than zero, the new annual jobs
123 growth fund by an entity that is subject to the state premium 152 amount is equal to zero.
124 tax under ss. 624.509 and 624.5091. The cash investment must 153 (n) “Principal business operation” of a business means the
125 equal the amount specified for that entity in the department’s 154 location or locations where at least 60 percent of the
126 approval of a growth fund’s application under subsection (4). 155 business’s employees work or where the employees who are paid at
127 The cash investment shall purchase an equity interest in the 156 least 60 percent of the business’ payroll are located. A
128 growth fund or purchase at par value or premium a debt 157 business that agrees to relocate or hire new employees using the
129 instrument that has a maturity date at least 5 years from the 158 proceeds of a growth investment to establish its principal
130 closing date and a repayment schedule that is no greater than 159 business operation in a growth zone in this state is deemed to
131 level principal amortization over 5 years. 160 have its principal business operations in the new location
132 (l) “Jobs retained” means the number of full-time high wage 161 provided it satisfies this definition within 180 days after
133 employment positions that existed before the initial growth 162 receiving the growth investment, unless the department agrees to
134 investment in a growth business and for which the growth 163 a later date.
135 business’ chief executive officer or similar officer certifies 164 (o) “State premium tax” means the tax identified in s.
136 that the employment positions would have been eliminated but for 165 624.509 or s. 624.5091.
137 the initial growth investment. 166 (3) Beginning September 1, 2020, the department shall
138 (m) “New annual jobs” means the difference between: 167 accept applications for approval as a growth fund on a form
139 1.a. The average monthly number of full-time high wage 168 adopted by the department. The application shall include the
140 employment positions at a growth business in the preceding 169 following:
141 calendar year; or 170 (a) The total investment authority sought by the applicant.
142 b. If the initial growth investment occurred during the 171 (b) Evidence that:
143 preceding calendar year, the average monthly number of full-time 172 1. The applicant or an affiliate of the applicant is
144 high wage employment positions for the months during which the 173 licensed as a rural business investment company under 7 U.S.C.
145 initial growth investment was made through the end of the 174 s. 2009cc or as a small business investment company under 15
Page 5 of 17 Page 6 of 17
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 848 Florida Senate - 2020 SB 848
3-00617-20 2020848__ 3-00617-20 2020848__
175 U.S.C. s. 681. The applicant or the affiliate must include a 204 amount of investor contribution the investor will make.
176 certificate executed by an executive officer of the applicant 205 (g) A commitment by the growth fund applicant to give first
177 attesting that such license remains in effect and has not been 206 priority to growth investments located in those counties
178 revoked; and 207 designated by Federal Emergency Management Agency declaration
179 2. At least one principal in a rural business investment 208 FEMA-4399-DR.
180 company or a small business investment company is, and has been 209 (4)(a) Within 45 days after receipt of a completed
181 for at least 4 years, an officer or employee of the applicant or 210 application containing the information set forth in subsection
182 an affiliate of the applicant on the date the application is 211 (3), the department shall approve or deny the application.
183 submitted. 212 (b) The department shall deem applications that are
184 (c) Evidence that, as of the date the application is 213 received on the same day as having been received simultaneously.
185 submitted, the applicant or affiliates of the applicant have 214 (c) The department shall approve investment authority up to
186 invested at least $100 million in nonpublic companies located in 215 an amount that would allow no more than $5 million in tax
187 nonmetropolitan counties as defined by the Office of Management 216 credits to be taken in any one year, excluding any credits
188 and Budget within the Office of the President of the United 217 carried forward pursuant to paragraph (10)(c). No more than a
189 States on the basis of county or county-equivalent units. 218 total of $25 million in tax credits may be approved by the
190 (d) An estimate of the total number of new annual jobs that 219 department under the program. If requests for investment
191 will be created and jobs that will be retained over the life of 220 authority exceed this tax credit limitation, the department
192 the program in this state because of the applicant’s growth 221 shall proportionally reduce the investment authority and the
193 investments. 222 investor contributions for each approved application as
194 (e) A business plan that includes a revenue impact 223 necessary to avoid exceeding the limit.
195 assessment projecting state and local tax revenues to be 224 (5) The department shall deny an application if:
196 generated, as well as state expenditures to be reduced, by the 225 (a) The application is incomplete;
197 applicant’s proposed growth investments, prepared by a 226 (b) The applicant does not satisfy the criteria set forth
198 nationally recognized third-party independent economic 227 in subsection (3);
199 forecasting firm using a dynamic economic forecasting model that 228 (c) The revenue impact assessment submitted under paragraph
200 analyzes the applicant’s business plan over the 10 years 229 (3)(e) does not demonstrate that the applicant’s business plan
201 following the date the application is submitted to the 230 will result in a positive revenue impact on this state over a
202 department. 231 10-year period which exceeds the cumulative amount of tax
203 (f) A signed affidavit from each investor stating the 232 credits that would be issued to the applicant’s investors;
Page 7 of 17 Page 8 of 17
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 848 Florida Senate - 2020 SB 848
3-00617-20 2020848__ 3-00617-20 2020848__
233 (d) The investor contributions described in affidavits 262 (8)(a) Within 60 days after receiving the certification
234 submitted under paragraph (3)(f) do not equal at least 75 263 issued under subsection (7), a growth fund shall collect all
235 percent of the total amount of investment authority sought under 264 investor contributions and collect additional investments of
236 the applicant’s business plan; or 265 cash which, when added to the investor contributions, at least
237 (e) The department has already approved the maximum amount 266 equal the growth fund’s investment authority. Within 65 days
238 of investment authority and investor contributions allowed under 267 after receiving the certification issued under subsection (7), a
239 subsection (4). 268 growth fund shall send to the department documentation that it
240 (6) If the department denies an application, the applicant, 269 has collected the amounts described in this subsection. At least
241 within 15 days after the denial, may provide additional 270 10 percent of the growth fund’s investment authority must
242 information to the department to cure any defects in the 271 consist of equity investments contributed by affiliates of the
243 application identified by the department, except for failure to 272 growth fund. The growth fund shall report to the department the
244 comply with paragraph (5)(c), paragraph (5)(d), or paragraph 273 date on which the investor contributions and additional
245 (5)(e). The department shall review and reconsider such 274 investments of cash were collected.
246 applications within 30 days after receipt and before approving 275 (b) Upon receipt of the documentation required by paragraph
247 any pending applications submitted after the original submission 276 (a), the department shall provide a tax credit certificate to
248 date of the reconsidered application. 277 each taxpayer who has made an investor contribution in the
249 (7) The department shall not reduce the requested 278 amount of the investor contribution.
250 investment authority or deny a growth fund application for 279 (9) If the growth fund fails to fully comply with
251 reasons other than those described in subsection (4) or 280 subsection (8), the department shall revoke the growth fund’s
252 subsection (5). After the department approves an application, it 281 certification and the corresponding investment authority and
253 shall certify: 282 investor contributions will not count toward the limits on the
254 (a) The applicant as a growth fund; 283 program size set forth in subsection (4). The department shall
255 (b) The amount of the applicant’s investment authority; 284 first award revoked investment authority pro rata to each growth
256 (c) The investor contributions required from each investor 285 fund that was awarded less than the investment authority for
257 that submitted an affidavit with the growth fund’s application; 286 which it applied, and a growth fund may allocate the associated
258 and 287 investor contribution authority to any taxpayer with state
259 (d) The number of new annual jobs and jobs retained that 288 premium tax liability in its discretion. Any remaining
260 will be required of the growth fund, as prorated, based on the 289 investment authority may be awarded by the department to new
261 investment authority awarded to the growth fund. 290 applicants.
Page 9 of 17 Page 10 of 17
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 848 Florida Senate - 2020 SB 848
3-00617-20 2020848__ 3-00617-20 2020848__
291 (10)(a) Any taxpayer that makes an investor contribution is 320 (a) The growth fund does not invest 100 percent of its
292 vested with an earned credit against state premium tax liability 321 investment authority in growth investments in this state within
293 equal to that investor’s investor contribution. The credit may 322 2 years of the closing date;
294 be used over 5 years such that 20 percent of the credit is 323 (b) The growth fund, after initially satisfying paragraph
295 applied in each of the taxable years that includes the year of 324 (a), fails to maintain growth investments equal to 100 percent
296 the closing date through the fourth anniversary of the closing 325 of its investment authority until the sixth anniversary of the
297 date, unless a specific request is made to carry them forward 326 closing date. For purposes of this paragraph, an investment is
298 for a period not to exceed 10 years. 327 maintained even if it is sold or repaid, so long as the growth
299 (b) The credit is nonrefundable and may not be sold, 328 fund reinvests an amount equal to the capital returned or
300 transferred, or allocated to any other entity other than an 329 recovered from the original investment, exclusive of any profits
301 affiliate that was an affiliate at the time of the submission of 330 realized, in other growth investments in this state within 12
302 the investor’s affidavit included in the growth fund’s 331 months of the receipt of such capital. Amounts received
303 application. 332 periodically by a growth fund shall be treated as continuously
304 (c) The amount of the credit claimed by a taxpayer may not 333 invested in growth investments if the amounts are reinvested in
305 exceed the amount of such taxpayer’s state premium tax liability 334 one or more growth investments by the end of the following
306 for the tax year for which the credit is claimed. 335 calendar year;
307 (d) A taxpayer claiming a credit under this section shall 336 (c) The growth fund, before exiting the program in
308 submit a copy of the tax credit certificate with the taxpayer’s 337 accordance with paragraph (16)(a), makes a distribution or
309 return for each taxable year for which the credit is claimed. 338 payment that results in the growth fund having less than 100
310 (e) The credit shall be allowed after deducting from the 339 percent of its investment authority invested in growth
311 tax the deductions for assessments made pursuant to s. 440.51; 340 investments in this state or available for investment in growth
312 the credits for taxes paid under ss. 175.101 and 185.08; the 341 investments and held in cash and other marketable securities; or
313 credits for income taxes paid under chapter 220; the credit 342 (d) The growth fund invests in a growth business that
314 allowed under s. 624.509(5), as such credit is limited by s. 343 directly, or indirectly through an affiliate, owns, has the
315 624.509(6); and the credit allowed under s. 624.51055. 344 right to acquire an ownership interest in, makes a loan to, or
316 (11) The department must revoke the tax credit certificates 345 makes an investment in the growth fund of an affiliate of the
317 issued under paragraph (8)(b) if any of the following occurs 346 growth fund or an investor in the growth fund. This paragraph
318 with respect to a growth fund before the growth fund exits the 347 does not apply to investments in publicly traded securities by a
319 program in accordance with paragraph (16)(a): 348 growth business or an owner or affiliate of such growth
Page 11 of 17 Page 12 of 17
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 848 Florida Senate - 2020 SB 848
3-00617-20 2020848__ 3-00617-20 2020848__
349 business. For purposes of this paragraph, a growth fund is not 378 subsection (4). The department may award any remaining
350 considered an affiliate of a growth business solely because of 379 investment authority to new applicants.
351 its growth investment. 380 (16)(a) On or after the seventh anniversary of the closing
352 (12) Before making a growth investment, a growth fund may 381 date, a growth fund may apply to the department to exit the
353 request a written opinion from the department as to whether the 382 program and no longer be subject to regulation except as set
354 business in which it proposes to invest satisfies the definition 383 forth in paragraph (b). The department shall approve or deny the
355 of a growth business. The department, not later than the 15th 384 application within 30 days of receipt. In evaluating the
356 business day after the date of receipt of the request, shall 385 application, the fact that no tax credit certificates have been
357 provide the growth fund with a determination letter providing 386 revoked and that the growth fund has not received a notice of
358 its opinion. If the department fails to issue a determination 387 revocation that has not been cured pursuant to subsection (14)
359 letter by the 15th business day, the business in which the 388 is sufficient evidence to prove that the growth fund is eligible
360 growth fund proposes to invest shall be considered a growth 389 for exit. The department shall not unreasonably deny an
361 business. 390 application submitted under this paragraph. If the application
362 (13) The maximum amount of growth investments in a growth 391 is denied, the notice shall include the reasons for the
363 business, including amounts invested in affiliates of the growth 392 determination.
364 business, which a growth fund may count in satisfying the 393 (b) After its exit from the program in accordance with
365 requirements of paragraphs (11)(a) and (b) is the greater of $5 394 paragraph (a), a growth fund may not make distributions or pay
366 million or 20 percent of its investment authority, exclusive of 395 any fees except as allowed under paragraph (11)(c) to its
367 repaid or redeemed growth investments. 396 investors unless it has made growth investments equal to at
368 (14) Before revoking a tax credit certificate under 397 least 150 percent of its investment authority. Each growth fund
369 subsection (11), the department shall notify the growth fund of 398 shall continue to report the amount of growth investments made
370 the reasons for the pending revocation. The growth fund shall 399 to the department annually until it has made growth investments
371 have 90 days from the date the notice was received to correct 400 equal to at least 150 percent of its investment authority.
372 any violation outlined in the notice to the satisfaction of the 401 (c) After its exit from the program in accordance with
373 department and avoid revocation of the tax credit certificate. 402 paragraph (a), if the growth fund proposes to make a
374 (15) If the department revokes any tax credit certificates 403 distribution to its investors which, when added to all previous
375 under subsection (11), the associated investment authority and 404 distributions to its investors, exceeds its investment
376 investor contributions will not count toward the limit on total 405 authority, the growth fund shall remit to the department a
377 investment authority and investor contributions described in 406 payment equal the product of the proposed distribution and the
Page 13 of 17 Page 14 of 17
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 848 Florida Senate - 2020 SB 848
3-00617-20 2020848__ 3-00617-20 2020848__
407 difference between one and a fraction, the numerator of which is 436 growth business, provided the number of jobs retained may not
408 the aggregate number of new annual jobs and jobs retained 437 exceed the number of jobs retained, as reported in subsection
409 reported to the department pursuant to subsection (18) and the 438 (3) and the number of jobs retained that must be reduced if the
410 denominator of which is the number of new annual jobs and jobs 439 full-time high wage employment positions reported drops below
411 retained as set forth in the growth fund’s certification. No 440 the jobs retained as reported in subsection (3);
412 payment is due if the aggregate number of new annual jobs and 441 5. The average annual salary of the positions described in
413 jobs retained as of the date of the proposed distribution equals 442 paragraph (3)(d);
414 or exceeds the number of new annual jobs and jobs retained as 443 6. The cumulative amount of growth investments made in
415 projected in the growth fund’s certificate issued under 444 growth businesses; and
416 subsection (7). 445 7. Any other information required by the department.
417 (17) The department may not revoke a tax credit certificate 446 (b) The growth fund is not required to provide information
418 after a growth fund exits the program. 447 with respect to growth investments that have been redeemed or
419 (18)(a) Each growth fund shall submit an annual report to 448 repaid as part of the annual report set forth in paragraph (a)
420 the department on or before the 5th business day after each 449 but shall provide such information if available.
421 anniversary of the closing date prior to its exit from the 450 (19) The department:
422 program in accordance with paragraph (16)(a). The report shall 451 (a) May adopt rules to implement this section.
423 identify each growth investment made by the growth fund and 452 (b) Shall adopt forms and notices to implement this
424 shall include: 453 section.
425 1. A bank statement evidencing each growth investment, if 454 (c) Shall notify the Department of Revenue of the name and
426 not previously reported; 455 federal employer identification number of any insurance company
427 2. The name, location, and industry of each growth business 456 allocated tax credits under this act and the amount of such
428 receiving a growth investment, including either the 457 credits.
429 determination letter set forth in subsection (12) or evidence 458 (20) A growth fund that issues a growth investment approved
430 that the business qualified as a growth business at the time the 459 by the department shall be deemed a recipient of state financial
431 investment was made, if not previously reported; 460 assistance under s. 215.97, the Florida Single Audit Act.
432 3. The number of full-time high wage employment positions 461 However, a growth fund business that receives a growth fund
433 at each growth business and jobs retained on the date of the 462 investment is not a subrecipient for the purposes of s. 215.97.
434 growth fund’s initial growth investment; 463 (21) This section applies only to tax returns or reports
435 4. The number of new annual jobs and jobs retained at each 464 originally due on or after January 1, 2021.
Page 15 of 17 Page 16 of 17
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 848
3-00617-20 2020848__
465 (22) This section expires on December 21, 2031.
466 Section 2. This act shall take effect July 1, 2020.
Page 17 of 17
CODING: Words stricken are deletions; words underlined are additions.
.co
-c
c/> r>
CL E C CO
Cl
TO o CO o ¦£
o (/)
0 CO
0 CD >-
-C
CO
o E CD
o 0 ¦c
C JZ ¦c S CD
CO o o c -Q
1 *1 C .O 0 CO C
CO OQ T <§> 1 CD CO
CM §¦ 2 c o
LO c oe ro s*
o 0
O c S
LO
c D) Co
c~ c
JZ 0
o .co C
'o o
co
0 . . T3
co co
C 0 cl c c
o o o
Z E Os
¦D
0
f o
Q_ LU CD s CD D
C .b= 0 C C
-I >
C w 0 CO
T
o
6 0
D .t O
CO
CM 0
CO .CL
o N >> o <S
o
JO c£
Q.
O °
o co co
S o
CD
g O
0 0
"O
O c .
c 0 2 CD
CO o -S> += .5
cc CO
c
CD
LL E <1>
E o
Q.
O o 0
CD -i > 0
AP EARANCERECORD >
CD
O
0
0 0
>- a?
_
g _o
E C h- CD
o JZ CO
c c/>
o O) c jC O CO
(/)
o
uu
D
O CO o 0 c:
CD E
CD
c o
D)
< CO
¦O O JsC
CO
(DeliverBOTHcopiesofthisformtotheSenatororSenateProfesionalStaffconductingthemeting)
o
C
Z5
E
o
U)
JC
CD
3
CD
m
J
-1 >
0
0 I 0
0
c:
.o
5 ¦§
E o 13
CM O 0 ~ o
O o CD
O) cr
-2 -c
CM O >> CD s- CC
Z 0 TO
:
co o CO ro CD 0
Q 0 .0
-E H
0 co CO
O
CO 00 O (/> O
oc O 0 c
0 0 CD
C .C
CC -t 0 o.
0 6)
Z3 o i- 0 *: 0 c
C c ro Dd 0 0
co CL JO 3 CL
O CO o 3 CL CL hisformispartofthepublicrecordforthismeting.s-01(10/14/14)
_a>
Q 3 .c
-Q
8
co
o
"5.
- C €
C CD
I co
fl (0 0
o
oi
W
0 -rj
>- ¦c 2
1 '-S ¦q 2
r : t s -2 0
O c: -Q
OQ Cl ,Q 0 c:
Q- S
L_ 0 0
3C Q- o
co g _co 2 -2
-2 -Q
c 2 CO
D)
*
0 1a
. . 3 s ro
0 0
o
'ro s
o o
_c E X. =
O '5
TD
0 {0
Q. LU 0 0
CL : 0 C C
C W CO
6 D)
0 C*
•tS 0
ra 5
0 g6
Cxi ¦i >
CO 8
¦>
O
CS§
JO
O
£0 J2
'
P0
£
c
O 0
z .
c= Q
J £
V co Sa
AP EARANCERECORD >-
S "
c 0
2
0 J3
-» <
x TO
< §•?
C c
0 0
) CO
CD
O
: 0s
< 20
4
(DeliverBOTHcopiesofthisformtotheSenatororSenateProfesionalStafconductingthemeting) O S TO
¦2 C
(f) - <
0 .-5 0
"TO O
CX) 0 2 6
a o
LL CD O o
r C 0 2 -§
-4 > 0 S
30 * .
-t <
0 § TO
2 0
CO <)o
c D 0 [C:
0 U) D) L- C .0
C C CL i_
0 0 .•+~j O)
H "D
&_ CO 01 0 .c:
-a
JD CL S
TJ a. C:
O a.
) < CO < s
Q)
3 .<o
-Q
CO .S S
O H-
.1 CO
|1
Q. o.
Q. CO
O 0 CO
0 ) -Q
->i ¦o
I >- •c S
0
£2
co
QQ
1 's
¦c s
o c
0 <D
-Q ®
-Q
CO
/. C Q..Q 0 c :
DQ CD &_ oc
1c §¦13
C g
Z3
* -<
0
9- o
0
5
O
0 is
Q1
O) C
CD o
0 •S o
V ¦c a.
.c
co
. . "O CO
0
c
o 0 i l CO
c c:
o o
E 0S
=;
0
3 52 52
LU 0) s CO
Q. = 0 "co
0 c
co
0
t_
-t i
IS co
C
0
'>>
o®
JQ c€
D
O
O ¦£
P co
¦-§ s
p 0>
o
.c
.6 p
+3 a>
o 0)
co
£
0
0 is € .<0
AP EARANCERECORD g. V.
o, «
g™
CO
5 -Q o
o o
o CO
0 c 2!
: CO 5
iliverBOTHcopiesofthisformtotheSenatororSenateProfesionalStafconductingthemeting) a ¦ic
5
a p O
CO
p
.o
•p 8-
0 ¦6 D
0
ZJ £ ¦§ €
o H
D C aO - 0
C 0 t;
-t > p CO O
0 CO
0 co co
o
O) 0 CD .<
.c
-!3 0 f2
O
* CO 0 i_
CL
0
.Cp
d) 1
O F 2 ro
0
Ql 0 .p £
'q.
E -Q Q.
-p
CO .<0
CO CO
o
h- z ° 5
-> < c
CL
<
Q.
£ e
.CO
¦S
(/)
§:
co TO §
CO
¦B
CO CO
0 CD (
D >- -c
-C
-e s
o c
.!
CQ Q-.O 0
L_
CO
Ql* CD
CO
V) g a
CD
(
c: CD C
CO c: co
0 -c
.co
. . T3
CO cS
E =
CO '5
¦D
0
LU S CD
Q.b= 0 Q.
C jS ( CO
O O)
C
4
g
CD
.a.
N
C
>>
JD
O
J
tl °
co co
¦i
CO
O)
c
& -S
co O 0)
C CD
.o
S
0 -Q ¦*-
,c
0
AP EARANCERECORD >-
a? 5
a o
03 co
D
-Q
CO 0 CO
_C s o
D)
< O -ic
CO Q
(DeliverBOTHcopiesofthisformtotheSenatororSenateProfesionalStafconductingthemeting) CD
8-
<0 T3 0)
0 fO ¦c
o ZJ
LL D) cr O o
C -c
0 t:
C <0
0
c C CD .<o
( D)
CO C Q.
0 0 o>
o <g i- 2
-a 0 0£ 0 c
Cl C Q. .12
O o O CL Q.
H Z 3 < U) <
WhileitisaSenatetraditiontoencouragepublictestimony,timemaynotpermitalpersonswishingtospeaktobeheardatthis meting.Thosewhodospeakmaybeaskedtolimittheirremarkssothatasmanypersonsasposiblecanbeheard.
-2J O
-O
3
-o
CD
0
z .-c
C0 T
1
0
c
00
1
<D
CD O
0
0
t3
0 0 w
CD -c =
00 € 0S
¦Q S
-S
00 E
h- o o c -Q
OQ o
M-
Q..O
§¦15
2
OJ
0 c
0 0
Q. O
, - 0 (f) g
-t •
0
M
C
®
0 c 0 ¦2 3
03 0
.c
O
U0
>
0 .co
U)
0
C 0
o
¦s Q-
00 XJ € 0
XI . . 'O s co
0
c
o
-C
"0
E
gi =: 1
0 0
£
Oo
c
C
yj ro 5
Q. 0 s 0 D
Q-. : 0
-4
C w 0 0
8 CD .'t- 0
o 0 ge
00
CM
«*-»
0 as
<4-.
00 o
O
O
si2
0
g 0
¦¦§ s
0
3 C .L.
o O)
c
_l
« 2
CD 0
.£ 'C
LL 0
S
0 0 .0
0 0 ¦Q
APPEARANCERECORD "o
>- a? V.
£
0
TO ¦S
0
C ¦4 •
w ¦Q O
o
0 c TO
a>
~o
0 0 0 0
O)
•4 ¦
0 : s
C
C < 'O O 0 -Q
(DeliverBOTHcopiesofthisformtotheSenatororSenateProfesionalStaffconductingthemeting) 0 O 0
c E 0
0
0 8-
"> 0 0 0 0
0 10
0 < 0 ¦ €
OQ <- 0
s_
o
O)
13
O' O S-.
O s_ 0 u_
0 ¦ O
O 0 g x: _c
"-4-J :
CD 'c
Q (f) CD ¦$ « c -4-< 0 0
Id 0 2 0 0 0 0
O .5O) ) LO c H 0 O)
o
¦S2
CM 03
O 0 GO _g 0 D)
c
2
C
C
's_ E
C H-J 0 0 03
o 0 H 0 0 c *s
'cl
E s_ 0 0 -G
) O Q. 0 &
o 0 o 10 CL CL 0
H z 3 < C < s
The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Commerce and Tourism
BILL: SB 886
INTRODUCER: Senator Powell
SUBJECT: Errors in Deeds
DATE: January 13, 2020 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Elsesser Cibula JU Favorable
2. McMillan McKay CM Favorable
3. RC
I. Summary:
SB 886 provides that, in certain instances, a deed containing a scrivener’s error in the legal
description of property and subsequent deeds containing the same error may be corrected by
the filing of a curative notice.
The bill defines the errors or omissions that constitute “scrivener’s errors” and describes the
circumstances under which such errors may be corrected by a curative notice. A curative notice
corrects all deeds for the same property containing the same scrivener’s error, and releases any
cloud or encumbrance that an erroneous deed may have created as to other properties.
The bill takes effect July 1, 2020.
II. Present Situation:
Generally, deeds containing scrivener’s errors should be reformed to reflect the true intentions of
the parties.1
The Florida Statues do not expressly mention “corrective deeds,” but courts have established a
general rule of law allowing for corrective instruments conveying real property. For instance, a
deed containing an incorrect description or a misspelling of names may be corrected by a
subsequent instrument clearly identified as a correction deed.2 Corrective deeds need not restate
all material portions of the deed being corrected if such portions contain no errors.3 Corrective
deeds and non-erroneous portions of original deeds are “construed together.”4
1
See Burke v. Piccone, 523 So. 2d 664, 665 (Fla. 2d DCA 1988); see also Brown v. Brown, 501 So. 2d 24, 26-27 (Fla. 5th
DCA 1986); Gennaro v. Leeper, 313 So. 2d 70, 72 (Fla. 2d DCA 1975); Jacobs v. Parodi, 39 So. 833 (1905).
2
Golden v. Hayes, 277 So. 2d 816, 817 (Fla. 1st DCA 1973).
3
Id.
4
Id.
BILL: SB 886 Page 2
A reformation relates back to the time the instrument was originally executed and simply
corrects the document’s language to read as it should have read all along.5 The theory of
reformation on grounds of mistake is to reform the agreement to reflect what the parties would
have agreed to had there been no mistake.6 Claims for reformation of a deed are subject to a 20-
year limitations period.7 A party seeking reformation of a deed may seek, in the same pleading,
quiet title to reflect the correct ownership.8
Courts have contemplated remedying alleged defects in deeds through “curative deeds,”9
although the term is not mentioned in the Florida Statutes.
Errors in the legal description of property, contained in a deed or mortgage existing prior to
entry of the final judgment, cannot be remedied by simply amending or correcting the final
judgment, but errors in the legal description of the property that occur upon entry of the final
judgment itself, and did not exist in a deed or mortgage (or other document conveying or
encumbering the property) prior to entry of the final judgment can be corrected through an
amended or corrected judgment.10
The Florida Statutes describe instances where certain entities may amend errors in the legal
description of condominium property. Section 718.110(5), F.S., allows a condominium’s board
of administration to file an amendment to a condominium declaration if it appears that, due to a
scrivener’s error, the “common elements” of the condominium have not been distributed equally
in the declaration. Similarly, a “termination trustee” charged with terminating a condominium
declaration may record an amended plan of termination if the trustee discovers a scrivener’s error
in the plan, and the amended plan must be executed in the same manner as required for the
execution of a deed.11
5
Kartzmark v. Kartzmark, 709 So. 2d 583, 585 (Fla.4th DCA 1998).
6
Id.; “A mistake is mutual when the parties agree to one thing and then, due to either a scrivener’s error or inadvertence,
express something different in the written instrument.” Circle Mortgage Corp. v. Kline, 645 So. 2d 75, 78 (Fla. 4th DCA
1994).
7
Section 95.231, F.S.; Inglis v. First Union Nat. Bank, 797 So. 2d 26 (Fla. 1st DCA 2001).
8
See, e.g., Rigby v. Liles, 505 So. 2d 598, 599 (Fla. 1st DCA 1987); see also s. 65.021, F.S
9
See Heartwood 2, LLC v. Dori, 208 So. 3d 817, 822-23 (Fla. 3d DCA 2017) (“Any alleged defect in the deed into the
mortgagor … should remain for a separate action … or a curative deed to be obtained from the grantor by consent” (Salter, J.,
concurring in part and dissenting in part) (emphasis added)).
10
Baker v. Courts at Bayshore I Condominium Ass’n, Inc., 279 So. 3d 799, 801-02 (Fla. 2d DCA 2019) (emphasis removed);
see also Fed. Nat. Mortg. Ass’n v. Sanchez, 187 So. 3d 341, 343 (Fla. 4th DCA 2016) (holding in such case that the trial court
must first vacate the judgment, the sale and any certificates of title or sale); Caddy v. Wells Fargo Bank, N.A., 198 So. 3d
1149, 1150 (Fla. 4th DCA 2016); Wells Fargo Bank, N.A. v. Giesel, 155 So. 3d 411, 414 (Fla. 1st DCA 2014); Lucas v.
Barnett Bank of Lee Cty., 705 So. 2d 115, 116 (Fla. 2d DCA 1998); Fisher v. Villamil, 56 So. 559, 561-62 (Fla. 1911)
(“[W]hen a mortgage misdescribes the property intended to be mortgaged the mistake may be corrected by a proper
proceeding before judicial foreclosure; but, if the mistake has been carried into a bill, filed for the purpose of foreclosing such
mortgage, into the decree ordering foreclosure, into the advertisement, and into the deed, the purchaser at such foreclosure
sale cannot maintain a bill in equity to correct the description of the land as contained in the mortgage, in the decree, and in
the deed”).
11
Section 718.117(2)(d), F.S.
BILL: SB 886 Page 3
III. Effect of Proposed Changes:
The bill states that a deed containing a “scrivener’s error” conveys title to the “intended real
property” as if there had been no error, and states that each subsequent erroneous deed
containing the identical scrivener’s error also conveys title as if there had been no error.
The bill defines a “scrivener’s error” as a single error or omission in the legal description of the
“intended real property,” i.e. the property which the grantor intended to be conveyed by the deed,
that is one of the following:
an error or omission of one lot or block identification of a recorded platted lot,12
an error or omission of one unit, building, or phase identifications of a condominium or
cooperative unit, or
an error or omission in one directional designation or numerical fraction of a tract of land that
is described as a fractional portion of a section, township, or range.13
The bill states that deeds containing scrivener’s errors convey title to the intended property as if
there had been no error if:
the grantor held record title to the intended property at the time the deed containing the
scrivener’s error was executed,
the grantor or the erroneous deed did not hold title to any other real property in the same
subdivision, condominium, or cooperative development or in the same section, township,
or range described in the deed containing the scrivener’s error within 5 years before the
record date of that deed,
the record property is not described exclusively as a metes and bounds legal description, and
a curative notice evidencing the intended real property to be conveyed by the grantor is
recorded in the official records of the county where the intended real property is located.
The bill provides the form for a curative notice, which requires a description of the original
erroneous deed and any subsequent deeds containing the same error, a statement that the person
filing the notice has confirmed, through an examination of the official county records, that the
above-mentioned requirements for conveyance of title were met, and a statement that the real
property described in the notice was the property intended to be conveyed by the erroneous
deeds.
The bill states that circuit court clerks may accept a curative notice as evidence of a grantor’s
intent to convey the intended property, and states that the corrections made by the curative notice
relate back to the record date of the original erroneous deed and release any clouds or
encumbrances created by the erroneous deeds as to any property other than the intended real
property.
The bill states that its remedies are not exclusive and do not abrogate any other remedy under
Florida law.
12
For the purposes of the bill, transposition of lot and block identifications are considered one error.
13
For the purposes of the bill, an error or omission in the directional description and numerical fraction of the same call
is considered one error.
BILL: SB 886 Page 4
The bill allows for the correction of errors meeting its definition without having to file a claim
for reformation of deed or quiet title action in a court. The bill alters the rule established in case
law by more clearly defining the form of a curative deed and narrowing the types of errors that
constitute “scrivener’s errors” that may be corrected with a subsequent curative deed. However,
because the bill states that its remedies are not exclusive, it appears that deeds containing
erroneous legal descriptions of property that do not meet the bill’s definition of “scrivener’s
errors” may be remedied through the current method of filing actions for reformation of deed or
quiet title. The bill does not specify whether it is subject to the 20-year limitations period that
pertains to traditional claims for reformation of deed.
The bill takes effect July 1, 2020.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
D. State Tax or Fee Increases:
None.
E. Other Constitutional Issues:
None.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None.
B. Private Sector Impact:
By filing a curative notice, a property owner may be able to sufficiently clear title to
property without the expenses associated with a claim for reformation of deed or a quiet
title action.
BILL: SB 886 Page 5
C. Government Sector Impact:
The bill provides a method for correcting scrivener’s errors in deeds other than by a claim
of reformation of deed or quiet title, and therefore may reduce judicial labor. However,
the bill will potentially result in an increase in the workloads of court clerks.
VI. Technical Deficiencies:
None.
VII. Related Issues:
Lines 138-140 of the bill state that the court clerks “may” accept and record curative notices “as
evidence of the intent of the grantor in the erroneous deed.” The Legislature may wish to revise
this sentence to state that the clerks “shall” accept and record the curative notices and that the
notices are evidence of the intent of the grantor. As currently drafted, the language appears to
give clerks discretion in deciding whether to accept a notice and a duty or authority to evaluate
whether the curative notice is evidence of a grantor’s intent.
VIII. Statutes Affected:
This bill creates section 689.041 of the Florida Statutes.
IX. Additional Information:
A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
None.
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.
Florida Senate - 2020 SB 886 Florida Senate - 2020 SB 886
By Senator Powell
30-01022-20 2020886__ 30-01022-20 2020886__
1 A bill to be entitled 30 one error for the purposes of this subparagraph;
2 An act relating to errors in deeds; creating s. 31 2. An error or omission in no more than one of the unit,
3 689.041, F.S.; defining terms; providing that a deed 32 building, or phase identifications of a condominium or
4 containing a scrivener’s error conveys title as if 33 cooperative unit; or
5 there had been no such error if certain requirements 34 3. An error or omission in no more than one directional
6 are met; providing a form for a curative notice; 35 designation or numerical fraction of a tract of land that is
7 authorizing the clerks of the circuit court to accept 36 described as a fractional portion of a section, township, or
8 and record curative notices; providing for the 37 range; however, an error or omission in the directional
9 operation of a curative notice; providing 38 description and numerical fraction of the same call is
10 construction; providing an effective date. 39 considered one error for the purposes of this subparagraph.
11 40
12 Be It Enacted by the Legislature of the State of Florida: 41 The term “scrivener’s error” does not include any error in a
13 42 document that contains multiple errors.
14 Section 1. Section 689.041, Florida Statutes, is created to 43 (2) A deed that contains a scrivener’s error conveys title
15 read: 44 to the intended real property as if there had been no
16 689.041 Curative procedure for scrivener’s errors in 45 scrivener’s error, and, likewise, each subsequent erroneous deed
17 deeds.— 46 containing the identical scrivener’s error conveys title to the
18 (1) As used in this section, the term: 47 intended real property as if there had been no such error if all
19 (a) “Erroneous deed” means any deed, other than a quitclaim 48 of the following apply:
20 deed, which contains a scrivener’s error. 49 (a) Record title to the intended real property was held by
21 (b) “Intended real property” means the real property vested 50 the grantor of the first erroneous deed at the time the first
22 in the grantor and intended to be conveyed by the grantor in the 51 erroneous deed was executed.
23 erroneous deed. 52 (b) Within the 5 years before the record date of the
24 (c) “Scrivener’s error” means a single error or omission in 53 erroneous deed, the grantor of any erroneous deed did not hold
25 the legal description of the intended real property in no more 54 title to any other real property in the same subdivision,
26 than one of the following categories: 55 condominium, or cooperative development or in the same section,
27 1. An error or omission in no more than one of the lot or 56 township, and range, described in the erroneous deed.
28 block identifications of a recorded platted lot; however, the 57 (c) The intended real property is not described exclusively
29 transposition of the lot and block identifications is considered 58 by a metes and bounds legal description.
Page 1 of 6 Page 2 of 6
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 886 Florida Senate - 2020 SB 886
30-01022-20 2020886__ 30-01022-20 2020886__
59 (d) A curative notice is recorded in the official records 88 ...(Insert and repeat paragraph 2. as necessary to include
60 of the county in which the intended real property is located 89 each subsequent erroneous deed in the chain of title containing
61 which evidences the intended real property to be conveyed by the 90 the same erroneous legal description)...
62 grantor. 91
63 (3) A curative notice must be in substantially the 92 3. I have examined the official records of the county in
64 following form: 93 which the intended real property is located and have determined
65 94 that the deed dated ...(Date)..., and recorded on ...(Record
66 Curative Notice, Per Sec. 95.2311, F.S. 95 Date)... in O.R. Book ...., Page .... and/or Instrument No.
67 Scrivener’s Error in Legal Description 96 ...., official records of ...(Name of County)..., Florida,
68 97 establishes that record title to the intended real property was
69 The undersigned does hereby swear and affirm: 98 held by the grantor of the first erroneous deed at the time the
70 99 first erroneous deed was executed.
71 1. The deed which transferred title from ...(Insert 100
72 Name)... to ...(Insert Name)... on ...(Date)... and recorded on 101 4. I have examined or have had someone else examine the
73 _...(Record Date)... in O.R. Book ...., Page ...., and/or 102 official records of ...(Name of County)..., Florida, and certify
74 Instrument No. ...., of the official records of ...(Name of 103 that:
75 County)..., Florida, (hereinafter referred to as “first 104 a. Record title to the intended real property was held by
76 erroneous deed”) contained the following erroneous legal 105 the grantor of the first erroneous deed, ...(Insert Name)..., at
77 description: 106 the time that deed was executed.
78 107 b. The grantor of the first erroneous deed and the grantors
79 ...(Insert Erroneous Legal Description)... 108 of any subsequent erroneous deeds listed above did not hold
80 109 record title to any property other than the intended real
81 2. The deed transferring title from ...(Insert Name)... to 110 property in either the same subdivision, condominium or
82 ...(Insert Name)... and recorded on ...(Record Date)... in O.R. 111 cooperative or the same section, township and range, if
83 Book ...., Page ...., and/or Instrument No. ...., of the 112 described in this manner, at any time within the 5 years before
84 official records of ...(Name of County)..., Florida, contains 113 the date that the erroneous deed was executed.
85 the same erroneous legal description described in the first 114 c. The intended real property is not described by a metes
86 erroneous deed. 115 and bounds legal description.
87 116
Page 3 of 6 Page 4 of 6
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 886 Florida Senate - 2020 SB 886
30-01022-20 2020886__ 30-01022-20 2020886__
117 5. This notice is made to establish that the real property 146 subsequent erroneous deeds containing the same scrivener’s error
118 described as ...(insert legal description of the intended real 147 described in the curative notice and releases any cloud or
119 property)... (hereinafter referred to as the “intended real 148 encumbrance that any of the erroneous deeds may have created as
120 property”) was the real property that was intended to be 149 to any property other than the intended real property. The
121 conveyed in the first erroneous deed and all subsequent 150 correction relates back to the record date of the first
122 erroneous deeds. 151 erroneous deed.
123 152 (6) The remedies under this section are not exclusive and
124 ...(Signature)... 153 do not abrogate any right or remedy under the laws of this state
125 ...(Printed Name)... 154 other than this section.
126 155 Section 2. This act shall take effect July 1, 2020.
127
128 Sworn to (or affirmed) and subscribed before me this ....
129 day of ...., ...(year)..., by ...(name of person making
130 statement)....
131 ...(Signature of Notary Public - State of Florida)...
132 ...(Print, Type, or Stamp Commissioned Name of Notary
133 Public)...
134
135 Personally Known .... OR Produced Identification ....
136 Type of Identification Produced.............................
137
138 (4) The clerks of the circuit court for the circuit in
139 which any intended real property is located may accept and
140 record curative notices in the form described in subsection (3)
141 as evidence of the intent of the grantor in the erroneous deed
142 to convey the intended real property to the grantee in the
143 erroneous deed.
144 (5) A curative notice recorded pursuant to this section
145 operates as a correction of the first erroneous deed and all
Page 5 of 6 Page 6 of 6
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
•SJ
-Q .C
2 </>
-5
1
CO
.
TO O ¦B
C
< CD
CD -r-j w
CD -
¦C g
¦s CD
-2 -Q CD
O45
¦c 'S
O c:
iS D..O 0 0 c:
i
3 0 0
Q_ O
co
C o •2
C rQ
D) Co 52
0
.5 0
.. "o s CD
C D) S3 0 0
o CD C 5 c
o o
-C E CD S
=: 3 e e
CL LU 0)
0
i_ 0 o3
Q..b= 0
• '
C w CO *0
6 D) .t- 0
ra
0i g5
-4 >
CO
¦>, -+« ¦*-
JO
§1
O
£0 ig
P0
S£
c . .
2 0
i«
0 cfc;
-2 £
-Q '4-
AP EARANCERECORD
s>s
15
¦3
O
o ~
c2
0P
(DeliverBOTHcopiesofthisformtotheSenatororSenateProfesionalStafconductingthemeting)
The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Commerce and Tourism
BILL: SB 1192
INTRODUCER: Senator Gruters
SUBJECT: Tax on Aviation Fuel
DATE: January 13, 2020 REVISED: 1/14/20
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Reeve McKay CM Favorable
2. FT
3. AP
I. Summary:
SB 1192 repeals the excise tax imposed on aviation fuel, aviation gasoline, and kerosene sold or
brought into the state.
The bill takes effect July 1, 2020.
II. Present Situation:
Aviation Fuel Tax in Florida
Part III of ch. 206, F.S., imposes an excise tax of 4.27 cents per gallon on aviation fuel, aviation
gasoline, and kerosene sold in or brought into the state.1 The fuel sales tax, constitutional fuel
tax, county fuel tax, and municipal fuel tax are also imposed when aviation fuel is handled under
certain circumstances.2
Tax exemptions and credits are authorized under several conditions:
Airline fuel sold to certain qualified colleges and universities and exclusively used for flight
training is exempt from the excise tax. A supplier that sells aviation fuel to a qualified
1
“Aviation fuel” means fuel for use in aircraft, and includes aviation gasoline and aviation turbine fuels and kerosene, as
determined by the American Society for Testing Materials specifications D-910 or D-1655 or current specifications.
“Kerosene” means all aviation turbine fuels and any distillate known as diesel #1, K-1, or any product suitable for use as a
substitute for kerosene not taxed as a diesel fuel under chapter 206 part II, F.S. “Aviation gasoline” means any motor fuel
blended or produced specifically for use in aircraft which has been dyed in accordance with federal regulations. Aviation
gasoline does not include any such fuel used in any manner other than being placed in the storage tank of an aircraft.
2
Section 206.41(6), F.S. Current tax rates can be found in the Florida Office of Economic and Demographic Research’s
Florida Tax Handbook, 130 (2019), available at http://edr.state.fl.us/Content/revenues/reports/tax-
handbook/taxhandbook2019.pdf (last visited Jan. 13, 2020).
BILL: SB 1192 Page 2
college or university and does not collect the excise tax may receive an ultimate vendor
credit for the 4.27-cent excise tax previously paid.3
Kerosene prepackaged in containers of 5 gallons or less sold for home heating and cooking is
exempt from the excise tax. Packagers may qualify for a refund of taxes previously paid.4
An air carrier conducting certain scheduled operations or all-cargo operations is entitled to a
refund of 1.42 cents per gallon of the excise taxes imposed on aviation fuel purchased by
such a carrier.5
An air carrier transporting persons or property for compensation is entitled to a refund, not to
exceed 0.6 percent of the wages paid by the carrier to certain employees, of the excise taxes
imposed on aviation fuel purchased by such a carrier.6
The tax refund provided to an air carrier may not exceed 4.27 cents per gallon of aviation
fuel purchased by the carrier.7
Every retail dealer selling aviation fuel to the public must clearly post on each pump or
dispensing device the price of the aviation fuel and whether the price includes tax.8
The excise tax on aviation fuel was created in 1985. In 1996, in an attempt to attract new airlines
to the state, the Legislature established an aviation fuel tax credit for air carriers offering
transcontinental jet services that increased their Florida workforces by more than 1000 percent.
The original tax credit expired in 2001 and was reauthorized without an expiration date after the
events of September 11, 2001. Chapter 16-220, L.O.F., provided that carriers may not qualify for
the tax credit after 2016 but may continue receiving the credit until 2019, after which the tax
credit expired and the excise tax on aviation fuel decreased from 6.9 to 4.27 cents per gallon.
The Transportation Revenue Estimating Conference reported $56,400,000 in gross revenue from
the aviation fuel excise tax in Fiscal Year 2018-2019. After $12,800,000 in tax credits and
refunds were distributed and $3,700,000 in administrative fees and service charges were
deducted, $39,900,000 was transferred to the State Transportation Trust Fund.9
Aviation Fuel Tax in Other States
All but ten states impose a specific tax on aviation fuel. Oklahoma (.08 cents per gallon),
Georgia (.01 cents per gallon), and Hawaii (.01 cents per gallon) impose some of the lowest
taxes, and Vermont (31.01 cents per gallon), Maine (30 cents per gallon), and Massachusetts
(25.3 cents per gallon) impose the highest taxes. Florida’s tax is the ninth lowest state tax on
aviation fuel.10
3
Section 206.9825(1)(b), F.S.
4
Section 206.9825(2)(c), F.S.
5
Section 206.9826, F.S.
6
Section 206.9855, F.S.
7
Supra note 3.
8
Section 206.9837, F.S.
9
Florida Office of Economic and Demographic Research, Revenue Estimating Conference – Revenues to State
Transportation Trust Fund, 6 (August 2019), available at
http://edr.state.fl.us/Content/conferences/transportation/archives/190802transportation.pdf (last visited Jan. 13, 2020).
10
United States Energy Information Administration, 2019 State Aviation Fuel Taxes, available at
https://www.eia.gov/petroleum/marketing/monthly/xls/aviationtaxes.xls (last visited Jan. 13, 2020).
BILL: SB 1192 Page 3
III. Effect of Proposed Changes:
Section 1 repeals part III of chapter 206, F.S., to remove the excise tax imposed on aviation fuel,
aviation gasoline, and kerosene sold or brought into the state.
Section 2 amends s. 163.3206(2)(a), F.S., relating to fuel terminal infrastructure, to remove a
reference to the definition of “aviation fuel” in s. 206.9815, F.S., which is deleted by section 1 of
the bill. The reference is replaced with the same definition of the term.
Sections 3, 4, 5, 6, 7, 8, and 9 make conforming changes to statutes containing references to the
repealed provisions.
Section 10 provides an effective date of July 1, 2020.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
The bill does not require counties or municipalities to spend funds or to take an action
requiring expenditure, does not reduce the authority of municipalities and counties to
raise revenues, and does not reduce the percentage of a state tax shared with
municipalities and counties. Counties and municipalities do receive shares of certain state
taxes on aviation fuel, but not the excise tax on aviation fuel that the bill would repeal.
Deposits of the aviation fuel tax to the State Transportation Trust Fund are dedicated to
aviation-related purposes.11 The provisions of Article VII, Sections 18(b) and (c) of the
Florida Constitution do not apply to the bill.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
D. State Tax or Fee Increases:
None.
E. Other Constitutional Issues:
None.
11
Florida Department of Transportation, Florida’s Transportation Tax Sources, 30 (2017), available at
https://fdotwww.blob.core.windows.net/sitefinity/docs/default-source/content/comptroller/pdf/gao/revmanagement/tax-
primer.pdf?sfvrsn=f1eadaf7_0 (last visited Jan. 13, 2020).
BILL: SB 1192 Page 4
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
The Revenue Estimating Conference has not yet met regarding the bill.
B. Private Sector Impact:
Dealers and purchasers paying the excise tax on aviation fuel will realize savings.
C. Government Sector Impact:
The bill will decrease deposits to the State Transportation Trust Fund by an indeterminate
amount.
The Department of Revenue estimates that $85,113 in nonrecurring funds would be
required to modify the department’s tax systems in order to comply with the bill’s
provisions.
VI. Technical Deficiencies:
None.
VII. Related Issues:
None.
VIII. Statutes Affected:
This bill substantially amends the following sections of the Florida Statutes: 163.3206, 206.42,
206.9915, 207.003, 207.005, 213.053, 332.007, and 332.009.
This bill repeals the following sections of the Florida Statutes: 206.9815, 206.9825, 206.9826,
206.9835, 206.9837, 206.9845, 206.9855, 206.9865, and 206.9875.
IX. Additional Information:
A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
None.
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.
Florida Senate - 2020 SB 1192 Florida Senate - 2020 SB 1192
By Senator Gruters
23-01453-20 20201192__ 23-01453-20 20201192__
1 A bill to be entitled 30 determined by the American Society for Testing and Materials
2 An act relating to the tax on aviation fuel; repealing 31 specifications D-910 or D-1655 or current specifications as
3 ss. 206.9815, 206.9825, 206.9826, 206.9835, 206.9837, 32 defined in s. 206.9815.
4 206.9845, 206.9855, 206.9865, and 206.9875, F.S., 33 3. Diesel fuel as defined in s. 206.86.
5 relating to definitions, the tax on aviation fuel, 34 4. Gas as defined in s. 206.9925.
6 refunds for certain air carriers, administration of 35 5. Motor fuel as defined in s. 206.01.
7 the tax, disclosure of price, distribution of 36 6. Natural gas fuel as defined in s. 206.9951.
8 proceeds, refunds to carriers, commercial air carrier 37 7. Oil as defined in s. 206.9925.
9 registration and reporting, and a tax exemption for 38 8. Petroleum fuel as defined in s. 525.01.
10 federal entities, respectively; amending ss. 163.3206, 39 9. Petroleum product as defined in s. 206.9925.
11 206.42, 206.9915, 207.003, 207.005, 213.053, 332.007, 40 Section 3. Subsection (1) of section 206.42, Florida
12 and 332.009, F.S.; conforming provisions to changes 41 Statutes, is amended to read:
13 made by the act; providing an effective date. 42 206.42 Aviation gasoline exempt from excise tax; rocket
14 43 fuel.—
15 Be It Enacted by the Legislature of the State of Florida: 44 (1) Each and every dealer in aviation gasoline in the state
16 45 by whatever name designated who purchases from any terminal
17 Section 1. Part III of chapter 206, Florida Statutes, 46 supplier, importer, or wholesaler, and sells, aviation gasoline
18 composed of ss. 206.9815, 206.9825, 206.9826, 206.9835, 47 (A.S.T.M. specification D-910 or current specification), of such
19 206.9837, 206.9845, 206.9855, 206.9865, and 206.9875, Florida 48 quality not adapted for use in ordinary motor vehicles, being
20 Statutes, is repealed. 49 designed for and sold and exclusively used for aircraft, is
21 Section 2. Paragraph (a) of subsection (2) of section 50 exempted from the payment of taxes levied under this part, but
22 163.3206, Florida Statutes, is amended to read: 51 is subject to the tax levied under part III.
23 163.3206 Fuel terminals.— 52 Section 4. Subsection (3) of section 206.9915, Florida
24 (2) As used in this section, the term: 53 Statutes, is amended to read:
25 (a) “Fuel” means any of the following: 54 206.9915 Legislative intent and general provisions.—
26 1. Alternative fuel as defined in s. 525.01. 55 (3) The provisions of ss. 206.01, 206.02, 206.026, 206.027,
27 2. Aviation fuel. As used in this subparagraph, the term 56 206.028, 206.051, 206.052, 206.054, 206.055, 206.06, 206.07,
28 “aviation fuel” means fuel for use in aircraft, and includes 57 206.075, 206.08, 206.09, 206.095, 206.10, 206.11, 206.12,
29 aviation gasoline and aviation turbine fuels and kerosene, as 58 206.13, 206.14, 206.15, 206.16, 206.17, 206.175, 206.18,
Page 1 of 6 Page 2 of 6
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 1192 Florida Senate - 2020 SB 1192
23-01453-20 20201192__ 23-01453-20 20201192__
59 206.199, 206.20, 206.204, 206.205, 206.21, 206.215, 206.22, 88 206 for each gallon of fuel purchased in this state during the
60 206.24, 206.27, 206.28, 206.416, 206.42, 206.44, 206.48, 206.49, 89 reporting period when the diesel fuel or motor fuel tax was paid
61 206.56, 206.59, 206.86, 206.87, 206.872, 206.873, 206.8735, 90 at the time of purchase. If the tax paid under parts I, II, and
62 206.874, 206.8741, 206.8745, 206.94, and 206.945, and 206.9815 91 III IV of chapter 206 exceeds the total tax due under this
63 shall, as far as lawful or practicable, be applicable to the 92 chapter, the excess may be allowed as a credit against future
64 levy and collection of taxes imposed pursuant to this part as if 93 tax payments, until the credit is fully offset or until eight
65 fully set out in this part and made expressly applicable to the 94 calendar quarters shall have passed since the end of the
66 taxes imposed herein. 95 calendar quarter in which the credit accrued, whichever occurs
67 Section 5. Section 207.003, Florida Statutes, is amended to 96 first. A refund may be made for this credit provided it exceeds
68 read: 97 $10.
69 207.003 Privilege tax levied.—A tax for the privilege of 98 Section 7. Paragraph (h) of subsection (8) of section
70 operating any commercial motor vehicle upon the public highways 99 213.053, Florida Statutes, is amended to read:
71 of this state shall be levied upon every motor carrier at a rate 100 213.053 Confidentiality and information sharing.—
72 which includes the minimum rates provided in parts I, II, and 101 (8) Notwithstanding any other provision of this section,
73 III IV of chapter 206 on each gallon of diesel fuel or motor 102 the department may provide:
74 fuel used for the propulsion of a commercial motor vehicle by 103 (h) Names and addresses of persons paying taxes pursuant to
75 such motor carrier within the state. 104 part III IV of chapter 206 to the Department of Environmental
76 Section 6. Subsection (3) of section 207.005, Florida 105 Protection in the conduct of its official duties.
77 Statutes, is amended to read: 106
78 207.005 Returns and payment of tax; delinquencies; 107 Disclosure of information under this subsection shall be
79 calculation of fuel used during operations in the state; credit; 108 pursuant to a written agreement between the executive director
80 bond.— 109 and the agency. Such agencies, governmental or nongovernmental,
81 (3) For the purpose of computing the carrier’s liability 110 shall be bound by the same requirements of confidentiality as
82 for the road privilege tax, the total gallons of fuel used in 111 the Department of Revenue. Breach of confidentiality is a
83 the propulsion of any commercial motor vehicle in this state 112 misdemeanor of the first degree, punishable as provided by s.
84 shall be multiplied by the rates provided in parts I, II, and 113 775.082 or s. 775.083.
85 III IV of chapter 206. From the sum determined by this 114 Section 8. Subsection (7) of section 332.007, Florida
86 calculation, there shall be allowed a credit equal to the amount 115 Statutes, is amended to read:
87 of the tax per gallon under parts I, II, and III IV of chapter 116 332.007 Administration and financing of aviation and
Page 3 of 6 Page 4 of 6
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2020 SB 1192 Florida Senate - 2020 SB 1192
23-01453-20 20201192__ 23-01453-20 20201192__
117 airport programs and projects; state plan.— 146 (d) The department may fund up to 50 percent of the portion
118 (7) Subject to the availability of appropriated funds in 147 of eligible project costs which are not funded by the Federal
119 addition to aviation fuel tax revenues, the department may 148 Government except that the department may initially fund up to
120 participate in the capital cost of eligible public airport and 149 75 percent of the cost of land acquisition for a new airport or
121 aviation discretionary capacity improvement projects. The annual 150 for the expansion of an existing airport which is owned and
122 legislative budget request shall be based on the funding 151 operated by a municipality, a county, or an authority, and shall
123 required for discretionary capacity improvement projects in the 152 be reimbursed to the normal statutory project share when federal
124 aviation and airport work program. 153 funds become available or within 10 years after the date of
125 (a) The department shall provide priority funding in 154 acquisition, whichever is earlier.
126 support of: 155 Section 9. Section 332.009, Florida Statutes, is amended to
127 1. Land acquisition which provides additional capacity at 156 read:
128 the qualifying international airport or at that airport’s 157 332.009 Limitation on operation of chapter.—Nothing in this
129 supplemental air carrier airport. 158 chapter shall be construed to authorize expenditure of aviation
130 2. Runway and taxiway projects that add capacity or are 159 fuel tax revenues on space transportation projects. Nothing in
131 necessary to accommodate technological changes in the aviation 160 this chapter shall be construed to limit the department’s
132 industry. 161 authority under s. 331.360.
133 3. Airport access transportation projects that improve 162 Section 10. This act shall take effect July 1, 2020.
134 direct airport access and are approved by the airport sponsor.
135 4. International terminal projects that increase
136 international gate capacity.
137 (b) No single airport shall secure discretionary capacity
138 improvement project funds in excess of 50 percent of the total
139 discretionary capacity improvement project funds available in
140 any given budget year.
141 (c) Unless prohibited by the General Appropriations Act or
142 by law, the department may transfer funds within each category
143 of the airport and aviation discretionary capacity improvement
144 program to maximize the aviation services or federal aid
145 available to this state.
Page 5 of 6 Page 6 of 6
CODING: Words stricken are deletions; words underlined are additions. CODING: Words stricken are deletions; words underlined are additions.
¦SJ
•Q .c
CO -5
,o (/)
Q. C
Q.
o 05 § "5
0 co
0
c-
£T
Q
•e -S
(1)
-c
s
0 ¦5
-c
0 0
-O0
•C
0
o c: -Q
0.0 0 0 c:
L- 0
3 o
mg _C0 o rQ
0
0
<D
Q
. . TJ
£
O
C5)
0
O) f
cr 0
- O
Q.
0
0
C D) S 0
o CO c D c
E ¦o o
J 52
CL yj COs
s 0
i_ 0
Q.i= 0
-4-»
Q.
CO W 0 C
g> 8 O) 0
•c 0
o S
«5
.9. 0
'>>
t
\
N
JO o|
c S
JQ
O 0* 0
S0
l
m
0 -Q **-
0
AP EARANCERECORD %}
> a?
1S
Li¬
%%0
0
-Q
s (/)
«
C
'c
JZ
&
O)
S
<a < O ¦ic
0
(DeliverBOTHcopiesofthisformtoteSenatororSenateProfesionalStafconductingthemeting) i 0
0 &
S'
1_ 0 o
3 TO
o O
u_ O) cr
' c 0 ¦C
oQ
cc
1
Hh-1
c -*->
0
0
0
O) !- c. 0 O
,c (/) CD
'Ci
0) (J) O) L_ C iS
Sb U) c Q. 'i_
O (D 0 0 Co
Ql
O 1z CO
i-
O
O
¦O
T5
co
Q.
DC 0
CL
Q.
.£
0
0
1 < C < Thisformispartofthepublicrecordforthismeting.s-001(10/14/14)
Q)
-Q .to
8 s
CM
I
w5
ro o 00
0
"S
J
G> 0 0
CD 0
¦O -c
0 =
0
e
CO
-0
OQ t -S o
CD OC .Vg -SJ
c
CD Q..O 0C
1c S Q.*
2
CD
O CD g ™ q -S
CO
E 00 .-Q
C
O
Is-
0
C
.. "o
D) 03
i 05 $
|1 8
5
s q
?¦
O £8
§O JC
Q_
ra's
o
Q-. :
CD <2
T3
0
4_l
05
0 C
O)
I 8S
0
E o> 0
0
Q.
00
O
JO
§
1
O 0'S
50 'q
jg
a 1 P0
¦-§ E
C
i
D)
o 20 ,C
> to •I* •3
0
z
0 Co ¦'fel
aE
0
E
g
>
C
0
0
>"
l1
a €
¦8
0 Q 4?
y= i_
8* <o
<
-« •
c
ifi
c
0 M
c
0
-Q 1
0 O ¦0 ro £
E C JZ 5
E < O 0
s:
0 o ¦§
CD
0 1
>
o
O
-
#o 0
I
O)
0
0
0
6
D 0 0 o
0
3
¦§ €
JZ O) O 0
U_ o O z LL CD o
-t * 0 C 0 10
CO
Q
Os
c
o
+=
(
0
LL
O
o
8?
b
o
CM
T- Las V
0 -j
c
0
0
t_
-t •
(0 C
o
t:
0
.59
CD
i
.c
¦C3
CD 3 C
J
0
0 0
0
0
Street
D
C
2
2
Q.
0
D)
C
¦C
0
|2
d)
CO o {- L_ 0 0 •S
¦q "O
0
C Q. 0
0 3
o ID 0
I z O
5 <
Q.
CD
Q.
< E e
o
¦32
5
cc
z .to
-S
1 0
0
¦5
CD
05
>- ¦C
03 CD
-Q C
-c
O
v -Q
0
i_
CD c:
CD CD
3
+-> P-
0 O -S
0 ¦+- ;£_}
Cd'c
O) .c
0 •5
_1 .Cp
CO
c
o
3 e
0
i_ 0
0
-1 i "
Q.
0
D)
0
-1 0
0 C
'>¦ h/
O0
_Q CS
JO
O &g
SC
n\
P0
5S
c . - 0)
2 0
z .c
5
0
c 21 -2 s 0 eh; 0
0
0 S3 ,c
¦p
AP EARANCERECORD >- Cl 0
05 0
"2
0
¦Q o
o
ro 0 0
sz 5
O •5C
0 •Q
(DeliverBOTHcopiesofthisformtoteSenatororSenateProfessionalStafconductingthemeting) _o 0
8-
. 0 o 0
0
Z3
¦0 €
H-
O cr o 0
sQ
CD
c»
c
' +->
c
0
!_
0
¦c
0
0
o
0
(/) C .t
C i$
i_
CL '1
0 03 1
0
01 0 0 .C £
Q. C) •a
Q. 0
< E iS
¦52
2
-Q .TO
-Q CD
CD (/) T
.O
8- 1 ro §
cts
¦5
TO
0) CD
-C
-c
D
-Q
¦c ¦2
O c:
CQ Q. .O 0
i
CD
S CD 3
¦+- 8-
cn E
c 0
0 25
.5 C C TO
C: TO
,<0 0 ¦c
o
€ .TO
TO
. . "O 0
C O) to TO TO
cc c s> C C
o o o
E 05 S
3
0. e 12
LU 0) 0 0
Q.-b= 0
-4 1
Q.
C/) TO
-C 0 0 5S
:
0) O " D 0
¦ CD
5
01
-i-j
10
0
¦>
_Q
2
§1o
O 0 0
1£
C O
0 . .
o 2 0
TO TO -t;
E C
o
M
c 0
0 ¦Q
AP EARANCERECORD > B.
D
0
0 -Q
(/) O
c o
05
0 p 0
SZ 0 £
CD
< O 0
(DeliverBOTHcopiesofthisformtotheSenatororSenateProfesionalStaffconductingthemeeting) 0
8-
0 o
0 "O
O 3 o
LL. C C
& C 0 -p
CD
Q - -> 0
0 TO
D) 0 O
.C CD
Q> 0 0) O)
0 C iS
C Q. 'i_
+= </)
0 0 - 0 0 0
l i_ 05 (£ 0 .£
Q. £= T5 Ql 0
0 0 ~o Q. Q. 0
I z: -5 < C < £ Thisformispartofthepublicrcordforthismeeting.s-01(10/14/14)
-3J
-Q .
IQ.
c
C
-c
D
CD TO §
CM 0 CD
o
CD 0 C
CD
CD
C
0 E ¦c ¦ -ft CD
- o o c -Q
QQ o Q-.Q £ CD C
4 ¦ CD CQ
I '0 0
-4 > Q.
"t if) 0 CD
CM
CM
(§)
0 0 -8
0) 03 %
O
LO
>
0 0
c c
•C D
o
00 JO
l
JO s D
0 c o
C '0
Soc
O o
JO E ft: ¦0
(2 o
Q_ iy ro 5
Q.-S:
£
0
CD CD
Q.
¦4->
C <5 0 CD c1
'0)
o .ts CD
o ¦«5 5 £ g£
CO -4 >
CM 0
CO '>
o
JO c€
JO
o
CD "5
P CD
SS
¦Q
C C .1
o 2$
_l CD 0 is
LL E
L-.
o ¦t:
-8 .£
o
0
0 0
0 IS
AP EARANCERECORD 's_
0
D §>«
S'®
¦0
h= CD
c
0
CO
c ¦0 §
¦0
0 0 0 g TO
0) c 0)
-4 > JZ CD £
Z5
LL 0 ) < 'O O -2
<0
(DeliverBOTHcopiesofthisformtotheSenatororSenateProfessionalStafconductingthemeting) 0 O
C E 0 ¦
o > 0 0 0 0 0 .t- co
0 O -0 0
0 < 0 o
_CT3
00 > < 0 0)
0 (D -Q
'*'* O
s_ !_ 0
0 o z JO '¦4c> 0 0 -c
TO
CD
Q
C -I >
CO
'c
CD ¦s is c 8 CD
o 0 £ 0 . 0 0
O .C CD
0 ) LO 0H o 0 0)
o
C ¦ft
O CD<?> - CO 0 0 O)
c
2 C
"i
CD
.o
CM 0 Q_
0 ¦4~J CD
o 0 p £ 0
¦0 0 a: 0 .p
0) -ft:
Cm jQ a. CD
o 0 n ¦0 a. a. : <
H z 5 < C < E
-2 -Q
-Q
CD 8
1 §:
CD
co
<D
0
CD
CQ
c
)
1c
a>
6
T
AP EARANCERECORD
)
(DeliverBOTHcopiesofthisformtotheSenatororSenateProfesionalStafconductingthemeting)
(/)
<0
o 0 1 0
i_
CL <= T5
o ¦D
o
1 2 3 <
.to
-£
"5
CT5
•c
CD
•Q
£
-iC
TO
CD
8-
o
cd jo
.c
-5
TO
c
o
52
CD
Cl
11o
TO C
c:
o CD
ew
£
o
£
IS
AP EARANCERECORD ai
'-5 TO
TO u
CD
-Q
TO
£
TO
(DeliverBOTHcopiesofthisformtotheSenatororSenateProfesionalStafconductingthemeting) C TO
.o
; 8-
o
TO ¦D
C
O
TO
TO
C o
.CO
S
D
C
~W
£ Thisformispartofthepublicrecordforthismeting.s-01(10/14/14)
CourtSmart Tag Report
Room: EL 110 Case No.: Type:
Caption: Senate Commerce Committee Judge:
Started: 1/14/2020 2:31:48 PM
Ends: 1/14/2020 3:06:36 PM Length: 00:34:49
2:31:56 PM Chair Gruters called meeting to order
2:32:09 PM Tab 1, SB 838, Sen. Simmons
2:32:42 PM Sen. Simmons yielded his time to Sen. Montford to present his bill, SB 848
2:33:21 PM Sen. Montford explains bill
2:35:57 PM Sen. Montford waived close
2:36:08 PM Roll call
2:36:15 PM SB 848 Passed favorable
2:36:29 PM SB 838, Sen. Simmons
2:37:31 PM 76118 amendment
2:37:52 PM Amendment passed
2:38:12 PM 218100 amendment
2:38:24 PM Amendment passed
2:38:36 PM 621802 amendment
2:38:54 PM Amendment passed
2:39:07 PM 506566 amendment
2:39:27 PM Amendment passed
2:39:41 PM On bill as amended
2:40:00 PM Waived close
2:40:06 PM Roll call
2:40:11 PM SB 838 Passed CS
2:40:20 PM Tab 3, 886, Sen. Powell
2:41:19 PM SB 886, pass favorably
2:41:33 PM SB 1192, Sen. Gruters
2:41:54 PM Sen. Gruters explain bill
2:42:46 PM Question, Sen. Torres
2:42:56 PM Response, bill sponsor
2:43:05 PM Follow up question Sen. Torres
2:43:16 PM Response
2:44:06 PM Eric Fletcher, speaker
2:45:30 PM Question of sponsor
2:46:00 PM Response
2:46:04 PM Lisa Walers, CEO FL Airports Council
2:47:45 PM Chad Rosenstein, Lee Co. Port Authority
2:51:53 PM Luis Olivero, FL Airports Council (Orlando)
2:52:59 PM Sen. Torres, question
2:53:07 PM Speaker response
2:53:19 PM Follow up
2:53:24 PM Response
2:53:37 PM Sen. Stewart, question
2:54:12 PM Response
2:54:45 PM Continue questions and response
2:55:22 PM Sen. Hutson, question
2:55:31 PM Response of speaker
2:55:51 PM Continue line of quesitoning
2:56:19 PM Fred Baggett, Airlines for America
3:00:44 PM Sen. Stewart, comment
3:01:37 PM Sen. Wright, comments
3:02:05 PM Sen. Torres, comments
3:04:44 PM Sen. Gruters close on bill
3:05:49 PM Roll call
3:06:08 PM SB 1192 passes favorably
3:06:19 PM Sen. Torres moved adjournment
File and source
- File
- 2020-01-14_post-meeting-packet_5327.pdf
- Size
- 5,153,020 bytes
- SHA-256
- 4ddd8de497e08ea2c333aa9e6ab8599f658b5ca9efbab891a892ec384a529444
- Original
- No public link identified.