The Florida Senate, Committee Meeting Expanded Agenda: Commerce and Tourism, April 5, 2011
Summary
This is the expanded agenda of The Florida Senate Committee on Commerce and Tourism for its meeting on Tuesday, April 5, 2011, with Senator Detert as Chair and Senator Dockery as Vice Chair. The agenda lists bills including SB 474 on sales representative contracts and SB 942 on tax credits for research and development. A bill analysis dated April 4, 2011 says SB 474, introduced by Senator Evers, repeals the provision requiring written contracts between principals and commissioned sales representatives, effective July 1, 2011. A bill analysis of SB 942, introduced by Senator Bogdanoff, says the bill creates an R&D tax credit against Florida corporate income tax, with a maximum of $15 million approved by the Department of Revenue during any calendar year.
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2011 Regular Session The Florida Senate
COMMITTEE MEETING EXPANDED AGENDA
COMMERCE AND TOURISM
Senator Detert, Chair
Senator Dockery, Vice Chair
MEETING DATE: Tuesday, April 5, 2011
TIME: 10:15 a.m.—12:15 p.m.
PLACE: James E. "Jim" King, Jr., Committee Room, 401 Senate Office Building
MEMBERS: Senator Detert, Chair; Senator Dockery, Vice Chair; Senators Flores, Gaetz, Lynn, Montford, and
Ring
BILL DESCRIPTION and
TAB BILL NO. and INTRODUCER SENATE COMMITTEE ACTIONS COMMITTEE ACTION
1 SB 474 Sales Representative Contracts; Repeals a provision
Evers relating to sales representative contracts,
(Identical H 4023, Compare CS/H commissions, requirements, termination of
5005) agreements, and civil remedies.
CM 04/05/2011
JU
RC
2 SB 942 Tax Credits For Research and Development;
Bogdanoff Provides a tax credit for certain research and
(Similar CS/H 671) development expenses. Provides eligibility
requirements for research and development tax
credits. Provides limitations regarding eligibility.
Provides an amount for such credit. Provides a
maximum amount of credit that may be taken during a
single tax year by a business enterprise. Prohibits the
Department of Revenue from unreasonably
withholding approval to sell or transfer an unused tax
credit amount, etc.
CM 04/05/2011
BC
3 SB 976 Capital Formation for Infrastructure Projects; Provides
Bogdanoff for creation of the Florida Infrastructure Fund
(Similar H 943, Compare S 252) Partnership. Provides the partnership's purpose and
duties. Provides for management of the partnership
by the Florida Opportunity Fund. Authorizes the fund
to lend moneys to the partnership. Authorizes the
partnership to invest in certain infrastructure projects.
Creates the Florida Infrastructure Investment Trust.
Provides for the trust's issuance of certificates to
investment partners who invest in the partnership,
etc.
CM 04/05/2011
BC
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COMMITTEE MEETING EXPANDED AGENDA
Commerce and Tourism
Tuesday, April 5, 2011, 10:15 a.m.—12:15 p.m.
BILL DESCRIPTION and
TAB BILL NO. and INTRODUCER SENATE COMMITTEE ACTIONS COMMITTEE ACTION
4 SB 994 Public Records/Public Airports; Provides definitions.
Latvala Provides an exemption from public records
(Compare CS/H 913) requirements for proprietary confidential business
information submitted to or held by a public airport
and for any proposal or counterproposal exchanged
between the governing body of a public airport and a
nongovernmental entity relating to the sale, use,
development, or lease of airport land or airport
facilities. Provides for exceptions to the exemptions.
Provides for future legislative review and repeal of the
exemptions under the Open Government Sunset
Review Act. Provides a finding of public necessity.
CA 03/14/2011 Fav/1 Amendment
CM 04/05/2011
GO
5 SB 1548 Streamlined Sales and Use Tax Agreement; Revises
Lynn definitions. Specifies certain facilities that are exempt
(Compare H 455) from the transient rentals tax. Eliminates the use of
brackets in the calculation of sales and use taxes.
Provides that an exception relating to food and drink
concessionaire services from the tax on the license or
rental fee for the use of real property is limited to the
space used exclusively for selling and distributing
food and drinks. Provides that the amendment to the
exception from the tax on the license or rental fee for
the use of real property is retroactive and remedial in
nature, etc.
CM 04/05/2011
BC
6 SB 1626 Television Picture Tubes; Repeals provisions relating
Lynn to television picture tube labeling requirements.
(Compare CS/H 4013, CS/H 5005)
CM 04/05/2011
7 SB 1632 Florida Industrial Development Corporation; Repeals
Lynn provisions relating to the Florida Industrial
(Identical H 4033) Development Corporation. Deletes references to
conform to changes made by the act.
CM 04/05/2011
BC
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COMMITTEE MEETING EXPANDED AGENDA
Commerce and Tourism
Tuesday, April 5, 2011, 10:15 a.m.—12:15 p.m.
BILL DESCRIPTION and
TAB BILL NO. and INTRODUCER SENATE COMMITTEE ACTIONS COMMITTEE ACTION
8 SB 1878 Jurisdiction of the Courts; Authorizes a person to
Margolis serve process on the Secretary of State if other
(Identical H 1337) representatives of a corporation cannot be served.
Revises the definition of the term "foreign judgment"
for purposes of the Florida Enforcement of Foreign
Judgments Act. Clarifies that an arbitral tribunal
receiving a request for an interim measure to
preserve evidence in a dispute governed by the
Florida International Commercial Arbitration Act need
only consider to the extent appropriate the potential
harm that may occur if the measure is not awarded,
etc.
CM 04/05/2011
JU
BC
9 SB 2050 Destination Resorts; Creates the Destination Resort
Braynon Commission within the Department of Revenue.
(Similar H 1415, S 1708) Exempts the Destination Resort Commission from
specified provisions of the Administrative Procedure
Act. Creates the Destination Resort Act. Provides that
the Destination Resort Commission is a separate
budget entity from the Department of Revenue.
Provides for the appointment and qualifications of
members of the commission. Provides for the
selection of the chair and vice chair of the
commission. Provides that the chair is the
administrative head of the commission, etc.
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Presentation by the Agency for Workforce Innovation
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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 Commerce and Tourism Committee
BILL: SB 474
INTRODUCER: Senator Evers
SUBJECT: Sales representative contracts
DATE: April 4, 2011 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. McCarthy Cooper CM Pre-meeting
2. JU
3. RC
4.
5.
6.
I. Summary:
This bill repeals s. 686.201, F.S., relating to sales representatives contracts.
Enacted in 1984, this provision requires a written contract between principal and commissioned
sales representatives which specifies the terms of the commission.
In the event that there was no written contract, this provision requires that the sales
representative be paid within 30 days of termination of the unwritten contract. Should the
principal not comply with this requirement, the sales representative has a cause of action for
damages equal to triple the amount of commission found to be due, and reasonable attorney’s
fees and court costs.
Under current law, licensed real estate brokers, sales associates, and appraisers are exempt from
this provision.
This bill repeals s. 686.201, F.S.
II. Present Situation:
Pursuant to s. 686.201, F.S., when a principal contracts with a sales representative to solicit
orders within this state, the contract must be in writing and shall set forth the method by which
the commission is to be computed and paid. The principal must provide the sales representative
with a signed copy of the contract and shall obtain a signed receipt for the contract from the sales
representative.
BILL: SB 474 Page 2
In the event the contract between the sales representative and the principal is terminated and the
contract was not reduced to writing, all commissions due must be paid within 30 days after
termination. If the principal fails to comply as required, the sales representative has a cause of
action for damages equal to triple the amount of the commission found to be due. The prevailing
party in any such action is entitled to an award of reasonable attorney fees and costs.
This provision does not apply to real estate brokers, sales associates or appraisers licensed
pursuant to ch. 475, F.S., who are performing within the scope of their license.
A sales representative means a person or business which contracts with a principal to solicit
orders and who is compensated, in whole or in part, by commission, but does not include a
person or business which places orders for his or her own account for resale, or a person who is
an employee of the business.1
A principal means a person or business which:
1. Manufactures, produces, imports, or distributes a product or service.
2. Contracts with a sales representative to solicit orders for the product or service.
3. Compensates the sales representative, in whole or in part, by commission.2
III. Effect of Proposed Changes:
Section 1 would repeal s. 686.201, F.S. It would eliminate the statutory requirement that
contracts between sales representatives and principals to solicit orders within this state be in
writing and the remedies associated with a failure of the parties to have a written contract upon
termination of the relationship while commissions are still owed.
Section 2 provides that the act will take effect July 1, 2011.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
1
Section 686.201(1)(c), F.S.
2
Section 686.201(1)(b), F.S.
BILL: SB 474 Page 3
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None.
B. Private Sector Impact:
To the extent that the sales representative fails to obtain a written contract for their
services, and they have a dispute with the principal over commissions, they will have less
leverage in resolving their disputes.
Conversely, the principals will no longer be subject to triple the amount of commission
found to be due should they lose in a dispute with a commissioned sales representative.
To the extent that the relationship between sales representatives and principals is
outdated, there will be minimal impact on both parties.
C. Government Sector Impact:
None
VI. Technical Deficiencies:
None.
VII. Related Issues:
There are currently 33 states with laws that offer sales representatives some form of protection
with respect to their commissions.
VIII. Additional Information:
A. Committee Substitute – Statement of Substantial 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.
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 Commerce and Tourism Committee
BILL: SB 942
INTRODUCER: Senator Bogdanoff
SUBJECT: Tax Credits for Research and Development
DATE: March 30, 2011 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Pugh Cooper CM Pre-meeting
2. BC
3.
4.
5.
6.
I. Summary:
Congress first enacted a research and development (R&D) tax credit in 1981 to encourage
scientific initiatives and innovation among U.S. businesses. Currently, 38 states offer R&D tax
credits against corporate or other state tax liability.
SB 942 creates an R&D tax credit against Florida corporate income tax liability. The maximum
amount of R&D tax credits that can be approved by the Department of Revenue (DOR) during
any calendar year is $15 million. Credits cannot be claimed until the tax year that begins on or
after January 1, 2012.
The bill outlines a formula for computing the tax credit. Basically, the credit is equal to 10
percent of the difference between a business’ qualified R&D expenditures in the current taxable
year and the average R&D expenditures over the previous 4 tax years. Other key points are:
An R&D tax credit may not exceed 50 percent of a business enterprise’s corporate tax
liability in a taxable year, after any other corporate tax credits have been applied.
To qualify for the tax credit, a business enterprise must be a target industry, as defined in
s. 288.106, F.S.
A business enterprise may carry forward any unused tax credit for up to 5 years.
A business enterprise may transfer or sell its unused credits within 1 year after they were
originally approved to another business enterprise. The purchasing business or assignee
must use the tax credits in the same year that the transfer or purchase was made.
DOR is directed to adopt rules to implement and administer the new R&D tax credit.
SB 942 creates s. 220.194, F.S., and amends s. 220.02, F.S.
BILL: SB 942 Page 2
II. Present Situation:
Federal tax credit
The “U.S. Research and Experimentation Tax Credit” was created in 1981 as part of the
Economic Recovery Tax Act, a comprehensive package of initiatives designed to boost U.S.
business competitiveness and encourage investment and savings by American taxpayers during a
period of economic recession.1 Originally, the credit was 25 percent of qualified research
expenditures in excess over the previous year’s expenditures, and the types of expenditures that
qualified were limited to scientific or experimental research. Over the years, the tax credit
formula has been modified several times and the types of eligible expenses broadened.2
Under current federal law, “qualified research expenses” include wages paid to in-house research
staff, supplies used in research activities (not including land, improvements to land or certain
depreciable property), and up to 65 percent of funds paid to contracted personnel for qualified
research.3 “Qualified research” includes a company’s expenditures that are technological in
nature and which are intended to be useful in the development of a new or improved business
process, product, software, formula, invention or other business component that will be used by
the company or which the company intends to sell, license, or lease.4
The federal tax credit is an incremental tax credit because a company is only rewarded if it
increases its R&D spending over a predetermined base period. The amount of the federal tax
credit can be determined by three different methods, depending in part on how long the company
has been in business. Under the basic formula, the tax credit is equal to 20 percent of the current
tax year’s qualified R&D expenses over the base amount, which is calculated using a ratio of
qualified R&D expenses and gross receipts during the period of 1984 through 1988.5 Newer
companies can use simpler formulas that still compare current year R&D spending with past
years.
Business entities that do not pay federal corporate income tax, such as “S corporations” and
partnerships, are allowed to “pass-through” their federal R&D credits to shareholders or partners,
based on these individuals’ shares in such business entities.6
For the 2008 federal tax year, some 12,736 companies claimed $8.3 billion in R&D tax credits,
including $167.7 million claimed via “pass-throughs.”7 Manufacturing companies claimed the
1
“The U.S. Research and Experimentation Tax Credit in the 1990s” by Francisco Moris. National Science Foundation Report
#NSF05-316 published July 2005. Retrieved at http://www.nsf.gov/statistics/infbrief/nsf05316/ and “The Prospects for
Economic Recovery,” prepared by the Congressional Budget Office. Published February 1982. Pertinent information on
pages 87-93. Retrieved at http://www.cbo.gov/ftpdocs/51xx/doc5135/doc03b-Part8.pdf. Sites last visited March 30, 2011.
2
The U.S. General Accounting Office has prepared two reports over the years that examine changes in the tax credit program
and analyze the program’s impact. GAO/GGD-89-114 is found at http://archive.gao.gov/d26t7/139607.pdf. GAO/GGD-96-
43 is found at http://www.gao.gov/archive/1996/gg96043.pdf.
3
26 USC sec. 41(b).
4
26 USC sec. 41(d).
5
26 USC sec. 41(c).
6
26 USC sec. 41 (g).
7
Internal Revenue Service, Statistics of Income Division. Retrievable at
http://www.irs.gov/taxstats/article/0,,id=164402,00.html. Last visited March 30, 2011.
BILL: SB 942 Page 3
largest percentage of research tax credits, $5.78 billion worth.8 Wages comprised nearly $55.6
billion of the $67.3 billion in qualified R&D expenditures reported by businesses to the IRS. 9
Congress reauthorized the R&D tax credit in December through tax year 2011.10
Other states’ R&D tax credits
Thirty-eight states have enacted an R&D tax credit.11 The majority of the states appear to use the
federal definitions for credit eligibility and follow the federal formula for establishing a base
time period. Some states allow the tax credit to be taken only against their state income tax,
while others allow it to be taken against a variety of state tax liabilities. Also, some states offer
the highest tax credit rate to R&D activities done in conjunction with university partners, while
others make no distinction. Five states12 offer refundable tax credits, meaning those states remit
to eligible businesses the excess difference between their taxes owed and the amount of R&D tax
credit they earned.
Statistics
Internationally, the United States, in 2007, ranked first in R&D expenditures, at $344 billion,
most of it spent on defense research.13 The nation’s R&D expenditures as a measure of the Gross
Domestic Product have remained stable over the last several years around 2.6 percent, which
ranks 4th internationally, behind Israel, Sweden, and Finland.14 Many nations offer a version of
R&D tax credits, which are considered an important economic-development tool.15
According to research16 compiled by the Alliance for Science & Technology Research in
America, in 2007 Florida’s business R&D ranked 17th in the nation, totaling less than 2 percent
of the U.S., but private- and public-sector R&D affiliated with state universities ranked in the top
10 nationally, based on 2006 statistics.
III. Effect of Proposed Changes:
SB 942 creates a Florida R&D tax credit program designed to stimulate the development of
scientific and technological advances by target industry businesses, which in turn may increase
business competitiveness, create high-wage research jobs in Florida, and develop new products
8
Ibid.
9
Ibid.
10
P.L.111 - 312, December 17, 2010.
11
“Iowa’s Research Activities Tax Credit Tax Credits Program Evaluation Study.” Iowa Department of Revenue. Published
January 2008. Appendix/Chart 6, on pages 37-41 of the report lists details of all 38 states’ R&D tax credits. See:
http://www.iowa.gov/tax/taxlaw/IDRTaxCreditEvalJan2008.pdf.
12
Hawaii, Iowa, Louisiana, Nebraska, and New York are the states. Ibid.
13
“Briefing Note on the United States.” Organisation for Economic and Cooperative Development’s Science, Technology
and Industry Scoreboard 2007. Retrievable at http://www.oecd.org/dataoecd/19/11/39695454.pdf. Last visited March 30,
2011.
14
Organisation for Economic and Cooperative Development’s Fact Book for 2009. Retrievable at:
http://oberon.sourceoecd.org/vl=5806526/cl=18/nw=1/rpsv/factbook/07/01/01/index.htm. Last visited March 30, 2011.
15
“2010 Global Survey of R&D Tax Incentives,” prepared by Deloitte and published in January 2011. Available at:
http://www.nam.org/~/media/C917926074BE4CE8A4E7AF2C017D67A2/Global_RD_Survey_Final.pdf.
16
The Alliance for Science & Technology Research in America, 2010 report. Available at
http://www.usinnovation.org/state/pdf_cvd/CVD10FloridaR&D.pdf. Last visited March 30,2011.
BILL: SB 942 Page 4
and services for market. The Florida tax credit is modeled after the federal research tax credit in
Title 26 U.S. Code section 41, and incorporates some of its definitions.
Section 1: Creates s. 220.194, F.S., which authorizes an R&D tax credit against state corporate
income taxes. It explains the formula that will be used to compute the actual amount of tax credit
available to individual eligible businesses.
For established businesses, the tax credit will be equal to 10 percent of the difference between
the current tax year’s R&D expenditures and the average of R&D expenditures over the previous
4 taxable years. For businesses in existence fewer than 4 years, the credit amount is reduced by
25 percent for each year the business did not exist within the 4-year base period.
The bill defines a number of terms; key among them are:
Business enterprise means any corporation as defined in s. 220.03, F.S., that is also a
target industry business17 as defined in s. 288.106(1)(o), F.S. (This is erroneous cross-
reference. The correct cross-reference is s. 288.106(2)(t), F.S.); and
Qualified research expenses mean research expenses qualifying for the federal credit
under section 41 of the Internal Revenue Code for in-house or contract research expenses
within Florida. Not eligible is R&D conducted out of state, research excluded by the
federal code, and R&D conducted by a business enterprise that is not within its principal
business activity.
The state tax credit taken in any 1 tax year may not exceed 50 percent of the original business
enterprise’s remaining net corporate income tax liability under ch. 220, F.S., after all other
credits to which the business is entitled, have been applied.
Any unused credits may either be carried forward by the business that originally earned it for up
to 5 years following the year in which the qualified research expenses were incurred, or they may
be assigned or sold to another corporate income taxpayer who also is a business enterprise, and
thus a target industry. In the latter instance:
The business that earned R&D tax credits may assign or sell them if it has not claimed
the credits within 1 year of DOR having approved them.
The business that has been assigned the credits or has purchased them must use the
credits in the same taxable year in which they were purchased or assigned.
Assigned or purchased credits must have been exchanged for at least 75 percent of their
face value.
The maximum amount of R&D credits that may be approved by DOR during any calendar year
is $15 million.
17
The “target industry list” actually is a list of industry sectors that meet criteria related to high wage, high growth potential,
and market independence. It is developed by the Governor’s Office of Tourism, Trade, and Economic Development, in
consultation with Enterprise Florida, Inc. The 2011 targeted industry list was approved by OTTED in January and includes
eight categories: Clean Tech; Life Sciences; Information Technology; Aviation/Aerospace; Homeland Security/Defense;
Financial/Professional Services; Emerging Technologies; and Other Manufacturing.
BILL: SB 942 Page 5
Finally, DOR is directed to adopt rules governing the manner and form of the R&D tax credit
application, and may establish guidelines for businesses seeking to affirm their qualification for
the credit.
Section 2: Amends s. 220.02, F.S., to establish the order in which a corporate taxpayer may
claim the R&D tax credit compared to all other potential corporate income tax credits. The R&D
tax credit is last in the list.
Section 3: Specifies that the bill becomes law July 1, 2011, but that the credits cannot be
claimed prior to the taxable year beginning on or after January 1, 2012.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
At its March 4, 2011, meeting, the Revenue Estimating Conference determined by
consensus that SB 942 will have a negative fiscal impact of $5 million in cash for FY
2011-2012 and negative $15 million in cash for FYs 2012-2013, 2013-2014, and 2014-
2015.
B. Private Sector Impact:
Startups as well as established companies could benefit from a state R&D tax credit
program, either directly and through the credit transfer program, as long as they meet the
eligibility criteria.
C. Government Sector Impact:
Indeterminate. DOR is likely to incur some personnel and other administrative costs in
administering the tax credit program, and in modifying forms and software.
BILL: SB 942 Page 6
VI. Technical Deficiencies:
As stated above, the reference to the definition for “target industry” is erroneous and should be
corrected to s. 288.106(2)(t), F.S.
VII. Related Issues:
None.
VIII. Additional Information:
A. Committee Substitute – Statement of Substantial 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 - 2011 COMMITTEE AMENDMENT
Bill No. SB 976
Ì181472(Î181472
LEGISLATIVE ACTION
Senate . House
.
.
.
.
.
The Committee on Commerce and Tourism (Gaetz) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Delete everything after the enacting clause
4 and insert:
5 Section 1. Section 288.9621, Florida Statutes, is amended
6 to read:
7 288.9621 Short title.—This part Sections 288.9621-288.9625
8 may be cited as the “Florida Capital Formation Act.”
9 Section 2. Subsections (1) and (2) of section 288.9622,
10 Florida Statutes, are amended to read:
11 288.9622 Findings and intent.—
12 (1) The Legislature finds and declares that there is a
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Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 976
Ì181472(Î181472
13 need to increase the availability of seed capital and early
14 stage venture equity capital for emerging companies in the
15 state, including, without limitation, enterprises in life
16 sciences, information technology, advanced manufacturing
17 processes, aviation and aerospace, and homeland security and
18 defense, as well as other strategic technologies and
19 infrastructure funding.
20 (2) It is the intent of the Legislature that this part ss.
21 288.9621-288.9625 serve to mobilize private investment in a
22 broad variety of venture capital partnerships in diversified
23 industries and geographies; retain private sector investment
24 criteria focused on rate of return; use the services of highly
25 qualified managers in the venture capital industry regardless of
26 location; facilitate the organization of the Florida Opportunity
27 Fund as an investor in seed and early stage businesses,
28 infrastructure projects, venture capital funds, infrastructure
29 funds, and angel funds; and precipitate capital investment and
30 extensions of credit to and in the Florida Opportunity Fund.
31 Section 3. Section 288.9623, Florida Statutes, is amended
32 to read:
33 288.9623 Definitions.—As used in this part, the term ss.
34 288.9621-288.9625:
35 (1) “Board” means the board of directors of the Florida
36 Opportunity Fund.
37 (2) “Certificate” means a contract between the trust and
38 an investment partner that guarantees the availability of tax
39 credits for use by the partner, or for transfer or sale under s.
40 288.9628, in order to guarantee the partner’s investment capital
41 in the partnership.
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Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 976
Ì181472(Î181472
42 (3) “Commitment agreement” means a contract between the
43 partnership and an investment partner under which the partner
44 commits to providing a specified amount of investment capital in
45 exchange for an ownership interest in the partnership.
46 (4)(2) ”Fund” means the Florida Opportunity Fund.
47 (5) “Infrastructure project” means a capital project in the
48 state for a facility or other infrastructure need in the state
49 with respect to any of the following: water or wastewater
50 system, communication system, power system, transportation
51 system, renewable energy system, ancillary or support system for
52 any of these types of projects, or other strategic
53 infrastructure located within the state.
54 (6) “Investment capital” means the total capital committed
55 by the investment partner for an equity interest in the
56 partnership pursuant to a commitment agreement.
57 (7) “Investment partner” or “partner” means a person, other
58 than the partnership, the fund, or the trust, who purchases an
59 ownership interest in the partnership or a transferee of such
60 interest.
61 (8) “Net capital loss” means an amount equal to the
62 difference between the total investment capital actually
63 advanced by the investment partner to the partnership and the
64 amount of the aggregate actual distributions received by the
65 investment partner.
66 (9) “Partnership” means the Florida Infrastructure Fund
67 Partnership.
68 (10) “Tax credits” means credits issued against the taxes
69 specified in s. 288.9628(7)(c).
70 (11) “Trust” means the Florida Infrastructure Investment
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Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 976
Ì181472(Î181472
71 Trust.
72 Section 4. Section 288.9627, Florida Statutes, is created
73 to read:
74 288.9627 Florida Infrastructure Fund Partnership; creation;
75 duties.—
76 (1) The Florida Opportunity Fund shall facilitate the
77 creation of the Florida Infrastructure Fund Partnership, which
78 shall be organized and operated under chapter 620 as a private,
79 for-profit limited partnership or limited liability partnership
80 with the fund as a general partner. The partnership shall manage
81 its business affairs and conduct business consistent with its
82 organizing documents and the purposes described in this section.
83 However, the partnership is not an instrumentality of the state.
84 (2) The primary purpose of the partnership is to raise
85 investment capital and invest the capital in infrastructure
86 projects in the state that promote economic development.
87 (3)(a) The fund, as the general partner of the partnership,
88 shall manage the partnership’s business affairs, including, but
89 not limited to:
90 1. Hiring one or more investment managers to assist with
91 management of the partnership through a solicitation for
92 qualified investment managers for the raising and investing of
93 capital by the partnership. Any such investment manager must
94 have maintained an office in the state for at least 2 years
95 before such solicitation with a full-time investment
96 professional. The evaluation of an investment manager candidate
97 must address the investment manager’s level of experience,
98 quality of management, investment philosophy and process,
99 demonstrable success in fundraising, and prior investment
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100 results.
101 2. Soliciting and negotiating the terms of, contracting
102 for, and receiving investment capital with the assistance of the
103 investment managers or other service providers.
104 3. Receiving investment returns.
105 4. Disbursing returns to investment partners.
106 5. Approving investments.
107 6. Engaging in other activities necessary to operate the
108 partnership.
109 (b) The fund may lend up to $750,000 to the partnership to
110 pay the initial expenses of organizing the partnership and
111 soliciting investment partners.
112 (4)(a) The partnership shall raise funds from investment
113 partners for investment in infrastructure projects in the state
114 by entering into commitment agreements with such partners on
115 terms approved by the fund’s board.
116 (b) The Florida Infrastructure Investment Trust shall,
117 pursuant to s. 288.9628, concurrently with the execution of a
118 commitment agreement with an investment partner, issue a
119 certificate.
120 (c) The partnership shall provide a copy of each commitment
121 agreement to the trust upon execution of the agreement by all
122 parties.
123 (d) The partnership may enter into commitment agreements
124 with investment partners beginning July 1, 2011. The total
125 principal investment capital payable to the partnership under
126 all commitment agreements may not exceed the total aggregate
127 amount of $700 million. However, if the partnership does not
128 obtain commitment agreements totaling at least $100 million by
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129 December 1, 2012, the partnership must cancel any executed
130 agreement and return the investment capital of each investment
131 partner who executed an agreement.
132 (5)(a) The partnership may only invest in an infrastructure
133 project:
134 1. That fulfills an important infrastructure need in the
135 state.
136 2. That raises funding from other sources so that the total
137 amount invested in the project is at least twice the amount
138 invested by the partnership, inclusive of the partnership’s
139 investment.
140 3. For which legal measures exist, appropriate to the
141 individual project, to ensure that the project is not
142 fraudulently closed to the detriment of the residents of the
143 state.
144 (b) The partnership may not invest more than 20 percent of
145 its total available investment capital in any single
146 infrastructure project.
147 (c) The partnership may not invest in any infrastructure
148 project that involves any phase of a project authorized under
149 the Florida Rail Enterprise Act, ss. 341.8201-341.842.
150 (6) The partnership may only invest in an infrastructure
151 project based on an evaluation of the following:
152 (a) A written business plan for the project, including all
153 expected revenue sources.
154 (b) The likelihood of the project’s attracting operating
155 capital from investment partners, grants, or other lenders.
156 (c) The management team for the proposed project.
157 (d) The project’s potential for job creation in the state.
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158 (e) The financial resources of the entity proposing the
159 project.
160 (f) The partnership’s assessment that the project
161 reasonably provides a continuing benefit for residents of the
162 state.
163 (g) Other factors not inconsistent with this section that
164 are deemed by the partnership as relevant to the likelihood of
165 the project’s success.
166 (7) By December 1 of each year beginning in 2011, the
167 partnership shall submit an annual report of its activities to
168 the Governor, the President of the Senate, and the Speaker of
169 the House of Representatives. The annual report must include, at
170 a minimum:
171 (a) An accounting of the amounts of investment capital
172 raised and disbursed by the partnership and the progress of the
173 partnership, including the progress of each infrastructure
174 project in which the partnership has invested.
175 (b) A description of the costs and benefits to the state
176 that result from the partnership’s investments, including a list
177 of infrastructure projects; the costs and benefits of those
178 projects to the state and, if applicable, the county or
179 municipality; the number of businesses and associated industries
180 affected; the number, types, and average annual wages of the
181 jobs created or retained; and the impact on the state’s economy.
182 (c) Independently audited financial statements, including
183 statements that show receipts and expenditures during the
184 preceding fiscal year for the operational costs of the
185 partnership.
186 (8) The partnership may not pledge the credit or taxing
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187 power of the state or any political subdivision thereof and may
188 not make its debts payable from any moneys or resources except
189 those of the partnership. An obligation of the partnership is
190 not an obligation of the state or any political subdivision
191 thereof but is an obligation of the partnership, payable
192 exclusively from the partnership’s resources.
193 (9) The partnership may not invest in an infrastructure
194 project with, or accept investment capital from, a company
195 described in s. 215.472 or a scrutinized company as defined in
196 s. 215.473, and the entity owning an infrastructure project in
197 which the partnership has invested must provide reasonable
198 assurances to the partnership that the entity will not provide
199 such a company or scrutinized company with an ownership interest
200 in the infrastructure project.
201 Section 5. Section 288.9628, Florida Statutes, is created
202 to read:
203 288.9628 Florida Infrastructure Investment Trust; creation;
204 duties; issuance of certificates; applications for tax credits.—
205 (1)(a) There is created the Florida Infrastructure
206 Investment Trust, which shall be organized as a state
207 beneficiary public trust to be administered by a board of
208 trustees. The powers and duties of the board of trustees under
209 this section are deemed to be performed for essential public
210 purposes.
211 (b) The board of trustees shall consist of the Chief
212 Financial Officer, the director of the Office of Tourism, Trade,
213 and Economic Development, and the vice chair of Enterprise
214 Florida, Inc., or their designees. The board of trustees shall
215 appoint an administrative officer who may act on behalf of the
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216 trust under the direction of the board of trustees.
217 (c) Members of the board of trustees and the board’s
218 administrative officer shall serve without compensation but are
219 entitled to reimbursement of their expenses. Each member of the
220 board of trustees has a duty of care to the trust in his or her
221 capacity as a trustee. Neither a member nor the administrative
222 officer may have a financial interest in any investment partner.
223 (2) The trust may hire consultants, retain professional
224 services, issue certificates, sell tax credits in accordance
225 with paragraph (5)(b), expend funds, invest funds, contract,
226 bond or insure against loss, or perform any other act necessary
227 to administer this section.
228 (3)(a) The trust shall, pursuant to s. 288.9627 and this
229 section, issue certificates to investment partners in the
230 Florida Infrastructure Fund Partnership, or their assignees,
231 guaranteeing the availability of tax credits of a maximum amount
232 equal to the investment capital committed by such investment
233 partners to the partnership.
234 (b) The trust and the fund may each seek reimbursement of
235 their respective reasonable costs and expenses from the
236 partnership by charging a fee for the issuance of certificates
237 to investment partners of up to 0.25 percent of the aggregate
238 investment capital committed to the partnership by the
239 investment partners who are issued certificates.
240 (c) The total aggregate amount of all tax credits made
241 available under the terms of certificates issued by the trust
242 may not exceed $700 million, and each certificate must include
243 the maximum amount of the tax credits that may be issued under
244 such certificate, which shall be the total amount of investment
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245 capital committed to the partnership by the investment partner.
246 (d) A certificate shall be issued concurrently with a
247 commitment agreement between the investment partner and the
248 partnership. A certificate issued by the trust must include a
249 specific calendar year maturity date designated by the trust of
250 at least 12 years after issuance. Contingent tax credits may not
251 be claimed or redeemed except by an investment partner or
252 purchaser in accordance with this section and the terms of a
253 certificate issued by the trust.
254 (e) Once investment capital is committed to the partnership
255 by an investment partner pursuant to his or her commitment
256 agreement, the certificate is binding, and the partnership, the
257 trust, and the Department of Revenue may not modify, terminate,
258 or rescind the certificate, except for administrative items,
259 including the assignment or sale of tax credits guaranteed to be
260 available under the terms of a certificate.
261 (4)(a) The partnership shall provide written notice to each
262 investment partner if, on the maturity date of his or her
263 certificate, the partner has a net capital loss. The notice must
264 include, at a minimum:
265 1. A good faith estimate of the fair market value of the
266 partnership’s assets as of the date of the notice.
267 2. The total investment capital of all investment partners
268 as of the date of the notice.
269 3. The total amount of distributions received by the
270 investment partners.
271 4. The amount of the tax credits the investment partner is
272 entitled to be issued by the Department of Revenue.
273 (b) The partnership shall concurrently provide a copy of
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274 each investment partner’s notice to the trust.
275 (c) Upon receipt of the notice from the partnership, each
276 affected investment partner may make a one-time election to:
277 1. Have tax credits issued to the investment partner;
278 2. Have the trust sell, on the partner’s behalf, the tax
279 credits guaranteed to be available under the terms of the
280 partner’s certificate with the proceeds of the sale to be paid
281 to the partner by the trust; or
282 3. Maintain the investment partner’s investment in the
283 partnership.
284 (d) Except as provided in paragraph (6)(c), the election
285 made by an investment partner under paragraph (c) is final and
286 may not be revoked or modified.
287 (e) An investment partner must provide written notice to
288 the partnership and the trust of his or her election within 30
289 days after his or her receipt of the notice from the
290 partnership. If an investment partner fails to provide notice
291 within 30 days, the investment partner is deemed to have elected
292 to maintain his or her investment in the partnership under
293 subparagraph (c)3.
294 (5)(a) If an investment partner makes the election under
295 subparagraph (4)(c)1. to have tax credits issued to him or her,
296 the trust shall apply to the Department of Revenue on the
297 partner’s behalf for issuance of the tax credits in his or her
298 name in an amount equal to such partner’s net capital loss. In
299 order to receive the tax credits, the investment partner must
300 agree in writing to transfer his or her ownership interest in
301 the partnership to the fund.
302 (b) If an investment partner makes the election under
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303 subparagraph (4)(c)2., the trust shall exercise its best efforts
304 to sell the tax credits. In order to receive the proceeds from
305 the trust’s sale of the tax credits, the investment partner must
306 agree in writing to transfer his or her ownership interest in
307 the partnership to the fund. A purchaser’s payment for tax
308 credits must be made to the trust on behalf of the investment
309 partner or, upon the partner’s request, directly to the
310 investment partner. The trust may sell tax credits in an amount
311 not to exceed the lesser of:
312 1. The maximum amount of the tax credits available under
313 the terms of certificate issued to the investment partner; or
314 2. The amount of tax credits necessary to yield net
315 proceeds to the investment partner equal to his or her net
316 capital loss as of the date of the partnership’s notice.
317 (6)(a) Within 30 days after receipt of an investment
318 partner’s election to be issued tax credits under paragraph
319 (5)(a), or within 30 days after the sale of tax credits under
320 paragraph (5)(b), the trust shall apply to the Department of
321 Revenue for issuance of the tax credits on behalf of the partner
322 or on behalf of the purchaser of the tax credits, as applicable.
323 However, the trust’s failure to timely submit an application to
324 the Department of Revenue does not affect the investment
325 partner’s or purchaser’s eligibility for the tax credits.
326 (b) The trust’s application for tax credits must include
327 the partnership’s certification of the amount of tax credits to
328 be issued, the identity of the taxpayer to whom the tax credits
329 are to be issued, and the tax against which the credits shall be
330 applied. The Department of Revenue shall issue the tax credits
331 within 30 days after receipt of a timely and complete
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332 application.
333 (c) The trust shall provide the investment partner with
334 written notice if, within 90 days after the partner’s election,
335 the trust is unable to sell enough tax credits to yield net
336 proceeds to the investment partner equal to his or her net
337 capital loss as of the date of the partnership’s notice and tax
338 credits available under the terms of the partner’s certificate
339 remain unsold. Within 30 days after receipt of such notice, the
340 investment partner may:
341 1. Revoke his or her prior election and make a new election
342 under paragraph (4)(c); or
343 2. Modify the election and:
344 a. Have unsold tax credits issued to him or her, to the
345 extent that unsold tax credits are available, in an amount equal
346 to the partner’s net capital loss, less the proceeds of any sold
347 credits; or
348 b. Have the trust continue to sell tax credits until the
349 partner’s net capital loss is satisfied or the maximum amount of
350 tax credits available under the partner’s certificate is
351 reached, whichever occurs first.
352
353 Within 30 days after such modified election, the trust shall
354 apply to the Department of Revenue in accordance with paragraph
355 (a) for issuance of tax credits on behalf of the investment
356 partner and on behalf of the purchasers in the amount of their
357 purchased credits.
358 (7)(a) The Department of Revenue may not issue more than
359 $700 million in tax credits. The trust may not approve tax
360 credits in excess of the total capital committed through
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361 commitment agreements.
362 (b) The amount of tax credits that may be claimed by the
363 owner of the credits, or applied against state taxes, in any one
364 state fiscal year may not exceed an amount equal to $150 million
365 multiplied by a fraction the numerator of which is the amount of
366 credits that the Department of Revenue issued to such owner and
367 the denominator of which is the amount of all credits that the
368 Department of Revenue issued to all tax credit owners.
369 (c) Tax credits issued by the Department of Revenue under
370 this section may be used by the owner of the credits as an
371 offset against any state taxes owed to the state under chapter
372 212, chapter 220, or ss. 624.509 and 624.5091. The offset may be
373 applied by the owner on any return for an eligible tax due on or
374 after the date that the credits are issued by the Department of
375 Revenue but within 7 years after the credits are issued. The
376 owner of the tax credits may elect to have the amount authorized
377 in the credits, or any portion thereof, claimed as a refund of
378 taxes paid rather than applied as an offset against eligible
379 taxes if such election is made within 7 years after the credits
380 are issued.
381 (d) To the extent that tax credits issued under this
382 section are used by their owner either as credits against taxes
383 due or to obtain payment from the state, the amount of such
384 credits becomes an obligation to the state by the partnership,
385 secured exclusively by the ownership interest transferred to the
386 fund by the investment partner whose investment generated the
387 tax credits. In such case, the state’s recovery is limited to
388 such forfeited ownership interest. The Department of Revenue
389 shall account for tax credits used under this section and make
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390 such information available to the partnership. The fund, as
391 general partner, is not liable to the state for repayment of the
392 used tax credits.
393 (e) Any certificate and related tax credits issued under
394 this section are transferable in whole or in part by their
395 owner. An owner of a certificate or tax credits must notify the
396 trust and the Department of Revenue of any such transfer.
397 (8) The Department of Revenue, upon the request of the
398 trust, shall provide the trust with a written assurance that the
399 certificates issued by the trust will be honored by the
400 Department of Revenue as provided in this section.
401 (9) Chapter 517 does not apply to the certificates and tax
402 credits transferred or sold under this section.
403 Section 6. Paragraph (dd) is added to subsection (8) of
404 section 213.053, Florida Statutes, as amended by chapter 2010-
405 280, Laws of Florida, to read:
406 213.053 Confidentiality and information sharing.—
407 (8) Notwithstanding any other provision of this section,
408 the department may provide:
409 (dd) Information relative to tax credits under ss. 288.9627
410 and 288.9628 to the Florida Infrastructure Fund Partnership and
411 the Florida Infrastructure Investment Trust.
412
413 Disclosure of information under this subsection shall be
414 pursuant to a written agreement between the executive director
415 and the agency. Such agencies, governmental or nongovernmental,
416 shall be bound by the same requirements of confidentiality as
417 the Department of Revenue. Breach of confidentiality is a
418 misdemeanor of the first degree, punishable as provided by s.
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419 775.082 or s. 775.083.
420 Section 7. This act shall take effect July 1, 2011.
421
422
423 ================= T I T L E A M E N D M E N T ================
424 And the title is amended as follows:
425 Delete everything before the enacting clause
426 and insert:
427 A bill to be entitled
428 An act relating to capital formation for infrastructure
429 projects; amending ss. 288.9621, 288.9622, and 288.9623, F.S.;
430 conforming a short title, revising legislative findings and
431 intent, and providing definitions for the Florida Capital
432 Formation Act; conforming cross-references; creating s.
433 288.9627, F.S.; providing for creation of the Florida
434 Infrastructure Fund Partnership; providing the partnership’s
435 purpose and duties; providing for management of the partnership
436 by the Florida Opportunity Fund; authorizing the fund to lend
437 moneys to the partnership; requiring the partnership to raise
438 funds from investment partners; providing for commitment
439 agreements with and issuance of certificates to investment
440 partners; authorizing the partnership to invest in certain
441 infrastructure projects; requiring the partnership to submit an
442 annual report to the Governor and Legislature; prohibiting the
443 partnership from pledging the credit or taxing power of the
444 state or its political subdivisions; prohibiting the partnership
445 from investing in projects with or accepting investments from
446 certain companies; creating s. 288.9628, F.S.; creating the
447 Florida Infrastructure Investment Trust; providing for powers
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448 and duties, a board of trustees, and an administrative officer
449 of the trust; providing for the trust’s issuance of certificates
450 to investment partners; specifying that the certificates
451 guarantee the availability of tax credits under certain
452 conditions; authorizing the trust and the fund to charge fees;
453 limiting the amount of tax credits that may be claimed or
454 applied against state taxes in any year; providing for the
455 redemption of certificates or sale of tax credits; providing for
456 the issuance of the tax credits by the Department of Revenue;
457 specifying the taxes against which the credits may be applied;
458 limiting the period within which tax credits may be used;
459 providing for the state’s obligation for use of the tax credits;
460 limiting the liability of the fund; providing for the
461 transferability of certificates and tax credits; requiring the
462 department to provide a certain written assurance to the trust
463 under certain circumstances; specifying that certain provisions
464 regulating securities transactions do not apply to certificates
465 and tax credits transferred or sold under the act; amending s.
466 213.053, F.S.; authorizing the department to disclose certain
467 information to the partnership and the trust relative to certain
468 tax credits; providing an effective date.
469
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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 Commerce and Tourism Committee
BILL: SB 976
INTRODUCER: Senator Bogdanoff
SUBJECT: Capital Formation for Infrastructure Projects
DATE: April 4, 2011 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Pugh Cooper CM Pre-meeting
2. BC
3.
4.
5.
6.
I. Summary:
In 2007 the Legislature created the Florida Opportunity Fund (FOF) as a $29.5 million, state-
supported foray into venture capital investments to assist young Florida companies representing
certain industry sectors. The FOF’s mission has broadened since then, and as of June 30, 2010,
the fund had invested just over $3 million – matched on a $2-to-$1 basis by private investment
partners – into six investment fund accounts. The fund’s private investment partners benefit only
if the investment funds make money. Meanwhile, other states encourage private investors to
participate in their venture-capital programs by awarding them contingent tax credits, claimable
if their investments in individual companies fail to produce earnings to recoup the original
principal investments.
SB 976 creates a new venture capital investment program, the Florida Infrastructure Fund
Partnership (partnership). The partnership takes a different approach than the FOF and other
states’ venture capital programs: it will award up to $700 million in certificates for contingent
state tax credits for an equal amount in private investments in strategic infrastructure projects.
The credits are only redeemable to private investors to recoup all or a portion of their equity
investments – if the projects do not achieve according to expectations. The earliest the credits
can be claimed is 2023.
The FOF will serve as the general partner for the partnership. A new entity, the Florida
Infrastructure Investment Trust (trust), is created to administer the certificates and contingent tax
credits associated with the new investment program.
SB 976 creates ss. 288.9627 and 288.9628, F.S., and amends ss. 288.9621, 288.9622, and
288.9623, F.S.
BILL: SB 976 Page 2
II. Present Situation:
The Venture Capital Industry1
“Venture capital” is money provided by investment professionals who invest alongside
management in young, rapidly growing companies that have the potential to develop into
significant economic contributors. Venture capital is an important source of equity for startup
companies.
Venture capital supports entrepreneurial talent and appetite by providing funds to develop ideas
and basic science into products and services. Venture capital funds build companies from the
simplest form – perhaps just the entrepreneur and an idea expressed as a business plan – to
freestanding, mature organizations. Venture capitalists generally:
Finance new and rapidly growing companies;
Purchase equity securities;
Assist in the development of new products or services;
Add value to the company through active participation;
Take higher risks with the expectation of higher rewards; and
Have a long-term orientation.
Venture capitalists actively work with the company’s management by contributing their
experience and business savvy gained from helping other companies with similar growth
challenges. A venture capitalist may invest before there is a real product or company organized,
known as “seed investing,” or may provide capital to a company in its first or second stages of
development known as “early stage investing.” Venture capitalists mitigate their risks by
developing a portfolio of young companies into a single venture fund.
Over the past decade, a number of states have adopted programs targeting the formal venture
capital industry. Programs fall into three approaches:2
Direct investment by state agencies to individual businesses through state-controlled
institutions;
Investment by state agencies or pension funds into privately managed funds or a portfolio
of privately managed funds, to expand local venture capital; and
Private investment spurred by state’s offering tax credits or other incentives for
qualifying investments.
Venture Capital in Florida
Florida ranked 15th in the United States in calendar year 2010 in terms of venture capital
investment, with Florida companies receiving about $190 million, down about 35 percent from
the previous year.3
1
The primary source for information in this section is the National Venture Capital Association website, including the 2011
NVCA Annual Yearbook, available at http://www.nvca.org/def.html . Last visited March 30, 2011.
2
Economic Development Finance. Karl F. Seidman. Published in 2005 by Sage Publications. On file with the Senate
Commerce and Tourism Committee. Information on page 253.
3
Information reported in Feb. 6, 2011, Orlando Sentinel article, on file with the Senate Commerce and Tourism Committee,
and based on the national Moneytree survey by PriceWatera http://www.floridaventureforum.org/newsletter.asp.
BILL: SB 976 Page 3
An earlier study indicated that the revenue of venture-backed companies headquartered in
Florida in 2008 was $75.5 million – ranked 9th in the nation – and these companies’ employment
totaled 242,074 – ranked 11th nationally.4
The Florida Opportunity Fund (FOF)
Created by the Legislature in 2007,5 the FOF was intended to attract venture capital investment
into targeted Florida industries by providing a state match. The FOF is organized as a private,
not-for-profit corporation under ch. 617, F.S., with a 5-member board of directors selected by an
EFI appointments committee. The FOF’s administrative staff is provided by EFI, and has a
separate investment manager, Florida First Partners, comprised of Florida-based MILCOM
Venture Partners6 and the Credit Suisse Customized Fund Investment Group.7
The Legislature appropriated $29.5 million for investments from the FOF in FY 2007-2008.
Initial charge
The FOF was established as a fund-of-funds program, meaning that it could only invest in
investment funds, not directly in individual businesses; additionally, the investment funds had to
match the state $2 for every $1 it invested. The emphasis was on “seed” and early-stage
investments, because proponents of creating the FOF concluded that these types of companies
were least likely to have access to venture funding and traditional financing. Targeted industries
for the FOF investments included, but were not limited to, life sciences, information technology,
advanced manufacturing processes, aviation and aerospace, and homeland security and defense.
To be eligible for state participation, an investment fund had to have an experienced and
successful investment manager or team, and must focus on investment opportunities in Florida.
The FOF invested in its first fund in FY 08-09: $594,000 in Element Partners II, according to
FOF’s financial statements. As of June 30, 2010, the FOF had six investment fund partners and
had invested just over $3 million.
Expansion of investment authority
In 2009, the Florida Legislature amended s. 288.9624, F.S., to allow the FOF to make direct
investments, including loans, in individual businesses and infrastructure projects; to form or
operate other entities; and to accept funds from other public and private sources for use as
investments.8 These direct investments must be made in Florida infrastructure projects, or in
businesses that are Florida-based or have significant business activities in Florida and operate in
technology sectors that are strategic to Florida, including the original list of industry types. The
FOF may not use its original appropriation of $29.5 million to make direct investments or for
any purposes not specified in the original legislation.
4
Venture Impact: The Economic Importance of Venture Capital-Backed Companies to the U.S. Economy. Prepared by
Global Insight. Information on Page 14. Available at:
http://www.nvca.org/index.php?option=com_content&view=article&id=255&Itemid=103. Last visited March 30, 2011.
5
HB 83 (ch. 2007-189, L.O.F.)
6
More information available at http://www.milcomvp.com/.
7
More information available at https://www.credit-suisse.com/us/en/.
8
HB 7031 (ch. 2009-251, L.O.F.)
BILL: SB 976 Page 4
In May 2010, the FOF launched a direct investment program with the Florida Energy and
Climate Commission, a 9-member board housed administratively in the Governor’s Office that is
the lead entity for state energy and climate-change programs and policies. This new FOF fund is
expected to increase the availability of investment capital in Florida for businesses engaged in
developing or producing energy-efficient or renewable energy (EE/RE) products or services. The
FOF has access to $36 million initially in federal funds to make investments in qualifying
businesses. Fund investments are restricted by statute to be used for facility and equipment
improvement with EE/RE products; acquisition or demonstration of renewable energy products;
and improvement of existing production, manufacturing, assembly, or distribution processes to
reduce consumption or increase the efficient use of energy in such processes.
Reporting Requirements
The FOF is required by statute to submit an annual report by December 1 of each year to the
Governor, the President of the Senate, and the Speaker of the House of Representatives that
includes, at a minimum:
An accounting of the amount of investments disbursed by the FOF fund;
The progress of the FOF in accomplishing its responsibilities;
A description of the benefits to the state resulting from the FOF, including the number of
businesses and jobs created, the number of associated industries started, and the growth
of related research projects; and
Independently audited financial statements for the FOF that show receipts and
expenditures during the preceding fiscal year for personnel, administration, and
operating costs.
Infrastructure Funding in Florida
For nearly 6 decades, Florida has been one of the fastest-growing states in the nation, with
population expanding from 3 million in 1950 to nearly 19 million in 2010.9 Demand for energy,
transportation, and communication systems expanded rapidly over the past several decades.
Current projections suggest Florida may add an additional 5 million new residents by the year
2030.10 Employment, tourism, gross state product, and income will expand as well, contributing
to growth in demand for strategic infrastructure.
In order to meet future capacity over the next 20-25 years, it is estimated that Florida will need:
$47.0 billion for highway and rail infrastructure; 11
$29.9 billion for water and wastewater facilities and infrastructure;12
$3.5 billion for aviation facilities and infrastructure;13
$2.8 billion for seaport facilities and infrastructure;14 and
9
2010 Census, Apportionment Population and Number of Representatives by State. United States Census Bureau. Interactive
map at http://2010.census.gov/2010census/data/. Site last visited March 31, 2011.
10
Florida Census Day Population: 1970-2030, Office of Economic and Demographic Research, August 2010.
http://edr.state.fl.us/Content/population-demographics/data/index.cfm. Last visited March 31, 2011.
11
Strategic Intermodal System Unfunded Needs Plan, Florida Department of Transportation, May 2006.
http://www.dot.state.fl.us/planning/systems/mspi/sisnplan.shtm. Site last visited March 31, 2011.
12
Clean Watersheds Needs Survey 2008 Report to Congress, United States Environmental Protection Agency.
http://water.epa.gov/scitech/datait/databases/cwns/2008reportdata.cfm. Site last visited March 31, 2011.
13
Strategic Intermodal System Unfunded Needs Plan, May 2006.
14
Strategic Intermodal System Unfunded Needs Plan, May 2006.
BILL: SB 976 Page 5
$2.5 billion for storm water management.15
Contingent Tax Credit Programs
Contingent tax credits help raise money for state-affiliated venture capital initiatives without
immediately affecting state revenues. Contingent tax credit programs are statutory state
guarantees established to incentivize venture capital investment into state target industries. Eight
states – Arkansas, Iowa, Michigan, Ohio, Oklahoma, Oregon, South Carolina and Utah – have
initiated programs authorizing the issuance of contingent tax credits to investors in state-
sponsored fund of funds, providing investments in companies.16 It does not appear that any state
has created an infrastructure funding program backed by contingent state tax credits that is
similar to the one proposed in SB 976.
III. Effect of Proposed Changes:
SB 976 broadens the Capital Formation Act in Part X of ch. 288, F.S., to create the Florida
Infrastructure Fund Partnership and the Florida Infrastructure Investment Trust as a means to
attract as much as $700 million in private capital to finance large-scale infrastructure
improvements in this state. The bill makes available $700 million in contingent tax credits,
which are assigned to investors dollar-for-dollar of their principal equity investments. The tax
credits may be used by investors only to recoup losses of such principal. The credits cannot be
claimed prior to 12 years from the date of the investment, so the earliest, based on the bill’s
effective date, would be on or after July 1, 2023.
Section 1: Amends s. 288.9621, F.S., to modify the short title, Florida Capital Formation Act, in
Part X of ch. 288, F.S.
Section 2: Amends s. 288.9621, F.S., to broaden legislative intent on the need for more seed
capital and early-stage venture capital to include infrastructure projects.
Section 3: Amends s. 288.9623, F.S., to add several definitions relevant to the proposed Florida
Infrastructure Fund Partnership. Key definitions are:
Certificate means a contract between the trust and an investment partner to guarantee the
partner’s investment in the partnership under which the investment partner, under certain
conditions, may redeem such certificate for a tax credit.
Commitment agreement means a contract between the partnership and an investment
partner under which the partner commits to providing a specified amount of investment
capital in exchange for an ownership interest in the partnership.
Infrastructure project means a capital project in the state for a facility or other
infrastructure need in the state, a county, or a municipality with respect to any of the
15
Clean Watersheds Needs Survey 2008 Report to Congress.
16
Various reports are available about one or all of these states’ programs. As a sample, see “Building a Regional Venture
Capital Industry with Contingent Tax Credits,” at
http://www.cdfa.net/cdfa/cdfaweb.nsf/fbaad5956b2928b086256efa005c5f78/d726ee6624cfb02c86257577007238da/$FILE/n
asvftaxcredits.pdf.; “Government Based Private Equity Programs,” at
http://www.cdfa.net/cdfa/cdfaweb.nsf/fbaad5956b2928b086256efa005c5f78/93e41838bbf61b5b8825781f005a8545/$FILE/N
eilson.CDFA%20Presentation_Jan%202011.pdf.; Utah’s Fund of Funds program, at http://www.utahfundoffunds.com/; and
Invest Iowa, at http://www.investiowa.com/icic/web.nsf/pages/fundoffunds.html. Last visited March 24, 2011.
BILL: SB 976 Page 6
following: water or wastewater system, communication system, power system,
transportation system, renewable energy system, ancillary or support system for any of
these types of projects, or other strategic infrastructure of the state, the county, or the
municipality.
Investment partner or partner means a person, other than the partnership, the fund, or the
trust, who purchases an ownership interest in the partnership or a transferee of such
interests.
Tax credit means a credit issued against the taxes specified in s. 288.9628(7)(c), F.S.
Section 4: Creates s. 288.9627, F.S., the Florida Infrastructure Fund Partnership. This section
details how the partnership is created, its purposes, and how it operates.
Governance
The partnership is organized and operated under ch. 620, F.S., as a private, for-profit, limited
partnership or limited liability partnership. The partnership is not an instrumentality of the state.
The FOF is identified as the general partner for the partnership, and is authorized to loan up to
$750,000 to the partnership for use in paying initial organizational expenses and to solicit
investment partners. The FOF also is responsible for managing the partnership’s business affairs,
including, but not limited to:
Hiring one or more investment managers to assist with the management of the
partnership;17
Soliciting and negotiating the terms, contracting, and receipt of the investment capital;
Receiving investment returns, paying investment partners and approving investments;
and
Engaging in other activities necessary to operate the partnership.
Infrastructure Investments
The partnership is authorized to make direct investments in Florida-based infrastructure projects
that foster economic development and meet an important infrastructure need of the state.
Eligible infrastructure projects include: water or wastewater systems, communication system,
power system, transportation system, renewable energy system, ancillary or support system for
any of these types of projects, or other strategic infrastructure located within the state.
Capital for these investments must be raised by the partnership through “commitment
agreements” with investment partners approved by the FOF’s board. The bill provides for the
issuance of certificates by Florida Infrastructure Investment Trust (described in Section 4 below)
for future contingent tax credits that guarantee the return of investment capital from the
partnership to its investment partners.
These contingent tax credits will guarantee the principal investment to the partners, but not
potential earnings.
SB 976 requires that the total principal investment payable to the partnership and the total
amount of contingent tax credits to be issued by the Department of Revenue (DOR) may not
17
The Fund may only solicit investment managers that have maintained an office in Florida for at least 2 years.
BILL: SB 976 Page 7
exceed $700 million. However, if the partnership fails to obtain investment commitments
totaling at least $100 million by December 1, 2012, then the partnership must cancel all
agreements and return investment amounts back to the investment partners.
Investment decision-making
The partnership must evaluate infrastructure projects interested in receiving investments based
on the following factors:
The written business plan for the project, including all expected revenue sources;
The likelihood of the project attracting operating capital through grants or from investors
or other lenders;
The management team for the proposed project;
The project's job creation potential in Florida;
The financial resources of the entity proposing the project;
The presence of reasonable safeguards to ensure the project provides a continuing benefit
for residents of the state; and
Other factors deemed by the partnership to be relevant to the likelihood of the success of
the project.
Additionally, the partnership may only invest in infrastructure projects, which:
Fulfill an infrastructure need in the state;
Raise twice as much equity or debt capital from other sources as is invested by the
partnership; and
Have appropriate legal controls in place to ensure that no infrastructure project will be
fraudulently closed.
The partnership may not invest more than 20 percent of its total funds available for investment in
any single infrastructure project. The partnership is prohibited from investing in any
infrastructure project authorized under the Florida Rail Enterprise Act, related to high-speed rail
projects;18 with any financial institution or company identified in s. 215.472, F.S., that engages in
commerce with Cuba; or with any “scrutinized company,” as that term is defined in s. 215.473,
F.S., relating to companies that engage in commerce with Iran and Sudan.
Provisions related to the Credit of the State
SB 976 prohibits the partnership and the FOF from pledging the credit or taxing power of the
state or any political subdivision of the state, nor are their obligations also debt to the state or
other political subdivisions. Finally, the partnership and the FOF must pay their debts only from
their own resources.
Reporting Requirements
The partnership must submit an annual report December 1 of each year to the Governor, the
President of the Senate, and the Speaker of the House of Representatives. The annual report, at a
minimum, must include:
An accounting of the amount of investment capital raised and disbursed by the
partnership.
18
Sections 341.8201 – 341.842. F.S.
BILL: SB 976 Page 8
The progress of the partnership’s activities, including the progress of infrastructure
projects that have been provided direct investment under the program.
A description of the costs and benefits to the state resulting from the partnership’s
investments, including:
o A list of infrastructure projects;
o The costs and benefits of each project to the state;
o The number of businesses and associated industries affected;
o The number, types, and average annual wage of jobs created or retained; and
o The impact of the program on the state’s economy.
Independently audited financial statements, including statements that show receipts and
expenditures during the preceding fiscal year for the partnership’s operating costs.
Section 5: Creates s. 288.9628, F.S., the Florida Infrastructure Investment Trust (trust), a state
beneficiary public trust, to be governed by an independent board of trustees (board).
Governance
The board is comprised of the Chief Financial Officer; the Executive Director of the Office of
Trade, Tourism, and Economic Development; and the Vice Chair of Enterprise Florida, Inc., or
their respective designees. The bill allows an administrative officer to act on behalf of the Trust
under the direction of the board. The board members and the administrative officer are
prohibited from receiving compensation from, and having a financial interest in, any investment
partner. They serve without compensation, but are entitled to reimbursement of their expenses.19
Powers and duties of the trust
SB 976 authorizes the trust to:
Engage consultants and retain professional services;
Issue tax certificates to the investment partners, redeemable for contingent tax credits;
Sell the contingent tax credits;
Expend funds and invest funds; and
Enter into contracts, and bond or insure against loss.
As mentioned above, the trust may issue certificates, redeemable against the contingent state tax
credits, to partners that make equity investments in the partnership. A certificate issued to a
partner guarantees the availability of tax credits equal to the principal investment specified in the
partner’s commitment agreement with the partnership. Certificates issued by the trust may not
exceed a total aggregate of $700 million of tax credits. Further, a certificate issued by the trust
must have a specific calendar year maturity date designated by the trust of no earlier than 12
years after the date of issuance. A partner’s certificate and related tax credits can be transferred
to a new owner in whole or in part.
SB 976 specifies that the provisions of ch. 517, F.S., dealing with regulation of securities, do not
apply to the certificates and contingent tax credits transferred or sold under this program.
19
The trust and the FOF may seek reimbursements for expenses by charging a fee for the issuance of certificates to
investment partners. The fee may be no more than .25 percent of the aggregate investment capital committed to the
partnership.
BILL: SB 976 Page 9
Notification and Election of Tax Credits
If, on the maturity date of a certificate, a partner’s principal investment has suffered a “net
capital loss,” the partnership must provide written notification of this circumstance to the partner.
“Net capital loss” is defined to mean an amount equal to the difference between the total
investment capital made by the investment partner to the partnership and the amount of the
aggregate actual distributions received by the investment partner. The notification must include:
An estimate of the fair-market value of the partnership's assets;
The total capital investment of all partners;
The total amount of distributions received by the partners; and
The amount of the tax credit for which the partner is entitled to be issued.
Upon receipt of notice from the partnership, each partner can elect to:
Have the tax credits issued in its name;
Authorize the trust to sell the tax credits on its behalf, with the proceeds of the sale paid
to the partner; or
Maintain its investment in the partnership.
An affected partner has 30 days, after receiving notification, to provide written notification to the
partnership and the trust which option it has chosen. Failing to provide a timely notice will result
in the investment partner being deemed to have elected to maintain investment in the partnership.
Issuance and Sale off Tax Credits
In the event that a partner becomes eligible and elects to claim tax credits under the program, the
bill provides that the trust will, on behalf of the partner, apply to DOR for the issuance of tax
credits. The tax credits certified by DOR may not exceed the partner’s net capital loss. The
partner must agree in writing to transfer its interest in the partnership to the fund before receiving
tax credits.
Alternatively, the trust may sell tax credits on behalf of a partner, in an amount no more than the
lesser of the maximum amount of tax credits available under the terms of the certificate issued to
the partner or the amount necessary to repay a partner’s net capital loss. Before receiving the
proceeds from the trust's sale of tax credits, the partner must agree in writing to transfer its
interest in the partnership to the fund.
Within 30 days following receipt of a partner’s election or the trust's sale of the tax credits, the
trust must notify the partnership and then apply to DOR for issuance of the contingent tax credits
in the name of the partner or purchaser. The application must include the following information:
the partnership’s certification of the amount of credits to be issued, identification of the
applicable taxpayer, and the tax against which the credits can be applied. Within 30 days of the
receipt of an application, DOR must issue tax credits to the partner or purchaser in the amount
designated by the trust in the application. If the trust is unable to sell the partner's tax credits
within 90 days, the bill provides the partner with the option to modify its election choice.
As specified earlier, the amount of tax credits that may be claimed or applied against state taxes
may not exceed $150 million in a state fiscal year. The tax credits issued by DOR can be used to
BILL: SB 976 Page 10
offset state sales, corporate, or premium insurance tax liability, or as refund of taxes paid; such
credits must be applied or taken as a refund within 7 years after the credits are issued.
The bill provides that ch. 517, F.S., dealing with regulation of securities, does not apply to the
certificates and credits transferred or sold pursuant to the provisions of the bill.
Section 6: Specifies an effective date of July 1, 2011.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
At its March 10, 2011 meeting, the Revenue Estimating Conference (REC) determined
by consensus that SB 976 will have a recurring negative, but indeterminate, impact on
both state and local government revenues, as annualized in the next four fiscal years.
The REC noted in its written estimate report that, “It is not possible to determine what net
operating capital losses could be 12 years out, therefore the Cap ($150 million annually)
is assumed to be the maximum recurring amount.” Further, the REC noted that, “This bill
exposes the state to contingent future tax credits ranging from $0 to $700 million,
beginning in 2023 at the earliest.”
B. Private Sector Impact:
Indeterminate, but likely positive for both businesses and residents of the areas where the
infrastructure projects are constructed.
C. Government Sector Impact:
Indeterminate. DOR may incur some costs associated with administratively handling the
issuance and transference, where applicable, of the contingent tax credits.
BILL: SB 976 Page 11
VI. Technical Deficiencies:
None.
VII. Related Issues:
None.
VIII. Additional Information:
A. Committee Substitute – Statement of Substantial 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 - 2011 COMMITTEE AMENDMENT
Bill No. SB 994
Ì496966cÎ496966
LEGISLATIVE ACTION
Senate . House
.
.
.
.
.
The Committee on Commerce and Tourism (Gaetz) recommended the
following:
1 Senate Substitute for Amendment (138788) (with title
2 amendment)
3
4
5 Delete everything after the enacting clause
6 and insert:
7 Section 1. Section 332.16, Florida Statutes, is created to
8 read:
9 332.16 Public-record exemptions.—
10 (1) DEFINITIONS.—As used in this section, the term:
11 (a) “Airport facilities” means airports, buildings,
12 structures, terminal buildings, parking garages and lots,
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13 hangars, land, warehouses, shops, hotels, other aviation
14 facilities of any kind or nature, or any other facility of any
15 kind or nature related to or connected with a public airport and
16 other aviation facility that a public airport is authorized by
17 law to construct, acquire, own, lease, or operate, together with
18 all fixtures, equipment, and property, real or personal,
19 tangible or intangible, necessary, appurtenant, or incidental
20 thereto.
21 (b) “Governing body” means the board or body in which the
22 general legislative powers of a public airport is vested.
23 (c) “Proprietor” means a self-employed individual,
24 proprietorship, corporation, partnership, limited partnership,
25 firm, enterprise, franchise, association, trust, or business
26 entity, whether fictitiously named or not, authorized to do or
27 doing business in this state, including its respective
28 authorized officer, employee, agent, or successor in interest,
29 which controls or owns the proprietary confidential business
30 information provided to a public airport.
31 (d) “Proprietary confidential business information” means
32 information that is owned or controlled by the proprietor
33 requesting confidentiality under this section; that is intended
34 to be and is treated by the proprietor as private in that the
35 disclosure of the information would cause harm to the business
36 operations of the proprietor; that has not been disclosed unless
37 disclosed pursuant to a statutory provision, an order of a court
38 or administrative body, or a private agreement providing that
39 the information may be released to the public; and that is
40 information concerning:
41 1. Business plans.
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42 2. Internal auditing controls and reports of internal
43 auditors.
44 3. Reports of external auditors for privately held
45 companies.
46 4. Client and customer lists.
47 5. Potentially patentable material.
48 6. Business transactions; however, business transactions do
49 not include those transactions between a proprietor and a public
50 airport.
51 7. Financial information of the proprietor.
52 (e) “Public airport” has the same meaning as provided in s.
53 330.27 and includes areas defined in s. 332.01(3).
54 (f) “Trade secrets” has the same meaning as in s. 688.002.
55 (2) PROPRIETARY CONFIDENTIAL BUSINESS INFORMATION.—
56 Proprietary confidential business information held by a public
57 airport is confidential and exempt from s. 119.07(1) and s.
58 24(a), Art. I of the State Constitution, until such information
59 is otherwise publicly available or is no longer treated by the
60 proprietor as proprietary confidential business information.
61 (3) TRADE SECRETS.—Trade secrets held by a public airport
62 are confidential and exempt from s. 119.07(1) and s. 24(a), Art.
63 I of the State Constitution.
64 (4) SALE, USE, DEVELOPMENT, OR LEASE OF AIRPORT
65 FACILITIES.—Any proposal or counterproposal exchanged between a
66 public airport and a nongovernmental entity relating to the
67 sale, use, development, or lease of airport facilities is exempt
68 from s. 119.07(1) and s. 24(a), Art. I of the State
69 Constitution. However, any such proposal or counterproposal
70 shall cease to be exempt upon approval by the governing body of
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Ì496966cÎ496966
71 a public airport. If no proposal or counterproposal is submitted
72 to the governing body for approval, such proposal or
73 counterproposal shall cease to be exempt 90 days after the
74 cessation of negotiations between the public airport and the
75 nongovernmental entity.
76 (5) LEGISLATIVE REVIEW.—This section is subject to the Open
77 Government Sunset Review Act in accordance with s. 119.15, and
78 shall stand repealed on October 2, 2016, unless reviewed and
79 saved from repeal through reenactment by the Legislature.
80 Section 2. (1) The Legislature finds that it is a public
81 necessity that trade secrets and proprietary confidential
82 business information, including business plans, internal
83 auditing controls and reports of internal auditors, reports of
84 external auditors for privately held companies, client and
85 customer lists, potentially patentable material, certain
86 business transactions, and financial information of the
87 proprietor be made confidential and exempt from s. 119.07(1),
88 Florida Statutes, and s. 24(a), Article I of the State
89 Constitution. Trade secrets and proprietary confidential
90 business information derive independent economic value, actual
91 or potential, from not being generally known to, and not being
92 readily ascertainable by, other persons who could obtain
93 economic value from its disclosure or use. An airport, in
94 performing its lawful duties and responsibilities, may need to
95 obtain from a proprietor trade secrets or proprietary
96 confidential business information. Without an exemption from
97 public-records requirements, trade secrets and proprietary
98 confidential business information held by an airport become a
99 public record and must be divulged upon request. Divulging the
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100 trade secret or proprietary confidential business information
101 would destroy the value of that property to the proprietor,
102 causing a financial loss not only to the proprietor, but also to
103 the airport and to the state and local governments due to a loss
104 of tax revenue and employment opportunities for residents.
105 Release of that information would give business competitors an
106 unfair advantage and would injure the affected entity in the
107 marketplace. Thus, the Legislature finds that it is a public
108 necessity that trade secrets and proprietary confidential
109 business information held by a public airport be made
110 confidential and exempt from public-records requirements.
111 (2) The Legislature also finds that it is a public
112 necessity that any proposal or counterproposal exchanged between
113 a nongovernmental entity and any public airport listed in s.
114 330.27, Florida Statutes, which includes areas defined in s.
115 332.01(3), Florida Statutes, relating to the sale, use, or lease
116 of land or airport facilities, be made exempt from public-
117 records requirements until approved by the governing body of the
118 airport. Proposals and counterproposals submitted to an airport
119 contain sensitive and confidential business and financial
120 information. Competing entities can gain access to such
121 proposals, and, in some instances, the affected nongovernmental
122 entity has abandoned its contractual efforts with the airport,
123 to the airport’s financial detriment. Confidential business and
124 financial records submitted to an airport for purposes of the
125 sale, use, or lease of land or of airport facilities contain
126 sensitive information, the release of which would give
127 competitors an unfair economic advantage. Finally, such
128 exemption is necessary in order for Florida airports to more
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129 effectively and efficiently negotiate contracts for the sale,
130 use, or lease of airport facilities.
131 Section 3. This act shall take effect July 1, 2011.
132
133 ================= T I T L E A M E N D M E N T ================
134 And the title is amended as follows:
135 Delete everything before the enacting clause
136 and insert:
137 A bill to be entitled
138 An act relating to public records; creating s. 332.16,
139 F.S.; providing definitions; providing an exemption
140 from public-records requirements for proprietary
141 confidential business information and trade secrets
142 held by a public airport and for any proposal or
143 counterproposal exchanged between a public airport and
144 a nongovernmental entity relating to the sale, use,
145 development, or lease of airport facilities; providing
146 for expiration of the exemptions; providing for future
147 legislative review and repeal of the exemptions under
148 the Open Government Sunset Review Act; providing a
149 finding of public necessity; providing an effective
150 date.
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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 Commerce and Tourism Committee
BILL: SB 994
INTRODUCER: Senator Latvala
SUBJECT: Public Records/Airports
DATE: March 29, 2011 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Wolfgang Yeatman CA Fav/1 amendment
2. Pugh Cooper CM Pre-meeting
3. GO
4.
5.
6.
Please see Section VIII. for Additional Information:
A. COMMITTEE SUBSTITUTE..... Statement of Substantial Changes
B. AMENDMENTS........................ Technical amendments were recommended
x Amendments were recommended
Significant amendments were recommended
I. Summary:
Current law provides several public records exemptions for proprietary confidential business
information held by various entities, and for contract proposals exchanged between public and
private entities for the use of public infrastructure. However, the statutes do not provide similar
exemptions for public airports engaged in business transactions with private companies.
SB 994 creates a public records exemption for proprietary confidential business information
submitted to or held by a public airport. The exemption expires when the confidential and
exempt information is no longer considered to be proprietary confidential business information
by the proprietor.
The bill also creates a public records exemption for a proposal or counterproposal exchanged
between a public airport and a nongovernmental entity relating to the sale, use, development, or
lease of airport land or airport facilities.
SB 994 provides a statement of public necessity as required by the State Constitution, and
provides definitions for terms used in the proposed statutes.
BILL: SB 994 Page 2
Finally, SB 994 provides for repeal of the exemptions on October 2, 2016, unless reviewed and
saved from repeal by the Legislature.
Pursuant to Article I, s. 24(c) of the State Constitution, passage of SB 994 requires a two-thirds
vote in each chamber of the members present and voting for final passage of a newly created
public record or public meeting exemption.
SB 994 creates s. 332.16, F.S., and an unnumbered section of chapter law related to the statement
of necessity for the proposed public records exemption.
II. Present Situation:
Public Records Law
Florida has a long history of providing public access to the records of governmental and other
public entities. The Legislature enacted its first law affording access to public records in 1892. In
1992, Florida voters approved an amendment to the State Constitution which raised the statutory
right of access to public records to a constitutional level.
Article I, s. 24(a) of the State Constitution sets forth the state’s public policy regarding access to
government records. The section guarantees every person a right to inspect or copy any public
record of the legislative, executive, and judicial branches of government.
Section 119.011(12), F.S., defines the term “public records” to include all documents, papers,
letters, maps, books, tapes, photographs, films, sound recordings, data processing software, or
other material, regardless of the physical form, characteristics, or means of transmission, made or
received pursuant to law or ordinance or in connection with the transaction of official business
by any agency. The Florida Supreme Court has interpreted this definition to encompass all
materials made or received by an agency in connection with official business which are
“intended to perpetuate, communicate, or formalize knowledge.”1
The Legislature, however, may provide by general law an exemption of public records from the
requirements of Article I, s. 24(a) of the State Constitution. The general law must state with
specificity the public necessity justifying the exemption (the so-called “public necessity
statement”) and must be no broader than necessary to accomplish its purpose.2 A bill enacting an
exemption3 may not contain other substantive provisions although it may contain multiple
exemptions relating to one subject.4
There is a difference between records that the Legislature exempts from public inspection and
those that the Legislature makes confidential and exempt from public inspection. If a record is
made confidential with no provision for its release so that its confidential status will be
maintained, such record may not be released by an agency to anyone other than the person or
1
Shevin v. Byron, Harless, Shafer, Reid, and Assocs., Inc., 379 So. 2d 633, 640 (Fla. 1980).
2
Section 24(c), Art. I of the State Constitution.
3
Section 119.15(4)(b), F.S., provides that an existing exemption may be considered a new exemption if the exemption is
expanded to cover additional records.
4
Section 24(c), Art. I of the State Constitution.
BILL: SB 994 Page 3
entities designated in the statute.5 If a record is simply exempt from mandatory disclosure
requirements, an agency is not prohibited from disclosing the record in all circumstances.6
Public policy regarding access to government records is addressed further in the Florida Statutes.
Section 119.07(1), F.S., guarantees every person a right to inspect and copy any state, county, or
municipal record. Furthermore, the Open Government Sunset Review Act7 provides that a public
record or public meeting exemption may be created or maintained only if it serves an identifiable
public purpose. In addition, it may be no broader than is necessary to meet one of the following
purposes:
Allows the state or its political subdivisions to effectively and efficiently administer a
governmental program, which administration would be significantly impaired without the
exemption.
Protects sensitive personal information that, if released, would be defamatory or would
jeopardize an individual’s safety; however, only the identity of an individual may be
exempted under this provision.
Protects trade or business secrets.
Proprietary Confidential Business Information
Current law provides several public record exemptions for proprietary confidential business
information, such as that held by economic development agencies and utilities.8 However, it does
not provide a public record exemption for proprietary confidential business information held by a
public airport.
Open Government Sunset Review Act
The Open Government Sunset Review Act established in s. 119.15, F.S., provides a review and
repeal process for public records exemptions. In the fifth year after enactment of a new
exemption or in the fifth year after substantial amendment of an existing exemption, the
exemption is repealed on October 2, unless reenacted by the Legislature. Each year, by June 1,
the Division of Statutory Revision of the Office of Legislative Services is required to certify to
the President of the Senate and the Speaker of the House of Representatives the language and
statutory citation of each exemption scheduled for repeal the following year.
Public Airports in Florida
Section 330.27(6), F.S., defines “public airport” as either a publicly or privately owned airport
that is open for use by the public. Florida has 21 commercial airports9 (meaning they offer
5
Op. Att’y Gen. Fla. 85-62 (1985).
6
Williams v. City of Minneola, 575 So. 2d 683, 687 (Fla. 5th DCA), review denied, 589 So. 2d 289 (Fla. 1991).
7
Section 119.15, F.S.
8
Public record exemptions for proprietary confidential business information are provided as it relates to the following:
electric utility interlocal agreements (s. 163.01, F.S.); communications services tax (s. 202.195, F.S.); alternative investments
for state funds (s. 215.44, F.S.); economic development agencies (s. 288.075, F.S.); Institute for Commercialization of Public
Research and the Opportunity Fund (s. 288.9626, F.S.); telephone companies (s. 364.183, F.S.); emergency communications
number E911 system (s. 365.174, F.S.); public utilities (s. 366.093, F.S.); natural gas transmission companies (s. 368.108,
F.S.); Sunshine State One-Call of Florida, Inc. (s. 556.113, F.S.); tobacco companies (s. 569.215, F.S.); prison work program
corporation records (s. 946.517, F.S.); and H. Lee Moffitt Cancer Center and Research Institute (s. 1004.43, F.S.).
9
A map showing the location of these 21 airports is available at:
http://www.dot.state.fl.us/aviation/pdfs/Welcome%20to%20Fl%20Aviation112010.pdf on page 10.
BILL: SB 994 Page 4
commercial passenger airline service) and 107 general aviation airports,10 which include
municipal airports and private air fields that offer flights other than military and scheduled airline
and regular cargo flights.
Based on a 2010 report11 prepared by the Florida Department of Transportation’s Office of
Aviation, airport operations account for at least 1 million jobs and annual payroll of nearly $31
billion, and generate an estimated $97 billion in economic activity. For example, air cargo
operations generate an estimated $6.6 billion on economic impact, and accounts for about one-
third Florida’s international trade.
III. Effect of Proposed Changes:
SB 994 creates two public records exemption related to public airports: one related to proprietary
confidential business information submitted to or held by a public airport, and the other related to
proposals or counterproposals exchanged between a public airport and a nongovernmental entity
relating to the sale, use, development, or lease of airport land or airport facilities.
Section 1: Creates s. 332.16, F.S., to create an exemption for proprietary confidential business
information submitted to or held by a public airport. The exemption expires when the
confidential and exempt information is no longer considered to be proprietary confidential
business information by the proprietor.
SB 994 creates definitions for the terms “airport facilities,” “governing body,” “proprietor,” and
“public airport.” The key definition is “proprietary confidential business information,” which
means information that has been designated as confidential by the proprietor and includes:
Business plans;
Internal auditing controls and reports of internal auditors;
Reports of external auditors for privately held companies;
Trade secrets as defined in the Uniform Trade Secrets Act;12
Client and customer lists;
Potentially patentable material;
Business transactions; or
Financial information of the proprietor or projections of financial results for the
proprietor or the airport facilities project for which the information is provided.
The bill also creates a public records exemption for a proposal or counterproposal exchanged
between a public airport and a nongovernmental entity relating to the sale, use, development, or
lease of airport land or airport facilities. The public record exemption expires 10 days after the
proposal or counterproposal is approved by the governing body of a public airport.
10
Ibid, pages 8-9.
11
Ibid, page 6.
12
Section 688.002(4), F.S., defines “trade secret” to mean information, including a formula, pattern, compilation, program,
device, method, technique, or process that: derives independent economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its
disclosure or use; and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
BILL: SB 994 Page 5
SB 944 provides that if a proposal or counterproposal is not submitted to the governing body for
approval, then the public records exemption for the proposal or counterproposal expires 90 days
after the cessation of negotiations between the public airport and the nongovernmental entity.
Additionally, the bill provides for repeal of the exemptions on October 2, 2016, unless reviewed
and saved from repeal by the Legislature.
Section 2: Provides in an undesignated section of chapter law the constitutionally required
statement of public necessity. However, the public necessity statement only provides the
justification for creating the public record exemption for proprietary confidential business
information.
Essentially, the bill states that divulging the proprietary confidential business information
destroys the value of that property to the proprietor, causing a financial loss not only to the
proprietor, but also to the airport and to the state and local governments due to a loss of tax
revenue and employment opportunities for residents. Release of that information could give
business competitors an unfair advantage and would injure the affected entity in the marketplace.
Section 3: Provides an effective date of July 1, 2011.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
Vote Requirement
Article I, s. 24(c) of the State Constitution, requires a two-thirds vote of the members
present and voting for final passage of a newly created public record or public meeting
exemption. Since SB 944 creates new public record exemptions, it requires a two-thirds
vote in each chamber for final passage.
Public Necessity Statement
Article I, s. 24(c) of the State Constitution, requires a public necessity statement for a
newly created or expanded public record or public meeting exemption. SB 994 creates
two new public records exemptions. However, the public necessity statement is deficient
in that it only provides justification for the public record exemption for proprietary
confidential business information. The public necessity statement should be amended to
include the justification for protecting proposals or counterproposals exchanged between
a public airport and a nongovernmental entity relating to the sale, use, development, or
lease of airport land or airport facilities.
Breadth of Exemption
Article I, s. 24(c) of the State Constitution, requires that an exemption be drafted as
narrowly as possible. The exemption in SB 994, as drafted, could raise concerns whether
BILL: SB 994 Page 6
it is narrowly drawn regarding its breadth when compared with another similar exemption
for seaports.
Current law provides a public record exemption for a proposal or counterproposal
exchanged between a deepwater port and a nongovernmental entity.13 However, that
exemption expires 30 days before any such proposal or counterproposal is considered for
approval by the governing body of the deepwater port.
The exemption provided by SB 994 requires that the confidentiality be maintained for a
period of 10 days after approval by the governing body of the public airport. The need to
maintain such confidentiality after a proposal or counterproposal is approved by the
governing body at a public meeting is unclear. As such, the proposed exemption could be
construed as overly broad.
C. Trust Funds Restrictions:
None.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None.
B. Private Sector Impact:
Indeterminate.
C. Government Sector Impact:
None.
VI. Technical Deficiencies:
Line 62 of SB 994 provides that certain proposals and counterproposals are “confidential and
exempt” from public records requirements; however, line 44 of the bill refers to the same
proposals and counterproposals as “exempt.” The bill should be amended to clarify that the
proposals and counterproposals are confidential and exempt from public records requirements,
per the sponsor’s intent.
In addition, the bill defines “airport facilities” to mean airports, buildings, structures, terminal
buildings, parking garages and lots, hangars, land, warehouses, shops, hotels, other aviation
facilities of any kind or nature, or any other facility of any kind or nature related to or connected
with a public airport and other aviation facility that a public airport is authorized by law to
construct, acquire, own, lease, or operate, together with all fixtures, equipment, and property,
real or personal, tangible or intangible, necessary, appurtenant, or incidental thereto. The bill
13
Section 315.18, F.S.
BILL: SB 994 Page 7
provides that the public record exemption for a proposal or counterproposal applies to the sale,
use, development, or lease of airport land or airport facilities. Including a reference to land in the
definition of “airport facilities” appears to be redundant.
VII. Related Issues:
The term “business transactions” could be broadly construed to include even the contracts and
other transactions between the proprietor/private tenant and the public airport. In addition, the
public necessity for protecting financial information associated with an airport facilities project is
unclear, in the case where such projects were paid for with public tax dollars.
An amendment is expected to be filed to clarify this issue and the technical issues identified
above.
VIII. Additional Information:
A. Committee Substitute – Statement of Substantial Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
None.
B. Amendments:
Barcode 138788 by Community Affairs Committee on March 14, 2011:
This amendment narrows the categories of public records subject to exemption from
public disclosure.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 994
Ì138788hÎ138788
LEGISLATIVE ACTION
Senate . House
Comm: FAV .
03/14/2011 .
.
.
.
The Committee on Community Affairs (Ring) recommended the
following:
1 Senate Amendment
2
3 Delete line 45
4 and insert:
5
6 proprietor; is intended to be and is treated by that proprietor
7 as private, and the disclosure of which would cause harm to the
8 business operations of the proprietor; has not been
9 intentionally disclosed by the proprietor unless pursuant to a
10 private agreement that provides that the information will not be
11 released to the public except as required by law or legal
12 process; and includes:
Page 1 of 1
3/14/2011 10:08:36 AM 578-02371-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1548
Ì504128$Î504128
LEGISLATIVE ACTION
Senate . House
.
.
.
.
.
The Committee on Commerce and Tourism (Lynn) recommended the
following:
1 Senate Amendment
2
3 Delete line 185
4 and insert:
5 c. Items included in the definition of sales price.
Page 1 of 1
4/4/2011 10:44:43 AM CM.CM.03665
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1548
Ì122442wÎ122442
LEGISLATIVE ACTION
Senate . House
.
.
.
.
.
The Committee on Commerce and Tourism (Lynn) recommended the
following:
1 Senate Amendment
2
3 Delete lines 684 - 686
4 and insert:
5 (27) “Agricultural commodity” means horticultural,
6 aquacultural, poultry and farm products, and livestock and
7 livestock products.
Page 1 of 1
4/4/2011 10:46:44 AM CM.CM.03707
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1548
Ì423136ÈÎ423136
LEGISLATIVE ACTION
Senate . House
.
.
.
.
.
The Committee on Commerce and Tourism (Lynn) recommended the
following:
1 Senate Amendment
2
3 Delete line 1041
4 and insert:
5 sponsored by a state college, state university, or community
6 college
Page 1 of 1
4/4/2011 10:47:56 AM CM.CM.03668
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1548
Ì336710xÎ336710
LEGISLATIVE ACTION
Senate . House
.
.
.
.
.
The Committee on Commerce and Tourism (Lynn) recommended the
following:
1 Senate Amendment
2
3 Between lines 1810 and 1811
4 insert:
5 3. As used in this paragraph, the term "delivered
6 electronically" means delivered to the purchaser by means other
7 than tangible storage media.
Page 1 of 1
4/4/2011 10:49:10 AM CM.CM.03671
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1548
Ì951792@Î951792
LEGISLATIVE ACTION
Senate . House
.
.
.
.
.
The Committee on Commerce and Tourism (Lynn) recommended the
following:
1 Senate Amendment
2
3 Delete line 2859
4 and insert:
5 chapter 459, chapter 460, chapter 461, chapter 466, or chapter
6 474. The term
Page 1 of 1
4/4/2011 10:50:21 AM CM.CM.03677
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1548
Ì499264DÎ499264
LEGISLATIVE ACTION
Senate . House
.
.
.
.
.
The Committee on Commerce and Tourism (Lynn) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Delete lines 3134 - 3252
4 and insert:
5 (1) Notwithstanding any other provision of law and for the
6 purpose of compensating persons granting licenses for and the
7 lessors of real and personal property taxed hereunder, for the
8 purpose of compensating dealers in tangible personal property,
9 for the purpose of compensating dealers providing communication
10 services and taxable services, for the purpose of compensating
11 owners of places where admissions are collected, and for the
12 purpose of compensating remitters of any taxes or fees reported
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Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1548
Ì499264DÎ499264
13 on the same documents utilized for the sales and use tax, as
14 compensation for the keeping of prescribed records, filing
15 timely tax returns, and the proper accounting and remitting of
16 taxes by them, such seller, person, lessor, dealer, owner, or
17 and remitter shall be allowed a collection allowance based on a
18 percentage of tax remitted for a reporting period. The rate of
19 compensation is:
20 1. 0.75 percent of the first $6,250 of tax remitted,
21 2. 0.375 percent of the tax remitted exceeding $6,250 and
22 less than or equal to $62,500, and
23 3. 0.1875 percent of the tax remitted exceeding $62,500.
24 (a) The amount of collection allowance for each seller,
25 person, lessor, dealer, owner, or remitter is limited based on
26 the amount of sales and use tax remitted in the twelve month
27 period ending June 30 of the previous calendar year. No
28 collection allowance will be allowed on the total tax remitted
29 by any seller, person, lessor, dealer, owner, or remitter in any
30 month in excess of:
31 1. $750,000, if the total amount remitted by all dealers in
32 the previous year was equal to or less than $1,000,000,000.00;
33 2. $1,000,000, if the total amount remitted by all dealers
34 in the previous year was greater than $1,000,000,000.00 but
35 equal to or less than $2,500,000,000.00;
36 3. $3,000,000.00, if the total amount remitted by all
37 dealers in the previous year was greater than $2,500,000,000.00
38 but equal to or less than $5,000,000,000.00;
39 4. $5,000,000.00, if the total amount remitted by all
40 dealers in the previous year was greater than $5,000,000,000.00
41 but equal to or less than $7,500,000,000.00;
Page 2 of 8
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Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1548
Ì499264DÎ499264
42 5. $7,000,000.00, if the total amount remitted by all
43 dealers in the previous year was greater than $7,500,000,000.00
44 but equal to or less than $10,000,000,000.00; or
45 6. $10,000,000.00, if the total amount remitted by all
46 dealers in the previous year was greater than $10,000,000.00.
47 (except dealers who make mail order sales) shall be allowed 2.5
48 percent of the amount of the tax due and accounted for and
49 remitted to the department, in the form of a deduction in
50 submitting his or her report and paying the amount due by him or
51 her; the department shall allow such deduction of 2.5 percent of
52 the amount of the tax to the person paying the same for
53 remitting the tax and making of tax returns in the manner herein
54 provided, for paying the amount due to be paid by him or her,
55 and as further compensation to dealers in tangible personal
56 property for the keeping of prescribed records and for
57 collection of taxes and remitting the same. However, if the
58 amount of the tax due and remitted to the department for the
59 reporting period exceeds $1,200, no allowance shall be allowed
60 for all amounts in excess of $1,200. The executive director of
61 the department is authorized to negotiate a collection
62 allowance, pursuant to rules promulgated by the department, with
63 a dealer who makes mail order sales. The rules of the department
64 shall provide guidelines for establishing the collection
65 allowance based upon the dealer’s estimated costs of collecting
66 the tax, the volume and value of the dealer’s mail order sales
67 to purchasers in this state, and the administrative and legal
68 costs and likelihood of achieving collection of the tax absent
69 the cooperation of the dealer. However, in no event shall the
70 collection allowance negotiated by the executive director exceed
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Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1548
Ì499264DÎ499264
71 10 percent of the tax remitted for a reporting period.
72 (b)(a) The Department of Revenue may deny the collection
73 allowance if a taxpayer files an incomplete return or if the
74 required tax return or tax is delinquent at the time of payment.
75 1. An “incomplete return” is, for purposes of this chapter,
76 a return that which is lacking such uniformity, completeness,
77 and arrangement that the physical handling, verification, review
78 of the return, or determination of other taxes and fees reported
79 on the return may not be readily accomplished.
80 2. The department shall adopt rules requiring such
81 information as it may deem necessary to ensure that the tax
82 levied hereunder is properly collected, reviewed, compiled,
83 reported, and enforced, including, but not limited to: the
84 amount of gross sales; the amount of taxable sales; the amount
85 of tax collected or due; the amount of lawful refunds,
86 deductions, or credits claimed; the amount claimed as the
87 dealer’s collection allowance; the amount of penalty and
88 interest; the amount due with the return; and such other
89 information as the Department of Revenue may specify. The
90 department shall require that transient rentals and agricultural
91 equipment transactions be separately shown. Sales made through
92 vending machines as defined in s. 212.0515 must be separately
93 shown on the return. Sales made through coin-operated amusement
94 machines as defined by s. 212.02 and the number of machines
95 operated must be separately shown on the return or on a form
96 prescribed by the department. If a separate form is required,
97 the same penalties for late filing, incomplete filing, or
98 failure to file as provided for the sales tax return shall apply
99 to said form.
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Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1548
Ì499264DÎ499264
100 (c)(b) The collection allowance and other credits or
101 deductions provided in this chapter shall be applied
102 proportionally to any taxes or fees reported on the same
103 documents used for the sales and use tax.
104 (d)(c)1. A dealer entitled to the collection allowance
105 provided in this section may elect to forego the collection
106 allowance and direct that said amount be transferred into the
107 Educational Enhancement Trust Fund. Such an election must be
108 made with the timely filing of a return and may not be rescinded
109 once made. If a dealer who makes such an election files a
110 delinquent return, underpays the tax, or files an incomplete
111 return, the amount transferred into the Educational Enhancement
112 Trust Fund shall be the amount of the collection allowance
113 remaining after resolution of liability for all of the tax,
114 interest, and penalty due on that return or underpayment of tax.
115 The Department of Education shall distribute the remaining
116 amount from the trust fund to the school districts that have
117 adopted resolutions stating that those funds will be used to
118 ensure that up-to-date technology is purchased for the
119 classrooms in the district and that teachers are trained in the
120 use of that technology. Revenues collected in districts that do
121 not adopt such a resolution shall be equally distributed to
122 districts that have adopted such resolutions.
123 2. This paragraph applies to all taxes, surtaxes, and any
124 local option taxes administered under this chapter and remitted
125 directly to the department. This paragraph does not apply to any
126 locally imposed and self-administered convention development
127 tax, tourist development tax, or tourist impact tax administered
128 under this chapter.
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Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1548
Ì499264DÎ499264
129 3. Revenues from the dealer-collection allowances shall be
130 transferred quarterly from the General Revenue Fund to the
131 Educational Enhancement Trust Fund. The Department of Revenue
132 shall provide to the Department of Education quarterly
133 information about such revenues by county to which the
134 collection allowance was attributed.
135
136 Notwithstanding any provision of chapter 120 to the contrary,
137 the Department of Revenue may adopt rules to carry out the
138 amendment made by chapter 2006-52, Laws of Florida, to this
139 section.
140 (e) Notwithstanding paragraph (a), a small remote seller
141 may elect to receive a collection allowance of 20 percent of the
142 tax to be remitted to the state, not to exceed compensation of
143 $85.00 in any month in lieu of compensation provided in
144 subparagraph (b). Such election shall be effective for a six-
145 month period beginning with the first month that such seller
146 collects Florida tax. After six months, the collection allowance
147 shall be those rates established in subsection (b). The
148 increased amount of collection allowance by this paragraph shall
149 be available to a small remote seller which begins collecting
150 tax for the state within the first 12 months following the date
151 of registration.
152 1. “Small remote seller” means a new remote seller which
153 has gross national remote sales of no more than $5,000,000.00
154 and would not otherwise be required to register in this state.
155 2. “New remote seller” means a remote seller who registers
156 under the agreement, as provided in s. 213.2567, and who was not
157 previously required to collect sales or use tax. A seller merely
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Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1548
Ì499264DÎ499264
158 reincorporating, changing its name, or having a change in
159 ownership or any other similar change in its business structure
160 or operation is not a new remote seller.
161 3. “Remote seller” means a seller not that would not be
162 registered in this state but for the ability of this state to
163 require the seller to collect sales or use tax under federal
164 authority.
165 (f) If sales and use tax collection from remote sellers is
166 not greater than 20 percent of the amount determined by the
167 Revenue Estimating Conference of potential collections by July
168 1, 2014, then the collection allowance shall be reduced to 2.5
169 percent of tax collected, not to exceed $30.
170 (g) Notwithstanding paragraphs (a) and (b), a Model 1
171 seller, as defined in s. 213.256 is not entitled to the
172 collection allowance described in paragraphs (a) and (b).
173 (h)1. In addition to any collection allowance that may be
174 provided under this subsection, the department may provide the
175 monetary allowances required to be provided by the state to
176 certified service providers and voluntary sellers pursuant to
177 Article VI of the Streamlined Sales and Use Tax Agreement, as
178 amended.
179 2. Such monetary allowances must be in the form of
180 collection allowances that certified service providers or
181 voluntary sellers are permitted to retain from the tax revenues
182 collected on remote sales to be remitted to the state pursuant
183 to this chapter.
184
185 ================= T I T L E A M E N D M E N T ================
186 And the title is amended as follows:
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Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1548
Ì499264DÎ499264
187 Between lines 79 and 80
188 insert:
189 authorizing collection allowances; setting
190 requirements for a collection allowance to be allowed;
191 authorizing collection allowances for certain remote
192 sellers; providing for a reduction;
Page 8 of 8
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Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1548
Ì162128&Î162128
LEGISLATIVE ACTION
Senate . House
.
.
.
.
.
The Committee on Commerce and Tourism (Lynn) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Delete line 3845
4 and insert:
5 distributed accordingly. Beginning January 1, 2012, the amount
6 to be transferred pursuant to this subparagraph to the Local
7 Government Half-cent Sales Tax Trust Fund shall be reduced each
8 fiscal year by an amount determined by the Revenue Estimating
9 Conference for implementation of the Streamlined Sales and Use
10 Tax Agreement in this state and that amount shall remain with
11 the General Revenue Fund. The Revenue Estimating Conference
12 shall determine the impact of implementation of the Streamlined
Page 1 of 2
4/4/2011 10:57:10 AM CM.CM.03679
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1548
Ì162128&Î162128
13 Sales and Use Tax Agreement by October 1, 2011.
14
15 ================= T I T L E A M E N D M E N T ================
16 And the title is amended as follows:
17 Delete line 98
18 and insert:
19 order sales; providing for reduction of the Local
20 Government Half-cent Sales Tax Clearing Trust Fund
21 beginning in 2012; creating s. 213.052, F.S.;
22 requiring the
Page 2 of 2
4/4/2011 10:57:10 AM CM.CM.03679
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 Commerce and Tourism Committee
BILL: SB 1548
INTRODUCER: Senator Lynn
SUBJECT: Streamlined Sales and Use Tax Agreement
DATE: April 4, 2011 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Hrdlicka Cooper CM Pre-meeting
2. BC
3.
4.
5.
6.
I. Summary:
SB 1548 implements the requirements of the Streamlined Sales and Use Tax Agreement by
making substantial changes to Florida’s sales and use tax laws in chs. 212 and 213, F.S. Such
changes are meant to simplify Florida’s sales and use tax system and qualify the state for
participation in the Sales and Use Tax Agreement, thereby making it easier for out-of-state
businesses to voluntarily collect and remit taxes to Florida.
This bill amends the following sections of Florida Statutes: 212.02, 212.03, 212.0306, 212.031,
212.04, 212.05, 212.0506, 212.054, 212.055, 212.06, 212.07, 212.08, 212.12, 212.15, 212.17,
212.18, 212.20, 213.256, 11.45, 196.012, 202.18, 203.01, 212.052, 212.081, 212.13, 218.245,
218.65, 288.1045, 288.11621, 288.1169, 551.102, and 790.0655.
This bill creates the following sections of Florida Statutes: 212.094, 213.052, 213.0521, 213.215,
213.2562, and 213.2567.
This bill repeals s. 212.0596, F.S.
II. Present Situation:
Because Florida has no personal state income tax, the state is primarily dependent on
consumption-based taxes for its general revenue. Sales tax collections make up over 70% of
general revenue.1 Forty-five states and the District of Columbia impose sales and use taxes.2
1
See Florida Revenue Estimating Conference, 2011 Florida Tax Handbook, available at
http://edr.state.fl.us/Content/revenues/reports/tax-handbook/taxhandbook2011.pdf (last visited 3/31/2011).
BILL: SB 1548 Page 2
States that do not have a personal income tax – Alaska, Florida, Nevada, New Hampshire, South
Dakota, Tennessee, Texas, Washington, and Wyoming – rely most heavily on sales tax
collections.
Florida Sales and Use Tax
Chapter 212, F.S., contains the state’s statutory provisions authorizing the levying and collection
of Florida’s sales and use tax, as well as the exemptions and credits applicable to certain items or
uses under specified circumstances. A 6 percent sales and use tax is levied on most tangible
personal property, admissions, storage, transient rentals, commercial rentals, motor vehicles, and
a limited number of services.3 The statutes currently provide more than 200 different
exemptions.4
A sales tax of 6 percent is levied on the sales prices of tangible personal property sold at retail in
Florida.5 Sales tax is added to the price of the taxable goods or service and collected from the
purchaser at the time of sale.
A use tax of 6 percent is levied on the cost prices of tangible personal property when it is used,
consumed, distributed, or stored, rather than sold, in Florida.6 This is levied when sales tax was
not paid at the time of purchase. For example, use tax is owed when a person buys:7
A taxable item in Florida and doesn’t pay sales tax;
An item tax-exempt intending to resell it, and then the item is used in a business or for
personal use; or
A taxable item outside Florida and brings or has it delivered into the state within 6
months of the purchase date, and sales tax was not paid on the item.
The use tax attempts to provide a level playing field between in-state retailers and out-of-state
vendors. The use tax preserves a key principle of the sales tax – that the tax is due in the state
where the product is used or consumed, not necessarily where it is purchased.
If the item brought into Florida is subject to tax, a credit is allowed for taxes paid to another
state, a U.S. territory, or Washington, D.C. Credit is not given for taxes paid to another country.
The Florida Department of Revenue (DOR) is responsible for administering, collecting, and
enforcing all sales taxes. Collections of discretionary sales surtaxes received by DOR are
returned monthly to the county imposing the tax. Further, there are several state-shared revenue
programs that allocate some portion of the state sales and use tax to local governments. A few
revenue sharing programs require as a prerequisite that the county or municipality meet
2
Alaska, Delaware, Montana, New Hampshire, and Oregon do not impose a state sales and use tax, although Alaska permits
local governments to impose sales and use taxes.
3
Of the limited services that are taxable, some, such as cable, are taxed at a higher rate.
4
For a list of exemptions and history, see Florida Revenue Estimating Conference (REC), 2010 Florida Tax Handbook
including Fiscal Impact of Potential Changes, available at http://www.edr.state.fl.us/taxhandbooks/taxhandbook2010.pdf (last
visited 3/8/2010). Exemptions were estimated to total about $10 billion in FY 2010-2011.
5
Section 212.05(1)(a)1.a., F.S.
6
Section 212.05(1)(b), F.S.
7
DOR, Florida’s Sales and Use Tax, GT-800013, last revised 7/2009, available at
http://dor.myflorida.com/dor/forms/2009/gt800013.pdf (last visited 3/8/2010).
BILL: SB 1548 Page 3
eligibility criteria. While general law restricts the use of some shared revenues, proceeds derived
from other shared revenues may be used for the general revenue needs of local governments.8
Local Discretionary Sales Surtax
A “surtax” is an extra tax or charge.9 Sections 212.054 and 212.055, F.S., authorize Florida
counties to charge a discretionary sales surtax on all transactions subject to the state sales and use
tax. Only those surtaxes specifically designated may be levied.
Section 212.055, F.S., authorizes counties to impose eight local discretionary sales surtaxes on
all transactions occurring in the county subject to the state tax imposed on sales, use, services,
rental, admissions, and other transactions and on communications services, defined in ch. 202,
F.S. Table 1 identifies the eight taxes, the rate limits, and the number of counties authorized to
impose and the number imposing the tax.10
Table 1: Local Discretionary Sales Surtaxes
# Counties
Authorized # Counties
Tax Authorized
Levy (%) Levying Tax
to Levy Tax
Charter County
Transportation up to 1% 31 2
System Surtax
Local Government
0.5% or 1% 67 20
Infrastructure Surtax
Small County Surtax 0.5% or 1% 31 28
Indigent Care &
up to 0.25%, or
Trauma Center 65 1
up to 0.5%
Surtax
County Public 1 (Miami-Dade
Hospital Surtax
0.5% 1
County)
School Capital
up to 0.5% 67 16
Outlay Surtax
Voter-Approved
Indigent 0.5% or 1% 60 4
Care Surtax
Emergency Fire
Rescue Services and up to 1% 65 0
Facilities Surtax11
Source: REC, 2011 Local Government Financial Information Handbook
The maximum discretionary sales surtax that any county can levy depends upon the county’s
eligibility for the taxes listed in s. 212.055, F.S.; currently, the maximum ranges between 2% and
8
For more information see the Florida Revenue Estimating Conference (REC), 2011 Local Government Financial
Information Handbook, August 2009, available at http://www.floridalcir.gov/UserContent/docs/File/reports/lgfih09.pdf (last
visited 3/8/2010)
9
Black’s Law Dictionary (8th ed., 2004), tax.
10
The tax rates, duration of the surtax, method of imposition, and proceed uses are individually specified in s. 212.055, F.S.
General limitations, administration, and collection procedures are set forth in s. 212.054, F.S.
11
Created in 2009 by ch. 2009-182, L.O.F. (Effective July 1, 2009).
BILL: SB 1548 Page 4
3.5% for Florida’s 67 counties. In general, the levy of a particular tax is subject to county voter
approval.
The discretionary sales surtax is based on the rate in the county where the taxable goods or
services are sold, or delivered into, and is levied in addition to the state taxes. The sales amount
is not subject to the tax if the property or service is delivered within a county that does not
impose a surtax. The surtax does not apply to a sales amount above $5,000 on any item of
tangible personal property. This $5,000 cap does not apply to the sale of any service, rentals of
real property, or transient rentals.
Internet Sales and Out of State Vendors
Under Florida law, each sale is subject to sales tax unless such transaction is specifically exempt.
Chapter 212, F.S., provides no exemptions for sales over the internet. Use taxes are difficult for
states to enforce because they must rely on out-of-state vendors to collect the tax money or
purchasers must remit the tax themselves. Out-of-state vendors, not wanting to be tax collectors
for states and local governments, argue that states have no jurisdiction over them. A state’s
ability to compel an out-of-state seller to collect and remit sales tax is limited by the Commerce
Clause and the Due Process Clause of the U.S. Constitution.12 The U.S. Supreme Court has held
that the state’s disparate state and local sales tax systems make collecting taxes an undue burden
on out-of-state retailers.13
In order for sales occurring over the internet to be subject to the sales tax, there must be
sufficient nexus between the seller and the state. Nexus has been found to exist when a seller:
Has agents in this state who solicit or transact business on behalf of the seller and as a
result receive orders for merchandise to be delivered to the purchaser in this state;
Has a physical location in this state;
Delivers merchandise into this state in vehicles which are leased or owned by the seller;
Owns land or buildings located in this state;
Stores merchandise in this state for sale or use; or
Rents or leases merchandise that is located in Florida in the possession of a lessee.14
If the person selling the property into this state does not have sufficient nexus or is not registered
with DOR as a dealer to collect sales tax, and the goods are delivered in Florida, then use tax
applies and is due from the purchaser.
According to the U.S. Census Bureau about 70 percent of U.S. households have internet access.15
The U.S. Census Bureau estimated the total internet or “e-commerce” sales for 2010 at $165.4
billion, an increase of 14.8 percent (±2.3%) from 2009. “Total retail sales in 2010 increased 7.0
12
Due Process requires some minimal contact with the taxing state for a taxing statute to be upheld. Upholding a statute
against a Commerce Clause challenge is dependent upon satisfaction of a 4-part test: (1) the tax is applied to an activity with
a substantial nexus with the taxing state; (2) the tax is fairly apportioned; (3) the tax does not discriminate against interstate
commerce; and (4) the tax is fairly related to a service provided by the taxing state.
13
See Closing the Online Tax Loophole, Blackston, Michelle, NCSL’s State Legislatures, April 2008.
14
Depending on the jurisdiction, courts have found that these things satisfy nexus while others have found that they were
insufficient alone.
15
2009 data available at http://www.census.gov/population/www/socdemo/computer.html (last visited 3/31/2011).
BILL: SB 1548 Page 5
percent (±0.5%) from 2009. E-commerce sales in 2010 accounted for 4.2 percent of total sales.
E-commerce sales in 2009 accounted for 3.9 percent of total sales.”16
The issue of sales and use taxes on e-commerce is important to the states for three main reasons:
The continued growth in e-commerce points to an increasing number of transactions on
which sales and use taxes will not be collected, resulting in sales tax revenue losses for
state and local governments;
Since out-of-state sellers do not have to collect sales and use taxes, except in states where
they have “nexus,” they enjoy a competitive advantage over “brick and mortar” businesses;
and
Because of loopholes for on-line retailers, consumers who can afford access to the internet
escape paying sales and use taxes while forcing those without access to shoulder a heavier
burden of the sales tax.17
A study updated in 2009 estimated that for 2012, Florida would lose out on about $1.484 billion
in uncollected sales tax revenue from out of state transitions.18 With 67 different state and local
taxing jurisdictions in Florida, an out-of-state retailer may find it difficult to collect and remit
sales taxes. There are about 7,500 different taxing jurisdictions at the state and local levels in the
U.S.
Internet Tax Freedom Act
In response to the Internet explosion, Congress enacted the Internet Tax Freedom Act in October
1998. This legislation called for a 3-year moratorium, from October 1, 1998, to October 21,
2001, on state and local taxes on Internet access and multiple or discriminatory taxes on
electronic commerce. This moratorium has been extended several times and currently expires
November 1, 2014.19
Streamlined Sales Tax Project
Because of the rise of e-commerce, a group was formed in 2000 with the National Conference of
State Legislatures (NCSL), consisting of legislators, tax administrators, and private sector
representatives, to design and implement a simplified sales tax collection system that could be
used by traditional brick-and-mortar businesses and businesses involved in e-commerce. In
response to this effort, the Florida Legislature passed ch. 2000-355, L.O.F., creating a provision
in s. 213.27, F.S., which grants DOR authority to enter into contracts with public or private
vendors to develop and implement a voluntary system for sales and use tax collection and
administration.
16
Quarterly Retail E-Commerce Sales, 4th Quarter 2010, available at
http://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf (last visited 3/31/2011).
17
Graham Williams, “Streamlined Sales Tax for the New Economy,” National Conference of State Legislatures, Nov./Dec.
2000, Vol. 8, No. 44.
18
Data collected by the National Conference of State Legislatures (NCSL); Donald Bruce and William F. Fox, Center for
Business and Research, University of Tennessee, State and Local Sales Tax Revenue Losses from E-Commerce Estimates as
of April 2009, available at http://www.ncsl.org/default.aspx?TabId=20274 (last visited 3/31/2011).
19
Created by Pub. L. No. 105-277; Extended to November 2003 by Pub. L. No. 107-75; Extended to November 2007 by Pub.
L. No. 108-435; Extended to November 2014 by Pub. L. No. 110-108.
BILL: SB 1548 Page 6
In 2001, the Uniform Sales and Use Tax Administration Act and the Streamlined Sales Tax
Agreement was approved and states that adopted the Uniform Sales and Use Tax Administration
Act or had their governors issue executive orders or similar authorizations were authorized to
participate in the next phase of discussions with other states for the purpose of developing a
multi-state, voluntary, streamlined system for the collection and administration of state and local
sales and use taxes. The Florida Legislature passed ch. 2001-225, L.O.F., which among other
things, created the Simplified Sales and Use Tax Act, authorizing Florida to participate in the
next phase of discussions with other states for the purposes of developing the project.
The result of the Streamlined Sales Tax Project is the Streamlined Sales and Use Tax Agreement
(SSUTA). It proposes an effort to “modernize” states’ sales and use tax structures to create a
uniform, simplified taxing system that would apply to all businesses collecting sales and use
taxes. Participation in collecting sales tax under the agreement is voluntary for sellers who do not
have a physical presence or “nexus” within a state. However, an end goal of the effort is for
Congress to require collection from all sellers for all types of commerce.
Streamlined Sales and Use Tax Agreement
SSUTA is a multi-state project intended to simplify the administration of sales and use taxes.
One of the goals of the legislation is to encourage sellers who do not have a physical presence in
a particular state (such as mail order and internet vendors) to nevertheless collect sales and use
taxes from their customers. Among other things, SSUTA provides for the certification of third-
party tax collection agents who will assume a vendor's sales tax collection obligations and also
provides for the certification of tax collection software.
Key features of SSUTA include:20
Uniform definitions within tax laws. Legislatures still choose what is taxable or exempt in
their state. However, participating states will agree to use the common definitions for key
items in the tax base and will not deviate from these definitions.
Rate simplification. States will be allowed one state rate and a second state rate in limited
circumstances. Local jurisdictions will be allowed one local rate.
State-level administration of all state and local taxes. Businesses will no longer file tax
returns with each local government where it conducts business in a state. States will be
responsible for the administration of all state and local taxes and the distribution of the
local taxes to the local governments. State and local governments must have common tax
bases.
Uniform sourcing rules. The states will have uniform and simple rules as to how they will
source transactions to state and local governments.
Simplified exemption administration for use- and entity-based exemptions. Sellers will not
be liable for uncollected tax when they sell something tax exempt to a purchaser who
should have been charged the sales tax. Purchasers will be responsible for paying the tax,
interest, and penalties for claiming incorrect exemptions.
Uniform audit procedures.
State funding of the system. To reduce the financial burdens on sellers, states pay the cost
of collecting the tax for businesses without a physical presence in the state.
20
See Streamlined Sales Tax Governing Board, Inc., Frequently Asked Questions, available at
http://www.streamlinedsalestax.org/index.php?page=faqs (last visited 4/1/2011).
BILL: SB 1548 Page 7
Currently, 20 states are full members of SSUTA because they have state laws which are in
compliance with the agreement. These states are: Arkansas, Indiana, Iowa, Kansas, Kentucky,
Michigan, Minnesota, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Oklahoma,
Rhode Island, South Dakota, Vermont, Washington, West Virginia, Wisconsin, and Wyoming.
There are 4 states that are associate members, meaning that the state is in compliance with
SSUTA, but their laws, rules, regulations, and policies to bring the state into compliance are not
in effect but are scheduled to take effect no later than 12 months after becoming an associate
member. These states include Georgia, Ohio, Tennessee, and Utah. Also, currently, over 1,000
businesses have voluntarily agreed to collect taxes on out-of-state sales.
III. Effect of Proposed Changes:
SB 1548 implements the requirements of SSUTA by making substantial changes to Florida’s
sales and use tax laws in chs. 212 and 213, F.S. Such changes are meant to simplify Florida’s
sales and use tax system and qualify the state for participation in the SSUTA, thereby making it
easier for out-of-state businesses to voluntarily collect and remit taxes to Florida
SSUTA Conforming Changes
Section 1 amends current definitions and creates new ones in s. 212.02, F.S., to conform to the
definitions adopted in the SSUTA in Appendix C – Library of Definitions.
Bracket System and Rounding
The SSUTA does not allow any member state to require a dealer to collect tax based upon a
bracket system, which Florida currently uses. Section 15 amends s. 212.12, F.S., to repeal
Florida law relating to bracketing. Instead, a provision is added to compute taxes based upon the
SSUTA. The SSUTA provides for rounding up and is based upon tax computations to the third
decimal place.
Additionally, Section 3 (s. 212.0306(6), F.S.), Section 6 (s. 212.04(1)(b), F.S.), Section 7 (s.
212.05(4), F.S.), Section 8 (s. 212.0506(6), F.S.), remove references to Florida bracket system.
Sourcing
In order to meet the requirements of the SSUTA, the bill sets forth specific methods for
determining where a sale took place, referred to in the SSUTA as “sourcing.” Section 9 amends
s. 212.054(3), F.S., to set forth the sourcing guidelines of the SSUTA for:
Retail sales of tangible personal property, excluding leases or rentals;
Lease or rental of tangible person property;
Lease or rental of motor vehicles or aircraft;
Retail sales of transportation equipment, including leases or rentals;
Retail sale of modular or manufactured homes, excluding mobile homes;
Retail sale of motor vehicles or mobile homes, excluding leases or rentals;
Admission charged for an event;
Lease or rental of real property;
Retail sale of aircraft, excluding lease or rental;
Purchase, use, consumption, distribution, or storage of motor vehicles or mobile homes;
BILL: SB 1548 Page 8
Transient rentals;
Coin-operated amusement or vending machines; and
Orders take by florists.
The bill also amends s. 212.05(1)(e)1.a., F.S., which sets forth special provisions related to the
taxation of charges for prepaid calling cards, depending upon where the sale took place, to meet
the new sourcing guidelines.
Taxability Matrix
The SSUTA requires each member state to complete a taxability matrix approved by the
governing board of the SSUTA. Dealers and certified service providers21 must be relieved from
liability for having charged and collected the incorrect amount of sales and use tax based on
erroneous data provided by the state in the taxability matrix. Further, purchasers are also to be
held harmless when relying on an erroneous taxability matrix provided by the state. Section 12
amends s. 212.07, F.S., to meet these requirements.
Vendor Databases
The SSUTA requires states that permit local jurisdictions to levy a sales and use tax to maintain
or make available (through a vendor) a database that meets the following requirements:
Describes the boundaries and boundary changes for all taxing jurisdictions, including the
effective dates;
Provides all sales and use tax rates by jurisdiction;
For areas that include more than one tax rate, the rates assigned to each 5-digit and 9-
digit zip code that applies the lowest combined rate to each zip code; and
Optionally include address-based boundary database records for assigning taxing
jurisdictions and associated tax rates.
The database may be a state-provided database or a state-certified database. A dealer or certified
service provider will be held harmless from any tax, interest, or penalties due solely because of
reliance on erroneous data in the database. If the 9-digit zip code is unavailable or unknown to a
dealer, then the dealer or certified service provider may apply the tax rate for the 5-digit zip
code.
The bill creates s. 212.054(8), F.S. to meet these requirements (Section 9).
Effective and Termination Dates of Taxes
Current law provides that discretionary sales surtaxes must take effect January 1 and terminate
on December 31. The bill provides that any adoption, repeal, or rate change must take effect
April 1, and the governing body adopting the tax must notify DOR of the change within 10 days
of the decision, but no later than October 20 preceding the next April 1. DOR must notify dealers
of the change by February 1 preceding the April 1 effective date. Additionally, the termination of
a surtax may only be effective on March 31, including for termination dates set prior to January
1, 2012. These changes in Section 9 meet the requirements of the SSUTA.
21
“Certified service provider” is defined in s. 213.256, F.S., as an agent certified to perform all of a dealer’s sales tax
functions other than the dealer’s obligation to remit tax on its own purchases. See Section 23 of the bill for clarifying
amendments to this definition.
BILL: SB 1548 Page 9
Section 10 also repeals a reference to an effective date of a tax for emergency fire and rescue
services and facilities in s. 212.055(8)(i), F.S.
Section 20 creates s. 213.052, F.S., to create provisions in Florida law that meet the effective
date requirements of the SSUTA for sales and use taxes. Section 213.052, F.S., provides that a
sales and use tax rate change is required to take effect on January 1, April 1, July 1, or October 1.
Additionally, DOR must give dealers notice of the rate change at least 60 days before the
effective date of the rate change. However, the provision specifies that failure of a dealer to
receive notice does not relieve it from collecting sales and use tax.
Section 21 creates s. 213.0521, F.S., to establish the effect of a rate change. It provides that for a
rate increase, the new rate applies to the first billing period starting on or after the effective date.
For a rate decrease, the new rate applies to bills rendered on or after the effective date.
Liability to Pay Tax
Further, the bill provides a rebuttable presumption that the dealer or certified service provider
exercised due diligence if it used state-certified software. Dealers or certified service providers
may become liable if they do not use the state database. A dealer is not liable for failing to
collect tax at a new rate under certain conditions. Additionally, purchasers are held harmless
from tax, interest, and penalties for failing to pay the correct tax due as a result of relying on
erroneous data or the dealer or certified service provider relying on erroneous data. See s.
212.054(8), (9), and (10), F.S., in Section 9 of the bill.
Monetary Allowance
Section 15 amends s. 212.12, F.S., to create a monetary allowance for certified service providers.
The monetary allowance is required to be in the form of a collection allowance. The allowance
must be based on certain criteria, but may not be greater than 10 percent of the tax remitted for a
reporting period.
Amnesty
The SSUTA requires member states to provide amnesty for sales and use taxes not collected or
paid for dealers who register to pay or to collect and remit applicable sales or use tax on sales
made to purchasers in the state in accordance with the terms of the SSUTA, provided that the
dealer was not so registered in the state in the twelve-month period preceding the effective date
of the state's participation in the Agreement. Section 22 creates s. 213.215, F.S., in order to meet
this requirement of the SSUTA. If a dealer registers with DOR within 12 months after the
effective date of Florida’s participation in the SSUTA, then the amnesty is provided for
uncollected or unpaid sales and use tax and any interest or penalties accrued. The dealer must
remain registered and continue collection and remittance of taxes for at least 36 months for the
amnesty to apply.
However, there are two situations in which amnesty is specifically not available:
When a dealer received notice of the commencement of an audit and the audit is not
complete, including any related administrative or judicial processes; and
For taxes already paid to the state or taxes already collected by the dealer.
BILL: SB 1548 Page 10
Discretionary Sales Surtax
Section 9 amends s. 212.054, F.S., which provides the administrative provisions for discretionary
sales surtaxes authorized for counties.
It caps the maximum taxable amount of a sale of tangible personal property at $5,000 for each
individual item. Under the bill, this cap is limited to sales of motor vehicles, aircraft, boards,
manufactured homes, modular homes, or mobile homes.
This section is amended to conform the application of surtax rate changes to utility services to
the SSUTA. It provides that the new rate applies:
In the case of a rate adoption or increase, to the first billing period starting on or after the
effective date of the adoption or increase.
In the case of a rate termination or decrease, to bills rendered on or after the effective date
of the termination or decrease.
Sales and Use Tax Exemptions
The statutes currently provide more than 200 different exemptions, many of which are in s.
212.08, F.S.
Section 13 of the bill amends s. 212.08, F.S., to changes Florida’s current sales and use tax
exemptions to conform to the requirements of the SSUTA.
Under the SSUTA, taxation of food is determined by the composition of the item. The bill
exempts and defines the following items: food and food ingredients, bakery products sold
without utensils, dietary supplements, and bottled water. The bill provides that the exemption
does not apply to the following terms: prepared food, soft drinks (does not include beverages that
contain milk or milk products, soy, rice, or similar milk substitutes, or greater than 50 percent of
vegetable or fruit juice by volume), vending machine food, candy (not including candy that
includes flour and does not require refrigeration), and tobacco. These changes result in an
expansion of some items that are exempt from sales tax under current law, such as ice cream and
juice containing between 50 and 100 percent fruit juice, and the restriction of others, such as
caramel corn.
Under current law, medical items that are exempt from taxation in Florida are designated by the
Department of Health. The bill brings the list of exempt medical items into compliance with the
SSUTA. Exempt items include prescription drugs, mobility-enhancing equipment, prosthetic
devices, durable medical equipment, hypodermic needles, over-the-counter drugs (not including
grooming and hygiene products), band-aids and the like, and funerals. The bill defines these
terms for purposes of the exemptions. The bill removes exemptions currently available to
veterinarians. The bill repeals language directing the Department of Health to advise DOR as to
the taxability of medical items (s. 212.08(14), F.S.).
Section 212.08(5)(g), F.S., currently provides an exemption for building materials used in the
rehabilitation of real property in an enterprise zone. Only one exemption through a refund of
previously paid taxes is permitted for any single parcel unless there is a change in ownership, a
new lessor, or a new lessee of the property. The bill would amend this paragraph to provide that
BILL: SB 1548 Page 11
only one exemption through a refund of previously paid taxes is permitted for any single
building. Also the bill adds a definitions for “full-time employee” and “temporary employee.”
Currently the definition of “lease,” “let,” or “rental” excludes hourly, daily, or mileage charges
subject to the jurisdiction of the Interstate Commerce Commission and certain payments to
owners of high-voltage bulk transmission facilities. Due to changes made to bring the current
law definitions into compliance with SSUTA, these exclusions were struck. The bill restores
these exclusions as exemptions from the sales and use tax in s. 212.08(14), F.S.
Mail Order
The SSUTA contains specific provisions related to mail order sales. The bill makes several
changes to conform to the agreement, including:
Section 11 amends s. 212.06(2)(c), F.S., to strike “a retailer who transacts a mail order
sale” from the definition of “dealer.”
Section 11 amends s. 212.06(3)(b), F.S., to conform to SSUTA guidelines to the sales of
advertising, promotional direct mail, and other direct mail, including guidelines on
sourcing the sale (and deletes provisions related to mail order sales in s. 212.06(5)(a)2.,
F.S.).
Section 7 amends s. 212.05, F.S. to remove a reference to “mail order.”
Section 15 amends s. 212.12, F.S., to remove references to “mail order” and a provision
authorizing DOR to negotiate collection allowances with dealers who make mail order
sales.
Section 18 amends s. 212.18, F.S., to remove a provision related to mail orders.
Section 19 amends s. 212.20(4), F.S., to remove a provision related to mail orders.
Section 42 repeals s. 212.0596, F.S., which relates to taxation of mail order sales.
Motor Vehicles
The SSUTA contains specific provisions related to the lease or rental of motor vehicles. Section
7 amends s. 212.05(1)(c), F.S. to remove special provisions related to the lease or rental of motor
vehicles from the provisions related to the tax of the lease or rental of tangible personal property.
Coin-operated Amusement Machines
Section 7 amends s. 212.05(1)(h), F.S., to raise the tax on coin operated machines from 4 to 6
percent and amends the divisors to be used to calculate the tax.
Dealer Registration
Section 18 amends s. 212.18, F.S., to allow DOR to waive the $5 registration fee for applications
submitted through the multistate electronic registration system. The SSUTA requires each
member state to participate in an online sales and use tax registration system in cooperation with
the other member states.
Refunds
Section 14 creates s. 212.094, F.S., related to purchaser requests for refunds. Under current law,
a purchaser who has overpaid tax to a dealer, or who has paid tax to a dealer when no tax is due,
must seek a refund from the dealer, not DOR. There is no requirement that a purchaser must
provide a written request to the dealer.
BILL: SB 1548 Page 12
The bill provides that in order to obtain a refund or credit for a tax collected by a dealer, the
purchaser must submit a request in writing to the dealer. The purchaser is not permitted to take
any other action for 60 days after the dealer receives the completed, written request. This does
not apply to refunds resulting from a return of merchandise to a dealer.
Section 17 deals with credits or refunds for dealers who remit taxes on transactions that
ultimately turn out to be unpaid, bad debts. The bill amends s. 212.17(3), F.S., to conform to the
SSUTA provisions on dealer recovery of bad debts. Changes include:
Specifying that the calculation of bad debt may not include financing charges or interest,
sales tax, uncollectable amounts on property that remain in the possession of the selling
dealer, expenses incurred in collection efforts, and repossessed property.
Requiring a refund claim to be filed within 12 months after the due date of the return on
which the bad debt could be claimed when the amount of bad debt exceeds the amount of
taxable sales for the period of write-off.
Allowing a certified service provider to file a claim on behalf of a dealer when the
provider has assumed the filing responsibilities of the dealer. The certified service
provider is required to credit or refund the full amount of any bad debt recovery to the
dealer.
Allowing a dealer or certified service provider to allocate the bad debts across different
states when the books and records of the dealer or certified service provider support this.
Simplified Sales and Use Tax Administration Act
The Simplified Sales and Use Tax Administration Act (the act) is set forth in s. 213.256, F.S.
Section 23 makes changes to this section of law to conform to the updated SSUTA.
As used in ss. 213.256 and 213.2567, F.S., the bill adds definitions to the act, including:
“Agent” means a person appointed by a seller to represent the seller before DOR.
“Dealer” means any person making sales, leases, or rentals of personal property or
services.
“Model 1 seller” means a dealer that has selected a certified service provider as its agent
to perform all the dealer’s sales and use tax functions.
“Model 2 seller” means a dealer that has selected a certified automated system to perform
part of its sales and use tax functions, but retains responsibility for remitting the tax.
“Model 3 seller” means a dealer that has sales in at least five member states, has total
annual sales revenue of at least $500 million, has a proprietary system that calculates the
amount of tax due each jurisdiction, and has entered into a performance agreement with
the member states which establishes a tax performance standard for the dealer. This could
also mean an affiliated group of dealers using the same proprietary system.
“Model 4 seller” means a dealer who is registered under SSUTA but is not one of the
other models of sellers.
“Registered under this agreement” means registration by a dealer with the member states
under the central registration system.
DOR is authorized to prepare and submit reports and certifications as necessary according to the
terms of the SSUTA, and to enter into agreements with the governing board of the SSUTA,
member states, and service providers to facilitate the administration of the tax laws in Florida.
BILL: SB 1548 Page 13
Section 24 creates s. 213.2562, F.S., to permit DOR to review and approve software submitted to
the governing board of the SSUTA as a certified automated system that accurately reflects the
taxability of products.
Section 25 creates s. 213.2567, F.S., related to registration, certification, liability, and audit under
the SSUTA.
A dealer that registers pursuant to the SSUTA agrees to collect and remit sales and use taxes for
all taxable sales into the member states. A dealer selects which model to remit tax under when
registering, and may be registered by an agent if the registration is submitted in writing to a
member state. With respect to liability and audits:
A model 1 seller may contract with a certified service provider to act as its agent and to
collect and remit sales and use taxes. As the model 1 seller’s agent, the certified service
provider is also liable for sales and use tax due on all sales transactions it processes for
the model 1 seller. A dealer selecting this model is also liable for any tax, interest, or
penalty due in Florida. The state may audit the dealer and its certified service provider
under Florida law or may audit the certified service provider jointly with other member
states.
A model 2 seller that uses a certified automated system remains responsible and is liable
to the state for reporting and remitting tax. However, a model 2 seller is not responsible
for errors in reliance on the certified automated system.
A model 3 seller is liable for the failure of the proprietary system to meet the
performance standard. DOR is permitted to adopt rules to establish sales tax performance
standards for model 3 sellers.
A person who provides a certified automated system is not liable for errors in the software that
was approved by DOR and certified to the governing board of the SSUTA. However, such
person is responsible for the proper functioning of the system, liable to the state for
underpayments of tax due to errors in the functioning of the software, and liable for
misclassifications of items or transactions that are not corrected within 10 days of notice by
DOR.
A person may be certified as certified service provider by DOR if the person:
Uses a certified automated system;
Integrates that system with the system of a dealer so that tax can be calculated at the time
of sale;
Agrees to remit taxes, file returns, and protect the privacy of tax information pursuant to
Florida law; and
Enters into an agreement with DOR concerning the disclosure of information.
DOR is directed to review software submitted to the governing board of the SSUTA as a
certified automated system and certify approval of the system if the software meets certain
standards for calculating taxes and reporting.
BILL: SB 1548 Page 14
Disclosure of confidential tax information may only be made according to a written agreement
between DOR and the certified service provider. Breach of confidentiality by a certified service
provider is a misdemeanor of the first degree, punishable as provided in ss. 775.082 or 775.083,
F.S.
Other Changes
Food or Drink Concessionaire Services
Section 4 amends s. 212.031(1)(a)10., F.S. Under current law, this section provides that a person
is not engaging in a taxable privilege when renting, leasing, letting, or granting a license to use
real property if the real property is leased, subleased, licensed, or rented to a person providing
food and drink concessionaire service within the premises of certain facilities listed in the
section. The bill adds a provision that the exception to the tax for property used for food or drink
concessionaire services applies only to the space used exclusively for selling and distributing
food and drink. Section 5 of the bill provides that this amendment operates retroactively and is
remedial in nature. This section states that the retroactivity does not create the right to a refund or
require a refund by any governmental entity of any tax, penalty, or interest remitted to DOR
before January 1, 2012.
Admissions Charges
Section 6 amends s. 212.04(2)(a)2.b., F.S. Under current law, this section provides an exemption
for admission charges to events that are sponsored by a governmental entity, sports authority, or
sports commission when held in a facility. The exemption only applies when the governmental
entity, sports authority, or sports commission is responsible for 100 percent of the risk of success
or failure of the event and owns 100 percent of the funds at risk for the event. The event may not
exclusively use student or faculty talent. The terms “sports authority” and “sports commission”
mean a nonprofit organization that is exempt from federal income tax under s. 501(c)(3) of the
Internal Revenue Code and contracts with a county or municipal government for the purpose of
promoting and attracting sports-tourism events to the community with which it contracts.
The bill eliminates the exemption for a sponsor that is a “sports authority” or “sports
commission” and rewords the sub-subparagraph.
Emergency Rules
Section 26 authorizes DOR to adopt emergency rules to implement this act.
Legislative Joint Select Committee
Section 27 directs the President of the Senate and the Speaker of the House of Representatives to
create a joint select committee to study alternatives for the modernization, simplification, and
streamlining of taxes in Florida, including the communications services tax. The committee is
also directed to study how sales and use tax exemptions may be used to encourage economic
development and how the state’s corporate income tax may be reviews to ensure fairness to all
businesses.
Cross-References
Section 2 (s. 212.03(7)(c), F.S.), Section 28 (s. 11.45(5)(a), F.S.), Section 16 (s. 212.15(1), F.S.),
Section 29 (s. 196.012(6), F.S.), Section 30 (s. 202.18(1)(b) and (2)(b), F.S.), Section 31 (s.
203.01(1), F.S.), Section 32 (s. 212.052(1), F.S.), Section 33 (s. 212.13(3), F.S.), Section 34 (s.
BILL: SB 1548 Page 15
212.081, F.S.), Section 35 (s. 218.245(3), F.S.), Section 36 (s. 218.65(5), (6), and (7), F.S.),
Section 37 (s. 288.1045(1)(s), F.S.), Section 38 (s. 288.11621(3)(a) and (d), F.S.), Section 39 (s.
288.1169(6), F.S.), Section 40 (s. 551.102(8), F.S.), and Section 41 (s. 790.0655(1)(a), F.S.)
make amendments to conform to changes made by the bill and correct cross-references.
Effective Date
Section 43 provides an effective date of January 1, 2012.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
This bill does not require cities and counties to expend funds or limit their authority to
raise revenue or receive state-shared revenues as specified by s.18, Art VII, of the Florida
Constitution.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
D. Other Constitutional Issues:
Section 5 of the bill provides that changes made in Section 4 of the bill to s.
212.031(1)(a)10., F.S. are remedial in nature and shall apply retroactively. Retroactive
application of legislation can implicate the due process provisions of the constitution.22
As a general matter, statutes which do not alter vested rights but relate only to remedies
or procedure can be applied retroactively.23
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
The purpose of SSUTA is to simplify Florida sales and use tax such that out-of-state
dealers can voluntarily remit taxes to Florida through the simplified system. The fiscal
impact of the collection and remittance of sales and use taxes by mail-order and e-
commerce businesses that currently do not collect such taxes for Florida is
indeterminate, but could be significant once the Streamlined Sales and Use Tax
Agreement is fully implemented.
22
See State Department of Transportation v. Knowles, 402 So.2d 1155 (Fla. 1981).
23
See Metropolitan Dade County v. Chase Federal Housing Corporation, 737 So.2d. 494 (Fla. 1999). See also City of
Orlando v. Desjardins, 493 So.2d 1027, 1028 (Fla. 1986)(citations omitted) (“If a statute is found to be remedial in nature, it
can and should be retroactively applied in order to serve its intended purposes.”).
BILL: SB 1548 Page 16
A version of this bill was reviewed by the Revenue Estimating Conference in February
2005.
Estimates were done by issue. The changes in the definitions of “fruit
drinks,” “ice cream,” “medical exemptions,” and “farm equipment” made
by this act will result in a loss of sales tax revenue. Changing the method
used to calculate sales taxes from brackets to rounding will also lead to a
decrease in sales tax revenue. The change in the definition of “sales price”
to include all delivery charges will result in an increase in sales tax
revenue. The removal of the local option sales surtax cap for certain
tangible personal property will increase local revenue. The net impact of
the committee substitute [was] negative.24
The 2005 staff analysis contained the following data:
Streamlining Fiscal Impact (millions of dollars) 2005
State Local Total
Issues Cash Recurr. Cash Recurr. Cash Recurr.
Rounding (16.5) (39.5) (3.4) (8.3) (19.9) (47.8)
Farm Equipment (3.1) (7.5) (0.7) (1.6) (3.8) (9.1)
Fruit Drinks Contain.
50% or more juice (1.0) (2.4) (0.2) (0.5) (1.2) (2.9)
Frozen Dairy and non-dairy (3.6) (8.5) (0.7) (1.7) (4.3) (10.2)
Medical Exemptions (1.2) (2.9) (0.2) (0.6) (1.4) (3.5)
Delivery Charges 5.5 13.4 1.2 2.8 6.7 16.2
Candy/Food 2.5 5.9 0.5 1.3 3.0 7.2
Local Option 20.7 49.7 20.7 49.7
Total (17.4) (41.5) 17.2 41.1 (0.2) (0.4)
B. Private Sector Impact:
The implementation of the SSUTA should reduce the costs of collecting and remitting
state and local sales and use taxes for dealers doing business in Florida and in other
member states in the long-term.
Additionally, DOR has pointed out short-term costs that dealers may incur to meet the
requirements of the SSUTA:25
Due to the multiple changes to ch. 212, F.S., proposed by this bill, the bill could
potentially affect every dealer with an active Florida sales and use tax registration
(553,934 dealers). Taxpayers may incur costs in retraining employees or in
reprogramming computers to properly tax or exempt various products and to
calculate the correct amount of tax. Dealers may also incur additional costs in
24
See Senate Staff Analysis and Economic Impact Statement for CS/SB 56, March 7, 2005, on file with the Senate
Commerce and Tourism Committee.
25
DOR, 2011 Bill Analysis, on file with the Senate Commerce and Tourism Committee. See ss. 120.54(3)(b) and 120.541,
F.S.
BILL: SB 1548 Page 17
hiring certified service providers to collect and remit the dealer’s tax, or in
purchasing or leasing certified tax software or in creating proprietary tax software,
both of which would be used to calculate tax due from the dealer.
C. Government Sector Impact:
DOR has estimated the cost of implementing the provisions of the bill to conform Florida
to the SSUTA.26 DOR estimated costs of $96,000 for FY 2010-11; $1.181 million for FY
2011-12; $449,486 for FY 2012-13; and $203,215 for FY 2013-14. Estimated costs
include:
For FY 2010-11: nonrecurring costs of $96,000 for SUNTAX programming costs
related to operating as a member of the SSUTA;
For FY 2011-12:
o $252,175 in nonrecurring costs for two Tax Information Publications to be
sent to the 554,000 dealers in Florida;
o $53,000 in nonrecurring costs to hire temporary staff to provide taxpayer
services;
o $250,000 in nonrecurring costs and $50,000 in recurring costs related to
the required rate and jurisdictional database of SSUTA;
o $526,080 in nonrecurring costs for SUNTAX programming costs related
to operating as a member of the SSUTA; and
o $50,000 in recurring costs for the annual fee to participate as a member
state in SSUTA;
For FY 2012-13:
o $225,240 in nonrecurring costs for Tax Information Publications to be sent
to dealers in Florida related to the implementation of the SSUTA;
o $74,557 in nonrecurring costs and $49,669 in recurring costs for return
and revenue processing;
o $50,000 in recurring costs related to the required rate and jurisdictional
database of SSUTA; and
o $50,000 in recurring costs for the annual fee to participate as a member
state in SSUTA;
For FY 2013-14:
o $99,338 in nonrecurring costs and $3,877 in recurring costs for return and
revenue processing; and
o $50,000 in recurring costs related to the required rate and jurisdictional
database of SSUTA; and
o $50,000 in recurring costs for the annual fee to participate as a member
state in SSUTA.
Additionally, DOR has stated that the SSUTA was amended in 2010 to provide a new
formula for rate of compensation (also known as collection allowance) for dealers
registered with the SSUTA. Florida law currently caps collection allowance at $30 per
month; however, under the new SSUTA provisions, dealers may be eligible for amounts
greater than the current cap in Florida.
26
DOR, Fiscal Impact Analysis – 2011 Session, on file with the Senate Commerce and Tourism Committee.
BILL: SB 1548 Page 18
VI. Technical Deficiencies:
None.
VII. Related Issues:
In its analysis of the bill, DOR highlighted provisions that were problematic or needed to be
amended to conform to the current SSUTA. Additionally, DOR has stated with regard to
administrative rules needed to implement the bill:27
It is anticipated that the statement of estimated regulatory costs may exceed $1 million in
the aggregate within 5 years of implementation and may require ratification of any
proposed rules and forms by the Legislature. If this occurs, it could take until after the
2012 Legislative Session for the amended rules to take effect.
VIII. Additional Information:
A. Committee Substitute – Statement of Substantial 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.
27
DOR, 2011 Bill Analysis, on file with the Senate Commerce and Tourism Committee. See ss. 120.54(3)(b) and 120.541,
F.S.
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1626
Ì3615180Î361518
LEGISLATIVE ACTION
Senate . House
.
.
.
.
.
The Committee on Commerce and Tourism (Lynn) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Delete line 8
4 and insert:
5 Section 1. Sections 817.559 and 817.56, Florida Statutes,
6 are repealed.
7
8 ================= T I T L E A M E N D M E N T ================
9 And the title is amended as follows:
10 Delete lines 3 - 4
11 and insert:
12 s. 817.559, F.S., and s. 817.56, F.S., relating to
Page 1 of 2
4/4/2011 10:10:50 AM CM.CM.03603
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 1626
Ì3615180Î361518
13 television picture tubes; providing an effective date.
14
Page 2 of 2
4/4/2011 10:10:50 AM CM.CM.03603
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 Commerce and Tourism Committee
BILL: SB 1626
INTRODUCER: Senator Lynn
SUBJECT: Television picture tubes
DATE: April 4, 2011 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. McCarthy Cooper CM Pre-meeting
2.
3.
4.
5.
6.
I. Summary:
This bill repeals s. 817.559, F.S., which requires cathode ray tubes (CRT, or television picture
tubes) be correctly labeled to indicate the new and used components and materials in such
picture tubes.
II. Present Situation:
Enacted in 1973, s. 817.559, F.S., controls television picture tube labels and provides the
following definitions:
“Picture tube” means a cathode ray tube (CRT), commonly known as a television picture
tube, designed primarily for use in a home-type television receiver alone or in
combination with any electronic device or appliance.
“Used picture tube” means a picture tube which has been sold to and used by a
consumer.
“Used component or material” means any part or material salvaged from a used or
secondhand picture tube.
The statute also provides that no manufacturer, processor, or distributor of television picture
tubes may offer for sale, or expose for sale, any such tube unless the television picture tube and
its container, if any, are correctly labeled to indicate the new and used components and materials
of such tube according to the schedule and manner hereinafter provided.
BILL: SB 1626 Page 2
The description of the picture tube by new and used components and materials shall be indicated
by setting forth on the label the particular grade and verbatim description as selected from the
following which applies to such tube:
Black and white picture tube.—
o Grade AA.—Description: All new components and materials, including new glass
envelope.
o Grade A.—Description: Used glass envelope; all other components and materials
are new.
o Grade B.—Description: Used glass envelope, used phosphorescent viewing
screen, used aluminization, and used internal conductive coating; all other
components and materials are new.
o Grade C.—Description: Used picture tube for resale; all significant components
and materials are used.
Color picture tube.—
o Grade AA.—Description: All new components and materials, including new glass
envelope.
o Grade A.—Description: Used glass envelope and new or used shadow mask; all
other components and materials are new.
o Grade B.—Description: New electron gun; all other components and materials are
used.
o Grade C.—Description: Used picture tube for resale; all significant components
and materials are used.
Used picture tube.—The fact that a used picture tube has been rejuvenated, has a new or
used brightener attached to it, or has fresh paint or coating on the outside, or any
combination of the above, shall not change its status or description as a Grade C picture
tube, and the terms “rebuilt” or “reconditioned” or words of like import shall not be used
to describe such tube.
Picture tube seconds.—When a picture tube is a “second,” such tube shall be designated
by label as a “second” to the exclusion of any other grade designation or component
description, and the following additional notation shall appear verbatim on the label:
“This picture tube is a manufacturer’s reject or second line quality tube, but it is capable
of giving satisfactory performance.”
Any person who violates the provisions of this section is guilty of a misdemeanor of the second
degree, punishable as provided in s. 775.082, F.S., or s. 775.083, F.S.
III. Effect of Proposed Changes:
Section 1 repeals s. 817.559, F.S., relating to television picture tube labeling requirements.
Section 2 provides that the act will take effect July 1, 2011.
BILL: SB 1626 Page 3
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None.
B. Private Sector Impact:
There is a possible cost savings to private industry in that they will no longer have to
label picture tubes as outlined in the current statute.
C. Government Sector Impact:
None.
VI. Technical Deficiencies:
None.
VII. Related Issues:
Preliminary research indicates that the demise of the “picture tube” had been expected as far
back as 2006, where USA Today reported that retailers expect little to no demand for CRTs by
2009, partly because of a government-imposed deadline requiring television broadcasts
nationwide to switch to all-digital by February of that year.1
VIII. Additional Information:
A. Committee Substitute – Statement of Substantial Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
None.
1
http://www.usatoday.com/tech/products/gear/2006-10-22-crt-demise_x.htm
BILL: SB 1626 Page 4
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.
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 Commerce and Tourism Committee
BILL: SB 1632
INTRODUCER: Senator Lynn
SUBJECT: Florida Industrial Development Corporation
DATE: April 4, 2011 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Pugh Cooper CM Pre-meeting
2. BC
3.
4.
5.
6.
I. Summary:
Chapter 289, F.S., approved by the Legislature in 1961, created a process by which Florida
residents, businesses, and financial institutions could create a Florida Industrial Development
Corporation (FIDC) with the power to issue revenue bonds for economic development projects.
It appears that only two FIDCs have been created, and both have dissolved, according to the state
Division of Corporations. Despite a statutory reporting requirement, there also appears to be no
information about these FIDCs’ activities.
SB 1632 repeals ch. 289, F.S., and deletes cross-references to it in other statutes.
The repeal of ch. 289, F.S., will not impact other industrial development revenue bond programs
created for local governments and for the Office of Tourism, Trade, and Economic Development,
or managed by Enterprise Florida, Inc., (EFI).
SB 1632 repeals ss. 289.011, 289.021, 289.031, 289.041, 289.051, 289.061, 289.071, 289.081,
289.091, 289.101, 289.111, 289.121, 289.131, 289.141, 289.151, 289.161, 289.171, 289.181,
289.191, and 289.201, F.S., and amends ss. 212.08, 220.08, 220.183, 220.62, 440.491, and
658.67, F.S.
BILL: SB 1632 Page 2
II. Present Situation:
The Legislature in 1961 passed HB 15081 (ch. 61-177, L.O.F.) that created ch. 289, F.S., the
Florida Industrial Development Corporation. The chapter established a process by which a
minimum of 25 Florida “persons” (meaning individuals and businesses) could file incorporation
documents with the state Division of Corporations for the purposes of issuing industrial revenue
bonds. The chapter specified the powers and duties of an FIDC, which could have a duration of
50 years unless its board of directors dissolved it. Each FIDC was to make annual reports to what
is now the Office of Financial Services of the state Financial Services Commission,2 which also
was statutorily directed to annually examine each FIDC’s financial records. The FIDCs were
specifically prohibited, pursuant to s. 289.161, F.S., from pledging the credit of the state of
Florida when issuing revenue bonds.
Information about how many FIDCs actually were formed, whether they issued any bonds, and if
so, what types of projects were financed, is lacking. Staff of the Office of Financial Services can
find no documentation that the required examinations were conducted, nor copies of any annual
reports. The state Division of Corporations Sunbiz database lists two entities that may be FIDCS
– the Industrial Development Corporation of Florida, created in 1961 and dissolved in 1991, and
the Florida Industrial Development Corporation, created in 1979 and dissolved in 1980 – but
there is no absolute certainty that these entities were created pursuant to ch. 289, F.S.
The last time any section of this chapter was amended was in 2003, to update obsolete
references.
Since the creation of ch. 189, F.S., the Legislature has passed legislation facilitating the creation
of other bond financing entities focused on economic development, including the Florida
Development Finance Corporation, in Part IX of ch. 288, F.S., and managed by EFI, and Parts II,
III and VI of ch. 159, F.S., which allows local governments and local authorities to issue revenue
bonds.
III. Effect of Proposed Changes:
Section 1: Repeals all the sections in ch. 289, F.S., relating to the Florida Industrial Development
Corporation. This removes the statutory provisions related to: the incorporation of an industrial
development corporation; the FIDC’s special corporate powers; authorized financial
transactions; membership of financial institutions; powers of stockholders and members;
procedures for amending the articles of incorporation; the conduct of corporation business and
affairs; requirements for saving a portion of annual earned surplus; requirements for meetings;
corporate existence; dissolution; credit of the state; Federal Small Business Investment Act; tax
exemptions; credits or privileges; required periodic examinations; and the $50 annual
occupational license tax for industrial development corporations.
Section 2: Amends s. 212.08, F.S., to remove a cross-reference.
1
Sponsored by young legislators Lawton Chiles (future U.S. Senator and Florida Governor) and Don Fuqua (future U.S.
Congressman)
2
This commission is comprised of the Governor and Cabinet.
BILL: SB 1632 Page 3
Section 3: Amends s. 220.183, F.S., to remove a cross-reference.
Section 4: Amends s. 220.62, F.S., to remove a cross-reference.
Section 5: Amends s. 440.491, F.S., to remove a cross-reference.
Section 6: Amends s. 658.67, F.S., to remove a cross-reference.
Section 7: Specifies an effective date of July 1, 2011.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
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.
BILL: SB 1632 Page 4
VIII. Additional Information:
A. Committee Substitute – Statement of Substantial 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 - 2011 COMMITTEE AMENDMENT
Bill No. SB 1878
Ì244102bÎ244102
LEGISLATIVE ACTION
Senate . House
.
.
.
.
.
The Committee on Commerce and Tourism (Ring) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Delete lines 51 - 182.
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 lines 3 - 18
8 and insert:
9 amending s. 48.193, F.S.; including as an
Page 1 of 1
4/4/2011 3:47:31 PM 577-03685-11
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 Commerce and Tourism Committee
BILL: SB 1878
INTRODUCER: Senator Margolis
SUBJECT: The jurisdiction of the courts
DATE: April 4, 2011 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. McCarthy Cooper CM Pre-meeting
2. JU
3. BC
4.
5.
6.
I. Summary:
This bill amends s. 48.081, F.S., to permit process to be served on the Secretary of State if other
individuals identified by statute cannot be personally served, and amends s. 48.151, F.S., to
specify the requirements related to such actions.
The bill amends s. 48.193, F.S., to provide in the Florida long-arm statute that Florida courts
have personal jurisdiction, in some instances, over persons who contractually consent to personal
jurisdiction in Florida, consistent with current provisions in s. 685.102, F.S., relating to contracts.
Section 685.101, F.S., is amended to allow non-residents that do not have a business presence in
Florida to agree that Florida Law will govern the contract, and consequently agree that Florida
Courts will have jurisdiction in any contractual disputes, should they arise.
The bill also
Amends s. 55.502, F.S., to clarify that judgments from Puerto Rico and other U.S.
territories are entitled to enforcement in Florida;
Corrects cross-references in the Florida International Commercial Arbitration Act,
consistent with the United Nations Commission on International Trade Law
(UNCITRAL) Model Law on International Commercial Arbitration (Model Law) as
amended in 2006; and
Amends s. 685.102, F.S., to provide that certain contracts with forum-selection clauses
are enforceable if made “consistent with” rather than “pursuant to” s. 685.101, F.S., and
apply the change prospectively.
BILL: SB 1878 Page 2
This bill substantially amends the following sections of the Florida Statutes: 48.081, 48.151,
48.193, 55.502, 684.0019, 684.0026, 685.101, and 685.102.
II. Present Situation:
Under Florida law, service of process and personal jurisdiction are two distinct but related
concepts. Both are necessary before a defendant, either an individual or business entity, may be
compelled to answer a claim brought in a court of law. Personal jurisdiction refers to whether the
actions of an individual or business entity as set forth in the applicable statutes permit the court
to exercise jurisdiction in a lawsuit brought against the individual or business entity in this state.
Service of process is the means of notifying a party of a legal claim and, when accomplished,
enables the court to exercise jurisdiction over the defendant and proceed to judgment. Personal
jurisdiction over a nonresident of the state is circumscribed by constitutional considerations of
minimum contacts as stated in the seminal case of International Shoe Co. v. Washington, 326
U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), and its progeny. As explained in Venetian Salami,
two inquiries must be made regarding personal jurisdiction over a nonresident:
First, it must be determined that the complaint alleges sufficient jurisdictional facts to
bring the action within the ambit of the statute; and if it does, the next inquiry is whether
sufficient “minimum contacts” are demonstrated to satisfy due process requirements.1
“It is well-settled that „[a] judgment entered without valid service is void for lack of personal
jurisdiction and may be collaterally attacked at any time.‟”2
Section 48.081, F.S., specifies the requirements for service of process on corporations who are
named as defendant in lawsuits. This statute does not address situations regarding a foreign
private corporation who used to do business in Florida but no longer has a presence, employees
or officers in the state. Consequently, a plaintiff is unable to serve such a corporation with
process.
Section 48.151, F.S., specifies the requirements for effectuating service of process on statutory
agents for certain persons. Subsection (1), establishes the following responsibilities for statutory
agents for service of process:
The public officer, board, agency, or commission so served shall file one copy in his or
her or its records and promptly send the other copy, by registered or certified mail, to the
person to be served as shown by his or her or its records. Proof of service on the public
officer, board, agency, or commission shall be by a notice accepting the process which
shall be issued by the public officer, board, agency, or commission promptly after service
and filed in the court issuing the process. The notice accepting service shall state the date
upon which the copy of the process was mailed by the public officer, board, agency, or
commission to the person being served and the time for pleading prescribed by the rules
of procedure shall run from this date.
1
Borden v. East-European Ins. Co., 921 So. 2d 587, 591-592 (Fla. 2006) (internal citations omitted).
2
Alvarado v. Cisneros, 919 So. 2d 585, 587 (Fla. 3d DCA 2006) (quoting Great Am. Ins. Co. v. Bevis, 652 So. 2d 382,
383(Fla. 2d DCA 1995)).
BILL: SB 1878 Page 3
Subsection (5) states that the Secretary of State is the agent for service of process for any retailer,
dealer or vendor who has failed to designate an agent for service of process.
Long-Arm Jurisdiction
Section 48.193, F.S., establishes a broad list of acts that can subject a person to the jurisdiction of
courts of this state.3 This section is also known as the Florida long-arm statute.
Section 685.102, F.S., establishes acts relating to contracts that can subject a person to the
jurisdiction of the courts of this state, including a foreign defendant who enters into a contract
and satisfies the other requirements related to choice of law in s. 685.101, F.S.
Section 685.101, F.S., establishes a choice of law provision within Florida Statutes whereby
parties to any agreement may chose to have the law of this state govern such contract. However,
subsection (2) restricts the choice of law to contracts, agreements or undertakings:
3
Section 48.193, F.S., states in part:
(1) Any person, whether or not a citizen or resident of this state, who personally or through an agent does any of
the acts enumerated in this subsection thereby submits himself or herself and, if he or she is a natural person, his or
her personal representative to the jurisdiction of the courts of this state for any cause of action arising from the doing
of any of the following acts:
(a) Operating, conducting, engaging in, or carrying on a business or business venture in this state or having an
office or agency in this state.
(b) Committing a tortious act within this state.
(c) Owning, using, possessing, or holding a mortgage or other lien on any real property within this state.
(d) Contracting to insure any person, property, or risk located within this state at the time of contracting.
(e) With respect to a proceeding for alimony, child support, or division of property in connection with an action to
dissolve a marriage or with respect to an independent action for support of dependents, maintaining a matrimonial
domicile in this state at the time of the commencement of this action or, if the defendant resided in this state
preceding the commencement of the action, whether cohabiting during that time or not. This paragraph does not
change the residency requirement for filing an action for dissolution of marriage.
(f) Causing injury to persons or property within this state arising out of an act or omission by the defendant outside
this state, if, at or about the time of the injury, either:
1. The defendant was engaged in solicitation or service activities within this state; or
2. Products, materials, or things processed, serviced, or manufactured by the defendant anywhere were used or
consumed within this state in the ordinary course of commerce, trade, or use.
(g) Breaching a contract in this state by failing to perform acts required by the contract to be performed in this
state.
(h) With respect to a proceeding for paternity, engaging in the act of sexual intercourse within this state with
respect to which a child may have been conceived.
(2) A defendant who is engaged in substantial and not isolated activity within this state, whether such activity is
wholly interstate, intrastate, or otherwise, is subject to the jurisdiction of the courts of this state, whether or not the
claim arises from that activity.
(3) Service of process upon any person who is subject to the jurisdiction of the courts of this state as provided in
this section may be made by personally serving the process upon the defendant outside this state, as provided in s.
48.194. The service shall have the same effect as if it had been personally served within this state.
(4) If a defendant in his or her pleadings demands affirmative relief on causes of action unrelated to the
transaction forming the basis of the plaintiff‟s claim, the defendant shall thereafter in that action be subject to the
jurisdiction of the court for any cause of action, regardless of its basis, which the plaintiff may by amendment assert
against the defendant.
(5) Nothing contained in this section limits or affects the right to serve any process in any other manner now or
hereinafter provided by law.
BILL: SB 1878 Page 4
Regarding any transaction which does not bear a substantial or reasonable relation to this
state in which every party is either or a combination of:
1. A resident and citizen of the United States, but not of this state; or
2. Incorporated or organized under the laws of another state and does not maintain a
place of business in this state; . . .
Florida Enforcement of Foreign Judgments Act
Under the Florida Enforcement of Foreign Judgments Act (act), ss. 55.501-55.509, F.S., foreign
judgments may be enforced in Florida. The foreign judgments that may be enforced under the act
include “any judgment, decree, or order of a court of any other state or of the United States if
such judgment, decree, or order is entitled to full faith and credit in this state.”4 In Rodriguez v.
Nasrallah, 659 So. 2d 437, 439 (Fla. 1st DCA 1995), the court stated that “[j]udgments of courts
in Puerto Rico are entitled to full faith and credit in the same manner as judgments from courts of
sister States.” As a result, the court permitted the enforcement of a Puerto Rican judgment in
Florida. However, a judgment from a Puerto Rican court is not a judgment from a state court as
required by the act. Accordingly, the wording of the act would appear to preclude the
enforcement of the judgments of courts for U.S. territories and possessions in Florida.
Florida International Commercial Arbitration Act
Chapter 2010-60, L.O.F., repealed the then current law relating to international commercial
arbitration and adopted instead the United Nations Commission on International Trade Law
(UNCITRAL) Model Law on International Commercial Arbitration (Model Law) as amended in
2006.
Chapter 684, F.S., in accordance with the UNCITRAL Model Law on International Commercial
Arbitration, applies to any international commercial arbitration subject to an agreement between
the United States of America and any other country. The law provides certain definitions,
principles under which the law is to be interpreted, procedural requirements, discovery and
evidentiary requirements, and arbitral tribunal powers and immunity.
The law also limits a court‟s authority to intervene in arbitration and specifies when a court
should intervene.
III. Effect of Proposed Changes:
Section 1 amends s. 48.081, F.S., to permit process to be served on the Secretary of State if
representatives of a corporation, as identified in this section, cannot be personally served
pursuant to s. 48.151, F.S.
Section 2 amends s. 48.151, F.S., setting out the procedure to be used for service on the
Secretary of State when a domestic corporation or a registered foreign corporation is being
served pursuant s. 48.081, F.S., as amended in Section 1 of the bill. Specifically, to require:
4
Section 55.502(1), F.S.
BILL: SB 1878 Page 5
That process served on the Secretary of State on behalf of a defendant corporation be
accompanied by a fee, an affidavit detailing other attempts to serve the corporation, and
known addresses of representatives of the corporation, and multiple copies of the process;
That the Secretary of State mail, by regular and registered/certified mail, a copy of the
process to representatives of the defendant corporation;
That the Secretary of State provide a notice of service to the plaintiff or plaintiff‟s
attorney; and
The Secretary of State shall explain the reasons for rejecting the service of process.
Section 3 amends s. 48.193, F.S., to provide in the Florida long-arm statute that Florida courts
have personal jurisdiction, in some instances, over persons who contractually consent to personal
jurisdiction in Florida, consistent with current provisions in s. 685.102, F.S. Specifically, persons
who enter into contracts that comply with s. 685.102, F.S., are subject to the jurisdiction of
Florida courts.
Section 4 amends subsection (1) of s. 55.502, F.S., to delete the limitation of the term foreign
judgments to “any other state or of the United States,” thereby allowing for judgments from
Puerto Rico and other territories or possession of the United States to be recognized and be
entitled to enforcement in Florida.
Sections 5 and 6 amend the Florida International Commercial Arbitration Act (act), which was
adopted in 2010, to change cross-references that the International Law Section of the Florida Bar
represent were “inadvertent clerical errors” in the crafting of the act, which are inconsistent with
the UNCITRAL Model Law on commercial Arbitration.
Section s. 684.0018, F.S., authorizes arbitral tribunals to order interim measures, unless
otherwise agreed to by the parties. An interim measure must be requested by a party and is a
temporary measure that may include an order to:
(1) Maintain or restore the status quo;
(2) Take action to prevent, or refrain from an action that is likely to cause, current or
imminent harm or prejudice to the arbitral process;
(3) Preserve assets, which may be used to satisfy an award; or
(4) Preserve evidence relevant and material to the dispute being arbitrated.
Section 684.0019, F.S., requires a party to prove certain conditions prior to requesting an interim
measure. Subsection (1) specifies that a party must prove:
Without the interim measure, there would be irreparable harm that an award would not
repair and the irreparable harm outweighs the harm that would affect the party to whom
the interim measure is against; and
It is reasonably possible that the party requesting the interim measure will succeed on the
merits of its claim.
Subsection (2) of s. 684.019, F.S., states that with regard to a request for an interim measure
under s. 684.018, F.D., the requirements apply only to the extent the arbitral tribunal considers
appropriate.
BILL: SB 1878 Page 6
Section 5 amends 684.019(2), F.S., to replace the general reference to s. 684.018, F.S., to a
specific reference to subsection (4) of s. 684.018, F.S., which is consistent with the UNCITRAL
model law.
Section 684.026, F.S., provides for the recognition and enforcement of an interim measure.
Subsection (1) states that an interim measure is binding upon the parties and enforced, upon
application of a party, by a court or a country‟s equivalent authority, “subject to s. 684.0019(1).”
Section 6 amends s. 684.0026(1), F.S., to replace the reference to s. 684.0019(1), F.S., with s.
684.0027, F.S., which specifies the grounds for refusing recognition or enforcement. This is
consistent with the UNCITRAL model law.
Section 7 amends s. 685.101, F.S., to allow entities who are entering into any contract,
agreement, or undertaking contingent or otherwise involving in the aggregate at least $250,000,
to agree that the law of this state govern such contract, agreement, or undertaking. This change
removes the requirement that the transaction bear a substantial or reasonable relation to this state.
Changes to this section take effect prospectively – for contracts entered into on or after July 1,
2011.
Section 8 amends s. 685.102, F.S., to clarify that certain contracts with forum-selection clauses
are enforceable if made “consistent with” rather than “pursuant to” s. 685.101, F.S., which
relates to choice of law.
Changes to this section take effect prospectively – for contracts entered into on or after July 1,
2011.
Section 9 provides an effective date of July 1, 2011.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
Section 2 of the bill authorizes a service fee of $10 for service on the Secretary of State.
BILL: SB 1878 Page 7
B. Private Sector Impact:
According to The Florida Bar, International Law Section, the bill enhances the business
climate in Florida by clarifying and streamlining existing legislation related to
international law matters in order to increase Florida‟s attractiveness as a business
friendly state.5
C. Government Sector Impact:
Currently the Secretary of State accepts substitute service of process under 17 statutory
provisions. This bill affects two of these provisions and it is estimated that the yearly cost
to comply with the requirements of this bill will be $917,397, with revenue projected to
be $37,500.6
The change in law to allow parties the choice of using Florida Law in their contracts may
increase the amount of litigation in the state and create a corresponding cost with respect
to the court system.
VI. Technical Deficiencies:
None.
VII. Related Issues:
None.
VIII. Additional Information:
A. Committee Substitute – Statement of Substantial 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.
5
Memo from The Florida Bar, International Law Section on file with the Senate Commerce and Tourism Committee.
6
Department of State analysis on file with the Senate Commerce and Tourism Committee.
Florida Senate - 2011 COMMITTEE AMENDMENT
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LEGISLATIVE ACTION
Senate . House
.
.
.
.
.
The Committee on Commerce and Tourism (Gaetz) recommended the
following:
1 Senate Amendment (with title amendment)
2
3
4 Delete everything after the enacting clause
5 and insert:
6 Section 1. Subsection (7) is added to section 20.21,
7 Florida Statutes, to read:
8 20.21 Department of Revenue.—There is created a Department
9 of Revenue.
10 (7) The Destination Resort Commission is created within the
11 Department of Revenue.
12 Section 2. Subsection (17) is added to section 120.80,
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13 Florida Statutes, to read:
14 120.80 Exceptions and special requirements; agencies.—
15 (17) THE DESTINATION RESORT COMMISSION.—
16 (a) The Destination Resort Commission is exempt from the
17 hearing and notice requirements of ss. 120.569 and 120.57(1)(a)
18 in proceedings for the issuance, denial, renewal, or amendment
19 of a destination resort license.
20 (b) Section 120.60 does not apply to applications for a
21 destination resort license.
22 (c) Notwithstanding the provisions of s. 120.542, the
23 Destination Resort Commission may not accept a petition for
24 waiver or variance and may not grant any waiver or variance from
25 the requirements of the Destination Resort Act, sections 3
26 through 35 of this act.
27 Section 3. This section and sections 4 through 35 of this
28 act may be cited as the “Destination Resort Act” or the “Resort
29 Act.”
30 Section 4. Definitions.—As used in the Resort Act, the
31 term:
32 (1) “Affiliate” means a person who, directly or indirectly,
33 through one or more intermediaries:
34 (a) Controls, is controlled by, or is under common control
35 of;
36 (b) Is in a partnership or joint venture relationship with;
37 or
38 (c) Is a shareholder of a corporation, a member of a
39 limited liability company, or a partner in a limited liability
40 partnership with,
41
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42 an applicant for a resort license or a resort licensee.
43 (2) “Ancillary areas” includes the following areas within a
44 limited gaming facility, unless the context otherwise requires:
45 (a) Major aisles, the maximum area of which may not exceed
46 the limit within any part of the limited gaming facility as
47 specified by the commission.
48 (b) Back-of-house facilities.
49 (c) Any reception or information counter.
50 (d) Any area designated for the serving or consumption of
51 food and beverages.
52 (e) Any retail outlet.
53 (f) Any area designated for performances.
54 (g) Any area designated for aesthetic or decorative
55 displays.
56 (h) Staircases, staircase landings, escalators, lifts, and
57 lift lobbies.
58 (i) Bathrooms.
59 (j) Any other area that is not intended to be used for the
60 conduct or playing of games or as a gaming pit as defined by
61 rules of the commission or specified in the application for the
62 destination resort license.
63 (3) “Applicant,” as the context requires, means a person
64 who applies for a resort license, supplier’s license, or
65 occupational license. A county, municipality, or other unit of
66 government is prohibited from applying for a resort license.
67 (4) “Chair” means the chair of the Destination Resort
68 Commission.
69 (5) “Commission” means the Destination Resort Commission.
70 (6) “Conflict of interest” means a situation in which the
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71 private interest of a member, employee, or agent of the
72 commission may influence his or her judgment in the performance
73 of his or her public duty under the Resort Act. A conflict of
74 interest includes, but is not limited to:
75 (a) Any conduct that would lead a reasonable person having
76 knowledge of all of the circumstances to conclude that the
77 member, employee, or agent of the commission is biased against
78 or in favor of an applicant.
79 (b) The acceptance of any form of compensation from a
80 source other than the commission for any services rendered as
81 part of the official duties of the member, employee, or agent of
82 the commission.
83 (c) Participation in any business transaction with or
84 before the commission in which the member, employee, or agent of
85 the commission, or the parent, spouse, or child of a member,
86 employee, or agent, has a financial interest.
87 (7) “Department” means the Department of Revenue.
88 (8) “Destination resort” or “resort” means a freestanding,
89 land-based structure in which limited gaming may be conducted. A
90 destination resort is a mixed-use development consisting of a
91 combination of various tourism amenities and facilities,
92 including, but not limited to, hotels, villas, restaurants,
93 limited gaming facilities, convention facilities, attractions,
94 entertainment facilities, service centers, and shopping centers.
95 (9) “Destination resort license” or “resort license” means
96 a license to operate and maintain a destination resort having a
97 limited gaming facility.
98 (10) “District” means any of the following five districts
99 of the state:
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100 (a) District One: Escambia, Santa Rosa, Okaloosa, Walton,
101 Holmes, Jackson, Washington, Bay, Calhoun, Gulf, Franklin,
102 Liberty, Gadsden, Leon, Wakulla, Jefferson, Madison, Hamilton,
103 Taylor, Lafayette, Suwannee, Columbia, Baker, Union, Bradford,
104 Alachua, Gilchrist, Dixie, and Levy Counties.
105 (b) District Two: Nassau, Duval, Clay, Putnam, St. Johns,
106 Flagler, Marion, Volusia, Lake, Seminole, Orange, Hernando,
107 Polk, and Osceola Counties.
108 (c) District Three: Citrus, Sumter, Pasco, Pinellas,
109 Hillsborough, Manatee, Hardee, DeSoto, Sarasota, Charlotte, Lee,
110 Collier, Monroe, Highlands, Okeechobee, Glades, and Hendry
111 Counties.
112 (d) District Four: Brevard, Indian River, St. Lucie,
113 Martin, and Palm Beach Counties.
114 (e) District Five: Broward and Miami-Dade Counties.
115 (11) “Executive director” means the executive director of
116 the commission.
117 (12) “Financial interest” or “financially interested” means
118 any interest in investments or awarding of contracts, grants,
119 loans, purchases, leases, sales, or similar matters under
120 consideration or consummated by the commission, or ownership in
121 an applicant or a licensee. A member, employee, or agent of the
122 commission is deemed to have a financial interest in a matter
123 if:
124 (a) The individual owns any interest in any class of
125 outstanding securities that are issued by a party to the matter
126 under consideration by the commission, except indirect interests
127 such as a mutual fund; or
128 (b) The individual is employed by or is an independent
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129 contractor for a party to a matter under consideration by the
130 commission.
131 (13) “Gaming pit” means an area commonly known as a gaming
132 pit or any similar area from which limited gaming employees
133 administer and supervise the games.
134 (14) “Gross receipts” means the total of cash or cash
135 equivalents received or retained as winnings by a resort
136 licensee and the compensation received for conducting any game
137 in which the resort licensee is not party to a wager, less cash
138 taken in fraudulent acts perpetrated against the resort licensee
139 for which the resort licensee is not reimbursed. The term does
140 not include:
141 (a) Counterfeit money or tokens;
142 (b) Coins of other countries which are received in gaming
143 devices and which cannot be converted into United States
144 currency;
145 (c) Promotional credits or “free play” as provided by the
146 resort licensee as a means of marketing the limited gaming
147 facility; or
148 (d) The amount of any credit extended until collected.
149 (15) “Individual” means a natural person.
150 (16) “Institutional investor” means, but is not limited to:
151 (a) A retirement fund administered by a public agency for
152 the exclusive benefit of federal, state, or county public
153 employees.
154 (b) An employee benefit plan or pension fund that is
155 subject to the Employee Retirement Income Security Act of 1974
156 (ERISA).
157 (c) An investment company registered under the Investment
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158 Company Act of 1940.
159 (d) A collective investment trust organized by a bank under
160 12 C.F.R. part 9, s. 9.18.
161 (e) A closed-end investment trust.
162 (f) A life insurance company or property and casualty
163 insurance company.
164 (g) A financial institution.
165 (h) An investment advisor registered under the Investment
166 Advisers Act of 1940.
167 (17) “Junket enterprise” means any person who, for
168 compensation, employs or otherwise engages in the procurement or
169 referral of persons for a junket to a destination resort
170 licensed under the Resort Act regardless of whether those
171 activities occur within this state. The term does not include a
172 resort licensee or applicant for a resort license or a person
173 holding an occupational license.
174 (18) “License,” as the context requires, means a resort
175 license, supplier’s license, or an occupational license.
176 (19) “Licensee,” as the context requires, means a person
177 who is licensed as resort licensee, supplier licensee, or
178 occupational licensee.
179 (20) “Limited gaming,” “game,” or “gaming,” as the context
180 requires, means the games authorized pursuant to the Resort Act
181 in a limited gaming facility, including, but not limited to,
182 those commonly known as baccarat, twenty-one, poker, craps, slot
183 machines, video gaming of chance, roulette wheels, Klondike
184 tables, punch-board, faro layout, numbers ticket, push car, jar
185 ticket, pull tab, or their common variants, or any other game of
186 chance or wagering device that is authorized by the commission.
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187 (21) “Limited gaming employee” means any employee of a
188 resort licensee, including, but not limited to:
189 (a) Cashiers.
190 (b) Change personnel.
191 (c) Count room personnel.
192 (d) Slot machine attendants.
193 (e) Hosts or other individuals authorized to extend
194 complimentary services, including employees performing functions
195 similar to those performed by a representative for a junket
196 enterprise.
197 (f) Machine mechanics, computer machine technicians, or
198 table game device technicians.
199 (g) Security personnel.
200 (h) Surveillance personnel.
201 (i) Promotional play supervisors, credit supervisors, pit
202 supervisors, cashier supervisors, shift supervisors, table game
203 managers, assistant managers, and other supervisors and
204 managers.
205 (j) Boxmen.
206 (k) Dealers or croupiers.
207 (l) Floormen.
208 (m) Personnel authorized to issue promotional credits.
209 (n) Personnel authorized to issue credit.
210
211 The term includes an employee of a person holding a supplier’s
212 license whose duties are directly involved with the repair or
213 distribution of slot machines or table game devices or
214 associated equipment sold or provided to a resort licensee. The
215 term does not include bartenders, cocktail servers, or other
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216 persons solely engaged in preparing or serving food or
217 beverages, clerical or secretarial personnel, parking
218 attendants, janitorial staff, stage hands, sound and light
219 technicians, and other nongaming personnel as determined by the
220 commission. The term includes a person employed by a person or
221 entity other than a resort licensee who performs the functions
222 of a limited gaming employee.
223 (22) “Limited gaming facility” means the limited gaming
224 floor and any ancillary areas.
225 (23) “Limited gaming floor” means the approved gaming area
226 of a resort. Ancillary areas in or directly adjacent to the
227 gaming area are not part of the limited gaming floor for
228 purposes of calculating the size of the limited gaming floor.
229 (24) “Managerial employee” has the same meaning as in s.
230 447.203(4), Florida Statutes.
231 (25) “Occupational licensee” means a person who is licensed
232 to be a limited gaming employee.
233 (26) “Qualifier” means an affiliate, affiliated company,
234 officer, director, or managerial employee of an applicant for a
235 resort license, or a person who holds a direct or indirect
236 equity interest in the applicant. The term may include an
237 institutional investor. As used in this subsection, the terms
238 “affiliate,” “affiliated company,” and “a person who holds a
239 direct or indirect equity interest in the applicant” do not
240 include a partnership, a joint venture relationship, a
241 shareholder of a corporation, a member of a limited liability
242 company, or a partner in a limited liability partnership that
243 has a direct or indirect equity interest in the applicant for a
244 resort license of 5 percent or less and is not involved in the
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245 gaming operations as defined by the rules of the commission.
246 (27) “Supplier licensee” or “supplier” means a person who
247 is licensed to furnish gaming equipment, devices, or supplies or
248 other goods or services to a resort licensee.
249 (28) “Wagerer” means a person who plays a game authorized
250 under the Resort Act.
251 Section 5. Destination Resort Commission; creation and
252 membership.—
253 (1) CREATION.—There is created the Destination Resort
254 Commission assigned to the Department of Revenue for
255 administrative purposes only. The commission is a separate
256 budget entity not subject to control, supervision, or direction
257 by the Department of Revenue in any manner, including, but not
258 limited to, personnel, purchasing, transactions involving real
259 or personal property, and budgetary matters. The commission
260 shall be composed of seven members who are residents of the
261 state and who have experience in corporate finance, tourism,
262 convention and resort management, gaming, investigation or law
263 enforcement, business law, or related legal experience. The
264 members of the commission shall serve as the agency head of the
265 Destination Resort Commission. The commission is exempt from the
266 provisions of s. 20.052, Florida Statutes.
267 (2) MEMBERS.—The members shall be appointed by the Governor
268 and confirmed by the Senate in the legislative session following
269 appointment. Each member shall be appointed to a 4-year term.
270 However, for the purpose of providing staggered terms, of the
271 initial appointments, four members shall be appointed to 4-year
272 terms and three members shall be appointed to 2-year terms.
273 Terms expire on June 30. Upon the expiration of the term of a
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274 commissioner, the Governor shall appoint a successor to serve
275 for a 4-year term. A commissioner whose term has expired shall
276 continue to serve on the commission until such time as a
277 replacement is appointed. If a vacancy on the commission occurs
278 before the expiration of the term, it shall be filled for the
279 unexpired portion of the term in the same manner as the original
280 appointment.
281 (a)1. One member of the commission must be a certified
282 public accountant licensed in this state who possesses at least
283 5 years of experience in general accounting. The member must
284 also possess a comprehensive knowledge of the principles and
285 practices of corporate finance or auditing, general finance,
286 gaming, or economics.
287 2. One member of the commission must have experience in the
288 fields of investigation or law enforcement.
289 3. Each district must be represented by at least one member
290 of the commission who must reside in that district.
291 4. When making appointments to the commission, the Governor
292 shall announce the district and classification by experience of
293 the person appointed.
294 (b) A person may not be appointed to or serve as a member
295 of the commission if the person:
296 1. Is an elected state official;
297 2. Is licensed by the commission, or is an officer of, has
298 a financial interest in, or has a direct or indirect contractual
299 relationship with, any applicant for a resort license or resort
300 licensee;
301 3. Is related to any person within the second degree of
302 consanguinity or affinity who is licensed by the commission; or
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303 4. Has, within the 10 years preceding his or her
304 appointment, been under indictment for, convicted of, pled
305 guilty or nolo contendere to, or forfeited bail for a felony or
306 a misdemeanor involving gambling or fraud under the laws of this
307 or any other state or the United States.
308 (c) Members of the commission shall serve full time.
309 (3) CHAIR AND VICE CHAIR.—
310 (a) The chair shall be appointed by the Governor. The vice
311 chair of the commission shall be elected by the members of the
312 commission during the first meeting of the commission on or
313 after July 1 of each year. The chair shall be the administrative
314 head of the commission. The chair shall set the agenda for each
315 meeting. The chair shall approve all notices, vouchers,
316 subpoenas, and reports as required by the Resort Act. The chair
317 shall preserve order and decorum and shall have general control
318 of the commission meetings. The chair shall decide all questions
319 of order. The chair may name any member of the commission to
320 perform the duties of the chair for a meeting if such
321 substitution does not extend beyond that meeting.
322 (b) If for any reason the chair is absent and fails to name
323 a member, the vice chair shall assume the duties of the chair
324 during the chair’s absence. On the death, incapacitation, or
325 resignation of the chair, the vice chair shall perform the
326 duties of the office until the Governor appoints a successor.
327 (c) The administrative responsibilities of the chair are to
328 plan, organize, and control administrative support services for
329 the commission. Administrative functions include, but are not
330 limited to, finance and accounting, revenue accounting,
331 personnel, and office services.
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332 (4) QUORUM.—Four members of the commission constitute a
333 quorum.
334 (5) HEADQUARTERS.—The headquarters of the commission shall
335 be located in Tallahassee.
336 (6) MEETINGS.—The commission must meet at least monthly.
337 Meetings may be called by the chair or by four members of the
338 commission upon 72 hours’ public notice. The initial meeting of
339 the commission must be held by October 1, 2011.
340 (7) AGENCY HEAD.—The commission shall serve as the agency
341 head for purposes of chapter 120, Florida Statutes. The
342 executive director of the commission may serve as the agency
343 head for purposes of final agency action under chapter 120,
344 Florida Statutes, for all areas within the regulatory authority
345 delegated to the executive director’s office.
346 Section 6. Destination Resort Commission; powers and
347 duties.—
348 (1) The commission has jurisdiction over and shall
349 supervise all destination resort limited gaming activity
350 governed by the Resort Act, including the power to:
351 (a) Authorize limited gaming at five destination resorts.
352 (b) Conduct such investigations as necessary to fulfill its
353 responsibilities.
354 (c) Use an invitation to negotiate process for applicants
355 based on minimum requirements established by the Resort Act and
356 rules of the commission.
357 (d) Investigate applicants for a resort license and
358 determine the eligibility of applicants for a resort license and
359 to select from competing applicants the applicant that best
360 serves the interests of the residents of Florida, based on the
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361 potential for economic development presented by the applicant’s
362 proposed investment in infrastructure, such as hotels and other
363 nongaming entertainment facilities, and the applicant’s ability
364 to maximize revenue for the state.
365 (e) Grant a license to the applicant best suited to operate
366 a destination resort that has limited gaming.
367 (f) Establish and collect fees for performing background
368 checks on all applicants for licenses and all persons with whom
369 the commission may contract for the providing of goods or
370 services and for performing, or having performed, tests on
371 equipment and devices to be used in a limited gaming facility.
372 (g) Issue subpoenas for the attendance of witnesses and
373 subpoenas duces tecum for the production of books, records, and
374 other pertinent documents as provided by law, and to administer
375 oaths and affirmations to the witnesses, if, in the judgment of
376 the commission, it is necessary to enforce the Resort Act or
377 commission rules. If a person fails to comply with a subpoena,
378 the commission may petition the circuit court of the county in
379 which the person subpoenaed resides or has his or her principal
380 place of business for an order requiring the subpoenaed person
381 to appear and testify and to produce books, records, and
382 documents as specified in the subpoena. The court may grant
383 legal, equitable, or injunctive relief, which may include, but
384 is not limited to, issuance of a writ of ne exeat or restraint
385 by injunction or appointment of a receiver of any transfer,
386 pledge, assignment, or other disposition of such person’s assets
387 or any concealment, alteration, destruction, or other
388 disposition of subpoenaed books, records, or documents, as the
389 court deems appropriate, until the person subpoenaed has fully
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390 complied with the subpoena and the commission has completed the
391 audit, examination, or investigation. The commission is entitled
392 to the summary procedure provided in s. 51.011, Florida
393 Statutes, and the court shall advance the cause on its calendar.
394 Costs incurred by the commission to obtain an order granting, in
395 whole or in part, such petition for enforcement of a subpoena
396 shall be charged against the subpoenaed person, and failure to
397 comply with such order is a contempt of court.
398 (h) Require or permit a person to file a statement in
399 writing, under oath or otherwise as the commission or its
400 designee requires, as to all the facts and circumstances
401 concerning the matter to be audited, examined, or investigated.
402 (i) Keep accurate and complete records of its proceedings
403 and to certify the records as may be appropriate.
404 (j) Take any other action as may be reasonable or
405 appropriate to enforce the Resort Act and rules adopted by the
406 commission.
407 (k) Apply for injunctive or declaratory relief in a court
408 of competent jurisdiction to enforce the Resort Act and any
409 rules adopted by the commission.
410 (l) Establish field offices, as deemed necessary by the
411 commission.
412 (2) The Department of Law Enforcement and local law
413 enforcement agencies have concurrent jurisdiction to investigate
414 criminal violations of the Resort Act and may investigate any
415 other criminal violation of law occurring at the limited gaming
416 facilities. Such investigations may be conducted in conjunction
417 with the appropriate state attorney.
418 (3)(a) The commission, the Department of Law Enforcement,
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419 and local law enforcement agencies have unrestricted access to
420 the limited gaming facility at all times and shall require of
421 each resort licensee strict compliance with the laws of this
422 state relating to the transaction of such business. The
423 commission, the Department of Law Enforcement, and local law
424 enforcement agencies may:
425 1. Inspect and examine premises where authorized limited
426 gaming devices are offered for play.
427 2. Inspect slot machines, other authorized gaming devices,
428 and related equipment and supplies.
429 (b) In addition, the commission may:
430 1. Collect taxes, assessments, fees, and penalties.
431 2. Deny, revoke, suspend, or place conditions on a licensee
432 who violates any provision of the Resort Act, a rule adopted by
433 the commission, or an order of the commission.
434 (4) The commission must revoke or suspend the license of
435 any person who is no longer qualified or who is found, after
436 receiving a license, to have been unqualified at the time of
437 application for the license.
438 (5) This section does not:
439 (a) Prohibit the Department of Law Enforcement or any law
440 enforcement authority whose jurisdiction includes a resort
441 licensee or a supplier licensee from conducting investigations
442 of criminal activities occurring at the facilities of a resort
443 licensee or supplier licensee;
444 (b) Restrict access to the limited gaming facility by the
445 Department of Law Enforcement or any local law enforcement
446 authority whose jurisdiction includes a resort licensee’s
447 facility; or
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448 (c) Restrict access by the Department of Law Enforcement or
449 a local law enforcement agency to information and records
450 necessary for the investigation of criminal activity which are
451 contained within the facilities of a resort licensee or supplier
452 licensee.
453 Section 7. Rulemaking.—
454 (1) The commission shall adopt all rules necessary to
455 implement, administer, and regulate limited gaming under the
456 Destination Resort Act. The rules must include:
457 (a) The types of limited gaming activities to be conducted
458 and the rules for those games, including any restriction upon
459 the time, place, and structures where limited gaming is
460 authorized.
461 (b) Requirements, procedures, qualifications, and grounds
462 for the issuance, renewal, revocation, suspension, and summary
463 suspension of a resort license, supplier’s license, or
464 occupational license.
465 (c) Requirements for the disclosure of the complete
466 financial interests of licensees and applicants for licenses.
467 (d) Technical requirements and the qualifications that are
468 necessary to receive a license.
469 (e) Procedures to scientifically test and technically
470 evaluate slot machines and other authorized gaming devices for
471 compliance with the Resort Act and the rules adopted by the
472 commission. The commission may contract with an independent
473 testing laboratory to conduct any necessary testing. The
474 independent testing laboratory must have a national reputation
475 for being demonstrably competent and qualified to scientifically
476 test and evaluate slot machines and other authorized gaming
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477 devices. An independent testing laboratory may not be owned or
478 controlled by a licensee. The use of an independent testing
479 laboratory for any purpose related to the conduct of slot
480 machine gaming and other authorized gaming by a resort licensee
481 shall be made from a list of laboratories approved by the
482 commission.
483 (f) Procedures relating to limited gaming revenues,
484 including verifying and accounting for such revenues, auditing,
485 and collecting taxes and fees.
486 (g) Requirements for limited gaming equipment, including
487 the types and specifications of all equipment and devices that
488 may be used in limited gaming facilities.
489 (h) Procedures for regulating, managing, and auditing the
490 operation, financial data, and program information relating to
491 limited gaming which allow the commission and the Department of
492 Law Enforcement to audit the operation, financial data, and
493 program information of a resort licensee, as required by the
494 commission or the Department of Law Enforcement, and provide the
495 commission and the Department of Law Enforcement with the
496 ability to monitor, at any time on a real-time basis, wagering
497 patterns, payouts, tax collection, and compliance with any rules
498 adopted by the commission for the regulation and control of
499 limited gaming. Such continuous and complete access, at any time
500 on a real-time basis, shall include the ability of either the
501 commission or the Department of Law Enforcement to suspend play
502 immediately on particular slot machines or other gaming devices
503 if monitoring of the facilities-based computer system indicates
504 possible tampering or manipulation of those slot machines or
505 gaming devices or the ability to suspend play immediately of the
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506 entire operation if the tampering or manipulation is of the
507 computer system itself. The commission shall notify the
508 Department of Law Enforcement or the Department of Law
509 Enforcement shall notify the commission, as appropriate,
510 whenever there is a suspension of play pursuant this paragraph.
511 The commission and the Department of Law Enforcement shall
512 exchange information that is necessary for, and cooperate in the
513 investigation of, the circumstances requiring suspension of play
514 pursuant to this paragraph.
515 (i) Procedures for requiring each resort licensee at his or
516 her own cost and expense to supply the commission with a bond as
517 required.
518 (j) Procedures for requiring licensees to maintain and to
519 provide to the commission records, data, information, or
520 reports, including financial and income records.
521 (k) Procedures to calculate the payout percentages of slot
522 machines.
523 (l) Minimum standards for security of the facilities,
524 including floor plans, security cameras, and other security
525 equipment.
526 (m) The scope and conditions for investigations and
527 inspections into the conduct of limited gaming.
528 (n) The standards and procedures for the seizure without
529 notice or hearing of gaming equipment, supplies, or books and
530 records for the purpose of examination and inspection.
531 (o) Procedures for requiring resort licensees and supplier
532 licensees to implement and establish drug-testing programs for
533 all employees.
534 (p) Procedures and guidelines for the continuous recording
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535 of all gaming activities at a limited gaming facility. The
536 commission may require a resort licensee to timely provide all
537 or part of the original recordings pursuant to a schedule.
538 (q) The payment of costs incurred by the commission or any
539 other agencies for investigations or background checks or costs
540 associated with testing limited gaming related equipment, which
541 must be paid by an applicant for a license or a licensee.
542 (r) The levying of fines for violations of the Resort Act
543 or any rule adopted by the commission, which fines may not
544 exceed $250,000 per violation arising out of a single
545 transaction.
546 (s) The amount of any application fee or fee to renew an
547 occupational license or a suppliers license.
548 (t) Any other rule necessary to accomplish the purposes of
549 the Resort Act.
550 (2) The commission may at any time adopt emergency rules
551 pursuant to s. 120.54, Florida Statutes. The Legislature finds
552 that such emergency rulemaking power is necessary for the
553 preservation of the rights and welfare of the people in order to
554 provide additional funds to benefit the public. The Legislature
555 further finds that the unique nature of limited gaming
556 operations requires, from time to time, that the commission
557 respond as quickly as is practicable. Therefore, in adopting
558 such emergency rules, the commission need not make the findings
559 required by s. 120.54(4)(a), Florida Statutes. Emergency rules
560 adopted under this section are exempt from s. 120.54(4)(c),
561 Florida Statutes. However, the emergency rules may not remain in
562 effect for more than 180 days except that the commission may
563 renew the emergency rules during the pendency of procedures to
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564 adopt permanent rules addressing the subject of the emergency
565 rules.
566 Section 8. Law enforcement officers.—
567 (1) The commission may employ sworn law enforcement
568 officers to enforce any criminal law, conduct any criminal
569 investigation, or enforce any statute within the jurisdiction of
570 the commission.
571 (2) Each law enforcement officer must meet the
572 qualifications for law enforcement officers under s. 943.13,
573 Florida Statutes, and must be certified as a law enforcement
574 officer by the Department of Law Enforcement. Upon
575 certification, each law enforcement officer is subject to and
576 has the authority provided to law enforcement officers generally
577 under chapter 901, Florida Statutes, and has statewide
578 jurisdiction.
579 (3) Each officer has arrest authority as provided for state
580 law enforcement officers under s. 901.15, Florida Statutes, and
581 full law enforcement powers granted to other officers of this
582 state, including the authority to make arrests, carry firearms,
583 serve court process, and seize contraband and proceeds from
584 illegal activities.
585 (4) Each law enforcement officer of the commission, upon
586 certification under s. 943.1395, Florida Statutes, has the same
587 right and authority to carry arms as do the sheriffs of this
588 state.
589 Section 9. Executive director.—The commission shall appoint
590 or remove the executive director of the commission by a majority
591 vote. An interim executive director shall be appointed within 10
592 days after the initial meeting of the commission.
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593 (1) The executive director:
594 (a) Shall devote full time to the duties of the office;
595 (b) May not hold any other office or employment;
596 (c) Shall perform all duties assigned by the commission;
597 and
598 (d) May hire assistants and employees as necessary to
599 conduct the business of the commission, and consultants
600 necessary for the efficient operation of destination resorts.
601 (2)(a) The executive director may not employ a person who,
602 during the 3 years immediately preceding employment, held a
603 direct or indirect interest in, or was employed by:
604 1. A resort licensee or supplier licensee;
605 2. An applicant for a resort license or an applicant for a
606 similar license in another jurisdiction;
607 3. An entity licensed to operate a gaming facility in
608 another state;
609 4. A pari-mutuel gaming facility licensed to operate in
610 this state; or
611 5. A tribal gaming facility within this state.
612 (b) Notwithstanding paragraph (a), a person may be employed
613 by the commission if the commission finds that the person’s
614 former interest in any licensee will not interfere with the
615 objective discharge of the person’s employment obligations.
616 However, a person may not be employed by the commission if:
617 1. The person’s interest in an applicant, licensee, or
618 tribal facility constituted a controlling interest; or
619 2. The person, or the person’s spouse, parent, child,
620 child’s spouse, or sibling, is a member of the commission, or a
621 director of, or person financially interested in, an applicant
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622 or a licensee.
623 Section 10. Code of ethics.—
624 (1) The commission shall adopt a code of ethics by rule for
625 its members, employees, and agents.
626 (2) A member of the commission or the executive director
627 may not hold a direct or indirect interest in, be employed by,
628 or enter into a contract for service with an applicant or person
629 licensed by the commission for a period of 5 years after the
630 date of termination of the person’s membership on or employment
631 with the commission.
632 (3) An employee of the commission may not acquire a direct
633 or indirect interest in, be employed by, or enter into a
634 contract for services with an applicant or person licensed by
635 the commission for a period of 3 years after the date of
636 termination of the person’s employment with the commission.
637 (4) A commission member or a person employed by the
638 commission may not represent a person or party other than the
639 state before or against the commission for a period of 3 years
640 after the date of termination of the member’s term of office or
641 the employee’s period of employment with the commission.
642 (5) A business entity in which a former commission member,
643 employee, or agent has an interest, or any partner, officer, or
644 employee of that business entity, may not appear before or
645 represent another person before the commission if the former
646 commission member, employee, or agent would be prohibited from
647 doing so. As used in this subsection, the term “business entity”
648 means a corporation, limited liability company, partnership,
649 limited liability partnership association, trust, or other form
650 of legal entity.
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651 (6) A member, employee, or agent of the commission may not
652 engage in political activity or politically related activity
653 during the duration of the person’s appointment or employment.
654 As used in this paragraph, the terms “political activity” or
655 “politically related activity” include:
656 (a) Using the person’s official authority or influence for
657 the purpose of interfering with or affecting the result of an
658 election;
659 (b) Knowingly soliciting, accepting, or receiving political
660 contributions from any person;
661 (c) Running for nomination or as a candidate for election
662 to a partisan political office; or
663 (d) Knowingly soliciting or discouraging the participation
664 in any political activity of any person who is:
665 1. Applying for any compensation, grant, contract, ruling,
666 license, permit, or certificate pending before the commission;
667 or
668 2. The subject of or a participant in an ongoing audit,
669 investigation, or enforcement action being carried out by the
670 commission.
671 (7) A former member, employee, or agent of the commission
672 may appear before the commission as a witness testifying as to
673 factual matters or actions handled by the former member,
674 employee, or agent during his or her tenure with the commission.
675 However, the former member, employee, or agent of the commission
676 may not receive compensation for the appearance other than a
677 standard witness fee and reimbursement for travel expenses as
678 established by statute or rules governing administrative
679 proceedings before the Division of Administrative Hearings.
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680 (8)(a) The executive director must approve outside
681 employment for an employee or agent of the commission.
682 (b) An employee or agent of the commission granted
683 permission for outside employment may not conduct any business
684 or perform any activities, including solicitation, related to
685 outside employment on premises used by the commission or during
686 the employee’s working hours for the commission.
687 (c) As used in this subsection, the term “outside
688 employment” includes, but is not limited to:
689 1. Operating a proprietorship;
690 2. Participating in a partnership or group business
691 enterprise; or
692 3. Performing as a director or corporate officer of any
693 for-profit corporation or banking or credit institution.
694 (9) A member, employee, or agent of the commission may not
695 participate in or wager on any game conducted by any resort
696 licensee or applicant or any affiliate of a licensee or
697 applicant regulated by the commission in this state or in any
698 other jurisdiction, except as required as part of the person’s
699 surveillance, security, or other official duties.
700 Section 11. Disclosures by commissioners, employees, and
701 agents.—
702 (1) COMMISSIONERS.—
703 (a) Each member of the commission shall file a financial
704 disclosure statement pursuant to s. 112.3145, Florida Statutes.
705 (b) Each member must disclose information required by rules
706 of the commission to ensure the integrity of the commission and
707 its work.
708 (c) By January 1 of each year, each member must file a
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709 statement with the commission:
710 1. Affirming that the member, and the member’s spouse,
711 parent, child, or child’s spouse, is not a member of the board
712 of directors of, financially interested in, or employed by an
713 applicant or resort licensee.
714 2. Affirming that the member is in compliance with the
715 Resort Act and the rules of the commission.
716 3. Disclosing any legal or beneficial interest in real
717 property that is or may be directly or indirectly involved with
718 activities or persons regulated by the commission.
719 (d) Each member must disclose involvement with any gaming
720 interest in the 5 years preceding appointment as a member.
721 (2) EMPLOYEES AND AGENTS.—
722 (a) The executive director and each managerial employee and
723 agent, as determined by the commission, shall file a financial
724 disclosure statement pursuant to s. 112.3145, Florida Statutes.
725 All employees and agents must comply with the provisions of
726 chapter 112, Florida Statutes.
727 (b) The executive director and each managerial employee and
728 agent identified by rule of the commission must disclose
729 information required by rules of the commission to ensure the
730 integrity of the commission and its work.
731 (c) By January 31 of each year, each employee and agent of
732 the commission must file a statement with the commission:
733 1. Affirming that the employee, and the employee’s spouse,
734 parent, child, or child’s spouse, is not financially interested
735 in or employed by an applicant or licensee.
736 2. Affirming that the person does not have any financial
737 interest prohibited by laws or rules administered by the
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738 commission.
739 3. Disclosing any legal or beneficial interest in real
740 property that is or may be directly or indirectly involved with
741 activities or persons regulated by the commission.
742 (d) Each employee or agent of the commission must disclose
743 involvement with any gaming interest during the 5 years before
744 employment.
745 (3) CIRCUMSTANCES REQUIRING IMMEDIATE DISCLOSURE.—
746 (a) A member, employee, or agent of the commission who
747 becomes aware that the member, employee, or agent of the
748 commission or his or her spouse, parent, or child is a member of
749 the board of directors of, financially interested in, or
750 employed by an applicant or licensee must immediately provide
751 detailed written notice to the chair.
752 (b) A member, employee, or agent of the commission must
753 immediately provide detailed written notice of the circumstances
754 to the chair if the member, employee, or agent is indicted,
755 charged with, convicted of, pleads guilty or nolo contendere to,
756 or forfeits bail for:
757 1. A misdemeanor involving gambling, dishonesty, theft, or
758 fraud;
759 2. A violation of any law in any state, or a law of the
760 United States or any other jurisdiction, involving gambling,
761 dishonesty, theft, or fraud which substantially corresponds to a
762 misdemeanor in this state; or
763 3. A felony under the laws of this or any other state, or
764 the laws of the United States, or any other jurisdiction.
765 (c) A member, employee, or agent of the commission who is
766 negotiating for an interest in a licensee or an applicant, or is
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767 affiliated with such a person, must immediately provide written
768 notice of the details of the interest to the chair. The member,
769 employee, or agent of the commission may not act on behalf of
770 the commission with respect to that person.
771 (d) A member, employee, or agent of the commission may not
772 enter into negotiations for employment with any person or
773 affiliate of any person who is an applicant, licensee, or an
774 affiliate. If a member, employee, or agent of the commission
775 enters into negotiations for employment in violation of this
776 paragraph or receives an invitation, written or oral, to
777 initiate a discussion concerning employment with any person who
778 is a licensee, applicant, or an affiliate, he or she must
779 immediately provide written notice of the details of any such
780 negotiations or discussions to the chair. The member, employee,
781 or agent of the commission may not take any action on behalf of
782 the commission with respect to that licensee or applicant.
783 (e) A licensee or applicant may not knowingly initiate a
784 negotiation for, or discussion of, employment with a member,
785 employee, or agent of the commission. A licensee or applicant
786 who initiates a negotiation or discussion about employment shall
787 immediately provide written notice of the details of the
788 negotiation or discussion to the chair as soon as that person
789 becomes aware that the negotiation or discussion has been
790 initiated with a member, employee, or agent of the commission.
791 (f) A member, employee, or agent of the commission, or a
792 parent, spouse, sibling, or child of a member, employee, or
793 agent of the commission, may not accept any gift, gratuity,
794 compensation, travel, lodging, or anything of value, directly or
795 indirectly, from a licensee, applicant, or affiliate or
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796 representative of a person regulated by the commission unless
797 the acceptance is permitted under the rules of the commission
798 and conforms with chapter 112, Florida Statutes. A member,
799 employee, or agent of the commission who is offered or receives
800 any gift, gratuity, compensation, travel, lodging, or anything
801 of value, directly or indirectly, from any licensee or an
802 applicant or affiliate or representative of a person regulated
803 by the commission must immediately provide written notice of the
804 details to the chair.
805 (g) A licensee, applicant, or affiliate or representative
806 of an applicant or licensee may not, directly or indirectly,
807 knowingly give or offer to give any gift, gratuity,
808 compensation, travel, lodging, or anything of value to any
809 member, employee, or agent, or to a parent, spouse, sibling, or
810 child of a member, employee, or agent, which the member,
811 employee, or agent is prohibited from accepting under paragraph
812 (f).
813 (h) A member, employee, or agent of the commission may not
814 engage in any conduct that constitutes a conflict of interest,
815 and must immediately advise the chair in writing of the details
816 of any incident or circumstances that would suggest the
817 existence of a conflict of interest with respect to the
818 performance of commission-related work or duty of the member,
819 employee, or agent of the commission.
820 (i) A member, employee, or agent of the commission who is
821 approached and offered a bribe must immediately provide a
822 written account of the details of the incident to the chair and
823 to a law enforcement agency having jurisdiction over the matter.
824 Section 12. Ex parte communications.—
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825 (1) A licensee, applicant, or any affiliate or
826 representative of an applicant or licensee may not engage
827 directly or indirectly in ex parte communications concerning a
828 pending application, license, or enforcement action with a
829 member of the commission or concerning a matter that likely will
830 be pending before the commission. A member of the commission may
831 not engage directly or indirectly in any ex parte communications
832 concerning a pending application, license, or enforcement action
833 with members of the commission, or with a licensee, applicant,
834 or any affiliate or representative of an applicant or licensee,
835 or concerning a matter that likely will be pending before the
836 commission.
837 (2) Any commission member, licensee, applicant, or
838 affiliate or representative of a commission member, licensee, or
839 applicant who receives any ex parte communication in violation
840 of subsection (1), or who is aware of an attempted communication
841 in violation of subsection (1), must immediately report details
842 of the communication or attempted communication in writing to
843 the chair.
844 (3) If a commissioner knowingly receives an ex parte
845 communication relative to a proceeding to which he or she is
846 assigned, he or she must place on the record copies of all
847 written communications received, copies of all written responses
848 to the communications, and a memorandum stating the substance of
849 all oral communications received and all oral responses made,
850 and shall give written notice to all parties to the
851 communication that such matters have been placed on the record.
852 Any party who desires to respond to an ex parte communication
853 may do so. The response must be received by the commission
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854 within 10 days after receiving notice that the ex parte
855 communication has been placed on the record. The commissioner
856 may, if he or she deems it necessary to eliminate the effect of
857 an ex parte communication received by him or her, withdraw from
858 the proceeding potentially impacted by the ex parte
859 communication. After a commissioner withdraws from the
860 proceeding, the chair shall substitute another commissioner for
861 the proceeding if the proceeding was not assigned to the full
862 commission.
863 (4) Any individual who makes an ex parte communication must
864 submit to the commission a written statement describing the
865 nature of such communication, including the name of the person
866 making the communication, the name of the commissioner or
867 commissioners receiving the communication, copies of all written
868 communications made, all written responses to such
869 communications, and a memorandum stating the substance of all
870 oral communications received and all oral responses made. The
871 commission shall place on the record of a proceeding all such
872 communications.
873 (5) A member of the commission who knowingly fails to place
874 on the record any ex parte communications, in violation of this
875 section, within 15 days after the date of the communication is
876 subject to removal and may be assessed a civil penalty not to
877 exceed $5,000.
878 (6) The Commission on Ethics shall receive and investigate
879 sworn complaints of violations of this section pursuant to ss.
880 112.322-112.3241, Florida Statutes.
881 (7) If the Commission on Ethics finds that a member of the
882 commission has violated this section, it shall provide the
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883 Governor with a report of its findings and recommendations. The
884 Governor may enforce the findings and recommendations of the
885 Commission on Ethics pursuant to part III of chapter 112,
886 Florida Statutes.
887 (8) If a commissioner fails or refuses to pay the
888 Commission on Ethics any civil penalties assessed pursuant to
889 this section, the Commission on Ethics may bring an action in
890 any circuit court to enforce such penalty.
891 (9) If, during the course of an investigation by the
892 Commission on Ethics into an alleged violation of this section,
893 allegations are made as to the identity of the person who
894 participated in the ex parte communication, that person must be
895 given notice and an opportunity to participate in the
896 investigation and relevant proceedings to present a defense. If
897 the Commission on Ethics determines that the person participated
898 in the ex parte communication, the person may not appear before
899 the commission or otherwise represent anyone before the
900 commission for 2 years.
901 Section 13. Penalties for misconduct by a commissioner,
902 employee, or agent.—
903 (1) A violation of the Resort Act by a member of the
904 commission may result in disqualification or constitute cause
905 for removal by the Governor or other disciplinary action as
906 determined by the commission.
907 (2) A violation of the Resort Act by an employee or agent
908 of the commission does not require termination of employment or
909 other disciplinary action if:
910 (a) The commission determines that the conduct involved
911 does not violate the purposes the Resort Act; or
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912 (b) There was no intentional action on the part of the
913 employee or agent, contingent on divestment of the financial
914 interest within 30 days after the interest was acquired.
915 (3) Notwithstanding subsection (2), an employee or agent of
916 the commission who violates the Resort Act shall be terminated
917 if a financial interest in a licensee, applicant, or affiliate,
918 or representative of a licensee or applicant, is acquired by:
919 (a) An employee of the commission; or
920 (b) The employee’s or agent’s spouse, parent, or child.
921 (4) A violation the Resort Act does not create a civil
922 cause of action.
923 Section 14. Authorization of limited gaming at destination
924 resorts.—Notwithstanding any other provisions of law, the
925 commission may not award a resort license authorizing limited
926 gaming unless a majority of the electors in a countywide
927 referendum have approved the conduct of limited gaming in the
928 respective county. If limited gaming is authorized through the
929 award of a resort license, the resort licensee may possess slot
930 machines and other authorized gaming devices and conduct limited
931 gaming at the licensed location. Notwithstanding any other
932 provision of law, a person may lawfully participate in
933 authorized games at a facility licensed to possess authorized
934 limited gaming devices and conduct limited gaming or to
935 participate in limited gaming as described in the Resort Act.
936 Section 15. Legislative authority; administration of act.—
937 The regulation of the conduct of limited gaming activity at a
938 resort licensee is preempted to the state and a county,
939 municipality, or other political subdivision of the state may
940 not enact any ordinance relating to limited gaming. Only the
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941 commission and other authorized state agencies shall administer
942 the Resort Act and regulate limited gaming, including limited
943 gaming at resort licensees and the assessment of fees or taxes
944 relating to the conduct of limited gaming.
945 Section 16. Process for awarding destination resort
946 licenses.—
947 (1) The commission shall by rule use an invitation to
948 negotiate process for determining the award of a resort license.
949 The application, review, and issuance procedures for awarding a
950 license shall be by a process in which applicants rely on forms
951 provided by the commission in response to an invitation to
952 negotiate issued by the commission.
953 (2) The commission may, at its discretion, stagger the
954 issuance of invitations to negotiate, the period for review of
955 replies, and the awarding of one or more licenses to conduct
956 limited gaming, provided that the number of licenses does not
957 exceed five destination resort licensees. Invitations to
958 negotiate shall require a response within no less than 6 months
959 of the date after the issuance of the invitation.
960 (3) The commission may specify in its invitation to
961 negotiate the district in which the facility would be located.
962 When determining whether to authorize the destination resort
963 located within a specific county or counties, the commission
964 shall, if practicable, hold a public hearing in such county or
965 counties.
966 (4) The commission shall review all complete replies
967 received pursuant to an invitation to negotiate. The commission
968 may select one or more replies with which to commence
969 negotiations after determining which replies are in the best
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970 interest of the state based on the selection criteria. The
971 commission shall award or deny a destination resort license
972 within 12 months after the deadline for the submission of a
973 reply.
974 Section 17. Criteria for the award of a destination resort
975 license.-
976 (1) The commission may award a resort license to the
977 applicant of an invitation to negotiate which best serves the
978 interests of the residents of Florida. The reply to an
979 invitation to negotiate for a resort license must include an
980 application that demonstrates the applicant’s ability to meet
981 the following minimum criteria:
982 (a) Only one destination resort license may be awarded per
983 district.
984 (b) The applicant must demonstrate a capacity to increase
985 tourism, generate jobs, provide revenue to the local economy,
986 and provide revenue to the General Revenue Fund.
987 (c) The resort must provide a minimum of 1,000 hotel rooms.
988 (d) The resort must contain convention and meeting floor
989 space of at least 500,000 square feet.
990 (e) The area in which the conduct of limited gaming is
991 authorized may constitute no more than 10 percent of the resort
992 development’s total square footage. The resort development’s
993 total square footage is the aggregate of the total square
994 footage of the limited gaming facility, the hotel or hotels,
995 convention space, retail facilities, nongaming entertainment
996 facilities, service centers, and office space or administrative
997 areas.
998 (f) The applicant must demonstrate a history of, or a bona
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999 fide plan for, community involvement or investment in the
1000 community where the resort having a limited gaming facility will
1001 be located.
1002 (g) The applicant must demonstrate the financial ability to
1003 purchase and maintain an adequate surety bond.
1004 (h) The applicant must demonstrate that it has adequate
1005 capitalization to develop, construct, maintain, and operate the
1006 proposed resort and convention center having a limited gaming
1007 facility in accordance with the requirements of the Resort Act
1008 and rules adopted by the commission and to responsibly meet its
1009 secured and unsecured debt obligations in accordance with its
1010 financial and other contractual agreements.
1011 (i) The applicant shall demonstrate the ability to
1012 implement a program to train and employ residents of this state
1013 for jobs that will be available at the destination resort,
1014 including its ability to implement a program for the training of
1015 low-income persons.
1016 (j) The commission may, at its discretion, assess the
1017 quality of the proposed development’s aesthetic appearance in
1018 the context of its potential to provide substantial economic
1019 benefits to the community and the people of Florida, including,
1020 but not limited to its potential to provide substantial
1021 employment opportunities.
1022 (k) The applicant shall demonstrate how it will comply with
1023 state and federal affirmative action guidelines.
1024 (l) The applicant shall demonstrate the ability to generate
1025 substantial gross receipts.
1026 (2) A resort license may be issued only to persons of good
1027 moral character who are at least 21 years of age. A resort
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1028 license may issued to a corporation only if its officers are of
1029 good moral character and at least 21 years of age.
1030 (3) A resort license may not be issued to an applicant if
1031 the applicant, qualifier, or institutional investor:
1032 (a) Has, within the last 10 years, filed for protection
1033 under the Federal Bankruptcy Code or had an involuntary
1034 bankruptcy petition filed against them.
1035 (b) Has, within the last 5 years, been adjudicated by a
1036 court or tribunal for failure to pay income, sales, or gross
1037 receipts tax due and payable under any federal, state, or local
1038 law, after exhaustion of all appeals or administrative remedies.
1039 (c) Has been convicted of a felony under the laws of this
1040 or any other state, or the United States.
1041 (d) Has been convicted of any violation under chapter 817,
1042 Florida Statutes, or under a substantially similar law of
1043 another jurisdiction.
1044 (e) Knowingly submitted false information in the
1045 application for the license.
1046 (f) Is a member or employee of the commission.
1047 (g) Was licensed to own or operate gaming or pari-mutuel
1048 facilities in this state or another jurisdiction and that
1049 license was revoked.
1050 (h) Fails to meet any other criteria for licensure set
1051 forth in the Resort Act.
1052
1053 The term “conviction” includes an adjudication of guilt on a
1054 plea of guilty or nolo contendere or the forfeiture of a bond
1055 when charged with a crime.
1056 Section 18. Application for destination resort license.—
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1057 (1) APPLICATION.—A reply submitted in response to an
1058 invitation to negotiate must include a sworn application in the
1059 format prescribed by the commission. The application must
1060 include the following information:
1061 (a)1. The name, business address, telephone number, social
1062 security number, and, where applicable, the federal tax
1063 identification number of the applicant and each qualifier; and
1064 2. Information, documentation, and assurances concerning
1065 financial background and resources as may be required to
1066 establish the financial stability, integrity, and responsibility
1067 of the applicant. This includes business and personal income and
1068 disbursement schedules, tax returns and other reports filed with
1069 governmental agencies, and business and personal accounting and
1070 check records and ledgers. In addition, each applicant must
1071 provide written authorization for the examination of all bank
1072 accounts and records as may be deemed necessary by the
1073 commission.
1074 (b) The identity and, if applicable, the state of
1075 incorporation or registration of any business in which the
1076 applicant or a qualifier has an equity interest of more than 5
1077 percent. If the applicant or qualifier is a corporation,
1078 partnership, or other business entity, the applicant or
1079 qualifier must identify any other corporation, partnership, or
1080 other business entity in which it has an equity interest of more
1081 5 percent, including, if applicable, the state of incorporation
1082 or registration.
1083 (c) A statement as to whether the applicant or a qualifier
1084 has developed and operated a gaming facility within a
1085 jurisdiction in the United States, including a description of
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1086 the gaming facility, the gaming facility’s gross revenue, and
1087 the amount of revenue the gaming facility has generated for
1088 state and local governments within that jurisdiction.
1089 (d) A statement as to whether the applicant or a qualifier
1090 has been indicted, convicted of, pled guilty or nolo contendere
1091 to, or forfeited bail for any felony or for a misdemeanor
1092 involving gambling, theft, or fraud. The statement must include
1093 the date, the name and location of the court, the arresting
1094 agency, the prosecuting agency, the case caption, the docket
1095 number, the nature of the offense, the disposition of the case,
1096 and, if applicable, the location and length of incarceration.
1097 (e) A statement as to whether the applicant or a qualifier
1098 has ever been granted any license or certificate in any
1099 jurisdiction which has been restricted, suspended, revoked, not
1100 renewed, or otherwise subjected to discipline. The statement
1101 must describe the facts and circumstances concerning that
1102 restriction, suspension, revocation, nonrenewal, or discipline,
1103 including the licensing authority, the date each action was
1104 taken, and an explanation of the circumstances for each
1105 disciplinary action.
1106 (f) A statement as to whether the applicant or qualifier
1107 has, as a principal or a controlling shareholder, within the
1108 last 10 years, filed for protection under the Federal Bankruptcy
1109 Code or had an involuntary bankruptcy petition filed against it.
1110 (g) A statement as to whether the applicant or qualifier
1111 has, within the last 5 years, been adjudicated by a court or
1112 tribunal for failure to pay any income, sales, or gross receipts
1113 tax due and payable under federal, state, or local law, after
1114 exhaustion of all appeals or administrative remedies. This
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1115 statement must identify the amount and type of the tax and the
1116 time periods involved and must describe the resolution of the
1117 nonpayment.
1118 (h) A list of the names and titles of any public officials
1119 or officers of any unit of state government or of the local
1120 government or governments in the county or municipality in which
1121 the proposed resort is to be located, and the spouses, parents,
1122 and children of those public officials or officers, who,
1123 directly or indirectly, own any financial interest in, have any
1124 beneficial interest in, are the creditors of, hold any debt
1125 instrument issued by the applicant or a qualifier, or hold or
1126 have an interest in any contractual or service relationship with
1127 the applicant or qualifier. As used in this paragraph, the terms
1128 “public official” and “officer” do not include a person who
1129 would be listed solely because the person is a member of the
1130 Florida National Guard.
1131 (i) The name and business telephone number of any attorney,
1132 lobbyist, or other person who is representing an applicant
1133 before the commission during the application process.
1134 (j) A description of the applicant’s history of and
1135 proposed plan for community involvement or investment in the
1136 community where the resort having a limited gaming facility
1137 would be located.
1138 (k) A description of the applicant’s proposed resort,
1139 including a description of the economic benefit to the community
1140 in which the facility would be located, the anticipated number
1141 of employees, a statement regarding how the applicant would
1142 comply with federal and state affirmative action guidelines, a
1143 projection of admissions or attendance at the limited gaming
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1144 facility, a projection of gross receipts, and scientific market
1145 research pertaining to the proposed facility, if any.
1146 (l) Proof of a countywide referendum authorizing limited
1147 gaming at a resort in the county. The referendum must be
1148 approved by the electors of the county before the application
1149 deadline established by the commission.
1150 (m) A schedule or timeframe for completing the resort.
1151 (n) A plan for training residents of this state for jobs at
1152 the resort. The job-training plan must provide training to
1153 enable low-income persons to qualify for jobs at the resort.
1154 (o) The identity of each person, association, trust, or
1155 corporation or partnership having a direct or indirect equity
1156 interest in the applicant of greater than 5 percent. If
1157 disclosure of a trust is required under this paragraph, the
1158 names and addresses of the beneficiaries of the trust must also
1159 be disclosed. If the identity of a corporation must be
1160 disclosed, the names and addresses of all stockholders and
1161 directors must also be disclosed. If the identity of a
1162 partnership must be disclosed, the names and addresses of all
1163 partners, both general and limited, must also be disclosed.
1164 (p) A destination resort and limited gaming facility
1165 development plan.
1166 (q) The fingerprints of the all officers or directors of
1167 the applicant and qualifiers, and any persons exercising
1168 operational or managerial control of the applicant, as
1169 determined by rule of the commission, for a criminal history
1170 record check.
1171 (2) DISCRETION TO REQUIRE INFORMATION.—Notwithstanding any
1172 other provision of law, the commission is the sole authority for
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1173 determining the information or documentation that must be
1174 included in an application for a resort license or in an
1175 application to renew a resort license. Such documentation and
1176 information may relate to: demographics, education, work
1177 history, personal background, criminal history, finances,
1178 business information, complaints, inspections, investigations,
1179 discipline, bonding, photographs, performance periods,
1180 reciprocity, local government approvals, supporting
1181 documentation, periodic reporting requirements, and fingerprint
1182 requirements.
1183 (3) DUTY TO SUPPLEMENT APPLICATION.—The application shall
1184 be supplemented as needed to reflect any material change in any
1185 circumstance or condition stated in the application which takes
1186 place between the initial filing of the application and the
1187 final grant or denial of the license. Any submission required to
1188 be in writing may otherwise be required by the commission to be
1189 made by electronic means.
1190 (4) CRIMINAL HISTORY CHECKS.—The commission may contract
1191 with private vendors, or enter into interagency agreements, to
1192 collect electronic fingerprints where fingerprints are required
1193 for licensure or where criminal history record checks are
1194 required.
1195 (5) APPLICATION FEES.—
1196 (a) The application for a resort license must be submitted
1197 along with a nonrefundable application fee of $1 million to be
1198 used by the commission to defray costs associated with the
1199 review and investigation of the application and to conduct a
1200 background investigation of the applicant and each qualifier. If
1201 the cost of the review and investigation exceeds $1 million, the
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1202 applicant must pay the additional amount to the commission
1203 within 30 days after the receipt of a request for an additional
1204 payment.
1205 (b) The application for a destination resort license must
1206 be submitted with a one-time licensing fee of $50 million. If
1207 the commission denies the application, the commission must
1208 refund the licensing fee within 30 days after the denial of the
1209 application. If the applicant withdraws the application after
1210 the application deadline established by the commission, the
1211 commission must refund 80 percent of the licensing fee within 30
1212 days after the application is withdrawn.
1213 Section 19. Incomplete applications.—
1214 (1) An incomplete application for a resort license is
1215 grounds for the denial of the application.
1216 (2)(a) If the commission determines that an application for
1217 a resort license is incomplete, the executive director shall
1218 immediately provide written notice to the applicant of the
1219 incomplete items. The applicant may then request a confidential
1220 informal conference with the executive director or his designee
1221 to discuss the application.
1222 (b) The executive director shall provide the applicant an
1223 extension of 30 days to complete the application following the
1224 date of the informal conference. If the executive director finds
1225 that the application has not been completed within the
1226 extension, the applicant may appeal the finding to the
1227 commission. During an extension or the pendency of an appeal to
1228 the commission, the award of resort licenses in the applicable
1229 district is stayed.
1230 Section 20. Institutional investors as qualifiers.—
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1231 (1) An application for a resort license that has an
1232 institutional investor as a qualifier need not contain
1233 information relating to the institutional investor other than
1234 the identity of the investor and information relating to
1235 qualifications under the Resort Act if the institutional
1236 investor:
1237 (a) Holds less than 5 percent of the equity securities or 5
1238 percent of the debt securities of an applicant or affiliate of
1239 the applicant;
1240 (b) Is a publicly traded corporation; and
1241 (c) Files a certified statement that the institutional
1242 investor does not intend to influence or affect the affairs of
1243 the applicant or an affiliate of the applicant and further
1244 states that its holdings of securities of the applicant or
1245 affiliate were purchased for investment purposes only.
1246
1247 The commission may limit the application requirements as
1248 provided in this subsection for an institutional investor that
1249 is a qualifier and that holds 5 percent or more of the equity or
1250 debt securities of an applicant or affiliate of the applicant
1251 upon a showing of good cause and if the conditions specified in
1252 paragraphs (b) and (c) are satisfied.
1253 (2) An institutional investor that is exempt from the full
1254 application requirements under this section and that
1255 subsequently intends to influence or affect the affairs of the
1256 issuer must first notify the commission of its intent and file
1257 an application containing all of the information that would have
1258 been required of the institutional investor in the application
1259 for a resort license. The commission may deny the application if
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1260 it determines that granting the application will impair the
1261 financial stability of the licensee or impair the ability of the
1262 licensee to comply with its development plans or other plans
1263 submitted to the commission by the applicant or licensee.
1264 (3) An applicant for a license or a resort licensee or
1265 affiliate shall immediately notify the commission of any
1266 information concerning an institutional investor holding its
1267 equity or debt securities which may disqualify an institutional
1268 investor from having a direct or indirect interest in the
1269 applicant or licensee, and the commission may require the
1270 institutional investor to file all information that would have
1271 been required of the institutional investor in the application
1272 for a license.
1273 (4) If the commission finds that an institutional investor
1274 that is a qualifier fails to comply with the requirements of
1275 subsection (1) or, if at any time the commission finds that by
1276 reason of the extent or nature of its holdings an institutional
1277 investor is in a position to exercise a substantial impact upon
1278 the controlling interests of a licensee, the commission may
1279 require the institutional investor to file an application
1280 containing all of information that would have been required of
1281 the institutional investor in the application for a license.
1282 (5) Notwithstanding paragraph (1)(c), an institutional
1283 investor may vote on all matters that are put to the vote of the
1284 outstanding security holders of the applicant or licensee.
1285 Section 21. Lenders and underwriters; exemption as
1286 qualifiers.—A bank, lending institution, or any underwriter in
1287 connection with any bank or lending institution that, in the
1288 ordinary course of business, makes a loan to, or holds a
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1289 security interest in, a licensee or applicant, a supplier
1290 licensee or applicant or its subsidiary, or direct or indirect
1291 parent company of any of the foregoing is not a qualifier and is
1292 not required to be licensed.
1293 Section 22. Conditions for a resort license.—As a condition
1294 to licensure and to maintain continuing authority, a resort
1295 licensee must:
1296 (1) Comply with the Resort Act and the rules of the
1297 commission.
1298 (2) Allow the commission and the Department of Law
1299 Enforcement unrestricted access to and right of inspection of
1300 facilities of a licensee in which any activity relative to the
1301 conduct of gaming is conducted.
1302 (3) Complete the resort in accordance with the plans and
1303 timeframe proposed to the commission in its application, unless
1304 a waiver is granted by the commission.
1305 (4) Ensure that the facilities-based computer system that
1306 the licensee will use for operational and accounting functions
1307 of the facility is specifically structured to facilitate
1308 regulatory oversight. The facilities-based computer system shall
1309 be designed to provide the commission and the Department of Law
1310 Enforcement with the ability to monitor, at any time on a real-
1311 time basis, the wagering patterns, payouts, tax collection, and
1312 such other operations as necessary to determine whether the
1313 facility is in compliance with statutory provisions and rules
1314 adopted by the commission for the regulation and control of
1315 gaming. The commission and the Department of Law Enforcement
1316 shall have complete and continuous access to this system. Such
1317 access shall include the ability of either the commission or the
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1318 Department of Law Enforcement to suspend play immediately on
1319 particular slot machines or gaming devices if monitoring of the
1320 system indicates possible tampering or manipulation of those
1321 slot machines or gaming devices or the ability to suspend play
1322 immediately of the entire operation if the tampering or
1323 manipulation is of the computer system itself. The computer
1324 system shall be reviewed and approved by the commission to
1325 ensure necessary access, security, and functionality. The
1326 commission may adopt rules to provide for the approval process.
1327 (5) Ensure that each game, slot machine, or other gaming
1328 device is protected from manipulation or tampering that may
1329 affect the random probabilities of winning plays. The commission
1330 or the Department of Law Enforcement may suspend play upon
1331 reasonable suspicion of any manipulation or tampering. If play
1332 has been suspended on any game, slot machine, or other gaming
1333 device, the commission or the Department of Law Enforcement may
1334 conduct an examination to determine whether the game, machine,
1335 or other gaming device has been tampered with or manipulated and
1336 whether the game, machine, or other gaming device should be
1337 returned to operation.
1338 (6) Submit a security plan, including the facilities’ floor
1339 plans, the locations of security cameras, and a listing of all
1340 security equipment that is capable of observing and
1341 electronically recording activities being conducted in the
1342 facilities of the licensee. The security plan must meet the
1343 minimum security requirements as determined by the commission
1344 and be implemented before the operation of gaming. The
1345 licensee’s facilities must adhere to the security plan at all
1346 times. Any changes to the security plan must be submitted by the
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1347 licensee to the commission prior to implementation. The
1348 commission shall furnish copies of the security plan and changes
1349 in the plan to the Department of Law Enforcement.
1350 (7) Create and file with the commission a written policy
1351 for:
1352 (a) Creating opportunities to purchase from vendors in this
1353 state, including minority vendors.
1354 (b) Creating opportunities for the employment of residents
1355 of this state, including minority residents.
1356 (c) Ensuring opportunities for obtaining construction
1357 services from minority contractors.
1358 (d) Ensuring that opportunities for employment are offered
1359 on an equal, nondiscriminatory basis.
1360 (e) Training employees on responsible gaming and working
1361 with a compulsive or addictive gambling prevention program.
1362 (f) Implementing a drug-testing program that includes, but
1363 is not limited to, requiring each employee to sign an agreement
1364 that he or she understands that the resort is a drug-free
1365 workplace.
1366 (g) Using the Internet-based job-listing system of the
1367 Agency for Workforce Innovation in advertising employment
1368 opportunities.
1369 (h) Ensuring that the payout percentage of each slot
1370 machine is at least 85 percent.
1371 (8) A resort licensee shall keep and maintain permanent
1372 daily records of its limited gaming operations and shall
1373 maintain such records for a period of not less than 5 years.
1374 These records must include all financial transactions and
1375 contain sufficient detail to determine compliance with the
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1376 requirements of the Resort Act. All records shall be available
1377 for audit and inspection by the commission, the Department of
1378 Law Enforcement, or other law enforcement agencies during the
1379 resort licensee’s regular business hours.
1380 Section 23. Surety bond.—A destination resort licensee
1381 must, at its own cost and expense, before the license is
1382 delivered, give a bond in the penal sum to be determined by the
1383 commission payable to the Governor of the state and her or his
1384 successors in office. The bond must be issued by a surety or
1385 sureties approved by the commission and the Chief Financial
1386 Officer and the bond must be conditioned on the licensee
1387 faithfully making the required payments to the Chief Financial
1388 Officer in her or his capacity as treasurer of the commission,
1389 keeping the licensee’s books and records and make reports as
1390 provided, and conducting its limited gaming activities in
1391 conformity with the Resort Act. The commission shall fix the
1392 amount of the bond at the total amount of annual license fees
1393 and the taxes estimated to become due as determined by the
1394 commission. In lieu of a bond, an applicant or licensee may
1395 deposit with the commission a like amount of funds, a savings
1396 certificate, a certificate of deposit, an investment
1397 certificate, or a letter of credit from a bank, savings bank,
1398 credit union, or savings and loan association situated in this
1399 state which meets the requirements set for that purpose by the
1400 Chief Financial Officer. If security is provided in the form of
1401 a savings certificate, a certificate of deposit, or an
1402 investment certificate, the certificate must state that the
1403 amount is unavailable for withdrawal except upon order of the
1404 commission. The commission may review the bond or other security
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1405 for adequacy and require adjustments, including increasing the
1406 amount of the bond and other security. The commission may adopt
1407 rules to administer this section and establish guidelines for
1408 such bonds or other securities.
1409 Section 24. Conduct of limited gaming.—
1410 (1) Limited gaming may be conducted by a resort licensee,
1411 subject to the following:
1412 (a) The site of the limited gaming facility is limited to
1413 the resort licensee’s site location as approved by the
1414 commission.
1415 (b) Limited gaming may not be conducted by a resort
1416 licensee until the resort is completed according to the proposal
1417 approved by the commission.
1418 (c) The commission’s agents and employees may enter and
1419 inspect a limited gaming facility or other facilities relating
1420 to a resort licensee’s gaming operations at any time for the
1421 purpose of determining whether the licensee is in compliance
1422 with the Resort Act.
1423 (d) A resort licensee may lease or purchase gaming devices,
1424 equipment, or supplies customarily used in conducting gaming
1425 only from a licensed supplier.
1426 (e) A resort licensee may not permit any form of wagering
1427 on games except as permitted by the Resort Act.
1428 (f) A resort licensee may receive wagers only from a person
1429 present in the limited gaming facility.
1430 (g) A resort licensee may not permit wagering using money
1431 or other negotiable currency except for wagering on slot
1432 machines.
1433 (h) A resort licensee may not permit a person who is less
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1434 than 21 years of age to engage in gaming activity or remain in
1435 an area of a limited gaming facility where gaming is being
1436 conducted, except for a limited gaming employee of the resort
1437 licensee who is at least 18 years of age.
1438 (i) A resort licensee may not sell or distribute tokens,
1439 chips, or electronic cards used to make wagers outside the
1440 limited gaming facility. The tokens, chips, or electronic cards
1441 may be purchased by means of an agreement under which the
1442 licensee extends credit to a wagerer. The tokens, chips, or
1443 electronic cards may be used only for the purpose of making
1444 wagers on games within a limited gaming facility.
1445 (j) All gaming activities must be conducted in accordance
1446 with commission rules.
1447 (2) A limited gaming facility may operate 24 hours per day,
1448 every day of the year.
1449 (3) A resort licensee may set the minimum and maximum
1450 wagers on all games.
1451 (4) A resort licensee shall give preference in employment,
1452 reemployment, promotion, and retention to veterans and to the
1453 persons included under s. 295.07(1), Florida Statutes, who
1454 possess the minimum qualifications necessary to perform the
1455 duties of the positions involved.
1456 (5) A resort licensee shall use the E-Verify program, or a
1457 similar program developed under the Immigration Reform and
1458 Control Act of 1986 or the Illegal Immigration Reform and
1459 Immigrant Responsibility Act of 1996, to verify the employment
1460 eligibility of all prospective employees. Applicants for a
1461 resort license must require that all contractors use such a
1462 program to verify the employment eligibility of their
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1463 prospective employees.
1464 (6) The commission shall renew a resort license if:
1465 (a) The licensee has demonstrated an effort to increase
1466 tourism, generate jobs, provide revenue to the local economy,
1467 and provide revenue to the state General Revenue Fund.
1468 (b) The commission has not suspended or revoked the license
1469 of the licensee.
1470 (c) The licensee continues to satisfy all the requirements
1471 of the initial application for licensure.
1472 Section 25. License fee; tax rate; disposition.—
1473 (1) LICENSE FEE.—On the anniversary date of the issuance of
1474 the initial resort license and annually thereafter, the licensee
1475 must pay to the commission a nonrefundable annual license fee of
1476 $5 million. The license shall be renewed annually, unless the
1477 commission has revoked the license for a violation of the Resort
1478 Act or rule of the commission. The license fee shall be
1479 deposited into the Destination Resort Trust Fund to be used by
1480 the commission and the Department of Law Enforcement for
1481 investigations, regulation of limited gaming, and enforcement of
1482 the Resort Act.
1483 (2) GROSS RECEIPTS TAX.—
1484 (a) Each resort licensee shall pay a gross receipts tax on
1485 its gross receipts to the state. Upon completion of the resort
1486 and before limited gaming may be conducted, the resort licensee
1487 must submit proof, as required by the commission, of the total
1488 investment made in the construction of the resort. Upon
1489 submission of this information, the gross receipts tax rate
1490 shall be set as follows:
1491 1. If the total infrastructure investment is $2 billion or
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1492 more, the tax rate shall be 10 percent of the gross receipts.
1493 2. If the total infrastructure investment is at least $1
1494 billion but less than $2 billion, the tax rate shall be 15
1495 percent of the gross receipts.
1496 3. If the total infrastructure investment is less than $1
1497 billion, the tax rate shall be 20 percent of the gross receipts.
1498 (b) The gross receipts tax is in lieu of any other state
1499 taxes on gross or adjusted gross receipts of a resort licensee.
1500 (3) TAX PROCEEDS.—
1501 (a) The gross receipts tax shall be deposited into the
1502 Destination Resort Trust Fund and shall be used to fund the
1503 operating costs of the commission pursuant to appropriations by
1504 the Legislature.
1505 (b) On June 30 of each year, all unappropriated funds in
1506 excess of $5 million shall be deposited as follows:
1507 1. Ninety-five percent shall be deposited into the General
1508 Revenue Fund.
1509 2. Two and 1/2 percent shall be deposited into the Tourism
1510 Promotional Trust Fund for use by the Florida Commission on
1511 Tourism.
1512 3. One and 1/4 percent shall be deposited into the
1513 Employment Security Administration Trust Fund for the benefit of
1514 the school readiness program.
1515 4. One and 1/4 percent shall be deposited into the
1516 Transportation Disadvantaged Trust Fund for use by the
1517 Commission for the Transportation Disadvantaged.
1518 Section 26. Fingerprint requirements.—Any fingerprints
1519 required to be taken under the Resort Act must be taken in a
1520 manner approved by, and shall be submitted electronically by the
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1521 commission to, the Department of Law Enforcement. The Department
1522 of Law Enforcement shall submit the results of the state and
1523 national records check to the commission. The commission shall
1524 consider the results of the state and national records check in
1525 evaluating an application for any license.
1526 (1) The cost of processing fingerprints and conducting a
1527 criminal history record check shall be borne by the applicant.
1528 The Department of Law Enforcement may submit a monthly invoice
1529 to the commission for the cost of processing the fingerprints
1530 submitted.
1531 (2) All fingerprints submitted to the Department of Law
1532 Enforcement pursuant to the Resort Act shall be retained by the
1533 Department of Law Enforcement and entered into the statewide
1534 automated fingerprint identification system as authorized by s.
1535 943.05(2)(b), Florida Statutes, and shall be available for all
1536 purposes and uses authorized for arrest fingerprint cards
1537 entered into the statewide automated fingerprint identification
1538 system pursuant to s. 943.051, Florida Statutes.
1539 (3) The Department of Law Enforcement shall search all
1540 arrest fingerprints received pursuant to s. 943.051, Florida
1541 Statutes, against the fingerprints retained in the statewide
1542 automated fingerprint identification system. Any arrest record
1543 that is identified with the retained fingerprints of a person
1544 subject to the criminal history screening under the Resort Act
1545 shall be reported to the commission. Each licensee shall pay a
1546 fee to the commission for the cost of retention of the
1547 fingerprints and the ongoing searches under this subsection. The
1548 commission shall forward the payment to the Department of Law
1549 Enforcement. The amount of the fee to be imposed for performing
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1550 these searches and the procedures for the retention of licensee
1551 fingerprints shall be as established by rule of the Department
1552 of Law Enforcement. The commission shall inform the Department
1553 of Law Enforcement of any change in the license status of
1554 licensees whose fingerprints are retained under subsection (2).
1555 (4) The commission shall request the Department of Law
1556 Enforcement to forward the fingerprints to the Federal Bureau of
1557 Investigation for a national criminal history records check
1558 every 3 years following issuance of a license. If the
1559 fingerprints of a person who is licensed have not been retained
1560 by the Department of Law Enforcement, the person must file
1561 another set of fingerprints. The commission shall collect the
1562 fees for the cost of the national criminal history record check
1563 under this subsection and shall forward the payment to the
1564 Department of Law Enforcement. The cost of processing
1565 fingerprints and conducting a criminal history record check
1566 under this paragraph shall be borne by the licensee or
1567 applicant. The Department of Law Enforcement may submit an
1568 invoice to the commission for the fingerprints submitted each
1569 month. Under penalty of perjury, each person who is licensed or
1570 who is fingerprinted as required by this section must agree to
1571 inform the commission within 48 hours if he or she is convicted
1572 of or has entered a plea of guilty or nolo contendere to any
1573 disqualifying offense, regardless of adjudication.
1574 Section 27. Compulsive or addictive gambling prevention
1575 program.—
1576 (1) A resort licensee shall offer training to employees on
1577 responsible gaming and shall work with a compulsive or addictive
1578 gambling prevention program to recognize problem gaming
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1579 situations and to implement responsible gaming programs and
1580 practices.
1581 (2) The commission shall, subject to competitive bidding,
1582 contract for services relating to the prevention of compulsive
1583 and addictive gambling. The contract shall provide for an
1584 advertising program to encourage responsible gaming practices
1585 and to publicize a gambling telephone help line. Such
1586 advertisements must be made both publicly and inside the
1587 resort’s limited gaming facility. The terms of any contract for
1588 such services shall include accountability standards that must
1589 be met by any private provider. The failure of any private
1590 provider to meet any material terms of the contract, including
1591 the accountability standards, constitutes a breach of contract
1592 or is grounds for nonrenewal. The commission may consult with
1593 the Department of the Lottery or the Department of Business and
1594 Professional Regulation in the development of the program and
1595 the development and analysis of any procurement for contractual
1596 services for the compulsive or addictive gambling prevention
1597 program.
1598 (3) The compulsive or addictive gambling prevention program
1599 shall be funded from an annual nonrefundable regulatory fee of
1600 $250,000 paid by each resort licensee to the commission.
1601 Section 28. Suppliers’ licenses.—
1602 (1) A person must have a supplier’s license in order to
1603 furnish on a regular or continuing basis to a resort licensee or
1604 an applicant for a resort license gaming equipment, devices, or
1605 supplies or other goods or services regarding the realty,
1606 construction, maintenance, or business of a proposed or existing
1607 resort facility. This requirement includes, but is not limited
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1608 to, junket enterprises, security businesses, manufacturers,
1609 distributors, persons who service gaming devices or equipment,
1610 garbage haulers, maintenance companies, food purveyors, and
1611 construction companies.
1612 (2) An applicant for a supplier’s license must apply to the
1613 commission on forms adopted by the commission by rule. The
1614 licensing fee for the initial and annual renewal of the license
1615 is $5,000.
1616 (3) An applicant for a supplier’s license must include in
1617 the application the fingerprints of the persons identified by
1618 commission rule for the processing of state and national
1619 criminal history record checks.
1620 (4)(a) An applicant for a supplier’s license is not
1621 eligible for licensure if:
1622 1. A person for whom fingerprinting is required under
1623 subsection (3) has been convicted of a felony under the laws of
1624 this or any other state or the United States;
1625 2. The applicant knowingly submitted false information in
1626 the application for a supplier’s license;
1627 3. The applicant is a member of the commission;
1628 4. The applicant is not a natural person and an officer,
1629 director, or managerial employee of that person is a person
1630 defined in subparagraphs 1.-3.;
1631 5. The applicant is not a natural person and an employee of
1632 the applicant participates in the management or operation of
1633 limited gaming authorized under the Resort Act; or
1634 6. The applicant has had a license to own or operate a
1635 resort facility or pari-mutuel facility in this or a similar
1636 license in any other jurisdiction revoked.
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1637 (b) The commission may revoke a supplier’s license at any
1638 time it determines that the licensee no longer satisfies the
1639 eligibility requirements in this subsection.
1640 (5) The commission may deny an application for a supplier’s
1641 license for any person:
1642 (a) Who is not qualified to perform the duties required of
1643 the licensee;
1644 (b) Who fails to disclose information or knowingly submits
1645 false information in the application;
1646 (c) Who has violated the Resort Act or rules of the
1647 commission; or
1648 (d) Who has had a gaming-related license or application
1649 suspended, restricted, revoked, or denied for misconduct in any
1650 other jurisdiction.
1651 (6) A supplier licensee shall:
1652 (a) Furnish to the commission a list of all gaming
1653 equipment, devices, and supplies it offers for sale or lease in
1654 connection with limited gaming authorized in the Resort Act;
1655 (b) Keep books and records documenting the furnishing of
1656 gaming equipment, devices, and supplies to resort licensees
1657 separate and distinct from any other business that the supplier
1658 operates;
1659 (c) File quarterly returns with the commission listing all
1660 sales or leases of gaming equipment, devices, or supplies to
1661 resort licensees;
1662 (d) Permanently affix its name to all gaming equipment,
1663 devices, or supplies sold or leased to licensees; and
1664 (e) File an annual report listing its inventories of gaming
1665 equipment, devices, and supplies.
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1666 (7) All gaming devices, equipment, or supplies furnished by
1667 a licensed supplier must conform to standards adopted by
1668 commission rule.
1669 (8)(a) The commission may suspend, revoke, or restrict the
1670 supplier’s license of a licensee:
1671 1. Who violates the Resort Act or the rules of the
1672 commission; or
1673 2. Who defaults on the payment of any obligation or debt
1674 due to this state or a county.
1675 (b) The commission must revoke the supplier’s license of a
1676 licensee for any cause that, if known to the commission, would
1677 have disqualified the applicant from receiving a license.
1678 (9) A supplier’s licensee may repair gaming equipment,
1679 devices, or supplies in a facility owned or leased by the
1680 licensee.
1681 (10) Gaming devices, equipment, or supplies owned by a
1682 supplier’s licensee which are used in an unauthorized gaming
1683 operation shall be forfeited to the county where the equipment
1684 is found.
1685 (11) The commission may revoke the license or deny the
1686 application for a supplier’s license of a person who fails to
1687 comply with this section.
1688 (12) A person who knowingly makes a false statement on an
1689 application for a supplier’s license commits a misdemeanor of
1690 the first degree, punishable as provided in s. 775.082 or s.
1691 775.083, Florida Statutes.
1692 Section 29. Occupational licenses.—
1693 (1) The Legislature finds that, due to the nature of their
1694 employment, some gaming employees require heightened state
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1695 scrutiny, including licensing and criminal history record
1696 checks.
1697 (2) Any person who desires to be a gaming employee and has
1698 a bona fide offer of employment from a licensed gaming entity
1699 shall apply to the commission for an occupational license. A
1700 person may not be employed as a gaming employee unless that
1701 person holds an appropriate occupational license issued under
1702 this section. The commission may adopt rules to reclassify a
1703 category of nongaming employees or gaming employees upon a
1704 finding that the reclassification is in the public interest and
1705 consistent with the objectives of the Resort Act.
1706 (3) An applicant for an occupational license must apply to
1707 the commission on forms adopted by the commission by rule. An
1708 occupational license is valid for 1 year following issuance. The
1709 application must be accompanied by the licensing fee set by the
1710 commission. The licensing fee may not exceed $50 for an employee
1711 of a resort licensee.
1712 (a) The applicant shall set forth in the application
1713 whether the applicant:
1714 1. Has been issued a gaming-related license in any
1715 jurisdiction.
1716 2. Has been issued a gaming-related license in any other
1717 jurisdiction under any other name and, if so, the name and the
1718 applicant’s age at the time of licensure.
1719 3. Has had a permit or license issued by another
1720 jurisdiction suspended, restricted, or revoked and, if so, for
1721 what period of time.
1722 (b) An applicant for an occupational license must include
1723 his or her fingerprints in the application.
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1724 (4) To be eligible for an occupational license, an
1725 applicant must:
1726 (a) Be at least 21 years of age to perform any function
1727 directly relating to limited gaming by patrons;
1728 (b) Be at least 18 years of age to perform nongaming
1729 functions;
1730 (c) Not have been convicted of a felony or a crime
1731 involving dishonesty or moral turpitude in any jurisdiction; and
1732 (d) Meet the standards for the occupational license as
1733 provided in commission rules.
1734 (5) The commission must deny an application for an
1735 occupational license for any person:
1736 (a) Who is not qualified to perform the duties required of
1737 the licensee;
1738 (b) Who fails to disclose or knowingly submits false
1739 information in the application;
1740 (c) Who has violated the Resort Act; or
1741 (d) Who has had a gaming-related license or application
1742 suspended, restricted, revoked, or denied in any other
1743 jurisdiction.
1744 (6)(a) The commission may suspend, revoke, or restrict the
1745 occupational license of a licensee:
1746 1. Who violates the Resort Act or the rules of the
1747 commission;
1748 2. Who defaults on the payment of any obligation or debt
1749 due to this state or a county; or
1750 3. For any just cause.
1751 (b) The commission shall revoke the occupational license of
1752 a licensee for any cause that, if known to the commission, would
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1753 have disqualified the applicant from receiving a license.
1754 (7) Any training provided for an occupational licensee may
1755 be conducted in the facility of a resort licensee or at a school
1756 with which the resort licensee has entered into an agreement for
1757 that purpose.
1758 (8) A person who knowingly makes a false statement on an
1759 application for an occupational license commits a misdemeanor of
1760 the first degree, punishable as provided in s. 775.082 or s.
1761 775.083, Florida Statutes.
1762 Section 30. Temporary supplier’s license; temporary
1763 occupational license.—
1764 (1) Upon the written request of an applicant for a
1765 supplier’s license or an occupational license, the executive
1766 director shall issue a temporary license to the applicant and
1767 permit the applicant to undertake employment with or provide
1768 gaming equipment, devices, or supplies or other goods or
1769 services to a resort licensee or an applicant for a resort
1770 license if:
1771 (a) The applicant has submitted a completed application, an
1772 application fee, all required disclosure forms, and other
1773 required written documentation and materials;
1774 (b) A preliminary review of the application and the
1775 criminal history record check does not reveal that the applicant
1776 or a person subject to a criminal history record check has been
1777 convicted of a crime that would require denial of the
1778 application;
1779 (c) A deficiency does not appear to exist in the
1780 application which may require denial of the application; and
1781 (d) The applicant has an offer of employment from, or an
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1782 agreement to begin providing gaming devices, equipment, or
1783 supplies or other goods and services to, a resort licensee or an
1784 applicant for a resort license, or the applicant for a temporary
1785 license shows good cause for being granted a temporary license.
1786 (2) A temporary occupational license or supplier’s license
1787 may not be valid for more than 90 days.
1788 (3) An applicant who receives a temporary license may
1789 undertake employment with or supply a resort licensee with
1790 gaming devices, equipment, or supplies or other goods or
1791 services until a license is issued or denied or until the
1792 temporary license expires or is suspended or revoked.
1793 Section 31. Quarterly report.—The commission shall file
1794 quarterly reports with the Governor, the President of the
1795 Senate, and the Speaker of the House of Representatives covering
1796 the previous fiscal quarter. The report must include:
1797 (1) A statement of receipts and disbursements related to
1798 limited gaming;
1799 (2) A summary of disciplinary actions taken by the
1800 commission; and
1801 (3) Any additional information and recommendations that the
1802 commission believes may improve the regulation of limited gaming
1803 or increase the economic benefits of limited gaming to this
1804 state.
1805 Section 32. Hearings by the commission.—
1806 (1) The chair of the commission may participate in any
1807 proceeding pending before the commission when administrative
1808 duties and time permit. In order to distribute the workload and
1809 expedite the commission’s calendar, the chair, in addition to
1810 other administrative duties, may assign the various proceedings
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1811 pending before the commission requiring hearings to two or more
1812 commissioners. Only those commissioners assigned to a proceeding
1813 requiring hearings may participate in the final decision of the
1814 commission as to that proceeding. However, if only two
1815 commissioners are assigned to a proceeding requiring a hearing
1816 and they cannot agree on a final decision, the chair shall cast
1817 the deciding vote for final disposition of the proceeding. If
1818 more than two commissioners are assigned to any proceeding, a
1819 majority of the members assigned shall constitute a quorum and a
1820 majority vote of the members assigned shall be essential to
1821 final commission disposition of those proceedings. If a
1822 commissioner becomes unavailable after assignment to a
1823 particular proceeding, the chair must assign a substitute
1824 commissioner. A petition for reconsideration must be voted upon
1825 by those commissioners participating in the final disposition of
1826 the proceeding.
1827 (2) A majority of the commissioners may determine that the
1828 full commission will sit in any proceeding. Any party to a
1829 proceeding may file a petition requesting that the proceeding be
1830 assigned to the full commission. Within 15 days after receipt by
1831 the commission of any petition, the full commission must dispose
1832 of such petition by majority vote and render a written decision
1833 before the matter may be heard by less than the full commission.
1834 (3) This section does not prohibit a commissioner
1835 designated by the chair from conducting a hearing as provided
1836 under ss. 120.569 and 120.57(1), Florida Statutes, and the rules
1837 of the commission.
1838 Section 33. Resolution of disputes between licensees and
1839 patrons.—
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1840 (1) Whenever a resort licensee has a dispute with a patron
1841 which is not resolved to the satisfaction of the patron and
1842 involves:
1843 (a) Alleged winnings, alleged losses, or the award or
1844 distribution of cash, prizes, benefits, tickets, or any other
1845 item or items in a game, tournament, contest, drawing,
1846 promotion, race, or similar activity or event; or
1847 (b) The manner in which a game, tournament, contest,
1848 drawing, promotion, race, or similar activity or event was
1849 conducted,
1850
1851 the licensee must immediately notify the commission of the
1852 dispute if the amount disputed is $500 or more. If the dispute
1853 involves an amount less than $500, the licensee must immediately
1854 notify the patron of his or her right to file a complaint with
1855 the commission.
1856 (2) Upon notice of a dispute or receipt of a complaint, the
1857 commission shall conduct any investigation it deems necessary
1858 and may order the licensee to make a payment to the patron upon
1859 a finding that the licensee is liable for the disputed amount.
1860 The decision of the commission is effective on the date the
1861 aggrieved party receives notice of the decision. Notice of the
1862 decision is deemed sufficient if it is mailed to the last known
1863 address of the licensee and the patron. The notice is deemed to
1864 have been received by the resort licensee or the patron 5 days
1865 after it is deposited with the United States Postal Service with
1866 postage prepaid.
1867 (3) The failure of a resort licensee to notify the
1868 commission of the dispute or the patron of the right to file a
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1869 complaint is grounds for disciplinary action.
1870 Section 34. Enforcement of credit instruments.—
1871 (1) A credit instrument and the debt that instrument
1872 represents are valid and may be enforced by legal process.
1873 (2) A resort licensee may accept an incomplete credit
1874 instrument that:
1875 (a) Is signed by the patron; and
1876 (b) States the amount of the debt in numbers, and may
1877 complete the instrument as is necessary for the instrument to be
1878 presented for payment.
1879 (3) A resort licensee may accept a credit instrument that
1880 is payable to an affiliate or may complete a credit instrument
1881 payable to an affiliate if the credit instrument otherwise
1882 complies with this section and the records of the affiliate
1883 pertaining to the credit instrument are made available to the
1884 commission upon request.
1885 (4) A resort licensee may accept a credit instrument
1886 before, during, or after the patron incurs the debt. The credit
1887 instrument and the debt that the instrument represents are
1888 enforceable without regard to whether the credit instrument was
1889 accepted before, during, or after the incurring of the debt.
1890 (5) This section does not prohibit the establishment of an
1891 account by a deposit of cash, recognized traveler’s check, or
1892 any other instrument that is equivalent to cash.
1893 (6) If a credit instrument is lost or destroyed, the debt
1894 represented by the credit instrument may be enforced if the
1895 resort licensee or person acting on behalf of the licensee can
1896 prove the existence of the credit instrument.
1897 (7) The existence of a mental disorder in a patron who
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1898 provides a credit instrument to a resort licensee:
1899 (a) Is not a defense in any action by a resort licensee to
1900 enforce a credit instrument or the debt that the credit
1901 instrument represents.
1902 (b) Is not a valid counterclaim in an action to enforce the
1903 credit instrument or the debt that the credit instrument
1904 represents.
1905 (8) The failure of a resort licensee to comply with the
1906 provisions of this section or commission rules does not
1907 invalidate a credit instrument or affect its ability to enforce
1908 the credit instrument or the debt that the credit instrument
1909 represents.
1910 (9) The commission may adopt rules prescribing the
1911 conditions under which a credit instrument may be redeemed or
1912 presented to a bank or credit union for collection or payment.
1913 Section 35. Voluntary self-exclusion from a limited gaming
1914 facility.—
1915 (1) A person may request that he or she be excluded from
1916 limited gaming facilities in this state by personally submitting
1917 a Request for Voluntary Self-exclusion from Limited Gaming
1918 Facilities Form to the commission. The form must require the
1919 person requesting exclusion to:
1920 (a) State his or her:
1921 1. Name, including any aliases or nicknames;
1922 2. Date of birth;
1923 3. Current residential address;
1924 4. Telephone number;
1925 5. Social security number; and
1926 6. Physical description, including height, weight, gender,
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1927 hair color, eye color, and any other physical characteristic
1928 that may assist in the identification of the person.
1929
1930 A self-excluded person must update the information in this
1931 paragraph on forms supplied by the commission within 30 days
1932 after any change.
1933 (b) Select one of the following as the duration of the
1934 self-exclusion:
1935 1. One year.
1936 2. Five years.
1937 3. Lifetime.
1938 (c) Execute a release in which the person:
1939 1. Acknowledges that the request for exclusion has been
1940 made voluntarily.
1941 2. Certifies that the information provided in the request
1942 for self-exclusion is true and correct.
1943 3. Acknowledges that the individual requesting self-
1944 exclusion is a problem gambler.
1945 4. Acknowledges that a person requesting a lifetime
1946 exclusion will not be removed from the self-exclusion list and
1947 that a person requesting a 1-year or 5-year exclusion will
1948 remain on the self-exclusion list until a request for removal is
1949 approved by the commission.
1950 5. Acknowledges that, if the individual is discovered on
1951 the gaming floor of a limited gaming facility, the individual
1952 may be removed and may be arrested and prosecuted for criminal
1953 trespass.
1954 6. Releases, indemnifies, holds harmless, and forever
1955 discharges the state, commission, and all licensee from any
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1956 claims, damages, losses, expenses, or liability arising out of,
1957 by reason of or relating to the self-excluded person or to any
1958 other party for any harm, monetary or otherwise, which may arise
1959 as a result of one or more of the following:
1960 a. The failure of a resort licensee to withhold gaming
1961 privileges from or restore gaming privileges to a self-excluded
1962 person.
1963 b. Permitting or prohibiting a self-excluded person from
1964 engaging in gaming activity in a limited gaming facility.
1965 (2) A person submitting a self-exclusion request must
1966 present to the commission a government-issued form of
1967 identification containing the person’s signature.
1968 (3) The commission shall take a photograph of a person
1969 requesting self-exclusion at the time the person submits a
1970 request for self-exclusion.
1971 Section 36. Section 849.15, Florida Statutes, is amended to
1972 read:
1973 849.15 Manufacture, sale, possession, etc., of coin-
1974 operated devices prohibited.—
1975 (1) It is unlawful:
1976 (a) To manufacture, own, store, keep, possess, sell, rent,
1977 lease, let on shares, lend or give away, transport, or expose
1978 for sale or lease, or to offer to sell, rent, lease, let on
1979 shares, lend or give away, or permit the operation of, or for
1980 any person to permit to be placed, maintained, or used or kept
1981 in any room, space, or building owned, leased or occupied by the
1982 person or under the person’s management or control, any slot
1983 machine or device or any part thereof; or
1984 (b) To make or to permit to be made with any person any
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1985 agreement with reference to any slot machine or device, pursuant
1986 to which the user thereof, as a result of any element of chance
1987 or other outcome unpredictable to him or her, may become
1988 entitled to receive any money, credit, allowance, or thing of
1989 value or additional chance or right to use such machine or
1990 device, or to receive any check, slug, token or memorandum
1991 entitling the holder to receive any money, credit, allowance or
1992 thing of value.
1993 (2) Pursuant to section 2 of that chapter of the Congress
1994 of the United States entitled “An act to prohibit transportation
1995 of gaming devices in interstate and foreign commerce,” approved
1996 January 2, 1951, being ch. 1194, 64 Stat. 1134, and also
1997 designated as 15 U.S.C. ss. 1171-1177, the State of Florida,
1998 acting by and through the duly elected and qualified members of
1999 its Legislature, does hereby in this section, and in accordance
2000 with and in compliance with the provisions of section 2 of such
2001 chapter of Congress, declare and proclaim that any county of the
2002 State of Florida within which slot machine gaming is authorized
2003 pursuant to the Destination Resort Act, sections 3 through 35 of
2004 this act, or chapter 551 is exempt from the provisions of
2005 section 2 of that chapter of the Congress of the United States
2006 entitled “An act to prohibit transportation of gaming devices in
2007 interstate and foreign commerce,” designated as 15 U.S.C. ss.
2008 1171-1177, approved January 2, 1951. All shipments of gaming
2009 devices, including slot machines, into any county of this state
2010 within which slot machine gaming is authorized pursuant to the
2011 Destination Resort Act, sections 3 through 35 of this act, or
2012 chapter 551 and the registering, recording, and labeling of
2013 which have been duly performed by the manufacturer or
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2014 distributor thereof in accordance with sections 3 and 4 of that
2015 chapter of the Congress of the United States entitled “An act to
2016 prohibit transportation of gaming devices in interstate and
2017 foreign commerce,” approved January 2, 1951, being ch. 1194, 64
2018 Stat. 1134, and also designated as 15 U.S.C. ss. 1171-1177,
2019 shall be deemed legal shipments thereof into this state provided
2020 the destination of such shipments is an eligible facility as
2021 defined in s. 551.102, or the facility of a slot machine
2022 manufacturer or slot machine distributor as provided in s.
2023 551.109(2)(a), or the facility of a resort licensee or supplier
2024 licensee under the Destination Resort Act, sections 3 through 35
2025 of this act.
2026 Section 37. Section 849.231, Florida Statutes, is amended
2027 to read:
2028 849.231 Gambling devices; manufacture, sale, purchase or
2029 possession unlawful.—
2030 (1) Except in instances when the following described
2031 implements or apparatus are being held or transported by
2032 authorized persons for the purpose of destruction, as
2033 hereinafter provided, and except in instances when the following
2034 described instruments or apparatus are being held, sold,
2035 transported, or manufactured by persons who have registered with
2036 the United States Government pursuant to the provisions of Title
2037 15 of the United States Code, ss. 1171 et seq., as amended, so
2038 long as the described implements or apparatus are not displayed
2039 to the general public, sold for use in Florida, or held or
2040 manufactured in contravention of the requirements of 15 U.S.C.
2041 ss. 1171 et seq., it shall be unlawful for any person to
2042 manufacture, sell, transport, offer for sale, purchase, own, or
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2043 have in his or her possession any roulette wheel or table, faro
2044 layout, crap table or layout, chemin de fer table or layout,
2045 chuck-a-luck wheel, bird cage such as used for gambling, bolita
2046 balls, chips with house markings, or any other device,
2047 implement, apparatus, or paraphernalia ordinarily or commonly
2048 used or designed to be used in the operation of gambling houses
2049 or establishments, excepting ordinary dice and playing cards.
2050 (2) In addition to any other penalties provided for the
2051 violation of this section, any occupational license held by a
2052 person found guilty of violating this section shall be suspended
2053 for a period not to exceed 5 years.
2054 (3) This section and s. 849.05 do not apply to a vessel of
2055 foreign registry or a vessel operated under the authority of a
2056 country except the United States, while docked in this state or
2057 transiting in the territorial waters of this state.
2058 (4) This section does not apply to limited gaming as
2059 authorized by the Destination Resort Act, sections 3 through 35
2060 of this act.
2061 Section 38. Section 849.25, Florida Statutes, is amended to
2062 read:
2063 849.25 “Bookmaking” defined; penalties; exceptions.—
2064 (1)(a) The term “bookmaking” means the act of taking or
2065 receiving, while engaged in the business or profession of
2066 gambling, any bet or wager upon the result of any trial or
2067 contest of skill, speed, power, or endurance of human, beast,
2068 fowl, motor vehicle, or mechanical apparatus or upon the result
2069 of any chance, casualty, unknown, or contingent event
2070 whatsoever.
2071 (b) The following factors shall be considered in making a
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2072 determination that a person has engaged in the offense of
2073 bookmaking:
2074 1. Taking advantage of betting odds created to produce a
2075 profit for the bookmaker or charging a percentage on accepted
2076 wagers.
2077 2. Placing all or part of accepted wagers with other
2078 bookmakers to reduce the chance of financial loss.
2079 3. Taking or receiving more than five wagers in any single
2080 day.
2081 4. Taking or receiving wagers totaling more than $500 in
2082 any single day, or more than $1,500 in any single week.
2083 5. Engaging in a common scheme with two or more persons to
2084 take or receive wagers.
2085 6. Taking or receiving wagers on both sides on a contest at
2086 the identical point spread.
2087 7. Any other factor relevant to establishing that the
2088 operating procedures of such person are commercial in nature.
2089 (c) The existence of any two factors listed in paragraph
2090 (b) may constitute prima facie evidence of a commercial
2091 bookmaking operation.
2092 (2) Any person who engages in bookmaking commits shall be
2093 guilty of a felony of the third degree, punishable as provided
2094 in s. 775.082, s. 775.083, or s. 775.084. Notwithstanding the
2095 provisions of s. 948.01, any person convicted under the
2096 provisions of this subsection shall not have adjudication of
2097 guilt suspended, deferred, or withheld.
2098 (3) Any person who has been convicted of bookmaking and
2099 thereafter violates the provisions of this section commits shall
2100 be guilty of a felony of the second degree, punishable as
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2101 provided in s. 775.082, s. 775.083, or s. 775.084.
2102 Notwithstanding the provisions of s. 948.01, any person
2103 convicted under the provisions of this subsection shall not have
2104 adjudication of guilt suspended, deferred, or withheld.
2105 (4) Notwithstanding the provisions of s. 777.04, any person
2106 who is guilty of conspiracy to commit bookmaking is shall be
2107 subject to the penalties imposed by subsections (2) and (3).
2108 (5) This section does shall not apply to pari-mutuel
2109 wagering in Florida as authorized under chapter 550.
2110 (6) This section does shall not apply to any prosecutions
2111 filed and pending at the time of the passage hereof, but all
2112 such cases shall be disposed of under existing laws at the time
2113 of the institution of such prosecutions.
2114 (7) This section does not apply to limited gaming as
2115 authorized in the Destination Resort Act, sections 3 through 35
2116 of this act.
2117 Section 39. This act shall take effect July 1, 2011.
2118
2119 ================= T I T L E A M E N D M E N T ================
2120 And the title is amended as follows:
2121 Delete everything before the enacting clause
2122 and insert:
2123 A bill to be entitled
2124 An act relating to destination resorts; amending s.
2125 20.21, F.S.; creating the Destination Resort
2126 Commission within the Department of Revenue; amending
2127 s. 120.80, F.S.; exempting the Destination Resort
2128 Commission from specified provisions of the
2129 Administrative Procedure Act; creating the Destination
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2130 Resort Act; providing definitions; providing that the
2131 Destination Resort Commission is a separate budget
2132 entity from the Department of Revenue; providing for
2133 the appointment and qualifications of members of the
2134 commission; providing for the selection of the chair
2135 and vice chair of the commission; providing that the
2136 chair is the administrative head of the commission;
2137 specifying the responsibilities of the chair;
2138 providing that the commission serves as the agency
2139 head for purposes of the Administrative Procedure Act;
2140 providing that the executive director of the
2141 commission may serve as the agency head for purposes
2142 of final agency action within the authority delegated
2143 by the commission; specifying the powers of the
2144 commission, including the power to authorize limited
2145 gaming at up to five destination resorts, conduct
2146 investigations, issue subpoenas, take enforcement
2147 actions, and create an invitation to negotiate process
2148 to evaluate applications for a resort license;
2149 specifying the jurisdiction of the commission, the
2150 Department of Law Enforcement, and local law
2151 enforcement agencies to investigate criminal
2152 violations relating to limited gaming; requiring the
2153 commission to revoke or suspend the licensee of a
2154 person who was unqualified at the time of licensure or
2155 who is no longer qualified to be licensed; authorizing
2156 the commission to adopt rules relating to the types of
2157 gaming authorized, requirements for the issuance,
2158 renewal, revocation, and suspension of licenses, the
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2159 disclosure of financial interests, procedures to test
2160 gaming equipment, procedures to verify gaming revenues
2161 and the collection of taxes, requirements for gaming
2162 equipment, procedures relating to a facilities-based
2163 computer system, bond requirements of resort
2164 licensees, the maintenance of records, procedures to
2165 calculate the payout percentages of slot machines,
2166 security standards, the scope and conditions for
2167 investigations and inspections into the conduct of
2168 limited gaming, the seizure of gaming equipment and
2169 records without notice or a warrant, employee drug-
2170 testing programs, and the payment of costs, fines, and
2171 application fees; authorizing the commission to adopt
2172 emergency rules; exempting the rules from specified
2173 provisions of the Administrative Procedure Act;
2174 authorizing the commission to employ law enforcement
2175 officers; specifying the qualifications and powers of
2176 law enforcement officers employed by the commission;
2177 providing for the appointment, qualifications, and
2178 powers of the executive director of the commission;
2179 specifying persons who may not be employed by the
2180 commission; requiring the commission to adopt a code
2181 of ethics for its employees, members, and agents;
2182 specifying prohibited financial interests and
2183 relationships; imposing postemployment restrictions on
2184 members, employees, and agents of the commission;
2185 restricting the political activities of members,
2186 employees, and agents of the commission; prohibiting
2187 commissioners, employees, and agents of the commission
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2188 from wagering under certain circumstances; requiring
2189 members, employees, and agents of the commission to
2190 annually disclose certain financial interests;
2191 specifying conditions under which members, employees,
2192 and agents of the commission must immediately disclose
2193 certain financial matters, criminal matters,
2194 employment negotiations, the offering or acceptance of
2195 gifts, and the offering of a bribe; prohibiting ex
2196 parte communications between applicants or licensees
2197 and members of the commission; requiring parties to an
2198 ex parte communication to disclose the substance of
2199 the communication; authorizing the imposition of a
2200 fine on a member of the commission who fails to
2201 disclose an ex parte communication; authorizing the
2202 Commission on Ethics to investigate complaints
2203 alleging an ex parte communication; requiring the
2204 Commission on Ethics to provide a report of its
2205 findings to the Governor if it finds that a
2206 commissioner violated the prohibitions on ex parte
2207 communications; authorizing the Commission on Ethics
2208 to bring an action against a commissioner to collect
2209 any penalties assessed; prohibiting a person who
2210 participated in an ex parte communication from
2211 appearing or representing a person before the
2212 commission for a certain time; specifying grounds for
2213 removal or termination of employment of commissioners
2214 and employees who violate the laws regulating limited
2215 gaming; requiring a referendum in the county where a
2216 destination resort is to be located as a prerequisite
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2217 to the conduct of limited gaming activities;
2218 preempting the regulation of limited gaming at a
2219 destination resort to the state; requiring the
2220 commission to develop an invitation to negotiate
2221 process to award a resort license; specifying the
2222 minimum criteria that an applicant must meet to be
2223 awarded a destination resort license; specifying
2224 events that disqualify an applicant from eligibility
2225 for a resort license; specifying the information that
2226 must be on or included with an application for a
2227 resort license; specifying the amount of a
2228 nonrefundable application fee for a resort license to
2229 be used to defray the costs of an investigation of the
2230 applicant; authorizing the imposition of additional
2231 fees if the amount of the application fee is
2232 insufficient to cover the costs of the investigation;
2233 requiring the payment of a one-time licensing fee to
2234 be submitted along with an application for a resort
2235 license; requiring the executive director to notify an
2236 applicant for a resort license if the application is
2237 incomplete; authorizing the applicant to have an
2238 informal conference with the executive director to
2239 discuss an incomplete application; authorizing the
2240 executive director to grant an extension to complete
2241 an application; providing for the stay of the award of
2242 a resort license during an extension or the appeal to
2243 the commission of a finding by the executive director
2244 that an application is incomplete; exempting an
2245 institutional investor that is a qualifier for a
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2246 resort licensee from certain application requirements
2247 under certain circumstances; requiring notice to the
2248 commission of any changes that may require a person to
2249 comply with the full application requirements;
2250 exempting lending institutions and underwriters from
2251 licensing requirements as a qualifier under certain
2252 circumstances; specifying conditions for a resort
2253 licensee to maintain licensure; requiring that the
2254 licensee post a bond; specifying conditions for the
2255 conduct of limited gaming by a resort licensee;
2256 requiring the commission to renew the license of a
2257 resort licensee if the licensee satisfies specified
2258 conditions; specifying an annual fee for the renewal
2259 of a resort license; imposing a tiered gross receipts
2260 tax based on the amount of a resort licensee’s
2261 infrastructure costs; providing for the deposit of the
2262 tax into the Destination Resort Trust Fund; providing
2263 for certain unappropriated funds in the Destination
2264 Resort Trust Fund to be deposited into the General
2265 Revenue Fund, the Tourism Promotional Trust Fund, the
2266 Employment Security Administration Trust Fund, and the
2267 Transportation Disadvantaged Trust Fund; providing for
2268 the proceeds of the gross receipts tax to fund the
2269 operations of the commission; providing procedures for
2270 the submission and processing of fingerprints of
2271 certain persons regulated by the commission; providing
2272 that the cost of processing the fingerprints shall be
2273 borne by a licensee or applicant; requiring a person
2274 to report to the commission certain pleas and
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2275 convictions for disqualifying offenses; requiring a
2276 resort licensee to train its employees about
2277 compulsive gambling; requiring a resort licensee to
2278 work with a compulsive gambling prevention program;
2279 requiring the commission to contract for services
2280 relating to the prevention of compulsive gambling;
2281 providing for the commission’s compulsive gambling
2282 prevention program to be funded from a regulatory fee
2283 imposed on resort licensees; requiring a person to
2284 have a supplier’s license to furnish certain goods and
2285 services to a resort licensee; specifying the amount
2286 of the application fee for a supplier’s license;
2287 specifying persons who are disqualified from receiving
2288 a supplier’s license; specifying circumstances under
2289 which the commission may revoke a supplier’s license;
2290 authorizing the commission to adopt rules relating to
2291 the licensing of suppliers; requiring a supplier
2292 licensee to furnish a list of gaming devices and
2293 equipment to the commission, maintain records, file
2294 quarterly returns, and affix its name to the gaming
2295 equipment and supplies that it offers; requiring that
2296 the supplier licensee annually report its inventory to
2297 the commission; authorizing the commission to revoke a
2298 supplier’s license under certain circumstances;
2299 providing that the equipment of a supplier’s licensee
2300 which is used in unauthorized gaming will be forfeited
2301 to the county where the equipment is found; imposing a
2302 criminal penalty on a person who knowingly makes a
2303 false statement on an application for a supplier’s
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Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 2050
Ì609550#Î609550
2304 license; requiring a person to have an occupational
2305 license to serve as a limited gaming employee of a
2306 resort licensee; requiring a person to apply to the
2307 commission for an occupational license and pay an
2308 application fee; specifying information that an
2309 applicant must include in an application for an
2310 occupational license; specifying grounds for the
2311 commission to deny an application for an occupational
2312 license; imposing a criminal penalty on a person who
2313 knowingly makes a false statement on an application
2314 for an occupational license; authorizing the executive
2315 director of the commission to issue a temporary
2316 occupational or temporary supplier’s license under
2317 certain circumstances; requiring the commission to
2318 file quarterly reports with the Governor, the
2319 President of the Senate, and the Speaker of the House
2320 of Representatives; specifying procedures for the
2321 conduct of proceedings by the commission; authorizing
2322 the chair of the commission to assign a proceeding to
2323 less than the full commission; providing procedures
2324 for the resolution of certain disputes between a
2325 resort licensee and a patron; requiring a resort
2326 licensee to notify the commission of certain disputes
2327 with a patron involving amounts of $500 or more;
2328 requiring a resort licensee to notify a patron of the
2329 right to file a complaint with the commission
2330 regarding certain disputes of an amount less than
2331 $500; authorizing the commission to investigate
2332 disputes and to order a resort licensee to make a
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Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 2050
Ì609550#Î609550
2333 payment to a patron; providing for the enforcement of
2334 credit instruments; authorizing a resort licensee to
2335 accept an incomplete credit instrument and to complete
2336 incomplete credit instruments under certain
2337 circumstances; providing that existence of a mental
2338 disorder is not a defense or a valid counterclaim in
2339 an action to enforce a credit instrument; authorizing
2340 the commission to adopt rules prescribing the
2341 conditions under which a credit instrument may be
2342 presented to a bank; providing that a resort licensee
2343 has the right to exclude a person from its limited
2344 gaming facility; authorizing a person to request that
2345 the commission exclude her or him from limited gaming
2346 facilities; specifying the required contents of the
2347 request; providing that a self-excluded person who is
2348 found on a gaming floor may be arrested and prosecuted
2349 for criminal trespass; providing that a self-excluded
2350 person holds harmless the commission and licensees
2351 from claims for losses and damages under certain
2352 circumstances; amending s. 849.15, F.S.; authorizing
2353 slot machine gaming in a resort licensee and the
2354 transportation of slot machines pursuant to federal
2355 law; amending s. 849.231, F.S.; providing that a
2356 prohibition on gambling devices does not apply to
2357 limited gaming as authorized in the act; amending s.
2358 849.25, F.S.; providing that a prohibition on gaming
2359 does not apply to limited gaming as authorized in the
2360 act; providing an effective date.
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Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 2050
Ì8544649Î854464
LEGISLATIVE ACTION
Senate . House
.
.
.
.
.
The Committee on Commerce and Tourism (Gaetz) recommended the
following:
1 Senate Amendment to Amendment (609550)
2
3 Delete lines 106 - 107
4 and insert:
5 Flagler, Marion, Volusia, and Hernando Counties.
Page 1 of 1
4/5/2011 8:00:25 AM 577-03801-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 2050
Ì681052zÎ681052
LEGISLATIVE ACTION
Senate . House
.
.
.
.
.
The Committee on Commerce and Tourism (Gaetz) recommended the
following:
1 Senate Amendment to Amendment (609550)
2
3 Delete lines 987 - 989.
Page 1 of 1
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Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 2050
Ì789614<Î789614
LEGISLATIVE ACTION
Senate . House
.
.
.
.
.
The Committee on Commerce and Tourism (Gaetz) recommended the
following:
1 Senate Amendment to Amendment (609550)
2
3 Delete lines 1146 - 1149
4 and insert:
5 (l) Proof that the electors of the county in a countywide
6 referendum have approved limited gaming at a resort in the
7 county before the application deadline has been established by
8 the commission for any district. However, a referendum is not
9 required in any county where slot machine gaming as defined in
10 s. 551.102(8) is currently conducted within a county.
Page 1 of 1
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Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 2050
Ì838428EÎ838428
LEGISLATIVE ACTION
Senate . House
.
.
.
.
.
The Committee on Commerce and Tourism (Gaetz) recommended the
following:
1 Senate Amendment to Amendment (609550) (with title
2 amendment)
3
4 Between lines 1970 and 1971
5 insert:
6 Section 36. Slot machine licensees.—Notwithstanding any law
7 to the contrary, if a resort licensee receives final
8 authorization to conduct limited gaming activities in Miami-Dade
9 County or Broward County, a pari-mutuel facility licensed to
10 operate slot machine gaming under s. 551.104, Florida Statutes,
11 may conduct all games, including such games identified in the
12 Destination Resort Act as limited gaming, during the same hours
Page 1 of 2
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Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 2050
Ì838428EÎ838428
13 of operation and limits of wagering authorized for a resort
14 licensee. However, before conducting limited gaming, such
15 licensee is subject to the provisions of subsection (3) of
16 section 17. The facility shall pay the same tax on gross
17 receipts as the resort licensee located within Miami-Dade County
18 or Broward County. For purposes of this section, the term “final
19 authorization” means the anticipated opening date of the resort
20 casino, or the actual opening date, whichever occurs first.
21
22 ================= T I T L E A M E N D M E N T ================
23 And the title is amended as follows:
24 Delete line 2352
25 and insert:
26 circumstances; allowing pari-mutuel facilities to
27 conduct all games under certain conditions when a
28 resort license to conduct limited gaming activities is
29 authorized in Miami-Dade County or Broward County;
30 amending s. 849.15, F.S.; authorizing
Page 2 of 2
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Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 2050
Ì9613922Î961392
LEGISLATIVE ACTION
Senate . House
.
.
.
.
.
The Committee on Commerce and Tourism (Gaetz) recommended the
following:
1 Senate Amendment to Amendment (609550) (with title
2 amendment)
3
4 Delete lines 2058 - 2060
5 and insert:
6 (4) This section does not apply to slot machine licensees
7 authorized under chapter 551 or limited gaming authorized by
8 sections 3 through 36 of this act.
9
10 ================= T I T L E A M E N D M E N T ================
11 And the title is amended as follows:
12 Between lines 2356 and 2357
Page 1 of 2
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Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 2050
Ì9613922Î961392
13 insert:
14 slot machine licenses authorized under state law and
Page 2 of 2
4/5/2011 8:04:44 AM 577-03828-11
Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 2050
Ì877056=Î877056
LEGISLATIVE ACTION
Senate . House
.
.
.
.
.
The Committee on Commerce and Tourism (Gaetz) recommended the
following:
1 Senate Amendment to Amendment (609550) (with title
2 amendment)
3
4 Between lines 2116 and 2117
5 insert:
6 Section 39. Effective July 1, 2013, all powers, duties,
7 functions, records, personnel, property, and unexpended balances
8 of appropriations, allocations, or other funds for the
9 administration of chapter 551, Florida Statutes, are transferred
10 intact by a type two transfer, as defined in s. 20.06(2),
11 Florida Statutes, from the Division of Pari-Mutuel Wagering of
12 the Department of Business and Professional Regulation to the
Page 1 of 2
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Florida Senate - 2011 COMMITTEE AMENDMENT
Bill No. SB 2050
Ì877056=Î877056
13 Destination Resort Commission.
14 Section 40. If any provision of this act or its application
15 to any person or circumstance is held invalid, the invalidity
16 does not affect other provisions or applications of this act
17 which can be given effect without the invalid provision or
18 application, and to this end the provisions of this act are
19 severable.
20
21 ================= T I T L E A M E N D M E N T ================
22 And the title is amended as follows:
23 Delete line 2360
24 and insert:
25 act; transferring all powers, duties, functions,
26 records, personnel, property, and unexpended balances
27 of appropriations, allocations, or other funds for the
28 administration of ch. 551, F.S., intact by a type two
29 transfer from the Division of Pari-Mutuel Wagering of
30 the Department of Business and Professional Regulation
31 to the Destination Resort Commission; providing for
32 severability; providing an effective date.
Page 2 of 2
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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 Commerce and Tourism Committee
BILL: SB 2050
INTRODUCER: Senator Braynon
SUBJECT: Destination Resorts
DATE: April 4, 2011 REVISED:
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Pugh Cooper CM Pre-meeting
2. GO
3. BC
4.
5.
6.
I. Summary:
SB 2050 creates the seven-member Destination Resort Commission (commission), with the
principal responsibility to license and regulate no more than five destination resorts that would
offer limited gaming, such as baccarat, twenty-one, poker, craps, slot machines, video gaming of
chance, and roulette wheels.
Licenses would be awarded through an invitation-to-negotiate process. The commission is not
required to award five licenses. The bill establishes a $1 million application fee, a $50 million
initial license fee, and a $2 million annual license fee.
The bill also provides a graduated gross receipts tax rate that would be based upon the
infrastructure investment in each resort. The tax rate ranges from 10 percent for investments of
$2.5 billion or more, 15 percent for investments of between $1 billion to $2.5 billion, and 20
percent for investments under $1 billion. The commission would receive $5 million of these
revenues to pay its operations; the rest would be allocated among the General Revenue Fund,
Visit Florida’s tourism marketing campaign, school readiness programs, and transportation for
the disadvantaged.
The bill specifies a number of requirements for applicants, including that they plan to train and
hire Florida residents.
SB 2050 amends ss. 20.21, 120.80, 849.231, and 849.25, F.S.; and creates several unnumbered
sections of law.
BILL: SB 2050 Page 2
II. Present Situation:
Overview of Florida Gaming Laws and Regulations
In general, gambling is illegal in Florida.1 Chapter 849, F.S., governs the conduct of gambling in
Florida. Section 849.15, F.S., prohibits the manufacture, sale, lease, play, or possession of slot
machines2 in Florida. Section 849.15(2), F.S., provides an exemption to the transportation of slot
machines for the facilities that are authorized to conduct slot machine gaming under ch. 551, F.S.
Florida’s gambling prohibition includes prohibitions against keeping a gambling house,3 and
running a lottery.4 Section 7, Art. X, of the Florida Constitution, prohibits lotteries, other than
pari-mutuel pools authorized by law on the effective date of the Florida Constitution, from being
conducted in Florida by private citizens.5
Gaming is permitted at licensed pari-mutuel wagering tracks and frontons,6 by the state operated
lottery,7 which must operate “so as to maximize revenues in a manner consonant with the dignity
of the state and the welfare of its citizens,”8 and by the Seminole Indian tribe.
Pari-mutuel wagering and Cardrooms
The pari-mutuel industry in Florida is made up of greyhound racing, different types of
horseracing, and jai alai.9 The regulation of the pari-mutuel industry is governed by ch. 550, F.S.,
and is administered by the Division of Pari-Mutuel Wagering (division) within the Department
of Business and Professional Regulation (department). Chapter 550, F.S., provides specific
licensing requirements, taxation provisions, and regulations for the conduct of the industry.
Pari-mutuel facilities within the state are allowed to operate poker card rooms under s. 849.086,
F.S. No-limit poker games are permitted.10 The cardrooms may operate 18 hours per day on
Monday through Friday and for 24 hours per day on Saturday and Sunday. The games are played
in a non-banking matter, i.e., the house 11 has no stake in the outcome of the game. Such activity
is regulated by the department and must be approved by an ordinance of the county commission
where the pari-mutuel facility is located. Each cardroom operator must pay a tax of 10 percent of
the cardroom operation’s monthly gross receipts.12
1
Section 849.08, F.S.
2
Section 849.16, F.S., defines slot machines for purposes of ch. 849, F.S.
3
Section 849.01, F.S.
4
Section 849.09, F.S.
5
The pari-mutuel pools that were authorized by law on the effective date of the Florida Constitution, as revised in 1968,
include horseracing, greyhound racing, and jai alai games. The revision was ratified by the electorate on November 5, 1968.
6
See ch. 550, F.S., for the regulation of pari-mutuel activities.
7
The Department of the Lottery is authorized by s. 15, Art. X, Florida Constitution. Chapter 24, F.S., was enacted by ch. 87-
65, L.O.F., to establish the state lottery. Section 24.102, F.S., provides the legislative purpose and intent in regard to the
lottery.
8
See s. 24.104, F.S.
9
“Jai alai” or “pelota” means a ball game of Spanish origin played on a court with three walls. See s. 550.002(18), F.S.
10
Section 849.086(8)(b), F.S. Prior to the effective date of ch. 2010-29, L.O.F., the maximum bet was $5.
11
Section 849.086(2)(j), F.S., defines “house” as “the cardroom operator and all employees of the cardroom operator.
12
Section 849.086(13)(a), F.S.
BILL: SB 2050 Page 3
Slot Machine Gaming
Slot machine13 gaming at licensed pari-mutuels is governed by ch. 551, F.S. Pari-mutuel
facilities that operate slot machine gaming or engage in other casino-style gaming are generally
known as “racinos.” During the 2004 General Election, the electors approved Amendment 4 to
the state constitution, codified as s. 23, Art. X, Florida Constitution, which authorized slot
machines at existing pari-mutuel facilities in Miami-Dade and Broward counties upon an
affirmative vote of the electors in those counties. Currently, there are five pari-mutuels in those
counties conducting slot machine gaming.
Slot machine licensees are required to pay a license fee of $2.5 million for fiscal year 2010-2011.
The annual slot machine license fee is reduced in fiscal year 2011-2012 to $2 million.14 In
addition to the license fees, the tax rate on slot machine revenues at each facility is 35 percent. 15
Seminole Indian Compact
On April 7, 2010, the Governor and the Seminole Tribe of Florida (Tribe) executed a tribal-state
compact under the Indian Gaming Regulatory Act of 198816 that authorizes the Tribe to conduct
Class III gaming17 at seven tribal facilities throughout the state. The compact was subsequently
ratified by the Legislature.18
The compact has a 20-year term. It permits the Tribe to offer slot machines, raffles and drawings,
and any other new game authorized for any person for any purpose, at all seven of its tribal
casinos.19
13
Section 551.102(8), F.S., defines “slot machine” as the term is used in ch. 551, F.S., for the regulation of slot machine
gaming at the qualifying Miami-Dade and Broward county pari-mutuels.
14
Chapter 551.106(1), F.S. Prior to the effective date of 2010-29, L.O.F., the license fee was $3 million.
15
Chapter 551.106(1), F.S. Prior to the effective date of 2010-29, L.O.F., the tax rate was 50 percent.
16
The Indian Gaming Regulatory Act of 1988 or “IGRA,” Pub. L. 100-497, 102 Stat. 2467, codified at 18 U.S.C. ss. 1166-
1168 and 25 U.S.C. s. 2701 et seq.
17
The Indian Gaming Regulatory Act of 1988 divides gaming into three classes:
“Class I gaming” means social games for minimal value or traditional forms of Indian gaming engaged in by
individuals for tribal ceremonies or celebrations.
“Class II gaming” includes bingo and pull-tabs, lotto, punch boards, tip jars, instant bingo, and other games similar
to bingo. Class II gaming may also include certain non-banked card games if permitted by state law or not explicitly
prohibited by the laws of the state but the card games must be played in conformity with the laws of the state. A
tribe may conduct Class II gaming if:
o the state in which the tribe is located permits such gaming for any purpose by any person, organization or entity;
and
o the governing body of the tribe adopts a gaming ordinance which is approved by the Chairman of the National
Indian Gaming Commission.
“Class III gaming” includes all forms of gaming that are not Class I or Class II, such as house-banked card games,
casino games such as craps and roulette, electronic or electromechanical facsimiles of games of chance, slot
machines, and pari-mutuel wagering.
18
Chapter 2010-29, L.O.F.
19
Gaming Compact Between the Seminole Tribe of Florida and the State of Florida, approved by the U.S. Department of the
Interior effective July 6, 2010, 75 Fed. Reg. 38833. (hereinafter Gaming Compact) The Tribe has three gaming facilities
located in Broward County (The Seminole Indian Casinos at Coconut Creek and Hollywood, and the Seminole Hard Rock
Hotel & Casino-Hollywood), and gaming facilities in Collier County (Seminole Indian Casino-Immokalee), Glades County
(Seminole Indian Casino-Brighton), Hendry County (Seminole Indian Casino-Big Cypress), and Hillsborough County
(Seminole Hard Rock Hotel & Casino-Tampa).
BILL: SB 2050 Page 4
The compact permits the Tribe to conduct banked card games, including blackjack, chemin de
fer, and baccarat, but the play of the banked card games is not allowed at the casinos at the
Brighton or Big Cypress facilities. If these banked games are authorized for any other person for
any other purpose, except if banked card games are authorized by a compact with the
Miccosukee Indians, the Tribe would be authorized to offer banked cards at all seven of its
facilities. The authority for banked card games terminates at the end of 5 years unless
affirmatively extended by the Legislature or the Legislature authorizes any other person to offer
banked card games.
In exchange for the Tribe’s exclusive right to conduct slot machine gaming outside of Miami-
Dade and Broward counties and the exclusive right to offer banked card games at the specified
facilities (these grants of authority are known as the “exclusivity provision”), the compact
provides for revenue sharing payments by the Tribe to the state as follows:
During the initial period (first 24 months), the Tribe is required to pay $12.5 million per
month ($150 million per year);
After the initial period, the Tribe’s guaranteed minimum revenue sharing payment is
$233 million for year 3, $233 million for year 4, and $234 million for year 5;
After the initial period, the Tribe pays the greater of the guaranteed minimum or
payments based on a variable percentage of annual net win20 that range from 12 percent
of net win up to $2 billion, to 25 percent of the amount of any net win greater than $4.5
billion;
After the first 5 years, the Tribe will continue to make payments to the state based on the
percentage of net win without a guaranteed minimum payment; and
If the Legislature does not extend the authorization for banked card games after the first 5
years, the net win calculations would exclude the net win from the Tribe’s facilities in
Broward County.
The compact provides for the expansion of gaming in Miami-Dade and Broward counties under
the following limited circumstances:
If new forms of Class III gaming and casino-style gaming are authorized for the eight
licensed pari-mutuels located in Miami-Dade and Broward counties and if the net win
from the Tribe’s Broward facilities drops for the year after the new gaming begins, then
the Tribe may reduce the payments from its Broward facilities by 50 percent of the
amount of the reduction in net win.
If new forms of Class III gaming and other casino-style gaming are authorized for other
locations in Miami-Dade and Broward counties, then the Tribe may exclude the net win
from their Broward facilities from their net win calculations when the new games begin
to be played.
If new games are authorized to any location in Miami-Dade and Broward counties within
the first 5 years of the Compact, the guaranteed minimum payment would no longer
apply to the Tribe’s revenue sharing payments and the $1 billion guarantee would not be
in effect. The Tribes payments would be based on the applicable percentage of net win.
20
The compact defines “net win” as “the total receipts from the play of all Covered Games less all prize payouts and free
play or promotional credits issued by the Tribe.”
BILL: SB 2050 Page 5
Revenue sharing payments cease if:
The state authorizes new forms of Class III gaming or other casino-style gaming after
February 1, 2010, or authorizes Class III gaming or other casino-style gaming at any
location that was not authorized for such games before February 1, 2010; and
The new gaming begins to be offered for private or public use.
Economic Impact of Casino-Oriented Destination Resorts
Thirteen states now have commercial casino operations, excluding those managed by Indian
Tribes or at racetracks, and Massachusetts, Texas, New York, and Rhode Island are considering
legislation this year to legalize casino gambling.21 Data on how many casinos are stand-alone
operations and how many are “destination resorts”22 is not readily available.
In the most recent numbers available, the American Gaming Association reported in 200823 that
the commercial casino industry employed more than 375,000 people earning more than $13
billion in total wages. The report also described casinos as significant contributors to the nation’s
economy, with gross gaming revenues totaling more than $32.5 billion in 2008.
Casinos have direct economic impacts on the local and state level. For example, a 2008
economic development impact study on the Chumash Casino Resort in Santa Barbara, Calif.,24
indicated that the casino:
Created 1,587 direct jobs and an additional 703 indirect jobs in the county;
Generated more than $350 million in sales in the county, and specifically that every $10
in sales at the casino generated $4 in additional sales in the community; and
Tourism received a major boost when the casino opened in 2004.
The American Gaming Association maintains a database of pertinent economic data25 on the 13
states that have commercial casinos and the 12 states, including Florida, with racetrack casinos
(nicknamed “racinos”). The two states with commercial casinos closest to Florida – Mississippi
and Louisiana – in 2009 reported significant revenues from gaming operations:
Mississippi reported at its 30 commercial casinos:
o Number of casino employees totaled 25,739;
o Casino employee wages were $855.25 million (including tips and benefits);
o Gross casino gaming revenue was $2.465 billion; and
o The state’s gaming tax revenue was $296.34 million.
Louisiana reported at its 14 commercial casinos:
21
Interim Report 2011-133: Review of Expansion of Casino Gaming in Other States. Prepared by Senate Committee on
Regulated Industries. Published in October 2010. Available at
http://archive.flsenate.gov/data/Publications/2011/Senate/reports/interim_reports/pdf/2011-133ri.pdf.
22
“Destination resorts” or “destination resort casinos” are generally defined as mega-centers that feature shopping,
conference facilities, restaurants, and live entertainment in addition to casino gaming. Most new casinos are being built in
this format.
23
http://www.americangaming.org/Industry/factsheets/general_info_detail.cfv?id=39.
24
Economic Impact of the Chumash Casino Resort on the County of Santa Barbara, prepared by The California Economic
Forecast for the Santa Barbara County taxpayers Association. Published February 2008. Available at:
http://www.sbcta.org/Final_Report__Chumash.pdf . Last visited March 19, 2011.
25
The American Gaming Association has a complete list of what types of gaming operations are in each state, economic
development data, and how each state uses its share of the revenues generated. The latest data is from 2009. See:
http://www.americangaming.org/Industry/state/statistics.cfm.
BILL: SB 2050 Page 6
o Number of casino employees totaled 17,610;
o Casino employee wages were $602.51 million;
o Gross casino gaming revenue was $2.456 billion; and
o The state’s gaming tax revenue was $598.14 million.
The database does not calculate indirect and induced economic benefits from casino operations.
Destination resorts are also popular internationally among tourists.26 What is purported to be the
largest destination resort east of Las Vegas is under construction in the Bahamas.27 The new
Baha Mar resort is expected to contribute an additional 10 percent growth in the Bahamian GDP
by creating 12,000 jobs paying in the aggregate more than $305 million in annual wages.
According to projections, Baha Mar will help raise the average annual income for a Bahamian
family from $29,000 to $33,500, and in its first year of operations will contribute almost $1
billion to the local economy.
Tourism and Convention Space
According to preliminary estimates28 by Visit Florida, an estimated 82.6 million visitors came to
Florida in 2010, an increase of 2.1 percent over 2009 figures.29 For the second half of 2010,
direct travel-related employment in Florida increased by 1.8 percent, with more than 15,000
additional jobs in the fourth quarter alone. Domestic visitation to Florida increased by 0.5
percent in 2010, when compared to 2009. During the same period, Canadian travel to Florida
increased by 16.2 percent and the overseas market to Florida increased by 13.6 percent. Primary
data collected at Florida’s 14 major airports in 2010 reflects a 3.5-percent increase in total
enplanements from 2009.30
Preliminary estimates of visitors to Florida for the fourth quarter of 2010 show an estimated 20.8
million people visited the Sunshine State. This reflects an increase of 5.1 percent from the same
period in 2009. Visit Florida also reported that an estimated 18.0 million domestic visitors came
to Florida during the fourth quarter of 2010, a 4.1 percent increase over 2009. During the same
period, Canadian travel to Florida increased by 5.7 percent and the overseas market to Florida
increased by 13.5 percent. Primary data collected at Florida’s 14 major airports shows a 7.8
percent increase in total enplanements to Florida for the fourth quarter of 2010 over the same
period in 2009.31
The following information regarding convention space was obtained from select areas around the
state:
In Orlando, the Gaylord Orlando Hotel has 400,000 square feet of meeting and
convention space and 1,406 hotel rooms and suites;32 the Peabody Orlando has 300,000
26
An example of websites advertising international casinos and destination resorts is http://www.worldcasinodirectory.com.
Last visited March 19, 2011.
27
Information posted at http://starglobaltribune.com/2011/destination-resorts-a-new-generation-of-tourists-destinations-
opened-5954. Last visited March 8, 2011.
28
Preliminary estimates are issued 45 days after the end of each calendar quarter. Final estimates are released when final data
are received for all estimates in the report.
29
See http://media.visitflorida.org/news/news.php?id=169, (last visited March 19, 2011).
30
Id.
31
Id.
32
See http://www.gaylordhotels.com/palms-home.html?intcmp=gp-pl=topnav-ref=home.
BILL: SB 2050 Page 7
square feet of meeting and convention space; the Orlando World Marriott has 450,000
square feet of meeting and convention space and 2,000 hotel rooms and suites;33 and the
Walt Disney World Resort has more than 600,000 square feet of space.
The Orange County Convention Center in Orlando has 2.1 million square feet of exhibit
space.
The Tampa Convention Center has 200,000 square feet of exhibit space and 42,000
square feet of meeting space.
Jacksonville Convention Center has 78,500 square feet of exhibit space and 48,750
square feet of meeting space.
The Miami Convention Center has 28,000 square feet of exhibit space, an additional 34
meeting rooms, a 444- seat and a 5,000-seat auditorium, and a 117-seat lecture hall.
Executive Branch Structure
Article IV of the Florida Constitution, limits executive departments to 25 in number, excluding
those authorized or created in that document. There are five constitutionally created or
authorized departmental entities: State Board of Administration; Department of Veterans’
Affairs; Florida Fish & Wildlife Conservation Commission; Department of Elderly Affairs;
Board of Governors; and the Parole Commission.
There are 21 departments authorized by statute: Department of State; Department of Legal
Affairs; Department of Financial Services; Department of Agriculture and Consumer Services;
Department of Education; Department of Business and Professional Regulation, Department of
Community Affairs; Department of Children & Family Services; Florida Department of Law
Enforcement; Department of Revenue; Department of Management Services; Department of
Transportation; Department of Highway Safety and Motor Vehicles; Department of
Environmental Protection; Department of Military Affairs; Department of Citrus; Department of
Corrections; Department of Juvenile Justice; Department of the Lottery; Agency for Health Care
Administration; and the Department of Health.
The Executive Office of the Governor may be considered the functional equivalent of a
department.
In summary, there appears to be 22 state entities that are executive departments, so Florida has
three available slots for any new agencies the Legislature may in the future consider creating.
III. Effect of Proposed Changes:
SB 2050 creates several undesignated sections of law and amends four sections of existing law to
establish the Destination Resort Commission (commission), which will select and regulate any
destination resort operations that open in Florida.
Section 1: Amends s. 20.21, F.S., to create the commission within the Department of Revenue
(DOR).
33
See http://www.marriottworldcenter.com/.
BILL: SB 2050 Page 8
Section 2: Amends s. 120.80, F.S., to exempt the commission from certain provisions of the
Florida Administrative Procedures Act, in ch. 120, F.S., specifically:
The notice and hearing requirements of ss. 120.569 and 120.57(1)9a), F.S., for
proceedings related to the issuance, denial, renewal, or amendment of a destination resort
license;
The process and deadlines in s. 120.60, F.S., for granting licenses does not apply to
applications for a destination resort license; and
The process for petitioning for, or granting, a waiver or variance, or granting a waiver or
variance, pursuant to s. 120.542, F.S.
Section 3: Specifies that sections 4-35 of SB 2050 may be cited as the “Destination Resort Act”
or “Resort Act.”
Section 4: Creates definitions for 27 terms used in this act. Key definitions are:
Destination resort or resort means a freestanding, land-based structure in which limited
gaming may be conducted. A destination resort is a mixed-use development consisting of
a combination of various tourism amenities and facilities, including, but not limited to,
hotels, villas, restaurants, limited gaming facilities, convention facilities, attractions,
entertainment facilities, service centers, and shopping centers.
Gross receipts means the total of cash or cash equivalents received or retained as
winnings by a resort licensee and the compensation received for conducting any game in
which the resort licensee is not party to a wager, less any cash taken in fraudulent acts
perpetrated against the resort licensee for which the resort licensee is not reimbursed.
The term does not include tokens, foreign currency that cannot be converted into U.S.
currency, promotional credits or “free plays,” or the amount of extended credit until
collected from the customer.
Licensee means, as the context requires, a resort licensee, supplier licensee, or
occupational licensee.
Limited gaming, game, or gaming means the games authorized pursuant to the Resort Act
in a limited gaming facility, including, but not limited to, those commonly known as
baccarat, twenty-one, poker, craps, slot machines, video gaming of chance, roulette
wheels, Klondike tables, punch-board, faro layout, numbers ticket, push car, jar ticket,
pull tab, or their common variants, or any other game of chance or wagering device that
is authorized by the commission.
Qualifier means an affiliate, affiliated company, officer, director, or managerial employee
of an applicant for a resort license, or a person who holds a direct or indirect equity
interest in the applicant. The term may include an institutional investor. As used in this
subsection, the terms “affiliate,” “affiliated company,” and “a person who holds a direct
or indirect equity interest in the applicant” do not include a partnership, a joint venture
relationship, a shareholder of a corporation, a member of a limited liability company, or a
partner in a limited liability partnership that has a direct or indirect equity interest in the
applicant for a resort license of 5 percent or less and is not involved in the gaming
operations as defined by the rules of the commission.
Section 5: Creates the Destination Resort Commission and specifies its governance. This
section specifies that the commission is created in DOR for administrative purposes only, and it
BILL: SB 2050 Page 9
is a separate budget entity not subject to control, supervision, or direction by DOR in any
manner.
The commission is exempt from the provisions of s. 20.052, F.S., which creates a public-purpose
evaluation of all advisory councils, boards and commissions before they are statutorily created.
The commission will consist of seven full-time members:
Three appointed by the Governor and confirmed by the Senate in the legislative session
following the appointments;
Two appointed by the President of the Senate; and
Two appointed by the Speaker of the House of Representatives.
For the initial appointments, the Governor’s appointees shall serve 2-year terms and the other
appointees shall serve 4-year terms; thereafter, all appointees shall serve 4-year terms. Terms
expire on June 30 of the applicable year. Any commissioner whose term has expired shall
continue serving until a replacement is appointed. Vacancies are filled in the same manner as
initial appointments.
SB 2050 specifies that the commissioners must be Florida residents and experienced in corporate
finance, tourism, convention and resort management, gaming, investigation or law enforcement,
business law, or related legal experience, except that:
One member of the commission must be a Florida-licensed certified public accountant
with at least 5 years of experience in general accounting; and
One member must have experience in the fields of investigation or law enforcement.
A quorum consists of 4 members.
The bill prohibits the appointment to the commission of:
Elected officials;
Persons with a direct or indirect financial interest in applicants for a resort license or
resort licensees;
Persons who are related within the “second degree of consanguinity”34 or affinity to any
person licensed by the commission; and
Persons who have been indicted for, convicted of, pled guilty or nolo contendere to, or
forfeited bail for any felony or misdemeanor crime involving gambling or fraud, in any
of the 50 states, within the 10 years preceding their appointment.
The Governor will appoint one member of the commission to serve as the chair. The chair will
be the administrative head of the commission and would be responsible for setting the agenda for
commission meetings and approving all notices, vouchers, subpoenas, and reports required by
the act. The bill also provides for a vice chair to be elected by his or her fellow members during
the commission’s first meeting.
Other governance issues include:
The commission headquarters will be in Tallahassee;
34
Legally defined as grandparents, siblings, grandchildren, aunts and uncles, nieces and nephews, and first cousins.
BILL: SB 2050 Page 10
The initial meeting of the commission must be held by October 1, 2011;
The commission must meet at least monthly;
The chair or 4 commissioners can call a meeting, upon 72 hours’ notice; and
The commission in toto sits as the agency head for purposes of ch. 120, F.S., except that
the commission’s executive director is the agency head for purposes of final agency
action under ch. 120, F.S., for all regulatory issues delegated to the executive director.
Section 6: Specifies the commission’s powers and duties. The commission will have jurisdiction
over and shall supervise all destination resort gaming activity governed by this act, including the
power to:
Authorize limited gaming at five destination resorts;
Conduct investigations as necessary to fulfill its responsibilities;
Use an invitation-to-negotiate process for applicants based on minimum requirements
established by this legislation;
Investigate each applicant for a resort license and determine eligibility, among competing
applicants, based on which ones best serve the interest of the residents of Florida based
on the:
o Potential for economic development presented by the applicant’s proposed
investment in infrastructure, such as hotels and other nongaming entertainment
facilities; and the
o Applicant’s ability to maximize revenue for the state.
Grant licenses;
Establish and collect fees for conducting background checks on all applicants for licenses
and persons who are contracted to perform services at the resorts;
Issue subpoenas;
Require a person to file a statement in writing and under oath in response to the
commission’s investigation;
Keep accurate and complete records of its proceedings;
Apply to the courts for injunctive relief to enforce the act and any rules adopted by the
commission;
Establish field offices, as necessary; and
Suspend or revoke the license of any person found to no longer be qualified. The
commission also can deny, revoke, suspend, or place conditions on a licensee who
violates any provision of the act, a rule adopted by the commission, or an order of the
commission.
Additionally, the commission, the Florida Department of Law Enforcement (FDLE), and local
law enforcement agencies have unrestricted access to inspect resort facilities and gaming devices
at all times, and share concurrent authority to investigate criminal violations of this act and any
other criminal activity that may be occurring at a resort.
Section 7: The commission is authorized to adopt all rules necessary, including emergency
rules, to implement, administer, and regulate limited gaming. The bill provides a listing of
specific areas in which the commission is authorized to adopt rules, these include the types of
games, the time and place for the gaming, and the structures where limited gaming is authorized.
The commission also can establish procedures to scientifically test slot machines and other
BILL: SB 2050 Page 11
authorized gaming equipment. The commission can adopt any rule necessary to accomplish the
purposes of the act.
Section 8: The commission is authorized to employ sworn law enforcement officers, who must
have arrest authority pursuant to s. 901.15, F.S., have full law enforcement powers, and be
certified under s. 943.1395, F.S.
Section 9: The commission is authorized to appoint (and remove) a full-time executive director,
who will perform all the duties assigned him by the commission, and employee staff and
consultants as necessary.
This section also specifies the types of people who may not be hired, depending on their previous
3 years’ work history.
Section 10: The commission must adopt a comprehensive code of ethics for its members and
staff to follow. Generally, the code of ethics will prohibit commissioners, the executive director,
and employees from having a direct or indirect financial interest in the entities they will regulate.
It would also prohibit engaging in political activity, including using one’s official position to
influence the result of an election. Also, employees or agents of the commission will be
prohibited from engaging in outside employment related to the activities or persons regulated by
the commission, until 5 years after leaving employment or membership on the commission.
Section 11: The commissioners, the executive director, and each managerial employee must file
annual financial disclosures. The bill also specifies the circumstances in which commissioners
and staff must immediately file disclosures, including matters related to criminal arrests,
negotiations for an interest in a licensee or applicant, and negotiations for employment with a
licensee or applicant. These persons are also prohibited from engaging in activities that may
constitute a conflict of interest; accepting gifts from licensees, applicants, or entities otherwise
affiliated with licensees or applicants; and report any attempted bribes.
Section 12: Commissioners, licensees, applicants, or any affiliate or representative of an
applicant or licensee are prohibited from engaging directly or indirectly in an ex parte
communication with a member of the commission concerning a pending application, license, or
enforcement action or concerning a matter that likely will be pending before the commission.
Any ex parte communication must immediately be reported in writing to the chair and placed on
the record. Persons who make the ex parte communication must submit to the commission a
written description of the communication which identifies the commissioner who received the
communication. A commissioner who fails to disclose an ex parte communication with 10 days
of the communication is subject to removal from office and a civil penalty not to exceed $5,000.
Any such violation will be investigated by the Commission on Ethics.
Section 13: A violation of the act by a commissioner may result in disqualification or constitute
cause for removal by the Governor. The Governor may impose other disciplinary action as
determined by the commissioner. Violations by employees may result in termination of
employment. If the violation involves an unintentional financial interest in a licensee or
BILL: SB 2050 Page 12
applicant, the person would not have violated the act if they divested their financial interest with
30 days after the interest was acquired.
Section 14: The regulation of gaming at destination resorts is pre-empted to the state, and no
local government may enact any ordinance attempting to regulate such activities.
Section 15: SB 2050 establishes a detailed process for awarding destination resort licenses.
Licenses will be awarded through an invitation-to-negotiate (invitation) process in which
applicants reply on forms provided by the commission in response to the invitation to bid. The
commission may stagger its issuance of the invitations, although replies to the invitation to bid
must be received by the commission within 6 months of the date the invitations were issued.
After reviewing the replies to the invitation, the commission may select one or more replies and
commence negotiations after determining which replies are in the best interest of the state based
on the selection criteria. The commission must award a resort license within 12 months after the
deadline for submission of the applications. The commission may not award more than five
licenses statewide.
Section 16: SB 2050 specifies a number of minimum criteria the commission must use when
evaluating resort license applications. Key criteria include:
The applicant for a resort license must demonstrate that the resort will:
o Increase tourism;
o Generate jobs;
o Provide revenue to the local economy; and
o Provide revenue to the General Revenue Fund.
Additionally, the applicant must demonstrate:
o A history of, or a bona fide plan for, community involvement or investment in the
community where the resort having a limited gaming facility will be located;
o The financial ability to purchase and maintain an adequate surety bond;
o Adequate capitalization to develop, construct, maintain, and operate the proposed
resort and convention center in accordance with the act; and
o The ability to implement a program to train and employ residents of this state for
jobs that will be available at the destination resort, including its ability to
implement a program for the training of low-income persons.
The aesthetic appearance of the proposed resort, if the commission chooses to make this a
consideration.
The applicant must demonstrate how it will comply with state and federal affirmative
action guidelines.
The applicant must demonstrate the ability to generate substantial gross receipts.
This section of the bill also specifies that resort licenses will be issued “only to persons of good
moral character who are at least 21 years of age.
A resort license will not be issued to any applicant, if such applicant, a qualifier, or an
institutional investor:
Has, within the last 10 years, filed for protection under the Federal Bankruptcy Code or
had an involuntary bankruptcy petition filed against the applicant;
BILL: SB 2050 Page 13
Has, within the last 5 years, been adjudicated by a court or tribunal for failure to pay
income, sales, or gross receipts tax due and payable under any federal, state, or local law,
after exhaustion of all appeals or administrative remedies;
Has been convicted of a felony under the laws of any state or the United States;
Has been convicted of any violation under ch. 817, F.S., related to fraudulent practices, or
under a substantially similar law of another jurisdiction;
Knowingly submitted false information in the application for the license;
Is a member or employee of the commission;
Was licensed to own or operate gaming or pari-mutuel facilities in this state or another
jurisdiction and that license was revoked; or
Fails to meet any other criteria for licensure set forth in the Resort Act.
In this context, the “conviction” includes an adjudication of guilt on a plea of guilty or nolo
contendere or the forfeiture of a bond when charged with a crime.
Section 17: SB 2050 specifies the information that must be included in the application. The
application must be sworn. Key required information includes:
A description of the proposed resort, including a description of the anticipated economic
benefit to the community, number of employees, a projection of attendance at the resort,
a projection of gross receipts, and other information;
The time-frame for completing the resort;
A plan for training Floridians for jobs at the resort;
Identifying information about the applicant and all qualifiers, except those persons who
specifically do not have to be identified, such as anyone with less than 5 percent interest
in the resort project;
Identification of elected officials, their spouses, and their children who, directly or
indirectly, have any type of financial relationship with the applicant; and
Fingerprints of the applicant, officers, qualifiers, and any person who will be responsible
for operational controls.
The commission, however, is the sole arbiter on what information should be included in the
application. It also may order criminal history checks based on the fingerprint data received with
the application.
The applicant has a responsibility to file a supplemental report to the application if there is any
material change in any circumstance relevant to the commission’s review of the proposal.
Each application must be submitted along with a $1 million non-refundable application fee to
defray the commission’s costs of reviewing it. Additionally, a one-time licensing fee of $50
million must be submitted along with the application, but this fee is refundable to the applicant
within 30 days if the commission denies the application. If the applicant withdraws, the
commission only has to refund 80 percent of the licensing fee, also within 30 days.
Section 18: An incomplete application is grounds for denial of an application, under SB 2050.
However, if the commission determines that an application is incomplete, the applicant may
request an informal conference with the executive director or his designee. The executive
BILL: SB 2050 Page 14
director may grant a 30-day extension to complete an application. If the executive director still
finds the application incomplete, the applicant may appeal to the commission – at which point,
the issuance of licenses is stayed until the commission rules on the appeal.
Section 19: Provides a limited application process for institutional investors, generally defined
as pension funds, public retirement funds, insurance companies, financial institutions, or trusts
that hold less than 5 percent of the equity securities or 5 percent of the debt securities of an
applicant or affiliate of the applicant, and are a publicly traded corporation. Institutional
investors also must file a certified statement that they do not intend to influence or affect the
affairs of the applicant or its affiliate, and that the securities of the applicant or affiliate that it
holds were purchased for investment purposes only. The commission may require that an
institutional investor must be treated as a qualifier if it finds that such investor is in a position to
exercise a substantial impact upon the controlling interests of a licensee.
Section 20: The bill also exempts lenders and underwriters as qualifiers, meaning they are not
required to be licensed.
Section 21: SB 2050 establishes several conditions for obtaining a new or renewed resort
license. The key conditions require that the licensee:
Comply with the Resort Act and rules of the commission;
Allow the commission and FDLE unlimited access to and the right of inspection for the
areas of the resort where limited gaming activities occur;
Complete the resort in accordance with the plans and timeframe submitted to the
commission in the proposal, unless a waiver has been granted;
Ensure that the facilities-based computer system is operational and that all accounting
functions are structured to facilitate regulatory oversight, which shall require the systems
to provide for real-time information to the commission and FDLE;
Ensure that each game, machine, or device is protected from tampering or manipulation;
Submit and comply at all times with a detailed security plan;
Create and file with the commission a written policy for:
o Creating opportunities to purchase from vendors from this state, including
minority vendors;
o Creating opportunities for employment of residents of this state, including
minority residents;
o Ensuring opportunities for hiring construction services from minority contractors;
o Ensuring opportunities for employment are on an equal, nondiscriminatory basis;
o Training employees on responsible gaming and work with a compulsive or
addictive gambling prevention program;
o Implementing a drug-testing program;
o Using the Internet-based job-listing system of the Agency for Workforce
Innovation in advertising employment opportunities; and
o Ensuring that each slot machine pays out at least 85 percent.
In addition, the resort must keep and maintain permanent daily records of its gaming operations
for not less than 5 years.
BILL: SB 2050 Page 15
Section 22: Each destination resort licensee is required to maintain a surety bond, at its own cost
and expense. The penal sum35 of the bond is to be determined by the commission and payable to
the Governor. The commission shall set the bond at the total amount of the estimated license fees
and taxes estimated to become due for the resort. In lieu of a bond, a licensee may instead pay a
like amount of funds to the commission.
Section 23: Limited gaming may be conducted at a licensed resort, but only within a designated
area of the resort as approved by the commission. Limited gaming activities may not begin until
the resort is completed in accordance with the plans submitted to the commission. The resort
licensee may only accept wagers from persons at least 21 years of age who are present in the
facility, and may set the amount of wagers. The facility may not accept wagers using money,
except for slot machine gaming. Further, the gaming facility may be open 24 hours per day, 365
days per year.
Section 24: On each anniversary date of receipt of its resort license, the licensee must pay the
commission a $2 million license fee. The license fee shall be deposited in the Destination Resort
Trust Fund to be used by the commission and FDLE for investigations, regulation of resorts, and
enforcement.
In addition, each resort licensee is required to pay a gross receipts tax on the gross receipts for
limited gaming activities at the resort. Once the resort is complete, the licensee must submit all
information, as required by the commission, to determine the infrastructure investment and to set
the tax rate for the resort.
The gross receipts tax rate is calculated this way:
If the total infrastructure investment is $2.5 billion or more, the gross receipts tax rate is
10 percent;
If the total infrastructure investment is at least $1 billion but less than $2.5 billion, the
gross receipts tax is 15 percent; and
If the total infrastructure investment is less than $1 billion, the gross receipts tax is 20
percent.
Proceeds of the gross receipts tax will be deposited in the Destination Resort Trust Fund and
shall be used to fund the commission’s operating costs, pursuant to legislative appropriation.
On June 30 of each year, all unappropriated revenues in excess of $5 million must be deposited
as follows:
95 percent of the money in the fund is deposited to the General Revenue Fund;
2.5 percent is deposited in the Tourism Promotional Trust Fund for use by the Florida
Commission on Tourism;
1.25 percent is deposited into the Employment Security Administration Trust Fund for
use by the school readiness program; and
1.25 percent is deposited into the Transportation Disadvantaged Trust Fund for use by the
Transportation Disadvantaged Commission, which oversees locally run programs to
provide transportation services to the disabled, elderly, and underprivileged.
35
“Penal sum” is the stated limit of the bond which, in turn, is the limit of the insurer's liability under the bond.
BILL: SB 2050 Page 16
Section 25: SB 2050 requires that FDLE implement the fingerprint requirements, and shall
submit the results to the commission. The costs of the fingerprinting and background check shall
be borne by the applicant.
Additionally, all the fingerprints must be entered into the statewide database, as authorized in s.
943.05(2)(b), F.S., and available for all specified purposes. The fingerprints also may be
forwarded to the FBI.
Any applicant who is fingerprinted and who has been convicted or pleaded guilty or nolo
contendere to a disqualifying offense must notify the commission within 48 hours.
Section 26: Each resort licensee is required to train employees on responsible gaming and to
work with a program on responsible gambling to recognize problem gambling. The commission
is required to contract for services related to the prevention of compulsive and addictive
gambling. The contract for the services must require advertising of responsible gambling and the
publication of a gambling telephone help line. Each resort licensee is required to fund the
program with a $250,000 annual fee.
Section 27: Suppliers’ licenses are required in order to furnish, on a regular or continuing basis,
gaming equipment, supplies, devices, or goods or services relating to the realty, construction, or
business of a resort licensee. This requirement includes, but is not limited to, manufacturers,
distributers, food purveyors, construction companies, and junket enterprises. Each applicant and
licensee must pay an annual license fee of $5,000. A person is not eligible for a suppliers’ license
if the person has committed a felony, knowingly submitted false information to the commission,
the applicant is a member of the committee, the applicant is not a natural person, or the applicant
has a resort license or pari-mutuel license in either this state or any other jurisdiction.
All applicants for suppliers’ licenses must submit to background investigations and comply with
the fingerprint requirements in the act.
The bill authorizes the commission to revoke a license for a violation of the act and commission
rules.
Section 28: Any person who wishes to become a gaming employee must apply to the
commission for an occupational license; no person may be employed by a resort licensee until
that person has an occupational license. The application fee must be set by the commission, but
an employee occupational license fee may not exceed $50. Occupational licensees must be at
least 21 years old to perform gaming related functions and at least 18 to perform non-gaming
related functions.
All applicants for occupational licenses must submit to background investigations and comply
with the fingerprint requirements in the act. The bill authorized the commission to revoke a
license for a violation of the act and commission rules. A person who has committed a felony or
crime involving dishonesty or moral turpitude in any jurisdiction is not eligible for an
occupational license.
BILL: SB 2050 Page 17
Section 29: The commission’s executive director may grant temporary suppliers and
occupational licenses, under certain conditions. The temporary license expires after 90 days.
Section 30: SB 2050 requires the commission to submit quarterly reports to the Governor,
President of the Senate, and Speaker of the House of Representatives. The reports must include:
A statement of receipts and disbursements related to limited gaming;
A summary of disciplinary actions taken by the commission, and
Any additional information or recommendations that the commission believes may
improve the regulation of limited gaming or increase the economic benefits of limited
gaming to this state.
Section 31: The chair of the commission may assign hearings to two or more members of the
commission. Only the commissioners assigned to a hearing can participate in the final decision
for the commission on that matter. If only two commissioners are assigned a matter and they
cannot decide, the chair may cast the deciding vote. Any party to a proceeding before the
commission may request the matter to be heard before the full commission; the full commission
must convene within 15 days to hear the matter.
Section 32: If a dispute that involves alleged wins, losses, payments of cash, prizes, benefits,
tickets, or other items, or a dispute that involves the manner in which a game, tournament,
contest, drawing, promotion, race or similar activity was conducted, cannot be resolved between
the licensee and the patron, the licensee must immediately notify the commission if the dispute
involves at least $500.
If the dispute involves less than $500, the licensee must notify the patron of the patron’s right to
file a complaint with the commission.
The commission may investigate the matter and may require the licensee to pay restitution to the
patron. Failure to notify the commission of a dispute or notifying a patron of his or her right to
file a complaint constitutes grounds for disciplinary action against the resort licensee.
Section 33: SB 2050 permits the use of credit instruments. Resort licensees may accept
incomplete credit instruments if they are signed by the patron and the amount is completed in
numbers; the resort licensee may complete the incomplete instrument. The resort licensee also
may accept a credit instrument payable to an affiliate of the licensee. In addition, the resort
licensee may accept the credit instrument before, during, or after the patron has incurred the debt
with the resort.
However, SB 2050 also allows patrons to establish an account by a cash deposit, recognized
traveler’s check, or any other credit instrument that is equivalent to cash.
The bill also establishes that a patron’s mental disorder is not a defense against paying the debt;
nor does the failure of a resort to comply with all of the requirements of this section erase the
debt.
The commission is authorized to adopt rules to address the credit instrument issues.
BILL: SB 2050 Page 18
Section 34: SB 2050 provides that a person may request to be excluded from all limited gaming
facilities by completing a self-exclusion form and submitting it to the commission. The form
requires the patron to include his or her name, date of birth, and other identifying information.
The form also requires the individual to indicate how long he or she wishes to be excluded from
the limited gaming facilities.
Section 35: Amends s. 849.15, F.S., to reference the Destination Resort Act.
Section 36: Amends s. 849.231, F.S., to exempt the limited gaming at destination resorts from
the statutory prohibition against possession of gambling devices in Florida.
Section 37: Amends s. 849.25, F.S., to correct cross-references and to exempt the limited
gaming at destination resorts from the statutory prohibition against bookmaking.
Section 38: Specifies that this act shall take effect July 1, 2011.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
D. Other Constitutional Issues:
The Florida Constitution is silent on the subject of casino gaming. However, the Florida
Constitution does not prohibit the Legislature from creating laws to authorize, regulate, or
tax gaming in the state. With regard to gaming, the Florida Constitution only addresses
the subjects of lotteries and slot machine gaming. The Florida Constitution prohibits
lotteries, except pari-mutuel pools permitted by state law,36 but specifically allow for
state operated lotteries.37
Even though the Florida Constitution does not specifically prohibit any form of gaming
other than lotteries that are not state operated, the provision that expanded the pari-mutuel
locations that can offer slot machine gaming is being challenged as violating s. 23, Art.
X, Florida Constitution. These lawsuits challenge the Legislature’s authority to authorize
slot machine gaming outside the pari-mutuel facilities enumerated in s. 23, Art. X, of the
36
Section 7, Art. X, Florida Constitution.
37
Section 15, Art. X, Florida Constitution.
BILL: SB 2050 Page 19
Florida Constitution, which references pari-mutuel facilities that were existing and had
conducted live racing or games in that county during each of the last 2-calendar years
before the effective date of the amendment (2004). The trial court upheld the
constitutionality in Leon County.38 That decision is on appeal to the First District Court
of Appeals.39
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
Applicants for a destination resort license would pay an application fee of $1 million
dollars to defray the costs of investigating and reviewing the application.
The application also must include a one-time licensing fee of $50 million, which the
commission must refund within 30 days of denying an application. If an applicant
withdraws its application after the application deadline, the commission must refund 80
percent of the licensing fee within 30 days after the application is withdrawn.
Each resort licensee would be required to pay $2 million annually to the commission as a
license fee. In addition, each resort licensee would pay a gross receipts tax. The tax rate
would be dependent on the licensee’s investment in infrastructure. Once the resort is
complete, the licensee must submit all information, as required by the commission, to
determine the infrastructure investment and to set the tax rate for the resort.
If the total infrastructure investment is $2.5 billion or more, the gross receipts tax rate is
10 percent. If the total infrastructure investment is at least $1 billion but less than $2.5
billion, the gross receipts tax is 15 percent. If the total infrastructure investment is less
than $1 billion, the gross receipts tax is 20 percent.
Suppliers’ licensees would be required to pay an annual license fee of $5,000, while the
fee for an occupational licensee may not exceed $50.
The state’s Revenue Estimating Conference has not met to estimate the revenue impact of
SB 2050.
However, the casino industry estimates that implementation of a similar bill filed this
session may:
Generate total non-gaming revenue for the first year of $85.4 million;
38
See Order on Plaintiff’s Motion for Summary Judgment, consolidated cases, Florida Gaming Centers, Inc. v. Department
of Business and Professional Regulation and South Florida Racing Association, No. 2010 CA 2257 and Calder Race Course,
Inc. v. Department of Business and Professional Regulation and South Florida Racing Association, No. 2010 CA 2132 (Fla.
2d Cir. Ct. December 14, 2010).
39
See Calder Race Course, Inc. v. Department of Business and Professional Regulation and South Florida Racing
Association, 1D11-130 (Fla. 1st DCA) and Florida Gaming Centers, Inc. v. Department of Business and Professional
Regulation and South Florida Racing Association, 1D10-6780 (Fla. 1st DCA).
BILL: SB 2050 Page 20
Induce by the third year $64.5 million in convention and local bed tax
collections; and
Increase collections of corporate income taxes and sales taxes by nearly $52
million.
B. Private Sector Impact:
The industry estimates that five resorts, if authorized by the commission, would create
140,000 construction jobs and would generate $10 billion in construction costs.
The industry estimates that the five resorts, if built, would attract 5.26 million out-of-
market visitors, including more than 313,000 convention visitors.
C. Government Sector Impact:
Indeterminate. However, the bill authorizes fees projected to be sufficient to pay the costs
of administering the act.
VI. Technical Deficiencies:
Sections 35-37 of the bill refer to the “sections 3 through 35” of the Destination Resort Act in
their cross-references. Actually, only sections 3 through 34 are part of the Destination Resort
Act. It is also unusual to refer in substantive law to the unnumbered sections of a particular act,
because the numbering could change as the bill travels through the committee and floor process.
Perhaps the cross-references should refer simply to the “Destination Resort Act.”
Also, it is typical in statutes for appointed commissioners to be term-limited. SB 2050 does not
limit the Destination Resort commissioners to a specific number of terms.
VII. Related Issues:
State revenue-sharing with the Seminole Indian Compact relies on continued exclusivity of
casino-style and Class III gaming. The authorization for full commercial casinos would
constitute a casino style and Class III gaming expansion and would affect the revenue-sharing
payments that the Tribe is required to make to the state under the compact. Any cessation or
reduction of revenue sharing payments upon the expansion of casino gaming would depend on
the location of the new casinos. It is important to stress that any cessation or reduction of revenue
sharing payments would only occur when the first Class III or other casino-style game is played.
The mere authorization of Class III gaming or other casino-style gaming would not affect the
payments.
It is also important to note that the state’s expansion of Class-III gaming or casino-style gaming
would not mean that the state had violated its compact with the Tribe. The compact specifies the
consequences, particularly the financial ramifications, if the state elects to expand gaming in this
state, and does not expressly prohibit any such expansion.
If the Destination Resort Commission approves a destination resort with limited gaming in any
location outside of Miami-Dade and Broward Counties, all of the Tribe’s revenue-sharing
BILL: SB 2050 Page 21
payments would stop once the first game is played.40 If the Destination Resort Commission
approves a destination resort with limited gaming inside of Miami-Dade and Broward Counties,
but the location is not at a pari-mutuel facility, the Tribe would continue to make revenue-
sharing payments, but the Tribe would exclude the net win from their Broward facilities.
According to the division, the net win from the Tribe’s Broward facilities equals approximately
47 percent of the Tribe’s total net win. Therefore, if casino-style gaming were expanded and
limited to Miami-Dade and Broward Counties, the Tribe’s payments would be reduced by
approximately 47 percent.
In addition, if the destination resort with limited gaming is authorized for any location in Miami-
Dade or Broward counties within the first 5 years of the compact, the guaranteed minimum
payment and the $1 billion guarantee for the first 5 years of the compact would no longer apply.
The Tribe’s payments would be based on the applicable percentage of net win.
Once the new gaming begins at licensed destination resorts, the Tribe may continue to offer the
covered games authorized in the compact plus any additional games that are authorized for the
destination resorts.41 The Tribe will have to renegotiate a new Compact for Class III games when
the Compact expires at the end of its 20-year term,42 but it is not clear what reason the Tribe
would have to renegotiate the revenue-sharing terms if casino-style gaming is authorized at
destination resorts in the state. However, the Tribe would have to negotiate a new compact at the
end of the current compact’s term before it could continue to offer the covered games.43
VIII. Additional Information:
A. Committee Substitute – Statement of Substantial 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.
40
See Part XII. A., Gaming Compact, supra n. 29.
41
See the definition of covered games at Part III.F.4., Gaming compact, supra at n. 29.
42
See Part XVI.B., Gaming Compact, supra at n. 29.
43
IGRA at 18 U.S.C. s. 2710(d)(1)(C).
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