Florida Ports Investment Act Would Trade Insurance Premium Tax Credits for Cash Investments
Mar 17, 2010
Cash investments by insurance companies in Florida’s port infrastructure would be incentivized through insurance premium tax credits under the provisions of House Bill 1169, which passed the Florida House of Representatives’ Economic Development Policy Committee unanimously today, March 17, 2010.
HB 1169 must pass three more committees of reference before being considered by the full House. Similar Senate legislation, SB 1992, has not yet been heard in committee.
Under HB 1169, an insurance company making a cash investment in Florida’s ports would receive a credit against premium tax liability equal to one hundred percent of the investment capital invested. The insurer would then be entitled to use no more than 10 percent of the credit (including any carry-forward credits) per year, beginning with premium tax filings for calendar year 2012. The total amount of tax credits that could be allocated would not exceed $500 million. Participating insurance companies would be permitted to use no more than $50 million annually.
Because Florida law otherwise restricts the investment and lending activities in which insurance companies may engage using company assets, the bill creates a ports infrastructure funding mechanism by authorizing insurance companies to provide capital to a non-profit corporation created by the bill in exchange for the issuance of insurance premium tax credits.
Although an annualized negative fiscal impact of $50 million has been estimated to begin in Fiscal Year 2010-2011 if the bill were to be passed, the financial impact of its ultimate purpose is estimated to be greater through the stimulation of Florida’s port infrastructure as an economic driver.
To access the staff analysis of HB 1169, click here.
Florida Governor Charlie Crist joined legislation sponsors State Senator Jeremy Ring and State Representative Lake Ray today in promoting the merits of House Bill 1169, which would be known as the “Florida Ports Investment Act” and expected to create a $500 million investment pool that would be invested in on-port and off-port projects.
A press release from the Office of the Governor indicating his support of HB 1169 is reprinted below.
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Governor Crist Highlights Trade Opportunities for Florida Ports
~ Promotes legislation that would help create jobs, generate revenue and increase trade opportunities ~
TALLAHASSEE – Governor Charlie Crist today, as part of his continued focus on strengthening Florida’s economy, joined Senator Jeremy Ring and Representative Lake Ray to promote two ports bills designed to create jobs, generate revenue and increase trade opportunities for Florida ports. House Bill 963 would help Florida more effectively compete with other states to attract port-related businesses, and House Bill 1169 would generate investments in new and expanding port projects through insurance premium credits.
“I am hopeful the Florida House and Senate will recognize the economic impact of Florida’s port communities and the potential they have for future economic growth,” said Governor Crist. “I am confident our ports can boost state and local revenues through job creation, business expansion and an increased focus on one of Florida’s most important geographic advantages.”
House Bill 963 emphasizes the importance of seaport commerce as an economic foundation for the promotion, enhancement and development of tourism, agriculture, manufacturing, transportation and construction sectors. The legislation would allow Florida to more effectively compete with states vying for international business by enabling Florida’s ports to attract companies, create jobs and generate state and local revenues.
In addition, House Bill 963 provides flexibility to the Florida Seaport Transportation and Economic Development Council (FSTED) and the Florida Department of Transportation (FDOT) to ensure seaport development dollars appropriated by the Legislature are allocated to economic development projects that create jobs and revenue. The bill also requires FSTED to submit a list of production-ready projects within the next five years to FDOT for consideration to be included in FDOT’s annual legislative budget request.
“I’m excited about the tremendous positive impact these bills will have on Florida’s economy, and appreciate the Governor’s support on this issue,” said Representative Ray. “We were all elected to make peoples lives better, these bills will do that by creating jobs.”
House Bill 1169, the Florida Ports Investment Act, will increase the state’s port infrastructure by providing an incentive for insurance companies to invest in port activities in Florida, which will generate investments in new and expanding port projects. The legislation provides insurance premium tax credits in exchange for cash invested by insurance companies. The goal is to create a $500 million investment pool that can be invested in on-port and off-port projects.
In addition, House Bill 1169 provides for the creation of a non-profit corporation assisted by the Governor’s Office of Tourism, Trade and Economic Development (OTTED) to use voluntary funds from interested companies and make appropriate investments in port projects. The seven-member board would consist of the director of OTTED, and two members appointed by each the Governor, Senate President and the House Speaker. The Chair of FSTED would serve as an ex officio director of the board.
“I am proud to join the Governor to advocate for this important economic priority,” said Senator Ring. “By opening new avenues for trade and job creation, we will better the livelihood of Florida families.”
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