Senate Bill 0940

CODING: Words stricken are deletions; words underlined are additions.



    Florida Senate - 1998                                   SB 940

    By Senator Harris





    24-692-98                                               See HB

  1                      A bill to be entitled

  2         An act relating to minority business

  3         enterprises; amending s. 287.0943, F.S.;

  4         providing a presumption for certain

  5         certification purposes; providing an exclusion;

  6         amending s. 288.703, F.S.; revising

  7         definitions; specifying application; providing

  8         an effective date.

  9

10  Be It Enacted by the Legislature of the State of Florida:

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12         Section 1.  Paragraph (e) of subsection (1) of section

13  287.0943, Florida Statutes, is amended to read:

14         287.0943  Certification of minority business

15  enterprises.--

16         (1)

17         (e)  In assessing the status of ownership and control,

18  certification criteria shall, at a minimum:

19         1.  Link ownership by a minority person, as defined in

20  s. 288.703(3), or as dictated by the legal obligations of a

21  certifying organization, to day-to-day control and financial

22  risk by the qualifying minority owner, and to licensure of a

23  minority owner in any trade or profession that the minority

24  business enterprise will offer to the state when certified;

25  however, the minority licenseholder need not be the

26  controlling owner of the enterprise, but must hold an

27  ownership interest. Minority business enterprises presently

28  certified by the state will not be subject to the licensure

29  requirement until 5 years after the effective date of this

30  act.

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CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 1998                                   SB 940
    24-692-98                                               See HB




  1         2.  If present ownership was obtained by transfer,

  2  require the minority person on whom eligibility is based to

  3  have owned at least 51 percent of the applicant firm for a

  4  minimum of 2 years, when any previous majority ownership

  5  interest in the firm was by a nonminority who is or was a

  6  relative, former employer, or current employer of the minority

  7  person on whom eligibility is based. This requirement shall

  8  not apply to minority persons who are otherwise eligible who

  9  take a 51-percent-or-greater interest in a firm that requires

10  professional licensure to operate and who will be the

11  qualifying licenseholder for the firm when certified.  A

12  transfer made within a related immediate family group from a

13  nonminority person to a minority person in order to establish

14  ownership by a minority person shall be deemed to have been

15  made solely for purposes of satisfying certification criteria

16  and shall render such ownership invalid for purposes of

17  qualifying for such certification if the combined total net

18  asset value of all members of such family group exceeds $1

19  million. For purposes of this subparagraph, the term "related

20  immediate family group" means one or more children under 16

21  years of age and a parent of such children or the spouse of

22  such parent residing in the same house or living unit.

23         3.  Require that prospective certified minority

24  business enterprises be currently performing a useful business

25  function. A "useful business function" is defined as a

26  business function which results in the provision of materials,

27  supplies, equipment, or services to customers other than state

28  or local government. Acting as a conduit to transfer funds to

29  a nonminority business does not constitute a useful business

30  function unless it is done so in a normal industry practice.

31  As used in this section, the term "acting as a conduit" means,

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CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 1998                                   SB 940
    24-692-98                                               See HB




  1  in part, not acting as a regular dealer by making sales of

  2  material, goods, or supplies from items bought, kept in stock,

  3  and regularly sold to the public in the usual course of

  4  business. Brokers, manufacturer's representatives, sales

  5  representatives, and nonstocking distributors are considered

  6  as conduits that do not perform a useful business function,

  7  unless normal industry practice dictates.

  8         Section 2.  Subsections (1) and (2) of section 288.703,

  9  Florida Statutes, are amended to read:

10         288.703  Definitions.--As used in this act, the

11  following words and terms shall have the following meanings

12  unless the content shall indicate another meaning or intent:

13         (1)  "Small business" means an independently owned and

14  operated business concern that employs 100 or fewer permanent

15  full-time employees and that, together with its affiliates,

16  has a net worth of not more than $1 $3 million and an average

17  net income after federal income taxes, excluding any carryover

18  losses, for the preceding 2 years of not more than $2 million.

19  As applicable to sole proprietorships, the $1 $3 million net

20  worth requirement shall include both personal and business

21  investments.

22         (2)  "Minority business enterprise" means any small

23  business concern as defined in subsection (1) which is

24  organized to engage in commercial transactions, which is

25  domiciled in Florida, and which is at least 51-percent-owned

26  by minority persons who are members of an insular group that

27  is of a particular racial, ethnic, or gender makeup or

28  national origin, which has been subjected historically to

29  disparate treatment due to identification in and with that

30  group resulting in an underrepresentation of commercial

31  enterprises under the group's control, and whose management

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CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 1998                                   SB 940
    24-692-98                                               See HB




  1  and daily operations are controlled by such persons.  A

  2  minority business enterprise may primarily involve the

  3  practice of a profession. Ownership by a minority person does

  4  not include ownership that is the result of a transfer from a

  5  nonminority person to a minority person within a related

  6  immediate family group if the combined total net asset value

  7  of all members of such family group exceeds $1 million. For

  8  purposes of this subsection, the term "related immediate

  9  family group" means one or more children under 16 years of age

10  and a parent of such children or the spouse of such parent

11  residing in the same house or living unit.

12         Section 3.  The definitions of small business, minority

13  business enterprise, and certified minority business

14  enterprise provided in section 288.703, Florida Statutes,

15  apply to the state and all political subdivisions of the

16  state.

17         Section 4.  This act shall take effect October 1, 1998.

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19            *****************************************

20                       LEGISLATIVE SUMMARY

21
      Revises the definition of minority business enterprise to
22    exclude intrafamily transfers made solely to achieve
      ownership by a minority person.  Excludes from provisions
23    relating to certification of minority business
      enterprises intrafamily transfers from a nonminority
24    person to a minority person for purposes of eligibility
      for certification. Limits small businesses to those with
25    net worths of $1 million or less. (See bill for details.)

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