Senate Bill 0146c1

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    Florida Senate - 1999                            CS for SB 146

    By the Committee on Agriculture and Consumer Services; and
    Senator Cowin




    303-2194-99

  1                      A bill to be entitled

  2         An act relating to agriculture; creating ss.

  3         570.251-570.275, F.S.; creating the "Florida

  4         Agricultural Development Act"; providing

  5         legislative findings; providing definitions;

  6         establishing the Florida Agricultural

  7         Development Authority; providing powers and

  8         duties; providing for membership of a board;

  9         providing for terms of board members; providing

10         for organization of the board; providing

11         general powers of the authority; providing for

12         an executive director and specifying duties;

13         requiring an annual report; providing for the

14         use of surplus moneys by the authority;

15         providing for combination of state and federal

16         programs to facilitate the purposes of the

17         authority; establishing a beginning farmer loan

18         program; providing purposes of the loan

19         program; authorizing the authority to

20         participate in federal programs; requiring the

21         authority to provide for loan criteria by rule;

22         authorizing the authority to provide loan

23         requirements; authorizing the authority to make

24         loans to beginning farmers for agricultural

25         land and improvements and depreciable

26         agricultural property; authorizing the

27         authority to make loans to mortgage lenders and

28         other lenders; authorizing the authority to

29         purchase mortgage loans and secured loans from

30         mortgage lenders; providing powers of the

31         authority relating to loans; providing for the

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  1         issuance of bonds and notes by the authority;

  2         authorizing the authority to establish bond

  3         reserve funds; providing remedies of

  4         bondholders and holders of notes; providing for

  5         the pledging of bonds by the state; providing

  6         that bonds and notes shall be considered legal

  7         investments; providing requirements with

  8         respect to funds of the authority; authorizing

  9         examination of accounts by the Auditor General;

10         requiring a report; providing limitation of

11         liability for members of the authority;

12         requiring the assistance of state officers,

13         agencies, and departments; providing for

14         construction of the act; requiring disclosure

15         of specified conflicts of interest; prohibiting

16         certain participation in the event of a

17         conflict of interest; specifying conflicts of

18         interest with respect to the executive director

19         of the authority; providing exemption from

20         competitive bid laws; creating s. 159.8082,

21         F.S.; establishing the agricultural development

22         bond pool; amending s. 159.804, F.S.; providing

23         for specific allocations of state volume

24         limitations to the agricultural development

25         pool; amending s. 159.809; specifying

26         provisions for bond issuance reports not

27         received; providing an effective date.

28

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

30

31

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    Florida Senate - 1999                            CS for SB 146
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  1         Section 1.  Sections 570.251, 570.252, 570.253,

  2  570.254, 570.255, 570.256, 570.257, 570.258, 570.259, 570.260,

  3  570.261, 570.262, 570.263, 570.264, 570.265, 570.266, 570.267,

  4  570.268, 570.269, 570.270, 570.271, 570.272, 570.273, 570.274,

  5  and 570.275, Florida Statutes, are created to read:

  6         570.251  Short title.--Sections 570.251-570.275 may be

  7  cited as the "Florida Agricultural Development Act."

  8         570.252  Legislative findings.--

  9         (1)  The Legislature finds that the ability of

10  residents of the state to pursue agricultural enterprises or

11  enterprises related to agribusiness has been detrimentally

12  affected by causes and events beyond their control or the

13  control of the state, including treaty-supported foreign

14  competition, termination of long-established federal subsidy

15  programs, and a shortage of funds from private market sources

16  at rates of interest generally available under revenue bond

17  programs to nonagricultural industry.  These conditions have

18  detrimentally affected the rural agriculture industry in this

19  state and have made the sale and purchase of agricultural land

20  by and among family farmers impossible in many parts of this

21  state.  The ordinary operation of private enterprise has not

22  corrected this situation.  Such conditions have worked to the

23  detriment of the economy and social welfare of the state and

24  threatens to destroy the basic fabric of rural agriculture,

25  such as the family farm and rural communities that depend on

26  agribusiness.  The state's farm policy should enhance

27  opportunities for people to generate farm incomes comparable

28  to the incomes of other economic sectors.  The United States

29  Congress has recognized the need to provide assistance to the

30  rural segment of the national economy and has instituted

31  programs to assist family farmers and agribusiness by means of

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  1  tax policy as well as loans, grants, technology transfers, and

  2  credit enhancements to qualified state agencies.  The

  3  Legislature should also encourage, by all suitable means,

  4  intellectual, scientific, and agricultural improvement in the

  5  rural parts of this state.  The public good is served by a

  6  policy of facilitating access to capital by beginning farmers,

  7  existing farmers, and agribusinesses unable to obtain capital

  8  elsewhere.  Therefore, the Legislature finds that conditions

  9  exist in the state which require the creation of a body

10  politic having corporate power to issue notes, bonds, and

11  other evidences of indebtedness in order to make or acquire

12  loans for the acquisition or development of agricultural

13  lands, improvements, and facilities.  All of the purposes

14  stated in this section are public purposes and uses for which

15  public moneys may be borrowed, expended, advanced, loaned, or

16  granted.

17         (2)  The Legislature recognizes that many of the

18  programs approved by the United States Congress in the Federal

19  Agricultural Improvement and Reform Act of 1996 which can

20  supplement and enhance the authority's mission are being

21  implemented. Therefore, the authority is granted broad powers

22  to adopt rules to carry out the purposes set forth in this act

23  to maximize the benefits to the residents of this state from

24  all available federal, state, local, or private programs.

25         570.253  Definitions.--As used in this act, the term:

26         (1)  "Agricultural improvements" means any

27  improvements, buildings, structures, or fixtures that are

28  suitable for use in farming, producing, or processing

29  agricultural products and are located on agricultural land in

30  this state. The term includes both any single-family dwelling

31  located on agricultural land which is or will be occupied by a

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  1  beginning farmer and structures attached to or incidental to

  2  the use of the dwelling.

  3         (2)  "Agricultural land" means land in this state

  4  suitable for use in farming, producing, or processing

  5  agricultural products, specifically including lands so

  6  designated by the Land Acquisition and Management Advisory

  7  Council established under s. 259.035.

  8         (3)  "Agricultural producer" means a person that

  9  engages in the business of producing and marketing

10  agricultural produce in this state and includes a farmer.

11         (4)  "Agricultural processor" means a person that

12  engages in the business of processing agricultural products

13  within this state, including, without limitation, agricultural

14  commodities, agricultural byproducts, biomass energy and

15  organic compost processing, and any and all products made or

16  derived from agricultural or biomass stock as defined by the

17  authority under rules adopted under chapter 120.

18         (5)  "Authority" means the Florida Agricultural

19  Development Authority established in s. 570.254.

20         (6)  "Beginning farmer" means an individual,

21  partnership, corporation, limited liability company, limited

22  agricultural association as defined in s. 604.11, or trust

23  that engages in farming in this state, and includes:

24         (a)  First-time farmers and family farmers as described

25  in s. 147(c)(2) of the Internal Revenue Code, as amended;

26         (b)  Existing farmers who have moved, or who intend to

27  move, from existing agricultural activities to raising new or

28  alternative agricultural crops under rules adopted by the

29  authority; and

30         (c)  Such other farmers as are designated by rules

31  adopted by the authority.

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  1         (7)  "Bonds" means bonds issued by the authority.

  2         (8)  "Depreciable agricultural property" means personal

  3  property suitable for use in farming for which an income tax

  4  deduction for depreciation is allowable in computing federal

  5  income tax under the Internal Revenue Code.

  6         (9)  "Farming" means the cultivation of land in this

  7  state for the production of agricultural crops, including

  8  biomass and fiber crops, citrus crops, poultry and ratites,

  9  eggs, milk, fruits, nuts, vegetables, flowers, ferns, or other

10  horticultural crops, grazing and forage production, swine,

11  livestock, farm-raised deer, aquaculture, hydroponics,

12  organics, silviculture, forest products, or other such

13  activities designated by the authority by rule.

14         (10)  "Internal Revenue Code" means the Internal

15  Revenue Code of 1986, as amended.

16         (11)  "Lending institution" means a bank, credit union,

17  trust company, mortgage company, national banking association,

18  savings and loan association, insurance company, any state or

19  federal governmental agency or instrumentality, including the

20  federal land bank or the consolidated farm service agency or

21  any of its local associations, or any other financial

22  institution or entity authorized to make farm loans in this

23  state.

24         (12)  "Mortgage" means a mortgage, mortgage deed, deed

25  of trust, or other instrument creating a first lien, subject

26  only to title exceptions and encumbrances acceptable to the

27  authority, including any other mortgage liens of equal

28  standing with or subordinate to the mortgage loan retained by

29  a seller or conveyed to a mortgage lender, on a fee interest

30  in agricultural land and agricultural improvements.

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  1         (13)  "Mortgage lender" means a bank, trust company,

  2  mortgage company, national banking association, savings and

  3  loan association, insurance company, or any state or federal

  4  governmental agency or instrumentality, including, without

  5  limitation, the federal land bank or any of its local

  6  associations or any other financial institution or public or

  7  private entity authorized to make mortgage loans or secured

  8  loans in this state.

  9         (14)  "Mortgage loan" means a financial obligation

10  secured by a mortgage.

11         (15)  "Note" means a bond anticipation note or other

12  obligation or evidence of indebtedness issued by the

13  authority.

14         (16)  "Secured loan" means a financial obligation

15  secured by a chattel mortgage, security agreement, or other

16  instrument creating a lien on an interest in depreciable

17  agricultural property.

18         (17)  "State agency" means any board, commission,

19  department, public officer, or other agency or authority of

20  the state.

21

22  The authority may by rule define other terms applicable to

23  this act and may clarify the definitions in this section to

24  assure eligibility for funds, insurance, or guarantees

25  available under federal, state, or local laws, to assure

26  compliance with federal tax law and regulations under the

27  Internal Revenue Code and applicable state statutes, and to

28  carry out the public purposes of this act.

29         570.254  Establishment of authority; powers and duties;

30  board; earnings.--

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  1         (1)  There is created the "Florida Agricultural

  2  Development Authority," a public body corporate and politic,

  3  for the purposes and with the powers set forth herein. Such

  4  instrumentality, hereinafter referred to as "the authority"

  5  shall have perpetual succession. For the purposes of

  6  implementing the intent of ss. 570.251-570.275, the authority

  7  shall be considered an instrumentality of the state, subject

  8  to the jurisdiction of the state. Any conflict with respect to

  9  that jurisdiction shall be resolved by the authority and

10  respective state agencies. The authority shall establish

11  programs that:

12         (a)  Assist farmers, beginning farmers, and

13  agribusiness in purchasing, leasing, or otherwise acquiring

14  agricultural land, improvements, technology, and depreciable

15  agricultural property for farming.

16         (b)  Promote diversification of the farm economy in

17  this state through the growth and development of new crops or

18  livestock not customarily grown or produced in this state or

19  that emphasize a vertical integration of agricultural products

20  produced or raised in this state into a finished agricultural

21  product or byproduct for consumption or use.

22         (c)  Assist in financing operating expenses and

23  cash-flow requirements of farming.

24         (2)  The authority shall be operated under the

25  supervision of the Commissioner of Agriculture, which

26  supervision may include, but is not limited to, assisting,

27  advising, and making recommendations regarding the operation,

28  financing, and programs of the authority. In assisting and

29  advising the authority, the Commissioner of Agriculture may

30  make appropriate staff of the department available to the

31  authority.

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  1         (3)  The powers of the authority are vested in and

  2  exercised by a board of seven members, including the

  3  Commissioner of Agriculture or the commissioner's designee.

  4  The Commissioner of Agriculture shall appoint the following

  5  members of the board:

  6         (a)  One member from the Farm Credit System.

  7         (b)  One member from the Florida State Rural

  8  Development Council.

  9         (c)  One member from the Florida Farm Bureau

10  Federation.

11         (d)  One member who is an agricultural economist.

12         (e)  One member with bonding or lending experience.

13         (f)  One member at large.

14         (4)  Initially, two members of the board shall be

15  appointed for a term of 4 years, two members for a term of 3

16  years, and two members for a term of 2 years. Thereafter, each

17  member shall be appointed for a 4-year term. A person

18  appointed to fill a vacancy may serve only for the unexpired

19  portion of the term.  A member of the board is eligible for

20  reappointment. An appointed board member may be removed from

21  office by the Commissioner of Agriculture. An appointed board

22  member may also serve as a member of any other authority or

23  association.

24         (5)  The members shall elect a chair and a vice chair

25  annually and other officers as necessary. The executive

26  director of the authority shall serve as secretary to the

27  board.  Meetings of the board must be held at the call of the

28  chair, at the request of a majority of the membership of the

29  board, at the request of the Commissioner of Agriculture, or

30  at such times as may be prescribed by rules of the board.

31  Meetings may be held telephonically as prescribed by rules of

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  1  the board. Any meeting at which official acts are to be taken

  2  or at which the public business of the authority is to be

  3  transacted or discussed must be open and noticed to the

  4  public.

  5         (6)  Four voting members of the board constitute a

  6  quorum, and the affirmative vote of those present and voting

  7  is necessary for any substantive action taken by the board. A

  8  vacancy in the membership does not impair the right of a

  9  quorum to exercise all rights and perform all duties of the

10  board.

11         (7)  The members of the board shall not be entitled to

12  compensation for their services as members, but may receive

13  per diem and travel expenses as provided in s. 112.061 while

14  in performance of their duties.

15         (8)  The members of the board shall give bond as

16  required by law for public officers.

17         (9)  The net earnings of the authority, beyond that

18  necessary for retirement of its notes, bonds, or other

19  obligations or to implement authorized public purposes and

20  programs, may not inure to the benefit of any person other

21  than the state.  Upon termination of the existence of the

22  authority, title to all property owned by the authority,

23  including any net earnings, vests in the department.

24         570.255  General powers.--The authority is granted

25  powers necessary to carry out its purposes and duties. It may:

26         (1)  Issue negotiable bonds and notes to finance its

27  programs.

28         (2)  Sue and be sued in its own name.

29         (3)  Have and alter a corporate seal.

30         (4)  Make and alter bylaws for its management and

31  programs.

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  1         (5)  Make and execute agreements, contracts, and other

  2  instruments with any public or private entity, including any

  3  federal governmental agency. With the approval of the

  4  Commissioner of Agriculture, the authority may enter into

  5  contracts with any firm of independent certified public

  6  accountants to prepare an annual report on behalf of the

  7  authority. The authority may enter into contracts with

  8  mortgage lenders, insurance companies, or others for the

  9  servicing of mortgages and secured loans. All political

10  subdivisions, including federal, state, and local agencies,

11  may enter into contracts and otherwise cooperate with the

12  authority.

13         (6)  Lease, purchase, accept a gift or donation of, or

14  otherwise acquire, use, own, hold, improve, or deal in or

15  with, real or personal property, or sell, convey, mortgage,

16  pledge, lease, exchange, or otherwise dispose of any assets,

17  loans or equity interests acquired in the financing of

18  projects funded by the authority, or any other property or

19  interest in property, as the board considers necessary in the

20  transaction of its business. The authority may not carry out a

21  program of real estate investment.

22         (7)  Procure insurance against any loss in connection

23  with its operations or property interests, including pool

24  insurance on any group of mortgages or secured loans.

25         (8)  Fix and collect fees and charges for its services

26  by rule of the authority.

27         (9)  Subject to an agreement with bondholders or

28  noteholders, invest or deposit its moneys in a manner

29  determined by the authority, notwithstanding the provisions of

30  chapters 215 and 216.

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  1         (10)  Accept appropriations, gifts, grants, loans, or

  2  other aid from public or private entities. A record of all

  3  gifts or grants stating the type, amount, and donor must be

  4  clearly set out in the authority's annual report along with

  5  the record of other receipts.

  6         (11)  Provide public and private entities with

  7  technical assistance, education, counseling, and grants to

  8  assist the authority in matters related to the authority's

  9  purposes.

10         (12)  In cooperation with other local, state, or

11  federal governmental agencies or instrumentalities, conduct

12  studies of the agricultural needs of the beginning farmer,

13  agricultural producer, and processor and gather, compile, and

14  exchange with similar authorities and agencies in other states

15  data useful to facilitate decisionmaking.

16         (13)  Contract with accountants, architects, attorneys,

17  economists, engineers, housing construction and finance

18  experts, and other advisors, or enter into contracts for such

19  services with local, state, or federal governmental agencies.

20         (14)  Execute contracts, agreements, leases, and other

21  instruments with any person, partnership, corporation, limited

22  liability company, limited agricultural association, or trust,

23  including, without limitation, any federal, state, or local

24  governmental agency, and take actions necessary to accomplish

25  any purpose for which the authority was organized or to

26  exercise any power expressly granted to the authority.

27         (15)  Adopt rules relating to:

28         (a)  Programs under the jurisdiction of the authority,

29  including beginning farmer programs.

30         (b)  Definitions.

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  1         (c)  Eligibility for programs, eligibility criteria and

  2  determinations, objective criteria and guidelines, and forms

  3  and documents required to implement the authority's programs.

  4         (d)  Administration of the authority.

  5         570.256  Executive director.--

  6         (1)  The authority shall appoint the executive director

  7  of the authority who serves at the pleasure of the authority.

  8         (2)  The executive director shall advise the authority

  9  on matters relating to agricultural land and property and

10  finance; carry out all directives from the authority and the

11  commissioner; and hire and supervise the authority's staff

12  pursuant to the direction of the board and the commissioner.

13         (3)  The executive director, as secretary of the

14  authority, is custodian of all books, documents, minute books,

15  seals, and papers filed with the authority. The executive

16  director may authorize duplication of all minutes and other

17  records and documents of the authority and shall give

18  certificates under the seal of the authority that the copies

19  are true copies and that all persons dealing with the

20  authority may rely upon the certificates.

21         570.257  Annual report.--

22         (1)  The authority shall submit to the Governor, the

23  President of the Senate, the Speaker of the House of

24  Representatives, and the Auditor General, by February 15 of

25  each year, a report setting forth:

26         (a)  The operations and accomplishments of the

27  authority.

28         (b)  The authority's receipts and expenditures during

29  the fiscal year, in accordance with the classifications it

30  establishes for its operating and capital accounts.

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  1         (c)  The authority's assets and liabilities at the end

  2  of its fiscal year and the status of reserve, special, and

  3  other funds.

  4         (d)  A schedule of the authority's bonds and notes

  5  outstanding at the end of its fiscal year, together with a

  6  statement of the amounts redeemed and issued during its fiscal

  7  year.

  8         (e)  A statement of the authority's proposed and

  9  projected activities.

10         (f)  Recommendations to the Legislature, as the

11  authority determines necessary.

12         (g)  An analysis of the needs of beginning farmers and

13  other farmers in the state, as well as of agribusiness

14  projects funded by the authority.

15         (2)  The annual report, together with the authority's

16  audited annual statements of financial condition for the

17  period prepared by the authority's certified public

18  accountants, including, specifically, their review and

19  comments on the authority's activities described in paragraphs

20  (1)(b), (c), and (d), must identify performance goals of the

21  authority and clearly indicate the extent of progress during

22  the reporting period in attaining the goals.  When possible,

23  results must be expressed in terms of number of loans and

24  acres of agricultural land and establishment of new or

25  alternative agricultural crops for farmers and agribusiness in

26  the state.

27         570.258  Surplus moneys.--Moneys declared by the

28  authority to be surplus moneys that are not required to

29  service bonds and notes, to pay administrative expenses of the

30  authority, or to accumulate necessary operating or loss

31  reserves must be used by the authority to provide loans,

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  1  grants, subsidies, and other services or assistance to

  2  beginning farmers or agricultural producers through any of the

  3  programs authorized in this act.

  4         570.259  Combination programs.--Programs authorized in

  5  this act may be combined with any other programs authorized by

  6  law or authorized under any federal program or programs of any

  7  other state in order to facilitate the acquisition and

  8  ownership of agricultural land and property by beginning or

  9  existing farmers or to facilitate the implementation of soil

10  and water conservation practices and the implementation of new

11  and alternative agricultural crops in this state.

12         570.260  Beginning farmer loan program.--

13         (1)  The authority shall develop a beginning farmer

14  loan program to facilitate the acquisition of agricultural

15  land and improvements and depreciable agricultural property by

16  beginning farmers. The authority shall exercise its powers in

17  order to provide financial assistance to beginning farmers in

18  the acquisition of agricultural land and improvements and

19  depreciable agricultural property. The authority may

20  participate in and cooperate with programs of the United

21  States Department of Agriculture Consolidated Farm Service

22  Agency, the federal land bank, or any other agency or

23  instrumentality of the Federal Government, or with any program

24  of any other state agency in the administration of the

25  beginning farmer loan program and in the making or purchasing

26  of bonds, notes, mortgages, or secured loans under this act.

27         (2)  The authority may participate in any federal

28  programs designed to assist beginning farmers or in any

29  related federal or state programs.

30         (3)  The authority shall by rule prescribe the criteria

31  upon which loans to or on behalf of a beginning farmer program

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  1  will be provided. These rules must comply with the

  2  requirements for "first-time farmers" under s. 147 of the

  3  Internal Revenue Code, as amended.

  4         (4)  The authority may provide in a mortgage or secured

  5  loan made or purchased under this act that the loan may not be

  6  assumed or that any interest in the agricultural land or

  7  improvements or depreciable agricultural property may not be

  8  leased, sold, or otherwise conveyed without its prior written

  9  consent, and may provide a due-on-sale clause with respect to

10  the occurrence of any of the foregoing events without its

11  prior written consent. The authority may specify by rule the

12  grounds for permitted assumptions of a mortgage or for the

13  leasing, sale, or other conveyance of any interest in the

14  agricultural land or improvements. The authority shall,

15  however, reserve in a mortgage or secured loan its right to

16  raise the interest rate of the loan to the prevailing market

17  rate if the mortgage or secured loan is assumed by a farmer

18  who is already established in that field at the time of the

19  assumption of the loan.

20         (5)  The authority may participate in any interest in

21  any mortgage or secured loan made or purchased under this act

22  with a mortgage or other lender. The participation interest

23  may be on a parity with the interest in the mortgage or

24  secured loan retained by the authority, equally and ratably

25  secured by the mortgage or securing agreement securing the

26  mortgage or secured loan.

27         570.261  Loans to beginning farmers.--

28         (1)  The authority may make mortgage or secured loans,

29  including, but not limited to, mortgage or secured loans

30  insured, guaranteed, or otherwise secured by the Federal

31  Government or a federal governmental agency or

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  1  instrumentality, a state agency, or private mortgage insurers,

  2  to beginning farmers to provide financing for agricultural

  3  land and improvements or depreciable agricultural property.

  4         (2)  Mortgage or secured loans must contain terms and

  5  provisions, including interest rates, and be in a form

  6  established by rule of the authority. The authority may

  7  require the beginning farmer to execute a note, loan

  8  agreement, or other evidence of indebtedness and furnish

  9  additional assurances and guarantees, including insurance,

10  reasonably related to protecting the security of the mortgage

11  or secured loan, as the authority deems necessary.

12         570.262  Loans to mortgage lenders and other lenders.--

13         (1)  The authority may make loans to mortgage lenders

14  or other lenders on terms and conditions it determines are

15  reasonably related to protecting the security of the

16  authority's investment and to administering this act. Mortgage

17  lenders may borrow from the authority under the provisions of

18  this section and the rules of the authority.

19         (2)  The authority shall require as a condition of each

20  loan to a mortgage lender that the mortgage lender, within a

21  reasonable period after receipt of the loan proceeds as the

22  authority prescribes by rule, enter into written commitments

23  to make and, within a reasonable period thereafter as the

24  authority prescribes by rule, disburse the loan proceeds in

25  new mortgage or secured loans to beginning farmers in an

26  aggregate principal amount of not less than the amount of the

27  loan. New mortgage or secured loans must have such terms and

28  conditions as the authority prescribes by rules and as are

29  reasonably related to implementing the purposes of this act.

30         570.263  Purchase of loans.--

31

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  1         (1)  The authority may purchase and make advance

  2  commitments to purchase mortgage or secured loans from

  3  mortgage lenders at prices and upon terms and conditions it

  4  determines. The total purchase price for all mortgage or

  5  secured loans that the authority commits to purchase from a

  6  mortgage lender at any one time may not exceed the total of

  7  the unpaid principal balances of the mortgage or secured loans

  8  purchased. Mortgage lenders are authorized to sell mortgage or

  9  secured loans to the authority under the provisions of this

10  section and the rules of the authority.

11         (2)  The authority shall require as a condition of

12  purchase of mortgage or secured loans from mortgage lenders

13  that the mortgage lenders certify that the mortgage or secured

14  loans purchased are loans made to beginning farmers. Mortgage

15  or secured loans to be made by mortgage lenders must have such

16  terms and conditions as the authority prescribes by rule. The

17  authority may commit to purchase mortgage or secured loans

18  from mortgage lenders in advance of the time the loans are

19  made by mortgage lenders. The authority shall require as a

20  condition of a commitment that mortgage lenders certify in

21  writing that all mortgage or secured loans represented by the

22  commitment will be made to beginning farmers and that the

23  mortgage lender will comply with other requirements of the

24  authority.

25         570.264  Powers relating to loans.--Subject to any

26  agreement with bondholders or noteholders, the authority may

27  renegotiate a mortgage or secured loan or a loan to a mortgage

28  lender in default, waive a default or consent to the

29  modification of the terms of a mortgage or secured loan or a

30  loan to a mortgage lender, forgive or forbear all or part of a

31  mortgage or secured loan or a loan to a mortgage lender, and

                                  18

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  1  commence, prosecute, and enforce a judgment in any action,

  2  including, but not limited to, a foreclosure action, to

  3  protect or enforce any right conferred upon it by law,

  4  mortgage or secured loan agreement, contract, or other

  5  agreement and, in connection with any action, bid for and

  6  purchase the property or acquire or take possession of it,

  7  complete, administer, pay the principal of and interest on any

  8  obligations incurred in connection with the property, and

  9  dispose of and otherwise deal with the property in a manner

10  the authority determines advisable to protect its interests.

11         570.265  Bonds and notes.--

12         (1)  The authority may issue its negotiable bonds and

13  notes in principal amounts that, in the opinion of the

14  authority, are necessary to provide sufficient funds for

15  achievement of its corporate purposes, the payment of interest

16  on its bonds and notes, the establishment of reserves to

17  secure its bonds and notes, and all other expenditures of the

18  authority incident to and necessary or convenient to carry out

19  its purposes and powers. The bonds and notes are to be

20  investment securities and negotiable instruments within the

21  meaning of and for all purposes of the Uniform Commercial

22  Code.

23         (2)  Bonds and notes are payable solely from the

24  moneys, assets, or revenues of the authority and as provided

25  in the agreement with bondholders or noteholders pledging any

26  particular moneys, assets, or revenues. Bonds or notes are not

27  an obligation of this state or any political subdivision of

28  this state other than the authority within the meaning of any

29  constitutional or statutory debt limitations, but are special

30  obligations of the authority payable solely from the sources

31  provided in this act, and the authority may not pledge the

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  1  credit or taxing power of this state or any political

  2  subdivision of this state other than the authority or make its

  3  debts payable out of any moneys except those of the authority.

  4         (3)  Bonds and notes must be authorized by a resolution

  5  of the authority. A resolution authorizing the issuance of

  6  bonds or notes may, however, delegate to an officer of the

  7  authority the power to negotiate and fix the details of an

  8  issue of bonds or notes by an appropriate certificate of the

  9  authorized officer.

10         (4)(a)  In addition to any notice required under the

11  Internal Revenue Code for federally tax exempt bonds, the

12  authority shall publish a notice of intention to issue bonds

13  or notes in a newspaper of general circulation published in

14  the state. The notice must include a statement of the maximum

15  amount of bonds or notes proposed to be issued and, in

16  general, what net revenues will be pledged to pay the bonds or

17  notes and interest thereon. An action may not be brought

18  questioning the legality of the bonds or notes or the power of

19  the authority to issue the bonds or notes or as to the

20  legality of any proceedings in connection with the

21  authorization or issuance of the bonds or notes after 60 days

22  from the date of publication of the notice.

23         (b)  In lieu of paragraph (a), the authority may

24  validate any bonds issued pursuant to this section, as

25  provided in chapter 75. The validation complaint shall be

26  filed only in the circuit court for Leon County. The notice

27  required under s. 75.06 shall be published in Leon County, and

28  the complaint and order of the circuit court shall be served

29  only on the state attorney for the Second Judicial Circuit.

30

31

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  1  The provisions of ss. 75.04(2) and 75.06(2) shall not apply to

  2  a validation complaint filed as authorized in this subsection.

  3  The validation of the bonds issued pursuant to this section

  4  may be appealed to the Supreme Court, and such appeal shall be

  5  handled on an expedited basis.

  6         (5)  Bonds and notes issued by the authority for

  7  purposes of financing the beginning farmer loan program

  8  provided in s. 570.260 are exempt from all taxation by the

  9  state, including income taxes, documentary stamp taxes, and

10  intangible taxes, and interest earned on the bonds and notes

11  is deductible in determining net income for purposes of the

12  corporate income tax under chapter 220.

13         570.266  Reserve funds and appropriations.--The

14  authority may create and establish one or more special funds,

15  each to be known as a "bond reserve fund," and shall pay into

16  each bond reserve fund any moneys appropriated and made

17  available by the state for the purpose of the fund, any

18  proceeds of the sale of notes or bonds to the extent provided

19  in the resolutions of the authority authorizing their

20  issuance, and any other moneys that are available to the

21  authority for the purpose of the fund from any other sources.

22  Moneys held in a bond reserve fund, except as otherwise

23  provided in this act, must be used as required solely for the

24  payment of the principal of bonds secured in whole or in part

25  by the fund or of the sinking fund payments with respect to

26  the bonds, the purchase or redemption of the bonds, the

27  payment of interest on the bonds, or the payments of any

28  redemption premium required to be paid when the bonds are

29  redeemed prior to maturity.

30         570.267  Remedies of bondholders and noteholders.--

31

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  1         (1)  If the authority defaults in the payment of

  2  principal or interest on an issue of bonds or notes at

  3  maturity or upon call for redemption and the default continues

  4  for a period of 30 days, or, if the authority fails or refuses

  5  to comply with the provisions of this act or defaults in an

  6  agreement made with the holders of an issue of bonds or notes,

  7  the holders of 25 percent in aggregate principal amount of

  8  bonds or notes of the issue then outstanding, by instrument

  9  filed in the office of the clerk of Leon County and proved or

10  acknowledged in the same manner as a deed to be recorded, may

11  appoint a trustee to represent the holders of the bonds or

12  notes for the purposes provided in this section.

13  Notwithstanding the foregoing, the authority shall not be

14  deemed in default hereunder if such default can be cured

15  within a reasonable period of time and if the authority in

16  good faith institutes curative action and diligently pursues

17  such action until the default has been corrected.

18         (2)  The authority or any trustee appointed under the

19  indenture under which the bonds or notes are issued may, and

20  upon written request of the holders of 25 percent in aggregate

21  principal amount of the issue of bonds or notes then

22  outstanding, shall:

23         (a)  Enforce all rights of the bondholders or

24  noteholders, including the right to require the authority to

25  carry out its agreements with the holders and to perform its

26  duties under this act.

27         (b)  Bring suit upon the bonds or notes.

28         (c)  By action, require the authority to account as if

29  it were the trustee of an express trust for the holders.

30         (d)  By action, enjoin any acts or things that are

31  unlawful or in violation of the rights of the holders.

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  1         (e)  Declare all the bonds or notes due and payable

  2  and, if all defaults are made good, then with the consent of

  3  the holders of 25 percent of the aggregate principal amount of

  4  the issue of bonds or notes then outstanding annul the

  5  declaration and its consequences.

  6         (3)  The trustee has powers necessary for the exercise

  7  of functions specifically set forth or incident to the general

  8  representation of bondholders or noteholders in the

  9  enforcement and protection of their rights.

10         (4)  Before declaring the principal of bonds or notes

11  due and payable, the trustee shall first give 30 days' notice

12  in writing to the Governor, to the authority, to the

13  Commissioner of Agriculture, and to the Attorney General.

14         (5)  The circuit court has jurisdiction of any action

15  by the trustee on behalf of bondholders or noteholders. The

16  venue of the action is in Leon County.

17

18  The bondholders or noteholders may, to the extent provided in

19  the resolution to which the bonds or notes were issued or in

20  its agreement with the authority, enforce any of the remedies

21  in paragraphs (2)(a)-(e) or the remedies provided in such

22  proceedings or agreements for and on their own behalf.

23         570.268  Agreement of the state.--The state pledges and

24  agrees with the holders of any bonds or notes that the state

25  will not limit or alter the rights vested in the authority to

26  fulfill the terms of agreements made with the holders of such

27  bonds or notes or in any way impair the rights and remedies of

28  the holders of such bonds or notes until the bonds or notes,

29  together with the interest thereon, plus interest on unpaid

30  installments of interest, and all costs and expenses in

31  connection with an action by or on behalf of the holders of

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  1  such bonds are fully met and discharged. The authority may

  2  include this pledge and agreement of the state in any

  3  agreement with the holders of bonds or notes.

  4         570.269  Bonds and notes as legal investments.--Bonds

  5  and notes are securities in which public officers, state

  6  departments and agencies, political subdivisions, pension and

  7  retirement funds, insurance companies and other persons

  8  carrying on an insurance business, banks, trust companies,

  9  savings and loan associations, investment companies, credit

10  unions, and other persons carrying on a banking business,

11  administrators, executors, guardians, conservators, trustees

12  and other fiduciaries, and other persons authorized to invest

13  in bonds or other obligations of this state may legally invest

14  funds, including capital in their control or belonging to

15  them. Bonds and notes are also securities that may be

16  deposited with and received by public officers, state

17  departments and agencies, and political subdivisions for any

18  purpose for which the deposit of bonds or other obligations of

19  this state is authorized.

20         570.270  Moneys of the authority.--

21         (1)  Moneys of the authority, except as otherwise

22  provided in this act, must be paid to the authority and must

23  be deposited in a bank or other financial institution

24  designated by the authority. The moneys of the authority may

25  be withdrawn on the order of the person authorized by the

26  authority. Deposits must be secured in the manner determined

27  by the authority. The Auditor General shall annually examine

28  the accounts and books of the authority, including its

29  receipts, disbursements, contracts, leases, sinking funds,

30  investments, and any other records and papers relating to its

31  financial standing.

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  1         (2)  The authority may contract with holders of its

  2  bonds or notes as to the custody, collection, security,

  3  investment, and payment of moneys of the authority, of moneys

  4  held in trust or otherwise for the payment of bonds or notes

  5  and to carry out the contract. Moneys held in trust or

  6  otherwise for the payment of bonds or notes or in any way to

  7  secure bonds or notes and deposits of the moneys may be

  8  secured in the same manner as moneys of the authority, and

  9  banks and trust companies may give security for the deposits.

10         (3)  Subject to the provisions of any contract with

11  bondholders or noteholders, the authority shall prescribe a

12  system of accounts.

13         (4)  The authority shall submit to the Governor, the

14  Auditor General, the President of the Senate, and the Speaker

15  of the House of Representatives, within 30 days after receipt

16  by the authority, a copy of the report of every external

17  examination of the books and accounts of the authority other

18  than copies of the reports of examinations made by the Auditor

19  General.

20         570.271  Limitation of liability.--Members of the

21  authority and persons acting in its behalf, while acting

22  within the scope of their employment or agency, are not

23  subject to personal liability resulting from carrying out the

24  powers and duties given in this act, and the authority may

25  carry such insurance or other indemnification for any actions

26  arising out of such duties.

27         570.272  Assistance by state officers, agencies, and

28  departments.--State officers, departments, and agencies shall

29  provide services to the authority within their respective

30  functions as requested by the Commissioner of Agriculture.

31

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  1         570.273  Liberal interpretation.--This act, being

  2  necessary for the welfare of this state and its inhabitants,

  3  must be liberally construed to effect its purposes.

  4         570.274  Conflicts of interest.--

  5         (1)  If a member or employee of the authority has an

  6  interest, either direct or indirect, in a contract to which

  7  the authority is a party or in a mortgage lender or other

  8  lender requesting a loan from or offering to sell mortgage or

  9  secured loans to the authority, the interest must be disclosed

10  to the authority in writing and must be set forth in the

11  minutes of the authority. The member or employee having the

12  interest may not participate in an action by the authority

13  with respect to such contract or mortgage lender or other

14  lender.

15         (2)  This section does not limit the right of a member,

16  officer, or employee of the authority to acquire an interest

17  in bonds or notes or limit the right of a member or employee

18  to have an interest in a bank, insurance company, or other

19  financial institution in which the funds of the authority are

20  deposited or which is acting as trustee or paying agent under

21  a trust indenture to which the authority is a party; nor does

22  this section, except as to the disclosures required by

23  subsection (1), preclude an insurance company or financial

24  institution in which an authority board member or employee has

25  an interest from placing insurance, funding bonds, or

26  acquiring or selling notes, mortgages, or other obligations of

27  the authority.

28         (3)  The executive director may not have an interest in

29  a bank or other financial institution in which the funds of

30  the authority are deposited or which is acting as trustee or

31  paying agent under a trust indenture to which the authority is

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  1  a party. The executive director may not receive, in addition

  2  to fixed salary or compensation, any money or valuable thing,

  3  either directly or indirectly or through any substantial

  4  interest in any other corporation or business unit, for

  5  negotiating, procuring, recommending, or aiding in any

  6  purchase or sale of property or loan made by the authority,

  7  nor may the executive director be pecuniarily interested,

  8  either as principal, co-principal, agent, or beneficiary,

  9  either directly or indirectly or through any substantial

10  interest in any other corporation or business unit, in any

11  purchase, sale, or loan.

12         570.275  Exemption from competitive bid laws.--The

13  authority and all contracts made by it in carrying out its

14  public and essential governmental functions are exempt from

15  the laws of the state which provide for competitive bids in

16  connection with such contracts.

17         Section 2.  Section 159.8082, Florida Statutes, is

18  created to read:

19         159.8082  Agricultural development bond pool.--

20         (1)  There is established the agricultural development

21  bond pool.  The agricultural development bond pool is

22  available solely to provide written confirmations for private

23  activity bonds to the Florida Agricultural Development

24  Authority to finance agricultural development as described in

25  ss. 570.251-570.275.  Allocations from this pool must be

26  awarded for use on a statewide basis pursuant to the

27  procedures specified in s. 159.805, except that the provisions

28  of s. 159.805(2) and (3) do not apply.  In issuing written

29  confirmations of allocations for agricultural development

30  projects, the division must use the agricultural development

31  bond pool.  If allocation is not available from the

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  1  agricultural development bond pool, the division must issue

  2  written confirmations of allocations for agricultural

  3  development projects under s. 159.806 or s. 159.807, in that

  4  order.  For the purposes of determining priority within a

  5  regional allocation pool or the state allocation pool, notices

  6  of intent to issue bonds for agricultural development projects

  7  to be issued from a regional allocation pool or the state

  8  allocation pool are considered to have been received by the

  9  division at the time it is determined by the division that the

10  agricultural development bond pool is unavailable to issue

11  confirmation for such agricultural development project.

12         (2)  Any written confirmation issued by the director

13  pursuant to this section has no effect unless the bonds to

14  which such confirmation applies have been issued by the

15  Florida Agricultural Development Authority and written notice

16  of such issuance has been provided to the director on or

17  before November 15, unless a carryforward has been granted for

18  the allocation.

19         Section 3.  Section 159.804, Florida Statutes, is

20  amended to read:

21         159.804  Allocation of state volume limitation.--The

22  division shall annually determine the amount of private

23  activity bonds permitted to be issued in this state under the

24  Code and shall make such information available upon request to

25  any person or agency.  The total amount of private activity

26  bonds authorized to be issued in this state pursuant to the

27  Code shall be initially allocated as follows on January 1 of

28  each year:

29         (1)(a)  On January 1, 1993, the first $75 million of

30  the state volume limitation shall be allocated to the

31  manufacturing facility pool established pursuant to s.

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  1  159.8081. This allocation shall be increased in subsequent

  2  years in increments of $7.5 million as follows:  On January 1

  3  of each year, if at least 75 percent of the preceding year's

  4  allocation under this subsection was used to issue bonds by

  5  November 15 of that year, the allocation to the pool for the

  6  current year must equal the sum of the amount that was

  7  allocated to the pool in the preceding year plus an additional

  8  $7.5 million.  If, however, 75 percent of the preceding year's

  9  allocation was not used to issue bonds by November 15, the

10  allocation to the pool for the current year must be the same

11  amount as that allocated to the pool in the preceding year.

12         (b)  On January 1, 2000, the next $10 million of the

13  state volume limitation must be allocated to the agricultural

14  development pool established under s. 159.8082. This

15  allocation must be increased in subsequent years in increments

16  of $2 million as follows: on January 1 of each year, if at

17  least 75 percent of the preceding year's allocation under this

18  subsection was used to issue bonds by November 15 of that

19  year, the allocation to the pool for the current year must

20  equal the sum of the amount that was allocated to the pool in

21  the preceding year plus an additional $2 million; if, however,

22  75 percent of the preceding year's allocation was not used to

23  issue bonds by November 15, the allocation to the pool for the

24  current year must be the same amount as that allocated to the

25  pool in the preceding year.

26         (c)(b)  If on January 1 of any year, under federal law,

27  bonds for manufacturing facilities or agricultural development

28  no longer require or are eligible for an allocation pursuant

29  to s. 146 of the Code or if a separate volume cap is

30  established for agricultural development bonds under federal

31  law, the allocation of the state volume limitation in the

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  1  manufacturing facility pool or agricultural development pool,

  2  or both, if applicable shall be divided among the remaining

  3  pools in the following manner: 50 percent to be shared by the

  4  16 regions for use in the manner prescribed in subsection (2);

  5  25 percent for use by the Florida Housing Finance Agency in

  6  the manner prescribed in subsection (3); 5 percent for use in

  7  the state allocation pool in the manner prescribed in

  8  subsection (4); and 20 percent for use in the Florida First

  9  Business allocation pool in the manner prescribed in

10  subsection (5).

11         (d)(c)  If the state volume limitation imposed on

12  private activity bonds under s. 146 of the Code is decreased,

13  the amount allocated to the manufacturing facility pool shall

14  be decreased in proportion to the percentage the state volume

15  limitation is decreased.

16         (2)(a)  Fifty percent of the state volume limitation

17  remaining after the allocations allocation made pursuant to

18  subsection (1) shall be allocated among the regions

19  established in paragraph (b) for use by all agencies whose

20  boundaries are coterminous with or contained within each

21  region. The volume limitation for each regional allocation

22  pool must be an amount that bears the same ratio to 50 percent

23  of the state volume limitation remaining after the allocation

24  made pursuant to subsection (1) for such calendar year as the

25  population of the region bears to the population of the entire

26  state.

27         (b)  The following regions are established for the

28  purposes of this allocation:

29         1.  Region 1 consisting of Bay, Escambia, Holmes,

30  Okaloosa, Santa Rosa, Walton, and Washington Counties.

31

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  1         2.  Region 2 consisting of Calhoun, Franklin, Gadsden,

  2  Gulf, Jackson, Jefferson, Leon, Liberty, and Wakulla Counties.

  3         3.  Region 3 consisting of Alachua, Bradford, Columbia,

  4  Dixie, Gilchrist, Hamilton, Lafayette, Madison, Suwannee,

  5  Taylor, and Union Counties.

  6         4.  Region 4 consisting of Baker, Clay, Flagler,

  7  Nassau, Putnam, and St. Johns Counties.

  8         5.  Region 5 consisting of Citrus, Hernando, Levy,

  9  Marion, Pasco, and Sumter Counties.

10         6.  Region 6 consisting of Brevard, Lake, Osceola,

11  Seminole, and Volusia Counties.

12         7.  Region 7 consisting of DeSoto, Hardee, Highlands,

13  Manatee, Okeechobee, and Polk Counties.

14         8.  Region 8 consisting of Charlotte, Collier, Glades,

15  Hendry, Lee, Monroe, and Sarasota Counties.

16         9.  Region 9 consisting of Indian River, Martin, and

17  St. Lucie Counties.

18         10.  Region 10 consisting of Broward County.

19         11.  Region 11 consisting of Dade County.

20         12.  Region 12 consisting of Duval County.

21         13.  Region 13 consisting of Hillsborough County.

22         14.  Region 14 consisting of Orange County.

23         15.  Region 15 consisting of Palm Beach County.

24         16.  Region 16 consisting of Pinellas County.

25         (3)(a)  Twenty-five percent of the state volume

26  limitation remaining after the allocations allocation made

27  pursuant to subsection (1) shall be allocated to the Florida

28  Housing Finance Agency for use in connection with the issuance

29  of housing bonds of that agency or its assigns.

30         (b)  The Florida Housing Finance Agency need not apply

31  to the division for an allocation of its volume limitation

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  1  granted under paragraph (a) for bonds it issues prior to July

  2  1 of any year and is not subject to the fee required under s.

  3  159.811.  However, for bonds it intends to issue between July

  4  1 and September 29 of any year, utilizing the allocation

  5  granted under paragraph (a), the Florida Housing Finance

  6  Agency must submit a notice of intent to issue to the division

  7  not later than June 30 of such year, and a written

  8  confirmation of allocation shall be granted if a sufficient

  9  amount of that allocation is available.

10         (c)  The Florida Housing Finance Agency, in its

11  discretion, may, prior to July 1 of each year, assign any

12  portion of the Florida Housing Finance Agency allocation to

13  any agency for the issuance of housing bonds, taking into

14  consideration the ability of the agency to timely issue such

15  bonds, the need and public purpose to be served by the issue,

16  and the ability of the agency to comply with the requirements

17  of federal and state law.  Such assignment is not effective

18  until receipt by the division of notification of the

19  assignment.  A separate allocation from the division is not

20  needed for bonds issued prior to July 1 utilizing such an

21  assignment.  An agency that intends to utilize such an

22  assignment to issue housing bonds between July 1 and September

23  29 of any year must submit a notice of intent to issue to the

24  division for the amount of such assignment not later than June

25  30, and a written confirmation of allocation shall be granted

26  if a sufficient amount of the allocation under paragraph (a)

27  is available.  Any amounts representing assignments of which

28  the division had been notified by the Florida Housing Finance

29  Agency but for which an issuance report or notice of intent to

30  issue pursuant to this subsection has not been received by the

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    Florida Senate - 1999                            CS for SB 146
    303-2194-99




  1  division by June 30 of any year shall be reallocated to the

  2  state allocation pool on July 1 of that year.

  3         (4)  Five percent of the state volume limitation

  4  remaining after the allocations allocation made pursuant to

  5  subsection (1) shall be allocated to the state allocation

  6  pool, for use as provided in s. 159.807.

  7         (5)  Twenty percent of the state volume limitation

  8  remaining after the allocations allocation made pursuant to

  9  subsection (1) shall be allocated to the Florida First

10  Business allocation pool, to be used as provided in s.

11  159.8083.

12         Section 4.  Subsection (3) of section 159.809, Florida

13  Statutes, is amended to read:

14         159.809  Recapture of unused amounts.--

15         (3)  On November 16 of each year, any portion of the

16  initial allocation, made pursuant to s. 159.804(1), s.

17  159.804(5), or subsection (1) or subsection (2), other than as

18  provided in ss. 159.8082 and s. 159.8083, for which an

19  issuance report for bonds utilizing such an allocation has not

20  been received by the division prior to that date shall be

21  added to the state allocation pool.

22         Section 5.  This act shall take effect July 1, 1999.

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    Florida Senate - 1999                            CS for SB 146
    303-2194-99




  1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
  2                         Senate Bill 146

  3

  4  Committee Substitute for Senate Bill 146 is different from
    Senate Bill 146 in that it:
  5
    -     Provides that the Florida Agricultural Development
  6        Authority (FADA) shall be operated under the supervision
          of the Commissioner of Agriculture.
  7
    -     Authorizes the commissioner to appoint a seven-member
  8        board which shall include:

  9       --     The commissioner or a designee,

10       --     One member from the Farm Credit System,

11       --     One member from the Florida State Rural
                Development Council,
12
         --     One member from the Florida Farm Bureau
13              Federation,

14       --     One member who is an agricultural economist,

15       --     One member with bonding or lending experience, and

16       --     One member at large.

17  -     Authorizes the FADA to adopt rules for administration of
          the authority.
18
    -     Revises provisions related to conflicts of interest.
19
    -     Deletes a provision directing the FADA to apply to the
20        United States Secretary of Agriculture for the transfer
          of trust assets of the Florida Rural Rehabilitation
21        Corporation.

22  -     Deletes a provision authorizing the FADA to enter into
          specified agreements.
23
    -     Deletes a provision providing freedom from liability for
24        the United States, the FADA, and the United States
          Secretary of Agriculture regarding the transfer of
25        assets to the FADA.

26  -     Deletes a provision allowing the FADA to enter into
          additional beginning farmer loan programs.
27
    -     Deletes a provision authorizing the FADA to establish
28        and develop an agricultural loan assistance program to
          provide operating capital to farmers, agricultural
29        producers, or agricultural processors by providing
          grants to lending or educational institutions.
30
    -     Deletes a provision requiring the FADA to create and
31        develop alternative agriculture assistance programs.

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