House Bill hb1323e1

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                                   CS/HB 1323, First Engrossed/ntc



  1                      A bill to be entitled

  2         An act relating to the Florida Minority

  3         Business Loan Mobilization Program; creating s.

  4         288.706, F.S.; providing legislative findings

  5         and intent; creating the Florida Minority

  6         Business Loan Mobilization Program for certain

  7         purposes; providing for program administration

  8         by the Department of Management Services;

  9         authorizing state agencies to disburse a

10         certain amount of a contract award to assist

11         certain minority business enterprise vendors in

12         obtaining working capital financing;

13         authorizing professional services vendors to

14         apply for a specified percentage of a base

15         contract amount; specifying procedures for the

16         program; providing for working capital

17         agreements and lines of credit; providing

18         requirements and limitations; providing

19         requirements for prime contract vendors;

20         providing requirements for subcontract vendors;

21         providing contracting state agency requirements

22         and limitations; authorizing the department to

23         adopt rules; requiring the department to

24         maintain a listing of participating financial

25         institutions; providing an effective date.

26

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

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29         Section 1.  Section 288.706, Florida Statutes, is

30  created to read:

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                                   CS/HB 1323, First Engrossed/ntc



  1         288.706  Florida Minority Business Loan Mobilization

  2  Program.--

  3         (1)  The Legislature finds that it is in the interest

  4  of the public welfare to meaningfully assist minority business

  5  enterprises that are vital to the overall economy of this

  6  state. It is the intent of the Legislature to promote

  7  diversity in state contracting by eliminating barriers to

  8  minority business enterprises providing goods and services to

  9  this state. Finally, the Legislature recognizes the

10  contribution of minority business enterprises to employment

11  opportunities in this state.

12         (2)  The Florida Minority Business Loan Mobilization

13  Program is created to promote the development of minority

14  business enterprises, as defined in s. 288.703(2), increase

15  the ability of minority business enterprises to compete for

16  state contracts, and sustain the economic growth of minority

17  business enterprises in this state. The goal of the program is

18  to assist minority business enterprises by facilitating

19  working capital loans to minority business enterprises that

20  are vendors on state agency contracts. The Department of

21  Management Services shall administer the program.

22         (3)  Notwithstanding ss. 215.422(14) and 216.181(16),

23  under the Florida Minority Business Loan Mobilization Program,

24  a state agency may disburse up to 10 percent of the base

25  contract award amount to assist a minority business enterprise

26  vendor that is awarded a state agency contract for goods or

27  services in obtaining working capital financing as provided in

28  subsection (5).

29         (4)  Notwithstanding ss. 215.422(14) and 216.181(16),

30  and pursuant to s. 216.351, in lieu of applying for

31  participation in the Florida Minority Business Loan


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                                   CS/HB 1323, First Engrossed/ntc



  1  Mobilization Program, a minority business enterprise vendor

  2  awarded a state agency contract for the performance of

  3  professional services may apply with that contracting state

  4  agency for up to 5 percent of the base contract award amount.

  5  The contracting state agency may award such advance in order

  6  to facilitate the performance of that contract.

  7         (5)  The following Florida Minority Business Loan

  8  Mobilization Program procedures apply to minority business

  9  enterprise vendors for contracts awarded by a state agency for

10  construction or professional services or for the provision of

11  goods or services:

12         (a)  Upon receipt of an award of a prime contract or

13  subcontract, a minority business enterprise vendor may seek to

14  obtain working capital financing from a participating

15  financial institution. The minority business enterprise vendor

16  shall complete all the necessary requirements of the

17  participating financial institution in order to obtain a

18  working capital agreement. A minority business enterprise

19  vendor shall only be entitled to participate in the program if

20  a working capital agreement is established with a

21  participating financial institution.

22         (b)  The working capital agreement may provide for a

23  line of credit that is no less than 125 percent and no more

24  than 200 percent of the designated loan mobilization payment

25  described in paragraph (c).

26         (c)  The designated loan mobilization payment is that

27  portion of the base contract award amount that is to be

28  disbursed by the agency under this section. The actual amount

29  of the designated loan mobilization payment shall be no less

30  than $5,000 and no greater than $250,000. The amount of the

31  designated loan mobilization payment shall be:


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                                   CS/HB 1323, First Engrossed/ntc



  1         1.  No less than 5 percent and no more than 10 percent

  2  of the base contract award amount between the minority

  3  business enterprise prime contract vendor and the contracting

  4  state agency; or

  5         2.  No less than 5 percent and no more than 10 percent

  6  of the base contract award amount between a minority business

  7  enterprise subcontract vendor and a minority business

  8  enterprise or nonminority business enterprise prime contract

  9  vendor.

10         (d)  The designated loan mobilization payment shall be

11  disbursed pursuant to the working capital agreement and this

12  subsection and shall be made payable by the contracting state

13  agency to the minority business enterprise prime contract

14  vendor and the participating financial institution using the

15  tax identification number of the minority business enterprise

16  vendor that is the debtor under the working capital agreement.

17         (e)  The following procedures shall apply when the

18  minority business enterprise is the prime contract vendor to

19  the contracting state agency:

20         1.  The provisions of ss. 215.422(14) and 216.181(16)

21  do not apply to this paragraph.

22         2.  For construction contracts, the designated loan

23  mobilization payment shall be disbursed when:

24         a.  The minority business enterprise prime contract

25  vendor requests disbursement in the first application for

26  payment.

27         b.  The contracting state agency has issued a notice to

28  proceed and has approved the first application for payment.

29         3.  For contracts other than construction contracts,

30  the designated loan mobilization payment shall be disbursed

31  when:


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                                   CS/HB 1323, First Engrossed/ntc



  1         a.  The minority business enterprise prime contract

  2  vendor requests disbursement by letter delivered to the

  3  contracting state agency after the execution of the contract

  4  but prior to the commencement of work.

  5         b.  The contracting state agency has approved the

  6  minority business enterprise prime contract vendor's letter of

  7  request.

  8         4.  The designated loan mobilization payment may be

  9  paid by the contracting state agency prior to the commencement

10  of work. In order to ensure that the contract time provisions

11  do not commence until the minority business enterprise prime

12  contract vendor has adequate working capital, the contract

13  documents may provide that the contract shall commence at such

14  time as the contracting state agency releases the designated

15  loan mobilization payment to the minority business enterprise

16  prime contract vendor and participating financial institution

17  pursuant to the working capital agreement.

18         (f)  The following procedures shall apply when the

19  minority business enterprise is the subcontract vendor:

20         1.  For purposes of this paragraph, the term "minority

21  business enterprise subcontract vendor" is limited to

22  subcontractors and suppliers to prime contract vendors that

23  contract with a state agency.

24         2.  A designated loan mobilization payment for a

25  minority business enterprise subcontract vendor shall be made:

26         a.  Upon approval by the contracting state agency of a

27  letter from the minority business enterprise subcontract

28  vendor and prime contract vendor that requests the designated

29  loan mobilization payment and that indicates that the prime

30  contract vendor is on notice of the request.

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                                   CS/HB 1323, First Engrossed/ntc



  1         b.  Payable to the prime contract vendor and the

  2  participating financial institution, which shall pay these

  3  funds to the minority business enterprise subcontract vendor

  4  within 10 business days after the receipt of the funds from

  5  the state.

  6         3.  No prime contract vendor shall retain more than 5

  7  percent of the amount earned by a minority business enterprise

  8  subcontract vendor participating in this program, except that

  9  if the prime contract vendor is also participating in this

10  program, the amount the prime contract vendor retains shall be

11  subject to the provisions governing prime contract vendors.

12         (6)  All prime contract vendors shall be required to

13  incorporate the designated loan mobilization payment

14  procedures in subcontract agreements or purchase orders with

15  minority business enterprise vendors participating in this

16  program and to cooperate in the release of designated loan

17  mobilization payments to achieve the objective of providing

18  working capital for minority business enterprise subcontract

19  vendors.

20         (7)  The contracting state agency shall encourage prime

21  contract vendors to make weekly or biweekly payments to

22  minority business enterprise subcontract vendors participating

23  in this program.

24         (8)  The contracting state agency shall monitor

25  compliance with this section. Nothing contained in this

26  section shall be construed to limit the contracting state

27  agency's right to insist upon strict compliance with the

28  requirements of the contract documents.

29         (9)  The contracting state agency shall not be a party

30  to a working capital agreement between a participating

31  financial institution and a participating minority business


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                                   CS/HB 1323, First Engrossed/ntc



  1  enterprise vendor. The participating financial institution

  2  shall notify the contracting state agency head of vendor

  3  program applications received by such institution.

  4         (10)  The Department of Management Services may adopt

  5  rules to implement the provisions of this section.

  6         (11)  The Department of Management Services shall

  7  maintain a listing of financial institutions willing to

  8  participate in the Florida Minority Business Loan Mobilization

  9  Program. This list of financial institutions shall not be

10  exclusive. A minority business enterprise vendor who has a

11  working relationship with a financial institution is

12  encouraged to request that the financial institution apply to

13  participate as a financial institution for the program.

14         Section 2.  This act shall take effect October 1, 2002.

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