1 | A bill to be entitled |
2 | An act relating to economic development; creating s. |
3 | 288.7017, F.S.; providing a short title; creating the |
4 | Microenterprise Development Program within the Office of |
5 | Tourism, Trade, and Economic Development; providing the |
6 | purpose of the program; providing definitions; requiring |
7 | the office to select community development financial |
8 | institutions to issue microenterprise loans and provide |
9 | business skills development services for |
10 | microentrepreneurs; providing criteria and application |
11 | procedures for the selection of community development |
12 | financial institutions; requiring that the office give |
13 | priority to the selection of certain community development |
14 | financial institutions; requiring a community development |
15 | financial institution to enter into a grant agreement; |
16 | providing eligibility criteria for the award of loans to |
17 | microenterprises; providing application procedures; |
18 | requiring loan agreements; providing terms of loans; |
19 | providing for use of loan proceeds; providing for the |
20 | disbursement of certain funds from the Economic |
21 | Development Trust Fund; providing for the collection and |
22 | deposit of loan payments; requiring community development |
23 | financial institutions to submit a report to the office; |
24 | providing that certain financial instruments used to |
25 | secure loans are exempt from certain taxes; providing for |
26 | reversion and carryforward of certain unexpended |
27 | appropriations; requiring a community development |
28 | financial institution to enter into a grant agreement; |
29 | authorizing a community development financial institution |
30 | to subcontract for certain services; specifying that |
31 | business skills development services must include certain |
32 | activities; requiring community development financial |
33 | institutions to submit a report to the office; requiring |
34 | that grant funds be used only for expenditures that meet |
35 | certain federal matching requirements; requiring the |
36 | office to submit a report to the Governor and Legislature; |
37 | requiring the office to adopt rules; providing an |
38 | appropriation; providing an effective date. |
39 |
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40 | Be It Enacted by the Legislature of the State of Florida: |
41 |
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42 | Section 1. Section 288.7017, Florida Statutes, is created |
43 | to read: |
44 | 288.7017 Microenterprise Development Program.-- |
45 | (1) SHORT TITLE.--This section may be cited as the |
46 | "Florida Microenterprise Development Act." |
47 | (2) CREATION AND PURPOSE OF PROGRAM.--The Microenterprise |
48 | Development Program is created within the Office of Tourism, |
49 | Trade, and Economic Development. The purpose of the program is |
50 | to provide grants to community development financial |
51 | institutions used to provide microenterprise loans and business |
52 | skills development services for microentrepreneurs to match |
53 | federal funds for the development and support of investment |
54 | areas or targeted populations. |
55 | (3) DEFINITIONS.--As used in this section, the term: |
56 | (a) "Community development financial institution" means a |
57 | community development financial institution selected by the |
58 | Community Development Financial Institutions Fund pursuant to 12 |
59 | U.S.C. s. 4706 to receive financial assistance from the Federal |
60 | Government. |
61 | (b) "Investment area" has the same meaning as in 12 U.S.C. |
62 | s. 4702. |
63 | (c) "Microenterprise" means a business that is eligible |
64 | for financial assistance from a community development financial |
65 | institution under 12 U.S.C. s. 4707(b), that employs five or |
66 | fewer persons, and that is located in an investment area or |
67 | whose owner is a member of a targeted population. |
68 | (d) "Microentrepreneur" means the current or prospective |
69 | owner of a microenterprise. |
70 | (e) "Office" means the Office of Tourism, Trade, and |
71 | Economic Development. |
72 | (f) "Targeted population" has the same meaning as in 12 |
73 | U.S.C. s. 4702. |
74 | (4) SELECTION OF COMMUNITY DEVELOPMENT FINANCIAL |
75 | INSTITUTIONS; APPLICATION.--The office shall select one or more |
76 | community development financial institutions to participate in |
77 | the program. A community development financial institution |
78 | seeking to participate must apply to the office in the format |
79 | and according to the procedures prescribed by the office. An |
80 | application must include: |
81 | (a) The applicant's name and federal employer |
82 | identification number. |
83 | (b) The street address of the applicant's principal place |
84 | of business in this state. |
85 | (c) Evidence that the applicant is a community development |
86 | financial institution. |
87 | (d) A copy of the applicant's comprehensive strategic plan |
88 | submitted to the Community Development Financial Institutions |
89 | Fund pursuant to 12 U.S.C. s. 4704. |
90 | (e) A copy of the current assistance agreement entered |
91 | into between the applicant and the Community Development |
92 | Financial Institutions Fund pursuant to 12 U.S.C. s. 4707 and |
93 | evidence that the applicant has substantially met its |
94 | performance goals and otherwise carried out its responsibilities |
95 | under the assistance agreement. |
96 | (f) A detailed description of the investment area or |
97 | targeted population that the applicant intends to serve using |
98 | the grant funds provided under this section. |
99 | (g) The number of net new full-time equivalent jobs that, |
100 | as a result of the grant, the applicant proposes to create in |
101 | this state and the average annual wages of the proposed jobs. |
102 | (h) If the applicant proposes to issue microenterprise |
103 | loans under subsection (5), the applicant's plan for its |
104 | proposed lending activities, including, but not limited to, a |
105 | description of its outreach efforts, underwriting, credit |
106 | policies and procedures, credit decision processes, monitoring |
107 | policies and procedures, collection practices, and samples of |
108 | its current loan documentation. The office shall give priority |
109 | to the selection of a community development financial |
110 | institution that has the capacity to issue all available loans |
111 | within 2 years after being selected. |
112 | (i) If the applicant proposes to provide business skills |
113 | development services for microentrepreneurs under subsection |
114 | (6), the applicant's plan for its proposed training activities, |
115 | including, but not limited to, a description of its outreach |
116 | efforts, a description of the business skills development |
117 | services to be provided, whether the applicant plans to provide |
118 | the services directly, and, if not, the name of the community |
119 | organization with whom the applicant plans to subcontract for |
120 | those services. |
121 | (5) MICROENTERPRISE LOANS.-- |
122 | (a) The office, upon selecting a community development |
123 | financial institution to issue microenterprise loans, shall |
124 | enter into a grant agreement with the institution. The grant |
125 | agreement must specify the aggregate amount of the loans |
126 | authorized for award by the community development financial |
127 | institution. The office may terminate the agreement at any time |
128 | if the community development financial institution fails to meet |
129 | minimum performance standards set by the office. The grant |
130 | agreement may be amended by mutual consent of both parties. |
131 | (b) To be eligible for a loan, a borrower must be a |
132 | microenterprise. A borrower must submit a written application to |
133 | the community development financial institution in the format |
134 | prescribed by the institution. The application, at a minimum, |
135 | must include: |
136 | 1. The loan applicant's federal employer identification |
137 | number, unemployment account number, and sales or other tax |
138 | registration number. |
139 | 2. The street address of the applicant's principal place |
140 | of business in this state. |
141 | 3. A description of the type of economic activity, |
142 | product, or research and development undertaken by the |
143 | applicant, including the six-digit North American Industry |
144 | Classification System code for each type of economic activity |
145 | conducted by the applicant. |
146 | 4. The applicant's annual revenue, number of employees, |
147 | and number of full-time equivalent employees. |
148 | 5. The projected investment in the business, if any, which |
149 | the applicant proposes in conjunction with the loan. |
150 | 6. The total investment in the business from all sources, |
151 | if any, which the applicant proposes in conjunction with the |
152 | loan. |
153 | 7. The number of net new full-time equivalent jobs that, |
154 | as a result of the loan, the applicant proposes to create in |
155 | this state as of December 31 of each year and the average annual |
156 | wages of the proposed jobs. |
157 | 8. The total number of full-time equivalent employees the |
158 | applicant currently employs in this state. |
159 | 9. The date that the applicant anticipates it needs the |
160 | loan. |
161 | 10. A detailed explanation of how the loan will assist the |
162 | applicant in expanding jobs in the state. |
163 | 11. A statement that all of the applicant's available |
164 | corporate assets are pledged as collateral for the amount of the |
165 | loan. |
166 | 12. A statement that the applicant, upon receiving the |
167 | loan, agrees not to seek additional long-term debt without prior |
168 | approval of the community development financial institution. |
169 | 13. A statement that the loan is a joint obligation of the |
170 | business and of each person who owns at least 20 percent of the |
171 | business. |
172 | 14. Any additional information requested by the office or |
173 | the community development financial institution. |
174 | (c) A community development financial institution, after |
175 | verifying the accuracy of a submitted application, shall award |
176 | the loan to the applicant if the institution determines that the |
177 | applicant, as compared to other applicants submitting |
178 | applications, is in the best position to use the loan to |
179 | continue making a successful long-term business commitment to |
180 | the state. The community development financial institution shall |
181 | also consider the following factors: |
182 | 1. Whether the applicant has applied for or received |
183 | incentives from a local government. |
184 | 2. Whether the applicant has applied for or received |
185 | waivers of taxes, impact fees, or other fees or charges by local |
186 | governments. |
187 | 3. What other sources of investments or financing for the |
188 | project that is the subject of the loan application will be |
189 | available to the applicant. |
190 | (d) A borrower awarded a loan under this section and the |
191 | community development financial institution awarding the loan |
192 | must enter into a loan agreement that provides for the |
193 | borrower's repayment of the loan. |
194 | (e) The following terms apply to a loan received under the |
195 | program: |
196 | 1. The maximum amount of the loan is $35,000. |
197 | 2. The proceeds of the loan may be used for working |
198 | capital purchases, employee training, or salaries for newly |
199 | created jobs in the state. |
200 | 3. The security interest for the loan's collateral |
201 | covering all of the borrower's available corporate assets to |
202 | cover the amount of the loan must be perfected by recording a |
203 | lien under the Uniform Commercial Code. |
204 | (f) The office shall disburse from the Economic |
205 | Development Trust Fund to a community development financial |
206 | institution the appropriations provided for a microenterprise |
207 | loan. Disbursements to a community development financial |
208 | institution must not exceed the aggregate amount of the loans |
209 | authorized in the grant agreement. |
210 | (g) A community development financial institution shall |
211 | remit a borrower's collected interest, principal payments, and |
212 | charges for late payments to the office on a quarterly basis. If |
213 | the borrower defaults on the loan, the community development |
214 | financial institution shall initiate collection efforts to seek |
215 | repayment of the loan. The community development financial |
216 | institution, upon collecting payments for a defaulted loan, |
217 | shall remit the payments to the office but, to the extent |
218 | authorized in the grant agreement, may deduct the costs of the |
219 | institution's collection efforts. The office shall deposit all |
220 | funds received under this paragraph in the General Revenue Fund. |
221 | (h) A community development financial institution shall |
222 | submit quarterly reports to the office that include the |
223 | information required in the grant agreement. A quarterly report |
224 | must include, at a minimum, the number of full-time equivalent |
225 | jobs created as a result of the loans, the amount of wages paid |
226 | to employees in the newly created jobs, and the locations and |
227 | types of economic activity undertaken by the borrowers. |
228 | (i) All notes, mortgages, security agreements, letters of |
229 | credit, or other instruments that are given to secure the |
230 | repayment of loans issued in connection with the financing of |
231 | any loan under the program, without regard to the status of any |
232 | party thereto as a private party, are exempt from taxation by |
233 | the state and its political subdivisions. The exemption granted |
234 | in this subsection does not apply to any tax imposed by chapter |
235 | 220 on interest, income, or profits on debt obligations owned by |
236 | corporations. |
237 | (j) Unexpended balances of appropriations provided for |
238 | microenterprise loans shall not revert to the fund from which |
239 | the appropriation was made at the end of a fiscal year but shall |
240 | be retained in the Economic Development Trust Fund and be |
241 | carried forward for expenditure for microenterprise loans during |
242 | the next fiscal year. |
243 | (6) BUSINESS SKILLS DEVELOPMENT SERVICES FOR |
244 | MICROENTREPRENEURS.-- |
245 | (a) The office, upon selecting a community development |
246 | financial institution to provide business skills development |
247 | services for microentrepreneurs, shall enter into a grant |
248 | agreement with the institution. The grant agreement must specify |
249 | the amount of the grant and the business skills development |
250 | services to be provided by the community development financial |
251 | institution. The office may terminate the agreement at any time |
252 | if the community development financial institution fails to meet |
253 | minimum performance standards set by the office. The grant |
254 | agreement may be amended by mutual consent of both parties. |
255 | (b) A community development financial institution may |
256 | provide the business skills development services directly or |
257 | subcontract with a community organization to provide those |
258 | services for microentrepreneurs. |
259 | (c) The office shall disburse from the Economic |
260 | Development Trust Fund to a community development financial |
261 | institution the appropriations provided for the business skills |
262 | development services for microentrepreneurs. Disbursements to a |
263 | community development financial institutions must not exceed the |
264 | amount of the grant authorized in the grant agreement. |
265 | (d) The business skill development services shall include, |
266 | but are not limited to, business planning and financial |
267 | literacy. |
268 | (e) A community development financial institution shall |
269 | submit quarterly reports to the office that include the |
270 | information required in the grant agreement. A quarterly report |
271 | must include, at a minimum, the number of microentrepreneurs |
272 | receiving business skills development services and a description |
273 | of those services. |
274 | (7) FEDERAL MATCHING REQUIREMENTS.--Grant funds received |
275 | by a community development financial institution under this |
276 | section may only be used for expenditures that meet federal |
277 | matching requirements under 12 U.S.C. s. 4707(e). |
278 | (8) On June 30 of each year, beginning in 2010, the office |
279 | shall submit a report to the Governor, the President of the |
280 | Senate, and the Speaker of the House of Representatives that |
281 | describes in detail the use of the grant funds. The report must |
282 | include, at a minimum, the number of microenterprises receiving |
283 | loans, the number of full-time equivalent jobs created as a |
284 | result of the loans, the amount of wages paid to employees in |
285 | the newly created jobs, the locations and types of economic |
286 | activity undertaken by the borrowers, the amounts of loan |
287 | repayments made to date, the default rate of borrowers, the |
288 | number of microentrepreneurs receiving business skills |
289 | development services, and a description of those services. |
290 | (9) RULEMAKING.--The office shall adopt rules under ss. |
291 | 120.536(1) and 120.54 to administer this section. |
292 | Section 2. The sum of $5 million is transferred from the |
293 | General Revenue Fund to the Economic Development Trust Fund and |
294 | appropriated to the Office of Tourism, Trade, and Economic |
295 | Development for purposes of implementing the Microenterprise |
296 | Development Program in s. 288.7017, Florida Statutes, during the |
297 | 2009-2010 fiscal year. From among these funds, no more than $1 |
298 | million may be used to provide business skills development |
299 | services for microentrepreneurs. The remaining funds shall be |
300 | used to provide microenterprise loans. |
301 | Section 3. This act shall take effect July 1, 2009. |