HB 1149

1
A bill to be entitled
2An act relating to economic development; creating s.
3288.7017, F.S.; providing a short title; creating the
4Microenterprise Development Program within the Office of
5Tourism, Trade, and Economic Development; providing the
6purpose of the program; providing definitions; requiring
7the office to select community development financial
8institutions to issue microenterprise loans and provide
9business skills development services for
10microentrepreneurs; providing criteria and application
11procedures for the selection of community development
12financial institutions; requiring that the office give
13priority to the selection of certain community development
14financial institutions; requiring a community development
15financial institution to enter into a grant agreement;
16providing eligibility criteria for the award of loans to
17microenterprises; providing application procedures;
18requiring loan agreements; providing terms of loans;
19providing for use of loan proceeds; providing for the
20disbursement of certain funds from the Economic
21Development Trust Fund; providing for the collection and
22deposit of loan payments; requiring community development
23financial institutions to submit a report to the office;
24providing that certain financial instruments used to
25secure loans are exempt from certain taxes; providing for
26reversion and carryforward of certain unexpended
27appropriations; requiring a community development
28financial institution to enter into a grant agreement;
29authorizing a community development financial institution
30to subcontract for certain services; specifying that
31business skills development services must include certain
32activities; requiring community development financial
33institutions to submit a report to the office; requiring
34that grant funds be used only for expenditures that meet
35certain federal matching requirements; requiring the
36office to submit a report to the Governor and Legislature;
37requiring the office to adopt rules; providing an
38appropriation; providing an effective date.
39
40Be It Enacted by the Legislature of the State of Florida:
41
42     Section 1.  Section 288.7017, Florida Statutes, is created
43to 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
48Development Program is created within the Office of Tourism,
49Trade, and Economic Development. The purpose of the program is
50to provide grants to community development financial
51institutions used to provide microenterprise loans and business
52skills development services for microentrepreneurs to match
53federal funds for the development and support of investment
54areas or targeted populations.
55     (3)  DEFINITIONS.--As used in this section, the term:
56     (a)  "Community development financial institution" means a
57community development financial institution selected by the
58Community Development Financial Institutions Fund pursuant to 12
59U.S.C. s. 4706 to receive financial assistance from the Federal
60Government.
61     (b)  "Investment area" has the same meaning as in 12 U.S.C.
62s. 4702.
63     (c)  "Microenterprise" means a business that is eligible
64for financial assistance from a community development financial
65institution under 12 U.S.C. s. 4707(b), that employs five or
66fewer persons, and that is located in an investment area or
67whose owner is a member of a targeted population.
68     (d)  "Microentrepreneur" means the current or prospective
69owner of a microenterprise.
70     (e)  "Office" means the Office of Tourism, Trade, and
71Economic Development.
72     (f)  "Targeted population" has the same meaning as in 12
73U.S.C. s. 4702.
74     (4)  SELECTION OF COMMUNITY DEVELOPMENT FINANCIAL
75INSTITUTIONS; APPLICATION.--The office shall select one or more
76community development financial institutions to participate in
77the program. A community development financial institution
78seeking to participate must apply to the office in the format
79and according to the procedures prescribed by the office. An
80application must include:
81     (a)  The applicant's name and federal employer
82identification number.
83     (b)  The street address of the applicant's principal place
84of business in this state.
85     (c)  Evidence that the applicant is a community development
86financial institution.
87     (d)  A copy of the applicant's comprehensive strategic plan
88submitted to the Community Development Financial Institutions
89Fund pursuant to 12 U.S.C. s. 4704.
90     (e)  A copy of the current assistance agreement entered
91into between the applicant and the Community Development
92Financial Institutions Fund pursuant to 12 U.S.C. s. 4707 and
93evidence that the applicant has substantially met its
94performance goals and otherwise carried out its responsibilities
95under the assistance agreement.
96     (f)  A detailed description of the investment area or
97targeted population that the applicant intends to serve using
98the grant funds provided under this section.
99     (g)  The number of net new full-time equivalent jobs that,
100as a result of the grant, the applicant proposes to create in
101this state and the average annual wages of the proposed jobs.
102     (h)  If the applicant proposes to issue microenterprise
103loans under subsection (5), the applicant's plan for its
104proposed lending activities, including, but not limited to, a
105description of its outreach efforts, underwriting, credit
106policies and procedures, credit decision processes, monitoring
107policies and procedures, collection practices, and samples of
108its current loan documentation. The office shall give priority
109to the selection of a community development financial
110institution that has the capacity to issue all available loans
111within 2 years after being selected.
112     (i)  If the applicant proposes to provide business skills
113development services for microentrepreneurs under subsection
114(6), the applicant's plan for its proposed training activities,
115including, but not limited to, a description of its outreach
116efforts, a description of the business skills development
117services to be provided, whether the applicant plans to provide
118the services directly, and, if not, the name of the community
119organization with whom the applicant plans to subcontract for
120those services.
121     (5)  MICROENTERPRISE LOANS.--
122     (a)  The office, upon selecting a community development
123financial institution to issue microenterprise loans, shall
124enter into a grant agreement with the institution. The grant
125agreement must specify the aggregate amount of the loans
126authorized for award by the community development financial
127institution. The office may terminate the agreement at any time
128if the community development financial institution fails to meet
129minimum performance standards set by the office. The grant
130agreement may be amended by mutual consent of both parties.
131     (b)  To be eligible for a loan, a borrower must be a
132microenterprise. A borrower must submit a written application to
133the community development financial institution in the format
134prescribed by the institution. The application, at a minimum,
135must include:
136     1.  The loan applicant's federal employer identification
137number, unemployment account number, and sales or other tax
138registration number.
139     2.  The street address of the applicant's principal place
140of business in this state.
141     3.  A description of the type of economic activity,
142product, or research and development undertaken by the
143applicant, including the six-digit North American Industry
144Classification System code for each type of economic activity
145conducted by the applicant.
146     4.  The applicant's annual revenue, number of employees,
147and number of full-time equivalent employees.
148     5.  The projected investment in the business, if any, which
149the applicant proposes in conjunction with the loan.
150     6.  The total investment in the business from all sources,
151if any, which the applicant proposes in conjunction with the
152loan.
153     7.  The number of net new full-time equivalent jobs that,
154as a result of the loan, the applicant proposes to create in
155this state as of December 31 of each year and the average annual
156wages of the proposed jobs.
157     8.  The total number of full-time equivalent employees the
158applicant currently employs in this state.
159     9.  The date that the applicant anticipates it needs the
160loan.
161     10.  A detailed explanation of how the loan will assist the
162applicant in expanding jobs in the state.
163     11.  A statement that all of the applicant's available
164corporate assets are pledged as collateral for the amount of the
165loan.
166     12.  A statement that the applicant, upon receiving the
167loan, agrees not to seek additional long-term debt without prior
168approval of the community development financial institution.
169     13.  A statement that the loan is a joint obligation of the
170business and of each person who owns at least 20 percent of the
171business.
172     14.  Any additional information requested by the office or
173the community development financial institution.
174     (c)  A community development financial institution, after
175verifying the accuracy of a submitted application, shall award
176the loan to the applicant if the institution determines that the
177applicant, as compared to other applicants submitting
178applications, is in the best position to use the loan to
179continue making a successful long-term business commitment to
180the state. The community development financial institution shall
181also consider the following factors:
182     1.  Whether the applicant has applied for or received
183incentives from a local government.
184     2.  Whether the applicant has applied for or received
185waivers of taxes, impact fees, or other fees or charges by local
186governments.
187     3.  What other sources of investments or financing for the
188project that is the subject of the loan application will be
189available to the applicant.
190     (d)  A borrower awarded a loan under this section and the
191community development financial institution awarding the loan
192must enter into a loan agreement that provides for the
193borrower's repayment of the loan.
194     (e)  The following terms apply to a loan received under the
195program:
196     1.  The maximum amount of the loan is $35,000.
197     2.  The proceeds of the loan may be used for working
198capital purchases, employee training, or salaries for newly
199created jobs in the state.
200     3.  The security interest for the loan's collateral
201covering all of the borrower's available corporate assets to
202cover the amount of the loan must be perfected by recording a
203lien under the Uniform Commercial Code.
204     (f)  The office shall disburse from the Economic
205Development Trust Fund to a community development financial
206institution the appropriations provided for a microenterprise
207loan. Disbursements to a community development financial
208institution must not exceed the aggregate amount of the loans
209authorized in the grant agreement.
210     (g)  A community development financial institution shall
211remit a borrower's collected interest, principal payments, and
212charges for late payments to the office on a quarterly basis. If
213the borrower defaults on the loan, the community development
214financial institution shall initiate collection efforts to seek
215repayment of the loan. The community development financial
216institution, upon collecting payments for a defaulted loan,
217shall remit the payments to the office but, to the extent
218authorized in the grant agreement, may deduct the costs of the
219institution's collection efforts. The office shall deposit all
220funds received under this paragraph in the General Revenue Fund.
221     (h)  A community development financial institution shall
222submit quarterly reports to the office that include the
223information required in the grant agreement. A quarterly report
224must include, at a minimum, the number of full-time equivalent
225jobs created as a result of the loans, the amount of wages paid
226to employees in the newly created jobs, and the locations and
227types of economic activity undertaken by the borrowers.
228     (i)  All notes, mortgages, security agreements, letters of
229credit, or other instruments that are given to secure the
230repayment of loans issued in connection with the financing of
231any loan under the program, without regard to the status of any
232party thereto as a private party, are exempt from taxation by
233the state and its political subdivisions. The exemption granted
234in this subsection does not apply to any tax imposed by chapter
235220 on interest, income, or profits on debt obligations owned by
236corporations.
237     (j)  Unexpended balances of appropriations provided for
238microenterprise loans shall not revert to the fund from which
239the appropriation was made at the end of a fiscal year but shall
240be retained in the Economic Development Trust Fund and be
241carried forward for expenditure for microenterprise loans during
242the next fiscal year.
243     (6)  BUSINESS SKILLS DEVELOPMENT SERVICES FOR
244MICROENTREPRENEURS.--
245     (a)  The office, upon selecting a community development
246financial institution to provide business skills development
247services for microentrepreneurs, shall enter into a grant
248agreement with the institution. The grant agreement must specify
249the amount of the grant and the business skills development
250services to be provided by the community development financial
251institution. The office may terminate the agreement at any time
252if the community development financial institution fails to meet
253minimum performance standards set by the office. The grant
254agreement may be amended by mutual consent of both parties.
255     (b)  A community development financial institution may
256provide the business skills development services directly or
257subcontract with a community organization to provide those
258services for microentrepreneurs.
259     (c)  The office shall disburse from the Economic
260Development Trust Fund to a community development financial
261institution the appropriations provided for the business skills
262development services for microentrepreneurs. Disbursements to a
263community development financial institutions must not exceed the
264amount of the grant authorized in the grant agreement.
265     (d)  The business skill development services shall include,
266but are not limited to, business planning and financial
267literacy.
268     (e)  A community development financial institution shall
269submit quarterly reports to the office that include the
270information required in the grant agreement. A quarterly report
271must include, at a minimum, the number of microentrepreneurs
272receiving business skills development services and a description
273of those services.
274     (7)  FEDERAL MATCHING REQUIREMENTS.--Grant funds received
275by a community development financial institution under this
276section may only be used for expenditures that meet federal
277matching requirements under 12 U.S.C. s. 4707(e).
278     (8)  On June 30 of each year, beginning in 2010, the office
279shall submit a report to the Governor, the President of the
280Senate, and the Speaker of the House of Representatives that
281describes in detail the use of the grant funds. The report must
282include, at a minimum, the number of microenterprises receiving
283loans, the number of full-time equivalent jobs created as a
284result of the loans, the amount of wages paid to employees in
285the newly created jobs, the locations and types of economic
286activity undertaken by the borrowers, the amounts of loan
287repayments made to date, the default rate of borrowers, the
288number of microentrepreneurs receiving business skills
289development services, and a description of those services.
290     (9)  RULEMAKING.--The office shall adopt rules under ss.
291120.536(1) and 120.54 to administer this section.
292     Section 2.  The sum of $5 million is transferred from the
293General Revenue Fund to the Economic Development Trust Fund and
294appropriated to the Office of Tourism, Trade, and Economic
295Development for purposes of implementing the Microenterprise
296Development Program in s. 288.7017, Florida Statutes, during the
2972009-2010 fiscal year. From among these funds, no more than $1
298million may be used to provide business skills development
299services for microentrepreneurs. The remaining funds shall be
300used to provide microenterprise loans.
301     Section 3.  This act shall take effect July 1, 2009.


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