CS for SB 38-A                                   First Engrossed
       
       
       
       
       
       
       
       
       200938Ae1
       
    1                        A bill to be entitled                      
    2         An act relating to economic development; creating s.
    3         288.1081, F.S.; creating the Economic Gardening
    4         Business Loan Pilot Program within the Office of
    5         Tourism, Trade, and Economic Development; providing
    6         legislative findings and intent; providing eligibility
    7         criteria for the award of loans to certain businesses;
    8         providing application procedures; requiring loan
    9         agreements; providing terms of loans; providing for
   10         use of loan proceeds; providing criteria and
   11         application procedures for the selection of loan
   12         administrators; requiring a loan administrator to
   13         enter into a grant agreement; providing for the
   14         disbursement of certain funds from the Economic
   15         Development Trust Fund; requiring fees for the loan
   16         administrator; providing for the collection and
   17         deposit of loan payments; requiring the loan
   18         administrator to submit a report to the office;
   19         requiring the office to adopt rules; authorizing the
   20         use of emergency rulemaking procedures; requiring the
   21         office to submit a report to the Governor and
   22         Legislature; providing for reversion and carryforward
   23         of certain unexpended appropriations; prohibiting new
   24         loans after a specified date; providing for future
   25         repeal; creating s. 288.1082, F.S.; creating the
   26         Economic Gardening Technical Assistance Pilot Program
   27         within the office; requiring the office to contract
   28         for administration of the pilot program; requiring
   29         competitive procurement; requiring the provision of
   30         technical assistance to certain businesses; providing
   31         eligibility criteria for businesses to receive
   32         technical assistance; requiring the businesses to
   33         enter into agreements with the contracted entity
   34         administering the pilot program; requiring the
   35         businesses to report certain data; providing that the
   36         contracted entity is an economic development agency;
   37         providing for review of contracts; requiring the
   38         office to submit a report to the Governor and
   39         Legislature; authorizing the office to adopt rules;
   40         directing the Office of Program Policy Analysis and
   41         Government Accountability to submit a report to the
   42         Governor and Legislature; authorizing the expenditure
   43         of certain funds appropriated for the pilot program;
   44         providing an effective date.
   45         
   46  Be It Enacted by the Legislature of the State of Florida:
   47         
   48         Section 1. Section 288.1081, Florida Statutes, is created
   49  to read:
   50         288.1081Economic Gardening Business Loan Pilot Program.—
   51         (1)There is created within the Office of Tourism, Trade,
   52  and Economic Development the Economic Gardening Business Loan
   53  Pilot Program. The purpose of the pilot program is to stimulate
   54  investment in Florida's economy by providing loans to expanding
   55  businesses in the state. As used in this section, the term
   56  “office” means the Office of Tourism, Trade, and Economic
   57  Development.
   58         (2)The Legislature finds that it is vital to the overall
   59  health and growth of the state's economy to promote favorable
   60  conditions for expanding Florida businesses that demonstrate the
   61  ability to grow. The Legislature further finds that, due to the
   62  current extraordinary economic challenges confronting the state,
   63  there exists a public purpose in expending state resources to
   64  stimulate investment in Florida's economy. It is therefore the
   65  intent of the Legislature that resources be provided for the
   66  pilot program.
   67         (3)(a)To be eligible for a loan under the pilot program,
   68  an applicant must be a business eligible for assistance under
   69  the Economic Gardening Technical Assistance Pilot Program as
   70  provided in s. 288.1082(4)(a).
   71         (b)A loan applicant must submit a written application to
   72  the loan administrator in the format prescribed by the loan
   73  administrator. The application must include:
   74         1.The applicant's federal employer identification number,
   75  unemployment account number, and sales or other tax registration
   76  number.
   77         2.The street address of the applicant's principal place of
   78  business in this state.
   79         3.A description of the type of economic activity, product,
   80  or research and development undertaken by the applicant,
   81  including the six-digit North American Industry Classification
   82  System code for each type of economic activity conducted by the
   83  applicant.
   84         4.The applicant's annual revenue, number of employees,
   85  number of full-time equivalent employees, and other information
   86  necessary to verify the applicant's eligibility for the pilot
   87  program under s. 288.1082(4)(a).
   88         5.The projected investment in the business, if any, which
   89  the applicant proposes in conjunction with the loan.
   90         6.The total investment in the business from all sources,
   91  if any, which the applicant proposes in conjunction with the
   92  loan.
   93         7.The number of net new full-time equivalent jobs that, as
   94  a result of the loan, the applicant proposes to create in this
   95  state as of December 31 of each year and the average annual wage
   96  of the proposed jobs.
   97         8.The total number of full-time equivalent employees the
   98  applicant currently employs in this state.
   99         9.The date that the applicant anticipates it needs the
  100  loan.
  101         10.A detailed explanation of why the loan is needed to
  102  assist the applicant in expanding jobs in the state.
  103         11.A statement that all of the applicant's available
  104  corporate assets are pledged as collateral for the amount of the
  105  loan.
  106         12.A statement that the applicant, upon receiving the
  107  loan, agrees not to seek additional long-term debt without prior
  108  approval of the loan administrator.
  109         13.A statement that the loan is a joint obligation of the
  110  business and of each person who owns at least 20 percent of the
  111  business.
  112         14.Any additional information requested by the office or
  113  the loan administrator.
  114         (c)The loan administrator, after verifying the accuracy of
  115  a submitted application, shall award the loan to the applicant
  116  if the administrator determines that the applicant, as compared
  117  to other applicants submitting applications, is in the best
  118  position to use the loan to continue making a successful long
  119  term business commitment to the state. The loan administrator
  120  also shall consider the following factors:
  121         1.Whether the applicant has applied for or received
  122  incentives from local governments;
  123         2.Whether the applicant has applied for or received
  124  waivers of taxes, impact fees, or other fees or charges by local
  125  governments; and
  126         3.What other sources of investments or financing for the
  127  project that is the subject of the loan application will be
  128  available to the applicant.
  129         (d)A borrower awarded a loan under this section and the
  130  loan administrator must enter into a loan agreement that
  131  provides for the borrower's repayment of the loan.
  132         (4)The following terms apply to a loan received under the
  133  pilot program:
  134         (a)The maximum amount of the loan is $250,000.
  135         (b)The proceeds of the loan may be used for working
  136  capital purchases, employee training, or salaries for newly
  137  created jobs in the state.
  138         (c)The security interest for the loan's collateral
  139  covering all of the borrower's available corporate assets to
  140  cover the amount of the loan must be perfected by recording a
  141  lien under the Uniform Commercial Code.
  142         (d)The period of the loan is 4 years.
  143         (e)The interest rate of the loan is 2 percent. However, if
  144  the borrower does not create the projected number of jobs within
  145  the terms of the loan agreement, the interest rate shall be
  146  increased for the remaining period of the loan to the prime rate
  147  published in the Wall Street Journal, as of the date specified
  148  in the loan agreement, plus 4 percentage points. The loan
  149  agreement may provide flexibility in meeting the projected
  150  number of jobs for delays due to governmental regulatory issues,
  151  including, but not limited to, permitting.
  152         (f)For the first 12 months of the loan, payment is due for
  153  interest only, payable during the twelfth month. Thereafter,
  154  payment for interest and principal is due each month until the
  155  loan is paid in full. Interest and principal payments are based
  156  on the unpaid balance of the total loan amount.
  157         (5)(a)The office may designate one or more qualified
  158  entities to serve as loan administrators for the pilot program.
  159  A loan administrator must:
  160         1.Be a Florida corporation not for profit incorporated
  161  under chapter 617 which has its principal place of business in
  162  the state.
  163         2.Have 5 years of verifiable experience of lending to
  164  businesses in this state.
  165         3.Submit an application to the office on forms prescribed
  166  by the office. The application must include the loan
  167  administrator's business plan for its proposed lending
  168  activities under the pilot program, including, but not limited
  169  to, a description of its outreach efforts, underwriting, credit
  170  policies and procedures, credit decision processes, monitoring
  171  policies and procedures, and collection practices; the
  172  membership of its board of directors; and samples of its
  173  currently used loan documentation. The application must also
  174  include a detailed description and supporting documentation of
  175  the nature of the loan administrator's partnerships with local
  176  or regional economic and business development organizations.
  177         (b)The office, upon selecting a loan administrator, shall
  178  enter into a grant agreement with the administrator to issue the
  179  available loans to eligible applicants. The grant agreement must
  180  specify the aggregate amount of the loans authorized for award
  181  by the loan administrator. The term of the grant agreement must
  182  be at least 4 years, except that the office may terminate the
  183  agreement earlier if the loan administrator fails to meet
  184  minimum performance standards set by the office. The grant
  185  agreement may be amended by mutual consent of both parties.
  186         (c)The office shall disburse from the Economic Development
  187  Trust Fund to the loan administrator the appropriations provided
  188  for the pilot program. Disbursements to the loan administrator
  189  must not exceed the aggregate amount of the loans authorized in
  190  the grant agreement. The office may not disburse more than 50
  191  percent of the aggregate amount of the loans authorized in the
  192  grant agreement until the office verifies the borrowers' use of
  193  the loan proceeds and the loan administrator's successful credit
  194  decisionmaking policies.
  195         (d)A loan administrator is entitled to receive a loan
  196  origination fee, payable at closing, of 1 percent of each loan
  197  issued by the loan administrator and a servicing fee of 0.625
  198  percent per annum of the loan's outstanding principle balance,
  199  payable monthly. During the first 12 months of the loan, the
  200  servicing fee shall be paid from the disbursement from the
  201  Economic Development Trust Fund, and thereafter the loan
  202  administrator shall collect the servicing fee from the payments
  203  made by the borrower, charging the fee against repayments of
  204  principal.
  205         (e)A loan administrator, after collecting the servicing
  206  fee in accordance with paragraph (d), shall remit the borrower's
  207  collected interest, principal payments, and charges for late
  208  payments to the office on a quarterly basis. If the borrower
  209  defaults on the loan, the loan administrator shall initiate
  210  collection efforts to seek repayment of the loan. The loan
  211  administrator, upon collecting payments for a defaulted loan,
  212  shall remit the payments to the office but, to the extent
  213  authorized in the grant agreement, may deduct the costs of the
  214  administrator's collection efforts. The office shall deposit all
  215  funds received under this paragraph in the General Revenue Fund.
  216         (f)A loan administrator shall submit quarterly reports to
  217  the office which include the information required in the grant
  218  agreement. A quarterly report must include, at a minimum, the
  219  number of full-time equivalent jobs created as a result of the
  220  loans, the amount of wages paid to employees in the newly
  221  created jobs, and the locations and types of economic activity
  222  undertaken by the borrowers.
  223         (6)All notes, mortgages, security agreements, letters of
  224  credit, or other instruments that are given to secure the
  225  repayment of loans issued in connection with the financing of
  226  any loan under the program, without regard to the status of any
  227  party thereto as a private party, are exempt from taxation by
  228  the state and its political subdivisions. The exemption granted
  229  in this subsection does not apply to any tax imposed by chapter
  230  220 on interest, income, or profits on debt obligations owned by
  231  corporations.
  232         (7)The office shall adopt rules under ss. 120.536(1) and
  233  120.54 to administer this section. To the extent necessary to
  234  expedite implementation of the pilot program, the office may
  235  adopt initial emergency rules for the pilot program in
  236  accordance with s. 120.54(4).
  237         (8)On June 30 and December 31 of each year, beginning in
  238  2009, the office shall submit a report to the Governor, the
  239  President of the Senate, and the Speaker of the House of
  240  Representatives which describes in detail the use of the loan
  241  funds. The report must include, at a minimum, the number of
  242  businesses receiving loans, the number of full-time equivalent
  243  jobs created as a result of the loans, the amount of wages paid
  244  to employees in the newly created jobs, the locations and types
  245  of economic activity undertaken by the borrowers, the amounts of
  246  loan repayments made to date, and the default rate of borrowers.
  247         (9)Unexpended balances of appropriations provided for the
  248  pilot program shall not revert to the fund from which the
  249  appropriation was made at the end of a fiscal year but shall be
  250  retained in the Economic Development Trust Fund and be carried
  251  forward for expenditure for the pilot program during the
  252  following fiscal year. A loan administrator may not award a new
  253  loan or enter into a loan agreement after June 30, 2011.
  254  Balances of appropriations provided for the pilot program which
  255  remain unexpended as of July 1, 2011, shall revert to the
  256  General Revenue Fund.
  257         (10)This section is repealed July 1, 2016, unless reviewed
  258  and reenacted by the Legislature before that date.
  259         Section 2. Section 288.1082, Florida Statutes, is created
  260  to read:
  261         288.1082Economic Gardening Technical Assistance Pilot
  262  Program.—
  263         (1)There is created within the Office of Tourism, Trade,
  264  and Economic Development the Economic Gardening Technical
  265  Assistance Pilot Program. The purpose of the pilot program is to
  266  stimulate investment in Florida's economy by providing technical
  267  assistance for expanding businesses in the state. As used in
  268  this section, the term “office” means the Office of Tourism,
  269  Trade, and Economic Development.
  270         (2)The office shall contract with one or more entities to
  271  administer the pilot program under this section. The office
  272  shall award each contract in accordance with the competitive
  273  bidding requirements in s. 287.057 to an entity that
  274  demonstrates the ability to implement the pilot program on a
  275  statewide basis, has an outreach plan, and has the ability to
  276  provide counseling services, access to technology and
  277  information, marketing services and advice, business management
  278  support, and other similar services. In selecting these
  279  entities, the office also must consider whether the entities
  280  will qualify for matching funds to provide the technical
  281  assistance.
  282         (3)A contracted entity administering the pilot program
  283  shall provide technical assistance for eligible businesses which
  284  includes, but is not limited to:
  285         (a)Access to free or affordable information services and
  286  consulting services, including information on markets,
  287  customers, and competitors, such as business databases,
  288  geographic information systems, and search engine marketing.
  289         (b)Development of business connections, including
  290  interaction and exchange among business owners and resource
  291  providers, such as trade associations, think tanks, academic
  292  institutions, business roundtables, peer-to-peer learning
  293  sessions, and mentoring programs.
  294         (4)(a)To be eligible for assistance under the pilot
  295  program, a business must be a for-profit, privately held,
  296  investment-grade business that employs at least 10 persons but
  297  not more than 50 persons, has maintained its principal place of
  298  business in the state for at least the previous 2 years,
  299  generates at least $1 million but not more than $25 million in
  300  annual revenue, qualifies for the tax refund program for
  301  qualified target industry businesses under s. 288.106, and,
  302  during 3 of the previous 5 years, has increased both its number
  303  of full-time equivalent employees in this state and its gross
  304  revenues.
  305         (b)A contracted entity administering the pilot program, in
  306  selecting the eligible businesses to receive assistance, shall
  307  choose businesses in more than one industry cluster and, to the
  308  maximum extent practicable, shall choose businesses that are
  309  geographically distributed throughout Florida or are in
  310  partnership with businesses that are geographically distributed
  311  throughout Florida.
  312         (5)(a)A business receiving assistance under the pilot
  313  program must enter into an agreement with the contracted entity
  314  administering the program to establish the business's commitment
  315  to participation in the pilot program. The agreement must
  316  require, at a minimum, that the business:
  317         1.Attend a minimum number of meetings between the business
  318  and the contracted entity administering the pilot program.
  319         2.Report job-creation data in the manner prescribed by the
  320  contracted entity administering the pilot program.
  321         3.Provide financial data in the manner prescribed by the
  322  contracted entity administering the program.
  323         (b)The office or the contracted entity administering the
  324  pilot program may prescribe in the agreement additional
  325  reporting requirements that are necessary to track the progress
  326  of the business and monitor the business's implementation of the
  327  assistance. The contracted entity shall report the information
  328  to the office on a quarterly basis.
  329         (6)A contracted entity administering the pilot program is
  330  authorized to promote the general business interests or
  331  industrial interests of the state.
  332         (7)The office shall review the progress of a contracted
  333  entity administering the pilot program at least once each 6
  334  months and shall determine whether the contracted entity is
  335  meeting its contractual obligations for administering the pilot
  336  program. The office may terminate and rebid a contract if the
  337  contracted entity does not meet its contractual obligations.
  338         (8)On December 31 of each year, beginning in 2009, the
  339  office shall submit a report to the Governor, the President of
  340  the Senate, and the Speaker of the House of Representatives
  341  which describes in detail the progress of the pilot program. The
  342  report must include, at a minimum, the number of businesses
  343  receiving assistance, the number of full-time equivalent jobs
  344  created as a result of the assistance, if any, the amount of
  345  wages paid to employees in the newly created jobs, and the
  346  locations and types of economic activity undertaken by the
  347  businesses.
  348         (9)The office may adopt rules under ss. 120.536(1) and
  349  120.54 to administer this section.
  350         Section 3. By December 31, 2012, the Office of Program
  351  Policy Analysis and Government Accountability shall submit a
  352  report to the Governor, the President of the Senate, and the
  353  Speaker of the House of Representatives which evaluates the
  354  Economic Gardening Technical Assistance Pilot Program in s.
  355  288.1082, Florida Statutes, and the pilot program's
  356  effectiveness in expanding the targeted businesses.
  357         Section 4. From the funds specifically appropriated to fund
  358  this act, up to $1.5 million may be used to implement the
  359  Economic Gardening Technical Assistance Pilot Program created in
  360  section 2 of this act.
  361         Section 5. This act shall take effect upon becoming a law.