1 | A bill to be entitled |
2 | An act relating to economic development; creating s. |
3 | 288.9619, F.S.; creating the Business Loan Guarantee |
4 | Program; defining terms; requiring the Office of Tourism, |
5 | Trade, and Economic Development to create a business loan |
6 | guarantee fund to provide loans to certain businesses; |
7 | providing for use of certain funds for the program; |
8 | providing maximum terms and amounts of loan guarantees; |
9 | providing procedures for the approval of loan guarantee |
10 | applications; requiring application fees; providing |
11 | procedures for the payment of loan guarantees to cover |
12 | investment losses; prohibiting disbursement of moneys for |
13 | investment losses under certain circumstances; providing |
14 | for use of loan repayments, interest earnings, and |
15 | application fees; authorizing partnerships with financial |
16 | institutions under certain circumstances; requiring the |
17 | office to establish guidelines and performance measures |
18 | for the program and criteria for the evaluation of funding |
19 | applications; requiring the office to submit annual |
20 | reports to the Governor and Legislature; providing for |
21 | future repeal of the program; amending 288.1081, F.S.; |
22 | revising provisions for the deposit of loan repayments |
23 | from the Economic Gardening Business Loan Pilot Program; |
24 | providing for use of the funds; repealing s. 288.9618, |
25 | F.S., relating to programs for the development of |
26 | microenterprises; providing an effective date. |
27 |
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28 | Be It Enacted by the Legislature of the State of Florida: |
29 |
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30 | Section 1. Section 288.9619, Florida Statutes, is created |
31 | to read: |
32 | 288.9619 Business Loan Guarantee Program.- |
33 | (1) As used in this section, the term: |
34 | (a) "Business" means any business incorporated under the |
35 | laws of the state. |
36 | (b) "Office" means the Office of Tourism, Trade, and |
37 | Economic Development. |
38 | (2) There is created within the office the Business Loan |
39 | Guarantee Program. The office shall create a business loan |
40 | guarantee fund in the state. The office may use funds deposited |
41 | in the Economic Development Trust Fund from the Economic |
42 | Gardening Business Loan Pilot Program under s. 288.1081(5)(e) |
43 | for capitalizing the business loan guarantee fund. Where |
44 | feasible, the office shall cooperate with other organizations |
45 | active in the study and support of business loan assistance. |
46 | (3)(a) The business loan guarantee fund may provide loan |
47 | guarantees to offset a Florida-based mezzanine fund's portion of |
48 | risk that prevents the mezzanine fund from making an investment, |
49 | either debt or equity, in a business that: |
50 | 1. Is a privately held, second-stage business; |
51 | 2. Has revenues of at least $5 million but not more than |
52 | $75 million; |
53 | 3. Has earnings of at least $1 million before interest, |
54 | taxes, depreciation, and amortization; |
55 | 4. Has a total debt-to-earnings ratio, before interest, |
56 | taxes, depreciation, and amortization, of less than 3.0; |
57 | 5. Has proven and committed management teams; |
58 | 6. Has a competitive advantage in market segment or |
59 | defensible niche position; and |
60 | 7. Has a sound historical financial performance. |
61 | (b) Loan guarantees may be made: |
62 | 1. For terms of up to 36 months; and |
63 | 2. In amounts of up to 70 percent of a loan, not to exceed |
64 | $500,000. |
65 | (4) The office shall review and must approve or deny a |
66 | Florida-based mezzanine fund's loan guarantee application within |
67 | 30 days after receipt. The office shall impose upon each |
68 | Florida-based mezzanine fund seeking a loan guarantee an |
69 | application fee of 0.5 percent of the proposed loan guarantee. |
70 | The office shall use the application fees to pay the |
71 | administrative expenses of the program. If a Florida-based |
72 | mezzanine fund experiences a loss on an investment for which a |
73 | loan guarantee is provided under this section, the Florida-based |
74 | mezzanine fund must submit to the office audited financial |
75 | statements that demonstrate the investment's actual tax loss |
76 | experienced by the Florida-based mezzanine fund. The business |
77 | loan guarantee fund may not disburse moneys for any losses |
78 | experienced from a loan guarantee which exceed the moneys on |
79 | deposit in the business loan guarantee fund. Any loan |
80 | repayments, interest earnings, or unused application fees must |
81 | be used by the office to capitalize the business loan guarantee |
82 | fund for use as additional loan guarantees. |
83 | (5) The office may partner with a financial institution if |
84 | the financial institution agrees to place a meaningful amount of |
85 | its own capital resources at risk in a loan guarantee that is |
86 | part of a loan guarantee made by the office. |
87 | (6) The office shall establish guidelines for |
88 | administering the program and shall establish criteria for the |
89 | competitive evaluation of applications for funding. The office |
90 | shall establish performance measures for the program before |
91 | providing grant moneys to any entity and shall report such |
92 | measures and program outcomes annually to the Governor, the |
93 | President of the Senate, and the Speaker of the House of |
94 | Representatives. Performance measures shall include, but are not |
95 | limited to, data on loan repayments and the status of the |
96 | business receiving the loan during the loan term and for 2 years |
97 | after repayment of the loan. |
98 | (7) This section is repealed July 1, 2017, unless reviewed |
99 | and reenacted by the Legislature before that date. |
100 | Section 2. Paragraph (e) of subsection (5) of section |
101 | 288.1081, Florida Statutes, is amended to read: |
102 | 288.1081 Economic Gardening Business Loan Pilot Program.- |
103 | (5) |
104 | (e) A loan administrator, after collecting the servicing |
105 | fee in accordance with paragraph (d), shall remit the borrower's |
106 | collected interest, principal payments, and charges for late |
107 | payments to the office on a quarterly basis. If the borrower |
108 | defaults on the loan, the loan administrator shall initiate |
109 | collection efforts to seek repayment of the loan. The loan |
110 | administrator, upon collecting payments for a defaulted loan, |
111 | shall remit the payments to the office but, to the extent |
112 | authorized in the grant agreement, may deduct the costs of the |
113 | administrator's collection efforts. The office shall deposit all |
114 | funds received under this paragraph into the Economic |
115 | Development Trust Fund for purposes of in the Business Loan |
116 | Guarantee Program under s. 288.9619 General Revenue Fund. |
117 | Section 3. Section 288.9618, Florida Statutes, is |
118 | repealed. |
119 | Section 4. This act shall take effect July 1, 2011. |