Florida Senate - 2011                                    SB 1374
       By Senator Smith
       29-01710-11                                           20111374__
    1                        A bill to be entitled                      
    2         An act relating to the Black Business Loan Program;
    3         amending s. 288.7102, F.S.; revising the
    4         recertification and audit periods for eligible
    5         recipients of the Black Business Loan Program;
    6         authorizing existing recipients to submit certain
    7         information to the Office of Tourism, Trade, and
    8         Economic Development instead of financial audits under
    9         certain circumstances; authorizing recipients to
   10         redress audit findings within a specified period;
   11         providing term of and revising requirements for
   12         funding agreements between recipients and the office;
   13         revising the entities with whom the office must
   14         consult before adopting rules; revising limits on the
   15         use of funds for technical support to black business
   16         enterprises and direct administrative costs;
   17         conforming provisions; reenacting s. 288.7094(2),
   18         F.S., relating to black business investment
   19         corporations, to incorporate changes made by the act
   20         in a reference thereto; providing an effective date.
   22  Be It Enacted by the Legislature of the State of Florida:
   24         Section 1. Section 288.7102, Florida Statutes, is amended
   25  to read:
   26         288.7102 Black Business Loan Program.—
   27         (1) The Black Business Loan Program is established in the
   28  Office of Tourism, Trade, and Economic Development. Under the
   29  program, the office shall annually certify eligible recipients
   30  for a period of 5 years, recertify existing eligible recipients
   31  once every 5 years, and subsequently disburse funds annually or
   32  as appropriated by the Legislature, through such eligible
   33  recipients, to black business enterprises that cannot obtain
   34  capital through conventional lending institutions but that could
   35  otherwise compete successfully in the private sector.
   36         (2) The office shall establish an application and annual
   37  certification process for entities seeking funds to participate
   38  in providing loans, loan guarantees, or investments in black
   39  business enterprises pursuant to the Florida Black Business
   40  Investment Act. The office shall process all applications and
   41  recertifications submitted by June 1 on or before July 31 of the
   42  same calendar year.
   43         (3) If the Black Business Loan Program is appropriated any
   44  funding in a fiscal year, the office shall distribute an equal
   45  amount of the appropriation, calculated as the total annual
   46  appropriation divided by the total number of program recipients
   47  certified on or before July 31 of that fiscal year.
   48         (4) To be eligible to receive funds and provide loans, loan
   49  guarantees, or investments under this section, a recipient must:
   50         (a) Be a corporation registered in the state.
   51         (b) For an existing recipient during the 1st through 4th
   52  years of the recipient’s recertification period, annually submit
   53  to the office a financial audit or compilation of the
   54  recipient’s financial statement information for the most
   55  recently completed fiscal year and a copy of the office’s most
   56  recent letter certifying the recipient as qualified for the
   57  award of funds.
   58         (c) For an existing recipient during the 5th year of the
   59  recipient’s recertification period, submit to the office a
   60  recertification application and a financial audit performed by
   61  an independent certified public account for the most recently
   62  completed fiscal year, which audit does not reveal any material
   63  weaknesses or instances of material noncompliance that the
   64  recipient does not substantially redress within 60 days after
   65  receipt of the audit report.
   66         (d)(c) For a new recipient:
   67         1. Demonstrate that its board of directors includes
   68  citizens of the state experienced in the development of black
   69  business enterprises.
   70         2. Demonstrate that the recipient has a business plan that
   71  allows the recipient to operate in a manner consistent with ss.
   72  288.707-288.714 and the rules of the office.
   73         3. Demonstrate that the recipient has the technical skills
   74  to analyze and evaluate applications by black business
   75  enterprises for loans, loan guarantees, or investments.
   76         4. Demonstrate that the recipient has established viable
   77  partnerships with public and private funding sources, economic
   78  development agencies, and workforce development and job referral
   79  networks.
   80         5. Demonstrate that the recipient can provide a private
   81  match equal to 20 percent of the amount of funds provided by the
   82  office.
   83         (e)(d) For an existing or new recipient, agree to maintain
   84  the recipient’s books and records relating to funds received by
   85  the office according to generally accepted accounting principles
   86  and in accordance with the requirements of s. 215.97(7) and to
   87  make those books and records available to the office for
   88  inspection upon reasonable notice.
   89         (5) Each eligible recipient must meet the provisions of ss.
   90  288.707-288.714, the terms of the agreement contract between the
   91  recipient and the office, and any other applicable state or
   92  federal laws. An entity may not receive funds under ss. 288.707
   93  288.714 unless the entity meets annual certification
   94  requirements.
   95         (6) Upon approval by the office and Before release of the
   96  funds as provided in this section, the office shall issue a
   97  letter certifying the eligible recipient applicant as qualified
   98  for an award. The office and the eligible recipient applicant
   99  shall enter into an annual agreement that sets forth the
  100  conditions for award of the funds. The term of any agreement
  101  between the office and an eligible recipient may not exceed 1
  102  year. The agreement must include the total amount of funds
  103  awarded; the performance conditions that must be met once the
  104  funding is has been awarded, including, but not limited to,
  105  compliance with all of the requirements of this section for
  106  eligible recipients of funds under this section; and sanctions
  107  for failure to meet performance conditions, including any
  108  provisions to recover awards. The agreement may not require any
  109  reporting of or obligation for appropriated funds beyond the 1
  110  year term of the agreement, except that appropriated funds
  111  remaining unexpended at the end of the 1-year agreement must be
  112  reported until the funds are expended.
  113         (7) The office, in consultation with the presidents of the
  114  black business investment corporations board, shall adopt rules
  115  pursuant to ss. 120.536(1) and 120.54 to implement this section.
  116         (8) A black business investment corporation certified by
  117  the office as an eligible recipient under this section is
  118  authorized to use funds appropriated for the Black Business Loan
  119  Program in any of the following forms:
  120         (a) Purchases of stock, preferred or common, voting or
  121  nonvoting; however, no more than 40 percent of the funds may be
  122  used for direct investments in black business enterprises;
  123         (b) Loans or loan guarantees, with or without recourse, in
  124  either a subordinated or priority position; or
  125         (c) Technical support to black business enterprises, not to
  126  exceed 9 percent of the funds received, and direct
  127  administrative costs, not to exceed 27 12 percent of the funds
  128  received.
  129         (9) It is the intent of the Legislature that if any one
  130  type of investment mechanism authorized in subsection (8) is
  131  held to be invalid, all other valid mechanisms remain available.
  132         (10) All loans, loan guarantees, and investments, and any
  133  income related thereto, shall be used to carry out the public
  134  purpose of ss. 288.707-288.714, which is to develop black
  135  business enterprises. This subsection does not preclude a
  136  reasonable profit for the participating black business
  137  investment corporation or for return of equity developed to the
  138  state and participating financial institutions upon any
  139  distribution of the assets or excess income of the investment
  140  corporation.
  141         Section 2. For the purpose of incorporating the amendment
  142  made by this act to section 288.7102, Florida Statutes, in a
  143  reference thereto, subsection (2) of section 288.7094, Florida
  144  Statutes, is reenacted to read:
  145         288.7094 Black business investment corporations.—
  146         (2) A black business investment corporation that meets the
  147  requirements of s. 288.7102(4) is eligible to participate in the
  148  Black Business Loan Program and shall receive priority
  149  consideration by the Office of Tourism, Trade, and Economic
  150  Development for participation in the program.
  151         Section 3. This act shall take effect July 1, 2011.