Florida Senate - 2011 (Corrected Copy) SB 1862
By Senator Bennett
21-01326A-11 20111862__
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
5 Tourism, Trade, and Economic Development to create a
6 business loan guarantee fund to provide loans to
7 certain businesses; providing for use of certain funds
8 for the program; providing maximum terms and amounts
9 of loan guarantees; providing procedures for the
10 approval of loan guarantee applications; requiring
11 application fees; providing procedures for the payment
12 of loan guarantees to cover investment losses;
13 prohibiting disbursement of moneys for investment
14 losses under certain circumstances; providing for use
15 of loan repayments, interest earnings, and application
16 fees; authorizing partnerships with financial
17 institutions under certain circumstances; requiring
18 the office to establish guidelines and performance
19 measures for the program and criteria for the
20 evaluation of funding applications; requiring the
21 office to submit annual reports to the Governor and
22 Legislature; providing for future repeal of the
23 program; amending 288.1081, F.S.; revising provisions
24 for the deposit of loan repayments from the Economic
25 Gardening Business Loan Pilot Program; providing for
26 use of the funds; repealing s. 288.9618, F.S.,
27 relating to programs for the development of
28 microenterprises; providing an effective date.
29
30 Be It Enacted by the Legislature of the State of Florida:
31
32 Section 1. Section 288.9619, Florida Statutes, is created
33 to read:
34 288.9619 Business Loan Guarantee Program.—
35 (1) As used in this section, the term:
36 (a) “Business” means any business incorporated under the
37 laws of the state.
38 (b) “Office” means the Office of Tourism, Trade, and
39 Economic Development.
40 (2) There is created within the office the Business Loan
41 Guarantee Program. The office shall create a business loan
42 guarantee fund in the state. The office may use funds deposited
43 in the Economic Development Trust Fund from the Economic
44 Gardening Business Loan Pilot Program under s. 288.1081(5)(e)
45 for capitalizing the business loan guarantee fund. Where
46 feasible, the office shall cooperate with other organizations
47 active in the study and support of business loan assistance.
48 (3)(a) The business loan guarantee fund may provide loan
49 guarantees to offset a Florida-based mezzanine fund’s portion of
50 risk that prevents the mezzanine fund from making an investment,
51 either debt or equity, in a business that:
52 1. Is a privately held, second-stage business;
53 2. Has revenues of at least $5 million but not more than
54 $75 million;
55 3. Has earnings of at least $1 million before interest,
56 taxes, depreciation, and amortization;
57 4. Has a total debt-to-earnings ratio, before interest,
58 taxes, depreciation, and amortization, of less than 3.0;
59 5. Has proven and committed management teams;
60 6. Has a competitive advantage in market segment or
61 defensible niche position; and
62 7. Has a sound historical financial performance.
63 (b) Loan guarantees may be made:
64 1. For terms of up to 36 months; and
65 2. In amounts of up to 70 percent of a loan, not to exceed
66 $500,000.
67 (4) The office shall review and must approve or deny a
68 Florida-based mezzanine fund’s loan guarantee application within
69 30 days after receipt. The office shall impose upon each
70 Florida-based mezzanine fund seeking a loan guarantee an
71 application fee of 0.5 percent of the proposed loan guarantee.
72 The office shall use the application fees to pay the
73 administrative expenses of the program. If a Florida-based
74 mezzanine fund experiences a loss on an investment for which a
75 loan guarantee is provided under this section, the Florida-based
76 mezzanine fund must submit to the office audited financial
77 statements that demonstrate the investment’s actual tax loss
78 experienced by the Florida-based mezzanine fund. The business
79 loan guarantee fund may not disburse moneys for any losses
80 experienced from a loan guarantee which exceed the moneys on
81 deposit in the business loan guarantee fund. Any loan
82 repayments, interest earnings, or unused application fees must
83 be used by the office to capitalize the business loan guarantee
84 fund for use as additional loan guarantees.
85 (5) The office may partner with a financial institution if
86 the financial institution agrees to place a meaningful amount of
87 its own capital resources at risk in a loan guarantee that is
88 part of a loan guarantee made by the office.
89 (6) The office shall establish guidelines for administering
90 the program and shall establish criteria for the competitive
91 evaluation of applications for funding. The office shall
92 establish performance measures for the program before providing
93 grant moneys to any entity and shall report such measures and
94 program outcomes annually to the Governor, the President of the
95 Senate, and the Speaker of the House of Representatives.
96 Performance measures shall include, but are not limited to, data
97 on loan repayments and the status of the business receiving the
98 loan during the loan term and for 2 years after repayment of the
99 loan.
100 (7) This section is repealed July 1, 2017, unless reviewed
101 and reenacted by the Legislature before that date.
102 Section 2. Paragraph (e) of subsection (5) of section
103 288.1081, Florida Statutes, is amended to read:
104 288.1081 Economic Gardening Business Loan Pilot Program.—
105 (5)
106 (e) A loan administrator, after collecting the servicing
107 fee in accordance with paragraph (d), shall remit the borrower’s
108 collected interest, principal payments, and charges for late
109 payments to the office on a quarterly basis. If the borrower
110 defaults on the loan, the loan administrator shall initiate
111 collection efforts to seek repayment of the loan. The loan
112 administrator, upon collecting payments for a defaulted loan,
113 shall remit the payments to the office but, to the extent
114 authorized in the grant agreement, may deduct the costs of the
115 administrator’s collection efforts. The office shall deposit all
116 funds received under this paragraph into the Economic
117 Development Trust Fund for purposes of in the Business Loan
118 Guarantee Program under s. 288.9619 General Revenue Fund.
119 Section 3. Section 288.9618, Florida Statutes, is repealed.
120 Section 4. This act shall take effect July 1, 2011.