Florida Senate - 2019                                    SB 1534
       
       
        
       By Senator Rodriguez
       
       
       
       
       
       37-01950A-19                                          20191534__
    1                        A bill to be entitled                      
    2         An act relating to assistance for micro businesses;
    3         creating s. 287.085, F.S.; defining the term “micro
    4         business”; authorizing certain local governments to
    5         set aside up to a specified percentage of funds for
    6         procuring personal property and services for the
    7         purpose of entering into contracts with micro
    8         businesses; requiring that such contracts be
    9         competitively solicited only among micro businesses;
   10         amending s. 288.9931, F.S.; revising legislative
   11         findings and intent; amending s. 288.9932, F.S.;
   12         redefining the terms “applicant” and “entrepreneur”;
   13         defining the term “micro business”; amending s.
   14         288.9934, F.S.; providing eligibility for micro
   15         businesses under the Microfinance Loan Program;
   16         revising the date by which the Department of Economic
   17         Opportunity must contract with a certain entity or
   18         entities to administer the loan program; deleting
   19         obsolete provisions; amending s. 288.9935, F.S.;
   20         providing eligibility for micro businesses under the
   21         Microfinance Guarantee Program; amending s. 288.9936,
   22         F.S.; conforming a provision to changes made by the
   23         act; amending s. 337.027, F.S.; providing eligibility
   24         for micro businesses under the Department of
   25         Transportation’s highway project business development
   26         program; defining the term “micro business”; amending
   27         s. 373.1135, F.S.; providing eligibility for micro
   28         businesses under water management district programs
   29         designed to help small businesses participate in
   30         district procurement and contract activities; defining
   31         the term “micro business”; providing an effective
   32         date.
   33          
   34  Be It Enacted by the Legislature of the State of Florida:
   35  
   36         Section 1. Section 287.085, Florida Statutes, is created to
   37  read:
   38         287.085 Micro businesses; set-aside of funds for
   39  procurement of personal property and services.—
   40         (1)As used in this section, the term “micro business”
   41  means an independently owned and operated for-profit business
   42  entity, including any affiliates, which is located in this state
   43  and which has 10 or fewer full-time employees or full-time
   44  equivalent employees.
   45         (2)Any county, municipality, community college, or
   46  district school board may set aside up to XX percent or more of
   47  the total amount of funds allocated for the procurement of
   48  personal property and services for the purpose of entering into
   49  contracts with micro businesses. Such contracts must be
   50  competitively solicited only among micro businesses.
   51         Section 2. Section 288.9931, Florida Statutes, is amended
   52  to read:
   53         288.9931 Legislative findings and intent.—The Legislature
   54  finds that the ability of entrepreneurs, micro businesses, and
   55  small businesses to access capital is vital to the overall
   56  health and growth of this state’s economy; however, access to
   57  capital is limited by the lack of available credit for
   58  entrepreneurs, micro businesses, and small businesses in this
   59  state. The Legislature further finds that entrepreneurs, micro
   60  businesses, and small businesses could be assisted through the
   61  creation of a program that will provide an avenue for
   62  entrepreneurs, micro businesses, and small businesses in this
   63  state to access credit. Additionally, the Legislature finds that
   64  business management training, business development training, and
   65  technical assistance are necessary to ensure that entrepreneurs,
   66  micro businesses, and small businesses that receive credit
   67  develop the skills necessary to grow and achieve long-term
   68  financial stability. The Legislature intends to expand job
   69  opportunities for this state’s workforce by expanding access to
   70  credit to entrepreneurs, micro businesses, and small businesses.
   71  Furthermore, the Legislature intends to avoid duplicating
   72  existing programs and to coordinate, assist, augment, and
   73  improve access to those programs for entrepreneurs, micro
   74  businesses, and small businesses in this state.
   75         Section 3. Present subsections (4) and (5) of section
   76  288.9932, Florida Statutes, are redesignated as subsections (5)
   77  and (6), respectively, a new subsection (4) is added to that
   78  section, and subsections (1) and (3) of that section are
   79  amended, to read:
   80         288.9932 Definitions.—As used in this part, the term:
   81         (1) “Applicant” means an entrepreneur, a micro business, or
   82  a small business that applies to a loan administrator for a
   83  microloan.
   84         (3) “Entrepreneur” means an individual residing in this
   85  state who desires to assume the risk of organizing, managing,
   86  and operating a micro business or a small business in this
   87  state.
   88         (4)“Micro business” has the same meaning as provided in s.
   89  287.085.
   90         Section 4. Subsections (1) and (3), paragraphs (b), (c),
   91  (e), and (f) of subsection (4), paragraph (a) of subsection (9),
   92  and subsections (10) and (11) of section 288.9934, Florida
   93  Statutes, are amended to read:
   94         288.9934 Microfinance Loan Program.—
   95         (1) PURPOSE.—The Microfinance Loan Program is established
   96  in the department to make short-term, fixed-rate microloans in
   97  conjunction with business management training, business
   98  development training, and technical assistance to entrepreneurs
   99  and newly established or growing micro businesses and small
  100  businesses for startup costs, working capital, and the
  101  acquisition of materials, supplies, furniture, fixtures, and
  102  equipment. Participation in the loan program is intended to
  103  enable entrepreneurs, micro businesses, and small businesses to
  104  access private financing upon completing the loan program.
  105         (3) REQUEST FOR PROPOSAL.—
  106         (a) By December 1, 2019 2014, the department shall contract
  107  with at least one but not more than three entities to administer
  108  the loan program for a term of 3 years. The department shall
  109  award the contract in accordance with the request for proposal
  110  requirements in s. 287.057 to an entity that:
  111         1. Is a corporation registered in this state;
  112         2. Does not offer checking accounts or savings accounts;
  113         3. Demonstrates that its board of directors and managers
  114  are experienced in microlending and small business finance and
  115  development;
  116         4. Demonstrates that it has the technical skills and
  117  sufficient resources and expertise to:
  118         a. Analyze and evaluate applications by entrepreneurs,
  119  micro businesses, and small businesses applying for microloans;
  120         b. Underwrite and service microloans provided pursuant to
  121  this part; and
  122         c. Coordinate the provision of such business management
  123  training, business development training, and technical
  124  assistance as required by this part;
  125         5. Demonstrates that it has established viable, existing
  126  partnerships with public and private nonstate funding sources,
  127  economic development agencies, and workforce development and job
  128  referral networks; and
  129         6. Demonstrates that it has a plan that includes proposed
  130  microlending activities under the loan program, including, but
  131  not limited to, the types of entrepreneurs and businesses to be
  132  assisted and the size and range of loans the loan administrator
  133  intends to make.
  134         (b) To ensure that prospective loan administrators meet the
  135  requirements of subparagraphs (a)2.-6., the request for proposal
  136  must require submission of the following information:
  137         1. A description of the types of entrepreneurs, micro
  138  businesses, and small businesses the loan administrator has
  139  assisted in the past, and the average size and terms of loans
  140  made in the past to such entities;
  141         2. A description of the experience of members of the board
  142  of directors and managers in the areas of microlending and small
  143  business finance and development;
  144         3. A description of the loan administrator’s underwriting
  145  and credit policies and procedures, credit decisionmaking
  146  process, monitoring policies and procedures, and collection
  147  practices, and samples of any currently used loan documentation;
  148         4. A description of the nonstate funding sources that will
  149  be used by the loan administrator in conjunction with the state
  150  funds to make microloans pursuant to this section;
  151         5. The loan administrator’s three most recent financial
  152  audits or, if no prior audits have been completed, the loan
  153  administrator’s three most recent unaudited financial
  154  statements; and
  155         6. A conflict of interest statement from the loan
  156  administrator’s board of directors certifying that a board
  157  member, employee, or agent, or an immediate family member
  158  thereof, or any other person connected to or affiliated with the
  159  loan administrator, is not receiving or will not receive any
  160  type of compensation or remuneration from an entrepreneur, a
  161  micro business, or a small business that has received or will
  162  receive funds from the loan program. The department may waive
  163  this requirement for good cause shown. As used in this
  164  subparagraph, the term “immediate family” means a parent, child,
  165  or spouse, or any other relative by blood, marriage, or
  166  adoption, of a board member, employee, or agent of the loan
  167  administrator.
  168         (4) CONTRACT AND AWARD OF FUNDS.—
  169         (b) State funds may be used only to provide direct
  170  microloans to entrepreneurs, micro businesses, and small
  171  businesses according to the limitations, terms, and conditions
  172  provided in this part. Except as provided in subsection (5),
  173  state funds may not be used to pay administrative costs,
  174  underwriting costs, servicing costs, or any other costs
  175  associated with providing microloans, business management
  176  training, business development training, or technical
  177  assistance.
  178         (c) The loan administrator shall reserve 10 percent of the
  179  total award amount from the department to provide microloans
  180  pursuant to this part to entrepreneurs, micro businesses, and
  181  small businesses that employ no more than five people and
  182  generate annual gross revenues averaging no more than $250,000
  183  per year for the last 2 years.
  184         (e) Within 30 days of executing its contract with the
  185  department, the loan administrator must enter into a memorandum
  186  of understanding with the network:
  187         1. For the provision of business management training,
  188  business development training, and technical assistance to
  189  entrepreneurs, micro businesses, and small businesses that
  190  receive microloans under this part; and
  191         2. To promote the program to underserved entrepreneurs,
  192  micro businesses, and small businesses.
  193         (f) By September 1, 2014, the department shall review
  194  industry best practices and determine the minimum business
  195  management training, business development training, and
  196  technical assistance that must be provided by the network to
  197  achieve the goals of this part.
  198         (9) ELIGIBILITY AND APPLICATION.—
  199         (a) To be eligible for a microloan, an applicant must, at a
  200  minimum, be an entrepreneur, a micro business, or a small
  201  business located in this state.
  202         (10) STATEWIDE STRATEGIC PLAN.—In implementing this
  203  section, the department shall be guided by the 5-year statewide
  204  strategic plan adopted pursuant to s. 20.60(5). The department
  205  shall promote and advertise the loan program by, among other
  206  things, cooperating with government, nonprofit, and private
  207  industry to organize, host, or participate in seminars and other
  208  forums for entrepreneurs, micro businesses, and small
  209  businesses.
  210         (11) STUDY.—By December 31, 2014, the department shall
  211  commence or commission a study to identify methods and best
  212  practices that will increase access to credit to entrepreneurs
  213  and small businesses in this state. The study must also explore
  214  the ability of, and limitations on, Florida nonprofit
  215  organizations and private financial institutions to expand
  216  access to credit to entrepreneurs and small businesses in this
  217  state.
  218         Section 5. Subsections (1), (3), (7), and (8) of section
  219  288.9935, Florida Statutes, are amended to read:
  220         288.9935 Microfinance Guarantee Program.—
  221         (1) The Microfinance Guarantee Program is established in
  222  the department. The purpose of the program is to stimulate
  223  access to credit for entrepreneurs, micro businesses, and small
  224  businesses in this state by providing targeted guarantees to
  225  loans made to such entrepreneurs, micro businesses, and small
  226  businesses. Funds appropriated to the program must be reinvested
  227  and maintained as a long-term and stable source of funding for
  228  the program.
  229         (3) The department must enter into a contract with
  230  Enterprise Florida, Inc., to administer the Microfinance
  231  Guarantee Program. In administering the program, Enterprise
  232  Florida, Inc., must, at a minimum:
  233         (a) Establish lender and borrower eligibility requirements
  234  in addition to those provided in this section;
  235         (b) Determine a reasonable leverage ratio of loan amounts
  236  guaranteed to state funds; however, the leverage ratio may not
  237  exceed 3 to 1;
  238         (c) Establish reasonable fees and interest;
  239         (d) Promote the program to financial institutions that
  240  provide loans to entrepreneurs, micro businesses, and small
  241  businesses in order to maximize the number of lenders throughout
  242  the state which participate in the program;
  243         (e) Enter into a memorandum of understanding with the
  244  network to promote the program to underserved entrepreneurs,
  245  micro businesses, and small businesses;
  246         (f) Establish limits on the total amount of loan guarantees
  247  a single lender can receive;
  248         (g) Establish an average loan guarantee amount for loans
  249  guaranteed under this section;
  250         (h) Establish a risk-sharing strategy to be employed in the
  251  event of a loan failure; and
  252         (i) Establish financial performance measures and objectives
  253  for the program in order to maximize the state funds.
  254         (7) To be eligible to receive a loan guarantee under the
  255  Microfinance Guarantee Program, a borrower must, at a minimum:
  256         (a) Be an entrepreneur, a micro business, or a small
  257  business located in this state;
  258         (b) Employ 25 or fewer people;
  259         (c) Generate average annual gross revenues of $1.5 million
  260  or less per year for the last 2 years; and
  261         (d) Meet any additional requirements established by
  262  Enterprise Florida, Inc.
  263         (8) By October 1 of each year, Enterprise Florida, Inc.,
  264  shall submit a complete and detailed annual report to the
  265  department for inclusion in the department’s report required
  266  under s. 20.60(10). The report must, at a minimum, provide:
  267         (a) A comprehensive description of the program, including
  268  an evaluation of its application and guarantee activities,
  269  recommendations for change, and identification of any other
  270  state programs that overlap with the program;
  271         (b) An assessment of the current availability of and access
  272  to credit for entrepreneurs, micro businesses, and small
  273  businesses in this state;
  274         (c) A summary of the financial and employment results of
  275  the entrepreneurs, micro businesses, and small businesses
  276  receiving loan guarantees, including the number of full-time
  277  equivalent jobs created as a result of the guaranteed loans and
  278  the amount of wages paid to employees in the newly created jobs;
  279         (d) Industry data about the borrowers, including the six
  280  digit North American Industry Classification System (NAICS)
  281  code;
  282         (e) The name and location of lenders that receive loan
  283  guarantees;
  284         (f) The amount of state funds received by Enterprise
  285  Florida, Inc.;
  286         (g) The number of loan guarantee applications received;
  287         (h) The number, duration, location, and amount of
  288  guarantees made;
  289         (i) The number and amount of guaranteed loans outstanding,
  290  if any;
  291         (j) The number and amount of guaranteed loans with payments
  292  overdue, if any;
  293         (k) The number and amount of guaranteed loans in default,
  294  if any;
  295         (l) The repayment history of the guaranteed loans made; and
  296         (m) An evaluation of the program’s ability to meet the
  297  financial performance measures and objectives specified in
  298  subsection (3).
  299         Section 6. Subsection (1) of section 288.9936, Florida
  300  Statutes, is amended to read:
  301         288.9936 Annual report of the Microfinance Loan Program.—
  302         (1) The department shall include in the report required by
  303  s. 20.60(10) a complete and detailed annual report on the
  304  Microfinance Loan Program. The report must include:
  305         (a) A comprehensive description of the program, including
  306  an evaluation of its application and funding activities,
  307  recommendations for change, and identification of any other
  308  state programs that overlap with the program;
  309         (b) The financial institutions and the public and private
  310  organizations and individuals participating in the program;
  311         (c) An assessment of the current availability of and access
  312  to credit for entrepreneurs, micro businesses, and small
  313  businesses in this state;
  314         (d) A summary of the financial and employment results of
  315  the entities receiving microloans;
  316         (e) The number of full-time equivalent jobs created as a
  317  result of the microloans and the amount of wages paid to
  318  employees in the newly created jobs;
  319         (f) The number and location of prospective loan
  320  administrators that responded to the department request for
  321  proposals;
  322         (g) The amount of state funds received by the loan
  323  administrator;
  324         (h) The number of microloan applications received by the
  325  loan administrator;
  326         (i) The number, duration, and location of microloans made
  327  by the loan administrator, including the aggregate number of
  328  microloans made to minority business enterprises if available;
  329         (j) The number and amount of microloans outstanding, if
  330  any;
  331         (k) The number and amount of microloans with payments
  332  overdue, if any;
  333         (l) The number and amount of microloans in default, if any;
  334         (m) The repayment history of the microloans made;
  335         (n) The repayment history and performance of funding
  336  awards;
  337         (o) An evaluation of the program’s ability to meet the
  338  financial performance measures and objectives specified in s.
  339  288.9934; and
  340         (p) A description and evaluation of the technical
  341  assistance and business management and development training
  342  provided by the network pursuant to its memorandum of
  343  understanding with the loan administrator.
  344         Section 7. Present subsection (3) of section 337.027,
  345  Florida Statutes, is redesignated as subsection (4), a new
  346  subsection (3) is added to that section, and subsection (1) of
  347  that section is amended, to read:
  348         337.027 Authority to implement a business development
  349  program.—
  350         (1) The department may establish a program for highway
  351  projects which would assist small businesses and micro
  352  businesses. The purpose of this program is to increase
  353  competition, lower prices, and provide increased support to meet
  354  the department’s future work program. The program may include,
  355  but is not limited to, setting aside contracts, providing
  356  preference points for the use of small businesses and micro
  357  businesses, providing special assistance in bidding and contract
  358  completion, waiving bond requirements, and implementing other
  359  strategies that would increase competition.
  360         (3)As used in this section, the term “micro business” has
  361  the same meaning as provided in s. 287.085.
  362         Section 8. Section 373.1135, Florida Statutes, is amended
  363  to read:
  364         373.1135 Small business and micro business program.—Each
  365  water management district, as created in this chapter, may
  366  implement a small business and micro business program designed
  367  to help small businesses and micro businesses, including those
  368  owned by women and minorities, to participate in district
  369  procurement and contract activities. The purpose of the program
  370  is to spur economic development and support small businesses and
  371  micro businesses, including women-owned and minority-owned
  372  businesses, to successfully expand in the marketplace. Program
  373  specifics shall be provided by rule pursuant to s. 373.113. As
  374  used in this section, the term “micro business” has the same
  375  meaning as provided in s. 287.085.
  376         Section 9. This act shall take effect July 1, 2019.