Senate Bill sb0686c1
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Florida Senate - 2006 CS for SB 686
By the Committee on Banking and Insurance; and Senator Bennett
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1 A bill to be entitled
2 An act relating to educational loan marketing;
3 creating s. 1009.9997, F.S.; creating the
4 Educational Loan Marketing Corporation of
5 Florida, Inc., to provide services as a
6 secondary student loan market; requiring
7 compliance with not-for-profit corporation
8 requirements and public-records and
9 public-meetings requirements; authorizing the
10 corporation to borrow through public bonds and
11 private financial sources; providing uses of
12 proceeds of the corporation; providing for a
13 board of directors and specifying membership;
14 providing for powers and duties of the board of
15 directors; requiring the corporation to submit
16 a business plan to the Department of Education;
17 providing accounting and audit requirements;
18 requiring revenues of the corporation to be
19 used for providing secondary student loan
20 market services; prohibiting state indebtedness
21 or obligation; exempting bonds issued by the
22 corporation, their transfer, and the income
23 therefrom from taxation; providing intent and
24 requirements relating to costs; requiring
25 budget approval by the department; requiring an
26 annual report to the Legislature and the
27 Department of Education; providing an effective
28 date.
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30 Be It Enacted by the Legislature of the State of Florida:
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Florida Senate - 2006 CS for SB 686
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1 Section 1. Section 1009.9997, Florida Statutes, is
2 created to read:
3 1009.9997 Educational Loan Marketing Corporation of
4 Florida, Inc.--
5 (1) There is created a not-for-profit corporation, to
6 be known as the Educational Loan Marketing Corporation of
7 Florida, Inc., which shall be registered, incorporated,
8 organized, and operated in compliance with chapter 617 and s.
9 501(c)(3) of the Internal Revenue Code, as amended. The
10 Legislature finds, however, that public policy dictates that
11 the Educational Loan Marketing Corporation of Florida, Inc.,
12 operate in the most open and accessible manner consistent with
13 its public purpose. To this end, the Legislature specifically
14 declares that the Educational Loan Marketing Corporation of
15 Florida, Inc., and its boards and advisory committees or
16 similar groups created by the Educational Loan Marketing
17 Corporation of Florida, Inc., are subject to chapter 119,
18 relating to public records, and chapter 286, relating to
19 public meetings and records.
20 (2)(a) The corporation shall purchase, service, and
21 otherwise provide access and service as a secondary market for
22 student loans in this state. The corporation is authorized to
23 borrow funds and incur debt, including the issuance of revenue
24 bonds, for the purposes set forth in this section. The
25 corporation may apply for private activity bond allocation in
26 accordance with part VI of chapter 159.
27 (b) Proceeds of the corporation shall be used for the
28 creation of incentive programs serving state residents, such
29 as, but not limited to, interest rate reductions for automated
30 and timely payments and programs for students pursuing a
31 degree in areas of critical need in the state.
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Florida Senate - 2006 CS for SB 686
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1 (3) The corporation shall be administered by a
2 13-member board of directors composed of 11 members appointed
3 by the Governor, one member appointed by the President of the
4 Senate, and one member appointed by the Speaker of the House
5 of Representatives. The members appointed by the President of
6 the Senate and the Speaker of the House of Representatives
7 shall serve as nonvoting, ex officio members of the board of
8 directors and shall serve at the pleasure of the appointing
9 officers. The members appointed by the Governor shall be
10 confirmed by the Senate. The 11 members of the board of
11 directors appointed by the Governor shall include:
12 (a) Two members who are representatives of lending
13 institutions that originate student loans in the state and who
14 have a favorable reputation for skill, knowledge, and
15 experience in the field of higher education loan finance.
16 (b) Two members who are representatives of state
17 universities.
18 (c) Two members who are representatives of community
19 colleges.
20 (d) One member who represents technical schools that
21 are eligible to receive student loans.
22 (e) One member who represents independent colleges and
23 universities.
24 (f) Two members who are chosen from a list of five
25 names submitted by the Chief Financial Officer.
26 (g) One lay citizen who does not derive a majority of
27 his or her income from education or an education-related
28 field.
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30 Except for the members of the Legislature, all members of the
31 board of directors, including the chair, shall be appointed to
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Florida Senate - 2006 CS for SB 686
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1 serve 3-year terms. However, for the purpose of providing
2 staggered terms, of the initial appointments three members
3 shall be appointed to 1-year terms, three members shall be
4 appointed to 2-year terms, and five members shall be appointed
5 to 3-year terms.
6 (4)(a) The board of directors shall annually elect a
7 chair and vice chair.
8 (b) Members of the board of directors are entitled to
9 reimbursement from moneys of the corporation for expenses
10 incurred as members under s. 112.061, but may not otherwise be
11 compensated for their services.
12 (c) Each member of the board of directors who is not
13 otherwise required to file financial disclosure under s. 8,
14 Art. II of the State Constitution or s. 112.3144 shall file
15 disclosure of financial interests under s. 112.3145.
16 (5) The board of directors may employ or retain such
17 persons as are necessary to perform the administrative and
18 financial transactions and responsibilities of the corporation
19 and to perform other necessary and proper functions required
20 by law.
21 (6)(a) The corporation shall annually prepare and
22 submit a business plan to the Department of Education. The
23 department shall monitor the corporation and set performance
24 standards that are consistent with its mission.
25 (b) The corporation must maintain adequate accounting
26 records that comply with all applicable federal and state laws
27 and must authorize the department to have access to and
28 conduct audits of all records concerning the contracted and
29 outsourced functions or services.
30 (c) The corporation must meet all legal and auditing
31 requirements for record retention and transfer to the state,
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1 at no cost to the state, of all public records in its
2 possession upon termination or dissolution. All records stored
3 electronically must be provided to the state in a format that
4 is compatible with state information technology systems.
5 (7)(a) It is the intent of the Legislature that the
6 tax exemptions provided in this subsection will augment the
7 financial resources of the corporation to better enable the
8 corporation to fulfill its public purpose.
9 (b) The revenues of the corporation are funds received
10 for providing services as a secondary student loan market as
11 required by this section and for conducting all other
12 activities of the corporation and are not taxes, fees,
13 licenses, or charges for services imposed by the Legislature
14 on individuals, businesses, or agencies outside state
15 government. Bonds and other debt obligations issued by or on
16 behalf of the corporation shall be payable solely from funds
17 derived directly from sources other than state tax revenues,
18 do not constitute a general obligation or indebtedness of the
19 state or any of its agencies or political subdivisions, and
20 shall not be a debt of the state or any of its agencies or
21 political subdivisions, and the full faith and credit of the
22 state is not pledged to the payment of the principal of,
23 premium if any on, or interest on these obligations. The
24 issuance of these obligations does not directly, indirectly,
25 or contingently obligate the state to use state funds, to levy
26 or to pledge any form of taxation whatsoever, or to make any
27 appropriation for payment of the principal of, premium if any
28 on, or interest on such obligations. Any bonds issued by the
29 corporation, their transfer, and the income therefrom,
30 including any profit made on the sale thereof, shall at all
31 times be free from taxation of every kind by the state or any
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1 political subdivision, local unit, or other instrumentality
2 thereof. However, this exemption does not apply to any tax
3 imposed by chapter 220 on interest, income, or profits on debt
4 obligations owned by corporations other than the Educational
5 Loan Marketing Corporation of Florida, Inc.
6 (8)(a) It is the intent of the Legislature that the
7 corporation be self-sustaining and that all operational costs,
8 with the exception of reasonable and necessary start-up costs,
9 be paid through income received by the corporation from
10 activities authorized under this section. Any funds received
11 from the state to assist in start-up costs must be repaid by
12 the corporation.
13 (b) In keeping with its public mission, the
14 corporation shall keep expenses, including salaries and
15 benefits, on par with similarly situated public-private
16 entities, subject to approval by the Department of Education.
17 The corporation shall annually submit a proposed budget to the
18 department, which shall approve it consistent with this
19 section.
20 (9) The corporation shall submit an annual report to
21 the President of the Senate, the Speaker of the House of
22 Representatives, and the Department of Education 3 months
23 after the end of each fiscal year of the corporation. The
24 annual report must describe the corporation's efforts in
25 achieving performance standards established by the department
26 and the objectives of the annual business plan, and the status
27 of developing and implementing incentive programs such as, but
28 not limited to, interest-rate reductions for automated and
29 timely payments and programs for students pursuing degrees in
30 areas of critical need in the state. The annual report must
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Florida Senate - 2006 CS for SB 686
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1 also include annual audited financial statements of the
2 corporation for the prior fiscal year.
3 Section 2. This act shall take effect upon becoming a
4 law.
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6 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
7 Senate Bill 686
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9 1. Requires the Educational Loan Marketing Corporation
(corporation) to comply with the provisions relating to
10 tax-exempt entities created pursuant to s. 501(c)(3) of
the Internal Revenue Code, as amended.
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2. Requires the corporation to submit an annual report to
12 the Legislature and the Department of Education
describing its financial and operational performance for
13 the prior fiscal year.
14 3. Provides technical and clarifying changes related to the
board of directors and the budget approval process.
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