Florida Senate - 2011                (Corrected Copy)    SB 1184
       By Senator Siplin
       19-01906-11                                           20111184__
    1                        A bill to be entitled                      
    2         An act relating to economic development; amending ss.
    3         288.1081 and 288.1082, F.S.; establishing the Economic
    4         Gardening Business Loan Program and the Economic
    5         Gardening Technical Assistance Program as permanent
    6         programs; revising conditions under which loan
    7         agreements may provide borrowers with flexibility in
    8         meeting the projected number of jobs; revising the
    9         method for calculating the servicing fee payable to a
   10         loan administrator; deleting a requirement that
   11         certain funds be deposited in the General Revenue
   12         Fund; providing for use of the funds; deleting an
   13         obsolete provision authorizing the adoption of initial
   14         emergency rules; deleting provision prohibiting the
   15         award of new loans after a specified date; deleting
   16         provision for the reversion of certain unexpended
   17         appropriations; deleting provisions for future repeal
   18         of the loan program; revising the date upon which the
   19         Office of Tourism, Trade, and Economic Development
   20         must begin to submit annual reports to the Governor
   21         and Legislature on the loan program and technical
   22         assistance program; providing for retroactive
   23         application of provisions revising the loan program;
   24         providing an effective date.
   26  Be It Enacted by the Legislature of the State of Florida:
   28         Section 1. Section 288.1081, Florida Statutes, is amended
   29  to read:
   30         288.1081 Economic Gardening Business Loan Pilot Program.—
   31         (1) There is created within the Office of Tourism, Trade,
   32  and Economic Development the Economic Gardening Business Loan
   33  Pilot Program. The purpose of the pilot program is to stimulate
   34  investment in Florida’s economy by providing loans to expanding
   35  businesses in the state. As used in this section, the term
   36  “office” means the Office of Tourism, Trade, and Economic
   37  Development.
   38         (2) The Legislature finds that it is vital to the overall
   39  health and growth of the state’s economy to promote favorable
   40  conditions for expanding Florida businesses that demonstrate the
   41  ability to grow. The Legislature further finds that, due to the
   42  current extraordinary economic challenges confronting the state,
   43  there exists a public purpose in expending state resources to
   44  stimulate investment in Florida’s economy. It is therefore the
   45  intent of the Legislature that resources be provided for the
   46  loan pilot program.
   47         (3)(a) To be eligible for a loan under the pilot program,
   48  an applicant must be a business eligible for assistance under
   49  the Economic Gardening Technical Assistance Pilot Program as
   50  provided in s. 288.1082(4)(a).
   51         (b) A loan applicant must submit a written application to
   52  the loan administrator in the format prescribed by the loan
   53  administrator. The application must include:
   54         1. The applicant’s federal employer identification number,
   55  unemployment account number, and sales or other tax registration
   56  number.
   57         2. The street address of the applicant’s principal place of
   58  business in this state.
   59         3. A description of the type of economic activity, product,
   60  or research and development undertaken by the applicant,
   61  including the six-digit North American Industry Classification
   62  System code for each type of economic activity conducted by the
   63  applicant.
   64         4. The applicant’s annual revenue, number of employees,
   65  number of full-time equivalent employees, and other information
   66  necessary to verify the applicant’s eligibility for the
   67  technical assistance pilot program under s. 288.1082(4)(a).
   68         5. The projected investment in the business, if any, which
   69  the applicant proposes in conjunction with the loan.
   70         6. The total investment in the business from all sources,
   71  if any, which the applicant proposes in conjunction with the
   72  loan.
   73         7. The number of net new full-time equivalent jobs that, as
   74  a result of the loan, the applicant proposes to create in this
   75  state as of December 31 of each year and the average annual wage
   76  of the proposed jobs.
   77         8. The total number of full-time equivalent employees the
   78  applicant currently employs in this state.
   79         9. The date that the applicant anticipates it needs the
   80  loan.
   81         10. A detailed explanation of why the loan is needed to
   82  assist the applicant in expanding jobs in the state.
   83         11. A statement that all of the applicant’s available
   84  corporate assets are pledged as collateral for the amount of the
   85  loan.
   86         12. A statement that the applicant, upon receiving the
   87  loan, agrees not to seek additional long-term debt without prior
   88  approval of the loan administrator.
   89         13. A statement that the loan is a joint obligation of the
   90  business and of each person who owns at least 20 percent of the
   91  business.
   92         14. Any additional information requested by the office or
   93  the loan administrator.
   94         (c) The loan administrator, after verifying the accuracy of
   95  a submitted application, shall award the loan to the applicant
   96  if the administrator determines that the applicant, as compared
   97  to other applicants submitting applications, is in the best
   98  position to use the loan to continue making a successful long
   99  term business commitment to the state. The loan administrator
  100  also shall consider the following factors:
  101         1. Whether the applicant has applied for or received
  102  incentives from local governments;
  103         2. Whether the applicant has applied for or received
  104  waivers of taxes, impact fees, or other fees or charges by local
  105  governments; and
  106         3. What other sources of investments or financing for the
  107  project that is the subject of the loan application will be
  108  available to the applicant.
  109         (d) A borrower awarded a loan under this section and the
  110  loan administrator must enter into a loan agreement that
  111  provides for the borrower’s repayment of the loan.
  112         (4) The following terms apply to a loan received under the
  113  pilot program:
  114         (a) The maximum amount of the loan is $250,000.
  115         (b) The proceeds of the loan may be used for working
  116  capital purchases, employee training, or salaries for newly
  117  created jobs in the state.
  118         (c) The security interest for the loan’s collateral
  119  covering all of the borrower’s available corporate assets to
  120  cover the amount of the loan must be perfected by recording a
  121  lien under the Uniform Commercial Code.
  122         (d) The period of the loan is 4 years.
  123         (e) The interest rate of the loan is 2 percent. However, if
  124  the borrower does not create the projected number of jobs within
  125  the terms of the loan agreement, the interest rate shall be
  126  increased for the remaining period of the loan to the prime rate
  127  published in the Wall Street Journal, as of the date specified
  128  in the loan agreement, plus 4 percentage points. The loan
  129  agreement may provide flexibility in meeting the projected
  130  number of jobs for delays due to governmental regulatory issues,
  131  such as including, but not limited to, permitting and other
  132  documented justifiable causes.
  133         (f) For the first 12 months of the loan, payment is due for
  134  interest only, payable during the twelfth month. Thereafter,
  135  payment for interest and principal is due each month until the
  136  loan is paid in full. Interest and principal payments are based
  137  on the unpaid balance of the total loan amount.
  138         (5)(a) The office may designate one or more qualified
  139  entities to serve as loan administrators for the pilot program.
  140  A loan administrator must:
  141         1. Be a Florida corporation not for profit incorporated
  142  under chapter 617 which has its principal place of business in
  143  the state.
  144         2. Have 5 years of verifiable experience of lending to
  145  businesses in this state.
  146         3. Submit an application to the office on forms prescribed
  147  by the office. The application must include the loan
  148  administrator’s business plan for its proposed lending
  149  activities under the pilot program, including, but not limited
  150  to, a description of its outreach efforts, underwriting, credit
  151  policies and procedures, credit decision processes, monitoring
  152  policies and procedures, and collection practices; the
  153  membership of its board of directors; and samples of its
  154  currently used loan documentation. The application must also
  155  include a detailed description and supporting documentation of
  156  the nature of the loan administrator’s partnerships with local
  157  or regional economic and business development organizations.
  158         (b) The office, upon selecting a loan administrator, shall
  159  enter into a grant agreement with the administrator to issue the
  160  available loans to eligible applicants. The grant agreement must
  161  specify the aggregate amount of the loans authorized for award
  162  by the loan administrator. The term of the grant agreement must
  163  be at least 4 years, except that the office may terminate the
  164  agreement earlier if the loan administrator fails to meet
  165  minimum performance standards set by the office. The grant
  166  agreement may be amended by mutual consent of both parties.
  167         (c) The office shall disburse from the Economic Development
  168  Trust Fund to the loan administrator the appropriations provided
  169  for the loan pilot program. Disbursements to the loan
  170  administrator must not exceed the aggregate amount of the loans
  171  authorized in the grant agreement. The office may not disburse
  172  more than 50 percent of the aggregate amount of the loans
  173  authorized in the grant agreement until the office verifies the
  174  borrowers’ use of the loan proceeds and the loan administrator’s
  175  successful credit decisionmaking policies.
  176         (d) A loan administrator is entitled to receive a loan
  177  origination fee, payable at closing, of 1 percent of each loan
  178  issued by the loan administrator and a servicing fee of 0.625
  179  percent per annum of the loan’s outstanding principal balance,
  180  payable monthly. During the first 12 months of the loan, the
  181  servicing fee shall be paid from the disbursement from the
  182  Economic Development Trust Fund, and thereafter the loan
  183  administrator shall collect the servicing fee from the payments
  184  made by the borrower, charging the fee against repayments of
  185  principal.
  186         (e) A loan administrator, after collecting the servicing
  187  fee in accordance with paragraph (d), shall use remit the
  188  borrower’s collected interest, principal payments, and charges
  189  for late payments to provide additional loans to eligible
  190  borrowers under this section to the office on a quarterly basis.
  191  If the borrower defaults on the loan, the loan administrator
  192  shall initiate collection efforts to seek repayment of the loan.
  193  The loan administrator, upon collecting payments for a defaulted
  194  loan, may shall remit the payments to the office but, to the
  195  extent authorized in the grant agreement, may deduct the costs
  196  of the administrator’s collection efforts, and shall use the
  197  remaining payments to provide additional loans to eligible
  198  borrowers under this section. The office shall deposit all funds
  199  received under this paragraph in the General Revenue Fund.
  200         (f) A loan administrator shall submit quarterly reports to
  201  the office which include the information required in the grant
  202  agreement. A quarterly report must include, at a minimum, the
  203  number of full-time equivalent jobs created as a result of the
  204  loans, the amount of wages paid to employees in the newly
  205  created jobs, and the locations and types of economic activity
  206  undertaken by the borrowers.
  207         (6) All notes, mortgages, security agreements, letters of
  208  credit, or other instruments that are given to secure the
  209  repayment of loans issued in connection with the financing of
  210  any loan under the program, without regard to the status of any
  211  party thereto as a private party, are exempt from taxation by
  212  the state and its political subdivisions. The exemption granted
  213  in this subsection does not apply to any tax imposed by chapter
  214  220 on interest, income, or profits on debt obligations owned by
  215  corporations.
  216         (7) The office shall adopt rules under ss. 120.536(1) and
  217  120.54 to administer this section. To the extent necessary to
  218  expedite implementation of the pilot program, the office may
  219  adopt initial emergency rules for the pilot program in
  220  accordance with s. 120.54(4).
  221         (8) On June 30 and December 31 of each year, beginning in
  222  2012 2009, the office shall submit a report to the Governor, the
  223  President of the Senate, and the Speaker of the House of
  224  Representatives which describes in detail the use of the loan
  225  funds. The report must include, at a minimum, the number of
  226  businesses receiving loans, the number of full-time equivalent
  227  jobs created as a result of the loans, the amount of wages paid
  228  to employees in the newly created jobs, the locations and types
  229  of economic activity undertaken by the borrowers, the amounts of
  230  loan repayments made to date, and the default rate of borrowers.
  231         (9) Unexpended balances of appropriations provided for the
  232  loan pilot program shall not revert to the fund from which the
  233  appropriation was made at the end of a fiscal year but shall be
  234  retained in the Economic Development Trust Fund and be carried
  235  forward for expenditure for the loan pilot program during the
  236  following fiscal year. A loan administrator may not award a new
  237  loan or enter into a loan agreement after June 30, 2011.
  238  Balances of appropriations provided for the pilot program which
  239  remain unexpended as of July 1, 2011, shall revert to the
  240  General Revenue Fund.
  241         (10) This section is repealed July 1, 2016, unless reviewed
  242  and reenacted by the Legislature before that date.
  243         Section 2. Section 288.1082, Florida Statutes, is amended
  244  to read:
  245         288.1082 Economic Gardening Technical Assistance Pilot
  246  Program.—
  247         (1) There is created within the Office of Tourism, Trade,
  248  and Economic Development the Economic Gardening Technical
  249  Assistance Pilot Program. The purpose of the pilot program is to
  250  stimulate investment in Florida’s economy by providing technical
  251  assistance for expanding businesses in the state. As used in
  252  this section, the term “office” means the Office of Tourism,
  253  Trade, and Economic Development.
  254         (2) The office shall contract with one or more entities to
  255  administer the technical assistance pilot program under this
  256  section. The office shall award each contract in accordance with
  257  the competitive bidding requirements in s. 287.057 to an entity
  258  that demonstrates the ability to implement the pilot program on
  259  a statewide basis, has an outreach plan, and has the ability to
  260  provide counseling services, access to technology and
  261  information, marketing services and advice, business management
  262  support, and other similar services. In selecting these
  263  entities, the office also must consider whether the entities
  264  will qualify for matching funds to provide the technical
  265  assistance.
  266         (3) A contracted entity administering the pilot program
  267  shall provide technical assistance for eligible businesses which
  268  includes, but is not limited to:
  269         (a) Access to free or affordable information services and
  270  consulting services, including information on markets,
  271  customers, and competitors, such as business databases,
  272  geographic information systems, and search engine marketing.
  273         (b) Development of business connections, including
  274  interaction and exchange among business owners and resource
  275  providers, such as trade associations, think tanks, academic
  276  institutions, business roundtables, peer-to-peer learning
  277  sessions, and mentoring programs.
  278         (4)(a) To be eligible for assistance under the pilot
  279  program, a business must be a for-profit, privately held,
  280  investment-grade business that employs at least 10 persons but
  281  not more than 50 persons, has maintained its principal place of
  282  business in the state for at least the previous 2 years,
  283  generates at least $1 million but not more than $25 million in
  284  annual revenue, qualifies for the tax refund program for
  285  qualified target industry businesses under s. 288.106, and,
  286  during 3 of the previous 5 years, has increased both its number
  287  of full-time equivalent employees in this state and its gross
  288  revenues.
  289         (b) A contracted entity administering the pilot program, in
  290  selecting the eligible businesses to receive assistance, shall
  291  choose businesses in more than one industry cluster and, to the
  292  maximum extent practicable, shall choose businesses that are
  293  geographically distributed throughout Florida or are in
  294  partnership with businesses that are geographically distributed
  295  throughout Florida.
  296         (5)(a) A business receiving assistance under the pilot
  297  program must enter into an agreement with the contracted entity
  298  administering the program to establish the business’s commitment
  299  to participation in the pilot program. The agreement must
  300  require, at a minimum, that the business:
  301         1. Attend a minimum number of meetings between the business
  302  and the contracted entity administering the pilot program.
  303         2. Report job creation data in the manner prescribed by the
  304  contracted entity administering the pilot program.
  305         3. Provide financial data in the manner prescribed by the
  306  contracted entity administering the program.
  307         (b) The office or the contracted entity administering the
  308  pilot program may prescribe in the agreement additional
  309  reporting requirements that are necessary to track the progress
  310  of the business and monitor the business’s implementation of the
  311  assistance. The contracted entity shall report the information
  312  to the office on a quarterly basis.
  313         (6) A contracted entity administering the pilot program is
  314  authorized to promote the general business interests or
  315  industrial interests of the state.
  316         (7) The office shall review the progress of a contracted
  317  entity administering the pilot program at least once each 6
  318  months and shall determine whether the contracted entity is
  319  meeting its contractual obligations for administering the pilot
  320  program. The office may terminate and rebid a contract if the
  321  contracted entity does not meet its contractual obligations.
  322         (8) On December 31 of each year, beginning in 2012 2009,
  323  the office shall submit a report to the Governor, the President
  324  of the Senate, and the Speaker of the House of Representatives
  325  which describes in detail the progress of the pilot program. The
  326  report must include, at a minimum, the number of businesses
  327  receiving assistance, the number of full-time equivalent jobs
  328  created as a result of the assistance, if any, the amount of
  329  wages paid to employees in the newly created jobs, and the
  330  locations and types of economic activity undertaken by the
  331  businesses.
  332         (9) The office may adopt rules under ss. 120.536(1) and
  333  120.54 to administer this section.
  334         Section 3. The amendments made by this act to s. 288.1081,
  335  Florida Statutes, shall apply retroactively to loans awarded
  336  before the effective date of this act.
  337         Section 4. This act shall take effect July 1, 2011.