HB 775

A bill to be entitled
2An act relating to economic development; amending ss.
3288.1081 and 288.1082, F.S.; establishing the Economic
4Gardening Business Loan Program and the Economic Gardening
5Technical Assistance Program as permanent programs;
6revising conditions under which loan agreements may
7provide borrowers with flexibility in meeting the
8projected number of jobs; revising the method for
9calculating the servicing fee payable to a loan
10administrator; deleting a requirement that certain funds
11be deposited in the General Revenue Fund; providing for
12use of the funds; deleting an obsolete provision
13authorizing the adoption of initial emergency rules;
14deleting provision prohibiting the award of new loans
15after a specified date; deleting provision for the
16reversion of certain unexpended appropriations; deleting
17provisions for future repeal of the loan program; revising
18the date upon which the Office of Tourism, Trade, and
19Economic Development must begin to submit annual reports
20to the Governor and Legislature on the loan program and
21technical assistance program; providing for retroactive
22application of provisions revising the loan program;
23providing an effective date.
25Be It Enacted by the Legislature of the State of Florida:
27     Section 1.  Section 288.1081, Florida Statutes, is amended
28to read:
29     288.1081  Economic Gardening Business Loan Pilot Program.-
30     (1)  There is created within the Office of Tourism, Trade,
31and Economic Development the Economic Gardening Business Loan
32Pilot Program. The purpose of the pilot program is to stimulate
33investment in Florida's economy by providing loans to expanding
34businesses in the state. As used in this section, the term
35"office" means the Office of Tourism, Trade, and Economic
37     (2)  The Legislature finds that it is vital to the overall
38health and growth of the state's economy to promote favorable
39conditions for expanding Florida businesses that demonstrate the
40ability to grow. The Legislature further finds that, due to the
41current extraordinary economic challenges confronting the state,
42there exists a public purpose in expending state resources to
43stimulate investment in Florida's economy. It is therefore the
44intent of the Legislature that resources be provided for the
45loan pilot program.
46     (3)(a)  To be eligible for a loan under the pilot program,
47an applicant must be a business eligible for assistance under
48the Economic Gardening Technical Assistance Pilot Program as
49provided in s. 288.1082(4)(a).
50     (b)  A loan applicant must submit a written application to
51the loan administrator in the format prescribed by the loan
52administrator. The application must include:
53     1.  The applicant's federal employer identification number,
54unemployment account number, and sales or other tax registration
56     2.  The street address of the applicant's principal place
57of business in this state.
58     3.  A description of the type of economic activity,
59product, or research and development undertaken by the
60applicant, including the six-digit North American Industry
61Classification System code for each type of economic activity
62conducted by the applicant.
63     4.  The applicant's annual revenue, number of employees,
64number of full-time equivalent employees, and other information
65necessary to verify the applicant's eligibility for the
66technical assistance pilot program under s. 288.1082(4)(a).
67     5.  The projected investment in the business, if any, which
68the applicant proposes in conjunction with the loan.
69     6.  The total investment in the business from all sources,
70if any, which the applicant proposes in conjunction with the
72     7.  The number of net new full-time equivalent jobs that,
73as a result of the loan, the applicant proposes to create in
74this state as of December 31 of each year and the average annual
75wage of the proposed jobs.
76     8.  The total number of full-time equivalent employees the
77applicant currently employs in this state.
78     9.  The date that the applicant anticipates it needs the
80     10.  A detailed explanation of why the loan is needed to
81assist the applicant in expanding jobs in the state.
82     11.  A statement that all of the applicant's available
83corporate assets are pledged as collateral for the amount of the
85     12.  A statement that the applicant, upon receiving the
86loan, agrees not to seek additional long-term debt without prior
87approval of the loan administrator.
88     13.  A statement that the loan is a joint obligation of the
89business and of each person who owns at least 20 percent of the
91     14.  Any additional information requested by the office or
92the loan administrator.
93     (c)  The loan administrator, after verifying the accuracy
94of a submitted application, shall award the loan to the
95applicant if the administrator determines that the applicant, as
96compared to other applicants submitting applications, is in the
97best position to use the loan to continue making a successful
98long-term business commitment to the state. The loan
99administrator also shall consider the following factors:
100     1.  Whether the applicant has applied for or received
101incentives from local governments;
102     2.  Whether the applicant has applied for or received
103waivers of taxes, impact fees, or other fees or charges by local
104governments; and
105     3.  What other sources of investments or financing for the
106project that is the subject of the loan application will be
107available to the applicant.
108     (d)  A borrower awarded a loan under this section and the
109loan administrator must enter into a loan agreement that
110provides for the borrower's repayment of the loan.
111     (4)  The following terms apply to a loan received under the
112pilot program:
113     (a)  The maximum amount of the loan is $250,000.
114     (b)  The proceeds of the loan may be used for working
115capital purchases, employee training, or salaries for newly
116created jobs in the state.
117     (c)  The security interest for the loan's collateral
118covering all of the borrower's available corporate assets to
119cover the amount of the loan must be perfected by recording a
120lien under the Uniform Commercial Code.
121     (d)  The period of the loan is 4 years.
122     (e)  The interest rate of the loan is 2 percent. However,
123if the borrower does not create the projected number of jobs
124within the terms of the loan agreement, the interest rate shall
125be increased for the remaining period of the loan to the prime
126rate published in the Wall Street Journal, as of the date
127specified in the loan agreement, plus 4 percentage points. The
128loan agreement may provide flexibility in meeting the projected
129number of jobs for delays due to governmental regulatory issues,
130such as including, but not limited to, permitting and other
131documented justifiable causes.
132     (f)  For the first 12 months of the loan, payment is due
133for interest only, payable during the twelfth month. Thereafter,
134payment for interest and principal is due each month until the
135loan is paid in full. Interest and principal payments are based
136on the unpaid balance of the total loan amount.
137     (5)(a)  The office may designate one or more qualified
138entities to serve as loan administrators for the pilot program.
139A loan administrator must:
140     1.  Be a Florida corporation not for profit incorporated
141under chapter 617 which has its principal place of business in
142the state.
143     2.  Have 5 years of verifiable experience of lending to
144businesses in this state.
145     3.  Submit an application to the office on forms prescribed
146by the office. The application must include the loan
147administrator's business plan for its proposed lending
148activities under the pilot program, including, but not limited
149to, a description of its outreach efforts, underwriting, credit
150policies and procedures, credit decision processes, monitoring
151policies and procedures, and collection practices; the
152membership of its board of directors; and samples of its
153currently used loan documentation. The application must also
154include a detailed description and supporting documentation of
155the nature of the loan administrator's partnerships with local
156or regional economic and business development organizations.
157     (b)  The office, upon selecting a loan administrator, shall
158enter into a grant agreement with the administrator to issue the
159available loans to eligible applicants. The grant agreement must
160specify the aggregate amount of the loans authorized for award
161by the loan administrator. The term of the grant agreement must
162be at least 4 years, except that the office may terminate the
163agreement earlier if the loan administrator fails to meet
164minimum performance standards set by the office. The grant
165agreement may be amended by mutual consent of both parties.
166     (c)  The office shall disburse from the Economic
167Development Trust Fund to the loan administrator the
168appropriations provided for the loan pilot program.
169Disbursements to the loan administrator must not exceed the
170aggregate amount of the loans authorized in the grant agreement.
171The office may not disburse more than 50 percent of the
172aggregate amount of the loans authorized in the grant agreement
173until the office verifies the borrowers' use of the loan
174proceeds and the loan administrator's successful credit
175decisionmaking policies.
176     (d)  A loan administrator is entitled to receive a loan
177origination fee, payable at closing, of 1 percent of each loan
178issued by the loan administrator and a servicing fee of 0.625
179percent per annum of the loan's outstanding principal balance,
180payable monthly. During the first 12 months of the loan, the
181servicing fee shall be paid from the disbursement from the
182Economic Development Trust Fund, and thereafter the loan
183administrator shall collect the servicing fee from the payments
184made by the borrower, charging the fee against repayments of
186     (e)  A loan administrator, after collecting the servicing
187fee in accordance with paragraph (d), shall use remit the
188borrower's collected interest, principal payments, and charges
189for late payments to provide additional loans to eligible
190borrowers under this section to the office on a quarterly basis.
191If the borrower defaults on the loan, the loan administrator
192shall initiate collection efforts to seek repayment of the loan.
193The loan administrator, upon collecting payments for a defaulted
194loan, may shall remit the payments to the office but, to the
195extent authorized in the grant agreement, may deduct the costs
196of the administrator's collection efforts, and shall use the
197remaining payments to provide additional loans to eligible
198borrowers under this section. The office shall deposit all funds
199received under this paragraph in the General Revenue Fund.
200     (f)  A loan administrator shall submit quarterly reports to
201the office which include the information required in the grant
202agreement. A quarterly report must include, at a minimum, the
203number of full-time equivalent jobs created as a result of the
204loans, the amount of wages paid to employees in the newly
205created jobs, and the locations and types of economic activity
206undertaken by the borrowers.
207     (6)  All notes, mortgages, security agreements, letters of
208credit, or other instruments that are given to secure the
209repayment of loans issued in connection with the financing of
210any loan under the program, without regard to the status of any
211party thereto as a private party, are exempt from taxation by
212the state and its political subdivisions. The exemption granted
213in this subsection does not apply to any tax imposed by chapter
214220 on interest, income, or profits on debt obligations owned by
216     (7)  The office shall adopt rules under ss. 120.536(1) and
217120.54 to administer this section. To the extent necessary to
218expedite implementation of the pilot program, the office may
219adopt initial emergency rules for the pilot program in
220accordance with s. 120.54(4).
221     (8)  On June 30 and December 31 of each year, beginning in
2222012 2009, the office shall submit a report to the Governor, the
223President of the Senate, and the Speaker of the House of
224Representatives which describes in detail the use of the loan
225funds. The report must include, at a minimum, the number of
226businesses receiving loans, the number of full-time equivalent
227jobs created as a result of the loans, the amount of wages paid
228to employees in the newly created jobs, the locations and types
229of economic activity undertaken by the borrowers, the amounts of
230loan repayments made to date, and the default rate of borrowers.
231     (9)  Unexpended balances of appropriations provided for the
232loan pilot program shall not revert to the fund from which the
233appropriation was made at the end of a fiscal year but shall be
234retained in the Economic Development Trust Fund and be carried
235forward for expenditure for the loan pilot program during the
236following fiscal year. A loan administrator may not award a new
237loan or enter into a loan agreement after June 30, 2011.
238Balances of appropriations provided for the pilot program which
239remain unexpended as of July 1, 2011, shall revert to the
240General Revenue Fund.
241     (10)  This section is repealed July 1, 2016, unless
242reviewed and reenacted by the Legislature before that date.
243     Section 2.  Section 288.1082, Florida Statutes, is amended
244to read:
245     288.1082  Economic Gardening Technical Assistance Pilot
247     (1)  There is created within the Office of Tourism, Trade,
248and Economic Development the Economic Gardening Technical
249Assistance Pilot Program. The purpose of the pilot program is to
250stimulate investment in Florida's economy by providing technical
251assistance for expanding businesses in the state. As used in
252this section, the term "office" means the Office of Tourism,
253Trade, and Economic Development.
254     (2)  The office shall contract with one or more entities to
255administer the technical assistance pilot program under this
256section. The office shall award each contract in accordance with
257the competitive bidding requirements in s. 287.057 to an entity
258that demonstrates the ability to implement the pilot program on
259a statewide basis, has an outreach plan, and has the ability to
260provide counseling services, access to technology and
261information, marketing services and advice, business management
262support, and other similar services. In selecting these
263entities, the office also must consider whether the entities
264will qualify for matching funds to provide the technical
266     (3)  A contracted entity administering the pilot program
267shall provide technical assistance for eligible businesses which
268includes, but is not limited to:
269     (a)  Access to free or affordable information services and
270consulting services, including information on markets,
271customers, and competitors, such as business databases,
272geographic information systems, and search engine marketing.
273     (b)  Development of business connections, including
274interaction and exchange among business owners and resource
275providers, such as trade associations, think tanks, academic
276institutions, business roundtables, peer-to-peer learning
277sessions, and mentoring programs.
278     (4)(a)  To be eligible for assistance under the pilot
279program, a business must be a for-profit, privately held,
280investment-grade business that employs at least 10 persons but
281not more than 50 persons, has maintained its principal place of
282business in the state for at least the previous 2 years,
283generates at least $1 million but not more than $25 million in
284annual revenue, qualifies for the tax refund program for
285qualified target industry businesses under s. 288.106, and,
286during 3 of the previous 5 years, has increased both its number
287of full-time equivalent employees in this state and its gross
289     (b)  A contracted entity administering the pilot program,
290in selecting the eligible businesses to receive assistance,
291shall choose businesses in more than one industry cluster and,
292to the maximum extent practicable, shall choose businesses that
293are geographically distributed throughout Florida or are in
294partnership with businesses that are geographically distributed
295throughout Florida.
296     (5)(a)  A business receiving assistance under the pilot
297program must enter into an agreement with the contracted entity
298administering the program to establish the business's commitment
299to participation in the pilot program. The agreement must
300require, at a minimum, that the business:
301     1.  Attend a minimum number of meetings between the
302business and the contracted entity administering the pilot
304     2.  Report job creation data in the manner prescribed by
305the contracted entity administering the pilot program.
306     3.  Provide financial data in the manner prescribed by the
307contracted entity administering the program.
308     (b)  The office or the contracted entity administering the
309pilot program may prescribe in the agreement additional
310reporting requirements that are necessary to track the progress
311of the business and monitor the business's implementation of the
312assistance. The contracted entity shall report the information
313to the office on a quarterly basis.
314     (6)  A contracted entity administering the pilot program is
315authorized to promote the general business interests or
316industrial interests of the state.
317     (7)  The office shall review the progress of a contracted
318entity administering the pilot program at least once each 6
319months and shall determine whether the contracted entity is
320meeting its contractual obligations for administering the pilot
321program. The office may terminate and rebid a contract if the
322contracted entity does not meet its contractual obligations.
323     (8)  On December 31 of each year, beginning in 2012 2009,
324the office shall submit a report to the Governor, the President
325of the Senate, and the Speaker of the House of Representatives
326which describes in detail the progress of the pilot program. The
327report must include, at a minimum, the number of businesses
328receiving assistance, the number of full-time equivalent jobs
329created as a result of the assistance, if any, the amount of
330wages paid to employees in the newly created jobs, and the
331locations and types of economic activity undertaken by the
333     (9)  The office may adopt rules under ss. 120.536(1) and
334120.54 to administer this section.
335     Section 3.  The amendments made by this act to s. 288.0181,
336Florida Statutes, shall apply retroactively to loans awarded
337before the effective date of this act.
338     Section 4.  This act shall take effect July 1, 2011.

CODING: Words stricken are deletions; words underlined are additions.