Title: Assistance for Microbusinesses

Summary: Authorizes certain local governments to set aside specified percentage of funds for procuring personal property & services to enter into contracts with microbusinesses; requires such contracts to be competitively solicited only among microbusinesses; provides eligibility for microbusinesses under Microfinance Loan Program; revises date by which DEO must contract with certain entities to administer loan program; provides eligibility for microbusinesses under Microfinance Guarantee Program; provides eligibility for microbusinesses under DOT's highway project business development program; provides eligibility for microbusinesses under WMD programs.

Full Text:
An act relating to assistance for microbusinesses; creating s. 287.085, F.S.; defining the term "microbusiness"; authorizing certain local governments to set aside up to a specified percentage of funds for procuring personal property and services for the purpose of entering into contracts with microbusinesses; requiring that such contracts be competitively solicited only among microbusinesses; amending s. 288.9931, F.S.; revising legislative findings and intent; amending s. 288.9932, F.S.; redefining the te rms "applicant" and "entrepreneur"; defining the term "microbusiness"; amending s. 288.9934, F.S.; providing eligibility for microbusinesses under the Microfinance Loan Program; revising the date by which the Department of Economic Opportunity must contrac twith a certain entity or entities to administer the loan program; deleting obsolete provisions; amending s. 288.9935, F.S.; providing eligibility for microbusinesses under the Microfinance Guarantee Program; amending s. 288.9936, F.S.; conforming a provi sion to changes made by the act; amending s. 337.027, F.S.; providing eligibility for microbusinesses under the Department of Transportation's highway project business development HB 1425 2020 program; defining the term "microbusiness"; amending s. 373.1135, F.S.; prov iding eligibility for microbusinesses under water management district programs designed to help small businesses participate in district procurement and contract activities; defining the term "microbusiness"; providing an effective date. Be It Enacted by the Legislature of the State of Florida: Section 1. Section 287.085, Florida Statutes, is created to read: 287.085 Microbusinesses; set-aside of funds for procurement of personal property and services.-(1) As used in this section, the term "m icrobusiness" means an independently owned and operated for-profit business entity, including any affiliates, located in this state and which has seven or fewer full-time employees or full-time equivalent employees. (2) Any county, municipality, communit ycollege, or district school board may set aside up to XX percent or more of the total amount of funds allocated for the procurement of personal property and services for the purpose of entering into contracts with microbusinesses. Such contracts must be competitively solicited only among microbusinesses. HB 1425 2020 Section 2. Section 288.9931, Florida Statutes, is amended to read: 288.9931 Legislative findings and intent.-The Legislature finds that the ability of entrepreneurs,microbusinesses, and small busin esses to access capital is vital to the overall health and growth of this state's economy; however, access to capital is limited by the lack of available credit for entrepreneurs,microbusinesses, and small businesses in this state. The Legislature further finds that entrepreneurs,microbusinesses, and small businesses could be assisted through the creation of a program that will provide an avenue for entrepreneurs,microbusinesses, and small businesses in this state to access credit. Additionally, the Legi slature finds that business management training, business development training, and technical assistance are necessary to ensure that entrepreneurs,microbusinesses, and small businesses that receive credit develop the skills necessary to grow and achieve long-term financial stability. The Legislature intends to expand job opportunities for this state's workforce by expanding access to credit to entrepreneurs,microbusinesses, and small businesses. Furthermore, the Legislature intends to avoid duplicating existing programs and to coordinate, assist, augment, and improve access to those programs for entrepreneurs,microbusinesses, and small businesses in this state. Section 3. Subsections (4) and (5) of section 288.9932, HB 1425 2020 Florida Statutes, are renumbered a ssubsections (5) and (6), respectively, a new subsection (4) is added to that section, and subsections (1) and (3) of that section are amended, to read: 288.9932 Definitions.-As used in this part, the term: (1) "Applicant" means an entrepreneur,a microbusiness, or a small business that applies to a loan administrator for a microloan. (3) "Entrepreneur" means an individual residing in this state who desires to assume the risk of organizing, managing, and operating a microbusiness or a small business in this state. (4) "Microbusiness" has the same meaning as provided in s. 287.085. Section 4. Subsections (1) and (3), paragraphs (b), (c), (e), and (f) of subsection (4), paragraph (a) of subsection (9), and subsections (10) and (11) of section 288. 9934, Florida Statutes, are amended to read: 288.9934 Microfinance Loan Program.-(1) PURPOSE.-The Microfinance Loan Program is established in the department to make short-term, fixed-rate microloans in conjunction with business management training, business development training, and technical assistance to entrepreneurs and newly esta blished or growing microbusinesses and small businesses for startup costs, working capital, and the acquisition of materials, supplies, furniture, fixtures, and equipment. Participation in the loan program is intended to HB 1425 2020 enable entrepreneurs,microbusiness es, and small businesses to access private financing upon completing the loan program. (3) REQUEST FOR PROPOSAL.-(a) By December 1, 2020 2014, the department shall contract with at least one but not more than three entities to administer the loan prog ram for a term of years. The department shall award the contract in accordance with the request for proposal requirements in s. 287.057 to an entity that: 1. Is a corporation registered in this state; 2. Does not offer checking accounts or savings ac counts; 3. Demonstrates that its board of directors and managers are experienced in microlending and small business finance and development; 4. Demonstrates that it has the technical skills and sufficient resources and expertise to: a. Analyze and ev aluate applications by entrepreneurs,microbusinesses, and small businesses applying for microloans; b. Underwrite and service microloans provided pursuant to this part; and c. Coordinate the provision of such business management training, business dev elopment training, and technical assistance as required by this part; 5. Demonstrates that it has established viable, existing partnerships with public and private nonstate funding sources, HB 1425 2020 economic development agencies, and workforce development and job referral networks; and 6. Demonstrates that it has a plan that includes proposed microlending activities under the loan program, including, but not limited to, the types of entrepreneurs and businesses to be assisted and the size and range of loans the loan administrator intends to make. (b) To ensure that prospective loan administrators meet the requirements of subparagraphs (a)2.-6., the request for proposal must require submission of the following information: 1. A description of the types of entr epreneurs,microbusinesses, and small businesses the loan administrator has assisted in the past, and the average size and terms of loans made in the past to such entities; 2. A description of the experience of members of the board of directors and manag ers in the areas of microlending and small business finance and development; 3. A description of the loan administrator's underwriting and credit policies and procedures, credit decisionmaking process, monitoring policies and procedures, and collection practices, and samples of any currently used loan documentation; 4. A description of the nonstate funding sources that will be used by the loan administrator in conjunction with the state funds to make microloans pursuant to this section; 5. The loan ad ministrator's three most recent financial HB 1425 2020 audits or, if no prior audits have been completed, the loan administrator's three most recent unaudited financial statements; and 6. A conflict of interest statement from the loan administrator's board of directo rs certifying that a board member, employee, or agent, or an immediate family member thereof, or any other person connected to or affiliated with the loan administrator, is not receiving or will not receive any type of compensation or remuneration from an entrepreneur,a microbusiness, or a small business that has received or will receive funds from the loan program. The department may waive this requirement for good cause shown. As used in this subparagraph, the term "immediate family" means a parent, chil d, or spouse, or any other relative by blood, marriage, or adoption, of a board member, employee, or agent of the loan administrator. (4) CONTRACT AND AWARD OF FUNDS.-(b) State funds may be used only to provide direct microloans to entrepreneurs,microbusinesses, and small businesses according to the limitations, terms, and conditions provided in this part. Except as provided in subsection (5), state funds may not be used to pay administrative costs, underwriting costs, servicing costs, or any other co sts associated with providing microloans, business management training, business development training, or technical HB 1425 2020 assistance. (c) The loan administrator shall reserve percent of the total award amount from the department to provide microloans pursuant to this part to entrepreneurs,microbusinesses, and small businesses that employ no more than five people and generate annual gross revenues averaging no more than $250,000 per year for the last years. (e) Within days of executing its contract wi th the department, the loan administrator must enter into a memorandum of understanding with the network: 1. For the provision of business management training, business development training, and technical assistance to entrepreneurs,microbusinesses, and small businesses that receive microloans under this part; and 2. To promote the program to underserved entrepreneurs,microbusinesses, and small businesses. (f) By September 1, 2014, the department shall review industry best practices and determine th eminimum business management training, business development training, and technical assistance that must be provided by the network to achieve the goals of this part. (9) ELIGIBILITY AND APPLICATION.-(a) To be eligible for a microloan, an applicant must, at a minimum, be an entrepreneur,a microbusiness, or a small business located in this state. HB 1425 2020 (10) STATEWIDE STRATEGIC PLAN.-In implementing this section, the department shall be guided by the-year statewide strategic plan adopted pursuant to s. 20.60(5). The department shall promote and advertise the loan program by, among other things, cooperating with government, nonprofit, and private industry to organize, host, or participate in seminars and other forums for entrepreneurs,microbusinesses, and small businesses. (11) STUDY.-By December 31, 2014, the department shall commence or commission a study to identify methods and best practices that will increase access to credit to entrepreneurs and small businesses in this state. The study must also explore the ability of, and limitations on, Florida nonprofit organizations and private financial institutions to expand access to credit to entrepreneurs and small businesses in this state. Section 5. Subsections (1), (3), (7), and (8) of section 288.9935, Florida Statutes, are amended to read: 288.9935 Microfinance Guarantee Program.-(1) The Microfinance Guarantee Program is established in the department. The purpose of the program is to stimulate access to credit for entrepreneurs,microbusiness es, and small businesses in this state by providing targeted guarantees to loans made to such entrepreneurs,microbusinesses, and small businesses. Funds appropriated to the program must be reinvested and maintained as a long-term and stable source of fund ing for HB 1425 2020 the program. (3) The department must enter into a contract with Enterprise Florida, Inc., to administer the Microfinance Guarantee Program. In administering the program, Enterprise Florida, Inc., must, at a minimum: (a) Establish lender and bor rower eligibility requirements in addition to those provided in this section; (b) Determine a reasonable leverage ratio of loan amounts guaranteed to state funds; however, the leverage ratio may not exceed to 1; (c) Establish reasonable fees and inte rest; (d) Promote the program to financial institutions that provide loans to entrepreneurs,microbusinesses, and small businesses in order to maximize the number of lenders throughout the state which participate in the program; (e) Enter into a memora ndum of understanding with the network to promote the program to underserved entrepreneurs,microbusinesses, and small businesses; (f) Establish limits on the total amount of loan guarantees a single lender can receive; (g) Establish an average loan gu arantee amount for loans guaranteed under this section; (h) Establish a risk-sharing strategy to be employed in the event of a loan failure; and (i) Establish financial performance measures and HB 1425 2020 objectives for the program in order to maximize the state funds. (7) To be eligible to receive a loan guarantee under the Microfinance Guarantee Program, a borrower must, at a minimum: (a) Be an entrepreneur,a microbusiness, or a small business located in this state; (b) Employ or fewer people; (c) Generate average annual gross revenues of $1.5 million or less per year for the last years; and (d) Meet any additional requirements established by Enterprise Florida, Inc. (8) By October of each year, Enterprise Florida, Inc., shall submit a compl ete and detailed annual report to the department for inclusion in the department's report required under s. 20.60(10). The report must, at a minimum, provide: (a) A comprehensive description of the program, including an evaluation of its application and guarantee activities, recommendations for change, and identification of any other state programs that overlap with the program; (b) An assessment of the current availability of and access to credit for entrepreneurs,microbusinesses, and small businesses in this state; (c) A summary of the financial and employment results of the entrepreneurs,microbusinesses, and small businesses receiving loan guarantees, including the number of full-time equivalent jobs created as a result of the guaranteed loans and HB 1425 2020 the amount of wages paid to employees in the newly created jobs; (d) Industry data about the borrowers, including the six digit North American Industry Classification System (NAICS) code; (e) The name and location of lenders that receive loan guarante es; (f) The amount of state funds received by Enterprise Florida, Inc.; (g) The number of loan guarantee applications received; (h) The number, duration, location, and amount of guarantees made; (i) The number and amount of guaranteed loans outstanding, if any; (j) The number and amount of guaranteed loans with payments overdue, if any; (k) The number and amount of guaranteed loans in default, if any; (l) The repayment history of the guaranteed loans made; and (m) An evaluation of the program's ability to meet the financial performance measures and objectives specified in subsection (3). Section 6. Subsection (1) of section 288.9936, Florida Statutes, is amended to read: 288.9936 Annual report of the Microfinance Loan Program.- HB 1425 2020 (1) The department shall include in the report required by s. 20.60(10) a complete and detailed annual report on the Microfinance Loan Program. The report must include: (a) A comprehensive description of the program, including an evaluation of its appli cation and funding activities, recommendations for change, and identification of any other state programs that overlap with the program; (b) The financial institutions and the public and private organizations and individuals participating in the program; (c) An assessment of the current availability of and access to credit for entrepreneurs,microbusinesses, and small businesses in this state; (d) A summary of the financial and employment results of the entities receiving microloans; (e) The number of full-time equivalent jobs created as a result of the microloans and the amount of wages paid to employees in the newly created jobs; (f) The number and location of prospective loan administrators that responded to the department request for proposals; (g) The amount of state funds received by the loan administrator; (h) The number of microloan applications received by the loan administrator; (i) The number, duration, and location of microloans made HB 1425 2020 by the loan administrator, including the aggrega te number of microloans made to minority business enterprises if available; (j) The number and amount of microloans outstanding, if any; (k) The number and amount of microloans with payments overdue, if any; (l) The number and amount of microloans in default, if any; (m) The repayment history of the microloans made; (n) The repayment history and performance of funding awards; (o) An evaluation of the program's ability to meet the financial performance measures and objectives specified in s. 288.9934; and (p) A description and evaluation of the technical assistance and business management and development training provided by the network pursuant to its memorandum of understanding with the loan administrator. Section 7. Present subsection (3) of section 337.027, Florida Statutes, is redesignated as subsection (4), a new subsection (3) is added to that section, and subsection (1) of that section is amended, to read: 337.027 Authority to implement a business development program.-(1) The dep artment may establish a program for highway HB 1425 2020 projects which would assist small businesses and microbusinesses.The purpose of this program is to increase competition, lower prices, and provide increased support to meet the department's future work program. The program may include, but is not limited to, setting aside contracts, providing preference points for the use of small businesses and microbusinesses,providing special assistance in bidding and contract completion, waiving bond requirements, and implem enting other strategies that would increase competition. (3) As used in this section, the term "microbusiness" has the same meaning as provided in s. 287.085. Section 8. Section 373.1135, Florida Statutes, is amended to read: 373.1135 Small business and microbusiness program.-Each water management district, as created in this chapter, may implement a small business and microbusiness program designed to help small businesses and microbusinesses,including those owned by women and minor ities, to participate in district procurement and contract activities. The purpose of the program is to spur economic development and support small businesses and microbusinesses,including women-owned and minority-owned businesses, to successfully expand in the marketplace. Program specifics shall be provided by rule pursuant to s. 373.113. As used in this section, the term "microbusiness" has the same meaning as provided in s. 287.085. HB 1425 2020 Section 9. This act shall take effect July 1, 2020.