73C-23.0048. Specific Requirements for Economic Development

(1) Funding under the Small Cities CDBG Economic Development category that can be utilized as:

(a) Grant for public minimum infrastructure necessary for job creation or retention;

(b) Low interest loan to an entity that will create or retain jobs; or

(c) Grant to construct local government owned building that will be leased at fair market rent rates to an entity creating or retaining jobs.

(2) Prohibited Uses of Funds.

(a) Funds shall not be used for working capital, inventory or supplies.

(b) Direct assistance to a non-public entity shall not be in the form of a grant.

(c) Funds cannot be used to purchase assets from any entity if any corporate officer(s) or principal(s) of the Participating Party owns an interest in that entity.

(d) Funds cannot be used to build or develop infrastructure beyond that which is required as a prerequisite for the job creation by the Participating Party.

(e) Funds shall not be used to refinance existing debt.

(f) Funds cannot be used for a loan to a non-public entity which is determined not to be appropriate as defined in 24 CFR 570.482(e), as incorporated in rule 73C-23.0031, F.A.C.

(3) Economic Development Activity Outside the Applicant’s Jurisdiction.

(a) The Applicant can undertake activities outside its jurisdiction provided an interlocal agreement exists with the affected jurisdiction(s); and,

1. The activity involves installing new infrastructure or connecting to existing infrastructure that is located outside the Applicant’s jurisdiction and may be owned and operated by the Applicant, or another public or private entity, but the job creation site is located within the Applicant’s jurisdiction,

2. The job creation site is located outside the Applicant’s jurisdiction, but the activity involves connecting to infrastructure owned by the Applicant, or

3. The job creation site is located outside the Applicant’s jurisdiction, but it is located in an Applicant-owned industrial/commercial site.

(b) Liability for CDBG performance and compliance with all applicable rules and regulations rests with the Applicant.

(4) Eligibility Requirements for Loans.

(a) Determining eligibility for loans to non-public entities. All Economic Development applications submitted to the Department shall be screened to determine if the amount of any loan assistance to a private, for-profit entity; a private, non-profit entity; a neighborhood based organization; a local development organization; or other non-profit entities is appropriate to carry out the Economic Development project. A financial underwriting analysis of the project shall be conducted to determine that the minimum amount of assistance is being requested, that the terms and interest rates are appropriate given the entity’s debt service capacity, and that the entity has the ability to meet the proposed debt service, given historical financial statements, as well as data and reasonable projections of revenues and operating expenses, if applicable.

(b) Applications which do not contain justification of the appropriateness of the assistance being requested shall be ineligible in accordance with federal law and federal guidelines found in 24 CFR Part 570, including Appendix A, as incorporated in rule 73C-23.0031, F.A.C., and shall be ineligible for scoring as provided in section 290.0475, F.S.

(c) If the Department’s review of the financial underwriting analysis for the assistance determines that the funds requested exceed the funds necessary, the funding request shall be reduced by the Department.

(d) The local government shall provide a financial underwriting analysis and other Participating Party documentation to the Department that was not required at the time of application. The underwriting analysis must meet the requirements of 24 CFR 570.482(e), and Appendix A of 24 CFR 570, as incorporated in rule 73C-23.0031, F.A.C. The underwriting analysis must be prepared by a certified public accountant, a commercial lending underwriter, a financial professional employed by the local government or a certified economic development finance professional approved by the Department. The underwriter shall not be approved if the State of Florida or the federal government has placed the underwriter on a list that prohibits them from working on state or federal contracts or if the Department determines that a conflict of interest exists.

(5) Loss of Funding Reservation for Economic Development Applications:

An Economic Development application shall lose its funding reservation if:

(a) The Applicant is not eligible pursuant to section 290.046, F.S.

(b) All activites are found to be ineligible. However, if not all activities are found to be ineligible, the funding reservation will be reduced. Only the funding for the eligible activities will be retained.

(c) The application is missing a required item that is specified in the “Documentation Requirements” section of the application.

(d) The local government withdraws the application in a letter signed by the Chief Elected Officer.

(e) The Department does not receive all required documentation and the subgrant signed by the Chief Elected Officer or his or her designee within 60 days of the applying local government’s receipt of the award and offer to contract letter. If the local government submits the required documentation and signed subgrant after the 60-day period has expired, the date that the subgrant and all required documents are received by the Department becomes the new funding reservation date. If the documentation is adequate and unreserved funds are available to fund the application, a subgrant will be executed by the Department.

(f) A Participating Party withdraws prior to the execution of the subgrant by the Department, unless the subgrant remains within the fundable range with the remaining Participating Parties. Increasing the job creation numbers or leverage of the remaining Participating Parties beyond that referenced in the application shall not be allowed. Replacement of Participating Parties shall not be allowed without withdrawal and resubmission of the application.

(6) Partial Funding.

If all activities are not found to be ineligible, funding will be reduced accordingly for the eligible activities.

Rulemaking Authority 290.048 FS. Law Implemented 290.043, 290.044, 290.046, 290.047 FS. History–New 4-21-15, Amended 5-27-18.