The purpose of this amendment is to revise terms in the rule relative to the "Trust Agreement," since the agreement is now an "Endowment Agreement." The amendment also assigns numbers to the following forms; 1) Notice of Investment Requirements and ...

 

DEPARTMENT OF STATE

Division of Cultural Affairs

RULE NO.:RULE TITLE:

1T-1.001Division of Cultural Affairs

PURPOSE AND EFFECT: The purpose of this amendment is to revise terms in the rule relative to the "Trust Agreement," since the agreement is now an "Endowment Agreement." The amendment also assigns numbers to the following forms; 1) Notice of Investment Requirements and 2) Investment Plan.

SUMMARY: This amendment revises the Cultural Endowment Program award agreement, definitions, audit language, reporting requirements, and grant administration.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: The amendment will not have a direct or indirect adverse financial impact on small businesses.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 265.284(5)(d), 265.285(1)(c), 265.286(1), 265.701(4) FS.

LAW IMPLEMENTED: 215.97, 265.284, 265.285, 265.286, 265.701, 286.011, 286.012, 286.25 FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE SCHEDULED AND ANNOUNCED IN THE FAR.

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Carlos A. Rey, Florida Department of State, 500 South Bronough St., Tallahassee, FL 32399, [phone].

 

THE FULL TEXT OF THE PROPOSED RULE IS:

1T-1.001 Division of Cultural Affairs.

(1) Florida Council on Arts and Culture.

(a) Membership and duties of the Florida Council on Arts and Culture (Council) shall be in accordance with Section 265.285, F.S.

(b) Officers. The Chairperson, Vice Chairperson, and Secretary of the Council shall be elected annually by the Council membership and may be re-elected for subsequent terms. In the event of the resignation or term-expiration of an officer, interim elections may be held.

(c) The Chairperson has the authority to appoint standing and ad hoc committees of the Council, as well as appoint task forces made up of members of the Council and the general public. Standing and ad hoc committees, or task forces may report any recommendations to the Council at the next scheduled Council meeting. Recommendations shall be final upon approval by the Council, unless rejected by the Secretary of State.

(d) The Council shall meet in accordance with Section 265.285(1)(b), F.S. Notice shall be provided and meetings shall be conducted in accordance with Section 120.525, F.S.

(2) Cultural Endowment Program. The purpose of this program is to create an endowment matching funds program that will provide operating resources to participating cultural organizations. All endowment applicants must meet the requirements setforth in the program guidelines http://dos.florida-arts.org/grants/guidelines/endowment.guidelines.cfm , effective XX/XX, which are available from the Division at http://dos.myflorida.com/cultural/grants/grant-programs/cultural-endowment/ www.Florida-arts.org and are hereby incorporated by reference. There are two components to the program, application for Cultural Sponsoring Organization Designation and State Matching Share application, receipt, and management.

(a) Cultural Sponsoring Organization Designation.

1. Administrative and Legal Eligibility. The applicant must:

a. Be a qualified corporation as defined in Section 265.603(5), F.S.

b. Have satisfied the administrative requirements of previous grants received from the Division.

2. Program Eligibility. An eligible application shall consist of the following documents and information:

a. A completed and signed Cultural Endowment Application Form (CA2E037, eff.8/02), incorporated by reference and available from the Division.

b. A letter from the chairman of the board or president of the sponsoring organization formally requesting designation as a Cultural Sponsoring Organization.

c. A copy of the organization’s determination letter from the Internal Revenue Service confirming tax exempt status, pursuant to section 501(c)(3) or (4) of the Internal Revenue Code of 1954.

d. A copy of documentation of eligibility to receive contributions pursuant to the provisions of Section 170 of the Internal Revenue Code of 1954.

e. The description and documentation of a program that qualifies the organization as a sponsoring organization. The description and documentation shall include printed performance or printed exhibition material such as brochures, programs, or catalogues.

3. The Division shall submit the names of all eligible applicants to the Florida Arts Council for review and recommendation.

4. The Florida Arts Council shall review the names of the eligible applicants and submit the recommendations to the Secretary of State.

5. The Secretary of State shall review the recommendations of the Florida Arts Council and designate the eligible applicants as Cultural Sponsoring Organizations.

6. The Division shall notify each applicant in writing of the Secretary of State’s designation.

(b) State Matching Share.

1. Administrative and Legal Eligibility for receipt of a State Matching Share. The applicant for a State Matching Share must:

a. Satisfy the requirements for Cultural Sponsoring Organization Designation in paragraph (2)(a) above, and

b. Have not been awarded a State Matching Share within the 23-month period preceding this application. The 23-month period commences on the day following the date the previous State Matching Share was awarded. For the purposes of this program, a State Matching Share is considered to have been awarded as of July 1 of the fiscal year for which the Florida Legislature appropriates sufficient funds for the Department to enter into a Trust Agreement with an eligible organization.

2. Program Eligibility. An eligible application shall consist of the following documents and information:

a. A completed and signed Cultural Endowment Application Form (CA2E037, eff. 8/02), incorporated by reference and available from the Division, and submitted on or before the annual June 1 deadline.

b. A list of the applicant’s current board members, including each member’s full name, occupation, address, phone number, and position held with the applicant organization.

c. A copy of the organization’s independent certified audit for the last completed fiscal year.

d. Documentation establishing that the organization has deposited, prior to the application deadline, new contributions having a market value of at least $360,000 for each individual endowment.

e. Documentation of Cultural Sponsoring Organization designation or an application for designation.

f. A statement from the chairman of the board or president of the applicant certifying that all documentation is true and correct, and that the Department shall have access to the applicant’s records for endowment program purposes.

3. Funding Request. The Division shall not accept two or more applications for a $240,000 State Matching Share from the same organization under a single application deadline.

4. Matching Funds.

a. At the time of application, eligible applicants shall have on deposit in an applicant-owned cultural endowment program fund new contributions of at least $360,000 cash, or cash equivalents with a market value of at least $360,000.

b. Before the State Matching Share is transferred to the Cultural Sponsoring Organization, the Organization must provide documentation to the Division that the Organization has made prudent arrangements for the trusteeship of the entire endowment.

5. Compliance Date. The Compliance Date is the latest date of the following dates:

a. The date the applicant was designated a Cultural Sponsoring Organization; or

b. The date the applicant deposited new contributions having a total capital or assessed value of at least $360,000 into the organization’s cultural endowment program fund.

6. Priority List. The Division shall submit to the Secretary of State a list of all eligible Cultural Sponsoring Organizations in the order of their compliance date for each application deadline with the earliest date first. In the event that two or more Cultural Sponsoring Organizations have the same compliance date, the organizations will be ranked on the Priority List in the order of earliest-to-latest match deposit date. Once a State Matching Share is awarded by the Legislature, the organization is removed from the list.

7. Reporting Requirements. Each and every year, the Cultural Sponsoring Organization shall submit an annual report to the Division within 45 days after the expiration of the organization’s fiscal year. The report shall detail:

a. How endowment fund interest was used.

b. The benefits of the endowment program to the organization.

c. How the $600,000 endowment corpus is invested.

8. Audit.

a. An annual audit of the organization’s financial accounts shall be conducted by an independent certified public accountant and submitted to the auditor general and the Division for review within nine months after the expiration of the organization’s fiscal year.

b. The audit must specifically recognize the $600,000 endowment corpus (State Matching Share: $240,000 and local match: $360,000) as an asset of the Cultural Sponsoring Organization.

9. Priority List Retention. If sufficient funds are not appropriated by the Legislature for distribution to the Cultural Sponsoring Organization, the Department shall maintain the organization on the Priority List for the subsequent release of one State Matching Share to the organization, pending appropriation. It is the obligation of the organization to maintain eligibility for a State Matching Share while on the Priority List. If the organization chooses to expend part or all of the $360,000 match, the organization will be removed from the Priority List and the organization will be required to submit a new application.

10. Each organization shall enter into a trust agreement (CA2E039, eff. 8/02), incorporated by reference and available from the Division, with the State of Florida for the management of the endowment fund. The trust agreement shall include:

a. An investment plan as detailed in subparagraph (2)(b)11. below.

b. Other provisions as agreed to by both the organization and the state.

11. Investment Plan. Each organization shall submit an investment plan that shall direct the Trustee to preserve the principal amount of each endowment while maximizing current income through the use of investment-quality financial instruments. For the purposes of this program:

a. Investment quality means instruments rated in one of the four highest classifications as established by a nationally recognized rating service.

b. Financial instruments means bonds, notes, or other obligations of the United States or those guaranteed by the United States or for which the credit of the United States is pledged for the payment of the principal and interest or dividends thereof; state bonds pledging the full faith and credit of the State of Florida and revenue bonds additionally secured by the full faith and credit of the state; bonds of the several counties or districts in the State of Florida containing a pledge of the full faith and credit of the county or district involved; savings accounts in, or certificates of deposit of, any bank, savings bank, or savings and loan association incorporated under the laws of this state or organized under the laws of the United States doing business and situated in this state, the accounts of which are insured by the Federal Government or an agency thereof; commercial paper of prime quality of the highest letter and numerical rating as provided for by at least one nationally recognized rating service; common stock, preferred stock, and interest-bearing obligations of a corporation having an option to convert into common stock provided the corporation is organized under the laws of the United States, any state or organized territory of the United States, or the District of Columbia; or the corporation is listed on any one or more of the recognized national stock exchanges in the United States and conforms with the periodic reporting requirements under the Securities Exchange Act of 1934.

12. For Cultural Sponsoring Organizations that use the services of an investment manager or other fiduciary entity for the investment of any portion of the endowment corpus, the Cultural Sponsoring Organization must maintain ownership of the assets and have the authority to break the investment services agreement.

(3) The following forms must be used in the administration of the Cultural Endowment Program and are hereby incorporated by reference and available at http://dos.myflorida.com/cultural/grants/grant-programs/cultural-endowment/ www.Florida-arts.org:

(a) Cultural Endowment Application Form (CA2E037, (hyperlink), eff. XX/XX) and available at http://dos.myflorida.com/media/31122/cepapplformca2e037.pdf.

(b) The Cultural Endowment Agreement (CA2E039, (hyperlink) eff. XX/XX).

(c) Annual Report Form (CA2E100 (hyperlink) eff. XX/XX).

Rulemaking Authority 265.605(1), 265.608(1), 265.609(1), (4), 265.701(5) FS. Law Implemented 265.285, 265.601-.603, 265.605-.606, 265.701 FS. History–New 11-23-82, Formerly 1T-1.01, Amended 10-1-96, 10-31-96, 2-2-97, 6-2-97, 7-17-97, 9-10-97, 1-4-98, 7-26-98, 8-2-98, 10-5-98, 10-25-98, 8-17-99, 8-1-02, 12-29-02, 10-14-03(17), 10-14-03(20), 11-16-03, 2-2-05, 5-16-05, 6-21-05, 12-20-05, 5-22-06, 6-5-06, 6-27-06, 8-20-07, 9-16-07, 1-8-08, 7-8-08, 9-8-08, 3-5-09, 6-17-09, 10-27-09, 7-13-10, XX-XX-XX.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Carlos A. Rey

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Ken Detzner

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: April 09, 2015

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: August 7, 2014