The revision of this rule chapter will permit DEO to eliminate unnecessary forms, remove unnecessary language already defined by statute and more efficiently administer the Black Business Loan Program while ensuring compliance with the statutory ...

 

DEPARTMENT OF ECONOMIC OPPORTUNITY

Division of Community Development

RULE NOS.:RULE TITLES:

73C-1.001Definitions and Forms

73C-1.002Application Process

73C-1.003Certification Decision

PURPOSE AND EFFECT: The revision of this rule chapter will permit DEO to eliminate unnecessary forms, remove unnecessary language already defined by statute and more efficiently administer the Black Business Loan Program while ensuring compliance with the statutory intent of Section 288.7102, Florida Statutes.

SUMMARY: Definitions for subject matter referenced within Section 288.7102, Florida Statutes but not specifically defined; Program application and certification processes; Removal of unnecessary forms and language already specifically defined by statute.

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.

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: 288.7102(7) FS.

LAW IMPLEMENTED: 288.7094(2), 288.7102, 288.714 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: Stacy Bouie, Division of Community Development, Department of Economic Opportunity, 107 East Madison Street, Tallahassee, Florida 32399-4128, [phone]

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

73C-1.001 Definitions and Forms

73C-1.002 Application Process

73C-1.003 Program Implementation Certification Decision

 

(Substantial rewording of Rule 73C-1.001 follows. See Florida Administrative Code for present text.)

 

73C-1.001 Definitions and Forms.

The terms and phrases defined herein and used throughout Section 288.7102, F.S., and Chapter 73C-1, F.A.C., apply only during the fiscal year in which a Certified Applicant receives an award of funds under the Program.  Terms and phrases not defined by statute or rule shall be construed according to their plain meaning.

(1) “Applicant” means a corporation registered in Florida that seeks certification or recertification to become a Recipient or a New Recipient of funds appropriated by the legislature for the purpose of providing loans, loan guarantees, or investments, in black business enterprises under the Program.

(2) “Application Period” means the annual period during which an Applicant may submit an application to the Department, which is May 1 through June 1 (or the next business day if June 1 is a Saturday, Sunday, or legal holiday) of each year.

(3) “Certified Applicant” means an Applicant that has received notice from the Department certifying that the Applicant is qualified to receive an award of funds under the Program.

(4) “Conflict Statement” means a quarterly written certification by a Recipient’s governing board that no board member, employee, agent, or other person, connected to or affiliated with the Recipient is receiving, or will receive, any type of compensation or remuneration from a black business enterprise that receives funds pursuant to the Program.  

(5) “Department” means the Department of Economic Opportunity, whose address is 107 East Madison Street, Caldwell Building, Tallahassee, Florida 32399-4128.

(6) “Direct Administrative Cost” means a Recipient’s expenses, as authorized and limited by Section 288.7102(8)(c), F.S.,  which are made or incurred by a Recipient, in order to operate its business in compliance with the Program. 

(7) “Direct Investment” means a Recipient’s purchase of stock, common or preferred, voting or nonvoting, in a black business enterprise. 

(8) “Existing Recipient” is an Applicant that was a Recipient during the fiscal year immediately preceding the submittal of its Application for Recertification, Form DEO/CD 7102-2.

(9) “Instance(s) of Material Noncompliance” occur(s) when a financial audit reveals a violation of, or a failure by an Applicant to follow, the compliance requirements of any applicable state or federal law or the Applicant's most recent fiscal year program agreement.  An Instance of Material Noncompliance can occur through an individual violation, through the failure to follow compliance requirements, or can be aggregated with multiple violations or failures to follow compliance requirements.  An audit which reveals or has a finding that is not specifically labeled as an Instance of Material Noncompliance shall be considered to be an Instance of Material Noncompliance if it otherwise meets this definition.

(10) “Material Weakness” occur(s) where a financial audit reveals an area of concern in a Recipient’s internal compliance controls such that the Department determines that there has been, will be, or that a Recipient cannot prevent, an Instance of Material Noncompliance.  A Material Weakness also occurs where a financial audit reveals information, facts, or circumstances, that give rise to a concern regarding the entity’s business practices or financial stability that impairs the ability of the entity to implement the Program.  An audit which reveals or has a finding that is not specifically labeled as a Material Weakness shall be considered to be a Material Weakness if it otherwise meets this definition.

(11) “New Recipient” is an Applicant that was not a Recipient during the fiscal year immediately preceding the submission of its Application for Certification, Form DEO/CD 7102-1.

(12) “Program” means the Black Business Loan Program as established in Sections 288.7094 through 288.714, F.S.

(13) “Recipient” is a Certified Applicant that has entered into an agreement with the Department to receive funds under the Program.

(14) “Program Funds” or “State Funds” are all funds provided by the Department to a Recipient under the Program as well as all Income and Return of Equity generated through the use of those funds. All such funds shall revert back to the Department, and all evidence of an obligation to repay Program Funds including, but not limited to, promissory notes, mortgages, stock certificates, judgments, and liens, shall be assigned to the Department should any of the following occur: expiration or termination of the agreement between the Department and a Recipient, decertification of a Recipient, denial of recertification of an Existing Recipient, or the Program is allowed to sunset or is repealed by the Florida Legislature.

(15) “Reasonable Profit(s)” means the direct administrative costs authorized by Section 288.7102(8)(c), F.S., as well as those moneys collected through origination, closing, and servicing fees, charged by a Recipient and which are consistent with the industry standards for non-governmental lending. Money acquired by a Recipient through the charging of late fees or generated through the use of a collection agency do not fall under this definition. 

(16) “Submit” or “Submitted” means the business date a document is received by the Department during normal business hours. If a document is received after 5:00 p.m. or on a weekend or legal holiday, it shall be deemed submitted on the next business day (a day that is not a Saturday, Sunday or legal holiday).

(17) “Technical support” or “Technical Assistance” as authorized and limited by Sections 288.7102(8)(c), and 288.714, F.S., means any support or assistance provided by a Recipient to a black business enterprise in furtherance of the intent and purpose of the Program. Any support or assistance provided by a Recipient must be specifically related to the Program.  Support or assistance being undertaken on behalf of non-Program business does not qualify under this definition.

(18) “Unobligated Program Funds” are State Funds, as well as all Income from such funds, held by a Recipient, which are not currently obligated by a loan, loan guarantee, or Direct Investment under the Program.

Rulemaking Authority 288.7102(7) FS. Law Implemented 288.7094(2), 288.7102 FS. History–New 9-1-08, Amended 10-10-10, Formerly 27M-3.001, Amended__________.

 

(Substantial rewording of Rule 73C-1.002 follows. See Florida Administrative Code for present text.)

 

73C-1.002 Application Process.

(1) This Chapter applies to any Applicant, as defined in Rule 73C-1.001, F.A.C., that is seeking to receive funds under the Program. An Applicant shall submit an Application for Certification or an Application for Recertification to the Department during the Application Period. The Department will only process complete submissions received, using the appropriate forms, as identified below, which are available from the Department of Economic Opportunity at 107 East Madison Street, Mail Station 160, Caldwell Building, Tallahassee, Florida 32399-4128, or by going to: http://sitefinity.floridajobs.org/business-growth-and-partnerships/for-businesses-and-entrepreneurs/business-resources/minority-owned-business-assistance:

(a) Application for Certification, Florida Department of Economic Opportunity Form DEO/CD 7102-1, http://sitefinity.floridajobs.org/business-growth-and-partnerships/for-businesses-and-entrepreneurs/business-resources/minority-owned-business-assistance; effective date:__________, 2013, which is hereby adopted and incorporated by reference.

(b) Application for Recertification, Florida Department of Economic Opportunity Form DEO/CD 7102-2, http://sitefinity.floridajobs.org/business-growth-and-partnerships/for-businesses-and-entrepreneurs/business-resources/minority-owned-business-assistance; effective date:__________, 2013, which is hereby adopted and incorporated by reference.

(2) An Applicant must submit its application using the application processes as provided in this Chapter. Each application will be evaluated for completeness. No Applicant will receive certification until the Department is able to verify the requirements set forth in Section 288.7102, F.S. Applicants must provide assistance to the Department when verification is necessary. Some examples of Applicant assistance are as follows:

(a) Provide more detailed information or explanation to the Department in writing;

(b) Provide the methods of the calculations used in the application process;

(c) Discuss any concerns the Department may have with a submitted application.

(3) The Department shall process all applications submitted during the Application Period on or before July 31.

(4) If it is determined that an Applicant is ineligible to receive funds under the Program or if an application is found to be incomplete, the Department shall notify the Applicant in writing or via email, and shall identify the specific reasons for its determination or of what is missing from the application.  This notice shall include ineligibility based on a determination that an Instance of Material Noncompliance or a Material Weakness exists. 

(5) An Applicant that receives notice that it is ineligible or that its application is incomplete shall have an opportunity to cure any issue determined to exist, if possible, and shall submit a revised application to the Department no later than 10 business days prior to July 31. If an Applicant fails to submit a revised application within the required time, or if the revised application is incomplete, the Department shall deny the application.

(6) If the Department determines that all required information has been timely submitted by an Applicant, it shall deem the application complete and begin the process of approving or denying the application.  In order for an application to be considered complete by the Department, all sections must be complete when the application, or a revised application pursuant to subsection (5) above, is received by the Department.

(7) When the Department approves an application it shall notify the Applicant either in writing or via email that the Applicant is now a Certified Applicant.  In order to become a Recipient and receive funds under the Program a Certified Applicant shall do all of the following:

(a) Meet all of the requirements set forth in Section 288.7102, F.S.

(b) Provide the Department with a Conflict Statement concerning the use of future funds received under the Program.

(c) Enter into an agreement with the Department.

(8) A Certified Applicant shall submit a signed agreement to the Department within 45 days after its receipt of the agreement. A Certified Applicant’s failure to timely do so will result in a denial of its application. An extension of the 45 day deadline for the return of the agreement may be granted by the Department if good cause is provided by the Certified Applicant.

(9) Where the Department denies an application, it shall notify the Applicant either in writing or via email and shall identify the specific reasons for its denial. The Department’s denial decision shall be subject to review under Chapter 120, F.S.

Rulemaking Authority 288.7102(7) FS. Law Implemented 288.7094(2), 288.7102 FS. History–New 9-1-08, Amended 10-10-10, Formerly 27M-3.002, Amended___________.

 

(Substantial rewording of Rule 73C-1.003 follows. See Florida Administrative Code for present text.)

 

73C-1.003 Program Implementation Certification Decision.

In addition to the requirements set forth in Section 288.7102, F.S., and this Chapter, a Recipient must meet the performance conditions provided for in the agreement it enters into with the Department in order to remain qualified to receive funds under the Program. Any award of funds under the Program is conditioned upon their availability and upon a Certified Applicant’s execution of an agreement with the Department.

(1) Quarterly submission of a Conflict Statement.

(a) In addition to the requirements provided in Section 288.714, F.S., all Recipients receiving funds under the Program shall provide the Department with a Conflict Statement quarterly. The Department may waive a conflict if good cause is shown. 

(b) Falsifying or misrepresenting information or the existence of a conflict within a Conflict Statement may be considered as grounds for the immediate termination of the agreement by the Department and for the decertification of a Recipient. Any previously granted waivers by the Department of a conflict shall not exempt its disclosure in a Conflict Statement.

(2) Unobligated Program Funds shall be maintained by the Recipient in a separate interest bearing account subject to the terms and conditions of the agreement entered into with the Department to carry out the legislative intent and purposes of the Program.

(3) Quarterly Reports. 

(a) In addition to the reporting requirements provided for in Section 288.714, F.S., a Recipient’s quarterly report shall include a detailed summary of the Recipient’s performance duties imposed under the agreement it enters into with the Department.

(b) Based upon a Recipient’s quarterly report, the Department may deny Direct Administrative Costs that do not advance the purpose of the Program. The Department’s denial shall be in writing and is subject to review under Chapter 120, F.S.

(4) Technical Support and Technical Assistance. 

(a) In the quarterly reports provided to the Department, and as further described in Section 288.714, F.S., a Recipient shall describe the nature and amount of all Technical Support and Technical Assistance it has provided during that quarter to black business enterprises.

(b) Based upon a Recipient’s quarterly reporting of funds used as Technical Support and Technical Assistance, the Department may deny funds so expended that do not advance the purpose of the Program. The Department’s denial shall be in writing and is subject to review under Chapter 120, F.S.

(5) Financial Audits.

(a) The Department will evaluate all financial audits received pursuant to Section 288.7102, F.S. in order to determine if an Instance of Material Noncompliance or a Material Weakness is revealed.

(b) If the Department determines that any item submitted by a Recipient reveals an Instance of Material Noncompliance, a Material Weakness, or both, that cannot be cured within a reasonable time, the Department may deny an application or terminate the agreement pursuant to its terms.

(c) An Existing Recipient shall not employ the same independent certified public accountant or accounting firm for more than three consecutive years to prepare its annual financial audit. A Recipient’s failure to change its independent certified public accountant or accounting firm shall result in the Department denying the Existing Recipient’s Application for Recertification.

Rulemaking Authority 288.7102(7) FS. Law Implemented 288.7094(2), 288.714, 288.7102 FS. History–New 9-1-08, Amended 10-10-10, Formerly 27M-3.003, Amended___________.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Stacy Bouie, Division of Community Development

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Jesse Panuccio

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: March 5, 2014

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: June 19, 2013