Capitol Report – Economic Development

Government Law & Consulting   |   May 27, 2011

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To keep you informed of legislative changes resulting from the 2011 Florida Regular Legislative Session, Carlton Fields’ Government Law and Consulting practice group is pleased to provide you with our latest legislative summary concerning changes to Florida’s economic development programs and the creation of the Department of Economic Opportunity resulting from Senate Bill 2156 (SB 2156) enacted by the 2011 Florida Legislature.¹ As of this writing, SB 2156 is under review by the Governor and is subject to his veto authority. Therefore, the reader is encouraged to check the ultimate status of SB 2156 by visiting the Legislature’s web site (www.leg.state.fl.us). Please select the “Enrolled” (ER) version of the bill.

ECONOMIC DEVELOPMENT CHANGES IN 2011 SESSION

The chart in the Capitol Report identifies the organization of the State’s economic development agencies as a result of the re-organization authorized in the 2011 session. A common criticism of the Florida economic development programs was how de-centralized they had become into various agencies and public-private partnerships. In this session, the administrative functions and programs were centralized into the newly formed Department of Economic Opportunity (DEO). The DEO will also manage the state’s growth management programs, which were formerly in the Department of Community Affairs (DCA). Below is a summary of the purpose and functions of DEO:

1. DEO Responsibilities: 

• Oversight and coordination of economic development, housing, growth management, community development programs, and unemployment compensation.
• Develop a single, statewide 5-year strategic plan to address the promotion of business formation, expansion, recruitment, and retention in order to create jobs for all regions of the state. The plan must address economic development, marketing and infrastructure development for rural communities. 
• Submit an annual report on the condition of the business climate and economic development in the state, with assistance from Enterprise Florida (EFI) and Workforce Florida (WFI). 
• Manage the activities of the public-private partnerships. 
• Establish annual performance standards for EFI, WFI, VISIT Florida, and Space Florida and report annually on how these performance measures are being met.

2. Streamlined incentive process: 

• Incentives for economic development projects must be approved or denied within 10 days of submitting an application to the department. 
• The release of funds for the incentive or incentives awarded to the applicant depends upon the statutory requirements of the particular incentive program. 
• Quick Action Closing Fund projects require recommendation to the Governor in 7 days. In addition, the Governor can approve projects under $2 million. Projects ranging from $2 million - $5 million require notification to the chairs and vice chairs of the Legislative Budget Commission (LBC). Projects totaling more than $5 million must be approved by the LBC.

3. Business plan required by September 1, 2011, in conjunction with EFI, must outline: 

• Strategies to be used by department and EFI for business recruitment and expansion. 
• Benchmarks related to: business recruitment, business expansion, number of jobs created or retained. 
• Tools, financial and otherwise, needed to achieve benchmarks, and timeframes necessary to achieve standards. 
• By Jan. 1, 2012, the department must make recommendations for any further reorganization and streamlining of economic development and workforce functions.

Enterprise Florida, the public-private partnership and growth management arm of the state, as been re-organized to house all of the various public-private partnerships that had been formed to address tourism marketing, sports and minority businesses. Below is a summary of the purpose and functions of EFI also taken from the SB 2156 Legislative report:

1. Responsibilities of EFI 

• Must enter a performance-based contract with the DEO. 
• Acts as primary economic agency for the state; chief negotiator for business recruitment and business expansion. 
• Increase private investment in Florida. 
• Advance international and domestic trade opportunities. 
• Market the state as a pro-business location for new investment and as a tourist destination. 
• Revitalize Florida’s space and aerospace industries. 
• Promote opportunities for minority-owned businesses. 
• Assist and market professional and amateur sports teams and sporting events. 
• Assist and promote economic opportunities in rural and urban communities.

2. Annual incentive report must include: 

• Description of incentive programs. 
• Amount of awards granted, by year, since inception. 
• Economic benefits including actual amount of private capital invested, actual number of jobs created, actual wages paid for incentive agreements, annual average wage. 
• The number of applications submitted, and the number of projects approved and denied by the department. 
• Federal and local incentives provided. 
• The number of projects that did not fulfill the terms of their agreements and consequently did not receive incentives. Trends related to usage of the various incentives, including the number of
  minority-owned businesses receiving incentives.

Download the pdf to view the complete summary of the changes in economic development programs adopted in the 2011 session.

¹ This report was compiled in substantial part using public records from the Florida Senate.