This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0685b.ITA
DATE: 2/7/2022
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 685 Rural Development
SPONSOR(S): State Affairs Committee, Drake and others
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) State Affairs Committee 21 Y, 0 N, As CS Darden Williamson
2) Infrastructure & Tourism Appropriations
Subcommittee
12 Y, 0 N Hicks Davis
3) Commerce Committee
SUMMARY ANALYSIS
Florida has enacted a variety of economic grant and loan programs intended to aid the development of rural
and otherwise economically distressed regions of the state, including the Regional Rural Development Grant
Program, the Rural Community Development Revolving Loan Fund, and the Rural Infrastructure Fund. These
programs are administered by the Department of Economic Opportunity (DEO).
The bill reduces the required non-state match amount for the Regional Rural Development Grants Program
from 25 percent to 15 percent and allows in-kind contributions to count toward this threshold.
The bill removes the requirement that repaid funds from the Rural Community Development Revolving Loan
Fund be matched in order to be retained to fund future loans.
Finally, the bill revises the uses of the Rural Infrastructure Fund to remove the requirement that grants be
linked to financing specific projects. It increases the proportion of an infrastructure project that may be covered
by the grant from 50 percent to 75 percent and increases the maximum grant for infrastructure feasibility
studies, design and engineering activities, or other infrastructure planning and preparation activities to
$300,000 for all projects. The bill removes the local match requirement for surveys, feasibility studies, and
other activities related to the identification and preclearance review of land which is suitable for preclearance
review, and removes the requirement that a grant for an employment project create a minimum number of jobs.
The bill does not have a fiscal impact on state government, but may have a positive impact on local
governments. See Fiscal Analysis section for details.
The bill has an effective date of July 1, 2022.
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Rural Areas of Opportunity
A rural area of opportunity (RAO) is a rural community, or region comprised of rural communities,
designated by the Governor, that has been adversely affected by an extraordinary economic event,
severe or chronic distress, or a natural disaster.
1
An area may also be designated as a RAO if it
presents a unique economic development opportunity of regional impact. The designation of a RAO
must be agreed upon by the Department of Economic Opportunity (DEO), as well as the county and
municipal governments to be included in the RAO.
2
Based on recommendations of the Rural Economic Development Initiative (REDI), the Governor may
designate up to three RAOs by executive order.
3
This designation establishes these areas as priority
assignments for REDI as well as allows the Governor, acting through REDI, to waive criteria,
requirements, or similar provisions of any economic development initiative.
Currently, there are three designated RAO areas:
Northwest RAO: Calhoun, Franklin, Gadsden, Gulf, Holmes, Jackson, Liberty, Wakulla, and
Washington counties, and portions of Walton County (the City of Freeport and lands north of the
Choctawhatchee Bay and intercoastal waterway).
South Central RAO: DeSoto, Glades, Hardee, Hendry, Highlands, and Okeechobee counties,
and the cities of Pahokee, Belle Glade, and South Bay in Palm Beach County and the city of
Immokalee in Collier County.
North Central RAO: Baker, Bradford, Columbia, Dixie, Gilchrist, Hamilton, Jefferson, Lafayette,
Levy, Madison, Putnam, Suwannee, Taylor, and Union counties.
4
Regional Rural Development Grants Program
The Regional Rural Development Grants Program is a state matching grant program established to
provide funding to build the professional capacity of regional economic development organizations.
5
Grants may be used by an economic development organization to provide technical assistance to
businesses within the rural counties and communities that it serves.
6
Applications submitted to DEO must provide proof:
Of official commitments of support from each local government represented by the regional
organization;
That each local government has made a financial or in-kind commitment to the regional
organization;
That the private sector has made financial or in-kind commitments to the regional organization;
1
S. 288.0656(2)(d), F.S. A “rural community” is any county with a population of 75,000 or fewer, any county with a population of
125,000 or fewer that is contiguous to a county with a population of 75,000 or fewer, a municipality in a county that meets either of the
aforementioned criteria, or an unincorporated federal enterprise community or an incorporated rural city with a population of 25,000 or
fewer and an employment base focused on traditional agricultural or resource-based industries, located in a county not defined as rural,
which has at least three or more of the economic distress factors. S. 288.0656(2)(e), F.S.
2
S. 288.0656(7)(b), F.S.
3
S. 288.0656(7)(a), F.S.
4
Dept. of Economic Opportunity, Rural Areas of Opportunity, https://floridajobs.org/community-planning-and-development/rural-
community-programs/rural-areas-of-opportunity (last visited Jan. 21, 2022). The economic development organizations for these RAOs
are named Opportunity Florida, Florida’s Heartland Regional Economic Development Initiative, and the North Florida Economic
Development Partnership, respectively.
5
S. 288.018, F.S.
6
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That the regional organization is in existence and actively involved in economic development
activities serving the region; and
The manner in which the regional organization coordinates its efforts with those of other local
and state organizations.
7
An organization may receive up to $50,000 a year or $250,000 if located in a RAO.
8
Grants must be
matched by an amount of non-state resources equal to 25 percent of the state contribution. DEO is
authorized to spend up to $750,000 each fiscal year from funds appropriated to the Rural Community
Development Revolving Loan Fund to carry out this program.
9
Rural Infrastructure Fund
The Rural Infrastructure Fund is a grant program created to facilitate the planning, preparing, and
financing of infrastructure projects in rural communities.
10
The program provides access to federal and
state infrastructure funding programs, including, but not limited to, those offered by the United States
Departments of Agriculture and Commerce.
11
The program funds total infrastructure project grants,
infrastructure feasibility grants, and preclearance review grants.
DEO may award grants for up to 50 percent of the total infrastructure project cost.
12
Projects must be
related to specific job-creation or job-retention opportunities. Additionally, projects may include
improving any inadequate infrastructure that has resulted in regulatory action that prohibits economic or
community growth or reducing the costs to community users of proposed infrastructure improvements
that exceed such costs in comparable communities, and improving the access availability of broadband
Internet service.
Eligible uses of funds include improvements to public infrastructure for industrial or commercial sites,
upgrades to or development of public tourism infrastructure, and improvements to broadband Internet
service and access in unserved or underserved rural communities.
13
Infrastructure can include public or
public-private partnership facilities, like storm water systems, telecommunication, broadband, roads,
and nature-based tourism.
14
The infrastructure feasibility grant provides awards of up to 30 percent of the total project costs for
infrastructure feasibility studies, design and engineering activities, or other infrastructure planning and
preparation activities.
15
Maximum awards are dependent on the number of jobs that a business
commits to create and may be up to $300,000 if the project is located in a RAO. The total project
participation grant may be used in conjunction with the infrastructure feasibility grant.
The preclearance review grant provides awards to help a local government participate in expedited
permitting processes through technical assistance in preparing permit applications and local
comprehensive plan amendments.
16
Grants may be used for surveys, feasibility studies, and other
activities related to the identification and preclearance review of land use modifications. Grants are
limited to $75,000 and must be matched 50 percent with local funds. However, projects in a RAO may
receive up to $300,000 and must be matched 33 percent with local funds.
17
Grant applications are reviewed and certified by DEO in consultation with Enterprise Florida, Inc., VISIT
Florida, the Department of Environmental Protection, and the Florida Fish and Wildlife Conservation
7
S. 288.018(2), F.S.
8
S. 288.018(1)(c), F.S.
9
S. 288.018(4), F.S.
10
See s. 288.0655, F.S.
11
S. 288.0655(2)(b), F.S.
12
Id.
13
Id.
14
Broadband Internet service must be provided in partnership with one or more dealers of communications services. S. 288.0655(2)(b),
F.S.
15
S. 288.0655(2)(c), F.S.
16
S. 288.0655(2)(e), F.S. Expedited permitting is pursuant to s. 403.9739(18), F.S.
17
S. 288.0655(2)(e), F.S. STORAGE NAME: h0685b.ITA PAGE: 4
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Commission.
18
Reviews include an evaluation of the economic benefit of the projects and their long-
term viability.
Rural Community Development Revolving Loan Fund
The Rural Community Development Revolving Loan Fund Program is a state loan program used to
finance initiatives directed toward maintaining and developing the economic base of rural communities,
especially initiatives addressing employment opportunities.
19
The program provides long-term loans,
loan guarantees, and loan loss reserves to local governments, or economic development organizations
substantially underwritten by local governments, in counties with small populations or those located
within a RAO.
20
Loan repayments are generally returned to the loan fund to be made available to other
applicants, but repayments made by an applicant in a RAO may be retained by the applicant if the
repayments are dedicated and matched to fund regionally based economic development organizations
representing the RAO and retention of funds is approved by DEO.
21
Effect of Proposed Changes
Regional Rural Development Grants Program
The bill reduces the required match from non-state resources from 25 percent to 15 percent and allows
for in-kind contributions from all non-state contributors to count toward the match.
Rural Infrastructure Fund
The bill increases the maximum grant award from 50 percent to 75 percent of the total infrastructure
cost and removes the requirement that projects must be linked to specific job-creation or job-retention
opportunities.
The bill increases the maximum grant for infrastructure feasibility studies, design and engineering
activities, or other infrastructure planning and preparation activities to $300,000 for all projects. It
removes the limitation that the grant not exceed 30 percent of the total project cost.
The bill removes the local matching funds requirement for surveys, feasibility studies, and other
activities related to the identification and preclearance review of land which is suitable for preclearance
review. It also removes the requirement that a grant for an employment project create or retain a
minimum number of jobs.
Rural Community Development Revolving Loan Fund
The bill removes the requirement that funds be matched by the local government, or an economic
development organization substantially underwritten by a local government, as long as the funds are
retained for the purpose of funding regionally based economic development organizations representing
the RAO.
B. SECTION DIRECTORY:
Section 1: Amends s. 288.018, F.S., revising eligibility for the Regional Rural Development Grants
Program.
Section 2: Amends s. 288.065, F.S., removing a match requirement from the Rural Community
Development Revolving Loan Fund.
Section 3: Amends s. 288.0655, F.S., revising provisions relating to the Rural Infrastructure Fund.
18
S. 288.0655(3), F.S.
19
S. 288.065(1), F.S.
20
S. 288.065(2)(a), F.S.
21
S. 288.065(2)(c), F.S. STORAGE NAME: h0685b.ITA PAGE: 5
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Section 4: Provides an effective date of July 1, 2022.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
The bill may reduce local government expenditures to the extent that the match requirement has
been reduced or they are no longer required to provide matching funds for certain projects.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Removal of the requirement that the projects must be linked to specific job-creation or job-retention
opportunities may impact the local area labor market.
D. FISCAL COMMENTS:
This bill does not affect state revenues or expenditures. However, the reduction or removal of match
requirements and the increase in allowable grant awards may limit the total number of grants awarded
because the funding levels of these programs remain unchanged.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to require counties or municipalities to spend funds or take
any action requiring the expenditure of funds, reduce the authority that counties or municipalities
have to raise revenue in the aggregate, nor reduce the percentage of state tax shared with counties
or municipalities.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill neither provides authority for nor requires rulemaking by executive branch agencies.
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C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On January 26, 2022, the State Affairs Committee adopted a proposed committee substitute (PCS) and
reported the bill favorably as a committee substitute. The PCS differed from the bill in that it removed:
Revisions to exemptions to the sales and use tax and municipal public service tax that applied to
businesses located in opportunity zones instead of enterprise zones;
An expansion of the applicability of an exemption for electrical energy to include propane and
natural gas;
An increase in the value of the Rural Job Tax Credit and the reduction in the number of additional
employees needed to qualify for the credit;
A revision to a set aside of funds appropriated for the Quick-response Training Program that
changed it from being used on businesses located in an enterprise zone or brownfield area to
businesses located in rural areas of opportunity;
Changes to reporting requirements and the responsibilities of state agencies related to the Rural
Economic Development Initiative;
A requirement that funds from the State Economic Enhancement and Development Trust Fund,
when used for affordable housing, be set aside for projects in rural communities; and
Provisions creating the Florida Microfinance Corporation.
This analysis is drafted to the committee substitute adopted by the State Affairs Committee.