Fla. Admin. Code Ann. R. 69I-3.004 - Deferred Payment Commodity Contracting

(1) For the purposes of this rule, the following definitions shall be used:

(a) "Agency", for purposes of this rule, means each department, agency, board and commission in the executive branch, and the judicial branch of Florida government. The legislative branch of Florida government is expressly exempt from this rule, pursuant to section 287.063(3), F.S.

(b) "Chief Financial Officer" means the the head of the Department of Financial Services, whose deferred payment commodity contracting duties are carried out by and through its Division of Accounting and Auditing. However, the Chief Financial Officer's duty to execute the master equipment financing agreements is not delegated to the Division.

(c) "Financing Agreement" means the proposed financing agreement associated with deferred payment purchases for which exemption from using the Consolidated Equipment Financing Program is sought.

(d) "Program" means the Consolidated Equipment Financing Program, which shall consist of the program of financing the deferred payment purchases of equipment on behalf of the State or State Agencies pursuant to section 287.064, F.S.

(2) An Agency that desires to make deferred payment purchases not using the Consolidated Equipment Financing Program shall make a written request for exemption from the Program and seek approval to obtain financing pursuant to section 287.063, F.S.

(a) An Agency requesting exemption from the Program must submit to the Chief Financial Officer for preaudit review and approval the following:

1. A draft of the Financing Agreement for which an exemption from the program is sought.

2. A statement documenting whether the equipment is new or used and, if the equipment is used, whether the equipment is currently financed under an installment purchase contract approved by the Chief Financial Officer, including the date of approval by the Chief Financial Officer and the assigned Chief Financial Officer approval number.

3. A statement documenting the proposed original term and renewal terms under the proposed Financing Agreement and the anticipated remaining useful economic life of the equipment.

4. A statement documenting that the payment term in the proposed Financing Agreement does not exceed the useful life of the equipment or that the contract provides for the replacement or the extension of the useful life of the equipment during the term of the loan.

5. Documentation, including the amortization table for the proposed Financing Agreement, to substantiate that the interest rate of the Financing Agreement is lower than the interest rate offered by the Program and does not exceed the statutory ceiling contained in section 287.063(1)(b), F.S.

6. If the equipment purchase price is beyond 5 years, documentation as authorized by section 287.063(2)(b), F.S., to substantiate that the failure to make such deferred payment purchase would adversely affect the Agency in performance of its duties.

7. Documentation to substantiate that the annualized amounts of any Financing Agreement are supported from available recurring funds available to make the payments under the proposed Financing Agreement as they become due, appropriated to the Agency in an appropriation category as defined in sections 287.063(5) and 287.064(11), F.S., or documentation that the Legislature has designated for payment of the obligation incurred under section 287.063, F.S.

8. Documentation to substantiate that the Agency has complied with all applicable requirements to lawfully procure the equipment.

9. Unless waived by a formal Comptroller/Chief Financial Officer Memorandum, documentation to substantiate that the purchase by deferred payment is economically beneficial to the State or that failure to make the purchase will adversely affect the Agency's performance of its duties.

10. Documentation to substantiate type or category of equipment, condition of the equipment, the period of intended use and purpose of the equipment.

(b) An Agency financing the acquisition of equipment shall provide the information required in paragraph (2)(a), at least twenty-one days prior to the anticipated date of awarding the contract for such equipment.

(c) An Agency shall provide documentation to substantiate that the contract for equipment, the payment of which is anticipated to be made by deferred payment and the payment of interest, specifies that the award of such contract is contingent upon approval pursuant to section 287.063, F.S.

(3) The Chief Financial Officer is authorized to determine that alternative financing would be cost-effective or otherwise beneficial to the state pursuant to section 287.064(2), F.S., and thus exempt any equipment from financing under the Program. The factors to be examined by the Chief Financial Officer to determine whether the equipment may be deemed exempt from the Program shall include the following:

(a) The nature of the equipment in accordance with section 287.063(1)(a), F.S.;

(b) The useful life of the equipment in accordance with sections 287.063(2)(b), and (3), F.S., which shall include a determination of the following:

1. The type or category of equipment;

2. Whether the equipment is new or used;

3. The condition of the equipment;

4. The period of intended use; and,

5. Purpose of the equipment;

(c) The length of the proposed original term and renewal terms of the proposed Financing Agreement in accordance with sections 287.063(2)(b), and (3), F.S.;

(d) Availability of funds under the Program in accordance with section 287.063(5), F.S.;

(e) Impact on the federal tax exemption of the interest portion of the consolidated rent payments under the proposed alternative financing in accordance with 26 CFR 1.103-1; and,

(f) The alternative financing costs.

(4) The Chief Financial Officer shall calculate and determine compliance with any interest rate limitations applicable to the Financing Agreement that is determined to be exempt from the Program. For the purpose of determining compliance with interest rate limitations on any proposed Financing Agreement, interest rates shall not include administrative costs, surcharges and insurance expense related to the financing, which is determined to be exempt from the Program in accordance with sections 287.063(1)(b) and 287.063(2)(b)1., F.S.

Notes

Fla. Admin. Code Ann. R. 69I-3.004

Rulemaking Authority 17.29, 287.063(2)(b) FS. Law Implemented 287.063, 287.064 FS.

New 5-4-10.

New 5-4-10.