HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 413 Financial Assistance for Rural Communities
SPONSOR(S): Local Administration, Federal Affairs & Special Districts Subcommittee, Abbott
TIED BILLS: IDEN./SIM. BILLS: SB 1628
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Local Administration, Federal Affairs & Special 17 Y, 0 N, As CS Roy Darden
Districts Subcommittee
2) Appropriations Committee
3) State Affairs Committee
SUMMARY ANALYSIS
The Rural Economic Development Initiative (REDI) is a program created within the Department of Economic
Opportunity responsible for coordinating and focusing the efforts and resources of state and regional agencies
on the problems which affect the fiscal, economic, and community viability of Florida's economically distressed
rural communities, working with local governments, community-based organizations, and private organizations
that have an interest in the growth and development of these communities to find ways to balance
environmental and growth management issues with local needs.
A rural area of opportunity is a rural community, or a region composed of rural communities, designated by the
Governor, which has been adversely affected by an extraordinary economic event, sever or chronic distress, or
a natural disaster or that presents a unique economic development opportunity of regional impact.
The U.S. Department of Housing and Urban Development (HUD) provides federal grants to states and local
governments that are disaster impacted. Community Development Block Grant Disaster Recovery (CDBG-DR)
Program provide grants to help cities, counties, and states recover from certain disasters declared by the
President of the United States, subject to congressional funds appropriation. CDBG grantees may be required
to incur costs prior to the effective date of the grant agreement in order to secure the grant award. The grantee
may be reimbursed for these costs with the grant award.
The bill requires that an agency agreement to provide state or federal financial assistance to a rural community
or a rural area of opportunity, include a provision that allows the agency to provide for the payment of invoices
to the county or municipality for verified and eligible performance that has been completed in accordance with
the terms and conditions set forth in the agreement.
The provision is meant to alleviate the financial hardships that certain rural counties and municipalities
encounter when administering agreements and must be utilized by the agency based on demonstrated
financial hardship and may not be construed to alter or limit any other provisions of federal or state law, rule, or
other regulation.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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 FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Present Situation
Rural Economic Development Initiative (REDI)
The Rural Economic Development Initiative (REDI) is a program created within the Department of
Economic Opportunity (DEO), responsible for coordinating and focusing the efforts and resources of
state and regional agencies on the problems which affect the fiscal, economic, and community viability
of Florida's economically distressed rural communities, working with local governments, community-
based organizations, and private organizations that have an interest in the growth and development of
these communities to find ways to balance environmental and growth management issues with local
needs.1 REDI reviews and evaluates the impact of statutes and rules on rural communities and works
to minimize any adverse impact and undertake outreach and capacity-building efforts.2
A rural community is defined as a:
 County with a population of 75,000 or fewer;
 County with a population of 125,000 or fewer, if the county is contiguous to a county with a
population of 75,000 or fewer;
 Any municipality in a county that meets the above criteria; or
 An unincorporated federal enterprise community or an incorporated rural city with a population
of 25,000 or fewer, with an employment base focused on traditional agriculture or resource-
based industries, located in a county not defined as rural, and which has at least three or more
economic distress factors.3
A rural area of opportunity (RAO) is a rural community, or a region composed of rural communities,
designated by the Governor, which has been adversely affected by an extraordinary economic event,
sever or chronic distress, a natural disaster or that presents a unique economic development
opportunity of regional impact.4 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 DEO, as well the county and municipal governments to be included in the RAO.5
Based on recommendations by REDI, the Governor may designate up to three RAOs by executive
order.6 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).
1 S. 288.0656(3), F.S.
2 S. 288.0656(4), F.S.
3 S. 288.0656(2)(e), F.S. “Economic distress” means conditions affecting the fiscal and economic viability of a rural community,
including such factors as low per capita income, low per capita taxable values, h igh unemployment, high underemployment, low weekly
earned wages compared to the state average, low housing values compared to the state average, high percentages of the populat ion
receiving public assistance, high poverty levels compared to the state avera ge, and a lack of year-round stable employment.
opportunities. S. 288.0656(2)(c), F.S.
4 S. 288.0656(2)(d), F.S.
5 S. 288.0656(7)(b), F.S.
6 S. 288.0656(7)(a), F.S.
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  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. 7
Agency Grant Agreements
A state agency means a separate agency or unit of state government created or established by law and
includes, but is not limited to, the following and the officers thereof: authority, board, branch, bureau,
commission, department, division, institution, office, officer, or public corporation, as the case may be,
except any such agency or unit within the legislative branch of state government other than the Florida
Public Service Commission.8 An agency may enter an agreement with a county or municipal entity for
state or federal financial assistance. The agreement between the entity and the entity must include
provisions specifying:
 A scope of work that clearly establishes the tasks the recipient is required to perform;
 The division of the agreement into quantifiable unites of deliverables that must be received and
accepted in writing by the agency before payment;
 Financial consequences that apply if the recipient fails to perform the minimum level of service
required by the agreement;
 A recipient of federal or state financial assistance may expend funds only for allowable costs
resulting from obligations incurred during the specified agreement period;
 Any balance of unobligated funds which has been advanced or paid must be refunded to the
state agency;
 Any funds paid in excess of the amount to which the recipient or subrecipient is entitled under
the terms and conditions of the agreement must be refunded to the state agency;
 Any other additional provisions required by state law. 9
The Chief Financial Officer establishes and disseminates uniform procedures for grant management to
ensure that services have been rendered in accordance with agreement terms before the agency
processes an invoice for payment.10 The procedures include, but are not limited to, monitoring and
documenting recipient performance, reviewing and documenting deliverables for payment requested by
recipients and providing written certification by the grant manager of the agency’s receipt of goods and
services.11 The grant manager must reconcile and verify all funds received against all funds expended
during the grant agreement period and produce a final report which identifies any funds paid in excess
by the recipient.12
Community Development Block Grant Disaster Recovery Program (CDBG-DR)
Federal grants are a mechanism used by the Federal government to fund projects that provide public
services and stimulate the economy.13 Federal grant awards can be applied for by state and local
governments, universities, research labs, law enforcement agencies, non-profit organizations, and
businesses.14
7 Dept. of Economic Opportunity, Rural Areas of Opportunity, https://floridajobs.org/community-planning-and-development/rural-
community-programs/rural-areas-of-opportunity (last visited Mar. 25, 2023). 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.
8 S. 11.45(1)(l), F.S.
9 S. 215.971(1), F.S.
10 S. 215.971(2)(b), F.S.
11 Id.
12 S. 215.971(2)(c), F.S.
13 USA.gov. Government Grants and Loans. https://www.usa.gov/grants (last visited March 24, 2023)
14 Id.
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 The U.S. Department of Housing and Urban Development (HUD) provides federal grants to states and
local governments that have been impacted by disasters CDBG-DR.15 CDBG-DR provides grants to
help cities, counties, and states recover from certain disasters declared by the President of the United
States, subject to congressional funds appropriation.16
CDBG-DR grantees may incur costs prior to the effective date of the grant agreement with HUD. 17 The
grantee may pay these costs after the effect date of the grant agreement. Grantees can incur any
eligible cost to be reimbursed provided it meets certain conditions:
 The activity for which the costs are being incurred is included in a consolidated plan action plan,
an amended consolidated plan action plan, or a loan guarantee application prior to the costs
being incurred;
 Citizens are advised of the extent to which these pre-award costs will affect future grants;
 The costs and activities funded are in compliance with the CDBG-DR regulations and the
environmental review requirements;
 The activity for which payment is being made complies with the statutory and regulatory
provisions in effect at the time the costs are paid for with CDBG-DR funds;
 CDBG-DR payment will be made during a time no longer than the next two program years
following the effective date of the grant agreement or amendment in which the activity is first
included; and
 The total amount of pre-award costs to be paid during any program year is no more than 25
percent of grant amount for that year or $300,000, whichever is greater. 18
Upon written request from the grantee, HUD may authorize payment of pre-award costs for activities
that do not meet the requirement for a two-year payback or where the total amount exceeds 25 percent
of the grant amount.19 Factors HUD will consider in granting exceptions to the period of repayment or
the dollar threshold include:
 Whether granting the authority would result in a significant contribution to the goals and
purposes of the CDBG-DR program;
 Whether failure to grant the authority would result in undue hardship to the grantee or
beneficiaries of the activity;
 Whether granting the authority would not result in a violation of a statutory provision or any other
regulatory provisions;
 Whether circumstances are clearly beyond the grantees control; and
 Any other relevant considerations.20
The CDBG-DR program has specific financial requirements in order to be eligible to apply for the
grants. To apply, state and local governments must support indirect costs with a cost allocation plan or
an indirect cost proposal prepared in accordance with the policy. 21 An indirect cost proposal is required
if the local government has indirect costs resulting from centralized services that will be charged to
federal awards and other indirect costs originating in various departments carrying out federal awards. 22
The proposal is used to establish an indirect cost rate, which is used to determine the amount of
reimbursement a grantee can obtain for indirect costs.
Effect of Proposed Changes
The bill requires that an agency agreement to provide state or federal financial assistance to a rural
community or a rural area of opportunity include a provision that allows the agency to provide for the
15 Legal Aid Disaster Resource Center, The Community Development Block Grant Disaster Recovery Program .
https://www.ladrc.org/wp-content/uploads/2020/11/CDBG-DR-Overview-A_Final-dated.pdf (last visited Mar. 25, 2023).
16 Id.
17 U.S. Department of Housing and Urban Development, Community Development Block Grant Disaster Recovery Grant Funds:
Chapter 11.3 Pre-Award Costs (November 2007).
18 Id.
19 Id.
20 Id.
21 Id. at Chapter 11.9.1 Indirect Costs.
22 Id.
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 payment of invoices to the county or municipality for verified and eligible performance that has been
completed in accordance with the terms and conditions set forth in the agreement.
The provision is meant to alleviate the financial hardships that certain rural counties and municipalities
encounter when administering agreements and must be utilized by the agency based on demonstrated
financial hardship and
may not be construed to alter or limit any other provisions of federal or state law, rule, or other
regulation.
B. SECTION DIRECTORY:
Section 1: Amends 215.971, F.S. relating to agreements funded with federal or state assistance.
Section 2: Enables the act to take effect July 1, 2023.
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:
Local governments may be able to apply for more grants if the agency provides for the payment of
invoices to meet with the terms and conditions of the grant agreement.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
None.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not Applicable. This bill does not appear to require counties or municipalities to spend funds or take
action requiring the expenditures of funds; reduce the authority that counties or municipalities have
to raise revenues in the aggregate; or reduce the percentage of state tax shared with counties or
municipalities.
2. Other:
None.
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 B. RULE-MAKING AUTHORITY:
The bill neither provides authority for nor requires rulemaking by executive branch agencies.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On March 29, 2023, the Local Administration, Federal Affairs & Special Districts Subcommittee adopted a
proposed committee substitute (PCS) and reported the bill favorably as a committee substitute. The PCS
differs from the bill in that it requires that agency agreements include a provision that allows the agency to
provide for the payment of invoices to the county or municipality for verified and eligible performance that
has been completed in accordance with the terms and conditions set forth in the agreement. The provision
is to be utili