Florida Regulations 19A-5.0035: Award of Master Equipment Financing Agreement
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(1) Master Equipment Financing Agreements shall be awarded at public offering in such manner and at such place or places within the State as the Governing Board shall determine. Notice of such offering shall be published as the Governing Board shall deem advisable and proper.
(2) All proposals for any Master Equipment Financing Agreement shall be opened in public. Such Master Equipment Financing Agreement shall be awarded to the lowest bidder. The basis of award shall be as set forth in a resolution of the Division. An Assistant Secretary of the Governing Board is authorized to present the Master Equipment Financing Agreement to the Comptroller for award and execution and such award and execution by the Comptroller shall be final without any further action by the Governing Board. An Assistant Secretary of the Governing Board is authorized to reject all bids received; such rejection shall be final without further action by the Governing Board. The results of the award of the Master Equipment Financing Agreement or the rejection of all bids shall be reported at a subsequent meeting of the Governing Board.
(3)(a) Notwithstanding the provisions of subsections (1) and (2), in the event the Governing Board determines by resolution that a negotiated award of a Master Equipment Financing Agreement is in the best interest of the state, and the Governing Board has approved the form and substance of a purchase contract or similar document except for any details unique to the particular Master Equipment Financing Agreement, an Assistant Secretary of the Governing Board is authorized to negotiate the award of the Master Equipment Financing Agreement, and present the Master Equipment Financing Agreement to the Comptroller for award and execution, without further action by the Governing Board, subject to any restrictions set forth in the resolution authorizing the negotiated award. In making a determination that the negotiated award is in the best interest of the state, the Governing Board shall provide in a resolution specific findings of the reasons requiring the negotiated award and the basis for the specific findings. In making such specific findings, the Governing Board shall consider the following factors:
1. Unstable market conditions which require the flexible pricing or the precise timing of the award of the Master Equipment Financing Agreement to a degree which would not be expected through a competitive award;
2. Concerns regarding the credit quality of the state or any source of revenue pledged to the Master Equipment Financing Agreement;
3. A Master Equipment Financing Agreement for an unusually large sum which, if awarded competitively, would result in the expectation of fewer bids than would be necessary for sufficient price competition;
4. A Master Equipment Financing Agreement which would require extensive or aggressive marketing of any certificates of participation;
5. Use of an innovative or unusual structure or security which would require the underwriting of the certificates of participation in a manner not likely to be available in a competitive offering; and
6. Changes or anticipated changes in laws or regulations which would make the prompt award of the Master Equipment Financing Agreement desirable.
(b) Prior to the negotiated award of a Master Equipment Financing Agreement, the Division shall retain the services of a financial advisor who shall, at a minimum, review and advise the Division as to the reasonableness of the timing of the award, the gross underwriting spread on any certificates of participation and the price of any certificates of participation. Immediately subsequent to the award the financial advisor shall provide a written opinion concerning the fairness or reasonableness of the timing of the award, any gross underwriting spread on the certificates of participation and the price of the certificates of participation.
(c) On or before the time that the Governing Board authorizes the award of the Master Equipment Financing Agreement by a negotiated offering, the Governing Board shall make the following determinations for any certificates of participation: the percentage distribution of the management fee among underwriters; the percentage of participation among underwriters; and any special instructions regarding the distribution of certificates of participation, which determinations and instructions shall be binding upon the underwriters. In addition, if requested by the Division, the underwriters shall be bound by the following:
1. When there are three or more underwriters selected by the Governing Board, all designated orders must be filled by a minimum of three underwriters designated by the purchaser of the certificates of participation and no one underwriter may receive more than 50% of any individual designated order.
2. During the order period, the underwriters shall provide the following information to the Division on a continual basis, as soon as it becomes available: the size and type of the orders received; the name of the underwriter placing the order and the purchaser of the certificates of participation; and the time of receipt of each order.
(4)(a) In the event the Division negotiates the offering of a Master Equipment Financing Agreement, the underwriters shall provide to the Division at least five business days prior to the award of the certificates of participation to the underwriters, unless a shorter time period is approved by the Director of the Division, a disclosure statement containing the following information:
1. The names, addresses, and estimated amounts of compensation of any finders connected with the transaction;
2. An estimate of:
a. Any expense component of the gross underwriting spread on the certificates of participation,
b. Any management fee component of the gross underwriting spread on the certificates of participation,
c. Any takedown component of the gross underwriting spread on the certificates of participation, and
d. Any risk component of the gross underwriting spread on the certificates of participation.
For purposes of sub-subparagraph 2.a. above, the underwriters must also provide an itemized list setting forth the nature and estimated amounts of expenses to be incurred by the underwriters in connection with the issuance of such certificates of participation. Notwithstanding the foregoing, any such list may include an item for miscellaneous expenses, provided it includes only minor items of expense which in total shall not exceed more than $2,500 and which cannot be easily categorized elsewhere in the statement.
3. Any other fee, retainer, bonus, or compensation estimated to be paid by the underwriters in connection with the transaction to any person not regularly employed or retained by it, and
4. The name and address of each underwriter in the syndicate or selling group for the certificates of participation.
(b) At least three business days prior to the award of the certificates of participation in a negotiated offering of a Master Equipment Financing Agreement, unless a shorter time period is approved by the Director of the Division, final agreement must be reached on:
1. The expense component of the gross underwriting spread on the certificates of participation; provided that in the negotiation of the expense component of the gross underwriting spread, no expenses for underwriter’s legal counsel will be considered which exceed the amount to be paid to Tax Counsel by the Division for the Master Equipment Financing Agreement, unless an increased amount is authorized by the Governing Board due to extraordinary circumstances such as unusual complexity of the transaction; provided, however, that this provision shall not be construed to limit in any way the compensation paid by the underwriter to underwriter’s counsel;
2. The management fee component of the gross underwriting spread on the certificates of participation;
3. The maximum amount for the takedown component of the gross underwriting spread on the certificates of participation;
4. The maximum amount for the risk component of the gross underwriting spread on the certificates of participation; and
5. The level of participation by each of the underwriters involved in the transaction.
(5) The results of a negotiated award or the reasons the Division was unable to negotiate an award shall be reported at a subsequent meeting of the Governing Board. If a negotiated award is made the report shall include, at a minimum:
(a) The price of the certificates of participation,
(b) The allocation of the certificates of participation and an explanation of the gross underwriting spread, and
(c) The actual or estimated amount of all fees paid by the Division including, but not limited to, the fees of tax counsel and any financial advisor.
(6) No violation of any provision of this section shall affect the validity of any Master Equipment Financing Agreement or any certificates of participation thereunder.
Rulemaking Authority Florida Statutes § 276.064(8). Law Implemented Florida Statutes § 287.064. History-New 5-28-95.
Terms Used In Florida Regulations 19A-5.0035
- Contract: A legal written agreement that becomes binding when signed.
(3)(a) Notwithstanding the provisions of subsections (1) and (2), in the event the Governing Board determines by resolution that a negotiated award of a Master Equipment Financing Agreement is in the best interest of the state, and the Governing Board has approved the form and substance of a purchase contract or similar document except for any details unique to the particular Master Equipment Financing Agreement, an Assistant Secretary of the Governing Board is authorized to negotiate the award of the Master Equipment Financing Agreement, and present the Master Equipment Financing Agreement to the Comptroller for award and execution, without further action by the Governing Board, subject to any restrictions set forth in the resolution authorizing the negotiated award. In making a determination that the negotiated award is in the best interest of the state, the Governing Board shall provide in a resolution specific findings of the reasons requiring the negotiated award and the basis for the specific findings. In making such specific findings, the Governing Board shall consider the following factors:
1. Unstable market conditions which require the flexible pricing or the precise timing of the award of the Master Equipment Financing Agreement to a degree which would not be expected through a competitive award;
2. Concerns regarding the credit quality of the state or any source of revenue pledged to the Master Equipment Financing Agreement;
3. A Master Equipment Financing Agreement for an unusually large sum which, if awarded competitively, would result in the expectation of fewer bids than would be necessary for sufficient price competition;
4. A Master Equipment Financing Agreement which would require extensive or aggressive marketing of any certificates of participation;
5. Use of an innovative or unusual structure or security which would require the underwriting of the certificates of participation in a manner not likely to be available in a competitive offering; and
6. Changes or anticipated changes in laws or regulations which would make the prompt award of the Master Equipment Financing Agreement desirable.
(b) Prior to the negotiated award of a Master Equipment Financing Agreement, the Division shall retain the services of a financial advisor who shall, at a minimum, review and advise the Division as to the reasonableness of the timing of the award, the gross underwriting spread on any certificates of participation and the price of any certificates of participation. Immediately subsequent to the award the financial advisor shall provide a written opinion concerning the fairness or reasonableness of the timing of the award, any gross underwriting spread on the certificates of participation and the price of the certificates of participation.
(c) On or before the time that the Governing Board authorizes the award of the Master Equipment Financing Agreement by a negotiated offering, the Governing Board shall make the following determinations for any certificates of participation: the percentage distribution of the management fee among underwriters; the percentage of participation among underwriters; and any special instructions regarding the distribution of certificates of participation, which determinations and instructions shall be binding upon the underwriters. In addition, if requested by the Division, the underwriters shall be bound by the following:
1. When there are three or more underwriters selected by the Governing Board, all designated orders must be filled by a minimum of three underwriters designated by the purchaser of the certificates of participation and no one underwriter may receive more than 50% of any individual designated order.
2. During the order period, the underwriters shall provide the following information to the Division on a continual basis, as soon as it becomes available: the size and type of the orders received; the name of the underwriter placing the order and the purchaser of the certificates of participation; and the time of receipt of each order.
(4)(a) In the event the Division negotiates the offering of a Master Equipment Financing Agreement, the underwriters shall provide to the Division at least five business days prior to the award of the certificates of participation to the underwriters, unless a shorter time period is approved by the Director of the Division, a disclosure statement containing the following information:
1. The names, addresses, and estimated amounts of compensation of any finders connected with the transaction;
2. An estimate of:
a. Any expense component of the gross underwriting spread on the certificates of participation,
b. Any management fee component of the gross underwriting spread on the certificates of participation,
c. Any takedown component of the gross underwriting spread on the certificates of participation, and
d. Any risk component of the gross underwriting spread on the certificates of participation.
For purposes of sub-subparagraph 2.a. above, the underwriters must also provide an itemized list setting forth the nature and estimated amounts of expenses to be incurred by the underwriters in connection with the issuance of such certificates of participation. Notwithstanding the foregoing, any such list may include an item for miscellaneous expenses, provided it includes only minor items of expense which in total shall not exceed more than $2,500 and which cannot be easily categorized elsewhere in the statement.
3. Any other fee, retainer, bonus, or compensation estimated to be paid by the underwriters in connection with the transaction to any person not regularly employed or retained by it, and
4. The name and address of each underwriter in the syndicate or selling group for the certificates of participation.
(b) At least three business days prior to the award of the certificates of participation in a negotiated offering of a Master Equipment Financing Agreement, unless a shorter time period is approved by the Director of the Division, final agreement must be reached on:
1. The expense component of the gross underwriting spread on the certificates of participation; provided that in the negotiation of the expense component of the gross underwriting spread, no expenses for underwriter’s legal counsel will be considered which exceed the amount to be paid to Tax Counsel by the Division for the Master Equipment Financing Agreement, unless an increased amount is authorized by the Governing Board due to extraordinary circumstances such as unusual complexity of the transaction; provided, however, that this provision shall not be construed to limit in any way the compensation paid by the underwriter to underwriter’s counsel;
2. The management fee component of the gross underwriting spread on the certificates of participation;
3. The maximum amount for the takedown component of the gross underwriting spread on the certificates of participation;
4. The maximum amount for the risk component of the gross underwriting spread on the certificates of participation; and
5. The level of participation by each of the underwriters involved in the transaction.
(5) The results of a negotiated award or the reasons the Division was unable to negotiate an award shall be reported at a subsequent meeting of the Governing Board. If a negotiated award is made the report shall include, at a minimum:
(a) The price of the certificates of participation,
(b) The allocation of the certificates of participation and an explanation of the gross underwriting spread, and
(c) The actual or estimated amount of all fees paid by the Division including, but not limited to, the fees of tax counsel and any financial advisor.
(6) No violation of any provision of this section shall affect the validity of any Master Equipment Financing Agreement or any certificates of participation thereunder.
Rulemaking Authority Florida Statutes § 276.064(8). Law Implemented Florida Statutes § 287.064. History-New 5-28-95.