Meeting Packet — Commerce Committee (January 16, 2020)
Summary
A meeting packet for the Commerce Committee meeting on Thursday, January 16, 2020, 2:30 PM to 4:30 PM at Webster Hall, with Mike La Rosa as Chair. The agenda lists HB 101 Public Construction, CS/CS/HB 115 Keeping Our Graduates Working Act, CS/HB 269 Loss Run Statements, HB 329 Insurance Guaranty Associations, HB 707 Legislative Review of Occupational Regulations and HB 6037 Individual Wine Containers. The staff analysis of HB 101 says the bill changes the limits on retainage withheld on state and local government contracts, reducing the maximum to five percent for the entire project on contracts for more than $200,000, with an effective date of October 1, 2020. The packet also contains the text of HB 6037, which repeals Section 564.05, Florida Statutes.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
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Commerce Committee
Thursday, January 16, 2020
2:30 PM - 4:30 PM
Webster Hall (212 Knott)
Meeting Packet
Jose R. Oliva Mike La Rosa
Speaker Chair
The Florida House of Representatives
Commerce Committee
Jose Oliva Mike La Rosa
Speaker Chair
Meeting Agenda
Thursday, January 16, 2020
2:30 pm - 4:30 pm
Webster Hall (212 Knott)
I. Call to Order
II. Roll Call
Ill. Welcome and Opening Remarks
IV. Consideration of the following bill(s):
HB 101 Public Construction by Andrade
CS/CS/HB 115 Keeping Our Graduates Working Act by Health Quality
Subcommittee, Business & Professions Subcommittee, Duran
CS/HB 269 Loss Run Statements by Insurance & Banking Subcommittee, Perez
HB 329 Insurance Guaranty Associations by Smith, D.
HB 707 Legislative Review of Occupational Regulations by Renner
HB 6037 Individual Wine Containers by LaMarca
V. Closing Remarks
VI. Adjournment
303 House Office Building, 402 South Monroe Street, Tallahassee, FL 32399-1300
(850) 717-4870
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL#: HB 101 Public Construction
SPONSOR(S): Andrade and others
TIED BILLS: IDEN./SIM. BILLS: CS/SB 246
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Business & Professions Subcommittee 12 Y, 0 N Brackett Anstead
2) Oversight, Transparency & Public Management 12 Y, 0 N Villa Smith
Subcommittee
3) Commerce Committee Brackett ll (3 Hamon
SUMMARY ANALYSIS
Retainage is a common construction practice that allows a portion of an agreed upon contract price to be
withheld until the work is substantially complete to assure that a contractor or subcontractor will complete the
construction project.
Current law sets limits on how much retainage can be withheld on state and local government contracts. For
construction contracts with the state for $200,000 or less, the state may withhold up to ten percent of a
payment to a contractor. For construction contracts with the state or local governments that are for more than
$200,000, the maximum amount that may be retained in a payment is:
• Ten percent of a payment to a contractor before half of the work is completed;
• Five percent of a payment to a contractor after half of the work is completed; and
• Ten percent of a payment to a contractor for the entire project, if the government entity is a municipality
with a population of 25,000 or less or a county with a population of 100,000 or less.
The bill changes the limits on retainage permitted to be withheld on state and local government contracts.
For contracts more than $200,000, the bill reduces the maximum amount that may be retained:
• From ten percent before half of the work is complete, and five percent after half of the work is complete
o To five percent for the entire project; and
• From ten percent for the entire project if the government entity is a municipality with a population of
25,000 or less or a county with a population of 100,000 or less
o To five percent for the entire project.
The bill repeals:
• The ability of a contractor to make a request the government entity release up to half of the retained
amount after half of the project is completed; and
• The ability of a contractor to withhold more than five percent of each progress payment to his or her
subcontractors after half of a project for a government entity is completed.
For contracts less than $200,000, the bill reduces the amount that the state may retain from a progress
payment to a contractor from ten percent to five percent.
The provisions of the bill do not apply to FDOT construction projects authorized by ch. 337, F.S., or any
contract for construction services entered into, pending approval, or advertised by a government entity, on or
before October 1, 2020.
The bill may have a fiscal impact on state government and local governments. See Fiscal Comments.
The bill provides for an effective date of October 1, 2020.
This document 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:
Current Situation
Construction Contractors
Construction contractors are certified or registered by the Construction Industry Licensing Board (GILB)
housed within the Department of Business and Professional Regulation (DBPR). The GILB consists of
18 members who are appointed by the Governor and confirmed by the Senate. 1 Certified construction
contractors are licensed and regulated by the GILB and can practice statewide. Registered contractors
are those that choose to practice only within the specific locality where they have chosen to apply for
licensure and may only practice within that locality. 2
Retainage
Payments for construction services are usually made incrementally as progress is made. Retainage is
a construction practice whereby a project owner withholds a certain percentage of a payment from the
contractor who in turn withholds a certain percentage from the subcontractors until the project is
completed. The retained funds are generally paid out when the project is completed. 3
The purpose of retainage is provide leverage for the property owner and the contractor to ensure the
project is completed in a timely fashion. Retainage also serves as a safeguard against possible
overpayment to a contractor or subcontractor when the estimated percentage of project completion,
used for periodic progress payments, exceeds the actual percentage completed. 4
Florida Retainage Rates for Construction Contracts with Government Entities
Section 218.72, F.S., defines a "local government entity" to mean a county or municipal government,
school board, school district, authority, special taxing district, other political subdivision, or any office,
board, bureau, commission, department, branch, division, or institution thereof.
Section 255.072, F.S., defines a "public entity" to mean the state, or any office, board, bureau,
commission, department, branch, division, or institution thereof, but the term does not include a local
government entity as defined above.
Current law provides that for any construction service contract with a local government entity or a public
entity (government entities) that is worth more than $200,000:
• the maximum amount that a government entity may withhold from a progress payment to a
contractor is ten percent, until half of the project is completed.
• the maximum amount that a government entity may withhold from a progress payment to a
contractor is reduced to five percent, after half of the project is completed.
However, a municipality with a population of 25,000 or less and a county with a population of 100,000
or less may withhold ten percent until the project is completed. 5
1
S. 489.107, F.S.
2
See generally s. 489.105, F.S.
3
OPPAGA, Inflexibility in Contracting and Retainage Practices Could Hurt Construction Industry, p. 1 (Dec.2000)
http://www.oppaga.state.f1.us/MonitorDocs/Reports/pdf/0026rpt.pdf (last visited on Oct. 20, 2019).
4
Id.; Bausman, Dennis C., Retainage Practice In The Construction Industry, Foundation of the American Subcontractors Association,
Inc., p. 1 (Nov. 2004) https://www.asacolorado.com/images/stories/documents/legislation/retainageclemsonstudy.pdf (last visited on
Oct. 20, 2019).
5
Ss. 218.735 & 255.078, F.S.
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After half of the project is completed, a contractor may request the government entity to release up to
half of the retained amount. The government entity must release the requested amount unless the
amount is subject to a dispute. 6
After a contractor completes a project, he or she may submit a request to the government entity for all
remaining retained funds. The government entity must release the funds unless there is a good faith
dispute that the contractor has not completed an item or items on the government entity's list of items
required to complete the project. If there is a good faith dispute, the government entity may withhold an
amount not to exceed 150% of the cost to complete the item or items. 7
When a contractor receives payment from a government entity for work or materials provided by a
subcontractor, the contractor must provide the payment to the subcontractor within 10 days of receiving
the payment. However, after half of a project with a government entity is completed, a contractor may
withhold more than five percent of each progress payment to a subcontractor even though the
government entity may not retain more than five percent of each payment to a contractor for work and
materials provided by the contractor and his or her subcontractors. 8
A contractor may withhold more than five percent of each payment based on the contractor's
assessment of a subcontractor's past performance, the likelihood that such performance will continue,
and the contractor's ability to rely on other safeguards such as a performance bond. If a contractor
elects to retain more than five percent, the contractor must notify the subcontractor in writing of his or
her determination to withhold more than five percent and the reasons for making that determination,
and the contractor may not request the release of such retained funds from the government entity. 9
For contracts for construction services with the state that are for $200,000 or less, current law requires
the Department of Management Services (OMS) to establish rules that allow the state to retain up to
ten percent of each payment made to the contractor. In order to comply, OMS enacted Rule 60D-
5.0041, F.A.C., which provides that for public works contracts with the state that are worth more than
$100,000 but not more than $200,000, a state agency may request OMS to exempt the requirement for
a performance and payment bond as long as the state agency retains ten percent of each payment
made to the contractor. If the contractor defaults, the agency will use the retained payments to pay any
claims of unpaid bills made by laborers, materialmen, and subcontractors. 10
Chapter 337, F.S., provides that when the Department of Transportation (DOT) uses flexible start and
finish times for construction projects, DOT may retain ten percent when a contractor fails to timely
commence work or falls behind at any time prior to completion of the contract. 11
Additional Requirements for Construction Contracts with Government Entities
Current law requires a contractor who contracts with the state, a local government, or another public
authority to construct a public building or complete some other public works project that is worth more
than $200,000 to obtain a payment bond with an authorized surety insurer equal to the contract price,
and a performance bond with an authorized surety insurer. In lieu of a bond, a contractor may file an
alternative form of security in the form of cash, a money order, a certified check, a cashier's check, or
an irrevocable letter of credit. 12
6
Ss. 218.735 & 255.078, F.S.
7
Ss. 218.735 & 255.077, F.S.
8
Ss. 218.735, 255.073, & 255.078, F.S
9
Ss. 218.735 & 255.078, F.S.
10
S. 255.05(l)(t), F.S.; Rule. 60D-5.0041, F.A.C.
II S. 337.015(5), F.S.
12
S. 255.05(1), (7), F.S.
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A performance bond issued by a surety guarantees that the contractor or surety will complete the work
required under the bonded contract. 13 A payment bond issued by a surety guarantees that the
contractor or surety will pay the subcontractors, suppliers, and materialmen associated with the
construction project. 14
Before beginning work, a contractor must execute and record both bonds in the public records of the
county where the improvement is located and provide a certified copy of the bonds to the public body
commissioning the project. A contractor cannot receive payment until the contractor has provided a
certified copy of the bonds. 15
OPPAGA Study of Retainage in December 2000
During the 2000 Legislative Session, the Legislature directed the Office of Program Policy Analysis and
Governmental Accountability (OPPAGA) to conduct a study to evaluate retainage and other
construction practices to determine if Florida construction law needed to be revised. 16 At the time, the
only contracts that had a statutory cap on retainage were contracts with the state that were worth
$200,000 or less, which was set at ten percent. 17
OPPAGA determined that putting a statutory cap on the amount a property owner could retain could
become unfavorable to contractors and subcontractors because property owners and contractors may:
• Seek to protect their property by using alternate forms of leverage that are less favorable than
the current system of retainage;
• Be less willing to take the risk associated with working with a new contractor or subcontractor;
and
• Not allow an existing contractor or subcontractor to take on a project of an increased size. 18
Proponents for lower retainage rates argue that requiring a performance bond is a reasonable
substitute for retainage because a performance bond ensures the contractor will complete the project to
the property owner's satisfaction, and will screen out contractors who are unable to perform a project. 19
OPPAGA found that a performance bond was not a reasonable substitute for retainage because
retainage served as an incentive for a contractor or subcontractor to complete their work in a timely
fashion, and a performance bond only guarantees that a project will eventually be completed if a
contractor defaults. 20
OPPAGA also found that a greater portion of risk associated with contracting had shifted from the
contractor to the subcontractor. If a subcontractor performed work on a construction project, there could
be delays, entirely outside of the subcontractor's control, which prevented the subcontractor from
receiving retained money. This could result in the subcontractor waiting for an unreasonable amount of
time to receive payment for work the subcontractor completed. 21
OPPAGA indicated that subcontractors could try to mitigate this risk by planning for these funds not
being immediately available or requiring that retained funds be placed in an interest bearing account. 22
13
American Home Assurance Co. v. Larkin General Hospital, Ltd., 593 So. 2d 195, 198 (Fla. 1992).
14
Everett Painting Company, Inc. v. Padula & Wadsworth Construction, Inc., 856 So. 2d 1059, 1062 (Fla. 4th DCA 2003).
15
S. 255.05(1), F.S.
16
OPP AG A supra note 3, at 1; Ch. 2000-372, Laws of Florida.
17
See generally Ch. 255, F.S. (2000).
18
OPPAGA supra note 3, at 3.
19
Bausman supra note 4, at 10.
20
OPPAGA supra note 3, at 4.
21
OPPAGA supra note 3, at 2.
22
Id. at 2 and 7.
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However, proponents for lower retainage rates argue that this reduces competition because smaller
subcontractors cannot compete for projects because even though they might be capable of doing a
project, they do not have the funds to plan for a high percentage of their earned money being retained.
Proponents for lower retainage rates also argue that high retainage rates increase the cost of
construction projects because contractors and subcontractors are required to charge more in order to
ensure they can finance a project. 23
After the OPPAGA study was completed, the 2005 Legislature passed and the Governor signed into
law the current rate of retainage for government entities. The maximum amount a government entity
could retain from a progress payment was set at ten percent because that was the industry norm at that
time. 24
Retainage Rates for Other States
According to the American Subcontractors Association, 43 states specify the maximum retainage
percentage that the government may withhold from a payment to a contractor. 25 At least ten states,
including Florida, Pennsylvania, and Georgia, cap the retainage percentage at ten percent. 26 At least
twenty states, including North Carolina, New York, and Virginia, cap the retainage percentage at five
percent. 27 South Carolina caps the retainage percentage rate at 3.5 percent. 28
Retainage Rate for the Federal Government
Federal law requires the federal government to pay a contractor the full amount of a progress payment.
Retainage is not used without cause. However, a contracting officer may withhold a percentage of
payment based on the officer's assessment of a contractor's past performance and the likelihood such
performance will continue. If the officer determines a contractor has not made satisfactory progress,
then the officer may retain a maximum of 10 percent of a payment or payments. 29
Effect of the Bill
The bill reduces the amount that a government entity may retain from a progress payment to a
contractor for contracts worth more than $200,000:
• from ten percent, when less than 50 percent of the project is complete, and five percent, when
50 percent or more of the project is complete,
• to five percent for the entire project.
The bill reduces the amount that the state may retain from a progress payment to a contractor, for
contracts worth $200,000 or less, from ten percent to five percent.
The bill reduces the amount that a municipality with a population of 25,000 or less and a county with a
population of 100,000 or less may retain from a progress payment to a contractor, for contracts worth
more than $200,000, from ten percent to five percent.
The bill repeals:
• The ability of a contractor to request the government entity to release up to half of the retained
amount after half of the project is completed; and
23
Bausman supra note 4, at 6.
24
See House Analysis of2005 House Bill 509 (April 22, 2005).
25
American Subcontractors Association, Inc., Retainage law in the 50 States,
https://www.keglerbrown.com/content/uploads/2018/09/Retainage-Law-in-the-50-States-2018.pdf (last visited Nov. 13, 2019).
26
/d.; 62 Pa. Cons. Stat.§ 3921(a); Ga. Code Ann.§ 13-10-80(b)(2)(A).
27
Id.; N.C. Gen. Stat.§ 143-134.l(bl); N.Y. State. Fin. Law§ 9-139(f) (New York caps the retainage rate at 5% ifthe contractor
obtains a performance bond); Va. Code Ann. § 2.2-4301 & 4333.
28
/d.; S.C. Code Ann.§ 11-35-3030(4).
29
48 C.F.R. § 32.103.
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• The ability of a contractor to withhold more than five percent of each progress payment to his or
her subcontractors after half of a project with a government entity is completed.
The bill specifies that the provisions do not apply to:
• DOT construction contracts authorized under ch. 337, F.S.; and
• Any contract for construction services entered into, pending approval, or advertised by a
government entity, on or before October 1, 2020.
B. SECTION DIRECTORY:
Section 1. Amends s. 218.735, F.S., relating to public construction retainage.
Section 2. Amends s. 255.05, F.S., relating to public construction retainage.
Section 3. Amends s. 255.077, F.S., amending a cross-reference.
Section 4. Amends 255.078, F.S., relating to public construction retainage.
Section 5. Provides that the bill does not apply to certain public construction contracts.
Section 6. Provides an effective date of October 1, 2020.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
See Fiscal Comments.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
See Fiscal Comments.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
See Fiscal Comments.
D. FISCAL COMMENTS:
The bill may result in contractors and subcontractors who provide services in the construction of public
projects for the state and local governments receiving more money in progress payments, which could
result in more competition for public works projects and lower costs for the state and local
governments.
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According to OMS, there is no expected financial impact on the state because construction projects
under $100,000 would still require the state to retain 5% and OMS will still require contractors to obtain
a performance bond for construction projects over $100,000. 30
111. 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.
8. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
°Florida Department of Management Services, Agency Analysis of2020 House Bill 101, p. 4 (Oct. 5, 2020).
3
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FLORIDA H O U S E 0 F REPRESENTATIVES
HB 101 2020
1 A bill to be entitled
2 An act relating to public construction; amending s.
3 218.735, F.S.; revising the amount of retainage that
4 certain local government entities and contractors may
5 withhold from progress payments for any construction
6 services contract; conforming a provision to changes
7 made by the act; amending s. 255.05, F.S.; revising
8 requirements for Department of Management Services
9 rules governing certain contracts; amending s.
10 255.077, F.S.; conforming a cross-reference; amending
11 s. 255.078, F.S.; revising the amounts of retainage
12 that certain public entities and contractors may
13 withhold from progress payments for any construction
14 services contract; conforming a provision to changes
15 made by the act; providing applicability; providing an
16 effective date.
17
18 Be It Enacted by the Legislature of the State of Florida:
19
20 Section 1. Paragraph (i) of subsection (7) and subsection
21 (8) of section 218.735, Florida Statutes, are amended to read:
22 218.735 Timely payment for purchases of construction
23 services.-
24 (7) Each contract for construction services between a
25 local governmental entity and a contractor must provide for the
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26 development of a single list of items required to render
27 complete, satisfactory, and acceptable the construction services
28 purchased by the local governmental entity.
29 (i) If a local governmental entity fails to comply with
30 its responsibilities to develop the list required under
31 paragraph (a) or paragraph (b) within the time limitations
32 provided in paragraph (a), the contractor may submit a payment
33 request for all remaining retainage withheld by the local
34 governmental entity pursuant to this section; and payment of any
35 remaining undisputed contract amount, less any amount withheld
36 pursuant to the contract for incomplete or uncorrected work,
37 must be paid within 20 business days after receipt of a proper
38 invoice or payment request. If the local governmental entity has
39 provided written notice to the contractor specifying the failure
40 of the contractor to meet contract requirements in the
41 development of the list of items to be completed, the local
42 governmental entity need not pay or process any payment request
43 for retainage if the contractor has, in whole or in part, failed
44 to cooperate with the local governmental entity in the
45 development of the list or to perform its contractual
46 responsibilities, if any, with regard to the development of the
47 list or if paragraph ( 8) ( c) ( 8) ( f) applies.
48 (8) (a) With regard to any contract for construction
49 services, a local governmental entity may withhold from each
50 progress payment made to the contractor an amount not exceeding
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51 ~ ±G- percent of the payment as retainage until §0 percent
52 eofflpletion of sueh services.
53 (b) After §0 percent eoffiPletion of the eonstruetion
54 services purchased pursuant to the eontraet, the loeal
55 governffiental entity ffiust reduce to § percent the affiount of
56 retainage withheld froffi eaeh subsequent progress pa'.tffient ffiade to
57 the eontraetor. For purposes of this subsection, the terffi "§0
58 percent eofflpletion" has the ffieaning set forth in the eontraet
59 between the loeal governffiental entity and the eontraetor or, if
60 not defined in the eontraet, the point at whieh the loeal
61 governffiental entity has eJcpended §0 percent of the total eost of
62 the eonstruetion services purchased as identified in the
63 eontraet together with all eosts associated with e}{isting change
64 orders and other additions or fflodifieations to the eonstruetion
65 services provided for in the eontraet. However, notwithstanding
66 this subsection, a ffiunieipality having a population of 2§,000 or
67 fewer, or a county having a population of 100,000 or fewer, may
68 Hithhold retainage in an afflount not C}{eeeding ~ 10 percent of
69 eaeh progress payffient fflade to the eontraetor until final
70 eofflpletion and aeeeptanee of the proj cot by the loeal
71 governffiental entity.
72 (e) After §0 percent eoffiPletion of the eonotruetion
73 services purchased pursuant to the eontraet, the eontraetor ffiay
74 cleat to withhold retainage froffi payffiento to its oubeontraetoro
75 at a rate higher than§ percent. The opeeifie affiount to be
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76 withheld ffiust be deterffiined on a ease by ease basis and ffiust be
77 based on the contractor's assessffient of the subcontractor's past
78 perforffianee, the lilcelihood that ouch perforffianee will continue,
79 and the contractor's ability to rely on other safeguards. The
80 contractor shall notify the subcontractor, in ;1riting, of its
81 deterffiination to withhold ffiore than 5 percent of the progress
82 payffient and the reasons for ffiaking that deterffiination, and the
83 contractor ffiay not request the release of ouch retained funds
84 froffi the local governffiental entity.
85 (d) After 50 percent eoffipletion of the construction
86 services purchased pursuant to the contract, the contractor ffiay
87 present to the local governffiental entity a paYffient request for
88 up to one half of the retainage held by the local governmental
89 entity. The local governffiental entity shall proffiptly ffiake
90 payffient to the contractor, unless the local governffiental entity
91 has grounds, pursuant to paragraph (f), for withholding the
92 payffient of retainage. If the local governffiental entity ffiakeo
93 payffient of retainage to the contractor under this paragraph
94 which is attributable to the labor, services, or ffiaterialo
95 supplied by one or ffiore oubeontraetoro or suppliers, the
96 contractor shall tiffiely reffiit paYffient of ouch retainage to those
97 oubeontraetoro and suppliers.
98 J.!21-+et This section does not prohibit a local governmental
99 entity from withholding retainage at a rate less than 5 ±8-
100 percent of each progress payment, from incrementally reducing
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101 the rate of retainage pursuant to a schedule provided for in the
102 contract, or from releasing at any point all or a portion of any
103 retainage withheld by the local governmental entity which is
104 attributable to the labor, services, or materials supplied by
105 the contractor or by one or more subcontractors or suppliers. If
106 a local governmental entity makes any payment of retainage to
107 the contractor which is attributable to the labor, services, or
108 materials supplied by one or more subcontractors or suppliers,
109 the contractor must shall timely remit payment of such retainage
110 to those subcontractors and suppliers.
111 .1£l+f+- This section does not require the local
112 governmental entity to pay or release any amounts that are the
113 subject of a good faith dispute, the subject of a claim brought
114 pursuant to s. 255.05, or otherwise the subject of a claim or
115 demand by the local governmental entity or contractor.
116 ~+t+- The time limitations set forth in this section for
117 payment of payment requests apply to any payment request for
118 retainage made pursuant to this section.
119 ~-tftt Paragraph (a) does Paragraphs (a) (d) do not apply
120 to construction services purchased by a local governmental
121 entity which are paid for, in whole or in part, with federal
122 funds and are subject to federal grantor laws and regulations or
123 requirements that are contrary to any provision of the Local
124 Government Prompt Payment Act.
125 J.!l+±+ This subsection does not apply to any construction
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126 services purchased by a local governmental entity if the total
127 cost of the construction services purchased as identified in the
128 contract is $200,000 or less.
129 Section 2. Paragraph (f) of subsection (1) of section
130 255.05, Florida Statutes, is amended to read:
131 255.05 Bond of contractor constructing public buildings;
132 form; action by claimants.-
133 (1) A person entering into a formal contract with the
134 state or any county, city, or political subdivision thereof, or
135 other public authority or private entity, for the construction
136 of a public building, for the prosecution and completion of a
137 public work, or for repairs upon a public building or public
138 work shall be required, before commencing the work or before
139 recommencing the work after a default or abandonment, to execute
140 and record in the public records of the county where the
141 improvement is located, a payment and performance bond with a
142 surety insurer authorized to do business in this state as
143 surety. A public entity may not require a contractor to secure a
144 surety bond under this section from a specific agent or bonding
145 company.
146 (f) The Department of Management Services shall adopt
147 rules with respect to all contracts for $200,000 or less, to
148 provide:
149 1. Procedures for retaining up to~ ±8- percent of each
150 request for payment submitted by a contractor and procedures for
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151 determining disbursements from the amount retained on a pro rata
152 basis to laborers, materialmen, and subcontractors, as defined
153 in s. 713.01.
154 2. Procedures for requiring certification from laborers,
155 materialmen, and subcontractors, as defined ins. 713.01, before
156 final payment to the contractor that such laborers, materialmen,
157 and subcontractors have no claims against the contractor
158 resulting from the completion of the work provided for in the
159 contract.
160
161 The state is not liable to any laborer, materialman, or
162 subcontractor for any amounts greater than the pro rata share as
163 determined under this section.
164 Section 3. Subsection (8) of section 255.077, Florida
165 Statutes, is amended to read:
166 255.077 Project closeout and payment of retainage.-
167 (8) If a public entity fails to comply with its
·168 responsibilities to develop the list required under subsection
169 (1) or subsection (2), as defined in the contract, within the
170 time limitations provided in subsection (1), the contractor may
171 submit a payment request for all remaining retainage withheld by
172 the public entity pursuant to s. 255.078. The public entity need
173 not pay or process any payment request for retainage if the
174 contractor has, in whole or in part, failed to cooperate with
175 the public entity in the development of the list or failed to
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176 perform its contractual responsibilities, if any, with regard to
177 the development of the list or i f s . 255.078(3) s. 255.078(6)
178 applies.
179 Section 4. Section 255.078, Florida Statutes, is amended,
180 to read:
181 255.078 Public construction retainage.-
182 (1) With regard to any contract for construction services,
183 a public entity may withhold from each progress payment made to
184 the contractor an amount not exceeding 1 -±-G- percent of the
185 payment as retainage until SO percent completion of such
186 services.
187 (2) After SO percent completion of the construction
188 services purchased pursuant to the contract, the public entity
189 must reduce to 5 percent the amount of retainage withheld from
190 each subsequent progress payment made to the contractor. For
191 purposes of this section, the term "50 percent completion" has
192 the meaning set forth in the contract bet;,een the public entity
193 and the contractor or, if not defined in the contract, the point
194 at which the public entity has enpended 50 percent of the total
195 cost of the construction services purchased as identified in the
196 contract together with all costs associated with e1Eisting change
197 orders and other additions or modifications to the construction
198 services provided for in the contract.
199 (3) After SO percent completion of the construction
200 services purchased pursuant to the contract, the contractor may
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201 elect to withhold retainage froffl payfflents to its subcontractors
202 at a rate higher than§ percent. The specific afflount to be
203 withheld fflust be deterfflined on a case by case basis and fflust be
204 based on the contractor's assessfflent of the subcontractor's past
205 perforfflance, the likelihood that such perforfflance will continue,
206 and the contractor's ability to rely on other safeguards. The
207 contractor shall notify the subcontractor, in writing, of its
208 deterfflination to withhold fflore than§ percent of the progress
209 payfflent and the reasons for fflaking that deterfflination, and the
210 contractor fflay not request the release of such retained funds
211 froffl the public entity.
212 (4) After §0 percent coHlpletion of the construction
213 services purchased pursuant to the contract, the contractor fflay
214 present to the public entity a payfflent request for up to one
215 half of the retainage held by the public entity. The public
216 entity shall proHlptly fflake payfflent to the contractor, unless the
217 public entity has grounds, pursuant to subsection (6), for
218 withholding the paYffient of retainage. If the public entity Hlakes
219 payfflent of retainage to the contractor under this subsection
220 which is attributable to the labor, services, or fflaterials
221 supplied by one or fflore subcontractors or suppliers, the
222 contractor shall tifflely refflit payfflent of such retainage to those
223 subcontractors and suppliers.
224 ill_+s+ Heither This section and fte-r- s. 255.077 do not
225 prohibit prohibits a public entity from withholding retainage at
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226 a rate less than~ ±G- percent of each progress payment, from
227 incrementally reducing the rate of retainage pursuant to a
228 schedule provided for in the contract, or from releasing at any
229 point all or a portion of any retainage withheld by the public
230 entity which is attributable to the labor, services, or
231 materials supplied by the contractor or by one or more
232 subcontractors or suppliers. If a public entity makes any
233 payment of retainage to the contractor which is attributable to
234 the labor, services, or materials supplied by one or more
235 subcontractors or suppliers, the contractor must shall timely
236 remit payment of such retainage to those subcontractors and
237 suppliers.
238 fil-+# Heither This section and fie-rs. 255.077 do not
239 require requires the public entity to pay or release any amounts
240 that are the subject of a good faith dispute, the subject of a
241 claim brought pursuant to s. 255.05, or otherwise the subject of
242 a claim or demand by the public entity or contractor.
243 ~-+-:++ The same time limits for payment of a payment
244 request apply regardless of whether the payment request is for,
245 or includes, retainage.
246 J.21-+8+ Subsection (1) does 8ubseetions (1) (4) do not
247 apply to construction services purchased by a public entity
248 which are paid for, in whole or in part, with federal funds and
249 are subject to federal grantor laws and regulations or
250 requirements that are contrary to any provision of the Florida
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251 Prompt Payment Act.
252 J...§.1_+9+ This section does not apply to any construction
253 services purchased by a public entity if the total cost of the
254 construction services purchased as identified in the contract is
255 $200,000 or less.
256 Section 5. (1) This act does not apply to any contract
257 for construction services which is entered into or is pending
258 approval by a public entity, as defined ins. 255.072, Florida
259 Statutes, or by a local governmental entity, as defined ins.
260 218.72, Florida Statutes, or to any construction services
261 project advertised for bid by the public entity or local
262 governmental entity, on or before October 1, 2020.
263 (2) The amendments made toss. 255.05 and 255.078, Florida
264 Statutes, by this act do not apply to contracts executed under
265 chapter 337, Florida Statutes.
266 Section 6. This act shall take effect October 1, 2020.
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/HB 115 Keep Our Graduates Working Act
SPONSOR(S): Health Quality Subcommittee, Business & Professions Subcommittee, Duran
TIED BILLS: IDEN./SIM. BILLS: CS/SB 356
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Business & Professions Subcommittee 12 Y, 0 N, As Wright Anstead
cs
2) Health Quality Subcommittee 11 Y, 0 N, As Morris McElroy
cs
3) Commerce Committee Wright Hamon
SUMMARY ANALYSIS
Currently, the Florida Department of Health (DOH) is authorized to discipline a health care practitioner's
license for failing to repay a government-backed student loan. Every month, DOH must obtain a list of Florida
health care practitioners who have defaulted on their government-backed student loans from the United States
Department of Health and Human Services (USHHS). Upon learning that a health care practitioner has
defaulted on such a loan, DOH must notify the practitioner that he or she has 45 days to provide DOH with
proof of a new repayment plan, or DOH will issue an emergency order suspending the practitioner's license.
If DOH makes a finding in a disciplinary case that a health care practitioner has defaulted on student a loan,
DOH, at a minimum, must take the following disciplinary action:
• Suspend the practitioner's license until he or she agrees to new payment terms;
• Place the licensee on probation for the duration of the student loan period; and
• Impose a fine equal to 10 percent of the defaulted loan amount.
The bill:
• Prohibits any state authority, including DOH, from denying the issuance of, suspending, or revoking a
professional license based solely on the licensee being delinquent on a payment of or defaulting on his
or her student loans;
• Removes the specific provision allowing DOH to discipline a health care practitioner for failing to repay
a student loan and the associated mandatory discipline;
• Repeals the requirement that DOH must issue an emergency order suspending a health care
practitioner's license for a student loan default, absent timely proof of a new repayment plan; and
• Repeals the requirement that DOH must obtain a monthly list from the USHHS of the health care
practitioners who have defaulted on their student loans.
The bill has an indeterminate fiscal impact on state government. The bill is not expected to have a fiscal impact
on local governments.
The bill provides for an effective date of July 1, 2020.
This document 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:
Current Situation
Student Loans
Student loans are funds that are lent to students or parents to pay for higher education. Student loans
may come from private sources, such as banks or other financial institutions, or from a state or the
federal government. 1
The Office of Student Financial Assistance (OSFA) within the Florida Department of Education (DOE) is
responsible for administering state and federally funded programs and serves as the guarantor agency
for certain federally-backed student loans. 2 The DOE is directed to exert every lawful and reasonable
effort to collect all delinquent unpaid and uncanceled student loans. 3
Increase in Defaults on Student Loans
An estimated 41.5 million Americans owe more than $1.2 trillion in outstanding federal loan debt. This
is more than triple the $340 billion in student loan debt owed by Americans in 2001. 4 With this increase
in student loan debt owed by Americans, there has been an increase in the number of people who are
defaulting on or failing to pay their student loans. For most federal loans, default generally occurs when
a payment has not been made for 270 days. 5 In 2018, 41,013 borrowers who attended Florida schools
ranging from universities to trade schools had defaulted on their federal student loans used to attend
institutions. 6
Professional Licenses
An occupational or professional license is a form of regulation that requires individuals who want to
perform certain types of work, such as contractors and cosmetologists, to obtain permission from the
government to perform the work. 7 Generally, an individual obtains such permission by demonstrating
that they have the designated knowledge, skills, and abilities to perform the work by meeting pre-
determined criteria established by the government, such as work experience and examinations. If the
individual successfully completes the pre-determined criteria, the government issues the individual a
license, which allows them to perform the work. 8
1
Consumer Financal Protection Bureau, Student Loans: Choosing a loan that's right for you, https://www.consumerfinance.gov/paying-
for-college/choose-a-student-loan/#o1 (last visited Dec. 4, 2019).
2 Office of Student Financial Assistance, Mission Statement,
http://www.floridastudentfinancialaid.org/FFELP/mission statemenUmission statement 052606.html (last visited on Nov. 26, 2019).
3
S. 1009.95, F.S.
4 Laura Feiveson, Alvaro Mezza, and Kamila Sommer, Student Loan Debt and Aggregate Consumption Growth, Board of Governors of
the Federal Reserve System, (February 21, 2018), https://www.federalreserve.gov/econres/notes/feds-notes/student-loan-debt-and-
aggregate-consumption-growth-20180221.htm (last visited on Nov. 26, 2019).
5
United States Department of Education, Federal Student Aid, Glossary, Default, https://studentaid.ed.gov/sa/glossary#letter d (last
visited Nov. 26, 2019).
6 Florida Business Daily, 41,013 borrowers in default on studentloans after attending Florida schools, May 17, 2018,
https://flbusinessdaily.com/stories/511416784-41-013-borrowers-in-default-on-student-loans-after-attending-florida-schools (last visited
Nov. 26, 2019).
7 The White House, Occupational Licensing: A Framework for Policymakers, 6 (July 2015)
https://obamawhitehouse.archives.gov/sites/defaulUfiles/docs/licensing report final nonembargo.pdf (last visited on Dec. 30, 2019).
8
Bureau of Labor Statistics, Frequently asked questions about data on certifications and licenses,
https://www.bls.gov/cps/certifications-and-licenses-faqs.htm, (last visited on Nov. 26, 2019).
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Approximately one-quarter of workers nationwide require a license to practice their profession, and an
estimated 28. 7 percent of the Florida workforce requires a license from the state. 9
Disciplining Professional Licenses for Defaulting on Student Loans
In the 1990s, as a result of a rising number of students defaulting on their federally-backed student
loans, the federal government urged state legislators to send a message to students, postsecondary
institutions, and lenders that high levels of default would not be tolerated. The federal government
recommended that states take the following steps to curb student loan default: 10
• Enact a state tax-refund offset program;
• Enact a wage garnishment program;
• Deny professional licenses to defaulters until they take steps towards repayment;
• Screen potential applicants for state jobs to prevent the hiring of loan defaulters who have not
entered into repayment agreements; and
• Ensure that information available to state agencies such as the Department of Motor Vehicles,
the tax department, and the unemployment commission is available to the state's guarantee
agency.
As a result, many states, including Florida, began adopting various forms of disciplinary licensing laws
for defaulting on government-backed student loans. By 2010, about half of the states had some form of
disciplinary licensing laws for defaulting on government-backed student loans. Since then, based on
shifting concerns, there has been a trend to reduce or eliminate such laws. Currently, approximately 15
states, including Florida, still have some form of such laws. 11
Proponents of such disciplinary licensing laws argue that:
• The threat of losing a professional license is powerful tool to ensure borrowers stay current on
their student loans, and as a result, these laws reduce the number borrowers who default;
• It is in the taxpayers' interest to ensure borrowers are repaying their government-backed
student loans because the state or federal government foots the bill if borrowers default; and
• Disciplinary licensing laws do not require people who have defaulted on their student loans to
repay their loans to prevent their licenses from being suspended, only that they enter into a new
repayment plan. 12
Opponents of such disciplinary licensing laws argue that states are using their licensing authority as a
punitive debt collection tool, and that the purpose of licensing laws is to protect the health and safety of
the public, not to operate as defacto debt collectors. 13 Opponents also argue that "if people are unable
to work in their chosen field - the one they went to school for and presumably took out loans to fund -
how can they be expected to pay their debt?" 14
Federal Attempts to Prohibit State Disciplinary Licensing Laws
Recently, there have been attempts at the national level to prohibit state disciplinary licensing laws for
defaulting on government-backed student loans. Bills were introduced in the United States Congress in
9 White House, supra note 7, at 3.
10 Mary Farrell, Reducing Student Loan Defaults: A Plan for Action, Department of Education at 63 (March 21, 1991)
https://files.eric.ed.gov/fulltext/ED323879.pdf (last visited Nov. 26, 2019).
11 Andrew Wagner, Licensing Suspension for Student Loan Forgiveness, NCSL (Oct. 1, 2018) http://www.ncsl.org/research/labor-and-
employment/license-suspension-for-student-loan-defaulters.aspx (last visited Nov. 26, 2019).
12 Jessica Silver-Greenberg, Stacey Cowley, & Natalie Kitroeff, When Unpaid Student Loan Bills Mean You Can No Longer Work, The
New York Times (Nov. 18, 2017) https://www.nytimes.com/2017/11/18/business/student-loans-licenses.html? r=O (last visited on Nov.
26, 2019).
13 Id.
14
Courtney Nagle, Student Loan Debt Could Affect Your Job in 13 States, U.S. News,
https://www.usnews.com/ed ucation/bl ogs/student-1 oan-ranger/articles/2019-04-1 0/these-states-could-revoke-your-professional-l icense-
over-student-loan-debt (last visited Jan. 10, 2020).
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2018 and 2019 that would prohibit states from disciplining or denying state issued licenses for
defaulting on government-backed student loans, but they did not pass. 15
Health Care Practitioner Licensing
The Division of Medical Quality Assurance (MQA) within the Florida Department of Health (DOH) is
responsible for the licensing and regulation of health care practitioners in the state. The MQA works in
conjunction with 22 boards and four councils to license and regulate seven types of health care
facilities and more than 200 license types in over 40 health care professions. Each profession is
regulated by an individual practice act and by ch. 456, F.S., which provides general regulatory and
Ii censure authority for the MQA. 16 The MQA regulates the following profession categories: 17
• Acupuncturists;
• Athletic Trainers;
• Chiropractors;
• Clinical Laboratory Personnel;
• Clinical Social Workers, Marriage and Family Counselors, and Mental Health Counselors;
• Dentists;
• Hearing Aid Specialists;
• Massage Therapists;
• Medical Doctors;
• Nurses;
• Nursing Home Administrators;
• Occupational Therapists;
• Opticians;
• Optometrists;
• Orthotists and Prosthetists;
• Osteopathic Doctors;
• Pharmacists;
• Physical Therapists;
• Podiatrists;
• Psychologists;
• Respiratory Care Practitioners;
• Speech-Language Pathologists and Audiologists;
• Dietetics and Nutrition Practitioners;
• Electrologists;
• Licensed Midwifes;
• Physician Assistants;
• Certified Master Social Workers;
• Emergency Medical Technicians;
• Medical Physicists;
• Paramedics;
• Radiologic Technicians; and
• School Psychologists.
15 Protecting JOBs Act, S.3065, 115th Congress (2017-2018); Protecting JOBs Act, H.R.6156 115th Congress (2017-2018); Protecting
JOBs Act, S.609, 115th Congress (2019-2020).
16 S. 456.001 (4), F.S; Florida Department of Health, Division of Medical Quality Assurance, Annual Report and Long-Range Plan, Fiscal
Year 2018-2019, 6, http://www.floridahealth.gov/licensing-and-regulation/reports-and-publications/ documents/annual-report-1819.pdf
(last visited on Nov. 26, 2019).
17
Id. at 7.
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DOH Disciplinary Licensing Laws
In 2002, Florida passed a law allowing DOH to discipline a health care practitioner's license for
defaulting on a government-backed student loan. The law was founded on the United States
Department of Health and Human Services (USHHS) report that there were 9,454 health care
practitioners in the nation who defaulted on their student loans, 556 of them being in Florida. Those
loan defaults were costing taxpayers over $694 million, of which $45.6 million was attributable to
Florida health care practitioners. 18
Every month, DOH must obtain a list from the United States Department of Health and Human Services
(USHHS) through DOE as it relates to Florida licensed health care practitioners who have defaulted on
government-backed student loans. 19 Upon learning that a health care practitioner has defaulted on
such a student loan, DOH must notify the practitioner that he or she has 45 days to provide DOH with
proof of a new repayment plan, or such practitioner will be subject to an emergency order suspending
the practitioner's license. Also, DOH may proceed with additional disciplinary action against the
practitioner, regardless if he or she provides proof of entering a new repayment plan. 20
Section 456.072(1 )(k), F.S., provides that DOH may discipline a health care practitioner for failing to
perform any statutory or legal obligation placed upon a health care practitioner, which specifically
includes failing to repay a government-backed student loan or comply with a service scholarship
obligation. If DOH finds that a health care practitioner has defaulted on his or her student loans or failed
to comply with a service scholarship, at a minimum, DOH must: 21
• Suspend the practitioner's license until he or she agrees to new loan repayment terms or
resumes the scholarship obligation;
• Place the practitioner on probation for the duration of the student loan or scholarship obligation
period; and
• Impose a fine equal to 10 percent of the defaulted loan amount.
During the 2017-2018 Fiscal Year, DOH handled 247 cases against health care practitioners for
defaulting on student loans, and during the 2018-2019 Fiscal Year, DOH handled 722 cases. 22
Mediated 88 332
Dismissed 27 75
23 36
9 41
Licensee is No Lon er Licensed 54 55
Licensee is Deceased 3 2
Still Open 43 160
0 21
Department of Business and Professional Regulation
The Department of Business and Professional Regulation (DBPR), through several divisions, regulates
and licenses various businesses and professionals in Florida. DBPR has authority over licensees under
the following professional boards and programs: 23
1s Ch. 2002-254, Laws of Fla.
1s S. 456.072(1), F.S.
20
S. 456.074(4), F.S.
21 S. 456.072(1)(k), F.S.
22 Gary Landry, Office of Legislative Planning, Department of Health, Student Loan information as promised (Oct. 30, 2019).
23
S. 20.165, F .S.
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• Board of Architecture and Interior Design;
• Board of Auctioneers;
• Barbers' Board;
• Building Code Administrators and Inspectors Board;
• Construction Industry Licensing Board;
• Board of Cosmetology;
• Electrical Contractors' Licensing Board;
• Board of Employee Leasing Companies;
• Board of Landscape Architecture;
• Board of Pilot Commissioners;
• Board of Professional Geologists;
• Board of Veterinary Medicine;
• Home inspection services licensing program;
• Mold-related services licensing program;
• Florida Board of Professional Engineers;
• Board of Accountancy;
• Florida Real Estate Commission; and
• Florida Real Estate Appraisal Board.
DBPR licenses and regulates each of the above professions in accordance with that profession's
practice act, and ch. 455, F.S., which provides general regulatory and licensure authority for DBPR. 24
Section 455.227, F.S., provides that DBPR may discipline a licensee for failing to perform any statutory
or legal obligation placed upon a licensee. However, 455.227, F.S., does not specifically state that
DBPR may discipline a licensee for defaulting on a student loan. According to DBPR, they have never
disciplined a licensee for defaulting on a student loan. 25
Department of Agriculture and Consumer Services
In addition to regulating agriculture in Florida, the Department of Agriculture and Consumer Services
(DACS) protects consumers from unfair and deceptive business practices and provides consumer
information. 26 DACS achieves this, in part, through licensing and registering various professionals,
including:
• Professional Surveyors and Mappers;
• Private Investigative, Private Security, and Repossession Services;
• Health Studios;
• Telemarketing Services;
• Intrastate Movers and Brokers;
• Sellers of Liquefied Petroleum Gas;
• Pawnbrokers;
• Motor Vehicle Repair Shops; and
• Sellers of Travel.
DACS licenses and regulates each of the above professionals in accordance with that profession's
practice act. According to DACS, they do not have authority to discipline a licensee for defaulting on
student loans. 27
24 fd.
25 Colton Madill, Office of Legislative Affairs, Department of Business and Professional Regulation, RE: HB 115 (Oct. 30, 2019).
26 S. 20.14(2), F.S.
27 Florida Department of Agriculture and Consumer Services, Agency Analysis of 2020 House Bill 115, p. 2 (Sept. 9, 2019).
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Department of Financial Services
The Department of Financial Services (DFS) is the state agency responsible for regulation and
licensure of professions related to insurance, fire safety, and funeral and cemetery services. 28
According to DFS, they do not consider the status of student loans when issuing or regulating licenses,
and do not believe they have statutory authority to deny or discipline a license for defaulting on a
government issued student loan. 29
Effect of the Bill
The bill provides definitions for the following terms as they relate to a broad prohibition on licensing
discipline for student loans defaults:
• "Default" means the failure to repay a student loan according to the terms agreed to in the
promissory note.
• "Delinquency" means the failure to make a student loan payment when it is due.
• "License" means any professional license, certificate, registration, or permit granted by the
applicable state authority.
• "State authority" means any department, board, or agency with the authority to grant a license
to any person in this state.
• "Student loan" means a federal-guaranteed or state-guaranteed loan for the purposes of
postsecondary education.
The bill prohibits any state authority from denying the issuance of, suspending, or revoking a license
that it issued to a person who is in default on or delinquent in the payment of his or her student loans
based solely on such default or delinquency. The bill requires DOE to comply with this provision when
making an effort to collect on student loans.
The bill, related only to health care practitioners:
• Specifically states that failing to repay a government-backed student loan is not a basis for DOH
finding that a health care practitioner has committed a punishable offense by failing to perform a
statutory or legal obligation placed on the licensee;
• Removes the specific provision allowing DOH to discipline a health care practitioner for failing to
comply with a scholarship obligation and the associated mandatory disciplinary action;
• Repeals the requirement that DOH must issue an emergency order suspending a health care
practitioner's license for a student loan default absent timely proof of a new repayment plan; and
• Repeals the requirement that DOH must obtain a monthly list from the USHHS of the Florida
health care practitioners who have defaulted on their student loans.
The bill provides an effective date of July 1, 2020.
8. SECTION DIRECTORY:
Section 1 Creates s. 120.82, F.S., prohibiting a state authority from disciplining a professional
license in certain situations.
Section 2 Amends s. 456.072, F.S., prohibiting DOH from disciplining a health care practitioner's
license in certain situations.
Section 3 Repeals s. 456.0721, F.S., relating to an obligation to receive a report of practitioners in
default of student loans.
28 Chs. 497, 626, 633, and 648, F.S.
29 Email from Greg Thomas, Director of Insurance Agent & Agency Services, Department of Financial Services, Student Loan Default
and DFS Agent and Agency Licensing, (Mar. 18, 2019).
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Section 4 Amends s. 456.074, F.S., relating to DOH's ability to immediately suspend a health care
practitioner's license in certain situations.
Section 5 Amends s. 1009.95, F.S., requiring DOE to comply s. 120.82, F.S.
Section 6 Provides an effective date of July 1, 2020.
11. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
See Fiscal Comments.
2. Expenditures:
See Fiscal Comments.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Health care practitioners will no longer be subject to suspension, revocation, or emergency suspension
orders solely for defaulting on their student loans, which may allow them to obtain or maintain gainful
employment.
D. FISCAL COMMENTS:
According to DOH, they will experience a recurring decrease in revenue due to the loss of the
mandated 10% fine imposed on student loan default cases. However, DOH will experience a recurring
reduction in workload and cost due to fewer investigations and prosecutions. Additionally, the
Compliance Management Unit will no longer have to track licensees on probation due to discipline
imposed by a board. 30
Ill. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
None.
2. Other:
None.
30 Department of Health, Agency Analysis of 2020 House Bill 115, p. 4 (Oct. 11, 2019).
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B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
On November 6, 2019, the Business & Professions Subcommittee adopted a strike-all amendment and
reported the bill favorably as a committee substitute. The amendment:
• Moves a provision in the bill to the Administrative Procedure Act;
• Clarifies the general purpose contained in the bill; and
• Conforms a cross-reference.
On December 11, 2019, the Health Quality Subcommittee adopted an amendment and reported the bill
favorably as a committee substitute. The amendment prohibits a state authority from denying an individual a
professional license based solely upon the individual being delinquent or defaulting on their student loan.
This analysis is drafted to the committee substitute as passed by the Health Quality Subcommittee.
STORAGE NAME: h0115d.COM.DOCX PAGE: 9
DATE: 1/7/2020
FLORIDA H O U S E 0 F REPRESENTATIVES
CS/CS/HB 115 2020
1 A bill to be entitled
2 An act relating to Keep Our Graduates Working Act;
3 creating s. 120.82, F.S.; providing a short title;
4 providing a purpose; providing definitions;
5 prohibiting a state authority from denying a license
6 or suspending or revoking a license on the basis of a
7 delinquency or default in the payment of his or her
8 student loan; amending s. 456.072, F.S.; conforming
9 provisions to changes made by the act; repealing s.
10 456.0721, F.S., relating to health care practitioners
11 in default on student loan or scholarship obligations;
12 amending ss. 456.074 and 1009.95, F.S.; conforming
13 provisions to changes made by the act; providing an
14 effective date.
15
16 Be It Enacted by the Legislature of the State of Florida:
17
18 Section 1. Section 120.82, Florida Statutes, is created to
19 read:
20 120.82 Keep Our Graduates Working Act.-
21 (1) SHORT TITLE.-This section may be cited as the "Keep
22 Our Graduates Working Act of 2020."
23 (2) PURPOSE.-The purpose of this act is to ensure that
24 Floridians who graduate from an accredited college or university
25 can maintain their occupational licenses, as defined in
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hb0115-02-c2
FLORIDA H O U S E 0 F REPRESENTATIVES
CS/CS/HB 115 2020
26 subsection (3), and remain in the workforce while they attempt
27 to pay off their student loan debt.
28 (3) DEFINITIONS.-As used in this section, the term:
29 (a} "Default" means the failure to repay a student loan
30 according to the terms agreed to in the promissory note.
31 (b} "Delinquency" means the failure to make a student loan
32 payment when it is due.
33 (c} "License" means any professional license, certificate,
34 registration, or permit granted by the applicable state
35 authority.
36 (d) "State authority" means any department, board, or
37 agency with the authority to grant a license to any person in
38 this state.
39 (e} "Student loan" means a federal-guaranteed or state-
40 guaranteed loan for the purposes of postsecondary education.
41 (4) STUDENT LOAN DEFAULT; DELINQUENCY.-A state authority
42 may not deny a license or suspend or revoke a license that it
43 has issued to a person who is in default on or delinquent in the
44 payment of his or her student loans solely on the basis of such
45 default or delinquency.
46 Section 2. Paragraph (k) of subsection (1) of section
47 456.072, Florida Statutes, is amended to read:
48 456.072 Grounds for discipline; penalties; enforcement.-
49 (1) The following acts shall constitute grounds for which
50 the disciplinary actions specified in subsection (2) may be
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FLORIDA H O U S E 0 F R E P R E S E N T A T I V E S
CS/CS/HB 115 2020
51 taken:
52 (k} Failing to perform any statutory or legal obligation
53 placed upon a licensee. For purposes of this section, failing to
54 repay a student loan issued or guaranteed by the state or the
55 Federal Government in accordance with the terms of the loan is
56 not or failing to comply with service scholarship obligations
57 shall be considered a failure to perform a statutory or legal
58 obligation, and the fflinifflUffi disciplinary action imposed shall be
59 a suspension of the license until ner.J paYffient terffis are agreed
60 upon or the scholarship obligation is resu.ffled, followed by
61 probation for the duration of the student loan or refflaining
62 scholarship obligation period, and a fine equal to 10 percent of
63 the defaulted loan affiount. Fines collected shall be deposited
64 into the Medical Quality Assurance Trust Fund.
65 Section 3. Section 456.0721, Florida Statutes, is
66 repealed.
67 Section 4. Subsection (4) of section 456.074, Florida
68 Statutes, is amended to read:
69 456.074 Certain health care practitioners; immediate
70 suspension of license.-
71 (4) Upon receipt of inforfflation that a Florida licensed
72 health care practitioner has defaulted on a student loan issued
73 or guaranteed by the state or the Federal Governffient, the
74 department shall notify the licensee by certified ffiail that he
75 or she shall be subject to iffiffiediate suspension of license
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hb0115-02-c2
FLORIDA H O U S E 0 F REPRESENTATIVES
CS/CS/HB 115 2020
76 unless, within 45 days after the date of mailing, the licensee
77 provides proof that new payment terms have been agreed upon by
78 all parties to the loan. The department shall issue an emergency
79 order suspending the license of any licensee \1ho, after 45 days
80 following the date of mailing from the department, has failed to
81 provide such proof. Production of such proof shall not prohibit
82 the department from proceeding with disciplinary action against
83 the licensee pursuant to s. 456.073.
84 Section 5. Subsection (1) of s. 1009.95, Florida Statutes,
85 is amended to read:
86 1009.95 Delinquent accounts.-
87 (1) The Department of Education is directed to exert every
88 lawful and reasonable effort to collect all delinquent unpaid
89 and uncanceled scholarship loan notes, student loan notes, and
90 defaulted guaranteed loan notes; however, in all such efforts,
91 the department shall comply withs. 120.82.
92 Section 6. This act shall take effect July 1, 2020.
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hb0115-02-c2
COMMERCE COMMITTEE
HB 115 by Rep. Duran
Keep Our Graduates Working Act
AMENDMENT SUMMARY
January 16, 2020
Amendment 1 by Rep. Duran (Line 42):
The amendment:
• adds "refuse to renew a license" to the list of actions prohibited by state licensing
authorities, and
• clarifies that the bill's provisions apply when a health practitioner is on the U.S.
Department of Health and Human Services' List of Excluded Individuals and Entities
solely for a delinquency or default on a student loan.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 115 (2020)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/0 OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Duran offered the following:
3
4 Amendment
5 Remove lines 42-45 and insert:
6 may not deny a license, refuse to renew a license, or suspend or
7 revoke a license that it has issued to a person who is in
8 default on or delinquent in the payment of his or her student
9 loans solely on the basis of such default or delinquency.
10 Section 2. Paragraph (e) of subsection 2 and paragraph (e)
11 of subsection (3) of section 456.0635, Florida Statutes, are
12 amended to read:
13 (2) Each board within the jurisdiction of the department,
14 or the department if there is no board, shall refuse to admit a
15 candidate to any examination and refuse to issue a license,
16 certificate, or registration to any applicant if the candidate
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Page 1 of 3
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 115 (2020)
Amendment No. 1
17 or applicant or any principal, officer, agent, managing
18 employee, or affiliated person of the candidate or applicant:
19 (e) Is currently listed on the United States Department of
20 Health and Human Services Office of Inspector General's List of
21 Excluded Individuals and Entities, except when such applicant is
22 listed solely based on a default or delinquency on a student
23 loan as provided ins. 120.82.
24
25 This subsection does not apply to an applicant for initial
26 licensure, certification, or registration who was arrested or
27 charged with a felony specified in paragraph (a) or paragraph
28 (b) before July 1, 2009.
29 (3) The department shall refuse to renew a license,
30 certificate, or registration of any applicant if the applicant
31 or any principal, officer, agent, managing employee, or
32 affiliated person of the applicant:
33 (e) Is currently listed on the United States Department of
34 Health and Human Services Office of Inspector General's List of
35 Excluded Individuals and Entities, except when such applicant is
36 listed solely based on a default or delinquency on a student
37 loan as provided ins. 120.82.
38
39 This subsection does not apply to an applicant for renewal of
40 licensure, certification, or registration who was arrested or
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Page 2 of 3
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 115 (2020)
Amendment No. 1
41 charged with a felony specified in paragraph (a) or paragraph
42 (b) before July 1, 2009.
43
269353 - h115-line42.docx
Published On: 1/15/2020 4:56:45 PM
Page 3 of 3
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL#: CS/HB 269 Loss Run Statements
SPONSOR(S): Insurance & Banking Subcommittee, Insurance & Banking Subcommittee; Perez
TIED BILLS: IDEN./SIM. BILLS: CS/SB 292
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 14 Y, 0 N, As CS Fortenberry Cooper
2) Commerce Committee Fortenber Hamon
SUMMARY ANALYSIS
A loss run statement is a report from an insurer that shows how many claims a specific insured has filed under
that insured's policy during a particular period of time. It may be provided to a prospective insurer when an
insured is shopping for a new insurance policy so that the prospective insurer can determine whether to write a
policy for the prospective insured and what premium to charge for that policy. Loss run statements typically
contain claims history for three to five years.
While insureds may request loss run statements for any line of insurance, insureds seeking new general
commercial line policies often request these statement to shop for new insurance. Some insurers have
existing loss runs systems that allow their insureds to log into a portal and to obtain their own detailed reports
on claims. However, other insurers, may provide insureds with loss run statements that they have created
upon request or direct the insureds to obtain such statements from their agents of record.
Often, personal lines loss history can be obtained from public sources, but these publicly available reports may
not be completely accurate. Additionally, commercial and health insurance data are not readily available from
public sources. While insurers routinely provide loss run information to insureds, Florida has no existing
statutory framework regarding when or how insurers must provide this information to insureds. Approximately
11 other states currently have statutory requirements for insurers providing loss run statements to insureds.
The bill establishes a statutory framework for an insurance practice that routinely occurs. The bill defines "loss
run statement" as a report that contains the policy number, the period of coverage, the number of claims, the
paid losses on all claims, and the date of each loss. The bill defines "provide" as electronically sending a
document, or allowing access through an electronic portal to review or generate a document. It also specifies
what is not included in a loss run statement.
The bill provides that, for all lines of insurance, an insurer shall provide a loss run statement to an insured
within 15 calendar days after receipt of a written request. The loss run statement provided must be a five-year
loss run history for five continuous years before the year in which the insured makes the request, or the
complete loss run history if it is less than five years. The bill requires that the insurer notify the insured's agent
of record that it provided the loss run statement to the insured at the time that the insurer provided it. The bill
also prohibits an insurer from charging an insured for the first loss run statement that an insured requests each
year. The bill imposes identical requirements to provide loss run statements to insureds whether the insurers
are authorized insurers, eligible surplus lines insurers, or unauthorized insurers permitted to issue policies.
The bill has no impact on state or local government revenues and expenditures. It also may have a positive
direct economic impact on the private sector.
This bill has an effective date of January 1, 2021.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0269b.COM.DOCX
DATE: 1/14/2020
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
A loss run statement 1 is a report from an insurer that shows how many claims a specific insured has
filed under that insured's policy during a particular period of time. 2 This report can be provided to a
prospective insurer when an insured is shopping for a new insurance policy. 3 The prospective insurer
can use the loss run statement to review the types, frequency, and dollar value of prior claims in order
to determine whether to write a policy for the prospective insured and what premium to charge for that
policy. 4 Prospective insurers often want to review loss run statements showing a loss run history from
three to five years to make decisions about writing insurance policies. 5
While insureds may request loss run statements for any line of insurance, insureds seeking new
general liability, business owner's, commercial property, commercial auto insurance, or workers'
compensation insurance, often request them to shop for new insurance6 upon cancelation or
nonrenewal of a policy by an insurer or when the insured chooses to shop for new insurance at the time
a policy is up for renewal. Some insurers, especially those providing commercial lines coverage or
workers' compensation insurance, have existing loss runs systems that allow their insureds to log into a
portal and to obtain their own detailed reports on claims. 7 However, other insurers, in these and other
lines of insurance, may provide insureds with loss run statements that they have created upon request
or direct the insureds to obtain such statements from their agents of record.
Often, personal lines loss history can be obtained from public sources. A Comprehensive Loss
Underwriting Exchange, or CLUE, report is a claims report generated by the consumer-reporting
agency, LexisNexis. 8 A CLUE report contains claims information reported by insurers for all personal
auto and personal property claims in which they pay money, set up a file for a possible claim, or deny a
claim. 9 Yet, CLUE reports and other publicly available reports, may not be completely accurate. 10
Additionally, commercial and health insurance data are not readily available from public sources.
While insurers routinely provide loss run information to insureds, Florida has no existing statutory
framework regarding when or how insurers much provide this information to insureds. Approximately
11 other states currently have statutory requirements for insurers providing loss run statements to
insureds. 11
1 Loss run statements are also referred to as loss runs or loss run reports.
2
Insureon, https://www.insureon.com/insurance-glossary/loss-runs (last visited Oct. 31, 2019).
3 Id.
4 Id.
5 Id.
6 Id.
7
See, e.g., MSIG Loss Runs, https://www.msigusa.com/loss-runs/ and StarStone,
http://myaccount.starstoneworkcomp.com/index.htm (last visited Oct. 31, 2019).
8
Office of the Insurance Commissioner Washington State, https://www.insurance.wa.gov/clue-comprehensive-loss-underwriting-
exchange (last visited Oct. 31, 2019).
9 Id.
10
Information reported by Florida Association of Insurance Agents, which is a nonprofit trade association and a proponent of this bill.
11
See, e.g., Okla. Stat. Ann. 36, § 1204.1, which provides that loss runs or claims history must be made available within 30 days of a
written request, and Ky. Rev. Stat. Ann. §304.20-100, which provides that a five-year loss run history must be made available within
20 days following a written request.
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DATE: 1/14/2020
Effect of the Bill
The bill establishes a statutory framework for a practice that routinely occurs in the insurance industry.
The bill defines "loss run statement" as a report that contains the policy number, the period of
coverage, the number of claims, the paid losses on all claims, and the date of each loss. This definition
also specifies that "loss run statement" does not include supporting claim file documentation, such as
copies of claim files, investigation reports, evaluation statements, insureds' statements, and documents
protected by common law or statutory privilege. The bill defines "provide" as electronically sending a
document, or allowing access through an electronic portal to review or generate a document.
The bill provides that, for all lines of insurance, an insurer shall provide a loss run statement to an
insured within 15 calendar days after receipt of a written request from that insured, but is not required
to provide it more frequently than once per policy period. The loss run statement that the insurer
provides must be a five-year loss run history for five continuous years before the year in which the
insured makes the request, or the complete loss run history if it is less than five years. The bill requires
that the insurer notify the insured's agent of record that it provided the loss run statement to the insured
at the time that the insurer provided it. The bill establishes that no insurer shall be required to provide
loss reserve information as part of a loss run statement. The bill also prohibits an insurer from charging
an insured for the first loss run statement that an insured requests annually.
The bill imposes identical requirements on insurers to provide loss run statements to insureds
regardless of whether the insurers are authorized insurers 12 , eligible surplus lines insurers 13 , or
unauthorized insurers permitted by the Florida Office of Insurance Regulation (OIR) to issue policies
under certain circumstances 14 .
B. SECTION DIRECTORY:
Section 1. Creates s. 626.9202, F.S., relating to loss run statements for all lines of insurance.
Section 2. Creates s. 627.0622, F.S., relating to loss run statements for all lines of insurance.
Section 3. Provides an effective date of January 1, 2021.
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:
12
An authorized insurer is one authorized by a certificate of authority issued by OIR to transact insurance business in Florida. S.
624.09, F.S.
13
Chapter 626, part VIII, F.S., sets forth the criteria under which surplus lines carriers may write insurance policies in Florida.
14
Section 626.918(5) and (6), F.S., establishes the circumstances under which an otherwise unauthorized insurer may issue an
insurance policy in Florida.
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DATE: 1/14/2020
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Because most insurers likely already provide loss run statements to insureds upon request or via an
electronic portal, or they can easily create them, the bill codifies an existing practice and should not
place a financial burden upon insurers. The bill may benefit consumers as they may be able to obtain
premium discounts if they are able to use loss run statements to show prospective insurers that they
have no claim history for a certain period of time.
D. FISCAL COMMENTS:
None.
Ill. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill neither authorizes nor requires administrative rulemaking.
C. DRAFTING ISSUES OR OTHER COMMENTS:
OIR has pointed out in its analysis of the bill that "provide" is defined only to include electronic access
or delivery. 15 Because s. 627.421(1), F.S., allows insureds to receive "policy documents" via mail, the
bill may conflict with existing law if loss run statements are considered "policy documents."
Line 74 of the bill contains the word "annually." It is unclear whether this means per calendar year or
on a rolling 12-month basis beginning when an insured makes a request for a loss run statement.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
On November 6, 2019, the Insurance & Banking Subcommittee considered the bill, adopted one strike all
amendment, and reported the bill favorably as a committee substitute. The committee substitute
maintained the intent of the originally filed bill and made the following modifications and clarifications to the
bill:
• Changed the definition of "loss run statement" so that it more precisely defines what must be included
in a loss run statement. In addition, it specifies what is not included.
• Established that any insurer is only required to provide an insured with a loss run statement once per
policy period.
• Established that no insurer shall be required to provide loss reserve information as part of a loss run
statement.
• Clarified that a workers' compensation insurer may not charge for providing a loss run statement to an
insured. This resolved a question regarding a potential conflict with existing workers' compensation
statutes.
15
Florida Office oflnsurance Regulation, Agency Analysis of2020 House Bill 269, p. 5 (Oct. 31, 2019).
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DATE: 1/14/2020
• Placed provisions relating to authorized insurers in a different location in statutes than the bill.
• Made various formatting and technical changes.
The staff analysis has been updated to reflect the committee substitute.
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DATE: 1/14/2020
FLORIDA H O U S E 0 F REPRESENTATIVES
CS/HB 269 2020
1 A bill to be entitled
2 An act relating to loss run statements; creating ss.
3 626.9202 and 627.0622, F.S.; providing definitions;
4 requiring insurers to provide loss run statements to
5 insureds within a specified timeframe; providing
6 notification requirements; providing claims history
7 requirements for loss run statements; prohibiting
8 insurers from being required to provide loss reserve
9 information; prohibiting fees under certain
10 circumstances; providing an effective date.
11
12 Be It Enacted by the Legislature of the State of Florida:
13
14 Section 1. Section 626.9202, Florida Statutes, is created
15 to read:
16 626.9202 Loss run statements for all lines of insurance.-
17 (1) As used in this section, the term:
18 (a) "Loss run statement" means a report that contains the
19 policy number, the period of coverage, the number of claims, the
20 paid losses on all claims, and the date of each loss. The term
21 does not include supporting claim file documentation, including,
22 but not limited to, copies of claim files, investigation
23 reports, evaluation statements, insureds' statements, and
24 documents protected by a common law or statutory privilege.
25 (b) "Provide" means to electronically send a document, or
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FLORIDA H O U S E 0 F REPRESENTATIVES
CS/HB 269 2020
26 to allow access through an electronic portal to view or generate
27 a document.
28 (2) Notwithstanding any other law, an insurer shall
29 provide a loss run statement to an insured within 15 calendar
30 days after receipt of the insured's written request, but in no
31 event more frequently than once per policy period.
32 (3) At the time the loss run statement is provided to the
33 insured, the insurer shall notify the agent of record that the
34 loss run statement was provided to the insured.
35 (4) A loss run statement provided pursuant to this section
36 must contain a claims history with the insurer for the preceding
37 5 years or, if the claims history is less than 5 years, a
38 complete claims history with the insurer.
39 (5) Notwithstanding any other provision of this section,
40 an insurer may not be required to provide loss reserve
41 information.
42 (6) Notwithstanding any other law, an insurer may not
43 charge any fee to prepare and provide annually one loss run
44 statement in accordance with this section.
45 Section 2. Section 627.0622, Florida Statutes, is created
46 to read:
47 627.0622 Loss run statements for all lines of insurance.-
48 (1) As used in this section, the term:
49 (a) "Loss run statement" means a report that contains the
50 policy number, the period of coverage, the number of claims, the
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FLORIDA H O U S E 0 F REPRESENTATIVES
CS/HB 269 2020
51 paid losses on all claims, and the date of each loss. The term
52 does not include supporting claim file documentation, including,
53 but not limited to, copies of claim files, investigation
54 reports, evaluation statements, insureds' statements, and
55 documents protected by a common law or statutory privilege.
56 (b} "Provide" means to electronically send a document, or
57 to allow access through an electronic portal to view or generate
58 a document.
59 (2) Notwithstanding any other law, an insurer shall
60 provide a loss run statement to an insured within 15 calendar
61 days after receipt of the insured's written request, but in no
62 event more frequently than once per policy period.
63 (3) At the time the loss run statement is provided to the
64 insured, the insurer shall notify the agent of record that the
65 loss run statement was provided to the insured.
66 (4) A loss run statement provided pursuant to this section
67 must contain a claims history with the insurer for the preceding
68 5 years or, if the claims history is less than 5 years, a
69 complete claims history with the insurer.
70 (5) Notwithstanding any other provision of this section,
71 an insurer may not be required to provide loss reserve
72 information.
73 (6) Notwithstanding any other law, an insurer may not
74 charge any fee to prepare and provide annually one loss run
75 statement in accordance with this section.
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FLORIDA H O U S E 0 F REPRESENTATIVES
CS/HB 269 2020
76 Section 3. This act shall take effect January 1, 2021.
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hb0269-01-c1
COMMERCE COMMITTEE
CS/HB 269 by Rep. Perez
Loss Run Statements
AMENDMENT SUMMARY
January 16, 2020
Amendment 1 by Rep. Perez (strike-all): The strike-all amendment maintains the intent of the
current version of the bill, but establishes that within 15 calendar days of a insured's request for
a loss run statement, an insurer must provide to the insured either the loss run statement or, for
personal lines of insurance, information on how to obtain a loss run statement from a consumer
reporting agency at no charge. The strike-all amendment further establishes that an insured
may request a loss run statement from an insurer after receiving information from a consumer
reporting agency. If such request is made, an insurer must fulfill it within 15 calendar days.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 269 (2020)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/0 OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Perez offered the following:
3
4 Amendment (with title amendment)
5 Remove everything after the enacting clause and insert:
6 Section 1. Section 626.9202, Florida Statutes, is created
7 to read:
8 626.9202 Loss run statements for all lines of insurance.-
9 (1) As used in this section, the term:
10 (a) "Loss run statement" means a report that contains the
11 policy number, the period of coverage, the number of claims, the
12 paid losses on all claims, and the date of each loss. The term
13 does not include supporting claim file documentation, including,
14 but not limited to, copies of claim files, investigation
15 reports, evaluation statements, insureds' statements, and
16 documents protected by a common law or statutory privilege.
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Page 1 of 5
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 269 (2020)
Amendment No. 1
17 (b) "Provide" means to electronically send a document, or
18 to allow access through an electronic portal to view or generate
19 a document.
20 (2) Notwithstanding any other law, an insurer shall
21 provide to an insured within 15 calendar days after receipt of
22 the insured's written request, either:
23 (a) A loss run statement; or
24 (b) For personal lines of insurance, information on how to
25 obtain a loss run statement at no charge through a consumer
26 reporting agency. However, this section does not prohibit an
27 insured from requesting a loss run statement after receiving
28 information from a consumer reporting agency, and the insurer
29 must then provide such loss run statement within 15 calendar
30 days after receipt of the insured's written request.
31
32 For the purpose of this subsection, the term "receipt" means
33 receipt by an individual or entity designated by an insurer to
34 receive loss run statement requests.
35 (3) At the time the loss run statement is provided to the
36 insured, the insurer shall notify the agent of record that the
37 loss run statement was provided to the insured.
38 (4) A loss run statement provided pursuant to this section
39 must contain a claims history with the insurer for the preceding
40 5 years or, if the claims history is less than 5 years, a
41 complete claims history with the insurer.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 269 (2020)
Amendment No. 1
42 (5) Notwithstanding any other provision of this section,
43 an insurer is not required to provide loss reserve information.
44 (6) Notwithstanding any other law, an insurer may not
45 charge any fee to prepare and provide annually one loss run
46 statement in accordance with this section.
47 Section 2. Section 627.444, Florida Statutes, is created
48 to read:
49 627.444 Loss run statements for all lines of insurance.-
50 (1) As used in this section, the term:
51 (a) "Loss run statement" means a report that contains the
52 policy number, the period of coverage, the number of claims, the
53 paid losses on all claims, and the date of each loss. The term
54 does not include supporting claim file documentation, including,
55 but not limited to, copies of claim files, investigation
56 reports, evaluation statements, insureds' statements, and
57 documents protected by a common law or statutory privilege.
58 (b) "Provide" means to electronically send a document, or
59 to allow access through an electronic portal to view or generate
60 a document.
61 (2) Notwithstanding any other law, an insurer shall
62 provide to an insured within 15 calendar days after receipt of
63 the insured's written request, either:
64 (a) A loss run statement; or
65 (b) For personal lines of insurance, information on how to
66 obtain a loss run statement at no charge through a consumer
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Page 3 of 5
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 269 (2020)
Amendment No. 1
67 reporting agency. However, this section does not prohibit an
68 insured from requesting a loss run statement after receiving
69 information from a consumer reporting agency, and the insurer
70 must then provide such loss run statement within 15 calendar
71 days after receipt of the insured's written request.
72
73 For the purpose of this subsection, the term "receipt" means
74 receipt by an individual or entity designated by an insurer to
75 receive loss run statement requests.
76 (3) At the time the loss run statement is provided to the
77 insured, the insurer shall notify the agent of record that the
78 loss run statement was provided to the insured.
79 (4) A loss run statement provided pursuant to this section
80 must contain a claims history with the insurer for the preceding
81 5 years or, if the claims history is less than 5 years, a
82 complete claims history with the insurer.
83 (5) Notwithstanding any other provision of this section,
84 an insurer is not required to provide loss reserve information.
85 (6) Notwithstanding any other law, an insurer may not
86 charge any fee to prepare and provide annually one loss run
87 statement in accordance with this section.
88 Section 3. This act shall take effect January 1, 2021.
89
90
91 T I T L E A ME N D ME N T
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 269 (2020)
Amendment No. 1
92 Remove everything before the enacting clause and insert:
93 A bill to be entitled
94 An act relating to loss run statements; creating ss.
95 626.9202 and 627.444, F.S.; providing definitions;
96 requiring insurers to provide loss run statements or
97 specified information to insureds within a specified
98 timeframe under certain circumstances; providing
99 construction; providing notification requirements;
100 providing claims history requirements for loss run
101 statements; providing that insurers are not required
102 to provide loss reserve information; prohibiting fees
103 under certain circumstances; providing an effective
104 date.
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL#: HB 329 Insurance Guaranty Associations
SPONSOR(S): Smith, D.
TIED BILLS: IDEN./SIM. BILLS: SB 540
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 14 Y, 0 N Fortenberry Cooper
2) Government Operations & Technology 8 Y, 0 N Helpling Topp
Appropriations Subcommittee
3) Commerce Committee
SUMMARY ANALYSIS
Florida law provides for guaranty associations to ensure policyholders of insolvent insurers are protected with
respect to insurance premiums paid and settlement of outstanding claims. Florida has four guaranty
associations including the Florida Insurance Guaranty Association (FIGA) and the Florida Workers'
Compensation Insurance Guaranty Association (FWCIGA).
FIGA assumes the rights and duties of insolvent Florida insurers, including claims adjusting. Claims filed with
a liquidated foreign insurer are referred to that state's guaranty association for handling. FIGA handles claims
involving insolvent Florida insurers and claims on Florida policies issued by liquidated foreign insurers. It may
be efficient for the employees of another state's guaranty association to be involved in adjusting a Florida
claim. The bill allows those employees to adjust Florida claims without being licensed adjusters, if authorized
by the contract between FIGA and the other state's guaranty association. It also allows FIGA employees to
adjust claims without being licensed adjusters.
If an insurer's assets are insufficient to pay all claims, FIGA can issue post-insolvency assessments against
property and casualty insurers to obtain funds to pay the remaining claims. The bill clarifies that the
assessment due from member insurers will be a uniform percentage of premium collected instead of based on
a proportion of the total net direct written premium for the prior calendar year. The bill establishes that
assessment installment payments made by FIGA members may be made quarterly rather than monthly.
FWCIGA assumes the right and duties of the insolvent Florida workers' compensation insurers or self-
insurance funds and pays the claims of its policyholders. FWCIGA is funded through the liquidation of
insolvent insurers, potentially including a portion of the estates of insolvent insurers in other states. FWCIGA
has the authority to levy assessments on workers' compensation insurers if insolvent insurers' estates are
insufficient to pay claims. This bill provides additional changes to the assessment methods that were amended
significantly in 2016 to conform them to workers' compensation industry standards.
The bill clarifies the method by which assessments are levied against insurers and collected by FWCIGA
related to policy deductibles and to retrospectively rated policies. The bill provides the authority for FWCIGA to
audit reports from insurers regarding the payments made to FWCIGA and the amounts collected from
policyholders. It provides that assessments paid that are required to be remitted by the insurer prior to
surcharging policyholders constitute advances of funds to FWCIGA to allow for proper accounting treatment.
The bill also makes other technical and structural changes to the statutes controlling FIGA and FWCIGA.
This bill does not impact local or state government revenues or expenditures. It has positive and negative
direct economic impacts on the private sector (See Fiscal Analysis & Economic Impact Statement).
This bill has an effective date of July 1, 2020.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0329d.C0M.D0CX
DATE: 1/13/2020
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Guaranty Associations
Under federal law, insurance companies cannot file for bankruptcy. 1 Instead, they are either
rehabilitated or liquidated by their state of domicile. Florida law establishes the system for the
treatment of impaired or insolvent insurers2 in Florida and sets up guaranty payments where
necessary. 3 Florida law provides for guaranty associations to ensure policyholders of insolvent
insurers are protected with respect to insurance premiums paid and settlement of outstanding claims,
up to limits provided by law. 4 A guaranty association is a not-for-profit corporation created by law and
directed to protect policyholders from financial losses and delays in claims payment and settlements
due to the insolvency of an insurer. 5 Insurers are required to participate in the guaranty associations as
a condition of transacting insurance business in Florida. Florida operates four guaranty associations
including the Florida Insurance Guaranty Association (FIGA) 6 and the Florida Workers' Compensation
Insurance Guaranty Association (FWCIGA)7.
Florida Insurance Guaranty Association
FIGA provides a "mechanism for the payment of covered claims under certain insurance policies to
avoid excessive delay in payment and to avoid financial loss to claimants or policyholders because of
the insolvency of an insurer." 8 It issues guaranty fund payments and provides related services for all
lines of property and casualty insurance with certain exceptions. 9 When a Florida property and
casualty insurer becomes insolvent, FIGA takes over the claims of that insurer and pays the claims of
its policyholders, ensuring that policyholders are not left with unpaid claims. FIGA obtains funds to pay
the claims of insolvent insurers located in Florida from the liquidation of the assets of insolvent insurers
by the Division of Rehabilitation and Liquidation (the Division) in the Florida Department of Financial
Services (DFS) and from the liquidation of assets of insolvent insurers located outside Florida that
transact insurance business in Florida. 10
If an insurer's assets are insufficient to pay all claims, FIGA can also issue post-insolvency
assessments against property and casualty insurers to obtain funds to pay the remaining claims. 11
Currently, the Florida statute setting forth FIGA's duties and powers states that assessments on
members of FIGA are "initially estimated in the proportion that each insurer's net direct written
premiums [in Florida] in the classes protected by the account bears to the total of said net direct written
premiums received [in Florida] by all such insurers for the preceding calendar year for the kinds of
insurance included in such account." 12 Furthermore, each insurer assessed must be provided with at
1
11 U.S.C. § 109(b)(2).
2
An "insolvent insurer" means an insurer that was authorized to transact insurance in this state, either at the time the policy was issued
or when the insured event occurred, and against which an order of liquidation with a finding of insolvency has been entered by a court
of competent jurisdiction if such order has become final by the exhaustion of appellate review. S. 631.904( 4), F.S.
3
Ch. 631, F.S.
4
Id
5
See e.g., ss. 631.51 and 631.902, F.S.
6
Ch. 631, part II, F.S.
7
Ch. 631, part V, F.S.
8
S. 631.51, F.S.
9
S. 631.52, F.S.
10
Sees. 631.061, F.S. for grounds for liquidation. Sees. 631.025, F.S., for an overview of persons subject to proceedings initiated by
the Division.
11
S. 631.57, F.S.
12
S. 63 l .57(3)(a), F.S. Stated differently, an insurer's assessment amount would be estimated by determining its part of the whole of
the premium written for the prior year for the kinds of insurance included in a certain account and multiplying that proportion by the
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least 30 days' written notice as to the date the initial assessment payment is due. 13 When FIGA issues
an assessment, it has the option to require that member insurers pay the assessment in a single
payment or to allow the member insurers to pay assessment payments in monthly installments, with the
first installment being due at the end of the month following the levy of an assessment. 14
When an insolvent insurer is liquidated in Florida, FIGA assumes the claims and is "deemed the insurer
to the extent of its obligation on ... covered claims, and, ... shall have all rights, duties, defenses, and
obligations of the insolvent insurer as if the insurer had not become insolvent." 15 Additionally, FIGA has
the right to employ the necessary staff to handle claims and perform other duties for the association. 16
In general, when an insolvent insurer located in another state is liquidated, the claims in that state are
referred to its guaranty association for claims handling. However, FIGA handles claims that exist on
policies issued in Florida by insolvent foreign insurers. 17 Due to the nature of the claims process and
the involvement of more than one state's guaranty association in these claims, it may be appropriate
and efficient for an employee of another state's guaranty association to adjust a Florida claim.
Effect of the Bill
Adjusting
The bill allows employees of FIGA to adjust losses for FIGA if those employees hold a license in Florida
that allows them to adjust losses or if they held such a license within the last ten years. 18 It also allows
FIGA to authorize employees of any state guaranty association whose insurance regulators are
members of the National Association of Insurance Commissioners to adjust Florida claims for FIGA. 19
While the bill does not require that the employee adjusting losses be a licensed insurance adjuster in
Florida, the employee must maintain appropriate experience and training to adjust claims, and the
authorization for the state guaranty association's employee to adjust losses must be included in the
contract between FIGA and the state guaranty association whose employee is doing the adjusting. This
provision of the bill will allow FIGA and other states' guaranty associations to efficiently provide
continuity of claims handling and adjusting claims within Florida and when claims cross state lines.
Assessments
The bill removes the word "net" from "net direct written premium" to use the more common industry
terminology of "direct written premium." It also eliminates dividends paid or credited to policyholders
from being subtracted from the premium amount when direct written premiums are calculated. To
simplify the explanation of the way in which a FIGA member insurer's assessment amount is
calculated, the bill eliminates the language from s. 631.57(3)(a), F.S., that requires a determination of
each insurer's proportion of net direct written premiums to the total of net direct written premiums
entire assessment amount to be collected. For example, ifFIGA was assessing its auto insurance account, an auto insurer's
assessment would be estimated by determining its share of the entire auto insurance premium written during the prior year and
multiplying that by the total assessment amount to be collected.
13
S. 63 l .57(3)(a), F.S.
14
S. 63 l.57(3)(e)3 and (t)2, F.S.
15
S. 631.57, F.S.
16 Id.
17
A foreign insurer is one formed under the laws of any state, district, territory, or commonwealth of the United States other than
Florida. S. 624.06, F.S.
18
DFS has indicated that the licensure status of the person determining the amount ofloss (i.e., adjusting a claim) has no bearing on
the contractual obligations of the insurer from a regulatory standpoint. Therefore, an insured whose claim is being handled by FIGA
by virtue ofan insurer insolvency and whose claim was adjusted by an unlicensed employee ofFIGA or another state's guaranty
association does not lose any rights or remedies should that insured dispute the amount of loss as determined by the adjuster. Email
from Greg Thomas, Director Division of Agents and Agency Services, Department of Financial Services, RE: HB 429 (Feb. 14,
2019).
19 Id.
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received during the preceding calendar year for the kinds of insurance included within an account.
Instead, the assessment due will be a uniform percentage of premium collected.
For clarity, the bill moves the portion of s. 631.57(3)(a), F.S., which requires that FIGA provide each
insurer with at least 30 days' written notice as to the date the initial assessment payment is due to s.
631.57(3)(f)1.b, F.S. Notice of an initial payment due date would not apply when the assessment is
being paid in a single payment. The bill establishes that when FIGA allows for assessments to be paid
in installments, those payments may be made in quarterly, rather than monthly installments. The bill
also provides for other technical and structural changes and conforms statutory cross-references as
needed.
Florida Workers' Compensation Insurance Guaranty Association
FWCIGA "provides a mechanism for the payment of covered claims under chapter 440 to avoid" delay
and financial loss to claimants due to the insolvency of a workers' compensation insurer. 20 FWCIGA
services workers' compensation claims against insolvent workers' compensation insurers21 and self-
insurance funds. 22 When a workers' compensation insurer or self-insurance fund becomes insolvent,
FWCIGA takes over the claims of that insurer and pays the claims of its policyholders, ensuring that
policyholders are not left with unpaid claims. Like FIGA, FWCIGA is funded through the liquidation of
insolvent insurers, including a portion of the estates of insolvent insurers in other states. If the assets
of the liquidated insurer are insufficient to pay claims, FWCIGA in conjunction with the Office of
Insurance Regulation (OIR), may order assessments of workers' compensation insurers and self-
insurance funds writing workers' compensation coverage in Florida. 23 FWCIGA levied assessments
from its inception in 1998 through 2005. 24 On June 18, 2019, the FWCIGA Board of Directors certified
the need for a 1.0% assessment on its member insurers. 25 Subsequently, OIR issued a 1.0%
assessment levy on all new and renewal workers' compensation policies with effective dates beginning
January 1, 2020, through December 31, 2020. 26 These assessment payments will be due to FWCIGA
quarterly after applying and collecting a 1.0% surcharge to all workers' compensation and excess
workers' compensation policies. 27
Method of Assessment
In 2016, the method of assessment for FWCIGA was amended to be more consistent with the methods
used to levy assessments on the other Florida guaranty associations. 28 Since the 2016 amendments,
the law has provided for two methods by which FWCIGA can collect assessments from workers'
compensation insurers and self-insurance funds. 29 FWCIGA may choose to fund an assessment by
either of the following methods: 30
20
S. 631.902, F.S.
21
"'Insurer' means an insurance carrier or self-insurance fund authorized to insure under chapter 440. For purposes of this act,
'insurer' does not include a qualified local government self-insurance fund, as defined ins. 624.4622, or an individual self-insurer as
defined ins. 440.385." S. 631.904(5), F.S.
22
"'Self-insurance fund' means a group self-insurance fund authorized under s. 624.4621, a commercial self-insurance fund writing
workers' compensation insurance authorized under s. 624.462, or an assessable mutual insurer authorized under s. 628.6011. For
purposes of this act, the term "self-insurance fund" does not include a qualified local government self-insurance fund, as defined ins.
624.4622, an independent educational institution self-insurance fund as defined in s. 624.4623, an electric cooperative self-insurance
fund as described ins. 624.4626, or an individual self-insurer as defined in s. 440.385." S. 631.904(6), F.S.
23
S. 631.914, F.S.
24
Florida Workers' Compensation Insurance Guaranty Association, Assessments, https://fwciga.org/assessments (last visited Oct. 30,
2019).
25
Id Pursuant to s. 63 l.914(4)(a), F.S., an insurer may be exempted from an assessment if, in the opinion ofOIR, the assessment
would impair the solvency of the insurer.
26 Id
21 Id
28
Ch. 16-170, Laws of Fla.
29
Sees. 631.914, F.S.
30
See id
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• Single payment, subject to true-up (pay and recover} 31 - under this method, the insurer pays the
assessment to the FWCIGA and then recovers its payment from its insureds through policy
surcharges. The assessment payment is due and payable no earlier than 30 days following
written notice of the assessment order. For accounting purposes, the billed surcharges are a
receivable and an asset for the purposes of the National Association of Insurance
Commissioners' Statement of Statutory Accounting Principles Number 432 and would be
recorded separately from the liability for OIR reports.
• Installment (collect and remit) - under this method, the insurer would bill the insured for the
surcharge as policies are written and remit the collected surcharges to the FWCIGA quarterly. 33
The insurer is required to submit a reconciliation report within 120 days following the end of the 12
month assessment recovery period showing the amount initially paid and the amount of the surcharge
collected. 34 This results in a "true-up" of the actual assessment amount if the initial calculation and
payment was too low or too high. 35
Calculation of Insurer Assessment Amount
OIR, upon certification of need by FWCIGA, levies assessments on each insurer "initially estimated in
the proportion that the insurer's net direct written premiums" in Florida bear to the total net direct
premiums received in Florida by all workers' compensation insurers during the previous calendar
year. 36 The assessments levied against insurers and self-insurance funds are computed based upon
the net direct written premium amounts set forth in Florida for workers' compensation insurance without
consideration for any discount in premium or credit for deductibles. 37
The assessment is limited to 2 percent of an insurer's or self-insurance fund's net direct written
premium in any given calendar year. 38 If the assessment is insufficient to meet FWCIGA's funding
need for payments owing to claimants in a calendar year, then, upon certification by FWCIGA, OIR
shall levy assessments of up to an additional 1.5 percent of the insurer's net direct written premiums in
Florida. 39 Insurers and self-insurance funds must report to FWCIGA the amount of initial payment or
installment payments made to FWCIGA and the amount collected from policyholders. 40 The reporting
must occur within 120 days after the 12-month assessment period and annually thereafter for 3 years. 41
Effect of the Bill
The bill clarifies the method by which assessments are levied against insurers and collected by
FWCIGA, by providing that OIR shall levy the uniform surcharge percentage on all policies of the same
kind or line as it considered in determining an insurer's assessment liability, along with an insurer using
this method to fully recoup assessments from policyholders.
The bill clarifies that no insurer's direct written premium calculated for the purposes of determining its
premium subject to surcharge will be reduced by any discount or credit for deductibles in any policy.
31
S. 631.914(l)(d), F.S.
32
See National Association of Insurance Commissioners & The Center for Insurance Policy and Research, Statutory Accounting
Principles, http://www.naic.org/cipr topics/topic statutory accounting principles.htm (last visited Oct. 30, 2019).
33
S. 631.914(l)(d), F.S.
34
S. 631.9I4(l)(d)3., F.S.
35 Id.
36
S. 631.914(l)(a), F.S.
31 Id.
38 Id.
39
S. 631.914(l)(c), F.S.
40
S. 63 l.914(l)(a)d.3., F.S.
41 Id.
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It also does not reduce an insurer's direct written premium calculated for the purposes of determining
the insurer's premium subject to surcharge for any premium adjustment on retrospectively rated
policies. 42
The bill provides the authority for FWCIGA to audit the reports from insurers regarding the payments
made to FWCIGA and the amounts collected from policyholders. It provides that assessments paid by
workers' compensation insurers constitute advances of funds to FWCIGA under certain circumstances
to allow for proper accounting treatment.
The bill removes the word "net" from "net direct written premium" to use the more common industry
terminology of "direct written premium." The bill provides for other technical and structural changes
and conforms statutory cross-references as needed.
B. SECTION DIRECTORY:
Section 1. Creates s. 626.8621, F.S., relating to adjustments by guaranty association employees.
Section 2. Amends s. 631.54, F.S., relating to definitions.
Section 3. Amends s. 631.57, F.S., relating to powers and duties of the association.
Section 4. Amends s. 625.012, F.S., relating to "assets" defined.
Section 5. Amends s. 631.59, F.S., relating to duties and powers of department and office.
Section 6. Amends s. 631.59, F.S., relating to board of directors.
Section 7. Amends s. 631.914, F.S., relating to assessments.
Section 8. Provides an effective date of July 1, 2020.
11. 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:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
42
A retrospectively rated policy in one with a rating plan that adjusts the premium to reflect current loss experience of an insured.
IRMI, Retrospective Rating, https://www.irmi.com/term/insurance-definitions/retrospective-rating (last visited Oct. 30, 2019).
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Changing the method by which FWCIGA calculates assessments may increase costs for certain
employers and decrease costs for others based on the changes to treatment of premium discounts and
credits, or premium adjustments in calculating assessments. However, the modification to the
calculation does not change the total amount assessed by FWCIGA.
D. FISCAL COMMENTS:
None.
Ill. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to affect county or municipal governments.
2. Other:
None.
8. RULE-MAKING AUTHORITY:
The bill neither authorizes nor requires administrative rulemaking.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
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FLORIDA H O U S E 0 F REPRESENTATIVES
HB 329 2020
1 A bill to be entitled
2 An act relating to insurance guaranty associations;
3 creating s. 626.8621, F.S.; authorizing an employee of
4 the Florida Insurance Guaranty Association or an
5 employee of a guaranty association of another state to
6 adjust losses for the Florida Insurance Guaranty
7 Association if certain conditions are met; amending s.
8 631.54, F.S.; defining the term "direct written
9 premiums" rather than the term "net direct written
10 premiums"; amending s. 631.57, F.S.; deleting a
11 provision specifying the manner in which the Office of
12 Insurance Regulation initially estimates assessments
13 levied on insurers; deleting a provision specifying
14 the timeline to address notices of such assessments;
15 conforming provisions to changes made by the act;
16 requiring certain assessments to be made quarterly
17 rather than monthly; revising the calculation of
18 insurers' initial payments to the association;
19 amending ss. 625.012, 631.59, and 631.912, F.S.;
20 conforming provisions to changes made by the act;
21 amending s. 631.914, F.S.; revising requirements for
22 the office in levying workers' compensation insurers;
23 providing that an insurer's direct written premium may
24 not be reduced by certain amounts for the purposes of
25 determining insurer assessments or policy surcharges;
Page 1 of 17
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FLORIDA H O U S E 0 F REPRESENTATIVES
HB 329 2020
26 authorizing the Florida Workers' Compensation
27 Insurance Guaranty Association to audit certain
28 reports; revising requirements for remitting policy
29 surcharges and assessments; providing that assessments
30 paid by an insurer constitute advances of funds to the
31 association under certain circumstances; revising the
32 requirements for the insurers' reconciliation reports
33 to the Florida Workers' Compensation Insurance
34 Guaranty Association; revising construction; providing
35 an effective date.
36
37 Be It Enacted by the Legislature of the State of Florida:
38
39 Section 1. Section 626.8621, Florida Statutes, is created
40 to read:
41 626.8621 Adjustments by guaranty association employees.-
42 (1) An employee of the Florida Insurance Guaranty
43 Association, created under part II of chapter 631, may adjust
44 losses for the association if such employee holds, or has held
45 within the past 10 years, licensure in this state which allows
46 for the adjustment of such losses.
47 (2) An employee of a guaranty association established by
48 another state and whose insurance regulators are members of the
49 National Association of Insurance Commissioners may adjust
50 losses for the Florida Insurance Guaranty Association. The
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FLORIDA H O U S E 0 F REPRESENTATIVES
HB329 2020
51 authorization for such employees to adjust losses must be
52 included in a contract with the Florida Insurance Guaranty
53 Association and the employee's guaranty association or
54 association's authorized representative. The Florida Insurance
55 Guaranty Association shall contract only for employees of other
56 state guaranty associations who maintain the appropriate
57 experience and training for adjusting such claims.
58 Section 2. Subsection (9) of section 631.54, Florida
59 Statutes, is amended to read:
60 631.54 Definitions.-As used in this part:
61 (9) " ~ Direct written premiums" means direct gross
62 premiums written in this state on insurance policies to which
63 this part applies, less return premiums thereon and dividends
64 paid or credited to policyholders on such direct business. The
65 term "Het direct written preFRiuFRs" does not include premiums on
66 contracts between insurers or reinsurers.
67 Section 3. Paragraphs (a), (e), and (f) of subsection (3)
68 of section 631.57, Florida Statutes, are amended to read:
69 631.57 Powers and duties of the association.-
70 (3) (a) To the extent necessary to secure funds for the
71 respective accounts for the payment of covered claims, to pay
72 the reasonable costs to administer such accounts, and to secure
73 funds for the account specified in s. 631. 55 (2) (b) or to retire
74 indebtedness, including, without limitation, the principal,
75 redemption premium, if any, and interest on, and related costs
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HB 329 2020
76 of issuance of, bonds issued under s. 631.695 and the funding of
77 reserves and other payments required under the bond resolution
78 or trust indenture pursuant to which such bonds have been
79 issued, the office, upon certification of the board of
80 directors, shall levy assessments, in accordance with
81 subparagraph (f)l. or subparagraph (f)2., initially estimated in
82 the proportion that each insurer's net direct Hritten premiums
83 in this state in the classes protected by the account bears to
84 the total of said net direct Hritten premiums received in this
85 state by all such insurers for the preceding calendar year for
86 the kinds of insurance included within ouch account. Assessments
87 shall be remitted to and administered by the board of directors
88 in the manner specified by the approved plan and paragraph (f).
89 Each insurer so assessed shall have at least 30 days' written
90 notice as to the date the initial assessment payment is due and
91 payable. Every assessment shall be a uniform percentage. The
92 assessments levied against any insurer may not exceed in any one
93 calendar year more than 2 percent of that insurer's fie-t. direct
94 written premiums in this state for the kinds of insurance
95 included within such account.
96 (e) 1. In addition to assessments authorized in paragraph
97 (a), and to the extent necessary to secure the funds for the
98 account specified in s. 631.55 (2) (b) for the direct payment of
99 covered claims of insurers rendered insolvent by the effects of
100 a hurricane and to pay the reasonable costs to administer such
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101 claims, or to retire indebtedness, including, without
102 limitation, the principal, redemption premium, if any, and
103 interest on, and related costs of issuance of, bonds issued
104 under s. 631.695 and the funding of any reserves and other
105 payments required under the bond resolution or trust indenture
106 pursuant to which such bonds have been issued, the office, upon
107 certification of the board of directors, shall levy emergency
108 assessments upon insurers holding a certificate of authority.
109 The emergency assessments levied against any insurer may not
110 exceed in any one calendar year more than 2 percent of that
111 insurer's fte-:E- written premiums in this state for the kinds of
112 insurance within the account specified in s. 631.55 (2) (b).
113 2. Emergency assessments authorized under this paragraph
114 shall be levied by the office upon insurers in accordance with
115 paragraph (f), upon certification as to the need for such
116 assessments by the board of directors. If the board participates
117 in the issuance of bonds in accordance withs. 631.695,
118 emergency assessments shall be levied in each year that bonds
119 issued under s. 631.695 and secured by such emergency
120 assessments are outstanding in amounts up to such 2-percent
121 limit as required in order to provide for the full and timely
122 payment of the principal of, redemption premium, if any, and
123 interest on, and related costs of issuance of, such bonds. The
124 emergency assessments are assigned and pledged to the
125 municipality, county, or legal entity issuing bonds under s.
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126 631.695 for the benefit of the holders of such bonds in order to
127 provide for the payment of the principal of, redemption premium,
128 if any, and interest on such bonds, the cost of issuance of such
129 bonds, and the funding of any reserves and other payments
130 required under the bond resolution or trust indenture pursuant
131 to which such bonds have been issued, without further action by
132 the association, the office, or any other party. If bonds are
133 issued under s. 631.695 and the association determines to secure
134 such bonds by a pledge of revenues received from the emergency
135 assessments, such bonds, upon such pledge of revenues, shall be
136 secured by and payable from the proceeds of such emergency
137 assessments, and the proceeds of emergency assessments levied
138 under this paragraph shall be remitted directly to and
139 administered by the trustee or custodian appointed for such
140 bonds.
141 3. Emergency assessments used to defease bonds issued
142 under this part may be payable in a single payment or, at the
143 option of the association, may be payable in quarterly~
144 monthly installments with the first installment being due and
145 payable at the end of the month after an emergency assessment is
146 levied and subsequent installments being due by the end of each
147 succeeding month.
148 4. If emergency assessments are imposed, the report
149 required bys. 631.695(7) must include an analysis of the
150 revenues generated from the emergency assessments imposed under
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151 this paragraph.
152 5. If emergency assessments are imposed, the references in
153 sub-subparagraph (1) (a)3.b. ands. 631.695(2) and (7) to
154 assessments levied under paragraph (a) must include emergency
155 assessments imposed under this paragraph.
156 6. If the board of directors participates in the issuance
157 of bonds in accordance withs. 631.695, an annual assessment
158 under this paragraph shall continue while the bonds issued with
159 respect to which the assessment was imposed are outstanding,
160 including any bonds the proceeds of which were used to refund
161 bonds issued pursuant to s. 631.695, unless adequate provision
162 has been made for the payment of the bonds in the documents
163 authorizing the issuance of such bonds.
164 (f)l. The association, office, and insurers remitting
165 assessments pursuant to paragraph (a) or paragraph (e) must
166 comply with the following:
167 a. In the order levying an assessment, the office shall
168 specify the actual percentage amount to be collected uniformly
169 from all the policyholders of insurers subject to the assessment
170 and the date on which the assessment year begins, which may not
171 begin before 90 days after the association board certifies such
172 an assessment.
173 b. Insurers shall make an initial payment to the
174 association before the beginning of the assessment year on or
175 before the date specified in the order of the office. Each
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176 insurer shall have at least 30 days' written notice as to the
177 date on which the initial assessment payment is due and payable.
178 c. Insurers that have written insurance in the calendar
179 year before the year in which the assessment is certified by the
180 board shall make an initial payment based on t h e ~ direct
181 written premium in this state for the classes protected by the
182 account amount from the previous calendar year as set forth in
183 the insurer's annual statement, multiplied by the uniform
184 percentage of premium specified in the order issued by the
185 office. Insurers that have not written insurance in the previous
186 calendar year in any of the lines under the account which are
187 being assessed, but which are writing insurance as of, or after,
188 the date the board certifies the assessment to the office, shall
189 pay an amount based on a good faith estimate of the amount of
190 ~ direct written premium anticipated to be written in the
191 subject lines of business for the assessment year, multiplied by
192 the uniform percentage of premium specified in the order issued
193 by the office.
194 d. Insurers shall file a reconciliation report with the
195 association which indicates the amount of the initial payment to
196 the association before the assessment year, whether such amount
197 was based o n ~ direct written premium contained in a previous
198 calendar year annual statement or a good faith projection, the
199 amount actually collected during the assessment year, and such
200 other information contained on a form adopted by the association
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201 and provided to the insurers in advance. If the insurer
202 collected from policyholders more than the amount initially
203 paid, the insurer shall pay the excess amount to the
204 association. If the insurer collected from policyholders an
205 amount which is less than the amount initially paid to the
206 association, the association shall credit the insurer that
207 amount against future assessments. Such payment reconciliation
208 report, and any payment of excess amounts collected from
209 policyholders, shall be completed and remitted to the
210 association within 90 days after the end of the assessment year.
211 The association shall send a final reconciliation report on all
212 insurers to the office within 120 days after each assessment
213 year.
214 e. Insurers remitting reconciliation reports under this
215 paragraph to the association are subject to s. 62 6. 9541 ( 1) ( e) .
216 2. For assessments required under paragraph (a) or
217 paragraph (e), the association may use a quarterly monthly
218 installment method instead of the method described in sub-
219 subparagraphs 1.b. and c. or in combination thereof based on the
220 association's projected cash flow. If the association projects
221 that it has cash on hand for the payment of anticipated claims
222 in the applicable account for at least 6 months, the board may
223 make an estimate of the assessment needed and may recommend to
224 the office the assessment percentage that may be collected as a
225 quarterly monthly assessment. The office may, in the order
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226 levying the assessment on insurers, specify that the assessment
227 is due and payable quarterly monthly as the funds are collected
228 from insureds throughout the assessment year, in which case the
229 assessment shall be a uniform percentage of premium collected
230 during the assessment year and shall be collected from all
231 policyholders with policies in the classes protected by the
232 account. All insurers shall collect the assessment without
233 regard to whether the insurers reported premium in the year
234 preceding the assessment. Insurers are not required to advance
235 funds if the association and the office elect to use the
236 quarterly monthly installment option. All funds collected shall
237 be retained by the association for the payment of current or
238 future claims. This subparagraph does not alter the obligation
239 of an insurer to remit assessments levied pursuant to this
240 subsection to the association.
241 Section 4. Paragraph (b) of subsection (15) of section
242 625.012, Florida Statutes, is amended to read:
243 625.012 "Assets" defined.-In any determination of the
244 financial condition of an insurer, there shall be allowed as
245 "assets" only such assets as are owned by the insurer and which
246 consist of:
247 (15)
248 (b) Assessments levied as monthly installments pursuant to
249 s. 631.57(3) (e)3. ors. 631.914 which are paid after policy
250 surcharges are collected so that the recognition of assets is
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251 based on actual premium written offset by the obligation to the
252 Florida Insurance Guaranty Association or the Florida Workers'
253 Compensation Insurance Guaranty Association, Incorporated.
254 Section 5. Subsection (3) of section 631.59, Florida
255 Statutes, is amended to read:
256 631.59 Duties and powers of department and office.-
257 (3) The office shall, upon request of the board of
258 directors, provide the association with a statement of the fre:E-
259 direct written premiums of each member insurer.
260 Section 6. Subsection (1) of section 631.912, Florida
261 Statutes, is amended to read:
262 631.912 Board of directors.-
263 (1) The board of directors of the corporation shall
264 consist of 11 persons, 1 of whom is the insurance consumer
265 advocate appointed under s. 627.0613 or designee and 1 of whom
266 is designated by the Chief Financial Officer. The department
267 shall appoint to the board 6 persons selected by private
268 carriers from among the 20 workers' compensation insurers with
269 the largest amount of fre:E- direct written premium as determined
270 by the department, and 2 persons selected by the self-insurance
271 funds. The Governor shall appoint one person who has commercial
272 insurance experience. At least two of the private carriers shall
273 be foreign carriers authorized to do business in this state. The
274 board shall elect a chairperson from among its members. The
275 Chief Financial Officer may remove any board member for cause.
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276 Each board member shall be appointed to serve a 4-year term and
277 may be reappointed. A vacancy on the board shall be filled for
278 the remaining period of the term in the same manner by which the
279 original appointment was made.
280 Section 7. Subsections ( 1) , ( 2) , and ( 3) of section
281 631.914, Florida Statutes, are amended to read:
282 631.914 Assessments.-
283 ( 1) (a) To the extent necessary to secure the funds for the
284 payment of covered claims, and also to pay the reasonable costs
285 to administer the same, the Office of Insurance Regulation, upon
286 certification by the board, shall levy assessments on each
287 insurer initially estimated in the proportion that the insurer's
288 net direct written premiums in this state bears to the total of
289 said net direct written premiums received in this state by all
2 90 such workers' compensation insurers for the preceding calendar
291 ye-a-r-. Assessments levied against insurers and self-insurance
292 funds pursuant to this paragraph must be computed and levied on
2 93 the basis of the full policy premium value on the fte-t- direct
294 written premium amount as set forth in the state for workers'
295 compensation insurance without consideration of any applicable
296 discount or credit for deductibles. An insurer's direct written
297 premium calculated for the purposes of determining the insurer's
298 assessment or policy surcharge may not be reduced by any
299 discount or credit for deductibles in a policy or by any premium
300 adjustment to a retrospectively rated policy. Insurers and self-
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301 insurance funds must report premiums in compliance with this
302 paragraph, and the association may audit the reports.
303 Assessments shall be remitted to and administered by the board
304 of directors in the manner specified by the approved plan of
305 operation and paragraph (d). Each assessment shall be a uniform
306 percentage applicable to the net direct written premiums of each
307 insurer writing workers' compensation insurance. Assessments
308 levied against insurers and self-insurance funds shall not
309 exceed in any calendar year more than 2 percent of that
310 insurer's fTe-t. direct written premiums in this state for workers'
311 compensation insurance.
312 J...£l_-fb+ The office shall levy the uniform surcharge
313 percentage on all policies of the same kind or line as were
314 considered by the office in determining the assessment liability
315 of the insurer. Member insurers shall collect policy surcharges
316 at a uniform percentage rate on new and renewal policies issued
317 and effective during the period of 12 months beginning on
318 January 1, April 1, July 1, or October 1, whichever is the first
319 day of the following calendar quarter as specified in an order
320 issued by the office directing insurers to pay an assessment to
321 the association. The policy surcharge may not begin until 90
322 days after the board of directors certifies the assessment.
323 lE..l_-+et If assessments otherwise authorized in paragraph
324 (a) are insufficient to make all payments on reimbursements then
325 owing to claimants in a calendar year, then upon certification
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326 by the board, the office shall levy additional assessments of up
327 to 1.5 percent of the insurer's fie'E- direct written premiums in
328 this state.
329 (d) The association may use an installment method to
330 require the insurer to remit the policy surcharge assessment as
331 collected premium is written or may require the insurer to remit
332 the assessment to the association before collecting the policy
333 policyholder surcharge. If the assessment is remitted before the
334 surcharge is collected, the assessment remitted must be based on
335 an estimate of the assessment due based on the proportion of
33 6 each insurer's net direct written premium in this state for the
337 preceding calendar year as described in paragraph (a) and
338 adjusted following the end of the 12 month period during which
339 the assessment is levied.
340 1. If the association elects to use the installment
341 method, the office may, in the order levying the assessment on
342 insurers, specify that the policy surcharge assessment is due
343 and payable quarterly as collected premium is written throughout
344 the assessment year. Insurers shall collect policy surcharges at
345 a uniform percentage rate specified by order as described in
346 paragraph~ -fa+, Insurers are not required to advance funds if
347 the association and the office elect to use the installment
348 option. Assessments levied under this subparagraph are paid
349 after policy surcharges are collected, and the recognition of
350 assets is based on actual policy surcharges collected premium
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351 written offset by the obligation to the association.
352 2. If the association elects to require insurers to remit
353 the assessment before surcharging the policy policyholder, the
354 following shall apply:
355 a. On or before the date specified in the order of the
356 office, insurers shall make an initial payment to the
357 association of the percentage specified in the order multiplied
358 by the insurer's direct written premiums received in this state
359 for the preceding calendar year for the kinds of insurance
360 included within such account before the beginning of the
361 assessment year.
362 b.a-.- The levy order shall provide each insurer so assessed
363 at least 30 days' written notice of the date the initial
364 assessment payment is due and payable by the insurer.
365 c.e-. Insurers shall collect policy surcharges at a uniform
366 percentage rate specified by the order, as described in
367 paragraph J£L -fe+.
368 d.e. Assessments levied under this subparagraph and are
369 paid by an insurer constitute advances of funds from the insurer
370 to the association before policy surcharges are billed and
371 result in a receivable for policy surcharges to be billed in the
372 future. The amount of billed policy surcharges, to the extent it
373 is likely that it will be realized, meets the definition of an
374 admissible asset as specified in the National Association of
375 Insurance Commissioners' Statement of Statutory Accounting
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376 Principles No. 4. The asset shall be established and recorded
377 separately from the liability. If an insurer is unable to fully
378 recoup the amount of the assessment, the amount recorded as an
379 asset shall be reduced to the amount reasonably expected to be
380 recouped.
381 3. Insurers must submit a reconciliation report to the
382 association within 120 days after the end of the 12-month
383 assessment period and annually thereafter for a period of 3
384 years. The report must indicate the amount of the initial
385 payment or installment payments made to the association and the
386 amount of policy surcharges collected written premium pursuant
387 to paragraph (a) for the assessment year. If the insurer's
388 reconciled assessment obligation is more than the amount paid to
389 the association, the insurer shall pay the excess policy
390 surcharges collected to the association. If the insurer's
391 reconciled assessment obligation is less than the initial amount
392 paid to the association, the association shall return the
393 overpayment to the insurer.
394 (2) Policy surcharges collected ~ssessments levied under
395 this section are not premium and are not subject to any premium
396 tax, fees, or commissions. Insurers shall treat the failure of
397 an insured to pay policy assessment related surcharges as a
398 failure to pay premium. An insurer is not liable for any
399 uncollectible policy assessment related surcharges levied
400 pursuant to this section.
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401 (3) Assessments levied under this section may be levied
402 only upon insurers. This section does not create a cause of
403 action by a policyholder with respect to the levying of an
404 assessment or a policyholder's duty to pay assessment-related
405 policy surcharges.
406 Section 8. This act shall take effect July 1, 2020.
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 707 Legislative Review of Occupational Regulations
SPONSOR(S): Renner
TIED BILLS: IDEN./SIM. BILLS: SB 1124
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Commerce Committee Wright Hamon
2) Health & Human Services Committee
3) Appropriations Committee
SUMMARY ANALYSIS
An occupational or professional license is a form of regulation that requires individuals who want to perform
certain types of work to obtain permission from the government before performing such work. These
individuals must demonstrate that they have the designated knowledge, skills, and abilities to perform the work
in order to obtain the license. In Florida, such licenses are granted and regulated by state agencies and entities
through various occupational regulatory programs.
A sunset review is a provision within a statute or regulation requiring the statute or regulation to expire or
cease to be effective on a certain date, unless the legislature takes action to renew the statue or regulation. A
sunset review allows regulations to be periodically examined to determine if they are necessary or if the need
to be changed, improved, or reduced.
The bill schedules the repeal of specified professions over four years, beginning July 1, 2021, and ending July
1, 2024. The bill relates to over one-hundred professions and occupations.
The bill establishes that it is the intent of the legislature to complete a systematic review of the costs and
benefits of certain occupational regulatory programs prior to the date set for repeal to determine whether the
program should be allowed to expire, be fully renewed, or be renewed with modifications.
The bill will be effective upon becoming law.
The bill has no fiscal impact on local governments and an indeterminate fiscal impact on state government.
This document 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:
Occupational Licensing
An occupational or professional license is a form of regulation that requires individuals who want to
perform certain types of work, such as contractors and cosmetologists, to obtain permission from the
government to perform the work. 1 Generally, an individual obtains such permission by demonstrating
that they have the designated knowledge, skills, and abilities to perform the work by meeting pre-
determined criteria established by the government, such as work experience and examinations. If the
individual successfully completes the pre-determined criteria, the government issues the individual a
license, which allows them to perform the work. 2
In the 1950s, less than five percent of U.S. workers were required to have an occupational license to do
their jobs. Since then, the number of workers required to have a license has risen to more than one-
quarter of U.S. workers. 3
In 2015, The White House published a report on the current state of occupational licensing in the
nation. The report found that when designed and implemented carefully, requiring occupational
licenses offers important health and safety protections to consumers, as well as benefits to workers.
However, the report also found that too often licensing requirements are inconsistent, inefficient,
arbitrary, and there is evidence that the current licensing regimes in the U.S. raise the price of goods
and services, restrict employment opportunities, and make it more difficult for workers to take their skills
across state lines. 4
Occupational Licensing in Florida
An estimated 28. 7 percent of the workforce in Florida has an occupational license from the state. 5
Various governmental entities and agencies in Florida license and regulate such individuals practicing
in a wide range of professions, including: 6
• Department of Business and Professional Regulation (DBPR),
• Department of Health (DOH),
• Department of Financial Services (DFS),
• Department of Agriculture and Consumer Services (DACS),
• Florida Supreme Court (FSC),
• Department of Environmental Protection (DEP),
• Agency for Healthcare Administration (AHCA),
• Department of Children and Families (DCF),
• Department of Elder Affairs (DEA),
• Department of Highway Safety and Motor Vehicles (DHSMV), and
• Office of Financial Regulation (OFR).
1
The White House, Occupational Licensing: A Framework for Policymakers, 6 (July 2015)
https://obamawhitehouse.archives.gov/sites/default/files/docs/licensing report final nonembargo.pdf (last visited on Dec. 30, 2019).
2
Bureau of Labor Statistics, Frequently asked questions about data on certifications and licenses,
https://www.bls.gov/cps/certifications-and-licenses-fags.htm, (last visited on Dec. 30, 2019).
3
White House, supra note 1, at 3.
4 Id. at 3-5.
5 Id. at 24.
6 Chs. 20, 25, F.S.
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Sunset Reviews of Occupations and Professions
A sunset review is a clause within a statute or regulation requiring the statute or regulation to expire on
a certain date unless the legislature takes action to renew the statute or regulation. A sunset review
allows regulations to be periodically examined to determine if they are necessary or if the need to be
changed, improved, or reduced. Sunset reviews can be useful, because even if a regulation was
justified when first introduced, technological and economic advancements may have made the
regulation unnecessary or overly burdensome. 7 Thirty-six states have some form of sunset process for
existing occupational licensing laws, ranging from automatic program reviews and repeals, to sunset
recommendations made from a commission to the state legislature. 8
Sunset Reviews of Occupations and Professions in Florida
In 1976, the Florida Legislature enacted The Regulatory Reform Act. The Act set up a sunset review
process which called for a systematic, cyclical review and repeal of statutes related to the regulatory
functions of the executive branch, including statutes regulating professions, occupations, businesses,
and industries. 9 In 1978, The Sundown Act was enacted as a supplement to the sunset review law to
set up a review for boards of trustees, commissions, and advisory bodies which were connected to
executive agency functions. 10
The law required certain committees within the Legislature to perform an in-depth review and make a
recommendation for the continuation, modification, or repeal of certain occupational regulatory
programs. The recommendation needed to consider the following criteria: 11
• Would the absence of the regulation significantly harm or endanger the public health, safety, or
welfare?
• Is there a reasonable relationship between the exercise of the police power of the state and the
protection of the public health, safety, and welfare?
• Is there a less restrictive method of regulation available that would adequately protect the
public?
• Does the regulation have the effect of directly or indirectly increasing the costs of any goods or
services involved, and, if so, to what degree?
• Is the increase in cost more harmful to the public than the harm that would result from the
absence of regulation?
• Are any facets of the regulatory process designed for the purpose of benefitting, and do they
have as their primary effect the benefit of, their regulated entity?
During the sunset review process, if any program was allowed to expire, the personnel positions which
were responsible for carrying out the program and all unexpended balances of appropriations,
allocations, or other funds for such program were to be reverted to the fund from which they were
appropriated, or, if that fund was abolished, to the General Revenue Fund. Any remaining
unencumbered revenue collected under a repealed occupational regulatory program were to be
refunded on a pro rata basis by the Comptroller (now the Chief Financial Officer), upon request of the
person or entity who paid, if such request was made within 1 year after the repeal of the program. 12
7
White, supra note 57 at 48-49; Improving Occupational Licensing with Sunrise and Sunset Reviews, National Conference of State
Legislatures, (July 2018), http://www.ncsl.org/research/labor-and-employmenUimproving-occupational-licensing-with-sunrise-and-
sunset-reviews.aspx (last visited Dec. 30, 2019); Council on Licensure & Regulation, Sunrise, Sunset and State Agency Audits,
https://www.clearhq.org/page-486181 (last visited Dec. 30, 2019); Brian Baugus & Feler Bose, Sunset Legislation in the States:
Balancing the Legislature and the Executive, Mercatus Center, 3 (August 2015).
8
Improving Occupational Licensing with Sunrise and Sunset Reviews, National Conference of State Legislatures, (July 2018),
http://www.ncsl.org/research/labor-and-employmenUimproving-occupational-licensing-with-sunrise-and-sunset-reviews.aspx (last
visited Dec. 30, 2019).
9 Florida Senate Committee on Government Operations, Staff Analysis of 1991 Senate Bill 28-D, p. 2 (Dec. 11, 1991).
10 Id.
11 S.11.61(6), F.S. (1991).
12 S. 11.61 (7)-(8), F .S. (1991 ).
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The Act also provided that any cause of action pending on the date any program was repealed, or any
cause of action brought thereafter, was to be prosecuted or defended in the name of the state by the
Department of Legal Affairs. All regulatory activities related to the repealed program were to cease after
the date of repeal. 13
In 1991, the Senate Government Operations Committee (SCGO) performed a review of the sunset and
sundown laws. SCGO found that between 1977 and 1991, 240 program sunset reviews were
completed. During that time period, an estimated 20 regulatory laws were repealed, and 50 new ones
were created. Based on the mandatory nature of the in-depth review process, it was found that the
costs of the sunset reviews were high in terms of legislative and executive agency staff time. The
SCGO report also found that the initial reviews of regulatory programs were more useful than any
second or subsequent reviews. 14
In light of the SCGO findings, the sunset reviews for occupations, professions, businesses, and
industries under the Regulatory Reform Act, and entities under The Sundown Act, were repealed in
1991. There has not been a comprehensive sunset review process specifically for occupational
licensing schemes since. 15 ·
Effect of the Bill
The bill schedules the repeal of specified occupational regulatory programs, over four years, beginning
July 1, 2021, and ending July 1, 2024. The bill relates to over one-hundred professions and
occupations.
The bill establishes that it is the intent of the legislature to complete a systematic review of the costs
and benefits of certain occupational regulatory programs prior to the date set for repeal to determine
whether the program should be allowed to expire, be fully renewed, or be renewed with modifications.
The bill provides:
"There is established a schedule for systematic review of the costs and benefits
of occupational regulatory programs. The Legislature intends to review each
program before the scheduled date on which each occupational regulatory
program is set to expire through scheduled repeal to determine whether to allow
the program to expire, renew the program without modifications, renew the
program with modifications, or provide for other appropriate actions."
The bill defines the following terms:
• "Occupational regulatory program" or "program" means any statutory regulatory provision or
scheme which places a condition on practicing an occupation, including, but not limited to,
programs that require a license, certification, registration, or credential.
• "Local government" means a county, municipality, special district, or political subdivision of the
state.
• "Occupation" means a paid job, profession, work, line of work, trade, employment, position,
post, career, field, vocation, or craft.
When an occupational regulatory program is allowed to expire or is repealed, the bill requires:
• the personnel positions which are responsible for carrying out the program to be abolished, and
all unexpended balances of appropriations, allocations, or other funds for such program revert
13 S. 11.61 (9), F .S. (1991 ).
14 SCGO, supra note 8, at 3.
15 Ch. 91-429, Laws of Fla. Between 2006 and 2011, there was another systematic and scheduled sunset review process which
included occupational regulatory programs, but that review process was applicable to every aspect of state agencies as a whole. That
process was repealed in 2011. Ch. 2011-35, Laws of Fla.
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to the fund from which they were appropriated, or, if that fund is abolished, to the General
Revenue Fund, within 60 days;
• any remaining unencumbered revenue collected under a repealed occupational regulatory
program to be refunded on a pro rata basis by the Chief Financial Officer, upon request of the
person or entity who paid, if such request is made within 1 year after the repeal of the program;
• any cause of action pending on the date the occupational regulatory program was repealed, or
any cause of action brought thereafter, to be prosecuted or defended in the name of the state
by the Department of Legal Affairs, if prior to repeal such action would have been prosecuted or
defended by the occupational regulatory program repealed by this act; and
• all regulatory activities related to the repealed program cease after the date of repeal, except as
otherwise authorized.
The bill prohibits any local government from regulating any occupation or profession of any repealed
occupational regulatory program, and preempts such regulation to the state, unless local regulation of
such occupation is expressly authorized by law.
If after the effective date of the bill a law scheduled for review under the bill is amended or transferred,
such action does not eliminate the scheduled repeal of such law, unless otherwise expressly provided
in law.
The bill schedules the following occupational licenses for sunset on July 1, 2021:
• Court Reporters and Foreign Language Court Interpreters,
o regulated by ss. 25.383 and 25.386, F.S., and FSC;
• Boiler Safety Inspectors,
o regulated by ss. 554.104 and 554.114(1)(d), F.S., and DFS;
• Property Insurance Mediators and Neutral Evaluators,
o regulated by ss. 627.7015(4) and 627.7074(1)(a), F.S., and DFS;
• Harbor Pilots,
o regulated by ch. 310, F.S., and DBPR;
• Yacht and Ship Brokers,
o regulated by ch. 326, F.S., and DBPR;
• Auctioneers and Auctioneer Apprentices,
o regulated by pt. VI of ch. 468, F.S., and DBPR;
• Talent Agencies,
o regulated by pt. VII of ch. 468, F.S., and DBPR.
• Community Association Managers,
o regulated by pt. VIII of ch. 468, F.S., and DBPR;
• Athlete Agents,
o regulated by pt. IX of ch. 468, F.S., and DBPR;
• Mobile Home Installers,
o regulated bys. 320.8249, F.S., and DHSMV;
• Paramedics, Emergency Medical Technicians, and 911 Operators,
o regulated by ss. 401.465, .27, and .271-273, F.S., and DOH;
• Dieticians, Nutritionists, and Nutrition Counselors,
o regulated by pt. X of ch. 468, F.S., and DOH;
• Athlete Trainers,
o regulated by pt. XIII of ch. 468, F.S., and DOH;
• Orthotists, Orthotic Fitters, Orthotic Fitter Assistants, Prosthetists, and Pedorthists,
o regulated by pt. XIV of ch. 468, F.S., and DOH;
• Electrologists,
o regulated by ch. 479, F.S., and DOH;
• Massage Therapists,
o regulated by ch. 480, F.S., and DOH.
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The bill schedules the following occupational licenses for sunset on July 1, 2022:
• Parenting Coordinators,
o regulated bys. 61.125, F.S., and FSC;
• Funeral Directors, Embalmers, Direct Disposers, Monument Establishment Sales Agents, and
Preneed Sales Agents,
o regulated by ch. 497, F.S., and DFS;
• Service Warranty Sales Representatives, Motor Vehicle Service Agreement Salespersons, and
Home Warranty Sales Representatives,
o regulated by ss. 634.171, .318, .320, and .420, F.S., and DFS;
• Elevator Safety Professionals,
o regulated bys. 399.01 (16), F.S., and DBPR;
• Employee Leasing Companies,
o regulated by pt. XI of ch. 468, F.S., and DBPR;
• Pugilistic Event Timekeepers and Announcers,
o regulated by ch. 548, F.S., and DBPR;
• Home Inspectors,
o regulated by pt. XV of ch. 468, F.S., and;
• Mold Service Professionals,
o regulated by pt. XVI of ch. 468, F.S., and DBPR;
• Well Water Contractors,
o regulated by ss. 373.302-342, F.S:, and DEP;
• Associated Persons of a Securities Dealer and Associated Persons of a State Registered
Investment Advisor or Federal Covered Advisor,
o regulated bys. 517.12(1),(4), F.S., and OFR;
• Acupuncturists,
o regulated by ch. 457, F.S., and DOH;
• Medical Doctors, Physician Assistants, Anesthesiologist Assistants, and Medical Assistants,
o regulated by ch. 458, F.S., and DOH;
• Osteopathic Doctors, Physician Assistants, and Anesthesiologist Assistants,
o regulated by ch. 459, F.S., and DOH;
• Audiologists and Speech-language Pathologists,
o regulated by pt. I of ch. 468, F.S., and DOH;
• Nursing Home Administrators,
o regulated by pt. II of ch. 468, F.S., and DOH;
• Occupational Therapists and Occupational Therapist Assistants,
o regulated by pt. Ill of ch. 468, F.S., and DOH;
• Radiographers, Radiological Technologists, Radiology Assistants, and X-Ray Machine
Operators,
o regulated by pt. IV of ch. 468, F.S., and DOH;
• Respiratory Therapists and Respiratory Therapy Assistants,
o regulated by pt. V of ch. 468, F.S., and DOH;
• Commercial Telephone Sellers,
o regulated by ch. 501, F.S., and DACS;
• Intrastate Movers and Brokers,
o regulated by ch. 507, F.S., and DACS.
The bills schedules the following occupational licenses for sunset on July 1, 2023:
• Mediators and Arbitrators,
o regulated by ch. 44.106, F.S., and FSC;
• Firefighters, Fire Protection Systems Contractors, Fire Equipment Dealers, Firesafety
Inspectors, and Volunteer Firefighters,
o regulated by ch. 633, F.S., and DFS;
• Professional Bail Bond Agents and Limited Surety Bail Bond Agents,
o regulated by ch. 648, F.S., and DFS;
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• Farm Labor Contractors,
o regulated bys. 450.30, F.S., and DBPR;
• Certified Public Accountants,
o regulated by ch. 473, F.S., and DBPR;
• Veterinarians,
o regulated by ch. 474, F.S., and DBPR;
• Real Estate Brokers and Salespersons,
o regulated by pt. I of ch. 475, F.S., and DBPR;
• Barbers,
o regulated by ch. 476, F.S., and DBPR;
• Cosmetologists and Specialists,
o regulated by ch. 477, F.S., and DBPR;
• Chiropractic Physicians, Physician Assistants, and Registered Chiropractic Assistants,
o regulated by ch. 460, F.S., and DOH;
• Pediatric Physicians and Certified Pediatric X-Ray Assistants,
o regulated by ch. 461, F.S., and DOH;
• Naturopaths,
o regulated by ch. 462, F.S., and DOH;
• Certified Optometrists and Licensed Optometric Professionals,
o regulated by ch. 463, F.S., and DOH;
• Clinical Laboratory Personnel and Medical Physicists,
o regulated by ss. 483.800-828 and .901, F.S., and DOH;
• Opticians and Hearing Aid Specialists,
o regulated bys. 484.002, .007(3)-(4), .013-.015, and .018(3), F.S., and DOH;
• Physical Therapists and Physical Therapist Assistants,
o regulated by ch. 486, F.S., and DOH;
• Motor Vehicle Repair Shops,
o regulated by pt. IX of ch. 559, F.S., and DACS;
• Sellers of Travel,
o regulated by pt. XI of ch. 559, F.S., and DACS;
• Charitable Solicitors,
o regulated by s. 496.4101, F.S. and DACS.
The bill schedules the following occupational licenses for sunset on July 1, 2024:
• Property and Casualty Agents, Health and Life Insurance Agents, Title Agents, Portable
Electronic Agents, Credit Insurance Agents, In-Transit and Storage Personal Property
Insurance Agents, Legal Expense Sales Representatives, Managing General Agents, Motor
Vehicle Rental Insurance Agents, Individual Reinsurance Brokers and Managers, Service
Representatives, Travel Insurance Agents, All-lines Adjusters, Emergency Adjusters, Public
Adjusters and Apprentices, Health Agents, Viatical Settlement Providers and Brokers, ACA
Navigators, and Motor Vehicle Physical Damage and Mechanical Breakdown Agents,
o regulated by ch. 626, F.S., and DFS;
• Engineers,
o regulated by ch. 471, F.S., and DBPR;
• Professional Geologists,
o regulated by ch. 492, F.S., and DBPR;
• Architects and Interior Designers,
o regulated by pt. I of ch. 481, F.S., and DBPR;
• Landscape Architects,
o regulated by pt. II of ch. 481, F.S., and DBPR;
• Construction Contractors,
o regulated by pt. I of ch. 489, F.S., and DBPR;
• Electrical Contractors,
o regulated by pt. II of ch. 489, F.S., and DBPR;
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• Septic Tank Contractors,
o regulated by pt. Ill of ch. 489, F.S., and DOH;
• Building Code Administrators, Inspectors, and Plans Examiniers,
o regulated by pt. XII of ch. 468, F.S., and DBPR;
• Registered Core Trainers,
o regulated bys. 429.52(11)-(12), F.S., and DEA;
• Health Care Risk Manager,
o regulated by ss. 395.10971-10975, F.S., and AHCA;
• Recovery Residence Administrators,
o regulated bys. 397.4871, F.S., and DCF;
• Child and Family Care Personnel Operators and Employees,
o regulated bys. 402.305, F.S., and DCF;
• Registered Nurses, Advanced Registered Nurse Practitioners, and Certified Nurse Assistants,
o regulated by ch. 464, F.S., and DOH;
• Pharmacists, Pharmacist Interns, and Pharmacist Technicians,
o regulated by ch. 465, F.S., and DOH;
• Dentists and Dental Hygienists,
o regulated by ch. 466, F.S., and DOH;
• Licensed Midwives,
o regulated by ch. 467, F.S., and DOH;
• Psychologists and School Psychologists,
o regulated by ch. 490, F.S., and DOH;
• Licensed Clinical Social Workers, Marriage and Family Therapists, Mental Health Counselors,
Psychotherapists, and Certified Master Social Workers,
o regulated by ch. 491, F.S., and DOH;
• Surveyors and Mappers,
o regulated by ch. 472, F.S., and DACS;
• Hypnotists,
o regulated by ch. 485, F.S., and DOH;
• Pest Control Professionals,
o regulated by ch. 482, F.S., and DACS;
• Pesticide Application Professionals,
o regulated by pt. I of ch. 487, F.S., and DACS;
• Body Piercing Salons, Tattoo Artists, Tattoo Establishments, and Certified Environmental Health
Professionals,
o regulated by ss. 381.0101, .0075-.00777, and .00781-00791, F.S., and DOH.
At the time of a scheduled repeal, if an occupational regulatory programs is allowed to expire or is
amended, there will also need to be conforming changes made to related statutes and cross-
references.
The bill is effective upon becoming law.
B. SECTION DIRECTORY:
Section 1: Creates a process for a legislative sunset review for certain occupational regulatory
programs.
Section 2: Schedules certain statutes for sunset on July 1, 2021.
Section 3: Schedules certain statutes for sunset on July 1, 2022.
Section 4: Schedules certain statutes for sunset on July 1, 2023.
Section 5: Schedules certain statutes for sunset on July 1, 2024.
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Section 6: Provides an effective date.
11. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
The fiscal impact is indeterminate.
2. Expenditures:
The fiscal impact is indeterminate.
8. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
For any occupational regulatory program that is repealed as a result of the sunset review process, the
bill may have a positive impact on individuals who would have otherwise been required to pay licensing
fees and comply with extensive licensing requirements. The impact on consumers is indeterminate.
D. FISCAL COMMENTS:
To the extent certain occupational regulatory programs are allowed to expire, state revenues and
expenditures related to such programs will decline or be eliminated.
Ill. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to affect county or municipal governments.
2. Other:
None.
8. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
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FLORIDA H O U S E 0 F REPRESENTATIVES
HB 707 2020
1 A bill to be entitled
2 An act relating to legislative review of occupational
3 regulations; creating s. 11.65, F.S.; providing
4 definitions; establishing a schedule for the
5 systematic review of occupational regulatory programs;
6 authorizing the Legislature to take certain actions
7 before the scheduled repeal of an occupational
8 regulatory program; providing that amending or
9 transferring Florida Statutes does not affect a
10 scheduled repeal; providing for the abolition of units
11 or subunits of government and personnel positions
12 responsible for repealed programs; providing for the
13 reversion of certain unexpended funds and the refund
14 of certain unencumbered revenue of a repealed program;
15 providing for cause of action by or against specified
16 units of government under certain circumstances;
17 providing for certain actions for acts committed
18 before a certain time; preempting the regulation of an
19 occupation to the state if such occupation's
20 regulatory program has been repealed through this act;
21 providing a schedule of repeal for occupational
22 regulatory programs; providing contingent effective
23 dates.
24
25 Be It Enacted by the Legislature of the State of Florida:
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26
27 Section 1. Section 11.65, Florida Statutes, is created to
28 read:
29 11.65 Legislative review of occupational regulation.-
30 (1) As used in this section:
31 (a) "Occupational regulatory program" or "program" means
32 any statutory regulatory provision or scheme which places a
33 condition on practicing an occupation, including, but not
34 limited to, programs that require a license, certification,
35 registration, or credential.
36 (b) "Local government" means a county, municipality,
37 special district, or political subdivision of the state.
38 (c) "Occupation" means a paid job, profession, work, line
39 of work, trade, employment, position, post, career, field,
40 vocation, or craft.
41 (2) There is established a schedule for systematic review
42 of the costs and benefits of occupational regulatory programs.
43 The Legislature intends to review each program before the
44 scheduled date on which each occupational regulatory program is
45 set to expire through scheduled repeal to determine whether to
46 allow the program to expire, renew the program without
47 modifications, renew the program with modifications, or provide
48 for other appropriate actions.
49 (3) If a chapter or section of the Florida Statutes
50 scheduled for review by this act is subsequently amended or
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51 transferred, such subsequent amendment or transfer, unless
52 otherwise expressly provided in the act amending or transferring
53 such chapter or section, shall not eliminate the scheduled
54 repeal of such chapter or section.
55 (4) Within 60 days after the date on which any
56 occupational regulatory program is allowed to expire through
57 scheduled repeal under this act, the personnel positions which
58 are responsible for carrying out the program shall be abolished,
59 and all unexpended balances of appropriations, allocations, or
60 other funds for such program shall revert to the fund from which
61 they were appropriated or, if that fund is abolished, to the
62 General Revenue Fund. Except as authorized under this section,
63 all regulatory activities related to the repealed program shall
64 cease after the date of repeal.
65 (5) Any remaining unencumbered revenue collected under an
66 occupational regulatory program allowed to expire through repeal
67 shall be refunded on a pro rata basis by the Chief Financial
68 Officer pursuant to s. 215.26, upon request of the person or
69 entity who paid, if such request is made within 1 year after the
70 repeal of the program.
71 (6) Any cause of action pending on the date the
72 occupational regulatory program was repealed, or any cause of
73 action brought thereafter, shall be prosecuted or defended in
74 the name of the state by the Department of Legal Affairs, if
75 prior to repeal such action would have been prosecuted or
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76 defended by the occupational regulatory program repealed by this
77 act.
78 (7) Any occupational regulatory program that expires
79 through scheduled repeal in accordance with this act may not be
80 subsequently regulated by a local government. The regulation of
81 any occupation repealed by this act is preempted to the state
82 unless local regulation of such occupation is expressly
83 authorized by law.
84 Section 2. Pursuant to the Occupational Regulation Sunset
85 Act, the following statutes are repealed effective July 1, 2021:
86 ss. 25.383, 25.386, 310.001, 310.0015, 310.002, 310.011,
87 310.032, 310.042, 310.051, 310.061, 310.071, 310.073, 310.075,
88 310.081, 310.091, 310.101, 310.102, 310.111, 310.1112, 310.1115,
89 310.121, 310.131, 310.141, 310.142, 310.146, 310.151, 310.161,
90 310.171, 310.181, 310.183, 310.185, 320.8249, 326.001, 326.002,
91 326.003, 326.004, 326.005, 326.006, 401.27, 401.271, 401.2715,
92 401.272, 401.273, 401.465, 468.381, 468.382, 468.383, 468.384,
93 468.385, 468.3851, 468.3852, 468.3855, 468. 386, 468.387,
94 468.388, 468.389, 468.391, 468.392, 468.393, 468.394, 468.395,
95 468.396, 468.397, 468.398, 468.399, 468.401, 468.402, 468.403,
96 468.404, 468.405, 468.406, 468.407, 468.408, 468.409, 468.410,
97 468.411, 468.412, 468.413, 468.414, 468.415, 468.431, 468.4315,
98 468.432, 468.433, 468.4334, 468.4336, 468.4337, 468.4338,
99 468.435, 468.436, 468.4365, 468.437, 468.438, 468.451, 468.452,
100 468.453, 468.4535, 468.4536, 468.454, 468.456, 468.4561,
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101 468.45615, 468.4562, 468.4565, 468.457, 468.501, 468.502,
102 468.503, 468.504, 468.505, 468.506, 468.507, 468.508, 468.509,
103 468.51, 468.511, 468.512, 468.513, 468.514, 468.515, 468.516,
104 468.517, 468.518, 468.70, 468.701, 468.703, 468.705, 468.707,
105 468. 709, 468. 711, 468. 713, 468. 715, 468. 717, 468. 719, 468. 723,
106 468. 80, 468. 801, 468. 802, 468. 803, 468. 806, 468. 808, 468. 809,
107 468.8095, 468.811, 468.812, 468.813, 478.40, 478.41, 478.42,
108 478.43, 478.44, 478.45, 478.46, 478.47, 478.48, 478.49, 478.50,
109 478.54, 480.031, 480.032, 480.033, 480.034, 480.035, 480.036,
110 480.039, 480.041, 480.0415, 480.042, 480.043, 480.044, 480.046,
111 480.0465, 480.047, 480.0475, 480.0485, 480.049, 480.052,
112 480.0535, 488.01, 488.02, 488.03, 488.04, 488.045, 488.05,
113 488.06, 488.07, 488.08, 554.104, 554.114(1) (d), 627.7015(4), and
114 627.7074(1)(a).
115 Section 3. Pursuant to the Occupational Regulation Sunset
116 Act, the following statutes are repealed effective July 1, 2022:
117 ss. 61.125, 373.302, 373.303, 373.306, 373.308, 373.309,
118 373.313, 373.314, 373.316, 373.319, 373.323, 373.324, 373.325,
119 373.326, 373.329, 373.333, 373.335, 373.336, 373.337, 373.342,
120 399.01(16), 457.101, 457.102, 457.103, 457.104, 457.105,
121 457.107, 457.108, 457.1085, 457.109, 457.116, 457.118, 458.301,
122 458.303, 458.305, 458.307, 458.309, 458.310, 458.311, 458.3115,
123 458.3124, 458.313, 458.3135, 458.3137, 458.314, 458.3145,
124 458.3147, 458.315, 458.3151, 458.316, 458.3165, 458.317,
125 458.3175, 458.319, 458.3191, 458.3192, 458.3193, 458.320,
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126 458.321, 458.323, 458.324, 458.325, 458.3255, 458.326, 458.327,
127 458.328, 458.329, 458.3295, 458.331, 458.3311, 458.3312,
128 458.335, 458.336, 458.337, 458.339, 458.341, 458.343, 458.345,
129 458.347, 458.3475, 458.348, 458.3485, 458.351, 459.001, 459.002,
130 459.003, 459.004, 459.005, 459.0055, 459.0066, 459.0075,
131 459.0076, 459.00761, 459.0077, 459.008, 459.0081, 459.0082,
132 459.0083, 459.0085, 459.009, 459.0092, 459.011, 459.012,
133 459.0122, 459.0125, 459.013, 459.0135, 459.0138, 459.0141,
134 459.0145, 459.015, 459.0151, 459.0152, 459.016, 459.017,
135 459.018, 459.019, 459.021, 459.022, 459.023, 459.025, 459.026,
136 468.1105, 468.1115, 468.1125, 468.1135, 468.1145, 468.1155,
137 468.1165, 468.1175, 468.1185, 468.1195, 468.1205, 468.1215,
138 468 .1225, 468 .1245, 468 .1246, 468 .1255, 468 .1265, 468 .1275,
139 468 .1285, 468 .1295, 468 .1296, 468 .1315, 468 .1635, 468 .1645,
140 468 .1655, 468 .1665, 468 .1675, 468 .1685, 468 .1695, 468 .1705,
141 468.1715, 468.1725, 468.1735, 468.1745, 468.1755, 468.1756,
142 468.201, 468.203, 468.204, 468.205, 468.207, 468.209, 468.211,
143 468.213, 468.215, 468.217, 468.219, 468.221, 468.223, 468.225,
144 468.3001, 468.3003, 468.301, 468.302, 468.303, 468.304, 468.305,
145 468.306, 468.3065, 468.307, 468.309, 468.3095, 468.3101,
146 468.311, 468.3115, 468.312, 468.314, 468.315, 468.35, 468.351,
147 468.352, 468.353, 468.354, 468.355, 468.358, 468.359, 468.36,
148 468.361, 468.363, 468.364, 468.365, 468.366, 468.367, 468.368,
149 468.369, 468.520, 468.521, 468.522, 468.523, 468.524, 468.5245,
150 468.525, 468.526, 468.527, 468.5275, 468.528, 468.529, 468.530,
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151 468.531, 468.532, 468.533, 468.534, 468.535, 468.83, 468.831,
152 468.8311, 468.8312, 468.8313, 468.8314, 468.8315, 468.8316,
153 468.8317, 468.8318, 468.8319, 468.832, 468.8321, 468.8322,
154 468.8323, 468.8324, 468.8325, 468.84, 468.841, 468.8411,
155 468.8412, 468.8413, 468.8414, 468.8415, 468.8416, 468.8417,
156 468.8418, 468.8419, 468.42, 468.8421, 468.8422, 468.8423,
157 468.8424, 497.144, 497.145, 497.147, 497.148, 497.168, 497.365,
158 497.366, 497.368, 497.369, 497.370, 497.371, 497.372, 497.373,
159 497. 374, 497. 375, 497. 376, 497. 377, 497. 378, 497. 379, 497. 390,
160 497.554, 497.602, 497.603, 497.605, 501.605, 501.607, 501.608,
161 501.609, 501.612, 501.616(2) and (4), 507.01, 507.02, 507.03,
162 507.04, 507.05, 507.06, 507.07, 507.08, 507.09, 507.10, 507.11,
163 507.12, 507.13, 517.12(1) and (4), 548.003, 548.017, 634.171,
164 634. 318, 634. 320, and 634. 420.
165 Section 4. Pursuant to the Occupational Regulation Sunset
166 Act, the following statutes are repealed effective July 1, 2023:
167 s. 44.106, 450.30, 460.401, 460.402, 460.403, 460.404, 460.405,
168 460.406, 460.4061, 460.4062, 460.407, 460.408, 460.41, 460.411,
169 460.412, 460.413, 460.414, 460.4165, 460.4166, 460.4167,
170 461.001, 461.002, 461.003, 461.004, 461.005, 461.006, 461.007,
171 461.008, 461.009, 461.012, 461.013, 461.0131, 461.0134,
172 461.0135, 461.014, 461.018, 462.01, 462.023, 462.08, 462.09,
173 462.11, 462.13, 462.14, 462.16, 462.17, 462.18, 462.19,
174 462.2001, 463.0001, 463.001, 463.002, 463.003, 463.004, 463.005,
175 463.0055, 463.0057, 463.006, 463.007, 463.008, 463.009, 463.011,
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176 463.012, 463.013, 463.0135, 463.014, 463.0141, 463.015, 463.016,
177 463.018, 473.301, 473.302, 473.303, 473.3035, 473.304, 473.305,
178 473.306, 473.3065, 473.308, 473.309, 473.3101, 473.311, 473.312,
179 473.3125, 473.313, 473.314, 473.3141, 473.315, 473.316, 473.318,
180 473.319, 473.3205, 473.321, 473.322, 473.323, 474.201, 474.202,
181 474.203, 474.204, 474.205, 474.206, 474.2065, 474.207, 474.211,
182 474.2125, 474.213, 474.214, 474.2145, 474.215, 474.216,
183 474.2165, 474.2167, 474.217, 474.2185, 474.221, 475.001, 475.01,
184 475.011, 475.02, 475.021, 475.03, 475.04, 475.045, 475.05,
185 475.10, 475.125, 475.15, 475.161, 475.17, 475.175, 475.180,
186 475.181, 475.182, 475.183, 475.215, 475.22, 475.23, 475.24,
187 475.25, 475.255, 475.2701, 475.272, 475.274, 475.2755, 475.278,
188 475.28, 475.2801, 475.31, 475.37, 475.38, 475.41, 475.42,
189 475.43, 475.451, 475.4511, 475.453, 475.455, 475.482, 475.483,
190 475.4835, 475.484, 475.485, 475.486, 475.5015, 475.5016,
191 475.5017, 475.5018, 476.014, 476.024, 476.034, 476.044, 476.054,
192 476.064, 476.074, 476.114, 476.134, 476.144, 476.154, 476.155,
193 476.178, 476.184, 476.188, 476.192, 476.194, 476.204, 476.214,
194 476.234, 476.244, 476.254, 477.011, 477.012, 477.013, 477.0132,
195 477.0135, 477.014, 477.015, 477.016, 477.017, 477.018, 477.019,
196 477.0201, 477.0212, 477.0213, 477.022, 477.023, 477.025,
197 477.026, 477.0263, 477.0265, 477.028, 477.029, 477.031, 483.800,
198 483.801, 483.803, 483.805, 483.807, 483.809, 483.811, 483.812,
199 483. 813, 483. 815, 483. 817, 483. 819, 483. 821, 483. 823, 483. 824,
200 483.825, 483.828, 483.901, 484.002, 484.007(3) and (4), 484.013,
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HB 707 2020
201 484. 014, 484. 015, 484. 018 (3), 486. 011, 486. 015, 486. 021,
202 486.023, 486.025, 486.028, 486.031, 486.041, 486.051, 486.061,
203 486.0715, 486.081, 486.085, 486.102, 486.103, 486.104, 486.106,
204 486.1065, 486.107, 486.108, 486.109, 486.115, 486.123, 486.125,
205 486.135, 486.151, 486.153, 486.161, 486.171, 486.172, 496.4101,
206 559.901, 559.902, 559.903, 559.904, 559.905, 559.907, 559.909,
207 559.911, 559.915, 559.916, 559.917, 559.919, 559.920, 559.921,
208 559.9215, 559.92201, 559.9221, 559.926, 559.927, 559.928,
209 559.9281, 559.9285, 559.929, 559.9295, 559.931, 559.932,
210 559.933, 559.9335, 559.934, 559.935, 559.9355, 559.936, 559.937,
211 559.938, 559.939, 633.132, 633.216, 633.304, 633.316, 633.318,
212 633.324, 633.328, 633.332, 633.336, 633.338, 633.406, 633.408,
213 633.412, 633.414, 633.416, 633.418, 633.424, 633.426, 648.24,
214 648.25, 648.26, 648.27, 648.279, 648.285, 648.29, 648.295,
215 648.30, 648.31, 648.315, 648.33, 648.34, 648.35, 648.355,
216 648.36, 648.365, 648.38, 648.381, 648.382, 648.383, 648.384,
217 648.385, 648.386, 648.387, 648.388, 648.39, 648.40, 648.41,
218 648.42, 648.421, 648.43, 648.44, 648.441, 648.442, 648.4425,
219 648.45, 648.46, 648.48, 648.49, 648.50, 648.51, 648.52, 648.525,
220 648.53, 648.55, 648.57, 648.571, and 648.58.
221 Section 5. Pursuant to the Occupational Regulation Sunset
222 Act, the following statutes are repealed effective July 1, 2024:
223 381. 0075, 381. 00771, 381. 00773, 381. 00775, 381. 00777, 381. 00781,
224 381.00783, 381.00785, 381.00787, 381.00789, 381.00791, 381.0101,
225 395.10973, 397.4871, 402.305, 429.52(11) and (12), 464.001,
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HB 707 2020
226 464.002, 464.003, 464.004, 464. 005, 464.006, 464.008, 464.009,
227 464.0095, 464. 0096, 464.012, 464.013, 464.014, 464.015, 464. 016,
228 464.017, 464.018, 464.019, 464.0195, 464.0196, 464.0205,
229 464.022, 464.027, 464.201, 464.202, 464.203, 464.204, 464.205,
230 464.206, 464.207, 464.208, 465.002, 465.007, 465.0075, 465.008,
231 465.009, 465.012, 465.0125, 465.0126, 465.013, 465.014,
232 465.0155, 465.0252, 465.0255(2), ( 3) ' and ( 4) ' 465.026,
233 465.0275, 465.0276, 465.186, 465.187, 465.188, 465.189,
234 465.1893, 465.1901, 466.001, 466.002, 466.003, 466.004, 466.005,
235 466.006, 466.0065, 466.0067, 466.00671, 466.00672, 466.00673,
236 466.007, 466.0075, 466.008, 466.009, 466.011, 466.013, 466.0135,
237 466.014, 466.015, 466.016, 466.017, 466.018, 466.019, 466.021,
238 466.022, 466.023, 466.0235, 466.024, 466.025, 466.026, 466.027,
239 466.0275, 466.02751, 466.028, 466.0282, 466.0285, 466.041,
240 466.051, 467.001, 467.002, 467.003, 467.004, 467.005, 467.006,
241 467.009, 467. 011, 467.012, 467.0125, 467.013, 467.0135, 467.014,
242 467.015, 467. 016, 467.017, 467.019, 467.201, 467.203, 467.205,
243 467.207, 468.601, 468.602, 468.603, 468.604, 468.605, 468.606,
244 468.607, 468.609, 468.613, 468.617, 468.619, 468.621, 468.627,
245 468.629, 468.631, 468.632, 468.633, 471.001, 471.003, 471.0035,
246 471.005, 471.007, 471.008, 471.009, 471.011, 471.013, 471.015,
247 471.017, 471.019, 471.0195, 471.021, 471.023, 471.025, 471.027,
248 471.031, 471.033, 471.037, 471.038, 471.0385, 471.045, 472.001,
249 472.003, 472.005, 472.006, 472.007, 472.0075, 472.008, 472.009,
250 472.0101, 472.011, 472.013, 472.0131, 472.0132, 472.0135,
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HB 707 2020
251 472.015, 472.016, 472.0165, 472.017, 472.018, 472.019, 472.0201,
252 472.02011, 472.0202, 472.0203, 472.0204, 472.021, 472.023,
253 472.025, 472.027, 472.029, 472.031, 472.033, 472.0335, 472.0337,
254 472.034, 472.0345, 472.0351, 472.0355, 472.036, 472.0365,
255 472.0366, 472.037, 481.201, 481.203, 481.205, 481.2055, 481.207,
256 481.209, 481.211, 481.213, 481.2131, 481.215, 481.217, 481.219,
257 481.221, 481.222, 481.223, 481.225, 481.2251, 481.229, 481. 231,
258 481.301, 481.303, 481.305, 481.306, 481.307, 481.309, 481.310,
259 481.311, 481.313, 481.315, 481.317, 481.319, 481.321, 481.323,
260 481.325, 481.329, 482.011, 482.021, 482.032, 482.051, 482.061,
261 482.071, 482.072, 482.0815, 482.091, 482.111, 482.121, 482.132,
262 482.141, 482.151, 482.152, 482.155, 482.156, 482.1562, 482.157,
263 482.161, 482.163, 482.165, 482.1821, 482.183, 482.191, 482.211,
264 482.226, 482.2265, 482.2267, 482.227, 482.231, 482.2401,
265 482.241, 482.242, 482.243, 485.001, 485.002, 485.003, 485.004,
266 485.005, 487.011, 487.012, 487.021, 487.025, 487.031, 487.041,
267 487.042, 487.0435, 487.0437, 487.044, 487.045, 487. 046, 487.047,
268 487.048, 487.049, 487.051, 487.064, 487.071, 487.081, 487.091,
269 487.101, 487.111, 487.13, 487.15, 487 .156, 487.1585, 487.159,
270 487.160, 487.161, 487.163, 487.171, 487.175, 489.101, 489.103,
271 489.105, 489.107, 489.108, 489.109, 489.111, 489.113, 489.1131,
272 489.1136, 489.114, 489.115, 489.116, 489.117, 489.118, 489.119,
273 489.1195, 489.121, 489.124, 489.125, 489.126, 489.127, 489.128,
274 489.129, 489.13, 489.131, 489.132, 489.133, 489.134, 489.140,
275 489.1401, 489.1402, 489.141, 489.142, 489.1425, 489.143,
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HB 707 2020
276 489.144, 489.145, 489.1455, 489.146, 489.501, 489.503, 489.505,
277 489.507, 489.509, 489.510, 489.511, 489.513, 489.514, 489.515,
278 489.516, 489.5161, 489.517, 489.518, 489.5185, 489.519, 489.520,
279 489.521, 489.522, 489.523, 489.525, 489.529, 489.530, 489.531,
280 489.5315, 489.532, 489.533, 489.5335, 489.537, 489.538, 489.551,
281 489.552, 489.553, 489.554, 489.555, 489.556, 489.557, 489.558,
282 490.001, 490.002, 490.003, 490.004, 490.005, 490.0051, 490.006,
283 490.007, 490.0085, 490.009, 490.0111, 490.012, 490. 0121,
284 490.014, 490.0141, 490.0143, 490.0145, 490.0147, 490.0148,
285 490.0149, 490.015, 491. 002, 491.003, 491.004, 491.0045,
286 491.0046, 491.005, 491.0057, 491.006, 491.0065, 491.007,
287 491.008, 491.0085, 491.009, 491.0111, 491.0112, 491.012,
288 491.014, 491.0141, 491.0143, 491.0144, 491.0145, 491.0147,
289 491.0148, 491.0149, 491.015, 491.016, 492.101, 492.102, 492.103,
290 492.104, 492.105, 492.1051, 492.106, 492.107, 492.108, 492.109,
291 492.1101, 492.111, 492.112, 492.113, 492.114, 492.115, 492.116,
292 492.1165, 626.011, 626.015, 626.016, 626.022, 626.025, 626.0428,
293 626.112, 626.141, 626.161, 626.171, 626.172, 626.175, 62 6. 181,
294 626.191, 626.201, 626.202, 626.207, 626.211, 626.221, 626.231,
295 626.241, 626.2415, 626.251, 626.261, 626.266, 626.271, 626.281,
296 626.2815, 626.2816, 626.2817, 626.291, 626.292, 626.301,
297 626.311, 626.321, 626.322, 626.331, 626.341, 626.342, 626.371,
298 626.381, 626.382, 626.431, 626.441, 626.451, 626.461, 626.471,
299 626.511, 626.536, 626.541, 626.551, 626.561, 626.571, 626.5715,
300 626.572, 626.593, 626.601, 626.602, 626.611, 626.6115, 626.621,
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HB 707 2020
301 626.6215, 626.631, 626.641, 626.651, 626.6515, 626.661, 626.681,
302 626.691, 626.692, 626.711, 626.726, 626.727, 626.728, 626.729,
303 626. 730, 626. 731, 626. 7315, 626. 732, 626. 733, 626. 734, 626. 7351,
304 626. 7352, 626. 7353, 626. 7354, 626. 741, 626. 742, 626. 743,
305 626. 744, 626. 745, 626. 7451, 626. 7452, 626. 7453, 626. 7454,
306 626. 7455, 626. 748, 626. 7491, 626. 7492, 626. 752, 626. 753,
307 626. 754, 626. 776, 626.777, 626.778, 626. 779, 626. 780, 626.781,
308 626.782, 626. 783, 626.784, 626.7845, 626.785, 626.7851, 626.788,
309 626. 789, 626. 792, 626.793, 626.794, 626. 795, 626.796, 626.797,
310 626.798, 626.826, 626.827, 626.828, 626.829, 626.830, 626.8305,
311 626.831, 626.8311, 626.833, 626.834, 626.835, 626.836, 626.837,
312 626.8373, 626.838, 626.839, 626.841, 626.8411, 626.8412,
313 626.8413, 626.8414, 626.8417, 626.8418, 626.8419, 626.84195,
314 626.842, 626.84201, 626.8421, 626.8423, 626.8427, 626.843,
315 626.8433, 626.8437, 626.844, 626.8443, 626.8447, 626.845,
316 626.8453, 626.8457, 626.846, 626.8463, 626.8467, 626.847,
317 626.8473, 626.851, 626.852, 626.853, 626.854, 626.8548, 626.855,
318 626.856, 626.8561, 626.8582, 626.8584, 626.859, 626.860,
319 626.861, 626.862, 626.863, 626.864, 626.865, 626.8651, 626.866,
320 626.8685, 626.869, 626.8695, 626.8696, 626.8697, 626.8698,
321 626.870, 626.871, 626.8732, 626.8734, 626.8736, 626.8737,
322 626.8738, 626.874, 626.875, 626.876, 626.877, 626.878, 626.8795,
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324 626.9916, 626.995, 626.9951, 626.9952, 626.9953, 626.9954,
325 626.9955, 626.9956, 626.9957, and 626.9958.
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FLORIDA H O U S E 0 F REPRESENTATIVES
HB 707 2020
326 Section 6. Except as otherwise expressly provided in this
327 act, this act shall take effect upon becoming a law.
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 6037 Individual Wine Containers
SPONSOR(S): LaMarca
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Business & Professions Subcommittee 13 Y, 0 N Willson Anstead
2) Commerce Committee Willson M Hamon
SUMMARY ANALYSIS
In Florida, the Beverage Law regulates the manufacture, distribution, and sale of wine, beer, and liquor by
manufacturers, distributors, and vendors. The Division of Alcoholic Beverages and Tobacco in the Department
of Business and Professional Regulation administers and enforces the Beverage Law.
Section 564.05, F.S., prohibits the sale of wine in an individual container that holds more than one gallon of
wine. However, wine may be sold in a reusable container of 5.16 gallons. Distributors and manufacturers may
sell wine to other distributors and manufacturers in containers of any size.
The bill repeals s. 564.05, F.S., relating to limitations on the size of individual wine containers.
The bill does not appear to have a fiscal impact on state or local governments.
The bill provides an effective date of July 1, 2020.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h6037b.COM.D0CX
DATE: 1/14/2020
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Beverage Law
In Florida, the Beverage Law 1 regulates the manufacture, distribution, and sale of wine, beer, and liquor
by manufacturers, distributors, and vendors. 2 The Division of Alcoholic Beverages and Tobacco
(Division) in the Department of Business and Professional Regulation (DBPR) administers and
enforces the Beverage Law. 3
"Alcoholic beverages" are defined ins. 561.01, F.S., as "distilled spirits and all beverages containing
one-half of 1 percent or more alcohol by volume." "Malt beverages" are brewed alcoholic beverages
containing malt. 4
Section 561.14, F.S., specifies the license and registration classifications used in the Beverage Law.
• "Manufacturers" are those "licensed to manufacture alcoholic beverages and distribute the same
at wholesale to licensed distributors and to no one else within the state, unless authorized by
statute."
• "Distributors" are those "licensed to sell and distribute alcoholic beverages at wholesale to
persons who are licensed to sell alcoholic beverages."
• "Importers" are those licensed to sell, or to cause to be sold, shipped, and invoiced, alcoholic
beverages to licensed manufacturers or licensed distributors, and to no one else in this state. 5
• "Vendors" are those "licensed to sell alcoholic beverages at retail only" and may not "purchase
or acquire in any manner for the purpose of resale any alcoholic beverages from any person not
licensed as a vendor, manufacturer, bottler, or distributor under the Beverage Law."
Wine Containers
Section 564.05, F.S., prohibits the sale of wine in an individual container that holds more than one
gallon of wine. However, wine may be sold in a reusable container of 5.16 gallons.
Distributors and manufacturers may sell wine to other distributors and manufacturers in containers of
any size.
Any person who violates the prohibition commits a second-degree misdemeanor. 6
Effect of the Bill
The bill repeals s. 564.05, F.S., relating to limitations on the size of individual wine containers.
1
Section 561.01(6), F.S., provides that the "The Beverage Law" means chs. 561,562,563,564,565,567, and 568, F.S.
2
Sees. 561.14, F.S.
3
S. 561.02, F.S.
4
S. 563.01, F.S.
5
S. 561.01(5), F.S.
6
Section 775.082, F.S., provides the penalty for a misdemeanor of the second degree is a term of imprisonment not exceeding 60
days. Section 775.083, F.S., provides the penalty for a misdemeanor of the second degree is a fine not to exceed $500.
STORAGE NAME: h6037b.COM.D0CX PAGE: 2
DATE: 1/14/2020
B. SECTION DIRECTORY:
Section 1 Repeals s. 564.05, F.S., relating to limitations on the size of individual wine containers.
Section 2 Provides for an effective date.
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:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
None.
D. FISCAL COMMENTS:
None.
Ill. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not Applicable. This bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill does not appear to create a need for rulemaking or rulemaking authority.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
STORAGE NAME: h6037b.COM.D0CX PAGE: 3
DATE: 1/14/2020
FLORIDA H O U S E 0 F REPRESENTATIVES
HB 6037 2020
1 A bill to be entitled
2 An act relating to individual wine containers;
3 repealing s. 564.05, F.S., relating to the limitation
4 of size of individual wine containers; providing an
5 effective date.
6
7 Be It Enacted by the Legislature of the State of Florida:
8
9 Section 1. Section 564.05, Florida Statutes, is repealed.
10 Section 2. This act shall take effect July 1, 2020.
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