Meeting Packet - Commerce Committee, Florida House of Representatives (February 1, 2022)
Summary
Meeting packet of the Commerce Committee of the Florida House of Representatives for Tuesday, February 1, 2022, 12:30 PM - 2:30 PM, in Webster Hall. The agenda lists CS/HB 123 (Consumer Finance Loans), HB 275 (Loss Run Statements), CS/HB 481 (Temporary Underground Power Panels), HM 641 (Internal Revenue Service Reporting Requirements), CS/HB 831, CS/HB 925 and CS/HB 1439. The staff analysis of CS/HB 123 says the bill authorizes consumer finance lenders to provide a surety bond, certificate of deposit, or letter of credit in lieu of maintaining liquid assets and expressly prohibits prepayment penalties, with an effective date of October 1, 2022.
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Commerce Committee
Tuesday, February 1, 2022
12:30 PM - 2:30 PM
Webster Hall (212 Knott)
Meeting Packet
Chris Sprowls Blaise Ingoglia
Speaker Chair
The Florida House of Representatives
Commerce Committee
Chris Sprowls Blaise Ingoglia
Speaker Chair
Meeting Agenda
Tuesday, February 1, 2022
12:30 PM – 2:30 PM
Webster Hall (212 Knott)
I. Call to Order
II. Roll Call
III. Welcome and Opening Remarks
IV. Consideration of the following bill(s):
• CS/HB 123 Consumer Finance Loans by Insurance & Banking Subcommittee,
Stevenson
• HB 275 Loss Run Statements by Fernandez-Barquin
• CS/HB 481 Temporary Underground Power Panels by Tourism, Infrastructure &
Energy Subcommittee, Duggan
• HM 641 Internal Revenue Service Reporting Requirements by Rommel
• CS/HB 831 Licensure Requirements for Land Surveyors and Mappers by Regulatory
Reform Subcommittee, Mariano
• CS/HB 925 Benchmark Replacements for London Interbank Offered Rate by
Insurance & Banking Subcommittee, Stevenson
• CS/HB 1439 Prostitution, Lewdness, Human Trafficking, and Public Lodging by
Criminal Justice & Public Safety Subcommittee, Toledo, Busatta Cabrera
V. Closing Remarks
VI. Adjournment
303 House Office Building, 402 South Monroe Street, Tallahassee, FL 32399-1300
(850) 717-4870
CS/HB 123
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 123 Consumer Finance Loans
SPONSOR(S): Insurance & Banking Subcommittee, Stevenson
TIED BILLS: IDEN./SIM. BILLS: SB 546
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 14 Y, 0 N, As CS Hinshelwood Luczynski
2) Commerce Committee Hinshelwood Hamon
SUMMARY ANALYSIS
The Florida Consumer Finance Act, ch. 516, F.S., permits licensed lenders to make secured or unsecured
loans up to $25,000 with a tiered interest rate structure such that the maximum annual interest rate allowed on
each tier decreases as principle amounts increase:
30 percent on the first $3,000.
24 percent on principal above $3,000 and up to $4,000.
18 percent on principal above $4,000 and up to $25,000.
Consumer finance lenders must maintain liquid assets of at least $25,000 per location. The bill authorizes
consumer finance lenders to provide a surety bond, certificate of deposit, or letter of credit of a specified amount
in lieu of maintaining liquid assets.
Consumer finance lenders are permitted to charge a borrower certain fees, including up to $25 for investigating
the credit and character of the borrower. The exclusion of “prepayment penalties” from the list of permissible
fees implies that consumer finance lenders are prohibited from charging prepayment penalties. The bill provides
an express prohibition on prepayment penalties for consumer finance loans.
The bill has no fiscal impact on state or local governments and an indeterminate but likely positive impact on the
private sector.
The bill provides an effective date of October 1, 2022.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Consumer Finance Loans
The Office of Financial Regulation’s (OFR’s) Division of Consumer Finance is responsible for the
licensing and regulation of non-depository financial service entities and individuals, and conducts
examinations and complaint investigations for licensed entities to determine compliance with Florida
law.
One of the loan products regulated by the OFR’s Division of Consumer Finance is the Florida
Consumer Finance Act, ch. 516, F.S. (“the Act”). Loans permitted under the Act are commonly referred
to as “consumer finance loans”, which are “loan[s] of money, credit, goods, or choses in action,1
including, except as otherwise specifically indicated, provision of a line of credit, in an amount or to a
value of $25,000 or less for which the lender charges, contracts for, collects, or receives interest at a
rate greater than 18 percent per annum.”2 Although consumer finance loans may be secured or
unsecured, the Act prohibits lenders from taking a security interest in certain types of collateral. 3
Consumer finance loans made pursuant to the Act must be repaid in periodic installments as nearly
equal as mathematically practicable, except that the final payment may be less than the amount of the
prior installments.4 Installments may be due every two weeks, semimonthly, or monthly.5 There is no
minimum or maximum loan term under the Act. Consumer finance loans have a tiered interest rate
structure such that the maximum annual interest rate allowed on each tier decreases as principle
amounts increase:
30 percent on the first $3,000.
24 percent on principal above $3,000 and up to $4,000.
18 percent on principal above $4,000 and up to $25,000.6
The original principal amount is the amount financed, as defined by the federal Truth in Lending Act
(TILA)7 and TILA’s federal implementing regulations.8 For the purpose of determining compliance with
these statutory maximum interest rates, the interest rate computations used must be simple interest. 9 In
the event that two or more interest rates are applied to the principal amount of a loan, 10 a lender may
charge interest at a single annual percentage rate (APR) which would produce at maturity the total
amount of interest as permitted by the tiered interest rate structure above. 11 The APR charged by a
lender may not exceed the APR that must be computed and disclosed according to TILA and its
1 “Chose in action” is defined as “1. A property right in personam, such as a debt owed by another person . . . 2. The right
to bring an action to recover a debt, money, or thing. 3. Personal property that one person owns but another person
possesses, the owner being able to regain possession through a lawsuit.” BLACK’S LAW DICTIONARY 101 (3d ed. 1996).
2 S. 516.01(2), F.S.
3 See s. 516.031(1), F.S. (prohibition on taking a security interest in land for a loan less than $1,000); s. 516.17, F.S.
(prohibition on assignment of, or order for payment of, wages given to secure a loan).
4 S. 516.36, F.S. This section does not apply to lines of credit.
5 Id.
6 S. 516.031(1), F.S.
7 Codified at 15 U.S.C. § 1601 et seq.
8 Currently, the statute references TILA’s implementing regulations as “Regulation Z of the Board of Governors of the
Federal Reserve System.” s. 516.031(1), F.S. However, the Dodd-Frank Wall Street Reform and Consumer Protection
Act, Pub. L. No. 111-203, H.R. 4173, 124 Stat. 1376-2223, 111th Cong. (July 21, 2010), commonly referred to as the
“Dodd-Frank Act”, transferred rulemaking authority for TILA to the Bureau of Consumer Financial Protection, effective July
21, 2011. See also Truth in Lending (Regulation Z), 76 Fed. Reg. 79768 (Dec. 22, 2011).
9 Id.
10 For example, on a principle amount of $3,500, an interest rate of 30 percent per annum may be applied to $3,000 of the
principle amount, and an interest rate of 24 percent per annum may be applied to the remaining $500 of the principal
amount.
11 S. 516.031(1), F.S.
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implementing regulations.12 A licensee may not induce or permit a borrower to divide a loan and may
not induce or permit a person to become obligated to the licensee under more than one loan contract
for the purpose of obtaining a greater finance charge than would otherwise be permitted under the
parameters described above.13
If consideration for a new loan contract includes the unpaid principal balance of a prior loan with the
licensee, then the principal amount of the new loan contract may not include more than 60 days’ unpaid
interest accrued on the prior loan.14
The Act prohibits lenders from directly or indirectly charging borrowers additional fees as a condition to
the grant of a loan, except for the following allowable fees:
Up to $25 for investigating the credit and character of the borrower;
A $25 annual fee on the anniversary date of each line-of-credit account;
Brokerage fees for certain loans, title insurance, and appraisals of real property offered as
security;
Intangible personal property tax on the loan note or obligation if secured by a lien on real
property;
Documentary excise tax and lawful fees for filing, recording, or releasing an instrument securing
the loan;
The premium for any insurance in lieu of perfecting a security interest otherwise required by the
licensee in connection with the loan;
Actual and reasonable attorney fees and court costs;
Actual and commercially reasonable expenses for repossession, storing, repairing and placing
in condition for sale, and selling of any property pledged as security;
Depending on the frequency of payments, a delinquency charge of up to $15 for each payment
in default for at least 10 days, if agreed upon in writing before the charge is imposed; and
A bad check charge of up to $20.15
The exclusion of “prepayment penalties” from the list of permissible fees implies that consumer finance
lenders are prohibited from charging prepayment penalties.16
Optional credit property, credit life, and disability insurance may be provided at the borrower’s expense
via a deduction from the principal amount of the loan.17
Licenses granted under the Act are for a single place of business 18 and must be renewed every two
years.19 As of October 28, 2021, there are 188 licensed consumer finance loan companies operating
across a total of 389 locations in Florida.20
The historical yearly licensing data for ch. 516, F.S., is contained in the charts below.
Chapter 516, F.S., Licenses by Year
00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10
Applications Received 318 44 136 82 48 72 192 30 52 32
Applications Approved 228 136 125 76 43 64 95 29 18 19
Active Licenses 589 607 568 609 532 584 626 600 390 386
12 S. 516.031(2), F.S.
13 S. 516.031(4), F.S.
14 S. 516.031(5), F.S.
15 S. 516.031(3), F.S.
16 Id.; Office of Financial Regulation, Agency Analysis of 2022 Senate Bill 546, pp. 2-3 (Nov. 19, 2021).
17 S. 516.35(2), F.S.
18 Ss. 516.01(1) and 516.05(3), F.S.
19 Ss. 516.03(1) and 516.05(1) & (2), F.S.
20 Office of Financial Regulation, supra note 16 at p. 2.
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Renewals & Reactivations 496 1 542 0 523 1 569 0 388 0
Chapter 516, F.S., Licenses by Year (Cont'd)
10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20
Applications Received 175 41 82 116 66 102 55 96 109 100
Applications Approved 137 37 53 113 37 81 36 83 104 98
Active Licenses 347 303 293 349 331 349 338 373 348 390
Renewals & Reactivations 226 0 258 0 312 0 326 0 342 0
An application to become a consumer finance lender must be accompanied by a nonrefundable
application fee of $625 and a nonrefundable investigation fee of $200. 21 Licenses must be renewed
biennially, at which time the licensee must pay a nonrefundable biennial license fee of $625. 22 At the
time of application, the applicant must provide evidence of liquid assets of at least $25,000, and a
licensee must at all times maintain such liquid assets.23 Each location of a consumer finance lender
must be separately licensed.24
The Act does not apply to persons doing business under state or federal laws governing banks, savings
banks, trust companies, building and loan associations, credit unions, or industrial loan and investment
companies.25
Deferred Presentment Transactions (Payday Loans)
Although the bill relates only to consumer finance loans under ch. 516, F.S., questions often arise as to
how consumer finance loans compare to other consumer loans authorized in statute, particularly
payday loans. Deferred presentment transactions, commonly referred to as “payday loans”, are a small-
dollar loan product under the OFR’s regulatory authority. These transactions are governed by ch. 560,
part IV, F.S.
A deferred presentment transaction means providing currency or a payment instrument in exchange for
a drawer’s (borrower’s) check and agreeing to hold the check for a number of days until depositing,
presenting, or redeeming the payment instrument.26 The only persons who may engage in deferred
presentment transactions are financial institutions as defined in s. 655.005, F.S., 27 and money services
business licensed under ch. 560, part II28 or part III,29 F.S.
There are two types of payday loan products permitted in Florida:
21 S. 516.03(1), F.S.
22 Id.; s. 516.05(1),F.S.
23 Ss. 516.03(1) and 516.07(1)(b), F.S.
24 S. 516.05(3), F.S.
25 S. 516.02(4), F.S.
26 S. 560.402(2) & (3), F.S.
27 Section 655.005, F.S., defines a “financial institution” to mean a state or federal savings or thrift association, bank,
savings back, trust company, international bank agency, international banking corporation, international branch,
international representative office, international administrative office, international trust entity, international trust com pany
representative office, qualified limited service affiliate, credit union, or an agreement corporat ion operating pursuant to s.
25 of the Federal Reserve Act, 12 U.S.C. ss. 601 et seq. or Edge Act corporation organized pursuant to s. 25(a) of the
Federal Reserve Act, 12 U.S.C. ss. 611 et seq.
28 Licensure as a money transmitter. A money transmitter is defined by s. 560.103(23), F.S., as a corporation, limited
liability company, limited liability partnership, or foreign entity qualified to do business in this state which receives
currency, monetary value, or payment instruments for the purpose of transmitt ing the same by any means, including
transmission by wire, facsimile, electronic transfer, courier, the Internet, or through bill payment services or other
businesses that facilitate such transfer within this country, or to or from this country. Money transmitters may engage in
check cashing under ch. 560, part III, F.S.
29 Licensure as a check casher. A check casher is defined by s. 560.103(6), F.S., as a person who sells currency in
exchange for payment instruments received, except travelers checks.
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Deferred presentment transaction not repayable in installments: The face amount of a check
taken for deferred presentment may not exceed $500, exclusive of fees. 30 Fees may not exceed
10 percent of the payment provided to the drawer plus a verification fee of up to $5.31 The term
of a deferred presentment agreement may not be less than seven days or greater than 31
days.32
Deferred presentment installment transaction: A deferred presentment installment transaction is
repayable in installments, has a term of 60 to 90 days, and may have an outstanding transaction
balance (exclusive of fees) of up to $1,000.33 The permissible fees are a verification fee of up to
$5 and up to 8 percent of the outstanding transaction balance on a biweekly basis.34 The
installment periods must be 13 days to one calendar month, except that the first installment
period may be longer than the remaining installment periods by not more than 15 days. 35
Prepayment penalties are prohibited.36
A deferred presentment provider may not enter into a deferred presentment transaction with a drawer
who has an outstanding deferred presentment transaction with any provider or within 24 hours of the
termination of a previous transaction.37 In order to enforce this restriction, the OFR maintains a
database against which a deferred presentment provider must verify each transaction before entering
into the deferred presentment agreement.38 A deferred presentment provider may not engage in the
rollover of a deferred presentment agreement and may not redeem, extend, or otherwise consolidate a
deferred presentment agreement with the proceeds of another deferred presentment transaction made
by it or an affiliate.39
For deferred presentment transactions not repayable in installments, if the drawer, by the end of the
deferment period, informs the deferred presentment provider in person that the drawer cannot redeem
or pay in full in cash the amount due, the drawer must be given a grace period that extends the term of
the agreement for 60 additional days.40 As a condition of receiving the grace period, the drawer must
make an appointment with a consumer credit counseling agency within seven days after the end of the
deferment period and complete counseling by the end of the grace period.41
If the drawer in a deferred presentment installment transaction informs the deferred presentment
provider in writing or in person by noon of the business day before a scheduled payment that the
drawer cannot pay in full the scheduled payment, the provider must give the drawer one opportunity to
defer a scheduled payment for no additional fee or charge. 42 The deferred payment is due after the last
scheduled installment payment, at an interval which is no shorter than the intervals between the
originally scheduled payments.43 Thus, for a deferred presentment installment transaction in which
payments are due once every two weeks, the deferred payment would be due at least two weeks after
the final installment payment is due.
A deferred presentment provider may not include in the agreement a hold harmless clause, a
confession of judgment clause, an assignment of or order for payment of wages or other compensation
for services, or a provision in which the drawer waives any claim or defense arising out of the
agreement or any provision of ch. 560, part IV, F.S.44 A deferred presentment provider must comply
30 S. 560.404(5), F.S.
31 S. 560.404(6), F.S.
32 S. 560.404(8), F.S.
33 S. 560.404(5) & (8), F.S.
34 S. 560.404(6), F.S.
35 S. 560.404(26), F.S.
36 S. 560.404(6)(c), F.S.
37 S. 560.404(19), F.S.
38 S. 560.404(19)(a) & (23), F.S.
39 S. 560.404(18), F.S.
40 S. 560.404(22), F.S.
41 Id.
42 S. 560.404, F.S.
43 Id.
44 S. 560.404(10), F.S.
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with state and federal disclosure requirements.45
Effect of the Bill
The bill amends various provisions related to consumer finance loans under ch. 516, F.S.
Surety Bond, Certificate of Deposit, or Letter of Credit in Lieu of Liquid Assets
The bill authorizes consumer finance lenders to provide the OFR a surety bond, certificate of deposit, or
irrevocable letter of credit in lieu of maintaining liquid assets. The surety bond must be issued by a
bonding company or insurance company authorized to do business in this state. The certificate of
deposit must be deposited in a financial institution.46 The letter of credit must be issued by a financial
institution.47
The surety bond, certificate of deposit, or letter of credit must be in the amount of at least $25,000.
However, a company with multiple licensed locations is authorized to provide a rider or surety bond,
certificate of deposit, or letter of credit in the amount of at least $5,000 for each additional license after
the first. The aggregate amount of the surety bond, certificate of deposit, or letter of credit required for a
company with multiple licenses is capped at $100,000.
The surety bond, certificate of deposit, or letter of credit must name the OFR as beneficiary and must
be for the use and benefit of any borrower who is injured by acts of a licensee involving fraud,
misrepresentation, or deceit, including willful imposition of illegal or excessive charges; or
misrepresentation, circumvention, or concealment of any matter required to be stated or furnished to a
borrower, where such acts are in connection with making a consumer finance loan. The OFR, or any
claimant, may bring an action in a court of competent jurisdiction on the surety bond, certificate of
deposit, or letter of credit. The surety bond, certificate of deposit, or letter of credit must be payable on
a pro rata basis, but the aggregate amount may not exceed the amount of the surety bond, certificate of
deposit, or letter of credit.
The surety bond, certificate of deposit, or letter of credit may not be canceled by the licensee, bonding
or insurance company, or financial institution except upon notice to the OFR by certified mail. A
cancellation may not take effect until 30 calendar days after receipt by the OFR of the written notice.
If the bonding or insurance company or financial institution pays a claim, it must give written notice by
certified mail to the OFR within 10 calendar days after it pays the claim. The notice must contain details
sufficient to identify the claimant and the claim or judgment paid. If the principal sum of the surety bond,
certificate of deposit, or letter of credit is reduced by one or more recoveries or payments, the
consumer finance lender must furnish to the OFR a new or additional surety bond, certificate of deposit,
or letter of credit so that the total or aggregate principal sum equals the required amount. Alternatively,
a licensee may furnish an endorsement executed by the bonding or insurance company or financial
institution reinstating the required principal amount.
The required surety bond, certificate of deposit, or letter of credit must remain in place for two years
after the consumer finance lender ceases licensed operations in this state. During the two-year period,
the OFR may allow for a reduction or elimination of the surety bond, certificate of deposit, or letter of
credit to the extent the consumer finance lender’s outstanding consumer finance loans in this state are
reduced.
Failure to maintain the existing liquid asset requirement or the proposed alternatives of the surety bond,
certificate of deposit, or letter of credit in the required amount is grounds for denial of license application
and grounds for disciplinary action against a consumer finance lender.
45 S. 560.404(13) & (20), F.S.
46 As defined in s. 655.005(1)(i), F.S.
47 As defined in s. 655.005(1)(i), F.S.
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The bill makes conforming changes under the Financial Technology Sandbox in s. 559.952, F.S.
Express Prohibition on Prepayment Penalties
The bill provides an express prohibition on prepayment penalties for consumer finance loans.
Effective Date
The bill provides an effective date of October 1, 2022.
Comparison Chart
Below is a chart comparing existing law regarding payday loans and consumer finance loans with the
changes proposed by the bill.
Payday Loans Consumer Finance Loans
(Ch. 560, Part IV, F.S.) (Ch. 516, F.S.)
Payday Loans Payday Loans HB 123
Current Law
(Non-Installment) (Installment) Proposed Changes
Loan
$500 (max) $1,000 (max) $25,000 (max) (No change)
Amount
Length of
7 - 31 days 60 - 90 days No min. or max. (No change)
Term
Lump sum at end Installments with Installments due
of loan term 13 days to 1 month monthly, semi-
in between each, monthly, or every 2
except that the first weeks
installment period
Payments (No change)
may be longer than
the remaining
installment periods
by a maximum of 15
days
APR equivalent 8% biweekly on 30% per year on
(assuming $500 loan the outstanding the first $3,000 of
amount and $5 transaction balance principal
verification fee): APR equivalent: 24% per year on
129.52% for a 31 day approx. 208% (will be principal above
Interest Rate loan, 573.57% for a 7 slightly higher as a $3,000 and up to (No change)
day loan result of the $5 $4,000
verification fee) 18% per year on
principal above
$4,000 and up to
$25,000
10% of loan $5 verification fee Fees specified in s. Adds express
amount No additional fees 516.031(3), F.S., prohibition on
$5 verification fee permitted including up to $25 prepayment
Other
No additional fees for investigating the penalties
Upfront Fees credit and character
permitted
Permitted of the borrower
No additional fees
permitted
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B. SECTION DIRECTORY:
Section 1. Amends s. 516.03, F.S., relating to application for license; fees; etc.
Section 2. Amends s. 516.031, F.S., relating to finance charge; maximum rates.
Section 3. Amends s. 516.05, F.S., relating to license.
Section 4. Amends s. 516.07, F.S., relating to grounds for denial of license or for disciplinary action.
Section 5. Amends s. 559.952, F.S., relating to Financial Technology Sandbox.
Section 6. Provides an effective date of October 1, 2022.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None. The bill will require minimal changes to the OFR’s Regulatory Enforcement and Licensing
(REAL) system, but the cost of such changes can be implemented as part of the OFR’s existing
budget resources.48
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill’s provisions that would allow a consumer finance lender to provide a surety bond, certificate of
deposit, or letter of credit in lieu of liquid assets may have a positive impact on consumer finance
lenders and consumers. Shifting from maintaining liquid assets will free up capital for lending activity. In
the event that consumer harm coincides with a consumer finance lender’s bankruptcy, the surety bond,
certificate of deposit, or letter of credit may provide consumers greater means of compensation as
compared to the liquid assets. The bill’s overall impact on the private sector, while likely positive, is
indeterminate.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to affect county or municipal governments.
48 Office of Financial Regulation, supra note 16 at p. 5.
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2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill expressly grants the Financial Services Commission49 authority to prescribe by rule forms and
procedures to implement the provisions relating to a consumer finance lender providing a surety bond,
certificate of deposit, or letter of credit in lieu of liquid assets.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
On December 1, 2021, the Insurance & Banking Subcommittee considered one amendment, which was
adopted, and reported the bill favorably as a committee substitute. The bill authorizes a consumer finance
lender to provide a letter of credit in lieu of the current statutory requirement to maintain liquid assets. The
committee substitute clarifies that such letter of credit must be issued by a financial institution.
The staff analysis has been updated to reflect the committee substitute.
49 The Financial ServicesCommission (commission) is composed of the Governor, Attorney General, Chief Financial
Officer, and Commissioner of Agriculture. S. 20.121(3), F.S. The commission members are the OFR’s agency head for
the purpose of rulemaking. S. 20.121(3)(c), F.S.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 123 2022
1 A bill to be entitled
2 An act relating to consumer finance loans; amending s.
3 516.03, F.S.; authorizing an applicant for a license
4 to make and collect loans under the Florida Consumer
5 Finance Act to provide a surety bond, certificate of
6 deposit, or letter of credit in lieu of liquid assets;
7 amending s. 516.031, F.S.; prohibiting a person
8 licensed to make and collect consumer finance loans
9 from charging prepayment penalties for loans; amending
10 s. 516.05, F.S.; authorizing an applicant for a
11 license to make and collect consumer finance loans or
12 a licensee to provide a surety bond, certificate of
13 deposit, or letter of credit in lieu of liquid assets;
14 providing requirements for such bonds, certificates of
15 deposit, and letters of credit; providing rulemaking
16 authority; amending s. 516.07, F.S.; revising grounds
17 for denial of license or disciplinary action; amending
18 s. 559.952, F.S.; revising exceptions for a licensee
19 during the Financial Technology Sandbox period;
20 providing an effective date.
21
22 Be It Enacted by the Legislature of the State of Florida:
23
24 Section 1. Subsection (1) of section 516.03, Florida
25 Statutes, is amended to read:
Page 1 of 9
CODING: Words stricken are deletions; words underlined are additions.
hb0123-01-c1
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 123 2022
26 516.03 Application for license; fees; assets, bonds,
27 certificates of deposit, or letters of credit; etc.—
28 (1) APPLICATION.—Application for a license to make loans
29 under this chapter shall be in the form prescribed by rule of
30 the commission. The commission may require each applicant to
31 provide any information reasonably necessary to determine the
32 applicant's eligibility for licensure. The applicant shall also
33 provide information that the office requires concerning any
34 officer, director, control person, member, partner, or joint
35 venturer of the applicant or any person having the same or
36 substantially similar status or performing substantially similar
37 functions or concerning any individual who is the ultimate
38 equitable owner of a 10-percent or greater interest in the
39 applicant. The office may require information concerning any
40 such applicant or person, including, but not limited to, his or
41 her full name and any other names by which he or she may have
42 been known, age, social security number, residential history,
43 qualifications, educational and business history, and
44 disciplinary and criminal history. The applicant must provide
45 evidence of liquid assets of at least $25,000 or documents
46 satisfying the requirements in s. 516.05(10). At the time of
47 making such application the applicant shall pay to the office a
48 nonrefundable biennial license fee of $625. Applications, except
49 for applications to renew or reactivate a license, must also be
50 accompanied by a nonrefundable investigation fee of $200. An
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51 application is considered received for purposes of s. 120.60
52 upon receipt of a completed application form as prescribed by
53 commission rule, a nonrefundable application fee of $625, and
54 any other fee prescribed by law. The commission may adopt rules
55 requiring electronic submission of any form, document, or fee
56 required by this act if such rules reasonably accommodate
57 technological or financial hardship. The commission may
58 prescribe by rule requirements and procedures for obtaining an
59 exemption due to a technological or financial hardship.
60 Section 2. Subsection (6) is added to section 516.031,
61 Florida Statutes, to read:
62 516.031 Finance charge; maximum rates.—
63 (6) PREPAYMENT PENALTIES PROHIBITED.—A licensee may not
64 require a borrower to pay a prepayment penalty for paying all or
65 part of the loan principal before the date on which the payment
66 is due.
67 Section 3. Subsection (10) is added to section 516.05,
68 Florida Statutes, to read:
69 516.05 License.—
70 (10)(a) In lieu of the $25,000 liquid asset requirement in
71 s. 516.03(1):
72 1. An applicant or a licensee may provide to the office a
73 surety bond in the amount of at least $25,000, issued by a
74 bonding company or insurance company authorized to do business
75 in this state.
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76 2. A company with at least one currently licensed location
77 must provide to the office a rider or surety bond, in the amount
78 of at least $5,000 for each additional license, issued by a
79 bonding company or insurance company authorized to do business
80 in this state. However, in no event may the aggregate amount of
81 the surety bond required for a company with multipl e licenses
82 exceed $100,000.
83 (b) In lieu of a surety bond, the applicant or the
84 licensee may provide evidence of a certificate of deposit or an
85 irrevocable letter of credit in the same amount of the surety
86 bond required under paragraph (a). The certificate of deposit
87 must be deposited in a financial institution, as defined in s.
88 655.005(1)(i). The letter of credit must be issued by a
89 financial institution, as defined in s. 655.005(1)(i).
90 (c) The original surety bond, certificate of deposit, or
91 letter of credit must be filed with the office, and the office
92 must be named as beneficiary. The surety bond, certificate of
93 deposit, or letter of credit must be for the use and benefit of
94 any borrower who is injured by acts of a licensee involving
95 fraud, misrepresentation, or deceit, including willful
96 imposition of illegal or excessive charges; or
97 misrepresentation, circumvention, or concealment of any matter
98 required to be stated or furnished to a borrower, where such
99 acts are in connection with a loan made under this chapter. The
100 office, or any claimant, may bring an action in a court of
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101 competent jurisdiction on the surety bond, certificate of
102 deposit, or letter of credit. The surety bond, certificate of
103 deposit, or letter of credit must be payable on a pro rata
104 basis, but the aggregate amount may not exceed the amount of the
105 surety bond, certificate of deposit, or letter of credit.
106 (d) The surety bond, certificate of deposit, or letter of
107 credit may not be canceled by the licensee, bonding or insurance
108 company, or financial institution except upon notice to the
109 office by certified mail. A cancellation may not take effect
110 until 30 calendar days after receipt by the office of the
111 notice.
112 (e) The bonding or insurance company or financial
113 institution must, within 10 calendar days after it pays a claim,
114 give notice to the office by certified mail of such payment with
115 details sufficient to identify the claimant and the claim or
116 judgment paid.
117 (f) If the principal sum of the surety bond, certificate
118 of deposit, or letter of credit is reduced by one or more
119 recoveries or payments, the licensee must furnish to the office
120 a new or additional surety bond, certificate of deposit, or
121 letter of credit so that the total or aggregate principal sum
122 equals the amount required under this subsection. Alternatively,
123 a licensee may furnish an endorsement executed by the bonding or
124 insurance company or financial institution reinstating the
125 required principal amount.
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126 (g) The required surety bond, certificate of deposit, or
127 letter of credit must remain in place for 2 years after the
128 licensee ceases licensed operations in this state. During the 2 -
129 year period, the office may allow for a reduction or elimination
130 of the surety bond, certificate of deposit, or letter of credit
131 to the extent the licensee's outstanding consumer finance loans
132 in the state are reduced.
133 (h) The commission may prescribe by rule forms and
134 procedures to implement this subsection.
135 Section 4. Paragraph (b) of subsection (1) of section
136 516.07, Florida Statutes, is amended to read:
137 516.07 Grounds for denial of license or for disciplinary
138 action.—
139 (1) The following acts are violations of this chapter and
140 constitute grounds for denial of an application for a license to
141 make consumer finance loans and grounds for any of the
142 disciplinary actions specified in subsection (2):
143 (b) Failure to maintain liquid assets of at least $25,000
144 or a surety bond, certificate of deposit, or letter of credit in
145 the amount required by s. 516.05(10) at all times for the
146 operation of business at a licensed location or proposed
147 location.
148 Section 5. Paragraph (a) of subsection (4) of section
149 559.952, Florida Statutes, is amended to read:
150 559.952 Financial Technology Sandbox.—
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151 (4) EXCEPTIONS TO GENERAL LAW AND WAIVERS OF RULE
152 REQUIREMENTS.—
153 (a) Notwithstanding any other law, upon approval of a
154 Financial Technology Sandbox application, the following
155 provisions and corresponding rule requirements are not
156 applicable to the licensee during the sandbox period:
157 1. Section 516.03(1), except for the application fee, the
158 investigation fee, the requirement to provide the social
159 security numbers of control persons, evidence of liquid assets
160 of at least $25,000 or documents satisfying the requirements in
161 s. 516.05(10), and the office's authority to investigate the
162 applicant's background. The office may prorate the license
163 renewal fee for an extension granted under subsection (7).
164 2. Section 516.05(1) and (2), except that the office shall
165 investigate the applicant's background.
166 3. Section 560.109, only to the extent that the section
167 requires the office to examine a licensee at least once every 5
168 years.
169 4. Section 560.118(2).
170 5. Section 560.125(1), only to the extent that the
171 subsection would prohibit a licensee from engaging in the
172 business of a money transmitter or payment instrument seller
173 during the sandbox period.
174 6. Section 560.125(2), only to the extent that the
175 subsection would prohibit a licensee from appointing an
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176 authorized vendor during the sandbox period. Any authorized
177 vendor of such a licensee during the sandbox period remains
178 liable to the holder or remitter.
179 7. Section 560.128.
180 8. Section 560.141, except for s. 560.141(1)(a)1., 3., 7. -
181 10. and (b), (c), and (d).
182 9. Section 560.142(1) and (2), except that the office may
183 prorate, but may not entirely eliminate, the license renewal
184 fees in s. 560.143 for an extension granted under subsection
185 (7).
186 10. Section 560.143(2), only to the extent necessary for
187 proration of the renewal fee under subparagraph 9.
188 11. Section 560.204(1), only to the extent that the
189 subsection would prohibit a licensee from engaging in, or
190 advertising that it engages in, the selling or issuing of
191 payment instruments or in the activity of a money transmitter
192 during the sandbox period.
193 12. Section 560.205(2).
194 13. Section 560.208(2).
195 14. Section 560.209, only to the extent that the office
196 may modify, but may not entirely eliminate, the net worth,
197 corporate surety bond, and collateral deposit amounts required
198 under that section. The modified amounts must be in such lower
199 amounts that the office determines to be commensurate with the
200 factors under paragraph (5)(c) and the maximum number of
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201 consumers authorized to receive the financial product or service
202 under this section.
203 Section 6. This act shall take effect October 1, 2022.
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HB 275
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 275 Loss Run Statements
SPONSOR(S): Fernandez-Barquin
TIED BILLS: IDEN./SIM. BILLS: SB 156
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 15 Y, 0 N Fortenberry Luczynski
2) State Administration & Technology 12 Y, 0 N Lee Topp
Appropriations Subcommittee
3) Commerce Committee Fortenberry Hamon
SUMMARY ANALYSIS
A loss run statement is a report from an insurer that shows the claims a specific insured has filed under that
insured’s policy during a particular period of time. This report can be provided to a prospective insurer when an
insured is shopping for a new insurance policy. 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.
Statutes enacted in 2020, established a framework regarding when, and how, insurers must provide loss run
statements to insureds. Pursuant to these statutes, for all lines of insurance written on the admitted and
surplus lines markets, insurers must provide loss run statements with a five-year loss run history within 15 days
of receiving an insured’s written request. If an insured requests a loss run statement regarding a personal lines
policy, an insurer may provide the insured information about how to obtain a loss run statement at no charge
through a consumer reporting agency. However, the insured may still ask the insurer for a loss run statement
even after receiving information from a consumer reporting agency.
The bill amends the loss run statutes that were enacted in 2020, so that they better reflect existing industry
standards. It revises the number of years of loss history that an insurer must provide from a minimum of five
years to a minimum of three years to reflect the industry practice of routinely providing insureds with a three-
year history upon request before the enactment of the 2020 statutes. The bill requires that if a personal lines
insured asks an insurer for a loss run statement after receiving information from a consumer reporting agency,
the insurer must provide that statement within 15 days. It establishes that ss. 626.9202 and 627.444, F.S.,
regarding loss run statements, do not apply to life insurers.
The bill also resolves a conflict between the 2020 statutes and an existing statute regarding loss run
statements for group health insurance policies by repealing the health-specific statute. Repealing this statute,
s. 627.6647, F.S., will create a more seamless process for requesting a loss run statement regardless of the
type of insurance for which the statement is requested. The bill establishes that, as applied to group health
insurance, a loss run statement also includes premiums paid, number of insureds on a monthly basis, and
dependent status. Finally, the bill clarifies that for group health insurance, only plan sponsors, not individual
employees covered by the group policy, may request a loss run statement.
The bill has no impact on state or local government revenues or expenditures and no direct economic impact
on the private sector.
The bill is effective upon becoming law.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h0275d.COM
DATE: 1/28/2022
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
A loss run statement1 is a report from an insurer that shows the 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 insurance 6 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 run 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 or consumer reporting
agencies.
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 However, 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.
Statutes enacted in 2020, established a framework regarding when, and how, insurers must provide
loss run statements to insureds.11 These statutes define “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.12 This definition also specifies that a loss run statement does not include supporting
claim file documents, such as copies of claim files, investigation reports, evaluation statements,
insureds’ statements, and documents protected by common law or statutory privilege. 13
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 Nov. 22, 2021).
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 Nov. 22, 2021).
8 Office of the Insurance Commissioner Washington State, https://www.insurance.wa.gov/clue-comprehensive-loss-underwriting-
exchange (last visited Nov. 19, 2021).
9 Id.
10 Florida Association of Insurance Agents, Loss Run Statements, https://www.faia.com/resources -(1)/legislative-summaries/300-
worders/2020-300-worders/loss-run-statements (last visited Dec. 16, 2021). See also Forbes Advisor, What is a C.L.U.E. Report for
Insurance?, https://www.forbes.com/advisor/homeowners -insurance/clue-report/ (last visited Dec. 16, 2021).
11 See ss. 626.9202 and 627.444, F.S.
12 Id.
13 Id.
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Pursuant to these statutes, for all lines of insurance written on the admitted and surplus lines markets,
insurers must provide loss run statements with a five-year loss run history within 15 days of receiving
insured’s written requests.14 If an insured requests a loss run statement regarding a personal lines
policy, an insurer may provide the insured information about how to obtain a loss run statement at no
charge through a consumer reporting agency.15 However, the insured may still ask the insurer for a loss
run statement even after receiving information from a consumer reporting agency.16 An insurer is
prohibited from charging an insured for the first loss run statement that an insured requests annually. 17
Additionally, an insurer is not required to provide loss reserve information as part of a loss run
statement provided to an insured.18
Effect of the Bill
The bill amends the loss run statutes that were enacted in 2020, so that they better reflect existing
industry standards. It revises the number of years of loss history that an insurer must provide from a
minimum of five years to a minimum of three years to reflect the industry practice of routinely providing
insureds with a three-year history upon request before the enactment of the 2020 statutes. The bill
requires that if a personal lines insured asks an insurer for a loss run statement after receiving
information from a consumer reporting agency, the insurer must provide that statement within 15 days.
It establishes that ss. 626.9202 and 627.444, F.S., regarding loss run statements, do not apply to life
insurers.19
The bill also resolves a conflict between the 2020 statutes and an existing statute regarding loss run
statements for group health insurance policies by repealing the health-specific statute.20 Repealing this
statute will create a more seamless process for requesting a loss run statement regardless of the type
of insurance for which the statement is requested. The bill establishes that, as applied to group health
insurance, a loss run statement also includes premiums paid, number of insureds on a monthly basis,
and dependent status. Finally, the bill clarifies that for group health insurance, only plan sponsors, not
individual employees covered by the group policy, may request a loss run statement.
B. SECTION DIRECTORY:
Section 1. Amends s. 626.9202, F.S., relating to loss run statements for all lines of insurance.
Section 2. Amends s. 627.444, F.S., relating to loss run statements for all lines of insurance.
Section 3. Repeals s. 627.6647, F.S., relating to release of claims experience.
Section 4. Provides that the bill is effective upon becoming law.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
14 Id.
15 Ss. 626.9202(2)(b) and 627.444(2)(b), F.S.
16 Id.
17 Ss. 626.9202(6) and 627.444(6), F.S.
18 Ss. 626.9202(5) and 627.444(5), F.S.
19 Because loss run statements are used to shop for new insurance, and life insurance claims are only made after the death of an
insured, loss run statements are not necessary for this type of policy.
20 See s. 627.6647, F.S.
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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.
III. 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:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 275 2022
1 A bill to be entitled
2 An act relating to loss run statements; amending ss.
3 626.9202 and 627.444, F.S.; revising the definition of
4 the term "loss run statement"; specifying the entities
5 that must receive requests for loss run statements;
6 specifying that insurers must provide loss run
7 statements within a specified timeframe under certain
8 circumstances; revising the required claims history in
9 loss run statements; providing applicability; limiting
10 loss run statement requests with respect to group
11 health insurance policies to group policyholders;
12 repealing s. 627.6647, F.S., relating to release of
13 claims experience; providing an effective date.
14
15 Be It Enacted by the Legislature of the State of Florida:
16
17 Section 1. Subsections (1), (2), and (4) of section
18 626.9202, Florida Statutes, are amended, and subsections (7) and
19 (8) are added to that section, to read:
20 626.9202 Loss run statements for all lines of insurance.—
21 (1) As used in this section, the term:
22 (a) "Loss run statement" means a report that contains the
23 policy number, the period of coverage, the number of claims, the
24 paid losses on all claims, and the date of each loss. T he term
25 does not include supporting claim file documentation, including,
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26 but not limited to, copies of claim files, investigation
27 reports, evaluation statements, insureds' statements, and
28 documents protected by a common law or statutory privilege. As
29 applied to group health insurance, the term means a report that
30 also contains the premiums paid, the number of insureds on a
31 monthly basis, and the dependent status under the reported
32 policy.
33 (b) "Provide" means to electronically send a document or
34 to allow access through an electronic portal to view or generate
35 a document.
36 (2) Notwithstanding any other law, an insurer shall
37 provide to an insured within 15 calendar days after an
38 individual or entity designated by the insurer receives receipt
39 of the insured's written request, either:
40 (a) A loss run statement; or
41 (b) For personal lines of insurance, information on how to
42 obtain a loss run statement at no charge through a consumer
43 reporting agency. However, this section does not prohibit an
44 insured from requesting a loss run statement after receiving
45 information from a consumer reporting agency, in which case the
46 insurer shall then provide the loss run statement within 15
47 calendar days after the individual or entity designated by the
48 insurer receives the insured's subsequent written request.
49 (4) A loss run statement provided pursuant to this section
50 must contain a claims history with the insurer for the preceding
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51 3 5 years or, if the claims history is less than 3 5 years, a
52 complete claims history with the insurer.
53 (7) This section does not apply to a life insurer as
54 defined in s. 624.602.
55 (8) For group health insurance, only the group
56 policyholder may request and be provided a loss run statement
57 pursuant to this section.
58 Section 2. Subsections (1), (2), and (4) of section
59 627.444, Florida Statutes, are amended, and subsections (7) and
60 (8) are added to that section, to read:
61 627.444 Loss run statements for all lines of insurance. —
62 (1) As used in this section, the term:
63 (a) "Loss run statement" means a report that contains the
64 policy number, the period of coverage, the number of claims, the
65 paid losses on all claims, and the date of each loss. The term
66 does not include supporting claim file documentation, including,
67 but not limited to, copies of claim files, investigation
68 reports, evaluation statements, insureds' statements, and
69 documents protected by a common law or statutory privilege. As
70 applied to group health insurance, the term means a report that
71 also contains the premiums paid, the number of insureds on a
72 monthly basis, and the dependent status under the reported
73 policy.
74 (b) "Provide" means to electronically send a document or
75 to allow access through an electronic portal to view or generate
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76 a document.
77 (2) Notwithstanding any other law, an insurer shall
78 provide to an insured within 15 calendar days after an
79 individual or entity designated by the insurer receives receipt
80 of the insured's written request, either:
81 (a) A loss run statement; or
82 (b) For personal lines of insurance, information on how to
83 obtain a loss run statement at no charge through a consumer
84 reporting agency. However, this section does not prohibit an
85 insured from requesting a loss run statement after receiving
86 information from a consumer reporting agency, in which case the
87 insurer shall then provide the loss run statement within 15
88 calendar days after the individual or entity designated by the
89 insurer receives the insured's subsequent written request.
90 (4) A loss run statement provided pursuant to this section
91 must contain a claims history with the insurer for the preceding
92 3 5 years or, if the claims history is less than 3 5 years, a
93 complete claims history with the insurer.
94 (7) This section does not apply to a life insurer as
95 defined in s. 624.602.
96 (8) For group health insurance, only the group
97 policyholder may request and be provided a loss run statement
98 pursuant to this section.
99 Section 3. Section 627.6647, Florida Statutes, is
100 repealed.
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101 Section 4. This act shall take effect upon becoming a law.
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COMMERCE COMMITTEE
HB 275 by Rep. Fernandez-Barquin
Loss Run Statements
AMENDMENT SUMMARY
February 1, 2022
Amendment 1 by Rep. Fernandez-Barquin (line 48):
• Clarifies that if a surplus lines agent provides a loss run statement to an insured on
behalf of the insurer, the insurer is considered to have responded to an insured’s request
for a loss run statement.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 275 (2022)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Fernandez-Barquin offered the following:
3
4 Amendment (with title amendment)
5 Between lines 48 and 49, insert:
6 The insurer is deemed to be in compliance with this subsection
7 if the surplus lines agent provides the loss run statement on
8 behalf of the insurer.
9
10 -----------------------------------------------------
11 T I T L E A M E N D M E N T
12 Remove lines 2-3 and insert:
13 An act relating to loss run statements; amending s. 626.9202,
14 F.S.; revising the definition of the term "loss run statement";
15 specifying the entities that must receive requests for loss run
16 statements; specifying that insurers must provide loss run
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 275 (2022)
Amendment No. 1
17 statements under certain circumstances; providing construction;
18 revising the required claims history in loss run statements;
19 providing applicability; limiting loss run statement requests
20 with respect to group health insurance policies to group
21 policyholders; amending s. 627.444; revising the definition of
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CS/HB 481
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 481 Temporary Underground Power Panels
SPONSOR(S): Tourism, Infrastructure & Energy Subcommittee, Duggan
TIED BILLS: IDEN./SIM. BILLS: SB 1332
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Tourism, Infrastructure & Energy Subcommittee 15 Y, 0 N, As CS Walsh Keating
2) Local Administration & Veterans Affairs 16 Y, 0 N Leshko Miller
Subcommittee
3) Commerce Committee Walsh Hamon
SUMMARY ANALYSIS
When a residential home is under construction on undeveloped property, the homebuilder may arrange for
temporary electric service to provide power to the property through the construction process. If the residence
is ultimately going to receive power through an underground service line when the resident takes occupancy, a
reduced cost alternative to a temporary power pole on a construction site is temporary underground (TUG)
service.
A TUG service connection is available for underground residential services where the permanent approved
meter socket, meter, and downpipe are configured such that they can be used for temporary service. After the
homeowner takes occupancy of the house, the TUG connection installed during construction is then used to
provide electric service to the residence.
Before installing TUG service on a construction site, a builder must get approval from the county or
municipality, often through the county or municipality’s building department.
The National Electrical Code (NEC) is published by the National Fire Protection Association, and serves to
safeguard persons and property from hazards arising from the use of electricity.
The bill provides that neither counties nor municipalities may enact any ordinance, regulation, or policy that
prevents, or has the effect of preventing, an electric utility from installing a temporary underground power
panel, so long as the panel meets the requirements of Article 590 of the NEC, 2020 edition.
The bill defines the term “temporary underground power panel” and provides that a county or municipality that
has conducted an inspection of a temporary underground power panel may not require a subsequent
inspection of the panel as a condition of issuance of a Certificate of Occupancy.
The bill does not impact state government revenues or expenditures. The bill appears to have an indeterminate
impact on local government revenues and expenditures, as local codes relating to TUG service vary by
jurisdiction.
The bill would be effective July 1, 2022.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Present Situation
Temporary Underground Power
When a residential home is under construction on undeveloped property, the homebuilder may arrange
for temporary electric service to provide power to the property through the construction process.
Builders may opt for temporary power poles, which allow them to get enough energy for the necessary
equipment on the job site.1 If the residence is ultimately going to receive power through an underground
service line when the resident takes occupancy, a reduced cost alternative to a temporary power pole is
temporary underground (TUG) service.2
The TUG alternative is available for underground residential services where the permanent approved
meter socket, meter, and downpipe are configured such that they can be used for temporary service. 3
In local jurisdictions that allow TUG service, after construction reaches a certain point and a temporary
inspection takes place, the electric utility installs the permanent service to the meter socket. 4 The
installed permanent service is then used for construction until the Certificate of Occupancy is obtained.5
After the homeowner takes occupancy of the house, the permanent connection installed for TUG
service during construction is then used to provide electric service to the residence.
Before installing TUG service on a construction site, a builder must get approval from the county or
municipality, often through the county or municipality’s building department. 6 Many, but not all, Florida
counties and municipalities offer TUG agreements. An internet search reflects that some of the counties
and municipalities that have a TUG program include: Orange County, Osceola County, Palm Beach
County, Pasco County, Pinellas County, Volusia County, Altamonte Springs, Fort Myers, Melbourne,
Orlando, and Tarpon Springs.
National Electrical Code
The National Electrical Code (NEC) is published by the National Fire Protection Association and is
updated every couple of years.7 All 50 states have adopted the NEC, as it serves to safeguard persons
and property from hazards arising from the use of electricity. 8 The most recent version of the NEC was
published in 2020.9 Article 590 of the NEC covers temporary electrical power and lighting installations. 10
1 Step-by-Step Guide: Temporary Construction Site Power, PowerPlus, https://www.powerplus.com/industrial-power-
blog/construction-site-temporary-power/ (last visited Jan. 27, 2022).
2 See, e.g., Florida Power and Light, Electric Service Standards (April 2021), at 10.
3 See, e.g., Id.
4 See, e.g., Orlando Utilities Commission, How to Obtain Temporary Underground Service,
https://www.ouc.com/docs/customer-brochures/broc_tug.pdf?sfvrsn=9769e278_6 (last visited Jan. 27, 2022); and Electric
Service Standards at 10.
5 See, e.g., Id.
6 See, e.g., Id.
7 National Fire Protection Association, NFPA 70, https://www.nfpa.org/codes-and-standards/all-codes-and-standards/list-
of-codes-and-standards/det ail?code=70 (last visited Jan. 27, 2022).
8 Id.; National Fire Protection Association, National Electrical Code, 29 (2020), available at https://www.nfpa.org/codes-
and-standards/all-codes-and-standards/list-of-codes-and-standards/detail?c ode= 70 (last visited Jan. 27, 2021).
9 National Fire Protection Association, NFPA 70.
10 National Fire Protection Association, National Electrical Code at 504.
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Effect of the Bill
The bill provides that neither counties nor municipalities may enact any ordinance, regulation, or policy
that prevents, or has the effect of preventing, an electric utility from installing a temporary underground
power panel, so long as the panel meets the requirements of Article 590 of the NEC, 2020 edition.
The bill defines the term “temporary underground power panel” as a permanent meter base that
includes a meter socket, meter, and downpipe, to which power is provided through an underground
service line by an electric utility pursuant to its tariffs or service standards. Per the definition, the
temporary underground power panel must be permanently attached to a block residential structure and
be intended for use in providing permanent service to the residential structure upon issuance of the
Certificate of Occupancy.
Under the bill, a county or municipality that has conducted an inspection of a temporary underground
power panel may not require a subsequent inspection of the panel as a condition of issuance of a
Certificate of Occupancy.
B. SECTION DIRECTORY:
Section 1: Creates s. 125.488, F.S., relating to county ordinances, regulations, and policies concerning
temporary underground power panels.
Section 2: Creates s. 166.0484, F.S., relating to municipal ordinances, regulations, and policies
concerning temporary underground power panels.
Section 3: Provides that the bill shall take effect July 1, 2022.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
Indeterminate. See Fiscal Comments.
2. Expenditures:
Indeterminate. See Fiscal Comments.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Homebuilders may have fewer expenditures on fees associated with TUG inspections.
D. FISCAL COMMENTS:
Local government codes relating to TUG service, including fees and inspection requirements, vary
across the state. Thus, the bill’s impact may vary by jurisdiction.
III. COMMENTS
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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 expenditure 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.
B. RULE-MAKING AUTHORITY:
The bill does not require or authorize rulemaking.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On January 12, 2022, the Tourism, Infrastructure & Energy Subcommittee adopted a strike-all amendment
to the bill and reported the bill favorably as a committee substitute. The amendment defines the term
“temporary underground power panel,” corrects a reference to the National Electrical Code, and clarifies
that a county or municipality may not require a subsequent inspection of a temporary underground power
panel as a condition of issuance of a Certificate of Occupancy.
This analysis is drafted to the committee substitute as approved by the Tourism, Infrastructure & Energy
Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 481 2022
1 A bill to be entitled
2 An act relating to temporary underground power panels;
3 creating ss. 125.488 and 166.0484, F.S.; prohibiting
4 counties and municipalities from enacting ordinances,
5 regulations, or policies that prevent certain electric
6 utilities from installing temporary underground power
7 panels and from requiring subsequent inspections of
8 such panels as a condition of a Certificate of
9 Occupancy under specified conditions; defining the
10 term "temporary underground power panel"; providing an
11 effective date.
12
13 Be It Enacted by the Legislature of the State of Florida:
14
15 Section 1. Section 125.488, Florida Statutes, is created
16 to read:
17 125.488 Ordinances, regulations, and policies concerning
18 temporary underground power panels.—
19 (1) A county may not enact any ordinance, regulation, or
20 policy that prevents or has the effect of preventing an electric
21 utility, as defined in s. 366.02(2), from installing a temporary
22 underground power panel if the temporary underground power panel
23 meets the requirements of Article 590 of the National Electrical
24 Code, 2020 edition, during the construction and installation of
25 the temporary underground power panel. After the county has
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26 conducted an inspection of the temporary underground power
27 panel, the county may not require a subsequent inspection of the
28 temporary underground power panel as a condition of issuance of
29 the Certificate of Occupancy.
30 (2) As used in this section, the term "temporary
31 underground power panel" means a permanent meter base that
32 includes a meter socket, meter, and downpipe, to which power is
33 provided through an underground service line by an electric
34 utility pursuant to its tariffs or service standards, that is
35 permanently attached to a block residential structure, provides
36 temporary power for construction of the residential structure,
37 and is intended for use in providing permanent service to the
38 residential structure upon issuance of the Certificate of
39 Occupancy.
40 Section 2. Section 166.0484, Florida Statutes, is created
41 to read:
42 166.0484 Ordinances, regulations, and policies concerning
43 temporary underground power panels.—
44 (1) A municipality may not enact any ordinance,
45 regulation, or policy that prevents or has the effect of
46 preventing an electric utility, as defined in s. 366.02(2), from
47 installing a temporary underground power panel if the temporary
48 underground power panel meets the requirements of Article 590 of
49 the National Electrical Code, 2020 edition, during the
50 construction and installation of the temporary underground power
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CS/HB 481 2022
51 panel. After the municipality has conducted an inspection of the
52 temporary underground power panel, the municipality may not
53 require a subsequent inspection of the temporary underground
54 power panel as a condition of issuance of the Certificate of
55 Occupancy.
56 (2) As used in this section, the term "temporary
57 underground power panel" means a permanent meter base that
58 includes a meter socket, meter, and downpipe, to which power is
59 provided through an underground service line by an electric
60 utility pursuant to its tariffs or service standards, that is
61 permanently attached to a block residential structure, provides
62 temporary power for construction of the residential structure,
63 and is intended for use in providing permanent service to the
64 residential structure upon issuance of the Certificate of
65 Occupancy.
66 Section 3. This act shall take effect July 1, 2022.
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HM 641
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HM 641 Internal Revenue Service Reporting Requirements
SPONSOR(S): Rommel
TIED BILLS: IDEN./SIM. BILLS: SM 982
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Ways & Means Committee 14 Y, 3 N LaTorre Aldridge
2) Commerce Committee Hinshelwood Hamon
SUMMARY ANALYSIS
HM 641 urges the Congress of the United States to oppose the Internal Revenue Service (IRS) reporting
requirements placed on financial institutions, small businesses, and law abiding citizens, which are included in
the Biden administration’s tax increase proposal.
Legislative memorials are not subject to the Governor’s veto power and are not presented to the Governor for
review. Memorials have no force of law, as they are mechanisms for formally petitioning the federal
government to act on a particular subject.
The memorial does not have a fiscal impact on the state or local governments.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h0641b.COM
DATE: 1/28/2022
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
The Biden Administration Revenue Proposals
In the Biden Administration’s proposal released in May 2021, a provision provided the IRS increased
scrutiny over bank accounts.1 The proposal would require banks, credit unions, and other financial
companies to report to the IRS gross deposits and withdrawals for accounts that have gross deposits or
withdrawals of more than $600.2 Under a revised proposal, the threshold was raised to $10,000.3 The
financial institution’s report to the IRS would include a breakdown for physical cash, transactions with a
foreign account, and transfers to and from another account with the same owner.4
In the current version of the Build Back Better Act passed by the United States House of
Representatives on November 19, 2021, the provision requiring additional reporting by banks, credit
unions, and other financial companies was omitted. 5
Current Law on Reporting of Cash Transactions and Suspicious Activity
Current federal law requires a person to report to the IRS cash transactions of more than $10,000
received in a trade or business.6 “Person” means an individual, company, corporation, partnership,
association, trust, or estate.7 “Cash” includes coins and currency of the United States or any foreign
country.8 Cash also includes a cashier’s check, bank draft, traveler’s check, or money order with a face
amount of $10,000 or less that a person receives for either a designated reporting transaction or any
transaction in which the person knows the payer is trying to avoid a report.9
Banks and other financial institutions are required to report each deposit, withdrawal, exchange of
currency or other payment or transfer, by, though, or to the bank or financial institution which involves a
transaction in currency of more than $10,000, including cash purchases of cashier’s checks, treasurer’s
checks, bank checks, bank drafts, traveler’s checks, and money orders with a face value of more than
$10,000, to the Financial Crimes Enforcement Network (FinCEN), which is a bureau of the United
States Department of the Treasury.10
1 General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals, United States Department of the
Treasury, May 2021, https://home.treasury.gov/system/files/131/General -Explanations-FY 2022.pdf (Last visited Jan. 27,
2022).
2 Id.
3 FACT SHEET: Tax Compliance Proposals Will Improve Tax Fairness While Protecting Taxpayer Privacy, United States
Department of Treasury, Oct. 19, 2021, https://home.treasury.gov/news/press-releases/jy0415 (Last visited Jan. 27,
2022).
4 General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals , supra note 1.
5 Build Back Better Act, H.R. 5376, 117th Cong. (2021) https://www.congress.gov/bill/117th-congress/house-bill/5376
(Last visited Jan. 27, 2022).
6 Internal Revenue Code (IRC), s. 6050I. Cash payment report helps government combat money laundering, IRS,
https://www.irs.gov/newsroom/cash-payment-report-helps-government -combat-money-laundering (Last visited Jan. 27,
2022).
7 IRC, s. 7701(a)(1).
8 IRC, s. 6050I(d)
9 See IRC, s. 6050I(d) and (f). A “designated reporting transaction” is the retail sale of tangible personal property that’s
generally suited for personal use, expected to last at least one year and has a sales price of more than $10,000, such as
sales of automobiles, jewelry, mobile homes, and furniture, the sale of a collectible, or the sale of travel and entertainment
if the total price of the items for the same trip or entertainment event is more than $10,000. Cash payment report helps
government combat money laundering, IRS, https://www.irs.gov/newsroom/cash-payment-report-helps-government-
combat-moneylaundering, (Last visited Jan. 13, 2022).
10 Id. 31 C.F.R. ss. 1010.306, 1010.311, and 1010.313; and 31 U.S.C. ss. 5312 and 5313
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Banks and other financial institutions are also required to file suspicious activity reports (SARs) with
FinCEN.11 A SAR is required following the discovery of: insider abuse involving any amount, violations
aggregating $5,000 or more where a suspect can be identified, violations aggregating $25,000 or more
regardless of a potential suspect, or transactions aggregating $5,000 or more that involve potential
money laundering or violations of the Bank Secrecy Act.12
Leak of Tax Return Data
On June 8th, 2021, ProPublica published an article which revealed a massive leak of tax return data
from the IRS and brought into question IRS’s ability to protect taxpayer information.13
The Infrastructure Investment and Jobs Act
The Infrastructure Investment and Jobs Act (Act) was signed into law on November 15, 2021.14 The Act
adds additional reporting requirements for a broker that facilitates the movement of “digital assets,” or
cryptocurrency.15 Applicable to returns required to be filed and statements required to be furnished after
December 31, 2023, the Act:
Expands the definition of broker to include “any person who (for consideration) is responsible for
regularly providing any service effectuating transfers of digital assets on behalf of another
person.”16 A broker is required to file a return with the IRS showing the name and address of
each customer with details regarding gross proceeds and other information.17
Modifies the definition of “specified security” to include digital assets.
Requires brokers to report transfers of digital assets that are not otherwise subject to reporting
to the IRS.18
The act also expands the definition of cash for purposes of cash reporting to include digital assets. By
including digital assets in the definition of cash, the Act extends the reporting requirements for
transactions of more than $10,000 in cash to transactions involving digital assets of more than $10,000.
The new reporting requirement requires a person that is currently required to comply with cash
reporting requirements to collect information and report to the IRS details of transactions involving
digital assets, or cryptocurrency transactions, of more than $10,000.19
Legislative Memorials
Legislative memorials are not subject to the Governor’s veto power and are not presented to the
Governor for review. Memorials have no force of law, as they are mechanisms for formally petitioning
the federal government to act on a particular subject.
11 12 C.F.R. 21.11; 31 C.F.R. ss. 1010.320 and 1020.320; s. 655.50, F.S.
12 National Credit Union Administration, Suspicious Activity Reports, https://www.ncua.gov/regulation-
supervision/manuals-guides/suspicious-activity-report (last visited Jan. 27, 2022).
13 The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax
https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-
income-tax (last visited Jan. 27, 2022)
14 Infrastructure and Jobs Act, Pub. L. No. 117-58 (2021), § 80603, https://www.congress.gov/bill/117th-congress/house-
bill/3684/text (Last visited Jan. 27, 2022).
15 Id. IRC, s. 6045(g)(3)(D) defines “digital asset” to mean, except as otherwise provided by the [United States] Secretary
[of the Treasury], any digital representation of value which is recorded on a cryptographically secured distributed ledger or
any similar technology as specified by the Secretary .
16 Id. IRC, s. 6045(c)(1)(D).
17 Id. IRC, s. 6045(a).
18 Id. IRC, s. 6045A(d).
19 Id. IRC, s. 6050I(d).
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Proposed Changes
The House memorial would urge the United States Congress to oppose the reporting requirements
placed on financial institutions, small businesses, and law abiding citizens, which are included in the
Biden administration’s tax increase proposal, and would dispatch a message to that effect.
Copies of the memorial will be sent by Florida’s Secretary of State to the President of the United
States, the President of the United States Senate, the Speaker of the United States House of
Representatives, and each member of the Florida delegation to the United States Congress.
The memorial contains seven whereas clauses. The clauses outline concerns regarding data privacy
and security relating to a proposed expansion of reporting requirements as well as concerns regarding
additional regulations imposed on financial institutions.
B. SECTION DIRECTORY:
Not applicable.
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.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable.
2. Other:
N/A
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B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
R E P R E S E N T A T I V E S
HM 641 2022
1 House Memorial
2 A memorial to the Congress of the United States,
3 urging Congress to oppose the intrusive Internal
4 Revenue Service reporting requirements placed on
5 financial institutions included in the Biden
6 administration's tax increase proposal.
7
8 WHEREAS, the Biden administration's tax increase proposal
9 for fiscal year 2022 includes a number of provisions that would
10 place undue burdens on financial institutions, small businesses,
11 and law-abiding citizens, and
12 WHEREAS, one proposal seeks to increase tax payment
13 enforcement measures by requiring peer-to-peer payment
14 transaction applications as well as financial institutions to
15 annually report aggregated data on all account inflows and
16 outflows of $10,000 or more to the Internal Revenue Service
17 (IRS), and
18 WHEREAS, the reports would also disclose whether
19 transactions involved physical cash, foreign accounts, or
20 transfers between accounts with the same owner, negatively
21 impacting the privacy rights of Americans, compliance costs, and
22 low-income communities, and
23 WHEREAS, the proposal's $10,000 threshold for reporting
24 would ensnare many active financial institution accounts,
25 including those owned by individuals and small businesses,
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HM 641 2022
26 requiring the financial data of the majority of those accounts
27 to be sent to the IRS, an agency that experiences more than one
28 billion cyberattacks each year, and
29 WHEREAS, a June 2021 ProPublica article revealed a massive
30 leak of tax return data from the IRS, demonstrating that the
31 agency is unable or unwilling to protect taxpayer information,
32 and given its many vulnerabilities in cybersecurity, the IRS
33 should not be trusted with more private information, and
34 WHEREAS, by holding financial institutions responsible for
35 data collection and reporting, the proposal would force
36 financial institutions to increase spending on additional
37 staffing, technology, and other resources, which could then be
38 passed on to the depositors, thus burdening tax-compliant
39 citizens and small businesses, and
40 WHEREAS, the Biden administration's tax increase proposal
41 fails to consider cybersecurity risks and unjust burdens on law -
42 abiding citizens, financial institutions, and small businesses,
43 and the United States Congress should oppose this unprecedented
44 intrusion into the privacy rights of Americans, NOW, THEREFORE,
45
46 Be It Resolved by the Legislature of the State of Florida:
47
48 That the Congress of the United States is urged to oppose
49 the intrusive Internal Revenue Service reporting requirements
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50 placed on financial institutions included in the Biden
51 administration's tax increase proposal.
52 BE IT FURTHER RESOLVED that copies of this memorial be
53 dispatched to the President of the United States, to the
54 President of the United States Senate, to the Speaker of the
55 United States House of Representatives, and to each member of
56 the Florida delegation to the United States Congress.
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CS/HB 831
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 831 Licensure Requirements for Land Surveyors and Mappers
SPONSOR(S): Regulatory Reform Subcommittee, Mariano
TIED BILLS: IDEN./SIM. BILLS: SB 1286
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform Subcommittee 12 Y, 5 N, As CS Thompson Anstead
2) Commerce Committee Thompson Hamon
SUMMARY ANALYSIS
Chapter 472, F.S., governs the practice of land surveying and mapping in Florida. Through the Florida Board of
Professional Surveyors and Mappers (Board), the Department of Agriculture and Consumer Services (DACS)
licenses and regulates professional surveyors and mappers in the state. Current law provides education and
experience prerequisites that must be met in order to be eligible to take the licensure examination to practice
as a surveyor and mapper.
Currently, applicants must at least have a bachelor’s degree in a related course of study and a minimum of
four years of experience working under a professional surveyor in order to take the licensure examination.
Applicants with a bachelor’s degree in an unrelated course of study must have six years of experience, and
complete a minimum of 25 semester hours from a college or university approved by the board in surveying
and mapping related subjects in order to take the licensure examination.
The bill provides additional pathways to qualify to take the licensure examination as follows:
Allows applicants with a high school diploma or an associate’s degree, who complete 25 hours of
coursework in surveying and mapping, and six years of experience under a professional surveyor
and mapper to be eligible to take the licensure examination.
Allows applicants who qualified to obtain a surveying and mapping license in another state that hold a
license to practice in another state and have two years of experience in the active practice of
surveying and mapping to be eligible to take the licensure examination.
Allows applicants with a registered apprenticeship certificate in surveying and mapping and an
experience record of two or more years in the active practice of mapping to be eligible to take the
licensure examination.
The bill does not appear to have a fiscal impact on state or local government.
The effective date of the bill is July 1, 2022.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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DATE: 1/28/2022
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Land Surveying and Mapping
Chapter 472, F.S., governs the practice of land surveying and mapping in Florida. Through the Florida
Board of Professional Surveyors and Mappers (Board), the Department of Agriculture and Consumer
Services (DACS) licenses and regulates professional surveyors and mappers in the state. 1
These regulations include, but are not limited to:2
Examination;
Licensure, including certificates of authorization;
Continuing education;
Seals;
Standards of practice;
Prohibitions and penalties;
Disciplinary guidelines;
Investigative procedures;
Power to administer oaths, take depositions, and issue subpoenas;
Unlicensed activities; and
Elevation certificates.
According to DACS, licensed surveyors and mappers make exact measurements and determine
property boundaries. They provide data relevant to the shape, contour, gravitation, location, elevation
or dimension of land or land features on or near the earth's surface for engineering, mapmaking,
mining, land evaluation, construction and other purposes. 3
The Board has authority to adopt rules to implement ch. 472, F.S., subject to approval by DACS.4
Effective October 1, 2009, the regulation of professional surveyors and mappers by the Board was
transferred from the Department of Business and Professional Regulation (DBPR) to DACS.5
According to DACS, there are 2,579 surveyors and mappers currently licensed in Florida.6
Licensing Examinations
Current law provides education and experience prerequisites that must be met in order to be eligible to
take the licensure examination to practice as a surveyor and mapper or as a surveyor and mapper
intern.7 All applicants must be approved by the Board prior to taking any examination.
All pathways to licensure as a professional surveyor and mapper in Florida require at least a four-year
college degree. The prerequisites to take the licensure examination to practice as a surveyor and
mapper are as follows:
1 S. 472.007, F.S.
2 See ch. 472, F.S.
3 Florida Department of Agriculture and Consumer Services, Consumer Services, Surveyors and Mappers,
https://www.fdacs.gov/Business -Services/Surveyors-and-Mappers (last visited Jan. 5, 2022).
4 S. 472.008, F.S.
5 Ch. 2009-66, Laws of Fla.
6 Email from Carlos Nathan, Legislative Affairs Director, Department of Agriculture and Consumer Services, Re: Surveyors Data,
(Jan. 6, 2022).
7 S. 472.013, F.S.
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A bachelor’s degree in surveying and mapping or in a similarly titled program:
o Four or more years of work experience under a professional surveyor;
o All four years of work experience must have been in responsible charge of the accuracy
and correctness of the surveying work performed; or
A bachelor’s degree in a course of study other than surveying and mapping:
o Six or more years of work experience under a professional surveyor;
o Five of the six years of experience must have been in responsible charge of the
accuracy and correctness of the surveying work performed.
o These applicants must also complete a minimum of 25 semester hours from a college
or university approved by the board in surveying and mapping subjects or in any
combination of courses in civil engineering, surveying, mapping, mathematics,
photogrammetry, forestry, or land law and the physical sciences.
The following is a chart outlining these education and work experience prerequisites:
Type of Applicant Type of Degree Work Experience
Surveyor and Mapper Surveying and Mapping 4 or more years
(Option 1) Bachelor’s Degree subordinate to surveyor
and mapper and in
“responsible charge” of
work performed
Surveyor and Mapper Non-Surveying and 6 or more years
(Option 2) Mapping Bachelor’s subordinate to surveyor
Degree; and and mapper of which
25 semester hours 5 years must be in
surveying and mapping “responsible charge” of
subjects work performed
The board, by rule,8 is authorized to establish fees for examination. The initial application and
examination fee must not exceed $125 plus the actual per applicant cost to DACS to purchase the
examination from the National Council of Engineering Examiners or a similar national organization. The
examination fee must be sufficient to cover the cost of obtaining and administering the examination and
is refundable if the applicant is found ineligible to sit for the examination. The application fee is
nonrefundable.9
Exiled Foreign-Trained Professionals
Exiled foreign-trained professionals that wish to become surveyors and mappers must have graduated
with an appropriate college degree from a college or university and must have lawfully practiced the
profession for at least three years. Specifically, an exiled professional is eligible for examination if the
exiled professional satisfies all of the following seven requirements:
Immigrated to the United States after leaving the person’s home country because of political
reasons, provided the country is located in the Western Hemisphere and does not have
diplomatic relations with the United States;
Applied to DACS and submits a fee;
Was a resident of this state immediately preceding the person’s application;
Demonstrated to DACS, through submission of documentation verified by the applicant’s
respective professional association in exile, that the applicant graduated with an appropriate
professional or occupational degree from a college or university.
8 R. 5J-17.070, F.S.
9 S. 472.011, F.S.
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o However, DACS may not require receipt of any documentation from the Republic of
Cuba as a condition of eligibility under this section;
Lawfully practiced the profession for at least 3 years;
Prior to 1980, successfully completed an approved course of study pursuant to chapters 74-105
and 75-177, Laws of Florida; and
Presented a certificate demonstrating the successful completion of a continuing education
program, which offers a course of study that will prepare the applicant for the examination.
o The department shall develop rules for the approval of such programs for the board.10
Upon request of a person who meets the requirements for foreign-trained professionals and submits an
examination fee, DACS, for the Board, is required to conduct a written practical examination that tests
the person’s current ability to practice the profession competently in accordance with the actual practice
of the profession. The fees charged for the examinations are established by DACS, for the board, by
rule,11 and must be sufficient to develop or to contract for the development of the examination and its
administration, grading, and grade reviews.12
Licensure by Endorsement – Out of State Applicants
The board is required to certify as qualified for a license by endorsement an applicant who, at the time
of application, holds a valid license to practice surveying and mapping issued by another state or
territory of the United States, if:
The license was issued before July 1, 1999; the applicant has passed a national, regional, state,
or territorial licensing examination that is substantially equivalent to the examination required by
s. 472.013, F.S.; and the applicant has a specific experience record of at least eight years as a
subordinate to a registered surveyor and mapper in the active practice of surveying and
mapping, six years of which must be of a nature indicating that the applicant was in responsible
charge of the accuracy and correctness of the surveying and mapping work performed; or
The criteria for issuance of the license by another state are substantially the same as the
licensure criteria that existed in Florida at the time the license was issued. 13
All applicants for licensure by endorsement must also pass the Florida law and rules portion of the
examination prior to licensure.14
Florida law does not provide practicing surveyors and mappers from other states with less than a four-
year degree a pathway to licensure unless they were licensed in the other state prior to July 1, 1999,
or prior to Florida having a four-year degree requirement.
Recent Trends
According to the Bureau of Labor Statistics, in 2020 there were 45,000 working surveyors in the U.S.,
15,000 were 34 years of age or younger, and 11,000 were over the age of 55.15 Many in the profession
are baby boomers who will be retiring and need to be replaced.16
The average age of a surveyor in the U.S. is 45 and 69% of surveyors are over the age of 40. In
addition, reports indicate that 45% of surveyors in the U.S. hold a bachelor’s degree, 42 % hold an
associate’s degree or a certificate and 18% hold a high school diploma. 17
10 S. 472.001(1), F.S.
11 R. 5J-17.210, F.A.C.
12 S. 472.0101, F.S.
13 S. 472.015, F.S.
14 Id.
15 U.S. Bureau of Labor Statistics, Labor Force Statistics from the Current Population Survey, https://www.bls.gov/cps/cpsaat11b.pdf
(last visited Jan. 5, 2022).
16 U.S. Bureau of Labor Statistics, Occupational Outlook Handbook, https://www.bls.gov/ooh/architecture-and-
engineering/surveyors.htm#tab-6 (last visited Jan. 5, 2022).
17 Florida Surveying & Mapping Society, FAQ: How to Become a Licensed Surveyor, https://www.fsms.org/how-to-become-a-
surveyor (Last visited Jan. 21, 2022); See also, Zippa, The Career Expert, Surveyor, Demographics and Statistics in the US,
https://www.zippia.com/surveyor-jobs/demographics/
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Some in the industry have indicated that a shortage may exist in the profession because of extensive
education expectations and cost. Many state boards require a four-year degree before beginning work
in the surveying field. These requirements might hinder those from pursuing a surveying path.
Nationally there appears to be a decline in the number of students graduating from surveying
programs.18
In Florida, the number of licensed surveyors has decreased by 305 licensees, from 2,884 licensees in
2013 to 2,579 licensees in 2021.19
Other States
Each state and territory in the U.S. require those who perform the tasks defined as the practice of
surveying to hold a professional surveying license. Most states require professional surveyors to meet
a combination of requirements in education and exams.20
Generally, while each state board for surveyors has its own requirements for licensure, potential
licensees will follow a similar path of prerequisites to obtain a license in any state. Prerequisites
typically include:
An education requirement - Sometimes a high school diploma but some states also require a
four-year degree from an accredited surveying program.
Successful completion of a Fundamentals of Surveying (FS) written examination - testing an
applicant’s breadth of understanding of basic surveying principles.
Successful completion of a written Principles and Practice of Surveying (PS) examination -
testing an applicant's knowledge and competency of surveying skills.
A requisite amount of surveying experience - which for most states is four years and is usually
under the supervision of a professional surveyor.21
According to research, in 2020, the education and experience requirements in all 50 states appear to
indicate the following patterns:
Most states require at least a four-year degree and four years of professional experience.
Typically, the extent of the degree is relative to the amount of professional experience required.
Fourteen states provide an option that requires only a high school diploma (or do not have any
educational requirements) along with a certain amount of professional experience.
Six states provide an option that does not require the completion of a degree, but requires the
completion of a certain amount of survey and mapping coursework and professional
experience.
The degrees that are required are typically in a surveying and mapping curriculum, a curriculum
related to surveying and mapping, or an unrelated curriculum but with a certain amount of
coursework in a surveying related curriculum.
States that allow postgraduate coursework in a surveying curriculum allow the coursework to be
substituted for professional experience.
Twenty-eight states do not provide an education-less alternative method of licensure.22
One example of a state that allows a number of different pathways to licensure is North Carolina:
18 Nearterm Blog, Is There a Shortage of Land Surveyors? (Nov. 2, 2020), https://nearterm.com/is-there-a-shortage-of-land-surveyors/
(last visited Jan. 5, 2022).
19 Email from Carlos Nathan, Legislative Affairs Director, Department of Agriculture and Consumer Services, Re: Surveyors Data,
(Jan. 6, 2022).
20 The National Council of Examiners for Engineering and Surveying (NCEES), Surveying Licensure,
https://ncees.org/surveying/surveying-licensure/ (last visited Jan. 5, 2022).
21 The National Council of Examiners for Engineering and Surveying (NCEES), NCEES Member Licensing Boards,
https://ncees.org/member-licensing-boards/ (last visited Jan. 5, 2022).
22 NCEES, supra note 19.
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Graduates with a Bachelor’s degree can take the licensing exam after two years of practical
land surveying experience. At least one year of experience must be under the supervision of a
professional land surveyor.
Graduates with a two-year Associate’s degree in surveying can take the licensing exam with
four years of progressive experience.
Graduates with a high school diploma can take the licensing exam after seven years.23
Effect of the Bill
The bill changes language in the licensing requirements that allowed the Board to approve educational
institutions and coursework to specify that applicants can obtain the required degree from “a college or
university accredited by an accrediting body recognized by the United States Department of Education.”
The bill creates additional pathways for people to become licensed as a surveyor and mapper, while
maintaining the prerequisite to take the licensure examination. Applicants are no longer required to
obtain a four year bachelor’s degree if the applicant:
Received an associate degree or a high school diploma and completes a minimum of 25
semester hours specific to surveying and mapping at a college or university accredited by an
accrediting body recognized by the United States Department of Education.
o The hours may be from courses in civil engineering, surveying, mapping, mathematics,
photogrammetry, forestry, or land law and the physical sciences.
Such applicants must have six or more years’ experience as a subordinate to a professional
surveyor and mapper in the active practice of surveying and mapping, which experience is of a
nature indicating that the applicant was in responsible charge.
The bill amends the licensure by endorsement requirements allowing an out of state applicant to be
eligible to take the licensure examination if they:
Hold a valid license to practice surveying and mapping in another state, jurisdiction, or
territory; and
Have two years of experience in the active practice of surveying and mapping, which
experience is of a nature indicating that the applicant was in responsible charge of the accuracy
and correctness of the surveying and mapping work performed.
In addition, the bill creates a pathway to be eligible to take the licensure examination for applicants who
have:
Received a registered apprenticeship certificate in surveying and mapping after completing a
registered apprenticeship program approved by the Department of Education; and
Have an experience record of two or more years as a subordinate to a professional surveyor
and mapper in the active practice of surveying and mapping, which experience is of a nature
indicating that the applicant was in responsible charge of the accuracy and correctness of the
surveying and mapping work performed.
Work experience acquired as a part of the education requirement may not be construed as experience
in responsible charge.
The bill allows exiled foreign-trained professionals who have practiced the profession for three years to
substitute this experience for the current education requirement.
B. SECTION DIRECTORY:
Section 1: amends s. 472.0101, F.S., relating to foreign-trained professionals, special examination
and license provisions.
Section 2: amends s. 472.013, F.S., relating to examinations, prerequisites.
23 North Carolina Society of Surveyors,
Licensure Requirements in North Carolina,
https://www.ncsurveyors.com/education/licensure_requirements (last visited Jan. 20, 2022).
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Section 3: amends s. 472.003, F.S., conforming a cross-reference to changes made by the act.
Section 4: provides an effective date of July 1, 2022.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
Indeterminate. The bill may have a positive impact on examination and licensing revenue, to the
extent that additional individuals will take the licensure examination and become licensed. All funds
collected are deposited into the DACS General Inspection Trust Fund. According to DACS, the bill
will not have a fiscal impact on the Department.24
2. Expenditures:
Indeterminate. The bill may result in DACS processing additional applications for examination and
licensure. However, DACS can likely absorb the related cost within existing resources. According to
DACS, the bill will not have a fiscal impact on the Department.25
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill creates additional pathways so that applicants are no longer required to obtain a bachelor’s
degree to qualify to take the licensure examination to practice as a surveyor and mapper, which will
lower the cost and time it takes to become licensed, and allow more people to practice their chosen
profession.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to effect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
24 Department of Agriculture and Consumer Services, Agency Analysis of 2022 HB 831, p. 3 (Jan. 3, 2022).
25 Id.
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Agency rules may have to be amended to change current education and work experience
requirements. Current law appears to provide sufficient rulemaking authority for DACS to implement the
bill.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
On January 20, 2022, the Regulatory Reform Subcommittee adopted two amendments and reported
the bill favorably as a committee substitute. The committee substitute:
Removes the definition for “accredited colleges and universities” from the bill.
Specifies that the colleges and universities referenced in the bill must be accredited by an
accrediting body recognized by the United States Department of Education.
This analysis is drafted to the committee substitute as passed by the Regulatory Reform
Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 831 2022
1 A bill to be entitled
2 An act relating to licensure requirements for land
3 surveyors and mappers; amending s. 472.0101, F.S.;
4 authorizing an exiled professional to substitute a
5 specified lawful practice of the profession for the
6 education requirement of the examination; amending s.
7 472.013, F.S.; revising education requirements for
8 licensure to include an applicant who has received an
9 associate degree under certain circumstances;
10 requiring such education to be from a college or
11 university accredited by an accrediting body
12 recognized by the United States Department of
13 Education; providing that specified experience may be
14 substituted for education requirements for licensure
15 as a land surveyor or mapper; providing that an
16 applicant who holds a valid license from another
17 state, jurisdiction, or territory, and has certain
18 experience in the practice of surveying and mapping
19 may take the licensure examination to practice as a
20 land surveyor or mapper in this state; providing that
21 completion of a specified apprenticeship program may
22 be substituted for education requirements for
23 licensure as a land surveyor or mapper; amending s.
24 472.003, F.S.; conforming a cross-reference to changes
25 made by the act; providing an effective date.
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CS/HB 831 2022
26
27 Be It Enacted by the Legislature of the State of Florida:
28
29 Section 1. Paragraphs (e) and (f) of subsection (1) of
30 section 472.0101, Florida Statutes are amended, and paragraph
31 (d) of that subsection is republished, to read:
32 472.0101 Foreign-trained professionals; special
33 examination and license provisions.—
34 (1) When not otherwise provided by law, the department
35 shall by rule provide procedures under which exiled
36 professionals may be examined under this chapter. A person is
37 eligible for the examination if the exiled professional:
38 (d) Demonstrates to the department, through submission of
39 documentation verified by the applicant's respective
40 professional association in exile, that the applicant was
41 graduated with an appropriate professional or occupational
42 degree from a college or university. However, the department may
43 not require receipt of any documentation from the Republic of
44 Cuba as a condition of eligibility under this section;
45 (e) A person who has lawfully practiced the profession for
46 at least 3 years may substitute such practice of the profession
47 for the education requirement under paragraph (d);
48 (f) Before Prior to 1980, successfully completed an
49 approved course of study pursuant to chapters 74-105 and 75-177,
50 Laws of Florida; and
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51 Section 2. Subsection (2) of section 472.013, Florida
52 Statutes, is amended to read:
53 472.013 Examinations, prerequisites.—
54 (2) An applicant shall be entitled to take the licensure
55 examination to practice in this state as a surveyor and mapper
56 if the applicant is of good moral character and has satisfied
57 one of the following requirements:
58 (a) The applicant has received a bachelor's degree, its
59 equivalent, or higher in surveying and mapping or a similarly
60 titled program, including, but not limited to, geomatics,
61 geomatics engineering, and land surveying, from a college or
62 university accredited by an accrediting body recognized by the
63 United States Department of Education board and has a specific
64 experience record of 4 or more years as a subordinate to a
65 professional surveyor and mapper in the active practice of
66 surveying and mapping, which experience is of a nature
67 indicating that the applicant was in responsible charge of the
68 accuracy and correctness of the surveying and mapping work
69 performed. Work experience acquired as a part of the education
70 requirement may not be construed as experience in responsible
71 charge.
72 (b) The applicant has received a bachelor's degree, its
73 equivalent, or higher in a course of study, other than in
74 surveying and mapping, at a an accredited college or university
75 accredited by an accrediting body recognized by the United
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76 States Department of Education and has a specific experience
77 record of 6 or more years as a subordinate to a registered
78 surveyor and mapper in the active practice of surveying and
79 mapping, which experience is 5 years of which shall be of a
80 nature indicating that the applicant was in responsible charge
81 of the accuracy and correctness of the surveying and mapping
82 work performed. The applicant must have completed a minimum of
83 25 semester hours from a college or university accredited by an
84 accrediting body recognized by the United States Department of
85 Education approved by the board in surveying and mapping
86 subjects or in any combination of courses in civil engineering,
87 surveying, mapping, mathematics, photogrammetry, forestry, or
88 land law and the physical sciences. Any of the required 25
89 semester hours of study completed not as a part of the
90 bachelor's degree, its equivalent, or higher may be approved at
91 the discretion of the board. Work experience acquired as a part
92 of the education requirement may not be construed as experience
93 in responsible charge.
94 (c) The applicant has received an associate degree and has
95 a specific experience record of 6 or more years as a subordinate
96 to a professional surveyor and mapper in the active practice of
97 surveying and mapping, which experience is of a nature
98 indicating that the applicant was in responsible charge of the
99 accuracy and correctness of the surveying and mapping work
100 performed. The applicant must have completed a minimum of 25
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101 semester hours from a college or university accredited by an
102 accrediting body recognized by the United States Department of
103 Education in surveying and mapping subjects or in any
104 combination of courses in civil engineering, surveying, mapping,
105 mathematics, photogrammetry, forestry, or land law and the
106 physical sciences. Work experience acquired as a part of the
107 education requirement may not be construed as experience in
108 responsible charge.
109 (d) The applicant has received a high school diploma, or
110 its equivalent, and has a specific experience record of 6 or
111 more years as a subordinate to a professional surveyor and
112 mapper in the active practice of surveying and mapping, which
113 experience is of a nature indicating that the applicant was in
114 responsible charge of the accuracy and correctness of the
115 surveying and mapping work performed. The applicant must have
116 completed a minimum of 25 semester hours from a college or
117 university accredited by an accrediting body recognized by the
118 United States Department of Education in surveying and mapping
119 subjects or in any combination of courses in civil engineering,
120 surveying, mapping, mathematics, photogrammetry, forestry, or
121 land law and the physical sciences. Work experience acquired as
122 a part of the education requirement may not be construed as
123 experience in responsible charge.
124 (e) The applicant holds a valid license to practice
125 surveying and mapping in another state, jurisdiction, or
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126 territory, and has 2 years of experience in the active practice
127 of surveying and mapping, which experience is of a nature
128 indicating that the applicant was in responsible charge of the
129 accuracy and correctness of the surveying and mapping work
130 performed.
131 (f) The applicant has received a registered apprenticeship
132 certificate in surveying and mapping after completing a
133 registered apprenticeship program approved by the Department of
134 Education and has a specified experience record of 2 or more
135 years as a subordinate to a professional surveyor and mapper in
136 the active practice of surveying and mapping, which experience
137 is of a nature indicating that the applicant was in responsible
138 charge of the accuracy and correctness of the surveying and
139 mapping work performed. Work experience acquired as a part of
140 the education requirement may not be construed as experience in
141 responsible charge.
142 Section 3. Subsection (4) of section 472.003, Florida
143 Statutes, is amended to read:
144 472.003 Persons not affected by ss. 472.001-472.037.—
145 Sections 472.001-472.037 do not apply to:
146 (4) Persons employed by county property appraisers, as
147 defined at s. 192.001(3), and persons employed by the Department
148 of Revenue, to prepare maps for property appraisal purposes
149 only, but only to the extent that they perform mapping services
150 which do not include any surveying activities as described in s.
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151 472.005 s. 472.005(4)(a) and (b).
152 Section 4. This act shall take effect July 1, 2022.
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COMMERCE COMMITTEE
HB 831 by Rep. Mariano
Licensure Requirements for Land Surveyors and Mappers
AMENDMENT SUMMARY
February 1, 2022
Amendment 1 by Rep. Mariano (lines 72-123):
• Revises the work experience requirements for applicants for the surveying and mapping
state licensure examination to be six or more years total work experience, five years of
which must be in responsible charge of the work performed. This applies to applicants
who have:
o A bachelor’s degree in non-surveying and mapping subjects.
o An associate degree.
o A high school diploma.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 831 (2022)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative Mariano offered the following:
3
4 Amendment
5 Remove lines 72-123 and insert:
6 (b) The applicant has received a bachelor's degree, its
7 equivalent, or higher in a course of study, other than in
8 surveying and mapping, at a an accredited college or university
9 accredited by an accrediting body recognized by the United
10 States Department of Education and has a specific experience
11 record of 6 or more years as a subordinate to a registered
12 surveyor and mapper in the active practice of surveying and
13 mapping, 5 years of which shall be of a nature indicating that
14 the applicant was in responsible charge of the accuracy and
15 correctness of the surveying and mapping work performed. The
16 applicant must have completed a minimum of 25 semester hours
341993 - h0831-lines 72-123.docx
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Page 1 of 3
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 831 (2022)
Amendment No. 1
17 from a college or university accredited by an accrediting body
18 recognized by the United States Department of Education approved
19 by the board in surveying and mapping subjects or in any
20 combination of courses in civil engineering, surveying, mapping,
21 mathematics, photogrammetry, forestry, or land law and the
22 physical sciences. Any of the required 25 semester hours of
23 study completed not as a part of the bachelor's degree, its
24 equivalent, or higher may be approved at the discretion of the
25 board. Work experience acquired as a part of the education
26 requirement may not be construed as experience in responsible
27 charge.
28 (c) The applicant has received an associate degree and has
29 a specific experience record of 6 or more years as a subordinate
30 to a professional surveyor and mapper in the active practice of
31 surveying and mapping, 5 years of which shall be of a nature
32 indicating that the applicant was in responsible charge of the
33 accuracy and correctness of the surveying and mapping work
34 performed. The applicant must have completed a minimum of 25
35 semester hours from a college or university accredited by an
36 accrediting body recognized by the United States Department of
37 Education in surveying and mapping subjects or in any
38 combination of courses in civil engineering, surveying, mapping,
39 mathematics, photogrammetry, forestry, or land law and the
40 physical sciences. Work experience acquired as a part of the
41 education requirement may not be construed as experience in
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 831 (2022)
Amendment No. 1
42 responsible charge.
43 (d) The applicant has received a high school diploma, or
44 its equivalent, and has a specific experience record of 6 or
45 more years as a subordinate to a professional surveyor and
46 mapper in the active practice of surveying and mapping, 5 years
47 of which shall be of a nature indicating that the applicant was
48 in responsible charge of the accuracy and correctness of the
49 surveying and mapping work performed. The applicant must have
50 completed a minimum of 25 semester hours from a college or
51 university accredited by an accrediting body recognized by the
52 United States Department of Education in surveying and mapping
53 subjects or in any combination of courses in civil engineering,
54 surveying, mapping, mathematics, photogrammetry, forestry, or
55 land law and the physical sciences. Work experience acquired as
56 a part of the education requirement may not be construed as
57 experience in responsible charge.
341993 - h0831-lines 72-123.docx
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Page 3 of 3
CS/HB 925
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 925 Benchmark Replacements for London Interbank Offered Rate
SPONSOR(S): Insurance & Banking Subcommittee, Stevenson
TIED BILLS: IDEN./SIM. BILLS: SB 1246
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 15 Y, 0 N, As CS Hinshelwood Luczynski
2) Civil Justice & Property Rights Subcommittee 16 Y, 0 N Mawn Jones
3) Commerce Committee Hinshelwood Hamon
SUMMARY ANALYSIS
The London Interbank Offered Rate (LIBOR) is the reference rate at which large banks indicate that they can
borrow short-term wholesale funds from one another on an unsecured basis in the interbank market. LIBOR
has been used in setting interest rates for adjustable rate mortgages, asset-backed securities, municipal
bonds, credit default swaps, private student loans, and other types of debt. Prior to the end of 2021, LIBOR
was calculated in five currencies (UK Pound Sterling, the Swiss Franc, the Euro, the Japanese Yen, and the
U.S. Dollar), and LIBOR was produced in seven maturity terms or “tenors” (overnight/spot next, 1-week, 1-
month, 2-month, 3-month, 6-month, and 12-month).
In 2014, the Federal Reserve Board and the Federal Reserve Bank of New York convened the Alternative
Reference Rates Committee (ARRC) to address already-known risks related to the U.S. Dollar LIBOR. In
2017, the entity regulating LIBOR stated that LIBOR would cease after the end of 2021. However, most U.S.
Dollar LIBOR tenors have been extended to the end of June 2023 to enable time for the market to transition
away from LIBOR, and in 2017, the ARRC identified the Secured Overnight Financing Rate (SOFR) as its
recommended alternative to the U.S. Dollar LIBOR. The Federal Reserve Bank of New York currently
publishes SOFR data daily, as well as SOFR Averages and a SOFR Index.
The total exposure to the U.S. Dollar LIBOR, as of the fourth quarter of 2020, was $223 trillion. Although the
derivatives market accounts for a large majority of the outstanding value of all financial products referencing
the U.S. Dollar LIBOR, LIBOR is also referenced in several trillion dollars of corporate loans, floating-rate
mortgages, floating-rate notes, and securitized products. While an estimated 67 percent of current LIBOR
exposures will mature before LIBOR ceases at the end of June 2023, an estimated $74 trillion will remain
outstanding. This fact underscores the importance of finding solutions for legacy contracts, including legacy
LIBOR contracts that have no provisions to replace LIBOR upon its cessation.
For contracts and instruments lacking transition provisions, the bill provides for a transition to SOFR as the
replacement rate for LIBOR; provides for conforming changes to be made to the contract or instrument; voids
fallback provisions based on LIBOR; and provides for construction of rights and duties under contracts affected
by the bill. The bill also precludes liability, a claim, or a cause of action arising out of or related to the selection
or use of a recommended benchmark replacement or the determination, implementation, or performance of a
benchmark replacement conforming change. The bill provides a statement demonstrating the overpowering
public necessity for the bill and a finding that there are no alternative means to meet this public necessity.
Additionally, the bill contains a statement of legislative intent indicating that the bill is remedial in nature and
applies retroactively to all contracts, agreements, mortgages, deeds of trust, leases, instruments, obligations,
or securities, whether representing debt or equity, and including all interests in a corporation, partnership, or
limited liability company, in existence on December 31, 2021.
The bill has no fiscal impact on state or local governments and an indeterminate fiscal impact on the private
sector.
The bill will take effect upon becoming law.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
The London Interbank Offered Rate (LIBOR) is the reference rate at which large banks indicate that
they can borrow short-term wholesale funds from one another on an unsecured basis in the interbank
market.1 The origins of LIBOR can be traced back to a loan transaction in 1969 in which multiple banks
were joint lenders (i.e., a syndicated loan) on a large loan of $80 million. 2 The interest rate of the loan
was based on the weighted average of the funding costs for each of the participating banks plus a
spread for profit.3 The rate was recalculated periodically; hence, the rate was variable and reflected
market conditions.4 The idea caught on, and eventually nearly all syndicated loans used LIBOR to
calculate the interest charged.5 Soon the rate was adopted by bankers outside the loan market who
were looking for an elegant proxy for bank borrowing costs that was simple, fair, and appeared to be
independent.6
In addition to providing loans at rates tied to LIBOR, banks whose submissions determined the fixing of
LIBOR had also begun to borrow heavily using LIBOR-based contracts by the mid-1980s, creating an
incentive to underreport funding costs.7 As a result, the British Bankers’ Association (BBA) took control
of the rate in 1986 to formalize the data collection and governance process.8 In that year, LIBOR
settings were calculated for the U.S. dollar, the British pound, and the Japanese yen.9 Over time, the
inclusion of additional currencies and integration of existing currencies into the euro left the BBA with
oversight of settings for over ten currencies as of 2012.10 Fifteen maturity terms were reported for each
currency, ranging from overnight to a 1 year term.11
Today, LIBOR is calculated daily by the Intercontinental Exchange (ICE) Benchmark Administration.12
Eighteen international banks submit rates that each bank believes it would pay, not what it actually
pays, if it had to borrow money from another bank on the interbank lending market in London. 13 The
four highest and four lowest submissions are then removed in order to calculate LIBOR. 14 Prior to the
end of 2021, the ICE Benchmark Administration calculated the rate in five currencies (UK Pound
Sterling, the Swiss Franc, the Euro, Japanese Yen, and the U.S. Dollar), and LIBOR was produced in
seven maturity terms or “tenors” (overnight/spot next, 1-week, 1-month, 2-month, 3-month, 6-month,
and 12-month).15
1 David Hou & David Skeie, LIBOR: Origins, Economics, Crisis, Scandal, and Reform, Federal Reserve Bank of New York
Staff Reports (Mar. 2014), https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr667.pdf (last visited
Jan. 21, 2022).
2 Id.
3 Gavin Finch and Liam Vaughan, The Man Who Invented the World’s Most Important Number (Nov. 29, 2016),
https://www.bloomberg.com/news/features/2016-11-29/the-man-who-invented-libor-iw3fpmed (last visited Jan. 21, 2022).
4 Id.
5 Id.
6 Id.
7 David Hou & David Skeie, supra note 1.
8 Id.
9 Id.
10 Id.
11 Id.
12 Miranda Marquit and Benjamin Curry, What Is Libor And Why Is It Being Abandoned?, Forbes (Dec. 16, 2020),
https://www.forbes.com/advisor/investing/what-is-libor/ (last visited Jan. 21, 2022).
13 Id.
14 Id.
15 Id.; Financial Conduct Authority, About LIBOR Transition, https://www.fca.org.uk/markets/libor-transition (last visited
Jan. 21, 2022).
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LIBOR has come under increasing scrutiny from regulators and financial markets alike following the
2008 financial crisis as well as documented patterns of manipulation by participating banks. 16 Others
have noted the declining correlations between LIBOR and actual bank funding costs.17 In 2017, the
entity that regulates LIBOR, the Financial Conduct Authority (FCA) of the United Kingdom, stated that
LIBOR would cease after the end of 2021.18 However, most U.S. Dollar LIBOR tenors have been
extended to the end of June 2023 to enable time for the market to transition away from LIBOR.19 The 1-
week and 2-month U.S. Dollar LIBOR ended at the end of 2021.20 The FCA has recommended
transitions to alternative rates before these dates.21
In 2014, the Federal Reserve Board and the Federal Reserve Bank of New York convened the
Alternative Reference Rates Committee (ARRC) to address risks related to the U.S. Dollar LIBOR.22
The ARRC’s initial objectives were to identify risk-free alternative reference rates for the U.S. Dollar
LIBOR, identify best practices for contract robustness, and create an implementation plan with metrics
of success and a timeline to support an orderly adoption.23 The ARCC was reconstituted in 2018 with
an expanded membership to serve as a forum to coordinate planning across cash and derivatives
products as well as market participants currently using the U.S. Dollar LIBOR.24 The ARRC is
comprised of a diverse set of private-sector entities, each with an important presence in markets
affected by the U.S. Dollar LIBOR, and a wide array of official-sector entities, including banking and
financial sector regulators, as ex-officio members.25
In 2017, the ARRC identified the Secured Overnight Financing Rate (SOFR) as its recommended
alternative to the U.S. Dollar LIBOR.26 SOFR is fully-transaction based and is a broad measure of the
cost of borrowing cash overnight collateralized by U.S. Treasury securities.27 SOFR is based on
transaction data from three segments of the Treasury repurchase agreement market: (1) tri-party
repurchase agreements, (2) General Collateral Finance repurchase agreements; and (3) bilateral
repurchase agreement transactions cleared through the Fixed Income Clearing Corporation. 28 The
Federal Reserve Bank of New York currently publishes SOFR data daily, as well as SOFR Averages
and a SOFR Index.29
LIBOR has been used in setting interest rates for adjustable rate mortgages, asset-backed securities,
municipal bonds, credit default swaps, private student loans, and other types of debt. 30 The total
exposure to the U.S. Dollar LIBOR, as of the fourth quarter of 2020, was $223 trillion.31 Although the
derivatives market accounts for a large majority of the outstanding value of all financial products
referencing the U.S. Dollar LIBOR, LIBOR is also referenced in several trillion dollars of corporate
loans, floating-rate mortgages, floating-rate notes, and securitized products.32
Financial institutions and other market participants have been in the process of assessing their
exposure to the discontinuation of LIBOR, and various financial regulators have discouraged the use of
16 Marquit and Curry, supra note 12.
17 Bowman et al., How Correlated is LIBOR with Bank Funding Costs? (June 29, 2020),
https://www.federalreserve.gov/econres/notes/feds-notes/how-correlated-is-libor-with-bank-funding-c osts-20200629.htm
(last visited Jan. 21, 2022).
18 Financial Conduct Authority, supra note 15.
19 Id.
20 Id.
21 Id.
22 Alternative Reference Rates Committee, Frequently Ask ed Questions (Aug. 27, 2021),
https://www.newyorkfed.org/medialibrary/Microsites/arrc/files/ARRC-faq.pdf (last visited Jan. 21, 2022).
23 Id.
24 Id.
25 Id.
26 Id.
27 Id.
28 Id.
29 Id.
30 Marquit and Curry, supra note 12.
31 Alternative Reference Rates Committee, supra note 22.
32 Id.
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LIBOR as a reference rate in new contracts after December 31, 2021. 33 Some financial contracts that
reference LIBOR include robust fallback language that contemplates a replacement interest rate index
or replacement interest rate calculation in the event that the rate referenced in the contract is
discontinued. While an estimated 67 percent of current LIBOR exposures will mature before LIBOR
ceases at the end of June 2023, an estimated $74 trillion will remain outstanding.34 This fact
underscores the importance of finding solutions for legacy contracts, including legacy LIBOR contracts
that have no provisions to replace LIBOR upon its cessation.35 The ARRC believes that legislation is a
necessary step to address those contracts.36
Similar to the bill, federal legislation (H.R. 4616) has been proposed that would provide for the transition
of certain financial contracts away from LIBOR.37 In the event a contract referencing LIBOR does not
have a fallback or replacement rate provision in effect when LIBOR is retired, or a replacement rate is
not selected by a determining person as defined by H.R. 4616, H.R. 4616 provides for a transition to
SOFR as the replacement rate.38 H.R. 4616 also provides for conforming changes to these contracts,
the continuity and enforceability of these contracts, and protections against liability as a result of such a
transition.39 H.R. 4616 passed the House but has not yet been acted upon in the Senate.40
New York41 and Alabama42 have passed similar legislation.
Effect of Proposed Changes
The bill provides the following legislative finding:
The Legislature finds that the discontinuation of [LIBOR]43 as a viable interest rate
threatens the continued viability of certain contracts, securities, and instruments and the
rights of the parties to those contracts, securities, or instruments. Furthermore, the threat
of unknown and potentially unbounded liability and the viability of contracts, securities,
and instruments threatens the state's economy and has created an overpowering public
necessity to provide an immediate and remedial legislative solution. Therefore, the
Legislature intends for parties to certain contracts, securities, or instruments, as provided
in [the bill], to enjoy heightened legal protections as a result of the discontinuation of
LIBOR. The Legislature also finds that there are no alternative means to meet this public
necessity. The Legislature finds that the public interest as a whole is best served by
providing certainty to these contracts, securities, and instruments and the parties
thereto, so that these contracts, securities, and instruments may remain viable and
continue to be enforceable in the state.
33 See, e.g., U.S. Securities and Exchange Commission Office of Compliance Inspections and Examinations, Risk Alert
(June 18, 2020), https://www.sec.gov/files/Risk%20Alert%20-%20OCIE%20LIBOR%20Initiative_1.pdf (last visited Jan.
21, 2022); Board of Governors of the Federal Reserve System et al., Statement on LIBOR Transition (Nov. 30, 2020),
https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20201130a1.pdf (last visited Jan. 21, 2022); Rohit
Chopra, Joint Statement on Managing the LIBOR Transition (Oct. 20, 2021), https://www.consumerfinance.gov/ about-
us/newsroom/joint-statement-on-managing-the-libor-transition/#note5 (last visited Jan. 21, 2022).
34 Alternative Reference Rates Committee, supra note 22.
35 Id.
36 Id.
37 Adjustable Interest Rate (LIBOR) Act of 2021, H.R. 4616, 117th Cong., https://www.congress.gov/bill/117th-
congress/house-bill/4616/text (last visited Jan. 21, 2022).
38 Id.
39 Id.
40 Id.
41 Discontinuance of the London interbank offered rate, Assembly Bill 164B,
https://legislation.nysenate.gov/pdf/bills/2021/A164B (last visited Jan. 21, 2022).
42 Financial transactions, Senate Bill 279, https://legiscan.com/AL/text/SB279/id/2379813 (last visited Jan. 21, 2022).
43 "LIBOR" means, for purposes of the application of the bill to any particular contract, security, or instrument, the United
States Dollar LIBOR, formerly known as the London Interbank Offered Rate, as administered by ICE Benchmark
Administration, or any predecessor or successor thereof, or any tenor thereof, as applicable, that is used in making any
calculation or determination of benchmark rates.
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Under the bill, various LIBOR discontinuance events 44 trigger a LIBOR replacement date45 for a
contract, security, or instrument46 that uses LIBOR as a benchmark47 and that:
Does not contain a fallback provision;48 or
Contains fallback provisions resulting in a benchmark replacement49 that is based in any way on
a LIBOR value.
For such a contract, security, or instrument, on the LIBOR replacement date, the recommended
benchmark replacement will be the benchmark replacement by operation of law. The recommended
benchmark is a benchmark replacement based on SOFR 50 and must include any recommended spread
adjustment51 and any benchmark replacement conforming change52 that have been selected or
44 "LIBOR discontinuance event" means the earliest to occur of any of the following:
a. A public statement or publication of information by, or on behalf of, the administrator of LIBOR announcing that
the administrator has ceased or will cease to provide LIBOR permanently or indefinitely, if, at the time of the statement or
publication, there is no successor administrator that will continue to provide LIBOR.
b. A public statement or publication of information by the regulatory supervisor for the administrator of LIBOR, the
Federal Reserve System, an insolvency official with jurisdiction over the administrator of LIBOR, a resolution authority
with jurisdiction over the administrator of LIBOR, or a court or an entity with similar insolvency or resolution authority over
the administrator of LIBOR, announcing that the administrator of LIBOR has ceased or will cease to provide LIBOR
permanently or indefinitely, if, at the time of the statement or publication, there is no successor administrator that will
continue to provide LIBOR.
c. A public statement or publication of information by the regulatory supervisor for the administrator of LIBOR
announcing that LIBOR is no longer representative.
A public statement or publication of information that affects one or more tenors of LIBOR does not constitute a LIBOR
discontinuance event with respect to a contract, security, or instrument that:
a. Provides for only one tenor of LIBOR, if the contract, security, or instrument requires interpolation and the
tenor can be interpolated from LIBOR tenors that are not so affected; or
b. Allows a party to choose from more than one tenor of LIBOR and any of the tenors is not so affected or, if the
contract, security, or instrument requires interpolation, can be interpolated from LIBOR tenors that are not so affected.
45 "LIBOR replacement date" means:
a. In the case of a LIBOR discontinuance event described in a. or b. (supra note 44), the later of:
(I) The date of the public statement or publication of information referenced in a. or b. (supra note 44); or
(II) The date on which the administrator of LIBOR permanently or indefinitely ceases to provide LIBOR.
b. In the case of a LIBOR discontinuance event described in c. (supra note 44), the date of the public statement
or publication of information referenced in c. (supra note 44).
2. A date that affects one or more tenors of LIBOR does not constitute a LIBOR replacement date with respect to
a contract, security, or instrument that:
a. Provides for only one tenor of LIBOR, if the contract, security, or instrument requires interpolation and the
tenor can be interpolated from LIBOR tenors that are not so affected; or
b. Allows a party to choose from more than one tenor of LIBOR and any of the tenors is not so affected or, if the
contract, security, or instrument requires interpolation, can be interpolated from LIBOR tenors that are not so affected.
46 "Contract, security, or instrument" includes, without limitation, any contract, agreement, mortgage, deed of trust, lease,
instrument, obligation, or security, whether representing debt or equity, and including any interest in a corporation,
partnership, or limited liability company.
47 "Benchmark" means an index of interest rates or dividend rates that is used, in whole or in part, as the basis of, or as a
reference for, calculating or determining a valuation, payment, or other measurement under or with respect to a contract,
security, or instrument.
48 "Fallback provision" means a term in a contract, security, or instrument which sets forth a methodology or procedure for
determining a benchmark replacement, including any term relating to the date on which the benchmark replacement
becomes effective, without regard to whether a benchmark replacement can be determined in accordance with the
methodology or procedure.
49 "Benchmark replacement" means a benchmark, an interest rate, or a dividend rate that may or may not be based, in
whole or in part, on a prior setting of LIBOR, to replace LIBOR or any interest rate or dividend rate based on LIBOR,
whether on a temporary, permanent, or indefinite basis, under or with respect to a contract, security, or instrument.
50 "SOFR" means, with respect to any day, the secured overnight financing rate published for the day by the Federal
Reserve Bank of New York as the administrator of the benchmark, or a successor administrator, on the Federal Reserve
Bank of New York's website.
51 "Recommended spread adjustment" means a spread adjustment, or method for calculating or determining the spread
adjustment, which has been selected or recommended by a relevant recommending body for a recommended benchmark
replacement for a particular type of contract, security, or instrument and for a particular term to account for the effects o f
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recommended by a relevant recommending body53 with respect to the type of contract, security, or
instrument.
After the occurrence of a LIBOR discontinuance event, any fallback provisions in a contract, security, or
instrument which provide for a benchmark replacement based on or otherwise involving a poll, survey,
or inquiry for quotes or information concerning interbank lending rates or any interest rate or dividend
rate based on LIBOR will be void and of no force or effect.
For any contract, security, or instrument that uses LIBOR as a benchmark and that contains fallback
provisions allowing or requiring the selection of a benchmark replacement that is based in any way on a
LIBOR value or a benchmark replacement that is similar to LIBOR, a determining person54 may, but is
not required to, select the recommended benchmark replacement as the benchmark replacement after
the occurrence of a LIBOR discontinuance event. In such case, the selection of the recommended
benchmark replacement must be:
Irrevocable;
Made by the earlier of the LIBOR replacement date or the latest date for selecting a benchmark
replacement according to the contract, security, or instrument; and
Used in any determination of the benchmark under or with respect to the contract, security, or
instrument occurring on and after the LIBOR replacement date.
If a recommended benchmark replacement becomes the benchmark replacement for a contract,
security, or instrument under the bill, then all benchmark replacement conforming changes that are
applicable to the recommended benchmark replacement must become an integral part of the contract,
security, or instrument by operation of law.
The selection or use of a recommended benchmark replacement as a benchmark replacement under
or with respect to a contract, security, or instrument, by operation of the bill, constitutes:
A commercially reasonable replacement for and a commercially substantial equivalent to
LIBOR.
the transition or change from LIBOR to a recommended benchmark replacement. This term may be a positive or negative
value or zero.
52 "Benchmark replacement conforming change" means, with respect to any type of contract, security, or instrument, a
technical, administrative, or operational change, alteration, or modification that is associated with and reasonably
necessary to the use, adoption, calculation, or implementation of a recommended benchmark replacement and that has
been selected or recommended by a relevant recommending body. However, if, in the reasonable judgment of a
calculating person, the change, alteration, or modification selected or recommended by a relevant recommending body
does not apply to the contract, security, or instrument or is insufficient to allow administration and calculation of the
recommended benchmark replacement, the benchmark replacement conforming change may include other changes,
alterations, or modifications that, in the reasonable judgment of the calculating person:
1. Are necessary to allow administration and calculation of the recommended benchmark replacement under or
with respect to the contract, security, or instrument in a manner consistent with market practice for substantially similar
contracts, securities, or instruments and, to the extent practicable, the manner in which t he contract, security, or
instrument was administered immediately before the LIBOR replacement date.
2. Would not result in a disposition of the contract, security, or instrument for federal income tax purposes.
"Calculating person" means, with respect to any contract, security, or instrument, a person responsible for calculating or
determining a valuation, payment, or other measurement based on a benchmark. This person may be the determining
person. See infra note 54 for the definition of “determining person”.
53 "Relevant recommending body" means the Federal Reserve Board, the Federal Reserve Bank of New York, the ARRC,
or a successor to any of these.
54 "Determining person" means, with respect to any contract, security, or instrument, the following persons in decreasing
order of priority:
1. A person so specified.
2. A person with the authority, right, or obligation to do any of the following:
a. Determine the benchmark replacement that will take effect on the LIBOR replacement date.
b. Calculate or determine a valuation, payment, or other measurement based on a benchmark.
c. Notify other persons of the occurrence of a LIBOR discontinuance event, a LIBOR replacement date, or a
benchmark replacement.
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A reasonable, comparable, or analogous term for LIBOR under or with respect to the contract,
security, or instrument.
A replacement that is based on a methodology or information that is similar or comparable to
LIBOR.
Substantial performance by any person of any right or obligation relating to or based on LIBOR
under or with respect to a contract, security, or instrument.
A LIBOR discontinuance event, a LIBOR replacement date, the selection or use of a recommended
benchmark replacement as a benchmark replacement, or the determination, implementation, or
performance of a benchmark replacement conforming change, in each case, by operation of the bill,
may not:
Be deemed to impair or affect the right of any person to receive a payment, or affect the amount
or timing of the payment, under a contract, security, or instrument;
Have the effect of discharging or excusing performance under a contract, security, or instrument
for any reason, claim, or defense, including, but not limited to, any force majeure or other
provision in a contract, security, or instrument;
Have the effect of giving any person the right to unilaterally terminate or suspend performance
under a contract, security, or instrument;
Have the effect of constituting a breach of a contract, security, or instrument; or
Have the effect of voiding or nullifying a contract, security, or instrument.
A person is not liable for damages to any other person, and is not subject to any claim or request for
equitable relief, arising out of or related to the selection or use of a recommended benchmark
replacement or the determination, implementation, or performance of a benchmark replacement
conforming change, in each case, by operation of the bill. The selection or use of the recommended
benchmark replacement or the determination, implementation, or performance of a benchmark
replacement conforming change may not give rise to any claim or cause of action by any person in law
or in equity.
The selection or use of a recommended benchmark replacement or the determination, implementation,
or performance of a benchmark replacement conforming change, by operation of the bill, may not be
deemed to:
Be an amendment or modification of a contract, security, or instrument.
Prejudice, impair, or affect a person's rights, interests, or obligations under or with respect to a
contract, security, or instrument.
Except as otherwise provided in the bill, the bill may not be interpreted as creating a negative inference
or negative presumption regarding the validity or enforceability of any of the following:
A benchmark replacement that is not a recommended benchmark replacement.
A spread adjustment, or method for calculating or determining a spread adjustment, which is not
a recommended spread adjustment.
A change, alteration, or modification to or with respect to a contract, security, or instrument
which is not a benchmark replacement conforming change.
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The bill does not alter or impair any of the following:
A written agreement by all requisite parties 55 which, retrospectively or prospectively, provides
that a contract, security, or instrument is not subject to the bill without necessarily referring
specifically to the statute created by the bill.
A contract, security, or instrument that contains fallback provisions that would result in a
benchmark replacement that is not based on LIBOR, including, but not limited to, the prime rate
or the federal funds rate. However, after the occurrence of a LIBOR discontinuance event, any
fallback provisions in a contract, security, or instrument which provide for a benchmark
replacement based on or otherwise involving a poll, survey, or inquiry for quotes or information
concerning interbank lending rates or any interest rate or dividend rate based on LIBOR will be
void and of no force or effect.
A contract, security, or instrument as to which a determining person does not elect to use a
recommended benchmark replacement or as to which a determining person elects to use a
recommended benchmark replacement before the occurrence of a LIBOR discontinuance
event. However, after the occurrence of a LIBOR discontinuance event, any fallback provisions
in a contract, security, or instrument which provide for a benchmark replacement based on or
otherwise involving a poll, survey, or inquiry for quotes or information concerning interbank
lending rates or any interest rate or dividend rate based on LIBOR will be void and of no force or
effect.
The application to a recommended benchmark replacement of any cap, floor, modifier, or
spread adjustment to which LIBOR had been subject pursuant to the terms of a contract,
security, or instrument.
Notwithstanding the Uniform Commercial Code56 or any other law of this state, and except as otherwise
provided in the bill, the bill applies to all contracts, securities, and instruments, including contracts with
respect to commercial transactions, and may not be superseded by any other law of this state.
The bill provides that it is remedial in nature and applies retroactively to all contracts, agreements,
mortgages, deeds of trust, leases, instruments, obligations, or securities, whether representing debt or
equity, and including all interests in a corporation, partnership, or limited liability company, in existence
on December 31, 2021.
The bill takes effect upon becoming a law.
B. SECTION DIRECTORY:
Section 1. Amends s. 687.15, F.S., relating to benchmark replacements for the London Interbank
Offered Rate.
Section 2. Provides that this act is remedial in nature and applies retroactively.
Section 3. Provides that this act shall take effect upon becoming a law.
II. FICAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
55 "Requisite parties" means all parties required to amend the terms and provisions
of a contract, security, or instrument
that would otherwise be altered or affected by the bill.
56 Chapters 670-680, F.S., comprise the Uniform Commercial Code. s. 671.101, F.S.
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1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill has an indeterminate impact on the private sector. The bill may have both positive and negative
impacts on private sector entities. Replacing LIBOR with SOFR could result in a different interest rate
under the contract or instrument, though the ARCC has recommended spread adjustments for various
types of financial contracts and instruments for which SOFR replaces LIBOR. Additionally, the bill could
prevent an aggrieved party from bringing a claim in court relating to the replacement of LIBOR with
SOFR and any accompanying conforming changes, but elimination of such liability and claims may
have the effect of quieting financial markets.
D. FISCAL COMMENTS:
None.
III. 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:
Impairment of Contracts and Due Process
Both the Florida and the United States Constitutions prohibit the state from passing a law impairing
contractual obligations.57 However, the Legislature may provide that a non-criminal law, including
one that affects existing contractual obligations, applies retroactively in certain situations. 58 In
determining whether a law may be applied retroactively, courts first determine whether the law is
procedural, remedial, or substantive in nature.59 A purely procedural or remedial law may apply
retroactively without offending the Constitution, but a substantive law generally may not apply
retroactively absent clear legislative intent to the contrary. 60 However, even where the Legislature
has expressly stated that a law will have retroactive application, a court may reject that application if
the law impairs a vested right, creates a new obligation, or imposes a new penalty. 61 Further, where
a law is designed to serve a remedial purpose, a court may decide not to apply the law retroactively
where doing so “would attach new legal consequences to events completed before its enactment.” 62
Moreover, both the Florida and United States Constitutions prohibit the taking of life, liberty, or
property without due process of law.63 The right to contract, as long as no fraud or deception is
involved and the contract is otherwise legal, is both a liberty and a property right subject to due
57 U.S. Const. art. I, s. 10; Art. I, s. 10, Fla. Const.
58 U.S. Const. art. I, ss. 9 and 10; Art. 1, s. 10, Fla. Const.
59 A procedural law merely establishes the means and methods for applying or enforcing existing duties or rights. A remedial law
confers or changes a remedy, i.e., the means employed in enforcing an existing right or in redressing an injury. A substantive law
creates, alters, or impairs existing substantive rights. Windom v. State, 656 So. 2d 432 (Fla. 1995); St. John’s Village I, Ltd. v. Dept. of
State, 497 So. 2d 990 (Fla. 5th DCA 1986); McMillen v. State Dept. of Revenue, 74 So. 2d 1234 (Fla. 1st DCA 1999).
60 State Farm Mutual Automob ile Ins. Co. v. Laforet, 658 So. 2d 55 (Fla. 1995).
61 Menendez v. Progressive Exp. Ins. Co., Inc., 35 So. 3d 873 (Fla. 2010).
62 L. Ross, Inc. v. R.W. Rob erts Const. Co., 481 So. 2d 484 (Fla. 1986).
63 U.S. Const. amends. V and XIV; Art. I, s. 21, Fla. Const.
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process protections, and the impairment of contracts may, in certain instances, be viewed as the
taking of property without due process.64
For certain contracts and instruments, the bill provides for a transition to SOFR as the replacement
rate for LIBOR, provides for conforming changes to be made to the contract or instrument, voids
fallback provisions that are based on LIBOR, and provides for construction of rights and duties under
contracts affected by the bill. Additionally, the bill contains a statement of legislative intent indicating
that the bill is remedial in nature and applies retroactively to all contracts, agreements, mortgages,
deeds of trust, leases, instruments, obligations, or securities, whether representing debt or equity,
and including all interests in a corporation, partnership, or limited liability company, in existence on
December 31, 2021. Whether the Legislature’s retroactive modification of such contracts and
instruments is procedural, remedial, or substantive, and whether such modification implicates the
constitutional right to contract or the constitutional right to due process, is for the courts to decide.
Access to Courts
In Kluger v. White,65 the Florida Supreme Court evaluated to what extent the Legislature may alter a
civil cause of action. The Court stated that it would not completely prohibit the Legislature from
altering a cause of action, but neither would it allow the Legislature "to destroy a traditional and long-
standing cause of action upon mere legislative whim . . . ." The takeaway from Kluger and other
relevant case law is that the Legislature may:
Reduce the right to bring a cause of action as long as the right is not entirely abolished.66
Abolish a cause of action that is not "traditional and long-standing" – that is, a cause of
action that did not exist at common law, and that did not exist in statute before the adoption
of the Florida Constitution's Declaration of Rights. 67
Abolish a cause of action if the Legislature either:
o Provides a reasonable commensurate benefit in exchange; 68 or
o Shows an "overpowering public necessity for the abolishment of such right, and no
alternative method of meeting such public necessity can be shown."69
The bill precludes liability, a claim, or a cause of action arising out of or related to the selection or
use of a recommended benchmark replacement or the determination, implementation, or
performance of a benchmark replacement conforming change. The bill also provides a statement
demonstrating the overpowering public necessity for the bill and a finding that there are no
alternative means to meet this public necessity.
B. RULE-MAKING AUTHORITY:
None.
64 Miles v. City of Edgewater Police Dept., 190 So. 3d 171 (Fla. 1st DCA 2016); s ee, e.g., Griffin v. Sharpe, 65 So. 2d 751 (Fla. 1953)
(finding that a statute removing a specific deed restriction’s expiration date both impaired contracts and constituted a taking of private
property without due process).
65 Kluger, 281 So. 2d 1 (Fla. 1973).
66 See Achord v. Osceola Farms Co., 52 So. 3d 699 (Fla. 2010).
67 See Anderson v. Gannett Comp., 994 So. 2d 1048 (Fla. 2008) (false light was not actionable under the common law); McPhail v.
Jenkins, 382 So. 2d 1329 (Fla. 1980) (wrongful death was not actionable under the common law); see also Kluger, 281 So. 2d at 4
("We hold, therefore, that where a right of access to the courts for redress for a particular injury has been provided by sta tutory law
predating the adoption of the Declaration of Rights of the Constitution of the State of Florida, or where such right has become a p a rt o f
the common law of the State . . . the Legislature is without power to abolish such a right without providing a reasonable alt ern a ti ve . . .
unless the Legislature can show an overpowering public necessity . . .").
68 Kluger, 281 So. 2d at 4; see Univ. of Miami v. Echarte, 618 So. 2d 189 (Fla. 1993) (upholding statutory cap on medical malpractice
damages because the Legislature provided arbitration, which is a "commensurate benefit" for a claimant); accord Lasky v. Sta te Fa rm
Ins. Co., 296 So. 2d 9 (Fla. 1974); b ut see Smith v. Dept. of Ins., 507 So. 2d 1080 (Fla. 1992) (striking down noneconomic cap on
damages, which, although not wholly abolishing a cause of action, did not provide a commensurate benefit).
69 Kluger, 281 So. 2d at 4-5 (noting that in 1945, the Legislature abolished the right to sue for several causes of action, but successfu l ly
demonstrated "the public necessity required for the total abolition of a right to sue") (citing Rotwein v. Gersten, 36 So. 2d 419 (Fla.
1948); see Echarte, 618 So. 2d at 195 ("Even if the medical malpractice arbitration statutes at issue did not provide a commensurate
benefit, we would find that the statutes satisfy the second prong of Kluger which requires a legislative finding that an 'overpowering
public necessity' exists, and further that 'no alternative method of meeting such public necessity can be shown'").
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C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On January 13, 2022, the Insurance & Banking Subcommittee considered one amendment, which was
adopted, and reported the bill favorably as a committee substitute. The committee substitute:
Clarifies the definition of “benchmark replacement conforming change” to reflect that subparagraph
2 (relating to a calculating person’s discretion to choose benchmark replacement conforming
changes) is permissive rather than a mandatory requirement for every contract, security, or
instrument subject to the bill.
Amends s. 687.15(7), F.S., as created in the bill, to clarify that the bill deems the statements in
paragraphs (a) – (d) to be true when a recommended benchmark replacement is selected or used.
Changes the phrase “recommended replacement benchmark” to “recommended benchmark
replacement,” as “recommended benchmark replacement” is the defined term.
The staff analysis has been updated to reflect the committee substitute as passed by the Insurance &
Banking Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 925 2022
1 A bill to be entitled
2 An act relating to benchmark replacements for London
3 Interbank Offered Rate; creating s. 687.15, F.S.;
4 providing legislative findings and intent and a
5 statement of public interest; providing definitions;
6 requiring that recommended benchmark replacements
7 selected or recommended by specified persons be
8 benchmark replacements on the United States dollar
9 London Interbank Offered Rate (LIBOR) replacement date
10 for certain contracts, securities, and instruments;
11 requiring certain fallback provisions in contracts,
12 securities, and instruments providing specified
13 benchmark replacements to be disregarded and void;
14 authorizing specified persons to select benchmark
15 replacements under certain circumstances; providing
16 requirements for such selection; providing
17 applicability; requiring benchmark replacement
18 conforming changes to become an integral part of
19 contracts, securities, and instruments under certain
20 circumstances; providing construction; providing that
21 a person is not liable for damages and is not subject
22 to claims and requests for equitable relief under
23 certain circumstances; providing applicability;
24 prohibiting other laws from superseding specified
25 provisions; providing that the act is remedial in
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26 nature; providing retroactive applicability; providing
27 an effective date.
28
29 Be It Enacted by the Legislature of the State of Florida:
30
31 Section 1. Section 687.15, Florida Statutes, is created to
32 read:
33 687.15 Benchmark replacements for the London Interbank
34 Offered Rate.—
35 (1) The Legislature finds that the discontinuation of the
36 London Interbank Offered Rate (LIBOR) as a viable interest rate
37 threatens the continued viability of certain contracts,
38 securities, and instruments and the rights of the parties to
39 those contracts, securities, or instruments. Furthermore, the
40 threat of unknown and potentially unbounded liability and the
41 viability of contracts, securities, and instruments threatens
42 the state's economy and has created an overpowering public
43 necessity to provide an immediate and remedial legislative
44 solution. Therefore, the Legislature intends for parties to
45 certain contracts, securities, or instruments, as provided in
46 this section, to enjoy heightened legal protections as a result
47 of the discontinuation of LIBOR. The Legislature also finds that
48 there are no alternative means to meet this public necessity.
49 The Legislature finds that the public interest as a whole is
50 best served by providing certainty to these contracts,
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51 securities, and instruments and the parties thereto, so that
52 these contracts, securities, and instruments may remain viable
53 and continue to be enforceable in the state.
54 (2) As used in this section, the term:
55 (a) "Benchmark" means an index of interest rates or
56 dividend rates that is used, in whole or in part, as the basis
57 of, or as a reference for, calculating or determining a
58 valuation, payment, or other measurement under or with respect
59 to a contract, security, or instrument.
60 (b) "Benchmark replacement" means a benchmark, an interest
61 rate, or a dividend rate that may or may not be based, in who le
62 or in part, on a prior setting of LIBOR, to replace LIBOR or any
63 interest rate or dividend rate based on LIBOR, whether on a
64 temporary, permanent, or indefinite basis, under or with respect
65 to a contract, security, or instrument.
66 (c) "Benchmark replacement conforming change" means, with
67 respect to any type of contract, security, or instrument, a
68 technical, administrative, or operational change, alteration, or
69 modification that is associated with and reasonably necessary to
70 the use, adoption, calculation, or implementation of a
71 recommended benchmark replacement and that has been selected or
72 recommended by a relevant recommending body. However, if, in the
73 reasonable judgment of a calculating person, the change,
74 alteration, or modification selected or recommended by a
75 relevant recommending body does not apply to the contract,
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76 security, or instrument or is insufficient to allow
77 administration and calculation of the recommended benchmark
78 replacement, the benchmark replacement conforming change may
79 include other changes, alterations, or modifications that, in
80 the reasonable judgment of the calculating person:
81 1. Are necessary to allow administration and calculation
82 of the recommended benchmark replacement under or with respect
83 to the contract, security, or instrument in a manner consistent
84 with market practice for substantially similar contracts,
85 securities, or instruments and, to the extent practicable, the
86 manner in which the contract, security, or instrument was
87 administered immediately before the LIBOR replacement date.
88 2. Would not result in a disposition of the contract,
89 security, or instrument for federal income tax purposes.
90 (d) "Calculating person" means, with respect to any
91 contract, security, or instrument, a person responsible for
92 calculating or determining a valuation, payment, or other
93 measurement based on a benchmark. This person may be the
94 determining person.
95 (e) "Contract, security, or instrument" includes, without
96 limitation, any contract, agreement, mortgage, deed of trust,
97 lease, instrument, obligation, or security, whether representing
98 debt or equity, and including any interest in a corporation,
99 partnership, or limited liability company.
100 (f) "Determining person" means, with respect to any
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101 contract, security, or instrument, the following persons in
102 decreasing order of priority:
103 1. A person so specified.
104 2. A person with the authority, right, or obligation to do
105 any of the following:
106 a. Determine the benchmark replacement that will take
107 effect on the LIBOR replacement date.
108 b. Calculate or determine a valuation, payment, or other
109 measurement based on a benchmark.
110 c. Notify other persons of the occurrence of a LIBOR
111 discontinuance event, a LIBOR replacement date, or a benchmark
112 replacement.
113 (g) "Fallback provision" means a term in a contract,
114 security, or instrument which sets forth a methodology or
115 procedure for determining a benchmark replacement, including any
116 term relating to the date on which the benchmark replacement
117 becomes effective, without regard to whether a benchmark
118 replacement can be determined in accordance with the methodology
119 or procedure.
120 (h) "LIBOR" means, for purposes of the application of this
121 section to any particular contract, security, or instrument, the
122 United States dollar LIBOR, formerly known as the London
123 Interbank Offered Rate, as administered by ICE Benchmark
124 Administration, or any predecessor or successor thereof, or any
125 tenor thereof, as applicable, that is used in making any
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126 calculation or determination of benchmark rates.
127 (i)1. "LIBOR discontinuance event" means the earliest to
128 occur of any of the following:
129 a. A public statement or publication of information by, or
130 on behalf of, the administrator of LIBOR announcing that the
131 administrator has ceased or will cease to provide LIBOR
132 permanently or indefinitely, if, at the time of the statement or
133 publication, there is no successor administrator that will
134 continue to provide LIBOR.
135 b. A public statement or publication of information by the
136 regulatory supervisor for the administrator of LIBOR, the
137 Federal Reserve System, an insolvency official with jurisdiction
138 over the administrator of LIBOR, a resolution authority with
139 jurisdiction over the administrator of LIBOR, or a court or an
140 entity with similar insolvency or resolution authority over t he
141 administrator of LIBOR, announcing that the administrator of
142 LIBOR has ceased or will cease to provide LIBOR permanently or
143 indefinitely, if, at the time of the statement or publication,
144 there is no successor administrator that will continue to
145 provide LIBOR.
146 c. A public statement or publication of information by the
147 regulatory supervisor for the administrator of LIBOR announcing
148 that LIBOR is no longer representative.
149 2. A public statement or publication of information that
150 affects one or more tenors of LIBOR does not constitute a LIBOR
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151 discontinuance event with respect to a contract, security, or
152 instrument that:
153 a. Provides for only one tenor of LIBOR, if the contract,
154 security, or instrument requires interpolation and the tenor can
155 be interpolated from LIBOR tenors that are not so affected; or
156 b. Allows a party to choose from more than one tenor of
157 LIBOR and any of the tenors is not so affected or, if the
158 contract, security, or instrument requires interpolation, can be
159 interpolated from LIBOR tenors that are not so affected.
160 (j)1. "LIBOR replacement date" means:
161 a. In the case of a LIBOR discontinuance event described
162 in sub-subparagraph (i)1.a. or sub-subparagraph (i)1.b., the
163 later of:
164 (I) The date of the public statement or publication of
165 information referenced in sub-subparagraph (i)1.a. or sub-
166 subparagraph (i)1.b.; or
167 (II) The date on which the administrator of LIBOR
168 permanently or indefinitely ceases to provide LIBOR.
169 b. In the case of a LIBOR discontinuance event described
170 in sub-subparagraph (i)1.c., the date of the public statement or
171 publication of information referenced in sub-subparagraph
172 (i)1.c.
173 2. A date that affects one or more tenors of LIBOR does
174 not constitute a LIBOR replacement date with respect to a
175 contract, security, or instrument that:
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176 a. Provides for only one tenor of LIBOR, if the contract,
177 security, or instrument requires interpolation and the tenor can
178 be interpolated from LIBOR tenors that are not so affected; or
179 b. Allows a party to choose from more than one tenor of
180 LIBOR and any of the tenors is not so affected or, if the
181 contract, security, or instrument requires interpolation, can be
182 interpolated from LIBOR tenors that are not so affected.
183 (k) "Recommended benchmark replacement" means, with
184 respect to any particular type of contract, security, or
185 instrument, a benchmark replacement based on SOFR that must
186 include any recommended spread adjustment and any benchmark
187 replacement conforming change that have been selected or
188 recommended by a relevant recommending body with respect to the
189 type of contract, security, or instrument.
190 (l) "Recommended spread adjustment" means a spread
191 adjustment, or method for calculating or determining the spread
192 adjustment, which has been selected or recommended by a relev ant
193 recommending body for a recommended benchmark replacement for a
194 particular type of contract, security, or instrument and for a
195 particular term to account for the effects of the transition or
196 change from LIBOR to a recommended benchmark replacement. Thi s
197 term may be a positive or negative value or zero.
198 (m) "Relevant recommending body" means the Federal Reserve
199 Board, the Federal Reserve Bank of New York, the Alternative
200 Reference Rates Committee, or a successor to any of them.
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201 (n) "SOFR" means, with respect to any day, the secured
202 overnight financing rate published for the day by the Federal
203 Reserve Bank of New York as the administrator of the benchmark,
204 or a successor administrator, on the Federal Reserve Bank of New
205 York's website.
206 (3) On the LIBOR replacement date, the recommended
207 benchmark replacement, by operation of law, shall be the
208 benchmark replacement for a contract, security, or instrument
209 that uses LIBOR as a benchmark and that:
210 (a) Does not contain a fallback provision; or
211 (b) Contains fallback provisions resulting in a benchmark
212 replacement, other than a recommended benchmark replacement,
213 that is based in any way on a LIBOR value.
214 (4) After the occurrence of a LIBOR discontinuance event,
215 any fallback provisions in a contract, security, or instrument
216 which provide for a benchmark replacement based on or otherwise
217 involving a poll, survey, or inquiry for quotes or information
218 concerning interbank lending rates or any interest rate or
219 dividend rate based on LIBOR shall be void and of no force or
220 effect.
221 (5)(a) A determining person may, but is not required to,
222 select the recommended benchmark replacement as the benchmark
223 replacement after the occurrence of a LIBOR discontinuance
224 event. The selection of the recommended benchmark replacement
225 must be:
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226 1. Irrevocable;
227 2. Made by the earlier of the LIBOR replacement date or
228 the latest date for selecting a benchmark replacement according
229 to the contract, security, or instrument; and
230 3. Used in any determination of the benchmark under or
231 with respect to the contract, security, or instrument occurring
232 on and after the LIBOR replacement date.
233 (b) Paragraph (a) applies to a contract, security, or
234 instrument that uses LIBOR as a benchmark and that contains
235 fallback provisions allowing or requiring the selection of a
236 benchmark replacement that is:
237 1. Based in any way on a LIBOR value; or
238 2. The substantive equivalent of paragraph (7)(a),
239 paragraph (7)(b), or paragraph (7)(c).
240 (6) If a recommended benchmark replacement becomes the
241 benchmark replacement for a contract, security, or instrument
242 under this section, then all benchmark replacement conforming
243 changes that are applicable to the recommended benchmark
244 replacement must become an integral part of the contract,
245 security, or instrument by operation of law.
246 (7) The selection or use of a recommended benchmark
247 replacement as a benchmark replacement under or with respect to
248 a contract, security, or instrument by operation of this section
249 constitutes all of the following:
250 (a) A commercially reasonable replacement for and a
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251 commercially substantial equivalent to LIBOR.
252 (b) A reasonable, comparable, or analogous term for LIBOR
253 under or with respect to the contract, security, or instrument.
254 (c) A replacement that is based on a methodology or
255 information that is similar or comparable to LIBOR.
256 (d) Substantial performance by any person of any right or
257 obligation relating to or based on LIBOR under or with respect
258 to a contract, security, or instrument.
259 (8) A LIBOR discontinuance event, a LIBOR replacement
260 date, the selection or use of a recommended benchmark
261 replacement as a benchmark replacement, or the determination,
262 implementation, or performance of a benchmark replacement
263 conforming change, in each case, by operation of this s ection,
264 may not:
265 (a) Be deemed to impair or affect the right of any person
266 to receive a payment, or affect the amount or timing of the
267 payment, under a contract, security, or instrument;
268 (b) Have the effect of discharging or excusing performance
269 under a contract, security, or instrument for any reason, claim,
270 or defense, including, but not limited to, any force majeure or
271 other provision in a contract, security, or instrument;
272 (c) Have the effect of giving any person the right to
273 unilaterally terminate or suspend performance under a contract,
274 security, or instrument;
275 (d) Have the effect of constituting a breach of a
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276 contract, security, or instrument; or
277 (e) Have the effect of voiding or nullifying a contract,
278 security, or instrument.
279 (9) A person is not liable for damages to any other
280 person, and is not subject to any claim or request for equitable
281 relief, arising out of or related to the selection or use of a
282 recommended benchmark replacement or the determination,
283 implementation, or performance of a benchmark replacement
284 conforming change, in each case, by operation of this section.
285 The selection or use of the recommended benchmark replacement or
286 the determination, implementation, or performance of a benchmark
287 replacement conforming change may not give rise to any claim or
288 cause of action by any person in law or in equity.
289 (10) The selection or use of a recommended benchmark
290 replacement or the determination, implementation, or performance
291 of a benchmark replacement conforming change, by operation of
292 this section, may not be deemed to:
293 (a) Be an amendment or modification of a contract,
294 security, or instrument.
295 (b) Prejudice, impair, or affect a person's rights,
296 interests, or obligations under or with respect to a contract,
297 security, or instrument.
298 (11) Except as provided in subsection (3) or subsection
299 (5), this section may not be interpreted as creating a negative
300 inference or negative presumption regarding the validity or
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301 enforceability of any of the following:
302 (a) A benchmark replacement that is not a recommended
303 benchmark replacement.
304 (b) A spread adjustment, or method for calculating or
305 determining a spread adjustment, which is not a recommended
306 spread adjustment.
307 (c) A change, alteration, or modification to or with
308 respect to a contract, security, or instrument which is not a
309 benchmark replacement conforming change.
310 (12) This section does not alter or impair any of the
311 following:
312 (a) A written agreement by all requisite parties which,
313 retrospectively or prospectively, provides that a contract,
314 security, or instrument is not subject to this section without
315 necessarily referring specifically to this section. As used in
316 this paragraph, the term "requisite parties" means all parties
317 required to amend the terms and provisions of a contract,
318 security, or instrument that would otherwise be altered or
319 affected by this section.
320 (b) A contract, security, or instrument that contains
321 fallback provisions that would result in a benchmark replacement
322 that is not based on LIBOR, including, but not limited to, the
323 prime rate or the federal funds rate. However, the contract,
324 security, or instrument is subject to subsection (4).
325 (c) A contract, security, or instrument subject to
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326 subsection (5) as to which a determining person does not elect
327 to use a recommended benchmark replacement or as to which a
328 determining person elects to use a recommended benchmark
329 replacement before the occurrence of a LIBOR discontinuance
330 event. However, the contract, security, or instrument is subject
331 to subsection (4).
332 (d) The application to a recommended benchmark replacement
333 of any cap, floor, modifier, or spread adjustment to which LIBOR
334 had been subject pursuant to the terms of a contract, security,
335 or instrument.
336 (13) Notwithstanding the Uniform Commercial Code or any
337 other law of this state, and except as otherwise provided in
338 this section, this section applies to all contracts, securities,
339 and instruments, including contracts with respect to commercial
340 transactions, and may not be superseded by any other law o f this
341 state.
342 Section 2. This act is remedial in nature and applies
343 retroactively to all contracts, agreements, mortgages, deeds of
344 trust, leases, instruments, obligations, or securities, whether
345 representing debt or equity, and including all interests in a
346 corporation, partnership, or limited liability company, in
347 existence on December 31, 2021.
348 Section 3. This act shall take effect upon becoming a law.
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CS/HB 1439
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 1439 Prostitution, Lewdness, Human Trafficking, and Public Lodging
SPONSOR(S): Criminal Justice & Public Safety Subcommittee, Toledo and others
TIED BILLS: HB 1441 IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Criminal Justice & Public Safety Subcommittee 16 Y, 0 N, As CS Mathews Hall
2) Commerce Committee Wright Hamon
3) Justice Appropriations Subcommittee
4) Judiciary Committee
SUMMARY ANALYSIS
Human trafficking is modern day slavery which involves the transporting, soliciting, recruiting, harboring,
providing, enticing, maintaining, or obtaining another person for the purpose of exploiting that person. Victims
can be exploited for commercial sex in numerous contexts and traffickers frequently leverage and exploit
legitimate businesses or institutions such as social media, financial institutions, transportation systems, and
hotels or motels to carry out illegal activities.
In Florida, public lodging establishments, including vacation rentals, are regulated by the Division of Hotels and
Restaurants of the Department of Business and Professional Regulation. Florida law does not currently prohibit
operators of public lodging establishments from offering hourly rates for accommodations to customers. CS/HB
1439 prohibits an operator of a public lodging establishment from offering an hourly rate for an
accommodation, and requires a guest of a public lodging establishment to provide positive proof of
identification to the operator of the establishment at the time of occupancy.
Current law provides that a person who solicits, induces, or procures another person to commit prostitution,
lewdness, or assignation commits a first degree misdemeanor for a first violation. A person who purchases the
services of another person engaged in prostitution commits a second degree misdemeanor for a first violation.
The bill amends increases the penalties for soliciting, enticing, or procuring another person to commit
prostitution, lewdness, or assignation, and purchasing the services of any person engaged in prostitution.
Under the bill, a first offense for either crime is a third degree felony.
A victim of human trafficking is eligible for expunction of their criminal record related to a human trafficking
scheme of which the person was a victim or when the offense was committed at the direction of an operator of
the scheme. However, certain violent felony offenses are not eligible for expunction. CS/HB 1439 authorizes a
victim to seek expunction for an arrest or charges filed for such criminal offenses, so long as he or she was not
found guilty of, or did not plead guilty or nolo contendere to, the offense.
Currently, there is no singular statewide data repository for human trafficking data and reports. The bill creates
the Statewide Data Repository for Anonymous Human Trafficking Data (Repository). The bill requires the TIP
Lab to work with law enforcement and required reporting entities to collect, analyze, and distribute data relating
to human trafficking in Florida.
The bill may have an indeterminate positive impact on prison beds by creating new felony offenses and
increasing penalties for current felony offenses.
The bill is effective upon becoming a law.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Human trafficking is modern day slavery which involves the transporting, soliciting, recruiting,
harboring, providing, enticing, maintaining, or obtaining another person for the purpose of exploiting
that person. Victims may be exploited for commercial sex in numerous contexts, including street
prostitution, illicit massage parlors, brothels, escort services, and online advertising. Further, traffickers
frequently leverage and exploit legitimate businesses or institutions such as social media, financial
institutions, transportation systems, and hotels or motels.
Public Lodging Establishments and Vacation Rentals
Background
According to research, human trafficking for commercial sexual activity commonly takes place in hotels
or motels.1 In Florida, public lodging establishments and vacation rentals are regulated by the Division
of Hotels and Restaurants (H&R) of the Department of Business and Professional Regulation, under
ch. 509, F.S. Each public lodging establishment must obtain a license from H&R and is subject to
inspections.2
“Public lodging establishment” includes:3
“Transient public lodging establishments,” which means any unit, group of units, dwelling,
building, or group of buildings within a single complex of buildings which is rented to guests
more than three times in a calendar year for periods of less than 30 days, or 1 calendar month,
whichever is less, or which is advertised or held out to the public as a place regularly rented to
guests.
o “Vacation rental” is defined as any unit or group of units in a condominium or cooperative
or any individually or collectively owned single-family, two-family, three-family, or four-
family house or dwelling unit that is also a transient public lodging establishment but that
is not a timeshare project.4
“Nontransient public lodging establishments,” which means any unit, group of units, dwelling,
building, or group of buildings within a single complex of buildings which is rented to guests for
periods of at least 30 days or 1 calendar month, whichever is less, or which is advertised or held
out to the public as a place regularly rented to guests for periods of at least 30 days or 1
calendar month.
Classifications of public lodging establishments include apartments, hotels, motels, vacation rentals,
bed and breakfast inns, and timeshare projects.5
If a public lodging establishment operates in violation of ch. 509, F.S., or H&R rules, H&R may impose
the following disciplinary actions:6
Fines not to exceed $1,000 per offense; and
The suspension, revocation, or refusal of a license.
1 The Polaris Project, The Typology of Modern Slavery: Defining Sex and Lab or Trafficking in the United States , (March 2017)
https://polarisproject.org/wp-content/uploads/2019/09/Polaris-Typology-of-Modern-Slavery-1.pdf (last visited January 25, 2022).
2 S. 509.241(1), F.S.
3 S. 509.013(4), F.S.
4 S. 509.242(1)(c), F.S.
5 S. 509.242, F.S.
6 S. 509.261(1), F.S.
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Each operator of a transient establishment7 must maintain a register, signed by or for guests who
occupy rental units within the establishment, showing the dates upon which the rental units were
occupied by such guests and the rates charged for their occupancy. This register must contain records
from the last two years, be maintained in chronological order, and be available for inspection by H&R at
any time.8
Currently, public lodging establishments are not prohibited from offering hourly rates for
accommodations to customers. Also, under ch. 509, F.S., public lodging establishments do not need to
require guests to prove their identification when they occupy the premises.
Effect of Proposed Changes
CS/HB 1439 creates s. 509.098, F.S., to:
Prohibit an operator of a public lodging establishment or vacation rental from offering an hourly
rate for an accommodation, and
Require a guest of a public lodging establishment or vacation rental to provide positive proof of
identification to the operator of the establishment at the time of occupancy.
The bill defines “vacation rental” in the same manner as it is currently defined in ch. 509, F.S.
Soliciting or Purchasing Prostitution
Background
Section 796.07, F.S., defines prostitution as the giving or receiving of the body for sexual activity for
hire.9
Under s. 796.07(2)(a)-(e) and (g)-(i), F.S., it is a second degree misdemeanor:10
To own, establish, maintain, or operate any place, structure, building, or conveyance for the
purpose of lewdness, assignation, or prostitution;
To offer, or to offer or agree to secure, another for the purpose of prostitution or for any other
lewd or indecent act;
To receive, or to offer or agree to receive, any person into any place, structure, building, or
conveyance for the purpose of prostitution, lewdness, or assignation, or to permit any person to
remain there for such purpose;
To direct, take, or transport, or to offer or agree to direct, take, or transport, any person to any
place, structure, or building, or to any other person, with knowledge or reasonable cause to
believe that the purpose of such directing, taking, or transporting is prostitution, lewdness, or
assignation;
For a person 18 years of age or older to offer to commit, or to commit, or to engage in,
prostitution, lewdness, or assignation;
To reside in, enter, or remain in, any place, structure, or building, or to enter or remain in any
conveyance, for the purpose of prostitution, lewdness, or assignation;
To aid, abet, or participate in any of the acts or things listed above; or
To purchase the services of any person engaged in prostitution. 11
The penalty for a violation listed above is reclassified to a first degree misdemeanor for a second
violation, and a third degree felony for any third or subsequent violation.12
7 “Transient establishment” means any public lodging establishment that is rented or leased to guests by an operator whose intention is
that such guests’ occupancy will be temporary. S. 509.013(11), F.S.
8 S. 509.101(2), F.S.
9 This definition excludes sexual activity between spouses. S. 796.07(1)(a), F.S.
10 A second degree misdemeanor is punishable by up to 60 days in county jail and a fine not exceeding $500. Ss. 775.082 and
775.083, F.S.
11 S. 796.07(2), F.S.
12 S. 796.07(4), F.S.
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Additionally, under s. 796.07(f), F.S., a person who solicits, induces, or procures another person to
commit prostitution, lewdness,13 or assignation14 commits a first degree misdemeanor for a first
violation, a third degree felony for a second violation, and a second degree felony for a third or
subsequent violation. 15
Effect of Proposed Changes
CS/HB 1439 amends s. 796.07, F.S., to increase the penalties for both the offenses of soliciting,
enticing, or procuring another person to commit prostitution, lewdness, or assignation, and for
purchasing the services of any person engaged in prostitution. Under the bill, the penalties for soliciting,
inducing, enticing, or procuring another person to commit prostitution increase from a:
First degree misdemeanor to a third degree felony for a first violation.
Third degree felony to a second degree felony for a second violation.
Second degree felony to a first degree felony for a third or subsequent violation.
The penalties for purchasing the services of any person engaged in prostitution increase from a:
Second degree misdemeanor to a third degree felony for a first violation.
First degree misdemeanor to a second degree felony for a second violation.
Third degree felony to a first degree felony for a third or subsequent violation.
Human Trafficking
Human Trafficking Victim Expunction
Background
In 2013, the Legislature created a process authorizing a victim of human trafficking to petition a court
for the expunction of a criminal history record resulting from his or her arrest or filing of charges,
regardless of the disposition of the arrest or charges, for an offense committed or reported to have
been committed while he or she was a victim of human trafficking. For purposes of human trafficking
victim expunction, “victim of human trafficking” means a person subjected to coercion 16 for the purpose
of being used in human trafficking, a child or person believed to be a child under 18 years of age
subjected to human trafficking, or an individual subjected to human trafficking as defined by federal law.
To be eligible for expunction, the criminal offense must be related to a human trafficking scheme of
which the person was a victim or the offense must have been committed at the direction of an operator
of the scheme,17 and must not be one of the following offenses:
Arson;
Sexual battery;
Robbery;
Kidnapping;
Aggravated child abuse;
Aggravated abuse of an elderly person or disabled adult;
Aggravated assault with a deadly weapon;
Murder;
Manslaughter;
Aggravated manslaughter of an elderly person or disabled adult;
Aggravated manslaughter of a child;
Unlawful throwing, placing, or discharging of a destructive device or bomb;
Armed burglary;
13 Lewdness means any indecent or obscene act. S. 796.07(1)(b), F.S.
14 Assignation means the making of any appointment or engagement for prostitution or lewdness, or any act in furtherance of such
appointment or engagement. S. 796.07(1)(c), F.S.
15 S. 796.07(2)(f), F.S.
16 As defined in s. 787.06, F.S.
17 S. 943.0583, F.S.
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Aggravated battery; or
Aggravated stalking.
The court with original jurisdiction over the crime the human trafficking victim seeks to expunge is the
court designated to hear the victim’s petition.18 A petition must be initiated by the petitioner with due
diligence after he or she is no longer a victim of human trafficking or has sought human trafficking
services.19 The petition must be accompanied by the following:
A sworn statement attesting that the petitioner is eligible for an expunction to the best of his or
her knowledge and does not have other petitions to expunge or seal pending before any court;
and
Official documentation of the petitioner’s status as a human trafficking victim, if any exists.20
Under s. 943.0583, F.S., a petition for expunction that includes official documentation of the victim’s
status as a human trafficking victim, though not required, creates a presumption that his or her
participation in the offense was a result of having been a human trafficking victim. A determination on a
petition for expunction with official documentation of victim status requires a showing of a
preponderance of the evidence.21 22 For a petition for expunction that does not include official
documentation of the victim’s status, a determination of expunction requires a showing of clear and
convincing evidence.23 Clear and convincing evidence is a higher burden of proof than a
preponderance of the evidence.
Any criminal history record of a person that is ordered expunged under s. 943.0583, F.S., must be
physically destroyed by any criminal justice agency having custody of such record. 24 However, any
criminal history record in the custody of FDLE must be retained in all cases. 25 A human trafficking victim
may lawfully deny or fail to acknowledge any expunged record unless he or she is applying for a job
with a criminal justice agency or is a defendant in a subsequent criminal prosecution. 26
Effect of Proposed Changes
The bill expands the types of offenses for which human trafficking victim is available by authorizing a
human trafficking victim to seek expunction for an arrest or charges filed for the following offenses, so
long as he or she was not found guilty of, or plead guilty or nolo contendere to, the offense:
Arson;
Sexual battery;
Robbery;
Kidnapping;
Aggravated child abuse;
Aggravated abuse of an elderly person or disabled adult;
Aggravated assault with a deadly weapon;
Murder;
Manslaughter;
Aggravated manslaughter of an elderly person or disabled adult;
Aggravated manslaughter of a child;
18 S. 943.0583(2), F.S.
19 S. 943.0583(4), F.S.
20
S. 943.0583(6), F.S.
21 S. 943.0583(3), F.S.
22 Under the preponderance standard, the burden of proof is met when the party with the burden convinces the fact finder that th ere is a
greater than 50% chance that the claim is true. Cornell Law School: Legal Information Institute, Preponderance of the Evidence,
https://www.law.cornell.edu/wex/preponderance_of_the_evidence (last visited Jan. 23, 2022).
23 According to the Supreme Court in Colorado v. New Mexico, 467 U.S. 310 (1984), "clear and convincing” means that the evidence is
highly and substantially more likely to be true than untrue; the fact finder must be convinced that the contention is highly probable.
Cornell Law School: Legal Information Institute, Clear and Convincing Evidence,
https://www.law.cornell.edu/wex/clear_and_convincing_evidence#:~:text=Definition,the%20contention%20is%20highly%20probable .
(last visited Jan. 23, 2022).
24 S. 943.0583(8), F.S.
25 Id.
26 S. 943.0583(8)(b), F.S.
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Unlawful throwing, placing, or discharging of a destructive device or bomb;
Armed burglary;
Aggravated battery; or
Aggravated stalking.
The bill removes the requirement that petitions submitted without official documentation of the victim’s
status include a showing of clear and convincing evidence. As such, the burden of proof reverts to the
standard requirement of a preponderance of the evidence, lowering the evidentiary threshold a victim
must meet in order to obtain an expunction without official documentation of his or her victim status.
Statewide Data Repository for Anonymous Human Trafficking Data
Background
Currently, human trafficking data is collected across multiple agencies and entities. However, there is
no singular, uniform statewide data repository for human trafficking data.
FDLE’s Uniform Crime Report (UCR) system provides standardized reports on crime statistics based
on statewide data.27 The fundamental objectives of the Florida UCR Program are to:
Collect accurate summary crime data from all law enforcement agencies in the state;
Maintain agency crime statistics in a statewide database and provide a barometer of the
frequency and clearance rates of certain crimes;
Publish semi-annual and annual reports to the FDLE Commissioner, Florida Governor, Florida
Legislature, and the public of the various crime trends in the state;
Collect the number of offenses known to UCR Program contributors for murder, manslaughter,
forcible rape, robbery, aggravated assault, burglary, larceny, motor vehicle theft, arson, simple
assault, domestic violence, and other offenses and related arrest information. 28
The Florida Incident Based Reporting System (FIBRS) is a statewide database for incident based
reporting. FIBRS streamlines several data collection efforts into one system which includes data
collections from:
NIBRS (National Incident Based Reporting System);
Hate Crimes;
Cargo Theft;
Human Trafficking;
Use-of-Force;
Law Enforcement Information Exchange (LInX); and
Police Employee Counts.29
The University of South Florida recently established its Trafficking in Persons – Risk to Resilience Lab
(TIP Lab), which is dedicated to eradicating human trafficking in the Tampa Bay area.30 The TIP Lab
conducts innovative and interdisciplinary research to address human trafficking issues and trends and
shares knowledge and resources with the community through the establishment of a data depository for
use by human trafficking researchers.31 Prior to the creation of the TIP Lab, Florida did not have a
unified data center for human trafficking.32
Effect of Proposed Changes
27 FDLE, Uniform Crime Report, https://www.fdle.state.fl.us/FSAC/Uniform-Crime-Report (last visited Jan. 25, 2022).
28 FDLE, Uniform Crime Reports Guide Manual (November 2018), https://www.fdle.state.fl.us/FSAC/UCR/UCRGuideManual.aspx (last
visited Jan. 25, 2022).
29 FDLE, Florida Incident-Based Reporting System (FIBRS), https://www.fdle.state.fl.us/UCR/QR/FIBRS (last visited Jan. 25, 2022).
30 University of South Florida, USF Trafficking in Persons – Risk to Resilience Lab , https://tiplab.cbcs.usf.edu/index.php (last visited
January 25, 2022).
31 Id.
32 University of South Florida St. Petersburg Campus, Grand Opening of New Research Lab to Comb at Human Trafficking in Florida ,
(September 15, 2021), https://www.stpetersburg.usf.edu/news/2021/grand-opening-human-trafficing-lab.aspx (last visited Jan. 25,
2022).
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CS/HB 1439 creates s. 1004.343, F.S., to create the Statewide Data Repository for Anonymous Human
Trafficking Data (Repository) to be housed under the University of South Florida Trafficking in Persons
– Risk to Resilience Lab (TIP Lab).
The bill requires the Repository to collect anonymous data on human trafficking to: identify trends in the
state over time, evaluate the effectiveness of various state initiatives and interventions, and
disseminate relevant data to law enforcement agencies, state agencies, and other entities to assist in
combatting human trafficking and apprehending and prosecuting persons responsible for conducting
human trafficking.
Under the bill, the TIP Lab is responsible for designing, operating, maintaining and protecting the
integrity of the Repository and the data collected. The bill requires the TIP Lab to work with the Florida
Department of Law Enforcement (FDLE) and other law enforcement partners to launch a no cost, user-
friendly reporting system by which reporting entities may make reports.
The bill designates the following agencies and entities as required reporting entities:
Law enforcement agencies operating with state or local government tax proceeds, including, but
not limited to, municipal police departments, county sheriffs, and state attorneys;
FDLE and any other state agency that holds data related to human trafficking; and
Service providers and other nongovernmental organizations that serve human trafficking victims
and receive state or federal funding to do so.
The bill exempts a required reporting entity that submits relevant data to FDLE through the Uniform
Crime Report System (UCR) or through the Florida Incident Based Reporting System (FIBRS). The bill
requires FDLE to provide such data to the Repository on a quarterly basis.
A required reporting entity must submit the following data to the Repository:
The alleged human trafficking offense and description of the prohibited conduct;
The age, gender, and race or ethnicity of each suspect or defendant;
The age, gender, and race or ethnicity of the victim;
The date, time, and location of the alleged offense;
The type of human trafficking involved, whether for labor or services or commercial sexual
activity;
Any other alleged offense related to the human trafficking offense;
Information about any victim services referrals provided to the victim, if available; and
The disposition of the investigation or prosecution.
The bill requires reporting entities in a county with a population of 500,000 or more to begin reporting to
the Repository by July 1, 2023. Required reporting entities in a county with a population less than
500,000 must begin reporting to the Repository by July 1, 2024.
The bill is effective upon becoming a law.
B. SECTION DIRECTORY:
Section 1: Provides the act may be cited as the “Human Trafficking Reduction Act.”
Section 2: Creates s. 509.098, F.S., relating to prohibition of hourly rates; proof of identification.
Section 3: Amends s. 796.07, F.S., relating to prohibiting prostitution and related acts.
Section 4: Amends s. 943.0583, F.S., relating to human trafficking victim expunction.
Section 5: Creates s. 1004.343, F.S., relating to Statewide Data Repository for Anonymous Human
Trafficking Data.
Section 6: Provides that the bill is effective upon becoming a law.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
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A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
The bill may have an indeterminate positive impact on prison beds by creating new felony offenses
and increasing penalties for current felony offenses.
The bill requires that a system for reporting anonymous human trafficking data to the Repository be
made available by the TIP Lab to required reporting entities at no additional cost to the entity. The
bill may have an indeterminate impact on state government due to an increased workload for the
TIP Lab.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
The bill requires that a system for reporting anonymous human trafficking data to the Repository be
made available by the TIP Lab to required reporting entities at no additional cost to the entity. As
such, the bill should not have a fiscal impact on local government entities required to report data to
the Repository.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may have an indeterminate fiscal impact on the private sector by prohibiting hourly rates for
public lodging establishments. Those consumers who currently rent public lodging establishments by
the hour may have to pay the daily rate, which may increase revenues for public lodging
establishments, but cost more for consumers.
D. FISCAL COMMENTS:
The bill requires the TIP LAB to house and operate the Repository, but does not address how the
Repository will be funded. As such, the fiscal impact to the TIP Lab is indeterminate.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
None.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
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IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On January 25, 2022, the Criminal Justice & Public Safety Subcommittee adopted a proposed committee
substitute (PCS) and reported the bill favorably as a committee substitute. The PCS differed from the
original bill as it:
Included a definition of the term “vacation rental” in s. 509.098, F.S.;
Deleted a requirement for case numbers to be reported to the Repository; and
Made other technical revisions for clarity.
This analysis is drafted to the committee substitute as passed by the Criminal Justice & Public Safety
Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 1439 2022
1 A bill to be entitled
2 An act relating to prostitution, lewdness, human
3 trafficking, and public lodging; providing a short
4 title; creating s. 509.098, F.S.; providing a
5 definition; prohibiting an operator of a public
6 lodging establishment or a vacation rental from
7 offering an hourly rate for an accommodation;
8 requiring a guest of a public lodging establishment or
9 a vacation rental to provide positive proof of
10 identification to such operator at the time of
11 occupancy; amending s. 796.07, F.S.; increasing
12 criminal penalties for soliciting or procuring another
13 person to commit prostitution or other specified
14 offenses or purchasing the services of a person
15 engaged in prostitution; amending s. 943.0583, F.S.;
16 providing that human trafficking victim expunction of
17 criminal history records does not apply to specified
18 offenses; deleting a requirement for a specific
19 evidentiary standard when determining human
20 trafficking victim status in the absence of official
21 documentation; creating s. 1004.343, F.S.; creating
22 the Statewide Data Repository for Anonymous Human
23 Trafficking Data at the University of South Florida;
24 providing purposes of the data repository; specifying
25 duties of the university; designating required
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26 reporting entities; requiring specified information to
27 be reported; providing timeframes for reporting;
28 providing an effective date.
29
30 Be It Enacted by the Legislature of the State of Florida:
31
32 Section 1. This act may be cited as the "Human Trafficking
33 Reduction Act."
34 Section 2. Section 509.098, Florida Statutes, is created
35 to read:
36 509.098 Prohibition of hourly rates; proof of
37 identification.—
38 (1) For purposes of this section, the term "vacation
39 rental" has the same meaning as provided in s. 509.242(1)(c).
40 (2) An operator of a public lodging establishment or a
41 vacation rental may not offer an hourly rate for an
42 accommodation.
43 (3) A guest of a public lodging establishment or a
44 vacation rental must provide positive proof of identification to
45 the operator of the public lodging establishment or the vacation
46 rental at the time of his or her occupancy of the accommodation.
47 Section 3. Paragraph (a) of subsection (5) of section
48 796.07, Florida Statutes, is amended, and paragraphs (f) and (i)
49 of subsection (2) of that section are republished, to read:
50 796.07 Prohibiting prostitution and related acts.—
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51 (2) It is unlawful:
52 (f) To solicit, induce, entice, or procure another to
53 commit prostitution, lewdness, or assignation.
54 (i) To purchase the services of any person engaged in
55 prostitution.
56 (5)(a) A person who violates paragraph (2)(f) or paragraph
57 (2)(i) commits:
58 1. A felony of the third misdemeanor of the first degree
59 for a first violation, punishable as provided in s. 775.082, or
60 s. 775.083, or s. 775.084.
61 2. A felony of the second third degree for a second
62 violation, punishable as provided in s. 775.082, s. 775.083, or
63 s. 775.084.
64 3. A felony of the first second degree for a third or
65 subsequent violation, punishable as provided in s. 775.082, s.
66 775.083, or s. 775.084.
67 Section 4. Subsections (3) and (5) of section 943.0583,
68 Florida Statutes, are amended to read:
69 943.0583 Human trafficking victim expunction.—
70 (3)(a) Except as provided in paragraph (b), a person who
71 is a victim of human trafficking may petition for the expunction
72 of a criminal history record resulting from the arrest or filing
73 of charges for one or more offenses committed or reported to
74 have been committed while the person was a victim of human
75 trafficking, which offense was committed or reported to have
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76 been committed as a part of the human trafficking scheme of
77 which the person was a victim or at the direction of an operator
78 of the scheme, including, but not limited to, violations under
79 chapters 796 and 847, without regard to the disposition of the
80 arrest or of any charges.
81 (b) However, This section does not apply to any offense
82 listed in s. 775.084(1)(b)1. if the defendant was found guilty
83 of, or pled guilty or nolo contendere to, any such offense.
84 (c) Determination of the petition under this section
85 should be by a preponderance of the evidence. A conviction
86 expunged under this section is deemed to have been vacated due
87 to a substantive defect in the underlying criminal proceedings.
88 If a person is adjudicated not guilty by reason of insanity or
89 is found to be incompetent to stand trial for any such charge,
90 the expunction of the criminal history record may not prevent
91 the entry of the judgment or finding in state and national
92 databases for use in determining eligibility to purchase or
93 possess a firearm or to carry a concealed firearm, as authorized
94 in s. 790.065(2)(a)4.c. and 18 U.S.C. s. 922(t), nor shall it
95 prevent any governmental agency that is authorized by state or
96 federal law to determine eligibility to purchase or possess a
97 firearm or to carry a concealed firearm from accessing or using
98 the record of the judgment or finding in the course of such
99 agency's official duties.
100 (5) Official documentation of the victim's status creates
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101 a presumption that his or her participation in the offense was a
102 result of having been a victim of human trafficking but is not
103 required for granting a petition under this section. A
104 determination made without such official documentation must be
105 made by a showing of clear and convincing evidence.
106 Section 5. Section 1004.343, Florida Statutes, is created
107 to read:
108 1004.343 Statewide Data Repository for Anonymous Human
109 Trafficking Data.—
110 (1) There is created the Statewide Data Repository for
111 Anonymous Human Trafficking Data. The repository shall be housed
112 in and operated by the University of South Florida Trafficking
113 in Persons - Risk to Resilience Lab.
114 (a) The Statewide Data Repository for Anonymous Human
115 Trafficking Data shall:
116 1. Collect and analyze anonymous human trafficking data to
117 identify trends in human trafficking in the state over time.
118 2. Evaluate the effectiveness of various state-funded
119 initiatives to combat human trafficking to enable the state to
120 make evidence-based decisions in funding future initiatives.
121 3. Disseminate relevant data to law enforcement agencies,
122 state agencies, and other entities to assist in combatting human
123 trafficking and apprehending and prosecuting persons responsible
124 for conducting human trafficking.
125 4. Evaluate the effectiveness of interventions and
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126 services provided to assist human trafficking victims.
127 (b) The University of South Florida Trafficking in Persons
128 – Risk to Resilience Lab shall:
129 1. Design, operate, maintain, and protect the integrity of
130 the Statewide Data Repository for Anonymous Human Trafficking
131 Data.
132 2. Design, in consultation with the Department of Law
133 Enforcement and other law enforcement partners, and launch a
134 user-friendly system for efficiently reporting anonymous human
135 trafficking data to the Statewide Data Repository for Anonymous
136 Human Trafficking Data at no additional cost to reporting
137 entities.
138 3. Analyze anonymous human trafficking data to identify
139 initiatives and interventions that are effective in combatting
140 human trafficking, apprehending and prosecuting persons
141 responsible for conducting human trafficking, and assisting
142 human trafficking victims.
143 4. Work with law enforcement agencies and state agencies
144 to report data on human trafficking investigations and
145 prosecutions which can aid such agencies in combatting human
146 trafficking and apprehending and prosecuting persons responsible
147 for conducting human trafficking.
148 (2)(a) Except as provided in paragraph (b), the following
149 agencies and entities shall report anonymous human trafficking
150 data required under this section:
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151 1. Law enforcement agencies operating with state or local
152 government tax proceeds, including, but not limited to,
153 municipal police departments, county sheriffs, and state
154 attorneys.
155 2. The Department of Law Enforcement and any other state
156 agency that holds data related to human trafficking.
157 3. Service providers and other nongovernmental
158 organizations that serve human trafficking victims and receive
159 state or federal funding for such purpose.
160 (b) A required reporting entity that submits the data
161 required under subsection (3) to the Department of Law
162 Enforcement's Uniform Crime Report system or Florida Incident -
163 Based Reporting System may, but is not required to, submit any
164 additional data to the Statewide Data Repository for Anonymous
165 Human Trafficking Data. The Department of Law Enforcement shall
166 report to the Statewide Data Repository for Anonymous Human
167 Trafficking Data, at least quarterly, the data required under
168 subsection (3) that has been reported by a required reporting
169 entity to the department.
170 (3) A required reporting entity shall submit the following
171 data to the Statewide Data Repository for Anonymous Human
172 Trafficking Data unless such entity is exempt from the reporting
173 requirement under paragraph (2)(b):
174 (a) The alleged human trafficking offense that was
175 investigated or prosecuted and a description of the alleged
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176 prohibited conduct.
177 (b) The age, gender, and race or ethnicity of each suspect
178 or defendant and victim.
179 (c) The date, time, and location of the alleged offense.
180 (d) The type of human trafficking involved, whether for
181 labor or services or commercial sexual activity.
182 (e) Any other alleged offense related to the human
183 trafficking offense that was investigated or prosecuted.
184 (f) Information regarding any victim services organization
185 or related program to which the victim was referred, if
186 available.
187 (g) The disposition of the investigation or prosecution,
188 regardless of the manner of disposition.
189 (4)(a) A required reporting entity located in a county
190 with a population of more than 500,000 must begin reporting data
191 required by this section to the Statewide Data Repository for
192 Anonymous Human Trafficking Data, or to the Department of Law
193 Enforcement as authorized under paragraph (2)(b), on or before
194 July 1, 2023, and at least quarterly each year thereafter.
195 (b) A required reporting entity located in a county with a
196 population of 500,000 or fewer must begin reporting data
197 required by this section to the Statewide Data Repository for
198 Anonymous Human Trafficking Data, or to the Department of Law
199 Enforcement as authorized under paragraph (2)(b), on or before
200 July 1, 2024, and at least biannually each year thereafter.
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201 Section 6. This act shall take effect upon becoming a law.
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