Insurance & Banking Subcommittee — Meeting Packet (March 27, 2023)
Summary
Meeting packet for the Florida House of Representatives Commerce Committee Insurance & Banking Subcommittee meeting of Monday, March 27, 2023, 8:00 AM to 11:00 AM in Morris Hall. The agenda lists HB 791 (Taxes on Purchases Made Through Private-label Credit Card Programs), HB 1267 (Consumer Finance Loans), HB 1353 (Commercial Financing Product Brokers and Providers), HB 1545 (Health Insurance Identification Cards), HB 1573 (Continuing Care Providers), HB 7035 and PCS for HB 1299 (Payments for Workers' Compensation Expert Witnesses). The staff analysis of HB 791 states that the bill removes the 64.4 percent limit on the maximum amount of tax that can be recovered on the unpaid balance of a worthless or uncollectible private-label credit card account.
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Insurance & Banking Subcommittee
Monday, March 27, 2023
8:00 AM - 11:00 AM
Morris Hall (17 HOB)
Meeting Packet
Paul Renner Wyman Duggan
Speaker Chair
The Florida House of Representatives
Commerce Committee
Insurance & Banking Subcommittee
Paul Renner Wyman Duggan
Speaker Chair
Meeting Agenda
Monday, March 27, 2023
8:00 AM – 11:00 AM
Morris Hall (17 HOB)
I. Call to Order
II. Roll Call
III. Welcome and Opening Remarks
IV. Consideration of the following bill(s):
• HB 791 Taxes on Purchases Made Through Private-label Credit Card Programs by
Brackett
• HB 1267 Consumer Finance Loans by Fernandez-Barquin
• HB 1353 Commercial Financing Product Brokers and Providers by Bankson
• HB 1545 Health Insurance Identification Cards by Stevenson
• HB 1573 Continuing Care Providers by Persons-Mulicka
• HB 7035 OGSR/Citizens Property Insurance Corporation/Cybersecurity Data and
Information by Ethics, Elections & Open Government Subcommittee, Griffitts
Consideration of the following proposed committee substitute(s):
• PCS for HB 1299 -- Payments for Workers' Compensation Expert Witnesses
V. Closing Remarks
VI. Adjournment
303 House Office Building, 402 South Monroe Street, Tallahassee, FL 32399-1300
(850) 717-4870
HB 791
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 791 Taxes on Purchases Made Through Private-label Credit Card Programs
SPONSOR(S): Brackett
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Ways & Means Committee 19 Y, 2 N LaTorre Aldridge
2) Insurance & Banking Subcommittee Lloyd Lloyd
3) Commerce Committee
SUMMARY ANALYSIS
Under Chapter 212, F.S., the state levies a six percent sales and use tax on the retail sale of most tangible
personal property, admissions, transient lodgings, and commercial real estate leases. The full amount of sales
tax is due at the time a transaction occurs, even if the transaction is a credit sale, installment sale, or a sale
made on any kind of deferred payment plan.
Currently, a dealer can take a credit or obtain a refund of up to 64.4 percent for the taxes remitted on the
unpaid balance of a worthless or uncollectible private-label credit card account.1 “Private-label credit cards” are
defined as a charge card or credit card that carries, refers to, or is branded with the name or logo of a dealer
and can be used for purchases from the dealer whose name or logo appears on the card or for purchases from
the dealer’s affiliates or franchises.2
The bill removes the 64.4 percent limit on the maximum amount of tax that can be recovered on the unpaid
balance of a worthless or uncollectible private label credit card account.
The Revenue Estimating Conference estimated that in FY 2023-24, the bill would have -$3.6 million cash and
a -$3.8 million recurring impact on General Revenue, an insignificant negative impact on state trust funds, and
a -$.9 million cash and -$1 million recurring impact on local government revenues.
The effective date of this bill is July 1, 2023.
1
Section 212.17(4), F.S.
2 Id.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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DATE: 3/25/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Sales Tax
Chapter 212, F.S., contains the state’s statutory provisions authorizing the levy and collection of
Florida’s sales and use tax, as well as the requirements for dealers to collect and remit sales tax.
Florida imposes a 6 percent tax on tangible personal property sold, used, consumed, distributed, stored
for use or consumption, rented, or leased in Florida. The full amount of sales tax is due at the time a
transaction occurs, even if the transaction is a credit sale, installment sale, or a sale made on any kind
of deferred payment plan.3
Credit or Refund for Bad Debt
A dealer who has remitted sales tax may take a credit or obtain a refund for any tax paid on the unpaid
balance due on worthless accounts.4 The dealer must take the credit or obtain a refund within 12
months following the month in which the bad debt has been charged off by the dealer for federal
income tax purposes.5 If any amount of the worthless account is subsequently paid, the dealer is
required to remit the appropriate tax to the Department of Revenue. 6 The dealer that paid the tax and
charged off the account is the only person allowed to take the credit or claim the refund.
Private Label Credit Cards
In 2014, the legislature amended s. 212.17, F.S., allowing a dealer to take a partial credit or obtain a
partial refund of taxes remitted on the unpaid balance of a worthless or uncollectible private-label credit
card account.7 “Private-label credit cards” are defined as a charge card or credit card that carries,
refers to, or is branded with the name or logo of a dealer and can be used for purchases from the
dealer whose name or logo appears on the card or for purchases from the dealer’s affiliates or
franchises.8
Section 212.17(4), F.S., sets forth the criteria for calculating the amount of the credit or refund that a
dealer is eligible to recover. The criteria are similar to the provisions for refunds of bad debt under s.
212.17(3), F.S., but specify that the dealer must take the credit or obtain a refund within 12 months
following the month in which the bad debt has been charged off by the lender for federal income tax
purposes.9 If any amount of the worthless account is subsequently paid to the dealer or the lender, the
dealer is required to remit the appropriate tax to the Department of Revenue. 10 The dealer that paid the
tax, or an entity related by a direct or indirect common ownership of 50 percent or more, is the only
person allowed to take the credit or claim the refund.11 The lender is not eligible to apply for a credit or
refund. In addition, the statute specifies that the dealer must use either an apportionment method or a
sampling method to determine the amount of the credit or refund. 12 The total amount of the credit or
refund is limited to 64.4 percent of the amount of taxes paid on a worthless account. 13
Effect of Proposed Changes
3 Section 212.06(1)(a), F.S.
4 Section 212.17(3), F.S.
5 Id.
6 Id.
7 Section 212.17(4)(a), F.S.
8 Section 212.17(4)(h)3., F.S.
9 Section 212.17(4)(a)(3), F.S.
10 Section 212.17(4)(b), F.S.
11 Section 212.17(4)(f), F.S.
12 Section 212.17(4)(d), F.S.
13 Section 212.17(4)(g), F.S.
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The bill amends s. 212.17(4), F.S., removing the 64.4 percent limit on the maximum amount of tax that
can be recovered on the unpaid balance of a worthless or uncollectible private label credit card
account. Dealers will instead be eligible for a full refund or credit for tax paid on worthless or
uncollectible private label credit card debts, beginning July 1, 2023.
B. SECTION DIRECTORY:
Section 1: Amends s. 212.17(4), F.S., removing 64.4 percent limit on the maximum amount of tax
that can be recovered by a dealer on the unpaid balance of a worthless or uncollectible
private label credit card account.
Section 2: Provides an effective date of July 1, 2023.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
The Revenue Estimating Conference estimated that in FY 2023-24, the bill would have -$3.6 million
cash and a -$3.8 million recurring impact on General Revenue, and an insignificant negative impact
on state trust funds.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
The Revenue Estimating Conference estimated that in FY 2023-24, the bill would have a -$.9
million cash and -$1 million recurring impact on local government revenues.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Dealers will be eligible to recover the full amount of taxes remitted on the unpaid balance of a worthless
or uncollectible private-label credit card account.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to require counties or municipalities to spend funds or take
action requiring the 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:
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None.
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
HB 791 2023
1 A bill to be entitled
2 An act relating to taxes on purchases made through
3 private-label credit card programs; amending s.
4 212.17, F.S.; removing the limitation on the maximum
5 amount of tax that can be recovered from certain
6 payments; providing an effective date.
7
8 Be It Enacted by the Legislature of the State of Florida:
9
10 Section 1. Paragraph (g) of subsection (4) of section
11 212.17, Florida Statutes, is amended to read:
12 212.17 Tax credits or refunds.—
13 (4) With respect to the payment of taxes on purchases made
14 through a private-label credit card program:
15 (g) The amount of the credit or refund that a dealer is
16 eligible to recover under this subsection is limited to 64.4
17 percent of the tax paid to the department which is attributable
18 to bad debt.
19 Section 2. This act shall take effect July 1, 2023.
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hb0791-00
HB 1267
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 1267 Consumer Finance Loans
SPONSOR(S):Fernandez-Barquin
TIED BILLS: IDEN./SIM. BILLS: SB 580
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee Fletcher Lloyd
2) State Administration & Technology
Appropriations Subcommittee
3) Commerce Committee
SUMMARY ANALYSIS
The Florida Consumer Finance Act, ch. 516, F.S. (Act), prohibits individuals and entities from
engaging in the business of making consumer finance loans unless first authorized to do so under the
Act. It 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 deceases as
principal amount increases:
30% per annum, computed on the first $3,000 of the principal amount;
24% per annum on that part of the principal amount exceeding $3,000 and up to $4,000; and
18% per annum on that part of the principal amount exceeding $4,000 and up to $25,000.
The Act provides that, at the time of applying for a license, the applicant shall pay to the office a
nonrefundable biennial license fee of $625. Applications, except for applications to renew or
reactivate a license, must also be accompanied by a nonrefundable investigation fee of $200. The Act
prohibits licensees from applying delinquency charges until a borrower has been in default for 10
days.
The bill:
Provides a definition for the term “branch;”
Prohibits a person from operating a branch engaged in the business of making consumer
finance loans without first obtaining a license;
Requires an application fee of $625 to be paid to the office for each branch application filed;
Increases the maximum interest rate for a consumer finance loan to 36% and removes the
tiered-interest structure altogether;
Changes the 10-day rule for a licensee applying delinquency charges to 12 days;
Requires licensees providing assistance programs during a disaster to report to the OIR details
of such assistance programs; and
Requires licensees to annually submit to the OFR reports of certain information, which OFR
may publish in a report after consolidating the data for all licensees.
The bill has a negative, likely insignificant, fiscal impact on state government, no impact on local
government, and an indeterminate fiscal impact on the private sector.
The bill provides an effective date of July 1, 2023.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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DATE: 3/25/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
The Florida Office of Financial Regulation (OFR) is responsible for all activities of the Financial
Services Commission (Commission) relating to the regulation of banks, credit unions, other
financial institutions, finance companies, and the securities industry. 1 OFR’s Division of Consumer
Finance (Division) licenses and regulates non-depository financial service industries and
individuals, and conducts examinations and complaint investigations for licensed entities to
determine compliance with Florida law.2
The Florida Consumer Finance Act, ch. 516, F.S. (Act), prohibits individuals and entities from
engaging in the business of making consumer finance loans unless first authorized to do so under
the Act.3 A consumer finance loan is defined as “a loan of money, credit, goods, or choses in
action, 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.” 4
Currently, the Act provides that, at the time of applying for a license, the applicant shall pay to the
office a nonrefundable biennial license fee of $625. Applications, except for applications to renew
or reactivate a license, must also be accompanied by a nonrefundable investigation fee of $200.
The Act 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 deceases
as principal amounts increase:
30% per annum, computed on the first $3,000 of the principal amount;
24% per annum on that part of the principal amount exceeding $3,000 and up to
$4,000; and
18% per annum on that part of the principal amount exceeding $4,000 and up to
$25,000.
Effect of the Bill
General
The bill provides a definition for the term “branch,” namely, “any location, other than a licensee’s
principal place of business, at which a licensee operates or conducts business … or which the
licensee owns or controls for the purposes of conducting business….”
The bill clarifies a person must not engage in the business of making consumer finance loans or
operate a branch of such business unless first authorized to do so under the Act. The bill requires
an application fee of $625 be paid to the office for each branch application filed, which is in
1 S. 20.121(3)(a)2., F.S. See also Florida Office of Financial Regulation, Agency Analysis of 2023 House Bill 1267, p. 1
(Mar. 10, 2023).
2 Florida Office of Financial Regulation, Division of Consumer Finance,
https://flofr.gov/sitePages/DivisionOfConsumerFinance.htm (last visited Mar. 13, 2023).
3 S. 516.02(1), F.S.
4 S. 516.01(2), F.S.
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addition to the $625 application fee for the branch’s principal place of business. The bill provides
that applications for a license for the principal place of business be accompanied by a
nonrefundable investigation fee of $200.
Maximum Rate Increase; Delinquency Charges
The bill increases the maximum interest rate a licensee may charge for a loan from 30% to 36%
and removes the tiered interest rate structure altogether. The bill also changes the 10-day rule for
delinquency charges to 12 days, such that, licensees may not charge delinquency charges until
the borrower has been in default for 12 days rather than 10 days.
Disaster Relief and Suspension of Penalties
The bill provides that in the event of a Federal Emergency Management Agency (FEMA) response
to a Presidential Disaster Declaration in Florida, if a licensee offers any assistance program to
borrowers impacted by the disaster, the licensee must send to the office a written notice within 10
days after the licensee’s establishment of the assistance program. The notice must include, at a
minimum, the following:
The licensed locations impacted by the disaster, including the physical addresses, if
applicable;
The telephone number, e-mail address, or other contact information for the licensee;
A brief description of the assistance programs available to borrowers in the impacted areas;
and
The start date and, if known, the end date of the assistance program.
Similarly, in the event of a FEMA response to a Presidential Disaster Declaration in Florida, the bill
requires a licensee operating in a county designated in the disaster declaration to suspend, within
90 days after the date of the initial declaration, all of the following:
Application of delinquency charges;
Repossessions of collateral pledged to loans made under the Act; and
Filing of lawsuits for collection of amounts owed for loans made under the Act.
Annual Reports
The bill requires a licensee, by March 15, 2024, and annually thereafter, to file a report with the
office, in a form and manner prescribed by commission rule, using aggregated and anonymized
data without reference to any borrower’s nonpublic personal information. The bill requires the
report to include the following information for the preceding calendar year:
The number of licenses under the Act held by the licensee as of December 31st of the
preceding calendar year;
The number of loan originations by the licensee from all licenses held under the Act during
the preceding calendar year;
The total number and dollar amount of loans outstanding by the licensee from all licenses
held under the Act as of December 31st of the preceding calendar year;
The total number of unsecured loans as of December 31st of the preceding calendar year;
The total number of loans separated by principal amount in the following ranges as of
December 31st of the preceding calendar year:
o From $0 to $5,000
o From $5,001 to $10,000
o From $10,001 to $15,000
o From $15,001 to $20,000
o From $20,001 to $25,000; and
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The total number and dollar amount of loans charged off as of December 31st of the
preceding calendar year.
The bill requires a licensee to submit the report to the office with an accompanying affidavit
certifying that all the information submitted is designated as trade secret. The bill allows the office
to publish a report of the information submitted if all the data published in the report are
anonymized aggregate data from all licensees.
B. SECTION DIRECTORY:
Section 1. Amends s. 516.01, F.S., relating to definitions.
Section 2. Amends s. 516.02, F.S., relating to loans; lines of credit; rates of interest; license.
Section 3. Amends s. 516.03, F.S., relating to application for license; fees; etc.
Section 4. Amends s. 516.031, F.S., relating to finance charge; maximum rates.
Section 5. Amends 516.15, F.S., relating to duties of licensee.
Section 6. Creates s. 516.151, F.S., relating to suspension of penalties and remedial
measures after disaster declaration.
Section 7. Creates s. 516.331, F.S., relating to annual reports by licensees.
Section 8. Provides an effective date of July 1, 2023.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
The OFR estimates its revenues may decrease by as much as $5,000 per fiscal year if it no
longer receives the background investigation fee of $200 required for each additional
location once replaced by a branch office license requirement.5 The OFR considers this to
be negligible amount which would not impact its operations.6 Additionally, according to the
OFR, the reduction in staff time no longer needed to review a full license application for
each additional location when replaced with a branch office license would likely offset any
loss in revenues.7
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
5 Florida Department of Financial Regulation, Agency Analysis of 2023 HB 1267, p. 5 (Mar. 10, 2023).
6 Id.
7 Id.
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None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill has an indeterminate fiscal impact on the private sector.8 Applicants will no longer be
required to pay a $200 background investigation fee for each additional location with the
implementation of a branch office license.9 This may save applicants up to $5,000 per fiscal
year in reduced fees.10
D. FISCAL COMMENTS:
The bill proposes to create a branch license in lieu of a full license for each additional location
of a licensee.11 The branch licenses will not include the $200 background investigation fee and
thus result in a fee reduction.12
Additionally, the bill would require the OFR to make technology changes to its internal
licensing system to create a branch office license and annual reporting functionality. 13 The cost
of these changes would be negligible and could be covered within the OFR’s existing budget.14
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to require counties or municipalities to spend
funds or take action requiring the expenditures of funds; reduce the authority that counties
or municipalities have to raise revenues in the aggregate; or reduce the percentage of state
tax shared with counties or municipalities.
2. Other:
The bill could require a fee bill, as the bill creates a branch license fee in lieu of a full
license fee for each additional location of a licensee.
B. RULE-MAKING AUTHORITY:
The bill creates a new section of statute that will require a licensee to file an annual report with
the office “in a form and manner prescribed by commission rule.” This section will require
rulemaking. Rule 69V-160.111, F.A.C., which adopts Disciplinary Guidelines for Consumer
Finance Companies, will also require an update.
8 Id.
9 Id.
10 Id.
11 Id. at 5.
12 Id.
13 Id. at 6.
14 Id. at 6.
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C. DRAFTING ISSUES OR OTHER COMMENTS:
Lines 207-2010: The term “assistance program” is undefined. While the OFR is not tasked
with approving the assistance program, it is unclear how the OFR will determine whether a
program is actually an assistance program that may be noticed to the OFR pursuant to s.
516.15(5), F.S.15
Lines 223-234: It is unclear when the suspension on application of delinquency charges,
repossession of collateral, and filing of lawsuits for collections would begin or end. “Within 90
days” does not specify the precise starting date, implying that the lender can start or suspend
anytime from the day of the declaration through the following 90 days.
Line 238: It is unclear whether the deadline will be March 15th of each year.
Line 251: This line references “loans outstanding by the licensee.” Replacing the word “with”
instead of the word “by” may provide clarity.
Line 272-274: The bill requires the licensee to submit a certification that all information
reported required to be reported under the bill is trade secret information. However, trade
secret protections are a question of law and fact to be decided by a court of competent
jurisdiction upon an action by a licensee to defend against publication pursuant to a public
record request. It may be appropriate to revise the bill to state that the license shall submit a
certification identifying those portions of information submitted that the licensee claims to be
trade secret.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
15 Id.
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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 1267 2023
1 A bill to be entitled
2 An act relating to consumer finance loans; amending s.
3 516.01, F.S.; defining the term "branch"; amending s.
4 516.02, F.S.; prohibiting persons from operating
5 branches of consumer finance loans businesses unless
6 authorized and licensed; amending s. 516.03, F.S.;
7 specifying application fees for making loans at
8 principal places of business and at branch offices;
9 making a technical change; amending s. 516.031, F.S.;
10 revising the maximum interest rates that consumer
11 finance loans licensees may charge, contract for, and
12 receive on loans; revising the timeframe after which
13 delinquency charges may be imposed; amending s.
14 516.15, F.S.; requiring licensees to notify within a
15 specified timeframe the Office of Financial Regulation
16 of certain information under certain circumstances;
17 providing requirements for such notices; creating s.
18 516.151, F.S.; requiring licensees to suspend
19 penalties and remedial measures within a specified
20 timeframe under certain circumstances; creating s.
21 516.331, F.S.; providing reporting requirements;
22 authorizing the office to publish a report under
23 certain circumstances; providing an effective date.
24
25 Be It Enacted by the Legislature of the State of Florida:
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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 1267 2023
26
27 Section 1. Section 516.01, Florida Statutes, is amended to
28 read:
29 516.01 Definitions.—As used in this chapter, the term:
30 (1) "Branch" means any location, other than a licensee's
31 principal place of business, at which a licensee operates or
32 conducts business under this chapter or which the licensee owns
33 or controls for the purpose of conducting business under this
34 chapter.
35 (2)(3) "Commission" means the Financial Services
36 Commission.
37 (3)(1) "Consumer finance borrower" or "borrower" means a
38 person who has incurred either direct or contingent liability to
39 repay a consumer finance loan.
40 (4)(2) "Consumer finance loan" means a loan of money,
41 credit, goods, or choses in action, including, except as
42 otherwise specifically indicated, provision of a line of credit,
43 in an amount or to a value of $25,000 or less for which the
44 lender charges, contracts for, collects, or receives interest at
45 a rate greater than 18 percent per annum.
46 (5)(8) "Control person" means an individual, partnership,
47 corporation, trust, or other organization that possesses the
48 power, directly or indirectly, to direct the management or
49 policies of a company, whether through ownership of securities,
50 by contract, or otherwise. A person is presumed to control a
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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 1267 2023
51 company if, with respect to a particular company, that person:
52 (a) Is a director, general partner, or officer exercising
53 executive responsibility or having similar status or functions;
54 (b) Directly or indirectly may vote 10 percent or more of
55 a class of a voting security or sell or direct the sale of 10
56 percent or more of a class of voting securities; or
57 (c) In the case of a partnership, may receive upon
58 dissolution or has contributed 10 percent or more of the
59 capital.
60 (6)(5) "Interest" means the cost of obtaining a consumer
61 finance loan and includes any profit or advantage of any kind
62 whatsoever that a lender may charge, contract for, collect,
63 receive, or in anywise obtain, including by means of any
64 collateral sale, purchase, or agreement, as a condition for a
65 consumer finance loan. Charges specifically permitted by this
66 chapter, including commissions received for insurance written as
67 permitted by this chapter, shall not be deemed interest.
68 (7)(6) "License" means a permit issued under this chapter
69 to make and collect loans in accordance with this chapter at a
70 single place of business.
71 (8)(7) "Licensee" means a person to whom a license is
72 issued.
73 (9)(4) "Office" means the Office of Financial Regulation
74 of the commission.
75 Section 2. Subsection (1) of section 516.02, Florida
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HB 1267 2023
76 Statutes, is amended to read:
77 516.02 Loans; lines of credit; rate of interest; license. —
78 (1) A person must not engage in the business of making
79 consumer finance loans or operate a branch of such business
80 unless she or he is authorized to do so under this chapter or
81 other statutes and unless the person first obtains a license
82 from the office.
83 Section 3. Subsection (1) of section 516.03, Florida
84 Statutes, is amended to read:
85 516.03 Application for license; fees; etc.—
86 (1) APPLICATION.—Application for a license to make loans
87 under this chapter shall be in the form prescribed by rule of
88 the commission. The commission may require each applicant to
89 provide any information reasonably necessary to det ermine the
90 applicant's eligibility for licensure. The applicant shall also
91 provide information that the office requires concerning any
92 officer, director, control person, member, partner, or joint
93 venturer of the applicant or any person having the same or
94 substantially similar status or performing substantially similar
95 functions or concerning any individual who is the ultimate
96 equitable owner of a 10-percent or greater interest in the
97 applicant. The office may require information concerning any
98 such applicant or person, including, but not limited to, his or
99 her full name and any other names by which he or she may have
100 been known, age, social security number, residential history,
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101 qualifications, educational and business history, and
102 disciplinary and criminal history. The applicant must provide
103 evidence of liquid assets of at least $25,000 or documents
104 satisfying the requirements of s. 516.05(10). At the time of
105 making such application, the applicant shall pay to the office a
106 nonrefundable biennial license fee of $625 for the principal
107 place of business and for each branch application filed .
108 Applications for a license for the principal place of business,
109 except for applications to renew or reactivate a license, must
110 also be accompanied by a nonrefundable investigation fee of
111 $200. An application is considered received for purposes of s.
112 120.60 upon receipt of a completed application form as
113 prescribed by commission rule, a nonrefundable application fee
114 of $625, and any other fee prescribed by law. The commission may
115 adopt rules requiring electronic submission of any form,
116 document, or fee required by this chapter act if such rules
117 reasonably accommodate technological or financial hardship. The
118 commission may prescribe by rule requirements and procedures for
119 obtaining an exemption due to a technological or financial
120 hardship.
121 Section 4. Subsections (1) and (3) of section 516.031,
122 Florida Statutes, are amended to read:
123 516.031 Finance charge; maximum rates.—
124 (1) INTEREST RATES.—A licensee may lend any sum of money
125 up to $25,000. A licensee may not take a security interest
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126 secured by land on any loan less than $1,000. The licensee may
127 charge, contract for, and receive thereon interest charges as
128 provided and authorized by this section. The maximum interest
129 rate shall be 36 30 percent per annum, computed on the first
130 $3,000 of the principal amount; 24 percent per annum on that
131 part of the principal amount exceeding $3,000 and up to $4,000;
132 and 18 percent per annum on that part of the principal amount
133 exceeding $4,000 and up to $25,000. The original principal
134 amount as used in this section is the same as the amount
135 financed as defined by the federal Truth in Lending Act and
136 Regulation Z of the Board of Governors of the Federal Reserve
137 System. In determining compliance with the statutory maximum
138 interest and finance charges set forth herein, the computations
139 used shall be simple interest and not add-on interest or any
140 other computations. If two or more interest rates are applied to
141 the principal amount of a loan, the licensee may charge,
142 contract for, and receive interest at that single annual
143 percentage rate which, if applied according to the actuarial
144 method to each of the scheduled periodic balances of principal,
145 would produce at maturity the same total amount of in terest as
146 would result from the application of the two or more rates
147 otherwise permitted, based upon the assumption that all payments
148 are made as agreed.
149 (3) OTHER CHARGES.—
150 (a) In addition to the interest, delinquency, and
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151 insurance charges provided in this section, further or other
152 charges or amount for any examination, service, commission, or
153 other thing or otherwise may not be directly or indirectly
154 charged, contracted for, or received as a condition to the grant
155 of a loan, except:
156 1. An amount of up to $25 to reimburse a portion of the
157 costs for investigating the character and credit of the person
158 applying for the loan;
159 2. An annual fee of $25 on the anniversary date of each
160 line-of-credit account;
161 3. Charges paid for the brokerage fee on a loan or line of
162 credit of more than $10,000, title insurance, and the appraisal
163 of real property offered as security if paid to a third party
164 and supported by an actual expenditure;
165 4. Intangible personal property tax on the loan note or
166 obligation if secured by a lien on real property;
167 5. The documentary excise tax and lawful fees, if any,
168 actually and necessarily paid out by the licensee to any public
169 officer for filing, recording, or releasing in any public office
170 any instrument securing the loan, which may be collected when
171 the loan is made or at any time thereafter;
172 6. The premium payable for any insurance in lieu of
173 perfecting any security interest otherwise required by the
174 licensee in connection with the loan if the premium does not
175 exceed the fees which would otherwise be payable, which may be
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176 collected when the loan is made or at any time thereafter;
177 7. Actual and reasonable attorney fees and court costs as
178 determined by the court in which suit is filed;
179 8. Actual and commercially reasonable expenses for
180 repossession, storing, repairing and placing in condition for
181 sale, and selling of any property pledged as security; or
182 9. A delinquency charge for each payment in default for at
183 least 12 10 days if the charge is agreed upon, in writing,
184 between the parties before imposing the charge. Delinquency
185 charges may be imposed as follows:
186 a. For payments due monthly, the delinquency charge for a
187 payment in default may not exceed $15.
188 b. For payments due semimonthly, the delinquency charge
189 for a payment in default may not exceed $7.50.
190 c. For payments due every 2 weeks, the delinquency charge
191 for a payment in default may not exceed $7.50 if two payments
192 are due within the same calendar month, and may not exceed $5 if
193 three payments are due within the same calendar month.
194
195 Any charges, including interest, in excess of the combined total
196 of all charges authorized and permitted by this chapter
197 constitute a violation of chapter 687 governing interest and
198 usury, and the penalties of that chapter apply. In the event of
199 a bona fide error, the licensee shall refund or credit the
200 borrower with the amount of the overcharge immediately but
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201 within 20 days after the discovery of such error.
202 Section 5. Subsection (5) is added to section 516.15,
203 Florida Statutes, to read:
204 516.15 Duties of licensee.—Every licensee shall:
205 (5) In the event of a Federal Emergency Management Agency
206 response to a Presidential Disaster Declaration in the state, if
207 the licensee offers any assistance program to borrowers impacted
208 by the disaster, send to the office a written notice in a
209 physical or electronic format within 10 days after the
210 licensee's establishment of the assistance program. The notice
211 must include, at a minimum, the following information, subject
212 to change as additional declarations are made or revoked:
213 (a) The licensed locations impacted by the disaster,
214 including the physical addresses, if applicable.
215 (b) The telephone number, e-mail address, or other contact
216 information for the licensee.
217 (c) A brief description of the assistance programs
218 available to borrowers in the impacted areas.
219 (d) The start date and, if known, the end date of the
220 assistance program.
221 Section 6. Section 516.151, Florida Statutes, is created
222 to read:
223 516.151 Suspension of penalties and remedial measures
224 after disaster declaration.—In the event of a Federal Emergency
225 Management Agency response to a Presidential Disaster
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226 Declaration in the state, a licensee operating in a county
227 designated in the disaster declaration shall suspend within 90
228 days after the date of the initial declaration the following:
229 (1) The application of delinquency charges as provided in
230 s. 516.031(3)(a)9.
231 (2) Repossessions of collateral pledged to loans made
232 under this chapter.
233 (3) Filing of lawsuits for collection of amounts owed for
234 loans made under this chapter.
235 Section 7. Section 516.331, Florida Statutes, is created
236 to read:
237 516.331 Annual reports by licensees.—
238 (1) By March 15, 2024, and annually thereafter, a licensee
239 shall file a report with the office, in a form and manner
240 prescribed by commission rule, using aggregated and anonymized
241 data without reference to any borrower's nonpublic personal
242 information.
243 (2) The report must include the following information for
244 the preceding calendar year:
245 (a) The number of licenses under this chapter held by the
246 licensee as of the last day of the preceding calendar year.
247 (b) The number of loan originations by the licensee from
248 all licenses held under this chapter during the preceding
249 calendar year.
250 (c) The total number and dollar amount of loans
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251 outstanding by the licensee from all licenses held under this
252 chapter as of the last day of the preceding calendar year.
253 (d) The total number of loans whereby the licensee held a
254 security interest in collateral as of the last day of the
255 preceding calendar year.
256 (e) The total number of unsecured loans as of the last day
257 of the preceding calendar year.
258 (f) The total number of loans separated by principal
259 amount in the following ranges as of the last day of the
260 preceding calendar year:
261 1. From $0 to $5,000.
262 2. From $5,001 to $10,000.
263 3. From $10,001 to $15,000.
264 4. From $15,001 to $20,000.
265 5. From $20,001 to $25,000.
266 (g) The total number and dollar amount of loans charged
267 off as of the last day of the preceding calendar year.
268 (3) The licensee shall submit the report to the office
269 with an accompanying affidavit certifying pursuant to s.
270 655.0591 that all information submitted is designated as trade
271 secret.
272 (4) The office may publish a report of the information
273 submitted pursuant to this section if all the data published in
274 the report are anonymized aggregate data from all licensees.
275 Section 8. This act shall take effect July 1, 2023.
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INSURANCE & BANKING SUBCOMMITTEE
HB 1267 by Rep. Fernandez-Barquin
Relating to Consumer Finance Loans
AMENDMENT SUMMARY
March 25, 2023
Amendment 1 by Rep. Fernandez-Barquin (Line 267): The amendment:
• Adds to the proposed licensee reporting requirements of the bill to create reporting
requirements regarding delinquent loans.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1267 (2023)
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: Insurance & Banking
2 Subcommittee
3 Representative Fernandez-Barquin offered the following:
4
5 Amendment
6 Between lines 267 and 268, insert:
7 (h) The total number and dollar amount of loans with
8 delinquency status listed as:
9 1. Current or less than 30 days past due.
10 2. From 30 to 59 days past due.
11 3. From 60 to 89 days past due.
12 4. At least 90 days past due.
568167 - h1267-line267.docx
Published On: 3/24/2023 6:00:25 PM
Page 1 of 1
HB 1353
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 1353 Commercial Financing Product Brokers and Providers
SPONSOR(S): Bankson
TIED BILLS: IDEN./SIM. BILLS: SB 1624
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee Fletcher Lloyd
2) Justice Appropriations Subcommittee
3) Commerce Committee
SUMMARY ANALYSIS
A commercial financing product, also known as revenue-based financing, is a loan that a business agrees to pay
back over time by pledging a portion of its future revenue to the lender until a set amount is paid back. Unlike
bank loans and private investors, commercial financing products can help businesses access capital without the
business owner having to incur a personal loan guarantee or lose equity. Commercial financing products are
provided by private companies, often via brokers.
The Florida Office of Financial Regulation (OFR) is responsible for all activities relating to the regulation of
banks, credit unions, other financial institutions, finance companies, and the securities industry. Florida’s laws
relating to the regulation of trade, commerce, and investments are codified at ch. 559, F.S. Currently, there are
no Florida laws regulating commercial financing product brokers and providers.
Generally, the bill:
Creates Part XIII of ch. 599, F.S., entitled “Florida Commercial Financing Disclosure Law;”
Provides definitions for, and scope of, Part XIII, as more particularly described below;
Creates disclosure requirements for commercial financing product providers;
Prohibits brokers from engaging in certain activities; and
Grants the Attorney General the exclusive authority to enforce Part XIII.
The bill has no impact on state revenues or local government revenues and expenditures, but has an
indeterminate negative impact on state expenditures and an indeterminate positive impact on the private
sector.
The bill provides an effective date of July 1, 2023.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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DATE: 3/25/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Business owners who need to meet unexpected demand, stock up on product, or quickly repair or
replace failed equipment have options for financing such costs. Options include obtaining a small
business loan from a bank or working with venture capitalists or angel investors. Oftentimes, however,
banks require a personal guarantee for such loans and venture capitalists and angel investors seek
equity in the business in exchange for providing capital. 1
A commercial financing product, also known as revenue-based financing (RBF), is a loan that a
business agrees to pay back over time by pledging a portion of its future revenue to the lender until a
set amount is paid back.2 Unlike bank loans and private investors, commercial financing products can
help businesses access capital without the business owner having to incur a personal loan guarantee
or lose equity.3
Commercial financing products are provided by private companies, often via brokers. In a commercial
financing product transaction (CFPT), the business essentially “sells” its future revenue to the RBF-
providing company by entering into a contract. The company providing the RBF assumes the liability of
potentially not being paid back the full amount of the RBF, making it an unsecured debt obligation. This
is unlike obtaining a bank loan or working with investors, where the debt obligation is secured by
property and partial ownership of the enterprise, respectively.
The Florida Office of Financial Regulation (OFR) is responsible for all activities relating to the regulation
of banks, credit unions, other financial institutions, finance companies, and the securities industry.4
Florida’s laws relating to the regulation of trade, commerce, and investments are codified at ch. 559,
F.S. Currently, there are no Florida laws regulating commercial financing product brokers and
providers.
Effect of the Bill
Generally, the bill:
Creates Part XIII of ch. 599, F.S., entitled “Florida Commercial Financing Disclosure Law;”
Provides definitions for, and scope of, Part XIII, as more particularly described below;
Creates disclosure requirements for commercial financing product providers;
Prohibits brokers from engaging in certain activities; and
Grants the Attorney General exclusive enforcement authority.
Definitions
As used in Part XIII, the bill creates the following definitions:
“Accounts receivable purchase transaction” (ARPT) means a transaction in which a business
forwards or otherwise sells to a person all or a portion of the business’ accounts, as defined in s.
1 Business News Daily, Using Revenue-Based Financing to Grow Your Business,
https://www.businessnewsdaily.com/6659-revenue-based-financing-tips.html (last visited Mar. 22, 2023).
2 Id.
3 Id.
4 S. 20.121(3)(a)2., F.S.
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679.1021, F.S.,5 or payment intangibles, as defined in s. 679.1021, F.S., 6 at a discount to the
expected value of the account or payment intangibles. For purposes of Part XIII, the provider’s
characterization of an ARPT as a purchase is conclusive that the ARPT is not a loan or a
transaction for the use, forbearance, or detention of money.
“Advance fee” means any consideration that is assessed or collected by a broker before the
closing of CFPT.
“Broker” means:
o A person who, for compensation, arranges a CFPT or an offer between a third party and
a business in the state which would be binding upon that third party.
o The term excludes a provider and any individual or entity whose compensation is not
dependent upon the terms of the specific CFPT obtained or offered.
“Business” means an individual or group of individuals, sole proprietorship, corporation, limited
liability company, trust, estate, cooperative, association, or limited or general partnership
engaged in a business activity.
“Commercial financing product” means:
o A commercial loan, ARPT, commercial open-ended credit plan, or each to the extent the
transaction is a transaction the proceeds of which are provided to a business or are
intended to be used to carry on a business and not for personal, family, or household
purposes (i.e., a “business purpose transaction” (BPT)).
o To determine whether a transaction is a BPT, the provider may rely on any written
statement of intended purpose signed by the business.
“Commercial loan” means a loan to a business, whether secured or unsecured.
“Commercial open-end credit plan” (COECP) means commercial financing extended by any
provider under a plan in which:
o The provider reasonably contemplates repeat transactions.
o The amount of financing that may be extended to the business during the term of the
plan, up to any limit set by the provider, is generally made available to the extent that
any outstanding balance is repaid.
“Depository institution” means:
o A bank, trust company, or industrial loan company doing business under the authority of,
or in accordance with, a license, certificate, or charter issued by the U.S., Florida, or any
other state, district, territory, or commonwealth of the U.S. which is authorized to
transact business in Florida;
o A federally chartered savings and loan association, federal savings bank, or federal
credit union that is authorized to transact business in Florida; or
o A savings and loan association, savings bank, or credit union organized under the laws
of Florida or any other state which is authorized to transact business in Florida.
“Provider” means:
o A person who consummates more than five CFPTs in any calendar year.
o The term also includes a person who enters into a written agreement with a depository
institution to arrange for the extension of a commercial financing product by the
depository institution to a business via an online lending platform administered by the
person.
5 “Account,” means a right to payment of a monetary obligation, whether or not earned by performance, for property that
has been or is to be sold, leased, licensed, assigned, or otherwise disposed of; for services rendered or to be rendered;
for a policy of insurance issued or to be issued; for a secondary obligation incurred or to be incurred; for energy provided
or to be provided; for the use or hire of a vessel under a charter or other contract; arising out of the use of a credit or
charge card or information contained on or for use with the card; or as winnings in a lottery or other game of chance
operated or sponsored by a state, governmental unit of a state, or person licensed or authorized to operate the game by a
state or governmental unit of a state. The term includes health-care-insurance receivables. The term does not include
rights to payment evidenced by chattel paper or an instrument; commercial tort claims; deposit accounts; investment
property; letter-of-credit rights or letters of credit; or rights to payment for money or funds advanced or sold, other than
rights arising out of the use of a credit or charge card or information contained on or for use with the card. S.
679.1021(1)(b), F.S.
6 “Payment intangible” means a general intangible under which the account debtor’s principal obligation is a monetary
obligation. S. 679.1021(1)(iii), F.S.
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o The fact a provider extends a specific offer for a commercial financing product on behalf
of a depository institution may not be construed to mean the provider engaged in lending
or financing or originated that loan or financing.
Scope
Part XIII applies to any CFPT consummated on or after January 1, 2024, but does not apply to a:
Provider that:
o Is a federally insured depository institution or an affiliate or holding company of such
institution;
o Is a subsidiary or service corporation that is owned and controlled by a federally insured
depository institution;
o Is a lender regulated under the Farm Credit Act of 1971, 12 U.S.C. ss. 2001, et seq.;
o Is licensed as a money transmitter in accordance with a license, certificate, or charter
issued by Florida or any other state, district, territory, or commonwealth of the U.S.; or
o Consummates no more than five CFPTs in Florida in a 12-month period.
CFPT:
o That is secured by real property; a lease; or a purchase money obligation that is incurred
as all or part of the price of the collateral or for value given to enable the business to
acquire rights in or the use of the collateral if the value is in fact so used; or
o In which the recipient is a motor vehicle dealer or an affiliate thereof, or a vehicle rental
company or an affiliate thereof, pursuant to a commercial loan or COECP of at least
$50,000 or a commercial financing product offered by a person in connection with the
sale or lease of products or services that such person manufactures, licenses, or
distributes, or whose parent company or any of its subsidiaries manufactures, licenses,
or distributes.
o Of more than $500,000.
Disclosures by Providers
The bill requires a provider that consummates a CFPT to disclose the terms of the CFPT. The bill
mandates such disclosures be provided at the time of or before consummation of the CFPT, requires
only one disclosure for each CFPT, and does not require a disclosure for any modification, forbearance,
or change to a CFPT.
A provider must disclose the following information in connection with each CFPT:
(a) The total amount of funds provided to the business under the terms of the agreement;
(b) The total amount of funds disbursed to the business if less than the amount specified in
paragraph (a) as a result of any fees deducted or withheld at disbursement, any amount paid to
the provider to satisfy a prior balance, and any amount paid to a third party on behalf of the
business;
(c) The total amount to be paid to the provider under the terms of the agreement;
(d) The total dollar cost under the terms of the agreement, calculated by finding the differenc e
between the amount specified in paragraph (a) and the amount specified in paragraph (c).
(e) The manner, frequency, and amount of each payment. If the payments may vary, the
provider must instead disclose the manner, frequency, and the estimated amount of the initial
payment and a description of the methodology for calculating any variable payment and the
circumstances when payments may vary.
(f) A statement of whether there are any costs or discounts associated with prepayment,
including a reference to the paragraph in the agreement which creates the contractual rights of
the parties related to prepayment.
Prohibited Acts for Brokers
The bill prohibits brokers from:
Assessing, collecting, or soliciting an advance fee from a business to provide services as a
broker.
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o Notably, however, this prohibition does not preclude a broker from soliciting a business
to pay for, or preclude a business from paying for, actual services necessary to apply for
a commercial financing product (i.e., a credit check or appraisal of security) if such
payment is made by check or money order payable to a party independent of the broker;
Making or using any false or misleading representation or omitting any material fact in the offer
or sale of the services of a broker, or engage in any act that operates or would operate as fraud
or deception in connection with the offer or sale of the services of a broker, notwithstanding the
lack of reliance by the business;
Making or using any false or deceptive representation in its business dealings; and
Offering the services of a broker by making, publishing, disseminating, circulating, or placing
before the public within Florida an advertisement in which the offer or advertisement does not
disclose the name, business address, and telephone number of the broker.
o For purposes of the above, the broker must disclose the actual address and telephone
number of the business of the broker in addition to the address and telephone number of
any forwarding service the broker may use.
Enforcement of Part XIII
The bill provides exclusive authority to the Attorney General to enforce Part XIII. Specifically, the
Attorney General may:
Receive and act on complaints;
Take action designed to obtain voluntary compliance with Part XIII; and
Commence administrative or judicial proceedings to enforce compliance with Part XIII.
The bill sets forth the following with regard to violations of Part XIII:
A violation of any provision of Part XIIII is punishable by a fine of $500 per incident, not to
exceed $20,000 for all aggregated violations arising from the use of the transaction
documentation or materials found to be in violation of Part XIII;
A subsequent violation of any provision of Part XIII after receipt of a written notice of a prior
violation from the Attorney General is punishable by a fine of $1,000 per incident, not to
exceed $50,000 for all aggregated violations arising from the use of the transaction
documentation or materials found to be in violation of Part XIII;
The bill provides a violation of any provision of Part XIII does not affect the enforceability or validity of
the underlying CFPT. The bill also provides that nothing in Part XIII creates or is intended to create a
private right of action against any person or entity based upon compliance or noncompliance with the
provisions of Part XIII.
B. SECTION DIRECTORY:
Section 1: Creates Part XIII of ch. 559, F.S., relating to Florida Commercial Financing Disclosure
Law.
Section 2: Provides an effective date of July 1, 2023.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
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2. Expenditures:
The bill has an indeterminate negative impact on the Department of Legal Affairs to the extent that
the Attorney General pursues enforcement of the bill. See Fiscal Comments, below.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may have a positive impact on businesses to the extent that they have access to new capital to
assist or expand their endeavors.
Businesses who qualify as a provider under Part XIII would need to make the disclosures relating to
CFPT required by the bill.
D. FISCAL COMMENTS:
The bill could increase the workload of the Attorney General’s office. It is currently unknown whether
additional resources would be needed to address the additional workload impact, but it is likely current
resources would be sufficient to handle the initial impact. Any potential impact for staffing could be
addressed later through the traditional Legislative Budget Request process. 7
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:
None.
B. RULE-MAKING AUTHORITY:
Not applicable. The bill does not provide rule-making authority.
C. DRAFTING ISSUES OR OTHER COMMENTS:
The bill provides the scope of Part XIII does not apply to CFPTs of more than $500,000. It might be
appropriate to amend the bill to remove this limitation of scope, as CFPTs of more than $500,000 would
not be subject to any other regulatory authority.
Additionally, because OFR is traditionally responsible for all activities relating to the regulation of banks,
credit unions, financial institutions, finance companies, and the securities industry in Florida, it might be
7 Email from Adam Keith, Budget Chief, Justice Appropriations Subcommittee, RE: Rep Bankson – HB 1353 Commercial
Financing Product Brokers and Providers (Mar. 17, 2023).
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appropriate to amend the bill to expressly grant OFR regulatory authority over commercial financing
product providers and brokers and related CFPTs.
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 1353 2023
1 A bill to be entitled
2 An act relating to commercial financing product
3 brokers and providers; creating part XIII of ch. 559,
4 F.S., entitled "Florida Commercial Financing
5 Disclosure Law"; creating s. 559.961, F.S.; providing
6 a short title; creating s. 559.9611, F.S.; providing
7 definitions; creating s. 559.9612, F.S.; providing
8 scope; creating s. 559.9613, F.S.; providing
9 requirements for disclosure of certain information by
10 commercial financing product providers under certain
11 circumstances; creating s. 559.9614, F.S.; providing
12 prohibited acts by commercial financing product
13 providers; creating s. 559.9615, F.S.; providing
14 exclusive authority of the Attorney General to enforce
15 specified provisions; providing fines; providing
16 construction; providing an effective date.
17
18 Be It Enacted by the Legislature of the State of Florida:
19
20 Section 1. Part XIII of chapter 559, Florida Statutes,
21 consisting of sections 559.961, 559.9611, 559.9612, 559.9613,
22 559.9614, and 559.9615, is created to read:
23 PART XIII
24 FLORIDA COMMERCIAL FINANCING DISCLOSURE LAW
25 559.961 Short title.—This part may be cited as the
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26 "Florida Commercial Financing Disclosure Law."
27 559.9611 Definitions.—As used in this part, the term:
28 (1) "Accounts receivable purchase transaction" means a
29 transaction in which a business forwards or otherwise sells to a
30 person all or a portion of the business' accounts, as defined in
31 s. 679.1021, or payment intangibles, as defined in s. 679. 1021,
32 at a discount to the expected value of the account or payment
33 intangibles. For purposes of this part, the provider's
34 characterization of an accounts receivable purchase transaction
35 as a purchase is conclusive that the accounts receivable
36 purchase transaction is not a loan or a transaction for the use,
37 forbearance, or detention of money.
38 (2) "Advance fee" means any consideration that is assessed
39 or collected by a broker before the closing of a commercial
40 financing product transaction.
41 (3) "Broker" means a person who, for compensation or the
42 expectation of compensation, arranges a commercial financing
43 product transaction or an offer between a third party and a
44 business in the state which would, if executed, be binding upon
45 that third party. The term excludes a provider and any
46 individual or entity whose compensation is not based or
47 dependent upon on the terms of the specific commercial financing
48 product transaction obtained or offered.
49 (4) "Business" means an individual or group of
50 individuals, a sole proprietorship, a corporation, a limited
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51 liability company, a trust, an estate, cooperative, an
52 association, or a limited or general partnership engaged in a
53 business activity.
54 (5) "Commercial financing product" means a commercial
55 loan, accounts receivable purchase transaction, commercial open-
56 end credit plan, or each to the extent the transaction is a
57 business purpose transaction. As used in this subsection, the
58 term "business purpose transaction" means a transaction the
59 proceeds of which are provided to a business or are intended to
60 be used to carry on a business and not for personal, family, or
61 household purposes. For purposes of determining whether a
62 transaction is a business purpose transaction, the provider may
63 rely on any written statement of intended purpose signed by the
64 business. The statement may be a separate statement or may be
65 contained in an application, agreement, or other document signed
66 by the business or the business owner.
67 (6) "Commercial loan" means a loan to a business, whether
68 secured or unsecured.
69 (7) "Commercial open-end credit plan" means commercial
70 financing extended by any provider under a plan in which:
71 (a) The provider reasonably contemplates repeat
72 transactions.
73 (b) The amount of financing that may be extended to the
74 business during the term of the plan, up to any limit set by the
75 provider, is generally made available to the extent that any
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76 outstanding balance is repaid.
77 (8) "Depository institution" means:
78 (a) A bank, a trust company, or an industrial loan company
79 doing business under the authority of, or in accordance with, a
80 license, certificate, or charter issued by the United States,
81 this state, or any other state, district, territory, or
82 commonwealth of the United States which is authorized to
83 transact business in this state;
84 (b) A federally chartered savings and loan association,
85 federal savings bank, or federal credit union that is authorized
86 to transact business in the state; or
87 (c) A savings and loan association, savings bank, or
88 credit union organized under the laws of this or any other state
89 which is authorized to transact business in the state.
90 (9) "Provider" means a person who consummates more than
91 five commercial financing product transactions to a business
92 located in the state in any calendar year. The term also
93 includes a person who enters into a written agreement with a
94 depository institution to arrange for the extension of a
95 commercial financing product by the depository institution to a
96 business via an online lending platform administered by the
97 person. The fact that a provider extends a specific offer for a
98 commercial financing product on behalf of a depository
99 institution may not be construed to mean that the provider
100 engaged in lending or financing or originated that loan or
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101 financing.
102 559.9612 Scope of this part.—This part applies to any
103 commercial financing product transaction consummated on or after
104 January 1, 2024. This part does not apply to:
105 (1) A provider that is:
106 (a) A federally insured depository institution or an
107 affiliate or holding company of such institution; or
108 (b) A subsidiary or service corporation that is owned and
109 controlled by a federally insured depository institution.
110 (2) A provider that is a lender regulated under the Farm
111 Credit Act of 1971, 12 U.S.C. ss. 2001 et seq.
112 (3) A commercial financing product transaction that is:
113 (a) Secured by real property;
114 (b) A lease; or
115 (c) A purchase money obligation that is incurred as all or
116 part of the price of the collateral or for value given to enable
117 the business to acquire rights in or the use of the collateral
118 if the value is in fact so used.
119 (4) A commercial financing product transaction in which
120 the recipient is a motor vehicle dealer or an affiliate of such
121 a dealer, or a vehicle rental company or an affiliate of such a
122 company, pursuant to a commercial loan or commercial open-end
123 credit plan of at least $50,000 or a commercial financing
124 product offered by a person in connection with the sale or lease
125 of products or services that such person manufactures, licenses,
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126 or distributes, or whose parent company or any of its directly
127 or indirectly owned and controlled subsidiaries manufacturers,
128 licenses or distributes.
129 (5) A provider that is licensed as a money transmitter in
130 accordance with a license, certificate, or charter issued by
131 this state or any other state, district, territory, or
132 commonwealth of the United States.
133 (6) A provider that consummates no more than five
134 commercial financing product transactions in the state in a 12-
135 month period.
136 (7) A commercial financing product transaction of more
137 than $500,000.
138 559.9613 Disclosures.—
139 (1) A provider that consummates a commercial financing
140 product transaction shall disclose the terms of the commercial
141 financing product transaction as required by this part. The
142 disclosures must be provided at or before consummation of the
143 transaction. Only one disclosure must be provided for each
144 commercial financing product transaction, and a disclosure is
145 not required as result of a modification, forbearance, or change
146 to a consummated commercial financing product transaction.
147 (2) A provider must disclose the following information in
148 connection with each commercial financing product transaction:
149 (a) The total amount of funds provided to the business
150 under the terms of the agreement.
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151 (b) The total amount of funds disbursed to the business if
152 less than the amount specified in paragraph (a) as a result of
153 any fees deducted or withheld at disbursement, any amount paid
154 to the provider to satisfy a prior balance, and any amount paid
155 to a third party on behalf of the business.
156 (c) The total amount to be paid to the provider under the
157 terms of the agreement.
158 (d) The total dollar cost under the terms of the
159 agreement, calculated by finding the difference between the
160 amount specified in paragraph (a) and the amount specified in
161 paragraph (c).
162 (e) The manner, frequency, and amount of each payment. If
163 the payments may vary, the provider shall instead disclose the
164 manner, frequency, and the estimated amount of the initial
165 payment and a description of the methodology for calculating any
166 variable payment and the circumstances when payments may vary.
167 (f) A statement of whether there are any costs or
168 discounts associated with prepayment, including a reference to
169 the paragraph in the agreement which creates the contractual
170 rights of the parties related to prepayment.
171 559.9614 Prohibited acts.—A broker may not:
172 (1) Assess, collect, or solicit an advance fee fr om a
173 business to provide services as a broker. However, this
174 subsection does not preclude a broker from soliciting a business
175 to pay for, or preclude a business from paying for, actual
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176 services necessary to apply for a commercial financing product,
177 including, but not limited to, a credit check or an appraisal of
178 security, if such payment is made by check or money order
179 payable to a party independent of the broker;
180 (2) Make or use any false or misleading representation or
181 omit any material fact in the offer or sale of the services of a
182 broker or engage, directly or indirectly, in any act that
183 operates or would operate as fraud or deception upon any person
184 in connection with the offer or sale of the services of a
185 broker, notwithstanding the absence of reliance by the business;
186 (3) Make or use any false or deceptive representation in
187 its business dealings; or
188 (4) Offer the services of a broker by making, publishing,
189 disseminating, circulating, or placing before the public within
190 the state an advertisement in a newspaper or other publication
191 or an advertisement in the form of a book, notice, handbill,
192 poster, sign, billboard, bill, circular, pamphlet, letter,
193 photograph, or motion picture or an advertisement circulated by
194 radio, loudspeaker, telephone, television, telegraph, or in any
195 other way, in which the offer or advertisement does not disclose
196 the name, business address, and telephone number of the broker.
197 For purposes of this subsection, the broker shall disclose the
198 actual address and telephone number of the business of the
199 broker in addition to the address and telephone number of any
200 forwarding service that the broker may use.
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201 559.9615 Enforcement.—
202 (1) The Attorney General has exclusive authority to
203 enforce this part. The Attorney General may:
204 (a) Receive and act on complaints.
205 (b) Take action designed to obtain voluntary compliance
206 with this part.
207 (c) Commence administrative or judicial proceedings to
208 enforce compliance with this part.
209 (2)(a) A violation of any provision of this part is
210 punishable by a fine of $500 per incident, not to exceed $20,000
211 for all aggregated violations arising from the use of the
212 transaction documentation or materials found to be in violation
213 of this part.
214 (b) A violation of any provision of this part after
215 receipt of a written notice of a prior violation from the
216 Attorney General is punishable by a fine of $1,000 per incident,
217 not to exceed $50,000 for all aggregated violations arising from
218 the use of the transaction documentation or materials found to
219 be in violation of this part.
220 (c) A violation of any provision of this part does not
221 affect the enforceability or validity of the underlying
222 commercial financing product transaction.
223 (3) Nothing in this part creates or is intended to create
224 a private right of action against any person or entity based
225 upon compliance or noncompliance with the provisions of this
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226 part.
227 Section 2. This act shall take effect July 1, 2023.
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HB 1545
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 1545 Health Insurance Identification Cards
SPONSOR(S): Stevenson
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee Sellas Lloyd
2) Commerce Committee
SUMMARY ANALYSIS
The Department of Financial Services (DFS) has broad duties, including insurance consumer assistance and
protection. DFS conducts insurance-related consumer outreach through its Division of Consumer Services
(DCS). DCS provides education, information, and assistance to consumers for all products or services
regulated by DFS or the Financial Services Commission. The Florida Insurance Code (Code) regulates the
insurance industry in Florida and is primarily administered by the Florida Office of Insurance Regulation (OIR).
The Code requires certain content for prescription identification cards, health benefit plan identification cards,
and health management organization identification cards (collectively referred to as health-related identification
cards). This requirement includes required information such as the insured’s name, identification number, and
policy/group number.
The bill requires that health plans regulated by the state of Florida print the letters “FL” on the back left of the
health-related identification card accompanied with a quick response (QR) code that links to DCS consumer
complaint website. For health plans regulated by the federal government, the letters “FED” must be printed on
the back of the health-related identification card accompanied with a QR code that links to consumer complaint
website of the Centers for Medicare and Medicaid Services.
The bill has no impact on state and local government and an indeterminant negative fiscal impact on the
private sector.
The bill has an effective date of January 1, 2024.
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
Department of Financial Services and Division of Consumer Finance
The Department of Financial Services (DFS) has a number of regulatory responsibilities over the
Florida insurance market. DFS conducts insurance-related consumer outreach through its Division of
Consumer Services (DCS). DCS provides education, information, and assistance to consumers for all
products or services regulated by DFS or the Financial Services Commission (via the Office of
Insurance Regulation).1 The divisions’ duties specifically include:
Receiving consumer questions and complaints;
Educating the public about insurance-related topics;
Providing mediation to resolve disputes between a consumer and insurance company; and
Serving as a conduit for referrals for further legal action by DFS.2
Office of Insurance Regulation
The Office of Insurance Regulation (OIR) is the primary regulator over the transaction of insurance in
the state, in accordance with the Florida Insurance Code (Code). The Life and Health Unit of OIR
provides financial, conduct, and product oversight of health insurers, health maintenance organizations,
and other regulated entities providing health care coverage pursuant to various chapters of the Code.
The following laws constitute the Code:3
Chapter 624, F.S. – Insurance Code: Administration and General Provisions
Chapter 626, F.S. – Insurance Field Representatives and Operations
Chapter 627, F.S. – Insurance Rates and Contracts
Chapter 631, F.S. – Insurer Insolvency; Guaranty of Payment
Chapter 632, F.S. – Fraternal Benefit Societies
Chapter 636, F.S. – Prepaid Limited Health Service Organizations and Discount Medical Plan
Organizations
Chapter 641, F.S. – Health Care Service Programs
Chapter 651, F.S. – Continuing Care Contracts
OIR regulatory activities include licensing, rate and form approval, market conduct review, issuing
certificates of authority, ensuring solvency, and administrative supervision.
Health Insurance
Health insurance is the insurance of human beings against bodily injury or disablement by accident or
sickness, including the expenses associated with such injury, disablement, or sickness. 4 Individuals
purchase health insurance coverage with the purpose of managing anticipated expenses related to
health or protecting themselves from unexpected medical bills or large health care costs. Managed
care systems combine the delivery and financing of health care services by limiting the choice of
doctors and hospitals. In return for this limited choice, however, medical care is less costly due to the
1 DFS, Department of Financial Services Long Range Program Plan: Fiscal Years 2020-21 through 2024-25, 15 (Sept. 30,
2019), available at http://floridafiscalportal.state.fl.us/Document.aspx?ID=19566& Doc Type=P DF (last visited
March 23, 2023).
2 S. 624.307(10)(a), F.S.
3 S. 624.01, F.S.
4 S. 624.603, F.S.
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managed care network’s ability to control health care services.5 Some common forms of managed care
are preferred provider organizations 6 and health maintenance organizations 7 (HMO).
There are three types of health-related identification cards that require specific information to be printed
on the card under Florida law. This includes prescription benefits identification cards, 8 health benefit
plans identification cards,9 and health management organization identification cards. 10 Some of the
statutorily required information on these cards include the insured’s name, identification number, and
group number.11 This information is provided to “improve patient care by minimizing confusion,
eliminating unnecessary work, decreasing patient wait time, and improving business efficiencies.”12
ERISA
The federal Employee Retirement and Income Security Act (ERISA) was passed in 1974 and prevents
states from directly regulating employee welfare benefits, including employer-sponsored health plans.13
Even though ERISA preempts state regulation over employer-sponsored health plans, states retain
regulatory power over insurance carriers and health maintenance organizations (HMOs). 14 However,
employers that choose to “self-fund” are not subject to traditional state insurance laws. ERISA has
directly contributed to the current legal environment where a sizeable portion of health insurance plans
are regulated by the federal government.15
Effect of the Bill
The bill specifies additional information that must be included on prescription identification cards, health
benefit plan identification cards, and health maintenance organization identification cards. If the
insurance plan is subject to state regulation the identification card must include the letters “FL” on the
back left of the card and a quick response (QR) code that links to the consumer complaint website of
DCS. If the insurance plan is subject to Federal regulation the identification card must include the
letters “FED” on the back left of the card and a QR code that links to the consumer complaint website of
the Centers for Medicare and Medicaid Services. Finally, the bill allows for DFS to adopt rules to
implement necessary changes to the consumer complaint website and hotline of DCS.
B. SECTION DIRECTORY:
Section 1: Amends s. 627.4302, F.S., relating to identification cards for processing prescription
drug claims.
Section 2: Amends s. 627.642, F.S., relating to outline of coverage.
Section 3: Amends s. 627.657, F.S., relating to provisions of group health insurance policies.
Section 4: Amends s. 641.31, F.S., relating to health maintenance contracts.
Section 5: Provides an effective date of January 1, 2024.
5 MedlinePlus, Managed Care, https://medlineplus.gov/managedcare.html (last visited March 23, 2023).
6 See s. 627.6471, F.S.
7 See part I of chapter 641, F.S.
8 See s. 627.4302., F.S.
9 Health benefit plan is defined in s. 627.6699(3)(k). See ss. 627.642 and 627.657, F.S.
10 See s. 641.31, F.S.
11 See s. 627.4302(2), F.S.
12 S. 627.4302(1), F.S.
13 Kaiser Family Foundation, ERISA Plans, https://www.kff.org/wp-content/uploads/sites/3/2015/06/c11. pdf (last visited
March 23, 2023).
14 Id.
15 U.S. Department of Labor, Fact Sheet: What Is ERISA, https://www.dol.gov/agencies/ebsa/about-ebsa/our-
activities/resource-center/fact-sheets/what -is-eris a (last visited March 23, 2023). As of 2013 ERISA covered 141 million
individuals. Id.
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II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.16
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Private businesses will be required to add content to health-related identification cards that are not
currently required. This will have an indeterminant negative impact as businesses will need to comply
with the bill’s requirements.
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:
None.
B. RULE-MAKING AUTHORITY:
This bill provides DFS with the authority necessary to implement the bill.
C. DRAFTING ISSUES OR OTHER COMMENTS:
It is unclear what power, if any, the state has to regulate the identification cards of federally regulated
health plans. Additionally, the Centers for Medicare and Medicaid Services is the regulator for Medicare
plans but does not regulate self-funded plans. Self-funded plans are regulated by the Department of
Labor and would be the appropriate resource for individuals with a self-funded plan to refer to.
16 While health insurance cards issued under the authority of the Division of State Group Insurance, for current and former
state employees, and the Agency for Health Care Administration, for Medicaid and other state health program
beneficiaries, will need to comply with the bill, this will be done as new and replacement cards are issued. This should
mitigate any fiscal impact on the state.
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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 1545 2023
1 A bill to be entitled
2 An act relating to health insurance identification
3 cards; amending s. 627.4302, F.S.; requiring certain
4 prescription drug benefits-identification cards to
5 include specified information in a certain manner;
6 providing applicability; authorizing the Department of
7 Financial Services to adopt certain rules; amending
8 ss. 627.642, 627.657, and 641.31, F.S.; requiring
9 certain health insurance and health maintenance
10 organization identification cards to include specified
11 information in a certain manner; providing
12 applicability; authorizing the department to adopt
13 certain rules; providing an effective date.
14
15 Be It Enacted by the Legislature of the State of Florida:
16
17 Section 1. Paragraph (h) of subsection (2) of section
18 627.4302, Florida Statutes, is redesignated as paragraph (i),
19 and a new paragraph (h) is added to that subsection, to read:
20 627.4302 Identification cards for processing prescription
21 drug claims.—
22 (2) Any health insurer or health maintenance organization
23 and all state and local government entities entering into an
24 agreement to provide coverage for prescription drugs on an
25 outpatient basis shall provide a benefits-identification card
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26 containing the following information:
27 (h) The type of plan, only if the plan is filed in this
28 state; an indication that the plan is self-funded; or the name
29 of the network.
30 1. If the plan is subject to state regulation, the
31 identification card must include the letters "FL" on the back
32 left-hand corner of the card, under which a quick response (QR)
33 code must be displayed directing the insured or the subscriber
34 to the consumer complaint website of the Division of Consumer
35 Services of the department.
36 2. If the plan is exclusively federally regulated, the
37 identification card must include the letters "FED" on the back
38 left-hand corner of the card, under which a QR code must be
39 displayed directing the insured or the subscriber to the
40 consumer complaint website of the Centers for Medicare and
41 Medicaid Services.
42 3. This paragraph applies to benefits-identification cards
43 issued or reissued on or after January 1, 2024.
44 4. The department may adopt rules to implement necessary
45 changes to the consumer complaint website and hotline of the
46 Division of Consumer Services to best assist insureds or
47 subscribers who are at an impasse with their insurers or health
48 maintenance organizations, respectively.
49
50 The information required in paragraphs (a), (b), (g), and (i)
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51 (h) must be provided on the card, unless instruction is provided
52 on the card for ready access to such information by electronic
53 means.
54 Section 2. Paragraph (c) of subsection (3) of section
55 627.642, Florida Statutes, is amended to read:
56 627.642 Outline of coverage.—
57 (3) In addition to the outline of coverage, a policy as
58 specified in s. 627.6699(3)(k) must be accompanied by an
59 identification card that contains, at a minimum:
60 (c) The type of plan, only if the plan is filed in this
61 the state;, an indication that the plan is self-funded;, or the
62 name of the network.
63 1. If the plan is subject to state regulation, the
64 identification card must include the letters "FL" on the back
65 left-hand corner of the card, under which a quick response (QR)
66 code must be displayed directing the insured to the consumer
67 complaint website of the Division of Consumer Services of the
68 department.
69 2. If the plan is exclusively federally regulated, the
70 identification card must include the letters "FED" on the back
71 left-hand corner of the card, under which a QR code must be
72 displayed directing the insured to the consumer complaint
73 website of the Centers for Medicare and Medicaid Services.
74 3. Subparagraphs 1. and 2. apply to identification cards
75 issued or reissued on or after January 1, 2024.
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76 4. The department may adopt rules to implement necessary
77 changes to the consumer complaint website and hotline of the
78 Division of Consumer Services to best assist insureds who are at
79 an impasse with their insurers.
80
81 The identification card must present the information in a
82 readily identifiable manner or, alternatively, the information
83 may be embedded on the card and available through magnetic
84 stripe or smart card. The information may also be provided
85 through other electronic technology.
86 Section 3. Paragraph (c) of subsection (2) of section
87 627.657, Florida Statutes, is amended to read:
88 627.657 Provisions of group health insurance policies. —
89 (2) The medical policy as specified in s. 627.6699(3)(k)
90 must be accompanied by an identification card that contains, at
91 a minimum:
92 (c) The type of plan, only if the plan is filed in this
93 the state;, an indication that the plan is self-funded;, or the
94 name of the network.
95 1. If the plan is subject to state regulation, the
96 identification card must include the letters "FL" on the back
97 left-hand corner of the card, under which a quick response (QR)
98 code must be displayed directing the insured to the consumer
99 complaint website of the Division of Consumer Services of the
100 department.
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101 2. If the plan is exclusively federally regulated, the
102 identification card must include the letters "FED" on the back
103 left-hand corner of the card, under which a QR code must be
104 displayed directing the insured to the consumer complaint
105 website of the Centers for Medicare and Medicaid Services.
106 3. Subparagraphs 1. and 2. apply to identification cards
107 issued or reissued on or after January 1, 2024.
108 4. The department may adopt rules to implement necessary
109 changes to the consumer complaint website and hotline of the
110 Division of Consumer Services to best assist insureds who are at
111 an impasse with their insurers.
112
113 The identification card must present the information in a
114 readily identifiable manner or, alternatively, the information
115 may be embedded on the card and available through magnetic
116 stripe or smart card. The information may also be provided
117 through other electronic technology.
118 Section 4. Paragraph (c) of subsection (42) of section
119 641.31, Florida Statutes, is amended to read:
120 641.31 Health maintenance contracts.—
121 (42) The contract, certificate, or member handbook must be
122 accompanied by an identification card that contains, at a
123 minimum:
124 (c) A statement that the health plan is a health
125 maintenance organization. Only a health plan with a c ertificate
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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 1545 2023
126 of authority issued under this chapter may be identified as a
127 health maintenance organization.
128 1. If the health plan is subject to state regulation, the
129 identification card must include the letters "FL" on the back
130 left-hand corner of the card, under which a quick response (QR)
131 code must be displayed directing the subscriber to the consumer
132 complaint website of the Division of Consumer Services of the
133 department.
134 2. If the health plan is exclusively federally regulated,
135 the identification card must include the letters "FED" on the
136 back left-hand corner of the card, under which a QR code must be
137 displayed directing the subscriber to the consumer complaint
138 website of the Centers for Medicare and Medicaid Services.
139 3. Subparagraphs 1. and 2. apply to identification cards
140 issued or reissued on or after January 1, 2024.
141 4. The department may adopt rules to implement necessary
142 changes to the consumer complaint website and hotline of the
143 Division of Consumer Services to best assist subscribers who are
144 at an impasse with their health maintenance organizations.
145
146 The identification card must present the information in a
147 readily identifiable manner or, alternatively, the information
148 may be embedded on the card and available through magnetic
149 stripe or smart card. The information may also be provided
150 through other electronic technology.
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151 Section 5. This act shall take effect January 1, 2024.
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hb1545-00
HB 1573
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 1573 Continuing Care Providers
SPONSOR(S): Persons-Mulicka
TIED BILLS: IDEN./SIM. BILLS: SB 622
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee Fortenberry Lloyd
2) Health & Human Services Committee
3) Commerce Committee
SUMMARY ANALYSIS
Continuing care retirement communities (CCRCs) offer a transitional approach to the aging process,
accommodating residents’ evolving levels of care needs. A CCRC can include independent living apartments
or houses, as well as an assisted living facility or a nursing home. CCRCs may also offer at-home programs
that provide residents with services while continuing to live in their own homes until they are ready to move to
the CCRC. The fees associated with a CCRC include a reservation deposit, an initial entrance fee (that is often
a major sum) and monthly fees to cover costs related to health care and other aspects of community living.
Regulatory oversight of CCRCs in Florida is shared primarily between the Agency for Health Care
Administration (AHCA) and the Office of Insurance Regulation (OIR). OIR regulates CCRC providers as
specialty insurers, while AHCA regulates the provision of health care.
The bill makes changes to the law governing CCRCs, including amending law enacted in 2019 following
insolvencies at two Tampa area CCRCs. The bill:
Creates more flexibility in meeting reporting requirements for CCRCs seeking to expand a facility and in
financial statements that must be submitted to the OIR with the CCRCs’ annual statements.
Allows a CCRC provider to keep their escrow account in a national bank with a branch in Florida, rather
than only institutions with a Florida branch.
Changes when escrow funds can be accessed – escrow release is available when 3/4ths of the total units
are reserved, rather than only when half of the total units have been paid in full, plus, the provider submits a
required attestation concerning use of the entrance fees collected.
Reduces the timeline for OIR review and approval of expansion applications from 45 days to 30 days.
Establishes additional grounds that a provider may rely on to request that temporary suspension of some or
all of the applicable financial and operating requirements.
Revises the parameters allowing a provider to withdraw funds from its debt service reserves.
Significantly expands the list of financial institutions that may supply a provider with a letter of credit in order
to satisfy the statutory minimum liquid reserve requirements, including institutions without a Florida branch.
Changes the conditions under which an individual must pay a penalty for cancelling a contract with a CCRC.
Shortens the lookback period for required OIR market conduct examinations.
Increases transparency for the benefit of authorized resident councils in CCRC operations, budgeting,
planning, pricing, and OIR examining.
Clarifies that a residents’ council has the authority to establish and maintain its own governance documents
and that residents have the right to participate in resident council matters, including elections.
Requires facilities with common ownership in Florida must each have its own designated resident representative.
Specifies resident representative obligations of good faith and as a fiduciary to the residents.
The bill has no effect on state or local revenues or expenditures. It has an indeterminate direct economic
impact on the private sector.
The bill has an effective date of July 1, 2023.
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
Continuing Care Retirement Communities
Continuing care retirement communities (CCRCs) offer a transitional approach to the aging process,
accommodating residents’ evolving levels of care needs. A CCRC can include independent living
apartments or houses, as well as an assisted living facility or a nursing home. CCRCs may also offer
at-home programs that provide residents with services while continuing to live in their own homes until
they are ready to move to the CCRC.1 The fees associated with a CCRC include an initial entrance fee
and monthly fees to cover costs related to health care and other aspects of community living. 2
Regulatory oversight of CCRCs in Florida is shared primarily between the Agency for Health Care
Administration (AHCA) and the Office of Insurance Regulation (OIR). OIR regulates CCRC providers 3
as specialty insurers. AHCA regulates aspects of the CCRCs related to the provision of health care,
such as nursing facilities, assisted living facilities, home health agencies, quality of care, and medical
facilities.4
History of Regulatory Oversight
Certificate of Authority Granted by OIR
Because residents may pay, in some cases, considerable amounts in entrance fees and ongoing
monthly fees, OIR is given primary responsibility to regulate and monitor the operation of CCRCs and
to determine facilities’ financial condition and the management of capabilities of their managers and
owners.5 If a provider is accredited through a process “substantially equivalent” to the requirements of
ch. 651, F.S., OIR may waive any requirements of the chapter.6
To operate a CCRC in Florida, a provider must obtain from OIR a certificate of authority (COA)
predicated upon first receiving a provisional COA.7 The application process involves submitting various
financial statements and information, expectations of the financial condition of the project, and copies of
contracts.8 Further, the applicant must provide evidence that the applicant is reputable and of
responsible character.9 A COA will be issued once a provider meets the requirements set forth in s.
651.023, F.S.10
Continuing Care Contracts
Continuing care services are governed by a contract between the facility and the resident of a CCRC.
In Florida, continuing care contracts are considered an insurance product and are reviewed and
approved by OIR.11 A CCRC enters into contracts with prospective residents to provide housing and
1 S. 651.057, F.S.
2 AARP, How Continuing Care Retirement Communities Work , available at https://www.aarp.org/caregiving/basics/info-
2017/continuing-care-retirement -communities.html (last visited Mar. 24, 2023).
3 A “provider” is “the owner or operator… which… provides continuing care or continuing care at -home for a fixed or
variable fee… for the period of care.” S. 651.011(23), F.S.
4 Agency for Health Care Administration, Consumer Guides: Nursing Home Care in Florida, available at
https://quality.healthfinder.fl.gov/reports-guides/nursinghomes fl.aspx (last visited Mar. 24, 2023).
5 Ss. 651.021, 651.022, 651.023, F.S.
6 S. 651.028, F.S.
7 S. 651.022, F.S.
8 Ss. 651.021-651.023, F.S.
9 S. 651.022(2)(c), F.S.
10 S. 651.023(4)(a), F.S.
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medical care in exchange for an entrance fee and monthly fees. Entrance fees are a significant
commitment by the resident, as entrance fees range from approximately $100,000 to over $1 million. 12
CCRCs offer different types of contracts that provide for varying amounts of monthly fees and levels of
healthcare discounts.13
All CCRC contracts provide for a refund of a declining portion of the entrance fee if the contract is
cancelled for reasons other than the death of the resident during the first four years of occupancy by
the resident.14 However, many contracts exceed this requirement and contain minimum refund
provisions that promise a refund of a specified portion (typically 50 to 90 percent) of the entrance fee
upon the death of the resident or termination of the contract regardless of the length of occupancy by
the resident.15
Financial Requirements/Solvency
CCRCs are required to file an annual report with OIR, which includes an audited financial report, and
other detailed financial information, such as a listing of assets maintained in the liquid reserve required
under s. 651.035, F.S., and information about fees required of residents. 16 OIR requires unaudited
quarterly reports from CCRCs, but OIR will waive such quarterly reports for accredited CCRCs.17 OIR
may also require more frequent filing of financial reports and additional information if OIR deems such
reports necessary to monitor and evaluate the financial condition of a CCRC that is subject to a
corrective action plan; declining financial position; refinancing; acquisition; or administrative
supervision, delinquency, receivership, or bankruptcy proceedings. 18
Section 651.033, F.S., prescribes requirements for the establishment and maintenance of escrow
accounts, duties of escrow agents, and procedures for withdrawals from a CCRC’s reserve funds. As
prescribed in s. 651.035, F.S., CCRCs are required to maintain a minimum liquid reserve consisting of,
as applicable, a debt service reserve, operating reserve, and renewal and replacement reserve.
Rights of Residents in a Continuing Care Retirement Community
OIR is also authorized to discipline a facility for violations of residents’ rights. 19 These rights include:
Aright to live in a safe and decent living environment, free from abuse and neglect;
Freedom to participate in and benefit from community services and activities and to achieve
the highest possible level of independence, autonomy, and interaction within the community;
and
Present grievances and recommend changes in policies, procedures, and services to the
staff of the facility, governing officials, or any other person without restraint, interference,
coercion, discrimination, or reprisal.20
Each CCRC must establish a resident’s council to provide a forum for residents’ input on issues that
affect the general residential quality of life, such as the facility’s financial trends, and problems, as well
as proposed changes in policies, programs, and services. 21 CCRCs are required to maintain and make
11 S. 651.055(1), F.S.
12 Kennedy, Jayme, The cost of continuing care retirement communities: Can you afford it?, Care.com, published Jan. 31,
2021, available at https://www.care.com/c/continuing-care-retirement-community-cost/ (last visited Mar. 25, 2023).
13 Id.
14 S. 651.055, F.S.
15 Jones, Roger J., Continuing Care Retirement Communities (CCRCs) Fees – A Primer on the Tax Treatment of
Entrance and Monthly Fees, The National Law Review, published Dec. 6, 2012, available at
https://www.natlawreview.com/article/continuing -care-retirement-communities-ccrcs-fees-primer-tax-treatment -ent rance-
and- (last visited Mar. 25, 2023).
16 S. 651.026, F.S.
17 S. 651.0261. F.S., Rr. 69O-193.005(1) and 69O-193.055, F.A.C.
18 R69O-193.005(2). F.A.C.
19 S. 651.083, F.S.
20 Id.
21 S. 651.081, F.S.
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available certain public information and records, such as records of all cost and inspection reports
pertaining to that facility, a concise summary of the last examination report issued by OIR, and a
summary of the most recent annual statement.22
OIR Enforcement Authority
If a provider fails to meet the requirements of ch. 651, F.S., relating to a provisional COA or a COA,
OIR must notify the provider of any deficiencies and require the provider to take corrective action within
a time period determined by OIR.23 If the provider does not correct the deficiencies by the expiration of
such time, OIR may initiate delinquency proceedings as provided in s. 651.114, F.S., or seek other
relief provided under ch. 651, F.S.24 OIR may deny, suspend, or revoke the provisional COA or the
COA of any applicant or provider for grounds specified in s. 651.106, F.S.
Except in limited circumstances, OIR’s right to initiate delinquency proceedings against a provider is
subordinate to the rights of a trustee or lender if the trustee or lender agrees that the rights of residents
under a CCRC contract will be honored and will not be disturbed by a foreclosure. 25 If OIR recommends
that the Department of Financial Services (DFS) Division Rehabilitation and Liquidation institute
receivership or liquidation proceedings against a CCRC, the continuing care contracts are deemed
preferred claims against assets of the provider.26 Such claims are subordinate, however, to any
secured claim.
Until 2019, even though OIR had enforcement authority over CCRCs, ch. 651, F.S., lacked the
framework that OIR uses to protect consumers of other insurance products, including early intervention
concepts like impairment, a statutory requirement to provide supplementary information to support or
explain filings, and clear authority to prohibit certain individuals from exercising control over a CCRC.
The need for better regulatory oversight became apparent with the case of a CCRC in Tampa in which
unapproved owners and managers failed to cooperate with examination by OIR and with other
provisions of state law. Previously, a bankruptcy court in 1997 cancelled residents’ contracts for a
different CCRC in Tampa. Additionally, a CCRC in St. Augustine filed for bankruptcy in 2013 and 2016,
which resulted in former residents or their estates receiving only 20 percent of their entrance fee
refunds.
Involvement by the Department of Financial Services
DFS may become involved with a resident after a CCRC contractual agreement has been signed by
both parties or during a mediation or arbitration process. 27 Typically, residents will contact DFS Division
of Consumer Services, which receives and resolves complaints involving products and persons
regulated by OIR or DFS.28
Chapter 631, F.S., governs the rehabilitation and liquidation process for insurers in Florida. Federal law
provides that insurance companies are not eligible to be a debtor in federal bankruptcy proceedings
and are instead subject to state laws regarding receivership. 29 In Florida, the Division of Rehabilitation
and Liquidation within DFS is responsible for managing insurance companies placed into receivership.
The goal of rehabilitation is to return the insurer to solvency. The goal of liquidation, however, is to
liquidate the business of the insurer and use the proceeds to pay claims, including those of
policyholders, creditors, and employees.
22 S. 651.091, F.S.
23 S. 651.105(4), F.S.
24 Id.
25 S. 651.114(8), F.S.
26 S. 651.071, F.S.
27 Rr. 69O-193.062 and 69O-193.063, F.A.C.
28 S. 624.307, F.S.
29 Historically and currently, Florida CCRCs have entered bankruptcy despite being regulated as a specialty insurer in
Florida and despite the federal Bankruptcy Code precluding insurance companies from being a debtor in bankruptcy.
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2019 Statutory Changes Regarding CCRCs
In 2019, the state enacted broad statutory changes to enhance OIR’s authority to regulate CCRCs. 30
Section 651.034, F.S., was created to establish a framework of required actions if a provider falls below
specified levels of three key indicators at the time of the annual report: occupancy, days cash on hand,
and the debt service coverage ratio. The key indicators were selected based on their tendency to
highlight problematic financial developments. If the provider’s performance falls below the specified
levels on two of the following three key indicators at the time of the annual report, it is considered a
“regulatory action level event.”
In the event that a “regulatory action level event” occurs, the provider is required to submit a corrective
action plan; OIR is required to perform an examination or analysis of the provider; and OIR is required
to issue a corrective order specifying any corrective actions that OIR determines are required. For new
CCRCs, OIR may exempt a provider from the consequences of a regulatory action level event or
impairment until the earlier of the CCRC reaching stabilized occupancy, the time projected to achieve
stabilized occupancy, or five years from the date of issuance of the COA.
A definition for “impaired” was to allow for earlier intervention by OIR in an effort to prevent harm to
Florida consumers. The impairment framework has been an effective tool in preventing, or minimizing
the impact of, insurer insolvencies. The previous intervention framework for CCRCs was triggered only
after a provider became insolvent, meaning it is unable to pay its obligations as they come due in the
normal course of business. The establishment of the impairment framework allows OIR to begin
partnering with a provider much sooner in order to mitigate or resolve any potential issues that would
put resident interests in jeopardy. A provider is considered impaired if it fails to hold the minimum liquid
reserve. Additionally, a provider without mortgage or bond financing is considered impaired if it does
not maintain the specified level of days cash on hand, and a provider with mortgage or bond financing
is considered impaired if it does not maintain specified levels of days cash on hand and debt service
coverage ratio. If the provider is a member of an obligated group having cross-collateralized debt, the
obligated group's debt service coverage ratio and days cash on hand must be used to determine if the
provider is impaired. OIR may forego taking action for up to 180 days after an impairment occurs if OIR
finds there is a reasonable expectation that the impairment may be eliminated within the 180-day
period.
The 2019 law created a number of new requirements for the provider to give notice to the residents or
residents’ council. These help residents and prospective residents to remain apprised of the status and
stability of the provider and to take action to protect their interests.
Previously, OIR received advance notice of new financing and receives financing documents after the
transaction closes, and the residents’ council receives notice of all financing documents filed with the
OIR. Although the OIR received advance notice of a financing transaction, the OIR had no authority to
disapprove or otherwise intervene in the financing transaction if it considered it a hazardous
transaction. 2019 amendments to ss. 651.019 and 651.091(2), F.S., shifted the notice requirements so
that financing documents are first received by the residents’ council. A provider is required to provide to
the residents’ council, at least 30 days before the closing date of the transaction, a general outline of
the amount and terms of the transaction and the intended use of proceeds for any new financing or
refinancing. This allows residents the ability to object to financing transactions that concern them.
Additionally, it removed the illusion that the OIR could prevent a provider from securing new financing,
additional financing, or refinancing that may be hazardous to the residents.
Section 651.091(2), Florida Statutes, was amended to require the provider to furnish the following
information to the chair of the residents’ council:
A notice of the issuance of any examination reports;
A notice of the initiation of any legal or administrative proceedings by the OIR or the DFS;
A notice of any change in ownership filing submitted to the OIR; and
30 Ch. 2019-160, L.O.F. (2019).
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Any master plans approved by the provider’s governing board and any plans for expansion or
phased development.
Additionally, a provider must post in a prominent place in the facility a notice that contains the OIR’s
website and phone number and the website and toll-free consumer helpline for the DFS Division of
Consumer Services. The notice must also state that either the OIR or DFS Division of Consumer
Services may be contacted for the submission of inquiries and complaints with respect to potential
violations of law.
Section 651.035, F.S., which contains minimum liquid reserve requirements, was amended to require
providers that do not have a mortgage loan or other financing on the facility, to deposit monthly in
escrow one-twelfth of their annual property tax liability and to pay property taxes out of such escrow.
2019 bill provided a framework for CCRCs to request a withdrawal of reserve funds and grants the OIR
authority to require the transfer of reserve funds into the custody of the DFS Bureau of Collateral
Management if the OIR finds that the provider is impaired or insolvent in order to ensure the safety of
those assets. Any increase in the minimum liquid reserve must be funded no later than 61 days after
the minimum liquid reserve calculation is due to be filed. If the minimum liquid reserve is less than the
required minimum amount at the end of any fiscal quarter due to a change in the market value of the
invested funds, the provider must fund the shortfall within 10 business days.
Section 651.033, F.S., contains requirements for a provider’s escrow account and was amended to
clarify the duties that apply to escrow agents, including the prohibition that an escrow agent may not
release or otherwise allow the transfer of funds without the written approval of the OIR, unless the
withdrawal is from funds in excess of specified statutory requirements. Additionally, the statutory
change now permits an escrow account to be held in a national bank that has a branch in this state.
Effect of the Bill
The bill makes changes and updates to the extensive regulatory revisions for CCRCs that were
enacted in 2019.
The bill establishes that, for a provider who is applying for expansion of a facility, the independent
evaluation and examination opinion portion of the required feasibility study may be satisfied by a:
Compilation report acceptable to OIR; or
Comparable opinion prepared by the provider’s CPA and acceptable to OIR.
The bill eliminates the requirement that a provider’s escrow account be established in a bank that has a
branch in Florida. In addition to the current ability to secure the release of escrow moneys when
payment in full has been received for at least 50 percent of the total units of a phase or phases
constructed, the bill allows for the release of such funds when:
75 percent of the units in a phase have been reserved; and
The provider submits an attestation to OIR to use the entrance fees collected and held in
escrow for the sole purpose of paying debts as specified in the feasibility study. 31
If the expansion is to be completed in multiple phases, the 75 percent reservation escrow-release
option applies separately to each phase. The bill reduces the number of days that OIR has to review
and approve an expansion application for a CCRC from 45 days to 30 days. 32
The bill creates parameters for the financial statements that a provider must submit to OIR with its
annual statement. If the provider’s financial statements are consolidated with the financial statements of
31 The language in this section of the bill could use additional clarity. See drafting comment below regarding lines 147-156
of the bill.
32 No fiscal impact on OIR is expected from the reduction in review time for OIR. See Office of Insurance Regulation
(OIR), Agency Analysis of 2023 SB 622, p. 6 (Feb. 15, 2023) (SB 622 is the Senate companion bill to HB 1573).
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additional entities owned or controlled by the provider, in accordance with generally accepted
accounting principles,33 the financial report must include:
The provider’s consolidated or combined financial statements; and
Supplemental information showing the individual financial statements for each CCRC facility.
In addition to existing ones, the bill establishes further grounds for which a provider may request that
OIR temporarily suspend some or all of the financial and operating requirements of ch. 651, F.S. A
provider may ask for such a suspension due to an extraordinary event rendering it incapable of
continuing normal operations, including but not limited to:
Pandemic;
Fire; or
Federal order of Governor’s executive order or proclamation declaring a natural disaster; that
forces the provider to:
o Evacuate;
o Curtail operations;
o Restrict admissions; or
o Suspend marketing; for life safety reasons; or repairs related to the event.
OIR may only grant a provider’s request if the provider remains compliant with annual reporting
requirements, quarterly and monthly statement requirements, and minimum liquid reserve
requirements, and the provider is not insolvent or impaired. Even if the request is granted, the provider
must continue to comply with required reporting requested by OIR, including the estimated time to
complete repairs or remediate problems related to admissions or marketing restrictions. In considering
a provider’s request, OIR must consider any formal action or amendments that a lender or trustee
approved to the provider’s lending agreement or bond covenants because of the event.
The bill adds the following requirements that must be met for a provider to withdraw funds from its debt
service reserves:
The trust indenture, loan agreement, or escrow agreement must provide that the provider,
trustee, lender, escrow agent, or a person designated to act in its place, must notify OIR in
writing at least ten days before the withdrawal of any portion of the debt service reserves
required to be held in escrow; and
Such notice must be accompanied by a sworn affidavit by the provider, trustee, or a person
designated to act in its place that includes:
o The amount of the scheduled debt service payment;
o The payment due date;
o The amount of the withdrawal;
o The accounts from which the withdrawal will be made; and
o A plan with a schedule for replenishing the withdrawn funds. Any revised plan must be
submitted to OIR within ten days of approval by the lender or trustee.
Under the bill, a provider is permitted to withdraw escrow funds without OIR approval if the withdrawal
is from a debt service reserve required to be held in escrow pursuant to trust indenture or mortgage lien
on the facility and the withdrawn funds will be used to pay delinquent principal and interest payments
the debtor is obligated to pay on the facility.
The bill broadens the financial institutions from which a provider may obtain a letter of credit in order to
satisfy the statutory MLR requirements to include the following institutions, in addition to an institution
participating in the State of Florida Treasury Certificate of Deposit Program:
A Florida bank;
A Florida savings and loan association;
A Florida trust company; or
A national bank that is chartered and supervised by the Office of the Comptroller of the
Currency within the U.S. Department of the Treasury.
33 Insurers generally utilize statutory accounting principles. However, CCRCs use generally accepted accounting
principles, which often require consolidated audits.
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In general, a resident has the right to rescind a continuing care contract, and receive a full refund of any
funds paid, without penalty or forfeiture, within seven days of executing the contract. 34 However, the bill
changes the conditions under which an individual must pay a penalty for cancelling a contract with a
CCRC. If an individual signs a reservation contract, fails to cancel it within 30 days after executing the
contract, and then signs a care contract and rescinds it within seven days of execution, the authorized
forfeiture penalty may be deducted from the refund, unless there is evidence of extenuating
circumstances, including but not limited to:
Death, illness, or diagnosis or a chronic or terminal illness of the individual or the individual’s
spouse; or
A change in financial or asset position which warrants cancellation of the contract.
The bill clarifies the examination timeframes for a CCRC. Such and exam must cover the preceding
three or five fiscal years of the provider, whichever is applicable,35 and must begin within 12 months
after the end of the most recent fiscal year covered by the exam. It may include examination of events
following the end of the most recent fiscal year and events of any prior period that affect the provider’s
present financial condition. As part of the examination, OIR must interview the current president or chair
of the residents’ council or another designated officer if the president or chair is not available.
It also requires that, following an examination, every CCRC must provide a copy of the final
examination report and corrective action plan, if required by OIR, to the executive officer of the
provider’s governing body and the president or chair of the residents’ council within 60 days after the
report is issued, rather than only the executive officer of the governing body. Additionally, all CCRCs
must provide written notice of any change in management to the president or chair of the residents’
council within 10 business days.
It provides new definitions related to the residents of a CCRC. It defines designated resident
representative as a resident elected by the residents’ council to represent residents on matters related
to changes in fees or services within a CCRC. The bill defines the residents’ council as an organized
body that represents the resident population of a CCRC. The residents’ council serves as a liaison
between residents and the provider.
It clarifies that a residents’ council has the authority to establish and maintain its own governance
documents such as bylaws, operating agreements, policies, and operating procedures, which may
include establishing committees. Additionally, residents have the right to participate in resident council
matters, including elections.
The bill also clarifies that the resident representative designated to represent the residents before the
governing body of the provider:
Must be a resident as defined in s. 651.011, F.S.;
Must be elected to the position; and
Need not be a current member of the residents’ council.
If a provider owns or operates more than one facility in Florida, each facility must have its own
designated resident representative. Designated resident representatives must perform their duties in
good faith. Additionally, the bill requires that a resident who serves as a member of the board or
governing body of the facility must perform his or her duties in a fiduciary manner, including the
following duties:
Confidentiality;
Care;
Loyalty; and
Obedience.
34 S. 651.055(2), F.S.
35 Accredited CCRCs may be examined by OIR on a five-year schedule, but non-accredited CCRCs are examined by OIR
on a three-year schedule.
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A representative of the provider must notify the designated resident representative at least 14 days in
advance of any meeting of the full governing body at which the annual budget and any proposed
changes or increases in resident fees are on the agenda or will be discussed.
B. SECTION DIRECTORY:
Section 1. Amends s. 651.011, F.S., relating to definitions.
Section 2. Amends s. 651.012, F.S., relating to exempted facility; written disclosure of exemption.
Section 3. Amends s. 651.0246, F.S., relating to expansions.
Section 4. Amends s. 651.026, F.S., relating to annual reports.
Section 5. Amends s. 651.0261, F.S., relating to quarterly and monthly statements.
Section 6. Amends s. 651.033, F.S., relating to escrow accounts.
Section 7. Amends s. 651.034, F.S., relating to financial and operating requirements for providers.
Section 8. Amends s. 651.035, F.S., relating to minimum liquid reserve requirements.
Section 9. Amends s. 651.055, F.S., relating to continuing care contracts; right to rescind.
Section 10. Amends s. 651.081, F.S., relating to residents’ council.
Section 11. Amends s. 651.083, F.S., relating to residents’ rights.
Section 12. Amends s. 651.085, F.S., relating to quarterly meetings between residents and the
governing body of the provider; resident representation before the governing body of the
provider.
Section 13. Amends s. 651.091, F.S., relating to availability, distribution, and posting of reports and
Records; requirement of full disclosure.
Section 14. Amends s. 651.105, F.S., relating to examination.
Section 15. Provides an effective date of July 1, 2023.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
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2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill has an indeterminate direct economic impact on the private sector.
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:
None.
B. RULE-MAKING AUTHORITY:
While the bill neither authorizes nor requires administrative rulemaking, OIR has indicated that it will
need to update its expansion application and annual report forms, which will require rulemaking. 36
Current rules may conflict with the requirements contained in the bill, which may require rules to be
amended. Additionally, OIR has stated that it will need to update its review procedures and checklists
for expansion applications, release of escrowed entrance fees, and examinations to account for the
changes in the bill.
C. DRAFTING ISSUES OR OTHER COMMENTS:
Lines 147-156: The new language in these lines is ambiguous. 37 The drafting seems to indicate that
the 75 percent requirement applies to a phase or the whole project, but also that it applies separately to
each phase. It is also unclear what “reserved” means in this context. Consideration should be given to
clarifying what the 75 percent requirement applies to and to the definition of “reserved.”
Lines 281-300: The language in these lines regarding suspending financial and operating requirements
lacks clarity.38 “Suspension” as used in the Florida Insurance Code usually refers to the suspension of a
certificate of authority. “Financial and operating requirements” appears in the title of s. 651.034, F.S.,
but is not a defined term. Revising the bill would explain more clearly how OIR would determine
whether to exempt a provider from certain requirements under extraordinary circumstances.
Lines 414-423: These lines of the bill are confusing regarding whether they refer to a continuing care
contract or a reservation contract. More specificity regarding the type of contract mentioned on lines
415-417 would clear up the confusion.
Lines 562-573: The revisions on these lines of the bill may limit OIR’s ability to investigate possible
violations of ch. 651, F.S., by CCRCs that occurred prior to a date certain.39 The language of the bill
36 OIR, supra, note 1, at p. 4. OIR has additional concerns in its agency analysis that have not been referenced here.
37 Id. at p. 6.
38 Id. at p. 7.
39 Id.
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should make it clear that OIR retains the ability to conduct target market examinations based upon
specific findings or allegations.40
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
40 Id.
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HB 1573 2023
1 A bill to be entitled
2 An act relating to continuing care providers; amending
3 s. 651.011, F.S.; providing definitions; amending s.
4 651.012, F.S.; conforming a cross-reference; amending
5 s. 651.0246, F.S.; revising requirements for the
6 feasibility study submitted by continuing care
7 providers for expansion of certificated facilities;
8 revising circumstances under which continuing care
9 providers are entitled to secure release of moneys
10 held in escrow; revising the timeframe for the review
11 and approval of certificated facility expansion
12 applications; amending s. 651.026, F.S.; revising
13 requirements under certain circumstances for financial
14 reports filed with the Office of Insurance Regulation;
15 amending s. 651.0261, F.S.; conforming a cross-
16 reference; amending s. 651.033, F.S.; revising
17 requirements for escrow accounts of certificated
18 facilities; revising the circumstance under which a
19 provider may hold an entrance fee check for a
20 specified timeframe; amending s. 651.034, F.S.;
21 revising the timeframe during which the office may
22 exempt a provider from certain regulatory actions;
23 authorizing the office to temporarily suspend certain
24 requirements for providers under certain
25 circumstances; amending s. 651.035, F.S.; providing
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26 requirements for certain agreements relating to debt
27 service reserve funds maintained in escrow by
28 providers; revising minimum liquid reserve
29 requirements; revising proof that such requirements
30 are met; revising circumstances under which provider
31 may withdraw funds held in escrow without the office's
32 approval; amending s. 651.055, F.S.; providing
33 circumstances under which forfeiture penalties are
34 authorized upon cancellations of continuing care
35 contracts; providing exceptions; conforming a
36 provision to changes made by the act; amending s.
37 651.081, F.S.; revising residents' council authority;
38 providing residents' rights; amending s. 651.083,
39 F.S.; revising residents' rights; amending s. 651.085,
40 F.S.; providing requirements and duties for designated
41 resident representatives rather than designated
42 representatives; providing qualifications; providing
43 duties for residents serving on a facility's board or
44 governing body; amending s. 651.091, F.S.; providing
45 additional duties for continuing care facilities and
46 providers relating to distribution and disclosure of
47 certain documents and information; amending s.
48 651.105, F.S.; providing requirements for examinations
49 of certain continuing care businesses and providers;
50 deleting a provision requiring delivery of certain
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51 reports; providing an effective date.
52
53 Be It Enacted by the Legislature of the State of Florida:
54
55 Section 1. Subsections (13) through (26) and subsection
56 (27) of section 651.011, Florida Statutes, are renumbered as
57 subsections (14) though (27) and subsection (29), respectively,
58 and a new subsection (13) and subsection (28) are added to that
59 section, to read:
60 651.011 Definitions.—As used in this chapter, the term:
61 (13) "Designated resident representative" means a resident
62 who has been elected by the residents' council to represent
63 residents on matters related to changes in fees or services as
64 specified in s. 651.085(2) and (3).
65 (28) "Residents' council" means an organized body that
66 represents the resident population of a certificated facility. A
67 residents' council shall serve as a liaison between residents
68 and the appropriate representative of the provider.
69 Section 2. Section 651.012, Florida Statutes, is amended
70 to read:
71 651.012 Exempted facility; written disclosure of
72 exemption.—Any facility exempted under s. 632.637(1)(e) or
73 excluded from the definition of the term "provider" in s.
74 651.011 ss. 632.637(1)(e) and 651.011(23) must provide written
75 disclosure of such exemption to each person admitted to the
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76 facility. This disclosure must be written using language likely
77 to be understood by the person and must briefly explain the
78 exemption.
79 Section 3. Paragraph (a) of subsection (2), paragraph (b)
80 of subsection (4), and subsection (6) of section 651.0246,
81 Florida Statutes, are amended to read:
82 651.0246 Expansions.—
83 (2) A provider applying for expansion of a certificated
84 facility must submit all of the following:
85 (a) A feasibility study prepared by an independent
86 certified public accountant. The feasibility study must include
87 at least the following information:
88 1. A description of the facility and proposed expansion,
89 including the location, the size, the anticipated completion
90 date, and the proposed construction program.
91 2. An identification and evaluation of the primary and, if
92 applicable, secondary market areas of the facility and the
93 projected unit sales per month.
94 3. Projected revenues, including anticipated entrance
95 fees; monthly service fees; nursing care revenues, if
96 applicable; and all other sources of revenue.
97 4. Projected expenses, including for staffing requirements
98 and salaries; the cost of property, plant, and equipment,
99 including depreciation expense; interest expense; marketing
100 expense; and other operating expenses.
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101 5. A projected balance sheet of the applicant.
102 6. The expectations for the financial condition of the
103 project, including the projected cash flow and an estimate of
104 the funds anticipated to be necessary to cover startup losses.
105 7. The inflation factor, if any, assumed in the study for
106 the proposed expansion and how and where it is applied.
107 8. Project costs; the total amount of debt financing
108 required; marketing projections; resident rates, fees, and
109 charges; the competition; resident contract provisions; and
110 other factors that affect the feasibility of the facility.
111 9. Appropriate population projections, including morbidity
112 and mortality assumptions.
113 10. The name of the person who prepared the feasibility
114 study and his or her experience in preparing similar studies or
115 otherwise consulting in the field of continuing care.
116 11. Financial forecasts or projections prepared in
117 accordance with standards adopted by the American Institute of
118 Certified Public Accountants or in accordance with standards for
119 feasibility studies for continuing care retirement communities
120 adopted by the Actuarial Standards Board.
121 12. An independent evaluation and examination opinion or
122 compilation report acceptable to the office for the first 5
123 years of operations, or a comparable opinion acceptable to the
124 office, by the certified public accountant consultant who
125 prepared the study, of the underlying assumptions used as a
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126 basis for the forecasts or projections in the study and that the
127 assumptions are reasonable and proper and the project as
128 proposed is feasible.
129 13. Any other information that the provider deems relevant
130 and appropriate to provide to enable the office to make a more
131 informed determination.
132
133 If any material change occurs in the facts set forth in an
134 application filed with the office pursuant to this section, an
135 amendment setting forth such change must be filed with the
136 office within 10 business days after the applicant becomes aware
137 of such change, and a copy of the amendment must be sent by
138 registered mail to the principal office of the facility and to
139 the principal office of the controlling company.
140 (4) The provider is entitled to secure release of the
141 moneys held in escrow within 7 days after receipt by the office
142 of an affidavit from the provider, along with appropriate copies
143 to verify, and notification to the escrow agent by certified
144 mail that the following conditions have been satisfied:
145 (b) Payment in full has been received for at least 50
146 percent of the total units of a phase or of the total of the
147 combined phases constructed; or for at least 75 percent of the
148 proposed units for which an entrance fee is charged for a phase,
149 or for which a total of the combined phases are reserved, and
150 the provider submits an attestation to the office to use the
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151 entrance fees collected and held in escrow for the sole purpose
152 of paying secured indebtedness as specified in the feasibility
153 study submitted to the office pursuant to paragraph (2)(a). If
154 the expansion is to be completed in multiple phases, the 75
155 percent reservation requirement applies separately to each phase
156 of the expansion. If a provider offering continuing care at-home
157 is applying for a release of escrowed entrance fees, the same
158 minimum requirement must be met for the continuing care and
159 continuing care at-home contracts independently of each other.
160
161 Notwithstanding chapter 120, only the provider, the escrow
162 agent, and the office have a substantial interest in any office
163 decision regarding release of escrow funds in any proceedings
164 under chapter 120 or this chapter.
165 (6) Within 30 45 days after the date on which an
166 application is deemed complete as provided in paragraph (5)(b),
167 the office shall complete its review and, based upon its review,
168 approve an expansion by the applicant and issue a determination
169 that the application meets all requirements of law, that the
170 feasibility study was based on sufficient data and reasonable
171 assumptions, and that the applicant will be able to provide
172 continuing care or continuing care at-home as proposed and meet
173 all financial and contractual obligations related to its
174 operations, including the financial requirements of this
175 chapter. If the application is denied, the office must notify
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176 the applicant in writing, citing the specific failures to meet
177 the requirements of this chapter. The denial entitles the
178 applicant to a hearing pursuant to chapter 120.
179 Section 4. Paragraph (b) of subsection (2) of section
180 651.026, Florida Statutes, is amended to read:
181 651.026 Annual reports.—
182 (2) The annual report shall be in such form as the
183 commission prescribes and shall contain at least the following:
184 (b) A financial report audited by an independent certified
185 public accountant which must contain, for two or more periods if
186 the facility has been in existence that long, all of the
187 following:
188 1. An accountant's opinion and, in accordance with
189 generally accepted accounting principles:
190 a. A balance sheet;
191 b. A statement of income and expenses;
192 c. A statement of equity or fund balances; and
193 d. A statement of changes in cash flows.
194 2. Notes to the financial report considered customary or
195 necessary for full disclosure or adequate understanding of the
196 financial report, financial condition, and operation.
197 3. If the provider's financial statements are consolidated
198 or combined in accordance with generally accepted accounting
199 principles with the financial statements of additional entities
200 owned or controlled by the provider, the financial report must,
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201 in addition to the provider's consolidated or combined financial
202 statements, provide as supplemental information the provider's
203 financial statements with the items in subparagraph 1. for the
204 individual facility shown separately.
205 4. If the facility is a member of an obligated group, the
206 facility may use the obligated group's audited financial
207 statements if they contain the items in subparagraph 1. for the
208 individual facility shown separately from other members of the
209 obligated group.
210 Section 5. Subsection (1) of section 651.0261, Florida
211 Statutes, is amended to read:
212 651.0261 Quarterly and monthly statements.—
213 (1) Within 45 days after the end of each fiscal quarter,
214 each provider shall file a quarterly unaudited financial
215 statement of the provider or of the facility in the form
216 prescribed by commission rule and days cash on hand, occupancy,
217 debt service coverage ratio, and a detailed listing of the
218 assets maintained in the liquid reserve as required under s.
219 651.035. The last quarterly statement for a fiscal year is not
220 required if a provider does not have pending a regulatory action
221 level event, impairment, or a corrective action plan. If a
222 provider falls below two or more of the thresholds set forth in
223 s. 651.011(26) s. 651.011(25) at the end of any fiscal quarter,
224 the provider shall submit to the office, at the same time as the
225 quarterly statement, an explanation of the circumstances and a
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226 description of the actions it will take to meet the
227 requirements.
228 Section 6. Paragraph (a) of subsection (1) and paragraph
229 (c) of subsection (3) of section 651.033, Florida Statutes, are
230 amended, and paragraph (a) of subsection (3) of that section is
231 republished, to read:
232 651.033 Escrow accounts.—
233 (1) When funds are required to be deposited in an escrow
234 account pursuant to s. 651.0215, s. 651.022, s. 651.023, s.
235 651.0246, s. 651.035, or s. 651.055:
236 (a) The escrow account must be established in a Florida
237 bank, Florida savings and loan association, Florida trust
238 company, or a national bank that is chartered and supervised by
239 the Office of the Comptroller of the Currency within the United
240 States Department of the Treasury and that has a branch in this
241 state, which is acceptable to the office, or such funds must be
242 deposited with the department and be kept and maintained in an
243 account separate and apart from the provider's business
244 accounts.
245 (3) When entrance fees are required to be deposited in an
246 escrow account pursuant to s. 651.0215, s. 651.022, s. 651.023,
247 s. 651.0246, or s. 651.055:
248 (a) The provider shall deliver to the resident a written
249 receipt. The receipt must show the payor's name and address, the
250 date, the price of the care contract, and the amount of money
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251 paid. A copy of each receipt, together with the funds, must be
252 deposited with the escrow agent or as provided in paragraph (c).
253 The escrow agent must release such funds to the provider 7 days
254 after the date of receipt of the funds by the escrow agent if
255 the provider, operating under a certificate of authority issued
256 by the office, has met the requirements of s. 651.0215(8), s.
257 651.023(6), or s. 651.0246. However, if the resident rescinds
258 the contract within the 7-day period, the escrow agent must
259 release the escrowed fees to the resident.
260 (c) As an alternative to paragraph (a) At the request of
261 an individual resident of a facility, the provider may hold the
262 check for the 7-day period and may not deposit it during this
263 time period. If the resident rescinds the contract within the 7 -
264 day period, the check must be immediately returned to the
265 resident. Upon the expiration of the 7 days, the provider shall
266 deposit the check.
267 Section 7. Subsection (7) of section 651.034, Florida
268 Statutes, is renumbered as subsection (8), subsection (6) is
269 amended, and a new subsection (7) is added to that section, to
270 read:
271 651.034 Financial and operating requirements for
272 providers.—
273 (6) The office may exempt a provider from subsection (1)
274 or subsection (2) until stabilized occupancy is reached or until
275 the time projected to achieve stabilized occupancy as reported
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276 in the last feasibility study required by the office as part of
277 an application filing under s. 651.0215, s. 651.023, s. 651.024,
278 or s. 651.0246 has elapsed, but for no longer than 5 years
279 following the end of the provider's fiscal year in which after
280 the date of issuance of the certificate of occupancy was issued.
281 (7) Upon written request of a provider, the office may
282 temporarily suspend all or a portion of the financial and
283 operating requirements under this chapter due to an
284 extraordinary event rendering the provider incapable of
285 continuing normal operations such as, but not limited to, a
286 pandemic, a fire, or a federal order or a Governor's executive
287 order or proclamation declaring a natural disaster that forces
288 the provider to evacuate, curtail operations, restrict
289 admissions, or suspend marketing for life safety reasons or
290 repairs related to the event. Such temporary suspension may be
291 granted by the office if the provider maintains compliance with
292 ss. 651.026, 651.0261, and 651.035 and the provider is not
293 insolvent or impaired. The provider shall comply with required
294 reporting requested by the office, including the estimated time
295 for completing repairs or remediating problems related to
296 restrictions on admissions or marketing. When determining
297 whether to grant a suspension of specific regulatory
298 requirements, the office must consider any formal action or
299 amendments approved by a lender or trustee to the provider's
300 lending agreements or bond covenants as a result of the event.
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301 Section 8. Paragraph (b) of subsection (1), paragraph (a)
302 of subsection (2), subsection (5), and paragraph (a) of
303 subsection (7) of section 651.035, Florida Statutes, are amended
304 to read:
305 651.035 Minimum liquid reserve requirements.—
306 (1) A provider shall maintain in escrow a minimum liquid
307 reserve consisting of the following reserves, as applicable:
308 (b) A provider that has outstanding indebtedness that
309 requires a debt service reserve to be held in escrow pursuant to
310 a trust indenture or mortgage lien on the facility and for which
311 the debt service reserve may only be used to pay principal and
312 interest payments on the debt that the debtor is obligated to
313 pay, and which may include property taxes and insurance, may
314 include such debt service reserve in computing the minimum
315 liquid reserve needed to satisfy this subsection if the provider
316 furnishes to the office a copy of the agreement under which such
317 debt service reserve is held, together with a statement of the
318 amount being held in escrow for the debt service reserve,
319 certified by the lender or trustee and the provider to be
320 correct. The trustee shall provide the office with any
321 information concerning the debt service reserve account upon
322 request of the provider or the office. In addition, the trust
323 indenture, loan agreement, or escrow agreement must provide that
324 the provider, trustee, lender, escrow agent, or a person
325 designated to act in its place shall notify the office in
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326 writing at least 10 days before the withdrawal of any portion of
327 the debt service reserve funds required to be held in escrow as
328 described in this paragraph. The notice must include an
329 affidavit sworn to by the provider, the trustee, or a person
330 designated to act in its place which includes the amount of the
331 scheduled debt service payment, the payment due date, the amount
332 of the withdrawal, the accounts from which the withdrawal will
333 be made, and a plan with a schedule for replenishing the
334 withdrawn funds. If the plan is revised by a consultant that is
335 retained as prescribed in the provider's financing documents,
336 the revised plan must be submitted to the office within 10 days
337 after the approval by the lender or trustee. Any such separate
338 debt service reserves are not subject to the transfer provisions
339 set forth in subsection (8).
340 (2)(a) In facilities where not all residents are under
341 continuing care or continuing care at-home contracts, the
342 reserve requirements of subsection (1) shall be computed only
343 with respect to the proportional share of operating expenses
344 that are applicable to residents. For purposes of this
345 calculation, the proportional share shall be based upon the
346 ratio of residents under continuing care or continuing care at-
347 home contracts to the total of all residents, including those
348 residents who do not hold such contracts.
349 (5) A provider may satisfy the minimum liquid reserve
350 requirements of this section by acquiring from a financial
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351 institution, as specified in paragraph (b), a clean,
352 unconditional irrevocable letter of credit equal to the
353 requirements of this section, less the amount of escrowed
354 operating cash required in paragraph (d).
355 (a) The letter of credit must be issued by a financial
356 institution participating in the State of Florida Treasury
357 Certificate of Deposit Program or a Florida bank, Florida
358 savings and loan association, Florida trust company, or a
359 national bank that is chartered and supervised by the Office of
360 the Comptroller of the Currency within the United States
361 Department of the Treasury, and must be approved by the office
362 before issuance and before any renewal or modification thereof.
363 At a minimum, the letter of credit must provide for:
364 1. Ninety days' prior written notice to both the provider
365 and the office of the financial institution's determination not
366 to renew or extend the term of the letter of credit.
367 2. Unless otherwise arranged by the provider to the
368 satisfaction of the office, deposit by the financial institution
369 of letter of credit funds in an account designated by the office
370 no later than 30 days before the expiration of the letter of
371 credit.
372 3. Deposit by the financial institution of letter of
373 credit funds in an account designated by the office within 4
374 business days following written instructions from the office
375 that, in the sole judgment of the office, funding of the minimum
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376 liquid reserve is required.
377 (b) The terms of the letter of credit must be approved by
378 the office and the long-term debt of the financial institution
379 providing such letter of credit must be rated in one of their
380 top three long-term debt rating categories by either Moody's
381 Investors Service, Standard & Poor's Corporation, or a
382 recognized securities rating agency acceptable to the office.
383 (c) The letter of credit must name the office as
384 beneficiary.
385 (d) Notwithstanding any other provision of this section, a
386 provider using a letter of credit pursuant to this subsection
387 shall, at all times, have and maintain in escrow an operating
388 cash reserve equal to 2 months' operating expenses as determined
389 pursuant to s. 651.026.
390 (e) If the issuing financial institution no longer
391 participates in the State of Florida Treasury Certificate of
392 Deposit Program, such financial institution shall deposit as
393 collateral with the department eligible securities, as
394 prescribed by s. 625.52, having a market value equal to or
395 greater than 100 percent of the stated amount of the letter of
396 credit.
397 (7)(a) A provider may withdraw funds held in escrow
398 without the approval of the office if:
399 1. The amount held in escrow exceeds the requirements of
400 this section and if the withdrawal will not affect compliance
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401 with this section; or
402 2. The withdrawal is from a debt service reserve required
403 to be held in escrow pursuant to a trust indenture or mortgage
404 lien on the facility as described in paragraph (1)(b) and the
405 funds withdrawn will be used to pay delinquent principal and
406 interest payments that the debtor is obligated to pay on the
407 facility.
408 Section 9. Subsection (2) of section 651.055, Florida
409 Statutes, is amended to read:
410 651.055 Continuing care contracts; right to rescind. —
411 (2) A resident has the right to rescind a continui ng care
412 contract and receive a full refund of any funds paid, without
413 penalty or forfeiture, within 7 days after executing the
414 contract. However, if an individual signs a reservation contract
415 pursuant to s. 651.023(4) and fails to cancel such contract
416 within 30 days after executing the contract and subsequently
417 signs a contract and rescinds the contract within 7 days, the
418 forfeiture penalty authorized under s. 651.023(4) may be
419 deducted from the refund unless there is evidence of extenuating
420 circumstances such as, but not limited to, the death, illness,
421 or diagnosis of a chronic or terminal illness of the individual
422 or the individual's spouse or partner or a change in financial
423 or asset position which warrants cancellation of the contract. A
424 resident may not be required to move into the facility
425 designated in the contract before the expiration of the 7-day
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426 period. During the 7-day period, the resident's funds must be
427 held in an escrow account, or the provider may hold the check
428 until the 7-day period expires unless otherwise requested by the
429 resident pursuant to s. 651.033(3)(c).
430 Section 10. Paragraph (a) of subsection (2) of section
431 651.081, Florida Statutes, is amended to read:
432 651.081 Residents' council.—
433 (2)(a) Each facility shall establish a residents' council
434 created for the purpose of representing residents on matters set
435 forth in s. 651.085. A residents' council has the authority to
436 establish and maintain its own governance documents such as
437 bylaws, operating agreements, policies, and operating
438 procedures, which may include establishment of committees.
439 Residents, as defined in s. 651.011, have the right to
440 participate in resident council matters, including elections.
441 The residents' council shall be established through an election
442 in which the residents, as defined in s. 651.011, vote by
443 ballot, physically or by proxy. If the election is to be held
444 during a meeting, a notice of the organizational meeting must be
445 provided to all residents of the community at least 10 business
446 days before the meeting. Notice may be given through internal
447 mailboxes, communitywide newsletters, bulletin boards, in-house
448 television stations, and other similar means of communication.
449 An election creating a residents' council is valid if at least
450 40 percent of the total resident population participates in the
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451 election and a majority of the participants vote affirmatively
452 for the council. The initial residents' council created under
453 this section is valid for at least 12 months. A residents'
454 organization formalized by bylaws and elected officials must be
455 recognized as the residents' council under this section and s.
456 651.085. Within 30 days after the election of a newly elected
457 president or chair of the residents' council, the provider shall
458 give the president or chair a copy of this chapter and rules
459 adopted thereunder, or direct him or her to the appropriate
460 public website to obtain this information. Only one residents'
461 council may represent residents before the governing body of the
462 provider as described in s. 651.085(2).
463 Section 11. Paragraph (f) of subsection (1) of section
464 651.083, Florida Statutes, is amended to read:
465 651.083 Residents' rights.—
466 (1) No resident of any facility shall be deprived of any
467 civil or legal rights, benefits, or privileges guaranteed by
468 law, by the State Constitution, or by the United States
469 Constitution solely by reason of status as a resident of a
470 facility. Each resident of a facility has the right to:
471 (f) Present grievances and recommend changes in policies,
472 procedures, and services to the staff of the facility, governing
473 officials, or any other person without restraint, interference,
474 coercion, discrimination, or reprisal. This right includes
475 access to ombudsman volunteers and staff and advocates and the
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476 right to be a member of, and active in, and to associate with,
477 advocacy or special interest groups or associations.
478 Section 12. Subsections (2), (3), and (5) of section
479 651.085, Florida Statutes, are amended to read:
480 651.085 Quarterly meetings between residents and the
481 governing body of the provider; resident representation before
482 the governing body of the provider.—
483 (2) A residents' council formed pursuant to s. 651.081,
484 members of which are elected by the residents, shall nominate
485 and elect designate a designated resident representative to
486 represent them before the governing body of the provider on
487 matters specified in subsection (3). The initial designated
488 resident representative elected under this section shall be
489 elected to serve at least 12 months. The designated resident
490 representative does not have to be a current member of the
491 residents' council; however, such individual must be a resident,
492 as defined in s. 651.011.
493 (3) The designated resident representative shall be
494 notified by a designated representative of the provider at least
495 14 days in advance of any meeting of the full governing body at
496 which the annual budget and proposed changes or increases in
497 resident fees or services are on the agenda or will be
498 discussed. The designated resident representative shall be
499 invited to attend and participate in that portion of the meeting
500 designated for the discussion of such changes. Designated
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501 resident representatives shall perform their duties in good
502 faith. For providers that own or operate more than one facility
503 in the state, each facility must have its own designated
504 resident representative.
505 (5) The board of directors or governing board of a
506 licensed provider may at its sole discretion allow a resident of
507 the facility to be a voting member of the board or governing
508 body of the facility. The board of directors or governing board
509 of a licensed provider may establish specific criteria for the
510 nomination, selection, and term of a resident as a member of the
511 board or governing body. If the board or governing body of a
512 licensed provider operates more than one licensed facility,
513 regardless of whether the facility is in-state or out-of-state,
514 the board or governing body may select at its sole discretion
515 one resident from among its facilities to serve on the board of
516 directors or governing body on a rotating basis. A resident who
517 serves as a member of the board or governing body of the
518 facility shall perform his or her duties in a fiduciary manner,
519 including the duty of confidentiality, duty of care, duty of
520 loyalty, and duty of obedience, as required of any individual
521 serving on the board or governing body of the facility.
522 Section 13. Paragraphs (e) through (k) and paragraph (l)
523 of subsection (2) of section 651.091, Florida Statutes, are
524 redesignated as paragraphs (f) through (l) and paragraph (n),
525 respectively, and new paragraphs (e) and (m) are added to that
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526 subsection and paragraph (m) is added to subsection (3) of that
527 section, to read:
528 651.091 Availability, distribution, and posting of reports
529 and records; requirement of full disclosure.—
530 (2) Every continuing care facility shall:
531 (e) Provide a copy of the final examination report and
532 corrective action plan, if one is required by the office, to the
533 executive officer of the provider's governing board and to the
534 president or chair of the residents' council within 60 days
535 after issuance of the report.
536 (m) Provide to the president or chair of the residents'
537 council a written notice of any change in management within 10
538 business days.
539 (3) Before entering into a contract to furnish continuing
540 care or continuing care at-home, the provider undertaking to
541 furnish the care, or the agent of the provider, shall make full
542 disclosure, obtain written acknowledgment of receipt, and
543 provide copies of the disclosure documents to the prospective
544 resident or his or her legal representative, of the following
545 information:
546 (m) Disclosure of whether the provider has one or more
547 residents serving on its governing board and whether that
548 resident has a vote or is serving in a nonvoting, ex officio
549 capacity.
550 Section 14. Subsection (7) of section 651.105, Florida
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551 Statutes, is renumbered as subsection (6), and subsection (1)
552 and present subsection (6) of that section are amended to read:
553 651.105 Examination.—
554 (1) The office may at any time, and shall at least once
555 every 3 years, examine the business of any applicant for a
556 certificate of authority and any provider engaged in the
557 execution of care contracts or engaged in the performance of
558 obligations under such contracts, in the same manner as is
559 provided for the examination of insurance companies pursuant to
560 ss. 624.316 and 624.318. For a provider as deemed accredited
561 under s. 651.028, such examinations must take place at least
562 once every 5 years. The examinations must cover the preceding 3
563 or 5 fiscal years of the provider, whichever is applicable, and
564 shall be commenced within 12 months after the end of the most
565 recent fiscal year covered by the examinations. The examinations
566 may include examination of events subsequent to the end of the
567 most recent fiscal year and the events of any prior period that
568 affect the present financial condition of the provider. As part
569 of the examinations, the office shall conduct an interview in
570 person, by telephone, or through the Internet with the current
571 president or chair of the residents' council or another
572 designated officer of the council if the president or chair is
573 not available. The Such examinations must be made by a
574 representative or examiner designated by the office whose
575 compensation will be fixed by the office pursuant to s. 624.320.
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576 Routine examinations may be made by having the necessary
577 documents submitted to the office; and, for this purpose,
578 financial documents and records conforming to commonly accepted
579 accounting principles and practices, as required under s.
580 651.026, are deemed adequate. The final written report of each
581 examination must be filed with the office and, when so filed,
582 constitutes a public record. Any provider being examined shall,
583 upon request, give reasonable and timely access to all of its
584 records. The representative or examiner designated by the office
585 may at any time examine the records and affairs and inspect the
586 physical property of any provider, whether in connection with a
587 formal examination or not.
588 (6) A representative of the provider must give a copy of
589 the final examination report and corrective action plan, if one
590 is required by the office, to the executive officer of the
591 governing body of the provider within 60 days after issuance of
592 the report.
593 Section 15. This act shall take effect July 1, 2023.
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INSURANCE & BANKING SUBCOMMITTEE
HB 1573 by Rep. Persons-Mulicka
Relating to Continuing Care Providers
AMENDMENT SUMMARY
March 25, 2023
Amendment 1 by Rep. Persons-Mulicka (Line 147): The amendment:
• Clarifies the means to document financial statements when the CCRC provider is
presenting consolidated or combined financial statements to OIR.
• Makes grammatical changes.
Amendment 2 by Rep. Persons-Mulicka (Line 430): The amendment:
• Conforms existing language regarding resident council governance that is relocated and
expanded by another portion of the bill.
• Revises a required disclosure by the CCRC provider to prospective residents whether one
or more residents serve on the CCRC provider’s board or governing body and the nature
and capacity of the resident’s or residents’ service on the providers board or governing
body.
• Makes technical and grammatical changes.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1573 (2023)
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: Insurance & Banking
2 Subcommittee
3 Representative Persons-Mulicka offered the following:
4
5 Amendment
6 Remove lines 147-204 and insert:
7 combined phases constructed; or at least 75 percent of the
8 proposed units for which an entrance fee is charged for a phase
9 or a total of the combined phases are reserved, and the provider
10 submits an attestation to the office to use the ent rance fees
11 collected and held in escrow for the sole purpose of paying
12 secured indebtedness as specified in the feasibility study
13 submitted to the office pursuant to paragraph (2)(a). If the
14 expansion is to be completed in multiple phases, the 75 percent
15 reservation requirement applies separately to each phase of the
16 expansion. If a provider offering continuing care at-home is
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1573 (2023)
Amendment No. 1
17 applying for a release of escrowed entrance fees, the same
18 minimum requirement must be met for the continuing care and
19 continuing care at-home contracts independently of each other.
20
21 Notwithstanding chapter 120, only the provider, the escrow
22 agent, and the office have a substantial interest in any office
23 decision regarding release of escrow funds in any proceedings
24 under chapter 120 or this chapter.
25 (6) Within 30 45 days after the date on which an
26 application is deemed complete as provided in paragraph (5)(b),
27 the office shall complete its review and, based upon its review,
28 approve an expansion by the applicant and issue a determinati on
29 that the application meets all requirements of law, that the
30 feasibility study was based on sufficient data and reasonable
31 assumptions, and that the applicant will be able to provide
32 continuing care or continuing care at-home as proposed and meet
33 all financial and contractual obligations related to its
34 operations, including the financial requirements of this
35 chapter. If the application is denied, the office must notify
36 the applicant in writing, citing the specific failures to meet
37 the requirements of this chapter. The denial entitles the
38 applicant to a hearing pursuant to chapter 120.
39 Section 4. Paragraph (b) of subsection (2) of section
40 651.026, Florida Statutes, is amended to read:
41 651.026 Annual reports.—
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Bill No. HB 1573 (2023)
Amendment No. 1
42 (2) The annual report shall be in such form as the
43 commission prescribes and shall contain at least the following:
44 (b) A financial report audited by an independent certified
45 public accountant which must contain, for two or more periods if
46 the facility has been in existence that long, all of the
47 following:
48 1. An accountant's opinion and, in accordance with
49 generally accepted accounting principles:
50 a. A balance sheet;
51 b. A statement of income and expenses;
52 c. A statement of equity or fund balances; and
53 d. A statement of changes in cash flows.
54 2. Notes to the financial report considered customary or
55 necessary for full disclosure or adequate understanding of the
56 financial report, financial condition, and operation.
57 3. If the provider's financial statements are consolidated
58 or combined in accordance with generally accepted accounting
59 principles with the financial statements of additional entities
60 owned or controlled by the provider, the financial report must
61 provide as supplemental information the financial statements of
62 the provider with the items in subparagraph 1. for the
63 individual facility shown separately along with the additional
64 entities comprising the consolidated or combined financial
65 report.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1573 (2023)
Amendment No. 2
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: Insurance & Banking
2 Subcommittee
3 Representative Persons-Mulicka offered the following:
4
5 Amendment
6 Remove lines 430-547 and insert:
7 Section 10. Paragraphs (a) and (d) of subsection (2) of
8 section 651.081, Florida Statutes, are amended to read:
9 651.081 Residents' council.—
10 (2)(a) Each facility shall establish a residents' council
11 created for the purpose of representing residents on matters set
12 forth in s. 651.085. A residents' council has the authority to
13 establish and maintain its own governance documents such as
14 bylaws, operating agreements, policies, and operating
15 procedures, which may include establishment of committees.
16 Residents, as defined in s. 651.011, have the right to
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Bill No. HB 1573 (2023)
Amendment No. 2
17 participate in resident council matters, including elections.
18 The residents' council shall be established through an election
19 in which the residents, as defined in s. 651.011, vote by
20 ballot, physically or by proxy. If the election is to be held
21 during a meeting, a notice of the organizational meeting must be
22 provided to all residents of the community at least 10 business
23 days before the meeting. Notice may be given through internal
24 mailboxes, communitywide newsletters, bulletin boards, in-house
25 television stations, and other similar means of communication.
26 An election creating a residents' council is valid if at least
27 40 percent of the total resident population participates in the
28 election and a majority of the participants vote affirmatively
29 for the council. The initial residents' council created under
30 this section is valid for at least 12 months. A residents'
31 organization formalized by bylaws and elected officials must be
32 recognized as the residents' council under this section and s.
33 651.085. Within 30 days after the election of a newly elected
34 president or chair of the residents' council, the provider shall
35 give the president or chair a copy of this chapter and rules
36 adopted thereunder, or direct him or her to the appropriate
37 public website to obtain this information. Only one residents'
38 council may represent residents before the governing body of the
39 provider as described in s. 651.085(2).
40 (d) A residents’ council shall adopt its own bylaws and
41 governance documents subject to the vote and approval of the
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1573 (2023)
Amendment No. 2
42 residents. The residents’ council shall provide for open
43 meetings when appropriate. The residents’ council’s governing
44 documents shall define the manner in which residents may submit
45 an issue to the council and define a reasonable timeframe in
46 which the residents’ council shall respond to a resident
47 submission or inquiry. A residents’ council may include term
48 limits in its governing documents to ensure consistent
49 integration of new leaders. If a licensed facility files for
50 bankruptcy under chapter 11 of the United States Bankruptcy
51 Code, 11 U.S.C. chapter 11, the facility, in its required filing
52 of the 20 largest unsecured creditors with the United States
53 Trustee, shall include the name and contact information of a
54 designated resident selected by the residents’ council, and a
55 statement explaining that the designated resident was chosen by
56 the residents’ council to serve as a representative of the
57 residents’ interest on the creditors’ committee, if appropriate.
58 Section 11. Paragraph (f) of subsection (1) of section
59 651.083, Florida Statutes, is amended to read:
60 651.083 Residents' rights.—
61 (1) No resident of any facility shall be deprived of any
62 civil or legal rights, benefits, or privileges guaranteed by
63 law, by the State Constitution, or by the United States
64 Constitution solely by reason of status as a resident of a
65 facility. Each resident of a facility has the right to:
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Bill No. HB 1573 (2023)
Amendment No. 2
66 (f) Present grievances and recommend changes in policies,
67 procedures, and services to the staff of the facility, governing
68 officials, or any other person without restraint, interference,
69 coercion, discrimination, or reprisal. This right includes
70 access to ombudsman volunteers and staff and advocates and the
71 right to be a member of, and active in, and to associate with,
72 advocacy or special interest groups or associations.
73 Section 12. Subsections (2), (3), and (5) of section
74 651.085, Florida Statutes, are amended to read:
75 651.085 Quarterly meetings between residents and the
76 governing body of the provider; resident representation before
77 the governing body of the provider.—
78 (2) A residents' council formed pursuant to s. 651.081,
79 members of which are elected by the residents, shall nominate
80 and elect designate a designated resident representative to
81 represent them before the governing body of the provider on
82 matters specified in subsection (3). The initial designated
83 resident representative elected under this section shall be
84 elected to serve at least 12 months. The designated resident
85 representative does not have to be a current member of the
86 residents' council; however, such individual must be a resident,
87 as defined in s. 651.011.
88 (3) The designated resident representative shall be
89 notified by a representative of the provider at least 14 days in
90 advance of any meeting of the full governing body at which the
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1573 (2023)
Amendment No. 2
91 annual budget and proposed changes or increases in resident fees
92 or services are on the agenda or will be discussed. The
93 designated resident representative shall be invited to attend
94 and participate in that portion of the meeting designated for
95 the discussion of such changes. Designated resident
96 representatives shall perform their duties in good faith. For
97 providers that own or operate more than one facility in the
98 state, each facility must have its own designated resident
99 representative.
100 (5) The board of directors or governing board of a
101 licensed provider may at its sole discretion allow a resident of
102 the facility to be a voting member of the board or governing
103 body of the facility. The board of directors or governing board
104 of a licensed provider may establish specific criteria for the
105 nomination, selection, and term of a resident as a member of the
106 board or governing body. If the board or governing body of a
107 licensed provider operates more than one licensed facility,
108 regardless of whether the facility is in-state or out-of-state,
109 the board or governing body may select at its sole discretion
110 one resident from among its facilities to serve on the board of
111 directors or governing body on a rotating basis. A resident who
112 serves as a member of the board or governing body of the
113 facility shall perform his or her duties in a fiduciary manner,
114 including the duty of confidentiality, duty of care, duty of
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Amendment No. 2
115 loyalty, and duty of obedience, as required of any individual
116 serving on the board or governing body of the facility.
117 Section 13. Paragraphs (e) through (k) and paragraph (l)
118 of subsection (2) of section 651.091, Florida Statutes, are
119 redesignated as paragraphs (f) through (l) and paragraph (n),
120 respectively, and new paragraphs (e) and (m) are added to that
121 subsection and paragraph (m) is added to subsection (3) of that
122 section, to read:
123 651.091 Availability, distribution, and posting of reports
124 and records; requirement of full disclosure.—
125 (2) Every continuing care facility shall:
126 (e) Provide a copy of the final examination report and
127 corrective action plan, if one is required by the office, to the
128 executive officer of the provider's board or governing body and
129 to the president or chair of the residents' council within 60
130 days after issuance of the report.
131 (m) Provide to the president or chair of the residents'
132 council a written notice of any change in management within 10
133 business days.
134 (3) Before entering into a contract to furnish continuing
135 care or continuing care at-home, the provider undertaking to
136 furnish the care, or the agent of the provider, shall make full
137 disclosure, obtain written acknowledgment of receipt, and
138 provide copies of the disclosure documents to the prospect ive
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1573 (2023)
Amendment No. 2
139 resident or his or her legal representative, of the following
140 information:
141 (m) Disclosure of whether the provider has one or more
142 residents serving on its board or governing body and whether
143 that
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HB 7035
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 7035 PCB EEG 23-07 OGSR/Citizens Property Insurance
Corporation/Cybersecurity Data and Information
SPONSOR(S): Ethics, Elections & Open Government Subcommittee, Griffitts
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
Orig. Comm.: Ethics, Elections & Open 18 Y, 0 N Villa Toliver
Government Subcommittee
1) Insurance & Banking Subcommittee Fortenberry Lloyd
2) State Affairs Committee
SUMMARY ANALYSIS
The Open Government Sunset Review Act requires the Legislature to review each public record exemption
and each public meeting exemption five years after enactment. If the Legislature does not reenact the
exemption, it is automatically repealed on October 2nd of the fifth year after enactment.
Current law provides a public record exemption for information held by Citizens Property Insurance
Corporation (Citizens) that identifies detection, investigation, or response practices for suspected or confirmed
cybersecurity incidents, including suspected or confirmed breaches, and for portions of risk assessments,
evaluations, audits, and other reports of Citizens’ cybersecurity program for its data, information, and
information technology (I.T.) resources. Additionally, portions of public meetings that would reveal such
information are exempt from public meeting requirements.
The bill removes a redundant public record exemption for information held by Citizens, which identifies
detection, investigation, or response practices for suspected or confirmed cybersecurity incidents, including
suspected or confirmed breaches. The bill removes the scheduled repeal date, thereby maintaining the public
record and public meeting exemption for those portions of risk assessments, evaluations, audits, and other
reports of Citizen’s cybersecurity program for its data, information, and I.T. resources and portions of public
meetings that would reveal such information. The information protected by current public record exemption
specific to Citizens remains confidential and exempt under the general public record exemption for
cybersecurity that was enacted in 2022.
The bill does not appear to have a fiscal impact on state government or local governments. It does not appear
to have a direct economic impact on the private sector.
The bill is effective on October 1, 2023.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h7035.IBS
DATE: 3/25/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Open Government Sunset Review Act
The Open Government Sunset Review Act (Act) 1 sets forth a legislative review process for newly
created or substantially amended public record or public meeting exemptions. It requires an automatic
repeal of the exemption on October 2nd of the fifth year after creation or substantial amendment,
unless the Legislature reenacts the exemption.2
The Act provides that a public record or public meeting exemption may be created or maintained only if
it serves an identifiable public purpose. In addition, it may be no broader than is necessary to meet one
of the following purposes:
Allow the state or its political subdivisions to effectively and efficiently administer a
governmental program, which administration would be significantly impaired without the
exemption.
Protect sensitive personal information that, if released, would be defamatory or would
jeopardize an individual’s safety; however, only the identity of an individual may be exempted
under this provision.
Protect trade or business secrets.3
If, and only if, in reenacting an exemption that will repeal, the exemption is expanded, then a public
necessity statement and a two-thirds vote for passage are required.4 If the exemption is reenacted with
grammatical or stylistic changes that do not expand the exemption, if the exemption is narrowed, or if
an exception to the exemption is created, then a public necessity statement and a two-thirds vote for
passage are not required.
General Public Record Exemption for Cybersecurity Information
In 2022, the Legislature created a general public record exemption5 for the following cybersecurity6
related information held by an agency:7
Coverage limits and deductible or self-insurance amounts of insurance or other risk mitigation
coverages acquired for the protection of information technology8 (I.T.) systems, operational
technology9 (O.T.) systems, or data of an agency.
Information relating to critical infrastructure.10
Certain cybersecurity incident information required to be reported pursuant to law.
1 Section 119.15, F.S.
2 Section 119.15(3), F.S.
3 Section 119.15(6)(b), F.S.
4 Article I, s. 24(c), FLA. CONST .
5 Section 119.0725, F.S.
6 “Cybersecurity” means the protection afforded to an automated information system in order to attain the applicable objectives of
preserving the confidentiality, integrity, and availability of data, information, and information technology resources. Section
119.0725(1)(c), F.S.
7 “Agency” means any state, county, district, authority, or municipal officer, department, division, board, bureau, commission, or other
separate unit of government created or established by law including, the Commission on Ethics, the Public Service Commission, and
the Office of Public Counsel, and any other public or private agency, person, partnership, corporation, or business entity ac ting on
behalf of any public agency. Section 119.011(2), F.S.
8 “Information technology” means equipment, hardware, software, firmware, programs, systems, networks, infrastructure, media, and
related material used to automatically, electronically, and wirelessly collect, receive, access, transmit, display, sto re, record, retrieve,
analyze, evaluate, process, classify, manipulate, manage, assimilate, control, communicate, exchange, convert, converge, inte rface,
switch, or disseminate information of any kind or form. Section 119.0725(1)(f), F.S.
9 “Operational technology” means the hardware and software that cause or detect a change through the direct monitoring or control of
physical devices, systems, processes, or events. Section 119.0725(1)(g), F.S.
10 “Critical infrastructure” means existing and proposed information technology and operational technology systems and assets,
whether physical or virtual, the incapacity or destruction of which would negatively affect security, economic security, public health,
or public safety. Section 119.0725(1)(b), F.S.
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Network schematics, hardware and software configurations, or encryption information or
information that identifies detection, investigation, or response practices for suspected or
confirmed cybersecurity incidents, including suspected or confirmed breaches, 11 if the
disclosure of such information would facilitate unauthorized access to or unauthorized
modification, disclosure, or destruction of:
o Data12 or information, whether physical or virtual; or
o I.T. resources, which include an agency’s existing or proposed I.T. systems.
The Legislature also created a public meeting exemption for any portion of a meeting that would reveal
the confidential and exempt information; however, all portions of an exempt meeting must be recorded
and transcribed. The recording and transcript are confidential and exempt from public record
requirements.13
The confidential and exempt information is required to be made available to a law enforcement agency,
the Auditor General, the Cybercrime Office within the Florida Department of Law Enforcement (FDLE),
the Florida Digital Service (FLDS),14 and for agencies under the jurisdiction of the Governor, the Chief
Inspector General. In addition, the confidential and exempt information may be released in the
furtherance of the custodial agency’s duties and responsibilities, to another governmental entity in the
furtherance of its statutory duties and responsibilities, and cybersecurity incident information may be
reported in an aggregate format.15
Citizens Property Insurance Corporation
Citizens Property Insurance Corporation (Citizens) is a state-created, not-for-profit, tax-exempt
governmental entity whose public purpose is to provide property insurance coverage to those unable to
find affordable coverage in the voluntary admitted16 market. It is not a private insurance company.17
Citizens was statutorily created in 2002 when the Legislature combined the state’s two insurers of last
resort, the Florida Residential Property and Casualty Joint Underwriting Association (RPCJUA) and the
Florida Windstorm Underwriting Association (FWUA).18
Citizens is governed by a nine-member board of governors that administers its plan of operations. The
plan of operations is reviewed and approved by the Financial Service Commission.19 The Governor,
President of the Senate, Speaker of the House of Representatives, and Chief Financial Officer each
appoint two members to the board.20 The Governor appoints one additional member to advocate solely
on behalf of the consumer.21 Citizens is subject to regulation by the Office of Insurance Regulation.
Public Record and Public Meeting Exemptions under Review
In 2018, the Legislature created public record exemptions for records held by Citizens that identify
detection, investigation, or response practices for suspected or confirmed cybersecurity incidents,
including suspected or confirmed breaches, and for portions of risk assessments, evaluations, audits,
and other reports of Citizens’ cybersecurity program for its data, information, and I.T. resources. Such
records, and portions thereof, are confidential and exempt 22 from public record requirements if
11 “Breach” means unauthorized access of data in electronic form containing personal information. Good faith access of personal
information by an employee or agent of an agency does not constitute a breach, provided that the information is not used for a purpose
unrelated to the business or subject to further unauthorized use. Section 119.0725(1)(a), F.S.
12 “Data” means a subset of structured information in a format that allows such information to be electronically retrieved and
transmitted. Section 119.0725(1)(d), F.S.
13 Section 119.0725(3), F.S.
14 FLDS is a subdivision of DMS charged with overseeing the state’s I.T. resources. Section 20.22(2)(b), F.S.
15 Section 119.0725(5), F.S.
16 Admitted market means insurance companies licensed to transact insurance in Florida.
17 Section 627.351(6)(a)1., F.S.
18 See ch. 2002-240, L.O.F.
19 Section 627.351(6)(a)2., F.S.
20 Section 627.351(6)(c)4.a., F.S.
21 Section 627.351(6)(c)4., F.S.
22 There is a difference between records the Legislature designates as exempt from public record requirements and those the
Legislature deems confidential and exempt. A record classified as exempt from public disclosure may be disclosed under certain
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disclosure would facilitate unauthorized access to or unauthorized modification, disclosure, or
destruction of:
Data or information, whether physical or virtual; or
I.T. resources, including:
o Information relating to the security of Citizens’ technologies, processes, and practices
designed to protect networks, computers, data processing software, and data from
attack, damage, or unauthorized access; or
o Physical or virtual security information that relates to Citizens’ existing or proposed I.T.
systems.23
The Legislature also created a public meeting exemption for any portion of a meeting that would reveal
the confidential and exempt information; however, all portions of an exempt meeting must be recorded
and transcribed. The recording and transcript are confidential and exempt from public record
requirements unless a court of competent jurisdiction, following an in camera review, determines that
the meeting was not restricted to the discussion of confidential and exempt data and information. If
such a determination occurs, only the portion of the recording or transcript that reveals nonexempt
data may be disclosed.24
The exemptions provide that the recording and transcript of public meetings that would reveal the
confidential and exempt information must be available to the Auditor General, the Cybercrime Office of
FDLE, and the Office of Insurance Regulation. Such records may also be available to a state or federal
agency for security purposes or in furtherance of the agency’s official duties. 25
The 2018 public necessity statement26 for the exemptions provides that:
The disclosure of such records could potentially compromise the confidentiality,
integrity, and availability of the corporation's data and information technology
resources. It is a public necessity that this information be made confidential in order
to protect the technology systems, resources, and data of the corporation.
Pursuant to the Open Government Sunset Review Act, the exemptions will repeal on October 2, 2023,
unless reenacted by the Legislature.
During the 2022 interim, subcommittee staff met with Citizens’ staff as part of its review under the
OGSR Act. Citizens’ staff indicated they had not had any issues interpreting or applying the exemption
and that they were unaware of the existence of any litigation concerning the exemption. Further,
Citizens’ staff indicated they had not received any complaints concerning the exemption. As such,
Citizens’ staff recommended the exemption be reenacted.
Effect of the Bill
The bill removes a redundant public record exemption for information held by Citizens which identifies
detection, investigation, or response practices for suspected or confirmed cybersecurity incidents,
including suspected or confirmed breaches. The general cybersecurity exemption created by the
Legislature in 2022 protects the same records from disclosure and is applicable to all agencies subject
to public record requirements, including Citizens.
circumstances. See WFTV, Inc. v. The School Board of Seminole, 874 So. 2d 48, 53 (Fla. 5th DCA 2004), review denied 892 So. 2d
1015 (Fla. 2004); City of Riviera Beach v. Barfield, 642 So. 2d 1135 (Fla. 4th DCA 1994); Williams v. City of Minneola, 575 So. 2d
687 (Fla. 5th DCA 1991). If the Legislature designates a record as confidential and exempt from public disclosure, such record may
not be released by the custodian of public records to anyone other than the persons or entities specifically designated in st atute. See
Attorney General Opinion 85-62 (August 1, 1985).
23 Section 627.352(1), F.S.
24 Section 627.352(2), F.S.
25 Section 627.352(3), F.S.
26 Article I, s. 24(c), FLA. CONST ., requires each public record exemption and each public meeting exemption state with specificity the
public necessity justifying the exemption.
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The bill removes the scheduled repeal date of the public record exemption, thereby maintaining the
exemption, for those portions of risk assessments, evaluations, audits, and other reports of Citizen’s
cybersecurity program for its data, information, and I.T. resources if disclosure would facilitate
unauthorized access to or unauthorized modification, disclosure, or destruction of data or information,
whether physical or virtual; or I.T. resources, including:
Information relating to the security of Citizens’ technologies, processes, and practices designed
to protect networks, computers, data processing software, and data from attack, damage, or
unauthorized access; or
Physical or virtual security information that relates to Citizens’ existing or proposed I.T. systems.
The bill also maintains the public meeting exemption for portions of a public meeting that would reveal
such information. Lastly, the bill specifically allows the Auditor General, the Cybercrime Office of FDLE,
and the Office of Insurance Regulation to access records relating to risk assessments, evaluations,
audits, and other reports of Citizen’s cybersecurity program for its data, information, and I.T. resources .
B. SECTION DIRECTORY:
Section 1 amends s. 627.352, F.S., relating to security of data and information technology of Citizens
Property Insurance Corporation.
Section 2 provides an effective date of October 1, 2023.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
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:
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DATE: 3/25/2023
Not applicable. The bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill does not require rulemaking nor confer or alter an agency’s rulemaking authority.
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 7035 2023
1 A bill to be entitled
2 An act relating to a review under the Open Government
3 Sunset Review Act; amending s. 627.352, F.S., which
4 provides an exemption from public record and public
5 meeting requirements for certain data and information
6 relating to cybersecurity; repealing exemptions
7 relating to data and information from technology
8 systems; making technical changes; revising specified
9 information that is required to be made available t o
10 certain entities; removing the scheduled repeal of the
11 exemption; providing an effective date.
12
13 Be It Enacted by the Legislature of the State of Florida:
14
15 Section 1. Section 627.352, Florida Statutes, is amended
16 to read:
17 627.352 Security of data and information technology in
18 Citizens Property Insurance Corporation.—
19 (1) The following data and information from technology
20 systems owned by, under contract with, or maintained by Citizens
21 Property Insurance Corporation are confidential and exempt f rom
22 s. 119.07(1) and s. 24(a), Art. I of the State Constitution:
23 (a) Records held by the corporation which identify
24 detection, investigation, or response practices for suspected or
25 confirmed information technology security incidents, including
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HB 7035 2023
26 suspected or confirmed breaches, if the disclosure of such
27 records would facilitate unauthorized access to or unauthorized
28 modification, disclosure, or destruction of:
29 1. Data or information, whether physical or virtual; or
30 2. Information technology resources, including:
31 a. Information relating to the security of the
32 corporation's technologies, processes, and practices designed to
33 protect networks, computers, data processing software, and data
34 from attack, damage, or unauthorized access; or
35 b. Security information, whether physical or virtual,
36 which relates to the corporation's existing or proposed
37 information technology systems.
38 (b) Any portion Those portions of a risk assessment
39 assessments, an evaluation evaluations, an audit audits, and any
40 other report reports of the Citizens Property Insurance
41 Corporation's information technology security program for its
42 data, information, and information technology resources which
43 are held by the corporation are confidential and exempt from s.
44 119.07(1) and s. 24(a), Art. I of the State Constitution, if the
45 disclosure of such records would facilitate unauthorized access
46 to or the unauthorized modification, disclosure, or destruction
47 of:
48 (a)1. Data or information, whether physical or virtual; or
49 (b)2. Information technology resources, which include:
50 1.a. Information relating to the security of the
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HB 7035 2023
51 corporation's technologies, processes, and practices designed to
52 protect networks, computers, data processing software, and data
53 from attack, damage, or unauthorized access; or
54 2.b. Security information, whether physical or virtual,
55 which relates to the corporation's existing or proposed
56 information technology systems.
57 (2) Those portions of a public meeting as specified in s.
58 286.011 which would reveal data and information described in
59 subsection (1) are exempt from s. 286.011 and s. 24(b), Art. I
60 of the State Constitution. No exempt portion of an exempt
61 meeting may be off the record. All exempt portions of such a
62 meeting must be recorded and transcribed. The recording and
63 transcript of the meeting must remain confidential and exempt
64 from disclosure under s. 119.07(1) and s. 24(a), Art. I of the
65 State Constitution unless a court of competent jurisdiction,
66 following an in camera review, determines that the meeting was
67 not restricted to the discussion of data and information made
68 confidential and exempt by this section. In the event of such a
69 judicial determination, only that portion of the transcript
70 which reveals nonexempt data and information may be disclosed to
71 a third party.
72 (3) The confidential and exempt records and portions of
73 public meeting recordings and transcripts described in
74 subsection (2) must be available to the Auditor General, the
75 Cybercrime Office of the Department of Law Enforcement, and the
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HB 7035 2023
76 Office of Insurance Regulation. Such records and portions of
77 public meeting meetings, recordings, and transcripts may be made
78 available to a state or federal agency for security purposes or
79 in furtherance of the agency's official duties.
80 (4) The exemptions provided by this section apply to
81 records held by the corporation before, on, or after March 21,
82 2018 the effective date of this act.
83 (5) This section is subject to the Open Government Sunset
84 Review Act in accordance with s. 119.15 and shall stand repeale d
85 on October 2, 2023, unless reviewed and saved from repeal
86 through reenactment by the Legislature.
87 Section 2. This act shall take effect October 1, 2023.
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PCS for HB 1299
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: PCS for HB 1299 Payments for Workers' Compensation Expert Witnesses
SPONSOR(S): Insurance & Banking Subcommittee
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
Orig. Comm.: Insurance & Banking Subcommittee Lloyd Lloyd
SUMMARY ANALYSIS
Florida’s Workers’ Compensation Law (WC Law) requires employers to provide injured employees all
medically necessary remedial treatment, care, and attendance for such period as the nature of the injury or the
process of recovery may require. The Department of Financial Services, Division of Workers’ Compensation
(DFS), provides regulatory oversight of Florida’s workers’ compensation system, including the workers’
compensation health care delivery system. DWC is responsible for ensuring that employers provide medically
necessary treatment, care, and attendance for injured workers.
The WC Law limits the amount a health care provider can be paid for expert testimony during depositions on a
workers’ compensation claim. As an expert medical witness, a workers’ compensation health care provider is
limited to a maximum $200, per hour, unless they only provided an expert medical opinion following a medical
record review or provided direct personal services unrelated to the case in dispute, then they limited to a
maximum $200, per day.
The bill increases the maximum hourly amount allowed expert witnesses from $200, per hour, to $300, per
hour. For those expert witnesses subject to the daily rate, the maximum amount allowed is increased from
$200, per day, to $300, per day.
The bill has no impact on state or local government revenue. It has a negative, but likely insignificant, impact
on state and local government expenditures and has a positive and negative impacts on the private sector.
The bill is effective July 1, 2023.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: pcs1299.IBS
DATE: 3/25/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Division of Workers’ Compensation
Florida’s Workers’ Compensation Law 1 (WC Law) requires employers to provide injured employees all
medically necessary remedial treatment, care, and attendance for such period as the nature of the
injury or the process of recovery may require.2 The Department of Financial Services, Division of
Workers’ Compensation (DFS), provides regulatory oversight of Florida’s workers’ compensation
system, including the workers’ compensation health care delivery system. The law specifies certain
reimbursement formulas and methodologies to compensate workers’ compensation health care
providers 3 that provide medical services to injured employees. Where a reimbursement amount or
methodology is not specifically included in statute, the Three-Member Panel is authorized to annually
adopt statewide schedules of maximum reimbursement allowances (MRAs) to provide uniform fee
schedules for the reimbursement of various medical services. 4 DFS incorporates the MRAs approved
by the Three-Member Panel in reimbursement manuals 5 through the rulemaking process provided by
the Administrative Procedures Act.6
Medical Services
DWC is responsible for ensuring that employers provide medically necessary treatment, care, and
attendance for injured workers. Healthcare providers must receive authorization from the insurer before
providing treatment and submit treatment reports to the insurer. Insurers must reimburse healthcare
providers based on statewide schedules of maximum reimbursement allowances developed by the
DWC or an agreed-upon contract price. DWC mediates utilization and reimbursement disputes. 7
Expert Witness Fees for Health Care Providers
The WC Law limits the amount a health care provider can be paid for expert testimony during
depositions on a workers’ compensation claim. As an expert medical witness, a workers’ compensation
health care provider is limited to a maximum $200, per hour, unless they only provided an expert
medical opinion following a medical record review or provided direct personal services unrelated to the
case in dispute, then they limited to a maximum $200, per day.8
Effect of the Bill
The bill increases the maximum hourly amount allowed expert witnesses from $200, per hour, to $300,
per hour. For those expert witnesses subject to the daily rate, the maximum amount allowed is
increased from $200, per day, to $300, per day.
B. SECTION DIRECTORY:
Section 1. Amends s. 440.13, F.S., relating to medical services and supplies; penalty for violations;
limitations
1 Ch. 440, F.S.
2 S. 440.13(2)(a), F.S.
3 The term “health care provider” includes a physician or any recognized practitioner licensed to provide skilled services
pursuant to a prescription or under the supervision or direction of a physician. It also includes any hospital licensed under
chapter 395 and any health care institution licensed under chapter 400 or chapter 429. S. 440.13(1)(g), F.S.
4 S. 440.13(12), F.S.
5 Ss. 440.13(12) and (13), F.S., and Ch. 69L-7, F.A.C.
6 Ch. 120, F.S.
7 S. 440.13, F.S.
8 S. 440.13(10), F.S.
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DATE: 3/25/2023
Section 2. Providing an effective date of July 1, 2023.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
The bill may have a negative, likely insignificant, impact on expenditures for litigated state employee
workers’ compensation claims to the extent the state elects to increase expert witness fees, as
allowed by the bill.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
The bill may have a negative, likely insignificant, impact on self-insured local government
expenditures for litigated public employee workers’ compensation claims to the extent they elect to
increase expert witness fees, as allowed by the bill.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may increase payments to medical providers who appear as expert witnesses in litigated
workers’ compensation claim.
The bill may increase worker’s compensation claim costs in litigated cases. If this is significant enough
to impact workers’ compensation rates, it may increase workers’ compensation premiums paid by
employers.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not Applicable. This bill does not appear to require counties or municipalities to spend funds or take
action requiring the expenditures of funds; reduce the authority that counties or municipalities have
to raise revenues in the aggregate; or reduce the percentage of state tax shared with counties or
municipalities.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
None provide by the bill.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
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DATE: 3/25/2023
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
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DATE: 3/25/2023
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
PCS for HB 1299 2023
1 A bill to be entitled
2 An act relating to payments for workers' compensation
3 expert witnesses; amending s. 440.13, F.S.; increasing
4 the maximum amounts of certain witness fees related to
5 workers' compensation cases; providing an effective
6 date.
7
8 Be It Enacted by the Legislature of the State of Florida:
9
10 Section 1. Subsection (10) of section 440.13, Florida
11 Statutes, is amended to read:
12 440.13 Medical services and supplies; penalty for
13 violations; limitations.—
14 (10) WITNESS FEES.—Any health care provider who gives a
15 deposition shall be allowed a witness fee. The amount charged by
16 the witness may not exceed $300 $200 per hour. An expert witness
17 who has never provided direct professional services to a party
18 but has merely reviewed medical records and provided an expert
19 opinion or has provided only direct professional services that
20 were unrelated to the workers' compensation case may not be
21 allowed a witness fee in excess of $300 $200 per day.
22 Section 2. This act shall take effect July 1, 2023.
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