Meeting Packet: Commerce Committee, April 17, 2023
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Commerce Committee
Monday, April 17, 2023
2:00 PM - 6:00 PM
Webster Hall (212 Knott)
Meeting Packet
Paul Renner Bob Rommel
Speaker Chair
The Florida House of Representatives
Commerce Committee
Paul Renner Bob Rommel
Speaker Chair
Meeting Agenda
Monday, April 17, 2023
2:00 PM – 6:00 PM
Webster Hall (212 Knott)
I. Call to Order
II. Roll Call
III. Opening Remarks
IV. Consideration of the following bill(s):
CS/HB 125 Utility System Rate Base Values by Energy, Communications &
Cybersecurity Subcommittee, McClain
CS/HB 415 Temporary Commercial Kitchens by Regulatory Reform & Economic
Development Subcommittee, Porras
CS/HB 505 Insurance by Insurance & Banking Subcommittee, Berfield
CS/CS/HB 591 Social Media Protection for Minors by Choice & Innovation
Subcommittee, Regulatory Reform & Economic Development Subcommittee, Rayner-
Goolsby, Sirois
CS/HB 637 Motor Vehicle Dealers, Manufacturers, Importers, and Distributors by Civil
Justice Subcommittee, Shoaf
CS/HB 639 Issuance of Special Beverage Licenses by Regulatory Reform & Economic
Development Subcommittee, Esposito
CS/HB 715 Compensation of Lottery Ticket Retailers by State Administration &
Technology Appropriations Subcommittee, Mooney
303 House Office Building, 402 South Monroe Street, Tallahassee, FL 32399-1300
(850) 717-4870
Page 2
CS/HB 807 License or Permit to Operate Vehicle for Hire by Regulatory Reform &
Economic Development Subcommittee, Borrero
CS/HB 833 Vacation Rentals by Regulatory Reform & Economic Development
Subcommittee, Duggan
CS/HB 869 Department of Business and Professional Regulation by State Administration
& Technology Appropriations Subcommittee, McClain
HB 917 State Minimum Wage by Yeager
CS/HB 919 Homeowners' Associations by Regulatory Reform & Economic Development
Subcommittee, Porras, Fernandez-Barquin
CS/HB 959 Dosage Form Animal Health Products by Regulatory Reform & Economic
Development Subcommittee, Tuck
HB 987 Public Deposits by Botana
CS/HB 1185 Consumer Protection by Insurance & Banking Subcommittee, Giallombardo
CS/CS/HB 1209 Economic Development by Ways & Means Committee, Regulatory
Reform & Economic Development Subcommittee, Shoaf
CS/HB 1215 Pub. Rec./Inspectors and Investigators/DACS by Ethics, Elections & Open
Government Subcommittee, Maggard
CS/HB 1267 Consumer Finance Loans by Insurance & Banking Subcommittee,
Fernandez-Barquin
CS/HB 1281 Preemption Over Utility Service Restrictions by Energy, Communications
& Cybersecurity Subcommittee, Buchanan
CS/HB 1307 Department of Agriculture and Consumer Services by Criminal Justice
Subcommittee, McClure
CS/HB 1317 Local Regulation of Nonconforming or Unsafe Structures by Regulatory
Reform & Economic Development Subcommittee, Roach
HB 1353 Commercial Financing Product Brokers and Providers by Bankson
CS/HB 1395 Management and Safety of Condominium and Cooperative Buildings by
Regulatory Reform & Economic Development Subcommittee, Lopez, V.
CS/HB 1573 Continuing Care Providers by Insurance & Banking Subcommittee,
Persons-Mulicka
Page 3
HB 1575 Public Safety Emergency Communications Systems by Brackett
Consideration of the following proposed committee substitute(s):
PCS for CS/HB 487 -- Department of Financial Services
PCS for CS/CS/HB 799 -- Property Insurance
PCS for CS/HB 1111 -- Non-coverage-related Regulation of Insurance
PCS for HB 7045 -- Human Trafficking, Prostitution, and Lewdness
V. Closing Remarks
VI. Adjournment
CS/HB 125
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 125 Utility System Rate Base Values
SPONSOR(S): Energy, Communications & Cybersecurity Subcommittee, McClain
TIED BILLS: IDEN./SIM. BILLS: CS/SB 194
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Energy, Communications & Cybersecurity 18 Y, 0 N, As CS Walsh Keating
Subcommittee
2) Commerce Committee Walsh Hamon
SUMMARY ANALYSIS
When a water or wastewater utility regulated by the Public Service Commission (PSC) acquires an existing
water or wastewater utility system, the PSC establishes a rate base value for the acquired utility system. The
rate base value established by the PSC is the amount upon which the acquiring utility may earn a rate of
return. This value is determined using the acquired utility’s net book value, i.e., the original cost of the utility’s
assets when first dedicated to public service, less depreciation. This valuation method is called the “original
cost” method.
If the purchase price of a utility system is greater than its net book value, no part of the difference is included in
the acquiring utility’s rate base absent a showing of extraordinary circumstances, which may include
anticipated cost efficiencies and improvements in service quality and regulatory compliance, among other
things. If the PSC determines that extraordinary circumstances exist, it will allow the acquiring utility to include
all or part of the difference in its rate base as a “positive acquisition adjustment.” This adjustment would be
reflected in the utility’s rates that are set during the utility’s next general rate case.
As an alternative to the current process, the bill allows certain PSC-regulated water and wastewater utilities
(those with over 10,000 customers or those that are permitted to produce at least 3 million gallons of drinking
water per day) who acquire an existing system to petition the PSC to establish rate base for the acquired
system based on the lesser of: (1) the purchase price negotiated by the two utilities; or (2) the average of three
appraisals of the system conducted by licensed appraisers chosen from a list established by the PSC.
Appraisal fees and transaction costs may also be included. An engineering assessment must be conducted
and provided to the appraisers to be used for purposes of the appraisal. To support its request to use this
approach, the utility must provide the PSC certain information specified in the bill. Within 8 months of receiving
a complete petition, the PSC must issue a final order granting the petition, in whole or in part, or denying the
petition, consistent with the public interest.
The bill is not expected to have a fiscal impact on state or local governments. The bill may encourage
transactions involving the purchase of water or wastewater utility systems by eligible utilities. These
transactions may lead to needed infrastructure improvements, cost efficiencies, and improvements in service
quality and regulatory compliance for troubled utility systems, though this result is not required by the bill. For
acquisitions by PSC-regulated utilities that petition to use the alternative valuation process created in the bill,
the PSC may consider potential rate impacts and proposed improvement plans in its consideration of each
petition.
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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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Present Situation
Regulated Water and Wastewater Utilities
In various areas throughout Florida, water and wastewater services are provided through privately-
owned and operated utilities. These privately-owned utilities, sometimes referred to as investor-owned
utilities, range in size from very small systems, owned by individuals as sole proprietorships and
serving only a few dozen customers in a small neighborhood, to a few systems owned by large
interstate corporations which serve tens of thousands of customers in multiple Florida counties.
For privately-owned utilities operating within a single Florida county, the county has the option to
regulate rates and service or allow the Public Service Commission (PSC) to regulate those utilities.1
Regardless of whether the county has opted to regulate those utilities, the PSC has jurisdiction over all
water and wastewater utility systems whose service transverses county boundaries, except for systems
owned and regulated by intergovernmental authorities.2 As of 2021, the PSC had jurisdiction over 124
investor-owned water/wastewater utilities in 38 counties.3 Still, the vast majority of water and
wastewater customers in the state are served by water and wastewater utilities not regulated by the
PSC, primarily by systems owned, operated, managed, or controlled by governmental authorities.
For each utility within its jurisdiction, the PSC has exclusive authority to regulate the utility’s rates and
service.4 The PSC must establish rates that are just, reasonable, compensatory, and not unfairly
discriminatory.5 In doing so, the PSC must consider the value and quality of the service and the cost of
providing the service, which includes, but is not limited to: debt interest; the requirements of the utility
for working capital; maintenance, depreciation, tax, and operating expenses incurred in the operation of
all property used and useful in the public service; and a fair return on the investment of the utility in
property used and useful in the public service.6 The PSC has consistently interpreted the “investment of
the utility” to be the original cost of the utility’s property when first dedicated to public service. 7 Land is
included in the original cost at the time it was first dedicated to public use, meaning that under current
accounting practices used to establish a utility’s rate base, appreciation of the land’s value is not
considered.8
Acquisition of Water and Wastewater Utility Systems by Regulated Utilities
Each water or wastewater utility subject to the PSC’s jurisdiction must obtain a certificate of
authorization to provide water or wastewater service. 9 A PSC–regulated utility may not sell, assign, or
transfer its certificate of authorization, facilities, or majority organizational control without approval by
the PSC. Likewise, PSC approval is required for the transfer of a utility system exempt from PSC
jurisdiction, such as a system owned or operated by a governmental authority, to a PSC-regulated
utility. To grant approval, the PSC must determine that the sale, assignment, or transfer is in the public
interest and that the acquiring utility will fulfill the commitments, obligations, and representations of the
utility to be acquired.10 If a contract for sale is made contingent upon PSC approval, the sale of the
1 S. 367.171, F.S. If a county chooses to allow regulation by the PSC, it may rescind this election only after 10 continuous
years of PSC regulation.
2 Id.
3 Florida Public Service Commission, Facts and Figures of the Florida Utility Industry, p. 28 (Apr. 2022).
4 S. 367.011, F.S.
5 S. 367.081, F.S.
6 Id.
7 Florida Public Service Commission (FPSC), Agency Analysis of 2023 House Bill 125, p. 1 (Feb. 10, 2023).
8 Id. at 5.
9 S. 367.031, F.S.
10 S. 367.071(1), F.S.
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utility may occur prior to such approval.11 The PSC considers, among other things, the financial ability
of the buyer to maintain and operate the acquired utility and the technical ability of the buyer to provide
service.12
When the PSC approves a sale, assignment, or transfer of an existing utility system to a PSC-regulated
utility, the PSC may establish the rate base for the utility being transferred.13 The PSC establishes the
value of an existing utility’s rate base using “original cost.” Using original cost, the value of a utility’s
rate base is determined using the depreciated original cost, or net book value, of the property devoted
to the public service. Contributions in aid of construction (CIAC) are deducted from rate base to ensure
that costs are not imposed on current customers for infrastructure that was contributed to the utility
without the utility’s direct investment.14 This rate base is the amount upon which the utility may earn a
fair return, as established by the PSC.15
A utility system may be acquired at a price higher or lower 16 than the net book value of its assets. If the
purchase price is greater than net book value, no part of the difference is included in a utility’s rate base
absent a showing by the utility of extraordinary circumstances.17 In determining whether a utility has
demonstrated extraordinary circumstances, the PSC will consider evidence including:
Anticipated improvements in quality of service;
Anticipated improvements in compliance with regulatory mandates;
Anticipated rate reductions or rate stability over a long-term period;
Anticipated cost efficiencies; and
Whether the purchase was made as part of an arms-length transaction.18
If the PSC determines that extraordinary circumstances exist, it will allow the acquiring utility to include
all or part of the difference in its rate base as a “positive acquisition adjustment.” This adjustment will be
reflected in the utility’s rates that are set during the utility’s next general rate case.
Challenges for Small Water and Wastewater Utility Systems
Some small water and wastewater systems may struggle to make needed investments. This can
happen due to a variety of factors, such as:
Lack of staff or managerial expertise;
Lack of capital, or inability to access lower-cost capital, to invest in system infrastructure;
Lack of economies of scale inherent in larger systems; and
System abandonment due to disinterest of owners or management in running a system, death
of the owner or operator of the system with no clear plan of succession, or frustration with an
inability to meet water standards and other regulatory requirements. 19
These challenges can show up in system violations. Of the 38,853 Safe Drinking Water Act (SDWA)20
violations in the United States in 2021, 30,153 (77 percent) were in very small systems. For Florida, of
the 1,382 SDWA violations, 1,017 (73 percent) were in very small systems.
11 FPSC, supra note 7, at 1.
12 Rule 25-30.037 (2), F.A.C.
13 S. 367.071(5), F.S.
14 FPSC, supra note 7, at 2.
15 Id.at 1.
16 When the purchase price is equal to or less than 80 percent of net book value, a negative acquisition adjustment must
be included in rate base. Rule 25-30.0371(3), F.A.C.
17 Rule 25-30.0371(2), F.A.C.
18 Id.
19 National Regulatory Research Institute (NRRI), A Review of State Fair Mark et Value Acquisitions Policies for Water and
Wastewater Systems, Sep. 2021, at 8-11, available at https://pubs.naruc.org/pub/ED8E5710 -1866-DAA C-99FB -
B70190F3D64A).
20 The Safe Drinking Water Act, Pub. L. 93-523, is intended to ensure the quality drinking water by regulating public water
systems in the United States. Under this Act, the EPA sets standards for drinking water quality and oversees the states,
federally-recognized tribes, and territories that implement the United States’ drinking water program.
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Given the potential issues with small water and wastewater systems, some states have explored ways
to encourage system consolidation. Some states have adopted a rate mechanism referred to as fair
market valuation (FMV), which is intended to encourage the acquisition of small or struggling water or
wastewater utilities by other utilities that may be positioned to make investments in those systems and
provide greater economies of scale, lower cost capital, and greater management and technical
expertise.21 FMV differs from the traditional “original cost” valuation method by allowing a purchasing
utility to include in its rate base the “market” value of an acquired water or wastewater utility system,
which may be estimated through appraisals. This mechanism may increase the allowable rate base
associated with an acquisition.22
Proponents of the FMV mechanism state that the original cost methodology can sometimes make it
difficult to acquire a struggling water or wastewater utility system because the seller may feel that the
original cost methodology undervalues its system and is unwilling to sell.23 The FMV mechanism also
presents risks to an acquiring utility’s ratepayers:
The market forces that control prices in a competitive environment (i.e., buyers and sellers
pressuring an acquisition price in opposing directions) are different in a monopoly utility
environment. In a monopoly environment, buyers can benefit when a premium is reflected in the
rate base upon which they earn a return through rates, and sellers can benefit from sales
proceeds that exceed their investment. Thus, both buyers and sellers can benefit from higher
purchase prices.24
Monopoly utility assets can be difficult to value because there are not many comparable
transactions to rely upon. There may also be a shortage of experts who can do these types of
valuations, yet appraisers hold considerable power in the FMV process. FMV determinations
can be affected by the party who selects the appraiser, whether the appraiser has a conflict of
interest, the method used to determine the final value, the variation between appraisals (a single
high appraisal may significantly increase the average price), and the qualifications of the
appraiser.25
Use of FMV may encourage utilities to swap assets and increase ratepayer costs without any
guarantee of improvement of quality of service or increased cost efficiencies. 26
Acquisitions may result in “rate shock” for ratepayers, especially in systems that have been
historically underinvested in.27
Use of FMV encourages acquisitions that provide the greatest financial benefit to a purchasing
utility, regardless of whether the acquired utility systems are small, struggling systems that may
benefit from acquisition.28
Increases in the underlying value of the land upon which the acquired utility is situated may
result in significant rate increases solely based on real estate prices. 29
Given these risks, some states that use the FMV mechanism place restrictions on its use, including:
Requiring the acquiring utility be of sufficient size.
Requiring the acquired utility be municipal, small, or disadvantaged or distressed;
Requiring acquisition benefit from economies of scale;
Providing an initial moratorium or a limit on rate increases (i.e. “rate shock protection”); and
Requiring disclosure of anticipated rate impacts in an FMV application. 30
21 NRRI, supra note 19, at 1-11.
22 Id., at 1.
23 Id.
24 See, e.g., Janice Beecher, Water utility consolidation: is fair mark et value fair?, Michigan State University Institute of
Public Utilities, 2019, at 13, available at https://ipu.msu.edu/wp-content/uploads/2019/06/Beecher-Fair-Market-V alue-
Water-June-2019.pdf ; Scott Hempling, Water Mergers: are they mak ing economic sense?, Jun. 2019 (available at
https://energiahoy.com/2019/06/02/water-mergers -are-they-making-economic-sens e/).
25 NRRI, supra note 19, at 17.
26 FPSC, supra note 7.
27 NRRI, supra note 19, at 18; FPSC supra note 7, at 3.
28 NRRI, supra note 19, at 18-19.
29 FPSC supra note 7, at 5.
30 NRRI, supra note 19, at 19-31.
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Pending PSC Rulemaking Proceedings on Acquisition Adjustments
On March 30, 2023, the PSC issued a rule development notice to amend its rules related to water and
wastewater utility acquisition adjustments. The notice included a draft rule, and a rule development
workshop was scheduled for April 13, 2023.
The draft rule creates two categories of positive acquisition adjustments based on whether the utility
system being purchased is considered “viable” or “nonviable.” Adjustments for the purchase of viable
systems require a showing of a positive cumulative present value benefit over a 5-year period.
Adjustments for the purchase of non-viable systems require a lesser showing that customers will
benefit through improved quality of service, regulatory compliance, rate reductions or long-term rate
stability, and/or cost efficiencies. Proof of “extraordinary circumstances” would no longer be required to
obtain a positive acquisition adjustment.31
Effect of Proposed Changes
The bill allows certain PSC-regulated water and wastewater utilities who acquire an existing water or
wastewater utility system to petition the PSC to establish rate base for the utility system being acquired,
without regard to the system’s original cost.
Using the alternative approach provided by the bill, an acquiring utility may petition the PSC to establish
rate base for the system being acquired based on the lesser of: (1) the negotiated purchase price; or
(2) the average of three appraisals of the system conducted by licensed appraisers chosen from a list
established by the PSC. The rate base established for the system being acquired may also include
reasonable transaction and closing costs incurred by the acquiring utility and reasonable fees paid to
appraisers. If the rate base established through this approach exceeds the net book value of the
system being acquired, this excess will be reflected in customer rates set during the utility’s next
general rate case, thus putting upward pressure on rates.
The bill provides that three appraisers will be chosen from a list established by the PSC, and the
appraisals will be paid for by the buyer. The bill requires each appraiser to provide an appraisal of the
value of the utility system being acquired, in a manner consistent with the Uniform Standards of
Professional Appraisal Practice.32
Under the bill, the acquiring utility and the utility system being acquired must jointly retain a licensed
engineer to assess the tangible assets of the system being acquired. The bill specifies that this
assessment must be provided to the three chosen appraisers for use in determining the value of the
system being acquired.
A utility that wishes to use this alternative approach must include the following in a petition to the PSC:
The requested rate base value for the utility system being acquired;
Copies of the three required appraisals performed by the chosen appraisers, including the
average of the valuations produced by each appraisal;
A copy of the required engineering assessment of tangible assets;
A 3-year plan to address each deficiency identified in the engineering assessment, which must
address impact on quality of service and address any planned improvements to water quality;
The 5-year projected rate impact on the customers of the utility system being acquired,
including, but not limited to the rate impact of any expected cost efficiencies and the rate impact
of using of the alternative valuation approach in lieu of the original cost method;
31 Notice of Development of Rulemaking, In re: Proposed Amendment of Rule 25-30.071, F.A.C., Acquisition Adjustments,
Mar. 30, 2023, available at https://www.floridapsc.com/pscfiles/library/FILINGS/2023/02449-2023/02449-2023.pdf.
32 The Uniform Standards of Professional Appraisal Practice (USPAP) are the generally recognized ethical and
performance standards for the appraisal profession in the United States. USPAP was adopted by Congress in 1989, and
contains standards for all types of appraisal services, including real estate, personal property, business, and mass
appraisal. See The Appraisal Foundation, What is USPAP?,
https://www.appraisalfoundation.org/imis/TAF/Standards/Appraisal_Standards/Uniform_Standards _of_Professional_Appr
aisal_Practice/TAF/USPAP.aspx?hkey=a6420a67 -dbfa-41b3-9878-fac35923d2af (last visited Feb. 9, 2023).
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The contract of sale;
The estimated value of fees and the estimated transaction and closing costs to be incurred by
the acquiring utility; and
A tariff, including rates equal to the rates of the utility system being acquired.
Within 8 months of receiving a complete petition to use this alternative approach, the PSC must issue a
final order on the petition. The PSC may grant the petition, in whole or in part or with modifications in
the public interest, or the PSC may deny the petition if denial of the petition is in the public interest.
The PSC may not approve a rate base value higher than that requested in the petition.
The bill specifies that it applies only to acquiring utilities that:
Provide water service, wastewater service, or both, to more than 10,000 customers and are
engaged in an arms-length acquisition of a water system, wastewater system, or both types of
systems; or
Are permitted to produce 3 million gallons a day of drinking water and are engaged in an arms-
length acquisition of a water system, wastewater system, or both types of systems .
Currently, it appears that there are three PSC-regulated utilities to which the bill may apply, though the
alternative approach authorized under the bill is not limited to use by utilities that operate in Florida. All
other PSC-regulated utilities that acquire a water or wastewater system, or both, would continue to
operate under the PSC’s current rules that use the original cost approach to establish rate base and
that allow a positive acquisition adjustment only upon a demonstration of extraordinary circumstances.
If the alternative approach created by the bill is used to establish rate base for an acquired utility
system, that rate base value must be used by the PSC to establish rates during the acquiring utility’s
next general rate case. The bill specifies that the PSC, in setting future rates for customers of the
acquired system, may classify the system as a separate entity, consistent with the public interest.
B. SECTION DIRECTORY:
Section 1. Creates s. 367.0811, F.S., providing an alternative process to establish rate base for an
acquired water or wastewater utility system.
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.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
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The bill may encourage transactions involving the purchase of water and wastewater utility systems by
eligible utility systems. These transactions may lead to needed infrastructure improvements, cost
efficiencies, and improvements in service quality and regulatory compliance. For acquisitions by PSC-
regulated utilities that petition to use the alternative valuation process created in the bill, the PSC may
consider potential rate impacts and proposed improvement plans in its consideration of each petition.
Use of the alternative valuation process may lead to higher rates for the affected customers.
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:
The bill requires the PSC to adopt implementing rules.
C. DRAFTING ISSUES OR OTHER COMMENTS:
As noted by the PSC, it is unclear how the deficiency-related projects identified by the 3-year plan will
interact with the alternative valuation process.33
As previously noted, land is included in a utility’s rate base at its original cost when dedicated to service
for public use. Over time, customers of the utility pay down that cost through rates. Under the
alternative valuation method created in the bill, appreciation in land values alone could result in
significant increases in rate base, putting upward pressure on customer rates.34
The PSC notes that it has no expertise in property appraisal and suggests that an agency with such
expertise may be a more appropriate choice to establish the list of approved appraisers required by the
bill.35
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On February 15, 2023, the Energy, Communications & Cybersecurity Subcommittee adopted an
amendment and reported the bill favorably as a committee substitute. The amendment:
Corrects a drafting error in the title.
Revises language to clarify that the Public Service Commission may deny a petition if denial of the
petition is in the public interest.
Clarifies the following eligibility requirements for acquiring utilities:
o The gallonage eligibility option is based on permitted production of drinking water.
o The arms-length acquisition requirement applies to both the total customer eligibility option
and the gallonage eligibility option.
33 Id. at 4.
34 See Id. at 5.
35 Id.
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This analysis is drafted to the committee substitute as passed by the Energy, Communications &
Cybersecurity Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 125 2023
1 A bill to be entitled
2 An act relating to utility system rate base values;
3 creating s. 367.0811, F.S.; establishing an
4 alternative procedure for the Public Service
5 Commission to establish the rate base value for
6 certain acquired utility systems; requiring the
7 approved rate base value to be reflected in the
8 acquiring utility's next general rate case for
9 ratemaking purposes; establishing a procedure for
10 appraisal of the acquired utility system; providing
11 the contents required for a petition to the commission
12 for approval of the rate base value of the acquired
13 utility system; providing duties of the commission
14 regarding petitions; authorizing the commission to set
15 rates for and classify certain acquired utility
16 systems; providing applicability; requiring the
17 commission to adopt rules; providing an effective
18 date.
19
20 Be It Enacted by the Legislature of the State of Florida:
21
22 Section 1. Section 367.0811, Florida Statutes, is created
23 to read:
24 367.0811 Rates; alternative procedure for establishing
25 rate base value of acquired utility system.—
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CS/HB 125 2023
26 (1)(a) If a utility acquires an existing utility system,
27 including a system described in s. 367.022(2), the utility may
28 petition the commission to establish a rate base value for the
29 utility system being acquired using the valuation process in
30 this section instead of the cost method pursuant to s. 367.081.
31 (b) The rate base value established by the commission
32 under this section shall be used for ratemaking purposes in the
33 acquiring utility's next general rate case. The rate base value
34 may not exceed the lesser of the purchase price negotiated
35 between the parties to the acquisition transaction or the
36 average of the three appraisals conducted under subsection (2)
37 and may not be adjusted for capital in aid of construction used
38 and useful in serving the public. However, the rate base value
39 may include reasonable transaction and closing costs incurred by
40 the acquiring utility and reasonable fees paid to the
41 appraisers.
42 (2)(a) For purposes of this section, the utility system
43 being acquired shall be appraised by three licensed appraisers
44 chosen from a list established by the commission. Appraisals
45 shall be paid for by the buyer. Each appraiser shall provide an
46 appraisal of the value of the utility system being acquired that
47 is consistent with the Uniform Standards of Professional
48 Appraisal Practice.
49 (b) The acquiring utility and the utility system being
50 acquired shall jointly retain a licensed engineer to conduct an
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51 assessment of the tangible assets of the utility system being
52 acquired, and the assessment shall be provided to the three
53 appraisers for use in determining the value of the utility
54 system being acquired.
55 (3) A petition filed under this section to establish the
56 rate base value for a utility system being acquired must contain
57 all of the following:
58 (a) The requested rate base value for the utility system
59 being acquired.
60 (b) Copies of the appraisals required by this section,
61 including the average of the valuations produced by each
62 appraisal.
63 (c) A copy of the assessment of tangible assets required
64 by this section.
65 (d) A 3-year plan to address each deficiency identified by
66 the assessment of tangible assets required by this section. The
67 plan must address impact on quality of service and any planned
68 improvements to water quality.
69 (e) The 5-year projected rate impact on the customers of
70 the utility system being acquired, including, but not limited
71 to, the rate impact of all of the following:
72 1. Any cost efficiencies expected to result from the
73 acquisition transaction.
74 2. Use of this section, instead of the cost method
75 pursuant to s. 367.081, to establish the rate base value.
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CS/HB 125 2023
76 (f) The contract of sale.
77 (g) The estimated value of fees and transaction and
78 closing costs to be incurred by the acquiring utility.
79 (h) A tariff, including rates equal to the rates of the
80 utility system being acquired.
81 (4)(a) If the petition meets the filing requirements of
82 subsection (3), the commission, no later than 8 months after the
83 date the complete petition is filed, shall issue a final order
84 on the petition.
85 (b) The commission may grant the petition, in whole or in
86 part, or with modifications in the public interest, or may deny
87 the petition if it finds the petition is not in the public
88 interest.
89 (c) The commission may not approve a rate base value
90 higher than that requested in the petition.
91 (5) Notwithstanding any provision in this section, the
92 commission may, pursuant to this chapter, set rates for the
93 acquired utility system in future rate cases and may classify
94 the acquired utility system as a separate entity for ratemaking
95 purposes if it is deemed to be in the public interest.
96 (6) This section applies to acquiring utilities that are
97 engaged in an arms-length acquisition of a water or wastewater
98 system, or both, and:
99 (a) Provide water or wastewater service, or both, to more
100 than 10,000 customers; or
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101 (b) Are permitted to produce at least 3 million gallons
102 per day of drinking water.
103 (7) The commission shall adopt rules to implement this
104 section.
105 Section 2. This act shall take effect July 1, 2023.
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Commerce Committee
CS/HB 125 by Rep. McClain
Utility System Rate Base Values
AMENDMENT SUMMARY
April 17, 2023
Amendment 1 by Rep. McClain (strike-all):
• Provides a legislative finding that consolidation of water and wastewater utility
systems is in the public interest.
• Requires that a utility which petitions to use the alternative valuation process
established in the bill must submit a “rate stabilization plan” with its petition if the
requested relief would result in a significant individual increase in rates during a
defined period.
• Defines “rate stabilization plan.”
• Establishes a list of factors that the Public Service Commission (PSC) must
consider when reviewing a utility petition to use the alternative valuation process
established in the bill and authorizes the PSC to set reasonable performance
goals based on these factors for review in a subsequent rate proceeding.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 125 (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: Commerce Committee
2 Representative McClain offered the following:
3
4 Amendment (with title amendment)
5 Remove everything after the enacting clause and insert:
6 Section 1. Section 367.0811, Florida Statutes, is created
7 to read:
8 367.0811 Rates; alternative procedure for establishing
9 rate base value of acquired utility system.—
10 (1) The Legislature finds that it is in the public
11 interest to promote consolidation efforts with water and
12 wastewater utility systems in order to encourage economies of
13 scale, better access to lower material and supply costs, better
14 access to capital, improvement in utility infrastructure, and
15 improvement in the quality of service overall.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 125 (2023)
Amendment No. 1
16 (2) As used in this section, the term "rate stabilization
17 plan" means an acquiring utility's plan to implement rate
18 changes incrementally over a period of time to mitigate rate
19 increases and to predictably achieve consolidated p ricing over
20 time.
21 (3)(a) If a utility acquires an existing utility system,
22 including a system described in s. 367.022(2), the utility may
23 petition the commission to establish a rate base value for the
24 utility system being acquired using the valuation pro cess in
25 this section instead of the cost method pursuant to s. 367.081.
26 (b) The rate base value established by the commission
27 under this section shall be used for ratemaking purposes in the
28 acquiring utility's next general rate case. The rate base value
29 may not exceed the lesser of the purchase price negotiated
30 between the parties to the acquisition transaction or the
31 average of the three appraisals conducted under subsection (4)
32 and may not be adjusted for contribution-in-aid-of-construction
33 or used and useful in serving the public. However, the rate base
34 value may include reasonable transaction and closing costs
35 incurred by the acquiring utility and reasonable fees paid to
36 the appraisers.
37 (4)(a) For purposes of this section, the utility system
38 being acquired shall be appraised by three licensed appraisers
39 chosen from a list established by the commission. Appraisals
40 shall be paid for by the buyer. Each appraiser shall provide an
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 125 (2023)
Amendment No. 1
41 appraisal of the value of the utility system being acquired that
42 is consistent with the Uniform Standards of Professional
43 Appraisal Practice.
44 (b) The acquiring utility and the utility system being
45 acquired shall jointly retain a licensed engineer to conduct an
46 assessment of the tangible assets of the utility system being
47 acquired, and the assessment shall be provided to the three
48 appraisers for use in determining the value of the utility
49 system being acquired.
50 (5) A petition filed under this section to establish the
51 rate base value for a utility system being acquired must contain
52 all of the following:
53 (a) The requested rate base value for the utility system
54 being acquired.
55 (b) Copies of the appraisals required by this section,
56 including the average of the valuations produced by each
57 appraisal.
58 (c) A copy of the assessment of tangible assets required
59 by this section.
60 (d) A 3-year plan to address each deficiency identified by
61 the assessment of tangible assets required by this section. The
62 plan must address impact on quality of service and any planned
63 improvements to water quality.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 125 (2023)
Amendment No. 1
64 (e) The 5-year projected rate impact on the customers of
65 the utility system being acquired, including, but not limited
66 to, the rate impact of all of the following:
67 1. Any cost efficiencies expected to result from the
68 acquisition transaction.
69 2. Use of this section, instead of the cost method
70 pursuant to s. 367.081, to establish the rate base value.
71 (f) The contract of sale.
72 (g) The estimated value of fees and transaction and
73 closing costs to be incurred by the acquiring utility.
74 (h) A tariff, including rates equal to the rates of the
75 utility system being acquired, and a rate stabilization plan, if
76 applicable to the acquisition. A rate stabilization plan must be
77 filed if the acquisition would result in a significant
78 individual increase in rates during the period identified in
79 paragraph (e).
80 (6)(a) If the petition meets the filing requirements of
81 subsection (5), the commission, no later than 8 months after the
82 date the complete petition is filed, shall issue a final order
83 on the petition.
84 (b) The commission may, in the public interest, grant the
85 petition, in whole or in part, or with modifications or may deny
86 the petition.
87 (c) The commission may not approve a rate base value
88 higher than that requested in the petition.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 125 (2023)
Amendment No. 1
89 (7) Notwithstanding any provision in this section, the
90 commission may, pursuant to this chapter, set rates for the
91 acquired utility system in future rate cases and may classify
92 the acquired utility system as a separate entity for ratemaking
93 purposes if it is deemed to be in the public interest.
94 (8) This section applies to acquiring utilities that are
95 engaged in an arms-length acquisition of a water or wastewater
96 system, or both, and:
97 (a) Provide water or wastewater service, or both, to more
98 than 10,000 customers; or
99 (b) Are permitted to produce at least 3 million gallons
100 per day of drinking water.
101 (9) At minimum, in considering a rate base value petition
102 pursuant to this section, the commission must consider all of
103 the following in serving the public interest and pursuant to the
104 goals of this section:
105 (a) Improvements in quality of service.
106 (b) Improvements in compliance with regulatory
107 requirements.
108 (c) Rate reductions or rate stability over a long -term
109 period.
110 (d) Cost efficiencies.
111 (e) A demonstration that the purchase is being made as
112 part of an arms-length transaction.
113 (f) Economies of scale to be generated by the transaction.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 125 (2023)
Amendment No. 1
114 (g) A comparison of the acquiring utility's net book
115 value, to the extent available, and the proposed rate base value
116 of the utility being acquired.
117 (h) A demonstration that the acquiring utility has greater
118 access to capital than the utility being acquired.
119 (10) The commission may set reasonable performance goals
120 based on the standards specified in subsection (9) and rev iew
121 utility performance regarding these standards in a rate
122 proceeding.
123 (11) The commission shall adopt rules to implement this
124 section.
125 Section 2. This act shall take effect July 1, 2023.
126
127 -----------------------------------------------------
128 T I T L E A M E N D M E N T
129 Remove everything before the enacting clause and insert:
130 A bill to be entitled
131 An act relating to utility system rate base values; creating s.
132 367.0811, F.S.; providing legislative findings; defining the
133 term "rate stabilization plan"; establishing an alternative
134 procedure by which the Florida Public Service Commission may
135 establish a rate base value for certain acquired utility
136 systems; requiring that the approved rate base value be
137 reflected in the acquiring utility's next general rate case for
138 ratemaking purposes; establishing a procedure for appraisal of
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 125 (2023)
Amendment No. 1
139 the acquired utility system; providing the contents required for
140 a petition to the commission for approval of the rate base value
141 of the acquired utility system; providing duties of the
142 commission regarding petitions; authorizing the commission to
143 set rates for and classify certain acquired utility systems;
144 providing applicability; requiring the commission to take
145 certain factors into consideration for certain rate base value
146 petitions; requiring the commission to adopt rules; providing an
147 effective date.
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CS/HB 415
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 415 Temporary Commercial Kitchens
SPONSOR(S): Regulatory Reform & Economic Development Subcommittee, Porras
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform & Economic Development 9 Y, 2 N, As CS Thompson Anstead
Subcommittee
2) State Administration & Technology 15 Y, 0 N Helpling Topp
Appropriations Subcommittee
3) Commerce Committee Thompson Hamon
SUMMARY ANALYSIS
The Division of Hotels and Restaurants (Division) within the Department of Business and Professional
Regulation (DBPR) is charged with enforcing the applicable laws relating to the inspection and regulation of
public food service establishments for the purpose of protecting the public health, safety, and welfare. Food
trucks are regulated by DBPR as a “mobile food dispensing vehicle,”(MFDV). To obtain a license as an MFDV,
an applicant must complete a kitchen plan review for sanitation and safety concerns, apply for a license and
pay the license fee, and schedule and pass an initial licensing inspection. Once licensed, Division personnel
inspect MFDVs as often as necessary for the protection of the public’s health, safety, and welfare.
Ghost kitchens are shared temporary commercial kitchens optimized for use by food delivery services such as
Grubhub or DoorDash. Ghost kitchens include physical spaces for operators to create food for off-premises
consumption, and can have a central, commissary-style set-up with multiple restaurants or brands working out
of the same physical space. Ghost kitchens became popular in 2020 during the COVID-19 pandemic, when
food delivery and take-out options were being widely utilized. Recently, due to operational and permitting
issues, a few major restaurant chains and ghost kitchen provider platforms have reduced their investments in
temporary commercial kitchens.
The bill:
Requires operators of public food service establishments who provide commissary services to
temporary commercial kitchens to maintain a registry to verify that each temporary commercial kitchen
that receives such services is properly licensed, and requires operators of temporary commercial
kitchens to properly display their public food service establishment license number.
Preempts the regulation involving licenses, registrations, permits, and fees of temporary commercial
kitchens to the state.
Defines "temporary commercial kitchen" as “any kitchen that is a public food service establishment,
used for the preparation of takeout or delivery-only meals housed in portable structures that are
movable from place to place by a tow or are self-propelled or otherwise axle mounted, that include self-
contained utilities, including, but not limited to, gas, water, electricity, or liquid waste disposal. Such
kitchens are subject to all provisions of this chapter except as may be provided herein. The term does
not include a tent.”
Authorizes MFDVs and temporary commercial kitchens that are operated on the same premises as and
by a separately licensed public food service establishment to operate during the same hours of
operation as the separately licensed public food service establishment.
The bill may have an insignificant fiscal impact on state government and the private sector. See Fiscal Analysis
& Economic Impact Statement.
The effective date of the bill is 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:
Current Situation
Department of Business and Professional Regulation, Division of Hotels and Restaurants
The Division of Hotels and Restaurants (Division) within the Department of Business and Professional
Regulation (DBPR) is charged with enforcing the applicable laws relating to the inspection and
regulation of public food service establishments for the purpose of protecting the public health, safety,
and welfare.1
A “public food service establishment” is defined as:2
…any building, vehicle, place, or structure, or any room or division in a building,
vehicle, place, or structure where food is prepared, served, or sold for immediate
consumption on or in the vicinity of the premises; called for or taken out by
customers; or prepared prior to being delivered to another location for
consumption.
There are several exclusions from the definition of public food service establishment, including: 3
Any place maintained and operated by a public or private school, college, or university for the
use of students and faculty or temporarily to serve events such as fairs, carnivals, and athletic
contests;
Any eating place maintained and operated by a church or a religious, nonprofit fraternal, or
nonprofit civic organization for the use of members and associates or temporarily to serve
events such as fairs, carnivals, or athletic contests;
Any eating place located on an airplane, train, bus, or watercraft which is a common carrier;
Any eating place maintained by a facility certified or licensed and regulated by the Agency for
Health Care Administration or the Department of Children and Families;
Any place of business issued a permit or inspected by the Department of Agriculture and
Consumer Services under s. 500.12, F.S.;
Any vending machine that dispenses any food or beverage other than potentially hazardous
food;
Any place of business serving only ice, beverages, popcorn, and prepackaged items; and
Any research and development test kitchen limited to use by employees and not open to the
general public.
Food Trucks 4 are regulated by DBPR as a “mobile food dispensing vehicle,”(MFDV),5 and defined as:6
…any vehicle that is a public food service establishment and that is self-propelled
or otherwise movable from place to place and includes self-contained utilities,
including, but not limited to, gas, water, electricity, or liquid waste disposal.
To obtain a license as an MFDV, an applicant must:7
1 S. 509.032, F.S.
2 S. 509.013(5)(a), F.S.
3 S. 509.013(5)(b), F.S.
4 Generally, a food truck is a large wheeled vehicle from which food is sold that typically contains cooking facilities where t he food is
prepared. Merriam-Webster Dictionary, Food Truck , https://www.merriam-webster.com/dictionary/food%20truck (last visited Feb.
15, 2023).
5 S. 509.101, F.S.
6 S. 509.032, F.S.; R. 61C-1.002, F.A.C.
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Complete a kitchen plan review for sanitation and safety concerns (if required);8
o No plan review is required if an operator:
buys a vehicle already licensed by the Division and no changes are made
o A plan review is required if an operator:
constructs or uses a vehicle that has never been licensed by the Division;
uses a vehicle that has been closed for more than one year; or
uses a vehicle that has been remodeled;
o Plan review requires:
a plan of the vehicle with equipment labeled;
a sample menu;
a side photograph of the vehicle showing the wheels and open service window;
and
the water/sewer or commissary location;
Apply for a license and pay the license fee;9
o A $50 application fee is paid in addition to license fees ($347 annual and $178.50 half
year fee) when making an application for a new or change of ownership license; and
Schedule and pass the licensing inspection;10
o All new licensees are required to pass a sanitation and safety inspection prior to
opening.
Once licensed, Division personnel have the right to inspect MFDVs as often as necessary for
enforcement of the provisions of law and rule, and for the protection of the public’s health, safety, and
welfare.11
The Division is required, upon proper finding, to immediately issue an order to close a licensed public
food service establishment in the instance of a severe and immediate public health or safety or welfare
threat.12
Preemption
The regulation of public food service establishments is preempted to the state. This does not preempt
the authority of a local government or local enforcement district to conduct inspections for compliance
with the Florida Building Code and the Florida Fire Prevention Code. 13
The regulation of MFDVs involving licenses, registrations, permits, and fees is preempted to the state.
A municipality, county, or other local government entity is prohibited from:14
Requiring a separate license, registration, or permit beyond those established by DBPR as a
condition for the MFDV’s operation within the jurisdiction;
Requiring a separate fee beyond those established by DBPR as a condition for the MFDV's
operation within the jurisdiction; or
Prohibiting MFDVs from operating within the entirety of the entity’s jurisdiction.
The MFDV preemption may not be construed to affect a municipality, county, or other local
governmental entity’s authority to regulate the operation of MFDVs other than the regulations included
in the preemption.
7 Florida Department of Business and Professional Regulation, Division of Hotels and Restaurants – Guide to Mobile Food
Dispensing Vehicles, http://www.myfloridalicense.com/DBPR/hotels -restaurants/licensing/mfdv-guide/ (last visited Feb. 15, 2023).
8 R. 61C-1.002(5)(c), F.A.C.
9 R. 61C-1.008(4), F.A.C.
10 R.61C-1.008(3), F.A.C.
11 S. 509.032(2)(b), F.S.
12 S. 509.035, F.S.
13 S. 509.032(7), F.S.
14 S. 509.102, F.S.
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The preemption does not apply to any port authority, aviation authority, airport, or seaport. 15
Sanitation Rules
The Division is required to adopt and enforce sanitation rules to ensure the protection of the public from
food-borne illness in those establishments it licenses. These rules must provide the standards and
requirements for obtaining, storing, preparing, processing, serving, or displaying food in public food
service establishments, approving public food service establishment facility plans, conducting
inspections for compliance with sanitation regulations, cooperating and coordinating with the
Department of Health in epidemiological investigations, and initiating enforcement actions, and for other
such responsibilities deemed necessary by the Division.16
Effective November 1, 2019, the Division has adopted the 2017 Food and Drug Administration (FDA)
Food Code (Food Code), which establishes practical, science-based guidance and enforceable
provisions for reducing risk factors known to cause or contribute to foodborne illness. 17
The Food Code is a model for safeguarding public health and ensuring food is unadulterated and
honestly presented when offered to the consumer. It represents FDA's best advice for a uniform system
of provisions that address the safety and protection of food offered at retail and in food service. This
model is offered for adoption by local, state, and federal governmental jurisdictions for food service,
retail food stores, or food vending operations.18
The Food Code provides a plan review and inspectional guide for “mobile food establishments” based
on the mobile unit's menu and operation. Mobile units range in type from push carts to food preparation
catering vehicles. The guide provides a matrix of requirements that a mobile food establishment must
follow based on the type of food that is available for sale to the consumer. This includes requirements
for “time/temperature control for the safety of food”19 that is prepared on board a mobile food
establishment.20
Commissary Services Registry
DBPR defines “commissary” to mean “a licensed public food service establishment, which is utilized by
a MFDV for the purpose of providing all required support services, including potable water and
wastewater disposal that are not available on the mobile food dispensing vehicle.” 21
Operators of public food service establishments that provide commissary services are required to
maintain a daily registry verifying that each MFDV that receives such services is properly licensed.
Each MFDV operator must permanently affix in a prominent place on the side of the vehicle, in figures
at least 2 inches high and in contrasting colors from the background, the operator’s public food service
establishment license number. Prior to providing commissary services, each public food service
establishment must verify that the license number displayed on the vehicle matches the number on the
vehicle operator’s public food service establishment license. 22
Mobility Requirements
15 Id.
16 S. 509.032(2)(d), F.S.
17 R. 61C-1.001(12), F.A.C.
18 U.S. Public Health Service, FDA Food Code 2017, p. 327, http://www.myfloridalicense.com/dbpr/hr/statutes/documents/2017-
FDA-Food-Code.pdf (last visited Feb. 16, 2022).
19 "Time/temperature control for safety food" is defined in chapter 1 of the Food Code as a food that requires time/temperature control
for safety (TCS) to limit pathogenic microorganism growth or toxin formation.
20 U.S. Public Health Service, FDA Food Code 2017, p. 754, http://www.myfloridalicense.com/dbpr/hr/statutes/documents/2017-
FDA-Food-Code.pdf (last visited Feb. 23, 2023).
21 R. 61C-1.001(8), F.A.C.
22 S. 509.101(3), F.S.
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Current law describes MFDVs as “mounted public food service establishments which are self-propelled
or otherwise movable from place to place…”23 DBPR’s Guide to Mobile Food Establishments (Guide)
provides that an MFDV license is a vehicle mounted food service license where the vehicle has
adequate hand washing and dishwashing facilities, food protection, refrigeration, power and plumbing
system. The Guide provides that an MFDV operator performs food service activities inside the vehicle
like food storage, cooking or preparation of food and dishwashing. 24
According to the Guide, one of the basic requirements for obtaining an MFDV license is to be a vehicle,
and to be mobile. In order to be mobile, the Guide provides that “a side photograph of the vehicle
showing its wheels and open service window must be submitted at time of application.”25
Ghost Kitchens
Ghost kitchens, also known as dark kitchens or virtual restaurants, are shared commercial kitchens
optimized for food delivery service. Ghost kitchens are typically located in areas with a high
concentration of delivery demand. The kitchens don’t have a storefront and the staff prepares dishes off
of their menus that are only available for delivery. By eliminating the dining room and the wait-staff, this
allows food businesses to save on overhead costs by utilizing the shared kitchen model.26
Unlike a restaurant with a physical location, ghost kitchen customers do not know exactly where the
food is coming from. This may pose a health concern. The Food Code is used to regulate ghost kitchen
establishments; however, the Food Code mentions the regulation of Mobile Food Establishments, but
not ghost kitchens or similar structures. Ghost kitchens that are not mobile may fall outside of the
regulations.27
Ghost kitchens became popular in 2020 during the COVID-19 pandemic, when restaurants were shut
down due to restrictions, or business volume slowed significantly due to low numbers of patrons being
allowed in restaurants.28 Throughout the pandemic, the delivery-only virtual brand model grew, and
through much of 2022 it continued to grow.29 As a result, venture capitalists invested heavily in the
model, which allows access by established restaurant chains and new food entrepreneurs.30 Recently,
due to operational and permitting issues, a few major restaurant chains and provider platforms have
reduced their investments in the shared kitchen model. As a result, some of the companies are shifting
toward more conventional restaurant development plans.31
The U.S. online food delivery market size attained a value of $18.5 billion in the year 2020. The market
is further expected to grow between 2023 and 2028 to reach a value of almost $33.7 billion by 2026. 32
However, a recent survey of nearly 1,600 Americans shows that consumers are changing their dining
23 S. 509.101, F.S., and R. 61C-1.002, F.A.C.
24 DBPR, supra note 7.
25 Id.
26 CloudKitchens, What is a ghost kitchen?: the ultimate guide for your restaurant , https://cloudkitchens.com/blog/ultimate-guide-to-
ghost-kitchens/#:~:text=The%20kitchens%20themselves%20don't,working%20on%20fulfilling%20online%20orders . (last visited
Feb. 15, 2023).
27 Coppolino, Andrew, Ghost Kitchens, Home Cooks Shake up Food Industry but Raise Safety Concerns, CBCnews, CBC/Radio
Canada (Jan. 28, 2023), https://www.cbc.ca/news/canada/kitchener-waterloo/andrew-coppolino-food-safety-home-cooks-ghost-
kitchens-1.6728312 (last visited Feb. 20, 2023).
28 GlobalData, Struggling foodservice brands must embrace dark kitchens, says GlobalData,
https://www.globaldata.com/media/consumer/struggling -foodservice-brands-must-embrace-dark-kitchens-says-globaldata/ (last
visited Feb. 15, 2023).
29 PYMNTS, Inflation Puts Pressure on Ghost Kitchen Model, https://www.pymnts.com/restaurant-innovation/2023/inflation-puts-
pressure-on-ghost-kitchen-model/ (last visited Feb. 15, 2023).
30 TechCrunch, The next big restaurant chain may not own any kitchens, https://techcrunch.com/2018/10/07/the-next-big-restaurant-
chain-may-not-own-any-kitchens/ (last visited Feb. 15, 2023).
31 Restaurant Dive, Ghost kitchens need to go omnichannel if they want to survive, experts say,
https://www.restaurantdive.com/news/ghost-kitchens-need-to-go-omnichannel-if-they-want-to-survive-experts-say/641555/ (last
visited Feb. 15, 2023).
32 Expert Market Research, United States Online Food Delivery Market Outlook ,
https://www.expertmarketresearch.com/reports/united-states-Online-food-delivery-market (last visited Feb. 15, 2023).
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and tipping habits, with 67 percent saying they’re dining out less and 31 percent tipping less when they
are dining out.33
Ghost kitchens come in all shapes and sizes, with some spaces being shared and others being used by
just one restaurant brand. The three main types are depicted in the following table:34
Type 1 Incubator/Pop-Up Kitchens An incubator/pop-up ghost kitchen is affiliated with a
traditional restaurant but focuses primarily on online
orders and deliveries.
Type 2 Kitchen Pods Kitchen pods are small shipping containers that come
with outfitted kitchens.
Type 3 Commissary/Shared Kitchens Commissary kitchens are shared kitchen spaces
owned and operated by a third-party company or
entrepreneur rather than a restaurant. They usually
house multiple restaurants, brands, or concepts under
one roof, where staff shares everything from
refrigerator space to frying pans.
Miami Pilot Program for App-based Mobile Operations
On March 11, 2021, the City of Miami created a pilot program for previously unregulated “mobile
operating units.” The pilot program defined “mobile operation unit” as a movable stand, cart, vehicle,
truck, van, or trailer through which mobile operations are performed on a parking lot site or on vacant
land, and “delivery food vehicle” is defined as any vehicle used as or in conjunction with a mobile
operation unit operating with app-based meal production for delivery only to be consumed off-
premises.35 The regulations require the mobile operating units to refrain from providing on-site takeout
or dine-in service.
Mobile operating units are required to obtain city permits, and provide information about the number of
participating sites and employees to the city, and to report on the total number of code violations.
Violations are punishable by a fine of $250 for a first offense and $500 for each subsequent offense.
The pilot was renewed on March 24, 2022, for a second year. 36
According to reports, in the year since Miami adopted the pilot program, other cities have followed suit,
including Orlando.37
Other States
In 2020, the U.S. had 1,500 ghost kitchens open across the country.38 It has been reported that ghost
kitchens have continued to open and operate in states such as New Jersey39, California40, Texas 41, and
33 Lending Tree, Nearly 70% of Americans Say They’re Dining Out Less Frequently Due to Inflation, and Almost a Third Are Tipping
Less, https://www.lendingtree.com/credit-cards/study/restaurants -groceries-
inflation/#:~:text=Nearly%207%20in%2010%20(67,impacted%20their%20grocery%20shopping%20habits . (last visited Feb. 16,
2023).
34 Cheetah, 3 Types of Ghost Kitchens and Which One Is the Best Business to Start, https://www.gocheetah.com/blog/types -of-ghost-
kitchens-best-for-you/ (last visited Feb. 17, 2023).
35 City of Miami Ordinance S. 31-51. Food trucks operating on private land.
36 City of Miami, City Commission Agenda March 24, 2022,
http://miamifl.iq m2.co m/ Cit izens/FileOpen.aspx?Type=15&ID=2611&In line=True (last visited Feb. 16, 2023).
37 The Community Paper, Ghost kitchens pilot program passed by the City, https://www.yourcommunitypaper.com/articles/ghost-
kitchens-pilot-program-passed-by-city/ (last visited Feb. 16, 2023).
38 Emma Liem Beckett, Ghost Kitchens Could Be a $1t Global Market by 2030, Says Euromonitor, Restaurant Dive (July 10, 2020),
https://www.restaurantdive.com/news/ghost-kitchens-global-market-euromonitor/581374/ (last visited Feb. 20, 2023).
39 Townsquare Media, Inc., This Restaurant's Rare Ghost Kitchen Is Available in New Jersey, 92.7 WOBM, 92.7 WOBM (Feb. 16,
2023), https://wobm.com/ixp/942/p/pancake-kitchen-cracker-barrel/ (last visited Feb. 20,2023).
40 Iman Palm, Chipotle to Open Spinoff Restaurant in Santa Monica , KTLA News (Feb. 15, 2023), https://ktla.com/news/
california/chipotle-to-open-spinoff-restaurant-in-santa-monica/ (last visited Feb. 20, 2023).
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DATE: 4/13/2023
New York.42 In 2021, the global ghost kitchen market was estimated to be worth approximately $56
billion.43
Currently, the regulation of ghost kitchens among the states appears to primarily be conducted at the
local level. Policymakers are considering how to adapt existing regulations to fit the unique challenges
that ghost kitchens present. Because ghost kitchens do not fit the traditional definition of a restaurant,
government officials are unsure how to regulate them. Depending on their operations, ghost kitchens
may fall under the definition of “food facilities,” which must be registered with the FDA and are subject
to FDA inspections. They also must abide by various safety requirements, including allergy
management, hazard planning, and sanitation.44
If a kitchen is defined as a restaurant, “a facility that prepares and sells food directly to consumers for
immediate consumption,” it is exempt from FDA registration, but still regulated by state law and local
health authorities. Central kitchens that prepare food for a restaurant chain do not fall under the
restaurant exemption unless they sell directly to consumers. 45
Effect of Proposed Changes
The bill requires operators of public food service establishments who provide commissary services to
temporary commercial kitchens to maintain a registry in order to verify that each temporary commercial
kitchen that receives such services is properly licensed.
The bill requires operators of temporary commercial kitchens to permanently affix in a prominent place
on the side of the kitchen, in figures at least 2 inches high and in contrasting colors from the
background, the operator’s public food service establishment license number.
The bill preempts the regulation involving licenses, registrations, permits, and fees of temporary
commercial kitchens to the state. The bill defines "temporary commercial kitchen" as “any kitchen that
is a public food service establishment, used for the preparation of takeout or delivery-only meals
housed in portable structures that are movable from place to place by a tow or are self-propelled or
otherwise axle mounted, that include self-contained utilities, including, but not limited to, gas, water,
electricity, or liquid waste disposal. Such kitchens are subject to all provisions of this chapter except as
may be provided herein. The term does not include a tent.”
The bill clarifies that the local governments’ ability to regulate the operation of a temporary commercial
kitchen other than the regulations described in the preemption are not affected.
The bill authorizes MFDVs and temporary commercial kitchens that are operated on the same premises
as and by a separately licensed public food service establishment to operate during the same hours of
operation as the separately licensed public food service establishment that operates the MFDV or
temporary commercial kitchen.
B. SECTION DIRECTORY:
41 Brandi Addison, Ghost Kitchens Are Taking North Texas by Storm. Here's a Guide to Ghost Kitchens around Grapevine , Dallas
New (May 3, 2022), https://www.dallasnews.com/food/restaurant-news/2022/05/03/ghost-kitchens-are-taking-north-texas-by-storm-
heres-a-guide-to-ghost-kitchens-around-grapevine/ (last visited Feb. 20, 2023).
42 Luke Fortney, This New Manhattan Ghost Kitchen Will Have Di Fara Pizza and a Steak Spot from Bobby Flay , Eater NY, Eater
NY (Feb. 14, 2023), https://ny.eater.com/2023/2/14/23597544/ wonder-manhattan-ghost-kitchen-di-fara-pizza-bobby-flay-steak-nyc.
43 Statista, Ghost Kitchens- Statistics & Facts, Statista Research Department (Nov. 25, 2022),
https://www.statista.com/topics/7563/ghost-kitchens/#:~:text=As%20of%202022%2C%20the%
20market,reach%20223.7%20billion%20by%202027 (last visited Feb. 20, 2023).
44 The Food and Drug Administration, Questions and Answers Regarding Food Facility Registration (Seventh
Edition): Guidance for Industry, https://www.fda.gov/files/food/published/Questions-and-Answers-Regarding-Food-Facility-
Registration-%28Seventh-Edition%29.pdf (last visited Feb. 20, 2023).
45 Id.
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DATE: 4/13/2023
Section 1: amends s. 509.101, F.S.; requiring operators of public food service establishments who
provide commissary services to maintain a temporary commercial kitchen registry;
requiring temporary commercial kitchen operators to display license number.
Section 2: amends s. 509.102, F.S.; defining the term "temporary commercial kitchen"; preempting
regulation of temporary commercial kitchens to the state.
Section 3: provides an effective date of July 1, 2023.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
There may be an increase in revenue due to new a license classification.46
2. Expenditures:
DBPR has stated that there may be an increase in staff and labor to process, review, and approve
license applications and to inspect the temporary commercial kitchens. 47 However, the impact will
likely be an insignificant fiscal impact to the department.
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 owners of temporary commercial kitchens by clearly authorizing
them to operate in the state. Those owners operating temporary commercial kitchens without a license
will be required to pay and obtain a license to continue to operate.
46 Department of Business and Professional Regulation, Agency Analysis of 2023 House Bill 415, pp. 3-4 (January 24, 2023).
47 Id.
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DATE: 4/13/2023
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to require counties or municipalities to spend funds or take
action requiring the expenditure of funds; reduce the authority that counties or municipalities have to
raise revenues in the aggregate; or reduce the percentage of state tax shared with counties or
municipalities.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill requires DBPR to establish rules for the operation of temporary commercial kitchens. Such
broad rulemaking authority may be an improper delegation of legislative authority.
C. DRAFTING ISSUES OR OTHER COMMENTS:
The bill requires DBPR to create certain weight, humidity, disability, water, electrical, plumbing,
mechanical, and wind ratings requirements for the facilities to follow, but does not provide DBPR with
regulatory, licensure, or enforcement authority or requirements.
The bill defines temporary commercial kitchens as portable structures that are movable from place to
place by a tow or are self-propelled or otherwise axle mounted; however, the bill does not include them
in the existing statute for food trucks.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On February 23, 2023, the Regulatory Reform & Economic Development Subcommittee adopted one
amendment and reported the bill favorably as a committee substitute. The committee substitute includes
temporary commercial kitchens in the commissary registry and license display requirements for public food
service establishments. The committee substitute preempts the regulation of temporary commercial
kitchens to the state. The committee substitute also specifies the hours of operation of MFDVs and
temporary commercial kitchens under certain circumstances.
This analysis is drafted to the committee substitute as passed by the Regulatory Reform & Economic
Development Subcommittee.
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DATE: 4/13/2023
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
CS/HB 415 2023
1 A bill to be entitled
2 An act relating to temporary commercial kitchens;
3 amending s. 509.101, F.S.; requiring operators of
4 public food service establishments who provide
5 commissary services to maintain a temporary commercial
6 kitchen registry; requiring temporary commercial
7 kitchen operators to display license numbers; amending
8 s. 509.102, F.S.; defining the term "temporary
9 commercial kitchen"; preempting regulation of
10 temporary commercial kitchens to the state; providing
11 an effective date.
12
13 Be It Enacted by the Legislature of the State of Florida:
14
15 Section 1. Subsection (3) of section 509.101, Florida
16 Statutes, is amended to read:
17 509.101 Establishment rules; posting of notice; food
18 service inspection report; maintenance of guest register; mobile
19 food dispensing vehicle registry.—
20 (3) It is the duty of each operator of a public food
21 service establishment that provides commissary services to
22 maintain a daily registry verifying that each mobile food
23 dispensing vehicle or temporary commercial kitchen that receives
24 such services is properly licensed by the division. In order
25 that such licensure may be readily verified, each mobile food
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26 dispensing vehicle operator or temporary commercial kitchen
27 operator shall permanently affix in a prominent place on the
28 side of the vehicle or kitchen, in figures at least 2 inches
29 high and in contrasting colors from the background, the
30 operator's public food service establishment license number.
31 Prior to providing commissary services, each public food service
32 establishment must verify that the license number displayed on
33 the vehicle or kitchen matches the number on the vehicle or
34 kitchen operator's public food service establishment license.
35 Section 2. Subsections (1), (2), and (3) of section
36 509.102, Florida Statutes, are amended to read:
37 509.102 Mobile food dispensing vehicles; temporary
38 commercial kitchens; preemption.—
39 (1)(a) As used in this section, the term "mobile food
40 dispensing vehicle" means any vehicle that is a public food
41 service establishment and that is self-propelled or otherwise
42 movable from place to place and includes self-contained
43 utilities, including, but not limited to, gas, water,
44 electricity, or liquid waste disposal.
45 (b) As used in this section, the term "temporary
46 commercial kitchen" means any kitchen that is a public food
47 service establishment, used for the preparation of takeout or
48 delivery-only meals housed in portable structures that are
49 movable from place to place by a tow or are self-propelled or
50 otherwise axle mounted, that include self-contained utilities,
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51 including, but not limited to, gas, water, electricity, or
52 liquid waste disposal. Such kitchens are subject to all
53 provisions of this chapter except as may be provided herein. The
54 term does not include a tent.
55 (2)(a) Regulation of mobile food dispensing vehicles, and
56 temporary commercial kitchens, involving licenses,
57 registrations, permits, and fees is preempted to the state. A
58 municipality, county, or other local governmental entity may not
59 require a separate license, registration, or permit other than
60 the license required under s. 509.241, or require the payment of
61 any license, registration, or permit fee other than the fee
62 required under s. 509.251, as a condition for the operation of a
63 mobile food dispensing vehicle or temporary commercial kitchen
64 within the entity's jurisdiction. A municipality, county, or
65 other local governmental entity may not prohibit mobile food
66 dispensing vehicles or temporary commercial kitchens from
67 operating within the entirety of the entity's jurisdiction.
68 (b) Any mobile food dispensing vehicle or temporary
69 commercial kitchen that is operated on the same premises as and
70 by a separately licensed public food service establishment may
71 operate during the same hours of operation as the separately
72 licensed public food service establishment that operates such
73 mobile food dispensing vehicle or temporary commercial kitchen.
74 (3) This section may not be construed to affect a
75 municipality, county, or other local governmental entity's
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CS/HB 415 2023
76 authority to regulate the operation of mobile food dispensing
77 vehicles or temporary commercial kitchens other than the
78 regulations described in subsection (2).
79 Section 3. This act shall take effect July 1, 2023.
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COMMERCE COMMITTEE
CS/HB 415 by Rep. Porras
Temporary Commercial Kitchens
AMENDMENT SUMMARY
April 17, 2023
Amendment 1 by Rep. Porras (between lines 74-78):
• Authorizes temporary commercial kitchens to be used in conjunction with a licensed
permanent food service establishment to supplement the kitchen operations of the
establishment as follows:
o Provides a 60-day operating period for temporary commercial kitchens for
supplementing kitchen operations of a licensed public food service
establishment, and authorizes the Division of Hotels and Restaurants to grant
one 60 day extension upon request.
o Provides a 120-day operating period during a period of renovation, repair, or
rebuild.
Allows operation on the premises of the licensed permanent food service
establishment or off the premises within line of sight not to exceed 1,320
feet from the establishment.
Allows the Division of Hotels and Restaurants to grant additional
extensions of time upon reasonable and reliable demonstration that
additional time is needed to complete the renovation, repair, or rebuild.
• Authorizes temporary commercial kitchens to operate during a state of emergency for
the length of time necessary to repair or rebuild the licensed establishment as follows:
o Must notify the division of its location within 7 days after a natural disaster
renders the structure or the land upon which the establishment is sited
uninhabitable.
o Must notify the division of its location every 90 days thereafter.
• Except as otherwise provided, authorizes temporary commercial kitchens to operate for
no longer than 30 days, and must notify the Division of Hotels and Restaurants within 48
hours of commencing operation.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 415 (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: Commerce Committee
2 Representative Porras offered the following:
3
4 Amendment (with directory and title amendments)
5 Remove lines 74-78 and insert:
6 (3)(a) A temporary commercial kitchen may be used in
7 conjunction with a licensed permanent food service establishment
8 that is licensed under this chapter for the purpose of
9 supplementing the kitchen operations of the licensed permanent
10 food service establishment.
11 1. A temporary commercial kitchen may operate in this
12 capacity on the premises of the licensed permanent food service
13 establishment for 60 consecutive days. The operators of the
14 temporary commercial kitchen may request, and the division may
15 grant, one extension of up to 60 additional consecutive days.
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Page 1 of 4
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 415 (2023)
Amendment No. 1
16 2. During a period of renovation, repair, or rebuilding, a
17 temporary commercial kitchen may operate in this capacity on the
18 premises of the licensed permanent food service establishment or
19 off the premises within line of sight not to exceed 1,320 feet
20 from the licensed permanent food service establishment for a
21 period of 120 days. The division may exercise discretion to
22 grant an additional extension of time upon a reasonable and
23 reliable demonstration by the licensed permanent food service
24 establishment that additional time is needed to complete the
25 renovation, repair, or rebuild.
26 (b) In the event that a licensed permanent food service
27 establishment licensed under this chapter or the land upon which
28 that establishment is sited is rendered uninhabitable due to
29 natural disaster which is the subject of a declared state of
30 emergency, a temporary commercial kitchen may operate on the
31 premises of, or as near as reasonably practicable to, the
32 location of the permanent licensed food service establishment. A
33 temporary commercial kitchen may only operate in this capacity
34 during the period of repair and rebuilding of the permanent
35 establishment with which it is associated. A temporary
36 commercial kitchen operating in this capacity must notify the
37 division of its location within 7 days after a natural disaster
38 renders the structure or the land upon which the establishment
39 is sited uninhabitable and notify the division of its location
40 every 90 days thereafter.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 415 (2023)
Amendment No. 1
41 (c) Except as permitted under paragraphs (a) and (b) and
42 s. 509.352(3), a temporary commercial kitchen may not operate in
43 one location for longer than 30 consecutive days. A temporary
44 commercial kitchen must notify the division within 48 hours of
45 commencing operation in a location.
46 (4)(3) This section may not be construed to affect a
47 municipality, county, or other local governmental entity's
48 authority to regulate the operation of mobile food dispensing
49 vehicles or temporary commercial kitchens other than the
50 regulations described in subsection (2).
51 (5)(4) This section does not apply to any port authority,
52 aviation authority, airport, or seaport.
53
54 -----------------------------------------------------
55 D I R E C T O R Y A M E N D M E N T
56 Remove lines 35-36 and insert:
57 Section 2. Section 509.102, Florida Statutes, is amended
58 to read:
59
60 -----------------------------------------------------
61 T I T L E A M E N D M E N T
62 Remove line 9 and insert:
63 commercial kitchen"; authorizing mobile food
64 dispensing vehicles and temporary commercial kitchens
65 in specified locations to operate during certain
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 415 (2023)
Amendment No. 1
66 hours; providing conditions for operating a temporary
67 kitchen; preempting regulation of
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CS/HB 505
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 505 Insurance
SPONSOR(S): Insurance & Banking Subcommittee, Berfield
TIED BILLS: IDEN./SIM. BILLS: CS/CS/CS/SB 418
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY
CHIEF
1) Insurance & Banking Subcommittee 18 Y, 0 N, As CS Fortenberry Lloyd
2) State Administration & Technology 14 Y, 0 N Perez Topp
Appropriations Subcommittee
3) Commerce Committee Fortenberry Hamon
SUMMARY ANALYSIS
The bill makes the following changes regarding insurance:
Hurricane Modeling: provides that a property insurer may use a weighted or straight average of two or
more approved hurricane models in a rate filing.
Commission on Hurricane Loss Projection Methodology (Commission): provides that designees of
the Executive Director of Citizens Property Insurance Corporation and the Director of the Division of
Emergency Management may be members of the Commission in lieu of the directors.
Mitigation Credits in Residential Property Insurance Rate Filings: allows residential property insurers
to give mitigation credit for compliance with building code-plus standards developed by an independent,
not-for-profit, scientific research organization.
Automatic Withdrawal of Premium:
o modifies the notice requirement for a change in the amount of premium by automatic bank withdrawal
from an increase of any amount to increases greater than $10; and
o changes the number of days’ notice that must be given from 15 days to 10 days to match federal law.
Policy Documents:
o allows the electronic delivery of health insurance policy documents;
o removes requirements regarding paper insurance policy documents; and
o revises notice requirements for certain limited-coverage automobile insurance policies.
Declination of Wind and Contents Coverage: allows policyholders to type their intent to decline wind
and contents coverage in their property insurance policies, rather than requiring them to handwrite it, as is
currently required.
The bill has no impact on state or local government revenues or expenditures. It has an unknown 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 .
STORAGE NAME: h0505d.COM
DATE: 4/15/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Commission on Hurricane Loss Projection Methodology
The Florida Commission on Hurricane Loss Projection Methodology (Commission) is a panel of experts
created to provide “actuarially sophisticated guidelines as standards for projection of hurricane losses
possible, given the current state of actuarial science.” 1 The Commission consists of 12 members
including the Executive Director of Citizens Property Insurance Corporation (Citizens Director) and the
Director of the Division of Emergency Management (Emergency Management Director). 2 However, the
Emergency Management Director has indicated that he is sometimes unavailable to attend the
Commission’s meetings and would like the discretion to send a designee to those meetings. The
Citizens Director has indicated that he would like to be able to send a member of his senior
management team or someone with actuarial experience to attend those meetings.
Effect of the Bill
The bill allows the Emergency Management Director to designate a full-time employee of the Division
of Emergency Management to be a member of the Commission. It also allows the Citizens Director to
designate a full-time employee with either actuarial science experience or senior operations
management experience to be a member of the Commission.
Use of Hurricane Models in Residential Property Insurance Rate Filings
The law regarding the Office of Insurance Regulation’s (OIR) review and approval of residential
property insurance rate filings requires that a rate filing consider mitigation measures that policyholders
undertake to reduce hurricane losses.3 It sets forth the criteria under which OIR may disprove rate
filings, including disproval of rates that it determines to be excessive, inadequate, or unfairly
discriminatory.4 The law also establishes criteria for the Commission’s consideration, and approval, of
hurricane loss models and prescribes how those models affect OIR’s approval of property insurance
rate filings.5
Effect of the Bill
The bill amends the parameters for OIR’s approval or disapproval of rate filings by providing that, with
respect to residential property insurance rate filings, the rate filing may use a modeling indication that is
the weighted or straight average of two or more hurricane loss models found to be accurate or reliable
by the Commission.
Mitigation Credits in Residential Property Insurance Rate Filings
Current law requires residential property insurers to include “positive and negative rate factors that
reflect the manner in which building code enforcement in a particular jurisdiction addresses the risk of
wind damage” in their rate filings filed with, and approved by, OIR. 6 Insurers utilize factors that
statewide organizations develop to indicate how building code enforcement units evaluate risk in
1 S. 627.0628(1)(c), F.S.
2 S. 627.0628(2)(b), F.S.
3 S. 627.062(2)(j), F.S.
4 S. 627.062(2)(b), F.S.
5 Ss. 627.0628-627.06281, F.S.
6 S. 627.0629(2)(b), F.S.
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particular geographical areas.7 However, these factors are often are flawed and not an accurate
depiction of actual building code enforcement activity in a jurisdiction.
Since 2003, residential property insurers have been required to provide credits, discounts, and other
rate differentials to reduce insurance premiums for properties with mitigation features. 8 Mitigation
features are construction techniques used or items installed to protect a structure against windstorm
damage or loss.9 Examples of mitigation features include hurricane shutters, a hip roof, or a specific
type of roof covering.
Code-plus programs help property owners avoid or reduce damage caused by natural hazards and
other risks by implementing additional levels of resilience to hazards beyond those required by building
codes.10 Presently, insurers are unable to submit rating plans for review and approval by OIR that
include mitigation credits for those insureds who comply with code-plus standards established by
independent, not-for-profit, scientific research organizations.11
Effect of the Bill
The bill allows insurers to file a rating plan (plan) with OIR in which the insurer offers additional
windstorm mitigation credits based on standards established by an independent, not-for-profit, scientific
research organization that meets the requirements of the rate filing statute.
Notification of Automatic Withdrawal of Insurance Premiums
Insurers issuing personal lines residential and commercial property policies are required to provide
premium payment options for quarterly and semiannual payments. They may, but are not required to,
offer monthly payment plans.12 Insurers and policyholders may enter into automatic bank withdrawal
agreements for paying insurance premiums.13 Current law requires insurers to provide the policyholder
with 15 days’ advance written notice prior to any automatic bank withdrawal if the premium payment
increases from the previous withdrawal period by any amount.
Federal law gives consumers the option of receiving notice of a change in an automatic bank
withdrawal only when the withdrawal differs from the most recent withdrawal by more than an agreed-
upon amount.14 Federal law also only requires that a policyholder receive 10 days’ notice as opposed
to 15 days’ notice before a change in the amount withdrawn. 15
Effect of the Bill
The bill changes the written notice requirement of any increase in policy premiums to require the notice
only if the increase in policy premiums results in the next automatic withdrawal being increased by
more than $10. The bill also reduces the number of days’ notice required before a change in a
withdrawal from 15 days to 10 days to match federal law.
7 See, e.g., ISO Mitigation, ISO’s Building Code Effectiveness Grading Schedule (BCEGS),
https://www.isomitigation.com/bcegs/ (last visited Mar. 1, 2023). BCEGS is a program that provides these rating factors.
8 See s. 627.0629, F.S.
9 See id.
10 Whole Building Design Guide, Code-Plus Program for Disaster Resistance, https://www.wbdg.org/resources/code-plus-
programs-disaster-resistance (last visited Mar. 1, 2023).
11 See, e.g., Insurance Institute of Business & Home Safety, https://ibhs.org/ (last visited Mar. 1, 2023).
12 S. 627.4035(1)(a), F.S.
13 S. 627.0665, F.S.
14 12 CFR 1005(10)(d).
15 Id.
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Electronic Transmission of Policy Documents
The law requires that an insurance policy be mailed, delivered, or electronically transmitted to an
insured or other person entitled to receive the policy (designated person) within 60 days of the policy
taking effect.16 An insurer may allow a personal lines policyholder to elect delivery of policy documents
by electronic means instead of by mail.17 Electronic delivery of commercial risks constitutes delivery to
the insured or designated person, unless the insured or designated person notifies the insurer that he
or she does not agree to electronic delivery.18 Current law does not include health insurance policies in
the list of policies that may be delivered electronically.
If a policy is delivered electronically, the insurer must include with the policy a notice of the right to
receive the policy by mail rather than electronically.19 Additionally, an insurer must provide a paper
copy of an insurance policy to an insured or designated person upon his or her request. 20
Effect of the Bill
The bill adds health insurance policies, and related documents, to the list of policies for which electronic
delivery is permitted. It also removes requirements regarding the delivery of paper insurance policy
documents.
Declination of Windstorm and Contents Coverage
Under current law, a policyholder may decline windstorm or contents coverage as part of a property
insurance policy.21 However, when a policyholder declines such coverage, the policyholder is required
to write the intent to decline windstorm and contents coverage in his or her own hand.22 This
requirement is particularly antiquated when a policyholder elects to receive policy documents
electronically.
Effect of the Bill
The bill allows policyholders to decline windstorm and contents coverage in their property insurance
policies by typing it, rather than requiring them to handwrite it.
Limited Coverage Notice Requirements
Automobile insurance policies that do not contain coverage for bodily injury and property damage 23
must be stamped on the policy declarations page with the following language in a font larger than the
largest font otherwise used in the declarations page (notice):
THIS POLICY DOES NOT PROVIDE BODILY INJURY AND PROPERTY DAMAGE
LIABILITY INSURANCE OR ANY OTHER COVERAGE FOR WHICH A SPECIFIC
PREMIUM CHARGE IS NOT MADE, AND DOES NOT COMPLY WITH ANY
FINANCIAL RESPONSIBILITY LAW.
The stamping requirement is antiquated and prevents these types of policies from being
delivered electronically.
Effect of the Bill
16 S. 627.421(1), F.S.
17 Id.
18 Id.
19 Id.
20 Id.
21 See s. 627.712, F.S.
22 Id.
23 S. 627.7276, F.S. These limited policies are typically issued to certain antique cars.
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DATE: 4/15/2023
The bill eliminates the requirement that the notice be stamped on the declarations page of limited
coverage automobile policies. Instead, the notice must accompany the declarations page and typed in
a font at least as large as the font used in the declarations page. This change will allow these types of
policies to be delivered electronically.
B. SECTION DIRECTORY:
Section 1. Amends s. 627.062, F.S, relating to rate standards.
Section 2. Amends s. 627.0628, F.S., relating to Florida Commission on Hurricane Loss Projection
Methodology; public records exemption; public meetings exemption.
Section 3. Amends s. 627.0629, F.S., relating to residential property insurance; rate filings.
Section 4. Amends s. 627.0665, F.S., relating to automatic bank withdrawal agreements; notification
required.
Section 5. Amends s. 627.7276, F.S., relating to notice of limited coverage.
Section 6. 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.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may have an unknown positive direct economic impact on the private sector through the
application of mitigation credits to residential property insurance policies.
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DATE: 4/15/2023
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill neither authorizes nor requires administrative rulemaking.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On March 9, 2023, the Insurance & Banking Subcommittee considered the bill, adopted one amendment,
and reported the bill favorably as a committee substitute. The amendment made the following changes to
the bill:
Allows Citizens’ Executive Director to designate a person to serve on the Commission in the
Director’s place and requires such designee to be full-time employee with either actuarial science
experience or senior operations management experience;
Allows the electronic delivery of health insurance policy documents and removes requirements
regarding paper insurance policy documents;
Allows policyholders to decline windstorm and contents coverage in their property insurance
policies by typing it, rather than requiring them to handwrite it, as is currently required; and
Corrects a technical error made in a bill last year.
The analysis is drafted to the committee substitute as passed by the Insurance & Banking Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 505 2023
1 A bill to be entitled
2 An act relating to insurance; amending s. 626.8411,
3 F.S.; correcting a cross-reference; amending s.
4 627.062, F.S.; revising requirements for residential
5 property insurance rate filings; amending s. 627.0628,
6 F.S.; authorizing the appointment of certain designees
7 to the Florida Commission on Hurricane Loss Projection
8 Methodology; providing requirements for such
9 designees; amending s. 627.0629, F.S.; authorizing
10 insurers to file with the Office of Insurance
11 Regulation personal lines residential property
12 insurance rating plans relating to windstorm
13 mitigation construction standards; providing
14 requirements for such filings; amending s. 627.0665,
15 F.S.; revising the timeframe for notices from insurers
16 to insureds of automatic bank withdrawal increases;
17 specifying the increase threshold for such notices;
18 amending s. 627.421, F.S.; authorizing electronic
19 delivery of insurance policy documents for certain
20 health insurance policies, certificates of coverage,
21 and contracts; eliminating requirements for paper
22 delivery of certain insurance policies; amending s.
23 627.712, F.S.; authorizing insurance policyholders to
24 type the intent to decline certain coverage instead of
25 handwriting it; amending s. 627.7276, F.S.; revising
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CS/HB 505 2023
26 the requirements for the notice of certain automobile
27 policies; providing an effective date.
28
29 Be It Enacted by the Legislature of the State of Florida:
30
31 Section 1. Paragraph (d) of subsection (2) of section
32 626.8411, Florida Statutes, is amended to read:
33 626.8411 Application of Florida Insurance Code provisions
34 to title insurance agents or agencies.—
35 (2) The following provisions of part I do not apply to
36 title insurance agents or title insurance agencies:
37 (d) Section 626.172, except for paragraph (2)(e) (2)(f) of
38 that section, relating to agent in full-time charge.
39 Section 2. Paragraph (j) of subsection (2) of section
40 627.062, Florida Statutes, is amended to read:
41 627.062 Rate standards.—
42 (2) As to all such classes of insurance:
43 (j) With respect to residential property insurance rate
44 filings, the rate filing:
45 1. Must account for mitigation measures undertaken by
46 policyholders to reduce hurricane losses.
47 2. May use a modeling indication that is the weighted or
48 straight average of two or more hurricane loss projection models
49 found by the Florida Commission on Hurricane Loss Projection
50 Methodology to be accurate or reliable pursuant to s. 627.0628.
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CS/HB 505 2023
51
52 The provisions of this subsection do not apply to workers'
53 compensation, employer's liability insurance, and motor vehicle
54 insurance.
55 Section 3. Paragraph (b) of subsection (2) of section
56 627.0628, Florida Statutes, is amended to read:
57 627.0628 Florida Commission on Hurricane Loss Projection
58 Methodology; public records exemption; public meetings
59 exemption.—
60 (2) COMMISSION CREATED.—
61 (b) The commission shall consist of the following 12
62 members:
63 1. The insurance consumer advocate.
64 2. The senior employee of the State Board of
65 Administration responsible for operations of the Florida
66 Hurricane Catastrophe Fund.
67 3. The Executive Director of the Citizens Property
68 Insurance Corporation or the director's designee. Such designee
69 must be a full-time employee of the corporation with actuarial
70 science experience or senior operations management experience .
71 4. The Director of the Division of Emergency Management or
72 the director's designee. Such designee must be a full -time
73 employee of the division.
74 5. The actuary member of the Florida Hurricane Catastrophe
75 Fund Advisory Council.
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76 6. An employee of the office who is an actuary responsible
77 for property insurance rate filings and who is appointed by the
78 director of the office.
79 7. Five members appointed by the Chief Financial Officer,
80 as follows:
81 a. An actuary who is employed full time by a property and
82 casualty insurer that was responsible for at least 1 percent of
83 the aggregate statewide direct written premium for homeowner
84 insurance in the calendar year preceding the member's
85 appointment to the commission.
86 b. An expert in insurance finance who is a full-time
87 member of the faculty of the State University System and who has
88 a background in actuarial science.
89 c. An expert in statistics who is a full-time member of
90 the faculty of the State University System and who has a
91 background in insurance.
92 d. An expert in computer system design who is a full -time
93 member of the faculty of the State University System.
94 e. An expert in meteorology who is a full-time member of
95 the faculty of the State University System and who specializes
96 in hurricanes.
97 8. A licensed professional structural engineer who is a
98 full-time faculty member in the State University System and who
99 has expertise in wind mitigation techniques. This appointment
100 shall be made by the Governor.
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101 Section 4. Subsection (9) is added to section 627.0629,
102 Florida Statutes, to read:
103 627.0629 Residential property insurance; rate filings. —
104 (9) An insurer may file with the office a personal lines
105 residential property insurance rating plan that provides
106 justified premium discounts, credits, or other rate
107 differentials based on windstorm mitigation construction
108 standards developed by an independent, nonprofit scientific
109 research organization, if such standards meet the requirements
110 of this section. Such plan must describe the manner in which the
111 insurer will document the existence of the mitigation features
112 and premium discounts, credits, or other rate differentials
113 created under such plan.
114 Section 5. Section 627.0665, Florida Statutes, is amended
115 to read:
116 627.0665 Automatic bank withdrawal agreements;
117 notification required.—Any insurer licensed to issue insurance
118 in the state who has an automatic bank withdrawal agreement with
119 an insured party for the payment of insurance premiums for any
120 type of insurance shall give the named insured at least 10 15
121 days advance written notice of any increase in policy premiums
122 which results in the next automatic bank withdrawal being
123 increased by more than $10. Such notice must be provided before
124 prior to any automatic bank withdrawal containing the of an
125 increased premium.
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CS/HB 505 2023
126 Section 6. Subsection (1) of section 627.421, Florida
127 Statutes, is amended to read:
128 627.421 Delivery of policy.—
129 (1) Subject to the insurer's requirement as to payment of
130 premium, every policy shall be mailed, delivered, or
131 electronically transmitted to the insured or to the person
132 entitled thereto not later than 60 days after the effectuation
133 of coverage. Notwithstanding any other provision of law, an
134 insurer may allow a policyholder of personal lines insurance to
135 affirmatively elect delivery of the policy documents, including,
136 but not limited to, policies, endorsements, notices, or
137 documents, by electronic means in lieu of delivery by mail.
138 Electronic transmission of a policy, related notices, and other
139 documents for individual and group health insurance policies or
140 certificates of coverage pursuant to parts VI and VII,
141 respectively; health maintenance contracts or certificat es of
142 coverage pursuant to part I of chapter 641; prepaid limited
143 health service contracts pursuant to part I of chapter 636; and
144 for commercial risks, including, but not limited to, workers'
145 compensation and employers' liability, commercial automobile
146 liability, commercial automobile physical damage, commercial
147 lines residential property, commercial nonresidential property,
148 farmowners insurance, and the types of commercial lines risks
149 set forth in s. 627.062(3)(d), constitutes delivery to the
150 insured or to the person entitled to delivery, unless the
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CS/HB 505 2023
151 insured or the person entitled to delivery communicates to the
152 insurer in writing or electronically that he or she does not
153 agree to delivery by electronic means. Electronic transmission
154 shall include a notice to the insured or to the person entitled
155 to delivery of a policy of his or her right to receive the
156 policy via United States mail rather than via electronic
157 transmission. A paper copy of the policy shall be provided to
158 the insured or to the person entitled to delivery at his or her
159 request.
160 Section 7. Paragraph (a) of subsection (2) and subsection
161 (3) of section 627.712, Florida Statutes, are amended to read:
162 627.712 Residential windstorm coverage required;
163 availability of exclusions for windstorm or contents.—
164 (2) A property insurer must make available, at the option
165 of the policyholder, an exclusion of windstorm coverage.
166 (a) The coverage may be excluded only if:
167 1. When the policyholder is a natural person, the
168 policyholder personally writes or types and provides to the
169 insurer the following statement in his or her own handwriting
170 and signs his or her name, which must also be signed by every
171 other named insured on the policy, and dated: "I do not want the
172 insurance on my (home/mobile home/condominium unit) to pay for
173 damage from windstorms. I will pay those costs. My insurance
174 will not."
175 2. When the policyholder is other than a natural person,
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CS/HB 505 2023
176 the policyholder provides to the insurer on the policyholder's
177 letterhead the following statement that must be signed by the
178 policyholder's authorized representative and dated: "...(Name of
179 entity)... does not want the insurance on its ...(type of
180 structure)... to pay for damage from windstorms. ...(Name of
181 entity)... will be responsible for these costs. ...(Name of
182 entity's)... insurance will not."
183 (3) An insurer issuing a residential property insurance
184 policy, except for a condominium unit owner policy or a tenant
185 policy, must make available, at the option of the p olicyholder,
186 an exclusion of coverage for the contents. The coverage may be
187 excluded only if the policyholder personally writes or types and
188 provides to the insurer the following statement in his or her
189 own handwriting and signs his or her signature, which must also
190 be signed by every other named insured on the policy, and dated:
191 "I do not want the insurance on my (home/mobile home) to pay for
192 the costs to repair or replace any contents that are damaged. I
193 will pay those costs. My insurance will not."
194 Section 8. Section 627.7276, Florida Statutes, is amended
195 to read:
196 627.7276 Notice of limited coverage.—
197 (1) An automobile policy that does not contain coverage
198 for bodily injury and property damage must include a notice be
199 clearly stamped or printed to the effect that such coverage is
200 not included in the policy in the following manner:
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201 "THIS POLICY DOES NOT PROVIDE BODILY INJURY AND PROPERTY DAMAGE
202 LIABILITY INSURANCE OR ANY OTHER COVERAGE FOR WHICH A SPECIFIC
203 PREMIUM CHARGE IS NOT MADE, AND DOES NOT COMPLY WITH ANY
204 FINANCIAL RESPONSIBILITY LAW."
205 (2) This notice legend must accompany appear on the policy
206 declarations declaration page and on the filing back of the
207 policy and must be printed in a contrasting color from that used
208 on the policy and in type size at least as large as larger than
209 the largest type size used on the declarations page in the text
210 thereof, as an overprint or by a rubber stamp impression .
211 Section 9. This act shall take effect July 1, 2023.
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COMMERCE COMMITTEE
CS/HB 505 by Rep. Berfield
Relating to Insurance
AMENDMENT SUMMARY
April 17, 2023
Amendment 1 by Rep. Berfield (Line 205): The amendment:
• Revises limited motor vehicle insurance notice requirements to conform to the Senate.
• Changes the circumstances under which a livery must provide insurance covering a
renter.
• Establishes that, when a local governmental entity is a member of a group self-insurance
fund, only an elected official of the entity may be the entity’s representative on the self-
insurer’s governing body.
• Changes property insurance deductible requirements for policies providing dwelling
limits over $1 million.
• Provides an additional exception to unearned premium reserve requirements for service
agreement companies.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 505 (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: Commerce Committee
2 Representative Berfield offered the following:
3
4 Amendment (with title amendment)
5 Remove lines 205-210 and insert:
6 (2) This notice legend must appear on the policy
7 declaration page and on the filing back of the policy and be
8 printed in bold type a contrasting color from that used on the
9 policy and in type larger than the largest type used in the text
10 thereof, as an overprint or by a rubber stamp impression .
11 Section 9. Subsection (7) of section 327.54, Florida
12 Statutes, is amended to read:
13 327.54 Liveries; safety regulations; penalty.—
14 (7) A livery may not lease or rent or offer to lease or
15 rent any livery vessel unless the livery: first
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 505 (2023)
Amendment No. 1
16 (a) Obtains and carries in full force and effect a policy
17 from a licensed insurance carrier in this state which insures
18 the livery and the renter against any accident, loss, injury,
19 property damage, or other casualty caused by or resulting from
20 the operation of the livery vessel. The insurance policy must
21 provide coverage of at least $500,000 per person and $1 million
22 per event. The livery shall have proof of such insurance
23 available for inspection at the location where livery vessels
24 are being leased or rented, or offered for lease or rent, and
25 shall provide to each renter the insurance carrier's name and
26 address and the insurance policy number; and
27 (b) Either:
28 1. Obtains and carries in full force and effect a policy
29 from a licensed insurance carrier in this state which insures
30 the renter in the same manner and amounts of the policy obtained
31 by the livery under paragraph (a) and provides to each renter
32 the insurance carrier's name and address and the insurance
33 policy number; or
34 2. Presents the renter with the opportunity to purchase
35 coverage which insures the renter against any accident, loss,
36 injury, property damage, or other casualty caused by or
37 resulting from the operation of the livery vessel of at least
38 $500,000 per person and $1 million per event. If a renter
39 chooses not to purchase the coverage, the livery must obtain a
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 505 (2023)
Amendment No. 1
40 signed acknowledgement from the renter that the opportunity to
41 purchase coverage was declined.
42
43 This subsection does not apply to human-powered vessels.
44 Section 10. Section 1. Subsection (12) is added to
45 section 624.4621, Florida Statutes, to read:
46 624.4621 Group self-insurance funds.—
47 (12) For any local governmental entity that is a member of
48 a self-insurer established under this section, only an elected
49 official of the local governmental entity may be the local
50 governmental entity's representative on the self-insurer's
51 governing body.
52 Section 11. Paragraph (d) of subsection (3) of section
53 627.701, Florida statutes, is amended to read:
54 627.701 Liability of Insureds; coinsurance; deductibles.—
55 (3)
56 (d) For the following policies, the following alternative
57 deductible amounts are authorized:
58 1. With respect to a policy covering a risk with dwelling
59 limits of $250,000 or more, the insurer need not offer the $500
60 hurricane deductible as required by paragraph (a), but must,
61 except as otherwise provided in this subsection, offer the other
62 hurricane deductibles as required by paragraph (a).
63 2. With respect to a policy covering a risk with dwelling
64 limits of $1 million or more, but less than $3 million, the
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 505 (2023)
Amendment No. 1
65 insurer may, in lieu of offering the 2 percent deductible as
66 required by paragraph (a), offer a deductible amount applicable
67 to hurricane losses equal to 3 percent of the policy dwelling
68 limits.
69 3. With respect to a policy covering a risk with dwelling
70 limits of $3 million or more, the insurer need not offer the 2
71 percent deductible as required by paragraph (a), but must,
72 except as otherwise provided by this subsection, offer the other
73 hurricane deductibles as required by paragraph (a).
74 Section 12. Paragraph (b) of subsection (8) of section
75 634.041, Florida Statutes, is amended to read:
76 634.041 Qualifications for license.—To qualify for and
77 hold a license to issue service agreements in this state, a
78 service agreement company must be in compliance with this part,
79 with applicable rules of the commission, with related sections
80 of the Florida Insurance Code, and with its charter powers and
81 must comply with the following:
82 (8)
83 (b) A service agreement company does not have to establish
84 and maintain an unearned premium reserve if it secures and
85 maintains contractual liability insurance in accordance with the
86 following:
87 1. Coverage of 100 percent of the claim exposure is
88 obtained from an insurer approved by the office, which holds a
89 certificate of authority under s. 624.401 to do business within
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 505 (2023)
Amendment No. 1
90 this state, or secured through a risk retention group, which is
91 authorized to do business within this state under s. 627.943 or
92 s. 627.944. Such insurer or risk retention group must maintain a
93 surplus as regards policyholders of at least $15 million.
94 2. If the service agreement company does not meet its
95 contractual obligations, the contractual liability insurance
96 policy binds its issuer to pay or cause to be paid to the
97 service agreement holder all legitimate claims and cancellation
98 refunds for all service agreements issued by the service
99 agreement company while the policy was in effect. This
100 requirement also applies to those service agreements for which
101 no premium has been remitted to the insurer.
102 3. If the issuer of the contractual liability policy is
103 fulfilling the service agreements covered by the contractual
104 liability policy and the service agreement holder cancels the
105 service agreement, the issuer must make a full refund of
106 unearned premium to the consumer, subject to the cancellation
107 fee provisions of s. 634.121(3). The sales representative and
108 agent must refund to the contractual liability policy issuer
109 their unearned pro rata commission.
110 4. The policy may not be canceled, terminated, or
111 nonrenewed by the insurer or the service agreement company
112 unless a 90-day written notice thereof has been given to the
113 office by the insurer before the date of the cancellation,
114 termination, or nonrenewal.
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Bill No. CS/HB 505 (2023)
Amendment No. 1
115 5. The service agreement company must provide the office
116 with the claims statistics.
117 6. A policy issued in compliance with this subparagraph
118 may either pay 100 percent of claims as they are incurred, or
119 100 percent of claims due in the event of the failure of the
120 service agreement company to pay such claims when due.
121
122 All funds or premiums remitted to an insurer by a motor vehicle
123 service agreement company under this part shall remain in the
124 care, custody, and control of the insurer and shall be counted
125 as an asset of the insurer; provided, however, this requirement
126 does not apply when the insurer and the motor vehicle service
127 agreement company are affiliated companies and members of an
128 insurance holding company system. If the motor vehicle servi ce
129 agreement company chooses to comply with this paragraph but also
130 maintains a reserve to pay claims, such reserve shall only be
131 considered an asset of the covered motor vehicle service
132 agreement company and may not be simultaneously counted as an
133 asset of any other entity.
134
135
136 -----------------------------------------------------
137 T I T L E A M E N D M E N T
138 Remove line 27 and insert:
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 505 (2023)
Amendment No. 1
139 policies; amending s. 327.54, F.S.; providing circumstances when
140 liveries must obtain and provide insurance to renters; providing
141 renters the opportunity to purchase insurance covering livery
142 vessels; amending s. 624.4621, F.S.; specifying a qualification
143 for a local governmental entity's representative on a self -
144 insurer's governing body; amending s. 627.701, F.S.; revising
145 and specifying alternative hurricane deductible amounts for
146 personal lines residential property insurance policies covering
147 risks with specified dwelling limits; amending s. 634.401, F.S.;
148 revising the definition of the term "manufacturer"; providing an
149 effective date.
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CS/CS/HB 591
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/HB 591 Social Media Protection for Minors
SPONSOR(S): Choice & Innovation Subcommittee, Regulatory Reform & Economic Development
Subcommittee, Rayner-Goolsby and others
TIED BILLS: None. IDEN./SIM. BILLS: SB 792
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform & Economic Development 13 Y, 0 N, As CS Wright Anstead
Subcommittee
2) Choice & Innovation Subcommittee 14 Y, 0 N, As CS McDaniel Sleap
3) Commerce Committee Wright Hamon
SUMMARY ANALYSIS
Social media platforms are a computer-based technology that facilitate the sharing of ideas, thoughts, and
information through virtual communities to allow electronic communication of content. Social media use by children
can have positive and negative influences, and providing them with information and external controls can help
prevent harmful effects.
The bill defines “social media platform” as a digital platform operating in the state mainly accessed by children under
the age of 18 that offers forms of electronic communication through which users are permitted to create online
communities to share information, ideas, personal messages, and other content.
Beginning January 1, 2024, the bill requires social media platforms to:
Disclose policies, using clear language suited to children, related to:
o Content moderation.
o Addictive design or deceptive pattern features, including autoplay or infinite scroll.
o Manipulated photographs or digital images.
o Consideration of best interests of minors when designing, developing, and providing services.
o Protections against harmful behaviors, such as bullying and threats of violence.
o Collection or sale of personal information of children, including biometrics and geolocation data.
Provide clear access to the following:
o Resources for law enforcement, suicide prevention, and domestic violence prevention services.
o Protective measures such as screen time limitations and other parental settings.
o Reporting mechanisms related to harmful behaviors, such as bullying and threats of violence.
Require children to read and accept a disclaimer on the potential harms of using social media at log in.
The bill requires the above operating requirements to be on the social media platform’s Internet homepage, platform
user login page, or in a clearly labeled, conspicuous, and readily accessible link contained on such page.
The bill allows social media platforms to post a statement on their website confirming that it has complied with the
operating requirements. If a social media platform does not have such a statement on their website, then all K -12
schools operating in the state that accept state funding may not use or have an account on such social media
platform.
The bill prohibits a public K-12 school from requiring students to participate in social media platforms related to
school-sponsored educational activities. Schools may still require student use of portal, email, and message board
accounts used for official business with the school.
The bill will have no fiscal impact on state or local governments.
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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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Social Media Platforms
Generally, a social media platform is a computer-based technology that facilitates the sharing of ideas,
thoughts, and information through virtual networks and communities. Social media is Internet-based
and gives users quick electronic communication of content, such as personal information, videos, and
photos. Users engage with social media via a computer, tablet, or smartphone via web-based software
or applications.1
Effects of Social Media on Children
Generally, social media use by children can have both positive and negative effects on their health.2
Some potential safety risks of social media use include:3
Exposure to harmful or inappropriate content.
Exposure to dangerous people.
Cyberbullying.
Oversharing personal information.
Exposure to excessive advertisements.
Privacy concerns, including the collection of data about minors.
Identity theft or being hacked.
Interference with sleep, exercise, homework, or family activities.
While children generally become more attuned to social interactions as they enter adolescence, those
who are frequent, early social media users become particularly sensitive to anticipating social risks and
rewards from their peers, according to a study published in JAMA Pediatrics.4
The researchers found that “habitual” social media users, or those who checked their social feeds 15
times a day or more, responded quicker and more intensely to perceived good or bad emotions from
peers, compared to students who checked once a day or less. The areas of the brain associated with
motivation and cognitive control became more active among the habitual students when expecting
social rewards and punishments. The students who used little social media reacted less strongly to
social cues over the same time period.5
Another study in the Journal of Adolescent Health found that 9- and 10-year-olds who spent hours a
day playing video games or watching online algorithm-based videos had a higher risk of developing
obsessive-compulsive disorders.6
1 Maya Dollarhide, Social Media: Definition, Effects, and List of Top Apps, Investopedia.com,
https://www.investopedia.com/terms/s/social-media.asp (last visited Mar. 22, 2023).
2
Mayo Clinic Staff, Teens and social media use: What's the impact?, Mayo Foundation for Medical Education and Research,
https://www.mayoclinic.org/healthy-lifestyle/tween-and-teen-health/in-depth/teens-and-social-media-use/art-20474437 (last visited Mar.
22, 2023).
3 Loyola Medicine, Social Media Safety for Kids and Teens, https://www.loyolamedicine.org/about-us/blog/social-media-safety-kids-
teens, (last visited Mar. 22, 2023)
4 Sarah D. Sparks, Preteens’’ Social Media Hab its Could Be Changing Their Brains, Education Week, Jan. 6, 2023,
https://www.edweek.org/leadership/preteens-social-media-habits-could-be-changing-their-brains/2023/01 (last visited Mar. 22, 2023);
Maria T. Maza, BS; Kara A. Fox, MA; Seh-Joo Kwon, BS; et al, Association of Hab itual Checking Behaviors on Social Media With
Longitudinal Functional Brain Development, JAMA Pediatrics, Jan. 3, 2023, https://jamanetwork.com/journals/jamapediatrics/article-
abstract/2799812 (last visited Mar. 22, 2023).
5 Maria T. Maza, supra note 4.
6 Id; Jason M. Nagata, M.D., M.Sc.; Jonathan Chu; Gabriel Zamora; Caitlin R. Costello, M.D.; Stuart B. Murray, D.Clin.Psych., Ph. D.;
Fiona C. Baker, Ph.D.; Screen Time and Ob sessive-Compulsive Disorder Among Children 9–10 Years Old: A Prospective Cohort
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In 2021, the Wall Street Journal reported internal research showing that Instagram conducted online
surveys, diary studies, focus groups and large-scale questionnaires, which showed that 32% of
teenage girls reported that Instagram made them have a worse body image. Of research participants
who experienced suicidal thoughts, 13% of British teens and 6% of American teens directly linked their
interest in suicide to Instagram.7
Recently, U.S. Surgeon General Vivek Murthy remarked that 13 years old is “too early” for children to
use social media, despite most social media companies allowing 13 year olds to use their platforms. In
early adolescence, kids are still “developing their identity, their sense of self,” Murthy said on CNN’s
“Newsroom” on Jan. 29. He stated that “the skewed, and often distorted, environment of social media
often does a disservice to many of those children.” 8
However, social media can allow teens to create online identities, communicate with others, and build
social networks, which can provide teens with valuable support, especially helping those who
experience exclusion. Social media can expose teens to current events, allow them to interact across
geographic barriers, and teach them about a variety of subjects, including healthy behaviors. Also,
social media that is humorous or provides a meaningful connection to peers may help teens avoid
depression.9
In 2022, the Pew Research Center conducted a survey asking teens of their views on social media.
Generally, they credit social media for helping to build stronger friendships and exposing them to a
more diverse world, but they express concern that these sites lead to drama and social pressure. 10
Safety Measures and Parental Controls
Providing children with information on ways to more safely use social media may decrease the harm
they experience. Having conversations about social media, its benefits, and its risks, may help promote
positive social media usage.11
Also, parental controls can help protect children from inappropriate content, cyberbullying and other
online safety issues. Generally, parental controls are a group of settings that put a parent in control of
what content a child can see.12 Many websites, games, software, devices, and user interfaces offer the
optional use of parental controls. Examples of parental controls include blocking websites, filtering
content, imposing limits on screen time, allowing parents to monitor online activity, location tracking,
and disabling Wi-Fi.13
Study; Journal of Adolescent Health, Dec. 12, 2022; https://www.jahonline.org/article/S1054-139X(22)00722-4/fulltext (last visited Mar.
22, 2023).
7 Taylor Hatmaker, Faceb ook knows Instagram harms teens. Now, its plan to open the app to kids looks worse than ever ,
TechCrunch.com, https://techcrunch.com/2021/09/16/facebook-instagram-for-kids-mosseri-wsj-teen-girls/ (last visited Mar. 22, 2023).
8 Lauraine Langreo, EducationWeek, Surgeon General: Kids Under 14 Should Not Use Social Media, Feb. 2, 2023,
https://www.edweek.org/leadership/surgeon-general-kids-under-14-should-not-use-social-media/2023/02 (last visited Mar. 22, 2023).
9 Mayo Clinic, supra note 2.
10 Pew Research Center, Teens’ Social Media Hab its and Experiences, https://www.pewresearch.org/internet/2018/11/28/teens-social-
media-habits-and-experiences/, (last visited Mar. 22, 2023).
11 WebMD Editorial Contributors, How to Talk to Your Kids Ab out Social Media, WebMD.com, https://www.webm d.com/parenting/how-
to-talk-to-kids-about-social-media (last visited Mar. 22, 2023).
12 Internetmatters.org, Parental Controls, https://www.internetmatters.org/parental-controls/ (last visited Mar. 22, 2023).
13 Caroline Knorr, Commonsensemedia.org, Parents’ Ultimate Guide to Parental Controls,
https://www.commonsensemedia.org/articles/parents -ultimate-guide-to-parental-controls (last visited Mar. 22, 2023).
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Laws Protecting Children Online
Children’s Online Privacy Protection Act (COPPA)
The Children’s Online Privacy Protection Act (COPPA) 14 and its related rules, is a federal law that
regulates websites’ collection and use of children’s information. The operator of a website or online
service that is directed to children, or that has actual knowledge that it collects children’s personal
information (covered entities), must comply with requirements regarding data collection and use,
privacy policy notifications, and data security.
A covered entity may not collect personal information from a child under the age of 13 without the prior,
verifiable consent of his or her parent.15
COPPA requires covered entities to:16
• Give parents direct notice of their privacy policies, including a description of their data collection
and sharing practices;
• Post a clear link to their privacy policies on their home page and at each area of their website
where they collect personal information from children;
• Institute procedures to protect the personal information that they hold;
• Ensure that any third party with which they share collected personal information implements the
same protection procedures; and
• Delete children’s personal information after the purpose for its retention has been fulfilled.
Violations of COPPA are deemed an unfair or deceptive act or practice and may therefore be
prosecuted by the FTC. COPPA also authorizes state attorneys general to enforce violations that affect
residents of their states. There is no criminal prosecution or private right of action provided for under
COPPA.17
California Age-Appropriate Design Code Act
In 2022, California adopted the California Age-Appropriate Design Code Act (CAADCA),18 legislation
modelled on the United Kingdom’s Age Appropriate Design Code,19 which requires online platforms to
adhere to strict default privacy and safety settings that protect the best interest of children.20 CAADCA
covers children under 18 years of age and will be effective July 1, 2024. 21
CAADCA requires certain businesses that provide an online service, product, or feature that is likely to
be accessed by children to comply with several new requirements and restrictions, including:22
Prohibitions on using any personal information that it knows or should know is materially
detrimental to a child’s physical or mental health and/or wellbeing; and
Prohibitions on obscuring user interface features to deliberately defeat consent or manipulate
children into providing unnecessary personal information, otherwise called “dark patterns.”
Such businesses must complete a Data Protection Impact Assessment for any new feature they wish to
offer to the public if it is likely to be accessed by children, which will determine if any dark patterns are
14 16 C.F.R. pt. 312.
15 15 U.S.C. ss. 6502(a)-(b).
16
See, Federal Trade Commission, General Questions Ab out the COPPA Rule: What is the Children’s Online Privacy Protection Rule?,
https://www.ftc.gov/tips -advice/business-center/guidance/complying-coppa-frequently-asked-questions-0 (last visited Mar. 22, 2023).
17 Id.
18 Cal. Civil Code § 1798.99.28-.35
19 5Rights Foundation, California follows UK lead as child data protection law is passed , https://5rightsfoundation.com/in-
action/california-follows-uk-lead-as-child-data-protection-law-is-passed.html (last visited Mar. 22, 2023).
20 Office of Governor Gavin Newsome, Governor Newsom Signs First-in-Nation Bill Protecting Children’s Online Data and Privacy,
https://www.gov.ca.gov/2022/09/15/governor-newsom-signs-first-in-nation-bill-protecting-childrens-online-data-and-privacy/ (last visited
Mar. 22, 2023).
21 Cal. Civil Code § 1798.99.28-.35
22 Briana Kelly, Nelson Mullins Riley & Scarborough LLP, State of California Passes Bill to Protect Children Online, Jan. 26, 2023,
https://www.nelsonmullins.com/idea_exchange/alerts/privacy_and_data_security_alert/all/state -of-california-passes-bill-to-protect-
children-online (last visited Mar. 22, 2023).
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employed, if there is an asymmetrical reward, or if targeted advertisements are deployed in a way that
could harm or exploit children.23
Required Instruction in Florida Schools
Under Florida’s Constitution, unless otherwise voted upon by electors, each county constitutes a school
district.24 In Florida, there are 67 school districts to match the 67 counties in the state. 25 The Florida
Constitution further states that each school district must have a school board composed of five or more
members.26 The school boards operate, control, and supervise all free public schools within the school
district and determine the rate of school district taxes within constitutional limits. 27 The powers and
duties of the district school board are further set forth in law. 28
The law requires each district school board to provide all courses required for middle grades promotion,
high school graduation, and appropriate instruction designed to ensure that students meet State Board
of Education adopted standards 29 in the following subject areas:
reading and other language arts;
mathematics;
science;
social studies;
foreign languages;
health and physical education; and
the arts.30
In addition, the law identifies specific topics a teacher must teach. 31 One such topic is comprehensive
age-appropriate and developmentally appropriate K-12 instruction on health education that addresses
concepts of community health, consumer health, environmental health, and family life, including:
injury prevention and safety;
Internet safety;
nutrition;
personal health;
prevention and control of disease;
substance use and abuse; and
prevention of child sexual abuse, exploitation, and human trafficking. 32
Teachers must teach the topics specified in law efficiently and faithfully, using books and materials
meeting the highest standards for professionalism and historical accuracy, following the prescribed
courses of study, and employing approved methods of instruction. 33 Unless otherwise specified, the law
generally does not prescribe grade level, instructional hours, or instructional materials requirements for
these topics.
23 Id.
24 Art. IX, s. 4(a), Fla. Const.; s. 1001.30, F.S. Two or more contiguous counties, upon vote of the electors of each county pur suant to
law, may be combined into one school district.
25
Florida Department of Education, Pub lic Schools/Districts, https://web03.fldoe.org/Schools/schoolmap_text.asp (last visited Feb. 20,
2023). The Florida School for the Deaf and Blind, the Florida Virtual School, and the university laboratory schools are consi dered
independent school districts but their governing boards are not elected.
26 Art. IX, s. 4(a), Fla. Const.
27 Art. IX, s. 4(b), Fla. Const.
28 Sections 1001.41 and 1001.42, F.S.
29 In 2020, the State Board of Education adopted new standards for English language arts and mathematics, called the Benchmarks for
Excellent Student Thinking (B.E.S.T.) Standards. The English language arts standards implementation began with the 2021 -2022
school year and implementation of the math standards began in the 2022 -2023 school year. Rule 6A-1.09401, F.A.C.
30 Section 1003.42(1)(a), F.S.
31 Section 1003.42(2)(a)-(t), F.S.
32 Section 1003.42(2)(n)1.a.-g., F.S.
33 Section 1003.42(2), F.S.
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While not required, an elective course on social media34 is available in CPALMS.35 A school may offer
this social media course to enable students in grades 9 through 12 to develop fundamental skills in the
use of social media across print, multimedia, web, and broadcast platforms, including ethical and legal
uses. The content of the elective course should include, but not be limited to, the following: 36
Demonstrating entry-level skills in digital communication and packaging them across the
platforms/mediums of print, multimedia, online, and broadcast;
Demonstrating fundamental skills in social media platforms and their uses; expressing social
connections with maturity and complexity appropriate to writer, audience, purpose, and context;
Using fundamental research skills and networking formats;
Collaborating amongst peers; and
Using effective listening, speaking, and viewing strategies with an emphasis on the use of
evidence to support or refute a claim in multimedia presentations, class discussions, and
extended text discussions.
Effect of the Bill
The bill defines “social media platform” or “platform” to mean a digital platform operating in the state
predominantly accessed by platform users who are under the age of 18 that offers forms of electronic
communication through which such platform users are permitted to create online communities to share
information, ideas, personal messages, and other content.
Beginning January 1, 2024, the bill requires social media platforms to:
Disclose the following social media platform policies, in a manner that is clearly, concisely,
prominently, and understandably written, using clear language suited to the age of users likely
to routinely access the platform without unrelated, confusing, or contradictory materials:
o The content moderation policies used by the social media platform for content on the
platform.
o Whether the social media platform uses or allows the use of addictive design or
deceptive pattern features including autoplay or infinite scroll.
o Whether the social media platform allows manipulated photographs or digital images to
be shared on the platform.
o Whether the social media platform considers the best interests of minors when
designing, developing, and providing services.
o The methodology the social media platform uses to consider the best interests of minors
when designing, developing, and providing services.
o The policies and protections used by the social media platform to protect against harmful
behaviors, such as bullying, harassment, and threats of violence or self-harm.
o Whether the platform collects or sells personal information of platform users who are
under the age of 18, including personal identifiers, biometrics, and geolocation data. If
such personal information is collected, the platform must disclose the type of personal
information is collected and the purpose for such, and if such personal information is
sold, the platform must disclose to whom the information is sold.
Provide clear access to the following:
o Zip code-based references to local resources for law enforcement, suicide prevention,
and domestic violence prevention services.
o Protective measures such as screen time limitations, data usage limitations, content
filters, and other parental settings.
o Reporting mechanisms related to harmful behaviors, such as bullying, harassment, and
threats of violence or self-harm
34 CPALMS, Course, Social Media 1 (#1006375), https://www.cpalms.org/PreviewCourse/Preview/17758, (last visited Mar. 22, 2023).
35 CPALMS is the State of Florida’s official source for standards information and course descriptions. It provides access to tho usands of
standards-aligned, free, and high-quality instructional/educational resources that have been developed specifically for the standards
and vetted through a rigorous review process. CPALMS, Ab out CPALMS, http://www.cpalms.org/CPALMS/about_us.aspx, (last visited
Mar. 22, 2023).
36 Id.
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The bill requires the above operating requirements to be on the social media platform’s Internet
homepage or platform user login page or through a clearly labeled, conspicuous, and readily accessible
link contained on such page.
The bill requires, at the time of log in, and before obtaining access to the platform, a social media
platform to require platform users who are under the age of 18 to read and accept a disclaimer which
must be in substantially the following form:
This application may be harmful to your mental health and may use design
features that have addictive qualities or present unverified information, or
that may be manipulated by [insert platform name] or others for your
viewing. This application may also collect your personal data to further
manipulate your viewable content and may share your personal data with
others.
The bill prohibits a public K-12 school from:
Using or having an account on a social media platform that does not have a compliance
statement on its Internet homepage or platform user login page.
Requiring students, regardless of age, to register, enroll, or participate in a social media
platform as a means to access information, materials, or resources related to school-sponsored
educational activities. Schools may still require student use of portal, email, and message board
accounts used for official business with the school.
The bill provides an effective date of July 1, 2023.
B. SECTION DIRECTORY:
Section 1: Creates s. 501.174, F.S.; providing a definition; requiring social media platforms to
disclose specified policies and provide specified resources, measures, and disclaimers;
authorizing social media platforms to post specified compliance statements on their
Internet homepage or platform user login page; prohibiting certain schools from using or
having an account on certain social media platforms and from requiring students to
register, enroll, or participate in social media platforms for educational purposes;
providing applicability.
Section 2: Provides an effective date.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
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The bill will require social media platforms to expend resources to develop standards and mechanisms
to comply with the bill.
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.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On March 9, 2023, the Regulatory Reform & Economic Development Subcommittee adopted an
amendment and reported the bill favorably as a committee substitute. The committee substitute:
Defined “social media platform” as an online platform with users that are predominantly children.
Required social media platforms to clearly post on their website certain user and moderation
policies related to actions that may cause harms to children.
Required social media platforms to provide access to resources and content c ontrols to help
prevent harm to children.
Allowed social media platforms to post a statement on their website confirming that it has
complied with the operating requirements.
Prohibited certain K-12 schools from having social media accounts on platforms that do not
contain a statement confirming compliance.
Prohibited certain K-12 schools from requiring students to use social media as a part of their
curriculum.
On March 27, 2023, the Choice & Innovation Subcommittee adopted one amendment and reported the bill
favorably as a committee substitute. The amendment prohibits public K-12 schools, instead of all K-12
schools, from using certain social media platforms and requiring students to register or participate in a
social media platform for educational activities.
The bill analysis is drafted to the committee substitute adopted by the Choice & Innovation Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/CS/HB 591 2023
1 A bill to be entitled
2 An act relating to social media protection for minors;
3 creating s. 501.174, F.S.; providing a definition;
4 requiring social media platforms to disclose specified
5 policies and provide specified resources, measures,
6 and disclaimers; authorizing social media platforms to
7 post specified compliance statements on their Internet
8 homepage or platform user login page; prohibiting
9 certain schools from using or having an account on
10 certain social media platforms and from requiring
11 students to register, enroll, or participate in social
12 media platforms for educational purposes; providing
13 applicability; providing an effective date.
14
15 Be It Enacted by the Legislature of the State of Florida:
16
17 Section 1. Section 501.174, Florida Statutes, is created
18 to read:
19 501.174 Social media protection for minors.-
20 (1) As used in this section, the term "social media
21 platform" or "platform" means a digital platform operating in
22 the state predominantly accessed by platform users who are under
23 the age of 18 that offers forms of electronic communication
24 through which such platform users are permitted to create online
25 communities to share information, ideas, personal messages, and
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26 other content.
27 (2) Beginning January 1, 2024, a social media platform, on
28 its Internet homepage or platform user login page or through a
29 clearly labeled, conspicuous, and readily accessible link on
30 such homepage or login page, must:
31 (a) Disclose the following social media platform policies
32 in a manner that is clearly, concisely, prominently, and
33 understandably written using language suited to the age of users
34 who are under the age of 18 likely to routinely access the
35 platform without unrelated, confusing, or contradictory
36 materials:
37 1. The content moderation policies the social media
38 platform uses for content on the platform.
39 2. Whether the social media platform uses or allows the
40 use of addictive design or deceptive pattern features, including
41 autoplay or infinite scroll.
42 3. Whether the social media platform allows manipulated
43 photographs or digital images to be shared on the platform.
44 4. Whether the social media platform considers the best
45 interests of platform users who are under the age of 18 when
46 designing, developing, and providing services.
47 5. The methodology the social media platform uses to
48 consider the best interests of platform users who are under the
49 age of 18 when designing, developing, and providing services.
50 6. The policies and protections the social media platform
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51 uses to protect platform users who are under the age of 18
52 against harmful behaviors, such as bullying, harassment, and
53 threats of violence or self-harm.
54 7. Whether the social media platform collects or sells
55 personal information of platform users who are under the age of
56 18, including personal identifiers, biometrics, and geolocation
57 data. If such personal information is collected, the platform
58 must disclose the type of personal information collected and the
59 purpose of such collection. If such personal information is
60 sold, the platform must disclose to whom the information is
61 sold.
62 (b) Provide clear access to the following:
63 1. Zip code-based references to local resources for law
64 enforcement, suicide prevention, and domestic violence
65 prevention services.
66 2. Protective measures such as screen time limitations,
67 data usage limitations, content filters, and other parental
68 settings.
69 3. Reporting mechanisms related to harmful behaviors, such
70 as bullying, harassment, and threats of violence or self-harm.
71 (3) At the time of log in, and before obtaining access to
72 the platform, a social media platform must require platform
73 users who are under the age of 18 to read and accept a
74 disclaimer which must be in substantially the following form:
75
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76 This application may be harmful to your mental health
77 and may use design features that have addictive
78 qualities or present unverified information or that
79 may be manipulated by [insert platform name] or others
80 for your viewing. This application may also collect
81 your personal data to further manipulate your viewable
82 content and may share your personal data with others.
83
84 (4) A social media platform that complies with subsections
85 (2) and (3) may post a statement confirming such compliance on
86 its Internet homepage or platform user login page.
87 (5) A public K-12 school may not:
88 (a) Use or have an account on a social media platform that
89 does not have a statement pursuant to subsection (4) on its
90 Internet homepage or platform user login page.
91 (b) Require students, regardless of age, to register,
92 enroll, or participate in a social media platform as a means to
93 access information, materials, or resources related to school -
94 sponsored educational activities. This paragraph does not apply
95 to portal, email, and message board accounts used for official
96 business with the school.
97 Section 2. This act shall take effect July 1, 2023.
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COMMERCE COMMITTEE
CS/CS/HB 591 by Rep. Rayner-Goolsby
Social Media Protection for Minors
AMENDMENT SUMMARY
April 17, 2023
Amendment 1 by Rep. Rayner-Goolsby (line 96):
• Provides that classroom information, materials, or resources on a social media platform
may be viewed in a classroom as long as it is on one screen controlled by instructional
or administrative personnel of the school.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 591 (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: Commerce Committee
2 Representative Rayner-Goolsby offered the following:
3
4 Amendment
5 Remove line 96 and insert:
6 business with the school or to classroom information, materials,
7 or resources viewed in a classroom on one screen controlled by
8 instructional or administrative personnel of the school .
365389 - h0591-line96.docx
Published On: 4/14/2023 8:21:35 PM
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CS/HB 637
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 637 Motor Vehicle Dealers, Manufacturers, Importers, and Distributors
SPONSOR(S): Civil Justice Subcommittee, Shoaf
TIED BILLS: IDEN./SIM. BILLS: SB 712
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform & Economic Development 12 Y, 0 N Thompson Anstead
Subcommittee
2) Civil Justice Subcommittee 15 Y, 0 N, As CS Mawn Jones
3) Commerce Committee Thompson Hamon
SUMMARY ANALYSIS
The Division of Motor Vehicles (“Division”) within the Department of Highway Safety and Motor Vehicles
(“DHSMV”) is responsible for administering and enforcing the “Florida Automobile Dealers Act” (“Act”), which
Act regulates the contractual business relationship between franchised motor vehicle dealers (“dealers”) and
manufacturers, distributors, and importers operating in the state. The Act also requires that manufacturers,
distributors, and importers (“licensees”) be licensed by the DHSMV before doing business in the state and
provides grounds for which such licenses may be suspended or revoked or an application for such licenses
may be denied.
The bill revises the Act to:
Broaden the definitions of “common entity”; “unfair”; “independent person”; and “sell” and related terms,
and define “motor vehicle dealer association.”
Expand the actions which a licensee is prohibited from taking to include:
o Conditionally or unconditionally reserving a specific motor vehicle for a specific person, except
for purposes of replacing a consumer’s vehicle under ch. 861, F.S.;
o Requiring or incentivizing a dealer to sell or lease a:
Specific motor vehicle to a specific person; or
A motor vehicle at a specific price or profit margin, or restrict the price at which a motor
vehicle dealer may sell or lease a motor vehicle;
o Engaging in any activities of a motor vehicle dealer except as otherwise authorized; and
o Selling or leasing specified vehicles or for such vehicles activating for a fee or selling any
permanent or temporary motor vehicle accessory, option, add-on, feature, improvement, or
upgrade except through a licensed motor vehicle dealer.
Authorize licensees to sell or activate for a fee a permanent or temporary motor vehicle accessory,
option add-on, feature, improvement, or upgrade for specified motor vehicles through remote electronic
transmission in specified circumstances, including paying a percentage of the gross sale pric e that is at
least commensurate with the dealer margin structure established by the applicant or licensee.
Modify the entities prohibited from owning or operating motor vehicle dealerships, an exception to such
prohibition, and to whom motor vehicle dealer licenses may be issued.
Require the DHSMV to conduct an inquiry of a licensee relating to any written complaint alleging a
violation of any provision of ss. 320.60-.70, F.S. against such licensee made by a motor vehicle dealer
or a motor vehicle dealer association meeting specified conditions; provide applicable timelines; expand
the DHSMV’s subpoena authority as it relates to such an inquiry; and specify the actions the DHSMV
may take if the DHSMV determines that a violation occurred.
The bill does not appear to have a fiscal impact on state or local governments. 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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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Florida Automobile Dealership Act
General Motors established the first motor vehicle franchise in the United States in 1898.1 Franchise
agreements 2 were initially voluntary and unregulated, but in 1970, the Florida Legislature adopted
comprehensive regulations, embodied as the Florida Motor Vehicle Dealership Act (“Act”) in Ch. 320,
F.S.,3 which chapter generally regulates motor vehicle manufacturer,4 distributor,5 and importer6
licensing and the contractual relationship between such entities and franchised dealers, providing
substantial protections for franchised dealers.7
General Provisions
The Act, which charges the Division of Motor Vehicles (“Division”) within the Department of Highway
Safety and Motor Vehicles (“DHSMV”) with administering and enforcing the Act, generally specifies:
That motor vehicle manufacturers, distributors, and importers (“licensees”) must be licensed
under the Act to engage in business in Florida and the conditions and situations under which the
DHSMV may deny, suspend, or revoke such licenses;
The requirements for licensees wishing to discontinue, cancel, modify, or otherwise replace a
franchise agreement with a dealer, and the conditions under which the DHSMV may deny such
a request;
The procedures licensees must follow to add a franchised dealership in an area already served
by a franchised dealer, the protest process, and the DHSMV’s role in such circumstances;
The damages assessable against a licensee who violates the Act; and
The DHSMV’s authority to adopt rules to implement these sections of law.8
Further, the Act provides that all presently existing or future systems of motor vehicle distribution in
Florida and all franchise agreements that are renewed, amended, or entered into after October 1, 1988,
are governed by the Act and any amendments thereto, unless the amendment specifically provides
1
Francine Lafontaine and Fiona Scott M orton, State Franchise Laws, Dealer Terminations, and the Auto Crisis, 24 J. Econ. Persp. 233, 234 (2010),
https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.24.3.233 (last visited M arch 27, 2023).
2
“Franchise agreement” means a contract, franchise, new motor vehicle franchise, sales and service agreement, ore dealer agreement or any other
terminology used to describe the contractual relationship between a manufacturer, factory branch, distributor, or importer, and a motor vehicle dealer,
pursuant to which the motor vehicle dealer is authorized to transact business pertaining to motor vehicles of a particular line-make. “Line-make
vehicles”, in turn, means motor vehicles which are offered for sale, lease, or distribution under a common name, trademark, s ervice mark, or brand
name of the manufacturer of same (such as Ford, General M otors, or Honda). However, motor vehicles sold or leased under multiple brand names or
marks constitute a single line-make when they are included in a single franchise agreement, and every motor vehicle dealer in this state authorized to
sell or lease any such vehicles has been offered the right to sell or lease all of the multiple brand names or marks covered by the single franchise
agreement. S. 320.60(1) and (14), F.S.
3
Ch. 70-424, Laws of Fla.
4
“M otor vehicle manufacturer” means any person, whether a resident or non-resident of this state, who manufactures or assembles motor vehicles or
who manufactures or installs on previously assembled truck chassis special bodies or equipment which, when installed, form an integral part of the
motor vehicle and which constitute a major manufacturing alteration. This term includes a central or principal sales corporation or other entity
through which, by contractual agreement or otherwise, it distributes its products. S. 320.60(9), F.S.
5
“Distributor” means a person, resident or nonresident, who, in whole or in part, sells or distributes motor vehicles to motor vehicle dealers or who
maintains distributor representatives. S. 320.60(5), F.S.
6
“Importers” means a person who imports vehicles from a foreign country into the United States or into this st ate for the purpose of sale or lease. S.
320.60(7), F.S.
7
“M otor vehicle dealer” means any person, firm, company, corporation, or entity who holds a license under s. 32.27, F.S., as a “franchised motor
vehicle dealer” and, for commission, money, or other things of value, repairs or services motor vehicles pursuant to a franchise agreement; sells,
exchanges, buys, leases or rents, or offers, or attempts to negotiate a sale or exchange of any interest in, motor vehicles,; or is engaged wholly or in
party in the business of selling motor vehicles, whether or not such motor vehicles are owned by such person, firm, company, or corporation. Further,
any person who repairs or services three or more motor vehicles; buys, sells, or deals in three or more motor vehicles in any 12-month period; or
offers or displays for sale three or more motor vehicles is presumed to be a motor vehicle dealer, with exceptions. S. 32.60(11), F.S.
8
S. 320.011, F.S.; ss. 320.60-320.70, F.S.
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otherwise and except to the extent that such application would impair valid contractual agreements in
violation of the State and Federal Constitutions.9
Manufacturer, Factory Branch, Distributor, and Importer Licenses
An application for a motor vehicle manufacturer, distributor, or importer license (“applicant”) may be
denied on various grounds as specified in the Act, and, for the same grounds, such a license, once
issued, may be revoked or suspended at any specific location or across the state. 10 Generally, such
grounds arise principally out of the applicant’s or licensee’s dealings with motor vehicle dealers with
whom the applicant or licensee has a franchise agreement, including that the applicant or licensee, or
in some cases a common entity11 thereof:
Coerced or attempted to coerce any motor vehicle dealer to enter into any agreement;
Threatened to discontinue, cancel, or not to renew a franchise agreement of a licensed motor
vehicle dealer, where the threatened discontinuation, cancellation, or nonrenewal, if
implemented, would violate the Act;
Threatened to modify or replace, or has modified or replaced, a franchise agreement with a
succeeding franchise agreement which would adversely alter the rights or obligations of a motor
vehicle dealer under an existing franchise agreement or which substantially impairs the sales,
service obligations, or investment of the motor vehicle dealer;
Without good cause shown, delayed, refused, or failed to provide a supply of motor vehicles by
series in reasonable quantities, including the models publicly advertised by the applicant or
licensee as being available, or has delayed, refused, or failed to deliver motor vehicle parts and
accessories within a reasonable time after receipt of an order by a franchised dealer; or
Established a system of motor vehicle allocation or distribution or has implemented a system of
allocation or distribution of motor vehicles to one or more of its franchised motor vehicle dealers
which reduces or alters allocations or supplies of new motor vehicles to the dealer to achieve,
directly or indirectly, a purpose that is prohibited by the Act, or which otherwise is unfair, 12
inequitable, unreasonably discriminatory, or not supportable by reason and good cause after
considering the equities of the affected motor vehicles dealer or dealers.13
Further, licensees and applicants:
Must maintain for three years records describing their methods or formula for vehicle allocation
and distribution, and of their actual allocation and distribution, to their franchised dealers; and
Are prohibited from:
o Competing (with respect to any activity covered by the franchise agreement) with a
franchised dealer of the same line-make vehicles located in this state with whom the
licensees or applicants have entered into a franchise agreement.14
o Selling a motor vehicle to any retail consumer in the state except through a dealer
holding a franchise agreement for the line-make vehicles that includes the motor vehicle
sold.15
Dealer Licenses in Areas Previously Served
Any manufacturer, distributor, or importer who proposes to establish a motor vehicle dealership, or
relocate an existing dealership, to a location within a community or territory where the same line-make
vehicle is presently represented by a franchised dealer must give written notice of its intention to the
DHSMV.16 An existing franchised dealer has standing to protest a proposed additional or relocated
9
See Article I, s. 10 of the Florida Constitution and Article 1, s. 10 of the United States Constitution. 320.701, F.S.S. 320.6992, F.S.
10
S. 320.64, F.S.
11
“Common entity” means a person who is either controlled or owned, beneficially or of record, by one or more persons who also control or own
more than 40 percent of the voting equity interests of a manufacturer; or who shares directors, officers, or partners with a manufacturer.
12
As used in this section, “unfair” includes, without limitation, the refusal or failure to offer to any dealer an equit able supply of new vehicles under
its franchise, by model, mix, or colors as the manufacturer offers or allocates to its other same line-make dealers in the state.
13
Id.
14
S. 320.64(23), F.S.
15
This does not apply to sales to current employees and to employees of companies affiliated by common ownership, charitable not-for-profit
organizations, and the federal government. S. 320.64(24), F.S.
16
S. 320.642(1), F.S.
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motor vehicle dealership when the existing dealer has a franchise agreement for the same line-make
vehicle to be sold or serviced by the proposed dealership and certain physical location mileage
requirements are met.17 Specifically, in counties with a population of:
Less than 300,000, an existing dealer of the same line-make vehicles has standing if the dealer:
o Has a franchise agreement designating the same area of responsibility in which the
proposed dealership is to be located;
o Has a licensed franchise location within a 20-mile radius of the proposed dealership’s
location; or
o Can establish that during any 12-month period of the 36-month period preceding the
filing of the application for the proposed dealership, the dealer or its predecessor made
25 percent of its retail sales of new motor vehicles to persons whose registered
household addresses were located within a 20-mile radius of the proposed dealership’s
location, so long as the existing dealer is located in the same county as or any county
contiguous to the county of the proposed dealership’s location.18
Over 300,000, an existing dealer of the same line-make vehicles has standing if the dealer:
o Has a licensed franchise location within a radius of 12.5 miles of the location of the
proposed dealership; or
o Can establish that during any 12-month period of the 36-month period preceding the
filing of the application for the proposed dealership, the dealer or its predecessor made
25 percent of its retail sales of new motor vehicles to persons whose registered
household addresses were located within a 12.5-mile radius of the proposed
dealership’s location, so long as the existing dealer is located in the same county as or
any county contiguous to the county of the proposed dealership’s location.19
However, different procedures apply where the proposed dealership is a dealership which only services
vehicles and does not sell or lease new vehicles (“service-only dealership”). Specifically, an existing
dealer only has standing to protest such a proposed dealership when the dealer is within a 20-mile
radius in counties with a population less than 300,000 and a 12.5-mile radius in counties with a
population over 300,000.20 Further, a proposed service-only dealership is not subject to protest if:
The applicant for the service-only dealership location is an existing motor vehicle dealer of the
same line-make as the proposed additional or relocated service-only dealership;
There is no existing dealer of the same line-make closer than the applicant to the proposed
location of the additional or relocated service-only dealership; and
The proposed location of the additional or relocated service-only dealership is at least seven
miles from all existing motor vehicle dealerships of the same line-make, other than motor
vehicle dealerships owned by the applicant.21
If a service-only dealership subsequently seeks to sell new motor vehicles at its location, however, all
notice and protest provisions apply.22
17
S. 320.642(3), F.S.
18
S. 320.642(3)(a)2., F.S.
19
S. 320.642(3)(b)1., F.S.
20
S. 320.642(6)(a), F.S.
21
S. 320.642(6)(b), F.S.
22
S. 320.642(6)(d), F.S.
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Restrictions on Owning or Operating Dealerships
The Act prohibits licensees, manufacturers, distributors, agents of a manufacturer or distributor, or any
parent, subsidiary, common entity, officer, or representative of a licensee from owning or operating a
dealership in Florida for the sale or service of motor vehicles that are already offered for sale23 under a
franchise agreement with a dealer in this state.24 However, a licensee may operate a dealership and
still be deemed to in compliance with the Act if:
The entity operates a dealership for a temporary period of up to one year, during the transition
from one dealership owner to another;
The entity operates a dealership temporarily for a reasonable period for the exclusive purpose
of broadening the diversity of its dealer body and enhancing opportunities for qualified persons
who are:
o Part of a group that has historically been underrepresented in its dealer body; or
o Deemed to lack the resources to purchase or capitalize the dealership outright; or
The DHSMV determines, after an administrative hearing on the matter held at the request of
any person, that there is no “independent person”25 available in the community or territory to
own and operate the dealership in a manner consistent with the public interest. 26
In any such case, the licensee must continue to make the dealership available for sale to an
independent person at a fair and reasonable price, and approval of the sale may not be unreasonably
withheld.27
Inspection and Investigation of Books or Other Documents of License
The Act gives the DHSMV the authority to inspect a licensee’s pertinent books, records, letters, and
contracts relating to any written complaint made to the DHSMV against the licensee. 28 In the exercise
of such duties, the Act gives the DHSMV the power to subpoena witness attendance and the
production of any documentary evidence necessary for DHSMV’s disposition of any such written
complaint, but provides that any such information obtained may not be used against the licensee as the
basis for a criminal prosecution under Florida law.29
Administrative Hearings and Adjudications
A franchised dealer who is directly and adversely affected by the actions or conduct of a manufacturer,
distributor, or importer, which actions or conduct allegedly violate the Act, may seek a declaration and
adjudication of its rights by filing with the DHSMV either a: 30
Request for an administrative hearing under ch. 120, F.S.; or
Written objection or notice of protest as prescribed by the Act.31
If a written objection or notice of protest is filed with the DHSMV, a hearing must occur no sooner than
180 days, or later than 240 days, from the date of the filing of the first written objection or notice of
protest, unless the time is extended by the administrative law judge for good cause shown.32
Civil Remedies
23
“Sell,” “selling,” “sold,” “exchange,” “retail sales,” and “leases” means any transaction where the title of motor vehicle or used motor vehicle is
transferred to a retail consumer; any retail lease transaction where a retail customer leases a vehicle for a period of at least 12 months; and lease-
purchase transactions. However, under the Act, establishing a price for sale when an applicant or licensee has sold a motor vehicle to any retail
consumer in the state except through a motor vehicle dealer holding a franchise agreement for the line-make vehicles that includes the motor vehicle
does not constitute a sale or lease. S. 320.60(6) and (15), F.S.
24
S. 320.645(1), F.S.
25
“Independent person” means a person who is not an officer, director, or employee of t he licensee. S. 320.645(2)(a), F.S.
26
S. 320.645(1), F.S.
27
Id.
28
S. 320.67(1), F.S.
29
S. 320.67(2), F.S.
30
S. 320.699(1), F.S.
31
Id.
32
S. 320.699(2), F.S.
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Any person who suffers a pecuniary loss or who has been otherwise adversely affected because of a
violation of the Act by a manufacturer, distributor, or importer has a cause of action against such
manufacturer, distributor, or importer for damages in an amount equal to three times the pecuniary loss,
along with reasonable costs and attorney fees.33 The person bringing such an action must make a
prima facie showing that the alleged violation occurred, after which the manufacturer, distributor, or
importer has the burden to prove that such a violation did not occur.34
Additionally, the DHSMV, or any motor vehicle dealer in the name of the DHSMV and the State and for
the use and benefit of the motor vehicle dealer, may generally apply to any circuit court of the state for
a temporary or permanent injunction35 restraining any person from acting as a licensee under the Act
without being properly licensed thereunder; from violating or continuing to violate the Act; or from failing
or refusing to comply with the requirements of injunction statute or any rule or regulation adopted
thereunder.36
However, on May 3, 2022, the First District Court of Appeal affirmed a decision by the DHSMV that the
Florida Automobile Dealers Association (“FADA”) lacked standing to challenge a licensee’s alleged
violations of the Act.37 Specifically, the court held that, even though FADA’s members are motor vehicle
dealers, FADA lacked standing because:
It is not itself a motor vehicle dealer or other statutorily-authorized person or entity that may
bring such a challenge; and
Was not directly and negatively impacted by the licensee’s actions or conduct.38
Market Background
Traditionally, dealers rely on licensees for product to fill and move off lots, and such licensees in turn
rely on dealers to sell and service their vehicles. However, as more licensees introduce electric
vehicles 39 (“EV”), such licensees are re-envisioning their sales methods in ways which may eliminate or
reduce a licensee’s reliance on dealers. Specifically, some EV manufacturers, distributors, and
importers, and newer motor vehicle manufacturers, distributors, and importers without existing
franchise agreements, have adopted a “direct-to-consumer” approach for selling their vehicles; in other
words, they sell their vehicles directly to consumers without the need for a dealership to act as a go-
between.40 These manufacturers, distributors, and importers often also:
Adopt a cost-effective distribution method known as “build-to-order,” in which a vehicle
purchaser can custom-design his or her vehicle online and have it delivered without needing to
involve a dealer; and
Operate their own dealerships and service centers to handle any in-person needs a customer
may have.41
How the traditional licensee-dealer relationship fits into an EV future is at the forefront of discussions
between such licensees and dealers.42 These discussions are of particular importance as, in the United
33
S. 320.697, F.S.
34
Id.
35
An “injunction” is a court order requiring a person to do or cease doing a specific action. Legal Information Institute, Injunction,
https://www.law.cornell.edu/wex/injunction (last visited M arch 27, 2023).
36
S. 320.695, F.S.
37
Fla. Auto. Dealers Ass'n v. Hyundai Motor Am. Corp., 337 So. 3d 893, 894 (Fla. 1st DCA 2022), reh'g denied (M ay 3, 2022).
38
Id.
39
“Electric vehicle” means a motor vehicle that is powered by an electrical motor that draws current from rechargeable storage batteries. S.
320.01(36), F.S.
40
Proponents of the direct-to-consumer sales model argue that it lowers end prices for consumers, increases consumer choice between industry
brands, and gives manufacturers greater control over marketing and sales. Opponents of the model argue that it reduces price competition, lowers
consumer safety, and reduces investments in local communities.
41
The U.S Department of Justice, Economic Effects of State Bans on Direct Manufacturer Sales to Car Buyers,
https://www.justice.gov/sites/default/files/atr/legacy/2009/05/28/246374.pdf (last visited M arch 27, 2023); Greg Rosalsky, Inside the Rise of
'Stealerships' and the Shady Economics of Car Buying, National Public Radio (NPR) (Aug. 30, 2022),
https://www.npr.org/sections/money/2022/08/30/1119715886/inside-the-rise-of-stealerships-and-the-shady-economics-of-car-buying (last visited
M arch 27, 2023).
42
M ichael Wayland, Carmakers Face a Crossroads as they Work to Fit Auto Dealers into their EV Plans, CNBC (Jan. 28, 2023),
https://www.cnbc.com/2023/01/28/ev-sales-automakers-dealers.html?__source=sharebar|email&par=sharebar (last visited M arch 27, 2023).
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States alone, revenue in the electric vehicles 43 (“EV”) market is projected to reach approximately $61
billion in 2023, and will result in a market volume of $139 billion by 2027.44
According to the National Conference of State Legislatures (“NCSL”), a number of states have begun to
address this issue by amending their dealer franchise laws to either explicitly prohibit or authorize the
direct-to-consumer sales model.45 Specifically, according to the NCSL:
At least 17 states expressly prohibit the direct-to-consumer sales model;
At least 18 states expressly authorize the direct-to-consumer model; and
At least nine states prohibit all new direct-to-consumer sales arrangements, while authorizing
manufacturers, distributors, and importers already engaged in direct-to-consumer sales in the
state to maintain a certain number of sales locations. 46
Further, according to the NCSL:
Of the states authorizing direct sales, at least eight states tie their direct-to-consumer sales
provisions to a requirement that the entity exclusively sell non-fossil-fuel, EVs, or other zero-
emission vehicles.
Most states authorizing the direct-to-consumer sales model still require an entity to obtain a
dealer license before operating in the state.
In some states, authorization for the direct-to-consumer sales model comes from favorable
judicial or administrative rulings as to the applicability of state law.47
Recent Developments
Some licensees with established dealer franchises have indicated their intent to separate their EV and
internal combustion vehicle lines with separate dealership agreements and to offer a sales model that
is a hybrid between the manufacturer-dealership model and the direct-to-consumer model for both
lines.48 This stems in part from the fact that, recently, motor vehicle manufacturers and dealers have
engaged in public disputes about how vehicles should be sold in the future, and about whether dealer
franchise laws have contributed to dealers pricing new cars at an all-time high.49 At least three major
motor vehicle manufacturers recently asked their dealers to cut down on markups, additional waiting list
fees, and deposits for EVs, and at least one notified its dealers that it would cut back on sending them
the manufacturer’s most popular vehicles if prices did not come down. 50 Dealers, in turn, suggest that
such actions will not solve pricing issues and will interfere with market competition.
The Federal Trade Commission (“FTC”) has advocated for the relaxation of state franchise laws so that
manufacturers, distributors, and importers can utilize the lower cost direct-to-consumer business
models and has stated that "[s]tates should allow consumers to choose not only the cars they buy, but
also how they buy them.”51 The FTC has also proposed new rules aimed at combating rising consumer
prices.52 Such rules propose to ban deceptive advertising, in which dealerships market motor vehicles
for lower prices than the dealership actually intends to sell them for; ban junk fees for fraudulent add-on
43
“Electric vehicle” means a motor vehicle that is powered by an electrical motor that draws current from rechargeable storage batteries. S.
320.01(36), F.S.
44
Statista, Electric Vehicles – United States, https://www.statista.com/outlook/mmo/electric-vehicles/united-states (last visited M arch 27, 2023).
45
National Conference of State Legislatures, State Laws on Direct Sales, https://www.wispolitics.com/wp -content/uploads/2021/08/State-Laws-on-
Direct-Sales.pdf (last visited M arch 27, 2023).
46
Id.
47
Id.
48
Id.
49
M otor Biscuit, Ford Threatens to Cut Dealer Inventories to Demolish Price Markups, https://www.motorbiscuit.com/ford-threatens-cut-dealer-
inventories-demolish-price-
markups/?utm_source=npr_newsletter&utm_medium=email&utm_content=20220826&utm_term=7163011&utm_campaign=money&utm_id=43206
08&orgid=&utm_att1= (last visited M arch 27, 2023); M otor1.com, Christopher Smith, Dealership Profits Are At Record Levels Through Q1 2022:
Report: The Average Profit for New-Car Dealerships is Estimated at $7.1 million; https://www.motor1.com/news/589765/dealership -profits-at-
record-levels-q1-2022/ (Last visited M arch 27, 2023) (Data from 2022 shows dealerships profits at record levels: The average gross profit per new
vehicle is $6,244, which is a 180 percent increase from pre-pandemic levels in 2019.)
50
Id.; Chris Bruce, Hyundai is Latest Automaker Fed Up with Ridiculous Dealership Markups, M otor1.com (Feb 23, 2022),
https://www.motor1.com/news/569524/hyundai-genesis-avoid-dealer-markups/ (last visited M arch 27, 2023).
51
M arina, et al., Direct-to-Consumer Auto Sales: It’s Not Just About Tesla, Federal Trade Commission (M ay 11, 2015),
https://www.ftc.gov/enforcement/competition-matters/2015/05/direct-consumer-auto-sales-its-not-just-about-tesla (last visited M arch 27, 2023).
52
Federal Trade Commission, FTC Proposes Rule to Ban Junk Fees, Bait-and-Switch Tactics Plaguing Car Buyers, https://www.ftc.gov/news-
events/news/press-releases/2022/06/ftc-proposes-rule-ban-junk-fees-bait-switch-tactics-plaguing-car-buyers (last visited M arch 27, 2023).
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products and services that provide no benefit to the consumer; and require dealerships to disclose
upfront all costs and conditions for buying their vehicles. 53 However, NADA opposes these proposed
rules and has stated that such rules “would cause great harm to consumers by significantly extending
transaction times, making the customer experience much more complex and inefficient, and increasing
prices."54
Effect of Proposed Changes
Manufacturer, Distributor, and Importer Licenses
The bill expands the grounds for which an application for a manufacturer, distributor, or importer license
may be denied, and such a license, once issued, may be suspended or revoked, to include:
Establishing a system of motor vehicle allocation or distribution or implementing a system of
allocation or distribution for motor vehicles to one or more of its franchised dealers which:
o Conditionally or unconditionally reserves a specific motor vehicle identified by a vehicle
identification number or other unique identifier for a specifically named person, except
for purposes of replacing a consumer’s vehicle pursuant to ch. 861, F.S.;
o Requires or incentivizes a motor vehicle dealer to sell or lease, or to negotiate the sale
or lease of, a specific motor vehicle identified by a vehicle identification number or other
unique identifier to a specifically named person; and
o Requires or incentivizes a motor vehicle dealer to sell or lease a motor vehicle at a
specified price or profit margin, or restricts the price at which a motor vehicle dealer may
sell or lease a motor vehicle.
Engaging in any of the activities of a motor vehicle dealer as defined in the Act, except as
prohibited by the Act and with respect to the electronic transmission of a motor vehicle
accessory, option, add-on, feature, improvement, or upgrade; and
Selling or leasing, whether directly or through a common entity,55 a motor vehicle of a line-make
manufactured, distributed, or imported by the applicant or licensee to any retail consumer in
Florida, or has for a motor vehicle of such line-make activated for a fee or sold any permanent
or temporary motor vehicle accessory, option, add-on, feature, improvement, or upgrade, to any
retail consumer for a motor vehicle the consumer purchased from a motor vehicle dealer in
Florida, except through a properly licensed motor vehicle dealer holding a franchise agreement
for the line-make that includes the motor vehicle.
However, the bill specifies that an applicant or a licensee, or a common entity thereof, may sell or
activate for a fee a permanent or temporary motor vehicle accessory, option, add-on, feature,
improvement, or upgrade for a motor vehicle of a line-make manufactured, imported, or distributed by
the applicant or licensee and registered in Florida if and only if the accessory, option, add-on, feature,
improvement, or upgrade is provided directly to the motor vehicle through remote electronic
transmission. If such motor vehicle was sold or leased as new by a franchised dealer in the state within
three years before such remote electronic transmission, the bill requires the applicant or licensee to pay
the dealer a percentage of the gross sale price for the accessory, option, add-on, feature, improvement,
or upgrade that is at least commensurate with the dealer margin structure established by the applicant
or licensee for the sale of the vehicle to which the accessory, option, add-on, feature, improvement, or
upgrade was remotely transmitted. To calculate the “dealer margin structure,” the bill requires the
applicant or licensee to subtract the invoiced vehicle wholesale price from the Manufacturer’s
Suggested Retail Price, then add to that figure all monetary per-vehicle incentives offered by the
53
Id.
54
Rosalsky, supra note 45.
55
The bill redefines “common entity” to mean a person who is either directly or indirectly controlled, or has more than 30 percent of his or her equity
interest directly or indirectly owned, beneficially or of record, through any form of ownership structure, by a manufacturer, an importer, a distributor,
a licensee, or a distributor thereof; or by one or more persons who also directly or indirectly control or own, beneficially or of record, more than 30
percent of the equity interests of a manufacturer, distributor, licensee, or an affiliate thereof. However, the bill provides that, notwithstanding the
foregoing, an entity which would otherwise be considered a common entity of a distributor because of its relation to a distributor shall not be
considered a common entity of that distributor if the distributor was licensed as a distributor as of M arch 1, 2023; the entity is not a common entity of
a manufacturer or an importer; and the distributor is not, and has never been, a common entity or a manufacturer or importer.
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applicant or licensee whether or not received by the motor vehicle dealer, and then divide that sum by
the invoiced vehicle wholesale price.
The bill also expands the definition of:
"Unfair" to include using the number of motor vehicles pre-ordered or reserved by consumers
as a factor in determining the allocation of motor vehicles to motor vehicle dealers.
"Sell," "selling," "sold," "exchange," "retail sales," and "leases," to include:
o Accepting a deposit or receiving a payment for the purchase, lease, exchange,
subscription, or use of a motor vehicle, except that this definition shall not include
facilitating a motor vehicle dealer’s acceptance of a deposit or receipt of a payment from
a customer;
o Accepting a reservation from a retail consumer for a specific motor vehicle identified by a
vehicle identification number or other product identifier;
o Setting the retail price for the purchase, lease, or other use of a motor vehicle;
o Offering or negotiating with a retail consumer the terms for the purchase, lease,
financing, or other use of a motor vehicle;
o Offering or negotiating with a retail consumer a value for a motor vehicle being traded in
as part of the purchase, lease, or other use of a motor vehicle, provided that this
definition shall not include a website or other means of electronic communication that
identifies to a consumer a conditional trade-in value that contains language informing the
consumer that the trade-in value is not binding on any motor vehicle dealer;
o Offering or negotiating with a retail consumer any service contract, extended warranty,
vehicle maintenance contract, guaranteed asset protection agreement, or any other
vehicle-related products or services in connection with the purchase or lease of a motor
vehicle;
o Any transaction where the title of a motor vehicle or a used motor vehicle is transferred
to a retail consumer; and
o Any retail lease transaction where a retail consumer leases a vehicle for a period of at
least 12 months, but does not include administering lease agreements, taking
assignments of leases, performing required actions pursuant to such leases, or receiving
payments under a lease agreement that was originated by a motor vehicle dealer.56
Restrictions on Owning or Operating Dealerships
The bill revises the restriction on owning or operating dealerships by:
Adding “importer” to the list of entities the Act restricts from such ownership or operation;
Prohibiting a manufacturer, importer, or distributor from directly or indirectly owning, operating,
or controlling by contract, agreement, or otherwise a motor vehicle dealership for any line-make
in Florida if such entity has manufactured, imported, or distributed motor vehicles of any line-
make which have been offered for sale under a franchise agreement in this state with an
independent person.57
Specifying that a person prohibited from owning, operating, or controlling a motor vehicle
dealership may not be issued a motor vehicle dealer license, but such a license may be issued
to a person not so prohibited.
The bill also amends an exception to the restrictions on owning or operating dealerships if the DHSMV
determines, after an administrative hearing on the matter, that there is no independent person available
in the community or territory to own and operate the motor vehicle dealership in a manner consistent
with the public interest. Specifically, the bill provides that:
This exception only applies if the motor vehicle dealership sells motor vehicles of a line-make
which, at the time of the hearing, are offered for sale by at least one other existing motor
vehicle dealership not owned, operated, or controlled by the licensee; a licensee’s officer or
56
The bill also deletes a provision stating that establishing a price for sale pursuant to s. 320.64, F.S., does not constitute a sale or lease.
57
The bill modifies the definition of “independent person” to mean a person who is not an agent, parent, subsidiary, common ent ity, officer, or
employed representative of a licensee, manufacturer, importer, or distributor.
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employed representative; a licensee’s parent, subsidiary, or common entity; or a manufacturer,
importer, or distributor.
A motor vehicle dealer association58 has standing to intervene in any hearing held on such
exception.
Investigation and Inspection of Books or Other Documents of License
The bill requires that the DHSMV conduct an inquiry of a licensee relating to any written complaint
alleging a violation of any provision of ss. 320.60-.70 against such licensee made by a motor vehicle
dealer with a current franchise agreement issued by the licensee or motor vehicle dealer association
with at least one member with a current franchise agreement issued by the licensee. The bill also
provides, that:
In the exercise of such duties, the DHSMV is granted and authorized to exercise the power of
subpoena for the purposes of compelling production of and inspecting pertinent books, records,
letters, and contracts of a licensee and compelling the attendance of witnesses at deposition.
The inquiry required by this section must be commenced within 30 days of the date of the
written complaint.
The DHSMV must obtain a written response from the licensee to the allegations contained in
the complaint within 60 days of the DHSMV inquiry and must respond to the inquiring party
within 30 days of the response from the licensee.
If any investigation or examination conducted pursuant to the DHSMV inquiry results in a
determination that the licensee has committed a violation, the DHSMV must take appropriate
action against the licensee, which may include license suspension or revocation; denial of a
license renewal application; assessment, imposition, levy, and collection of an appropriate civil
fine; or instituting a civil action for issuance of an injunction pursuant to s. 320.695, F.S.
However, the bill provides that nothing in this section alters or affects a motor vehicle dealer’s right to
bring a claim or action against a licensee pursuant to any other provisions of ss. 320.60-.70, F.S.
The bill provides an effective date of July 1, 2023.
B. SECTION DIRECTORY:
Section 1: Amends s. 320.60, F.S., relating to definitions for ss. 320.31-320.70.
Section 2: Amends s. 320.64, F.S., relating to denial, suspension, or revocation of license; grounds.
Section 3: Amends s. 320.645, F.S., relating to restriction upon ownership of dealership by
licensee.
Section 4: Amends s. 320.67, F.S., relating to inspection of books or other documents of license.
Section 5: 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:
58
The bill defines “motor vehicle dealer association” to mean a not-for-profit entity organized under the laws of this state which is qualified for tax-
exempt status under s. 501(c)(6) of the Internal Revenue Code, acts as a trade association that primarily represents the interests of franchised motor
vehicle dealers, and has a membership of at least 500 franchised motor vehicle dealers.
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None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may have a positive economic impact on franchised dealers in the state as it protects their
current business model even where the licensee with whom they have the agreement expands into EV
production and sales. However, the bill may have a negative economic impact on consumers in the
state to the extent that it prevents them from buying a vehicle using the potentially less-expensive
direct-to-consumer sales model.
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:
Contracts Clause
Both the State and Federal Contracts Clauses prohibit states from passing any law which impairs the
obligation of contracts but does not operate to obliterate a state’s police powers.59 Courts consider
three factors when evaluating whether a particular law violates the Contracts Clauses:
Whether the law substantially impairs a contractual relationship;
Whether there is a significant and legitimate public purpose for the law; and
Whether the adjustments of rights and responsibilities of the contracting parties are based
upon reasonable conditions and are of an appropriate nature. 60
All presently existing or future systems of motor vehicle distribution in Florida and all franchise
agreements that are renewed, amended, or entered into after October 1, 1988, are governed by the
Act and any amendments thereto, unless the amendment specifically provides otherwise and except
to the extent that such application would impair valid contractual agreements in violation of the State
and Federal Constitutions.
B. RULE-MAKING AUTHORITY:
The DHSMV is already vested with the necessary rulemaking authority to implement any c hanges
made by the bill which impact the DHSMV. Thus, additional rulemaking authority is likely unnecessary.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
59
Art. 1, s. 10, Fla. Const.; U.S. Const. art. 1, s. 10; Allied Structural Steel Co. v. Spannus, 438 U.S. 234 (1978).
60
Vesta Fire Ins. Corp. v. State of Fla., 141 F.3d 1427, 1433 (11th Cir. 1998).
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IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On March 27, 2023, the Civil Justice Subcommittee adopted one amendment and reported the bill favorably as
a committee substitute. The committee substitute:
Modified the definitions of “common entity,” “independent person," and of "sell," "selling," "sold,"
"exchange," "retail sales," and "leases."
Defined “reasonable terms and conditions” and “significant investments” as the terms relate to
dealership ownership restrictions.
Modified the grounds for which an application for a manufacturer, distributor, or importer license may be
denied, and such a license, once issued, may be suspended or revoked.
Deleted a provision amending s. 320.695, F.S., to authorize a motor vehicle dealer association to apply
for an injunction under that section.
Deleted a provision amending s. 320.699, F.S., to authorize a motor vehicle dealer association to seek
a declaration and adjudication of its rights or the rights of its members by filing a request for an
administrative hearing.
Amended s. 320.67, F.S., to:
o Provide that the DHSMV must conduct an inquiry of a licensee relating to a written complaint
made against the licensee by a motor vehicle dealer or a motor vehicle dealer’s association
alleging that the licensee violated any provision of ss. 320.60-.70, F.S.
o Expand the DHSMV’s subpoena powers under this section.
o Provide timelines applicable to the DHSMV’s inquiry.
o Specify what action the DHSMV may take against the licensee if the DHSMV’s inquiry results in
determination that the licensee committed a violation.
o Provide that nothing in this section alters or affects a motor vehicle dealer’s right to bring a claim
or action against a licensee under any other provision of ss. 320.60-.70, F.S.
Made technical changes.
This analysis is drafted to the committee substitute as passed by the Civil Justice Subcom mittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 637 2023
1 A bill to be entitled
2 An act relating to motor vehicle dealers,
3 manufacturers, importers, and distributors; amending
4 s. 320.60, F.S.; revising and providing definitions;
5 amending s. 320.64, F.S.; prohibiting a motor vehicle
6 manufacturer, distributor, or importer from certain
7 actions in the allocation or distribution of motor
8 vehicles to franchised motor vehicle dealers; revising
9 the definition of the term "unfair"; authorizing a
10 motor vehicle manufacturer, distributor, or importer
11 to sell or activate certain motor vehicle accessories
12 or features through remote electronic transmission;
13 providing for revenue-sharing after such a sale or
14 activation; amending s. 320.645, F.S.; revising
15 provisions prohibiting a motor vehicle manufacturer,
16 distributor, or importer from owning, operating, or
17 controlling a motor vehicle dealership in this state;
18 providing for the application of provisions relating
19 to certain hearings; revising the definition of the
20 term "independent person"; amending s. 320.67, F.S.;
21 authorizing a motor vehicle dealer or motor vehicle
22 dealer association to file a written complaint with
23 the Department of Highway Safety and Motor Vehicles
24 alleging a motor vehicle dealer, manufacturer,
25 importer, or distributor has violated a provision of
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26 ss. 320.60-320.70, F.S.; requiring the department to
27 review such a complaint and make a specified report to
28 the complainant; providing that, if the department
29 determines not to pursue action against a licensee as
30 a result of a complaint filed by a motor vehicle
31 dealer association, the motor vehicle dealer
32 association may bring an administrative action
33 challenging the actions of the licensee; providing an
34 effective date.
35
36 Be It Enacted by the Legislature of the State of Florida:
37
38 Section 1. Subsections (2) and (15) of section 320.60,
39 Florida Statutes, are amended, and subsection (17) is added to
40 that section, to read:
41 320.60 Definitions for ss. 320.61-320.70.—Whenever used in
42 ss. 320.61-320.70, unless the context otherwise requires, the
43 following words and terms have the following meanings:
44 (2)(a) "Common entity" means a person:
45 1.(a) Who is directly or indirectly either controlled by
46 or has more than 30 percent of its equity interest directly or
47 indirectly owned, beneficially or of record, through any form of
48 ownership structure, by a manufacturer, an importer, a
49 distributor, or a licensee, or an affiliate thereof; or
50 2. Who has more than 30 percent of its equity interest
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51 directly or indirectly controlled or owned, beneficially or of
52 record, through any form of ownership structure, by one or more
53 persons who also directly or indirectly control or own,
54 beneficially or of record, more than 30 40 percent of the voting
55 equity interests of a manufacturer, an importer, a distributor,
56 or a licensee, or an affiliate thereof; or
57 (b) Who shares directors or officers or partners with a
58 manufacturer.
59 (b) Notwithstanding the foregoing, an entity which would
60 otherwise be considered a common entity of a distributor
61 pursuant to subparagraph (a)1. or subparagraph (a)2. because of
62 its relation to a distributor shall not be considered a common
63 entity of that distributor if:
64 1. The distributor to which the entity is related was a
65 licensed distributor on March 1, 2023;
66 2. The entity is not a common entity of a manufacturer or
67 importer; and
68 3. The distributor to which the entity is related is not,
69 and has never been, a common entity of a manufacturer or
70 importer.
71 (15) "Sell," "selling," "sold," "exchange," "retail
72 sales," and "leases" includes:
73 (a) Accepting a deposit or receiving a payment fo r the
74 purchase, lease, or other use of a motor vehicle, except that
75 this definition shall not include facilitating a motor vehicle
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76 dealer's acceptance of a deposit or receipt of a payment from a
77 customer;
78 (b) Accepting a reservation from a retail consumer for a
79 specific motor vehicle identified by a vehicle identification
80 number or other product identifier;
81 (c) Setting the retail price for the purchase, lease, or
82 other use of a motor vehicle;
83 (d) Offering or negotiating with a retail consumer t erms
84 for the purchase, lease, financing, or other use of a motor
85 vehicle;
86 (e) Offering or negotiating with a retail consumer a value
87 for a motor vehicle being traded in as part of the purchase,
88 lease, or other use of a motor vehicle, provided that this
89 definition shall not include a website or other means of
90 electronic communication that identifies to a consumer a
91 conditional trade-in value that contains language informing the
92 consumer that the trade-in value is not binding on any motor
93 vehicle dealer;
94 (f) Offering or negotiating with a retail consumer any
95 service contract, extended warranty, vehicle maintenance
96 contract, guaranteed asset protection agreement, or any other
97 vehicle-related products or services in connection with the
98 purchase or lease of a motor vehicle;
99 (g) Any transaction where the title of a motor vehicle or
100 a used motor vehicle is transferred to a retail consumer ; or,
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101 and also
102 (h) Any retail lease transaction where a retail consumer
103 customer leases a vehicle for a period of at least 12 months,
104 but does not include administering lease agreements, taking
105 assignments of leases, performing required actions pursuant to
106 such leases, or receiving payments under a lease agreement that
107 was originated by a motor vehicle dealer. Establishing a price
108 for sale pursuant to s. 320.64(24) does not constitute a sale or
109 lease.
110 (17) "Motor vehicle dealer association" means a not-for-
111 profit entity organized under the laws of this state and
112 qualified as tax-exempt under s. 501(c)(6) of the Internal
113 Revenue Code which acts as a trade association that primarily
114 represents the interests of franchised motor vehicle dealers and
115 has a membership of at least 500 franchised motor vehicle
116 dealers as defined in s. 320.27(1)(c)1.
117 Section 2. Subsections (18), (23), and (24) of section
118 320.64, Florida Statutes, are amended to read:
119 320.64 Denial, suspension, or revocation of license;
120 grounds.—A license of a licensee under s. 320.61 may be denied,
121 suspended, or revoked within the entire state or at any specific
122 location or locations within the state at which the applicant or
123 licensee engages or proposes to engage in business, upon proof
124 that the section was violated with sufficient frequency to
125 establish a pattern of wrongdoing, and a licensee or applicant
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126 shall be liable for claims and remedies provided in ss. 320.695
127 and 320.697 for any violation of any of the following
128 provisions. A licensee is prohibited from committing the
129 following acts:
130 (18) The applicant or licensee has established a system of
131 motor vehicle allocation or distribution or has implemented a
132 system of allocation or distribution of motor vehicles to one or
133 more of its franchised motor vehicle dealers which:
134 (a) Reduces or alters allocations or supplies of new motor
135 vehicles to the dealer to achieve, directly or indirectly, a
136 purpose that is prohibited by ss. 320.60-320.70;
137 (b) Conditionally or unconditionally reserves a specific
138 motor vehicle identified by vehicle identification number or
139 other unique identifier for a specifically named person, except
140 for purposes of replacing a consumer's vehicle pursuant to
141 chapter 681;
142 (c) Requires or incentivizes motor vehicle dealers to sell
143 or lease, or to negotiate the sale or lease of, a specific motor
144 vehicle identified by vehicle identification number or other
145 unique identifier to a specifically named person;
146 (d) Requires or incentivizes motor vehicle dealers to sell
147 or lease a motor vehicle at a specified price or profit margin,
148 or restricts the price at which a motor vehicle dealer may sell
149 or lease a motor vehicle; or
150 (e) Is, or which otherwise is unfair, inequitable,
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151 unreasonably discriminatory, or not supportable by reason and
152 good cause after considering the equities of the affected motor
153 vehicles dealer or dealers. As used in this paragraph, "unfair"
154 includes, but is not limited to, refusing or failing to offer to
155 any dealer an equitable supply of new vehicles under its
156 franchise, by model, mix, or color as the licensee offers or
157 allocates to its other same line-make dealers in this state or
158 using the number of motor vehicles pre-ordered or reserved by
159 consumers as a factor in determining the allocation of motor
160 vehicles to motor vehicle dealers.
161
162 An applicant or licensee shall maintain for 3 years records that
163 describe its methods or formula of allocation and distribution
164 of its motor vehicles and records of its actual allocation and
165 distribution of motor vehicles to its motor vehicle dealers in
166 this state. As used in this subsection, "unfair" includes,
167 without limitation, the refusal or failure to offer to any
168 dealer an equitable supply of new vehicles under its franchise,
169 by model, mix, or colors as the licensee offers or allocates to
170 its other same line-make dealers in the state.
171 (23) The applicant or licensee has engaged in any of the
172 activities of a motor vehicle dealer as defined in s.
173 320.60(11)(a) or (15) or has competed or is competing with
174 respect to any activity covered by the franchise agreement with
175 a motor vehicle dealer of the same line-make located in this
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176 state with whom the applicant or licensee has entered into a
177 franchise agreement, except as permitted in s. 320.645 or in
178 subsection (24) with respect to the remote electronic
179 transmission of a motor vehicle accessory, option, add-on,
180 feature, improvement, or upgrade.
181 (24) The applicant or licensee, or common entity thereof,
182 has sold or leased a motor vehicle of a line-make manufactured,
183 imported, or distributed by the applicant or licensee to any
184 retail consumer in this state, or has for a motor vehicle of
185 such line-make sold or activated for a fee any permanent or
186 temporary motor vehicle accessory, option, add-on, feature,
187 improvement, or upgrade, to any retail consumer for a motor
188 vehicle in the consumer purchased from a motor vehicle dealer in
189 this state, except through a motor vehicle dealer properly
190 licensed pursuant to s. 320.27 and holding a franchise agreement
191 for the line-make that includes the motor vehicle.
192 Notwithstanding this subsection, an applicant, licensee, or
193 their common entity may sell or activate for a fee a permanent
194 or temporary motor vehicle accessory, option, add-on, feature,
195 improvement, or upgrade for a motor vehicle of a line -make
196 manufactured, imported, or distributed by the applicant or
197 licensee and registered in Florida if and only if the accessory,
198 option, add-on, feature, improvement, or upgrade is provided
199 directly to the motor vehicle through remote electronic
200 transmission, provided that if such motor vehicle was sold or
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201 leased as new by a Florida franchised motor vehicle dealer
202 within the 3-year period preceding such remote electronic
203 transmission, then the applicant or licensee must pay such
204 Florida franchised motor vehicle dealer a percentage of the
205 gross sale price for the accessory, option, add-on, feature,
206 improvement, or upgrade that is at least commensurate with the
207 dealer margin structure established by the applicant or licensee
208 for the sale of the vehicle to which the accessory, option, add -
209 on, feature, improvement, or upgrade was remotely transmitted.
210 To calculate the "dealer margin structure" as used in this
211 subsection, the applicant or licensee must subtract the invoiced
212 vehicle wholesale price from the Manufacturer's Suggested Retail
213 Price, then add to that figure all monetary per-vehicle
214 incentives offered by the applicant or licensee whether or not
215 received by the motor vehicle dealer, and then divide that sum
216 by the invoiced vehicle wholesale price. This section does not
217 apply to sales by the applicant or licensee of motor vehicles to
218 its current employees, employees of companies affiliated by
219 common ownership, charitable not-for-profit organizations, and
220 the federal government.
221
222 A motor vehicle dealer who can demonstrate that a violation of,
223 or failure to comply with, any of the preceding provisions by an
224 applicant or licensee will or may adversely and pecuniarily
225 affect the complaining dealer, shall be entitled to pursue all
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226 of the remedies, procedures, and rights of recovery available
227 under ss. 320.695 and 320.697.
228 Section 3. Subsections (1) and (2) of section 320.645,
229 Florida Statutes, are amended to read:
230 320.645 Restriction upon ownership of dealership by
231 licensee.—
232 (1) No licensee, manufacturer, importer, or distributor,
233 manufacturer, or agent of the licensee, a manufacturer,
234 importer, or distributor, or any parent, subsidiary, common
235 entity, or officer, or employed representative of the licensee,
236 manufacturer, importer, or distributor shall directly or
237 indirectly own, or operate, or control by contract, agreement,
238 or otherwise either directly or indirectly, a motor vehicle
239 dealership for any line-make in this state if the licensee,
240 manufacturer, importer, or distributor has manufactured,
241 imported, or distributed for the sale or service of motor
242 vehicles of any line-make which have been or are offered for
243 sale under a franchise agreement with a motor vehicle dealer in
244 this state with an independent person. Any person who is not
245 prohibited by this section from owning, operating, or
246 controlling a motor vehicle dealership may be issued a license
247 pursuant to s. 320.27. Any person prohibited by this section
248 from owning, operating, or controlling a motor vehicle
249 dealership. A licensee may not be issued a motor vehicle dealer
250 license pursuant to s. 320.27. However, no such licensee subject
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251 to the prohibition in this section will be deemed to be in
252 violation of this section:
253 (a) When operating a motor vehicle dealership for a
254 temporary period, not to exceed 1 year, during the transition
255 from one owner of the motor vehicle dealership to another;
256 (b) When operating a motor vehicle dealership temporarily
257 for a reasonable period for the exclusive purpose of broadening
258 the diversity of its dealer body and enhancing opportunities for
259 qualified persons who are part of a group that has historically
260 been underrepresented in its dealer body, or for other qualified
261 persons who the licensee deems lack the resources to purchase or
262 capitalize the dealership outright, in a bona fide relationship
263 with an independent person, other than a licensee or its agent
264 or affiliate, who has made a significant investment that is
265 subject to loss in the dealership within the dealership's first
266 year of operation and who can reasonably expect to acquire full
267 ownership of the dealership on reasonable terms and conditions;
268 or
269 (c) If the department determines, after a hearing on the
270 matter, pursuant to chapter 120, at the request of any person,
271 that there is no independent person available in the community
272 or territory to own and operate the motor vehicle dealership in
273 a manner consistent with the public interest. This subsection
274 shall only apply if the motor vehicle dealership at issue sells
275 motor vehicles of a line-make which, at the time of the hearing,
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276 are offered for sale by at least one other existing motor
277 vehicle dealership not owned, operated, or controlled by the
278 licensee, an officer or employed representative of the licensee,
279 a parent, subsidiary, or common entity of the licensee, or a
280 manufacturer, importer, or distributor. A motor vehicle dealer
281 association shall have standing to intervene in any hearing held
282 pursuant to this subsection.
283
284 In the any such case of a, the licensee must continue to make
285 the motor vehicle dealership owned or operated pursuant to
286 paragraph (a), paragraph (b), or paragraph (c), the dealership
287 must be continually made available for sale to an independent
288 person at a fair and reasonable price. Approval of the sale of
289 such a motor vehicle dealership to a proposed motor vehicle
290 dealer shall not be unreasonably withheld.
291 (2) As used in this chapter section, the term:
292 (a) "Independent person" is a person who is not an agent,
293 parent, subsidiary, common entity, officer, or employed
294 representative of a licensee, manufacturer, importer, or
295 distributor director, or employee of the licensee.
296 (b) "Reasonable terms and conditions" requires that
297 profits from the dealership are reasonably expected to be
298 sufficient to allow full ownership of the dealership by the
299 independent person within a reasonable time period not to exceed
300 10 years, which time period may be extended if there is a
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301 reasonable basis to do so and is not being sought to evade the
302 purpose of this section; that the independent person has
303 sufficient control to permit acquisition of ownership; and that
304 the relationship cannot be terminated solely to avoid full
305 ownership. The terms and conditions are not reasonable if they
306 preclude the independent person from an expedited purchase of
307 the dealership using a monetary source other than profits from
308 the dealership's operation; provided, however, that the
309 independent person must pay or make an agreement to pay to the
310 licensee any and all reasonable prepayment charges and costs,
311 including all unrecouped restored losses, associated with the
312 expedited purchase of the dealership. For the purpose of this
313 section, unrecouped restored losses are moneys that the
314 manufacturer has provided to the dealership to restore losses of
315 the dealership that the manufacturer has not been paid back
316 through profits of the dealership.
317 (c) "Significant investment" means a reasonable amount,
318 considering the reasonable capital requirements of the
319 dealership, acquired and obtained from sources other than the
320 licensee or any of its affiliates and not encumbered by the
321 person's interest in the dealership.
322 Section 4. Section 320.67, Florida Statutes, is amended to
323 read:
324 320.67 Investigation and inspection of books or other
325 documents of licensee.—
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326 (1) The department shall conduct an inquiry may inspect
327 the pertinent books, records, letters, and contracts of a
328 licensee relating to any written complaint alleging a violation
329 of any provision of ss. 320.60-320.70 made to it against such
330 licensee made by a motor vehicle dealer with a current franchise
331 agreement issued by the licensee or motor vehicle dealer
332 association with at least one member with a current franchise
333 agreement issued by the licensee.
334 (2) In the exercise of its duties under this section, the
335 department is granted and authorized to exercise the power of
336 subpoena for the purposes of compelling production of and
337 inspecting pertinent books, records, letters, and contracts of a
338 licensee and compelling the attendance of witnesses at
339 deposition. The inquiry required by this section must be
340 commenced within 30 days after the date of the written complaint
341 and the department must obtain a written response from the
342 licensee to the allegations contained in the complaint within 60
343 days after the department inquiry and must respond to the
344 inquiring party within 30 days after the response from the
345 licensee and the production of any documentary evidence
346 necessary to the disposition by it of any written complaint
347 under this section. Any information obtained may not be used
348 against the licensee as the basis for a criminal prosecution
349 under the laws of this state.
350 (3) If any investigation or examination conducted pursuant
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351 to this inquiry results in a determination that the licensee has
352 violated any provision of ss. 320.60-320.70, the department
353 shall take appropriate action against the licensee, which may
354 include license suspension or revocation; denial of a license
355 renewal application; assessment, imposition, levy, and
356 collection of an appropriate civil fine; or instituting a civil
357 action for issuance of an injunction pursuant to s. 320.695.
358 (4) Nothing in this section shall alter or affect the
359 rights of a motor vehicle dealer to bring a claim or action
360 against a licensee pursuant to any other provision of ss.
361 320.60-320.70.
362 Section 5. This act shall take effect July 1, 2023.
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COMMERCE COMMITTEE
CS/HB 637 by Rep. Shoaf
Motor Vehicle Dealers, Manufacturers, Importers, and Distributors
AMENDMENT SUMMARY
April 17, 2023
Amendment 1 by Rep. Shoaf (strike-all):
• Broadens the definitions of “independent person,” “sell,” “feature or improvement,” and
related terms.
• Revises terms related to “accessories, option add-ons, features and upgrades” to
instead be “permanent or temporary features or improvements of a motor vehicle.”
• Requires licensees that sell or activate for a fee a feature through remote electronic
transmission to pay dealers 8 percent of the payment received, if:
o The vehicle was new when leased or sold;
o The vehicle has not been sold and has the same original owner; and
o The transaction occurs within 2 years of the original sale or lease.
• Requires payments for such remote electronic transmissions to be made to the dealer
within 60 days.
• Adds to the legislative intent section that the Florida Automobile Dealers Act applies
solely to the licensing of manufacturers, factory branches, distributors, and importers
and does not apply to non-motor-vehicle-related businesses.
• Makes other technical and conforming changes.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 637 (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: Commerce Committee
2 Representative Shoaf offered the following:
3
4 Amendment (with title amendment)
5 Remove everything after the enacting clause and insert:
6 Section 1. Present subsections (8), (9), (10), (11), (12),
7 (13), (14), (15), and (16) of section 320.60, Florida Statutes,
8 are redesignated as subsections (9), (11), (12), (13), (15),
9 (18), (10), (16), and (17), respectively, new subsections (8)
10 and (14) are added to that section, and subsection (2) and
11 present subsection (15) of that section are amended, to read:
12 320.60 Definitions for ss. 320.61-320.70.—Whenever used in
13 ss. 320.61-320.70, unless the context otherwise requires, the
14 following words and terms have the following meanings:
15 (2) "Common entity" means a person:
16 (a) Who is directly or indirectly either controlled by or
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Bill No. CS/HB 637 (2023)
Amendment No. 1
17 has more than 30 percent of its equity interest directly or
18 indirectly owned, beneficially or of record, through any form of
19 ownership structure, by a manufacturer, an importer, a
20 distributor, or a licensee, or an affiliate thereof; or
21 (b) Who has more than 30 percent of its equity interest
22 directly or indirectly controlled or owned, beneficially or of
23 record, through any form of ownership structure, by one or more
24 persons who also directly or indirectly control or own,
25 beneficially or of record, more than 30 40 percent of the voting
26 equity interests of a manufacturer, an importer, a distributor,
27 or a licensee, or an affiliate thereof; or
28 (b) Who shares directors or officers or partners with a
29 manufacturer.
30 (c) Notwithstanding paragraphs (a) and (b), an entity that
31 would otherwise be considered a common entity of a distributor
32 under paragraph (a) or paragraph (b) because of its relation to
33 a distributor is not considered a common entity of that
34 distributor if:
35 1. The distributor that the entity is related to was a
36 licensed distributor on March 1, 2023;
37 2. The entity is not a common entity of a manufacturer or
38 importer; and
39 3. The distributor that the entity is related to is not,
40 and has never been, a common entity of a manufacturer or
41 importer.
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Bill No. CS/HB 637 (2023)
Amendment No. 1
42 (8) "Independent person" means a person who is not an
43 agent, a parent, a subsidiary, a common entity, an officer, a
44 director, or an employed representative of a licensee,
45 manufacturer, importer, or distributor.
46 (14) "Motor vehicle dealer association" means a not-for-
47 profit entity organized under the laws of this state and
48 qualified as tax-exempt under s. 501(c)(6) of the Internal
49 Revenue Code which acts as a trade association that primarily
50 represents the interests of franchised motor vehicle dealers and
51 has a membership of at least 500 franchised motor vehicle
52 dealers as defined in s. 320.27(1)(c)1.
53 (16)(15) "Sell," "selling," "sold," "exchange," "retail
54 sales," and "leases" includes:
55 (a) Accepting a deposit or receiving a payment for the
56 retail purchase, lease, or other use of a motor vehicle, but
57 does not include facilitating a motor vehicle dealer's
58 acceptance of a deposit or receipt of a payment from a consumer,
59 and does not include receiving payment under a retail
60 installment sale contract;
61 (b) Accepting a reservation from a retail consumer for a
62 specific motor vehicle identified by a vehicle identification
63 number or other product identifier;
64 (c) Setting the retail price for the purchase, lease, or
65 other use of a motor vehicle, but does not include setting a
66 manufacturer's suggested retail price;
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Amendment No. 1
67 (d) Offering or negotiating with a retail consumer terms
68 for the purchase, lease, or other use of a motor vehicle;
69 (e) Offering or negotiating with a retail consumer a value
70 for a motor vehicle being traded in as part of the purchase,
71 lease, or other use of a motor vehicle, but does not include a
72 website or other means of electronic communication that
73 identifies to a consumer a conditional trade-in value and that
74 contains language informing the consumer that the trade -in value
75 is not binding on any motor vehicle dealer;
76 (f) Any transaction where the title of a motor vehicle or
77 a used motor vehicle is transferred to a retail consumer ; or,
78 and also
79 (g) Any retail lease transaction where a retail consumer
80 customer leases a vehicle for a period of at least 12 months ,
81 but does not include administering lease agreements, taking
82 assignments of leases, performing required actions pursuant to
83 such leases, or receiving payments under a lease agreement that
84 was originated by a motor vehicle dealer. Establishing a price
85 for sale pursuant to s. 320.64(24) does not constitute a sale or
86 lease.
87 Section 2. Section 320.605, Florida Statutes, is amended
88 to read:
89 320.605 Legislative intent.—It is the intent of the
90 Legislature to protect the public health, safety, and welfare of
91 the citizens of the state by regulating the licensing of motor
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Bill No. CS/HB 637 (2023)
Amendment No. 1
92 vehicle dealers and manufacturers, maintaining competition,
93 providing consumer protection and fair trade and providing
94 minorities with opportunities for full participation as motor
95 vehicle dealers. Sections 320.61-320.70 are intended to apply
96 solely to the licensing of manufacturers, factory branches,
97 distributors, and importers and do not apply to non -motor-
98 vehicle-related businesses.
99 Section 3. Subsections (18), (23), and (24) of section
100 320.64, Florida Statutes, are amended to read:
101 320.64 Denial, suspension, or revocation of license;
102 grounds.—A license of a licensee under s. 320.61 may be denied,
103 suspended, or revoked within the entire state or at any specific
104 location or locations within the state at which the applicant or
105 licensee engages or proposes to engage in business, upon proof
106 that the section was violated with sufficient frequency to
107 establish a pattern of wrongdoing, and a licensee or applicant
108 shall be liable for claims and remedies provided in ss. 320.695
109 and 320.697 for any violation of any of the following
110 provisions. A licensee is prohibited from committing the
111 following acts:
112 (18) The applicant or licensee has established a system of
113 motor vehicle allocation or distribution or has implemented a
114 system of allocation or distribution of motor vehicles to one or
115 more of its franchised motor vehicle dealers which:
116 (a) Reduces or alters allocations or supplies of new motor
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Bill No. CS/HB 637 (2023)
Amendment No. 1
117 vehicles to the dealer to achieve, directly or indirectly, a
118 purpose that is prohibited by ss. 320.60-320.70;
119 (b) Conditionally or unconditionally reserves a specific
120 motor vehicle identified by vehicle identification number or
121 other unique identifier for a specifically named person, except
122 for purposes of replacing a consumer's vehicle pursuant to
123 chapter 681;
124 (c) Requires or incentivizes motor vehicle dealers to sell
125 or lease, or to negotiate the sale or lease of, a specific motor
126 vehicle identified by vehicle identification number or other
127 unique identifier to a specifically named person;
128 (d) Requires or incentivizes motor vehicle dealers to sell
129 or lease a motor vehicle at a specified price or profit margin
130 or restricts the price at which a motor vehicle dealer may sell
131 or lease a motor vehicle; or
132 (e) Is, or which otherwise is unfair, inequitable,
133 unreasonably discriminatory, or not supportable by reason and
134 good cause after considering the equities of the affected motor
135 vehicles dealer or dealers. As used in this paragraph, the term
136 "unfair" includes, but is not limited to, refusing or failing to
137 offer to any dealer an equitable supply of new vehicles under
138 its franchise, by model, mix, or color, as the licensee offers
139 or allocates to its other same line-make dealers in this state
140 or using the number of motor vehicles preordered or reserved by
141 consumers as a factor in determining the allocation of motor
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Bill No. CS/HB 637 (2023)
Amendment No. 1
142 vehicles to motor vehicle dealers.
143
144 An applicant or licensee shall maintain for 3 years records that
145 describe its methods or formula of allocation and distr ibution
146 of its motor vehicles and records of its actual allocation and
147 distribution of motor vehicles to its motor vehicle dealers in
148 this state. As used in this subsection, "unfair" includes,
149 without limitation, the refusal or failure to offer to any
150 dealer an equitable supply of new vehicles under its franchise,
151 by model, mix, or colors as the licensee offers or allocates to
152 its other same line-make dealers in the state.
153 (23) The applicant or licensee has engaged in any of the
154 activities of a motor vehicle dealer as defined in s.
155 320.60(13)(a) or any activities described in s. 320.60(16) or
156 has competed or is competing with respect to any activity
157 covered by the franchise agreement with a motor vehicle dealer
158 of the same line-make located in this state with whom the
159 applicant or licensee has entered into a franchise agreement,
160 except as permitted in s. 320.645 or in subsection (24) with
161 respect to the remote electronic transmission of a permanent or
162 temporary feature or improvement of a motor vehicle .
163 (24) The applicant or licensee, or common entity thereof,
164 has sold or leased a motor vehicle to any retail consumer in
165 this state, or has sold or activated for a fee to any retail
166 consumer in the state any permanent or temporary motor vehicle
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Amendment No. 1
167 feature or improvement that functions through hardware or
168 components installed on the motor vehicle, except through a
169 motor vehicle dealer properly licensed pursuant to s. 320.27 and
170 holding a franchise agreement for the line-make that includes
171 the motor vehicle. Notwithstanding this subsection, an
172 applicant, licensee, or their common entity may sell or activate
173 for a fee a permanent or temporary motor vehicle feature or
174 improvement for a motor vehicle of a line-make manufactured,
175 imported, or distributed by the applicant or licensee and
176 registered in Florida, if, and only if, the feature or
177 improvement is provided directly to the motor vehicle through
178 remote electronic transmission. However, if such motor vehicle
179 was new when sold or leased by a Florida franchised mot or
180 vehicle dealer within the 2-year period preceding such remote
181 electronic transmission, and the ownership of the vehicle has
182 not changed, then the applicant or licensee must pay a
183 percentage of the payment received for the feature or
184 improvement to the Florida franchised motor vehicle dealer.
185 Payment from the applicant or licensee to the Florida franchised
186 motor vehicle dealer shall be at a minimum 8 percent of the
187 payment received by the applicant, licensee, or common entity
188 for the sale of the feature or improvement that was remotely
189 transmitted. As used in this subsection, the term "feature or
190 improvement" includes the activation or use of motor vehicle
191 components or hardware, but does not include services that
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Amendment No. 1
192 require the transmission of data or information to or from the
193 motor vehicle while the service is being used. Payments required
194 under this subsection must be made within 60 days after the date
195 of sale of the feature or improvement. This subsection section
196 does not apply to sales by the applicant or licensee of motor
197 vehicles to its current employees, employees of companies
198 affiliated by common ownership, charitable not-for-profit
199 organizations, and the Federal Government.
200
201 A motor vehicle dealer who can demonstrate that a violation of,
202 or failure to comply with, any of the preceding provisions by an
203 applicant or licensee will or may adversely and pecuniarily
204 affect the complaining dealer, shall be entitled to pursue all
205 of the remedies, procedures, and rights of recovery available
206 under ss. 320.695 and 320.697.
207 Section 4. Subsection (6) of section 320.642, Florida
208 Statutes, is amended to read:
209 320.642 Dealer licenses in areas previously served;
210 procedure.—
211 (6) When a proposed addition or relocation concerns a
212 dealership that performs or is to perform only service, as
213 defined in s. 320.60 s. 320.60(16), and will not or does not
214 sell or lease new motor vehicles, as defined in s. 320.60 s.
215 320.60(15), the proposal shall be subject to notice and protest
216 pursuant to the provisions of this section.
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Bill No. CS/HB 637 (2023)
Amendment No. 1
217 (a) Standing to protest the addition or relocation of a
218 service-only dealership shall be limited to those instances in
219 which the applicable mileage requirement established in
220 subparagraphs (3)(a)2. and (3)(b)1. is met.
221 (b) The addition or relocation of a service-only
222 dealership shall not be subject to protest if:
223 1. The applicant for the service-only dealership location
224 is an existing motor vehicle dealer of the same line-make as the
225 proposed additional or relocated service-only dealership;
226 2. There is no existing dealer of the same line-make
227 closer than the applicant to the proposed location of the
228 additional or relocated service-only dealership; and
229 3. The proposed location of the additional or relocated
230 service-only dealership is at least 7 miles from all existing
231 motor vehicle dealerships of the same line-make, other than
232 motor vehicle dealerships owned by the applicant.
233 (c) In determining whether existing franchised motor
234 vehicle dealers are providing adequate representations in the
235 community or territory for the line-make in question in a
236 protest of the proposed addition or relocation of a service-only
237 dealership, the department may consider the elements set forth
238 in paragraph (2)(b), provided:
239 1. With respect to subparagraph (2)(b)1., only the impact
240 as it relates to service may be considered;
241 2. Subparagraph (2)(b)3. shall not be considered;
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Amendment No. 1
242 3. With respect to subparagraph (2)(b)9., only service
243 facilities shall be considered; and
244 4. With respect to subparagraph (2)(b)11., only the volume
245 of service business transacted shall be considered.
246 (d) If an application for a service-only dealership is
247 granted, the department must shall issue a license which permits
248 only service, as defined in s. 320.60 s. 320.60(16), and does
249 not permit the selling or leasing of new motor vehicles, as
250 defined in s. 320.60 s. 320.60(15). If a service-only dealership
251 subsequently seeks to sell new motor vehicles at its location,
252 the notice and protest provisions of this section shall apply.
253 Section 5. Subsection (1), paragraph (a) of subsection
254 (2), and subsection (4) of section 320.645, Florida Statutes,
255 are amended to read:
256 320.645 Restriction upon ownership of dealership by
257 licensee.—
258 (1) A No licensee, manufacturer, importer, or distributor,
259 manufacturer, or agent of the licensee, a manufacturer,
260 importer, or distributor, or any parent, subsidiary, common
261 entity, or officer, or employed representative of the licensee,
262 manufacturer, importer, or distributor, may not directly or
263 indirectly shall own, or operate, or control, by contract,
264 agreement, or otherwise either directly or indirectly, a motor
265 vehicle dealership for any line-make in this state if the
266 licensee, manufacturer, importer, or distributor has
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Amendment No. 1
267 manufactured, imported, or distributed for the sale or service
268 of motor vehicles of any line-make which have been or are
269 offered for sale under a franchise agreement with a motor
270 vehicle dealer in this state with an independent person. Any
271 person who is not prohibited by this section from owning,
272 operating, or controlling a motor vehicle dealership may be
273 issued a license pursuant to s. 320.27. Any person prohibited by
274 this section from owning, operating, or controlling a motor
275 vehicle dealership. A licensee may not be issued a motor vehicle
276 dealer license pursuant to s. 320.27. However, a no such
277 licensee subject to the prohibition in this section is not will
278 be deemed to be in violation of this section:
279 (a) When operating a motor vehicle dealership for a
280 temporary period, not to exceed 1 year, during the transition
281 from one owner of the motor vehicle dealership to another;
282 (b) When operating a motor vehicle dealership temporarily
283 for a reasonable period for the exclusive purpose of broadening
284 the diversity of its dealer body and enhancing opportun ities for
285 qualified persons who are part of a group that has historically
286 been underrepresented in its dealer body, or for other qualified
287 persons who the licensee deems lack the resources to purchase or
288 capitalize the dealership outright, in a bona fide relationship
289 with an independent person, other than a licensee or its agent
290 or affiliate, who has made a significant investment that is
291 subject to loss in the dealership within the dealership's first
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Bill No. CS/HB 637 (2023)
Amendment No. 1
292 year of operation and who can reasonably expect to acquire full
293 ownership of the dealership on reasonable terms and conditions;
294 or
295 (c) If the department determines, after a hearing on the
296 matter, pursuant to chapter 120, at the request of any person,
297 that there is no independent person available in the communi ty
298 or territory to own and operate the motor vehicle dealership in
299 a manner consistent with the public interest. This paragraph
300 applies only if the motor vehicle dealership at issue sells
301 motor vehicles of a line-make that, at the time of the hearing,
302 is offered for sale by at least one other existing motor vehicle
303 dealership not owned, operated, or controlled by the licensee,
304 an officer or employed representative of the licensee, a parent,
305 subsidiary, or common entity of the licensee, or a manufacturer,
306 importer, or distributor.
307
308 In the any such case of a, the licensee must continue to make
309 the motor vehicle dealership owned or operated pursuant to
310 paragraph (a), paragraph (b), or paragraph (c), the dealership
311 must be continually made available for sale to an independent
312 person at a fair and reasonable price. Approval of the sale of
313 such a motor vehicle dealership to a proposed motor vehicle
314 dealer shall not be unreasonably withheld.
315 (2) As used in this section, the term:
316 (a) "Independent person" is a person who is not an
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Amendment No. 1
317 officer, director, or employee of the licensee.
318 (4) Nothing in this chapter shall prohibit a distributor
319 as defined in s. 320.60 s. 320.60(5) or an affiliate thereof
320 which common entity that is not a manufacturer or importer, a
321 division of a manufacturer or importer, an entity that is
322 controlled by a manufacturer or importer, or a common entity of
323 a manufacturer or importer, and that is not owned, in whole or
324 in part, directly or indirectly, by a manufacturer or importer,
325 as defined in s. 320.60 s. 320.60(9), from receiving a license
326 or licenses as defined in s. 320.27 and owning and operating a
327 motor vehicle dealership or dealerships that sell or service
328 motor vehicles other than any line-make of motor vehicles
329 distributed by the distributor. A distributor or an affiliate
330 thereof may not receive a license pursuant to s. 320.27 for a
331 motor vehicle dealership, or own or operate a motor vehicle
332 dealership, that sells or services motor vehicles of the line -
333 make of motor vehicles distributed by the distributor.
334 Section 6. Section 320.67, Florida Statutes, is amended to
335 read:
336 320.67 Inquiry and inspection of books or other documents
337 of licensee.—
338 (1) The department shall conduct an inquiry of a licensee
339 may inspect the pertinent books, records, letters, and contracts
340 of a licensee relating to any written complaint alleging a
341 violation of ss. 320.61-320.70 made to it against such licensee
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Amendment No. 1
342 made by a motor vehicle dealer with a current franchise
343 agreement issued by the licensee, or a motor vehicle dealer
344 association with at least one member with a current franchise
345 agreement issued by the licensee.
346 (2) In the exercise of its duties under this section, the
347 department is granted and authorized to exercise the power of
348 subpoena for the purposes of compelling production of and
349 inspecting pertinent books, records, letters, and contracts of a
350 licensee and compelling the attendance of witnesses at
351 deposition and the production of any documentary evidence
352 necessary to the disposition by it of any written complaint
353 under this section. The inquiry required by this section must be
354 commenced within 30 days after receipt of the written complaint.
355 The department may allow the licensee that is the subject of the
356 complaint no more than 60 days after commencement of the inquiry
357 to provide a written response. Within 30 days after the deadline
358 for a written response by the licensee, the department shall
359 provide a written response to the complainant stating whether
360 the department intends to take action against the licensee under
361 subsection (3) and, if so, what action the department intends to
362 take. Any information obtained may not be used against the
363 licensee as the basis for a criminal prosecution under the laws
364 of this state.
365 (3) If, as the result of an inquiry conducted under thi s
366 section, the department determines that a licensee has violated
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 637 (2023)
Amendment No. 1
367 ss. 320.61-320.70, the department must take appropriate action
368 against the licensee, which may include license suspension or
369 revocation; denial of a license renewal application; assessment,
370 imposition, levy, and collection of an appropriate civil fine;
371 or instituting a civil action for issuance of an injunction
372 pursuant to s. 320.695.
373 (4) This section does not alter or affect the rights of a
374 motor vehicle dealer to bring a claim or action against a
375 licensee pursuant to any other provision of ss. 320.60-320.70.
376 Section 7. Subsection (13) of section 681.102, Florida
377 Statutes, is amended to read:
378 681.102 Definitions.—As used in this chapter, the term:
379 (13) "Manufacturer" means any person, whether a resident
380 or nonresident of this state, who manufactures or assembles
381 motor vehicles, or who manufactures or assembles chassis for
382 recreational vehicles, or who manufactures or installs on
383 previously assembled truck or recreational vehicle chas sis
384 special bodies or equipment which, when installed, forms an
385 integral part of the motor vehicle, or a distributor or an
386 importer as those terms are defined in s. 320.60 s. 320.60(5),
387 or an importer as defined in s. 320.60(7). A dealer as defined
388 in s. 320.60 may not s. 320.60(11)(a) shall not be deemed to be
389 a manufacturer, distributor, or importer as provided in this
390 section.
391 Section 8. Section 681.113, Florida Statutes, is amended
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 637 (2023)
Amendment No. 1
392 to read:
393 681.113 Dealer liability.—Except as provided in ss.
394 681.103(3) and 681.114(2), nothing in this chapter imposes any
395 liability on a dealer as defined in s. 320.60 s. 320.60(11)(a)
396 or creates a cause of action by a consumer against a dealer,
397 except for written express warranties made by the dealer apart
398 from the manufacturer's warranties. A dealer may not be made a
399 party defendant in any action involving or relating to this
400 chapter, except as provided in this section. The manufacturer
401 shall not charge back or require reimbursement by the dealer for
402 any costs, including, but not limited to, any refunds or vehicle
403 replacements, incurred by the manufacturer arising out of this
404 chapter, in the absence of evidence that the related repairs had
405 been carried out by the dealer in a manner substantially
406 inconsistent with the manufacturer's published instructions.
407
408 -----------------------------------------------------
409 T I T L E A M E N D M E N T
410 Remove everything before the enacting clause and insert:
411 An act relating to motor vehicle sales; amending s. 320.60,
412 F.S.; revising and providing definitions; amending s. 320.605,
413 F.S.; providing legislative intent; amending s. 320.64, F.S.;
414 prohibiting an applicant or a licensee from certain actions in
415 the allocation or distribution of motor vehicles to franchised
416 motor vehicle dealers; revising the definition of the term
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 637 (2023)
Amendment No. 1
417 "unfair"; prohibiting applicants and licensees from engaging in
418 certain activities; authorizing an applicant or a licensee, or a
419 common entity thereof, to sell or activate certain motor vehicle
420 features or improvements through remote electronic transmission;
421 providing for a payment of the percentage of such sale or
422 activation to a motor vehicle dealer; providing applicability;
423 requiring certain payments to be made within a certain
424 timeframe; amending s. 320.642, F.S.; conforming cross-
425 references; amending s. 320.645, F.S.; revising provisions
426 prohibiting a manufacturer, a distributor, or an importer from
427 owning, operating, or controlling a motor vehicle dealership in
428 this state; specifying when certain licenses may be and are
429 prohibited from being issued; revising exceptions to certain
430 prohibitions on licensees; providing applicability; making
431 technical changes; deleting the definition of the term
432 "independent person"; conforming cross-references; prohibiting a
433 distributor or affiliate thereof from receiving a certain
434 license under certain circumstances; amending s. 320.67, F.S.;
435 requiring the Department of Highway Safety and Motor Vehicles to
436 conduct an inquiry relating to certain written complaints;
437 providing purposes of the department's use of a subpoena;
438 authorizing the department to allow a written response to the
439 complaint; requiring the department to commence the inquiry
440 within a certain timeframe; requiring the department to provide
441 a certain written response to the complainant by a certain date;
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 637 (2023)
Amendment No. 1
442 requiring the department to take certain action if the
443 department determines that a licensee violated certain statutes;
444 providing construction; amending ss. 681.102 and 681.113, F.S.;
445 conforming cross-references; providing an effective date.
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CS/HB 639
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 639 Issuance of Special Beverage Licenses
SPONSOR(S): Regulatory Reform & Economic Development Subcommittee, Esposito
TIED BILLS: IDEN./SIM. BILLS: SB 1262
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform & Economic Development 15 Y, 0 N, As CS Wright Anstead
Subcommittee
2) Commerce Committee Wright Hamon
SUMMARY ANALYSIS
In Florida, alcoholic beverages are regulated by the Beverage Law, which regulates the manufacture,
distribution, and sale of wine, beer, and liquor by manufacturers, distributors, and vendors. The Division of
Alcoholic Beverages and Tobacco (division) in the Department of Business and Professional Regulation
(DBPR) administers and enforces the Beverage Law.
Florida law limits, by county, the number of alcoholic beverage licenses that may be issued for the sale of
distilled spirits, to one license per 7,500 residents within the county. These limited alcoholic beverage licenses
are known as “quota” licenses.
A “special license” is an exception to the quota licensing scheme, which allows certain entities to serve liquor
without a quota license. One such special license is a “special food service license” (SFS license), which
applies to a food service establishment that:
Has 2,500 square feet,
Is equipped to serve 150 persons at one time, and
Derives at least 51 percent of its gross food and beverage revenue from the sale of food and
nonalcoholic beverages.
The bill lowers requirements to qualify for an SFS license by reducing the minimum:
Service area to 2,000 square feet, and
Service capacity to 120 persons.
However, a food service establishment will still need to derive 51 percent or more gross sales from food and
nonalcoholic beverage sales in order to qualify for an SFS license.
The bill does not have a fiscal impact on local governments and has an indeterminate fiscal im pact on state
government.
The bill becomes effective upon becoming law.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Regulation of Alcoholic Beverages
In Florida, alcoholic beverages are regulated by the Beverage Law, 1 which regulates the manufacture,
distribution, and sale of wine, beer, and liquor by manufacturers, distributors, and vendors. 2 The
Division of Alcoholic Beverages and Tobacco (division) in the Department of Business and Professional
Regulation (DBPR) administers and enforces the Beverage Law.3
Special Food Service License
Florida law limits, by county, the number of alcoholic beverage licenses that may be issued for the sale
of distilled spirits, to one license per 7,500 residents within the county. These limited alcoholic beverage
licenses are known as “quota” licenses. The quota license is the only alcoholic beverage license that is
limited in number; all other types of alcoholic beverage licenses are available without limitation, if
certain conditions are met.4
A “special license” is an exception to the quota licensing scheme, which allows certain entities to serve
liquor without a quota license. One such special license is a “special food service license” (SFS
license), which applies to a food service establishment that:5
Has 2,500 square feet,6
Is equipped to serve 150 persons at one time, and
Derives at least 51 percent of its gross food and beverage revenue from the sale of food and
nonalcoholic beverages.
The required revenue percentage is computed as the sum of gross food and nonalcoholic beverage
revenue divided by the sum of gross food, alcoholic beverage, and non-alcoholic beverage revenue.7
Records of each purchase and each sale of food, alcoholic beverages, and nonalcoholic beverages
must be maintained for a period of 3 years.8
SFS licensees must be audited by the division for compliance with the food and nonalcoholic beverage
sales percentage requirements during the first 120-day operating period, and every one to four years
thereafter, depending on beverage revenue. Failure by an SFS licensee to satisfy the requirements as
to the percentages of food and nonalcoholic beverage sales results in revocation of the SFS license. An
SFS licensee whose license is revoked is ineligible to have an interest in a subsequent application for a
license for 120 days after the revocation.9
SFS licensees may sell or deliver alcoholic beverages in a sealed container for off-premises
consumption, including liquor-based beverages prepared by the licensee and packaged in a container
sealed by the licensee. Such licensees may not sell a bottle of distilled spirits sealed by a
manufacturer. The sale or delivery of such beverages must be accompanied by the sale of food.10
1 S. 561.01(6), F.S., provides that the “The Beverage Law” means chs. 561, 562, 563, 564, 565, 567, and 568, F.S.
2 See s. 561.14, F.S.
3 S. 561.02, F.S.
4 S. 561.20(1), F.S.
5 S. 561.20(2)(a)4., F.S.
6 The service area includes only the food service establishment’s buildings and other contiguous outside areas which are
under the management and control of the licensed food service establishment . Rule R. 61A-3.0141(1), F.A.C.
7 R. 61A-3.0141(4), F.A.C.
8 R. 61A-3.0141(3), F.A.C.
9 Id.
10 Id.
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There are several exceptions to the Beverage Law created by special laws, which are applicable to
specific local areas. Many reduce certain licensing requirements for special zones in local jurisdictions.
For example, ch. 2022-259, L.O.F., allows DBPR to issue an SFS license to restaurants within the
Kings Avenue Commercial Corridor in Jacksonville that:
Have 1,000 square feet,
Are equipped to serve 50 persons at one time, and
Derive at least 51 percent of its gross food and beverage revenue from the sale of food and
nonalcoholic beverages.
Effect of the Bill
The bill lowers requirements to qualify for an SFS license by reducing the minimum:
Service area requirement to 2,000 square feet, and
Service capacity to 120 persons.
However, a food service establishment will still need to derive 51 percent or more gross sales from food
and nonalcoholic beverage sales in order to qualify for an SFS license.
B. SECTION DIRECTORY:
Section 1: Amends s. 561.20, F.S., revising requirements for a special restaurant license.
Section 2: Provides an effective date.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
The bill may allow more restaurants to obtain an SFS license, which would increase fees to the
state.
2. Expenditures:
The bill may allow more restaurants to obtain an SFS license, which would require more regulatory
actions, such as inspections and audits, by DBPR.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may allow more restaurants to obtain an SFS license, which may make it less expensive to own
and operate a restaurant that sells alcoholic beverages and could lead to more restaurants opening. It
could also increase beverage service options for consumers.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
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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:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On March 28, 2023, the Regulatory Reform & Economic Development Subcommittee adopted an
amendment and reported the bill favorably as a committee substitute. The committee substitute:
Reduced the service area size requirements from 2,500 square feet to 2,000 square feet, and
Reduced the seating capacity requirements from 150 persons to 120 persons.
This analysis is drafted to the committee substitute as passed by the Regulatory Reform & Economic
Development Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 639 2023
1 A bill to be entitled
2 An act relating to the issuance of special beverage
3 licenses; amending s. 561.20, F.S.; revising
4 requirements for issuing special beverage licenses to
5 certain food service establishments; providing an
6 effective date.
7
8 Be It Enacted by the Legislature of the State of Florida:
9
10 Section 1. Paragraph (a) of subsection (2) of section
11 561.20, Florida Statutes, is amended to read:
12 561.20 Limitation upon number of licenses issued.—
13 (2)(a) The limitation of the number of licenses as
14 provided in this section does not prohibit the issuance of a
15 special license to:
16 1. Any bona fide hotel, motel, or motor court of not fewer
17 than 80 guest rooms in any county having a population of less
18 than 50,000 residents, and of not fewer than 100 guest rooms in
19 any county having a population of 50,000 residents or greater;
20 or any bona fide hotel or motel located in a historic structure,
21 as defined in s. 561.01(20), with fewer than 100 guest rooms
22 which derives at least 51 percent of its gross revenue from the
23 rental of hotel or motel rooms, which is licensed as a public
24 lodging establishment by the Division of Hotels and Restaurants;
25 provided, however, that a bona fide hotel or motel with no fewer
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26 than 10 and no more than 25 guest rooms which is a historic
27 structure, as defined in s. 561.01(20), in a municipality that
28 on the effective date of this act has a population, according to
29 the University of Florida's Bureau of Economic and Business
30 Research Estimates of Population for 1998, of no fewer than
31 25,000 and no more than 35,000 residents and that is within a
32 constitutionally chartered county may be issued a special
33 license. This special license shall allow the sale and
34 consumption of alcoholic beverages only on the licensed premises
35 of the hotel or motel. In addition, the hotel or motel must
36 derive at least 60 percent of its gross revenue from the rental
37 of hotel or motel rooms and the sale of food and nonalcoholic
38 beverages; provided that this subparagraph shall supersede local
39 laws requiring a greater number of hotel rooms;
40 2. Any condominium accommodation of which no fewer than
41 100 condominium units are wholly rentable to transients and
42 which is licensed under chapter 509, except that the license
43 shall be issued only to the person or corporation that operates
44 the hotel or motel operation and not to the association of
45 condominium owners;
46 3. Any condominium accommodation of which no fewer than 50
47 condominium units are wholly rentable to transients, which is
48 licensed under chapter 509, and which is located in any county
49 having home rule under s. 10 or s. 11, Art. VIII of the State
50 Constitution of 1885, as amended, and incorporated by reference
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51 in s. 6(e), Art. VIII of the State Constitution, except that the
52 license shall be issued only to the person or corporation that
53 operates the hotel or motel operation and not to the association
54 of condominium owners;
55 4. A food service establishment that has 2,000 2,500
56 square feet of service area, is equipped to serve meals to 120
57 150 persons at one time, and derives at least 51 percent of its
58 gross food and beverage revenue from the sale of food and
59 nonalcoholic beverages during the first 120-day operating period
60 and the first 12-month operating period thereafter. Subsequent
61 audit timeframes must be based upon the audit percentage
62 established by the most recent audit and conducted on a
63 staggered scale as follows: level 1, 51 percent to 60 percent,
64 every year; level 2, 61 percent to 75 percent, every 2 years;
65 level 3, 76 percent to 90 percent, every 3 years; and level 4,
66 91 percent to 100 percent, every 4 years. A licensee under this
67 subparagraph may sell or deliver alcoholic beverages in a sealed
68 container for off-premises consumption if the sale or delivery
69 is accompanied by the sale of food within the same order. Such
70 authorized sale or delivery includes wine-based and liquor-based
71 beverages prepared by the licensee or its employee and packaged
72 in a container sealed by the licensee or its employee. This
73 subparagraph may not be construed to authorize public food
74 service establishments licensed under this subparagraph to sell
75 a bottle of distilled spirits sealed by a manufacturer. Any sale
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76 or delivery of malt beverages must comply with the co ntainer
77 size, labeling, and filling requirements imposed under s.
78 563.06. Any delivery of an alcoholic beverage under this
79 subparagraph must comply with s. 561.57. An alcoholic beverage
80 drink prepared by the vendor and sold or delivered for
81 consumption off the premises must be placed in a container
82 securely sealed by the licensee or its employees with an
83 unbroken seal that prevents the beverage from being immediately
84 consumed before removal from the premises. Such alcoholic
85 beverage also must be placed in a bag or other container that is
86 secured in such a manner that it is visibly apparent if the
87 container has been subsequently opened or tampered with, and a
88 dated receipt for the alcoholic beverage and food must be
89 provided by the licensee and attached to the bag or container.
90 If transported in a motor vehicle, an alcoholic beverage that is
91 not in a container sealed by the manufacturer must be placed in
92 a locked compartment, a locked trunk, or the area behind the
93 last upright seat of a motor vehicle. It is a violation of the
94 prohibition in s. 562.11 to allow any person under the age of 21
95 to deliver alcoholic beverages on behalf of a vendor. The vendor
96 or the agent or employee of the vendor must verify the age of
97 the person making the delivery of the alcoholic beverage before
98 allowing any person to take possession of an alcoholic beverage
99 for the purpose of making a delivery on behalf of a vendor under
100 this section. A food service establishment granted a special
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101 license on or after January 1, 1958, pursuant to general or
102 special law may not operate as a package store and may not sell
103 intoxicating beverages under such license after the hours of
104 serving or consumption of food have elapsed. Failure by a
105 licensee to meet the required percentage of food and
106 nonalcoholic beverage gross revenues during the covered
107 operating period shall result in revocation of the license or
108 denial of the pending license application. A licensee whose
109 license is revoked or an applicant whose pending application is
110 denied, or any person required to qualify on the special license
111 application, is ineligible to have any interest in a subsequent
112 application for such a license for a period of 120 days after
113 the date of the final denial or revocation;
114 5. Any caterer, deriving at least 51 percent of its gross
115 food and beverage revenue from the sale of food and nonalcoholic
116 beverages at each catered event, licensed by the Division of
117 Hotels and Restaurants under chapter 509. This subparagraph does
118 not apply to a culinary education program, as defined in s.
119 381.0072(2), which is licensed as a public food service
120 establishment by the Division of Hotels and Restaurants and
121 provides catering services. Notwithstanding any law to the
122 contrary, a licensee under this subparagraph shall sell or serve
123 alcoholic beverages only for consumption on the premises of a
124 catered event at which the licensee is also providing prepared
125 food, and shall prominently display its license at any catered
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126 event at which the caterer is selling or serving alcoholic
127 beverages. A licensee under this subparagraph shall purchase all
128 alcoholic beverages it sells or serves at a catered event from a
129 vendor licensed under s. 563.02(1), s. 564.02(1), or licensed
130 under s. 565.02(1) subject to the limitation imposed in
131 subsection (1), as appropriate. A licensee under this
132 subparagraph may not store any alcoholic beverages to be sold or
133 served at a catered event. Any alcoholic beverages purchased by
134 a licensee under this subparagraph for a catered event that are
135 not used at that event must remain with the customer; provided
136 that if the vendor accepts unopened alcoholic beverages, the
137 licensee may return such alcoholic beverages to the vendor for a
138 credit or reimbursement. Regardless of the county or counties in
139 which the licensee operates, a licensee under this subparagraph
140 shall pay the annual state license tax set forth in s.
141 565.02(1)(b). A licensee under this subparagraph must maintain
142 for a period of 3 years all records and receipts for each
143 catered event, including all contracts, customers' names, event
144 locations, event dates, food purchases and sales, alcoholic
145 beverage purchases and sales, nonalcoholic beverage purchases
146 and sales, and any other records required by the department by
147 rule to demonstrate compliance with the requirements of this
148 subparagraph. Notwithstanding any law to the contrary, any
149 vendor licensed under s. 565.02(1) subject to the limitation
150 imposed in subsection (1), may, without any additional licensure
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151 under this subparagraph, serve or sell alcoholic beverages for
152 consumption on the premises of a catered event at which prepared
153 food is provided by a caterer licensed under chapter 509. If a
154 licensee under this subparagraph also possesses any other
155 license under the Beverage Law, the license issued under this
156 subparagraph may not authorize the holder to conduct activities
157 on the premises to which the other license or licenses apply
158 that would otherwise be prohibited by the terms of that license
159 or the Beverage Law. This section does not permit the licensee
160 to conduct activities that are otherwise prohibited by the
161 Beverage Law or local law. The Division of Alcoholic Beverages
162 and Tobacco is hereby authorized to adopt rules to administer
163 the license created in this subparagraph, to include rules
164 governing licensure, recordkeeping, and enforcement. The first
165 $300,000 in fees collected by the division each fiscal year
166 pursuant to this subparagraph shall be deposited in the
167 Department of Children and Families' Operations and Maintenance
168 Trust Fund to be used only for alcohol and drug abuse education,
169 treatment, and prevention programs. The remainder of the fees
170 collected shall be deposited into the Hotel and Restaurant Trust
171 Fund created pursuant to s. 509.072; or
172 6. A culinary education program as defined in s.
173 381.0072(2) which is licensed as a public food service
174 establishment by the Division of Hotels and Restaurants.
175 a. This special license shall allow the sale and
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176 consumption of alcoholic beverages on the licensed premises of
177 the culinary education program. The culinary education program
178 shall specify designated areas in the facility where the
179 alcoholic beverages may be consumed at the time of application.
180 Alcoholic beverages sold for consumption on the premises may be
181 consumed only in areas designated under s. 561.01(11) and may
182 not be removed from the designated area. Such license shall be
183 applicable only in and for designated areas used by the culinary
184 education program.
185 b. If the culinary education program provides catering
186 services, this special license shall also allow the sale and
187 consumption of alcoholic beverages on the premises of a catered
188 event at which the licensee is also providing prepared food. A
189 culinary education program that provides catering services is
190 not required to derive at least 51 percent of its gross revenue
191 from the sale of food and nonalcoholic beverages.
192 Notwithstanding any law to the contrary, a licensee that
193 provides catering services under this sub-subparagraph shall
194 prominently display its beverage license at any catered event at
195 which the caterer is selling or serving alcoholic beverages.
196 Regardless of the county or counties in which the licensee
197 operates, a licensee under this sub-subparagraph shall pay the
198 annual state license tax set forth in s. 565.02(1)(b). A
199 licensee under this sub-subparagraph must maintain for a period
200 of 3 years all records required by the department by rule to
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201 demonstrate compliance with the requirements of this sub -
202 subparagraph.
203 c. If a licensee under this subparagraph also possesses
204 any other license under the Beverage Law, the license issued
205 under this subparagraph does not authorize the holder to conduct
206 activities on the premises to which the other license or
207 licenses apply that would otherwise be prohibited by the terms
208 of that license or the Beverage Law. This subparagraph does not
209 permit the licensee to conduct activities that are otherwise
210 prohibited by the Beverage Law or local law. Any culinary
211 education program that holds a license to sell alcoholic
212 beverages shall comply with the age requirements se t forth in
213 ss. 562.11(4), 562.111(2), and 562.13.
214 d. The Division of Alcoholic Beverages and Tobacco may
215 adopt rules to administer the license created in this
216 subparagraph, to include rules governing licensure,
217 recordkeeping, and enforcement.
218 e. A license issued pursuant to this subparagraph does not
219 permit the licensee to sell alcoholic beverages by the package
220 for off-premises consumption.
221
222 However, any license heretofore issued to any such hotel, motel,
223 motor court, or restaurant or hereafter issued to any such
224 hotel, motel, or motor court, including a condominium
225 accommodation, under the general law may not be moved to a new
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226 location, such license being valid only on the premises of such
227 hotel, motel, motor court, or restaurant. Licenses issued to
228 hotels, motels, motor courts, or restaurants under the general
229 law and held by such hotels, motels, motor courts, or
230 restaurants on May 24, 1947, shall be counted in the quota
231 limitation contained in subsection (1). Any license issued for
232 any hotel, motel, or motor court under this law shall be issued
233 only to the owner of the hotel, motel, or motor court or, in the
234 event the hotel, motel, or motor court is leased, to the lessee
235 of the hotel, motel, or motor court; and the license shall
236 remain in the name of the owner or lessee so long as the license
237 is in existence. Any special license now in existence heretofore
238 issued under this law cannot be renewed except in the name of
239 the owner of the hotel, motel, motor court, or restaurant or, in
240 the event the hotel, motel, motor court, or restaurant is
241 leased, in the name of the lessee of the hotel, motel, motor
242 court, or restaurant in which the license is located and must
243 remain in the name of the owner or lessee so long as the license
244 is in existence. Any license issued under this section shall be
245 marked "Special," and nothing herein provided shall limit,
246 restrict, or prevent the issuance of a special license for any
247 restaurant or motel which shall hereafter meet the requirements
248 of the law existing immediately before the effective date of
249 this act, if construction of such restaurant has commenced
250 before the effective date of this act and is completed within 30
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hb0639-01-c1
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 639 2023
251 days thereafter, or if an application is on file for such
252 special license at the time this act takes effect; and any such
253 licenses issued under this proviso may be annually renewed as
254 now provided by law. Nothing herein prevents an application for
255 transfer of a license to a bona fide purchaser of any hotel,
256 motel, motor court, or restaurant by the purchaser of such
257 facility or the transfer of such license pursuant to law.
258 Section 2. This act shall take effect upon becoming a law.
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hb0639-01-c1
COMMERCE COMMITTEE
CS/HB 639 by Rep. Esposito
Issuance of Special Beverage Licenses
AMENDMENT SUMMARY
April 17, 2023
Amendment 1 by Rep. Esposito (line 257):
• Expands ability to obtain a club license for certain beach or cabana clubs to include
those with bathroom facilities for at least 100 persons.
• Replaces the requirement to have a restaurant with seats with tables for at least 100
persons to obtain a club license for certain beach or cabana clubs with the requirement
to have any type of public food service establishment of any seating size.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 639 (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: Commerce Committee
2 Representative Esposito offered the following:
3
4 Amendment (with directory and title amendments)
5 Between lines 257 and 258, insert:
6 (7)
7 (d) Any corporation, partnership, or individual operating
8 a club which owns or leases and which maintains any bona fide
9 beach or cabana club consisting of beach facilities, swimming
10 pool, locker rooms or bathroom with facilities for at least 100
11 persons, and a public food service establishment as defined in
12 s. 509.013(5)(a) restaurant with seats at tables for at least
13 100 persons, comprising in all an area of at least 5,000 square
14 feet located on a contiguous tract of land of in excess of 1
15 acre may be issued a license under s. 565.02(4). The failure of
833857 - h0639-line257.docx
Published On: 4/14/2023 5:55:16 PM
Page 1 of 2
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 639 (2023)
Amendment No. 1
16 such club to maintain the facilities shall be a ground for
17 revocation of the license.
18
19
20 -----------------------------------------------------
21 D I R E C T O R Y A M E N D M E N T
22 Remove lines 10-11 and insert:
23 Section 1. Paragraph (a) of subsection (2) and paragraph
24 (d) of subsection (7) of section 561.20, Florida Statutes, are
25 amended to read:
26
27 -----------------------------------------------------
28 T I T L E A M E N D M E N T
29 Remove line 5 and insert:
30 certain food service establishments and certain clubs; providing
31 an
833857 - h0639-line257.docx
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Page 2 of 2
CS/HB 715
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 715 Compensation of Lottery Ticket Retailers
SPONSOR(S): State Administration & Technology Appropriations Subcommittee, Mooney
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform & Economic Development 14 Y, 1 N Thompson Anstead
Subcommittee
2) State Administration & Technology 11 Y, 2 N, As CS Helpling Topp
Appropriations Subcommittee
3) Commerce Committee Thompson Hamon
SUMMARY ANALYSIS
Gambling is generally prohibited and illegal in Florida. However, in 1986, Florida voters adopted a
constitutional amendment authorizing the creation of the Florida Lottery (Lottery). Since that time, the Lottery
has grown into one of the largest state-run lotteries in the country, with annual sales exceeding $9 billion.
Lottery tickets can be purchased at over 13,000 retail locations throughout the state.
The Department of the Lottery (Lottery) is charged with supervising and operating the lottery in accordance
with the provisions of the Florida Public Education Lottery Act. Gross revenues from the sale of lottery products
are distributed to prizes, Lottery expenses, and transfers to the Educational Enhancement Trust Fund (EETF).
The Lottery contracts with retailers (e.g., supermarkets, convenience stores, gas stations, and newsstands) to
provide adequate and convenient availability of lottery tickets, and is authorized to adopt rules to establish the
manner and amount of compensation of retailers. Prior to Fiscal Year 2022-2023, compensation for retailers
was set at 5 percent commission for tickets sold and 1 percent commission for paying prizes up to $600.
However, during the 2022 Legislative Session, the Legislature authorized, for the 2022-2023 fiscal year only,
effective July 1, 2022, the commission for Florida Lottery ticket sales to be 5.75 percent of the purchase price
of each ticket sold or issued as a prize by a retailer. Prize payment commissions were excluded. Effective July
1, 2023, the compensation for retailers will return to 5 percent.
The bill establishes a permanent 6 percent commission to retailers for the purchase price of each ticket sold or
issued as a prize by a retailer. The bill limits any additional compensation to funding provided in the General
Appropriations Act.
The bill increases the estimated commission paid to Florida lottery retailers by $37.8 million, compared to the
estimated 5 percent commission that would be provided in Fiscal Year 2023-2024. See Fiscal Analysis and
Economic Impact Statement.
The effective date of the bill is 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: 4/13/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
General Overview of Lottery in Florida
In general, gambling is illegal in Florida.1 Chapter 849, F.S., prohibits keeping a gambling house, 2
running a lottery,3 or the manufacture, sale, lease, play, or possession of slot machines. 4 Certain
exceptions have been authorized, with restrictions on permitted locations, operators, and prizes,
including penny-ante games,5 bingo,6 cardrooms,7 charitable drawings,8 game promotions
(sweepstakes),9 and bowling tournaments.10 In addition, Chapters 550 and 551, F.S., respectively,
authorize pari-mutuel wagering at licensed facilities and slot machine gaming at specified locations.
Section 7 of Article X of the Florida Constitution provides, “Lotteries, other than the types of pari-mutuel
pools authorized by law as of the effective date of this constitution, are hereby prohibited in this state.” 11
In 1986, Florida voters approved an amendment to the Florida Constitution to allow the state to operate
a lottery. Section 15 of Article X of the Florida Constitution provides as follows:
Lotteries may be operated by the state…. On the effective date of this amendment,
the lotteries shall be known as the Florida Education Lotteries. Net proceeds derived
from the lotteries shall be deposited to a state trust fund, to be designated The State
Education Lotteries Trust Fund, to be appropriated by the Legislature. The schedule
may be amended by general law.
In 1987, the Legislature created the Florida Public Education Lottery Act,12 which established a state
lottery system intended primarily to generate revenue for public education of the state. 13 The
Department of the Lottery (Lottery) is charged with supervising and operating the lottery in accordance
with the provisions of the Florida Public Education Lottery Act and rules adopted pursuant thereto.14
In 1988, the Lottery began offering lottery games with a $1 weekly drawing. 15 Since then, the Lottery
has grown to include approximately 80 different scratch-off games available at over 13,000 retailer
locations, with lottery ticket prices ranging from $1 to $50. 16
Lottery Revenues
In sum, for Fiscal Year 2021-22, the Florida Lottery:
Prizes totaled $6.245 billion;
Retailer commissions totaled $523.1 million;
1 S. 849.08, F.S.
2 S. 849.01, F.S.
3 S. 849.09, F.S.
4 S. 849.16, F.S.
5 S. 849.085, F.S.
6 S. 849.0931, F.S.
7 S. 849.086, F.S.
8 S. 849.0935, F.S.
9 S. 849.094, F.S., authorizes game promotions in connection with the sale of consumer products or services.
10 S. 546.10, F.S.
11 The pari-mutuel pools that were authorized by law on the effective date of the Florida Constitution (Nov. 5, 1968) include
horseracing, greyhound racing and jai alai games.
12 Ss. 24.101 to 24.124, F.S.
13 S. 24.102, F.S.
14 S. 24.105(2), F.S.
15 Florida Lottery, History, http://www.flalottery.com/history (last visited Feb. 24, 2023).
16 Florida Lottery, Scratch Offs, http://www.flalottery.com/scratch-offs?amount=30 (last visited Feb. 24, 2023).
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Ticket sales totaled $9.325 billion;
Transfers to the EETF totaled $2.33 billion; and
Ranked the highest among U.S. lotteries in total sales and sixth highest among U.S. lotteries in
per capita sales.17
Gross revenues from the sale of lottery products are distributed to prizes, Lottery expenses, and
transfer to the Educational Enhancement Trust Fund (EETF).18 The Lottery determines the variable
percentage of the gross revenue from the sale of draw and scratch-off tickets that is returned to the
public in the form of prizes in a manner designed to maximize the amount of revenue earned to
enhance education. Gross sales revenue also is used to pay the expenses associated with running the
Lottery, including the cost of its retailer network, draw and scratch-off game vendors, advertising
vendors, and its in-house operation. The remainder of gross sales revenue is transferred to the
EETF.19
Lottery Retailers
The Lottery contracts with retailers 20 (e.g., supermarkets, convenience stores, gas stations, and
newsstands) to provide adequate and convenient availability of lottery tickets. 21 Lottery retailers receive
support from the Lottery in the following ways, at no cost to the retailer: 22
In-store full service from a Lottery Sales Representative.
Point-of-sale material.
Ongoing training.
In-store promotional opportunities.
A dedicated Retailer Hotline for quick assistance.
The Lottery is authorized to adopt rules to establish the manner and amount of compensation of
retailers.23 A five percent sales commission was established in 198724 and remained until July 1, 2022.
In addition, prior to Fiscal Year 2022-2023, retailers also received a separate one percent commission
for paying prizes of less than $600.25
For the 2022-2023 fiscal year only, effective July 1, 2022, the Florida Legislature adopted a specific
commission for Florida Lottery ticket sales of 5.75 percent of the purchase price of each ticket sold or
issued as a prize by a retailer. Any additional retailer compensation is limited to the Florida Lottery
Retailer Bonus Commission program appropriated in Specific Appropriation 2759U of the 2022-2023
General Appropriations Act.26 The commission does not include the one percent commission for paying
prizes.
According to the Lottery, the 5.75 percent is a flat sales commission on both draw and scratch-off ticket
sales. Lottery retailers sell scratch-off tickets on consignment. Retailers receive full books of scratch-off
tickets at no cost, and after selling the tickets, receive a commission for selling those tickets to players.
After tickets are sold, the retailer reconciles the book of tickets through the Lottery terminal, which then
charges their account, less a 5.75 percent commission. Draw game ticket sales are automatically
registered on the Lottery terminal and retailers are charged according to what they sell, less a 5.75
17 Office of Program Policy Analysis and Gov’t Accountability, Review of the Florida Lottery, 2022, Report No. 23-02, (Jan. 2023),
https://oppaga.fl.gov/Documents/Reports/23-02.pdf at page 1, (last visited Feb. 24, 2023).
18 S. 24.121(1), F.S.
19 Office of Program Policy Analysis and Gov’t Accountability, Government Program Summaries, Department of the Lottery, 2022,
https://oppaga.fl.gov/ProgramSummary/ProgramDetail?programNu mber=2090 (last visited Feb. 27, 2023).
20 S. 24.103(5), F.S., defines “retailer” as “a person who sells lottery tickets on behalf of the dep artment pursuant to a contract.”
21 S. 24.105(16), F.S.
22 Florida Department of the Lottery, Agency Analysis of House Bill 715, p. 2 (Mar. 3, 2023).
23 S. 24.105(9)(i), F.S.
24 R. 53ER87-44, F.A.C.
25 Id.
26 Id.
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percent commission. There is no cap on the amount of sales commissions a retailer can receive, the
more a retailer sells, the more they receive in commissions.27
According to reports, the top 10 lottery-selling locations for the 2019 fiscal year, including total net
sales, included the following:28
State Line Gift Shop, McDavid: $5,505,257.50
Fortune Liquors, Campbellton: $5,384,016.50
Friendly Mini Mart, Bonifay: $4,577,112
Mercado Miami, Miami: $4,289,590
Flora Bama Liquor, Pensacola: $3,558,104.50
Publix, Clearwater: $3,503,670
Edgewood Shell, Jacksonville: $3,484,808
Circle K, Pensacola: $3,445,720.50
Publix, West Palm Beach: $3,403,995.50
Publix, Loxahatchee: $3,367,386.50
Proposed Changes
The bill establishes a permanent 6 percent commission to retailers for the purchase price of each ticket
sold or issued as a prize by a retailer. The bill limits any additional compensation to funding provided in
the General Appropriations Act.
SECTION DIRECTORY:
Section 1: Amends s. 24.105, F.S., relating to powers and duties of the department.
Section 2: Provides an effective date.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
See Fiscal Comments.
2. Expenditures:
See Fiscal Comments.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
27 Florida Department of the Lottery, Agency Analysis of House Bill 715, p. 2 (Mar. 3, 2023).
28 Dan Sweeney, Where do the most Florida Lottery tickets get sold? Bet you can’t guess., (Mar. 13, 2020),https://www.sun-
sentinel.com/news/sound-off-south-florida/fl-ne-sosf-florida-lottery-retail-sales-20200313-v m4qu7ovyne4vgunovkhl4cyji-story.html
(last visited Mar. 26, 2023).
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Lottery retailers would see an increase in commissions for lottery ticket sales.
D. FISCAL COMMENTS:
Based on the February 21, 2023, Lottery Revenue Estimating Conference’s projected ticket sales, the
bill would increase the commission paid to retailers by $37.8 million in Fiscal Year 2023-2024, $38.0
million in Fiscal Year 2024-2025, and $38.4 million in Fiscal Year 2025-2026. This is the estimated
increase over the 5 percent ticket sale commission, including the one percent for cashing prizes, that
was authorized in Fiscal Year 2021-2022.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
According to the Lottery, it would need to amend a current rule to account for the increased sales
commissions. The Florida Public Education Lottery Act provides sufficient rulemaking authority.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On April 12, 2023, the State Administration & Technology Appropriations Subcommittee adopted one
amendment and reported the bill favorably as a committee substitute. The amendment limits any
additional compensation for retailers to funding provided in the General Appropriations Act.
This analysis is drafted to the committee substitute as passed by the State Administration &
Technology Appropriations Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 715 2023
1 A bill to be entitled
2 An act relating to compensation of lottery ticket
3 retailers; amending s. 24.105, F.S.; providing
4 retailer compensation for lottery ticket sales by a
5 specified date; providing a limitation on additional
6 retailer compensation; providing an effective date.
7
8 Be It Enacted by the Legislature of the State of Florida:
9
10 Section 1. Paragraph (i) of subsection (9) of section
11 24.105, Florida Statutes, as amended by chapter 2022-157, Laws
12 of Florida, is amended to read:
13 24.105 Powers and duties of department.—The department
14 shall:
15 (9) Adopt rules governing the establishment and operation
16 of the state lottery, including:
17 (i) The manner and amount of compensation of retailers.
18 However, effective July 1, 2023, the commission for Florida
19 Lottery ticket sales shall be 6 percent of the purchase price of
20 each ticket sold or issued as a prize by the retailer. Any
21 additional retailer compensation is limited to the Florida
22 Lottery Retailer Bonus Commission program appropriated annually
23 in the General Appropriations Act or any other specific
24 compensation appropriated by the act.
25 Section 2. This act shall take effect July 1, 2023.
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hb0715-01-c1
CS/HB 807
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 807 License or Permit to Operate Vehicle for Hire
SPONSOR(S): Regulatory Reform & Economic Development Subcommittee, Borrero
TIED BILLS: IDEN./SIM. BILLS: SB 1700
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY
CHIEF
1) Regulatory Reform & Economic 12 Y, 1 N, As Larkin Anstead
Development Subcommittee CS
2) Local Administration, Federal Affairs & 12 Y, 4 N Burgess Darden
Special Districts Subcommittee
3) Commerce Committee Larkin Hamon
SUMMARY ANALYSIS
Motor vehicles used for transporting persons or goods for compensation are called “vehicles for-hire” or
“transportation for-hire.” The transport of goods and other personal property in a motor vehicle by a corporation
or association for its stockholders, shareholders, and members, cooperative or otherwise, is also considered
transportation “for hire.”
Some counties and municipalities require persons to obtain a permit or license to operate a vehicle for-hire
within its jurisdiction. Counties are authorized by general law to license and regulate taxis, jitneys, limousines,
rental cars, and other passenger vehicles for-hire that operate in the unincorporated areas of the county. Some
municipalities currently license and regulate vehicles for-hire under their broad general powers because they
are not currently prohibited from doing so in general law. Similarly, county airports and airport authorities are
not restricted from licensing and regulating vehicles for-hire.
The bill:
Prohibits a county or municipality from requiring a person to obtain an additional license from such
county or municipality when that person holds a valid, active license or permit to operate a vehicle for-
hire in any other county or municipality if the person:
o Holds a valid, active license or permit to operate a vehicle for-hire in the county or municipality
in which the person permanently resides.
o Has not had a license or permit to operate a vehicle for hire suspended or revoked within the
preceding 5 years.
Prohibits an airport from requiring a person to obtain an additional license from such airport when a
person holds a valid, active license or permit issued by another airport to operate a vehicle for-hire.
Defines airport in this section as a commercial service airport.
The bill provides an effective date of July 1, 2023.
The bill may have an insignificant indeterminate fiscal impact on local governments.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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DATE: 4/15/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
License or Permit to Operate a Vehicle for-Hire- Current Situation
Background
With certain exceptions 1, offering for lease or rent any motor vehicle or offering passengers
transportation in exchange for compensation in the State of Florida qualifies the vehicle as a “for-hire
vehicle.” A “for-hire vehicle” is a motor vehicle used for transporting persons or goods for
compensation. When goods or passengers are transported for compensation in a motor vehicle outside
a municipal corporation of this state, or when goods are transported for compensation in a motor
vehicle not owned by the person owning the goods, such transportation is considered “for hire.” In
addition, the carriage of goods and other personal property in a motor vehicle by a corporation or
association for its stockholders, shareholders, and members, cooperative or otherwise, is transportation
“for hire.”2
Florida law establishes specific financial responsibility requirements applicable to for-hire vehicles. For-
hire vehicles, such as taxis and limousines, must maintain a motor vehicle liability policy with minimum
limits of $125,000 per person for bodily injury, $250,000 per incident for bodily injury, and $50,000 for
property damage.3 The owner or operator of a for-hire vehicle may also prove financial responsibility by
providing satisfactory evidence of holding a motor vehicle liability policy issued by an insurance carrier,
which is a member of the Florida Insurance Guaranty Association, or by providing a certificate of self-
insurance.4
Vehicles for-hire are not the same as transportation network companies or TNC’s, like Uber or Lyft. The
regulation and licensing of TNC’s are expressly preempted to the state and are regulated by the
Department of Financial Services.5
The State imposes an annual license taxes on certain types of motor vehicles for-hire upon registration
or renewal, including locally operated motor vehicles for-hire. These taxes range from: $17 flat plus
$1.50 per cwt6 to $3.50 flat plus $1.50 per cwt.7 However, the state does not require special licenses for
drivers for vehicles for-hire.
Counties
Counties are specifically authorized by general law to license and regulate taxis, jitneys, limousines,
rental cars, and other passenger vehicles for-hire that operate in the unincorporated areas of the
county.8 The county may impose licensing fees in order to license these vehicles for-hire.
Municipalities
Municipalities have broad home rule powers authorizing them to enact legislation concerning any
subject matter upon which the Legislature may act, except:
The subjects of annexation, merger, and exercise of extraterritorial power, which require general
or special law pursuant to s. 2(c), Art. VIII of the State Constitution;
1 S. 320.01(15)(b), F.S.
2 S. 320.01(15)(a), F.S.
3 S. 324.032(1), F.S.
4 S. 324.031, F.S.
5 S. 627.748(17)(a), F.S.
6 “Cwt” means the weight per hundred pounds, or major fraction thereof, of a motor vehicle. S. 320.01(8), F.S.
7 S 320.08(6) and (14), F.S.
8 S. 125.01(1)(n), F.S.; an incorporated area of the county means that the area is not loc ated within the boundaries of an incorporated
municipality.
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Any subject expressly prohibited by the constitution;
Any subject expressly preempted to state or county government by the constitution or by
general law; or
Any subject preempted to a county pursuant to a county charter adopted under the authority of
ss. 1(g), 3, and 6(e), Art. VIII of the State Constitution.9
A municipality is allowed to impose reasonable regulatory fees, proportionate with the cost of the
regulatory activity.10
Currently, counties and municipalities differ on whether they require vehicles for-hire to be licensed and
regulated. Some counties require licensure and some do not. Some cities require licensure for vehicles
for-hire within the city and also at the airport, while others only require the license for the city but not the
airport and vis-a-versa. Here are some examples of local requirements:11
Miami-Dade County’s Passenger Transportation Regulatory Division regulates for-hire
chauffeurs and vehicles such as taxicabs, limousines, passenger motor carriers, including
jitneys and tour vans. The county charges $70 for an initial inspection fee, quarterly, semi-
annual and annual inspection fees of $38, depending on the type of service; $35 for re-
inspection; and $20 for a replacement decal. The For-Hire application fees are non-refundable,
and are separate from the annual license fee, inspection fees and Local Business Tax
Receipt.12
Hillsborough County requires any person engaged in the business of operating vehicles for-hire
in the County to obtain a “public vehicle driver’s license” (PVDL) from the Hillsborough County
Tax Collector, in addition to a valid certificate for the operator and a valid permit for the vehicle
after passing a safety and mechanical inspection. Vehicles 10 years of age or older must have
additional inspections.13 A PVDL initial application and renewal fee is $65 and requires
fingerprinting.
The City of Orlando’s police department has a vehicle for-hire unit that requires applicants to
show proof of payment of the business tax, to pass a vehicle inspection, to pass a national
background check, and to obtain a vehicle permit and a driver permit. The application fee for the
Vehicle For-hire permit is $250 and each permit is $200.14
Some cities and counties have made the decision to end their practice of specifically licensing vehicles
for-hire.
For example, Sarasota, Naples and Collier County made the decision in 2015 to stop licensing
vehicles for-hire. “The decision will deregulate the industry once the county's ordinance is
officially taken off the books in the coming weeks. Taxi companies will no longer have to buy
commercial insurance and their drivers won't have to pass criminal background checks. Collier
County will no longer issue licenses to taxi or limo companies. Essentially, anyone with a
driver's license will be able to operate a car-for-hire in Collier County.”15
9 S. 166.021(3), F.S.
10
S. 166.221, F.S; see also s. 205.042, F.S. (municipalities may levy, by appropriate resolution or ordinance, business tax for the
privilege of engaging in or managing any business, profession, or occupation within its jurisdiction).
11 Examples of other cities with vehicle for-hire requirements include: the City of Fort Lauderdale, and Town of Palm Beach. See
Vehicle For Hire, City of Fort Lauderdale, https://www.fortlauderdale.gov/government/departments -i-z/transportation-and-
mobility/vehicle-for-hire (last visited March 2, 2023); see also, The Town of Palm Beach requires taxicabs and limousines to obtain a
vehicle for hire permit. Vehicle for Hire Permits, Town of Palm Beach, https://www.townofpalmbeach.com/610/Taxi -Permits (last visited
March 2, 2023); see also, Palm Beach Ordinance Code 130-32 (“It is a requirement that all vehicles for hire are permitted in the Town
of Palm Beach”).
12 Miami-Dade County, Transportation and Public Work, For-Hire Transportation,
https://www.miamidade.gov/global/service.page?Mduid_service=ser1498077559199786 (last visited March 4, 2023.)
13 Hillsborough County Tax Collectors Office, https://www.hillstax.org/other-services/vehicle-for-hire/ordinance-information/ (Last visited
March 4, 2023).
14 Vehicle for Hire Permit Application, City of Orlando Police Department, http://beta.orlando.gov/fil es/sharedassets/public/departments/
edv/permitting-services-division/bld/vfhren-transferapplication.pdf (last visited March 2, 2023).
15 Naples Daily News, Greg Stanley, Collier tosses out regulations for cab s and ride-sharing, helping Ub er and similar b usinesses,
https://archive.naplesnews.com/business/local/collier-tosses-out-regulations-for-cabs-and-ride-sharing-helping-uber-and-similar-
businesses-2319126-337701871.html/#:~:text=Collier%20County%20will%20no%20longer,for%2Dhire%20in%20Collier%20County.
(Last visited March 4, 2023.)
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Special Districts
A special district is a unit of local government created for a special purpose, as opposed to a general
purpose, which has jurisdiction to operate within a limited geographic boundary and is created by
general law;
special act;
local ordinance; or
rule of the Governor and Cabinet.16
A “dependent special district” is a special district meeting at least one of the following criteria:
The membership of the district’s governing body is identical to the governing body of a single
county or municipality;
All members of the district’s governing body are appointed by the governing body of a single
county or municipality;
Members of the district’s governing body are removable at will by the governing body of a single
county or municipality; or
The district’s budget is subject to approval by the governing body of a single county or
municipality.17
An “independent special district” is any district that is not a dependent special district or one that
includes more than one county unless the district lies wholly within a single municipality.18 Special
districts do not possess “home rule” powers. The county or municipality who created the special district
defines the powers of a special district.19
Special districts vary on their ability to issue licenses or permits to operate a vehicle for hire. Due to the
fact that the county or municipality which created the special district defines its powers.
Preemption20
Generally, local governments are preempted from issuing occupational licenses that are not specifically
authorized in general law. Local governments include counties, municipalities, and special districts.
In 2021, the Governor signed HB 735, Preemption of Local Occupational Licensing, which preempts
occupational licensing to the state unless the local government has specific authority to license and
regulate set out in general law. Because counties have specific authority in general law to license and
regulate vehicles for-hire, HB 735 does not appear to affect a counties’ ability to license vehicles for-
hire. However, HB 735 may prevent municipalities from licensing and regulating vehicles for-hire after
July 1, 2023, because they do not have specific authority to regulate. 21
Commercial Service Airports
An airport is classified as a commercial service airport when the Secretary of U.S. Transportation
determines that it has more than 10,000 passenger boardings each year. 22
16 S. 189.012(6), F.S.
17 Section 189.012(2), F.S.
18 Section 189.012(3), F.S. Independent special districts are created by the Legislature, unless another mechanism is authorized by
general law. See, e.g. s. 190.005, F.S. (community development districts may be created by a county, municipality, or the Florida Land
and Water Adjudicatory Commission, depending on the size and location of the district).
19 “Administrative agencies, such as the airport authority, are creatures of statute and derive only the power specified therein .” Fla. Att'y
Gen. Op. 2012-24 (2012).
20 S.163.211, F.S.
21 See s. 163.211, F.S.; This may be preempted on July 1, 2023.
22 49 U.S.C.A. § 47102 (2018); see also, s. 332.0075 (1)(a), F.S.
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In Florida, the Department of Transportation (DOT) is responsible for planning airport systems and
overseeing the public airport system.23 The owner or lessee of a proposed public airport24 must receive
DOT approval before site acquisition, construction, or establishment of a public airport facility. 25 DOT is
also responsible for licensing public airport facilities prior to the operation of aircraft to or from the
facility and must inspect such facilities prior to licensing or renewal. 26 Current law authorizes local
governments to establish and operate airports.27 Neither state law nor federal law establish
requirements for airport governance or ownership. As such, Florida airports operate under either a
government department model (where the airport operates as a department of the local government) or
an airport authority model (where the airport authority is created as either an independent or a
dependent special district). Because airports are generally governed and subsumed as part of local
governments, state law provides for very little oversight and accountability.
With respect to county owned or operated airports, the board of county commissioners has the right,
power, and authority to enter into contracts with one or more motor carriers for the transportation of
passengers for-hire between airports and points within such county. 28 These contracts define the period
of authorization to transport passengers.29 The county is required to use the competitive bidding
process 30 to grant an exclusive right to use certain parking areas at the county owned airport for motor
carriers for the transportation of passengers such as a taxicab and limousine stand. 31 A county-owned
airport, which is located within the jurisdictional boundaries of a municipality, is under the county’s
exclusive authority and the municipality does not have authority over such airport. 32
Some airport authorities require vehicles for-hire to obtain a permit to operate from the local
government and the airport. For example, Orlando International Airport requires vehicles for hire to
have:33
a valid, current driver’s license issued by the City of Orlando,
a vehicle permit (V-Permit) decal issued by the Orlando International Airport displayed on the
vehicle at all times, and
a vehicle for hire permit decal issued by the City of Orlando displayed on the vehicle at all times.
The Fort Lauderdale-Hollywood International Airport requires persons that operate a vehicle for hire to
first register with and obtain a permit from the Environmental and Consumer Protection Division of
Broward County. Then, persons with a permit to operate a vehicle for hire must apply for a decal permit
from the Broward County Aviation Department.34 The Jacksonville International Airport has a similar
arrangement.35
23 S. 332.001, F.S.
24
S. 330.27(6), F.S. For purposes of DOT approval and licensure, the term “public airport” means a publicly or privately-owned airport
for public use.
25 S. 330.30(1), F.S.
26 S. 330.30(2), F.S.
27 See ch.332, F.S.
28 This does not apply to counties who own or operate an airport which is located on land that is separated from the mainland of the
state by a body of water or the county has a population between 150,000 and 200,000. S. 331.15(2), F.S.
29 S. 331.15(2), F.S.
30 “Competitive bidding is a process of issuing a public bid with the intent that companies will put together their best proposa l and
compete for a specific project.” “Competitive Bidding: What Is Competitive Bidding?, FindRFP Inc. https://www.findrfp.com/Government-
Contracting/competitive-bidding.aspx (last visited Feb. 28, 2023); A county is required to use a competitive bidding procedure to lease
county-owned property. See 1988 Op. Att'y Gen. Fla. 110 (1988).
31 Randall Indus., Inc. v. Lee Cnty., 307 So. 2d 499, 501 (Fla. 2d DCA 1975).
32 Fla. Att'y Gen. Op. 2009-46 (2009); s. 125.015, F.S.; see also City of Dania v. Hertz Corp., 518 So. 2d 1387, 1388 (Fla. 4th DCA
1988).
33 Greater Orlando Aviation Authority, Vehicle-For-Hire (VFH): V-Permit Holders and Drivers Handbook p. 5, Orlando International
Airport, https://orlandoairports.net/site/uploads/VFH-Handbook.pdf (last visited March 1, 2023).
34 Operational Guidelines for Ground Transportation at Fort Lauderdale -Hollywood International Airport, p. 5, Broward County Board of
County Commissioners (Aug. 17, 2021),
https://www.broward.org/Airport/Business/about/Documents/Operationalguidelinesforgroundtransportationservices01.pdf (last vis ited
March 2, 2023).
35 First a person must obtain a vehicle for hire permit issued from the City of Jacksonville. Then, the person must obtain an annual
permit from the Jacksonville Aviation Authority. Commercial Ground Transportation Policy p. 7, Jacksonville International Airport,
Jacksonville Aviation Authority, (Jan. 28, 2013), https://flyjacksonville.com/PDFs/AppndxG.pdf (last visited March 2, 2023).
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On the other hand, some airport authorities issue a separate permit for vehicles for-hire for transporting
passengers at the airport. For example, the Orlando Sanford International Airport requires a vehicle for
hire to obtain a ground transportation prearranged permit which is issued by the airport. 36This includes
a ground transportation agreement which excludes taxicabs. 37
License or Permit to Operate a Vehicle for-Hire- Effect of Bill
Counties and Municipalities
The bill provides an exception from certain local licensing requirements to a person who holds a valid,
active license or permit issued by a county or municipality to operate a vehicle for-hire. Such person
may operate a vehicle-for hire without being subject to additional licensing or permitting requirements
and without paying additional fees if the person:
Holds a valid, active license or permit to operate a vehicle for hire in the county or municipality
in which the person is domiciled38.
Has not had a license or permit to operate a vehicle for hire suspended or revoked within the
preceding 5 years.
A county may still license and regulate taxis, jitneys, limousines, rental cars, and other passenger
vehicles for-hire that operate in the unincorporated areas of the county. However, if the person is
already licensed or permitted by the area39 where they live and have a license or permit in good
standing, the county will not be able to enforce additional licensing or permitting requirements or
impose additional fees upon that person.
As for municipalities, if a person is licensed or permitted by the area where they live and has a license
or permit in good standing, the municipality will not be able to enforce additional licensing or permitting
requirements or impose additional fees upon that person.
A person who is an unlicensed or does not fall within the exception may be able to obtain a license or
permit to operate a vehicle for hire in another county or municipality despite where he or she currently
lives.
Overall, the bill allows persons who possess a license or permit in one jurisdiction to operate a vehicle
for-hire in other jurisdictions without being subject to obtaining another license or permit.
Commercial Service Airports
The bill provides that a person who holds a valid, active license or permit issued by an airport to
operate a vehicle for-hire may operate a vehicle for hire at any other airport without being subject to
additional airport licensing or permitting requirements and without paying additional license or permit
fees. Airport includes an airport, airport authority, aviation authority, or other entity that operates a
commercial service airport.
The bill limits the airport’s ability to issue permits or licenses to operate a for-hire vehicle if another
airport has already issued a person a permit or license.
This potentially would affect county owned or operated airports. 40 The board of county commissioners
could still enter contracts with motor carriers for the transportation of passengers for hire between such
airport or airports and points within such county. However, persons who already obtained a permit or
36 The fees to obtain a permit to operate vehicle for hire depend on the weight and length of the vehicle.
37 2023 Ground Transportation Pre-Arranged Permit, Orlando Sanford International Airport, https://web1.osaa.net/GTX/docs/GT-Permit-
2023-for-Website.pdf (last visited March 1, 2023).
38 Domicile means someone’s permanent residence or principal home. Domicile Definition and Meaning, Merriam-Webster (last visited
March 1, 2023), https://www.merriam -webster.com/dictionary/domicile.
39 Municipality or county.
40 This would not apply to counties who own or operate an airport which is located on land that is separated from the mainland of the
state by a body of water or the county has a population between 150,000 and 200,000.
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license to operate a vehicle for hire would not be required to enter into a contract with the board of
county commissioners to operate a vehicle for hire at the county owned or operated airport.
B. SECTION DIRECTORY:
Section 1. Creating s. 320.0603, F.S.; providing that a person who holds a license issued by a county,
municipality, or airport to operate a vehicle for hire may operate a vehicle for hire in any other county,
municipality, or airport without being subject to certain requirements or fees under certain
circumstances; defining the term "airport".
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.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
The bill may potentially impact the revenues of municipalities who raise revenue from the licenses
that they issue if such fees are not in proportion to the regulatory activity. However, municipalities
are required to only impose regulatory fees that are proportionate to the cost of regulation in
accordance with section 166.221, F.S. Since municipalities will no longer be issuing as many
licenses or inspecting as many vehicles for hire, this loss of revenue should be offset by a decrease
in expenditures.
As for counties, the negative impact on revenues is indeterminate.
As for airports in particular, the Florida Airports Council reports an overall estimated negative
revenue impact of $14,293,111.00 on 18 of the commercial service airports.41 These negative
revenue impacts vary depending on the airport.42
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
There may be a positive economic impact on the vehicles for-hire industry. There would be a positive
economic impact for persons who:
hold a valid, active license or permit to operate a for hire vehicle in the municipality or county
where they live and
maintain their license or permit to operate in good standing for the preceding 5 years.
Such persons will not be subject to additional licensing or permitting requirements or fees in other
municipalities, counties, or airports.
41 E-mail from Lisa Waters, President/CEO, Florida Airports Council, FW: HB 807 follow -up (March 24, 2023).
42 Id.
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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.
C. DRAFTING ISSUES OR OTHER COMMENTS:
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On March 9, 2023, the Regulatory Reform & Economic Development Subcommittee adopted one amendment
and reported the bill favorably as a committee substitute. The committee substitute clarifies that the bill does
not grant specific authority to municipalities or special districts to regulate or license vehicles for hire as
required by s. 163.211, F.S.
This analysis is drafted to the committee substitute as passed by the Regulatory Reform & Economic
Development Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 807 2023
1 A bill to be entitled
2 An act relating to a license or permit to operate a
3 vehicle for hire; creating s. 320.0603, F.S.;
4 providing that a person who holds a license issued by
5 a county, municipality, or airport to operate a
6 vehicle for hire may operate a vehicle for hire in any
7 other county, municipality, or airport without being
8 subject to certain requirements or fees under certain
9 circumstances; defining the term "airport"; providing
10 construction; providing an effective date.
11
12 Be It Enacted by the Legislature of the State of Florida:
13
14 Section 1. Section 320.0603, Florida Statutes, is created
15 to read:
16 320.0603 Vehicle-for-hire license or permit; reciprocity.—
17 (1) A person who holds a valid, active license or permit
18 issued by a county or municipality to operate a vehicle for hire
19 may operate a vehicle for hire in any other county or
20 municipality without being subject to additional licensing or
21 permitting requirements and without paying additional license or
22 permit fees if the person:
23 (a) Holds a valid, active license or permit to operate a
24 vehicle for hire in the county or municipality in which the
25 person is domiciled; and
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CODING: Words stricken are deletions; words underlined are additions.
hb0807-01-c1
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 807 2023
26 (b) Has not had a license or permit to operate a vehicle
27 for hire suspended or revoked within the preceding 5 years.
28 (2) A person who holds a valid, active license or permit
29 issued by an airport to operate a vehicle for hire may operate a
30 vehicle for hire at any other airport without being subjec t to
31 additional airport licensing or permitting requirements and
32 without paying additional license or permit fees. For purposes
33 of this subsection, the term "airport" includes an airport,
34 airport authority, aviation authority, or other entity that
35 operates a commercial service airport as defined in s.
36 332.0075(1).
37 (3) This section does not grant specific authority to
38 municipalities or special districts to regulate or license
39 vehicles for hire which is required by s. 163.211.
40 Section 2. This act shall take effect July 1, 2023.
Page 2 of 2
CODING: Words stricken are deletions; words underlined are additions.
hb0807-01-c1
COMMERCE COMMITTEE
CS/HB 807 by Rep. Borrero
License or Permit to Operate Vehicle for Hire
AMENDMENT SUMMARY
April 17, 2023
Amendment 1 by Rep. Borrero (lines 28-36):
• Provides that the bill does not apply to public-use airports.
Amendment 2 by Rep. Borrero (between lines 39-40):
• Provides that the bill does not apply to vehicles for hire who transport individuals while
on stretchers or wheelchairs, or transport individuals with a handicap, illness, injury, or
other incapacitation.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 807 (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: Commerce Committee
2 Representative Borrero offered the following:
3
4 Amendment
5 Remove lines 28-36 and insert:
6 (2) Notwithstanding subsections (1) or (3), this section
7 does not apply to an airport. For purposes of this section, the
8 term "airport" includes an airport, airport authority, aviation
9 authority, or other entity that operates a public-use airport as
10 defined in s. 332.004(14), including municipalities or special
11 districts that operate airports defined in this subsection.
12
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Published On: 4/14/2023 7:32:42 PM
Page 1 of 1
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 807 (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: Commerce Committee
2 Representative Borrero offered the following:
3
4 Amendment
5 Between lines 39 and 40, insert:
6 (4) This section does not apply to a person who holds a
7 valid, active license or permit to operate a vehicle-for-hire
8 when such person provides transportation of persons while on
9 stretchers or wheelchairs, or transportation of persons whose
10 handicap, illness, injury, or other incapacitation makes it
11 impractical to be transported by a regular common carrier such
12 as a bus, taxi, non-taxi, limousine, or other vehicle-for-hire.
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Page 1 of 1
CS/HB 833
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 833 Vacation Rentals
SPONSOR(S): Regulatory Reform & Economic Development Subcommittee, Duggan
TIED BILLS: IDEN./SIM. BILLS: CS/SB 714
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform & Economic Development 12 Y, 3 N, As CS Thompson Anstead
Subcommittee
2) Ways & Means Committee 13 Y, 10 N LaTorre Aldridge
3) Commerce Committee Thompson Hamon
SUMMARY ANALYSIS
The Division of Hotels and Restaurants (Division) in the Department of Business and Professional Regulation
(DBPR) licenses and inspects vacation rentals within the state. A vacation rental is classified as any unit or
group of units in a condominium or cooperative or any individually or collectively owned home, not a timeshare
project, which is rented to guests more than three times in a calendar year for periods of less than 30 days or 1
calendar month, or advertised to the public as a place regularly rented to guests. Local governments may not
prohibit vacation rentals or regulate the duration or frequency of such rentals. Local regulations adopted before
June 1, 2011, are not subject to this prohibition.
The bill:
Adds to the scope of the state preemption of public lodging establishments and public food service
establishments by preempting “licensing” regulations, and revises the scope of the express state
preemption on vacation rentals to allow local jurisdictions to amend local regulations to:
o Be less restrictive; or
o Comply with local registration requirements.
Allows local governments to create a local vacation rental registration program.
Allows local governments to charge a registration fee not to exceed $50 for processing an individual
registration application, or $100 for processing a collective registration application.
Requires local governments to waive fines for failure to register if the vacation rental becomes
registered within 30 days.
Preempts to the state the regulation of advertising platforms, requires users of advertising platforms to
provide license and registration information in a vacation rental listing, requires advertising platforms to
collect and remit certain taxes and adopt an antidiscrimination policy.
Grants the Division certain enforcement mechanisms relating to unlicensed activities.
Specifically, does not supersede the authority of condominiums, cooperatives, or homeowners’
associations to restrict the use of their properties.
Requires vacation rental operators to display license and registration information.
Requires sexual offenders and sexual predators who stay in a vacation rental to register with the local
sheriff's office under certain circumstances.
The Revenue Estimating Conference estimated that the bill would have a zero impact on state and local
government revenues.
Except as otherwise provided, the bill takes effect upon becoming law.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Present Situation
Vacation Rentals
The Division of Hotels and Restaurants (Division) within the Department of Business and Professional
Regulation (DBPR) is charged with enforcing the provisions of ch. 509, F.S., and all other applicable
laws relating to the inspection and regulation of public lodging establishments and public food service
establishments for the purpose of protecting the public health, safety, and welfare. DBPR licenses
vacation rentals within the state and has the power to inspect a licensed vacation rental. 1
Public lodging establishments are classified as a hotel, motel, vacation rental, nontransient apartment,
transient apartment, bed and breakfast inn, or timeshare project. 2
The term “public lodging establishments” includes transient and nontransient public lodging
establishments.3 The principal differences between transient and nontransient public lodging
establishments are the number of times that the establishments are rented in a calendar year and the
length of the rentals.
The term “transient public lodging establishment” means any unit, group of units, dwelling, building, or
group of buildings within a single complex of buildings, which is rented to guests more than three times
in a calendar year for periods of less than 30 days or one calendar month, whichever is less, or whic h
is advertised or held out to the public as a place regularly rented to guests. 4
The term “vacation rental” means any unit or group of units in a condominium or cooperative or any
individually or collectively owned single-family, two-family, three-family, or four-family house or dwelling
unit that is also a transient public lodging establishment but that is not a timeshare project. 5
Current law exempts from licensing requirements living or sleeping facilities that do not fit within the
classification of a hotel, motel, timeshare project, vacation rental, nontransient apartment, bed and
breakfast inn, or transient apartment.6 Currently, the classification for “vacation rental” only applies to
situations where the entire unit or dwelling is offered for rent; therefore the rental of individual rooms
within a condominium unit or house is excluded from the licensure and regulation of public lodging
establishments by the Division.7
Licensure
The Division is authorized to issue vacation rental licenses as follows:
Single license: issued to an individual person or entity, but not a licensed agent, and may
include one single-family house or townhouse, or a unit or group of units within a single building
that are owned and operated by the same individual person or entity.
Group license: issued to a licensed agent to cover all units within a building or group of
buildings in a single complex and only covers units held out to the public as a place regularly
rented to guests.
1 S. 509.241, F.S.
2 S. 509.242(1), F.S.
3 S. 509.013(4)(a), F.S.
4 S. 509.013(4)(a)1., F.S.
5 S. 509.242(1)(c), F.S.
6 S. 509.013(4)(b)9., F.S.
7 See 18-06 Fla. Op.Att’y Gen. (2018).
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Collective license: issued to a licensed agent who represents a collective group of houses or
units found on separate locations not to exceed 75 houses per license. 8
Applicants for licensure must submit the appropriate application and required fee to the Division. The
license fees are based on the number of rental units in the establishment. A current license must be
conspicuously displayed in the office or lobby of the licensed establishment. 9 If no office or lobby is
present on the premises of the licensed establishment, the license must be readily available for
inspection upon request.10
Currently, there are 63,690 public lodging establishments licensed by the Division. These licenses are
distributed as follows:11
Hotels: 2,308 licenses;
Motels: 2,397 licenses;
Non-transient apartments: 18,315 licenses;
Transient apartments: 913 licenses;
Bed and Breakfast Inns: 261 licenses;
Vacation rental condominiums: 12,716 licenses;
Vacation rental dwellings: 26733,306 licenses; and
Vacation rental timeshare projects: 47 licenses.
License Fees
The Division provides the following fee schedule relating to vacation rentals: 12
Vacation rentals/collective license.
BASIC PER UNIT FEE HEP FEE13 TOTAL FEE
FEE
$150 $10 $10 VARIES
Vacation rentals/group and single license.
NUMBER OF BASIC FEE INCREMENTAL HEP FEE TOTAL FEE
UNITS UNIT FEE
SINGLE $150 $10 $10 $170
UNIT
2-25 $150 $20 $10 $180
26-50 $150 $35 $10 $195
51-100 $150 $50 $10 $210
101-200 $150 $75 $10 $235
201-300 $150 $105 $10 $265
301-400 $150 $135 $10 $295
401-500 $150 $160 $10 $320
OVER $150 $190 $10 $350
500
Applicants for initial licensure are required to pay the full license fee if the application is made during, or
more than six months before, the annual renewal period. A half-year fee is authorized if such
application is made 6 months or less before the renewal period. A $50 application fee is required when
making the initial application or an application for change of ownership. Renewal fees are based upon
the number of units under the license when the license was either issued or last renewed, whichever is
8 S. 509.241, F.S.
9 S. 509.241(3), F.S.
10 R. 61C-1.002(1), F.A.C.
11 DBPR, Division of Hotels and Restaurants Annual Report for FY 2021 -2022, p. 8,
http://www.myfloridalicense.com/dbpr/hr/reports/annualreports/documents/ar2021_22.pdf (last visited Apr. 3, 2023).
12 R. 61C-1.008, F.A.C.
13 S. 509.302, F.S., establishes the Hospitality Education Program. All public lodging establishments and all public food service
establishments licensed under ch. 509, F.S., are required to pay an annual fee of no more than $10, which shall be included in the
annual license fee and used for the sole purpose of funding the Hospitality Education Program.
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most recent. A $50 delinquency fee is required to renew a delinquent license filed with the Division after
the expiration date.
Sanitation and Safety
Current law requires each public lodging establishment to meet requirements and standards relating to
sanitation and safety.14 These requirements and standards apply to the following:
Water, plumbing and waste;
Public bathrooms (vacation rentals are exempt from this requirement);
Towels;
Glassware, tableware, and utensils (vacation rentals are exempt from federal and state
standards but must sanitize with household cleaning supplies and provide notice of such in
guest rooms);
Kitchens;
Ice making machines;
Locking devices;
Vermin control;
Storage and labeling of toxic items;
Structural components, attachments, and fixtures; and
Attics, basements, boiler rooms, meter rooms, laundry rooms, and storage rooms.
Ventilation and Fire Safety
Each bedroom in a public lodging establishment must be properly ventilated with windows or
mechanical ventilation.15 Specialized smoke detectors for the deaf and hearing-impaired must be made
available upon request by guests in transient public lodging establishments without charge. 16
In addition, smoke alarms must be installed in every living unit,17 and automatic fire sprinklers may be
required in public lodging establishments if the rental units are located within a building with three or
more stories or greater than 75 feet in height.18 All local fire authority requirements must be met.
Electrical wiring must be in good repair.
Conduct on Premises
The operator of a public lodging establishment is authorized to refuse accommodations or service to
undesirable guests.19 Subject to proper notification, an operator may remove guests who:
Illegally possess or deal controlled substances;
Are intoxicated;
Are profane, lewd, or brawling;
Disturb the peace and comfort of other guests;
Injure the reputation, dignity, or standing of the establishment;
Fail to pay rent on time;
Fail to check out on time;
Are generally detrimental to the establishment.20
The admission to, or the removal from, a public lodging establishment cannot be based upon race,
creed, color, sex, physical disability, or national origin.21
14 See generally s. 509.221, F.S., and R. 61C-1&3, F.A.C.
15 S. 509.221(3), F.S.
16 R. 61C-1.004, F.A.C.
17 S. 509.215(1)(b), F.S.
18 S. 509.215(1), F.S.
19 S. 509.142, F.S.
20 S. 509.141(1), F.S.
21 S. 509.141(1), F.S.
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Violations for remaining or attempting to remain in an establishment after being requested to leave are
a second-degree misdemeanor, punishable as provided in ss. 775.082 or 775.083, F.S. 22
In addition, an operator is authorized to take a person into custody and detain that person for disorderly
conduct that creates a threat to the life or safety of the person or others.23
Inspections
The Division is required to inspect all public lodging establishments as often as necessary for the
enforcement of the law and protection of the public health, safety and welfare. Each licensed public
lodging establishment must be inspected at least biannually (twice per year), except for transient
and non-transient apartments, which must be inspected at least annually. 24
Vacation rentals are not subject to this requirement, but must be available for inspection upon a
request by the Division. For inspection purposes, the licensee or operator must, upon request, meet
the inspector at the site of a specified establishment with keys to the licensed house or unit being
inspected.25
Additionally, an applicant for a vacation rental license is required to submit with the license application
a signed certificate evidencing the inspection of all balconies, platforms, stairways, railings, and
railways from a person competent to conduct such inspections.26
The Division also may inspect a vacation rental in response to a consumer complaint related to
sanitation issues or unlicensed activity. In Fiscal Year 2021-2022, the Division received 325
consumer complaints related to vacation rentals, of which 34 were confirmed as a violation by the
Division.27
Registry
The licensee or operator of a vacation rental must notify the Division of any and all houses or units
represented for inclusion in the license application. Anytime a change occurs in the street or unit
address or number of houses or units included under the license, the licensee or operator must notify
the Division of any and all houses or units included in the license at least 60 days prior to the expiration
date of the license. In addition, a list of the included houses or units must be maintained in a written
form for inspection by request.28
Each operator of a transient establishment must maintain a register showing the dates each rental unit
was occupied by a guest as well the rates charged to the occupants. This register must be maintained
in chronological order and available for inspection by the Division at any time. Operators must maintain
two years of register data.29
Violations
Any public lodging establishment found to be in violation of ch. 509, F.S., or rules adopted by the
Division, may be subject to administrative actions including the following penalties:
Fines not to exceed $1,000 per offense; and
Suspension, revocation, or refusal of a license.30
22 S. 509.141(3), F.S.
23 S. 509.143(1), F.S.
24 See generally s. 509.032, F.S., r. 61C-1.002, F.A.C.
25 Id.
26 See ss. 509.211(3), 509.2112, F.S., and r. 61C-3.001, F.A.C.
27 DBPR, Division of Hotels and Restaurants Annual Report for FY 2021 -2022, at 21.
28 R. 61C-1.002, F.A.C.
29 S. 509.101(2), F.S.
30 S. 509.261(1), F.S.
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Preemption Authority
Prior to June 1, 2011, local governments regulated vacation rentals (also referred to as resort dwellings
in many local ordinances). Local governments could restrict or prohibit vacation rentals up to, and
including, banning the use of residential properties as vacation rentals.
Legislation in 2011 preempted the authority to regulate vacation rentals to the state. 31 The preemption
prevented local governments from enacting any new law, ordinance, or regulation that:
Restricted the use of vacation rentals;
Prohibited vacation rentals; or
Regulated vacation rentals based solely on their classification, use, or occupancy.
The 2011 preemption also “grandfathered” any local law, ordinance, or regulation of vacation rentals
enacted on or prior to June 1, 2011.32
Prior to the 2011 preemption, several municipalities had created regulations specifically relating to
vacation rentals.33 As an example, one ordinance prohibited owners of single-family residences in
residential zones from renting their properties for durations of less than 30 days, although it
grandfathered certain vacation rentals that had already obtained all applicable state and local licenses
and permits.34 Subsequent to the enactment of the 2011 legislation, the vacation rental market
experienced growth.35
In 2014, the Legislature narrowed the scope of the preemption to preempt only those local regulations
that:
Prohibit vacation rentals; or
Regulate the duration or frequency of vacation rentals.
Thus, local governments can regulate vacation rentals to the extent those regulations do not prohibit
vacation rentals, or restrict the duration or frequency of vacation rentals. The grandfather provision for
regulations adopted on or before June 1, 2011, was retained.36
This preemption does not apply to local regulations exclusively relating to “property valuation as a
criterion for vacation rental if the local regulation is required to be approved by the state land planning
agency pursuant to an area of critical state concern.” 37
In addition, the regulation of public lodging establishments and public food service establishments,
including, but not limited to, sanitation standards, inspections, training and testing of personnel, and
matters related to the nutritional content and marketing of foods offered in such establishments, is
preempted to the state. However, local governments or local enforcement districts are still allowed to
conduct inspections of public lodging and public food service establishments for compliance with the
Florida Building Code and the Florida Fire Prevention Code.38
Recent Activity
31 Ch. 2011-119, Laws of Fla., codified in s. 509.032(7), F.S.
32 Id.
33 See City of Venice Code of Ordinances, ch. 86, art. V, div. 9, s. 86-151. See also Monroe County Code, No. 004-1997 (2013); Bal
Harbour Village Code of Ordinances, s. 21-363.
34 City of Venice Code of Ordinances, ch. 86, art. V, div. 9, s. 86-151. See also City of Venice v. Gwynn, 76 So. 3d 401, 403 (Fla. 2nd
DCA 2011).
35 Melissa Maynard, As Short-Terms Rentals Boom, Regulation an Issue, The Pew Charitable Trust (June, 6, 2013),
http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2013/06/06/as -shortterms-rentals-boom-regulation-an-issue (last
visited Apr. 3, 2023).
36 Ch. 2014-71, Laws of Fla., codified in s. 509.032(7)(b ), F.S.
37 S. 509.032(7)(c), F.S.
38 S. 509.032(7)(a), F.S.
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Homeowners found to be in conflict with ordinances regulating vacation rentals have taken legal action
against their respective local governments through the Bert J. Harris, Jr., Private Property Rights
Protection Act.39 The act provides a cause of action for private property owners whose real property
has been inordinately burdened by a specific action of a governmental entity that may not rise to the
level of a “taking” under the State or Federal Constitutions. The inordinate burden can apply to either
an existing use of real property or a vested right to a specific use. 40
In November 2015, the City of Anna Maria passed and adopted an ordinance that provides a general
framework for the regulation of vacation rentals, including maximum occupancy requirements.
According to the city’s website, since April 2016, approximately 113 Bert Harris Act claims relating to
the ordinance have been filed that could amount to approximately $38 million in damages.41
In March 2016, Miami Beach, which bans all short-term rentals, passed an ordinance making the fine
for a first violation for a resident caught renting short-term $20,000. Each subsequent fine increases by
$20,000 and can be as high as $100,000. Vacation/short-term rentals that are permitted in certain
zoning districts of Miami Beach are required to provide and conspicuously display the city-issued
business tax receipt number and the resort tax certificate number in every advertisement or listing of
any type in connection with the rental of the residential property. 42
In June 2018, it was reported that Miami Beach had issued $12.1 million in fines, only $174,000 of
which had been paid. Some vacation rental owners were reported to have accumulated up to $60,000
in fines.43 Since then, the Third District Court of Appeals invalidated the city’s fine structure after
determining the regulations conflict with state law that caps violation fines between $1,000 and
$5,000.44 As a result, the city has left the regulations in place and simply revised the fine structure.
First-time offenders are fined $1,000 a day, and repeat offenders are fined $5,000 per day. According
to a memo from the City Attorney, the new fine structure complies with the ruling against Miami
Beach.45
Condominiums, Cooperatives, and Homeowners’ Associations
A condominium is a form of ownership of real property created pursuant to ch. 718, F.S., comprised of
units which may be owned by one or more persons but have an undivided share of access to common
elements.46 A condominium is created by recording a declaration in the public records of the county in
which the condominium will be located.47 A declaration governs the relationships among condominium
unit owners and the condominium association. All unit owners are members of the condominium
association. The condominium association is overseen by an elected board of directors, commonly
referred to as a “board of administration.” The association enacts condominium association bylaws
governing the administration of the association. The declaration as originally recorded or as amended
may include covenants and restrictions concerning the use, occupancy, and transfer of the units in the
association.
39 Kathy Prucnell, 2 more Holmes Beach Bert Harris claims proceed to courthouse, The Islander(Feb. 20, 2018),
https://www.islander.org/2018/02/2-more-holmes-beach-bert-harris-claims-proceed-to-courthouse/ (last visited Apr. 3, 2023).
40 S. 70.001, F.S.
41 City of Anna Maria, Bert J. Harris, Jr., Private Property Rights Protection Act Claim Filings,
http://www.cityofannamaria.com/residents/bert_harris_claim.php (last visited Apr. 3, 2023).
42 See Miami Beach City Code, Sec. 142-1111 and 142-905(b).
43 Chabeli Herrera, Miami Beach has the country's highest short-term rental fines. It just got sued, Miami Herald (June 28, 2018),
https://www.miamiherald.co m/news/business/article213954174.ht ml (last visited Apr. 3, 2023).
44 Francisco Alvarado, Miami-Dade judge strikes down Miami Beach short-term rental ban, TheRealDeal South Florida Real Estate
News (Oct. 8, 2019), https://therealdeal.com/miami/2019/ 10/ 08/ miami-dade-judge-strikes-down-miami-beach-short-term-rental-ban/
(last visited Apr. 3, 2023).
45 Francisco Alvarado, Miami Beach slashes fines for illegal short-term rentals, TheRealDeal South Florida Real Estate News (Oct.
14, 2019), https://therealdeal.com/miami/2020/10/14/ miami-beach-slashes-fines-for-illegal-short-term-rentals/ (last visited Apr. 3,
2023).
46 S. 718.103(11), F.S.
47 S. 718.104(2), F.S.
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A cooperative is a form of property ownership created pursuant to ch. 719, F.S., where real property is
owned by the cooperative association, and individual units are leased to the residents who own shares
in the cooperative association.48 The lease payment amount is the pro-rata share of the operational
expenses of the cooperative. Cooperatives operate similarly to condominiums and the laws regulating
cooperatives are similar in many ways. A cooperative is created using “cooperative documents” which
include articles of incorporation of the association, bylaws, and the ground lease or other underlying
lease, if any. The documents may include restrictions, which affect the use of the property.
A homeowners’ association (HOA) is an association of residential property owners , created pursuant to
ch. 720, F.S., where voting membership consists of parcel owners, membership is a mandatory
condition of parcel ownership, and which may impose assessments that, if unpaid, can become a lien
on the parcel.49 Chapter 720, F.S., only regulates HOAs whose covenants and restrictions include
mandatory assessments. Like a condominium or cooperative, an HOA is administered by an elected
board of directors. The powers and duties of an HOA includes those provided in ch. 720, F.S., and
contained in the governing documents of the association. The governing documents include the
recorded covenants and restrictions, bylaws, articles of incorporation, and duly adopted amendments to
those documents. The documents may include restrictive covenants governing the use and occupancy
of properties.
Based on these laws, condominium, cooperative, and homeowners’ associations may enact provisions
that restrict the ability of the property owners to rent their properties.50 This includes actions such as
prohibiting owners from renting their properties, restricting the duration of the rental term, or limiting the
frequency owners are allowed to rent their properties.
Florida Sexual Predators Act
Current law requires all sexual offenders and sexual predators to comply with a number of statutory
registration requirements. A sexual offender must report in-person to the sheriff’s office to register
within 48 hours of:
Establishing permanent, temporary, or transient residence in Florida; or
Being released from the custody, control, or supervision of the Department of Corrections
(DOC) or from the custody of a private correctional facility.51
A sexual predator must register:
With DOC if the sexual predator is in DOC’s custody or control, under DOC’s supervision, or in
the custody of a private correctional facility; 52
o If the sexual predator is under DOC’s supervision but not in custody, he or she must
register within 3 days of the court designating him or her as a sexual predator; 53
With the custodian of the local jail, within 3 days of the court designating him or her as a sexual
predator, if the sexual predator is in the custody of a local jail;54
In-person at the sheriff’s office in the county where:
o The sexual predator establishes or maintains a residence within 48 hours of establishing
or maintaining a residence in Florida;55 or
o The sexual predator was designated a sexual predator within 48 hours after such finding
is made.56
Residence
48 S. 719.103(2)(26), F.S.
49 S. 720.301(9), F.S.
50 Motley Fool, Can an HOA Restrict Rentals? (Spoiler Alert: Yes) , https://www.fool.com/millionacres/real-estate-investing/rental-
properties/can-hoa-restrict-rentals-spoiler-alert-yes/# (last visited Apr. 3, 2022).
51 S. 943.0435(2)(a)1., F.S.
52 S. 775.21(6)(b), F.S.
53 Id.
54 S. 775.21(6)(c), F.S.
55 S. 775.21(6)(e)a., F.S.
56 S. 775.21(6)(2)b., F.S.
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Residence, for the purposes of registration for both sexual offenders and sexual predators, is defined
as follows:
"Permanent residence" means a place where the person abides, lodges, or resides for 3 or
more consecutive days.
"Temporary residence" means a place where the person abides, lodges, or resides, including,
but not limited to, vacation, business, or personal travel destination in or out of this state for a
period of 3 or more days in the aggregate during any calendar year and which is not the
person's permanent address. For a person whose permanent residence is not in this state, it
means a place where the person is employed, practices a vocation, or is enrolled as a student
for any period of time in this state.
"Transient residence" means a county where a person lives, remains, or is located for a period
of 3 or more days in the aggregate during a calendar year and which is not the person's
permanent or temporary address. The term includes, but is not limited to, a place where the
person sleeps or seeks shelter and a location that has no specific street address. 57
Continuing Reporting Requirements
A sexual offender or sexual predator must report the following updates within 48 hours:
Change in the offender’s permanent, temporary, or transient residence;
Change in the offender’s name, by reason of marriage or other legal process;
When the offender vacates a permanent, temporary, or transient residence, or when the
offender remains in a permanent, temporary, or transient residence after reporting his or her
intent to vacate such a residence;
Use of a new electronic mail address or Internet identifier;
Change in vehicles owned;
Change to home or cellular telephone numbers;
Change to employment information;
Change in status related to enrollment, volunteering, or employment at institutions of higher
education; and
International and out-of-state travel information.58
Effect of the Bill
Preemptions
The bill adds to the scope of the state preemption of public lodging establishments and public food
service establishments, by also preempting “licensing.”
The bill revises the scope of the express state preemption on vacation rentals to allow local jurisdictions
to adopt local regulations:
As long as the regulation is less restrictive; or
To comply with local registration requirements.
The bill also preempts the regulation of advertising platforms to the state.
The bill maintains the exemption to the preemption that allows only local ordinances adopted on or
before June 1, 2011, to remain in effect. Additionally, the bill allows a local government to pass such
regulations after June 1, 2011, if they are less restrictive than what was in effect on June 1, 2011.
The bill maintains the exemption to the preemption for areas of critical state concern so that these
areas remain fully exempted from the preemption, and may have existing ordinances that were adopted
after June 1, 2011.
57 S. 775.21, F.S.
58 Ss. 943.0435(4)(e)2. & 775.21(6)(a)1.a., F.S.
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Local Vacation Rental Registration Program
The bill authorizes local laws, ordinances, or regulations to require the registration of vacation rentals
with a local vacation rental registration program.
The bill authorizes local governments to adopt such a program and impose a fine for failure to register
under the program. However, the bill requires a local government to waive the fine if the vacation rental
is registered under a vacation rental registration program within 30 days after receiving notice of the
fine and deficiency.
The bill allows local governments to charge a registration fee not to exceed $50 for processing an
individual registration application, or $100 for processing a collective registration application.
The bill prohibits a local law, ordinance, or regulation from requiring the renewal of a registration more
than once per year. However, if there is a change of ownership, the new owner may be required to
submit a new application for registration.
The bill provides that as a condition of registration, the local law, ordinance, or regulation may only
require the owner or operator of a vacation rental to:
Submit identifying information about the owner or the owner's agents and the subject vacation
rental property.
Obtain a license as a transient public lodging establishment issued by the Division within 60
days after local registration.
Obtain all required tax registrations, receipts, or certificates issued by the Department of
Revenue (DOR), a county, or a municipal government.
Update required information on a continuing basis to ensure it is current.
Comply with parking standards and solid waste handling and containment requirements, so long
as such standards and requirements are not imposed solely on vacation rentals.
Designate and maintain at all times a responsible party who is capable of responding to
complaints and other immediate problems related to the vacation rental, including being
available by telephone at a listed phone number.
Pay in full all recorded municipal or county code liens against the subject property.
o The local government may withdraw its acceptance of a registration on the basis of an
unsatisfied recorded municipal or county code lien.
The bill requires that within 15 business days after receiving an application for registration of a vacation
rental, the local government must review the application for completeness and accept the registration of
the vacation rental or issue a written notice specifying with particularity any areas that are deficient,
which may be provided by U.S. mail or electronically.
The bill provides that a vacation rental owner or operator and the local government may agree to a
reasonable request to extend the timeframes, particularly in the event of a force majeure or other
extraordinary circumstance.
The bill requires a local government that denies an application for registration of a vacation rental to
give written notice to the applicant as follows:
The notice may be provided by United States mail or electronically.
The notice must specify with particularity the factual reasons for the denial and include a citation
to the applicable portions of an ordinance, a rule, a statute, or other legal authority for the denial
of the registration.
The bill:
Prohibits local governments from denying an applicant from reapplying if the applicant cures the
identified deficiencies.
Provides that if the local government fails to accept or deny the registration within the
timeframes provided, the application is deemed accepted.
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Provides that upon an accepted registration of a vacation rental, a local government must
assign a unique registration number to the vacation rental or other indicia of registration and
provide the registration number or other indicia of registration to the owner or operator of the
vacation rental in writing or electronically.
Authorizes local governments to terminate or refuse to issue or renew a vacation rental
registration when:
o The operation of the subject premises violates a registration requirement authorized
pursuant to this paragraph or a local law, ordinance, or regulation that does not apply solely
to vacation rentals; or
o The premises and its owner are the subject of a final order or judgment lawfully directing the
termination of the premises' use as a vacation rental.
Vacation Rental Licenses
Effective January 1, 2024, the bill makes the following revisions to the license application process for
vacation rentals:
Requires all applications for a vacation rental license to, if applicable, include the local
registration number or other proof of registration required by local law, ordinance, or regulation.
Authorizes the Division upon receiving an application for a vacation rental license to grant a
temporary license that authorizes the vacation rental to begin operation while the application is
pending and to post the information required under s. 509.243(1)(c), F.S.
o The temporary license automatically expires upon final agency action regarding the
license application.
Requires any license issued by the Division to be displayed conspicuously to the public inside
the licensed establishment, instead of “in the office or lobby.”
Requires the owner or operator of a vacation rental offered for transient occupancy through an
advertising platform to display the vacation rental license number and the applicable local
registration number.
Advertising Platforms Definition
The bill defines the term “advertising platform” as a person as defined in s. 1.01, F.S.,59 who:
Provides an online application, software, a website, or a system: through which a vacation
rental located in this state is advertised or held out to the public as available to rent for transient
occupancy;
Provides or maintains a marketplace: for the renting of a vacation rental for transient
occupancy; and
Provides a reservation or payment system: that facilitates a transaction for the renting of a
vacation rental for transient occupancy and for which the person collects or receives, directly or
indirectly, a fee in connection with the reservation or payment service provided for the rental
transaction.
Advertising Platform Requirements
Effective January 1, 2024, the bill provides that advertising platforms must:
Require that a person who places an advertisement for the rental of a vacation rental to:
o Include in the advertisement the vacation rental license number and, if applicable, the
local registration number; and
o Attest to the best of the person's knowledge that the license number for the vacation
rental property and the local registration are current, valid, and accurately stated in the
advertisement.
Display the vacation rental license number and, if applicable, the local registration number.
By July 1, 2024, check that the vacation rental license number provided by the owner or
operator appears as current in the information posted by the division and applies to the subject
59 S. 1.01(3), F.S., defines the word “person” to include individuals, children, firms, associations, joint adventures, partnership s,
estates, trusts, business trusts, syndicates, fiduciaries, corporations, and all other groups or combinations.
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vacation rental before publishing the advertisement on its platform and again on a quarterly
basis.
Remove from public view an advertisement or listing from its online application, software,
website, or system within 15 business days after being notified by the Division in writing that the
subject advertisement or listing for the rental of a vacation rental located in this state fails to
display a valid license number issued by the Division.
Adopt an anti-discrimination plan to help prevent discrimination, and inform its users of the
public lodging discrimination prohibition found in s. 509.092, F.S.
Advertising Platform Tax Requirements
The bill requires advertising platforms to collect and remit taxes due under certain provision of Florida’s
tax code resulting from the reservation and payment of a vacation rental property through an
advertising platform.
The bill requires advertising platforms to collect and remit taxes due under ss. 125.0104,60 125.0108,61
212.03,62 212.0305,63 and 212.055, F.S.,64 resulting from the reservation of a vacation rental property
and payment therefor through an advertising platform.
The bill also includes the tax collection and remittance requirements for advertising platforms within ch.
212, F.S., and to:
Provide that the taxes an advertising platform must collect and remit are based on the total
rental amount charged by the owner or operator for use of the vacation rental.
Exclude service fees from the calculation of taxes remitted by an advertising platform to the
DOR, unless the advertising platform owns, is related to, operates, or manages the vacation
rental.
Require the DOR and other jurisdictions to allow advertising platforms to register, collect, and
remit such taxes.
The bill provides that advertising platforms that comply with the requirements are deemed to be in
compliance. The bill also provides that it does not create and is not intended to create a private cause
of action against advertising platforms, and an advertising platform may not be held liable for any action
it takes voluntarily in good faith in relation to its users to comply with ch. 509, F.S., or the advertising
platform's terms of service.
Division Requirements
By July 1, 2024, the bill requires the Division to maintain vacation rental license information in a readily
accessible electronic format.
The bill provides enforcement processes for the Division to issue a cease and desist order for any
person who violates ch. 509, F.S., the chapter of law governing “lodging and food service
establishments.” The bill authorizes the Division to seek an injunction or a writ of mandamus to enforce
a cease and desist order. If the Division is required to seek enforcement of the notice for a penalty
pursuant to s. 120.69, F.S., it is entitled to collect its attorney fees and costs, together with any cost of
collection.
The bill:
Authorizes the Division to fine an advertising platform up to $1,000 per offense for violations of
its new requirements or of the rules of the Division.
60 S. 125.0104, F.S., relates to the local option tourist development tax.
61 S. 125.0108, F.S., relates to the tourist impact tax in areas within a county designated as an area of critical state concern.
62 S. 212.03, F.S., relates to the transient rentals tax.
63 S. 212.0305, F.S., relates to convention development taxes.
64 S. 212.055, F.S., relates to discretionary sales taxes.
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Authorizes the Division to regard as a separate offense each day or portion of a day in which an
advertising platform is operated in violation.
Requires the Division to issue a written warning or notice and provide the advertising platform
15 days to cure such violation before commencing any legal proceeding.
The bill authorizes the Division to revoke, refuse to issue or renew, or suspend for a period of not more
than 30 days a vacation rental license when:
The operation of the subject premises violates the terms of an applicable lease or property
restriction, including any property restriction adopted pursuant to chs. 718, 719, or 720, F.S., as
determined by a final order of a court of competent jurisdiction or a written decision by an
arbitrator authorized to arbitrate a dispute relating to the subject property and a lease or
property restriction;
The owner or operator fails to provide proof of registration, if required by local law, ordinance, or
regulation;
The registration of the vacation rental is terminated by a local government as provided in s.
509.032(7)(b)5., F.S.; or
The premises and its owner are the subject of a final order or judgment lawfully directing the
termination of the premises' use as a vacation rental.
The bill authorizes the Division to suspend, for a period of not more than 30 days, a vacation rental
license when the owner or operator has been cited for two or more code violations related to the
vacation rental during a period of 90 days. The Division is required issue a written warning or notice
and provide an opportunity to cure a violation before commencing a legal proceeding.
Condominiums, Cooperatives, and Homeowners’ Associations
The bill specifies that the application of the provisions in the bill shall not supersede any current or
future declaration or declaration of condominium adopted pursuant to ch. 718, F.S., cooperative
documents adopted pursuant to ch. 719, F.S., or declaration or declaration of covenants adopted
pursuant to ch. 720, F.S.
Department of Revenue Rulemaking
The bill grants DOR emergency rulemaking authority to implement the changes made by the bill
relating to the collection of taxes, including establishing procedures to facilitate the remittance of taxes.
The emergency rules will be effective for 6 months after adoption and may be renewed while DOR
adopts permanent rules. The section of the bill authorizing the emergency rules will expire January 1,
2025.
Sexual Offenders and Predators
The bill amends s. 775.21, F.S., to require sexual offenders and sexual predators to register with the
local sheriff’s office if they stay in a vacation rental for 24 hours or more (currently set at stays of 3 days
or more).
Effective Date
The bill becomes effective upon becoming law, except for the provisions otherwise expressly provided
in the bill. The requirements for vacation rental owners or operators to display license and registration
information become effective January 1, 2024. The bill requires the Division to maintain vacation rental
license information in a readily accessible electronic format by July 1, 2024. The provisions governing
advertising platforms become effective January 1, 2024.
B. SECTION DIRECTORY:
Section 1: Amends s. 212.03, F.S., relating to transient rentals tax collection and remittance by
advertising platforms.
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Section 2: Amends s. 509.013, F.S., defining the term "advertising platform."
Section 3: Amends s. 509.032, F.S., revising preemption authority, making conforming changes.
Section 4: Amends s. 509.241, F.S., revising display of vacation rental license requirements.
Section 5: Creates s. 509.243, F.S., governing advertising platforms.
Section 6: Amends s. 509.261, F.S., relating to revocation or suspension of licenses, fines,
procedure.
Section 7: Amends s. 775.21, F.S., revising “The Florida Sexual Predators Act.”
Section 8: Amends s. 159.27, F.S., conforming a cross reference.
Section 9: Amends s. 212.08, F.S., conforming a cross reference.
Section 10: Amends s. 316.1955, F.S., conforming a cross reference.
Section 11 Amends s. 404.056, F.S., conforming a cross reference.
Section 12: Amends s. 477.0135, F.S., conforming a cross reference.
Section 13: Amends s. 509.221, F.S., conforming a cross reference.
Section 14: Amends s. 553.5041, F.S., conforming a cross reference.
Section 15: Amends s. 559.955 conforming a cross reference.
Section 16: Amends s. 705.17, F.S., conforming a cross reference.
Section 17: Amends s. 705.185, F.S., conforming a cross reference.
Section 18: Amends s. 705.1355, F.S., conforming a cross reference.
Section 19: Amends s. 877.24, F.S., conforming a cross reference.
Section 20: Creates an unnumbered section providing for applicability.
Section 21: Creates an unnumbered section authorizing DOR emergency rulemaking authority.
Section 22: Provides for effective dates.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
On March 3, 2023, the Revenue Estimating Conference estimated that the bill would have a zero
impact on state government revenues.
2. Expenditures:
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The Florida Department of Law Enforcement (FDLE) expects the bill will cost the department
$731,633 in FY 2023-24, which includes the cost of implementing the new requirements. 65
Additionally, FDLE expects a recurring $314,105 in expenditures to cover four new positions
needed to accommodate the increased workload.
FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
On March 3, 2023, the Revenue Estimating Conference estimated that the bill would have a zero
impact on local government revenues.
2. Expenditures:
FDLE expects that the bill will lead to additional costs associated with an increase in workload at
sheriff’s offices around the state, as sexual predators and offenders go in to register in-person.66
B. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may provide a more predictable and uniform regulatory framework for vacation rentals in
Florida.
C. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to require counties or municipalities to take an action
requiring the expenditure of funds, reduce the authority that counties or municipalities have to raise
revenue in the aggregate, nor reduce the percentage of state tax shared with counties or
municipalities.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill provides emergency rulemaking authority for DOR to implement the bill’s provisions.
The Division will need to update its rules based on the provision that authorizes the Division to fine an
advertising platform. Current law appears to provide sufficient rulemaking authority.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/ COMMITTEE SUBSTITUTE CHANGES
On March 28, 2023, the Regulatory Reform & Economic Development Subcommittee adopted one amendment
and reported the bill favorably as a committee substitute. The committee substitute made technical and
conforming changes related to the advertising platform tax requirements.
65 Florida Department of Law Enforcement, Agency Analysis of House Bill 833 (2023) dated March 7, 2023.
66 Id.
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This analysis is drafted to the committee substitute as passed by the Regulatory Reform & Economic
Development Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 833 2023
1 A bill to be entitled
2 An act relating to vacation rentals; amending s.
3 212.03, F.S.; requiring advertising platforms to
4 collect and remit taxes for certain transactions;
5 reordering and amending s. 509.013, F.S.; defining the
6 term "advertising platform"; amending s. 509.032,
7 F.S.; revising the regulated activities of public
8 lodging establishments and public food service
9 establishments preempted to the state to include
10 licensing; revising an exemption to the prohibition
11 against certain local regulation of vacation rentals;
12 expanding the authority of local laws, ordinances, or
13 regulations to include requiring vacation rentals to
14 register with local vacation rental registration
15 programs; authorizing local governments to adopt
16 vacation rental registration programs and impose fines
17 for failure to register; authorizing local governments
18 to charge fees for processing registration
19 applications; specifying requirements, procedures, and
20 limitations for local vacation rental registration
21 programs; authorizing local governments to terminate
22 or refuse to issue or renew vacation rental
23 registrations under certain circumstances; preempting
24 the regulation of advertising platforms to the state;
25 conforming a cross-reference; amending s. 509.241,
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26 F.S.; requiring applications for vacation rental
27 licenses to include certain information; authorizing
28 the Division of Hotels and Restaurants of the
29 Department of Business and Professional Regulation to
30 issue temporary licenses upon receipt of vacation
31 rental license applications; providing for expiration
32 of temporary vacation rental licenses; requiring
33 licenses issued by the division to be displayed
34 conspicuously to the public inside the licensed
35 establishment; requiring the owner or operator of
36 certain vacation rentals to also display its vacation
37 rental license number and applicable local
38 registration number; creating s. 509.243, F.S.;
39 requiring advertising platforms to require that
40 persons placing advertisements for vacation rentals
41 include certain information in the advertisements and
42 attest to certain information; requiring advertising
43 platforms to display and check such information;
44 requiring the division to maintain certain information
45 in a readily accessible electronic format by a certain
46 date; requiring advertising platforms to remove an
47 advertisement or listing under certain conditions and
48 within a specified timeframe; requiring advertising
49 platforms to collect and remit taxes for certain
50 transactions; authorizing the division to issue and
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51 deliver a notice to cease and desist for certain
52 violations; providing that such notice does not
53 constitute agency action for which certain hearings
54 may be sought; authorizing the division to file
55 certain proceedings; authorizing the division to seek
56 certain remedies for the purpose of enforcing a cease
57 and desist notice; authorizing the division to collect
58 attorney fees and costs under certain circumstances;
59 authorizing the division to impose a fine on
60 advertising platforms for certain violations;
61 requiring the division to issue written warnings or
62 notices before commencing certain legal proceedings;
63 requiring advertising platforms to adopt an
64 antidiscrimination policy and to inform their users of
65 the policy's provisions; providing construction;
66 amending s. 509.261, F.S.; authorizing the division to
67 revoke, refuse to issue or renew, or suspend vacation
68 rental licenses under certain circumstances; amending
69 s. 775.21, F.S.; revising the definition of the term
70 "temporary residence"; amending ss. 159.27, 212.08,
71 316.1955, 404.056, 477.0135, 509.221, 553.5041,
72 559.955, 705.17, 705.185, 717.1355, and 877.24, F.S.;
73 conforming cross-references to changes made by the
74 act; providing applicability; authorizing the
75 Department of Revenue to adopt emergency rules;
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76 providing requirements and an expiration for the
77 emergency rules; providing for the expiration of such
78 rulemaking authority; providing effective dates.
79
80 Be It Enacted by the Legislature of the State of Florida:
81
82 Section 1. Effective January 1, 2024, subsection (2) of
83 section 212.03, Florida Statutes, is amended to rea d:
84 212.03 Transient rentals tax; rate, procedure,
85 enforcement, exemptions.—
86 (2)(a) The tax provided for herein shall be in addition to
87 the total amount of the rental, shall be charged by the lessor
88 or person receiving the rent in and by said rental arrangement
89 to the lessee or person paying the rental, and shall be due and
90 payable at the time of the receipt of such rental payment by the
91 lessor or person, as defined in this chapter, who receives said
92 rental or payment. The owner, lessor, or person receiving the
93 rent shall remit the tax to the department at the times and in
94 the manner hereinafter provided for dealers to remit taxes under
95 this chapter. The same duties imposed by this chapter upon
96 dealers in tangible personal property respecting the collecti on
97 and remission of the tax; the making of returns; the keeping of
98 books, records, and accounts; and the compliance with the rules
99 and regulations of the department in the administration of this
100 chapter shall apply to and be binding upon all persons who
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101 manage or operate hotels, apartment houses, roominghouses,
102 tourist and trailer camps, and the rental of condominium units,
103 and to all persons who collect or receive such rents on behalf
104 of such owner or lessor taxable under this chapter.
105 (b) If a guest uses a payment system on or through an
106 advertising platform, as defined in s. 509.013, to pay for the
107 rental of a vacation rental located in this state, the
108 advertising platform shall collect and remit taxes as provided
109 in this paragraph.
110 1. An advertising platform, as defined in s. 509.013,
111 which owns, operates, or manages a vacation rental or which is
112 related within the meaning of ss. 267(b), 707(b), or 1504 of the
113 Internal Revenue Code of 1986, as amended, to a person who owns,
114 operates, or manages the vacation rental shall collect and remit
115 all taxes due under this section and ss. 125.0104, 125.0108,
116 212.0305, and 212.055 which are related to the rental.
117 2. An advertising platform to which subparagraph 1. does
118 not apply shall collect and remit all taxes due from the owner,
119 operator, or manager under this section and ss. 125.0104,
120 125.0108, 212.0305, and 212.055 which are related to the rental.
121 Of the total amount paid by the lessee or rentee, the amount
122 retained by the advertising platform for reservatio n or payment
123 service is not taxable under this section or ss. 125.0104,
124 125.0108, 212.0305, and 212.055.
125
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126 In order to facilitate the remittance of such taxes, the
127 counties that have elected to self-administer the taxes imposed
128 under chapter 125 must allow advertising platforms to register,
129 collect, and remit such taxes.
130 Section 2. Section 509.013, Florida Statutes, is amended
131 to read:
132 509.013 Definitions.—As used in this chapter, the term:
133 (1) "Advertising platform" means a person as defined in s.
134 1.01 who:
135 (a) Provides an online application, software, a website,
136 or a system through which a vacation rental located in this
137 state is advertised or held out to the public as available to
138 rent for transient occupancy;
139 (b) Provides or maintains a marketplace for the renting of
140 a vacation rental for transient occupancy; and
141 (c) Provides a reservation or payment system that
142 facilitates a transaction for the renting of a vacation rental
143 for transient occupancy and for which the person collects or
144 receives, directly or indirectly, a fee in connection with the
145 reservation or payment service provided for the rental
146 transaction.
147 (2) "Director" means the Director of the Division of
148 Hotels and Restaurants of the Department of Business and
149 Professional Regulation.
150 (3)(1) "Division" means the Division of Hotels and
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151 Restaurants of the Department of Business and Professional
152 Regulation.
153 (2) "Operator" means the owner, licensee, proprietor,
154 lessee, manager, assistant manager, or appointed agent of a
155 public lodging establishment or public food service
156 establishment.
157 (4)(3) "Guest" means any patron, customer, tenant, lodger,
158 boarder, or occupant of a public lodging establishment or public
159 food service establishment.
160 (5) "Nontransient" means a guest in nontransient
161 occupancy.
162 (6) "Nontransient establishment" means any public lodging
163 establishment that is rented or leased to guests by an operator
164 whose intention is that the dwelling unit occupied will be the
165 sole residence of the guest.
166 (7) "Nontransient occupancy" means occupancy when it is
167 the intention of the parties that the occupancy will not be
168 temporary. There is a rebuttable presumption that, when the
169 dwelling unit occupied is the sole residence of the guest, the
170 occupancy is nontransient.
171 (8) "Operator" means the owner, licensee, proprietor,
172 lessee, manager, assistant manager, or appointed agent of a
173 public lodging establishment or public food service
174 establishment.
175 (4)(a) "Public lodging establishment" includes a transient
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176 public lodging establishment as defined in subparagraph 1. and a
177 nontransient public lodging establishment as defined in
178 subparagraph 2.
179 1. "Transient public lodging establishment" means any
180 unit, group of units, dwelling, building, or group of buildings
181 within a single complex of buildings which is rented to guests
182 more than three times in a calendar year for periods of less
183 than 30 days or 1 calendar month, whichever is less, or which is
184 advertised or held out to the public as a place regularly rented
185 to guests.
186 2. "Nontransient public lodging establishment" means any
187 unit, group of units, dwelling, building, or group of buildings
188 within a single complex of buildings which is rented to guests
189 for periods of at least 30 days or 1 calendar month, whichever
190 is less, or which is advertised or held out to the public as a
191 place regularly rented to guests for periods of at least 30 days
192 or 1 calendar month. License classifications of public lodging
193 establishments, and the definitions therefor, are set out in s.
194 509.242. For the purpose of licensure, the term does not include
195 condominium common elements as defined in s. 718.103.
196 (b) The following are excluded from the definitions in
197 paragraph (a):
198 1. Any dormitory or other living or sleeping facility
199 maintained by a public or private school, college, or university
200 for the use of students, faculty, or visitors.
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201 2. Any facility certified or licensed and regulated by the
202 Agency for Health Care Administration or the Department of
203 Children and Families or other similar place regulated under s.
204 381.0072.
205 3. Any place renting four rental units or less, unless the
206 rental units are advertised or held out to the public to be
207 places that are regularly rented to transients.
208 4. Any unit or group of units in a condominium,
209 cooperative, or timeshare plan and any individually or
210 collectively owned one-family, two-family, three-family, or
211 four-family dwelling house or dwelling unit that is rented for
212 periods of at least 30 days or 1 calendar month, whichever is
213 less, and that is not advertised or held out to the public as a
214 place regularly rented for periods of less than 1 calendar
215 month, provided that no more than four rental units within a
216 single complex of buildings are available for rent.
217 5. Any migrant labor camp or residential migrant housing
218 permitted by the Department of Health under ss. 381.008 -
219 381.00895.
220 6. Any establishment inspected by the Department of Health
221 and regulated by chapter 513.
222 7. Any nonprofit organization that operates a facility
223 providing housing only to patients, patients' families, and
224 patients' caregivers and not to the general public.
225 8. Any apartment building inspected by the United States
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226 Department of Housing and Urban Development or other entity
227 acting on the department's behalf that is designated primarily
228 as housing for persons at least 62 years of age. The division
229 may require the operator of the apartment building to attest in
230 writing that such building meets the criteria provided in this
231 subparagraph. The division may adopt rules to implement th is
232 requirement.
233 9. Any roominghouse, boardinghouse, or other living or
234 sleeping facility that may not be classified as a hotel, motel,
235 timeshare project, vacation rental, nontransient apartment, bed
236 and breakfast inn, or transient apartment under s. 509. 242.
237 (9)(a)(5)(a) "Public food service establishment" means any
238 building, vehicle, place, or structure, or any room or division
239 in a building, vehicle, place, or structure where food is
240 prepared, served, or sold for immediate consumption on or in the
241 vicinity of the premises; called for or taken out by customers;
242 or prepared before prior to being delivered to another location
243 for consumption. The term includes a culinary education program,
244 as defined in s. 381.0072(2), which offers, prepares, serves, or
245 sells food to the general public, regardless of whether it is
246 inspected by another state agency for compliance with sanitation
247 standards.
248 (b) The following are excluded from the definition in
249 paragraph (a):
250 1. Any place maintained and operated by a public or
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251 private school, college, or university:
252 a. For the use of students and faculty; or
253 b. Temporarily to serve such events as fairs, carnivals,
254 food contests, cook-offs, and athletic contests.
255 2. Any eating place maintained and operated by a church or
256 a religious, nonprofit fraternal, or nonprofit civic
257 organization:
258 a. For the use of members and associates; or
259 b. Temporarily to serve such events as fairs, carnivals,
260 food contests, cook-offs, or athletic contests.
261
262 Upon request by the division, a church or a religious, nonprofit
263 fraternal, or nonprofit civic organization claiming an exclusion
264 under this subparagraph must provide the division documentation
265 of its status as a church or a religious, nonprofit fraternal,
266 or nonprofit civic organization.
267 3. Any eating place maintained and operated by an
268 individual or entity at a food contest, cook-off, or a temporary
269 event lasting from 1 to 3 days which is hosted by a church or a
270 religious, nonprofit fraternal, or nonprofit civic organization.
271 Upon request by the division, the event host must provide the
272 division documentation of its status as a church or a religious,
273 nonprofit fraternal, or nonprofit civic organization.
274 4. Any eating place located on an airplane, train, bus, or
275 watercraft that which is a common carrier.
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276 5. Any eating place maintained by a facility certified or
277 licensed and regulated by the Agency for Health Care
278 Administration or the Department of Children and Families or
279 other similar place that is regulated under s. 381.0072.
280 6. Any place of business issued a permit or inspected by
281 the Department of Agriculture and Consumer Services under s.
282 500.12.
283 7. Any place of business where the food available for
284 consumption is limited to ice, beverages with or without
285 garnishment, popcorn, or prepackaged items sold without
286 additions or preparation.
287 8. Any theater, if the primary use is as a theater and if
288 patron service is limited to food items customarily served to
289 the admittees of theaters.
290 9. Any vending machine that dispenses any food or
291 beverages other than potentially hazardous foods, as defined by
292 division rule.
293 10. Any vending machine that dispenses potentially
294 hazardous food and which is located in a facility regulated
295 under s. 381.0072.
296 11. Any research and development test kitchen limited to
297 the use of employees and which is not open to the general
298 public.
299 (6) "Director" means the Director of the Division of
300 Hotels and Restaurants of the Department of Business and
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301 Professional Regulation.
302 (10)(a) "Public lodging establishment" includes a
303 transient public lodging establishment as defined in
304 subparagraph 1. and a nontransient public lodging establishment
305 as defined in subparagraph 2.
306 1. "Transient public lodging establishment" means any
307 unit, group of units, dwelling, building, or group of buildings
308 within a single complex of buildings which is rented to guests
309 more than three times in a calendar year for periods of less
310 than 30 days or 1 calendar month, whichever is less, or which is
311 advertised or held out to the public as a place regularly rented
312 to guests.
313 2. "Nontransient public lodging establishment" means any
314 unit, group of units, dwelling, building, or group of buildings
315 within a single complex of buildings which is rented to guests
316 for periods of at least 30 days or 1 calendar month, whichever
317 is less, or which is advertised or held out to the public as a
318 place regularly rented to guests for periods of at least 30 days
319 or 1 calendar month.
320
321 License classifications of public lodging establishments, and
322 the definitions therefor, are set out in s. 509.242. For the
323 purpose of licensure, the term does not include condominium
324 common elements as defined in s. 718.103.
325 (b) The following are excluded from the definitions in
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326 paragraph (a):
327 1. Any dormitory or other living or sleeping facility
328 maintained by a public or private school, college, or university
329 for the use of students, faculty, or visitors.
330 2. Any facility certified or licensed and regulated by the
331 Agency for Health Care Administration or the Department of
332 Children and Families or other similar place regulated under s.
333 381.0072.
334 3. Any place renting four rental units or less, unless the
335 rental units are advertised or held out to the public to be
336 places that are regularly rented to transients.
337 4. Any unit or group of units in a condominium,
338 cooperative, or timeshare plan and any individually or
339 collectively owned one-family, two-family, three-family, or
340 four-family dwelling house or dwelling unit that is rented for
341 periods of at least 30 days or 1 calendar month, whichever is
342 less, and that is not advertised or held out to the public as a
343 place regularly rented for periods of less than 1 calendar
344 month, provided that no more than four rental units within a
345 single complex of buildings are available for rent.
346 5. Any migrant labor camp or residential migrant housing
347 permitted by the Department of Health under ss. 381.008 -
348 381.00895.
349 6. Any establishment inspected by the Department of Health
350 and regulated by chapter 513.
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351 7. Any nonprofit organization that operates a facility
352 providing housing only to patients, patients' families, and
353 patients' caregivers and not to the general public.
354 8. Any apartment building inspected by the United States
355 Department of Housing and Urban Development or other en tity
356 acting on the department's behalf that is designated primarily
357 as housing for persons at least 62 years of age. The division
358 may require the operator of the apartment building to attest in
359 writing that such building meets the criteria provided in this
360 subparagraph. The division may adopt rules to implement this
361 requirement.
362 9. Any roominghouse, boardinghouse, or other living or
363 sleeping facility that may not be classified as a hotel, motel,
364 timeshare project, vacation rental, nontransient apartment, bed
365 and breakfast inn, or transient apartment under s. 509.242.
366 (11)(7) "Single complex of buildings" means all buildings
367 or structures that are owned, managed, controlled, or operated
368 under one business name and are situated on the same tract or
369 plot of land that is not separated by a public street or
370 highway.
371 (12)(8) "Temporary food service event" means any event of
372 30 days or less in duration where food is prepared, served, or
373 sold to the general public.
374 (13)(9) "Theme park or entertainment complex" means a
375 complex comprised of at least 25 contiguous acres owned and
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376 controlled by the same business entity and which contains
377 permanent exhibitions and a variety of recreational activities
378 and has a minimum of 1 million visitors annually.
379 (14)(10) "Third-party provider" means, for purposes of s.
380 509.049, any provider of an approved food safety training
381 program that provides training or such a training program to a
382 public food service establishment that is not under common
383 ownership or control with the provider.
384 (15) "Transient" means a guest in transient occupancy.
385 (16)(11) "Transient establishment" means any public
386 lodging establishment that is rented or leased to guests by an
387 operator whose intention is that such guests' occupancy will be
388 temporary.
389 (17)(12) "Transient occupancy" means occupancy when it is
390 the intention of the parties that the occupancy will be
391 temporary. There is a rebuttable presumption that, when the
392 dwelling unit occupied is not the sole residence of the guest,
393 the occupancy is transient.
394 (13) "Transient" means a guest in transient occupancy.
395 (14) "Nontransient establishment" means any public lodging
396 establishment that is rented or leased to guests by an operator
397 whose intention is that the dwelling unit occupied will be the
398 sole residence of the guest.
399 (15) "Nontransient occupancy" means occupancy when it is
400 the intention of the parties that the occupancy will not be
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401 temporary. There is a rebuttable presumption that, when the
402 dwelling unit occupied is the sole residence of the guest, the
403 occupancy is nontransient.
404 (16) "Nontransient" means a guest in nontransient
405 occupancy.
406 Section 3. Paragraph (c) of subsection (3) and paragraphs
407 (a) and (b) of subsection (7) of section 509.032, Florida
408 Statutes, are amended, and paragraph (d) is added to subsection
409 (7) of that section, to read:
410 509.032 Duties.—
411 (3) SANITARY STANDARDS; EMERGENCIES; TEMPORARY FOOD
412 SERVICE EVENTS.—The division shall:
413 (c) Administer a public notification process for temporary
414 food service events and distribute educational materials that
415 address safe food storage, preparation, and service procedures.
416 1. Sponsors of temporary food service events shall notify
417 the division not less than 3 days before the schedule d event of
418 the type of food service proposed, the time and location of the
419 event, a complete list of food service vendors participating in
420 the event, the number of individual food service facilities each
421 vendor will operate at the event, and the identification number
422 of each food service vendor's current license as a public food
423 service establishment or temporary food service event licensee.
424 Notification may be completed orally, by telephone, in person,
425 or in writing. A public food service establishment or food
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426 service vendor may not use this notification process to
427 circumvent the license requirements of this chapter.
428 2. The division shall keep a record of all notifications
429 received for proposed temporary food service events and shall
430 provide appropriate educational materials to the event sponsors
431 and notify the event sponsors of the availability of the food -
432 recovery brochure developed under s. 595.420.
433 3.a. Unless excluded under s. 509.013 s. 509.013(5)(b), a
434 public food service establishment or other food service vendor
435 must obtain one of the following classes of license from the
436 division: an individual license, for a fee of no more than $105,
437 for each temporary food service event in which it participates;
438 or an annual license, for a fee of no more than $1,000, that
439 entitles the licensee to participate in an unlimited number of
440 food service events during the license period. The division
441 shall establish license fees, by rule, and may limit the number
442 of food service facilities a licensee may operate at a
443 particular temporary food service event under a single license.
444 b. Public food service establishments holding current
445 licenses from the division may operate under the regulations of
446 such a license at temporary food service events.
447 (7) PREEMPTION AUTHORITY.—
448 (a) The regulation of public lodging establishments and
449 public food service establishments, including, but not limited
450 to, sanitation standards, licensing, inspections, training and
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451 testing of personnel, and matters related to the nutritional
452 content and marketing of foods offered in such establishments,
453 is preempted to the state. This paragraph does not preempt the
454 authority of a local government or local enforcement district to
455 conduct inspections of public lodging and public food service
456 establishments for compliance with the Florida Building Code and
457 the Florida Fire Prevention Code, pursuant to ss. 553.80 and
458 633.206.
459 (b)1. A local law, ordinance, or regulation may not
460 prohibit vacation rentals or regulate the duration or frequency
461 of rental of vacation rentals. This paragraph does not apply to
462 any local law, ordinance, or regulation adopted on or before
463 June 1, 2011, including when such law, ordinance, or regulation
464 is amended to be less restrictive or to comply with the local
465 registration requirements provided in this paragraph, or when a
466 law, ordinance, or regulation adopted after June 1, 2011,
467 regulates vacation rentals, if such law, ordinance, or
468 regulation is less restrictive than a law, ordinance, or
469 regulation that was in effect on June 1, 2011. Notwithstanding
470 paragraph (a), a local law, ordinance, or regulation may require
471 the registration of vacation rentals with a local vacation
472 rental registration program. Local governments may adopt a
473 vacation rental registration program pursuant to subparagraph 3.
474 and impose a fine for failure to register under the vacation
475 rental registration program.
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476 2. Local governments may charge a fee of no more than $50
477 for processing an individual registration application or $100
478 for processing a collective registration application. A local
479 law, ordinance, or regulation may not require renewal of a
480 registration more than once per year. However, if there is a
481 change of ownership, the new owner may be required to submit a
482 new application for registration.
483 3. As a condition of registration, the local law,
484 ordinance, or regulation may only require the owner or operator
485 of a vacation rental to:
486 a. Submit identifying information about the owner or the
487 owner's agents and the subject vacation rental property.
488 b. Obtain a license as a transient public lodging
489 establishment issued by the division within 60 days after local
490 registration.
491 c. Obtain all required tax registrations, receipts, or
492 certificates issued by the Department of Revenue, a county, or a
493 municipal government.
494 d. Update required information on a continuing basis to
495 ensure it is current.
496 e. Comply with parking standards and solid waste handling
497 and containment requirements, so long as such standards and
498 requirements are not imposed solely on vacation rentals.
499 f. Designate and maintain at all times a responsible party
500 who is capable of responding to complaints and other immediate
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501 problems related to the vacation rental, including being
502 available by telephone at a listed phone number.
503 g. Pay in full all recorded municipal or county code liens
504 against the subject property. The local government may withdraw
505 its acceptance of a registration on the basis of an unsatisfied
506 recorded municipal or county code lien.
507 4.a. Within 15 business days after receiving an
508 application for registration of a vacation rental, the local
509 government must review the application for completeness and
510 accept the registration of the vacation rental or issue a
511 written notice specifying with particularity any areas that are
512 deficient. Such notice may be provided by United States mail or
513 electronically.
514 b. The vacation rental owner or operator and the local
515 government may agree to a reasonable request to extend the
516 timeframes provided in this subparagraph, particularly in the
517 event of a force majeure or other extraordinary circumstance.
518 c. When a local government denies an application for
519 registration of a vacation rental, the local government must
520 give written notice to the applicant. Such notice may be
521 provided by United States mail or electronically. The notice
522 must specify with particularity the factual reasons for the
523 denial and include a citation to the applicable portions of an
524 ordinance, a rule, a statute, or other legal authority for the
525 denial of the registration. A local government may not deny any
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526 applicant from reapplying if the applicant cures the identified
527 deficiencies.
528 d. If the local government fails to accept or deny the
529 registration within the timeframes provided in this
530 subparagraph, the application is deemed accepted.
531 e. Upon an accepted registration of a vacation rental, a
532 local government shall assign a unique registration number to
533 the vacation rental or other indicia of registration and provide
534 the registration number or other indicia of registrat ion to the
535 owner or operator of the vacation rental in writing or
536 electronically.
537 5. The local government may terminate or refuse to issue
538 or renew a vacation rental registration when:
539 a. The operation of the subject premises violates a
540 registration requirement authorized pursuant to this paragraph
541 or a local law, ordinance, or regulation that does not apply
542 solely to vacation rentals; or
543 b. The premises and its owner are the subject of a final
544 order or judgment lawfully directing the termination of the
545 premises' use as a vacation rental.
546 (d) The regulation of advertising platforms is preempted
547 to the state as provided in this chapter.
548 Section 4. Effective January 1, 2024, subsections (2) and
549 (3) of section 509.241, Florida Statutes, are amended to read:
550 509.241 Licenses required; exceptions.—
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551 (2) APPLICATION FOR LICENSE.—Each person who plans to open
552 a public lodging establishment or a public food service
553 establishment shall apply for and receive a license from the
554 division before prior to the commencement of operation. A
555 condominium association, as defined in s. 718.103, which does
556 not own any units classified as vacation rentals or timeshare
557 projects under s. 509.242(1)(c) or (g) is not required to apply
558 for or receive a public lodging establishment license. All
559 applications for a vacation rental license must, if applicable,
560 include the local registration number or other proof of
561 registration required by local law, ordinance, or regulation.
562 Upon receiving an application for a vacation rental license, the
563 division may grant a temporary license that authorizes the
564 vacation rental to begin operation while the application is
565 pending and to post the information required under s.
566 509.243(1)(c). The temporary license automatically expires upon
567 final agency action regarding the license application.
568 (3) DISPLAY OF LICENSE.—Any license issued by the division
569 must shall be conspicuously displayed to the public inside in
570 the office or lobby of the licensed establishment. Public food
571 service establishments that which offer catering services must
572 shall display their license number on all advertising for
573 catering services. The owner or operator of a vacation rental
574 offered for transient occupancy through an advertising platform
575 must also display the vacation rental license number and, if
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576 applicable, the local registration number.
577 Section 5. Effective January 1, 2024, section 509.243,
578 Florida Statutes, is created to read:
579 509.243 Advertising platforms.—
580 (1)(a) An advertising platform must require that a person
581 who places an advertisement for the rental of a vacation rental:
582 1. Include in the advertisement the vacation rental
583 license number and, if applicable, the local registration
584 number; and
585 2. Attest to the best of the person's knowledge that the
586 license number for the vacation rental property and the local
587 registration are current, valid, and accurately stated in the
588 advertisement.
589 (b) An advertising platform must display the vacation
590 rental license number and, if applicable, the local registra tion
591 number. Effective July 1, 2024, the advertising platform must
592 check that the vacation rental license number provided by the
593 owner or operator appears as current in the information posted
594 by the division pursuant to paragraph (c) and applies to the
595 subject vacation rental before publishing the advertisement on
596 its platform and again at the end of each calendar quarter that
597 the advertisement remains on its platform.
598 (c) By July 1, 2024, the division shall maintain vacation
599 rental license information in a readily accessible electronic
600 format that is sufficient to facilitate prompt compliance with
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601 the requirements of this subsection by an advertising platform
602 or a person placing an advertisement on an advertising platform
603 for transient rental of a vacation rental.
604 (2) An advertising platform must remove from public view
605 an advertisement or a listing from its online application,
606 software, website, or system within 15 business days after being
607 notified by the division in writing that the subject
608 advertisement or listing for the rental of a vacation rental
609 located in this state fails to display a valid license number
610 issued by the division.
611 (3) If a guest uses a payment system on or through an
612 advertising platform to pay for the rental of a vacation rental
613 located in this state, the advertising platform must collect and
614 remit all taxes due under ss. 125.0104, 125.0108, 205.044,
615 212.03, 212.0305, and 212.055 related to the rental as provided
616 in s. 212.03(2)(b).
617 (4) If the division has probable cause to believe that a
618 person not licensed by the division has violated this chapter or
619 any rule adopted pursuant thereto, the division may issue and
620 deliver to such person a notice to cease and desist from the
621 violation. The issuance of a notice to cease and desist does not
622 constitute agency action for which a hearing under s. 120.569 or
623 s. 120.57 may be sought. For the purpose of enforcing a cease
624 and desist notice, the division may file a proceeding in the
625 name of the state seeking the issuance of an injunction or a
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626 writ of mandamus against any person who violates any provision
627 of the notice. If the division is required to seek enforcement
628 of the notice for a penalty pursuant to s. 120.69, it is
629 entitled to collect attorney fees and costs, together with any
630 cost of collection.
631 (5) The division may fine an advertising platform an
632 amount not to exceed $1,000 per offense for violations of this
633 section or of the rules of the division. For the purposes of
634 this subsection, the division may regard as a separate offense
635 each day or portion of a day in which an advertising platform is
636 operated in violation of this section or rules of the division.
637 The division shall issue a written warning or notice and provide
638 the advertising platform 15 days to cure a violation before
639 commencing any legal proceeding under subsection (4).
640 (6) Advertising platforms shall adopt an
641 antidiscrimination policy to help prevent discrimination among
642 their users and shall inform all users of their services that it
643 is illegal to refuse accommodation to an individual based on
644 race, creed, color, sex, pregnancy, physical disability, or
645 national origin pursuant to s. 509.092.
646 (7) Advertising platforms that comply with the
647 requirements of this section are deemed to be in compliance with
648 the requirements of this chapter. This section does not create
649 and is not intended to create a private cause of action against
650 advertising platforms. An advertising platform may not be held
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651 liable for any action it takes voluntarily in good faith in
652 relation to its users to comply with this chapter or the
653 advertising platform's terms of service.
654 Section 6. Subsections (10) and (11) are added to section
655 509.261, Florida Statutes, to read:
656 509.261 Revocation or suspension of licenses; fines;
657 procedure.—
658 (10) The division may revoke, refuse to issue or renew, or
659 suspend for a period of not more than 30 days a vacation rental
660 license when:
661 (a) The operation of the subject premises violates the
662 terms of an applicable lease or property restriction, including
663 any property restriction adopted pursuant to chapter 718,
664 chapter 719, or chapter 720, as determined by a final order of a
665 court of competent jurisdiction or a written decision by an
666 arbitrator authorized to arbitrate a dispute relating to the
667 subject property and a lease or property restriction;
668 (b) The owner or operator fails to provide proof of
669 registration, if required by local law, ordinance, or
670 regulation;
671 (c) The registration of the vacation rental is terminated
672 by a local government as provided in s. 509.032(7)(b)5.; or
673 (d) The premises and its owner are the subject of a final
674 order or judgment lawfully directing the termination of the
675 premises' use as a vacation rental.
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676 (11) The division may suspend, for a period of not more
677 than 30 days, a vacation rental license when the owner or
678 operator has been found by the code enforcement board, pursuant
679 to s. 162.06, to have two or more code violations related to the
680 vacation rental during a period of 90 days. The division shall
681 issue a written warning or notice and provide an opportunity to
682 cure a violation before commencing any legal proceeding under
683 this subsection.
684 Section 7. Paragraph (n) of subsection (2) of section
685 775.21, Florida Statutes, is amended to read:
686 775.21 The Florida Sexual Predators Act.—
687 (2) DEFINITIONS.—As used in this section, the term:
688 (n) "Temporary residence" means a place where the person
689 abides, lodges, or resides, including, but not limited to,
690 vacation, business, or personal travel destinations in or out of
691 this state, for a period of 3 or more days in the aggregate
692 during any calendar year and which is not the person's permanent
693 address or, for a person whose permanent residence is not in
694 this state, a place where the person is employed, practices a
695 vocation, or is enrolled as a student for any period of time in
696 this state. The term also includes a vacation rental, as defined
697 in s. 509.242(1)(c), where a person lodges for 24 hours or more.
698 Section 8. Subsection (12) of section 159.27, Florida
699 Statutes, is amended to read:
700 159.27 Definitions.—The following words and terms, unless
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701 the context clearly indicates a different meaning, shall have
702 the following meanings:
703 (12) "Public lodging or restaurant facility" means
704 property used for any public lodging establishment as defined in
705 s. 509.242 or public food service establishment as defined in s.
706 509.013 s. 509.013(5) if it is part of the complex of, or
707 necessary to, another facility qualifying under this part.
708 Section 9. Paragraph (jj) of subsection (7) of section
709 212.08, Florida Statutes, is amended to read:
710 212.08 Sales, rental, use, consumption, distribution, and
711 storage tax; specified exemptions.—The sale at retail, the
712 rental, the use, the consumption, the distribution, and the
713 storage to be used or consumed in this state of the following
714 are hereby specifically exempt from the tax imposed by this
715 chapter.
716 (7) MISCELLANEOUS EXEMPTIONS.—Exemptions provided to any
717 entity by this chapter do not inure to any transaction that is
718 otherwise taxable under this chapter when payment is made by a
719 representative or employee of the entity by any means,
720 including, but not limited to, cash, check, or credit card, even
721 when that representative or employee is subsequently reimbursed
722 by the entity. In addition, exemptions provided to any entity by
723 this subsection do not inure to any transaction that is
724 otherwise taxable under this chapter unless the entity has
725 obtained a sales tax exemption certificate from the department
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726 or the entity obtains or provides other documentation as
727 required by the department. Eligible purchases or leases made
728 with such a certificate must be in strict compliance with this
729 subsection and departmental rules, and any person who makes an
730 exempt purchase with a certificate that is not in strict
731 compliance with this subsection and the rules is liable for and
732 shall pay the tax. The department may adopt rules to administer
733 this subsection.
734 (jj) Complimentary meals.—Also exempt from the tax imposed
735 by this chapter are food or drinks that are furnished as part of
736 a packaged room rate by any person offering for rent or lease
737 any transient living accommodations as described in s. 509.013
738 s. 509.013(4)(a) which are licensed under part I of chapter 509
739 and which are subject to the tax under s. 212.03, if a separate
740 charge or specific amount for the food or drinks is not shown.
741 Such food or drinks are considered to be sold at retail as part
742 of the total charge for the transient living accommodations.
743 Moreover, the person offering the accommodations is not
744 considered to be the consumer of items purchased in furnishing
745 such food or drinks and may purchase those items under
746 conditions of a sale for resale.
747 Section 10. Paragraph (b) of subsection (4) of section
748 316.1955, Florida Statutes, is amended to read:
749 316.1955 Enforcement of parking requirements for persons
750 who have disabilities.—
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751 (4)
752 (b) Notwithstanding paragraph (a), a theme park or an
753 entertainment complex as defined in s. 509.013 s. 509.013(9)
754 which provides parking in designated areas for persons who have
755 disabilities may allow any vehicle that is transporting a person
756 who has a disability to remain parked in a space reserved for
757 persons who have disabilities throughout the period the theme
758 park is open to the public for that day.
759 Section 11. Subsection (5) of section 404.056, Florida
760 Statutes, is amended to read:
761 404.056 Environmental radiation standards and projects;
762 certification of persons performing measurement or mitigation
763 services; mandatory testing; notification on real estate
764 documents; rules.—
765 (5) NOTIFICATION ON REAL ESTATE DOCUMENTS.—Notification
766 shall be provided on at least one document, form, or application
767 executed at the time of, or before prior to, contract for sale
768 and purchase of any building or execution of a rental agreement
769 for any building. Such notification must shall contain the
770 following language:
771
772 "RADON GAS: Radon is a naturally occurring radioactive gas
773 that, when it has accumulated in a building in sufficient
774 quantities, may present health risks to persons who are exposed
775 to it over time. Levels of radon that exceed federal and state
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776 guidelines have been found in buildings in Florida. Additional
777 information regarding radon and radon testing may be obtained
778 from your county health department."
779
780 The requirements of this subsection do not apply to any
781 residential transient occupancy, as described in s. 509.013 s.
782 509.013(12), provided that such occupancy is 45 days or less in
783 duration.
784 Section 12. Subsection (6) of section 477.0135, Florida
785 Statutes, is amended to read:
786 477.0135 Exemptions.—
787 (6) A license is not required of any individual providing
788 makeup or special effects services in a theme park or
789 entertainment complex to an actor, stunt person, musician,
790 extra, or other talent, or providing makeup or special effects
791 services to the general public. The term "theme park or
792 entertainment complex" has the same meaning as in s. 509.013 s.
793 509.013(9).
794 Section 13. Paragraph (b) of subsection (2) of section
795 509.221, Florida Statutes, is amended to read:
796 509.221 Sanitary regulations.—
797 (2)
798 (b) Within a theme park or entertainment complex as
799 defined in s. 509.013 s. 509.013(9), the bathrooms are not
800 required to be in the same building as the public food service
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801 establishment, so long as they are reasonably accessible.
802 Section 14. Paragraph (b) of subsection (5) of section
803 553.5041, Florida Statutes, is amended to read:
804 553.5041 Parking spaces for persons who have
805 disabilities.—
806 (5) Accessible perpendicular and diagonal accessible
807 parking spaces and loading zones must be designed and l ocated to
808 conform to ss. 502 and 503 of the standards.
809 (b) If there are multiple entrances or multiple retail
810 stores, the parking spaces must be dispersed to provide parking
811 at the nearest accessible entrance. If a theme park or an
812 entertainment complex as defined in s. 509.013 s. 509.013(9)
813 provides parking in several lots or areas from which access to
814 the theme park or entertainment complex is provided, a single
815 lot or area may be designated for parking by persons who have
816 disabilities, if the lot or area is located on the shortest
817 accessible route to an accessible entrance to the theme park or
818 entertainment complex or to transportation to such an accessible
819 entrance.
820 Section 15. Paragraph (b) of subsection (5) of section
821 559.955, Florida Statutes, is amended to read:
822 559.955 Home-based businesses; local government
823 restrictions.—
824 (5) The application of this section does not supersede:
825 (b) Local laws, ordinances, or regulations related to
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826 transient public lodging establishments, as defined in s.
827 509.013 s. 509.013(4)(a)1., that are not otherwise preempted
828 under chapter 509.
829 Section 16. Subsection (2) of section 705.17, Florida
830 Statutes, is amended to read:
831 705.17 Exceptions.—
832 (2) Sections 705.1015-705.106 do not apply to any personal
833 property lost or abandoned on premises located within a theme
834 park or entertainment complex, as defined in s. 509.013 s.
835 509.013(9), or operated as a zoo, a museum, or an aquarium, or
836 on the premises of a public food service establishment or a
837 public lodging establishment licensed under part I of chapter
838 509, if the owner or operator of such premises elects to comply
839 with s. 705.185.
840 Section 17. Section 705.185, Florida Statutes, is amended
841 to read:
842 705.185 Disposal of personal property lost or abandoned o n
843 the premises of certain facilities.—When any lost or abandoned
844 personal property is found on premises located within a theme
845 park or entertainment complex, as defined in s. 509.013 s.
846 509.013(9), or operated as a zoo, a museum, or an aquarium, or
847 on the premises of a public food service establishment or a
848 public lodging establishment licensed under part I of chapter
849 509, if the owner or operator of such premises elects to comply
850 with this section, any lost or abandoned property must be
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851 delivered to such owner or operator, who must take charge of the
852 property and make a record of the date such property was found.
853 If the property is not claimed by its owner within 30 days after
854 it is found, or a longer period of time as may be deemed
855 appropriate by the owner or operator of the premises, the owner
856 or operator of the premises may not sell and must dispose of the
857 property or donate it to a charitable institution that is exempt
858 from federal income tax under s. 501(c)(3) of the Internal
859 Revenue Code for sale or other disposal as the charitable
860 institution deems appropriate. The rightful owner of the
861 property may reclaim the property from the owner or operator of
862 the premises at any time before the disposal or donation of the
863 property in accordance with this section and the established
864 policies and procedures of the owner or operator of the
865 premises. A charitable institution that accepts an electronic
866 device, as defined in s. 815.03(9), access to which is not
867 secured by a password or other personal identification
868 technology, shall make a reasonable effort to delete all
869 personal data from the electronic device before its sale or
870 disposal.
871 Section 18. Section 717.1355, Florida Statutes, is amended
872 to read:
873 717.1355 Theme park and entertainment complex tickets. —
874 This chapter does not apply to any tickets for admission to a
875 theme park or entertainment complex as defined in s. 509.013 s.
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876 509.013(9), or to any tickets to a permanent exhibition or
877 recreational activity within such theme park or entertainment
878 complex.
879 Section 19. Subsection (8) of section 877.24, Florida
880 Statutes, is amended to read:
881 877.24 Nonapplication of s. 877.22.—Section 877.22 does
882 not apply to a minor who is:
883 (8) Attending an organized event held at and sponsored by
884 a theme park or entertainment complex as defined in s. 509.013
885 s. 509.013(9).
886 Section 20. The application of this act does not supersede
887 any current or future declaration or declaration of condominium
888 adopted pursuant to chapter 718, Florida Statutes, cooperative
889 document adopted pursuant to chapter 719, Florida Statutes, or
890 declaration or declaration of covenant adopted pursuant to
891 chapter 720, Florida Statutes.
892 Section 21. (1) The Department of Revenue is authorized,
893 and all conditions are deemed to be met, to adopt eme rgency
894 rules pursuant to s. 120.54(4), Florida Statutes, for the
895 purpose of implementing s. 212.03, Florida Statutes, including
896 establishing procedures to facilitate the remittance of taxes.
897 (2) Notwithstanding any other law, emergency rules adopted
898 pursuant to subsection (1) are effective for 6 months after
899 adoption and may be renewed during the pendency of procedures to
900 adopt permanent rules addressing the subject of the emergency
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901 rules.
902 (3) This section expires January 1, 2026.
903 Section 22. Except as otherwise expressly provided in this
904 act, this act shall take effect upon becoming a law.
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CS/HB 833 by Rep. Duggan
Vacation Rentals
AMENDMENT SUMMARY
April 17, 2023
Amendment 1 by Rep. Duggan (lines 472-614):
• Removes provisions authorizing local governments to impose a fine for failure to register
under a vacation rental program.
• Removes provisions authorizing local governments to deny an application for registering
a vacation rental.
• Removes provisions authorizing local governments to terminate or refuse to issue or
renew a vacation rental registration.
• Removes provisions authorizing local governments to withdraw acceptance of a
registration on the basis of an unsatisfied recorded municipal or county code lien.
• Allows local governments to restrict the maximum occupancy for residential properties
that are rented if uniformly applied without regard to whether the residential property is
used as a vacation rental.
• Increases vacation rental registration maximum fee amounts from $50 to $75 for
individual registrations and from $100 to $150 for collective registrations.
• Makes a technical correction.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 833 (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: Commerce Committee
2 Representative Duggan offered the following:
3
4 Amendment (with title amendment)
5 Remove lines 472-614 and insert:
6 rental registration program. Local governments may adopt a
7 vacation rental registration program pursuant to subparagraph 3 .
8 This paragraph does not prohibit a local law, ordinance, or
9 regulation from restricting the maximum occupancy for
10 residential properties that are rented if uniformly applied
11 without regard to whether the residential property is used as a
12 vacation rental.
13 2. Local governments may charge a fee of no more than $75
14 for processing an individual registration application or $150
15 for processing a collective registration application. A local
16 law, ordinance, or regulation may not require renewal of a
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Page 1 of 6
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 833 (2023)
Amendment No. 1
17 registration more than once per year. However, if there is a
18 change of ownership, the new owner may be required to submit a
19 new application for registration.
20 3. As a condition of registration, the local law,
21 ordinance, or regulation may only require the owner or operator
22 of a vacation rental to:
23 a. Submit identifying information about the owner or the
24 owner's agents and the subject vacation rental property.
25 b. Obtain a license as a transient public lodging
26 establishment issued by the division within 60 days after local
27 registration.
28 c. Obtain all required tax registrations, receipts, or
29 certificates issued by the Department of Revenue, a coun ty, or a
30 municipal government.
31 d. Update required information on a continuing basis to
32 ensure it is current.
33 e. Comply with parking standards and solid waste handling
34 and containment requirements, so long as such standards and
35 requirements are not imposed solely on vacation rentals.
36 f. Designate and maintain at all times a responsible party
37 who is capable of responding to complaints and other immediate
38 problems related to the vacation rental, including being
39 available by telephone at a listed phone number.
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Page 2 of 6
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 833 (2023)
Amendment No. 1
40 g. State the maximum occupancy of the vacation rental
41 based on the number of sleeping accommodations for persons
42 staying overnight in the vacation rental.
43 4.a. Within 15 business days after receiving an
44 application for registration of a vacation rental, the local
45 government must review the application for completeness and
46 accept the registration of the vacation rental or issue a
47 written notice specifying with particularity any areas that are
48 deficient. Such notice may be provided by United States mail or
49 electronically.
50 b. The vacation rental owner or operator and the local
51 government may agree to a reasonable request to extend the
52 timeframes provided in this subparagraph, particularly in the
53 event of a force majeure or other extraordinary circumstance.
54 c. If the local government fails to accept or deny the
55 registration within the timeframes provided in this
56 subparagraph, the application is deemed accepted.
57 d. Upon an accepted registration of a vacation rental, a
58 local government shall assign a unique registration number to
59 the vacation rental or other indicia of registration and provide
60 the registration number or other indicia of registration to the
61 owner or operator of the vacation rental in writing or
62 electronically.
63 (d) The regulation of advertising platforms is preempted
64 to the state as provided in this chapter.
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Page 3 of 6
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 833 (2023)
Amendment No. 1
65 Section 4. Effective January 1, 2024, subsections (2) and
66 (3) of section 509.241, Florida Statutes, are amended to read:
67 509.241 Licenses required; exceptions.—
68 (2) APPLICATION FOR LICENSE.—Each person who plans to open
69 a public lodging establishment or a public food service
70 establishment shall apply for and receive a license from the
71 division before prior to the commencement of operation. A
72 condominium association, as defined in s. 718.103, which does
73 not own any units classified as vacation rentals or timeshare
74 projects under s. 509.242(1)(c) or (g) is not required to apply
75 for or receive a public lodging establishment license. All
76 applications for a vacation rental license must, if applicable,
77 include the local registration number or other proof of
78 registration required by local law, ordinance, or regulation.
79 Upon receiving an application for a vacation rental license, the
80 division may grant a temporary license that authorizes the
81 vacation rental to begin operation while the application is
82 pending and to post the information required under s.
83 509.243(1)(c). The temporary license automatically expires upon
84 final agency action regarding the license application.
85 (3) DISPLAY OF LICENSE.—Any license issued by the division
86 must shall be conspicuously displayed to the public inside in
87 the office or lobby of the licensed establishment. Public food
88 service establishments that which offer catering services must
89 shall display their license number on all advertising for
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 833 (2023)
Amendment No. 1
90 catering services. The owner or operator of a vacation rental
91 offered for transient occupancy through an advertising platform
92 must also display the vacation rental license number and, if
93 applicable, the local registration number.
94 Section 5. Effective January 1, 2024, section 509.243,
95 Florida Statutes, is created to read:
96 509.243 Advertising platforms.—
97 (1)(a) An advertising platform must require that a person
98 who places an advertisement for the rental of a vacation rental:
99 1. Include in the advertisement the vacation rental
100 license number and, if applicable, the local registration
101 number; and
102 2. Attest to the best of the person's knowledge that the
103 license number for the vacation rental property and the local
104 registration are current, valid, and accurately stated in the
105 advertisement.
106 (b) An advertising platform must display the vacation
107 rental license number and, if applicable, the local registration
108 number. Effective July 1, 2024, the advertising platform mus t
109 check that the vacation rental license number provided by the
110 owner or operator appears as current in the information posted
111 by the division pursuant to paragraph (c) and applies to the
112 subject vacation rental before publishing the advertisement on
113 its platform and again at the end of each calendar quarter that
114 the advertisement remains on its platform.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 833 (2023)
Amendment No. 1
115 (c) By July 1, 2024, the division shall maintain vacation
116 rental license information in a readily accessible electronic
117 format that is sufficient to facilitate prompt compliance with
118 the requirements of this subsection by an advertising platform
119 or a person placing an advertisement on an advertising platform
120 for transient rental of a vacation rental.
121 (2) An advertising platform must remove from public view
122 an advertisement or a listing from its online application,
123 software, website, or system within 15 business days after being
124 notified by the division in writing that the subject
125 advertisement or listing for the rental of a vacation rental
126 located in this state fails to display a valid license number
127 issued by the division.
128 (3) If a guest uses a payment system on or through an
129 advertising platform to pay for the rental of a vacation rental
130 located in this state, the advertising platform must collect and
131 remit all taxes due under ss. 125.0104, 125.0108,
132
133 -----------------------------------------------------
134 T I T L E A M E N D M E N T
135 Remove lines 21-23 and insert:
136 programs; allowing local laws, ordinances, or regulations to
137 restrict maximum occupancy for all residential properties;
138 preempting
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Page 6 of 6
CS/HB 869
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 869 Department of Business and Professional Regulation Licensing
SPONSOR(S): State Administration & Technology Appropriations Subcommittee, McClain
TIED BILLS: IDEN./SIM. BILLS: SB 782
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform & Economic Development 12 Y, 0 N Wright Anstead
Subcommittee
2) State Administration & Technology 12 Y, 0 N, As CS Helpling Topp
Appropriations Subcommittee
3) Commerce Committee Wright Hamon
SUMMARY ANALYSIS
The Department of Business and Professional Regulation (DBPR) is responsible for licensing and regulating
various businesses and professions throughout the state, including asbestos professionals, mold-related
professionals, electrical contractors, public lodging establishments, and public food service establishments.
Related to mold-related and asbestos professional licensing regulations, the bill provides a pathway for a
person who holds a license in another state to obtain a Florida license.
Related to electrical contractors licensing regulations, the bill allows certain local electrical and alarm
contractors to be licensed statewide.
Related to pugilistic exhibitions, the bill removes the maximum participant weight differential requirement for all
exhibition matches. This will allow any exhibition to include participants who are not in the same weight
category.
Related to public lodging establishments and public food service establishments, the bill:
requires licensees to submit certain documents, fees, and communications online;
requires licensees to provide an email address for primary communication with DBPR;
allows notices to be served to the operator of a licensed establishment via email, in addition to in-
person service and by mail; and
allows the guest registry at a transient public lodging establishment to be kept online, and guests are no
longer required to sign the registry.
The bill has a positive fiscal impact on state government revenues. There is an indeterminate, but likely
minimal negative fiscal impact on local governments and a positive fiscal impact on the private sector. See
Fiscal Analysis & Economic Impact Statement.
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:
Department of Business and Professional Regulation
The Florida Department of Business and Professional Regulation (DBPR) regulates and licenses
various businesses and professionals in Florida through the following divisions:
• The Division of Administration,
• The Division of Alcoholic Beverages and Tobacco,
• The Division of Certified Public Accounting,
• The Division of Drugs, Devices, and Cosmetics,
• The Division of Florida Condominiums, Timeshares, and Mobile Homes,
• The Division of Hotels and Restaurants,
• The Division of Pari-mutuel Wagering,
• The Division of Professions,
• The Division of Real Estate,
• The Division of Regulation,
• The Division of Technology, and
• The Division of Service Operations.1
The Division of Professions licenses and regulates various professions through 12 professional boards,
five programs, and one council, including the: 2
• Asbestos Licensing Unit,
• Electrical Contractors’ Licensing Board (ECLB), and
• Mold-Related Services Program.
The Division of Regulation is the enforcement authority for Labor Organizations and Business Agents,
the Florida Athletic Commission (FAC), Farm Labor Program, Child Labor Program, and any
professional boards and programs housed within the Division of Professions. 3
The Division of Hotels and Restaurants (H&R) licenses, inspects, and regulates public lodging and food
service establishments in Florida.4
Mold-Related Services
Background
Mold assessors and mold remediators are regulated by ch. 468, part XVI, F.S., and licensed by the
Mold-Related Services Licensing Program 5 in DBPR.
“Mold assessment” means a process performed by a mold assessor that includes the physical sampling
and detailed evaluation of data obtained from a building history and inspection to formulate an initial
hypothesis about the origin, identity, location, and extent of amplification of mold growth of greater than
ten square feet.6
1 S. 20.165, F.S.
2 Florida Department of Business and Professional Regulation, Division of Professions, http://www.myfloridalicense.com/DBPR/division-
of-professions/ (last visited Feb. 24, 2023).
3 Except the Board of Architecture and Interior Design, and the Florida Board of Profess ional Engineers. Florida Department of
Business and Professional Regulation, Division of Regulation, http://www.myfloridalicense.com/DBPR/division-of-regulation/ (last
visited Feb. 24, 2023).
4 Florida Department of Business and Professional Regulation, Division of Hotels and Restaurants,
http://www.myfloridalicense.com/DBPR/hotels-restaurants/ (last visited Feb. 24, 2023).
5 S. 468.84, F.S.
6 S. 468.8411(3), F.S.
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“Mold remediation” means the removal, cleaning, sanitizing, demolition, or other treatment, including
preventive activities, of mold or mold-contaminated matter of greater than ten square feet that was not
purposely grown at that location; however, it may not include work that requires a contractor license
under ch. 489, F.S.7
In order to be licensed as a mold assessor or mold remediator, an applicant must:
be of good moral character,
pass the required DBPR-approved examination offered by a nationally recognized organization
that certifies persons in the specialty of mold assessment or mold remediation,
have required liability insurance, and
complete either:
o at least a two-year associate of arts degree with certain course requirements and a
minimum of one year of experience; or
o a high school diploma or the equivalent with a minimum of four years of experience.8
A person who is licensed in another state is eligible for a license by endorsement in Florida if they:9
are of good moral character;
hold required general liability insurance;
hold a valid license to practice as a mold assessor or mold remediator in another state or
territory of the United States whose educational requirements are substantially equivalent to
Florida; and
have passed a national, regional, state, or territorial licensing examination that is substantially
equivalent to the required Florida examination.
Applicants for a mold-related license pay an initial licensure fee of $230. There are currently 3,252
licensed mold assessors and 3,208 licensed mold remediators in the state. In the most recent fiscal
year, there were 25 applicants for a license by endorsement. 10
Effect of the Bill
The bill allows applicants who hold a mold-related license in another state to obtain a license by
endorsement in Florida, if they have held a valid license to practice in another state or territory of the
United States for at least ten years before the date of application, without needing to take a Florida-
specific examination or training.
Such applications for a Florida license by endorsement must be made either when the applicant’s
license in another state or territory is active or within two years of when such license was last active.
The bill clarifies the provision relating to licensure examination requirements.
Asbestos Consultants and Contractors
Background
Asbestos consultants and contractors are regulated by ch. 469, F.S., and licensed by the Asbestos
Licensing Unit in DBPR. Florida licensing standards must also comply with the U.S. Environmental
Protection Agency’s Asbestos Model Accreditation Plan for States (MAP), which includes mandatory
nationwide standards for testing and education.11
“Asbestos abatement” means the removal, encapsulation, enclosure, or disposal of asbestos. 12
7 S. 468.8411(5), F.S.
8 S. 468.8413(2), F.S.
9 S. 468.8414(3), (4), F.S.
10 Email from Jonas Marquez, Legislative Affairs Director, Department of Business and Professional Regulation, RE: HB 869 (Feb. 28,
2023).
11 40 C.F.R. § 763 Appendix C to Subpart E.
12 S. 469.001(1), F.S.
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An asbestos consultant may:
• conduct an asbestos survey,
• develop an operation and maintenance plan,
• monitor and evaluate asbestos abatement, and
• prepare asbestos abatement specifications.13
An asbestos contractor may perform the work of an asbestos consultant and conduct asbestos
abatement work.14
In order to be eligible to be licensed as an asbestos consultant or contractor, an applicant must meet
one of the following criteria:15
hold a current, valid, active license as an architect issued under ch. 481, F.S.;
hold a current, valid, active license as a professional engineer issued under ch. 471, F.S.,
hold a current, valid, active license as a professional geologist under ch. 492, F.S.;
be a diplomat of the American Board of Industrial Hygiene; or
have been awarded designation as a Certified Safety Professional by the Board of Certified
Safety Professionals.
An applicant for licensure as either an asbestos consultant or contractor also must:16
if applying for an asbestos consultant license, complete DBPR-approved courses in the
following topics:
o building asbestos surveys and mechanical systems,
o asbestos management planning,
o respiratory protection, and
o project designer.
if applying for an asbestos contractor license, complete courses in the following topics:
o asbestos contractor/supervisor, and
o respiratory protection.
provide evidence of satisfactory work on ten asbestos projects within the last five years,
provide evidence of financial stability, and
pass the DBPR-approved examination.
There is no provision which specifically allows or addresses licenses by endorsement for asbestos
licensees of other states.
Applicants for an asbestos license pay an initial licensure fee of $555, and an examination fee of $316.
There are currently 136 licensed asbestos contractors and 111 licensed asbestos consultants in the
state. DBPR has received an average of 33 asbestos applications per year over the last three fiscal
years. In the most recent fiscal year, there were 57 applicants for an asbestos professional license.17
Effect of the Bill
The bill allows applicants who hold an asbestos license in another state license to obtain a license by
endorsement in Florida if they have:
passed a written examination in any state that meets the requirements of MAP,
held a license as an asbestos consultant or asbestos contractor issued by another state or
territory of the United States for at least ten years,
13 S. 469.003, F.S.
14 S. 469.003(3), F.S.
15 S. 469.004(1), F.S.
16 S. 469.005, F.S.
17 DBPR, supra note 10.
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demonstrated financial stability, and
completed the required DBPR-approved courses.
Such applicants must apply while they hold an active license in another state or territory or within 2
years after such license was last active.
Electrical Contractors
Background
Statewide electrical, alarm system, and specialty contractors are regulated by of ch. 489, part II, F.S.,
and licensed and regulated by the ECLB within DBPR.18 An electrical contractor engages in business
as a contractor or performs electrical or alarm work for compensation.19
Electrical contractors may work on electrical wiring, fixtures, appliances, apparatus, raceways, and
conduits which generate, transmit, transform, or utilize electrical energy in any form. The scope of an
electrical contractor’s license includes alarm system work.20
Alarm system contractors may lay out, fabricate, install, maintain, alter, repair, monitor, inspect,
replace, or service burglary, fire, robbery, or medical emergency alarm systems.21
In order to become a certified electrical, alarm system, or specialty contractor, an applicant must:22
be at least 18 years of age;
be of good moral character;
pass the certification examination;
have workers’ compensation insurance or an exemption, and public liability and property
damage insurance; and
meet certain training and education criteria.
A registered contractor is an individual that has taken and passed a local competency examination and
can practice the specific category of contracting for which they are approved, only in the local
jurisdiction for which the license is issued.23 Locally registered contractors that are required to hold a
contracting license to practice their profession in accordance with state law must register with DBPR
after obtaining a local license.24
Section 489.514, F.S., created a pathway that allowed registered local electrical and alarm contractors
who met certain criteria to have their local registration converted into a certified statewide license by the
ECLB. The provision required applicants to apply by November 1, 2021, and is thus is no longer
available for use by local registered contractors. This provision is commonly referred to as the
“grandfathering provision.”
Any registered contractor wishing to have their license “grandfathered” into a certified license had to
submit a completed application to the ECLB, pay an appropriate fee, and show evidence of the
following criteria:
currently holds a valid registered local license in the certification of electrical contractor, alarm
system contractor, or electrical specialty contractor sought;
has, for the certification category sought, passed a written, proctored examination that the
ECLB finds to be substantially similar to the examination required to be licensed as a certified
contractor;
18 S. 489.507, F.S.
19 S. 489.505(9), F.S.
20 Ss. 489.505(12) & 489.537(7), F.S.
21 S. 489.505(1)-(2), F.S.
22 S. 489.511(1) & (4), F.S.
23 S. 489.505(21)-(23), F.S.
24 S. 489.513, F.S.
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has at least five years of experience as a contractor in the certification category sought, or as
an inspector or building administrator with oversight over that category. For contractors, only
time periods in which the contractor license is active and the contractor is not on probation
shall count toward the required five years;
has not had the contractor’s license revoked at any time, suspended in the last five years, or
assessed a fine in excess of $500 in the last five years; and
has the required workers’ compensation insurance or an exemption, and public liability and
property damage insurance.25
DBPR received 766 applications from local electrical and alarm contractors for a statewide license
during the last period of grandfathering, from July 1, 2019, through November 1, 2021. 26
Effect of the Bill
The bill reopens the grandfathering provision for locally registered electrical, alarm system, and
specialty contractors to obtain licensure as statewide certified contractors without an expiration date.
Pugilistic Exhibitions
Background
Chapter 548, F.S., governs the FAC under DBPR. The function of the FAC is to license and regulate
pugilistic events and matches, including professional boxing, kickboxing, and mixed martial arts. The
FAC ensures that all matches are conducted in accordance with provisions of state laws and rules.
A match participant, manager, trainer, second, timekeeper, referee, judge, announcer, physician, 27
matchmaker, or promoter must be licensed by the FAC before directly or indirectly acting in such
capacity in connection with any match. In order to obtain a license, an applicant must:28
complete an application in a form prescribed by the FAC;
be at least 18 years of age; and
pay an application fee.
An “exhibition” is a boxing, kickboxing, or mixed martial arts engagement in which persons participating
show or display their skill without necessarily striving to win using strikes and blows to the head or other
full-contact maneuvers.29 Participants in an exhibition, except one held solely for training purposes,
must weigh within 12 pounds of each other.30
Effect of the Bill
The bill removes the maximum participant weight differential requirement for all exhibition matches.
This will allow any exhibition to include participants that weigh more or less than 12 pounds from their
opponent.
Hotels and Restaurants
“Public lodging establishment” includes:31
25 S. 489.514, F.S.
26 DBPR, supra note 10.
27 A physician must be licensed pursuant to chapter 458 or chapter 459, must m aintain a license in good standing, and must
demonstrate satisfactory medical training or experience in boxing. S. 548.017, F.S.
28 S. 548.021, F.S.
29 S. 548.002(8), F.S.
30 S. 548.043(2), F.S.
31 S. 509.013(4), F.S.
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“Transient public lodging establishments,” which means any unit, group of units, dwelling,
building, or group of buildings within a single complex of buildings which is rented to guests
more than three times in a calendar year for periods of less than 30 days, or 1 calendar month,
whichever is less, or which is advertised or held out to the public as a place regularly rented to
guests; and
“Nontransient public lodging establishments,” which means any unit, group of units, dwelling,
building, or group of buildings within a single complex of buildings which is rented to guests for
periods of at least 30 days or 1 calendar month, whichever is less, or which is advertised or held
out to the public as a place regularly rented to guests for periods of at least 30 days or 1
calendar month.
Classifications of public lodging establishments include hotels, motels, vacation rentals, apartments,
bed and breakfast inns, and timeshare projects.32
“Public food service establishments” means any building, vehicle, place, or structure, or any room or
division thereof, where food is prepared, served, or sold for immediate consumption on or in the vicinity
of the premises; called for or taken out by customers; or prepared prior to being delivered to another
location for consumption, with certain exceptions. 33
Classifications of public food service establishments include permanent food service restaurants,
catering services, mobile food dispensing vehicles, vending machines, theme park carts, culinary
education programs, and temporary food service events. 34
Electronic Communications - Background
While H&R has rulemaking authority to adopt rules to implement ch. 509, F.S., H&R does not have
authority to adopt rules to require electronic submissions for any required document or fee from a
licensee or for H&R to require online communications with a licensee. 35 There is also no statutory
requirement that such documents, fees, or communications be transmitted online or for licensees to
provide an email address to H&R.36
Notices that are served by H&R must be delivered to the operator of a licensed establishment by an
H&R agent or by registered mail. If H&R is unable to effect service, the notice may be conspicuously
posted at the licensee’s establishment.37 Inspection reports may be served via electronic means.
Each transient public lodging establishment is required to maintain a register of guests who occupy
rental units in the establishment. The guests must also sign the registry. There is not a specific
allowance that the registry may be kept in an electronic format.
Electronic Communications – Effect of the Bill
The bill requires all H&R licensees to provide an email address to function as the primary method of
communication with H&R.
The bill allows H&R to serve notices or inspection reports to the operator of licensed establishments via
email, in addition to in-person service and mail.
The bill requires each public lodging establishment or a public food service establishment, and any
person who plans to open a licensed establishment, to create and maintain an online account and
provide an e-mail address to function as the primary contact for all communication from H&R. Licensed
establishments are responsible for maintaining accurate contact information on file.
32 S. 509.242, F.S.
33 S. 509.013(5), F.S.
34 R. 61C-1.002, F.A.C.; Florida Department of Business and Professional Regulation, Hotels and Restaurants – Licensing Guides,
http://www.myfloridalicense.com/DBPR/hotels-restaurants/licensing/licensing-guides/ (last visited Feb. 24, 2023).
35 S. 509.032, F.S.
36 S. 509.091, F.S.
37 S. 509.091(1), F.S.
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Each vacation rental or timeshare project must submit any change in the street or unit address or
number of houses or units included under the license within 30 days of the change. All changes must
be filed through the H&R's online system
The bill allows the guest registry at a transient public lodging establishment to be kept online, and will
no longer require guests to sign the registry.
The bill clarifies that all fees be must be paid by the applicant when the license application is submitted
to H&R.
The bill provides an effective date of July 1, 2023.
B. SECTION DIRECTORY:
Section 1: Amends s. 468.8414, F.S., revising licensure requirements for mold assessors and
remediators.
Section 2: Amends s. 469.004, F.S., revising licensure requirements for asbestos consultants and
contractors.
Section 3: Amends s. 489.514, F.S., removing a deadline for an electrical contractor licensing
provision.
Section 4: Amends s. 509.091, F.S, revising requirements for hotel and restaurant inspection
reports.
Section 5: Amends s. 509.101, F.S., revising requirements for hotel guest registries.
Section 6: Amends s. 509.241, F.S., requiring certain persons, licensees, and licenses agents to
create and maintain a division online account.
Section 7: Amends s. 548.043, F.S., revising participant weight differentials for certain pugilistic
exhibitions.
Section 8: Provides an effective date.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
DBPR expects the following fiscal impacts on revenues:38
Division of Professions
Indeterminate; An increase of up to $399,056 in revenue from the grandfathering fee over the next
three years (see Fiscal Comments).
2. Expenditures:
DBPR does not anticipate a change in state expenditures as a result of the bill.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
Local governments could see an insignificant decrease in revenues associated with renewal and
reciprocity fees if eligible registered contractors choose to apply for the grandfathering provision
created in the bill for ECLB licensees.
2. Expenditures:
38 Department of Business and Professional Regulation (DBPR), Agency Analysis of 2023 Senate Bill 782, p. 6 (Mar. 2,
2023)
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DATE: 4/15/2023
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
There may be a positive impact on the private sector by expanding the geographical scope of practice
for those registered electrical contractors who choose to take advantage of the grandfathering
provision. It would also allow more electrical contractors to work across the state.
D. FISCAL COMMENTS:
Revenue from additional licenses issues in accordance with the electrical contractor grandfathering
provision is indeterminate because it is unknown how many eligible registered ECLB licensees will
apply.39 The total fee (application fee, initial licensing fee, and unlicensed activity fee) for licenses
previously issued under a grandfathering provision was $196. There are 2,036 Registered Current
Active/Inactive ECLB licensees who may be able to take advantage of the grandfathering provision.
However, the department received only 766 applications during the last period of grandfathering, which
was from July 1, 2019 to November 1, 2021.
Assuming total application/license fees of $196, the grandfathering fees received by DBPR over the
next three fiscal years could range from $150,136.00 (if the department receives the same number of
applications as the last grandfathering period) to a maximum of $399,056.00 if all 2,036 Registered
Current Active/Inactive licensees apply over the next three fiscal years. 40
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to require counties or municipalities to spend funds or take
action requiring the expenditure of funds; reduce the authority that counties or municipalities have
to raise revenues in the aggregate; or reduce the percentage of state tax shared with counties or
municipalities.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill will require DBPR to amend rules related to:
Mold-related professional licensing standards,
Asbestos professional licensing standards,
Pugilistic exhibition requirements,
Licensed establishment electronic communications, and
Licensed establishment license issuance and renewal.
DBPR has current authority to do so.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
39 Id. at 10.
40 Id.
STORAGE NAME: h0869d.COM PAGE: 9
DATE: 4/15/2023
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On March 29, 2023, the State Administration & Technology Appropriations Subcommittee adopted one
amendment and reported the bill favorably as a committee substitute. The committee substitute
removed all modifications to hotels and restaurants licensing including modified schedules and
maximum fees.
This analysis is drafted to the committee substitute as passed by the State Administration &
Technology Appropriations Subcommittee.
STORAGE NAME: h0869d.COM PAGE: 10
DATE: 4/15/2023
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
CS/HB 869 2023
1 A bill to be entitled
2 An act relating to the Department of Business and
3 Professional Regulation; amending s. 468.8414, F.S.;
4 requiring the department to certify for licensure
5 qualified individuals who practice mold assessment or
6 mold remediation and hold certain licenses issued by
7 other states or territories; amending s. 469.004,
8 F.S.; revising requirements for the issuance of an
9 asbestos consultant's license; requiring the
10 department to certify for licensure by endorsement
11 asbestos consultants and asbestos contractors who meet
12 certain exam and other state licensure requirements;
13 requiring asbestos consultants and asbestos
14 contractors to complete certain courses; amending s.
15 489.514, F.S.; removing a time limitation for applying
16 for certain contracting licenses under certain
17 provisions; amending s. 509.091, F.S.; requiring
18 licensees and licensed agents to provide the
19 department's Division of Hotels and Restaurants with
20 e-mail addresses at which they can be contacted;
21 authorizing the division to deliver notices and
22 inspection reports by e-mail; amending s. 509.101,
23 F.S.; revising the guest register maintenance
24 requirements that an operator of a transient
25 establishment must meet; amending s. 509.241, F.S.;
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26 requiring certain persons, licensees, and licensed
27 agents to create and maintain a division online
28 account and provide the division with specified
29 information; amending s. 548.043, F.S.; deleting a
30 requirement limiting the types of boxing exhibitions
31 which require a specified maximum difference in
32 participant weights; providing an effective date.
33
34 Be It Enacted by the Legislature of the State of Florida:
35
36 Section 1. Subsection (3) of section 468.8414, Florida
37 Statutes, is amended to read:
38 468.8414 Licensure.—
39 (3) The department shall certify as qualified for a
40 license by endorsement an applicant who is of good moral
41 character, who has the insurance coverage required under s.
42 468.8421, and who meets at least one of the following
43 requirements:
44 (a) Is qualified to take the examination as set forth in
45 s. 468.8413 and has passed a certification examination offered
46 by a nationally recognized organization that certifies persons
47 in the specialty of mold assessment or mold remediation and that
48 has been approved by the department as substantially equivalent
49 to the requirements of this part and s. 455.217.; or
50 (b) Holds a valid license to practice mold assessment or
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51 mold remediation issued by another state or territory of the
52 United States if the criteria for issuance of the license were
53 substantially the same as the licensure criteria that is
54 established by this part as determined by the department.
55 (c) Has held a valid license to practice mold assessment
56 or mold remediation issued by another state or territory of the
57 United States for at least 10 years before the date of
58 application. The application for licensure must be made either
59 when the license in the other state or territory is active or
60 within 2 years after such license was last active.
61 Section 2. Present subsection (3) of section 469.004,
62 Florida Statutes, is redesignated as subsection (4), a new
63 subsection (3) is added to that section, and subsection (1) of
64 that section is amended, to read:
65 469.004 License; asbestos consultant; asbestos
66 contractor.—
67 (1) All asbestos consultants must be licensed by the
68 department. Except for an asbestos consultant's license issued
69 by endorsement as provided under subsection (3) or otherwise
70 expressly provided by law, an asbestos consultant's license may
71 be issued only to an applicant who holds a current, valid,
72 active license as an architect issued under chapter 481; holds a
73 current, valid, active license as a professional engineer issued
74 under chapter 471; holds a current, valid, active license as a
75 professional geologist issued under chapter 492; is a diplomat
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76 of the American Board of Industrial Hygiene; or has been awarded
77 designation as a Certified Safety Professional by the Board of
78 Certified Safety Professionals.
79 (3) The department shall certify as qualified for
80 licensure by endorsement any individual applying for licensure
81 who has passed a written examination that meets the requirements
82 of the United States Environmental Protection Agency Asbestos
83 Model Accreditation Plan, has held a valid license to practice
84 as an asbestos consultant or asbestos contractor issued by
85 another state or territory of the United States for at least 10
86 years before the date of application, and is applying for the
87 same or similar license in this state, subject to ss. 469.005(5)
88 and 469.006. The application for licensure must be made either
89 when the license in the other state or territory is active or
90 within 2 years after such license was last active. To qualify
91 for licensure by endorsement, an asbestos consultant must
92 complete the courses required by s. 469.005(2) and an asbestos
93 contractor must complete the courses required by s. 469.005(3).
94 Section 3. Subsection (3) of section 489.514, Florida
95 Statutes, is amended to read:
96 489.514 Certification for registered contractors;
97 grandfathering provisions.—
98 (3) An applicant must make application by November 1,
99 2021, to be licensed pursuant to this section.
100 Section 4. Section 509.091, Florida Statutes, is amended
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101 to read:
102 509.091 Notices; form and service.—
103 (1) All licensees and licensed agents must provide an e -
104 mail address to the division to function as the primary method
105 of contact for all communication with the division.
106 (2) Each notice or inspection report served by the
107 division pursuant to this chapter must be in writing and must be
108 delivered personally by an agent of the division, sent by e-
109 mail, or mailed by registered letter to the operator of the
110 public lodging establishment or public food service
111 establishment. If the operator refuses to accept service or
112 evades service or the agent is otherwise unable to effect
113 service after due diligence, the division may post such notice
114 or inspection report in a conspicuous place at the
115 establishment.
116 (2) Notwithstanding subsection (1), the division may
117 deliver lodging inspection reports and food service inspection
118 reports to the operator of the public lodging establishment or
119 public food service establishment by electronic means.
120 Section 5. Subsection (2) of section 509.101, Florida
121 Statutes, is amended to read:
122 509.101 Establishment rules; posting of notice; food
123 service inspection report; maintenance of guest register; mobile
124 food dispensing vehicle registry.—
125 (2) It is the duty of each operator of a transient
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126 establishment to maintain at all times a register of, signed by
127 or for guests who occupy rental units within the establishment,
128 showing the dates upon which the rental units were occupied by
129 such guests and the rates charged for their occupancy. Each
130 operator shall maintain this register shall be maintained in
131 chronological order, shall make the register and available for
132 inspection by the division at any time, and may keep the
133 register in an electronic format. Operators need not make
134 available registers that which are more than 2 years old.
135 Section 6. Subsection (4) is added to section 509.241,
136 Florida Statutes to read:
137 509.241 Licenses required; exceptions.—
138 (4) ONLINE ACCOUNT AND TRANSACTIONS.—Each person who plans
139 to open a public lodging establishment or a public food service
140 establishment and each licensee or licensed agent must create
141 and maintain a division online account and provide an e-mail
142 address to the division to function as the primary contact for
143 all communication from the division.
144 (a) Licensees and licensed agents are responsible for
145 maintaining accurate contact information on file with the
146 division.
147 (b) Each licensee issued a license or licensed agent
148 managing a license classified as a vacation rental or timeshare
149 project, as those terms are defined in s. 509.242(1)(c) and (g),
150 respectively, must submit any change in the street or unit
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151 address or number of houses or units included under the license
152 within 30 days after the change. All changes must be filed with
153 the division through the division's online system.
154 Section 7. Subsection (2) of section 548.043, Florida
155 Statutes, is amended to read:
156 548.043 Weights and classes, limitations; gloves.—
157 (2) The commission shall establish by rule the acceptable
158 difference in weight between participants; however, the maximum
159 difference in weight in boxing matches shall not exceed 12
160 pounds, except matches in the cruiserweight and heavyweight
161 classes and exhibitions held solely for training purposes.
162 Section 8. This act shall take effect July 1, 2023.
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COMMERCE COMMITTEE
CS/HB 869 by Rep. McClain
Department of Business and Professional Regulation
AMENDMENT SUMMARY
April 17, 2023
Amendment 1 by Rep. McClain (line 153):
• Requires the Division of Hotels and Restaurants to adopt rules relating to online account
requirements for licensees.
• Requires such rules to specify circumstances when a person who plans to open a public
lodging establishment or a public food service establishment may opt out of the
requirement to create and maintain an online account.
Amendment 2 by Rep. McClain (line 161):
• Allows the Florida Building Commission (commission) to delay the effective date of the
energy provisions of the Florida Building Code (Building Code) for up to 3 months if
energy code compliance software is not approved by the commission at least 3 months
before the effective date of the updated Building Code.
Amendment 3 by Rep. McClain (line 161):
• Allows package stores to sell nicotine products.
Amendment 4 by Rep. McClain (line 161):
• Eliminates certain requirements for the offering of incidental benefits in the sale of a
timeshare plan.
• Allows a timeshare purchaser to assign incidental benefits without the approval of the
provider.
• Removes the requirement that an acknowledgement and disclosure statement indicate
the source of the services, points, or other products that constitute the incidental benefit.
• Removes the requirement that the developer promptly notify the Division of
Condominiums, Timeshares, and Mobile Homes upon learning of the unavailability of
any incidental benefit.
• Extends the period for voiding a contract for which the closing unlawfully occurred before
the cancellation period’s expiration from one year to five years.
• Allows the description of each component site in each filed public offering statement for
a multisite timeshare plan to be provided to the purchaser electronically.
• Provides that a developer is not required to file a separate public offering statement for
any component site located within or outside Florida in order to include the component
site in the multistate timeshare plan.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 869 (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: Commerce Committee
2 Representative McClain offered the following:
3
4 Amendment (with title amendment)
5 Between lines 153 and 154, insert:
6 (c) The division shall adopt rules to implement this
7 subsection. The rules must specify circumstances under which a
8 person who plans to open a public lodging establishment or a
9 public food service establishment and each licensee or licensed
10 agent may opt out of the requirement to create and maintain a
11 division online account.
12
13 -----------------------------------------------------
14 T I T L E A M E N D M E N T
15 Remove line 29 and insert:
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 869 (2023)
Amendment No. 1
16 information; requiring the division to adopt rules;
17 providing requirements for such rules; amending s.
18 548.043, F.S.; deleting a
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 869 (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: Commerce Committee
2 Representative McClain offered the following:
3
4 Amendment (with title amendment)
5 Between lines 161 and 162, insert:
6 Section 8. Paragraph (e) of subsection (7) of section
7 553.73, Florida Statutes, is amended to read:
8 553.73 Florida Building Code.—
9 (7)
10 (e) A rule updating the Florida Building Code in
11 accordance with this subsection shall take effect n o sooner than
12 6 months after publication of the updated code. Any amendment to
13 the Florida Building Code which is adopted upon a finding by the
14 commission that the amendment is necessary to protect the public
15 from immediate threat of harm takes effect immediately. If
16 energy code compliance software is not approved by the
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 869 (2023)
Amendment No. 2
17 commission at least 3 months before the effective date of the
18 updated Florida Building Code, the commission may delay the
19 effective date of the energy provisions of the Florida Building
20 Code for up to 3 additional months.
21
22 -----------------------------------------------------
23 T I T L E A M E N D M E N T
24 Remove line 32 and insert:
25 participant weights; amending s. 553.73, F.S.; authorizing the
26 Florida Building Commission to delay the effective date of the
27 energy provisions of the Florida Energy Code for a specified
28 timeframe under certain circumstances; providing an effective
29 date.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 869 (2023)
Amendment No. 3
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative McClain offered the following:
3
4 Amendment (with title amendment)
5 Between lines 161 and 162, insert:
6 Section 8. Subsection (1) of section 565.04, Florida
7 Statutes, is amended to read:
8 565.04 Package store restrictions.—
9 (1) Vendors licensed under s. 565.02(1)(a) shall not in
10 said place of business sell, offer, or expose for sale any
11 merchandise other than such beverages, and such places of
12 business shall be devoted exclusively to such sales; provided,
13 however, that such vendors shall be permitted to sell bitters,
14 grenadine, nonalcoholic mixer-type beverages (not to include
15 fruit juices produced outside this state), fruit juices produced
16 in this state, home bar, and party supplies and equipment
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 869 (2023)
Amendment No. 3
17 (including but not limited to glassware and party-type foods),
18 miniatures of no alcoholic content, nicotine products, and
19 tobacco products. Such places of business shall have no openings
20 permitting direct access to any other building or room, except
21 to a private office or storage room of the place of business
22 from which patrons are excluded.
23
24
25 -----------------------------------------------------
26 T I T L E A M E N D M E N T
27 Remove line 32 and insert:
28 participant weights; amending s. 565.04, F.S.; allowing package
29 stores to sell nicotine products; providing an effective date.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 869 (2023)
Amendment No. 4
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Commerce Committee
2 Representative McClain offered the following:
3
4 Amendment (with title amendment)
5 Between lines 161 and 162, insert:
6 Section 8. Section 721.075, Florida Statutes, is amended
7 to read:
8 721.075 Incidental benefits.—Incidental benefits shall be
9 offered only as provided in this section.
10 (1) Accommodations, facilities, products, services,
11 discounts, or other benefits which satisfy the requirements of
12 this subsection are shall be subject to the provisions of this
13 section and exempt from the other provisions of this chapter
14 which would otherwise apply to such accommodations or facilities
15 if and only if:
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Bill No. CS/HB 869 (2023)
Amendment No. 4
16 (a) The use of or participation in the incidental benefit
17 by the prospective purchaser is completely voluntary, and
18 payment of any fee or other cost associated with the incidental
19 benefit is required only upon such use or participation.
20 (b) The No costs of acquisition, operation, maintenance,
21 or repair of the incidental benefit may not be are passed on to
22 purchasers of the timeshare plan as common expenses of the
23 timeshare plan or as common expenses of a component site of a
24 multisite timeshare plan.
25 (c) The continued availability of the incidental benefit
26 is not necessary in order for any accommodation or facility of
27 the timeshare plan to be available for use by purchasers of the
28 timeshare plan in a manner consistent in all material respects
29 with the manner portrayed by any promotional material,
30 advertising, or purchaser public offering statement.
31 (d) The continued availability to purchasers of timeshare
32 plan accommodations on no greater than a one-to-one use right to
33 use night requirement ratio is not dependent upon continued
34 availability of the incidental benefit.
35 (e) The incidental benefit will continue to be available
36 in the manner represented to prospective purchasers for up to 3
37 years or less after the first date that the timeshare plan is
38 available for use by the purchaser. Nothing herein prevents
39 shall prevent the renewal or extension of the availability of an
40 incidental benefit.
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Bill No. CS/HB 869 (2023)
Amendment No. 4
41 (f) The aggregate represented value of all incidental
42 benefits offered by a developer to a purchaser may not exceed 15
43 percent of the purchase price paid by the purchaser for his or
44 her timeshare interest.
45 (f)(g) The incidental benefit is filed with the division
46 for review in conjunction with the filing of a timeshare plan or
47 in connection with a previously filed timeshare plan.
48 (2) Each purchaser shall execute a separate acknowledgment
49 and disclosure statement with respect to all incidental
50 benefits, which statement must shall include the following
51 information:
52 (a) A fair description of the incidental benefit,
53 including, but not limited to, any user fees or costs associated
54 therewith and any restrictions upon use or availability.
55 (b) A statement that use of or participation in the
56 incidental benefit by the prospective purchaser is completely
57 voluntary, and that payment of any fee or other cost associated
58 with the incidental benefit is required only upon such use or
59 participation.
60 (c) A statement that the incidental benefit is not
61 assignable or otherwise transferable by the prospective
62 purchaser or purchaser without the approval of the provider of
63 the incidental benefit.
64 (d) The following disclosure in conspicuous type
65 immediately above the space for the purchaser's signature:
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Bill No. CS/HB 869 (2023)
Amendment No. 4
66
67 The incidental benefit[s] described in this statement is
68 [are] offered to prospective purchasers of the timeshare plan
69 [or other permitted reference under pursuant to s.
70 721.11(5)(a)]. This [These] benefit[s] is [are] available for
71 your use for [some period up to 3 years or less] after the first
72 date that the timeshare plan is available for your use. The
73 availability of the incidental benefit[s] may or may not be
74 renewed or extended. You should not purchase an interest in the
75 timeshare plan in reliance upon the continued availability or
76 renewal or extension of this [these] benefit[s].
77 (e) A statement indicating the source of the services,
78 points, or other products that constitute the incidental
79 benefit.
80
81 The acknowledgment and disclosure statement for any incidental
82 benefit shall be filed with the division before prior to use.
83 Each purchaser must shall receive a copy of his or her executed
84 acknowledgment and disclosure statement as a document required
85 to be provided to him or her under pursuant to s. 721.10(1)(b).
86 (3)(a) In the event that an incidental benefit becomes
87 unavailable to purchasers in the manner represented by the
88 developer in the acknowledgment and disclosure statement, the
89 developer shall pay the purchaser the greater of twice the
90 verifiable retail value or twice the represented value of the
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Bill No. CS/HB 869 (2023)
Amendment No. 4
91 unavailable incidental benefit in cash within 30 days after of
92 the date that the unavailability of the incidental benefit was
93 made known to the developer, unless the developer has reserved a
94 substitution right under pursuant to paragraph (b) and timely
95 makes the substitution as required by paragraph (b). The
96 developer shall promptly notify the division upon learning of
97 the unavailability of any incidental benefit.
98 (b) If an incidental benefit becomes unavailable as a
99 result of events beyond the control of the developer, the
100 developer may reserve the right to substitute a replacement
101 incidental benefit of a type, quality, value, and term
102 reasonably similar to the unavailable incidental benefit. If the
103 developer reserves the right to substitute, the acknowledgment
104 and disclosure statement required under pursuant to paragraph
105 (2)(a) must shall contain the following conspicuous disclosure:
106
107 In the event any incidental benefit described in this
108 statement becomes unavailable as a result of events beyond the
109 control of the developer, the developer reserves the right to
110 substitute a replacement incidental benefit of a type, quality,
111 value, and term reasonably similar to the unavailable incidental
112 benefit.
113
114 The substituted incidental benefit must shall be made available
115 delivered to the purchaser within 30 days after the date that
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Bill No. CS/HB 869 (2023)
Amendment No. 4
116 the unavailability of the incidental benefit was made known to
117 the developer.
118 (4) All purchaser remedies under pursuant to s. 721.21 are
119 shall be available for any violation of the provisions of this
120 section.
121 Section 9. Subsections (2) and (3) of section 721.10,
122 Florida Statutes, are renumbered as subsections (3) and (4),
123 respectively, subsection (1) is amended, and a new subsection
124 (2) is added to that section, to read:
125 721.10 Cancellation.—
126 (1) A purchaser has the right to cancel the contract until
127 midnight on of the 10th calendar day after the later of
128 following whichever of the following days occurs later:
129 (a) The execution date of the contract; or
130 (b) The day on which the purchaser received the last of
131 all documents required to be provided to him or her, including
132 the notice required by s. 721.07(2)(d)2., if applicable.
133 (2) This right of cancellation may not be waived by any
134 purchaser or by any other person on behalf of the purchaser, and
135 any attempt to obtain a waiver of the cancellation right of the
136 purchaser is unlawful. If a purchaser waives, knowingly or
137 unknowingly, his or her right of cancellation and a closing
138 occurs, such closing is voidable at the option of the purchaser
139 for up to 1 year after the date that would have been the
140 expiration of the cancellation period under subsection (1).
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Bill No. CS/HB 869 (2023)
Amendment No. 4
141 Furthermore, a no closing may not occur until the cancellation
142 period of the timeshare purchaser has expired, and if a closing
143 occurs before the expiration of the cancellation period,. Any
144 attempt to obtain a waiver of the cancellation right of the
145 timeshare purchaser, or to hold a closing prior to the
146 expiration of the cancellation period, is unlawful and such
147 closing is voidable at the option of the purchaser for up to 5
148 years after such closing a period of 1 year after the expiration
149 of the cancellation period. However, nothing in this section
150 precludes the execution of documents in advance of closing for
151 delivery after expiration of the cancellation period.
152 Section 10. Paragraphs (b) and (e) of subsection (6) of
153 section 721.11, Florida Statutes, are amended to read:
154 721.11 Advertising materials; oral statements.—
155 (6) Failure to provide cancellation rights or disclosures
156 as required by this subsection in connection with the sale of a
157 regulated short-term product constitutes misrepresentation in
158 accordance with paragraph (4)(a). Any agreement relating to the
159 sale of a regulated short-term product must be regulated as
160 advertising material and is subject to the following:
161 (b) A purchaser of a regulated short-term product has the
162 right to cancel the agreement until midnight of the 10th
163 calendar day following the execution date of the agreement. The
164 right of cancellation may not be waived by the prospective
165 purchaser or by any other person on behalf of the prospective
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 869 (2023)
Amendment No. 4
166 purchaser. Notice of cancellation must be given in the same
167 manner prescribed for giving notice of cancellation under s.
168 721.10(3) s. 721.10(2). If the prospective purchaser gives a
169 valid notice of cancellation or is otherwise entitled to cancel
170 the sale, the funds or other property received from or on behalf
171 of the prospective purchaser, or the proceeds thereof, must be
172 returned to the prospective purchaser. Such refund must be made
173 in the same manner prescribed for refunds under s. 721.10.
174 (e) If the seller provides the purchaser with the right to
175 cancel the purchase of a regulated short-term product at any
176 time up to 7 days prior to the purchaser's reserved use of the
177 accommodations, but in no event less than 10 days, and if the
178 seller refunds the total amount of all payments made by the
179 purchaser reduced by the proportion of any benefits the
180 purchaser has actually received prior to the effective date of
181 the cancellation, the specific value of which has been agreed to
182 between the purchaser and the seller, the short-term product
183 offer shall be exempt from the requirements of paragraphs (b),
184 (c), and (d). An agreement relating to the sale of the regulated
185 short-term product made pursuant to this paragraph must contain
186 a statement setting forth the cancellation and refund rights of
187 the prospective purchaser in a manner that is consistent with
188 this section and s. 721.10, including a description of the
189 length of the cancellation right, a statement that the
190 purchaser's intent to cancel must be in writing and sent to the
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 869 (2023)
Amendment No. 4
191 seller at a specified address, a statement that the notice of
192 cancellation is effective upon the date sent, and a statement
193 that any attempt to waive the cancellation right is unlawful.
194 The right of cancellation provided to the purchaser pursuant to
195 this paragraph may not be waived by the prospective purchaser or
196 by any other person on behalf of the prospective pu rchaser.
197 Notice of cancellation must be given in the same manner
198 prescribed for giving notice of cancellation pursuant to s.
199 721.10(3) s. 721.10(2). If the prospective purchaser gives a
200 valid notice of cancellation, or is otherwise entitled to cancel
201 the sale, the funds or other property received from or on behalf
202 of the prospective purchaser, or the proceeds thereof, shall be
203 returned to the prospective purchaser. Such refund shall be made
204 in the manner prescribed for refunds under s. 721.10.
205 Section 11. Paragraph (l) of subsection (4) and paragraph
206 (l) of subsection (7) of section 721.55, Florida Statutes, are
207 amended to read:
208 721.55 Multisite timeshare plan public offering
209 statement.—Each filed public offering statement for a multisite
210 timeshare plan shall contain the information required by this
211 section and shall comply with the provisions of s. 721.07,
212 except as otherwise provided therein. The division is authorized
213 to provide by rule the method by which a developer must provide
214 such information to the division. Each multisite timeshare plan
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 869 (2023)
Amendment No. 4
215 filed public offering statement shall contain the following
216 information and disclosures:
217 (4) A text, which shall include, where applicable, the
218 information and disclosures set forth in paragraphs (a) -(l).
219 (l) A description of each component site, which
220 description may be disclosed in a written, graphic, tabular, or
221 other form approved by the division or provided to the purchaser
222 electronically, including, but not limited to, through a website
223 or other Internet-based access. The description of each
224 component site must shall include all of the following
225 information:
226 1. The name and address of each component site.
227 2. The number of accommodations, timeshare interests, and
228 timeshare periods, expressed in periods of 7-day use
229 availability, committed to the multisite timeshare plan and
230 available for use by purchasers.
231 3. Each type of accommodation in terms of the number of
232 bedrooms, bathrooms, sleeping capacity, and whether or not the
233 accommodation contains a full kitchen. As used in For purposes
234 of this subparagraph description, the term "full kitchen" means
235 a full kitchen shall mean a kitchen with at least having a
236 minimum of a dishwasher, range, sink, oven, and refrigerator.
237 4. A description of facilities available for use by the
238 purchaser at each component site, including the following:
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 869 (2023)
Amendment No. 4
239 a. The intended use of the facility, if not apparent from
240 the description.
241 b. Any user fees associated with a purchaser's use of the
242 facility.
243 5. A cross-reference to the location in the public
244 offering statement of the description of any priority
245 reservation features which may affect a purchaser's ability to
246 obtain a reservation in the component site.
247 (7) The following documents shall be included as exhibits
248 to the filed public offering statement, if applicable:
249 (l)1. If the multisite timeshare plan contains any
250 component sites located in the this state, the information
251 required by s. 721.07(5) pertaining to each such component site ,
252 unless exempt under pursuant to s. 721.03.
253 2. If the purchaser will receive an interest in a specific
254 multisite timeshare plan component site located outside of the
255 this state but which is offered in the this state, the
256 information required by s. 721.07(5) pertaining to that
257 component site., provided, However, for purposes of this
258 paragraph, that the provisions of s. 721.07(5)(t) shall only
259 requires require disclosure of information related to the
260 estimated budget for the timeshare plan and purchaser's expenses
261 as required by the jurisdiction in which the component site is
262 located.
263
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 869 (2023)
Amendment No. 4
264 A developer is not required to file a separate public offering
265 statement for any component site located within or outside the
266 state in order to include the component site in the multisite
267 timeshare plan.
268
269 -----------------------------------------------------
270 T I T L E A M E N D M E N T
271 Remove line 32 and insert:
272 participant weights; amending s. 721.075, F.S.; revising
273 language with respect to incidental benefits; amending s.
274 721.10, F.S.; revising language with respect to cancellations;
275 amending s. 721.11, F.S.; conforming cross-references; amending
276 s. 721.55, F.S.; revising disclosure requirements for a
277 multisite timeshare plan public offering statement; providing an
278 effective date.
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HB 917
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 917 State Minimum Wage
SPONSOR(S): Yeager
TIED BILLS: IDEN./SIM. BILLS: SB 892
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform & Economic Development 9 Y, 2 N Thompson Anstead
Subcommittee
2) Appropriations Committee 25 Y, 2 N Guy-Hudson Pridgeon
3) Commerce Committee Thompson Hamon
SUMMARY ANALYSIS
The federal Fair Labor Standards Act (FLSA) provides workers with minimum wage, overtime pay, and child
labor protections. The FLSA authorizes the U.S. Secretary of Labor to administer the FLSA provisions,
including workplace inspections, investigations, and enforcement of violations. The current federal minimum
wage rate under the FLSA is $7.25 an hour. Most wage and salary workers are covered by the FLSA. The
FLSA exempts certain employers and employees from the federal minimum wage and overtime requirements,
including minor league baseball players.
Pursuant to the State Constitution, on September 30, 2021, Florida’s minimum wage increased to $10 per
hour. Each year, thereafter, Florida’s minimum wage will increase by $1 until the minim um wage reaches $15
per hour on September 30, 2026. Beginning in 2027, the minimum wage will be adjusted annually for inflation,
as it had from 2005 - 2021.
The Florida Minimum Wage Act (Act) was enacted in 2005 to implement the minimum wage provisions in the
State Constitution. The Act designates the Department of Economic Opportunity (DEO) as the state agency
that implements the minimum wage requirements and establishes procedures with respect to enforcement of
violations. The Act specifies that:
Only those individuals entitled to receive the federal minimum wage under the FSLA, and its
implementing regulations, are eligible to receive the state minimum wage.
Provisions related to federal minimum wage exemptions in the FLSA are considered incorporated into
the Act.
The bill amends the Act to clarify that amendments to the FLSA are incorporated into the Act, aligning Florida’s
minimum wage exemptions with recent amendments to federal exemptions.
The bill does not appear to have a fiscal impact on state or local government.
The bill becomes effective upon becoming a law.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h0917d.COM
DATE: 4/13/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Fair Labor Standards Act
The federal Fair Labor Standards Act (FLSA), enacted in 1938, provides covered workers with
minimum wage, overtime pay, and child labor protections. 1 In 1938, the FLSA established a minimum
wage of $.25 an hour. The current federal minimum wage rate is $7.25 an hour, which went into effect
July 24, 2009.2 The FLSA applies to employment within any state in the U.S., the District of Columbia
or any territory or possession of the U.S.3
The FLSA covers most private and public sector employees. However, certain employers and
employees are exempt from coverage, including: individuals with disabilities, youth workers, tipped
workers and executive, administrative and professional workers. The FLSA covers businesses if the
business has annual sales of at least $500,000.4 It also covers certain individual employees if such
employee is engaged in interstate commerce.
Regardless of the dollar amount of revenues of a business, the FLSA applies to:5
Governments: Federal, state, or local government agencies.
Hospitals: Hospitals, or institutions primarily engaged in the care of the sick, the aged, or the
mentally ill or disabled who live on the premises. (It does not matter if the hospital or institution
is public or private or is operated for profit or not-for-profit.)
Schools: Pre-schools, elementary or secondary schools or institutions of higher learning (e.g.,
college), or a school for mentally or physically handicapped or gifted children. (It does not
matter if the school or institution is public or private or operated for profit or not-for-profit.)
The FLSA includes several exemptions from the federal minimum wage provisions, including:6
Executive, administrative and professional employees;
o Teachers and academic administrative personnel in elementary and secondary schools,
outside sales employees, and employees in certain computer-related occupations.
Employees in certain seasonal amusement or recreational establishments, employees in certain
small newspapers, seamen employed on foreign vessels, employees engaged in fishing
operations, and employees engaged in newspaper delivery;
Farm workers employed by certain employers;
Causal babysitters and persons employed as companions for the elderly or infirm;
Border patrol agents 7; and
1 29 U.S.C. § 201-219 and 29 C.F.R. ch. V.
2 Congressional Research Service, CRS Report R42713, The Fair Labor Standards Act (FLSA): An Overview,
https://crsreports.congress.gov/product/pdf/R/R42713#:~:text=The%20Fair%20Labor%20Standards%20Act%20(FLSA)%20provides
%20workers%20with%20min imu m,employees%20are%20exempt%20fro m%20coverage, (last visited Mar. 14, 2023). (The main
FLSA provisions and accompanying Department of Labor (DOL) regulations constitute what is commonly known as federal wage and
hour laws and federal child labor law.).
3 Congressional Research Service, CRS Report R42713, The Fair Labor Standards Act (FLSA): An Overview,
https://crsreports.congress.gov/product/pdf/R/R42713#:~:text=The%20Fair%20Labor%20Standards%20Act%20(FLSA)%20provides
%20workers%20with%20min imu m,employees%20are%20exempt%20fro m%20coverage, (last visited Mar. 14, 2023). (The FLSA
does not apply to employees working in a foreign country even if the employer has its main office in the U.S.).
4 The size of an enterprise is measured by its “annual sales or business done.” Annual sales or business done includes all business
activities that can be measured in dollars. Thus, retailers are covered by the FLSA if their annual sales are at least $500,000. Owners
of rental properties are covered if they collect at least $500,000 annually in rent. 29 C.F.R.§§779.258-779.259.
5 U.S. Department of Labor, Fair Labor Standards Act Advisor, https://webapps.dol.gov/elaws/whd/flsa/scope/screen10.asp, (last
visited Mar. 15, 2023).
6 29 U.S.C. § 213. (It also includes separate exemptions from overtime pay.)
7 Border Patrol Agent Pay Reform Act of 2014, S.1691, 113th Cong, (2014).
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Baseball players who are compensated pursuant to a contract that provides for a weekly salary
for services performed during the league’s championship season at a rate that is not less than a
weekly salary equal to the minimum wage.
The FLSA was amended in 2014, related to border patrol agents, and again in 2018, to exempt minor
league baseball players who are paid at least $290 per week during the 2018 championship season
from the federal minimum wage rate and overtime pay.8 These two amendments were the only
amendments made to the minimum wage exemptions provisions of the FLSA since Florida passed its
minimum wage law in 2005.9
The FLSA provides that if states enact worker protections, including minimum wage rates, that are
more protective of employees than what is provided by the FLSA, the state law applies. 10
Consequently, no state law may weaken the worker protections in the FLSA. However, state laws that
impose greater worker protections will supersede those in the FLSA.11
Thirty states plus Washington DC, Guam, Puerto Rico, and the Virgin Islands provide a minimum wage
greater than the federal minimum wage. Thirteen states provide a minimum wage that is equal to the
federal minimum wage. Five states have not adopted a minimum wage and two states have a minimum
wage that is below the federal minimum wage.12 For those seven states, the federal minimum wage
applies, but only to those workers covered by the FLSA.
Article X, Section 24 of the Florida Constitution
On November 2, 2004, Floridians voted to amend the Florida Constitution by adding a minimum wage
provision (Section 24) that established the state minimum wage.13 Prior to this date Florida did not have
a law on minimum wage so the FLSA applied for covered workers. Section 24 provides the amount of
the minimum wage and the procedure for calculating increases in the minimum wage. 14
Florida voters again on November 3, 2020, voted to approve a constitutional amendment related to the
state’s minimum wage, Amendment 2, to gradually increase the state’s minimum wage to $15 an hour
by the year 2026.15 Pursuant to the passage of Amendment 2, on September 30, 2021, Florida’s
minimum wage increased to $10 per hour. Each year, thereafter, Florida’s minimum wage will increase
8 See Levi Weaver, On Minor-League Pay, MLB’s Stance Doesn’t Line Up with the Facts, ATHLETIC (Apr. 4, 2018),
https://www.theathletic.com/293189/%202018/04/04/on-minor-league-pay-mlbs-stance-doesnt-line-up-with-the-facts// (last visited
March 1, 2023). (When recounting salary scale per level of minor league baseball, the article notes “federally-recognized poverty line
is $12,140 per year for single-individual households.” According to the article, a not-insignificant percentage of minor league players
are able to subsidize their relatively meager monthly salaries by drawing upon the signing bonuses they received from their MLB
clubs when first entering the professional ranks . These bonuses can range anywhere from $10,000 to several million dollars. “The top
64 picks [in the MLB draft] last year all received a bonus of over $1,000,000 before taxes, but roughly 40% of players signed for one-
time bonuses of $10,000 or less.”
9 S. 448.110, F.S., expressly references s s. 213 and 214 of the FLSA, which address minimum wage exemptions and employment
under special certificates, respectively. However, s. 214 has not been amended since 1989. (See Pub. L. 101–157, § 4(d), Nov. 17,
1989, 103 Stat. 941.)
10 29 U.S.C. §218.
11 Congressional Research Service, CRS Report R42713, The Fair Labor Standards Act (FLSA): An Overview, Updated March 2,
2023,
https://crsreports.congress.gov/product/pdf/R/R42713#:~:text=The%20Fair%20Labor%20Standards%20Act%20(FLSA)%20provides
%20workers%20with%20min imu m,employees%20are%20exempt%20fro m%20coverage, (last visited Mar. 14, 2023).
12 U.S. Department of Labor, Consolidated Minimum Wage Table, https://www.dol.gov/agencies/whd/mw-consolidated (last visited
Mar. 15, 2023).
13 Art. X, s. 24., Fla. Const.
14 Art. X, s. 24 (c), Fla. Const.
15 U.S. Department of State, Notice of Increase to State of Florida’s Minimum Wage, https://www.state.gov/wp-
content/uploads/2021/01/2021-01-29-Notice-FL-M inimu m-Wage-Increase.pdf (last visited Mar. 3, 2023).
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DATE: 4/13/2023
by $1 until the minimum wage reaches $15 per hour on September 30, 2026.16 Beginning in 2027, the
minimum wage will be adjusted annually for inflation, as it had been done from 2004 - 2021.
Related to minimum wage, the Florida Constitution states, “All working Floridians are entitled to be paid
a minimum wage sufficient to provide a decent and healthy life, that protects their employers from
unfair low wage competition, and that does not force them to rely on taxpayer-funded public services.”17
The Florida Constitution references the FLSA and specifically ties the meaning18 of certain terms,
“Employer,” “Employee” and “Wage,” to have the meanings established under the FLSA and its
implementing regulations.19 It also indicates that that case law, administrative interpretations, and other
guiding standards developed under the federal FLSA must guide the construction of Florida’s
Constitution related to Section 24 and any implementing statutes or regulations. 20
Florida Minimum Wage Act
The Florida Minimum Wage Act (Act) was enacted in 2005 to implement the minimum wage provisions
in the State Constitution.21 The Act designates the Department of Economic Opportunity (DEO) as the
state agency that implements the minimum wage requirements, establishes procedures with respect to
civil actions alleging violations, and provides that it is the exclusive remedy under state law for
violations of Section 24.22
The Act provides that effective May 2, 2005, employers are required to pay employees a minimum
wage at an hourly rate of $6.15 for all hours worked in Florida. Only those individuals entitled to receive
the federal minimum wage under the FSLA and its implementing regulations are eligible to receive the
state minimum wage pursuant to the State Constitution and this statute. The provisions of ss. 213 and
214 of the federal Fair Labor Standards Act, as interpreted by applicable federal regulations and
implemented by the Secretary of Labor, are incorporated by reference.23
The Act requires DEO to calculate an adjusted state minimum wage rate and requires the Department
of Revenue (DOR) and DEO to annually publish the amount of the adjusted state minimum wage and
the effective date on their websites. The Act authorizes persons to file a complaint or inform any person
of his or her potential rights pursuant to Section 24 regarding unpaid wages.24 The Act also authorizes
the Attorney General (AG) to bring a civil action to enforce these provisions. The AG may seek
injunctive relief, and for willful violations, may seek to impose a fine of $1,000 per violation, payable to
the state.25
As it relates to the federal minimum wage and the FLSA, the Act specifies that:26
Only those individuals entitled to receive the federal minimum wage under the FSLA, and its
implementing regulations, are eligible to receive the state minimum wage; and
Provisions related to federal minimum wage exemptions in the FLSA are considered
incorporated in the Act.
16 Department of Economic Opportunity, Florida’s Minimum Wage, https://floridajobs.org/docs/default-source/business-growth-and-
partnerships/for-employers/posters-and-required-notices/2022-minimum-wage/2022-florida-minimu m-wage-
announcement.pdf?sfvrsn=961754b0_2 (last visited Mar. 3, 2023).
17 Art. X, s. 24 (a), Fla. Const.
18 In re Advisory Opinion to the Atty. Gen. re Fla. Minimum Wage Amend ., 880 So. 2d 636, 641–42 (Fla. 2004). (“The proposed
amendment does not state that it is adopting the FLSA's definition of the term “employee,” but provides that it is adopting the meaning
of the term “employee,” which is a much broader concept.”)
19 Art. X, s. 24(b), Fla. Const.
20 Art. X, s. 24(f), Fla. Const.
21 Ch. 2005-353, Laws of Fla., codified in s. 448.110, F.S.
22 S. 448.110(10), F.S.
23 S. 448.110(3), F.S.
24 S. 448.110(6), F.S.
25 S. 448.110(7), F.S.
26 S. 448.110(3), F.S.
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Professional Baseball in Florida
Currently, there are 12 minor league baseball teams that are affiliated with Major League Baseball
(MLB) in Florida. There are approximately 500 players currently rostered, employed, and being paid by
the 12 Florida Minor League Baseball teams.27 Additionally, 15 MLB teams conduct major and minor
league spring training in Florida at thirteen different spring training facilities, a decrease from 18 teams
in 2008 and 16 teams in 2009. The Cleveland Indians (previously playing at Winter Haven), Los
Angeles Dodgers (Vero Beach) and Cincinnati Reds (Sarasota) have all moved to Arizona in recent
years.28 Two teams that play in the MLB, the Miami Marlins and the Tampa Bay Rays, are permanently
located in Florida.
The main baseball season runs from early April to early October with teams typically playing six days a
week. There are also play-offs which take place at the end of the normal season for the top-ranking
teams. The main season is preceded by spring training which typically starts around the middle of
February. Many of Florida’s baseball parks host other MLB teams every Spring as part of the Grapefruit
League Spring Training season. According to a 2018 economic impact study, the 2018 Florida
Grapefruit League generated an economic impact of approximately $687 million, $348 million in direct
spending, 7,152 jobs, and $253 million in earned wages, for the State of Florida.29
According to the industry, baseball players hours vary widely based on a number of factors, which can
vary. Players often perform extra activities, work longer hours than regularly scheduled, and perform
different activities than their teammates.30 As a result, the MLB has argued that the nature of the sport
stymies conventional attempts at categorizing “work hours.”31
Recently, MLB agreed to pay $185 million to current and former minor league baseball players to settle
a federal class action lawsuit in California alleging violations of minimum wage laws.32 In the lawsuit,
the players sued MLB and the MLB Clubs claiming they failed to pay the players minimum wage and
overtime pay in violation of the FLSA and state wage-and-hour laws in California, Arizona, and Florida.
MLB also agreed to rescind any prohibitions against teams paying wages to minor league players
outside of the season.The MLB also committed to issuing a memorandum advising their clubs to
compensate minor leaguers in compliance with wage-and-hour laws in effect in Arizona and Florida
during spring training, extended spring training, instructional leagues, and the championship season in
those states, including any minimum wage laws that apply.33
The Court held the final approval hearing related to the settlement on February 17, 2023. A late filed
motion to object to the settlement was filed and the Court has taken the motion under consideration. A
ruling is not expected until late March 2023.34
Effect of Proposed Changes
27 See Michael Avallone, Then and now: Florida State League, MiLB.com, https://www.milb.com/news/florida-state-league-overview
(last visited Mar. 3, 2023).
28 FloridaReview.co.uk, FLORIDA SPRING TRAINING 2023, https://floridareview.co.uk/florida-events/florida-spring-training (last
visited Mar. 15, 2023).
29 Florida Sports Foundation, 2018 MLB SPRING TRAINING ECONOMIC IMPACT STUDY, http://playinflorida.com/wp-
content/uploads/2018/08/GFL-IS-Page-by-Page-Booklet-spread.pdf (last visited Mar. 15, 2023).
30 Bleacher Report, Pregame Routines: A Typical Day in the Life of a Professional Baseball Player,
https://bleacherreport.com/articles/1061824-pregame -routines-a-typical-day-in-the-life-of-a-professional-baseball-player (last visited
Mar. 15, 2023).
31 Pew Trusts, Baseball Players Press Lawmakers for Minor League Labor Standards, https://www.pewtrusts.org/en/research-and-
analysis/blogs/stateline/2022/03/30/baseball-players-press-lawmakers-for-minor-league-labor-standards (last visited Mar. 19, 2023).
32 Aaron Senne et al vs. Office of the Commissioner of Baseball et al ., Civil Case No. 14-cv-00608.
33 NBC News, MLB settles minor league players' wage-and-hour class action suit for $185 million,
https://www.nbcnews.com/news/us -news/mlb-settles-minor-league-players-wage-hour-class-action-suit-185-milli-rcna38554 (last
visited Mar. 15, 2023).
34 JND Legal Administration, WELCOME TO THE SENNE V. OFFICE OF THE COMMISSIONER OF BASEBALL SETTLEMENT
WEBSITE, https://www.baseballplayerwagecase.com/ (last visited Mar. 15, 2023).
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The bill amends the Act to incorporate amendments to the FLSA into the Act, aligning Florida’s
minimum wage exemptions with federal exemptions.
Specifically, the bill:
Deletes an unnecessary date;
Adds “as amended” to the reference to the FLSA; and
Provides that this specific amendment to the Act is intended to “clarify existing law.”
B. SECTION DIRECTORY:
Section 1: Amends s. 448.110, F.S., relating to state minimum wage; annual wage adjustment;
enforcement.
Section 2: Provides applicability.
Section 3: Provides an effective date of upon becoming law.
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:
The bill may have an effect on salaries paid to minor league baseball players.
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:
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None.
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
None.
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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 917 2023
1 A bill to be entitled
2 An act relating to the state minimum wage; amending s.
3 448.110, F.S.; providing that the state minimum wage
4 only applies to individuals who are entitled to
5 receive the federal minimum wage under the federal
6 Fair Labor Standards Act, as amended; providing
7 applicability; providing an effective date.
8
9 Be It Enacted by the Legislature of the State of Florida:
10
11 Section 1. Subsection (3) of section 448.110, Florida
12 Statutes, is amended to read:
13 448.110 State minimum wage; annual wage adjustment;
14 enforcement.—
15 (3) Effective May 2, 2005, Employers shall pay employees a
16 minimum wage at an hourly rate of $6.15 for all hours worked in
17 Florida. Only those individuals entitled to receive the federal
18 minimum wage under the federal Fair Labor Standards Act , as
19 amended, and its implementing regulations shall be eligible to
20 receive the state minimum wage pursuant to s. 24, Art. X of the
21 State Constitution and this section. The provisions of ss. 213
22 and 214 of the federal Fair Labor Standards Act, as interpreted
23 by applicable federal regulations and implemented by the
24 Secretary of Labor, are incorporated herein.
25 Section 2. The amendments to s. 448.110, Florida Statutes,
Page 1 of 2
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hb0917-00
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 917 2023
26 in this act are intended to clarify existing law.
27 Section 3. This act shall take effect upon becoming a law.
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hb0917-00
COMMERCE COMMITTEE
HB 917 by Rep. Yeager
State Minimum Wage
AMENDMENT SUMMARY
April 17, 2023
Amendment 1 by Rep. Giallombardo (line 10):
• Prohibits political subdivisions through their purchasing or contracting procedures from
seeking to control or affect the wages or employment benefits provided by their vendors,
contractors, service providers, or other parties doing business with the political
subdivision.
• Prohibits political subdivisions through the use of evaluation factors, qualification of
bidders, or otherwise from awarding preferences on the basis of wages or employment
benefits provided by their vendors, contractors, service providers, or other parties doing
business with the political subdivision.
• Removes the authority for political subdivisions to establish a minimum wage other than
a state or federal minimum wage or to provide employment benefits not otherwise
required under state or federal law for the employees of an employer contracting to
provide goods or services for the political subdivision, or for the employees of a
subcontractor of such an employer, under the terms of a contract with the political
subdivision.
• The amendment changes the relating-to clause in the bill.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 917 (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: Commerce Committee
2 Representative Giallombardo offered the following:
3
4 Amendment (with title amendment)
5 Between lines 10 and 11, insert:
6 Section 1. Subsection (2) and paragraph (a) of subsection
7 (3) of section 218.077, Florida Statutes, are amended to read:
8 218.077 Wage and employment benefits requirements by
9 political subdivisions; restrictions.—
10 (2) Except as otherwise provided in subsection (3), a
11 political subdivision may not establish, mandate, maintain, or
12 otherwise require an employer to pay a minimum wage, other than
13 a state or federal minimum wage, to apply a state or federal
14 minimum wage to wages exempt from a state or federal minimum
15 wage, or to provide employment benefits not otherwise required
16 by state or federal law. No political subdivision may through
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Page 1 of 3
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 917 (2023)
Amendment No. 1
17 its purchasing or contracting procedures seek to control or
18 affect the wages or employment benefits provided by its vendors,
19 contractors, service providers, or other parties doing business
20 with the political subdivision. A political subdivision shall
21 not through the use of evaluation factors, qualification of
22 bidders, or otherwise award preferences on the basis of wages or
23 employment benefits provided by its vendors, contractors,
24 service providers, or other parties doing business with the
25 political subdivision.
26 (3) This section does not:
27 (a) Limit the authority of a political subdivision to
28 establish a minimum wage other than a state or federal minimum
29 wage or to provide employment benefits not otherwise required
30 under state or federal law:
31 1. For the employees of the political subdivision; or
32 2. For the employees of an employer contracting to provide
33 goods or services for the political subdivision, or for the
34 employees of a subcontractor of such an employer, under the
35 terms of a contract with the political subdivision; or
36 3. For the employees of an employer receiving a direct tax
37 abatement or subsidy from the political subdivision, as a
38 condition of the direct tax abatement or subsidy.
39
40 -----------------------------------------------------
41 T I T L E A M E N D M E N T
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Page 2 of 3
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 917 (2023)
Amendment No. 1
42 Remove lines 2-3 and insert:
43 An act relating to wage and employment benefits;
44 amending s. 218.077, F.S.; prohibiting political
45 subdivisions from controlling, affecting, or awarding
46 preferences, related to wages or employment benefits of
47 entities contracting with the political subdivision;
48 amending s. 448.110, F.S.; providing that the state
49 minimum wage
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CS/HB 919
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 919 Homeowners' Associations
SPONSOR(S): Regulatory Reform & Economic Development Subcommittee, Porras and others
TIED BILLS: IDEN./SIM. BILLS: CS/SB 1114
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform & Economic Development 14 Y, 1 N, As CS Wright Anstead
Subcommittee
2) Commerce Committee Wright Hamon
SUMMARY ANALYSIS
A homeowners’ association (HOA) is an association of residential property owners in which voting membership is
made up of parcel owners and membership is a mandatory condition of parcel ownership. HOAs are authorized to
impose assessments that, if unpaid, may become a lien on the parcel. HOAs may levy fines against or suspend
certain access rights of a parcel owner for failing to comply with the HOA’s governing documents. In addition,
Florida law requires officers and directors of an HOA to comply with certain requirements and may be removed from
office under certain circumstances.
Related to HOA officers and directors, the bill:
Provides that an officer or a director must be removed from office if charged with the following crimes:
o Forgery of a ballot envelope or voting certificate used in a homeowners' association election.
o Theft or embezzlement of funds of an HOA.
o Destruction of refusing to allow inspection of certain HOA records in furtherance of any crime.
o Obstruction of justice.
Provides criminal penalties for accepting kickbacks and certain actions of fraudulent voting activities.
Provides additional requirements for disclosing officer or director conflicts of interest.
Related to HOA fines and suspensions, the bill:
Provides that fines may not create a lien against a parcel.
Provides that a fine or suspension levied for a violation by the HOA board of administration may not be
imposed unless the board first provides at least 30 days' notice to the parcel owner of a hearing before a
committee. If the committee determines that a violation does not exist, then no other action may be taken
related to that alleged violation.
Allows a member to cure a violation. If a violation is cured before the hearing, a fine or suspension may not
be imposed. If the violation is cured within 30 days after the notice of imposed fine or suspension, the fine is
reduced by 50 percent and any applicable suspensions must be lifted.
Related to HOA funds, the bill:
Requires that if an HOA collects a deposit from a member to pay for expenses that may be incurred as a
result of construction on a member's parcel, or other reason for such deposit, such funds must not be
comingled with any other HOA funds.
o The member may request an accounting of such funds and the HOA must remit payment of unused
funds within 30 days after completion.
Related to HOA official records, the bill requires an HOA to allow a member to keep an address different than the
property address to be used for all required notices.
The bill does not appear to have a fiscal impact on state or local governments.
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 .
STORAGE NAME: h0919a.COM
DATE: 4/13/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Homeowners’ Associations
A homeowners’ association (HOA) is an association of residential property owners in which voting
membership is made up of parcel owners and membership is a mandatory condition of parcel
ownership. HOAs are authorized to impose assessments that, if unpaid, may become a lien on the
parcel.1
Only HOAs whose covenants and restrictions include mandatory assessments are regulated by ch.
720, F.S., the Homeowners’ Association Act (HOA Act). Like a condominium, an HOA is administered
by an elected board of directors. The powers and duties of an HOA include the powers and duties
provided in the HOA Act, and in the association’s governing documents, which include the recorded
covenants and restrictions, together with the bylaws, articles of incorporation, and duly adopted
amendments to those documents.2
An HOA must be a Florida corporation and the initial governing documents must be recorded in the
official records of the county in which the community is located. The powers and duties of an
association include those set forth in the HOA Act and in the governing documents, except as expressly
limited or restricted in the HOA Act.
After control of the HOA is obtained by members other than the developer, the HOA may institute,
maintain, settle, or appeal actions or hearings in its name on behalf of all members concerning matters
of common interest to the members. The HOA may defend actions in eminent domain or bring inverse
condemnation actions. Any individual member or class of members may bring any action without
participation by the HOA, but member does not have authority to act for the HOA by virtue of being a
member.3
No state agency has direct oversight over HOAs. However, Florida law provides for a limited mandatory
binding arbitration program, administered by the Division of Condominiums, Timeshares and Mobile
Homes, within the Department of Business and Professional Regulation, for certain election and recall
disputes.4
Powers and Duties of Officers and Directors – Current Situation
The officers and directors of an HOA have a fiduciary relationship to the members who are served by
the HOA.5
A director or officer charged by information or indictment with felony theft or embezzlement involving
the HOA’s funds or property is removed from office. The board must fill the vacancy according to
general law until the end of the period of the suspension or the end of the director’s term of office,
whichever occurs first. However, if the charges are resolved without a finding of guilt or without
acceptance of a plea of guilty or nolo contendere, the director or officer must be reinstated for any
remainder of term of office. A member who has such criminal charges pending may not be appointed or
elected to a position as a director or officer.6
1 S. 720.301(9), F.S.
2 See generally ch. 720, F.S.
3 S. 720.303(1), F.S.
4 S. 720.311, F.S.
5 S. 720.303(1), F.S.
6 S. 720.3033(4), F.S.
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An officer, director, or manager may not solicit, offer to accept, or accept any good or service of value
for which consideration has not been provided for his or her benefit or for the benefit of a member of his
or her immediate family from any person providing or proposing to provide goods or services to the
HOA.7 If the board finds that an officer or director has violated this condition, the board must
immediately remove the officer or director from office. The vacancy must be filled according to law until
the end of the director’s term of office. However, an officer, director, or manager may accept food to be
consumed at a business meeting with a value of less than $25 per individual or a service or good
received in connection with trade fairs or education programs. 8
If the HOA enters into a contract or other transaction with any of its directors or a corporation, firm,
association that is not an affiliated HOA, or other entity in which a director is also a director or officer or
is financially interested, the board must:9
Comply with the requirements for conflicts of interest in a corporation not for profit.10
Enter certain disclosure requirements into the written minutes of the meeting.
Approve the contract or other transaction by an affirmative vote of two-thirds of the directors
present.
At the next regular or special meeting of the members, disclose the existence of the contract or
other transaction to the members. Upon motion of any member, the contract or transaction must
be brought up for a vote and may be canceled by a majority vote of the members present. If the
members cancel the contract, the HOA is only liable for the reasonable value of goods and
services provided up to the time of cancellation and is not liable for any termination fee,
liquidated damages, or other penalty for such cancellation.
Powers and Duties of Officers and Directors – Effect of the Bill
In addition to current requirements, the bill provides that an officer or a director charged by information
or indictment with one of the following crimes must be removed from office, and the vacancy must be
filled as provided by the HOA Act until the end of the officer's or director's period of suspension or the
end of his or her term of office, whichever occurs first:
Forgery of a ballot envelope or voting certificate used in a homeowners' association election
under s. 831.01, F.S.
Theft or embezzlement of funds of a homeowners' association under s. 812.014, F.S.
Destruction of or the refusal to allow inspection or copying of an official record of a homeowners'
association that is accessible to parcel owners within the time periods required by general law in
furtherance of any crime as tampering with physical evidence under s. 918.13, F.S.
Obstruction of justice under ch. 843, F.S.
If such a criminal charge is pending against the officer or director, he or she may not be appointed or
elected to a position as an officer or a director of any HOA and may not have access to the official
records of any HOA, except pursuant to a court order. However, if the charges are resolved without a
finding of guilt, the officer or director must be reinstated for the remainder of his or her term of office, if
any.
The bill provides that an officer, a director, or a manager who knowingly solicits, offers to accept, or
accepts any thing or service of value or kickback commits a misdemeanor of the first degree, , for
amounts less than $1,000, and a felony of the third degree, for amounts $1,000 or more, and is subject
to a civil penalty. Such person may be removed from office.
7 However, an officer, director, or manager may accept food to be consumed at a business meeting with a value of less
than $25 per individual or a service or good received in connection with trade fairs or education programs . S. 720.303(3),
F.S.
8 S. 720.3033(3), F.S.
9 S. 720.3033(2), F.S.
10 A contract or transaction with a conflict of interest is not voidable if the relationship or interest is disclosed or known to
the board; the board authorized, approved, or ratified it by vote or written consent; or the contract or transaction is fair and
reasonable at the time it is authorized. Such contract or transaction must be authorized, approved, or ratified by a majority
of the directors on the board who have no relationship or interest in such transaction. S. 617.0832, F.S.
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The bill requires directors and officers of an HOA to disclose to the HOA any activity that may
reasonably be construed to be a conflict of interest at least 14 days prior to voting on the subject of
such conflict or entering into such contract. A rebuttable presumption of a conflict of interest exists if
any of the following occurs without prior disclosure to the association:
A director or an officer, or a relative of a director or an officer, enters into a contract for goods or
services with the HOA.
A director or an officer, or a relative of a director or an officer, holds an interest in a corporation,
limited liability corporation, partnership, limited liability partnership, or other business entity that
conducts business with the HOA or proposes to enter into a contract or other transaction with
the HOA.
Criminal Violations for Fraudulent Voting Activities
The bill provides that the following actions relating to HOA elections is a fraudulent voting activity and
constitutes a misdemeanor of the first degree:
Willfully and falsely swearing to or affirming an oath or affirmation, or willfully procuring another
person to falsely swear to or affirm an oath or affirmation, in connection with or arising out of
voting activities.
Perpetrating or attempting to perpetrate, or aiding in the perpetration of, fraud in connection with
a vote cast, to be cast, or attempted to be cast.
Preventing a member from voting, or preventing a member from voting as he or she intended,
by fraudulently changing or attempting to change a ballot, ballot envelope, vote, or voting
certificate of the member.
Menacing, threatening, or using bribery or any other corruption to attempt, directly or indirectly,
to influence, deceive, or deter a member when voting.
Giving or promising, directly or indirectly, anything of value to another member with the intent to
buy the vote of that member or another member or to corruptly influence that member or
another member in casting his or her vote. This paragraph does not apply to any food served
which is to be consumed at an election rally or a meeting or to any item of nominal value which
is used as an election advertisement, including a campaign message designed to be worn by a
member.
Using or threatening to use, either directly or indirectly, force, violence, or intimidation or any
tactic of coercion or intimidation to induce or compel a member to vote or refrain from voting in
an election or on any particular ballot measure.
Fines and Suspension – Current Situation
Owners, tenants, and guests must comply with an HOA’s declaration, bylaws, and rules. HOAs may
levy fines against or suspend the right of a parcel owner, occupant, or a guest of an owner or occupant,
to use the common areas 11 or any other association property for failing to comply with any provision in
the HOA’s governing documents. A suspension for failing to comply with an HOA’s declaration, bylaws,
or rules may not be for an unreasonable amount of time.12
No fine may exceed $100 per violation, although a fine may be levied on the basis of each day of a
continuing violation provided that fine does not exceed $1,000 in the aggregate. However, a fine may
exceed $1,000 if the HOA’s governing documents authorize it. Fines may not become a lien on the
property unless the fines exceed $1,000.13
Before an HOA levies a fine or a suspension, it must give the person receiving the fine or suspension at
least 14 days’ notice of an opportunity for a hearing. A fine and suspension committee of at least
three members selected by the board must hold a hearing to reject or approve the fine or suspension.
11 This does not apply to that portion of common areas used to provide access or utility services to the parcel. A
suspension may not prohibit an owner or tenant of a parcel from having vehicular and pedestrian ingress to and egress
from the parcel, including, but not limited to, the right to park. S. 720.305(2)(a), F.S.
12 S. 720.305, F.S.
13 S. 720.305(2), F.S.
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Board directors, officers, and employees of the HOA and family of such people may not serve on the
committee. The committee must approve the fine or suspension by majority vote otherwise the
proposed fine or suspension may not be imposed.14
A fine is due five days after written notice of the approved fine is provided to the parcel owner,
occupant, or guest. Written notice of the fine or suspension must be provided to the person by mail or
hand delivery.15
If a member is more than 90 days delinquent in paying any fee, fine, or other monetary obligation due
to the HOA, the HOA may suspend the rights of the member, or the member’s tenant, guest, or invitee,
to use common areas and facilities 16 until it is paid in full.17
An HOA may suspend the voting rights of a parcel or member for the nonpayment of any fee, fine, or
other monetary obligation due to the HOA that is more than 90 days delinquent. The suspension ends
upon full payment of all obligations currently due or overdue to the HOA.18
The notice and hearing requirements for levying fines do not apply to a suspension imposed for
delinquent payment.19
All suspensions imposed for delinquent payment of any fee, fine, or other monetary obligation due to
the HOA must be approved at a properly noticed board meeting. Upon approval, the HOA must notify
the parcel owner and, if applicable, the parcel’s occupant, licensee, or invitee by mail or hand
delivery.20
Fines and Suspension – Effect of the Bill
The bill limits when an HOA may levy a fine to violations of the declaration, association's bylaws, or
reasonable rules of the association.
The bill provides that a fine may not create a lien against a parcel and that governing documents may
not provide that fines may not exceed $1,000 in the aggregate.
The bill provides new hearing procedures and notice requirements for when an HOA wishes to
impose a fine or suspension, as described below.
The bill provides that a fine or suspension levied for a violation by the board of administration may not
be imposed unless the board first provides at least 30 days' notice to the parcel owner at the
designated mailing or e-mail address in the HOA's official records and, if applicable, any occupant,
licensee, or invitee of the parcel owner, sought to be fined or suspended and a hearing before a
committee of at least three members appointed by the board who are not officers, directors, or
employees of the association, or the spouse, parent, child, brother, or sister of an officer, director, or
employee. The notice must include a description of the alleged violation, the specific ac tion required to
cure such violation, and the date and location of the hearing. A parcel owner has the right to attend a
hearing by telephone or other electronic means.
If the committee, by majority vote, determines that a violation does not exist, then no other action may
be taken related to that alleged violation. The role of the committee is limited to determining whether a
violation exists and whether to approve or reject the fine or suspension levied by the board.
14 Id.
15 Id.
16 A suspension may not prohibit an owner or tenant of a parcel from having access a portion of common areas used to
provide access or utility services to the parcel, or from having vehicular and pedestrian ingress to and egress from the
parcel. S. 720.305(4), F.S.
17 S. 720.305(3), F.S.
18 S. 720.305(4), F.S.
19 S. 720.305(3), (4), F.S.
20 S. 720.305(5), F.S.
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The bill requires the committee to provide written notice to the parcel owner at the designated mailing
or e-mail address in the association's official records and, if applicable, any occupant, licensee, or
invitee of the parcel owner, of the committee's findings related to the violation, including any applicable
fines or suspensions that the committee approved or rejected, and how the parcel owner or any
occupant, licensee, or invitee of the parcel owner may cure the violation after the hearing.
The bill requires fines, suspensions, attorney fees, and costs to be imposed as follows:
If a violation is found by the committee, but is cured before the hearing, a fine or suspension
may not be imposed and attorney fees and costs may not be awarded.
If a violation is found and the proposed fine or suspension levied by the board is approved by
the committee, the committee must decide, by majority vote, a date that the fine payment is due,
which date must be at least 30 days after delivery of the required written notice.
If a violation is found and the proposed fine or suspension levied by the board is approved by
the committee, but the violation is cured within 30 days after delivery of the required written
notice, the fine must be reduced by 50 percent, any applicable suspensions must be lifted, and
attorney fees and costs may not be awarded.
If a violation is found and the proposed fine or suspension levied by the board is approved by
the committee and the violation is not cured or the fine is not paid within 30 days after delivery
of the required written notice, reasonable attorney fees and costs may be awarded to the
association.
The bill allows a parcel owner or any occupant, licensee, or invitee of the parcel owner may, at any
time, to make a written request for a detailed accounting of any amounts he or she owes to the
association and the board must provide such information within 10 days after receipt of the written
request. Failure by the board to respond to a written request for a detailed accounting constitutes a
complete waiver of the violation.
The bill requires that, upon receipt of a payment for any outstanding fines from a parcel owner or any
occupant, licensee, or invitee of the parcel owner, the board must apply the payment first to the fine
before satisfying any other amounts due to the HOA. Attorney fees and costs may not continue to
accrue after a parcel owner or any occupant, licensee, or invitee of the parcel owner pays the fine.
The bill allows a parcel owner or any occupant, licensee, or invitee of the parcel owner to request a
hearing before the board to dispute the reasonableness of the attorney fees and costs awarded to the
HOA.
The bill removes the option for an HOA to provide written notice of a fine by hand delivery.
The bill requires the board to send written notice to the parcel owner and, if applicable, the parcel's
occupant, licensee, or invitee by mail or hand delivery to the parcel owner's designated mailing or e-
mail address in the association's official records for any suspension imposed for delinquent payment of
any fee, fine, or other monetary obligation due to the HOA.
The bill provides that the failure of the HOA or committee to comply with these procedural requirements
constitutes a waiver of all fines or suspensions imposed or proposed for a violation. Any fines, fees, or
other costs incurred by a parcel owner or any occupant, licensee, or invitee of the parcel owner which is
related to a fine that is waived must also be waived or paid by the HOA if such fine, fee, or other cost is
not waivable.
Official Records – Current Situation
An HOA’s governing documents include the:
Recorded declaration of covenants for a community and all duly adopted amendments thereto;
HOA’s articles of incorporation and bylaws and any duly adopted amendments thereto; and
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Rules and regulations adopted under the authority of the recorded declaration, articles of
incorporation, or bylaws and any duly adopted amendments thereto. 21
The declaration of covenants, much like a constitution, establishes the community’s basic covenants
and restrictions.22 The articles of incorporation establish the HOA’s existence, basic structure, and
governance.23 The bylaws govern the HOA’s operation and administration, while the rules and
regulations typically supplement the other documents, addressing matters of everyday policy. 24
Unless otherwise provided in the governing documents or required by law, an HOA’s governing
documents may be amended by the affirmative vote of two-thirds of the HOA’s voting interests.25 Within
30 days after recording a governing document amendment, the HOA must give its members copies
thereof unless a copy was provided to the members before the vote on the amendment, in which case
the HOA must only provide the members with notice of the amendment’s adoption. 26
An HOA must maintain each of the following items, when applicable, which constitute the official
records of the HOA:27
A copy of the HOA’s governing documents:
o declaration of covenants and each amendment,
o bylaws and each amendment,
o articles of incorporation and each amendment, and
o current rules.
Copies of any plans, specifications, permits, and warranties related to improvements
constructed on the common areas or other property that the HOA is obligated to maintain,
repair, or replace.
The minutes of all meetings of the board of directors and of the members, which minutes must
be retained for at least 7 years.
A current roster of all members and their mailing addresses and parcel identifications. The
HOA must maintain the electronic mailing addresses and the numbers designated by members
for receiving notice sent by electronic transmission of those members consenting to receive
notice by electronic transmission. The electronic mailing addresses and numbers provided by
unit owners to receive notice by electronic transmission must be removed from HOA records
when consent to receive notice by electronic transmission is revoked. However, the HOA is not
liable for an erroneous disclosure of the electronic mail address or the number for receiving
electronic transmission of notices.
All of the HOA’s insurance policies, which must be retained for at least 7 years.
A current copy of all contracts to which the HOA is a party, including, without limitation, any
management agreement, lease, or other contract under which the HOA has any obligation or
responsibility. Bids received by the HOA for work to be performed must also be considered
official records and must be kept for a period of 1 year.
The financial and accounting records of the HOA, kept according to good accounting practices.
All financial and accounting records must be maintained for a period of at least 7 years. The
financial and accounting records must include:
o Accurate, itemized, and detailed records of all receipts and expenditures.
o A current account and a periodic statement of the account for each member, designating
the name and current address of each member who is obligated to pay assessments,
the due date and amount of each assessment or other charge against the member, the
date and amount of each payment on the account, and the balance due.
o All tax returns, financial statements, and financial reports of the HOA.
o Any other records that identify, measure, record, or communicate financial information.
21 S. 720.301(8), F.S.
22 Joseph Adams, HOA Governing Documents Explained (July 1, 2018), https://www.floridacondohoalawblog.com/2018/07/01/hoa-
governing-documents-explained/ (last visited Mar. 25, 2023).
23
Id.
24 Id.
25 S. 720.306(1), F.S.
26 Id.
27 S. 720.303(4), F.S.
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A copy of the disclosure summary.
Ballots, sign-in sheets, voting proxies, and all other papers and electronic records relating to
voting by parcel owners, which must be maintained for at least 1 year after the date of the
election, vote, or meeting.
All affirmative acknowledgments made pursuant to s. 720.3085(3)(c)3, F.S.
All other written records of the HOA which are related to the operation of the HOA.
Official Records – Effect of the Bill
The bill amends what information must be kept as part of the current roster in the official records. The
bill requires an HOA to keep a designated mailing address, which is the member’s property address,
unless the member has sent written notice to the association requesting that a different mailing address
be used for all required notices.
The bill provides that the HOA must also maintain facsimile numbers designated by members for
receiving notice sent by electronic transmission of those members consenting to receive notice by
electronic transmission. A member's e-mail address is the e-mail address the member provided when
consenting in writing to receiving notice by electronic transmission, unless the member has sent written
notice to the HOA requesting that a different e-mail address be used for all required notices.
Commingling of HOA Funds – Current Situation
All HOA funds held by a developer must be maintained separately in the HOA’s name. HOA reserve
and operating funds must not be commingled prior to turnover except the HOA may jointly invest
reserve funds if the funds are accounted for separately.28
A developer in control of an HOA may not commingle any HOA funds with the developer’s funds or with
the funds of any other HOA or community association.29
HOA funds may not be used by a developer to defend a civil or criminal action, administrative
proceeding, or arbitration proceeding that has been filed against the developer or directors appointed to
the HOA board by the developer, even when the subject of the action or proceeding concerns the
operation of the developer-controlled HOA.30
Commingling of HOA Funds – Effect of the Bill
In addition to current requirements regarding commingling funds, the bill requires that if an HOA
collects a deposit from a member to pay for expenses that may be incurred as a result of construction
on a member's parcel, or other reason for such deposit, such funds must be maintained separately and
may not be comingled with any other association funds. Upon completion of the member's construction
project, or any other reason for such deposit, the member may request an accounting from the
association of such funds that were deposited and the association must provide an accounting to the
member within 7 days after the member's request. An association must remit payment of any and all
unused funds to the member within 30 days after receiving notice that the member's construction
project, or any other reason for which a deposit was collected, is complete.
The bill provides a short title, the “Homeowners’ Associations Bill of Rights.”
The bill provides an effective date of July 1, 2023.
B. SECTION DIRECTORY:
Section 1: Provides a short title.
Section 2: Amends s. 720.303, F.S.; relating to requirements for HOA officers and directors.
28 S. 720.303(8)(a), F.S.
29 S. 720.303(8)(b), F.S.
30 S. 720.303(8)(c), F.S.
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Section 3: Amends s. 720.3033, F.S.; relating to criminal violations for kickbacks.
Section 4: Amends s. 720.305, F.S.; relating to procedures for HOA fines and appeals.
Section 5: Creates s. 720.3065, F.S.; relating to criminal violations for certain HOA voting activities.
Section 6: Provides an effective date.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may reduce fines paid by members to the HOA and provide greater fiscal responsibility of the
officers and directors.
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:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On March 28, 2023, the Regulatory Reform & Economic Development Subcommittee adopted a proposed
committee substitute (PCS) with one amendment and reported the bill favorably as a committee substitute.
The PCS differed from the underlying bill in the following ways:
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Removed all provisions relating to:
o Condominium associations,
o Designated recordkeepers,
o Division responsibilities related to alleged criminal violations, and
o Priority of payments due to an HOA.
Provided certain requirements and criminal violations for officers and directors.
Provided certain requirements for deposits to an HOA.
Provided an expanded procedure for levying HOA fines and suspensions.
The amendment to the PCS:
Clarified that the maximum fine amount for a violation is $100, and fines may not exceed $1,000 in
the aggregate.
Provided that a fine may not become a lien.
This analysis is drafted to the committee substitute as passed by the Regulatory Reform & Economic
Development Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 919 2023
1 A bill to be entitled
2 An act relating to homeowners' associations; providing
3 a short title; amending s. 720.303, F.S.; requiring
4 certain officers or directors of an association be
5 removed from office under certain circumstances;
6 specifying how a vacancy on the board must be filled;
7 providing restrictions on certain officers and
8 directors; specifying when an officer or director may
9 be reinstated; requiring an association to maintain
10 designated addresses as official records; specifying
11 what constitutes a designated address; making
12 conforming changes; prohibiting certain funds from
13 being comingled with other association funds;
14 authorizing a member to request an accounting from an
15 association under certain circumstances; requiring an
16 association to provide such accounting and remit
17 unused funds to the member within specified
18 timeframes; amending s. 720.3033, F.S.; providing
19 criminal and civil penalties for certain actions by
20 officers, directors, or managers of an association;
21 requiring directors and officers of the association to
22 disclose certain activity to the association within a
23 specified time frame; creating a rebuttable
24 presumption of a conflict of interest if certain acts
25 occur; amending s. 720.305, F.S.; restricting certain
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26 attorney fees and fines; specifying the types of
27 violations for which an association may levy fines;
28 providing a maximum aggregate fine amount; prohibiting
29 a fine from becoming a lien on a parcel; revising
30 amount of notice the board of administration must give
31 a parcel owner before imposing a fine or suspension;
32 specifying where such notice must be delivered;
33 providing requirements for such notice; authorizing
34 parcel owners to attend certain hearings by telephone
35 or other electronic means; expanding duties of a
36 specified committee; requiring a specified notice
37 after a hearing; specifying how fines, suspensions,
38 attorney fees, and costs are determined; requiring a
39 detailed accounting of amounts due to the association
40 be given to certain persons within a certain timeframe
41 upon written request; providing for a complete waiver
42 of a violation under certain circumstances; specifying
43 the priority of payments made by a parcel owner to an
44 association; prohibiting the accrual of attorney fees
45 and costs after a specified time; authorizing certain
46 persons to request a hearing to dispute certain fees
47 and costs; providing for the waiver of certain fines
48 or suspensions; requiring certain fines, fees, or
49 other costs be paid by an association; conforming
50 provisions to changes made by the act; creating s.
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51 720.3065, F.S.; providing criminal penalties for
52 certain fraudulent voting activities; providing an
53 effective date.
54
55 Be It Enacted by the Legislature of the State of Florida:
56
57 Section 1. This act may be cited as the "Homeowners'
58 Associations Bill of Rights."
59 Section 2. Subsection (1) and paragraph (g) of subsection
60 (4) of section 720.303, Florida Statutes, are amended, and
61 paragraph (d) is added to subsection (8) of that section, to
62 read:
63 720.303 Association powers and duties; meetings of board;
64 official records; budgets; financial reporting; association
65 funds; recalls.—
66 (1) POWERS AND DUTIES.—
67 (a) An association which operates a community as defined
68 in s. 720.301, must be operated by an association that is a
69 Florida corporation. After October 1, 1995, the associat ion must
70 be incorporated and the initial governing documents must be
71 recorded in the official records of the county in which the
72 community is located. An association may operate more than one
73 community.
74 (b)1. The officers and directors of an association have a
75 fiduciary relationship to the members who are served by the
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76 association.
77 2. An officer or a director charged by information or
78 indictment with one of the following crimes must be removed from
79 office, and the vacancy must be filled as provided in s.
80 720.306(9) until the end of the officer's or director's period
81 of suspension or the end of his or her term of office, whichever
82 occurs first:
83 a. Forgery of a ballot envelope or voting certificate used
84 in a homeowners' association election as provided in s. 831.01.
85 b. Theft or embezzlement of funds of a homeowners'
86 association as provided in s. 812.014.
87 c. Destruction of or the refusal to allow inspection or
88 copying of an official record of a homeowners' association that
89 is accessible to parcel owners within the time periods required
90 by general law in furtherance of any crime is tampering with
91 physical evidence as provided in s. 918.13.
92 d. Obstruction of justice under chapter 843.
93 3. If a criminal charge is pending against the officer or
94 director, he or she may not be appointed or elected to a
95 position as an officer or a director of any association and may
96 not have access to the official records of any association,
97 except pursuant to a court order. However, if the charges are
98 resolved without a finding of guilt, the officer or director
99 must be reinstated for the remainder of his or her term of
100 office, if any.
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101 (c) The powers and duties of an association include those
102 set forth in this chapter and, except as expressly limited or
103 restricted in this chapter, those set forth in the governing
104 documents.
105 (d) After control of the association is obtained by
106 members other than the developer, the association may institute,
107 maintain, settle, or appeal actions or hearings in its name on
108 behalf of all members concerning matters of common interest to
109 the members, including, but not limited to, the common areas;
110 roof or structural components of a building, or other
111 improvements for which the association is responsible;
112 mechanical, electrical, or plumbing elements serving an
113 improvement or building for which the association is
114 responsible; representations of the developer pertaining to any
115 existing or proposed commonly used facility; and protesting ad
116 valorem taxes on commonly used facilities. The association may
117 defend actions in eminent domain or bring inverse condemnation
118 actions. Before commencing litigation against any party in the
119 name of the association involving amounts in controversy in
120 excess of $100,000, the association must obtain the affirmative
121 approval of a majority of the voting interests at a meeting of
122 the membership at which a quorum has been attained. This
123 paragraph subsection does not limit any statutory or common-law
124 right of any individual member or class of members to bring any
125 action without participation by the association.
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126 (e) A member does not have authority to act for the
127 association by virtue of being a member. An association may have
128 more than one class of members and may issue membership
129 certificates.
130 (f) An association of 15 or fewer parcel owners may
131 enforce only the requirements of those deed restrictions
132 established prior to the purchase of each parcel upon an
133 affected parcel owner or owners.
134 (4) OFFICIAL RECORDS.—The association shall maintain each
135 of the following items, when applicable, which constitute the
136 official records of the association:
137 (g) A current roster of all members and their designated
138 mailing addresses and parcel identifications. A member's
139 designated mailing address is the member's property address,
140 unless the member has sent written notice to the association
141 requesting that a different mailing address be used for all
142 required notices. The association shall also maintain the e-mail
143 electronic mailing addresses and the facsimile numbers
144 designated by members for receiving notice sent by electronic
145 transmission of those members consenting to receive notice by
146 electronic transmission. A member's e-mail address is the e-mail
147 address the member provided when consenting in writing to
148 receiving notice by electronic transmission unless the member
149 has sent written notice to the association requesting that a
150 different e-mail address be used for all required notices. The
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151 e-mail electronic mailing addresses and facsimile numbers
152 provided by members unit owners to receive notice by electronic
153 transmission must shall be removed from association records when
154 the member revokes consent to receive notice by electronic
155 transmission is revoked. However, the association is not liable
156 for an erroneous disclosure of the e-mail electronic mail
157 address or the facsimile number for receiving electronic
158 transmission of notices.
159 (8) ASSOCIATION FUNDS; COMMINGLING.—
160 (d) If an association collects a deposit from a member for
161 any reason, including to pay for expenses that may be incurred
162 as a result of construction on a member's parcel, such f unds
163 must be maintained separately and may not be comingled with any
164 other association funds. Upon completion of the member's
165 construction project, or other reason for which the deposit was
166 collected, the member may request an accounting from the
167 association of his or her funds that were deposited and the
168 association must provide such accounting to the member within 7
169 days after the member's request. An association must remit
170 payment of any and all unused funds to the member within 30 days
171 after receiving notice that the member's construction project,
172 or other reason for which the deposit was collected, is
173 complete.
174 Section 3. Subsection (3) of section 720.3033, Florida
175 Statutes, is amended, and subsection (6) is added to that
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176 section, to read:
177 720.3033 Officers and directors.—
178 (3) An officer, a director, or a manager may not solicit,
179 offer to accept, or accept any thing good or service of value
180 for which consideration has not been provided for his or her
181 benefit or for the benefit of a member of his or her immediate
182 family from any person providing or proposing to provide goods
183 or services to the association. An officer, a director, or a
184 manager who knowingly solicits, offers to accept, or accepts any
185 thing or service of value or kickback in an amount less than
186 $1,000 commits a misdemeanor of the first degree, punishable as
187 provided in s. 775.082 or s. 775.083, or if such value or
188 kickback is $1,000 or more the officer, director, or manager
189 commits a felony of the third degree, punishable as provided in
190 s. 775.082, s. 775.083, or s. 775.084, and is subject to a civil
191 penalty under s. 718.501(1)(d). If the board finds that an
192 officer or a director has violated this subsection, the board
193 shall immediately remove the officer or director from office.
194 The vacancy shall be filled according to law until the end of
195 the officer's or director's term of office. However, an officer,
196 a director, or a manager may accept food to be consumed at a
197 business meeting with a value of less than $25 per individual or
198 a service or good received in connection with trade fairs or
199 education programs.
200 (6) Directors and officers of an association must disclose
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201 to the association any activity that may reasonably be construed
202 to be a conflict of interest at least 14 days before votin g on
203 an issue or entering into a contract that is the subject of the
204 conflict. A rebuttable presumption of a conflict of interest
205 exists if any of the following acts occur without prior
206 disclosure to the association:
207 (a) A director or an officer, or a relative of a director
208 or an officer, enters into a contract for goods or services with
209 the association.
210 (b) A director or an officer, or a relative of a director
211 or an officer, holds an interest in a corporation, limited
212 liability corporation, partnership, limited liability
213 partnership, or other business entity that conducts business
214 with the association or proposes to enter into a contract or
215 other transaction with the association.
216 Section 4. Subsections (1), (2), and (5) of section
217 720.305, Florida Statutes, are amended, and subsection (7) is
218 added to that section to read:
219 720.305 Obligations of members; remedies at law or in
220 equity; levy of fines and suspension of use rights. —
221 (1) Each member and the member's tenants, guests, and
222 invitees, and each association, are governed by, and must comply
223 with, this chapter, the governing documents of the community,
224 and the rules of the association. Actions at law or in equity,
225 or both, to redress alleged failure or refusal to comply with
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226 these provisions may be brought by the association or by any
227 member against:
228 (a) The association;
229 (b) A member;
230 (c) Any director or officer of an association who
231 willfully and knowingly fails to comply with these provisions;
232 and
233 (d) Any tenants, guests, or invitees occupying a parcel or
234 using the common areas.
235
236 The prevailing party in any such litigation is entitled to
237 recover reasonable attorney fees and costs as provided in
238 paragraph (2)(e). A member prevailing in an action between the
239 association and the member under this section, in addition to
240 recovering his or her reasonable attorney fees, may recover
241 additional amounts as determined by the court to be necessary to
242 reimburse the member for his or her share of assessments levied
243 by the association to fund its expenses of the litigation. This
244 relief does not exclude other remedies provided by law. This
245 section does not deprive any person of any other available right
246 or remedy.
247 (2) An association may levy reasonable fines for
248 violations of the declaration, association's bylaws, or
249 reasonable rules of the association. A fine may not exceed $100
250 per violation against any member or any member's tenant, guest,
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251 or invitee for the failure of the owner of the parcel or its
252 occupant, licensee, or invitee to comply with any p rovision of
253 the declaration, the association bylaws, or reasonable rules of
254 the association unless otherwise provided in the governing
255 documents. A fine may be levied by the board for each day of a
256 continuing violation, with a single notice and opportunity for
257 hearing, except that the fine may not exceed $1,000 in the
258 aggregate unless otherwise provided in the governing documents.
259 A fine of less than $1,000 may not become a lien against a
260 parcel. In any action to recover a fine, the prevailing party is
261 entitled to reasonable attorney fees and costs from the
262 nonprevailing party as provided in paragraph (e) determined by
263 the court.
264 (a) An association may suspend, for a reasonable period of
265 time, the right of a member, or a member's tenant, guest, or
266 invitee, to use common areas and facilities for the failure of
267 the owner of the parcel or its occupant, licensee, or invitee to
268 comply with any provision of the declaration, the association
269 bylaws, or reasonable rules of the association. This paragraph
270 does not apply to that portion of common areas used to provide
271 access or utility services to the parcel. A suspension may not
272 prohibit an owner or tenant of a parcel from having vehicular
273 and pedestrian ingress to and egress from the parcel, including,
274 but not limited to, the right to park.
275 (b) A fine or suspension levied for a violation by the
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276 board of administration may not be imposed unless the board
277 first provides at least 30 14 days' notice to the parcel owner
278 at his or her designated mailing or e-mail address in the
279 association's official records and, if applicable, any occupant,
280 licensee, or invitee of the parcel owner, sought to be fined or
281 suspended and an opportunity for a hearing before a committee of
282 at least three members appointed by the board who are n ot
283 officers, directors, or employees of the association, or the
284 spouse, parent, child, brother, or sister of an officer,
285 director, or employee. The notice must include a description of
286 the alleged violation, the specific action required to cure such
287 violation, and the date and location of the hearing. A parcel
288 owner has the right to attend a hearing by telephone or other
289 electronic means.
290 (c) If the committee, by majority vote, does not approve a
291 proposed fine or suspension, the proposed fine or suspension may
292 not be imposed. If the committee, by majority vote, determines
293 that a violation does not exist then no other action may be
294 taken related to that alleged violation. The role of the
295 committee is limited to determining whether a violation exists
296 and whether to approve confirm or reject the fine or suspension
297 levied by the board.
298 (d) After the hearing, the committee shall provide written
299 notice to the parcel owner at his or her designated mailing or
300 e-mail address in the association's official records and, if
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301 applicable, any occupant, licensee, or invitee of the parcel
302 owner, of the committee's findings related to the violation,
303 including any applicable fines or suspensions that the committee
304 approved or rejected, and how the parcel owner or any occupant,
305 licensee, or invitee of the parcel owner may cure the violation.
306 (e) Fines, suspensions, attorney fees, and costs are
307 imposed as follows:
308 1. If a violation is found by the committee, but is cured
309 before the hearing, a fine or suspension may not be imposed and
310 attorney fees and costs may not be awarded.
311 2. If a violation is found and the proposed fine or
312 suspension levied by the board is approved by the committee, the
313 committee must decide, by majority vote, a date that the fine
314 payment is due, which date must be at least 30 days after
315 delivery of the written notice required in paragraph (d).
316 3. If a violation is found and the proposed fine or
317 suspension levied by the board is approved by the committee, but
318 the violation is cured within 30 days after delivery of the
319 written notice required in paragraph (d), the fine must be
320 reduced by 50 percent, any applicable suspensions must be
321 lifted, and attorney fees and costs may not be awarded.
322 4. If a violation is found and the proposed fine or
323 suspension levied by the board is approved by the committee and
324 the violation is not cured or the fine is not paid within 30
325 days after delivery of the written notice required in paragraph
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326 (d), reasonable attorney fees and costs may be awarded to the
327 association.
328 (f) A parcel owner or any occupant, licensee, or invitee
329 of the parcel owner may, at any time, make a written request for
330 a detailed accounting of any amounts he or she owes to the
331 association and the board shall provide such information within
332 10 days after receipt of the written request. Failure by the
333 board to respond to a written request for a detailed accounting
334 constitutes a complete waiver of the violation.
335 (g) Upon receipt of a payment for any outstanding fines
336 from a parcel owner or any occupant, licensee, or invitee of the
337 parcel owner, the board must apply the payment first to the fine
338 before satisfying any other amounts due to the association.
339 Attorney fees and costs may not continue to accrue after a
340 parcel owner or any occupant, licensee, or invitee of the parcel
341 owner pays the fine.
342 (h) A parcel owner or any occupant, licensee, or invitee
343 of the parcel owner may request a hearing before the board to
344 dispute the reasonableness of the attorney fees and costs
345 awarded to the association 5 days after notice of the approved
346 fine is provided to the parcel owner and, if applicable, to any
347 occupant, licensee, or invitee of the parcel owner. The
348 association must provide written notice of such fine or
349 suspension by mail or hand delivery to the parcel owner and, if
350 applicable, to any occupant, licensee, or invitee of the parcel
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351 owner.
352 (5) All suspensions imposed under pursuant to subsection
353 (3) or subsection (4) must be approved at a properly noticed
354 board meeting. Upon approval, the board association must send
355 written notice to notify the parcel owner and, if applicable,
356 the parcel's occupant, licensee, or invitee by mail or hand
357 delivery to the parcel owner's designated mailing or e-mail
358 address in the association's official records.
359 (7) The failure of the association or committee to comply
360 with this section constitutes a waiver of all fines or
361 suspensions imposed or proposed for a violation. Any fines,
362 fees, or other costs incurred by a parcel owner or any occupant,
363 licensee, or invitee of the parcel owner which is related to a
364 fine that is waived under this subsection must also be waived or
365 paid by the association if such fine, fee, or other cost is not
366 waivable.
367 Section 5. Section 720.3065, Florida Statutes, is created
368 to read:
369 720.3065 Fraudulent voting activities relating to
370 association elections; penalties.—Each of the following acts is
371 a fraudulent voting activity relating to association elections
372 and constitutes a misdemeanor of the first degree, punishable as
373 provided in s. 775.082 or s. 775.083:
374 (1) Willfully and falsely swearing to or affirming an oath
375 or affirmation, or willfully procuring another person to falsely
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376 swear to or affirm an oath or affirmation, in connection with or
377 arising out of voting activities.
378 (2) Perpetrating or attempting to perpetrate, or aiding in
379 the perpetration of, fraud in connection with a vote cast, to be
380 cast, or attempted to be cast.
381 (3) Preventing a member from voting or preventing a member
382 from voting as he or she intended by fraudulently changing o r
383 attempting to change a ballot, ballot envelope, vote, or voting
384 certificate of the member.
385 (4) Menacing, threatening, or using bribery or any other
386 corruption to attempt, directly or indirectly, to influence,
387 deceive, or deter a member when voting.
388 (5) Giving or promising, directly or indirectly, anything
389 of value to another member with the intent to buy the vote of
390 that member or another member or to corruptly influence that
391 member or another member in casting his or her vote. This
392 paragraph does not apply to any food served which is to be
393 consumed at an election rally or a meeting or to any item of
394 nominal value which is used as an election advertisement,
395 including a campaign message designed to be worn by a member.
396 (6) Using or threatening to use, directly or indirectly,
397 force, violence, or intimidation or any tactic of coercion or
398 intimidation to induce or compel a member to vote or refrain
399 from voting in an election or on a particular ballot measure.
400 Section 6. This act shall take effect October 1, 2023.
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CS/HB 919 by Rep. Porras
Homeowners' Associations
AMENDMENT SUMMARY
April 17, 2023
Amendment 1 by Rep. Porras (line 191):
• Clarifies what qualifies as a “kickback” to an officer, director, or manager of an
homeowners’ association.
Amendment 2 by Rep. Porras (line 212):
• Makes a technical change.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 919 (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: Commerce Committee
2 Representative Porras offered the following:
3
4 Amendment (with title amendment)
5 Remove line 191 and insert:
6 penalty under s. 718.501(1)(d). For purposes of this subsection,
7 the term "kickback" means remuneration, whether in cash or in
8 kind, paid by or on behalf of a person providing or offering to
9 provide goods or services to an association, the purpose of
10 which is to influence the performance of an act or omission by
11 such association, when the remuneration is not tax deductible as
12 an ordinary business expense or not supported by consideration
13 of like value. If the board finds that an
14
15 -----------------------------------------------------
16 T I T L E A M E N D M E N T
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 919 (2023)
Amendment No. 1
17 Between lines 20 and 21, insert:
18 defining the term "kickback";
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Page 2 of 2
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 919 (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: Commerce Committee
2 Representative Porras offered the following:
3
4 Amendment
5 Remove line 212 and insert:
6 liability company, partnership, limited liability
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CS/HB 959
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 959 Dosage Form Animal Health Products
SPONSOR(S): Regulatory Reform & Economic Development Subcommittee, Tuck
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform & Economic Development 15 Y, 0 N, As CS Thompson Anstead
Subcommittee
2) Agriculture & Natural Resources Appropriations 14 Y, 0 N Byrd Pigott
Subcommittee
3) Commerce Committee Thompson Hamon
SUMMARY ANALYSIS
The Florida Commercial Feed Law (Commercial Feed Law) authorizes the Department of Agriculture and
Consumer Services (DACS) to regulate the distribution of commercial feed and feedstuff in Florida to ensure
these products are safe for human consumption. The DACS Division of Animal Industry (Division) is
responsible for enforcing the state’s animal industry law, which provides animal health regulations and protects
the state from animal pests and diseases.
Dosage form animal health supplements are animal health supplements that are similar to dietary supplements
for humans. According to the National Library of Medicine (NLM), such supplements are widely used but have
limited oversight and regulation. According to DACS, manufacturers and distributors of dosage form animal
products in Florida are currently governed by the state Commercial Feed Law due to the non-nutritional
character of these products. As a result, these entities are “required to comply with the registration, labeling,
and sampling requirements followed by distributors of other no- or low-nutritive value products allowed for use
as, or for mixing in, animal feed.”
Under federal law, the Dietary Supplement and Health Education Act (DSHEA) affects the way the Food and
Drug Administration (FDA) Center for Veterinary Medicine (CVM) regulates “food for humans.” Among other
things, it restricts substances from being food additives or drugs if the product meets the definition of a dietary
supplement. However, FDA’s assessment of DSHEA is that it was not intended to, and does not, apply to
animal feed, including pet food. Thus, products marketed as dietary supplements or “feed supplements” for
animals fall under Title 21, the Federal Food, Drug, & Cosmetics Act. These items are considered “foods” or
“drugs” depending on the intended use, or in some instances the articles may be, simultaneously, a food and a
drug.
The bill:
Includes dosage form animal products as a regulated feedstuff under the Commercial Feed Law, thus
requiring such products to be subject to regulation by DACS.
Clarifies that such products do not include certain drugs, biologics, parasiticides, medical devices, or
diagnostics used to treat or administered to animals under federal law.
Exempts products sold solely as a dosage form animal product and guaranteed as specified in the
Commercial Feed Law from showing a guaranteed analysis.
Provides specific product labeling requirements.
The bill may have a positive and negative fiscal impact on state government. The bill may also have a
negative fiscal impact on the private sector.
The effective date of the bill is October 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:
Current Situation
Commercial Feed and Feedstuff
The Florida Commercial Feed Law (Commercial Feed Law) 1 authorizes the Department of Agriculture
and Consumer Services (DACS) to regulate commercial feed and feedstuff for quality, safety, labeling
requirements, and standards.2 A distributor of commercial feed is required to obtain a master
registration3 and place on file a copy of the label for each brand of feed to be distributed in Florida. 4
Distributors are required to pay a licensing fee that is based on the weight of feed distributed in the
state.5 The Commercial Feed Law preempts to DACS all authority in the state to regulate, inspect,
sample, and analyze any commercial feed or feedstuff, including assessment of penalties for
violations.6
Samples of feed distributed in Florida must be periodically tested by a certified laboratory to determine
compliance with state standards.7 The minimum standards for feed and feedstuff are those set forth in
the “Official Publication 2001” published by the Association of American Feed Control Officials. 8
Any commercial feed distributed in this state, except a customer-formula feed and feed distributed
through an integrated poultry operation or by a cooperative to its members, must be accompanied by a
legible label bearing all information required by the federal Food and Drug Administration (FDA) and
the following information:9
An accurate statement of the net weight.
The name and principal address of the registrant.
The brand name and product name, if any, under which the commercial feed is distributed. The
word “medicated” must be incorporated as part of the brand or product name if the commercial
feed contains a drug.
DACS is authorized to require feeding directions and precautionary statements to be placed on the
label for the safe and effective use of medicated and other feed as deemed necessary. 10
Labels on medicated feed must include all of the following:
Any feeding directions prescribed by DACS to ensure safe usage.
The stated purpose of the medication contained in the feed as stated in the claim statement.
The established name of each active drug ingredient.
The level of each drug used in the final mixture expressed in metric units as well as the required
avoirdupois.
1 See ch. 580, F.S.
2 S. 580.036, F.S.
3 S. 580.041, F.S.
4 S. 580.051, F.S.
5 S. 580.041, F.S.
6 S. 580.0365, F.S.
7 S. 580.091, F.S.
8 R. 5E-3.013, F.A.C. The Association of American Feed Control Officials (AAFCO) is an independent organization that has been
guiding state, federal and international feed regulators with ingredient definitions, label standards and laboratory standard s for more
than 110 years, while supporting the health and safety of people and animals. AAFCO members are charged by their local, state or
federal laws to regulate the sale and distribution of animal feeds and animal drug remedies.
9 S. 580.051(1), F.S.
10 Id.
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Commercial feed labels must also include a guaranteed analysis stated in terms that advise the
consumer of the composition of the feed or feedstuff or support claims made in the labeling. In all
cases, the elements or compounds listed in the analysis must be determinable by laboratory methods
approved by DACS.11
DACS is authorized to adopt rules to enforce the Commercial Feed Law, which must be consistent with
the rules and standards of the United States Food and Drug Administration (FDA) and the United
States Department of Agriculture (USDA). The rules must include:
Establishing definitions and reasonable standards for commercial feed or feedstuff and
permissible tolerances for pesticide chemicals, chemical additives, nonnutritive ingredients, or
drugs in or on commercial feed or feedstuff in such amounts as will ensure the safety of
livestock and poultry and the products thereof used for human consumption.
Adopting standards for the manufacture and distribution of medicated feed.
Establishing definitions and reasonable standards for the certification of laboratories for the
conduct of testing and analyses as required.
Establishing product labeling requirements for distributors.
Limiting the use of drugs in commercial feed and prescribing feeding directions to be used to
ensure safe usage of medicated feed.
Establishing standards for evaluating quality-assurance/quality-control plans, including testing
protocols, for exemptions to certified laboratory testing requirements.
Establishing standards for the sale, use, and distribution of commercial feed or feedstuff to
ensure usage that is consistent with animal safety and well-being and, to the extent that meat,
poultry, and other animal products for human consumption may be affected by commercial feed
or feedstuff, to ensure that these products are safe for human consumption.
o Such standards must be developed in consultation with the Agricultural Feed, Seed, and
Fertilizer Advisory Council created under s. 570.451, F.S.
DACS is required to establish the standards that a laboratory must meet to become certified in any of
the following areas of testing:12
Nutrient.
Mycotoxins.
Microbiological organisms.
Pesticide residues.
Drugs.
DACS is guided by the methods published by the Association of Official Analytical Chemists, the United
States Environmental Protection Agency (EPA), the FDA, or other generally recognized authorities in
developing the standards for the laboratory certifications.13
The Commercial Feed Law prohibits distribution of an adulterated commercial feed or feedstuff.
Commercial feed or feedstuff is deemed adulterated if it includes any of the following:14
Any poisonous, deleterious, or nonnutritive substance that may render it injurious to animal or
human health.
o However, if the substance is not an additive, the feed shall not be considered
adulterated if the quantity of the substance does not ordinarily render it injurious to
animal or human health.
Any food additive or added poisonous, deleterious, or nonnutritive substance that is unsafe
within the meaning of s. 406 of the Federal Food, Drug, and Cosmetic Act, other than a
pesticide chemical in or on a raw agricultural commodity.
Any food additive or color additive that is unsafe within the meaning of s. 409 or s. 512 of the
Federal Food, Drug, and Cosmetic Act.
11 Id.
12 S. 580.065, F.S.
13 Id.
14 S. 580.071, F.S.
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A raw agricultural commodity that bears or contains a pesticide chemical that is unsafe within
the meaning of s. 408(a) of the Federal Food, Drug, and Cosmetic Act.
o However, where a pesticide chemical has been used in or on a raw agricultural
commodity in conformity with an exemption granted or a tolerance prescribed under s.
408 of the Federal Food, Drug, and Cosmetic Act and that raw agricultural commodity
has been subjected to processing such as canning, cooking, freezing, dehydrating, or
milling, the processed feed will result, or is likely to result, in pesticide residue in the
edible product of the animal which is unsafe within the meaning of s. 408(a) of the
Federal Food, Drug, and Cosmetic Act.
Any new animal drug that is unsafe within the meaning of s. 512 of the Federal Food, Drug, and
Cosmetic Act.
Any filthy, putrid, or decomposed substance or is otherwise unfit for feed.
If it is prepared, packaged, or held under unsanitary conditions in which it may have become
contaminated with filth or rendered injurious to health.
If it is the product of a diseased animal or of an animal that has died by a means other than
slaughter which is unsafe within the meaning of s. 402(a)(1) or (2) of the Federal Food, Drug,
and Cosmetic Act.
The Commercial Feed Law prohibits misbranded commercial feed or feedstuff. A commercial feed or
feedstuff is deemed misbranded, as follows:15
If its labeling is false or misleading in any particular.
If it is distributed under the name of another commercial feed or feedstuff.
If it is not labeled as required by this chapter or the rules promulgated hereunder.
If it does not conform to the definition of identity and standard of quality as prescribed by rule.
If any word, statement, or other information required by this chapter to appear on the label or
labeling is not prominently and conspicuously placed thereon in such terms as to render it likely
to be read and understood by the ordinary individual under customary conditions of purchase
and use.
If it is not appropriate for its intended or purported use.
If a nutrient test, conducted by a laboratory certified in nutrient testing, shows the presence of
any ingredient not listed on the label or the absence of any ingredient shown on the label.
The following acts are prohibited by the Commercial Feed Law:16
Distribution of any commercial feed or feedstuff that is adulterated or misbranded.
Adulteration or misbranding of any commercial feed or feedstuff.
Distribution of commercial feed or feedstuff that has not been sampled or analyzed by a
department-certified laboratory.
Distribution of agricultural commodities such as whole seed, hay, straw, stover, silage, cobs,
husks, and hulls which are adulterated.
Dissemination of any false advertisement with reference to the distribution of any commercial
feed or feedstuff.
Refusal to permit entry, inspection, or collection of samples of commercial feed or feedstuff by
authorized department personnel.
Removal or disposal of a lot of commercial feed or feedstuff that has had a stop-sale, stop-use,
removal, or hold order issued, prior to release by the department or the court.
Use of any label that does not comply with the provisions of this chapter.
Forging, counterfeiting, simulating, or false representing of any label.
Placing or permitting to be placed any false advertisement or misleading statement on a label.
Redistribution of a customer-formula commercial feed.
Using or placing of fasteners that may be injurious to animals on any commercial feed or
feedstuff or bags of any commercial feed or feedstuff, except those distributed exclusively for
poultry.
15 S. 580.081, F.S.
16 S. 580.112, F.S.
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Failure or refusal to register, pay inspection fees, or file reports, or perform any other affirmative
act required by this chapter or rule promulgated hereunder.
Distribution of a feed or feedstuff which is prohibited by federal law or regulation.
DACS is authorized to impose one or more of the following penalties against any person who violates
the Commercial Feed Law:17
Issuance of a warning letter.
A Class I fine for each occurrence.18
Revocation or suspension of the master registration, laboratory certification, or quality-
assurance/quality-control plan approval.
Probation for up to six months.
The severity of the penalty imposed must be commensurate with the degree of risk to human or animal
safety or the level of financial harm to the consumer that is created by the violation. 19
Violations of the Commercial Feed Law are a second-degree misdemeanor, punishable by a 60 day
term in prison and a $500 fine.20
The Commercial Feed Law defines “commercial feed” as all materials or combinations of materials
that are distributed or intended to be distributed for use as feed or for mixing in a feed for animals
other than humans, except:21
Unmixed whole seeds, including physically altered entire unmixed seeds, when such seeds are
not chemically changed or are not adulterated;
Unground hay, straw, stover, silage, cobs, husks, and hulls, and individual chemical compounds
or substances, when such commodities, compounds, or substances are unmixed with other
substances and are not adulterated; and
Feed mixed by the consumer for the consumer’s own use made entirely or in part from products
raised on the consumer’s farm.
“Feedstuff” is defined as edible materials, other than commercial feed, that are distributed for animal
consumption and that contribute energy or nutrients, or both, to an animal diet. 22
Dosage Form Animal Products
The humanization of certain species, including horses, dogs, and cats, has resulted in the emergence
of animal health supplements, referred to as “dosage form supplements.” These supplements are
similar to dietary supplements for humans.23 In dogs and cats, the most popular supplements include
joint and digestive health supplements, followed by supplements to aid with cognition, skin/coat and
heart health. For horses, owners can use supplements to treat or prevent osteoarthritis, joint disease,
digestion, hoof growth, coat, and behavior.24
According to the National Library of Medicine (NLM), such pet supplements and nutraceuticals are
widely used and generate millions of dollars in revenue for manufacturers. Despite the widespread use
of these veterinary products, oversight and regulation remain limited as compared to human dietary
supplement regulations. The NLM also provides that scientific information on veterinary pet
supplements and nutraceuticals is increasing; however, there is a lack of quality control, safety and
17 S. 580.121, F.S.
18 S. 570.971, F.S., provides that for each violation in the Class I category, a fine not to exceed $1,000 may be imposed.
19 S. 580.121, F.S.
20 Ss. 775.082, and 775.083, F.S.
21 S. 580.031(2), F.S.
22 S. 580.031(10), F.S.
23 State of Wisconsin Department of Agriculture, Trade and Consumer Protection, Labeling of Dosage Form Animal Health
Supplements for Non-human Food Producing Animals, https://datcp.wi.gov/Documents/Feed-
DosageFormAnimalHealthSuppPolicy.pdf (last visited Mar. 25, 2023).
24 National Library of Medicine, Veterinary Pet Supplements and Nutraceuticals,
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7802882/ (last visited Mar. 25, 2023).
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efficacy data for the majority of the substances marketed in pet supplements and the resulting products
for purchase currently available. Despite this lack of evidence, the use of veterinary supplements and
nutraceuticals continues to increase.”25
Food and Drug Administration
The U.S. Food and Drug Administration (FDA) Center for Food Safety and Applied Nutrition (CFSAN) 26
regulates the safety of dietary supplements in humans. The term “dietary supplement” is defined in the
Dietary Supplement Health and Education Act (DSHEA) of 1994, 27 as a product taken by mouth in
humans that contains a “dietary ingredient” intended to supplement the diet. A “dietary ingredient” can
include vitamins, minerals, herbs or other botanicals, amino acids and substances such as enzymes,
organ tissues and metabolites. The definition of ‘‘dietary supplement’’ does not explicitly state whether
it includes or excludes products intended for use in animals other than man.28
The FDA Center for Veterinary Medicine (CVM) 29 is responsible for the regulation of animal food
products. The CVM has mechanisms for food additive approval, which apply to any product unless it is
generally recognized as safe for that intended use (i.e. forages, grains and most mineral and vitamins).
This regulation applies to animal food additives that could affect the target animal’s safety.
Under Section 201(s) of the Federal Food, Drug, and Cosmetic Act (FD&C Act),30 the definition of a
food additive does not include any ingredient in or intended for use in a dietary supplement. Although
the dietary ingredient used in the dietary supplement must not adulterate the supplement, it does not
have to be Generally Recognized As Safe (GRAS) for its intended use in the supplement. However,
non-dietary ingredients (binders, fillers, etc.) are not exempt from the food additive definition. If any
product claims to cure, treat, prevent or mitigate disease, the product should be considered a “new
animal drug.”
Pet food, including pet treats but not pet supplements, falls under the Association of American Feed
Control Officials (AAFCO) and is regulated on a federal and state level. For now, AAFCO only
regulates labeling of “food-type” supplements, although it will monitor for any ingredient
misrepresentation of all animal supplements. Seven states, including Texas, Oregon, Michigan, North
Dakota, South Dakota, Virginia and Wyoming have enacted “remedy laws” to regulate pet supplements
that do not qualify as “foods” according to the AAFCO definition. 31
The DSHEA controls the way the FDA regulates “food for humans.” Among other things, it restricts
substances from being food additives or drugs if the product meets the definition of a dietary
supplement. Supplements intended for companion animals (i.e. not food animals for human
consumption) do not fall under the DSHEA and therefore undergo less regulatory oversight than human
dietary supplements.32
According to the FDA, the DSHEA does not apply to animal products.33 Thus, products marketed as
dietary supplements or “feed supplements” for animals still fall under the FD&C Act. These items are
considered “foods” or “drugs” depending on the intended use, or in some instances the articles may be,
25 Id.
26 U.S. Food and Drug Administration, Center for Food Safety and Applied Nutrition, https://www.fda.gov/about-fda/fda-
organization/center-food-safety-and-applied-nutrition-cfsan (last visited Mar. 25, 2023).
27 Pub. L. No. 103-417.
28 National Library of Medicine, Veterinary Pet Supplements and Nutraceuticals,
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7802882/ (last visited Mar. 25, 2023).
29 U.S. Food and Drug Administration, Center for Veterinary Medicine, https://www.fda.gov/about-fda/fda-organization/center-
veterinary-medicine (last visited Mar. 25, 2023).
30 21 U.S.C. § 301-399.
31 National Library of Medicine, Veterinary Pet Supplements and Nutraceuticals,
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7802882/ (last visited Mar. 25, 2023).
32 State of Wisconsin Department of Agriculture, Trade and Consumer Protection, Labeling of Dosage Form Animal Health
Supplements for Non-human Food Producing Animals, https://datcp.wi.gov/Documents/Feed-
DosageFormAnimalHealthSuppPolicy.pdf (last visited Mar. 25, 2023).
33 61 C.F.R. § 17706.
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simultaneously, a food and a drug. The FD&C Act defines the term "food" as an article used for food or
drink for man or other animals including components of such articles. Thus, any nutrient ingredient
(e.g., vitamins, minerals, and amino acids) which is added to a food is also a food by definition. The
FD&C Act also defines the term "drug" as including any article intended for use as a component of a
drug. A nutrient ingredient used as a component of a dosage form drug must meet the requirements for
a drug. A nutrient ingredient used as a component of all other medicated products must meet the
requirements for a food. While a nutrient ingredient of a non-dosage form product is also a drug when it
is intended for use as a component of a drug, the nutrient will be primarily regulated as a food and need
not be shown to serve an active drug purpose provided no drug claims are made or implied for the
nutrient.34
The regulatory status of an article is determined by CVM on a case-by-case basis. Under the FD&C
Act, "animal feeds/foods" refers to feed for livestock, poultry, or other animals, and pet food. These
articles may ordinarily be thought of as foods under the Act, and also, in some cases, as food additives.
However, based upon the claims made for these articles, their intended uses may bring them within the
definition of a drug under the Act. In such instances, the articles may, as a matter of law, be both a food
and a drug simultaneously.35
According to DACS, manufacturers and distributors of dosage form animal products in Florida are
currently being regulated under the Commercial Feed Law due to the products’ non-nutritional
character. As a result, marketers of “dosage form animal health products” are required to comply with
the registration, labeling, and sampling requirements followed by distributors of other no- or low-
nutritive value products allowed for use as, or for mixing in, animal feed. 36
Proposed Changes
The bill includes “dosage form animal products” as a regulated feedstuff under the Commercial Feed
Law, thus requiring such products to be subject to related fees, and quality, safety, and labeling
requirements, which are governed by DACS.
Specifically, the bill:
Defines “dosage form animal product" as a feedstuff that includes any product intended to affect
the structure or function of the animal's body other than by providing nutrition to the animal. The
term includes oils, tinctures, capsules, tablets, liquids, and chewables.
Specifies that the term does not include:
A mineral or vitamin, a product represented as a primary meal for the intended animal
species, any other product intended as a treat, or a dental product providing mechanical
or abrasive action or both.
Drugs, biologics, parasiticides, medical devices, or diagnostics used to treat, or
administered to, animals:
Under the Federal Food, Drug, and Cosmetic Act (21 U.S.C. Sec. 301 et seq.),
as amended,
By the United States Department of Agriculture under the federal Virus-Serum-
Toxin Act (21 U.S.C. Sec. 151 et seq.), as amended; or
By the U.S. Environmental Protection Agency under the Federal Insecticide,
Fungicide, and Rodenticide Act (7 U.S.C. Sec. 136 et seq.), as amended.
Exempts dosage form animal products that are sold solely as a dosage form animal product and
guaranteed as specified in the Commercial Feed Law from showing a guaranteed analysis.
Requires the label on a dosage form animal product to contain the following:
o An accurate statement of the net weight.
34 U.S. Food and Drug Administration, Nutritional Ingredients in Animal Drugs and Feeds, https://fda.report/media/70108/Guide-
1240.3420-Nutrit ional-Ingredients-in-Animal-Drugs-and-Feeds.pdf (last visited Mar. 25, 2023).
35 U.S. Food and Drug Administration, FDA/CVM Program Policy and Procedures Manual Guide 1240.3605 ,
https://www.fda.gov/media/69982/download (last visited Mar. 25, 2023).
36 Florida Department of Agriculture and Consumer Services, Agency Analysis of House Bill 959, pgs. 1 and 2 (Mar. 9, 2023).
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o The name and principal address of the registrant.
o The brand name and product name, if any, under which the dosage form animal product
is distributed.
o The date of manufacture or expiration date of the dosage form animal product sold at
retail as the department may by rule require.
o The amount of each active ingredient per serving.
o The common or usual name of each inactive ingredient contained in the dosage form
animal product.
o A statement that identifies how the product supports the structure or function of the
animal.
o Precautionary statements and warnings required to ensure the safe and effective use of
the dosage form animal product.
o Recommended dosage by animal weight.
o The statement "Not for human consumption."
The effective date of the bill is October 1, 2023.
B. SECTION DIRECTORY:
Section 1: Amends s. 580.031, F.S.; creating a definition for the term “dosage form animal product.”
Section 2: Amends s. 580.051, F.S.; relating to labels; requirements; penalties.
Section 3: Provides an effective date.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
The DACS may receive additional revenue through fee payments and enforcement of penalties.
The amount is indeterminate.
2. Expenditures:
The bill may have a negative fiscal impact on DACS due to increased costs associated with the
enforcement and inspection of dosage form animal products. DACS estimates year one recurring
expenditures of $262,147 and nonrecurring expenditures of $14,046 to support three (3) full time
equivalent positions for additional workload. A review of the department’s budget reversions and
vacant positions shows there are sufficient existing resources that can be redirected to implement
the provisions of the bill.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill will require distributors of dosage form animal products to comply with Commercial Feed Law
regulatory requirements governed by DACS, including the payment of fees and enforcement of
penalties.
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Dosage form animal health products currently sold may need to be recalled to be accurately labelled,
which may have a negative fiscal impact to the distributors and business owners of those products.
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:
Article VII, Section 19 of the Florida Constitution requires a supermajority vote to impose or raise a
tax or fee. Under this provision, “Raise” means:
a. “To increase or authorize an increase in the rate of a state tax or fee imposed on a
percentage or per mill basis;
b. To increase or authorize an increase in the amount of a state tax or fee imposed on a flat or
fixed amount basis; or
c. To decrease or eliminate a state tax or fee exemption or credit.”
The bill will require distributors of dosage form animal products to comply with the regulatory
requirements under the Commercial Feed Law, including the payment of fees. It is unclear if they
would be subject to existing fees under the law or if DACS would need to create a fee for the newly
regulated entities. However, it is unclear as to whether either of these scenarios would constitute the
“raising” of a fee as defined in Art. VII s. 19.
B. RULE-MAKING AUTHORITY:
The bill authorizes DACS to require by rule, the date of manufacture or expiration date of the dosage
form animal product sold at retail. The Commercial Feed Law appears to provide sufficient rulemaking
authority.37
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On March 28, 2023, the Regulatory Reform & Economic Development Subcommittee adopted one
amendment and reported the bill favorably as a committee substitute. The committee substitute:
Removed the requirement that manufacturers and distributors of dosage form animal health
products register with DACS under the Florida animal industry law.
Included dosage form animal products as a regulated feedstuff under the Commercial Feed Law.
37 S. 580.036(2), F.S.
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This analysis is drafted to the committee substitute as passed by the Regulatory Reform & Economic
Development Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 959 2023
1 A bill to be entitled
2 An act relating to dosage form animal health products;
3 amending s. 580.031, F.S.; providing a definition;
4 amending s. 580.051, F.S.; providing an exception from
5 guaranteed analysis requirements for products sold
6 solely as dosage form animal products; providing
7 labeling requirements for dosage form animal products;
8 providing an effective date.
9
10 Be It Enacted by the Legislature of the State of Florida:
11
12 Section 1. Subsections (9) through (24) of section
13 580.031, Florida Statutes, are renumbered as subsections (10)
14 through (25), respectively, and a new subsection (9) is added to
15 that section to read:
16 580.031 Definitions of words and terms.—As used in this
17 chapter, the term:
18 (9) "Dosage form animal product" means a feedstuff that
19 includes any product intended to affect the structure or
20 function of the animal's body other than by providing nutrition
21 to the animal.
22 (a) The term includes oils, tinctures, capsules, tablets,
23 liquids, and chewables.
24 (b) The term does not include:
25 1. Minerals or vitamins;
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26 2. Products represented as a primary meal for the intended
27 animal species;
28 3. Products intended as a treat;
29 4. Dental products providing mechanical or abrasive action
30 or both; or
31 5. Drugs, biologics, parasiticides, medical devices, or
32 diagnostics used to treat, or administered to, animals pursuant
33 to:
34 a. The United States Food and Drug Administration Federal
35 Food, Drug, and Cosmetic Act, 21 U.S.C. ss. 301 et seq., as
36 amended;
37 b. The United States Department of Agriculture federal
38 Virus-Serum-Toxin Act, 21 U.S.C. ss. 151 et seq., as amended; or
39 c. The United States Environmental Protection Agency
40 Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C.
41 ss. 136 et seq., as amended.
42
43 Except as provided by law or rule, all terms used in connection
44 with commercial feed or feedstuff have the meanings ascribed to
45 them by the Association of American Feed Control Officials.
46 Section 2. Subsection (1) of section 580.051, Florida
47 Statutes, is amended to read:
48 580.051 Labels; requirements; penalty.—
49 (1) Any commercial feed or feedstuff distributed in this
50 state, except a customer-formula feed and feed distributed
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51 through an integrated poultry operation or by a cooperative to
52 its members, shall be accompanied by a legible label bearing all
53 information required by the federal Food and Drug Administration
54 and the following information:
55 (a) An accurate statement of the net weight.
56 (b) The name and principal address of the registrant.
57 (c) The brand name and product name, if any, under which
58 the commercial feed is distributed. The word "medicated" shall
59 be incorporated as part of the brand or product name if the
60 commercial feed contains a drug.
61 1. The department may require feeding directions and
62 precautionary statements to be placed on the label for the safe
63 and effective use of medicated and other feed as deemed
64 necessary.
65 2. Labels on medicated feed shall include all of the
66 following:
67 a. Any feeding directions prescribed by the department to
68 ensure safe usage.
69 b. The stated purpose of the medication contained in the
70 feed as stated in the claim statement.
71 c. The established name of each active drug ingredient.
72 d. The level of each drug used in the final mixture
73 expressed in metric units as well as the required avoirdupois.
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74 (d) The date of manufacture or expiration date of
75 commercial feed sold at retail as the department may by rule
76 require.
77 (e) The guaranteed analysis stated in terms that advise
78 the consumer of the composition of the feed or feedstuff or
79 support claims made in the labeling. In all cases, the elements
80 or compounds listed in the analysis must be determinable by
81 laboratory methods approved by the department. However, products
82 sold solely as dosage form animal products and guaranteed as
83 specified in this section need not show a guaranteed analysis.
84 1. The guaranteed analysis, listing the minimum percentage
85 of crude protein, minimum percentage of crude fat, and maximum
86 percentage of crude fiber and, when more than 10 percent mineral
87 ingredients are present, the minimum or maximum percentages of
88 mineral elements or compounds as provided by rule.
89 2. Vitamin ingredients, when guaranteed, shall be shown in
90 amounts and terms provided by rule. For mineral feed, the list
91 shall include the following: maximum or minimum percentages of
92 calcium (Ca), phosphorus (P), salt (NaCl), iron (Fe), copper
93 (Cu), cobalt (Co), magnesium (Mg), manganese (Mn), potassium
94 (K), selenium (Se), zinc (Zn), and fluorine (F) if ingredients
95 used as sources of any of these constituents are declared. All
96 mixtures that contain mineral or vitamin ingredients generally
97 regarded as dietary factors essential for the normal nutrition
98 of animals and that are sold or represented for the primary
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99 purpose of supplying these minerals or vitamins as additions to
100 rations in which these same mineral or vitamin factors may be
101 deficient shall be classified as mineral or vitamin supplements.
102 Products sold solely as mineral or vitamin supplements and
103 guaranteed as specified in this section need not show guarantees
104 for protein, fat, and fiber.
105 3. Other nutritional substances or elements determinable
106 by laboratory methods may be guaranteed by permission of, or
107 shall be guaranteed at the request of, the department as may be
108 provided by rule.
109 (f) The common or usual name of each ingredient used in
110 the manufacture of the commercial feed; however, for all
111 commercial feed except horse feed, the department by rule may
112 permit the use of collective terms for a group of ingredients
113 which perform a similar nutritional function.
114 (g) A label on a dosage form animal product must contain
115 all of the following:
116 1. An accurate statement of the net weight.
117 2. The name and principal address of the registrant.
118 3. The brand name and product name, if any, under which
119 the dosage form animal product is distributed.
120 4. The date of manufacture or expiration date of the
121 dosage form animal product sold at retail as the department may
122 by rule require.
123 5. The amount of each active ingredient per serving.
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124 6. The common or usual name of each inactive ingredient
125 contained in the dosage form animal product.
126 7. A statement that identifies how the dosage form animal
127 product supports the structure or function of the animal.
128 8. Precautionary statements and warnings required to
129 ensure the safe and effective use of the dosage form animal
130 product.
131 9. Recommended dosage by animal weight.
132 10. The statement "Not for human consumption."
133 Section 3. This act shall take effect October 1, 2023.
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HB 987
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 987 Public Deposits
SPONSOR(S): Botana
TIED BILLS: IDEN./SIM. BILLS: SB 1360
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 12 Y, 5 N Fletcher Lloyd
2) State Administration & Technology 11 Y, 4 N Perez Topp
Appropriations Subcommittee
3) Commerce Committee Fletcher Hamon
SUMMARY ANALYSIS
Unless exempted by law, state and local governments are required to deposit public funds in a qualified public
depository (QPD) pursuant to the Florida Security for Public Deposits Act, ch. 280, F.S. (Act). The Act is
administered by the Chief Financial Officer (CFO) and the Department of Financial Services (DFS).
Before a QPD accepts or retains a public deposit, it must deposit collateral with an approved custodian in an
amount commensurate with the amount of public deposits held and the financial stability of the QPD. Currently,
banks, savings banks, and savings associations are the only types of financial institutions eligible to be a QPD
or a custodian for another QPD’s pledged collateral.
The bill:
Allows state-chartered and federally-chartered credit unions to become QPDs and custodians for
another QPD’s pledged collateral;
Provides criteria a credit union must meet before the CFO can designate the credit union as a QPD;
Creates separate mutual responsibility and contingent liability provisions for credit union QPDs to
prevent banks from sharing liability with credit unions in the event of a credit union QPD’s default or
insolvency, and vice versa; and
Requires the CFO to segregate and separately account for any collateral proceeds, assessments, or
administrative penalties attributable to a credit union from those attributable to any banks, savings
bank, or savings association.
The bill has a significant fiscal impact. See Fiscal Impact on State Government section. Further, the bill does
not include an appropriation to fund DFS’s implementation and ongoing maintenance of credit unions as
QPDs. The bill has an indeterminate fiscal impact on local governments and 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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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Public Depositories
Pursuant to the Florida Security for Public Deposits Act, ch. 280, F.S. (Act), and unless exempted therein,
state and local governments are required to deposit public funds in a qualified public depository (QPD). 1 A
QPD is any bank, savings bank, or savings association that:
is organized and exists under the laws of the United States, the laws of this state, or any other state
or territory of the United States (i.e., state or federally chartered);
has its principal place of business in this state or has a branch office in this state which is
authorized under Florida or federal laws to receive deposits in this state;
has deposit insurance under the provision of the Federal Deposit Insurance Act, as amended2;
has procedures and practices for accurate identification, classification, reporting, and
collateralization of public deposits;
meets all the requirements of the Act; and
has been designated by the Chief Financial Officer (CFO) as a QPD.3
Upon approval from the CFO, these banks, savings banks, and savings associations may accept “public
deposits” from state and local governments. The Act does not permit credit unions to become QPDs, due
to their absence from the definition of “qualified public depository.” As of May 20, 2022, there are 118
active QPDs in this state.4
Before a QPD can accept or retain a public deposit, the QPD must deposit collateral with an approved
custodian in an amount commensurate with the amount of public deposits held and the financial stability of
the QPD.5 The Act’s collateral requirements protect public deposits against loss in the event of certain
triggering events, most notably, a QPD’s insolvency or default. 6 Losses are satisfied first through the
standard maximum federal deposit insurance of $250,000, 7 and then through the CFO’s demand for
payment under letters of credit or the sale of collateral pledged or deposited by the defaulting QPD. Any
shortfall would then be covered by the CFO’s authority to impose assessments against the other solvent
QPDs, who must agree to share mutual responsibility and contingent liability as a condition of acting as a
QPD.8
A “custodian” can be the CFO or any state or federally chartered bank, savings association, or trust
company approved by the CFO to hold collateral pledged by QPDs to secure public deposits. 9 Collateral
may be pledged, deposited or issued using the following collateral agreements as approved the CFO to
meet the requisite collateral:
regular custody arrangement for collateral pledged to the CFO, subject to certain requirements; 10
Federal Reserve Bank custody arrangement for collateral pledged to the CFO, subject to certain
requirements;11
1 S. 280.03(1)(b), F.S.
2 12 U.S.C. ss. 1811 et seq.
3 S. 280.02(26), F.S.
4 Florida Department of Financial Services, List of Active QPDs, https://myfloridacfo.com/docs-sf/treasury-
libraries/treasury-documents/listofactiveqpds.pdf (last visited Mar. 9, 2023).
5 S. 280.04, F.S. See also ch. 69C-2, F.A.C.
6 S. 280.041(6), F.S.
7 12 U.S.C. § 1821(a)(1)(E).
8 S. 280.07, F.S.
9 Ss. 280.02(10) and 280.041(1)(a), F.S.
10 S. 280.041(1)(a), F.S.
11 S. 280.041(1)(b), F.S.
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CFO’s custody arrangement for collateral deposited in the CFO’s name, subject to certain
requirements;12
Federal Home Loan Bank letter of credit arrangement for collateral issued with the CFO as
beneficiary, subject to certain requirements.13
DFS oversees the Act’s reporting and collateral pledging requirements through its public deposits program
and Bureau of Collateral Management.14 The CFO has authority to act against noncompliant QPDs, as well
as financial institutions that accept public deposits without a certificate of qualification from the CFO.15 In
the event of loss to public depositors, the CFO has the authority to oversee the payment of losses. 16
Regulation of Credit Unions
Like banks, savings banks, and savings associations, credit union accept deposits and make loans, and
can be state-chartered or federally-chartered:
State-chartered credit unions may be formed under the Florida Credit Union Act (FCUA), which
became law in 1980.17 The FCUA provides that “[a] credit union is a cooperative, nonprofit
association, organized . . . for the purposes of encouraging thrift among its members, creating
sources of credit at fair and reasonable rates of interest, and providing an opportunity for its
members to use and control their resources on a democratic basis in order to improve their
economic and social condition.”18 State-chartered credit unions have both a state regulator, the
Office of Financial Regulation, and a federal regulator, the National Credit Union Association
(NCUA).
Federally-chartered credit unions are chartered under the Federal Credit Union Act of 1934 19 and
are regulated by the NCUA.
In addition to regulating both state-chartered and federally-chartered credit unions, the NCUA also
operates and manages the National Credit Union Share Insurance Fund (NCUSIF), which insures share
(deposit) accounts for members of all federally-chartered credit unions and most state-chartered credit
unions.20 All state-chartered credit unions operating in Florida must carry NCUSIF insurance. 21 The
standard maximum share insurance amount is $250,000. 22
Effect of the Bill
The bill makes state-chartered and federally-chartered credit unions eligible to become QPDs and
custodian for another QPD’s pledged collateral. Specifically, the bill creates s. 280.042, F.S., which
provides criteria that a credit union must meet before the CFO can designate a credit union as a QPD.
These criteria are designed to protect public deposits.
Collateral Agreements
The bill requires a credit union QPD to submit its agreement of contingent liability and its collateral
agreement to the CFO and meet the following requirements:
12 S. 280.041(1)(c), F.S.
13 S. 280.041(1)(d), F.S.
14 Ch. 80-258, Laws of Fla.; codified at ch. 657, F.S.
15 S. 280.05, F.S.
16 Id. at (10).
17 Ch. 80-258, Laws of Fla.; codified at ch. 657, F.S.
18 S. 657.003, F.S.
19 Public Law 73-467, codified at 12 U.S.C. § 1751 et seq.
20 Federally-chartered credit unions must be insured through NCUSIF, and state-chartered credit unions may be insured
through NCUSIF, though some state-chartered credit unions may be insured by private insurance or guaranty
corporations. See NCUA, How Your Accounts Are Federally Insured, available at
https://www.ncua.gov/files/publications/guides-manuals/NCUAHowY ourAcctInsured.pdf (last visited Mar. 10, 2023).
21 Ss. 657.005(7), 657.008(5)(a)2., and 657.033(9), F.S.
22 NCUA, supra note 21.
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The credit union must submit a signed statement from a public depositor (i.e., a state or local
government) indicating that, if the credit union is designated as a QPD, the public depositor intends
to deposit public funds with the credit union; and
There are at least four other credit unions that are designated as QPDs or have applied to be
designated as QPDs and have submitted an agreement of contingent liability, a collateral
agreement, and a signed statement from a public depositor of intent to deposit public funds with the
credit union.
The CFO must withdraw from a collateral agreement previously entered into with a credit union if, during
any 90 calendar days, the combined total of the number of credit unions designated as QPDs and the
number of eligible credit unions applying to be designated as QPDs is less than five. As a result of the
CFO’s withdrawal, the credit union loses its designation as a QPD, and must within 10 days after the
CFO’s notification of such withdrawal, return all public deposits that the credit union holds to the public
depositor who deposited the funds. Additionally, the CFO may limit the amount of public deposits any one
credit union may hold in order to make sure that no single credit union holds an amount of public deposits
that might adversely affect the integrity of the public deposits program.
Shared Contingent Liability
In order to prevent credit unions from sharing contingent liability with banks, and vice versa, the bill creates
separate mutual responsibility and contingent liability provisions for credit unions. Any credit union that is
designated as a QPD and that is not insolvent must guarantee public depositors against loss caused by the
default or insolvency of other credit unions that are designated as QPDs.
In the event of a default or insolvency of a credit union QPD, any loss to public depositors would be
satisfied through any applicable share insurance and then through demanding payment under letters of
credit or the sale of collateral pledged or deposited by the defaulting depository. The CFO may assess
QPDs, subject to the segregation of contingent liability provided in s. 280.07, F.S., for the total loss if the
demand for payment or sale of collateral cannot be accomplished within 7 business days.
Segregation of Penalties; Public Deposit Program
The bill requires the CFO to segregate and separately account for any collateral proceeds, assessments,
or administrative penalties attributable to a credit union from those attributable to any bank, savings bank,
or savings association. Subject to this segregation of funds requirement, the CFO is authorized to pay any
losses to public depositors from the Public Deposits Trust Fund.
Lastly, the bill makes conforming changes to allow credit unions to participate in the public deposit program
and to subject credit union QPDs to the regulatory oversight of the CFO.
B. SECTION DIRECTORY:
Section 1. Amends s. 17.68, F.S., relating to Financial Literacy Program for Individuals with
Developmental Disabilities.
Section 2. Amends s. 280.02, F.S., relating to definitions.
Section 3. Amends s. 280.03, F.S., relating to public deposits to be secured; prohibitions;
exemptions.
Section 4. Creates s. 280.042, F.S., relating to credit union designations as qualified public
depositories; withdrawal by the Chief Financial Officer from collateral agreements;
limits on public deposits.
Section 5. Amends s. 280.05, F.S., relating to powers and duties of the Chief Financial Officer.
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Section 6. Amends s. 280.052, F.S., relating to order of suspension or disqualification;
procedure.
Section 7. Amends s. 280.053, F.S., relating to period of suspension or disqualification;
obligations during period; reinstatement.
Section 8. Amends s. 280.055, F.S., relating to cease and desist order; corrective order;
administrative penalty.
Section 9. Amends s. 280.07, F.S., relating to mutual responsibility and contingent liability.
Section 10. Amends s. 280.08, F.S., relating to procedure for payment of losses.
Section 11. Amends s. 280.085, F.S., relating to notice to claimants.
Section 12. Amends s. 280.09, F.S., relating to Public Deposits Trust Fund.
Section 13. Amends s. 280.10, F.S., relating to effect of merger, acquisition, or consolidation;
change of name or address.
Section 14. Amends s. 280.13, F.S., relating to eligible collateral.
Section 15. Amends s. 280.17, F.S., relating to requirements for public depositors; notice to public
depositors and governmental units; loss of protection.
Sections 16-33. Reenacts various sections of statutes to incorporate amendments to ch. 280, F.S.
Section 34. 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:
According to DFS, allowing credit unions to be QPDs will require $269,828 for workload and
programming costs:23
$188,650 in non-recurring expenditures for DFS’s Office of Information Technology (OIT) to
make:
o Significant programming changes to the Collateral Administration Program (CAP), a
computer application used to administer Florida’s public deposits program.
o Modifications to the Florida Planning Accounting, and Ledger Management (PALM)
system to accommodate the required segregated accounting of collateral proceeds,
assessments, or administrative penalties attributable to credit unions.
$5,728 in recurring expenditures for independent ranking service data on credit unions.
$75,450 in recurring expenditures for one additional Financial Examiner/Analyst II FTE, class
code 1564, pay grade 023.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
23 Email from Austin Stowers, Director of Legislative Affairs, Florida Department of Financial Services, RE: HB 987 –
Public Deposits (Mar. 23, 2023).
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1. Revenues:
The bill’s impact on local government revenues is indeterminate. However, a 2014 study by the
Office of Program Policy Analysis and Government Accountability explained the potential positive
impact to local government public depositors:
Federal and state tax differences between credit unions and banks may allow credit unions a
competitive advantage when bidding for local government public deposits. Credit unions may
also benefit from lower overhead costs since these institutions may use office space belonging
to a sponsoring organization. The combined effect of lower taxes and overhead may allow credit
unions to pay higher interest rates for public deposits and to provide other business services to
local governments at a lower cost than banks.24
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Allowing credit unions to accept public deposits may generate additional income for the credit unions
and provide more options for the public depositors. It is unclear what impact the bill will have on existing
QPDs (banks, savings banks, or savings associations). The bill’s impact on the private sector is
indeterminate due to the number of variables involved in determining such impact.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The CFO has rulemaking authority to administer ch. 280, F.S. To add credit unions as QPDs,
rulemaking is necessary to amend ch. 69C-2, F.A.C., and several forms incorporated by reference in
the rules.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
24 Office of Program Policy Analysis and Government Accountability, Issues Related to Credit Unions Operating as
Qualified Public Depositories, Nov. 13, 2014, at 5.
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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 987 2023
1 A bill to be entitled
2 An act relating to public deposits; amending s. 17.68,
3 F.S.; providing requirements for credit unions that
4 are qualified public depositories; requiring the
5 Department of Financial Services to provide its
6 brochures to such credit unions upon request; amending
7 s. 280.02, F.S.; revising definitions; amending s.
8 280.03, F.S.; providing that public deposits in credit
9 unions by specified trust departments or trust
10 companies are exempt from certain requirements and
11 protection; creating s. 280.042, F.S.; prohibiting the
12 Chief Financial Officer from designating credit unions
13 as qualified public depositories unless certain
14 requirements are met; requiring the Chief Financial
15 Officer to withdraw from specified collateral
16 agreements under certain circumstances; prohibiting
17 credit unions from being designated as qualified
18 public depositories if the Chief Financial Officer
19 withdraws from collateral agreements; requiring
20 specified credit unions to return all public deposits
21 in the credit unions within a specified timeframe
22 under certain circumstances; authorizing the Chief
23 Financial Officer to limit the amount of public
24 deposits in credit unions for a specified purpose;
25 amending s. 280.05, F.S.; revising the losses for
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HB 987 2023
26 which the Chief Financial Officer may sell securities
27 to protect the integrity of the public deposits
28 program; amending s. 280.052, F.S.; providing
29 requirements for the suspension or disqualification of
30 credit unions as qualified public depositories;
31 amending s. 280.053, F.S.; authorizing credit unions
32 to be reinstated, or to reapply for qualification, as
33 qualified public depositories under specified
34 circumstances; providing exceptions; amending s.
35 280.055, F.S.; authorizing the Chief Financial Officer
36 to issue a cease and desist order and a corrective
37 order to credit unions upon certain determinations;
38 providing penalties; amending s. 280.07, F.S.;
39 specifying the losses against which certain solvent
40 banks, savings banks, savings associations, and credit
41 unions must guarantee public depositors; amending s.
42 280.08, F.S.; revising the Chief Financial Officer's
43 procedures upon a default or insolvency of a qualified
44 public depository; amending s. 280.085, F.S.; revising
45 the exemptions to the notice to claimants upon a
46 default or insolvency of a qualified public
47 depository; amending s. 280.09, F.S.; requiring the
48 Chief Financial Officer to segregate and separately
49 account for certain proceeds, assessments, and
50 administrative penalties; revising the payment of any
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51 losses to public depositors; amending s. 280.10, F.S.;
52 revising the duties, responsibilities, and liabilities
53 of resulting institutions upon specified mergers,
54 acquisitions, and consolidations; amending s. 280.13,
55 F.S.; providing that the limits imposed on specified
56 securities apply to qualified public depositories,
57 rather than to banks and savings associations;
58 amending s. 280.17, F.S.; revising the evidence that
59 public depositors must submit when in default or
60 insolvent; reenacting ss. 17.57(7)(a), 24.114(1),
61 125.901(3)(e), 136.01, 159.608(11), 175.301,
62 175.401(8), 185.30, 185.50(8), 190.007(3),
63 191.006(16), 215.34(2), 218.415(16)(c), (17)(c), and
64 (23)(a), 255.502(4)(h), 331.309(1) and (2),
65 373.553(2), 631.221, and 723.06115(3)(c), F.S.,
66 relating to deposits and investments of state money;
67 bank deposits and control of lottery transactions;
68 children's services and independent special districts;
69 county depositories; powers of housing finance
70 authorities; depositories for pension funds; retiree
71 health insurance subsidies; depositories for
72 retirement funds; retiree health insurance subsidies;
73 board of supervisors; general powers; state funds and
74 noncollectible items; local government investment
75 policies; definitions; treasurer, depositories, and
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76 fiscal agent; treasurer of the board, payment of
77 funds, and depositories; deposit of moneys collected;
78 and the Florida Mobile Home Relocation Trust Fund,
79 respectively, to incorporate the amendments made by
80 the act; providing an effective date.
81
82 Be It Enacted by the Legislature of the State of Florida:
83
84 Section 1. Subsection (4) of section 17.68, Florida
85 Statutes, is amended to read:
86 17.68 Financial Literacy Program for Individuals with
87 Developmental Disabilities.—
88 (4) Within 90 days after the department establishes the
89 website clearinghouse and publishes the brochure, each bank,
90 credit union, savings association, and savings bank that is a
91 qualified public depository as defined in s. 280.02 shall:
92 (a) Make copies of the department's brochures available,
93 upon the request of the consumer, at its principal place of
94 business and each branch office located in this state which has
95 in-person teller services by having copies of the brochure
96 available or having the capability to print a copy of the
97 brochure from the department's website. Upon request, the
98 department shall provide copies of the brochure to a bank,
99 credit union, savings association, or savings bank.
100 (b) Provide on its website a hyperlink to the department's
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101 website clearinghouse. If the department changes the website
102 address for the clearinghouse, the bank, credit union, savings
103 association, or savings bank must update the hyperlink within 90
104 days after notification by the department of such change.
105 Section 2. Subsections (6), (10), (21), (23), and (26) of
106 section 280.02, Florida Statutes, are amended to read:
107 280.02 Definitions.—As used in this chapter, the term:
108 (6) "Capital account" or "tangible equity capital" means
109 total equity capital, as defined on the balance-sheet portion of
110 the Consolidated Reports of Condition and Income (call report),
111 or net worth, as described in the National Credit Union
112 Administration 5300 Call Report, less intangible assets, as
113 submitted to the regulatory financial banking authority.
114 (10) "Custodian" means the Chief Financial Officer or a
115 bank, credit union, savings association, or trust company that:
116 (a) Is organized and existing under the laws of this
117 state, any other state, or the United States;
118 (b) Has executed all forms required under this chapter or
119 any rule adopted hereunder;
120 (c) Agrees to be subject to the jurisdiction of the courts
121 of this state, or of the courts of the United States which are
122 located within this state, for the purpose of any litigation
123 arising out of this chapter; and
124 (d) Has been approved by the Chief Financial Officer to
125 act as a custodian.
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126 (21) "Pool figure" means the total average monthly
127 balances of public deposits held by all banks, savings banks, or
128 savings associations or held separately by all credit unions
129 qualified public depositories during the immediately preceding
130 12-month period.
131 (23) "Public deposit" means the moneys of the state or of
132 any state university, county, school district, community college
133 district, special district, metropolitan government, or
134 municipality, including agencies, boards, bureaus, commissions,
135 and institutions of any of the foregoing, or of any court, and
136 includes the moneys of all county officers, including
137 constitutional officers, which are placed on deposit in a bank,
138 credit union, savings bank, or savings association. This
139 includes, but is not limited to, time deposit accounts, demand
140 deposit accounts, and nonnegotiable certificates of deposit.
141 Moneys in deposit notes and in other nondeposit accounts such as
142 repurchase or reverse repurchase operations are not public
143 deposits. Securities, mutual funds, and similar types of
144 investments are not public deposits and are not subject to this
145 chapter.
146 (26) "Qualified public depository" means a bank, credit
147 union, savings bank, or savings association that:
148 (a) Is organized and exists under the laws of the United
149 States, or the laws of this state, or the laws of any other
150 state or territory of the United States.
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151 (b) Has its principal place of business in this state or
152 has a branch office in this state which is authorized under the
153 laws of this state or of the United States to receive deposits
154 in this state.
155 (c) Is insured by the Federal Deposit Insurance
156 Corporation or the National Credit Union Share Insurance Fund
157 Has deposit insurance pursuant to the Federal Deposit Insurance
158 Act, as amended, 12 U.S.C. ss. 1811 et seq.
159 (d) Has procedures and practices for accurate
160 identification, classification, reporting, and collateralization
161 of public deposits.
162 (e) Meets all the requirements of this chapter.
163 (f) Has been designated by the Chief Financial Officer as
164 a qualified public depository.
165 Section 3. Paragraph (a) of subsection (3) of section
166 280.03, Florida Statutes, is amended to read:
167 280.03 Public deposits to be secured; prohibitions;
168 exemptions.—
169 (3) The following are exempt from the requirements of, and
170 protection under, this chapter:
171 (a) Public deposits deposited in a bank, credit union, or
172 savings association by a trust department or trust company which
173 are fully secured under trust business laws.
174 Section 4. Section 280.042, Florida Statutes, is created
175 to read:
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176 280.042 Credit union designations as qualified public
177 depositories; withdrawal by the Chief Financial Officer from
178 collateral agreements; limits on public deposits.—
179 (1) The Chief Financial Officer may not designate a credit
180 union as a qualified public depository unless, at the time the
181 credit union submits its agreement of contingent liability and
182 its collateral agreement:
183 (a) The credit union submits a signed statement from a
184 public depositor indicating that if the credit union is
185 designated as a qualified public depository, the public
186 depositor intends to deposit public funds with the credit union.
187 (b) The combined total of the numbers in subparagraphs 1.
188 and 2. is at least four:
189 1. The number of credit unions designated as qualified
190 public depositories.
191 2. The number of credit unions that meet all of the
192 following requirements:
193 a. Apply to be designated as qualified public
194 depositories.
195 b. Meet the requirements in paragraph (a).
196 (2) The Chief Financial Officer must withdraw from a
197 collateral agreement previously entered into with a credit union
198 if, during any 90 calendar days, the combined total of the
199 number of credit unions designated as qualified public
200 depositories and the number of eligible credit unions applying
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201 to be designated as qualified public depositories is less than
202 five.
203 (3) A credit union that is a party to a collateral
204 agreement from which the Chief Financial Officer withdraws in
205 accordance with subsection (2) may no longer be designated as a
206 qualified public depository. Within 10 business days after the
207 Chief Financial Officer notifies the credit union that the Chief
208 Financial Officer has withdrawn from the collateral agreement,
209 the credit union must return all public deposits that the credit
210 union holds to the public depositor who deposited the funds. The
211 notice provided for in this subsection may be sent to a credit
212 union by regular mail or by e-mail.
213 (4) The Chief Financial Officer may limit the amount of
214 public deposits that a credit union may hold in order to make
215 sure that no single credit union holds an amount of public
216 deposits that might adversely affect the integrity of the public
217 deposits program.
218 Section 5. Subsection (11) of section 280.05, Florida
219 Statutes, is amended to read:
220 280.05 Powers and duties of the Chief Financial Officer.—
221 In fulfilling the requirements of this act, the Chief Financial
222 Officer has the power to take the following actions he or she
223 deems necessary to protect the integrity of the public deposits
224 program:
225 (11) Sell securities for the purpose of paying losses to
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226 public depositors not covered by deposit or share insurance.
227 Section 6. Subsection (1) of section 280.052, Florida
228 Statutes, is amended to read:
229 280.052 Order of suspension or disqualification;
230 procedure.—
231 (1) The suspension or disqualification of a bank, credit
232 union, or savings association as a qualified public depository
233 must be by order of the Chief Financial Officer and must be
234 mailed to the qualified public depository by registered or
235 certified mail.
236 Section 7. Paragraph (c) of subsection (1) and paragraph
237 (c) of subsection (2) of section 280.053, Florida Statutes, are
238 amended to read:
239 280.053 Period of suspension or disqualification;
240 obligations during period; reinstatement.—
241 (1)
242 (c) Upon expiration of the suspension period, the bank ,
243 credit union, or savings association may, by order of the Chief
244 Financial Officer, be reinstated as a qualified public
245 depository, unless the cause of the suspension has not been
246 corrected or the bank, credit union, or savings association is
247 otherwise not in compliance with this chapter or any rule
248 adopted pursuant to this chapter.
249 (2)
250 (c) Upon expiration of the disqualification period, the
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251 bank, credit union, or savings association may reapply for
252 qualification as a qualified public depository. If a
253 disqualified bank, credit union, or savings association is
254 purchased or otherwise acquired by new owners, it may reapply to
255 the Chief Financial Officer to be a qualified public depository
256 before prior to the expiration date of the disqualification
257 period. Redesignation as a qualified public depository may occur
258 only after the Chief Financial Officer has determined that all
259 requirements for holding public deposits under the law have been
260 met.
261 Section 8. Section 280.055, Florida Statutes, is amended
262 to read:
263 280.055 Cease and desist order; corrective order;
264 administrative penalty.—
265 (1) The Chief Financial Officer may issue a cease and
266 desist order and a corrective order upon determining that:
267 (a) A qualified public depository has requested and
268 obtained a release of pledged collateral without approval of the
269 Chief Financial Officer;
270 (b) A bank, credit union, savings association, or other
271 financial institution is holding public deposits without a
272 certificate of qualification issued by the Chief Financial
273 Officer;
274 (c) A qualified public depository pledges, deposits, or
275 arranges for the issuance of unacceptable collateral;
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276 (d) A custodian has released pledged collateral without
277 approval of the Chief Financial Officer;
278 (e) A qualified public depository or a custodian has not
279 furnished to the Chief Financial Officer, when the Chief
280 Financial Officer requested, a power of attorney or bond power
281 or bond assignment form required by the bond agent or bond
282 trustee for each issue of registered certificated securities
283 pledged and registered in the name, or nominee name, of the
284 qualified public depository or custodian; or
285 (f) A qualified public depository; a bank, credit union,
286 savings association, or other financial institution; or a
287 custodian has committed any other violation of this chapter or
288 any rule adopted pursuant to this chapter that the Chief
289 Financial Officer determines may be remedied by a cease and
290 desist order or corrective order.
291 (2) Any qualified public depository or other bank, credit
292 union, savings association, or financial institution or
293 custodian that violates a cease and desist order or corrective
294 order of the Chief Financial Officer is subject to an
295 administrative penalty not exceeding $1,000 for each violation
296 of the order. Each day the violation of the order continues
297 constitutes a separate violation.
298 Section 9. Section 280.07, Florida Statutes, is amended to
299 read:
300 280.07 Mutual responsibility and contingent liability. —
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301 (1) A Any bank, savings bank, or savings association that
302 is designated as a qualified public depository and that is not
303 insolvent shall guarantee public depositors against loss caused
304 by the default or insolvency of other banks, savings banks, or
305 savings associations that are designated as qualified public
306 depositories.
307 (2) A credit union that is designated as a qualified
308 public depository and that is not insolvent shall guarantee
309 public depositors against loss caused by the default or
310 insolvency of other credit unions that are designated as
311 qualified public depositories.
312
313 Each qualified public depository shall execute a form prescribed
314 by the Chief Financial Officer for such guarantee which must
315 shall be approved by the board of directors and must shall
316 become an official record of the institution.
317 Section 10. Subsections (1) and (3) of section 280.08,
318 Florida Statutes, are amended to read:
319 280.08 Procedure for payment of losses.—When the Chief
320 Financial Officer determines that a default or insolvency has
321 occurred, he or she shall provide notice as required in s.
322 280.085 and implement the following procedures:
323 (1) The Division of Treasury, in cooperation with the
324 Office of Financial Regulation of the Financial Services
325 Commission or the receiver of the qualified public depository in
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326 default, shall ascertain the amount of funds of each public
327 depositor on deposit at such depository and the amount of
328 deposit or share insurance applicable to such deposits.
329 (3)(a) The loss to public depositors shall be satisfied,
330 insofar as possible, first through any applicable deposit or
331 share insurance and then through demanding payment under letters
332 of credit or the sale of collateral pledged or deposited by the
333 defaulting depository. The Chief Financial Officer may assess
334 qualified public depositories as provided in paragraph (b) ,
335 subject to the segregation of contingent liability in s. 280.07,
336 for the total loss if the demand for payment or sale of
337 collateral cannot be accomplished within 7 business days.
338 (b) The Chief Financial Officer shall provide coverage of
339 any remaining loss by assessment against the other qualified
340 public depositories. The Chief Financial Officer shall determine
341 such assessment for each qualified public depository by
342 multiplying the total amount of any remaining loss to all public
343 depositors by a percentage which represents the average monthly
344 balance of public deposits held by each qualified public
345 depository during the previous 12 months divided by the total
346 average monthly balances of public deposits held by all
347 qualified public depositories, excluding the defaul ting
348 depository, during the same period. The assessment calculation
349 must shall be computed to six decimal places.
350 Section 11. Subsection (4) of section 280.085, Florida
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351 Statutes, is amended, and subsection (1) of that section is
352 republished, to read:
353 280.085 Notice to claimants.—
354 (1) Upon determining the default or insolvency of a
355 qualified public depository, the Chief Financial Officer shall
356 notify, by first-class mail, all public depositors that have
357 complied with s. 280.17 of such default or insolvency. The
358 notice must direct all public depositors having claims or
359 demands against the Public Deposits Trust Fund occasioned by the
360 default or insolvency to file their claims with the Chief
361 Financial Officer within 30 days after the date of the notice.
362 (4) The notice required in subsection (1) is not required
363 if the default or insolvency of a qualified public depository is
364 resolved in a manner in which all Florida public deposits are
365 acquired by another insured bank, credit union, savings bank, or
366 savings association.
367 Section 12. Section 280.09, Florida Statutes, is amended
368 to read:
369 280.09 Public Deposits Trust Fund.—
370 (1) In order to facilitate the administration of this
371 chapter, there is created the Public Deposits Trust Fund,
372 hereafter in this section designated "the fund." The proceeds
373 from the sale of securities or draw on letters of credit held as
374 collateral or from any assessment pursuant to s. 280.08 must
375 shall be deposited into the fund. The Chief Financial Officer
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376 must segregate and separately account for any collateral
377 proceeds, assessments, or administrative penalties attributable
378 to a credit union from any collateral proceeds, assessments, or
379 administrative penalties attributable to any bank, savings bank,
380 or savings association. Any administrative penalty collected
381 pursuant to this chapter shall be deposited into the Treasury
382 Administrative and Investment Trust Fund.
383 (2) The Chief Financial Officer is authorized to pay any
384 losses to public depositors from the fund, subject to the
385 limitations provided in subsection (1), and there are hereby
386 appropriated from the fund such sums as may be necessary from
387 time to time to pay the losses. The term "losses," for purposes
388 of this chapter, must shall also include losses of interest or
389 other accumulations to the public depositor as a result of
390 penalties for early withdrawal required by Depository
391 Institution Deregulatory Commission Regulations or applicable
392 successor federal laws or regulations because of suspension or
393 disqualification of a qualified public depository by the Chief
394 Financial Officer pursuant to s. 280.05 or because of withdrawal
395 from the public deposits program pursuant to s. 280.11. In that
396 event, the Chief Financial Officer is authorized to assess
397 against the suspended, disqualified, or withdrawing public
398 depository, in addition to any amount authorized by any other
399 provision of this chapter, an administrative penalty equal to
400 the amount of the early withdrawal penalty and to pay that
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401 amount over to the public depositor as reimbursement for such
402 loss. Any money in the fund estimated not to be needed for
403 immediate cash requirements shall be invested pursuant to s.
404 17.61.
405 Section 13. Subsections (1) and (3) of section 280.10,
406 Florida Statutes, are amended to read:
407 280.10 Effect of merger, acquisition, or consolidation;
408 change of name or address.—
409 (1) When a qualified public depository is merged into,
410 acquired by, or consolidated with a bank, credit union, savings
411 bank, or savings association that is not a qualified public
412 depository:
413 (a) The resulting institution shall automatically become a
414 qualified public depository subject to the requirements of the
415 public deposits program.
416 (b) The contingent liability of the former institution
417 shall be a liability of the resulting institution.
418 (c) The public deposits and associated collateral of the
419 former institution shall be public deposits and collateral of
420 the resulting institution.
421 (d) The resulting institution shall, within 90 calendar
422 days after the effective date of the merger, acquisition, or
423 consolidation, deliver to the Chief Financial Officer:
424 1. Documentation in its name as required for participation
425 in the public deposits program; or
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426 2. Written notice of intent to withdraw from the program
427 as provided in s. 280.11 and a proposed effective date of
428 withdrawal which shall be within 180 days after the effective
429 date of the acquisition, merger, or consolidation of the former
430 institution.
431 (e) If the resulting institution does not meet
432 qualifications to become a qualified public depository or does
433 not submit required documentation within 90 calendar days after
434 the effective date of the merger, acquisition, or consolidation,
435 the Chief Financial Officer shall initiate mandatory withdrawal
436 actions as provided in s. 280.11 and shall set an effective date
437 of withdrawal that is within 180 days after the effective date
438 of the acquisition, merger, or consolidation of the former
439 institution.
440 (3) If the default or insolvency of a qualified public
441 depository results in acquisition of all or part of its Florida
442 public deposits by a bank, credit union, savings bank, or
443 savings association that is not a qualified public depository,
444 the bank, credit union, savings bank, or savings association
445 acquiring the Florida public deposits is subject to subsection
446 (1).
447 Section 14. Subsection (1) of section 280.13, Florida
448 Statutes, is amended to read:
449 280.13 Eligible collateral.—
450 (1) Securities eligible to be pledged as collateral by
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451 qualified public depositories banks and savings associations
452 shall be limited to:
453 (a) Direct obligations of the United States Government.
454 (b) Obligations of any federal agency that are fully
455 guaranteed as to payment of principal and interest by the United
456 States Government.
457 (c) Obligations of the following federal agencies:
458 1. Farm credit banks.
459 2. Federal land banks.
460 3. The Federal Home Loan Bank and its district banks.
461 4. Federal intermediate credit banks.
462 5. The Federal Home Loan Mortgage Corporation.
463 6. The Federal National Mortgage Association.
464 7. Obligations guaranteed by the Government National
465 Mortgage Association.
466 (d) General obligations of a state of the United States,
467 or of Puerto Rico, or of a political subdivision or municipality
468 thereof.
469 (e) Obligations issued by the Florida State Board of
470 Education under authority of the State Constitution or
471 applicable statutes.
472 (f) Tax anticipation certificates or warrants of counties
473 or municipalities having maturities not exceeding 1 year.
474 (g) Public housing authority obligations.
475 (h) Revenue bonds or certificates of a state of the United
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476 States or of a political subdivision or municipality thereof.
477 (i) Corporate bonds of any corporation that is not an
478 affiliate or subsidiary of the qualified public depository.
479 Section 15. Paragraph (b) of subsection (4) of section
480 280.17, Florida Statutes, is amended to read:
481 280.17 Requirements for public depositors; notice to
482 public depositors and governmental units; loss of protection. —In
483 addition to any other requirement specified in this chapter,
484 public depositors shall comply with the following:
485 (4) If public deposits are in a qualified public
486 depository that has been declared to be in default or insolvent,
487 each public depositor shall:
488 (b) Submit to the Chief Financial Officer for each public
489 deposit, within 30 days after the date of official notification
490 from the Chief Financial Officer, the following:
491 1. A claim form and agreement, as prescribed by the Chief
492 Financial Officer, executed under oath, accompanied by proof of
493 authority to execute the form on behalf of the public depositor.
494 2. A completed public deposit identification and
495 acknowledgment form, as described in subsection (2).
496 3. Evidence of the insurance afforded the deposit pursuant
497 to the Federal Deposit Insurance Act or the Federal Credit Union
498 Act, as appropriate.
499 Section 16. For the purpose of incorporating the amendment
500 made by this act to section 280.02, Florida Statutes, in a
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501 reference thereto, paragraph (a) of subsection (7) of section
502 17.57, Florida Statutes, is reenacted to read:
503 17.57 Deposits and investments of state money.—
504 (7) In addition to the deposits authorized under this
505 section and notwithstanding any other provisions of law, funds
506 that are not needed to meet the disbursement needs of the state
507 may be deposited by the Chief Financial Officer in accordance
508 with the following conditions:
509 (a) The funds are initially deposited in a qualified
510 public depository, as defined in s. 280.02, selected by the
511 Chief Financial Officer.
512 Section 17. For the purpose of incorporating the amendment
513 made by this act to section 280.02, Florida Statutes, in a
514 reference thereto, subsection (1) of section 24.114, Florida
515 Statutes, is reenacted to read:
516 24.114 Bank deposits and control of lottery transactions.—
517 (1) All moneys received by each retailer from the
518 operation of the state lottery, including, but not limited to,
519 all ticket sales, interest, gifts, and donations, less the
520 amount retained as compensation for the sale of the tickets and
521 the amount paid out as prizes, shall be remitted to the
522 department or deposited in a qualified public depository, as
523 defined in s. 280.02, as directed by the department. The
524 department shall have the responsibility for all administrative
525 functions related to the receipt of funds. The department may
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526 also require each retailer to file with the department reports
527 of the retailer's receipts and transactions in the sale of
528 lottery tickets in such form and containing such information as
529 the department may require. The department may require any
530 person, including a qualified public depository, to perform any
531 function, activity, or service in connection with the operation
532 of the lottery as it may deem advisable pursuant to this act and
533 rules of the department, and such functions, activities, or
534 services shall constitute lawful functions, activities, and
535 services of such person.
536 Section 18. For the purpose of incorporating the amendment
537 made by this act to section 280.02, Florida Statutes, in a
538 reference thereto, paragraph (e) of subsection (3) of section
539 125.901, Florida Statutes, is reenacted to read:
540 125.901 Children's services; independent special district;
541 council; powers, duties, and functions; public records
542 exemption.—
543 (3)
544 (e)1. All moneys received by the council on children's
545 services shall be deposited in qualified public depositories, as
546 defined in s. 280.02, with separate and distinguishable accounts
547 established specifically for the council and shall be withdrawn
548 only by checks signed by the chair of the council and
549 countersigned by either one other member of the council on
550 children's services or by a chief executive officer who shall be
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551 so authorized by the council.
552 2. Upon entering the duties of office, the chair and the
553 other member of the council or chief executive officer who signs
554 its checks shall each give a surety bond in the sum of at least
555 $1,000 for each $1 million or portion thereof of the council's
556 annual budget, which bond shall be conditioned that each shall
557 faithfully discharge the duties of his or her office. The
558 premium on such bond may be paid by the district as part of the
559 expense of the council. No other member of the council shall be
560 required to give bond or other security.
561 3. No funds of the district shall be expended except by
562 check as aforesaid, except expenditures from a petty cash
563 account which shall not at any time exceed $100. All
564 expenditures from petty cash shall be recorded on the books and
565 records of the council on children's services. No funds of the
566 council on children's services, excepting expenditures from
567 petty cash, shall be expended without prior approval of the
568 council, in addition to the budgeting thereof.
569 Section 19. For the purpose of incorporating the amendment
570 made by this act to section 280.02, Florida Statutes, in a
571 reference thereto, section 136.01, Florida Statutes, is
572 reenacted to read:
573 136.01 County depositories.—Each county depository shall
574 be a qualified public depository as defined in s. 280.02 for the
575 following funds: county funds; funds of all county officers,
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576 including constitutional officers; funds of the school board;
577 and funds of the community college district board of trustees.
578 This enumeration of funds is made not by way of limitation, but
579 of illustration; and it is the intent hereof that all funds of
580 the county, the board of county commissioners or the several
581 county officers, the school board, or the community college
582 district board of trustees be included.
583 Section 20. For the purpose of incorporating the amendment
584 made by this act to section 280.02, Florida Statutes, in a
585 reference thereto, subsection (11) of section 159.608, Florida
586 Statutes, is reenacted to read:
587 159.608 Powers of housing finance authorities.—A housing
588 finance authority shall constitute a public body corporate a nd
589 politic, exercising the public and essential governmental
590 functions set forth in this act, and shall exercise its power to
591 borrow only for the purpose as provided herein:
592 (11) To invest and reinvest surplus funds of the housing
593 finance authority in accordance with s. 218.415. However, in
594 addition to the investments expressly authorized in s.
595 218.415(16)(a)-(g) and (17)(a)-(d), a housing finance authority
596 may invest surplus funds in interest-bearing time deposits or
597 savings accounts that are fully insured by the Federal Deposit
598 Insurance Corporation regardless of whether the bank or
599 financial institution in which the deposit or investment is made
600 is a qualified public depository as defined in s. 280.02. This
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601 subsection is supplementary to and may not be construed as
602 limiting any powers of a housing finance authority or providing
603 or implying a limiting construction of any other statutory
604 provision.
605 Section 21. For the purpose of incorporating the amendment
606 made by this act to section 280.02, Florida Statutes, in a
607 reference thereto, section 175.301, Florida Statutes, is
608 reenacted to read:
609 175.301 Depository for pension funds.—For any
610 municipality, special fire control district, chapter plan, local
611 law municipality, local law special fire control district, or
612 local law plan under this chapter, all funds of the
613 firefighters' pension trust fund of any chapter plan or local
614 law plan under this chapter may be deposited by the board of
615 trustees with the treasurer of the municipality or special fire
616 control district, acting in a ministerial capacity only, who
617 shall be liable in the same manner and to the same extent as he
618 or she is liable for the safekeeping of funds for the
619 municipality or special fire control district. However, any
620 funds so deposited with the treasurer of the municipality or
621 special fire control district shall be kept in a separate fund
622 by the treasurer or clearly identified as such funds of the
623 firefighters' pension trust fund. In lieu thereof, the board of
624 trustees shall deposit the funds of the firefighters' pension
625 trust fund in a qualified public depository as defined in s.
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626 280.02, which depository with regard to such funds shall conform
627 to and be bound by all of the provisions of chapter 280.
628 Section 22. For the purpose of incorporating the amendment
629 made by this act to section 280.02, Florida Statutes, in
630 references thereto, subsection (8) of section 175.401, Florida
631 Statutes, is reenacted to read:
632 175.401 Retiree health insurance subsidy.—For any
633 municipality, special fire control district, chapter plan, local
634 law municipality, local law special fire control district, or
635 local law plan under this chapter, under the broad grant of home
636 rule powers under the Florida Constitution and chapter 166,
637 municipalities have the authority to establish and administer
638 locally funded health insurance subsidy programs. In addition,
639 special fire control districts may, by resolution, establish and
640 administer locally funded health insurance subsidy programs.
641 Pursuant thereto:
642 (8) DEPOSIT OF HEALTH INSURANCE SUBSIDY FUNDS.—All funds
643 of the health insurance subsidy fund may be deposited by the
644 board of trustees with the treasurer of the municipality or
645 special fire control district, acting in a ministerial capacity
646 only, who shall be liable in the same manner and to the same
647 extent as he or she is liable for the safekeeping of funds for
648 the municipality or special fire control district. Any funds so
649 deposited shall be segregated by the treasurer in a separate
650 fund, clearly identified as funds of the health insurance
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651 subsidy fund. In lieu thereof, the board of trustees shall
652 deposit the funds of the health insurance subsidy fund in a
653 qualified public depository as defined in s. 280.02, which shall
654 conform to and be bound by the provisions of chapter 280 w ith
655 regard to such funds. In no case shall the funds of the health
656 insurance subsidy fund be deposited in any financial
657 institution, brokerage house trust company, or other entity that
658 is not a public depository as provided by s. 280.02.
659 Section 23. For the purpose of incorporating the amendment
660 made by this act to section 280.02, Florida Statutes, in a
661 reference thereto, section 185.30, Florida Statutes, is
662 reenacted to read:
663 185.30 Depository for retirement fund.—For any
664 municipality, chapter plan, local law municipality, or local law
665 plan under this chapter, all funds of the municipal police
666 officers' retirement trust fund of any municipality, chapter
667 plan, local law municipality, or local law plan under this
668 chapter may be deposited by the board of trustees with the
669 treasurer of the municipality acting in a ministerial capacity
670 only, who shall be liable in the same manner and to the same
671 extent as he or she is liable for the safekeeping of funds for
672 the municipality. However, any funds so deposited with the
673 treasurer of the municipality shall be kept in a separate fund
674 by the municipal treasurer or clearly identified as such funds
675 of the municipal police officers' retirement trust fund. In lieu
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676 thereof, the board of trustees shall deposit the funds o f the
677 municipal police officers' retirement trust fund in a qualified
678 public depository as defined in s. 280.02, which depository with
679 regard to such funds shall conform to and be bound by all of the
680 provisions of chapter 280.
681 Section 24. For the purpose of incorporating the amendment
682 made by this act to section 280.02, Florida Statutes, in
683 references thereto, subsection (8) of section 185.50, Florida
684 Statutes, is reenacted to read:
685 185.50 Retiree health insurance subsidy.—For any
686 municipality, chapter plan, local law municipality, or local law
687 plan under this chapter, under the broad grant of home rule
688 powers under the Florida Constitution and chapter 166,
689 municipalities have the authority to establish and administer
690 locally funded health insurance subsidy programs. Pursuant
691 thereto:
692 (8) DEPOSIT OF PENSION FUNDS.—All funds of the health
693 insurance subsidy fund may be deposited by the board of trustees
694 with the treasurer of the municipality, acting in a ministerial
695 capacity only, who shall be liable in the same manner and to the
696 same extent as he or she is liable for the safekeeping of funds
697 for the municipality. Any funds so deposited shall be segregated
698 by said treasurer in a separate fund, clearly identified as
699 funds of the health insurance subsidy fund. In lieu thereof, the
700 board of trustees shall deposit the funds of the health
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701 insurance subsidy fund in a qualified public depository as
702 defined in s. 280.02, which shall conform to and be bound by the
703 provisions of chapter 280 with regard to such funds. In no case
704 shall the funds of the health insurance subsidy fund be
705 deposited in any financial institution, brokerage house trust
706 company, or other entity that is not a public depository as
707 provided by s. 280.02.
708 Section 25. For the purpose of incorporating the amendment
709 made by this act to section 280.02, Florida Statutes, in a
710 reference thereto, subsection (3) of section 190.007, Florida
711 Statutes, is reenacted to read:
712 190.007 Board of supervisors; general duties.—
713 (3) The board is authorized to select as a depository for
714 its funds any qualified public depository as defined in s.
715 280.02 which meets all the requirements of chapter 280 and has
716 been designated by the Chief Financial Officer as a qualified
717 public depository, upon such terms and conditions as to the
718 payment of interest by such depository upon the funds so
719 deposited as the board may deem just and reasonable.
720 Section 26. For the purpose of incorporating the amendment
721 made by this act to section 280.02, Florida Statutes, in a
722 reference thereto, subsection (16) of section 191.006, Florida
723 Statutes, is reenacted to read:
724 191.006 General powers.—The district shall have, and the
725 board may exercise by majority vote, the following powers:
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726 (16) To select as a depository for its funds any qualified
727 public depository as defined in s. 280.02 which meets all the
728 requirements of chapter 280 and has been designated by the Chief
729 Financial Officer as a qualified public depository, upon such
730 terms and conditions as to the payment of interest upon the
731 funds deposited as the board deems just and reasonable.
732 Section 27. For the purpose of incorporating the amendment
733 made by this act to section 280.02, Florida Statutes, in a
734 reference thereto, subsection (2) of section 215.34, Florida
735 Statutes, is reenacted to read:
736 215.34 State funds; noncollectible items; procedure. —
737 (2) Whenever a check, draft, or other order for the
738 payment of money is returned by the Chief Financial Officer, or
739 by a qualified public depository as defined in s. 280.02, to a
740 state officer, a state agency, or the judicial branch for
741 collection, the officer, agency, or judicial branch shall add to
742 the amount due a service fee of $15 or 5 percent of the face
743 amount of the check, draft, or order, whichever is greater. An
744 agency or the judicial branch may adopt a rule which prescribes
745 a lesser maximum service fee, which shall be added to the amount
746 due for the dishonored check, draft, or other order tendered for
747 a particular service, license, tax, fee, or other charge, but in
748 no event shall the fee be less than $15. The service fee shall
749 be in addition to all other penalties imposed by law, except
750 that when other charges or penalties are imposed by an agency
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751 related to a noncollectible item, the amount of the service fee
752 shall not exceed $150. Proceeds from this fee shall be deposited
753 in the same fund as the collected item. Nothing in this section
754 shall be construed as authorization to deposit moneys outside
755 the State Treasury unless specifically authorized by law.
756 Section 28. For the purpose of incorporating the amendment
757 made by this act to section 280.02, Florida Statutes, in
758 references thereto, paragraph (c) of subsection (16), paragraph
759 (c) of subsection (17), and paragraph (a) of subsection (23) of
760 section 218.415, Florida Statutes, are reenacted to read:
761 218.415 Local government investment policies.—Investment
762 activity by a unit of local government must be consistent with a
763 written investment plan adopted by the governing body, or in the
764 absence of the existence of a governing body, the respective
765 principal officer of the unit of local government and maintained
766 by the unit of local government or, in the alternative, such
767 activity must be conducted in accordance with subsection (17).
768 Any such unit of local government shall have an investment
769 policy for any public funds in excess of the amounts needed to
770 meet current expenses as provided in subsections (1)-(16), or
771 shall meet the alternative investment guidelines contained in
772 subsection (17). Such policies shall be structured to place the
773 highest priority on the safety of principal and liquidity of
774 funds. The optimization of investment returns shall be secondary
775 to the requirements for safety and liquidity. Each unit of local
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776 government shall adopt policies that are commensurate with the
777 nature and size of the public funds within its custody.
778 (16) AUTHORIZED INVESTMENTS; WRITTEN INVESTMENT POLICIES. —
779 Those units of local government electing to adopt a written
780 investment policy as provided in subsections (1)-(15) may by
781 resolution invest and reinvest any surplus public funds in their
782 control or possession in:
783 (c) Interest-bearing time deposits or savings accounts in
784 qualified public depositories as defined in s. 280.02.
785 (17) AUTHORIZED INVESTMENTS; NO WRITTEN INVESTMENT
786 POLICY.—Those units of local government electing not to adopt a
787 written investment policy in accordance with investment policies
788 developed as provided in subsections (1)-(15) may invest or
789 reinvest any surplus public funds in their control or possession
790 in:
791 (c) Interest-bearing time deposits or savings accounts in
792 qualified public depositories, as defined in s. 280.02.
793
794 The securities listed in paragraphs (c) and (d) shall be
795 invested to provide sufficient liquidity to pay obligations as
796 they come due.
797 (23) AUTHORIZED DEPOSITS.—In addition to the investments
798 authorized for local governments in subsections (16) and (17)
799 and notwithstanding any other provisions of law, a unit of local
800 government may deposit any portion of surplus public funds in
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801 its control or possession in accordance with the following
802 conditions:
803 (a) The funds are initially deposited in a qualified
804 public depository, as defined in s. 280.02, selected by the unit
805 of local government.
806 Section 29. For the purpose of incorporating the amendmen t
807 made by this act to section 280.02, Florida Statutes, in a
808 reference thereto, paragraph (h) of subsection (4) of section
809 255.502, Florida Statutes, is reenacted to read:
810 255.502 Definitions; ss. 255.501-255.525.—As used in this
811 act, the following words and terms shall have the following
812 meanings unless the context otherwise requires:
813 (4) "Authorized investments" means and includes without
814 limitation any investment in:
815 (h) Savings accounts in, or certificates of deposit of,
816 qualified public depositories as defined in s. 280.02, in an
817 amount that does not exceed 15 percent of the net worth of the
818 institution, or a lesser amount as determined by rule by the
819 State Board of Administration, provided such savings accounts
820 and certificates of deposit are secured in the manner prescribed
821 in chapter 280.
822
823 Investments in any security authorized in this subsection may be
824 under repurchase agreements or reverse repurchase agreements.
825 Section 30. For the purpose of incorporating the amendment
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826 made by this act to section 280.02, Florida Statutes, in
827 references thereto, subsections (1) and (2) of section 331.309,
828 Florida Statutes, are reenacted to read:
829 331.309 Treasurer; depositories; fiscal agent.—
830 (1) The board shall designate an individual who is a
831 resident of the state, or a qualified public depository as
832 defined in s. 280.02, as treasurer of Space Florida, who shall
833 have charge of the funds of Space Florida. Such funds shall be
834 disbursed only upon the order of or pursuant to the resolution
835 of the board by warrant, check, authorization, or direct deposit
836 pursuant to s. 215.85, signed or authorized by the treasurer or
837 his or her representative or by such other persons as may be
838 authorized by the board. The board may give the treasurer such
839 other or additional powers and duties as the board may deem
840 appropriate and shall establish the treasurer's compensation.
841 The board may require the treasurer to give a bond in such
842 amount, on such terms, and with such sureties as may be deemed
843 satisfactory to the board to secure the performance by the
844 treasurer of his or her powers and duties. The board shall audit
845 or have audited the books of the treasurer at least once a year.
846 (2) The board is authorized to select as depositories in
847 which the funds of the board and of Space Florida shall be
848 deposited any qualified public depository as defined in s.
849 280.02, upon such terms and conditions as to the payment of
850 interest by such depository upon the funds so deposited as the
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851 board may deem just and reasonable. The funds of Space Florida
852 may be kept in or removed from the State Treasury upon written
853 notification from the chair of the board to the Chief Financial
854 Officer.
855 Section 31. For the purpose of incorporating the amendment
856 made by this act to section 280.02, Florida Statutes, in a
857 reference thereto, subsection (2) of section 373.553, Florida
858 Statutes, is reenacted to read:
859 373.553 Treasurer of the board; payment of funds;
860 depositories.—
861 (2) The board is authorized to select as depositories in
862 which the funds of the board and of the district shall be
863 deposited in any qualified public depository as defined in s.
864 280.02, and such deposits shall be secured in the manner
865 provided in chapter 280.
866 Section 32. For the purpose of incorporating the amendment
867 made by this act to section 280.02, Florida Statutes, in a
868 reference thereto, section 631.221, Florida Statutes, is
869 reenacted to read:
870 631.221 Deposit of moneys collected.—The moneys collected
871 by the department in a proceeding under this chapter shall be
872 deposited in a qualified public depository as defined in s.
873 280.02, which depository with regards to such funds shall
874 conform to and be bound by all the provisions of chapter 280, or
875 invested with the Chief Financial Officer pursuant to chapter
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876 18. For the purpose of accounting for the assets and
877 transactions of the estate, the receiver shall use such
878 accounting books, records, and systems as the court directs
879 after it hears and considers the recommendations of the
880 receiver.
881 Section 33. For the purpose of incorporating the amendment
882 made by this act to section 280.02, Florida Statutes, in a
883 reference thereto, paragraph (c) of subsection (3) of section
884 723.06115, Florida Statutes, is reenacted to read:
885 723.06115 Florida Mobile Home Relocation Trust Fund. —
886 (3) The department shall distribute moneys in the Florida
887 Mobile Home Relocation Trust Fund to the Florida Mobile Home
888 Relocation Corporation in accordance with the following:
889 (c) Funds transferred from the trust fund to the
890 corporation shall be transferred electronically and shall be
891 transferred to and maintained in a qualified public depository
892 as defined in s. 280.02 which is specified by the corporation.
893 Section 34. This act shall take effect July 1, 2023.
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 1185 Consumer Protection
SPONSOR(S): Insurance & Banking Subcommittee, Giallombardo and others
TIED BILLS: IDEN./SIM. BILLS: CS/SB 1398
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 18 Y, 0 N, As CS Fortenberry Lloyd
2) Commerce Committee Fortenberry Hamon
SUMMARY ANALYSIS
The bill makes changes related to consumer protection, including:
Mortgage lender locations: allows loan originators to work from a remote location if certain criteria are met .
Crowd-funding campaigns: identifies unlawful acts and practices regarding online crowd-funding
campaigns related to disasters.
Distributed energy generation system (DEGS) disclosures: adds to the information and disclosures that
must be provided to customers when they purchase or lease DEGS.
Check-cashing businesses: prohibits licensed check-cashing businesses from cashing corporate checks
when the total amount of all checks cashed for each payee exceeds 200 percent of the payee’s workers’
compensation policy coverage; makes it a third-degree felony for someone to knowingly cash such checks.
Insurance agent address changes: requires a licensed insurance agent to notify DFS of changes to his or
her contact information within five days after the change, rather than within the 30-day period currently
specified in law.
Insurance agency and adjusting firm names: Department of Financial Services may disapprove adjusting
firm names on the same grounds under which it can disapprove of insurance agency names
Public adjusters: significantly alters the requirements for contracts between public adjusters and insureds
or claimants; provides for additional disclosures to accompany such contracts; provides for recordkeeping
requirements for public adjusters.
Insurer advertisements: establishes it is an unfair method of competition, or an unfair or deceptive act or
practice, if an insurer fails to disclose a third party that it receives royalties, referral fees, or other money for
sponsorship, marketing, or use of third-party branding for a health insurance contract.
Insurance coverage for hurricanes: reduces the statutory duration that a hurricane deductible applies;
defines hurricane deductible as the deductible applicable to loss caused by a hurricane.
Insurer underwriting timeframes: reduces the time that an insurer has to cancel a policy for reasons other
than material misstatement, nonpayment of premium, or failure to comply with underwriting requirements
from 90 days to 60 days.
Annuities: revises the law to reflect the most recent changes to the National Association of Insurance
Commissioners’ Annuity Transactions Model Regulation.
Service agreements and manufacturer warranties: provides an additional exception to unearned
premium reserve requirements for service agreement companies; revises solvency requirements for
manufacturers who sell service warranties.
The bill has no impact on local or state government revenues or expenditures. It has an indeterminate positive and
negative direct economic impact on the private sector.
Except as otherwise expressly provided, the bill is effective on 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:
Mortgage Lender Locations
Background
The Office of Financial Regulation (OFR) is responsible for the regulation of banks, credit unions, and
other financial institutions, finance companies, and the security industry. 1 OFR is responsible for the
administration and enforcement of ch. 494, F.S., relating to loan originators and mortgage brokers.
OFR licenses and regulates the practice of these individuals.
A loan originator is an individual who, directly or indirectly: 2
Solicits or offers to solicit a mortgage loan;
Accepts or offers to accept an application for a mortgage loan;
Negotiates or offers to negotiate the terms or conditions of a new or existing mortgage loan on
behalf of a borrower or lender; or
Negotiates or offers to negotiate the sale of an existing mortgage loan to a noninstitutional
investor for compensation or gain.
The term loan originator does not include an employee of a mortgage broker or lender who only
handles a completed application form or transmits a completed application form to a lender on behalf of
a prospective borrower.3
A mortgage broker conducts loan originator activities through one or more licensed loan originators
employed by the mortgage broker or as independent contractors to the mortgage broker. 4 In contrast, a
mortgage lender makes a mortgage loan or services a mortgage loan for others or, for compensation or
gain, directly or indirectly, sells or offers to sell a mortgage loan to a noninstitutional investor. 5 A
mortgage lender may act as a mortgage broker.6
Each mortgage broker and lender must maintain, and transact business from, a principal place of
business,7 which is a primary office with a street address or physical location designated on a licensure
application.8 A mortgage broker or lender may also operate out of a branch office,9 but each branch
office must be separately licensed10 and operated by a branch manager11 who must be licensed as a
loan originator. Currently, mortgage brokers and lenders are not legally authorized to work from remote
locations and doing so may result in administrative action by OFR.
1 S. 20.121(3)(a)2., F.S.
2 S. 494.001(18), F.S.
3 Id.
4 S. 494.001(23), F.S.
5 S. 494.001(24), F.S.
6 See s. 494.0073, F.S.
7 Ss. 494.0039, and 494.0073, F.S.
8 S. 494.001(31), F.S.
9 See s. 494.001(3), F.S.
10 Ss. 494.0036(1) and 494.0066(1), F.S.
11 Ss. 494.0035(2) and 494.00665(2), F.S.
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Effect of the Bill
The bill adds a remote location to the definition of a mortgage broker’s or lender’s branch office. It
defines a remote location as:
A location, other than a principal place of business or a branch office;
At which a loan originator of a licensee may conduct business.
Licensees may allow loan originators to work from a remote location if:
The licensee has written policies and procedures for supervision of loan originators working
from a remote location;
Access to company platforms and customer information meets the licensee’s comprehensive
written information security plan;
An in-person customer interaction does not occur at a loan originator’s residence, unless the
residence is a licensed location;
Physical records are not maintained at a remote location;
Customer interactions and conversations about consumers comply with federal and state
information security requirements;
Loan originators working at a remote location access the company’s secure systems via a
virtual private network or comparable system;
The licensee ensures that appropriate security updates, patches, or other security alterations
used at remote locations are installed and maintained;
The licensee has the ability to remotely lock or erase company-related contents of any device or
remotely limit access to secure systems; and
The Nationwide Multistate Licensing System and Registry’s 12 record of a loan originator who
works from a remote location designates the principal place of business as the loan originator’s
registered location or the loan originator has elected a licensed branch office as a registered
location.
The bill changes the locations where a mortgage lender may lawfully conduct business to include a
branch office or remote location in addition to a principal place of business.
Crowd-funding Campaigns
Background
Responses to natural disasters, including hurricanes, often include crowd-funding campaigns to raise
money to help those who have been affected.13 Unfortunately, some of these campaigns are scams
that prey on people’s willingness to help disaster victims. 14 Online crowd-funding platforms receive
donations and distribute them without oversight and may be unable to determine whether the funds
received were used appropriately.15
Effect of the Bill
The bill creates a statutory framework for unlawful acts and practices regarding online crowd-funding
campaigns. It provides relevant definitions for crowd-funding campaign, crowd-funding platform,
disaster, and organizer. The bill defines crowd-funding campaign as an online fundraising initiative that
is:
Intended to receive monetary donations; and
Created by an organizer in the interest of a beneficiary.
12 The Nationwide Multistate Licensing System is centralized online database that is used by mortgage and finance
regulatory agencies to maintain state licensing programs. Rocket Mortgage, What is NMLS?,
https://www.rocketmortgage.com/learn/what-is-nmls (last visited Mar. 19, 2023).
13 Florida Department of Financial Services (DFS), Agency Analysis of 2023 House Bill 1185, p. 2 (Feb. 27, 2023).
14 Id.
15 Id. at p. 3.
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A disaster must satisfy all of the following criteria to meet the statutory definition of disaster set forth in
the bill:
Natural, technological, or civil emergency;
Occurs in Florida; and
Causes damage of sufficient severity and magnitude to result in a declaration of a state of
emergency by a county, the Governor, or the President of the United States.
The bill requires that, when an organizer arranges a crowd-funding campaign related to a disaster, the
organizer must produce to the crowd-funding platform a complete and accurate accounting of all the
donations received and expended by the campaign. The crowd-funding platform must publish all of
these accountings on its website.
Distributed Energy Generation System Disclosures
Background
Under current law, when a customer purchases or leases a distributed energy generation system
(DEGS), including solar panels, certain information and disclosures must be provided to the customer,
including contact information for the installer, cost and rebate information, and financial
considerations.16 However, contact information for the regulator of the system installer is not
included.17 Disclosures about how these DEGS may impact a customer’s homeowners’ insurance
premiums and coverage or the life of their roof is also not provided. 18
Effect of the Bill
The bill adds to the information and disclosures that must be provided to customers when they
purchase or lease DEGS. The customer must be given phone number for the Department of Business
and Professional Regulation’s customer contact center.
Customers must be informed that they should consider the age and remaining life of their roofs before
installing DEGS and that replacement of their roofs may require reinstallation of the DEGS. The bill also
requires that customers be given a statement informing them that:
Placing DEGS on their roof may impact their future insurance premiums; and
Customers are responsible for contacting their insurers prior to entering a purchase or lease
agreement for the DEGS to determine whether their current policy or coverage needs
modification upon installing the DEGS onto their dwelling.
Check Cashing
Background
The Office of Financial Regulation (OFR) licenses and regulates check cashers pursuant to ch. 560,
F.S. Florida law imposes various requirements on check cashers, including requiring the licensee to
maintain copies of each payment instrument cashed.19 If the payment instrument exceeds $1,000, the
following additional information must be maintained:
Customer files, as prescribed by rule,20 on all customers who cash corporate payment
instruments that exceed $1,000;
A copy of the personal identification that bears a photograph of the customer used as
identification and presented by the customer; and
A thumbprint of the customer taken by the licensee when the payment instrument is presented
for negotiation or payment.21
16 S. 520.23, F.S.
17 DFS, supra, note 13 at p. 3.
18 Id.
19 S. 560.310(1), F.S.
20 R. 69V-560.704, F.A.C.
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In addition to the information that a licensee must maintain, the following information must be entered
into the check cashing database operated by OFR before entering into each check cashing transaction
for each payment instrument being cashed if the payment exceeds $1,000:
Transaction date;
Payor name as displayed on the payment instrument;
Payee name as displayed on the payment instrument;
Conductor22 name, if different from the payee name;
Amount of the payment instrument;
Amount of currency provided;
Type of payment instrument, which may include personal, payroll, government, corporate, third-
party, or another type of instrument;
Amount of the fee charged for cashing of the payment instrument;
Branch or location where the payment instrument was accepted;
The type of identification and the identification number presented by the payee or conductor;
Payee’s workers’ compensation insurance policy number or exemption certificate number, if the
payee is a business; and
Such additional information as required by rule.23
OFR must ensure that the check cashing database provides an interface with the Secretary of State’s
database for purposes of verifying corporate registration and articles of incorporation and with the
Department of Financial Services’ (DFS) database for purposes of determining proof of coverage for
workers’ compensation.24
Effect of the Bill
The bill prohibits licensed check cashing businesses from cashing corporate checks when the total amount
of all checks cashed for each payee exceeds 200 percent of the payee’s workers’ compensation policy
coverage. This change is meant to prevent an employer committing workers’ compensation fraud by:
Making a corporate check out to itself or to “cash”;
Cashing the check at a check cashing business; and
Using the cash to pay employees “off the books” or “under the table”.
By paying employees in cash, the employer would show a smaller amount of payroll and be charged a
lesser premium by its workers’ compensation insurer for coverage for its employees.
The bill also makes it a third-degree felony for someone to knowingly cash checks in excess of the above
amount.
Insurance Agent Address Changes
Background
Insurance agents are currently required to notify the Department of Financial Services (DFS), in writing,
of changes to their name, residential address, principal business street address, mailing address,
contact telephone numbers, and email address within 30 days of a change. 25
21 S. 560.310(2)(a)-(c), F.S.
22 The term “conductor” is defined as “a natural person who presents himself or herself to a [check casher] for purposes of
cashing a payment instrument.” S. 560.103(9), F.S. The term is used in the context of the cashing of a corporate payment
instrument, which is a payment instrument on which the payee is not a natural person (i.e., the payee is a corporate
entity). S. 560.103(10), F.S. A check casher may accept or cash a corporate payment instrument from a conductor who is
an authorized officer of the corporate payee named on the instrument’s face. S. 560.309(4), F.S.
23 S. 560.310(1)(d), F.S.
24 S. 560.310(5), F.S.
25 S. 626.551, F.S.
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Effect of the Bill
The bill requires that a licensed insurance agent notify DFS of changes to his or her name, address,
telephone number, or other contact information within five days after the change, rather than within the
30-day period currently specified in law.
Insurance Agency and Adjusting Firm Names
Background
DFS recently began licensing adjusting firms.26 However, unlike the authority to disapprove names of
insurance agencies, DFS does not have the authority to disapprove misleading names of adjusting
firms.27 If the adjusting firm name contains certain words, such as a city, county, or government name,
that could lead customers to believe they are doing business with a governmental entity. 28
Current law allows insurance agencies to use the words “Medicare” and “Medicaid” in their names. 29
However, the provision of law allowing the use of those words is set to expire on June 30, 2023.30
Effect of the Bill
The bill establishes that DFS may disapprove the use of adjusting firm names on the same grounds
under which it can disapprove of insurance agency names. As of July 1, 2023, the bill also repeals the
statutory provision that allows an insurance agency to use the word “Medicare” or “Medicaid” in its
name, because the provision allowing the use of those words is set to expire.
Public Adjusters
Background
Public adjusters are regulated under ch. 626, part VI, F.S. Florida law defines a public adjuster as
someone who, for something of value, directly or indirectly, prepares, completes, or files an insurance
claim for an insured or third-party claimant, or who, for something of value, acts on behalf of, or aids, an
insured or third-party claimant in settling a claim for loss or damage covered by an insurance contract,
or who advertises for employment as an adjuster of such claims. 31 In general, a claimant executes a
contract for the public adjuster to provide claims adjusting services.32 At present, such a contract may
only be canceled within ten days after the date the contract was executed. 33
Public adjusters who have contracted with claimants must also provide to the claimant a written
estimate of loss to assist the claimant with obtaining a claim payment from the insurance company.
According to information received from DFS, following the hurricanes that have affected Florida in
recent years, consumers have complained about claims resolution delays due to the lack of
responsiveness of public adjusters they hired and the inability to cancel contracts they have executed
with these adjusters.34
Effect of the Bill
The bill clarifies that certain actions constitute the practice of public adjusting regardless of how a public
adjuster describes or presents his or her services. The bill establishes that, after July 1, 2023, whether
26 DFS, supra, note 13 at p. 3.
27 See s. 626.602, F.S.
28 DFS, supra, note 13 at p. 3.
29 S. 626.602(4)(b), F.S.
30 Id.
31 S. 626.854, F.S.
32 See id.
33 Id.
34 DFS, Agency Analysis of 2021 House Bill 717, p. 3 (Feb. 25, 2021).
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or not a public adjuster enters a contract to provide public adjusting services, the public adjuster is
prohibited from contracting with anyone other than a named insured unless the named insured provides
written consent. If a public adjuster contracts with a third party in settling the named insured’s claim,
without first obtaining the insured’s written consent, the third party must be paid from the public
adjuster’s fees.
The bill allows an insured or claimant to cancel a contract with a public adjuster without penalty or
obligation within 30 days after the date of the event, or 10 days after the date on which the contract is
executed, whichever is later, if the insured or claimant signed the contract based on events that were
the subject of an emergency declaration by the Governor. The public adjuster’s contract must contain
information regarding the cancellation period and must also notify the insured or claimant that he or she
may cancel the contract if the public adjuster fails to provide the insured or claimant and the insurer a
copy of a written estimate of damages within 60 days of the execution of the contract.
The bill changes many of the requirements for the contracts for services between public adjusters and
insureds or claimants, including the following:
The contract must be titled “Public Adjuster Contract” in at least 12-point font.
The anti-fraud statement required in the contract must be in at least 18-point bold font and
placed in the space above the insured or claimant’s signature.
A copy of the executed contract must be provided to the insured or claimant at the time of
execution and to the insurer within ten days thereafter.
The public adjuster shall not provide services until both the insured and insurer have been
provided with unaltered copies of the executed contract.
Before signing the contract, the public adjuster must provide the insured with a separate
disclosure that the insured must sign that does the following:
o Defines the types of adjusters who may be involved in the claims process, including
company adjuster, independent adjuster, and public adjuster.
o Explains that the public adjuster is not a representative or employee of the insurer.
o Explains that the insured is not required to hire a public adjuster.
o Explains that the insured has the right to communicate directly with the insured’s
attorney, the insurer, the company adjuster, the insurer’s attorney, or any person
regarding the settlement of the claim.
o Explains that public adjuster’s salary, fee, commission, or other consideration to be paid
to the public adjuster is the insured’s responsibility.
Any public adjuster contract that does not comply with these requirements is invalid and unenforceable.
Under the bill, if the insurer, no later than 14 days after the date on which the loss is reported to the
insurer, pays or commits in writing to pay the insured the policy limit of the insurance policy, the public
adjuster shall:
Inform the insured that, due to the insurer’s payment or commitment to pay the policy limit, the
loss recovery amount might not be increased by the insurer.
Not receive a commission consisting of a percentage of the total amount that the insurer paid to
resolve the claim.
Be entitled only to $1,000 from the insured for the time spent and expenses that the public
adjuster incurred on the claim until the claim is paid or the insurer provided a written agreement
to pay.
The bill establishes that if a public adjuster enters into a contract with an insured or claimant after the
insured or claimant unsuccessfully negotiates an insurance claim payment and the public adjuster
successfully obtains a higher insurance claim payment, the public adjuster shall receive a commission
consisting of 10 percent of:
the difference between the initial insurance claim payment offer made to the insured; and
the final insurance claim payment obtained through the public adjuster’s work after the insured
or claimant signed the public adjuster’s contract.
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The bill clarifies that the statutory exemption that allows attorneys at law to adjust claims without being
licensed as adjusters does not extend to the employees, interns, volunteers, or contractors of an
attorney or law firm.
The bill states that appointed independent adjusters and licensed public adjusters must post their
licenses in a conspicuous place in their principal places of business or have the licenses in their
possession if they are conducting business away from the principal places of business. It mandates that
adjusters have their records available for inspection by DFS at all times.
The bill also requires that adjusters maintain the following records for at least five years:
The name, address, phone number, and email address of the insured, and name of the
insured’s attorney if applicable.
The date, location, and amount of the loss.
An unaltered copy of the signed document containing the disclosures that the public adjuster is
required to give the insured.
A copy of the estimate of damages provided to the insurer.
Name of the insurer, claims representative, amount, expiration date, and number of each policy
under which the loss is covered.
An itemized statement of all compensation received by the public adjuster in connection with the
loss.
A register of all money received, deposited, disbursed, and withdrawn in connection with a
transaction with the insured, including fees, transfer, and disbursements in connection with the
loss.
Insurer Advertisements
Background
The Unfair Insurance Trade Practices Act (Act),35 among other things, defines unfair methods of
competition and unfair or deceptive acts in the business of insurance. 36 It provides an extensive list of
prohibited methods and acts. Among these are prohibitions on certain advertisements, inducements to
the purchase of insurance, including rebates, dividends, stock, and contracts that promise to return
profits to the prospective insurance purchaser. An insurer is prohibited from knowingly making, iss uing,
circulating any estimate, illustration, circular, statement, sales presentation, omission, comparison, or
altered property or casualty insurance certificate that falsely advertises insurance policies. 37
Effect of the Bill
The bill establishes that it is an unfair method of competition, or an unfair or deceptive act or practice,
by misrepresentation or false advertising of an insurance policy, if an insurer fails to disclose a third
party that receives royalties, referral fees, or other money for sponsorship, marketing, or use of third-
party branding for a health insurance contract.38
Insurance Coverage for Hurricanes
Background
Property insurance policies in Florida typically include a separate deductible applicable to hurricane
losses.39 Hurricane deductibles are often higher than the deductibles applicable to all other covered
35 Ch. 626, F.S., part IX.
36 S. 626.9541, F.S.
37 S. 626.9541(1)(a), F.S.
38 The health insurance contract is definedin s. 624.603, F.S., as “insurance of human beings against bodily injury,
disablement, or death by accident or accidental means, or the expense thereof, or against disablement or expense
resulting from sickness, and every insurance appertaining thereto.” It does not include workers’ compensation insurance.
39 See s. 627.701, F.S.
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losses. Current law provides a broad timeframe under which a hurricane is considered to be affecting
the state.40 A hurricane deductible can be applied during this timeframe, which may lead to significant
out-of-pocket expenditures by policyholders.
The timeframe for a hurricane begins when a hurricane watch or warning is issued anywhere in Florida
and ends 72 hours after the termination of the last hurricane watch or warning.41 A hurricane watch may
be issued up to 48 hours before the anticipated onset of tropical-storm-force winds in an area.42
Effect of the Bill
The bill reduces the statutory timeframe for the duration of a hurricane as follows:
It excludes a hurricane watch.
It deletes the provision that a hurricane continues for the time period during which hurricane
conditions exist anywhere in Florida.
It reduces the timeframe during which a hurricane exists to 24 hours following the termination of
the last hurricane watch or warning issued for any part of Florida.
Based upon these changes, a hurricane deductible would apply from the issuance of a hurricane
warning until 24 hours past the issuance of the last hurricane warning issued for the state.
The bill also defines hurricane deductible as the deductible applicable to loss caused by a hurricane.
Insurer Underwriting Timeframes
Background
Once coverage has been bound43 and a premium is quoted and paid, an insurer issuing property or
casualty insurance has 90 days to complete its underwriting process to determine whether an applicant
meets its guidelines.44 Coverage is extended to the policyholder during the underwriting period and the
insurer has earned the premium for the number of days that the coverage was available during that
period.45 Once the underwriting period is complete, the insurer will either accept or decline the risk. 46
After the conclusion of the underwriting period, an insurer may only cancel the policy for the following
reasons:47
Material misstatement.
Nonpayment of premium.
Failure to comply with underwriting requirements established within 90 days of the effective date
of coverage.
Substantial change in the risk covered by the policy.
When the cancellation is for all insureds in a given class. 48
40 See s. 627.4025(2), F.S.
41 S. 627.4025(2), F.S.; DFS, supra, note 13 at p. 3.
42 National Ocean Service, What is the Difference Between a Hurricane Watch and Hurricane Warning?,
https://oceanservice.noaa.gov/ facts/watch-
warning.html#:~:text=A%20hurricane%20watch% 20is%20issued,to%20instructions%20from% 20local% 20officials (last
visited Mar. 20, 2023). A hurricane watch means that hurricane conditions (sustained winds of 74 miles per hour or
greater) are possible within a specified area. A hurricane warning means that hurricane conditions are expected
somewhere within the specified area.
43 The term bound refers to confirmation that coverage is in place.
44 DFS, supra, note 13 at p. 3.
45 Id.
46 Id.
47 S. 627.4133, F.S.
48 A class is a group of insureds with similar exposures and experience that are grouped together for rating purposes.
IRMI, Class, https://www.irmi.com/term/insurance-
definitions/class#:~:text=A%20class%20is%20a%20group,grouped%20together%20for%20rating%20purposes (last
visited Mar. 20, 2023).
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Of the 50 states: 38 have a homeowners’ insurance underwriting period of 60 days; five have less than
60-day periods; one has a 70-day period; five states, including Florida, have 90-day periods; and one
state has a period greater than 90 days.49
Effect of the Bill
The bill reduces the time that an insurer has to cancel a property or casualty policy for reasons other
than those detailed immediately above from 90 days to 60 days.
Motor Vehicle Service Agreements
Background
Warranty associations and companies in Florida, including those associations selling home and service
warranties, and those companies selling motor vehicle service agreements, are regulated by the Office
of Insurance Regulation (OIR).50 Motor vehicle service agreements provide vehicle owners with
protection when a manufacturer’s warranty has run out. Companies that sell such agreements are
regulated by the OIR, and must currently establish and maintain an unearned premium reserve equal to
a minimum of 50 percent of the unearned gross written premium on each service agreement. 51 These
companies must maintain net assets of at least $500,000. 52 In lieu of maintaining an unearned premium
reserve, the company may secure and maintain a contractual liability insurance policy (CLIP), 53 which
protects business owners against the financial consequences of liabilities assumed from entering a
contract.54
Effect of the Bill
The bill establishes that a service agreement policy that maintains a CLIP in lieu of maintaining
unearned premium reserve may either pay 100 percent of claims as they are incurred or 100 percent of
claims due in the event of the failure of the service agreement company to pay claims when due.
Manufacturer Warranties
Background
49 DFS, supra, note 13 at p. 4.
50 See ch. 634, F.S.
51 S. 634.041, F.S.
52 Id.
53 Id.
54 The Hartford, Contractual Liability Insurance, https://www.thehartford.com/general -liability-insurance/cont ractual -
liability-
insurance#:~:text=Contractual%20liability%20insurance% 20helps%20cover,wit h%20contracts%2C% 20such%20as%20c
ontractors (last visited Mar. 20, 2023).
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A service warranty is a contract that generally covers the repair, replacement, or maintenance of a
consumer product.55 While warranties are not considered traditional insurance products, OIR regulates
warranty associations and companies similarly to the way in which it regulates insurers. 56 Service
warranty associations must be licensed by OIR 57 and must maintain certain minimum financial
standards in order to do warranty business in Florida.58
Licensed service warranty sellers may include the manufacturers of the products on which warranties
are offered. The Florida Insurance Code (Code) defines a manufacturer as any entity or its affiliate
which:59
Derives a majority of its revenues from products manufactured, built, assembled, constructed or
produced under a product name controlled by the entity or the affiliate;
Issues service warranties only for consumer products manufactured, built, assembled,
constructed or produced under a product name controlled by the entity or the affiliate;
Is listed and traded on a stock exchange, National Association of Security Dealers Automated
Quotation system and publicly traded in the over-the-counter-securities markets, is required to
file certain forms with the U.S. Securities and Exchange Commission, or whose American
Depository Receipts are listed on a recognized stock exchange and publicly traded;
Maintains outstanding debts obligations, if any, rated in the top four rating categories by a
recognized rating service;60
Has and maintains a minimum net worth of at least $10 million as evidenced by certified
financial statements; and
Is authorized to do business in Florida.
Effect of the Bill
The bill revises solvency requirements for manufacturers who sell service warranties. It removes the
requirement that a manufacturer maintain outstanding debt obligations in the top four rating categories
by a recognized rating service. However, it also increases the minimum net worth requirement for a
manufacturer from $10 million to $100 million.
Annuities
Background61
An annuity is a contract between a buyer and an insurance company that provides guaranteed
payments over a period of time. Annuities are designed to meet retirement and long-range planning
goals and are long-term contracts that typically restrict an investor’s ability to access his/her money.
There are two basic types of annuities, fixed and variable. Fixed annuities guarantee both the rate of
return and the amount of payout. Variable annuities do not guarantee the rate of return, which can
fluctuate based on the performance of underlying investment options chosen by the purchaser. Another
product, equity indexed annuities, is considered a hybrid of both fixed and variable annuities.
55 S. 634.402, F.S.
56 See ch. 634, F.S.
57 S. 634.403, F.S.
58 S. 634.406, F.S.
59 S. 634.401(17), F.S.
60 See U.S. Securities and Exchange Commission, Updated Investor Bulletin: The ABCs of Credit Ratings,
https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_creditratings (last visited Mar. 23, 2023).
61 See Annuities a Guide for Consumers, https://www.myfloridacfo.com/docs-sf/consumer-services-
libraries/consumerservices-documents/understanding-coverage/consumer-guides/annuities-guide. pdf?sfvrsn=93c f03d5_2
(last visited Mar. 20, 2023); See also National Association of Insurance Commissioners (NAIC), Annuities,
https://content.naic.org/cipr-
topics/annuities#:~:text=The%20NAIC%20Suit ability%20in% 20Annuity,the%20time%20of% 20the%20t ransaction . (last
visited Mar. 20, 2023).
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Annuities can be either immediate or deferred. With immediate annuities, the premium is paid in a
single lump sum, and the purchaser receives an immediate and regular stream of payments for a
period of time. By contrast, purchasers of deferred annuities pay one or more premiums over time (the
accumulation period) and begin to receive annuity payments at a future point in time (the payout period
or annuitization phase).
Fixed annuities are considered insurance contracts because of the mortality risk associated with payout
options, and are regulated by state insurance departments. With a variable annuity, premium dollars
are placed into a variety of investment options called subaccounts. Because variable annuities involve
risk and provide no guarantee of principal, they are considered investments and fall within the
jurisdiction of both securities regulators and state insurance departments. Agents selling variable
annuities must hold a variable annuity license from the state and also possess a securities license and
hold an active securities registration with a broker dealer. As investments, variable annuities also have
accompanying prospectuses with disclosures regarding risk. All sales of variable annuities are subject
to suitability standards established by the Financial Industry Regulatory Authority (FINRA). 62 Variable
annuities generally involve an accumulation phase and a payout phase.
Equity indexed annuities provide a minimum guaranteed interest rate in combination with an index-
linked component. A guaranteed minimum interest rate may still create a loss of principal if the
guarantee is based on an amount less than the amount of premium or initial payment. Investors who
find it necessary to cancel an annuity to access funds prior to maturity of the contract may also lose
principal through detrimental features such as surrender charges, hidden penalties, costs, fees, and
massive multi-year surrender charges.
In 2003, the National Association of Insurance Commissioners (NAIC) adopted “Senior Protection in
Annuity Transactions Model Regulation” (Senior Protection Model Regulation), designed to help protect
senior citizens when they purchase or exchange annuity products. In 2004, Florida adopted the Senior
Protection Model Regulation in s. 627.4554, F.S. This section provides protection for senior citizens in
annuity transactions, requiring insurance companies and agents offering these products to clearly
document the basis for selling the product, including consideration of a senior citizen’s financial and tax
status, as well as investment objectives. In 2006, the NAIC removed the age restriction from its Model
Regulation, extending the annuity protections to consumers of any age.
In 2008, Florida amended s. 627.4554, F.S. Although the legislation did not incorporate the 2006
change to the Senior Protection Model Regulation, it provided additional safeguards for senior
consumers, including:
Requiring insurers and agents to have an “objectively” reasonable basis for recommending a
particular annuity product.
Specifying the minimum information that an insurer or agent must obtain and use to determine
the suitability of a recommendation before executing a purchase or exchange of a policy.
Requiring suitability information obtained from a consumer to be recorded on a Department of
Financial Services’ (DFS) form, which must be completed and signed by the applicant and the
agent, with a copy given to the consumer.
Requiring the insurer or agent, in exchange situations, to provide the consumer with specified
information on a DFS form concerning differences between the policy being recommended for
purchase and an existing policy that would be surrendered or replaced.
Increasing the “free look” refund period.
Authorizing the OIR to rescind an annuity and provide a full refund of premiums paid or the
accumulation value, whichever is greater, when a consumer is harmed by a violation of the
suitability statute.
In 2010, the Legislature also increased the unconditional refund period for senior consumers in annuity
transactions to 21 days and required insurers to attach a cover page with specified information,
62 The Financial IndustryRegulatory Authority (FINRA) is the largest independent regulator for all securities firms doing
business in the United States.
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including notice of the refund period, contact information, and the name of the issuing company and
selling agent, to each annuity sold.63
In March 2010, the NAIC revised its Senior Protection Model Regulation to clarify that insurers are
responsible for compliance with the model’s requirements, even if the insurer contracts with a third
party; requiring insurers to review all annuity transactions; and establishing both general and product-
specific training requirements for insurance agents. The Legislature incorporated these changes to the
Senior Protection Model Regulation in 2013.
In 2020, the NAIC issued the Suitability in Annuity Transactions Model Regulation (Suitability Model
Regulation), to set forth standards and procedures for recommendations to consumers that result in an
annuity transaction.64
Effect of the Bill
Effective January 1, 2024, the bill revises the statutory framework for the issuance of annuities in
Florida, based upon the Suitability Model Regulation. It requires that agents act in consumers’ best
interests when recommending an annuity to a consumer and that insurers establish and maintain a
system of supervision over agents to make sure that the consumers’ insurance needs and financial
objectives are effectively addressed.
The bill defines an agent as a person or entity required to be licensed under Florida law to sell, solicit,
or negotiate insurance, including annuities. It defines cash compensation as any discount, concession,
fee, service fee, commission, sales charge, loan, override, or cash benefit that an agent receives in
connection with the recommendation or sale of an annuity from an insurer, intermediary, or directly from
a consumer. The bill defines consumer profile information, which includes various information about the
consumer’s financial needs, net worth and financial resources, and risk tolerance.
The bill defines intermediary as an entity contracted directly with an insurer or with another entity
contracted with an insurer to facilitate the sale of the insurer’s annuities by agents. It defines material
conflict of interest as financial interest of the agent in the sale of an annuity that a reasonable person
would expect to influence the impartiality of a recommendation, but it does not include cash or noncash
compensation.
Under the bill nonguaranteed elements means the premiums, credited interest rates, including any
bonus, benefits, values, dividends, noninterest based credits, charges, or elements of formulas used to
determine any of these. Such nonguaranteed elements are subject to company discretion and are not
guaranteed at issue.
The bill revises the statutory definition of recommendation so that it refers to advice provided by an
agent to an individual consumer that was intended to result, or does result, in a purchase, an exchange,
or a replacement of an annuity. Recommendation does not include general communication to the
public, generalized customer services, assistance or administrative support, general educational
information and tools, prospectuses, or other product and sales material. The bill also provides
additional definitions, clarification of existing definitions, and deletes unnecessary definitions, related to
annuities.
The bill requires that, when recommending an annuity, an agent must act in the best interests of the
consumer under the circumstances known at the time the recommendation is made, without placing the
agent’s or insurer’s financial interest ahead of the consumer’s interest. The bill considers an agent to
have acted in the consumer’s best interest if the agent has met the following obligations and
documentation requirements:
63 Section 626.99, F.S.
64 NAIC, Annuities, https://content.naic.org/cipr-
topics/annuities#:~:text=The%20NAIC%20Suit ability%20in% 20Annuity,the%20time%20of% 20the%20t ransaction (last
visited Mar. 20, 2023); NAIC, Suitability in Annuity Transactions Model Regulation,
https://content.naic.org/sites/default/files/inline-files/MDL-275.pdf (last visited Mar. 20, 2023).
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The agent exercised reasonable diligence, care, and skill to:
o Know the consumer’s financial situation, insurance needs, and financial objectives.
o Understand the available options after making a reasonable inquiry into the options
available to the agent.
o Have a reasonable basis to believe the recommended option effectively addresses the
consumer’s financial situation, insurance needs, and financial objectives over the life of
the product.
o Communicate the reasons for the recommendation.
The agent must also:
o Make reasonable efforts to obtain consumer profile information from the consumer
before recommending an annuity.
o Consider the types of products the agent may recommend or sell that address the
consumer’s financial situation, insurance needs, and financial objectives.
o Have a reasonable basis to believe the consumer would benefit from certain features of
the annuity recommended.
If an annuity is being exchanged or replaced, the agent must consider whether:
o The consumer will incur a surrender charge; be subject to a new surrender period; lose
existing benefits; or be subject to increased fees or charges.
o The replacement annuity would substantially benefit the consumer in comparison to the
replaced product.
o The consumer has had another annuity exchange or replacement, including one within
the preceding 60 months.
Before the recommendation or sale of an annuity, the agent must disclose the following:
o A description of the scope and terms of the relationship with the consumer and the role
of the agent in the transaction.
o A statement regarding the types of annuities and other products that the agent is
licensed and authorized to sell.
o A statement describing the insurers for which the agent is authorized, contracted or
appointed, or otherwise able to sell insurance products.
o A description of the sources and types of cash and noncash compensation the agent
will receive.
o A notice of the consumer’s right to request additional information regarding the cash
compensation to be received by the agent.
The bill requires that an agent identify and avoid or reasonably manage and disclose material conflicts
of interest, including those related to an ownership interest. At the time of recommendation or sale, an
agent shall:
Make a written record of any recommendation and the basis for it.
Obtain a statement signed by a consumer documenting the following, as applicable:
o A consumer’s refusal to provide consumer profile information; and
o A consumer’s understanding of the ramifications of not providing sufficient consumer
profile information.
o If an annuity transaction is not based on the agent’s recommendation, a consumer’s
acknowledgment that the annuity transaction is not recommended.
The bill obligates an insurer to establish and maintain reasonable procedures to:
Assess, prior to, or upon issuance and delivery of, an annuity, whether the agent provided the
required information to the consumer.
Identify and address suspicious consumer refusals to provide consumer profile information.
Identify and eliminate any sales contests, sales quotas, bonuses, and noncash compensation
based on the sales of specific annuities within a limited time period.
While an insurer is required to have a system to supervise agents, the system is not required to include
consideration of, or comparison to, options available to the agent or other products offered by the
insurer. However, an insurer’s supervision system must include supervision of contractual performance.
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The bill provides a safe harbor for recommendations made by an agent in compliance with business
rules, controls, and procedures that satisfy a comparable standard even if such standard would not
otherwise apply to the product or recommendation at issue. However, OIR or DFS can still investigate
potential violations of the statutes relating to the sales of annuities.
The bill defines comparable standards as:
With respect to broker-dealers and registered representatives of broker-dealers, applicable
Securities and Exchange Commission and FINRA rules related to best interest obligations and
supervision of annuity recommendations;
With respect to investment advisers registered under federal or state securities laws or
investment adviser representatives, the fiduciary duties and all other requirements imposed on
such investment adviser representatives; and
With respect to plan fiduciaries, the duties, obligations, prohibitions and all other requirements
attendant to such status under ERISA,65 or the Internal Revenue Code.
Under the bill, the insurer is responsible for monitoring registered financial professionals and providing
the information gathered to others who are responsible for supervising financial professionals. Financial
professional is defined as an agent that is regulated and acting as:
A broker dealer registered under federal or state securities laws or a registered representative
of a broker dealer;
An investment adviser registered under federal or state securities laws or an investment
adviser representative associated with the registered adviser;
A plan fiduciary under ERISA or fiduciary under the Internal Revenue Code.
The bill establishes detailed training requirements for agents who sell annuities. An agent is prohibited
from selling an annuity product unless the agent has adequate knowledge of the produce to
recommend the annuity and the agent is compliant with the insurer’s product knowledge training
standards.
Additionally, the bill requires that an agent who sells annuity products must complete a one-time four-
hour training course separate from an agent’s continuing education requirements. Under the bill, agents
who hold life insurance sales authority, and who wish to sell annuities, must complete the annuity
training course, as well. Agents who completed an OIR-approved training course prior to the four-hour
course requirement set forth in the bill must either complete a new four-hour training course approved
by OIR, or an additional one-time one-credit course approved by OIR.
The required training course must include information on the following topics:
Types and classifications of annuities.
Identification of the parties to an annuity.
How product-specific annuity contract features affect consumers.
The application of income taxation of qualified and nonqualified annuities.
The primary use of annuities.
Appropriate standard of conduct, sales practices, replacement, and disclosure requirements.
Providers of the annuity training course must register with the state as a continuing education provider
and comply with the applicable rules and guidelines set forth for continuing education providers in the
Code. Annuity training courses may be completed in a classroom or by self-study. Other courses,
including those from other states, that are substantially similar to the four-hour training course
described in the bill may satisfy the training requirements established by the bill.
65 ERISA is the Employee Retirement Income Security Act of 1974, but is commonly referred to by its acronym. It sets
minimum standards for most voluntarily established retirement and health plans in private industry to provide protection
for individuals in these plans. United States Department of Labor, Employee Retirement Income Security Act (ERISA),
https://www.dol.gov/general/topic/retirement/erisa#:~:text=The%20Employee%20Retirement%20Income% 20Sec urity,for
%20individuals%20in%20these% 20plans (last visited Mar. 19, 2023).
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The bill requires that the insurer verify that an agent has completed the required annuity training course
before allowing the agent to sell an annuity product for that insurer. An insurer may satisfy this
requirement by obtaining certificates of completion of the training course by an agent or by obtaining
reports provided by approved continuing education providers.
B. SECTION DIRECTORY:
Section 1. Amends s. 494.001, F.S. relating to definitions.
Section 2. Amends s. 494.0067, F.S., relating to requirements of mortgage lenders.
Section 3. Creates s. 501.2042, F.S., relating to unlawful acts and practices by online crowd-funding
campaigns.
Section 4. Amends s. 520.23, F.S., relating to disclosures required.
Section 5. Amends s 560.111, F.S., relating to prohibited acts.
Section 6. Amends s. 560.309, F.S., relating to conduct of business.
Section 7. Amends s. 626.551, F.S., relating to notice of change of address, name.
Section 8. Amends s. 626.602, F.S., relating to insurance agency and adjusting firm names;
disapproval.
Section 9. Amends s. 626.854, F.S., relating to “public adjuster” defined; prohibitions.
Section 10. Amends s. 626.860, F.S., relating to attorneys at law; exemption.
Section 11. Amends s. 626.875, F.S. relating to office and records.
Section 12. Amends s. 626.8796, F.S. relating to public adjuster contracts; disclosure statement; fraud
statement.
Section 13. Amends s. 626.8797, F.S. relating to proof of loss; fraud statement.
Section 14. Amends s. 626.9541, F.S. relating to unfair methods of competition and unfair or
deceptive acts or practices defined.
Section 15. Amends s. 627.4025, F.S. relating to residential coverage and hurricane coverage
defined.
Section 16. Amends s. 627.4133, F.S. relating to notice of cancellation, nonrenewal, or renewal
premium.
Section 17. Amends s. 627.4554, F.S. relating to suitability in annuity transactions.
Section 18. Amends s. 634.041, F.S. relating to qualifications for license.
Section 19. Amends s. 634.401, F.S., relating to definitions.
Section 20. Provides uncoded directory language.
Section 21. Provides an effective date of July 1, 2023, unless otherwise expressly provided.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
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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:
The bill has an indeterminate positive and negative direct economic impact on the private sector. As a
result of the public adjuster provisions set forth in the bill, public adjusters may receive less
compensation for their services. As such, consumers who use the services of public adjusters may
save money on those services.
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:
The bill provides DFS with the authority necessary to implement rules to administer the portions of the
bill where rulemaking is required, including the changes to the requirements for a public adjuster’s
contract with an insured.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
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On March 21, 2023, the Insurance & Banking Subcommittee considered the bill, adopted a strike-all
amendment, and reported the bill favorably as a committee substitute. The amendment made the following
changes to the bill:
Prohibited certain acts by check-cashing businesses.
Changed the timeframes for cancellation of public adjuster contracts that consumers entered into
based on events that were the subject of a declared state of emergency.
Changed the commission that a public adjuster can collect for services rendered when an insurer
agrees to pay policy limits to an insured to a flat fee of $1,000, rather than “reasonable
compensation,” because “reasonable” is an undefined term.
Increased the proposed number of days that a public adjuster has to provide an estimate to an
insured and an insurer from 45 days to 60 days to conform with other statutory provisions regarding
public adjusters.
Removed a proposed prohibition on the issuance of a public adjuster license to someone who has
pleaded guilty or nolo contendere to a crime involving theft or dishonesty within the ten years
preceding application. Current prohibitions are retained.
Deleted the proposed requirement that an applicant for a public adjuster’s license provide proof of
an errors and omissions policy in the amount of $500,000 at the time of application.
Removed the proposed requirement that an insurer issue separate checks to an insured and a
public adjuster when a public adjuster is involved in the resolution of a claim.
Increased the proposed number of days that a public adjuster has to provide an executed contract
to an insurer from three days to ten days.
Changed solvency requirements for manufacturers who sell service warranties.
Established that the annuity-related portions of the bill are effective January 1, 2024.
Changed the bill from being effective upon becoming law to being effective July 1, 2023, except as
otherwise provided.
Made other clarifying changes and technical changes to conform with bill drafting conventions.
The analysis is drafted to the committee substitute as passed by the Insurance & Banking Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
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1 A bill to be entitled
2 An act relating to consumer protection; amending s.
3 494.001, F.S.; revising the definition of the term
4 "branch office"; defining the term "remote location";
5 authorizing a licensee under ch. 494, F.S., to allow
6 loan originators to work from remote locations if
7 specified conditions are met; amending s. 494.0067,
8 F.S.; specifying that mortgage lenders may transact
9 business from branch offices and remote locations;
10 providing a requirement for operating remote
11 locations; creating s. 501.2042, F.S.; providing
12 definitions; providing requirements for organizers of
13 crowd-funding campaigns relating to disasters and
14 crowd-funding platforms; amending s. 520.23, F.S.;
15 revising disclosure requirements for agreements
16 governing the sale and lease of a distributed energy
17 generation system; amending s. 560.111, F.S.;
18 providing criminal penalties for certain check cashing
19 violations by money services businesses; amending s.
20 560.309, F.S.; prohibiting a money services business
21 from cashing corporate checks for a payee in excess of
22 certain workers' compensation policy coverage amounts;
23 amending s. 626.551, F.S.; revising the timeframe in
24 which an insurance representative must notify the
25 Department of Financial Services of certain changes in
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26 information; amending s. 626.602, F.S.; providing
27 applicability of provisions relating to the
28 disapproval of insurance agency names to adjusting
29 firms; revising grounds on which such names may be
30 disapproved by the department; providing for future
31 repeal; amending s. 626.854, F.S.; revising the
32 definition of "public adjuster"; prohibiting public
33 adjusters from contracting with any person other than
34 the named insured without the insured's written
35 consent; specifying a penalty for noncompliance;
36 specifying timeframes in which an insured or a
37 claimant may cancel a public adjuster's contract
38 without penalty or contract under certain
39 circumstances; revising requirements for public
40 adjuster's contracts; specifying requirements for
41 public adjusters if the insurer, within a certain
42 timeframe, pays or commits in writing to pay to the
43 insured the policy limit of the policy; specifying the
44 commission a public adjuster receives under certain
45 circumstances; amending s. 626.860, F.S.; providing
46 that an attorney's exemption from public adjuster
47 licensure requirements do not apply to certain
48 persons; amending s. 626.875, F.S.; revising
49 recordkeeping requirements for appointed independent
50 adjusters and licensed public adjusters; amending s.
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51 626.8796, F.S.; revising requirements for public
52 adjuster contracts; specifying requirements for and
53 prohibitions on public adjusters relating to such
54 contracts; providing construction; authorizing the
55 department to adopt rules; amending s. 626.8797, F.S.;
56 revising a fraud statement requirement in proof-of-
57 loss statements; amending s. 626.9541, F.S.; adding an
58 unfair or deceptive insurance act relating to health
59 insurance contracts; amending s. 627.4025, F.S.;
60 revising the definition of the term "hurricane," and
61 defining the term "hurricane deductible," for
62 residential coverage policies; amending s. 627.4133,
63 F.S.; revising the timeframe after which certain
64 insurers may not cancel policies except for specified
65 reasons; amending s. 627.4554, F.S.; revising
66 legislative purpose; revising applicability; revising
67 and defining terms; revising and specifying duties of
68 insurers and agents relating to the recommendation and
69 sale of annuity investments; specifying comparable
70 standards that comply with such requirements;
71 specifying agent training requirements; providing and
72 revising construction; authorizing the adoption of
73 specified forms; amending s. 634.401, F.S.; revising
74 the definition of the term "manufacturer"; providing a
75 directive to the Division of Law Revision; providing
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76 effective dates.
77
78 Be It Enacted by the Legislature of the State of Florida:
79
80 Section 1. Subsections (35) through (38) of section
81 494.001, Florida Statutes, are renumbered as subsections (36)
82 through (39), respectively, subsection (3) is amended, and a new
83 subsection (35) is added to that section, to read:
84 494.001 Definitions.—As used in this chapter, the term:
85 (3) "Branch office" means a location, other than a
86 mortgage broker's or mortgage lender's principal place of
87 business or a remote location:
88 (a) The address of which appears on business cards,
89 stationery, or advertising used by the licensee in connection
90 with business conducted under this chapter;
91 (b) At which the licensee's name, advertising or
92 promotional materials, or signage suggests that mortgage loans
93 are originated, negotiated, funded, or serviced; or
94 (c) At which mortgage loans are originated, negotiated,
95 funded, or serviced by a licensee.
96 (35) "Remote location" means a location, other than a
97 principal place of business or a branch office, at which a loan
98 originator of a licensee may conduct business. Licensees may
99 allow loan originators to work from remote locations if:
100 (a) The licensee has written policies and procedures for
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101 the supervision of loan originators working from remote
102 locations.
103 (b) Access to company platforms and customer information
104 is in accordance with the licensee's comprehensive written
105 information security plan.
106 (c) An in-person customer interaction does not occur at a
107 loan originator's residence, unless such residence is a licensed
108 location.
109 (d) Physical records are not maintained at a remote
110 location.
111 (e) Customer interactions and conversations about
112 consumers will be in compliance with federal and state
113 information security requirements, including applicable
114 provisions under the Gramm-Leach-Bliley Act and the Safeguards
115 Rule established by the Federal Trade Commission, set forth at
116 16 CFR Part 314, as such requirements may be amended from time
117 to time.
118 (f) Loan originators working at remote locations access
119 the company's secure systems, including a cloud-based system,
120 directly from any out-of-office device such employee uses,
121 including a laptop, telephones desktop computer, and tablet, via
122 a virtual private network or comparable system that ensures
123 secure connectivity and requires passwords or other forms of
124 authentication to access.
125 (g) Licensee ensures that appropriate security updates,
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126 patches, or other alterations to the security of all devices
127 used at remote locations are installed and maintained.
128 (h) Licensee has an ability to remotely lock or erase
129 company-related contents of any device or otherwise remotely
130 limit all access to a company's secure systems.
131 (i) The Nationwide Multistate Licensing System and
132 Registry's record of a loan originator who works from a remote
133 location designates the principal place of business as the loan
134 originator's registered location or the loan originator has
135 elected a licensed branch office as a registered location.
136 Section 2. Subsection (1) of section 494.0067, Florida
137 Statutes, is amended to read:
138 494.0067 Requirements of mortgage lenders.—
139 (1) A mortgage lender that makes mortgage loans on real
140 estate in this state shall transact business from a principal
141 place of business, branch office, or remote location. Each
142 principal place of business, and each branch office, and remote
143 location shall be operated under the full charge, control, and
144 supervision of the licensee pursuant to this part.
145 Section 3. Section 501.2042, Florida Statutes, is created
146 to read:
147 501.2042 Unlawful acts and practices by online cro wd-
148 funding campaigns.—
149 (1) As used in this section, the term:
150 (a) "Crowd-funding campaign" means an online fundraising
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151 initiative that is intended to receive monetary donations from
152 donors and is created by an organizer in the interest of a
153 beneficiary.
154 (b) "Crowd-funding platform" means an entity doing
155 business in this state and that provides an online medium for
156 the creation and facilitation of a crowd-funding campaign.
157 (c) "Disaster" means any natural, technological, or civil
158 emergency that occurs in this state and that causes damage of
159 sufficient severity and magnitude to result in a declaration of
160 a state of emergency by a county, the Governor, or the President
161 of the United States.
162 (d) "Organizer" means a person who:
163 1. Resides or is domiciled in this state.
164 2. Has an account on a crowd-funding platform and has
165 created a crowd-funding campaign either as a beneficiary or on
166 behalf of a beneficiary who resides in the state, regardless of
167 whether the beneficiary or the crowd-funding campaign has
168 received donations.
169 (2) When an organizer arranges a crowd-funding campaign
170 related to a disaster, the organizer must produce to the crowd-
171 funding platform a complete and accurate accounting of all
172 donations received and expended by the crowd-funding campaign
173 for the benefit of state residents. The crowd-funding platform
174 must publish all received accountings on its website.
175 Section 4. Section 520.23, Florida Statutes, is amended to
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176 read:
177 520.23 Disclosures required.—Each agreement governing the
178 sale or lease of a distributed energy generation system shall,
179 at a minimum, include a written statement printed in at least
180 12-point type that is separate from the agreement, is separately
181 acknowledged by the buyer or lessee, and includes the following
182 information and disclosures, if applicable:
183 (1) The name, address, telephone number, and e-mail
184 address of the buyer or lessee.
185 (2) The name, address, telephone number, e-mail address,
186 and valid state contractor license number of the person
187 responsible for installing the distributed energy generation
188 system.
189 (3) The name, address, telephone number, e-mail address,
190 and valid state contractor license number of the distributed
191 energy generation system maintenance provider, if different from
192 the person responsible for installing the distributed energy
193 generation system.
194 (4) The customer contact center phone number for the
195 Department of Business and Professional Regulation.
196 (5)(4) A written statement indicating whether the
197 distributed energy generation system is being purchased or
198 leased.
199 (a) If the distributed energy generation system will be
200 leased, the written statement must include a disclosure in
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201 substantially the following form: "You are entering into an
202 agreement to lease a distributed energy generation system. You
203 will lease (not own) the system installed on your property."
204 (b) If the distributed energy generation system will be
205 purchased, the written statement must include a disclosure in
206 substantially the following form: "You are entering into an
207 agreement to purchase a distributed energy generation system.
208 You will own (not lease) the system installed on your property."
209 (6)(5) The total cost to be paid by the buyer or lessee,
210 including any interest, installation fees, document preparation
211 fees, service fees, or other fees.
212 (7)(6) A payment schedule, including any amounts owed at
213 contract signing, at the commencement of installation, at the
214 completion of installation, and any final payments. If the
215 distributed energy generation system is being leased, the
216 written statement must include the frequency and amount of each
217 payment due under the lease and the total estimated lease
218 payments over the term of the lease.
219 (8)(7) Each state or federal tax incentive or rebate, if
220 any, relied upon by the seller in determining the price of the
221 distributed energy generation system.
222 (9)(8) A description of the assumptions used to calculate
223 any savings estimates provided to the buyer or lessee, and if
224 such estimates are provided, a statement in substantially the
225 following form: "It is important to understand that future
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226 electric utility rates are estimates only. Your future electric
227 utility rates may vary."
228 (10)(9) A description of any one-time or recurring fees,
229 including, but not limited to, estimated system removal fees,
230 maintenance fees, Internet connection fees, and automated
231 clearinghouse fees. If late fees may apply, the description must
232 describe the circumstances triggering such late fees.
233 (11)(10) A statement notifying the buyer whether the
234 distributed energy generation system is being financed and, if
235 so, a statement in substantially the following form: "If your
236 system is financed, carefully read any agreements and/or
237 disclosure forms provided by your lender. This statement does
238 not contain the terms of your financing agreement. If you have
239 any questions about your financing agreement, contact your
240 finance provider before signing a contract."
241 (12)(11) A statement notifying the buyer whether the
242 seller is assisting in arranging financing of the distributed
243 energy generation system and, if so, a statement in
244 substantially the following form: "If your system is financed,
245 carefully read any agreements and/or disclosure forms provided
246 by your lender. This statement does not contain the terms of
247 your financing agreement. If you have any questions about your
248 financing agreement, contact your finance provider before
249 signing a contract."
250 (13)(12) A provision notifying the buyer or lessee of the
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251 right to rescind the agreement for a period of at least 3
252 business days after the agreement is signed. This subsection
253 does not apply to a contract to sell or lease a distributed
254 energy generation system in a solar community in which the
255 entire community has been marketed as a solar community and all
256 of the homes in the community are intended to have a distributed
257 energy generation system, or a solar community in which the
258 developer has incorporated solar technology for purposes of
259 meeting the Florida Building Code in s. 553.73.
260 (14)(13) A description of the distributed energy
261 generation system design assumptions, including the make and
262 model of the major components, system size, estimated first-year
263 energy production, and estimated annual energy production
264 decreases, including the overall percentage degradation over the
265 estimated life of the distributed energy generation system, and
266 the status of utility compensation for excess energy generated
267 by the system at the time of contract signing. A seller who
268 provides a warranty or guarantee of the energy production output
269 of the distributed energy generation system may provide a
270 description of such warranty or guarantee in lieu of a
271 description of the system design and components.
272 (15)(14) A description of any performance or production
273 guarantees.
274 (16)(15) A description of the ownership and
275 transferability of any tax credits, rebates, incentives, or
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276 renewable energy certificates associated with the distribute d
277 energy generation system, including a disclosure as to whether
278 the seller will assign or sell any associated renewable energy
279 certificates to a third party.
280 (17)(16) A statement in substantially the following form:
281 "You are responsible for property taxes on property you own.
282 Consult a tax professional to understand any tax liability or
283 eligibility for any tax credits that may result from the
284 purchase of your distributed energy generation system."
285 (18)(17) The approximate start and completion dates for
286 the installation of the distributed energy generation system.
287 (19)(18) A disclosure as to whether maintenance and
288 repairs of the distributed energy generation system are included
289 in the purchase price.
290 (20)(19) A disclosure as to whether any warranty or
291 maintenance obligations related to the distributed energy
292 generation system may be sold or transferred by the seller to a
293 third party and, if so, a statement in substantially the
294 following form: "Your contract may be assigned, sold, or
295 transferred without your consent to a third party who will be
296 bound to all the terms of the contract. If a transfer occurs,
297 you will be notified if this will change the address or phone
298 number to use for system maintenance or repair requests."
299 (21)(20) If the distributed energy generation system will
300 be purchased, a disclosure notifying the buyer of the
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301 requirements for interconnecting the system to the utility
302 system.
303 (22)(21) A disclosure notifying the buyer or lessee of the
304 party responsible for obtaining interconnection approval.
305 (23)(22) A description of any roof warranties.
306 (24) A statement in substantially the following form: "You
307 should consider the age and remaining life of your roof prior to
308 installing a distributed energy generation system. Replacement
309 of your roof may require reinstallation of the distributed
310 energy generation system."
311 (25)(23) A disclosure notifying the lessee whether the
312 seller will insure a leased distributed energy generation system
313 against damage or loss and, if applicable, the circ umstances
314 under which the seller will not insure the system against damage
315 or loss.
316 (26)(24) A statement, if applicable, in substantially the
317 following form: "You are responsible for obtaining insurance
318 policies or coverage for any loss of or damage to t he system.
319 Consult an insurance professional to understand how to protect
320 against the risk of loss or damage to the system."
321 (27) A statement in substantially the following form:
322 "Placing a distributed energy generation system on your roof may
323 impact your future insurance premiums. You are responsible for
324 contacting your insurance carrier, prior to entering into a
325 purchase or lease agreement, to confirm whether your current
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326 policy or coverage will need to be modified upon installing the
327 distributed energy generation system onto your dwelling."
328 (28)(25) A disclosure notifying the buyer or lessee
329 whether the seller or lessor will place a lien on the buyer's or
330 lessee's home or other property as a result of entering into a
331 purchase or lease agreement for the distributed energy
332 generation system.
333 (29)(26) A disclosure notifying the buyer or lessee
334 whether the seller or lessor will file a fixture filing or a
335 State of Florida Uniform Commercial Code Financing Statement
336 Form (UCC-1) on the distributed energy generation system.
337 (30)(27) A disclosure identifying whether the agreement
338 contains any restrictions on the buyer's or lessee's ability to
339 modify or transfer ownership of a distributed energy generation
340 system, including whether any modification or transfer is
341 subject to review or approval by a third party.
342 (31)(28) A disclosure as to whether the lease agreement
343 may be transferred to a purchaser upon sale of the home or real
344 property to which the system is affixed, and any conditions for
345 such transfer.
346 (32)(29) A blank section that allows the seller to provide
347 additional relevant disclosures or explain disclosures made
348 elsewhere in the disclosure form.
349
350 The requirement to provide a written statement under this
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351 section may be satisfied by the electronic delivery of a
352 document within 24 hours after execution of the written
353 statement containing the required statement if the intended
354 recipient of the electronic document affirmatively acknowledges
355 its receipt. An electronic document satisfies the font and other
356 formatting standards required for the written statement if the
357 format and the relative size of characters of the electronic
358 document are reasonably similar to those required in the written
359 document or if the information is otherwise displayed in a
360 reasonably conspicuous manner.
361 Section 5. Subsection (6) of section 560.111, Florida
362 Statutes, is amended to read:
363 560.111 Prohibited acts.—
364 (6) A person who knowingly and willfully violates s.
365 560.309(11) or s. 560.310(2)(d) commits a felony of the third
366 degree, punishable as provided in s. 775.082, s. 775.083, or s.
367 775.084.
368 Section 6. Subsection (11) is added to section 560.309,
369 Florida Statutes to read:
370 560.309 Conduct of business.—
371 (11) A licensee shall not cash corporate checks where the
372 aggregate face amount of all corporate checks cashed for each
373 payee exceeds 200 percent of the payee's workers' compensation
374 policy coverage amount during the same dates as the workers'
375 compensation policy coverage period.
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376 Section 7. Section 626.551, Florida Statutes, is amended
377 to read:
378 626.551 Notice of change of address, name.—A licensee must
379 notify the department, in writing, within 5 30 days after a
380 change of name, residence address, principal business street
381 address, mailing address, contact telephone numbers, including a
382 business telephone number, or e-mail address. A licensee who has
383 moved his or her principal place of residence and principal
384 place of business from this state shall have his or her license
385 and all appointments immediately terminated by the department.
386 Failure to notify the department within the required time shall
387 result in a fine not to exceed $250 for the first offense and a
388 fine of at least $500 or suspension or revocation of the license
389 pursuant to s. 626.611, s. 626.6115, s. 626.621, or s. 626.6215
390 for a subsequent offense. The department may adopt rules to
391 administer and enforce this section.
392 Section 8. Section 626.602, Florida Statutes, is amended
393 to read:
394 626.602 Insurance agency and adjusting firm names;
395 disapproval.—The department may disapprove the use of any true
396 or fictitious name, other than the bona fide natural name of an
397 individual, by any insurance agency or adjusting firm on any of
398 the following grounds:
399 (1) The name interferes with or is too similar to a name
400 already filed and in use by another agency, or adjusting firm,
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401 or insurer.
402 (2) The use of the name may mislead the public in any
403 respect.
404 (3) The name states or implies that the agency or
405 adjusting firm is an insurer, motor club, hospital service plan,
406 state or federal agency, charitable organization, or entity that
407 primarily provides advice and counsel rather than sells or
408 solicits insurance, settles claims, or is entitled to engage in
409 insurance activities not permitted under licenses held or
410 applied for. This provision does not prohibit the use of the
411 word "state" or "states" in the name of the agency. The use of
412 the word "state" or "states" in the name of an agency or
413 adjusting firm does not in and of itself imply that the agency
414 or adjusting firm is a state agency.
415 (4)(a) The name contains the word "Medicare" or
416 "Medicaid."
417 (b) An insurance agency whose name contains the word
418 "Medicare" or "Medicaid" but which is licensed as of July 1,
419 2021, may continue to use that name until June 30, 2023,
420 provided that the agency's license remains valid. If the
421 agency's license expires or is suspended or revoked, the agency
422 may not be relicensed using that name. Licenses for agencies
423 with names containing either of these words automatically expire
424 on July 1, 2023, unless these words are removed from the name.
425 This paragraph is repealed July 1, 2023.
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426 Section 9. Section 626.854, Florida Statutes, is amended
427 to read:
428 626.854 "Public adjuster" defined; prohibitions.—The
429 Legislature finds that it is necessary for the protection of the
430 public to regulate public insurance adjusters and to prevent the
431 unauthorized practice of law.
432 (1) A "public adjuster" is any person, except a duly
433 licensed attorney at law as exempted under s. 626.860, who, for
434 money, commission, or any other thing of value, directly or
435 indirectly prepares, completes, or files an insurance claim for
436 an insured or third-party claimant, regardless of how that
437 person describes or presents his or her services, or who, for
438 money, commission, or any other thing of value, acts on behalf
439 of, or aids an insured or third-party claimant in negotiating
440 for or effecting the settlement of a claim or claims for loss or
441 damage covered by an insurance contract, regardless of how that
442 person describes or presents his or her services, or who
443 advertises for employment as an adjuster of such claims. The
444 term also includes any person who, for money, commission, or any
445 other thing of value, directly or indirectly solicits,
446 investigates, or adjusts such claims on behalf of a public
447 adjuster, an insured, or a third-party claimant. The term does
448 not include a person who photographs or inventories damaged
449 personal property or business personal property or a person
450 performing duties under another professional license, if such
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451 person does not otherwise solicit, adjust, investigate, or
452 negotiate for or attempt to effect the settlement of a claim.
453 (2) This definition does not apply to:
454 (a) A licensed health care provider or employee thereof
455 who prepares or files a health insurance claim form on behalf of
456 a patient.
457 (b) A licensed health insurance agent who assists an
458 insured with coverage questions, medical procedure coding
459 issues, balance billing issues, understanding the claims filing
460 process, or filing a claim, as such assistance relates to
461 coverage under a health insurance policy.
462 (c) A person who files a health claim on behalf of another
463 and does so without compensation.
464 (3) A public adjuster may not give legal advice o r act on
465 behalf of or aid any person in negotiating or settling a claim
466 relating to bodily injury, death, or noneconomic damages.
467 (4) For purposes of this section, the term "insured"
468 includes only the policyholder and any beneficiaries named or
469 similarly identified in the policy.
470 (5) A public adjuster may not directly or indirectly
471 through any other person or entity solicit an insured or
472 claimant by any means except on Monday through Saturday of each
473 week and only between the hours of 8 a.m. and 8 p.m. on those
474 days.
475 (6)(a) When entering a contract for adjuster services
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476 after July 1, 2023, a public adjuster is prohibited from
477 contracting with any person other than the named insured unless
478 the named insured provides written consent, subsequent to
479 entering a contract for public adjusting services.
480 (b) In the event a public adjuster contracts with a third
481 party in settling the named insured's claim, without first
482 obtaining the insured's written consent, payment of the third
483 party's fees shall be made from the public adjuster's fee.
484 (7)(6) An insured or claimant may cancel a public
485 adjuster's contract to adjust a claim without penalty or
486 obligation within 10 days after the date on which the contract
487 is executed. If the contract was entered into based on events
488 that are the subject of a declaration of a state of emergency by
489 the Governor, an insured or claimant may cancel the public
490 adjuster's contract to adjust a claim without penalty or
491 obligation within 30 days after the date of the event, or 10
492 days after the date on which the contract is executed, whichever
493 is later. The public adjuster's contract must contain the
494 following language in minimum 18-point bold type immediately
495 before the space reserved in the contract for the signature of
496 the insured or claimant: "You, the insured, may cancel this
497 contract for any reason without penalty or obligation to you
498 within 10 days after the date of this contract. If this contract
499 was entered into based on events that are the subject of a
500 declaration of a state of emergency by the Governor, you may
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501 cancel this contract for any reason without penalty or
502 obligation to you within 30 days after the date of the event, or
503 10 days after the date on which the contract is executed,
504 whichever is later. You may also cancel the contract without
505 penalty or obligation to you if I, as your public adjuster, fail
506 to provide you and your insurer a copy of a written estimate
507 within 60 days of the execution of the contract in accordance
508 with s. 626.854(14)(b), Florida Statutes." The by providing
509 notice of cancellation shall be provided to ...(name of public
510 adjuster)..., submitted in writing and sent by certified mail,
511 return receipt requested, or other form of mailing that provides
512 proof thereof, at the address specified in the contract.
513 (8)(7) It is an unfair and deceptive insurance trade
514 practice pursuant to s. 626.9541 for a public adjuster or any
515 other person to circulate or disseminate any advertisement,
516 announcement, or statement containing any assertion,
517 representation, or statement with respect to the business of
518 insurance which is untrue, deceptive, or misleading.
519 (a) The following statements, made in any public
520 adjuster's advertisement or solicitation, are considered
521 deceptive or misleading:
522 1. A statement or representation that invites an insured
523 policyholder to submit a claim when the policyholder does not
524 have covered damage to insured property.
525 2. A statement or representation that invites an insured
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526 policyholder to submit a claim by offering monetary or other
527 valuable inducement.
528 3. A statement or representation that invites an insured
529 policyholder to submit a claim by stating that there is "no
530 risk" to the policyholder by submitting such claim.
531 4. A statement or representation, or use of a logo or
532 shield, that implies or could mistakenly be construed to imply
533 that the solicitation was issued or distributed by a
534 governmental agency or is sanctioned or endorsed by a
535 governmental agency.
536 (b) For purposes of this paragraph, the term "written
537 advertisement" includes only newspapers, magazines, flyers, and
538 bulk mailers. The following disclaimer, which is not required to
539 be printed on standard size business cards, must be added in
540 bold print and capital letters in typeface no smaller than the
541 typeface of the body of the text to all written advertisements
542 by a public adjuster:
543 "THIS IS A SOLICITATION FOR BUSINESS. IF YOU HAVE HAD A
544 CLAIM FOR AN INSURED PROPERTY LOSS OR DAMAGE AND YOU ARE
545 SATISFIED WITH THE PAYMENT BY YOUR INSURER, YOU MAY
546 DISREGARD THIS ADVERTISEMENT."
547 (9)(8) A public adjuster, a public adjuster apprentice, or
548 any person or entity acting on behalf of a public adjuster or
549 public adjuster apprentice may not give or offer to give a
550 monetary loan or advance to a client or prospective client.
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551 (10)(9) A public adjuster, public adjuster apprentice, or
552 any individual or entity acting on behalf of a public adjuster
553 or public adjuster apprentice may not give or offer to give,
554 directly or indirectly, any article of merchandise having a
555 value in excess of $25 to any individual for the purpose of
556 advertising or as an inducement to entering into a contract with
557 a public adjuster.
558 (11) If the insurer, not later than 14 days after the date
559 on which the loss is reported to the insurer, either pays or
560 commits in writing to pay to the insured the policy limit of the
561 insurance policy, the public adjuster shall:
562 (a) Inform the insured that, due to the insurer's payment
563 or commitment to pay the policy limit, the loss recovery amount
564 might not be increased by the insurer.
565 (b) Not receive a commission consisting of a percentage of
566 the total amount of the paid by an insurer to resolve the claim.
567 (c) Be entitled only to $1,000 from the insured for the
568 time spent and expenses incurred on the claim by the public
569 adjuster, until the claim is paid or the insured receives a
570 written commitment to pay from the insurer.
571 (12) If the public adjuster enters into a contract with an
572 insured or claimant after the insured or claimant unsuccessfully
573 negotiates an insurance claim payment and the public adjuster is
574 successful in obtaining a higher insurance claim payment, the
575 public adjuster shall receive a commission consisting of 10
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576 percent of the difference between the last insurance claim
577 payment offer made to the insured before the insured signed a
578 contract with the public adjuster and the final insurance claim
579 payment obtained through the work of the public adjuster after
580 entering into the contract with the insured or claimant.
581 (13)(10)(a) If a public adjuster enters into a contract
582 with an insured or claimant to reopen a claim or file a
583 supplemental claim that seeks additional payments for a claim
584 that has been previously paid in part or in full or settled by
585 the insurer, the public adjuster may not charge, agree to, or
586 accept from any source compensation, payment, commission, fee,
587 or any other thing of value based on a previous settlement or
588 previous claim payments by the insurer for the same cause of
589 loss. The charge, compensation, payment, commission, fee, or any
590 other thing of value must be based only on the claim payments or
591 settlements paid to the insured, exclusive of attorney fees and
592 costs, obtained through the work of the public adjuster after
593 entering into the contract with the insured or claimant.
594 Compensation for the reopened or supplemental claim may not
595 exceed 20 percent of the reopened or supplemental claim payment.
596 In no event shall the contracts described in this paragraph
597 exceed the limitations in paragraph (b).
598 (b) A public adjuster may not charge, agree to, or accept
599 from any source compensation, payment, commission, fee, or any
600 other thing of value in excess of:
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601 1. Ten percent of the amount of insurance claim payments
602 or settlements, exclusive of attorney fees and costs, paid to
603 the insured by the insurer for claims based on events that are
604 the subject of a declaration of a state of emergency by the
605 Governor. This provision applies to claims made during the year
606 after the declaration of emergency. After that year, the
607 limitations in subparagraph 2. apply.
608 2. Twenty percent of the amount of insurance claim
609 payments or settlements, exclusive of attorney fees and costs,
610 paid to the insured by the insurer for claims that are not based
611 on events that are the subject of a declaration of a state of
612 emergency by the Governor.
613 (c) Insurance claim payments made by the insurer do not
614 include policy deductibles, and public adjuster compensation may
615 not be based on the deductible portion of a claim.
616 (d) Public adjuster compensation may not be based on
617 amounts attributable to additional living expenses, unless such
618 compensation is affirmatively agreed to in a separate agreement
619 that includes a disclosure in substantially the following form:
620 "I agree to retain and compensate the public adjuster for
621 adjusting my additional living expenses and securing payment
622 from my insurer for amounts attributable to additional living
623 expenses payable under the policy issued on my (home/mobile
624 home/condominium unit)."
625 (e) Public adjuster rate of compensation may not be
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626 increased based solely on the fact that the claim is litigated.
627 (f) Any maneuver, shift, or device through which the
628 limits on compensation set forth in this subsection are exceeded
629 is a violation of this chapter punishable as provided under s.
630 626.8698.
631 (14)(a)(11) Each public adjuster must provide to the
632 claimant or insured a written estimate of the loss to assist in
633 the submission of a proof of loss or any other claim for payment
634 of insurance proceeds within 60 days after the date of the
635 contract. The written estimate must include an itemized, per-
636 unit estimate of the repairs, including itemized information on
637 equipment, materials, labor, and supplies, in accordance with
638 accepted industry standards. The public adjuster shall retain
639 such written estimate for at least 5 years and shall make the
640 estimate available to the claimant or insured, the insurer, and
641 the department upon request.
642 (b) An insured may cancel the contract with no additional
643 penalties or fees charged by the public adjuster if such an
644 estimate is not provided within 60 days after executing the
645 contract, subject to the cancellation notice requirement in this
646 section.
647 (15)(12) A public adjuster, public adjuster apprentice, or
648 any person acting on behalf of a public adjuster or apprentice
649 may not accept referrals of business from any person with whom
650 the public adjuster conducts business if there is any form or
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651 manner of agreement to compensate the person, directly or
652 indirectly, for referring business to the public adjuster. A
653 public adjuster may not compensate any person, except for
654 another public adjuster, directly or indirectly, for the
655 principal purpose of referring business to the public adjuster.
656 (16)(13) A company employee adjuster, independent
657 adjuster, attorney, investigator, or other persons acting on
658 behalf of an insurer that needs access to an insured or claimant
659 or to the insured property that is the subject of a claim must
660 provide at least 48 hours' notice to the insured or claimant,
661 public adjuster, or legal representative before scheduling a
662 meeting with the claimant or an onsite inspection of the insured
663 property. The insured or claimant may deny access to the
664 property if the notice has not been provided. The insured or
665 claimant may waive the 48-hour notice.
666 (17)(14) The public adjuster must ensure that prompt
667 notice is given of the claim to the insurer, the public
668 adjuster's contract is provided to the insurer, the property is
669 available for inspection of the loss or damage by the insurer,
670 and the insurer is given an opportunity to interview the insured
671 directly about the loss and claim. The insurer must be allowed
672 to obtain necessary information to investigate and respond to
673 the claim.
674 (a) The insurer may not exclude the public adjuster from
675 its in-person meetings with the insured. The insurer shall meet
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676 or communicate with the public adjuster in an effort to reach
677 agreement as to the scope of the covered loss under the
678 insurance policy. The public adjuster shall meet or communicate
679 with the insurer in an effort to reach agreement as to the scope
680 of the covered loss under the insurance policy. This section
681 does not impair the terms and conditions of the insurance policy
682 in effect at the time the claim is filed.
683 (b) A public adjuster may not restrict or prevent an
684 insurer, company employee adjuster, independent adjuster,
685 attorney, investigator, or other person acting on behalf of the
686 insurer from having reasonable access at reasonable times to any
687 insured or claimant or to the insured property that is the
688 subject of a claim.
689 (c) A public adjuster may not act or fail to reasonably
690 act in any manner that obstructs or prevents an insurer or
691 insurer's adjuster from timely conducting an inspection of any
692 part of the insured property for which there is a claim for loss
693 or damage. The public adjuster representing the insureds may be
694 present for the insurer's inspection, but if the unavailability
695 of the public adjuster otherwise delays the insurer's timely
696 inspection of the property, the public adjuster or the insureds
697 must allow the insurer to have access to the property without
698 the participation or presence of the public adjuster or insureds
699 in order to facilitate the insurer's prompt inspection of the
700 loss or damage.
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701 (18)(15) A licensed contractor under part I of chapter
702 489, or a subcontractor of such licensee, may not advertise,
703 solicit, offer to handle, handle, or perform public adjuster
704 services as provided in subsection (1) unless licensed and
705 compliant as a public adjuster under this chapter. The
706 prohibition against solicitation does not preclude a contractor
707 from suggesting or otherwise recommending to a consumer that the
708 consumer consider contacting his or her insurer to determine if
709 the proposed repair is covered under the consumer's insurance
710 policy, except as it relates to solicitation prohibited in s.
711 489.147. In addition, the contractor may discuss or explain a
712 bid for construction or repair of covered property with the
713 residential property owner who has suffered loss or damage
714 covered by a property insurance policy, or the insurer of such
715 property, if the contractor is doing so for the usual and
716 customary fees applicable to the work to be performed as stated
717 in the contract between the contractor and the insured.
718 (19)(16) A public adjuster shall not acquire any interest
719 in salvaged property, except with the written consent and
720 permission of the insured through a signed affidavit.
721 (20)(17) A public adjuster, a public adjuster apprentice,
722 or a person acting on behalf of an adjuster or apprentice may
723 not enter into a contract or accept a power of attorney that
724 vests in the public adjuster, the public adjuster apprentice, or
725 the person acting on behalf of the adjuster or apprentice the
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726 effective authority to choose the persons or entities that will
727 perform repair work in a property insurance claim or provide
728 goods or services that will require the insured or third -party
729 claimant to expend funds in excess of those payable to the
730 public adjuster under the terms of the contract for adjusting
731 services.
732 (21)(18) Subsections (5)-(20) (5)-(17) apply only to
733 residential property insurance policies and condominium unit
734 owner policies as described in s. 718.111(11).
735 (22)(19) Except as otherwise provided in this chapter, no
736 person, except an attorney at law or a licensed public adjuster,
737 may for money, commission, or any other thing of value, directly
738 or indirectly:
739 (a) Prepare, complete, or file an insurance claim for an
740 insured or a third-party claimant;
741 (b) Act on behalf of or aid an insured or a third -party
742 claimant in negotiating for or effecting the settlement of a
743 claim for loss or damage covered by an insurance contract;
744 (c) Offer to initiate or negotiate a claim on behalf of an
745 insured;
746 (d) Advertise services that require a license as a public
747 adjuster; or
748 (e) Solicit, investigate, or adjust a claim on behalf of a
749 public adjuster, an insured, or a third-party claimant.
750 (23)(20) The department may take administrative actions
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751 and impose fines against any persons performing claims
752 adjusting, soliciting, or any other services described in this
753 section without the licensure required under this section or s.
754 626.112.
755 (24)(21) A public adjuster, public adjuster apprentice, or
756 public adjusting firm that solicits a claim and does not enter
757 into a contract with an insured or a third-party claimant
758 pursuant to paragraph (13)(a) (10)(a) may not charge an insured
759 or a third-party claimant or receive payment by any other source
760 for any type of service related to the insured or third -party
761 claimant's claim.
762 (25)(22)(a) Any following act by a public adjuster, a
763 public adjuster apprentice, or a person acting on behalf of a
764 public adjuster or public adjuster apprentice is prohibited and
765 shall result in discipline as applicable under this part:
766 1. Offering to a residential property owner a rebate,
767 gift, gift card, cash, coupon, waiver of any insurance
768 deductible, or any other thing of value in exchange for:
769 a. Allowing a contractor, a public adjuster, a public
770 adjuster apprentice, or a person acting on behalf of a public
771 adjuster or public adjuster apprentice to conduct an inspection
772 of the residential property owner's roof; or
773 b. Making an insurance claim for damage to the residential
774 property owner's roof.
775 2. Offering, delivering, receiving, or accepting any
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776 compensation, inducement, or reward for the referral of any
777 services for which property insurance proceeds would be used for
778 roofing repairs or replacement.
779 (b) Notwithstanding the fine set forth in s. 626.8698, a
780 public adjuster or public adjuster apprentice may be subject to
781 a fine not to exceed $10,000 per act for a violation of this
782 subsection and a fine not to exceed $20,000 per act f or a
783 violation of this subsection that occurs during a state of
784 emergency declared by executive order or proclamation of the
785 Governor pursuant to s. 252.36.
786 (c) A person who engages in an act prohibited by this
787 subsection and who is not a public adjuster or a public adjuster
788 apprentice, or is not otherwise exempt from licensure, is guilty
789 of the unlicensed practice of public adjusting and may be:
790 1. Subject to all applicable penalties set forth in this
791 part.
792 2. Notwithstanding subparagraph 1., subject to a fine not
793 to exceed $10,000 per act for a violation of this subsection and
794 a fine not to exceed $20,000 per act for a violation of this
795 subsection that occurs during a state of emergency declared by
796 executive order or proclamation of the Governor pursuant to s.
797 252.36.
798 Section 10. Section 626.860, Florida Statutes, is amended
799 to read:
800 626.860 Attorneys at law; exemption.—Attorneys at law duly
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801 licensed to practice law in the courts of this state, and in
802 good standing with The Florida Bar, shall not be required to be
803 licensed under the provisions of this code to authorize them to
804 adjust or participate in the adjustment of any claim, loss, or
805 damage arising under policies or contracts of insurance. This
806 exemption does not extend to the employees, interns, volunteers,
807 or contractors of an attorney or of a law firm.
808 Section 11. Section 626.875, Florida Statutes, is amended
809 to read:
810 626.875 Office and records.—
811 (1)(a) Each appointed independent adjuster and licensed
812 public adjuster must maintain a place of business in this state
813 which is accessible to the public and keep therein the usual and
814 customary records pertaining to transactions under the license.
815 This provision does not prohibit maintenance of such an office
816 in the home of the licensee.
817 (b) A license issued under this chapter must at all times
818 be posted in a conspicuous place in the principal place of
819 business of the license holder. If the licensee is conducting
820 business away from the place of business such that the license
821 cannot be posted, the licensee shall have such license in his or
822 her actual possession at the time of carrying on such business.
823 (2) The records of the adjuster relating to a particular
824 claim or loss shall be so retained in the adjuster's place of
825 business for a period of not less than 5 years after completion
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826 of the adjustment and shall be available for inspection by the
827 department at all times. This provision shall not be deemed to
828 prohibit return or delivery to the insurer or insured of
829 documents furnished to or prepared by the adjuster and required
830 by the insurer or insured to be returned or delivered thereto.
831 At a minimum, the following records must be maintained for a
832 period of not less than 5 years:
833 (a) Name, address, telephone number, and e-mail address of
834 the insured, and the name of the attorney representing the
835 insured, if applicable.
836 (b) The date, location, and amount of the loss.
837 (c) An unaltered copy of the executed disclosure document
838 required by s. 626.8796.
839 (d) An unaltered copy of the executed public adjuster
840 contract required by s. 626.8796.
841 (e) A copy of the estimate of damages provided to the
842 insurer.
843 (f) The name of the insurer; the name of the claims
844 representative of the insurer; and the amount, expiration date,
845 and number of each policy under which the loss is covered.
846 (g) An itemized statement of the recoveries by the insured
847 from the sources known to the adjuster.
848 (h) An itemized statement of all compensation received by
849 the public adjuster from any source, in connection with the
850 loss.
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851 (i) A register of all money received, deposited,
852 disbursed, and withdrawn in connection with a transaction with
853 the insured, including fees, transfers, and disbursements in
854 connection with the loss.
855 Section 12. Section 626.8796, Florida Statutes, is amended
856 to read:
857 626.8796 Public adjuster contracts; disclosure statement;
858 fraud statement.—
859 (1) All contracts for public adjuster services must be in
860 writing in at least 12-point font, titled "Public Adjuster
861 Contract" and prominently display the following statement on the
862 contract in minimum 18-point bold type before the space reserved
863 for in the contract for the signature of the insured: "Pursuant
864 to s. 817.234, Florida Statutes, any person who, with t he intent
865 to injure, defraud, or deceive an insurer or insured, prepares,
866 presents, or causes to be presented a proof of loss or estimate
867 of cost or repair of damaged property in support of a claim
868 under an insurance policy knowing that the proof of loss o r
869 estimate of claim or repairs contains false, incomplete, or
870 misleading information concerning any fact or thing material to
871 the claim commits a felony of the third degree, punishable as
872 provided in s. 775.082, s. 775.083, or s. 775.084, Florida
873 Statutes."
874 (2) A public adjuster contract relating to a property and
875 casualty claim must contain the full name, permanent business
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876 address, phone number, e-mail address, and license number of the
877 public adjuster; the full name of the public adjusting firm; and
878 the insured's full name, and street address, phone number, and
879 e-mail address, together with a brief description of the loss.
880 The contract must state the percentage of compensation for the
881 public adjuster's services in minimum 18-point bold type before
882 the space reserved for in the contract for the signature of the
883 insured; the type of claim, including an emergency claim,
884 nonemergency claim, or supplemental claim; the initials of the
885 named insured on each page that does not contain the insured's
886 signature; the signatures of the public adjuster and all named
887 insureds; and the signature date. If all of the named insureds'
888 signatures are not available, the public adjuster must submit an
889 affidavit signed by the available named insureds attesting that
890 they have authority to enter into the contract and settle all
891 claim issues on behalf of the named insureds. An unaltered copy
892 of the executed contract must be remitted to the insured at the
893 time of execution and to the insurer within 10 30 days after
894 execution. A public adjusting firm that adjusts claims primarily
895 for commercial entities with operations in more than one state
896 and that does not directly or indirectly perform adjusting
897 services for insurers or individual homeowners is deemed to
898 comply with the requirements of this subsection if, at the time
899 a proof of loss is submitted, the public adjusting firm remits
900 to the insurer an affidavit signed by the public adjuster or
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901 public adjuster apprentice that identifies:
902 (a) The full name, permanent business address, phone
903 number, e-mail address, and license number of the public
904 adjuster or public adjuster apprentice.
905 (b) The full name of the public adjusting firm.
906 (c) The insured's full name, and street address, phone
907 number, and e-mail address, together with a brief description of
908 the loss.
909 (d) An attestation that the compensation for public
910 adjusting services will not exceed the limitations provided by
911 law.
912 (e) The type of claim, including an emergency claim,
913 nonemergency claim, or supplemental claim.
914 (3) The public adjuster shall not provide services until
915 both the insured and insurer have been provided with unaltered
916 copies of the executed contract.
917 (4) The insured may rescind the contract for public
918 adjuster services if the public adjuster has not submitt ed a
919 written estimate to the insurer within 60 days of executing the
920 contract.
921 (5) Before the signing of the contract, the public
922 adjuster shall provide the insured with a separate disclosure
923 document to be signed by the insured, on a form adopted by the
924 department, regarding the claim process that accomplishes the
925 following:
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926 (a) Defines the following types of adjusters who may be
927 involved in the claim process: company adjuster, independent
928 adjuster, and public adjuster.
929 (b) Explains that the public adjuster is not a
930 representative or employee of the insurer.
931 (c) Explains that the insured is not required to hire a
932 public adjuster, but has a right to do so.
933 (d) Explains that an insured has a right to initiate
934 direct communications with the insured's attorney, the insurer,
935 the company adjuster, the insurer's attorney, or any person
936 regarding the settlement of the insured's claim.
937 (e) Explains that the public adjuster's salary, fee,
938 commission, or other consideration to be paid to a public
939 adjuster is the insured's responsibility.
940 (f) Explains that the public adjuster is required to
941 provide the insured an unaltered copy of the executed contract
942 at the time of execution.
943 (g) Explains that if the contract was entered based on
944 events that are the subject of a declaration of a state of
945 emergency by the Governor, the insured has a right to rescind
946 the contract within 30 days.
947 (6) A contract that does not comply with this section is
948 invalid and unenforceable.
949 (7) The department may adopt rules pursuant to ss.
950 120.536(1) and 120.54 to implement this section, including rules
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951 to adopt forms required by this section.
952 Section 13. Section 626.8797, Florida Statutes, is amended
953 to read:
954 626.8797 Proof of loss; fraud statement.—All proof-of-loss
955 statements must prominently display the following statement in
956 minimum 18-point bold type before the space reserved in the
957 contract for the signature of the insured: "Pursuant to s.
958 817.234, Florida Statutes, any person who, with the intent to
959 injure, defraud, or deceive any insurer or insured, prepares,
960 presents, or causes to be presented a proof of loss or estimate
961 of cost or repair of damaged property in support of a claim
962 under an insurance policy knowing that the proof of loss or
963 estimate of claim or repairs contains any false, incomplete, or
964 misleading information concerning any fact or thing material to
965 the claim commits a felony of the third degree, punishable as
966 provided in s. 775.082, s. 775.083, or s. 775.084, Florida
967 Statutes."
968 Section 14. Paragraph (a) of subsection (1) of section
969 626.9541, Florida Statutes, is amended to read:
970 626.9541 Unfair methods of competition and unfair or
971 deceptive acts or practices defined.—
972 (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
973 ACTS.—The following are defined as unfair methods of competition
974 and unfair or deceptive acts or practices:
975 (a) Misrepresentations and false advertising of insurance
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976 policies.—Knowingly making, issuing, circulating, or causing to
977 be made, issued, or circulated, any estimate, illustration,
978 circular, statement, sales presentation, omission, comparison,
979 or property and casualty certificate of insurance altered after
980 being issued, which:
981 1. Misrepresents the benefits, advantages, conditions, or
982 terms of any insurance policy.
983 2. Misrepresents the dividends or share of the surplus to
984 be received on any insurance policy.
985 3. Makes any false or misleading statements as to the
986 dividends or share of surplus previously paid on any insurance
987 policy.
988 4. Is misleading, or is a misrepresentation, as to the
989 financial condition of any person or as to the legal reserve
990 system upon which any life insurer operates.
991 5. Uses any name or title of any insurance policy or class
992 of insurance policies misrepresenting the true nature thereof.
993 6. Is a misrepresentation for the purpose of inducing, or
994 tending to induce, the lapse, forfeiture, exchange, conversion,
995 or surrender of any insurance policy.
996 7. Is a misrepresentation for the purpose of effecting a
997 pledge or assignment of, or effecting a loan against, any
998 insurance policy.
999 8. Misrepresents any insurance policy as being shares of
1000 stock or misrepresents ownership interest in the company.
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1001 9. Uses any advertisement that would mislead or otherwise
1002 cause a reasonable person to believe mistakenly that the state
1003 or the Federal Government is responsible for the insurance sales
1004 activities of any person or stands behind any person's credit or
1005 that any person, the state, or the Federal Government guarantees
1006 any returns on insurance products or is a source of payment of
1007 any insurance obligation of or sold by any person.
1008 10. Fails to disclose a third party that receives
1009 royalties, referral fees, or other remuneration for sponsorship,
1010 marketing, or use of third-party branding for a policy of health
1011 insurance as defined in s. 624.603.
1012 Section 15. Paragraph (c) of subsection (2) of section
1013 627.4025, Florida Statutes, is amended, and paragraph (d) is
1014 added to that subsection, to read:
1015 627.4025 Residential coverage and hurricane coverage
1016 defined.—
1017 (2) As used in policies providing residential coverage:
1018 (c) "Hurricane" for purposes of paragraphs (a) and (b)
1019 means a storm system that has been declared to be a hurricane by
1020 the National Hurricane Center of the National Weather Service.
1021 The duration of the hurricane includes the time period, in
1022 Florida:
1023 1. Beginning at the time a hurricane watch or hurricane
1024 warning is issued for any part of Florida by the National
1025 Hurricane Center of the National Weather Service; and
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1026 2. Continuing for the time period during which the
1027 hurricane conditions exist anywhere in Florida; and
1028 3. Ending 24 72 hours following the termination of the
1029 last hurricane watch or hurricane warning issued for any part of
1030 Florida by the National Hurricane Center of the National Weather
1031 Service.
1032 (d) "Hurricane deductible" means the deductible applicable
1033 to loss caused by a hurricane.
1034 Section 16. Paragraph (b) of subsection (1) and paragraph
1035 (b) of subsection (2) of section 627.4133, Florida Statutes, are
1036 amended to read:
1037 627.4133 Notice of cancellation, nonrenewal, or renewal
1038 premium.—
1039 (1) Except as provided in subsection (2):
1040 (b) An insurer issuing a policy providing coverage for
1041 property, casualty, except mortgage guaranty, surety, or marine
1042 insurance, other than motor vehicle insurance subject to s.
1043 627.728 or s. 627.7281, shall give the first-named insured
1044 written notice of cancellation or termination other than
1045 nonrenewal at least 45 days prior to the effective date of the
1046 cancellation or termination, including in the written notice the
1047 reason or reasons for the cancellation or termination, except
1048 that:
1049 1. When cancellation is for nonpayment of premium, at
1050 least 10 days' written notice of cancellation accompanied by the
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1051 reason therefor shall be given. As used in this subparagraph and
1052 s. 440.42(3), the term "nonpayment of premium" means failure of
1053 the named insured to discharge when due any of her or his
1054 obligations in connection with the payment of premiums on a
1055 policy or any installment of such premium, whether the premium
1056 is payable directly to the insurer or its agent or indirectly
1057 under any premium finance plan or extension of credit, or
1058 failure to maintain membership in an organization if such
1059 membership is a condition precedent to insurance coverage.
1060 "Nonpayment of premium" also means the failure of a financial
1061 institution to honor an insurance applicant's check after
1062 delivery to a licensed agent for payment of a premium, even if
1063 the agent has previously delivered or transferred the premium to
1064 the insurer. If a dishonored check represents the initial
1065 premium payment, the contract and all contractual obligations
1066 shall be void ab initio unless the nonpayment is cured within
1067 the earlier of 5 days after actual notice by certified mail is
1068 received by the applicant or 15 days after notice is sent to the
1069 applicant by certified mail or registered mail, and if the
1070 contract is void, any premium received by the insurer from a
1071 third party shall be refunded to that party in full; and
1072 2. When such cancellation or termination occurs during the
1073 first 90 days during which the insurance is in force and the
1074 insurance is canceled or terminated for reasons other than
1075 nonpayment of premium, at least 20 days' written notice of
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1076 cancellation or termination accompanied by the reason therefor
1077 shall be given except where there has been a material
1078 misstatement or misrepresentation or failure to comply with the
1079 underwriting requirements established by the insurer.
1080
1081 After the policy has been in effect for 60 90 days, no such
1082 policy shall be canceled by the insurer except when there has
1083 been a material misstatement, a nonpayment of premium, a failure
1084 to comply with underwriting requirements established by the
1085 insurer within 90 days of the date of effectuation of coverage,
1086 or a substantial change in the risk covered by the policy or
1087 when the cancellation is for all insureds under such policies
1088 for a given class of insureds. This subsection does not apply to
1089 individually rated risks having a policy term of less than 90
1090 days.
1091 (2) With respect to any personal lines or commercial
1092 residential property insurance policy, including, but not
1093 limited to, any homeowner, mobile home owner, farmowner,
1094 condominium association, condominium unit owner, apartment
1095 building, or other policy covering a residential structure or
1096 its contents:
1097 (b) The insurer shall give the first-named insured written
1098 notice of nonrenewal, cancellation, or termination at least 120
1099 days before the effective date of the nonrenewal, cancellation,
1100 or termination. The notice must include the reason for the
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1101 nonrenewal, cancellation, or termination, except that:
1102 1. If cancellation is for nonpayment of premium, at least
1103 10 days' written notice of cancellation accompanied by the
1104 reason therefor must be given. As used in this subparagraph, the
1105 term "nonpayment of premium" means failure of the named insured
1106 to discharge when due her or his obligations for paying the
1107 premium on a policy or an installment of such premium, whether
1108 the premium is payable directly to the insurer or its agent or
1109 indirectly under a premium finance plan or extension of credit,
1110 or failure to maintain membership in an organization if such
1111 membership is a condition precedent to insurance coverage. The
1112 term also means the failure of a financial institution to honor
1113 an insurance applicant's check after delivery to a licensed
1114 agent for payment of a premium even if the agent has previously
1115 delivered or transferred the premium to the insurer. If a
1116 dishonored check represents the initial premium payment, the
1117 contract and all contractual obligations are void ab initio
1118 unless the nonpayment is cured within the earlier of 5 days
1119 after actual notice by certified mail is received by the
1120 applicant or 15 days after notice is sent to the applicant by
1121 certified mail or registered mail. If the contract is void, any
1122 premium received by the insurer from a third party must be
1123 refunded to that party in full.
1124 2. If cancellation or termination occurs during the first
1125 90 days the insurance is in force and the insurance is canceled
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1126 or terminated for reasons other than nonpayment of premium, at
1127 least 20 days' written notice of cancellation or termination
1128 accompanied by the reason therefor must be given unless there
1129 has been a material misstatement or misrepresentation or a
1130 failure to comply with the underwriting requirements established
1131 by the insurer.
1132 3. After the policy has been in effect for 60 90 days, the
1133 policy may not be canceled by the insurer unless there has been
1134 a material misstatement; a nonpayment of premium; a failure to
1135 comply, within 90 days after the date of effectuation of
1136 coverage, with underwriting requirements established by the
1137 insurer before the date of effectuation of coverage; or a
1138 substantial change in the risk covered by the policy or unless
1139 the cancellation is for all insureds under such policies for a
1140 given class of insureds. This subparagraph does not apply to
1141 individually rated risks that have a policy term of less than 90
1142 days.
1143 4. After a policy or contract has been in effect for more
1144 than 90 days, the insurer may not cancel or terminate the policy
1145 or contract based on credit information available in public
1146 records.
1147 5. A policy that is nonrenewed by Citizens Property
1148 Insurance Corporation, pursuant to s. 627.351(6), for a policy
1149 that has been assumed by an authorized insurer offering
1150 replacement coverage to the policyholder is exempt from the
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1151 notice requirements of paragraph (a) and this paragraph. In such
1152 cases, the corporation must give the named insured written
1153 notice of nonrenewal at least 45 days before the effective date
1154 of the nonrenewal.
1155 6. Notwithstanding any other provision of law, an insurer
1156 may cancel or nonrenew a property insurance policy after at
1157 least 45 days' notice if the office finds that the early
1158 cancellation of some or all of the insurer's policies is
1159 necessary to protect the best interests of the public or
1160 policyholders and the office approves the insurer's plan for
1161 early cancellation or nonrenewal of some or all of its policies.
1162 The office may base such finding upon the financial condition of
1163 the insurer, lack of adequate reinsurance coverage for hurricane
1164 risk, or other relevant factors. The office may condition its
1165 finding on the consent of the insurer to be placed under
1166 administrative supervision pursuant to s. 624.81 or to the
1167 appointment of a receiver under chapter 631.
1168 7. A policy covering both a home and a motor vehicle may
1169 be nonrenewed for any reason applicable to the property or motor
1170 vehicle insurance after providing 90 days' notice.
1171 Section 17. Effective January 1, 2024, section 627.4554,
1172 Florida Statutes, is amended to read:
1173 627.4554 Suitability in annuity transactions investments.—
1174 (1) PURPOSE.—The purpose of this section is to require
1175 agents to act in the best interest of the consumer when making
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1176 a recommendation of an annuity and to require insurers to
1177 establish and maintain a system to supervise so set forth
1178 standards and procedures for making recommendations to consumers
1179 which result in transactions involving annuity products, and to
1180 establish a system for supervising such recommendations in order
1181 to ensure that the insurance needs and financial objectives of
1182 consumers are effectively appropriately addressed at the time of
1183 the transaction.
1184 (2) SCOPE.—This section applies to any sale or
1185 recommendation of made to a consumer to purchase, exchange, or
1186 replace an annuity by an insurer or its agent, and which results
1187 in the purchase, exchange, or replacement recommended .
1188 (3) DEFINITIONS.—As used in this section, the term:
1189 (a) "Agent" means a person or entity required to be
1190 licensed under the laws of this state to sell, solicit, or
1191 negotiate insurance, including annuities. For purposes of this
1192 section, the term includes an insurer where no agent is involved
1193 has the same meaning as provided in s. 626.015.
1194 (b) "Annuity" means an insurance product under state law
1195 which is individually solicited, whether classified as an
1196 individual or group annuity.
1197 (c) "Cash compensation" means any discount, concession,
1198 fee, service fee, commission, sales charge, loan, override, or
1199 cash benefit received by an agent in connection with the
1200 recommendation or sale of an annuity from an insurer,
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1201 intermediary, or directly from the consumer.
1202 (d) "Consumer profile information" means information that
1203 is reasonably appropriate to determine whether a recommendation
1204 addresses the consumer's financial situation, insurance needs
1205 and financial objectives, including, at a minimum, the
1206 following:
1207 1. Age.
1208 2. Annual income.
1209 3. Financial situation and needs, including debts and
1210 other obligations.
1211 4. Financial experience.
1212 5. Insurance needs.
1213 6. Financial objectives.
1214 7. Intended use of the annuity.
1215 8. Financial time horizon.
1216 9. Existing assets or financial products, including
1217 investment, annuity, and insurance holdings.
1218 10. Liquidity needs.
1219 11. Liquid net worth.
1220 12. Risk tolerance, including, but not limited to,
1221 willingness to accept nonguaranteed elements in the annuity.
1222 13. Financial resources used to fund the annuity.
1223 14. Tax status.
1224 (e)(c) "FINRA" means the Financial Industry Regulatory
1225 Authority or a succeeding agency.
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1226 (f)(d) "Insurer" has the same meaning as provided in s.
1227 624.03.
1228 (g) "Intermediary" means an entity contracted directly
1229 with an insurer or with another entity contracted with an
1230 insurer to facilitate the sale of the insurer's annuities by
1231 agents.
1232 (h) "Material conflict of interest" means a financial
1233 interest of the agent in the sale of an annuity that a
1234 reasonable person would expect to influence the impartiality of
1235 a recommendation. The term does not include cash compensation or
1236 noncash compensation.
1237 (i) "Noncash compensation" means any form of compensation
1238 that is not cash compensation, including, but not limited to,
1239 health insurance, office rent, office support, and retirement
1240 benefits.
1241 (j) "Nonguaranteed elements" means the premiums, credited
1242 interest rates, including any bonus; benefits; values;
1243 dividends; noninterest based credits; charges; or elements of
1244 formulas used to determine any of these, that are subjec t to
1245 company discretion and are not guaranteed at issue. An element
1246 is considered nonguaranteed if any of the underlying
1247 nonguaranteed elements are used in its calculation.
1248 (k)(e) "Recommendation" means advice provided by an
1249 insurer or its agent to an individual a consumer that was
1250 intended to result or does result which would result in a the
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1251 purchase, an exchange, or a replacement of an annuity in
1252 accordance with that advice. The term does not include general
1253 communication to the public, generalized customer services,
1254 assistance or administrative support, general educational
1255 information and tools, prospectuses, or other product and sales
1256 material.
1257 (l)(f) "Replacement" means a transaction in which a new
1258 annuity policy or contract is to be purchased and it is known or
1259 should be known to the proposing insurer or its agent, or to the
1260 proposing insurer whether or not an agent is involved, that by
1261 reason of such transaction an existing annuity or other
1262 insurance policy has been or is to be any of the following or
1263 contract will be:
1264 1. Lapsed, forfeited, surrendered or partially
1265 surrendered, assigned to the replacing insurer, or otherwise
1266 terminated;
1267 2. Converted to reduced paid-up insurance, continued as
1268 extended term insurance, or otherwise reduced in value due to
1269 the use of nonforfeiture benefits or other policy values;
1270 3. Amended so as to effect a reduction in benefits or the
1271 term for which coverage would otherwise remain in force or for
1272 which benefits would be paid;
1273 4. Reissued with a reduction in cash value; or
1274 5. Used in a financed purchase.
1275 (m) "SEC" means the United States Securities and Exchange
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1276 Commission.
1277 (g) "Suitability information" means information related to
1278 the consumer which is reasonably appropriate to determine the
1279 suitability of a recommendation made to the consumer, including
1280 the following:
1281 1. Age;
1282 2. Annual income;
1283 3. Financial situation and needs, including the financial
1284 resources used for funding the annuity;
1285 4. Financial experience;
1286 5. Financial objectives;
1287 6. Intended use of the annuity;
1288 7. Financial time horizon;
1289 8. Existing assets, including investment and life
1290 insurance holdings;
1291 9. Liquidity needs;
1292 10. Liquid net worth;
1293 11. Risk tolerance; and
1294 12. Tax status.
1295 (4) EXEMPTIONS.—Unless otherwise specifically included,
1296 this section does not apply to transactions involving:
1297 (a) Direct-response solicitations where there is no
1298 recommendation based on information collected from the consumer
1299 pursuant to this section;
1300 (b) Contracts used to fund:
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1301 1. An employee pension or welfare benefit plan that is
1302 covered by the federal Employee Retirement and Income Security
1303 Act;
1304 2. A plan described by s. 401(a), s. 401(k), s. 403(b), s.
1305 408(k), or s. 408(p) of the Internal Revenue Code, if
1306 established or maintained by an employer;
1307 3. A government or church plan defined in s. 414 of the
1308 Internal Revenue Code, a government or church welfare benefit
1309 plan, or a deferred compensation plan of a state or local
1310 government or tax-exempt organization under s. 457 of the
1311 Internal Revenue Code; or
1312 4. A nonqualified deferred compensation arrangement
1313 established or maintained by an employer or plan sponsor;
1314 (c)5. Settlements or assumptions of liabilities associated
1315 with personal injury litigation or a dispute or claim-resolution
1316 process; or
1317 (d)6. Formal prepaid funeral contracts.
1318 (5) DUTIES OF INSURERS AND AGENTS.—
1319 (a) An agent, when making a recommendation of an annuity,
1320 shall act in the best interest of the consumer under the
1321 circumstances known at the time the recommendation is made,
1322 without placing the financial interest of the agent or insurer
1323 ahead of the consumer's interest. An agent has acted in the best
1324 interest of the consumer if the agent has satisfied the
1325 following obligations regarding care, disclosure, conflict of
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1326 interest, and documentation:
1327 1.a. The agent, in making a recommendation, shall exercise
1328 reasonable diligence, care, and skill to:
1329 (I) Know the financial situation, insurance needs, and
1330 financial objectives of the consumer.
1331 (II) Understand the available options after making a
1332 reasonable inquiry into options available to the agent.
1333 (III) Have a reasonable basis to believe the recommended
1334 option effectively addresses the consumer's financial situation,
1335 insurance needs, and financial objectives over the life of the
1336 product, as evaluated in light of the consumer profile
1337 information.
1338 (IV) Communicate the reason or reasons for the
1339 recommendation.
1340 b. The requirements of subparagraph a. include:
1341 (I) Making reasonable efforts to obtain consumer profile
1342 information from the consumer before the recommendation of an
1343 annuity.
1344 (II) Requiring an agent to consider the types of products
1345 the agent is authorized and licensed to recommend or sell
1346 address the consumer's financial situation, insurance needs, and
1347 financial objectives. This does not require analysis or
1348 consideration of any products outside the authority and license
1349 of the agent or other possible alternative products or
1350 strategies available in the market at the time of the
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1351 recommendation. Agents shall be held to standards applicable to
1352 agents with similar authority and licensure.
1353 (III) Having a reasonable basis to believe the consumer
1354 would benefit from certain features of the annuity, such as
1355 annuitization, death or living benefit or other insurance-
1356 related features.
1357 c. The requirements of this subsection do not create a
1358 fiduciary obligation or relationship and only create a
1359 regulatory obligation as provided in this section.
1360 d. The consumer profile information, characteristics of
1361 the insurer and product costs, rates, benefits and features are
1362 those factors generally relevant in making a determination
1363 whether an annuity effectively addresses the consumer's
1364 financial situation, insurance needs, and financial objectives
1365 but the level of importance of each factor under the care
1366 obligation of this paragraph may vary depending on the facts and
1367 circumstances of a particular case. However, each factor may not
1368 be considered in isolation.
1369 e. The requirements under subparagraph a. apply to the
1370 particular annuity as a whole and the underlying subaccounts to
1371 which funds are allocated at the time of purchase or exchange of
1372 an annuity, and riders and similar product enhancements, if any.
1373 f. Subparagraph a. does not require that the annuity with
1374 the lowest one-time occurrence compensation structure or
1375 multiple occurrence compensation structure shall necessarily be
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1376 recommended.
1377 g. Subparagraph a. does not require the agent to have
1378 ongoing monitoring obligations under the care oblig ation,
1379 although such an obligation may be separately owed under the
1380 terms of a fiduciary, consulting, investment, advising, or
1381 financial planning agreement between the consumer and the agent.
1382 h. In the case of an exchange or replacement of an
1383 annuity, the agent shall consider the whole transaction, which
1384 includes taking into consideration whether:
1385 (I) The consumer will incur a surrender charge; be subject
1386 to the commencement of a new surrender period; lose existing
1387 benefits, such as death, living or other contractual benefits;
1388 or be subject to increased fees, investment advisory fees, or
1389 charges for riders and similar product enhancements.
1390 (II) The replacing product would substantially benefit the
1391 consumer in comparison to the replaced product over the life of
1392 the product.
1393 (III) The consumer has had another annuity exchange or
1394 replacement and, in particular, an exchange or replacement
1395 within the preceding 60 months.
1396 i. This section does not require an agent to obtain any
1397 license other than an agent license with the appropriate line of
1398 authority to sell, solicit, or negotiate insurance in this
1399 state, including, but not limited to, any securities license, in
1400 order to fulfill the duties and obligations contained in this
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1401 section; provided, the agent does not give advice or provide
1402 services that are otherwise subject to securities laws or engage
1403 in any other activity requiring other professional licenses.
1404 2.a. Before the recommendation or sale of an annuity, the
1405 agent shall prominently disclose to the consumer on a form
1406 substantially similar to that posted on the office website as
1407 Appendix A:
1408 (I) A description of the scope and terms of the
1409 relationship with the consumer and the role of the agent in the
1410 transaction.
1411 (II) An affirmative statement on whether the agent is
1412 licensed and authorized to sell the following products:
1413 (A) Fixed annuities.
1414 (B) Fixed indexed annuities.
1415 (C) Variable annuities.
1416 (D) Life insurance.
1417 (E) Mutual funds.
1418 (F) Stocks and bonds.
1419 (G) Certificates of deposit.
1420 (III) An affirmative statement describing the insurers for
1421 which the agent is authorized, contracted or appointed, or
1422 otherwise able to sell insurance products, using the following
1423 descriptions:
1424 (A) From one insurer;
1425 (B) From two or more insurers; or
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1426 (C) From two or more insurers, although primarily
1427 contracted with one insurer.
1428 (IV) A description of the sources and types of cash
1429 compensation and noncash compensation to be received by the
1430 agent, including whether the agent is to be compensated for t he
1431 sale of a recommended annuity by commission as part of premium
1432 or other remuneration received from the insurer, intermediary or
1433 other agent, or by fee as a result of a contract for advice or
1434 consulting services; and
1435 (V) A notice of the consumer's right to request additional
1436 information regarding cash compensation described in
1437 subparagraph b.
1438 b. Upon request of the consumer or the consumer's
1439 designated representative, the agent shall disclose:
1440 (I) A reasonable estimate of the amount of cash
1441 compensation to be received by the agent, which may be stated as
1442 a range of amounts or percentages.
1443 (II) Whether the cash compensation is a one-time or
1444 multiple occurrence amount, and if a multiple occurrence amount,
1445 the frequency and amount of the occurrence, which may be stated
1446 as a range of amounts or percentages; and When recommending the
1447 purchase or exchange of an annuity to a consumer which results
1448 in an insurance transaction or series of insurance transactions,
1449 the agent, or the insurer where no agent is involved, must have
1450 reasonable grounds for believing that the recommendation is
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1451 suitable for the consumer, based on the consumer's suitability
1452 information, and that there is a reasonable basis to believe all
1453 of the following:
1454 c.1. Before or at the time of the recommendation or sale
1455 of an annuity, the agent shall have a reasonable basis to
1456 believe the consumer has been reasonably informed of various
1457 features of the annuity, such as the potential surrender period
1458 and surrender charge; potential tax penalty if the consumer
1459 sells, exchanges, surrenders, or annuitizes the annuity;
1460 mortality and expense fees; any annual fees; investment advisory
1461 fees; potential charges for and features of riders or other
1462 options of the annuity; limitations on interest returns;
1463 potential changes in nonguaranteed elements of the annuity;
1464 insurance and investment components; and market risk.
1465 2. The consumer would benefit from certain features of the
1466 annuity, such as tax-deferred growth, annuitization, or the
1467 death or living benefit.
1468 3. An agent shall identify and avoid or reasonably manage
1469 and disclose material conflicts of interest, including material
1470 conflicts of interest related to an ownership interest.
1471 4. An agent shall at the time of the recommendation or
1472 sale:
1473 a. Make a written record of any recommendation and the
1474 basis for the recommendation, subject to this section.
1475 b. Obtain a consumer signed statement on a form
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1476 substantially similar to that posted on the office website as
1477 Appendix B, documenting:
1478 (I) A consumer's refusal to provide the consumer profile
1479 information, if any.
1480 (II) A consumer's understanding of the ramifications of
1481 not providing his or her consumer profile information or
1482 providing insufficient consumer profile information.
1483 c. Obtain a consumer signed statement on a form
1484 substantially similar to that posted on the office website as
1485 Appendix C, acknowledging the annuity transaction is not
1486 recommended if a consumer decides to enter into an annuity
1487 transaction that is not based on the agent's recommendation.
1488 5. Application of the best interest obligation. Any
1489 requirement applicable to an agent under this subsection shall
1490 apply to every agent who has exercised material control or
1491 influence in the making of a recommendation and has received
1492 direct compensation as a result of the recommendation or sale,
1493 regardless of whether the agent has had any direct contact with
1494 the consumer. Activities such as providing or delivering
1495 marketing or education materials, product wholesaling or other
1496 back office product support, and general supervision of an agent
1497 do not, in and of themselves, constitute material control or
1498 influence.
1499 3. The particular annuity as a whole, the underlying
1500 subaccounts to which funds are allocated at the time of purchase
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1501 or exchange of the annuity, and riders and similar product
1502 enhancements, if any, are suitable; and, in the case of an
1503 exchange or replacement, the transaction as a whole is suitable
1504 for the particular consumer based on his or her suitability
1505 information.
1506 4. In the case of an exchange or replacement of an
1507 annuity, the exchange or replacement is suitable after
1508 considering whether the consumer:
1509 a. Will incur a surrender charge; be subject to the
1510 commencement of a new surrender period; lose existing benefits,
1511 such as death, living, or other contractual benefits; or be
1512 subject to increased fees, investment advisory fees, or charges
1513 for riders and similar product enhancements;
1514 b. Would benefit from product enhancements and
1515 improvements; and
1516 c. Has had another annuity exchange or replacement,
1517 including an exchange or replacement within the preceding 36
1518 months.
1519 (b) Before executing a purchase, exchange, or replacement
1520 of an annuity resulting from a recommendation, an insurer or its
1521 agent must make reasonable efforts to obtain the consumer's
1522 suitability information. The information shall be collected on
1523 form DFS-H1-1980, which is hereby incorporated by reference, and
1524 completed and signed by the applicant and agent. Questions
1525 requesting this information must be presented in at least 12-
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1526 point type and be sufficiently clear so as to be readily
1527 understandable by both the agent and the consumer. A true and
1528 correct executed copy of the form must be provided by the agent
1529 to the insurer, or to the person or entity that has contracted
1530 with the insurer to perform this function as authorized by this
1531 section, within 10 days after execution of the form, and shall
1532 be provided to the consumer no later than the date of delivery
1533 of the contract or contracts.
1534 (c) Except as provided under paragraph (d), an insurer may
1535 not issue an annuity recommended to a consumer unless there is a
1536 reasonable basis to believe the annuity is suitable based on the
1537 consumer's suitability information.
1538 (b)(d) 1. Except as provided under subparagraph 2, An
1539 insurer's issuance of an annuity must be reasonable based on all
1540 the circumstances actually known to the insurer at the time the
1541 annuity is issued. However, an insurer or its agent shall not
1542 have does not have an obligation to a consumer related to an
1543 annuity transaction under paragraph (a)1.(a) or paragraph (c)
1544 if:
1545 a.1. A recommendation has not been made;
1546 b.2. A recommendation was made and is later found to have
1547 been based on materially inaccurate information provided by the
1548 consumer;
1549 c.3. A consumer refuses to provide relevant consumer
1550 profile suitability information and the annuity transaction is
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1551 not recommended; or
1552 d.4. A consumer decides to enter into an annuity
1553 transaction that is not based on a recommendation of an insurer
1554 or its agent.
1555 2. An insurer's issuance of an annuity subject to
1556 subparagraph 1. shall be reasonable under all the circumstances
1557 actually known to the insurer at the time the annuity is issued.
1558 (c)1. Except as permitted under paragraph (b), an insurer
1559 may not issue an annuity recommended to a consumer unless there
1560 is a reasonable basis to believe the annuity would effectively
1561 address the particular consumer's financial situation, insurance
1562 needs, and financial objectives based on the consumer's consumer
1563 profile information.
1564 (e) At the time of sale, the agent or the agent's
1565 representative must:
1566 1. Make a record of any recommendation made to the
1567 consumer pursuant to paragraph (a);
1568 2. Obtain the consumer's signed statement documenting his
1569 or her refusal to provide suitability information, if
1570 applicable; and
1571 3. Obtain the consumer's signed statement acknowledging
1572 that an annuity transaction is not recommended if he or she
1573 decides to enter into an annuity transaction that is not based
1574 on the insurer's or its agent's recommendation, if applicable.
1575 (f) Before executing a replacement or exchange of an
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1576 annuity contract resulting from a recommendation, the agent must
1577 provide on form DFS-H1-1981, which is hereby incorporated by
1578 reference, information that compares the differences be tween the
1579 existing annuity contract and the annuity contract being
1580 recommended in order to determine the suitability of the
1581 recommendation and its benefit to the consumer. A true and
1582 correct executed copy of this form must be provided by the agent
1583 to the insurer, or to the person or entity that has contracted
1584 with the insurer to perform this function as authorized by this
1585 section, within 10 days after execution of the form, and must be
1586 provided to the consumer no later than the date of delivery of
1587 the contract or contracts.
1588 2.(g) An insurer shall establish and maintain a
1589 supervision system that is reasonably designed to achieve the
1590 insurer's and its agent's compliance with this section
1591 including, but not limited to, the following:.
1592 1. Such system must include, but is not limited to:
1593 a. The insurer shall establish and maintain Maintaining
1594 reasonable procedures to inform its agents of the requirements
1595 of this section and incorporating those requirements into
1596 relevant agent training manuals.;
1597 b. The insurer shall establish and maintain Establishing
1598 standards for agent product training and shall establish and
1599 maintain reasonable procedures to require its agents to comply
1600 with the requirements of subsection (6).;
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1601 c. The insurer shall provide Providing product-specific
1602 training and training materials that explain all material
1603 features of its annuity products to its agents.;
1604 d. The insurer shall establish and maintain Maintaining
1605 procedures for the review of each recommendation before issuance
1606 of an annuity which are designed to ensure that there is a
1607 reasonable basis to determine the recommended annuity would
1608 effectively address the particular consumer's financial
1609 situation, insurance needs, and financial objectives for
1610 determining that a recommendation is suitable. Such review
1611 procedures may use a screening system for identifying selected
1612 transactions for additional review and may be accomplished
1613 electronically or through other means, including, but not
1614 limited to, physical review. Such electronic or other system may
1615 be designed to require additional review only of those
1616 transactions identified for additional review using established
1617 selection criteria.;
1618 e. The insurer shall establish and maintain Maintaining
1619 reasonable procedures to detect recommendations that are not in
1620 compliance with paragraphs (a), (b), (d), and (e). This may
1621 include, but is not limited to suitable, such as confirmation of
1622 consumer profile suitability information, systematic customer
1623 surveys, agent and consumer interviews, confirmation letters,
1624 agent statements or attestations, and internal monitoring
1625 programs. This sub-subparagraph does not prevent an insurer from
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1626 using sampling procedures or from confirming the consumer
1627 profile suitability information after the issuance or delivery
1628 of the annuity.; and
1629 f. The insurer shall establish and maintain reasonable
1630 procedures to assess, prior to, or upon issuance or delivery of,
1631 an annuity, whether an agent has provided to the consumer the
1632 information required to be provided under this subsection.
1633 g. The insurer shall establish and maintain reasonable
1634 procedures to identify and address suspicious consumer refusals
1635 to provide consumer profile information.
1636 h. The insurer shall establish and maintain reasonable
1637 procedures to identify and eliminate any sales contests, sales
1638 quotas, bonuses, and noncash compensation that are based on the
1639 sales of specific annuities within a limited period of time. The
1640 requirements of this subparagraph are not intended to prohibit
1641 the receipt of health insurance, office rents, office support,
1642 retirement benefits, or other employee benefits by employees as
1643 long as those benefits are not based upon the volume of sales of
1644 a specific annuity within a limited period of time.
1645 i.f. The insurer shall annually provide providing a
1646 written report to senior managers, including the senior manager
1647 who is responsible for audit functions, which details a review,
1648 along with appropriate testing, which is reasonably designed to
1649 determine the effectiveness of the supervision system, the
1650 exceptions found, and corrective action taken or recommended, if
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1651 any.
1652 3.2. An insurer is not required to include in its
1653 supervision system:
1654 a. Agent recommendations to consumers of products other
1655 than the annuities offered by the insurer;
1656 b. Consideration of or comparison to options available to
1657 the agent or compensation relating to those options other than
1658 annuities or other products offered by the insurer.
1659 4.3. An insurer may contract for performance of a
1660 function, including maintenance of procedures, required under
1661 subparagraph 1.
1662 a. An insurer's supervision system under this subsection
1663 shall include supervision of contractual performance under this
1664 subsection If an insurer contracts for the performance of a
1665 function, the insurer must include the supervision of
1666 contractual performance as part of those procedures listed in
1667 subparagraph 1. These include, but are not limited to:
1668 (I) Monitoring and, as appropriate, conducting audits to
1669 ensure that the contracted function is properly per formed; and
1670 (II) Annually obtaining a certification from a senior
1671 manager who has responsibility for the contracted function that
1672 the manager has a reasonable basis to represent, and does not
1673 represent for representing that the function is being properly
1674 performed.
1675 b. An insurer is responsible for taking appropriate
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1676 corrective action and may be subject to sanctions and penalties
1677 pursuant to subsection (8) (7) regardless of whether the insurer
1678 contracts for performance of a function and regardless of the
1679 insurer's compliance with sub-subparagraph a.
1680 (d)(h) Neither an agent nor an insurer shall may not
1681 dissuade, or attempt to dissuade, a consumer from:
1682 1. Truthfully responding to an insurer's request for
1683 confirmation of consumer profile suitability information;
1684 2. Filing a complaint; or
1685 3. Cooperating with the investigation of a complaint.
1686 (e)1.(i) Recommendations and sales made in compliance with
1687 comparable standards shall FINRA requirements pertaining to the
1688 suitability and supervision of annuity transactions satisfy the
1689 requirements of this section. This applies to all
1690 recommendations and FINRA broker-dealer sales of variable
1691 annuities made by financial professionals in compliance with
1692 business rules, controls, and procedures that satisfy a
1693 comparable standard even if such standard would not otherwise
1694 apply to the product or recommendation at issue and fixed
1695 annuities if the suitability and supervision is similar to those
1696 applied to variable annuity sales. However, this paragraph does
1697 not limit the ability of the office or the department to
1698 investigate and enforce, including investigate, the provisions
1699 of this section.
1700 2. Subparagraph 1. shall not limit the insurer's
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1701 obligation to comply with subsection (5)(c)1., although the
1702 insurer may base its analysis on information received from
1703 either the financial professional or the entity supervising the
1704 financial professional.
1705 3. For this paragraph to apply, an insurer shall must:
1706 a.1. Monitor relevant conduct of the financial
1707 professional seeking to rely on subparagraph 1. or the entity
1708 responsible for supervising the financial professional, such as
1709 the financial professional's broker-dealer or an investment
1710 adviser registered under federal or state securities law, the
1711 FINRA member broker-dealer using information collected in the
1712 normal course of an insurer's business; and
1713 b.2. Provide to the entity responsible for supervising the
1714 financial professional seeking to rely on subparagraph 1., such
1715 as the financial professional's broker dealer or invest ment
1716 adviser registered under federal or state securities laws, FINRA
1717 member broker-dealer information and reports that are reasonably
1718 appropriate to assist such entity the FINRA member broker-dealer
1719 in maintaining its supervision system.
1720 4. For purposes of this paragraph, the term:
1721 a. "Comparable standards" means:
1722 (I) With respect to broker-dealers and registered
1723 representatives of broker-dealers, applicable SEC and FINRA
1724 rules pertaining to best interest obligations and supervision of
1725 annuity recommendations and sales including, but not limited to,
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1726 Regulation Best Interest, 17 C.F.R. s. 240.15l–1, and any
1727 amendments or successor regulations thereto;
1728 (II) With respect to investment advisers registered under
1729 federal or state securities laws or investment adviser
1730 representatives, the fiduciary duties and all other r equirements
1731 imposed on such investment advisers or investment adviser
1732 representatives by contract or under the Investment Advisers Act
1733 of 1940 or applicable state securities laws, including, but not
1734 limited to, Form ADV and interpretations; and
1735 (III) With respect to plan fiduciaries or fiduciaries, the
1736 duties, obligations, prohibitions and all other requirements
1737 attendant to such status under ERISA, or the IRC and any
1738 amendments or successor statutes thereto.
1739 b. "Financial professional" means an agent that is
1740 regulated and acting as:
1741 (I) A broker dealer registered under federal or state
1742 securities laws or a registered representative of a broker -
1743 dealer;
1744 (II) An investment adviser registered under federal or
1745 state securities laws or an investment adviser representative
1746 associated with the federal or state registered investment
1747 adviser; or
1748 (III) A plan fiduciary under Section 3(21) of the Employee
1749 Retirement Income Security Act of 1974 (ERISA) or fiduciary
1750 under Section 4975(e)(3) of the Internal Revenue Code (IRC) or
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1751 any amendments or successor statutes thereto.
1752 (6) AGENT TRAINING.—
1753 (a) An agent shall not solicit the sale of an annuity
1754 product unless the agent has adequate knowledge of the product
1755 to recommend the annuity and the agent is in compliance with the
1756 insurer's standards for product training. An agent may rely on
1757 insurer-provided product-specific training standards and
1758 materials to comply with this subsection.
1759 (b)1.a. An agent who engages in the sale of annuity
1760 products shall complete a one-time 4 hour training course. This
1761 requirement is not part of an agent's continuing ed ucation
1762 requirement in s. 626.2815; however, if a course provider
1763 submits and receives approval from the Department of Financial
1764 Services, then the course could also be eligible for continuing
1765 education credit pursuant to s. 626.2815.
1766 b. Agents who hold a life insurance line of authority on
1767 the effective date of this act and who desire to sell annuities
1768 shall complete the requirements of this subsection within 6
1769 months after the effective date of this act. Individuals who
1770 obtain a life insurance line of authority after the effective
1771 date of this act may not engage in the sale of annuities until
1772 the annuity training course required under this subsection has
1773 been completed.
1774 2. The minimum length of the training required under this
1775 subsection is 4 hours.
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1776 3. The training required under this subsection shall
1777 include information on the following topics:
1778 a. The types of annuities and various classifications of
1779 annuities.
1780 b. Identification of the parties to an annuity.
1781 c. How product-specific annuity contract features affect
1782 consumers.
1783 d. The application of income taxation of qualified and
1784 nonqualified annuities.
1785 e. The primary uses of annuities.
1786 f. Appropriate standard of conduct, sales practices,
1787 replacement, and disclosure requirements.
1788 4. Providers of courses intended to comply with this
1789 subsection shall cover all topics listed in the prescribed
1790 outline and shall not present any marketing information or
1791 provide training on sales techniques or provide specific
1792 information about a particular insurer's products. Additional
1793 topics may be offered in conjunction with and in addition to the
1794 required outline.
1795 5. An agent who has completed an annuity training course
1796 prior to the effective date of this act shall, within 6 months
1797 after the effective date of this act, complete either:
1798 a. A new 4-hour training course; or
1799 b. An additional one-hour training course on appropriate
1800 sales practices, replacement, and disclosure requirements under
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1801 this section.
1802 6. Annuity training courses may be conducted and completed
1803 by classroom or self-study methods.
1804 7. Providers of annuity training shall issue certificates
1805 of completion.
1806 8. The satisfaction of the training requirements of
1807 another state that are substantially similar to the provisions
1808 of this subsection shall be deemed to satisfy the training
1809 requirements of this subsection in this state.
1810 9. The satisfaction of the training requirements of any
1811 course or courses with components substantially similar to the
1812 provisions of this subsection shall be deemed to satisfy the
1813 training requirements of this subsection in this state.
1814 10. An insurer shall verify that an agent has completed
1815 the annuity training course required under this subsection
1816 before allowing the agent to sell an annuity product for that
1817 insurer.
1818 (7)(6) RECORDKEEPING.—
1819 (a) Insurers and agents must maintain or be able to make
1820 available to the office or department records of the information
1821 collected from the consumer and other information used in making
1822 the recommendations that were the basis for insurance
1823 transactions for 5 years after the insurance transaction is
1824 completed by the insurer. An insurer may maintain the
1825 documentation on behalf of its agent.
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1826 (b) Records required to be maintained under this
1827 subsection may be maintained in paper, photographic,
1828 microprocess, magnetic, mechanical, or electronic media, or by
1829 any process that accurately reproduces the actual document.
1830 (8)(7) COMPLIANCE MITIGATION; PENALTIES.—
1831 (a) An insurer is responsible for compliance with this
1832 section. If a violation occurs because of the action or inaction
1833 of the insurer or its agent which results in harm to a consumer,
1834 the office may order the insurer to take reasonably appropriate
1835 corrective action for the consumer and may impose appropriate
1836 penalties and sanctions.
1837 (b) The department may order:
1838 1. An insurance agent to take reasonably appropriate
1839 corrective action for a consumer harmed by a violation of this
1840 section by the insurance agent, including monetary restitution
1841 of penalties or fees incurred by the consumer, and impose
1842 appropriate penalties and sanctions.
1843 2. A managing general agency or insurance agency that
1844 employs or contracts with an insurance agent to sell or solicit
1845 the sale of annuities to consumers to take reasonably
1846 appropriate corrective action for a consumer harmed by a
1847 violation of this section by the insurance agent.
1848 (c) In addition to any other penalty authorized under
1849 chapter 626, the department shall order an insurance agent to
1850 pay restitution to a consumer who has been deprived of money by
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1851 the agent's misappropriation, conversion, or unlawful
1852 withholding of moneys belonging to the consumer in the course of
1853 a transaction involving annuities. The amount of restitution
1854 required to be paid may not exceed the amount misappropriated,
1855 converted, or unlawfully withheld. This paragraph does not limit
1856 or restrict a person's right to seek other remedies as provided
1857 by law.
1858 (d) Any applicable penalty under the Florida Insurance
1859 Code for a violation of this section shall be reduced or
1860 eliminated according to a schedule adopted by the office or the
1861 department, as appropriate, if corrective action for the
1862 consumer was taken promptly after a violation was discovered.
1863 (e) A violation of this section does not create or imply a
1864 private cause of action.
1865 (9)(8) PROHIBITED CHARGES.—An annuity contract issued to a
1866 senior consumer age 65 or older may not contain a surrender or
1867 deferred sales charge for a withdrawal of money from an annuity
1868 exceeding 10 percent of the amount withdrawn. The charge shall
1869 be reduced so that no surrender or deferred sales charge exists
1870 after the end of the 10th policy year or 10 years after the date
1871 of each premium payment if multiple premiums are paid, whichever
1872 is later. This subsection does not apply to annuities purchased
1873 by an accredited investor, as defined in Regulation D as adopted
1874 by the United States Securities and Exchange Commission, or to
1875 those annuities specified in paragraph (4)(b).
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1876 (10)(9) RULES.—The department and the commission may adopt
1877 rules to administer this section.
1878 (11) The department may adopt by rulemaking the three
1879 forms prescribed in Appendices A through C of the National
1880 Association of Insurance Commissioners Suitability in Annuity
1881 Transactions Model Regulation entitled:
1882 (a) Insurance Agent (Producer) Disclosure For Annuities.
1883 (b) Consumer Refusal To Provide Information.
1884 (c) Consumer Decision to Purchase an Annuity NOT Based on
1885 a Recommendation.
1886 Section 18. Paragraph (b) of subsection (8) of section
1887 634.041, Florida Statutes, is amended to read:
1888 634.041 Qualifications for license.—To qualify for and
1889 hold a license to issue service agreements in this state, a
1890 service agreement company must be in compliance with this part,
1891 with applicable rules of the commission, with related sections
1892 of the Florida Insurance Code, and with its charter powers and
1893 must comply with the following:
1894 (8)
1895 (b) A service agreement company does not have to est ablish
1896 and maintain an unearned premium reserve if it secures and
1897 maintains contractual liability insurance in accordance with the
1898 following:
1899 1. Coverage of 100 percent of the claim exposure is
1900 obtained from an insurer approved by the office, which holds a
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1901 certificate of authority under s. 624.401 to do business within
1902 this state, or secured through a risk retention group, which is
1903 authorized to do business within this state under s. 627.943 or
1904 s. 627.944. Such insurer or risk retention group must maintai n a
1905 surplus as regards policyholders of at least $15 million.
1906 2. If the service agreement company does not meet its
1907 contractual obligations, the contractual liability insurance
1908 policy binds its issuer to pay or cause to be paid to the
1909 service agreement holder all legitimate claims and cancellation
1910 refunds for all service agreements issued by the service
1911 agreement company while the policy was in effect. This
1912 requirement also applies to those service agreements for which
1913 no premium has been remitted to the insurer.
1914 3. If the issuer of the contractual liability policy is
1915 fulfilling the service agreements covered by the contractual
1916 liability policy and the service agreement holder cancels the
1917 service agreement, the issuer must make a full refund of
1918 unearned premium to the consumer, subject to the cancellation
1919 fee provisions of s. 634.121(3). The sales representative and
1920 agent must refund to the contractual liability policy issuer
1921 their unearned pro rata commission.
1922 4. The policy may not be canceled, terminated, or
1923 nonrenewed by the insurer or the service agreement company
1924 unless a 90-day written notice thereof has been given to the
1925 office by the insurer before the date of the cancellation,
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1926 termination, or nonrenewal.
1927 5. The service agreement company must provide the office
1928 with the claims statistics.
1929 6. A policy issued in compliance with this subparagraph
1930 may either pay 100 percent of claims as they are incurred, or
1931 100 percent of claims due in the event of the failure of the
1932 service agreement company to pay such claims when due.
1933
1934 All funds or premiums remitted to an insurer by a motor vehicle
1935 service agreement company under this part shall remain in the
1936 care, custody, and control of the insurer and shall be counted
1937 as an asset of the insurer; provided, however, this requirement
1938 does not apply when the insurer and the motor vehicle service
1939 agreement company are affiliated companies and members of an
1940 insurance holding company system. If the motor vehicle service
1941 agreement company chooses to comply with this paragraph but also
1942 maintains a reserve to pay claims, such reserve shall only be
1943 considered an asset of the covered motor vehicle service
1944 agreement company and may not be simultaneously counted as an
1945 asset of any other entity.
1946 Section 19. Paragraphs (d), (e), and (f) of subsection
1947 (17) of section 634.401, Florida Statutes, are amended to read:
1948 634.401 Definitions.—As used in this part, the term:
1949 (17) "Manufacturer" means any entity or its affiliate
1950 which:
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1951 (d) Maintains outstanding debt obligations, if any, rated
1952 in the top four rating categories by a recognized rating
1953 service;
1954 (d)(e) Has and maintains at all times, a minimum net worth
1955 of at least $100 $10 million as evidenced by certified financial
1956 statements prepared by an independent certified public
1957 accountant in accordance with generally accepted accounting
1958 principles; and
1959 (e)(f) Is authorized to do business in this state.
1960 Section 20. The Division of Law Revision is directed to
1961 replace the phrase "the effective date of this act" wherever it
1962 occurs in this act with the date this act becomes a law.
1963 Section 21. Except as otherwise expressly provided, this
1964 act shall take effect July 1, 2023.
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COMMERCE COMMITTEE
CS/HB 1185 by Rep. Giallombardo
Relating to Consumer Protection
AMENDMENT SUMMARY
April 17, 2023
Amendment 1 by Rep. Giallombardo (Strike-all): The amendment:
• Establishes that crowd-funding platforms that are administering disaster-related donation
campaigns must meet certain legal requirements.
• Removes a provision related to insurance agents notifying the Department of Financial
Services (DFS) of a change in their names or addresses and retains current law.
• Provides clarification regarding the public adjusters’ duties when executing contracts to
provide services to policyholders.
• Changes the compensation paid to public adjusters for providing services to
policyholders.
• Provides limitations on the timeframes during which adjusters must make their records
available for inspection by DFS.
• Preserves the 90-day underwriting period for policies written by Citizens Property
Insurance where the risks covered by the policies were most recently covered by a
property insurer placed into receivership, rather than applying the 60-day period
proposed by the bill.
• Provides a three-year time-frame for providing notice of a condominium-related loss
assessment claim to an insurer where no specific limit currently applies.
• Makes technical and grammatical changes to conform the bill to the Senate.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1185 (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: Commerce Committee
2 Representative Giallombardo offered the following:
3
4 Amendment (with title amendment)
5 Remove everything after the enacting clause and insert:
6 Section 1. Present subsections (35) through (38) of section
7 494.001, Florida Statutes, are redesignated as subsections (36)
8 through (39), respectively, a new subsection (35) is added to
9 that section, and subsection (3) of that section is amended, to
10 read:
11 494.001 Definitions.—As used in this chapter, the term:
12 (3) “Branch office” means a location, other than a mortgage
13 broker’s or mortgage lender’s principal place of business or
14 remote location:
15 (a) The address of which appears on business cards,
16 stationery, or advertising used by the licensee in connection
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17 with business conducted under this chapter;
18 (b) At which the licensee’s name, advertising or
19 promotional materials, or signage suggests that mortgage loans
20 are originated, negotiated, funded, or serviced; or
21 (c) At which mortgage loans are originated, negotiated,
22 funded, or serviced by a licensee.
23 (35) “Remote location” means a location, other than a
24 principal place of business or a branch office, at which a loan
25 originator of a licensee may conduct business. A licensee may
26 allow loan originators to work from remote locations if:
27 (a) The licensee has written policies and procedures for
28 supervision of loan originators working from remote locations.
29 (b) Access to company platforms and customer information is
30 in accordance with the licensee’s comprehensive written
31 information security plan.
32 (c) An in-person customer interaction does not occur at a
33 loan originator’s residence unless such residence is a licensed
34 location.
35 (d) Physical records are not maintained at a remote
36 location.
37 (e) Customer interactions and conversations about consumers
38 will be in compliance with federal and state information
39 security requirements, including applicable provisions under the
40 Gramm-Leach-Bliley Act and the Safeguards Rule established by
41 the Federal Trade Commission, set forth at 16 C.F.R. part 314,
42 as such requirements may be amended from time to time.
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43 (f) A loan originator working at a remote location accesses
44 the company’s secure systems or documents, including a cloud-
45 based system, directly from any out-of-office device such as a
46 laptop, phone, desktop computer, or tablet, through a virtual
47 private network or system that ensures secure connectivity and
48 that requires passwords or other forms of authentication to
49 access.
50 (g) The licensee ensures that appropriate security updates,
51 patches, or other alterations to the security of all devices
52 used at remote locations are installed and maintained.
53 (h) The licensee is able to remotely lock or erase company-
54 related contents of any device or otherwise remotely limit all
55 access to a company’s secure systems.
56 (i) The registry’s record of a loan originator who works
57 from a remote location designates the principal place of
58 business as the loan originator’s registered location, or the
59 loan originator has elected a licensed branch office as a
60 registered location.
61 Section 2. Subsection (1) of section 494.0067, Florida
62 Statutes, is amended to read:
63 494.0067 Requirements of mortgage lenders.—
64 (1) A mortgage lender that makes mortgage loans on real
65 estate in this state shall transact business from a principal
66 place of business, branch office, or remote location. Each
67 principal place of business, and each branch office, and remote
68 location shall be operated under the full charge, control, and
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69 supervision of the licensee pursuant to this part.
70 Section 3. Section 501.2042, Florida Statutes, is created
71 to read:
72 501.2042 Unlawful acts and practices by online crowd-
73 funding campaigns.—
74 (1) As used in this section, the term:
75 (a) “Crowd-funding campaign” means an online fundraising
76 initiative that is intended to receive monetary donations from
77 donors and is created by an organizer in the interest of a
78 beneficiary.
79 (b) “Crowd-funding platform” means an entity doing business
80 in this state which provides an online medium for the creation
81 and facilitation of a crowd-funding campaign.
82 (c) “Disaster” has the same meaning as 252.34 (2)
83 (d) “Organizer” means a person who:
84 1. Resides or is domiciled in this state; and
85 2. Has an account on a crowd-funding platform and has
86 created a crowd-funding campaign either as a beneficiary or on
87 behalf of a beneficiary, regardless of whether the beneficiary
88 or the crowd-funding campaign has received donations.
89 (1) For crowd-funding campaigns related to and arising out
90 of a declared disaster, a crowd-funding platform must:
91 (a) Collect and retain, for one year after the date of the
92 declared disaster, the name, e-mail address, phone number, and
93 state of residence of the organizer.
94 (b) Require the organizer to indicate, on the crowd-
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95 funding campaign, the state in which they are located.
96 (c) Cooperate with any investigation by or in partnership
97 with law enforcement.
98 (d) Clearly display and direct donors to fundraisers that
99 comply with the crowd-funding platform’s terms of service.
100 (2) When an organizer arranges a crowd-funding campaign
101 related to and arising out of a declared disaster, the organizer
102 must attest that:
103 (a) All information provided in connection with a crowd -
104 funding campaign is accurate, complete and not likely to deceive
105 users.
106 (b) All donations contributed to the crowd-funding
107 campaign will be used solely as described in the materials the
108 organizer posts or provides on the crowd-funding platform.
109 Section 4. Section 520.23, Florida Statutes, is amended to
110 read:
111 520.23 Disclosures required.—Each agreement governing the
112 sale or lease of a distributed energy generation system shall,
113 at a minimum, include a written statement printed in at least
114 12-point type that is separate from the agreement, is s eparately
115 acknowledged by the buyer or lessee, and includes the following
116 information and disclosures, if applicable:
117 (1) The name, address, telephone number, and e-mail address
118 of the buyer or lessee.
119 (2) The name, address, telephone number, e-mail address,
120 and valid state contractor license number of the person
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121 responsible for installing the distributed energy generation
122 system.
123 (3) The name, address, telephone number, e-mail address,
124 and valid state contractor license number of the distributed
125 energy generation system maintenance provider, if different from
126 the person responsible for installing the distributed energy
127 generation system.
128 (4) The customer contact center phone number for the
129 Department of Business and Professional Regulation.
130 (5)(4) A written statement indicating whether the
131 distributed energy generation system is being purchased or
132 leased.
133 (a) If the distributed energy generation system will be
134 leased, the written statement must include a disclosure in
135 substantially the following form: “You are entering into an
136 agreement to lease a distributed energy generation system. You
137 will lease (not own) the system installed on your property.”
138 (b) If the distributed energy generation system will be
139 purchased, the written statement must include a disclosure in
140 substantially the following form: “You are entering into an
141 agreement to purchase a distributed energy generation system.
142 You will own (not lease) the system installed on your property.”
143 (6)(5) The total cost to be paid by the buyer or lessee,
144 including any interest, installation fees, document preparation
145 fees, service fees, or other fees.
146 (7)(6) A payment schedule, including any amounts owed at
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147 contract signing, at the commencement of installation, a t the
148 completion of installation, and any final payments. If the
149 distributed energy generation system is being leased, the
150 written statement must include the frequency and amount of each
151 payment due under the lease and the total estimated lease
152 payments over the term of the lease.
153 (8)(7) Each state or federal tax incentive or rebate, if
154 any, relied upon by the seller in determining the price of the
155 distributed energy generation system.
156 (9)(8) A description of the assumptions used to calculate
157 any savings estimates provided to the buyer or lessee, and if
158 such estimates are provided, a statement in substantially the
159 following form: “It is important to understand that future
160 electric utility rates are estimates only. Your future electric
161 utility rates may vary.”
162 (10)(9) A description of any one-time or recurring fees,
163 including, but not limited to, estimated system removal fees,
164 maintenance fees, Internet connection fees, and automated
165 clearinghouse fees. If late fees may apply, the description must
166 describe the circumstances triggering such late fees.
167 (11)(10) A statement notifying the buyer whether the
168 distributed energy generation system is being financed and, if
169 so, a statement in substantially the following form: “If your
170 system is financed, carefully read any agreements and/or
171 disclosure forms provided by your lender. This statement does
172 not contain the terms of your financing agreement. If you have
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173 any questions about your financing agreement, contact your
174 finance provider before signing a contract.”
175 (12)(11) A statement notifying the buyer whether the seller
176 is assisting in arranging financing of the distributed energy
177 generation system and, if so, a statement in substantially the
178 following form: “If your system is financed, carefully read any
179 agreements and/or disclosure forms provided by your lender. This
180 statement does not contain the terms of your financing
181 agreement. If you have any questions about your financing
182 agreement, contact your finance provider before signing a
183 contract.”
184 (13)(12) A provision notifying the buyer or lessee of the
185 right to rescind the agreement for a period of at least 3
186 business days after the agreement is signed. This subsection
187 does not apply to a contract to sell or lease a distributed
188 energy generation system in a solar community in which the
189 entire community has been marketed as a solar community and all
190 of the homes in the community are intended to have a distributed
191 energy generation system, or a solar community in which the
192 developer has incorporated solar technology for purposes of
193 meeting the Florida Building Code in s. 553.73.
194 (14)(13) A description of the distributed energy generation
195 system design assumptions, including the make and model of the
196 major components, system size, estimated first-year energy
197 production, and estimated annual energy production decreases,
198 including the overall percentage degradation over the estimated
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199 life of the distributed energy generation system, and the status
200 of utility compensation for excess energy generated by the
201 system at the time of contract signing. A seller who provides a
202 warranty or guarantee of the energy production output of the
203 distributed energy generation system may provide a description
204 of such warranty or guarantee in lieu of a description of the
205 system design and components.
206 (15)(14) A description of any performance or production
207 guarantees.
208 (16)(15) A description of the ownership and transferability
209 of any tax credits, rebates, incentives, or renewable energy
210 certificates associated with the distributed energy generation
211 system, including a disclosure as to whether the seller will
212 assign or sell any associated renewable energy certificates to a
213 third party.
214 (17)(16) A statement in substantially the following form:
215 “You are responsible for property taxes on property you own.
216 Consult a tax professional to understand any tax liability or
217 eligibility for any tax credits that may result from the
218 purchase of your distributed energy generation system.”
219 (18)(17) The approximate start and completion dates for the
220 installation of the distributed energy generation system.
221 (19)(18) A disclosure as to whether maintenance and repairs
222 of the distributed energy generation system are included in the
223 purchase price.
224 (20)(19) A disclosure as to whether any warranty or
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225 maintenance obligations related to the distributed energy
226 generation system may be sold or transferred by the seller to a
227 third party and, if so, a statement in substantially the
228 following form: “Your contract may be assigned, sold, or
229 transferred without your consent to a third party who will be
230 bound to all the terms of the contract. If a transfer occurs,
231 you will be notified if this will change the address or phone
232 number to use for system maintenance or repair requests.”
233 (21)(20) If the distributed energy generation system will
234 be purchased, a disclosure notifying the buyer of the
235 requirements for interconnecting the system to the utility
236 system.
237 (22)(21) A disclosure notifying the buyer or lessee of the
238 party responsible for obtaining interconnection approval.
239 (23)(22) A description of any roof warranties.
240 (24) A statement in substantially the following form: “You
241 should consider the age and remaining life of your roof prior to
242 installing a distributed energy generation system. Replacement
243 of your roof may require reinstallment of the distributed energy
244 generation system.”
245 (25)(23) A disclosure notifying the lessee whether the
246 seller will insure a leased distributed energy generation system
247 against damage or loss and, if applicable, the circumstances
248 under which the seller will not insure the system against damage
249 or loss.
250 (26)(24) A statement, if applicable, in substantially the
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251 following form: “You are responsible for obtaining insurance
252 policies or coverage for any loss of or damage to the system.
253 Consult an insurance professional to understand how to protect
254 against the risk of loss or damage to the system.”
255 (27) A statement in substantially the following form:
256 “Placing a distributed energy generation system on your roof may
257 impact your future insurance premiums. You are responsible for
258 contacting your insurance carrier, prior to entering into a
259 purchase or lease agreement, to confirm whether your current
260 policy or coverage will need to be modified upon installing the
261 distributed energy generation system onto your dwelling.”
262 (28)(25) A disclosure notifying the buyer or lessee whether
263 the seller or lessor will place a lien on the buyer’s or
264 lessee’s home or other property as a result of entering into a
265 purchase or lease agreement for the distributed energy
266 generation system.
267 (29)(26) A disclosure notifying the buyer or lessee whether
268 the seller or lessor will file a fixture filing or a State of
269 Florida Uniform Commercial Code Financing Statement Form (UCC -1)
270 on the distributed energy generation system.
271 (30)(27) A disclosure identifying whether the agreement
272 contains any restrictions on the buyer’s or lessee’s ability to
273 modify or transfer ownership of a distributed energy generation
274 system, including whether any modification or transfer is
275 subject to review or approval by a third party.
276 (31)(28) A disclosure as to whether the lease agreement may
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277 be transferred to a purchaser upon sale of the home or real
278 property to which the system is affixed, and any conditions for
279 such transfer.
280 (32)(29) A blank section that allows the seller to provide
281 additional relevant disclosures or explain disclosures made
282 elsewhere in the disclosure form.
283
284 The requirement to provide a written statement under this
285 section may be satisfied by the electronic delivery of a
286 document within 24 hours after execution of the written
287 statement containing the required statement if the intended
288 recipient of the electronic document affirmatively acknowledges
289 its receipt. An electronic document satisfies the font and other
290 formatting standards required for the written statement if the
291 format and the relative size of characters of the electronic
292 document are reasonably similar to those required in the written
293 document or if the information is otherwise displayed in a
294 reasonably conspicuous manner.
295 Section 5. Subsection (6) of section 560.111, Florida
296 Statutes, is amended to read:
297 560.111 Prohibited acts.—
298 (6) A person who knowingly and willfully violates s.
299 560.309(11) or s. 560.310(2)(d) commits a felony of the third
300 degree, punishable as provided in s. 775.082, s. 77 5.083, or s.
301 775.084.
302 Section 6. Subsection (11) is added to section 560.309,
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303 Florida Statutes, to read:
304 560.309 Conduct of business.—
305 (11) A licensee may not cash corporate checks where the
306 aggregate face amount of all corporate checks cashed for each
307 payee exceeds 200 percent of the payee’s workers’ compensation
308 policy payroll amount during the same dates as the workers’
309 compensation policy coverage period.
310 Section 7. Section 626.602, Florida Statutes, is amended to
311 read:
312 626.602 Insurance agency and adjusting firm names;
313 disapproval.—The department may disapprove the use of any true
314 or fictitious name, other than the bona fide natural name of an
315 individual, by any insurance agency or adjusting firm on any of
316 the following grounds:
317 (1) The name interferes with or is too similar to a name
318 already filed and in use by another agency, adjusting firm, or
319 insurer.
320 (2)The use of the name may mislead the public in any
321 respect.
322 (3) The name states or implies that the agency or adjusting
323 firm is an insurer, motor club, hospital service plan, state or
324 federal agency, charitable organization, or entity that
325 primarily provides advice and counsel rather than sells or
326 solicits insurance, settles claims, or is entitled to engage in
327 insurance activities not permitted under licenses held or
328 applied for. This provision does not prohibit the use of the
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329 word “state” or “states” in the name of the agency. The use of
330 the word “state” or “states” in the name of an agency or
331 adjusting firm does not in and of itself imply that the agency
332 or adjusting firm is a state agency.
333 (4) The name contains the word “Medicare” or “Medicaid.” An
334 insurance agency whose name contains the word “Medicare” or
335 “Medicaid” but which is licensed as of July 1, 2021, may
336 continue to use that name until June 30, 2023, provided that the
337 agency’s license remains valid. If the agency’s license expires
338 or is suspended or revoked, the agency may not be relicensed
339 using that name. Licenses for agencies with names containing
340 either of these words automatically expire on July 1, 2023,
341 unless these words are removed from the name.
342 Section 8. Section 626.854, Florida Statutes, is amended to
343 read:
344 626.854 “Public adjuster” defined; prohibitions.—The
345 Legislature finds that it is necessary for the protection of the
346 public to regulate public insurance adjusters and to prevent the
347 unauthorized practice of law.
348 (1) A “public adjuster” is any person, except a duly
349 licensed attorney at law as exempted under s. 626.860, who, for
350 money, commission, or any other thing of value, direc tly or
351 indirectly prepares, completes, or files an insurance claim for
352 an insured or third-party claimant, regardless of how that
353 person describes or presents his or her services, or who, for
354 money, commission, or any other thing of value, acts on behalf
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355 of, or aids an insured or third-party claimant in negotiating
356 for or effecting the settlement of a claim or claims for loss or
357 damage covered by an insurance contract, regardless of how that
358 person describes or presents his or her services, or who
359 advertises for employment as an adjuster of such claims. The
360 term also includes any person who, for money, commission, or any
361 other thing of value, directly or indirectly solicits,
362 investigates, or adjusts such claims on behalf of a public
363 adjuster, an insured, or a third-party claimant. The term does
364 not include a person who photographs or inventories damaged
365 personal property or business personal property or a person
366 performing duties under another professional license, if such
367 person does not otherwise solicit, adjust, investigate, or
368 negotiate for or attempt to effect the settlement of a claim.
369 (2) This definition does not apply to:
370 (a) A licensed health care provider or employee thereof who
371 prepares or files a health insurance claim form on behalf of a
372 patient.
373 (b) A licensed health insurance agent who assists an
374 insured with coverage questions, medical procedure coding
375 issues, balance billing issues, understanding the claims filing
376 process, or filing a claim, as such assistance relates to
377 coverage under a health insurance policy.
378 (c) A person who files a health claim on behalf of another
379 and does so without compensation.
380 (3) A public adjuster may not give legal advice or act on
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381 behalf of or aid any person in negotiating or settling a claim
382 relating to bodily injury, death, or noneconomic damages.
383 (4) For purposes of this section, the term “insured”
384 includes only the policyholder and any beneficiaries named or
385 similarly identified in the policy.
386 (5) A public adjuster may not directly or indirectly
387 through any other person or entity solicit an insured or
388 claimant by any means except on Monday through Saturday of each
389 week and only between the hours of 8 a.m. and 8 p.m. on those
390 days.
391 (6) When entering a contract for adjuster services after
392 July 1, 2023, a public adjuster:
393 (a) may not collect a fee for services on payments made to
394 a named insured unless they have a written contract with the
395 named insured, or the named insured's legal representative.
396 (b) May not contract for services to be provided by a third
397 party on behalf of the named insured or in pursuit of settlement
398 of the named insureds claim, if the cost of those services is to
399 be borne by the named insured, unless the named insured agrees
400 in writing to procure these services and such agreement is
401 entered into subsequent to the date of the contract for public
402 adjusting services.
403 (c) If a public adjuster contracts with a third-party
404 service provider to assist with the settlement of the named
405 insured’s claim, without first obtaining the insured’s written
406 consent, payment of the third party’s fees must be made by the
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407 public adjuster and may not be charged back to the named
408 insured.
409 (d) If a public adjuster represents anyone other than the
410 named insured in a claim, the public adjuster fees shall be paid
411 by the third party and may not be charged back to the named
412 insured.
413 (7)(6) An insured or claimant may cancel a public
414 adjuster’s contract to adjust a claim without penalty or
415 obligation within 10 days after the date on which the contract
416 is executed. If the contract was entered into based on events
417 that are the subject of a declaration of a state of emergency by
418 the Governor, an insured or claimant may cancel the public
419 adjuster’s contract to adjust a claim without penalty or
420 obligation within 30 days after the date of loss or 10 days
421 after the date on which the contract is executed, whichever is
422 longer. The public adjuster’s contract must contain the
423 following language in minimum 18-point bold type immediately
424 before the space reserved in the contract for the signat ure of
425 the insured or claimant: “You, the insured, may cancel this
426 contract for any reason without penalty or obligation to you
427 within 10 days after the date of this contract. If this contract
428 was entered into based on events that are the subject of a
429 declaration of a state of emergency by the Governor, you may
430 cancel this contract for any reason without penalty or
431 obligation to you within 30 days after the date of loss or 10
432 days after the date on which the contract is executed, whichever
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433 is longer. You may also cancel the contract without penalty or
434 obligation to you if I, as your public adjuster, fail to provide
435 you and your insurer a copy of a written estimate within 60 days
436 of the execution of the contract, unless the failure to provide
437 the estimate within 60 days is caused by factors beyond my
438 control, in accordance with s. 626.854(14)(b), Florida Statutes.
439 The 60-day cancellation period for failure to provide a written
440 estimate shall cease on the date I have provided you with the
441 written estimate.” The by providing notice of cancellation shall
442 be provided to ...(name of public adjuster)..., submitted in
443 writing and sent by certified mail, return receipt requested, or
444 other form of mailing that provides proof thereof, at the
445 address specified in the contract.
446 (8)(7) It is an unfair and deceptive insurance trade
447 practice pursuant to s. 626.9541 for a public adjuster or any
448 other person to circulate or disseminate any advertisement,
449 announcement, or statement containing any assertion,
450 representation, or statement with respect to the business of
451 insurance which is untrue, deceptive, or misleading.
452 (a) The following statements, made in any public adjuster’s
453 advertisement or solicitation, are considered deceptive or
454 misleading:
455 1. A statement or representation that invites an insured
456 policyholder to submit a claim when the policyholder does not
457 have covered damage to insured property.
458 2. A statement or representation that invites an insured
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459 policyholder to submit a claim by offering monetary or other
460 valuable inducement.
461 3. A statement or representation that invites an insured
462 policyholder to submit a claim by stating that there is “no
463 risk” to the policyholder by submitting such claim.
464 4. A statement or representation, or use of a logo or
465 shield, that implies or could mistakenly be construed to imply
466 that the solicitation was issued or distributed by a
467 governmental agency or is sanctioned or endorsed by a
468 governmental agency.
469 (b) For purposes of this paragraph, the term “written
470 advertisement” includes only newspapers, magazines, flyers, and
471 bulk mailers. The following disclaimer, which is not required to
472 be printed on standard size business cards, must be added in
473 bold print and capital letters in typeface no smaller than the
474 typeface of the body of the text to all written advertisements
475 by a public adjuster:
476
477 “THIS IS A SOLICITATION FOR BUSINESS. IF YOU HAVE HAD
478 A CLAIM FOR AN INSURED PROPERTY LOSS OR DAMAGE AND YOU
479 ARE SATISFIED WITH THE PAYMENT BY YOUR INSURER, YOU
480 MAY DISREGARD THIS ADVERTISEMENT.”
481
482 (9)(8) A public adjuster, a public adjuster apprentice, or
483 any person or entity acting on behalf of a public adjuster or
484 public adjuster apprentice may not give or offer to give a
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485 monetary loan or advance to a client or prospective client.
486 (10)(9) A public adjuster, public adjuster apprentice, or
487 any individual or entity acting on behalf of a public adjuster
488 or public adjuster apprentice may not give or offer to give,
489 directly or indirectly, any article of merchandise having a
490 value in excess of $25 to any individual for the purpose of
491 advertising or as an inducement to entering into a contract with
492 a public adjuster.
493 (10)(11)(a) If a public adjuster enters into a contract
494 with an insured or claimant to reopen a claim or file a
495 supplemental claim that seeks additional payments for a claim
496 that has been previously paid in part or in full or settled by
497 the insurer, the public adjuster may not charge, agree to, or
498 accept from any source compensation, payment, commission, fee,
499 or any other thing of value based on a previous settlement or
500 previous claim payments by the insurer for the same cause of
501 loss. The charge, compensation, payment, commission, fee, or any
502 other thing of value must be based only on the claim payments or
503 settlements paid to the insured, exclusive of attorney fees and
504 costs, obtained through the work of the public adjuster after
505 entering into the contract with the insured or claimant.
506 Compensation for the reopened or supplemental claim may not
507 exceed 20 percent of the reopened or supplemental claim payment.
508 In no event shall the contracts described in this paragraph
509 exceed the limitations in paragraph (b).
510 (b) A public adjuster may not charge, agree to, or accept
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511 from any source compensation, payment, commission, fee, or any
512 other thing of value in excess of:
513 1. Ten percent of the amount of insurance claim payments or
514 settlements, exclusive of attorney fees and costs, paid to the
515 insured by the insurer for claims based on events that are the
516 subject of a declaration of a state of emergency by the
517 Governor. This provision applies to claims made during the year
518 after the declaration of emergency. After that year, the
519 limitations in subparagraph 2. apply.
520 2. Twenty percent of the amount of insurance claim payments
521 or settlements, exclusive of attorney fees and costs, paid to
522 the insured by the insurer for claims that are not based on
523 events that are the subject of a declaration of a state of
524 emergency by the Governor.
525 3. One percent of the amount of insurance claim payments or
526 settlements, paid to the insured by the insurer for any coverage
527 part of the policy where the claim payment or written agreement
528 by the insurer to pay is equal to or greater than the policy
529 limit for that part of the policy, if the payment or written
530 commitment to pay is provided within 14 days after the date of
531 loss or within 10 days after the date on which the public
532 adjusting contract is executed, whichever is later.
533 4. Zero percent of the amount of insurance claim payments
534 or settlements, paid to the insured by the insurer for any
535 coverage part of the policy where the claim payment or written
536 agreement by the insurer to pay occurs before the date on which
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537 the public adjusting contract is executed.
538 (c) Insurance claim payments made by the insurer do not
539 include policy deductibles, and public adjuster compensation may
540 not be based on the deductible portion of a claim.
541 (d) Public adjuster compensation may not be based on
542 amounts attributable to additional living expenses, unless such
543 compensation is affirmatively agreed to in a separate a greement
544 that includes a disclosure in substantially the following form:
545 “I agree to retain and compensate the public adjuster for
546 adjusting my additional living expenses and securing payment
547 from my insurer for amounts attributable to additional living
548 expenses payable under the policy issued on my (home/mobile
549 home/condominium unit).”
550 (e) Public adjuster rate of compensation may not be
551 increased based solely on the fact that the claim is litigated.
552 (f) Any maneuver, shift, or device through which the limits
553 on compensation set forth in this subsection are exceeded is a
554 violation of this chapter punishable as provided under s.
555 626.8698.
556 (12)(a)(11) Each public adjuster must provide to the
557 claimant or insured a written estimate of the loss to assist in
558 the submission of a proof of loss or any other claim for payment
559 of insurance proceeds within 60 days after the date of the
560 contract. The written estimate must include an itemized, per -
561 unit estimate of the repairs, including itemized information on
562 equipment, materials, labor, and supplies, in accordance with
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563 accepted industry standards. The public adjuster shall retain
564 such written estimate for at least 5 years and shall make the
565 estimate available to the claimant or insured, the insurer, and
566 the department upon request.
567 (b) An insured may cancel the contract with no additional
568 penalties or fees charged by the public adjuster if such an
569 estimate is not provided within 60 days after executing the
570 contract, subject to the cancellation notice requirement in this
571 section, unless the failure to provide the estimate within 60
572 days is caused by factors beyond the control of the public
573 adjuster. The cancellation period shall cease on the date the
574 public adjuster provides the written estimate to the insured.
575 (13)(12) A public adjuster, public adjuster apprentice, or
576 any person acting on behalf of a public adjuster or apprentice
577 may not accept referrals of business from any person with whom
578 the public adjuster conducts business if there is any form or
579 manner of agreement to compensate the person, directly or
580 indirectly, for referring business to the public adjuster. A
581 public adjuster may not compensate any person, except for
582 another public adjuster, directly or indirectly, for the
583 principal purpose of referring business to the public adjuster.
584 (14)(13) A company employee adjuster, independent adjuster,
585 attorney, investigator, or other persons acting on behalf of an
586 insurer that needs access to an insured or claimant or to the
587 insured property that is the subject of a claim must provide at
588 least 48 hours’ notice to the insured or claimant, public
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589 adjuster, or legal representative before scheduling a meeting
590 with the claimant or an onsite inspection of the insured
591 property. The insured or claimant may deny access to the
592 property if the notice has not been provided. The insured or
593 claimant may waive the 48-hour notice.
594 (15)(14) The public adjuster must ensure that prompt notice
595 is given of the claim to the insurer, the public adjuster’s
596 contract is provided to the insurer, the property is available
597 for inspection of the loss or damage by the insurer, and the
598 insurer is given an opportunity to interview the insured
599 directly about the loss and claim. The insurer must be allowed
600 to obtain necessary information to investigate and respond to
601 the claim.
602 (a) The insurer may not exclude the public adjuster from
603 its in-person meetings with the insured. The insurer shall meet
604 or communicate with the public adjuster in an effort to reach
605 agreement as to the scope of the covered loss under the
606 insurance policy. The public adjuster shall meet or communicate
607 with the insurer in an effort to reach agreement as to the scope
608 of the covered loss under the insurance policy. This section
609 does not impair the terms and conditions of the insurance policy
610 in effect at the time the claim is filed.
611 (b) A public adjuster may not restrict or prevent an
612 insurer, company employee adjuster, independent adjuster,
613 attorney, investigator, or other person acting on behalf of the
614 insurer from having reasonable access at reasonable times to any
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615 insured or claimant or to the insured property that is the
616 subject of a claim.
617 (c) A public adjuster may not act or fail to reasonably act
618 in any manner that obstructs or prevents an insurer or insurer’s
619 adjuster from timely conducting an inspection of any pa rt of the
620 insured property for which there is a claim for loss or damage.
621 The public adjuster representing the insureds may be present for
622 the insurer’s inspection, but if the unavailability of the
623 public adjuster otherwise delays the insurer’s timely insp ection
624 of the property, the public adjuster or the insureds must allow
625 the insurer to have access to the property without the
626 participation or presence of the public adjuster or insureds in
627 order to facilitate the insurer’s prompt inspection of the loss
628 or damage.
629 (16)(15) A licensed contractor under part I of chapter 489,
630 or a subcontractor of such licensee, may not advertise, solicit,
631 offer to handle, handle, or perform public adjuster services as
632 provided in subsection (1) unless licensed and compliant a s a
633 public adjuster under this chapter. The prohibition against
634 solicitation does not preclude a contractor from suggesting or
635 otherwise recommending to a consumer that the consumer consider
636 contacting his or her insurer to determine if the proposed
637 repair is covered under the consumer’s insurance policy, except
638 as it relates to solicitation prohibited in s. 489.147. In
639 addition, the contractor may discuss or explain a bid for
640 construction or repair of covered property with the residential
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641 property owner who has suffered loss or damage covered by a
642 property insurance policy, or the insurer of such property, if
643 the contractor is doing so for the usual and customary fees
644 applicable to the work to be performed as stated in the contract
645 between the contractor and the insured.
646 (17)(16) A public adjuster shall not acquire any interest
647 in salvaged property, except with the written consent and
648 permission of the insured through a signed affidavit.
649 (18)(17) A public adjuster, a public adjuster apprentice,
650 or a person acting on behalf of an adjuster or apprentice may
651 not enter into a contract or accept a power of attorney that
652 vests in the public adjuster, the public adjuster apprentice, or
653 the person acting on behalf of the adjuster or apprentice the
654 effective authority to choose the persons or entities that will
655 perform repair work in a property insurance claim or provide
656 goods or services that will require the insured or third -party
657 claimant to expend funds in excess of those payable to the
658 public adjuster under the terms of the contract for adjusting
659 services.
660 (19)(18) Subsections (5)-(18) (5)-(17) apply only to
661 residential property insurance policies and condominium unit
662 owner policies as described in s. 718.111(11).
663 (20)(19) Except as otherwise provided in this chapter, no
664 person, except an attorney at law or a licensed public adjuster,
665 may for money, commission, or any other thing of value, directly
666 or indirectly:
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667 (a) Prepare, complete, or file an insurance claim for an
668 insured or a third-party claimant;
669 (b) Act on behalf of or aid an insured or a third-party
670 claimant in negotiating for or effecting the settlement of a
671 claim for loss or damage covered by an insurance contract;
672 (c) Offer to initiate or negotiate a claim on behalf of an
673 insured;
674 (d) Advertise services that require a license as a public
675 adjuster; or
676 (e) Solicit, investigate, or adjust a claim on behalf of a
677 public adjuster, an insured, or a third-party claimant.
678 (21)(20) The department may take administrative actions and
679 impose fines against any persons performing claims adjusting,
680 soliciting, or any other services described in this section
681 without the licensure required under this section or s. 626.112.
682 (22)(21) A public adjuster, public adjuster apprentice, or
683 public adjusting firm that solicits a claim and does not enter
684 into a contract with an insured or a third-party claimant
685 pursuant to paragraph (11)(a) (10)(a) may not charge an insured
686 or a third-party claimant or receive payment by any other source
687 for any type of service related to the insured or third-party
688 claimant’s claim.
689 (23)(a)(22)(a) Any following act by a public adjuster, a
690 public adjuster apprentice, or a person acting on behalf of a
691 public adjuster or public adjuster apprentice is prohibited and
692 shall result in discipline as applicable under this part:
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693 1. Offering to a residential property owner a rebate, gift,
694 gift card, cash, coupon, waiver of any insurance deductible, or
695 any other thing of value in exchange for:
696 a. Allowing a contractor, a public adjuster, a public
697 adjuster apprentice, or a person acting on behalf of a public
698 adjuster or public adjuster apprentice to conduct an inspection
699 of the residential property owner’s roof; or
700 b. Making an insurance claim for damage to the residential
701 property owner’s roof.
702 2. Offering, delivering, receiving, or accepting any
703 compensation, inducement, or reward for the referral of any
704 services for which property insurance proceeds would be used for
705 roofing repairs or replacement.
706 (b) Notwithstanding the fine set forth in s. 626.8698, a
707 public adjuster or public adjuster apprentice may be subject to
708 a fine not to exceed $10,000 per act for a violation of this
709 subsection and a fine not to exceed $20,000 per act for a
710 violation of this subsection that occurs during a state of
711 emergency declared by executive order or proclamation of the
712 Governor pursuant to s. 252.36.
713 (c) A person who engages in an act prohibited by this
714 subsection and who is not a public adjuster or a public adjuster
715 apprentice, or is not otherwise exempt from licensure, is guilty
716 of the unlicensed practice of public adjusting and may be:
717 1. Subject to all applicable penalties set forth in this
718 part.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
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Amendment No. 1
719 2. Notwithstanding subparagraph 1., subject to a fine not
720 to exceed $10,000 per act for a violation of this subsection and
721 a fine not to exceed $20,000 per act for a violation of this
722 subsection that occurs during a state of emergency declared by
723 executive order or proclamation of the Governor pursuant to s.
724 252.36.
725 Section 9. Section 626.860, Florida Statutes, is amended to
726 read:
727 626.860 Attorneys at law; exemption.—Attorneys at law duly
728 licensed to practice law in the courts of this state, and in
729 good standing with The Florida Bar, shall not be required to be
730 licensed under the provisions of this code to authorize them to
731 adjust or participate in the adjustment of any claim, loss, or
732 damage arising under policies or contracts of insurance. This
733 exemption does not extend to the employees, interns, volunteers,
734 or contractors of an attorney or of a law firm.
735 Section 10. Section 626.875, Florida Statutes, is amended
736 to read:
737 626.875 Office and records.—
738 (1)(a) Each appointed independent adjuster and licensed
739 public adjuster must maintain a place of business in this state
740 which is accessible to the public and keep therein the usual and
741 customary records pertaining to transactions under the license.
742 This provision does not prohibit maintenance of such an office
743 in the home of the licensee.
744 (b) A license issued under this chapter must at all times
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Bill No. CS/HB 1185 (2023)
Amendment No. 1
745 be posted in a conspicuous place in the principal place of
746 business of the license holder. If the licensee is conducting
747 business away from the place of business such that the license
748 cannot be posted, the licensee shall have such license in his or
749 her actual possession at the time of carrying on such business.
750 (2) The records of the adjuster relating to a particular
751 claim or loss shall be so retained in the adjuster’s place of
752 business for a period of not less than 5 years after completion
753 of the adjustment and shall be available for inspection by the
754 department between the hours of 8 a.m. and 5 p.m., Monday
755 through Friday, excluding state holidays. This provision shall
756 not be deemed to prohibit return or delivery to the insurer or
757 insured of documents furnished to or prepared by the adjuster
758 and required by the insurer or insured to be returned or
759 delivered thereto. At a minimum, the following records must be
760 maintained for a period of not less than 5 years:
761 (a) Name, address, telephone number, and e-mail address of
762 the insured, and the name of the attorney representing the
763 insured, if applicable.
764 (b) The date, location, and amount of the loss.
765 (c) An unaltered copy of the executed disclosure document
766 required by s. 626.8796.
767 (d) An unaltered copy of the executed public adjuster
768 contract required by s. 626.8796.
769 (e) A copy of the estimate of damages provided to the
770 insurer.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1185 (2023)
Amendment No. 1
771 (f) The name of the insurer; the name of the claims
772 representative of the insurer; and the amount, expiration date,
773 and number of each policy under which the loss is covered.
774 (g) An itemized statement of the recoveries by the insured
775 from the sources known to the adjuster.
776 (h) An itemized statement of all compensation received by
777 the public adjuster from any source in connection with the loss.
778 (i) A register of all money received, deposited, disbursed,
779 and withdrawn in connection with a transaction with the insured,
780 including fees, transfers, and disbursements in connection with
781 the loss.
782 Section 11. Section 626.8796, Florida Statutes, is amended
783 to read:
784 626.8796 Public adjuster contracts; disclosure statement;
785 fraud statement.—
786 (1) All contracts for public adjuster services must be in
787 writing in at least 12-point type, be titled “Public Adjuster
788 Contract,” and prominently display the following statement on
789 the contract in minimum 18-point bold type before the space
790 reserved in the contract for the signature of the insured:
791 “Pursuant to s. 817.234, Florida Statutes, any person who, with
792 the intent to injure, defraud, or deceive an insurer or insured,
793 prepares, presents, or causes to be presented a proof of loss or
794 estimate of cost or repair of damaged property in support of a
795 claim under an insurance policy knowing that the proof of loss
796 or estimate of claim or repairs contains false, incomplete, or
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1185 (2023)
Amendment No. 1
797 misleading information concerning any fact or thing material to
798 the claim commits a felony of the third degree, punishable as
799 provided in s. 775.082, s. 775.083, or s. 775.084, Florida
800 Statutes.”
801 (2) A public adjuster contract relating to a property and
802 casualty claim must contain the full name, permanent business
803 address, phone number, e-mail address, and license number of the
804 public adjuster; the full name of the public adjusting firm; and
805 the insured’s full name, and street address, phone number, and
806 e-mail address, together with a brief description of the loss.
807 The contract must state the percentage of compensation for the
808 public adjuster’s services in minimum 18-point bold type before
809 the space reserved in the contract for the signature of the
810 insured; the type of claim, including an emergency claim,
811 nonemergency claim, or supplemental claim; the initials of the
812 named insured on each page that does not contain the insured’s
813 signature; the signatures of the public adjuster and all named
814 insureds; and the signature date. If all of the named insureds’
815 signatures are not available, the public adjuster must submit an
816 affidavit signed by the available named insureds attesting that
817 they have authority to enter into the contract and settle all
818 claim issues on behalf of the named insureds. An unaltered copy
819 of the executed contract must be remitted to the insured at the
820 time of execution and to the insurer, or the insurer's
821 representative within 7 30 days after execution. A public
822 adjusting firm that adjusts claims primarily for commercial
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Bill No. CS/HB 1185 (2023)
Amendment No. 1
823 entities with operations in more than one state and that does
824 not directly or indirectly perform adjusting services for
825 insurers or individual homeowners is deemed to comply with the
826 requirements of this subsection if, at the time a proof of loss
827 is submitted, the public adjusting firm remits to the insurer an
828 affidavit signed by the public adjuster or public adjuster
829 apprentice that identifies:
830 (a) The full name, permanent business address, phone
831 number, e-mail address, and license number of the public
832 adjuster or public adjuster apprentice.
833 (b) The full name of the public adjusting firm.
834 (c) The insured’s full name, and street address, phone
835 number, and e-mail address, together with a brief description of
836 the loss.
837 (d) An attestation that the compensation for public
838 adjusting services will not exceed the limitations provided by
839 law.
840 (e) The type of claim, including an emergency claim,
841 nonemergency claim, or supplemental claim.
842 (3) The public adjuster shall not receive compensation for
843 services provided prior to the date the insured receives an
844 unaltered copiesy of the executed contract or the date executed
845 contract is submitted to the insurer. Proof of receipt by the
846 insured and proof of submission to the insurer must be
847 maintained by the public adjuster for not less than five years.
848 (4) The insured may rescind the contract for public
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Bill No. CS/HB 1185 (2023)
Amendment No. 1
849 adjuster services if the public adjuster has not submitted a
850 written estimate to the insurer within 60 days after executing
851 the contract, unless the failure to provide the written estimate
852 within 60 days is caused by factors beyond the public adjuster’s
853 control.
854 (5) The cancellation period for failure to provide a
855 written estimate terminates on the date the estimate is
856 provided.
857 (6) Before the signing of the contract, the public adjuster
858 shall provide the insured with a separate disclosure document to
859 be signed by the insured, on a form adopted by the department,
860 regarding the claim process which accomplishes the following:
861 (a) Defines the following types of adjusters who may be
862 involved in the claim process: company adjuster, independent
863 adjuster, and public adjuster.
864 (b) Explains that the public adjuster is not a
865 representative or employee of the insurer.
866 (c) Explains that the insured is not required to hire a
867 public adjuster, but has a right to do so.
868 (d) Explains that an insured has a right to initiate direct
869 communications with the insured’s attorney, the insurer, the
870 company adjuster, the insurer’s attorney, or any person
871 regarding the settlement of the insured’s claim.
872 (e) Explains that the public adjuster’s salary, fee,
873 commission, or other consideration to be paid to a public
874 adjuster is the insured’s responsibility.
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Amendment No. 1
875 (f) Explains that the public adjuster is required to
876 provide the insured an unaltered copy of the executed contract
877 at the time of execution.
878 (g) Explains that if the contract was entered into based on
879 events that are the subject of a declaration of a state of
880 emergency by the Governor, an insured or a claimant may cancel
881 the public adjuster’s contract to adjust a claim without penalty
882 or obligation within 30 days after the date of loss or 10 days
883 after the date on which the contract is executed, whichever is
884 longer.
885 (h) The public adjuster shall provide an unaltered copy of
886 the executed disclosure document to the insured at the time of
887 execution.
888 (7) A contract that does not comply with this section is
889 invalid and unenforceable.
890 (8) The department may adopt rules pursuant to ss.
891 120.536(1) and 120.54 to implement this section, including rules
892 to adopt forms required by this section.
893 Section 12. Section 626.8797, Florida Statutes, is amended
894 to read:
895 626.8797 Proof of loss; fraud statement.—All proof-of-loss
896 statements must prominently display the following statement in
897 minimum 18-point bold type before the space reserved in the
898 contract for the signature of the insured: “Pursuant to s.
899 817.234, Florida Statutes, any person who, with the intent to
900 injure, defraud, or deceive any insurer or insured, prepares,
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Amendment No. 1
901 presents, or causes to be presented a proof of loss or estimate
902 of cost or repair of damaged property in support of a claim
903 under an insurance policy knowing that the proof of loss or
904 estimate of claim or repairs contains any false, incomplete, or
905 misleading information concerning any fact or thing material to
906 the claim commits a felony of the third degree, punishable as
907 provided in s. 775.082, s. 775.083, or s. 775.084, Florida
908 Statutes.”
909 Section 13. Paragraph (a) of subsection (1) of section
910 626.9541, Florida Statutes, is amended to read:
911 626.9541 Unfair methods of competition and unfair or
912 deceptive acts or practices defined.—
913 (1) UNFAIR METHODS OF COMPETITION AND UNFAIR OR DECEPTIVE
914 ACTS.—The following are defined as unfair methods of competition
915 and unfair or deceptive acts or practices:
916 (a) Misrepresentations and false advertising of insurance
917 policies.—Knowingly making, issuing, circulating, or causing to
918 be made, issued, or circulated, any estimate, illustration,
919 circular, statement, sales presentation, omission, comparison,
920 or property and casualty certificate of insurance altered after
921 being issued, which:
922 1. Misrepresents the benefits, advantages, conditions, or
923 terms of any insurance policy.
924 2. Misrepresents the dividends or share of the surplus to
925 be received on any insurance policy.
926 3. Makes any false or misleading statements as to the
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1185 (2023)
Amendment No. 1
927 dividends or share of surplus previously paid on any insurance
928 policy.
929 4. Is misleading, or is a misrepresentation, as to the
930 financial condition of any person or as to the legal reserve
931 system upon which any life insurer operates.
932 5. Uses any name or title of any insurance policy or class
933 of insurance policies misrepresenting the true nature thereof.
934 6. Is a misrepresentation for the purpose of inducing, or
935 tending to induce, the lapse, forfeiture, exchange, conversion,
936 or surrender of any insurance policy.
937 7. Is a misrepresentation for the purpose of effecting a
938 pledge or assignment of, or effecting a loan against, any
939 insurance policy.
940 8. Misrepresents any insurance policy as being shares of
941 stock or misrepresents ownership interest in the company.
942 9. Uses any advertisement that would mislead or otherwise
943 cause a reasonable person to believe mistakenly that the state
944 or the Federal Government is responsible for the insurance sales
945 activities of any person or stands behind any person’s credit or
946 that any person, the state, or the Federal Government guarantees
947 any returns on insurance products or is a source of payment of
948 any insurance obligation of or sold by any person.
949 10. Fails to disclose a third party that receives
950 royalties, referral fees, or other remuneration for sponsorship,
951 marketing, or use of third-party branding for a policy of health
952 insurance as defined in s. 624.603.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1185 (2023)
Amendment No. 1
953 Section 14. Paragraph (c) of subsection (2) of section
954 627.4025, Florida Statutes, is amended, and paragra ph (d) is
955 added to that subsection, to read:
956 627.4025 Residential coverage and hurricane coverage
957 defined.—
958 (2) As used in policies providing residential coverage:
959 (c) “Hurricane” for purposes of paragraphs (a) and (b)
960 means a storm system that has been declared to be a hurricane by
961 the National Hurricane Center of the National Weather Service.
962 The duration of the hurricane includes the time period, in
963 Florida:
964 1. Beginning at the time a hurricane watch or hurricane
965 warning is issued for any part of Florida by the National
966 Hurricane Center of the National Weather Service; and
967 2. Continuing for the time period during which the
968 hurricane conditions exist anywhere in Florida; and
969 3. Ending 72 hours following the termination of the last
970 hurricane watch or hurricane warning issued for any part of
971 Florida by the National Hurricane Center of the National Weather
972 Service.
973 (d) “Hurricane deductible” means the deductible applicable
974 to loss caused by a hurricane.
975 Section 15. Paragraph (b) of subsection (1) and paragraph
976 (b) of subsection (2) of section 627.4133, Florida Statutes, are
977 amended to read:
978 627.4133 Notice of cancellation, nonrenewal, or renewal
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Bill No. CS/HB 1185 (2023)
Amendment No. 1
979 premium.—
980 (1) Except as provided in subsection (2):
981 (b) An insurer issuing a policy providing coverage for
982 property, casualty, except mortgage guaranty, surety, or marine
983 insurance, other than motor vehicle insurance subject to s.
984 627.728 or s. 627.7281, shall give the first-named insured
985 written notice of cancellation or termination other than
986 nonrenewal at least 45 days prior to the effective date of the
987 cancellation or termination, including in the written notice the
988 reason or reasons for the cancellation or termination, except
989 that:
990 1. When cancellation is for nonpayment of premium, at least
991 10 days’ written notice of cancellation accompanied by the
992 reason therefor shall be given. As used in this subparagraph and
993 s. 440.42(3), the term “nonpayment of premium” means failure of
994 the named insured to discharge when due any of her or his
995 obligations in connection with the payment of premiums on a
996 policy or any installment of such premium, whether the premium
997 is payable directly to the insurer or its agent or indirectly
998 under any premium finance plan or extension of credit, or
999 failure to maintain membership in an organization if such
1000 membership is a condition precedent to insurance coverage.
1001 “Nonpayment of premium” also means the failure of a financial
1002 institution to honor an insurance applicant’s check after
1003 delivery to a licensed agent for payment of a premium, even if
1004 the agent has previously delivered or transferred the premium to
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Bill No. CS/HB 1185 (2023)
Amendment No. 1
1005 the insurer. If a dishonored check represents the initial
1006 premium payment, the contract and all contractual obligations
1007 shall be void ab initio unless the nonpayment is cured within
1008 the earlier of 5 days after actual notice by certified mail is
1009 received by the applicant or 15 days after notice is sent to the
1010 applicant by certified mail or registered mail, and if the
1011 contract is void, any premium received by the insurer from a
1012 third party shall be refunded to that party in full; and
1013 2. When such cancellation or termination occurs during the
1014 first 60 90 days during which the insurance is in force and the
1015 insurance is canceled or terminated for reasons other than
1016 nonpayment of premium, at least 20 days’ written notice of
1017 cancellation or termination accompanied by the reason therefor
1018 shall be given except where there has been a material
1019 misstatement or misrepresentation or failure to comply with the
1020 underwriting requirements established by the insurer.
1021
1022 After the policy has been in effect for 60 90 days, no such
1023 policy shall be canceled by the insurer except when there has
1024 been a material misstatement, a nonpayment of premium, a failure
1025 to comply with underwriting requirements established by the
1026 insurer within 60 90 days of the date of effectuation of
1027 coverage, or a substantial change in the risk covered by the
1028 policy or when the cancellation is for all insureds under such
1029 policies for a given class of insureds. This subsection does not
1030 apply to individually rated risks having a policy term of less
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Bill No. CS/HB 1185 (2023)
Amendment No. 1
1031 than 90 days.
1032 (d) Notwithstanding subparagraph (b), Citizens Property
1033 Insurance Corporation in underwriting risks that, prior to the
1034 date of the application, were most recently insured by an
1035 insurer that has been placed in receivership under ch. 631, may
1036 immediately cancel a policy insuring such risk that is in effect
1037 for 90 days or less for material misrepresentation or failure to
1038 comply with underwriting requirements established before the
1039 effectuation of coverage.
1040 (2) With respect to any personal lines or commercial
1041 residential property insurance policy, including, but not
1042 limited to, any homeowner, mobile home owner, farmowner,
1043 condominium association, condominium unit owner, apartment
1044 building, or other policy covering a residential structure or
1045 its contents:
1046 (b) The insurer shall give the first-named insured written
1047 notice of nonrenewal, cancellation, or termination at least 120
1048 days before the effective date of the nonrenewal, cancellation,
1049 or termination. The notice must include the reason for the
1050 nonrenewal, cancellation, or termination, except that:
1051 1. If cancellation is for nonpayment of premium, at least
1052 10 days’ written notice of cancellation accompanied by the
1053 reason therefor must be given. As used in this subparagraph, the
1054 term “nonpayment of premium” means failure of the named insured
1055 to discharge when due her or his obligations for paying the
1056 premium on a policy or an installment of such premium, whether
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1185 (2023)
Amendment No. 1
1057 the premium is payable directly to the insurer or its agent or
1058 indirectly under a premium finance plan or extension of credit,
1059 or failure to maintain membership in an organization if such
1060 membership is a condition precedent to insurance coverage. The
1061 term also means the failure of a financial institution to honor
1062 an insurance applicant’s check after delivery to a licensed
1063 agent for payment of a premium even if the agent has previously
1064 delivered or transferred the premium to the insurer. If a
1065 dishonored check represents the initial premium payment, the
1066 contract and all contractual obligations are void ab initio
1067 unless the nonpayment is cured within the earlier of 5 days
1068 after actual notice by certified mail is received by the
1069 applicant or 15 days after notice is sent to the applicant by
1070 certified mail or registered mail. If the contract is void, a ny
1071 premium received by the insurer from a third party must be
1072 refunded to that party in full.
1073 2. If cancellation or termination occurs during the first
1074 60 90 days the insurance is in force and the insurance is
1075 canceled or terminated for reasons other than nonpayment of
1076 premium, at least 20 days’ written notice of cancellation or
1077 termination accompanied by the reason therefor must be given
1078 unless there has been a material misstatement or
1079 misrepresentation or a failure to comply with the underwriting
1080 requirements established by the insurer.
1081 3. After the policy has been in effect for 60 90 days, the
1082 policy may not be canceled by the insurer unless there has been
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Amendment No. 1
1083 a material misstatement; a nonpayment of premium; a failure to
1084 comply, within 60 90 days after the date of effectuation of
1085 coverage, with underwriting requirements established by the
1086 insurer before the date of effectuation of coverage; or a
1087 substantial change in the risk covered by the policy or unless
1088 the cancellation is for all insureds under such policies for a
1089 given class of insureds. This subparagraph does not apply to
1090 individually rated risks that have a policy term of less than 90
1091 days.
1092 4. After a policy or contract has been in effect for more
1093 than 60 90 days, the insurer may not cancel or terminate the
1094 policy or contract based on credit information available in
1095 public records.
1096 5. A policy that is nonrenewed by Citizens Property
1097 Insurance Corporation, pursuant to s. 627.351(6), for a policy
1098 that has been assumed by an authorized insurer offering
1099 replacement coverage to the policyholder is exempt from the
1100 notice requirements of paragraph (a) and this paragraph. In such
1101 cases, the corporation must give the named insured written
1102 notice of nonrenewal at least 45 days before the effective date
1103 of the nonrenewal.
1104 6. Notwithstanding any other provision of law, an insurer
1105 may cancel or nonrenew a property insurance policy after at
1106 least 45 days’ notice if the office finds that the early
1107 cancellation of some or all of the insurer’s policies is
1108 necessary to protect the best interests of the public or
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Amendment No. 1
1109 policyholders and the office approves the insurer’s plan for
1110 early cancellation or nonrenewal of some or all of its policies.
1111 The office may base such finding upon the financial condition of
1112 the insurer, lack of adequate reinsurance coverage for hurricane
1113 risk, or other relevant factors. The office may condition its
1114 finding on the consent of the insurer to be placed under
1115 administrative supervision pursuant to s. 624.81 or to the
1116 appointment of a receiver under chapter 631.
1117 7. A policy covering both a home and a motor vehicle may be
1118 nonrenewed for any reason applicable to the property or motor
1119 vehicle insurance after providing 90 days’ notice.
1120 Section 16. Effective January 1, 2024, section 627.4554,
1121 Florida Statutes, is amended to read:
1122 627.4554 Suitability in annuity transactions investments.—
1123 (1) PURPOSE.—The purpose of this section is to require
1124 agents to act in the best interest of the consumer when making a
1125 recommendation of an annuity and to require insurers to
1126 establish and maintain a system to supervise so set forth
1127 standards and procedures for making recommendations to consumers
1128 which result in transactions involving annuity products, and to
1129 establish a system for supervising such recommendations in order
1130 to ensure that the insurance needs and financial objectives of
1131 consumers are effectively appropriately addressed at the time of
1132 the transaction.
1133 (2) SCOPE.—This section applies to any sale or
1134 recommendation of made to a consumer to purchase, exchange, or
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Amendment No. 1
1135 replace an annuity by an insurer or its agent, and which results
1136 in the purchase, exchange, or replacement recommended .
1137 (3) DEFINITIONS.—As used in this section, the term:
1138 (a) “Agent” means a person or entity required to be
1139 licensed under the laws of this state to sell, solicit, or
1140 negotiate insurance, including annuities. For purposes of this
1141 section, the term includes an insurer when no agent is involved
1142 has the same meaning as provided in s. 626.015.
1143 (b) “Annuity” means an insurance product under state law
1144 which is individually solicited, whether classified as an
1145 individual or group annuity.
1146 (c) “Cash compensation” means any discount, concession,
1147 fee, service fee, commission, sales charge, loan, override, or
1148 cash benefit received by an agent from an insurer or
1149 intermediary or directly from the consumer in connection with
1150 the recommendation or sale of an annuity.
1151 (d) “Consumer profile information” means information that
1152 is reasonably appropriate to determine whether a recommendation
1153 addresses the consumer’s financial situation, insurance needs,
1154 and financial objectives, including, at a minimum, the
1155 following:
1156 1. Age.
1157 2. Annual income.
1158 3. Financial situation and needs, including debts and other
1159 obligations.
1160 4. Financial experience.
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1161 5. Insurance needs.
1162 6. Financial objectives.
1163 7. Intended use of the annuity.
1164 8. Financial time horizon.
1165 9. Existing assets or financial products, including
1166 investment, annuity, and insurance holdings.
1167 10. Liquidity needs.
1168 11. Liquid net worth.
1169 12. Risk tolerance, including, but not limited to,
1170 willingness to accept nonguaranteed elements in the annuity.
1171 13. Financial resources used to fund the annuity.
1172 14. Tax status.
1173 (e)(c) “FINRA” means the Financial Industry Regulatory
1174 Authority or a succeeding agency.
1175 (f)(d) “Insurer” has the same meaning as provided in s.
1176 624.03.
1177 (g) “Intermediary” means an entity contracted directly with
1178 an insurer or with another entity contracted with an insurer to
1179 facilitate the sale of the insurer’s annuities by agents.
1180 (h) “Material conflict of interest” means a financial
1181 interest of the agent in the sale of an annuity which a
1182 reasonable person would expect to influence the impartiality of
1183 a recommendation. The term does not include cash compensation or
1184 noncash compensation.
1185 (i) “Noncash compensation” means any form of compensation
1186 that is not cash compensation, including, but not limited to,
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1185 (2023)
Amendment No. 1
1187 health insurance, office rent, office support, and retirement
1188 benefits.
1189 (j) “Nonguaranteed elements” means the premiums; credited
1190 interest rates, including any bonus; benefits; values;
1191 dividends; noninterest-based credits; charges; or elements of
1192 formulas used to determine any of these, which are subject to
1193 company discretion and are not guaranteed at issue. An element
1194 is considered nonguaranteed if any of the underlyin g
1195 nonguaranteed elements are used in its calculation.
1196 (k)(e) “Recommendation” means advice provided by an insurer
1197 or its agent to an individual a consumer which was intended to
1198 result or does result which would result in a the purchase, an
1199 exchange, or a replacement of an annuity in accordance with that
1200 advice. The term does not include general communication to the
1201 public, generalized customer services, assistance or
1202 administrative support, general educational information and
1203 tools, prospectuses, or other product and sales material.
1204 (l)(f) “Replacement” means a transaction in which a new
1205 annuity policy or contract is to be purchased and it is known or
1206 should be known to the proposing insurer or its agent, or to the
1207 proposing insurer whether or not an agent is involved, that by
1208 reason of such transaction an existing annuity or other
1209 insurance policy has been or is to be any of the following or
1210 contract will be:
1211 1. Lapsed, forfeited, surrendered or partially surrendered,
1212 assigned to the replacing insurer, or otherwise terminated;
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1213 2. Converted to reduced paid-up insurance, continued as
1214 extended term insurance, or otherwise reduced in value due to
1215 the use of nonforfeiture benefits or other policy values;
1216 3. Amended so as to effect a reduction in benefits or the
1217 term for which coverage would otherwise remain in force or for
1218 which benefits would be paid;
1219 4. Reissued with a reduction in cash value; or
1220 5. Used in a financed purchase.
1221 (m) “SEC” means the United States Securities and Exchange
1222 Commission.
1223 (g) “Suitability information” means information related to
1224 the consumer which is reasonably appropriate to determine the
1225 suitability of a recommendation made to the consumer, including
1226 the following:
1227 1. Age;
1228 2. Annual income;
1229 3. Financial situation and needs, including the financial
1230 resources used for funding the annuity;
1231 4. Financial experience;
1232 5. Financial objectives;
1233 6. Intended use of the annuity;
1234 7. Financial time horizon;
1235 8. Existing assets, including investment and life insurance
1236 holdings;
1237 9. Liquidity needs;
1238 10. Liquid net worth;
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Amendment No. 1
1239 11. Risk tolerance; and
1240 12. Tax status.
1241 (4) EXEMPTIONS.—Unless otherwise specifically included,
1242 this section does not apply to transactions involving:
1243 (a) Direct-response solicitations where there is no
1244 recommendation based on information collected from the consumer
1245 pursuant to this section;
1246 (b) Contracts used to fund:
1247 1. An employee pension or welfare benefit plan that is
1248 covered by the federal Employee Retirement and Income Security
1249 Act;
1250 2. A plan described by s. 401(a), s. 401(k), s. 403(b), s.
1251 408(k), or s. 408(p) of the Internal Revenue Code, if
1252 established or maintained by an employer;
1253 3. A government or church plan defined in s. 414 of the
1254 Internal Revenue Code, a government or church welfare benefit
1255 plan, or a deferred compensation plan of a state or local
1256 government or tax-exempt organization under s. 457 of the
1257 Internal Revenue Code; or
1258 4. A nonqualified deferred compensation arrangement
1259 established or maintained by an employer or plan sponsor;
1260 (c)5. Settlements or assumptions of liabilities associated
1261 with personal injury litigation or a dispute or claim -resolution
1262 process; or
1263 (d)6. Formal prepaid funeral contracts.
1264 (5) DUTIES OF INSURERS AND AGENTS.—
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1265 (a) An agent, when making a recommendation of an annuity,
1266 shall act in the best interest of the consumer under the
1267 circumstances known at the time the recommendation is made,
1268 without placing the financial interest of the agent or insurer
1269 ahead of the consumer’s interest. An agent has acted in the best
1270 interest of the consumer if the agent has satisfied the
1271 following obligations regarding care, disclosure, conflict of
1272 interest, and documentation:
1273 1.a. The agent, in making a recommendation, shall exercise
1274 reasonable diligence, care, and skill to:
1275 (I) Know the financial situation, insurance needs, and
1276 financial objectives of the customer.
1277 (II) Understand the available options after making a
1278 reasonable inquiry into options available to the agent.
1279 (III) Have a reasonable basis to believe the recommended
1280 option effectively addresses the consumer’s financial situation,
1281 insurance needs, and financial objectives over the life of the
1282 product, as evaluated in light of the consumer profile
1283 information.
1284 (IV) Communicate the reason or reasons for the
1285 recommendation.
1286 b. The requirements of sub-subparagraph a. include:
1287 (I) Making reasonable efforts to obtain consumer profile
1288 information from the consumer before the recommendation of an
1289 annuity.
1290 (II) Requiring an agent to consider the types of products
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1291 the agent is authorized and licensed to recommend or sell which
1292 address the consumer’s financial situation, insurance needs, and
1293 financial objectives. This does not require analysis or
1294 consideration of any products outside the authority and license
1295 of the agent or other possible alternative products or
1296 strategies available in the market at the time of the
1297 recommendation. Agents shall be held to standards applicable to
1298 agents with similar authority and licensure.
1299 (III) Having a reasonable basis to believe the consumer
1300 would benefit from certain features of the annuity, such as
1301 annuitization, death or living benefit, or other insurance -
1302 related features.
1303 c. The requirements of this subsection do not create a
1304 fiduciary obligation or relationship and only create a
1305 regulatory obligation as provided in this section.
1306 d. The consumer profile information, characteristics of the
1307 insurer, and product costs, rates, benefits, and features are
1308 those factors generally relevant in making a determination
1309 whether an annuity effectively addresses the consumer’s
1310 financial situation, insurance needs, and financial objectives,
1311 but the level of importance of each factor under the care
1312 obligation of this paragraph may vary depending on the facts and
1313 circumstances of a particular case. However, each factor may not
1314 be considered in isolation.
1315 e. The requirements under sub-subparagraph a. apply to the
1316 particular annuity as a whole and the underlying subaccounts to
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1317 which funds are allocated at the time of purchase or exchange of
1318 an annuity, and riders and similar product enhancements, if any.
1319 f. Sub-subparagraph a. does not require that the annuity
1320 with the lowest one-time occurrence compensation structure or
1321 multiple occurrence compensation structure shall necessarily be
1322 recommended.
1323 g. Sub-subparagraph a. does not require the agent to have
1324 ongoing monitoring obligations under the care obligation,
1325 although such an obligation may be separately owed under the
1326 terms of a fiduciary, consulting, investment, advising, or
1327 financial planning agreement between the consumer and the agent.
1328 h. In the case of an exchange or replacement of an annuity,
1329 the agent shall consider the whole transaction, which includes
1330 taking into consideration whether:
1331 (I) The consumer will incur a surrender charge; be subject
1332 to the commencement of a new surrender period; lose existing
1333 benefits, such as death, living, or other contractual benefits;
1334 or be subject to increased fees, investment advisory fees, or
1335 charges for riders and similar product enhancements.
1336 (II) The replacing product would substantially benefit the
1337 consumer in comparison to the replaced product over the life of
1338 the product.
1339 (III) The consumer has had another annuity exchange or
1340 replacement and, in particular, an exchange or replacement
1341 within the preceding 60 months.
1342 i. This section does not require an agent to obtain any
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1343 license other than an agent license with the appropriate line of
1344 authority to sell, solicit, or negotiate insurance in this
1345 state, including, but not limited to, any securities license, in
1346 order to fulfill the duties and obligations contained in this
1347 section; provided, the agent does not give advice or provide
1348 services that are otherwise subject to securities laws or engage
1349 in any other activity requiring other professional licenses.
1350 2.a. Before the recommendation or sale of an annuity, the
1351 agent shall prominently disclose to the consumer, on a form
1352 substantially similar to that posted on the office website as
1353 Appendix A, related to an insurance agent disclosure for
1354 annuities:
1355 (I) A description of the scope and terms of the
1356 relationship with the consumer and the role of the agent in the
1357 transaction.
1358 (II) An affirmative statement on whether the agent is
1359 licensed and authorized to sell the following products:
1360 (A) Fixed annuities.
1361 (B) Fixed indexed annuities.
1362 (C) Variable annuities.
1363 (D) Life insurance.
1364 (E) Mutual funds.
1365 (F) Stocks and bonds.
1366 (G) Certificates of deposit.
1367 (III) An affirmative statement describing the insurers for
1368 which the agent is authorized, contracted, or appointed, or
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1369 otherwise able to sell insurance products, using the followin g
1370 descriptions:
1371 (A) From one insurer;
1372 (B) From two or more insurers; or
1373 (C) From two or more insurers, although primarily
1374 contracted with one insurer.
1375 (IV) A description of the sources and types of cash
1376 compensation and noncash compensation to be received by the
1377 agent, including whether the agent is to be compensated for the
1378 sale of a recommended annuity by commission as part of premium
1379 or other remuneration received from the insurer, intermediary,
1380 or other agent, or by fee as a result of a contract for advice
1381 or consulting services.
1382 (V) A notice of the consumer’s right to request additional
1383 information regarding cash compensation described in sub -
1384 subparagraph b.
1385 b. Upon request of the consumer or the consumer’s
1386 designated representative, the agent shall disclose:
1387 (I) A reasonable estimate of the amount of cash
1388 compensation to be received by the agent, which may be stated as
1389 a range of amounts or percentages.
1390 (II) Whether the cash compensation is a one-time or
1391 multiple occurrence amount; and if a multiple occurrence amount,
1392 the frequency and amount of the occurrence, which may be stated
1393 as a range of amounts or percentages. When recommending the
1394 purchase or exchange of an annuity to a consumer which results
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1395 in an insurance transaction or series of insurance tr ansactions,
1396 the agent, or the insurer where no agent is involved, must have
1397 reasonable grounds for believing that the recommendation is
1398 suitable for the consumer, based on the consumer’s suitability
1399 information, and that there is a reasonable basis to believe all
1400 of the following:
1401 c.1. Before or at the time of the recommendation or sale of
1402 an annuity, the agent shall have a reasonable basis to believe
1403 the consumer has been reasonably informed of various features of
1404 the annuity, such as the potential surrender period and
1405 surrender charge; potential tax penalty if the consumer sells,
1406 exchanges, surrenders, or annuitizes the annuity; mortality and
1407 expense fees; any annual fees; investment advisory fees;
1408 potential charges for and features of riders or other options of
1409 the annuity; limitations on interest returns; potential changes
1410 in nonguaranteed elements of the annuity; insurance and
1411 investment components; and market risk.
1412 2. The consumer would benefit from certain features of the
1413 annuity, such as tax-deferred growth, annuitization, or the
1414 death or living benefit.
1415 3. An agent shall identify and avoid or reasonably manage
1416 and disclose material conflicts of interest, including material
1417 conflicts of interest related to an ownership interest.
1418 4. An agent shall at the time of the recommendation or
1419 sale:
1420 a. Make a written record of any recommendation and the
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1421 basis for the recommendation, subject to this section.
1422 b. Obtain a consumer-signed statement on a form
1423 substantially similar to that posted on the office website as
1424 Appendix B, related to a consumer’s refusal to provide
1425 information, documenting:
1426 (I) A customer’s refusal to provide the consumer profile
1427 information, if any.
1428 (II) A customer’s understanding of the ramifications of not
1429 providing his or her consumer profile information or providing
1430 insufficient consumer profile information.
1431 c. Obtain a consumer-signed statement on a form
1432 substantially similar to that posted on the office website as
1433 Appendix C, related to a consumer’s decision to purchase an
1434 annuity not based on a recommendation, acknowledging the annuity
1435 transaction is not recommended if a customer decides to enter
1436 into an annuity transaction that is not based on the agent’s
1437 recommendation.
1438 5. Any requirement applicable to an agent under this
1439 subsection applies to every agent who has exercised material
1440 control or influence in the making of a recommendation and has
1441 received direct compensation as a result of the recommendation
1442 or sale, regardless of whether the agent has had any direct
1443 contact with the consumer. Activities such as providing or
1444 delivering marketing or education materials, product wholesaling
1445 or other back office product support, and general supervision of
1446 an agent do not, in and of themselves, constitute material
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1447 control or influence.
1448 3. The particular annuity as a whole, the underlying
1449 subaccounts to which funds are allocated at the time of purchase
1450 or exchange of the annuity, and riders and similar product
1451 enhancements, if any, are suitable; and, in the case of an
1452 exchange or replacement, the transaction as a whole is suitable
1453 for the particular consumer based on his or her suitability
1454 information.
1455 4. In the case of an exchange or replacement of an annuity,
1456 the exchange or replacement is suitable after considering
1457 whether the consumer:
1458 a. Will incur a surrender charge; be subject to the
1459 commencement of a new surrender period; lose existing benefits,
1460 such as death, living, or other contractual benefits; or be
1461 subject to increased fees, investment advisory fees, or charges
1462 for riders and similar product enhancements;
1463 b. Would benefit from product enhancements and
1464 improvements; and
1465 c. Has had another annuity exchange or replacement,
1466 including an exchange or replacement within the preceding 36
1467 months.
1468 (b) Before executing a purchase, exchange, or replacement
1469 of an annuity resulting from a recommendation, an insurer or its
1470 agent must make reasonable efforts to obtain the consumer’s
1471 suitability information. The information shall be collected on
1472 form DFS-H1-1980, which is hereby incorporated by reference, and
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1473 completed and signed by the applicant and agent. Questions
1474 requesting this information must be presented in at least 12 -
1475 point type and be sufficiently clear so as to be readil y
1476 understandable by both the agent and the consumer. A true and
1477 correct executed copy of the form must be provided by the agent
1478 to the insurer, or to the person or entity that has contracted
1479 with the insurer to perform this function as authorized by this
1480 section, within 10 days after execution of the form, and shall
1481 be provided to the consumer no later than the date of delivery
1482 of the contract or contracts.
1483 (c) Except as provided under paragraph (d), an insurer may
1484 not issue an annuity recommended to a consumer unless there is a
1485 reasonable basis to believe the annuity is suitable based on the
1486 consumer’s suitability information.
1487 (b)1.(d) Except as provided under subparagraph 2., An
1488 insurer’s issuance of an annuity must be reasonable based on all
1489 the circumstances actually known to the insurer at the time the
1490 annuity is issued. However, an insurer or its agent does not
1491 have does not have an obligation to a consumer related to an
1492 annuity transaction under subparagraph (a)1. paragraph (a) or
1493 paragraph (c) if:
1494 a.1. A recommendation has not been made;
1495 b.2. A recommendation was made and is later found to have
1496 been based on materially inaccurate information provided by the
1497 consumer;
1498 c.3. A consumer refuses to provide relevant consumer
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1499 profile suitability information and the annuity transaction is
1500 not recommended; or
1501 d.4. A consumer decides to enter into an annuity
1502 transaction that is not based on a recommendation of the an
1503 insurer or its agent.
1504 2. An insurer’s issuance of an annuity subject to
1505 subparagraph 1. must be reasonable under all the circumstances
1506 actually known to the insurer at the time the annuity is issued.
1507 (c)1. Except as permitted under paragraph (b), an insurer
1508 may not issue an annuity recommended to a consumer unless there
1509 is a reasonable basis to believe the annuity would effectively
1510 address the particular consumer’s financial situation, insurance
1511 needs, and financial objectives based on the consumer’s consumer
1512 profile information.
1513 (e) At the time of sale, the agent or the agent’s
1514 representative must:
1515 1. Make a record of any recommendation made to the consumer
1516 pursuant to paragraph (a);
1517 2. Obtain the consumer’s signed statement documenting his
1518 or her refusal to provide suitability information, if
1519 applicable; and
1520 3. Obtain the consumer’s signed statement acknowledging
1521 that an annuity transaction is not recommended if he or she
1522 decides to enter into an annuity transaction that is not based
1523 on the insurer’s or its agent’s recommendation, if applicable.
1524 (f) Before executing a replacement or exchange of an
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1525 annuity contract resulting from a recommendation, the agent must
1526 provide on form DFS-H1-1981, which is hereby incorporated by
1527 reference, information that compares the differences between the
1528 existing annuity contract and the annuity contract being
1529 recommended in order to determine the suitability of the
1530 recommendation and its benefit to the consumer. A true and
1531 correct executed copy of this form must be provided by the agent
1532 to the insurer, or to the person or entity that has contracted
1533 with the insurer to perform this function as authorized by this
1534 section, within 10 days after execution of the form, and must be
1535 provided to the consumer no later than the date of delivery of
1536 the contract or contracts.
1537 2.(g) An insurer shall establish and maintain a supervision
1538 system that is reasonably designed to achieve the insurer’s and
1539 its agent’s compliance with this section, including, but not
1540 limited to, the following:.
1541 1. Such system must include, but is not limited to:
1542 a. The insurer shall establish and maintain Maintaining
1543 reasonable procedures to inform its agents of the requirements
1544 of this section and incorporating those requirements into
1545 relevant agent training manuals.;
1546 b. The insurer shall establish and maintain Establishing
1547 standards for agent product training and shall establish and
1548 maintain reasonable procedures to require its agents to comply
1549 with the requirements of subsection (6).;
1550 c. The insurer shall provide Providing product-specific
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1551 training and training materials that explain all material
1552 features of its annuity products to its agents.;
1553 d. The insurer shall establish and maintain Maintaining
1554 procedures for the review of each recommendation before issuance
1555 of an annuity which are designed to ensure that there is a
1556 reasonable basis to determine the recommended annuity would
1557 effectively address the particular consumer’s financial
1558 situation, insurance needs, and financial objectives for
1559 determining that a recommendation is suitable. Such review
1560 procedures may use a screening system for identifying selected
1561 transactions for additional review and may be accomplished
1562 electronically or through other means, including, but not
1563 limited to, physical review. Such electronic or other system may
1564 be designed to require additional review only of those
1565 transactions identified for additional review using established
1566 selection criteria.;
1567 e. The insurer shall establish and maintain Maintaining
1568 reasonable procedures to detect recommendations that are not in
1569 compliance with paragraphs (a), (b), (d), and (e). This may
1570 include, but is not limited to, suitable, such as confirmation
1571 of consumer profile suitability information, systematic customer
1572 surveys, agent and consumer interviews, confirmation letters,
1573 agent statements or attestations, and internal monitoring
1574 programs. This sub-subparagraph does not prevent an insurer from
1575 using sampling procedures or from confirming the consumer
1576 profile suitability information after the issuance or delivery
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1577 of the annuity.; and
1578 f. The insurer shall establish and maintain reasonable
1579 procedures to assess, prior to or upon issuance or delivery of
1580 an annuity, whether an agent has provided to the consumer the
1581 information required to be provided under this subsection.
1582 g. The insurer shall establish and maintain reasonable
1583 procedures to identify and address suspicious consumer refusals
1584 to provide consumer profile information.
1585 h. The insurer shall establish and maintain reasonable
1586 procedures to identify and eliminate any sales contests, sales
1587 quotas, bonuses, and noncash compensation that are based on the
1588 sales of specific annuities within a limited period of time. The
1589 requirements of this sub-subparagraph are not intended to
1590 prohibit the receipt of health insurance, office rents, office
1591 support, retirement benefits, or other employee benefits by
1592 employees, as long as those benefits are not based upon the
1593 volume of sales of a specific annuity within a limited period of
1594 time.
1595 i.f. The insurer shall annually provide providing a written
1596 report to senior managers, including the senior manager who is
1597 responsible for audit functions, which details a review, along
1598 with appropriate testing, which is reasonably designed to
1599 determine the effectiveness of the supervision system, the
1600 exceptions found, and corrective action taken or recommended, if
1601 any.
1602 3.2. An insurer is not required to include in its
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1603 supervision system:
1604 a. Agent recommendations to consumers of products other
1605 than the annuities offered by the insurer; or
1606 b. Consideration of or comparison to options available to
1607 the agent or compensation relating to those options other than
1608 annuities or other products offered by the insurer.
1609 4.3. An insurer may contract for performance of a function ,
1610 including maintenance of procedures, required under subparagraph
1611 1.
1612 a. An insurer’s supervision system under this subsection
1613 shall include supervision of contractual performance under this
1614 subsection, which includes, but is If an insurer contracts for
1615 the performance of a function, the insurer must inclu de the
1616 supervision of contractual performance as part of those
1617 procedures listed in subparagraph 1. These include, but are not
1618 limited to:
1619 (I) Monitoring and, as appropriate, conducting audits to
1620 ensure that the contracted function is properly performed; a nd
1621 (II) Annually obtaining a certification from a senior
1622 manager who has responsibility for the contracted function that
1623 the manager has a reasonable basis to represent, and does
1624 represent, for representing that the function is being properly
1625 performed.
1626 b. An insurer is responsible for taking appropriate
1627 corrective action and may be subject to sanctions and penalties
1628 pursuant to subsection (8) (7) regardless of whether the insurer
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1629 contracts for performance of a function and regardless of the
1630 insurer’s compliance with sub-subparagraph a.
1631 (d)(h) Neither an agent nor an insurer shall may not
1632 dissuade, or attempt to dissuade, a consumer from:
1633 1. Truthfully responding to an insurer’s request for
1634 confirmation of consumer profile suitability information;
1635 2. Filing a complaint; or
1636 3. Cooperating with the investigation of a complaint.
1637 (e)1.(i) Recommendations and sales made in compliance with
1638 comparable standards shall FINRA requirements pertaining to the
1639 suitability and supervision of annuity transactions satisfy the
1640 requirements of this section. This applies to all
1641 recommendations and FINRA broker-dealer sales of variable
1642 annuities made by financial professionals in compliance with
1643 business rules, controls, and procedures that satisfy a
1644 comparable standard even if such standard would not otherwise
1645 apply to the product or recommendation at issue and fixed
1646 annuities if the suitability and supervision is similar to those
1647 applied to variable annuity sales. However, this paragraph does
1648 not limit the ability of the office or the department to
1649 investigate and enforce, including investigate, the provisions
1650 of this section.
1651 2. Subparagraph 1. does not limit the insurer’s obligation
1652 to comply with subparagraph (c)1., although the insurer may base
1653 its analysis on information received from either the financial
1654 professional or the entity supervising the financial
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1655 professional.
1656 3. For subparagraph 1. this paragraph to apply, an insurer
1657 must:
1658 a.1. Monitor relevant conduct of the financial professional
1659 seeking to rely on subparagraph 1. or the entity responsible for
1660 supervising the financial professional, such as the financial
1661 professional’s broker-dealer or an investment adviser registered
1662 under federal or state securities law, the FINRA member broker-
1663 dealer using information collected in the normal course of an
1664 insurer’s business; and
1665 b.2. Provide to the entity responsible for supervising the
1666 financial professional seeking to rely on subparagraph 1., such
1667 as the financial professional’s broker-dealer or investment
1668 adviser registered under federal or state securities laws, FINRA
1669 member broker-dealer information and reports that are reasonably
1670 appropriate to assist such entity the FINRA member broker-dealer
1671 in maintaining its supervision system.
1672 4. For purposes of this paragraph, the term:
1673 a. “Comparable standards” means:
1674 (I) With respect to broker-dealers and registered
1675 representatives of broker-dealers, applicable SEC and FINRA
1676 rules pertaining to best interest obligations and supervision of
1677 annuity recommendations and sales, including, but not limited
1678 to, Regulation Best Interest, 17 C.F.R. s. 240.15l–1, and any
1679 amendments or successor regulations thereto;
1680 (II) With respect to investment advisers registered under
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Amendment No. 1
1681 federal or state securities laws or investment adviser
1682 representatives, the fiduciary duties and all other requirements
1683 imposed on such investment advisers or investment adviser
1684 representatives by contract or under the Investment Advisers Act
1685 of 1940 or applicable state securities laws, including, but not
1686 limited to, Form ADV and interpretations; and
1687 (III) With respect to plan fiduciaries or fiduciaries, the
1688 duties, obligations, prohibitions, and all other requirements
1689 attendant to such status under the Employee Retirement Income
1690 Security Act of 1974 or the Internal Revenue Code and any
1691 amendments or successor statutes thereto.
1692 b. “Financial professional” means an agent that is
1693 regulated and acting as:
1694 (I) A broker-dealer registered under federal or state
1695 securities laws or a registered representative of a broker -
1696 dealer;
1697 (II) An investment adviser registered under federal or
1698 state securities laws or an investment adviser representative
1699 associated with the federal or state registered investment
1700 adviser; or
1701 (III) A plan fiduciary under s. 3(21) of the Employee
1702 Retirement Income Security Act of 1974 or fiduciary under s.
1703 4975(e)(3) of the Internal Revenue Code or any amendments or
1704 successor statutes thereto.
1705 (6) AGENT TRAINING.—
1706 (a) An agent shall not solicit the sale of an annuity
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Amendment No. 1
1707 product unless the agent has adequate knowledge of the product
1708 to recommend the annuity and the agent is in compliance with the
1709 insurer’s standards for product training. An agent may rely on
1710 insurer-provided, product-specific training standards and
1711 materials to comply with this subsection.
1712 (b)1.a. An agent who engages in the sale of annuity
1713 products shall complete a one-time 4-hour training course. This
1714 requirement is not part of an agent’s continuing education
1715 requirement in s. 626.2815; however, if a course provider
1716 submits and receives approval from the department, the course is
1717 eligible for continuing education credit pursuant to s.
1718 626.2815.
1719 b. Agents who hold a life insurance line of authority on
1720 January 1, 2024, and who desire to sell annuities shall complete
1721 the requirements of this subsection by July 1, 2024. Individuals
1722 who obtain a life insurance line of authority after January 1,
1723 2024, may not engage in the sale of annuities until the annuity
1724 training course required under this subsection has been
1725 completed.
1726 2. The minimum length of the training required under this
1727 subsection is 4 hours.
1728 3. The training required under this subsection shall
1729 include information on the following topics:
1730 a. The types of annuities and various classifications of
1731 annuities.
1732 b. Identification of the parties to an annuity.
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1733 c. How product-specific annuity contract features affect
1734 consumers.
1735 d. The application of income taxation of qualified and
1736 nonqualified annuities.
1737 e. The primary uses of annuities.
1738 f. The appropriate standard of conduct, sales practices,
1739 replacement, and disclosure requirements.
1740 4. Providers of courses intended to comply with this
1741 subsection shall cover all topics listed in the prescribed
1742 outline and shall not present any marketing information or
1743 provide training on sales techniques or provide specific
1744 information about a particular insurer’s products. Additional
1745 topics may be offered in conjunction with and in addition to the
1746 required outline.
1747 5. An agent who has completed an annuity training course
1748 before January 1, 2024, shall, by July 1, 2024, complete e ither:
1749 a. A new 4-hour training course; or
1750 b. An additional 1-hour training course on appropriate
1751 sales practices, replacement, and disclosure requirements under
1752 this section.
1753 6. Annuity training courses may be conducted and completed
1754 by classroom or self-study methods.
1755 7. Providers of annuity training shall issue certificates
1756 of completion.
1757 8. The satisfaction of the training requirements of another
1758 state that are substantially similar to the provisions of this
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Amendment No. 1
1759 subsection shall be deemed to satisfy the training requirements
1760 of this subsection in this state.
1761 9. The satisfaction of the training requirements of any
1762 course or courses with components substantially similar to the
1763 provisions of this subsection shall be deemed to satisfy the
1764 training requirements of this subsection in this state.
1765 10. An insurer shall verify that an agent has completed the
1766 annuity training course required under this subsection before
1767 allowing the agent to sell an annuity product for that insurer.
1768 (7)(6) RECORDKEEPING.—
1769 (a) Insurers and agents must maintain or be able to make
1770 available to the office or department records of the information
1771 collected from the consumer and other information used in making
1772 the recommendations that were the basis for insurance
1773 transactions for 5 years after the insurance transaction is
1774 completed by the insurer. An insurer may maintain the
1775 documentation on behalf of its agent.
1776 (b) Records required to be maintained under this subsection
1777 may be maintained in paper, photographic, microprocess,
1778 magnetic, mechanical, or electronic media, or by any process
1779 that accurately reproduces the actual document.
1780 (8)(7) COMPLIANCE MITIGATION; PENALTIES.—
1781 (a) An insurer is responsible for compliance with this
1782 section. If a violation occurs because of the action or inaction
1783 of the insurer or its agent which results in harm to a consumer,
1784 the office may order the insurer to take reasonably appropriate
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Amendment No. 1
1785 corrective action for the consumer and may impose appropriate
1786 penalties and sanctions.
1787 (b) The department may order:
1788 1. An insurance agent to take reasonably appropriate
1789 corrective action for a consumer harmed by a violation of this
1790 section by the insurance agent, including monetary restitution
1791 of penalties or fees incurred by the consumer, and impose
1792 appropriate penalties and sanctions.
1793 2. A managing general agency or insurance agency that
1794 employs or contracts with an insurance agent to sell or solicit
1795 the sale of annuities to consumers to take reasonably
1796 appropriate corrective action for a consumer harmed by a
1797 violation of this section by the insurance agent.
1798 (c) In addition to any other penalty authorized under
1799 chapter 626, the department shall order an insurance agent to
1800 pay restitution to a consumer who has been deprived of money by
1801 the agent’s misappropriation, conversion, or unlawful
1802 withholding of moneys belonging to the consumer in the course of
1803 a transaction involving annuities. The amount of restitution
1804 required to be paid may not exceed the amount misappropriated,
1805 converted, or unlawfully withheld. This paragraph does not limit
1806 or restrict a person’s right to seek other remedies as provided
1807 by law.
1808 (d) Any applicable penalty under the Florida Insurance Code
1809 for a violation of this section shall be reduced or eliminated
1810 according to a schedule adopted by the office or the department,
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Amendment No. 1
1811 as appropriate, if corrective action for the consumer was taken
1812 promptly after a violation was discovered.
1813 (e) A violation of this section does not create or imply a
1814 private cause of action.
1815 (9)(8) PROHIBITED CHARGES.—An annuity contract issued to a
1816 senior consumer age 65 or older may not contain a surrender or
1817 deferred sales charge for a withdrawal of money from an annuity
1818 exceeding 10 percent of the amount withdrawn. The charge shall
1819 be reduced so that no surrender or deferred sales charge exists
1820 after the end of the 10th policy year or 10 years after the date
1821 of each premium payment if multiple premiums are paid, whichever
1822 is later. This subsection does not apply to annuities purchased
1823 by an accredited investor, as defined in Regulation D as adopted
1824 by the United States Securities and Exchange Commission, or to
1825 those annuities specified in paragraph (4)(b).
1826 (10)(9) RULES.—The department and the commission may adopt
1827 rules to administer this section. The department may adopt by
1828 rule the forms prescribed in the National Association of
1829 Insurance Commissioners Suitability in Annuity Transactions
1830 Model Regulation Appendix A - Insurance Agent (Producer)
1831 Disclosure for Annuities, Appendix B - Consumer Refusal to
1832 Provide Information, and Appendix C - Consumer Decision to
1833 Purchase an Annuity Not Based on a Recommendation.
1834 Section 17. Subsection (5) is added to section 627.70132,
1835 Florida Statutes, to read:
1836 627.70132 Notice of property insurance claim.—
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Amendment No. 1
1837 (5) For loss assessment claims made under s. 627.714, the
1838 notice of claim must be given to the insurer in accordance with
1839 the terms of the policy within 3 years of the date of loss.
1840 Section 18. Paragraph (b) of subsection (8) of section
1841 634.041, Florida Statutes, is amended to read:
1842 634.041 Qualifications for license.—To qualify for and hold
1843 a license to issue service agreements in this state, a service
1844 agreement company must be in compliance with this part, with
1845 applicable rules of the commission, with related sections of the
1846 Florida Insurance Code, and with its charter powers and must
1847 comply with the following:
1848 (8)
1849 (b) A service agreement company does not have to establish
1850 and maintain an unearned premium reserve if it secures and
1851 maintains contractual liability insurance in accordance with the
1852 following:
1853 1. Coverage of 100 percent of the claim exposure is
1854 obtained from an insurer approved by the office, wh ich holds a
1855 certificate of authority under s. 624.401 to do business within
1856 this state, or secured through a risk retention group, which is
1857 authorized to do business within this state under s. 627.943 or
1858 s. 627.944. Such insurer or risk retention group must maintain a
1859 surplus as regards policyholders of at least $15 million.
1860 2. If the service agreement company does not meet its
1861 contractual obligations, the contractual liability insurance
1862 policy binds its issuer to pay or cause to be paid to the
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Amendment No. 1
1863 service agreement holder all legitimate claims and cancellation
1864 refunds for all service agreements issued by the service
1865 agreement company while the policy was in effect. This
1866 requirement also applies to those service agreements for which
1867 no premium has been remitted to the insurer.
1868 3. If the issuer of the contractual liability policy is
1869 fulfilling the service agreements covered by the contractual
1870 liability policy and the service agreement holder cancels the
1871 service agreement, the issuer must make a full refund of
1872 unearned premium to the consumer, subject to the cancellation
1873 fee provisions of s. 634.121(3). The sales representative and
1874 agent must refund to the contractual liability policy issuer
1875 their unearned pro rata commission.
1876 4. The policy may not be canceled, terminated, or
1877 nonrenewed by the insurer or the service agreement company
1878 unless a 90-day written notice thereof has been given to the
1879 office by the insurer before the date of the cancellation,
1880 termination, or nonrenewal.
1881 5. The service agreement company must provide the office
1882 with the claims statistics.
1883 6. A policy issued in compliance with this paragraph may
1884 either pay 100 percent of claims as they are incurred, or 100
1885 percent of claims due in the event of the failure of the service
1886 agreement company to pay such claims when due.
1887
1888 All funds or premiums remitted to an insurer by a motor vehicle
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Amendment No. 1
1889 service agreement company under this part shall remain in the
1890 care, custody, and control of the insurer and shall be counted
1891 as an asset of the insurer; provided, however, this requirement
1892 does not apply when the insurer and the motor vehicle service
1893 agreement company are affiliated companies and members of an
1894 insurance holding company system. If the motor vehicle service
1895 agreement company chooses to comply with this paragraph but also
1896 maintains a reserve to pay claims, such reserve shall only be
1897 considered an asset of the covered motor vehicle service
1898 agreement company and may not be simultaneously counted as an
1899 asset of any other entity.
1900 Section 19. Paragraphs (d), (e), and (f) of subsection (17)
1901 of section 634.401, Florida Statutes, are amended to read:
1902 634.401 Definitions.—As used in this part, the term:
1903 (17) “Manufacturer” means any entity or its affiliate
1904 which:
1905 (d) Maintains outstanding debt obligations, if any, rate d
1906 in the top four rating categories by a recognized rating
1907 service;
1908 (d)(e) Has and maintains at all times, a minimum net worth
1909 of at least $100 $10 million as evidenced by certified financial
1910 statements prepared by an independent certified public
1911 accountant in accordance with generally accepted accounting
1912 principles; and
1913 (e)(f) Is authorized to do business in this state.
1914 Section 20. Paragraph (a) of subsection (7) of section
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Amendment No. 1
1915 634.406, Florida Statutes, is amended to read:
1916 634.406 Financial requirements.—
1917 (7) An association licensed under this part and holding no
1918 other license under part I or part II of this chapter is not
1919 required to establish an unearned premium reserve or maintain
1920 contractual liability insurance and may allow its premiums to
1921 exceed the ratio to net assets limitation of this section if the
1922 association complies with the following:
1923 (a) The association or, if the association is a direct or
1924 indirect wholly owned subsidiary of a parent corporation, its
1925 parent corporation has, and maintains at all times, a minimum
1926 net worth of at least $100 million and provides the office with
1927 the following:
1928 1. A copy of the association’s annual audited financial
1929 statements or the audited consolidated financial statements of
1930 the association’s parent corporation, prepared by an independent
1931 certified public accountant in accordance with generally
1932 accepted accounting principles, which clearly demonstrate the
1933 net worth of the association or its parent corporation to be
1934 $100 million and a quarterly written certification to the office
1935 that such entity continues to maintain the net worth required
1936 under this paragraph.
1937 2. The association’s, or its parent corporation’s, Form 10 -
1938 K, Form 10-Q, or Form 20-F as filed with the United States
1939 Securities and Exchange Commission or such other documents
1940 required to be filed with a recognized stock exchange, which
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Amendment No. 1
1941 shall be provided on a quarterly and annual basis within 10 days
1942 after the last date each such report must be filed with the
1943 Securities and Exchange Commission, the National Association of
1944 Security Dealers Automated Quotation system, or other recognized
1945 stock exchange.
1946
1947 Failure to timely file the documents required under this
1948 paragraph may, at the discretion of the office, subject the
1949 association to suspension or revocation of its license under
1950 this part. An association or parent corporation demonstrating
1951 compliance with subparagraphs 1. and 2. must maintain
1952 outstanding debt obligations, if any, rated in the top four
1953 rating categories by a recognized rating service.
1954 Section 21. Except as otherwise expressly provided in this
1955 act, this act shall take effect July 1, 2023.
1956
1957 -----------------------------------------------------
1958 T I T L E A M E N D M E N T
1959 Remove everything before the enacting clause and insert:
1960 An act relating to consumer protection; amending s. 494.001,
1961 F.S.; revising the definition of the term “branch office”;
1962 defining the term “remote location”; authorizing a licensee
1963 under ch. 494, F.S., to allow loan originators to work from
1964 remote locations if specified conditions are met; amending s.
1965 494.0067, F.S.; specifying that mortgage lenders may transact
1966 business from branch offices and remote locations; providing a
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Amendment No. 1
1967 requirement for operating remote locations; creating s.
1968 501.2042, F.S.; defining terms; providing requirements for
1969 organizers of crowd-funding campaigns related to disasters and
1970 for crowd-funding platforms; amending s. 520.23, F.S.; revising
1971 disclosure requirements for agreements governing the sale or
1972 lease of a distributed energy generation system; amending s.
1973 560.111, F.S.; providing a criminal penalty; amending s.
1974 560.309, F.S.; prohibiting a licensee under ch. 560, F.S., from
1975 cashing corporate checks for certain payees where the aggregate
1976 face amount exceeds a specified amount; amending s. 626.551,
1977 F.S.; revising the timeframe in which an insurance
1978 representative must notify the Department of Financial Services
1979 of certain changes in information; amending s. 626.602, F.S.;
1980 providing applicability of provisions relating to the
1981 disapproval of insurance agency names to adjusting firm names;
1982 revising grounds on which such names may be disapproved by the
1983 department; deleting an obsolete provision; amending s. 626.854,
1984 F.S.; revising the definition of the term “public adjuster”;
1985 prohibiting public adjusters from contracting with anyone other
1986 than the named insured without the insured’s written consent;
1987 specifying a penalty for noncompliance; specifying timeframes in
1988 which an insured or a claimant may cancel a public adjuster’s
1989 contract without penalty or contract under certain
1990 circumstances; revising requirements for public adjusters’
1991 contracts; specifying requirements for public adjusters if the
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Amendment No. 1
1992 insurer, within a certain timeframe, pays or commits in writing
1993 to pay to the insured the policy limit of the policy; specifying
1994 limitations on commissions received by public adjusters;
1995 amending s. 626.860, F.S.; providing that an attorney’s
1996 exemption from public adjuster licensure requirements does not
1997 apply to certain persons; amending s. 626.875, F.S.; rev ising
1998 recordkeeping requirements for appointed independent adjusters
1999 and licensed public adjusters; amending s. 626.8796, F.S.;
2000 revising requirements for public adjuster contracts; specifying
2001 requirements for and prohibitions on public adjusters relating
2002 to such contracts; providing construction; authorizing the
2003 department to adopt rules; amending s. 626.8797, F.S.; revising
2004 a fraud statement requirement in proof-of-loss statements;
2005 amending s. 626.9541, F.S.; adding an unfair or deceptive
2006 insurance act relating to health insurance policies; amending s.
2007 627.4025, F.S.; revising the definition of the term “hurricane,”
2008 and defining the term “hurricane deductible,” as used in
2009 policies providing residential coverage; amending s. 627.4133,
2010 F.S.; revising conditions that apply to a specified notice
2011 requirement for, and a limitation on, the cancellation or
2012 termination of certain insurance policies; amending s. 627.4554,
2013 F.S.; revising legislative purpose; revising applicability;
2014 revising and defining terms; revising and specifying duties of
2015 insurers and agents relating to the recommendation and sale of
2016 annuity investments; specifying comparable standards that comply
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Amendment No. 1
2017 with such requirements; specifying agent training requirements;
2018 providing and revising construction; authorizing the department
2019 to adopt certain forms by rule; amending s. 634.041, F.S.;
2020 specifying authorized methods of paying claims for motor vehicle
2021 service agreements; amending s. 634.401, F.S.; revising the
2022 definition of the term “manufacturer” for purposes of part III
2023 of ch. 634, F.S.; amending s. 634.406, F.S.; deleting a debt
2024 obligation rating requirement for certain service warranty
2025 associations or parent corporations; providing effective dates.
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CS/CS/HB 1209
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/HB 1209 Rural Economic Development
SPONSOR(S): Ways & Means Committee, Regulatory Reform & Economic Development Subcommittee,
Shoaf and others
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform & Economic Development 15 Y, 0 N, As CS Walsh Anstead
Subcommittee
2) Ways & Means Committee 22 Y, 0 N, As CS Berg Aldridge
3) Commerce Committee Walsh Hamon
SUMMARY ANALYSIS
Related to the Regional Rural Development Grants Program, the bill:
Removes the match requirements.
Removes the requirement for local governments and private businesses to make financial or in-kind
commitments to the regional organization.
Related to the Rural Infrastructure Fund, the bill:
Allows DEO to award grants for up to 75 percent of the total infrastructure project cost, an increase
from 50 percent.
Allows DEO to award grants for up to 100 percent of the total infrastructure project cost for a project
located in a rural community or a rural area of opportunity, if the county is also fiscally constrained.
Removes the requirement related to infrastructure feasibility studies and other infrastructure planning
activities that grants awarded be limited to 30 percent of the total project cost.
Related to the Florida Development Finance Corporation, the bill:
Removes the repeal of the corporation in current law.
Provides that after July 1, 2023, the corporation may not establish any new residential Property
Assessed Clean Energy (PACE) agreements.
Related to Triumph Gulf Coast, Inc., the bill:
Specifies that awards for public infrastructure projects may include projects for workforce housing. The
recipient of an award for workforce housing must be a local government in a disproportionately affected
county.
Defines workforce housing as housing that is affordable to natural persons or families whose total
annual household income does not exceed 80 percent of the median annual adjusted gross income for
households.
Related to the Everglades Restoration Agricultural Community Employment Training Program, the bill:
Specifies definitions and changes the phrase “areas of high agricultural unemployment” to “Everglades
Agricultural Area and rural areas of opportunity.”
Specifies that DEO, in cooperation with CareerSource Florida, Inc., must prioritize grants under the
Everglades Restoration Agricultural Community Employment Training Program that assist training
programs located in Rural Areas of Opportunity.
The bill provides an effective date of July 1, 2023.
The bill does not impact state or local government revenues or expenditures.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h1209c.COM
DATE: 4/15/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Present Situation
Regional Rural Development Grants Program
The Regional Rural Development Grants Program was established to provide funding, through
matching grants, to build the professional capacity of regionally based economic development
organizations located in rural communities. The concept of building the “professional capacity” of an
economic development organization includes hiring professional staff to develop, deliver, and provide
economic development professional services. Professional services include technical assistance,
education and leadership development, marketing, and project recruitment. 1
Applications submitted to the Department of Economic Opportunity (DEO) for funding through this
program must provide proof:2
Of official commitments of support from each of the units of local government represented by
the regional organization;
That each local government has made financial or in-kind commitments to the regional
organization;
That the private sector has made financial or in-kind commitment to the regional organization;
That the regional organization is in existence and actively involved in economic development
activities serving the region; and
Of the manner in which the organization coordinates its efforts with those other local and state
organizations.
An organization may receive up to $50,000 a year or $250,000 if located in an RAO. 3 Grants must be
matched by an amount of non-state resources equal to 25 percent of the state contribution. DEO is
authorized to spend up to $750,000 each fiscal year from funds appropriated to the Rural Community
Development Revolving Loan Fund to carry out this program. 4
Rural Infrastructure Fund
The Rural Infrastructure Fund is a grant program created to facilitate the planning, preparing, and
financing of infrastructure projects in rural communities. 5 The program provides access to federal and
state infrastructure funding programs, including, but not limited to, those offered by the United States
Departments of Agriculture and Commerce.6 The program funds total infrastructure project grants,
infrastructure feasibility grants, and preclearance review grants.
DEO may award grants for up to 50 percent of the total infrastructure project cost. 7 Projects must be
related to specific job-creation or job-retention opportunities. Additionally, projects may include
improving any inadequate infrastructure that has resulted in regulatory action that prohibits economic or
community growth or reducing the costs to community users of proposed infrastructure improvements
that exceed such costs in comparable communities, and improving the access availability of broadband
Internet service.
1 S. 288.018(1)(b), F.S.
2 S. 288.018(2), F.S.
3 S. 288.018(1)(c), F.S.
4 S. 288.018(4), F.S.
5 See s. 288.0655, F.S.
6 S. 288.0655(2)(b), F.S.
7 Id.
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Eligible uses of funds include improvements to public infrastructure for industrial or commercial sites,
upgrades to or development of public tourism infrastructure, and improvements to broadband Internet
service and access in unserved or underserved rural communities. 8 Infrastructure can include public or
public-private partnership facilities, like storm water systems, telecommunication, broadband, roads,
and nature-based tourism.9
The infrastructure feasibility grant provides awards of up to 30 percent of the total project costs for
infrastructure feasibility studies, design and engineering activities, or other infrastructure planning and
preparation activities.10 Maximum awards are dependent on the number of jobs that a business
commits to create and may be up to $300,000 if the project is located in a RAO. The total projec t
participation grant may be used in conjunction with the infrastructure feasibility grant.
The preclearance review grant provides awards to help a local government participate in expedited
permitting processes through technical assistance in preparing permit applications and local
comprehensive plan amendments.11 Grants may be used for surveys, feasibility studies, and other
activities related to the identification and preclearance review of land use modifications. Grants are
limited to $75,000 and must be matched 50 percent with local funds. However, projects in a RAO may
receive up to $300,000 and must be matched 33 percent with local funds. 12
Grant applications are reviewed and certified by DEO in consultation with Enterprise Florida, Inc., the
Florida Tourism Industry Marketing Corporation, the Department of Environmental Protection, and the
Florida Fish and Wildlife Conservation Commission. 13 Reviews include an evaluation of the economic
benefit of the projects and their long-term viability.
A total of $30 million in funding was made through the Rural Infrastructure Fund for Fiscal Year 2022-
2023. Twenty-five million was available for eligible rural communities statewide and an additional $5
million was available specifically for Florida Panhandle counties.14
Rural Areas of Opportunity
A rural area of opportunity (RAO) is a rural community,15 or region comprised of rural communities,
designated by the Governor, that has been adversely affected by an extraordinary economic event,
severe or chronic distress, or a natural disaster.16 An area may also be designated as an RAO if it
presents a unique economic development opportunity of regional impact. The designation of an RAO
must be agreed upon by the Department of Economic Opportunity (DEO), as well as the c ounty and
municipal governments to be included in the RAO.17
8 Id.
9 Broadband Internet service must be provided in partnership with one or more dealers of communications services. S.
288.0655(2)(b), F.S.
10 S. 288.0655(2)(c), F.S.
11 S. 288.0655(2)(e), F.S. Expedited permitting is pursuant to s. 403.9739(18), F.S.
12 S. 288.0655(2)(e), F.S.
13 S. 288.0655(3), F.S.
14 Department of Economic Opportunity, Rural Infrastructure Fund, https://floridajobs.org/community-planning-and-
development/rural-community-programs/rural-infrastructure-fund (last visited March 24, 2023).
15 Section 288.0656(2)(e), F.S., defines a “rural community” as is any county with a population of 75,000 or fewer, any
county with a population of 125,000 or fewer that is contiguous to a county with a population of 75,000 or fewer, a
municipality in a county that meets either of the aforementioned criteria, or an unincorporated federal enterprise
community or an incorporated rural city with a population of 25,000 or fewer and an employment base focused on
traditional agricultural or resource-based industries, located in a county not defined as rural, which has at least three or
more of the economic distress factors.
16 S. 288.0656(2)(d), F.S.
17 S. 288.0656(7)(b), F.S.
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Based on recommendations of the Rural Economic Development Initiative (REDI), 18 the Governor may
designate up to three RAOs by executive order.19 This designation establishes these areas as priority
assignments for REDI and allows the Governor, acting through REDI, to waive criteria, requirements, or
similar provisions of any economic development initiative.
Currently, there are three designated RAO areas:
Northwest RAO: Calhoun, Franklin, Gadsden, Gulf, Holmes, Jackson, Liberty, Wakulla, and
Washington counties, and portions of Walton County (the City of Freeport and lands north of the
Choctawhatchee Bay and intercoastal waterway).
South Central RAO: DeSoto, Glades, Hardee, Hendry, Highlands, and Okeechobee counties,
and the cities of Pahokee, Belle Glade, and South Bay in Palm Beach County and the city of
Immokalee in Collier County.
North Central RAO: Baker, Bradford, Columbia, Dixie, Gilchrist, Hamilton, Jefferson, Lafayette,
Levy, Madison, Putnam, Suwannee, Taylor, and Union counties. 20
Florida Development Finance Corporation
The Florida Development Finance Corporation (FDFC) is a statewide development financing authority
created by the Legislature.21 The FDFC operates as a conduit bond issuer that issues bonds on behalf
of borrowers.22 While the FDFC functions as a mechanism to help borrowers access capital markets, it
does not take on responsibility of debt repayment, even when a borrower fails to repay. Conversely, the
FDFC does not guarantee the bonds it issues but certain borrowers may opt in to the guaranty fund
established by the FDFC pursuant to s. 288.9607, F.S., which guarantees that the bonds issued will be
repaid. This guaranty fund consists of premiums paid by businesses that wish to participate in the fund
and by a property interest in the infrastructure built with the insured bond’s proceeds. 23
A majority of the FDFC’s financial assistance results from the issuance of municipal bonds, of which it
may issue either a taxable revenue bond or a tax-exempt bond.24 The bonds issued can provide
financing for projects that further public purposes and are issued on behalf of a range of organizations.
The FDFC also administers the PACE program, for which it may issue bonds and other financial
assistance that supports energy conservation.25 PACE allows for the repayment of debt to be paid
through a property tax bill and typical measures funded by the program include HVAC, lighting, solar,
and water fixtures.26
The FDFC is governed by a seven-member board of directors. The Secretary of DEO must serve as
chair of the board of directors, and the director of the Division of Bond Finance of the State Board of
Administration must serve as a director.27
Under current law, the FDFC will be repealed on July 1, 2023.28
18 S. 288.0656(1)(a), F.S. REDI was established by the Legislature to encourage and facilitate the location and expansion
of major economic development projects of significant scale in rural communities.
19 S. 288.0656(7)(a), F.S.
20 Department of Economic Opportunity, Rural Areas of Opportunity, https://floridajobs.org/community-planning-and-
development/rural-community-programs/rural-areas-of-opportunity (last visited March 24, 2023). The economic
development organizations for these RAOs are named Opportunity Florida, Florida’s Heartland Regional Economic
Development Initiative, and the North Florida Economic Development Partnership, respectively.
21 S. 288.9604, F.S.
22 S. 288.9605, F.S.
23 The guaranty may not exceed 5 percent of the aggregate principal amount of bonds or other indebtedness relating to
any capital project. S. 288.9607, F.S.
24 Florida Development Finance Corporation, About Us, available at https://www.fdfcbonds.com/about (last visited April 7,
2023).
25 Florida Development Finance Corporation, Property Assessed Clean Energy “PACE” – Commercial PACE, available at
https://www.fdfcbonds.com/cpace (last visited April 7, 2023).
26 Id.
27 S. 288.9604(2), F.S.
28 S. 288.9604, F.S.
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Triumph Gulf Coast, Inc.
Pursuant to the Gulf Coast Economic Corridor Act,29 Triumph Gulf Coast, Inc.,30 a nonprofit corporation,
oversees the expenditure of the immediate transfer of 75 percent of all funds recovered by the Attorney
General31 for economic damages to the state that resulted from the 2010 Deepwater Horizon oil spill.
Triumph Gulf Coast, Inc., must use the funds for the recovery, diversification, and enhancement of the
following eight counties disproportionately affected by the oil spill: Bay, Escambia, Gulf, Franklin,
Okaloosa, Santa Rosa, Wakulla, and Walton.32
The awards for projects or programs within the boundaries of each disproportionately affected county
are based on the following minimum allocations:
At least 40 percent of the moneys transferred to Triumph Gulf Coast, Inc., before July, 2017,
must be allocated equally among the eight disproportionately affected counties based on a
minimum allocation of at least 5 percent per county.
For each subsequent transfer of funds to Triumph Gulf Coast, Inc., at least 32 percent of the
moneys must be allocated equally among the eight disproportionately affected counties based
on a minimum allocation of at least 4 percent per county.33
Awards may be provided for:
Ad valorem tax rate reduction within disproportionately affected counties;
Local match requirements for Rural Infrastructure Fund projects in the disproportionately
affected counties;
Public infrastructure projects for construction, expansion, or maintenance which are shown to
enhance economic recovery, diversification, and enhancement of the disproportionately affected
counties;
Grants to local governments in the disproportionately affected counties to establish and
maintain equipment and trained personnel for local action plans of response to respond to
disasters, such as plans created for the Coastal Impacts Assistance Program;
Grants to support programs that prepare students for future occupations and careers at K-20
institutions that have campuses in the disproportionately affected counties. Eligible programs
include those that increase students’ technology skills and knowledge; encourage industry
certifications; provide rigorous, alternative pathways for students to meet high school graduation
requirements; strengthen career readiness initiatives; fund high-demand programs of emphasis
at the bachelor’s and master’s level designated by the Board of Governors; and, similar to or the
same as talent retention programs created by the Chancellor of the State University System and
the Commission of Education, encourage students with interest or aptitude for science,
technology, engineering, mathematics, and medical disciplines to pursue postsecondary
education at a state university or a Florida College System institution within the
disproportionately affected counties;
Grants to support programs that provide participants in the disproportionately affected counties
with transferable, sustainable workforce skills that are not confined to a single employer; and
Grants to Visit Florida for the purpose of advertising and promoting tourism and Fresh From
Florida, and grants to promote workforce and infrastructure, on behalf of all of the
disproportionately affected counties.34
Fiscally Constrained Counties
29 Chapter 2013-39, s. 51, Laws of Fla.
30 Section 288.8013, F.S., establishes the corporation.
31 Following the oil spill, the State of Florida sued B.P. for the economic damages it sustained; entered into a settlement
agreement whereby the State will receive a total of $2 Billion dollars over an 18-year period. Attorney General Pam Bondi
received BP’s initial settlement payment of $400 million in July of 2016, and the funds were placed into the state General
Revenue Fund. Thirteen subsequent settlement payments are scheduled to be paid annually to the state in the amount of
$106,666,666 from 2019 until 2033. See s. 288.8013(2), F.S.
32 Triumph Gulf Coast, Inc., Home, available at https://www.myfloridatriumph.com/ (last visited Apr. 7, 2023).
33 S. 288.8013(2)(b), F.S.
34 S. 288.8017(1), F.S.
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Fiscally Constrained Counties are counties entirely within a rural area of opportunity or where a 1 mill
levy would raise no more than $5 million in annual tax revenue. 35 A rural area of opportunity is a rural
community36 or region that has been adversely affected by an extraordinary economic event, severe
distress, natural disaster, or that presents a unique economic development opportunity of regional
impact, as designated by the Governor.37 Florida’s fiscally constrained counties are: Baker, Bradford,
Calhoun, Columbia, Desoto, Dixie, Franklin, Gadsden, Gilchrist, Glades, Gulf, Hamilton, Hardee,
Hendry, Highlands, Holmes, Jackson, Jefferson, Lafayette, Levy, Liberty, Madison, Okeechobee,
Putnam, Suwannee, Taylor, Union, Wakulla, and Washington.38
Everglades Restoration Agricultural Community Employment Training Program
The Everglades Restoration Agricultural Community Employment Training Program (Everglades
Training Program) requires DEO, in cooperation with CareerSource Florida, Inc., to use funds to
provide grants to stimulate and support training and employment programs that seek to match persons
who complete such training programs to nonagricultural employment opportunities in areas of high
agricultural unemployment. The program also provides other training, educational, and information
services necessary to stimulate the creation of jobs in the areas of high agricultural unemployment. 39
Funds may be used for grants for tuition for public or private technical or vocational programs and
matching grants to employers to conduct employer-based training programs, or for the purchase of
equipment to be used for training purposes, the hiring of instructors, or any other purpose directly
associated with the program.40
DEO is prohibited from awarding a grant to any given training program which exceeds 50 percent of the
total cost of the program, unless the training program is located within a RAO, in which case the grant
may exceed 50 percent of the total cost of the program and up to100 percent.41 Matching contributions
may include in-kind services, including, but not limited to, the provision of training instructors,
equipment, and training facilities.
DEO may grant up to 100 percent of the tuition for a participant who resides, and has resided for at
least three of the last five immediately preceding years, within the Everglades Agricultural Area (EAA) 42
and in counties that provide for water storage and dispersed water storage that are located in RAOs. 43
Programs established in the EAA must include opportunities to obtain the qualifications and skills
necessary for jobs related to federal and state restoration projects, the Airglades Airport in Hendry
County, or an inland port in Palm Beach County, or other industries with verifiable, demonstrated
interest in operating within the EAA, as well as in counties that provide for water storage and dispersed
water storage that are located in RAOs.44
35 S. 218.67(1), F.S.
36 A “rural community” as the term relates to counties means a county with a population of 75,000 or fewer, or a county
with a population of 125,000 or fewer which is contiguous to a county with a population of 75,000 or fewer. See s.
288.0656(1)(e), F.S.
37 S. 288.0656(1)(d), F.S.
38 Florida Department of Revenue, Fiscally Constrained Counties,
https://floridarevenue.com/property/Documents/fcco081210.pdf (last visited Apr. 7, 2023).
39 S. 446.71(1), F.S.
40 S. 446.71(3), F.S.
41 S. 446.71(4), F.S.
42 The Everglades Agricultural Area is an approximately 1,160 square-mile area south of Lake Okeechobee of productive
agricultural land. See s. 373.4592(15), F.S., for the property description. See also Lake Okeechobee Business Alliance,
The Everglades Agricultural Area, http://www.lakeoalliance.org/everglades-agricultural-
area#:~:text=The%20Everglades%20E verglades%20Agricultural%20Area, vibrant%20and% 20sustianable%20local%20ec
onomies. (last visited March 24, 2023).
43 S. 446.71(6), F.S.
44 S. 446.71(7), F.S.
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In 2022, the Legislature awarded more than $700,000 to the program. 45
Effect of the Bill
Related to the Regional Rural Development Grants Program, the bill:
Removes the match requirements.
Removes the requirement for local governments and private businesses to make financial or in-
kind commitments to the regional organization.
Related to the Rural Infrastructure Fund, the bill:
Allows DEO to award grants for up to 75 percent of the total infrastructure project cost, an
increase from 50 percent.
Allows DEO to award grants for up to 100 percent of the total infrastructure project cost for a
project located in a rural community or a rural area of opportunity, if the county is also fiscally
constrained.
Removes the requirement related to infrastructure feasibility studies and other infrastructure
planning activities that grants awarded be limited to 30 percent of the total project cost.
Related to the Florida Development Finance Corporation, the bill:
Removes the repeal of the corporation in current law.
Provides that after July 1, 2023, the corporation may not establish any new residential PACE
agreements.
Related to Triumph Gulf Coast, Inc., the bill:
Specifies that awards for public infrastructure projects may include projects for workforce
housing. The recipient of an award for workforce housing must be a local government in a
disproportionately affected county.
Defines workforce housing, for purposes of the bill, to mean housing that is affordable46 to
natural persons or families whose total annual household income does not exceed 80 percent of
the median annual adjusted gross income47 for households within the metropolitan statistical
area or, if not within a metropolitan statistical area, within the county in which the person or
family resides.
45 Department of Economic Opportunity, DEO Press Releases, Governor DeSantis Awards More Than $700,000 for
Work force Training in Everglades Agricultural Communities, https://www.floridajobs.org/news-center/ DEO-
Press/2022/04/18/governor-desantis-awards-more-than-$700-000-for-workforce-training-in-everglades-agricultural-
communities (last visited March 24, 2023).
46 Under the bill, “Affordable” means that monthly rents or monthly mortgage payments including taxes, insurance, and
utilities do not exceed 30 percent of that amount which represents the percentage of the median adjusted gross annual
income for the households.
47 The bill states that “Adjusted gross income” means all wages, assets, regular cash or noncash contributions or gifts
from persons outside the household, and such other resources and benefits as may be determined to be income by the
United States Department of Housing and Urban Development, adjusted for family size, less deductions allowable under
s. 62 of the Internal Revenue Code.
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Related to the Everglades Restoration Agricultural Community Employment Training Program, the bill:
Specifies definitions and changes the phrase “areas of high agricultural unemployment” to
“Everglades Agricultural Area and rural areas of opportunity.”
Provides legislative findings to include rural areas of opportunity that provide water storage and
dispersed water storage for Everglades restoration efforts.
Requires that for the first six months of each fiscal year, DEO has to set aside up to 50 percent
of the Legislature’s appropriation to fund employer-based training programs; undisbursed funds
after six months may be used for tuition.
Requires DEO to prioritize awarding employer-based grants to training programs located in rural
areas of opportunity in counties that provide for water storage and dispersed water storage as
part of the Everglades restoration efforts.
Allows DEO to use a national accreditation or licensure program by the Commission for
Independent Education to meet certain requirements.
The bill provides that in the event of a conflict with any of the provisions of House Bill 5, 2023 regular
session, or similar legislation, the provisions of House Bill 5, 2023 regular session, or similar legislation,
will control.
The bill provides an effective date of July 1, 2023.
B. SECTION DIRECTORY:
Section 1: Amends s. 288.018, F.S., relating to the Regional Rural Development Grants Program.
Section 2: Amends s. 288.0655, F.S., relating to the Rural Infrastructure Fund.
Section 3: Amends s. 288.9604, F.S., relating to the Florida Development Finance Corporation.
Section 4: Amends s. 288.8017, F.S., relating to Triumph Gulf Coast, Inc.
Section 5: Amends s. 446.71, F.S., relating to the Everglades Restoration Agricultural Community
Employment Training Program.
Section 6: Provides implementation directions based on certain conflicts.
Section 7: 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 could increase private sector investment in rural areas.
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.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On March 30, 2023, the Regulatory Reform & Economic Development Subcommittee adopted a proposed
committee substitute (PCS) and reported the bill favorably as a committee substitute. The PCS differs from
the original bill by removing provisions of the bill relating to:
The appointment of DEO division directors;
Reporting on certain military installations;
The Florida Defense Support Task Force;
Certain loans made with funds administered by DEO;
The Florida Development Finance Corporation; and
The Space Florida board of directors;
On April 12, 2023, the Ways & Means Committee adopted a PCS and reported the bill favorably as a
committee substitute. The PCS differs from CS/HB 1209 by adding provisions of the bill related to:
The Florida Development Finance Corporation; and
Triumph Gulf Coast, Inc.
This analysis is drafted to the committee substitute as passed by the Ways & Means Committee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/CS/HB 1209 2023
1 A bill to be entitled
2 An act relating to economic development; amending s.
3 288.018, F.S.; removing the requirement that grants
4 received by a regional economic development
5 organization under the Regional Rural Development
6 Grants Program must be matched in a certain manner;
7 removing certain demonstration requirements of program
8 applicants; amending s. 288.0655, F.S.; revising the
9 percentage of certain project costs for which the
10 department may award certain grants; revising
11 limitations on the use of certain grants awarded by
12 the department; amending s. 288.9604, F.S.; providing
13 a date after which the Florida Development Finance
14 Corporation may not enter into specified agreements;
15 removing the scheduled repeal of the corporation;
16 amending s. 288.8017, F.S.; revising the purposes for
17 which certain awards may be provided; amending s.
18 446.71, F.S.; revising the areas in which the
19 department may provide grants through the Everglades
20 Restoration Agricultural Community Employment Training
21 Program; authorizing the use of certain grant funds
22 for certain purposes; requiring the department to set
23 aside a certain percentage of funds for a certain
24 purpose; prohibiting the department from awarding
25 employer-based grants in excess of a certain amount;
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26 requiring the department to prioritize awarding
27 employer-based grants to certain training programs;
28 providing that certain accreditation or licensure
29 meets a certain qualification requirement; revising
30 requirements for the location in which a training
31 program participant must reside to receive a certain
32 grant from the department; revising the requirements
33 for employer-based training programs established in
34 the Everglades Agricultural Area; providing that
35 certain provisions shall control in the event of
36 certain conflicts; providing an effective date.
37
38 Be It Enacted by the Legislature of the State of Florida:
39
40 Section 1. Paragraphs (d) and (e) of subsection (2) of
41 section 288.018, Florida Statutes, are redesignated as
42 paragraphs (b) and (c), respectively, and paragraphs (b), (c),
43 and (d) of subsection (1) and present paragraphs (b) and (c) of
44 subsection (2) of that section are amended to read:
45 288.018 Regional Rural Development Grants Program. —
46 (1)
47 (b) The department shall establish a matching grant
48 program to provide funding to regional economic development
49 organizations for the purpose of building the professional
50 capacity of those organizations. Building the professional
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51 capacity of a regional economic development organization
52 includes hiring professional staff to develop, deliver, and
53 provide needed economic development professional services,
54 including technical assistance, education and leadership
55 development, marketing, and project recruitment. Matching Grants
56 may also be used by a regional economic development organization
57 to provide technical assistance to local governments, local
58 economic development organizations, and existing and prospective
59 businesses.
60 (c) A regional economic development organization may apply
61 annually to the department for a matching grant. The department
62 is authorized to approve, on an annual basis, grants to such
63 regional economic development organizations. The maximum amount
64 an organization may receive in any year will be $50,000, or
65 $250,000 for any three regional economic development
66 organizations that serve an entire region of a rural area of
67 opportunity designated pursuant to s. 288.0656(7) if they are
68 recognized by the department as serving such a region.
69 (d) Grant funds received by a regional economic
70 development organization must be matched each year by nonstate
71 resources in an amount equal to 25 percent of the state
72 contribution.
73 (2) In approving the participants, the department shall
74 consider the demonstrated need of the applicant for assistance
75 and require the following:
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76 (b) Demonstration that each unit of local government has
77 made a financial or in-kind commitment to the regional
78 organization.
79 (c) Demonstration that the private sector has made
80 financial or in-kind commitments to the regional organization.
81 Section 2. Paragraphs (b) and (c) of subsection (2) of
82 section 288.0655, Florida Statutes, are amended to read:
83 288.0655 Rural Infrastructure Fund.—
84 (2)
85 (b) To facilitate access of rural communities and rural
86 areas of opportunity as defined by the Rural Economic
87 Development Initiative to infrastructure funding programs of the
88 Federal Government, such as those offered by the United States
89 Department of Agriculture and the United States Department of
90 Commerce, and state programs, including those offered by Rural
91 Economic Development Initiative agencies, and to facilitate
92 local government or private infrastructure funding efforts, the
93 department may award grants for up to 75 50 percent of the total
94 infrastructure project cost, or up to 100 percent of the total
95 infrastructure project cost for a project located in a rural
96 community or a rural area of opportunity, as those terms are
97 defined in s. 288.0656(2), which is also located in a fiscally
98 constrained county as described in s. 218.67(1). Eligible
99 projects must be related to specific job-creation or job-
100 retention opportunities. Eligible projects may also include
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101 improving any inadequate infrastructure that has resulted in
102 regulatory action that prohibits economic or community growth,
103 reducing the costs to community users of proposed infrastructur e
104 improvements that exceed such costs in comparable communities,
105 and improving access to and the availability of broadband
106 Internet service. Eligible uses of funds shall include
107 improvements to public infrastructure for industrial or
108 commercial sites, upgrades to or development of public tourism
109 infrastructure, and improvements to broadband Internet service
110 and access in unserved or underserved rural communities.
111 Improvements to broadband Internet service and access must be
112 conducted through a partnership or partnerships with one or more
113 dealers, as defined in s. 202.11(2), and the partnership or
114 partnerships must be established through a competitive selection
115 process that is publicly noticed. Authorized infrastructure may
116 include the following public or public-private partnership
117 facilities: storm water systems; telecommunications facilities;
118 broadband facilities; roads or other remedies to transportation
119 impediments; nature-based tourism facilities; or other physical
120 requirements necessary to facilitate tourism, trade, and
121 economic development activities in the community. Authorized
122 infrastructure may also include publicly or privately owned
123 self-powered nature-based tourism facilities, publicly owned
124 telecommunications facilities, and broadband facilities, and
125 additions to the distribution facilities of the existing natural
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126 gas utility as defined in s. 366.04(3)(c), the existing electric
127 utility as defined in s. 366.02, or the existing water or
128 wastewater utility as defined in s. 367.021(12), or any other
129 existing water or wastewater facility, which owns a gas or
130 electric distribution system or a water or wastewater system in
131 this state where:
132 1. A contribution-in-aid of construction is required to
133 serve public or public-private partnership facilities under the
134 tariffs of any natural gas, electric, water, or wastewater
135 utility as defined herein; and
136 2. Such utilities as defined herein are willing and able
137 to provide such service.
138 (c) To facilitate timely response and induce the location
139 or expansion of specific job creating opportunities, The
140 department may award grants for infrastructure feasibility
141 studies, design and engineering activities, or other
142 infrastructure planning and preparation activities. Authorized
143 grants shall be up to $50,000 for an employment project with a
144 business committed to create at least 100 jobs; up to $150,000
145 for an employment project with a business committed to create at
146 least 300 jobs; and up to $300,000 for a project in a rural area
147 of opportunity. Grants awarded under this paragraph may be used
148 in conjunction with grants awarded under paragraph (b), provided
149 that the total amount of both grants does not exceed 30 percent
150 of the total project cost. In evaluating applications under this
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151 paragraph, the department shall consider the extent to which the
152 application seeks to minimize administrative and consultant
153 expenses.
154 Section 3. Subsection (5) of section 288.9604, Florida
155 Statutes, is amended to read:
156 288.9604 Creation of the corporation.—
157 (5) Effective July 1, 2023, the corporation may not
158 establish new residential Property Assessed Clean Energy
159 agreements. The corporation may only service existing agreements
160 until the completion of the original terms of such agreements
161 This section is repealed July 1, 2023, and July 1 of every
162 fourth year thereafter, unless reviewed and saved from repeal by
163 the Legislature.
164 Section 4. Subsection (1) of section 288.8017, Florida
165 Statutes, is amended to read:
166 288.8017 Awards.—
167 (1) Triumph Gulf Coast, Inc., shall make awards from
168 available funds to projects or programs that meet the priorities
169 for economic recovery, diversification, and enhancement of the
170 disproportionately affected counties. Awards may be provided for
171 any of the following:
172 (a) Ad valorem tax rate reduction within
173 disproportionately affected counties.;
174 (b) Local match requirements of s. 288.0655 for projects
175 in the disproportionately affected counties.;
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CS/CS/HB 1209 2023
176 (c) Public infrastructure projects for construction,
177 expansion, or maintenance which are shown to enhance economic
178 recovery, diversification, and enhancement of the
179 disproportionately affected counties. Such public infrastructure
180 projects include projects for workforce housing, which means
181 housing that is affordable to natural persons or families whose
182 total annual household income does not exceed 80 percent of the
183 median annual adjusted gross income for households within the
184 metropolitan statistical area or, if not within a metropolitan
185 statistical area, within the county in which the person or
186 family resides. The recipient of an award for workforce housing
187 construction, expansion, or maintenance must be a local
188 government in a disproportionately affected county. For purposes
189 of this paragraph, the term:
190 1. "Adjusted gross income" means all wages, assets,
191 regular cash or noncash contributions or gifts from persons
192 outside the household, and such other resources and benefits as
193 may be determined to be income by the United States Department
194 of Housing and Urban Development, adjusted for family size, less
195 deductions allowable under s. 62 of the Internal Revenue Code.
196 2. "Affordable" means that monthly rents or monthly
197 mortgage payments including taxes, insurance, and utilities do
198 not exceed 30 percent of that amount which represents the
199 percentage of the median adjusted gross annual income for the
200 households.;
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201 (d) Grants to local governments in the disproportionately
202 affected counties to establish and maintain equipment and
203 trained personnel for local action plans of response to respond
204 to disasters, such as plans created for the Coastal Impacts
205 Assistance Program.;
206 (e) Grants to support programs that prepare students for
207 future occupations and careers at K-20 institutions that have
208 campuses in the disproportionately affected counties. Eligible
209 programs include those that increase students' technology skills
210 and knowledge; encourage industry certifications; provide
211 rigorous, alternative pathways for students to meet high school
212 graduation requirements; strengthen career readiness
213 initiatives; fund high-demand programs of emphasis at the
214 bachelor's and master's level designated by the Board of
215 Governors; and, similar to or the same as talent retention
216 programs created by the Chancellor of the State University
217 System and the Commission of Education, encourage stude nts with
218 interest or aptitude for science, technology, engineering,
219 mathematics, and medical disciplines to pursue postsecondary
220 education at a state university or a Florida College System
221 institution within the disproportionately affected counties.;
222 (f) Grants to support programs that provide participants
223 in the disproportionately affected counties with transferable,
224 sustainable workforce skills that are not confined to a single
225 employer.; and
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226 (g) Grants to the tourism entity created under s. 288.1226
227 for the purpose of advertising and promoting tourism and Fresh
228 From Florida, and grants to promote workforce and
229 infrastructure, on behalf of all of the disproportionately
230 affected counties.
231 Section 5. Section 446.71, Florida Statutes, is amended to
232 read:
233 446.71 Everglades Restoration Agricultural Community
234 Employment Training Program.—
235 (1) The Department of Economic Opportunity, in cooperation
236 with the state board as defined in s. 445.002, shall establish
237 the Everglades Restoration Agricultural Community Employment
238 Training Program within the Department of Economic Opportunity.
239 The Department of Economic Opportunity shall use funds
240 appropriated to the program by the Legislature to provide grants
241 to stimulate and support training and employment programs that
242 seek to match persons who complete such training programs to
243 nonagricultural employment opportunities in the Everglades
244 Agricultural Area as defined in s. 373.4592(2) and rural areas
245 of opportunity as defined in s. 288.0656(2) areas of high
246 agricultural unemployment, and to provide other training,
247 educational, and information services necessary to stimulate the
248 creation of jobs in the Everglades Agricultural Area and rural
249 areas of opportunity areas of high agricultural unemployment. In
250 determining whether to provide funds to a particular program,
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251 the Department of Economic Opportunity shall consider the
252 location of the program in proximity to the program's intended
253 participants.
254 (2) The Legislature supports projects that improve the
255 economy in the Everglades Agricultural Area and in rural areas
256 of opportunity in counties that provide for water storage and
257 dispersed water storage as part of Everglades restoration
258 efforts. In recognition of the employment opportunities and
259 economic development generated by new and expanding industries
260 in such areas the area, such as the Airglades Airport in Hendry
261 County and the development of an inland port in Palm Beach
262 County, the Legislature finds that training the citizens of the
263 state to fill the needs of these industries significantly
264 enhances the economic viability of such areas the region.
265 (3) Funds may be used for grants for tuition for public or
266 private technical or vocational programs and matching grants to
267 employers to conduct employer-based training programs. Grant
268 funds provided to employer-based training programs may be used,
269 or for the purchase of equipment to be used for training
270 purposes, the hiring of instructors, or any other purpose
271 directly associated with the program. For the first 6 months of
272 each fiscal year, the Department of Economic Opportunity shall
273 set aside up to 50 percent of the amount appropriated by the
274 Legislature to fund employer-based training programs. Any
275 unencumbered funds remaining undisbursed from the set-aside
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CS/CS/HB 1209 2023
276 amount at the end of the 6-month period may be used to provide
277 funding for tuition. The allocation of funds must be included in
278 the notice of grant opportunities.
279 (4) The Department of Economic Opportunity may not award
280 an employer-based a grant to any given training program which
281 exceeds 50 percent of the total cost of the program, unless the
282 training program is located within a rural area of opportunity,
283 in which case the grant may exceed 50 percent of the total cost
284 of the program and up to 100 percent. Matching contributions may
285 include in-kind services, including, but not limited to, the
286 provision of training instructors, equipment, and training
287 facilities. The department shall prioritize awarding employer-
288 based grants to training programs located in rural areas of
289 opportunity in counties that provide for water storage and
290 dispersed water storage as part of Everglades restoration
291 efforts.
292 (5) Before granting a request for funds made in accordance
293 with this section, the Department of Economic Opportunity shall
294 enter into a grant agreement with the requester of funds and the
295 training institution receiving funding through the program. Such
296 agreement must include all of the following information:
297 (a) An identification of the personnel necessary to
298 conduct the instructional program, the qualifications of such
299 personnel, and the respective responsibilities of the parties
300 for paying costs associated with the employment of such
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301 personnel. National accreditation or licensure of an
302 instructional program by the Commission for Independent
303 Education is sufficient to meet the qualifications requirement.
304 (b) An identification of the estimated length of the
305 instructional program.
306 (c) An identification of all direct, training-related
307 costs, including tuition and fees, curriculum development, books
308 and classroom materials, and overhead or indirect costs.
309 (d) An identification of special program requirements that
310 are not otherwise addressed in the agreement.
311 (6) The Department of Economic Opportunity may grant up to
312 100 percent of the tuition for a training program participant
313 who currently resides, and has resided for at least 3 of the 5
314 immediately preceding years, in within the Everglades
315 Agricultural Area or as described in a rural area of opportunity
316 s. 373.4592 and in a county counties that provides provide for
317 water storage and dispersed water storage as part of Everglades
318 restoration efforts that are located in rural areas of
319 opportunity as described in s. 288.0656.
320 (7) Employer-based training programs established in the
321 Everglades Agricultural Area must include opportunities to
322 obtain the qualifications and skills necessary for jobs related
323 to federal and state restoration projects, the Airglades Air port
324 in Hendry County, an inland port in Palm Beach County, or other
325 industries with verifiable, demonstrated interest in operating
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326 in within the Everglades Agricultural Area or in rural areas of
327 opportunity and in counties that provide for water storage and
328 dispersed water storage as part of Everglades restoration
329 efforts that are located in rural areas of opportunity as
330 described in s. 288.0656.
331 (8) The Department of Economic Opportunity shall adopt
332 rules to implement this section.
333 Section 6. In the event of a conflict of any provision of
334 this act with the provisions of House Bill 5, 2023 Regular
335 Session, or similar legislation, the provisions of House Bill 5,
336 2023 Regular Session, or similar legislation, shall control to
337 the extent of such conflict.
338 Section 7. This act shall take effect July 1, 2023.
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Commerce Committee
CS/CS/HB 1209 by Rep. Shoaf
Economic Development
AMENDMENT SUMMARY
April 17, 2023
Amendment 1 by Rep. Shoaf (line 39):
• Requires agency agreements that provide state or federal financial assistance to
a county or municipality which is a rural community or rural area of opportunity to
include a provision allowing for the payment of certain invoices for verified
performance.
Amendment 2 by Rep. Shoaf (lines 176-332):
• Clarifies that awards by Triumph Gulf Coast, Inc., for public infrastructure
projects may include support for workforce housing properties owned by a local
government in a disproportionately affected county.
• Redefines the term “workforce housing” to mean rented or leased housing for
specified individuals.
• Clarifies the areas that the Department of Economic Opportunity must prioritize
when awarding funds to programs as part of the Everglades Restoration
Agricultural Community Employment Training Program.
• Provides definitions for “employer-based training program,” “Everglades
Agricultural Area,” and “institution-based training program.”
• Revises the amount of time a resident must reside in the area to receive a grant
for tuition to a training program under the Everglades Restoration Agricultural
Community Employment Training Program.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 1209 (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: Commerce Committee
2 Representative Shoaf offered the following:
3
4 Amendment (with title amendment)
5 Between lines 39 and 40, insert:
6 Section 1. Paragraph (h) is added to subsection (1) of
7 section 215.971, Florida Statutes, to read:
8 215.971 Agreements funded with federal or state
9 assistance.—
10 (1) An agency agreement that provides state financial
11 assistance to a recipient or subrecipient, as those terms are
12 defined in s. 215.97, or that provides federal financial
13 assistance to a subrecipient, as defined by applicable United
14 States Office of Management and Budget circulars, must include
15 all of the following:
16 (h) If the agency agreement provides federal or state
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 1209 (2023)
Amendment No. 1
17 financial assistance to a county or municipality that is a rural
18 community or rural area of opportunity, as those terms are
19 defined in s. 288.0656(2), such agreement must include a
20 provision that allows the agency to provide for the payment of
21 invoices to the county or municipality for verified and eligible
22 performance that has been completed in accordance with the terms
23 and conditions set forth in the agreement. This provision is
24 included to alleviate the financial hardships that certain rural
25 counties and municipalities encounter when administering
26 agreements and shall be utilized by the agency based on
27 demonstrated financial hardship. This paragraph may not be
28 construed to alter or limit any other provisions of federal or
29 state law, rule, or other regulation.
30
31
32 -----------------------------------------------------
33 T I T L E A M E N D M E N T
34 Remove line 3 and insert:
35 215.971, F.S.; requiring certain agency agreements to include a
36 provision authorizing the agency to provide for the payment of
37 specified invoices; providing construction; amending s. 288.018,
38 F.S.; removing the requirement that grants
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 1209 (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: Commerce Committee
2 Representative Shoaf offered the following:
3
4 Amendment
5 Remove lines 176-332 and insert:
6 (c) Public infrastructure projects for construction,
7 expansion, or maintenance which are shown to enhance economic
8 recovery, diversification, and enhancement of the
9 disproportionately affected counties. Such public infrastructure
10 projects may include public infrastructure support for
11 construction or expansion of workforce housing properties owned
12 by a local government located in a disproportionately affected
13 county. For the purposes of this paragraph, the term:
14 1. “Infrastructure support” means site improvements.
15 2. “Workforce housing” means rented or leased housing for
16 residents of the eight disproportionately affected counties who
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 1209 (2023)
Amendment No. 2
17 are employed full-time or who are active duty servicemembers of
18 a branch of the United States Armed Forces. Local governments ,
19 or their agents, may rent or lease housing to persons or
20 families who have household incomes that do not exceed 150
21 percent of the local median income. Renters or lessors are
22 required to provide documentation of full-time employment, or
23 full-time status for self-employed individuals, of 35 hours or
24 more per week.
25 (d) Grants to local governments in the disproportionately
26 affected counties to establish and maintain equipment and
27 trained personnel for local action plans of response to respond
28 to disasters, such as plans created for the Coastal Impacts
29 Assistance Program.;
30 (e) Grants to support programs that prepare students for
31 future occupations and careers at K-20 institutions that have
32 campuses in the disproportionately affected counties. Eligible
33 programs include those that increase students' technology skills
34 and knowledge; encourage industry certifications; provide
35 rigorous, alternative pathways for students to meet high school
36 graduation requirements; strengthen career readiness
37 initiatives; fund high-demand programs of emphasis at the
38 bachelor's and master's level designated by the Board of
39 Governors; and, similar to or the same as talent retention
40 programs created by the Chancellor of the State University
41 System and the Commission of Education, encourage s tudents with
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 1209 (2023)
Amendment No. 2
42 interest or aptitude for science, technology, engineering,
43 mathematics, and medical disciplines to pursue postsecondary
44 education at a state university or a Florida College System
45 institution within the disproportionately affected counties.;
46 (f) Grants to support programs that provide participants
47 in the disproportionately affected counties with transferable,
48 sustainable workforce skills that are not confined to a single
49 employer.; and
50 (g) Grants to the tourism entity created under s. 288.1 226
51 for the purpose of advertising and promoting tourism and Fresh
52 From Florida, and grants to promote workforce and
53 infrastructure, on behalf of all of the disproportionately
54 affected counties.
55 Section 5. Section 446.71, Florida Statutes, is amended to
56 read:
57 446.71 Everglades Restoration Agricultural Community
58 Employment Training Program.—
59 (1) The Department of Economic Opportunity, in cooperation
60 with the state board as defined in s. 445.002, shall establish
61 the Everglades Restoration Agricultural Community Employment
62 Training Program within the Department of Economic Opportunity.
63 The Department of Economic Opportunity shall use funds
64 appropriated to the program by the Legislature to provide grants
65 to stimulate and support training and employment programs that
66 seek to match persons who complete such training programs to
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 1209 (2023)
Amendment No. 2
67 nonagricultural employment opportunities in the Everglades
68 Agricultural Area as defined in s. 373.4592(2) and rural areas
69 of opportunity as defined in s. 288.0656(2) areas of high
70 agricultural unemployment, and to provide other training,
71 educational, and information services necessary to stimulate the
72 creation of jobs in the Everglades Agricultural Area and rural
73 areas of opportunity areas of high agricultural unemployment. In
74 determining whether to provide funds to a particular program,
75 the Department of Economic Opportunity shall consider the
76 location of the program in proximity to the program's intended
77 participants. The department shall prioritize awarding employer -
78 based grants to training programs located in rural areas of
79 opportunity in counties with a boundary that is within 75 miles
80 of the Everglades Agricultural Area.
81 (2) The Legislature supports projects that improve the
82 economy in the Everglades Agricultural Area and in rural areas
83 of opportunity in counties that provide for water storage and
84 dispersed water storage as part of Everglades restoration
85 efforts. In recognition of the employment opportunities and
86 economic development generated by new and expanding industries
87 in such areas the area, such as the Airglades Airport in Hendry
88 County and the development of an inland port in Palm Beach
89 County, the Legislature finds that training the citizens of the
90 state to fill the needs of these industries significantly
91 enhances the economic viability of such areas the region.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 1209 (2023)
Amendment No. 2
92 (3) As used in this section, the term:
93 (a) "Department" means the Department of Economic
94 Opportunity.
95 (b) "Employer-based training program" means a program
96 established by, or to be established by, a business in this
97 state that provides training for in-demand, nonagricultural
98 occupations for its employees.
99 (c) "Everglades Agricultural Area" has the same meaning as
100 in s. 373.4592(15).
101 (d) "Institution-based training program" means a
102 certificate program or other program of study provided by a
103 public or private university, college, or technical or
104 vocational training institution that provides training for in -
105 demand, nonagricultural occupations.
106 (e) "Program" means the Everglades Restoration
107 Agricultural Community Employment Training Program.
108 (4)(3) Funds may be used for grants for tuition for public
109 or private technical or vocational programs and matching grants
110 to employers to conduct employer-based training programs. Grant
111 funds provided to employer-based training programs may be used,
112 or for the purchase of equipment to be used for training
113 purposes, the hiring of instructors, or any other purpose
114 directly associated with the program. For the first 6 months of
115 each fiscal year, the Department of Economic Opportunity shall
116 set aside up to 50 percent of the amount appropriated by the
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 1209 (2023)
Amendment No. 2
117 Legislature to fund employer-based training programs. Any
118 unencumbered funds remaining undisbursed from the set -aside
119 amount at the end of the 6-month period may be used to provide
120 funding for tuition. The allocation of funds must be included in
121 the notice of grant opportunities.
122 (5)(4) The Department of Economic Opportunity may not
123 award an employer-based a grant to any given training program
124 which exceeds 50 percent of the total cost of the program,
125 unless the training program is located within a rural area of
126 opportunity, in which case the grant may exceed 50 percent of
127 the total cost of the program and up to 100 percent. Matching
128 contributions may include in-kind services, including, but not
129 limited to, the provision of training instructors, equipment,
130 and training facilities.
131 (6)(5) Before granting a request for funds made in
132 accordance with this section, the Department of Economic
133 Opportunity shall enter into a grant agreement with the
134 requester of funds and the training institution receiving
135 funding through the program. Such agreement must include all of
136 the following information:
137 (a) An identification of the personnel necessary to
138 conduct the instructional program, the qualifications of such
139 personnel, and the respective responsibilities of the parties
140 for paying costs associated with the employment of such
141 personnel. National accreditation or licensure of an
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 1209 (2023)
Amendment No. 2
142 instructional program by the Commission for Independent
143 Education is sufficient to meet the qualifications requirement.
144 (b) An identification of the estimated length of the
145 instructional program.
146 (c) An identification of all direct, training-related
147 costs, including tuition and fees, curriculum development, books
148 and classroom materials, and overhead or indirect costs.
149 (d) An identification of special program requirements that
150 are not otherwise addressed in the agreement.
151 (6) The Department of Economic Opportunity may grant up to
152 100 percent of the tuition for a training program participant
153 who currently resides, and has resided for the preceding 12
154 months at least 3 of the 5 immediately preceding years, in
155 within the Everglades Agricultural Area or as described in a
156 rural area of opportunity s. 373.4592 and in a county counties
157 that provides provide for water storage and dispersed water
158 storage as part of Everglades restoration efforts that are
159 located in rural areas of opportunity as described in s.
160 288.0656.
161 (8)(7) Employer-based training programs established in the
162 Everglades Agricultural Area must include opportunities to
163 obtain the qualifications and skills necessary for jobs related
164 to federal and state restoration projects, the Airglades Airport
165 in Hendry County, an inland port in Palm Beach County, or other
166 industries with verifiable, demonstrated interest in operating
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/CS/HB 1209 (2023)
Amendment No. 2
167 in within the Everglades Agricultural Area or in rural areas of
168 opportunity and in counties that provide for water storage and
169 dispersed water storage as part of Everglades restoration
170 efforts that are located in rural areas of opportunity as
171 described in s. 288.0656.
172 (9)(8) The Department of Economic Opportunity shall adopt
173 rules to implement this section.
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CS/HB 1215
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 1215 Pub. Rec./Inspectors and Investigators/DACS
SPONSOR(S): Ethics, Elections & Open Government Subcommittee, Maggard
TIED BILLS: IDEN./SIM. BILLS: SB 1166
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform & Economic Development 14 Y, 0 N Mortellaro Anstead
Subcommittee
2) Ethics, Elections & Open Government 18 Y, 0 N, As CS Poreda Toliver
Subcommittee
3) Commerce Committee Mortellaro Anstead
SUMMARY ANALYSIS
The Office of Agricultural Law Enforcement (OALE) is located in the Department of Agriculture and Consumer
Services (DACS) and enforces laws governing businesses regulated by DACS. The goal of OALE is to protect
consumers from unfair and deceptive trade practices, protect Florida’s agriculture industry from theft and other
crimes, and safeguard the wholesomeness of food and other consumer products.
The bill provides a public record exemption for the following information of former and current DACS inspectors
and investigators as well as their spouses and children:
Home addresses;
Telephone numbers;
Dates of birth; and
Photographs.
The bill also protects the following information regarding the spouses and children of current and former DACS
inspectors and investigators:
Places of employment; and
The names and locations of schools and day care facilities attended.
The exemption is subject to the Open Government Sunset Review Act and will be repealed on October 2,
2028, unless reviewed and saved from repeal through reenactment by the Legislature.
The bill takes effect July 1, 2023.
Article I, s. 24(c) of the Florida Constitution requires a two-thirds vote of the members present and
voting for final passage of a newly created or expanded public record or public meeting exemption.
The bill creates a public record exemption; thus, it requires a two-thirds vote for final passage.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h1215d.COM
DATE: 4/15/2023
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Public Records
Article I, section 24(a) of the Florida Constitution sets forth the state’s public policy regarding access to
government records. This section guarantees every person the right to inspect or copy any public
record from the legislative, executive, and judicial branches of government. 1 The Legislature, however,
may provide by general law for exemption from public record requirements provided the exemption
passes by two-thirds vote of each chamber, states with specificity the public necessity justifying the
exemption, and is no broader than necessary to meet its public purpose. 2
The Florida Statutes also address the public policy regarding access to government records. Section
119.07(1), F.S., guarantees every person the right to inspect and copy any state, county, or municipal
record, unless the record is exempt.3 Furthermore, the Open Government Sunset Review Act 4 provides
that a public record exemption may be created, revised, or maintained only if it serves an identifiable
public purpose and the “Legislature finds that the purpose is sufficiently compelling to override the
strong public policy of open government and cannot be accomplished without the exemption.”5 An
identifiable public purpose is served if the exemption meets 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; or
Protect trade or business secrets.6
Pursuant to the Open Government Sunset Review Act, a new public record exemption or substantial
amendment of an existing public record exemption is repealed on October 2 nd of the fifth year following
enactment, unless the Legislature reenacts the exemption.
DACS Inspectors and Investigators in the Office of Agricultural Law Enforcement
The Office of Agricultural Law Enforcement (OALE) is located in the Department of Agriculture and
Consumer Services (DACS) and enforces laws governing businesses regulated by the department.
The goal of OALE is to protect consumers from unfair and deceptive trade practices, protect Florida’s
agriculture industry from theft and other crimes, and safeguard the wholesomeness of food and other
consumer products.7 OALE operates agricultural inspection stations on the highways and conduct
vehicle inspections of food moving in and out of Florida. Officers are on the lookout for unsafe or
unwholesome food that could make people sick including pests and diseases that could harm the
state’s $100 billion-dollar agricultural industry.8 OALE investigates crimes, help maintain domestic
1 Article I, s. 24(a), FLA. CONST ..
2 Article I, s. 24(c), FLA. CONST .
3 A public record exemption means a provision of general law which provides that a specified record, or portion thereof, is not subject
to the access requirements of s. 119.07(1), F.S., or s. 24, Art. I of the State Constitution. S. 119.011(8), F.S.
4 S. 119.15, F.S.
5 S. 119.15(6)(b), F.S.
6
Id.
7 Florida Department of Agriculture and Consumer Services, Office of Agricultural Law Enforcement,
https://www.fdacs.gov/Divisions -Offices/Agricultural-Law-Enforcement (last visited March. 17, 2023).
8 Id.
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DATE: 4/15/2023
security, and partner with local law enforcement to help coordinate the Domestic Marijuana Eradication
Task Force.9
Effect of Proposed Changes
The bill provides that the following information regarding current and former DACS inspectors and
investigators and their spouses and children is exempt 10 from public record requirements:
Home addresses;
Telephone numbers;
Dates of birth; and
Photographs.
The bill also protects the following information concerning the spouses and children of such employees:
Places of employment; and
The names and locations of schools and day care facilities attended.
The bill provides a public necessity statement as required by article I, section 24(c) of the Florida
Constitution. The public necessity statement provides that revealing the personal information of DACS
inspectors and investigators and their family members may place them in danger of physical and
emotional harm from disgruntled individuals whose businesses or professional practices have come
under the scrutiny of DACS. They may also be subject to threats or acts of revenge due to the duties
they perform.
The public record exemption created by the bill is subject to the Open Government Sunset Review Act
and will automatically repeal on October 2, 2028, unless reviewed and saved from repeal by the
Legislature.
The bill takes effect July 1, 2023.
B. SECTION DIRECTORY:
Section 1: Creates a public records exemption for information of certain DACS employees, their
spouses, and children.
Section 2: Provides a public necessity statement.
Section 3: Provides an effective date.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
9 Id.
10 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
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).
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B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
None.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. The bill does not appear to require counties or municipalities to spend funds or take
action requiring the expenditure of funds; reduce the authority that counties and municipalities have
to raise revenues in the aggregate; or reduce the percentage of state tax shared with counties and
municipalities.
2. Other:
Vote Requirement
Article I, section 24(c) of the Florida Constitution requires a two-thirds vote of the members present
and voting for final passage of a newly-created or expanded public record or public meeting
exemption. The bill creates a public record exemption; thus, it requires a two-thirds vote for final
passage.
Public Necessity Statement
Article I, section 24(c) of the Florida Constitution requires a public necessity statement for a newly
created or expanded public record or public meeting exemption. The bill creates a public record
exemption; thus, it includes a public necessity statement. The public necessity statement provides,
in part, that revealing the personal information of DACS inspectors and investigators and their
family members may place them in danger of physical and emotional harm from disgruntled
individuals whose businesses or professional practices have come under the scrutiny of DACS.
Breadth of Exemption
Article I, section 24(c) of the Florida Constitution requires a newly created or expanded public
record or public meeting exemption to be no broader than necessary to accomplish the stated
purpose of the law. The bill creates a public records exemption for sensitive investigative materials
and personal information, which does not appear to be broader than necessary to accomplish its
purpose.
B. RULE-MAKING AUTHORITY:
None.
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C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On March 22, 2023, the Ethics, Elections & Open Government Subcommittee adopted an amendment and
reported the bill favorably as a committee substitute. The amendment changes the date the exemption will
automatically repeal, pursuant to the Open Government Sunset Review act, from October 2, 2024 to
October 2, 2028.
This analysis is drafted to the committee substitute as adopted by the Ethics, Elections & Open
Government Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 1215 2023
1 A bill to be entitled
2 An act relating to public records; amending s.
3 119.071, F.S.; providing an exemption from public
4 records requirements for the personal identifying and
5 location information of current or former inspectors
6 or investigators of the Department of Agriculture and
7 Consumer Services and the spouses and children of the
8 current or former inspectors or investigators;
9 providing for retroactive application; providing for
10 future legislative review and repeal of the exemption;
11 providing a statement of public necessity; providing
12 an effective date.
13
14 Be It Enacted by the Legislature of the State of Florida:
15
16 Section 1. Paragraph (d) of subsection (4) of section
17 119.071, Florida Statutes, is amended to read:
18 119.071 General exemptions from inspection or copying of
19 public records.—
20 (4) AGENCY PERSONNEL INFORMATION.—
21 (d)1. For purposes of this paragraph, the term:
22 a. "Home addresses" means the dwelling location at whic h
23 an individual resides and includes the physical address, mailing
24 address, street address, parcel identification number, plot
25 identification number, legal property description, neighborhood
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26 name and lot number, GPS coordinates, and any other descriptive
27 property information that may reveal the home address.
28 b. "Telephone numbers" includes home telephone numbers,
29 personal cellular telephone numbers, personal pager telephone
30 numbers, and telephone numbers associated with personal
31 communications devices.
32 2.a. The home addresses, telephone numbers, dates of
33 birth, and photographs of active or former sworn law enforcement
34 personnel or of active or former civilian personnel employed by
35 a law enforcement agency, including correctional and
36 correctional probation officers, personnel of the Department of
37 Children and Families whose duties include the investigation of
38 abuse, neglect, exploitation, fraud, theft, or other criminal
39 activities, personnel of the Department of Health whose duties
40 are to support the investigation of child abuse or neglect, and
41 personnel of the Department of Revenue or local governments
42 whose responsibilities include revenue collection and
43 enforcement or child support enforcement; the names, home
44 addresses, telephone numbers, photographs, dates of birth, and
45 places of employment of the spouses and children of such
46 personnel; and the names and locations of schools and day care
47 facilities attended by the children of such personnel are exempt
48 from s. 119.07(1) and s. 24(a), Art. I of the State
49 Constitution.
50 b. The home addresses, telephone numbers, dates of birth,
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51 and photographs of current or former nonsworn investigative
52 personnel of the Department of Financial Services whose duties
53 include the investigation of fraud, theft, workers' compensation
54 coverage requirements and compliance, other related criminal
55 activities, or state regulatory requirement violations; the
56 names, home addresses, telephone numbers, dates of birth, and
57 places of employment of the spouses and children of such
58 personnel; and the names and locations of schools and day care
59 facilities attended by the children of such personnel are exempt
60 from s. 119.07(1) and s. 24(a), Art. I of the State
61 Constitution.
62 c. The home addresses, telephone numbers, dates of birth,
63 and photographs of current or former nonsworn investigative
64 personnel of the Office of Financial Regulation's Bureau of
65 Financial Investigations whose duties include the investigation
66 of fraud, theft, other related criminal activities, or state
67 regulatory requirement violations; the names, home addresses,
68 telephone numbers, dates of birth, and places of employment of
69 the spouses and children of such personnel; and the names and
70 locations of schools and day care facilities attended by the
71 children of such personnel are exempt from s. 119.07(1) and s.
72 24(a), Art. I of the State Constitution.
73 d. The home addresses, telephone numbers, dates of birth,
74 and photographs of current or former firefighters certified in
75 compliance with s. 633.408; the names, home addresses, telep hone
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76 numbers, photographs, dates of birth, and places of employment
77 of the spouses and children of such firefighters; and the names
78 and locations of schools and day care facilities attended by the
79 children of such firefighters are exempt from s. 119.07(1) and
80 s. 24(a), Art. I of the State Constitution.
81 e. The home addresses, dates of birth, and telephone
82 numbers of current or former justices of the Supreme Court,
83 district court of appeal judges, circuit court judges, and
84 county court judges; the names, home addresses, telephone
85 numbers, dates of birth, and places of employment of the spouses
86 and children of current or former justices and judges; and the
87 names and locations of schools and day care facilities attended
88 by the children of current or former justices and judges are
89 exempt from s. 119.07(1) and s. 24(a), Art. I of the State
90 Constitution.
91 f. The home addresses, telephone numbers, dates of birth,
92 and photographs of current or former state attorneys, assistant
93 state attorneys, statewide prosecutors, or assistant statewide
94 prosecutors; the names, home addresses, telephone numbers,
95 photographs, dates of birth, and places of employment of the
96 spouses and children of current or former state attorneys,
97 assistant state attorneys, statewide prosecutors, or assistant
98 statewide prosecutors; and the names and locations of schools
99 and day care facilities attended by the children of current or
100 former state attorneys, assistant state attorneys, statewide
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101 prosecutors, or assistant statewide prosecutors are exempt from
102 s. 119.07(1) and s. 24(a), Art. I of the State Constitution.
103 g. The home addresses, dates of birth, and telephone
104 numbers of general magistrates, special magistrates, judges of
105 compensation claims, administrative law judges of the Division
106 of Administrative Hearings, and child support enforcement
107 hearing officers; the names, home addresses, telephone numbers,
108 dates of birth, and places of employment of the spouses and
109 children of general magistrates, special magistrates, judges of
110 compensation claims, administrative law judges of the Division
111 of Administrative Hearings, and child support enforcement
112 hearing officers; and the names and locations of schools and day
113 care facilities attended by the children of general magistrates,
114 special magistrates, judges of compensation claims,
115 administrative law judges of the Division of Administrative
116 Hearings, and child support enforcement hearing officers are
117 exempt from s. 119.07(1) and s. 24(a), Art. I of the State
118 Constitution.
119 h. The home addresses, telephone numbers, dates of birth,
120 and photographs of current or former human resource, labor
121 relations, or employee relations directors, assistant directors,
122 managers, or assistant managers of any local government agency
123 or water management district whose duties include hiring and
124 firing employees, labor contract negotiation, administration, or
125 other personnel-related duties; the names, home addresses,
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126 telephone numbers, dates of birth, and places of employment of
127 the spouses and children of such personnel; and the names and
128 locations of schools and day care facilities attended by the
129 children of such personnel are exempt from s. 119.07(1) and s.
130 24(a), Art. I of the State Constitution.
131 i. The home addresses, telephone numbers, dates of birth,
132 and photographs of current or former code enforcement officers;
133 the names, home addresses, telephone numbers, dates of birth,
134 and places of employment of the spouses and children of such
135 personnel; and the names and locations of schools and da y care
136 facilities attended by the children of such personnel are exempt
137 from s. 119.07(1) and s. 24(a), Art. I of the State
138 Constitution.
139 j. The home addresses, telephone numbers, places of
140 employment, dates of birth, and photographs of current or former
141 guardians ad litem, as defined in s. 39.820; the names, home
142 addresses, telephone numbers, dates of birth, and places of
143 employment of the spouses and children of such persons; and the
144 names and locations of schools and day care facilities attended
145 by the children of such persons are exempt from s. 119.07(1) and
146 s. 24(a), Art. I of the State Constitution.
147 k. The home addresses, telephone numbers, dates of birth,
148 and photographs of current or former juvenile probation
149 officers, juvenile probation supervisors, detention
150 superintendents, assistant detention superintendents, juvenile
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151 justice detention officers I and II, juvenile justice detention
152 officer supervisors, juvenile justice residential officers,
153 juvenile justice residential officer supervisors I and II,
154 juvenile justice counselors, juvenile justice counselor
155 supervisors, human services counselor administrators, senior
156 human services counselor administrators, rehabilitation
157 therapists, and social services counselors of the Department of
158 Juvenile Justice; the names, home addresses, telephone numbers,
159 dates of birth, and places of employment of spouses and children
160 of such personnel; and the names and locations of schools and
161 day care facilities attended by the children of such personnel
162 are exempt from s. 119.07(1) and s. 24(a), Art. I of the State
163 Constitution.
164 l. The home addresses, telephone numbers, dates of birth,
165 and photographs of current or former public defenders, assistant
166 public defenders, criminal conflict and civil regional counsel,
167 and assistant criminal conflict and civil regional counsel; the
168 names, home addresses, telephone numbers, dates of birth, and
169 places of employment of the spouses and children of current or
170 former public defenders, assistant public defenders, criminal
171 conflict and civil regional counsel, and assistant criminal
172 conflict and civil regional counsel; and the names and locations
173 of schools and day care facilities attended by the children of
174 current or former public defenders, assistant public defenders,
175 criminal conflict and civil regional counsel, and assistant
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176 criminal conflict and civil regional counsel are exempt from s.
177 119.07(1) and s. 24(a), Art. I of the State Constitution.
178 m. The home addresses, telephone numbers, dates of birth,
179 and photographs of current or former investigators or inspectors
180 of the Department of Business and Professional Regulation; the
181 names, home addresses, telephone numbers, dates of birth, and
182 places of employment of the spouses and children of such current
183 or former investigators and inspectors; and the names and
184 locations of schools and day care facilities attended by the
185 children of such current or former investigators and inspectors
186 are exempt from s. 119.07(1) and s. 24(a), Art. I of the State
187 Constitution.
188 n. The home addresses, telephone numbers, and dates of
189 birth of county tax collectors; the names, home addresses,
190 telephone numbers, dates of birth, and places of employment of
191 the spouses and children of such tax collectors; and the names
192 and locations of schools and day care facilities attended by the
193 children of such tax collectors are exempt from s. 119.07(1) and
194 s. 24(a), Art. I of the State Constitution.
195 o. The home addresses, telephone numbers, dates of birth,
196 and photographs of current or former personnel of the Department
197 of Health whose duties include, or result in, the determination
198 or adjudication of eligibility for social security disability
199 benefits, the investigation or prosecution of complaints filed
200 against health care practitioners, or the inspection of health
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201 care practitioners or health care facilities licensed by the
202 Department of Health; the names, home addresses, telephone
203 numbers, dates of birth, and places of employment of the spouses
204 and children of such personnel; and the names and locations of
205 schools and day care facilities attended by the children of such
206 personnel are exempt from s. 119.07(1) and s. 24(a), Art. I of
207 the State Constitution.
208 p. The home addresses, telephone numbers, dates of birth,
209 and photographs of current or former impaired practit ioner
210 consultants who are retained by an agency or current or former
211 employees of an impaired practitioner consultant whose duties
212 result in a determination of a person's skill and safety to
213 practice a licensed profession; the names, home addresses,
214 telephone numbers, dates of birth, and places of employment of
215 the spouses and children of such consultants or their employees;
216 and the names and locations of schools and day care facilities
217 attended by the children of such consultants or employees are
218 exempt from s. 119.07(1) and s. 24(a), Art. I of the State
219 Constitution.
220 q. The home addresses, telephone numbers, dates of birth,
221 and photographs of current or former emergency medical
222 technicians or paramedics certified under chapter 401; the
223 names, home addresses, telephone numbers, dates of birth, and
224 places of employment of the spouses and children of such
225 emergency medical technicians or paramedics; and the names and
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226 locations of schools and day care facilities attended by the
227 children of such emergency medical technicians or paramedics are
228 exempt from s. 119.07(1) and s. 24(a), Art. I of the State
229 Constitution.
230 r. The home addresses, telephone numbers, dates of birth,
231 and photographs of current or former personnel employed in an
232 agency's office of inspector general or internal audit
233 department whose duties include auditing or investigating waste,
234 fraud, abuse, theft, exploitation, or other activities that
235 could lead to criminal prosecution or administrative discipline;
236 the names, home addresses, telephone numbers, dates of birth,
237 and places of employment of spouses and children of such
238 personnel; and the names and locations of schools and day care
239 facilities attended by the children of such personnel are exempt
240 from s. 119.07(1) and s. 24(a), Art. I of the State
241 Constitution.
242 s. The home addresses, telephone numbers, dates of birth,
243 and photographs of current or former directors, managers,
244 supervisors, nurses, and clinical employees of an addiction
245 treatment facility; the home addresses, telephone numbers,
246 photographs, dates of birth, and places of employment of the
247 spouses and children of such personnel; and the names and
248 locations of schools and day care facilities attended by the
249 children of such personnel are exempt from s. 119.07(1) and s.
250 24(a), Art. I of the State Constitution. For purposes of this
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251 sub-subparagraph, the term "addiction treatment facility" means
252 a county government, or agency thereof, that is licensed
253 pursuant to s. 397.401 and provides substance abuse prevention,
254 intervention, or clinical treatment, including any licensed
255 service component described in s. 397.311(26).
256 t. The home addresses, telephone numbers, dates of birth,
257 and photographs of current or former directors, managers,
258 supervisors, and clinical employees of a child advoca cy center
259 that meets the standards of s. 39.3035(2) and fulfills the
260 screening requirement of s. 39.3035(3), and the members of a
261 Child Protection Team as described in s. 39.303 whose duties
262 include supporting the investigation of child abuse or sexual
263 abuse, child abandonment, child neglect, and child exploitation
264 or to provide services as part of a multidisciplinary case
265 review team; the names, home addresses, telephone numbers,
266 photographs, dates of birth, and places of employment of the
267 spouses and children of such personnel and members; and the
268 names and locations of schools and day care facilities attended
269 by the children of such personnel and members are exempt from s.
270 119.07(1) and s. 24(a), Art. I of the State Constitution.
271 u. The home addresses, telephone numbers, places of
272 employment, dates of birth, and photographs of current or former
273 staff and domestic violence advocates, as defined in s.
274 90.5036(1)(b), of domestic violence centers certified by the
275 Department of Children and Families under chapter 39; the names,
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276 home addresses, telephone numbers, places of employment, dates
277 of birth, and photographs of the spouses and children of such
278 personnel; and the names and locations of schools and day care
279 facilities attended by the children of such personnel are exempt
280 from s. 119.07(1) and s. 24(a), Art. I of the State
281 Constitution.
282 v. The home addresses, telephone numbers, dates of birth,
283 and photographs of current or former inspectors or investigators
284 of the Department of Agriculture and Consumer Services; the
285 names, home addresses, telephone numbers, dates of birth, and
286 places of employment of the spouses and children of current or
287 former inspectors or investigators; and the names and locations
288 of schools and day care facilities attended by the chil dren of
289 current or former inspectors or investigators are exempt from s.
290 119.07(1) and s. 24(a), Art. I of the State Constitution. This
291 sub-subparagraph is subject to the Open Government Sunset Review
292 Act in accordance with s. 119.15 and shall stand repeal ed on
293 October 2, 2028, unless reviewed and saved from repeal through
294 reenactment by the Legislature.
295 3. An agency that is the custodian of the information
296 specified in subparagraph 2. and that is not the employer of the
297 officer, employee, justice, judge, or other person specified in
298 subparagraph 2. must maintain the exempt status of that
299 information only if the officer, employee, justice, judge, other
300 person, or employing agency of the designated employee submits a
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301 written and notarized request for maintenance of the exemption
302 to the custodial agency. The request must state under oath the
303 statutory basis for the individual's exemption request and
304 confirm the individual's status as a party eligible for exempt
305 status.
306 4.a. A county property appraiser, as defined in s.
307 192.001(3), or a county tax collector, as defined in s.
308 192.001(4), who receives a written and notarized request for
309 maintenance of the exemption pursuant to subparagraph 3. must
310 comply by removing the name of the individual with exempt status
311 and the instrument number or Official Records book and page
312 number identifying the property with the exempt status from all
313 publicly available records maintained by the property appraiser
314 or tax collector. For written requests received on or before
315 July 1, 2021, a county property appraiser or county tax
316 collector must comply with this sub-subparagraph by October 1,
317 2021. A county property appraiser or county tax collector may
318 not remove the street address, legal description, or other
319 information identifying real property within the agency's
320 records so long as a name or personal information otherwise
321 exempt from inspection and copying pursuant to this section are
322 not associated with the property or otherwise displayed in the
323 public records of the agency.
324 b. Any information restricted from public display,
325 inspection, or copying under sub-subparagraph a. must be
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326 provided to the individual whose information was removed.
327 5. An officer, an employee, a justice, a judge, or other
328 person specified in subparagraph 2. may submit a written request
329 for the release of his or her exempt information to the
330 custodial agency. The written request must be notarized and must
331 specify the information to be released and the party authorized
332 to receive the information. Upon receipt of the written request,
333 the custodial agency must release the specified information to
334 the party authorized to receive such information.
335 6. The exemptions in this paragraph apply to information
336 held by an agency before, on, or after the effective date of the
337 exemption.
338 7. Information made exempt under this paragraph may be
339 disclosed pursuant to s. 28.2221 to a title insurer authorized
340 pursuant to s. 624.401 and its affiliates as defined in s.
341 624.10; a title insurance agent or title insurance agency as
342 defined in s. 626.841(1) or (2), respectively; or an attorney
343 duly admitted to practice law in this state and in good standing
344 with The Florida Bar.
345 8. The exempt status of a home address contained in the
346 Official Records is maintained only during the period when a
347 protected party resides at the dwelling location. Upon
348 conveyance of real property after October 1, 2021, and when such
349 real property no longer constitutes a protected party's home
350 address as defined in sub-subparagraph 1.a., the protected party
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351 must submit a written request to release the removed information
352 to the county recorder. The written request to release the
353 removed information must be notarized, must confirm that a
354 protected party's request for release is pursuant to a
355 conveyance of his or her dwelling location, and must specify the
356 Official Records book and page, instrument number, or clerk's
357 file number for each document containing the information to be
358 released.
359 9. Upon the death of a protected party as verified by a
360 certified copy of a death certificate or court order, any party
361 can request the county recorder to release a protected
362 decedent's removed information unless there is a related request
363 on file with the county recorder for continued removal of the
364 decedent's information or unless such removal is otherwise
365 prohibited by statute or by court order. The written request to
366 release the removed information upon the death of a protected
367 party must attach the certified copy of a death certificate or
368 court order and must be notarized, must confirm the request for
369 release is due to the death of a protected party, and must
370 specify the Official Records book and page number, instrument
371 number, or clerk's file number for each document containing the
372 information to be released. A fee may not be charged for the
373 release of any document pursuant to such request.
374 10. Except as otherwise expressly provided in this
375 paragraph, this paragraph is subject to the Open Government
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376 Sunset Review Act in accordance with s. 119.15 and shall stand
377 repealed on October 2, 2024, unless reviewed and saved from
378 repeal through reenactment by the Legislature.
379 Section 2. The Legislature finds that it is a public
380 necessity that the home addresses, telephone numbers, dates of
381 birth, and photographs of current or former inspectors or
382 investigators of the Department of Agriculture and Consumer
383 Services; the names, home addresses, telephone numbers, dates of
384 birth, and places of employment of the spouses and children of
385 current or former inspectors or investigators; and the names and
386 locations of schools and day care facilities attended by the
387 children of current or former inspectors or investigators be
388 made exempt from s. 119.07(1), Florida Statutes, and s. 24(a),
389 Article I of the State Constitution. The Legislature finds that
390 the release of such personal identifying and location
391 information might place the department's current or former
392 inspectors or investigators and their family members in danger
393 of physical and emotional harm from disgruntled individuals
394 whose businesses or professional practices have come under the
395 scrutiny of the department. In addition, such personnel may be
396 subject to threats or acts of revenge because of the duties they
397 perform. The Legislature further finds that the harm that may
398 result from the release of such personal identifying and
399 location information outweighs any public benefit that may be
400 derived from the disclosure of the information.
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401 Section 3. This act shall take effect July 1, 2023.
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CS/HB 1267
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 1267 Consumer Finance Loans
SPONSOR(S): Insurance & Banking Subcommittee, Fernandez-Barquin
TIED BILLS: IDEN./SIM. BILLS: SB 580
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 14 Y, 0 N, As CS Fletcher Lloyd
2) State Administration & Technology 11 Y, 3 N Perez Topp
Appropriations Subcommittee
3) Commerce Committee Fletcher Hamon
SUMMARY ANALYSIS
The Florida Consumer Finance Act, ch. 516, F.S. (Act), prohibits businesses from making consumer finance
loans unless first authorized to do so under the Act. Under the Act, licensed lenders are allowed to make
secured or unsecured loans up to $25,000 with a tiered interest rate structure, such that the maximum annual
interest rate allowed on each tier decreases as 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 requires that, at the time of applying for a license, the applicant pay to the office a nonrefundable
biennial license fee of $625. Other than applications to renew or reactivate a license, applicants must also pay
a nonrefundable investigation fee of $200.
Additionally, 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 the operation of a branch that makes consumer finance loans without first obtaining a license;
Requires an application fee of $625 to be paid to the Office of Financial Regulation (OFR) 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 that provide assistance programs during a disaster to report to OFR details of such
assistance programs; and
Requires licensees to annually submit to OFR reports of certain information, which OFR may publish in
a report after anonymizing and 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.
FULL ANALYSIS
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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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 OFR 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 also prohibits licensees from applying delinquency charges until a borrower has been in default for
10 days.
Licensed lenders are allowed to make secured or unsecured loans up to $25,000 with a tiered interest rate
structure, such that the maximum annual interest rate allowed on each tier decreases as 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 OFR for each branch application filed, which is in 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
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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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 OFR 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 OFR, 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;
The total number and dollar amount of loans charged off as of December 31st of the preceding
calendar year; and
The total number and dollar amount of loans with delinquency status listed as:
o Current or less than 30 days past due.
o From 30 to 59 days past due.
o From 60 to 89 days past due.
o At least 90 days past due.
The bill requires a licensee to submit the report to OFR with an accompanying affidavit certifying that all the
information submitted is designated as trade secret. The bill allows OFR 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:
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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:
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 OFR considers this to be a negligible amount
which would not impact its operations.6 Additionally, according to 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:
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:
5 Florida Office of Financial Regulation, Agency Analysis of 2023 HB 1267, p. 5 (Mar. 10, 2023).
6 Id.
7 Id.
8 Id.
9 Id.
10 Id.
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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 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 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:
Article VII, sec. 19(e), of the Florida Constitution requires any bill that imposes, authorizes, or raises
a state tax or fee must be contained in a separate bill that contains no other subject. Current law
requires each location of a consumer finance company to pay a $625 application fee and a $200
investigation fee. The bill requires the designation of a principal location. The principal location and
each branch location will be subject to the current application fee, but only the principal location will
be subject to the investigation fee. Arguably, this is merely a change in status of a location from an
applicant location to an applicant principal location; retaining the same fee for that application. Also,
other applicant locations will become applicant branch locations; also retaining the same fee. There
is no case law to guide this analysis. It is unclear whether a fee bill is required.
B. RULE-MAKING AUTHORITY:
The bill creates a new section of statute that will require a licensee to file an annual report with OFR “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.
C. DRAFTING ISSUES OR OTHER COMMENTS:
Lines 207-210: The term “assistance program” is undefined. While OFR is not tasked with approving
the assistance program, it is unclear how OFR will determine whether a program is actually an
assistance program that may be noticed to OFR pursuant to s. 516.15(5), F.S.15 An amendment is
expected to address this issue.
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. An amendment is expected to address this issue.
11 Id. at 5.
12 Id.
13 Id. at 6.
14 Id. at 6.
15 Id.
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Line 238: It is unclear whether the deadline will be March 15th of each year. An amendment is
expected to address this issue.
Line 251: This line references “loans outstanding by the licensee.” Replacing the word “with” instead of
the word “by” may provide clarity. An amendment is expected to address this issue.
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. An amendment is expected to address this issue.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On March 27, 2023, the Insurance & Banking Subcommittee considered the bill, adopted one amendment,
and reported the bill favorably as a committee substitute. The amendment requires that licensees submit
the total number and dollar amount of loans with delinquency status, categorized by amount of days past
due, in addition to the other annual reporting requirements proposed by the bill.
The analysis is drafted to the committee substitute as passed by the Insurance & Banking Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 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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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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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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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 lice nsee
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 f or
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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hb1267-01-c1
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 1267 2023
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 (h) The total number and dollar amount of loans with
269 delinquency status listed as:
270 1. Current or less than 30 days past due.
271 2. From 30 to 59 days past due.
272 3. From 60 to 89 days past due.
273 4. At least 90 days past due.
274 (3) The licensee shall submit the report to the office
275 with an accompanying affidavit certifying pursuant to s.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 1267 2023
276 655.0591 that all information submitted is designated as trade
277 secret.
278 (4) The office may publish a report of the information
279 submitted pursuant to this section if all the data published in
280 the report are anonymized aggregate data from all licensees.
281 Section 8. This act shall take effect July 1, 2023.
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hb1267-01-c1
COMMERCE COMMITTEE
CS/HB 1267 by Rep. Fernandez-Barquin
Relating to Consumer Finance Loans
AMENDMENT SUMMARY
April 17, 2023
Amendment 1 by Rep. Fernandez-Barquin (Line 108): The amendment makes non-
substantive changes to conform the bill with its Senate counterpart.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/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: Commerce Committee
2 Representative Fernandez-Barquin offered the following:
3
4 Amendment (with title amendment)
5 Remove lines 108-280 and insert:
6 Applications for a license for the principal place of business,
7 except for applications to renew or reactivate a license, must
8 also be accompanied by a nonrefundable investigation fee of
9 $200. An application is considered received for purposes of s.
10 120.60 upon receipt of a completed application form as
11 prescribed by commission rule, a nonrefundable application fee
12 of $625, and any other fee prescribed by law. The commission may
13 adopt rules requiring electronic submission of any form,
14 document, or fee required by this chapter act if such rules
15 reasonably accommodate technological or financial hardship. The
16 commission may prescribe by rule requirements and procedures for
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1267 (2023)
Amendment No. 1
17 obtaining an exemption due to a technological or financial
18 hardship.
19 Section 4. Subsection (1) and paragraph (a) of subsection
20 (3) of section 516.031, Florida Statutes, are amended to read:
21 516.031 Finance charge; maximum rates.—
22 (1) INTEREST RATES.—A licensee may lend any sum of money
23 up to $25,000. A licensee may not take a security interest
24 secured by land on any loan less than $1,000. The licensee may
25 charge, contract for, and receive thereon interest charges as
26 provided and authorized by this section. The maximum interest
27 rate shall be 36 30 percent per annum, computed on the first
28 $3,000 of the principal amount; 24 percent per annum on that
29 part of the principal amount exceeding $3,000 and up to $4,000;
30 and 18 percent per annum on that part of the principal amount
31 exceeding $4,000 and up to $25,000. The original principal
32 amount as used in this section is the same as the amount
33 financed as defined by the federal Truth in Lending Act and
34 Regulation Z of the Board of Governors of the Federal Reserve
35 System. In determining compliance with the statutory maximum
36 interest and finance charges set forth herein, the computations
37 used shall be simple interest and not add-on interest or any
38 other computations. If two or more interest rates are applied to
39 the principal amount of a loan, the licensee may charge,
40 contract for, and receive interest at that single annual
41 percentage rate which, if applied according to the actuarial
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1267 (2023)
Amendment No. 1
42 method to each of the scheduled periodic balances of principal,
43 would produce at maturity the same total amount of interest as
44 would result from the application of the two or more rates
45 otherwise permitted, based upon the assumption that all payments
46 are made as agreed.
47 (3) OTHER CHARGES.—
48 (a) In addition to the interest, delinquency, and
49 insurance charges provided in this section, further or other
50 charges or amount for any examination, service, commission, or
51 other thing or otherwise may not be directly or indirectly
52 charged, contracted for, or received as a condition to the grant
53 of a loan, except:
54 1. An amount of up to $25 to reimburse a portion of the
55 costs for investigating the character and credit of the person
56 applying for the loan;
57 2. An annual fee of $25 on the anniversary date of each
58 line-of-credit account;
59 3. Charges paid for the brokerage fee on a loan or line of
60 credit of more than $10,000, title insurance, and the appraisal
61 of real property offered as security if paid to a third party
62 and supported by an actual expenditure;
63 4. Intangible personal property tax on the loan note or
64 obligation if secured by a lien on real property;
65 5. The documentary excise tax and lawful fees, if any,
66 actually and necessarily paid out by the licensee to any public
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1267 (2023)
Amendment No. 1
67 officer for filing, recording, or releasing in any public office
68 any instrument securing the loan, which may be collected when
69 the loan is made or at any time thereafter;
70 6. The premium payable for any insurance in lieu of
71 perfecting any security interest otherwise required by the
72 licensee in connection with the loan if the premium does not
73 exceed the fees which would otherwise be payable, which may be
74 collected when the loan is made or at any time thereafter;
75 7. Actual and reasonable attorney fees and court costs as
76 determined by the court in which suit is filed;
77 8. Actual and commercially reasonable expenses for
78 repossession, storing, repairing and placing in condition for
79 sale, and selling of any property pledged as security; or
80 9. A delinquency charge for each payment in default for at
81 least 12 10 days if the charge is agreed upon, in writing,
82 between the parties before imposing the charge. Delinquency
83 charges may be imposed as follows:
84 a. For payments due monthly, the delinquency charge for a
85 payment in default may not exceed $15.
86 b. For payments due semimonthly, the delinquency charge
87 for a payment in default may not exceed $7.50.
88 c. For payments due every 2 weeks, the delinquency charge
89 for a payment in default may not exceed $7.50 if two payments
90 are due within the same calendar month, and may not exceed $5 if
91 three payments are due within the same calendar month.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1267 (2023)
Amendment No. 1
92
93 Any charges, including interest, in excess of the combined total
94 of all charges authorized and permitted by this chapter
95 constitute a violation of chapter 687 governing interest and
96 usury, and the penalties of that chapter apply. In the event of
97 a bona fide error, the licensee shall refund or credit the
98 borrower with the amount of the overcharge immediately but
99 within 20 days after the discovery of such error.
100 Section 5. Subsection (5) is added to section 516.15,
101 Florida Statutes, to read:
102 516.15 Duties of licensee.—Every licensee shall:
103 (5) If the Federal Emergency Management Agency issues a
104 major disaster declaration for this state and if a licensee
105 offers an assistance program to borrowers impacted by the
106 disaster, within 10 days after the licensee's establi shment of
107 the program, send written notice to the office in either
108 physical or electronic format and include the following
109 information, subject to change as any additional declarations
110 are issued or declarations are revoked:
111 (a) The licensed locations affected by the disaster
112 declaration, including physical addresses, if applicable;
113 (b) The telephone number, e-mail address, or other contact
114 information for the licensee;
115 (c) A brief description of the assistance program
116 available to borrowers in the affected areas; and
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1267 (2023)
Amendment No. 1
117 (d) The start date, and end date if known, of the
118 assistance program.
119
120 For purposes of this subsection, assistance programs may
121 include, but are not limited to, deferments, forbearance, waiver
122 of late fees, payment modification, or changing payment due
123 dates.
124 Section 6. Section 516.38, Florida Statutes, is created to
125 read:
126 516.38 Annual reports by licensees.—
127 (1) By March 15, 2024, and each March 15 thereafter, a
128 licensee shall file a report with the office in a form and
129 manner prescribed by commission rule. The report must include
130 each of the items specified in subsection (2) for the preceding
131 calendar year using aggregated and anonymized data and without
132 reference to any borrower's nonpublic personal information.
133 (2) The report must include the following information for
134 the preceding calendar year:
135 (a) The number of locations held by the licensee under
136 this chapter as of December 31 of the preceding calendar year.
137 (b) The number of loan originations by the licensee from
138 all licenses held under this chapter during the preceding
139 calendar year.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1267 (2023)
Amendment No. 1
140 (c) The total dollar amount of loans and the number of
141 loans outstanding with the licensee from all licenses held under
142 this chapter as of December 31 of the preceding calendar year.
143 (d) The total dollar amount of loans and the number of
144 loans in which the licensee holds a security interest in
145 collateral as of December 31 of the preceding calendar year.
146 (e) The total dollar amount of loans and the number of
147 unsecured loans as of December 31 of the preceding calendar
148 year.
149 (f) The total number of loans, separated by principal
150 amount, in the following ranges as of December 31 of the
151 preceding calendar year:
152 1. Up to and including $5,000.
153 2. Five thousand and one dollars to $10,000.
154 3. Ten thousand and one dollars to $15,000.
155 4. Fifteen thousand and one dollars to $20,000.
156 5. Twenty thousand and one dollars to $25,000.
157 (g) The total dollar amount of loans and the number of
158 loans charged off as of December 31 of the preceding calendar
159 year.
160 (h) The total dollar amount of loans and the number of
161 loans with delinquency status listed as:
162 1. Current or less than 30 days past due.
163 2. From 30 to 59 days past due.
164 3. From 60 to 89 days past due.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1267 (2023)
Amendment No. 1
165 4. At least 90 days past due.
166 (3) A licensee claiming that any information submitted in
167 the report contains a trade secret must submit to the office an
168 accompanying affidavit in accordance with s. 655.0591 and
169 designate the information claimed to be a trade secret pursuant
170 to s. 655.0591.
171 (4) The office may publish a report of information
172 submitted pursuant to this section, provided that all data
173 published in the report is anonymized and aggregated from all
174 licensees.
175 Section 7. Section 516.39, Florida Statutes, is crea ted to
176 read:
177 516.39 Suspension of penalties and remedial measures after
178 federal disaster declaration.—If the Federal Emergency
179 Management Agency issues a major disaster declaration for a
180 county, a licensee operating in that county designated in the
181 declaration must suspend for a period of 90 days after the date
182 of the initial declaration the following:
183 (1) The application of delinquency charges under s.
184 516.031(3)(a)9.
185 (2) Repossessions of collateral pledged to loans made
186 under this chapter.
187 (3) The filing of civil actions for the collection of
188 amounts owed for loans made under this chapter.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1267 (2023)
Amendment No. 1
189 Section 8. For the purpose of incorporating the amendments
190 made by this act to sections 516.02 and 516.031, Florida
191 Statutes, in references thereto, section 516.19, Florida
192 Statutes, is reenacted to read:
193 516.19 Penalties.—Any person who violates any of the
194 provisions of s. 516.02, s. 516.031, s. 516.05(3), s. 516.05(6),
195 or s. 516.07(1)(e) commits a misdemeanor of the first degree,
196 punishable as provided in s. 775.082 or s. 775.083.
197
198 -----------------------------------------------------
199 T I T L E A M E N D M E N T
200 Remove lines 4-23 and insert:
201 516.02, F.S.; prohibiting a person from operating a branch of a
202 business making consumer finance loans before obtaining a
203 license from the Office of Financial Regulation; amending s.
204 516.03, F.S.; specifying application fees for branch licenses;
205 revising the applicability of investigation fees; making a
206 technical change; amending s. 516.031, F.S.; revising the
207 maximum interest rate and the calculation of interest rates on
208 consumer finance loans; revising the minimum amount of time
209 before which a delinquency charge for each payment in default
210 may be imposed; amending s. 516.15, F.S.; requiring licensees
211 offering an assistance program to borrowers after a federally
212 declared major disaster to send a specified notice to the office
213 within a certain timeframe; providing construction; creating s.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1267 (2023)
Amendment No. 1
214 516.38, F.S.; requiring licensees to file annual reports with
215 the office; providing for rulemaking by the Financial Services
216 Commission; specifying requirements for the reports; providing
217 requirements for a licensee claiming that submitted information
218 contains a trade secret; authorizing the office to publish a
219 report in a certain manner; creating s. 516.39, F.S.; requiring
220 certain licensees to suspend specified actions for a certain
221 timeframe after a federally declared disaster; reenacting s.
222 516.19, F.S., relating to penalties, to incorporate the
223 amendments made to ss. 516.02 and 516.031, F.S., in references
224 thereto; providing an effective date.
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CS/HB 1281
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 1281 Preemption Over Utility Service Restrictions
SPONSOR(S): Energy, Communications & Cybersecurity Subcommittee, Buchanan
TIED BILLS: IDEN./SIM. BILLS: CS/SB 1256
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Energy, Communications & Cybersecurity 12 Y, 3 N, As CS Walsh Keating
Subcommittee
2) Local Administration, Federal Affairs & Special 13 Y, 3 N Burgess Darden
Districts Subcommittee
3) Commerce Committee Walsh Hamon
SUMMARY ANALYSIS
The Florida Constitution grants county and municipal governments broad home rule authority. Specifically,
non-charter county governments may exercise those powers of self-government that are provided by general
or special law. Those counties operating under a county charter have all powers of self-government not
inconsistent with general law or special law approved by vote of the electors. Likewise, municipalities have
those governmental, corporate, and proprietary powers enabling them to conduct municipal government,
perform their functions and provide services, and exercise any power for municipal purposes, except as
otherwise provided by law. In contrast, special districts have only those powers expressly authorized by
general or special law. County and municipal governments have broad authority to legislate on any matter that
is not inconsistent with federal or state law.
A local government enactment is inconsistent with state law if (1) the Legislature has preempted a particular
subject area or (2) the local enactment conflicts with a state statute. Where state preemption applies, it
precludes a local government from exercising authority in that particular area.
The bill prohibits a municipality, county, special district, or other political subdivision of the state from enacting
or enforcing a resolution, ordinance, rule, code, or policy, or take any other action that restricts or prohibits, or
has the effect of restricting or prohibiting, the use of any major appliance, including a stove or grill, which uses
the types or fuel source of energy production which may be used, delivered, converted, or supplied by:
Investor-owned electric utilities;
Municipal electric utilities;
Rural electric cooperatives;
Entities formed by interlocal agreement to generate, sell, and transmit electrical energy;
Investor-owned gas utilities;
Gas districts;
Municipal natural gas utilities;
Natural gas transmission companies; and
Certain propane dealers, dispensers, and gas cylinder exchange operators.
The bill provides an exception for circumstances in which the political subdivision must enforce the Florida
Building Code or the Florida Fire Prevention Code.
The bill appears to have no fiscal impact on state or local governments.
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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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Present Situation
Local Government Authority
The Florida Constitution grants county and municipal governments broad home rule authority.
Specifically, non-charter county governments may exercise those powers of self-government that are
provided by general or special law.1 Those counties operating under a county charter have all powers
of self-government not inconsistent with general law or special law approved by vote of the electors. 2
Likewise, municipalities 3 have those governmental, corporate, and proprietary powers enabling them to
conduct municipal government, perform their functions and provide services, and exercise any power
for municipal purposes, except as otherwise provided by law. 4
A “special district” is a unit of local government created for a particular purpose, with jurisdiction to
operate within a limited geographic boundary.5 Special districts are created by general law,6 special
act,7 local ordinance,8 or by rule of the Governor and Cabinet.9 A special district has only those powers
expressly provided by, or reasonably implied from, the authority provided in the district’s charter.
Special districts provide specific municipal services in addition to, or in place of, those provided by a
municipality or county.10 As of March 10, 2023, there are 614 active dependent11 special districts and
1,312 active independent special districts in Florida.12
Local Government Authority Over Matters Related to Utility and Energy Services
Many of the powers granted to local governments by general law relate, directly or indirectly, to the
provision of utility or other energy services to property owners or utility customers in general or to the
authority of local governments to provide these services themselves. These powers include, but may
not be limited to, the authority to:
Prepare and enforce comprehensive plans for development. 13
Issue development permits and orders.14
1 Art. VIII, s. 1(f), Fla. Const.
2 Art. VIII, s. 1(g), Fla. Const.
3 A municipality is a local government entity created to perform functions and provide services for the particular benefit of
the population within the municipality, in addition to those provided by the county. The term “municipality” may be used
interchangeably with the terms “town,” “city,” and “village.”
4 Art. VIII, s. 2(b), Fla. Const. See also s. 166.021(1), F.S.
5 See Halifax Hospital Medical Center v. State of Fla., et al., 278 So. 3d 545, 547 (Fla. 2019).
6 S. 189.031(3), F.S.
7 Id.
8 S. 189.02(1), F.S.
9 S. 190.005(1), F.S. See, generally, s. 189.012(6), F.S.
10 2020-2022 Local Gov’t Formation Manual, p. 62,
https://myfloridahouse.gov/Sections/Documents/loaddoc.aspx?PublicationType= Committees&CommitteeId=3117&Sessio
n=2021&DocumentType=General+Publications&FileName=2021-2022+Local+ Government+Formation+Manual.pdf (last
visited March 10, 2023).
11 Dependent special districts are under some control by a single county or municipality. S. 189.012(2), F.S. An
independent special district is any district that is not a dependent district. S. 189.012(3), F.S. A special district that
includes more than one county is independent unless it lies wholly within the boundaries of a single municipality.
12 Florida Department of Economic Opportunity, Official List of Special Districts Online, State Totals, available at
https://www.floridajobs.org/community-planning-and-development/special -districts/special-district-accountability-
program/official-list-of-special-districts (last visited March 10, 2023).
13 S. 125.01(1)(g), F.S.
14 Ss. 125.022, F.S. and 166.033, F.S.
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Establish, coordinate, and enforce zoning and such business regulations as are necessary for
the protection of the public.15
Enforce the Florida Building Code and adopt and enforce local technical amendments thereto. 16
Enter into contracts with utility companies or others for the supply of water, electricity, or
telephone service to or in connection with any project. 17
Construct, operate, and maintain gas plants and distribution systems for domestic, municipal,
and industrial uses,18 construct such other buildings and facilities as may be required to properly
and economically operate and maintain such works, 19 and make all necessary rules or
regulations governing the use, control and operation of such works;20
Contract with private companies for the right to construct, operate, and maintain gas plants and
distribution systems for domestic, municipal, and industrial uses, including the privilege or
franchise of exercising its corporate powers for such terms of years and upon such conditions
and limitations as may be deemed expedient and for the best interest of the municipality, for up
to 30 years, provided that the rates or charges to be made by the private company to the
individual users of the utility are fixed by the municipality. 21
Provide and regulate roads, rights-of-way, and related transportation facilities.22
License the use of gas and power lines in rights-of-way.23
Adopt, revise, and amend, from time to time, appropriate ordinances, rules, and regulations
reasonably necessary to maintain air quality standards established pursuant to state and federal
law, including the federal Clean Air Act.24
Further, general law provides a role for local governments in state proceedings related to the siting of
certain new electrical power plants, transmission lines, and natural gas pipelines. Specifically, part II of
ch. 403, F.S., requires local governments to provide a report to the Department of Environmental
Protection (DEP) as to the consistency of proposed electrical power plants, transmission lines, and
natural gas pipelines with all applicable local ordinances, regulations, standards, or criteria that apply to
the proposed facility, including local comprehensive plans, zoning regulations, land development
regulations, and any applicable local environmental regulations. 25
Municipalities are authorized to levy a public service tax on the purchase of electricity, natural gas
liquefied petroleum gas, and manufactured gas.26
As noted above, many municipalities own and operate electric utilities and natural gas utilities and
govern the operation of those utilities through ordinance, code, or policies. Some special districts
provide these services under policies adopted by each special district.
State Preemption
Local governments have broad authority to legislate on any matter that is not inconsistent with federal
or state law. A local government enactment may be inconsistent with state law if (1) the Legislature
"has preempted a particular subject area" or (2) the local enactment conflicts with a state statute.
State preemption precludes a local government from exercising authority in that particular area. 27
15 S. 125.01(1)(h), F.S.
16 S. 125.01(1)(bb), F.S.
17 S. 125.012(19), F.S.
18 S. 180.06(8), F.S.
19 S. 180.06(9), F.S.
20 S. 180.13, F.S.
21 S. 180.14, F.S.
22 S. 125.01(1)(m), F.S.
23 S. 125.42, F.S.
24 S. 125.275, F.S.
25 Ss. 403.507(2)(a)3., 403.526(2)(a)5., and 403.941, F.S.
26 S. 166.231, F.S.
27 Wolf, The Effectiveness of Home Rule: A Preemptions and Conflict Analysis , 83 Fla. B.J. 92 (June 2009),
https://www.floridabar.org/the-florida-bar-journal/the-effectiveness-of-home-rule-a-preemption-and-conflict-analysis/ (last
visited March 10, 2023).
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Florida law recognizes two types of preemption: express and implied. Express preemption requires a
specific legislative statement; it cannot be implied or inferred. 28 Express preemption of a field by the
Legislature must be accomplished by clear language stating that intent.29 In cases where the
Legislature expressly or specifically preempts an area, there is no problem with ascertaining what the
Legislature intended.30 In cases determining the validity of ordinances enacted in the face of state
preemption, the effect has been to find such ordinances null and void. 31
Preemption Over Utility Service Restrictions
Section 366.032, F.S., expressly preempts the area of restricting utility services, prohibiting a
municipality, county, special district, or other political subdivision of the state from enacting or enforcing
a resolution, ordinance, rule, code, or policy, or take any other action that restricts or prohibits, or has
the effect of restricting or prohibiting, the types or fuel sources of energy production which may be
used, delivered, converted, or supplied by the following entities to serve customers that these entities
are authorized to serve:
Investor-owned electric utilities;
Municipal electric utilities;
Rural electric cooperatives;
Entities formed by interlocal agreement to generate, sell, and transmit electrical energy;
Investor-owned gas utilities;
Gas districts;
Municipal natural gas utilities;
Natural gas transmission companies; and
Certain propane dealers, dispensers, and gas cylinder exchange operators.32
An electric utility is one which owns, maintains, or operates an electric generation, transmission or
distribution system. An electric utility can be investor-owned, municipally-owned, or a rural electric
cooperative.33 There are four investor-owned electric utilities in Florida: Florida Power & Light
Company,34 Duke Energy Florida, Tampa Electric Company, and Florida Public Utilities Corporation.35
Additionally, there are thirty-four municipal electric utilities and seventeen rural electric cooperatives. 36
Further, the Florida Municipal Power Agency was created through a series of interlocal agreements
under s. 163.01, F.S., to provide wholesale power supply to municipal electric utilities. 37 Fuels that
Florida electric utilities use to generate electric power include, but are not limited to: natural gas,
nuclear, coal, and renewables like solar and biomass. 38
A natural gas utility is a utility that supplies natural or manufactured gas, or liquefied gas with air
admixture, or a similar gaseous substance by pipeline, to or for the public. A natural gas utility can be a
28 See City of Hollywood v. Mulligan, 934 So. 2d 1238, 1243 (Fla. 2006); Phantom of Clearwater, Inc. v. Pinellas County,
894 So. 2d 1011, 1018 (Fla. 2d DCA 2005), approved in Phantom of Brevard, Inc. v. Brevard County, 3 So. 3d 309 (Fla.
2008).
29 Mulligan, 934 So. 2d at 1243.
30 Sarasota Alliance for Fair Elections, Inc. v. Browning, 28 So. 3d 880, 886 (Fla. 2010).
31 See, e.g., Nat’l Rifle Ass’n of Am., Inc. v. City of S. Miami, 812 So.2d 504 (Fla. 3d DCA 2002).
32 S. 366.032, F.S.
33 S. 366.02, F.S.
34 FPL acquired Gulf Power Company in 2019 and merged as of January 3, 2022.
35 Florida Public Service Commission, Facts & Figures of the Florida Utility Industry (2022), p, 4, available at
https://www.floridapsc.com/pscfiles/website-files/PDF/Publications/Reports/General/FactsAndFigures/April%202022.pdf
(last visited Mar. 11, 2023).
36 Id. at 11-12.
37 Currently, FMPA serves the following municipalities: Alachua, Bartow, Blountstown, Bushnell, Chattahoochee,
Clewiston, Fort Meade, Fort Pierce, Gainesville, Green Cove Springs, Havana, Homestead, Jacksonville Beach, Key
West, Kissimmee, Lake Worth, Lakeland, Leesburg, Moore Haven, Mount Dora, New Smyrna Beach, Newberry, Ocala,
Orlando, Quincy, St. Cloud, Starke, Vero Beach, Wauchula, Williston, and Winter Park. Florida Municipal Power Agency,
Members, http://fmpa.com/about/members/ (last visited Mar. 11, 2023).
38 Florida Public Service Commission, Facts & Figures of the Florida Utility Industry, supra at. n. 35, p. 3.
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gas public utility, gas district, or natural gas utility or municipality.39 Currently, there are eight investor-
owned natural gas utilities, twenty-seven municipally owned natural gas utilities, and four special gas
districts.40
Liquified petroleum gas is any material which is composed predominately of any of the following
hydrocarbons, or mixtures: propane, propylene, butanes, and butylenes. 41 A category I liquid petroleum
gas dealer is someone who sells or offers to sell by delivery, or at a stationary location, any liquified
petroleum gas to a consumer for industrial, commercial, or domestic use. 42 A category II liquefied
petroleum gas dispenser is a person who operates a liquefied petroleum gas dispensing unit for the
purpose of serving liquid products to the consumer for industrial, commercial, or domestic use, and who
sells, or offers to sell or lease equipment for the use of liquified petroleum gas. 43 A category III liquified
petroleum gas cylinder exchange operator is a person who operates a storage facility used for the
purpose of storing filled propane cylinders of certain capacities while awaiting sale to the consumer, or
a facility used for the storage of empty or filled containers which have been offered for exchange. 44
Gas Stove Bans
Multiple cities around the country have placed restrictions on the use of natural gas, propane, and
related appliances. Nearly 100 cities and counties in the U.S. have adopted policies, rules, or
ordinances that restrict the use of gas-fueled stoves and heaters.45 In California, 73 cities and counties
have adopted building codes that require new residential and commercial buildings to be all-electric.46
Additionally, 26 cities and three states (Maryland, Colorado, and Washington) have building codes in
effect, or that are scheduled to go into effect, that will require new construction to be all-electric.47
Effect of Proposed Changes
The bill creates an express preemption that prohibits a municipality, county, special district, or other
political subdivision of the state from enacting or enforcing a resolution, ordinance, rule, code, or policy,
or take any other action that restricts or prohibits, or has the effect of restricting or prohibiting, the use
of any major appliance, including a stove or grill, which uses the types or fuel source of energy
production which may be used, delivered, converted, or supplied by:
Investor-owned electric utilities;
Municipal electric utilities;
Rural electric cooperatives;
Entities formed by interlocal agreement to generate, sell, and transmit electrical energy;
Investor-owned gas utilities;
Gas districts;
Municipal natural gas utilities;
Natural gas transmission companies; and
Certain propane dealers, dispensers, and gas cylinder exchange operators.
39 S. 366.04(3)(c), F.S.
40 Florida Public Service Commission, Facts & Figures of the Florida Utility Industry, supra at. n. 35, p. 13.
41 S. 527.01(1), F.S.
42 This category also includes “any person leasing or offeringto lease, or exchanging or offering to exchange, any
apparatus, appliances, and equipment for the use of liquefied petroleum gas; any person installing, servicing, altering, or
modifying apparatus, piping, tubing, appliances, and equipment for the use of liquefied petroleum or natural gas; any
person installing carburetion equipment; or any person requalifying cylinders.” S. 527.01(6), F.S.
43 S. 527.01(7), F.S.
44 S. 527.01(8), F.S.
45 Deppisch, Breanne, Gas stove bans are advancing around the country — here's the rundown, Washington Examiner
(Jan. 12, 2023), available at https://www.washingtonexaminer.com/policy/energy -environment/gas-stove-bans-rundown
(last visited Mar. 14, 2023).
46 Elizabeth Weise, Gas stove bans explained: Are natural gas stoves actually a 'hazard'? Why are they suddenly
controversial? USA Today (Feb.1, 2023), https://www.usatoday.com/story/news/2023/02/01/gas -stove-bans-explained-
controversy-over-health-climate/11126667002/ (last visited Mar. 14, 2023).
47 Id.
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The bill provides an exception for circumstances in which the political subdivision must enforce the
Florida Building Code or the Florida Fire Prevention Code.
Under the bill, a board of a municipality or governmental entity is not prevented from adopting rules,
regulations, and policies governing an electric or natural gas utility that it owns or operates and directly
controls.
The bill provides an effective date of July 1, 2023.
B. SECTION DIRECTORY:
Section 1: Amends s. 366.032, relating to preemption over utility service restrictions.
Section 2: Provides an effective date.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
None.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not Applicable. This bill does not appear to require counties or municipalities to spend funds or take
action requiring the expenditures of funds; reduce the authority that counties or municipalities have
to raise revenues in the aggregate; or reduce the percentage of state tax shared with counties or
municipalities.
2. Other:
None.
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B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
The bill uses the term “major appliance,” but this term is not defined beyond identifying stoves and
grills.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On March 13, 2023, the Energy, Communications & Cybersecurity Subcommittee adopted one amendment
to the bill and reported the bill favorably as a committee substitute. The amendment created an exception
to the bill’s preemption provisions so that political subdivisions may take actions necessary to enforce the
Florida Building Code and the Florida Fire Prevention Code.
This analysis is drafted to the committee substitute as passed by the Energy, Communications &
Cybersecurity Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 1281 2023
1 A bill to be entitled
2 An act relating to preemption over utility service
3 restrictions; amending. s. 366.032, F.S.; prohibiting
4 certain local governmental entities, subject to
5 specified exceptions, from enacting or enforcing a
6 resolution, ordinance, rule, code, or policy or from
7 taking any action that restricts or prohibits or has
8 the effect of restricting or prohibiting the use of
9 any major appliances; revising an exception to
10 preemption; providing an effective date.
11
12 Be It Enacted by the Legislature of the State of Florida:
13
14 Section 1. Subsections (2) through (4) of section 366.032,
15 Florida Statutes, are renumbered as (3) through (5),
16 respectively, subsection (1) and present subsection (2) are
17 amended, and a new subsection (2) is added to that section, to
18 read:
19 366.032 Preemption over utility service restrictions.—
20 (1) A municipality, county, special district, or other
21 political subdivision of the state may not enact or enforce a
22 resolution, ordinance, rule, code, or policy or take any action
23 that restricts or prohibits or has the effect of restricting or
24 prohibiting the types or fuel sources of energy production which
25 may be used, delivered, converted, or supplied by the following
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CODING: Words stricken are deletions; words underlined are additions.
hb1281-01-c1
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 1281 2023
26 entities to serve customers that such entities are authorized to
27 serve:
28 (a) A public utility or an electric utility as defined in
29 this chapter;
30 (b) An entity formed under s. 163.01 that generates,
31 sells, or transmits electrical energy;
32 (c) A natural gas utility as defined in s. 366.04(3)(c);
33 (d) A natural gas transmission company as defined in s.
34 368.103; or
35 (e) A Category I liquefied petroleum gas dealer or
36 Category II liquefied petroleum gas dispenser or Category III
37 liquefied petroleum gas cylinder exchange operator as defined in
38 s. 527.01.
39 (2) Except to the extent necessary to enforce the Florida
40 Building Code adopted pursuant to s. 553.73 or the Florida Fire
41 Prevention Code adopted pursuant to s. 633.202, a municipality,
42 county, special district, or other political subdivision of the
43 state may not enact or enforce a resolution, ordinance, rule,
44 code, or policy or take any action that restricts or prohibits
45 or has the effect of restricting or prohibiting the use of any
46 major appliances, including a stove or grill, which uses the
47 types or fuel sources of energy production which may be used,
48 delivered, converted, or supplied by the entities listed in
49 subsection (1).
50 (3)(2) Notwithstanding the restrictions of this section,
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hb1281-01-c1
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 1281 2023
51 this section does not prevent the board of a municipality or
52 governmental entity which owns or operates and directly controls
53 an electric or natural gas utility, from passing rules,
54 regulations, or policies governing the utility.
55 Section 2. This act shall take effect July 1, 2023.
Page 3 of 3
CODING: Words stricken are deletions; words underlined are additions.
hb1281-01-c1
Commerce Committee
CS/HB 1281 by Rep. Buchanan
Preemption Over Utility Service Restrictions
AMENDMENT SUMMARY
April 17, 2023
Amendment 1 by Rep. Buchanan (line 43):
• Provides a definition for the term “appliance.”
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1281 (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: Commerce Committee
2 Representative Buchanan offered the following:
3
4 Amendment (with title amendment)
5 Remove lines 43-49 and insert:
6 state may not enact or enforce a resolution, an ordinance, a
7 rule, a code, or a policy or take any action that restricts or
8 prohibits or has the effect of restricting or prohibiting the
9 use of an appliance, including a stove or grill, which uses the
10 types or fuel sources of energy production which may be used,
11 delivered, converted, or supplied by the entities listed in
12 subsection (1). As used in this subsection, the term "appliance"
13 means a device or apparatus manufactured and designed to use
14 energy and for which the Florida Building Code or the Florida
15 Fire Prevention Code provides specific requirements.
16
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Page 1 of 2
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1281 (2023)
Amendment No. 1
17 -----------------------------------------------------
18 T I T L E A M E N D M E N T
19 Remove lines 6-10 and insert:
20 resolution, an ordinance, a rule, a code, or a policy or from
21 taking any action that restricts or prohibits or has the effect
22 of restricting or prohibiting the use of appliances; revising an
23 exception to preemption; defining the term "appliance";
24 providing an effective date.
502129 - h1281-line43.docx
Published On: 4/14/2023 5:56:14 PM
Page 2 of 2
CS/HB 1307
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 1307 Department of Agriculture and Consumer Services
SPONSOR(S): Criminal Justice Subcommittee, McClure
TIED BILLS: IDEN./SIM. BILLS: SB 1150
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform & Economic Development 11 Y, 0 N Thompson Anstead
Subcommittee
2) Criminal Justice Subcommittee 16 Y, 0 N, As CS Padgett Hall
3) Commerce Committee Thompson Hamon
SUMMARY ANALYSIS
The Division of Licensing (DOL) within the Department of Agriculture and Consumer Services (DACS)
administers Florida's concealed weapon licensing program and oversees Florida's private investigative, private
security, and recovery services industries. The Division of Consumer Services (DCS) within DACS regulates
various businesses, such as charitable organizations and telemarketers, and protects consumers and
businesses from unfair and unsafe business practices across a wide range of industries, including gasoline,
liquefied petroleum (LP) gas, and weighing and measuring devices.
The bill streamlines licensure requirements and reduces fees related to the private investigative, private
security, and recovery services industries; relaxes certain registration fee requirements for charitable
organizations; revises services that certain LP gas licensees are authorized to conduct; and provides criminal
penalties for retail fuel theft violations. In part, the bill:
Allows former military firearms instructors to use their experience in the military to satisfy a firearm
training requirement when applying for a Class “K” Firearms Instructor License.
Allows Class “K” Firearms Instructor teaching experience to replace the license renewal training.
Allows DACS to waive the annual firearms training for Class “G” Statewide Firearm Licensees who
provide proof of annual training under the federal Law Enforcement Officers’ Safety Act.
Gives DACS more flexibility when charging late fees for renewal applications.
Allows DACS to publish the private investigative, private security, and recovery industry newsletters
and pamphlets online.
Authorizes electronic verification, instead of verification under oath, for certain recovery agent and
security guard applications for licensure.
Relaxes annual registration fees for charitable organizations that are not in higher revenue categories.
Expands the types of services that licensed Category I LP Gas Dealers and Category V LP Gas
Dealers may provide to include the “design” of LP gas equipment.
Creates provisions that address retail fuel theft and tampering with gas pumps, including prohibitions,
seizure and forfeiture requirements, and criminal penalties.
The bill may have an insignificant fiscal impact on state government from reduced expenditures and potential
increases in revenues. The bill is not expected to have a fiscal impact on local governments.
The effective date of the bill is 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:
Division of Licensing
The Division of Licensing (DOL) within the Department of Agriculture and Consumer Services (DACS)
administers Florida's concealed weapon licensing program 1 and oversees Florida's private
investigative, private security, and recovery services industries.2 The DOL’s regulatory oversight of
those services includes licensing, enforcing compliance standards, and ensuring public protection from
unethical business practices and unlicensed activity. 3
Private Investigative and Security Services
Currently, the DOL offers 22 different types of private investigative, private security, and recovery
services licenses and four different types of concealed weapon or firearm licenses. As of February 28,
2023, the DOL had issued a total of 169,758 private investigative, private security, and recovery
services licenses and 2,459,530 concealed weapon permits, to qualified applicants. The following chart
provides a breakdown of the total number of each license type. 4
License Type License Title Total
C Private Investigators 7,240
CC Private Investigator Interns 1,496
A Private Investigative Agencies 2,721
AA Private Investigative Agency Branch Offices 22
MA Private Investigative Agency Managers 86
M Private Investigative/Security Agency 475
Managers
D Security Officers 144,151
B Security Agencies 2,064
BB Security Agency Branch Offices 184
MB Security Managers 1,551
AB Security Agency/Private Investigative Agency 19
Branch Offices
DS Security Officer Schools 427
DI Security Officer Instructors 1,874
G Statewide Firearm Licenses 27,363
K Firearms Instructors 676
E Recovery Agents 786
EE Recovery Agent Interns 327
R Recovery Agencies 296
RR Recovery Agency Branch Offices 31
MR Recovery Agency Managers 3
RS Recovery Agent Schools 6
RI Recovery Agent Instructors 8
Subtotal of Private Investigative, Private Security, and Recovery Services 191,806
Licenses
W Concealed Weapon or Firearm 2,645,444
WJ Concealed Weapon or Firearm/Circuit and 827
1 S. 790.06, F.S.
2 Ch. 493, F.S.
3 Office of Program Policy Analysis and Government Accountability, Government Program Summaries, Department of Agriculture
and Consumer Services Licensing, https://oppaga.fl.gov/ProgramSummary/ProgramDetail?programNu mber=4101 (last visited Mar.
16, 2023).
4 The Florida Department of Agriculture and Consumer Services, Division of Licensing Statistical Reports,
https://www.fdacs.gov/Divisions -Offices/Licensing/Statistical-Reports (last visited Mar. 16, 2023).
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County Judges
WR Concealed Weapon or Firearm/Retired Law 13,680
Enforcement and Correctional Officers
WS Concealed Weapon or Firearm/Consular 10
Security Official
Subtotal of Concealed Weapon Licenses 2,659,961
Total Number of Licenses 2,851,767
Class “G” Statewide Firearm License
A Class “G” Statewide Firearm License is a supplemental license that permits specific licensees to
carry a firearm during the course of their licensed, employment-related activity. A Class “G” Statewide
Firearm License is available only to individuals who currently hold one of the following licenses:5
Private investigator (Class “C”);
Private investigator intern (Class “CC”);
Security officer (Class “D”);
Private investigative or security agency manager (Class “M”);
Private investigative agency manager (Class “MA”); or
Security agency manager (Class “MB”).
Class “G” Statewide Firearm License Application and Training Requirements
An initial applicant for a Class “G” Statewide Firearm License must complete firearm training, which
must include at least 28 hours of range and classroom training either by in-person instruction, or via live
instruction through a secure website, with no more than eight hours consisting of in-person range
training, which must include safe handling and storage of firearms. The training must be administered
and taught by a Class “K” Firearms Instructor Licensee who verifies the identity and attendance of the
applicant.6
The Class “G” Statewide Firearm License applicant must submit a training certificate to DACS upon
completion of the training. Additionally, the Class “K” Firearms Instructor Licensee who provides the
training must submit results directly to the DOL and provide a copy of the training results to the
trainee.7 An applicant who was discharged from service as a military officer within the last 12 months,
and who has completed specific military courses is deemed to have completed a substantially similar
training, and is exempt from the 28 hours of range and classroom training required for an initial Class
“G” Statewide Firearm License.8
The “Class G” Statewide Firearm License must be renewed every two years.9 Class “G” Statewide
Firearm Licensees must annually complete four hours of firearms requalification training for each
caliber of firearm that he or she carries in the course of his or her duties.10 DACS is authorized to waive
the firearms training requirement if:11
The applicant provides proof showing he or she is currently certified as a law enforcement
officer or correctional officer under the Criminal Justice Standards and Training Commission
and has completed law enforcement firearms requalification training annually during the
previous two years of the licensure period;
The applicant provides proof that he or she is currently certified as a federal law enforcement
officer and has received law enforcement firearms training administered by a federal law
enforcement agency annually during the previous two years of the licensure period; or
5 S. 493.6115(2), F.S.
6 S. 493.6105(5), F.S. See also R. 5N-1.132(1)(a), F.A.C.
7 Id.
8 R. 5N-1.119, F.A.C.
9 S. 493.6113(1), F.S.
10 S. 493.6113(3)(b ), F.S.
11 Id.
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The applicant submits one of the valid firearm certificates required for a Class “K” Firearms
Instructor initial license and provides proof of having completed requalification training during
the previous two years of the licensure period.
Class “K” Firearms Instructor License Application and Training Requirements
Class “K” Firearms Instructor Licensees provide classroom or range instruction to applicants for a Class
“G” Statewide Firearm License.12 Applicants for an initial Class “K” Firearms Instructor License must
submit one of the following certificates to demonstrate continued firearms qualifications:13
The Florida Criminal Justice Standards and Training Commission Instructor Certificate and
written confirmation by the commission that the applicant possesses an active firearms
certificate.
A valid National Rifle Association Private Security Firearm Instructor Certificate issued not more
than three years before the submission of the application.
A valid firearms instructor certificate issued by a federal law enforcement agency issued not
more than three years before the submission of the application.
The initial applicant must also pay the fee and pass an examination administered by DACS.14
Class “K” Firearms Instructor Licensees must renew their license every three years 15 and submit one of
the firearms qualification certificates, required for initial licensure, as proof that he or she remains
certified to provide firearms instruction.16 A Class “K” Firearms Instructor Licensee who fails to file a
renewal application on or before its expiration must renew the license by fulfilling all renewal application
requirements and pay a late fee equal to the amount of the Class “K” Firearms Instructor fee.17
License Renewal Late Fee
Failure of a private investigative, private security, or recovery services licensee to renew a license on or
before its expiration requires the licensee to:
Renew his or her license by fulfilling the applicable renewal requirements; and
Pay a late fee equal to the amount of the license fee.18
Recovery Agent and Security Officer School or Training Facility
Any school, training facility, or instructor who offers training for Class “E” Recovery Agents, Class “EE”
Recovery Agent Interns, or Class “D” Security Officers, must file an application containing certain
information with DACS along with an application fee of up to $60. The application must be signed and
verified by the applicant “under oath” as provided in s. 92.525, F.S., which authorizes documents to be
verified in the following three ways:
Under oath or affirmation taken or administered before a judge, clerk or deputy clerk of court, or
any notary public;
Under oath or affirmation taken or administered by law enforcement officer, correctional officer,
or traffic officer by electronic means or in the physical presence of the affiant; or
By signing a written declaration.19
However, since the law specifies that applications must be verified “under oath,” the law does not allow
for electronic verification of applications.
12 Ss. 493.6101(14) and 493.6115(7), F.S.
13 S. 493.6105(6)(a), F.S.
14 S. 493.6105(6)(b ), F.S.
15 S. 493.6113(1), F.S.
16 S. 493.6113(3)(d ), F.S.
17 S. 493.6113(4), F.S.
18 S. 493.6113(4), F.S.
19 S. 493.6304(2) and 493.6406(2), F.S.
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Publication to the Industry
DACS is authorized to periodically publish newsletters and pamphlets advising private investigative,
private security, and recovery services licensees of certain information that is of interest to the industry
as well as the legal authority, rights, and obligations for various classes of licensure. The newsletter
also contains administrative complaints against licensed or unlicensed persons or agencies. The
newsletter must be published between two to four times annually, while the pamphlet must be updated
every two years as necessary.20
Division of Consumer Services
The Division of Consumer Services (DCS) within DACS is the state’s clearinghouse for consumer
complaints, information and protection. The DCS regulates various businesses, such as charitable
organizations and telemarketers. In addition, the DCS protects consumers and businesses from unfair
and unsafe business practices across a wide range of industries, including antifreeze, brake fluid,
gasoline, liquefied petroleum (LP) gas, pesticides, water vending machines, and weighing and
measuring devices.21
Charitable Organization Fees
Organizations that intend to solicit donations in Florida are required to register with DACS pursuant to
the Solicitation of Contributions Act (Act).22 The Act contains basic registration, financial disclosures,
and notification requirements for charitable organizations and sponsors, fundraising consultants, and
solicitors. Every charitable organization, sponsor, 23 or parent organization24 must pay a single
registration fee as follows:25
Ten dollars if the contributions:
o Received for the last fiscal year were less than $5,000; or
o Actually raised or received from the public during the immediately preceding fiscal year
are no more than $25,000 and the fundraising activities are carried on by certain entities
who are not compensated.
Seventy-five dollars if the contributions received for the last fiscal year were $5,000 or more, but
less than $100,000.
One hundred twenty-five dollars if the contributions received for the last fiscal year were
$100,000 or more but less than $200,000.
Two hundred dollars if the contributions received for the last fiscal year were $200,000 or more
but less than $500,000.
Three hundred dollars if the contributions received for the last fiscal year were $500,000 or
more but less than $1 million.
Three hundred fifty dollars if the contributions received for the last fiscal year were $1 million or
more but less than $10 million.
Four hundred dollars if the contributions received for the last fiscal year were $10 million or
more.
20 S. 493.6123(1), F.S.
21 Department of Agriculture and Consumer Services, http://www.freshfromflorida.com/Div isions -Offices/Consumer-Serv ices (last
visited Mar. 16, 2023).
22 See ch. 496, F.S.
23 S. 496.404(25), F.S., defines a “sponsor” as a group or person who holds herself or himself out to be soliciting contribution s by the
use of a name that implies the group or person is in any way affiliated with or organized for the benefit of emergency service
employees or law enforcement officers and the group or person is not a charitable organization.
24 S. 496.404(18), F.S., defines a “parent organization” as part of a charitable organization or sponsor that coordinates, supervises, or
exercises control over policy, fundraising, and expenditures or assists or advises one or more of the organization’s chapters , branches,
or affiliates in Florida.
25 S. 496.405(4)(a), F.S.
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Certain persons and organizations are exempt from the registration fee requirements including a
charitable organization that has less than $25,000 in total revenue so long as they did not employ
professional solicitors or have paid employees.26
Liquefied Petroleum Gas
The Bureau of Compliance within the DCS is responsible for regulating the LP gas industry, including
licensing, inspection, training, and examination requirements. 27 These responsibilities ensure that those
persons engaged in LP gas-related business activities in this state are trained and that compliance with
acceptable safety codes and standards is achieved statewide. 28
LP gas is defined in statute as any material composed predominantly of any of the following
hydrocarbons, or mixtures of the same:
Propane;
Propylene;
Butanes (normal butane or isobutane); and
Butylenes.29
Current law provides licensing requirements for businesses that engage in certain LP gas -related
activities, including sales, installations, service and repair work, manufacture of equipment, and other
miscellaneous activities. DACS is required to license applicants that it determines to be competent,
qualified, and trustworthy. Violations for willfully operating without a license are a third degree felony.30
The license categories and associated fees are as follows: 31
License Category Annual License Fee
Category I LP Gas Dealer $400
Category II LP Gas Dispenser $400
Category III LP Gas Cylinder Exchange Unit $65
Operator
Category IV Dealer in Appliances and $65
Equipment
Category V LP Gas Installer $200
Category VI Miscellaneous Operator $200
Licensees may renew their license annually, biennially, or triennially, and must meet the same
requirements and conditions, including fee amounts, for each licensed year. An expired license will
become inoperative, and the fee for restoration of an expired license is equal to the original license fee
and must be paid before the licensee is allowed to resume operations.32
DACS is responsible for enforcing reasonable standards of competency, including, but not limited to,
the training, licensure, testing, and qualifying of persons participating in the LP gas industry. 33 DACS is
also authorized to adopt rules that are:34
In the interest of public health, safety, and welfare and which promotes the safe handling of LP
gas, equipment, and systems; and
26 S. 496.406(1)(d), F.S.
27 See ch. 527, F.S.
28 Department of Agriculture and Consumer Services, LP Gas Training, https://www.fdacs.gov/Business -Services/LP-Gas-
Inspection/LP-Gas-Training (last visited Mar. 16, 2023).
29 S. 527.01(1), F.S.
30 S. 527.02, F.S. A third degree felony is punishable by up to five years imprisonment and a $5,000 fine. Ss. 775.082, 775.083, or
775.084, F.S.
31 Id.
32 S. 527.03, F.S.
33 S. 527.055(1)(b), F.S.
34 S. 527.06, F.S.
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Reasonably necessary to assure the competence of persons to safely engage in the business
of LP gas.
According to the DACs website, training is required for all employees of an LP gas-related business,
and refresher training must be conducted at three-year intervals.35 In addition, any person applying for
a license to engage in Category I LP Gas Dealer, Category II LP Gas Dispenser, or Category V LP Gas
Installer activities must prove competency by passing a written examination administered by DACS or
its agent.36
DACS is required to promulgate and enforce rules setting forth minimum general standards covering
the “design, construction, location, installation, and operation” of LP gas equipment.37 Currently, the
definitions for Category I LP Gas Dealers, and Category V LP Gas Installers, do not include the term
“design” in the description of services listed that such LP gas licensees are authorized to perform .38
According to DACS, the national industry standards of the National Fire Protection Association for the
storage and handling of LP gases as published in NFPA 58, Liquefied Petroleum Gas Code, 2020
Edition, which is adopted by rule, “contemplates that liquefied petroleum professionals can design such
systems within their expertise.”39
Gasoline and Oil Inspections
Current law governing gasoline and oil inspections in the state makes DACS responsible for monitoring
the accuracy of Florida's gas pumps, scales, price scanners, and other commercial weighing and
measuring devices to promote a fair and equitable marketplace and protect consumers. This includes
the inspection of retail gas stations to ensure that fuel dispensers are working safely and properly. 40
As part of these responsibilities, DACS is required to inspect all gas pumps used in selling or
distributing petroleum fuel at wholesale and retail, and affix a sticker to each gas pump signifying that
the device has been inspected and the owner is responsible for its proper use and maintenance. 41
A gas pump found to be operating outside the tolerances defined by DACS must be deemed inaccurate
and DACS is required to either:42
Give the owner or manager reasonable time to repair the measuring device; or
Condemn or prohibit the further use of the measuring device by using an appropriate security
seal.
It is unlawful to operate a gas pump that has been condemned or prohibited from further use without
the written consent of DACS. It is also unlawful to break, cut, or remove any seal applied by DACS to a
gas pump or container. The seal may be broken by a DACS registered meter mechanic to repair or
adjust a gas pump. However, after repairs and adjustments are complete, the adjusting mechanism
must immediately be resealed by the mechanic who must immediately notify DACS of this action.43
All persons and service agencies that repair or install gas pumps are required to register with DACS
and report to DACS when installing a gas pump.
Gas Pump Security Measures
35 Department of Agriculture and Consumer Services, LP Gas Training, https://www.fdacs.gov/Business -Services/LP-Gas-
Inspection/LP-Gas-Training (last visited Mar. 27, 2023).
36 S. 527.0201(1), F.S.
37 S. 527.06(2), F.S.
38 S. 527.01(6) and (10), F.S.
39 Florida Department of Agriculture and Consumer Services, Agency Analysis of 2023 Senate Bill 1150, p. 2 (Mar. 8, 2023).
40 Department of Agriculture and Consumer Services, Weights and Measures, https://www.fdacs.gov/Business -Services/Weights-and-
Measures (last visited Mar. 27, 2023).
41 S. 527.07(1), F.S.
42 S. 527.07(4), F.S.
43 S. 527.07(7), F.S.
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Gas pump owners and operators are required to have a security measuring device affixed or installed
on the gas pump to restrict the unauthorized access of customer payment card information. 44 The
security measure must include one or more of the following:
Pressure-sensitive security tape over the panel opening that leads to the scanning device to
restrict the unauthorized opening of the panel.
A device or system that will render the gas pump or scanning device in the gas pump
inoperable if there is an unauthorized opening of the panel.
A device or system that encrypts the customer payment card information.
A physical locking mechanism that requires an access key unique to each station to restrict the
unauthorized access of customer payment card information.
An alarm to alert the owner or operator if there is an unauthorized opening of the panel.
A daily inspection of each gas pump using an anti-skimmer application that detects wireless-
based skimmers.
A device or system that permits customers to use a contactless payment method.
Another security measure approved by DACS.
Effective January 1, 2022, gas pump owners and operators must have at least two of the security
measures affixed or installed on the gas pump. A gas pump without a security measure or with an
illegal skimming or filtering device or an altered or damaged security measure, upon discovery by
DACS, is prohibited from further use until the security measure is installed, replaced, or repaired.
DACS is authorized to take gas pumps that do not have the two security measures out of service until
compliance is restored, and may seize without warrant any skimming device for use as evidence. 45
The regulation of gas pumps is preempted to the state.46
Retail Theft
The chapter of Florida law governing theft, robbery, and related crimes, 47 defines “theft” as knowingly
obtaining, using, or attempting to obtain or use another's property, with the intent to permanently or
temporarily:
Deprive the person of the property, or
Appropriate the property to an unauthorized use.48
The penalties for theft depend on several factors, such as the amount stolen, the type of property or
services stolen, and the circumstances involved. Violations for theft offenses are characterized as
“grand theft” and “petit theft.”
The lowest level theft offense is petit theft of the second degree, which includes theft of property valued
at less than $100. Petit theft of the second degree is a second degree misdemeanor, 49 punishable by a
term of up to 60 days in jail and a $500 fine.50
The most serious level theft offense is grand theft of the first degree, which can include theft of property
valued at $100,000 or more, cargo valued at more than $50,000 which has entered interstate or
intrastate commerce, any grand theft in which the offender uses a getaway car, and any grand theft that
causes more than $1,000 worth of property damage. Grand theft of the first degree is a first degree
felony,51 punishable by a term of imprisonment of not more than 30 years and a fine up to $10,000. 52
44 S. 527.07(10), F.S.
45 Id.
46 Id.
47 See ch. 812, F.S.
48 S. 812.014(1), F.S.
49 S. 812.014(3)(a), F.S.
50 Ss. 775.082 and 775.083, F.S.
51 S. 812.014(2)(d) and (e), F.S.
52 Ss. 775.082 and 775.083, F.S.
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“Retail theft” is defined as “the taking possession of or carrying away of merchandise, 53 property,
money, or negotiable documents; altering or removing a label, universal product code, or price tag;
transferring merchandise from one container to another; or removing a shopping cart, with intent to
deprive the merchant54 of possession, use, benefit, or full retail value.” 55
It is a third degree felony to commit retail theft, if the property stolen is valued at $750 or more, and the
person individually or in concert with one or more other persons, commits retail theft in certain
situations.56
Seized or Forfeited Property
The Florida Contraband Forfeiture Act (FCFA)57 provides for the seizure and civil forfeiture of property
related to criminal and non-criminal violations of the law.58 Contraband and other property may be
seized when utilized during a violation of, or for the purpose of violating, the FCFA. Property
constituting a “contraband article” includes, but is not limited to the following items:59
Motor fuel upon which the motor fuel tax has not been paid as required by law;
Vehicles of any kind which was used or was attempted to be used as an instrumentality in the
commission of, or in aiding or abetting in the commission of, any felony; and
Personal property including equipment, which was used or was attempted to be used as an
instrumentality in the commission of, or in aiding or abetting in the commission of, any felony.
Currently, any contraband article, vessel, motor vehicle, aircraft, other personal property, or real
property used in violation of any provision of the FCFA, or in, upon, or by means of which any violation
of the FCFA has taken or is taking place, may be seized and forfeited. 60
Retail Fuel Theft (Pulsar Manipulation Devices)
According to reports, recently, fuel thieves have been caught using homemade devices to steal fuel
from retail gas pumps. Gas pumps are currently outfitted with a device called a pulsar that counts the
gallons being pumped. Criminals will break into the gas pump, install a device to manipulate or
reengineer the current pulsar, and allow fuel to flow without counting the gallons. This allows criminals
to pump fuel without being charged.61
In Hillsborough County, $60,000 worth of gasoline was stolen from two different gas stations by
individuals using the pulsar manipulation devices.62 In Lakeland, two individuals were caught while
filling up a large gas tank in the back of a pickup truck after accessing the inside of the fuel pump. 63
The use of these devices is not just an issue in Florida. It is happening in other states as well. The
Arizona Senate is considering a bill that would make the possession of a “pulsar manipulation device” a
53 “Merchandise” means “any personal property, capable of manual delivery, displayed, held, or offered for retail sale by a merc hant.”
S. 812.015(1)(a), F.S.
54 “Merchant” means “an owner or operator, or the agent, consignee, employee, lessee, or officer of a n owner or operator, of any
premises or apparatus used for retail purchase or sale of any merchandise.” S. 812.015(1)(b), F.S.
55 S. 812.015(1)(d), F.S.
56 S. 812.015(8), F.S.
57 See ss. 932.701-932.7062, F.S.
58 S. 932.701(1), F.S.
59 S. 932.701(2)(a)4., 5., and 7., F.S.,
60 S. 932.703(1)(a), F.S.
61 MCS Petroleum, Dispenser Security, https://mcspetroleum.com/security/ (last visited Mar. 16, 2023).
62 Matthew Impelli, Fuel Thieves Used ‘Homemade Device’ to Steal $60,000 in Gas, Police Say, Newsweek, April 4, 2022,
https://www.newsweek.com/fuel-thieves-used-homemade-device-steal-60000-gas-police-say-1694856 (last visited Mar. 16, 2023).
63 Catherine Hawley, Florida men accused of tampering with gas pumps, stealing fuel in Bay area, Fox 13 News, March 17, 2022,
https://www.fox13news.com/news/florida-men-accused-of-tampering-with-gas-pumps-stealing-fuel-in-bay-area (last visited Mar.16,
2023).
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class 3 felony.64 The bill defines the term pulsar manipulation device as “a mechanical or electronic
device that can manipulate the dispenser meter of a fuel pump.” 65
According to DACS:66
Possession of such devices is legal in Florida.
Law enforcement agencies throughout Florida continue to report pulsar compromises at gas
stations.
Law enforcement currently relies on a statute to prosecute fuel theft crimes that does not
address fuel pulsars.67
Effect of Proposed Changes
The bill streamlines licensure requirements and reduces fees related to the private investigative, private
security, and recovery services industries, including Class “G” Statewide Firearm Licenses and Class
“K” Firearms Instructors, reduces registration fees for certain charitable organizations, clarifies the
services that LP gas licensees are authorized to conduct, and provides criminal penalties for retail fuel
theft violations.
The bill authorizes former military firearms instructors to use their experience in the military to satisfy a
training requirement when applying for a Class “K” Firearms Instructor License. Specifically, the bill
allows applicants for a Class “K” Firearms Instructor License to submit a valid DD Form 214 issued by
the U.S. Department of Defense not more than three years before the submission of the applicant's
Class "K" application, indicating that the applicant has been honorably discharged and served no less
than three years in the military as a firearms instructor.
The bill authorizes DACS to waive the four-hour annual firearms training requirement for a Class “G”
Statewide Firearms License renewal if the applicant provides proof that he or she has completed
annual firearms training in accordance with the requirements of the federal Law Enforcement Officers
Safety Act.68
The bill authorizes a Class “K” Firearms Instructor Licensee who is renewing their license to provide
proof of having taught at least six 28-hour firearms instruction courses to Class “G” applicants during
the previous 3-year license period in lieu of having to provide proof of certification by the Florida
Criminal Justice Standards and Training Commission, the NRA, or a federal law enforcement agency.
The bill makes the automatic late fee for late filed private investigative, security, or recovery services
license renewal applications discretionary instead of mandatory.
The bill authorizes DACS to publish all information related to the private investigative, security, or
recovery services industry newsletter and pamphlet online in lieu of paper format.
The bill removes the requirement for Class “E” Recovery Agents, Class “EE” Recovery Agent Interns,
or Class “D” Security Officers to sign and verify their training application under oath, thereby allowing
such applications to be signed and verified electronically.
The bill increases the contribution thresholds that are used to determine the assessment and
exemption of registration fees for charitable organizations, sponsors, or parent organizations, which will
have the effect of lowering fees and registration requirements for such organizations that are not in the
higher income categories. Specifically, the bill:
64 Morgan Loew, Arizona Senate committee votes to outlaw fuel theft devices, 3TV/CBS 5, Feb. 3, 2023,
https://www.azfamily.com/ 2023/02/03/arizona-senate-committee-votes-outlaw-fuel-theft-devices/ (last visited Mar. 16, 2023).
65 AZ SB1177 (2023).
66 Florida Department of Agriculture and Consumer Services, Agency Analysis of 2023 Senate Bill 1150, p. 2 (Mar. 8, 2023).
67 S. 316.80, F.S.
68 See 18 U.S.C., ss. 926B-926C.
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Raises the $25,000 maximum contribution threshold to $50,000 for organizations that are
required to pay a $10 registration fee. Currently, organizations with maximum contributions
between $25,000 and $100,000 are required to pay a $75 registration fee.
Raises the $25,000 total revenue threshold to $50,000 for charitable organizations and
sponsors that are exempt from registration requirements.
The bill revises the definition of a Category I LP Gas Dealer to include any person who “designs” the
apparatus, piping, tubing, appliances, and equipment for the use of liquefied petroleum or natural gas.
The bill revises the definition of a Category V LP Gas Installer to include a person whose services
include the “design” of apparatus, piping, tubing, tanks, and equipment for the use of liquefied
petroleum or natural gas.
The bill creates criminal offenses relating to retail fuel theft as follows:
A person commits a third degree felony if he or she willfully, knowingly, and without
authorization:
o Breaches or accesses any internal portion of a retail fuel dispenser; or
o Possesses any device constructed for the purpose of fraudulently altering, manipulating,
or interrupting the normal functioning of a retail fuel dispenser.
A person commits a second degree felony69 if he or she willfully, knowingly, and without
authorization:
o Physically tampers with, manipulates, removes, replaces, or interrupts any mechanical
or electronic component located within the internal portion of a retail fuel dispenser; or
o Uses any form of electronic communication to fraudulently alter, manipulate, or interrupt
the normal functioning of a retail fuel dispenser.
A person commits a third degree felony if he or she:
o Obtains fuel as a result of violating any provision relating retail fuel theft in s. 812.0151,
F.S.; or
o Modifies a vehicle’s factory installed fuel tank or possesses any item used to hold fuel
which was not fitted to a vehicle or conveyance at the time of manufacture with the intent
to use such fuel tank or item to hold or transport fuel obtained by violating any provision
relating to retail fuel theft in s. 812.0151, F.S.
Under the bill, a person commits a third degree felony if he or she aids, abets, or assists a person in
violating any provision relating to retail fuel theft in s. 812.0151, F.S.
The bill provides that any conveyances, vehicles, fuel tanks, and other equipment used or intended to
be used in a violation of this section, and any fuel acquired in violation of this section, is subject to
seizure and forfeiture as provided by the Florida Contraband Forfeiture Act. Law enforcement agencies
that seize fuel must remove and reclaim, recycle, or dispose of all the fuel as soon as practicable in a
safe and proper manner. Upon conviction of a person arrested for a violation of retail fuel theft, the
judge must issue an order adjudging and declaring that all conveyances, vehicles, fuel tanks, and other
equipment that was used or intended to be used to commit a violation are forfeited and directing their
destruction, with the exception of the conveyance or vehicle.
The bill provides that any person convicted of a violation of retail fuel theft is responsible for the
following:
All reasonable costs incurred by the investigating law enforcement agency, including, but not
limited to cost for:
o The towing and storage of the conveyance or vehicle;
o Removal and disposal of the fuel; and
o Storage and destruction of all fuel tanks and other equipment described and used or
intended to be used in the violation.
69 A second degree felony is punishable by up to 15 years imprisonment and a $10,000 fine. Ss. 775.082, 775.083, or 775.084, F.S.
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Payment, to the party from whom it was fraudulently obtained, for the retail value of any
associated fuel at the time of the underlying act.
The bill defines the term "fuel" to include any of the following:
Alternative fuel as defined in s. 525.01, F.S.
Aviation fuel as defined in s. 206.9815, F.S.
Diesel fuel as defined in s. 206.86, F.S.
Gas as defined in s. 206.9925, F.S.
Motor fuel as defined in s. 206.01, F.S.
Natural gas fuel as defined in s. 206.9951, F.S.
Oil as defined in s. 206.9925, F.S.
Petroleum fuel as defined in s. 525.01, F.S.
Petroleum product as defined in s. 206.9925, F.S.
B. SECTION DIRECTORY:
Section 1: Amends s. 493.6105, F.S.; making a technical change; revising requirements for
applicants for a Class "K" license.
Section 2: Amends s. 493.6113, F.S.; revising the circumstances under which DACS may waive
firearms training requirements; revising requirements for applicants for a Class "K"
license; requiring the Division of Licensing to establish a specified late fee by rule.
Section 3: Amends s. 493.6123, F.S.; authorizing DACS to publish certain information online in lieu
of using a paper format.
Section 4: Amends s. 493.6304, F.S.; relating to security officer school or training facilities.
Section 5: Amends s. 493.6406, F.S.; relating to recovery agent school or training facilities.
Section 6: Amends s. 496.405, F.S.; revising requirements relating to registration fees for certain
charitable organizations, sponsors, and parent organizations.
Section 7: Amends s. 496.406, F.S.; relating to exemption from registration for charitable
organizations and sponsors.
Section 8: Amends s. 527.01, F.S.; revising the definitions of the terms "Category I liquefied
petroleum gas dealer" and "Category V LP gas installer."
Section 9: Creates s. 812.0151, F.S.; relating to retail fuel theft.
Section 10: Reenacts s. 366.032(1)(e), F.S.
Section 11: Reenacts s. 489.105(3)(m), F.S., F.S.
Section 12: Provides an effective date.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
See Fiscal Comments.
2. Expenditures:
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See Fiscal Comments.
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 economic impact on the private sector. The bill streamlines professional
licensure requirements, allows for reduced late fees for license renewals, reduces registration fee
requirements for charitable organizations, expands services that certain LP gas licensees may conduct,
and provides fuel theft protections for gas station owners and operators.
Class “K” Firearms Instructors may experience an indeterminate reduction in demand for their services
to the extent they will not be used due to the waiver of their annual firearms training for Class “G”
Statewide Firearms License renewals.
D. FISCAL COMMENTS:
The fiscal impact to the state is indeterminate. According to DACS, “the majority of the provisions of the
bill pose a negligible fiscal impact to the department based on the waiver and exemption of fees
proposed.”70
The creation of additional felony violations associated with retail fuel theft may cause an increase in
prison beds for the Department of Corrections. However, there are existing felony violations that are
currently being utilized where the new fuel theft offenses will be utilized. It is unknown how many new
violations will occur.
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:
Article VII, Section 19 of the Florida Constitution requires a supermajority vote to impose or raise a
tax or fee. Under this provision, “Raise” means:
a. “To increase or authorize an increase in the rate of a state tax or fee imposed on a
percentage or per mill basis;
b. To increase or authorize an increase in the amount of a state tax or fee imposed on a flat or
fixed amount basis; or
c. To decrease or eliminate a state tax or fee exemption or credit.”
The bill allows DACS to provide reduced late fees for certain license renewals. The bill also
increases the contribution thresholds that are used to determine the assessment and exemption of
registration fees for charitable organizations, which will have the effect of lowering fees for such
70 Florida Department of Agriculture and Consumer Services, Agency Analysis of 2023 Senate Bill 1150, p. 2 (Mar. 8, 2023).
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organizations. It is unclear as to whether this would constitute the “raising” of a fee as defined in Art.
VII s. 19.
B. RULE-MAKING AUTHORITY:
According to DACS, the DOL will need to create reasonable late fee requirements by administrative
rule. Current law provides sufficient rulemaking authority to implement the provisions of the bill.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On March 29, 2023, the Criminal Justice Subcommittee adopted an amendment and reported the bill favorably
as a committee substitute. The amendment made technical changes to reorganize and clarify provisions in the
bill relating to retail fuel theft.
This analysis is drafted to the committee substitute as passed by the Criminal Justice Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 1307 2023
1 A bill to be entitled
2 An act relating to the Department of Agriculture and
3 Consumer Services; amending s. 493.6105, F.S.; making
4 a technical change; revising requirements for
5 applicants for a Class "K" license; amending s.
6 493.6113, F.S.; revising the circumstances under which
7 the Department of Agriculture and Consumer Services
8 may waive firearms training requirements; revising
9 requirements for applicants for a Class "K" license;
10 requiring the Division of Licensing of the department
11 to establish a specified late fee by rule; amending s.
12 493.6123, F.S.; authorizing the department to publish
13 certain information online in lieu of using a paper
14 format; amending ss. 493.6304 and 493.6406, F.S.;
15 making technical changes; amending s. 496.405, F.S.;
16 revising requirements relating to registration fees
17 for certain charitable organizations, sponsors, and
18 parent organizations; amending s. 496.406, F.S.;
19 conforming provisions to changes made by the act;
20 amending s. 527.01, F.S.; revising the definitions of
21 the terms "Category I liquefied petroleum gas dealer"
22 and "Category V LP gas installer"; creating s.
23 812.0151, F.S.; defining the term "fuel"; providing
24 criminal penalties for certain actions relating to
25 retail fuel theft; requiring law enforcement agencies
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26 to remove and reclaim, recycle, or dispose of fuel in
27 a specified manner; requiring judges to enter a
28 specified order for persons convicted of violating
29 specified provisions; specifying that convicted
30 persons are responsible for certain costs and
31 payments; reenacting ss. 366.032(1)(e) and
32 489.105(3)(m), F.S., relating to preemption over
33 utility service restrictions and definitions,
34 respectively, to incorporate the amendments made by
35 this act to s. 527.01, F.S., in references thereto;
36 providing an effective date.
37
38 Be It Enacted by the Legislature of the State of Florida:
39
40 Section 1. Subsection (2) and paragraph (a) of subsection
41 (6) of section 493.6105, Florida Statutes, are amended to read:
42 493.6105 Initial application for license.—
43 (2) Each application must be signed and verified by the
44 applicant individual under oath as provided in s. 92.525.
45 (6) In addition to the requirements under subsection (3),
46 an applicant for a Class "K" license must:
47 (a) Submit one of the following:
48 1. The Florida Criminal Justice Standards and Trai ning
49 Commission Instructor Certificate and written confirmation by
50 the commission that the applicant possesses an active firearms
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51 certification.
52 2. A valid National Rifle Association Private Security
53 Firearm Instructor Certificate issued not more than 3 years
54 before the submission of the applicant's Class "K" application.
55 3. A valid firearms instructor certificate issued by a
56 federal law enforcement agency issued not more than 3 years
57 before the submission of the applicant's Class "K" application.
58 4. A valid DD Form 214 issued not more than 3 years before
59 the submission of the applicant's Class "K" application,
60 indicating that the applicant has been honorably discharged and
61 served no less than 3 years in the military as a firearms
62 instructor.
63 Section 2. Paragraphs (b) and (d) of subsection (3) and
64 subsection (4) of section 493.6113, Florida Statutes, are
65 amended to read:
66 493.6113 Renewal application for licensure.—
67 (3) Each licensee is responsible for renewing his or her
68 license on or before its expiration by filing with the
69 department an application for renewal accompanied by payment of
70 the renewal fee and the fingerprint retention fee to cover the
71 cost of ongoing retention in the statewide automated biometric
72 identification system established in s. 943.05(2)(b). Upon the
73 first renewal of a license issued under this chapter before
74 January 1, 2017, the licensee shall submit a full set of
75 fingerprints and fingerprint processing fees to cover the cost
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76 of entering the fingerprints into the statewide automated
77 biometric identification system pursuant to s. 493.6108(4)(a)
78 and the cost of enrollment in the Federal Bureau of
79 Investigation's national retained print arrest notification
80 program. Subsequent renewals may be completed without submission
81 of a new set of fingerprints.
82 (b) Each Class "G" licensee shall additionally submit
83 proof that he or she has received during each year of the
84 license period a minimum of 4 hours of firearms requalification
85 training taught by a Class "K" licensee and has complie d with
86 such other health and training requirements that the department
87 shall adopt by rule. Proof of completion of firearms
88 requalification training shall be submitted to the department
89 upon completion of the training. A Class "G" licensee must
90 successfully complete this requalification training for each
91 type and caliber of firearm carried in the course of performing
92 his or her regulated duties. If the licensee fails to complete
93 the required 4 hours of annual training during the first year of
94 the 2-year term of the license, the license shall be
95 automatically suspended. The licensee must complete the minimum
96 number of hours of range and classroom training required at the
97 time of initial licensure and submit proof of completion of such
98 training to the department before the license may be reinstated.
99 If the licensee fails to complete the required 4 hours of annual
100 training during the second year of the 2-year term of the
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101 license, the licensee must complete the minimum number of hours
102 of range and classroom training required at the time of initial
103 licensure and submit proof of completion of such training to the
104 department before the license may be renewed. The department may
105 waive the firearms training requirement if:
106 1. The applicant provides proof that he or she is
107 currently certified as a law enforcement officer or correctional
108 officer under the Criminal Justice Standards and Training
109 Commission and has completed law enforcement firearms
110 requalification training annually during the previous 2 years of
111 the licensure period;
112 2. The applicant provides proof that he or she is
113 currently certified as a federal law enforcement officer and has
114 received law enforcement firearms training administered by a
115 federal law enforcement agency annually during the previous 2
116 years of the licensure period; or
117 3. The applicant submits a valid firearm certificate among
118 those specified in s. 493.6105(6)(a) and provides proof of
119 having completed requalification training during the previous 2
120 years of the licensure period; or
121 4. The applicant provides proof that he or she has
122 completed annual firearms training in accordance with the
123 requirements of the federal Law Enforcement Officers Safety Act
124 under 18 U.S.C. ss. 926B-926C.
125 (d) Each Class "K" licensee shall additionally submit:
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126 1. One of the certificates specified under s. 493.6105(6)
127 as proof that he or she remains certified to provide firearms
128 instruction; or
129 2. Proof of having taught at least six 28-hour firearms
130 instruction courses to Class "G" applicants during the pre vious
131 3-year license period.
132 (4) A licensee who fails to file a renewal application on
133 or before its expiration must renew his or her license by
134 fulfilling the applicable requirements of subsection (3) and may
135 be required to pay by paying a late fee equal to the amount of
136 the license fee. The division shall establish the amount of the
137 late fee authorized under this subsection by rule; however, such
138 late fee may not exceed the amount of the license fee.
139 Section 3. Subsection (3) is added to section 493 .6123,
140 Florida Statutes, to read:
141 493.6123 Publication to industry.—
142 (3) The department may publish all information required by
143 this section online in lieu of using a paper format.
144 Section 4. Subsection (2) of section 493.6304, Florida
145 Statutes, is amended to read:
146 493.6304 Security officer school or training facility. —
147 (2) The application must shall be signed and verified by
148 the applicant under oath as provided in s. 92.525 and must
149 contain, at a minimum, the following information:
150 (a) The name and address of the school or training
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151 facility and, if the applicant is an individual, her or his
152 name, address, and social security or alien registration number.
153 (b) The street address of the place at which the training
154 is to be conducted.
155 (c) A copy of the training curriculum and final
156 examination to be administered.
157 Section 5. Subsection (2) of section 493.6406, Florida
158 Statutes, is amended to read:
159 493.6406 Recovery agent school or training facility. —
160 (2) The application must be signed and verified by the
161 applicant under oath as provided in s. 92.525 and must shall
162 contain, at a minimum, the following information:
163 (a) The name and address of the school or training
164 facility and, if the applicant is an individual, his or her
165 name, address, and social security or alien registration number.
166 (b) The street address of the place at which the training
167 is to be conducted or the street address of the Class "RS"
168 school offering Internet-based or correspondence training.
169 (c) A copy of the training curriculum and final
170 examination to be administered.
171 Section 6. Paragraph (a) of subsection (4) of section
172 496.405, Florida Statutes, is amended to read:
173 496.405 Registration statements by charitable
174 organizations and sponsors.—
175 (4)(a) Every charitable organization, sponsor, or parent
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176 organization filing on behalf of one or more chapters, branches,
177 or affiliates that is required to register under this section
178 must pay a single registration fee. A parent organization filing
179 on behalf of one or more chapters, branches, or affiliates shall
180 total all contributions received by the chapters, branches, or
181 affiliates included in the registration statement to determine
182 registration fees. Fees shall be assessed as follows:
183 1.a. Ten dollars, if the contributions received for the
184 last fiscal or calendar year were less than $5,000; or
185 b. Ten dollars, if the contributions actually raised or
186 received from the public during the immediately preceding fiscal
187 year by such organization or sponsor are no more than $50,000
188 $25,000 and the fundraising activities of such organization or
189 sponsor are carried on by volunteers, members, officers, or
190 permanent employees, who are not compensated, primarily to
191 solicit such contributions, provided no part of the assets or
192 income of such organization or sponsor inures to the benefit of
193 or is paid to any officer or member of such organization or
194 sponsor or to any professional fundraising consultant,
195 professional solicitor, or commercial co-venturer;
196 2. Seventy-five dollars, if the contributions received for
197 the last fiscal year were $5,000 or more, but less than
198 $100,000;
199 3. One hundred twenty-five dollars, if the contributions
200 received for the last fiscal year were $100,000 or more, but
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201 less than $200,000;
202 4. Two hundred dollars, if the contributions received for
203 the last fiscal year were $200,000 or more, but less than
204 $500,000;
205 5. Three hundred dollars, if the contributions received
206 for the last fiscal year were $500,000 or more, but less than $1
207 million;
208 6. Three hundred fifty dollars, if the contributions
209 received for the last fiscal year were $1 million or more, but
210 less than $10 million;
211 7. Four hundred dollars, if the contributions received for
212 the last fiscal year were $10 million or more.
213 Section 7. Paragraph (d) of subsection (1) of section
214 496.406, Florida Statutes, is amended to read:
215 496.406 Exemption from registration.—
216 (1) The following charitable organizations and sponsors
217 are exempt from the requirements of s. 496.405:
218 (d) A charitable organization or sponsor that has less
219 than $50,000 $25,000 in total revenue during a fiscal year if
220 the fundraising activities of such organization or sponsor are
221 carried on by volunteers, members, or officers who are not
222 compensated and no part of the assets or income of such
223 organization or sponsor inures to the benefit of or is paid to
224 any officer or member of such organization or sponsor or to any
225 professional fundraising consultant, professional solicitor, or
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226 commercial co-venturer. If a charitable organization or sponsor
227 that has less than $50,000 $25,000 in total revenue during a
228 fiscal year actually acquires total revenue equal to or in
229 excess of $50,000 $25,000, the charitable organization or
230 sponsor must register with the department as required by s.
231 496.405 within 30 days after the date the revenue reaches
232 $50,000 $25,000.
233 Section 8. Subsections (6) and (10) of section 527.01,
234 Florida Statutes, are amended to read:
235 527.01 Definitions.—As used in this chapter:
236 (6) "Category I liquefied petroleum gas dealer" means any
237 person selling or offering to sell by delivery or at a
238 stationary location any liquefied petroleum gas to the consumer
239 for industrial, commercial, or domestic use; any person leasing
240 or offering to lease, or exchanging or offering to exchange, any
241 apparatus, appliances, and equipment for the use of liquefied
242 petroleum gas; any person designing, installing, servicing,
243 altering, or modifying apparatus, piping, tubing, appliances,
244 and equipment for the use of liquefied petroleum or natural gas;
245 any person installing carburetion equipment; or any person
246 requalifying cylinders.
247 (10) "Category V LP gas installer" means any person who is
248 engaged in the liquefied petroleum gas business and whose
249 services include the design, installation, servicing, altering,
250 or modifying of apparatus, piping, tubing, tanks, and equipment
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251 for the use of liquefied petroleum or natural gas and selling or
252 offering to sell, or leasing or offering to lease, apparatus,
253 appliances, and equipment for the use of liquefied petroleum or
254 natural gas.
255 Section 9. Section 812.0151, Florida Statutes, is created
256 to read:
257 812.0151 Retail fuel theft.—
258 (1) As used in this section, the term "fuel" has the same
259 meaning as in s. 163.3206(2).
260 (2)(a) A person commits a felony of the third degree,
261 punishable as provided in s. 775.082, s. 775.083, or s. 775.084,
262 if he or she willfully, knowingly, and without authorization:
263 1. Breaches a retail fuel dispenser or accesses any
264 internal portion of a retail fuel dispenser; or
265 2. Possesses any device constructed for the purpose of
266 fraudulently altering, manipulating, or interrupting the normal
267 functioning of a retail fuel dispenser.
268 (b) A person commits a felony of the second degree,
269 punishable as provided in s. 775.082, s. 775.083, or s. 775.084,
270 if he or she willfully, knowingly, and without authorization:
271 1. Physically tampers with, manipulates, removes,
272 replaces, or interrupts any mechanical or electronic component
273 located within the internal portion of a retail fuel dispense r;
274 or
275 2. Uses any form of electronic communication to
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276 fraudulently alter, manipulate, or interrupt the normal
277 functioning of a retail fuel dispenser.
278 (c) A person commits a felony of the third degree,
279 punishable as provided in s. 775.082, s. 775.083, or s. 775.084,
280 if he or she:
281 1. Obtains fuel as a result of violating paragraph (a) or
282 paragraph (b); or
283 2. Modifies a vehicle's factory installed fuel tank or
284 possesses any item used to hold fuel which was not fitted to a
285 vehicle or conveyance at the time of manufacture with the intent
286 to use such fuel tank or item to hold or transport fuel obtained
287 as a result of violating paragraph (a) or paragraph (b).
288 (3) Any person who aids, abets, or assists a person in
289 committing a violation of this section commits a felony of the
290 third degree, punishable as provided in s. 775.082, s. 775.083,
291 or s. 775.084.
292 (4) Any conveyances, vehicles, fuel tanks, and other
293 equipment used or intended to be used in a violation of this
294 section, and any fuel acquired in a violation of this section,
295 is subject to seizure and forfeiture as provided by the Florida
296 Contraband Forfeiture Act.
297 (5) A law enforcement agency that seizes fuel under this
298 section must remove and reclaim, recycle, or dispose of all the
299 fuel as soon as practicable in a safe and proper manner.
300 (6) Upon conviction of a person arrested for a violation
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301 of this section, the judge must issue an order adjudging and
302 declaring that all conveyances, vehicles, fuel tanks, and other
303 equipment used or intended to be used in a violation of this
304 section are forfeited and directing their destruction, with the
305 exception of the conveyance or vehicle.
306 (7) Any person convicted of a violation of this section is
307 responsible for both of the following:
308 (a) All reasonable costs incurred by the investigating law
309 enforcement agency, including, but not limited to, the costs for
310 the towing and storage of the conveyance or vehicle, the removal
311 and disposal of the fuel, and the storage and destruction of all
312 fuel tanks and other equipment described and used or intended to
313 be used in a violation of this section.
314 (b) Payment, to the party from whom it was fraudulently
315 obtained, for the retail value of any associated fuel at the
316 time of the underlying act.
317 Section 10. For the purpose of incorporating the
318 amendments made by this act to section 527.01, Florida Statutes,
319 in a reference thereto, paragraph (e) of subsection (1) of
320 section 366.032, Florida Statutes, is reenacted to read:
321 366.032 Preemption over utility service restrictions.—
322 (1) A municipality, county, special district, or other
323 political subdivision of the state may not enact or enforce a
324 resolution, ordinance, rule, code, or policy or take any action
325 that restricts or prohibits or has the effect of restricting or
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326 prohibiting the types or fuel sources of energy production which
327 may be used, delivered, converted, or supplied by the following
328 entities to serve customers that such entities are authorized to
329 serve:
330 (e) A Category I liquefied petroleum gas dealer or
331 Category II liquefied petroleum gas dispenser or Category III
332 liquefied petroleum gas cylinder exchange operator as defined in
333 s. 527.01.
334 Section 11. For the purpose of incorporating the
335 amendments made by this act to section 527.01, Florida Statutes,
336 in a reference thereto, paragraph (m) of subsection (3) of
337 section 489.105, Florida Statutes, is reenacted to read:
338 489.105 Definitions.—As used in this part:
339 (3) "Contractor" means the person who is qualified for,
340 and is only responsible for, the project contracted for and
341 means, except as exempted in this part, the person who, for
342 compensation, undertakes to, submits a bid to, or does himself
343 or herself or by others construct, repair, alter, remodel, add
344 to, demolish, subtract from, or improve any building or
345 structure, including related improvements to real estate, for
346 others or for resale to others; and whose job scope is
347 substantially similar to the job scope described in one of the
348 paragraphs of this subsection. For the purposes of regulation
349 under this part, the term "demolish" applies only to demolition
350 of steel tanks more than 50 feet in height; towers more than 50
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351 feet in height; other structures more than 50 feet in height;
352 and all buildings or residences. Contractors are subdivided into
353 two divisions, Division I, consisting of those contractors
354 defined in paragraphs (a)-(c), and Division II, consisting of
355 those contractors defined in paragraphs (d)-(q):
356 (m) "Plumbing contractor" means a contractor whose
357 services are unlimited in the plumbing trade and includes
358 contracting business consisting of the execution of contracts
359 requiring the experience, financial means, knowledge, and skill
360 to install, maintain, repair, alter, extend, or, if not
361 prohibited by law, design plumbing. A plumbing contracto r may
362 install, maintain, repair, alter, extend, or, if not prohibited
363 by law, design the following without obtaining an additional
364 local regulatory license, certificate, or registration: sanitary
365 drainage or storm drainage facilities, water and sewer plant s
366 and substations, venting systems, public or private water supply
367 systems, septic tanks, drainage and supply wells, swimming pool
368 piping, irrigation systems, and solar heating water systems and
369 all appurtenances, apparatus, or equipment used in connection
370 therewith, including boilers and pressure process piping and
371 including the installation of water, natural gas, liquefied
372 petroleum gas and related venting, and storm and sanitary sewer
373 lines. The scope of work of the plumbing contractor also
374 includes the design, if not prohibited by law, and installation,
375 maintenance, repair, alteration, or extension of air-piping,
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376 vacuum line piping, oxygen line piping, nitrous oxide piping,
377 and all related medical gas systems; fire line standpipes and
378 fire sprinklers if authorized by law; ink and chemical lines;
379 fuel oil and gasoline piping and tank and pump installation,
380 except bulk storage plants; and pneumatic control piping
381 systems, all in a manner that complies with all plans,
382 specifications, codes, laws, and regulations applicable. The
383 scope of work of the plumbing contractor applies to private
384 property and public property, including any excavation work
385 incidental thereto, and includes the work of the specialty
386 plumbing contractor. Such contractor shall subcontract, with a
387 qualified contractor in the field concerned, all other work
388 incidental to the work but which is specified as being the work
389 of a trade other than that of a plumbing contractor. This
390 definition does not limit the scope of work of any specialty
391 contractor certified pursuant to s. 489.113(6) and does not
392 require certification or registration under this part as a
393 category I liquefied petroleum gas dealer, or category V LP gas
394 installer, as defined in s. 527.01, who is licensed under
395 chapter 527 or an authorized employee of a public natural gas
396 utility or of a private natural gas utility regulated by the
397 Public Service Commission when disconnecting and reconnecting
398 water lines in the servicing or replacement of an existing water
399 heater. A plumbing contractor may perform drain cleaning and
400 clearing and install or repair rainwater catchment systems;
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401 however, a mandatory licensing requirement is not established
402 for the performance of these specific services.
403 Section 12. This act shall take effect July 1, 2023.
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CS/HB 1317
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 1317 Local Regulation of Nonconforming or Unsafe Structures
SPONSOR(S): Regulatory Reform & Economic Development Subcommittee, Roach
TIED BILLS: IDEN./SIM. BILLS: CS/CS/SB 1346
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform & Economic Development 12 Y, 1 N, As CS Wright Anstead
Subcommittee
2) Local Administration, Federal Affairs & Special 16 Y, 0 N Roy Darden
Districts Subcommittee
3) Commerce Committee Wright Hamon
SUMMARY ANALYSIS
The Florida Building Codes Act requires a person, firm, or corporation that wishes to demolish any building to
first obtain a building permit from the local government. Some local governments in Florida have placed
additional requirements or restrictions on property owners when obtaining permits for the demolition of
buildings deemed historic.
The bill creates the “Resiliency and Safe Structures Act,” which provides that:
A “nonconforming structure" means a structure located in a coastal high-hazard area according to a
Flood Insurance Rate Map issued by the Federal Emergency Management Agency which does not
conform to the requirements for new construction issued by the National Flood Insurance Program.
A local government may not prohibit, restrict, or prevent the demolition of any nonconforming
structures, any structure determined to be unsafe by a local building official, or any structure ordered to
be demolished by a local government for any reason other than public safety, unless the structure is a
single-family home or individually listed on the National Register of Historic Places.
A local government may not impose or enforce any limitation or condition on the approval of a
replacement structure including a requirement for replication of the demolished structure, a limitation on
the size or height of the replacement structure, or the maintenance of any of the demolished structure's
elements.
A local government may not in any way limit the demolition of structures and buildings to which the act
is applicable or limit the development of a replacement structure in a way that would divest property
owners or developers of land use, zoning, or other land development rights for demolishing a structure
in accordance with the bill.
The bill has an indeterminate fiscal impact on local governments and does not appear to have a fiscal impact
on the state. See Fiscal Comments
The bill provides an effective date of upon becoming law.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Florida Building Code
In 1974, Florida adopted legislation requiring all local governments to adopt and enforce a minimum
building code. In 1992, Hurricane Andrew demonstrated that Florida’s system of local codes did not
work and a study was commissioned to make recommendations. In 1998, the Legislature adopted the
recommendations for a single state building code and enhanced the oversight role of the state over
local code enforcement. The 2000 Legislature authorized implementation of the Florida Building Code
(Building Code), and that first edition replaced all local codes on March 1, 2002.1 The current edition of
the Building Code is the seventh edition, which is referred to as the 2020 Florida Building Code.2
Chapter 553, part IV, F.S., is known as the “Florida Building Codes Act” (FBCA). The Act provides a
mechanism for the uniform adoption, updating, interpretation, and enforcement of a single, unified state
building code. The Building Code must be applied, administered, and enforced uniformly and
consistently from jurisdiction to jurisdiction.3
A local enforcement agency is an agency of local government with jurisdiction to make inspections of
buildings and to enforce the Building Code.4
Building code administrators are regulated by the Building Code Administrators and Inspectors Board
(BCAIB) within DBPR.5 A building code administrator, also known as a building official, is a local
government employee or a person contracted by a local government who supervises Building Code
activities, including plans review, enforcement, and inspection. 6
Demolition Permits
It is unlawful for a person, firm, or corporation to construct, erect, alter, repair, secure, or demolish any
building without first obtaining a building permit from the local government or from such persons as
may, by resolution or regulation, be directed to issue such permit, upon the payment of reasonable fees
as set forth in a schedule of fees adopted by the enforcing agency. 7
The FBCA provides that a local law, ordinance, or regulation may not prohibit or otherwise restrict the
ability of a private property owner to obtain a building permit to demolish his or her single-family
residential structure provided that:8
Such structure Is located in a coastal high-hazard area, moderate flood zone, or special flood
hazard area according to a Flood Insurance Rate Map issued by the Federal Emergency
1 The Florida Building Commission Report to the 2006 Legislature, Florida Department of Community Affairs, p. 4,
http://www.floridabuilding.org/fbc/2006_Legislature_Rpt_rev2.pdf (last visited Mar. 14, 2023).
2 Florida Building Commission Homepage, https://floridabuilding.org/c/default.aspx (last visited Mar. 14, 2023).
3 See s. 553.72(1), F.S.
4 S. 553.71(5), F.S.
5 See Ss. 120.569, 120.57(1)-(2), 468.605, 468.606, and 468.621, F.S.
6 S. 468.603(2), F.S.
7 S. 553.79(1), F.S.
8 S. 553.79(25)(a), F.S.
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Management Agency (FEMA) for the purpose of participating in the National Flood Insurance
Program;
The lowest finished floor elevation of such structure is at or below base flood elevation as
established by the Building Code or a higher base flood elevation as may be required by local
ordinance, whichever is higher; and
Such permit complies with all applicable Building Code, Fire Prevention Code, and local
amendments to such codes.
However, a local law, ordinance, or regulation may restrict demolition permits for a:9
Structure designated on the National Register of Historic Places;10
Privately owned single-family residential structure designated historic by a local, state, or
federal governmental agency on or before January 1, 2022; or
Privately owned single-family residential structure designated historic after January 1, 2022, by
a local, state, or federal governmental agency with the consent of its owner.
Permits for Property with a Historic Designation
Some local governments in Florida have adopted land development regulations that designate certain
older buildings to be historic. These local governments have placed restrictions on property owners
from obtaining permits for the demolition of older buildings that the local government has deemed
historic. Below are examples of such regulations:
Requiring a special demolition permit process, 11 and
Requiring new construction on the site of the demolished structure to be subject to certain
architectural regulations, related to:12
o The colors, pattern, and trim used in the building’s façade.
o The design of the roof.
o The proportions and relationships between doors and windows.
Proponents of these land development regulations argue that these regulations are needed to protect
Florida’s history and preserve Florida’s character and architectural style. 13 Opponents of these
regulations argue that these older buildings are damaged, do not meet the Building Code’s minimum
flood elevation requirements, which can make them dangerous and can be demolished for new
structures or buildings that meet the requirements of the current Building Code.14
There appear to be conflicts 15 in some areas related to whether older buildings that may be unsafe
should be demolished or be given time to be rehabilitated. Some argue that policies related to
demolition are having an effect on affordable housing.16
9 S. 553.79(25)(d), F.S.
10 The National Register of Historic Places is the federal government’s official list of historic places in the United States. The National
Historic Preservation Act of 1966 authorized the register, which is administered by the National Park Service. In order to be listed on the
register the owner of the property must not object. National Park Service, What is the National Register of Historic Places,
https://www.nps.gov/subjects/nationalregister/what-is-the-national-register.htm (last visited Mar. 13, 2023); National Park Service, How
to List a Property, https://www.nps.gov/subjects/nationalregister/how-to-list-a-property.htm (last visited Mar. 13, 2023).
11 Sec. 54-71., 54-125., Town of Palm Beach Code of Ordinances.
12 Sec. 54-122., Town of Palm Beach Code of Ordinances.
13
Miami Herald Editorial Board, Historic-home teardowns risk washing away Miami Beach’s character in a flood of cash, Miami Herald
(Jan. 11, 2022) https://www.miamiherald.com/opinion/editorials/article257198932.html (last visited Mar. 14, 2023).
14 Pedro Portal, Miami Beach older homes demolished in part b ecause of 'flood re quirements', Miami Herald (Jan. 9, 2022)
https://www.miamiherald.com/news/business/real-estate-news/article257166737.html (last visited Mar. 14, 2023); CBS Miami, Miami
Beach Waterfront Home Of Notorious Prohib ition-Era Gangster Al Capone Slated For Demolition,
https://miami.cbslocal.com/video/5955888-miami-beach-waterfront-home-of-notorious-prohibition-era-gangster-al-capone-slated-for-
demolition/ (last visited Mar. 14, 2023).
15 In November 2022, news reports indicated that there were “dozens of ongoing la wsuits that have recently been filed between
property owners and the City of Miami over attempts to demolish their properties. WLRN Miami | South Florida, After Surfside, Miami
changes rules to fast-track demolition. Affordab le housing is in the crosshairs, December 5, 2022, After Surfside, Miami changes rules
to fast-track demolition. Affordable housing is in the crosshairs | WLRN (last visited Mar. 16, 2023).
16 In 2022, approximately “48 buildings were demolished by city order, including 30 residential p roperties. In 2019, 52 buildings were
demolished by order of the city.” Id.
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In 2022, approximately “48 buildings were demolished by city order, including 30 residential properties.
In 2019, 52 buildings were demolished by order of the city.”
FEMA Flood Insurance Rate Map, Coastal High Hazard Area
In order to support the National Flood Insurance Program (NFIP), FEMA identifies, publishes, and
periodically updates flood hazard data nationwide. This data is provided to communities in the form of a
Flood Insurance Rate Map and Flood Insurance Study report, typically prepared in a countywide
format.17
Along the coast, the flood map has delineated coastal Special Flood Hazard Areas (SFHA), where the
source of flooding is from coastal hazards, such as storm surge and waves. FEMA scientists and
engineers work with other federal, state, regional, community, tribal, nonprofit, non-governmental, and
private-sector partners to determine flood hazards along the U.S. coastline. 18
Flood maps along the coasts show areas at high risk of flooding within the coastal SFHA. The coastal
SFHA has three flood hazard zones: Zones VE (which are unique to coastal areas), AE and AO. Zone
VE, also known as a Coastal High Hazard Area, is where wave action and fast-moving water can cause
extensive damage during a base flood event.19
New Construction Requirements in Coastal Flood Hazard Zones
When a community is participating in the NFIP, FEMA places requirements on any new construction
built in flood hazard areas. Generally, new construction in flood-prone areas must be:20
Designed and adequately anchored to prevent flotation, collapse, or lateral movement of the
structure resulting from hydrodynamic and hydrostatic loads, including the effects of buoyancy;
Constructed with materials resistant to flood damage;
Constructed by methods and practices that minimize flood damages; and
Constructed with electrical, heating, ventilation, plumbing, and air conditioning equipment and
other service facilities that are designed and/or located so as to prevent water from entering or
accumulating within the components during conditions of flooding.
Specific conditions for new construction in coastal flood hazard zones include requiring all new
construction to:21
Be located landward of the reach of mean high tide;
Be elevated on pilings and columns so that the bottom of the lowest horizontal structural
member of the lowest floor (excluding the pilings or columns) is elevated to or above the base
flood level;
Be elevated on pilings and columns so that the pile or column foundation and structure attached
thereto is anchored to resist flotation, collapse and lateral movement due to the effects of wind
and water loads acting simultaneously on all building components; and
Have the space below the lowest floor either free of obstruction or constructed with non-
supporting breakaway walls, open wood lattice-work, or insect screening intended to collapse
under wind and water loads without causing collapse, displacement, or other structural damage
to the elevated portion of the building or supporting foundation system.
o Such space may be used only for parking of vehicles, building access, or storage.
17 FEMA, Adoption of Flood Insurance Rate Maps b y Participating Communities, FEMA 495 January 2019 ,
https://www.fema.gov/sites/default/files/2020-07/fema_adoption-flood-insurance-rate-maps-participating-communities_bulletin.pdf (last
visited Mar. 13, 2023).
18 FEMA, Features of Flood Insurance Rate Maps in Coastal Areas, https://www.fema.gov/flood-maps/coastal/insurance-rate-maps (last
visited Mar. 13, 2023).
19 Id.
20 44 C.F.R. § 60.3(a)(3)
21 44 C.F.R. § 60.3(e)(3)-(5)
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When an NFIP-participating structure, in an SFHA, has “substantial damage” 22 for which the total cost
of repairs is 50 percent or more of the structure’s market value before a disaster occurred, regardless of
the cause of damage, the structure must undergo a “substantial improvement” and be brought into
compliance with current local floodplain-management regulations and the Building Code. The decision
and specific metrics used to determine if a structure is substantially damaged is made by the local
government.23
For example, the City of Naples determined that a substantial improvement means any combination of
repair, reconstruction, rehabilitation, addition, or improvement of a building or structure taking place
during a one-year period from the date of permit issuance, the cumulative cost of which equals or
exceeds 50 percent of the market value of the structure before the improvement or repair is started. If
the structure has sustained substantial damage, any repairs are considered substantial improvement
regardless of the actual repair work performed. Substantial improvement does not include:24
Any project for improvement of a building required to correct existing health, sanitary, or safety
code violations identified by the building official and that are the minimum necessary to assure
safe living conditions.
Any alteration of a historic structure provided that the alteration will not preclude the structure's
continued designation as a historic structure.
Effect of the Bill
The bill creates the “Resiliency and Safe Structures Act” (act) and provides the following definitions:
"Nonconforming structure" means a structure located in a coastal high-hazard area according to
a Flood Insurance Rate Map issued by the Federal Emergency Management Agency (FEMA)
which does not conform to the requirements for new construction issued by the National Flood
Insurance Program.
"Replacement structure" means a structure built on a property where a structure was
demolished or will be demolished.
Unless the structure is a single-family home or individually listed on National Register of Historic
Places, the bill provides that the act applies to the following structures (applicable structures):
Nonconforming structures in coastal high-hazard areas which fail to meet FEMA standards for
new construction.
Any structure determined to be unsafe by a local building official.
Any structure ordered to be demolished by a local government that has proper jurisdiction.
The bill provides that a local government may not prohibit, restrict, or prevent the demolition of any
applicable structure for any reason, other than public safety.
The bill provides that a local government may not impose or enforce any limitation or condition on the
approval of a replacement structure that replaces a demolished applicable structure, including a
requirement for replication of the demolished structure, a limitation on the size or height of the
replacement structure, or the maintenance of any of the demolished structure's elements.
Owners or developers of replacement structures are permitted to develop in accordance with all land
use, zoning, and other land development rights, whether established by law, ordinance, rule, regulation,
policy, development order, or any other act, without regard to any local government restrictions or
penalties resulting from the demolition of an applicable structure that may restrict development of a
replacement structure as a result of a local government order, a designation, a code enforcement
proceeding, or an ordinance.
The bill provides that the act applies prospectively and retroactively to any law adopted contrary to the
bill and its intent.
22 44 C.F.R. § 59.1
23 FEMA, FACT SHEET: “Sub stantial Damage” – What Does it Mean?, December 2, 2019, https://www.fema.gov/press -
release/20210318/fact-sheet-substantial-damage-what-does-it-mean (last visited Mar. 16, 2023).
24 Sec. 16-112., City of Naples Ordinances.
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The bill provides a that a municipality, county, special district, or political subdivision may not adopt or
apply a law, an ordinance, a rule, a regulation, a policy, a resolution, or any other act that in any way
limits the demolition of structures and buildings to which the act is applicable or limits the development
of a replacement structure in a way that would divest property owners or developers of land use,
zoning, or other land development rights for demolishing a structure in accordance with the bill. All
laws, ordinances, rules, regulations, policies, resolutions, and other acts of a municipality, county,
special district, or political subdivision to the contrary are void.
The bill provides an effective date of upon becoming law.
B. SECTION DIRECTORY:
Section 1: Creates s. 553.8991, F.S.; relating to demolition of nonconforming structures.
Section 2: Providing an effective date.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
There may be an increase in demolition permits, which may create an increase in permit revenue.
2. Expenditures:
See Fiscal Comments.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may allow more structures to be demolished and new structures to be built in their places,
which would increase development.
D. FISCAL COMMENTS:
Local governments may have to expend funds to process a possible increase in demolition permits.
The amount local governments will have to spend, if any, is indeterminate. However, local governments
are permitted by state law to collect fees to cover the cost of their expenses to enforce the Building
Code, which includes reviewing building permit applications.
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.
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2. Other:
None.
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On March 16, 2023, the Regulatory Reform & Economic Development Subcommittee adopted an
amendment and reported the bill favorably as a committee substitute. The committee substitute:
Provided that the bill does not apply to single-family homes or structures individually listed on the
National Register of Historic Places.
Removed the provision relating to demolition permits for single family homes.
This analysis is drafted to the committee substitute as passed by the Regulatory Reform & Economic
Development Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 1317 2023
1 A bill to be entitled
2 An act relating to local regulation of nonconforming
3 or unsafe structures; creating s. 553.8991, F.S.;
4 providing a short title; defining terms; providing
5 applicability; prohibiting local governments from
6 prohibiting, restricting, or preventing the demolition
7 of certain structures unless necessary for public
8 safety; requiring replacement structures to be
9 permitted to be developed in accordance with
10 applicable zoning codes and ordinances; providing an
11 exception; providing that owners and developers of
12 replacement structures are permitted to develop in
13 accordance with all land use, zoning, and other land
14 development rights; providing for retroactive
15 application; preempting regulation of the demolition
16 or replacement of certain structures to the state
17 under certain circumstances; providing an effective
18 date.
19
20 WHEREAS, it is of paramount importance to replace older,
21 unsafe, or nonconforming structures that are a threat to life
22 and safety with new, resilient buildings built to contemporary
23 building codes and standards, and
24 WHEREAS, nonconforming structures within coastal high -
25 hazard areas and structures ordered to be demolished or deemed
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 1317 2023
26 unsafe by local building officials pose an increased risk of
27 collapse, may affect the integrity or stability of neighboring
28 buildings or structures, and may cause injury to persons or
29 property, and
30 WHEREAS, local governmental laws, procedures, and policies
31 that prohibit or limit the demolition of nonconforming or unsafe
32 structures or limit the construction of new resilient structures
33 pose a threat to life and public safety, and
34 WHEREAS, on properties where there is a nonconforming
35 structure within a coastal high-hazard area, a structure that
36 has been deemed unsafe by a local building official, or a
37 structure that is subject to a demolition order, such structure
38 must be authorized to be demolished and any replacement
39 structure authorized which allows owners or developers to enjoy
40 all land use and development rights that would apply to the
41 property without regard to any local restrictions that may
42 restrict future development at the subject property as a result
43 of the local building official's order or demolition, and
44 WHEREAS, to make the application and enforcement of this
45 act uniform throughout this state, the Legislature intends to
46 preempt the regulation of the demolition of certain structures
47 and buildings to the state, NOW, THEREFORE,
48
49 Be It Enacted by the Legislature of the State of Florida:
50
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 1317 2023
51 Section 1. Section 553.8991, Florida Statutes, is created
52 to read:
53 553.8991 Resiliency and Safe Structures Act.—
54 (1) SHORT TITLE.—This section may be cited as the
55 "Resiliency and Safe Structures Act."
56 (2) DEFINITIONS.—As used in this section, the term:
57 (a) "Nonconforming structure" means a structure located in
58 a coastal high-hazard area according to a Flood Insurance Rate
59 Map issued by the Federal Emergency Management Agency (FEMA)
60 which does not conform to the requirements for new construction
61 issued by the National Flood Insurance Program.
62 (b) "Replacement structure" means a new structure built on
63 a property where a structure was demolished or will be
64 demolished in accordance with this section.
65 (3) QUALIFYING STRUCTURES AND BUILDINGS.—This section
66 applies to all of the following structures, unless the structure
67 is individually listed in the National Register of Historic
68 Places or is a single-family home:
69 (a) Nonconforming structures in coastal high-hazard areas
70 which fail to meet FEMA standards for new construction.
71 (b) Any structure determined to be unsafe by a local
72 building official.
73 (c) Any structure ordered to be demolished by a local
74 government that has proper jurisdiction.
75 (4) RESTRICTIONS ON DEMOLITION PROHIBITED.—A local
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 1317 2023
76 government may not prohibit, restrict, or prevent the demolition
77 of any structure identified in subsection (3) for any reason,
78 other than public safety.
79 (5) RESTRICTIONS ON REDEVELOPMENT PROHIBITED.—A
80 replacement structure must be permitted to be developed in
81 accordance with all applicable zoning codes and ordinances,
82 provided that the zoning codes and ordinances do not in any way
83 penalize or restrict development rights due or related to the
84 demolition of any structure in accordance with this section,
85 including a requirement for replication of the demolished
86 structure, a limitation on the size or height of the replacement
87 structure, or the maintenance of any of the elements of the
88 demolished structure. Owners or developers of replacement
89 structures are permitted to develop in accordance with all land
90 use, zoning, and other land development rights, whether
91 established by law, ordinance, rule, regulation, policy,
92 development order, or any other act, without regard to any local
93 government restrictions or penalties resulting from the
94 demolition of any structure identified in subsection (3) that
95 may restrict development of a replacement structure as a result
96 of a local government order, a designation, a code enforcement
97 proceeding, or an ordinance.
98 (6) APPLICATION.—This section applies prospectively and
99 retroactively to any law adopted contrary to this section and
100 its intent.
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CS/HB 1317 2023
101 (7) PREEMPTION.—A municipality, county, special district,
102 or political subdivision may not adopt or apply a law, an
103 ordinance, a rule, a regulation, a policy, a resolution, or any
104 other act that in any way limits the demolition of any
105 structures and buildings identified in subsection (3) or limits
106 the development of any replacement structure in a way that would
107 divest property owners or developers of land use, zoning, or
108 other land development rights for the demolition of any
109 structure in accordance with this section. All laws, ordinances,
110 rules, regulations, policies, resolutions, and other acts of a
111 municipality, county, special district, or political subdivision
112 to the contrary are void.
113 Section 2. This act shall take effect upon becoming a law.
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hb1317-01-c1
COMMERCE COMMITTEE
CS/HB 1317 by Rep. Roach
Local Regulation of Nonconforming or Unsafe Structures
AMENDMENT SUMMARY
April 17, 2023
Amendment 1 by Rep. Roach (strike-all):
• Defines “nonconforming structure” as a structure that does not conform to the Base
Flood Elevation requirements for new construction issued by the National Flood
Insurance Program.
• Provides that the bill does not apply to single-family homes or structures individually
listed in the National Register of Historic Places.
• Provides that the bill is applicable to the following qualifying structures:
o Nonconforming structures located within one-half mile of the coastline in certain
FEMA coastal flood zones.
o Any structure determined to be unsafe by a local building official.
o Any structure ordered to be demolished by the local government.
• Prohibits a local government from prohibiting, restricting, or preventing the demolition of
any qualifying structure for any reason other than public safety. Local governments may
review an application for a demolition permit for compliance with the Building Code, Fire
Prevention Code, and any regulation applicable to similarly situated parcels.
• Requires a local government to allow replacement structures to be developed to the
maximum height and overall building size authorized by local development regulation.
• Prohibits a local government from:
o Limiting the development potential of replacement structures below the maximum
allowed by local development regulations.
o Requiring replication of a demolished structure.
o Requiring the preservation of any of the elements of a demolished structure.
o Impose additional regulatory or building requirements on replacement structures
which would not otherwise be applicable to a similarly situated parcel.
o Impose additional public hearings or administrative processes that would not
otherwise be applicable to a similarly situated vacant parcel.
• Provides that development applications submitted for replacement structures must be
processed in accordance with the process outlined in local land development
regulations, including any required public hearings in front of the local historic board,
with no additional hearings that would not applicable to similarly situated parcels.
• Provides that the bill applies prospectively an retroactively to any contrary law, and all
contrary laws are preempted.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1317 (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: Commerce Committee
2 Representative Roach offered the following:
3
4 Amendment (with title amendment)
5 Remove everything after the enacting clause and insert:
6 Section 1. Section 553.8991, Florida Statutes, is created
7 to read:
8 553.8991 Resiliency and Safe Structures Act.—
9 (1) SHORT TITLE.—This section may be cited as the
10 “Resiliency and Safe Structures Act.”
11 (2) DEFINITIONS.—As used in this section, the term:
12 (a) "Coastline" means the line of ordinary low water along
13 that portion of the coast which is in direct contact with the
14 open sea and the line marking the seaward limit of inland waters
15 as defined in the Submerged Lands Act, 43 U.S.C. ss. 1301 et
16 seq.
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Page 1 of 6
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1317 (2023)
Amendment No. 1
17 (b) "Law" means any statute, ordinance, rule, regulation,
18 policy, resolution, code enforcement order, agreement, or other
19 governmental act.
20 (c) "Local government" means a municipality, county,
21 special district, or any other political subdivision of the
22 state.
23 (d) "Nonconforming structure" means a structure that does
24 not conform to the Base Flood Elevation requirements for new
25 construction issued by the National Flood Insurance Program.
26 (e) "Replacement structure" means a new structure built on
27 a property where a structure was demolished or will be
28 demolished in accordance with this section.
29 (3) QUALIFYING STRUCTURES AND BUILDINGS.—This section
30 applies to all of the following structures, unless the structure
31 is individually listed in the National Register of Historic
32 Places or is a single-family home:
33 (a) Nonconforming structures located within one-half mile
34 of the coastline that are also within zones V, VE, AO, or AE, as
35 identified in the Flood Insurance Rate Map issued by the Federa l
36 Emergency Management Agency.
37 (b) Any structure determined to be unsafe by a local
38 building official.
39 (c) Any structure ordered to be demolished by a local
40 government that has proper jurisdiction.
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Page 2 of 6
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1317 (2023)
Amendment No. 1
41 (4) RESTRICTIONS ON DEMOLITION PROHIBITED.—A local
42 government may not prohibit, restrict, or prevent the demolition
43 of any structure identified in subsection (3) for any reason
44 other than public safety. A local government may review an
45 application for a demolition permit sought pursuant to this
46 section only administratively for compliance with the Florida
47 Building Code, the Florida Fire Prevention Code, and the Life
48 Safety Code, or local amendments thereto, and any regulation
49 applicable to a similarly situated parcel. The local government
50 may not subject an application to additional local land
51 development regulations or public hearings.
52 (5) RESTRICTIONS ON REDEVELOPMENT PROHIBITED.— A local
53 government shall authorize replacement structures to be
54 developed to the maximum height and overall building size
55 authorized by local development regulations. A local government
56 may not do any of the following:
57 (a) Limit, for any reason, the development potential of
58 replacement structures below the maximum allowed by local
59 development regulations.
60 (b) Require replication of a demolished structure.
61 (c) Require the preservation of any elements of a
62 demolished structure.
63 (d) Impose additional regulatory or building requirements
64 on replacement structures which would not otherwise be
65 applicable to a similarly situated vacant parcel.
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Page 3 of 6
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1317 (2023)
Amendment No. 1
66 (e) Impose additional public hearings or administrative
67 processes that would not otherwise be applicable to a similarly
68 situated vacant parcel.
69 (6) DEVELOPMENT APPLICATIONS.- Development applications
70 submitted for replacement structures shall be processed in
71 accordance with the process outlined in local land development
72 regulations including any required public hearings in front of
73 the local historic board. However, a local government shall not
74 impose additional public hearings or administrative processes
75 that would not otherwise be applicable to a similarly situated
76 vacant parcel.
77 (7) APPLICATION AND CONSTRUCTION.— This section applies
78 prospectively and retroactively to any law adopted contrary to
79 this section or its intent, and must be liberally construed to
80 effectuate its intent. Nothing in this section shall apply to or
81 affect s. 553.79(25).
82 (8) PREEMPTION.—A local government may not adopt or
83 enforce a law that in any way limits the demolition of a
84 structure identified in subsection (3) or that limits the
85 development of a replacement structure in violation of
86 subsection (5). A local government may not penalize an owner or
87 a developer of a replacement structure for a demolition pursuant
88 to this section or otherwise enact laws that defeat the intent
89 of this section. Any local government law contrary to this
90 section is void.
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Page 4 of 6
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1317 (2023)
Amendment No. 1
91 Section 2. This act shall take effect upon becoming a law.
92
93 -----------------------------------------------------
94 T I T L E A M E N D M E N T
95 Remove everything before the enacting clause and insert:
96 An act relating to local regulation of nonconforming or unsafe
97 structures; creating s. 553.8991, F.S.; providing a short title;
98 defining terms; providing applicability; prohibiting local
99 governments from prohibiting, restricting, or preventing the
100 demolition of certain structures unless necessary for public
101 safety; authorizing local governments to review demolition
102 permit applications only for a specified purpose; requiring that
103 replacement structures be permitted to be developed in
104 accordance with applicable development regulations; prohibiting
105 local governments from taking certain actions regarding
106 replacement structures; providing for retroactive applicat ion;
107 providing applicability and construction; preempting regulation
108 of the demolition or replacement of certain structures to the
109 state under certain circumstances; providing an effective date.
110 WHEREAS, it is of paramount importance to replace older,
111 unsafe, or nonconforming structures that are a threat to life
112 and safety with new, resilient buildings built to contemporary
113 building codes and standards, and
114 WHEREAS, nonconforming structures within coastal special
115 flood hazard areas and structures that are ordered to be
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Page 5 of 6
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1317 (2023)
Amendment No. 1
116 demolished or that are deemed unsafe by local building officials
117 pose an increased risk of collapse, may affect the integrity or
118 stability of neighboring buildings or structures, and may cause
119 injury to persons or property, and
120 WHEREAS, local governmental laws, procedures, and policies
121 that prohibit or limit the demolition of nonconforming or
122 unsafe structures or limit the construction of new, resilient
123 structures pose a threat to life and public safety, and
124 WHEREAS, nonconforming structures within a half mile of the
125 coast and within a coastal special flood hazard area, regardless
126 of whether the structure is deemed unsafe by a local building
127 official or is subject to a demolition order, shall be permitted
128 to be demolished and a replacement structure authorized, which
129 will allow owners or developers to enjoy all land use and
130 development rights that would apply to the property with out
131 regard to local restrictions that may restrict future
132 development as a result of demolition, and
133 WHEREAS, to make the application and enforcement of this act
134 uniform throughout this state, the Legislature intends to preempt
135 the regulation of the demolition of certain structures and
136 buildings to the state, NOW, THEREFORE,
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Page 6 of 6
HB 1353
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 1353 Commercial Financing Product Brokers and Providers
SPONSOR(S): Bankson
TIED BILLS: IDEN./SIM. BILLS: CS/SB 1624
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 14 Y, 0 N Fletcher Lloyd
2) Justice Appropriations Subcommittee 15 Y, 0 N Saag Keith
3) Commerce Committee Fletcher Hamon
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 help businesses access capital without the
business owner having to incur a personal loan guarantee or forfeit 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 in ch. 559, F.S. Currently, there are
no Florida laws regulating commercial financing product brokers and providers.
The bill:
Creates Part XIII of ch. 599, F.S., entitled “Florida Commercial Financing Disclosure Law;”
Provides definitions for and establishes the scope of Part XIII;
Requires certain disclosures by commercial financing product providers;
Prohibits brokers from engaging in certain activities; and
Grants the Attorney General exclusive authority to enforce Part XIII.
The bill will have an indeterminate impact on state expenditures and may have an indeterminate, but likely
insignificant, 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: 4/15/2023
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. 30, 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 difference
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; and
(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.
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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.
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. 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 provides that 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.
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.
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.
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II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
The bill will have an indeterminate impact on workload within the Department of Legal Affairs. To
the extent that the Attorney General must enforce the provisions of the bill, workload may increase.
Any impacts of the bill can likely be absorbed within existing resources. If additional workload is
unmanageable, the department could request additional resources from the Legislature through the
annual Legislative Budget Request process.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill will have an indeterminate impact on private entities who qualify as providers under the bill. The
bill may benefit or hinder some businesses to the extent that new regulations influence the outcome of
their transactions. Any such impact is indeterminate, yet likely insignificant.
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:
Not applicable. The bill does not provide rule-making authority.
C. DRAFTING ISSUES OR OTHER COMMENTS:
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
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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
None.
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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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COMMERCE COMMITTEE
HB 1353 by Rep. Bankson
Relating to Commercial Financing Product Brokers and Providers
AMENDMENT SUMMARY
April 17, 2023
Amendment 1 by Rep. Bankson (Strike-all): The amendment creates an exception to
proposed disclosure requirements related to commercial financing transactions so that a
provider of a financing arrangement known as a “commercial financing facility”, which is a single
agreement that involves a series of transactions subject to the same terms, is only required to
issue a single disclosure. It also makes technical and clarifying changes.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1353 (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: Commerce Committee
2 Representative Bankson offered the following:
3
4 Amendment (with title amendment)
5 Remove everything after the enacting clause and insert:
6 Section 1. Part XIII of chapter 559, Florida Statutes,
7 consisting of sections 559.961, 559.9611, 559.9612, 559.9613,
8 559.9614, and 559.9615, Florida Statutes, is created to read:
9 PART XIII
10 FLORIDA COMMERCIAL FINANCING DISCLOSURE LAW
11 559.961 Short title.—This part may be cited as the
12 "Florida Commercial Financing Disclosure Law."
13 559.9611 Definitions.—As used in this part, the term:
14 (1) "Accounts receivable purchase transaction" means a
15 transaction in which a business forwards or otherwise sells to a
16 person all or a portion of the business's accounts or payment
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1353 (2023)
Amendment No. 1
17 intangibles as those terms are defined in s. 679.1021 at a
18 discount to the expected value of the account or payment
19 intangibles. For purposes of this part, the provider's
20 characterization of an accounts receivable purchase transaction
21 as a purchase is conclusive that the accounts receivable
22 purchase transaction is not a loan or a transaction for the use,
23 forbearance, or detention of money.
24 (2) "Advance fee" means any consideration that is assessed
25 or collected by a broker before the closing of a commercial
26 financing transaction.
27 (3) "Broker" means a person who, for compensation or the
28 expectation of compensation, arranges a commercial financing
29 transaction or an offer between a third party and a business in
30 this state which would, if executed, be binding upon that third
31 party. The term excludes a provider and any person or entity
32 whose compensation is not based or dependent upon the terms of
33 the specific commercial financing transaction obtained or
34 offered.
35 (4) "Business" means a person or a group of persons, a
36 sole proprietorship, a corporation, a limited liability company,
37 a trust, an estate, a cooperative, an association, or a limited
38 or general partnership engaged in a business activity.
39 (5) “Commercial financing facility” means a provider’s
40 plan for purchasing multiple accounts receivable from the
41 recipient over a period of time pursuant to an agreement that
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Bill No. HB 1353 (2023)
Amendment No. 1
42 sets forth the terms and conditions governing the use of the
43 facility.
44 (6) "Commercial financing transaction" means a commercial
45 loan, an accounts receivable purchase transaction, or a
46 commercial open-end credit plan to the extent the transaction is
47 also a business purpose transaction. As used in this subsecti on,
48 the term "business purpose transaction" means a transaction the
49 proceeds of which are provided to a business or are intended to
50 be used to carry on a business and not to be used for personal,
51 family, or household purposes. For purposes of determining
52 whether a transaction is a business purpose transaction, the
53 provider may rely on any written statement of intended purpose
54 signed by the business. The statement may be a separate
55 statement or be contained in an application, agreement, or other
56 document signed by the business or the business owner.
57 (7) "Commercial loan" means a loan to a business, whether
58 secured or unsecured.
59 (8) "Commercial open-end credit plan" means commercial
60 financing extended by any provider under a plan in which:
61 (a) The provider reasonably contemplates repeat
62 transactions.
63 (b) The amount of financing that may be extended to the
64 business during the term of the plan, up to any limit set by the
65 provider, is generally made available to the extent that any
66 outstanding balance is repaid.
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Amendment No. 1
67 (9) "Depository institution" means:
68 (a) A bank, a trust company, or an industrial loan company
69 doing business under the authority of, or in accordance with, a
70 license, certificate, or charter issued by the United States,
71 this state, or any other state, district, territory, or
72 commonwealth of the United States which is authorized to
73 transact business in this state;
74 (b) A federally chartered savings and loan association,
75 federal savings bank, or federal credit union that is authorized
76 to transact business in this state; or
77 (c) A savings and loan association, savings bank, or
78 credit union organized under the laws of this or any other state
79 which is authorized to transact business in this state.
80 (10) "Provider" means a person who consummates more than
81 five commercial financing transactions with a business located
82 in this state in any calendar year. The term includes a person
83 who enters into a written agreement with a depository
84 institution to arrange a commercial financing transaction
85 between the depository institution and a business via an online
86 lending platform administered by the person. The fact that a
87 provider extends a specific offer for a commercial financing
88 transaction on behalf of a depository institution may not be
89 construed to mean that the provider engaged in lending or
90 financing or originated that loan or financing.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1353 (2023)
Amendment No. 1
91 559.9612 Scope of this part.—This part applies to any
92 commercial financing transaction consummated on or after January
93 1, 2024. This part does not apply to:
94 (1) A provider that is:
95 (a) A federally insured depository institution or an
96 affiliate or holding company of such institution; or
97 (b) A subsidiary or service corporation that is owned and
98 controlled by a federally insured depository institution or that
99 is under common ownership with a federally insured depository
100 institution.
101 (2) A provider that is a lender regulated under the Farm
102 Credit Act of 1971, 12 U.S.C. ss. 2001 et seq.
103 (3) A commercial financing transaction that is:
104 (a) Secured by real property;
105 (b) A lease; or
106 (c) A purchase money obligation that is incurred as all or
107 part of the price of the collateral or for value given to enable
108 the business to acquire rights in or the use of the collateral
109 if the value is in fact so used.
110 (4) A commercial financing transaction in which the
111 recipient is a motor vehicle dealer or an affiliate of such a
112 dealer, or a vehicle rental company or an affiliate of such a
113 company, pursuant to a commercial loan or commercial open-end
114 credit plan of at least $50,000 or a commercial financing
115 transaction offered by a person in connection with the sale or
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Bill No. HB 1353 (2023)
Amendment No. 1
116 lease of products or services that such person manufactures,
117 licenses, or distributes, or whose parent company or any of its
118 directly or indirectly owned and controlled subsidiaries
119 manufactures, licenses, or distributes.
120 (5) A provider that is licensed as a money transmitter in
121 accordance with a license, certificate, or charter issued by
122 this state or any other state, district, territory, or
123 commonwealth of the United States.
124 (6) A provider that consummates no more than five
125 commercial financing transactions in this state in a 12 -month
126 period.
127 (7) A commercial financing transaction of more than
128 $500,000.
129 559.9613 Disclosures.—
130 (1) A provider that consummates a commercial financing
131 transaction shall provide a written disclosure of the terms of
132 the commercial financing transaction as required by this part.
133 The disclosures must be provided at or before consummation of
134 the transaction. Only one disclosure must be provided for each
135 commercial financing transaction, and a disclosure is not
136 required as result of a modification, forbearance, or change to
137 a consummated commercial financing transaction.
138 (2) A provider shall provide a written disclosure of t he
139 following information in connection with each commercial
140 financing transaction:
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Amendment No. 1
141 (a) The total amount of funds provided to the business
142 under the terms of the agreement.
143 (b) The total amount of funds disbursed to the business if
144 less than the amount specified in paragraph (a) as a result of
145 any fees deducted or withheld at disbursement, any amount paid
146 to the provider to satisfy a prior balance, and any amount paid
147 to a third party on behalf of the business.
148 (c) The total amount to be paid to the provider under the
149 terms of the agreement.
150 (d) The total dollar cost under the terms of the
151 agreement, calculated by finding the difference between the
152 amount specified in paragraph (a) and the amount specified in
153 paragraph (c).
154 (e)1. The manner, frequency, and amount of each payment;
155 or
156 2. If the amount of the payments may vary, the manner and
157 frequency of the payments, the estimated amount of the initial
158 payment, a description of the methodology for calculating any
159 variable payment, and the circumstances under which payments may
160 vary.
161 (f) Whether there are any costs or discounts associated
162 with prepayment, including a reference to the provision in the
163 agreement which creates the contractual rights of the parties
164 related to prepayment.
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Amendment No. 1
165 (3) A provider that consummates a commercial financing
166 facility may provide disclosures required by subsection (2)
167 based on an example of a transaction that could occur under the
168 agreement. The example shall be based on an accounts receivable
169 which has a total face amount owed of $10,000. Only one
170 disclosure must be provided for the commercial financing
171 facility, and a disclosure is not required as a result of a
172 modification, forbearance, or change to the facility. For
173 purposes of clarity, a new disclosure is not required each time
174 an accounts receivable is purchased under the facility.
175 559.9614 Prohibited acts.—A broker may not do any of the
176 following:
177 (1) Assess, collect, or solicit an advance fee from a
178 business to provide services as a broker. However, th is
179 subsection does not preclude a broker from soliciting a business
180 to pay for, or preclude a business from paying for, actual
181 services necessary to apply for a commercial financing
182 transaction, including, but not limited to, a credit check or an
183 appraisal of security, if such payment is made by check or money
184 order payable to a party independent of the broker.
185 (2) Make or use any false or misleading representation or
186 omit any material fact in the offer or sale of the services of a
187 broker or engage, directly or indirectly, in any act that
188 operates or would operate as fraud or deception upon any person
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Amendment No. 1
189 in connection with the offer or sale of the services of a
190 broker, notwithstanding the absence of reliance by the business.
191 (3) Make or use any false or deceptive representation in
192 its business dealings.
193 (4) Offer the services of a broker in any advertisement
194 without disclosing the actual address and telephone number of
195 the business of the broker and the address and telephone number
196 of any forwarding service the broker may use, if any.
197 559.9615 Enforcement.—
198 (1) The Attorney General has exclusive authority to
199 enforce this part. The Attorney General may:
200 (a) Receive and act on complaints.
201 (b) Take action designed to obtain voluntary compliance
202 with this part.
203 (c) Commence administrative or judicial proceedings to
204 enforce compliance with this part.
205 (2)(a) A violation of this part is punishable by a fine of
206 $500 per incident, not to exceed $20,000 for all aggregated
207 violations, arising from the use of the transaction
208 documentation or materials found to be in violation of this
209 part.
210 (b) A violation of this part after receipt of a written
211 notice of a prior violation from the Attorney General is
212 punishable by a fine of $1,000 per incident, not to exceed
213 $50,000 for all aggregated violations, arising from the use of
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Bill No. HB 1353 (2023)
Amendment No. 1
214 the transaction documentation or materials found to be in
215 violation of this part.
216 (c) A violation of this part does not affect the
217 enforceability or validity of the underlying commercial
218 financing transaction.
219 (3) This part does not create a private right of action
220 against any person or entity based upon compliance or
221 noncompliance with this part.
222 Section 2. This act shall take effect July 1, 2023.
223
224 -----------------------------------------------------
225 T I T L E A M E N D M E N T
226 Remove everything before the enacting clause and insert:
227 A bill to be entitled
228 An act relating to commercial financing product brokers and
229 providers; creating part XIII of ch. 559, F.S., entitled
230 "Florida Commercial Financing Disclosure Law"; creating s.
231 559.961, F.S.; providing a short title; creating s.
232 559.9611, F.S.; defining terms; creating s. 559.9612, F.S.;
233 providing applicability; creating s. 559.9613, F.S.;
234 requiring providers that consummate commercial financing
235 transactions to provide specified written disclosures;
236 creating s. 559.9614, F.S.; prohibiting brokers from taking
237 specified actions; creating s. 559.9615, F.S.; providing
238 exclusive authority of the Attorney General to enforce
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 1353 (2023)
Amendment No. 1
239 specified provisions; providing civil penalties; providing
240 construction; providing an effective date.
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CS/HB 1395
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 1395 Management and Safety of Condominium and Cooperative Buildings
SPONSOR(S): Regulatory Reform & Economic Development Subcommittee, Lopez, V.
TIED BILLS: IDEN./SIM. BILLS: CS/CS/SB 154
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY
CHIEF
1) Regulatory Reform & Economic Development 11 Y, 0 N, As CS Wright Anstead
Subcommittee
2) State Administration & Technology 13 Y, 0 N Helpling Topp
Appropriations Subcommittee
3) Commerce Committee Wright Hamon
SUMMARY ANALYSIS
On June 24, 2021, Champlain Towers South, a 12-story beachfront condominium building in the Town of Surfside,
partially collapsed resulting in the death of 98 people. In response, during Special Session, 2022 D, SB 4-D was
enacted to provide building safety inspection requirements (milestone inspections) and reserve requirements
(structural integrity reserve study, or SIRS) for condominium and cooperative association buildings.
The bill clarifies provisions created by SB 4-D. Specifically, the bill:
Requires all condominium and cooperative buildings to have a milestone inspection when they reach 25
years of age, without regard to location, and allows local governments to extend the deadline to complete a
milestone inspection, under certain circumstances.
Extends the deadline for certain condominiums and cooperatives built between 1994 to 200 0 to complete
the milestone inspection and SIRS.
Allows condominiums and cooperatives to use prior inspection reports completed within the last 5 years for
both the milestone inspection and SIRS, under certain circumstances.
Requires phase 2 of milestone inspections to begin within 180 days of completing phase 1, if necessary.
Increases the number of professionals available to perform milestone inspections and structural integrity
reserve studies;
o Allows certain general contractors and building code professionals with at least 5 years’ threshold
building experience to do the visual inspection portion of SIRS and phase one of the milestone
inspection, in addition to architects and engineers.
o Phase two of the milestone inspection may only be performed by an architect or engineer.
Limits setting reserves for only those items that have 25 years or less of useful life remaining.
Requires the Florida Building Commission to create a uniform form for certain inspection reports.
Requires milestone inspection and SIRS reports and disclosures to be included in sales contracts.
Allows an injunction process to enforce milestone inspection and SIRS requirements in county court.
Allows unit owners to utilize pre-suit mediation to resolve certain disputes related to milestone inspections
and SIRS.
In response to concerns from condominium owners and industry regarding new flood insurance coverage
requirements in SB 2-A from Special Session 2022A, the bill provides exemptions from such requirements for
certain Citizens Property Insurance Corporation policyholders who own or reside in a condominium.
The bill may have an insignificant negative fiscal impact on state government and does not appear to affect local
governments. See Fiscal Analysis & Economic Impact Statement.
Except as otherwise provided, 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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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Community Associations – Background
The Florida Division of Condominiums, Timeshares and Mobile Homes (“Division”), within the
Department of Business and Professional Regulation (“DBPR”), provides consumer protection for
Florida residents living in regulated communities through education, complaint resolution, alternative
dispute resolution, and developer disclosure. The Division has regulatory authority over:
Condominium associations.
Cooperative associations.
Florida mobile home parks and related associations.
Vacation units and timeshares.
Yacht and ship brokers and related business entities.
Homeowners’ associations (limited to the arbitration of election and recall disputes).
Condominiums
A condominium is a form of real property ownership created under ch. 718, F.S., the “Condominium
Act.” Persons own condominium units along with an undivided right of access to the condominium’s
common elements.1 A condominium is created by recording a declaration of condominium, which
governs the relationship between condominium unit owners and the condominium association, in the
public records of the county where the condominium is located. 2 All unit owners are members of the
condominium association, and the association is responsible for common elements operation and
maintenance.3 The condominium association is overseen by an elected board of directors, commonly
referred to as a “board of administration,” which is responsible for the association’s administration. 4
Cooperatives
A cooperative is a form of property ownership created under ch. 719, F.S., the “Cooperative Act,” in
which the real property is owned by the cooperative association and individual units are leased to the
residents, who own shares in the association.5 The lease payment amount is the pro-rata share of the
cooperative’s operational expenses. Cooperatives operate similarly to condominiums, and the laws
regulating cooperatives are largely identical to those regulating condominiums.
Fiduciary Relationship
Board members and officers of a condominium or cooperative association have a fiduciary relationship
with the unit owners in their condominium or cooperative. This fiduciary relationship requires board
members and officers to act in good faith and in the best interests of the unit owners. Under the
“business judgment rule,” the board must act within the scope of its authority, in a reasonable manner,
and must perform its duties with the care and responsibility that an ordinarily prudent person would
exercise under similar circumstances.6
Board members and officers can be the subject of a cause of action for a breach of their fiduciary duty.
However, a person bringing such action must prove that the board member or officer had a fiduciary
1 S. 718.103(11), F.S.
2 S. 718.104(2), F.S.
3 S. 718.103(2), F.S.
4 S. 718.103(4), F.S.
5 S. 719.103(2), (26), F.S.
6 Ss. 718.111(1) and 719.104(8), F.S.
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duty that was breached that caused damages and rose to the level of criminal activity, fraud, self-
dealing, unjust enrichment, or other improper personal benefit. 7
To determine if a board member or officer breached his or her fiduciary duty, Florida courts look to see
if the board member or officer violated the business judgment rule by determining if the association had
the contractual or statutory authority to perform the relevant act and if the decision was reasonable. The
business judgment rule generally will protect association board members and officers, as long those
board members or officers act within the scope of their authority and in a reasonable manner. 8
It is a breach of a board member or officer’s fiduciary duty if an association fails to complete a
milestone inspection or structural integrity reserve study.
Florida Building Code
In response to the destruction of Hurricane Andrew, in 1998, the Legislature approved a single state
building code and enhanced the oversight role of the state over local code enforcement. In 2000, the
Legislature authorized the implementation of the Building Code (Code), and that first edition replaced
all local codes on March 1, 2002, making it the first statewide building code in the United States. 9
The “Florida Building Codes Act” was created to provide a mechanism for the uniform adoption,
updating, interpretation, and enforcement of a single, unified state Code. The Code must be applied,
administered, and enforced uniformly and consistently from jurisdiction to jurisdiction. 10
The Florida Building Commission (Building Commission) was statutorily created to implement the
Code. The Building Commission, which is housed within DBPR, is a 19-member technical body made
up of design professionals, contractors, and government experts in various disciplines covered by the
Code. The Building Commission reviews several International Codes published by the International
Code Council, the National Electric Code, and other nationally adopted model codes (model codes) to
determine if the Code needs to be updated and adopts an updated Code every three years.11
Local Enforcement of the Florida Building Code
It is the intent of the Legislature that local governments have the power to inspect all buildings,
structures, and facilities within their jurisdiction in protection of the public’s health, safety, and welfare.12
Every local government must enforce the Building Code and issue building permits. 13 It is unlawful for a
person, firm, or corporation to construct, erect, alter, repair, secure, or demolish any building without
first obtaining a permit from the local government enforcing agency or from such persons as may, by
resolution or regulation, be directed to issue such permit, upon the payment of reasonable fees as set
forth in a schedule of fees adopted by the enforcing agency. 14
Any construction work that requires a building permit also requires plans and inspections to ensure the
work complies with the Building Code. The Building Code requires certain building, electrical, plumbing,
mechanical, and gas inspections.15 Construction work may not be done beyond a certain point until it
7 Harris B. Katz, Condo column: Can board members be sued and how can an association remove a director?, TC Palm (Oct. 17,
2019) https://www.tcpalm.com/story/news /local/florida/2019/ 10/ 17/can-condo-board-members-sued-and-how-can-association-
remove-director/3907749002/ (last visited Mar. 19, 2023).
8 Id.; Hollywood Towers Condominium Association v. Hampton , 40 So. 3d 784, 787 (Fla. 4th DCA 2010).
9 Id.
10 See s. 553.72(1), F.S.
11 Ss. 553.73 and 553.74, F.S.
12 S. 553.72, F.S.
13 Ss. 125.01(1)(bb), 125.56(1), and 553.80(1), F.S.
14 Ss. 125.56(4)(a) and 553.79(1), F.S.
15 2020 Florida Building Code (7th ed.), s. 110.
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passes an inspection. Generally speaking, a permit for construction work that passes the required
inspections is considered completed or closed. 16
The Florida Building Code does not contain mandatory requirements for the maintenance and
inspection of existing buildings in the state. Mandatory inspections of existing condominium buildings
were once required by Florida law, but the law was repealed shortly after enactment. In 2008, the
Legislature mandated that every condominium greater than three stories in height be inspected for
maintenance, useful life, and replacement costs of the common elements every five years by an
engineer or architect licensed in the state. 17 A condominium association could waive this requirement
for five years by a majority vote of interests present at a properly called meeting of the association. 18
This provision was repealed in 2010.19
Building Code Administrators and Inspectors
Building officials, inspectors, and plans examiners are regulated by the Florida Building Code
Administrators and Inspectors Board within DBPR.20
A building code administrator, also known as a building official, is a local government employee or a
person contracted by a local government who supervises building code activities, including plans
review, enforcement, and inspection.21
A building code inspector (inspector) inspects construction that requires permits to determine
compliance with the Building Code and state accessibility laws. Inspectors are divided into several
different categories. An inspector’s ability to practice is limited to the category or categories in which the
inspector has been licensed. The inspector categories are: 22
Building inspector;
Coastal construction inspector;
Commercial electrical inspector;
Residential electrical inspector;
Mechanical inspector;
Plumbing inspector;
Residential inspector; and
Electrical inspector.
In order to become an inspector, an applicant must meet the following criteria: 23
Be at least 18 years of age,
Be of good moral character,
Successfully complete the inspector exam, and
Meet eligibility requirements according to an accepted combination of education and
experience, which consists of completing a combined 3 to 4 years of proven experience,
college-level credits or a degree, a training program, and an internship program.
In order to become a building official, an applicant must meet the following criteria:24
Be at least 18 years of age,
Be of good moral character,
16 Doug Wise, Closing Inactive & Excluded Building Permits, Palm Beach County Planning, Zoning & Building Department,
Building Division, at: http://discover.pbcgov.org/pzb/building/BuildingCodes/PBO-
126%20%E2%80%93%20Closing%20Inactive%20and%20Excluded%20Building%20Permits.pdf (last visited Mar. 19, 2023).
17 Ch. 2008-28, L.O.F.
18 Id.
19 Ch. 2010-176, s. 59, L.O.F.
20 S. 468.605, F.S.
21 S. 468.603(2), F.S.
22 S. 468.603(5), F.S.
23 S. 468.609(2), F.S.
24 S. 468.609(3), F.S.
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Successfully complete the building code administrator exam, and
Meet eligibility requirements according to an accepted combination of education and
experience, which consists of completing a combined 10 years of proven architect, engineer,
plans examiner, building code inspector, registered or certified contractor, or construction
superintendent experience and postsecondary education in the field of construction or related
field.
General Contractors
General contractors are regulated by the Construction Industry Licensing Board within DBPR. A
general contractor may provide unlimited construction services and may contract for and perform any
construction activity requiring licensure, with certain exceptions, such as electrical, mechanical,
plumbing work.25
In order to become a construction contractor, an applicant must meet the following criteria: 26
Be of good moral character;
Be at least 18 years of age;
Successfully pass the certification examination; and
Meet eligibility requirements according to an accepted combination of education and
experience, which consists of completing a combined 4 to 5 years of proven experience and
college-level credits or a degree.27
Threshold Buildings
In 1981, a “five-story Harbour Cay Condominium building in Cocoa Beach, Florida, collapsed during the
placement of concrete for the roof slab, killing 11 workers and injuring 23 more.” 28 In response to this
tragedy, the Legislature instituted threshold building inspections, requiring licensed “special inspectors”
to conduct structural inspections for all threshold buildings.29 A special inspector is a licensed architect
or registered engineer to conduct inspections of threshold buildings. 30
A threshold building is defined as any building which is greater than three stories or 50 feet in height, or
which has an assembly occupancy classification, as defined in the Building Code, which exceeds 5,000
square feet in area and an occupant content of greater than 500 persons. 31 An enforcing agency must
require a special inspector to perform structural inspections on a threshold building during new
construction or during repair or restoration projects in which the structural system or structural loading
of a building is being modified.32
For a building that qualifies as a threshold building, a structural inspection plan must be submitted by
the special inspector and the design professional of record to the enforcing agency prior to the issuance
of a building permit for the construction of or modification to the building.33 However, a fee-simple
owner may declare a building a threshold building even when it does not meet the definitions. 34
The inspection plan for a threshold building provides specific inspection instructions or the adequate
inspection of construction. The owner must retain the services of a special inspector who must inspect
25 Ss. 489.105(3)(a) and 489.113, F.S.
26 S. 489.111(1)-(3), F.S.
27 S. 489.111(2)(c)1.-3., F.S.
28 National Institute of Standards and Technology, Harbour Cay Condominium Collapse Florida 1981,
available at https://www.nist.gov/el/harbour-cay-condominium-collapse-florida-1981 (last visited Mar. 19, 2023).
29 Florida Building Commission, Florida Building Construction Standards available at
https://www.floridabuilding.org/fbc/commission/FBC_ 0413/Co mmission_Education_POC/ 173/173-1-MATERIA L%20.pdf (last
visited Mar. 19, 2023).
30 See s. 553.71, F.S.
31 Id.
32 S. 553.79(5)(a), F.S.
33 Id.
34 Id.
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the building according to the special inspection plan. In addition, the inspector must determine that a
professional engineer who specializes in shoring design has inspected the shoring and reshoring for
conformance with the shoring and reshoring plans submitted to the enforcing agency. 35 Special
inspectors report directly to local building administrators. The role of threshold building inspectors is
unique to Florida.36
Champlain Towers South and SB 4-D (Special Session D 2022)
On June 24, 2021, Champlain Towers South, a 12-story beachfront condominium building in the Town
of Surfside, which was completed in 1981, partially collapsed resulting in the death of 98 people.
In response, the National Institute of Standards and Technology (NIST) within the United States
Department of Commerce launched a full investigation into the cause of the building’s failure.
According to NIST, it will provide regular progress updates, but because of the amount of evidence
and, the investigation could take multiple years to complete. 37
Despite the fact that the investigations to determine the cause of the building’s failure may take months
if not years to complete, the condition of the building prior to collapse and released documentation
about the building’s history have revealed potential factors that may have caused or contributed to the
building’s collapse,38 including issues with the pool deck39 and building design flaws.40 According to
news reports, the association also delayed the repairs of the issues identified in the engineering reports
because of infighting among members of the association. 41
In response to the Champlain Towers South collapse, during the Special Session D, 2022, SB 4-D42
was enacted to revise the laws related to building safety. The bill provided building safety inspection
requirements for condominium and cooperative association buildings (milestone inspections), increased
the rights of unit owners and prospective unit owners to access information regarding the condition of
such buildings, and revised the requirements for associations to fund reserves for the continued
maintenance and repair of such buildings (structural integrity reserve study).
SB 4-D required the Building Commission to make recommendations to the Governor and Legislature
regarding the inspection requirements in the bill. This report was completed on December 14, 2022,
and some of the recommendations were included in the bill.
35 Id.
36 Florida Board of Professional Engineers, What Are Threshold Building Inspectors?, available at https://fbpe.org/what-are-threshold-
building-inspectors/ (last visited Mar. 19, 2023).
37 National Institute of Standards and Technology, NIST Establishes Expert Team to Investigate the Champlain Towers South
Collapse, Aug. 25, 2021 https://www.nist.gov/news -events/news/2021/08/nist-establishes-expert-team-investigate-champlain-towers-
south-collapse (last visited Mar. 19, 2023).
38 The Occupational Safety and Health Administration, the town of Surfside and Miami-Dade County’s State Attorney’s Office are
also investigating the collapse. The Real Property, Probate and Trust Law Section of the Florida Bar created the Condominium Law
and Policy on Life Safety Task Force, which provided recommendations to improve building safety on October 12, 2021. In addit ion,
the Miami-Dade police are handling a homicide investigation, and the unit owners have filed a class -action lawsuit against the condo
association.
39 Gina Harkins, What you need to know about the Florida condo collapse as the search for survivors continues and probe begins ,
Washington Post (Jul. 10, 2021), https://www.washingtonpost.com/nation/2021/06/25/florida-condo-collapse-what-you-should-know/
(last visited Mar. 19, 2023); Visual Journalism Team, Miami building collapse: What could have caused it? , BBC (Jul. 1, 2021)
https://www.bbc.com/news/world-us-canada-57651025 (last visited Mar. 19, 2023).
40 Alissa Walker, Collapsed Surfside Towers Actually Broke Building Code From the Very Beginning , Curbed (Aug. 9, 2021)
https://www.curbed.com/2021/08/miami-condo-collapse-structural-flaws.ht ml (last visited May 31, 2022); James Glanz, Mike Baker,
and Anjali Singhvi, Condo Wreckage Hints at First Signs of Possible Construction Flaw , The New York Times (Jul. 3, 2021)
https://www.nytimes.com/2021/07/ 03/us/florida-condo-collapse-steel-rebar.html (last visited Mar. 19, 2023).
41 Russell Lewis, Months Before Florida Condo Collapsed, Residents And The Board Sparred Over Repairs , NPR (Jul. 2, 2021)
https://www.npr.org/sections/live-updates-miami-area-condo-collapse/2021/07/02/1012373938/ months -before-florida-condo-collapse-
residents-and-board-sparred-over-repairs (last visited Mar. 19, 2023); Beth Reinhard, Tik Root, Brady Dennis, and Jon Swaine,
Majority of Florida condo board quit in 2019 as squabbling residents dragged out plans for repairs , Washington Post (Jun. 30, 2021)
https://www.washingtonpost.com/investigations/majority-of-florida-condo-board-quit-in-2019-as-squabbling-residents-dragged-out-
plans-for-repairs/2021/06/30/ 43592282-d98e-11eb-ae62-2d07d7df83bd_story.html (last visited Mar. 19, 2023).
42 Ch. 2022-269, L.O.F.
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SB 4-D also required associations to report to the Division on or before January 1, 2023, the number of
buildings that are three stories or higher in height and the total number of units in such buildings and
required the division to publish that information on its website. While the full report is being completed
by the Division, the total number of reporting entities is 6,132, the total number of buildings 3 stories or
higher is 22,338, and the total number of units is 688,439.43
Age of Condominium Buildings
There are 1,529,764 condominium units in Florida operated by 27,588 associations. Of those units: 44
105,404 units are 50 years or older.
479,435 units are 40-50 years old.
327,537 units are 30-40 years old.
141,773 units are 20-30 years old.
428,657 units are 10-20 years old.
46,958 units are 0-10 years old.
Additionally, over 2,000,000 residents are estimated to be occupying condominiums 30 years or older
in Florida, based upon census data of approximately 2.2 persons living in an average condominium
unit.45
Local Building Recertification Programs
Until 2022, Florida does not generally require recertification of buildings or regular inspections of
existing buildings, which is consistent with state building codes across the country. 46 However, local
governments adopted such requirements at their discretion to apply throughout a local jurisdiction.
According to DBPR, some local jurisdictions in the state have used the following model standards to aid
in their adoption of local requirements for the maintenance and inspections of existing buildings: the
International Property Maintenance Code, the Standard Housing Code, and the Standard Unsafe
Building Abatement Code, or some combination thereof.47
Miami-Dade and Broward Counties have amended their local building codes to require a recertification
process and inspection of buildings 40 years and older. Miami-Dade’s program was established in
1975,48 and Broward County’s program was modeled after Miami-Dade’s and has been in effect since
January 2006.49
Miami Dade’s recertification program states that:
All buildings, except single-family residences, duplexes and minor structures as
defined below, shall be recertified in the manner described below where such
buildings or structures have been in existence for forty (40) years or longer, as
determined by the Building Official, who shall at such time issue a Notice of
Required Inspection to the building owner. Subsequent recertification shall be
43 Email from Jonas Marquez, Legislative Affairs Director, Florida Department of Business and Professional Regulation, RE:
Condo/Co-Op Reporting (Feb. 15, 2021).
44 Report of the Florida Bar RPPTL Condominium Law and Policy Life Safety Advisory Task Force, p. 4, available at: https://www-
media.floridabar.org/uploads/2021/10/ Condominiu m-Law-and-Policy-Life-Safety-Advisory-Task-Force-Report.pdf (last visited Mar.
19, 2023).
45 Id.
46 Department of Business and Professional Regulation, Agency Analysis of 2022 Senate Bill 1702, p. 2 (Jan. 7, 2022).
47 Id.
48 Miami-Dade Recertification at
https://www.miamidade.gov/global/economy/building/recertification.page#:~:text =Miami%2DDad e%20County%20has%20had,amen
ded%20on%20June%201%2C%202022 (last visited Mar. 19, 2023).
49 Broward County, Building Safety Inspection Program, available at
https://www.broward.org/CodeAppeals/Documents/Broward%20County%20Building%20Safety%20Inspection%20Program.pdf (last
visited Mar. 19, 2023).
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required at ten (10) years interval. In the event a building is determined to be
structurally and electrically safe under the conditions set forth herein, and such
building or structure is less than forty (40) years of age, recertification shall not
be required for a minimum of ten (10) years from that time, or age forty (40),
whichever is the longer period of time.50
Inspection procedures must “conform, in general, to the minimum inspection procedural guidelines”
issued by the county, and are for the purpose of determining the general structural condition of the
building or structure to the extent reasonably possible which affects the safety of the building or
structure.51 Miami-Dade’s recertification program exempts buildings under 2,000 square feet, 52 and
Broward’s program exempts buildings under 3,500 square feet. 53 The inspections must be carried out
by a professional engineer or architect registered with the State of Florida.54
Following the 2021 tragedy in Surfside, Florida, the concept of recertification programs gained
considerable attention. The City of Boca Raton recently instituted a building recertification program for
buildings over 30 years of age that are greater than three stories or 50 feet in height, or greater than
5,000 square feet and have an occupancy greater than 500 people. 55
Milestone Inspections – Current Situation
Under s. 553.899, F.S, a "milestone inspection" means a structural inspection of a building, including an
inspection of load-bearing walls, primary structural members, and primary structural systems 56 by a
licensed architect or engineer for the purposes of attesting to the life safety and adequacy of the
structural components of the building and, to the extent reasonably possible, determining the general
structural condition of the building as it affects the safety of such building, including a determination of
any necessary maintenance, repair, or replacement of any structural component of the building. The
purpose of such inspection is not to determine if the condition of an existing building is in compliance
with the Florida Building Code or the fire safety code.
A condominium or cooperative must have a milestone inspection performed for each building that is
three stories or more in height by December 31 of the year in which the building reaches 30 years of
age, based on the date the certificate of occupancy for the building was issued, and every 10 years
thereafter. If the building is located within 3 miles of a coastline57, the condominium or cooperative must
have a milestone inspection performed by December 31 of the year in which the building reaches 25
years of age, based on the date the certificate of occupancy for the building was issued, and every 10
years thereafter. This requirement does not apply to a single-family, two-family, or three-family dwelling
with three or fewer habitable stories above ground.
If a milestone inspection is required and the building's certificate of occupancy was issued on or before
July 1, 1992, the building's initial milestone inspection must be performed before December 31, 2024. If
the date of issuance for the certificate of occupancy is not available, the date of issuance of the
building's certificate of occupancy is to be the date of occupancy evidenced in any record of the local
building official.
Upon determining that a building must have a milestone inspection, the local enforcement agency must
provide written notice of such required inspection to the condominium or cooperative by certified mail,
return receipt requested. Within 180 days after receiving such written notice, the condominium or
50 See Code of Miami-Dade, ch. 8 Building Code, s. 8-11(f)(ii), at https://library.municode.com/fl/miami_-
_dade_county/codes/code_of_ordinances?nodeId=PTIIICOOR_CH8BUCO_A RTIAD_ S8 -11EXBU (last visited Mar. 19, 2023).
51 Id. at s. 8-11(f)(i).
52 Id. at s. 8-11(f)(ii).
53 Broward County, supra note 49.
54 Id. and See Code of Miami-Dade, ch. 8, Building Code, s. 8-11(iv).
55 City of Boca Raton. Ordinance 5589, available at: https://www.myboca.us/DocumentCenter/View/28152/Ordinance-No-
5589?bidId= (last visited Mar. 19, 2023).
56 As they are defined in s. 627.706, F.S.
57 “Coastline” has the same meaning as in the Submerged Lands Act, 43 U.S.C. ss. 1301 et seq.
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cooperative must complete phase one of the milestone inspection. Completion of phase one of the
milestone inspection means the licensed engineer or architect who performed the phase one
inspection submitted the inspection report by e-mail, United States Postal Service, or commercial
delivery service to the local enforcement agency.
A milestone inspection consists of two phases.
For phase one of the milestone inspection, a licensed architect or engineer must perform a visual
examination of habitable and nonhabitable areas of a building, including the major structural
components of a building, and provide a qualitative assessment of the structural conditions of the
building. If the architect or engineer finds no signs of substantial structural deterioration 58 to any
building components under visual examination, phase two of the inspection is not required.
Phase two of the milestone inspection must be performed if any substantial structural deterioration is
identified during phase one. A phase two inspection may involve destructive or nondestructive testing at
the inspector's direction. The inspection may be as extensive or as limited as necessary to fully assess
areas of structural distress in order to confirm that the building is structurally sound and safe for its
intended use and to recommend a program for fully assessing and repairing distressed and damaged
portions of the building. When determining testing locations, the inspector must give preference to
locations that are the least disruptive and most easily repairable while still being representative of the
structure.
The bill requires that upon completion of a phase one or phase two milestone inspection, the architect
or engineer who performed the inspection must submit a sealed copy of the inspection report with a
separate summary of, at minimum, the material findings and recommendations in the inspection report
to the condominium or cooperative, and to the building official of the local government which has
jurisdiction. The inspection report must, at a minimum, meet all of the following criteria:
Bear the seal and signature, or the electronic signature, of the licensed engineer or architect
who performed the inspection.
Indicate the manner and type of inspection forming the basis for the inspection report.
Identify any substantial structural deterioration, within a reasonable professional probability
based on the scope of the inspection, describe the extent of such deterioration, and identify any
recommended repairs for such deterioration.
State whether unsafe or dangerous conditions, as those terms are defined in the Florida
Building Code, were observed.
Recommend any remedial or preventive repair for any items that are damaged but are not
substantial structural deterioration.
Identify and describe any items requiring further inspection.
The condominium or cooperative must:
distribute a copy of the inspector-prepared summary of the inspection report to each
condominium unit owner or cooperative unit owner, regardless of the findings or
recommendations in the report, by United States mail or personal delivery and by electronic
transmission to unit owners who previously consented to received notice by electronic
transmission;
post a copy of the inspector-prepared summary in a conspicuous place on the condominium or
cooperative property; and
publish the full report and inspector-prepared summary on the association's website, if the
association is required to have a website.
A local enforcement agency may prescribe timelines and penalties with respect to compliance.
58 "Substantial structural deterioration" means substantial structural distress that negatively affects a building's general structural
condition and integrity. The term does not include surface imperfections such as cracks, distortion, sagging, deflections, misalignment,
signs of leakage, or peeling of finishes unless the licensed engineer or architect performing the phase one or phase two insp ection
determines that such surface imperfections are a sign of substantial structural deterioration.
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If a condominium or cooperative is required to have a milestone inspection, the association must
arrange for the milestone inspection to be performed and is responsible for ensuring compliance. The
association is responsible for all costs associated with the inspection. If the officers or directors of an
association willfully and knowingly fail to have a milestone inspection, such failure is a breach of the
officers' and directors' fiduciary relationship to the unit owners.
Milestone Inspections – Effect of the Bill
The bill requires every condominium or cooperative association to complete a milestone inspection
performed for each building that is three stories or more in height by December 31 of the year in which
the building reaches 25 years of age, based on the date the certificate of occupancy for the building
was issued, and every 10 years thereafter. The bill removed the provision that treated inland buildings
differently than coastal buildings by setting the deadline to complete a milestone inspection for inland
condominiums and cooperatives at 30 years.
The bill clarifies that condominium or cooperative associations that only include a single-family, two-
family, or three-family dwellings with three or fewer habitable stories above ground are not subject to
milestone inspection requirements.
The bill clarifies the deadline to complete a required milestone inspection. The bill requires that if a
building's certificate of occupancy was issued on or before December 31, 1994, the building's initial
milestone inspection must be performed before December 31, 2024. If the building's certificate of
occupancy was issued during the period of January 1, 1995, through December 31, 2000, the building's
initial milestone inspection must be performed before December 31, 2026.
The bill allows a local enforcement agency to extend the deadline for a building's initial milestone
inspection upon a showing of good cause by the condominium or cooperative association that the
association has entered into a contract for the performance of the milestone inspection but that the
inspection cannot reasonably be completed before the deadline.
The bill requires a condominium or cooperative association to notify the unit owners of a required
milestone inspection and provide the date that the milestone inspection must be completed within 14
days after receipt of the written notice from the local enforcement agency.
The bill allows phase one of the milestone inspection to be performed by, in addition to professional
engineers and architects:
a licensed general contractor with at least 5 years' experience building or constructing threshold
buildings, and
a licensed building code administrator or building code inspector with at least 5 years'
experience inspecting threshold buildings.
The bill requires a general contractor, building code administrator, or building code inspector who has
competed a phase one milestone inspection report to submit a copy of the report, to the building official
of the local jurisdiction where the association is located, under an attestation that the report complies
with all requirements, similar to the seal requirement for an professional engineer or architect.
Phase two of the milestone inspection may still only be performed by a professional engineer or
architect.
If a phase two inspection is required, the bill requires a condominium or cooperative association to
contract, within 90 days after receipt of the phase one inspection report, with an architect or
professional engineer to perform the phase two inspection. The architect or engineer contracted must
begin the phase two inspection within 90 days after entering into a contract with the association.
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The bill requires a condominium or cooperative association to distribute a copy of the inspector-
prepared summary of the inspection report to each unit owner, regardless of the findings or
recommendations in the report, within 60 days after receipt of the inspector-prepared summary of the
milestone inspection report from any phase one or phase two milestone inspection.
The bill clarifies that a governing body of a municipality may adopt an ordinance related to timeframes
for phase two inspection reports.
By October 1, 2023, the bill requires the Building Commission to create a standardized milestone
inspection report form for professionals to submit to the local enforcement agencies. Local enforcement
agencies must require that this form be used to submit such reports.
The bill allows associations to use a SIRS visual inspection report in place of a phase one milestone
inspection report if the report was performed within the past 5 years and meets the phase one
milestone inspection report requirements.
The bill removes a provision requiring a report from the Building Commission by a certain date because
such report has been completed.
The bill makes clarifying changes.
Structural Integrity Reserve Study – Current Situation
A reserve study is a budget-planning tool for community associations. Generally, a reserve study
consists of the following two parts:59 physical analysis and financial analysis.
In Florida law, "structural integrity reserve study" (SIRS) means a study of the reserve funds required
for future major repairs and replacement of the common areas based on a visual inspection of the
common areas. A SIRS may be performed by any person qualified to perform such study. However, the
visual inspection portion of the SIRS must be performed by a licensed engineer or an architect.
At a minimum, a SIRS must:
Identify the common areas being visually inspected,
State the estimated remaining useful life and the estimated replacement cost or deferred
maintenance expense of the common areas being visually inspected, and
Provide a recommended annual reserve amount that achieves the estimated replacement cost
or deferred maintenance expense of each common area being visually inspected by the end of
the estimated remaining useful life of each common area.
A condominium or cooperative must have a SIRS completed at least every 10 years after the
condominium's or cooperative’s creation for each building on the condominium or cooperative property
that is three stories or higher in height which includes, at a minimum, a study of the following items as
related to the structural integrity and safety of the building (SIRS items):
Roof.
Load-bearing walls or other primary structural members.
Floor.
Foundation.
Fireproofing and fire protection systems.
Plumbing.
Electrical systems.
59 Cedar Management Group, HOA Reserve Study: Why Does Your Community Need It?, https://cedarmanagementgroup.com/hoa-
reserve-study-community/#what (last visited Mar. 19, 2023); Kevin Leonard and Robert Nordlund, Understanding Reserves: A guide
to your association’s reserve fund & reserve study, 26-29 (1st ed. 2021); Community Associations Institute, National Reserve Study
Standards, https://www.reservestudy.com/wp-content/uploads/2019/01/NRSS-998-CAI-version-updated-2016.pdf (last visited Mar.
19, 2023).
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Waterproofing and exterior painting.
Windows.
Any other item that has a deferred maintenance expense or replacement cost that exceeds
$10,000 and the failure to replace or maintain such item negatively affects the items listed
above as determined by the licensed engineer or architect performing the visual inspection
portion of the structural integrity reserve study.
Before a developer turns over control of an association to unit owners other than the developer, the
developer must have a SIRS completed for each building on the condominium or cooperative property
that is three stories or higher in height.
Condominium or cooperative associations existing on or before July 1, 2022, which are controlled by
unit owners other than the developer, must have a SIRS completed by December 31, 2024, for each
building on the condominium or cooperative property that is three stories or higher in height.
If a condominium or cooperative association fails to complete a SIRS, such failure is a breach of an
officer's and director's fiduciary relationship to the unit owners.
Reserves
Every condominium and cooperative association must have a budget that sets forth the proposed
expenditure of funds for the maintenance, management, and operation of the association. The budget
is adopted for a 12-month period reflecting an association’s fiscal year, and it must provide a detailed
listing of the estimated revenues and expenses that the association reasonably projects for the coming
fiscal year. The annual budget is made up of two parts, the part covering the regular operations of the
association and the part covering the cost for capital expenses and deferred maintenance (reserves). 60
Reserves are funds that are set aside for capital expenses and deferred maintenance. Reserves
provide funds for major capital repairs or replacements that are needed intermittently such as replacing
a roof. The reserves are designed to ensure that an association will have the funds when the repairs
are needed and will not have to do a large special assessment. 61
The amount of funds that must be placed in reserve is determined by the condominium or cooperative
association’s most recent structural integrity reserve study. If the amount to be reserved for an item is
not in the association’s most recent structural integrity reserve study or the association has not
completed a structural integrity reserve study, then the association may use the traditional formula or
alternative formula to determine the amount of funds to reserve.
Current law also requires associations to have and fund reserve accounts for roof replacement, building
painting, pavement resurfacing, and any item for which the deferred maintenance expense or
replacement cost is greater than $10,000.62 There are two methods of calculating these reserves.
The first is the traditional formula, and the second is the alternative formula. The traditional formula
takes into account the estimated deferred maintenance or capital expenditure amount, estimated fund
balance, and number of years remaining until deferred maintenance or a capital expenditure is
needed.63
The alternative formula allows associations to maintain a pooled account for multiple reserve assets
that are similar or related. For example, an association responsible for managing two swimming pools
may create a pool reserve account for both pools instead of a reserve account for each pool. The
60 Ss. 718.112(2)(f) and 719.106(1)(j), F.S.
61 Ss. 718.112(2)(f) and 719.106(1)(j), F.S.
62 Id.
63 Id.; Rules 61B-22.005(3), and 61B-76.005(1), F.A.C.
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formula for a pooled account must provide for an annual contribution that will ensure the balance on
hand in the account is equal to or greater than the annual projected outflows from the account. 64
Waiver of Reserves
Effective December 1, 2024, a unit-owner controlled association may not waive collecting reserves or
collect less reserve funds than required for items that are required to be inspected in a SIRS for an
association building that is three stories or higher in height. In addition, unit-owner controlled
associations may not use such reserve funds for purposes other than their intended purpose.
For other reserve items, associations may waive funding reserves for capital expenditures and deferred
maintenance or provide funds that are less than the required amount by a majority of the voting
interests present at a properly called meeting. The waiver of reserves by the membership is only for the
current year, and a separate vote must be taken each year to waive the reserves or fund less than the
required amount.65 Associations may also vote to use reserve funds for purposes other than their
intended purpose, such as using funds from the roof reserve account for painting buildings, by a
majority of the voting interests present at a properly called meeting.66
Structural Integrity Reserve Study – Effect of the Bill
The bill allows the visual inspection portion of the SIRS to be performed by, in addition to professional
engineers and architects:
a licensed general contractor licensed with at least 5 years' experience building or constructing
threshold buildings, and
a licensed building code administrator or building code inspector with at least 5 years'
experience inspecting threshold buildings.
The bill clarifies that only if an association is required to complete a structural integrity reserve study, is
that association’s reserve account required to include SIRS items. The bill also clarifies that an item
does not need to be accounted for in the reserve account if it has a remaining useful life of more than
25 years.
The bill adds “exterior doors” to the list of SIRS items.
The bill clarifies the timeline to complete a SIRS. The bill requires all associations that are controlled by
unit owners other than the developer to have a SIRS completed by December 31, 2024, for each
building on the condominium property that is three stories or higher in height. The bill allows
associations that are required to complete a milestone inspection on or before December 31, 2026 to
complete the SIRS simultaneously with the milestone inspection. However, in no event may the SIRS
be completed after December 31, 2026.
The bill allows associations to use a milestone inspection report or an inspection report completed for a
similar local requirement in place of a SIRS visual inspection report if the report was performed within
the past 5 years and meets the SIRS requirements.
Developer and Non-developer Disclosures Prior to Sale – Current Situation
Developers and non-developer owners of condominium or cooperative units must give certain
documents to a prospective buyer or lessee before the execution of a contract for the sale of a
residential unit, including a copy of the inspector prepared summary of the milestone inspection report,
and a copy of the most recent SIRS or a statement that the association has not completed a SIRS. 67
64 Rules 61B-22.005(1), (3), and 61B-76.005(1), (3), F.A.C.
65 Ss. 718.112(2)(f) and 719.106(1)(j), F.S.; Rules 61B-22.005(8), and 61B-76.005(8), F.A.C.
66 Ss. 718.112(2)(f) and 719.106(1)(j), F.S.
67 Ss. 718.503(1) and 719.503(1), F.S.
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A developer may not close for 15 days following the execution of a purchase contract or certain lease
contracts, or the delivery of the required documents to the buyer, including the documents creating the
association, the bylaws, and the estimated operating budget of the association. A prospective
purchaser may void the contract within 15 days of his or her receipt of all the required documents. 68
Developer and Non-developer Disclosures Prior to Sale – Effect of the Bill
The bill requires the following disclosures relating to milestone inspections and SIRS requirements in
developer and non-developer sales contracts entered into on or after January 1, 2025, for the sale of a
residential unit:
If the association is required to have a milestone inspection or a structural integrity reserve
study, and the association has not completed the milestone inspection or structural integrity
reserve study, each contract must contain in conspicuous type a statement indicating that the
association is required to have a milestone inspection or a structural integrity reserve study and
the association has failed to complete such inspection or study, as applicable.
If the association is required to have a milestone inspection or a structural integrity reserve
study, and the association has completed such inspection or study, each contract must contain
a copy of the most recent milestone inspection report or structural integrity reserve study, as
applicable.
If the association is not required to have a milestone inspection or a structural integrity reserve
study, each contract must contain in conspicuous type a statement indicating that the
association is not required to have a milestone inspection or a structural integrity reserve study,
as applicable.
Enforcement– Current Situation
For condominium associations, the Division has jurisdiction to investigate complaints and enforce
compliance with the Condominium Act for associations that are controlled by a developer, a bulk buyer,
or a bulk assignee. Once a developer has turned over control of the condominium to the association the
Division only has jurisdiction to investigate complaints related to financial issues, elec tions, and unit
owner access to official records.69
For cooperative associations, the Division has jurisdiction to investigate complaints and enforce
compliance with the Cooperative Act.70
If a person believes there is a violation of the Condominium Act or Cooperative Act, he or she may file a
complaint with the Division. If the complaint is within the Division’s jurisdiction, the Division assigns an
investigator to the complaint. After investigating the complaint, if the Division has reasonable cause to
believe that a violation occurred, it may initiate an enforcement proceeding in its own name as follows: 71
Enter in a voluntary consent proceeding with the person who violated the Condominium Act or
Cooperative Act where he or she consents to stopping the violation.
Issue a cease and desist.
File an administrative complaint against the person.
File an enforcement action in circuit court to seek declaratory or injunctive relief on behalf of the
unit owners.
Remove an individual from his or her position as an officer or board member of a condominium
or cooperative.
Impose civil penalties in the amount of up to $5,000 per violation.
In order to enforce the Condominium Act and Cooperative Act, the Division may conduct investigations,
take sworn statements, receive evidence, and subpoena individuals and documentation. If the Division
68 Ss. 718.503(1) and 719.503(1), F.S., providing the developer disclosures before the sale or lease of a residential condominiu m or
cooperative unit, respectively.
69 S. 718.501(1), F.S.
70 S. 719.504(1), F.S.
71 Ss. 718.501(1)(d), (m), and 719.501(1)(d), (m), F.S.
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believes a person has destroyed or altered association documents or impaired the availability of
association documents during an investigation, the Division must refer it to local law enforcement.72
The Division has authority to investigate condominium and cooperative complaints related to the
procedural completion of milestone structural inspections and structural integrity reserve studies.
Alternative Dispute Resolution
There is an alternative dispute resolution process for certain disputes between unit owners and
condominium or cooperative associations. Before the institution of court litigation, a party to certain
disputes must either petition the division for nonbinding arbitration or initiate pre-suit mediation.73
Alternative dispute resolution offers a more efficient, cost-effective option to court litigation, but
alternative dispute resolution should not be used as a mechanism to encourage the filing of frivolous or
nuisance suits.74
Alternative dispute resolution is required for any disagreements between two or more parties that
involves:75
The authority of the board of directors to require an owner to take any action, or not to take any
action, involving that owner's unit or the appurtenance thereto and the authority of the board of
directors to alter or add to common areas or elements; 76
The board of directors' failure to:
o Properly conduct elections;
o Give adequate notice of meetings;
o Properly conduct meetings;
o Provide access to association books and records; and
A plan of termination.
The Division does not have jurisdiction to arbitrate or mediate disputes between a unit owner and an
association that involve: 77
Title to any unit or common element;
The interpretation or enforcement of any warranty;
The levy of a fee or assessment, or the collection of an assessment levied against a party;
The eviction or other removal of a tenant from a unit;
Alleged breaches of fiduciary duty by one or more directors; or
Claims for damages to a unit based upon the alleged failure of the association to maintain the
common elements or condominium property.
Recall and election disputes in condominium, cooperative, and homeowners’ associations are not
eligible for pre-suit mediation and must be arbitrated by the Division or filed directly with a court of
competent jurisdiction.78
Arbitration is binding on the parties if all parties in arbitration agree to be bound in a writing filed in the
arbitration,79 or if a complaint for a trial de novo is not filed in a court of competent jurisdiction in which
the condominium is located within 30 days after the arbitration decision is rendered. 80
72 Ss. 718.501(1)(c) and 719.501(1)(c), F.S.
73 S. 718.1255, 719.1255, and 719.106(1)(f), F.S.
74 S. 718.1255(3)(b ), F.S., providing legislative findings regarding the ad vantages of pre-suit alternative dispute resolution.
75 S. 718.1255(1)(a), F.S., defining the term “dispute.”
76 Id.
77 Id.
78 S. 718.1255(5), F.S.
79 S. 718.1255(4)(a), F.S.
80 S. 718.1255(4)(k), F.S.
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The filing fee for a petition to the Division to initiate nonbinding arbitration or pre-suit mediation is $50.81
The division employs full-time arbitrators and may certify private attorneys to conduct mandatory
nonbinding arbitration.
Current law also encourages parties to a condominium dispute to participate in voluntary mediation
through a Citizen Dispute Settlement Center.82
The mediation of disputes in condominium and cooperative associations is regulated under s. 720.311,
F.S., which also provides for the mediation of the certain homeowners’ association disputes. An
aggrieved party in a dispute must initiate the mediation proceedings by serving a written petition for
mediation to the opposing party. The petition must identify the specific nature of the dispute and the
basis for the alleged violations. The written offer must include five certified mediators that the aggrieved
party believes to be neutral. The serving of the petition tolls the statute of limitations for the dispute. If
emergency relief is required, a temporary injunction may be sought in court before the mediation. 83
The opposing party has 20 days to respond to the petition. If the opposing party fails to respond or
refuses to mediate, the aggrieved party may proceed to civil court. If the parties agree to mediation, the
mediator must hold the mediation within 90 days after the petition is sent to the opposing parties. The
parties share the costs of mediation except for the cost of attorney’s fees. Mediation is confidential, and
persons who are not parties to the dispute (other than attorneys or a designated representative for the
association) may not attend the mediation conference.84
The bylaws for condominium and cooperative associations must provide for mandatory dispute
resolution.85
Enforcement – Effect of the Bill
The bill redefines the term “dispute” to permit unit owners in condominium and cooperative associations
to utilize the mediation process in s. 720.311, F.S., related to disputes in homeowners’ associations.
Under the bill, condominium and cooperative unit owners may use the mediation process for disputes
related to failure of a board of administration to:
Obtain a milestone inspection.
Obtain a structural integrity reserve study.
Fund reserve accounts as required for a SIRS item.
Make or provide necessary maintenance or repairs of the condominium property as
recommended by a milestone inspection or a structural integrity reserve study.
The bill provides the following avenues for injunctive relief:
A unit owner may institute an action in a court of competent jurisdiction in which the
condominium is located to seek injunctive relief against the association to:
o Enforce compliance with milestone inspection requirements and structural integrity
reserve study requirements.
o Prevent irreparable injury to unit owners and the association and to protect human
health, safety, and welfare caused or threatened by any violation of the milestone
inspection requirements and structural integrity reserve study requirements.
The Division may, in the name of the state, seek injunctive relief in any court of competent
jurisdiction in which the condominium or cooperative is located to obtain relief against the
association to enforce compliance with milestone inspection requirements. This relief is in
addition to, and not in lieu of, any other available penalty or remedy.
81 S. 718.1255(4)(a), F.S.
82 S. 718.1255(2), F.S.
83 Id.
84 S. 720.311(2)(b), F.S.
85 Ss. 718.112(2)(k) and 719.106(1)(l), F.S., relating to condominium and cooperative associations, respectively.
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Any local authority having jurisdiction to enforce milestone inspection requirements may seek
injunctive relief from any court of competent jurisdiction in which the condominium or
cooperative is located against the association to enforce compliance with milestone inspection
requirements, upon an affidavit of the local authority having jurisdiction specifying the manner in
which the condominium does not conform to such requirements.
Condominium Flood Coverage Requirements – Current Situation
Until December 2022, Citizens Property Insurance Corporation (Citizens) could not require a
policyholder or applicant to obtain flood insurance as a condition of coverage from Citizens if a
policyholder or applicant signed a form affirming the following:
That Citizens does not provide flood insurance coverage, and
That, if the policyholder or applicant did not obtain flood coverage in addition to a policy from
Citizens, the risk is not covered for flood damage. 86
Under s. 627.715, F.S., authorized insurers may issue personal lines residential flood coverage. Such
coverage includes, but is not limited to, standard flood insurance, which is equivalent to that provided
by the National Flood Insurance Program (NFIP), and preferred and customized flood insurance, which
provide additional coverage from that provided by standard flood coverage.87
In December 2022, the Legislature established a requirement that Citizens personal lines residential
policyholders and applicants must purchase and maintain flood insurance coverage that is at least
equivalent to the coverage provided by the NFIP. The policyholder or applicant must execute a form
affirming that Citizens does not provide flood insurance and that if the policyholder or applicant does
not obtain flood insurance, his or her risk will not be eligible for coverage from Citizens. Citizens may
deny coverage to a personal lines residential policyholder or applicant who refuses to purchase and
maintain flood insurance.
The requirement to purchase is being phased in as follows:
Policyholders whose Citizens’ policies do not provide wind coverage are not required to
purchase flood coverage as a condition of maintaining their Citizens’ policies.
All policyholders whose property insured by Citizens is located within the special flood hazard
area defined by the Federal Emergency Management Agency must have flood coverage in
place:
o At the time of initial policy issuance for all new policies issued by Citizens on or after
April 1, 2023.
o By the time of policy renewal for all personal lines residential policies renewing on or
after July 1, 2023.
All other policyholders must have flood coverage in place for policies effective on or after:
o January 1, 2024, for property valued at $600,000 or more.
o January 1, 2025, for property valued at $500,000 or more.
o January 1, 2026, for property valued at $400,000 or more.
o January 1, 2027, for all other personal lines residential property insured by Citizens.
A Citizens policyholder who does not obtain flood coverage and has executed such a form, and who
makes a claim for water damage against Citizens, has the burden of proving the damage was not
caused by flooding.88 Additionally, Citizens may deny coverage to a policyholder or applicant who
refuses to execute the form.89
Condominium Flood Coverage Requirements – Effect of the Bill
86 S. 627.351(6)(aa), F.S. (2021).
87 Current NFIP personal lines flood policies have limits of $250,000 per claim.
88 S. 627.351(6)(aa), F.S. (2022).
89 Id.
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The bill provides exemptions from the purchase of flood insurance coverage by certain Citizens
policyholders who own or reside in condominiums. In addition to individuals whose Citizens policy does
not cover wind, the following Citizens policyholders do not need to purchase flood insurance to be
eligible for coverage from Citizens:
Condominium unit owners or tenants who are covered under a master flood policy issued to
someone other than the owner of the unit.
Condominium unit owners or tenants who reside in a unit with occupiable space that is not less
than 40 feet above the grade plane,90 as defined in the Florida Building Code. Units on the fifth
floor above the grade plane or higher are deemed to meet this criteria. Additionally, the bill
specifies that unit owners or condominium associations may submit a certificate from licensed
engineers, surveyors and mappers, or architects indicating which units meet this criteria.
Except as otherwise provided, the bill provides an effective date of July 1, 2023.
B. SECTION DIRECTORY:
Section 1: Amends s. 468.4334, F.S.; relating to community association managers.
Section 2: Amends s. 553.899, F.S.; relating to milestone inspections.
Section 3: Amends s. 627.351, F.S.; relating to Citizens flood insurance requirements.
Section 4: Amends s. 718.103, F.S.; relating to the definition of structural integrity reserve study.
Section 5: Amends s. 718.112, F.S.; relating to requirements of a structural integrity reserve study.
Section 6: Amends s. 718.1255, F.S.; relating to alternative dispute resolution at the Division.
Section 7: Amends s. 718.13, F.S.; relating to injunctive relief.
Section 8: Amends s. 718.301, F.S.; making conforming changes.
Section 9: Amends s. 718.503, F.S.; relating to provisions and disclosures in sales contracts.
Section 10: Amends s. 719.103, F.S.; relating to the definition of structural integrity reserve study.
Section 11: Amends s. 719.106, F.S.; relating to requirements of a structural integrity reserve study.
Section 12: Amends s. 719.132, F.S.; relating to injunctive relief.
Section 13: Amends s. 719.301, F.S.; making conforming changes.
Section 14: Amends s. 719.503, F.S.; relating to provisions and disclosures in sales contracts.
Section 15: Provides effective dates.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
DBPR may incur an insignificant indeterminant increase in expenditures related to creating a
uniform inspection form and possible increased complaints related to milestone inspection and
SIRS requirements.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
90 The grade plane is a reference plan representing the average of the finished ground level adjoining a building at its exterio r walls.
2020 Florida Building Code, Residential, 7th Edition, § R202, available at https://codes.iccsafe.org/content/FLRC2020P1/chapter-2-
definitions (last visited Mar. 22, 2023); 2020 Florida Building Code, Building, 7th Edition, § 202, available at
https://codes.iccsafe.org/content/FLBC2020P1/chapter-2-definit ions (last visited Mar. 22, 2023).
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C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Condominium and cooperative associations and unit owners in those communities may incur expenses
related to the required conduct of a milestone inspection and reserve study. However, the associations
and unit owners may benefit from the long-term financial planning benefits of a reserve study and from
the maintenance or repair of association property.
Providers of reserve studies and architects, engineers, general contractors, building officials, and
inspectors who offer milestone inspections and SIRS may benefit from additional business due to the
required milestone inspections and reserve studies.
The bill will reduce the number of individual condominium unit owners who have to purchase additional
flood insurance coverage.
D. FISCAL COMMENTS:
Fannie Mae91 and the Federal Housing Administration92 have altered their requirements for loans
secured by condominiums and cooperatives in response to the Champlain Towers collapse, including
requiring:
The association to have assessments sufficient to fund any repairs; and
That at least 10 percent of the association’s assessments are dedicated to budget reserves.
Fannie Mae also provides that condominiums and cooperatives with significant deferred maintenance
or that have received a directive from a regulatory authority or inspection agency to make repairs due to
unsafe conditions are not eligible for purchase until the repairs are made. 93
Although the underwriting standard was adopted before the Champlain Towers South collapse, Freddie
Mac also requires that at least 10 percent of a condominium association’s assessments be dedicated to
budget reserves.94
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:
The bill requires the Building Commission to create a uniform inspection form which may be used
statewide for milestone inspection and SIRS reporting requirements. There is adequate rulemaking
authority to do so.
91 Fannie Mae, Lender Letter (LL-20221-14), Oct. 12, 2021, available at: https://singlefamily.fanniemae.com/ media/29411/display
(last visited Mar. 19, 2023).
92 Freddie Mac, Handbook 4000.1, FHA Single Family Housing Policy Handbook, Condominium Project Approval , sec. II.C.2.vi., p.
530, available at: https://www.hud.gov/sites/dfiles/OCHCO/documents/4000.1hsgh -102021.pdf (last visited Mar. 19, 2023).
93 Fannie Mae, supra note 91.
94 Freddie Mac, Established Condominium Projects, Effective June 1, 2022, available at:
https://guide.freddiemac.com/app/guide/section/5701.5 (last visited Mar. 19, 2023).
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C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On March 22, 2023, the Regulatory Reform & Economic Development Subcommittee adopted three
amendments and reported the bill favorably as a committee substitute. The committee substitute:
Makes the use of the Building Commission’s uniform milestone inspection report form to be
mandatory rather than optional.
Changes the due date for the Building Commission’s form to October 1, 2023.
Clarifies that only associations required to complete a structural integrity reserve study are
required to maintain reserves for items required to be in such study.
Clarifies when condominium association unit owners with Citizens Property Insurance have to
have flood insurance.
This analysis is drafted to the committee substitute as passed by the Regulatory Reform & Economic
Development Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 1395 2023
1 A bill to be entitled
2 An act relating to the management and safety of
3 condominium and cooperative buildings; amending s.
4 468.4334, F.S.; revising professional practice
5 standards for community association managers and
6 community association management firms; amending s.
7 553.899, F.S.; revising legislative findings; revising
8 definitions; requiring condominium associations and
9 cooperative associations to have milestone inspections
10 performed on certain buildings after they reach 25
11 years of age; removing provisions relating to certain
12 buildings located near coastlines; revising the date
13 on which a building's certificate of occupancy was
14 issued to trigger the requirement of a milestone
15 inspection; authorizing an extension of the deadline
16 for the completion of a milestone inspection under
17 certain circumstances; requiring certain notice be
18 given to unit owners within a specified time period;
19 authorizing additional persons to conduct phase one
20 inspections; specifying the only persons authorized to
21 conduct phase two inspections; requiring certain
22 associations to enter into contracts with certain
23 persons within a specified timeframe; requiring that a
24 phase two inspection begin within a specified
25 timeframe; requiring certain inspection reports to
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26 bear certain attestations; authorizing the governing
27 body of a municipality to adopt certain ordinances;
28 removing a specified review by the Florida Building
29 Commission; removing the requirement that the
30 commission submit a certain report to the Governor and
31 Legislature by a specified date; requiring the
32 commission to create standardized milestone inspection
33 forms by a specified date; requiring local enforcement
34 agencies to use such standardized forms to submit
35 certain reports; conforming provisions to changes made
36 by the act; amending s. 627.351, F.S.; revising
37 requirements for certain condominium unit owners
38 relating to the purchase of flood insurance as a
39 condition for maintaining certain policies issued by
40 Citizens Property Insurance Corporation; amending ss.
41 718.103 and 719.103, F.S.; revising the definition of
42 "structural integrity reserve study"; amending ss.
43 718.112 and 719.106, F.S.; requiring certain items
44 that will require maintenance, repair, or replacement
45 within a certain timeframe to be included in reserve
46 accounts; removing a date by which certain structural
47 integrity reserve studies must be completed; providing
48 an exception to the requirement of a structural
49 integrity reserve study; requiring certain
50 associations' budgets to include reserves, in an
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51 amount determined by a specified study, for certain
52 items; requiring the structural integrity reserve
53 study to include exterior doors; authorizing certain
54 inspections to be used in place of other inspections
55 under certain circumstances; requiring that the
56 inspector-prepared summary of the inspection report be
57 provided to certain persons within a specified time
58 period; conforming provisions to changes made by the
59 act; amending s. 718.1255, F.S.; revising the
60 definition of a "dispute" for purposes of alternative
61 dispute resolution; requiring certain disputes to be
62 submitted to presuit mediation; creating ss. 718.13
63 and 719.132, F.S.; authorizing unit owners and certain
64 entities to file an action in court for certain
65 injunctive relief; amending ss. 718.301 and 719.301,
66 F.S.; conforming provisions to changes made by the
67 act; amending ss. 718.503 and 719.503, F.S.; requiring
68 that certain provisions be included in certain
69 contracts entered into after specified dates under
70 certain circumstances; conforming provisions to
71 changes made by the act; providing effective dates.
72
73 Be It Enacted by the Legislature of the State of Florida:
74
75 Section 1. Paragraph (b) of subsection (1) of section
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76 468.4334, Florida Statutes, is amended to read:
77 468.4334 Professional practice standards; liability. —
78 (1)
79 (b) If a community association manager or a community
80 association management firm has a contract with a community
81 association that has a building on the association's property
82 that is subject to s. 553.899, the community association manager
83 or the community association management firm must comply with
84 that section as directed by the board.
85 Section 2. Subsection (13) of section 553.899, Florida
86 Statutes, is renumbered as subsection (12), subsections (1)
87 through (8) and (11) and present subsection (12) are amended,
88 and a new subsection (13) is added to that section, to read:
89 553.899 Mandatory structural inspections for condominium
90 and cooperative buildings.—
91 (1) The Legislature finds that maintaining the structural
92 integrity of a building throughout the its service life of the
93 building is of paramount importance in order to ensure that
94 buildings are structurally sound so as to not pose a threat to
95 the public health, safety, or welfare. As such, the Legislature
96 finds that the imposition of a statewide structural inspection
97 program for aging condominium and cooperative buildings in this
98 state is necessary to ensure that such buildings are safe for
99 continued use.
100 (2) As used in this section, the terms:
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101 (a) "Milestone inspection" means a structural inspection
102 of a building, including an inspection of load-bearing elements
103 walls and the primary structural members and primary structural
104 systems as those terms are defined in s. 627.706. Phase one of
105 the milestone inspection must be performed, by a general
106 contractor licensed under chapter 489 with at least 5 years'
107 experience building or constructing threshold buildings, a
108 building code administrator or building code inspector licensed
109 under part XII of chapter 468 with at least 5 years' experience
110 inspecting threshold buildings, or by a licensed architect or
111 engineer authorized to practice in this state. Phase two of the
112 milestone inspection must be performed by a licensed architect
113 or engineer authorized to practice in this state. Such
114 structural inspection must be completed with the purpose for the
115 purposes of attesting to the life safety and adequacy of the
116 structural components of the building and, to the extent
117 reasonably possible, determining the general structural
118 condition of the building as it affects the safety of such
119 building, including a determination of any necessary
120 maintenance, repair, or replacement of any structural component
121 of the building. The purpose of such inspection is not to
122 determine if the condition of an existing building is in
123 compliance with the Florida Building Code or the firesafety
124 code.
125 (b) "Substantial structural deterioration" means
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126 substantial structural distress or a substantial structural
127 weakness that negatively affects a building's general structural
128 condition and integrity. The term does not include surface
129 imperfections such as cracks, distortion, sagging, deflections,
130 misalignment, signs of leakage, or peeling of finishes unless
131 the licensed general contractor, building code administrator,
132 building code inspector, engineer, or architect performing the
133 phase one or phase two inspection determines that such surface
134 imperfections are a sign of substantial structural
135 deterioration.
136 (3) A condominium association under chapter 718 and a
137 cooperative association under chapter 719 must have a milestone
138 inspection performed for each building that is three stories or
139 more in height by December 31 of the year in which the building
140 reaches 25 30 years of age, based on the date the certificate of
141 occupancy for the building was issued, and every 10 years
142 thereafter. If the building is located within 3 miles of a
143 coastline as defined in s. 376.031, the condominium association
144 or cooperative association must have a milestone inspection
145 performed by December 31 of the year in which the building
146 reaches 25 years of age, based on the date the certificate of
147 occupancy for the building was issued, and every 10 years
148 thereafter. The condominium association or cooperative
149 association must arrange for the milestone inspection to be
150 performed and is responsible for ensuring compliance with the
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151 requirements of this section. The condominium association or
152 cooperative association is responsible for all costs associated
153 with the inspection. This subsection does not apply to
154 associations that only include a single-family, two-family, or
155 three-family dwellings dwelling with three or fewer habitable
156 stories above ground.
157 (4) If a milestone inspection is required under this
158 section and the building's certificate of occupancy was issued
159 on or before December 31, 1994 July 1, 1992, the building's
160 initial milestone inspection must be performed before December
161 31, 2024. If a milestone inspection is required under this
162 section and the building's certificate of occupancy was issued
163 during the period of January 1, 1995, through December 31, 2000,
164 the building's initial milestone inspection must be performed
165 before December 31, 2026. The local enforcement agency may
166 extend the deadline for a building's initial milestone
167 inspection upon a showing of good cause by the condominium or
168 cooperative association that the association has entered into a
169 contract for the performance of the milestone inspection but
170 that the inspection cannot reasonably be completed before the
171 deadline. If the date of issuance for the certificate of
172 occupancy is not available, the date of issuance of the
173 building's certificate of occupancy shall be the date of
174 occupancy evidenced in any record of the local building
175 official.
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176 (5) Upon determining that a building must have a milestone
177 inspection, the local enforcement agency must provide written
178 notice of such required inspection to the condominium
179 association or cooperative association by certified mail, return
180 receipt requested. The condominium or cooperative association
181 must notify the unit owners of the required milestone inspection
182 within 14 days after receipt of the written notice from the
183 local enforcement agency and provide the date that the milestone
184 inspection must be completed.
185 (6) Within 180 days after receiving the written notice
186 under subsection (5), the condominium association or cooperative
187 association must complete phase one of the milestone inspection.
188 For purposes of this section, completion of phase one of the
189 milestone inspection means the licensed general contractor,
190 building code administrator, building code inspector, engineer,
191 or architect who performed the phase one inspection submitted
192 the inspection report by e-mail, United States Postal Service,
193 or commercial delivery service to the local enforcement agency.
194 (7) A milestone inspection consists of two phases:
195 (a) For phase one of the milestone inspection, a general
196 contractor licensed under chapter 489 with at least 5 years'
197 experience building or constructing threshold buildings, a
198 building code administrator or building code inspector licensed
199 under part XII of chapter 468 with at least 5 years' experience
200 inspecting threshold buildings, or a licensed architect or
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201 engineer authorized to practice in this state shall perform a
202 visual examination of habitable and nonhabitable areas of a
203 building, including the major structural components of a
204 building, and provide a qualitative assessment of the structural
205 conditions of the building. If the general contractor, building
206 code administrator, building code inspector, architect, or
207 engineer finds no signs of substantial structural deterioration
208 to any building components under visual examination, phase two
209 of the inspection, as provided in paragraph (b), is not
210 required. A general contractor, a building code administrator, a
211 building code inspector, an architect, or an engineer who
212 completes a phase one milestone inspection shall prepare and
213 submit an inspection report pursuant to subsection (8).
214 (b) A phase two of the milestone inspection must be
215 performed if any substantial structural deterioration is
216 identified during phase one. Only a licensed architect or
217 engineer authorized to practice in this state may perform a
218 phase two milestone inspection. If a phase two inspection is
219 required, the association must contract, within 90 days after
220 receipt of the phase one inspection report, with a licensed
221 architect or engineer to perform the phase two inspection. The
222 licensed architect or engineer contracted with to perform th e
223 inspection must begin the phase two inspection within 90 days
224 after entering into a contract with the association. A phase two
225 inspection may involve destructive or nondestructive testing at
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226 the inspector's direction. The inspection may be as extensive o r
227 as limited as necessary to fully assess areas of structural
228 distress in order to confirm that the building is structurally
229 sound and safe for its intended use and to recommend a program
230 for fully assessing and repairing distressed and damaged
231 portions of the building. When determining testing locations,
232 the inspector must give preference to locations that are the
233 least disruptive and most easily repairable while still being
234 representative of the structure. An inspector who completes a
235 phase two milestone inspection shall prepare and submit an
236 inspection report pursuant to subsection (8).
237 (8) Upon completion of a phase one or phase two milestone
238 inspection, the general contractor, building code administrator,
239 building code inspector, architect, or engineer who performed
240 the inspection must submit a copy, or a sealed copy, if
241 applicable, of the inspection report with a separate summary of,
242 at minimum, the material findings and recommendations in the
243 inspection report to the condominium association or cooper ative
244 association, and to the building official of the local
245 government which has jurisdiction. The inspection report must,
246 at a minimum, meet all of the following criteria:
247 (a)1. Bear an attestation and signature, or electronic
248 signature, of the licensed general contractor, building code
249 administrator, or building code inspector who performed the
250 inspection; or
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251 2. Bear the seal and signature, or the electronic
252 signature, of the licensed engineer or architect who performed
253 the inspection,
254
255 indicating that such report complies with the statutory
256 requirements for the inspection.
257 (b) Indicate the manner and type of inspection forming the
258 basis for the inspection report.
259 (c) Identify any substantial structural deterioration,
260 within a reasonable professional probability based on the scope
261 of the inspection, describe the extent of such deterioration,
262 and identify any recommended repairs for such deterioration.
263 (d) State whether unsafe or dangerous conditions, as those
264 terms are defined in the Florida Building Code, were observed.
265 (e) Recommend any remedial or preventive repair for any
266 items that are damaged but are not substantial structural
267 deterioration.
268 (f) Identify and describe any items requiring further
269 inspection.
270 (11) A board of county commissioners or the governing body
271 of a municipality may adopt an ordinance requiring that a
272 condominium or cooperative association schedule or commence
273 repairs for substantial structural deterioration within a
274 specified timeframe after the local enforcement agency receives
275 a phase two inspection report; however, such repairs must be
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276 commenced within 365 days after receiving such report. If an
277 association fails to submit proof to the local enforcement
278 agency that repairs have been scheduled or have commenced for
279 substantial structural deterioration identified in a phase two
280 inspection report within the required timeframe, the local
281 enforcement agency must review and determine if the building is
282 unsafe for human occupancy.
283 (12) The Florida Building Commission shall review the
284 milestone inspection requirements under this section and make
285 recommendations, if any, to the Legislature to ensure
286 inspections are sufficient to determine the structural integrity
287 of a building. The commission must provide a written repor t of
288 any recommendations to the Governor, the President of the
289 Senate, and the Speaker of the House of Representatives by
290 December 31, 2022.
291 (13) By October 1, 2023, the Florida Building Commission
292 shall create a standardized milestone inspection report form for
293 the submission of such reports to local enforcement agencies by
294 general contractors, building code administrators, building code
295 inspectors, engineers, and architects. Local enforcement
296 agencies must require that the standardized form be used to
297 submit such reports.
298 Section 3. Paragraph (aa) of subsection (6) of section
299 627.351, Florida Statutes, is amended to read:
300 627.351 Insurance risk apportionment plans.—
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301 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
302 (aa) Except as otherwise provided in this paragraph, the
303 corporation shall require the securing and maintaining of flood
304 insurance as a condition of coverage of a personal lines
305 residential risk. The insured or applicant must execute a form
306 approved by the office affirming that flood insurance is not
307 provided by the corporation and that if flood insurance is not
308 secured by the applicant or insured from an insurer other than
309 the corporation and in addition to coverage by the corporation,
310 the risk will not be eligible for coverage by the cor poration.
311 The corporation may deny coverage of a personal lines
312 residential risk to an applicant or insured who refuses to
313 secure and maintain flood insurance. The requirement to purchase
314 flood insurance shall be implemented as follows:
315 1. Except as provided in subparagraphs 2. and 3., all
316 personal lines residential policyholders must have flood
317 coverage in place for policies effective on or after:
318 a. January 1, 2024, for property valued at $600,000 or
319 more.
320 b. January 1, 2025, for property valued at $500,000 or
321 more.
322 c. January 1, 2026, for property valued at $400,000 or
323 more.
324 d. January 1, 2027, for all other personal lines
325 residential property insured by the corporation.
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326 2. All personal lines residential policyholders whose
327 property insured by the corporation is located within the
328 special flood hazard area defined by the Federal Emergency
329 Management Agency must have flood coverage in place:
330 a. At the time of initial policy issuance for all new
331 personal lines residential policies issued by the corporation on
332 or after April 1, 2023.
333 b. By the time of the policy renewal for all personal
334 lines residential policies renewing on or after July 1, 2023.
335 3. Policyholders whose policies issued by the corporation
336 do not provide coverage for the peril of wind are not required
337 to purchase flood insurance as a condition for maintaining their
338 policies issued by with the corporation, if such policy:
339 a. Does not provide coverage for the peril of wind.
340 b. Provides coverage under a condominium unit owners or
341 condominium tenant form and the policyholder's unit is covered
342 under a master flood policy issued to someone other than the
343 policyholder.
344 c. Provides coverage under a condominium unit owners or
345 condominium tenant form and the policyholder resides in a
346 condominium unit with occupiable space that is not less than 40
347 feet above the grade plane, as defined in the Florida Building
348 Code. A unit located on the fifth floor above the grade plane or
349 higher is deemed to be not less than 40 feet above the grade
350 plane, as defined in the Florida Building Code. A unit owner or
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351 a condominium association may submit a certification from an
352 engineer licensed under chapter 471, a surveyor and mapper
353 licensed under chapter 472, or an architect licensed under
354 chapter 481, detailing which units in the condominium
355 association are not less than 40 feet above the grade plane, as
356 defined in the Florida Building Code, and the corporation may
357 rely on such certification.
358
359 The flood insurance required under this paragraph must meet, at
360 a minimum, the coverage available from the National Flood
361 Insurance Program or the requirements of subparagraphs s.
362 627.715(1)(a)1., 2., and 3.
363 Section 4. Subsection (25) of section 718.103, Florida
364 Statutes, is amended to read:
365 718.103 Definitions.—As used in this chapter, the term:
366 (25) "Structural integrity reserve study" means a study of
367 the reserve funds required for future major repairs and
368 replacement of the common areas based on a visual inspection of
369 the common areas. A structural integrity reserve study may be
370 performed by any person qualified to perform such study.
371 However, the visual inspection portion of the structural
372 integrity reserve study must be performed by an engineer
373 licensed under chapter 471, a general contractor licensed under
374 chapter 489 with at least 5 years' experience building or
375 constructing threshold buildings as defined in s. 553.71, a
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376 building code administrator or building code inspector licensed
377 under part XII of chapter 468 with at least 5 years' experience
378 inspecting threshold buildings as defined in s. 553.71, or an
379 architect licensed under chapter 481. At a minimum, a structural
380 integrity reserve study must identify the common areas being
381 visually inspected, state the estimated remaining useful life
382 and the estimated replacement cost or deferred maintenance
383 expense of the common areas being visually inspected, and
384 provide a recommended annual reserve amount that achieves the
385 estimated replacement cost or deferred maintenance expense of
386 each common area being visually inspected by the end of the
387 estimated remaining useful life of each common area.
388 Section 5. Paragraphs (f), (g), and (h) of subsection (2)
389 of section 718.112, Florida Statutes, are amended to read:
390 718.112 Bylaws.—
391 (2) REQUIRED PROVISIONS.—The bylaws shall provide for the
392 following and, if they do not do so, shall be deemed to include
393 the following:
394 (f) Annual budget.—
395 1. The proposed annual budget of estimated revenues and
396 expenses must be detailed and must show the amounts budgeted by
397 accounts and expense classifications, including, at a minimum,
398 any applicable expenses listed in s. 718.504(21). The board
399 shall adopt the annual budget at least 14 days before the start
400 of the association's fiscal year. In the event that the board
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401 fails to timely adopt the annual budget a second time, it is
402 deemed a minor violation and the prior year's budget shall
403 continue in effect until a new budget is adopted. A
404 multicondominium association must adopt a separate budget of
405 common expenses for each condominium the association operates
406 and must adopt a separate budget of common expenses for the
407 association. In addition, if the association maintains limited
408 common elements with the cost to be shared only by those
409 entitled to use the limited common elements as provided for in
410 s. 718.113(1), the budget or a schedule attached to it must show
411 the amount budgeted for this maintenance. If, after turnover of
412 control of the association to the unit owners, any of the
413 expenses listed in s. 718.504(21) are not applicable, they do
414 not need to be listed.
415 2.a. In addition to annual operating expenses, the budget
416 must include reserve accounts for capital expenditures and
417 deferred maintenance. These accounts must include, but are not
418 limited to, roof replacement, building painting, and pavement
419 resurfacing, regardless of the amount of deferred maintenance
420 expense or replacement cost, and any other item that has a
421 deferred maintenance expense or replacement cost that exceeds
422 $10,000, and those items listed in paragraph (g) that will
423 require maintenance, repair, or replacement within the next 25
424 years. The amount to be reserved for an item is determined by
425 the association's most recent structural integrity reserve study
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426 that must be completed as provided in paragraph (g) by December
427 31, 2024. If the amount to be reserved for an item is not in the
428 association's initial or most recent structural integrity
429 reserve study or the association has not completed a structural
430 integrity reserve study, the amount must be computed using a
431 formula based upon estimated remaining useful life and estimated
432 replacement cost or deferred maintenance expense of the reserve
433 item. However, any item with a remaining useful life greater
434 than 25 years is not required to be included in the study. If an
435 association is required to complete a structural integrity
436 reserve study, the association's budget must maintain reserves,
437 in the amount recommended in the association's most recent
438 structural integrity reserve study, for the items listed in
439 paragraph (g). The association may adjust replacement reserve
440 assessments annually to take into account any changes in
441 estimates or extension of the useful life of a reserve item
442 caused by deferred maintenance. The members of a unit -owner-
443 controlled association may determine, by a majority vote at a
444 duly called meeting of the association, to provide no reserves
445 or less reserves than required by this subsection. Effective
446 December 31, 2024, the members of a unit-owner-controlled
447 association that is required to complete a structural integrity
448 reserve study may not determine to provide no reserves or less
449 reserves than required by this subsection for items listed in
450 paragraph (g).
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451 b. Before turnover of control of an association by a
452 developer to unit owners other than a developer under s.
453 718.301, the developer-controlled association may not vote to
454 waive the reserves or reduce funding of the reserves. If a
455 meeting of the unit owners has been called to determine whether
456 to waive or reduce the funding of reserves and no such resul t is
457 achieved or a quorum is not attained, the reserves included in
458 the budget shall go into effect. After the turnover, the
459 developer may vote its voting interest to waive or reduce the
460 funding of reserves.
461 3. Reserve funds and any interest accruing thereon shall
462 remain in the reserve account or accounts, and may be used only
463 for authorized reserve expenditures unless their use for other
464 purposes is approved in advance by a majority vote at a duly
465 called meeting of the association. Before turnover of control of
466 an association by a developer to unit owners other than the
467 developer pursuant to s. 718.301, the developer-controlled
468 association may not vote to use reserves for purposes other than
469 those for which they were intended. Effective December 31, 2024,
470 members of a unit-owner-controlled association that is required
471 to complete a structural integrity reserve study may not vote to
472 use reserve funds, or any interest accruing thereon, that are
473 reserved for items listed in paragraph (g) for any other purpose
474 other than their intended purpose.
475 4. The only voting interests that are eligible to vote on
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476 questions that involve waiving or reducing the funding of
477 reserves, or using existing reserve funds for purposes other
478 than purposes for which the reserves were intended, are the
479 voting interests of the units subject to assessment to fund the
480 reserves in question. Proxy questions relating to waiving or
481 reducing the funding of reserves or using existing reserve funds
482 for purposes other than purposes for which the reserves were
483 intended must contain the following statement in capitalized,
484 bold letters in a font size larger than any other used on the
485 face of the proxy ballot: WAIVING OF RESERVES, IN WHOLE OR IN
486 PART, OR ALLOWING ALTERNATIVE USES OF EXISTING RESERVES MAY
487 RESULT IN UNIT OWNER LIABILITY FOR PAYMENT OF UNANTICIPATED
488 SPECIAL ASSESSMENTS REGARDING THOSE ITEMS.
489 (g) Structural integrity reserve study.—
490 1. An association must have a structural integrity reserve
491 study completed at least every 10 years after the condominium's
492 creation for each building on the condominium property that is
493 three stories or higher in height which includes, at a minimum,
494 a study of the following items as related to the structural
495 integrity and safety of the building:
496 a. Roof.
497 b. Load-bearing walls or other primary structural members.
498 c. Floor.
499 d. Foundation.
500 e. Fireproofing and fire protection systems.
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501 f. Plumbing.
502 g. Electrical systems.
503 h. Waterproofing and exterior painting.
504 i. Windows and exterior doors.
505 j. Any other item that has a deferred maintenance expense
506 or replacement cost that exceeds $10,000 and the failure to
507 replace or maintain such item negatively affects the items
508 listed in sub-subparagraphs a.-i., as determined by the licensed
509 engineer, general contractor, building code administrator,
510 building code inspector, or architect performing the visual
511 inspection portion of the structural integrity reserve study.
512 2. Before a developer turns over control of an association
513 to unit owners other than the developer, the developer must have
514 a structural integrity reserve study completed for each building
515 on the condominium property that is three stories or higher in
516 height.
517 3. Associations that existing on or before July 1, 2022,
518 which are controlled by unit owners other than the developer,
519 must have a structural integrity reserve study completed by
520 December 31, 2024, for each building on the condominium property
521 that is three stories or higher in height. An association that
522 is required to complete a milestone inspection on or before
523 December 31, 2026, in accordance with s. 553.899, may complete
524 the structural integrity reserve study simultaneously with the
525 milestone inspection. In no event may the structural integrity
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526 reserve study be completed after December 31, 2026.
527 4. If an association fails to complete a structural
528 integrity reserve study pursuant to this paragraph, such failure
529 is a breach of an officer's and director's fiduciary
530 relationship to the unit owners under s. 718.111(1).
531 5. If the milestone inspection required by s. 553.899, or
532 an inspection completed for a similar local requirement, was
533 performed within the past 5 years and meets the requirements of
534 this paragraph, such inspection may be used in place of the
535 visual inspection portion of the structural integrity reserve
536 study.
537 (h) Mandatory milestone inspections.—If an association is
538 required to have a milestone inspection performed pursuant to s.
539 553.899, the association must arrange for the milestone
540 inspection to be performed and is responsible for ensuring
541 compliance with the requirements of s. 553.899. The association
542 is responsible for all costs associated with the inspection. If
543 the officers or directors of an association willfully and
544 knowingly fail to have a milestone inspection performed pursuant
545 to s. 553.899, such failure is a breach of the officers' and
546 directors' fiduciary relationship to the unit owners under s.
547 718.111(1)(a). Within 60 days after Upon completion of a phase
548 one or phase two milestone inspection and receipt of the
549 inspector-prepared summary of the milestone inspection report
550 from any phase one or phase two milestone inspection from the
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551 architect or engineer who performed the inspection, the
552 association must distribute a copy of the inspector -prepared
553 summary of the inspection report to each unit owner, regardless
554 of the findings or recommendations in the report, by United
555 States mail or personal delivery and by electronic transmission
556 to unit owners who previously consented to receive notice by
557 electronic transmission; must post a copy of the inspector-
558 prepared summary in a conspicuous place on the condominium
559 property; and must publish the full report and inspector -
560 prepared summary on the association's website, if the
561 association is required to have a website. If the visual
562 inspection portion of the structural integrity reserve study
563 required under paragraph (g) was performed within the past 5
564 years and meets the requirements for a milestone inspection in
565 s. 553.899, such inspection may be used in place of the ph ase
566 one milestone inspection.
567 Section 6. Effective July 1, 2027, subsection (5) of
568 section 718.1255, Florida Statutes, is amended, and paragraph
569 (d) is added to subsection (1) of that section, to read:
570 718.1255 Alternative dispute resolution; mediation;
571 nonbinding arbitration; applicability.—
572 (1) DEFINITIONS.—As used in this section, the term
573 "dispute" means any disagreement between two or more parties
574 that involves:
575 (d) The failure of a board of administration, when
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576 required by this chapter or a governing document of the
577 association, to:
578 1. Obtain a milestone inspection as required under s.
579 553.899.
580 2. Obtain a structural integrity reserve study as required
581 under s. 718.112(2)(g).
582 3. Fund reserve accounts as required for an item
583 identified in s. 718.112(2)(g).
584 4. Make or provide necessary maintenance or repairs of the
585 condominium property as recommended by a milestone inspection or
586 a structural integrity reserve study.
587
588 "Dispute" does not include any disagreement that primarily
589 involves: title to any unit or common element; the
590 interpretation or enforcement of any warranty; the levy of a fee
591 or assessment, or the collection of an assessment levied against
592 a party; the eviction or other removal of a tenant from a unit;
593 alleged breaches of fiduciary duty by one or more directors; or
594 claims for damages to a unit based upon the alleged failure of
595 the association to maintain the common elements or condominium
596 property.
597 (5) PRESUIT MEDIATION.—In lieu of the initiation of
598 nonbinding arbitration as provided in subsections (1)-(4), a
599 party may submit a dispute to presuit mediation in accordance
600 with s. 720.311, except for:
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601 (a) Disputes listed in paragraph (1)(d) are not subject to
602 nonbinding arbitration under subsection (4) and must be
603 submitted to presuit mediation in accordance with s. 720.311.;
604 however,
605 (b) Election and recall disputes are not eligible for
606 mediation and such disputes must be arbitrated by the division
607 or filed in a court of competent jurisdiction.
608 Section 7. Section 718.13, Florida Statutes, is created to
609 read:
610 718.13 Injunctive relief.—
611 (1) A unit owner may institute an action in a court of
612 competent jurisdiction in which the condominium is located to
613 seek injunctive relief against the association to:
614 (a) Enforce compliance with milestone inspection
615 requirements under s. 553.899 and structural integrity reserve
616 study requirements under s. 718.112(2)(g).
617 (b) Prevent irreparable injury to unit owners and the
618 association and to protect human health, safety, and welfare
619 caused or threatened by any violation of the milestone
620 inspection requirements under s. 553.899 and structural
621 integrity reserve study requirements under s. 718.112(2)(g).
622 (2) The division may, in the name of the state, seek
623 injunctive relief in any court of competent jurisdiction in
624 which the condominium is located to obtain relief against the
625 association to enforce compliance with milestone inspection
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626 requirements under s. 553.899. A proceeding commenced under this
627 subsection is in addition to, and not in lieu of, any other
628 penalty or remedy under this chapter.
629 (3) Any local authority having jurisdiction to enforce
630 milestone inspection requirements may seek injunctive relief
631 from any court of competent jurisdiction in which the
632 condominium is located against the association to enforce
633 compliance with milestone inspection requirements under s.
634 553.899, upon an affidavit of the local authority having
635 jurisdiction specifying the manner in which the condominium does
636 not conform to the requirements of s. 553.899.
637 Section 8. Paragraph (p) of subsection (4) of section
638 718.301, Florida Statutes, is amended to read:
639 718.301 Transfer of association control; claims of defect
640 by association.—
641 (4) At the time that unit owners other than the developer
642 elect a majority of the members of the board of administration
643 of an association, the developer shall relinquish control of the
644 association, and the unit owners shall accept control.
645 Simultaneously, or for the purposes of paragraph (c) not more
646 than 90 days thereafter, the developer shall deliver to the
647 association, at the developer's expense, all property of the
648 unit owners and of the association which is held or controlled
649 by the developer, including, but not limited to, the following
650 items, if applicable, as to each condominium operated by the
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651 association:
652 (p) Notwithstanding when the certificate of occupancy was
653 issued or the height of the building, a milestone inspection
654 report in compliance with s. 553.899 included in the official
655 records, under seal of an architect or engineer or under
656 attestation of a general contractor, building code
657 administrator, or building code inspector authorized to practice
658 in this state indicating that such report complies with the
659 statutory requirements for the inspection, and attesting to
660 required maintenance, condition, useful life, and replacement
661 costs of the following applicable condominium property
662 comprising a turnover inspection report:
663 1. Roof.
664 2. Structure, including load-bearing walls and primary
665 structural members and primary structural systems as those terms
666 are defined in s. 627.706.
667 3. Fireproofing and fire protection systems.
668 4. Elevators.
669 5. Heating and cooling systems.
670 6. Plumbing.
671 7. Electrical systems.
672 8. Swimming pool or spa and equipment.
673 9. Seawalls.
674 10. Pavement and parking areas.
675 11. Drainage systems.
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676 12. Painting.
677 13. Irrigation systems.
678 14. Waterproofing.
679 Section 9. Paragraph (b) of subsection (1) and paragraph
680 (a) of subsection (2) of section 718.503, Florida Statutes, are
681 amended, and paragraph (d) is added to subsection (1) and
682 paragraph (e) is added to subsection (2) of that section, to
683 read:
684 718.503 Developer disclosure prior to sale; nondeveloper
685 unit owner disclosure prior to sale; voidability.—
686 (1) DEVELOPER DISCLOSURE.—
687 (b) Copies of documents to be furnished to prospective
688 buyer or lessee.—Until such time as the developer has furnished
689 the documents listed below to a person who has entered into a
690 contract to purchase a residential unit or lease it for more
691 than 5 years, the contract may be voided by that person,
692 entitling the person to a refund of any deposit together with
693 interest thereon as provided in s. 718.202. The contract may be
694 terminated by written notice from the proposed buyer or lessee
695 delivered to the developer within 15 days after the buyer or
696 lessee receives all of the documents required by this section.
697 The developer may not close for 15 days after the execution of
698 the agreement and delivery of the documents to the buyer as
699 evidenced by a signed receipt for documents unless the buyer is
700 informed in the 15-day voidability period and agrees to close
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701 before the expiration of the 15 days. The developer shall retain
702 in his or her records a separate agreement signed by the buyer
703 as proof of the buyer's agreement to close before the expiration
704 of the voidability period. The developer must retain such proof
705 for a period of 5 years after the date of the closing of the
706 transaction. The documents to be delivered to the prospective
707 buyer are the prospectus or disclosure statement with all
708 exhibits, if the development is subject to s. 718.504, or, if
709 not, then copies of the following which are applicable:
710 1. The question and answer sheet described in s. 718.504,
711 and declaration of condominium, or the proposed declaration if
712 the declaration has not been recorded, which shall include the
713 certificate of a surveyor approximately representing the
714 locations required by s. 718.104.
715 2. The documents creating the association.
716 3. The bylaws.
717 4. The ground lease or other underlying lease of the
718 condominium.
719 5. The management contract, maintenance contract, and
720 other contracts for management of the association and operation
721 of the condominium and facilities used by the unit owners having
722 a service term in excess of 1 year, and any management contracts
723 that are renewable.
724 6. The estimated operating budget for the condominium and
725 a schedule of expenses for each type of unit, including fees
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726 assessed pursuant to s. 718.113(1) for the maintenance of
727 limited common elements where such costs are shared only by
728 those entitled to use the limited common elements.
729 7. The lease of recreational and other facilities that
730 will be used only by unit owners of the subject condominium.
731 8. The lease of recreational and other common facilities
732 that will be used by unit owners in common with unit owners of
733 other condominiums.
734 9. The form of unit lease if the offer is of a leasehold.
735 10. Any declaration of servitude of properties serving the
736 condominium but not owned by unit owners or leased to them or
737 the association.
738 11. If the development is to be built in phases or if the
739 association is to manage more than one condominium, a
740 description of the plan of phase development or the arrangements
741 for the association to manage two or more condominiums.
742 12. If the condominium is a conversion of existing
743 improvements, the statements and disclosure required by s.
744 718.616.
745 13. The form of agreement for sale or lease of units.
746 14. A copy of the floor plan of the unit and the plot plan
747 showing the location of the residential buildings and the
748 recreation and other common areas.
749 15. A copy of all covenants and restrictions that will
750 affect the use of the property and are not contained in the
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751 foregoing.
752 16. If the developer is required by state or local
753 authorities to obtain acceptance or approval of any dock or
754 marina facilities intended to serve the condominium, a copy of
755 any such acceptance or approval acquired by the time of filing
756 with the division under s. 718.502(1), or a statement that such
757 acceptance or approval has not been acquired or received.
758 17. Evidence demonstrating that the developer has an
759 ownership, leasehold, or contractual interest in the land upon
760 which the condominium is to be developed.
761 18. A copy of the inspector-prepared summary of the
762 milestone inspection report as described in ss. 553.899 and
763 718.112(2)(h) ss. 553.899 and 718.301(4)(p).
764 19. A copy of the association's most recent structural
765 integrity reserve study or a statement that the association has
766 not completed a structural integrity reserve study.
767 (d) Milestone inspection or structural integrity reserve
768 study.—
769 1. If the association is required to have a milestone
770 inspection as described in ss. 553.899 and 718.112(2)(h) or a
771 structural integrity reserve study as described in s.
772 718.112(2)(g), and the association has not completed the
773 milestone inspection or structural integrity reserve study, each
774 contract entered into on or after January 1, 2025, for the sale
775 of a residential unit must contain in conspicuous type a
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776 statement indicating that the association is required to have a
777 milestone inspection or a structural integrity reserve study and
778 the association has failed to complete such inspection or study,
779 as applicable.
780 2. If the association is required to have a milestone
781 inspection as described in ss. 553.899 and 718.112(2)(h) or a
782 structural integrity reserve study as described in s.
783 718.112(2)(g), and the association has completed such inspection
784 or study, each contract entered into on or after January 1,
785 2025, for the sale of a residential unit must contain a copy of
786 the most recent milestone inspection report or structural
787 integrity reserve study, as applicable.
788 3. If the association is not required to have a milestone
789 inspection as described in ss. 553.899 and 718.112(2)(h) or a
790 structural integrity reserve study as described in s.
791 718.112(2)(g), each contract entered into on or after January 1,
792 2025, for the sale of a residential unit must contain in
793 conspicuous type a statement indicating that the association is
794 not required to have a milestone inspection or a structural
795 integrity reserve study, as applicable.
796 (2) NONDEVELOPER DISCLOSURE.—
797 (a) Each unit owner who is not a developer as defined by
798 this chapter must comply with this subsection before the sale of
799 his or her unit. Each prospective purchaser who has entered into
800 a contract for the purchase of a condominium unit is entitled,
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801 at the seller's expense, to a current copy of all of the
802 following:
803 1. The declaration of condominium.
804 2. Articles of incorporation of the association.
805 3. Bylaws and rules of the association.
806 4. Financial information required by s. 718.111.
807 5. A copy of the inspector-prepared summary of the
808 milestone inspection report as described in ss. 553.899 and
809 718.112(2)(h) ss. 553.899 and 718.301(4)(p), if applicable.
810 6. The association's most recent structural integrity
811 reserve study or a statement that the association has not
812 completed a structural integrity reserve study.
813 7. The document entitled "Frequently Asked Questions and
814 Answers" required by s. 718.504.
815 (e)1. If the association is required to have a milestone
816 inspection as described in ss. 553.899 and 718.112(2)(h) or a
817 structural integrity reserve study as described in s.
818 718.112(2)(g), and the association has not completed the
819 milestone inspection or structural integrity reserve study, each
820 contract entered into on or after January 1, 2025, for the sale
821 of a residential unit must contain in conspicuous type a
822 statement indicating that the association is required to have a
823 milestone inspection or a structural integrity reserve study and
824 the association has failed to complete such inspection or study,
825 as applicable.
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826 2. If the association is required to have a milestone
827 inspection as described in ss. 553.899 and 718.112(2)(h) or a
828 structural integrity reserve study as described in s.
829 718.112(2)(g), and the association has completed such inspection
830 or study, each contract entered into on or after January 1,
831 2025, for the sale of a residential unit must contain a copy of
832 the most recent milestone inspection report or structural
833 integrity reserve study, as applicable.
834 3. If the association is not required to have a milestone
835 inspection as described in ss. 553.899 and 718.112(2)(h) or a
836 structural integrity reserve study as described in s.
837 718.112(2)(g), each contract entered into on or after January 1,
838 2025, for the sale of a residential unit must contain in
839 conspicuous type a statement indicating that the association is
840 not required to have a milestone inspection or a structural
841 integrity reserve study, as applicable.
842 Section 10. Subsection (24) of section 719.103, Florida
843 Statutes, is amended to read:
844 719.103 Definitions.—As used in this chapter:
845 (24) "Structural integrity reserve study" means a study of
846 the reserve funds required for future major repairs and
847 replacement of the common areas based on a visual inspection of
848 the common areas. A structural integrity reserve study may be
849 performed by any person qualified to perform such study.
850 However, the visual inspection portion of the structural
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851 integrity reserve study must be performed by an engineer
852 licensed under chapter 471, a general contractor licensed under
853 chapter 489 with at least 5 years' experience building or
854 constructing threshold buildings as defined in s. 553.71; a
855 building code administrator or building code inspector licensed
856 under part XII of chapter 468 with at least 5 years' experience
857 inspecting threshold buildings as defined in s. 553.71; or an
858 architect licensed under chapter 481. At a minimum, a structural
859 integrity reserve study must identify the common areas being
860 visually inspected, state the estimated remaining useful life
861 and the estimated replacement cost or deferred maintenance
862 expense of the common areas being visually inspected, and
863 provide a recommended annual reserve amount that achieves the
864 estimated replacement cost or deferred maintenance expense of
865 each common area being visually inspected by the end of the
866 estimated remaining useful life of each common area.
867 Section 11. Paragraphs (j), (k), and (l) of subsection (1)
868 of section 719.106, Florida Statutes, are amended to read:
869 719.106 Bylaws; cooperative ownership.—
870 (1) MANDATORY PROVISIONS.—The bylaws or other cooperative
871 documents shall provide for the following, and if they do not,
872 they shall be deemed to include the following:
873 (j) Annual budget.—
874 1. The proposed annual budget of common expenses must be
875 detailed and must show the amounts budgeted by accounts and
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876 expense classifications, including, if applicable, but not
877 limited to, those expenses listed in s. 719.504(20). The board
878 of administration shall adopt the annual budget at least 14 days
879 before the start of the association's fiscal year. In the event
880 that the board fails to timely adopt the annual budget a second
881 time, it is deemed a minor violation and the prior year's budget
882 shall continue in effect until a new budget is adopted.
883 2. In addition to annual operating expenses, the budget
884 must include reserve accounts for capital expenditures and
885 deferred maintenance. These accounts must include, but are not
886 be limited to, roof replacement, building painting, and pavement
887 resurfacing, regardless of the amount of deferred maintenance
888 expense or replacement cost, and for any other items for which
889 the deferred maintenance expense or replacement cost exceeds
890 $10,000, and those items listed in paragraph (k) that will
891 require maintenance, repair, or replacement within the next 25
892 years. The amount to be reserved for an item is determined by
893 the association's most recent structural integrity reserve study
894 that must be completed as provided in paragraph (k) by December
895 31, 2024. If the amount to be reserved for an item is not in the
896 association's initial or most recent structural integrity
897 reserve study or the association has not completed a struc tural
898 integrity reserve study, the amount must be computed by means of
899 a formula which is based upon estimated remaining useful life
900 and estimated replacement cost or deferred maintenance expense
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901 of the reserve item. However, any item with a remaining useful
902 life greater than 25 years is not required to be included in the
903 study. If an association is required to complete a structural
904 integrity reserve study, the association's budget must maintain
905 reserves, in the amount recommended in the association's most
906 recent structural integrity reserve study, for the items listed
907 in paragraph (k). The association may adjust replacement reserve
908 assessments annually to take into account any changes in
909 estimates or extension of the useful life of a reserve item
910 caused by deferred maintenance. The members of a unit-owner-
911 controlled association may determine, at a duly called meeting
912 of the association, for a fiscal year to provide no reserves or
913 reserves less adequate than required by this subsection. Before
914 turnover of control of an association by a developer to unit
915 owners other than a developer under s. 719.301, the developer -
916 controlled association may not vote to waive the reserves or
917 reduce funding of the reserves. Effective December 31, 2024, a
918 unit-owner-controlled association that is required to complete a
919 structural integrity reserve study may not determine to provide
920 no reserves or reserves less adequate than required by this
921 paragraph for items listed in paragraph (k). If a meeting of the
922 unit owners has been called to determine to provide no reserves,
923 or reserves less adequate than required, and such result is not
924 attained or a quorum is not attained, the reserves as included
925 in the budget shall go into effect.
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926 3. Reserve funds and any interest accruing thereon s hall
927 remain in the reserve account or accounts, and shall be used
928 only for authorized reserve expenditures unless their use for
929 other purposes is approved in advance by a vote of the majority
930 of the voting interests, voting in person or by limited proxy at
931 a duly called meeting of the association. Before turnover of
932 control of an association by a developer to unit owners other
933 than the developer under s. 719.301, the developer may not vote
934 to use reserves for purposes other than that for which they were
935 intended. Effective December 31, 2024, members of a unit -owner-
936 controlled association that is required to complete a structural
937 integrity reserve study may not vote to use reserve funds, or
938 any interest accruing thereon, that are reserved for items
939 listed in paragraph (k) for purposes other than their intended
940 purpose.
941 (k) Structural integrity reserve study.—
942 1. An association must have a structural integrity reserve
943 study completed at least every 10 years for each building on the
944 cooperative property that is three stories or higher in height
945 that includes, at a minimum, a study of the following items as
946 related to the structural integrity and safety of the building:
947 a. Roof.
948 b. Load-bearing walls or other primary structural members.
949 c. Floor.
950 d. Foundation.
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951 e. Fireproofing and fire protection systems.
952 f. Plumbing.
953 g. Electrical systems.
954 h. Waterproofing and exterior painting.
955 i. Windows and exterior doors.
956 j. Any other item that has a deferred maintenance expense
957 or replacement cost that exceeds $10,000 and the failure to
958 replace or maintain such item negatively affects the items
959 listed in sub-subparagraphs a.-i., as determined by the licensed
960 engineer, general contractor, building code administrator,
961 building code inspector, or architect performing the visual
962 inspection portion of the structural integrity reserve study.
963 2. Before a developer turns over control of an association
964 to unit owners other than the developer, the developer must have
965 a structural integrity reserve study completed for each building
966 on the cooperative property that is three stories or higher in
967 height.
968 3. Associations that existing on or before July 1, 2022,
969 which are controlled by unit owners other than the developer,
970 must have a structural integrity reserve study completed by
971 December 31, 2024, for each building on the cooperative property
972 that is three stories or higher in height. An association that
973 is required to complete a milestone inspection on or before
974 December 31, 2026, in accordance with s. 553.899, may complete
975 the structural integrity reserve study simultaneously with the
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976 milestone inspection. In no event may the structural integrity
977 reserve study be completed after December 31, 2026.
978 4. If an association fails to complete a structural
979 integrity reserve study pursuant to this paragraph, such failure
980 is a breach of an officer's and director's fiduciary
981 relationship to the unit owners under s. 719.104(8).
982 5. If the milestone inspection required by s. 553.899, or
983 an inspection completed for a similar local requirement, was
984 performed within the past 5 years and meets the requirements of
985 this paragraph, such inspection may be used in place of the
986 visual inspection portion of the structural integrity reserve
987 study.
988 (l) Mandatory milestone inspections.—If an association is
989 required to have a milestone inspection performed pursuant to s.
990 553.899, the association must arrange for the milestone
991 inspection to be performed and is responsible for ensuring
992 compliance with the requirements of s. 553.899. The asso ciation
993 is responsible for all costs associated with the inspection. If
994 the officers or directors of an association willfully and
995 knowingly fail to have a milestone inspection performed pursuant
996 to s. 553.899, such failure is a breach of the officers' and
997 directors' fiduciary relationship to the unit owners under s.
998 719.104(8)(a). Within 60 days after Upon completion of a phase
999 one or phase two milestone inspection and receipt of the
1000 inspector-prepared summary of the milestone inspection report
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1001 from any phase one or phase two milestone inspection the
1002 architect or engineer who performed the inspection, the
1003 association must distribute a copy of the inspector -prepared
1004 summary of the inspection report to each unit owner, regardless
1005 of the findings or recommendations in the report, by United
1006 States mail or personal delivery and by electronic transmission
1007 to unit owners who previously consented to receive notice by
1008 electronic transmission; must post a copy of the inspector -
1009 prepared summary in a conspicuous place on the cooperative
1010 property; and must publish the full report and inspector -
1011 prepared summary on the association's website, if the
1012 association is required to have a website. If the visual
1013 inspection portion of the structural integrity reserve study
1014 required under paragraph (k) was performed within the past 5
1015 years and meets the requirements for a milestone inspection in
1016 s. 553.899, such inspection may be used in place of the phase
1017 one milestone inspection.
1018 Section 12. Section 719.132, Florida Statutes, is created
1019 to read:
1020 719.132 Injunctive relief.—
1021 (1) A unit owner may institute an action in a court of
1022 competent jurisdiction in which the cooperative is located to
1023 seek injunctive relief against the association to:
1024 (a) Enforce compliance with milestone inspection
1025 requirements under s. 553.899 and structural integrity reserve
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1026 requirements under s. 719.106(1)(k).
1027 (b) Prevent irreparable injury to unit owners and the
1028 association and to protect human health, safety, and welfare
1029 caused or threatened by any violation of the milestone
1030 inspection requirements under s. 553.899 and structural
1031 integrity reserve requirements under s. 719.106(1)(k).
1032 (2) The division may, in the name of the state, seek
1033 injunctive relief in any court of competent jurisdiction in
1034 which the cooperative is located to obtain relief against the
1035 association to enforce compliance with milestone inspection
1036 requirements under s. 553.899. A proceeding commenced under this
1037 subsection is in addition to, and not in lieu of, any other
1038 penalty or remedy under this chapter.
1039 (3) Any local authority having jurisdiction to enforce
1040 milestone inspection requirements may seek injunctive relief
1041 from any court of competent jurisdiction in which the
1042 cooperative is located against the association to enforce
1043 compliance with milestone inspection requirements under s.
1044 553.899, upon an affidavit of the local authority having
1045 jurisdiction specifying the manner in which the cooperative does
1046 not conform to the requirements of s. 553.899.
1047 Section 13. Paragraph (p) of subsection (4) of section
1048 719.301, Florida Statutes, is amended to read:
1049 719.301 Transfer of association control.—
1050 (4) When unit owners other than the developer elect a
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1051 majority of the members of the board of administration of an
1052 association, the developer shall relinquish control of the
1053 association, and the unit owners shall accept control.
1054 Simultaneously, or for the purpose of paragraph (c) not more
1055 than 90 days thereafter, the developer shall deliver to the
1056 association, at the developer's expense, all property of the
1057 unit owners and of the association held or controlled by the
1058 developer, including, but not limited to, the following items,
1059 if applicable, as to each cooperative operated by the
1060 association:
1061 (p) Notwithstanding when the certificate of occupancy was
1062 issued or the height of the building, a milestone inspection
1063 report in compliance with s. 553.899 included in the official
1064 records, under seal of an architect or engineer or under
1065 attestation of a general contractor, building code
1066 administrator, or building code inspector authorized to practice
1067 in this state indicating that such report complies with the
1068 statutory requirements for the inspection, attesting to required
1069 maintenance, condition, useful life, and replacement costs of
1070 the following applicable cooperative property comprising a
1071 turnover inspection report:
1072 1. Roof.
1073 2. Structure, including load-bearing walls and primary
1074 structural members and primary structural systems as those terms
1075 are defined in s. 627.706.
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1076 3. Fireproofing and fire protection systems.
1077 4. Elevators.
1078 5. Heating and cooling systems.
1079 6. Plumbing.
1080 7. Electrical systems.
1081 8. Swimming pool or spa and equipment.
1082 9. Seawalls.
1083 10. Pavement and parking areas.
1084 11. Drainage systems.
1085 12. Painting.
1086 13. Irrigation systems.
1087 14. Waterproofing.
1088 Section 14. Paragraph (b) of subsection (1) and paragraph
1089 (a) of subsection (2) of section 719.503, Florida Statutes, are
1090 amended, and paragraph (d) is added to subsection (1) and
1091 paragraph (d) is added to subsection (2) of that section, to
1092 read:
1093 719.503 Disclosure prior to sale.—
1094 (1) DEVELOPER DISCLOSURE.—
1095 (b) Copies of documents to be furnished to prospective
1096 buyer or lessee.—Until such time as the developer has furnished
1097 the documents listed below to a person who has entered into a
1098 contract to purchase a unit or lease it for more than 5 years,
1099 the contract may be voided by that person, entitling the person
1100 to a refund of any deposit together with interest thereon as
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1101 provided in s. 719.202. The contract may be terminated by
1102 written notice from the proposed buyer or lessee delivered to
1103 the developer within 15 days after the buyer or lessee receives
1104 all of the documents required by this section. The developer may
1105 not close for 15 days after the execution of the agreement and
1106 delivery of the documents to the buyer as evidenced by a receipt
1107 for documents signed by the buyer unless the buyer is informed
1108 in the 15-day voidability period and agrees to close before the
1109 expiration of the 15 days. The developer shall retain in his or
1110 her records a separate signed agreement as proof of the buyer's
1111 agreement to close before the expiration of the voidability
1112 period. The developer must retain such proof for a period of 5
1113 years after the date of the closing transaction. The documents
1114 to be delivered to the prospective buyer are the prospectus or
1115 disclosure statement with all exhibits, if the development is
1116 subject to s. 719.504, or, if not, then copies of the following
1117 which are applicable:
1118 1. The question and answer sheet described in s. 719.504,
1119 and cooperative documents, or the proposed cooperative documents
1120 if the documents have not been recorded, which shall include the
1121 certificate of a surveyor approximately representing the
1122 locations required by s. 719.104.
1123 2. The documents creating the association.
1124 3. The bylaws.
1125 4. The ground lease or other underlying lease of the
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1126 cooperative.
1127 5. The management contract, maintenance contract, and
1128 other contracts for management of the association and operation
1129 of the cooperative and facilities used by the unit owners having
1130 a service term in excess of 1 year, and any management contracts
1131 that are renewable.
1132 6. The estimated operating budget for the cooperative and
1133 a schedule of expenses for each type of unit, including fees
1134 assessed to a shareholder who has exclusive use of limited
1135 common areas, where such costs are shared only by those entitled
1136 to use such limited common areas.
1137 7. The lease of recreational and other facilities that
1138 will be used only by unit owners of the subject cooperative.
1139 8. The lease of recreational and other common areas that
1140 will be used by unit owners in common with unit owners of other
1141 cooperatives.
1142 9. The form of unit lease if the offer is of a leasehold.
1143 10. Any declaration of servitude of properties serving the
1144 cooperative but not owned by unit owners or leased to them or
1145 the association.
1146 11. If the development is to be built in phases or if the
1147 association is to manage more than one cooperative, a
1148 description of the plan of phase development or the arrangements
1149 for the association to manage two or more cooperatives.
1150 12. If the cooperative is a conversion of existing
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1151 improvements, the statements and disclosure required by s.
1152 719.616.
1153 13. The form of agreement for sale or lease of units.
1154 14. A copy of the floor plan of the unit and the plot plan
1155 showing the location of the residential buildings and the
1156 recreation and other common areas.
1157 15. A copy of all covenants and restrictions that will
1158 affect the use of the property and are not contained in the
1159 foregoing.
1160 16. If the developer is required by state or local
1161 authorities to obtain acceptance or approval of any dock or
1162 marina facilities intended to serve the cooperative, a copy of
1163 any such acceptance or approval acquired by the time of filing
1164 with the division pursuant to s. 719.502(1) or a statement that
1165 such acceptance or approval has not been acquired or received.
1166 17. Evidence demonstrating that the developer has an
1167 ownership, leasehold, or contractual interest in the land upon
1168 which the cooperative is to be developed.
1169 18. A copy of the inspector-prepared summary of the
1170 milestone inspection report as described in ss. 553.899 and
1171 719.106(1)(l) ss. 553.899 and 719.301(4)(p), if applicable.
1172 19. A copy of the association's most recent structural
1173 integrity reserve study or a statement that the association has
1174 not completed a structural integrity reserve study.
1175 (d) Milestone inspection or structural integrity reserve
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1176 study.—
1177 1. If the association is required to have a milest one
1178 inspection as described in ss. 553.899 and 719.106(1)(l) or a
1179 structural integrity reserve study as described in s.
1180 719.106(1)(k), and the association has not completed the
1181 milestone inspection or structural integrity reserve study, each
1182 contract entered into on or after January 1, 2025, for the sale
1183 of a residential unit must contain in conspicuous type a
1184 statement indicating that the association is required to have a
1185 milestone inspection or a structural integrity reserve study and
1186 the association has failed to complete such inspection or study,
1187 as applicable.
1188 2. If the association is required to have a milestone
1189 inspection as described in ss. 553.899 and 719.106(1)(l) or a
1190 structural integrity reserve study as described in s.
1191 719.106(1)(k), and the association has completed such inspection
1192 or study, each contract entered into on or after January 1,
1193 2025, for the sale of a residential unit must contain a copy of
1194 the most recent milestone inspection report or structural
1195 integrity reserve study, as applicable.
1196 3. If the association is not required to have a milestone
1197 inspection as described in ss. 553.899 and 719.106(1)(l) or a
1198 structural integrity reserve study as described in s.
1199 719.106(1)(k), each contract entered into on or after January 1,
1200 2025, for the sale of a residential unit must contain in
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1201 conspicuous type a statement indicating that the association is
1202 not required to have a milestone inspection or a structural
1203 integrity reserve study, as applicable.
1204 (2) NONDEVELOPER DISCLOSURE.—
1205 (a) Each unit owner who is not a developer as defined by
1206 this chapter must comply with this subsection before the sale of
1207 his or her interest in the association. Each prospective
1208 purchaser who has entered into a contract for the purchase of an
1209 interest in a cooperative is entitled, at the seller's expense,
1210 to a current copy of all of the following:
1211 1. The articles of incorporation of the association.
1212 2. The bylaws and rules of the association.
1213 3. A copy of the question and answer sheet as provided in
1214 s. 719.504.
1215 4. A copy of the inspector-prepared summary of the
1216 milestone inspection report as described in ss. 553.899 and
1217 719.106(1)(l) ss. 553.899 and 719.301(4)(p), if applicable.
1218 5. A copy of the association's most recent structural
1219 integrity reserve study or a statement that the association has
1220 not completed a structural integrity reserve study.
1221 (d)1. If the association is required to have a milestone
1222 inspection as described in ss. 553.899 and 719.106(1)(l) or a
1223 structural integrity reserve study as described in s.
1224 719.106(1)(k), and the association has not completed the
1225 milestone inspection or structural integrity reserve study, each
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 1395 2023
1226 contract entered into on or after January 1, 2025, for the sale
1227 of a residential unit must contain in conspicuous type a
1228 statement indicating that the association is required to have a
1229 milestone inspection or a structural integrity reserve study and
1230 the association has failed to complete such inspection or study,
1231 as applicable.
1232 2. If the association is required to have a milestone
1233 inspection as described in ss. 553.899 and 719.106(1)(l) or a
1234 structural integrity reserve study as described in s.
1235 719.106(1)(k), and the association has completed such inspection
1236 or study, each contract entered into on or after January 1,
1237 2025, for the sale of a residential unit must contain a copy of
1238 the most recent milestone inspection report or structural
1239 integrity reserve study, as applicable.
1240 3. If the association is not required to have a milestone
1241 inspection as described in ss. 553.899 and 719.106(1)(l) or a
1242 structural integrity reserve study as described in s.
1243 719.106(1)(k), each contract entered into on or after January 1,
1244 2025, for the sale of a residential unit must contain in
1245 conspicuous type a statement indicating that the association is
1246 not required to have a milestone inspection or a structural
1247 integrity reserve study, as applicable.
1248 Section 15. Except as otherwise expressly provided in this
1249 act, this act shall take effect July 1, 2023.
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hb1395-01-c1
COMMERCE COMMITTEE
CS/HB 1395 by Rep. Lopez, V.
Management and Safety of Condominium and Cooperative Buildings
AMENDMENT SUMMARY
April 17, 2023
Amendment 1 by Rep. Lopez, V. (strike-all):
• Delays the requirement for certain condominium Citizens policyholders to obtain flood
insurance until January 1, 2027.
• Clarifies applicability of the milestone inspection requirement to those buildings with at
least one residential unit and at least 3 stories in height, subject in whole or part to a
residential or mixed-use association.
• Clarifies that the association is responsible for arranging and completing the milestone
inspection, but may be reimbursed by any unit owners or other owners for expenses as
agreed upon in documents governing the property.
• Allows multicondominiums to use an alternative funding method approved by DBPR
instead of maintaining reserves.
• Removes “floor” and “foundation” on the list of SIRS items and adds “primary structural
systems.”
• Removes the ability of certain general contractors and building code professionals to
perform phase 1 of the milestone inspection and the visual inspection of the structural
integrity reserve study (SIRS).
• Allows certain reserve study specialists to complete the visual inspection of the SIRS.
• Clarifies the purpose and content of a SIRS.
• Provides that the association is responsible to maintain common elements as stated in
the governing documents.
• Clarifies documentation and inspection requirements for turnover of the association.
• Provides boilerplate language that must be used in sales contracts to provide notice of
milestone inspection and SIRS reports.
• Removes the specific injunctive procedures related to milestone inspections.
• Requires the Florida Building Commission to create a building safety program.
• Appropriates, for the 2023-2024 fiscal year, the sums of $1,301,928 in recurring funds
and $67,193 in nonrecurring funds from the Division of Florida Condominiums,
Timeshares, and Mobile Homes Trust Fund to DBPR, and provides 10 full-time
equivalent positions with associated salary rate of 487,264 to implement the bill.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1395 (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: Commerce Committee
2 Representative Lopez, V. offered the following:
3
4 Amendment (with title amendment)
5 Remove everything after the enacting clause and insert:
6 Section 1. Paragraph (b) of subsection (1) of section
7 468.4334, Florida Statutes, is amended to read:
8 468.4334 Professional practice standards; liability. —
9 (1)
10 (b) If a community association manager or a community
11 association management firm has a contract with a community
12 association that has a building on the association's property
13 that is subject to s. 553.899, the community association manager
14 or the community association management firm must comply with
15 that section as directed by the board.
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1395 (2023)
Amendment No. 1
16 Section 2. Subsections (1) through (6), paragraph (b) of
17 subsection (7), and subsections (8), (9), (11), and (12) of
18 section 553.899, Florida Statutes, are amended to read:
19 553.899 Mandatory structural inspections for condominium
20 and cooperative buildings.—
21 (1) The Legislature finds that maintaining the structural
22 integrity of a building throughout the life of the building its
23 service life is of paramount importance in order to ensure that
24 buildings are structurally sound so as to not pose a threat to
25 the public health, safety, or welfare. As such, the Legislature
26 finds that the imposition of a statewide structural inspection
27 program for aging condominium and cooperative buildings in this
28 state is necessary to ensure that such buildings are safe for
29 continued use.
30 (2) As used in this section, the terms:
31 (a) "Milestone inspection" means a structural inspection
32 of a building, including an inspection of load-bearing elements
33 walls and the primary structural members and primary structural
34 systems as those terms are defined in s. 627.706, by an a
35 licensed architect licensed under chapter 481 or engineer
36 licensed under chapter 471 authorized to practice in this state
37 for the purposes of attesting to the life safety and adequacy of
38 the structural components of the building and, to the extent
39 reasonably possible, determining the general structural
40 condition of the building as it affects the safety of such
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 1395 (2023)
Amendment No. 1
41 building, including a determination of any necessary
42 maintenance, repair, or replacement of any structural component
43 of the building. The purpose of such inspection is not to
44 determine if the condition of an existing building is in
45 compliance with the Florida Building Code or the firesafety
46 code. The milestone inspection services may be provided by a
47 team of professionals with an architect or engineer acting as a
48 registered design professional in responsible charge with all
49 work and reports signed and sealed by the appropriate qualified
50 team member.
51 (b) "Substantial structural deterioration" means
52 substantial structural distress or substantial structural
53 weakness that negatively affects a building's general structural
54 condition and integrity. The term does not include surface
55 imperfections such as cracks, distortion, sagging, deflections,
56 misalignment, signs of leakage, or peeling of finishes unless
57 the licensed engineer or architect performing the phase one or
58 phase two inspection determines that such surface imperfections
59 are a sign of substantial structural deterioration.
60 (3)(a) A building with one or more residential units that
61 is three stories or more in height as determined by the Florida
62 Building Code and that is subject, in whole or in part, to the
63 condominium or cooperative form of ownership as a residential or
64 mixed-use condominium association under chapter 718 or and a
65 residential cooperative association under chapter 719 must have
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Bill No. CS/HB 1395 (2023)
Amendment No. 1
66 a milestone inspection performed for each building that is three
67 stories or more in height by December 31 of the year in which
68 the building reaches 25 30 years of age, based on the date the
69 certificate of occupancy for the building was issued, and every
70 10 years thereafter. If a building reached 25 years of age
71 before July 1, 2022, the building's initial milestone inspection
72 must be performed before December 31, 2024. If a building
73 reaches 25 years of age on or after July 1, 2022, and before
74 December 31, 2024, the building's initial milestone inspection
75 must be performed before December 31, 2025. If the date of
76 issuance for the certificate of occupancy is not available, the
77 date of issuance of the building's certificate of occupancy
78 shall be the date of occupancy evidenced in any record of the
79 local building official. If the building is located within 3
80 miles of a coastline as defined in s. 376.031, the condominium
81 association or cooperative association must have a milestone
82 inspection performed by December 31 of the year in which the
83 building reaches 25 years of age, based on the date the
84 certificate of occupancy for the building was issued, and every
85 10 years thereafter.
86 (c) The local enforcement agency may extend the date by
87 which a building's initial milestone inspection must be
88 completed upon a showing of good cause by the owner or owners of
89 the building that the inspection cannot be timely completed if
90 the owner or owners have entered into a contract with an
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Bill No. CS/HB 1395 (2023)
Amendment No. 1
91 architect or engineer to perform the milestone inspection and
92 the inspection cannot reasonably be completed before the
93 deadline or other circumstance to justify an extension.
94 (d) The local enforcement agency may accept an inspection
95 report prepared by a licensed engineer or architect for a
96 structural integrity and condition inspection of a building
97 performed before July 1, 2022, if the inspection and report
98 substantially comply with the requirements of this section.
99 Notwithstanding when such inspection was completed, the
100 condominium or cooperative association must comply with the unit
101 owner notice requirements in subsection (9). The inspection for
102 which an inspection report is accepted by the local enforcement
103 agency under this paragraph is deemed a milestone inspection for
104 the applicable requirements in chapters 718 and 719. If a
105 previous inspection and report is accepted by the local
106 enforcement agency under this paragraph, the deadline for the
107 building's subsequent 10-year milestone inspection is based on
108 the date of the accepted previous inspection.
109 (4) The milestone inspection report must be arranged and
110 completed by a condominium or cooperative association. The
111 condominium association or cooperative association and any owner
112 of any portion of the building which is not subject to the
113 condominium or cooperative form of ownership are each must
114 arrange for the milestone inspection to be performed and is
115 responsible for ensuring compliance with the requirements of
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Bill No. CS/HB 1395 (2023)
Amendment No. 1
116 this section. The condominium association or cooperative
117 association is responsible for all costs associated with the
118 milestone inspection. However, expenses may be recovered for
119 such inspection from unit owners or other owners in accordance
120 with the general expense allocations of the documents governing
121 the property. This section subsection does not apply to a
122 single-family, two-family, or three-family dwelling with three
123 or fewer habitable stories above ground.
124 (4) If a milestone inspection is required under this
125 section and the building's certificate of occupancy was issued
126 on or before July 1, 1992, the building's initial milestone
127 inspection must be performed before December 31, 2024. If the
128 date of issuance for the certificate of occupancy is not
129 available, the date of issuance of the building's certificate of
130 occupancy shall be the date of occupancy evidenced in any record
131 of the local building official.
132 (5) Upon determining that a building must have a milestone
133 inspection, the local enforcement agency must provide written
134 notice of such required inspection to the condominium
135 association or cooperative association and any owner of any
136 portion of the building which is not subject to the condominium
137 or cooperative form of ownership, as applicable, by certified
138 mail, return receipt requested. The condominium or cooperative
139 association must notify the unit owners of the required
140 milestone inspection within 14 days after receipt of the written
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Bill No. CS/HB 1395 (2023)
Amendment No. 1
141 notice from the local enforcement agency and provide the date
142 that the milestone inspection must be completed. Such notice may
143 be given by electronic submission to unit owners who consent to
144 receive notice by electronic submission or by posting on the
145 association's website.
146 (6) Phase one of the milestone inspection must be
147 completed within 180 days after the owner or owners of the
148 building receive receiving the written notice under subsection
149 (5), the condominium association or cooperative association must
150 complete phase one of the milestone inspection. For purposes of
151 this section, completion of phase one of the milestone
152 inspection means the licensed engineer or architect who
153 performed the phase one inspection submitted the inspection
154 report by e-mail, United States Postal Service, or commercial
155 delivery service to the local enforcement agency.
156 (7) A milestone inspection consists of two phases:
157 (b) A phase two of the milestone inspection must be
158 performed if any substantial structural deterioration is
159 identified during phase one. A phase two inspection may involve
160 destructive or nondestructive testing at the inspector's
161 direction. The inspection may be as extensive or as limited as
162 necessary to fully assess areas of structural distress in order
163 to confirm that the building is structurally sound and safe for
164 its intended use and to recommend a program for fully assessing
165 and repairing distressed and damaged portions of the building.
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Amendment No. 1
166 When determining testing locations, the inspector must give
167 preference to locations that are the least disruptive and most
168 easily repairable while still being representative of the
169 structure. If a phase two inspection is required, within 180
170 days after submitting a phase one inspection report the
171 architect or engineer performing the phase two inspection must
172 submit a phase two progress report to the local enforcement
173 agency with a timeline for completion of the phase two
174 inspection. An inspector who completes a phase two milestone
175 inspection shall prepare and submit an inspection report
176 pursuant to subsection (8).
177 (8) Upon completion of a phase one or phase two milestone
178 inspection, the architect or engineer who performed the
179 inspection must submit a sealed copy of the inspection report
180 with a separate summary of, at minimum, the material findings
181 and recommendations in the inspection report to the condominium
182 association or cooperative association, to any other owner of
183 any portion of the building which is not subject to the
184 condominium or cooperative form of ownership, and to the
185 building official of the local government which has
186 jurisdiction. The inspection report must, at a minimum, meet all
187 of the following criteria:
188 (a) Bear the seal and signature, or the electronic
189 signature, of the licensed engineer or architect who performed
190 the inspection.
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Bill No. CS/HB 1395 (2023)
Amendment No. 1
191 (b) Indicate the manner and type of inspection forming the
192 basis for the inspection report.
193 (c) Identify any substantial structural deterioration,
194 within a reasonable professional probability based on the scope
195 of the inspection, describe the extent of such deterioration,
196 and identify any recommended repairs for such deterioration.
197 (d) State whether unsafe or dangerous conditions, as those
198 terms are defined in the Florida Building Code, were observed.
199 (e) Recommend any remedial or preventive repair for any
200 items that are damaged but are not substantial structural
201 deterioration.
202 (f) Identify and describe any items requiring further
203 inspection.
204 (9) Within 45 days after receiving the applicable
205 inspection report, the condominium or cooperative association
206 must distribute a copy of the inspector-prepared summary of the
207 inspection report to each condominium unit owner or cooperative
208 unit owner, regardless of the findings or recommendations in the
209 report, by United States mail or personal delivery at the
210 mailing address, property address, or any other address of the
211 owner provided to fulfill the association's notice requirements
212 under chapter 718 or chapter 719, as applicable, and by
213 electronic transmission to the e-mail address or facsimile
214 number provided to fulfill the association's notice requirements
215 to unit owners who previously consented to receive notice by
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Bill No. CS/HB 1395 (2023)
Amendment No. 1
216 electronic transmission; must post a copy of the inspector -
217 prepared summary in a conspicuous place on the condominium or
218 cooperative property; and must publish the full report and
219 inspector-prepared summary on the association's website, if the
220 association is required to have a website.
221 (11) A board of county commissioners or municipal
222 governing body may adopt an ordinance requiring that a
223 condominium or cooperative association and any other owner that
224 is subject to this section schedule or commence repairs for
225 substantial structural deterioration within a specified
226 timeframe after the local enforcement agency receives a phase
227 two inspection report; however, such repairs must be commenced
228 within 365 days after receiving such report. If an association
229 fails to submit proof to the local enforcement agency that
230 repairs have been scheduled or have commenced for substantial
231 structural deterioration identified in a phase two inspection
232 report within the required timeframe, the local enforcement
233 agency must review and determine if the building is unsafe for
234 human occupancy.
235 (12) By December 31, 2024, the Florida Building Commission
236 shall adopt rules pursuant to ss. 120.536(1) and 120.54 to
237 establish a building safety program for the implementation of
238 this section within the Florida Building Code: Existing
239 Building. The building inspection program must, at minimum,
240 include inspection criteria, testing protocols, standardized
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Bill No. CS/HB 1395 (2023)
Amendment No. 1
241 inspection and reporting forms that are adaptable to an
242 electronic format, and record maintenance requirements for the
243 local authority review the milestone inspection requirements
244 under this section and make recommendations, if any, to the
245 Legislature to ensure inspections are sufficient to determine
246 the structural integrity of a building. The commission must
247 provide a written report of any recommendations to the Governor,
248 the President of the Senate, and the Speaker of the House of
249 Representatives by December 31, 2022.
250 Section 3. Paragraph (aa) of subsection (6) of section
251 627.351, Florida Statutes, is amended to read:
252 627.351 Insurance risk apportionment plans.—
253 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
254 (aa) Except as otherwise provided in this paragraph, the
255 corporation shall require the securing and maintaining of flood
256 insurance as a condition of coverage of a personal lines
257 residential risk. The insured or applicant must execute a form
258 approved by the office affirming that flood insurance is not
259 provided by the corporation and that if flood insurance is not
260 secured by the applicant or insured from an insurer other than
261 the corporation and in addition to coverage by the corporation,
262 the risk will not be eligible for coverage by the corporation.
263 The corporation may deny coverage of a personal lines
264 residential risk to an applicant or insured who refuses to
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Bill No. CS/HB 1395 (2023)
Amendment No. 1
265 secure and maintain flood insurance. The requirement to purc hase
266 flood insurance shall be implemented as follows:
267 1. Except as provided in subparagraphs 2., and 3., and 4.,
268 all personal lines residential policyholders must have flood
269 coverage in place for policies effective on or after:
270 a. January 1, 2024, for property valued at $600,000 or
271 more.
272 b. January 1, 2025, for property valued at $500,000 or
273 more.
274 c. January 1, 2026, for property valued at $400,000 or
275 more.
276 d. January 1, 2027, for all other personal lines
277 residential property insured by the corporation.
278 2. All personal lines residential policyholders whose
279 property insured by the corporation is located within the
280 special flood hazard area defined by the Federal Emergency
281 Management Agency must have flood coverage in place:
282 a. At the time of initial policy issuance for all new
283 personal lines residential policies issued by the corporation on
284 or after April 1, 2023.
285 b. By the time of the policy renewal for all personal
286 lines residential policies renewing on or after July 1, 2023.
287 3. Policyholders whose policies issued by the corporation
288 do not provide coverage for the peril of wind are not required
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Bill No. CS/HB 1395 (2023)
Amendment No. 1
289 to purchase flood insurance as a condition for maintaining their
290 policies with the corporation.
291 4. Effective on or after January 1, 2027, policyholders
292 whose policies issued by the corporation provide coverage under
293 a condominium unit owners or condominium tenant form must
294 purchase flood insurance upon issuance or renewal of their
295 policies by the corporation, unless:
296 a. The policyholder's unit is covered under a master flood
297 policy issued to someone other than the policyholder.
298 b. The policyholder resides in a condominium unit with
299 occupiable space that is not less than 40 feet above the grade
300 plane, as defined in the Florida Building Code. A unit located
301 on the fifth floor above the grade plane or higher is deemed to
302 be not less than 40 feet above the grade plane, as defined in
303 the Florida Building Code. A unit owner or a condominium
304 association may submit a certification from an engineer licensed
305 under chapter 471, a surveyor and mapper licensed under chapter
306 472, or an architect licensed under chapter 481, detailing which
307 units in the condominium association are not less than 40 feet
308 above the grade plane, as defined in the Florida Building Code,
309 and the corporation may rely on such certification.
310
311 The flood insurance required under this paragraph must meet, at
312 a minimum, the coverage available from the National Flood
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Bill No. CS/HB 1395 (2023)
Amendment No. 1
313 Insurance Program or the requirements of subparagraphs s.
314 627.715(1)(a)1., 2., and 3.
315 Section 4. Present subsections (1) through (31) of section
316 718.103, Florida Statutes, are redesignated as subsections (2)
317 through (32), respectively, a new subsection (1) is added to
318 that section, and present subsection (25) of that section is
319 amended, to read:
320 718.103 Definitions.—As used in this chapter, the term:
321 (1) "Alternative funding method" means a method approved
322 by the division for funding the capital expenditures and
323 deferred maintenance obligations for a multicondominium
324 association operating at least 25 condominiums which may
325 reasonably be expected to fully satisfy the association's
326 reserve funding obligations by the allocation of funds in the
327 annual operating budget.
328 (26)(25) "Structural integrity reserve study" means a
329 study of the reserve funds required for future major repairs and
330 replacement of the condominium property performed as required
331 under s. 718.112(2)(g) common areas based on a visual inspection
332 of the common areas. A structural integrity reserve study may be
333 performed by any person qualified to perform such study.
334 However, the visual inspection portion of the structural
335 integrity reserve study must be performed by an engineer
336 licensed under chapter 471 or an architect licensed under
337 chapter 481. At a minimum, a structural integrity reserve study
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Bill No. CS/HB 1395 (2023)
Amendment No. 1
338 must identify the common areas being visually inspected, state
339 the estimated remaining useful life and the estimated
340 replacement cost or deferred maintenance expense of the common
341 areas being visually inspected, and provide a recommended annual
342 reserve amount that achieves the estimated replacement cost or
343 deferred maintenance expense of each common area being visually
344 inspected by the end of the estimated remaining useful life of
345 each common area.
346 Section 5. Paragraph (c) of subsection (12) of section
347 718.111, Florida Statutes, is amended to read:
348 718.111 The association.—
349 (12) OFFICIAL RECORDS.—
350 (c)1. The official records of the association are open to
351 inspection by any association member and any person authorized
352 by an association member as a or the authorized representative
353 of such member at all reasonable times. The right to inspect the
354 records includes the right to make or obtain copies, at the
355 reasonable expense, if any, of the member and of the person
356 authorized by the association member as a or authorized
357 representative of such member. A renter of a unit has a right to
358 inspect and copy only the declaration of condominium, the
359 association's bylaws and rules, and the inspection reports
360 described in ss. 553.899 and 718.301(4)(p). The association may
361 adopt reasonable rules regarding the frequency, time, location,
362 notice, and manner of record inspections and copying but may not
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Amendment No. 1
363 require a member to demonstrate any purpose or state any reason
364 for the inspection. The failure of an association to provide the
365 records within 10 working days after receipt of a written
366 request creates a rebuttable presumption that the association
367 willfully failed to comply with this paragraph. A unit owner who
368 is denied access to official records is entitled to the actual
369 damages or minimum damages for the association's willful failure
370 to comply. Minimum damages are $50 per calendar day for up to 10
371 days, beginning on the 11th working day after receipt of the
372 written request. The failure to permit inspection entitles any
373 person prevailing in an enforcement action to recover reasonable
374 attorney fees from the person in control of the records who,
375 directly or indirectly, knowingly denied access to the records.
376 2. Any person who knowingly or intentionally defaces or
377 destroys accounting records that are required by this chapter to
378 be maintained during the period for which such records are
379 required to be maintained, or who knowingly or intentionally
380 fails to create or maintain accounting records that are required
381 to be created or maintained, with the intent of causing harm to
382 the association or one or more of its members, is personally
383 subject to a civil penalty pursuant to s. 718.501(1)(d).
384 3. The association shall maintain an adequate number of
385 copies of the declaration, articles of incorporation, bylaws,
386 and rules, and all amendments to each of the foregoing, as well
387 as the question and answer sheet as described in s. 718.504 and
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Amendment No. 1
388 year-end financial information required under this section, on
389 the condominium property to ensure their availability to unit
390 owners and prospective purchasers, and may charge its actual
391 costs for preparing and furnishing these documents to those
392 requesting the documents. An association shall allow a member or
393 his or her authorized representative to use a portable dev ice,
394 including a smartphone, tablet, portable scanner, or any other
395 technology capable of scanning or taking photographs, to make an
396 electronic copy of the official records in lieu of the
397 association's providing the member or his or her authorized
398 representative with a copy of such records. The association may
399 not charge a member or his or her authorized representative for
400 the use of a portable device. Notwithstanding this paragraph,
401 the following records are not accessible to unit owners:
402 a. Any record protected by the lawyer-client privilege as
403 described in s. 90.502 and any record protected by the work-
404 product privilege, including a record prepared by an association
405 attorney or prepared at the attorney's express direction, which
406 reflects a mental impression, conclusion, litigation strategy,
407 or legal theory of the attorney or the association, and which
408 was prepared exclusively for civil or criminal litigation or for
409 adversarial administrative proceedings, or which was prepared in
410 anticipation of such litigation or proceedings until the
411 conclusion of the litigation or proceedings.
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Amendment No. 1
412 b. Information obtained by an association in connection
413 with the approval of the lease, sale, or other transfer of a
414 unit.
415 c. Personnel records of association or management co mpany
416 employees, including, but not limited to, disciplinary, payroll,
417 health, and insurance records. For purposes of this sub -
418 subparagraph, the term "personnel records" does not include
419 written employment agreements with an association employee or
420 management company, or budgetary or financial records that
421 indicate the compensation paid to an association employee.
422 d. Medical records of unit owners.
423 e. Social security numbers, driver license numbers, credit
424 card numbers, e-mail addresses, telephone numbers, facsimile
425 numbers, emergency contact information, addresses of a unit
426 owner other than as provided to fulfill the association's notice
427 requirements, and other personal identifying information of any
428 person, excluding the person's name, unit designation , mailing
429 address, property address, and any address, e-mail address, or
430 facsimile number provided to the association to fulfill the
431 association's notice requirements. Notwithstanding the
432 restrictions in this sub-subparagraph, an association may print
433 and distribute to unit owners a directory containing the name,
434 unit address, and all telephone numbers of each unit owner.
435 However, an owner may exclude his or her telephone numbers from
436 the directory by so requesting in writing to the association. An
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437 owner may consent in writing to the disclosure of other contact
438 information described in this sub-subparagraph. The association
439 is not liable for the inadvertent disclosure of information that
440 is protected under this sub-subparagraph if the information is
441 included in an official record of the association and is
442 voluntarily provided by an owner and not requested by the
443 association.
444 f. Electronic security measures that are used by the
445 association to safeguard data, including passwords.
446 g. The software and operating system used by the
447 association which allow the manipulation of data, even if the
448 owner owns a copy of the same software used by the association.
449 The data is part of the official records of the association.
450 h. All affirmative acknowledgments made pursuant to s.
451 718.121(4)(c).
452 Section 6. Paragraphs (e), (f), (g), and (h) of subsection
453 (2) of section 718.112, Florida Statutes, are amended to read:
454 718.112 Bylaws.—
455 (2) REQUIRED PROVISIONS.—The bylaws shall provide for the
456 following and, if they do not do so, shall be deemed to include
457 the following:
458 (e) Budget meeting.—
459 1. Any meeting at which a proposed annual budget of an
460 association will be considered by the board or unit owners shall
461 be open to all unit owners. At least 14 days prior to such a
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462 meeting, the board shall hand deliver to each unit owner, mail
463 to each unit owner at the address last furnished to the
464 association by the unit owner, or electronically transmit to the
465 location furnished by the unit owner for that purpose a notice
466 of such meeting and a copy of the proposed annual budget. An
467 officer or manager of the association, or other person providing
468 notice of such meeting, shall execute an affidavit evidencing
469 compliance with such notice requirement, and such affidavit
470 shall be filed among the official records of the association.
471 2.a. If a board adopts in any fiscal year an annual budget
472 which requires assessments against unit owners which exceed 115
473 percent of assessments for the preceding fiscal year, the board
474 shall conduct a special meeting of the unit owners to consider a
475 substitute budget if the board receives, within 21 days after
476 adoption of the annual budget, a written request for a special
477 meeting from at least 10 percent of all voting interests. The
478 special meeting shall be conducted within 60 days after adoption
479 of the annual budget. At least 14 days prior to such special
480 meeting, the board shall hand deliver to each unit owner, or
481 mail to each unit owner at the address last furnished to the
482 association, a notice of the meeting. An officer or manager of
483 the association, or other person providing notice of such
484 meeting shall execute an affidavit evidencing compliance with
485 this notice requirement, and such affidavit shall be filed among
486 the official records of the association. Unit owners may
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487 consider and adopt a substitute budget at the special meeting. A
488 substitute budget is adopted if approved by a majority of all
489 voting interests unless the bylaws require adoption by a greater
490 percentage of voting interests. If there is not a quorum at the
491 special meeting or a substitute budget is not adopted, the
492 annual budget previously adopted by the board shall take effect
493 as scheduled.
494 b. Any determination of whether assessments exceed 115
495 percent of assessments for the prior fiscal year shall exclude
496 any authorized provision for reasonable reserves for repai r or
497 replacement of the condominium property, anticipated expenses of
498 the association which the board does not expect to be incurred
499 on a regular or annual basis, insurance premiums, or assessments
500 for betterments to the condominium property.
501 c. If the developer controls the board, assessments shall
502 not exceed 115 percent of assessments for the prior fiscal year
503 unless approved by a majority of all voting interests.
504 (f) Annual budget.—
505 1. The proposed annual budget of estimated revenues and
506 expenses must be detailed and must show the amounts budgeted by
507 accounts and expense classifications, including, at a minimum,
508 any applicable expenses listed in s. 718.504(21). The board
509 shall adopt the annual budget at least 14 days before the start
510 of the association's fiscal year. In the event that the board
511 fails to timely adopt the annual budget a second time, it is
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512 deemed a minor violation and the prior year's budget shall
513 continue in effect until a new budget is adopted. A
514 multicondominium association must adopt a separate budget of
515 common expenses for each condominium the association operates
516 and must adopt a separate budget of common expenses for the
517 association. In addition, if the association maintains limited
518 common elements with the cost to be shared only by those
519 entitled to use the limited common elements as provided for in
520 s. 718.113(1), the budget or a schedule attached to it must show
521 the amount budgeted for this maintenance. If, after turnover of
522 control of the association to the unit owners, any of the
523 expenses listed in s. 718.504(21) are not applicable, they do
524 not need to be listed.
525 2.a. In addition to annual operating expenses, the budget
526 must include reserve accounts for capital expenditures and
527 deferred maintenance. These accounts must include, but are not
528 limited to, roof replacement, building painting, and pavement
529 resurfacing, regardless of the amount of deferred maintenance
530 expense or replacement cost, and any other item that has a
531 deferred maintenance expense or replacement cost that exce eds
532 $10,000. The amount to be reserved for an item is determined by
533 the association's most recent structural integrity reserve study
534 that must be completed by December 31, 2024. If the amount to be
535 reserved for an item is not in the association's initial o r most
536 recent structural integrity reserve study or the association has
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537 not completed a structural integrity reserve study, the amount
538 must be computed using a formula based upon estimated remaining
539 useful life and estimated replacement cost or deferred
540 maintenance expense of the reserve item. In a budget adopted by
541 an association that is required to obtain a structural integrity
542 reserve study, reserves must be maintained for the items
543 identified in paragraph (g), and the reserve amount for such
544 items must be based on the findings and recommendations of the
545 association's most recent structural integrity reserve study.
546 With respect to items for which an estimate of useful life is
547 not readily ascertainable or with an estimated remaining useful
548 life of greater than 25 years, an association is not required to
549 reserve replacement costs for such items, but an association
550 must reserve the amount of deferred maintenance expense, if any,
551 which is recommended by the structural integrity reserve study
552 for such items. The association may adjust replacement reserve
553 assessments annually to take into account an inflation
554 adjustment and any changes in estimates or extension of the
555 useful life of a reserve item caused by deferred maintenance.
556 The members of a unit-owner-controlled association may
557 determine, by a majority vote at a duly called meeting of the
558 association, to provide no reserves or less reserves than
559 required by this subsection. Effective December 31, 2024, the
560 members of a unit-owner-controlled association that must obtain
561 a structural integrity reserve study may not determine to
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562 provide no reserves or less reserves than required by this
563 subsection for items listed in paragraph (g), except that
564 members of an association operating a multicondominium may
565 determine to provide no reserves or less reserves than required
566 by this subsection if such multicondominium uses an alternative
567 funding method approved by the division.
568 b. Before turnover of control of an association by a
569 developer to unit owners other than a developer under s.
570 718.301, the developer-controlled association may not vote to
571 waive the reserves or reduce funding of the reserves. If a
572 meeting of the unit owners has been called to determine whether
573 to waive or reduce the funding of reserves and no such result is
574 achieved or a quorum is not attained, the reserves included in
575 the budget shall go into effect. After the turnover, the
576 developer may vote its voting interest to waive or reduce the
577 funding of reserves.
578 3. Reserve funds and any interest accruing thereon shall
579 remain in the reserve account or accounts, and may be used only
580 for authorized reserve expenditures unless their use for other
581 purposes is approved in advance by a majority vote at a duly
582 called meeting of the association. Before turnover of control of
583 an association by a developer to unit owners other than the
584 developer pursuant to s. 718.301, the developer-controlled
585 association may not vote to use reserves for purposes other than
586 those for which they were intended. Effective December 31, 2024,
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587 members of a unit-owner-controlled association that must obtain
588 a structural integrity reserve study may not vote to use reserve
589 funds, or any interest accruing thereon, that are reserved for
590 items listed in paragraph (g) for any other purpose other than
591 the replacement or deferred maintenance costs of the components
592 listed in paragraph (g) their intended purpose.
593 4. The only voting interests that are eligible to vote on
594 questions that involve waiving or reducing the funding of
595 reserves, or using existing reserve funds for purposes other
596 than purposes for which the reserves were intended, are the
597 voting interests of the units subject to assessment to fund the
598 reserves in question. Proxy questions relating to waiving or
599 reducing the funding of reserves or using existing reserve funds
600 for purposes other than purposes for which the reserves were
601 intended must contain the following statement in capitalized,
602 bold letters in a font size larger than any other used on the
603 face of the proxy ballot: WAIVING OF RESERVES, IN WHOLE OR IN
604 PART, OR ALLOWING ALTERNATIVE USES OF EXISTING RESERVES MAY
605 RESULT IN UNIT OWNER LIABILITY FOR PAYMENT OF UNANTICIPATED
606 SPECIAL ASSESSMENTS REGARDING THOSE ITEMS.
607 (g) Structural integrity reserve study.—
608 1. A residential or mixed-use condominium An association
609 must have a structural integrity reserve study completed at
610 least every 10 years after the condominium's creation for each
611 building with at least one residential unit on the condominium
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612 property that is three stories or higher in height as determined
613 by the Florida Building Code which includes, at a minimum, a
614 study of the following items as related to the structural
615 integrity and safety of the building:
616 a. Roof.
617 b. Structure, including load-bearing walls and or other
618 primary structural members and primary structural systems as
619 those terms are defined in s. 627.706.
620 c. Floor.
621 d. Foundation.
622 e. Fireproofing and fire protection systems.
623 d.f. Plumbing.
624 e.g. Electrical systems.
625 f.h. Waterproofing and exterior painting.
626 g.i. Windows and exterior doors.
627 h.j. Any other item that has a deferred maintenance
628 expense or replacement cost that exceeds $10,000 and the failure
629 to replace or maintain such item negatively affects the items
630 listed in sub-subparagraphs a.-g. sub-subparagraphs a.-i., as
631 determined by the licensed engineer or architect performing the
632 visual inspection portion of the structural integrity reserve
633 study.
634 2. A structural integrity reserve study is based on a
635 visual inspection of the condominium property. A structural
636 integrity reserve study may be performed by any person qualified
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637 to perform such study. However, the visual inspection portion of
638 the structural integrity reserve study must be performed or
639 verified by an engineer licensed under chapter 471 or an
640 architect licensed under chapter 481, or performed by a person
641 certified as a reserve specialist or professional reserve
642 analyst by the Community Associations Institute or the
643 Association of Professional Reserve Analysts.
644 3. At a minimum, a structural integrity reserve study must
645 identify each item of the condominium property being visually
646 inspected, state the estimated remaining useful life and the
647 estimated replacement cost or deferred maintenance expense of
648 each item of the condominium property being visually inspected,
649 and provide a reserve funding schedule with a recommended annual
650 reserve amount that achieves the estimated replacement cost or
651 deferred maintenance expense of each item of condominium
652 property being visually inspected by the end of the estimated
653 remaining useful life of the item. The structural integrity
654 reserve study may recommend that reserves do not need to be
655 maintained for any item for which an estimate of useful life and
656 an estimate of replacement cost cannot be determined, or the
657 study may recommend a deferred maintenance expense amount for
658 such item. The structural integrity reserve study may recommend
659 that reserves for replacement costs do not need to be maintained
660 for any item with an estimated remaining useful life of greater
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661 than 25 years, or the study may recommend a deferred maintenance
662 expense amount for such item.
663 4. This paragraph does not apply to buildings less than
664 three stories in height; single-family, two-family, or three-
665 family dwellings with three or fewer habitable stories above
666 ground.
667 5. Before a developer turns over control of an association
668 to unit owners other than the developer, the developer must have
669 a structural integrity reserve study completed for each building
670 on the condominium property that is three stories or higher in
671 height.
672 6.3. Associations existing on or before July 1, 2022,
673 which are controlled by unit owners other than the developer,
674 must have a structural integrity reserve study completed by
675 December 31, 2024, for each building on the condominium property
676 that is three stories or higher in height. An association that
677 is required to complete a milestone inspection in accordance
678 with s. 553.899 on or before December 31, 2026, may complete the
679 structural integrity reserve study simultaneously with the
680 milestone inspection. In no event may the structural integrity
681 reserve study be completed after December 31, 2026.
682 7. If the milestone inspection required by s. 553.899, or
683 an inspection completed for a similar local requirement, was
684 performed within the past 5 years and meets the requirements of
685 this paragraph, such inspection may be used in place of the
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686 visual inspection portion of the structural integrity reserve
687 study.
688 8.4. If the officers or directors of an association fail
689 fails to complete a structural integrity reserve study pursuant
690 to this paragraph, such failure is a breach of an officer's and
691 director's fiduciary relationship to the unit owners under s.
692 718.111(1).
693 (h) Mandatory milestone inspections.—If an association is
694 required to have a milestone inspection performed pursuant to s.
695 553.899, the association must arrange for the milestone
696 inspection to be performed and is responsible for ensuring
697 compliance with the requirements of s. 553.899. The association
698 is responsible for all costs associated with the milestone
699 inspection for to the portions of the building which the
700 association is responsible for maintaining under the governing
701 documents of the association. If the officers or directors of an
702 association willfully and knowingly fail to have a milestone
703 inspection performed pursuant to s. 553.899, such failure is a
704 breach of the officers' and directors' fiduciary relationship to
705 the unit owners under s. 718.111(1)(a). Within 14 days after
706 receipt of a written notice from the local enforcement agency
707 that a milestone inspection is required, the association must
708 notify the unit owners of the required milestone inspection and
709 provide the date by which the milestone inspection must be
710 completed. Such notice may be given by electronic submission to
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711 unit owners who consent to receive notice by electronic
712 submission or by posting on the association's website. Within 45
713 days after receiving Upon completion of a phase one or phase two
714 milestone inspection and receipt of the inspector-prepared
715 summary of the inspection report from the architect or engineer
716 who performed the inspection, the association must distribute a
717 copy of the inspector-prepared summary of the inspection report
718 to each unit owner, regardless of the findings or
719 recommendations in the report, by United States mail or personal
720 delivery at the mailing address, property address, or any other
721 address of the owner provided to fulfill the association's
722 notice requirements under this chapter and by electronic
723 transmission to the e-mail address or facsimile number provided
724 to fulfill the association's notice requirements to unit owners
725 who previously consented to receive notice by electronic
726 transmission; must post a copy of the inspector-prepared summary
727 in a conspicuous place on the condominium property; and must
728 publish the full report and inspector-prepared summary on the
729 association's website, if the association is required to have a
730 website.
731 Section 7. Effective July 1, 2027, subsection (5) of
732 section 718.1255, Florida Statutes, is amended, and paragraph
733 (d) is added to subsection (1) of that section, to read:
734 718.1255 Alternative dispute resolution; mediation;
735 nonbinding arbitration; applicability.—
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736 (1) DEFINITIONS.—As used in this section, the term
737 "dispute" means any disagreement between two or more parties
738 that involves:
739 (d) The failure of a board of administration, when
740 required by this chapter or an association document, to:
741 1. Obtain the milestone inspection required under s.
742 553.899.
743 2. Obtain a structural integrity reserve study required
744 under s. 718.112(2)(g).
745 3. Fund reserves as required for an item identified in s.
746 718.112(2)(g).
747 4. Make or provide necessary maintenance or repairs of
748 condominium property recommended by a milestone inspection or a
749 structural integrity reserve study.
750
751 "Dispute" does not include any disagreement that primarily
752 involves: title to any unit or common element; the
753 interpretation or enforcement of any warranty; the levy of a fee
754 or assessment, or the collection of an assessment levied against
755 a party; the eviction or other removal of a tenant from a unit;
756 alleged breaches of fiduciary duty by one or more directors; or
757 claims for damages to a unit based upon the alleged failure of
758 the association to maintain the common elements or condominium
759 property.
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760 (5) PRESUIT MEDIATION.—In lieu of the initiation of
761 nonbinding arbitration as provided in subsections (1) -(4), a
762 party may submit a dispute to presuit mediation in accordance
763 with s. 720.311; however, election and recall disputes are not
764 eligible for mediation and such disputes must be arbitrated by
765 the division or filed in a court of competent jurisdiction.
766 Disputes identified in paragraph (1)(d) are not subject to
767 nonbinding arbitration under subsection (4) and must be
768 submitted to presuit mediation in accordance with s. 720.311.
769 Section 8. Subsection (1) of section 718.113, Florida
770 Statutes, is amended to read:
771 718.113 Maintenance; limitation upon improvement; display
772 of flag; hurricane shutters and protection; display of religious
773 decorations.—
774 (1) Maintenance of the common elements is the
775 responsibility of the association, except for any maintenance
776 responsibility for limited common elements assigned to the unit
777 owner by the declaration. The association shall provide for the
778 maintenance, repair, and replacement of the condominium property
779 for which it bears responsibility pursuant to the declaration of
780 condominium. After turnover of control of the association to the
781 unit owners, the association must perform any required
782 maintenance identified by the developer pursuant to s.
783 718.301(4)(p) and (q) until the association obtains new
784 maintenance protocols from a licensed professional engineer or
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785 architect or a person certified as a reserve specialist or
786 professional reserve analyst by the Community Associations
787 Institute or the Association of Professional Reserve Analysts .
788 The declaration may provide that certain limited common elements
789 shall be maintained by those entitled to use the limited common
790 elements or that the association shall provide the maintenance,
791 either as a common expense or with the cost shared only by those
792 entitled to use the limited common elements. If the maintenance
793 is to be by the association at the expense of only those
794 entitled to use the limited common elements, the declaration
795 shall describe in detail the method of apportioning such costs
796 among those entitled to use the limited common elements, and the
797 association may use the provisions of s. 718.116 to enforce
798 payment of the shares of such costs by the unit owners entitled
799 to use the limited common elements.
800 Section 9. Present paragraphs (q) and (r) of subsection
801 (4) of section 718.301, Florida Statutes, are redesignated as
802 paragraphs (r) and (s), respectively, a new paragraph (q) is
803 added to that subsection, and paragraph (p) of that subsection
804 is amended, to read:
805 718.301 Transfer of association control; claims of defect
806 by association.—
807 (4) At the time that unit owners other than the developer
808 elect a majority of the members of the board of administration
809 of an association, the developer shall relinquish control of the
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810 association, and the unit owners shall accept control.
811 Simultaneously, or for the purposes of paragraph (c) not more
812 than 90 days thereafter, the developer shall deliver to the
813 association, at the developer's expense, all property of the
814 unit owners and of the association which is held or controlled
815 by the developer, including, but not limited to, the following
816 items, if applicable, as to each condominium operated by the
817 association:
818 (p) Notwithstanding when the certificate of occupancy was
819 issued or the height of the building, a structural integrity
820 reserve study a milestone inspection report in compliance with
821 s. 718.112(2)(g) s. 553.899 included in the official records,
822 under seal of an architect or engineer authorized to practice in
823 this state or a person certified as a reserve specialist or
824 professional reserve analyst by the Community Associations
825 Institute or the Association of Professional Reserv e Analysts,
826 and attesting to required maintenance, condition, useful life,
827 and replacement costs of the following applicable condominium
828 property comprising a turnover inspection report:
829 1. Roof.
830 2. Structure, including load-bearing walls and primary
831 structural members and primary structural systems as those terms
832 are defined in s. 627.706.
833 3. Fireproofing and fire protection systems.
834 4. Plumbing Elevators.
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835 5. Electrical systems Heating and cooling systems.
836 6. Waterproofing and exterior painting Plumbing.
837 7. Windows and exterior doors Electrical systems.
838 8. Swimming pool or spa and equipment.
839 9. Seawalls.
840 10. Pavement and parking areas.
841 11. Drainage systems.
842 12. Painting.
843 13. Irrigation systems.
844 14. Waterproofing.
845 (q) Notwithstanding when the certificate of occupancy was
846 issued or the height of the building, a turnover inspection
847 report included in the official records, under seal of an
848 architect or engineer authorized to practice in this state or a
849 person certified as a reserve specialist or professional reserve
850 analyst by the Community Associations Institute or the
851 Association of Professional Reserve Analysts, and attesting to
852 required maintenance, condition, useful life, and replacement
853 costs of the following applicable condominium property
854 comprising a turnover inspection report:
855 1. Elevators.
856 2. Heating and cooling systems.
857 3. Swimming pool or spa and equipment.
858 4. Seawalls.
859 5. Pavement and parking areas.
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860 6. Drainage systems.
861 7. Irrigation systems.
862 Section 10. Paragraph (b) of subsection (1) and paragraph
863 (a) of subsection (2) of section 718.503, Florida Statutes, are
864 amended, and paragraph (d) is added to subsection (1) and
865 paragraph (e) is added to subsection (2) of that section, to
866 read:
867 718.503 Developer disclosure prior to sale; nondeveloper
868 unit owner disclosure prior to sale; voidability.—
869 (1) DEVELOPER DISCLOSURE.—
870 (b) Copies of documents to be furnished to prospective
871 buyer or lessee.—Until such time as the developer has furnished
872 the documents listed below to a person who has entered into a
873 contract to purchase a residential unit or lease it for more
874 than 5 years, the contract may be voided by that person,
875 entitling the person to a refund of any deposit together with
876 interest thereon as provided in s. 718.202. The contract may be
877 terminated by written notice from the proposed buyer or lessee
878 delivered to the developer within 15 days after the buyer or
879 lessee receives all of the documents required by this section.
880 The developer may not close for 15 days after the execution of
881 the agreement and delivery of the documents to the buyer as
882 evidenced by a signed receipt for documents unless the buyer is
883 informed in the 15-day voidability period and agrees to close
884 before the expiration of the 15 days. The developer shall retain
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885 in his or her records a separate agreement signed by the buyer
886 as proof of the buyer's agreement to close before the expiration
887 of the voidability period. The developer must retain such proof
888 for a period of 5 years after the date of the closing of the
889 transaction. The documents to be delivered to the prospective
890 buyer are the prospectus or disclosure statement with all
891 exhibits, if the development is subject to s. 718.504, or, if
892 not, then copies of the following which are applicable:
893 1. The question and answer sheet described in s. 718.504,
894 and declaration of condominium, or the proposed declaration if
895 the declaration has not been recorded, which shall include the
896 certificate of a surveyor approximately representing the
897 locations required by s. 718.104.
898 2. The documents creating the association.
899 3. The bylaws.
900 4. The ground lease or other underlying lease of the
901 condominium.
902 5. The management contract, maintenance contract, and
903 other contracts for management of the association and operation
904 of the condominium and facilities used by the unit owners having
905 a service term in excess of 1 year, and any management contracts
906 that are renewable.
907 6. The estimated operating budget for the condominium and
908 a schedule of expenses for each type of unit, including fees
909 assessed pursuant to s. 718.113(1) for the maintenance of
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910 limited common elements where such costs are shared only by
911 those entitled to use the limited common elements.
912 7. The lease of recreational and other facilities that
913 will be used only by unit owners of the subject condominium.
914 8. The lease of recreational and other common facilities
915 that will be used by unit owners in common with unit owners of
916 other condominiums.
917 9. The form of unit lease if the offer is of a leasehold.
918 10. Any declaration of servitude of properties serving the
919 condominium but not owned by unit owners or leased to them or
920 the association.
921 11. If the development is to be built in phases or if the
922 association is to manage more than one condominium, a
923 description of the plan of phase development or the arrangements
924 for the association to manage two or more condominiums.
925 12. If the condominium is a conversion of existing
926 improvements, the statements and disclosure required by s.
927 718.616.
928 13. The form of agreement for sale or lease of units.
929 14. A copy of the floor plan of the unit and the plot plan
930 showing the location of the residential buildings and the
931 recreation and other common areas.
932 15. A copy of all covenants and restrictions that will
933 affect the use of the property and are not contained in the
934 foregoing.
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935 16. If the developer is required by state or local
936 authorities to obtain acceptance or approval of any dock or
937 marina facilities intended to serve the condominium, a copy of
938 any such acceptance or approval acquired by the time of filing
939 with the division under s. 718.502(1), or a statement that such
940 acceptance or approval has not been acquired or received.
941 17. Evidence demonstrating that the developer has an
942 ownership, leasehold, or contractual interest in the land upon
943 which the condominium is to be developed.
944 18. A copy of the inspector-prepared summary of the
945 milestone inspection report as described in s. 553.899, or a
946 statement in conspicuous type indicating that the required
947 milestone inspection described in s. 553.899 has not been
948 completed or that a milestone inspection is not required, as
949 applicable ss. 553.899 and 718.301(4)(p).
950 19. A copy of the association's most recent structural
951 integrity reserve study, or a statement in conspicuous type
952 indicating that the association has not completed a required
953 structural integrity reserve study has not been completed or
954 that a structural integrity reserve study is not required, as
955 applicable.
956 20. A copy of the turnover inspection report described in
957 s. 718.301(4)(p) and (q) or a statement in conspicuous type
958 indicating that a turnover inspection report has not been
959 completed, as applicable.
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960 (d) Milestone inspection, turnover inspection report, or
961 structural integrity reserve study.—If the association is
962 required to have completed a milestone inspection as described
963 in s. 553.899, a turnover inspection report for a turnover
964 inspection performed on or after July 1, 2023, or a structural
965 integrity reserve study, and the association has not completed
966 the milestone inspection, the turnover inspection report, or the
967 structural integrity reserve study, each contract entered into
968 after December 31, 2024, for the sale of a residential unit
969 shall contain in conspicuous type a statement indicating that
970 the association is required to have a milestone inspection, a
971 turnover inspection report, or a structural integrity reserve
972 study and has not completed such inspection, report, or study,
973 as appropriate. If the association is not required to have a
974 milestone inspection as described in s. 553.899 or a structural
975 integrity reserve study, each contract entered into after
976 December 31, 2024, for the sale of a residential unit shall
977 contain in conspicuous type a statement indicating that the
978 association is not required to have a milestone inspection or a
979 structural integrity reserve study, as appropriate. If the
980 association has completed a milestone inspection as described in
981 s. 553.899, a turnover inspection report for a turnover
982 inspection performed on or after July 1, 2023, or a structural
983 integrity reserve study, each contract entered into after
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984 December 31, 2024, for the sale of a residential unit shall
985 contain in conspicuous type:
986 1. A clause which states: THE BUYER HEREBY ACKNOWLEDGES
987 THAT BUYER HAS BEEN PROVIDED A CURRENT COPY OF THE INSPECTOR -
988 PREPARED SUMMARY OF THE MILESTONE INSPECTION REPORT AS DESCRIBED
989 IN SECTION 553.899, FLORIDA STATUTES, IF APPLICABLE; A COPY OF
990 THE TURNOVER INSPECTION REPORT DESCRIBED IN SECTION
991 718.301(4)(p) AND (q), FLORIDA STATUTES, IF APPLICABLE; AND A
992 COPY OF THE ASSOCIATION'S MOST RECENT STRUCTURAL INTEGRITY
993 RESERVE STUDY DESCRIBED IN SECTIONS 718.103(26) AND
994 718.112(2)(g), FLORIDA STATUTES, IF APPLICABLE, MORE THAN 15
995 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS, PRIOR TO
996 EXECUTION OF THIS CONTRACT; and
997 2. A clause which states: THIS AGREEMENT IS VOIDABLE BY
998 BUYER BY DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION TO
999 CANCEL WITHIN 15 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL
1000 HOLIDAYS, AFTER THE DATE OF EXECUTION OF THIS AGREEMENT BY THE
1001 BUYER AND RECEIPT BY BUYER OF A CURRENT COPY OF THE INSPECTOR -
1002 PREPARED SUMMARY OF THE MILESTONE INSPECTION REPORT AS DESCRIBED
1003 IN SECTION 553.899, FLORIDA STATUTES, IF APPLICABLE; A COPY OF
1004 THE TURNOVER INSPECTION REPORT DESCRIBED IN SECTION
1005 718.301(4)(p) AND (q), FLORIDA STATUTES, IF APPLICABLE; AND A
1006 COPY OF THE ASSOCIATION'S MOST RECENT STRUCTURAL INTEGRITY
1007 RESERVE STUDY DESCRIBED IN SECTIONS 718.103(26) AND
1008 718.112(2)(g), FLORIDA STATUTES, IF APPLICABLE. ANY PURPORTED
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Amendment No. 1
1009 WAIVER OF THESE VOIDABILITY RIGHTS SHALL BE OF NO EFFECT. BUYER
1010 MAY EXTEND THE TIME FOR CLOSING FOR A PERIOD OF NOT MORE THAN 15
1011 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS, AFTER
1012 THE BUYER RECEIVES A CURRENT COPY OF THE INSPECTOR-PREPARED
1013 SUMMARY OF THE MILESTONE INSPECTION REPORT AS DESCRIBED IN
1014 SECTION 553.899, FLORIDA STATUTES; A COPY OF THE TURNOVER
1015 INSPECTION REPORT DESCRIBED IN SECTION 718.301(4)(p) AND (q),
1016 FLORIDA STATUTES; OR A COPY OF THE ASSOCIATION'S MOST RECENT
1017 STRUCTURAL INTEGRITY RESERVE STUDY DESCRIBED IN SECTIONS
1018 718.103(26) AND 718.112(2)(g), FLORIDA STATUTES, IF REQUESTED IN
1019 WRITING. BUYER'S RIGHT TO VOID THIS AGREEMENT SHALL TERMINATE AT
1020 CLOSING.
1021
1022 A contract that does not conform to the requirements of this
1023 paragraph is voidable at the option of the purchaser prior to
1024 closing.
1025 (2) NONDEVELOPER DISCLOSURE.—
1026 (a) Each unit owner who is not a developer as defined by
1027 this chapter must comply with this subsection before the sale of
1028 his or her unit. Each prospective purchaser who has entered into
1029 a contract for the purchase of a condominium unit is entitled,
1030 at the seller's expense, to a current copy of all of the
1031 following:
1032 1. The declaration of condominium.
1033 2. Articles of incorporation of the association.
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Amendment No. 1
1034 3. Bylaws and rules of the association.
1035 4. Financial information required by s. 718.111.
1036 5. A copy of the inspector-prepared summary of the
1037 milestone inspection report as described in s. 553.899 ss.
1038 553.899 and 718.301(4)(p), if applicable.
1039 6. The association's most recent structural integrity
1040 reserve study or a statement that the association has not
1041 completed a structural integrity reserve study.
1042 7. A copy of the inspection report described in s.
1043 718.301(4)(p) and (q) for a turnover inspection performed on or
1044 after July 1, 2023.
1045 8. The document entitled "Frequently Asked Questions and
1046 Answers" required by s. 718.504.
1047 (e) If the association is required to have completed a
1048 milestone inspection as described in s. 553.899, a turnover
1049 inspection report for a turnover inspection performed on or
1050 after July 1, 2023, or a structural integrity reserve study, and
1051 the association has not completed the milestone inspection, the
1052 turnover inspection report, or the structural integrity reserve
1053 study, each contract entered into after December 31, 2024, for
1054 the sale of a residential unit shall contain in conspicuous type
1055 a statement indicating that the association is required to have
1056 a milestone inspection, a turnover inspection report, or a
1057 structural integrity reserve study and has not completed such
1058 inspection, report, or study, as appropriate. If the association
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1059 is not required to have a milestone inspection as described in
1060 s. 553.899 or a structural integrity reserve study, each
1061 contract entered into after December 31, 2024, for the sale of a
1062 residential unit shall contain in conspicuous type a statement
1063 indicating that the association is not required to have a
1064 milestone inspection or a structural integrity reserve study, as
1065 appropriate. If the association has completed a milestone
1066 inspection as described in s. 553.899, a turnover inspection
1067 report for a turnover inspection performed on or after July 1,
1068 2023, or a structural integrity reserve study, each contract
1069 entered into after December 31, 2024, for the resale of a
1070 residential unit shall contain in conspicuous type:
1071 1. A clause which states: THE BUYER HEREBY ACKNOWLEDGES
1072 THAT BUYER HAS BEEN PROVIDED A CURRENT COPY OF THE INSPECTOR -
1073 PREPARED SUMMARY OF THE MILESTONE INSPECTION REPORT AS DESCRIBED
1074 IN SECTION 553.899, FLORIDA STATUTES, IF APPLICABLE; A COPY OF
1075 THE TURNOVER INSPECTION REPORT DESCRIBED IN SECTION
1076 718.301(4)(p) AND (q), FLORIDA STATUTES, IF APPLICABLE; AND A
1077 COPY OF THE ASSOCIATION'S MOST RECENT STRUCTURAL INTEGRITY
1078 RESERVE STUDY DESCRIBED IN SECTIONS 718.103(26) AND
1079 718.112(2)(g), FLORIDA STATUTES, IF APPLICABLE, MORE THAN 3
1080 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS, PRIOR TO
1081 EXECUTION OF THIS CONTRACT; and
1082 2. A clause which states: THIS AGREEMENT IS VOIDABLE BY
1083 BUYER BY DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION TO
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Amendment No. 1
1084 CANCEL WITHIN 3 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL
1085 HOLIDAYS, AFTER THE DATE OF EXECUTION OF THIS AGREEMENT BY THE
1086 BUYER AND RECEIPT BY BUYER OF A CURRENT COPY OF THE INSPECTOR -
1087 PREPARED SUMMARY OF THE MILESTONE INSPECTION REPORT AS DESCRIBED
1088 IN SECTION 553.899, FLORIDA STATUTES, IF APPLICABLE; A COPY OF
1089 THE TURNOVER INSPECTION REPORT DESCRIBED IN SECTION
1090 718.301(4)(p) AND (q), FLORIDA STATUTES, IF APPLICABLE; AND A
1091 COPY OF THE ASSOCIATION'S MOST RECENT STRUCTURAL INTEGRITY
1092 RESERVE STUDY DESCRIBED IN SECTIONS 718.103(26) AND
1093 718.112(2)(g), FLORIDA STATUTES, IF APPLICABLE. ANY PURPORTED
1094 WAIVER OF THESE VOIDABILITY RIGHTS SHALL BE OF NO EFFECT. BUYER
1095 MAY EXTEND THE TIME FOR CLOSING FOR A PERIOD OF NOT MORE THAN 3
1096 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS, AFTER
1097 THE BUYER RECEIVES A CURRENT COPY OF THE INSPECTOR-PREPARED
1098 SUMMARY OF THE MILESTONE INSPECTION REPORT AS DESCRIBED IN
1099 SECTION 553.899, FLORIDA STATUTES; A COPY OF THE TURNOVER
1100 INSPECTION REPORT DESCRIBED IN SECTION 718.301(4)(p) AND (q),
1101 FLORIDA STATUTES; OR A COPY OF THE ASSOCIATION'S MOST RECENT
1102 STRUCTURAL INTEGRITY RESERVE STUDY DESCRIBED IN SECTIONS
1103 718.103(26) AND 718.112(2)(g), FLORIDA STATUTES, IF REQUESTED IN
1104 WRITING. BUYER'S RIGHT TO VOID THIS AGREEMENT SHALL TERMINATE AT
1105 CLOSING.
1106
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Amendment No. 1
1107 A contract that does not conform to the requirements of this
1108 paragraph is voidable at the option of the purchaser prior to
1109 closing.
1110 Section 11. Paragraph (a) of subsection (7) and paragraph
1111 (c) of subsection (21) of section 718.504, Florida Statutes, are
1112 amended to read:
1113 718.504 Prospectus or offering circular.—Every developer
1114 of a residential condominium which contains more than 20
1115 residential units, or which is part of a group of residential
1116 condominiums which will be served by property to be used in
1117 common by unit owners of more than 20 residential units, shall
1118 prepare a prospectus or offering circular and file it with the
1119 Division of Florida Condominiums, Timeshares, and Mobile Homes
1120 prior to entering into an enforceable contract of purchase and
1121 sale of any unit or lease of a unit for more than 5 years and
1122 shall furnish a copy of the prospectus or offering circular to
1123 each buyer. In addition to the prospectus or offering circular,
1124 each buyer shall be furnished a separate page entitled
1125 "Frequently Asked Questions and Answers," which shall be in
1126 accordance with a format approved by the division and a copy of
1127 the financial information required by s. 718.111. This page
1128 shall, in readable language, inform prospective purchasers
1129 regarding their voting rights and unit use restrictions,
1130 including restrictions on the leasing of a unit; shall indicate
1131 whether and in what amount the unit owners or the association is
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Amendment No. 1
1132 obligated to pay rent or land use fees for recreational or other
1133 commonly used facilities; shall contain a statement identifying
1134 that amount of assessment which, pursuant to the budget, would
1135 be levied upon each unit type, exclusive of any special
1136 assessments, and which shall further identify the basis upon
1137 which assessments are levied, whether monthly, quarterly, or
1138 otherwise; shall state and identify any court cases in which the
1139 association is currently a party of record in which the
1140 association may face liability in excess of $100,000; and which
1141 shall further state whether membership in a recreational
1142 facilities association is mandatory, and if so, shall identify
1143 the fees currently charged per unit type. The division shall by
1144 rule require such other disclosure as in its judgment will
1145 assist prospective purchasers. The prospectus or offering
1146 circular may include more than one condominium, although not all
1147 such units are being offered for sale as of the date of the
1148 prospectus or offering circular. The prospectus or offering
1149 circular must contain the following information:
1150 (7) A description of the recreational and other facilities
1151 that will be used in common with other condominiums, community
1152 associations, or planned developments which require the payment
1153 of the maintenance and expenses of such facilities, directly or
1154 indirectly, by the unit owners. The description shall include,
1155 but not be limited to, the following:
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Amendment No. 1
1156 (a) Each building and facility committed to be bui lt and a
1157 summary description of the structural integrity of each building
1158 for which reserves are required pursuant to s. 718.112(2)(g) .
1159
1160 Descriptions shall include location, areas, capacities, numbers,
1161 volumes, or sizes and may be stated as approximations or
1162 minimums.
1163 (21) An estimated operating budget for the condominium and
1164 the association, and a schedule of the unit owner's expenses
1165 shall be attached as an exhibit and shall contain the following
1166 information:
1167 (c) The estimated items of expenses of the condominium and
1168 the association, except as excluded under paragraph (b),
1169 including, but not limited to, the following items, which shall
1170 be stated as an association expense collectible by assessments
1171 or as unit owners' expenses payable to persons other th an the
1172 association:
1173 1. Expenses for the association and condominium:
1174 a. Administration of the association.
1175 b. Management fees.
1176 c. Maintenance.
1177 d. Rent for recreational and other commonly used
1178 facilities.
1179 e. Taxes upon association property.
1180 f. Taxes upon leased areas.
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Amendment No. 1
1181 g. Insurance.
1182 h. Security provisions.
1183 i. Other expenses.
1184 j. Operating capital.
1185 k. Reserves for all applicable items referenced in s.
1186 718.112(2)(g).
1187 l. Fees payable to the division.
1188 2. Expenses for a unit owner:
1189 a. Rent for the unit, if subject to a lease.
1190 b. Rent payable by the unit owner directly to the lessor
1191 or agent under any recreational lease or lease for the use of
1192 commonly used facilities, which use and payment is a mandatory
1193 condition of ownership and is not included in the common expense
1194 or assessments for common maintenance paid by the unit owners to
1195 the association.
1196 Section 12. Subsection (24) of section 719.103, Florida
1197 Statutes, is amended to read:
1198 719.103 Definitions.—As used in this chapter:
1199 (24) "Structural integrity reserve study" means a study of
1200 the reserve funds required for future major repairs and
1201 replacement of the cooperative property performed as required
1202 under s. 719.106(1)(k) common areas based on a visual inspection
1203 of the common areas. A structural integrity reserve study may be
1204 performed by any person qualified to perform such study.
1205 However, the visual inspection portion of the structural
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Amendment No. 1
1206 integrity reserve study must be performed by an engineer
1207 licensed under chapter 471 or an architect licensed under
1208 chapter 481. At a minimum, a structural integrity reserve study
1209 must identify the common areas being visually inspected, state
1210 the estimated remaining useful life and the estimated
1211 replacement cost or deferred maintenance expense of the common
1212 areas being visually inspected, and provide a recommended annual
1213 reserve amount that achieves the estimated replacement cost or
1214 deferred maintenance expense of each common area being visually
1215 inspected by the end of the estimated remaining usefu l life of
1216 each common area.
1217 Section 13. Present subsections (5) through (11) of
1218 section 719.104, Florida Statutes, are redesignated as
1219 subsections (6) through (12), respectively, a new subsection (5)
1220 is added to that section, and paragraph (c) of subsection (2) of
1221 that section is amended, to read:
1222 719.104 Cooperatives; access to units; records; financial
1223 reports; assessments; purchase of leases.—
1224 (2) OFFICIAL RECORDS.—
1225 (c) The official records of the association are open to
1226 inspection by any association member and any person authorized
1227 by an association member as a or the authorized representative
1228 of such member at all reasonable times. The right to inspect the
1229 records includes the right to make or obtain copies, at the
1230 reasonable expense, if any, of the association member and of the
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Amendment No. 1
1231 person authorized by the association member as a representative
1232 of such member. A renter of a unit has a right to inspect and
1233 copy only the association's bylaws and rules and the inspection
1234 reports described in ss. 553.899 and 719.301(4)(p). The
1235 association may adopt reasonable rules regarding the frequency,
1236 time, location, notice, and manner of record inspections and
1237 copying, but may not require a member to demonstrate any purpose
1238 or state any reason for the inspection. The failure of an
1239 association to provide the records within 10 working days after
1240 receipt of a written request creates a rebuttable presumption
1241 that the association willfully failed to comply with this
1242 paragraph. A member who is denied access to official re cords is
1243 entitled to the actual damages or minimum damages for the
1244 association's willful failure to comply. The minimum damages are
1245 $50 per calendar day for up to 10 days, beginning on the 11th
1246 working day after receipt of the written request. The failure to
1247 permit inspection entitles any person prevailing in an
1248 enforcement action to recover reasonable attorney fees from the
1249 person in control of the records who, directly or indirectly,
1250 knowingly denied access to the records. Any person who knowingly
1251 or intentionally defaces or destroys accounting records that are
1252 required by this chapter to be maintained during the period for
1253 which such records are required to be maintained, or who
1254 knowingly or intentionally fails to create or maintain
1255 accounting records that are required to be created or
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Amendment No. 1
1256 maintained, with the intent of causing harm to the association
1257 or one or more of its members, is personally subject to a civil
1258 penalty under s. 719.501(1)(d). The association shall maintain
1259 an adequate number of copies of the declaration, articles of
1260 incorporation, bylaws, and rules, and all amendments to each of
1261 the foregoing, as well as the question and answer sheet as
1262 described in s. 719.504 and year-end financial information
1263 required by the department, on the cooperative property to
1264 ensure their availability to members and prospective purchasers,
1265 and may charge its actual costs for preparing and furnishing
1266 these documents to those requesting the same. An association
1267 shall allow a member or his or her authorized representative to
1268 use a portable device, including a smartphone, tablet, portable
1269 scanner, or any other technology capable of scanning or taking
1270 photographs, to make an electronic copy of the official records
1271 in lieu of the association providing the member or his or her
1272 authorized representative with a copy of such records. The
1273 association may not charge a member or his or her authorized
1274 representative for the use of a portable device. Notwithstanding
1275 this paragraph, the following records shall not be accessible to
1276 members:
1277 1. Any record protected by the lawyer-client privilege as
1278 described in s. 90.502 and any record protected by the work-
1279 product privilege, including any record prepared by an
1280 association attorney or prepared at the attorney's express
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Amendment No. 1
1281 direction which reflects a mental impression, conclusion,
1282 litigation strategy, or legal theory of the attorney or the
1283 association, and which was prepared exclusively for civil or
1284 criminal litigation or for adversarial administrative
1285 proceedings, or which was prepared in anticipation of such
1286 litigation or proceedings until the conclusion of the litigation
1287 or proceedings.
1288 2. Information obtained by an association in connection
1289 with the approval of the lease, sale, or other transfer of a
1290 unit.
1291 3. Personnel records of association or management company
1292 employees, including, but not limited to, disciplinary, payroll,
1293 health, and insurance records. For purposes of this
1294 subparagraph, the term "personnel records" does not include
1295 written employment agreements with an association employee or
1296 management company, or budgetary or financial records that
1297 indicate the compensation paid to an association employee.
1298 4. Medical records of unit owners.
1299 5. Social security numbers, driver license numbers, credit
1300 card numbers, e-mail addresses, telephone numbers, facsimile
1301 numbers, emergency contact information, addresses of a unit
1302 owner other than as provided to fulfill the association's notice
1303 requirements, and other personal identifying information of any
1304 person, excluding the person's name, unit designation, mailing
1305 address, property address, and any address, e-mail address, or
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Amendment No. 1
1306 facsimile number provided to the association to fulfill the
1307 association's notice requirements. Notwithstanding the
1308 restrictions in this subparagraph, an association may print and
1309 distribute to unit owners a directory containing the name, unit
1310 address, and all telephone numbers of each unit owner. However,
1311 an owner may exclude his or her telephone numbers from the
1312 directory by so requesting in writing to the association. An
1313 owner may consent in writing to the disclosure of other contact
1314 information described in this subparagraph. The association is
1315 not liable for the inadvertent disclosure of information that is
1316 protected under this subparagraph if the information is included
1317 in an official record of the association and is voluntarily
1318 provided by an owner and not requested by the association.
1319 6. Electronic security measures that are used by the
1320 association to safeguard data, including passwords.
1321 7. The software and operating system used by the
1322 association which allow the manipulation of data, even if the
1323 owner owns a copy of the same software used by the association.
1324 The data is part of the official records of the association.
1325 8. All affirmative acknowledgments made pursuant to s.
1326 719.108(3)(b)3.
1327 (5) MAINTENANCE.—Maintenance of the common elements is the
1328 responsibility of the association, except for any maintenance
1329 responsibility for limited common elements assigned to the unit
1330 owner by the declaration. The association shall provide for the
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1331 maintenance, repair, and replacement of the cooperative property
1332 for which it bears responsibility pursuant to the declaration of
1333 cooperative. After turnover of control of the association to the
1334 unit owners, the association must perform any required
1335 maintenance identified by the developer pursuant to s.
1336 719.301(4)(p) and (q) until the association obtains new
1337 maintenance protocols from a licensed professional engineer or
1338 architect or a person certified as a reserve specialist or
1339 professional reserve analyst by the Community Associations
1340 Institute or the Association of Professional Reserve Analysts.
1341 The declaration may provide that certain limited common elements
1342 shall be maintained by those entitled to use the limited common
1343 elements or that the association shall provide the maintenance,
1344 either as a common expense or with the cost shared only by those
1345 entitled to use the limited common elements. If the maintenance
1346 is to be by the association at the expense of only those
1347 entitled to use the limited common elements, the declaration
1348 shall describe in detail the method of apportioning such costs
1349 among those entitled to use the limited common elements, and the
1350 association may use the provisions of s. 719.108 to enforce
1351 payment of the shares of such costs by the unit owners entitled
1352 to use the limited common elements.
1353 Section 14. Paragraphs (e), (j), (k), and (l) of
1354 subsection (1) of section 719.106, Florida Statutes, are amended
1355 to read:
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1356 719.106 Bylaws; cooperative ownership.—
1357 (1) MANDATORY PROVISIONS.—The bylaws or other cooperative
1358 documents shall provide for the following, and if they do not,
1359 they shall be deemed to include the following:
1360 (e) Budget procedures.—
1361 1. The board of administration shall mail, hand deliver,
1362 or electronically transmit to each unit owner at the address
1363 last furnished to the association, a meeting notice and copies
1364 of the proposed annual budget of common expenses to the unit
1365 owners not less than 14 days prior to the meeting at which the
1366 budget will be considered. Evidence of compliance with this 14-
1367 day notice must be made by an affidavit executed by an officer
1368 of the association or the manager or other person providing
1369 notice of the meeting and filed among the official records of
1370 the association. The meeting must be open to the unit owners.
1371 2. If an adopted budget requires assessment against the
1372 unit owners in any fiscal or calendar year which exceeds 115
1373 percent of the assessments for the preceding year, the board
1374 upon written application of 10 percent of the voting interests
1375 to the board, shall call a special meeting of the unit owners
1376 within 30 days, upon not less than 10 days' written notice to
1377 each unit owner. At the special meeting, unit owners shall
1378 consider and enact a budget. Unless the bylaws require a larger
1379 vote, the adoption of the budget requires a vote of not less
1380 than a majority of all the voting interests.
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1381 3. The board of administration may, in any event, propose
1382 a budget to the unit owners at a meeting of members or by
1383 writing, and if the budget or proposed budget is approved by the
1384 unit owners at the meeting or by a majority of all voting
1385 interests in writing, the budget is adopted. If a meeting of the
1386 unit owners has been called and a quorum is not attained or a
1387 substitute budget is not adopted by the unit owners, the budget
1388 adopted by the board of directors goes into effect as scheduled.
1389 4. In determining whether assessments exceed 115 percent
1390 of similar assessments for prior years, any authorized
1391 provisions for reasonable reserves for repair or replacement of
1392 cooperative property, anticipated expenses by the association
1393 which are not anticipated to be incurred on a regular or annual
1394 basis, insurance premiums, or assessments for betterments to the
1395 cooperative property must be excluded from computation. However,
1396 as long as the developer is in control of the board of
1397 administration, the board may not impose an assessment for any
1398 year greater than 115 percent of the prior fiscal or calendar
1399 year's assessment without approval of a majority of all voting
1400 interests.
1401 (j) Annual budget.—
1402 1. The proposed annual budget of common expenses must be
1403 detailed and must show the amounts budgeted by accounts and
1404 expense classifications, including, if applicable, but not
1405 limited to, those expenses listed in s. 719.504(20). The board
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1406 of administration shall adopt the annual budget at least 14 days
1407 before the start of the association's fiscal year. In the event
1408 that the board fails to timely adopt the annual budget a second
1409 time, it is deemed a minor violation and the prior year's budget
1410 shall continue in effect until a new budget is adopted.
1411 2. In addition to annual operating expenses, the budget
1412 must include reserve accounts for capital expenditures and
1413 deferred maintenance. These accounts must include, but not be
1414 limited to, roof replacement, building painting, and pavement
1415 resurfacing, regardless of the amount of deferred maintenance
1416 expense or replacement cost, and for any other items for which
1417 the deferred maintenance expense or replacement cost exceeds
1418 $10,000. The amount to be reserved for an item is determined by
1419 the association's most recent structural integrity reserve study
1420 that must be completed by December 31, 2024. If the amount to be
1421 reserved for an item is not in the association's initial or most
1422 recent structural integrity reserve study or the association has
1423 not completed a structural integrity reserve study, the amount
1424 must be computed by means of a formula which is based upon
1425 estimated remaining useful life and estimated replacement cost
1426 or deferred maintenance expense of the reserve item. In a budget
1427 adopted by an association that is required to obtain a
1428 structural integrity reserve study, reserves must be maintained
1429 for the items identified in paragraph (k), and the reserve
1430 amount for such items must be based on the findings and
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1431 recommendations of the association's most recent structural
1432 integrity reserve study. With respect to items for which an
1433 estimate of useful life is not readily ascertainable or with an
1434 estimated remaining useful life of greater than 25 years, an
1435 association is not required to reserve replacement costs for
1436 such items, but an association must reserve the amount of
1437 deferred maintenance expense, if any, which is recommended by
1438 the structural integrity reserve study for such items. The
1439 association may adjust replacement reserve assessments annually
1440 to take into account an inflation adjustment and any changes in
1441 estimates or extension of the useful life of a reserve item
1442 caused by deferred maintenance. The members of a unit-owner-
1443 controlled association may determine, at a duly called meeting
1444 of the association, for a fiscal year to provide no reserves or
1445 reserves less adequate than required by this subsection. Before
1446 turnover of control of an association by a developer to unit
1447 owners other than a developer under s. 719.301, the developer -
1448 controlled association may not vote to waive the reserves or
1449 reduce funding of the reserves. Effective December 31, 2024, a
1450 unit-owner-controlled association that must obtain a structural
1451 integrity reserve study may not determine to provide no reserves
1452 or reserves less adequate than required by this paragraph for
1453 items listed in paragraph (k). If a meeting of the unit owners
1454 has been called to determine to provide no reserves, or reserve s
1455 less adequate than required, and such result is not attained or
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1456 a quorum is not attained, the reserves as included in the budget
1457 shall go into effect.
1458 3. Reserve funds and any interest accruing thereon shall
1459 remain in the reserve account or accounts, and shall be used
1460 only for authorized reserve expenditures unless their use for
1461 other purposes is approved in advance by a vote of the majority
1462 of the voting interests, voting in person or by limited proxy at
1463 a duly called meeting of the association. Before turnover of
1464 control of an association by a developer to unit owners other
1465 than the developer under s. 719.301, the developer may not vote
1466 to use reserves for purposes other than that for which they were
1467 intended. Effective December 31, 2024, members of a unit-owner-
1468 controlled association that must obtain a structural integrity
1469 reserve study may not vote to use reserve funds, or any interest
1470 accruing thereon, that are reserved for items listed in
1471 paragraph (k) for purposes other than the replacement or
1472 deferred maintenance costs of the components listed in paragraph
1473 (k) their intended purpose.
1474 (k) Structural integrity reserve study.—
1475 1. A residential cooperative An association must have a
1476 structural integrity reserve study completed at least every 10
1477 years for each building on the cooperative property that is
1478 three stories or higher in height as determined by the Florida
1479 Building Code that includes, at a minimum, a study of the
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1480 following items as related to the structural integrity and
1481 safety of the building:
1482 a. Roof.
1483 b. Structure, including load-bearing walls and or other
1484 primary structural members and primary structural systems as
1485 those terms are defined in s. 627.706.
1486 c. Floor.
1487 d. Foundation.
1488 e. Fireproofing and fire protection systems.
1489 d.f. Plumbing.
1490 e.g. Electrical systems.
1491 f.h. Waterproofing and exterior painting.
1492 g.i. Windows and exterior doors.
1493 h.j. Any other item that has a deferred maintenance
1494 expense or replacement cost that exceeds $10,000 and the failure
1495 to replace or maintain such item negatively affects the items
1496 listed in sub-subparagraphs a.-g. sub-subparagraphs a.-i., as
1497 determined by the licensed engineer or architect performing the
1498 visual inspection portion of the structural integrity reserve
1499 study.
1500 2. A structural integrity reserve study is based on a
1501 visual inspection of the cooperative property. A structural
1502 integrity reserve study may be performed by any person qualified
1503 to perform such study. However, the visual inspection portion of
1504 the structural integrity reserve study must be performed or
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1505 verified by an engineer licensed under chapter 471 or an
1506 architect licensed under chapter 481, or performed by a person
1507 certified as a reserve specialist or professional reserve
1508 analyst by the Community Associations Institute or the
1509 Association of Professional Reserve Analysts.
1510 3. At a minimum, a structural integrity reserve study must
1511 identify each item of the cooperative property being visually
1512 inspected, state the estimated remaining useful life and the
1513 estimated replacement cost or deferred maintenance expense of
1514 each item of the cooperative property being visually inspected,
1515 and provide a reserve funding schedule with a recommended annual
1516 reserve amount that achieves the estimated replacement cost or
1517 deferred maintenance expense of each item of cooperative
1518 property being visually inspected by the end of the estimated
1519 remaining useful life of the item. The structural integrity
1520 reserve study may recommend that reserves do not need to be
1521 maintained for any item for which an estimate of useful life and
1522 an estimate of replacement cost cannot be determined, or the
1523 study may recommend a deferred maintenance expense amount for
1524 such item. The structural integrity reserve study may recommend
1525 that reserves for replacement costs do not need to be maintained
1526 for any item with an estimated remaining useful life of greater
1527 than 25 years, but the study may recommend a deferred
1528 maintenance expense amount for such item.
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1529 4. This paragraph does not apply to buildings less than
1530 three stories in height; single-family, two-family, or three-
1531 family dwellings with three or fewer habitable stories above
1532 ground.
1533 5. Before a developer turns over control of an association
1534 to unit owners other than the developer, the developer must have
1535 a structural integrity reserve study completed for each building
1536 on the cooperative property that is three stories or higher in
1537 height.
1538 6.3. Associations existing on or before July 1, 2022,
1539 which are controlled by unit owners other than the developer,
1540 must have a structural integrity reserve study completed by
1541 December 31, 2024, for each building on the cooperative property
1542 that is three stories or higher in height. An association that
1543 is required to complete a milestone inspection on or before
1544 December 31, 2026, in accordance with s. 553.899 may complete
1545 the structural integrity reserve study simultaneously with the
1546 milestone inspection. In no event may the structural integrity
1547 reserve study be completed after December 31, 2026.
1548 7. If the milestone inspection required by s. 553.899, or
1549 an inspection completed for a similar local requirement, was
1550 performed within the past 5 years and meets the requirements of
1551 this paragraph, such inspection may be used in place of the
1552 visual inspection portion of the structural integrity reserve
1553 study.
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1554 8.4. If the officers or directors of an association fail
1555 fails to complete a structural integrity reserve study pursuant
1556 to this paragraph, such failure is a breach of an officer's and
1557 director's fiduciary relationship to the unit owners under s.
1558 719.104(9) s. 719.104(8).
1559 (l) Mandatory milestone inspections.—If an association is
1560 required to have a milestone inspection performed pursuant to s.
1561 553.899, the association must arrange for the milestone
1562 inspection to be performed and is responsible for ensuring
1563 compliance with the requirements of s. 553.899. The association
1564 is responsible for all costs associated with the milestone
1565 inspection for the portions of the building which the
1566 association is responsible for maintaining under the governing
1567 documents of the association. If the officers or directors of an
1568 association willfully and knowingly fail to have a milestone
1569 inspection performed pursuant to s. 553.899, such failure is a
1570 breach of the officers' and directors' fiduciary relationship to
1571 the unit owners under s. 719.104(9)(a) s. 719.104(8)(a). Within
1572 14 days after receipt of a written notice from the loca l
1573 enforcement agency that a milestone inspection is required, the
1574 association must notify the unit owners of the required
1575 milestone inspection and provide the date by which the milestone
1576 inspection must be completed. Such notice may be given by
1577 electronic submission to unit owners who consent to receive
1578 notice by electronic submission or by posting on the
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Amendment No. 1
1579 association's website. Within 45 days after receiving Upon
1580 completion of a phase one or phase two milestone inspection and
1581 receipt of the inspector-prepared summary of the inspection
1582 report from the architect or engineer who performed the
1583 inspection, the association must distribute a copy of the
1584 inspector-prepared summary of the inspection report to each unit
1585 owner, regardless of the findings or recommendations in the
1586 report, by United States mail or personal delivery at the
1587 mailing address, property address, or any other address of the
1588 owner provided to fulfill the association's notice requirements
1589 under this chapter and by electronic transmission to the e-mail
1590 address or facsimile number provided to fulfill the
1591 association's notice requirements to unit owners who previously
1592 consented to receive notice by electronic transmission; must
1593 post a copy of the inspector-prepared summary in a conspicuous
1594 place on the cooperative property; and must publish the full
1595 report and inspector-prepared summary on the association's
1596 website, if the association is required to have a website.
1597 Section 15. Present paragraph (q) of subsection (4) of
1598 section 719.301, Florida Statutes, is redesignated as paragraph
1599 (r), a new paragraph (q) is added to that subsection, and
1600 paragraph (p) of that subsection is amended, to read:
1601 719.301 Transfer of association control.—
1602 (4) When unit owners other than the developer elect a
1603 majority of the members of the board of administration of an
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Amendment No. 1
1604 association, the developer shall relinquish control of the
1605 association, and the unit owners shall accept control.
1606 Simultaneously, or for the purpose of paragraph (c) not more
1607 than 90 days thereafter, the developer shall deliver to the
1608 association, at the developer's expense, all property of the
1609 unit owners and of the association held or controlled by the
1610 developer, including, but not limited to, the following items,
1611 if applicable, as to each cooperative operated by the
1612 association:
1613 (p) Notwithstanding when the certificate of occupancy was
1614 issued or the height of the building, a structural integrity
1615 reserve study milestone inspection report in compliance with s.
1616 719.106(1)(k) s. 553.899 included in the official records, under
1617 seal of an architect or engineer authorized to practice in this
1618 state or a person certified as a reserve specialist or
1619 professional reserve analyst by the Community Associations
1620 Institute or the Association of Professional Reserve Analysts,
1621 attesting to required maintenance, condition, useful life, and
1622 replacement costs of the following applicable cooperative
1623 property comprising a turnover inspection report:
1624 1. Roof.
1625 2. Structure, including load-bearing walls and primary
1626 structural members and primary structural systems as those terms
1627 are defined in s. 627.706.
1628 3. Fireproofing and fire protection systems.
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1629 4. Plumbing Elevators.
1630 5. Electrical systems Heating and cooling systems.
1631 6. Waterproofing and exterior painting Plumbing.
1632 7. Windows and exterior doors Electrical systems.
1633 8. Swimming pool or spa and equipment.
1634 9. Seawalls.
1635 10. Pavement and parking areas.
1636 11. Drainage systems.
1637 12. Painting.
1638 13. Irrigation systems.
1639 14. Waterproofing.
1640 (q) Notwithstanding when the certificate of occupancy was
1641 issued or the height of the building, a turnover inspection
1642 report included in the official records, under seal of an
1643 architect or engineer authorized to practice in this state or a
1644 person certified as a reserve specialist or professional reserve
1645 analyst by the Community Associations Institute or the
1646 Association of Professional Reserve Analysts, and attesting to
1647 required maintenance, condition, useful life, and replacement
1648 costs of the following applicable cooperative property
1649 comprising a turnover inspection report:
1650 1. Elevators.
1651 2. Heating and cooling systems.
1652 3. Swimming pool or spa and equipment.
1653 4. Seawalls.
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Amendment No. 1
1654 5. Pavement and parking areas.
1655 6. Drainage systems.
1656 7. Irrigation systems.
1657 Section 16. Paragraph (b) of subsection (1) and paragraph
1658 (a) of subsection (2) of section 719.503, Florida Statutes, are
1659 amended, and paragraph (d) is added to subsection (1) and
1660 paragraph (d) is added to subsection (2) of that section, to
1661 read:
1662 719.503 Disclosure prior to sale.—
1663 (1) DEVELOPER DISCLOSURE.—
1664 (b) Copies of documents to be furnished to prospective
1665 buyer or lessee.—Until such time as the developer has furnished
1666 the documents listed below to a person who has entered into a
1667 contract to purchase a unit or lease it for more than 5 years,
1668 the contract may be voided by that person, entitling the person
1669 to a refund of any deposit together with interest thereon as
1670 provided in s. 719.202. The contract may be terminated by
1671 written notice from the proposed buyer or lessee delivered to
1672 the developer within 15 days after the buyer or lessee receives
1673 all of the documents required by this section. The developer may
1674 not close for 15 days after the execution of the agreement and
1675 delivery of the documents to the buyer as evidenced by a receipt
1676 for documents signed by the buyer unless the buyer is informed
1677 in the 15-day voidability period and agrees to close before the
1678 expiration of the 15 days. The developer shall retain in his or
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1679 her records a separate signed agreement as proof of the buyer's
1680 agreement to close before the expiration of the voidability
1681 period. The developer must retain such proof for a period of 5
1682 years after the date of the closing transaction. The documents
1683 to be delivered to the prospective buyer are the prospectus or
1684 disclosure statement with all exhibits, if the development is
1685 subject to s. 719.504, or, if not, then copies of the following
1686 which are applicable:
1687 1. The question and answer sheet described in s. 719.504,
1688 and cooperative documents, or the proposed cooperative documents
1689 if the documents have not been recorded, which shall include the
1690 certificate of a surveyor approximately representing the
1691 locations required by s. 719.104.
1692 2. The documents creating the association.
1693 3. The bylaws.
1694 4. The ground lease or other underlying lease of the
1695 cooperative.
1696 5. The management contract, maintenance contract, and
1697 other contracts for management of the association and operation
1698 of the cooperative and facilities used by the unit owners having
1699 a service term in excess of 1 year, and any management contracts
1700 that are renewable.
1701 6. The estimated operating budget for the cooperative and
1702 a schedule of expenses for each type of unit, including fees
1703 assessed to a shareholder who has exclusive use of limited
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Amendment No. 1
1704 common areas, where such costs are shared only by those entitled
1705 to use such limited common areas.
1706 7. The lease of recreational and other facilities that
1707 will be used only by unit owners of the subject cooperative.
1708 8. The lease of recreational and other common areas that
1709 will be used by unit owners in common with unit owners of other
1710 cooperatives.
1711 9. The form of unit lease if the offer is of a leasehold.
1712 10. Any declaration of servitude of properties serving the
1713 cooperative but not owned by unit owners or leased to them or
1714 the association.
1715 11. If the development is to be built in phases or if the
1716 association is to manage more than one cooperative, a
1717 description of the plan of phase development or the arrangements
1718 for the association to manage two or more cooperatives.
1719 12. If the cooperative is a conversion of existing
1720 improvements, the statements and disclosure required by s.
1721 719.616.
1722 13. The form of agreement for sale or lease of units.
1723 14. A copy of the floor plan of the unit and the plot plan
1724 showing the location of the residential buildings and the
1725 recreation and other common areas.
1726 15. A copy of all covenants and restrictions that will
1727 affect the use of the property and are not contained in the
1728 foregoing.
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1729 16. If the developer is required by state or local
1730 authorities to obtain acceptance or approval of any dock or
1731 marina facilities intended to serve the cooperative, a copy of
1732 any such acceptance or approval acquired by the time of filing
1733 with the division pursuant to s. 719.502(1) or a statement that
1734 such acceptance or approval has not been acquired or received.
1735 17. Evidence demonstrating that the developer has an
1736 ownership, leasehold, or contractual interest in the land upon
1737 which the cooperative is to be developed.
1738 18. A copy of the inspector-prepared summary of the
1739 milestone inspection report as described in s. 553.899 ss.
1740 553.899 and 719.301(4)(p), or a statement in conspicuous type
1741 indicating that the required milestone inspection described in
1742 s. 553.899 has not been completed or that a milestone inspection
1743 is not required, as if applicable.
1744 19. A copy of the association's most recent structural
1745 integrity reserve study or a statement in conspicuous type
1746 indicating that the association has not completed a required
1747 structural integrity reserve study has not been completed or
1748 that a structural integrity reserve study is not required, as
1749 applicable.
1750 20. A copy of the turnover inspection report described in
1751 s. 719.301(4)(p) and (q) or a statement in conspicuous type
1752 indicating that a turnover inspection report has not been
1753 completed, as applicable.
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1754 (d) Milestone inspection, turnover inspection report, or
1755 structural integrity reserve study.—If the association is
1756 required to have completed a milestone inspection as described
1757 in s. 553.899, a turnover inspection report for a turnover
1758 inspection performed on or after July 1, 2023, or a structural
1759 integrity reserve study, and the association has not completed
1760 the milestone inspection, the turnover inspection report, or the
1761 structural integrity reserve study, each contract entered into
1762 after December 31, 2024, for the sale of a residential unit
1763 shall contain in conspicuous type a statement indicating that
1764 the association is required to have a milestone inspection, a
1765 turnover inspection report, or a structural integrity reserve
1766 study and has not completed such inspection, report, or study,
1767 as appropriate. If the association is not required to have a
1768 milestone inspection as described in s. 553.899 or a structural
1769 integrity reserve study, each contract entered into after
1770 December 31, 2024, for the sale of a residential unit shall
1771 contain in conspicuous type a statement indicating that the
1772 association is not required to have a milestone inspection or a
1773 structural integrity reserve study, as appropriate. If the
1774 association has completed a milestone inspection as described in
1775 s. 553.899, a turnover inspection report for a turnover
1776 inspection performed on or after July 1, 2023, or a structural
1777 integrity reserve study, each contract entered into after
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1778 December 31, 2024, for the sale of a residential unit shall
1779 contain in conspicuous type:
1780 1. A clause which states: THE BUYER HEREBY ACKNOWLEDGES
1781 THAT BUYER HAS BEEN PROVIDED A CURRENT COPY OF THE INSPECTOR -
1782 PREPARED SUMMARY OF THE MILESTONE INSPECTION REPORT AS DESCRIBED
1783 IN SECTION 553.899, FLORIDA STATUTES, IF APPLICABLE; A COPY OF
1784 THE TURNOVER INSPECTION REPORT DESCRIBED IN SECTION
1785 719.301(4)(p) AND (q), FLORIDA STATUTES, IF APPLICABLE; AND A
1786 COPY OF THE ASSOCIATION'S MOST RECENT STRUCTURAL INTEGRITY
1787 RESERVE STUDY DESCRIBED IN SECTIONS 719.103(24) AND
1788 719.106(1)(k), FLORIDA STATUTES, IF APPLICABLE, MORE THAN 15
1789 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS, PRIOR TO
1790 EXECUTION OF THIS CONTRACT; and
1791 2. A clause which states: THIS AGREEMENT IS VOIDABLE BY
1792 BUYER BY DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION TO
1793 CANCEL WITHIN 15 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL
1794 HOLIDAYS, AFTER THE DATE OF EXECUTION OF THIS AGREEMENT BY THE
1795 BUYER AND RECEIPT BY BUYER OF A CURRENT COPY OF THE INSPECTOR-
1796 PREPARED SUMMARY OF THE MILESTONE INSPECTION REPORT AS DESCRIBED
1797 IN SECTION 553.899, FLORIDA STATUTES, IF APPLICABLE; A COPY OF
1798 THE TURNOVER INSPECTION REPORT DESCRIBED IN SECTION
1799 719.301(4)(p) AND (q), FLORIDA STATUTES, IF APPLICABL E; AND A
1800 COPY OF THE ASSOCIATION'S MOST RECENT STRUCTURAL INTEGRITY
1801 RESERVE STUDY DESCRIBED IN SECTIONS 719.103(24) AND
1802 719.106(1)(k), FLORIDA STATUTES, IF APPLICABLE. ANY PURPORTED
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1803 WAIVER OF THESE VOIDABILITY RIGHTS SHALL BE OF NO EFFECT. BUYER
1804 MAY EXTEND THE TIME FOR CLOSING FOR A PERIOD OF NOT MORE THAN 15
1805 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS, AFTER
1806 THE BUYER RECEIVES A CURRENT COPY OF THE INSPECTOR-PREPARED
1807 SUMMARY OF THE MILESTONE INSPECTION REPORT AS DESCRIBED IN
1808 SECTION 553.899, FLORIDA STATUTES; A COPY OF THE TURNOVER
1809 INSPECTION REPORT DESCRIBED IN SECTION 719.301(4)(p) AND (q),
1810 FLORIDA STATUTES; OR A COPY OF THE ASSOCIATION'S MOST RECENT
1811 STRUCTURAL INTEGRITY RESERVE STUDY DESCRIBED IN SECTIONS
1812 719.103(24) AND 719.106(1)(k), FLORIDA STATUTES, IF REQUESTED IN
1813 WRITING. BUYER'S RIGHT TO VOID THIS AGREEMENT SHALL TERMINATE AT
1814 CLOSING.
1815
1816 A contract that does not conform to the requirements of this
1817 paragraph is voidable at the option of the purchaser prior to
1818 closing.
1819 (2) NONDEVELOPER DISCLOSURE.—
1820 (a) Each unit owner who is not a developer as defined by
1821 this chapter must comply with this subsection before the sale of
1822 his or her interest in the association. Each prospective
1823 purchaser who has entered into a contract for the purchase of an
1824 interest in a cooperative is entitled, at the seller's expense,
1825 to a current copy of all of the following:
1826 1. The articles of incorporation of the association.
1827 2. The bylaws and rules of the association.
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Amendment No. 1
1828 3. A copy of the question and answer sheet as provided in
1829 s. 719.504.
1830 4. A copy of the inspector-prepared summary of the
1831 milestone inspection report as described in s. 553.899 ss.
1832 553.899 and 719.301(4)(p), if applicable.
1833 5. A copy of the association's most recent structural
1834 integrity reserve study or a statement that the association has
1835 not completed a structural integrity reserve study.
1836 6. A copy of the inspection report described in s.
1837 719.301(4)(p) and (q) for a turnover inspection performed on or
1838 after July 1, 2023.
1839 (d) If the association is required to have completed a
1840 milestone inspection as described in s. 553.899, a turnover
1841 inspection report for a turnover inspection performed on or
1842 after July 1, 2023, or a structural integrity reserve study, and
1843 the association has not completed the milestone inspection, the
1844 turnover inspection report, or the structural integrity reserve
1845 study, each contract entered into after December 31, 2024, for
1846 the sale of a residential unit shall contain in conspicuous type
1847 a statement indicating that the association is required to have
1848 a milestone inspection, a turnover inspection report, or a
1849 structural integrity reserve study and has not completed such
1850 inspection, report, or study, as appropriate. If the association
1851 is not required to have a milestone inspection as described in
1852 s. 553.899 or a structural integrity reserve study, each
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Amendment No. 1
1853 contract entered into after December 31, 2024, for the sale of a
1854 residential unit shall contain in conspicuous type a statement
1855 indicating that the association is not required to ha ve a
1856 milestone inspection or a structural integrity reserve study, as
1857 appropriate. If the association has completed a milestone
1858 inspection as described in s. 553.899, a turnover inspection
1859 report for a turnover inspection performed on or after July 1,
1860 2023, or a structural integrity reserve study, each contract
1861 entered into after December 31, 2024, for the resale of a
1862 residential unit shall contain in conspicuous type:
1863 1. A clause which states: THE BUYER HEREBY ACKNOWLEDGES
1864 THAT BUYER HAS BEEN PROVIDED A CURRENT COPY OF THE INSPECTOR-
1865 PREPARED SUMMARY OF THE MILESTONE INSPECTION REPORT AS DESCRIBED
1866 IN SECTION 553.899, FLORIDA STATUTES, IF APPLICABLE; A COPY OF
1867 THE TURNOVER INSPECTION REPORT DESCRIBED IN SECTION
1868 719.301(4)(p) AND (q), FLORIDA STATUTES, IF APPLICABLE; AND A
1869 COPY OF THE ASSOCIATION'S MOST RECENT STRUCTURAL INTEGRITY
1870 RESERVE STUDY DESCRIBED IN SECTIONS 719.103(24) AND
1871 719.106(1)(k), FLORIDA STATUTES, IF APPLICABLE, MORE THAN 3
1872 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS, PRIOR TO
1873 EXECUTION OF THIS CONTRACT; and
1874 2. A clause which states: THIS AGREEMENT IS VOIDABLE BY
1875 BUYER BY DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION TO
1876 CANCEL WITHIN 3 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL
1877 HOLIDAYS, AFTER THE DATE OF EXECUTION OF THIS AGREEMENT BY THE
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Amendment No. 1
1878 BUYER AND RECEIPT BY BUYER OF A CURRENT COPY OF THE INSPECTOR -
1879 PREPARED SUMMARY OF THE MILESTONE INSPECTION REPORT AS DESCRIBED
1880 IN SECTION 553.899, FLORIDA STATUTES, IF APPLICABLE; A COPY OF
1881 THE TURNOVER INSPECTION REPORT DESCRIBED IN SECTION
1882 719.301(4)(p) AND (q), FLORIDA STATUTES, IF APPLICABLE; AND A
1883 COPY OF THE ASSOCIATION'S MOST RECENT STRUCTURAL INTEGRITY
1884 RESERVE STUDY DESCRIBED IN SECTIONS 719.103(24) AND
1885 719.106(1)(k), FLORIDA STATUTES, IF APPLICABLE. ANY PURPORTED
1886 WAIVER OF THESE VOIDABILITY RIGHTS SHALL BE OF NO EFFECT. BUYER
1887 MAY EXTEND THE TIME FOR CLOSING FOR A PERIOD OF NOT MORE THAN 3
1888 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS, AFTER
1889 THE BUYER RECEIVES A CURRENT COPY OF THE INSPECTOR-PREPARED
1890 SUMMARY OF THE MILESTONE INSPECTION REPORT AS DESCRIBED IN
1891 SECTION 553.899, FLORIDA STATUTES; A COPY OF THE TURNOVER
1892 INSPECTION REPORT DESCRIBED IN SECTION 719.301(4)(p) AND (q),
1893 FLORIDA STATUTES; OR A COPY OF THE ASSOCIATION'S MOST RECENT
1894 STRUCTURAL INTEGRITY RESERVE STUDY DESCRIBED IN SECTIONS
1895 719.103(24) AND 719.106(1)(k), FLORIDA STATUTES, IF REQUESTED IN
1896 WRITING. BUYER'S RIGHT TO VOID THIS AGREEMENT SHALL TERMINATE AT
1897 CLOSING.
1898
1899 A contract that does not conform to the requirements of this
1900 paragraph is voidable at the option of the purchaser prior to
1901 closing.
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Amendment No. 1
1902 Section 17. Paragraph (a) of subsection (7) and paragraph
1903 (c) of subsection (20) of section 719.504, Florida Statutes, are
1904 amended to read:
1905 719.504 Prospectus or offering circular.—Every developer
1906 of a residential cooperative which contains more than 20
1907 residential units, or which is part of a group of residential
1908 cooperatives which will be served by property to be used in
1909 common by unit owners of more than 20 residential units, shall
1910 prepare a prospectus or offering circular and file it with the
1911 Division of Florida Condominiums, Timeshares, and Mobile Homes
1912 prior to entering into an enforceable contract of purchase and
1913 sale of any unit or lease of a unit for more than 5 years and
1914 shall furnish a copy of the prospectus or offering circular to
1915 each buyer. In addition to the prospectus or offering circular,
1916 each buyer shall be furnished a separate page entitled
1917 "Frequently Asked Questions and Answers," which must be in
1918 accordance with a format approved by the division. This page
1919 must, in readable language: inform prospective purchasers
1920 regarding their voting rights and unit use restrictions,
1921 including restrictions on the leasing of a unit; indicat e
1922 whether and in what amount the unit owners or the association is
1923 obligated to pay rent or land use fees for recreational or other
1924 commonly used facilities; contain a statement identifying that
1925 amount of assessment which, pursuant to the budget, would be
1926 levied upon each unit type, exclusive of any special
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Amendment No. 1
1927 assessments, and which identifies the basis upon which
1928 assessments are levied, whether monthly, quarterly, or
1929 otherwise; state and identify any court cases in which the
1930 association is currently a party of record in which the
1931 association may face liability in excess of $100,000; and state
1932 whether membership in a recreational facilities association is
1933 mandatory and, if so, identify the fees currently charged per
1934 unit type. The division shall by rule require such other
1935 disclosure as in its judgment will assist prospective
1936 purchasers. The prospectus or offering circular may include more
1937 than one cooperative, although not all such units are being
1938 offered for sale as of the date of the prospectus or offering
1939 circular. The prospectus or offering circular must contain the
1940 following information:
1941 (7) A description of the recreational and other facilities
1942 that will be used in common with other cooperatives, community
1943 associations, or planned developments which require the payment
1944 of the maintenance and expenses of such facilities, directly or
1945 indirectly, by the unit owners. The description shall include,
1946 but not be limited to, the following:
1947 (a) Each building and facility committed to be built and a
1948 summary description of the structural integrity of each building
1949 for which reserves are required pursuant to s. 719.106(1)(k) .
1950
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Amendment No. 1
1951 Descriptions shall include location, areas, capacities, numbers,
1952 volumes, or sizes and may be stated as approximations or
1953 minimums.
1954 (20) An estimated operating budget for the cooperative and
1955 the association, and a schedule of the unit owner's expenses
1956 shall be attached as an exhibit and shall contain the following
1957 information:
1958 (c) The estimated items of expenses of the cooperative and
1959 the association, except as excluded under paragraph (b),
1960 including, but not limited to, the following items, which shall
1961 be stated as an association expense collectible by assessments
1962 or as unit owners' expenses payable to persons other than the
1963 association:
1964 1. Expenses for the association and cooperative:
1965 a. Administration of the association.
1966 b. Management fees.
1967 c. Maintenance.
1968 d. Rent for recreational and other commonly used areas.
1969 e. Taxes upon association property.
1970 f. Taxes upon leased areas.
1971 g. Insurance.
1972 h. Security provisions.
1973 i. Other expenses.
1974 j. Operating capital.
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Amendment No. 1
1975 k. Reserves for all applicable items referenced in s.
1976 719.106(1)(k).
1977 l. Fee payable to the division.
1978 2. Expenses for a unit owner:
1979 a. Rent for the unit, if subject to a lease.
1980 b. Rent payable by the unit owner directly to the lessor
1981 or agent under any recreational lease or lease for the use of
1982 commonly used areas, which use and payment are a mandatory
1983 condition of ownership and are not included in the common
1984 expense or assessments for common maintenance paid by the unit
1985 owners to the association.
1986 Section 18. Subsection (2) of section 558.002, Florida
1987 Statutes, is amended to read:
1988 558.002 Definitions.—As used in this chapter, the term:
1989 (2) "Association" has the same meaning as in s. 718.103 s.
1990 718.103(2), s. 719.103(2), s. 720.301(9), or s. 723.075.
1991 Section 19. Paragraph (b) of subsection (1) of section
1992 718.116, Florida Statutes, is amended to read:
1993 718.116 Assessments; liability; lien and priority;
1994 interest; collection.—
1995 (1)
1996 (b)1. The liability of a first mortgagee or its successor
1997 or assignees who acquire title to a unit by foreclosure or by
1998 deed in lieu of foreclosure for the unpaid assessments that
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Amendment No. 1
1999 became due before the mortgagee's acquisition of ti tle is
2000 limited to the lesser of:
2001 a. The unit's unpaid common expenses and regular periodic
2002 assessments which accrued or came due during the 12 months
2003 immediately preceding the acquisition of title and for which
2004 payment in full has not been received by the association; or
2005 b. One percent of the original mortgage debt. The
2006 provisions of this paragraph apply only if the first mortgagee
2007 joined the association as a defendant in the foreclosure action.
2008 Joinder of the association is not required if, on the date the
2009 complaint is filed, the association was dissolved or did not
2010 maintain an office or agent for service of process at a location
2011 which was known to or reasonably discoverable by the mortgagee.
2012 2. An association, or its successor or assignee, that
2013 acquires title to a unit through the foreclosure of its lien for
2014 assessments is not liable for any unpaid assessments, late fees,
2015 interest, or reasonable attorney's fees and costs that came due
2016 before the association's acquisition of title in favor of any
2017 other association, as defined in s. 718.103 s. 718.103(2) or s.
2018 720.301(9), which holds a superior lien interest on the unit.
2019 This subparagraph is intended to clarify existing law.
2020 Section 20. Paragraph (d) of subsection (2) of section
2021 720.3085, Florida Statutes, is amended to read:
2022 720.3085 Payment for assessments; lien claims.—
2023 (2)
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Bill No. CS/HB 1395 (2023)
Amendment No. 1
2024 (d) An association, or its successor or assignee, that
2025 acquires title to a parcel through the foreclosure of its lien
2026 for assessments is not liable for any unpaid assessments, late
2027 fees, interest, or reasonable attorney's fees and costs that
2028 came due before the association's acquisition of title in favor
2029 of any other association, as defined in s. 718.103 s. 718.103(2)
2030 or s. 720.301(9), which holds a superior lien interest on the
2031 parcel. This paragraph is intended to clarify existing law.
2032 Section 21. Effective July 1, 2027, for the purpose of
2033 incorporating the amendments made by this act to section
2034 718.1255, Florida Statutes, in a reference thereto, section
2035 719.1255, Florida Statutes, is reenacted to read:
2036 719.1255 Alternative resolution of disputes.—The Division
2037 of Florida Condominiums, Timeshares, and Mobile Homes of the
2038 Department of Business and Professional Regulation shall provide
2039 for alternative dispute resolution in accordance with s.
2040 718.1255.
2041 Section 22. Paragraph (f) of subsection (1) of section
2042 718.501, Florida Statutes, is reenacted to read:
2043 718.501 Authority, responsibility, and duties of Division
2044 of Florida Condominiums, Timeshares, and Mobile Homes.—
2045 (1) The division may enforce and ensure compliance with
2046 this chapter and rules relating to the development,
2047 construction, sale, lease, ownership, operation, and management
2048 of residential condominium units and complaints related to the
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Amendment No. 1
2049 procedural completion of milestone inspections under s. 553.899.
2050 In performing its duties, the division has complete jurisdiction
2051 to investigate complaints and enforce compliance with respect to
2052 associations that are still under developer control or the
2053 control of a bulk assignee or bulk buyer pursuant to part VII of
2054 this chapter and complaints against developers, bulk assignees,
2055 or bulk buyers involving improper turnover or failure to
2056 turnover, pursuant to s. 718.301. However, after turnover has
2057 occurred, the division has jurisdiction to investigate
2058 complaints related only to financial issues, elections, and t he
2059 maintenance of and unit owner access to association records
2060 under s. 718.111(12), and the procedural completion of
2061 structural integrity reserve studies under s. 718.112(2)(g).
2062 (f) The division may adopt rules to administer and enforce
2063 this chapter.
2064 Section 23. Paragraph (f) of subsection (1) of section
2065 719.501, Florida Statutes, is reenacted to read:
2066 719.501 Powers and duties of Division of Florida
2067 Condominiums, Timeshares, and Mobile Homes.—
2068 (1) The Division of Florida Condominiums, Timeshares, and
2069 Mobile Homes of the Department of Business and Professional
2070 Regulation, referred to as the "division" in this part, in
2071 addition to other powers and duties prescribed by chapter 718,
2072 has the power to enforce and ensure compliance with this chapter
2073 and adopted rules relating to the development, construction,
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Amendment No. 1
2074 sale, lease, ownership, operation, and management of residential
2075 cooperative units; complaints related to the procedural
2076 completion of the structural integrity reserve studies under s.
2077 719.106(1)(k); and complaints related to the procedural
2078 completion of milestone inspections under s. 553.899. In
2079 performing its duties, the division shall have the following
2080 powers and duties:
2081 (f) The division has authority to adopt rules pursuant to
2082 ss. 120.536(1) and 120.54 to implement and enforce the
2083 provisions of this chapter.
2084 Section 24. For the 2023-2024 fiscal year, the sums of
2085 $1,301,928 in recurring funds and $67,193 in nonrecurring funds
2086 from the Division of Florida Condominiums, Timeshares, and
2087 Mobile Homes Trust Fund are appropriated to the Department of
2088 Business and Professional Regulation, and 10 full-time
2089 equivalent positions with associated salary rate of 487,264 are
2090 authorized for the purpose of implementing this act.
2091 Section 25. Except as otherwise expressly provided in this
2092 act, this act shall take effect upon becoming a law.
2093
2094
2095 -----------------------------------------------------
2096 T I T L E A M E N D M E N T
2097 Remove everything before the enacting clause and insert:
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Amendment No. 1
2098 An act relating to management and safety of condominium and
2099 cooperative buildings; amending s. 468.4334, F.S.; revising the
2100 circumstances under which community association managers or
2101 management firms must comply with a specified provision;
2102 amending s. 553.899, F.S.; revising legislative findings;
2103 revising the definition of the terms "milestone inspection" and
2104 "substantial structural deterioration"; revising who must have
2105 milestone inspections performed for buildings; revising the
2106 deadline for milestone inspections of certain buildings;
2107 authorizing local enforcement agencies to make certain
2108 determinations relating to milestone inspections after a
2109 building reaches a specified age; authorizing local enforcement
2110 agencies to extend deadlines for milestone inspections under
2111 certain circumstances; authorizing local enforcement agencies to
2112 accept certain inspection reports under certain circumstances;
2113 deeming the inspections relating to such inspection reports a
2114 milestone inspection for certain purposes; revising costs that
2115 condominium and cooperative associations are responsible for;
2116 revising requirements relating to written notice of required
2117 inspections; requiring architects or engineers performing
2118 milestone inspections to submit a specified progress report to a
2119 local enforcement agency within a specified timeframe under
2120 certain circumstances; specifying that associations must
2121 distribute copies of certain inspection reports within a
2122 specified timeframe and in a specified manner; authorizing
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