Meeting Packet — Florida House Insurance & Banking Subcommittee (January 18, 2024)
Summary
Meeting packet of the Florida House of Representatives Commerce Committee Insurance & Banking Subcommittee for Thursday, January 18, 2024, with Wyman Duggan as Chair and Paul Renner as Speaker. The meeting agenda lists HB 605 Asset Protection Products by Tramont, HB 625 Property Insurance Coverage by Buchanan, HB 637 Treatment by a Medical Specialist by Yeager and HB 943 Pub. Rec./My Safe Florida Home Program by LaMarca. It also lists PCS for HB 311 – Securities and PCS for HB 939 -- Consumer Protection. The packet then begins with the House of Representatives staff analysis of HB 605, which describes licensing by the Office of Financial Regulations under the Motor Vehicle Sales Finance Act.
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Insurance & Banking Subcommittee
Thursday, January 18, 2024
9:00 AM - 12:00 PM
Morris Hall (17 HOB)
Meeting Packet
Paul Renner Wyman Duggan
Speaker Chair
The Florida House of Representatives
Commerce Committee
Insurance & Banking Subcommittee
Paul Renner Wyman Duggan
Speaker Chair
Meeting Agenda
Thursday, January 18, 2024
9:00 am – 12:00 pm
Morris Hall (17 HOB)
I. Call to Order
II. Roll Call
III. Welcome and Opening Remarks
IV. Consideration of the following bill(s):
• HB 605 Asset Protection Products by Tramont
• HB 625 Property Insurance Coverage by Buchanan
• HB 637 Treatment by a Medical Specialist by Yeager
• HB 943 Pub. Rec./My Safe Florida Home Program by LaMarca
Consideration of the following proposed committee substitute(s):
• PCS for HB 311 – Securities
• PCS for HB 939 -- Consumer Protection
V. Closing Remarks
VI. Adjournment
303 House Office Building, 402 South Monroe Street, Tallahassee, FL 32399-1300
(850) 717-4870
HB 605
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 605 Asset Protection Products
SPONSOR(S): Tramont
TIED BILLS: IDEN./SIM. BILLS: SB 902
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee Herrera Lloyd
2) State Administration & Technology
Appropriations Subcommittee
3) Commerce Committee
SUMMARY ANALYSIS
Under the Motor Vehicle Sales Finance Act, individuals, excluding banks, trust companies, savings and loan
associations, or credit unions authorized to operate in Florida, must obtain a license from the Office of
Financial Regulations (OFR) to conduct motor vehicle retail installment transactions.
Once an entity receives its licensing it is authorized to offer a retail installment contract. A retail installment
contract refers to an agreement where a seller retains or acquires a title or lien on a motor vehicle as security,
wholly or partially, for the buyer's obligations. When entering into a new retail installment contract, loan
contract, or lease agreement for a motor vehicle, a motor vehicle retail installment seller, sales finance
company, retail lessor, or any assignee may offer optional guaranteed asset protection products for a fee or
otherwise. The term guaranteed asset protection product refers to a provision in a loan, lease, or retail
installment contract, or a modification or addendum to such contracts, wherein a creditor agrees to exempt a
customer from liability for payment of any or all of the amount exceeding the collateral's value. Vehicle Value
Protection Agreement Act (VVPA) and excess wear agreements are not currently regulated by statute.
The bill makes changes related to asset protection products, including:
Guaranteed Asset Protection Products: Limits coverage to cases of total damage or theft. Permits benefits
such as waiving a part of the purchase price or providing credit for a replacement vehicle, with the option to
offer these benefits at no additional cost. Changes to retail installment contracts include refunding buyers for
terminated products, subject to a 90-day notification period and administrative fees. The bill also allows
cancelation or noncancellation of products after a 30-day free look period, with refunds paid directly to the
vehicle holder in specific circumstances.
VVPA: Establishes a statutory framework for Vehicle Value Protection Agreements (VVPAs), defining them
as agreements offering benefits to reduce finance agreement deficiency balances or facilitate the
acquisition of replacement motor vehicles or services in adverse events. VVPAs are not considered
insurance under the Florida Insurance Code and have specific financial security requirements. The bill
imposes requirements for offering VVPAs, ensuring transparent pricing and non-contingent terms on credit
extensions or motor vehicle transactions. Providers must adhere to insurance and financial reserve
standards. Disclosure requirements include identifying information, agreement terms, cancelation details,
and the non-conditionality of credit or vehicle sale/lease terms on VVPA purchase. The bill mandates
specific terms in VVPAs, including cancelation conditions and refund details, with penalties for intentional
violations outlined.
Excess Wear and Use Waiver: Establishes that an excess wear and use waiver is a contractual
agreement within a motor vehicle lease where the lessor, with or without an extra charge, agrees to cancel
or waive amounts due under the lease for excessive wear, use, or mileage. Disclosure requirements
include total charge, limitations, and cancellation terms with a possible administrative fee capped at $75.
The bill has no fiscal impact on local government, an indeterminate positive impact on state government
revenues and an indeterminate negative effect on expenditures, and an indeterminate economic impact on the
private sector.
This bill provides an effective date as of October 1, 2024.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Office of Financial Regulation
OFR is the regulatory authority for Florida’s financial services industry. 1 OFR reports to the Financial
Services Commission (Commission) which is made up of the Governor and the members of the Florida
Cabinet: the Chief Financial Officer (CFO), Attorney General (AG), and Agriculture Commissioner. 2
OFR enforces and administers the Financial Institutions Codes; is responsible for supervising banks,
credit unions, savings associations, and international bank agencies; and licenses and regulates non-
depository finance companies and the securities industry.3
Regulation of Consumer Finance
The Division of Consumer Finance is responsible for licensing and overseeing different facets of non-
depository financial services sectors.4 This includes the regulation of motor vehicle retail installment
sellers, governed by Chapter 520 of the Florida Statutes.5 According to Chapter 520, Florida Statutes, it
is imperative for individuals to hold a license before engaging in the motor vehicle retail installment
seller business or operating a branch thereof.6
Florida Motor Vehicle Retail Sales Finance Act
Under the Motor Vehicle Sales Finance Act, individuals, excluding banks, trust companies, savings and
loan associations, or credit unions authorized to operate in Florida, must obtain a license from the OFR
to conduct motor vehicle retail installment transactions.7 Florida's Motor Vehicle Retail Sales Finance
Act8 is administered by the Financial Services Commission. 9
To obtain a license, an application must be submitted to the Office of Financial Regulation of the
Financial Services Commission, adhering to the prescribed form.10 The Commission may request
information essential for assessing eligibility, including details about officers, directors, control persons,
members, partners, joint ventures, or individuals with a 10% or greater interest in the applicant.11 The
Office may seek various information, such as names, age, social security numbers, residential history,
qualifications, educational and business background, and disciplinary and criminal history. If approved,
the license, valid for up to two years, will be issued.12 An initial application fee is required, and it is
nonrefundable.13
A licensed entity must transact business as a motor vehicle retail installment seller solely under its
licensed name.14 Licenses granted under this act are neither transferable nor assignable.15
1 Florida Office of Financial Regulation, About Our Agency, https://flofr.gov/sitePages/AboutOFR.htm (last visited Jan. 16, 2024).
2 Id.
3 Id.
4 Florida Office of Financial Regulations, Agency Analysis of 2024 SB 902, p. 2 (Jan. 16, 2024).
5 Id.
6 Id.
7 S. 520.03(1), F.S.
8 S. 520.01, F.S.
9 Id. at (2). As to the regulations relating to motor vehicle sales finance, see Fla. Admin. Code R. 69V-50.001 to 69V-50.085. The FSC
is composed of the Governor, Attorney General, Chief Financial Officer, and Commissioner of Agriculture. S. 20.121(3), F.S .
10 S.520.03(2), F.S.
11 Id.
12 Id.
13 Id.
14 S.520.03(4), F.S.
15 Id.
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Retail Installment Contracts
Once an entity receives its licensing it is authorized to offer a retail installment contract. A retail
installment contract refers to an agreement where a seller retains or acquires a title or lien on a motor
vehicle as security, wholly or partially, for the buyer's obligations. 16 This includes conditional sales
contracts and contracts for the bailment or leasing of a motor vehicle, where the bailee or lessee
agrees to pay compensation equivalent to or exceeding the vehicle's value, with the option to become
the owner upon full compliance with the contract's provisions. 17
The contract must include, among other things, specific details such as a statement on the absence of
liability insurance coverage for bodily injury and property damage, the names and addresses of the
seller and buyer, a detailed description of the motor vehicle, including make, year, model, and
identification number, as well as financial information like the amount financed, finance charge, total
payments, total sale price, and the number, amount, and date of scheduled payments. 18
Moreover, the seller is required to provide a separate written breakdown of the amount financed,
disclosing the cash price, down payment, the difference between cash price and down payment,
amounts for insurance and other benefits, and any taxes and official fees not covered in the cash
price.19 This breakdown may be presented on a separate disclosure statement or within the same
document as the contract, provided it is clearly and prominently segregated. 20
Guaranteed Asset Protection Products
When entering into a new retail installment contract, loan contract, or lease agreement for a motor
vehicle, a motor vehicle retail installment seller, sales finance company, retail lessor, or any assignee
may offer optional guaranteed asset protection products for a fee or otherwise. 21 The term guaranteed
asset protection product refers to a provision in a loan, lease, or retail installment contract, or a
modification/addendum to such contracts, wherein a creditor agrees to exempt a customer from liability
for payment of any or all of the amount exceeding the collateral's value. 22 It is important to note that this
product does not fall under the category of insurance as defined by the Florida Insurance Code. 23 This
subsection is applicable to all guaranteed asset protection products issued before October 1, 2008. 24
To offer guaranteed asset protection products, the motor vehicle retail installment seller, sales finance
company, retail lessor, or assignee must adhere to the following25:
The cost of any guaranteed asset protection product should not exceed the amount of the
indebtedness.26
A guaranteed asset protection product is considered an obligation of any person acquiring
the loan contract covering the product.27
Entities providing guaranteed asset protection products must offer clear and understandable
disclosures detailing eligibility requirements, conditions, refunds, and exclusions. The
purchase of the product must be optional, and the disclosures should be in plain language
and easily readable.28
The entity must provide a copy of the executed guaranteed asset protection product contract
to the buyer, with the entity bearing the burden of proving the contract was provided. 29
16 S. 520.02(17), F.S.
17 Id.
18
S. 520.07, F.S.
19 S. 520.07(3), F.S.
20 Id.
21
S.520.07(11), F.S.
22
S. 520.02(7), F.S.
23Chapters 624-632, 634, 635, 636, 641, 642, 648, and 651 constitute the Florida Insurance Code. See also s. 624.01,
F.S.
24 S. 520.02(7), F.S.
25 S. 520.07(11), F.S.
26 Id.
27 Id.
28 Id.
29 Id.
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Contracts for guaranteed asset protection products cannot include terms allowing the entity
to unilaterally modify the contract unless the modification benefits the buyer without
additional charges or the buyer is notified of any proposed changes and provided a
reasonable opportunity to cancel without penalty before the changes take effect. 30
If a contract for a guaranteed asset protection product is terminated, the entity must refund
any unearned fees paid by the buyer unless the contract specifies otherwise. To receive a
refund, the buyer must notify the entity of the termination event within 90 days and request a
refund. An entity may offer a contract without a refund provision only if a bona fide option for
a comparable contract with a refund provision is also offered to the buyer. 31
Vehicle Value Protection Agreement
A vehicle value protection agreement (agreement) is a contractual arrangement offering benefits when
a vehicle owner replaces the vehicle during trade-in, in case of theft, or after an adverse event affecting
the vehicle's value.32 An agreement that complies with the act is not considered insurance and is
exempt from regulatory oversight as insurance.33 Vehicle Value Protection agreements is not currently
regulated in Florida.
Excess Wear and Use Coverage
Excess wear and use coverage can be added to a lease agreement to protect lessees from incurring
additional charges related to damages or excessive wear on the leased vehicle. 34 The liability under
most open-end leases is influenced by the vehicle's wear, significantly impacting financial obligations.
Excessive wear and tear, as defined in a lease agreement, refers to wear surpassing stipulated
standards, often explicitly outlined and required to be reasonable. Similar to excess mileage, excessive
wear and tear invariably diminishes the vehicle's value, whether leased or purchased. 35
The assumed residual value in the lease is based on the expectation that the vehicle will be returned in
a specified condition. This additional coverage typically addresses various issues such as dents,
scratches, tire wear, interior stains, and more. It offers reassurance by relieving lessees of financial
responsibility for the typical wear and tear on the vehicle.36 Excess wear and use coverage is not
currently regulated in Florida.
Effect of the Bill
Guaranteed Asset Protection Products
The bill limits guaranteed asset protection products covering a purchaser’s responsibility for paying the
debt exceeding the collateral value in cases of total damage or unrecovered theft. It allows the product
to offer benefits like waiving a part of the purchase price or providing a credit for a replacement motor
vehicle. It also specifies that such agreements and benefits may be offered with or without additional
cost to the purchaser.
The bill introduces changes to retail installment contracts, including:
Refunding buyers for terminated guaranteed asset protection products, unless the contract
specifies otherwise. No refund is due if the buyer has received a benefit, and a 90-day
notification period is required.
Authorizing an administrative fee to be deducted from refunds of up to $75, except for
refunds following a 30-day free look period.
30 Id.
31 Id.
32 Colo. Rev. Stat. S. 42-21-101 (2023)
33 Id.
34 Board of Governors of the Federal Reserve System , More Information ab out Excessive Wear-and-Tear Charges,
https://www.federalreserve.gov/pubs/leasing/resource/consider/endopen_info10.htm (last visited Jan. 16, 2024).
35 Id.
36 Id.
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Allowing cancelation or noncancellation of guaranteed asset protection products after a
minimum 30-day free look period, provided no benefits are provided.
Directly paying refunds to the vehicle holder or its assignee for terminations due to default,
repossession, or contract termination, unless the retail installment contract is paid in full.
Vehicle Value Protection Agreement Act (VVPA)
The bill creates a statutory framework for VPPA. It provides relevant definitions for administrator,
commercial, commission, contract holder, finance agreement, motor vehicle, provider, and vehicle
value protection agreement. The bill defines VVPA as an agreement that provides:
benefits for reducing the current finance agreement deficiency balance of the contract
holder; or
facilitating the acquisition or leasing of a replacement motor vehicle or motor vehicle
services in case of adverse events such as loss, theft, damage, obsolescence, diminished
value, or depreciation.
VVPAs are not insurance subject to the Florida Insurance Code and are not subject to financial security
requirements except as specified in the bill.
Further, the bill creates requirements for offering VVPA for personal use vehicles. VVPA can be
offered, sold, or given to consumers as long as:
Any amount charged or financed is clearly stated for the VVPA and is not considered a
finance charges or interest.
The extension of credit, terms of credit, and terms of the related motor vehicle sale or lease
are not contingent upon the consumer's payment for or financing of any charge for a VVPA.
However, these agreements may be discounted or provided at no charge with the purchase
of noncredit-related goods or services.
VVPA’s are sold only after providing the contract holder with access to a copy of the
agreement.
Additionally, the sale of VVPA is prohibited if the coverage duplicates another VVPA for the same
vehicle or a guaranteed asset protection product.
Providers are required to:
o Insure all VVPA liabilities under a policy from an authorized insurer.
o Maintain a reserve account not less than 40 percent of gross consideration received,
less claims paid, for in-force contracts in the state.
o Maintain a net worth or stockholders' equity directly or via the worth of its parent
company of $100 million, providing financial statements upon request.
The bill requires all VVPA to disclose the following:
Identifying information of the provider, purchaser, and administrator;
Explicit terms of the agreement, including purchase price, eligibility criteria, coverage
conditions, and exclusions;
Notification that the contract is cancelable within a minimum 30-day free look period, with a
full refund if canceled during this time and no benefits have been provided;
Procedure for obtaining benefits, cancelation conditions, and refund details; and
Credit extension or vehicle sale/lease terms is not conditioned on VVPA purchase.
The bill requires that all VVPA must incorporate the following terms:
Precise terms and conditions for cancelation by either the provider or contract holder;
Requirement for the provider to give a 5-day written notice before cancelation, stating the
effective date and reason, except in specific circumstances;
Full refund by the provider if the agreement is canceled for reasons other than nonpayment,
deducting any claims paid if coverage continues after a claim; and
Allowance for a reasonable administrative fee, not exceeding $75, by the provider.
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The bill specifies that any provider, administrators, or any individual intentionally violating Part II of ch.
520, F.S., relating to VVPAs may be subject to fines not to exceed $500 per violation and no more than
$10,000 for all violations of a similar nature.
Excess Wear and Use Waiver
The bill authorizes an excess wear and use waiver is a contractual agreement within a motor vehicle
lease where the lessor, with or without an extra charge, agrees to cancel or waive amounts due under
the lease for excessive wear, use, or mileage but the waiver agreement must disclose the following:
The total charge for the waiver.
Any exclusions or limitations on the amount of excess wear and use that the waiver covers.
Terms, restrictions, and conditions for canceling the waiver before its termination or
expiration, including a potential administrative fee not exceeding $75.
B. SECTION DIRECTORY:
Section 1: Amends s. 520.02, F.S., relating to definitions.
Section 2: Amends s. 520.07, F.S., relating to requirements and prohibitions as to retail installment
contracts.
Section 3: Redesignates parts II through VI of Ch. 520 as parts III through VII.
Section 4: Creates Part II of Ch. 520, F.S., relating to Vehicle Value Protection Agreements.
Section 5: Amends s. 521.003, F.S., relating to definitions.
Section 6: Creates s. 521.007, F.S., relating to extended wear and use waiver.
Section 7: Amends s. 24.118, F.S., relating to other prohibited acts; penalties.
Section 8: Amends s. 501.604, F.S., relating to exemptions.
Section 9: Amends s. 671.304, F.S., relating to laws not repealed; precedence where code
provisions in conflict with other laws; certain statutory remedies retained.
Section 10: Providing an effective date of October 1, 2024.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
State governments may experience a rise in revenue due to new penalty collections.
2. Expenditures:
State governments may face increased expenditures due to new administrative and enforcement
costs.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Since GAP products will be limited to total loss cases, consumers may experience increased cost to
obtain full coverage by now having to purchase a second product; i.e., both a GAP and a VVPA.
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Purchasers may experience savings where the products authorized by the bill cover losses that have
not previously been provided for by an authorized product.
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:
The retroactive application to "related products" raises constitutional concerns, particularly regarding
fairness and due process. Applying regulations retroactively without accompanying findings may
infringe on individuals' rights to fair notice and protection against arbitrary government actions,
posing potential constitutional issues.
B. RULE-MAKING AUTHORITY:
None provided by the bill.
C. DRAFTING ISSUES OR OTHER COMMENTS:
Several concerns arise in the current draft of the bill. Questions surround the necessity and advisability
of retroactively applying the sentence in lines 47-49 to "related products" without accompanying
findings. Additionally, the definition of "holder" is provided on line 98, while "administrator" remains
undefined; this prompts consideration for a parallel definition or potential removal. Ambiguity exists
regarding the required license for issuing VVPAs or Excess Wear and Tear. Aligning the term "provider"
in Part II to specify authorized licensees may enhance clarity. Inconsistencies between 520 Part I and
Part II arise with the definition of "holder," necessitating alignment for consistency. The disclosure in
520.1504 introduces a 30-day free look cancellation not found in 520.1503, suggesting a need for
inclusion in Part II for coherence. Clarity is needed on the intended period of application for the $10,000
limit in lines 276-283. Consider revisiting the titles of Chapter 521 to better reflect the addition of Motor
Vehicle Lease Agreements. Finally, the provision in lines 374-383 could either expressly complement
the 521.004 disclosure or be relocated for improved organization and coherence.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 605 2024
1 A bill to be entitled
2 An act relating to asset protection products; amending
3 s. 520.02, F.S.; revising the definition of the term
4 "guaranteed asset protection product"; amending s.
5 520.07, F.S.; providing that an entity may offer a
6 buyer a contract that does not provide for a refund
7 only if the entity also offers that buyer a bona fide
8 option to purchase a comparable contract that provides
9 for a refund; providing requirements for guaranteed
10 asset protection products; creating a new part II of
11 chapter 520, F.S., entitled "Vehicle Value Protection
12 Agreements"; creating s. 520.1501, F.S.; providing a
13 short title; creating s. 520.1502, F.S.; providing
14 definitions; creating s. 520.1503, F.S.; providing
15 requirements for offering vehicle value protection
16 agreements for personal use vehicles; creating s.
17 520.1504, F.S.; providing disclosure requirements;
18 creating s. 520.1505, F.S.; exempting certain
19 commercial transactions; creating s. 520.1506, F.S.;
20 providing penalties for violations; amending s.
21 521.003, F.S.; defining the term "excess wear and use
22 waiver"; creating s. 521.007, F.S.; providing for
23 extended wear and use waivers in motor vehicle lease
24 agreements; providing requirements; amending ss.
25 24.118, 501.604, and 671.304, F.S.; conforming
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26 provisions to changes made by the act; providing an
27 effective date.
28
29 Be It Enacted by the Legislature of the State of Florida:
30
31 Section 1. Subsection (7) of section 520.02, Florida
32 Statutes, is amended to read:
33 520.02 Definitions.—In this act, unless the context or
34 subject matter otherwise requires:
35 (7) "Guaranteed asset protection product" means a loan,
36 lease, or retail installment contract term, or modification or
37 addendum to a loan, lease, or retail installment contract, under
38 which a creditor agrees with or without a separate charge, to
39 cancel or waive a customer's liability for payment of some or
40 all of the amount by which the debt exceeds the value of the
41 collateral that has incurred total physical damage or is the
42 subject of an unrecovered theft. A guaranteed asset protection
43 product may also provide, with or without a separate charge, a
44 benefit that waives a portion of, or provides a customer with a
45 credit towards, the purchase of a replacement motor vehicle.
46 Such a product is not insurance for purposes of the Florida
47 Insurance Code. This subsection also applies to all guaranteed
48 asset protection and related products issued before October 1,
49 2008.
50 Section 2. Paragraph (g) of subsection (11) of section
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51 520.07, Florida Statutes, is amended, and paragraphs (h) and (i)
52 are added to that subsection, to read:
53 520.07 Requirements and prohibitions as to retail
54 installment contracts.—
55 (11) In conjunction with entering into any new retail
56 installment contract or contract for a loan, a motor vehicle
57 retail installment seller as defined in s. 520.02, a sales
58 finance company as defined in s. 520.02, or a retail lessor as
59 defined in s. 521.003, and any assignee of such an entity, may
60 offer, for a fee or otherwise, optional guaranteed asset
61 protection products in accordance with this chapter . The motor
62 vehicle retail installment seller, sales finance company, retail
63 lessor, or assignee may not require the purchase of a guaranteed
64 asset protection product as a condition for making the loan. In
65 order to offer any guaranteed asset protection product, a motor
66 vehicle retail installment seller, sales finance company, or
67 retail lessor, and any assignee of such an entity, shall comply
68 with the following:
69 (g) If a contract for a guaranteed asset protection
70 product is terminated, the entity shall refund to the buyer any
71 unearned fees paid for the contract unless the contract provides
72 otherwise. A refund is not due to a consumer who receives a
73 benefit under such product. In order to receive a refund, the
74 buyer must notify the entity of the event terminating the
75 contract and request a refund within 90 days after the
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76 occurrence of the event terminating the contract. An entity may
77 offer a buyer a contract that does not provide for a refund only
78 if the entity also offers that buyer a bona fide option to
79 purchase a comparable contract that provides for a refund. An
80 entity may offer a buyer a contract that does not provide for a
81 refund only if the entity also offers that buyer a bona fide
82 option to purchase a comparable contract that provides for a
83 refund. Except for refunds pursuant to paragraph (h), an
84 administrative fee deducted from a refund under this section may
85 not exceed $75.
86 (h) Guaranteed asset protection products may be cancelable
87 or noncancelable after a free look period, which is the period
88 of time from the effective date of the contract until the date
89 the contract may be canceled by the buyer without penalty, fees,
90 or costs, so long as no benefits have been provided. This period
91 may not be less than 30 days.
92 (i) If the termination of the guaranteed asset protection
93 product occurs because of a default under the retail installment
94 contract or contract for a loan, or the repossession of the
95 motor vehicle associated with the retail installment contract or
96 contract for a loan, or any other termination of the retail
97 installment contract or contract for a loan, any refund due may
98 be paid directly to the holder or administrator and applied as a
99 reduction of the amount owed under the retail installment
100 contract or contract for a loan, unless the buyer can show that
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101 the retail installment contract has been paid in full.
102 Section 3. Parts II through VI of chapter 520, Florida
103 Statutes, are redesignated as parts III through VII,
104 respectively.
105 Section 4. Part II of chapter 520, Florida Statutes,
106 consisting of ss. 520.1501-520.1506, F.S., is created to read:
107 Part II
108 Vehicle Value Protection Agreements
109 520.1501 Florida Vehicle Value Protection Agreements Act. —
110 This part may be cited as the "Vehicle Value Protection
111 Agreements Act."
112 520.1502 Definitions.—As used in this part, the term:
113 (1) "Administrator" means the person responsible for the
114 administrative or operational function of vehicle value
115 protection agreements, including, but not limited to, the
116 adjudication of claims or benefit requests by contract holders.
117 (2) "Commercial" means a transaction wherein the motor
118 vehicle will be primarily used for business or commercial
119 purposes.
120 (3) "Commission" means the Financial Services Commission.
121 (4) "Contract holder" means a person who is the purchaser
122 or holder of a vehicle value protection agreement.
123 (5) "Finance agreement" means a loan, retail installment
124 sales contract, or lease for the purchase, refinancing, or lease
125 of a motor vehicle.
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126 (6) "Motor vehicle" has the same meaning as in s. 316.003.
127 (7) "Provider" means a person that is obligated to provide
128 a benefit under a vehicle value protection agreement. A provider
129 may perform as an administrator or retain the services of a
130 third-party administrator.
131 (8) "Vehicle value protection agreement" includes a
132 contractual agreement that provides a benefit towards either the
133 reduction of some or all of the contract holder's current
134 finance agreement deficiency balance or the purchase or lease of
135 a replacement motor vehicle or motor vehicle services, upon the
136 occurrence of an adverse event to the motor vehicle, including,
137 but not limited to, loss, theft, damage, obsolescence,
138 diminished value, or depreciation. The agreements do not include
139 guaranteed asset protection products as described in s.
140 520.07(11)(h). Such an agreement is not insurance for the
141 purposes of the Florida Insurance Code.
142 520.1503 Requirements for offering vehicle value
143 protection agreements for personal use vehicles.—
144 (1) Vehicle value protection agreements may be offered,
145 sold, or given to consumers in this state in compliance with
146 this part.
147 (2) Notwithstanding any other provision of law, any amount
148 charged or financed for a vehicle value protection product must
149 be separately stated and is not to be considered a finance
150 charge or interest.
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151 (3) The extension of credit, the terms of credit, and the
152 terms of the related motor vehicle sale or lease may not be
153 conditioned upon the consumer's payment for or financing of any
154 charge for a vehicle value protection agreement. However,
155 vehicle value protection agreements may be discounted or given
156 at no charge in connection with the purchase of other noncredit
157 related goods or services.
158 (4) A provider may, but is not required to, use an
159 administrator or other designee who shall be responsible for any
160 and all of the administration of vehicle value protection
161 agreements in compliance with this part.
162 (5) A vehicle value protection agreement shall not be sold
163 unless the contract holder has been or will be provided access
164 to a copy of the vehicle value protection agreement.
165 (6) A vehicle value protection agreement may not be sold
166 if its coverage is duplicative of another vehicle value
167 protection agreement for the vehicle or of a guaranteed asset
168 protection product.
169 (7) Each provider shall:
170 (a) Insure all of its vehicle value protection agreements
171 under a policy that pays or reimburses in the event the provider
172 fails to perform its obligations under the vehicle value
173 protection agreement that is issued by an insurer licen sed or
174 otherwise authorized or eligible to do business in this state;
175 (b) Maintain a funded reserve account for its obligations
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176 under its contracts issued and outstanding in this state. The
177 reserves shall not be less than 40 percent of gross
178 consideration received, less claims paid, on the sale of the
179 vehicle value protection agreement for all in-force contracts in
180 this state. The reserve shall be placed in a trust with the
181 commission a financial security deposit, having a value of not
182 less than 5 percent of the gross consideration received, less
183 claims paid, on the sale of the vehicle value protection
184 agreements for all vehicle value protection agreements issued
185 and in force in this state, but not less than $25,000,
186 consisting of one of the following:
187 1. A surety bond issued by an authorized surety;
188 2. Securities of the type eligible for deposit by insurers
189 pursuant to s. 625.52;
190 3. Cash;
191 4 A letter of credit issued by a qualified financial
192 institution; or
193 5. Another form of security prescribed by regulations
194 issued by the commission; or
195 (c) Maintain, or together with its parent corporation
196 maintain, a net worth or stockholders' equity of $100 million;
197 and upon request, provide the commission with a copy of the
198 provider's or the provider's parent company's most recent Form
199 10-K or Form 20-F filed with the Securities and Exchange
200 Commission (SEC) within the last calendar year, or if the
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201 company does not file with the SEC, a copy of the company's
202 audited financial statements, which shows a net wor th of the
203 provider or its parent company of at least $100 million. If the
204 provider's parent company's Form 10-K, Form 20-F, or financial
205 statements are filed to meet the provider's financial security
206 requirement, then the parent company shall agree to guar antee
207 the obligations of the provider relating to vehicle value
208 protection agreements sold by the provider in this state.
209 (8) Except for the requirements specified in subsection
210 (7), no other financial security requirements shall be required
211 for vehicle value protection agreement providers.
212 520.1504 Disclosures.—
213 (1) Vehicle value protection agreements must disclose in
214 writing and in clear, understandable language that is easy to
215 read, the following:
216 (a) The name and address of the provider, contract holder,
217 and administrator, if any.
218 (b) The terms of the vehicle value protection agreement,
219 including, without limitation, the purchase price to be paid by
220 the contract holder, if any, the requirements for eligibility,
221 conditions of coverage, and exclusions.
222 (c) That the vehicle value protection agreement may be
223 canceled by the contract holder within a free look period which
224 is the period of time from the effective date of the contract
225 until the date the contract may be canceled without penalty,
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226 fee, or costs. This period may not be less than 30 days. That,
227 in such event, the contract holder is entitled to a full refund
228 of the purchase price paid by the contract holder, if any, so
229 long as no benefits have been provided.
230 (d) The procedure the contract holder must follow, if any,
231 to obtain a benefit under the terms and conditions of the
232 vehicle value protection agreement, including, if applicable, a
233 telephone number or website and address where the contract
234 holder may apply for a benefit.
235 (e) Whether or not the vehicle value protection agreement
236 is cancellable after the free look period and the conditions
237 under which it may be canceled, including the procedures for
238 requesting any refund of the unearned purchase price paid by the
239 contract holder.
240 (f) In the event of cancellation, the method for
241 calculating any refund of the unearned purchase price of the
242 vehicle value protection agreement due.
243 (g) The extension of credit, the terms of the credit, and
244 the terms of the related motor vehicle sale or lease, may not be
245 conditioned upon the purchase of the vehicle value protection
246 agreement.
247 (2) Vehicle value protection agreements shall state the
248 terms, restrictions, and conditions governing cancellation of
249 the vehicle value protection agreement before the termination or
250 expiration date of the vehicle value protection agreement by
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251 either the provider or the contract holder. The provider of the
252 vehicle value protection agreement shall mail a written notice
253 to the contract holder at the last known address of the contract
254 holder contained in the records of the provider at least 5 days
255 before cancellation by the provider. Prior notice is not
256 required if the reason for cancellation is nonpayment of the
257 provider fee, a material misrepresentation by the con tract
258 holder to the provider or administrator, or a substantial breach
259 of duties by the contract holder relating to the covered product
260 or its use. The notice shall state the effective date of the
261 cancellation and the reason for the cancellation. If a vehicle
262 value protection agreement is canceled by the provider for a
263 reason other than nonpayment of the provider fee, the provider
264 shall refund to the contract holder 100 percent of the unearned
265 pro rata provider fee paid by the contract holder, if any. If
266 coverage under the vehicle value protection agreement continues
267 after a claim, then any refund may deduct claims paid. A
268 reasonable administrative fee, not to exceed $75, may be charged
269 by the provider.
270 520.1505 Commercial transactions exempt.—Sections 520.1504
271 and 520.1606 do not apply to vehicle value protection agreements
272 offered in connection with a commercial transaction.
273 520.1506 Penalties.—Any provider, administrator, or any
274 other person who willfully and intentionally violates any
275 provision of this part commits a noncriminal violation, as
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276 defined in s. 775.08(3), punishable by a fine not to exceed $500
277 per violation and no more than $10,000 in the aggregate for all
278 violations of similar nature. For purposes of this section,
279 violations are of a similar nature if each violation consists of
280 the same or similar course of conduct, action, or practice,
281 irrespective of the number of times the conduct, action, or
282 practice, which is determined to be a violation of this part
283 occurred.
284 Section 5. Section 521.003, Florida Statutes, is amended
285 to read:
286 521.003 Definitions.—As used in this chapter ss. 521.001-
287 521.006, the term:
288 (1) "Adjusted or net capitalized cost" means the
289 capitalized cost, less any capitalized cost-reduction payments
290 made by the retail lessee at the inception of the lease
291 agreement. The adjusted or net capitalized cost shall serve as
292 the basis for calculating the amount of the retail lessee's
293 periodic payment under the lease agreement.
294 (2) "Capitalized cost" means the agreed-upon total amount
295 which, after deducting any capitalized cost reductions, serves
296 as the basis for calculating the amount of the periodic payment
297 under the lease agreement. The capitalized cost may include,
298 without limitation:
299 (a) Taxes.
300 (b) Registration fees.
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301 (c) License fees.
302 (d) Insurance charges.
303 (e) Charges for guaranteed auto protection or GAP
304 coverage.
305 (f) Charges for service contracts and extended warranties.
306 (g) Fees and charges for accessories and for installing
307 accessories.
308 (h) Charges for delivery, service, and repair.
309 (i) Administrative fees, acquisition fees, and any and all
310 fees or charges for providing services incidental to the lease
311 agreement.
312 (j) The unpaid balance of any amount financed under an
313 outstanding motor vehicle loan agreement or motor vehicle retail
314 installment contract with respect to a motor vehicle used as a
315 trade-in.
316 (k) The unpaid portion of the early termination obligation
317 under an outstanding lease agreement.
318 (l) The first periodic payment due at the inceptio n of the
319 lease agreement.
320 (3) "Capitalized cost reduction" means a payment made by
321 cash, check, credit card debit, net vehicle trade-in, rebate, or
322 other similar means in the nature of a down payment or credit,
323 made by the retail lessee at the inception of the lease
324 agreement, for the purpose of reducing the capitalized cost and
325 shall not include any periodic payments received by the retail
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326 lessor at the inception of the lease agreement.
327 (4) "Excess wear and use waiver" means a contractual
328 agreement wherein a lessor agrees, with or without a separate
329 charge, to cancel or waive all or part of amounts that may
330 become due under a lease agreement as a result of excessive wear
331 and use of a motor vehicle, which agreement must be part of, or
332 a separate addendum to, the lease agreement. Such waivers may
333 also cancel or waive amounts due for excess mileage.
334 (5)(4) "Lease agreement" means a written agreement entered
335 into in this state for the transfer from a retail lessor to a
336 retail lessee of the right to possess and use a motor vehicle in
337 exchange for consideration for a scheduled term exceeding 4
338 months, whether or not the retail lessee has the option to
339 purchase or otherwise become the owner of the motor vehicle upon
340 expiration of the agreement. The term does not include an
341 agreement which covers an absolute sale, a sale pending
342 approval, or a retail installment sale, including a transaction
343 or contract which is governed by the Motor Vehicle Retail Sales
344 Finance Act of Florida.
345 (6)(5) "Lease transaction" means a presentation made to
346 the retail lessee concerning the motor vehicle, including a
347 sales presentation or a document presented to the retail lessee,
348 resulting in the execution of a lease agreement.
349 (7)(6) "Motor vehicle" means a motor vehicle of the type
350 and kind required to be registered and titled under chapters 319
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351 and 320, excluding a recreational vehicle, moped, motorcycle
352 powered by a motor with a displacement of 50 cubic centimeters
353 or less, or a mobile home.
354 (8)(7) "Retail lessee" means an individual who executes a
355 lease agreement for a motor vehicle from a retail lessor
356 primarily for personal, family, or household purposes.
357 (9)(8) "Retail lessor" means a person who regularly
358 engages in the business of selling or leasing motor vehicles and
359 who offers or arranges a lease agreement for a motor vehicle.
360 The term includes an agent or affiliate who acts on behalf of
361 the retail lessor and excludes any assignee of the lease
362 agreement.
363 Section 6. Section 521.007, Florida Statutes, is created
364 to read:
365 521.007 Extended wear and use waiver.—
366 (1) A retail lessee may contract with a retail lessor for
367 an excess wear and use waiver in connection with a lease
368 agreement.
369 (2) The terms of the related motor vehicle lease may not
370 be conditioned upon the consumer's payment for any extended wear
371 and use waiver. However, extended wear and use waivers may be
372 discounted or given at no charge in connection with the purchase
373 of other noncredit related goods.
374 (3) A lease agreement that includes an excess wear and use
375 waiver must disclose:
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376 (a) The total charge for the excess wear and use waiver.
377 (b) Any exclusions or limitations on the amount of excess
378 wear and use that may be waived under the excess wear and use
379 waiver.
380 (c) The terms, restrictions, and conditions governing
381 cancellation of the excess wear and use waiver before the
382 termination or expiration excess wear and use waiver, which may
383 include an administrative fee not to exceed $75.
384 (4) Such a product is not insurance for purposes of the
385 Florida Insurance Code.
386 Section 7. Subsection (1) of section 24.118, Florida
387 Statutes, is amended to read:
388 24.118 Other prohibited acts; penalties.—
389 (1) UNLAWFUL EXTENSIONS OF CREDIT.—Any retailer who
390 extends credit or lends money to a person for the purchase of a
391 lottery ticket commits is guilty of a misdemeanor of the second
392 degree, punishable as provided in s. 775.082 or s. 775.083. This
393 subsection does shall not be construed to prohibit the purchase
394 of a lottery ticket through the use of a credit or charge card
395 or other instrument issued by a bank, savings association,
396 credit union, or charge card company or by a retailer pursuant
397 to part IV part III of chapter 520, provided that any such
398 purchase from a retailer shall be in addition to the purchase of
399 goods and services other than lottery tickets having a cost of
400 no less than $20.
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401 Section 8. Subsection (13) of section 501.604, Florida
402 Statutes, is amended to read:
403 501.604 Exemptions.—The provisions of this part, except
404 ss. 501.608 and 501.616(6) and (7), do not apply to:
405 (13) A commercial telephone seller licensed pursuant to
406 chapter 516 or part IV part III of chapter 520. For purposes of
407 this exemption, the seller must solicit to sell a consumer good
408 or service within the scope of his or her license and the
409 completed transaction must be subject to the provisions of
410 chapter 516 or part IV part III of chapter 520.
411 Section 9. Paragraph (d) of subsection (2) of section
412 671.304, Florida Statutes, is amended to read:
413 671.304 Laws not repealed; precedence where code
414 provisions in conflict with other laws; certain statutory
415 remedies retained.—
416 (2) The following laws and parts of laws are specifically
417 not repealed and shall take precedence over any provisions of
418 this code which may be inconsistent or in conflict therewith:
419 (d) Chapter 520—Retail installment sales (Part I, Motor
420 Vehicle Sales Finance Act; Part IV Part III, Retail Installment
421 Sales Act; Part V Part IV, Installment Sales Finance Act).
422 Section 10. This act shall take effect October 1, 2024.
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HB 605 by Rep. Tramont
Asset Protection Products
AMENDMENT SUMMARY
January 18, 2024
Amendment 1 by Rep. Tramont (Line 48): The amendment makes technical changes,
including consolidating the bill’s provisions into a single Part of the current Chapter 520, rather
than creating a new part of the chapter and an additional chapter of Florida Statute.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 605 (2024)
Amendment No.1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Insurance & Banking
2 Subcommittee
3 Representative Tramont offered the following:
4
5 Amendment (with title amendment)
6 Remove lines 48-421 and insert:
7 asset protection products issued before October 1, 2008.
8 Section 2. Paragraph (g) of subsection (11) of section
9 520.07, Florida Statutes, is amended, and paragraphs (h) and (i)
10 are added to that subsection, to read:
11 520.07 Requirements and prohibitions as to retail
12 installment contracts.—
13 (11) In conjunction with entering into any new retail
14 installment contract or contract for a loan, a motor vehicle
15 retail installment seller as defined in s. 520.02, a sales
16 finance company as defined in s. 520.02, or a retail lessor as
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Amendment No.1
17 defined in s. 521.003, and any assignee of such an entity, may
18 offer, for a fee or otherwise, optional guaranteed asset
19 protection products in accordance with this chapter. The motor
20 vehicle retail installment seller, sales finance company, retail
21 lessor, or assignee may not require the purchase of a guaranteed
22 asset protection product as a condition for making the loan. In
23 order to offer any guaranteed asset protection product, a motor
24 vehicle retail installment seller, sales finance company, or
25 retail lessor, and any assignee of such an entity, shall comply
26 with the following:
27 (g) If a contract for a guaranteed asset protection
28 product is terminated, the entity shall refund to the buyer any
29 unearned fees paid for the contract unless the contract provides
30 otherwise. A refund is not due to a consumer who receives a
31 benefit under such product. In order to receive a refund, the
32 buyer must notify the entity of the event terminating the
33 contract and request a refund within 90 days after the
34 occurrence of the event terminating the contract. An entity may
35 offer a buyer a contract that does not provide for a refund only
36 if the entity also offers that buyer a bona fide option to
37 purchase a comparable contract that provides for a refund. An
38 entity may not deduct more than $75 in administrative fees from
39 a refund made under this subsection.
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Amendment No.1
40 (h) Guaranteed asset protection products may be cancelable
41 or noncancelable after a free-look period as defined in s.
42 520.152.
43 (i) If the termination of the guaranteed asset protection
44 product occurs because of a default under the retail installment
45 contract or contract for a loan, the repossession of the motor
46 vehicle associated with the retail installment contract or
47 contract for a loan, or any other termination of the retail
48 installment contract or contract for a loan, the entity may pay
49 any refund due directly to the holder or administrator and apply
50 the refund as a reduction of the amount owed under the retail
51 installment contract or contract for a loan, unless the buyer
52 can show that the retail installment contract has been paid in
53 full.
54 Section 3. Section 520.151, Florida Statutes, is created
55 to read:
56 520.151 Florida Vehicle Value Protection Agreements Act.—
57 Sections 520.151-520.156 may be cited as the "Florida Vehicle
58 Value Protection Agreements Act."
59 Section 4. Section 520.152, Florida Statutes, is created
60 to read:
61 520.152 Definitions.—As used in ss. 520.151-520.156,
62 unless the context or subject matter otherwise requires, the
63 term:
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Amendment No.1
64 (1) "Administrator" means the person who is responsible
65 for the administrative or operational function of managing
66 vehicle value protection agreements, including, but not limited
67 to, the adjudication of claims or benefit requests by contract
68 holders.
69 (2) "Commercial transaction" means a transaction in which
70 the motor vehicle subject to the transaction is used primarily
71 for business or commercial purposes.
72 (3) "Contract holder" means a person who is the purchaser
73 or holder of a vehicle value protection agreement.
74 (4) "Finance agreement" means a loan, retail installment
75 sales contract, or lease for the purchase, refinancing, or lease
76 of a motor vehicle.
77 (5) "Free-look period" means the period of time,
78 commencing on the effective date of the contract, during which
79 the buyer may cancel the contract for a full refund of the
80 purchase price. This period may not be shorter than 30 days.
81 (6) "Motor vehicle" has the same meaning as provided in s.
82 520.02.
83 (7) "Provider" means a person that is obligated to provide
84 a benefit under a vehicle value protection agreement. A provider
85 may function as an administrator or retain the services of a
86 third-party administrator.
87 (8) "Vehicle value protection agreement" includes a
88 contractual agreement that provides a benefit toward either the
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Amendment No.1
89 reduction of some or all of the contract holder's current
90 finance agreement deficiency balance or the purchase or lease of
91 a replacement motor vehicle or motor vehicle services upon the
92 occurrence of an adverse event to the motor vehicle, including,
93 but not limited to, loss, theft, damage, obsolescence,
94 diminished value, or depreciation. The term does not include
95 guaranteed asset protection products as defined in s. 520.02.
96 Such a product is not insurance for purposes of the Florida
97 Insurance Code.
98 Section 5. Section 520.153, Florida Statutes, is created
99 to read:
100 520.153 Requirements and prohibitions as to vehicle value
101 protection agreements.—
102 (1) Vehicle value protection agreements may be offered,
103 sold, or given to consumers in this state in compliance with
104 this act.
105 (2) Notwithstanding any other law, any amount charged or
106 financed for a vehicle value protection agreement is not
107 considered a finance charge or interest and must be separately
108 stated in the finance agreement and in the vehicle value
109 protection agreement.
110 (3) The extension of credit, the terms of credit, or the
111 terms of the related motor vehicle sale or lease may not be
112 conditioned upon the consumer's payment for or financing of any
113 charge for a vehicle value protection agreement. However, a
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Amendment No.1
114 vehicle value protection agreement may be discounted or given at
115 no charge in connection with the purchase of other noncredit -
116 related goods or services.
117 (4) A provider may use an administrator or other designee
118 to administer a vehicle value protection agreement.
119 (5) A vehicle value protection agreement may not be sold
120 or given to any person unless he or she has been or will be
121 provided access to a copy of such vehicle value protection
122 agreement at a reasonable time after such vehicle value
123 protection agreement is sold or given.
124 (6) A vehicle value protection agreement may not be sold
125 or given if coverage is duplicative of another vehicle value
126 protection agreement sold or given to a person or duplicative of
127 a guaranteed asset protection product.
128 (7) Each provider shall do one of the following:
129 (a) Insure all of its vehicle value protection agreements
130 under a policy that pays or reimburses the contract holder in
131 the event the provider fails to perform its obligations under
132 the vehicle value protection agreement. The insurer must be
133 licensed or otherwise authorized or eligible to do business in
134 this state.
135 (b) Maintain a funded reserve account for its obligations
136 under its contracts issued and outstanding in this state. The
137 reserves may not be less than 40 percent of gross consideration
138 received, less claims paid, on the sale of the vehicle value
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Amendment No.1
139 protection agreement for all in-force contracts in this state.
140 The reserve must be placed in trust with the office and have a
141 financial security deposit valued at not less than 5 percent of
142 the gross consideration received, less claims paid, on the sale
143 of the vehicle value protection agreements for all vehicle value
144 protection agreements issued and in force in this s tate, but at
145 least $25,000. The reserve account must consist of one of the
146 following:
147 1. A surety bond issued by an authorized surety.
148 2. Securities of the type eligible for deposit by insurers
149 as provided in s. 625.52.
150 3. Cash.
151 4. A letter of credit issued by a qualified financial
152 institution.
153 (c) Maintain, or together with its parent corporation
154 maintain, a net worth or stockholders' equity of $100 million
155 and, upon request, provide the office with a copy of the
156 provider's or the provider's parent company's Form 10-K or Form
157 20-F filed with the Securities and Exchange Commission within
158 the last calendar year, or if the company does not file with the
159 Securities and Exchange Commission, a copy of the company's
160 audited financial statements, which must show a net worth of the
161 provider or its parent company of at least $100 million. If the
162 provider's parent company's Form 10-K, Form 20-F, or financial
163 statements are filed to meet the provider's financial security
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Amendment No.1
164 requirement, the parent company must agree to guarantee the
165 obligations of the provider relating to vehicle value protection
166 agreements sold by the provider in this state.
167 (8) A financial security requirement other than those
168 imposed in subsection (7) may not be imposed on vehicle value
169 protection agreement providers.
170 Section 6. Section 520.154, Florida Statutes, is created
171 to read:
172 520.154 Disclosures.—
173 (1) A vehicle value protection agreement must disclose in
174 writing, in clear, understandable language, all of the
175 following:
176 (a) The name and address of the provider, contract holder,
177 and administrator, if any.
178 (b) The terms of the vehicle value protection agreement,
179 including, but not limited to, the purchase price to be paid by
180 the contract holder, if any, the requirements for eligib ility
181 and conditions of coverage, and any exclusions.
182 (c) Whether the vehicle value protection agreement may be
183 canceled by the contract holder during a free-look period as
184 defined in s. 520.152, and that, in the event of cancellation,
185 the contract holder is entitled to a full refund of the purchase
186 price, if any, so long as no benefits have been provided.
187 (d) The procedure the contract holder must follow, if any,
188 to obtain a benefit under the terms and conditions of the
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 605 (2024)
Amendment No.1
189 vehicle value protection agreement, including, if applicable, a
190 telephone number, website, or mailing address where the contract
191 holder may apply for a benefit.
192 (e) Whether the vehicle value protection agreement is
193 cancelable after the free-look period and the conditions under
194 which it may be canceled, including the procedures for
195 requesting any refund of the unearned purchase price paid by the
196 contract holder. In the event that the agreement is cancelable,
197 it must include the methodology for calculating any refund due
198 of the unearned purchase price of the vehicle value protection
199 agreement.
200 (f) That the extension of credit, the terms of the credit,
201 or the terms of the related motor vehicle sale or lease may not
202 be conditioned upon the purchase of the vehicle value protection
203 agreement.
204 (2) A vehicle value protection agreement must state the
205 terms, restrictions, or conditions governing cancellation of the
206 vehicle value protection agreement before the termination or
207 expiration date of the vehicle value protection agreement by
208 either the provider or the contract holder. The provider of the
209 vehicle value protection agreement shall mail a written notice
210 to the contract holder at the last known address of the contract
211 holder contained in the records of the provider at least 5 days
212 before cancellation by the provider, which notice must state the
213 effective date of the cancellation and the reason for the
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 605 (2024)
Amendment No.1
214 cancellation. However, such prior notice is not required if the
215 reason for cancellation is nonpayment of the provider fee, a
216 material misrepresentation by the contract holder to the
217 provider or administrator, or a substantial breach of duties by
218 the contract holder relating to the covered motor vehicle or its
219 use. If a vehicle value protection agreement is canceled by the
220 provider for a reason other than nonpayment of the provider fee,
221 the provider must refund to the contract holder 100 percent of
222 the unearned pro rata provider fee paid by the contract holder,
223 if any. If coverage under the vehicle value protection agreement
224 continues after a claim, any refund may reflect a deduction for
225 claims paid and, at the discretion of the provider, an
226 administrative fee of not more than $75.
227 Section 7. Section 520.155, Florida Statutes, is created
228 to read:
229 520.155 Commercial transactions exempt.—Sections 520.154
230 and 520.156 do not apply to vehicle value protection agreements
231 offered in connection with a commercial transaction.
232 Section 8. Section 520.156, Florida Statutes, is created
233 to read:
234 520.156 Penalties.—A provider, an administrator, or any
235 other person who willfully and intentionally violates ss.
236 520.151-520.155 commits a noncriminal violation as defined in s.
237 775.08(3), punishable by a fine not to exceed $500 per violation
238 and not more than $10,000 in the aggregate for all violations of
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 605 (2024)
Amendment No.1
239 a similar nature. For purposes of this section, the term
240 "violations of a similar nature" means violations that consist
241 of the same or similar course of conduct, action, or practice,
242 irrespective of the number of times the action, conduct, or
243 practice determined to be a violation of ss. 520.151-520.155
244 occurred.
245 Section 9. Section 520.157, Florida Statutes, is created
246 to read:
247 520.157 Excess wear and use waiver.—
248 (1) For purposes of this section, the term "excess wear
249 and use waiver" means a contractual agreement wherein a lessor
250 agrees, regardless of whether subject to a separate fee, to
251 cancel or waive all or part of amounts that may become due under
252 a lease agreement as a result of excess wear and use of a motor
253 vehicle, which agreement must be part of, or a separate addendum
254 to, the lease agreement. Such waivers may also cancel or waive
255 amounts due for excess mileage.
256
257
258 -----------------------------------------------------
259 T I T L E A M E N D M E N T
260 Remove lines 5-27 and insert:
261 520.07, F.S.; prohibiting certain entities from deducting more
262 than a specified amount in administrative fees when providing a
263 refund of a guaranteed asset protection product; authorizing
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 605 (2024)
Amendment No.1
264 guaranteed asset protection products to be cancelable or
265 noncancelable under certain circumstances; authorizing certain
266 entities to pay refunds directly to the holder or administrator
267 of a loan under certain circumstances; creating s. 520.151,
268 F.S.; providing a short title; creating s. 520.152, F.S.;
269 defining terms; creating s. 520.153, F.S.; authorizing the
270 offer, sale, or gift of vehicle value protection agreements in
271 compliance with a certain act; specifying a requirement
272 regarding the amount charged or financed for a vehicle value
273 protection agreement; prohibiting the conditioning of credit
274 offers or terms for the sale or lease of a motor vehicle upon a
275 consumer's payment for or financing of any charge for a vehicle
276 value protection agreement; authorizing discounting or giving
277 the vehicle value protection agreement at no charge under
278 certain circumstances; authorizing providers to use an
279 administrator or other designee for administration of vehicle
280 value protection agreements; prohibiting vehicle value
281 protection agreements from being sold under certain
282 circumstances; specifying financial security requirements for
283 providers; prohibiting additional financial security
284 requirements from being imposed on providers; creating s.
285 520.154, F.S.; requiring vehicle value protection agreements to
286 include certain disclosures in writing, in clear and
287 understandable language; requiring vehicle value protection
288 agreements to state the terms, restrictions, or conditions
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 605 (2024)
Amendment No.1
289 governing cancellation by the provider or the contract holder;
290 specifying requirements for notice by the provider, ref und of
291 fees, and deduction of fees in the event the vehicle value
292 protection agreement is canceled; creating s. 520.155, F.S.;
293 providing an exemption for vehicle value protection agreements
294 in connection with a commercial transaction; creating s.
295 520.156, F.S.; providing noncriminal penalties; defining the
296 term "violations of a similar nature"; creating s. 520.157,
297 F.S.; defining the term "excess wear and use waiver";
298 authorizing a retail lessee to contract with a retail lessor for
299 an excess wear and use waiver; prohibiting conditioning the
300 terms of the consumer's motor vehicle lease on his or her
301 payment for any excess wear and use waiver; authorizing
302 discounting or giving the excess wear and use waiver at no
303 charge under certain circumstances; requiring certain
304 disclosures for a lease agreement that includes an excess wear
305 and use waiver; providing construction; providing an effective
306 date.
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HB 625
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 625 Property Insurance Coverage
SPONSOR(S): Buchanan
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee Fortenberry Lloyd
2) Commerce Committee
SUMMARY ANALYSIS
Citizens Property Insurance Corporation (Citizens): Citizens is Florida’s property insurer of last resort.
Citizens currently writes multiperil and wind-only policies within its three accounts, subject to applicants
meeting eligibility criteria. However, Citizens is prohibited from issuing wind-only policies to commercial lines
residential condominiums when 50 percent or more of the units in the condominium are rented more than eight
times per calendar year for less than 30 days in each rental period (short-term rentals).
The bill eliminates the prohibition on Citizens’ eligibility for condominiums that are currently ineligible for wind-
only coverage due to short-term rental status. These condominiums become eligible for wind-only coverage
from Citizens at its current rate for commercial residential condominiums.
Roof Inspections: Insurers may not refuse to issue or refuse to renew a homeowners’ policy insuring a
residential structure with a roof that is less than 15 years old solely because of the age of the roof. For a roof
that is at least 15 years old, an insurer must allow a homeowner to have a roof inspection performed by an
authorized inspector at the homeowners’ expense before requiring a homeowner to replace a roof as a
condition of issuing or renewing a homeowners’ insurance policy. Additionally, if an inspection of the roof
performed by an authorized inspector shows that the roof has at least 5 years of useful life remaining, the
insurer may not refuse to issue or renew a homeowners’ policy solely because of roof age. Current law does
not require that authorized inspectors use a particular form to complete the roof inspection.
The bill requires that authorized inspectors conducting roof inspections to determine the remaining useful life
on a residential roof use a specific form. An authorized inspector may also provide an appendix to this form
which includes pictures or other documentation to demonstrate the remaining useful life of the roof.
Loss Assessment Coverage: Loss assessment coverage is insurance coverage for condominium unit
owners that provides protection for situations where the owner of a condominium unit, as the owner of shared
property, is held financially responsible for certain occurrences. Florida law requires that property insurance
policies held by condominium unit owners include a minimum property loss assessment coverage of $2,000 for
all assessments made because of the same direct loss to the condominium property.
The bill provides that property insurance policies issued to residential condominium unit owners on or after July
1, 2024, must contain at least $5,000 in property loss assessment coverage.
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.
The bill is effective on July 1, 2024.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h0625.IBS
DATE: 1/16/2024
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Citizens Property Insurance Corporation (Citizens)
Background
Citizens Property Insurance Corporation (Citizens) is a state-created, not-for-profit, tax-exempt
governmental entity whose public purpose is to provide property insurance coverage to those unable to
find affordable coverage in the voluntary admitted market.1 Citizens is not a private insurance
company.2 It is commonly known as Florida’s insurer of last-resort since eligibility is partly determined
on the risk not being able to be placed in the voluntary, admitted market at an affordable rate. Citizens
offers property insurance through three different accounts: a personal lines account, a commercial lines
account, and a coastal account.
The policies that Citizens writes within these three accounts include the following:
Standard Personal Lines Policies – comprehensive multiperil policies providing full coverage of
residential property equivalent to the coverage provided in the private insurance market;
Basic Personal Lines Policies – similar to dwelling fire policies that provide coverage meeting
the requirements of the secondary mortgage market, but are more limited in coverage than
under a standard policy;
Commercial Lines Residential and Nonresidential Policies – generally similar to the basic perils
of full coverage obtainable for commercial residential structures and commercial nonresidential
structures in the private market;
Personal Lines and Commercial Lines Residential Property Insurance Policies – cover the peril
of wind only;
Commercial Lines Nonresidential Property Insurance Policies – cover the peril of wind only.3
Citizens’ eligibility criteria sometimes allow it to issue policies that cover wind losses only (wind-only
policies) when it is unable to issue a multiperil policy. However, under current law, Citizens is prohibited
from issuing wind-only policies to commercial lines residential condominiums when 50 percent or more
of the units in the condominium are rented more than eight times per calendar year for less than 30
days in each rental period.4 Condominium owners have complained that due to this prohibition they are
unable to obtain coverage from any insurers other than surplus lines insurers, which is typically more
expensive than coverage from admitted insurers or Citizens. 5
Effect of the Bill
The bill eliminates the prohibition on Citizens’ eligibility for condominiums that are currently ineligible for
wind-only coverage due to short-term rental status. These condominiums become eligible for wind-only
policies from Citizens at its current rate for commercial residential condominiums.
1 The term “admitted market” means insurance companies licensed to transact insurance in Florida.
2 S. 627.351(6)(a)1., F.S.
3 S. 627.351(6)(c)1., F.S.
4 These types of rentals are commonly referred to as short-term rentals.
5 See s. 626.913, F.S. Surplus lines rates must be noncompetitive with those of admitted insurers. S. 626.916, F.S.
STORAGE NAME: h0625.IBS PAGE: 2
DATE: 1/16/2024
Roof Inspections
Background
Homeowners increasingly complained about insurers’ refusal to write or renew their policies based
upon the age of the roofs on their homes, even when inspections showed that the roofs had useful life
remaining.6 Homeowners also indicated that insurers refused to issue or renew policies unless they
replaced roofs that are more than a certain number of years old. As a result, the Legislature
implemented statutory prohibitions on property insurers canceling or nonrenewing policies solely based
upon the age and condition of roofs.7
Insurers may not refuse to issue or refuse to renew a homeowners’ policy insuring a residential
structure with a roof that is less than 15 years old solely because of the age of the roof. 8 For a roof that
is at least 15 years old, an insurer must allow a homeowner to have a roof inspection performed by an
authorized inspector at the homeowners’ expense before requiring a homeowner to replace a roof as a
condition of issuing or renewing a homeowners’ insurance policy. 9 Additionally, if an inspection of the
roof performed by an authorized inspector shows that the roof has at least 5 years of useful life
remaining, the insurer may not refuse to issue or renew a homeowners’ policy solely because of roof
age.10 The age of the roof is determined using either:
The last date for which 100 percent of the roof’s surface was built or replaced in compliance
with the building code in effect at the time, or
The the initial date of a partial roof replacement when subsequent partial builds or replacements
were completed that resulted in 100 percent of the roof’s surface being built or replaced.11
At present, the law does not require that authorized inspectors use a particular form to complete the
roof inspection.
Effect of the Bill
The bill requires that authorized inspectors conducting roof inspections to determine the remaining
useful life on a residential roof use the roof inspection form titled Commercial Roof Condition Inspection
Form (CL-RCF-1 07 17).12 It also allows an authorized inspector to provide an appendix to this form
which includes pictures or other documentation to demonstrate the remaining useful life of the roof.
Loss Assessment Coverage
Background
Loss assessment coverage is insurance coverage for condominium unit owners that provides
protection for situations where the owner of a condominium unit, as the owner of shared property, is
held financially responsible for:
Deductibles owed when a claim is made under a condominium association’s property insurance
policy;
Damage that occurs to the condominium building or the common areas of a condominium
property; or
6 See e.g., Lawrence Mower, Progressive Stops Renewing Some Home Policies in Florida as Lawmakers Target Roof Claims , Tampa
Bay Times (Feb. 8, 2022), https://www.tampabay.com/news/florida-politics/2022/02/08/progressive-stops-renewing-some-home-
policies-in-florida-as-lawmakers-target-roof-claims/ (last visited Jan. 13, 2024).
7 Ch. 2022-268, Laws of Fla.
8 S. 627.7011(5), F.S.
9 Id.
10 Id.
11 Id.
12 This is a form issued, and used by, Citizens.
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Injuries that occur in the common areas of a condominium property. 13
Florida law requires that property insurance policies held by condominium unit owners include a
minimum property loss assessment coverage of $2,000 for all assessments made because of the same
direct loss to the condominium property.14 The law further establishes that the maximum amount of any
unit owner’s coverage that can be assessed for any loss is an amount equal to the unit owner’s loss
assessment coverage limit in effect one day before the date of an occurrence that gave rise to the
loss.15 This coverage is applicable to any loss assessment regardless of the date of assessment by a
condominium association.16
Effect of the Bill
The bill provides that property insurance policies issued to residential condominium unit owners on or
after July 1, 2024, must contain at least $5,000 in property loss assessment coverage.
B. SECTION DIRECTORY:
Section 1. Amends s. 627.351, F.S., relating to insurance risk apportionment plans.
Section 2. Amends s. 627.7011, F.S., relating to homeowners’ policies; offer of replacement cost
coverage and law and ordinance coverage.
Section 3. Amends s. 627.714, F.S., relating to residential condominium unit owner coverage; loss
assessment coverage required.
Section 4. Provides an effective date of July 1, 2024.
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:
13
The Balance, Loss Assessment Explained for Condo Insurance, https://www.thebalance.com/loss-assessment-explained-for-condo-
insurance-4060435 (last visited Jan. 13, 2024).
14 S. 627.714(1), F.S.
15 S. 627.714(2), F.S.
16 Id.
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DATE: 1/16/2024
The bill will have a positive direct economic impact on condominium owners. Current owners of
condominiums that are ineligible for coverage from Citizens because of short-term rentals, and are
likely obtaining more expensive insurance from the surplus lines market, will be able to obtain coverage
from Citizens. Additionally, condominium owners will receive the benefit of an increase in the loss
assessment coverage provided by their property insurance policies if their policies do not already
contain $5,000 in loss assessment coverage. However, this increase in coverage may result in an
indeterminate increase in premiums.
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:
Section 2 (Lines 160-178): This section of the bill requires the use of a commercial roof inspection
form for the inspection of the roof of a residential structure. If the section is intended to require the use
of a particular form for the inspection of a residential roof, the title of the form should be changed.
However, if the form title is correct and the section of the bill is meant to correct an issue with
commercial roof inspections, then the bill should be amended to put the form title in a statute
addressing commercial roof inspections. An amendment is suggested to correct this inconsistency.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 625 2024
1 A bill to be entitled
2 An act relating to property insurance coverage;
3 amending s. 627.351, F.S.; removing provisions
4 relating to ineligibility of commercial lines
5 residential condominiums for wind-only coverage by
6 Citizens Property Insurance Corporation under certain
7 circumstances; amending s. 627.7011, F.S.; requiring
8 authorized inspectors to use a specified inspection
9 form for roof inspections; authorizing such inspectors
10 to provide appendices to the inspection forms for a
11 specified purpose; amending s. 627.714, F.S.;
12 increasing property loss assessment coverages under
13 condominium unit owners' residential property
14 policies; providing an effective date.
15
16 Be It Enacted by the Legislature of the State of Florida:
17
18 Section 1. Paragraph (a) of subsection (6) of section
19 627.351, Florida Statutes, is amended to read:
20 627.351 Insurance risk apportionment plans.—
21 (6) CITIZENS PROPERTY INSURANCE CORPORATION.—
22 (a) The public purpose of this subsection is to ensure
23 that there is an orderly market for property insurance for
24 residents and businesses of this state.
25 1. The Legislature finds that private insurers are
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26 unwilling or unable to provide affordable property insurance
27 coverage in this state to the extent sought and needed. The
28 absence of affordable property insurance threatens the public
29 health, safety, and welfare and likewise threatens the economic
30 health of the state. The state therefore has a compelling pu blic
31 interest and a public purpose to assist in assuring that
32 property in the state is insured and that it is insured at
33 affordable rates so as to facilitate the remediation,
34 reconstruction, and replacement of damaged or destroyed property
35 in order to reduce or avoid the negative effects otherwise
36 resulting to the public health, safety, and welfare, to the
37 economy of the state, and to the revenues of the state and local
38 governments which are needed to provide for the public welfare.
39 It is necessary, therefore, to provide affordable property
40 insurance to applicants who are in good faith entitled to
41 procure insurance through the voluntary market but are unable to
42 do so. The Legislature intends, therefore, that affordable
43 property insurance be provided and that it continue to be
44 provided, as long as necessary, through Citizens Property
45 Insurance Corporation, a government entity that is an integral
46 part of the state, and that is not a private insurance company.
47 To that end, the corporation shall strive to increase the
48 availability of affordable property insurance in this state,
49 while achieving efficiencies and economies, and while providing
50 service to policyholders, applicants, and agents which is no
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51 less than the quality generally provided in the voluntary
52 market, for the achievement of the foregoing public purposes.
53 Because it is essential for this government entity to have the
54 maximum financial resources to pay claims following a
55 catastrophic hurricane, it is the intent of the Legislature that
56 the corporation continue to be an integral part of the state and
57 that the income of the corporation be exempt from federal income
58 taxation and that interest on the debt obligations issued by the
59 corporation be exempt from federal income taxation.
60 2. The Residential Property and Casualty Joint
61 Underwriting Association originally created by this statute
62 shall be known as the Citizens Property Insurance Corporation.
63 The corporation shall provide insurance for residential and
64 commercial property, for applicants who are entitle d, but, in
65 good faith, are unable to procure insurance through the
66 voluntary market. The corporation shall operate pursuant to a
67 plan of operation approved by order of the Financial Services
68 Commission. The plan is subject to continuous review by the
69 commission. The commission may, by order, withdraw approval of
70 all or part of a plan if the commission determines that
71 conditions have changed since approval was granted and that the
72 purposes of the plan require changes in the plan. For the
73 purposes of this subsection, residential coverage includes both
74 personal lines residential coverage, which consists of the type
75 of coverage provided by homeowner, mobile home owner, dwelling,
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76 tenant, condominium unit owner, and similar policies; and
77 commercial lines residential coverage, which consists of the
78 type of coverage provided by condominium association, apartment
79 building, and similar policies.
80 3. With respect to coverage for personal lines residential
81 structures:
82 a. Effective January 1, 2014, a structure that has a
83 dwelling replacement cost of $1 million or more, or a single
84 condominium unit that has a combined dwelling and contents
85 replacement cost of $1 million or more, is not eligible for
86 coverage by the corporation. Such dwellings insured by the
87 corporation on December 31, 2013, may continue to be covered by
88 the corporation until the end of the policy term. The office
89 shall approve the method used by the corporation for valuing the
90 dwelling replacement cost for the purposes of this subparagraph.
91 If a policyholder is insured by the corporation before being
92 determined to be ineligible pursuant to this subparagraph and
93 such policyholder files a lawsuit challenging the determination,
94 the policyholder may remain insured by the corporation until the
95 conclusion of the litigation.
96 b. Effective January 1, 2015, a structure that has a
97 dwelling replacement cost of $900,000 or more, or a single
98 condominium unit that has a combined dwelling and contents
99 replacement cost of $900,000 or more, is not eligible for
100 coverage by the corporation. Such dwellings insured by the
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101 corporation on December 31, 2014, may continue to be covered by
102 the corporation only until the end of the policy term.
103 c. Effective January 1, 2016, a structure that has a
104 dwelling replacement cost of $800,000 or more, or a single
105 condominium unit that has a combined dwelling and contents
106 replacement cost of $800,000 or more, is not eligible for
107 coverage by the corporation. Such dwellings insured by the
108 corporation on December 31, 2015, may continue to be covered by
109 the corporation until the end of the policy term.
110 d. Effective January 1, 2017, a structure that has a
111 dwelling replacement cost of $700,000 or more, or a single
112 condominium unit that has a combined dwelling and contents
113 replacement cost of $700,000 or more, is not eligible for
114 coverage by the corporation. Such dwellings insured by the
115 corporation on December 31, 2016, may continue to be covered by
116 the corporation until the end of the policy term.
117
118 The requirements of sub-subparagraphs b.-d. do not apply in
119 counties where the office determines there is not a reasonable
120 degree of competition. In such counties a personal lines
121 residential structure that has a dwelling replacement cost of
122 less than $1 million, or a single condominium unit that has a
123 combined dwelling and contents replacement cost of less than $1
124 million, is eligible for coverage by the corporation.
125 4. It is the intent of the Legislature that policyholders,
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126 applicants, and agents of the corporation receive service and
127 treatment of the highest possible level but never less than that
128 generally provided in the voluntary market. It is also intended
129 that the corporation be held to service standards no less than
130 those applied to insurers in the voluntary market by the office
131 with respect to responsiveness, timeliness, customer courtesy,
132 and overall dealings with policyholders, applicants, or agents
133 of the corporation.
134 5.a. Effective January 1, 2009, a personal lines
135 residential structure that is located in the "wind-borne debris
136 region," as defined in s. 1609.2, International Building Code
137 (2006), and that has an insured value on the structure of
138 $750,000 or more is not eligible for coverage by the corporation
139 unless the structure has opening protections as required under
140 the Florida Building Code for a newly constructed residential
141 structure in that area. A residential structure is deemed to
142 comply with this sub-subparagraph if it has shutters or opening
143 protections on all openings and if such opening protections
144 complied with the Florida Building Code at the time they were
145 installed.
146 b. Any major structure, as defined in s. 161.54(6)(a),
147 that is newly constructed, or rebuilt, repaired, restored, or
148 remodeled to increase the total square footage of finished area
149 by more than 25 percent, pursuant to a permit applied for after
150 July 1, 2015, is not eligible for coverage by the corporation if
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151 the structure is seaward of the coastal construction control
152 line established pursuant to s. 161.053 or is within the Coastal
153 Barrier Resources System as designated by 16 U.S.C. ss. 3501 -
154 3510.
155 6. With respect to wind-only coverage for commercial lines
156 residential condominiums, effective July 1, 2014, a condominium
157 shall be deemed ineligible for coverage if 50 percent or more of
158 the units are rented more than eight times in a calendar year
159 for a rental agreement period of less than 30 days.
160 Section 2. Paragraph (c) of subsection (5) of section
161 627.7011, Florida Statutes, is amended to read:
162 627.7011 Homeowners' policies; offer of replacement cost
163 coverage and law and ordinance coverage.—
164 (5)
165 (c) For a roof that is at least 15 years old, an insurer
166 must allow a homeowner to have a roof inspection performed by an
167 authorized inspector at the homeowner's expense before requiring
168 the replacement of the roof of a residential structure as a
169 condition of issuing or renewing a homeowner's insurance policy.
170 The insurer may not refuse to issue or refuse to renew a
171 homeowner's insurance policy solely because of roof age if an
172 inspection of the roof of the residential structure performed by
173 an authorized inspector indicates that the roof has 5 years or
174 more of useful life remaining. An authorized inspector must use
175 the Commercial Roof Condition Inspection Form (CL-RCF-1 07 17).
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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 625 2024
176 An authorized inspector may provide an appendix to this form
177 which includes pictures or other documentation to demonstrate
178 the remaining useful life of the roof.
179 Section 3. Subsection (1) of section 627.714, Florida
180 Statutes, is amended to read:
181 627.714 Residential condominium unit owner coverage; loss
182 assessment coverage required.—
183 (1) For policies issued or renewed on or after July 1,
184 2024 2010, coverage under a unit owner's residential property
185 policy must include at least $5,000 $2,000 in property loss
186 assessment coverage for all assessments made as a result of the
187 same direct loss to the property, regardless of the number of
188 assessments, owned by all members of the association
189 collectively if such loss is of the type of loss covered by the
190 unit owner's residential property insurance policy, to which a
191 deductible of no more than $250 per direct property loss
192 applies. If a deductible was or will be applied to other
193 property loss sustained by the unit owner resulting from the
194 same direct loss to the property, no deductible applies to the
195 loss assessment coverage.
196 Section 4. This act shall take effect July 1, 2024.
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hb0625-00
INSURANCE & BANKING SUBCOMMITTEE
HB 625 by Rep. Buchanan
Property Insurance Coverage
AMENDMENT SUMMARY
January 18, 2023
Amendment 1 by Rep. Buchanan (Line 155): The amendment:
• Establishes that rates charged by Citizens Property Insurance Corporation (Citizens) for
wind-only policies issued to condominiums that are primarily used as short-term rentals are
not subject to the rate glide path generally applied to Citizens’ policies.
• Requires the use of specified roof condition inspection forms issued by Citizens and
approved by the Office of Insurance Regulation.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 625 (2024)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Insurance & Banking
2 Subcommittee
3 Representative Buchanan offered the following:
4
5 Amendment (with title amendment)
6 Remove lines 155-178 and insert:
7 6. Beginning with the implementation of the
8 corporation's next annual rate change on or after August 1,
9 2024, if the corporation writes a commercial lines residential
10 condominium wind-only policy for a condominium where 50 percent
11 or more of the units are rented more than eight times in a
12 calendar year for a rental agreement period of less than 30
13 days, the rate charged for such policy is not subject to the
14 provisions of subparagraph (n)5 With respect to wind-only
15 coverage for commercial lines residential condominiums,
16 effective July 1, 2014, a condominium shall be deemed ineligible
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Page 1 of 4
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 625 (2024)
Amendment No. 1
17 for coverage if 50 percent or more of the units are rented more
18 than eight times in a calendar year for a rental agreement
19 period of less than 30 days.
20 Section 2. Paragraph (c) of subsection (5) of section
21 627.7011, Florida Statutes, is amended to read:
22 627.7011 Homeowners' policies; offer of replacement cost
23 coverage and law and ordinance coverage.—
24 (5)
25 (c) For a roof that is at least 15 years old, an insurer
26 must allow a homeowner to have a roof inspection performed by an
27 authorized inspector at the homeowner's expense before requiring
28 the replacement of the roof of a residential structure as a
29 condition of issuing or renewing a homeowner's insu rance policy.
30 The insurer may not refuse to issue or refuse to renew a
31 homeowner's insurance policy solely because of roof age if an
32 inspection of the roof of the residential structure performed by
33 an authorized inspector indicates that the roof has 5 year s or
34 more of useful life remaining. An authorized inspector must use
35 the personal roof condition inspection form issued by Citizens
36 Property Insurance Corporation and approved by the office. An
37 authorized inspector may provide an appendix to this form which
38 includes pictures or other documentation to demonstrate the
39 remaining useful life of the roof.
40 Section 3. Section 627.7014, Florida Statutes, is created
41 to read:
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Page 2 of 4
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 625 (2024)
Amendment No. 1
42 627.7014 Commercial roof inspections.
43 (1) For the purposes of this section, the term "authorized
44 inspector" has the same meaning as s. 627.7011.
45 (2) An authorized inspector inspecting the roof of a
46 commercial structure must use the commercial roof condition
47 inspection form issued by Citizens Property Insurance
48 Corporation and approved by the office. An authorized inspector
49 may provide an appendix to this form which includes pictures or
50 other documentation to demonstrate the remaining useful life of
51 the roof.
52
53
54 -----------------------------------------------------
55 T I T L E A M E N D M E N T
56 Remove lines 3-11 and insert:
57 amending s. 627.351, F.S.; creating eligibility criteria for
58 commercial lines residential wind-only condominium coverage by
59 Citizens Property Insurance Corporation under certain
60 circumstances; amending s. 627.7011, F.S.; requiring authorized
61 inspectors to use a specified inspection form for roof
62 inspections; authorizing such inspectors to provide appendices
63 to the inspection forms for a specified purpose; creating s.
64 627.7014, F.S.; requiring authorized inspectors to use a
65 specified inspection form for roof inspections; authorizing such
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Page 3 of 4
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 625 (2024)
Amendment No. 1
66 inspectors to provide appendices to the inspection forms for a
67 specified purpose; amending s. 627.714, F.S.;
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Page 4 of 4
HB 637
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 637 Treatment by a Medical Specialist
SPONSOR(S): Yeager
TIED BILLS: IDEN./SIM. BILLS: SB 808
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee Herrera Lloyd
2) Appropriations Committee
3) Commerce Committee
SUMMARY ANALYSIS
Florida’s Workers’ Compensation Law (WC Law) requires employers to provide injured employees all
medically necessary remedial treatment, care, and attendance for such period as the nature of the injury or the
process of recovery may require. The Department of Financial Services, Division of Workers’ Compensation
(DFS), provides regulatory oversight of Florida’s workers’ compensation system, including the workers’
compensation health care delivery system. The law specifies certain reimbursement formulas and
methodologies to compensate workers’ compensation health care providers that provide medical services to
injured employees.
If a firefighter, law enforcement officer, correctional officer, or correctional probation officer becomes disabled
by tuberculosis, heart disease, or hypertension, Florida law presumes that the disease has been contracted in
the line of duty, subject to certain limitations, and is therefore compensable under workers compensation law,
unless the contrary can be shown by competent evidence.
To be eligible for this legal presumption, the officer or firefighter must have taken a pre-employment physical
exam that failed to reveal any evidence of tuberculosis, heart disease, or hypertension.
The bill permits firefighters, law enforcement officer, correctional officers, or correctional probation officer
requiring medical treatment for a compensable presumptive condition to seek treatment from a medical
specialist. The treatment provided by the medical specialist should be reasonable, necessary, and related to
tuberculosis, heart disease, or hypertension.
Also, the bill increases the maximum reimbursement for a medical specialist licensed under Chapter 458 or
Chapter 459, from 110% to 200% of the reimbursement allowed by Medicare.
The bill has no fiscal impact on state or local government revenues, an indeterminate negative impact of state
and local government expenditures, and an indeterminate positive economic impact on the private sector.
The bill has an effective date of October 1, 2024.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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DATE: 1/16/2024
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Qualifications for Employment as a Firefighter, Law Enforcement, Correctional, or Probation Officer
Florida law sets forth the minimum requirements for any person to be employed or appointed in a full-
or part-time capacity, or in an auxiliary capacity, as a law enforcement officer, correctional officer, or
correctional probation officer; or to be appointed as an auxiliary correctional officer by a private entity
contracting with the Department of Corrections.
To become a law enforcement, correctional, or correctional probation officer, an applicant must satisfy
age, education, and citizenship requirements; complete a training course; pass a certification exam;
pass a criminal background check; and pass a physical examination. 1
The physical examination requires screening for evidence of tuberculosis, heart disease, or
hypertension.2
In addition to law enforcement, correctional, and correctional probation officers, the presumption
applies to firefighters working for any unit of Florida government. 3
Workers’ Compensation Presumption
A legal presumption makes it easier for an employee to obtain workers’ compensation benefits by
shifting the burden of proof in a disability determination from the employee to the employer. 4
In general, occupational diseases are compensable if:
A condition peculiar to the occupation causes the disease;
The employee contracts the disease on the job;
The job is associated with a particular hazard of the disease;
The incidence of the disease is substantially higher in the occupation than in the public;
The nature of the employment was a major contributing cause of the disease; and
Epidemiological studies show that exposure to the specific substance involved, at the levels
to which the employee was exposed, may cause the precise disease sustained by the
employee.5
Florida law includes a presumption that treats tuberculosis, heart disease, or hypertension as an
occupational disease associated with firefighters, law enforcement officers, correctional officers, and
correctional probation officers. If these employees become temporarily or partially disabled by
tuberculosis, heart disease, or hypertension, the law presumes that the employee contracted the
disease in the line of duty unless the contrary can be shown by competent evidence. 6
1 S. 943.13, F.S.
2 S. 943.13(6), F.S.
3 Ss. 112.18(1)(a) and 175.231, F.S.
4 Caldwell v. Division of Retirement, Florida Dept. of Administration, 372 So. 2d 438, (Fla. 1979).
5 S. 440.151(2), F.S.
6 Ss. 112.18(1)(a) and 175.231, F.S.
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However, firefighters, law enforcement officers, correctional officers, and correctional probation officers
are entitled to the presumption only if the officer passed a pre-employment physical exam that failed to
reveal any evidence of tuberculosis, heart disease, or hypertension. 7
If the employee’s pre-employment physical failed to reveal any evidence of disease, the employee must
demonstrate the he or she suffers from tuberculosis, heart disease, or hypertension, but does not have
to present evidence of causation that is typically required to demonstrate that an occupational disease
is compensable.8
To overcome the statutory presumption, the employer must present clear and convincing evidence that
the disease was caused by a non-work-related event or exposure.9
Pre-Employment Physicals
To be employed as a law enforcement, correctional, or correctional probation officer, an applicant must
pass a physical exam.10 The law that establishes minimum employment standards states that such
officers are eligible for the presumption of s. 112.18, F.S., only if the physical exam fails to reveal any
evidence of tuberculosis, heart disease, or hypertension.11
To enroll in firefighting training courses and be certified as a firefighter, an applicant must be in good
physical condition, as determined by a doctor or nurse practitioner.12 The law does not mention specific
screening for tuberculosis, heart disease, or hypertension. The medical professional must certify that
the applicant is medically fit to engage in firefighting training and does not have any pre-existing or
current condition, illness, injury, or deficiency.13
Division of Workers’ Compensation
Florida’s Workers’ Compensation Law 14 requires employers to provide injured employees all medically
necessary remedial treatment, care, and attendance for such period as the nature of the injury or the
process of recovery may require.15 DFS provides regulatory oversight of Florida’s workers’
compensation system, including the workers’ compensation health care delivery system. The law
specifies certain reimbursement formulas and methodologies to compensate workers’ compensation
health care providers 16 that provide medical services to injured employees. Where a reimbursement
amount or methodology is not specifically included in statute, the Three-Member Panel is authorized to
annually adopt statewide schedules of maximum reimbursement allowances (MRAs) to provide uniform
fee schedules for the reimbursement of various medical services. 17 DFS incorporates the MRAs
approved by the Three-Member Panel in reimbursement manuals 18 through the rulemaking process
provided by the Administrative Procedures Act.19 In 2023, CS/CS/HB 487 eliminated the authority of the
Three-Member Panel to adopt MRA’s for individually licensed health care providers, work-hardening
programs, pain programs, and durable medical equipment providers. 20 Instead, it mandates DFS to
7 S. 112.18(1)(a), F.S.
8 McDonald v. City of Jack sonville, 286 So. 3d 792 (Fla. 1st DCA 2019), citing Walters v. State, DOC/Div. of Risk
Management, 100 So. 3d 1173 (Fla. 1st DCA 2019), rehearing denied, review denied 108 So. 3d 654 (The presumption is
an adequate substitute for evidence of occupational causation, and compels the legal result that a claimant has proven
occupational causation).
9 Butler v. City of Jack sonville, 980 So. 2d 1250 (Fla. 1st DCA 2008).
10 S. 943.13(6), F.S.
11 Id.
12 S. 633.412(5), F.S.
13 Rule 69A-37.037 and Form DFS-K3-1022.
14
Ch. 440, F.S.
15 S. 440.13(2)(a), F.S.
16 The term “health care provider” includes a physician or any recognized practitioner licensed to provide skilled services purs uant to a
prescription or under the supervision or direction of a physician. It also includes any hospital licensed under chapter 395 and any health
care institution licensed under chapter 400 or chapter 429. S. 440.13(1)(g), F.S.
17 S. 440.13(12), F.S.
18 Ss. 440.13(12) and (13), F.S., and Ch. 69L-7, F.A.C.
19 Ch. 120, F.S.
20 Ch. 2023-144, Laws of Fla.
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annually publish the maximum reimbursement allowance for physician and non-hospital
reimbursements on its website by July 1st , effective the following January 1st .21
Medical Services
DWC is responsible for ensuring that employers provide medically necessary treatment, care, and
attendance for injured workers. Healthcare providers must receive authorization from the insurer before
providing treatment and submit treatment reports to the insurer. Insurers must reimburse healthcare
providers based on statewide schedules of maximum reimbursement allowances developed by the
DWC or an agreed-upon contract price. DWC mediates utilization and reimbursement disputes. 22
Eligibility for the Workers’ Compensation Presumption
In a disputed workers’ compensation determination, the legal presumption does not apply if a law
enforcement, correctional, or correctional probation officer:
Departed from the course of treatment prescribed by his or her physician, resulting in a
significant aggravation of the disease or disability or need for medical treatment; or
Was previously compensated for the disabling disease and departed from the treatment
prescribed by his or her physician, resulting in disability or increasing the disability or need
for medical treatment.23
To be eligible for workers’ compensation benefits, a law enforcement officer, correctional officer, or
correctional probation officer must make a claim for benefits prior to or within 180 days of leaving the
employment or the employing agency.24
Firefighters are not subject to the exclusion for prior treatment or compensation and they are not
covered by the claim-fling deadline that lets a law enforcement officer, correctional officer or
correctional probation officer file a claim up to 180 days after leaving the employment.
Thus, a firefighter suffering from tuberculosis, heart disease, or hypertension must advise his or her
employer of the injury within 90 days of the initial manifestation of the disease or 90 days after the
firefighter obtains a medical opinion that the injury (occupational disease) is due to the nature of the
firefighter’s employment.25
Reimbursement for Healthcare Providers
A three-member panel (panel), consisting of the Chief Financial Officer (CFO) or their designee and
two Governor’s appointees, sets the MRAs. 26 Beginning with rates developed in 2024 and implemented
with rates effective January 1, 2025, health care providers and non-hospital rates are annually
published by DFS, instead of being included in the reimbursement manuals.27 DFS incorporates the
statewide schedules of the MRAs through rulemaking. In establishing the MRA manuals, the panel
considers the usual and customary levels of reimbursement for treatment, services, and care; 28 the cost
impact to employers for providing reimbursement that ensures that injured workers have access to
necessary medical care; and the financial impact of the MRAs on healthcare providers and facilities. 29
Florida law requires the panel to develop MRA manuals that are reasonable, promote the workers’
compensation system’s healthcare cost containment and efficiency, and are sufficient to ensure that
medically necessary treatment is available for injured workers. 30
21 Id.
22 S. 440.13, F.S.
23 S. 112.18(1)(b)(1),
F.S.
24 S. 112.18(1)(b)(4),
F.S.
25 S. 440.151(6) and 440.185(1), F.S.
26 Id.
27 Ch. 2023-144, Laws of Fla.
28 S. 440.13(12)(i)(1), F.S.
29 S. 440.13(12)(i)(2), F.S.
30 S. 440.13(12)(i)(3), F.S.
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There are three different reimbursement manuals that determine statewide schedules of maximum
reimbursement allowances. The healthcare provider manual, developed by the DWC, limits the
maximum reimbursement for licensed physicians to 110 percent of Medicare reimbursement, 31 while
reimbursement for surgical procedures is limited to 140 percent of Medicare. 32 The hospital manual,
developed by the panel, sets maximum reimbursement for outpatient scheduled surgeries at 60 percent
of usual and customary charges,33 while other outpatient services are limited to 75 percent of usual and
customary charges.34 Reimbursement of inpatient hospital care is limited based on a schedule of per
diem rates approved by the panel.35 The ambulatory surgical centers manual, developed by the panel,
limits reimbursement to 60 percent of usual and customary as such services are generally scheduled
outpatient surgeries. The prescription drug reimbursement manual limits reimbursement to the average
wholesale price plus a $4.18 dispensing fee. 36 Repackaged or relabeled prescription medication
dispensed by a dispensing practitioner has a maximum reimbursement of 112.5 percent of the average
wholesale price plus an $8.00 dispensing fee. 37 Fees may not exceed the schedules adopted under Ch.
440, F.S., and department rule.38
Effect of the Bill
The bill permits firefighters, law enforcement officer, correctional officers, or correctional probation
officer requiring medical treatment for a compensable presumptive condition to seek treatment from a
medical specialist.39 The treatment provided by the medical specialist should be reasonable,
necessary, and related to tuberculosis, heart disease, or hypertension.
Also, the bill increases the maximum reimbursement for a medical specialist licensed under Chapter
458 or Chapter 459, from 110 percent for non-surgeons and 145 percent for surgeons to 200 percent of
the reimbursement allowed by Medicare for both non-surgeons and surgeons.
This bill provides an effective date as of October 1, 2024.
B. SECTION DIRECTORY:
Section 1. Amends s. 112.18, F.S., relating to firefighters and law enforcement or correctional
officers; special provisions relative to disability.
Section 2. Providing an effective date of October 1, 2024.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
The state may experience increased expenses associated with specialist treatment of presumed
conditions under the bill due to the increased fee allowed.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
31
S. 440.13(12)(f), F.S.
32 S. 440.13(12)(g), F.S.
33 S. 440.13(12)(d), F.S.
34 S. 440.13(12)(a), F.S.
35
Id.
36 S. 440.13(12)(h), F.S.
37 Id.
38 S. 440.13(12)(f), F.S.
39 Please see section III. C., Drafting Comments.
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1. Revenues:
None.
2. Expenditures:
Local government may experience increased expenses associated with specialist treatment of
presumed conditions under the bill due to the increased fee allowed.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Specialist workers’ compensation medical providers may receive increased fees for treatment of
presumed conditions as provided for by the bill.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
The county/municipality mandates provision of Art. VII, section 18, of the Florida Constitution may
apply because this bill requires county/municipality governments that employ firefighters, law
enforcement officers, correctional officers, or correctional probation officers to fund additional
expenses related to those employees accessing specialist care for presumed conditions at a rate
higher than currently applicable workers’ compensation rates; however, an exception may apply. The
bill applies to all similarly situated persons, i.e., every county/municipality government that employs
such individuals, in addition to the state, which also employs such individuals.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
None provided by the bill.
C. DRAFTING ISSUES OR OTHER COMMENTS:
Firefighters, LEOs, correctional officers, and correctional probation officers are already entitled to
treatment by a medical specialist when medically necessary. It is unclear from the text of the bill what
change is intended. An amendment to clarify the intended effect may resolve this issue.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 637 2024
1 A bill to be entitled
2 An act relating to treatment by a medical specialist;
3 amending s. 112.18, F.S.; authorizing a firefighter,
4 law enforcement officer, correctional officer, and
5 correctional probation officer to receive medical
6 treatment by a medical specialist for certain
7 conditions under certain circumstances; requiring such
8 treatment to be reasonable, necessary, and related to
9 the firefighter's or officer's condition; specifyin g a
10 reimbursement percentage for such treatment; defining
11 the term "medical specialist"; providing an effective
12 date.
13
14 Be It Enacted by the Legislature of the State of Florida:
15
16 Section 1. Subsection (3) is added to section 112.18,
17 Florida Statutes, to read:
18 112.18 Firefighters and law enforcement or correctional
19 officers; special provisions relative to disability.—
20 (3)(a) A firefighter, law enforcement officer,
21 correctional officer, or correctional probation officer
22 requiring medical treatment for a compensable presumptive
23 condition listed in subsection (1) may be treated by a medical
24 specialist. Except in emergency situations, a firefighter, law
25 enforcement officer, correctional officer, or correctional
Page 1 of 2
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hb0637-00
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 637 2024
26 probation officer entitled to receive treatment by a medical
27 specialist under this subsection must provide notice of his or
28 her selection of a medical specialist to the firefighter's or
29 officer's workers compensation carrier, self-insured employer,
30 or third-party administrator before he or she begins treatment,
31 and the carrier, self-insured employer, or third-party
32 administrator must authorize and schedule the appointment and
33 treatment with the medical specialist. The treatment by a
34 medical specialist must be reasonable, necessary, and related to
35 tuberculosis, heart disease, or hypertension and reimbursed at
36 no more than 200 percent of the Medicare rate.
37 (b) For purposes of this subsection, the term "medical
38 specialist" means a physician licensed under chapter 458 or
39 chapter 459 who has board certification in a medical specialty
40 inclusive of care and treatment of tuberculosis, heart disease,
41 or hypertension.
42 Section 2. This act shall take effect October 1, 2024.
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hb0637-00
INSURANCE & BANKING SUBCOMMITTEE
HB 637 by Rep. Yeager
Treatment by a Medical Specialist
AMENDMENT SUMMARY
January 18, 2024
Amendment 1 by Rep. Yeager (Line 20): The amendment:
• Requires written notice of the medical specialist permitted by the bill.
• Allows the employer/carrier to authorize an alternative specialist with equal or greater
qualifications.
• Requires authorization of treatment within 5 business days of receiving the notice and
scheduling of an appointment within 30 days.
• Clarifies that the bill creates an exception applicable to the usual provider selection
process provided under the workers’ compensation law.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 637 (2024)
Amendment No.1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Insurance & Banking
2 Subcommittee
3 Representative Yeager offered the following:
4
5 Amendment
6 Remove lines 20-36 and insert:
7 (3)(a) Notwithstanding paragraph 440.13(2)(c), a firefighter,
8 law enforcement officer, correctional officer, or
9 correctional probation officer requiring medical treatment for a
10 compensable presumptive condition listed in subsection (1) may
11 be treated by a medical specialist. Except in emergency
12 situations, a firefighter, law enforcement officer, correctional
13 officer, or correctional probation officer entitled to access a
14 medical specialist under this subsection must provide written
15 notice of his or her selection of a medical specialist to the
16 firefighter's or officer's workers compensation carrier, self -
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Page 1 of 2
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 637 (2024)
Amendment No.1
17 insured employer, or third-party administrator, and the carrier,
18 self- insured employer, or third-party administrator must
19 authorize the selected specialist or authorize an alternative
20 specialist meeting the same or greater qualifications. The
21 carrier, self-insured employer or third-party must, within 5
22 business days of the receipt of the notice, authorize treatment
23 and schedule an appointment to be held within 30 da ys of the
24 receipt of the notice with the selected specialist or the
25 alternative specialist. If the carrier, self-insured employer or
26 third-party administrator fails to provide an alternative
27 specialist within the 5 business days of receipt of the notice,
28 the specialist selected by the employee shall be authorized. The
29 continuing care and treatment by a medical specialist must be
30 reasonable, necessary, and related to tuberculosis, heart
31 disease, or hypertension, be reimbursed at no more than 200
32 percent of the Medicare rate and be authorized by the
33 firefighter's or officer's workers compensation carrier, self -
34 insured employer, or third-party administrator.
35
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Page 2 of 2
HB 943
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 943 Pub. Rec./My Safe Florida Home Program
SPONSOR(S): LaMarca
TIED BILLS: IDEN./SIM. BILLS: SB 988
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee Fortenberry Lloyd
2) Ethics, Elections & Open Government
Subcommittee
3) Commerce Committee
SUMMARY ANALYSIS
In 2006, the Legislature created the My Safe Florida Home Program (MSFH Program) within the Department of
Financial Services (DFS), with the intent that the MSFH Program provide licensed inspectors to perform
inspections for owners of site-built, single-family, residential properties and grants to eligible applicants, subject
to the availability of funds.
Under the MSFH Program, licensed inspectors must provide home inspections of site-built, single-family,
residential properties for which a homestead exemption has been granted, to determine what mitigation
measures are needed, what insurance premium discounts may be available, and what improvements to
existing residential properties are needed to reduce the property’s vulnerability to hurricane damage. The
inspections provided to homeowners under the MSFH Program must include, at a minimum, certain
information. Further, the inspection reports provide detailed information to the MSFH Program regarding the
applicant’s home.
Similarly, financial grants under the MSFH Program are intended to encourage single-family, site-built, owner-
occupied, residential property owners to retrofit their properties to make them less vulnerable to hurricane
damage. For a homeowner to be eligible for a grant, the following criteria must be met:
The homeowner must have been granted a homestead exemption on the home;
The home must be a dwelling with an insured value of $700,000 or less;
The home must undergo an acceptable hurricane mitigation inspection under the MSFH Program;
The building permit application for initial construction of the home must have been made before
January 1, 2008; and
The homeowner must agree to make his or her home available for inspection once a mitigation project
is completed.
The bill creates a public records exemption for information contained in applications and inspection reports
submitted under the MSFH Program, regardless of the date that such applications and reports were submitted.
The bill provides for repeal of the exemption on October 2, 2029, unless reviewed and saved from repeal by
the Legislature. It also provides a public necessity statement as required by the Florida Constitution.
The bill may have an indeterminate negative fiscal impact on state government expenditures, no fiscal impact
on state government revenues, no fiscal impact on local government revenues or expenditures, and an
indeterminate positive fiscal impact on the private sector.
The bill provides an effective date of upon becoming a law.
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 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: h0943.IBS
DATE: 1/16/2024
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
My Safe Florida Home Program
In 2006, the Legislature created the My Safe Florida Home Program (MSFH Program) within the
Department of Financial Services (DFS), with the intent that the MSFH Program provide licensed
inspectors to perform inspections for owners of site-built, single-family, residential properties and grants
to eligible applicants, subject to the availability of funds.1 Under the MSFH Program, DFS must develop
and implement a comprehensive and coordinated approach for hurricane damage mitigation that may
include hurricane mitigation inspections,2 mitigation grants,3 and education, consumer awareness, and
outreach.4
HURRICANE MITIGATION INSPECTIONS
Under the MSFH Program, licensed inspectors must provide home inspections of site-built, single-
family, residential properties for which a homestead exemption has been granted, to determine:
What mitigation measures are needed,
What insurance premium discounts may be available, and
What improvements to existing residential properties are needed to reduce the property’s
vulnerability to hurricane damage.5
DFS must also contract with wind certification entities to provide hurricane mitigation inspections. To
qualify for selection by DFS as a wind certification entity to provide hurricane mitigation inspections, the
entity must meet certain requirements.6 The inspections provided to homeowners by such entities, at a
minimum, must include:
A home inspection and report that summarizes the results and identifies recommended
improvements a homeowner may take to mitigate hurricane damage;
A range of cost estimates regarding the recommended mitigation improvements; and
Information regarding estimated premium discounts, which are correlated to the current
mitigation features and the recommended mitigation improvements identified by the inspection. 7
The inspection report provides information to the MSFH Program regarding the applicant’s home, such
as detailed descriptions of the premises, pictures of the interior and exterior of the structure, including
private areas, entry points, and possible vulnerabilities to its security.
An application for an inspection must contain a signed or electronically verified statement, made under
penalty of perjury, that the applicant has submitted only a single application for that home. 8
MITIGATION GRANTS
Financial grants under the MSFH Program are intended to encourage single-family, site-built, owner-
occupied, residential property owners to retrofit their properties to make them less vulnerable to
hurricane damage.9
1 S. 215.5586, F.S.
2 See S. 215.5586(1), F.S.
3 See s. 215.5586(2), F.S.
4 See s. 215.5586(3), F.S.
5 S. 215.5586(2)(a), F.S.
6 See s. 215.5586(2)(c), F.S.
7 S. 215.5586(2)(b), F.S.
8 S. 215.5586(2)(d), F.S.
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For a homeowner to be eligible for a grant, the following criteria must be met:
The homeowner must have been granted a homestead exemption on the home under ch. 196,
F.S.;10
The home must be a dwelling with an insured value of $700,000 or less;11
The home must undergo an acceptable hurricane mitigation inspection under the MSFH
Program;
The building permit application for initial construction of the home must have been made before
January 1, 2008; and
The homeowner must agree to make his or her home available for inspection once a mitigation
project is completed.12
An application for a grant must contain a signed or electronically verified statement, made under
penalty of perjury, that the applicant has submitted only a single application.13 The application must
include attachments that demonstrate the applicant meets the requirements described above.14
Under the MSFH Program, DFS must develop a process that ensures the most efficient means to
collect and verify grant applications to determine eligibility and may direct hurricane mitigation
inspectors to collect and verify grant application information or use the internet or other electronic
means to collect information and determine eligibility.15
Effect of the Bill
The bill creates a public records exemption for information contained in applications and inspection
reports submitted under the MSFH Program, regardless of the date that such applications and reports
were submitted.
The exemptions are subject to the Open Government Sunset Review Act, and will be repealed on
October 2, 2029, unless reviewed and saved from repeal through reenactment by the Legislature. It
also provides a statement of public necessity as required by the Florida Constitution.
B. SECTION DIRECTORY:
Section 1. Creates s. 215.55861, F.S., relating to My Safe Florida Home Program public records
exemption.
Section 2. Provides a statement of public necessity.
Section 3. Provides that the bill will take effect upon becoming a law.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
9 S. 215.5586(3), F.S.
10 Chapter 196, F.S., relates to, among other things, homestead exemptions.
11 Homeowners who are low-income persons, as defined s. 420.0004(11), F.S., are exempt from this requirement. The
term “low-income persons” is defined by s. 420.0004(11), F.S., as one or more natural persons or a family, the total
annual adjusted gross household income of which does not exceed 80% of the median annual adjusted gross income for
households within the state, or 80% of the median annual adjusted gross income for households within the metropolitan
statistical area (MSA) or, if not within an MSA, within the county in which the person or family resides, whichever is
greater.
12 S. 215.5586(2)(a), F.S.
13 S. 215.5586(2), F.S.
14 Id.
15 S. 215.5586(2)(i), F.S.
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None.
2. Expenditures:
Indeterminate. See “Fiscal Comments” section below.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The proposed public record exemption may encourage the submission of applications and inspection
reports under the MSFH Program, in which case the bill would have a positive impact on communities
affected by natural disasters. However, the impact to the private sector is indeterminate.
D. FISCAL COMMENTS:
The bill may have a minimal negative fiscal impact on state agencies because agency staff responsible
for complying with public records requests may require training related to the creation of the public
record exemption. Agencies could incur costs associated with redacting the confidential and exempt
information prior to releasing a record. The costs, however, would be absorbed by existing resources,
as they are part of the day-to-day responsibilities of such agencies.
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:
Vote Requirement
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 exemption. The bill creates a
public record exemption; thus, it requires a two-thirds vote for final passage.
Public Necessity Statement
Article I, s. 24(c) of the Florida Constitution requires a public necessity statement for a newly
created or expanded public record exemption. The bill creates a public record exemption; therefore,
it includes a public necessity statement.
Breadth of Exemption
Article I, s. 24(c) of the Florida Constitution requires a newly created public record or public meeting
exemption to be no broader than necessary to accomplish the stated purpose of the law. This bill
creates a public record exemption for certain information received by DFS pursuant to an
application and inspection reports submitted to the MSFH Program. The purpose of the exemption
is to protect sensitive personal information, such as names, email addresses, mailing addresses,
and telephone numbers, that DFS receives in conjunction with its duties related to the review of
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such applications and inspection reports. As such, the bill appears to be no broader than necessary
to accomplish its purpose.
B. RULE-MAKING AUTHORITY:
The bill does not confer rulemaking authority nor require the promulgation of rules.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
HB 943 2024
1 A bill to be entitled
2 An act relating to public records; creating s.
3 215.55861, F.S.; exempting certain applications and
4 inspection reports submitted to the My Safe Florida
5 Home Program from public records requirements;
6 providing for future review and repeal; providing a
7 statement of public necessity; providing an effective
8 date.
9
10 Be It Enacted by the Legislature of the State of Florida:
11
12 Section 1. Section 215.55861, Florida Statutes, is created
13 to read:
14 215.55861 My Safe Florida Home Program public records
15 exemption.—Applications and inspection reports submitted by
16 applicants to the My Safe Florida Home Program under s.
17 215.5586, no matter the date of submission, are exempt from s.
18 119.07(1) and s. 24(a), Art. I of the State Constitution. This
19 section is subject to the Open Government Sunset Review Act in
20 accordance with s. 119.15 and is repealed on October 2, 2029,
21 unless reviewed and saved from repeal through reenactme nt by the
22 Legislature.
23 Section 2. The Legislature finds that it is a public
24 necessity that applications and inspection reports submitted to
25 the My Safe Florida Home Program be made exempt from s.
Page 1 of 2
CODING: Words stricken are deletions; words underlined are additions.
hb0943-00
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 943 2024
26 119.07(1) and s. 24(a), Art. I of the State Constitution . These
27 documents contain personal information, including but not
28 limited to names, e-mail addresses, mailing addresses, telephone
29 numbers. This information is unique to each individual and, when
30 combined with other personal identifying information, can be
31 used for identity theft, consumer scams, unwanted solicitations,
32 or other invasive contact. Additionally, applications and
33 inspection reports contain detailed descriptions and pictures of
34 the inside and outside of applicants' homes, including private
35 areas, points of entry, and other vulnerabilities. The public
36 availability of these records put applicants of the My Safe
37 Florida Home Program at increased risk of home invasions and
38 reduces privacy in their homes.
39 Section 3. This act shall take effect upon becoming a law.
Page 2 of 2
CODING: Words stricken are deletions; words underlined are additions.
hb0943-00
PCS for HB 311
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: PCS for HB 311 Securities
SPONSOR(S): Insurance & Banking Subcommittee
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
Orig. Comm.: Insurance & Banking Subcommittee Fletcher Lloyd
SUMMARY ANALYSIS
In Florida, the Securities and Investor Protection Act (the Act) regulates securities issued, offered, and sold in
the state of Florida. The Office of Financial Regulation (OFR) regulates and registers the offer and sale of
securities in, to, or from Florida by firms, branch offices, and individuals affiliated with these firms.
The Act currently prohibits dealers, associated persons, and issuers from offering or selling securities in this
state unless registered with the OFR or specifically exempted. Additionally, all securities in Florida must be
registered with the OFR unless they meet a statutory exemption or are federally covered (i.e., under the
exclusive jurisdiction of the United States Securities Exchange Commission).
Revisions to the Act include:
Amending the limited offering exemption and crowdfunding exemption;
Adding an accredited investor exemption and a micro-offering exemption;
Allowing for demo-day presentations in the pre-offering stage;
Adding control person liability provisions;
Expanding the current civil liability for aiders and abettors of a securities law violation;
Eliminating the requirement for 5 years of annual reports and audited financial statements applicable to
simplified securities offerings that use the Small Company Offering Registration;
Reducing the number of clients of an investment adviser that triggers registration from 15 to 6 clients;
Increasing the maximum civil and administrative penalties that can be assessed against a natural
person in an action by the Attorney General from $10,000 to $20,000;
Doubling maximum fines assessed in civil and administrative actions by the Attorney General for
securities violations targeting seniors and vulnerable adults;
Eliminating the requirement that an investor make searches and inquiries to ascertain the assets of a
judgement debtor before the investor recovers from the Securities Guaranty Fund (Fund), and changes
the requirement that the date of the act for which recovery is sought occurred on or after January 1,
1979, to October 1, 2024;
Increasing the amount an eligible person may recover from the Fund from $10,000 to $15,000, adding
an exception allowing recovery of up to $25,000 if the person is a specified adult, and increasing the
aggregate limit on claims from $100,000 to $250,000;
Rewriting certain portions of the Act for clarification purposes; and
Generally modernizing Florida’s securities laws in accordance with recent developments in federal
securities laws and securities laws in other states.
The bill has no impact on local government and an insignificant positive impact on the private sector. It has an
insignificant negative impact on state government expenses and an indeterminable positive impact on state
government revenues.
The bill provides an effective date of October 1, 2024.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: pcs0311.IBS
DATE: 1/16/2024
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
FLORIDA BAR BUSINESS LAW SECTION TASK FORCE
The Executive Council of the Business Law Section of The Florida Bar appointed a Task Force (BLS
Task Force) in September of 2022 to consider amendments to ch. 517, F.S., the Florida Securities and
Investor Protection Act (Act), which codifies Florida’s securities laws. 1 The BLS Task Force has worked
closely with the Office of Financial Regulation (OFR), the agency which regulates Florida’s securities
industry and determines compliance with the Act,2 to reform the Act.3
OFR, with the BLS Task Force’s assistance, presented to the 2023 legislative session proposed
amendments 4 to the Act that were limited to administrative and clarification changes, as OFR was
aware that the BLS Task Force was working on more substantive changes to the Act. 5 The 2023 bill
was enacted,6 and the BLS Task Force and OFR are now presenting their recommendations for
substantive amendments to the Act with this bill.7 In summary, this bill is a joint effort of the BLS Task
Force and OFR to bring Florida’s securities laws up to date with changes in federal securities laws and
other states’ securities laws.8
Securities Regulation
Background
FEDERAL SECURITIES REGULATION
The federal Securities Exchange Act of 1934 (1934 Act) requires registration of securities market
participants like broker-dealers and exchanges.9 Generally, any person acting as “broker” or “dealer” as
defined in the 1934 Act must be registered with the United States Securities and Exchange
Commission (SEC) and join a self-regulatory organization (SRO), like the Financial Industry Regulatory
Authority (FINRA) or a national securities exchange. 10
The 1934 Act broadly defines “broker” as “any person engaged in the business of effecting transactions
in securities for the account of others,” which the SEC has interpreted to include involvement in any of
the key aspects of a securities transaction, including solicitation, negotiation, and execution. 11 A
1 The Florida Bar Business Law Section, Report of the Chapter 517 Task Force: Recommendations and Analysis of
Proposed Amendments to the Florida Securities and Investor Protection Act , p. 2 (Nov. 2023).
2 Office of Financial Regulation, Division of Securities, https://flofr.gov/sitePages/DivisionOfSecurities.htm (last visited Jan.
3, 2024).
3 The Florida Bar Business Law Section, supra note 1.
4 See 2023 Senate Bill 180, and 2023 House Bill 253.
5 The Florida Bar Business Law Section, supra note 1.
6 Ch. 2023-205, Laws of Fla.
7 The Florida Bar Business Law Section, supra note 1.
8 Id.
9 15 U.S.C. §§ 78c(a)(4) and 78o. U.S. Securities and Exchange Commission, Guide to Brok er-Dealer Registration,
http://www.sec.gov/divisions/mark etreg/bdguide.htm#II (last visited Jan. 3, 2024).
10 A “national securities exchange” is a securities exchange that has registered with the SEC under Section 6 of the 1934
Act. Examples of national securities exchanges registered with the SEC include the Nasdaq Stock Market, NYSE National
Inc., and the New York Stock Exchange LLC. See U.S. Securities and Exchange Commission, National Securities
Exchanges, https://www.sec.gov/fast-answers/divisionsmarketregmrexchangesshtml (last visited Jan. 8, 2024).
11 Id.
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“dealer” is “any person engaged in the business of buying and selling securities for such person’s own
account through a broker or otherwise.12
Certain entities in the securities industry are often referred to as “broker-dealers” because such entities
are considered “brokers” when executing trades on behalf of customers, but are “dealers” when
executing trades for their own account. In addition to being registered with the SEC, broker-dealers
must comply with state registration requirements.
STATE SECURITIES REGULATION
State laws that protect the investing public from fraudulent sales practices and activities are known as
“Blue Sky Laws.”13 Florida’s laws relating to the regulation of securities issued, offered, and sold in the
State of Florida are codified under the Act.
OFR’s Division of Securities (Division) regulates and registers the offer and sale of securities in, to, or
from Florida by firms, branch offices, and individuals affiliated with these firms in accordance with the
Act and Rule Chapter 69W, Florida Administrative Code.14 The Financial Services Commission,
comprised of the Governor and Cabinet (the Commission), serves as OFR’s agency head for purposes
of rulemaking and appoints OFR’s Commissioner, who serves as the agency head for purposes of final
agency action for all areas within OFR’s regulatory authority.15
As of September 30, 2023, the Division had total registrants in the following areas:
Dealers: 2,427
Investment advisers: 8,359
Branch offices: 11,702
Associated Persons: 378,43516
Additionally, as of September 2023, OFR has five registered offerings and zero crowdfunding
offerings.17
The Act prohibits dealers and associated persons from offering or selling securities in Florida unless
registered with OFR or specifically exempted.18 Additionally, all securities in Florida must be registered
with OFR unless they meet one of the exemptions under the Act,19 or are federally covered (i.e., under
the exclusive jurisdiction of the SEC).20
Failure to meet the precise requirements of these exemptions can subject the violator to civil, criminal,
and administrative liability for the sale of unregistered securities, which is a third-degree felony.21 Civil
remedies under the Act include rescission and damages.22
12 15 U.S.C. § 78c(a)(5).
13 U.S. Securities and Exchange Commission, Blue Sk y Laws, http://www.sec.gov/answers/bluesky.htm (last visited Jan.
3, 2024).
14 Office of Financial Regulation, Division of Securities, https://flofr.gov/sitePages/DivisionOfSecurities.htm (last visited
Jan. 3, 2024).
15 S. 20.121(3), F.S.
16 Office of Financial Regulation, Agency Analysis of 2024 House Bill 311, p. 2 (Nov. 1, 2023).
17 Id.
18 S. 517.12, F.S.
19 See ss. 517.051 or 517.061, F.S.
20 S. 517.07, F.S. If a security is registered with the SEC, s. 517.082, F.S., requires the broker or issuer to notify OFR that
the security is registered with the SEC.
21 S. 517.302(1), F.S.
22 S. 517.211, F.S.
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Party Registration Requirements
The Act requires the following individuals or businesses to be registered with OFR before selling or
offering to sell any securities in or from offices in this state, or selling securities to persons in this state
from offices outside this state:23
Dealers, which is defined as any person, other than an associated person of a dealer, that
engages, for all or part of the person’s time, directly or indirectly, as agent or principal in the
business of offering, buying, selling, or otherwise dealing or trading in securities issued by
another person.
o The term does not include a licensed practicing attorney, bank authorized to do business
in Florida, wholesaler selling exclusively to dealers, person buying and selling for the
person’s own account exclusively through a registered dealer or stock exchange, issuer,
or natural person representing an issuer under certain conditions 24
Investment advisers, which is defined as any person that receives compensation, directly or
indirectly, and engages for all or part of the person’s time, directly or indirectly, in the business
of advising others as to the value of securities or as to the advisability of investments in,
purchasing of, or selling of securities.
o The term contains similar exclusions as the exclusions for “dealers” in addition to a
federal covered adviser, a person that does not hold itself out to the general public as an
investment adviser and has no more than 15 clients within 12 consecutive months in this
state, and a few other exclusions.25
Associated persons, which is defined by a party’s relation to a dealer or to an investment
adviser:
o With respect to a dealer, an associated person is an individual who is employed,
appointed, or authorized by a dealer and who represents the dealer in effecting the
purchase or sale of a security.
The term does not include a dealer or a partner, officer, or director of a dealer
unless such person is specified in the group above. The term also does not
include a dealer’s employee whose function is only clerical or ministerial.
o With respect to an investment adviser, an associated person is an individual, including,
but not limited to, a partner, officer, director, or branch manager who is employed by or
associated with, or is subject to the supervision or control of an investment adviser
registered under the Act, and
Such person:
Makes recommendations or otherwise gives investment advice regarding
securities;
Manages client accounts or portfolios;
Determines which recommendations regarding securities should be
given;
Receives compensation to solicit, offer, or negotiate for the sale of
investment advisory services; or
Supervises employees who perform a function outlined above.
The term does not include an investment adviser or an employee whose function
is only clerical or ministerial.26
Effect of the Bill
The bill amends the following definitions:
Accredited investor is amended to clarify the term is defined by rule of the Commission in
accordance with SEC Rule 501, 17 C.F.R. s. 230.501, as amended.
23 S. 517.12, F.S.
24 S. 517.021(8), F.S.
25 S. 517.021(14), F.S.
26 S. 517.021(3), F.S.
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Boiler room is amended to mean an enterprise in which two or more persons in a common
scheme or enterprise solicit potential investors through telephone calls, electronic mail, text
messages, social media, chat rooms, or other electronic means.
Dealer is restructured into subparagraphs for clarification.
Federal covered adviser is amended to update cross-references.
Investment adviser is amended as follows:
o Reduces the threshold number of clients triggering registration from 15 clients to 6.
o Deletes the exclusion applicable to a person whose transactions in this state are limited
to those transactions described in s. 222(d) of the Investment Advisers Act of 1940.
o Provides an exclusion for the U.S., a state, a political subdivision of a state, or an
agency, authority, or instrumentality of one or more of the foregoing, or a business entity
that is wholly owned by one or more of the foregoing, or an officer, agent, or employee
of any of the foregoing acting as such in the course of his or her official duty. 27
The bill adds the following definitions:
Angel investor group28 means a group of accredited investors 29 that holds regular meetings and
has defined processes and procedures for making investment decisions, individually or among
the membership of the group, and that is not an associated person, affiliate, or an agent of a
dealer or investment adviser.
Business entity30 means a corporation, partnership, limited partnership, limited liability company,
proprietorship, firm, enterprise, franchise, association, self-employed individual, or trust,
whether fictitiously named or not, doing business in this state.
Exempt Securities
Background
It is unlawful and a violation of the Act for any person to sell or offer to sell an unregistered security
within Florida unless the security is exempt under s. 517.051, F.S., or such sale or offering is otherwise
exempt from the registration requirements of the Act.31
The exempt securities provided in the Act are self-executing and do not require any filing with OFR
prior to claiming an exemption.32 A person who claims entitlement to any of the exempt securities bears
the burden of proving such entitlement in any proceeding brought under the Act.33
27 An example of this type of entity is the State Board of Administration of Florida (SBA), which is an asset management
organization primarily responsible for investing state and local government assets. See Office of Program Policy Analysis
and Government Accountability, State Board of Administration of Florida,
https://oppaga.fl.gov/ProgramSummary/ProgramDetail?programNumber=4040 (last visited Jan. 8, 2024).
28 This definition has been added for purposes of the newly created s. 517.0615, F.S., relating to solicitation of interest.
29 An accredited investor is an individual or a business entity that is allowed to trade securities that may not be registered
with financial authorities. They are entitled to this privileged access by satisfying at least one requirement regarding their
income, net worth, asset size, governance status, or professional experience. The term is used by the SEC under
Regulation D to refer to investors who are financially sophisticated and have a reduced need for the protection provided
by regulatory disclosure filings.” Adam Hayes, Accredited Investor Defined: Understand the Requirements,
https://www.investopedia.com/terms/a/accreditedinvestor.asp (last visited Jan. 8, 2024).
30 This definition has been added to expand the scope of entities subject to the provisions of the Act.
31 S. 517.07, F.S.
32 S. 517.051(1), F.S.
33 Id.
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Effect of the Bill
Securities Issued by the U.S., a U.S. Territory, a State, etc.
Currently, a security issued or guaranteed by the U.S. or any territory or insular possession of the U.S.,
by the District of Columbia, or by any state of the U.S. or by any political subdivision or agency or other
instrumentality thereof, is exempt from registration.34
The bill clarifies that a person may not directly or indirectly offer or sell securities, other than general
obligation bonds if the issuer or guarantor is in default or has been in default any time after December
31, 1975, as to principal or interest (with respect to an obligation issued by the issuer or successor of
the issuer; or with respect to an obligation guaranteed by the guarantor or successor of the guarantor),
except by an offering circular containing a full and fair disclosure as prescribed by Commission rule.
Further, the bill provides that the foregoing does not apply to a security that is an industrial or
commercial development bond, unless payments are made or unconditionally guaranteed by a person
whose securities are exempt from registration under s. 18(b)(1) of the Securities Act of 1933, as
amended (1933 Act).
Securities Issued by and Representative of an Interest in Certain Institutions
Currently, a security that is issued or guaranteed by a national bank, a federally chartered savings and
loan association, or a federally chartered savings bank; any federal land bank, joint-stock land bank, or
national farm loan association under the provisions of the Federal Farm Loan Act of July 17, 1916; an
international bank of which the U.S. is a member; or a corporation created and acting as an
instrumentality of the U.S. government is exempt.35
The bill removes this exemption in its entirety. In its place, the bill provides an exemption for a security
that is issued by and represents, or will represent, an interest in or a direct obligation of, or that is
guaranteed by:
An international bank of which the U.S. is a member;
A bank organized under the laws of the U.S.;
A member bank of the Federal Reserve System; or
A depository institution for which a substantial portion of the business consists or will consist of
receiving deposits or share accounts that are insured to the maximum amount authorized by
statute by the FDIC or the National Credit Union Share Insurance Fund.
Securities Issued by a Business Entity Owning a Railroad, Common Carrier, Etc.
Currently, a security issued or guaranteed, as to principal, interest, or dividend, by a corporation owning
or operating a railroad, other common carrier, or any other public service utility (provided certain
circumstances are met) is exempt from registration.36 The bill replaces the term “corporation” with the
term “business entity” to expand the scope of entities subject to the exemption.
Shares of a Residential Cooperative
The bill clarifies that shares or other equity interests of a business entity which represent ownership, or
entitle the holders of such shares or other equity interests to possession and occupancy, of specific
apartment units in property owned by such business entity and organized and operated on a
cooperative basis, solely for residential purposes, is exempt from registration requirements.37
34 S. 517.051(1), F.S.
35 S. 517.051(3), F.S.
36 S. 517.051(4), F.S.
37 The residential cooperative exemption is currently a transaction exemption in s. 517.061(14), F.S. The bill moves the
exemption to the section of the Act relating to exempt securities, rather than exempt transactions, for clarification
purposes. See The Florida Bar Business Law Section, supra note 1, at p. 12-13.
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Interest in a Not-for-Profit Membership Entity Operated as a Cooperative
The bill also establishes a new exemption for a member’s or owner’s interest in a not-for-profit
membership entity operated either as a cooperative under the cooperative laws of a state or in
accordance with the applicable provisions of the IRC. However, the exemption only applies to a
member’s or owner’s interest or like security sold or transferred to a bona fide member of the not-for-
profit membership entity or a person who becomes a bona fide member of the not-for-profit
membership entity at the time of or in connection with the sale or transfer.
Note, Draft, Bill of Exchange, or Banker’s Acceptance Meeting Certain Requirements
Currently, a note, draft, bill of exchange, or banker’s acceptance having a unit amount of $25,000 or
more which arises out of a transaction, or the proceeds of which have been used for current
transactions, and which has a maturity period at the time of issuance not exceeding 9 months exclusive
of days of grace, or any renewal thereof which has a maturity period likewise limited, is exempt.38 This
applies only to prime quality negotiable commercial paper of a type not ordinarily purchased by the
general public (i.e., paper issued to facilitate well-recognized types of current operational business
requirements and of a type eligible for discounting by Federal Reserve banks). 39
The bill removes this exemption in its entirety, subjecting the type of security described therein to
registration, unless exempted otherwise.
Securities Issued by an Entity Organized for Religious, Educational or Similar Purpose
Currently, a security issued by a corporation organized and operated exclusively for religious,
educational, benevolent, fraternal, charitable, or reformatory purposes and not for pecuniary profit, no
part of the net earnings of which inures to the benefit of any private stockholder or individual, or any
security of a fund that is excluded from the definition of an investment company under s. 3(c)(10)(B) of
the Investment Company Act of 1940, is exempt from registration.40
The bill replaces the term “corporation” with “business entity” to expand the scope of entities subject to
the exemption. Additionally, the bill amends the reference to the Investment Company Act of 1940 to
include the phrase “as amended” to incorporate by reference any amendments to the Act as of the
effective date of the bill.
Exempt Transactions
Background
It is unlawful and a violation of the Act for any person to sell or offer to sell a security within Florida
unless the security is exempt under the Act, or such sale or offering is otherwise exempt from the
registration requirements of s. 517.061, F.S.41
38 S. 517.051(8), F.S.
39 Id.
40 S. 517.051(9), F.S.
41 S. 517.071, F.S.
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Current law provides over twenty transactions that are exempt from the registration requirements of the
Act.42 Examples include:
Securities issued in exchange for one or more outstanding securities, claims, or property
interests at any judicial, executor’s, administrator’s, guardian’s, or conservator’s sale, or at any
sale by a receiver or trustee in insolvency or bankruptcy; 43
Certain isolated sales or offers for sale of securities when made by or on behalf of a vendor not
the issuer or underwriter of the securities who, being the bona fide owner of such securities,
disposes of his or her own property for his or her own account; 44
The distribution by a corporation, trust, or partnership, actively engaged in the business
authorized by its charter, or other organizational articles or agreement, of securities to its
stockholders or other equity security holders, partners, or beneficiaries as a stock dividend or
other distribution out of earnings or surplus;45
The distribution of the securities of an issuer exclusively among its own security holders, when
no commission or other remuneration is paid or given in connection with the sale or distribution
of such additional securities;46
The offer or sale of securities from one corporation to another corporation provided that the sale
price of the securities is $500,000 or more and the buyer and seller corporations each have
assets of $500,000 or more;47 and
The offer or sale of securities under a bona fide employer-sponsored stock option, stock
purchase, pension, profit-sharing, savings, or other benefit plan when offered only to employees
of the sponsoring organization or to employees of its controlled subsidiaries. 48
These exemptions are self-executing and do not require any filing with OFR prior to claiming an
exemption.49 A person who claims entitlement to such an exemption bears the burden of proving such
entitlement in any proceeding brought under the Act.50
NASAA ACCREDITED INVESTOR EXEMPTION
The North American Securities Administrators Association (NASAA) is a voluntary, international,
association whose membership consists of 67 state, provincial, and territorial securities
administrators.51 Formed in 1919, NASAA is the “oldest international organization devoted to investor
protection.”52 NASAA advocates on behalf of state securities agencies in the United States that are
responsible for capital formation and investor protection. 53 NASAA also coordinates training and
education seminars for securities agency staff54 and creates model rules for implementation amongst
its members.55
On April 27, 1997, NASAA members voted to approve a “Model Accredited Investor Exemption,” which
exempts the offer or sale of a security by an issuer from the security registration process in a
transaction meeting certain requirements.56 Specifically, the exemption limits the sale of securities to
42 S. 517.061, F.S.
43 S. 517.061(1), F.S.
44 S. 517.061(3), F.S.
45 S. 517.061(4), F.S.
46 S. 517.061(6), F.S.
47 S. 517.061(7), F.S.
48 S. 517.061(15), F.S.
49 S. 517.061(1), F.S.
50 Id.
51 NASAA, Welcome to NASAA, https://www.nasaa.org/about-us/ (last visited Jan. 2, 2024).
52 Id.
53 Id.
54 Id.
55 See NASAA, NASAA Model Rule on Investment Adviser Representative Continuing Education (Model Rule 2002-
411(h) or 1956-204(B)(6)-CE ), https://www.nasaa.org/wp-content/uploads/2020/10/ NASAA-IAR-CE-Model-Rule.pdf (last
visited Jan. 2, 2024).
56 Office of Financial Regulation, supra note 16, at p. 17.
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accredited investors and the issuer must not be subject to disqualification.57 The exemption also
requires that an issuer file a notice of transaction, a consent to service of process, and a copy of the
general announcement with the regulatory authority within 15 days after the first sale in the state.58 The
majority of states have adopted this accredited investor exemption.59
UNIFORM SECURITIES ACT
The Uniform Securities Act (USA) is a model act developed by the Uniform Law Commissioners.60 The
USA was first created in 1956 and was later amended in 1985 and again in 2002.61 Most states’
securities laws are based, to some degree, on the three variations of the USA (i.e., most states have
either adopted one of these variations or used one variation as the basis for their statutes). 62
Effect of the Bill
The bill reorganizes the portion of the Act relating to exempt transactions to group like transactions
together and to generally modernize the type of transactions exempt thereunder in accordance with
developments in federal securities laws and other states’ securities laws.
Specifically, the bill adds an exemption for sales of securities effected through assignments for the
benefit of creditors. The bill also creates a new exemption for a transaction involving a security issued
in exchange, except in a case under Title 11 of the United States Code, for one or more bona fide
outstanding securities, or property interests, or partly in such exchange and partly for cash, if the terms
and conditions are approved by certain governmental entities after a hearing upon the fairness of such
terms and conditions and at which all parties to the exchange have a right to appear.
The bill also:
Expands the current exemption63 related to a transaction involving the distribution of securities
among an issuer’s own security holders to include persons that at the date of the transaction are
holders of options and all types of warrants;
Replaces the terms “corporation, trust, or partnership” with the more expansive term “business
entity” throughout for consistency;
Requires, under the current exemption related to the offer or sale of securities from one
corporation to another pursuant to a vote,64 that the issuer is parties to the reorganization, and
eliminates the requirement that the security holders consent to the sale of such securities;65
Expands the current exemption relating to employer-sponsored stock option plans 66 to include
any securities, plan interests, and guarantees issued under a compensatory benefit plan or
compensation contract, and requires that the employee benefit plan be contained in a record
established by the issuer, its parents, its majority-owned subsidiaries, or the majority-owned
subsidiaries of the issuer’s parent for the participation of their employees;
Eliminates the requirement, under the exemption relating to the offer or sale of securities to a
financial institution,67 that the Commission define “institutional buyer,” and makes the current
caveat on the exemption that the offers or sales of securities cannot be for the direct or indirect
promotion of any scheme or enterprise with the intent of violating or evading the Act generally
applicable to all exemptions, not just this one; and
57 Id.
58 Id.
59 Id.
60 NASAA, Uniform Securities Acts, https://www.nasaa.org/industry-resources/uniform-s ecurities-acts/ (last visited Jan. 8,
2024).
61 Id.
62 Id.
63 S. 517.061(6), F.S.
64 S. 517.061(9), F.S.
65 This requirement is not eliminated entirely. The requirement for security holders’ consent is a matter of corporate law
and already covered under Florida’s corporate laws, and therefore unnecessary to include it in the Act.
66 S. 517.061(15), F.S.
67 S. 517.061(11)(a), F.S.
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Removes the provision prohibiting the payment of a commission or compensation for the sale of
the securities in certain circumstances relating to the offer or sale, by or on behalf of an issuer,
of its own securities, where there are no more than 35 purchasers, as the Act already prohibits
any commission payment except to a registered dealer.
The bill also incorporates NASAA’s model accredited investor exemption. Sales of securities may only
be made to persons who are, or the issuer reasonably believes are, accredited investors. The
exemption is not available to an issuer that is in the development stage and that has no specific
business plan or purpose, or has indicated that its business plan is to engage in a merger or acquisition
with an unidentified company or other entity or person.68
Additionally, the bill:
Adds a secured party69 to those eligible to participate in exempt transactions related to
liquidation of a debt secured by a security;
Creates an exemption for nonissuer transactions with a covered adviser, managing investments
in excess of $100 million, acting in the exercise of discretionary authority in a signed record for
the accounts of others; and
Allows the Commission to recognize by rule clearinghouses able to clear option transactions for
purposes of the exemption described above; requires that the underlying security is purchased
or sold on a recognized security exchange registered under the 1934 Act and to eliminate the
possibility that the underlying security instead be quoted on the National Association of
Securities Dealers Automated Quotation System.70
The bill also creates an exemption for certain transactions based on the USA. Nonissuer transactions in
an outstanding security by or through a dealer registered or exempt from registration are exempt if two
conditions are met. First, the issuer must be a reporting issuer in Canada or in a foreign jurisdiction
designated by Commission rule and the issuer has been subject to continuous reporting requirements
for not less than 180 days before the transaction; and second, the security is listed on The Toronto
Stock Exchange, Inc. or on a foreign jurisdiction’s securities exchange that has been designated by
Commission rule, or is a security of the same issuer that is of senior or substantially equal rank to the
listed security or is a warrant or right to purchase or subscribe to any of the foregoing. The bill provides
that OFR may revoke any designation of a securities exchange if OFR finds that revocation is
necessary or appropriate in the public interest and for the protection of investors.71
Intrastate Crowdfunding
Background
Florida’s intrastate crowdfunding exemption currently provides that an offer or sale of a security that is
conducted in accordance with certain statutory requirements is an exempt transaction under the Act.72
However, this exemption may not be used in conjunction with any other exemption under the Act.73
68 Id. at 20.
69 S. 517.061(2), F.S.
70 Id. at 20-21.
71 Id. at 21.
72 S. 517.0611(2), F.S.
73 Id.
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The exemption requires that the offer or sale of securities be conducted in accordance with the
requirements of the federal exemption for intrastate offerings in s. 3(a)(11) of the 1933 Act and SEC
Rule 147.74 Further, the exemption requires that an issuer:
Be a for-profit business entity formed under the laws of the state, be registered with the
Secretary of State, maintain its principal place of business in the state, and derive its revenues
primarily from operations in the state;
Conduct transactions for the offering through a dealer or intermediary registered with OFR;
Not be, either before or as a result of the offering, an investment company or subject to the
reporting requirements of s. 13 or s. 15(d) of the 1934 Act;
Not be a company with an undefined business operation, a company that lacks a business plan,
a company that lacks a stated investment goal for the funds being raised, or a company that
plans to engage in a merger or acquisition with an unspecified business entity;
Not be subject to a disqualification established by the Commission or OFR or a disqualification
described in s. 517.1611, F.S., or SEC Rule 506(d). Each director, officer, person occupying a
similar status or performing a similar function, or person holding more than 20% of the shares of
the issuer, is subject to this requirement;
Execute an escrow agreement with a federally insured financial institution authorized to do
business in the state for the deposit of investor funds, and ensure that all offering proceeds are
provided to the issuer only when the aggregate capital raised from all investors is equal to or
greater than the target offering amount; and
Allow investors to cancel a commitment to invest within 3 business days before the offering
deadline, as stated in the disclosure statement, and issue refunds to all investors if the target
offering amount is not reached by the offering deadline. 75
Under this exemption, an issuer must provide investors and the dealer or intermediary, along with a
copy to OFR at the time that the notice is filed, and make available to potential investors through the
dealer or intermediary, a disclosure statement containing material information about the issuer and the
offering, which must include certain specified information. 76
The issuer must also provide OFR with a copy of the escrow agreement with a financial institution
authorized to conduct business in this state.77 All investor funds must be deposited in the escrow
account.78 The escrow agreement must require that all offering proceeds be released to the issuer only
when the aggregate capital raised from all investors is equal to or greater than the minimum target
offering amount specified in the disclosure statement as necessary to implement the business plan, and
that all investors will receive a full return of their investment commitment if that target offering amount is
not raised by the date stated in the disclosure statement. 79
Currently, offerings are limited to $1 million, and offers or sales to a person owning 20% or more of the
outstanding shares of any class or classes of securities or to an officer, director, partner, or trustee, or a
person occupying a similar status, do not count toward this limitation. 80 Moreover, sales of securities to
non-accredited investors in a 12-month period may not exceed:
The greater of $2,000 or 5% of the annual income or net worth of such investor, if the annual
income or the net worth of the investor is less than $100,000; or
10% of the annual income or net worth of such investor, not to exceed a maximum aggregate
amount sold of $100,000, if either the annual income or net worth of the investor is equal to or
exceeds $100,000.81
OFR may summarily suspend a notice filing if the payment for the filing is dishonored by the financial
institution upon with which the funds are drawn or if the issuer made a material false statement in the
74 S. 517.0611(3), F.S.
75 S. 517.0611(4), F.S.
76 S. 517.0611(7), F.S.
77 S. 517.0611(8), F.S.
78 Id.
79 Id.
80 S. 517.0611(9), F.S.
81 S. 517.0611(10), F.S.
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issuer’s notice-filing.82 A material false statement made in the issuer’s notice-filing results in a final
order by OFR revoking the notice-filing, issuing a fine and permanent bar to the issuer and all owners,
officers, directors, and control persons, or any person occupying a similar status or performing a similar
function of the issuer.83
The Act also provides certain requirements for intermediaries, 84 as well as prohibited activities for
intermediaries.85
INVEST GEORGIA EXEMPTION
The Invest Georgia Exemption (IGE) was created in 2011 by the Georgia’s Commissioner of
Securities.86 IGE allows for-profit businesses formed under Georgia law or properly registered to
transact business in Georgia to raise up to $5 million in a single offering. 87 IGE filers can sell up to
$10,000 in securities to non-accredited Georgia investors, and can sell up to the offering limit to
accredited Georgia investors.88
Businesses qualify for the IGE program if 80% of gross revenues are derived from Georgia; 80% of
assets are held in Georgia; 80% of the offering’s proceeds are used in Georgia; or a majority of the
issuer’s employees are based in Georgia.89
Qualifying businesses are able to send out general solicitations to potential investors but can only offer
and sell to Georgia residents.90 Further, IGE does not set limitations on the securities offered; rather,
IGE gives the issuer the freedom to set their own valuation for issuing equity or convertible notes,
loans, etc.91
According to Georgia’s Division of Securities, IGE has been successfully used by breweries, medical
technology firms, real estate firms, manufacturers, restaurants, entertainment, and other businesses. 92
Over 100 companies have used IGE since its inception in 2011. 93
Effect of the Bill
The bill renames the “Florida Intrastate Crowdfunding Exemption” to “The Florida Limited Offering
Exemption,” allows the exemption to be used in conjunction another exemption, and allows any for-
profit business entity that is principally located in and gets its primary revenue within Florida, rather than
only Florida corporations so located and funded, to use the exemption.
82 S. 517.0611(12)(a),F.S.
83 S. 517.0611(12)(b),F.S.
84 See S. 517.0611(13), F.S.
85 See S. 517.0611(14), F.S.
86 Georgia Secretary of State Securities Division, Invest Georgia Exemption, https://sos.ga.gov/sites/default/files/2023-
05/IGE%20pamplet-web.pdf (last visited Jan. 10, 2024).
87 Id.
88 Id.
89 Id.
90 Id.
91 Id.
92 Id.
93 Id.
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The bill:
Allows issuers conducting an offering of $2.5 million or less to conduct transactions without a
dealer or intermediary registered with OFR, and requires that issuers conducting an offering of
$2.5 million or more use a dealer or intermediary;
Increases the offering limit under this exemption from $1 million to $5 million;
Adds managers, managing members, or general partners to the list of those persons that do not
count toward the offering limitation; and
Replaces the term “shares” with “equity interests.”
The bill eliminates the requirement to execute a third-party escrow agreement. It also requires that
investor funds be deposited in an account in a federally insured financial institution and maintained in
the account until the target offering amount has been reached, the offering has been terminated, or the
offering has expired, and requires the issuer to refund all funds to investors within 10 business days if
the target offering amount is not reached or the offering is terminated or expires.
The bill also:
Eliminates a required attestation that the issuer and certain other related persons are not
currently and have not been within the past 10 years the subject of regulatory or criminal actions
involving fraud or deceit;
Reduces the number of days in which an issuer must amend the notice it submitted to OFR
from 30 days after any information becomes inaccurate to 10 business days after any material
information becomes inaccurate;
Allows the issuer to engage in general advertising and general solicitation of the offer to
prospective investors, provided certain conditions are met; and
Requires that the issuer provide the names of managers, managing members, and general
partners and the ownership percentage of each person holding more than 20% of the issuer’s
equity interests.
It limits the amount of securities that can be sold by an issuer to an unaccredited investor to $10,000,
rather than an amount that is a computation based on personal income or net worth. This bill also
eliminates a required annual report to investors and OFR.
The bill retains the current substantive disclosure obligations of issuers to prospective investors.
However, because of the change in maximum offering amounts and universal revisions to include
control persons of certain entities, the financial disclosure obligations have been revised for differing
offering amounts, clarified as to the required types of financial statements, and updated to conform with
technical changes in federal securities laws.
Further, it allows a purchaser to void any sale made pursuant to this section by notifying the issuer that
the purchaser expressly voids the purchase within 3 days after the first tender of consideration is made
by such purchaser to the issuer. The purchaser’s notice must be sent by email, certified mail, or
overnight delivery service with proof of delivery.
Florida Invest Local Exemption
Effect of the Bill
The bill creates a new intrastate offering exemption, based in part on Georgia’s IGE program. The
offering is limited to $500,000 and any one investor may not invest more than $10,000 unless the
investor is accredited, a specified employee, or a 10% or more shareholder. Under this exemption, an
offer or sale of security by an issuer is exempt from the Act if the following conditions are met:
An issuer must be a for-profit business entity registered with the Department of State with its
principal place of business in this state.
The issuer may not be, before or as a result of the offering:
o An investment company;
o Subject to the reporting requirements of the 1934 Act;
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o A business entity with an undefined business plan, that lacks a business plan, that lacks
a stated investment goal for the funds being raised, or that plans to engage in a merger
or acquisition with an unspecified business entity; or
o Disqualified pursuant to s. 517.0616, F.S.94
Further, the transaction must meet the requirements of the federal exemption for intrastate
offerings in s. 3(a)(11) of the 1933 Act and SEC Rule 147 or SEC Rule 147A.
An issuer may engage in general advertising and general solicitation. However, any general advertising
or general announcement must state that the offer is limited and open only to residents of this state and
is subject to the enforcement provisions of the Act.
A purchaser must receive, at least 3 business days before any binding commitment to purchase or
consideration paid, a disclosure document that provides material information of the issuer, which
includes, but is not limited to, certain specified information under the exemption. All funds received from
investors must be deposited into a bank or depository institution authorized to do business in this state
and funds may not be withdrawn until the target offering amount has been received. 95
The issuer must file a notice of the offering and the disclosure document with OFR on a form prescribed
by Commission rule no less than 5 business days before the offering commences. A purchaser may
void any sale made pursuant to this section by notifying the issuer that the purchaser expressly voids
the purchase within 3 days after the first tender of consideration is made by such purchaser to the
issuer. The purchaser’s notice must be sent by email, hand delivery, courier service, or other method
with proof of delivery.
Demo Day Presentations and “Testing the Waters”
Background
On November 2, 2020, the SEC adopted amendments to facilitate capital formation and increase
opportunities for investors by expanding access to capital for small and medium-sized businesses and
entrepreneurs across the United States.96 The amendments affected various rules and requirements,
including adding SEC Rule 148, relating to “demo day” communications and SEC Rule 241, relating to
an issuer’s ability to “test the waters” to determine whether there is any interest in a contemplated
offering.97
SEC RULE 148
New SEC Rule 14898 provides that certain “demo day” communications 99 will not be deemed a general
solicitation or general advertising.100 Under this rule, an issuer will not be deemed to have engaged in
general solicitation if the communications are made in connection with an event sponsored by a
college, university, or other institution of higher education, a state or local government or instrumentality
thereof, a nonprofit organization, or an angel investor group. However, certain conditions must be
satisfied, such as limits on the sponsor’s activities, a requirement that the advertising for the event not
94 Created by the bill, proposed s. 517.0616, F.S., provides that certain registration exemptions are not available to an
issuer that would be disqualified under SEC Rule 506(d) at the time the issuer makes an offer for the sale of a security.
95 Id. at p. 25.
96 U.S. Securities and Exchange Commission, Facilitating Capital Formation and Expanding Investment Opportunities by
Improving Access to Capital in Private Mark ets, https://www.sec.gov/corpfin/facilitating-capital-formation-secg (last visited
Jan. 8, 2024).
97 Id.
98 17 C.F.R. 230.148.
99 For purposes of SEC Rule 148, “communications” mean communications made in connection with an event sponsored
by a group or entity that invites issuers to present their businesses to potential investors with the aim of securing
investment. See U.S. Securities and Exchange Commission, supra note 96.
100 Id.
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reference any specific offering of securities by the issuer, and limits on the information conveyed at the
event regarding the offering of securities by or on behalf of the issuer. 101
SEC RULE 241
SEC Rule 241102 permits an issuer, or any person authorized to act on behalf of an issuer, to
communicate orally or in writing to determine whether there is any interest in a contemplated exempt
offering prior to deciding on the exemption it plans to use.103 The new rule requires such generic
“testing the waters” materials, also known as solicitations of interest, to state that:
The issuer is considering an offering of securities exempt from registration under the 1933 Act,
but has not determined a specific exemption from registration the issuer intends to rely on for
the subsequent offer and sale of the securities;
No money or other consideration is being solicited, and if sent in response, will not be accepted;
No offer to buy the securities can be accepted and no part of the purchase price can be
received until the issuer determines the exemption under which the offering is intended to be
conducted and, where applicable, the filing, disclosure, or qualification requirements of such
exemption are met; and
A person’s indication of interest involves no obligation or commitment of any kind. 104
The communication may include a means for a person to indicate interest in a potential offering and an
issuer may require such indication to include the person’s name, address, telephone number, and email
address.105 SEC Rule 241 also requires that the generic solicitation materials be made publicly
available as an exhibit to the offering materials filed with the SEC if a Regulation A106 or Regulation
Crowdfunding107 offering is commenced within 30 days of the generic solicitation, and that an issuer
provide purchasers with the materials if the issuer sells securities under Rule 506(b) within 30 days of
the generic solicitation of interest to any purchaser that is not an accredited investor. 108
Effect of the Bill
The bill allows issuers to engage in solicitation of potential investors under specified limited conditions.
In doing so, the bill adopts SEC Rule 148 that provides for issuer presentation at a specified form of a
“demo day” meeting that is sponsored by one of the specified organizations. The bill also adopts SEC
Rule 241, allowing issuers to “test the waters” before making any offering to determine whether the
time, energy, and expense of a possible offering would be worthwhile. Both provisions allow a potential
issuer to evaluate the viability of an offering and accordingly avoid unnecessary time and expense. All
communications made under these provisions are subject to the anti-fraud provisions of the Act.109
Registration Procedures
Background
All securities required by the Act to be registered before being sold in Florida and not entitled to
registration by notification must be registered in the manner provided by Act.110 OFR receives and
reviews the applications for securities to be registered, and the Commission may prescribe forms on
101 Id.
102 17 C.F.R. 230.241.
103 U.S. Securities and Exchange Commission, supra note 96.
104 Id.
105 Id.
106 SEC Regulation A establishes two tiers of offerings that are exempt from registration under the 1933 Act. See U.S.
Securities and Exchange Commission, supra note 96.
107 The SEC Regulation Crowdfunding provides an exemption from registration for certain securities offerings that solicit
relatively small individual investments or contributions from a large number of investors. Id.
108 U.S. Securities and Exchange Commission, supra note 96.
109 The Florida Bar Business Law Section, supra note 1, at p. 56.
110 S. 517.081(1), F.S.
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which such applications are to be submitted.111 Applications must be signed by the applicant, sworn to
by any person having knowledge of the facts, and filed with OFR.112
OFR may require the applicant to submit to the following information concerning the issuer and such
other relevant information as OFR may need to ascertain whether such securities shall be registered
under the Act:
The names and addresses of:
o All the directors, trustees, and officers, if the issuer is a corporation, association, or trust.
o All the managers or managing members, if the issuer is a limited liability company.
o All the partners, if the issuer is a partnership.
o The issuer, if the issuer is a sole proprietorship or natural person.
The location of the issuer’s principal business office and of its principal office in this state, if any.
The general character of the business actually to be transacted by the issuer and the purposes
of the proposed issue.
A statement of the capitalization of the issuer.
A balance sheet showing the amount and general character of its assets and liabilities on a day
not more than 90 days prior to the date of filing such balance sheet or such longer period of
time, not exceeding 6 months, as OFR may permit at the written request of the issuer on a
showing of good cause therefor.
A detailed statement of the plan upon which the issuer proposes to transact business.
A statement of the amount of the issuer’s income, expenses, and fixed charges during the last
fiscal year or, if in actual business less than 1 year, then for such time as the issuer has been in
actual business.
A statement of the issuer’s cash sources and application during the last fiscal year or, if in actual
business less than 1 year, then for such time as the issuer has been in actual business.
A statement showing the maximum price at which such security is proposed to be sold, together
with the maximum amount of commission, including expenses, or other form of remuneration to
be paid in cash or otherwise, directly or indirectly, for or in connection with the sale or offering
for sale of such securities.
A copy of the opinion or opinions of counsel concerning the legality of the issue or other matters
which OFR may determine to be relevant to the issue.
A detailed statement showing the items of cash, property, services, patents, good will, and any
other consideration in payment for which such securities have been or are to be issued.
The amount of securities to be set aside and disposed of and a statement of all sec urities
issued from time to time for promotional purposes.113
OFR may also require the applicant to submit a copy of the securities certificate, if applicable, and a
copy of any circular, prospectus, advertisement, or other description of such securities. 114 The
Commission shall adopt a form for a simplified offering circular to register securities that are sold in
offerings in which the aggregate offering price in any consecutive 12-month period does not exceed $5
million.115 This is synonymous with a Small Company Offering Registration (SCOR) under the 1933
Act.116 To qualify for use of the simplified offering circular, the issuer must:
Agree to provide OFR with an annual financial report containing a balance sheet as of the end
of the issuer’s fiscal year and a statement of income for such year (and if the issuer has more
than 100 security holders at the end of a fiscal year, the financial statements must be audited);
and
Annual financial reports must be filed with OFR within 90 days after the close of the issuer’s
fiscal year for each of the first 5 years following the effective date of the registration. 117
111 S. 517.081(2), F.S.
112 S. 517.081(2), F.S.
113 S. 517.081(3), F.S.
114 S. 517.081(3)(g)1., F.S.
115 S. 517.081(3)(g)2., F.S.
116 The Florida Bar Business Law Section, supra note 1, at p. 59.
117 S. 517.081(3)(g)2., F.S.
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Further, if the issuer is a corporation, a copy of its articles of incorporation with all amendments and of
its existing bylaws, if not already on file, must be filed with OFR. If the issuer is a limited liability
company, a copy of the articles of organization with all the amendments and a copy of the company’s
operating agreement as may be amended, if not already on file, must be filed with OFR. If the issuer is
a trustee, a copy of all instruments by which the trust is created or declared and in which it is accepted
and acknowledged must be filed with OFR. If the issuer is a partnership, unincorporated association,
joint-stock company, or any other form of organization whatsoever, a copy of its articles of partnership
or association and all other papers pertaining to its organization, if not already on file, must be filed with
OFR.118
An issuer filing an application must, at the time of filing, pay OFR a nonreturnable fee of $1,000 per
application for each offering that exceeds $5 million, or $200 per application for each offering that does
not exceed $5 million.119
If upon examination of an application OFR finds that the sale of the security would not be fraudulent,
that the terms of the sale of such securities would be fair, just, and equitable, and that the enterprise or
business of the issuer is not based upon unsound business principles, OFR must record the registration
of such security in the register of securities.120 Thereafter, such registered security may be sold by any
registered dealer, subject, however, to the further order of OFR.121
The OFR must consider a filed application abandoned if the issuer or any person acting on behalf of the
issuer has failed to timely complete an application specified by Commission rule.122
Effect of the Bill
The bill:
Consolidates the provisions of the Act relating to the Commission’s rule-making authority for
registration procedures;
Eliminates the requirement for 5 years of annual reports and audited financial statements
applicable to simplified securities offerings that use the SCOR registration method; and
Eliminates the prohibition against a person using the SCOR registration method for the resale of
securities, which will allow non-control persons to resell securities through a Florida-based
registration process.123
Consent to Service
Background
The Act requires an issuer, upon any initial application for registration under the Act or upon request of
OFR, to file with such application the irrevocable written consent to service. 124 The written consent must
be authenticated by the seal of said issuer (if it has a seal), and by the acknowledged signature of a
member of the co-partnership or company, or by the acknowledged signature of any officer of the
incorporated or unincorporated association, and such consent to service must be duly authorized by
resolution of the board of directors, trustees, or managers of the corporation or association (and such
resolutions must be filed as a certified copy with the written consent to service). 125
Effect of the Bill
The bill expands the type of persons who are eligible to sign the written consent on behalf of a business
entity to include directors, managers, managing members, general partners, trustees, or officers of the
118 S. 517.081(3)(n),F.S.
119 S. 517.081(6), F.S.
120 S. 517.081(7), F.S.
121 S. 517.081(7), F.S.
122 S. 517.081(8), F.S.
123
124 S. 517.101, F.S.
125 S. 517.101(1), F.S.
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issuer. The bill also expands the persons who can authorize the signer to execute the written consent
to include the issuer’s general partners and managing members.
Securities Guaranty Fund
Background
The Act establishes Florida’s Securities Guaranty Fund (SGF). 126 The SGF provides financial
assistance to persons who are adjudged by a court to have suffered monetary damages as a result of a
violation of ss. 517.07 or 517.301, F.S., committed by a dealer, investment adviser, or associated
person who was licensed under the Act at the time the violation occurred.127 The SGF is funded by a
percentage of revenues received as assessment fees by OFR. 128
For a person to be eligible to receive payment from the SGF, the following requirements must be met:
The act for which recovery is sought occurred on or after January 1, 1979;
The person has received final judgement from a court that a violation of ss. 517.07 or 517.301,
F.S., occurred for which monetary damages are awarded;
The person has made all reasonable searches and inquiries to ascertain whether the violator
possesses assets that can be sold in satisfaction of the damages awarded, and in such search
has discovered no or insufficient assets; and
The person has applied any amounts recovered from the violator, or from any other source, to
the damages awarded by the court.129
PAYMENT FROM THE FUND
Any person who meets all the requirements outlined above may apply to OFR for payment to be made
to such person from the SGF in the amount equal to the unsatisfied portion of such person’s judgement
or $10,000, whichever is less, but only to the extent and amount reflected in the judgement as being
actual or compensatory damages, excluding post-judgement interest, costs, and attorney’s fees.130
Among other things, the Act also establishes that:131
Regardless of the number of claims involved, payments for claims shall be limited in the
aggregate to $100,000 against any one dealer, investment adviser, or associated person.
o If the total claims exceed the aggregate limit of $100,000, OFR shall prorate the
payment to each claimant based upon the ration that the person’s claim bears to the
total claims filed.
If the final judgement that gave rise to the claim is overturned in any appeal or any collateral
proceeding, the claimant must reimburse the SGF all amounts paid from the SGF.
o The claimant shall reimburse the SGF all amounts paid from the SGF following any
satisfaction of the final judgement.
o Such reimbursement must be paid to OFR within 60 days after the final resolution of the
appellate or collateral proceedings or the satisfaction of judgement, with the 60-day
period commencing on the date the final order or decision is entered in such
proceedings.
OFR may institute legal proceedings to enforce compliance with the section and with s.
517.131, F.S., to recover money owed to the SGF, and is entitled to recover interest, costs, and
fees in any action brought pursuant to the section in which OFR prevails.
126 S. 517.101, F.S.
127 S. 517.131(1)(a), F.S. See also, Office of Financial Regulation, Statute Review: Biennial Report December 2022
(https://flofr.gov/sitePages/documents/OFR-St atute-Review-Report-2022.pdf), p. 21-22 (last visited Jan 4, 2024).
128 S. 517.131(1)(a), F.S. Specifically, a maximum of 20% of all revenues received as assessment fees pursuant to ss.
517.12(9) and (10), F.S., for dealers and investment advisers (or s. 517.1201 for federal covered advisers), and a
maximum of 10% of all revenues received as assessment fees pursuant to ss. 517.12(9) and (10), F.S., for associated
persons must be part of the regular registration fee and must be transferred to the SGF.
129 S. 517.131(2), F.S.
130 S. 517.131, F.S.
131 S. 517.141, F.S.
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Moreover, the Act requires a claimant to wait a minimum of two years after filing a claim with OFR
before a payment determination can be made.132
Effect of the Bill
These sections are substantially reorganized and amended to improve usability and clarity. Additionally,
the term “license” is replaced with “registration” for accuracy and the term “Fund” is replaced with
“Securities Guaranty Fund” for consistency throughout ss. 517.131 and 517.141, F.S.
SECURITIES GUARANTY FUND
The bill:
Specifies that the purpose of the SGF is to provide monetary relief to victims of securities
violations under the Act who are entitled to monetary damages or restitution and cannot recover
the full amount of such monetary damages or restitution from the violator.
Defines the term “final judgment” as also including an arbitration award confirmed by a court of
competent jurisdiction.
Requires that a person meet the following conditions to be eligible for payment from the SGF for
acts that occur on or after October 1, 2024:
o The person holds an unsatisfied final judgment in which a violator was found to have
violated s. 517.07, F.S. or s. 517.301, F.S.
o The person has applied any amounts recovered from the judgment debtor, or from any
other source, to the damages awarded by the court or arbitrator.
o The person is a natural person who was a resident of this state or is a business entity
that was domiciled in this state at the time of the violation giving rise to the claim.
o In making the above changes, the bill eliminates the ability of OFR to waive certain
requirements under the section, and the requirement that the claimant make all
reasonable searches and inquiries to ascertain whether the judgment debtor possesses
real or personal property or other assets subject to being sold or applied in satisfaction
of the judgment.
Prohibits a person from being eligible for payment from the Fund if the person has:
o Participated or assisted in a violation of the Act;
o Attempted to commit or committed a violation of the Act; or
o Profited from a violation of the Act
132 S. 517.141(3), F.S.
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The bill requires that an eligible person, or a receiver on behalf of an eligible person, seeking payment
from the SGF to file a written application. The application must be filed with OFR within 1 year after the
date of the final judgment, the date on which restitution order has been ripe for execution, or the date of
any appellate decision thereon, and the application must contain such information as OFR may require.
Each eligible person or receiver, within 90 days after OFR’s receipt of a complete application, must be
given written notice, personally or by mail, that OFR intends to approve or deny, or has approved or
denied, the application for payment from the SGF. In making this change, the bill eliminates the current
two-year waiting period.
The bill requires an eligible person or receiver to assign all right, title, and interest in the final judgment
or order of restitution, to the extent of such payment to OFR upon receipt of the notice indicating OFR’s
intent to approve an application for payment from the SGF and before any disbursement, rather than
upon receipt of payment. Further, the bill requires OFR to deem an application abandoned if the eligible
person fails to timely complete the application as prescribed by Commission rule.133
PAYMENT FROM THE FUND
The bill increases the amount that an eligible person may recover from the SGF from $10,000 to
$15,000, adds an exception allowing recovery of up to $25,000 if the person is a specified adult.134 The
aggregate limit on claims is also increased from $100,000 to $250,000.
Further, the bill requires:
OFR to submit authorization for payment to the Chief Financial Officer within 30 days after the
approval of an eligible person for payment from the SGF, and allow the Chief Financial Officer’s
designee, to make payments or disbursements from the SGF;
Reimbursements to the SGF be paid to the Department of Financial Services (DFS), rather than
OFR; and
A claimant who knowingly and willfully files (or causes to be filed) an application or any
supporting documentation that contains false, incomplete, or misleading information in any
material aspect forfeits all payments from the SGF. (The bill also specifies that filing such false
documentation is unlawful and a violation of the Act and punishable as provided therein.)
In connection with the above referenced changes, the bill allows DFS, instead of OFR, to institute legal
proceedings to enforce compliance with s. 517.131, F.S., and to recover money owed to the SGF, and
to recover interest, costs, and attorney’s fees in any action brought pursuant to this section in which
DFS prevails. The bill also eliminates the two-year waiting period.
Enforcement by OFR and the Attorney General; Civil Penalties for Violations
Background
When it appears to OFR, whether upon complaint or otherwise, that a person has engaged in any act
constituting a violation of the Act or a rule or order thereunder, OFR may investigate and, if the
evidence is sufficient, may bring an action on behalf of the state against such person. 135
Additionally, OFR may also apply to the court for an order directing the defendant to make restitution of
those sums shown by OFR to have been obtained in violation of the Act. 136 OFR may also petition the
court to impose a civil penalty against the defendant in an amount not to exceed:
133 Office of Financial Regulation, supra note 16, at p. 29.
134 The Act defines “specified adult” as a natural person 65 years of age or older, or a natural person 18 years of age or
older whose ability to perform the normal activities of daily living or to provide for his or her own care or protection is
impaired due to a mental, emotional, sensory, long-term physical, or developmental disability or dysfunction, or brain
damage, or the infirmities of aging. See s. 517.34(1)(b), and s. 415.102(28), F.S.
135 S. 517.191, F.S.
136 S. 517.191(3), F.S.
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$10,000 for a natural person or $25,000 for any other person, or the gross amount of pecuniary
gain to such defendant for each such violation, other than a violation of s. 517.301, F.S.;
Plus $50,000 for a natural person or $250,000 for any other person, or the gross amount of
pecuniary gain to such defendant for each violation of s. 517.301, F.S.137
All civil penalties collected pursuant to the above-referenced statutory guidelines must be deposited
into the Anti-Fraud Trust Fund.138
In addition to the authority granted to OFR, the section also provides that when the Attorney General,
whether upon complaint or otherwise, has reason to believe that a person has engaged or is about to
engage in a practice constituting a violation of ss. 517.275, 517.301, 517.311, or s. 517.312, F.S., the
Attorney General may investigate and bring an action to enforce certain provisions of the Act after
receiving written approval from OFR.139
The Act does not limit the authority of OFR to bring an administrative action against any person that is
the subject of a civil action brought pursuant to the Act or limit the authority of OFR to engage in
investigations or enforcement actions with the Attorney General. 140 However, a person may not be
subject to both a civil penalty described above and an administrative fine under s. 517.221(3), F.S., as
a result of the same facts.141
An enforcement action must be brought within 6 years after the facts giving rise to the cause of action
were discovered or should have been discovered with the exercise of due diligence, but not more than
8 years after the date such violation occurred.142
Effect of the Bill
The bill:
Increases the civil penalty imposable upon a natural person from $10,000 to $20,000;
Allows OFR to recover any costs and attorney fees related to its investigation or enforcement of
the section, which must also be deposited into the Anti-Fraud Trust Fund;
Provides that in the event a specified adult143 is a victim of a violation of the section, twice the
amount of the civil penalty that would otherwise be imposed, which is $50,000 for a natural
person or $250,000 for a business entity;
Establishes joint and several liability for any control person who is found to have violated any
provision of the Act;
Provides that a person who knowingly and recklessly provides substantial assistance to another
person in violation of a provision of the Act is deemed to violate the provision to the same extent
as the person to whom such assistance was provided;
Allows OFR to issue and serve upon a person a cease and desist order if OFR has reason to
believe the person violates any provision of the Act, as well as an emergency cease and desist
order under certain circumstances; and
Grants OFR the authority to impose and collect an administrative fine against any person found
to have violated any provision of the Act, which must also be deposited into the Anti-Fraud Trust
Fund.
Remedies Available in Cases of Unlawful Sale
137 S. 517.191(4), F.S.
138 Id.
139 S. 517.191(5), F.S.
140 S. 517.191(6), F.S.
141 Id.
142 S. 517.191(7), F.S.
143 The Act defines “specified adult” as a natural person 65 years of age or older, or a natural person 18 years of age or
older whose ability to perform the normal activities of daily living or to provide for his or her own care or protection is
impaired due to a mental, emotional, sensory, long-term physical, or developmental disability or dysfunction, or brain
damage, or the infirmities of aging. See s. 517.34(1)(b), and s. 415.102(28), F.S.
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Background
The Act provides that every sale made in violation of either ss. 517.07144 or 517.12(1),145 (3),146 (4),147
(8),148 (10),149 (12),150 (15),151 or (17),152 F.S., may be rescinded at the election of the purchaser, except
a sale made in violation of the provisions relating to a renewal of a branch office notification and a sale
made in violation of the provisions relating to filing a change of address amendment is not subject to
rescission.
Moreover, each person making the sale and every agent of the seller, if the agent has personally
participated or aided in making the sale, is jointly and severally liable to the purchaser in an action for
rescission, if the purchaser still owns the security, or for damages, if the purchaser has sold the
security.153 Additionally, any person purchasing or selling a security in violation of s. 517.301, F.S., 154
and every agent of such person, if the agent has personally participated or aided in making the sale or
purchase, is jointly and severally liable to the person selling the security to or purchasing the security
from such person in an action for rescission, if the plaintiff still owns the security, or for damages, if the
plaintiff has sold the security.155
The Act further provides that:
In an action for rescission:
o A purchaser may recover the consideration paid for the security, plus interest thereon at
the legal rate, less the amount of any income received by the purchaser on the security
upon tender of the security.
o A seller may recover the security upon tender of the consideration paid for the security,
plus interest at the legal rate, less the amount of any income received by the defendant
on the security.156
In an action for damages brought by a purchaser of a security or investment, the plaintiff shall
recover an amount equal to the difference between:
o The consideration paid for the security, plus interest thereon at the legal rate from the
date of purchase; and
o The value of the security at the time it was disposed of by the plaintiff, plus the amount
of any income received on the security by the plaintiff. 157
144 S. 517.07, F.S., relates to viatical settlement investments.
145 S. 517.12(1), F.S., relates to a general prohibition against dealers and associated persons from selling or offering to
sale any securities in or from offices in Florida to persons in Florida unless the person is registered with OFR.
146 S. 517.12(3), F.S., relates to the registration and notice-filings of investment advisers, associated persons of
investment advisers, and federal covered advisers with OFR.
147 S. 517.12(4), F.S., relates to a general prohibition against dealers and investment advisers conducting business from a
branch office in Florida unless the branch office is registered has notice-filed with OFR pursuant to the Act.
148 S. 517.12(8), F.S., relates to a requirement that all dealers comply with the net capital and ratio requirements imposed
pursuant to the 1934 Act.
149 S. 517.12(10), F.S., relates to a general requirement that OFR register an applicant upon a finding that the applicant
has complied with the applicable registration provisions of the Act.
150 S. 517.12(12), F.S., relates to registration procedures when changes in personnel of a partnership or in the principals,
copartners, officers, or directors of a dealer or investment adviser occurs.
151 S. 517.12(15), F.S., relates to a general requirement that every applicant for initial or renewal registration as a
securities dealer and every person so registered must be registered as a broker or dealer with the SEC.
152 S. 517.12(17), F.S., relates to a requirement that every dealer and associated person registered or required to be
registered with OFR must satisfy any continuing education requirements established by rule.
153 S. 517.211(1), F.S.
154 S. 517.301, F.S., relates to fraudulent transactions and the falsification or concealment of facts.
155 S. 517.211(2), F.S.
156 S. 517.211(3), F.S.
157 S. 517.211(4), F.S.
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In an action for damages brought by a seller of a security, the plaintiff shall recover an amount
equal to the difference between:
o The value of the security at the time of the complaint, plus the amount of any income
received by the defendant on the security; and
o The consideration received for the security, plus interest at the legal rate from the date of
sale.158
In any such action, including an appeal, the court shall award reasonable attorneys’ fees to the
prevailing party unless the court finds that doing so would be unjust.159
Effect of the Bill
The bill establishes that, for purposes of any action brought regarding an unlawful sale, a control
person who controls any person found to have violated any provision specified in s. 517.211(1), F.S., is
also jointly and severally liable with such controlled person, unless the control person can establish by
a preponderance of the evidence that they acted in good faith and did not induce the act that
constituted the violation.160
Fraudulent Transactions; Falsification or Concealment of Facts; Boiler Rooms
Background
The Act defines the term “investment” for purposes of ss. 517.311161 and 517.312, F.S.,162 as any
commitment of money or property principally induced by a representation that an economic benefit may
be derived from such commitment, except that the term does not include a commitment of money or
property for:
The purchase of a business opportunity, business enterprise, or real property through a person
licensed under ch. 475, F.S.,163 or registered under former ch. 498, F.S.;164 or
The purchase of tangible personal property through a person not engaged in telephone
solicitation, where said property is offered and sold in accordance with the following conditions:
o There are no specific representations or guarantees made by the offeror or seller as to
the economic benefit to be derived from the purchase;
o The tangible property is delivered to the purchaser within 30 days after sale, except that
such 30-day period may be extended by the office if market conditions so warrant; and
o The seller has offered the purchaser a full refund policy in writing, exercisable by the
purchaser within 10 days of the date of delivery of such tangible personal property,
except that the amount of such refund may not exceed the bid price in effect at the time
the property is returned to the seller.
It is unlawful and a violation of the Act for a person, in connection with the rendering of any investment
advice or in connection with the offer, sale, or purchase of any security, including any security
exempted under the provisions of the Act and including any security sold in a transaction exempted
under the Act, directly or indirectly:
To employ any device, scheme, or artifice to defraud;
To obtain money or property by means of any untrue statement of a material fact or any
omission to of a material fact necessary to make the statements made not misleading; or
To engage in any transaction, practice, or course of business which operates or would operate
as a fraud or deceit upon a person.
158 S. 517.211(5), F.S.
159 S. 517.211(6), F.S.
160 Office of Financial Regulation, supra note 16, at p. 31.
161 S. 517.311, F.S., relates to false representations, deceptive words, and enforcement.
162 S. 517.312, F.S., relates to securities, investments, boiler rooms; prohibited practices; and remedies.
163 Chapter 475, F.S., relates to, among other things, the licensure and regulation of real estate brokers.
164 The former chapter 498, F.S., related to, among other things, the licensure and regulation of land sales practices.
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To publish or circulate any communication which describes such security for a consideration
received or to be received directly or indirectly from an issuer, underwriter, or dealer, or from an
agent or employee of such individual, without fully disclosing the receipt of such consideration
and the amount of the consideration.
To knowingly and willfully falsify, conceal, or cover up, by any trick, scheme, or device, a
material fact, make any false or fraudulent statement or representation, or make or use any
false document, knowing the same to contain any false or fraudulent statement.165
Further, it is also unlawful and a violation of the Act for any person to directly or indirectly manage,
supervise, control, or own, either alone or in association with others, any boiler room 166 in Florida which
sells or offers for sale any security or investment in violation of the above described prohibitions. 167
Effect of the Bill
The bill amends the definition of “investment” for purposes of this provision of the Act to read as follows:
any commitment of money or property principally induced by a representation that an economic benefit
may be derived from such commitment, except that the term does not include a commitment of money
or property for the purchase of a business opportunity, business enterprise, or real property through a
person licensed under ch. 475, F.S.,168 or registered under former ch. 498, F.S.169
The bill also consolidates the current provisions of the Act relating to false representations, boiler
rooms, and prohibited practices into a single provision. The consolidated version of these provisions
does not eliminate any of the liability provisions existing in current law.
Miscellaneous
Pursuant to the changes made by the bill, the bill relocates the following sections of the Act and, where
applicable, consolidates the provisions elsewhere:
S. 517.221, F.S., relating to cease and desist orders.
S. 517.241, F.S., relating to remedies.
S. 517.311, F.S., relating to false representations; deceptive words; enforcement.
S. 517.312, F.S., relating to securities, investments, boiler rooms; prohibited practices;
remedies.
Overall, the bill modifies various provisions of the Act to incorporate recent amendments to federal
securities laws since their passage and up to the effective date of the bill.
B. SECTION DIRECTORY:
Section 1. Amends s. 517.021, F.S., relating to definitions.
Section 2. Amends s. 517.051, F.S., relating to exempt securities.
Section 3. Amends s. 517.061, F.S., relating to exempt transactions.
Section 4. Amends s. 617.0611, F.S., relating to intrastate crowdfunding.
Section 5. Creates s. 517.0612, F.S., relating to Florida Invest Local Exemption.
Section 6. Creates s. 517.0613, F.S., relating to failure to comply with a securities registration
exemption.
Section 7. Creates s. 517.0614, F.S., relating to integration of offerings.
Section 8. Creates s. 517.0615, F.S., relating to solicitations of interest.
165 S. 517.301, F.S.
166 The Financial Industry Regulatory Authority describes “boiler rooms” as follows: “Typically run as outbound call
centers, boiler rooms are characterized by high pressure sales pitches from promoters targeting retail investors with highly
speculative—oftentimes fraudulent—investments.” See FINRA, Boiler Rooms: An Old Stock Scam Gets a Technology
Mak eover, https://www.finra.org/investors/insights/boiler-rooms-an-old-stock-gets-a-t echnology-makeover (last visited
Jan. 8, 2024).
167 S. 517.312, F.S.
168 Chapter 475, F.S., relates to, among other things, the licensure and regulation of real estate brokers.
169 The former chapter 498, F.S., related to, among other things, the licensure and regulation of land sales practices.
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Section 9. Creates s. 517.0616, F.S., relating to disqualification.
Section 10. Amends s. 517.081, F.S., relating to registration procedure.
Section 11. Amends s. 517.101, F.S., relating to consent to service.
Section 12. Amends s. 517.131, F.S., relating to Securities Guaranty Fund.
Section 13. Amends s. 517.141, F.S., relating to payment from the fund.
Section 14. Amends s. 517.191, F.S., relating to injunction to restrain violations; civil penalties;
enforcement by Attorney General.
Section 15. Amends s. 517.211, F.S., relating to remedies available in cases of unlawful sale.
Section 16. Repeals s. 517.221, F.S., relating to cease and desist orders.
Section 17. Repeals s. 517.241, F.S., relating to remedies.
Section 18. Amends s. 517.301, F.S., relating to fraudulent transactions; falsification or concealment
of facts.
Section 19. Repeals s. 517.311, F.S., relating to false representations; deceptive words;
enforcement.
Section 20. Repeals s. 517.312, F.S., relating to securities, investments, boiler rooms; prohibited
practices; remedies.
Section 21. Amends s. 517.072, F.S., relating to viatical settlement investments.
Section 22. Amends s. 517.12, F.S., relating to registration of dealers, associated persons,
intermediaries, and investment advisers.
Section 23. Amends s. 517.1202, F.S., relating to notice-filing requirements for branch offices.
Section 24. Amends s. 517.302, F.S., relating to criminal penalties; alternative fine; Anti-Fraud Trust
Fund; time limitation for criminal prosecution.
Section 25. Provides an effective date of October 1, 2024.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
The bill has an indeterminable positive impact on state government revenues because the bill
increases penalties that can be assessed against certain violators of the Act.
2. Expenditures:
The bill requires issuers conducting an offering under the accredited investor exemption to file a
notice of transaction, a consent to service of process, and a copy of the general announcement with
OFR. OFR will then review the materials filed. The bill does not provide additional funds for OFR
personnel to conduct such review. Although it is unknown how many filings OFR will receive, OFR
does not anticipate needing additional personnel in fiscal year 2024/2025 to conduct such
reviews.170
The bill also requires issuers conducting an offering under the Florida Invest Local Exemption to file
a notice of the offering and a copy of the disclosure document with OFR. OFR will then review the
materials filed. The bill does not provide additional funds for OFR personnel to conduct such review.
Although it is unknown how many filings OFR will receive, OFR does not anticipate needing
additional personnel in fiscal year 2024/2025 to conduct such reviews. 171
170 Office of Financial Regulation, supra note 16, at p. 35.
171 Office of Financial Regulation, supra note 16, at p. 33.
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B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill likely has a minimal positive impact on the private sector, as the bill modernizes Florida’s
securities laws to align with recent development in federal securities laws and securities laws in other
states.
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:
Not applicable.
B. RULE-MAKING AUTHORITY:
The table below illustrates the proposed sections of the bill that create rule-making authority.172
Section Rule-Making Authority
S. 517.061(11) Allows the Commission to prescribe a notice of transaction form and
procedures for filing it for purposes of the accredited investor exemption.
S. 517.061(16)(b)1. Allows the Commission to recognize a clearinghouse by rule.
S. 517.061(20) Allows the Commission to designate foreign jurisdictions and foreign
securities exchanges.
S. 517.0612(2)(h) Allows the Commission to prescribe a notice of offering form and
procedures for filing it for purposes of the Florida Invest Local Exemption
S. 517.131(5) Allows the Commission to prescribe an application form and procedures
for filing it for purposes of the Securities Guaranty Fund
S. 517.131(7) Allows the Commission to prescribe an assignment form and procedures
for filing it for purposes of the Securities Guaranty Fund
S. 517.131(8) Allows the Commission to specify a time period for completing an
application for purposes of the Securities Guaranty Fund
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
172 Office of Financial Regulation, supra note 16, at p. 33.
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IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
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1 A bill to be entitled
2 An act relating to securities; amending s. 517.021,
3 F.S.; revising definitions; defining the terms "angel
4 investor group" and "business entity"; amending s.
5 517.051, F.S.; revising the list of securities that
6 are exempt from registration requirements under
7 certain provisions; amending s. 517.061, F.S.;
8 revising the list of transactions that are exempt from
9 registration requirements under certain provisions;
10 amending s. 517.0611, F.S.; revising a short title;
11 revising provisions relating to a certain registration
12 exemption for certain securities transactions;
13 updating the federal laws or regulations with which
14 the offer or sale of securities must be in compliance;
15 revising requirements for issuers relating to the
16 registration exemption; revising requirements for the
17 notice of offering that must be filed by the issuer
18 under certain circumstances; specifying the timeframe
19 within which issuers may amend such notice after any
20 material information contained in the notice becomes
21 inaccurate; authorizing the issuer to engage in
22 general advertising and general solicitation under
23 certain circumstances; specifying requirements for
24 such advertising and solicitation; requiring the
25 issuer to provide a disclosure statement to certain
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26 entities and persons within a specified timeframe;
27 revising requirements for such statement; deleting
28 requirements for the escrow agreement; conforming
29 provisions to changes made by the act; revising the
30 amount that may be received for sales of certain
31 securities; providing a limit on securities that may
32 be sold by an issuer to an investor; deleting the
33 requirement that an issuer file and provide a certain
34 annual report; conforming cross-references; revising
35 the duties of intermediaries under certain
36 circumstances; providing obligations of issuers under
37 certain circumstances; providing that certain sales
38 are voidable within a specified timeframe; providing
39 requirements for purchasers' notices to issuers to
40 void purchases; deleting provisions relating to funds
41 received from investors; creating s. 517.0612, F.S.;
42 providing a short title; providing applicability;
43 requiring that offers and sales of securities be in
44 accordance with certain federal laws and rules;
45 specifying certain requirements for issuers relating
46 to the registration exemption; specifying a limitation
47 on the amount of cash and other consideration that may
48 be received from sales of certain securities made
49 within a specified timeframe; prohibiting an issuer
50 from accepting more than a specified amount from a
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51 single purchaser under certain circumstances;
52 authorizing the issuer to engage in general
53 advertising and general solicitation of the offering
54 under certain circumstances; specifying that a certain
55 prohibition is enforceable under ch. 517, F.S.;
56 requiring that the purchaser receive a disclosure
57 statement within a specified timeframe; specifying the
58 requirements for such statement; requiring certain
59 funds to be deposited into certain bank and depository
60 institutions; prohibiting the issuer from withdrawing
61 any amount of the offering proceeds until the target
62 offering amount has been received; requiring the
63 issuer to file a notice of the offering in a certain
64 format within a specified timeframe; requiring the
65 issuer to file an amended notice within a specified
66 timeframe under certain circumstances; prohibiting
67 agents of issuers from engaging in certain acts under
68 certain circumstances; providing that sales made under
69 the exemption are voidable within a specified
70 timeframe; providing requirements for purchasers'
71 notices to issuers to void purchases; creating s.
72 517.0613, F.S.; providing construction; providing that
73 registration exemptions under certain provisions are
74 not available to issuers for certain transactions
75 under specified circumstances; providing registration
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76 requirements; creating s. 517.0614, F.S.; specifying
77 criteria for determining integration of offerings for
78 the purpose of registration or qualifying for a
79 registration exemption; specifying certain
80 requirements for the integration of offerings for an
81 exempt offering for which general solicitation is
82 prohibited; specifying certain requirements for the
83 integration of offerings for two or more exempt
84 offerings that allow general solicitation; specifying
85 the circumstances under which integration analysis is
86 not required; creating s. 517.0615, F.S.; specifying
87 that certain communications are not deemed to
88 constitute general solicitation or general advertising
89 under specified circumstances; creating s. 517.0616,
90 F.S.; providing that registration exemptions under
91 certain provisions are not available to certain
92 issuers under a specified circumstance; amending s.
93 517.081, F.S.; revising the duties and authority of
94 the Financial Services Commission; authorizing the
95 commission to establish certain criteria relating to
96 the issuance of certain securities, trusts, and
97 investments; authorizing the commission to prescribe
98 certain forms and establish procedures for depositing
99 fees and filing documents and requirements and
100 standards relating to prospectuses, advertisements,
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101 and other sales literature; revising the list of
102 issuers that are ineligible to submit simplified
103 offering circulars; deleting provisions that require
104 issuers to provide certain documents to the Office of
105 Financial Regulation under certain circumstances;
106 revising the requirements that must be met before the
107 office must record the registration of a security;
108 amending s. 517.101, F.S.; revising requirements for
109 written consent to service in certain suits,
110 proceedings, and actions; amending s. 517.131, F.S.;
111 defining the term "final judgment"; specifying the
112 purpose of the Securities Guaranty Fund; making
113 technical changes; revising eligibility for payment
114 from the fund; requiring eligible persons or receivers
115 seeking payment from the fund to file a certain
116 application with the office on a certain form;
117 authorizing the commission to adopt rules regarding
118 electronic filing of such application; specifying the
119 timeframe within which certain eligible persons or
120 receivers must file such application; providing
121 requirements for such applications; requiring the
122 office to approve applications for payment under
123 certain circumstances and to provide applicants with
124 certain notices within a specified timeframe;
125 requiring eligible persons or receivers to assign to
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126 the office all rights, titles, and interests in final
127 judgments and orders of restitution equal to a
128 specified amount under certain circumstances;
129 requiring the office to deem an application for
130 payment abandoned under certain circumstances;
131 requiring that the time period to complete
132 applications be tolled under certain circumstances;
133 deleting provisions relating to specified notices to
134 the office and to rulemaking authority; amending s.
135 517.141, F.S.; defining terms; revising the Securities
136 Guaranty Fund disbursement amounts to which eligible
137 persons are entitled; revising provisions regarding
138 payment of aggregate claims; providing for the
139 satisfaction of claims in the event of an insufficient
140 balance in the fund; requiring payments and
141 disbursements from the Securities Guaranty Fund to be
142 made by the Chief Financial Officer or his or her
143 authorized designee, upon authorization by the office;
144 requiring such authorization to be submitted within a
145 certain timeframe; deleting provisions regarding
146 requirements for payment of claims; conforming
147 provisions to changes made by the act; specifying the
148 circumstances under which a claimant must reimburse
149 the fund for payments received from the fund;
150 providing penalties; authorizing the Department of
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151 Financial Services, rather than the office, to
152 institute legal proceedings for certain compliance
153 enforcement and to recover certain interests, costs,
154 and fees; amending s. 517.191, F.S.; deleting an
155 obsolete term; revising the civil penalty amounts for
156 certain violations; authorizing the office to recover
157 certain costs and attorney fees; requiring that moneys
158 recovered be deposited in a specified trust fund;
159 specifying the liability of control persons; providing
160 an exception; specifying circumstances under which
161 certain persons are deemed to have violated ch. 517,
162 F.S.; authorizing the office to issue and serve cease
163 and desist orders and emergency cease and desist
164 orders under certain circumstances; authorizing the
165 office to impose and collect administrative fines for
166 certain violations; specifying the disposition of such
167 fines; authorizing the office to bar applications or
168 notifications for licenses and registrations under
169 certain circumstances; conforming cross-references;
170 providing construction; specifying jurisdiction of the
171 courts relating to the sale or offer of certain
172 securities; making technical changes; amending s.
173 517.211, F.S.; providing for joint and several
174 liability of control persons in certain circumstances
175 for the purposes of specified actions; specifying the
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176 date on which certain interest begins accruing in an
177 action for rescission; providing construction;
178 specifying that certain civil remedies extend to
179 purchasers or sellers of securities; making technical
180 changes; repealing s. 517.221, F.S., relating to cease
181 and desist orders; repealing s. 517.241, F.S.,
182 relating to remedies; amending s. 517.301, F.S.;
183 revising the circumstances under which certain
184 activities are considered unlawful and violations of
185 law; conforming provisions to changes made by the act;
186 revising the definition of the term "investment";
187 specifying that certain misrepresentations by persons
188 issuing or selling securities are unlawful; specifying
189 that certain misrepresentations by persons registered
190 or required to be registered under certain provisions
191 or subject to certain requirements are unlawful;
192 specifying that obtaining money or property in
193 connection with the offer or sale of an investment is
194 unlawful under certain conditions; providing
195 construction; requiring disclaimers for certain
196 statements; making technical changes; repealing s.
197 517.311, F.S., relating to false representations,
198 deceptive words, and enforcement; repealing s.
199 517.312, F.S., relating to securities, investments,
200 and boiler rooms, prohibited practices, and remedies;
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201 amending ss. 517.072 and 517.12, F.S.; conforming
202 cross-references and making technical changes;
203 amending ss. 517.1201 and 517.1202, F.S.; conforming
204 cross-references; amending s. 517.302, F.S.;
205 conforming a provision to changes made by the act and
206 making a technical change; providing an effective
207 date.
208
209 Be It Enacted by the Legislature of the State of Florida:
210
211 Section 1. Present subsections (3), (4), and (5) and
212 subsections (6) through (25) of section 517.021, Florida
213 Statutes, are redesignated as subsections (4), (5), and (6) and
214 subsections (8) through (27), respectively, new subsections (3)
215 and (7) are added to that section, and subsection (1) and
216 present subsections (4), (8), (9), and (14) of that section are
217 amended, to read:
218 517.021 Definitions.—When used in this chapter, unless the
219 context otherwise indicates, the following terms have the
220 following respective meanings:
221 (1) "Accredited investor" shall be defined by rule of the
222 commission in accordance with Securities and Exchange Commission
223 Rule 501, 17 C.F.R. s. 230.501, as amended.
224 (3) "Angel investor group" means a group of accredited
225 investors who hold regular meetings and have defined processes
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226 and procedures for making investment decisions, individually or
227 among the membership of the group, and who are not associated
228 persons, affiliates, or agents of a dealer or investment
229 adviser.
230 (5)(4) "Boiler room" means an enterprise in which two or
231 more persons in a common scheme or enterprise solicit potential
232 investors through telephone calls, e-mail, text messages, social
233 media, chat rooms, or other electronic means engage in telephone
234 communications with members of the public using two or more
235 telephones at one location, or at more than one location in a
236 common scheme or enterprise.
237 (7) "Business entity" means any corporation, partnership,
238 limited partnership, limited liability company, proprietorship,
239 firm, enterprise, franchise, association, self-employed
240 individual, or trust, which may or may not be fictitiously
241 named, doing business in this state.
242 (10)(a)(8) "Dealer" includes, unless otherwise specified,
243 a person, other than an associated person of a dealer, that
244 engages, for all or part of the person's time, directly or
245 indirectly, as agent or principal in the business of offering,
246 buying, selling, or otherwise dealing or trading in securities
247 issued by another person.
248 (b) The term "dealer" does not include any of the
249 following:
250 1.(a) A licensed practicing attorney who renders or
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251 performs any such services in connection with the regular
252 practice of the attorney's profession.
253 2.(b) A bank authorized to do business in this state,
254 except nonbank subsidiaries of a bank.
255 3.(c) A trust company having trust powers that it is
256 authorized to exercise in this state, which renders or performs
257 services in a fiduciary capacity incidental to the exercise of
258 its trust powers.
259 4.(d) A wholesaler selling exclusively to dealers.
260 5.(e) A person buying and selling for the person's own
261 account exclusively through a registered dealer or stock
262 exchange.
263 6.(f) An issuer.
264 7.(g) A natural person representing an issuer in the
265 purchase, sale, or distribution of the issuer's own securities
266 if such person:
267 a.1. Is an officer, a director, a limited liability
268 company manager or managing member, or a bona fide employee of
269 the issuer;
270 b.2. Has not participated in the distribution or sale of
271 securities for any issuer for which such person was, within the
272 preceding 12 months, an officer, a director, a limited liability
273 company manager or managing member, or a bona fide employee;
274 c.3. Primarily performs, or is intended to perform at the
275 end of the distribution, substantial duties for, or on behalf
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276 of, the issuer other than in connection with transactions in
277 securities; and
278 d.4. Does not receive a commission, compensation, or other
279 consideration for the completed sale of the issuer's securities
280 apart from the compensation received for regular du ties to the
281 issuer.
282 (11)(9) "Federal covered adviser" means a person that is
283 registered or required to be registered under s. 203 of the
284 Investment Advisers Act of 1940, as amended. The term does not
285 include any person that is excluded from the definition of
286 investment adviser under subparagraphs (16)(b)1.-7. and 9
287 (14)(b)1.-8.
288 (16)(a)(14)(a) "Investment adviser" means a person, other
289 than an associated person of an investment adviser or a federal
290 covered adviser, that receives compensation, directly or
291 indirectly, and engages for all or part of the person's time,
292 directly or indirectly, or through publications or writings, in
293 the business of advising others as to the value of securities or
294 as to the advisability of investments in, purchasing of, or
295 selling of securities.
296 (b) The term does not include any of the following:
297 1. A dealer or an associated person of a dealer whose
298 performance of services in paragraph (a) is solely incidental to
299 the conduct of the dealer's or associated person's business as a
300 dealer and who does not receive special compensation for those
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301 services.
302 2. A licensed practicing attorney or certified public
303 accountant whose performance of such services is solely
304 incidental to the practice of the attorney's or accountant's
305 profession.
306 3. A bank authorized to do business in this state.
307 4. A bank holding company as defined in the Bank Holding
308 Company Act of 1956, as amended, authorized to do business in
309 this state.
310 5. A trust company having trust powers, as defined in s.
311 658.12, which it is authorized to exercise in this state, which
312 trust company renders or performs investment advisory services
313 in a fiduciary capacity incidental to the exercise of its trust
314 powers.
315 6. A person that renders investment advice exclusively to
316 insurance or investment companies.
317 7. A person that, during the preceding 12 months, has
318 fewer than six clients who are residents of this state. As used
319 in this subparagraph, the term "client" has the same meaning as
320 provided in Securities and Exchange Commission Rule 275.222-2,
321 17 C.F.R. s. 275.222-2, as amended does not hold itself out to
322 the general public as an investment adviser and has no more than
323 15 clients within 12 consecutive months in this state .
324 8. A person whose transactions in this state are limited
325 to those transactions described in s. 222(d) of the Investment
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326 Advisers Act of 1940, as amended. Those clients listed in
327 subparagraph 6. may not be included when determining the number
328 of clients of an investment adviser for purposes of s. 222(d) of
329 the Investment Advisers Act of 1940, as amended.
330 9. A federal covered adviser.
331 9. The United States, a state, or any political
332 subdivision of a state, or any agency, authority, or
333 instrumentality of any such entity; a business entity that is
334 wholly owned directly or indirectly by such a governmental
335 entity; or any officer, agent, or employee of any such
336 governmental or business entity who is acting within the scope
337 of his or her official duties.
338 Section 2. Present subsections (9) and (10) of section
339 517.051, Florida Statutes, are redesignated as subsections (10)
340 and (11), respectively, and amended, a new subsection (9) is
341 added to that section, and subsections (1), (3), (4), and (8) of
342 that section are amended, to read:
343 517.051 Exempt securities.—The exemptions provided herein
344 from the registration requirements of s. 517.07 are self -
345 executing and do not require any filing with the office prior to
346 claiming such exemption. Any person who claims entitlement to
347 any of these exemptions bears the burden of proving such
348 entitlement in any proceeding brought under this chapter. The
349 registration provisions of s. 517.07 do not apply to any of the
350 following securities:
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351 (1) A security issued or guaranteed by the United States
352 or any territory or insular possession of the United States, by
353 the District of Columbia, or by any state of the United States
354 or by any political subdivision or agency or other
355 instrumentality thereof.; provided that
356 (a) Except as provided in paragraph (b), a no person may
357 not shall directly or indirectly offer or sell securities, other
358 than general obligation bonds, described under this subsection
359 if the issuer or guarantor is in default or has been in default
360 any time after December 31, 1975, as to principal or interest:
361 1.(a) With respect to an obligation issued by the issuer
362 or successor of the issuer; or
363 2.(b) With respect to an obligation guaranteed by the
364 guarantor or successor of the guarantor,
365
366 except by an offering circular containing a full and fair
367 disclosure as prescribed by rule of the commission.
368 (b) Paragraph (a) does not apply to a security that is an
369 industrial or commercial development bond unless payments are
370 made or unconditionally guaranteed by a person whose securities
371 are exempt from registration under s. 18(b)(1) of the Securities
372 Act of 1933, as amended.
373 (3) A security issued by and which represents or will
374 represent an interest in or a direct obligation of or be
375 guaranteed by any of the following:
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376 (a) An international bank of which the United States is a
377 member.
378 (b) A bank organized under the laws of the United States.
379 (c) A member bank of the Federal Reserve System.
380 (d) A depository institution, when a substantial portion
381 of its business consists of or will consist of receiving
382 deposits or share accounts that are insured to the maximum
383 amount authorized by statute by the Federal Deposit Insurance
384 Corporation or the National Credit Union Share Insurance Fund or
385 guaranteed by:
386 (a) A national bank, a federally chartered savings and
387 loan association, or a federally chartered savings bank, or the
388 initial subscription for equity securities in such national
389 bank, federally chartered savings and loan association, or
390 federally chartered savings bank;
391 (b) Any federal land bank, joint-stock land bank, or
392 national farm loan association under the provisions of the
393 Federal Farm Loan Act of July 17, 1916;
394 (c) An international bank of which the United States is a
395 member; or
396 (d) A corporation created and acting as an instrumentality
397 of the government of the United States.
398 (4) A security issued or guaranteed, as to principal,
399 interest, or dividend, by a business entity corporation owning
400 or operating a railroad, another common carrier, or any other
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401 public service utility; provided that such business entity
402 corporation is subject to regulation or supervision whether as
403 to its rates and charges or as to the issue of its own
404 securities by a public commission, board, or officer of the
405 government of the United States, of any state, territory, or
406 insular possession of the United States, of any municipality
407 located therein, of the District of Columbia, or of the Dominion
408 of Canada or of any province thereof; also equipment securities
409 based on chattel mortgages, leases, or agreements for
410 conditional sale of cars, motive power, or other rolling stock
411 mortgaged, leased, or sold to or furnished for the use of or
412 upon such railroad or other public service utility corporation
413 or where the ownership or title of such equipment is pledged or
414 retained in accordance with the provisions of the laws of the
415 United States or of any state or of the Dominion of Canada to
416 secure the payment of such equipment securities; and also bonds,
417 notes, or other evidences of indebtedness issued by a holding
418 corporation and secured by collateral consisting of any
419 securities hereinabove described; provided, further, that the
420 collateral securities equal in fair value at least 125 percent
421 of the par value of the bonds, notes, or other evidences of
422 indebtedness so secured.
423 (8) Shares or other equity interests of a business entity
424 which represent ownership or entitle the holders of such shares
425 or other equity interests to possession and occupancy of
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426 specific apartment units in property owned by such business
427 entity and organized and operated on a cooperative basis, solely
428 for residential purposes A note, draft, bill of exchange, or
429 banker's acceptance having a unit amount of $25,000 or more
430 which arises out of a current transaction, or the proceeds of
431 which have been or are to be used for current transactions, and
432 which has a maturity period at the time of issuance not
433 exceeding 9 months exclusive of days of grace, or any renewal
434 thereof which has a maturity period likewise limited. This
435 subsection applies only to prime quality negotiable commercial
436 paper of a type not ordinarily purchased by the general public;
437 that is, paper issued to facilitate well-recognized types of
438 current operational business requirements and of a type eligible
439 for discounting by Federal Reserve banks.
440 (9) A member's or owner's interest in, or a retention
441 certificate or like security given in lieu of a cash patronage
442 dividend issued by, a not-for-profit membership entity operated
443 either as a cooperative under the cooperative laws of a state or
444 in accordance with the cooperative provisions of subchapter T of
445 chapter 1 of subtitle A of the United States Internal Revenue
446 Code, as amended, but not a member's or owner's interest,
447 retention certificate, or like security sold or transferred to a
448 person other than:
449 (a) A bona fide member of the not-for-profit membership
450 entity; or
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451 (b) A person who becomes a bona fide member of the not -
452 for-profit membership entity at the time of or in connection
453 with the sale or transfer.
454 (10)(9) A security issued by a business entity corporation
455 organized and operated exclusively for religious, educational,
456 benevolent, fraternal, charitable, or reformatory purposes and
457 not for pecuniary profit, no part of the net earnings of which
458 corporation inures to the benefit of any private stockholder or
459 individual, or any security of a fund that is excluded from the
460 definition of an investment company under s. 3(c)(10)(B) of the
461 Investment Company Act of 1940, as amended; provided that a no
462 person may not shall directly or indirectly offer or sell
463 securities under this subsection except by an offering circular
464 containing full and fair disclosure, as prescribed by the rules
465 of the commission, of all material information, including, but
466 not limited to, a description of the securities offered and
467 terms of the offering, a description of the nature of the
468 issuer's business, a statement of the purpose of the offering
469 and the intended application by the issuer of the proceeds
470 thereof, and financial statements of the issuer prepared in
471 conformance with United States generally accepted accounting
472 principles. Section 6(c) of the Philanthropy Protection Act of
473 1995, Pub. L. No. 104-62, does shall not preempt any provision
474 of this chapter.
475 (11)(10) Any insurance or endowment policy or annuity
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476 contract or optional annuity contract or self-insurance
477 agreement issued by a business entity corporation, insurance
478 company, reciprocal insurer, or risk retention group subject to
479 the supervision of the insurance regulator or bank regulator, or
480 any agency or officer performing like functions, of any state or
481 territory of the United States or the District of Columbia.
482 Section 3. Section 517.061, Florida Statutes, is amended
483 to read:
484 (Substantial rewording of section. See
485 s. 517.061, F.S., for present text.)
486 517.061 Exempt transactions.—Except as otherwise provided
487 in subsection (11), the exemptions provided herein from the
488 registration requirements of s. 517.07 are self-executing and do
489 not require any filing with the office before being claimed. Any
490 person who claims entitlement to an exemption under this section
491 bears the burden of proving such entitlement in any proceeding
492 brought under this chapter. The registration provisions of s.
493 517.07 do not apply to any of the following transactions;
494 however, such transactions are subject to s. 517.301:
495 (1)(a) Any judicial sale or any sale by an executor, an
496 administrator, a guardian, or a conservator; any sale by a
497 receiver or trustee in insolvency or bankruptcy; any sale by an
498 assignee as defined in s. 727.103 with respect to an assignment
499 as defined in that section; or any transaction incident to a
500 judicially approved reorganization in which a security is issued
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501 in exchange for one or more outstanding securities, claims, or
502 property interests.
503 (b) Except for a security exchanged in a case brought
504 under Title 11 of the United States Code, a security that is
505 issued in exchange for one or more bona fide outstanding
506 securities, claims, or property interests, or partly in such
507 exchange and partly for cash, if the terms and conditions of
508 such issuance and exchange are approved:
509 1. By a court, an official or agency of the United States,
510 a banking or insurance commission of a state or territory of the
511 United States, or another governmental authority expressly
512 authorized by law to grant such approval.
513 2. After a hearing upon the fairness of such terms and
514 conditions and at which all persons to whom issuance of
515 securities in such exchange is proposed have the right to
516 appear.
517 (2) The issuance of notes or bonds in connection with the
518 acquisition of real property or renewals thereof, if such notes
519 or bonds are issued to the sellers of, and are secured by all or
520 part of, the real property so acquired.
521 (3) A transaction involving a stock dividend or equivalent
522 equity distribution, regardless of whether the business entity
523 distributing the dividend or equivalent equity distribution is
524 the issuer, if nothing of value is given by stockholders or
525 other equity holders for the dividend or equivalent equity
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526 distribution other than the surrender of a right to a cash or
527 property dividend in the event that each stockholder or other
528 equity holder may elect to take the dividend or equivalent
529 equity distribution in cash, property, or stock.
530 (4) A transaction under an offer to existing security
531 holders of the issuer, including persons that at the date of the
532 transaction are holders of convertible securities, options, or
533 warrants, if a commission or other remuneration is not paid or
534 given, directly or indirectly, for soliciting a security holder
535 in this state.
536 (5) The issuance of securities to such equity security
537 holders or creditors of a business entity in the process of a
538 reorganization of such business entity, made in good faith and
539 not for the purpose of evading this chapter, either in exchange
540 for the securities of such equity security holders or claims of
541 such creditors or partly for cash and partly in exchange for the
542 securities or claims of such equity security holders or
543 creditors.
544 (6) A transaction involving the distribution of the
545 securities of an issuer to the security holders of another
546 person in connection with a merger, consolidation, exchange of
547 securities, sale of assets, or other reorganization to which the
548 issuer, or the issuer's parent or subsidiary, and the other
549 person, or the person's parent or subsidiary, are parties.
550 (7) The offer or sale of securities, solely in connection
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551 with the transfer of ownership of an eligible privately held
552 company, through a merger and acquisition broker in accordance
553 with s. 517.12(21).
554 (8) The offer or sale of securities under a bona fide
555 employee stock purchase, savings, option, profit-sharing,
556 pension, or similar employee benefit plan, including any
557 securities, plan interests, and guarantees issued under a
558 compensatory benefit plan or compensation contract, contained in
559 a record, established by the issuer, its parents, its majority-
560 owned subsidiaries, or the majority-owned subsidiaries of the
561 issuer's parent for the participation of their employees. This
562 includes offers or sales of such securities to all of the
563 following persons:
564 (a) Directors, managers, managing members, general
565 partners, officers, consultants, and advisors.
566 (b) If the issuer is a business trust, trustees and former
567 trustees.
568 (c) Family members who acquire such securities from
569 persons described in this section through gifts or domestic
570 relations orders.
571 (d) Former employees, directors, managers, managing
572 members, general partners, officers, consultants, and advisors,
573 if those individuals were employed by or providing services to
574 the issuer when the securities were offered.
575 (e) Insurance agents who are exclusive insurance agents of
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576 the issuer, or of the issuer's parents or subsidiaries, or who
577 derive more than 50 percent of their annual income from such
578 persons.
579 (9) The offer or sale of securities to a bank, trust
580 company, savings institution, insurance company, dealer,
581 investment company as defined in the Investment Company Act of
582 1940, 15 U.S.C. s. 80a-3, as amended, pension or profit-sharing
583 trust, or qualified institutional buyer, whether any of such
584 entities is acting in its individual or fiduciary capacity.
585 (10)(a) The offer or sale, by or on behalf of an issuer,
586 of its own securities if the offer or sale is part of an
587 offering made in accordance with all of the following
588 conditions:
589 1. There are no more than 35 purchasers, or the issuer
590 reasonably believes that there are no more than 35 purchasers,
591 of the securities of the issuer in this state during an offering
592 made in reliance upon this subsection or, if such offering
593 continues for a period in excess of 12 months, in any
594 consecutive 12-month period.
595 2. Neither the issuer nor any person acting on behalf of
596 the issuer offers or sells securities pursuant to this
597 subsection by means of any form of general solicitation or
598 general advertising in this state.
599 3. Before the sale, each purchaser or the purchaser's
600 representative, if any, is provided with, or given reasonable
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601 access to, full and fair disclosure of all material information,
602 which must include written notification of a purchaser's right
603 to void the sale under subparagraph 4.
604 4. Any sale made pursuant to this subsection is voidable
605 by the purchaser within 3 days after the first tender of
606 consideration is made by such purchaser to the issuer by
607 notifying the issuer that the purchaser expressly voids the
608 purchase. The purchaser's notice to the issuer must be sent by
609 e-mail to the issuer's e-mail address set forth in the
610 disclosure document provided to the purchaser or purchaser's
611 representative or by hand delivery, courier service, or other
612 method by which written proof of delivery to the issuer of the
613 purchaser's election to rescind the purchase is evidenced.
614 (b) The following purchasers are excluded from the
615 calculation of the number of purchasers under subparagraph
616 (a)1.:
617 1. Any spouse or child of the purchaser or any related
618 family member who has the same principal residence as such
619 purchaser.
620 2. A trust or estate in which a purchaser, any of the
621 persons related to such purchaser specified in subparagraph 1.,
622 and any business entity specified in subparagraph 3.
623 collectively have more than 50 percent of the beneficial
624 interest, excluding any contingent interest.
625 3. A business entity in which a purchaser, any of the
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626 persons related to such purchaser specified in subparagraph 1.,
627 and any trust or estate specified in subparagraph 2.
628 collectively are beneficial owners of more than 50 percent of
629 the equity securities or equity interest.
630 4. An accredited investor.
631
632 A business entity must be counted as one purchaser. However, if
633 the business entity is organized for the specific purpose of
634 acquiring the securities offered and is not an accredited
635 investor, each beneficial owner of equity securities or equity
636 interests in the business entity must be counted as a separate
637 purchaser. A noncontributory employee benefit plan within the
638 meaning of Title I of the Employee Retirement Income Security
639 Act of 1974 must be counted as one purchaser if the trustee
640 makes all investment decisions for the plan.
641 (11) Offers or sales of securities by an issuer in a
642 transaction that meets all of the following conditions:
643 (a) The offers or sales of securities are made only to
644 persons who are, or who the issuer reasonably believes are,
645 accredited investors.
646 (b) The issuer is not a business entity that has an
647 undefined business operation, lacks a business plan, lacks a
648 stated investment goal for the funds being raised, or plans to
649 engage in a merger or acquisition with an unspecified business
650 entity.
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651 (c) The issuer reasonably believes that all purchasers are
652 purchasing for investment and not with the view to or for sale
653 in connection with a distribution of the security. Any resale of
654 a security sold in reliance on this exemption within 12 months
655 after sale is presumed to be with a view to distribution and not
656 for investment, except a resale pursuant to a registration
657 statement effective under this chapter or pursuant to an
658 exemption available under this chapter, the Securities Act of
659 1933, as amended, or the rules and regulations adopted
660 thereunder.
661 (d)1. A general announcement of the proposed offering,
662 made by any means, includes only the following information:
663 a. The name, address, and telephone number of the issuer
664 of the securities.
665 b. The name, a brief description, and price, if known, of
666 any security to be issued.
667 c. A brief description of the business.
668 d. The type, number, and aggregate amount of securities
669 being offered.
670 e. The name, address, and telephone number of the person
671 to contact for additional information.
672 f. A statement that:
673 (I) Sales will be made only to accredited investors;
674 (II) Money or other consideration is not being solicited
675 and will not be accepted by way of this general announcement;
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676 and
677 (III) The securities have not been registered with or
678 approved by any state securities agency or the Securities and
679 Exchange Commission and are being offered and sold pursuant to
680 an exemption from registration.
681 2. The issuer, in connection with an offer, may provide
682 information in addition to the information provided in the
683 general announcement as specified in subparagraph 1. if such
684 information is delivered:
685 a. Through an electronic database that is restricted to
686 persons who have been prequalified as accredited investors; or
687 b. After the issuer reasonably believes that the
688 prospective purchaser is an accredited investor.
689 (e) The issuer does not use telephone solicitation unless,
690 before placing the call, the issuer reasonably believes that the
691 prospective purchaser to be solicited is an accredited investor.
692 (f) The issuer files with the office a notice of
693 transaction, a consent to service of process, and a copy of the
694 general announcement within 15 days after the first sale is made
695 in this state. The commission may adopt by rule procedures for
696 filing documents by electronic means.
697 (g) Dissemination of the general announcement of the
698 proposed offering to persons who are not accredited investors
699 does not disqualify the issuer from claiming the exemption under
700 this subsection.
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701 (12) The isolated sale or offer for sale of securities
702 when made by or on behalf of a bona fide owner, not the issuer
703 or underwriter, of the securities, who disposes of such
704 securities for the owner's own account, and such sale is not
705 made directly or indirectly for the benefit of the issuer or an
706 underwriter of such securities or for the direct or indirect
707 promotion of any scheme or enterprise with the intent of
708 violating or evading this chapter. For purposes of this
709 subsection, isolated offers or sales include, but are not
710 limited to, an isolated offer or sale made by or on behalf of a
711 bona fide owner, rather than the issuer or underwriter, of the
712 securities if:
713 (a) The offer or sale of securities is in a transaction
714 satisfying all of the conditions specified in subparagraphs
715 (10)(a)1., 2., and 3. and paragraph (10)(b); or
716 (b) The offer or sale of securities is in a transaction
717 exempt under s. 4(a)(1) of the Securities Act of 1933, as
718 amended, or under Securities and Exchange Commission rules or
719 regulations.
720 (13) By or for the account of a pledgeholder, a secured
721 party as defined in s. 679.1021(1)(ttt), or a mortgagee selling
722 or offering for sale or delivery in the ordinary course of
723 business and not for the purposes of avoiding the provisions of
724 this chapter, to liquidate a bona fide debt, a security pledged
725 in good faith as security for such debt.
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726 (14) An unsolicited purchase or sale of securities on
727 order of, and as the agent for, another solely and exclusively
728 by a dealer registered pursuant to s. 517.12; provided that this
729 exemption applies solely and exclusively to such registered
730 dealers and does not authorize or permit the purchase or sale of
731 securities at the direction of, and as agent for, another by any
732 person other than a dealer so registered; and provided further
733 that such purchase or sale may not be directly or indirectly for
734 the benefit of the issuer or an underwriter of such securities
735 or for the direct or indirect promotion of any scheme or
736 enterprise with the intent of violating or evading this chapter.
737 (15) A nonissuer transaction with a federal covered
738 adviser with investments under management in excess of $100
739 million acting in the exercise of discretionary authority in a
740 signed record for the account of others.
741 (16) The sale by or through a registered dealer of any
742 securities option if, at the time of the sale of the option:
743 (a) The performance of the terms of the option is
744 guaranteed by any dealer registered under the Securities
745 Exchange Act of 1934, as amended, which guaranty and dealer are
746 in compliance with such requirements or rules as may be approved
747 or adopted by the commission; or
748 (b)1. Such options transactions are cleared by the Options
749 Clearing Corporation or any other clearinghouse recognized by
750 commission rule;
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751 2. The option is not sold by or for the benefit of the
752 issuer of the underlying security; and
753 3. The underlying security may be purchased or sold on a
754 recognized securities exchange registered under the Securities
755 Exchange Act of 1934, as amended.
756 (17)(a) The offer or sale of securities, as agent or
757 principal, by a dealer registered pursuant to s. 517.12, when
758 such securities are offered or sold at a price reasonably
759 related to the current market price of such securities, provided
760 that such securities are:
761 1. Securities of an issuer for which reports are required
762 to be filed by s. 13 or s. 15(d) of the Securities Exchange Act
763 of 1934, as amended;
764 2. Securities of a company registered under the Investment
765 Company Act of 1940, as amended;
766 3. Securities of an insurance company, as that term is
767 defined in s. 2(a)(17) of the Investment Company Act of 1940, as
768 amended; or
769 4. Securities, other than any security that is a federal
770 covered security and is not subject to any registration or
771 filing requirements under this chapter, that have been listed or
772 approved for listing upon notice of issuance by a securities
773 exchange registered under the Securities Exchange Act of 1934,
774 as amended; and all securities senior to any securities so
775 listed or approved for listing upon notice of issuance, or
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776 represented by subscription rights which have been so listed or
777 approved for listing upon notice of issuance, or evidences of
778 indebtedness guaranteed by an issuer with a class of securities
779 listed or approved for listing upon notice of issuance by such
780 securities exchange, such securities to be exempt only so long
781 as such listings or approvals remain in effect. The exemption
782 provided in this subparagraph does not apply when the securities
783 are suspended from listing approval for listing or trading.
784 (b) The exemption provided in this subsection does not
785 apply if the sale is made for the direct or indirect benefit of
786 an issuer or a control person of such issuer or if such
787 securities constitute the whole or part of an unsold allotment
788 to, or subscription or participation by, a dealer as an
789 underwriter of such securities.
790 (c) The exemption provided in this subsection is not
791 available for any securities that have been denied registration
792 pursuant to s. 517.111. Additionally, the office may deny this
793 exemption with reference to any particular security, other than
794 a federal covered security, by order published in such manner as
795 the office finds proper.
796 (18) Any nonissuer transaction by a registered dealer, and
797 any resale transaction by a sponsor of a unit investment trust
798 registered under the Investment Company Act of 1940, as amended,
799 in a security of a class that has been outstanding in the hands
800 of the public for at least 90 days; provided that, at the time
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801 of the transaction, the following conditions in paragraphs (a),
802 (b), and (c) and either paragraph (d) or paragraph (e) are met:
803 (a) The issuer of the security is actually engaged in
804 business and is not in the organizational stage or in bankruptcy
805 or receivership and is not a blank check, blind pool, or shell
806 company whose primary plan of business is to engage in a merger
807 or combination of the business with, or an acquisition of, an
808 unidentified person.
809 (b) The security is sold at a price reasonably related to
810 the current market price of the security.
811 (c) The security does not constitute the whole or part of
812 an unsold allotment to, or a subscription or participation by,
813 the dealer as an underwriter of the security.
814 (d) The security is listed in a nationally recognized
815 securities manual designated by rule of the commission or a
816 document filed with and publicly viewable through the Securities
817 and Exchange Commission electronic data gathering and retrieval
818 system and contains:
819 1. A description of the business and operations of the
820 issuer;
821 2. The names of the issuer's officers and directors, if
822 any, or, in the case of an issuer not domiciled in the United
823 States, the corporate equivalents of such persons in the
824 issuer's country of domicile;
825 3. An audited balance sheet of the issuer as of a date
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826 within 18 months before such transaction or, in the case of a
827 reorganization or merger in which parties to the reorganization
828 or merger had such audited balance sheet, a pro forma balance
829 sheet; and
830 4. An audited income statement for each of the issuer's
831 immediately preceding 2 fiscal years, or for the period of
832 existence of the issuer, if in existence for less than 2 years
833 or, in the case of a reorganization or merger in which the
834 parties to the reorganization or merger had such audited income
835 statement, a pro forma income statement.
836 (e)1. The issuer of the security has a class of equity
837 securities listed on a national securities exchange registered
838 under the Securities Exchange Act of 1934, as amended;
839 2. The class of security is quoted, offered, purchased, or
840 sold through an alternative trading system registered under
841 Securities and Exchange Commission Regulation ATS, 17 C.F.R. s.
842 242.301, as amended, and the issuer of the security has made
843 current information publicly available in accordance with
844 Securities and Exchange Commission Rule 15c2-11, 17 C.F.R. s.
845 240.15c2-11, as amended;
846 3. The issuer of the security is a unit investment trust
847 registered under the Investment Company Act of 1940, as amended;
848 4. The issuer of the security has been engaged in
849 continuous business, including predecessors, for at least 3
850 years; or
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851 5. The issuer of the security has total assets of at least
852 $2 million based on an audited balance sheet as of a date within
853 18 months before such transaction or, in the case of a
854 reorganization or merger in which parties to the reorganization
855 or merger had such audited balance sheet, a pro forma balance
856 sheet.
857 (19) The offer or sale of any security effected by or
858 through a person in compliance with s. 517.12(16).
859 (20) A nonissuer transaction in an outstanding security by
860 or through a dealer registered or exempt from registration under
861 this chapter, if all of the following are true:
862 (a) The issuer is a reporting issuer in a foreign
863 jurisdiction designated by this subsection or by commission
864 rule, and the issuer has been subject to continuous reporting
865 requirements in such foreign jurisdiction for not less than 180
866 days before the transaction.
867 (b) The security is listed on the securities exchange
868 designated by this subsection or by commission rule, is a
869 security of the same issuer which is of senior or substantially
870 equal rank to the listed security, or is a warrant or right to
871 purchase or subscribe to any such security.
872
873 For purposes of this subsection, Canada, together with its
874 provinces and territories, is designated as a foreign
875 jurisdiction, and The Toronto Stock Exchange, Inc., is
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876 designated as a securities exchange. If, after an a dministrative
877 hearing in compliance with ss. 120.569 and 120.57, the office
878 finds that revocation is necessary or appropriate in furtherance
879 of the public interest and for the protection of investors, it
880 may revoke the designation of a securities exchange under this
881 subsection.
882 (21) Other transactions exempted by commission rule upon a
883 finding by the office that the application of s. 517.07 to a
884 particular transaction is not necessary or appropriate in
885 furtherance of the public interest and for the protection of
886 investors due to the small dollar amount of the securities
887 involved or the limited character of the offering. In
888 conjunction with its adoption by rule of such exemptions, the
889 commission may exempt persons selling or offering for sale
890 securities in such a transaction from the registration
891 requirements of s. 517.12. A rule adopted by the commission
892 under this subsection may not have the effect of narrowing or
893 limiting any exemption specified in this section.
894 Section 4. Section 517.0611, Florida Statutes, is amended
895 to read:
896 517.0611 The Florida Limited Offering Exemption Intrastate
897 crowdfunding.—
898 (1) This section may be cited as the "The Florida Limited
899 Offering Intrastate Crowdfunding Exemption."
900 (2) The registration provisions of s. 517.07 do not apply
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901 to a securities transaction conducted in accordance with this
902 section; however, such transaction is subject to s. 517.301
903 Notwithstanding any other provision of this chapter, an offer or
904 sale of a security by an issuer is an exempt transaction under
905 s. 517.061 if the offer or sale is conducted in accordance with
906 this section. The exemption provided in this section may not be
907 used in conjunction with any other exemption under s. 517.051 or
908 s. 517.061.
909 (3) The offer or sale of securities under this section
910 must be conducted in accordance with the requirements of the
911 federal exemption for intrastate offerings in s. 3(a)(11) of the
912 Securities Act of 1933, 15 U.S.C. s. 77c(a)(11), as amended, and
913 United States Securities and Exchange Commission Rule 147, 17
914 C.F.R. s. 230.147, as amended, or Securities and Exchange
915 Commission Rule 147A, 17. C.F.R. s. 230.147A, as amended adopted
916 pursuant to the Securities Act of 1933.
917 (4) An issuer must:
918 (a) Must be a for-profit business entity that maintains
919 formed under the laws of the state, be registered with the
920 Secretary of State, maintain its principal place of business in
921 the state, and derives derive its revenues primarily from
922 operations in this the state.
923 (b) Must conduct transactions for an the offering of $2.5
924 million or more through a dealer registered with the office or
925 an intermediary registered under s. 517.12 s. 517.12(19). For an
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926 offering of less than $2.5 million, the issuer may, but is not
927 required to, use such a dealer or intermediary.
928 (c) May not be, either before or as a result of the
929 offering, an investment company as defined in s. 3 of the
930 Investment Company Act of 1940, 15 U.S.C. s. 80a-3, as amended,
931 or subject to the reporting requirements of s. 13 or s. 15(d) of
932 the Securities Exchange Act of 1934, 15 U.S.C. s. 78m or s.
933 78o(d), as amended.
934 (d) May not be a business entity that has company with an
935 undefined business operation, a company that lacks a business
936 plan, a company that lacks a stated investment goal for the
937 funds being raised, or a company that plans to engage in a
938 merger or acquisition with an unspecified business entity.
939 (e) May not be subject to a disqualification established
940 by the commission or office or a disqualification described in
941 s. 517.0616 or s. 517.1611 or United States Securities and
942 Exchange Commission Rule 506(d), 17 C.F.R. 230.506(d), adopted
943 pursuant to the Securities Act of 1933. Each director, officer,
944 manager, managing member, or general partner, or person
945 occupying a similar status or performing a similar function, or
946 person holding more than 20 percent of the equity interest
947 shares of the issuer, is subject to this paragraph requirement.
948 (f) Must deposit all funds received from investors in an
949 account in Execute an escrow agreement with a federally insured
950 financial institution authorized to do business in this the
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951 state, and maintain all such funds in the account until the
952 target offering amount has been reached or the offering has been
953 terminated or has expired. If the target offering amount has not
954 been reached within the period specified by the issuer in the
955 disclosure statement provided to investors, or if the offering
956 is terminated or expires, the issuer must refund invested funds
957 to all investors within 10 business days after such occurrence
958 for the deposit of investor funds, and ensure that all offering
959 proceeds are provided to the issuer only when the aggregate
960 capital raised from all investors is equal to or greater than
961 the target offering amount.
962 (g) Must use all funds in accordance with the use of
963 proceeds as disclosed to prospective investors Allow investors
964 to cancel a commitment to invest within 3 business days before
965 the offering deadline, as stated in the disclosure statement,
966 and issue refunds to all investors if the target offering amount
967 is not reached by the offering deadline.
968 (5) The issuer must file a notice of the offering with the
969 office, in writing or in electronic form, in a format prescribed
970 by commission rule, together with a nonrefundable filing fee of
971 $200. The filing fee must shall be deposited into the Regulatory
972 Trust Fund of the office. The commission may adopt rules
973 establishing procedures for the deposit of fees and the filing
974 of documents by electronic means if the procedures provide the
975 office with the information and data required by this section. A
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976 notice is effective upon receipt, by the office, of the
977 completed form, filing fee, and an irrevocable written consent
978 to service of civil process, similar to that provided for in s.
979 517.101. The notice may be terminated by filing with the office
980 a notice of termination. The notice and offering expire 12
981 months after filing the notice with the office and are not
982 eligible for renewal. The notice must:
983 (a) Be filed with the office at least 10 days before the
984 issuer commences an offering of securities or the offering is
985 displayed on a website of an intermediary in reliance upon the
986 exemption provided by this section.
987 (b) Indicate that the issuer is conducting an offering in
988 reliance upon the exemption provided by this section.
989 (c) Contain the name and contact information, including an
990 e-mail address, of the issuer.
991 (d) Identify any predecessors, owners, officers,
992 directors, general partners, managers, managing members, and
993 control persons or any person occupying a similar status or
994 performing a similar function of the issuer, including that
995 person's title, his or her status as a partner, trustee, or sole
996 proprietor or a similar role, and his or her ownership
997 percentage.
998 (e) Identify the federally insured financial institution
999 into, authorized to do business in the state, in which investor
1000 funds will be deposited, in accordance with the escrow
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1001 agreement.
1002 (f) Require an attestation under oath that the issuer, its
1003 predecessors, affiliated issuers, directors, officers, and
1004 control persons, or any other person occupying a similar status
1005 or performing a similar function, are not currently and have not
1006 been within the past 10 years the subject of regulatory or
1007 criminal actions involving fraud or deceit.
1008 (g) Include documentation verifying that the issuer is
1009 organized under the laws of the state and authorized to do
1010 business in the state.
1011 (h) If applicable, include the intermediary's website
1012 address where the issuer's securities will be offered.
1013 (g)(i) State Include the target offering amount and the
1014 date, not to exceed 365 days, by which the target amount must be
1015 reached in order to avoid termination of the offering .
1016 (6) The issuer must amend the notice form within 10
1017 business 30 days after any material information contained in the
1018 notice becomes inaccurate for any reason. The commission may
1019 require, by rule, an issuer who has filed a notice under this
1020 section to file amendments with the office.
1021 (7) The issuer may engage in general advertising and
1022 general solicitation of the offering to prospective investors.
1023 Any oral or written statements in advertising or solicitation of
1024 the offering which contain a material misstatement, or which
1025 fail to disclose material information, are subject to
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1026 enforcement under this chapter. Any general advertising or other
1027 general announcement must state that the offering is limited and
1028 open only to residents of this state.
1029 (8) The issuer must provide a disclosure statement to
1030 investors and the dealer or intermediary, along with a copy to
1031 the office at the time that the notice is filed, and make
1032 available to potential investors through the dealer or
1033 intermediary, as applicable; to the office at the time that the
1034 notice is filed; and to each prospective investor at least 3
1035 days before the investor's commitment to purchase or payment of
1036 any consideration. The, a disclosure statement must contain
1037 containing material information about the issuer and the
1038 offering, including all of the following:
1039 (a) The name, legal status, physical address, e-mail
1040 address, and website address of the issuer.
1041 (b) The names of the directors, officers, managers,
1042 managing members, and general partners and any person occupying
1043 a similar status or performing a similar function, and the name
1044 and ownership percentage of each person holding more than 20
1045 percent of the issuer's equity interests shares of the issuer.
1046 (c) A description of the current business of the issuer
1047 and the anticipated business plan of the issuer.
1048 (d) A description of the stated purpose and intended use
1049 of the proceeds of the offering.
1050 (e) The target offering amount and, the deadline to reach
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1051 the target offering amount, and regular updates regarding the
1052 progress of the issuer in meeting the target offering amount .
1053 (f) The price to the public of the securities or the
1054 method for determining the price. However, before the sale, each
1055 investor must receive in writing the final price and all
1056 required disclosures and have an opportunity to rescind the
1057 commitment to purchase the securities.
1058 (g) A description of the ownership and capital structure
1059 of the issuer, including:
1060 1. Terms of the securities being offered and each class of
1061 security of the issuer, including how those terms may be
1062 modified, and a summary of the differences between such
1063 securities, including how the rights of the securities being
1064 offered may be materially limited, diluted, or qualified by
1065 rights of any other class of security of the issuer.
1066 2. A description of how the exercise of the rights held by
1067 the principal equity holders shareholders of the issuer could
1068 negatively impact the purchasers of the securities being
1069 offered.
1070 3. The name and ownership level of each existing
1071 shareholder who owns more than 20 percent of any class of the
1072 securities of the issuer.
1073 4. How the securities being offered are being valued, and
1074 examples of methods of how such securities may be valued by the
1075 issuer in the future, including during subsequent corporate
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1076 actions.
1077 5. The risks to purchasers of the securities relating to
1078 minority ownership in the issuer, the risks associated with
1079 corporate action, including additional issuances of shares, a
1080 sale of the issuer or of assets of the issuer, or transactions
1081 with related parties.
1082 (h) A statement that the security being offered is not
1083 registered under federal or state securities laws and that the
1084 securities are subject to the limitation on resale contained in
1085 Securities and Exchange Commission Rule 147 or Rule 147A.
1086 (i) Any issuer plans, formal or informal, to offer
1087 additional securities in the future.
1088 (j) The risks to purchasers of the securities relating to
1089 minority ownership in the issuer.
1090 (k)(h) A description of the financial condition of the
1091 issuer.
1092 1. For offerings that, in combination with all other
1093 offerings of the issuer within the preceding 12-month period,
1094 have target offering amounts of $500,000 $100,000 or less, the
1095 financial statements of the issuer may be, but are not required
1096 to be, included description must include the most recent income
1097 tax return filed by the issuer, if any, and a financial
1098 statement that must be certified by the principal executive
1099 officer of the issuer as true and complete in all material
1100 respects.
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1101 2. For offerings that, in combination with all other
1102 offerings of the issuer within the preceding 12-month period,
1103 have target offering amounts of more than $500,000 $100,000, but
1104 not more than $2.5 million $500,000, the description must
1105 include financial statements prepared in accordance with
1106 generally accepted accounting principles and reviewed by a
1107 certified public accountant, as defined in s. 473.302, who is
1108 independent of the issuer, using professional standards and
1109 procedures for such review or standards and procedures
1110 established by commission the office, by rule, for such purpose.
1111 3. For offerings that, in combination with all other
1112 offerings of the issuer within the preceding 12-month period,
1113 have target offering amounts of more than $2.5 million $500,000,
1114 the description must include audited financial statements
1115 prepared in accordance with generally accepted accounting
1116 principles by a certified public accountant, as defined in s.
1117 473.302, who is independent of the issuer, and other
1118 requirements as the commission may establish by rule.
1119 (l)(i) The following statement in boldface, conspicuous
1120 type on the front page of the disclosure statement:
1121
1122 Neither the Securities and Exchange Commission nor any
1123 state securities commission has approved or
1124 disapproved these securities or determined if this
1125 disclosure statement is truthful or complete. Any
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1126 representation to the contrary is a criminal offense.
1127
1128 These securities are offered under, and will be sold
1129 in reliance upon, an exemption from the registration
1130 requirements of federal and Florida securities laws.
1131 Consequently, Neither the Federal Government nor the
1132 State of Florida has reviewed the accuracy or
1133 completeness of any offering materials. In making an
1134 investment decision, investors must rely on their own
1135 examination of the issuer and the terms of the
1136 offering, including the merits and risks involved.
1137 These securities are subject to restrictions on
1138 transferability and resale and may not be transferred
1139 or resold except as specifically authorized by
1140 applicable federal and state securities laws.
1141 Investing in these securities involves a speculative
1142 risk, and investors should be able to bear the loss of
1143 their entire investment.
1144 (8) The issuer shall provide to the office a copy of the
1145 escrow agreement with a financial institution authorized to
1146 conduct business in this state. All investor funds must be
1147 deposited in the escrow account. The escrow agreement must
1148 require that all offering proceeds be released to the issuer
1149 only when the aggregate capital raised from all investors is
1150 equal to or greater than the minimum target offering amount
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1151 specified in the disclosure statement as necessary to implement
1152 the business plan, and that all investors will receive a full
1153 return of their investment commitment if that target offering
1154 amount is not raised by the date stated in the disclosure
1155 statement.
1156 (9) The sum of all cash and other consideration received
1157 for sales of a security under this section may not exceed $5 $1
1158 million, less the aggregate amount received for all sales of
1159 securities by the issuer within the 12 months preceding the
1160 first offer or sale made in reliance upon this exemption. Offers
1161 or sales to a person owning 20 percent or more of the
1162 outstanding equity interests shares of any class or classes of
1163 securities or to an officer, director, manager, managing member,
1164 general partner, or trustee, or a person occupying a similar
1165 status, do not count toward this limitation.
1166 (10) Unless the investor is an accredited investor , or the
1167 issuer reasonably believes that the investor is an accredited
1168 investor as defined by Rule 501 of Regulation D, adopted
1169 pursuant to the Securities Act of 1933, the aggregate amount of
1170 securities sold by an issuer to an investor in transactions
1171 exempt from registration requirements under this subsection in a
1172 12-month period may not exceed $10,000:
1173 (a) The greater of $2,000 or 5 percent of the annual
1174 income or net worth of such investor, if the annual income or
1175 the net worth of the investor is less than $100,000.
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1176 (b) Ten percent of the annual income or net worth of such
1177 investor, not to exceed a maximum aggregate amount sold of
1178 $100,000, if either the annual income or net worth of the
1179 investor is equal to or exceeds $100,000.
1180 (11) The issuer shall file with the office and provide to
1181 investors free of charge an annual report of the results of
1182 operations and financial statements of the issuer within 45 days
1183 after the end of its fiscal year, until no securities under this
1184 offering are outstanding. The annual reports must meet the
1185 following requirements:
1186 (a) Include an analysis by management of the issuer of the
1187 business operations and the financial condition of the issuer,
1188 and disclose the compensation received by each director,
1189 executive officer, and person having an ownership interest of 20
1190 percent or more of the issuer, including cash compensation
1191 earned since the previous report and on an annual basis, and any
1192 bonuses, stock options, other rights to receive securities of
1193 the issuer, or any affiliate of the issuer, or other
1194 compensation received.
1195 (b) Disclose any material change to information contained
1196 in the disclosure statements which was not disclosed in a
1197 previous report.
1198 (11)(12)(a) A notice-filing under this section must shall
1199 be summarily suspended by the office if:
1200 (a) The payment for the filing is dishonored by the
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1201 financial institution upon which the funds are drawn. For
1202 purposes of s. 120.60(6), failure to pay the required notice
1203 filing fee constitutes an immediate and serious danger to the
1204 public health, safety, and welfare. The office shall enter a
1205 final order revoking a notice-filing in which the payment for
1206 the filing is dishonored by the financial institution upon which
1207 the funds are drawn; or.
1208 (b) A notice-filing under this section shall be summarily
1209 suspended by the office if The issuer made a material false
1210 statement in the issuer's notice-filing. The summary suspension
1211 remains shall remain in effect until a final order is entered by
1212 the office. For purposes of s. 120.60(6), a material false
1213 statement made in the issuer's notice-filing constitutes an
1214 immediate and serious danger to the public health, safety, and
1215 welfare. If an issuer made a material false statement in the
1216 issuer's notice-filing, the office must shall enter a final
1217 order revoking the notice-filing, issue a fine as prescribed by
1218 s. 517.191(9) s. 517.221(3), and issue permanent bars under s.
1219 517.191(10) s. 517.221(4) to the issuer and all owners,
1220 officers, directors, general partners, and control persons, or
1221 any person occupying a similar status or performing a similar
1222 function of the issuer, including title; status as a partner,
1223 trustee, sole proprietor, or similar role; and ownership
1224 percentage.
1225 (12)(13) If the issuer employs the services of an
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1226 intermediary, the An intermediary must:
1227 (a) Take measures, as established by commission rule, to
1228 reduce the risk of fraud with respect to the transactions,
1229 including verifying that the issuer is in compliance with the
1230 requirements of this section and, if necessary, denying an
1231 issuer access to its platform if the intermediary believes it is
1232 unable to adequately assess the risk of fraud of the issuer or
1233 its potential offering.
1234 (b) Provide basic information on its website regarding the
1235 high risk of investment in and limitation on the resale of
1236 exempt securities and the potential for loss of an entire
1237 investment. The basic information must include, but need not be
1238 limited to, all of the following:
1239 1. A description of the financial institution into which
1240 investor funds will be deposited escrow agreement that the
1241 issuer has executed and the conditions for the use release of
1242 such funds by to the issuer in accordance with the agreement and
1243 subsection (4).
1244 2. A description of whether financial information provided
1245 by the issuer has been audited by an independent certified
1246 public accountant, as defined in s. 473.302.
1247 (c) Obtain from each prospective investor a zip code or
1248 residence address, a copy of a driver license, and any other
1249 proof of residency in order for the issuer or intermediary to
1250 reasonably believe that the potential investor is a resident of
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1251 this state. The commission may adopt rules authorizing
1252 additional forms of identification and prescribing the process
1253 for verifying any identification presented by the prospective
1254 investor.
1255 (d) Obtain information sufficient for the issuer or
1256 intermediary to reasonably believe that a particular prospective
1257 investor is an accredited investor
1258 (c) Obtain a zip code or residence address from each
1259 potential investor who seeks to view information regarding
1260 specific investment opportunities, in order to confirm that the
1261 potential investor is a resident of the state.
1262 (d) Obtain and verify a valid Florida driver license
1263 number or Florida identification card number from each investor
1264 before purchase of a security to confirm that the investor is a
1265 resident of the state. The commission may adopt rules
1266 authorizing additional forms of identification and prescribing
1267 the process for verifying any identification presented by the
1268 investor.
1269 (e) Obtain an affidavit from each investor stating that
1270 the investment being made by the investor is consistent with the
1271 income requirements of subsection (10).
1272 (f) Direct the release of investor funds in escrow in
1273 accordance with subsection (4).
1274 (g) Direct investors to transmit funds directly to the
1275 financial institution designated in the escrow agreement to hold
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1276 the funds for the benefit of the investor.
1277 (e)(h) Provide a monthly update for each offering, after
1278 the first full month after the date of the offering. The update
1279 must be accessible on the intermediary's website and must
1280 display the date and amount of each sale of securities, and each
1281 cancellation of commitment to invest, in the previous calendar
1282 month.
1283 (i) Require each investor to certify in writing, including
1284 as part of such certification his or her signature and his or
1285 her initials next to each paragraph of the certification, as
1286 follows:
1287 I understand and acknowledge that:
1288 I am investing in a high-risk, speculative business
1289 venture. I may lose all of my investment, and I can afford the
1290 loss of my investment.
1291 This offering has not been reviewed or approved by any
1292 state or federal securities commission or other regulatory
1293 authority and no regulatory authority has confirmed the accuracy
1294 or determined the adequacy of any disclosure made to me relating
1295 to this offering.
1296 The securities I am acquiring in this offering are illiquid
1297 and are subject to possible dilution. There is no ready market
1298 for the sale of the securities. It may be difficult or
1299 impossible for me to sell or otherwise dispose of the
1300 securities, and I may be required to hold the securities
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1301 indefinitely.
1302 I may be subject to tax on my share of the taxable income
1303 and losses of the issuer, whether or not I have sold or
1304 otherwise disposed of my investment or received any dividends or
1305 other distributions from the issuer.
1306 By entering into this transaction with the issuer, I am
1307 affirmatively representing myself as being a Florida resident at
1308 the time this contract is formed, and if this representation is
1309 subsequently shown to be false, the contract is void.
1310 If I resell any of the securities I am acquiring in this
1311 offering to a person that is not a Florida resident within 9
1312 months after the closing of the offering, my contract with the
1313 issuer for the purchase of these securities is void.
1314 (j) Require each investor to answer questions
1315 demonstrating an understanding of the level of risk generally
1316 applicable to investments in startups, emerging businesses, and
1317 small issuers, and an understanding of the risk of illiquidity.
1318 (f)(k) Take reasonable steps to protect personal
1319 information collected from investors, as required by s. 501.171.
1320 (g)(l) Prohibit its directors, and officers, managers,
1321 managing members, general partners, employees, and agents from
1322 having any financial interest in the issuer using its services.
1323 (m) Implement written policies and procedures that are
1324 reasonably designed to achieve compliance with federal and state
1325 securities laws; comply with the anti-money laundering
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1326 requirements of 31 C.F.R. chapter X applicable to registered
1327 brokers; and comply with the privacy requirements of 17 C.F.R.
1328 part 248 relating to brokers.
1329 (13)(14) An intermediary not registered as a dealer under
1330 s. 517.12(5) may not:
1331 (a) Offer investment advice or recommendations. A refusal
1332 by an intermediary to post an offering that it deems not
1333 credible or that represents a potential for fraud may not be
1334 construed as an offer of investment advice or recommendation.
1335 (b) Solicit purchases, sales, or offers to buy securities
1336 offered or displayed on its website.
1337 (c) Compensate employees, agents, or other persons for the
1338 solicitation of, or based on the sale of, securities offered or
1339 displayed on its website.
1340 (d) Hold, manage, possess, or otherwise handle investor
1341 funds or securities.
1342 (e) Compensate promoters, finders, or lead generators for
1343 providing the intermediary with the personal identifying
1344 information of any prospective potential investor.
1345 (f) Engage in any other activities set forth by commission
1346 rule.
1347 (14) If the issuer does not employ a dealer or an
1348 intermediary for an offering pursuant to the exemption created
1349 under this section, the issuer must fulfill each of the
1350 obligations specified in paragraphs (12)(c)-(f).
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1351 (15) Any sale made pursuant to the exemption created under
1352 this section is voidable by the purchaser within 3 days after
1353 the first tender of consideration is made by such purchaser to
1354 the issuer by notifying the issuer that the purchaser expressly
1355 voids the purchase. The purchaser's notice to the issuer must be
1356 sent by e-mail to the issuer's e-mail address set forth in the
1357 disclosure statement that is provided to the purchaser or
1358 purchaser's representative or by certified mail or overnight
1359 delivery service with proof of delivery to the mailing address
1360 set forth in the disclosure statement All funds received from
1361 investors must be directed to the financial institu tion
1362 designated in the escrow agreement to hold the funds and must be
1363 used in accordance with representations made to investors by the
1364 intermediary. If an investor cancels a commitment to invest, the
1365 intermediary must direct the financial institution desig nated to
1366 hold the funds to promptly refund the funds of the investor.
1367 Section 5. Section 517.0612, Florida Statutes, is created
1368 to read:
1369 517.0612 Florida Invest Local Exemption.—
1370 (1) This section may be cited as the "Florida Invest Local
1371 Exemption."
1372 (2) The registration provisions of s. 517.07 do not apply
1373 to a securities transaction conducted in accordance with this
1374 section; however, such transaction is subject to s. 517.301.
1375 (3) The offer or sale of securities under this section
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1376 must meet the requirements of the federal exemption for
1377 intrastate offerings in s. 3(a)(11) of the Securities Act of
1378 1933, Securities and Exchange Commission Rule 147, or Securities
1379 and Exchange Commission Rule 147A, as amended.
1380 (4) The issuer must be a for-profit business entity
1381 registered with the Department of State which has its principal
1382 place of business in this state. The issuer may not be, before
1383 or as a result of the offering:
1384 (a) An investment company as defined in the Investment
1385 Company Act of 1940, as amended;
1386 (b) Subject to the reporting requirements of the
1387 Securities and Exchange Act of 1934, as amended;
1388 (c) A business entity that has an undefined business
1389 operation, lacks a business plan, lacks a stated investment goal
1390 for the funds being raised, or plans to engage in a merger or
1391 acquisition with an unspecified business entity; or
1392 (d) Subject to a disqualification as provided in s.
1393 517.0616.
1394 (5) The sum of all cash and other consideration received
1395 from all sales of the securities in reliance upon the exemption
1396 under this section may not exceed $500,000, less the aggregate
1397 amount received for all sales of securities by the issuer within
1398 the 12 months before the first offer or sale made in reliance on
1399 this exemption.
1400 (6)(a) The issuer may not accept more than $10,000 from
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1401 any single purchaser unless any of the following apply:
1402 1. The issuer reasonably believes that the purchaser is an
1403 accredited investor.
1404 2. The purchaser is an officer, director, partner, or
1405 trustee, or an individual occupying a similar status or
1406 performing similar functions, of the issuer.
1407 3. The purchaser is an owner of 10 percent or more of the
1408 issuer's outstanding equity.
1409 (b) For purposes of this subsection, the following persons
1410 must be treated collectively as a single purchaser:
1411 1. Any spouse or child of the purchaser or any related
1412 family member who has the same primary residence as the
1413 purchaser.
1414 2. Any business entity of which the purchaser and any
1415 person related to the purchaser as provided in subparagraph 1.
1416 collectively own more than 50 percent of the equity interest.
1417 (7) The issuer may engage in general advertising and
1418 general solicitation of the offering. Any general advertising or
1419 other general announcement must state that the offer is limited
1420 and open only to residents of this state. Any oral or written
1421 statements in advertising or solicitation of the offer which
1422 contain a material misstatement, or which fail to disclose
1423 material information, are subject to enforcement under this
1424 chapter.
1425 (8) A purchaser must receive, at least 3 business days
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1426 before any binding commitment to purchase or consideration paid,
1427 a disclosure statement that provides material information
1428 regarding the issuer, including, but not limited to, all of the
1429 following information:
1430 (a) The issuer's name, type of entity, and contact
1431 information.
1432 (b) The name and contact information of each director,
1433 officer, or other manager of the issuer.
1434 (c) A description of the issuer's business.
1435 (d) A description of the security being offered.
1436 (e) The total amount of the offering.
1437 (f) The intended use of proceeds from the sale of the
1438 securities.
1439 (g) The target offering amount.
1440 (h) A statement that if the target offering amount is not
1441 obtained in cash or in the value of other tangible consideration
1442 received on a date that is no more than 180 days after the
1443 commencement of the offering, the offering will be terminated,
1444 and any funds or other consideration received from purchasers
1445 must be promptly returned.
1446 (i) A statement that the security being offered is not
1447 registered under federal or state securities laws and that the
1448 securities are subject to the limitation on resale contained in
1449 Securities and Exchange Commission Rule 147 or Rule 147A.
1450 (j) The names and addresses of all persons who will be
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1451 involved in the offer and sale of securities on behalf of the
1452 issuer.
1453 (k) The name of the bank or other depository institution
1454 into which investor funds will be deposited.
1455 (l) The following statement in boldface, conspicuous type:
1456
1457 Neither the Securities and Exchange Commission nor any
1458 state securities commission has approved or
1459 disapproved these securities or determined that this
1460 disclosure statement is truthful or complete. Any
1461 representation to the contrary is a criminal offense.
1462
1463 (9) All funds received from investors must be deposited
1464 into a bank or depository institution authorized to do business
1465 in this state. The issuer may not withdraw any amount of the
1466 offering proceeds unless the target offering amount has been
1467 received.
1468 (10) The issuer must file a notice of the offering with
1469 the office, in writing or in electronic form, in a format
1470 prescribed by commission rule, no less than 5 business days
1471 before the offering commences, along with the disclosure
1472 statement described in subsection (8). If there are any material
1473 changes to the information previously submitted, the issuer,
1474 within 3 business days after such material change, must file an
1475 amended notice.
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1476 (11) An individual, entity, or entity employee who acts as
1477 an agent for the issuer in the offer or sale of securities and
1478 is not registered as a dealer under this chapter may not do
1479 either of the following:
1480 (a) Receive compensation based upon the solicitation of
1481 purchases, sales, or offers to purchase the securities.
1482 (b) Take custody of investor funds or securities.
1483 (12) Any sale made pursuant to the exemption created under
1484 this section is voidable by the purchaser within 3 days after
1485 the first tender of consideration is made by such purchaser to
1486 the issuer by notifying the issuer that the purchaser expressly
1487 voids the purchase. The purchaser's notice to the issuer must be
1488 sent by e-mail to the issuer's e-mail address set forth in the
1489 disclosure statement that is provided to a purchaser or the
1490 purchaser's representative or by hand delivery, courier service,
1491 or other method by which written proof of delivery to the issuer
1492 of the purchaser's election to rescind the purchase is
1493 evidenced.
1494 Section 6. Section 517.0613, Florida Statutes, is created
1495 to read:
1496 517.0613 Failure to comply with a securities registration
1497 exemption.—
1498 (1) Failure to meet the requirements for any exemption
1499 from securities registration does not preclude the issuer from
1500 claiming the availability of any other applicable state or
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1501 federal exemption.
1502 (2) The exemptions created under ss. 517.061, 517.0611,
1503 and 517.0612 are not available to an issuer for any transaction
1504 or series of transactions that, although in technical compliance
1505 with the applicable provisions, is part of a plan or scheme to
1506 evade the registration provisions of s. 517.07, and registration
1507 under s. 517.07 is required in connection with such
1508 transactions.
1509 Section 7. Section 517.0614, Florida Statutes, is created
1510 to read:
1511 517.0614 Integration of offerings.—
1512 (1) If the safe harbors in subsection (2) do not apply, in
1513 determining whether two or more offerings are to be treated as
1514 one for the purpose of registration or qualifying for an
1515 exemption from registration under this chapter, offers and sales
1516 may not be integrated if, based on the particular facts and
1517 circumstances, the issuer can establish either that each
1518 offering complies with the registration requirements of this
1519 chapter, or that an exemption from registration is available for
1520 the particular offering, provided that any transaction or series
1521 of transactions that, although in technical compliance with this
1522 chapter, is part of a plan or scheme to evade the registration
1523 requirements of this chapter will not have the effect of
1524 avoiding integration. In making this determination:
1525 (a) For an exempt offering prohibiting general
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1526 solicitation, the issuer must have a reasonable belief, based on
1527 the facts and circumstances, with respect to each purchaser in
1528 the exempt offering prohibiting general solicitation, that the
1529 issuer or any person acting on the issuer's behalf:
1530 1. Did not solicit such purchaser through the use of
1531 general solicitation; or
1532 2. Established a substantive relationship with such
1533 purchaser before the commencement of the exempt offering
1534 prohibiting general solicitation, provided that a purchaser
1535 previously solicited through the use of general solicitation is
1536 not deemed to have been solicited through the use of general
1537 solicitation in the current offering if, during the 45 calendar
1538 days following such previous general solicitation:
1539 a. No offer or sale of the same or similar class of
1540 securities has been made by or on behalf of the issuer,
1541 including to such purchaser; and
1542 b. The issuer or any person acting on the issuer's behalf
1543 has not solicited such purchaser through the use of general
1544 solicitation for any other security.
1545 (b) For two or more concurrent exempt offerings permitting
1546 general solicitation, in addition to satisfying the requirements
1547 of the particular exemption relied on, general solicitation
1548 offering materials for one offering that includes information
1549 about the material terms of a concurrent offering under another
1550 exemption may constitute an offer of securities in such other
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1551 offering, and therefore the offer must comply with all the
1552 requirements for, and restrictions on, offers under the
1553 exemption being relied on for such other offering, including any
1554 legend requirements and communications restrictions.
1555 (2) The integration analysis required by subsection (1) is
1556 not required if any of the following nonexclusive safe harbors
1557 apply:
1558 (a) An offering commenced more than 30 calendar days
1559 before the commencement of any other offering, or more than 30
1560 calendar days after the termination or completion of any other
1561 offering, may not be integrated with such other offerin g,
1562 provided that for an exempt offering for which general
1563 solicitation is not permitted which follows by 30 calendar days
1564 or more an offering that allows general solicitation, paragraph
1565 (1)(a) applies.
1566 (b) Offers and sales made in compliance with any of the
1567 following provisions are not subject to integration with other
1568 offerings:
1569 1. Section 517.051 or s. 517.061, except s. 517.061(9),
1570 (10), or (11).
1571 2. Section 517.0611 or s. 517.0612.
1572 Section 8. Section 517.0615, Florida Statutes, is created
1573 to read:
1574 517.0615 Solicitations of interest.—
1575 (1) A communication may not be deemed to constitute
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1576 general solicitation or general advertising if the communication
1577 is made in connection with a seminar or meeting in which more
1578 than one issuer participates and which is sponsored by a
1579 college, a university, or another institution of higher
1580 education; a state or local government or an instrumentality
1581 thereof; a nonprofit chamber of commerce or other nonprofit
1582 organization; or an angel investor group, incubator, or
1583 accelerator, if all of the following apply:
1584 (a) Advertising for the seminar or meeting does not
1585 reference a specific offering of securities by the issuer.
1586 (b) The sponsor of the seminar or meeting does not do any
1587 of the following:
1588 1. Make investment recommendations or provide investment
1589 advice to attendees of the seminar or meeting.
1590 2. Engage in any investment negotiations between the
1591 issuer and investors attending the seminar or meeting.
1592 3. Charge attendees of the seminar or meeting any fees,
1593 other than reasonable administrative fees.
1594 4. Receive any compensation for making introductions
1595 between seminar or meeting attendees and issuers or for
1596 investment negotiations between such parties.
1597 5. Receive any compensation with respect to the semina r or
1598 meeting, which compensation would require registration or
1599 notice-filing under this chapter, the Securities Exchange Act of
1600 1934, 15 U.S.C. ss. 78a et seq., as amended, or the Investment
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1601 Advisers Act of 1940, 15 U.S.C. s. 80b-1 et seq., as amended.
1602 The sponsorship of or participation in the seminar or meeting
1603 does not by itself require registration or notice-filing under
1604 this chapter.
1605 (c) The type of information regarding an offering of
1606 securities by the issuer which is communicated or distributed by
1607 or on behalf of the issuer in connection with the seminar or
1608 meeting is limited to a notification that the issuer is in the
1609 process of offering or planning to offer securities, the type
1610 and amount of securities being offered, the intended use of
1611 proceeds of the offering, and the unsubscribed amount in an
1612 offering.
1613 (d) If the event allows attendees to participate
1614 virtually, rather than in person, online participation in the
1615 event is limited to:
1616 1. Individuals that are members of, or otherwise
1617 associated with, the sponsor organization;
1618 2. Individuals that the sponsor reasonably believes are
1619 accredited investors; or
1620 3. Individuals that have been invited to the event by the
1621 sponsor based on industry or investment-related experience
1622 reasonably selected by the sponsor in good faith and disclosed
1623 in the public communications about the event.
1624 (2) Before any offers or sales are made in connection with
1625 an offering, communications by an issuer or any person
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1626 authorized to act on behalf of the issuer are not dee med to
1627 constitute general solicitation or general advertising if the
1628 communication is solely for the purpose of determining whether
1629 there is any interest in a contemplated securities offering.
1630 Requirements imposed under this chapter on written or oral
1631 statements made in the course of such communication may be
1632 enforced as provided in this chapter. The solicitation or
1633 acceptance of money or other consideration or of any commitment,
1634 binding or otherwise, from any person is prohibited.
1635 (a) The communication must state all of the following:
1636 1. Money or other consideration is not being solicited
1637 and, if sent in response, will not be accepted.
1638 2. Any offer to buy the securities will not be accepted,
1639 and no part of the purchase price will be accepted.
1640 3. A person's indication of interest does not involve
1641 obligation or commitment of any kind.
1642 (b) Any written communication under this subsection may
1643 include a means by which a person may indicate to the issuer
1644 that the person is interested in a potential offeri ng. The
1645 issuer may require the name, address, telephone number, or e -
1646 mail address in any response form included in the written
1647 communication under this paragraph.
1648 (c) A communication in accordance with this subsection is
1649 not subject to s. 501.059, regarding telephone solicitations.
1650 Section 9. Section 517.0616, Florida Statutes, is created
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1651 to read:
1652 517.0616 Disqualification.—A registration exemption under
1653 s. 517.061(9), (10), and (11), s. 517.0611, or s. 517.0612 is
1654 not available to an issuer that would be disqualified under
1655 Securities and Exchange Commission Rule 506(d), 17 C.F.R. s.
1656 230.506(d), as amended, at the time the issuer makes an offer
1657 for the sale of a security.
1658 Section 10. Present subsections (4) through (8) of section
1659 517.081, Florida Statutes, are redesignated as subsections (6)
1660 through (10), respectively, new subsections (4) and (5) are
1661 added to that section, and subsection (2), paragraph (g) of
1662 subsection (3), and present subsection (7) of that section are
1663 amended, to read:
1664 517.081 Registration procedure.—
1665 (2) The office shall receive and act upon applications for
1666 the registration of to have securities registered, and the
1667 commission may prescribe forms on which it may require such
1668 applications to be submitted. Applications must shall be duly
1669 signed by the applicant, sworn to by any person having knowledge
1670 of the facts, and filed with the office. The commission may
1671 establish, by rule, procedures for depositing fees and filing
1672 documents by electronic means provided such procedures p rovide
1673 the office with the information and data required by this
1674 section. An application may be made either by the issuer of the
1675 securities for which registration is applied or by any
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1676 registered dealer desiring to sell such securities the same
1677 within the state.
1678 (3) The office may require the applicant to submit to the
1679 office the following information concerning the issuer and such
1680 other relevant information as the office may in its judgment
1681 deem necessary to enable it to ascertain whether such securities
1682 shall be registered pursuant to the provisions of this section:
1683 (g)1. A specimen copy of the securities certificate, if
1684 applicable, and a copy of any circular, prospectus,
1685 advertisement, or other description of such securities.
1686 2. The commission shall adopt a form for a simplified
1687 offering circular to register, under this section, securities
1688 that are sold in offerings in which the aggregate offering price
1689 in any consecutive 12-month period does not exceed the amount
1690 provided in s. 3(b) of the Securities Act of 1933, as amended.
1691 The following issuers shall not be eligible to submit a
1692 simplified offering circular adopted pursuant to this
1693 subparagraph:
1694 a. An issuer seeking to register securities for resale by
1695 persons other than the issuer.
1696 b. An issuer that is subject to any of the
1697 disqualifications described in 17 C.F.R. s. 230.262, adopted
1698 pursuant to the Securities Act of 1933, as amended, or that has
1699 been or is engaged or is about to engage in an activity that
1700 would be grounds for denial, revocation, or suspension under s.
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1701 517.111. For purposes of this subparagraph, an issuer includes
1702 an issuer's director, officer, general partner, manager or
1703 managing member, trustee, or equity owner who owns at least 10
1704 percent of the ownership interests of the issuer, promoter, or
1705 selling agent of the securities to be offered or any officer,
1706 director, partner, or manager or managing member of such selling
1707 agent.
1708 c. An issuer that is a development-stage company that
1709 either has no specific business plan or purpose or has indicated
1710 that its business plan is to merge with an unidentified company
1711 or companies.
1712 d. An issuer of offerings in which the specific business
1713 or properties cannot be described.
1714 e. Any issuer the office determines is ineligible because
1715 the form does not provide full and fair disclosure of material
1716 information for the type of offering to be registered by the
1717 issuer.
1718 f. Any issuer that has failed to provide the office the
1719 reports required for a previous offering registered pursuant to
1720 this subparagraph.
1721
1722 As a condition precedent to qualifying for use of the simplified
1723 offering circular, an issuer shall agree to provide the office
1724 with an annual financial report containing a balance sheet as of
1725 the end of the issuer's fiscal year and a statement of income
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1726 for such year, prepared in accordance with United States
1727 generally accepted accounting principles and accompanied by an
1728 independent accountant's report. If the issuer has more than 100
1729 security holders at the end of a fiscal year, the financial
1730 statements must be audited. Annual financial reports must be
1731 filed with the office within 90 days after the close of the
1732 issuer's fiscal year for each of the first 5 years following the
1733 effective date of the registration.
1734 (4) The commission may, by rule:
1735 (a) Establish criteria relating to the issuance of equity
1736 securities, debt securities, insurance company securities, real
1737 estate investment trusts, oil and gas investments, and other
1738 investments. In establishing these criteria, the commission may
1739 consider the rules and regulations of the Securities and
1740 Exchange Commission and statements of policy by the North
1741 American Securities Administrators Association, Inc., relating
1742 to the registration of securities offerings. The criteria must
1743 include all of the following:
1744 1. The promoter's equity investment ratio.
1745 2. The financial condition of the issuer.
1746 3. The voting rights of shareholders.
1747 4. The grant of options or warrants to underwriters and
1748 others.
1749 5. Loans and other transactions with affiliates of the
1750 issuer.
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1751 6. The use, escrow, or refund of proceeds of the offering.
1752 (b) Prescribe forms requiring applications for the
1753 registration of securities to be submitted to the office,
1754 including a simplified offering circular to register, under this
1755 section, securities that are sold in offerings in which the
1756 aggregate offering price in any consecutive 12-month period does
1757 not exceed the amount provided in s. 3(b) of the Securities Act
1758 of 1933, as amended.
1759 (c) Establish procedures for depositing fees and filing
1760 documents by electronic means, provided that such procedures
1761 provide the office with the information and data required by
1762 this section.
1763 (d) Establish requirements and standards for the filing,
1764 content, and circulation of a preliminary, final, or amend ed
1765 prospectus, advertisements, and other sales literature. In
1766 establishing such requirements and standards, the commission
1767 shall consider the rules and regulations of the Securities and
1768 Exchange Commission relating to requirements for preliminary,
1769 final, or amended or supplemented prospectuses and the rules of
1770 the Financial Industry Regulatory Authority relating to
1771 advertisements and sales literature.
1772 (5) All of the following issuers are not eligible to
1773 submit a simplified offering circular:
1774 (a) An issuer that is subject to any of the
1775 disqualifications described in Securities and Exchange
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1776 Commission Rule 262, 17 C.F.R. s. 230.262, as amended, or that
1777 has been or is engaged or is about to engage in an activity that
1778 would be grounds for denial, revocation, or suspension under s.
1779 517.111. For purposes of this paragraph, an issuer includes an
1780 issuer's director, officer, general partner, manager or managing
1781 member, trustee, or a person owning at least 10 percent of the
1782 ownership interests of the issuer; a promoter or selling agent
1783 of the securities to be offered; or any officer, director,
1784 partner, or manager or managing member of such selling agent.
1785 (b) An issuer that is a development-stage company that
1786 either has no specific business plan or purpose or has indicated
1787 that its business plan is to merge with an unidentified business
1788 entity or entities.
1789 (c) An issuer of offerings in which the specific business
1790 or properties cannot be described.
1791 (d) An issuer that the office determines is ineligible
1792 because the simplified circular does not provide full and fair
1793 disclosure of material information for the type of offering to
1794 be registered by the issuer.
1795 (9)(a)(7) The office shall record the registration of a
1796 security in the register of securities if, upon examination of
1797 an any application, it finds that all of the following
1798 requirements are met: the office
1799 1. The application is complete.
1800 2. The fee imposed in subsection (8) has been paid.
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1801 3. The sale of the security would not be fraudulent and
1802 would not work or tend to work a fraud upon the purchaser.
1803 4. The terms of the sale of such securities would be fair,
1804 just, and equitable.
1805 5. The enterprise or business of the issuer is not based
1806 upon unsound business principles.
1807 (b) Upon registration, the security may be sold by the
1808 issuer or any registered dealer, subject, however, to the
1809 further order of the office shall find that the sale of the
1810 security referred to therein would not be fraudulent and would
1811 not work or tend to work a fraud upon the purchaser, that the
1812 terms of the sale of such securities would be fair, just, and
1813 equitable, and that the enterprise or business of the issuer is
1814 not based upon unsound business principles, it shall record the
1815 registration of such security in the register of securities; and
1816 thereupon such security so registered may be sold by any
1817 registered dealer, subject, however, to the further order of the
1818 office. In order to determine if an offering is fair, just, and
1819 equitable, the commission may by rule establish requirements and
1820 standards for the filing, content, and circulation of any
1821 preliminary, final, or amended prospectus and other sales
1822 literature and may by rule establish merit qualification
1823 criteria relating to the issuance of equity securities, de bt
1824 securities, insurance company securities, real estate investment
1825 trusts, and other traditional and nontraditional investments,
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1826 including, but not limited to, oil and gas investments. The
1827 criteria may include such elements as the promoter's equity
1828 investment ratio, the financial condition of the issuer, the
1829 voting rights of shareholders, the grant of options or warrants
1830 to underwriters and others, loans and other affiliated
1831 transaction, the use or refund of proceeds of the offering, and
1832 such other relevant criteria as the office in its judgment may
1833 deem necessary to such determination.
1834 Section 11. Subsection (2) of section 517.101, Florida
1835 Statutes, is amended to read:
1836 517.101 Consent to service.—
1837 (2) Any such action must shall be brought either in the
1838 county of the plaintiff's residence or in the county in which
1839 the office has its official headquarters. The written consent
1840 must shall be authenticated by the seal of the said issuer, if
1841 it has a seal, and by the acknowledged signature of a director,
1842 manager, managing member, general partner, trustee, or officer
1843 of the issuer member of the copartnership or company, or by the
1844 acknowledged signature of any officer of the incorporated or
1845 unincorporated association, if it be an incorporated or
1846 unincorporated association, duly authorized by resolution of the
1847 board of directors, trustees, or managers of the corporation or
1848 association, and must shall in such case be accompanied by a
1849 duly certified copy of the resolution of the issuer's board of
1850 directors, trustees, managers, managing members, or general
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1851 partners or managers of the corporation or association,
1852 authorizing the signer to execute the consent officers to
1853 execute the same. In case any process or pleadings mentioned in
1854 this chapter are served upon the office, service must it shall
1855 be by duplicate copies, one of which must shall be filed in the
1856 office and the other another immediately forwarded by the office
1857 by registered mail to the principal office of the issuer against
1858 which the said process or pleadings are directed.
1859 Section 12. Section 517.131, Florida Statutes, is amended
1860 to read:
1861 517.131 Securities Guaranty Fund.—
1862 (1) As used in this section, the term "final judgment"
1863 includes an arbitration award confirmed by a court of c ompetent
1864 jurisdiction.
1865 (2)(a) The Chief Financial Officer shall establish a
1866 Securities Guaranty Fund to provide monetary relief to victims
1867 of securities violations under this chapter who are entitled to
1868 monetary damages or restitution and cannot recover the full
1869 amount of such monetary damages or restitution from the
1870 wrongdoer. An amount not exceeding 20 percent of all revenues
1871 received as assessment fees pursuant to s. 517.12(9) and (10)
1872 for dealers and investment advisers or s. 517.1201 for federal
1873 covered advisers and an amount not exceeding 10 percent of all
1874 revenues received as assessment fees pursuant to s. 517.12(9)
1875 and (10) for associated persons must shall be part of the
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1876 regular registration license fee and must shall be transferred
1877 to or deposited in the Securities Guaranty Fund.
1878 (b) If the balance in the Securities Guaranty Fund at any
1879 time exceeds $1.5 million, transfer of assessment fees to the
1880 this fund must shall be discontinued at the end of that
1881 registration license year, and transfer of such assessment fees
1882 may shall not resume be resumed unless the fund balance is
1883 reduced below $1 million by disbursement made in accordance with
1884 s. 517.141.
1885 (2) The Securities Guaranty Fund shall be disbursed as
1886 provided in s. 517.141 to a person who is adjudged by a court of
1887 competent jurisdiction to have suffered monetary damages as a
1888 result of any of the following acts committed by a dealer,
1889 investment adviser, or associated person who was licensed under
1890 this chapter at the time the act was committed:
1891 (a) A violation of s. 517.07.
1892 (b) A violation of s. 517.301.
1893 (3) A Any person is eligible for payment to seek recovery
1894 from the Securities Guaranty Fund if:
1895 (a) The act for which recovery is sought occurred on or
1896 after October 1, 2024, and the person:
1897 1. Holds an unsatisfied final judgment in which a
1898 wrongdoer was found to have violated s. 517.07 or s. 517.301;
1899 2. Has applied any amount recovered from the judgment
1900 debtor or any other source to the damages awarded by the court
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1901 or arbitrator; and
1902 3. Is a natural person who was a resident of this state,
1903 or is a business entity that was domiciled in this state, at the
1904 time of the violation of s. 517.07 or s. 517.301; or
1905 (b) The person is a receiver appointed pursuant to s.
1906 517.191(2) by a court of competent jurisdiction for a wrongdoer
1907 ordered to pay restitution under s. 517.191(3) as a result of a
1908 violation of s. 517.07 or s. 517.301 which has requested payment
1909 from the Securities Guaranty Fund on behalf of a person eligible
1910 for payment under paragraph (a)
1911 (a) Such person has received final judgment in a court of
1912 competent jurisdiction in any action wherein the cause of action
1913 was based on a violation of those sections referred to in
1914 subsection (2).
1915 (b) Such person has made all reasonable searches and
1916 inquiries to ascertain whether the judgment debtor possesses
1917 real or personal property or other assets subject to being sold
1918 or applied in satisfaction of the judgment, and by her or his
1919 search the person has discovered no property or assets; or s he
1920 or he has discovered property and assets and has taken all
1921 necessary action and proceedings for the application thereof to
1922 the judgment, but the amount thereby realized was insufficient
1923 to satisfy the judgment. To verify compliance with such
1924 condition, the office may require such person to have a writ of
1925 execution be issued upon such judgment, may require a showing
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1926 that no personal or real property of the judgment debtor liable
1927 to be levied upon in complete satisfaction of the judgment can
1928 be found, or may require an affidavit from the claimant setting
1929 forth the reasonable searches and inquiries undertaken and the
1930 result of those searches and inquiries.
1931 (c) Such person has applied any amounts recovered from the
1932 judgment debtor, or from any other source, to the damages
1933 awarded by the court.
1934 (d) The act for which recovery is sought occurred on or
1935 after January 1, 1979.
1936 (e) The office waives compliance with the requirements of
1937 paragraph (a) or paragraph (b). The office may waive such
1938 compliance if the dealer, investment adviser, or associated
1939 person which is the subject of the claim filed with the office
1940 is the subject of any proceeding in which a receiver has been
1941 appointed by a court of competent jurisdiction. If the office
1942 waives such compliance, the office may, upon petition by the
1943 debtor or the court-appointed trustee, examiner, or receiver,
1944 distribute funds from the Securities Guaranty Fund up to the
1945 amount allowed under s. 517.141. Any waiver granted pursuant to
1946 this section shall be considered a judgment for purposes of
1947 complying with the requirements of this section and of s.
1948 517.141.
1949 (4) A person who has done any of the following is not
1950 eligible for payment from the Securities Guaranty Fund:
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1951 (a) Participated or assisted in a violation of this
1952 chapter.
1953 (b) Attempted to commit or committed a violation of this
1954 chapter.
1955 (c) Profited from a violation of this chapter.
1956 (5) An eligible person, or a receiver on behalf of the
1957 eligible person, seeking payment from the Securities Guaranty
1958 Fund must file with the office a written application on a form
1959 that the commission may prescribe by rule. The commission may
1960 adopt by rule procedures for filing documents by electronic
1961 means, provided that such procedures provide the office with the
1962 information and data required by this section. The application
1963 must be filed with the office within 1 year after the date of
1964 the final judgment, the date on which a restitution order has
1965 been ripe for execution, or the date of any appellate decision
1966 thereon, and, at minimum, must contain all of the following
1967 information:
1968 (a) The eligible person's and, if applicable, the
1969 receiver's full name, address, and contact information.
1970 (b) The person ordered to pay restitution.
1971 (c) If the eligible person is a business entity, t he
1972 eligible person's type and place of organization and, as
1973 applicable, a copy, as amended, of its articles of
1974 incorporation, articles of organization, trust agreement, or
1975 partnership agreement.
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1976 (d) Any final judgment and a copy thereof.
1977 (e) Any restitution order pursuant to s. 517.191(3), and a
1978 copy thereof.
1979 (f) An affidavit from the eligible person stating either
1980 one of the following:
1981 1. That the eligible person has made all reasonable
1982 searches and inquiries to ascertain whether the judgment debtor
1983 possesses real or personal property or other assets subject to
1984 being sold or applied in satisfaction of the final judgment and,
1985 by the eligible person's search, that the eligible person has
1986 not discovered any property or assets.
1987 2. That the eligible person has taken necessary action on
1988 the property and assets of the wrongdoers but the final judgment
1989 remains unsatisfied.
1990 (g) If the application is filed by the receiver, an
1991 affidavit from the receiver stating the amount of restitution
1992 owed to the eligible person on whose behalf the claim is filed;
1993 the amount of any money, property, or assets paid to the
1994 eligible person on whose behalf the claim is filed by the person
1995 over whom the receiver is appointed; and the amount of any
1996 unsatisfied portion of any eligible person's order of
1997 restitution.
1998 (h) The eligible person's residence or domicile at the
1999 time of the violation of s. 517.07 or s. 517.301 which resulted
2000 in the eligible person's monetary damages.
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2001 (i) The amount of any unsatisfied portion of the eligible
2002 person's final judgment.
2003 (j) Whether an appeal or motion to vacate an arbitration
2004 award has been filed.
2005 (6) If the office finds that a person is eligible for
2006 payment from the Securities Guaranty Fund and if the person has
2007 complied with this section and the rules adopted under this
2008 section, the office must approve payment to such person from the
2009 fund. Within 90 days after the office's receipt of a complete
2010 application, each eligible person or receiver must be given
2011 written notice, personally or by mail, that the office intends
2012 to approve or deny, or has approved or denied, the application
2013 for payment from the Securities Guaranty Fund.
2014 (7) Upon receipt by the eligible person or receiver of
2015 notice of the office's decision that the eligible person's o r
2016 receiver's application for payment from the Securities Guaranty
2017 Fund is approved, and before any disbursement, the eligible
2018 person shall assign to the office on a form prescribed by
2019 commission rule all right, title, and interest in the final
2020 judgment or order of restitution equal to the amount of such
2021 payment.
2022 (8) The office shall deem an application for payment from
2023 the Securities Guaranty Fund abandoned if the eligible person or
2024 receiver, or any person acting on behalf of the eligible person
2025 or receiver, fails to timely complete the application as
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2026 prescribed by commission rule. The time period to complete an
2027 application must be tolled during the pendency of an appeal or
2028 motion to vacate an arbitration award.
2029 (4) Any person who files an action that may result in the
2030 disbursement of funds from the Securities Guaranty Fund pursuant
2031 to the provisions of s. 517.141 shall give written notice by
2032 certified mail to the office as soon as practicable after such
2033 action has been filed. The failure to give such not ice shall not
2034 bar a payment from the Securities Guaranty Fund if all of the
2035 conditions specified in subsection (3) are satisfied.
2036 (5) The commission may adopt rules pursuant to ss.
2037 120.536(1) and 120.54 specifying the procedures for complying
2038 with subsections (2), (3), and (4), including rules for the form
2039 of submission and guidelines for the sufficiency and content of
2040 submissions of notices and claims.
2041 Section 13. Section 517.141, Florida Statutes, is amended
2042 to read:
2043 517.141 Payment from the fund.—
2044 (1) As used in this section, the term:
2045 (a) "Claimant" means a person determined eligible for
2046 payment under s. 517.131 that is approved by the office for
2047 payment from the Securities Guaranty Fund.
2048 (b) "Final judgment" includes an arbitration award
2049 confirmed by a court of competent jurisdiction.
2050 (c) "Specified adult" has the same meaning as in s.
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2051 517.34(1).
2052 (2) A claimant is entitled to disbursement from the
2053 Securities Guaranty Fund in the amount equal to the lesser of:
2054 (a) The unsatisfied portion of the claimant's final
2055 judgment or final order of restitution, but only to the extent
2056 that the final judgment or final order of restitution reflects
2057 actual or compensatory damages, excluding postjudgment interest,
2058 costs, and attorney fees; or
2059 (b)1. The sum of $15,000; or
2060 2. If the claimant is a specified adult or if a specified
2061 adult is a beneficial owner or beneficiary of the claimant, the
2062 sum of $25,000 Any person who meets all of the conditions
2063 prescribed in s. 517.131 may apply to the office fo r payment to
2064 be made to such person from the Securities Guaranty Fund in the
2065 amount equal to the unsatisfied portion of such person's
2066 judgment or $10,000, whichever is less, but only to the extent
2067 and amount reflected in the judgment as being actual or
2068 compensatory damages, excluding postjudgment interest, costs,
2069 and attorney's fees.
2070 (3)(2) Regardless of the number of claims or claimants
2071 involved, payments for claims are shall be limited in the
2072 aggregate to $250,000 $100,000 against any one dealer,
2073 investment adviser, or associated person. If the total claim
2074 filed by a receiver on behalf of multiple claimants exceeds
2075 claims exceed the aggregate limit of $250,000 $100,000, the
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2076 office must shall prorate the payment to each claimant based
2077 upon the ratio that each claimant's individual the person's
2078 claim bears to the total claim claims filed.
2079 (4) If at any time the balance in the Securities Guaranty
2080 Fund is insufficient to satisfy a valid claim or portion of a
2081 valid claim approved by the office, the office must satisfy the
2082 unpaid claim or portion of the valid claim as soon as a
2083 sufficient amount of money has been deposited into or
2084 transferred to the Securities Guaranty Fund. If more than one
2085 unsatisfied claim is outstanding, the claims must be paid in the
2086 sequence in which the claims were approved by final order of the
2087 office, which final order is not subject to an appeal or other
2088 pending proceeding.
2089 (5) All payments and disbursements made from the
2090 Securities Guaranty Fund must be made by the Chief Financial
2091 Officer, or his or her designee, upon authorization by the
2092 office. The office shall submit such authorization within 30
2093 days after the approval of an eligible person for payment from
2094 the Securities Guaranty Fund
2095 (3) No payment shall be made on any claim against any one
2096 dealer, investment adviser, or associated person before the
2097 expiration of 2 years from the date any claimant is found by the
2098 office to be eligible for recovery pursuant to this section. If
2099 during this 2-year period more than one claim is filed against
2100 the same dealer, investment adviser, or associated person, or if
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2101 the office receives notice pursuant to s. 517.131(4) that an
2102 action against the same dealer, investment adviser, or
2103 associated person is pending, all such claims and notices of
2104 pending claims received during this period against the same
2105 dealer, investment adviser, or associated person may be handled
2106 by the office as provided in this section. Two years after the
2107 first claimant against that same dealer, investment adviser, or
2108 associated person applies for payment pursuant to this section:
2109 (a) The office shall determine those persons eligible for
2110 payment or for potential payment in the event of a pending
2111 action. All such persons may be entitled to receive their pro
2112 rata shares of the fund as provided in this section.
2113 (b) Those persons who meet all the conditions prescribed
2114 in s. 517.131 and who have applied for payment pursuant to this
2115 section will be entitled to receive their pro rata shares of the
2116 total disbursement.
2117 (c) Those persons who have filed notice with the office of
2118 a pending claim pursuant to s. 517.131(4) but who are not yet
2119 eligible for payment from the fund will be entitled to receive
2120 their pro rata shares of the total disbursement once they have
2121 complied with subsection (1). However, in the event that the
2122 amounts they are eligible to receive pursuant to subsection (1)
2123 are less than their pro rata shares as determined under this
2124 section, any excess shall be distributed pro rata to those
2125 persons entitled to disbursement under this subsection whose pro
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2126 rata shares of the total disbursement were less than the amounts
2127 of their claims.
2128 (6)(4) Individual claims filed by persons owning the same
2129 joint account, or claims arising stemming from any other type of
2130 account maintained by a particular licensee on which more than
2131 one name appears, must shall be treated as the claims of one
2132 eligible claimant with respect to payment from the Securities
2133 Guaranty Fund. If a claimant who has obtained a final judgment
2134 or final order of restitution that which qualifies for
2135 disbursement under s. 517.131 has maintained more than one
2136 account with the dealer, investment adviser, or associated
2137 person who is the subject of the claims, for purposes of
2138 disbursement of the Securities Guaranty Fund, all such accounts,
2139 whether joint or individual, must shall be considered as one
2140 account and shall entitle such claimant to only one distribution
2141 from the fund not to exceed the lesser of $10,000 or the
2142 unsatisfied portion of such claimant's judgment as provided in
2143 subsection (1). To the extent that a claimant obtains more than
2144 one final judgment or final order of restitution against a
2145 person dealer, investment adviser, or one or more associated
2146 persons arising out of the same transactions, occurrences, or
2147 conduct or out of such the dealer's, investment adviser's, or
2148 associated person's handling of the claimant's account, the
2149 final such judgments or final orders of restitution must shall
2150 be consolidated for purposes of this section and shall entitle
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2151 the claimant to only one disbursement from the fund not to
2152 exceed the lesser of $10,000 or the unsatisfied portion of such
2153 claimant's judgment as provided in subsection (1).
2154 (7)(5) If the final judgment or final order of restitution
2155 that gave rise to the claim is overturned in any appeal or in
2156 any collateral proceeding, the claimant must shall reimburse the
2157 Securities Guaranty Fund all amounts paid from the fund to the
2158 claimant on the claim. If the claimant satisfies the final
2159 judgment or final order of restitution specified in s.
2160 517.131(3)(a), the claimant must shall reimburse the Securities
2161 Guaranty Fund all amounts paid from the fund to the claimant on
2162 the claim. Such reimbursement must shall be paid to the
2163 Department of Financial Services office within 60 days after the
2164 final resolution of the appellate or collateral proceedings or
2165 the satisfaction of the final judgment or order of restitution,
2166 with the 60-day period commencing on the date the final order or
2167 decision is entered in such proceedings.
2168 (8)(6) If a claimant receives payments in excess of that
2169 which is permitted under this chapter, the claimant must shall
2170 reimburse the Securities Guaranty Fund such excess within 60
2171 days after the claimant receives such excess payment or after
2172 the payment is determined to be in excess of that permitted by
2173 law, whichever is later.
2174 (9) A claimant who knowingly and willfully files or causes
2175 to be filed an application under s. 517.131 or documents
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2176 supporting the application, any of which contain false,
2177 incomplete, or misleading information in any material aspect,
2178 forfeits all payments from the Securities Guaranty Fund and
2179 commits a violation of s. 517.301(1)(c).
2180 (10)(7) The Department of Financial Services office may
2181 institute legal proceedings to enforce compliance with this
2182 section and with s. 517.131 to recover moneys owed to the
2183 Securities Guaranty Fund, and is shall be entitled to recover
2184 interest, costs, and attorney attorney's fees in any action
2185 brought pursuant to this section in which the department office
2186 prevails.
2187 (8) If at any time the money in the Securities Guaranty
2188 Fund is insufficient to satisfy any valid claim or portion of a
2189 valid claim approved by the office, the office shall satisfy
2190 such unpaid claim or portion of such valid claim as soon as a
2191 sufficient amount of money has been deposited in or transferred
2192 to the fund. When there is more than one unsatisfied claim
2193 outstanding, such claims shall be paid in the order in which the
2194 claims were approved by final order of the office, which o rder
2195 is not subject to an appeal or other pending proceeding.
2196 (9) Upon receipt by the claimant of the payment from the
2197 Securities Guaranty Fund, the claimant shall assign any
2198 additional right, title, and interest in the judgment, to the
2199 extent of such payment, to the office. If the provisions of s.
2200 517.131(3)(e) apply, the claimant must assign to the office any
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2201 right, title, and interest in the debt to the extent of any
2202 payment by the office from the Securities Guaranty Fund.
2203 (10) All payments and disbursements made from the
2204 Securities Guaranty Fund shall be made by the Chief Financial
2205 Officer upon authorization signed by the director of the office,
2206 or such agent as she or he may designate.
2207 Section 14. Section 517.191, Florida Statutes, is amended
2208 to read:
2209 517.191 Enforcement by the Office of Financial Regulation
2210 Injunction to restrain violations; civil penalties; enforcement
2211 by Attorney General.—
2212 (1) When it appears to the office, either upon complaint
2213 or otherwise, that a person has engaged or is about to engage in
2214 any act or practice constituting a violation of this chapter or
2215 a rule or order hereunder, the office may investigate; and
2216 whenever it shall believe from evidence satisfactory to it that
2217 any such person has engaged, is engaged, or is about to engage
2218 in any act or practice constituting a violation of this chapter
2219 or a rule or order hereunder, the office may, in addition to any
2220 other remedies, bring action in the name and on behalf of the
2221 state against such person and any other person concerned in or
2222 in any way participating in or about to participate in such
2223 practices or engaging therein or doing any act or acts in
2224 furtherance thereof or in violation of this chapter to enjoin
2225 such person or persons from continuing such fraudulent practice s
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2226 or engaging therein or doing any act or acts in furtherance
2227 thereof or in violation of this chapter. In any such court
2228 proceedings, the office may apply for, and on due showing be
2229 entitled to have issued, the court's subpoena requiring
2230 forthwith the appearance of any defendant and her or his
2231 employees, associated persons, or agents and the production of
2232 documents, books, and records that may appear necessary for the
2233 hearing of such petition, to testify or give evidence concerning
2234 the acts or conduct or things complained of in such application
2235 for injunction. In such action, the equity courts shall have
2236 jurisdiction of the subject matter, and a judgment may be
2237 entered awarding such injunction as may be proper.
2238 (2) In addition to all other means provided by law for the
2239 enforcement of any temporary restraining order, temporary
2240 injunction, or permanent injunction issued in any such court
2241 proceedings, the court shall have the power and jurisdiction,
2242 upon application of the office, to impound and to appoint a
2243 receiver or administrator for the property, assets, and business
2244 of the defendant, including, but not limited to, the books,
2245 records, documents, and papers appertaining thereto. Such
2246 receiver or administrator, when appointed and qualified, shall
2247 have all powers and duties as to custody, collection,
2248 administration, winding up, and liquidation of such said
2249 property and business as may shall from time to time be
2250 conferred upon her or him by the court. In any such action, the
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2251 court may issue orders and decrees staying all pending suits and
2252 enjoining any further suits affecting the receiver's or
2253 administrator's custody or possession of such the said property,
2254 assets, and business or, in its discretion, may with the consent
2255 of the presiding judge of the circuit require that all such
2256 suits be assigned to the circuit court judge appointing such the
2257 said receiver or administrator.
2258 (3) In addition to, or in lieu of, any other remedies
2259 provided by this chapter, the office may apply to the court
2260 hearing the this matter for an order directing the defendant to
2261 make restitution of those sums shown by the office to have been
2262 obtained in violation of any of the provisions of this chapter.
2263 The office has standing to request such restitution on behalf of
2264 victims in cases brought by the office under this chapter,
2265 regardless of the appointment of an administrator or receiver
2266 under subsection (2) or an injunction under subsection (1).
2267 Further, such restitution must shall, at the option of the
2268 court, be payable to the administrator or receiver appointed
2269 pursuant to this section or directly to the persons whose assets
2270 were obtained in violation of this chapter.
2271 (4) In addition to any other remedies provided by this
2272 chapter, the office may apply to the court hearing the matter
2273 for, and the court has shall have jurisdiction to impose, a
2274 civil penalty against any person found to have violated any
2275 provision of this chapter, any rule or order adopted by the
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2276 commission or the office, or any written agreement entered into
2277 with the office in an amount not to exceed any of the following:
2278 (a) The greater of $20,000 $10,000 for a natural person or
2279 $25,000 for a business entity any other person, or the gross
2280 amount of any pecuniary loss to investors or pecuniary gain to a
2281 natural person or business entity such defendant for each such
2282 violation, other than a violation of s. 517.301, plus the
2283 greater of $50,000 for a natural person or $250,000 for a
2284 business entity any other person, or the gross amount of any
2285 pecuniary loss to investors or pecuniary gain to a natural
2286 person or business entity such defendant for each violation of
2287 s. 517.301.
2288 (b) Twice the amount of the civil penalty that would
2289 otherwise be imposed under this subsection if a specified adult,
2290 as defined in s. 517.34(1), is the victim of a violation of this
2291 chapter.
2292
2293 All civil penalties collected pursuant to this subsection must
2294 shall be deposited into the Anti-Fraud Trust Fund. The office
2295 may recover any costs and attorney fees related to its
2296 investigation or enforcement of this section. Notwithstanding
2297 any other law, such moneys recovered by the office must be
2298 deposited into the Anti-Fraud Trust Fund.
2299 (5) For purposes of any action brought by the office under
2300 this section, a control person who controls any person found to
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2301 have violated this chapter or any rule adopted thereunder is
2302 jointly and severally liable with, and to the same extent as,
2303 the controlled person in any action brought by the office under
2304 this section unless the control person can establish by a
2305 preponderance of the evidence that he or she acted in good faith
2306 and did not directly or indirectly induce the act that
2307 constitutes the violation or cause of action.
2308 (6) For purposes of any action brought by the office under
2309 this section, a person who knowingly or recklessly provides
2310 substantial assistance to another person in violation of this
2311 chapter or any rule adopted thereunder is deemed to violate this
2312 chapter or the rule to the same extent as the person to whom
2313 such assistance is provided.
2314 (7) The office may issue and serve upon a person a cease
2315 and desist order if the office has reason to believe that the
2316 person violates, has violated, or is about to violate this
2317 chapter, any commission or office rule or order, or any written
2318 agreement entered into with the office.
2319 (8) If the office finds that any conduct described in
2320 subsection (7) presents an immediate danger to the public,
2321 requiring an immediate final order, the office may issue an
2322 emergency cease and desist order reciting with particularity the
2323 facts underlying such findings. The emergency cease and desist
2324 order is effective immediately upon service of a copy of the
2325 order on the respondent named in the order and remains effective
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2326 for 90 days after issuance. If the office begins nonemergency
2327 cease and desist proceedings under subsection (7), the emergency
2328 cease and desist order remains effective until the conclusion of
2329 the proceedings under ss. 120.569 and 120.57.
2330 (9) The office may impose and collect an administrative
2331 fine against any person found to have violated any provision of
2332 this chapter, any rule or order adopted by the commission or
2333 office, or any written agreement entered into with the office in
2334 an amount not to exceed the penalties provided in subsection
2335 (4). All fines collected under this subsection must be deposited
2336 into the Anti-Fraud Trust Fund.
2337 (10) The office may bar, permanently or for a specific
2338 period of time, any person found to have violated this chapter,
2339 any rule or order adopted by the commission or office, or any
2340 written agreement entered into with the office from submitting
2341 an application or notification for a license or registration
2342 with the office.
2343 (11) In addition to all other means provided by law for
2344 enforcing any of the provisions of this chapter, when the
2345 Attorney General, upon complaint or otherwise, has reason to
2346 believe that a person has engaged or is engaged in any act or
2347 practice constituting a violation of s. 517.275 or, s. 517.301,
2348 s. 517.311, or s. 517.312, or any rule or order issued under
2349 such sections, the Attorney General may investigate and bring an
2350 action to enforce these provisions as provided in ss. 517.171,
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2351 517.201, and 517.2015 after receiving written approval from the
2352 office. Such an action may be brought against such person and
2353 any other person in any way participating in such act or
2354 practice or engaging in such act or practice or doing any act in
2355 furtherance of such act or practice, to obtain injunctive
2356 relief, restitution, civil penalties, and any remedies provided
2357 for in this section. The Attorney General may recover any costs
2358 and attorney fees related to the Attorney General's
2359 investigation or enforcement of this section. Notwithstanding
2360 any other provision of law, moneys recovered by the A ttorney
2361 General for costs, attorney fees, and civil penalties for a
2362 violation of s. 517.275 or, s. 517.301, s. 517.311, or s.
2363 517.312, or any rule or order issued pursuant to such sections,
2364 must shall be deposited in the Legal Affairs Revolving Trust
2365 Fund. The Legal Affairs Revolving Trust Fund may be used to
2366 investigate and enforce this section.
2367 (12)(6) This section does not limit the authority of the
2368 office to bring an administrative action against any person that
2369 is the subject of a civil action brought pursuant to this
2370 section or limit the authority of the office to engage in
2371 investigations or enforcement actions with the Attorney General.
2372 However, a person may not be subject to both a civil penalty
2373 under subsection (4) and an administrative fine under subsection
2374 (9) s. 517.221(3) as the result of the same facts.
2375 (13)(7) Notwithstanding s. 95.11(4)(f), an enforcement
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2376 action brought under this section based on a violation of any
2377 provision of this chapter or any rule or order issued under this
2378 chapter shall be brought within 6 years after the facts giving
2379 rise to the cause of action were discovered or should have been
2380 discovered with the exercise of due diligence, but not more than
2381 8 years after the date such violation occurred.
2382 (14) This chapter does not limit any statutory right of
2383 the state to punish a person for a violation of a law.
2384 (15) When not in conflict with the Constitution or laws of
2385 the United States, the courts of this state have the same
2386 jurisdiction over civil suits instituted in connection with the
2387 sale or offer of sale of securities under any laws of the United
2388 States as the courts of this state may have with regard to
2389 similar cases instituted under the laws of this state.
2390 Section 15. Section 517.211, Florida Statutes, is amended
2391 to read:
2392 517.211 Private remedies available in cases of unlawful
2393 sale.—
2394 (1) Every sale made in violation of either s. 517.07 or s.
2395 517.12(1), (3), (4), (8), (10), (12), (15), or (17) may be
2396 rescinded at the election of the purchaser; however, except a
2397 sale made in violation of the provisions of s. 517.1202(3)
2398 relating to a renewal of a branch office notification or shall
2399 not be subject to this section, and a sale made in violation of
2400 the provisions of s. 517.12(12) relating to filing a change of
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2401 address amendment is shall not be subject to this section. Each
2402 person making the sale and every director, officer, partner, or
2403 agent of or for the seller, if the director, officer, partner,
2404 or agent has personally participated or aided in making the
2405 sale, is jointly and severally liable to the purchaser in an
2406 action for rescission, if the purchaser still owns the security,
2407 or for damages, if the purchaser has sold the security. No
2408 purchaser otherwise entitled will have the benefit of this
2409 subsection who has refused or failed, within 30 days after of
2410 receipt, to accept an offer made in writing by the seller, if
2411 the purchaser has not sold the security, to take back the
2412 security in question and to refund the full amount paid by the
2413 purchaser or, if the purchaser has sold the security, to pay the
2414 purchaser an amount equal to the difference between the amount
2415 paid for the security and the amount received by the purchaser
2416 on the sale of the security, together, in either case, with
2417 interest on the full amount paid for the security by the
2418 purchaser at the legal rate, pursuant to s. 55.03, for the
2419 period from the date of payment by the purchaser to the date of
2420 repayment, less the amount of any income received by the
2421 purchaser on the security.
2422 (2) Any person purchasing or selling a security in
2423 violation of s. 517.301, and every director, officer, partner,
2424 or agent of or for the purchaser or seller, if the director,
2425 officer, partner, or agent has personally participated or aided
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2426 in making the sale or purchase, is jointly and severally liable
2427 to the person selling the security to or purchasing the security
2428 from such person in an action for rescission, if the plaintiff
2429 still owns the security, or for damages, if the plaintiff has
2430 sold the security.
2431 (3) For purposes of any action brought under this section,
2432 a control person who controls any person found to have violated
2433 any provision specified in subsection (1) is jointly and
2434 severally liable with, and to the same extent as, such
2435 controlled person in any action brought under this section
2436 unless the control person can establish by a preponderance of
2437 the evidence that he or she acted in good faith and did not
2438 directly or indirectly induce the act that constitutes the
2439 violation or cause of action.
2440 (4) In an action for rescission:
2441 (a) A purchaser may recover the consideration paid for the
2442 security or investment, plus interest thereon at the legal rate
2443 from the date of purchase, less the amount of any income
2444 received by the purchaser on the security or investment upon
2445 tender of the security or investment.
2446 (b) A seller may recover the security upon tender of the
2447 consideration paid for the security, plus interest at the legal
2448 rate from the date of purchase, less the amount of any income
2449 received by the defendant on the security.
2450 (5)(4) In an action for damages brought by a purchaser of
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2451 a security or investment, the plaintiff must shall recover an
2452 amount equal to the difference between:
2453 (a) The consideration paid for the security or investment,
2454 plus interest thereon at the legal rate from the date of
2455 purchase; and
2456 (b) The value of the security or investment at the time it
2457 was disposed of by the plaintiff, plus the amount of any income
2458 received on the security or investment by the plaintiff.
2459 (6)(5) In an action for damages brought by a seller of a
2460 security, the plaintiff shall recover an amount equal to the
2461 difference between:
2462 (a) The value of the security at the time of the
2463 complaint, plus the amount of any income received by the
2464 defendant on the security; and
2465 (b) The consideration received for the security, plus
2466 interest at the legal rate from the date of sale.
2467 (7)(6) In any action brought under this section, including
2468 an appeal, the court shall award reasonable attorney attorneys'
2469 fees to the prevailing party unless the court finds that the
2470 award of such fees would be unjust.
2471 (8) This chapter does not limit any statutory or common -
2472 law right of a person to bring an action in a court for an act
2473 involved in the sale of securities or investments.
2474 (9) The same civil remedies provided by the laws of the
2475 United States for the purchasers or sellers of securities in
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2476 interstate commerce also extend to purchasers or sellers of
2477 securities under this chapter.
2478 Section 16. Section 517.221, Florida Statutes, is
2479 repealed.
2480 Section 17. Section 517.241, Florida Statutes, is
2481 repealed.
2482 Section 18. Section 517.301, Florida Statutes, is amended
2483 to read:
2484 517.301 Fraudulent transactions; falsification or
2485 concealment of facts.—
2486 (1) It is unlawful and a violation of the provisions of
2487 this chapter for a person:
2488 (a) In connection with the rendering of any investment
2489 advice or in connection with the offer, sale, or purchase of any
2490 investment or security, including any security exempted under
2491 the provisions of s. 517.051 and including any security sold in
2492 a transaction exempted under the provisions of s. 517.061, s.
2493 517.0611, or s. 517.0612, directly or indirectly:
2494 1. To employ any device, scheme, or artifice to defraud;
2495 2. To obtain money or property by means of any untrue
2496 statement of a material fact or any omission to state a material
2497 fact necessary in order to make the statements made, in the
2498 light of the circumstances under which they were made, not
2499 misleading; or
2500 3. To engage in any transaction, practice, or course of
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2501 business which operates or would operate as a fraud or deceit
2502 upon a person.
2503 (b) By use of any means, to publish, give publicity to, or
2504 circulate any notice, circular, advertisement, newspaper,
2505 article, letter, investment service, communication, or broadcast
2506 that, although which, though not purporting to offer a security
2507 for sale, describes such security for a consideration received
2508 or to be received directly or indirectly from an issuer,
2509 underwriter, or dealer, or from an agent or employee of an
2510 issuer, underwriter, or dealer, without fully disclosing the
2511 receipt, whether past or prospective, of such consideration and
2512 the amount of the consideration.
2513 (c) In any matter within the jurisdiction of the office,
2514 to knowingly and willfully falsify, conceal, or cover up, by any
2515 trick, scheme, or device, a material fact, make any false,
2516 fictitious, or fraudulent statement or representation, or make
2517 or use any false writing or document, knowing the same to
2518 contain any false, fictitious, or fraudulent statement or entry.
2519 (2) For purposes of ss. 517.311 and 517.312 and this
2520 section, the term "investment" means any commitment of money or
2521 property principally induced by a representation that an
2522 economic benefit may be derived from such commitment, except
2523 that the term does not include a commitment of money or property
2524 for:
2525 (a) The purchase of a business opportunity, business
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2526 enterprise, or real property through a person licensed under
2527 chapter 475 or registered under former chapter 498; or
2528 (b) The purchase of tangible personal property through a
2529 person not engaged in telephone solicitation, electronic mail,
2530 text messages, social media, or other electronic means where
2531 said property is offered and sold in accordance with the
2532 following conditions:
2533 1. there are no specific representations or guarantees
2534 made by the offeror or seller as to the economic benefit to be
2535 derived from the purchase.;
2536 2. The tangible property is delivered to the purchaser
2537 within 30 days after sale, except that such 30-day period may be
2538 extended by the office if market conditions so warrant; and
2539 3. The seller has offered the purchaser a full refund
2540 policy in writing, exercisable by the purchaser within 10 days
2541 of the date of delivery of such tangible personal property,
2542 except that the amount of such refund may not exceed the bid
2543 price in effect at the time the property is returned to the
2544 seller. If the applicable sellers' market is closed at the time
2545 the property is returned to the seller for a refund, the amount
2546 of such refund shall be based on the bid price for such property
2547 at the next opening of such market.
2548 (3) It is unlawful for a person in issuing or selling a
2549 security within this state, including a security exempted under
2550 s. 517.051 and including a transaction exempted under s.
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2551 517.061, s. 517.0611, or s. 517.0612, to misrepresent that such
2552 security or business entity has been guaranteed, sponsored,
2553 recommended, or approved by the state or an agency or officer of
2554 the state or by the United States or an agency or officer of the
2555 United States.
2556 (4) It is unlawful for a person registered or required to
2557 be registered, or subject to the notice requirements, under this
2558 chapter, including such persons and issuers who are subject to
2559 s. 517.051, s. 517.061, s. 517.0611, s. 517.0612, or s. 517.081,
2560 to misrepresent that such person has been sponsored,
2561 recommended, or approved, or that such person's abilities or
2562 qualifications have in any respect been approved, by the state
2563 or an agency or officer of the state or by the United St ates or
2564 an agency or officer of the United States.
2565 (5) It is unlawful and a violation of this chapter for a
2566 person in connection with the offer or sale of an investment to
2567 obtain money or property by means of:
2568 (a) A misrepresentation that the investment offered or
2569 sold is guaranteed, sponsored, recommended, or approved by the
2570 state or an agency or officer of the state or by the United
2571 States or an agency or officer of the United States; or
2572 (b) A misrepresentation that such person is sponsored,
2573 recommended, or approved, or that such person's abilities or
2574 qualifications have in any respect been examined, by the state
2575 or an agency or officer of the state or by the United States or
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2576 an agency or officer of the United States.
2577 (6)(a) Subsection (3) or subsection (4) may not be
2578 construed to prohibit a statement that a person or security is
2579 registered or has made a notice filing under this chapter if
2580 such statement is required by this chapter or rules promulgated
2581 thereunder and is true in fact and if the effect of such
2582 statement is not a misrepresentation.
2583 (b) A statement that a person is registered made in
2584 connection with the offer or sale of a security under this
2585 chapter must include the following disclaimer: "Registration
2586 does not imply that such person has been sponsored, recommended,
2587 or approved by the state or an agency or officer of the state or
2588 by the United States or an agency or officer of the United
2589 States."
2590 1. If the statement of registration is made in writing,
2591 the disclaimer must immediately follow such statement and must
2592 be in the same size and style of print as the statement of
2593 registration.
2594 2. If the statement of registration is made orally, the
2595 disclaimer must be made or broadcast with the same force and
2596 effect as the statement of registration.
2597 (7) It is unlawful and a violation of this chapter for a
2598 person to directly or indirectly manage, supervise, control, or
2599 own, either alone or in association with others, a boiler room
2600 in this state which sells or offers for sale a security or
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2601 investment in violation of subsection (1), subsection (3),
2602 subsection (4), subsection (5), or subsection (6).
2603 Section 19. Section 517.311, Florida Statutes, is
2604 repealed.
2605 Section 20. Section 517.312, Florida Statutes, is
2606 repealed.
2607 Section 21. Subsections (1), (2), and (3) of section
2608 517.072, Florida Statutes, are amended to read:
2609 517.072 Viatical settlement investments.—
2610 (1) The exemptions provided for by s. 517.051(6) and (11)
2611 ss. 517.051(6), (8), and (10) do not apply to a viatical
2612 settlement investment.
2613 (2) The offering of a viatical settlement investment is
2614 not an exempt transaction under s. 517.061(10), (12), (13), and
2615 (18) s. 517.061(2), (3), (8), (11), and (18), regardless of
2616 whether the offering otherwise complies with the condit ions of
2617 that section, unless such offering is to a qualified
2618 institutional buyer.
2619 (3) The registration provisions of ss. 517.07 and 517.12
2620 do not apply to any of the following transactions in viatical
2621 settlement investments; however, such transactions in viatical
2622 settlement investments are subject to s. 517.301 the provisions
2623 of ss. 517.301, 517.311, and 517.312:
2624 (a) The transfer or assignment of an interest in a
2625 previously viaticated policy from a natural person who transfers
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2626 or assigns no more than one such interest in a single calendar
2627 year.
2628 (b) The provision of stop-loss coverage to a viatical
2629 settlement provider, financing entity, or related provider
2630 trust, as those terms are defined in s. 626.9911, by an
2631 authorized or eligible insurer.
2632 (c) The transfer or assignment of a viaticated policy from
2633 a licensed viatical settlement provider to another licensed
2634 viatical settlement provider, a related provider trust, a
2635 financing entity, or a special purpose entity, as those terms
2636 are defined in s. 626.9911, or to a contingency insurer,
2637 provided that such transfer or assignment is not the direct or
2638 indirect promotion of any scheme or enterprise with the intent
2639 of violating or evading any provision of this chapter.
2640 (d) The transfer or assignment of a viaticated policy to a
2641 bank, trust company, savings institution, insurance company,
2642 dealer, investment company as defined in the Investment Company
2643 Act of 1940, as amended, pension or profit-sharing trust,
2644 qualified institutional buyer, or an accredited investo r,
2645 provided such transfer or assignment is not for the direct or
2646 indirect promotion of any scheme or enterprise with the intent
2647 of violating or evading any provision of this chapter.
2648 (e) The transfer or assignment of a viaticated policy by a
2649 conservator of a viatical settlement provider appointed by a
2650 court of competent jurisdiction who transfers or assigns
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2651 ownership of viaticated policies pursuant to that court's order.
2652 Section 22. Subsection (2), paragraph (a) of subsection
2653 (9), paragraph (j) of subsection (16), subsection (20), and
2654 paragraphs (b) and (c) of subsection (21) of section 517.12,
2655 Florida Statutes, are amended to read:
2656 517.12 Registration of dealers, associated persons,
2657 intermediaries, and investment advisers.—
2658 (2) The registration requirements of this section do not
2659 apply in a transaction exempted by s. 517.061(1)-(6), (8), (9),
2660 (12), and (13) s. 517.061(1)-(10), (12), (14), and (15).
2661 (9)(a) An applicant for registration shall pay an
2662 assessment fee of $200, in the case of a dealer or investment
2663 adviser, or $50, in the case of an associated person. An
2664 associated person may be assessed an additional fee to cover the
2665 cost for the fingerprints to be processed by the office. Such
2666 fee shall be determined by rule of the commission. Such fees
2667 become the revenue of the state, except for those assessments
2668 provided for under s. 517.131(2) s. 517.131(1) until such time
2669 as the Securities Guaranty Fund satisfies the statutory limits,
2670 and are not returnable in the event that registration is
2671 withdrawn or not granted.
2672 (16)
2673 (j) All fees collected under this subsection become the
2674 revenue of the state, except those assessments provided for
2675 under s. 517.131(2) s. 517.131(1), until the Securities Guaranty
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2676 Fund has satisfied the statutory limits. Such fees are not
2677 returnable if a notice-filing is withdrawn.
2678 (20) The registration requirements of this section do not
2679 apply to any general lines insurance agent or life insurance
2680 agent licensed under chapter 626, with regard to for the sale of
2681 a security as defined in s. 517.021(25)(g) s. 517.021(23)(g), if
2682 the individual is directly authorized by the issuer to offer or
2683 sell the security on behalf of the issuer and the issuer is a
2684 federally chartered savings bank subject to regulation by the
2685 Federal Deposit Insurance Corporation. Actions under this
2686 subsection shall constitute activity under the insurance agent's
2687 license for purposes of ss. 626.611 and 626.621.
2688 (21)
2689 (b) Prior to the completion of any securities transaction
2690 described in s. 517.061(7) s. 517.061(22), a merger and
2691 acquisition broker must receive written assurances from the
2692 control person with the largest percentage of ownership for both
2693 the buyer and seller engaged in the transaction that:
2694 1. After the transaction is completed, any person who
2695 acquires securities or assets of the eligible privately held
2696 company, acting alone or in concert, will be a control person of
2697 the eligible privately held company or will be a control person
2698 for the business conducted with the assets of the eligible
2699 privately held company; and
2700 2. If any person is offered securities in exchange for
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2701 securities or assets of the eligible privately held company,
2702 such person will, before becoming legally bound to complete the
2703 transaction, receive or be given reasonable access to t he most
2704 recent year-end financial statements of the issuer of the
2705 securities offered in exchange. The most recent year-end
2706 financial statements shall be customarily prepared by the
2707 issuer's management in the normal course of operations. If the
2708 financial statements of the issuer are audited, reviewed, or
2709 compiled, the most recent year-end financial statements must
2710 include any related statement by the independent certified
2711 public accountant; a balance sheet dated not more than 120 days
2712 before the date of the exchange offer; and information
2713 pertaining to the management, business, results of operations
2714 for the period covered by the foregoing financial statements,
2715 and material loss contingencies of the issuer.
2716 (c) A merger and acquisition broker engaged in a
2717 transaction exempt under s. 517.061(7) s. 517.061(22) is exempt
2718 from registration under this section unless the merger and
2719 acquisition broker:
2720 1. Directly or indirectly, in connection with the transfer
2721 of ownership of an eligible privately held company, receives,
2722 holds, transmits, or has custody of the funds or securities to
2723 be exchanged by the parties to the transaction;
2724 2. Engages on behalf of an issuer in a public offering of
2725 any class of securities which is registered, or which is
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2726 required to be registered, with the United States Securities and
2727 Exchange Commission under the Securities Exchange Act of 1934,
2728 15 U.S.C. ss. 78a et seq., or with the office under s. 517.07;
2729 or for which the issuer files, or is required to file, periodic
2730 information, documents, and reports under s. 15(d) of the
2731 Securities Exchange Act of 1934, 15 U.S.C. s. 78o(d);
2732 3. Engages on behalf of any party in a transaction
2733 involving a public shell company;
2734 4. Is subject to a suspension or revocation of
2735 registration under s. 15(b)(4) of the Securities Exchange Act of
2736 1934, 15 U.S.C. s. 78o(b)(4);
2737 5. Is subject to a statutory disqualification described in
2738 s. 3(a)(39) of the Securities Exchange Act of 1934, 15 U.S.C. s.
2739 78c(a)(39);
2740 6. Is subject to a disqualification under the Unit ed
2741 States Securities and Exchange Commission Rule 506(d), 17 C.F.R.
2742 s. 230.506(d); or
2743 7. Is subject to a final order described in s. 15(b)(4)(H)
2744 of the Securities Exchange Act of 1934, 15 U.S.C. s.
2745 78o(b)(4)(H).
2746 Section 23. Subsection (6) of section 517.1201, Florida
2747 Statutes, is amended to read:
2748 517.1201 Notice filing requirements for federal covered
2749 advisers.—
2750 (6) All fees collected under this section become the
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2751 revenue of the state, except for those assessments provided for
2752 under s. 517.131(2) s. 517.131(1) until such time as the
2753 Securities Guaranty Fund satisfies the statutory limits, and are
2754 not returnable in the event that a notice filing is withdrawn.
2755 Section 24. Subsections (4) and (8) of section 517.1202,
2756 Florida Statutes, are amended to read:
2757 517.1202 Notice-filing requirements for branch offices.—
2758 (4) A branch office notice-filing under this section shall
2759 be summarily suspended by the office if the notice-filer fails
2760 to provide to the office, within 30 days after a written request
2761 by the office, all of the information required by this section
2762 and the rules adopted under this section. The summary suspension
2763 shall be in effect for the branch office until such time as the
2764 notice-filer submits the requested information to the office,
2765 pays a fine as prescribed by s. 517.191(9) s. 517.221(3), and a
2766 final order is entered. At such time, the suspension shall be
2767 lifted. For purposes of s. 120.60(6), failure to provide all
2768 information required by this section and the underlying rules
2769 constitutes immediate and serious danger to the public health,
2770 safety, and welfare. If the notice-filer fails to provide all of
2771 the requested information within a period of 90 days, the
2772 notice-filing shall be revoked by the office.
2773 (8) All fees collected under this section become the
2774 revenue of the state, except for those assessments provided for
2775 under s. 517.131(2) s. 517.131(1) until such time as the
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CODING: Words stricken are deletions; words underlined are additions.
V
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
PCS for HB 311 ORIGINAL 2024
2776 Securities Guaranty Fund satisfies the statutory limits, and are
2777 not returnable in the event that a branch office notice-filing
2778 is withdrawn.
2779 Section 25. Subsection (2) of section 517.302, Florida
2780 Statutes, is amended to read:
2781 517.302 Criminal penalties; alternative fine; Anti -Fraud
2782 Trust Fund; time limitation for criminal prosecution. —
2783 (2) Any person who violates s. 517.301 the provisions of
2784 s. 517.312(1) by obtaining money or property of an aggregate
2785 value exceeding $50,000 from five or more persons is guilty of a
2786 felony of the first degree, punishable as provided in s.
2787 775.082, s. 775.083, or s. 775.084.
2788 Section 26. This act shall take effect October 1, 2024.
Page 112 of 112
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V
INSURANCE & BANKING SUBCOMMITTEE
PCS for HB 311 by Rep. Barnaby
Securities
AMENDMENT SUMMARY
January 18, 2024
Amendment 1 by Rep. Barnaby (Line 356): The amendment makes technical changes.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. PCS for HB 311 (2024)
Amendment No. 1
COMMITTEE/SUBCOMMITTEE ACTION
ADOPTED (Y/N)
ADOPTED AS AMENDED (Y/N)
ADOPTED W/O OBJECTION (Y/N)
FAILED TO ADOPT (Y/N)
WITHDRAWN (Y/N)
OTHER
1 Committee/Subcommittee hearing bill: Insurance & Banking
2 Subcommittee
3 Representative Barnaby offered the following:
4
5 Amendment
6 Remove lines 356-369 and insert:
7 (a) No person shall directly or indirectly offer or sell
8 securities, other than general obligation bonds, under this
9 subsection if the issuer or guarantor is in default or has been
10 in default any time after December 31, 1975, as to principal or
11 interest:
12 1.(a) With respect to an obligation issued by the issuer
13 or successor of the issuer; or
14 2.(b) With respect to an obligation guaranteed by the
15 guarantor or successor of the guarantor,
16
PCS for HB 311 a1
Published On: 1/17/2024 6:11:22 PM
Page 1 of 2
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. PCS for HB 311 (2024)
Amendment No. 1
17 except by an offering circular containing a full and fair
18 disclosure as prescribed by rule of the commission.
19 (b) Paragraph (a) applies to a security that is an
20 industrial or commercial development bond if payments are
PCS for HB 311 a1
Published On: 1/17/2024 6:11:22 PM
Page 2 of 2
PCS for HB 939
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: PCS for HB 939 Consumer Protection
SPONSOR(S): Insurance & Banking Subcommittee
TIED BILLS: IDEN./SIM. BILLS:
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
Orig. Comm.: Insurance & Banking Subcommittee Fortenberry Lloyd
SUMMARY ANALYSIS
The bill makes changes related to consumer protection, including:
Form 1099-K Reporting Requirements: third-party settlement organizations, like PayPal or Apple Pay, that
conduct transactions involving a payee with a Florida address must create a method for payees to identify
transactions for goods and services and report that information to the Florida Department of Revenue.
State Agency Contracts: prohibits a state agency from entering into a contract or agreement with an entity
that advises censorship or blacklisting of news sources based on subjective criter ia or political biases with
the stated goal of fact-checking or removing misinformation.
Mobile Home Titles: revises the criteria for retirement of a mobile home title by the Department of Highway
Safety and Motor Vehicles (DHSMV) to include retiring the title when there is a recorded mortgage against
the owner’s mobile home and real property; also makes the retirement of mobile home titles by DHSMV
mandatory rather than permissive.
Contracts for Roof Repairs Following Emergencies: requires that a contractor that enters into a contract
to replace or repair the roof of a residential property during a declared state of emergency include specific
language in the contract that allows the property owner to cancel the contract by the earl ier of ten days
following execution or the official start date that the work on the roof will commence; the property owner
must send notice of cancellation by certified mail or another form that provides proof of mailing.
Depository Institutions: expands the definition of depository institution in commercial financing disclosure
law.
Continuing Education Requirements for Certified Public Accountants: requires that the certified public
accountant (CPA) that prepares the audit that an insurer submits to the Office of Insurance Regulation as
part of its annual report must have completed at least four hours of insurance -related continuing education
during each two-year continuing education cycle.
Public Adjusters: requires that public adjusters’ contracts for property and casualty claims contain the
license numbers of the public adjusting firms by which they are employed; establishes that restrictions on
public adjuster compensation apply to coverages provided by condominium associations, cooperative
associations, apartment buildings, and similar policies, including those that cover the common elements of a
homeowners’ association.
Short-term Health Insurance: updates the disclosures that must be provided to a purchaser of a short -term
plan; also requires that purchasers of short-term plans receive the required disclosures in writing or
electronically, and sign them.
Loss Assessment Coverage: establishes that a claim resulting from a loss assessment is considered to
have occurred on the date that condominium association sends a loss assessment notice to a unit owner.
Fireworks Safety Standards: updates the state standards for outdoor display of fireworks to the current
edition of the National Fire Protection Association 1123, Code for Fireworks Dis plays.
The bill has no impact on local government revenues or expenditures or state revenues. It may have an
indeterminate negative impact on state expenditures, and a positive or negative impact on the private sector.
The bill is effective on July 1, 2024.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Form 1099-K Reporting Requirements
Background
Section 6050W of the Internal Revenue Code requires certain entities to file a return each year
providing information about payments made by credit card or third-party merchants.1 The return is Form
1099-K, and is required to be filed for each calendar year on or before the last day of February of the
year following the transactions.2
Reportable transactions include any transaction where the payment method is a payment card (credit
card, debit card, or similar) or a third-party payment system (like PayPal or Apple Pay). The return is
filed by the payment settlement entity (e.g., a bank, credit card company, or payment platform like
PayPal) and a copy is provided to dealers who have payment card transactions (credit card sales) of
any amount, or who have third-party payment transactions (e.g., PayPal) in excess of $20,000 over
more than 200 transactions.3 These sales should be included in the payee’s gross income on their tax
returns for the year.
Some states require payment settlement entities to submit a copy of any Form 1099-K related to sales
in that state or for residents of that state, if the IRS already requires the Form 1099-K to be filed.
Examples include Alabama,4 Tennessee,5 North Carolina,6 and New York.7
Since 2020, entities required to file Form 1099-K with the federal government must also file a copy with
the Florida Department of Revenue (DOR) electronically within 30 days of filing the federal return.8 The
copy can be either the exact information filed on the full federal return, or a copy of the information
limited to participating payees with an address in Florida. 9
Effect of the Bill
The bill provides that for the purposes of complying with a reporting requirement to the Florida
Department of Revenue, third-party settlement organizations that conduct transactions involving a
participating payee with an address in Florida to create a method for payees to identify whether their
transactions are for goods and services or personal purposes. This will allow taxable transactions
related to goods and services to be readily identifiable and help avoid overpayment or underpayment of
taxes. The information submitted to DOR in Form 1099-K must be limited to transactions identified for
goods and services.
1 26 U.S. Code s. 6050W(e).
2 https://www.irs.gov/forms-pubs/about -form-1099-k (last visited Jan. 15, 2024).
3 https://www.irs.gov/businesses/understanding -your-form-1099-k (last visited Jan. 15, 2024).
4 https://www.revenue.alabama. gov/new-1099-k -filing-requirement/ (last visited Jan. 15, 2024).
5 https://www.tn.gov/content/dam/tn/revenue/documents/notices/sales/sales 16-01.pdf (last visited Jan. 15, 2024).
6 https://www.ncdor.gov/file-pay/guidance-information-reporting#payment-settlement-entity-(1099k ) (last visited Jan. 15,
2024).
7 https://www.tax.ny.gov/bus/multi/reporting_requiremts.htm (last visited Jan. 15, 2024).
8 s. 212.134, F.S.
9 s. 212.134(1), F.S.
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State Agency Contracts
Background
Chapter 286, F.S., contains requirements for, and prohibitions on, state agencies entering into
contracts or other agreements with various private entities. It also prohibits the use of state funds for
certain purposes.10
Over the past several years, a multitude of companies whose stated purpose is to rate the credibility
and transparency of news sources and counter misinformation have been established. These include
NewsGuard,11 AdFontes Media,12 and Cyabra.13 Among other things, subscribers to these services may
rely on them when considering where to place advertisements or in other business decision-making.
There does not appear to be any current state contracts with these entities. 14
Effect of the Bill
The bill prohibits a state agency from entering into a contract or another agreement with an entity that
advises censorship or blacklisting of news sources based on subjective criteria or political biases with
the stated goal of fact-checking or removing misinformation.15
Mobile Home Titles
Background
Florida law contains a process by which the owner of a mobile home that is permanently affixed to real
property owned by the same person may permanently retire the title to the mobile home that is issued
by the Florida Department of Highway Safety and Motor Vehicles (DHSMV). 16 The title may be retired if
the owner of the real property records the following documents in the official records of the clerk of
court in the county in which the real property is located:
Original title to the mobile home, including a description of the mobile home with the model,
year, make, width, length and vehicle identification number, and a statement from any recorded
lienholder on the title that the lien has been released or will be released upon retirement of the
title;
A legal description of the real property and a copy any lease agreements for that real property;
and
A sworn statement by the owner of the real property, as shown on the deed or lease, that he or
she is the owner of the mobile home and that the mobile home is permanently affixed to the real
property.17
A mobile home whose title has been retired shall be conveyed by deed or real estate contract and
transferred with the property to which it is affixed.18
10 See, e.g., ss. 286.31 and 286.311, F.S.
11 NewGuard’s website states that it “provides transparent tools to counter misinformation for readers, brands, and
democracies. NewsGuard, About NewsGuard, https://www.newsguardtech.com/about-newsguard/ (last visited Jan. 15,
2024).
12 AdFontes Media advertises that it helps users “know the reliability and bias of the news” and is the “home of the media
bias chart,” a trademarked tool for evaluating the news. AdFontes Media, https://adfontesmedia.com/ (last visited Jan. 15,
2024).
13 Cyabra “uncovers threats to…[companies, products,] people and places by exposing malicious actors, disinformation,
and bot networks.” Cyabra, https://cyabra.com/ (last visited Jan. 15, 2024).
14 See Department of Financial Services, My Florida Mark et Place Vendor Search,
15 This prohibition would apply to entities like NewsGuard and its competitors.
16 S. 319.261, F.S. For a typical “stick-built” home a deed transfers title from one owner to another. However, a mobile
home generally has a Certificate of Title issued by the DHSMV. See, e.g., Lee County Tax Collector, Mobile Home Titles
and Registrations, https://leetc.com/mobile-home-titles-and-
registrations/#:~:text=Proof%20of%20ownership% 20to% 20a,the%20title%20has%20been%20retired. (last visited Jan.
15, 2024).
17 S. 319.261(2),F.S.
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Effect of the Bill
The bill adds an alternative to the current retirement criteria. It authorizes the DHSMV to retire the title
of a mobile home by when there is a recorded mortgage against the owner’s mobile home and real
property. Adding this criteria may provide mobile home owners with access to more lenders that are
willing to provided mortgages for mobile homes by consolidating proof of ownership into a single
document, i.e., the deed, rather than the deed and a mobile home title.
The bill also makes the retirement of mobile home titles by the DHSMV mandatory rather than
permissive.
Contracts for Roof Repairs Following Emergencies
Background
The Florida Office of Insurance Regulation (OIR) reported a significant increase in the number of roof
damage claims, many of which include litigation.19 These roof damage claims include claims made by
residential property owners after being solicited to file an insurance claim that they may not otherwise
have filed but for the promise of a new roof at no cost to the property owner.20 As such, the Legislature
limited certain insurance practices by contractors and unlicensed persons acting on their behalf. 21
A contractor may not enter into a contract with a residential property owner to repair or replace a roof
without including notice in the contract that the contractor is prohibited from engaging in certain acts,
including the interpretation of policy provisions, adjusting a claim without being licensed as a public
adjuster, or failing to provide an insured with an itemized estimate for repairs.22 If the contractor fails to
include the notice in the contract, the property owner may void the contract within 10 days of its
execution.23 However, current law does not provide any requirements regarding cancellation of a
contract executed during a declared state of emergency.
Effect of the Bill
The bill requires that a contractor that enters into a contract to replace or repair the roof of a residential
property during a declared state of emergency must include specific language in the contract that
allows the residential property owner to cancel the contract by the earlier of:
Ten days following the contract execution; or
The official start date that the work on the roof will commence.
If the contract does not contain an official start date, it may be canceled within ten days following
execution.
The bill requires that the residential property owner send notice of cancellation of such contract to the
address specified in the contract by certified mail, return receipt requested, or another form of mailing
that provides proof of mailing.
18 S. 319.261(5), F.S.
19 Report from David Altmaier, Florida Insurance Commissioner, to Chair Blaise Ingoglia, Commerce Committee, regarding cost drivers
affecting Florida’s insurance rates, p. 7 (Feb. 24, 2021).
20 Id. A “free” roof replacement may be achieved by giving a residen tial property owner whose policy provides for replacement cost
coverage for a roof a gift card or something else valued at the amount of the deductible under the policy so that the entire cost of a new
roof is paid by the insurer and the individual soliciting the residential property owner.
21 See ch. 2021-77, Laws of Fla.
22 S. 489.147, F.S.
23 Id.
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Depository Institutions
Background
In 2023, the Legislature enacted a definition of depository institution for commercial financing
disclosure,24 which defines such institutions as Florida state-chartered bank, savings banks, credit
unions, or trust companies, or federal savings or thrift associations, banks, credit unions, savings bank
or thrift.25 This statutory definition inadvertently excluded certain types of state-chartered banks.
Effect of the Bill
The bill changes the definition of depository institution in ch. 559, part XIII, F.S., to a more
comprehensive definition that includes banks, credit unions, savings banks, savings and loan
associations, savings or thrift associations, trust companies, or industrial loan companies doing
business under the authority of the United States, Florida, or any other state, district, territory or
commonwealth of the United States that is authorized to do business in Florida.
Continuing Education Requirements for Certified Public Accountants
Background
Every insurer authorized to do business in Florida must file an annual financial statement with OIR on
or before March 1, and quarterly financial statements on March 31, June 30, and September 30. 26 Such
statements must conform with the requirements established by the National Association of Insurance
Commissioners, which OIR adopts by rule.27 As part of the annual statement, all authorized insurers
must have an annual audit conducted by an independent certified public accountant (CPA) and must
file an audited financial report by June 1 each year.28
All CPAs licensed in Florida are required to complete 80 hours of continuing education during the two
years prior to the conclusion of each license-renewal cycle.29 However, there are no requirements
regarding the completion of any continuing education related to audits of insurance companies.
Effect of the Bill
The bill requires that the CPA that prepares the audit that an insurer submits to OIR as part of its
annual report must have completed at least four hours of insurance-related continuing education during
each two-year continuing education cycle.
Public Adjusters
Background
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.30 In general, a claimant executes a contract for the public adjuster to provide claims
adjusting services.31
24 The commercial financing disclosure law is ch. 559, part XIII, F.S.
25 S. 559.9611, F.S.
26 S. 624.424(1), F.S.
27 S. 624.424(1), F.S., and R. 69O-137, F.A.C.
28 S. 624.424(8),F.S.
29 S. 473.312, F.S. CPAs are licensed under ch. 473, F.S., and must renew their licenses every two years.
30 S. 626.854, F.S. Public adjusters are regulated under ch. 626, part VI, F.S.
31 See id.
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Public adjusters’ contracts relating to property and casualty claims must contain the full name,
permanent business address, phone number, email address, and license number of the public adjuster;
and the full name of the public adjusting firm for whom the public adjuster works. 32 However, such
contracts are not required to contain the license number of the public adjusting firm.
Current law allows the following payments or commissions payable to a public adjuster:
One percent of the amount of the insurance claim payments or settlements that an insurer pays
to an insured for any coverage under the policy where the claim payment or insurer’s agreement
to pay is equal to or greater than the policy limit for that part of the policy, if the payment or
written agreement to pay is provided by the latter of:
o Fourteen days after the date of loss; or
o Ten days after the date that the public adjusting contract is signed.
No fees or commission when the payment or agreement to pay by the insurer to the insured
occurs before the date that the public adjusting contract is signed. 33
Effect of the Bill
The bill requires that public adjusters’ contracts relating to property and casualty claims contain the
license numbers of the public adjusting firms by which they are employed.
The bill also establishes that restrictions on public adjusters’ compensation apply to coverages provided
by condominium associations, cooperative associations, apartment buildings, and similar policies,
including those that cover the common elements of a homeowners’ association.
Short-term Health Insurance (short-term plans)
Background
Short-term plans are a health insurance product purchased only for limited time periods, usually under
one year, during periods of transition, such as unemployment. 34 Beginning in 2016, federal rules related
to the Patient Protection and Affordable Care Act (PPACA) limited short-term health plans to no more
than three months.35 In 2018, the Trump administration adopted a rule that allows short-term health
plans to be issued for a period of up to 12 months.36 The new rule also allows the plans to be renewed
upon expiration, up to a total coverage period of 36 months. Short-term plans are not subject to the
following PPACA requirements:
Coverage of essential health benefits.
Prohibition on pre-existing conditions.37
Guaranteed issue of coverage.
As with Association Health Plans (AHPs), the authority to regulate short-term plans remains with the
state. In response to the 2018 Department of Labor rules on AHPs and short-term health plans, the
Legislature passed SB 322 (2019).38 The law allows employers from disparate trades to participate in a
single AHP, if they are located in the state, and allows AHPs to include out-of-state employers who
share a trade or purpose, consistent with the revised federal rules. 39 Following the federal rule for short
term plans, the law allows them to be issued for up to 12 months, renewable for a total coverage period
32 S. 626.8796(2), F.S.
33 S. 626.854(11), F.S.
34 See s. 627.6426, F.S.; Florida Department of Financial Services, Short-term Limited Duration Insurance,
https://www.myfloridacfo.com/division/consumers/consumerprotections/s tldipolicies (last visited Jan. 15, 2024).
35 National Association of Insurance Commissioners, Short-term Limited-duration Health Plans,
https://content.naic.org/cipr-topics/short-term-limited-duration-health-
plans#:~:text=Federal%20regulations%20(81%20FR% 2075316,replacement%20for%20traditional%20health%20coverag
e. (last visited Jan. 15, 2024).
36 Id.
37 Id.
38 Ch. 2019-129, Laws of Fla.
39 Id.
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of 36 months.40 In practice, this change allows individuals to purchase short-term health insurance
during longer periods of transition. Both changes increase the availability of lower-cost alternatives to
comprehensive coverage.
All short-term plans must include disclosures to the purchaser explaining that the plan is not required to
comply with certain federal requirements and may exclude certain coverage. 41 However, the law does
not specify the method by which these disclosures must be provided.
Effect of the Bill
The bill updates the disclosures that must be provided to a purchaser of a short-term plan to include the
following additional items:
The duration of the plan, including any waiting period;
Any essential health benefits that the plan does not provide;42
The content of coverage; and
Any exclusions of preexisting conditions.
The bill also requires that purchasers of short-term plans receive the required disclosures in writing or
electronically, and sign them.
Loss Assessment Coverage
Background
Loss assessment coverage is insurance coverage for condominium unit owners that provides
protection for situations where the owner of a condominium unit, as the owner of shared property, is
held financially responsible for:
Deductibles owed when a claim is made under a condominium association’s property insurance
policy;
Damage that occurs to the condominium building or the common areas of a condominium
property; or
Injuries that occur in the common areas of a condominium property. 43
Florida law requires that property insurance policies held by condominium unit owners include a
minimum property loss assessment coverage of $2,000 for all assessments made because of the same
direct loss to the condominium property.44 The law further establishes that the maximum amount of any
unit owner’s coverage that can be assessed for any loss is an amount equal to the unit owner’s loss
assessment coverage limit in effect one day before the date of an occurrence that gave rise to the
loss.45 This coverage is applicable to any loss assessment regardless of the date of assessment by a
condominium association.46
Effect of the Bill
The bill establishes that a claim resulting from a loss assessment is considered to have occurred on the
date a notice of loss assessment is sent by a condominium association to a unit owner. Establishing a
date of loss for such claims will help insurers determine whether a loss assessment claim has been
timely made.
Fireworks Safety Standards
40
41 S. 627.6426(2), F.S.
42 Essential health benefits can be found in 42 U.S.C. § 18022(b).
43
The Balance, Loss Assessment Explained for Condo Insurance, https://www.thebalance.com/loss-assessment-explained-for-condo-
insurance-4060435 (last visited Jan. 13, 2024).
44 S. 627.714(1), F.S.
45 S. 627.714(2), F.S.
46 Id.
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Background
Florida law establishes the requirements for the outdoor display of fireworks in the state. At present,
such display of fireworks is controlled by the 1995 edition of the National Fire Protection Association
1123, Code for Fireworks Displays (Code).47
Effect of the Bill
The bill updates the outdoor fireworks safety standards in Florida to the 2018 Code, which is the most
current edition of the code.
B. SECTION DIRECTORY:
Section 1. Amends s. 212.134, F.S., relating to information returns relation to payment-card and third-
party network transactions.
Section 2. Creates s. 286.312, F.S. relating to prohibited use of state funds; censorship or blacklisting
of news sources.
Section 3. Amends s. 319.261, F.S., relating to real property transactions; retiring title to mobile home.
Section 4. Amends s. 489.147, F.S., relating to prohibited property insurance practices.
Section 5. Amends s. 559.9611, F.S., relating to definitions.
Section 6. Amends s. 624.424, F.S., relating to annual statement and other information.
Section 7. Amends s. 626.854, F.S., relating to “public adjuster” defined; prohibitions.
Section 8. Amends s. 626.8796, F.S., relating to public adjuster contracts; disclosure statement; fraud
statement.
Section 9. Amends s. 627.6426, F.S., relating to short-term health insurance.
Section 10. Amends s. 627.70132, F.S., relating to notice of property insurance claims.
Section 11. Amends s. 791.012, F.S., relating to minimum fireworks safety standards.
Section 12. Provides an effective date of July 1, 2024.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
The bill may have an indeterminate negative impact on state expenditures if state agencies are
required to update systems or hire additional staff to implement the statutory changes made by the
bill.
47 S. 791.012,F.S. The Code cited in this statute has not been updated since this statute was first enacted in 1996.
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B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may have an indeterminate positive impact on those condominium associations, cooperative
associations, apartment communities, and homeowners associations that contract for the services of
public adjusters because they may not have to pay as much compensation to the public adjusters for
services rendered. Correspondingly, the bill may have an indeterminate negative impact on public
adjusters.
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:
The use of the word advise in section 2 of the bill regarding limitations on state contracting is
confusing. It is unclear whether an agency is prohibited from entering a contract with an entity that
advises others on censorship and blacklisting, or is prohibited only from entering into a contract with
an entity for such services to be provided to the agency. The way the language is written, it is
possible that an agency could enter into a contract with such an entity for another service besides
censorship and blacklisting. An amendment may clarify the intent.
The censorship or blacklisting of news materials could have first amendment implications.
Additionally, there could be invalid delegation of legislative authority because the interpretation of
censorship and blacklisting would be left up to the contracting state agency without any guidelines or
rulemaking authority.
B. RULE-MAKING AUTHORITY:
The bill neither authorizes nor requires administrative rulemaking.
C. DRAFTING ISSUES OR OTHER COMMENTS:
Section 2 (Lines 97-102): The use of the word advise in section 2 of the bill regarding limitations on state
contracting is confusing. It is unclear whether an agency is prohibited from entering a contract with an
entity that advises others on censorship and blacklisting, or is prohibited only from entering into a contract
with an entity for such services to be provided to the agency. The way the language is written, it is possible
that an agency could enter into a contract with such an entity for another service besides censorship and
blacklisting. An amendment may clarify the intent.
STORAGE NAME: pcs0939.IBS PAGE: 9
DATE: 1/16/2024
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
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1 A bill to be entitled
2 An act relating to consumer protection; amending s.
3 212.34, F.S.; defining terms; revising requirements
4 for payment settlement entities, or their electronic
5 payment facilitators or contracted third parties, in
6 submitting information returns to the Department of
7 Revenue; specifying requirements for third party
8 settlement organizations that conduct certain
9 transactions; creating s. 286.312, F.S.; prohibiting
10 agencies from entering into certain contracts or
11 agreements; amending s. 319.261, F.S.; requiring the
12 title to a mobile home to be retired if the owner of
13 the real property records certain documents in the
14 official records of the clerk of court in the county
15 in which the real property is located; amending s.
16 489.147, F.S.; requiring contractors to include a
17 notice in the contracts with residential property
18 owners under certain circumstances; proving
19 requirements for notices of contract cancellation;
20 amending s. 559.9611, F.S.; revising the definition of
21 the term "depository institution"; amending s.
22 624.424, F.S.; providing requirements for certain
23 insurers' accountants; amending s. 626.854, F.S.;
24 revising applicability of provisions relating to
25 public adjusters; amending s. 626.8796, F.S.; revising
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26 the content of certain public adjuster contracts;
27 amending s. 627.6426, F.S.; revising the disclosure
28 requirements of contracts for short-term health
29 insurance; amending s. 627.70132, F.S.; providing that
30 claims resulting from certain loss assessments are
31 considered to have occurred on a specified date;
32 amending s. 791.012, F.S.; updating the source of the
33 code for outdoor display of fireworks; providing an
34 effective date.
35
36 Be It Enacted by the Legislature of the State of Florida:
37
38 Section 1. Section 212.134, Florida Statutes, is amended
39 to read:
40 212.134 Information returns relating to payment-card and
41 third-party network transactions.—
42 (1) For purposes of this section, the term:
43 (a) "Participating payee" has the same meaning as in s.
44 6050W of the Internal Revenue Code.
45 (b) "Return" or "information return" means IRS Form 1099-K
46 required under s. 6050W of the Internal Revenue Code.
47 (c) "Third party network transaction" has the same meaning
48 as in s. 6050W of the Internal Revenue Code.
49 (d) "Third party settlement organization" has the same
50 meaning as in s. 6050W of the Internal Revenue Code.
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51 (2) For each year in which a payment settlement entity, an
52 electronic payment facilitator, or other third party contracted
53 with the payment settlement entity to make payments to settle
54 reportable payment transactions on behalf of the payment
55 settlement entity must file a return pursuant to s. 6050W of the
56 Internal Revenue Code, for participating payees with an address
57 in this state, the entity, the facilitator, or the third party
58 must submit the information in the return to the department by
59 the 30th day after filing the federal return. The format of the
60 information returns required must be either a copy of such
61 information returns or a copy of such information returns
62 related to participating payees with an address in the state.
63 For purposes of this subsection, the term "payment settlement
64 entity" has the same meaning as provided in s. 6050W of the
65 Internal Revenue Code.
66 (3)(2) All reports of returns submitted to the department
67 under this section must be in an electronic format.
68 (4)(3) Any payment settlement entity, facilitator, or
69 third party failing to file the information return required,
70 filing an incomplete information return, or not filing an
71 information return within the time prescribed is subject to a
72 penalty of $1,000 for each failure, if the failure is for not
73 more than 30 days, with an additional $1,000 for each month or
74 fraction of a month during which each failure continues. The
75 total amount of penalty imposed on a reporting entity may not
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76 exceed $10,000 annually.
77 (5)(4) The executive director or his or her designee may
78 waive the penalty if he or she determines that the failure to
79 timely file an information return was due to reasonable cause
80 and not due to willful negligence, willful neglect, or fraud.
81 (6) All third party settlement organizations that conduct
82 transactions involving a participating payee with an address in
83 this state shall create a mechanism for participating payees to
84 identify whether a participating payee's transaction is for
85 goods and services or is personal. The mechanism must clearly
86 indicate the participating payee's requirement to indicate the
87 appropriate transaction type. The participating payee is
88 responsible for indicating the appropriate transaction type. All
89 third party settlement organizations shall maintain records that
90 clearly identify whether a transaction, as designated by the
91 participating payee, is a transaction for goods and services or
92 is personal. The information in the return submitted to the
93 department under subsection (2) for such entities must be
94 limited to transactions for goods and services.
95 Section 2. Section 286.312, Florida Statutes, is created
96 to read:
97 286.312 Prohibited use of state funds; censorship or
98 blacklisting of news sources.—An agency may not enter into a
99 contract or other agreement with an entity whose function is to
100 advise the censorship or blacklisting of news sources based on
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101 subjective criteria or political biases under the stated goal of
102 fact-checking or removing misinformation.
103 Section 3. Subsection (2) of section 319.261, Florida
104 Statutes, is amended to read:
105 319.261 Real property transactions; retiring title to
106 mobile home.—
107 (2) The title to the mobile home shall may be retired by
108 the department if the owner of the real property records the
109 following documents in the official records of the clerk of
110 court in the county in which the real property is located:
111 (a)1. The original title to the mobile home which includes
112 shall include a description of the mobile home, including model
113 year, make, width, length, and vehicle identification number,
114 and a statement by any recorded lienholder on the title that the
115 security interest in the home has been released, or that such
116 security interest will be released upon retirement of the title
117 as set forth in this section;.
118 2.(b) The legal description of the real property, and in
119 the case of a leasehold interest, a copy of the lease agreement ;
120 and.
121 3.(c) A sworn statement by the owner of the real property,
122 as shown on the real property deed or lease, that he or she is
123 the owner of the mobile home and that the home is permanently
124 affixed to the real property in accordance with state law; or
125 (b) A mortgage against the owner's mobile home and real
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126 property.
127 Section 4. Subsection (6) is added to section 489.147,
128 Florida Statutes, to read:
129 489.147 Prohibited property insurance practices; contract
130 requirements.—
131 (6)(a) An insured or claimant may cancel a contract to
132 replace or repair a roof without penalty or obligation until 10
133 days following the execution of the contract or until the
134 official start date, whichever comes first, if the contract was
135 entered into based on events that are the subject of a
136 declaration of a state of emergency by the Governor. For the
137 purposes of this subsection, the official state date is the date
138 on which the work on the roof will be commenced.
139 (b) A contractor executing during a declaration of a state
140 of emergency a contract to replace or repair a roof of a
141 residential property must include in the contract the following
142 language in bold type of not less than 18 points immediately
143 before the space reserved for the signature of the residential
144 property owner:
145
146 "You, the residential property owner, may cancel this contract
147 without penalty or obligation until 10 days following the
148 execution of the contract or until the official start date,
149 whichever comes first, because this contract was entered into
150 during a declaration of a state of emergency by the Governor. It
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151 is the responsibility of your contractor to include an official
152 start date clause in your contact. This clause must state the
153 official start date and the work that will be commenced on that
154 date. If there is no official start date clause in the contract,
155 the contract may be voided within 10 days following the
156 execution of the contract."
157
158 (b) The residential property owner must send the notice of
159 cancellation by certified mail, return receipt requested, or
160 other form of mailing that provides proof thereof, at the
161 address specified in the contract.
162 Section 5. Subsection (9) of section 559.9611, Florida
163 Statutes, is amended to read:
164 559.9611 Definitions.—As used in this part, the term:
165 (9) "Depository institution" means a bank, credit union,
166 savings bank, savings and loan association, savings or thrift
167 association, trust company, or industrial loan company doing
168 business under the authority of, or in accordance with, a
169 license, certificate, or charter issued by the United States,
170 this state, or any other state, district, territory, or
171 commonwealth of the United States which is authorized to
172 transact business in this state Florida state-chartered bank,
173 savings bank, credit union, or trust company, or a federal
174 savings or thrift association, bank, credit union, savings b ank,
175 or thrift.
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176 Section 6. Paragraph (d) of subsection (8) of section
177 624.424, Florida Statutes, is amended to read:
178 624.424 Annual statement and other information.—
179 (8)
180 (d) The certified public accountant that prepares the
181 audit must be licensed to practice pursuant to chapter 473 and
182 must have completed at least 4 hours of insurance-related
183 continuing education during each two-year continuing education
184 cycle. An insurer may not use the same accountant or partner of
185 an accounting firm responsible for preparing the report required
186 by this subsection for more than 5 consecutive years. Following
187 this period, the insurer may not use such accountant or partner
188 for a period of 5 years, but may use another accountant or
189 partner of the same firm. An insurer may request the office to
190 waive this prohibition based upon an unusual hardship to the
191 insurer and a determination that the accountant is exercising
192 independent judgment that is not unduly influenced by the
193 insurer considering such factors as the number of partners,
194 expertise of the partners or the number of insurance clients of
195 the accounting firm; the premium volume of the insurer; and the
196 number of jurisdictions in which the insurer transacts business.
197 Section 7. Subsection (19) of section 626.854, Flo rida
198 Statutes, is amended, and subsections (5) through (18) are
199 republished, to read:
200 626.854 "Public adjuster" defined; prohibitions.—The
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201 Legislature finds that it is necessary for the protection of the
202 public to regulate public insurance adjusters and to prevent the
203 unauthorized practice of law.
204 (5) A public adjuster may not directly or indirectly
205 through any other person or entity solicit an insured or
206 claimant by any means except on Monday through Saturday of each
207 week and only between the hours of 8 a.m. and 8 p.m. on those
208 days.
209 (6) When entering a contract for adjuster services after
210 July 1, 2023, a public adjuster:
211 (a) May not collect a fee for services on payments made to
212 a named insured unless they have a written contract with the
213 named insured, or the named insured's legal representative.
214 (b) May not contract for services to be provided by a
215 third party on behalf of the named insured or in pursuit of
216 settlement of the named insured's claim, if the cost of those
217 services is to be borne by the named insured, unless the named
218 insured agrees in writing to procure these services and such
219 agreement is entered into subsequent to the date of the contract
220 for public adjusting services.
221 (c) If a public adjuster contracts with a third-party
222 service provider to assist with the settlement of the named
223 insured's claim, without first obtaining the insured's written
224 consent, payment of the third party's fees must be made by the
225 public adjuster and may not be charged back to the named
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226 insured.
227 (d) If a public adjuster represents anyone other than the
228 named insured in a claim, the public adjuster fees shall be paid
229 by the third party and may not be charged back to the named
230 insured.
231 (7) An insured or claimant may cancel a public adjuster's
232 contract to adjust a claim without penalty or obligation within
233 10 days after the date on which the contract is executed. If the
234 contract was entered into based on events that are the subject
235 of a declaration of a state of emergency by the Governor, an
236 insured or claimant may cancel the public adjuster's contract to
237 adjust a claim without penalty or obligation within 30 days
238 after the date of loss or 10 days after the date on which the
239 contract is executed, whichever is longer. The public adjuster's
240 contract must contain the following language in minimum 18-point
241 bold type immediately before the space reserved in the contract
242 for the signature of the insured or claimant:
243 "You, the insured, may cancel this contract for any reason
244 without penalty or obligation to you within 10 days after the
245 date of this contract. If this contract was entered into based
246 on events that are the subject of a declaration of a state of
247 emergency by the Governor, you may cancel this contract for any
248 reason without penalty or obligation to you within 30 days after
249 the date of loss or 10 days after the date on which the contract
250 is executed, whichever is longer. You may also cancel the
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251 contract without penalty or obligation to you if I, as your
252 public adjuster, fail to provide you and your insurer a copy of
253 a written estimate within 60 days of the execution of the
254 contract, unless the failure to provide the estimate within 60
255 days is caused by factors beyond my control, in accordance with
256 s. 627.70131(5)(a)2., Florida Statutes. The 60-day cancellation
257 period for failure to provide a written estimate shall cease on
258 the date I have provided you with the written estimate."
259 The notice of cancellation shall be provided to ...(name of
260 public adjuster)..., submitted in writing and sent by certified
261 mail, return receipt requested, or other form of mailing that
262 provides proof thereof, at the address specified in the
263 contract.
264 (8) It is an unfair and deceptive insurance trade practice
265 pursuant to s. 626.9541 for a public adjuster or any other
266 person to circulate or disseminate any advertisement,
267 announcement, or statement containing any assertion,
268 representation, or statement with respect to the business of
269 insurance which is untrue, deceptive, or misleading.
270 (a) The following statements, made in any public
271 adjuster's advertisement or solicitation, are considered
272 deceptive or misleading:
273 1. A statement or representation that invites an insured
274 policyholder to submit a claim when the policyholder does not
275 have covered damage to insured property.
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276 2. A statement or representation that invites an insured
277 policyholder to submit a claim by offering monetary or other
278 valuable inducement.
279 3. A statement or representation that invites an insured
280 policyholder to submit a claim by stating that there is "no
281 risk" to the policyholder by submitting such claim.
282 4. A statement or representation, or use of a logo or
283 shield, that implies or could mistakenly be construed to imply
284 that the solicitation was issued or distributed by a
285 governmental agency or is sanctioned or endorsed by a
286 governmental agency.
287 (b) For purposes of this paragraph, the term "written
288 advertisement" includes only newspapers, magazines, flyers, and
289 bulk mailers. The following disclaimer, which is not required to
290 be printed on standard size business cards, must be added in
291 bold print and capital letters in typeface no smaller than the
292 typeface of the body of the text to all written advertisements
293 by a public adjuster:
294 "THIS IS A SOLICITATION FOR BUSINESS. IF YOU HAVE HAD A CLAIM
295 FOR AN INSURED PROPERTY LOSS OR DAMAGE AND YOU ARE SATISFIED
296 WITH THE PAYMENT BY YOUR INSURER, YOU MAY DISREGARD THIS
297 ADVERTISEMENT."
298 (9) A public adjuster, a public adjuster apprentice, or
299 any person or entity acting on behalf of a public adjuster or
300 public adjuster apprentice may not give or offer to give a
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301 monetary loan or advance to a client or prospective client.
302 (10) A public adjuster, public adjuster apprentice, or any
303 individual or entity acting on behalf of a public adjuster or
304 public adjuster apprentice may not give or offer to give,
305 directly or indirectly, any article of merchandise having a
306 value in excess of $25 to any individual for the purpose of
307 advertising or as an inducement to entering into a contract with
308 a public adjuster.
309 (11)(a) If a public adjuster enters into a contract with
310 an insured or claimant to reopen a claim or file a supplemental
311 claim that seeks additional payments for a claim that has been
312 previously paid in part or in full or settled by the insurer,
313 the public adjuster may not charge, agree to, or accept from any
314 source compensation, payment, commission, fee, or any other
315 thing of value based on a previous settlement or previous claim
316 payments by the insurer for the same cause of loss. The charge,
317 compensation, payment, commission, fee, or any other thing of
318 value must be based only on the claim payments or settlements
319 paid to the insured, exclusive of attorney fees and costs,
320 obtained through the work of the public adjuster after entering
321 into the contract with the insured or claimant. Com pensation for
322 the reopened or supplemental claim may not exceed 20 percent of
323 the reopened or supplemental claim payment. In no event shall
324 the contracts described in this paragraph exceed the limitations
325 in paragraph (b).
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326 (b) A public adjuster may not charge, agree to, or accept
327 from any source compensation, payment, commission, fee, or any
328 other thing of value in excess of:
329 1. Ten percent of the amount of insurance claim payments
330 or settlements, exclusive of attorney fees and costs, paid to
331 the insured by the insurer for claims based on events that are
332 the subject of a declaration of a state of emergency by the
333 Governor. This provision applies to claims made during the year
334 after the declaration of emergency. After that year, the
335 limitations in subparagraph 2. apply.
336 2. Twenty percent of the amount of insurance claim
337 payments or settlements, exclusive of attorney fees and costs,
338 paid to the insured by the insurer for claims that are not based
339 on events that are the subject of a declaration of a state of
340 emergency by the Governor.
341 3. One percent of the amount of insurance claim payments
342 or settlements, paid to the insured by the insurer for any
343 coverage part of the policy where the claim payment or written
344 agreement by the insurer to pay is equal to or greater than the
345 policy limit for that part of the policy, if the payment or
346 written commitment to pay is provided within 14 days after the
347 date of loss or within 10 days after the date on which the
348 public adjusting contract is executed, whichever is lat er.
349 4. Zero percent of the amount of insurance claim payments
350 or settlements, paid to the insured by the insurer for any
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351 coverage part of the policy where the claim payment or written
352 agreement by the insurer to pay occurs before the date on which
353 the public adjusting contract is executed.
354 (c) Insurance claim payments made by the insurer do not
355 include policy deductibles, and public adjuster compensation may
356 not be based on the deductible portion of a claim.
357 (d) Public adjuster compensation may not be based on
358 amounts attributable to additional living expenses, unless such
359 compensation is affirmatively agreed to in a separate agreement
360 that includes a disclosure in substantially the following form:
361 "I agree to retain and compensate the public adjuster for
362 adjusting my additional living expenses and securing payment
363 from my insurer for amounts attributable to additional living
364 expenses payable under the policy issued on my (home/mobile
365 home/condominium unit)."
366 (e) Public adjuster rate of compensation may not be
367 increased based solely on the fact that the claim is litigated.
368 (f) Any maneuver, shift, or device through which the
369 limits on compensation set forth in this subsection are exceeded
370 is a violation of this chapter punishable as provided under s.
371 626.8698.
372 (12)(a) Each public adjuster must provide to the claimant
373 or insured a written estimate of the loss to assist in the
374 submission of a proof of loss or any other claim for payment of
375 insurance proceeds within 60 days after the date of the
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376 contract. The written estimate must include an itemized, per -
377 unit estimate of the repairs, including itemized information on
378 equipment, materials, labor, and supplies, in accordance with
379 accepted industry standards. The public adjuster shall retain
380 such written estimate for at least 5 years and shall make the
381 estimate available to the claimant or insured, the insurer, and
382 the department upon request.
383 (b) An insured may cancel the contract with no additional
384 penalties or fees charged by the public adjuster if such an
385 estimate is not provided within 60 days after executing the
386 contract, subject to the cancellation notice requirement in this
387 section, unless the failure to provide the estimate within 60
388 days is caused by factors beyond the control of the public
389 adjuster. The cancellation period shall cease on the date the
390 public adjuster provides the written estimate to the insured.
391 (13) A public adjuster, public adjuster apprentice, or any
392 person acting on behalf of a public adjuster or apprentice may
393 not accept referrals of business from any person with whom the
394 public adjuster conducts business if there is any form or manner
395 of agreement to compensate the person, directly or indirectly,
396 for referring business to the public adjuster. A public adjuster
397 may not compensate any person, except for another public
398 adjuster, directly or indirectly, for the principal purpose of
399 referring business to the public adjuster.
400 (14) A company employee adjuster, independent adjuster,
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401 attorney, investigator, or other persons acting on behalf of an
402 insurer that needs access to an insured or claimant or to the
403 insured property that is the subject of a claim must provide at
404 least 48 hours' notice to the insured or claimant, public
405 adjuster, or legal representative before scheduling a meeting
406 with the claimant or an onsite inspection of the insured
407 property. The insured or claimant may deny access to the
408 property if the notice has not been provided. The insured or
409 claimant may waive the 48-hour notice.
410 (15) The public adjuster must ensure that prompt notice is
411 given of the claim to the insurer, the public adjuster's
412 contract is provided to the insurer, the property is available
413 for inspection of the loss or damage by the insurer, and the
414 insurer is given an opportunity to interview the insured
415 directly about the loss and claim. The insurer must be allowed
416 to obtain necessary information to investigate and respond to
417 the claim.
418 (a) The insurer may not exclude the public adjuster from
419 its in-person meetings with the insured. The insurer shall meet
420 or communicate with the public adjuster in an effort to reach
421 agreement as to the scope of the covered loss under the
422 insurance policy. The public adjuster shall meet or communicate
423 with the insurer in an effort to reach agreement as to the s cope
424 of the covered loss under the insurance policy. This section
425 does not impair the terms and conditions of the insurance policy
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426 in effect at the time the claim is filed.
427 (b) A public adjuster may not restrict or prevent an
428 insurer, company employee adjuster, independent adjuster,
429 attorney, investigator, or other person acting on behalf of the
430 insurer from having reasonable access at reasonable times to any
431 insured or claimant or to the insured property that is the
432 subject of a claim.
433 (c) A public adjuster may not act or fail to reasonably
434 act in any manner that obstructs or prevents an insurer or
435 insurer's adjuster from timely conducting an inspection of any
436 part of the insured property for which there is a claim for loss
437 or damage. The public adjuster representing the insureds may be
438 present for the insurer's inspection, but if the unavailability
439 of the public adjuster otherwise delays the insurer's timely
440 inspection of the property, the public adjuster or the insureds
441 must allow the insurer to have access to the property without
442 the participation or presence of the public adjuster or insureds
443 in order to facilitate the insurer's prompt inspection of the
444 loss or damage.
445 (16) A licensed contractor under part I of chapter 489, or
446 a subcontractor of such licensee, may not advertise, solicit,
447 offer to handle, handle, or perform public adjuster services as
448 provided in subsection (1) unless licensed and compliant as a
449 public adjuster under this chapter. The prohibition against
450 solicitation does not preclude a contractor from suggesting or
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451 otherwise recommending to a consumer that the consumer consider
452 contacting his or her insurer to determine if the proposed
453 repair is covered under the consumer's insurance policy, except
454 as it relates to solicitation prohibited in s. 489.147. In
455 addition, the contractor may discuss or explain a bid for
456 construction or repair of covered property with the residential
457 property owner who has suffered loss or damage covered by a
458 property insurance policy, or the insurer of such p roperty, if
459 the contractor is doing so for the usual and customary fees
460 applicable to the work to be performed as stated in the contract
461 between the contractor and the insured.
462 (17) A public adjuster shall not acquire any interest in
463 salvaged property, except with the written consent and
464 permission of the insured through a signed affidavit.
465 (18) A public adjuster, a public adjuster apprentice, or a
466 person acting on behalf of an adjuster or apprentice may not
467 enter into a contract or accept a power of attorney that vests
468 in the public adjuster, the public adjuster apprentice, or the
469 person acting on behalf of the adjuster or apprentice the
470 effective authority to choose the persons or entities that will
471 perform repair work in a property insurance claim or provide
472 goods or services that will require the insured or third -party
473 claimant to expend funds in excess of those payable to the
474 public adjuster under the terms of the contract for adjusting
475 services.
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476 (19) Subsections (5)-(18) apply only to residential
477 property insurance policies and condominium unit owner policies
478 as described in s. 718.111(11), except that subsection (11) also
479 applies to coverages provided by condominium association,
480 cooperative association, apartment building, and similar
481 policies, including policies covering the common elements of a
482 homeowners' association.
483 Section 8. Subsection (2) of section 626.8796, Florida
484 Statutes, is amended to read:
485 626.8796 Public adjuster contracts; disclosure statement;
486 fraud statement.—
487 (2) A public adjuster contract relating to a property and
488 casualty claim must contain the full name, permanent business
489 address, phone number, e-mail address, and license number of the
490 public adjuster; the full name and license number of the public
491 adjusting firm; and the insured's full name, street address,
492 phone number, and e-mail address, together with a brief
493 description of the loss. The contract must state the percentage
494 of compensation for the public adjuster's services in minimum
495 18-point bold type before the space reserved in the contract for
496 the signature of the insured; the type of claim, including an
497 emergency claim, nonemergency claim, or supplemental claim; the
498 initials of the named insured on each page that does not contain
499 the insured's signature; the signatures of the public adjuster
500 and all named insureds; and the signature date. If all of the
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501 named insureds' signatures are not available, the public
502 adjuster must submit an affidavit signed by the available named
503 insureds attesting that they have authority to enter into the
504 contract and settle all claim issues on behalf of the named
505 insureds. An unaltered copy of the executed contract must be
506 remitted to the insured at the time of execution and to the
507 insurer, or the insurer's representative within 7 days a fter
508 execution. A public adjusting firm that adjusts claims primarily
509 for commercial entities with operations in more than one state
510 and that does not directly or indirectly perform adjusting
511 services for insurers or individual homeowners is deemed to
512 comply with the requirements of this subsection if, at the time
513 a proof of loss is submitted, the public adjusting firm remits
514 to the insurer an affidavit signed by the public adjuster or
515 public adjuster apprentice that identifies:
516 (a) The full name, permanent business address, phone
517 number, e-mail address, and license number of the public
518 adjuster or public adjuster apprentice.
519 (b) The full name of the public adjusting firm.
520 (c) The insured's full name, street address, phone number,
521 and e-mail address, together with a brief description of the
522 loss.
523 (d) An attestation that the compensation for public
524 adjusting services will not exceed the limitations provided by
525 law.
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526 (e) The type of claim, including an emergency claim,
527 nonemergency claim, or supplemental claim.
528 Section 9. Section 627.6426, Florida Statutes, is amended
529 to read:
530 627.6426 Short-term health insurance.—
531 (1) For purposes of this part, the term "short-term health
532 insurance" means health insurance coverage provided by an issuer
533 with an expiration date specified in the contract that is less
534 than 12 months after the original effective date of the contract
535 and, taking into account renewals or extensions, has a duration
536 not to exceed 36 months in total.
537 (2) All contracts for short-term health insurance entered
538 into by an issuer and an individual seeking coverage shall
539 include the following written disclosures signed by the
540 purchaser at the time of purchase disclosure:
541 (a) The following statement:
542
543 "This coverage is not required to comply with certain federal
544 market requirements for health insurance, principally those
545 contained in the Patient Protection and Affordable Care Act. Be
546 sure to check your policy carefully to make sure you are aware
547 of any exclusions or limitations regarding coverage of
548 preexisting conditions or health benefits (such as
549 hospitalization, emergency services, maternity care, preventive
550 care, prescription drugs, and mental health and substance use
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551 disorder services). Your policy might also have lifetime and/or
552 annual dollar limits on health benefits. If this coverage
553 expires or you lose eligibility for this coverage, you might
554 have to wait until an open enrollment period to get other health
555 insurance coverage."
556 (b) The following information:
557 1. The duration of the contract, including any waiting
558 period.
559 2. Any essential health benefit under 42 U.S.C. s.
560 18022(b) that the contract does not provide.
561 3. The content of coverage.
562 4. Any exclusion of preexisting conditions.
563 (3) These disclosures must be printed in no less than 12-
564 point type and in a color that is readable. A copy of the signed
565 disclosures must be maintained by the issuer for a period of 5
566 years after the date of purchase.
567 (4) Disclosures provided by electronic means must meet the
568 requirements of subsection (2).
569 Section 10. Subsection (4) of section 627.70132, Florida
570 Statutes, is renumbered as subsection (5), and a new subsection
571 (4) is added to that section to read:
572 627.70132 Notice of property insurance claim.—
573 (4) A claim resulting from loss assessment as described in
574 s. 627.714 is considered to have occurred on the date of the
575 notice of loss assessment sent by a unit owner's condominium
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576 association.
577 Section 11. Section 791.012, Florida Statutes, is amended
578 to read:
579 791.012 Minimum fireworks safety standards.—The outdoor
580 display of fireworks in this state shall be governed by the
581 National Fire Protection Association (NFPA) 1123, Code for
582 Fireworks Display, 2018 1995 Edition, approved by the American
583 National Standards Institute. Any state, county, or municipal
584 law, rule, or ordinance may provide for more stringent
585 regulations for the outdoor display of fireworks, but in no
586 event may any such law, rule, or ordinance provide for less
587 stringent regulations for the outdoor display of fireworks. The
588 division shall promulgate rules to carry out the provisions of
589 this section. The Code for Fireworks Display shall not govern
590 the display of any fireworks on private, residential property
591 and shall not govern the display of those items included under
592 s. 791.01(4)(b) and (c) and authorized for sale thereunder
593 Section 12. This act shall take effect July 1, 2024.
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