Commerce Committee — Meeting Packet (January 30, 2024)
Summary
Meeting packet for the Florida House of Representatives Commerce Committee meeting of Tuesday, January 30, 2024, at Webster Hall (Knott), with Bob Rommel as Chair and Paul Renner as Speaker. The agenda lists a call to order, roll call, welcome and opening remarks, consideration of CS/HB 85, CS/HB 175, CS/HB 311, HB 479, CS/HB 675, CS/HB 943 and CS/HB 1569, closing remarks and adjournment. The packet then reproduces the staff analysis of CS/HB 85, Pub. Rec./State Banks and State Trust Companies, sponsored by the Insurance & Banking Subcommittee and Barnaby. That analysis states that the Office of Financial Regulation regulates banks, credit unions, finance companies and the securities industry.
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“Commerce Committee — Meeting Packet (January 30, 2024).”
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Commerce Committee
Tuesday, January 30, 2024
10:00 AM - 12:00 PM
Webster Hall (212 Knott)
Meeting Packet
Paul Renner Bob Rommel
Speaker Chair
The Florida House of Representatives
Commerce Committee
Paul Renner Bob Rommel
Speaker Chair
Meeting Agenda
Tuesday, January 30, 2024
10:00 am – 12:00 pm
Webster Hall (212 Knott)
I. Call to Order
II. Roll Call
III. Welcome and Opening Remarks
IV. Consideration of the following bill(s):
CS/HB 85 Pub. Rec./New State Banks and New State Trust Companies by Insurance &
Banking Subcommittee, Barnaby
CS/HB 175 Judgment Liens by Civil Justice Subcommittee, Benjamin
CS/HB 311 Securities by Insurance & Banking Subcommittee, Barnaby
HB 479 Alternative Mobility Funding Systems by Robinson, W.
CS/HB 675 State Recognition of Indian Tribes and Bands by Local Administration,
Federal Affairs & Special Districts Subcommittee, Salzman
CS/HB 943 Pub. Rec./My Safe Florida Home Program by Ethics, Elections & Open
Government Subcommittee, LaMarca
CS/HB 1569 Exemption from Regulation for Bona Fide Nonprofit Organizations by
Insurance & Banking Subcommittee, Grant
V. Closing Remarks
VI. Adjournment
303 House Office Building, 402 South Monroe Street, Tallahassee, FL 32399-1300
(850) 717-4870
CS/HB 85
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 85 Pub. Rec./State Banks and State Trust Companies
SPONSOR(S): Insurance & Banking Subcommittee, Barnaby
TIED BILLS: IDEN./SIM. BILLS: SB 1014
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 17 Y, 0 N, As CS Herrera Lloyd
2) Ethics, Elections & Open Government 14 Y, 0 N Rando Toliver
Subcommittee
3) Commerce Committee Herrera Hamon
SUMMARY ANALYSIS
The Office of Financial Regulation (OFR) regulates banks, credit unions, other financial institutions, finance companies, and
the securities industry. To apply for authority to organize a new state-chartered bank or state-chartered trust company, the
proposed directors must file a written application with the OFR. The application includes information such as the name,
residence, and occupation of each proposed director; the proposed corporate name; the community, including the street
and number, if available, where the principal office of the proposed bank is to be located; the total initial capital; the proposed
business plan; and pro forma financial statements. Additionally, each proposed executive officer, director, and controlling
shareholder must complete and submit detailed biographical and financial information, including, but not limited to, names,
home addresses, current and past employment, and statements of assets, liabilities, and total net worth. The OFR utilizes
this information to ascertain whether the proposed directors and executives have the kind of experience, ability, standing,
and reputation that indicates a reasonable promise of successful operation.
While some existing public record exemptions may apply to certain records received by the OFR pursuant to an application
to organize a new bank, current Florida law does not provide any public record exemptions specifically directed at such
records. On the federal level, several exemptions exist to protect this information from disclosure. Presently, with the
exception of some material for which the applicant may claim trade secret status, the majority of information contained withi n
such an application is subject to public inspection and copying.
The bill creates a public record exemption for certain information received by the OFR in an application for authority to
organize a new state bank or new trust company. This information includes:
Personal financial information;
A driver license number, passport number, military identification number, or any other number or code issued on a
government document used to verify identity;
Books and records of a current or proposed financial institution;
The proposed state bank’s or proposed state trust company’s proposed business plan; and
The personal identifying information of a prospective officer or director, currently affiliated with another financial
institution, obtained through an application for a new state bank or state trust company, is confidential and exempt
from public record requirements until the application is approved and the charter is issued. This includes names,
addresses, emails, phone numbers, relatives' names, work history, professional licenses, education, and
photographs.
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 provides an effective date of July 1, 2024.
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 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 .
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Public Records
The Florida Constitution sets forth the state’s public policy regarding access to government records,
guaranteeing every person a right to inspect or copy any public record of the legislative, executive, and
judicial branches of government.1 The Legislature, however, may provide by general law an exemption2
from public record requirements provided that the exemption passes by a two-thirds vote of each
chamber, states with specificity the public necessity justifying the exemption, and is no broader than
necessary to meet its public purpose.3
Current law also addresses the public policy regarding access to government records by guaranteeing
every person a right to inspect and copy any state, county, or municipal record, unless the record is
exempt.4 Furthermore, the Open Government Sunset Review (OGSR) Act 5 provides that a public
record exemption may be created, revised, or maintained only if it serves an identifiable public purpose
and the “Legislature finds that the purpose is sufficiently compelling to override the strong public policy
of open government and cannot be accomplished without the exemption.” 6 An identifiable public
purpose is served if the exemption meets one of the following purposes:
Allow the state or its political subdivisions to effectively and efficiently administer a
governmental program, which administration would be significantly impaired without the
exemption;
Protect sensitive personal information that, if released, would be defamatory or would
jeopardize an individual’s safety; however, only the identity of an individual may be exempted
under this provision; or
Protect trade or business secrets.7
Pursuant to the OGSR Act, a new public record exemption, or the substantial amendment of an existing
public record exemption, is repealed on October 2nd of the fifth year following enactment, unless the
Legislature reenacts the exemption.8
Office of Financial Regulation (OFR)
The OFR regulates banks, credit unions, other financial institutions, finance companies, and the
securities industry.9 The OFR’s Division of Financial Institutions charters, licenses, and regulates
various entities that engage in financial institution business in Florida, in accordance with the financial
institutions codes (Codes) and the rules promulgated thereunder.10 The specific chapters under the
Codes are:
Chapter 655, F.S. – Financial Institutions Generally
Chapter 657, F.S. – Credit Unions
1 Art. I, s. 24(a), FLA. C ONST.
2 A “public record exemption” means a provision of general law which provides that a specified record, or portion thereof, is n ot subject
to the access requirements of s. 119.07(1), F.S., or s. 24, Art. I of the Florida Constitution. See s. 119.011(8), F.S.
3 Art. I, s. 24(c), FLA. C ONST.
4 See s. 119.01, F.S.
5 S. 119.15, F.S.
6 S. 119.15(6)(b), F.S.
7 Id.
8 S. 119.15(3), F.S.
9 S. 20.121(3)(a)2., F.S.
10 Chs. 655, 657, 658, 660, 662, 663, 665, and 667, F.S.; chs. 69U -100 through 69U-162, F.A.C.
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Chapter 658, F.S. – Banks and Trust Companies
Chapter 660, F.S. – Trust Business
Chapter 662, F.S. – Family Trust Companies
Chapter 663, F.S. – International Banking
Chapter 665, F.S. – Capital Stock Associations
Chapter 667, F.S. – Savings Banks
As of September 30, 2023, the Division of Financial Institutions regulates 198 financial institutions: 11
58 banks
66 credit unions
22 international bank offices
13 trust companies
27 family trust companies
10 qualified limited service affiliates
Regulation of Banks
Under the dual banking system in the United States, banks may be chartered under either state or
federal law:
State-chartered banks are chartered under the laws of the state in which the bank is
headquartered. State-chartered banks have both a state regulator, which for banks chartered by
the State of Florida is the OFR, and a federal regulator. The primary federal regulator for state
banks that are members of the Federal Reserve System is the Board of Governors of the
Federal Reserve System (FRB), and the primary federal regulator for non-member state banks
is the Federal Deposit Insurance Corporation (FDIC). 12
National banks are chartered by the Office of the Comptroller of the Currency (OCC) under the
National Bank Act.13 As such, the OCC is the primary federal regulator for national banks.14
Confidential Treatment of Applications to Charter a National Bank
The federal Freedom of Information Act (FOIA)15 sets forth the process for obtaining federal agency
records, unless the records or any portion thereof are protected from disclosure by one of the FOIA’s
nine exemptions or by one of its three special law enforcement record exclusions. The OCC has set
forth its policies regarding the availability of information under FOIA, as well as procedures for
requesting information, within 12 CFR Part 4, Subpart B. Under the OCC’s FOIA regulations, the
following records, or portions thereof, are exempt from disclosure:16
1) A record that is specifically authorized, under criteria established by an executive order, to be
kept secret in the interest of national defense or foreign policy, and that is properly classified
pursuant to that executive order;
2) A record relating solely to the internal personnel rules and practices of an agency;
3) A record specifically exempted from disclosure by statute (other than 5 U.S.C. § 552b), provided
that the statute requires that the matters be withheld from the public in such a manner as to
leave no discretion on the issue; establishes particular criteria for withholding, or refers to
particular types of matters to be withheld; and, if enacted after the date of enactment of the
OPEN FOIA Act of 2009, specifically cites to 5 U.S.C. § 552(b)(3);
4) A record that is privileged or contains trade secrets, or commercial or financial information,
furnished in confidence, that relates to the business, personal, or financial affairs of any
person;17
11 Email from Ash Mason, Legislative and Cabinet Affairs Director, Office of Financial Regulation, RE: Request for Updated Numbers on
HB 85 (Jan 10. 2024).
12 12 U.S.C. § 1813(q).
13 12 U.S.C. § 38.
14 12 U.S.C. § 1813(q).
15 5 U.S.C. § 552 et. seq.
16 12 C.F.R. § 4.12(b).
17 Notice requirements regarding disclosure of confidential commercial information are contained in 12 C.F.R. § 4.16.
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5) An intra-agency or interagency memorandum or letter not routinely available by law to a private
party in litigation, including memoranda, reports, and other documents prepared by OCC
employees, and records of deliberations and discussions at meetings of OCC employees,
provided that the deliberative process privilege shall not apply to records created 25 years or
more before the date on which the records were requested;
6) A personnel, medical, or similar record, including a financial record, or any portion thereof,
where disclosure would constitute a clearly unwarranted invasion of personal privacy;
7) A record or information compiled for law enforcement purposes, but only to the extent that the
OCC reasonably believes that producing the record or information may:
i. Interfere with enforcement proceedings;
ii. Deprive a person of the right to a fair trial or an impartial adjudication;
iii. Constitute an unwarranted invasion of personal privacy;
iv. Disclose the identity of a confidential source, including a state, local, or foreign agency
or authority, or any private institution that furnished information on a confidential basis;
v. Disclose information furnished by a confidential source, in the case of a record or
information compiled by a criminal law enforcement authority in the course of a criminal
investigation, or by an agency conducting a lawful national security intelligence
investigation;
vi. Disclose techniques and procedures for law enforcement investigations or prosecutions,
or disclose guidelines for law enforcement investigations or prosecutions if such
disclosure reasonably could be expected to risk circumvention of the law; or
vii. Endanger the life or physical safety of any individual;
8) A record contained in or related to an examination, operating, or condition report prepared by,
on behalf of, or for the use of the OCC or any other agency responsible for regulating or
supervising financial institutions; and
9) A record containing or relating to geological and geophysical information and data, including
maps, concerning wells.
An applicant submitting information to the OCC may request that specific information be treated as
confidential when the materials are submitted.18 If the OCC does not consider the information to be
confidential, the OCC may include that information in the public file after providing notice to the
submitter.19 In addition, the OCC may, at its own initiative, determine that certain information should be
treated as confidential and withhold that information from the public file.20 While a filing is pending with
the OCC, the OCC licensing office may provide the public portion of a filing to any person who requests
it.21 The public file consists of those portions of the filing, supporting data, and supplementary
information that was submitted by the applicant and by interested persons and not afforded confidential
treatment.22
An applicant is encouraged to request confidential treatment for portions of a filing containing
personally identifiable information (PII).23 The term “PII” refers to information that can be used to
distinguish or trace an individual’s identity, either alone or when combined with other information that is
linked or linkable to a specific individual.24 Examples of PII include an individual’s first name or first
initial and last name, social security number, passport number, credit card numbers, clearances, bank
numbers, biometrics (for example, fingerprints), date or place of birth, mother’s maiden name, or
medical data.25
18 Office of the Comptroller of the Currency, Comptroller’s Licensing Manual: General Policies and Procedures (Apr. 2022) at 4,
https://www.occ.gov/publications-and-resources/publications/comptrollers-licensing-manual/files/licensing-booklet-general-policies-and-
procedures.html (last visited Jan. 19, 2024).
19 Id.
20 Id.
21 Id.
22 Id. at 6.
23 Id. at 4.
24 Id.
25 Id.
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Each organizing group must disclose its proposed CEO to the OCC at the time the group files the
charter application.26 If the proposed CEO wants to have his or her name withheld from the public until
the OCC grants preliminary conditional approval, the organizers should:27
Include a request for confidential treatment with the materials submitted in the charter
application;
Provide support for their request that disclosure would constitute an unwarranted invasion of
personal privacy under exemption six of FOIA28 or result in substantial competitive harm to the
organizers or the proposed CEO under exemption four of FOIA; 29
List in the application the criteria that were used in the selection process;
Provide a detailed description of the person’s background, experience, and qualifications in the
public portion of the application that is sufficiently specific to permit matching the application
information with the person once his or her identity is disclosed; and
Discuss the proposed terms of employment for the CEO, including compensation and benefits.
Formation of a De Novo (New) State-Chartered Bank or State-Chartered Bank Trust Company
In order to apply for authority to organize a new state-chartered bank or state-chartered trust company,
the proposed directors must file a written application with the OFR on form OFR-U-1.30 The application
includes such information as the name, residence, and occupation of each proposed director; the
proposed corporate name; the community, including the street and number, if available, where the
principal office of the proposed bank or trust company is to be located; the total initial capital; the
proposed business plan; and pro forma financial statements. 31 Additionally, each proposed executive
officer, director, and major shareholder must complete and submit an Interagency Biographical and
Financial Report, Form OFR-U-10.32 This form requires extensive personal identification information
and personal financial information, including, but not limited to names, home addresses, current and
past employment, and statements of assets, liabilities, and total net worth.
Within 21 days after receipt of an application, the OFR must file notice of the application in the Florida
Administrative Register, and any person may request a hearing within 21 days after publication of the
notice.33 If a hearing is requested, the applicant must publish at its own expense a notice of the hearing
in a newspaper of general circulation in the area affected by the application.34
The OFR utilizes the information contained in the application in order to make an investigation of:35
1) The character, reputation, financial standing, business experience, and business qualifications
of the proposed officers and directors.
2) The need for bank facilities or additional bank facilities, as the case may be, in the primary
service area where the proposed bank is to be located.
3) The ability of the primary service area to support the proposed bank and all other existing bank
facilities in the primary service area.
After making such investigation, the OFR must approve an application if it finds the following: 36
1) Local conditions indicate reasonable promise of successful operation for the proposed state
bank.
2) The proposed capitalization is adequate, but at least $8 million.
26 Office of the Comptroller of the Currency, Comptroller’s Licensing Manual: Charters (Dec. 2021) at 15-16,
https://www.occ.treas.gov/publications-and-resources/publications/comptrollers-licensing-manual/files/charters.pdf (last visited Jan. 19,
2024).
27 Id.
28 12 C.F.R. § 4.12(b)(6).
29 12 C.F.R. § 4.12(b)(4).
30 S. 658.19(1), F.S.; rule 69U-105.202(1), F.A.C. The form is available at https://flofr.gov/sitePages/CommercialBanks.htm (last visited
Jan. 19, 2024).
31 Id.
32 Id.
33 S. 120.80(3)(a)1., F.S.
34 Id.
35 S. 658.20(1), F.S.
36 S. 658.21, F.S.
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3) The proposed capital structure is in such form as the OFR may require, subject to certain
minimum requirements.
4) Regarding officers and directors:
a. The proposed officers have sufficient financial institution experience, ability, standing,
and reputation and the proposed directors have sufficient business experience, ability,
standing, and reputation to indicate reasonable promise of successful operation.
b. None of the proposed officers or directors has been convicted of, or pled guilty or nolo
contendere to, any violation of s. 655.50, F.S., relating to the control of money
laundering and terrorist financing; ch. 896, F.S., relating to offenses related to financial
institutions; or similar state or federal law.
c. At least two of the proposed directors who are not also proposed officers have had at
least one year of direct experience as an executive officer, regulator, or director of a
financial institution within the five years before the date of the application. However, if
the applicant demonstrates that at least one of the proposed directors has very
substantial experience as an executive officer, director, or regulator of a financial
institution more than five years before the date of the application, the OFR may allow the
applicant to have only one director who has direct financial institution experience within
the last five years.
d. The proposed president or chief executive officer must have had at least one year of
direct experience as an executive officer, director, or regulator of a financial institution
within the last five years.
5) The corporate name of the proposed state bank or trust company is approved by the OFR.
6) Provision has been made for suitable quarters at the location in the application.
Upon approval of an application, the OFR issues a bank charter or trust company that is public record
and contains the names of the banks officers and members of the board of directors. The names of
bank shareholders would continue to be confidential and exempt37 from public record requirements
pursuant to s. 655.057(2) and (8), F.S.38
Current Public Record Exemptions Related to Financial Institutions
Presently, s. 655.057, F.S., contains a number of public record exemptions for certain records relating
to OFR’s regulation of financial institutions:
Subsection 655.057(1), F.S., makes confidential and exempt records and information relating to
active investigations. The records remain confidential and exempt after the investigation is
completed or ceases to be active to the extent disclosure would jeopardize the integrity of
another active investigation, impair the safety and soundness of the financial institution, reveal
personal financial information, reveal the identity of a confidential source, defame or cause
unwarranted damage to the good name or reputation of an individual or jeopardize the safety of
an individual, or reveal investigative techniques or procedures.
Subsection 655.057(2), F.S., makes confidential and exempt reports of examinations,
operations, or condition, including working papers, or portions thereof, prepared by, or for the
use of, the OFR or any other state agency or federal agency responsible for the regulation or
supervision of financial institutions. However, this exemption provides for the following release
of such reports:
o The reports may be released to specified persons such as the financial institution under
examination (or its holding company) and certain proposed acquirers of a financial
institution.
37 There is a difference between records the Legislature designates exempt from public record requirements and those the Legislature
designates confidential and exempt. A record classified as exempt from public disclosure may be disclosed under certain
circumstances. See WFTV, Inc. v. Sch. Bd. of Seminole, 874 So.2d 48, 53 (Fla. 5th DCA 2004), review denied, 892 So.2d 1015 (Fla.
2004); State v. Wooten, 260 So. 3d 1060, 1070 (Fla. 4th DCA 2018); City of Riviera Beach v. Barfield, 642 So.2d 1135 (Fla. 4th DCA
1994); Williams v. City of Minneola, 575 So.2d 683, 687 (Fla. 5th DCA 1991). If the Legislature designates a record as confidential and
exempt from public disclosure, such record may not be released by the custodian of public records to anyone other than the persons or
entities specifically designated in statute. See Op. Att’y Gen. Fla. 04-09 (2004).
38 However, the name of a foreign national who proposes to own or control 10 percent or mo re of any class of a bank’s voting
securities, would become public pursuant to s. 120.80(3)(a)4., F.S.
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o The reports must be released within one year after the appointment of a liquidator,
receiver, or conservator to the financial institution, except that portions of the reports
which identify specified individuals such as depositors and stockholders remain
confidential and exempt.
Subsection 655.057(3), F.S., makes confidential and exempt the OFR’s informal enforcement
actions to the extent that disclosure would jeopardize the integrity of another active
investigation, impair the safety and soundness of the financial institution, reveal personal
financial information, reveal the identity of a confidential source, defame or cause unwarranted
damage to the good name or reputation of an individual or jeopardize the safety of an individual,
or reveal investigative techniques or procedures.
Subsection 655.057(4), F.S., makes confidential and exempt trade secrets, as defined in s.
688.002, F.S., which comply with s. 655.0591, F.S., and are held by the OFR in accordance
with its statutory duties.
Subsections 655.057(7) and (8), F.S., make confidential and exempt a list of stockholders or
members of a financial institution.
Subsections 655.057(5) and (6), F.S., permit the following release of records or information which
otherwise fall under exemptions provided in the statute:
Publishing specified reports that are required to be submitted to the OFR or that are required by
applicable federal statutes or regulations to be published.
Furnishing records or information to any other state, federal, or foreign agency responsible for
the regulation or supervision of financial institutions.
Disclosing or publishing summaries of the condition of financial institutions and general
economic and similar statistics and data, provided that the identity of a particular financial
institution is not disclosed.
Reporting any suspected criminal activity, with supporting documents and information, to
appropriate law enforcement and prosecutorial agencies.
Furnishing information upon request to the Chief Financial Officer or the Division of Treasury of
the Department of Financial Services regarding the financial condition of any financial institution
that is, or has applied to be, designated as a qualified public depository pursuant to ch. 280,
F.S.
Furnishing information to Federal Home Loan Banks regarding its member institutions pursuant
to an information sharing agreement between the Federal Home Loan Banks and the OFR.
Providing records or information pursuant to an order of a court or an administrative law judge
or pursuant to a legislative subpoena, according to specified procedures and restrictions.
While some of the above public record exemptions, or other public record exemptions provided in ch.
119, F.S., may apply to certain records received by the OFR pursuant to an application to organize a
new bank or trust company, current statutes do not provide a public record exemption specifically
directed at such applications. Presently, with the exception of some material for which the applicant
may claim trade secret status pursuant to s. 655.0591, F.S., all of the information received by the OFR
on form OFR-U-1 is subject to public inspection and copying. Additionally, significant portions of the
information received by the OFR on form OFR-U-10 are subject to public inspection and copying, with
only certain information, such as social security numbers, passport numbers, home county identification
numbers, immigration file numbers, and certain financial disclosures being exempt from public record
requirements.
Effect of the Bill:
The bill creates a public record exemption within s. 655.057, F.S., for certain information received by the
OFR pursuant to an application for authority to organize a new state bank or new trust company.
Specifically, the bill provides that, except for those portions that are otherwise public record, the following
information received by the OFR pursuant to an application for authority to organize a new state bank or
new trust company under ch. 658, F.S., is confidential and exempt from public record requirements:
Personal financial information;
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A driver license number, passport number, military identification number, or any other number or
code issued on a government document used to verify identity;
Books and records of a current or proposed financial institution;
The proposed state bank’s or proposed state trust company’s proposed business plan; and
The personal identifying information of a prospective officer or director, currently affiliated with
another financial institution, obtained through an application for a new state bank or state trust
company, is confidential until the application is approved and the charter is issued. This includes
names, addresses, emails, phone numbers, relatives' names, work history, professional licenses,
education, and photographs.
These exemptions either expand, or create more specific exemptions for the subject records. For example,
driver license numbers are confidential and exempt for several purposes, 39 but there is not an exemption
for driver license numbers held by the OFR.
The exemption created in the bill only provides protection for information that is not otherwise public record.
Upon approval of an application, the OFR issues a bank charter or state trust that is a public record and
contains the names of the banks officers and members of the board of directors. The names of bank
shareholders would continue to be confidential and exempt from public record requirements pursuant to s.
655.057(2) and (8), F.S.40
The exemption is 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. Amends s. 655.057, F.S., relating to records; limited restrictions upon public access.
Section 2. Provides a statement of public necessity.
Section 3. 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:
See Fiscal Comments.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
39 Pursuant to section 97.0585(1)(c), F.S., driver license numbers which are held by an agency and obtained for the purpose of voter
registration, are confidential and exempt from public record requirements. They are also made confidential and exempt if cont ained in a
uniform traffic citation held by an agency. See section 316.650(11)(b)1., F.S..
40 See supra note 38 .
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The proposed public record exemption may encourage and attract the formation of new banks or trust
companies as Florida-chartered institutions, in which case the bill would have a positive impact on
investment, employment, economic growth, and consumer access to financial services. However, the
impact to the private sector is indeterminate.
D. FISCAL COMMENTS:
The bill may have a minimal fiscal impact on agencies because agency staff responsible for complying
with public record 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 likely be absorbed by existing resources, as they are
part of the day-to-day responsibilities of 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. The public necessity statement states, in part, that the
Legislature finds that the exemption is necessary to ensure the OFR’s ability to administer its
regulatory duties while preventing unwarranted damage to the proposed state bank or proposed
state trust company, certain proposed officers or proposed directors of the proposed state bank or
trust company, and other financial institutions in the state.
Breadth of Exemption
Article I, s. 24(c) of the Florida Constitution requires a newly created public record 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 the OFR pursuant to an application for authority
to organize a new state bank. The purpose of the exemption is to protect sensitive personal,
financial, and business information that the OFR receives in conjunction with its duties related to the
review of applications for the organization or establishment of new state banks. 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.
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IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On January 11, 2024, the Insurance & Banking Subcommittee considered the bill, adopted a strike-all
amendment, and reported the bill favorably as a committee substitute. The amendment made the following
changes to the bill:
Narrowed the type of documents proposed to be confidential and exempt from public record to the
only the business plan instead of the business plan and any attached or supporting documentation.
Narrowed the scope of personal identifying information that is proposed to be confidential and
exempt from public record to only that of a proposed officer or proposed director who works for
another financial institution. As filed, the bill would make confidential and exempt from public record
the personal identifying information of a shareholder, subscriber, proposed officer, or proposed
director.
Eliminated the requirement that applicants designate certain information confidential when
submitting their applications.
Made additional changes to conform the bill to its Senate companion.
The analysis is drafted to the committee substitute as passed by the Insurance & Banking Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 85 2024
1 A bill to be entitled
2 An act relating to public records; amending s.
3 655.057, F.S.; providing an exemption from public
4 records requirements for certain information received
5 by the Office of Financial Regulation relating to an
6 application for authority to organize a new state bank
7 or new state trust company; providing an exemption
8 from public records requirements for certain
9 information received by the office relating to an
10 application for authority to organize a new state bank
11 or new state trust company until specified conditions
12 are met; defining the term "personal identifying
13 information"; providing for future legislative review
14 and repeal of the exemptions; providing a statement o f
15 public necessity; providing an effective date.
16
17 Be It Enacted by the Legislature of the State of Florida:
18
19 Section 1. Present subsections (5) through (13) of section
20 655.057, Florida Statutes, are redesignated as subsections (6)
21 through (14), respectively, and a new subsection (5) is added to
22 that section, to read:
23 655.057 Records; limited restrictions upon public access. —
24 (5)(a) Except as otherwise provided in this section and
25 except for those portions that are otherwise public record, the
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26 following information received by the office pursuant to an
27 application for authority to organize a new state bank or new
28 state trust company under chapter 658 is confidential and exempt
29 from s. 119.07(1) and s. 24(a), Art. I of the State
30 Constitution:
31 1. Personal financial information.
32 2. A driver license number, a passport number, a military
33 identification number, or any other number or code issued on a
34 government document used to verify identity.
35 3. Books and records of a current or proposed financial
36 institution.
37 4. The proposed state bank's or proposed state trust
38 company's proposed business plan.
39 (b) The personal identifying information of a proposed
40 officer or proposed director who is currently employed by, or
41 actively participates in the affairs of, another financial
42 institution received by the office pursuant to an application
43 for authority to organize a new state bank or new state trust
44 company under chapter 658 is confidential and exempt from s.
45 119.07(1) and s. 24(a), Art. I of the State Constitution until
46 the application is approved and the charter is issued. As used
47 in this paragraph, the term "personal identifying information"
48 means names, home addresses, e-mail addresses, telephone
49 numbers, names of relatives, work experience, professional
50 licensing and educational backgrounds, and photographs.
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CS/HB 85 2024
51 (c) This subsection is subject to the Open Government
52 Sunset Review Act in accordance with s. 119.15 and is repealed
53 October 2, 2029, unless reviewed and saved from repeal through
54 reenactment by the Legislature.
55 Section 2. The Legislature finds that it is a public
56 necessity that certain information received by the Office of
57 Financial Regulation pursuant to an application for authority to
58 organize a new state bank or new state trust company under
59 chapter 658, Florida Statutes, be made confidential and exempt
60 from s. 119.07(1), Florida Statutes, and s. 24(a), Article I of
61 the State Constitution to the extent that disclosure would
62 reveal personal financial information; reveal a driver license
63 number, a passport number, a military identification number, or
64 any other number or code issued on a government document used to
65 verify identity; reveal books and records of a current or
66 proposed financial institution; or reveal a proposed state
67 bank's or proposed state trust company's business plan and any
68 attached supporting documentation. The Legislature further finds
69 that it is a public necessity that the personal identifying
70 information of a proposed officer or proposed director who is
71 currently employed by, or actively participates in the affairs
72 of, another financial institution be made confidential and
73 exempt from s. 119.07(1), Florida Statutes, and s. 24(a),
74 Article I of the State Constitution for the duration of the
75 application process, until the application is approved and a
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CS/HB 85 2024
76 charter is issued. The office may receive sensitive personal,
77 financial, and business information in conjunction with its
78 duties related to the review of applications for the
79 organization or establishment of new state banks and new state
80 trust companies. These exemptions from public records
81 requirements are necessary to ensure the office's ability to
82 administer its regulatory duties while preventing unwarranted
83 damage to the proposed state bank or proposed state trust
84 company, or certain proposed officers or proposed directors of
85 the proposed state bank or proposed state trust company, and
86 other financial institutions in this state. The release of
87 information that could lead to the identification of an
88 individual involved in the potential establishment of a new
89 state bank or new state trust company may subject such
90 individual to retribution and jeopardize his or her current
91 employment with, or participation in the affairs of, another
92 financial institution. Thus, the public availability of such
93 information has a chilling effect on the establishment of new
94 state banks and new state trust companies. Further, the public
95 availability of the books and financial records of a current or
96 proposed financial institution in this state presents a n
97 unnecessary risk of harm to the business operations of such
98 institution. Finally, the public availability of a proposed
99 state bank's or proposed state trust company's business plan may
100 cause competitive harm to such bank's or trust company's future
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101 business operations and presents an unfair competitive advantage
102 for existing financial institutions that are not required to
103 release such information.
104 Section 3. This act shall take effect July 1, 2024.
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CS/HB 175
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 175 Judgment Liens
SPONSOR(S): Civil Justice Subcommittee, Benjamin
TIED BILLS: IDEN./SIM. BILLS: SB 984
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Civil Justice Subcommittee 18 Y, 0 N, As CS Mawn Jones
2) Commerce Committee Wright Hamon
3) Judiciary Committee
SUMMARY ANALYSIS
When a plaintiff in a civil lawsuit obtains a monetary judgment in its favor and becomes a “judgment creditor,”
either the defendant (“judgment debtor”) will pay the judgment creditor the money owed or the judgment
creditor may seek to satisfy the judgment from the judgment debtor’s property which is not exempt from a
creditor’s reach. To assist in judgment satisfaction, Florida law has long authorized a judgment creditor to
obtain a lien on the judgment debtor’s non-exempt real and tangible personal property. However, until July 1,
2023, Florida law did not allow a judgment lien to attach to a judgment debtor’s intangible personal property,
including payment intangibles and accounts and the proceeds thereof, which could be pledged as collateral for
a security agreement under Article 9 of the Uniform Commercial Code (“UCC”), codified in Ch. 679, F.S. This
changed with the passage of 2023 CS/HB 27, which, in pertinent part:
Allowed a judgment lien to attach to payment intangibles and accounts and the proceeds thereof;
Specified such a judgment lien’s priority as against pre-existing security agreements; and
Clarified when a third party owing money to a judgment debtor under payment intangibles or accounts
(“account debtor”) must stop paying the judgment debtor, and specified how such an account debtor
may thereafter discharge his or her payment obligations.
Once a judgment lien is secured, the judgment lienholder has numerous judicial remedies available to enforce
the lien. However, Florida law provides that a judgment lien on a motor vehicle or vessel, though enforceable
against the judgment debtor, is not enforceable against creditors or subsequent purchasers unless the lien is
noted on the vehicle or vessel’s title certificate. 2023 CS/HB 27 created two statutory mechanisms for lien
notation on title certificates.
CS/HB 175:
Clarifies when a judgment lien may attach to payment intangibles or accounts.
Clarifies that the filing of a noncompliant judgment lien certificate does not preclude the subsequent
filing of a compliant certificate.
Clarifies that the priority of conflicting rights between a secured party and a judgment lienholder or a
judgment creditor without an enforceable lien is determined under Ch. 679, F.S.
Clarifies that, if a judgment debtor’s personal property includes a motor vehicle or vessel, Ch. 679, F.S.,
may be used where appropriate to determine a judgment lien’s enforceability.
Provides that, where an account debtor is served with a complaint or petition by a judgment creditor
seeking judicial relief with respect to payment intangibles or accounts, the account debtor may
thereafter discharge its payment obligation in accordance with a settlement agreement.
Changes the phrase “be primed as to” to “take priority over” as it relates to a judgment lien’s effect to
conform the terminology with terminology used elsewhere in Florida law and the UCC.
The bill does not appear to have a fiscal impact on local governments but may have a limited fiscal impact on
the state court system. The bill provides an effective date of upon becoming a law.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Judgment Liens
Creation and Enforcement
When a plaintiff in a civil lawsuit obtains a monetary judgment in its favor and becomes a “judgment
creditor,” either the defendant (“judgment debtor”) will pay the judgment creditor the money owed or the
judgment creditor may seek to satisfy the judgment from the judgment debtor’s property which is not
exempt from the reach of creditors.1 To assist in judgment satisfaction, Florida law has long authorized
a judgment creditor to obtain a lien2 on the judgment debtor’s non-exempt:3
Real property, secured by recording a certified copy of the judgment in the county in which the
real property is located.4
Tangible personal property,5 secured by recording a judgment lien certificate with the Florida
Department of State (“DOS”).6
The main benefit of a judgment lien is that the judgment debtor can no longer easily sell the liened
property because any purchaser would, generally speaking, acquire the property subject to the lien. In
other words, a purchaser would assume the obligation to satisfy the lien, making the property
unappealing to buy, or else face the possibility that the judgment lienholder may foreclose on the lien.
Additionally, a judgment creditor seeking to enforce a judgment lien on personal property has several
judicial remedies, including an order, known as a writ of execution, issued by the clerk of the circuit
court directing the sheriff to take into possession a judgment debtor’s non-exempt property to satisfy
the lien.7
Further, where the clerk has issued a writ of execution but the judgment remains unsatisfied, a
judgment creditor may bring a proceeding supplementary to execution in which the court may summon
the judgment debtor and any involved third parties to be questioned about property that may be the
subject of the writ and issue an order that the sheriff seize such property.8 A proceeding supplementary
to execution is a continuation of the original lawsuit that resulted in the judgment and, thus, a judgment
creditor is not required to file a separate action to initiate the proceeding.9
1 S. 55.141, F.S.
2
A lien is a claim against property that evidences a debt, obligation, or duty. Fla. Jur. 2d Liens s. 37:1.
3 A judgment debtor that is an individual may choose to exempt one motor vehicle worth $1,000 or less and, if the debtor does not claim
or receive a homestead exemption, additional personal property items with an aggregate worth of $4,000 or less. Corporations and
other business entities are not entitled to exemptions. Ss. 55.201 -55.209 and 222.25(1) and (4), F.S.; art. X, s. 4, Fla. Const.; s.
55.10(1), F.S.
4 Recording the certified copy of the judgment establishes the lien’s priority; in other words, the recording of the judgment g enerally
guarantees that the lienholder will be paid before lienholders with la ter-recorded liens on the same property. However, homestead
property is exempt from the reach of creditors. S. 55.10(1), F.S.; art. X, s. 4, Fla. Const.; s. 55.10(1), F.S.
5 “Tangible personal property” is property which is capable of being taken into poss ession by the sheriff. Examples include motor
vehicles, vessels, mobile homes, furniture, jewelry, stocks, and artwork. S. 56.061, F.S.
6 The judgment lien certificate establishes the lien’s priority; in other words, the filing of a judgment lien certifica te generally guarantees
that the lienholder will be paid before lienholders with later-perfected liens on the judgment debtor’s tangible personal property.
7 Other judicial remedies include attachment under ch. 76, F.S; garnishment under ch. 77, F.S.; and a charging order under ss.
605.0503, 620.1703, or 620.8504, F.S. Legal Information Institute, Writ of Execution, https://www.law.cornell.edu/wex/writ_of_execution
(last visited Jan. 11, 2024).
8 Judicial process is important for lien satisfaction as it gives the judgment debtor an opportunity to go before the court and argue that
specific property the judgment creditor is trying to obtain is exempt from seizure and should not be taken to sati sfy the lien. S. 56.29,
F.S.
9 Id.
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Judgment Liens on Intangible Personal Property
Before July 1, 2023, Florida law did not allow a judgment lien to attach to intangible personal property,
such as royalty rights and the right to receive rents or payments for the sale of goods or services.10
Thus, a judgment debtor’s intangible personal property remained outside the reach of a judgment
creditor even though the value of such property might have been significant and sufficient to satisfy the
judgment lien. However, during the 2023 Legislative Session, the Legislature passed CS/HB 27 which,
in pertinent part, allowed a judgment lien to attach to certain types of intangible personal property
(specifically payment intangibles and accounts and the proceeds thereof) and specified the priority of
such liens as against pre-existing security agreements in which such property was pledged as collateral
to secure the loan.11
Judgment Liens on Motor Vehicles and Vessels
Florida law provides that a judgment lien on a motor vehicle or vessel, though enforceable against the
judgment debtor, is not enforceable against creditors or subsequent purchasers for value unless the
lien is noted on the title certificate.12 Thus, where a judgment creditor obtains a lien on a motor vehicle
or vessel and the lien is not noted on the title certificate, the judgment debtor may sell the subject
property free of the lien.
Before July 1, 2023, a judgment creditor’s only remedy was to petition the court to order the
Department of Highway Safety and Motor Vehicles (“DHSMV”) to note the lien on the title certificate;
however, this process was not spelled out in statute and confusion existed as to whether the judgment
creditor needed to institute a separate action to obtain such an order or merely initiate a proceeding
supplementary to execution. 2023 CS/HB 27 provided two statutory mechanisms by which a judgment
creditor may cause a judgment lien to be noted on the title certificate of a judgment debtor’s motor
vehicle or vessel, thereby ensuring that a subsequent purchaser of the vehicle or vessel takes title to
such property subject to the lien.
Secured Transactions Under the UCC
The Uniform Commercial Code (“UCC”), adopted in all fifty states, is a set of laws governing and
providing uniformity in commercial transactions.13 Florida’s UCC provisions are codified in chapters
670-680 of the Florida Statutes.
Article 9 of the UCC (codified in ch. 679, F.S.) governs secured transactions, meaning transactions
involving the granting of credit under a security agreement in exchange for the borrower’s pledge of
personal property (“collateral”) which the secured party may take possession of if the debtor defaults on
the loan.14 In addition to tangible personal property, collateral recognized by the UCC includes:
Accounts, meaning a right to payment of a monetary obligation:
o For property that has been or is to be sold, leased, licensed, assigned, or otherwise
disposed of;
o For services rendered or to be rendered;
o For a policy of insurance issued or to be issued;
o For a secondary obligation incurred or to be incurred;
o For energy provided or to be provided;
o For the use or hire of a vessel under a charter or other contract;
o Arising out of the use of a credit or charge card; or
10 S. 56.061, F.S.
11 Ch. 2023-300, L.O.F.
12 “Title certificate” means the record that is evidence of ownership of a vehicle, whether a paper certificate authorized by th e
Department of Highway Safety and Motor Vehicles or a certificate consisting of information that is stored in an electronic fo rm in the
department’s database. Ss. 319.001(1) and 319.27(2), F.S.
13 Chs. 670-680, F.S.; Uniform Law Commission, Uniform Commercial Code, https://www.uniformlaws.org/acts/ucc (last visited Jan. 11,
2024).
14 For example, a mortgage loan is typically a secured transaction wherein the home is pledged as collateral for the loan; in other
words, if the borrower defaults on his or her mortgage payments, the mortgage company may (through appropriate legal process) take
possession and ownership of the purchased home. Id.
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o As winnings in a lottery or other game of chance operated or sponsored by a state or its
governmental unit.15
Payment intangibles, meaning general intangibles 16 under which the account debtor’s 17
principal obligation is a monetary obligation.18
Under 2023 CS/HB 27, accounts and payment intangibles are forms of intangible personal property to
which a judgment lien may now attach. Further, CS/HB 27 clarified that a third party owing money to a
judgment debtor under payment intangibles or accounts (“account debtor”) must stop paying the
judgment debtor only when the account debtor is served by process with a complaint or petition by the
judgment creditor seeking judicial relief with respect to the payment intangibles or accounts . Thereafter,
the account debtor may discharge the account debtor’s payment obligation only in accordance with a
final order or judgment.
Effect of Proposed Changes
Judgment Liens
CS/HB 175 amends s. 55.202(2), F.S., to clarify that, for a judgment lien to attach to payment
intangibles or accounts, the judgment debtor must be located in the state (as established by s.
679.3071, F.S., which provision establishes rules for determining a debtor’s location). Thus, the bill
attempts to forestall jurisdictional or due process disputes which could otherwise arise if a judgment
creditor inappropriately tried to enforce a judgment lien across state lines. The bill also amends this
subsection to clarify that the filing of a non-compliant judgment lien certificate, which certificate is
permanently void and of no effect by operation of law, does not preclude the subsequent filing of a
compliant judgment lien certificate. Thus, the bill ensures that a judgment creditor is able to preserve
his or her rights by filing a statutorily-compliant judgment lien certificate even if the judgment creditor
first files a non-compliant certificate.
Further, the bill amends s. 55.202(3), F.S., to clarify that the priority of conflicting rights as between a
judgment lienholder and a secured party will be determined under Article 9 of the UCC, as codified in
Ch. 679, F.S. Thus, the bill continues to prevent a judgment lienholder’s rights from taking priority over
the rights of a secured party whose security interest predated the filing off the judgment lien certificate
unless Ch. 679, F.S., specifies otherwise.
Similarly, the bill amends s. 55.205(1), F.S. to clarify that, where a judgment creditor who has not
acquired a judgment lien or whose lien has lapsed decides to proceed against the judgment debtor’s
property through appropriate judicial process, the judgment creditor may do so subject to the priority of
conflicting rights under Ch. 679, F.S. Thus, the bill continues to prevent the rights of a judgment creditor
without an enforceable judgment lien from taking priority over the rights of a secured party whos e
security interest predated the establishment of the judgment creditor’s rights unless Ch. 679, F.S.,
specifies otherwise.
Finally, the bill amends s. 55.205(5)(a), F.S., to clarify that, if a judgment debtor’s personal property
includes a motor vehicle or vessel, the enforceability of a judgment lien against the creditors or
subsequent purchasers of such vehicle or vessel may be determined under Ch. 679, F.S., in addition to
the title statutes already provided for in current law. Thus, the bill continues to preserve the rights of
creditors and subsequent purchasers of a vehicle or vessel on which a judgment lien attached.
15 The term includes healthcare receivables but does not include rights to payment evidenced by chattel paper or an instrument;
commercial tort claims; deposit accounts; investment property; letter-of-credit rights or letters of credit; or rights to payment for money
or funds advanced or sold, other than rights arising out of the use of a credit or charge card. S. 9 -102(2), UCC; s. 679.1021(1), F.S.
16 “General intangibles” are any form of intangible personal property, including things in action, other than a ccounts, chattel paper,
commercial tort claims, deposit accounts, documents, goods, instruments, investment property, letter -of credit rights, letters of credit,
money, and oil, gas, or other minerals before extraction. Examples include partnership interes ts, various licenses (such as a liquor
license), publication rights, and intellectual property (such as copyrights). S. 9 -102, UCC; s. 679.1021(1)(pp), F.S.
17 “Account debtor” means a person obligated on an account, chattel paper, or general intangible but does not include a person
obligated to pay a negotiable instrument. S. 9-102, UCC; s. 679.1021(1)(c), F.S.
18 S. 9-406, UCC; s. 679.1021(1), F.S.
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Secured Transactions Under the UCC
The bill amends s. 55.205(7), F.S., to provide that, where an account debtor is served with a complaint
or petition by a judgment creditor seeking judicial relief with respect to payment intangibles or accounts,
the account debtor may thereafter discharge the account debtor’s payment obligation in accordance
with a settlement agreement. Thus, where there is a dispute as to an account debtor’s payment
obligations, the parties to the dispute would be allowed to resolve the dispute by settlement agreement,
instead of having to wait for the account debtor’s payment obligations to be established by final order or
judgment as required under current law.
Further, the bill changes the phrase “may not be primed as to” in s. 55.208(1), F.S., to “may not take
priority over.” This is a non-substantive change conforming the terminology used in this section, relating
to the effect of prior liens on payment intangibles and accounts, to the terminology used elsewhere in
Florida law and the UCC.
Effective Date
The bill provides an effective date of upon becoming a law.
B. SECTION DIRECTORY:
Section 1: Amends s. 55.202, F.S., relating to judgments, orders, and decrees; lien on personal
property.
Section 2: Amends s. 55.205, F.S., relating to effect of judgment lien.
Section 3: Amends s. 55.208, F.S., relating to effect of prior liens on payment intangibles and
accounts; effect of filed judgment lien on writs of execution previously delivered to a sheriff.
Section 4: Provides an effective date of upon becoming a law.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
The bill may reduce state government expenditures to the extent that disputes involving an account
debtor’s payment obligations as to payment intangibles or accounts are resolved by settlement
agreement, thereby reducing the burden on the state court system.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
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C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
The bill may have a positive financial impact on the private sector to the extent that:
Certain jurisdictional and due process disputes are forestalled due to clarifications made by the
bill.
Disputes involving an account debtor’s payment obligations as to payment intangibles or
accounts are resolved by settlement agreement, thereby reducing litigation costs for the parties
to the dispute.
The rights of a secured party are further protected by the clarifications made in the bill.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
Not applicable.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On January 11, 2024, the Civil Justice Subcommittee adopted an amendment and reported the bill
favorably as a committee substitute. The amendment:
Clarified that, for a judgment lien to attach to payment intangibles or accounts, the judgment debtor
must be located in the state, as established by s. 679.3071, F.S.
Clarified that the filing of a non-compliant judgment lien certificate does not preclude the
subsequent filing of a compliant judgment lien certificate.
This analysis is drafted to the committee substitute as passed by the Civil Justice Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 175 2024
1 A bill to be entitled
2 An act relating to judgment liens; amending s. 55.202,
3 F.S.; authorizing a judgment lien to attach to
4 specified personal property and all payment
5 intangibles and accounts of a judgment debtor located
6 in this state; providing definitions; specifying that
7 the filing of a noncompliant judgment lien certificate
8 does not preclude the subsequent filing of a compliant
9 judgment lien certificate; specifying the provisions
10 to be used in resolving the priority of conflicting
11 rights between a judgment lienholder and a secured
12 party; amending s. 55.205, F.S.; specifying that the
13 rights of certain judgment debtors to proceed against
14 the judgment debtor's property are subject to certain
15 provisions; providing that an account debtor may
16 discharge certain obligations through a settlement
17 agreement; amending s. 55.208, F.S.; revising
18 provisions concerning the priority of certain judgment
19 liens; providing an effective date.
20
21 Be It Enacted by the Legislature of the State of Florida:
22
23 Section 1. Subsections (2) and (3) of section 55.202,
24 Florida Statutes, are amended to read:
25 55.202 Judgments, orders, and decrees; lien on personal
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CS/HB 175 2024
26 property.—
27 (2) A judgment lien may be acquired on a judgment debtor's
28 interest in all personal property in this state subject to
29 execution under s. 56.061 and in all, including payment
30 intangibles and accounts of a judgment debtor whose location is
31 in this state as established by s. 679.3071, as those terms are
32 defined in s. 679.1021(1), and the proceeds thereof, but
33 excluding fixtures, money, negotiable instruments, and
34 mortgages. As used in this subsection, the terms "account,"
35 "payment intangible," and "proceeds" have the same meanings as
36 in s. 679.1021(1).
37 (a) For payment intangibles and accounts and the proceeds
38 thereof:
39 1. The rights of a judgment lienholder under this section
40 are subject to the rights under chapter 679 of a secured party,
41 as defined in s. 679.1021(1), who has a prior filed financing
42 statement encumbering such payment intangibles or accounts and
43 the proceeds thereof.
44 2. This section does not affect the obligation under s.
45 679.607(1) of an account debtor, as defined in s. 679.1021(1),
46 except as the rights and obligations under this paragraph are
47 otherwise adjudicated under applicable law in a legal proceeding
48 to which the secured party and account debtor are joined as
49 parties.
50 (b) A judgment lien is acquired by filing a judgment lien
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51 certificate in accordance with s. 55.203 with the Department of
52 State after the judgment has become final and if the time to
53 move for rehearing has lapsed, no motion for rehearing is
54 pending, and no stay of the judgment or its enforcement is then
55 in effect. A court may authorize, for cause shown, the filing of
56 a judgment lien certificate before a judgment has become final
57 when the court has authorized the issuance of a writ of
58 execution in the same matter. A judgment lien certificate not
59 filed in compliance with this subsection is permanently void and
60 of no effect but does not preclude the filing of a judgment lien
61 certificate that complies with this subsection.
62 (c) For any lien, warrant, assessment, or judgment
63 collected by the Department of Revenue, a judgment lien may be
64 acquired by filing the judgment lien certificate information or
65 warrant with the Department of State in accordance with
66 subsection (5).
67 (d) Except as provided in s. 55.208, the effective date of
68 a judgment lien is the date, including the time of day, of
69 filing. Although no lien attaches to property, and a creditor
70 does not become a lien creditor as to liens under chapter 679,
71 until the debtor acquires an interest in the property, priority
72 among competing judgment liens is determined in order of filing
73 date and time.
74 (e) Except as provided in s. 55.204(3), a judgment
75 creditor may file only one effective judgment lien certificate
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76 based upon a particular judgment.
77 (3) Except as otherwise provided in s. 55.208, the
78 priority of a judgment lien acquired in accordance with this
79 section or s. 55.204(3) is established at the date and time the
80 judgment lien certificate is filed. The priority of conflicting
81 rights between a judgment lienholder under this section and a
82 secured party, as defined in s. 679.1021(1)(ttt), must be
83 determined as provided under chapter 679.
84 Section 2. Subsection (1), paragraph (a) of subsection
85 (5), and subsection (7) of section 55.205, Florida Statutes, are
86 amended to read:
87 55.205 Effect of judgment lien.—
88 (1) A judgment creditor who has not acquired a judgment
89 lien as provided in s. 55.202 or whose lien has lapsed may
90 nevertheless proceed against the judgment debtor's property
91 through any appropriate judicial process, subject to the
92 priority of conflicting rights under chapter 679 of a secured
93 party, as defined in s. 679.1021(1)(ttt). Such judgment creditor
94 proceeding by writ of execution acquires a lien as of the time
95 of levy and only on the property levied upon.
96 (5)(a) If the judgment debtor's personal property, to the
97 extent not exempt from execution, includes a motor vehicle or a
98 vessel for which a Florida certificate of title has been issued,
99 a judgment lien acquired under this section on such property not
100 yet noted on the certificate of title is valid and enforceable
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101 against the judgment debtor. However, enforceability under this
102 chapter of such judgment lien against creditors or subsequent
103 purchasers is determined as provided under s. 319.27(2) , or s.
104 328.14, or chapter 679, as applicable.
105 (7) Notwithstanding the attachment of a judgment lien
106 acquired under s. 55.202 to payment intangibles or accounts and
107 the proceeds thereof, the account debtor may, absent receipt of
108 notice under s. 679.607(1)(a) from a secured party, discharge
109 the account debtor's obligation to pay payment intangibles or
110 accounts or the proceeds thereof by paying the judgment debtor
111 until, but not after, the account debtor is served by process
112 with a complaint or petition by the judgment creditor seeking
113 judicial relief with respect to the payment intangibles or
114 accounts. Thereafter, the account debtor may discharge the
115 account debtor's obligation to pay payment intangibles or
116 accounts or the proceeds thereof under this section only in
117 accordance with a settlement agreement, final order, or judgment
118 issued in such judicial process that complies with this section.
119 Section 3. Subsection (1) of section 55.208, Florida
120 Statutes, is amended to read:
121 55.208 Effect of prior liens on payment intangibles and
122 accounts; effect of filed judgment lien on writs of execution
123 previously delivered to a sheriff.—
124 (1) A judgment lien under s. 55.202 existing before
125 October 1, 2023, becomes enforceable and perfected as of October
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126 1, 2023, as to payment intangibles and accounts and the proceeds
127 thereof of a judgment debtor under s. 55.202(2). Any security
128 interest or lien on payment intangibles or accounts and the
129 proceeds thereof of a judgment debtor which is enforceable and
130 perfected before October 1, 2023, continues to have the same
131 rights and priority as existed before October 1, 2023, and m ay
132 not take priority over be primed as to payment intangibles or
133 accounts by a judgment lien certificate filed before October 1,
134 2023.
135 Section 4. This act shall take effect upon becoming a law.
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HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 311 Securities
SPONSOR(S): Insurance & Banking Subcommittee, Barnaby
TIED BILLS: IDEN./SIM. BILLS: CS/SB 532
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 17 Y, 0 N, As CS Fletcher Lloyd
2) Commerce Committee Fletcher Hamon
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 .
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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 securities
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
On January 11, 2024, the Insurance & Banking Subcommittee considered the bill, adopted one
amendment that conformed to the Senate bill, which is substantively identical to the bill, except it:
Made the proposed revisions to the Securities Guaranty Fund prospective to October 1, 2024; and
Provided clarification for the proposed revision to the exemption for transactions conducted through
alternative trading systems.
Since the amendment also changed the short title of the bill, it was temporarily postponed, pursuant to rule.
On January 18, 2024, the Insurance & Banking Subcommittee considered the bill, adopted one
amendment, and reported the bill favorably as a committee substitute. The amendment made technical
changes to the bill.
The analysis is drafted to the committee substitute as passed by the Insurance & Banking Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 311 2024
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 duties 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 offi ce 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) A no person may not shall directly or indirectly offer
357 or sell securities, other than general obligation bonds, under
358 this subsection if the issuer or guarantor is in default or has
359 been in default any time after December 31, 1975, as to
360 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) applies to a security that is an
369 industrial or commercial development bond if payments are made
370 or unconditionally guaranteed by a person whose securities are
371 exempt from registration under s. 18(b)(1) of the Secur ities Act
372 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 subchap ter 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 accoun ting
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. How ever, 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 issuanc e, 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 su ch
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 are met:
802 (a)1. The issuer of the security is actually engaged in
803 business and is not in the organizational stage or in bankruptcy
804 or receivership and is not a blank check, blind pool, or shell
805 company whose primary plan of business is to engage in a merger
806 or combination of the business with, or an acquisition of, an
807 unidentified person;
808 2. The security is sold at a price reasonably related to
809 the current market price of the security; and
810 3. The security does not constitute the whole or part of
811 an unsold allotment to, or a subscription or participation by,
812 the dealer as an underwriter of the security; and
813 (b)1. The security is listed in a nationally recognized
814 securities manual designated by rule of the commission or a
815 document filed with and publicly viewable through the Securities
816 and Exchange Commission electronic data gathering and retrieval
817 system and contains:
818 a. A description of the business and operations of the
819 issuer;
820 b. The names of the issuer's officers and directors, if
821 any, or, in the case of an issuer not domiciled in the United
822 States, the corporate equivalents of such persons in the
823 issuer's country of domicile;
824 c. An audited balance sheet of the issuer as of a date
825 within 18 months before such transaction or, in the case of a
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826 reorganization or merger in which parties to the reorganization
827 or merger had such audited balance sheet, a pro forma balance
828 sheet; and
829 d. An audited income statement for each of the issuer's
830 immediately preceding 2 fiscal years, or for the period of
831 existence of the issuer, if in existence for less than 2 years
832 or, in the case of a reorganization or merger in which the
833 parties to the reorganization or merger had such audited income
834 statement, a pro forma income statement; or
835 2.a. The issuer of the security has a class of equity
836 securities listed on a national securities exchange registered
837 under the Securities Exchange Act of 1934, as amended;
838 b. The class of security is quoted, offered, purchased, or
839 sold through an alternative trading system registered under
840 Securities and Exchange Commission Regulation ATS, 17 C.F.R. s.
841 242.301, as amended, and the issuer of the security has made
842 current information publicly available in accordance with
843 Securities and Exchange Commission Rule 15c2-11, 17 C.F.R. s.
844 240.15c2-11, as amended;
845 c. The issuer of the security is a unit investment trust
846 registered under the Investment Company Act of 1940, as amended;
847 d. The issuer of the security has been engaged in
848 continuous business, including predecessors, for at least 3
849 years; or
850 e. The issuer of the security has total assets of at least
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851 $2 million based on an audited balance sheet as of a date within
852 18 months before such transaction or, in the case of a
853 reorganization or merger in which parties to the reorganization
854 or merger had such audited balance sheet, a pro forma balance
855 sheet.
856 (19) The offer or sale of any security effected by or
857 through a person in compliance with s. 517.12(16).
858 (20) A nonissuer transaction in an outstanding security by
859 or through a dealer registered or exempt from registration under
860 this chapter, if all of the following are true:
861 (a) The issuer is a reporting issuer in a foreign
862 jurisdiction designated by this subsection or by commission
863 rule, and the issuer has been subject to continuous reporting
864 requirements in such foreign jurisdiction for not less than 180
865 days before the transaction.
866 (b) The security is listed on the securities exchange
867 designated by this subsection or by commission rule, is a
868 security of the same issuer which is of senior or substantially
869 equal rank to the listed security, or is a warrant or right to
870 purchase or subscribe to any such security.
871
872 For purposes of this subsection, Canada, together with its
873 provinces and territories, is designated as a foreign
874 jurisdiction, and The Toronto Stock Exchange, Inc., is
875 designated as a securities exchange. If, after an administrative
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876 hearing in compliance with ss. 120.569 and 120.57, the office
877 finds that revocation is necessary or appropriate in furtherance
878 of the public interest and for the protection of investors, it
879 may revoke the designation of a securities exchange under this
880 subsection.
881 (21) Other transactions exempted by commission rule upon a
882 finding by the office that the application of s. 517.07 to a
883 particular transaction is not necessary or appropriate in
884 furtherance of the public interest and for the protection of
885 investors due to the small dollar amount of the securities
886 involved or the limited character of the offering. In
887 conjunction with its adoption by rule of such exemptions, the
888 commission may exempt persons selling or offering for sale
889 securities in such a transaction from the registration
890 requirements of s. 517.12. A rule adopted by the commission
891 under this subsection may not have the effect of narrowing or
892 limiting any exemption specified in this section.
893 Section 4. Section 517.0611, Florida Statutes, is amended
894 to read:
895 517.0611 The Florida Limited Offering Exemption Intrastate
896 crowdfunding.—
897 (1) This section may be cited as the "Florida Limited
898 Offering Intrastate Crowdfunding Exemption."
899 (2) The registration provisions of s. 517.07 do not apply
900 to a securities transaction conducted in accordance with this
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901 section; however, such transaction is subject to s. 517.301
902 Notwithstanding any other provision of this chapter, an offer or
903 sale of a security by an issuer is an exempt transaction under
904 s. 517.061 if the offer or sale is conducted in accordance with
905 this section. The exemption provided in this section may not be
906 used in conjunction with any other exemption under s. 517.051 or
907 s. 517.061.
908 (3) The offer or sale of securities under this section
909 must be conducted in accordance with the requirements of the
910 federal exemption for intrastate offerings in s. 3(a)(11) of the
911 Securities Act of 1933, 15 U.S.C. s. 77c(a)(11), as amended, and
912 United States Securities and Exchange Commission Rule 147, 17
913 C.F.R. s. 230.147, as amended, or Securities and Exchange
914 Commission Rule 147A, 17. C.F.R. s. 230.147A, as amended adopted
915 pursuant to the Securities Act of 1933.
916 (4) An issuer must:
917 (a) Must be a for-profit business entity that maintains
918 formed under the laws of the state, be registered with the
919 Secretary of State, maintain its principal place of business in
920 the state, and derives derive its revenues primarily from
921 operations in this the state.
922 (b) Must conduct transactions for an the offering of $2.5
923 million or more through a dealer registered with the office or
924 an intermediary registered under s. 517.12 s. 517.12(19). For an
925 offering of less than $2.5 million, the issuer may, but is not
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926 required to, use such a dealer or intermediary.
927 (c) May not be, either before or as a result of the
928 offering, an investment company as defined in s. 3 of the
929 Investment Company Act of 1940, 15 U.S.C. s. 80a-3, as amended,
930 or subject to the reporting requirements of s. 13 or s. 15(d) of
931 the Securities Exchange Act of 1934, 15 U.S.C. s. 78m or s.
932 78o(d), as amended.
933 (d) May not be a business entity that has company with an
934 undefined business operation, a company that lacks a business
935 plan, a company that lacks a stated investment goal for the
936 funds being raised, or a company that plans to engage in a
937 merger or acquisition with an unspecified business entity.
938 (e) May not be subject to a disqualification established
939 by the commission or office or a disqualification described in
940 s. 517.0616 or s. 517.1611 or United States Securities and
941 Exchange Commission Rule 506(d), 17 C.F.R. 230.506(d), adopted
942 pursuant to the Securities Act of 1933. Each director, officer,
943 manager, managing member, or general partner, or person
944 occupying a similar status or performing a similar function, or
945 person holding more than 20 percent of the equity interest
946 shares of the issuer, is subject to this paragraph requirement.
947 (f) Must deposit all funds received from investors in an
948 account in Execute an escrow agreement with a federally insured
949 financial institution authorized to do business in this the
950 state, and maintain all such funds in the account until the
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951 target offering amount has been reached or the offering has been
952 terminated or has expired. If the target offering amount has not
953 been reached within the period specified by the issuer in the
954 disclosure statement provided to investors, or if the offering
955 is terminated or expires, the issuer must refund invested funds
956 to all investors within 10 business days after such occurrence
957 for the deposit of investor funds, and ensure that all offering
958 proceeds are provided to the issuer only when the aggregate
959 capital raised from all investors is equal to or greater than
960 the target offering amount.
961 (g) Must use all funds in accordance with the use of
962 proceeds as disclosed to prospective investors Allow investors
963 to cancel a commitment to invest within 3 business days before
964 the offering deadline, as stated in the disclosure statement,
965 and issue refunds to all investors if the target offering amount
966 is not reached by the offering deadline.
967 (5) The issuer must file a notice of the offering with the
968 office, in writing or in electronic form, in a format pres cribed
969 by commission rule, together with a nonrefundable filing fee of
970 $200. The filing fee must shall be deposited into the Regulatory
971 Trust Fund of the office. The commission may adopt rules
972 establishing procedures for the deposit of fees and the filing
973 of documents by electronic means if the procedures provide the
974 office with the information and data required by this section. A
975 notice is effective upon receipt, by the office, of the
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976 completed form, filing fee, and an irrevocable written consent
977 to service of civil process, similar to that provided for in s.
978 517.101. The notice may be terminated by filing with the office
979 a notice of termination. The notice and offering expire 12
980 months after filing the notice with the office and are not
981 eligible for renewal. The notice must:
982 (a) Be filed with the office at least 10 days before the
983 issuer commences an offering of securities or the offering is
984 displayed on a website of an intermediary in reliance upon the
985 exemption provided by this section.
986 (b) Indicate that the issuer is conducting an offering in
987 reliance upon the exemption provided by this section.
988 (c) Contain the name and contact information, including an
989 e-mail address, of the issuer.
990 (d) Identify any predecessors, owners, officers,
991 directors, general partners, managers, managing members, and
992 control persons or any person occupying a similar status or
993 performing a similar function of the issuer, including that
994 person's title, his or her status as a partner, trustee, or sole
995 proprietor or a similar role, and his or her ownership
996 percentage.
997 (e) Identify the federally insured financial institution
998 into, authorized to do business in the state, in which investor
999 funds will be deposited, in accordance with the escrow
1000 agreement.
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1001 (f) Require an attestation under oath that the issuer, its
1002 predecessors, affiliated issuers, directors, officers, and
1003 control persons, or any other person occupying a similar status
1004 or performing a similar function, are not currently and have not
1005 been within the past 10 years the subject of regulatory or
1006 criminal actions involving fraud or deceit.
1007 (g) Include documentation verifying that the issuer is
1008 organized under the laws of the state and authorized to do
1009 business in the state.
1010 (h) If applicable, include the intermediary's website
1011 address where the issuer's securities will be offered.
1012 (g)(i) State Include the target offering amount and the
1013 date, not to exceed 365 days, by which the target amount must be
1014 reached in order to avoid termination of the offering .
1015 (6) The issuer must amend the notice form within 10
1016 business 30 days after any material information contained in the
1017 notice becomes inaccurate for any reason. The commission may
1018 require, by rule, an issuer who has filed a notice under this
1019 section to file amendments with the office.
1020 (7) The issuer may engage in general advertising and
1021 general solicitation of the offering to prospective investors.
1022 Any oral or written statements in advertising or solicitation of
1023 the offering which contain a material misstatement, or w hich
1024 fail to disclose material information, are subject to
1025 enforcement under this chapter. Any general advertising or other
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1026 general announcement must state that the offering is limited and
1027 open only to residents of this state.
1028 (8) The issuer must provide a disclosure statement to
1029 investors and the dealer or intermediary, along with a copy to
1030 the office at the time that the notice is filed, and make
1031 available to potential investors through the dealer or
1032 intermediary, as applicable; to the office at the time that the
1033 notice is filed; and to each prospective investor at least 3
1034 days before the investor's commitment to purchase or payment of
1035 any consideration. The, a disclosure statement must contain
1036 containing material information about the issuer and the
1037 offering, including all of the following:
1038 (a) The name, legal status, physical address, e-mail
1039 address, and website address of the issuer.
1040 (b) The names of the directors, officers, managers,
1041 managing members, and general partners and any person occupying
1042 a similar status or performing a similar function, and the name
1043 and ownership percentage of each person holding more than 20
1044 percent of the issuer's equity interests shares of the issuer.
1045 (c) A description of the current business of the issuer
1046 and the anticipated business plan of the issuer.
1047 (d) A description of the stated purpose and intended use
1048 of the proceeds of the offering.
1049 (e) The target offering amount and, the deadline to reach
1050 the target offering amount, and regular updates regarding the
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1051 progress of the issuer in meeting the target offering amount .
1052 (f) The price to the public of the securities or the
1053 method for determining the price. However, before the sale, each
1054 investor must receive in writing the final price and all
1055 required disclosures and have an opportunity to rescind the
1056 commitment to purchase the securities.
1057 (g) A description of the ownership and capital structure
1058 of the issuer, including:
1059 1. Terms of the securities being offered and each class of
1060 security of the issuer, including how those terms may be
1061 modified, and a summary of the differences between such
1062 securities, including how the rights of the securities being
1063 offered may be materially limited, diluted, or qualified by
1064 rights of any other class of security of the issuer.
1065 2. A description of how the exercise of the rights held by
1066 the principal equity holders shareholders of the issuer could
1067 negatively impact the purchasers of the securities being
1068 offered.
1069 3. The name and ownership level of each existing
1070 shareholder who owns more than 20 percent of any class of the
1071 securities of the issuer.
1072 4. How the securities being offered are being valued, and
1073 examples of methods of how such securities may be valued by the
1074 issuer in the future, including during subsequent corporate
1075 actions.
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1076 5. The risks to purchasers of the securities relating to
1077 minority ownership in the issuer, the risks associated with
1078 corporate action, including additional issuances of shares, a
1079 sale of the issuer or of assets of the issuer, or transactions
1080 with related parties.
1081 (h) A statement that the security being offered is not
1082 registered under federal or state securities laws and that the
1083 securities are subject to the limitation on resale contained in
1084 Securities and Exchange Commission Rule 147 or Rule 147A.
1085 (i) Any issuer plans, formal or informal, to offer
1086 additional securities in the future.
1087 (j) The risks to purchasers of the securities relating to
1088 minority ownership in the issuer.
1089 (k)(h) A description of the financial condition of the
1090 issuer.
1091 1. For offerings that, in combination with all other
1092 offerings of the issuer within the preceding 12-month period,
1093 have target offering amounts of $500,000 $100,000 or less, the
1094 financial statements of the issuer may be, but are not required
1095 to be, included description must include the most recent income
1096 tax return filed by the issuer, if any, and a financial
1097 statement that must be certified by the principal executive
1098 officer of the issuer as true and complete in all material
1099 respects.
1100 2. For offerings that, in combination with all other
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1101 offerings of the issuer within the preceding 12-month period,
1102 have target offering amounts of more than $500,000 $100,000, but
1103 not more than $2.5 million $500,000, the description must
1104 include financial statements prepared in accordance with
1105 generally accepted accounting principles and reviewed by a
1106 certified public accountant, as defined in s. 473.302, who is
1107 independent of the issuer, using professional standards and
1108 procedures for such review or standards and procedures
1109 established by commission the office, by rule, for such purpose.
1110 3. For offerings that, in combination with all other
1111 offerings of the issuer within the preceding 12-month period,
1112 have target offering amounts of more than $2.5 million $500,000,
1113 the description must include audited financial statements
1114 prepared in accordance with generally accepted accounting
1115 principles by a certified public accountant, as defined in s.
1116 473.302, who is independent of the issuer, and other
1117 requirements as the commission may establish by rule.
1118 (l)(i) The following statement in boldface, conspicuous
1119 type on the front page of the disclosure statement:
1120
1121 Neither the Securities and Exchange Commission nor any
1122 state securities commission has approved or
1123 disapproved these securities or determined if this
1124 disclosure statement is truthful or complete. Any
1125 representation to the contrary is a criminal offense.
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1126
1127 These securities are offered under, and will be sold
1128 in reliance upon, an exemption from the registration
1129 requirements of federal and Florida securities laws.
1130 Consequently, Neither the Federal Government nor the
1131 State of Florida has reviewed the accuracy or
1132 completeness of any offering materials. In making an
1133 investment decision, investors must rely on their own
1134 examination of the issuer and the terms of the
1135 offering, including the merits and risks involved.
1136 These securities are subject to restrictions on
1137 transferability and resale and may not be transferred
1138 or resold except as specifically authorized by
1139 applicable federal and state securities laws.
1140 Investing in these securities involves a speculative
1141 risk, and investors should be able to bear the loss of
1142 their entire investment.
1143 (8) The issuer shall provide to the office a copy of the
1144 escrow agreement with a financial institution authorized to
1145 conduct business in this state. All investor funds must be
1146 deposited in the escrow account. The escrow agreement must
1147 require that all offering proceeds be released to the issuer
1148 only when the aggregate capital raised from all investors is
1149 equal to or greater than the minimum target offering amount
1150 specified in the disclosure statement as necessary to implement
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1151 the business plan, and that all investors will receive a full
1152 return of their investment commitment if that target offering
1153 amount is not raised by the date stated in the disclosure
1154 statement.
1155 (9) The sum of all cash and other consideration received
1156 for sales of a security under this section may not exceed $5 $1
1157 million, less the aggregate amount received for all sales of
1158 securities by the issuer within the 12 months preceding the
1159 first offer or sale made in reliance upon this exemption. Offers
1160 or sales to a person owning 20 percent or more of the
1161 outstanding equity interests shares of any class or classes of
1162 securities or to an officer, director, manager, managing member,
1163 general partner, or trustee, or a person occupying a similar
1164 status, do not count toward this limitation.
1165 (10) Unless the investor is an accredited investor , or the
1166 issuer reasonably believes that the investor is an accredited
1167 investor as defined by Rule 501 of Regulation D, adopted
1168 pursuant to the Securities Act of 1933, the aggregate amount of
1169 securities sold by an issuer to an investor in transactions
1170 exempt from registration requirements under this subsection in a
1171 12-month period may not exceed $10,000:
1172 (a) The greater of $2,000 or 5 percent of the annual
1173 income or net worth of such investor, if the annual income or
1174 the net worth of the investor is less than $100,000.
1175 (b) Ten percent of the annual income or net worth of such
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1176 investor, not to exceed a maximum aggregate amount sold of
1177 $100,000, if either the annual income or net worth of the
1178 investor is equal to or exceeds $100,000.
1179 (11) The issuer shall file with the office and provide to
1180 investors free of charge an annual report of the results of
1181 operations and financial statements of the issuer within 45 days
1182 after the end of its fiscal year, until no securities under this
1183 offering are outstanding. The annual reports must meet the
1184 following requirements:
1185 (a) Include an analysis by management of the issuer of the
1186 business operations and the financial condition of the issuer,
1187 and disclose the compensation received by each director,
1188 executive officer, and person having an ownership interest of 20
1189 percent or more of the issuer, including cash compensation
1190 earned since the previous report and on an annual basis, and any
1191 bonuses, stock options, other rights to receive securities of
1192 the issuer, or any affiliate of the issuer, or other
1193 compensation received.
1194 (b) Disclose any material change to information contained
1195 in the disclosure statements which was not disclosed in a
1196 previous report.
1197 (11)(12)(a) A notice-filing under this section must shall
1198 be summarily suspended by the office if:
1199 (a) The payment for the filing is dishonored by the
1200 financial institution upon which the funds are drawn. For
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1201 purposes of s. 120.60(6), failure to pay the required notice
1202 filing fee constitutes an immediate and serious danger to the
1203 public health, safety, and welfare. The office shall enter a
1204 final order revoking a notice-filing in which the payment for
1205 the filing is dishonored by the financial institution upon which
1206 the funds are drawn; or.
1207 (b) A notice-filing under this section shall be summarily
1208 suspended by the office if The issuer made a material false
1209 statement in the issuer's notice-filing. The summary suspension
1210 remains shall remain in effect until a final order is entered by
1211 the office. For purposes of s. 120.60(6), a material fal se
1212 statement made in the issuer's notice-filing constitutes an
1213 immediate and serious danger to the public health, safety, and
1214 welfare. If an issuer made a material false statement in the
1215 issuer's notice-filing, the office must shall enter a final
1216 order revoking the notice-filing, issue a fine as prescribed by
1217 s. 517.191(9) s. 517.221(3), and issue permanent bars under s.
1218 517.191(10) s. 517.221(4) to the issuer and all owners,
1219 officers, directors, general partners, and control persons, or
1220 any person occupying a similar status or performing a similar
1221 function of the issuer, including title; status as a partner,
1222 trustee, sole proprietor, or similar role; and ownership
1223 percentage.
1224 (12)(13) If the issuer employs the services of an
1225 intermediary, the An intermediary must:
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1226 (a) Take measures, as established by commission rule, to
1227 reduce the risk of fraud with respect to the transactions,
1228 including verifying that the issuer is in compliance with the
1229 requirements of this section and, if necessary, denying an
1230 issuer access to its platform if the intermediary believes it is
1231 unable to adequately assess the risk of fraud of the issuer or
1232 its potential offering.
1233 (b) Provide basic information on its website regarding the
1234 high risk of investment in and limitation on the resale of
1235 exempt securities and the potential for loss of an entire
1236 investment. The basic information must include, but need not be
1237 limited to, all of the following:
1238 1. A description of the financial institution into which
1239 investor funds will be deposited escrow agreement that the
1240 issuer has executed and the conditions for the use release of
1241 such funds by to the issuer in accordance with the agreement and
1242 subsection (4).
1243 2. A description of whether financial information provided
1244 by the issuer has been audited by an independent certified
1245 public accountant, as defined in s. 473.302.
1246 (c) Obtain from each prospective investor a zip code or
1247 residence address, a copy of a driver license, and any other
1248 proof of residency in order for the issuer or intermediary to
1249 reasonably believe that the potential investor is a resident of
1250 this state. The commission may adopt rules authorizing
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1251 additional forms of identification and prescribing the process
1252 for verifying any identification presented by the prospective
1253 investor.
1254 (d) Obtain information sufficient for the issuer or
1255 intermediary to reasonably believe that a particular prospective
1256 investor is an accredited investor
1257 (c) Obtain a zip code or residence address from each
1258 potential investor who seeks to view information regarding
1259 specific investment opportunities, in order to confirm that the
1260 potential investor is a resident of the state.
1261 (d) Obtain and verify a valid Florida driver license
1262 number or Florida identification card number from each investor
1263 before purchase of a security to confirm that the investor is a
1264 resident of the state. The commission may adopt rules
1265 authorizing additional forms of identification and prescribing
1266 the process for verifying any identification presented by the
1267 investor.
1268 (e) Obtain an affidavit from each investor stating that
1269 the investment being made by the investor is consistent with the
1270 income requirements of subsection (10).
1271 (f) Direct the release of investor funds in escrow in
1272 accordance with subsection (4).
1273 (g) Direct investors to transmit funds directly to the
1274 financial institution designated in the escrow agreement to hold
1275 the funds for the benefit of the investor.
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1276 (e)(h) Provide a monthly update for each offering, after
1277 the first full month after the date of the offering. The update
1278 must be accessible on the intermediary's website and must
1279 display the date and amount of each sale of securities, and each
1280 cancellation of commitment to invest, in the previous calendar
1281 month.
1282 (i) Require each investor to certify in writing, including
1283 as part of such certification his or her signature and his or
1284 her initials next to each paragraph of the certification, as
1285 follows:
1286 I understand and acknowledge that:
1287 I am investing in a high-risk, speculative business
1288 venture. I may lose all of my investment, and I can afford the
1289 loss of my investment.
1290 This offering has not been reviewed or approved by any
1291 state or federal securities commission or other regulatory
1292 authority and no regulatory authority has confirmed the accuracy
1293 or determined the adequacy of any disclosure made to me relating
1294 to this offering.
1295 The securities I am acquiring in this offering are illiquid
1296 and are subject to possible dilution. There is no ready market
1297 for the sale of the securities. It may be difficult or
1298 impossible for me to sell or otherwise dispose of the
1299 securities, and I may be required to hold the securities
1300 indefinitely.
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1301 I may be subject to tax on my share of the taxable income
1302 and losses of the issuer, whether or not I have sold or
1303 otherwise disposed of my investment or received any dividends or
1304 other distributions from the issuer.
1305 By entering into this transaction with the issuer, I am
1306 affirmatively representing myself as being a Florida resident at
1307 the time this contract is formed, and if this representa tion is
1308 subsequently shown to be false, the contract is void.
1309 If I resell any of the securities I am acquiring in this
1310 offering to a person that is not a Florida resident within 9
1311 months after the closing of the offering, my contract with the
1312 issuer for the purchase of these securities is void.
1313 (j) Require each investor to answer questions
1314 demonstrating an understanding of the level of risk generally
1315 applicable to investments in startups, emerging businesses, and
1316 small issuers, and an understanding of the risk of illiquidity.
1317 (f)(k) Take reasonable steps to protect personal
1318 information collected from investors, as required by s. 501.171.
1319 (g)(l) Prohibit its directors, and officers, managers,
1320 managing members, general partners, employees, and agents from
1321 having any financial interest in the issuer using its services.
1322 (m) Implement written policies and procedures that are
1323 reasonably designed to achieve compliance with federal and state
1324 securities laws; comply with the anti-money laundering
1325 requirements of 31 C.F.R. chapter X applicable to registered
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1326 brokers; and comply with the privacy requirements of 17 C.F.R.
1327 part 248 relating to brokers.
1328 (13)(14) An intermediary not registered as a dealer under
1329 s. 517.12(5) may not:
1330 (a) Offer investment advice or recommendations. A refusal
1331 by an intermediary to post an offering that it deems not
1332 credible or that represents a potential for fraud may not be
1333 construed as an offer of investment advice or recommendation.
1334 (b) Solicit purchases, sales, or offers to buy securities
1335 offered or displayed on its website.
1336 (c) Compensate employees, agents, or other persons for the
1337 solicitation of, or based on the sale of, securities offered or
1338 displayed on its website.
1339 (d) Hold, manage, possess, or otherwise handle investo r
1340 funds or securities.
1341 (e) Compensate promoters, finders, or lead generators for
1342 providing the intermediary with the personal identifying
1343 information of any prospective potential investor.
1344 (f) Engage in any other activities set forth by commission
1345 rule.
1346 (14) If the issuer does not employ a dealer or an
1347 intermediary for an offering pursuant to the exemption created
1348 under this section, the issuer must fulfill each of the
1349 obligations specified in paragraphs (12)(c)-(f).
1350 (15) Any sale made pursuant to the exemption created under
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1351 this section is voidable by the purchaser within 3 days after
1352 the first tender of consideration is made by such purchaser to
1353 the issuer by notifying the issuer that the purchaser expressly
1354 voids the purchase. The purchaser's notice to the issuer must be
1355 sent by e-mail to the issuer's e-mail address set forth in the
1356 disclosure statement that is provided to the purchaser or
1357 purchaser's representative or by certified mail or overnight
1358 delivery service with proof of delivery to the mailing address
1359 set forth in the disclosure statement All funds received from
1360 investors must be directed to the financial institution
1361 designated in the escrow agreement to hold the funds and must be
1362 used in accordance with representations made to investors by the
1363 intermediary. If an investor cancels a commitment to invest, the
1364 intermediary must direct the financial institution designated to
1365 hold the funds to promptly refund the funds of the investor.
1366 Section 5. Section 517.0612, Florida Statutes, is created
1367 to read:
1368 517.0612 Florida Invest Local Exemption.—
1369 (1) This section may be cited as the "Florida Invest Local
1370 Exemption."
1371 (2) The registration provisions of s. 517.07 do not apply
1372 to a securities transaction conducted in accordance with this
1373 section; however, such transaction is subject to s. 517.301.
1374 (3) The offer or sale of securities under this section
1375 must meet the requirements of the federal exemption for
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1376 intrastate offerings in s. 3(a)(11) of the Securities Act of
1377 1933, Securities and Exchange Commission Rule 147, or Securities
1378 and Exchange Commission Rule 147A, as amended.
1379 (4) The issuer must be a for-profit business entity
1380 registered with the Department of State which has its principal
1381 place of business in this state. The issuer may not be, before
1382 or as a result of the offering:
1383 (a) An investment company as defined in the Investment
1384 Company Act of 1940, as amended;
1385 (b) Subject to the reporting requirements of the
1386 Securities and Exchange Act of 1934, as amended;
1387 (c) A business entity that has an undefined business
1388 operation, lacks a business plan, lacks a stated investment goal
1389 for the funds being raised, or plans to engage in a merger or
1390 acquisition with an unspecified business entity; or
1391 (d) Subject to a disqualification as provided in s.
1392 517.0616.
1393 (5) The sum of all cash and other consideration received
1394 from all sales of the securities in reliance upon the exemption
1395 under this section may not exceed $500,000, less the aggregate
1396 amount received for all sales of securities by the issuer within
1397 the 12 months before the first offer or sale made in reliance on
1398 this exemption.
1399 (6)(a) The issuer may not accept more than $10,000 from
1400 any single purchaser unless any of the following apply:
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1401 1. The issuer reasonably believes that the purchaser is an
1402 accredited investor.
1403 2. The purchaser is an officer, director, partner, or
1404 trustee, or an individual occupying a similar status or
1405 performing similar functions, of the issuer.
1406 3. The purchaser is an owner of 10 percent or more of the
1407 issuer's outstanding equity.
1408 (b) For purposes of this subsection, the following persons
1409 must be treated collectively as a single purchaser:
1410 1. Any spouse or child of the purchaser or any related
1411 family member who has the same primary residence as the
1412 purchaser.
1413 2. Any business entity of which the purchaser and any
1414 person related to the purchaser as provided in subparagraph 1.
1415 collectively own more than 50 percent of the equity interest.
1416 (7) The issuer may engage in general advertising and
1417 general solicitation of the offering. Any general advertising or
1418 other general announcement must state that the offer is limited
1419 and open only to residents of this state. Any oral or written
1420 statements in advertising or solicitation of the offer which
1421 contain a material misstatement, or which fail to disclose
1422 material information, are subject to enforcement under this
1423 chapter.
1424 (8) A purchaser must receive, at least 3 business days
1425 before any binding commitment to purchase or consideration paid,
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1426 a disclosure statement that provides material information
1427 regarding the issuer, including, but not limited to, all of the
1428 following information:
1429 (a) The issuer's name, type of entity, and contact
1430 information.
1431 (b) The name and contact information of each director,
1432 officer, or other manager of the issuer.
1433 (c) A description of the issuer's business.
1434 (d) A description of the security being offered.
1435 (e) The total amount of the offering.
1436 (f) The intended use of proceeds from the sale of the
1437 securities.
1438 (g) The target offering amount.
1439 (h) A statement that if the target offering amount is not
1440 obtained in cash or in the value of other tangible consideration
1441 received on a date that is no more than 180 days after the
1442 commencement of the offering, the offering will be terminated,
1443 and any funds or other consideration received from purchasers
1444 must be promptly returned.
1445 (i) A statement that the security being offered is not
1446 registered under federal or state securities laws and that the
1447 securities are subject to the limitation on resale contained in
1448 Securities and Exchange Commission Rule 147 or Rule 147A.
1449 (j) The names and addresses of all persons who will be
1450 involved in the offer and sale of securities on behalf of the
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1451 issuer.
1452 (k) The name of the bank or other depository institution
1453 into which investor funds will be deposited.
1454 (l) The following statement in boldface, conspicuous type:
1455
1456 Neither the Securities and Exchange Commission nor any
1457 state securities commission has approved or
1458 disapproved these securities or determined that this
1459 disclosure statement is truthful or complete. Any
1460 representation to the contrary is a criminal offense.
1461
1462 (9) All funds received from investors must be deposited
1463 into a bank or depository institution authorized to do business
1464 in this state. The issuer may not withdraw any amount of the
1465 offering proceeds unless the target offering amount has been
1466 received.
1467 (10) The issuer must file a notice of the offering with
1468 the office, in writing or in electronic form, in a format
1469 prescribed by commission rule, no less than 5 business days
1470 before the offering commences, along with the disclosure
1471 statement described in subsection (8). If there are any material
1472 changes to the information previously submitted, the issuer,
1473 within 3 business days after such material change, must file an
1474 amended notice.
1475 (11) An individual, entity, or entity employee who acts as
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1476 an agent for the issuer in the offer or sale of securities and
1477 is not registered as a dealer under this chapter ma y not do
1478 either of the following:
1479 (a) Receive compensation based upon the solicitation of
1480 purchases, sales, or offers to purchase the securities.
1481 (b) Take custody of investor funds or securities.
1482 (12) Any sale made pursuant to the exemption created u nder
1483 this section is voidable by the purchaser within 3 days after
1484 the first tender of consideration is made by such purchaser to
1485 the issuer by notifying the issuer that the purchaser expressly
1486 voids the purchase. The purchaser's notice to the issuer must be
1487 sent by e-mail to the issuer's e-mail address set forth in the
1488 disclosure statement that is provided to a purchaser or the
1489 purchaser's representative or by hand delivery, courier service,
1490 or other method by which written proof of delivery to the issuer
1491 of the purchaser's election to rescind the purchase is
1492 evidenced.
1493 Section 6. Section 517.0613, Florida Statutes, is created
1494 to read:
1495 517.0613 Failure to comply with a securities registration
1496 exemption.—
1497 (1) Failure to meet the requirements for any exemption
1498 from securities registration does not preclude the issuer from
1499 claiming the availability of any other applicable state or
1500 federal exemption.
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1501 (2) The exemptions created under ss. 517.061, 517.0611,
1502 and 517.0612 are not available to an issuer for any transaction
1503 or series of transactions that, although in technical compliance
1504 with the applicable provisions, is part of a plan or scheme to
1505 evade the registration provisions of s. 517.07, and registration
1506 under s. 517.07 is required in connection with such
1507 transactions.
1508 Section 7. Section 517.0614, Florida Statutes, is created
1509 to read:
1510 517.0614 Integration of offerings.—
1511 (1) If the safe harbors in subsection (2) do not apply, in
1512 determining whether two or more offerings are to be treated as
1513 one for the purpose of registration or qualifying for an
1514 exemption from registration under this chapter, offers and sales
1515 may not be integrated if, based on the particular facts and
1516 circumstances, the issuer can establish either that each
1517 offering complies with the registration requirements of this
1518 chapter, or that an exemption from registration is available for
1519 the particular offering, provided that any transaction or series
1520 of transactions that, although in technical compliance with this
1521 chapter, is part of a plan or scheme to evade the registration
1522 requirements of this chapter will not have the effect of
1523 avoiding integration. In making this determination:
1524 (a) For an exempt offering prohibiting general
1525 solicitation, the issuer must have a reasonable belief, based on
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1526 the facts and circumstances, with respect to each purchaser in
1527 the exempt offering prohibiting general solicitation, that the
1528 issuer or any person acting on the issuer's behalf:
1529 1. Did not solicit such purchaser through the use of
1530 general solicitation; or
1531 2. Established a substantive relationship with such
1532 purchaser before the commencement of the exempt offering
1533 prohibiting general solicitation, provided that a purchaser
1534 previously solicited through the use of general solicitation is
1535 not deemed to have been solicited through the use of general
1536 solicitation in the current offering if, during the 45 calendar
1537 days following such previous general solicitation:
1538 a. No offer or sale of the same or similar class of
1539 securities has been made by or on behalf of the issuer,
1540 including to such purchaser; and
1541 b. The issuer or any person acting on the issuer's behalf
1542 has not solicited such purchaser through the use of general
1543 solicitation for any other security.
1544 (b) For two or more concurrent exempt offerings permitting
1545 general solicitation, in addition to satisfying the requirements
1546 of the particular exemption relied on, general solicitation
1547 offering materials for one offering that includes information
1548 about the material terms of a concurrent offering und er another
1549 exemption may constitute an offer of securities in such other
1550 offering, and therefore the offer must comply with all the
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1551 requirements for, and restrictions on, offers under the
1552 exemption being relied on for such other offering, including any
1553 legend requirements and communications restrictions.
1554 (2) The integration analysis required by subsection (1) is
1555 not required if any of the following nonexclusive safe harbors
1556 apply:
1557 (a) An offering commenced more than 30 calendar days
1558 before the commencement of any other offering, or more than 30
1559 calendar days after the termination or completion of any other
1560 offering, may not be integrated with such other offering,
1561 provided that for an exempt offering for which general
1562 solicitation is not permitted which follows by 30 calendar days
1563 or more an offering that allows general solicitation, paragraph
1564 (1)(a) applies.
1565 (b) Offers and sales made in compliance with any of the
1566 following provisions are not subject to integration with other
1567 offerings:
1568 1. Section 517.051 or s. 517.061, except s. 517.061(9),
1569 (10), or (11).
1570 2. Section 517.0611 or s. 517.0612.
1571 Section 8. Section 517.0615, Florida Statutes, is created
1572 to read:
1573 517.0615 Solicitations of interest.—
1574 (1) A communication may not be deemed to constitute
1575 general solicitation or general advertising if the communication
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1576 is made in connection with a seminar or meeting in which more
1577 than one issuer participates and which is sponsored by a
1578 college, a university, or another institution of higher
1579 education; a state or local government or an instrumentality
1580 thereof; a nonprofit chamber of commerce or other nonprofit
1581 organization; or an angel investor group, incubator, or
1582 accelerator, if all of the following apply:
1583 (a) Advertising for the seminar or meeting does not
1584 reference a specific offering of securities by the issuer.
1585 (b) The sponsor of the seminar or meeting does not do any
1586 of the following:
1587 1. Make investment recommendations or provide investment
1588 advice to attendees of the seminar or meeting.
1589 2. Engage in any investment negotiations between the
1590 issuer and investors attending the seminar or meeting.
1591 3. Charge attendees of the seminar or meeting any fees,
1592 other than reasonable administrative fees.
1593 4. Receive any compensation for making introductions
1594 between seminar or meeting attendees and issuers or for
1595 investment negotiations between such parties.
1596 5. Receive any compensation with respect to the seminar or
1597 meeting, which compensation would require registration or
1598 notice-filing under this chapter, the Securities Exchange Act of
1599 1934, 15 U.S.C. ss. 78a et seq., as amended, or the Investment
1600 Advisers Act of 1940, 15 U.S.C. s. 80b-1 et seq., as amended.
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1601 The sponsorship of or participation in the seminar or meeting
1602 does not by itself require registration or notice-filing under
1603 this chapter.
1604 (c) The type of information regarding an offering of
1605 securities by the issuer which is communicated or distributed by
1606 or on behalf of the issuer in connection with the seminar or
1607 meeting is limited to a notification that the issuer is in the
1608 process of offering or planning to offer securities, the type
1609 and amount of securities being offered, the intended use of
1610 proceeds of the offering, and the unsubscribed amount in an
1611 offering.
1612 (d) If the event allows attendees to participate
1613 virtually, rather than in person, online participation in the
1614 event is limited to:
1615 1. Individuals that are members of, or otherwise
1616 associated with, the sponsor organization;
1617 2. Individuals that the sponsor reasonably believes are
1618 accredited investors; or
1619 3. Individuals that have been invited to the event by the
1620 sponsor based on industry or investment-related experience
1621 reasonably selected by the sponsor in good faith and disclosed
1622 in the public communications about the event.
1623 (2) Before any offers or sales are made in connection with
1624 an offering, communications by an issuer or any person
1625 authorized to act on behalf of the issuer are not deemed to
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1626 constitute general solicitation or general advertising if the
1627 communication is solely for the purpose of determining whether
1628 there is any interest in a contemplated securities offering.
1629 Requirements imposed under this chapter on written or oral
1630 statements made in the course of such communication may be
1631 enforced as provided in this chapter. The solicitation or
1632 acceptance of money or other consideration or of any commitment,
1633 binding or otherwise, from any person is prohibited.
1634 (a) The communication must state all of the following:
1635 1. Money or other consideration is not being solicited
1636 and, if sent in response, will not be accepted.
1637 2. Any offer to buy the securities will not be accepted,
1638 and no part of the purchase price will be accepted.
1639 3. A person's indication of interest does not involve
1640 obligation or commitment of any kind.
1641 (b) Any written communication under this subsection may
1642 include a means by which a person may indicate to the issuer
1643 that the person is interested in a potential offering. The
1644 issuer may require the name, address, telephone number, or e -
1645 mail address in any response form included in the written
1646 communication under this paragraph.
1647 (c) A communication in accordance with this subsection is
1648 not subject to s. 501.059, regarding telephone solicitations.
1649 Section 9. Section 517.0616, Florida Statutes, is crea ted
1650 to read:
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1651 517.0616 Disqualification.—A registration exemption under
1652 s. 517.061(9), (10), or (11); s. 517.0611; or s. 517.0612 is not
1653 available to an issuer that would be disqualified under
1654 Securities and Exchange Commission Rule 506(d), 17 C.F.R. s.
1655 230.506(d), as amended, at the time the issuer makes an offer
1656 for the sale of a security.
1657 Section 10. Present subsections (4) through (8) of section
1658 517.081, Florida Statutes, are redesignated as subsections (6)
1659 through (10), respectively, new subsections (4) and (5) are
1660 added to that section, and subsection (2), paragraph (g) of
1661 subsection (3), and present subsection (7) of that section are
1662 amended, to read:
1663 517.081 Registration procedure.—
1664 (2) The office shall receive and act upon applicat ions for
1665 the registration of to have securities registered, and the
1666 commission may prescribe forms on which it may require such
1667 applications to be submitted. Applications must shall be duly
1668 signed by the applicant, sworn to by any person having knowledge
1669 of the facts, and filed with the office. The commission may
1670 establish, by rule, procedures for depositing fees and filing
1671 documents by electronic means provided such procedures provide
1672 the office with the information and data required by this
1673 section. An application may be made either by the issuer of the
1674 securities for which registration is applied or by any
1675 registered dealer desiring to sell such securities the same
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1676 within the state.
1677 (3) The office may require the applicant to submit to the
1678 office the following information concerning the issuer and such
1679 other relevant information as the office may in its judgment
1680 deem necessary to enable it to ascertain whether such securities
1681 shall be registered pursuant to the provisions of this section:
1682 (g)1. A specimen copy of the securities certificate, if
1683 applicable, and a copy of any circular, prospectus,
1684 advertisement, or other description of such securities.
1685 2. The commission shall adopt a form for a simplified
1686 offering circular to register, under this section, securities
1687 that are sold in offerings in which the aggregate offering price
1688 in any consecutive 12-month period does not exceed the amount
1689 provided in s. 3(b) of the Securities Act of 1933, as amended.
1690 The following issuers shall not be eligible to submit a
1691 simplified offering circular adopted pursuant to this
1692 subparagraph:
1693 a. An issuer seeking to register securities for resale by
1694 persons other than the issuer.
1695 b. An issuer that is subject to any of the
1696 disqualifications described in 17 C.F.R. s. 230.262, adopted
1697 pursuant to the Securities Act of 1933, as amended, or that has
1698 been or is engaged or is about to engage in an activity that
1699 would be grounds for denial, revocation, or suspension under s.
1700 517.111. For purposes of this subparagraph, an issuer i ncludes
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1701 an issuer's director, officer, general partner, manager or
1702 managing member, trustee, or equity owner who owns at least 10
1703 percent of the ownership interests of the issuer, promoter, or
1704 selling agent of the securities to be offered or any officer,
1705 director, partner, or manager or managing member of such selling
1706 agent.
1707 c. An issuer that is a development-stage company that
1708 either has no specific business plan or purpose or has indicated
1709 that its business plan is to merge with an unidentified company
1710 or companies.
1711 d. An issuer of offerings in which the specific business
1712 or properties cannot be described.
1713 e. Any issuer the office determines is ineligible because
1714 the form does not provide full and fair disclosure of material
1715 information for the type of offering to be registered by the
1716 issuer.
1717 f. Any issuer that has failed to provide the office the
1718 reports required for a previous offering registered pursuant to
1719 this subparagraph.
1720
1721 As a condition precedent to qualifying for use of the simplified
1722 offering circular, an issuer shall agree to provide the office
1723 with an annual financial report containing a balance sheet as of
1724 the end of the issuer's fiscal year and a statement of income
1725 for such year, prepared in accordance with United States
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1726 generally accepted accounting principles and accompanied by an
1727 independent accountant's report. If the issuer has more than 100
1728 security holders at the end of a fiscal year, the financial
1729 statements must be audited. Annual financial reports must be
1730 filed with the office within 90 days after the close of the
1731 issuer's fiscal year for each of the first 5 years following the
1732 effective date of the registration.
1733 (4) The commission may, by rule:
1734 (a) Establish criteria relating to the issuance of equity
1735 securities, debt securities, insurance company securities, real
1736 estate investment trusts, oil and gas investments, and other
1737 investments. In establishing these criteria, the commission may
1738 consider the rules and regulations of the Securities and
1739 Exchange Commission and statements of policy by the North
1740 American Securities Administrators Association, Inc., relating
1741 to the registration of securities offerings. The criteria must
1742 include all of the following:
1743 1. The promoter's equity investment ratio.
1744 2. The financial condition of the issuer.
1745 3. The voting rights of shareholders.
1746 4. The grant of options or warrants to underwriters and
1747 others.
1748 5. Loans and other transactions with affiliates of the
1749 issuer.
1750 6. The use, escrow, or refund of proceeds of the offering.
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1751 (b) Prescribe forms requiring applications for the
1752 registration of securities to be submitted to the office,
1753 including a simplified offering circular to register, under this
1754 section, securities that are sold in offerings in which the
1755 aggregate offering price in any consecutive 12-month period does
1756 not exceed the amount provided in s. 3(b) of the Securities Act
1757 of 1933, as amended.
1758 (c) Establish procedures for depositing fees and filing
1759 documents by electronic means, provided that such procedures
1760 provide the office with the information and data required by
1761 this section.
1762 (d) Establish requirements and standards for the filing,
1763 content, and circulation of a preliminary, final, or amended
1764 prospectus, advertisements, and other sales literature. In
1765 establishing such requirements and standards, the commission
1766 shall consider the rules and regulations of the Securities and
1767 Exchange Commission relating to requirements for preliminary,
1768 final, or amended or supplemented prospectuses and the rules of
1769 the Financial Industry Regulatory Authority relating to
1770 advertisements and sales literature.
1771 (5) All of the following issuers are not eligible to
1772 submit a simplified offering circular:
1773 (a) An issuer that is subject to any of the
1774 disqualifications described in Securities and Exchange
1775 Commission Rule 262, 17 C.F.R. s. 230.262, as amended, or that
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1776 has been or is engaged or is about to engage in an activity that
1777 would be grounds for denial, revocation, or suspension under s.
1778 517.111. For purposes of this paragraph, an issuer incl udes an
1779 issuer's director, officer, general partner, manager or managing
1780 member, trustee, or a person owning at least 10 percent of the
1781 ownership interests of the issuer; a promoter or selling agent
1782 of the securities to be offered; or any officer, director,
1783 partner, or manager or managing member of such selling agent.
1784 (b) An issuer that is a development-stage company that
1785 either has no specific business plan or purpose or has indicated
1786 that its business plan is to merge with an unidentified business
1787 entity or entities.
1788 (c) An issuer of offerings in which the specific business
1789 or properties cannot be described.
1790 (d) An issuer that the office determines is ineligible
1791 because the simplified circular does not provide full and fair
1792 disclosure of material information for the type of offering to
1793 be registered by the issuer.
1794 (9)(a)(7) The office shall record the registration of a
1795 security in the register of securities if, upon examination of
1796 an any application, it finds that all of the following
1797 requirements are met: the office
1798 1. The application is complete.
1799 2. The fee imposed in subsection (8) has been paid.
1800 3. The sale of the security would not be fraudulent and
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1801 would not work or tend to work a fraud upon the purchaser.
1802 4. The terms of the sale of such securities would be fair,
1803 just, and equitable.
1804 5. The enterprise or business of the issuer is not based
1805 upon unsound business principles.
1806 (b) Upon registration, the security may be sold by the
1807 issuer or any registered dealer, subject, however, to the
1808 further order of the office shall find that the sale of the
1809 security referred to therein would not be fraudulent and would
1810 not work or tend to work a fraud upon the purchaser, that the
1811 terms of the sale of such securities would be fair, jus t, and
1812 equitable, and that the enterprise or business of the issuer is
1813 not based upon unsound business principles, it shall record the
1814 registration of such security in the register of securities; and
1815 thereupon such security so registered may be sold by any
1816 registered dealer, subject, however, to the further order of the
1817 office. In order to determine if an offering is fair, just, and
1818 equitable, the commission may by rule establish requirements and
1819 standards for the filing, content, and circulation of any
1820 preliminary, final, or amended prospectus and other sales
1821 literature and may by rule establish merit qualification
1822 criteria relating to the issuance of equity securities, debt
1823 securities, insurance company securities, real estate investment
1824 trusts, and other traditional and nontraditional investments,
1825 including, but not limited to, oil and gas investments. The
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1826 criteria may include such elements as the promoter's equity
1827 investment ratio, the financial condition of the issuer, the
1828 voting rights of shareholders, the grant of options or warrants
1829 to underwriters and others, loans and other affiliated
1830 transaction, the use or refund of proceeds of the offering, and
1831 such other relevant criteria as the office in its judgment may
1832 deem necessary to such determination.
1833 Section 11. Subsection (2) of section 517.101, Florida
1834 Statutes, is amended to read:
1835 517.101 Consent to service.—
1836 (2) Any such action must shall be brought either in the
1837 county of the plaintiff's residence or in the county in which
1838 the office has its official headquarters. The written consent
1839 must shall be authenticated by the seal of the said issuer, if
1840 it has a seal, and by the acknowledged signature of a director,
1841 manager, managing member, general partner, trustee, or officer
1842 of the issuer member of the copartnership or company, or by the
1843 acknowledged signature of any officer of the incorporated or
1844 unincorporated association, if it be an incorporated or
1845 unincorporated association, duly authorized by resolution of the
1846 board of directors, trustees, or managers of the corporation or
1847 association, and must shall in such case be accompanied by a
1848 duly certified copy of the resolution of the issuer's board of
1849 directors, trustees, managers, managing members, or general
1850 partners or managers of the corporation or association,
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1851 authorizing the signer to execute the consent officers to
1852 execute the same. In case any process or pleadings mentioned in
1853 this chapter are served upon the office, service must it shall
1854 be by duplicate copies, one of which must shall be filed in the
1855 office and the other another immediately forwarded by the office
1856 by registered mail to the principal office of the issuer against
1857 which the said process or pleadings are directed.
1858 Section 12. Section 517.131, Florida Statutes, is amended
1859 to read:
1860 517.131 Securities Guaranty Fund.—
1861 (1) As used in this section, the term "final judgment"
1862 includes an arbitration award confirmed by a court of competent
1863 jurisdiction.
1864 (2)(a) The Chief Financial Officer shall establish a
1865 Securities Guaranty Fund to provide monetary relief to victims
1866 of securities violations under this chapter who are entitled to
1867 monetary damages or restitution and cannot recover the full
1868 amount of such monetary damages or restitution from the
1869 wrongdoer. An amount not exceeding 20 percent of all revenues
1870 received as assessment fees pursuant to s. 517.12(9) and (10)
1871 for dealers and investment advisers or s. 517.1201 for federal
1872 covered advisers and an amount not exceeding 10 percent of all
1873 revenues received as assessment fees pursuant to s. 517.12(9)
1874 and (10) for associated persons must shall be part of the
1875 regular registration license fee and must shall be transferred
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1876 to or deposited in the Securities Guaranty Fund.
1877 (b) If the balance in the Securities Guaranty Fund at any
1878 time exceeds $1.5 million, transfer of assessment fees to the
1879 this fund must shall be discontinued at the end of that
1880 registration license year, and transfer of such assessment fees
1881 may shall not resume be resumed unless the fund balance is
1882 reduced below $1 million by disbursement made in accordance with
1883 s. 517.141.
1884 (2) The Securities Guaranty Fund shall be disbursed as
1885 provided in s. 517.141 to a person who is adjudged by a court of
1886 competent jurisdiction to have suffered monetary damages as a
1887 result of any of the following acts committed by a dealer,
1888 investment adviser, or associated person who was licensed under
1889 this chapter at the time the act was committed:
1890 (a) A violation of s. 517.07.
1891 (b) A violation of s. 517.301.
1892 (3) A Any person is eligible for payment to seek recovery
1893 from the Securities Guaranty Fund if:
1894 (a) The act for which recovery is sought occurred on or
1895 after October 1, 2024, and the person:
1896 1. Holds an unsatisfied final judgment in which a
1897 wrongdoer was found to have violated s. 517.07 or s. 517.301;
1898 2. Has applied any amount recovered from the judgment
1899 debtor or any other source to the damages awarded by the court
1900 or arbitrator; and
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1901 3. Is a natural person who was a resident of this state,
1902 or is a business entity that was domiciled in this state, at the
1903 time of the violation of s. 517.07 or s. 517.301; or
1904 (b) The person is a receiver appointed pursuant to s.
1905 517.191(2) by a court of competent jurisdiction for a wrongdoer
1906 ordered to pay restitution under s. 517.191(3) as a result of a
1907 violation of s. 517.07 or s. 517.301 which has requested payment
1908 from the Securities Guaranty Fund on behalf of a person eligible
1909 for payment under paragraph (a)
1910 (a) Such person has received final judgment in a court of
1911 competent jurisdiction in any action wherein the cause of action
1912 was based on a violation of those sections referred to in
1913 subsection (2).
1914 (b) Such person has made all reasonable searches and
1915 inquiries to ascertain whether the judgment debtor possesses
1916 real or personal property or other assets subject to being sold
1917 or applied in satisfaction of the judgment, and by her or his
1918 search the person has discovered no property or assets; or she
1919 or he has discovered property and assets and has taken all
1920 necessary action and proceedings for the application thereof to
1921 the judgment, but the amount thereby realized was insufficient
1922 to satisfy the judgment. To verify compliance with such
1923 condition, the office may require such person to have a writ of
1924 execution be issued upon such judgment, may require a showing
1925 that no personal or real property of the judgment debtor liable
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1926 to be levied upon in complete satisfaction of the judgment can
1927 be found, or may require an affidavit from the claimant setting
1928 forth the reasonable searches and inquiries undertaken and the
1929 result of those searches and inquiries.
1930 (c) Such person has applied any amounts recovered from the
1931 judgment debtor, or from any other source, to the damages
1932 awarded by the court.
1933 (d) The act for which recovery is sought occurred on or
1934 after January 1, 1979.
1935 (e) The office waives compliance with the requirements of
1936 paragraph (a) or paragraph (b). The office may waive such
1937 compliance if the dealer, investment adviser, or associated
1938 person which is the subject of the claim filed with the office
1939 is the subject of any proceeding in which a receiver has been
1940 appointed by a court of competent jurisdiction. If the office
1941 waives such compliance, the office may, upon petition by the
1942 debtor or the court-appointed trustee, examiner, or receiver,
1943 distribute funds from the Securities Guaranty Fund up to the
1944 amount allowed under s. 517.141. Any waiver granted pursuant to
1945 this section shall be considered a judgment for purposes of
1946 complying with the requirements of this section and of s.
1947 517.141.
1948 (4) A person who has done any of the following is not
1949 eligible for payment from the Securities Guaranty Fund:
1950 (a) Participated or assisted in a violation of this
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1951 chapter.
1952 (b) Attempted to commit or committed a violation of this
1953 chapter.
1954 (c) Profited from a violation of this chapter.
1955 (5) An eligible person, or a receiver on behalf of the
1956 eligible person, seeking payment from the Securities Guaranty
1957 Fund must file with the office a written application on a form
1958 that the commission may prescribe by rule. The commission may
1959 adopt by rule procedures for filing documents by electronic
1960 means, provided that such procedures provide the office with the
1961 information and data required by this section. The application
1962 must be filed with the office within 1 year after the date of
1963 the final judgment, the date on which a restitution order has
1964 been ripe for execution, or the date of any appellate decision
1965 thereon, and, at minimum, must contain all of the following
1966 information:
1967 (a) The eligible person's and, if applicable, the
1968 receiver's full name, address, and contact information.
1969 (b) The person ordered to pay restitution.
1970 (c) If the eligible person is a business entity, the
1971 eligible person's type and place of organization and, as
1972 applicable, a copy, as amended, of its articles of
1973 incorporation, articles of organization, trust agreement, or
1974 partnership agreement.
1975 (d) Any final judgment and a copy thereof.
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1976 (e) Any restitution order pursuant to s. 517.191(3), and a
1977 copy thereof.
1978 (f) An affidavit from the eligible person stating either
1979 one of the following:
1980 1. That the eligible person has made all reasonable
1981 searches and inquiries to ascertain whether the judgment debtor
1982 possesses real or personal property or other assets subject to
1983 being sold or applied in satisfaction of the final judgment and,
1984 by the eligible person's search, that the eligible person has
1985 not discovered any property or assets.
1986 2. That the eligible person has taken necessary action on
1987 the property and assets of the wrongdoers but the final judgment
1988 remains unsatisfied.
1989 (g) If the application is filed by the receiver, an
1990 affidavit from the receiver stating the amount of restitution
1991 owed to the eligible person on whose behalf the claim is filed;
1992 the amount of any money, property, or assets paid to the
1993 eligible person on whose behalf the claim is filed by the person
1994 over whom the receiver is appointed; and the amount of any
1995 unsatisfied portion of any eligible person's order of
1996 restitution.
1997 (h) The eligible person's residence or domicile at the
1998 time of the violation of s. 517.07 or s. 517.301 which resulted
1999 in the eligible person's monetary damages.
2000 (i) The amount of any unsatisfied portion of the eligible
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2001 person's final judgment.
2002 (j) Whether an appeal or motion to vacate an arbitration
2003 award has been filed.
2004 (6) If the office finds that a person is eligible for
2005 payment from the Securities Guaranty Fund and if the person has
2006 complied with this section and the rules adopted under this
2007 section, the office must approve payment to such person from the
2008 fund. Within 90 days after the office's receipt of a complete
2009 application, each eligible person or receiver must be given
2010 written notice, personally or by mail, that the office intends
2011 to approve or deny, or has approved or denied, the application
2012 for payment from the Securities Guaranty Fund.
2013 (7) Upon receipt by the eligible person or receiver of
2014 notice of the office's decision that the eligible person's or
2015 receiver's application for payment from the Securities Guaranty
2016 Fund is approved, and before any disbursement, the eligible
2017 person shall assign to the office on a form prescribed by
2018 commission rule all right, title, and interest in the final
2019 judgment or order of restitution equal to the amount of such
2020 payment.
2021 (8) The office shall deem an application for payment from
2022 the Securities Guaranty Fund abandoned if the eligible person or
2023 receiver, or any person acting on behalf of the eligible person
2024 or receiver, fails to timely complete the application as
2025 prescribed by commission rule. The time period to complete an
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2026 application must be tolled during the pendency of an appeal or
2027 motion to vacate an arbitration award.
2028 (4) Any person who files an action that may result in the
2029 disbursement of funds from the Securities Guaranty Fund pursuan t
2030 to the provisions of s. 517.141 shall give written notice by
2031 certified mail to the office as soon as practicable after such
2032 action has been filed. The failure to give such notice shall not
2033 bar a payment from the Securities Guaranty Fund if all of the
2034 conditions specified in subsection (3) are satisfied.
2035 (5) The commission may adopt rules pursuant to ss.
2036 120.536(1) and 120.54 specifying the procedures for complying
2037 with subsections (2), (3), and (4), including rules for the form
2038 of submission and guidelines for the sufficiency and content of
2039 submissions of notices and claims.
2040 Section 13. Section 517.141, Florida Statutes, is amended
2041 to read:
2042 517.141 Payment from the fund.—
2043 (1) As used in this section, the term:
2044 (a) "Claimant" means a person determined eligible for
2045 payment under s. 517.131 that is approved by the office for
2046 payment from the Securities Guaranty Fund.
2047 (b) "Final judgment" includes an arbitration award
2048 confirmed by a court of competent jurisdiction.
2049 (c) "Specified adult" has the same meaning as in s.
2050 517.34(1).
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2051 (2) A claimant is entitled to disbursement from the
2052 Securities Guaranty Fund in the amount equal to the lesser of:
2053 (a) The unsatisfied portion of the claimant's final
2054 judgment or final order of restitution, but only to the extent
2055 that the final judgment or final order of restitution reflects
2056 actual or compensatory damages, excluding postjudgment interest,
2057 costs, and attorney fees; or
2058 (b)1. The sum of $15,000; or
2059 2. If the claimant is a specified adult or if a specifi ed
2060 adult is a beneficial owner or beneficiary of the claimant, the
2061 sum of $25,000 Any person who meets all of the conditions
2062 prescribed in s. 517.131 may apply to the office for payment to
2063 be made to such person from the Securities Guaranty Fund in the
2064 amount equal to the unsatisfied portion of such person's
2065 judgment or $10,000, whichever is less, but only to the extent
2066 and amount reflected in the judgment as being actual or
2067 compensatory damages, excluding postjudgment interest, costs,
2068 and attorney's fees.
2069 (3)(2) Regardless of the number of claims or claimants
2070 involved, payments for claims are shall be limited in the
2071 aggregate to $250,000 $100,000 against any one dealer,
2072 investment adviser, or associated person. If the total claim
2073 filed by a receiver on behalf of multiple claimants exceeds
2074 claims exceed the aggregate limit of $250,000 $100,000, the
2075 office must shall prorate the payment to each claimant based
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2076 upon the ratio that each claimant's individual the person's
2077 claim bears to the total claim claims filed.
2078 (4) If at any time the balance in the Securities Guaranty
2079 Fund is insufficient to satisfy a valid claim or portion of a
2080 valid claim approved by the office, the office must satisfy the
2081 unpaid claim or portion of the valid claim as soon as a
2082 sufficient amount of money has been deposited into or
2083 transferred to the Securities Guaranty Fund. If more than one
2084 unsatisfied claim is outstanding, the claims must be paid in the
2085 sequence in which the claims were approved by final order of the
2086 office, which final order is not subject to an appeal or other
2087 pending proceeding.
2088 (5) All payments and disbursements made from the
2089 Securities Guaranty Fund must be made by the Chief Financial
2090 Officer, or his or her designee, upon authorization by the
2091 office. The office shall submit such authorization within 30
2092 days after the approval of an eligible person for payment from
2093 the Securities Guaranty Fund
2094 (3) No payment shall be made on any claim against any one
2095 dealer, investment adviser, or associated person before the
2096 expiration of 2 years from the date any claimant is found by the
2097 office to be eligible for recovery pursuant to this section. If
2098 during this 2-year period more than one claim is filed against
2099 the same dealer, investment adviser, or associated person, or if
2100 the office receives notice pursuant to s. 517.131(4) that an
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2101 action against the same dealer, investment adviser, or
2102 associated person is pending, all such claims and notices of
2103 pending claims received during this period against the same
2104 dealer, investment adviser, or associated person may be handled
2105 by the office as provided in this section. Two years after the
2106 first claimant against that same dealer, investment adviser, or
2107 associated person applies for payment pursuant to this section:
2108 (a) The office shall determine those persons eligible for
2109 payment or for potential payment in the event of a pending
2110 action. All such persons may be entitled to receive their pro
2111 rata shares of the fund as provided in this section.
2112 (b) Those persons who meet all the conditions prescribed
2113 in s. 517.131 and who have applied for payment pursuant to this
2114 section will be entitled to receive their pro rata shares of the
2115 total disbursement.
2116 (c) Those persons who have filed notice with the office of
2117 a pending claim pursuant to s. 517.131(4) but who are not yet
2118 eligible for payment from the fund will be entitled to receive
2119 their pro rata shares of the total disbursement once they have
2120 complied with subsection (1). However, in the event that the
2121 amounts they are eligible to receive pursuant to subsection (1)
2122 are less than their pro rata shares as determined under this
2123 section, any excess shall be distributed pro rata to those
2124 persons entitled to disbursement under this subsection whose pro
2125 rata shares of the total disbursement were less than the amounts
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2126 of their claims.
2127 (6)(4) Individual claims filed by persons owning the same
2128 joint account, or claims arising stemming from any other type of
2129 account maintained by a particular licensee on which more than
2130 one name appears, must shall be treated as the claims of one
2131 eligible claimant with respect to payment from the Securities
2132 Guaranty Fund. If a claimant who has obtained a final judgment
2133 or final order of restitution that which qualifies for
2134 disbursement under s. 517.131 has maintained more than one
2135 account with the dealer, investment adviser, or associated
2136 person who is the subject of the claims, for purposes of
2137 disbursement of the Securities Guaranty Fund, all such accounts,
2138 whether joint or individual, must shall be considered as one
2139 account and shall entitle such claimant to only one distribution
2140 from the fund not to exceed the lesser of $10,000 or the
2141 unsatisfied portion of such claimant's judgment as provided in
2142 subsection (1). To the extent that a claimant obtains more than
2143 one final judgment or final order of restitution against a
2144 person dealer, investment adviser, or one or more associated
2145 persons arising out of the same transactions, occurrences, or
2146 conduct or out of such the dealer's, investment adviser's, or
2147 associated person's handling of the claimant's account, the
2148 final such judgments or final orders of restitution must shall
2149 be consolidated for purposes of this section and shall entitle
2150 the claimant to only one disbursement from the fund not to
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2151 exceed the lesser of $10,000 or the unsatisfied portion of such
2152 claimant's judgment as provided in subsection (1).
2153 (7)(5) If the final judgment or final order of restitution
2154 that gave rise to the claim is overturned in any appeal or in
2155 any collateral proceeding, the claimant must shall reimburse the
2156 Securities Guaranty Fund all amounts paid from the fund to the
2157 claimant on the claim. If the claimant satisfies the final
2158 judgment or final order of restitution specified in s.
2159 517.131(3)(a), the claimant must shall reimburse the Securities
2160 Guaranty Fund all amounts paid from the fund to the claimant on
2161 the claim. Such reimbursement must shall be paid to the
2162 Department of Financial Services office within 60 days after the
2163 final resolution of the appellate or collateral proceedings or
2164 the satisfaction of the final judgment or order of restitution,
2165 with the 60-day period commencing on the date the final order or
2166 decision is entered in such proceedings.
2167 (8)(6) If a claimant receives payments in excess of that
2168 which is permitted under this chapter, the claimant must shall
2169 reimburse the Securities Guaranty Fund such excess within 60
2170 days after the claimant receives such excess payment or after
2171 the payment is determined to be in excess of that permitted by
2172 law, whichever is later.
2173 (9) A claimant who knowingly and willfully files or causes
2174 to be filed an application under s. 517.131 or documents
2175 supporting the application, any of which contain false,
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2176 incomplete, or misleading information in any material aspect,
2177 forfeits all payments from the Securities Guaranty Fund and
2178 commits a violation of s. 517.301(1)(c).
2179 (10)(7) The Department of Financial Services office may
2180 institute legal proceedings to enforce compliance with this
2181 section and with s. 517.131 to recover moneys owed to the
2182 Securities Guaranty Fund, and is shall be entitled to recover
2183 interest, costs, and attorney attorney's fees in any action
2184 brought pursuant to this section in which the department office
2185 prevails.
2186 (8) If at any time the money in the Securities Guaranty
2187 Fund is insufficient to satisfy any valid claim or portion of a
2188 valid claim approved by the office, the office shall satisfy
2189 such unpaid claim or portion of such valid claim as soon as a
2190 sufficient amount of money has been deposited in or transferred
2191 to the fund. When there is more than one unsatisfied claim
2192 outstanding, such claims shall be paid in the order in which the
2193 claims were approved by final order of the office, which order
2194 is not subject to an appeal or other pending proceeding.
2195 (9) Upon receipt by the claimant of the payment from the
2196 Securities Guaranty Fund, the claimant shall assign any
2197 additional right, title, and interest in the judgment, to the
2198 extent of such payment, to the office. If the provisions of s.
2199 517.131(3)(e) apply, the claimant must assign to the office any
2200 right, title, and interest in the debt to the extent of any
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2201 payment by the office from the Securities Guaranty Fund.
2202 (10) All payments and disbursements made from the
2203 Securities Guaranty Fund shall be made by the Chief Financial
2204 Officer upon authorization signed by the director of the office,
2205 or such agent as she or he may designate.
2206 Section 14. Section 517.191, Florida Statutes, is amended
2207 to read:
2208 517.191 Enforcement by the Office of Financial Regulation
2209 Injunction to restrain violations; civil penalties; enforcement
2210 by Attorney General.—
2211 (1) When it appears to the office, either upon complaint
2212 or otherwise, that a person has engaged or is about to engage in
2213 any act or practice constituting a violation of this chapter or
2214 a rule or order hereunder, the office may investigate; and
2215 whenever it shall believe from evidence satisfactory to it that
2216 any such person has engaged, is engaged, or is about to en gage
2217 in any act or practice constituting a violation of this chapter
2218 or a rule or order hereunder, the office may, in addition to any
2219 other remedies, bring action in the name and on behalf of the
2220 state against such person and any other person concerned in or
2221 in any way participating in or about to participate in such
2222 practices or engaging therein or doing any act or acts in
2223 furtherance thereof or in violation of this chapter to enjoin
2224 such person or persons from continuing such fraudulent practices
2225 or engaging therein or doing any act or acts in furtherance
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2226 thereof or in violation of this chapter. In any such court
2227 proceedings, the office may apply for, and on due showing be
2228 entitled to have issued, the court's subpoena requiring
2229 forthwith the appearance of any defendant and her or his
2230 employees, associated persons, or agents and the production of
2231 documents, books, and records that may appear necessary for the
2232 hearing of such petition, to testify or give evidence concerning
2233 the acts or conduct or things complained of in such application
2234 for injunction. In such action, the equity courts shall have
2235 jurisdiction of the subject matter, and a judgment may be
2236 entered awarding such injunction as may be proper.
2237 (2) In addition to all other means provided by law for the
2238 enforcement of any temporary restraining order, temporary
2239 injunction, or permanent injunction issued in any such court
2240 proceedings, the court shall have the power and jurisdiction,
2241 upon application of the office, to impound and to appoint a
2242 receiver or administrator for the property, assets, and business
2243 of the defendant, including, but not limited to, the books,
2244 records, documents, and papers appertaining thereto. Such
2245 receiver or administrator, when appointed and qualified, shall
2246 have all powers and duties as to custody, collection,
2247 administration, winding up, and liquidation of such said
2248 property and business as may shall from time to time be
2249 conferred upon her or him by the court. In any such action, the
2250 court may issue orders and decrees staying all pending suits and
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2251 enjoining any further suits affecting the receiver's or
2252 administrator's custody or possession of such the said property,
2253 assets, and business or, in its discretion, may with the consent
2254 of the presiding judge of the circuit require that all such
2255 suits be assigned to the circuit court judge appointing such the
2256 said receiver or administrator.
2257 (3) In addition to, or in lieu of, any other remedies
2258 provided by this chapter, the office may apply to the court
2259 hearing the this matter for an order directing the defendant to
2260 make restitution of those sums shown by the office to have been
2261 obtained in violation of any of the provisions of this chapter.
2262 The office has standing to request such restitution on behalf of
2263 victims in cases brought by the office under this chapter,
2264 regardless of the appointment of an administrator or receiver
2265 under subsection (2) or an injunction under subsection (1).
2266 Further, such restitution must shall, at the option of the
2267 court, be payable to the administrator or receiver appointed
2268 pursuant to this section or directly to the persons whose assets
2269 were obtained in violation of this chapter.
2270 (4) In addition to any other remedies provided by this
2271 chapter, the office may apply to the court hearing the matter
2272 for, and the court has shall have jurisdiction to impose, a
2273 civil penalty against any person found to have violated any
2274 provision of this chapter, any rule or order adopted by the
2275 commission or the office, or any written agreement entered into
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2276 with the office in an amount not to exceed any of the following:
2277 (a) The greater of $20,000 $10,000 for a natural person or
2278 $25,000 for a business entity any other person, or the gross
2279 amount of any pecuniary loss to investors or pecuniary gain to a
2280 natural person or business entity such defendant for each such
2281 violation, other than a violation of s. 517.301, plus the
2282 greater of $50,000 for a natural person or $250,000 for a
2283 business entity any other person, or the gross amount of any
2284 pecuniary loss to investors or pecuniary gain to a natural
2285 person or business entity such defendant for each violation of
2286 s. 517.301.
2287 (b) Twice the amount of the civil penalty that would
2288 otherwise be imposed under this subsection if a specified adult,
2289 as defined in s. 517.34(1), is the victim of a violation of this
2290 chapter.
2291
2292 All civil penalties collected pursuant to this subsection must
2293 shall be deposited into the Anti-Fraud Trust Fund. The office
2294 may recover any costs and attorney fees related to its
2295 investigation or enforcement of this section. Notwithstanding
2296 any other law, such moneys recovered by the office must be
2297 deposited into the Anti-Fraud Trust Fund.
2298 (5) For purposes of any action brought by the office under
2299 this section, a control person who controls any person found to
2300 have violated this chapter or any rule adopted thereunder is
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2301 jointly and severally liable with, and to the same extent as,
2302 the controlled person in any action brought by the office under
2303 this section unless the control person can establish by a
2304 preponderance of the evidence that he or she acted in good faith
2305 and did not directly or indirectly induce the act that
2306 constitutes the violation or cause of action.
2307 (6) For purposes of any action brought by the office under
2308 this section, a person who knowingly or recklessly provides
2309 substantial assistance to another person in violation of this
2310 chapter or any rule adopted thereunder is deemed to violate this
2311 chapter or the rule to the same extent as the person to whom
2312 such assistance is provided.
2313 (7) The office may issue and serve upon a person a cease
2314 and desist order if the office has reason to believe that the
2315 person violates, has violated, or is about to violate this
2316 chapter, any commission or office rule or order, or any written
2317 agreement entered into with the office.
2318 (8) If the office finds that any conduct described in
2319 subsection (7) presents an immediate danger to the public,
2320 requiring an immediate final order, the office may issue an
2321 emergency cease and desist order reciting with particularity the
2322 facts underlying such findings. The emergency cease and desist
2323 order is effective immediately upon service of a copy of the
2324 order on the respondent named in the order and remains effective
2325 for 90 days after issuance. If the office begins nonemergency
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2326 cease and desist proceedings under subsection (7), the emergency
2327 cease and desist order remains effective until the conclusion of
2328 the proceedings under ss. 120.569 and 120.57.
2329 (9) The office may impose and collect an administrative
2330 fine against any person found to have violated any provision of
2331 this chapter, any rule or order adopted by the commission or
2332 office, or any written agreement entered into with the office in
2333 an amount not to exceed the penalties provided in subsection
2334 (4). All fines collected under this subsection must b e deposited
2335 into the Anti-Fraud Trust Fund.
2336 (10) The office may bar, permanently or for a specific
2337 period of time, any person found to have violated this chapter,
2338 any rule or order adopted by the commission or office, or any
2339 written agreement entered into with the office from submitting
2340 an application or notification for a license or registration
2341 with the office.
2342 (11) In addition to all other means provided by law for
2343 enforcing any of the provisions of this chapter, when the
2344 Attorney General, upon complaint or otherwise, has reason to
2345 believe that a person has engaged or is engaged in any act or
2346 practice constituting a violation of s. 517.275 or, s. 517.301,
2347 s. 517.311, or s. 517.312, or any rule or order issued under
2348 such sections, the Attorney General may investigate and bring an
2349 action to enforce these provisions as provided in ss. 517.171,
2350 517.201, and 517.2015 after receiving written approval from the
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2351 office. Such an action may be brought against such person and
2352 any other person in any way participating in such act or
2353 practice or engaging in such act or practice or doing any act in
2354 furtherance of such act or practice, to obtain injunctive
2355 relief, restitution, civil penalties, and any remedies provided
2356 for in this section. The Attorney General may recover any costs
2357 and attorney fees related to the Attorney General's
2358 investigation or enforcement of this section. Notwithstanding
2359 any other provision of law, moneys recovered by the Attorney
2360 General for costs, attorney fees, and civil penalties for a
2361 violation of s. 517.275 or, s. 517.301, s. 517.311, or s.
2362 517.312, or any rule or order issued pursuant to such sections,
2363 must shall be deposited in the Legal Affairs Revolving Trust
2364 Fund. The Legal Affairs Revolving Trust Fund may be used to
2365 investigate and enforce this section.
2366 (12)(6) This section does not limit the authority of the
2367 office to bring an administrative action against any person that
2368 is the subject of a civil action brought pursuant to this
2369 section or limit the authority of the office to engage i n
2370 investigations or enforcement actions with the Attorney General.
2371 However, a person may not be subject to both a civil penalty
2372 under subsection (4) and an administrative fine under subsection
2373 (9) s. 517.221(3) as the result of the same facts.
2374 (13)(7) Notwithstanding s. 95.11(4)(f), an enforcement
2375 action brought under this section based on a violation of any
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2376 provision of this chapter or any rule or order issued under this
2377 chapter shall be brought within 6 years after the facts giving
2378 rise to the cause of action were discovered or should have been
2379 discovered with the exercise of due diligence, but not more than
2380 8 years after the date such violation occurred.
2381 (14) This chapter does not limit any statutory right of
2382 the state to punish a person for a violation of a law.
2383 (15) When not in conflict with the Constitution or laws of
2384 the United States, the courts of this state have the same
2385 jurisdiction over civil suits instituted in connection with the
2386 sale or offer of sale of securities under any laws of the Un ited
2387 States as the courts of this state may have with regard to
2388 similar cases instituted under the laws of this state.
2389 Section 15. Section 517.211, Florida Statutes, is amended
2390 to read:
2391 517.211 Private remedies available in cases of unlawful
2392 sale.—
2393 (1) Every sale made in violation of either s. 517.07 or s.
2394 517.12(1), (3), (4), (8), (10), (12), (15), or (17) may be
2395 rescinded at the election of the purchaser; however, except a
2396 sale made in violation of the provisions of s. 517.1202(3)
2397 relating to a renewal of a branch office notification or shall
2398 not be subject to this section, and a sale made in violation of
2399 the provisions of s. 517.12(12) relating to filing a change of
2400 address amendment is shall not be subject to this section. Each
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2401 person making the sale and every director, officer, partner, or
2402 agent of or for the seller, if the director, officer, partner,
2403 or agent has personally participated or aided in making the
2404 sale, is jointly and severally liable to the purchaser in an
2405 action for rescission, if the purchaser still owns the security,
2406 or for damages, if the purchaser has sold the security. No
2407 purchaser otherwise entitled will have the benefit of this
2408 subsection who has refused or failed, within 30 days after of
2409 receipt, to accept an offer made in writing by the seller, if
2410 the purchaser has not sold the security, to take back the
2411 security in question and to refund the full amount paid by the
2412 purchaser or, if the purchaser has sold the security, to pay the
2413 purchaser an amount equal to the difference between the amount
2414 paid for the security and the amount received by the purchaser
2415 on the sale of the security, together, in either case, with
2416 interest on the full amount paid for the security by the
2417 purchaser at the legal rate, pursuant to s. 55.03, for the
2418 period from the date of payment by the purchaser to the date of
2419 repayment, less the amount of any income received by the
2420 purchaser on the security.
2421 (2) Any person purchasing or selling a security in
2422 violation of s. 517.301, and every director, officer, partner,
2423 or agent of or for the purchaser or seller, if the director,
2424 officer, partner, or agent has personally participated or aided
2425 in making the sale or purchase, is jointly and severally liable
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2426 to the person selling the security to or purchasing the security
2427 from such person in an action for rescission, if the plaintiff
2428 still owns the security, or for damages, if the plaintiff has
2429 sold the security.
2430 (3) For purposes of any action brought under this section,
2431 a control person who controls any person found to have violated
2432 any provision specified in subsection (1) is jointly and
2433 severally liable with, and to the same extent as, such
2434 controlled person in any action brought under this section
2435 unless the control person can establish by a preponderance of
2436 the evidence that he or she acted in good faith and did not
2437 directly or indirectly induce the act that constitutes the
2438 violation or cause of action.
2439 (4) In an action for rescission:
2440 (a) A purchaser may recover the consideration paid for the
2441 security or investment, plus interest thereon at the legal rate
2442 from the date of purchase, less the amount of any income
2443 received by the purchaser on the security or investment upon
2444 tender of the security or investment.
2445 (b) A seller may recover the security upon tender of the
2446 consideration paid for the security, plus interest at the legal
2447 rate from the date of purchase, less the amount of any income
2448 received by the defendant on the security.
2449 (5)(4) In an action for damages brought by a purchaser of
2450 a security or investment, the plaintiff must shall recover an
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2451 amount equal to the difference between:
2452 (a) The consideration paid for the security or investment,
2453 plus interest thereon at the legal rate from the date of
2454 purchase; and
2455 (b) The value of the security or investment at the time it
2456 was disposed of by the plaintiff, plus the amount of any income
2457 received on the security or investment by the plaintiff.
2458 (6)(5) In an action for damages brought by a seller of a
2459 security, the plaintiff shall recover an amount equal to the
2460 difference between:
2461 (a) The value of the security at the time of the
2462 complaint, plus the amount of any income received by the
2463 defendant on the security; and
2464 (b) The consideration received for the security, plus
2465 interest at the legal rate from the date of sale.
2466 (7)(6) In any action brought under this section, including
2467 an appeal, the court shall award reasonable attorney attorneys'
2468 fees to the prevailing party unless the court finds that the
2469 award of such fees would be unjust.
2470 (8) This chapter does not limit any statutory or common -
2471 law right of a person to bring an action in a court for an act
2472 involved in the sale of securities or investments.
2473 (9) The same civil remedies provided by the laws of the
2474 United States for the purchasers or sellers of securities in
2475 interstate commerce also extend to purchasers or sellers of
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2476 securities under this chapter.
2477 Section 16. Section 517.221, Florida Statutes, is
2478 repealed.
2479 Section 17. Section 517.241, Florida Statutes, is
2480 repealed.
2481 Section 18. Section 517.301, Florida Statutes, is amended
2482 to read:
2483 517.301 Fraudulent transactions; falsification or
2484 concealment of facts.—
2485 (1) It is unlawful and a violation of the provisions of
2486 this chapter for a person:
2487 (a) In connection with the rendering of any investment
2488 advice or in connection with the offer, sale, or purchase of any
2489 investment or security, including any security exempted under
2490 the provisions of s. 517.051 and including any security sold in
2491 a transaction exempted under the provisions of s. 517.061, s.
2492 517.0611, or s. 517.0612, directly or indirectly:
2493 1. To employ any device, scheme, or artifice to defraud;
2494 2. To obtain money or property by means of any untrue
2495 statement of a material fact or any omission to state a material
2496 fact necessary in order to make the statements made, in the
2497 light of the circumstances under which they were made, not
2498 misleading; or
2499 3. To engage in any transaction, practice, or course of
2500 business which operates or would operate as a fraud or deceit
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2501 upon a person.
2502 (b) By use of any means, to publish, give publicity to, or
2503 circulate any notice, circular, advertisement, newspaper,
2504 article, letter, investment service, communication, or broadcast
2505 that, although which, though not purporting to offer a security
2506 for sale, describes such security for a consideration received
2507 or to be received directly or indirectly from an issuer,
2508 underwriter, or dealer, or from an agent or employee of an
2509 issuer, underwriter, or dealer, without fully disclosing the
2510 receipt, whether past or prospective, of such consideration and
2511 the amount of the consideration.
2512 (c) In any matter within the jurisdiction of the office,
2513 to knowingly and willfully falsify, conceal, or cover up, by any
2514 trick, scheme, or device, a material fact, make any false,
2515 fictitious, or fraudulent statement or representation, or make
2516 or use any false writing or document, knowing the same to
2517 contain any false, fictitious, or fraudulent statement or entry.
2518 (2) For purposes of ss. 517.311 and 517.312 and this
2519 section, the term "investment" means any commitment of money or
2520 property principally induced by a representation that an
2521 economic benefit may be derived from such commitment, except
2522 that the term does not include a commitment of money or property
2523 for:
2524 (a) The purchase of a business opportunity, business
2525 enterprise, or real property through a person licensed under
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2526 chapter 475 or registered under former chapter 498; or
2527 (b) The purchase of tangible personal property through a
2528 person not engaged in telephone solicitation, electronic mail,
2529 text messages, social media, or other electronic means where
2530 said property is offered and sold in accordance with the
2531 following conditions:
2532 1. there are no specific representations or guarantees
2533 made by the offeror or seller as to the economic benefit to be
2534 derived from the purchase.;
2535 2. The tangible property is delivered to the purchaser
2536 within 30 days after sale, except that such 30-day period may be
2537 extended by the office if market conditions so warrant; and
2538 3. The seller has offered the purchaser a full refund
2539 policy in writing, exercisable by the purchaser within 10 days
2540 of the date of delivery of such tangible personal property,
2541 except that the amount of such refund may not exceed the bid
2542 price in effect at the time the property is returned to the
2543 seller. If the applicable sellers' market is closed at the time
2544 the property is returned to the seller for a refund, the amount
2545 of such refund shall be based on the bid price for such property
2546 at the next opening of such market.
2547 (3) It is unlawful for a person in issuing or selling a
2548 security within this state, including a security exempted under
2549 s. 517.051 and including a transaction exempted under s.
2550 517.061, s. 517.0611, or s. 517.0612, to misrepresent that such
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2551 security or business entity has been guaranteed, sponsored,
2552 recommended, or approved by the state or an agency or officer of
2553 the state or by the United States or an agency or officer of the
2554 United States.
2555 (4) It is unlawful for a person registered or required to
2556 be registered, or subject to the notice requirements, under this
2557 chapter, including such persons and issuers who are subject to
2558 s. 517.051, s. 517.061, s. 517.0611, s. 517.0612, or s. 517.081,
2559 to misrepresent that such person has been sponsored,
2560 recommended, or approved, or that such person's abilities or
2561 qualifications have in any respect been approved, by the state
2562 or an agency or officer of the state or by the United St ates or
2563 an agency or officer of the United States.
2564 (5) It is unlawful and a violation of this chapter for a
2565 person in connection with the offer or sale of an investment to
2566 obtain money or property by means of:
2567 (a) A misrepresentation that the investment offered or
2568 sold is guaranteed, sponsored, recommended, or approved by the
2569 state or an agency or officer of the state or by the United
2570 States or an agency or officer of the United States; or
2571 (b) A misrepresentation that such person is sponsored,
2572 recommended, or approved, or that such person's abilities or
2573 qualifications have in any respect been examined, by the state
2574 or an agency or officer of the state or by the United States or
2575 an agency or officer of the United States.
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2576 (6)(a) Subsection (3) or subsection (4) may not be
2577 construed to prohibit a statement that a person or security is
2578 registered or has made a notice filing under this chapter if
2579 such statement is required by this chapter or rules promulgated
2580 thereunder and is true in fact and if the effect of such
2581 statement is not a misrepresentation.
2582 (b) A statement that a person is registered made in
2583 connection with the offer or sale of a security under this
2584 chapter must include the following disclaimer: "Registration
2585 does not imply that such person has been sponsored, recommended,
2586 or approved by the state or an agency or officer of the state or
2587 by the United States or an agency or officer of the United
2588 States."
2589 1. If the statement of registration is made in writing,
2590 the disclaimer must immediately follow such statement and must
2591 be in the same size and style of print as the statement of
2592 registration.
2593 2. If the statement of registration is made orally, the
2594 disclaimer must be made or broadcast with the same force and
2595 effect as the statement of registration.
2596 (7) It is unlawful and a violation of this chapter for a
2597 person to directly or indirectly manage, supervise, control, or
2598 own, either alone or in association with others, a boiler room
2599 in this state which sells or offers for sale a security or
2600 investment in violation of subsection (1), subsection (3),
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2601 subsection (4), subsection (5), or subsection (6).
2602 Section 19. Section 517.311, Florida Statutes, is
2603 repealed.
2604 Section 20. Section 517.312, Florida Statutes, is
2605 repealed.
2606 Section 21. Subsections (1), (2), and (3) of section
2607 517.072, Florida Statutes, are amended to read:
2608 517.072 Viatical settlement investments.—
2609 (1) The exemptions provided for by s. 517.051(6) and (11)
2610 ss. 517.051(6), (8), and (10) do not apply to a viatical
2611 settlement investment.
2612 (2) The offering of a viatical settlement investment is
2613 not an exempt transaction under s. 517.061(10), (12), (13), and
2614 (18) s. 517.061(2), (3), (8), (11), and (18), regardless of
2615 whether the offering otherwise complies with the conditions of
2616 that section, unless such offering is to a qualified
2617 institutional buyer.
2618 (3) The registration provisions of ss. 517.07 and 517.12
2619 do not apply to any of the following transactions in viatical
2620 settlement investments; however, such transactions in viatical
2621 settlement investments are subject to s. 517.301 the provisions
2622 of ss. 517.301, 517.311, and 517.312:
2623 (a) The transfer or assignment of an interest in a
2624 previously viaticated policy from a natural person who transfers
2625 or assigns no more than one such interest in a single calendar
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2626 year.
2627 (b) The provision of stop-loss coverage to a viatical
2628 settlement provider, financing entity, or related provider
2629 trust, as those terms are defined in s. 626.9911, by an
2630 authorized or eligible insurer.
2631 (c) The transfer or assignment of a viaticated policy from
2632 a licensed viatical settlement provider to another licensed
2633 viatical settlement provider, a related provider trust, a
2634 financing entity, or a special purpose entity, as those terms
2635 are defined in s. 626.9911, or to a contingency insurer,
2636 provided that such transfer or assignment is not the direct or
2637 indirect promotion of any scheme or enterprise with the intent
2638 of violating or evading any provision of this chapter.
2639 (d) The transfer or assignment of a viaticated policy t o a
2640 bank, trust company, savings institution, insurance company,
2641 dealer, investment company as defined in the Investment Company
2642 Act of 1940, as amended, pension or profit-sharing trust,
2643 qualified institutional buyer, or an accredited investor,
2644 provided such transfer or assignment is not for the direct or
2645 indirect promotion of any scheme or enterprise with the intent
2646 of violating or evading any provision of this chapter.
2647 (e) The transfer or assignment of a viaticated policy by a
2648 conservator of a viatical settlement provider appointed by a
2649 court of competent jurisdiction who transfers or assigns
2650 ownership of viaticated policies pursuant to that court's order.
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2651 Section 22. Subsection (2), paragraph (a) of subsection
2652 (9), paragraph (j) of subsection (16), subsection (20), and
2653 paragraphs (b) and (c) of subsection (21) of section 517.12,
2654 Florida Statutes, are amended to read:
2655 517.12 Registration of dealers, associated persons,
2656 intermediaries, and investment advisers.—
2657 (2) The registration requirements of this section do not
2658 apply in a transaction exempted by s. 517.061(1)-(6), (8), (9),
2659 (12), and (13) s. 517.061(1)-(10), (12), (14), and (15).
2660 (9)(a) An applicant for registration shall pay an
2661 assessment fee of $200, in the case of a dealer or investment
2662 adviser, or $50, in the case of an associated person. An
2663 associated person may be assessed an additional fee to cover the
2664 cost for the fingerprints to be processed by the office. Such
2665 fee shall be determined by rule of the commission. Such fees
2666 become the revenue of the state, except for those assessments
2667 provided for under s. 517.131(2) s. 517.131(1) until such time
2668 as the Securities Guaranty Fund satisfies the statutory limits,
2669 and are not returnable in the event that registration is
2670 withdrawn or not granted.
2671 (16)
2672 (j) All fees collected under this subsection become the
2673 revenue of the state, except those assessments provided for
2674 under s. 517.131(2) s. 517.131(1), until the Securities Guaranty
2675 Fund has satisfied the statutory limits. Such fees are not
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2676 returnable if a notice-filing is withdrawn.
2677 (20) The registration requirements of this section do not
2678 apply to any general lines insurance agent or life insurance
2679 agent licensed under chapter 626, with regard to for the sale of
2680 a security as defined in s. 517.021(25)(g) s. 517.021(23)(g), if
2681 the individual is directly authorized by the issuer to offer or
2682 sell the security on behalf of the issuer and the issuer is a
2683 federally chartered savings bank subject to regulation by the
2684 Federal Deposit Insurance Corporation. Actions under this
2685 subsection shall constitute activity under the insurance agent's
2686 license for purposes of ss. 626.611 and 626.621.
2687 (21)
2688 (b) Prior to the completion of any securities transaction
2689 described in s. 517.061(7) s. 517.061(22), a merger and
2690 acquisition broker must receive written assurances from the
2691 control person with the largest percentage of ownership for both
2692 the buyer and seller engaged in the transaction that:
2693 1. After the transaction is completed, any person who
2694 acquires securities or assets of the eligible privately held
2695 company, acting alone or in concert, will be a control person of
2696 the eligible privately held company or will be a control person
2697 for the business conducted with the assets of the eligible
2698 privately held company; and
2699 2. If any person is offered securities in exchange for
2700 securities or assets of the eligible privately held company,
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2701 such person will, before becoming legally bound to complete the
2702 transaction, receive or be given reasonable access to the most
2703 recent year-end financial statements of the issuer of the
2704 securities offered in exchange. The most recent year-end
2705 financial statements shall be customarily prepared by the
2706 issuer's management in the normal course of operations. If the
2707 financial statements of the issuer are audited, reviewed, or
2708 compiled, the most recent year-end financial statements must
2709 include any related statement by the independent certified
2710 public accountant; a balance sheet dated not more than 120 days
2711 before the date of the exchange offer; and information
2712 pertaining to the management, business, results of operations
2713 for the period covered by the foregoing financial statements,
2714 and material loss contingencies of the issuer.
2715 (c) A merger and acquisition broker engaged in a
2716 transaction exempt under s. 517.061(7) s. 517.061(22) is exempt
2717 from registration under this section unless the merger and
2718 acquisition broker:
2719 1. Directly or indirectly, in connection with the transfer
2720 of ownership of an eligible privately held company, receives,
2721 holds, transmits, or has custody of the funds or securities to
2722 be exchanged by the parties to the transaction;
2723 2. Engages on behalf of an issuer in a public offering of
2724 any class of securities which is registered, or which is
2725 required to be registered, with the United States Securities and
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2726 Exchange Commission under the Securities Exchange Act of 1934,
2727 15 U.S.C. ss. 78a et seq., or with the office under s. 517.07;
2728 or for which the issuer files, or is required to file, periodic
2729 information, documents, and reports under s. 15(d) of the
2730 Securities Exchange Act of 1934, 15 U.S.C. s. 78o(d);
2731 3. Engages on behalf of any party in a transaction
2732 involving a public shell company;
2733 4. Is subject to a suspension or revocation of
2734 registration under s. 15(b)(4) of the Securities Exchange Act of
2735 1934, 15 U.S.C. s. 78o(b)(4);
2736 5. Is subject to a statutory disqualification described in
2737 s. 3(a)(39) of the Securities Exchange Act of 1934, 15 U.S.C. s.
2738 78c(a)(39);
2739 6. Is subject to a disqualification under the United
2740 States Securities and Exchange Commission Rule 506(d), 17 C.F.R.
2741 s. 230.506(d); or
2742 7. Is subject to a final order described in s. 15(b)(4)(H)
2743 of the Securities Exchange Act of 1934, 15 U.S.C. s.
2744 78o(b)(4)(H).
2745 Section 23. Subsection (6) of section 517.1201, Florida
2746 Statutes, is amended to read:
2747 517.1201 Notice filing requirements for federal covered
2748 advisers.—
2749 (6) All fees collected under this section become the
2750 revenue of the state, except for those assessments provided for
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2751 under s. 517.131(2) s. 517.131(1) until such time as the
2752 Securities Guaranty Fund satisfies the statutory limits, and are
2753 not returnable in the event that a notice filing is withdrawn.
2754 Section 24. Subsections (4) and (8) of section 517.1202,
2755 Florida Statutes, are amended to read:
2756 517.1202 Notice-filing requirements for branch offices.—
2757 (4) A branch office notice-filing under this section shall
2758 be summarily suspended by the office if the notice-filer fails
2759 to provide to the office, within 30 days after a written request
2760 by the office, all of the information required by this section
2761 and the rules adopted under this section. The summary suspension
2762 shall be in effect for the branch office until such time as the
2763 notice-filer submits the requested information to the office,
2764 pays a fine as prescribed by s. 517.191(9) s. 517.221(3), and a
2765 final order is entered. At such time, the suspension shall be
2766 lifted. For purposes of s. 120.60(6), failure to provide all
2767 information required by this section and the underlying rules
2768 constitutes immediate and serious danger to the public health,
2769 safety, and welfare. If the notice-filer fails to provide all of
2770 the requested information within a period of 90 days, the
2771 notice-filing shall be revoked by the office.
2772 (8) All fees collected under this section become the
2773 revenue of the state, except for those assessments provided for
2774 under s. 517.131(2) s. 517.131(1) until such time as the
2775 Securities Guaranty Fund satisfies the statutory limits, and are
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2776 not returnable in the event that a branch office notice -filing
2777 is withdrawn.
2778 Section 25. Subsection (2) of section 517.302, Florida
2779 Statutes, is amended to read:
2780 517.302 Criminal penalties; alternative fine; Anti -Fraud
2781 Trust Fund; time limitation for criminal prosecution. —
2782 (2) Any person who violates s. 517.301 the provisions of
2783 s. 517.312(1) by obtaining money or property of an aggregate
2784 value exceeding $50,000 from five or more persons is guilty of a
2785 felony of the first degree, punishable as provided in s.
2786 775.082, s. 775.083, or s. 775.084.
2787 Section 26. This act shall take effect October 1, 2024.
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COMMERCE COMMITTEE
CS/HB 311 by Rep. Barnaby
Relating to Securities
AMENDMENT SUMMARY
January 30, 2024
Amendment 1 by Rep. Barnaby (Line 561): The amendment clarifies the registration
exemption for transactions involving the offer or sale of securities under an employee benefit
plan.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/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: Commerce Committee
2 Representative Barnaby offered the following:
3
4 Amendment
5 Remove lines 561-575 and insert:
6 issuer’s parent for the participation of its employees,
7 directors, managers, managing members, general partners,
8 trustees, officers, or consultants and advisors, and their
9 family members who acquire such securities from such persons
10 through gifts or domestic relations orders. This includes offers
11 or sales of such securities to all of the following persons:
12 (a) Former employees, directors, managers, managing
13 members, general partners, trustees, officers, or consultants
14 and advisors, provided that the securities are issued to such
15 persons in connection with their prior employment by or services
16 to the issuer.
586997 - h0311-line561.docx
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. CS/HB 311 (2024)
Amendment No. 1
17 (b) Insurance agents who are exclusive insurance agents of
18
586997 - h0311-line561.docx
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HB 479
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 479 Alternative Mobility Funding Systems
SPONSOR(S): Robinson, W.
TIED BILLS: IDEN./SIM. BILLS: SB 688
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Local Administration, Federal Affairs & Special 15 Y, 0 N Mwakyanjala Darden
Districts Subcommittee
2) Ways & Means Committee 21 Y, 0 N Rexford Aldridge
3) Commerce Committee Larkin Anstead
SUMMARY ANALYSIS
Each county and municipality is required to plan for future development and growth by adopting, implementing,
and amending as necessary a comprehensive plan. All elements of a plan or plan amendment must be based
on relevant, appropriate data and an analysis by the local government. Each comprehensive plan must include
a transportation element addressing traffic circulation, including the types, locations, and extent of existing and
proposed major thoroughfares and transportation routes, including bicycle and pedestrian ways.
Certain public facilities and services must be in place and available to serve new development no later than the
issuance of a certificate of occupancy or its functional equivalent by a local government. Local governments
may extend this concurrency requirement to additional public facilities such as transportation. Local
governments electing to repeal transportation concurrency are encouraged to adopt an alternative mobility
funding system. One method of funding local government transportation concurrency requirements is through
the adoption and imposition of impact fees to fund the infrastructure needed to expand local services to meet
the demands of population growth caused by new growth. Local governments may increase impact fees only
under limited circumstances, including upon a showing of extraordinary circumstances.
In 2013, the concept of a mobility fee-based funding system was added to the comprehensive planning
statutes as an encouraged alternative to transportation concurrency.
The bill revises provisions concerning impact fees and concurrency and provides additional guidance
concerning mobility fees. The bill provides definitions for “mobility fee” and “mobility plan” to be used within the
Community Planning Act. The bill provides that local governments adopting and collecting impact fees by
ordinance or resolution must use localized data available within the previous 12 months of adoption for the
local government’s calculation of impact fees.
The bill does not have a fiscal impact on state or local government.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Present Situation
Every local government, defined as any county and municipality, 1 is required to plan for future
development and growth by adopting, implementing, and amending as necessary a comprehensive
plan.2 All elements of a plan or plan amendment must be based on relevant, appropriate data 3 and an
analysis by the local government that may include surveys, studies, aspirational goals, and other data
available at the time of adopting the plan or amendment. 4 The data supporting a plan or amendment
must be taken from professionally accepted sources 5 and must be based on permanent and seasonal
population estimates and projections.6
Each comprehensive plan must include a transportation element, the purpose of which is to plan for a
multimodal transportation system emphasizing feasible public transportation, addressing mobility
issues pertinent to the size and character of the local government, and designed to support all other
elements of the comprehensive plan.7 The transportation element must address traffic circulation,
including the types, locations, and extent of existing and proposed major thoroughfares and
transportation routes, including bicycle and pedestrian ways. 8 The plan of a local government with a
population exceeding 50,000 that is not within the planning area of a metropolitan planning
organization (MPO)9 also must address mass transit, ports, and aviation10 and related facilities.11 The
transportation planning element for a local government with a population exceeding 50,000 located
within the area of a MPO specifically must address the following:
All alternative modes of travel, including public transportation, pedestrian, and bicycle;
Aviation, rail, and seaport facilities, access to those facilities, and intermodal transportation;
Capability to evacuate coastal population prior to a natural disaster;
Airports, projected airport and aviation development, and land use around airports; and
Identification of land use densities, building intensities, and transportation management
programs to promote public transportation.12
The transportation planning element for a municipality with a population exceeding 50,000, or a county
with a population exceeding 75,000, must provide for moving people by mass transit, including:
Providing efficient, safe, and convenient public transit, including accommodation for the
transportation disadvantaged;
Plans for port, aviation, and related facilities; and
1 S. 163.3164(29), F.S. For the purpose of the act, the Central Florida Tourism Oversight District may exercise the powers of a
municipality for the area under its jurisdiction. S. 163.3167(6), F.S. See also ch. 2023-5, Laws of Fla. (renaming the Reedy Creek
Improvement District to the Central Florida Tourism Oversight District).
2 Ss. 163.3167(2), 163.3177(2), F.S.
3 “To be based on data means to react to it in an appropriate way and to the extent necessary indicated by the data available o n that
particular subject at the time of adoption of the plan or plan amendment at issue.” S. 163.3177(1)(f), F.S.
4 S. 163.3177(1)(f), F.S.
5
S. 163.3177(1)(f)2., F.S. The statute does not further define “professionally accepted sources.”
6 S. 163.3177(1)(f)3., F.S. Population estimates may be those published by the Office of Economic and Demographic Research or m ay
be generated by the local government based upon a professionally acceptable methodology. Id.
7 S. 163.3177(6)(b), F.S.
8 S. 163.3177(6)(b)1., F.S.
9 An MPO must be designated as provided in 23 U.S.C. s. 450.310(a) for each urbanized area with a population of more than 50,00 0.
S. 339.175(2), F.S. Florida MPOs are intended specifically to develop plans and programs in metropolitan a reas for the development
and management of transportation systems and facilities, including pedestrian walkways and bicycle transportation facilities to function
as an intermodal transportation system. S. 339.175(1), F.S.
10 All local governments have the option to include within the transportation element an airport master plan, incorporated into the plan
through the comprehensive plan amendment process. S. 163.3177(6)(b)4., F.S.
11 S. 163.3177(6)(b), F.S.
12 S. 163.3177(6)(b)2., F.S.
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Plans for circulation of recreational traffic, including bicycle and riding facilities and exercise
trails.13
In addition to the general requirements for data supporting a comprehensive plan or amendment, the
transportation planning element must include one or more maps showing the general location of
existing and proposed transportation system features and data, analyses, and associated principles
pertaining to:
Existing transportation system levels of service and system needs and availability of
transportation facilities and services;
Growth trends and travel patterns, as well as interactions between land use and transportation;
Current and projected intermodal14 deficiencies and needs;
Projected transportation system levels of service and system needs; and
How the local government will correct existing facility deficiencies, meet the needs of the
projected transportation system, and advance the transportation purposes of the plan. 15
Generally, local government transportation and mobility planning should address providing mobility
options, such as automobile, bicycle, pedestrian, or mass transit, that minimize environmental impacts,
expand transportation options, and increase connectivity between destinations.16
Transportation Concurrency
Certain public facilities and services must be in place and available to serve new development no later
than the issuance of a certificate of occupancy or its functional equivalent by a local government.17
Local governments may extend this concurrency requirement to additional public facilities such as
transportation.18 Where concurrency is applied to transportation, the local government comprehensive
plan must provide the principles, guidelines, standards, and strategies, including adopted levels of
service, to guide its application.19 The plan must show that the included levels of service may
reasonably be met.20 Local governments utilizing transportation concurrency must use professionally
accepted studies to evaluate levels of service and techniques to measure such levels of service when
evaluating potential impacts of proposed developments. 21 While local governments implementing a
transportation concurrency system are encouraged to develop and use certain tools and guidelines,
such as addressing potential negative impacts on urban infill and redevelopment 22 and adopting long-
term multimodal strategies,23 such local governments must follow specific concurrency requirements
including consulting with the Florida Department of Transportation if proposed amendments to the plan
affect the Strategic Intermodal System, exempting public transit facilities from concurrency
requirements, and allowing a developer to contribute a proportionate share to mitigate transportation
impacts for a specific development.24
13 S. 163.3177(6)(b)3., F.S.
14 “Intermodal transportation” is not defined in the statute but generally means the transportation by or involving more than on e form of
carrier in a single journey, particularly for moving cargo. See “intermodal,” available at https://www.merriam-
webster.com/dictionary/intermodal (last visited Jan. 14, 2024); “intermodal transport,” available at
https://www.ups.com/us/en/supplychain/insights/knowledge/glossary-term/intermodal-transport.page (last visited Jan. 14, 2024). Part of
the intent in creating the Florida Strategic Intermodal System is to addres s the increased demands placed on the entire statewide
transportation system by economic and population growth and projected increases in freight movement, international trade, and tourism
designing and operating a strategic intermodal system to meet the m obility needs of the state. See s. 339.61(2), F.S.
15
S. 163.3177(6)(b)1., F.S.
16 Dept. of Commerce, “Transportation Planning,” available at https://www.floridajobs.org/community-planning-and-
development/programs/community-planning-table-of-contents/transportation-planning (last visited Jan. 14, 2024), herein Commerce
Transportation Planning.
17 S. 163.1380(2), F.S. The only such services for which concurrency is mandatory are sanitary sewer, solid waste, drainage, and
potable water supplies.
18 S. 163.3180(1), F.S.
19 Ss. 163.3180(1)(a), 163.3180(5)(a), F.S. See Commerce Transportation Planning, supra n. 16.
20 S. 163.3180(1)(b), F.S.
21 S. 163.3180(5)(b)-(c), F.S.
22 S. 163.3180(5)(e), F.S.
23 S. 163.3180(f), F.S.
24 S. 163.3180(5)(h), F.S. See Commerce Transportation Planning, supra n. 16.
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An applicant for a development-of-regional-impact development order, development agreement,
rezoning, or other land use development permit satisfies the requirements for transportation
concurrency if the applicant in good faith offers to enter into a binding agreement to pay for or construct
its proportionate share of transportation improvements required to mitigate the impact of the proposed
development and the proffered proportionate share contribution or construction is sufficient to
accomplish one or more mobility improvements benefitting a regionally significant transportation
facility.25 The plan for transportation concurrency must provide the basis on which landowners will be
assessed a proportionate share,26 which must include a compliant formula for calculating the
proportionate share.27 The proportionate share may not include additional costs to reduce or eliminate
existing transportation deficiencies.28
Local governments electing to repeal transportation concurrency are encouraged to adopt an
alternative mobility funding system. Such an alternative system may not be used to restrict or deny
certain development approval applications provided the developer agrees to pay for the development’s
transportation impacts using the funding mechanism implemented by the local government. Local
government mobility fee systems must comply with all requirements for adopting and implementing
impact fees. An alternative funding system that is not mobility fee based may not impose on new
development any responsibility for funding existing transportation deficiencies. 29
Impact Fees
One method of funding local government transportation concurrency requirements is through the
adoption and imposition of impact fees on new development. Local governments impose impact fees to
fund infrastructure30 needed to expand local services to meet the demands of population growth
caused by new growth.31 Impact fees must meet the following minimum criteria when adopted:
The fee must be calculated using the most recent and localized data. 32
The local government adopting the impact fee must account for and report impact fee
collections and expenditures. If the fee is imposed for a specific infrastructure need, the local
government must account for those revenues and expenditures in a separate accounting fund. 33
Charges imposed for the collection of impact fees must be limited to the actual costs. 34
All local governments must give notice of a new or increased impact fee at least 90 days before
the new or increased fee takes effect, but need not wait 90 days before decreasing, suspending,
or eliminating an impact fee. Unless the result reduces total mitigation costs or impact fees on
an applicant, new or increased impact fees may not apply to current or pending applications
submitted before the effective date of an ordinance or resolution imposing a new or increased
impact fee.35
A local government may not require payment of the impact fee before the date of issuing a
building permit for the property that is subject to the fee. 36
25 S. 163.3180(5)(h)1.c., F.S.
26 S. 163.3180(5)(h)1.d., F.S.
27 S. 163.3180(5(h)2.a.-d., F.S.
28
S. 163.3180(5)(h)2., F.S. For purposes of s. 163.3180(5), F.S., “transportation deficiency” means a facility or facilities on which the
level of service standard adopted in the comprehensive plan is exceeded by the number of existing, projected, or vested trips together
with additional trips originating from any source other than the development project under review, and trips forecast by established
traffic standards. S. 163.3180(5)(h)4., F.S. Local governments may resolve existing transportation deficiencies within an ide ntified
transportation deficiency area by creating a transportation development authority with specific powers to implement a transportati on
sufficiency plan funded through a formula of tax increment funding. Adopting a transportation sufficiency plan is deemed as m eeting
transportation level of service standards, and proportionate fair-share mitigation is limited to ensure developments within the
transportation deficiency area are not responsible for additional costs to eliminate deficiencies. S. 163.3182, F.S.
29 S. 163.3180(5)(i), F.S.
30 “Infrastructure” means the fixed capital expenditure or outlay for the construction, reconstruction, or improvement of public facilities
with a life expectancy of five or more years, together with specific other costs required to bring the public facility into service but
excluding the costs of repairs or maintenance. The term also includes specific equipment. S. 163.31801(3), F.S.
31 S. 163.31801(2), F.S. Water and sewer connection fees are not impact fees. S. 163.31801(12), F.S.
32 S. 163.31801(4)(a), F.S.
33 S. 163.31801(4)(b), F.S.
34 S. 163.31801(4)(c), F.S.
35 S. 163.31801(4)(d), F.S.
36 S. 163.31801(4)(e), F.S.
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The impact fee must be reasonably connected to, or have a rational nexus with, the need for
additional capital facilities and the increased impact generated by the new residential or
commercial construction.37
The impact fee must be reasonably connected to, or have a rational nexus with, the
expenditures of the revenues generated and the benefits accruing to the new residential or
commercial construction.38
The local government must specifically earmark revenues generated by the impact fee to
acquire, construct, or improve capital facilities to benefit new users. 39
The local government may not use revenues generated by the impact fee to pay existing debt or
for previously approved projects unless the expenditure is reasonably connected to, or has a
rational nexus with, the increased impact generated by the new residential or commercial
construction.40
The types of impact fees charged and the timing of their collection after issuing a building permit are
within the discretion of the local government or special district authorities choosing to impose the
fees.41 In general, a building permit must be obtained before the construction, erection, modification,
repair, or demolition of any building.42 A development permit pertains to any building permit, zoning
permit, subdivision approval, rezoning, certification, special exception, variance, or any other official
action of local government having the effect of permitting the development of land. 43 Local governments
providing an exception or waiver of impact fees for the development or construction of affordable
housing are not required to use any revenues to offset the impact of such development. 44
Local governments must credit against impact fee collections any contribution related to public facilities
or infrastructure on a dollar-for-dollar basis at fair market value for the general category or class of
public facilities or infrastructure for which the contribution was made. If no impact fee is collected for
that category of public facility or infrastructure for which the contribution is made, no credit may be
applied.45 Credits for impact fees may be assigned or transferred at any time once established, from
one development or parcel to another within the same impact fee zone or district or within an adjoining
impact fee zone or district within the same local government jurisdiction.46
Local governments may increase impact fees only under limited circumstances. A fee may be
increased no more than once every four years, may not be increased retroactively, the increase may
not exceed 50 percent of the current impact fee amount, and any increase must be consistent with a
statutorily-compliant plan for the imposition, collection, and use of the fees. An increase not exceeding
25 percent of the current fee amount must be implemented in two equal annual increments, while an
increase greater than 25 percent but not exceeding 50 percent of the current amount must be
implemented in four equal annual installments. However, a local government may increase a fee more
than once in four years or for more than 50 percent of a current impact fee amount if it has:
Prepared a demonstrated-need study within 12 months before adopting the increase showing
extraordinary circumstances necessitating the need for the increase;
Conducted at least two publicly noticed workshops on the extraordinary circumstances
justifying the increase; and
Approved the increase by at least a two-thirds vote of the governing body.47
37
S. 163.31801(4)(f), F.S.
38 S. 163.31801(4)(g), F.S.
39 S. 163.31801(4)(h), F.S.
40 S. 163.31801(4)(i), F.S.
41 See s. 163.31801(2), F.S.
42 S. 553.79, F.S.
43 S. 163.3164(16), F.S.
44 S. 163.31801(11), F.S.
45 S. 163.31801(5), F.S.
46 S. 163.31801(10), F.S. In an action challenging an impact fee or a failure to provide proper credits, the local government ha s the
burden of proof to establish the imposition of the fee or the credit complies with the statute, and the court may not defer to the decision
or expertise of the government. S. 163.31801(9), F.S.
47 S. 163.31801(6), F.S.
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A local government that increases an impact fee must still provide the holder of any impact fee credit
the full benefit of the density and intensity prepaid by the credit balance.48
With each annual financial report or audit filed49 a local government must report specific information on
impact fees imposed, including the specific purpose of the fee, the impact fee schedule describing the
method of calculating the fee, the amount assessed for each purpose and for each type of dwelling, the
total amount of fees charged by type of dwelling, and each exception or waiver to the imposition of
impact fees provided for construction of affordable housing.50 Additionally, the chief financial officer or
executive officer (if there is no chief financial officer) must submit with the annual financial report an
affidavit attesting that all impact fees were collected and expended by the local government, or on its
behalf, in full compliance with the spending period provisions in the local ordinance and that funds
expended from each impact fee account were used to acquire, construct, or improve those specific
infrastructure needs.51
Mobility Plans and Fees
In the Community Renewal Act52 of 2009 (Act), the Legislature found that the concept and application
of transportation concurrency was “complex, inequitable, lack(ed) uniformity among jurisdictions, (was)
too focused on roadways to the detriment of desired land use patterns and transportation alternatives,
and frequently prevent(ed) the attainment of important growth management goals.” 53 The Act required
completion and submission of a mobility fee methodology study54 and stated the Legislature’s intent
that a mobility fee “should be designed to provide for mobility needs, ensure that development provides
mitigation for its impacts on the transportation system in approximate proportionality to those impacts,
fairly distribute the fee among the governmental entities responsible for maintaining the impacted
roadways, and promote compact, mixed-use, and energy-efficient development.”55 In 2013, the concept
of a mobility fee-based funding system was added to the comprehensive planning statutes as an
encouraged alternative to transportation concurrency.56
Alternative mobility funding systems using a mobility fee are encouraged to incorporate one or more of
the statutory tools and techniques, including:
Adoption of long-term strategies to facilitate development patterns that support multimodal
solutions, including urban design, appropriate land use mixes, intensity and density;
Adoption of an area wide level of service not dependent on any single road segment function;
Exempting or discounting impacts of locally desired development;
Assigning secondary priority to vehicle mobility and primary priority to ensuring a safe,
comfortable, and attractive pedestrian environment with convenient interconnection to transit;
Establishing multimodal level of service standards that rely primarily on non-vehicular modes of
transportation where existing or planned community design will provide adequate a level of
mobility; and
Reducing impact fees or local access fees to promote development within urban areas,
multimodal transportation districts, and a balance of mixed-use development in certain areas or
districts, or for affordable or workforce housing.57
48 S. 163.31801(7), F.S.
49 See ss. 218.32, 218.39, F.S.
50 S. 163.31801(13), F.S.
51 S. 163.31801(8), F.S.
52 Ch. 2009-96, s. 1, Laws of Fla.
53 Ch. 2009-96, s. 13(1)(a), Laws of Fla.
54 Center for Urban Transportation Research, Evaluation of the Mob ility Fee Concept Final Report, University of South Florida (Nov.
2009), available at https://cutr.usf.edu/wp-content/uploads/2012/08/Evaluation-of-the-Mobility-Fee-Concept-CUTR-Webcast-
04.21.11.pdf (last visited Jan. 14, 2024).
55 Ch. 2009-96, s. 13(1)(b), Laws of Fla.
56 Ch. 2013-78, s. 1, Laws of Fla.
57 S. 163.3180(5)(f), F.S.
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Some local governments have adopted mobility plans and mobility fees. 58
Effect of Proposed Changes
The bill revises provisions concerning impact fees and concurrency while providing additional guidance
concerning mobility fees. The bill provides definitions for “mobility fee” and “mobility plan” to be used
within the Community Planning Act.59
The bill requires agreements between local governments that implement a transportation concurrency
system and applicants for a development-of-regional-impact development order, development
agreement, rezoning, or other land use development permit concerning the applicants offer to pay for
or construct its proportionate share of required improvements to that after an applicant makes its
contribution or constructs its proportionate share, the project shall be considered to have mitigated its
transportation impacts and must be allowed to proceed. The bill provides that local governments may
not prevent a single applicant from proceeding after the applicant has satisfied its proportionate-share
contribution.
The bill prohibits local governments from charging for transportation impacts if they are not the local
government that is issuing a building permit, requires that local governments collect for extra-
jurisdictional impacts if they are issuing building permits, and prohibits local governments from
assessing multiple charges for the same transportation impact.
Impact Fees
The bill provides that local governments adopting and collecting impact fees must use localized data
available within the previous 12 months of adoption for the local government’s calculation of impact
fees. The bill provides that a local government must credit against the collection of the impact fee any
contribution identified in the development order or any form of exaction, including monetary
contributions.
The bill provides that holders of transportation or road impact fee credits granted under s. 163.3180 or
s. 380.06, F.S., along with other provisions, which existed before the adoption of the mobility fee-based
funding system, is entitled to the full benefit of the intensity and density prepaid by the credit balance as
of the date it was first establish.
B. SECTION DIRECTORY:
Section 1: Amends s. 163.3164, F.S., relating to Community Planning Act definitions.
Section 2: Amends s. 163.3180, F.S., relating to concurrency.
Section 3: Amends s. 163.31801. F.S., relating to impact fees.
Section 4: Amends s. 212.055, F.S., relating to discretionary sales surtaxes.
Section 5: 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.
58 See Hillsborough County Code of County Ordinances, ch. 40, art. III, div. 2, Mob ility Fees; Pasco County Code of Ordinances, Land
Development Code, ch. 1300, s. 1302.2; City of Port St. Lucie Code of Ordinances, Title XV, c h. 159, s. 159.101, Port St. Lucie Mob ility
Fee Ordinance.
59 The Community Planning Act is part II of ch. 163, F.S.
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B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
None.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to require counties or municipalities to spend funds or take
action requiring the expenditures of funds; reduce the authority that counties or municipalities have
to raise revenues in the aggregate; or reduce the percentage of state tax shared with counties or
municipalities.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill neither authorizes nor requires administrative rulemaking by executive branch agencies.
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 479 2024
1 A bill to be entitled
2 An act relating to alternative mobility funding
3 systems; amending s. 163.3164, F.S.; providing
4 definitions; amending s. 163.3180, F.S.; revising
5 requirements relating to agreements to pay for or
6 construct certain improvements; authorizing certain
7 local governments to adopt an alternative mobility
8 planning and fee system or an alternative system in
9 certain circumstances; providing requirements for the
10 application of an adopted alternative system;
11 prohibiting an alternative system from imposing
12 responsibility for funding an existing transportation
13 deficiency upon new development; prohibiting local
14 governments that do not issue building permits from
15 charging for transportation impacts; requiring local
16 governments that issue building permits to collect for
17 extrajurisdictional impacts; prohibiting local
18 governments from assessing multiple charges for the
19 same transportation impact; amending s. 163.31801,
20 F.S.; revising requirements for the calculation of
21 impact fees by certain local governments and special
22 districts; requiring local governments transitioning
23 to alternative funding systems to provide holders of
24 impact fee credits with full benefit of intensity and
25 density of prepaid credit balances as of a specified
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HB 479 2024
26 date; amending s. 212.055, F.S.; conforming a cros s-
27 reference; providing an effective date.
28
29 Be It Enacted by the Legislature of the State of Florida:
30
31 Section 1. Subsections (32) through (52) of section
32 163.3164, Florida Statutes, are renumbered as subsections (34)
33 through (54), respectively, and new subsections (32) and (33)
34 are added to that section, to read:
35 163.3164 Community Planning Act; definitions.—As used in
36 this act:
37 (32) "Mobility fee" means a local government fee schedule
38 established by ordinance and based on the projects included in
39 the local government's adopted mobility plan.
40 (33) "Mobility plan" means an integrated land use and
41 alternative mobility transportation plan adopted into a local
42 government comprehensive plan that promotes a compact, mixed -
43 use, and interconnected development served by a multimodal
44 transportation system in an area that is urban in character as
45 defined in s. 171.031.
46 Section 2. Paragraphs (h) and (i) of subsection (5) of
47 section 163.3180, Florida Statutes, are amended, and paragraph
48 (j) is added to that subsection, to read:
49 163.3180 Concurrency.—
50 (5)
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51 (h)1. Local governments that continue to implement a
52 transportation concurrency system, whether in the form adopted
53 into the comprehensive plan before the effective date of the
54 Community Planning Act, chapter 2011-139, Laws of Florida, or as
55 subsequently modified, must:
56 a. Consult with the Department of Transportation when
57 proposed plan amendments affect facilities on the strategic
58 intermodal system.
59 b. Exempt public transit facilities from concurrency. For
60 the purposes of this sub-subparagraph, public transit facilities
61 include transit stations and terminals; transit station parking;
62 park-and-ride lots; intermodal public transit connection or
63 transfer facilities; fixed bus, guideway, and rail stat ions; and
64 airport passenger terminals and concourses, air cargo
65 facilities, and hangars for the assembly, manufacture,
66 maintenance, or storage of aircraft. As used in this sub -
67 subparagraph, the terms "terminals" and "transit facilities" do
68 not include seaports or commercial or residential development
69 constructed in conjunction with a public transit facility.
70 c. Allow an applicant for a development-of-regional-impact
71 development order, development agreement, rezoning, or other
72 land use development permit to satisfy the transportation
73 concurrency requirements of the local comprehensive plan, the
74 local government's concurrency management system, and s. 380.06,
75 when applicable, if:
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76 (I) The applicant in good faith offers to enter into a
77 binding agreement to pay for or construct its proportionate
78 share of required improvements in a manner consistent with this
79 subsection. The agreement must provide that after an applicant
80 makes its contribution or constructs its proportionate share
81 pursuant to this sub-sub-subparagraph, the project shall be
82 considered to have mitigated its transportation impacts and be
83 allowed to proceed.
84 (II) The proportionate-share contribution or construction
85 is sufficient to accomplish one or more mobility improvements
86 that will benefit a regionally significant transportation
87 facility. A local government may accept contributions from
88 multiple applicants for a planned improvement if it maintains
89 contributions in a separate account designated for that purpose.
90 A local government may not prevent a single applicant from
91 proceeding after the applicant has satisfied its proportionate-
92 share contribution.
93 d. Provide the basis upon which the landowners will be
94 assessed a proportionate share of the cost addressing the
95 transportation impacts resulting from a proposed development.
96 2. An applicant shall not be held responsible for the
97 additional cost of reducing or eliminating deficiencies. When an
98 applicant contributes or constructs its proportionate share
99 pursuant to this paragraph, a local government may not require
100 payment or construction of transportation facilities whose costs
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101 would be greater than a development's proportionate share of the
102 improvements necessary to mitigate the development's impacts.
103 a. The proportionate-share contribution shall be
104 calculated based upon the number of trips from the proposed
105 development expected to reach roadways during the peak hour from
106 the stage or phase being approved, divided by the change in the
107 peak hour maximum service volume of roadways resulting from
108 construction of an improvement necessary to maintain or achieve
109 the adopted level of service, multiplied by the construction
110 cost, at the time of development payment, of the improvement
111 necessary to maintain or achieve the adopted level of service.
112 b. In using the proportionate-share formula provided in
113 this subparagraph, the applicant, in its traffic analysis, shall
114 identify those roads or facilities that have a transportation
115 deficiency in accordance with the transportation deficiency as
116 defined in subparagraph 4. The proportionate-share formula
117 provided in this subparagraph shall be applied only to those
118 facilities that are determined to be significantly impacted by
119 the project traffic under review. If any road is determined to
120 be transportation deficient without the project traffic under
121 review, the costs of correcting that deficiency shall be removed
122 from the project's proportionate-share calculation and the
123 necessary transportation improvements to correct that deficiency
124 shall be considered to be in place for purposes of the
125 proportionate-share calculation. The improvement necessary to
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126 correct the transportation deficiency is the funding
127 responsibility of the entity that has maintenance responsibility
128 for the facility. The development's proportionate share shall be
129 calculated only for the needed transportation improvements that
130 are greater than the identified deficiency.
131 c. When the provisions of subparagraph 1. and this
132 subparagraph have been satisfied for a particular stage or phase
133 of development, all transportation impacts from that stage or
134 phase for which mitigation was required and provided shall be
135 deemed fully mitigated in any transportation analysis for a
136 subsequent stage or phase of development. Trips from a previous
137 stage or phase that did not result in impacts for which
138 mitigation was required or provided may be cumulatively analyzed
139 with trips from a subsequent stage or phase to determine whether
140 an impact requires mitigation for the subsequent stage or phase.
141 d. In projecting the number of trips to be generated by
142 the development under review, any trips assigned to a toll -
143 financed facility shall be eliminated from the analysis.
144 e. The applicant shall receive a credit on a dollar-for-
145 dollar basis for impact fees, mobility fees, and other
146 transportation concurrency mitigation requirements paid or
147 payable in the future for the project. The credit shall be
148 reduced up to 20 percent by the percentage share that the
149 project's traffic represents of the added capacity of the
150 selected improvement, or by the amount specified by local
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151 ordinance, whichever yields the greater credit.
152 3. This subsection does not require a local government to
153 approve a development that, for reasons other than
154 transportation impacts, is not qualified for approval pursuant
155 to the applicable local comprehensive plan and land development
156 regulations.
157 4. As used in this subsection, the term "transportation
158 deficiency" means a facility or facilities on which the adopted
159 level-of-service standard is exceeded by the existing,
160 committed, and vested trips, plus additional projected
161 background trips from any source other than the development
162 project under review, and trips that are forecast by established
163 traffic standards, including traffic modeling, consistent with
164 the University of Florida's Bureau of Economic and Business
165 Research medium population projections. Additional projected
166 background trips are to be coincident with the particular stage
167 or phase of development under review.
168 (i) If a local government elects to repeal transportation
169 concurrency, the local government may it is encouraged to adopt
170 an alternative mobility planning and fee funding system or an
171 alternative system that is not mobility plan and fee based. The
172 local government that uses one or more of the tools and
173 techniques identified in paragraph (f). Any alternative mobility
174 funding system adopted may not use an alternative system be used
175 to deny, time, or phase an application for site plan approval,
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176 plat approval, final subdivision approval, building permits, or
177 the functional equivalent of such approvals provided that the
178 developer agrees to pay for the development's identified
179 transportation impacts via the funding mechanism implemented by
180 the local government. The revenue from the funding mechanism
181 used in the alternative system must be used to implement the
182 needs of the local government's plan which serves as the bas is
183 for the fee imposed. An alternative A mobility fee-based funding
184 system must comply with s. 163.31801 governing impact fees. An
185 alternative system may not impose that is not mobility fee-based
186 shall not be applied in a manner that imposes upon new
187 development any responsibility for funding an existing
188 transportation deficiency as defined in paragraph (h).
189 (j) Only the local government issuing the building permit
190 may charge for transportation impacts within its jurisdiction.
191 Such local government must collect and account for any
192 extrajurisdictional impacts pursuant to s. 163.3177(6)(h),
193 regardless of whether it implements a transportation concurrency
194 system or an alternative system. A local government may not
195 charge new development or redevelopment for the same
196 transportation impacts.
197 Section 3. Paragraph (a) of subsection (4), paragraph (a)
198 of subsection (5), and subsection (7) of section 163.31801,
199 Florida Statutes, are amended to read:
200 163.31801 Impact fees; short title; intent; minimum
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201 requirements; audits; challenges.—
202 (4) At a minimum, each local government that adopts and
203 collects an impact fee by ordinance and each special district
204 that adopts, collects, and administers an impact fee by
205 resolution must:
206 (a) Ensure that the calculation of the impact fee is based
207 on the most recent and localized data available within the
208 previous 12 months before adoption.
209 (5)(a) Notwithstanding any charter provision,
210 comprehensive plan policy, ordinance, development order,
211 development permit, or resolution, the local government or
212 special district that requires any improvement or contribution
213 must credit against the collection of the impact fee any
214 contribution, whether identified in a development order,
215 proportionate share agreement, or any other form of exaction,
216 related to public facilities or infrastructure, including
217 monetary contributions, land dedication, site planning and
218 design, or construction. Any contribution must be applied on a
219 dollar-for-dollar basis at fair market value to reduce any
220 impact fee collected for the general category or class of public
221 facilities or infrastructure for which the contribution was
222 made.
223 (7) If an impact fee is increased, the holder of any
224 impact fee credits, whether such credits are granted under s.
225 163.3180, s. 380.06, or otherwise, which were in existence
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226 before the increase, is entitled to the full benefit of the
227 intensity or density prepaid by the credit balance as of the
228 date it was first established. If a local government adopts an
229 alternative funding system pursuant to s. 163.3180(5)(i), the
230 holder of any transportation or road impact fee credits granted
231 under s. 163.3180 or s. 380.06 or otherwise that were in
232 existence before the adoption of the alternative funding system
233 is entitled to the full benefit of the intensity and density
234 prepaid by the credit balance as of the date the alternative
235 funding system was first established.
236 Section 4. Paragraph (d) of subsection (2) of section
237 212.055, Florida Statutes, is amended to read:
238 212.055 Discretionary sales surtaxes; legislative intent;
239 authorization and use of proceeds.—It is the legislative intent
240 that any authorization for imposition of a discretionary sales
241 surtax shall be published in the Florida Statutes as a
242 subsection of this section, irrespective of the duration of the
243 levy. Each enactment shall specify the types of counties
244 authorized to levy; the rate or rates which may be imposed; the
245 maximum length of time the surtax may be imposed, if any; the
246 procedure which must be followed to secure voter ap proval, if
247 required; the purpose for which the proceeds may be expended;
248 and such other requirements as the Legislature may provide.
249 Taxable transactions and administrative procedures shall be as
250 provided in s. 212.054.
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251 (2) LOCAL GOVERNMENT INFRASTRUCTURE SURTAX.—
252 (d) The proceeds of the surtax authorized by this
253 subsection and any accrued interest shall be expended by the
254 school district, within the county and municipalities within the
255 county, or, in the case of a negotiated joint county agreement,
256 within another county, to finance, plan, and construct
257 infrastructure; to acquire any interest in land for public
258 recreation, conservation, or protection of natural resources or
259 to prevent or satisfy private property rights claims resulting
260 from limitations imposed by the designation of an area of
261 critical state concern; to provide loans, grants, or rebates to
262 residential or commercial property owners who make energy
263 efficiency improvements to their residential or commercial
264 property, if a local government ordinance authorizing such use
265 is approved by referendum; or to finance the closure of county-
266 owned or municipally owned solid waste landfills that have been
267 closed or are required to be closed by order of the Department
268 of Environmental Protection. Any use of the proceeds or interest
269 for purposes of landfill closure before July 1, 1993, is
270 ratified. The proceeds and any interest may not be used for the
271 operational expenses of infrastructure, except that a county
272 that has a population of fewer than 75,000 and that is required
273 to close a landfill may use the proceeds or interest for long -
274 term maintenance costs associated with landfill closure.
275 Counties, as defined in s. 125.011, and charter counties may, in
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276 addition, use the proceeds or interest to retire or ser vice
277 indebtedness incurred for bonds issued before July 1, 1987, for
278 infrastructure purposes, and for bonds subsequently issued to
279 refund such bonds. Any use of the proceeds or interest for
280 purposes of retiring or servicing indebtedness incurred for
281 refunding bonds before July 1, 1999, is ratified.
282 1. For the purposes of this paragraph, the term
283 "infrastructure" means:
284 a. Any fixed capital expenditure or fixed capital outlay
285 associated with the construction, reconstruction, or improvement
286 of public facilities that have a life expectancy of 5 or more
287 years, any related land acquisition, land improvement, design,
288 and engineering costs, and all other professional and related
289 costs required to bring the public facilities into service. For
290 purposes of this sub-subparagraph, the term "public facilities"
291 means facilities as defined in s. 163.3164(41) s. 163.3164(39),
292 s. 163.3221(13), or s. 189.012(5), and includes facilities that
293 are necessary to carry out governmental purposes, including, but
294 not limited to, fire stations, general governmental office
295 buildings, and animal shelters, regardless of whether the
296 facilities are owned by the local taxing authority or another
297 governmental entity.
298 b. A fire department vehicle, an emergency medical service
299 vehicle, a sheriff's office vehicle, a police department
300 vehicle, or any other vehicle, and the equipment necessary to
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301 outfit the vehicle for its official use or equipment that has a
302 life expectancy of at least 5 years.
303 c. Any expenditure for the construction, lease, or
304 maintenance of, or provision of utilities or security for,
305 facilities, as defined in s. 29.008.
306 d. Any fixed capital expenditure or fixed capital outlay
307 associated with the improvement of private facilities that have
308 a life expectancy of 5 or more years and that the owner agrees
309 to make available for use on a temporary basis as needed by a
310 local government as a public emergency shelter or a staging area
311 for emergency response equipment during an emergency officially
312 declared by the state or by the local government under s.
313 252.38. Such improvements are limited to those necessary to
314 comply with current standards for public emergency evacuation
315 shelters. The owner must enter into a written contract with the
316 local government providing the improvement funding to make the
317 private facility available to the public for purposes of
318 emergency shelter at no cost to the local government for a
319 minimum of 10 years after completion of the improvement, with
320 the provision that the obligation will transfer to any
321 subsequent owner until the end of the minimum period.
322 e. Any land acquisition expenditure for a residential
323 housing project in which at least 30 percent of the units are
324 affordable to individuals or families whose total annual
325 household income does not exceed 120 percent of the area median
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326 income adjusted for household size, if the land is owned by a
327 local government or by a special district that enters into a
328 written agreement with the local government to provide such
329 housing. The local government or special district may enter into
330 a ground lease with a public or private person or entity for
331 nominal or other consideration for the construction of the
332 residential housing project on land acquired pursuant to this
333 sub-subparagraph.
334 f. Instructional technology used solely in a school
335 district's classrooms. As used in this sub-subparagraph, the
336 term "instructional technology" means an interactive device that
337 assists a teacher in instructing a class or a group of students
338 and includes the necessary hardware and software to operate the
339 interactive device. The term also includes support systems in
340 which an interactive device may mount and is not required to be
341 affixed to the facilities.
342 2. For the purposes of this paragraph, the term "energy
343 efficiency improvement" means any energy conservation and
344 efficiency improvement that reduces consumption through
345 conservation or a more efficient use of electricity, natural
346 gas, propane, or other forms of energy on the property,
347 including, but not limited to, air sealing; installation of
348 insulation; installation of energy-efficient heating, cooling,
349 or ventilation systems; installation of solar panels; building
350 modifications to increase the use of daylight or shade;
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351 replacement of windows; installation of energy controls or
352 energy recovery systems; installation of electric vehicle
353 charging equipment; installation of systems for natural gas fuel
354 as defined in s. 206.9951; and installation of efficient
355 lighting equipment.
356 3. Notwithstanding any other provision of this subsection,
357 a local government infrastructure surtax imposed or extended
358 after July 1, 1998, may allocate up to 15 percent of the surtax
359 proceeds for deposit into a trust fund within the county's
360 accounts created for the purpose of funding economic development
361 projects having a general public purpose of improving local
362 economies, including the funding of operational costs and
363 incentives related to economic development. The ballot statemen t
364 must indicate the intention to make an allocation under the
365 authority of this subparagraph.
366 Section 5. This act shall take effect July 1, 2024.
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COMMERCE COMMITTEE
HB 479 by Rep. Robinson, W
Alternative Mobility Funding Systems
AMENDMENT SUMMARY
January 30, 2024
Amendment 1 by Rep. Robinson (line 170):
• Provides that the impact fee calculation must be based on the most recent, localized
data available within the previous 12 months before adoption, if the ordinance or
resolution increases the impact fee.
• Provides technical and clarifying language.
COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 479 (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: Commerce Committee
2 Representative Robinson, W. offered the following:
3
4 Amendment
5 Remove lines 170-208 and insert:
6 an alternative mobility plan and fee funding system or an
7 alternative system that is not mobility plan and fee based. The
8 local government that uses one or more of the tools and
9 techniques identified in paragraph (f). Any alternative mobility
10 funding system adopted may not use an alternative system be used
11 to deny, time, or phase an application for site plan approval,
12 plat approval, final subdivision approval, building permits, or
13 the functional equivalent of such approvals provided that the
14 developer agrees to pay for the development's identified
15 transportation impacts via the funding mechanism implemented by
16 the local government. The revenue from the funding mechanism
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COMMITTEE/SUBCOMMITTEE AMENDMENT
Bill No. HB 479 (2024)
Amendment No.1
17 used in the alternative system must be used to implement the
18 needs of the local government's plan which serves as the basis
19 for the fee imposed. An alternative A mobility fee-based funding
20 system must comply with s. 163.31801 governing impact fees. An
21 alternative system may not impose that is not mobility fee-based
22 shall not be applied in a manner that imposes upon new
23 development any responsibility for funding an existing
24 transportation deficiency as defined in paragraph (h).
25 (j) Only the local government issuing the building permit
26 may charge for transportation capacity impacts associated with
27 new development or redevelopment that occurs within its
28 jurisdiction. Such local government must collect and account for
29 any extrajurisdictional impacts pursuant to s. 163.3177(6)(h),
30 regardless of whether it implements a transportation concurrency
31 system or an alternative system. A local government may not
32 charge new development or redevelopment for the same
33 transportation impacts.
34 Section 3. Paragraph (a) of subsection (4), paragraph (a) of
35 subsection (5), and subsection (7) of section 163.31801, Flo rida
36 Statutes, are amended to read:
37 163.31801 Impact fees; short title; intent; minimum
38 requirements; audits; challenges.—
39 (4) At a minimum, each local government that adopts and
40 collects an impact fee by ordinance and each special district
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Bill No. HB 479 (2024)
Amendment No.1
41 that adopts, collects, and administers an impact fee by
42 resolution must:
43 (a) Ensure that the calculation of the impact fee is based
44 on the most recent and localized data available within the
45 previous 12 months before adoption if the ordinance or
46 resolution increases the impact fee.
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CS/HB 675
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 675 State Recognition of Indian Tribes and Bands
SPONSOR(S): Local Administration, Federal Affairs & Special Districts Subcommittee, Salzman
TIED BILLS: IDEN./SIM. BILLS: SB 1010
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Local Administration, Federal Affairs & Special 15 Y, 0 N, As CS Burgess Darden
Districts Subcommittee
2) Commerce Committee Thompson Hamon
3) State Affairs Committee
SUMMARY ANALYSIS
Federal law recognizes Indian tribes as “distinct, independent political communities, retaining their original
natural rights.” Indian tribes recognized by the federal government have a government-to-government
relationship with the United States.
Historically, tribes secured federal recognition by treaties, acts of Congress, executive branch actions, or
federal court decisions. Today, a tribe may gain federal recognition by an act of Congress, administrative
procedures, or a decision by a federal court. The administrative process, known as the Federal
Acknowledgment Process (FAP), is intended to recognize the continued existence of an inherent sovereign
authority, not provide a grant of sovereign status or create a tribe made of Indian descendants. Some non-
recognized tribes have expressed that the administrative process for recognition can be costly and time-
consuming. Since 1978, the FAP has resulted in the acknowledgement of 18 tribes (out of 52 completed
applications). There are two federally recognized tribes, the Seminole Tribe of Florida and the Miccosukee
Tribe of Indians of Florida, that currently reside and have tribal lands in the state.
Additionally, some states provide a process for tribal recognition. State recognition of a tribe may provide
access to certain federal grant programs, permit tribe members to market their arts and crafts as genuine, and
apply for certain scholarship programs.
The bill provides for state recognition for the Santa Rosa Band of the Lower Muscogee. The bill clarifies that
state recognition of an Indian tribe or band does not create any basis or authority for a tribe to engage in
prohibited gaming activity or to claim any interest in real estate or land that is not already provided elsewhere
in law. The bill also provides that state recognition does not grant any authority or ability for a tribe or band to
consult on state undertakings by the Division of Historical Resources or activities carried out by the State
Archaeologist.
The bill does not appear to have a fiscal impact on state or local governments.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Present Situation
Tribal Sovereignty and Federal Recognition
Federal law recognizes Indian tribes as “distinct, independent political communities, retaining their
original natural rights.”1 Indian tribes recognized by the federal government have a government-to-
government relationship with the United States.2 There are currently 574 federally recognized Indian
tribes in the United States, 347 in the contiguous 48 states, and 227 federally recognized Native entities
within the state of Alaska.3
Historically, tribes secured federal recognition by treaties, acts of Congress, executive branch actions,
or federal court decisions.4 Today, a tribe may gain federal recognition through one of three processes:
An act of Congress;
Administrative procedures under 25 C.F.R. Part 83; or
A decision by a federal court.5
The administrative process under 25 C.F.R. Part 83, known as the Federal Acknowledgment Process
(FAP), originates from a regulation first issued by the Interior Department in 1978. 6 The FAP underwent
significant revisions in 1994 and 2015.7 The purpose of the FAP was to recognize the continued
existence of an inherent sovereign authority, not provide a grant of sovereign status or to create a tribe
made of Indian descendants.8 To qualify for acknowledgment under the current version of the FAP, a
petitioner must:
Demonstrate that it has been identified as an American Indian entity on a substantially
continuous basis since 1900;
Show that the petitioning group comprises a distinct community and has existed as a
community from 1900 until the present;
Demonstrate that it has maintained political influence or authority over its members as an
autonomous entity from 1900 until the present;
Provide a copy of the group’s present governing document, including its membership criteria, or
a written statement describing in full its membership criteria and current governing procedures;
Demonstrate that its membership consists of individuals who descend from the historical Indian
tribe or from historical Indian tribes that combined and functioned as a single autonomous
political entity and provide a current membership list;
Show that the membership of the petitioning group is composed principally of persons who are
not members of any acknowledged North American Indian tribe; and
Demonstrate that neither the petitioner nor its members are the subject of congressional
legislation that has expressly terminated or forbidden the Federal relationship. 9
Some non-recognized tribes have expressed that the administrative process for recognition can be
costly and time-consuming.10 Since 1978, the FAP has resulted in the acknowledgement of 18 tribes
(out of 52 completed applications).11
1 Worcester v. Georgia, 31 U.S. 515, 519 (1832).
2 Bureau of Indian Affairs, Frequently Asked Questions, https://www.bia.gov/frequently-asked-questions (last visited Jan. 12, 2024).
3 88 Fed. Reg. 2112 (Jan. 12, 2023).
4 Bureau of Indian Affairs, Frequently Asked Questions, https://www.bia.gov/frequently-asked-questions (last visited Jan. 12, 2024).
5 Federally Recognized Indian Tribe List Act of 1994, Pub. L. No. 103 -454. If a tribe has previously had its relationship with the United
States expressly terminated by an act of Congress, that tribe’s recognition may only be restored by a subsequent act.
6 Bureau of Indian Affairs, Frequently Asked Questions, https://www.bia.gov/frequently-asked-questions (last visited Jan. 12, 2024).
7 See id. and 80 Fed. Reg. 37887 (July 1, 2015) (publication of final rule for 25 C.F.R. Part 83, concerning Federal Acknowledgment of
American Indian Tribes).
8 The Federal Acknowledgement Process: Hearing Before S. Committee on Indian Affairs, May 11, 2005 (statement of R. Lee Fleming,
Director, Office of Federal Acknowledgment).
9 25 C.F.R. s. 83.11 (2015).
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State Recognition of Indian Tribes
There are currently 63 state-recognized tribes across 11 states: Alabama, Connecticut, Georgia,
Louisiana, Maryland, Massachusetts, New York, North Carolina, South Carolina, Vermont, and
Virginia.12 The method of determining which tribes to recognize varies, from giving a decision-making
role to other tribes in the state (e.g., North Carolina13), an advisory role to other tribes (e.g. Vermont14),
or providing for recognition as determined solely by the legislature (e.g., Georgia 15).
State recognition of a tribe can provide certain benefits. State-recognized tribes are eligible to apply to
several federal grant programs.16 Members of state-recognized tribes are also allowed to market their
arts and crafts products as being genuine17 and may access certain scholarship programs. 18
Indian Tribes in Florida
There are six federally-recognized tribes that are considered “culturally affiliated” with Florida.19 Two
tribes, the Seminole Tribe of Florida and the Miccosukee Tribe of Indians of Florida, currently reside
and have tribal lands in the state. Four other tribes—the Muscogee Creek Nation, the Poarch Band of
Creek Indians, the Seminole Nation of Oklahoma, and the Mississippi Band of Choctaw Indians—do
not have reservation lands within the state, but have previously lived in the state and have a direct
historical and cultural association.
Most state law governing the relationship between the state and the federally-recognized tribes with
tribal lands in the state is contained in ch. 285, F.S.20 This chapter:
Describes the respective reservations of the tribes; 21
Provides that members may hunt, fish, and frog for personal consumption on tribal lands
without paying licensing or permitting fees;22
Establishes state criminal and civil jurisdiction on reservations; 23
Creates special improvement districts for reservation lands; 24 and
Provides for the gaming compact between the state and the Seminole Tribe of Florida.25
Additionally, Florida law previously provided for a Creek Indian Council to assist Creek Indians and their
descendants in accessing state, local, and federal programs that could provide for economic, cultural,
and social advancement.26 This provision was repealed in 2001.27
10 National Congress of American Indians (NCAI), Federal Recognition, https://www.ncai.org/policy-issues/tribal-governance/federal-
recognition (last visited Jan. 12, 2024).
11 Bureau of Indian Affairs, Petitions Resolved, https://www.bia.gov/as -ia/ofa/petitions-resolved (last visited Jan. 12, 2024).
12
Natl. Conf. of State Legislatures, State Recognition of American Indian Trib es, https://www.ncsl.org/quad-caucus/state-recognition-of-
american-indian-tribes (last visited Jan. 12, 2024)
13 N.C. Gen. Stat. s. 143B-406(a)(10).
14 Vt. Stat. Ann. tit. 1, s. 852(c)(5).
15 Ga. Code Ann. S. 44-12-300.
16 See Natl. Conf. of State Legislatures, State Recognition of American Indian Tribes, https://www.ncsl.org/quad-caucus/state-
recognition-of-american-indian-tribes (last visited Jan. 12, 2024) (“Departments of Housing and Urban Development, Labor, Education,
and Health and Human Services have statutory and regulatory authority to provide funding fo r state-recognized tribes). See also U.S.
Dept. of Health and Human Services, Trib al Programs, https://www.acf.hhs.gov/tribal-programs (last visited Jan. 12, 2024) (state-
recognized tribes eligible for Administration for Native Americans programs).
17 Dept. of the Interior Indian Arts and Crafts Board, The Indian Arts and Crafts Act of 1990, https://www.doi.gov/iacb/act (last visited
Jan. 12, 2024).
18 American Indian College Fund, Scholarships, https://collegefund.org/students/scholarships/ (last visited Jan. 12, 2024).
19 Fla. Dept. of Transportation, Office of Environmental Management Consulting Tribes, https://www.fdot.gov/environment/na -website-
files/consulting-tribes.shtm (last visited Jan. 12, 2024)
20 Ch. 285, F.S. But see s. 210.1801, F.S. (exempting the sale of cigarettes to tribe members on reservation land for personal use from
the cigarette excise tax).
21 S. 285.061, F.S.
22 Ss. 285.09, 285.10, and 285.15, FS.
23 S. 285.16, F.S.
24 Ss. 285.17-285.18, F.S.
25 Ch. 285, Part II, passim.
26 Ch. 79-421, s. 1, Laws of Fla.
27 Ch. 2001-89, Laws of Fla.
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Division of Historical Resources
The Division of Historical Resources is granted many powers and responsibilities necessary to carry
out the state policy regarding historical resources, including, but not limited to:
Directing and conducting a comprehensive statewide survey of historic resources in cooperation
with federal and state agencies, local governments, and private organizations;
Developing a comprehensive statewide historic preservation plan;
Ensuring that historic resources are taken into consideration at all levels of planning and
development;
Advising and assisting federal and state agencies and local governments in carrying out their
historic preservation responsibilities and programs;
Providing public information, education, and technical assistance relating to historic preservation
programs;
Carrying out on behalf of the state the programs of the National Historic Preservation Act of
1966, to establish, maintain, and administer a state historic preservation program meeting the
requirements of an approved program and fulfilling the responsibilities of state historic
preservation programs as provided in s. 101(b) of that act;
Establishing professional standards for the preservation, exclusive of acquisition, of historic
resources in state ownership or control; and
Advising and assisting federal and state agencies, local governments, and organizations and
individuals in the recognition, protection, and preservation of the archaeological sites and
artifacts of this state.28
The division also has jurisdiction over unmarked human burial in order to initiate efforts for the proper
protection of the burial and the human skeletal remains and associated burial artifacts .29 The State
Archaeologist is responsible for determining whether an unmarked human burial is historically,
archaeologically, or scientifically significant.30 The State Archaeologist must make reasonable efforts to
identify and locate persons who can establish direct kinship, tribal, community, or ethnic relationships
with the individual or individuals discovered.31 If the State Archaeologist is unable to establish a kinship,
tribal, community, or ethnic relationship with the unmarked human burial, he or she must determine the
proper disposition of the burial and consult with persons with relevant experience, which include:
A human skeletal analyst.
Two Native American members of current state tribes recommended by the Governor's Council
on Indian Affairs, Inc., if the remains are those of a Native American;
Two representatives of related community or ethnic groups if the remains are not those of a
Native American; and
An individual who has special knowledge or experience regarding the particular type of the
unmarked human burial.32
Effect of Proposed Changes
The bill provides for state recognition for the Santa Rosa Band of the Lower Muscogee.
The bill clarifies that state recognition of an Indian tribe or band does not create any basis or authority
for a tribe to engage in prohibited gaming activity or to claim any interest in real estate or land that is
not already provided elsewhere in law. The bill also provides that state recognition does not grant any
authority or ability to consult on state undertakings by the Division of Historical Resources or activities
carried out by the State Archaeologist.
B. SECTION DIRECTORY:
28 See s. 267.031(5), F.S.
29 S. 872.05(5), F.S.
30 S. 872.05(6)(a), F.S.
31 S. 872.05(6)(b), F.S.
32 S. 872.05(6)(c), F.S.
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Section 1: Creates s. 285.195, F.S., relating to state recognition of Indian tribes and bands.
Section 2: 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:
None.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On January 19, 2024, the Local Administration, Federal Affairs, & Special Districts Subcommittee adopted
a strike-all amendment and reported the bill favorably as a committee substitute. The strike-all amendment
removed the Muscogee Nation of Florida and the Lower Chattahoochee Band of Yuchi Indians from the list
of state recognized tribes that would be created by the bill. The bill clarifies that state recognition of an
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Indian tribe or band does not create authority or ability to consult on state undertakings by the Division of
Historical Resources or activities carried out by the State Archaeologist.
This analysis is drafted to the committee substitute as passed by the Local Administration, Federal Affairs
& Special Districts Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 675 2024
1 A bill to be entitled
2 An act relating to state recognition of Indian tribes
3 and bands; creating s. 285.195, F.S.; providing for
4 state recognition of specified Indian tribes and
5 bands; providing construction; providing an effective
6 date.
7
8 Be It Enacted by the Legislature of the State of Florida:
9
10 Section 1. Section 285.195, Florida Statutes, is created
11 to read:
12 285.195 State recognition of Indian tribes and bands.—This
13 state recognizes the Santa Rosa Band of the Lower Muscogee.
14 State recognition of an Indian tribe or band under this section
15 may not be construed to create any basis or authority not
16 otherwise provided by law for an Indian tribe or band to
17 establish or promote any form of otherwise prohibited gaming
18 activity. State cultural recognition of an Indian tribe or band
19 under this section does not provide those recognized with any
20 authority or ability to consult on issues related to state
21 undertakings including those outlined in s. 267.031 or carried
22 out under rule 1A-46, F.A.C., and does not provide any authority
23 or ability to consult on activities carried out by the State
24 Archaeologist as specified in s. 872.05.
25 Section 2. This act shall take effect July 1, 2024.
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hb0675-01-c1
CS/HB 943
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 943 Pub. Rec./My Safe Florida Home Program
SPONSOR(S): Ethics, Elections & Open Government Subcommittee, LaMarca
TIED BILLS: IDEN./SIM. BILLS: SB 988
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 16 Y, 0 N Fortenberry Lloyd
2) Ethics, Elections & Open Government 14 Y, 0 N, As CS Rando Toliver
Subcommittee
3) Commerce Committee Fortenberry Hamon
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. Th e 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 record exemption for information contained in applications and inspection reports submitted
under the MSFH Program. The exemption applies retroactively to such reports submitted before, on, or after the
effective date of the bill.
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 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 .
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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(1)(b), F.S.
8 S. 215.5586(1)(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
Public Records
The Florida Constitution sets forth the state’s public policy regarding access to government records,
guaranteeing every person a right to inspect or copy any public record of the legislative, executive, and
judicial branches of government.16 The Legislature, however, may provide by general law an
exemption17 from public record requirements provided that the exemption passes by a two-thirds vote
of each chamber, states with specificity the public necessity justifying the exemption, and is no broader
than necessary to meet its public purpose.18
Current law also addresses the public policy regarding access to government records by guaranteeing
every person a right to inspect and copy any state, county, or municipal record, unless the record is
exempt.19 Furthermore, the Open Government Sunset Review (OGSR) Act 20 provides that a public
record exemption may be created, revised, or maintained only if it serves an identifiable public purpose
and the “Legislature finds that the purpose is sufficiently compelling to override the strong public policy
of open government and cannot be accomplished without the exemption.” 21 An identifiable public
purpose is served if the exemption meets one of the following purposes:
9 S. 215.5586(2), 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.
16 Art. I, s. 24(a), FLA . CONST.
17 A “public record exemption” means a provision of general law which provides that a specified record, or portion thereof,
is not subject to the access requirements of s. 119.07(1), F.S., or s. 24, Art. I of the Florida Constitution. See s.
119.011(8), F.S.
18 Art. I, s. 24(c), FLA . CONST.
19 See s. 119.01, F.S.
20 S. 119.15, F.S.
21 S. 119.15(6)(b), F.S.
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Allow the state or its political subdivisions to effectively and efficiently administer a
governmental program, which administration would be significantly impaired without the
exemption;
Protect sensitive personal information that, if released, would be defamatory or would
jeopardize an individual’s safety; however, only the identity of an individual may be exempted
under this provision; or
Protect trade or business secrets.22
Pursuant to the OGSR Act, a new public record exemption, or the substantial amendment of an existing
public record exemption, is repealed on October 2nd of the fifth year following enactment, unless the
Legislature reenacts the exemption.23
Effect of the Bill
The bill creates a public record exemption for information contained in applications and inspection
reports submitted under the MSFH Program. The exemption applies retroactively to such reports
submitted before, on, or after the effective date of the bill.. The bill also provides a statement of public
necessity as required by the Florida Constitution.
The exemption is 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.
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:
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:
22 Id.
23 S. 119.15(3), F.S.
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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 likely 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. The public necessity statement states that the Legislature
finds, in part, that the exemption is necessary because public availability of such information can be
used for identity theft, consumer scams, unwanted solicitations, or other invasive contact, and put
applicants of the My Safe Florida Home Program at increased risk for home invasions and reduced
privacy in their homes.
Breadth of Exemption
Article I, s. 24(c) of the Florida Constitution requires a newly created public record exemption to be
no broader than necessary to accomplish the stated purpose of the law. The 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 such applications and
inspection reports. As such, the bill appears to be no broader than necessary to ac complish 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.
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IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On January 24, 2024, the Ethics, Elections & Open Government Subcommittee adopted a strike-all
amendment and reported the bill favorably as a committee substitute. The strike-all amendment conformed
HB 943 to its Senate companion, SB 988. Prior to the adoption of the amendment, the two bills were
substantially identical except, SB 988 contained more specific language regarding the bill’s retroactive
application.
This analysis is drafted to the committee substitute as approved by the Ethics, Elections & Open
Government Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 943 2024
1 A bill to be entitled
2 An act relating to public records; creating s.
3 215.5587, F.S.; providing an exemption from public
4 records requirements for applications and home
5 inspection reports submitted by applicants to the
6 Department of Financial Services as a part of the My
7 Safe Florida Home Program; providing retroactive
8 applicability; providing for future legislative review
9 and repeal of the exemption; providing a statement of
10 public necessity; providing an effective date.
11
12 Be It Enacted by the Legislature of the State of Florida:
13
14 Section 1. Section 215.5587, Florida Statutes, is created
15 to read:
16 215.5587 My Safe Florida Home Program; public records
17 exemption.—
18 (1) Applications and home inspection reports submitted by
19 applicants as part of the My Safe Florida Home Program under s.
20 215.5586 are exempt from s. 119.07(1) and s. 24(a), Art. I of
21 the State Constitution.
22 (2) This exemption applies retroactively to applicat ions
23 and home inspection reports submitted before, on, or after the
24 effective date of this exemption.
25 (3) This section is subject to the Open Government Sunset
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hb0943-01-c1
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 943 2024
26 Review Act in accordance with s. 119.15 and shall stand repealed
27 on October 2, 2029, unless reviewed and saved from repeal
28 through reenactment by the Legislature.
29 Section 2. The Legislature finds that it is a public
30 necessity that My Safe Florida Home Program applications and
31 home inspection reports be made exempt from s. 119.07(1),
32 Florida Statutes, and s. 24(a), Article I of the State
33 Constitution. More than 99 percent of all home inspections and
34 grant applications are completed electronically or by phone.
35 Under current law, My Safe Florida Home Program applications and
36 home inspection reports are public records and can be obtained
37 by anyone for any purpose. These documents contain personal
38 information, including, but not limited to, names, e-mail
39 addresses, mailing addresses, and telephone numbers. This
40 information is unique to each individual and, when combined with
41 other personal identifying information, can be used for identity
42 theft, consumer scams, unwanted solicitations, or other invasive
43 contact. Additionally, the My Safe Florida Home Program
44 applications and home inspection reports contain detailed
45 descriptions and pictures of the inside and outside of
46 applicants' homes, including private areas, points of entry, and
47 other vulnerabilities. The public availability of these records
48 puts participants in the My Safe Florida Home Program at
49 increased risk of home invasions and reduces privacy in their
50 homes. Such risk may be significantly limited by making My Safe
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hb0943-01-c1
F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 943 2024
51 Florida Home Program applications and home inspection reports
52 exempt from public record requirements.
53 Section 3. This act shall take effect upon becoming a law.
Page 3 of 3
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hb0943-01-c1
CS/HB 1569
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 1569 Exemption from Regulation for Bona Fide Nonprofit Organizations
SPONSOR(S): Insurance & Banking Subcommittee, Grant
TIED BILLS: IDEN./SIM. BILLS: CS/SB 514
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 16 Y, 0 N, As CS Fletcher Lloyd
2) Commerce Committee Fletcher Hamon
SUMMARY ANALYSIS
In response to the 2008 financial crisis, Congress enacted the Secure and Fair Enforcement for Mortgage
Licensing Act of 2008 (SAFE Act). The SAFE Act and the regulations promulgated thereunder set forth the
minimum standards for the state licensing and registration of residential mortgage loan originators (MLOs). The
SAFE Act also requires that federal and state licensing and registration of residential MLOs be accomplished
through the same online registration system.
Florida adopted its registration requirements for MLOs in 2009. Florida has also adopted similar requirements
for the licensure and registration of mortgage brokers and mortgage lenders, exceeding the federal
requirements.
States are permitted to provide an exemption from the SAFE Act registration requirements to a bona fide
nonprofit organization and its employees if the state determines that the organization meets certain criteria.
Florida law does not currently provide an exemption from regulation for bona fide nonprofit organizations, but
does provide exemptions for certain other entities consistent with federal law.
The bill:
Creates an exemption from loan originator and mortgage broker regulation for bona fide nonprofit
organizations and their employees, provided certain conditions are met; this exemption is parallel to the
exemption provided in the SAFE Act for bona fide nonprofit organizations;
Provides that the Office of Financial Regulation (OFR) must determine whether an organization is a
bona fide nonprofit organization based on specified factors;
Requires OFR to periodically examine the books and activities of an organization and revoke an
organization’s exemption if it does not continue to meet the requirements; and
Provides the Financial Services Commission with rule-making authority to prescribe criteria and
processes required for OFR to make determinations regarding bona fide nonprofit organizations.
The bill has no fiscal impact on local government. It has an indeterminable fiscal impact on state government
revenues but no fiscal impact on state government expenses. The bill has an indeterminable positive fiscal
impact on the private sector.
The bill provides an effective date of 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:
Background
The S.A.F.E Act
The U.S. financial crisis of 2008 began as a housing crisis that first seemed to be localized in certain
states and in the subprime mortgage market.1 Eventually, however, the seemingly localized housing
collapse spread to the entire U.S. housing market, as house prices declined nationwide.2
Because the financial system was integral to the housing boom, the system was highly exposed to the
housing market, whose downturn would prove to be so severe that it threatened to bring down the
entire financial system with it in the absence of significant government intervention. 3 The 2008 financial
crisis, known as the “Great Recession,” became the most severe financial crisis since the Great
Depression, and its effects spread throughout the global economy.4
In response to the housing crisis, Congress enacted the Secure and Fair Enforcement for Mortgage
Licensing Act of 2008 (SAFE Act).5 The SAFE Act and the regulations promulgated thereunder:
Set forth the minimum standards for the state licensing and registration of residential mortgage
loan originators (MLOs);6
Prohibit individuals from engaging in the business of a residential MLO without first obtaining
and maintaining annually certain licensure and registration requirements;7 and
Require that federal and state licensing and registration of residential MLOs be accomplished
through the same online registration system, known as the Nationwide Mortgage Licensing
System and Registry (NMLSR).8
The objectives of the NMLSR under the SAFE Act include aggregating and improving the flow of
information to and between regulators; providing increased accountability and tracking of MLOs;
enhancing consumer protections by supporting anti-fraud measures; and providing consumers with
easily accessible information at no charge regarding the employment history of, and publicly
adjudicated disciplinary and enforcement actions against, MLOs. 9
1 Cynthia Angell and Krishna Patel, Crisis and Response: An FDIC History, 2008-2013, Federal Deposit Insurance
Corporation (last updated June 12, 2023), at xiv. Available at https://www.fdic.gov/bank/historical/crisis/chap1.pdf (last
visited Jan. 20, 2024).
2 Id.
3 Id.
4 Id.
5 See 12 U.S.C. Sec. 5101–5116, Title V of the Housing and Economic Recovery Act of 2008 (Pub. L. 110–289, 122 Stat.
2654, 12 U.S.C. 5101 et seq.) as amended by Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act
(Dodd-Frank Act) (Pub. L. No. 111–203, 124 Stat. 1376).
6 A mortgage loan originator is an individual who takes a residential mortgage loan application and offers or negotiates
terms of a residential mortgage loan for compensation or gain. See 12 C.F.R. Sec. 1007.102.
7 For an individual who is an employee of a covered financial institution, the individual must obtain and annually maintain
registration as a registered mortgage loan originator and a unique identifier (federal registration). For all other individua ls,
they must obtain and annually maintain a state license and registration as a state-licensed mortgage loan originator, and a
unique identifier (state licensing/registration). See Consumer Financial Protection Bureau, Secure and Fair Enforcement
for Mortgage Licensing Act: Manual V.2, CFPB Laws and Regulation (Oct. 1, 2012),
https://files.consumerfinance.gov/ f/documents/102012_c fpb_secure-fair-enforcement-for-mortgage-licensing-safe-
act_procedures.pdf (last visited Jan. 20, 2024).
8 Consumer Financial Protection Bureau, Secure and Fair Enforcement for Mortgage Licensing Act: Manual V.2, CFPB
Laws and Regulation (Oct. 1, 2012), https://files.consumerfinance.gov/f/doc uments/102012_cfpb_secure-fair-
enforcement-for-mortgage-licensing-safe-act_procedures.pdf (last visited Jan. 20, 2024).
9 12 U.S.C. Sec. 5101.
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State Regulation of Loan Originators, Mortgage Brokers, and Mortgage Lenders
Soon after the enactment of the SAFE Act, states began adopting licensure and registration
requirements for residential MLOs pursuant to the requirements of the SAFE Act. 10 Florida adopted its
requirements for MLOs 11 in 2009 with the enactment of s. 494.00312, F.S.12 In addition to MLOs,
however, Florida also adopted similar requirements for the licensure and registration of mortgage
brokers 13 and mortgage lenders,14 exceeding the federal requirements.
The Office of Financial Regulation (OFR) regulates state-chartered banks, credit unions, other financial
institutions, finance companies, and the securities industry. 15 The OFR’s Division of Consumer Finance
licenses and regulates various aspects of the non-depository financial services industries, including
individuals and businesses engaged in the mortgage business. 16 Specifically, under ch. 494, F.S., OFR
licenses and regulates MLOs, mortgage brokers, and mortgage lenders.
An individual or entity applying for licensure under ch. 494, F.S., is required to meet certain conditions
and pay a nonrefundable application fee in the following amounts:
For a mortgage broker license, an applicant must submit a nonrefundable application fee of
$425, and an additional $100 nonrefundable fee if the applicant meets certain other criteria;17
For a loan originator license, an applicant must submit a nonrefundable application fee of $195,
and an additional $20 nonrefundable fee if the applicant meets certain other criteria; 18 and
For a mortgage lender license, an applicant must submit a nonrefundable application fee of
$500, and an additional $100 nonrefundable fee if the applicant meets certain other criteria. 19
10 National Reverse Mortgage Lenders Association, States Move Aggressively to Implement SAFE Act and Improve
Mortgage Supervision, https://www.nrmlaonline.org/app_assets/public/ef8c2414-00da-4cff-8c69-
e45d2ca45a82/SAFE%20Act%20Updat e.pdf (last visited Jan. 20, 2024).
11 Florida statute defines “loan originator” as an individual who, directly or indirectly, solicits or offers to solicit a mortgage
loan, accepts or offers to accept an application for a mortgage loan, negotiates or offers to negotiate the terms or
conditions of a new or existing mortgage loan on behalf of a borrower or lender, or negotiates or offers to negotiate the
sale of an existing mortgage loan to a noninstitutional investor for compensation or gain. The term includes an individual
who is required to be licensed as a loan originator under the SAFE Act. The term does not include an employee of a
mortgage broker or mortgage lender whose duties are limited to physically handling a completed application form or
transmitting a completed application form to a lender on behalf of a prospective borrower. See s. 494.001(18), F.S.
12 See ch. 2009-241, L.O.F.
13 Florida statute defines “mortgage broker” as a person conducting loan originator activities through one or more licensed
loan originators employed by the mortgage broker or as independent contractors to the mortgage broker. See s.
494.001(23), F.S.
14 Florida statute defines “mortgage lender” as a person making a mortgage loan or servicing a mortgage loan for others,
or, for compensation or gain, directly or indirectly, selling or offering to sell a mortgage loan to a noninstitutional investor.
See s. 494.001(24), F.S.
15 S. 20.121(3)(a)2. and (d), F.S. OFR is housed within the Financial Services Commission (Commission). The
Commission, comprised of the Governor and Cabinet, appoints OFR’s Commissioner.
16 Office of Financial Regulation, Division of Consumer Finance,
https://flofr.gov/sitePages/DivisionOfConsumerFinance.htm#:~:text=The%20Division%20of% 20Consumer%20Finance, det
ermine%20compliance%20with% 20Florida%20law. (last visited Jan. 20, 2024).
17 S. 494.00321(1)(c), F.S.
18 S. 494.00312(2)(e), F.S.
19 S. 494.00611(2)(c), F.S.
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Exemption from Regulation: Bona Fide Nonprofit Organizations
Notwithstanding the policies of the SAFE Act, federal regulations provide that a state is not required to
impose registration requirements on certain individuals.20 Among those exemptions, states are
permitted to provide an exemption from registration requirements under the SAFE Act to a bona fide
nonprofit organization and its employees if, under criteria and pursuant to processes established by the
state, the state supervisory authority determines that the organization:
Has the status of a tax-exempt organization under section 501(c)(3) of the Internal Revenue
Code of 1986;
Promotes affordable housing or provides homeownership education, or similar services;
Conducts its activities in a manner that serves public or charitable purposes, rather than
commercial purposes;
Receives funding and revenue and charges fees in a manner that does not incentivize it or its
employees to act other than in the best interests of its clients;
Compensates its employees in a manner that does not incentivize employees to act other than
in the best interests of its clients;
Provides or identifies for the borrower residential mortgage loans with terms favorable to the
borrower and comparable to mortgage loans and housing assistance provided under
government housing assistance programs; and
Meets other standards that the state determines are appropriate.21
A state must periodically examine the books and activities of an organization it classifies as a bona fide
nonprofit organization and revoke its status as a bona fide nonprofit organization if it does not continue
to meet the criteria described above.22 Moreover, for residential mortgage loans to have terms that are
favorable to the borrower, a state must determine that the terms are consistent with loan origination in a
public or charitable context, rather than a commercial context.23
Florida law does not currently provide an exemption from regulation for bona fide nonprofit
organizations, but does provide exemptions for certain other individuals and entities consistent with
federal law, provided certain criteria are met.24
Effect of the Bill
The bill creates an exemption under Florida law parallel to the exemption provided in the SAFE Act for
bona fide nonprofit organizations. For an organization to be considered a bona fide nonprofit
organization and qualify for the exemption, the bill requires OFR to determine, pursuant to criteria and
processes established by rule, that the organization satisfies all of the following criteria:
Has the status of a tax-exempt organization under s. 501(c)(3) of the Internal Revenue Code of
1986;
Promotes affordable housing or provides homeownership education or similar services;
Conducts its activities in a manner that serves public or charitable purposes rather than
commercial purposes;
Receives funding and revenue and charges fees in a manner that does not incentivize it or its
employees to act other than in the best interests of its clients;
Compensates its employees in a manner that does not incentivize employees to act other than
in the best interests of its clients; and
Provides or identifies for borrowers residential mortgage loans with terms favorable to the
borrower and comparable to mortgage loans and housing assistance provided under
government housing assistance programs.
For residential mortgage loans to be considered as having terms that are favorable to the borrower, the
20 See 12 C.F.R. Sec. 1008.103(e) for a full list of exempt individuals.
21 12 U.S.C. Sec. 1008.103(e)(7)(ii).
22 12 U.S.C. Sec. 1008.103(e)(7)(iii).
23 12 U.S.C. Sec. 1008.103(e)(7)(iv).
24 See s. 494.00115, F.S., for a full list of individuals and entities exempt from regulation under ch. 494, F.S.
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bill requires OFR to determine that the terms are consistent with loan origination in a public or
charitable context, rather than a commercial context.
Additionally, the bill:
Requires OFR to periodically examine the books and activities of an organization and revoke an
organization’s exemption if it does not continue to meet the requirements; and
Provides the Financial Services Commission (Commission) with rule-making authority to
prescribe criteria and processes required for OFR to make determinations regarding bona fide
nonprofit organizations.
B. SECTION DIRECTORY:
Section 1. Amends s. 494.00115, F.S., relating to exemptions.
Section 2. Provides an effective date of July 1, 2024.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
The bill has an indeterminable negative fiscal impact on OFR to the extent that entities and
employees of entities that qualify for the proposed exemption will no longer pay application fees
associated with licensure requirements under ch. 494, F.S. The total number of nonprofit
organizations that are eligible for the exemption, however, is unclear.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Entities and employees of entities that meet the criteria for the proposed exemption will likely benefit
financially by not having to pay costs associated with licensure requirements under ch. 494, F.S. The
total number of nonprofit organizations that are eligible for the exemption is unclear.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
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DATE: 1/26/2024
Not applicable. This bill does not appear to affect county or municipal governments.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill provides the Commission with rule-making authority to prescribe criteria and processes
required for OFR to make determinations regarding bona fide nonprofit organizations.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On January 25, 2024, the Insurance & Banking Subcommittee considered the bill, adopted one
amendment, and reported the bill favorably as a committee substitute. The amendment:
Conformed the provisions of the bill to the exemption provided in the SAFE Act for bona fide
nonprofit organizations and their employees from loan originator and mortgage broker regulation;
Clarified the conditions under which an organization and an employee may be exempt from the
SAFE Act regulations adopted by Florida law;
Provided that OFR must determine whether an organization is a bona fide nonprofit organization
based on specified factors;
Required OFR to periodically examine the books and activities of an organization and revoke an
organization’s exemption if it does not continue to meet the requirements; and
Provided the Commission with rule-making authority to prescribe criteria and processes required for
OFR to make determinations regarding bona fide nonprofit organizations.
The analysis is drafted to the committee substitute as passed by the Insurance & Banking Subcommittee.
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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
CS/HB 1569 2024
1 A bill to be entitled
2 An act relating to an exemption from regulation for
3 bona fide nonprofit organizations; amending s.
4 494.0011, F.S.; authorizing the Financial Services
5 Commission to adopt rules prescribing criteria and
6 processes for determining whether an organization is a
7 bona fide nonprofit organization for a specified
8 purpose; amending s. 494.00115, F.S.; providing
9 exemptions from certain regulation for bona fide
10 nonprofit organizations and certain employees of a
11 bona fide nonprofit organization that meet specified
12 criteria; requiring the Office of Financial Regulation
13 to make a specified determination; requiring the
14 office to make such determination based on terms
15 consistent with loan origination in a public or
16 charitable context; requiring the office to
17 periodically examine the books and activities of an
18 organization and to revoke its status as a bona fide
19 nonprofit organization under certain circumstances;
20 providing an effective date.
21
22 Be It Enacted by the Legislature of the State of Florida:
23
24 Section 1. Paragraph (b) of subsection (2) of section
25 494.0011, Florida Statutes, is amended to read:
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26 494.0011 Powers and duties of the commission and office.—
27 (2) The commission may adopt rules to administer parts I,
28 II, and III of this chapter, including rules:
29 (b) Relating to compliance with the S.A.F.E. Mortgage
30 Licensing Act of 2008, including rules to:
31 1. Require loan originators, mortgage brokers, mortgage
32 lenders, and branch offices to register through the registry.
33 2. Require the use of uniform forms that have been
34 approved by the registry, and any subsequent amendments to such
35 forms if the forms are substantially in compliance with the
36 provisions of this chapter. Uniform forms that the commission
37 may adopt include, but are not limited to:
38 a. Uniform Mortgage Lender/Mortgage Broker Form, MU1.
39 b. Uniform Mortgage Biographical Statement & Consent Form,
40 MU2.
41 c. Uniform Mortgage Branch Office Form, MU3.
42 d. Uniform Individual Mortgage License/Registration &
43 Consent Form, MU4.
44 3. Require the filing of forms, documents, and fees in
45 accordance with the requirements of the registry.
46 4. Prescribe requirements for amending or surrendering a
47 license or other activities as the commission deems necessary
48 for the office's participation in the registry.
49 5. Prescribe procedures that allow a licensee to challenge
50 information contained in the registry.
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51 6. Prescribe procedures for reporting violations of this
52 chapter and disciplinary actions on licensees to the registry.
53 7. Prescribe criteria and processes for determining if an
54 organization is and remains a bona fide nonprofit organization
55 for the purpose of determining whether the organization and its
56 employees who are acting as loan originators are exempt from
57 regulation under this chapter pursuant to s. 494.00115.
58 Section 2. Subsections (3), (4), and (5) of section
59 494.00115, Florida Statutes, are renumbered as subsections (4),
60 (5), and (6), respectively, and a new subsection (3) is added to
61 that section, to read:
62 494.00115 Exemptions.—
63 (3)(a) As provided in this subsection, a bona fide
64 nonprofit organization and an employee of a bona fide nonprofit
65 organization who acts as a loan originator only wit h respect to
66 his or her work duties for the bona fide nonprofit organization
67 and who acts as a loan originator only with respect to
68 residential mortgage loans with terms that are favorable to the
69 borrower, are exempt from regulation under this chapter.
70 1. For an organization to be considered a bona fide
71 nonprofit organization under this subsection, the office must
72 determine, pursuant to criteria and processes established by
73 rule, that the organization satisfies all of the following
74 criteria:
75 a. Has the status of a tax-exempt organization under s.
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76 501(c)(3) of the Internal Revenue Code of 1986.
77 b. Promotes affordable housing or provides homeownership
78 education or similar services.
79 c. Conducts its activities in a manner that serves public
80 or charitable purposes rather than commercial purposes.
81 d. Receives funding and revenue and charges fees in a
82 manner that does not incentivize it or its employees to act
83 other than in the best interests of its clients.
84 e. Compensates its employees in a manner that does not
85 incentivize employees to act other than in the best interests of
86 its clients.
87 f. Provides or identifies for the borrower residential
88 mortgage loans with terms favorable to the borrower and
89 comparable to mortgage loans and housing assistance prov ided
90 under government housing assistance programs.
91 2. For residential mortgage loans to be deemed under this
92 subsection to have terms that are favorable to the borrower, the
93 office must determine that the terms are consistent with loan
94 origination in a public or charitable context, rather than a
95 commercial context.
96 (b) The office must periodically examine the books and
97 activities of an organization that it determines is a bona fide
98 nonprofit organization and revoke its status as a bona fide
99 nonprofit organization if it does not continue to meet the
100 criteria specified in paragraph (a).
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101 Section 3. This act shall take effect July 1, 2024.
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