Florida Senate - 2025 COMMITTEE AMENDMENT
Bill No. SB 498
Ì651292)Î651292
LEGISLATIVE ACTION
Senate . House
Comm: RCS .
03/12/2025 .
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The Committee on Judiciary (Grall) recommended the following:
1 Senate Substitute for Amendment (263874) (with title
2 amendment)
3
4 Delete everything after the enacting clause
5 and insert:
6 Section 1. Section 655.97, Florida Statutes, is created to
7 read:
8 655.97 Lawyer or law firm trust account interest rates.—
9 (1) A financial institution may hold funds in an interest
10 bearing trust account of a lawyer or law firm in which the
11 institution remits interest or dividends on the balance of the
12 deposited funds to an entity established by the Supreme Court
13 for the purpose of providing or facilitating the provision of
14 free legal services to low-income individuals or other purposes
15 authorized by the Supreme Court. If the institution holds such
16 an account, it must quarterly select one of the two interest
17 rate alternatives to determine the interest it will pay to the
18 entity established by the Supreme Court:
19 (a) The first interest rate alternative must be set at the
20 highest interest rate or dividend generally available from the
21 institution to its comparable business or consumer accounts or
22 nonmaturing deposit accounts, provided that the trust account
23 meets or exceeds the same minimum balance or other account
24 requirements.
25 1. If a financial institution chooses to pay the rate
26 alternative provided in this paragraph, it must submit a rate
27 validation sheet and affidavit to the Chief Financial Officer by
28 the tenth day of each quarter attesting that it will pay at
29 least the same interest on the lawyer or law firm trust accounts
30 that it is paying on its comparable business or consumer
31 accounts or nonmaturing deposit accounts.
32 2. The affidavit must attest that the rate information
33 submitted on the rate validation sheet is true and factual.
34 3. The Chief Financial Officer shall verify that the rate
35 validation sheet and affidavit have been received by the
36 Department of Financial Services.
37 (b) The second interest rate alternative must be set at 25
38 percent of the federal funds target rate determined by the
39 Federal Open Market Committee of the Federal Reserve System or
40 0.25 percent, whichever is higher, net of fees.
41 1. Each December 1, March 1, June 1, and September 1, the
42 Chief Financial Officer shall determine the interest rate of the
43 second interest rate alternative. The rate alternative
44 determined by the Chief Financial Officer is effective on the
45 following January 1, April 1, July 1, and October 1,
46 respectively.
47 2. Within 3 days after determining the interest rate under
48 this paragraph, the Chief Financial Officer shall inform the
49 entity established by the Supreme Court of the determined
50 interest rate for the upcoming quarter.
51 (2) This section does not apply to interest rates
52 established by written contract or obligations unrelated to the
53 trust accounts described by this section.
54 Section 2. This act shall take effect upon becoming a law.
55
56 ================= T I T L E A M E N D M E N T ================
57 And the title is amended as follows:
58 Delete everything before the enacting clause
59 and insert:
60 A bill to be entitled
61 An act relating to trust fund interest for purposes
62 approved by the Supreme Court; creating s. 655.97,
63 F.S.; establishing two quarterly interest rate
64 alternatives for financial institutions to pay to an
65 entity established by the Supreme Court for the
66 purpose of providing free legal services to low-income
67 individuals and other purposes approved by the Supreme
68 Court; requiring financial institutions to attest that
69 it will pay a certain interest rate; requiring the
70 Chief Financial Officer to set an interest rate;
71 providing applicability; providing an effective date.
72
73 WHEREAS, in September 1981, the Florida Supreme Court
74 implemented the nation’s first Interest on Trust Accounts (IOTA)
75 Program, establishing a vital funding source for civil legal
76 aid, justice system improvements, and public service programs
77 for law students, and
78 WHEREAS, Funding Florida Legal Aid (FFLA), formerly known
79 as The Florida Bar Foundation, and the Florida Bankers
80 Association cooperated for decades to sustain the program and
81 encourage participation, and
82 WHEREAS, in March 2023, the Florida Supreme Court adopted
83 new rules requiring lawyers to secure interest rates based on
84 the Wall Street Journal Prime Rate, compelling banks to pay
85 higher rates for IOTA accounts than for similar accounts, and
86 WHEREAS, 44 states, the District of Columbia, and Puerto
87 Rico have mandatory IOTA programs modeled after Florida’s pre
88 2023 system, while 5 states and the U.S. Virgin Islands operate
89 voluntary or opt-out programs, and
90 WHEREAS, the 2023 rule change made Florida an outlier
91 compared to other jurisdictions where IOTA rates are typically
92 benchmarked against interest-bearing checking account rates, and
93 WHEREAS, the Wall Street Journal Prime Rate serves as a
94 benchmark for lending and is not used to set deposit account
95 rates, and
96 WHEREAS, the 2023 rule change resulted in banks paying
97 higher rates on funds in IOTA accounts, resulting in record
98 revenues, exceeding $279 million, paid to FFLA during the 2023
99 2024 fiscal year, nearly four times the prior peak rate, and far
100 exceeding average annual interest revenues, and
101 WHEREAS, in October 2024, the Florida Supreme Court
102 authorized FFLA to hold nearly $143 million in reserve, and
103 WHEREAS, it is in the best interests of this state for the
104 Legislature to establish statutory benchmarks for IOTA rates to
105 ensure regulatory safety, fairness, and sustainability, similar
106 to the quarterly interest rate determinations made by the Chief
107 Financial Officer for interest paid on court judgments, NOW,
108 THEREFORE,