Legislative Mas
The power of experience
April 26, 2013
The Side Bar
Bill Seeks to Strip Securities Regulator of Power to Deny New Branch Offices to Broker-Dealers and Investment Advisers

By Michael Underwood
Mike Underwood 

A hallmark of Florida's notoriously strict regulation of investment professions may soon be no more. Florida is one of only eight jurisdictions in the United States that require securities broker-dealers and investment advisers to obtain approval of the state securities regulator before conducting business from a new branch office in the state. Moreover, Florida is unique in providing investors a right to rescind otherwise lawful purchases of securities made through an unlicensed branch office. Class-action lawsuits on behalf of investors so "injured" are a bane for the national securities industry, which often expands into Florida unaware of the unusual law.

 

The Legislature gave the industry some relief in 2000 by taking away the right of rescission for securities purchases deemed unlawful only because the annual license for the branch office had not been renewed. This year a coalition lead by the Financial Services Institute and including the Florida Securities Dealers Association and the Securities Industry and Financial Markets Association pushed for further reform. With passage by the Florida House of Representatives this week of CS/HB 783, Florida may join the majority of jurisdictions that do not empower the regulator to disapprove new branch offices.

 

Should the bill become law, which now requires Senate passage and the Governor's approval, securities dealers and investment advisers required to register their Florida business locations would need only notify the Florida Office of Financial Regulation of the expansion.  

 

        

  

 

 

  

 Mr. Underwood's Bio 

 

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Legislative Update

 

Budget Update

Unresolved budget issues have been bumped up to the full appropriations chairs, Senator Negron and Representative McKeel, this past Monday. The conference chairs have only made one offer each in an effort to reconcile the remaining budget differences between the chambers. Some of the major issues which remain unresolved include:

 

Raises for Teachers - The Governor supports $2,500 across-the-board pay raise for schoolteachers; the legislature has offered a lessor amount in raises and a portion in merit pay to date.

  

Diagnosis Related Group Reimbursements - The new methodology for hospital reimbursement of Medicaid inpatient services remains undecided between the House and Senate. The two competing models will result in winners and losers among hospitals.

 

Intergovernmental Transfers (IGTs) - The Senate is proposing sweeping 45% of IGTs to all hospitals in the state. Certain public hospitals and local governments offer tax dollars or revenues to draw down federal matching dollars through the Low Income Pool program. These dollars are utilized to fund uninsured and charity care by hospitals and the contributing hospitals receive additional federal dollars. The proposed sweep would potentially cost contributing hospitals millions of dollars in lost IGTs while increasing funding for hospitals that do not contribute.

 

Early Steps for Children with Disabilities- The program is designed to provide Florida's infants and toddlers (up to 3 years) who have a developmental delay with early intervention services and support that improve a child's chances to develop to their full potential. The Senate has included $3 million in their budget for additional Early Steps funding, while the House has not.

 

Florida Resident Access Grant - The House and Senate have proposed differing amounts for the grant program that Florida's independent, non-profit colleges and universities use to partially offset tuition costs.

 

The finalized budget is due on Tuesday, April 30th for the mandatory 72 hour cool off period in order for Session to end on time, May 3rd.

 
Affordable Housing Funding from Mortgage Settlement
SB 1852 National Mortgage Settlement, was amended on Wednesday in the Senate to include the agreed to provisions of the National Mortgage Settlement by the House and Senate. From the $200 million settlement, funds for affordable housing  are distributed as follows:
  • $25 million for reduced rent on new or existing rental units for the elderly through the State Apartment Incentive Loan Program (SAIL)
  • $25 million for reduced rent on new or existing rental units for individuals with disabilities through SAIL
  • $10 million for the construction or rehabilitation of units through SAIL
  • $40 million for the State Housing Initiative Program (SHIP)
  • $10 million to the Florida Housing Finance Corporation (FHFC) for competitive grants to provide housing for homeless persons
  • $10 million to the FHFC for competitive grants for housing projects targeting persons with developmental disabilities

The amendment to SB 1852 was a prior agreement between the House and Senate, so the bill will most likely pass the House unchanged.

 
RESTORE ACT Amendment
Senate leadership has amended SB 1024 Department of Economic Opportunity to include a new provision creating Triumph Gulf Coast Inc., a nonprofit corporation administratively housed within the DEO, designed to create and administer the Recovery Fund as a long-term source of revenue, the principal of which will decline over a 30-year period in equal amounts each year. A portion of the principal and any earnings (income generated from investments and interest) will be available each year to make awards to programs and projects in the disproportionately affected counties. The principal of the Recovery Fund is made up of 75 percent of all funds recovered by the Attorney General for economic damage to the state resulting from the Deepwater Horizon oil spill.
  

The bill creates a 5-member board of directors for Triumph Gulf Coast, Inc., from the private sector chosen by the Governor, Attorney General, Chief Financial Officer, Senate President, and Speaker of the House of Representatives. The board will have final say on which projects will be funded in the 8 disproporationately affected counties (Bay, Escambia, Franklin, Gulf, Okaloosa, Santa Rosa, Walton, and Wakulla) from the recovery Fund estimated to bring $1 to $5 billion to Florida.

  
The bill apparently does not affect funds distributed to any county under the RESTORE Act.

Negron Health Plan Amendment Voted Down in House

The Negron alternative Medicaid expansion plan which would provide health insurance to over 1 million uninsured Floridians was voted down along party line (45-Yeas 74-Nays) in the House on Thursday.

 

Rep. Fasano (R-New Port Richey) offered an amendment to HB 7169, which was the substance of the Negron Plan contained in SB 1816.  The debate on the amendment took over 4 hours underscoring the intense feelings on both sides of the debate.

 

The Negron Plan offers much broader coverage to the uninsured up to 138% of the Federal Poverty Level (FPL) and is expected to draw down $51 billion in federal funding over 10 years. In contrast, the House plan by Rep. Corcoran (R-Lutz), is much more limited only applying to parents and individuals with disabilities under 100% of FPL not eligible for Medicaid. HB 7169 is expected to cover an additional 115,000 Floridians and would not draw down federal dollars targeted for Medicaid Expansion and would require state funding of $25 million annually.

 

*Portions of updates provided by Senate and House staff analyses

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