During the 2004 legislative session, 1081 bills were filed in the House and 1598 in the Senate.  FICPA tracked 840 total bills.  135 were on the priority tracking list, 80 contained language with “CPA” in them and nearly 100 were reviewed by FICPA Sections.  In total, only 484 general bills passed by the end of the 2004 regular session.  Following is a summary of other bills of interest in addition to the priority legislation supported by the FICPA.

BOA Appropriations
As in previous years, the Minority Scholarship Program was funded at the full $100,000 and the Unlicensed Activity ads at up to $200,000 in both the House and Senate budgets.  The Governor’s budget recommendations included $100,000 for the Minority Scholarship Program and the Unlicensed Activity ads. The $58 billion budget was signed by the Governor on May 28, 2004.

Homeowner Association Audits
Bills were drafted based on recommendations from the Governor’s Task Force on Homeowners Associations. Among other things, this legislation will now require compilations for homeowners associations with revenues of more than $100,000 but less than $200,000; reviews for revenues of more than $200,000 but less than $400,000; and audits for associations with revenues over $400,000.  These financial statements mirror the current requirements for condominium associations.
 
With provisions from several pieces of legislation combined by the end of session into SB 1184 by Sen. Skip Campbell, and SB 2984 by Sen. Jeff Atwater, both bills will make significant changes to both condominium and homeowners association governance.  Among other issues, both bills contain identical language requiring financial statements for homeowners associations as described above. Both bills were signed by the Governor on June 23, 2004. 

Unclaimed Property
As originally drafted, HB 1039, sponsored by Rep. Will Kendrick, D-Carrabelle, and SB 2288, sponsored by Sen. Charlie Clary, R-Destin, proposes a process for the claimant’s representative to register with the department of financial services as a claimant’s representative by providing information such as CPA license and firm information.  Changes in SB 2994 will require CPAs, attorneys and private investigators claiming unclaimed property to register with the DFS and be subject to administrative enforcement actions by DFS. 

Actions that could subject a CPA, attorney or private investigator to actions by DFS include items such as fraud, misrepresentation, gross negligence, deceit, illegal or excessive charges, misleading solicitation, failure to maintain records required by law, and criminal conduct.  Upon finding of any of the above actions, the DFS may revoke or suspend registration, issue a reprimand, impose a fine up to $2,000, or “prohibit any person from being a director, officer, agent, employee, or ultimate equitable owner of a 10-percent or greater interest in an employer of a registrant.”  DFS will also have the ability to adopt administrative rules related to disciplinary guidelines.

Having been approved by the Legislature, SB 2994 is awaiting final action by the Governor. SB 2994

OTHER BILLS THAT PASSED

Governmental Accountability
HB 547 and SB 708 address issues of local-government financial accountability. Among other issues, it clarifies the state Auditor General’s authority to audit entities that receive an appropriation from the state; revises the Local Government Financial Emergencies Act to: (1) reflect new accounting standards; (2) provide for an improved process for designating local governments as being in a financial emergency; and (3) clarify the applicability of the financial emergency law to district school boards; and provides procedures for amending budgets of municipalities and special districts. SB 708 passed the legislature and was approved by the Governor on June 17, 2004. SB 708

Campaign Financing
SB 2346 is the "Florida Advertising Campaign Exposure Act"; revises registration requirements of political committees; requires membership dues of committees of continuous existence to be reported in the same manner as regular contributions, with specified exemptions; modifies  prohibitions on activities of committees of continuous existence;   creates exemptions to disclaimer requirements for certain public policy  advertisements; provides exceptions to prohibition against making certain contributions or expenditures. SB 2346 was approved by the Governor on May 26, 2004. SB 2346

Division of Funeral/Cemetery/Consumer Services
SB 528 removes the Funeral and Cemetery Services Bureau from the Consumer Services Division of the Department of Financial Services and establishes the Funeral, Cemetery and Consumer Services Division and the Funeral, Cemetery, and Consumer Services Board within the Department. This bill requires that the new regulatory board have one of the consumer members be a Certified Public Accountant. SB 528 was approved by the Governor on June 17, 2004. SB 528

Corporate Piggy Back (Bonus Depreciation)
SB 1826 is the corporate “piggyback” bill, and provides for the adoption by Florida of the 2004 version of the Internal Revenue Code as passed by Congress. As part of a national economic stimulus package, the code allows states to provide a controversial tax break that could encourage more businesses to come to Florida. SB 1836 was approved by the Governor on May 28, 2004. SB 1826

OTHER BILLS THAT DIED

Streamlined Sales Tax
SB 1072 and HB 1355 would bring Florida law into compliance with the provisions of the Streamlined Sales and Use Tax Agreement and enable Florida to petition for membership in the agreement. To participate in the agreement, states must harmonize their sale and use tax laws with other states as set forth in the agreement. SB 1072 passed the full Senate and all committees unanimously but died in messages to the House. HB 1355 was never voted on and died in committee.

Substitute Communications Systems
Senate bill 2302 and HB 735 would have repealed the existing Substitute Communications Tax statute.  During rulemaking by DOR, many FICPA members raised concerns that taxes could be imposed on two-way radios, LANs, two connected computers, wireless dispatch and many similar communications systems deemed “substitute” from what is already taxed.

SB 2302 deletes a provision regarding the manner in which tax on gross receipts for communications services is applied to substitute communications systems. It also deletes provisions authorizing the imposition of local communications services tax on substitute communications systems, and of gross receipts tax on actual costs of operating these systems.  Without the passage of this repeal, we could see one of the largest tax increases in recent memory. Although the language contained in SB 2302 was amended on to another bill late in the session, both bills died on the calendar.

Uniform Principal and Income Act
Although this bill was mainly clean-up language from last year, we wanted to make sure the Bar and Bankers were not rescinding our position at all.  Former legal counsel on this issue reviewed the language thoroughly before we signed off.  With a joint whitepaper, the bill moved very quickly.  Perhaps, it was also because no one clearly understood exactly what the original bill does based on the technical subject nature.

SB 2926 and HB 1755 would have revised the Uniform Principal and Income Act by including additional investment instruments within definition of term "security account"; revising powers conferred upon trustee; specifying circumstances in which court authorization is not required for trustee to exercise his or her power when conflict of interest exists; revising circumstances in which trustee is prohibited from making adjustment when such adjustment would benefit the trustee. SB 2926 died on the calendar. HB 1755 died in committee.

Scholarship Accountability
HB 313 and SB 2882 suggested sweeping changes geared toward more financial accountability on the corporate tax credit scholarship and the McKay scholarship.  We ended up getting very involved in this issue because the bill initially required some sort of attestation from a CPA as to the financial stability of scholarship funding organizations (SFO) that did not seem to be tied to any professional standard. 

In addition, language drafted included a reference to the preparation of a financial statement for not-for-profit organizations and an incorrect reference to both GAAP and GAAS.  While the Auditor General’s office indicated the SFOs were subject to the Florida Single Audit Act, the department of Education disagreed. This bill died on the calendar.

OPPAGA/Auditor General Merger
For the third year in a row legislation drafted in HB 1305 would have combined the Office of the Auditor General and the Office of Program Policy Analysis and Government Accountability (OPPAGA) into a newly created Government Accountability Office. HB 1305 died in committee.

Communication Services Tax
HB 1237 and SB 2322 provide requirements for dealers making certain sales for resale. It also provides procedures and limitations and provides responsibilities of the Florida Department of Revenue. These bills would have revised provisions limiting certain maximum rates and includes certain fees and costs within the prohibition against public bodies from levying or collecting certain taxes from dealers or purchasers of communications service. HB 1237 died in committee and SB 2322 died on the calendar.

DOR Tax Administration Package
Among numerous other provisions, SB 2218 would have allowed a personal representative of an estate that is not subject to tax under the estate-tax law to execute an affidavit attesting that the estate is not taxable. It would have provided for taxation of sales of timeshare interests in timeshare plans, and also provided that a person who willfully attempts in any manner to evade or defeat a tax or fee imposed under the Tax on Sales, Use and Other Transactions Law commits a third-degree felony. SB 2218 passed the Senate unanimously, but died in messages to the House.

Tax Administration/Prime Rate
HB 391 and SB 1668 would have revised the method that interest rates on tax deficiencies are calculated for corporate income taxes and other taxes. Current law provides that the interest rate is the adjusted prime rate charged by banks plus four percentage points. This bill changes the rate to the adjusted prime rate charged by banks. Both bills died in committee.

Securities Transactions
SB 622 authorizes Florida’s Attorney General to enforce certain provisions, initiate certain actions, and bring civil actions to recover civil penalties, costs and attorney’s fees. It increases administrative penalties for certain violations and increases criminal penalty for violations of specified sections of the Securities Transactions chapter of the Florida Statutes. This bill died in committee.