FL H0173

Creates s. 655.97, F.S., requiring the Chief Financial Officer to establish two interest rate alternatives for the Interest on Trust Accounts (IOTA) Program on a quarterly basis (December 1, March 1, June 1, and September 1), with each rate taking effect the following quarter; participating financial institutions must select one of the two alternatives annually.

The first rate alternative is set at the highest interest rate or dividend the institution generally offers to comparable non-IOTA business, consumer, or nonmaturing deposit accounts, subject to the same minimum balance requirements; institutions choosing this option must submit a rate validation sheet to the Chief Financial Officer.

The second rate alternative is set at 25 percent of the federal funds target rate or 0.25 percent, whichever is higher, net of fees; institutions selecting this option are exempt from the rate validation requirement.

Responds to a March 2023 Florida Supreme Court rule change that tied IOTA rates to the Wall Street Journal Prime Rate, which the bill notes resulted in record revenues exceeding $279 million paid to Funding Florida Legal Aid (FFLA) in fiscal year 2023-2024—nearly four times the prior peak—and made Florida an outlier compared to other states.

Effective July 1, 2025, and does not apply to interest rates established by written contract or obligations unrelated to IOTA accounts.