Florida 2022 Regular Session

Florida House Bill H0639 Compare Versions

Only one version of the bill is available at this time.

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12	12	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
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16	16	A bill to be entitled 1
17	17	An act relating to benchmark replacements for London 2
18	18	Interbank Offered Rate; providing legislative findings 3
19	19	and intent and a statement of public interest; 4
20	20	creating ss. 607.01305, 624.103, 655.0135, 671.1075, 5
21	21	689.0705, and 697.015, F.S.; providing definitio ns; 6
22	22	requiring that recommended benchmark replacements 7
23	23	selected or recommended by specified persons be 8
24	24	benchmark replacements on the United States dollar 9
25	25	London Interbank Offered Rate (LIBOR) replacement date 10
26	26	for certain contracts, securities, and instrumen ts for 11
27	27	business organizations under the Florida Business 12
28	28	Corporation Act, the Florida Insurance Code, financial 13
29	29	institutions, the Uniform Commercial Code, real and 14
30	30	personal property conveyance of land and declarations 15
31	31	of trust, and real and personal proper ty mortgages, 16
32	32	respectively; requiring certain fallback provisions in 17
33	33	contracts, securities, and instruments providing 18
34	34	specified benchmark replacements to be disregarded and 19
35	35	void; authorizing specified persons to select 20
36	36	benchmark replacements under certain circumstances; 21
37	37	providing requirements for such selection; providing 22
38	38	applicability; requiring benchmark replacement 23
39	39	conforming changes to become an integral part of 24
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50	50	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
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54	54	contracts, securities, and instruments under certain 25
55	55	circumstances; providing requirements f or selections 26
56	56	or uses of recommended benchmark replacements as 27
57	57	benchmark replacements; providing construction; 28
58	58	providing that a person is not liable for damages and 29
59	59	is not subject to claims and requests for equitable 30
60	60	relief under certain circumstances; pro viding 31
61	61	applicability; prohibiting other laws from superseding 32
62	62	specified provisions; providing that the act is 33
63	63	remedial in nature; providing retroactive 34
64	64	applicability; providing an effective date. 35
65	65	36
66	66	Be It Enacted by the Legislature of the State of Florid a: 37
67	67	38
68	68	Section 1. The Legislature finds that the discontinuation 39
69	69	of the London Interbank Offered Rate (LIBOR) as a viable 40
70	70	interest rate threatens the continued viability of certain 41
71	71	contracts, securities, or instruments and the rights of the 42
72	72	parties to those contracts, securities, or instruments. 43
73	73	Furthermore, the threat of unknown and potentially unbounded 44
74	74	liability and the viability of contracts, securities, or 45
75	75	instruments threatens the state's economy and has created an 46
76	76	overpowering public necessity to pr ovide an immediate and 47
77	77	remedial legislative solution. Therefore, the Legislature 48
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88	88	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
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92	92	intends for parties to certain contracts, securities, or 49
93	93	instruments, as provided in this act, to enjoy heightened legal 50
94	94	protections as a result of the discontinuation of LIBO R. The 51
95	95	Legislature also finds that there are no alternative means to 52
96	96	meet this public necessity. The Legislature finds that the 53
97	97	public interest as a whole is best served by providing certainty 54
98	98	to these contracts, securities, or instruments and the parties 55
99	99	thereto, so that these contracts, securities, or instruments may 56
100	100	remain viable and continue to be enforceable in the state. 57
101	101	Section 2. Section 607.01305, Florida Statutes, is created 58
102	102	to read: 59
103	103	607.01305 Benchmark replacements for the London Interbank 60
104	104	Offered Rate.— 61
105	105	(1) As used in this section, the term: 62
106	106	(a) "Benchmark" means an index of interest rates or 63
107	107	dividend rates that is used, in whole or in part, as the basis 64
108	108	of, or as a reference for, calculating or determining a 65
109	109	valuation, payment, or othe r measurement under or in respect of 66
110	110	a contract, security, or instrument. 67
111	111	(b) "Benchmark replacement" means a benchmark, an interest 68
112	112	rate, or a dividend rate that may or may not be based, in whole 69
113	113	or in part, on a prior setting of LIBOR, to replace LIBOR or any 70
114	114	interest rate or dividend rate based on LIBOR, whether on a 71
115	115	temporary, permanent, or indefinite basis, under or in respect 72
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126	126	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
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130	130	of a contract, security, or instrument. 73
131	131	(c) "Benchmark replacement conforming change" means, with 74
132	132	respect to any type of co ntract, security, or instrument, a 75
133	133	technical, administrative, or operational change, alteration, or 76
134	134	modification that is associated with and reasonably necessary to 77
135	135	the use, adoption, calculation, or implementation of a 78
136	136	recommended benchmark replacement an d that meets both of the 79
137	137	following conditions: 80
138	138	1. The change, alteration, or modification has been 81
139	139	selected or recommended by a relevant recommending body. 82
140	140	2. If, in the reasonable judgment of the calculating 83
141	141	person, the change, alteration, or modifica tion selected or 84
142	142	recommended under subparagraph 1. does not apply to the 85
143	143	contract, security, or instrument or is insufficient to allow 86
144	144	administration and calculation of the recommended benchmark 87
145	145	replacement, the benchmark replacement conforming change must 88
146	146	include other changes, alterations, or modifications that, in 89
147	147	the reasonable judgment of the calculating person: 90
148	148	a. Are necessary to allow administration and calculation 91
149	149	of the recommended benchmark replacement under or in respect of 92
150	150	the contract, security, or instrument in a manner consistent 93
151	151	with market practice for substantially similar contracts, 94
152	152	securities, or instruments and, to the extent practicable, the 95
153	153	manner in which the contract, security, or instrument was 96
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164	164	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
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168	168	administered immediately before the LIBOR replacement date; and 97
169	169	b. Would not result in a disposition of the contract, 98
170	170	security, or instrument for federal income tax purposes. 99
171	171	(d) "Calculating person" means, with respect to any 100
172	172	contract, security, or instrument, a person responsible for 101
173	173	calculating or determining a valuation, payment, or other 102
174	174	measurement based on a benchmark. This person may be the 103
175	175	determining person. 104
176	176	(e) "Contract, security, or instrument" includes, without 105
177	177	limitation, any contract, agreement, mortgage, deed of trust, 106
178	178	lease, instrument, obligation, or security, whether representing 107
179	179	debt or equity, and including any interest in a corporation, 108
180	180	partnership, or limited liability company. 109
181	181	(f) "Determining person" means, with respect to any 110
182	182	contract, security, or instrument, the following persons in 111
183	183	decreasing order of priority: 112
184	184	1. A person so specified. 113
185	185	2. A person with the authority, right, or obligation to do 114
186	186	any of the following: 115
187	187	a. Determine the benchmark replacement that will take 116
188	188	effect on the LIBOR re placement date. 117
189	189	b. Calculate or determine a valuation, payment, or other 118
190	190	measurement based on a benchmark. 119
191	191	c. Notify other persons of the occurrence of a LIBOR 120
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202	202	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
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206	206	discontinuance event, a LIBOR replacement date, or a benchmark 121
207	207	replacement. 122
208	208	(g) "Fallback provision" means a term in a contract, 123
209	209	security, or instrument that sets forth a methodology or 124
210	210	procedure for determining a benchmark replacement, including any 125
211	211	term relating to the date on which the benchmark replacement 126
212	212	becomes effective, without regard to whether a benchmark 127
213	213	replacement can be determined in accordance with the methodology 128
214	214	or procedure. 129
215	215	(h) "LIBOR" means, for purposes of the application of this 130
216	216	section to any particular contract, security, or instrument, the 131
217	217	United States dollar LIBOR, formerly known as the London 132
218	218	Interbank Offered Rate, as administered by ICE Benchmark 133
219	219	Administration, or any predecessor or successor thereof, or any 134
220	220	tenor thereof, as applicable, that is used in making any 135
221	221	calculation or determination of benchmark interes t rates. 136
222	222	(i)1. "LIBOR discontinuance event" means the earliest to 137
223	223	occur of any of the following: 138
224	224	a. A public statement or publication of information by, or 139
225	225	on behalf of, the administrator of LIBOR announcing that the 140
226	226	administrator has ceased or will ce ase to provide LIBOR 141
227	227	permanently or indefinitely, if, at the time of the statement or 142
228	228	publication, there is no successor administrator that will 143
229	229	continue to provide LIBOR. 144
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240	240	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
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244	244	b. A public statement or publication of information by the 145
245	245	regulatory supervisor f or the administrator of LIBOR, the 146
246	246	Federal Reserve System, an insolvency official with jurisdiction 147
247	247	over the administrator of LIBOR, a resolution authority with 148
248	248	jurisdiction over the administrator of LIBOR, or a court or an 149
249	249	entity with similar insolvency o r resolution authority over the 150
250	250	administrator of LIBOR, announcing that the administrator of 151
251	251	LIBOR has ceased or will cease to provide LIBOR permanently or 152
252	252	indefinitely, if, at the time of the statement or publication, 153
253	253	there is no successor administrator t hat will continue to 154
254	254	provide LIBOR. 155
255	255	c. A public statement or publication of information by the 156
256	256	regulatory supervisor for the administrator of LIBOR announcing 157
257	257	that LIBOR is no longer representative. 158
258	258	2. A public statement or publication of information t hat 159
259	259	affects one or more tenors of LIBOR does not constitute a LIBOR 160
260	260	discontinuance event with respect to a contract, security, or 161
261	261	instrument that: 162
262	262	a. Provides for only one tenor of LIBOR, if the contract, 163
263	263	security, or instrument requires interpolation an d the tenor can 164
264	264	be interpolated from LIBOR tenors that are not so affected; or 165
265	265	b. Allows a party to choose from more than one tenor of 166
266	266	LIBOR and any of the tenors is not so affected or, if the 167
267	267	contract, security, or instrument requires interpolation, can be 168
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278	278	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
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282	282	interpolated from LIBOR tenors that are not so affected. 169
283	283	(j)1. "LIBOR replacement date" means: 170
284	284	a. In the case of a LIBOR discontinuance event described 171
285	285	in sub-subparagraph (i)1.a. or sub -subparagraph (i)1.b., the 172
286	286	later of: 173
287	287	(I) The date of the pub lic statement or publication of 174
288	288	information referenced in sub -subparagraph (i)1.a. or sub -175
289	289	subparagraph (i)1.b.; or 176
290	290	(II) The date on which the administrator of LIBOR 177
291	291	permanently or indefinitely ceases to provide LIBOR. 178
292	292	b. In the case of a LIBOR disconti nuance event described 179
293	293	in sub-subparagraph (i)1.c., the date of the public statement or 180
294	294	publication of information referenced in sub -subparagraph 181
295	295	(i)1.c. 182
296	296	2. A date that affects one or more tenors of LIBOR does 183
297	297	not constitute a LIBOR replacement date with respect to a 184
298	298	contract, security, or instrument that: 185
299	299	a. Provides for only one tenor of LIBOR, if the contract, 186
300	300	security, or instrument requires interpolation and the tenor can 187
301	301	be interpolated from LIBOR tenors that are not so affected; or 188
302	302	b. Allows a party to choose from more than one tenor of 189
303	303	LIBOR and any of the tenors is not so affected or, if the 190
304	304	contract, security, or instrument requires interpolation, can be 191
305	305	interpolated from LIBOR tenors that are not so affected. 192
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316	316	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
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320	320	(k) "Recommended benchmark rep lacement" means, with 193
321	321	respect to any particular type of contract, security, or 194
322	322	instrument, a benchmark replacement based on SOFR that must 195
323	323	include any recommended spread adjustment and any benchmark 196
324	324	replacement conforming change that have been selected or 197
325	325	recommended by a relevant recommending body with respect to the 198
326	326	type of contract, security, or instrument. 199
327	327	(l) "Recommended spread adjustment" means a spread 200
328	328	adjustment, or method for calculating or determining the spread 201
329	329	adjustment, that has been select ed or recommended by a relevant 202
330	330	recommending body for a recommended benchmark replacement for a 203
331	331	particular type of contract, security, or instrument and for a 204
332	332	particular term to account for the effects of the transition or 205
333	333	change from LIBOR to a recommende d benchmark replacement. This 206
334	334	term may be a positive or negative value or zero. 207
335	335	(m) "Relevant recommending body" means the Federal Reserve 208
336	336	Board, the Federal Reserve Bank of New York, or the Alternative 209
337	337	Reference Rates Committee, or any successor to any of them. 210
338	338	(n) "SOFR" means, with respect to any day, the secured 211
339	339	overnight financing rate published for the day by the Federal 212
340	340	Reserve Bank of New York as the administrator of the benchmark, 213
341	341	or a successor administrator, on the Federal Reserve Bank of New 214
342	342	York's website. 215
343	343	(2) On the LIBOR replacement date, the recommended 216
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354	354	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
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358	358	benchmark replacement, by operation of law, shall be the 217
359	359	benchmark replacement for a contract, security, or instrument 218
360	360	that uses LIBOR as a benchmark and that: 219
361	361	(a) Does not contain any fallback provision; or 220
362	362	(b) Contains fallback provisions resulting in a benchmark 221
363	363	replacement, other than a recommended benchmark replacement, 222
364	364	that is based in any way on a LIBOR value. 223
365	365	(3) After the occurrence of a LIBOR discontinuance event, 224
366	366	any fallback provisions in a contract, security, or instrument 225
367	367	that provide for a benchmark replacement based on or otherwise 226
368	368	involving a poll, survey, or inquiry for quotes or information 227
369	369	concerning interbank lending rates or any interest rate or 228
370	370	dividend rate based on LIBOR shall be void and of no force or 229
371	371	effect. 230
372	372	(4)(a) A determining person may, but is not required to, 231
373	373	select on the day of or the day after the occurrence of a LIBOR 232
374	374	discontinuance event the recommended benchmark replacement as 233
375	375	the benchmark replacement. The selection of the recommended 234
376	376	benchmark replacement must be: 235
377	377	1. Irrevocable; 236
378	378	2. Made by the earlier of the LIBOR replacement date, or 237
379	379	the latest date for selecting a benchmark replacement according 238
380	380	to the contract, security, or instrum ent; and 239
381	381	3. Used in any determination of the benchmark under or 240
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392	392	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
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396	396	with respect to the contract, security, or instrument occurring 241
397	397	on and after the LIBOR replacement date. 242
398	398	(b) Paragraph (a) applies to a contract, security, or 243
399	399	instrument that uses LIBOR as a benchmark and that contains 244
400	400	fallback provisions allowing or requiring the selection of a 245
401	401	benchmark replacement that is: 246
402	402	1. Based in any way on a LIBOR value; or 247
403	403	2. The substantive equivalent of paragraph (6)(a), 248
404	404	paragraph (6)(b), or paragraph (6)(c). 249
405	405	(5) If a recommended benchmark replacement becomes the 250
406	406	benchmark replacement for a contract, security, or instrument 251
407	407	under this section, then all benchmark replacement conforming 252
408	408	changes that are applicable to the recommended benchmark 253
409	409	replacement must become an integral part of the contract, 254
410	410	security, or instrument by operation of law. 255
411	411	(6) The selection or use of a recommended benchmark 256
412	412	replacement as a benchmark replacement under or in respect of a 257
413	413	contract, security, or instrument by operation of th is section 258
414	414	must constitute all of the following: 259
415	415	(a) A commercially reasonable replacement for and a 260
416	416	commercially substantial equivalent to LIBOR. 261
417	417	(b) A reasonable, comparable, or analogous term for LIBOR 262
418	418	under or in respect of the contract, security, or instrument. 263
419	419	(c) A replacement that is based on a methodology or 264
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430	430	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
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434	434	information that is similar or comparable to LIBOR. 265
435	435	(d) Substantial performance by any person of any right or 266
436	436	obligation relating to or based on LIBOR under or in respect of 267
437	437	a contract, security, or instrument. 268
438	438	(7) A LIBOR discontinuance event, a LIBOR replacement 269
439	439	date, the selection or use of a recommended benchmark 270
440	440	replacement as a benchmark replacement, or the determination, 271
441	441	implementation, or performance of a benchmark replacement 272
442	442	conforming change, in each case, by operation of this section, 273
443	443	may not: 274
444	444	(a) Be deemed to impair or affect the right of any person 275
445	445	to receive a payment, or affect the amount or timing of the 276
446	446	payment, under a contract, security, or instrument; 277
447	447	(b) Have the effect of discharging or excusing performance 278
448	448	under a contract, security, or instrument for any reason, claim, 279
449	449	or defense, including, but not limited to, any force majeure or 280
450	450	other provision in a contract, security, or instrument; 281
451	451	(c) Have the effect of giving any person the right to 282
452	452	unilaterally terminate or suspend performance under a contract, 283
453	453	security, or instrument; 284
454	454	(d) Have the effect of constituting a breach of a 285
455	455	contract, security, or instrument; or 286
456	456	(e) Have the effect of voiding or nullify ing a contract, 287
457	457	security, or instrument. 288
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468	468	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
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472	472	(8) A person is not liable for damages to any other 289
473	473	person, and is not subject to any claim or request for equitable 290
474	474	relief, arising out of or related to the selection or use of a 291
475	475	recommended benchmark replacement or the determination, 292
476	476	implementation, or performance of a benchmark replacement 293
477	477	conforming change, in each case, by operation of this section. 294
478	478	The selection or use of the recommended benchmark replacement or 295
479	479	the determination, implementation, or performan ce of a benchmark 296
480	480	replacement conforming change may not give rise to any claim or 297
481	481	cause of action by any person in law or in equity. 298
482	482	(9) The selection or use of a recommended benchmark 299
483	483	replacement or the determination, implementation, or performance 300
484	484	of a benchmark replacement conforming change, by operation of 301
485	485	this section, may not be deemed to: 302
486	486	(a) Be an amendment or modification of a contract, 303
487	487	security, or instrument. 304
488	488	(b) Prejudice, impair, or affect a person's rights, 305
489	489	interests, or obligations unde r or in respect of a contract, 306
490	490	security, or instrument. 307
491	491	(10) Except as provided in subsection (2) or subsection 308
492	492	(4), this section may not be interpreted as creating a negative 309
493	493	inference or negative presumption regarding the validity or 310
494	494	enforceability of any of the following: 311
495	495	(a) A benchmark replacement that is not a recommended 312
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506	506	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
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510	510	replacement benchmark. 313
511	511	(b) A spread adjustment, or method for calculating or 314
512	512	determining a spread adjustment, that is not a recommended 315
513	513	spread adjustment. 316
514	514	(c) A change, alter ation, or modification to or in respect 317
515	515	of a contract, security, or instrument that is not a benchmark 318
516	516	replacement conforming change. 319
517	517	(11) This section does not alter or impair any of the 320
518	518	following: 321
519	519	(a) A written agreement by all requisite parties that, 322
520	520	retrospectively or prospectively, provides that a contract, 323
521	521	security, or instrument is not subject to this section without 324
522	522	necessarily referring specifically to this section. As used in 325
523	523	this paragraph, the term "requisite parties" means all parties 326
524	524	required to amend the terms and provisions of a contract, 327
525	525	security, or instrument that would otherwise be altered or 328
526	526	affected by this section. 329
527	527	(b) A contract, security, or instrument that contains 330
528	528	fallback provisions that would result in a benchmark repla cement 331
529	529	that is not based on LIBOR, including, but not limited to, the 332
530	530	prime rate or the federal funds rate. However, the contract, 333
531	531	security, or instrument is subject to subsection (3). 334
532	532	(c) A contract, security, or instrument subject to 335
533	533	subsection (4) as to which a determining person does not elect 336
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544	544	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
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548	548	to use a recommended benchmark replacement or as to which a 337
549	549	determining person elects to use a recommended benchmark 338
550	550	replacement before the occurrence of a LIBOR discontinuance 339
551	551	event. However, the contract, secu rity, or instrument is subject 340
552	552	to subsection (3). 341
553	553	(d) The application to a recommended benchmark replacement 342
554	554	of any cap, floor, modifier, or spread adjustment to which LIBOR 343
555	555	had been subject pursuant to the terms of a contract, security, 344
556	556	or instrument. 345
557	557	(12) Notwithstanding the Uniform Commercial Code or any 346
558	558	other law of this state, and except as otherwise provided in 347
559	559	this section, this section applies to all contracts, securities, 348
560	560	and instruments, including contracts with respect to commercial 349
561	561	transactions, and may not be superseded by any other law of this 350
562	562	state. 351
563	563	Section 3. Section 624.103, Florida Statutes, is created 352
564	564	to read: 353
565	565	624.103 Benchmark replacements for the London Interbank 354
566	566	Offered Rate.— 355
567	567	(1) As used in this section, the term: 356
568	568	(a) "Benchmark" means an index of interest rates or 357
569	569	dividend rates that is used, in whole or in part, as the basis 358
570	570	of, or as a reference for, calculating or determining a 359
571	571	valuation, payment, or other measurement under or in respect of 360
572	572
573	573	HB 639 2022
574	574
575	575
576	576
577	577
578	578	CODING: Words stricken are deletions; words underlined are additions.
579	579	hb0639-00
580	580
581	581	Page 16 of 77
582	582	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
583	583
584	584
585	585
586	586	a contract, security, or ins trument. 361
587	587	(b) "Benchmark replacement" means a benchmark, an interest 362
588	588	rate, or a dividend rate that may or may not be based, in whole 363
589	589	or in part, on a prior setting of LIBOR, to replace LIBOR or any 364
590	590	interest rate or dividend rate based on LIBOR, whether on a 365
591	591	temporary, permanent, or indefinite basis, under or in respect 366
592	592	of a contract, security, or instrument. 367
593	593	(c) "Benchmark replacement conforming change" means, with 368
594	594	respect to any type of contract, security, or instrument, a 369
595	595	technical, administrative, or operational change, alteration, or 370
596	596	modification that is associated with and reasonably necessary to 371
597	597	the use, adoption, calculation, or implementation of a 372
598	598	recommended benchmark replacement and that meets both of the 373
599	599	following conditions: 374
600	600	1. The change, alteration, or modification has been 375
601	601	selected or recommended by a relevant recommending body. 376
602	602	2. If, in the reasonable judgment of the calculating 377
603	603	person, the change, alteration, or modification selected or 378
604	604	recommended under subparagraph 1. does not apply to the 379
605	605	contract, security, or instrument or is insufficient to allow 380
606	606	administration and calculation of the recommended benchmark 381
607	607	replacement, the benchmark replacement conforming change must 382
608	608	include other changes, alterations, or modifications that, in 383
609	609	the reasonable judgment of the calculating person: 384
610	610
611	611	HB 639 2022
612	612
613	613
614	614
615	615
616	616	CODING: Words stricken are deletions; words underlined are additions.
617	617	hb0639-00
618	618
619	619	Page 17 of 77
620	620	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
621	621
622	622
623	623
624	624	a. Are necessary to allow administration and calculation 385
625	625	of the recommended benchmark replacement under or in respect of 386
626	626	the contract, security, or instrument in a manner consistent 387
627	627	with market practice fo r substantially similar contracts, 388
628	628	securities, or instruments and, to the extent practicable, the 389
629	629	manner in which the contract, security, or instrument was 390
630	630	administered immediately before the LIBOR replacement date. 391
631	631	b. Would not result in a disposition o f the contract, 392
632	632	security, or instrument for federal income tax purposes. 393
633	633	(d) "Calculating person" means, with respect to any 394
634	634	contract, security, or instrument, a person responsible for 395
635	635	calculating or determining a valuation, payment, or other 396
636	636	measurement based on a benchmark. This person may be the 397
637	637	determining person. 398
638	638	(e) "Contract, security, or instrument" includes, without 399
639	639	limitation, any contract, agreement, mortgage, deed of trust, 400
640	640	lease, instrument, obligation, or security, whether representing 401
641	641	debt or equity, and including any interest in a corporation, 402
642	642	partnership, or limited liability company. 403
643	643	(f) "Determining person" means, with respect to any 404
644	644	contract, security, or instrument, the following persons in 405
645	645	decreasing order of priority: 406
646	646	1. A person so specified. 407
647	647	2. A person with the authority, right, or obligation to do 408
648	648
649	649	HB 639 2022
650	650
651	651
652	652
653	653
654	654	CODING: Words stricken are deletions; words underlined are additions.
655	655	hb0639-00
656	656
657	657	Page 18 of 77
658	658	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
659	659
660	660
661	661
662	662	any of the following: 409
663	663	a. Determine the benchmark replacement that will take 410
664	664	effect on the LIBOR replacement date. 411
665	665	b. Calculate or determine a valuation, payment, or other 412
666	666	measurement based on a benchmark. 413
667	667	c. Notify other persons of the occurrence of a LIBOR 414
668	668	discontinuance event, a LIBOR replacement date, or a benchmark 415
669	669	replacement. 416
670	670	(g) "Fallback provision" means a term in a contract, 417
671	671	security, or instrument that sets fo rth a methodology or 418
672	672	procedure for determining a benchmark replacement, including any 419
673	673	term relating to the date on which the benchmark replacement 420
674	674	becomes effective, without regard to whether a benchmark 421
675	675	replacement can be determined in accordance with the methodology 422
676	676	or procedure. 423
677	677	(h) "LIBOR" means, for purposes of the application of this 424
678	678	section to any particular contract, security, or instrument, the 425
679	679	United States dollar LIBOR, formerly known as the London 426
680	680	Interbank Offered Rate, as administered by ICE Benchmark 427
681	681	Administration, or any predecessor or successor thereof, or any 428
682	682	tenor thereof, as applicable, that is used in making any 429
683	683	calculation or determination of benchmark interest rates. 430
684	684	(i)1. "LIBOR discontinuance event" means the earliest to 431
685	685	occur of any of the following: 432
686	686
687	687	HB 639 2022
688	688
689	689
690	690
691	691
692	692	CODING: Words stricken are deletions; words underlined are additions.
693	693	hb0639-00
694	694
695	695	Page 19 of 77
696	696	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
697	697
698	698
699	699
700	700	a. A public statement or publication of information by, or 433
701	701	on behalf of, the administrator of LIBOR announcing that the 434
702	702	administrator has ceased or will cease to provide LIBOR 435
703	703	permanently or indefinitely, if, at the time of the st atement or 436
704	704	publication, there is no successor administrator that will 437
705	705	continue to provide LIBOR. 438
706	706	b. A public statement or publication of information by the 439
707	707	regulatory supervisor for the administrator of LIBOR, the 440
708	708	Federal Reserve System, an insolvency of ficial with jurisdiction 441
709	709	over the administrator of LIBOR, a resolution authority with 442
710	710	jurisdiction over the administrator of LIBOR, or a court or an 443
711	711	entity with similar insolvency or resolution authority over the 444
712	712	administrator of LIBOR, announcing that the administrator of 445
713	713	LIBOR has ceased or will cease to provide LIBOR permanently or 446
714	714	indefinitely, if, at the time of the statement or publication, 447
715	715	there is no successor administrator that will continue to 448
716	716	provide LIBOR. 449
717	717	c. A public statement or publication of information by the 450
718	718	regulatory supervisor for the administrator of LIBOR announcing 451
719	719	that LIBOR is no longer representative. 452
720	720	2. A public statement or publication of information that 453
721	721	affects one or more tenors of LIBOR does not constitute a LIBOR 454
722	722	discontinuance event with respect to a contract, security, or 455
723	723	instrument that: 456
724	724
725	725	HB 639 2022
726	726
727	727
728	728
729	729
730	730	CODING: Words stricken are deletions; words underlined are additions.
731	731	hb0639-00
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733	733	Page 20 of 77
734	734	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
735	735
736	736
737	737
738	738	a. Provides for only one tenor of LIBOR, if the contract, 457
739	739	security, or instrument requires interpolation and the tenor can 458
740	740	be interpolated from LIBOR tenors that are not so affected; or 459
741	741	b. Allows a party to choose from more than one tenor of 460
742	742	LIBOR and any of the tenors is not so affected or, if the 461
743	743	contract, security, or instrument requires interpolation, can be 462
744	744	interpolated from LIBOR tenors that are not so affected. 463
745	745	(j)1. "LIBOR replacement date" means: 464
746	746	a. In the case of a LIBOR discontinuance event described 465
747	747	in sub-subparagraph (i)1.a. or sub -subparagraph (i)1.b., the 466
748	748	later of: 467
749	749	(I) The date of the public statement or publication of 468
750	750	information referenced in sub -subparagraph (i)1.a. or sub-469
751	751	subparagraph (i)1.b.; or 470
752	752	(II) The date on which the administrator of LIBOR 471
753	753	permanently or indefinitely ceases to provide LIBOR. 472
754	754	b. In the case of a LIBOR discontinuance event described 473
755	755	in sub-subparagraph (i)1.c., the date of the public statement or 474
756	756	publication of information referenced in sub -subparagraph 475
757	757	(i)1.c. 476
758	758	2. A date that affects one or more tenors of LIBOR does 477
759	759	not constitute a LIBOR replacement date with respect to a 478
760	760	contract, security, or instrument that: 479
761	761	a. Provides for onl y one tenor of LIBOR, if the contract, 480
762	762
763	763	HB 639 2022
764	764
765	765
766	766
767	767
768	768	CODING: Words stricken are deletions; words underlined are additions.
769	769	hb0639-00
770	770
771	771	Page 21 of 77
772	772	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
773	773
774	774
775	775
776	776	security, or instrument requires interpolation and the tenor can 481
777	777	be interpolated from LIBOR tenors that are not so affected; or 482
778	778	b. Allows a party to choose from more than one tenor of 483
779	779	LIBOR and any of the tenors is not so affected or, if the 484
780	780	contract, security, or instrument requires interpolation, can be 485
781	781	interpolated from LIBOR tenors that are not so affected. 486
782	782	(k) "Recommended benchmark replacement" means, with 487
783	783	respect to any particular type of contract, security, or 488
784	784	instrument, a benchmark replacement based on SOFR that must 489
785	785	include any recommended spread adjustment and any benchmark 490
786	786	replacement conforming change that have been selected or 491
787	787	recommended by a relevant recommending body with respect to the 492
788	788	type of contract, security, or instrument. 493
789	789	(l) "Recommended spread adjustment" means a spread 494
790	790	adjustment, or method for calculating or determining the spread 495
791	791	adjustment, that has been selected or recommended by a relevant 496
792	792	recommending body for a recommended benchma rk replacement for a 497
793	793	particular type of contract, security, or instrument and for a 498
794	794	particular term to account for the effects of the transition or 499
795	795	change from LIBOR to a recommended benchmark replacement. This 500
796	796	term may be a positive or negative value or z ero. 501
797	797	(m) "Relevant recommending body" means the Federal Reserve 502
798	798	Board, the Federal Reserve Bank of New York, or the Alternative 503
799	799	Reference Rates Committee, or any successor to any of them. 504
800	800
801	801	HB 639 2022
802	802
803	803
804	804
805	805
806	806	CODING: Words stricken are deletions; words underlined are additions.
807	807	hb0639-00
808	808
809	809	Page 22 of 77
810	810	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
811	811
812	812
813	813
814	814	(n) "SOFR" means, with respect to any day, the secured 505
815	815	overnight financing rate published for the day by the Federal 506
816	816	Reserve Bank of New York as the administrator of the benchmark, 507
817	817	or a successor administrator, on the Federal Reserve Bank of New 508
818	818	York's website. 509
819	819	(2) On the LIBOR replacement date, the recommended 510
820	820	benchmark replacement, by operation of law, shall be the 511
821	821	benchmark replacement for a contract, security, or instrument 512
822	822	that uses LIBOR as a benchmark and that: 513
823	823	(a) Does not contain any fallback provision; or 514
824	824	(b) Contains fallback provisions resulting in a b enchmark 515
825	825	replacement, other than a recommended benchmark replacement, 516
826	826	that is based in any way on a LIBOR value. 517
827	827	(3) After the occurrence of a LIBOR discontinuance event, 518
828	828	any fallback provisions in a contract, security, or instrument 519
829	829	that provide for a b enchmark replacement based on or otherwise 520
830	830	involving a poll, survey, or inquiry for quotes or information 521
831	831	concerning interbank lending rates or any interest rate or 522
832	832	dividend rate based on LIBOR shall be void and of no force or 523
833	833	effect. 524
834	834	(4)(a) A determinin g person may, but is not required to, 525
835	835	select on the day of or the day after the occurrence of a LIBOR 526
836	836	discontinuance event the recommended benchmark replacement as 527
837	837	the benchmark replacement. The selection of the recommended 528
838	838
839	839	HB 639 2022
840	840
841	841
842	842
843	843
844	844	CODING: Words stricken are deletions; words underlined are additions.
845	845	hb0639-00
846	846
847	847	Page 23 of 77
848	848	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
849	849
850	850
851	851
852	852	benchmark replacement must be: 529
853	853	1. Irrevocable; 530
854	854	2. Made by the earlier of the LIBOR replacement date, or 531
855	855	the latest date for selecting a benchmark replacement according 532
856	856	to the contract, security, or instrument; and 533
857	857	3. Used in any determination of the benchmark under or 534
858	858	with respect to the contract, security, or instrument occurring 535
859	859	on and after the LIBOR replacement date. 536
860	860	(b) Paragraph (a) applies to a contract, security, or 537
861	861	instrument that uses LIBOR as a benchmark and that contains 538
862	862	fallback provisions allowing or requiring the se lection of a 539
863	863	benchmark replacement that is: 540
864	864	1. Based in any way on a LIBOR value; or 541
865	865	2. The substantive equivalent of paragraph (6)(a), 542
866	866	paragraph (6)(b), or paragraph (6)(c). 543
867	867	(5) If a recommended benchmark replacement becomes the 544
868	868	benchmark replacement for a contract, security, or instrument 545
869	869	under this section, then all benchmark replacement conforming 546
870	870	changes that are applicable to the recommended benchmark 547
871	871	replacement must become an integral part of the contract, 548
872	872	security, or instrument by operation o f law. 549
873	873	(6) The selection or use of a recommended benchmark 550
874	874	replacement as a benchmark replacement under or in respect of a 551
875	875	contract, security, or instrument by operation of this section 552
876	876
877	877	HB 639 2022
878	878
879	879
880	880
881	881
882	882	CODING: Words stricken are deletions; words underlined are additions.
883	883	hb0639-00
884	884
885	885	Page 24 of 77
886	886	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
887	887
888	888
889	889
890	890	must constitute all of the following: 553
891	891	(a) A commercially reasonable replacement for and a 554
892	892	commercially substantial equivalent to LIBOR. 555
893	893	(b) A reasonable, comparable, or analogous term for LIBOR 556
894	894	under or in respect of the contract, security, or instrument. 557
895	895	(c) A replacement that is based on a methodology or 558
896	896	information that is similar or comparable to LIBOR. 559
897	897	(d) Substantial performance by any person of any right or 560
898	898	obligation relating to or based on LIBOR under or in respect of 561
899	899	a contract, security, or instrument. 562
900	900	(7) A LIBOR discontinuance event, a LIBOR replacement 563
901	901	date, the selection or use of a recommended benchmark 564
902	902	replacement as a benchmark replacement, or the determination, 565
903	903	implementation, or performance of a benchmark replacement 566
904	904	conforming change, in each case, by operation of this section, 567
905	905	may not: 568
906	906	(a) Be deemed to impair or affect the right of any person 569
907	907	to receive a payment, or affect the amount or timing of the 570
908	908	payment, under a contract, security, or instrument; 571
909	909	(b) Have the effect of discharging or excusing performance 572
910	910	under a contract, security, or instrument for any reason, claim, 573
911	911	or defense, including, but not limited to, any force majeure or 574
912	912	other provision in a contract, security, or instrument; 575
913	913	(c) Have the effect of giving any person the right to 576
914	914
915	915	HB 639 2022
916	916
917	917
918	918
919	919
920	920	CODING: Words stricken are deletions; words underlined are additions.
921	921	hb0639-00
922	922
923	923	Page 25 of 77
924	924	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
925	925
926	926
927	927
928	928	unilaterally terminate or suspend performance under a contract, 577
929	929	security, or instrument; 578
930	930	(d) Have the effect of constituting a breach of a 579
931	931	contract, security, or instrument; or 580
932	932	(e) Have the effect of voiding or nullifying a contract, 581
933	933	security, or instrument. 582
934	934	(8) A person is not liab le for damages to any other 583
935	935	person, and is not subject to any claim or request for equitable 584
936	936	relief, arising out of or related to the selection or use of a 585
937	937	recommended benchmark replacement or the determination, 586
938	938	implementation, or performance of a benchmar k replacement 587
939	939	conforming change, in each case, by operation of this section. 588
940	940	The selection or use of the recommended benchmark replacement or 589
941	941	the determination, implementation, or performance of a benchmark 590
942	942	replacement conforming change may not give rise t o any claim or 591
943	943	cause of action by any person in law or in equity. 592
944	944	(9) The selection or use of a recommended benchmark 593
945	945	replacement or the determination, implementation, or performance 594
946	946	of a benchmark replacement conforming change, by operation of 595
947	947	this section, may not be deemed to: 596
948	948	(a) Be an amendment or modification of a contract, 597
949	949	security, or instrument. 598
950	950	(b) Prejudice, impair, or affect a person's rights, 599
951	951	interests, or obligations under or in respect of a contract, 600
952	952
953	953	HB 639 2022
954	954
955	955
956	956
957	957
958	958	CODING: Words stricken are deletions; words underlined are additions.
959	959	hb0639-00
960	960
961	961	Page 26 of 77
962	962	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
963	963
964	964
965	965
966	966	security, or instrument. 601
967	967	(10) Except as provided in subsection (2) or subsection 602
968	968	(4), this section may not be interpreted as creating a negative 603
969	969	inference or negative presumption regarding the validity or 604
970	970	enforceability of any of the following: 605
971	971	(a) A benchmark replacement that is not a r ecommended 606
972	972	replacement benchmark. 607
973	973	(b) A spread adjustment, or method for calculating or 608
974	974	determining a spread adjustment, that is not a recommended 609
975	975	spread adjustment. 610
976	976	(c) A change, alteration, or modification to or in respect 611
977	977	of a contract, security, or instrument that is not a benchmark 612
978	978	replacement conforming change. 613
979	979	(11) This section does not alter or impair any of the 614
980	980	following: 615
981	981	(a) A written agreement by all requisite parties that, 616
982	982	retrospectively or prospectively, provides that a contract, 617
983	983	security, or instrument is not subject to this section without 618
984	984	necessarily referring specifically to this section. As used in 619
985	985	this paragraph, the term "requisite parties" means all parties 620
986	986	required to amend the terms and provisions of a contract, 621
987	987	security, or instrument that would otherwise be altered or 622
988	988	affected by this section. 623
989	989	(b) A contract, security, or instrument that contains 624
990	990
991	991	HB 639 2022
992	992
993	993
994	994
995	995
996	996	CODING: Words stricken are deletions; words underlined are additions.
997	997	hb0639-00
998	998
999	999	Page 27 of 77
1000	1000	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
1001	1001
1002	1002
1003	1003
1004	1004	fallback provisions that would result in a benchmark replacement 625
1005	1005	that is not based on LIBOR, including, but not limited to, the 626
1006	1006	prime rate or the federal funds rate. However, the contract, 627
1007	1007	security, or instrument is subject to subsection (3). 628
1008	1008	(c) A contract, security, or instrument subject to 629
1009	1009	subsection (4) as to which a determining person does not elect 630
1010	1010	to use a recommended bench mark replacement or as to which a 631
1011	1011	determining person elects to use a recommended benchmark 632
1012	1012	replacement before the occurrence of a LIBOR discontinuance 633
1013	1013	event. However, the contract, security, or instrument is subject 634
1014	1014	to subsection (3). 635
1015	1015	(d) The application to a recommended benchmark replacement 636
1016	1016	of any cap, floor, modifier, or spread adjustment to which LIBOR 637
1017	1017	had been subject pursuant to the terms of a contract, security, 638
1018	1018	or instrument. 639
1019	1019	(12) Notwithstanding the Uniform Commercial Code or any 640
1020	1020	other law of this state, and except as otherwise provided in 641
1021	1021	this section, this section applies to all contracts, securities, 642
1022	1022	and instruments, including contracts with respect to commercial 643
1023	1023	transactions, and may not be superseded by any other law of this 644
1024	1024	state. 645
1025	1025	Section 4. Section 655.0135, Florida Statutes, is created 646
1026	1026	to read: 647
1027	1027	655.0135 Benchmark replacements for the London Interbank 648
1028	1028
1029	1029	HB 639 2022
1030	1030
1031	1031
1032	1032
1033	1033
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1038	1038	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
1039	1039
1040	1040
1041	1041
1042	1042	Offered Rate.— 649
1043	1043	(1) As used in this section, the term: 650
1044	1044	(a) "Benchmark" means an index of interest rates or 651
1045	1045	dividend rates that is u sed, in whole or in part, as the basis 652
1046	1046	of, or as a reference for, calculating or determining a 653
1047	1047	valuation, payment, or other measurement under or in respect of 654
1048	1048	a contract, security, or instrument. 655
1049	1049	(b) "Benchmark replacement" means a benchmark, an interest 656
1050	1050	rate, or a dividend rate that may or may not be based, in whole 657
1051	1051	or in part, on a prior setting of LIBOR, to replace LIBOR or any 658
1052	1052	interest rate or dividend rate based on LIBOR, whether on a 659
1053	1053	temporary, permanent, or indefinite basis, under or in respect 660
1054	1054	of a contract, security, or instrument. 661
1055	1055	(c) "Benchmark replacement conforming change" means, with 662
1056	1056	respect to any type of contract, security, or instrument, a 663
1057	1057	technical, administrative, or operational change, alteration, or 664
1058	1058	modification that is associated with and reasonably necessary to 665
1059	1059	the use, adoption, calculation, or implementation of a 666
1060	1060	recommended benchmark replacement and that meets both of the 667
1061	1061	following conditions: 668
1062	1062	1. The change, alteration, or modification has been 669
1063	1063	selected or recommended by a re levant recommending body. 670
1064	1064	2. If, in the reasonable judgment of the calculating 671
1065	1065	person, the change, alteration, or modification selected or 672
1066	1066
1067	1067	HB 639 2022
1068	1068
1069	1069
1070	1070
1071	1071
1072	1072	CODING: Words stricken are deletions; words underlined are additions.
1073	1073	hb0639-00
1074	1074
1075	1075	Page 29 of 77
1076	1076	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
1077	1077
1078	1078
1079	1079
1080	1080	recommended under subparagraph 1. does not apply to the 673
1081	1081	contract, security, or instrument or is insufficient to all ow 674
1082	1082	administration and calculation of the recommended benchmark 675
1083	1083	replacement, the benchmark replacement conforming change must 676
1084	1084	include other changes, alterations, or modifications that, in 677
1085	1085	the reasonable judgment of the calculating person: 678
1086	1086	a. Are necessary to allow administration and calculation 679
1087	1087	of the recommended benchmark replacement under or in respect of 680
1088	1088	the contract, security, or instrument in a manner consistent 681
1089	1089	with market practice for substantially similar contracts, 682
1090	1090	securities, or instruments and, to the extent practicable, the 683
1091	1091	manner in which the contract, security, or instrument was 684
1092	1092	administered immediately before the LIBOR replacement date; and 685
1093	1093	b. Would not result in a disposition of the contract, 686
1094	1094	security, or instrument for federal income tax purposes. 687
1095	1095	(d) "Calculating person" means, with respect to any 688
1096	1096	contract, security, or instrument, a person responsible for 689
1097	1097	calculating or determining a valuation, payment, or other 690
1098	1098	measurement based on a benchmark. This person may be the 691
1099	1099	determining person. 692
1100	1100	(e) "Contract, security, or instrument" includes, without 693
1101	1101	limitation, any contract, agreement, mortgage, deed of trust, 694
1102	1102	lease, instrument, obligation, or security, whether representing 695
1103	1103	debt or equity, and including any interest in a corporation, 696
1104	1104
1105	1105	HB 639 2022
1106	1106
1107	1107
1108	1108
1109	1109
1110	1110	CODING: Words stricken are deletions; words underlined are additions.
1111	1111	hb0639-00
1112	1112
1113	1113	Page 30 of 77
1114	1114	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
1115	1115
1116	1116
1117	1117
1118	1118	partnership, or limited liability company. 697
1119	1119	(f) "Determining person" means, with respect to any 698
1120	1120	contract, security, or instrument, the following persons in 699
1121	1121	decreasing order of priority: 700
1122	1122	1. A person so specified. 701
1123	1123	2. A person with the authority, right, or ob ligation to do 702
1124	1124	any of the following: 703
1125	1125	a. Determine the benchmark replacement that will take 704
1126	1126	effect on the LIBOR replacement date. 705
1127	1127	b. Calculate or determine a valuation, payment, or other 706
1128	1128	measurement based on a benchmark. 707
1129	1129	c. Notify other persons of the occurrence of a LIBOR 708
1130	1130	discontinuance event, a LIBOR replacement date, or a benchmark 709
1131	1131	replacement. 710
1132	1132	(g) "Fallback provision" means a term in a contract, 711
1133	1133	security, or instrument that sets forth a methodology or 712
1134	1134	procedure for determining a benchmark replace ment, including any 713
1135	1135	term relating to the date on which the benchmark replacement 714
1136	1136	becomes effective, without regard to whether a benchmark 715
1137	1137	replacement can be determined in accordance with the methodology 716
1138	1138	or procedure. 717
1139	1139	(h) "LIBOR" means, for purposes of th e application of this 718
1140	1140	section to any particular contract, security, or instrument, the 719
1141	1141	United States dollar LIBOR, formerly known as the London 720
1142	1142
1143	1143	HB 639 2022
1144	1144
1145	1145
1146	1146
1147	1147
1148	1148	CODING: Words stricken are deletions; words underlined are additions.
1149	1149	hb0639-00
1150	1150
1151	1151	Page 31 of 77
1152	1152	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
1153	1153
1154	1154
1155	1155
1156	1156	Interbank Offered Rate, as administered by ICE Benchmark 721
1157	1157	Administration, or any predecessor or successor thereof , or any 722
1158	1158	tenor thereof, as applicable, that is used in making any 723
1159	1159	calculation or determination of benchmark interest rates. 724
1160	1160	(i)1. "LIBOR discontinuance event" means the earliest to 725
1161	1161	occur of any of the following: 726
1162	1162	a. A public statement or publication of information by, or 727
1163	1163	on behalf of, the administrator of LIBOR announcing that the 728
1164	1164	administrator has ceased or will cease to provide LIBOR 729
1165	1165	permanently or indefinitely, if, at the time of the statement or 730
1166	1166	publication, there is no successor administrator that w ill 731
1167	1167	continue to provide LIBOR. 732
1168	1168	b. A public statement or publication of information by the 733
1169	1169	regulatory supervisor for the administrator of LIBOR, the 734
1170	1170	Federal Reserve System, an insolvency official with jurisdiction 735
1171	1171	over the administrator of LIBOR, a resolu tion authority with 736
1172	1172	jurisdiction over the administrator of LIBOR, or a court or an 737
1173	1173	entity with similar insolvency or resolution authority over the 738
1174	1174	administrator of LIBOR, announcing that the administrator of 739
1175	1175	LIBOR has ceased or will cease to provide LIBOR permanently or 740
1176	1176	indefinitely, if, at the time of the statement or publication, 741
1177	1177	there is no successor administrator that will continue to 742
1178	1178	provide LIBOR. 743
1179	1179	c. A public statement or publication of information by the 744
1180	1180
1181	1181	HB 639 2022
1182	1182
1183	1183
1184	1184
1185	1185
1186	1186	CODING: Words stricken are deletions; words underlined are additions.
1187	1187	hb0639-00
1188	1188
1189	1189	Page 32 of 77
1190	1190	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
1191	1191
1192	1192
1193	1193
1194	1194	regulatory supervisor for the administrator of LIBOR announcing 745
1195	1195	that LIBOR is no longer representative. 746
1196	1196	2. A public statement or publication of information that 747
1197	1197	affects one or more tenors of LIBOR does not constitute a LIBOR 748
1198	1198	discontinuance event with respect to a contract, security, or 749
1199	1199	instrument that: 750
1200	1200	a. Provides for only one tenor of LIBOR, if the contract, 751
1201	1201	security, or instrument requires interpolation and the tenor can 752
1202	1202	be interpolated from LIBOR tenors that are not so affected; or 753
1203	1203	b. Allows a party to choose from more than one tenor of 754
1204	1204	LIBOR and any of the tenors is not so affected or, if the 755
1205	1205	contract, security, or instrument requires interpolation, can be 756
1206	1206	interpolated from LIBOR tenors that are not so affected. 757
1207	1207	(j)1. "LIBOR replacement date" means: 758
1208	1208	a. In the case of a LIBOR discontinuan ce event described 759
1209	1209	in sub-subparagraph (i)1.a. or sub -subparagraph (i)1.b., the 760
1210	1210	later of: 761
1211	1211	(I) The date of the public statement or publication of 762
1212	1212	information referenced in sub -subparagraph (i)1.a. or sub -763
1213	1213	subparagraph (i)1.b.; or 764
1214	1214	(II) The date on which the administrator of LIBOR 765
1215	1215	permanently or indefinitely ceases to provide LIBOR. 766
1216	1216	b. In the case of a LIBOR discontinuance event described 767
1217	1217	in sub-subparagraph (i)1.c., the date of the public statement or 768
1218	1218
1219	1219	HB 639 2022
1220	1220
1221	1221
1222	1222
1223	1223
1224	1224	CODING: Words stricken are deletions; words underlined are additions.
1225	1225	hb0639-00
1226	1226
1227	1227	Page 33 of 77
1228	1228	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
1229	1229
1230	1230
1231	1231
1232	1232	publication of information referenced in sub -subparagraph 769
1233	1233	(i)1.c. 770
1234	1234	2. A date that affects one or more tenors of LIBOR does 771
1235	1235	not constitute a LIBOR replacement date with respect to a 772
1236	1236	contract, security, or instrument that: 773
1237	1237	a. Provides for only one tenor of LIBOR, if the contract, 774
1238	1238	security, or instrument re quires interpolation and the tenor can 775
1239	1239	be interpolated from LIBOR tenors that are not so affected; or 776
1240	1240	b. Allows a party to choose from more than one tenor of 777
1241	1241	LIBOR and any of the tenors is not so affected or, if the 778
1242	1242	contract, security, or instrument requires interpolation, can be 779
1243	1243	interpolated from LIBOR tenors that are not so affected. 780
1244	1244	(k) "Recommended benchmark replacement" means, with 781
1245	1245	respect to any particular type of contract, security, or 782
1246	1246	instrument, a benchmark replacement based on SOFR that mu st 783
1247	1247	include any recommended spread adjustment and any benchmark 784
1248	1248	replacement conforming change that have been selected or 785
1249	1249	recommended by a relevant recommending body with respect to the 786
1250	1250	type of contract, security, or instrument. 787
1251	1251	(l) "Recommended spread adj ustment" means a spread 788
1252	1252	adjustment, or method for calculating or determining the spread 789
1253	1253	adjustment, that has been selected or recommended by a relevant 790
1254	1254	recommending body for a recommended benchmark replacement for a 791
1255	1255	particular type of contract, security, o r instrument and for a 792
1256	1256
1257	1257	HB 639 2022
1258	1258
1259	1259
1260	1260
1261	1261
1262	1262	CODING: Words stricken are deletions; words underlined are additions.
1263	1263	hb0639-00
1264	1264
1265	1265	Page 34 of 77
1266	1266	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
1267	1267
1268	1268
1269	1269
1270	1270	particular term to account for the effects of the transition or 793
1271	1271	change from LIBOR to a recommended benchmark replacement. This 794
1272	1272	term may be a positive or negative value or zero. 795
1273	1273	(m) "Relevant recommending body" means the Federal Res erve 796
1274	1274	Board, the Federal Reserve Bank of New York, or the Alternative 797
1275	1275	Reference Rates Committee, or any successor to any of them. 798
1276	1276	(n) "SOFR" means, with respect to any day, the secured 799
1277	1277	overnight financing rate published for the day by the Federal 800
1278	1278	Reserve Bank of New York as the administrator of the benchmark, 801
1279	1279	or a successor administrator, on the Federal Reserve Bank of New 802
1280	1280	York's website. 803
1281	1281	(2) On the LIBOR replacement date, the recommended 804
1282	1282	benchmark replacement, by operation of law, shall be the 805
1283	1283	benchmark replacement for a contract, security, or instrument 806
1284	1284	that uses LIBOR as a benchmark and that: 807
1285	1285	(a) Does not contain any fallback provision; or 808
1286	1286	(b) Contains fallback provisions resulting in a benchmark 809
1287	1287	replacement, other than a recommended benchmark repl acement, 810
1288	1288	that is based in any way on a LIBOR value. 811
1289	1289	(3) After the occurrence of a LIBOR discontinuance event, 812
1290	1290	any fallback provisions in a contract, security, or instrument 813
1291	1291	that provide for a benchmark replacement based on or otherwise 814
1292	1292	involving a poll, survey, or inquiry for quotes or information 815
1293	1293	concerning interbank lending rates or any interest rate or 816
1294	1294
1295	1295	HB 639 2022
1296	1296
1297	1297
1298	1298
1299	1299
1300	1300	CODING: Words stricken are deletions; words underlined are additions.
1301	1301	hb0639-00
1302	1302
1303	1303	Page 35 of 77
1304	1304	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
1305	1305
1306	1306
1307	1307
1308	1308	dividend rate based on LIBOR shall be void and of no force or 817
1309	1309	effect. 818
1310	1310	(4)(a) A determining person may, but is not required to, 819
1311	1311	select on the day of or the day after the occurrence of a LIBOR 820
1312	1312	discontinuance event the recommended benchmark replacement as 821
1313	1313	the benchmark replacement. The selection of the recommended 822
1314	1314	benchmark replacement must be: 823
1315	1315	1. Irrevocable; 824
1316	1316	2. Made by the earlier of the LIBOR replac ement date, or 825
1317	1317	the latest date for selecting a benchmark replacement according 826
1318	1318	to the contract, security, or instrument; and 827
1319	1319	3. Used in any determination of the benchmark under or 828
1320	1320	with respect to the contract, security, or instrument occurring 829
1321	1321	on and after the LIBOR replacement date. 830
1322	1322	(b) Paragraph (a) applies to a contract, security, or 831
1323	1323	instrument that uses LIBOR as a benchmark and that contains 832
1324	1324	fallback provisions allowing or requiring the selection of a 833
1325	1325	benchmark replacement that is: 834
1326	1326	1. Based in any way on a LIBOR value; or 835
1327	1327	2. The substantive equivalent of paragraph (6)(a), 836
1328	1328	paragraph (6)(b), or paragraph (6)(c). 837
1329	1329	(5) If a recommended benchmark replacement becomes the 838
1330	1330	benchmark replacement for a contract, security, or instrument 839
1331	1331	under this section, then all benchmark replacement conforming 840
1332	1332
1333	1333	HB 639 2022
1334	1334
1335	1335
1336	1336
1337	1337
1338	1338	CODING: Words stricken are deletions; words underlined are additions.
1339	1339	hb0639-00
1340	1340
1341	1341	Page 36 of 77
1342	1342	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
1343	1343
1344	1344
1345	1345
1346	1346	changes that are applicable to the recommended benchmark 841
1347	1347	replacement must become an integral part of the contract, 842
1348	1348	security, or instrument by operation of law. 843
1349	1349	(6) The selection or use of a recommended benchmark 844
1350	1350	replacement as a benchmark replacement under or in respect of a 845
1351	1351	contract, security, or instrument by operation of this section 846
1352	1352	must constitute all of the following: 847
1353	1353	(a) A commercially reasonable replacement for and a 848
1354	1354	commercially substantial equivalent t o LIBOR. 849
1355	1355	(b) A reasonable, comparable, or analogous term for LIBOR 850
1356	1356	under or in respect of the contract, security, or instrument. 851
1357	1357	(c) A replacement that is based on a methodology or 852
1358	1358	information that is similar or comparable to LIBOR. 853
1359	1359	(d) Substantial performance by any person of any right or 854
1360	1360	obligation relating to or based on LIBOR under or in respect of 855
1361	1361	a contract, security, or instrument. 856
1362	1362	(7) A LIBOR discontinuance event, a LIBOR replacement 857
1363	1363	date, the selection or use of a recommended benchmark 858
1364	1364	replacement as a benchmark replacement, or the determination, 859
1365	1365	implementation, or performance of a benchmark replacement 860
1366	1366	conforming change, in each case, by operation of this section, 861
1367	1367	may not: 862
1368	1368	(a) Be deemed to impair or affect the right of any person 863
1369	1369	to receive a payment, or affect the amount or timing of the 864
1370	1370
1371	1371	HB 639 2022
1372	1372
1373	1373
1374	1374
1375	1375
1376	1376	CODING: Words stricken are deletions; words underlined are additions.
1377	1377	hb0639-00
1378	1378
1379	1379	Page 37 of 77
1380	1380	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
1381	1381
1382	1382
1383	1383
1384	1384	payment, under a contract, security, or instrument; 865
1385	1385	(b) Have the effect of discharging or excusing performance 866
1386	1386	under a contract, security, or instrument for any reason, claim, 867
1387	1387	or defense, including, but not limited to, any force majeure or 868
1388	1388	other provision in a contract, security, or instrument; 869
1389	1389	(c) Have the effect of giving any person the right to 870
1390	1390	unilaterally terminate or suspend performance under a contract, 871
1391	1391	security, or instrument; 872
1392	1392	(d) Have the effect of constituting a breach of a 873
1393	1393	contract, security, or instrument; or 874
1394	1394	(e) Have the effect of voiding or nullifying a contract, 875
1395	1395	security, or instrument. 876
1396	1396	(8) A person is not liable for damages to any other 877
1397	1397	person, and is not subject to any claim or re quest for equitable 878
1398	1398	relief, arising out of or related to the selection or use of a 879
1399	1399	recommended benchmark replacement or the determination, 880
1400	1400	implementation, or performance of a benchmark replacement 881
1401	1401	conforming change, in each case, by operation of this secti on. 882
1402	1402	The selection or use of the recommended benchmark replacement or 883
1403	1403	the determination, implementation, or performance of a benchmark 884
1404	1404	replacement conforming change may not give rise to any claim or 885
1405	1405	cause of action by any person in law or in equity. 886
1406	1406	(9) The selection or use of a recommended benchmark 887
1407	1407	replacement or the determination, implementation, or performance 888
1408	1408
1409	1409	HB 639 2022
1410	1410
1411	1411
1412	1412
1413	1413
1414	1414	CODING: Words stricken are deletions; words underlined are additions.
1415	1415	hb0639-00
1416	1416
1417	1417	Page 38 of 77
1418	1418	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
1419	1419
1420	1420
1421	1421
1422	1422	of a benchmark replacement conforming change, by operation of 889
1423	1423	this section, may not be deemed to: 890
1424	1424	(a) Be an amendment or modification of a contract, 891
1425	1425	security, or instrument. 892
1426	1426	(b) Prejudice, impair, or affect a person's rights, 893
1427	1427	interests, or obligations under or in respect of a contract, 894
1428	1428	security, or instrument. 895
1429	1429	(10) Except as provided in subsection (2) or subsection 896
1430	1430	(4), this section ma y not be interpreted as creating a negative 897
1431	1431	inference or negative presumption regarding the validity or 898
1432	1432	enforceability of any of the following: 899
1433	1433	(a) A benchmark replacement that is not a recommended 900
1434	1434	replacement benchmark. 901
1435	1435	(b) A spread adjustment, or met hod for calculating or 902
1436	1436	determining a spread adjustment, that is not a recommended 903
1437	1437	spread adjustment. 904
1438	1438	(c) A change, alteration, or modification to or in respect 905
1439	1439	of a contract, security, or instrument that is not a benchmark 906
1440	1440	replacement conforming change. 907
1441	1441	(11) This section does not alter or impair any of the 908
1442	1442	following: 909
1443	1443	(a) A written agreement by all requisite parties that, 910
1444	1444	retrospectively or prospectively, provides that a contract, 911
1445	1445	security, or instrument is not subject to this section without 912
1446	1446
1447	1447	HB 639 2022
1448	1448
1449	1449
1450	1450
1451	1451
1452	1452	CODING: Words stricken are deletions; words underlined are additions.
1453	1453	hb0639-00
1454	1454
1455	1455	Page 39 of 77
1456	1456	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
1457	1457
1458	1458
1459	1459
1460	1460	necessarily referring specifically to this section. As used in 913
1461	1461	this paragraph, the term "requisite parties" means all parties 914
1462	1462	required to amend the terms and provisions of a contract, 915
1463	1463	security, or instrument that would otherwise be altered or 916
1464	1464	affected by this secti on. 917
1465	1465	(b) A contract, security, or instrument that contains 918
1466	1466	fallback provisions that would result in a benchmark replacement 919
1467	1467	that is not based on LIBOR, including, but not limited to, the 920
1468	1468	prime rate or the federal funds rate. However, the contract, 921
1469	1469	security, or instrument is subject to subsection (3). 922
1470	1470	(c) A contract, security, or instrument subject to 923
1471	1471	subsection (4) as to which a determining person does not elect 924
1472	1472	to use a recommended benchmark replacement or as to which a 925
1473	1473	determining person elects to use a recommended benchmark 926
1474	1474	replacement before the occurrence of a LIBOR discontinuance 927
1475	1475	event. However, the contract, security, or instrument is subject 928
1476	1476	to subsection (3). 929
1477	1477	(d) The application to a recommended benchmark replacement 930
1478	1478	of any cap, floor, modifier , or spread adjustment to which LIBOR 931
1479	1479	had been subject pursuant to the terms of a contract, security, 932
1480	1480	or instrument. 933
1481	1481	(12) Notwithstanding the Uniform Commercial Code or any 934
1482	1482	other law of this state, and except as otherwise provided in 935
1483	1483	this section, this s ection applies to all contracts, securities, 936
1484	1484
1485	1485	HB 639 2022
1486	1486
1487	1487
1488	1488
1489	1489
1490	1490	CODING: Words stricken are deletions; words underlined are additions.
1491	1491	hb0639-00
1492	1492
1493	1493	Page 40 of 77
1494	1494	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
1495	1495
1496	1496
1497	1497
1498	1498	and instruments, including contracts with respect to commercial 937
1499	1499	transactions, and may not be superseded by any other law of this 938
1500	1500	state. 939
1501	1501	Section 5. Section 671.1075, Florida Statutes, is created 940
1502	1502	to read: 941
1503	1503	671.1075 Benchmark replacements for the London Interbank 942
1504	1504	Offered Rate.— 943
1505	1505	(1) As used in this section, the term: 944
1506	1506	(a) "Benchmark" means an index of interest rates or 945
1507	1507	dividend rates that is used, in whole or in part, as the basis 946
1508	1508	of, or as a reference for , calculating or determining a 947
1509	1509	valuation, payment, or other measurement under or in respect of 948
1510	1510	a contract, security, or instrument. 949
1511	1511	(b) "Benchmark replacement" means a benchmark, an interest 950
1512	1512	rate, or a dividend rate that may or may not be based, in whole 951
1513	1513	or in part, on a prior setting of LIBOR, to replace LIBOR or any 952
1514	1514	interest rate or dividend rate based on LIBOR, whether on a 953
1515	1515	temporary, permanent, or indefinite basis, under or in respect 954
1516	1516	of a contract, security, or instrument. 955
1517	1517	(c) "Benchmark replacemen t conforming change" means, with 956
1518	1518	respect to any type of contract, security, or instrument, a 957
1519	1519	technical, administrative, or operational change, alteration, or 958
1520	1520	modification that is associated with and reasonably necessary to 959
1521	1521	the use, adoption, calculation, o r implementation of a 960
1522	1522
1523	1523	HB 639 2022
1524	1524
1525	1525
1526	1526
1527	1527
1528	1528	CODING: Words stricken are deletions; words underlined are additions.
1529	1529	hb0639-00
1530	1530
1531	1531	Page 41 of 77
1532	1532	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
1533	1533
1534	1534
1535	1535
1536	1536	recommended benchmark replacement and that meets both of the 961
1537	1537	following conditions: 962
1538	1538	1. The change, alteration, or modification has been 963
1539	1539	selected or recommended by a relevant recommending body. 964
1540	1540	2. If, in the reasonable judgment of t he calculating 965
1541	1541	person, the change, alteration, or modification selected or 966
1542	1542	recommended under subparagraph 1. does not apply to the 967
1543	1543	contract, security, or instrument or is insufficient to allow 968
1544	1544	administration and calculation of the recommended benchmark 969
1545	1545	replacement, the benchmark replacement conforming change must 970
1546	1546	include other changes, alterations, or modifications that, in 971
1547	1547	the reasonable judgment of the calculating person: 972
1548	1548	a. Are necessary to allow administration and calculation 973
1549	1549	of the recommended benchm ark replacement under or in respect of 974
1550	1550	the contract, security, or instrument in a manner consistent 975
1551	1551	with market practice for substantially similar contracts, 976
1552	1552	securities, or instruments and, to the extent practicable, the 977
1553	1553	manner in which the contract, secur ity, or instrument was 978
1554	1554	administered immediately before the LIBOR replacement date; and 979
1555	1555	b. Would not result in a disposition of the contract, 980
1556	1556	security, or instrument for federal income tax purposes. 981
1557	1557	(d) "Calculating person" means, with respect to any 982
1558	1558	contract, security, or instrument, a person responsible for 983
1559	1559	calculating or determining a valuation, payment, or other 984
1560	1560
1561	1561	HB 639 2022
1562	1562
1563	1563
1564	1564
1565	1565
1566	1566	CODING: Words stricken are deletions; words underlined are additions.
1567	1567	hb0639-00
1568	1568
1569	1569	Page 42 of 77
1570	1570	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
1571	1571
1572	1572
1573	1573
1574	1574	measurement based on a benchmark. This person may be the 985
1575	1575	determining person. 986
1576	1576	(e) "Contract, security, or instrument" includes, without 987
1577	1577	limitation, any contract, agreement, mortgage, deed of trust, 988
1578	1578	lease, instrument, obligation, or security, whether representing 989
1579	1579	debt or equity, and including any interest in a corporation, 990
1580	1580	partnership, or limited liability company. 991
1581	1581	(f) "Determining person" m eans, with respect to any 992
1582	1582	contract, security, or instrument, the following persons in 993
1583	1583	decreasing order of priority: 994
1584	1584	1. A person so specified. 995
1585	1585	2. A person with the authority, right, or obligation to do 996
1586	1586	any of the following: 997
1587	1587	a. Determine the benchmark replacement that will take 998
1588	1588	effect on the LIBOR replacement date. 999
1589	1589	b. Calculate or determine a valuation, payment, or other 1000
1590	1590	measurement based on a benchmark. 1001
1591	1591	c. Notify other persons of the occurrence of a LIBOR 1002
1592	1592	discontinuance event, a LIBOR replacement date, or a benchmark 1003
1593	1593	replacement. 1004
1594	1594	(g) "Fallback provision" means a term in a contract, 1005
1595	1595	security, or instrument that sets forth a methodology or 1006
1596	1596	procedure for determining a benchmark replacement, including any 1007
1597	1597	term relating to the date on which the benchm ark replacement 1008
1598	1598
1599	1599	HB 639 2022
1600	1600
1601	1601
1602	1602
1603	1603
1604	1604	CODING: Words stricken are deletions; words underlined are additions.
1605	1605	hb0639-00
1606	1606
1607	1607	Page 43 of 77
1608	1608	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
1609	1609
1610	1610
1611	1611
1612	1612	becomes effective, without regard to whether a benchmark 1009
1613	1613	replacement can be determined in accordance with the methodology 1010
1614	1614	or procedure. 1011
1615	1615	(h) "LIBOR" means, for purposes of the application of this 1012
1616	1616	section to any particular contract, securit y, or instrument, the 1013
1617	1617	United States dollar LIBOR, formerly known as the London 1014
1618	1618	Interbank Offered Rate, as administered by ICE Benchmark 1015
1619	1619	Administration, or any predecessor or successor thereof, or any 1016
1620	1620	tenor thereof, as applicable, that is used in making any 1017
1621	1621	calculation or determination of benchmark interest rates. 1018
1622	1622	(i)1. "LIBOR discontinuance event" means the earliest to 1019
1623	1623	occur of any of the following: 1020
1624	1624	a. A public statement or publication of information by, or 1021
1625	1625	on behalf of, the administrator of LIBOR annou ncing that the 1022
1626	1626	administrator has ceased or will cease to provide LIBOR 1023
1627	1627	permanently or indefinitely, if, at the time of the statement or 1024
1628	1628	publication, there is no successor administrator that will 1025
1629	1629	continue to provide LIBOR. 1026
1630	1630	b. A public statement or publica tion of information by the 1027
1631	1631	regulatory supervisor for the administrator of LIBOR, the 1028
1632	1632	Federal Reserve System, an insolvency official with jurisdiction 1029
1633	1633	over the administrator of LIBOR, a resolution authority with 1030
1634	1634	jurisdiction over the administrator of LIBOR, or a court or an 1031
1635	1635	entity with similar insolvency or resolution authority over the 1032
1636	1636
1637	1637	HB 639 2022
1638	1638
1639	1639
1640	1640
1641	1641
1642	1642	CODING: Words stricken are deletions; words underlined are additions.
1643	1643	hb0639-00
1644	1644
1645	1645	Page 44 of 77
1646	1646	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
1647	1647
1648	1648
1649	1649
1650	1650	administrator of LIBOR, announcing that the administrator of 1033
1651	1651	LIBOR has ceased or will cease to provide LIBOR permanently or 1034
1652	1652	indefinitely, if, at the time of the statement or publication, 1035
1653	1653	there is no successor administrator that will continue to 1036
1654	1654	provide LIBOR. 1037
1655	1655	c. A public statement or publication of information by the 1038
1656	1656	regulatory supervisor for the administrator of LIBOR announcing 1039
1657	1657	that LIBOR is no longer representative. 1040
1658	1658	2. A public statement or publication of information that 1041
1659	1659	affects one or more tenors of LIBOR does not constitute a LIBOR 1042
1660	1660	discontinuance event with respect to a contract, security, or 1043
1661	1661	instrument that: 1044
1662	1662	a. Provides for only one tenor of LIBOR, if the contract, 1045
1663	1663	security, or instrument requires interpolation and the tenor can 1046
1664	1664	be interpolated from LIBOR tenors that are not so affected; or 1047
1665	1665	b. Allows a party to choose from more than one tenor of 1048
1666	1666	LIBOR and any of the tenors is not so affected or, if the 1049
1667	1667	contract, security, or instrument requires interpolation, can be 1050
1668	1668	interpolated from LIBOR tenors that are not so affected. 1051
1669	1669	(j)1. "LIBOR replacement date" means: 1052
1670	1670	a. In the case of a LIBOR discontinuance event described 1053
1671	1671	in sub-subparagraph (i)1.a. or sub -subparagraph (i)1.b., the 1054
1672	1672	later of: 1055
1673	1673	(I) The date of the public statement or publication of 1056
1674	1674
1675	1675	HB 639 2022
1676	1676
1677	1677
1678	1678
1679	1679
1680	1680	CODING: Words stricken are deletions; words underlined are additions.
1681	1681	hb0639-00
1682	1682
1683	1683	Page 45 of 77
1684	1684	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
1685	1685
1686	1686
1687	1687
1688	1688	information referenced in sub -subparagraph (i)1.a. or sub -1057
1689	1689	subparagraph (i)1.b.; or 1058
1690	1690	(II) The date on which the administrator of LIBOR 1059
1691	1691	permanently or indefinitely ceases to p rovide LIBOR. 1060
1692	1692	b. In the case of a LIBOR discontinuance event described 1061
1693	1693	in sub-subparagraph (i)1.c., the date of the public statement or 1062
1694	1694	publication of information referenced in sub -subparagraph 1063
1695	1695	(i)1.c. 1064
1696	1696	2. A date that affects one or more tenors of LIBOR does 1065
1697	1697	not constitute a LIBOR replacement date with respect to a 1066
1698	1698	contract, security, or instrument that: 1067
1699	1699	a. Provides for only one tenor of LIBOR, if the contract, 1068
1700	1700	security, or instrument requires interpolation and the tenor can 1069
1701	1701	be interpolated from LIBOR tenors that are not so affected; or 1070
1702	1702	b. Allows a party to choose from more than one tenor of 1071
1703	1703	LIBOR and any of the tenors is not so affected or, if the 1072
1704	1704	contract, security, or instrument requires interpolation, can be 1073
1705	1705	interpolated from LIBOR tenors that are not so affected. 1074
1706	1706	(k) "Recommended benchmark replacement" means, with 1075
1707	1707	respect to any particular type of contract, security, or 1076
1708	1708	instrument, a benchmark replacement based on SOFR that must 1077
1709	1709	include any recommended spread adjustment and any benchmark 1078
1710	1710	replacement conforming change that have been selected or 1079
1711	1711	recommended by a relevant recommending body with respect to the 1080
1712	1712
1713	1713	HB 639 2022
1714	1714
1715	1715
1716	1716
1717	1717
1718	1718	CODING: Words stricken are deletions; words underlined are additions.
1719	1719	hb0639-00
1720	1720
1721	1721	Page 46 of 77
1722	1722	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
1723	1723
1724	1724
1725	1725
1726	1726	type of contract, security, or instrument. 1081
1727	1727	(l) "Recommended spread adjustment" means a spread 1082
1728	1728	adjustment, or method for calculating or deter mining the spread 1083
1729	1729	adjustment, that has been selected or recommended by a relevant 1084
1730	1730	recommending body for a recommended benchmark replacement for a 1085
1731	1731	particular type of contract, security, or instrument and for a 1086
1732	1732	particular term to account for the effects of t he transition or 1087
1733	1733	change from LIBOR to a recommended benchmark replacement. This 1088
1734	1734	term may be a positive or negative value or zero. 1089
1735	1735	(m) "Relevant recommending body" means the Federal Reserve 1090
1736	1736	Board, the Federal Reserve Bank of New York, or the Alternative 1091
1737	1737	Reference Rates Committee, or any successor to any of them. 1092
1738	1738	(n) "SOFR" means, with respect to any day, the secured 1093
1739	1739	overnight financing rate published for the day by the Federal 1094
1740	1740	Reserve Bank of New York as the administrator of the benchmark, 1095
1741	1741	or a successor administrator, on the Federal Reserve Bank of New 1096
1742	1742	York's website. 1097
1743	1743	(2) On the LIBOR replacement date, the recommended 1098
1744	1744	benchmark replacement, by operation of law, shall be the 1099
1745	1745	benchmark replacement for a contract, security, or instrument 1100
1746	1746	that uses LIBOR as a benchmark and that: 1101
1747	1747	(a) Does not contain any fallback provision; or 1102
1748	1748	(b) Contains fallback provisions resulting in a benchmark 1103
1749	1749	replacement, other than a recommended benchmark replacement, 1104
1750	1750
1751	1751	HB 639 2022
1752	1752
1753	1753
1754	1754
1755	1755
1756	1756	CODING: Words stricken are deletions; words underlined are additions.
1757	1757	hb0639-00
1758	1758
1759	1759	Page 47 of 77
1760	1760	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
1761	1761
1762	1762
1763	1763
1764	1764	that is based in any way on a LIBOR value. 1105
1765	1765	(3) After the occurrence of a LIBOR discontinuance event, 1106
1766	1766	any fallback provisions in a contract, security, or instrument 1107
1767	1767	that provide for a benchmark replacement based on or otherwise 1108
1768	1768	involving a poll, survey, or inquiry for quotes or information 1109
1769	1769	concerning interbank lend ing rates or any interest rate or 1110
1770	1770	dividend rate based on LIBOR shall be void and of no force or 1111
1771	1771	effect. 1112
1772	1772	(4)(a) A determining person may, but is not required to, 1113
1773	1773	select on the day of or the day after the occurrence of a LIBOR 1114
1774	1774	discontinuance event the reco mmended benchmark replacement as 1115
1775	1775	the benchmark replacement. The selection of the recommended 1116
1776	1776	benchmark replacement must be: 1117
1777	1777	1. Irrevocable; 1118
1778	1778	2. Made by the earlier of the LIBOR replacement date, or 1119
1779	1779	the latest date for selecting a benchmark replacement according 1120
1780	1780	to the contract, security, or instrument; and 1121
1781	1781	3. Used in any determination of the benchmark under or 1122
1782	1782	with respect to the contract, security, or instrument occurring 1123
1783	1783	on and after the LIBOR replacement date. 1124
1784	1784	(b) Paragraph (a) applies to a contract, security, or 1125
1785	1785	instrument that uses LIBOR as a benchmark and that contains 1126
1786	1786	fallback provisions allowing or requiring the selection of a 1127
1787	1787	benchmark replacement that is: 1128
1788	1788
1789	1789	HB 639 2022
1790	1790
1791	1791
1792	1792
1793	1793
1794	1794	CODING: Words stricken are deletions; words underlined are additions.
1795	1795	hb0639-00
1796	1796
1797	1797	Page 48 of 77
1798	1798	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
1799	1799
1800	1800
1801	1801
1802	1802	1. Based in any way on a LIBOR value; or 1129
1803	1803	2. The substantive equivalent of para graph (6)(a), 1130
1804	1804	paragraph (6)(b), or paragraph (6)(c). 1131
1805	1805	(5) If a recommended benchmark replacement becomes the 1132
1806	1806	benchmark replacement for a contract, security, or instrument 1133
1807	1807	under this section, then all benchmark replacement conforming 1134
1808	1808	changes that are appli cable to the recommended benchmark 1135
1809	1809	replacement must become an integral part of the contract, 1136
1810	1810	security, or instrument by operation of law. 1137
1811	1811	(6) The selection or use of a recommended benchmark 1138
1812	1812	replacement as a benchmark replacement under or in respect of a 1139
1813	1813	contract, security, or instrument by operation of this section 1140
1814	1814	must constitute all of the following: 1141
1815	1815	(a) A commercially reasonable replacement for and a 1142
1816	1816	commercially substantial equivalent to LIBOR. 1143
1817	1817	(b) A reasonable, comparable, or analogous term for L IBOR 1144
1818	1818	under or in respect of the contract, security, or instrument. 1145
1819	1819	(c) A replacement that is based on a methodology or 1146
1820	1820	information that is similar or comparable to LIBOR. 1147
1821	1821	(d) Substantial performance by any person of any right or 1148
1822	1822	obligation relating to or based on LIBOR under or in respect of 1149
1823	1823	a contract, security, or instrument. 1150
1824	1824	(7) A LIBOR discontinuance event, a LIBOR replacement 1151
1825	1825	date, the selection or use of a recommended benchmark 1152
1826	1826
1827	1827	HB 639 2022
1828	1828
1829	1829
1830	1830
1831	1831
1832	1832	CODING: Words stricken are deletions; words underlined are additions.
1833	1833	hb0639-00
1834	1834
1835	1835	Page 49 of 77
1836	1836	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
1837	1837
1838	1838
1839	1839
1840	1840	replacement as a benchmark replacement, or the determination, 1153
1841	1841	implementation, or performance of a benchmark replacement 1154
1842	1842	conforming change, in each case, by operation of this section, 1155
1843	1843	may not: 1156
1844	1844	(a) Be deemed to impair or affect the right of any person 1157
1845	1845	to receive a payment, or affect the amount or timing of the 1158
1846	1846	payment, under a contract, security, or instrument; 1159
1847	1847	(b) Have the effect of discharging or excusing performance 1160
1848	1848	under a contract, security, or instrument for any reason, claim, 1161
1849	1849	or defense, including, but not limited to, any force majeure or 1162
1850	1850	other provision in a contr act, security, or instrument; 1163
1851	1851	(c) Have the effect of giving any person the right to 1164
1852	1852	unilaterally terminate or suspend performance under a contract, 1165
1853	1853	security, or instrument; 1166
1854	1854	(d) Have the effect of constituting a breach of a 1167
1855	1855	contract, security, or instru ment; or 1168
1856	1856	(e) Have the effect of voiding or nullifying a contract, 1169
1857	1857	security, or instrument. 1170
1858	1858	(8) A person is not liable for damages to any other 1171
1859	1859	person, and is not subject to any claim or request for equitable 1172
1860	1860	relief, arising out of or related to the sel ection or use of a 1173
1861	1861	recommended benchmark replacement or the determination, 1174
1862	1862	implementation, or performance of a benchmark replacement 1175
1863	1863	conforming change, in each case, by operation of this section. 1176
1864	1864
1865	1865	HB 639 2022
1866	1866
1867	1867
1868	1868
1869	1869
1870	1870	CODING: Words stricken are deletions; words underlined are additions.
1871	1871	hb0639-00
1872	1872
1873	1873	Page 50 of 77
1874	1874	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
1875	1875
1876	1876
1877	1877
1878	1878	The selection or use of the recommended benchmark replacemen t or 1177
1879	1879	the determination, implementation, or performance of a benchmark 1178
1880	1880	replacement conforming change may not give rise to any claim or 1179
1881	1881	cause of action by any person in law or in equity. 1180
1882	1882	(9) The selection or use of a recommended benchmark 1181
1883	1883	replacement or the determination, implementation, or performance 1182
1884	1884	of a benchmark replacement conforming change, by operation of 1183
1885	1885	this section, may not be deemed to: 1184
1886	1886	(a) Be an amendment or modification of a contract, 1185
1887	1887	security, or instrument. 1186
1888	1888	(b) Prejudice, impair, or affe ct a person's rights, 1187
1889	1889	interests, or obligations under or in respect of a contract, 1188
1890	1890	security, or instrument. 1189
1891	1891	(10) Except as provided in subsection (2) or subsection 1190
1892	1892	(4), this section may not be interpreted as creating a negative 1191
1893	1893	inference or negative pres umption regarding the validity or 1192
1894	1894	enforceability of any of the following: 1193
1895	1895	(a) A benchmark replacement that is not a recommended 1194
1896	1896	replacement benchmark. 1195
1897	1897	(b) A spread adjustment, or method for calculating or 1196
1898	1898	determining a spread adjustment, that is not a recommended 1197
1899	1899	spread adjustment. 1198
1900	1900	(c) A change, alteration, or modification to or in respect 1199
1901	1901	of a contract, security, or instrument that is not a benchmark 1200
1902	1902
1903	1903	HB 639 2022
1904	1904
1905	1905
1906	1906
1907	1907
1908	1908	CODING: Words stricken are deletions; words underlined are additions.
1909	1909	hb0639-00
1910	1910
1911	1911	Page 51 of 77
1912	1912	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
1913	1913
1914	1914
1915	1915
1916	1916	replacement conforming change. 1201
1917	1917	(11) This section does not alter or impair any of the 1202
1918	1918	following: 1203
1919	1919	(a) A written agreement by all requisite parties that, 1204
1920	1920	retrospectively or prospectively, provides that a contract, 1205
1921	1921	security, or instrument is not subject to this section without 1206
1922	1922	necessarily referring specifically to this section. As used in 1207
1923	1923	this paragraph, the term "requisite parties" means all parties 1208
1924	1924	required to amend the terms and provisions of a contract, 1209
1925	1925	security, or instrument that would otherwise be altered or 1210
1926	1926	affected by this section. 1211
1927	1927	(b) A contract, security, or instrument that contains 1212
1928	1928	fallback provisions that would result in a benchmark replacement 1213
1929	1929	that is not based on LIBOR, including, but not limited to, the 1214
1930	1930	prime rate or the federal funds rate. However, the contract, 1215
1931	1931	security, or instrument is subject to subsection (3). 1216
1932	1932	(c) A contract, secur ity, or instrument subject to 1217
1933	1933	subsection (4) as to which a determining person does not elect 1218
1934	1934	to use a recommended benchmark replacement or as to which a 1219
1935	1935	determining person elects to use a recommended benchmark 1220
1936	1936	replacement before the occurrence of a LIBOR d iscontinuance 1221
1937	1937	event. However, the contract, security, or instrument is subject 1222
1938	1938	to subsection (3). 1223
1939	1939	(d) The application to a recommended benchmark replacement 1224
1940	1940
1941	1941	HB 639 2022
1942	1942
1943	1943
1944	1944
1945	1945
1946	1946	CODING: Words stricken are deletions; words underlined are additions.
1947	1947	hb0639-00
1948	1948
1949	1949	Page 52 of 77
1950	1950	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
1951	1951
1952	1952
1953	1953
1954	1954	of any cap, floor, modifier, or spread adjustment to which LIBOR 1225
1955	1955	had been subject pursuant to the terms of a contract, security, 1226
1956	1956	or instrument. 1227
1957	1957	(12) Notwithstanding the Uniform Commercial Code or any 1228
1958	1958	other law of this state, and except as otherwise provided in 1229
1959	1959	this section, this section applies to all contracts, securities, 1230
1960	1960	and instruments, includin g contracts with respect to commercial 1231
1961	1961	transactions, and may not be superseded by any other law of this 1232
1962	1962	state. 1233
1963	1963	Section 6. Section 689.0705, Florida Statutes, is created 1234
1964	1964	to read: 1235
1965	1965	689.0705 Benchmark replacements for the London Interbank 1236
1966	1966	Offered Rate.— 1237
1967	1967	(1) As used in this section, the term: 1238
1968	1968	(a) "Benchmark" means an index of interest rates or 1239
1969	1969	dividend rates that is used, in whole or in part, as the basis 1240
1970	1970	of, or as a reference for, calculating or determining a 1241
1971	1971	valuation, payment, or other measurement u nder or in respect of 1242
1972	1972	a contract, security, or instrument. 1243
1973	1973	(b) "Benchmark replacement" means a benchmark, an interest 1244
1974	1974	rate, or a dividend rate that may or may not be based, in whole 1245
1975	1975	or in part, on a prior setting of LIBOR, to replace LIBOR or any 1246
1976	1976	interest rate or dividend rate based on LIBOR, whether on a 1247
1977	1977	temporary, permanent, or indefinite basis, under or in respect 1248
1978	1978
1979	1979	HB 639 2022
1980	1980
1981	1981
1982	1982
1983	1983
1984	1984	CODING: Words stricken are deletions; words underlined are additions.
1985	1985	hb0639-00
1986	1986
1987	1987	Page 53 of 77
1988	1988	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
1989	1989
1990	1990
1991	1991
1992	1992	of a contract, security, or instrument. 1249
1993	1993	(c) "Benchmark replacement conforming change" means, with 1250
1994	1994	respect to any type of contract, securit y, or instrument, a 1251
1995	1995	technical, administrative, or operational change, alteration, or 1252
1996	1996	modification that is associated with and reasonably necessary to 1253
1997	1997	the use, adoption, calculation, or implementation of a 1254
1998	1998	recommended benchmark replacement and that meets bo th of the 1255
1999	1999	following conditions: 1256
2000	2000	1. The change, alteration, or modification has been 1257
2001	2001	selected or recommended by a relevant recommending body. 1258
2002	2002	2. If, in the reasonable judgment of the calculating 1259
2003	2003	person, the change, alteration, or modification selected o r 1260
2004	2004	recommended under subparagraph 1. does not apply to the 1261
2005	2005	contract, security, or instrument or is insufficient to allow 1262
2006	2006	administration and calculation of the recommended benchmark 1263
2007	2007	replacement, the benchmark replacement conforming change must 1264
2008	2008	include other changes, alterations, or modifications that, in 1265
2009	2009	the reasonable judgment of the calculating person: 1266
2010	2010	a. Are necessary to allow administration and calculation 1267
2011	2011	of the recommended benchmark replacement under or in respect of 1268
2012	2012	the contract, security, or instrum ent in a manner consistent 1269
2013	2013	with market practice for substantially similar contracts, 1270
2014	2014	securities, or instruments and, to the extent practicable, the 1271
2015	2015	manner in which the contract, security, or instrument was 1272
2016	2016
2017	2017	HB 639 2022
2018	2018
2019	2019
2020	2020
2021	2021
2022	2022	CODING: Words stricken are deletions; words underlined are additions.
2023	2023	hb0639-00
2024	2024
2025	2025	Page 54 of 77
2026	2026	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
2027	2027
2028	2028
2029	2029
2030	2030	administered immediately before the LIBOR replacem ent date; and 1273
2031	2031	b. Would not result in a disposition of the contract, 1274
2032	2032	security, or instrument for federal income tax purposes. 1275
2033	2033	(d) "Calculating person" means, with respect to any 1276
2034	2034	contract, security, or instrument, a person responsible for 1277
2035	2035	calculating or determining a valuation, payment, or other 1278
2036	2036	measurement based on a benchmark. This person may be the 1279
2037	2037	determining person. 1280
2038	2038	(e) "Contract, security, or instrument" includes, without 1281
2039	2039	limitation, any contract, agreement, mortgage, deed of trust, 1282
2040	2040	lease, instrument, obligation, or security, whether representing 1283
2041	2041	debt or equity, and including any interest in a corporation, 1284
2042	2042	partnership, or limited liability company. 1285
2043	2043	(f) "Determining person" means, with respect to any 1286
2044	2044	contract, security, or instrument, the followin g persons in 1287
2045	2045	decreasing order of priority: 1288
2046	2046	1. A person so specified. 1289
2047	2047	2. A person with the authority, right, or obligation to do 1290
2048	2048	any of the following: 1291
2049	2049	a. Determine the benchmark replacement that will take 1292
2050	2050	effect on the LIBOR replacement date. 1293
2051	2051	b. Calculate or determine a valuation, payment, or other 1294
2052	2052	measurement based on a benchmark. 1295
2053	2053	c. Notify other persons of the occurrence of a LIBOR 1296
2054	2054
2055	2055	HB 639 2022
2056	2056
2057	2057
2058	2058
2059	2059
2060	2060	CODING: Words stricken are deletions; words underlined are additions.
2061	2061	hb0639-00
2062	2062
2063	2063	Page 55 of 77
2064	2064	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
2065	2065
2066	2066
2067	2067
2068	2068	discontinuance event, a LIBOR replacement date, or a benchmark 1297
2069	2069	replacement. 1298
2070	2070	(g) "Fallback provision" means a term in a contract, 1299
2071	2071	security, or instrument that sets forth a methodology or 1300
2072	2072	procedure for determining a benchmark replacement, including any 1301
2073	2073	term relating to the date on which the benchmark replacement 1302
2074	2074	becomes effective, without regard to whether a benchmark 1303
2075	2075	replacement can be determined in accordance with the methodology 1304
2076	2076	or procedure. 1305
2077	2077	(h) "LIBOR" means, for purposes of the application of this 1306
2078	2078	section to any particular contract, security, or instrument, the 1307
2079	2079	United States dollar LIBOR, formerly known as the Lo ndon 1308
2080	2080	Interbank Offered Rate, as administered by ICE Benchmark 1309
2081	2081	Administration, or any predecessor or successor thereof, or any 1310
2082	2082	tenor thereof, as applicable, that is used in making any 1311
2083	2083	calculation or determination of benchmark interest rates. 1312
2084	2084	(i)1. "LIBOR discontinuance event" means the earliest to 1313
2085	2085	occur of any of the following: 1314
2086	2086	a. A public statement or publication of information by, or 1315
2087	2087	on behalf of, the administrator of LIBOR announcing that the 1316
2088	2088	administrator has ceased or will cease to provide LIBOR 1317
2089	2089	permanently or indefinitely, if, at the time of the statement or 1318
2090	2090	publication, there is no successor administrator that will 1319
2091	2091	continue to provide LIBOR. 1320
2092	2092
2093	2093	HB 639 2022
2094	2094
2095	2095
2096	2096
2097	2097
2098	2098	CODING: Words stricken are deletions; words underlined are additions.
2099	2099	hb0639-00
2100	2100
2101	2101	Page 56 of 77
2102	2102	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
2103	2103
2104	2104
2105	2105
2106	2106	b. A public statement or publication of information by the 1321
2107	2107	regulatory supervisor for the administrator of LIBOR, the 1322
2108	2108	Federal Reserve System, an insolvency official with jurisdiction 1323
2109	2109	over the administrator of LIBOR, a resolution authority with 1324
2110	2110	jurisdiction over the administrator of LIBOR, or a court or an 1325
2111	2111	entity with similar insolvency or resolution authority o ver the 1326
2112	2112	administrator of LIBOR, announcing that the administrator of 1327
2113	2113	LIBOR has ceased or will cease to provide LIBOR permanently or 1328
2114	2114	indefinitely, if, at the time of the statement or publication, 1329
2115	2115	there is no successor administrator that will continue to 1330
2116	2116	provide LIBOR. 1331
2117	2117	c. A public statement or publication of information by the 1332
2118	2118	regulatory supervisor for the administrator of LIBOR announcing 1333
2119	2119	that LIBOR is no longer representative. 1334
2120	2120	2. A public statement or publication of information that 1335
2121	2121	affects one or more tenors of LIBOR does not constitute a LIBOR 1336
2122	2122	discontinuance event with respect to a contract, security, or 1337
2123	2123	instrument that: 1338
2124	2124	a. Provides for only one tenor of LIBOR, if the contract, 1339
2125	2125	security, or instrument requires interpolation and the tenor can 1340
2126	2126	be interpolated from LIBOR tenors that are not so affected; or 1341
2127	2127	b. Allows a party to choose from more than one tenor of 1342
2128	2128	LIBOR and any of the tenors is not so affected or, if the 1343
2129	2129	contract, security, or instrument requires interpolation, can be 1344
2130	2130
2131	2131	HB 639 2022
2132	2132
2133	2133
2134	2134
2135	2135
2136	2136	CODING: Words stricken are deletions; words underlined are additions.
2137	2137	hb0639-00
2138	2138
2139	2139	Page 57 of 77
2140	2140	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
2141	2141
2142	2142
2143	2143
2144	2144	interpolated from LI BOR tenors that are not so affected. 1345
2145	2145	(j)1. "LIBOR replacement date" means: 1346
2146	2146	a. In the case of a LIBOR discontinuance event described 1347
2147	2147	in sub-subparagraph (i)1.a. or sub -subparagraph (i)1.b., the 1348
2148	2148	later of: 1349
2149	2149	(I) The date of the public statement or publication of 1350
2150	2150	information referenced in sub -subparagraph (i)1.a. or sub -1351
2151	2151	subparagraph (i)1.b.; or 1352
2152	2152	(II) The date on which the administrator of LIBOR 1353
2153	2153	permanently or indefinitely ceases to provide LIBOR. 1354
2154	2154	b. In the case of a LIBOR discontinuance event desc ribed 1355
2155	2155	in sub-subparagraph (i)1.c., the date of the public statement or 1356
2156	2156	publication of information referenced in sub -subparagraph 1357
2157	2157	(i)1.c. 1358
2158	2158	2. A date that affects one or more tenors of LIBOR does 1359
2159	2159	not constitute a LIBOR replacement date with respect to a 1360
2160	2160	contract, security, or instrument that: 1361
2161	2161	a. Provides for only one tenor of LIBOR, if the contract, 1362
2162	2162	security, or instrument requires interpolation and the tenor can 1363
2163	2163	be interpolated from LIBOR tenors that are not so affected; or 1364
2164	2164	b. Allows a party to choose f rom more than one tenor of 1365
2165	2165	LIBOR and any of the tenors is not so affected or, if the 1366
2166	2166	contract, security, or instrument requires interpolation, can be 1367
2167	2167	interpolated from LIBOR tenors that are not so affected. 1368
2168	2168
2169	2169	HB 639 2022
2170	2170
2171	2171
2172	2172
2173	2173
2174	2174	CODING: Words stricken are deletions; words underlined are additions.
2175	2175	hb0639-00
2176	2176
2177	2177	Page 58 of 77
2178	2178	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
2179	2179
2180	2180
2181	2181
2182	2182	(k) "Recommended benchmark replacement" means, with 1369
2183	2183	respect to any particular type of contract, security, or 1370
2184	2184	instrument, a benchmark replacement based on SOFR that must 1371
2185	2185	include any recommended spread adjustment and any benchmark 1372
2186	2186	replacement conforming change that have been selected or 1373
2187	2187	recommended by a relevant recommending body with respect to the 1374
2188	2188	type of contract, security, or instrument. 1375
2189	2189	(l) "Recommended spread adjustment" means a spread 1376
2190	2190	adjustment, or method for calculating or determining the spread 1377
2191	2191	adjustment, that has been selected or recommended by a relevant 1378
2192	2192	recommending body for a recommended benchmark replacement for a 1379
2193	2193	particular type of contract, security, or instrument and for a 1380
2194	2194	particular term to account for the effects of the transition or 1381
2195	2195	change from LIBOR to a recommended benchmark repla cement. This 1382
2196	2196	term may be a positive or negative value or zero. 1383
2197	2197	(m) "Relevant recommending body" means the Federal Reserve 1384
2198	2198	Board, the Federal Reserve Bank of New York, or the Alternative 1385
2199	2199	Reference Rates Committee, or any successor to any of them. 1386
2200	2200	(n) "SOFR" means, with respect to any day, the secured 1387
2201	2201	overnight financing rate published for the day by the Federal 1388
2202	2202	Reserve Bank of New York as the administrator of the benchmark, 1389
2203	2203	or a successor administrator, on the Federal Reserve Bank of New 1390
2204	2204	York's website. 1391
2205	2205	(2) On the LIBOR replacement date, the recommended 1392
2206	2206
2207	2207	HB 639 2022
2208	2208
2209	2209
2210	2210
2211	2211
2212	2212	CODING: Words stricken are deletions; words underlined are additions.
2213	2213	hb0639-00
2214	2214
2215	2215	Page 59 of 77
2216	2216	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
2217	2217
2218	2218
2219	2219
2220	2220	benchmark replacement, by operation of law, shall be the 1393
2221	2221	benchmark replacement for a contract, security, or instrument 1394
2222	2222	that uses LIBOR as a benchmark and that: 1395
2223	2223	(a) Does not contain any fallback provisi on; or 1396
2224	2224	(b) Contains fallback provisions resulting in a benchmark 1397
2225	2225	replacement, other than a recommended benchmark replacement, 1398
2226	2226	that is based in any way on a LIBOR value. 1399
2227	2227	(3) After the occurrence of a LIBOR discontinuance event, 1400
2228	2228	any fallback provisions i n a contract, security, or instrument 1401
2229	2229	that provide for a benchmark replacement based on or otherwise 1402
2230	2230	involving a poll, survey, or inquiry for quotes or information 1403
2231	2231	concerning interbank lending rates or any interest rate or 1404
2232	2232	dividend rate based on LIBOR shal l be void and of no force or 1405
2233	2233	effect. 1406
2234	2234	(4)(a) A determining person may, but is not required to, 1407
2235	2235	select on the day of or the day after the occurrence of a LIBOR 1408
2236	2236	discontinuance event the recommended benchmark replacement as 1409
2237	2237	the benchmark replacement. The sel ection of the recommended 1410
2238	2238	benchmark replacement must be: 1411
2239	2239	1. Irrevocable; 1412
2240	2240	2. Made by the earlier of the LIBOR replacement date, or 1413
2241	2241	the latest date for selecting a benchmark replacement according 1414
2242	2242	to the contract, security, or instrument; and 1415
2243	2243	3. Used in any determination of the benchmark under or 1416
2244	2244
2245	2245	HB 639 2022
2246	2246
2247	2247
2248	2248
2249	2249
2250	2250	CODING: Words stricken are deletions; words underlined are additions.
2251	2251	hb0639-00
2252	2252
2253	2253	Page 60 of 77
2254	2254	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
2255	2255
2256	2256
2257	2257
2258	2258	with respect to the contract, security, or instrument occurring 1417
2259	2259	on and after the LIBOR replacement date. 1418
2260	2260	(b) Paragraph (a) applies to a contract, security, or 1419
2261	2261	instrument that uses LIBOR as a benchmark and that contains 1420
2262	2262	fallback provisions allowing or requiring the selection of a 1421
2263	2263	benchmark replacement that is: 1422
2264	2264	1. Based in any way on a LIBOR value; or 1423
2265	2265	2. The substantive equivalent of paragraph (6)(a), 1424
2266	2266	paragraph (6)(b), or paragraph (6)(c). 1425
2267	2267	(5) If a recommended benchmark replacement becomes the 1426
2268	2268	benchmark replacement for a contract, security, or instrument 1427
2269	2269	under this section, then all benchmark replacement conforming 1428
2270	2270	changes that are applicable to the recommended benchmark 1429
2271	2271	replacement must become an integral pa rt of the contract, 1430
2272	2272	security, or instrument by operation of law. 1431
2273	2273	(6) The selection or use of a recommended benchmark 1432
2274	2274	replacement as a benchmark replacement under or in respect of a 1433
2275	2275	contract, security, or instrument by operation of this section 1434
2276	2276	must constitute all of the following: 1435
2277	2277	(a) A commercially reasonable replacement for and a 1436
2278	2278	commercially substantial equivalent to LIBOR. 1437
2279	2279	(b) A reasonable, comparable, or analogous term for LIBOR 1438
2280	2280	under or in respect of the contract, security, or instrument. 1439
2281	2281	(c) A replacement that is based on a methodology or 1440
2282	2282
2283	2283	HB 639 2022
2284	2284
2285	2285
2286	2286
2287	2287
2288	2288	CODING: Words stricken are deletions; words underlined are additions.
2289	2289	hb0639-00
2290	2290
2291	2291	Page 61 of 77
2292	2292	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
2293	2293
2294	2294
2295	2295
2296	2296	information that is similar or comparable to LIBOR. 1441
2297	2297	(d) Substantial performance by any person of any right or 1442
2298	2298	obligation relating to or based on LIBOR under or in respect of 1443
2299	2299	a contract, security, or instrum ent. 1444
2300	2300	(7) A LIBOR discontinuance event, a LIBOR replacement 1445
2301	2301	date, the selection or use of a recommended benchmark 1446
2302	2302	replacement as a benchmark replacement, or the determination, 1447
2303	2303	implementation, or performance of a benchmark replacement 1448
2304	2304	conforming change, in each case, by operation of this section, 1449
2305	2305	may not: 1450
2306	2306	(a) Be deemed to impair or affect the right of any person 1451
2307	2307	to receive a payment, or affect the amount or timing of the 1452
2308	2308	payment, under a contract, security, or instrument; 1453
2309	2309	(b) Have the effect of discharg ing or excusing performance 1454
2310	2310	under a contract, security, or instrument for any reason, claim, 1455
2311	2311	or defense, including, but not limited to, any force majeure or 1456
2312	2312	other provision in a contract, security, or instrument; 1457
2313	2313	(c) Have the effect of giving any person the right to 1458
2314	2314	unilaterally terminate or suspend performance under a contract, 1459
2315	2315	security, or instrument; 1460
2316	2316	(d) Have the effect of constituting a breach of a 1461
2317	2317	contract, security, or instrument; or 1462
2318	2318	(e) Have the effect of voiding or nullifying a contract, 1463
2319	2319	security, or instrument. 1464
2320	2320
2321	2321	HB 639 2022
2322	2322
2323	2323
2324	2324
2325	2325
2326	2326	CODING: Words stricken are deletions; words underlined are additions.
2327	2327	hb0639-00
2328	2328
2329	2329	Page 62 of 77
2330	2330	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
2331	2331
2332	2332
2333	2333
2334	2334	(8) A person is not liable for damages to any other 1465
2335	2335	person, and is not subject to any claim or request for equitable 1466
2336	2336	relief, arising out of or related to the selection or use of a 1467
2337	2337	recommended benchmark replacement or the determination , 1468
2338	2338	implementation, or performance of a benchmark replacement 1469
2339	2339	conforming change, in each case, by operation of this section. 1470
2340	2340	The selection or use of the recommended benchmark replacement or 1471
2341	2341	the determination, implementation, or performance of a benchmark 1472
2342	2342	replacement conforming change may not give rise to any claim or 1473
2343	2343	cause of action by any person in law or in equity. 1474
2344	2344	(9) The selection or use of a recommended benchmark 1475
2345	2345	replacement or the determination, implementation, or performance 1476
2346	2346	of a benchmark replacemen t conforming change, by operation of 1477
2347	2347	this section, may not be deemed to: 1478
2348	2348	(a) Be an amendment or modification of a contract, 1479
2349	2349	security, or instrument. 1480
2350	2350	(b) Prejudice, impair, or affect a person's rights, 1481
2351	2351	interests, or obligations under or in respect of a contract, 1482
2352	2352	security, or instrument. 1483
2353	2353	(10) Except as provided in subsection (2) or subsection 1484
2354	2354	(4), this section may not be interpreted as creating a negative 1485
2355	2355	inference or negative presumption regarding the validity or 1486
2356	2356	enforceability of any of the following: 1487
2357	2357	(a) A benchmark replacement that is not a recommended 1488
2358	2358
2359	2359	HB 639 2022
2360	2360
2361	2361
2362	2362
2363	2363
2364	2364	CODING: Words stricken are deletions; words underlined are additions.
2365	2365	hb0639-00
2366	2366
2367	2367	Page 63 of 77
2368	2368	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
2369	2369
2370	2370
2371	2371
2372	2372	replacement benchmark. 1489
2373	2373	(b) A spread adjustment, or method for calculating or 1490
2374	2374	determining a spread adjustment, that is not a recommended 1491
2375	2375	spread adjustment. 1492
2376	2376	(c) A change, alteration, or modificatio n to or in respect 1493
2377	2377	of a contract, security, or instrument that is not a benchmark 1494
2378	2378	replacement conforming change. 1495
2379	2379	(11) This section does not alter or impair any of the 1496
2380	2380	following: 1497
2381	2381	(a) A written agreement by all requisite parties that, 1498
2382	2382	retrospectively or prospectively, provides that a contract, 1499
2383	2383	security, or instrument is not subject to this section without 1500
2384	2384	necessarily referring specifically to this section. As used in 1501
2385	2385	this paragraph, the term "requisite parties" means all parties 1502
2386	2386	required to amend the term s and provisions of a contract, 1503
2387	2387	security, or instrument that would otherwise be altered or 1504
2388	2388	affected by this section. 1505
2389	2389	(b) A contract, security, or instrument that contains 1506
2390	2390	fallback provisions that would result in a benchmark replacement 1507
2391	2391	that is not based on LIBOR, including, but not limited to, the 1508
2392	2392	prime rate or the federal funds rate. However, the contract, 1509
2393	2393	security, or instrument is subject to subsection (3). 1510
2394	2394	(c) A contract, security, or instrument subject to 1511
2395	2395	subsection (4) as to which a determining pe rson does not elect 1512
2396	2396
2397	2397	HB 639 2022
2398	2398
2399	2399
2400	2400
2401	2401
2402	2402	CODING: Words stricken are deletions; words underlined are additions.
2403	2403	hb0639-00
2404	2404
2405	2405	Page 64 of 77
2406	2406	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
2407	2407
2408	2408
2409	2409
2410	2410	to use a recommended benchmark replacement or as to which a 1513
2411	2411	determining person elects to use a recommended benchmark 1514
2412	2412	replacement before the occurrence of a LIBOR discontinuance 1515
2413	2413	event. However, the contract, security, or instrument is su bject 1516
2414	2414	to subsection (3). 1517
2415	2415	(d) The application to a recommended benchmark replacement 1518
2416	2416	of any cap, floor, modifier, or spread adjustment to which LIBOR 1519
2417	2417	had been subject pursuant to the terms of a contract, security, 1520
2418	2418	or instrument. 1521
2419	2419	(12) Notwithstanding the Uniform Commercial Code or any 1522
2420	2420	other law of this state, and except as otherwise provided in 1523
2421	2421	this section, this section applies to all contracts, securities, 1524
2422	2422	and instruments, including contracts with respect to commercial 1525
2423	2423	transactions, and may not be super seded by any other law of this 1526
2424	2424	state. 1527
2425	2425	Section 7. Section 697.015, Florida Statutes, is created 1528
2426	2426	to read: 1529
2427	2427	697.015 Benchmark replacements for the London Interbank 1530
2428	2428	Offered Rate.— 1531
2429	2429	(1) As used in this section, the term: 1532
2430	2430	(a) "Benchmark" means an index o f interest rates or 1533
2431	2431	dividend rates that is used, in whole or in part, as the basis 1534
2432	2432	of, or as a reference for, calculating or determining a 1535
2433	2433	valuation, payment, or other measurement under or in respect of 1536
2434	2434
2435	2435	HB 639 2022
2436	2436
2437	2437
2438	2438
2439	2439
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2441	2441	hb0639-00
2442	2442
2443	2443	Page 65 of 77
2444	2444	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
2445	2445
2446	2446
2447	2447
2448	2448	a contract, security, or instrument. 1537
2449	2449	(b) "Benchmark replacement" means a benchmark, an interest 1538
2450	2450	rate, or a dividend rate that may or may not be based, in whole 1539
2451	2451	or in part, on a prior setting of LIBOR, to replace LIBOR or any 1540
2452	2452	interest rate or dividend rate based on LIBOR, whether on a 1541
2453	2453	temporary, permanent, or indefinite basis, under or in respect 1542
2454	2454	of a contract, security, or instrument. 1543
2455	2455	(c) "Benchmark replacement conforming change" means, with 1544
2456	2456	respect to any type of contract, security, or instrument, a 1545
2457	2457	technical, administrative, or operational change, alter ation, or 1546
2458	2458	modification that is associated with and reasonably necessary to 1547
2459	2459	the use, adoption, calculation, or implementation of a 1548
2460	2460	recommended benchmark replacement and that meets both of the 1549
2461	2461	following conditions: 1550
2462	2462	1. The change, alteration, or modificatio n has been 1551
2463	2463	selected or recommended by a relevant recommending body. 1552
2464	2464	2. If, in the reasonable judgment of the calculating 1553
2465	2465	person, the change, alteration, or modification selected or 1554
2466	2466	recommended under subparagraph 1. does not apply to the 1555
2467	2467	contract, security, or instrument or is insufficient to allow 1556
2468	2468	administration and calculation of the recommended benchmark 1557
2469	2469	replacement, the benchmark replacement conforming change must 1558
2470	2470	include other changes, alterations, or modifications that, in 1559
2471	2471	the reasonable judgment of the calculating person: 1560
2472	2472
2473	2473	HB 639 2022
2474	2474
2475	2475
2476	2476
2477	2477
2478	2478	CODING: Words stricken are deletions; words underlined are additions.
2479	2479	hb0639-00
2480	2480
2481	2481	Page 66 of 77
2482	2482	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
2483	2483
2484	2484
2485	2485
2486	2486	a. Are necessary to allow administration and calculation 1561
2487	2487	of the recommended benchmark replacement under or in respect of 1562
2488	2488	the contract, security, or instrument in a manner consistent 1563
2489	2489	with market practice for substantially similar c ontracts, 1564
2490	2490	securities, or instruments and, to the extent practicable, the 1565
2491	2491	manner in which the contract, security, or instrument was 1566
2492	2492	administered immediately before the LIBOR replacement date; and 1567
2493	2493	b. Would not result in a disposition of the contract, 1568
2494	2494	security, or instrument for federal income tax purposes. 1569
2495	2495	(d) "Calculating person" means, with respect to any 1570
2496	2496	contract, security, or instrument, a person responsible for 1571
2497	2497	calculating or determining a valuation, payment, or other 1572
2498	2498	measurement based on a benc hmark. This person may be the 1573
2499	2499	determining person. 1574
2500	2500	(e) "Contract, security, or instrument" includes, without 1575
2501	2501	limitation, any contract, agreement, mortgage, deed of trust, 1576
2502	2502	lease, instrument, obligation, or security, whether representing 1577
2503	2503	debt or equity, and including any interest in a corporation, 1578
2504	2504	partnership, or limited liability company. 1579
2505	2505	(f) "Determining person" means, with respect to any 1580
2506	2506	contract, security, or instrument, the following persons in 1581
2507	2507	decreasing order of priority: 1582
2508	2508	1. A person so specified. 1583
2509	2509	2. A person with the authority, right, or obligation to do 1584
2510	2510
2511	2511	HB 639 2022
2512	2512
2513	2513
2514	2514
2515	2515
2516	2516	CODING: Words stricken are deletions; words underlined are additions.
2517	2517	hb0639-00
2518	2518
2519	2519	Page 67 of 77
2520	2520	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
2521	2521
2522	2522
2523	2523
2524	2524	any of the following: 1585
2525	2525	a. Determine the benchmark replacement that will take 1586
2526	2526	effect on the LIBOR replacement date. 1587
2527	2527	b. Calculate or determine a valuation, payment, or other 1588
2528	2528	measurement based on a benchmark. 1589
2529	2529	c. Notify other persons of the occurrence of a LIBOR 1590
2530	2530	discontinuance event, a LIBOR replacement date, or a benchmark 1591
2531	2531	replacement. 1592
2532	2532	(g) "Fallback provision" means a term in a contract, 1593
2533	2533	security, or instrument that sets forth a methodology o r 1594
2534	2534	procedure for determining a benchmark replacement, including any 1595
2535	2535	term relating to the date on which the benchmark replacement 1596
2536	2536	becomes effective, without regard to whether a benchmark 1597
2537	2537	replacement can be determined in accordance with the methodology 1598
2538	2538	or procedure. 1599
2539	2539	(h) "LIBOR" means, for purposes of the application of this 1600
2540	2540	section to any particular contract, security, or instrument, the 1601
2541	2541	United States dollar LIBOR, formerly known as the London 1602
2542	2542	Interbank Offered Rate, as administered by ICE Benchmark 1603
2543	2543	Administration, or any predecessor or successor thereof, or any 1604
2544	2544	tenor thereof, as applicable, that is used in making any 1605
2545	2545	calculation or determination of benchmark interest rates. 1606
2546	2546	(i)1. "LIBOR discontinuance event" means the earliest to 1607
2547	2547	occur of any of the follow ing: 1608
2548	2548
2549	2549	HB 639 2022
2550	2550
2551	2551
2552	2552
2553	2553
2554	2554	CODING: Words stricken are deletions; words underlined are additions.
2555	2555	hb0639-00
2556	2556
2557	2557	Page 68 of 77
2558	2558	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
2559	2559
2560	2560
2561	2561
2562	2562	a. A public statement or publication of information by, or 1609
2563	2563	on behalf of, the administrator of LIBOR announcing that the 1610
2564	2564	administrator has ceased or will cease to provide LIBOR 1611
2565	2565	permanently or indefinitely, if, at the time of the statement or 1612
2566	2566	publication, there is no successor administrator that will 1613
2567	2567	continue to provide LIBOR. 1614
2568	2568	b. A public statement or publication of information by the 1615
2569	2569	regulatory supervisor for the administrator of LIBOR, the 1616
2570	2570	Federal Reserve System, an insolvency official with jurisdi ction 1617
2571	2571	over the administrator of LIBOR, a resolution authority with 1618
2572	2572	jurisdiction over the administrator of LIBOR, or a court or an 1619
2573	2573	entity with similar insolvency or resolution authority over the 1620
2574	2574	administrator of LIBOR, announcing that the administrator of 1621
2575	2575	LIBOR has ceased or will cease to provide LIBOR permanently or 1622
2576	2576	indefinitely, if, at the time of the statement or publication, 1623
2577	2577	there is no successor administrator that will continue to 1624
2578	2578	provide LIBOR. 1625
2579	2579	c. A public statement or publication of information by t he 1626
2580	2580	regulatory supervisor for the administrator of LIBOR announcing 1627
2581	2581	that LIBOR is no longer representative. 1628
2582	2582	2. A public statement or publication of information that 1629
2583	2583	affects one or more tenors of LIBOR does not constitute a LIBOR 1630
2584	2584	discontinuance event with respect to a contract, security, or 1631
2585	2585	instrument that: 1632
2586	2586
2587	2587	HB 639 2022
2588	2588
2589	2589
2590	2590
2591	2591
2592	2592	CODING: Words stricken are deletions; words underlined are additions.
2593	2593	hb0639-00
2594	2594
2595	2595	Page 69 of 77
2596	2596	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
2597	2597
2598	2598
2599	2599
2600	2600	a. Provides for only one tenor of LIBOR, if the contract, 1633
2601	2601	security, or instrument requires interpolation and the tenor can 1634
2602	2602	be interpolated from LIBOR tenors that are not so affected; or 1635
2603	2603	b. Allows a party to choose from more than one tenor of 1636
2604	2604	LIBOR and any of the tenors is not so affected or, if the 1637
2605	2605	contract, security, or instrument requires interpolation, can be 1638
2606	2606	interpolated from LIBOR tenors that are not so affected. 1639
2607	2607	(j)1. "LIBOR replacement date" means: 1640
2608	2608	a. In the case of a LIBOR discontinuance event described 1641
2609	2609	in sub-subparagraph (i)1.a. or sub -subparagraph (i)1.b., the 1642
2610	2610	later of: 1643
2611	2611	(I) The date of the public statement or publication of 1644
2612	2612	information referenced in sub -subparagraph (i)1.a. or sub -1645
2613	2613	subparagraph (i)1.b.; or 1646
2614	2614	(II) The date on which the administrator of LIBOR 1647
2615	2615	permanently or indefinitely ceases to provide LIBOR. 1648
2616	2616	b. In the case of a LIBOR discontinuance event described 1649
2617	2617	in sub-subparagraph (i)1.c., the date of the public statement or 1650
2618	2618	publication of information referenced in sub -subparagraph 1651
2619	2619	(i)1.c. 1652
2620	2620	2. A date that affects one or more tenors of LIBOR does 1653
2621	2621	not constitute a LIBOR replacement date with respect to a 1654
2622	2622	contract, security, or instrument that: 1655
2623	2623	a. Provides for only one tenor of LIBO R, if the contract, 1656
2624	2624
2625	2625	HB 639 2022
2626	2626
2627	2627
2628	2628
2629	2629
2630	2630	CODING: Words stricken are deletions; words underlined are additions.
2631	2631	hb0639-00
2632	2632
2633	2633	Page 70 of 77
2634	2634	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
2635	2635
2636	2636
2637	2637
2638	2638	security, or instrument requires interpolation and the tenor can 1657
2639	2639	be interpolated from LIBOR tenors that are not so affected; or 1658
2640	2640	b. Allows a party to choose from more than one tenor of 1659
2641	2641	LIBOR and any of the tenors is not so affected or, if the 1660
2642	2642	contract, security, or instrument requires interpolation, can be 1661
2643	2643	interpolated from LIBOR tenors that are not so affected. 1662
2644	2644	(k) "Recommended benchmark replacement" means, with 1663
2645	2645	respect to any particular type of contract, security, or 1664
2646	2646	instrument, a benchmark replacement based on SOFR that must 1665
2647	2647	include any recommended spread adjustment and any benchmark 1666
2648	2648	replacement conforming change that have been selected or 1667
2649	2649	recommended by a relevant recommending body with respect to the 1668
2650	2650	type of contract, security, o r instrument. 1669
2651	2651	(l) "Recommended spread adjustment" means a spread 1670
2652	2652	adjustment, or method for calculating or determining the spread 1671
2653	2653	adjustment, that has been selected or recommended by a relevant 1672
2654	2654	recommending body for a recommended benchmark replacement for a 1673
2655	2655	particular type of contract, security, or instrument and for a 1674
2656	2656	particular term to account for the effects of the transition or 1675
2657	2657	change from LIBOR to a recommended benchmark replacement. This 1676
2658	2658	term may be a positive or negative value or zero. 1677
2659	2659	(m) "Relevant recommending body" means the Federal Reserve 1678
2660	2660	Board, the Federal Reserve Bank of New York, or the Alternative 1679
2661	2661	Reference Rates Committee, or any successor to any of them. 1680
2662	2662
2663	2663	HB 639 2022
2664	2664
2665	2665
2666	2666
2667	2667
2668	2668	CODING: Words stricken are deletions; words underlined are additions.
2669	2669	hb0639-00
2670	2670
2671	2671	Page 71 of 77
2672	2672	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
2673	2673
2674	2674
2675	2675
2676	2676	(n) "SOFR" means, with respect to any day, the secured 1681
2677	2677	overnight financing rate published for the day by the Federal 1682
2678	2678	Reserve Bank of New York as the administrator of the benchmark, 1683
2679	2679	or a successor administrator, on the Federal Reserve Bank of New 1684
2680	2680	York's website. 1685
2681	2681	(2) On the LIBOR replacement date, the recommended 1686
2682	2682	benchmark replacement , by operation of law, shall be the 1687
2683	2683	benchmark replacement for a contract, security, or instrument 1688
2684	2684	that uses LIBOR as a benchmark and that: 1689
2685	2685	(a) Does not contain any fallback provision; or 1690
2686	2686	(b) Contains fallback provisions resulting in a benchmark 1691
2687	2687	replacement, other than a recommended benchmark replacement, 1692
2688	2688	that is based in any way on a LIBOR value. 1693
2689	2689	(3) After the occurrence of a LIBOR discontinuance event, 1694
2690	2690	any fallback provisions in a contract, security, or instrument 1695
2691	2691	that provide for a benchmark replace ment based on or otherwise 1696
2692	2692	involving a poll, survey, or inquiry for quotes or information 1697
2693	2693	concerning interbank lending rates or any interest rate or 1698
2694	2694	dividend rate based on LIBOR shall be void and of no force or 1699
2695	2695	effect. 1700
2696	2696	(4)(a) A determining person may, bu t is not required to, 1701
2697	2697	select on the day of or the day after the occurrence of a LIBOR 1702
2698	2698	discontinuance event the recommended benchmark replacement as 1703
2699	2699	the benchmark replacement. The selection of the recommended 1704
2700	2700
2701	2701	HB 639 2022
2702	2702
2703	2703
2704	2704
2705	2705
2706	2706	CODING: Words stricken are deletions; words underlined are additions.
2707	2707	hb0639-00
2708	2708
2709	2709	Page 72 of 77
2710	2710	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
2711	2711
2712	2712
2713	2713
2714	2714	benchmark replacement must be: 1705
2715	2715	1. Irrevocable; 1706
2716	2716	2. Made by the earlier of the LIBOR replacement date, or 1707
2717	2717	the latest date for selecting a benchmark replacement according 1708
2718	2718	to the contract, security, or instrument; and 1709
2719	2719	3. Used in any determination of the benchmark under or 1710
2720	2720	with respect to the contract, security, or instrument occurring 1711
2721	2721	on and after the LIBOR replacement date. 1712
2722	2722	(b) Paragraph (a) applies to a contract, security, or 1713
2723	2723	instrument that uses LIBOR as a benchmark and that contains 1714
2724	2724	fallback provisions allowing or requiring the selection of a 1715
2725	2725	benchmark replacement that is: 1716
2726	2726	1. Based in any way on a LIBOR value; or 1717
2727	2727	2. The substantive equivalent of paragraph (6)(a), 1718
2728	2728	paragraph (6)(b), or paragraph (6)(c). 1719
2729	2729	(5) If a recommended benchmark replacement becomes the 1720
2730	2730	benchmark replacement for a contract, security, or instrument 1721
2731	2731	under this section, then all benchmark replacement conforming 1722
2732	2732	changes that are applicable to the recommended benchmark 1723
2733	2733	replacement must become an integral part of the contract, 1724
2734	2734	security, or instrument by operation of law. 1725
2735	2735	(6) The selection or use of a recommended benchmark 1726
2736	2736	replacement as a benchmark replacement under or in respect of a 1727
2737	2737	contract, security, or instrument by operation of this section 1728
2738	2738
2739	2739	HB 639 2022
2740	2740
2741	2741
2742	2742
2743	2743
2744	2744	CODING: Words stricken are deletions; words underlined are additions.
2745	2745	hb0639-00
2746	2746
2747	2747	Page 73 of 77
2748	2748	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
2749	2749
2750	2750
2751	2751
2752	2752	must constitute all of the following: 1729
2753	2753	(a) A commercially reasonable replacement fo r and a 1730
2754	2754	commercially substantial equivalent to LIBOR. 1731
2755	2755	(b) A reasonable, comparable, or analogous term for LIBOR 1732
2756	2756	under or in respect of the contract, security, or instrument. 1733
2757	2757	(c) A replacement that is based on a methodology or 1734
2758	2758	information that is simila r or comparable to LIBOR. 1735
2759	2759	(d) Substantial performance by any person of any right or 1736
2760	2760	obligation relating to or based on LIBOR under or in respect of 1737
2761	2761	a contract, security, or instrument. 1738
2762	2762	(7) A LIBOR discontinuance event, a LIBOR replacement 1739
2763	2763	date, the selection or use of a recommended benchmark 1740
2764	2764	replacement as a benchmark replacement, or the determination, 1741
2765	2765	implementation, or performance of a benchmark replacement 1742
2766	2766	conforming change, in each case, by operation of this section, 1743
2767	2767	may not: 1744
2768	2768	(a) Be deemed to impa ir or affect the right of any person 1745
2769	2769	to receive a payment, or affect the amount or timing of the 1746
2770	2770	payment, under a contract, security, or instrument; 1747
2771	2771	(b) Have the effect of discharging or excusing performance 1748
2772	2772	under a contract, security, or instrument for any reason, claim, 1749
2773	2773	or defense, including, but not limited to, any force majeure or 1750
2774	2774	other provision in a contract, security, or instrument; 1751
2775	2775	(c) Have the effect of giving any person the right to 1752
2776	2776
2777	2777	HB 639 2022
2778	2778
2779	2779
2780	2780
2781	2781
2782	2782	CODING: Words stricken are deletions; words underlined are additions.
2783	2783	hb0639-00
2784	2784
2785	2785	Page 74 of 77
2786	2786	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
2787	2787
2788	2788
2789	2789
2790	2790	unilaterally terminate or suspend performance under a contrac t, 1753
2791	2791	security, or instrument; 1754
2792	2792	(d) Have the effect of constituting a breach of a 1755
2793	2793	contract, security, or instrument; or 1756
2794	2794	(e) Have the effect of voiding or nullifying a contract, 1757
2795	2795	security, or instrument. 1758
2796	2796	(8) A person is not liable for damages to any other 1759
2797	2797	person, and is not subject to any claim or request for equitable 1760
2798	2798	relief, arising out of or related to the selection or use of a 1761
2799	2799	recommended benchmark replacement or the determination, 1762
2800	2800	implementation, or performance of a benchmark replacement 1763
2801	2801	conforming change, in each case, by operation of this section. 1764
2802	2802	The selection or use of the recommended benchmark replacement or 1765
2803	2803	the determination, implementation, or performance of a benchmark 1766
2804	2804	replacement conforming change may not give rise to any claim or 1767
2805	2805	cause of action by any person in law or in equity. 1768
2806	2806	(9) The selection or use of a recommended benchmark 1769
2807	2807	replacement or the determination, implementation, or performance 1770
2808	2808	of a benchmark replacement conforming change, by operation of 1771
2809	2809	this section, may not be deemed to: 1772
2810	2810	(a) Be an amendment or modification of a contract, 1773
2811	2811	security, or instrument. 1774
2812	2812	(b) Prejudice, impair, or affect a person's rights, 1775
2813	2813	interests, or obligations under or in respect of a contract, 1776
2814	2814
2815	2815	HB 639 2022
2816	2816
2817	2817
2818	2818
2819	2819
2820	2820	CODING: Words stricken are deletions; words underlined are additions.
2821	2821	hb0639-00
2822	2822
2823	2823	Page 75 of 77
2824	2824	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
2825	2825
2826	2826
2827	2827
2828	2828	security, or instrument. 1777
2829	2829	(10) Except as provided in subsection (2) or subsection 1778
2830	2830	(4), this section may not be interpreted as creating a negative 1779
2831	2831	inference or negative presumption regarding the validity or 1780
2832	2832	enforceability of any of the following: 1781
2833	2833	(a) A benchmark replacement that is not a recommended 1782
2834	2834	replacement benchmark. 1783
2835	2835	(b) A spread adjustment, or method for calculating or 1784
2836	2836	determining a spread adjustment, that is not a recommended 1785
2837	2837	spread adjustment. 1786
2838	2838	(c) A change, alteration, or modification to or in respect 1787
2839	2839	of a contract, security, or instrument that is not a benchmark 1788
2840	2840	replacement conforming change. 1789
2841	2841	(11) This section does not alter or impair any of the 1790
2842	2842	following: 1791
2843	2843	(a) A written agreement by all requisite parties that, 1792
2844	2844	retrospectively or prospectively, provides that a contract, 1793
2845	2845	security, or instrument is n ot subject to this section without 1794
2846	2846	necessarily referring specifically to this section. As used in 1795
2847	2847	this paragraph, the term "requisite parties" means all parties 1796
2848	2848	required to amend the terms and provisions of a contract, 1797
2849	2849	security, or instrument that would ot herwise be altered or 1798
2850	2850	affected by this section. 1799
2851	2851	(b) A contract, security, or instrument that contains 1800
2852	2852
2853	2853	HB 639 2022
2854	2854
2855	2855
2856	2856
2857	2857
2858	2858	CODING: Words stricken are deletions; words underlined are additions.
2859	2859	hb0639-00
2860	2860
2861	2861	Page 76 of 77
2862	2862	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
2863	2863
2864	2864
2865	2865
2866	2866	fallback provisions that would result in a benchmark replacement 1801
2867	2867	that is not based on LIBOR, including, but not limited to, the 1802
2868	2868	prime rate or the federa l funds rate. However, the contract, 1803
2869	2869	security, or instrument is subject to subsection (3). 1804
2870	2870	(c) A contract, security, or instrument subject to 1805
2871	2871	subsection (4) as to which a determining person does not elect 1806
2872	2872	to use a recommended benchmark replacement or as to which a 1807
2873	2873	determining person elects to use a recommended benchmark 1808
2874	2874	replacement before the occurrence of a LIBOR discontinuance 1809
2875	2875	event. However, the contract, security, or instrument is subject 1810
2876	2876	to subsection (3). 1811
2877	2877	(d) The application to a recommended bench mark replacement 1812
2878	2878	of any cap, floor, modifier, or spread adjustment to which LIBOR 1813
2879	2879	had been subject pursuant to the terms of a contract, security, 1814
2880	2880	or instrument. 1815
2881	2881	(12) Notwithstanding the Uniform Commercial Code or any 1816
2882	2882	other law of this state, and except a s otherwise provided in 1817
2883	2883	this section, this section applies to all contracts, securities, 1818
2884	2884	and instruments, including contracts with respect to commercial 1819
2885	2885	transactions, and may not be superseded by any other law of this 1820
2886	2886	state. 1821
2887	2887	Section 8. This act is remedial in nature and applies 1822
2888	2888	retroactively to all contracts, agreements, mortgages, deeds of 1823
2889	2889	trust, leases, instruments, obligations, or securities, whether 1824
2890	2890
2891	2891	HB 639 2022
2892	2892
2893	2893
2894	2894
2895	2895
2896	2896	CODING: Words stricken are deletions; words underlined are additions.
2897	2897	hb0639-00
2898	2898
2899	2899	Page 77 of 77
2900	2900	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
2901	2901
2902	2902
2903	2903
2904	2904	representing debt or equity, and including all interests in a 1825
2905	2905	corporation, partnership, or limited li ability company, in 1826
2906	2906	existence on December 31, 2021. 1827
2907	2907	Section 9. This act shall take effect upon becoming a law. 1828