The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Education
BILL: SB 1552
INTRODUCER: Senator Gruters
SUBJECT: Direct-support Organization for the Florida Prepaid College Board
DATE: January 24, 2022
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Brick Bouck ED Pre-meeting
2. RC
I. Summary:
SB 1552 saves from repeal the Stanley G. Tate Florida Prepaid College Foundation, Inc., which
is a direct-support organization for the Florida Prepaid College Board created to administer the
Florida Prepaid Tuition Scholarship Program and other scholarship programs approved by the
Florida Prepaid College Board.
The bill takes effect July 1, 2022.
II. Present Situation:
Citizen Support Organizations and Direct-Support Organizations
Citizen support organizations (CSOs) and direct-support organizations (DSOs) are statutorily
created private entities that are generally required to be non-profit corporations, and are
authorized to carry out specific tasks in support of public entities or public causes. The functions
and purpose of a CSO or DSO are prescribed by its enacting statute and, for most, by a written
contract with the agency the CSO or DSO was created to support.
CSO and DSO Transparency and Reporting Requirements
In 2014, the Legislature created s. 20.058, F.S., establishing a comprehensive set of transparency
and reporting requirements for CSOs and DSOs that are created or authorized pursuant to law or
executive order and created, approved, or administered by a state agency.
1
Specifically, the law
requires each CSO and DSO to annually submit, by August 1, the following information related
to its organization, mission, and finances to the agency it supports:
2
The name, mailing address, telephone number, and website address of the organization;
The statutory authority or executive order that created the organization;
1
Chapter 2014-96, L.O.F.
2
Section 20.058(1), F.S.
REVISED: BILL: SB 1552 Page 2
A brief description of the mission of, and results obtained by, the organization;
A brief description of the organization’s plans for the next three fiscal years;
A copy of the organization’s code of ethics;
and
A copy of the organization’s most recent federal Internal Revenue Service (IRS) Return of
Organization Exempt from Income Tax form (Form 990).
3
Each agency receiving the above information must make the information available to the public
through the agency’s website. If the CSO or DSO maintains a website, the agency’s website
must provide a link to the website of the CSO or DSO.
4
Additionally, any contract between an
agency and a CSO or DSO must be contingent upon the CSO or DSO submitting and posting the
information.
5
If a CSO or DSO fails to submit the required information for two consecutive
years, the agency must terminate the contract with the CSO or DSO.
6
The contract must also
include a provision for ending operations and returning state-issued funds to the state if the
authorizing statute is repealed, the contract is terminated, or the organization is dissolved.
7
By August 15 of each year, the agency must report to the Governor, the President of the Senate,
the Speaker of the House of Representatives, and the Office of Program Policy Analysis and
Government Accountability (OPPAGA) the information provided by the CSO or DSO. The
report must also include a recommendation by the agency, with supporting rationale, to continue,
terminate, or modify the agency’s association with each CSO or DSO.
8
Lastly, a law creating or authorizing the creation of a CSO or DSO must state that the creation or
authorization for the CSO or DSO is repealed on October 1 of the fifth year after enactment,
unless reviewed and saved from repeal by the Legislature.
CSO and DSO Audit Requirements
Section 215.981, F.S., requires each CSO and DSO created or authorized pursuant to law with
annual expenditures in excess of $100,000 to provide for an annual financial audit of its accounts
and records.
9
The audit must be conducted by an independent certified public accountant in
accordance with rules adopted by the Auditor General and the state agency that created,
approved, or administers the CSO or DSO. The audit report must be submitted within nine
months after the end of the fiscal year to the Auditor General and to the state agency the CSO or
DSO supports.
Additionally, the Auditor General may conduct audits or other engagements of the accounts and
records of the CSO or DSO, pursuant to his or her own authority, or at the direction of the
3
The IRS Form 990 is an annual information return required to be filed with the IRS by most organizations exempt from
federal income tax under 26 U.S.C. 501.
4
Section 20.058(2), F.S.
5
Section 20.058(4), F.S.
6
Id.
7
Id.
8
Section 20.058(3), F.S.
9
The independent audit requirement does not apply to a CSO or DSO for a university, district board of trustees of a
community college, or district school board. Additionally, the expenditure threshold for an independent audit is $300,000 for
a CSO or DSO for the Department of Environmental Protection and the Department of Agriculture and Consumer Services. BILL: SB 1552 Page 3
Legislative Auditing Committee.
10
The Auditor General is authorized to require and receive any
records from the CSO or DSO, or its independent auditor.
11
CSO and DSO Ethics Code Requirement
Section 112.3251, F.S., requires a CSO or DSO created or authorized pursuant to law to adopt its
own ethics code. The ethics code must contain the specified standards of conduct and disclosures
provided in ss. 112.313 and 112.3143(2), F.S. A CSO or DSO may adopt additional or more
stringent standards of conduct and disclosure requirements and must conspicuously post its code
of ethics on its website.
12
Florida Prepaid College Board
The Florida Prepaid College Board (Board) administers the Stanley G. Tate Florida Prepaid
College Program (prepaid program) and the Florida College Savings Program (savings program),
and performs other specified essential governmental functions.
13
Stanley G. Tate Florida Prepaid College Foundation
In 1989, the Legislature authorized the Board to establish a DSO.
14
The Board established the
Florida Prepaid College Foundation, Inc.,
15
(Foundation) in 1990 as a public/private partnership
to provide scholarships to students who may not have otherwise had the opportunity to go to
college.
16
The Foundation administers the Florida Prepaid Tuition Scholarship Program (Scholarship
Tuition for At-Risk Students, or STARS Program).
17
This program provides economically
disadvantaged youth with prepaid postsecondary tuition scholarships.
18
The Foundation has
10
Section 11.45(3)(d), F.S.
11
Id.
12
Section 112.3251, F.S.
13
Section 1009.971(1), F.S. See also ss. 1009.97-1009.988, F.S. The Board is assigned to and administratively housed within
the State Board of Administration, but it independently exercises specified powers and duties. The Board consists of seven
members, composed of the Attorney General, the Chief Financial Officer, the Chancellor of the State University System, the
Chancellor of the Division of Florida Colleges, and three members appointed by the Governor and subject to confirmation by
the Senate. Section 1009.971(1) and (2), F.S.
14
Section 1, ch. 89-316, L.O.F.
15
The Foundation was renamed the Stanley G. Tate Florida Prepaid College Foundation, Inc., in 2012. See Florida Prepaid
College Foundation, Amendment and Name Change (2012), available at
http://search.sunbiz.org/Inquiry/CorporationSearch/ByName (search for “Florida Prepaid College Foundation”, then follow
“Florida Prepaid College Foundation, Inc.” hyperlink).
16
Stanley G. Tate Florida Prepaid College Foundation, 2020 Annual Report, available at
https://www.floridaprepaidcollegefoundation.com/wp-content/uploads/2021/06/2020-Florida-Prepaid-College-Foundation-
Annual-Report-Digital.pdf, at 6.
17
Sections 1009.983(8), 1009.984, F.S.; Stanley G. Tate Florida Prepaid College Foundation, 2020 Annual Report, available
at https://www.floridaprepaidcollegefoundation.com/wp-content/uploads/2021/06/2020-Florida-Prepaid-College-Foundation-
Annual-Report-Digital.pdf, at 10.
18
Section 1009.984, F.S. BILL: SB 1552 Page 4
established additional scholarship programs, which include
the Black History Month Scholarship
and the Hispanic Heritage Month Scholarship.
19
The Board is required to certify that the Foundation operates in a manner consistent with the
goals of the Board and in the best interest of the state.
20
The Foundation is required to be:
21
A Florida not-for-profit corporation registered, incorporated, organized, and operated in
compliance with chapter 617.
Organized exclusively to receive, hold, invest, and administer property and to make
expenditures on behalf of the board.
The Foundation has awarded more than 51,000 Florida Prepaid College Plan scholarships, and
more than 32,600 Foundation scholarship recipients have gone to college using their benefits.
22
The STARS Program remains the Foundation’s largest initiative, representing 80 percent of the
scholarships purchased by the Foundation.
23
Legislative Review: Findings and Recommendations
Senate professional staff reviewed documents related to the Foundation for compliance with
accountability and authorizing statutes. The Foundation appears to be in compliance with such
statutes. Findings and recommendations are summarized below.
The Foundation’s Compliance with Accountability Requirements
Requirement: The Foundation is required to incorporate as a Not-for-Profit Corporation.
24
Finding: The Foundation appears to have met this requirement. The Foundation is listed
as an active Florida Not-for-Profit Corporation with the Florida Division of Corporations.
All annual reports have been filed going back to April 5, 1995. A copy of each annual
report is available online.
25
Requirement: The Foundation is required to be organized and operated exclusively to receive,
hold, invest, and administer property and to make expenditures to or for the benefit of the
Board.
26
19
Stanley G. Tate Florida Prepaid College Foundation, 2020 Annual Report, available at
https://www.floridaprepaidcollegefoundation.com/wp-content/uploads/2021/06/2020-Florida-Prepaid-College-Foundation-
Annual-Report-Digital.pdf, at 17.
20
Section 1009.983(1)(c), F.S.
21
Section 1009.983(1), F.S.
22
Stanley G. Tate Florida Prepaid College Foundation, 2020 Annual Report, available at
https://www.floridaprepaidcollegefoundation.com/wp-content/uploads/2021/06/2020-Florida-Prepaid-College-Foundation-
Annual-Report-Digital.pdf, at 4.
23
Id.
24
Section 1009.983(1)(a), F.S.
25
Florida Division of Corporations, Search Records, Detail by Entity Name,
http://search.sunbiz.org/Inquiry/CorporationSearch/SearchResultDetail?inquirytype=EntityName&directionType=Initial&sea
rchNameOrder=FLORIDAPREPAIDCOLLEG EFOUNDATIO%20N353070&aggregateId=domnp-n35307-f4bbb7a4-2964-
48c1-91c1-
0462741579f9&searchTerm=Florida%20Prepaid%20College%20Foundation&listNameOrder=FLORIDAPREPAIDCOLLE
GEFOUNDATIO%20N353070 (last visited Jan. 21, 2022).
26
Section 1009.983(1)(b), F.S. BILL: SB 1552 Page 5
Finding: The Foundation appears to have met this requirement. The by-laws of the
Foundation confirm the Foundation is organized and operated exclusively for the benefit
of the Board.
27
Requirement: The chair of the Board is required to serve as a director of the Foundation. The
chair of the Board and the executive director of the Board are required to jointly name, at a
minimum, four other individuals to serve as directors of the organization.
28
Findings: The Foundation meets this requirement. The chair of the Board is also the
chair of the Foundation.
29
The Foundation has confirmed that the Foundation complies
with the requirement for the appointment of the Foundation’s directors.
30
Requirement: By August 1 of each year, the Foundation must submit the following information
to the Board:
31
The name, mailing address, telephone number, and website address of the Foundation.
The statutory authority or executive order pursuant to which the Foundation was created.
A brief description of the mission of, and results obtained by, the Foundation.
A brief description of the plans of the Foundation for the next 3 fiscal years.
A copy of the Foundation’s code of ethics.
A copy of the Foundation’s most recent federal Internal Revenue Service Return of
Organization Exempt from Income Tax form (Form 990).
Finding: The Foundation’s annual disclosure contains all required information.
32
However, the Internal Revenue Service has determined that the Foundation is exempt
from the requirement of filing Form 990.
33
Requirement: The Board must make the information that is required in the annual disclosure
report available to the public through the Board’s website. If the organization maintains a
website, the agency’s website must provide a link to the organization’s website.
34
Finding: The Board’s website includes a link to the Foundation’s website and includes
the Foundation’s required annual disclosure report.
35
Requirement: The Foundation’s ethics code must be conspicuously posted on the Foundation’s
website and address the following standards of conduct:
36
27
Stanley G. Tate Florida Prepaid College Foundation, By-Laws of the Florida Prepaid College Foundation, Inc. (2020), at
2.
28
Section 1009.983(5), F.S.
29
See Florida Prepaid College Foundation, Board Members, https://www.floridaprepaidcollegefoundation.com/about-
us/board-members-staff/ (last visited Jan. 21, 2022), and Florida Prepaid College Board, Florida Prepaid College Board
Members, https://www.myfloridaprepaid.com/about-us/board-members/ (last visited Jan. 21, 2022).
30
Email, Florida Prepaid College Board (Sept. 14, 2021).
31
Section 20.058(1), F.S.
32
Stanley G. Tate Florida Prepaid College Foundation, Required Disclosure to s. 20.058, F.S. (July 21, 2021), available at
https://www.floridaprepaidcollegefoundation.com/wp-content/uploads/2021/07/2021-Foundation-Disclosure-Required-
pursuant-to-Section-20.058-Florida-Statutes.058-Florida-Statutes-1.pdf.
33
Id, at 11.
34
Section 20.058(2), F.S.
35
Florida Prepaid College Foundation, Board Reports & Plans, https://www.myfloridaprepaid.com/about-us/board-reports/
(last visited Jan. 21, 2022).
36
Sections 112.313 and 112.3251, F.S. BILL: SB 1552 Page 6
Solicitation or acceptance of gifts.
Unauthorized compensation.
Voting on salary and expenses.
Misuse of public position for private gain.
Disclosure or use of certain information for personal gain.
Postemployment restrictions.
Employees holding office.
Professional and occupational licensing of Foundation board of directors members.
The Foundation’s ethics code must address the requirements that a state public officer may not
vote on any matter that the officer knows would inure to his or her special private gain or loss.
37
Finding: The ethics code adopted by the Foundation is included within the Foundation’s
annual required disclosure, which is published on the Foundation’s website.
38
The
published Code of Ethics is the policy of the State Board of Administration but does not
appear to address postemployment restrictions of personnel. As authorized by s.
1009.983(6), F.S., however, the Foundation operates solely through services provided by
employees of the Board,
39
who are subject as public officers or employees of agencies to
the standards of conduct set forth in chapter 112, F.S. In the event the Foundation decides
to employ its own personnel, the Foundation must ensure its ethics code satisfies the
requirements as set forth in s. 112.3251, F.S.
Requirement: The Foundation must provide for an annual financial audit.
40
Finding: The Foundation has met this requirement. Each year the Foundation is audited
by an independent auditor. Annual audits from 2010 – 2020 are posted on the
Foundation’s website.
41
The Foundation has submitted the audits to the Auditor General
42
and the Board.
43
Requirement: By August 15 of each year, the Board must report to the Governor, the President
of the Senate, the Speaker of the House of Representatives, and the OPPAGA the information
provided by the Foundation. The report must also include a recommendation by the Board, with
supporting rationale, to continue, terminate, or modify the Board’s association with the
Foundation.
44
37
Sections 112.3251 and 112.3143(2), F.S.
38
Stanley G. Tate Florida Prepaid College Foundation, Required Disclosure to s. 20.058, F.S. (July 21, 2021), available at
https://www.floridaprepaidcollegefoundation.com/wp-content/uploads/2021/07/2021-Foundation-Disclosure-Required-
pursuant-to-Section-20.058-Florida-Statutes.058-Florida-Statutes-1.pdf, at 3.
39
Email, Florida Prepaid College Board (Sept. 15, 2021).
40
Section 215.981, F.S.
41
Stanley G. Tate Florida Prepaid College Foundation, Financial Statements,
https://www.floridaprepaidcollegefoundation.com/resources/news-publications-and-events/ (last visited Jan. 21, 2022).
42
Florida Auditor General, Stanley G. Tate Florida Prepaid College Foundation,
https://flauditor.gov/pages/nonprofit_forprofit%20pages/stanley%20g%20tate%20florida%20prepaid%20college%20foundat
ion.htm (last visited Jan. 21, 2022).
43
Florida Prepaid College Board, Board Reports & Plans: Financial Statements (2020), available at
https://www.myfloridaprepaid.com/wp-content/uploads/2020-Florida-Prepaid-College-Board-Financial-Statements.pdf at 17.
44
Section 20.058(3), F.S. BILL: SB 1552 Page 7
Finding: The Board provided the Foundation’s required annual disclosure prior to the
August 15 deadline.
45
In the required annual disclosure report the Board recommended
continued association with the Foundation.
46
Requirement: The contract between the Board and the Foundation must be contingent upon the
Foundation’s submission and posting of information required to be submitted to the Board. The
contract must also include a provision for the orderly cessation of operations and reversion to the
state of state funds held in trust by the Foundation within 30 days after its authorizing statute is
repealed, the contract is terminated, or the Foundation is dissolved. If the Foundation fails to
submit the required information for two consecutive years, the Board chair must terminate any
contract between the Board and the Foundation.
47
In addition, the contract must provide for:
48
Approval of the articles of incorporation and bylaws of the Foundation by the Board.
Submission of an annual budget for the approval of the Board. The budget must comply with
rules adopted by the Board.
Certification by the Board that the Foundation is complying with the terms of the contract
and in a manner consistent with the goals and purposes of the Board and in the best interest
of the state. Such certification must be made annually and reported in the official minutes of
a meeting of the Board.
The fiscal year of the Foundation, which must begin July 1 of each year and end June 30 of
the following year.
The disclosure of material provisions of the contract and of the distinction between the Board
and the Foundation to donors of gifts, contributions, or bequests, and such disclosure on all
promotional and fundraising publications.
Finding: The contract between the Board and Foundation, effective December 9, 2021,
through December 8, 2026 contains the required language.
49
Requirement: The Foundation must administer the Florida Prepaid Tuition Scholarship Program
and additional scholarship programs supported from escheated funds retained by the Board,
provided that any matching funds for such scholarships are obtained solely from the private
sector.
50
Finding: The Foundation administers additional scholarship programs with matching
funds obtained solely from the private sector.
51
Requirement: The Foundation’s annual report must include a list of any additional scholarship
programs approved by the Board to be administered by the Foundation, including a description
of the programs and the amount of escheated funds utilized to fund the programs.
52
45
Email, Florida Prepaid College Board (Sept. 15, 2021).
46
Florida Prepaid College Foundation, Required Disclosure to s. 20.058, F.S. (July 21, 2021), available at
https://www.floridaprepaidcollegefoundation.com/wp-content/uploads/2021/07/2021-Foundation-Disclosure-Required-
pursuant-to-Section-20.058-Florida-Statutes.058-Florida-Statutes-1.pdf, at 2.
47
Section 20.058(4), F.S.
48
Section 1009.983(2), F.S.
49
Florida Prepaid College Board, Agreement with Florida Prepaid College Foundation, Inc. (Dec. 8, 2021).
50
Section 1009.983(8), F.S.
51
Email, Florida Prepaid College Board (September 14, 2021).
52
Section 1009.983(8)(b), F.S. BILL: SB 1552 Page 8
Finding: The Foundation’s 2020 Annual Report describes additional scholarship
programs approved by the Board and indicates the amount of escheated funds utilized to
fund each program.
53
Requirement: The Foundation is required to keep confidential the identity of donors who desire
to remain anonymous.
54
Finding: The Foundation confirms it maintains the anonymity of donors who desire to remain
anonymous and is thus compliant with this requirement.
55
III. Effect of Proposed Changes:
SB 1552 saves from repeal the Stanley G. Tate Florida Prepaid College Foundation, Inc., which
is a direct-support organization for the Florida Prepaid College Board created to administer the
Florida Prepaid Tuition Scholarship Program and other scholarship programs approved by the
Florida Prepaid College Board.
The bill takes effect July 1, 2022.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
None.
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
D. State Tax or Fee Increases:
None.
E. Other Constitutional Issues:
None.
53
Stanley G. Tate Florida Prepaid College Foundation, 2020 Annual Report, available at
https://www.floridaprepaidcollegefoundation.com/wp-content/uploads/2021/06/2020-Florida-Prepaid-College-Foundation-
Annual-Report-Digital.pdf, at 17.
54
Section 1009.983(4), F.S.
55
Email, Florida Prepaid College Board (Sept. 14, 2021). BILL: SB 1552 Page 9
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None.
B. Private Sector Impact:
The Florida Prepaid College Foundation, Inc. (Foundation) has awarded more than
51,000 Florida Prepaid College Plan scholarships, and more than 32,600 Foundation
scholarship recipients have gone to college using their benefits.
56
The continued
operation of the Foundation may ensure that students continue to be awarded such
scholarships.
C. Government Sector Impact:
The Legislature appropriated $7,000,000 in the 2021 General Appropriation Act to
support Foundation scholarships.
57
VI. Technical Deficiencies:
None.
VII. Related Issues:
None.
VIII. Statutes Affected:
This bill substantially amends section 1009.983 of the Florida Statutes.
IX. Additional Information:
A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
None.
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.
56
Stanley G. Tate Florida Prepaid College Foundation, 2020 Annual Report, available at
https://www.floridaprepaidcollegefoundation.com/wp-content/uploads/2021/06/2020-Florida-Prepaid-College-Foundation-
Annual-Report-Digital.pdf, at 8.
57
Specific appropriation 67, s. 2, ch. 2021-36, L.O.F.