HB 173 2025
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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
A bill to be entitled 1
An act relating to Interest on Trust Accounts Program 2
interest rates; creating s. 655.97, F.S.; requiring 3
the Chief Financial Officer to establish quarterly two 4
interest rate alternatives applicable to Interest on 5
Trust Accounts (IOTA) Program to determine interest 6
paid to Funding Florida Legal Aid (FFLA) by 7
participating financial institutions; requiring such 8
institutions to select one of the two rate 9
alternatives annually; requiring that each rate 10
alternative be set at a specified rate; requiring the 11
Chief Financial Officer to inform FFLA of the rate 12
alternatives established for each upcoming quarter; 13
providing applicability; providing an effective date. 14
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WHEREAS, in September 1981, the Florida Supreme Court 16
implemented the nation's first Interest on Trust Accounts (IOTA) 17
Program, establishing a vital funding source for civil legal 18
aid, justice system improvements, and public service programs 19
for law students, and 20
WHEREAS, Funding Florida Legal Aid (FFLA), formerly known 21
as The Florida Bar Foundation, and the Florida Bankers 22
Association cooperated for decades to sustain the program and 23
encourage participation, and 24
WHEREAS, in March 2023, the Florida Supreme Court adopted 25
HB 173 2025
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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
new rules requiring lawyers to secure interest rates based on 26
the Wall Street Journal Prime Rate, compelling banks to pay 27
higher rates for IOTA accounts than for similar accounts, and 28
WHEREAS, 44 states, the District of Columbia, and Puerto 29
Rico have mandatory IOTA programs modeled after Florida's pre -30
2023 system, while 5 states and the U.S. Virgin Islands operate 31
voluntary or opt-out programs, and 32
WHEREAS, the 2023 rule change made Florida an outlier 33
compared to other jurisdictions, where I OTA rates are typically 34
benchmarked against interest -bearing checking account rates, and 35
WHEREAS, the Wall Street Journal Prime Rate serves as a 36
benchmark for lending and is not used to set deposit account 37
rates, and 38
WHEREAS, the 2023 rule changes result ed in banks paying 39
higher rates on funds in IOTA accounts, resulting in record 40
revenues, exceeding $279 million, paid to FFLA during the 2023 -41
2024 fiscal year, nearly four times the prior peak rate, and far 42
exceeding average annual interest revenues, and 43
WHEREAS, in October 2024, the Florida Supreme Court 44
authorized FFLA to hold nearly $143 million in reserves, and 45
WHEREAS, it is in the best interests of this state for the 46
Legislature to establish statutory benchmarks for IOTA rates to 47
ensure regulatory safety, fairness, and sustainability, similar 48
to the quarterly interest rate determinations made by the Office 49
of the Chief Financial Officer for interest paid on court 50
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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
judgments, NOW, THEREFORE, 51
52
Be It Enacted by the Legislature of the State of Florida: 53
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Section 1. Section 655.97, Florida Statutes, is created to 55
read: 56
655.97 Interest on Trust Accounts Program interest rates. — 57
(1)(a) Each December 1, March 1, June 1, and September 1, 58
the Chief Financial Officer shall establish two interest rate 59
alternatives applicable to the Interest on Trust Accounts (IOTA) 60
Program to determine interest paid to Funding Florida Legal Aid 61
(FFLA) by participating financial institutions. The rate 62
alternatives established by the Chief Financial Officer are 63
effective on the following January 1, April 1, July 1, and 64
October 1, respectively. Each such financial institution must 65
annually select one of t he two rate alternatives. 66
(b) The first rate alternative must be set at the highest 67
interest rate or dividend generally available from the 68
institution to its comparable non -IOTA business or consumer 69
accounts or nonmaturing deposit accounts, provided that the IOTA 70
accounts meet or exceed the same minimum balance or other 71
account requirements. If a financial institution chooses to pay 72
the rate alternative provided by this paragraph, it must submit 73
a rate validation sheet to the Chief Financial Officer to en sure 74
that it has paid at least the same interest on IOTA accounts 75
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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
that it paid on such other accounts. 76
(c) The second rate alternative must be set at 25 percent 77
of the federal funds target rate or 0.25 percent, whichever is 78
higher, net of fees. If a fina ncial institution chooses to pay 79
the rate alternative provided by this paragraph, it is exempt 80
from the rate validation requirement established by paragraph 81
(b). 82
(2) Within 3 days after establishing interest rates under 83
subsection (1), the Chief Financia l Officer shall inform FFLA of 84
the rate alternatives for the upcoming quarter. 85
(3) This section does not apply to interest rates 86
established by written contract or obligations unrelated to IOTA 87
accounts. 88
Section 2. This act shall take effect July 1, 2025. 89