FICPA 2023 Legislative Session summary

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“CPA” AND FLORIDA STATUTES

Over the last two decades, the FICPA has consistently advocated for changes to Chapter 473, Florida Statutes, that not only made the Florida CPA regulation consistent with the principles of the Uniform Accountancy Act (UAA) – a model act and rules drafted in cooperation between the AICPA, NASBA and state societies – but also maintained the high standards expected of the profession. Taking a deliberative approach to any changes to Chapter 473, the FICPA’s annual legislative and regulatory policies reflect longtime tenets of the profession, including opposition to a second tier of licensure, support for the protection of the integrity of the profession, and opposition to a sales tax on services.

During the 2023 Legislative Session, roughly 3,000 bills were filed for consideration.

Throughout the 60-day session, the FICPA’s internal and external Governmental Affairs Team – FICPA

President & CEO Shelly Weir, FICPA Director of Technical Services Paul Brown, Advocacy & Political Affairs Manager Suellen Wilkins, and the staff at Liberty Partners of Tallahassee – stood shoulder to shoulder, reviewing, shaping and evaluating the impact of hundreds of pieces of legislation – including several proposals that could have negatively impacted the practice of public accountancy in Florida.

Whether it is requiring an audit, a feasibility study or some other engagement performed by a CPA, the Florida Legislature has historically held the profession in high regard and placed a level of trust in a CPA “signing off” on a statutory requirement. Many times, the FICPA assists with ensuring the proposed statutory language is drafted properly so that a CPA can perform the engagement in accordance with professional standards; but sometimes the intent of legislation is not as apparent as the words on paper. For example, in the case of SB 256, despite concerns raised by Sen. Joe Gruters during debate a in committee hearing and on the Senate floor about the cost of the proposed audit requirement for unions, the bill was not amended before it was signed by Gov. Ron DeSantis.

In addition to the FICPA’s advocacy teams and its State Legislative Policy, State Tax, State and Local Government, and CIRA Committees, the CPA profession is well-represented in the Florida Legislature by our three CPA Lawmakers: Sen. Gruters (R-Sarasota), Rep. Cyndi Stevenson (R-St. Johns) and Rep. Mike Caruso (R-Delray Beach). These three FICPA members are a critical voice for the CPA profession within their respective chambers and largely serve as the “resident experts” when it comes to discussions about accounting, auditing or anything required to be completed by a CPA.

HB 487 / SB 1158 — NEW INSURANCE CPE AND MANDATORY AUDIT FIRM ROTATION

Sponsored by Sen. Nick DiCeglie and Rep. Michelle Salzman, SB 1158 and its companion HB 487 were a priority of Florida’s Chief Financial Officer Jimmy Patronis. Titled “an act relating to the Department of Financial Services,” this bill largely focused on significant administrative changes to the responsibilities of Florida’s Chief Fiscal Officer and designated State Fire Marshall. Typically, this Cabinet agency’s legislative proposals would focus on changes to the key responsibilities of those entities regulated by Florida’s CFO.

But HB 487 included two provisions that caused tremendous concern for the FICPA. As filed, it proposed a statutory change to Chapter 473, Florida Statutes, that would have added a new type of CPE to the current 80 hours required across

Florida Ethics, Accounting and Auditing, Technical Business and Behavioral credits and imposed mandatory audit firm rotation for firms engaged in auditing insurance companies.

Despite the fact the Public Company Accounting Oversight Board (PCAOB) – charged with regulating publicly held company audits – has not embraced audit firm rotation for public company audits, this proposal would have changed Florida law from audit “partner” rotation to audit “firm” rotation. The FICPA’s lobbying team, along with President & CEO Weir and Board Chair Julian Dozier, immediately entered into discussions with CFO Patronis and his staff to determine the intent of these two proposed changes to the regulation of the CPA profession in Florida.

After significant dialogue between the FICPA and the CFO’s office, the two provisions of concern were removed from the legislation. The FICPA highlighted the fact that adequate safeguards are in place regarding the qualification of a CPA completing audits of insurance companies, as Chapter 473 clearly already requires that licensees enter into engagements for which they are duly qualified. Moreover, all firms preparing audits in Florida must be enrolled in a peer review program as a condition of firm licensure renewal.

As defined in s. 624.4361(5), Florida Statutes – “Statutory Accounting Principles means generally accepted accounting principles, except as modified by part I of chapter 625 and by rules adopted by the commission which recognize the difference between an arrangement and an insurer.” While the provision to create a new level of CPE and impose mandatory audit firm rotation for insurance company audits did not pass, the FICPA proposed a proactive partnership with the CFO’s office to develop future CPE courses related to “Statutory Accounting Principles” and to highlight the unique and specialized nature of insurance company audit engagements.

SB 1364 / HB 1333

— INTERSTATE-MOBILITY AND UNIVERSALRECOGNITION OCCUPATIONAL LICENSING ACT

Sponsored by newly elected Sen. Jay Collins (R-Tampa) and Rep. Traci Koster (R-Tampa), SB 1364 and HB 1333 were intended, in the words of the Senate sponsor, to “establish Florida as a leader in the country on occupational licensing reform.” Focused on helping individuals exiting the military apply their skill sets and certifications to the private sector, the bill would have required state licensing boards that issue certifications or occupational licenses to individuals under Chapters 455 and 456, Florida Statutes, to automatically issue certifications or licenses to individuals coming into Florida, so long as they were in good standing in their respective state.

The FICPA’s goal was to ensure the exemption for medical board certifications and CPA licenses was

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Continued from page drafted strongly enough to ensure the license mobility provisions in Chapter 473, Florida Statutes, would not be unintentionally affected. From the initial meeting with the sponsor, he indicated his intent was to exempt CPA licensure from the bill, as he recognized the importance of preserving of CPA license mobility and the regulatory scheme currently in place.

Despite the positive intent of the legislation, the bill faced a series of amendments to “carve out” other professions that also raised concerns during several committee hearings. Both bills died on the calendar but will likely be filed again during the 2024 Legislative Session.

AUTOMATIC EXTENSIONS IN A STATE OF EMERGENCY — COMING BACK IN 2024

In the wake of Florida’s Fall 2022 hurricanes, Ian and Nicole, the FICPA’s State Tax Committee worked on drafting changes to Chapters 220.222 and 212.11, Florida Statutes, to provide needed relief to taxpayers in the path of a storm.

Currently, during a state of emergency, a taxpayer must request an extension on the filing of corporate tax returns and sales tax returns. While those extensions are typically granted, the taxpayer – in advance of a hurricane or similar disaster – would need to seek the extension while trying to prepare themselves and their business for the disaster. The FICPA’s State Tax Committee’s proposed language would have allowed for an automatic extension – in a very limited circumstance

– within five days prior to the return date. The taxpayer would still be able to file the returns timely but would not have to request an extension and wait for approval while trying to prepare for the declared state of emergency. The proposal was not a tax abatement but simply a delay in the filing date.

While garnering positive feedback both from the Florida Department of Revenue and House and Senate Tax Committee Chairs, the proposed extension language faced a delay in the House, as a staff suggestion was raised to consider similar extensions for other taxes. After discussions with House and Senate leadership, the FICPA agreed to bring the language back during the 2024 Legislative Session and allow time for the Legislature to consider a similar, automatic-extension approach to other taxes during a state of emergency.

Florida Board Of Accountancy Confirmations

Gubernatorial appointments to the nine-member Florida Board of Accountancy (BOA) at the Department of Business and Professional Regulation are subject to confirmation by a vote of the Florida Senate during a Legislative Session. During the 2023 Session, the Senate unanimously approved the reappointments by Gov DeSantis of BOA members Bill Blend, CPA, Shireen S. Sackreiter (consumer member) and Brent Sparkman, CPA, for terms ending Oct. 31, 2026; Michelle Maingot, CPA, and Steven M. Platau, CPA, for terms ending Oct. 31, 2025; and Caridad Vasallo, CPA, for a term ending Oct. 31, 2024.

$117 BILLION STATE BUDGET — CLAY FORD SCHOLARSHIP AND UNLICENSED ACTIVITY

In early fall 2022, Gov. DeSantis revealed his budget proposal, with nearly $114.7 billion in spending for FY 2023-24. The Governor’s budget included tax cuts, increased funding for state reserves and key funding for programs discussed during the 2022 campaign.

FY 2023-24 BUDGET AREA TOTALS INCLUDE:

„ Education: $27.9 billion

„ Health and Human Services: $47.3 billion

„ Criminal and Civil Justice: $6.7 billion

„ Transportation, Tourism and Economic Development: $21 billion

„ Agriculture, Environment and General Government: $11.3 billion

„ General Government: $113 billion

„ State Reserves: $10.9 billion

„ $5.3 billion General Revenue Unallocated

„ $4.1 billion Budget Stabilization Fund

„ $1.4 billion added to the Emergency Preparedness and Response Fund

„ $200 million to retire outstanding state debt be made by law for raising sufficient revenue to defray the expenses of the state for each fiscal period.” When read along with Article III, Section 19(a), Florida Constitution, that provides for “Annual Budgeting,” the conventional wisdom is the Florida Legislature must pass a balanced budget.

The House’s budget approach was nearly $113 billion in spending authority while the Senate was at $113.6 billion – both lower than the Governor’s recommendation of $114.7 billion. During the 60 days of Session, budget discussions permeated discussion on substantive legislation, but resulted in a FY 2023-24 budget of over $117 billion – up from the budget passed during the 2022 Legislative Session totaling $112.1 billion (the Governor vetoed more than $3.1 billion). Once he receives the budget, the Governor has 15 days to exercise his line-item veto ability prior to signing the FY 2023-24 budget.

Included in the budget is critical funding for two programs funded solely by CPA license fees – the Clay Ford Scholarship Program and funding to combat Unlicensed Activity.

Since its creation by the Florida Legislature in 1998, the Clay Ford Scholarship Program provides funding to help minority accounting students finish their fifthyear requirements to obtain a Florida CPA license. The Legislature funded this program at the statutory maximum of $200,000.

The same as in FY 2022-23, DBPR’s unlicensed activity program was funded at $2.27 million agency-wide, with proviso language allowing for “up to $100,000 from the Professional Regulation Trust Fund is provided to the Department of Business and Professional Regulation to fund unlicensed activity enforcement relating to certified public accountants.”

Planning For 2024

With the Legislature scheduled to return to Tallahassee for the 2024 Legislative Session interim committee hearings beginning in September, the FICPA’s advocacy team will spend the next several months working with the State Tax, State and Local Government and CIRA Committees, assisting the State Legislative Policy Committee in developing the 2024 Legislative and Regulatory Policies.

2023 Florida Legislature Tax Package Summary

Sponsored by Sen. Blaise Ingoglia (R-Springhill), Chairman of the Senate Finance and Tax Committee, and his House counterpart, Rep. Stan McClain (R-Ocala), Chairman of the House Ways and Means Committee, SB 7062 and HB 7063 were filed to implement the promises of Senate and House Legislative leadership to provide relief to Florida families. Several other tax-related bills passed that included a total of $2.7 billion in tax relief for Floridians.

After weeks of deliberation, the final tax package:

„ Established two Back-toSchool Sales Tax holidays.

„ Established two two-week 2023 Disaster Preparedness Sales Tax holidays.

„ Expanded Freedom Week to Freedom Summer, a three-month sales tax holiday on recreational items.

„ Established the 2023 Skilled Worker Tools Sales Tax holiday.

„ Authorized sales tax-free gas stoves and energy-efficient appliances.

„ Froze local cell phone and TV tax.

„ Created permanent or broad-based tax relief for items such as baby and toddler products, hygiene products, agricultural fencing, renewable natural gas machinery and equipment, and firearm safety devices.

„ Made clarifying changes to Florida’s automatic property tax refund process for properties that are damaged and become uninhabitable.

„ Cut the business rent tax from 5.5% to 4.5% beginning in December 2023.

„ Increased the annual credit limit for the Strong Families Tax Credit from $10 million to $20 million to help provide more child welfare services in Florida communities.

„ Created a tax credit for installing greywater treatment systems on residential property.

Additional tax relief measures were passed during Special Session A, held in February 2023, immediately prior to the Regular Legislative Session that began in early March. Those provisions included SB 4A by Sen. Travis Hutson (R-St. Augustine) relating to disaster relief. This bill provided property tax refunds for the portion of the year that homes were uninhabitable due to hurricane damage from Hurricanes Ian or Nicole. SB 6A by Sen. Nick DiCeglie (R-St. Petersburg) appropriated $500 million for statewide toll relief for frequent commuters.