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Court to consider IOTA rule amendments

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Mayanne DownsProposed amendments to Bar rules governing how IOTA trust accounts’ proceeds can be used to help low-income Floridians will be taken up by the Supreme Court.

The court in recent days created a rules case for the final report and recommended amendments to Bar Rule 5-1.1 submitted by the Task Force on Distribution of IOTA Funds. On October 29, Chief Justice Charles Canady issued an administrative order extending the life of the task force, which had been set to expire at the end of the year, until June 30, 2021.

The new order directs the task force to: “(1) file a response to any comments filed with the Court on the proposed rule amendments; (2) participate in oral argument, which may be scheduled in In re: Amendments to Rule Regulating the Florida Bar 5-1.1(g), Case No. SC20-1543; and (3) take whatever other action the Chief Justice may direct.”

The new administrative order came one year and five days after the court created the task force and directed it to look at alternative ways to distribute IOTA funds, whether those funds should be earmarked for specified priorities, and whether there should be detailed reporting requirements on the collection and spending of IOTA monies. The court also told the task force to consider whether it should be a priority to spend IOTA funds on direct legal services for low-income Floridians.

“I’m very happy. I’m surprised the court was able to get to this quickly,” said former Bar President Mayanne Downs, who chairs the task force. “My impression is the court is interested in moving these matters forward at a reasonably quick rate.”

The task force submitted its report and proposed rule amendments on September 15.

The Florida Bar Foundation has overseen the IOTA program since its inception almost 40 years ago. Distribution of the funding is controlled by court precedent and the Foundation’s court-approved charter. Operation of IOTA trust accounts and authorization for the program are in Bar Rule 5-1.1(g).

The task force at one point considered a rule amendment that would allow agencies other than the Foundation to collect and distribute IOTA funds, but the final rule proposal recommended that the Foundation continue to be the sole conduit for IOTA funds.

However, the amendments say administrative overhead should be limited to 15% and funds granted only to experienced charitable or nonprofit organizations that directly provide legal services to the poor. The amendments also say that IOTA funds must be distributed within six months of receipt.

The Foundation currently does not spend IOTA funds collected in one fiscal year until the following fiscal year. It has also adopted a funding and reserves policy based on a three-year average of IOTA income and which is designed to prevent the Foundation from ever running out of money.

Most Foundation grants fund direct legal services but its charter and Supreme Court precedent also allow it to fiscally support programs that improve the administration of justice.

The final rule amendment package was dubbed a “hybrid” that originated from the task force’s original proposals, which included a 5% cap on overhead, and changes suggested by the Foundation and the Florida Civil Legal Aid Association.

Downs said the proposed rule amendments will bring more money to direct legal services.

“This means we are one step closer to putting millions, potentially, of IOTA dollars to the dedicated use of hiring lawyers to provide direct legal services to Florida’s poor. Every step in that direction is a step I’m happy about,” she said.

Former Foundation President Hala Sandridge, who serves on the task force, said previously if the rule changes are ultimately adopted, the Foundation would adapt, including finding other revenue sources for its administration of justice programs and modifying its administrative systems to comply.

The Foundation currently does not break down its overhead costs between IOTA and non-IOTA funds, which in the past years has included donations, cy pres awards, and funds allocated from case settlements from the Florida Attorney General’s Office.

The latest administrative order directed that the task force’s membership would not change. Besides Downs and Sandridge, other members are Third District Court of Appeal Judge Ed Scales, immediate past Bar President John Stewart, Board of Governors member Laird Lile, Dade Legal Aid: Put Something Back Executive Director Karen Ladis, and Jacksonville attorney M. Scott Thomas.

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