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Task force defends proposed IOTA program rule amendments

Senior Editor News in Photos

Supreme Court of FloridaCritics of proposed amendments to the Bar rule governing the IOTA program fail to recognize that the amendments comply with a Supreme Court instruction to the task force that drafted the changes.

That court instruction, according to the Task Force on the Distribution of IOTA Funds, was to “give priority consideration to providing direct legal services for low income litigants,” and it’s uncertain how well The Florida Bar Foundation, which oversees the IOTA program, meets that goal.

The assertion came as the task force on March 3 filed with the court its response to comments from past Foundation presidents, legal aid organizations, former Bar presidents, and others. Those comments were submitted on February 10 regarding the task force’s suggested amendments, now pending at the court, to Bar Rule 5-1.1(g), which governs the IOTA program and designates the Foundation as the organization that collects and distributes IOTA funds.

Those earlier comments [see story here] were generally critical of the task force amendments, saying they would disrupt a system that is running well, would leave the Foundation and legal aid IOTA recipients with inadequate reserves, and set too restrictive administrative overhead limits. Those filers generally supported a “consensus” rule amendment proposed by a group of past Foundation presidents.

The task force response, filed by task force Chair and former Bar President Mayanne Downs, also requested the court to forego oral arguments, which were requested by many commenters. The response did recommend two changes based on comments.

One would clarify that IOTA funds can be used for the Foundation’s popular Loan Repayment Assistance Program, which helps repay the student loans for legal aid attorneys, under the amendments. The second would specify that training and technology costs that support the direct provision of legal services would not count in the 10% overhead cap for IOTA funds granted to legal aid offices. General training and technology costs, though, would count as part of the overhead.

The task force response rejected the majority of the comments including the consensus rule, saying they failed to account for the court’s direction to consider as a priority to use IOTA funds for directly providing civil legal services. It also said the comments favored keeping the “status quo” and that the current rule “contains no requirement whatsoever that any IOTA funds be spent to provide direct legal services for low income litigants….

“The task force’s proposed rule amendments effectuate this Court’s unambiguous directive, and not one of the comments seriously suggests otherwise. The task force unanimous vote to approve its report and recommended rule amendments evidences that it successfully accomplished its mission,” the response said. “….[I]t seems that what underlies most of the comments and the ‘consensus rule’ are challenges to, and disagreement with, the ‘priority consideration’ mandate memorialized in the AO [the court administrative order creating the task force]. The commenters do not want any restriction that requires IOTA funds be used for providing direct legal services to poor Floridians or that restrict the use of IOTA funds beyond the restrictions contained in the charter of the IOTA funds administrator, currently designated as the Foundation. This, too, is puzzling because, underlying this Court’s mandate, is the simple — heretofore noncontroversial — notion that, given the level of the State’s unmet legal need, scarce IOTA funds should be used primarily, if not exclusively, to provide lawyers for poor litigants.”

The consensus rule adopted some of the enhanced reporting requirements recommended by the task force but did away with its overhead caps and restrictions on how funds could be spent.

The response rebuffed many of the comments, including the consensus rule, because they maintain the current system and don’t address the court’s directive about direct legal services.

The response did address many other specific comments, including:

• Setting a higher cap on overhead than the 10% proposed for legal aid agencies and 15% for the Foundation on the use of IOTA funds. The response said that applies only to IOTA revenues and the Foundation and agencies can set whatever overhead level they want on funds received from other sources. Those alternative funds also can be used for other purposes determined by the Foundation, the agencies, or the sources of the funds. “The task force has little difficulty recommending to this Court that if the Foundation remains as the IOTA funds administrator, IOTA funds be segregated from other Foundation funds and distribution be restricted to fund, almost exclusively, that priority identified by this Court in its AO (and which is consistent with the principal mission of the Foundation): to provide direct legal services to poor Floridians,” the response said.

• The concern that the Foundation and legal aid offices would not be able to keep adequate reserves under the proposed rule should not be heeded. “The task force believes the potential for gamesmanship and stockpiling funds outweighs any benefits that might otherwise be achieved if the rule allows for a greater percentage of IOTA funds to be used for reserves,” the response said. “Of course, the Foundation and grantees may establish reserves with funds received from other sources. To stay true to the mission of this Court’s directive, however, IOTA funds should be used — as they are collected — for providing direct legal services.”

• Likewise, the criticisms are unfounded that the proposed rule requirement that IOTA funds to be distributed within six months of receipt would cause problems, especially if IOTA interest rates fluctuated. “[T]he task force believes that prompt disbursement from the Foundation of IOTA funds received is central to the utilization of those funds for the intended purposes…,” the response said. “The comments critical of that requirement offer no real reasons for the Foundation to retain funds for a longer period of time.”

• Criticisms that reporting requirements in the proposed rule would be burdensome are unfounded. “None of the task force’s proposed reporting requirements are onerous, and all of them are designed to provide information to ensure that IOTA funds are efficiently used to provide legal services to Florida’s poor,” the response said.

The response did not take a position on whether some legal aid agencies would lose IOTA funding under the rule. Although not mentioned by name, the response appeared to refer to the Innocence Project of Florida, which represents inmates seeking to prove their innocence and hence might be classified as criminal instead of civil work, and Florida’s Children First, which does advocacy work but not direct representation of clients.

“The task force takes no position on whether any particular activities undertaken by a grantee are ‘civil’ or ‘criminal,’” the response said on the Innocence Project. As for Florida’s Children First and similar agencies, “[T]he task force notes that the proposed amendment is intended to be consistent with the notion that political or legislative advocacy must not be funded or administered with IOTA funds. Nothing in the task force’s proposed amendments, however, precludes the use of other funding sources for advocacy.”

The response also rejected criticism the task force failed to consider suggestions and other feedback as it developed its report and the proposed rule.

“The task force engaged in a transparent process in which all meetings were open to the public with many opportunities for input from any interested person, as shown in the task force report previously filed with this Court,” the response said. “In fact, the task force amended its proposals many times in response to concerns raised by participants in the process (including some of those commenting in response to this petition), as also evidenced by the task force report and its appendices and by this response.”

The response closed by asking the court not to have oral arguments on the rule change. Many of the commenters requested oral arguments. The task force, though, said it took testimony from anyone who wanted to speak at its meetings, and that included many of the commenters.

“The commenters all had the opportunity to present their points of view during the term of the task force’s work,” the response said. “The task force believes it has presented cogent and clear responses to the comments presented during this rule process. Thus, the task force respectfully requests this Court implement the proposed rule without further delay.”

The task force was created by a Supreme Court administrative order late in 2019 and charged with reviewing the IOTA program including determining whether providing direct civil legal services to low-income Floridians should be the priority.

The task force filed its report last September, including the proposed rule amendment, and the court then turned it into a rules case and invited comment.

The task force proposed rule changes that would limit the use of IOTA funds to providing direct civil legal services, either through directly paying lawyers or by supporting pro bono programs, for low-income Floridians. The Foundation would have to distribute IOTA funds within six months of receipt and could use no more than 15% for overhead and reserves.

Recipient legal aid offices could use no more than 10% for overhead, including rent, training, and technology expenses.

The proposed task force rule would overturn the Foundation’s current policy of not spending IOTA receipts from one fiscal year until the following fiscal year. It would also end a recent Foundation policy of using a budgeting formula of averaging the past three years’ IOTA receipts and determining reserves in such a way that the Foundation never runs out of money.

The docket page for In re: Amendments to Rule Regulating The Florida Bar 5-1.1(g), Case No. SC20-1543, may be found here.

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