Task force focuses on revamped IOTA rule
Latest draft keeps Foundation as fund administrator
Judge Ed Scales
A proposed rule on collecting and distributing IOTA funds is being redrafted to specify only one entity should administer those monies and that agency should be The Florida Bar Foundation.
Task force member and Third District Court of Appeal Judge Ed Scales discussed compromise language he is preparing at the task force’s August 13 meeting. Scales presided at the meeting in the absence of Chair and former Bar President Mayanne Downs.
“I would like to see a 7-0 [unanimous] vote on our task force,” Scales said as he introduced his proposals. “It may not be possible, it may be pie in the sky idealism, but I would like to see that.”
He said any vote would happen at a future meeting, when all members are present. Scales said the latest revisions were not available in writing and he had discussed them only with fellow task force member and Foundation President Hala Sandridge.
The task force was formed by the Supreme Court last October and charged with reviewing the collection and distribution of IOTA funds, which is currently done under Bar Rule 5-1.1(g). That rule names the Foundation as the collecting and distributing agency. The charge included considering alternatives and giving priority to funding the provision of direct civil legal services for poor Floridians, as well as establishing standards for qualifying programs and accounting for IOTA expenditures.
Currently, IOTA fund uses are controlled by the Foundation’s charter and Supreme Court precedent, which limit the use to legal aid for low-income Floridians and improving the administration of justice.
Initial amendment drafts considered by the task force removed mention of the Foundation in the rule and would allow for one or more entities to be designated by the Supreme Court to collect and distribute IOTA funds. They would require that funds be distributed within six months of receipt and set first a 5% and then 10% maximum on the amount of funds that could be used for administrative overheard.
Legal aid agencies getting grants from the administrator would be limited to 20% overhead.
The Foundation and legal aid agencies criticized those proposals, saying it would be wasteful to have more than one fund administrator, picking another administrator would discard the Foundation’s almost 40-year experience of handling the IOTA program, and the overhead standards were too restrictive.
On his proposal, Scales said he tried to develop a “hybrid” that combines the task force’s earlier proposals with a suggested rule submitted jointly by the Foundation and the Florida Civil Legal Aid Association, which represents the executive directors of more than two dozen legal aid agencies around the state.
“One thing it does is it captures the idea of having one single IOTA funds administrator rather than multiple IOTA funds administrators,” Scales said. “The second thing it does is it keeps in the rule the designation of The Florida Bar Foundation as the IOTA funds administrator.”
The proposal specifies more detail on what can be charged for overhead but would set that overhead at 15% for the Foundation (or other fund administrator) and at 10% for grant recipients.
The amendment keeps the requirement that except for administrative costs that IOTA income be passed to grantees within six months of being received. That differs from the current Foundation practice of not spending one year’s IOTA income until the following fiscal year to avoid having to cut grants on short notice if IOTA revenues plunge, as they have in recent months because of the COVID-19-related recession.
It also does not cover the Foundation’s current reserve policy, which sets reserves based on averages of IOTA income and is aimed at preventing the Foundation from running out of money despite variations in IOTA income.
Scales said he had not finished drafting all of his proposed amendments but hoped to have them published — along with a side-by-side comparison of current Bar Rule 5-1.1(g) — by August 16.
“I think we’re working toward something while nobody is going to be 100% happy, it would be acceptable to a lot of stakeholders in our process,” said Sandridge, who had been strongly critical of earlier rule drafts.
“I really would like to get the input of the [legal aid] project directors and other grantees,” she added. “Ultimately, it’s up to the Florida Supreme Court to decide whether it believes that what we have suggested and proposed is acceptable and makes the best sense for our Florida citizens.”
Other issues discussed by task force members included whether the final rule proposal will have a provision for criminal services, such as the Innocence Project of Florida, which provides post-conviction relief for wrongly convicted defendants.
The Foundation has provided funding for the project under its administration of justice category, while task force members noted the court has said it should give a priority to civil legal work.
Task force member Laird Lile, a member of the Bar Board of Governors who helped draft earlier versions of the task force’s amendments, said the Foundation wasn’t included as the fund administrator in those drafts because it might not want to continue distributing IOTA funds under the eventual limitations of the new rule.
But Sandridge said that could be addressed as the final amendment is worked out.
“I believe that the reason we were not putting the Foundation as the sole administrator is there was concern the Foundation would not be willing to work in the structure that would be proposed,” she said. “I hope with these conversations, we will eliminate those concerns so the task force will understand the Foundation is willing to work under the terms that we will be sending to the court…and the Foundation would be named the sole administrator.”
Scales said the task force’s next meeting will be set a few days after the updated amendment is posted, and that the task force may take public comment on the latest proposed amendment.
The task force’s final rule is due to the Supreme Court by September 15.
