HB 0957CS

CHAMBER ACTION




1The Civil Justice Committee recommends the following:
2
3     Council/Committee Substitute
4     Remove the entire bill and insert:
5
A bill to be entitled
6An act relating to community associations; creating s.
7712.11, F.S.; authorizing certain associations to revive
8lapsed covenants; amending s. 718.114, F.S.; providing
9that certain leaseholds, memberships, or other possessory
10or use interests shall be considered a material alteration
11or substantial addition to certain real property; amending
12s. 720.302, F.S.; revising application; amending s.
13720.303, F.S.; authorizing associations to charge
14specified fees for providing certain information to
15prospective purchasers or lienholders; limiting liability
16for providing such information; revising what must be
17included in an association's annual budget; providing for
18reserve accounts for capital expenditures and deferred
19maintenance; revising certain time requirements relating
20to annual reports of associations; amending s. 720.305,
21F.S.; prohibiting a fine levied by an association from
22becoming a lien unless the governing documents claimed to
23have been violated are recorded in the public records;
24amending s. 720.306, F.S.; providing that certain mergers
25or consolidations do not alter specified voting interests;
26amending s. 720.307, F.S.; providing additional documents
27that the developer must deliver at the time the
28association members elect the board of directors; amending
29s. 720.308, F.S.; providing that a guarantee of common
30expenses shall be effective under certain circumstances;
31requiring the guarantee to meet certain requirements;
32authorizing the guarantee to provide certain requirements;
33requiring the stated dollar amount of the guarantee to be
34an exact dollar amount for each parcel identified in the
35declaration; providing payments required from the
36guarantor to be determined in a certain manner; providing
37a formula to determine the guarantor's total financial
38obligation to the association; providing that certain
39expenses incurred in the production of certain revenues
40shall not be included in the operating expenses; amending
41s. 720.402, F.S., relating to publication of false or
42misleading information; clarifying that the section does
43not limit common-law rights; providing an effective date.
44
45Be It Enacted by the Legislature of the State of Florida:
46
47     Section 1.  Section 712.11, Florida Statutes, is created to
48read:
49     712.11  Covenant revitalization.--A homeowners' association
50that is not subject to chapter 720 may use the procedures in ss.
51720.403-720.407 to revive covenants that have lapsed pursuant to
52this chapter.
53     Section 2.  Section 718.114, Florida Statutes, is amended
54to read:
55     718.114  Association powers.--An association has the power
56to enter into agreements, to acquire leaseholds, memberships,
57and other possessory or use interests in lands or facilities
58such as country clubs, golf courses, marinas, and other
59recreational facilities. It has this power whether or not the
60lands or facilities are contiguous to the lands of the
61condominium, if they are intended to provide enjoyment,
62recreation, or other use or benefit to the unit owners. All of
63these leaseholds, memberships, and other possessory or use
64interests existing or created at the time of recording the
65declaration must be stated and fully described in the
66declaration. Subsequent to the recording of the declaration,
67agreements acquiring these leaseholds, memberships, or other
68possessory or use interests not entered into within 12 months
69following the recording of the declaration shall be considered a
70material alteration or substantial addition to the real property
71that is association property, and the association may not
72acquire or enter into agreements acquiring these leaseholds,
73memberships, or other possessory or use interests except as
74authorized by the declaration as provided in s. 718.113. The
75declaration may provide that the rental, membership fees,
76operations, replacements, and other expenses are common expenses
77and may impose covenants and restrictions concerning their use
78and may contain other provisions not inconsistent with this
79chapter. A condominium association may conduct bingo games as
80provided in s. 849.0931.
81     Section 3.  Subsections (3) and (5) of section 720.302,
82Florida Statutes, are amended to read:
83     720.302  Purposes, scope, and application.--
84     (3)  Except as specifically provided in this chapter, this
85chapter does not apply to:
86     (a)  A community that is composed of property primarily
87intended for commercial, industrial, or other nonresidential
88use; or
89     (b)  The commercial or industrial parcels in a community
90that contains both residential parcels and parcels intended for
91commercial or industrial use.
92     (5)  Unless expressly stated to the contrary, corporations
93not for profit that operate residential homeowners' associations
94in this state shall be governed by and subject to chapter 617
95and this chapter or chapter 607 if incorporated under that
96chapter. This subsection is intended to clarify existing law.
97     Section 4.  Subsections (5), (6), and (7) of section
98720.303, Florida Statutes, are amended to read:
99     720.303  Association powers and duties; meetings of board;
100official records; budgets; financial reporting; association
101funds; recalls.--
102     (5)  INSPECTION AND COPYING OF RECORDS.--The official
103records shall be maintained within the state and must be open to
104inspection and available for photocopying by members or their
105authorized agents at reasonable times and places within 10
106business days after receipt of a written request for access.
107This subsection may be complied with by having a copy of the
108official records available for inspection or copying in the
109community. If the association has a photocopy machine available
110where the records are maintained, it must provide parcel owners
111with copies on request during the inspection if the entire
112request is limited to no more than 25 pages.
113     (a)  The failure of an association to provide access to the
114records within 10 business days after receipt of a written
115request creates a rebuttable presumption that the association
116willfully failed to comply with this subsection.
117     (b)  A member who is denied access to official records is
118entitled to the actual damages or minimum damages for the
119association's willful failure to comply with this subsection.
120The minimum damages are to be $50 per calendar day up to 10
121days, the calculation to begin on the 11th business day after
122receipt of the written request.
123     (c)  The association may adopt reasonable written rules
124governing the frequency, time, location, notice, records to be
125inspected, and manner of inspections, but may not impose a
126requirement that a parcel owner demonstrate any proper purpose
127for the inspection, state any reason for the inspection, or
128limit a parcel owner's right to inspect records to less than one
1298-hour business day per month. The association may impose fees
130to cover the costs of providing copies of the official records,
131including, without limitation, the costs of copying. The
132association may charge up to 50 cents per page for copies made
133on the association's photocopier. If the association does not
134have a photocopy machine available where the records are kept,
135or if the records requested to be copied exceed 25 pages in
136length, the association may have copies made by an outside
137vendor and may charge the actual cost of copying. The
138association shall maintain an adequate number of copies of the
139recorded governing documents, to ensure their availability to
140members and prospective members. Notwithstanding the provisions
141of this paragraph, the following records shall not be accessible
142to members or parcel owners:
143     1.  Any record protected by the lawyer-client privilege as
144described in s. 90.502 and any record protected by the work-
145product privilege, including, but not limited to, any record
146prepared by an association attorney or prepared at the
147attorney's express direction which reflects a mental impression,
148conclusion, litigation strategy, or legal theory of the attorney
149or the association and was prepared exclusively for civil or
150criminal litigation or for adversarial administrative
151proceedings or which was prepared in anticipation of imminent
152civil or criminal litigation or imminent adversarial
153administrative proceedings until the conclusion of the
154litigation or adversarial administrative proceedings.
155     2.  Information obtained by an association in connection
156with the approval of the lease, sale, or other transfer of a
157parcel.
158     3.  Disciplinary, health, insurance, and personnel records
159of the association's employees.
160     4.  Medical records of parcel owners or community
161residents.
162     (d)  The association is not required to give a prospective
163purchaser or lienholder information about the subdivision or the
164association other than that required to be disclosed under this
165chapter. It may charge the prospective purchaser, lienholder, or
166current parcel owner or member a reasonable fee not to exceed
167$150 to provide such information, other than information
168required by law, plus the reasonable cost of photocopying and
169attorney's fees incurred by the association in connection with
170the response.
171     (e)  An association is not liable for providing such
172information in good faith pursuant to a written request if the
173person providing the information includes a written statement in
174substantially the following form: "The responses herein are made
175in good faith and to the best of my ability as to their
176accuracy."
177     (6)  BUDGETS.--
178     (a)  The association shall prepare an annual budget that
179sets out the annual operating expenses. The budget must reflect
180the estimated revenues and expenses for that year and the
181estimated surplus or deficit as of the end of the current year.
182The budget must set out separately all fees or charges paid for
183by the association for recreational amenities, whether owned by
184the association, the developer, or another person. The
185association shall provide each member with a copy of the annual
186budget or a written notice that a copy of the budget is
187available upon request at no charge to the member. The copy must
188be provided to the member within the time limits set forth in
189subsection (5).
190     (b)  In addition to annual operating expenses, the budget
191may include reserve accounts for capital expenditures and
192deferred maintenance for which the association is responsible to
193the extent that the governing documents do not limit increases
194in assessments, including reserves. If the budget of the
195association includes reserve accounts, such reserves shall be
196determined, maintained, and waived in the manner provided in
197this subsection. Once an association provides for reserve
198accounts in the budget, the association shall thereafter
199determine, maintain, and waive reserves in compliance with the
200provisions of this subsection.
201     (c)  If the budget of the association does not provide for
202reserve accounts governed by this subsection and is responsible
203for the repair and maintenance of capital improvements that may
204result in a special assessment, each financial report for the
205preceding fiscal year required by subsection (7) shall contain
206the following statement in conspicuous type: THE BUDGET OF THE
207ASSOCIATION DOES NOT PROVIDE FOR RESERVE ACCOUNTS FOR CAPITAL
208EXPENDITURES AND DEFERRED MAINTENANCE THAT MAY RESULT IN SPECIAL
209ASSESSMENTS. OWNERS MAY ELECT TO PROVIDE FOR RESERVE ACCOUNTS
210PURSUANT TO THE PROVISIONS OF SECTION 720.303(6), FLORIDA
211STATUTES, UPON THE APPROVAL OF NOT LESS THAN A MAJORITY OF THE
212TOTAL VOTING INTERESTS OF THE ASSOCIATION.
213     (d)  An association shall be deemed to have provided for
214reserve accounts when reserve accounts have been initially
215established by the developer or when the membership of the
216association affirmatively elects to provide for reserves. If
217reserve accounts are not initially provided for by the
218developer, the membership of the association may elect to do so
219upon the affirmative approval of not less than a majority of the
220total voting interests of the association. Such approval may be
221attained by vote of the members at a duly called meeting of the
222membership or upon a written consent executed by not less than a
223majority of the total voting interests in the community. The
224approval action of the membership shall state that reserve
225accounts shall be provided for in the budget and shall designate
226the components for which the reserve accounts are to be
227established. Upon approval by the membership, the board of
228directors shall provide for the required reserve accounts to be
229included in the budget in the next fiscal year following the
230approval and in each year thereafter. Once established as
231provided in this paragraph, the reserve accounts shall be funded
232or maintained or shall have their funding waived in the manner
233provided in paragraph (f).
234     (e)  The amount to be reserved in any account established
235shall be computed by means of a formula that is based upon
236estimated remaining useful life and estimated replacement cost
237or deferred maintenance expense of each reserve item. The
238association may adjust replacement reserve assessments annually
239to take into account any changes in estimates of cost or useful
240life of a reserve item.
241     (f)  Once a reserve account is established, the membership
242of the association, upon a majority vote at a meeting at which a
243quorum is present, may provide for no reserves or less reserves
244than required by this section. If a meeting of the unit owners
245has been called to determine whether to waive or reduce the
246funding of reserves and no such result is achieved or a quorum
247is not attained, the reserves as included in the budget shall go
248into effect. After the turnover of control of an association by
249a developer to parcel owners, the developer may vote its voting
250interest to waive or reduce the funding of reserves. Any vote
251taken pursuant to this paragraph to waive or reduce reserves
252shall be applicable only to one budget year.
253     (g)  Funding formulas for reserves authorized by this
254subsection shall be based on either a separate analysis of each
255of the required assets or a pooled analysis of two or more of
256the required assets.
257     1.  If the association maintains separate reserve accounts
258for each of the required assets, the amount of the contribution
259to each reserve account shall be the sum of the following two
260calculations:
261     a.  The total amount necessary, if any, to bring a negative
262component balance to zero.
263     b.  The total estimated deferred maintenance expense or
264estimated replacement cost of the reserve component less the
265estimated balance of the reserve component as of the beginning
266of the period for which the budget will be in effect. The
267remainder, if greater than zero, shall be divided by the
268estimated remaining useful life of the component. The formula
269may be adjusted each year for changes in estimates and deferred
270maintenance performed during the year and may consider factors
271such as inflation and earnings on invested funds.
272     2.  If the association maintains a pooled account of two or
273more of the required reserve assets, the amount of the
274contribution to the pooled reserve account as disclosed in the
275proposed budget shall be not less than that required to ensure
276that the balance on hand at the beginning of the period for
277which the budget will go into effect plus the projected annual
278cash inflows over the remaining estimated useful lives of all of
279the assets that make up the reserve pool are equal to or greater
280than the projected annual cash outflows over the remaining
281estimated useful life of all of the assets that make up the
282reserve pool, based on the current reserve analysis. The
283projected annual cash inflows may include estimated earnings
284from investment of principal. The reserve funding formula shall
285not include any type of balloon payments.
286     (h)  Reserve funds and any interest accruing thereon shall
287remain in the reserve account or accounts and shall be used only
288for authorized reserve expenditures unless their use for other
289purposes is approved in advance by a majority vote at a meeting
290at which a quorum is present. Prior to turnover of control of an
291association by a developer to parcel owners, the developer-
292controlled association shall not vote to use reserves for
293purposes other than that for which they were intended without
294the approval of a majority of all nondeveloper voting interests
295voting in person or by limited proxy at a duly called meeting of
296the association.
297     (7)  FINANCIAL REPORTING.--The association shall prepare an
298annual financial report by a date specified in the bylaws or
299within 90 60 days after the close of the fiscal year. The
300association shall, within the time limits set forth in
301subsection (5), provide each member with a copy of the annual
302financial report or a written notice that a copy of the
303financial report is available upon request at no charge to the
304member. Financial reports shall be prepared as follows:
305     (a)  An association that meets the criteria of this
306paragraph shall prepare or cause to be prepared a complete set
307of financial statements in accordance with generally accepted
308accounting principles as adopted by the Florida Board of
309Accountancy. The financial statements shall be based upon the
310association's total annual revenues, as follows:
311     1.  An association with total annual revenues of $100,000
312or more, but less than $200,000, shall prepare compiled
313financial statements.
314     2.  An association with total annual revenues of at least
315$200,000, but less than $400,000, shall prepare reviewed
316financial statements.
317     3.  An association with total annual revenues of $400,000
318or more shall prepare audited financial statements.
319     (b)1.  An association with total annual revenues of less
320than $100,000 shall prepare a report of cash receipts and
321expenditures.
322     2.  An association in a community of fewer than 50 parcels,
323regardless of the association's annual revenues, may prepare a
324report of cash receipts and expenditures in lieu of financial
325statements required by paragraph (a) unless the governing
326documents provide otherwise.
327     3.  A report of cash receipts and disbursement must
328disclose the amount of receipts by accounts and receipt
329classifications and the amount of expenses by accounts and
330expense classifications, including, but not limited to, the
331following, as applicable: costs for security, professional, and
332management fees and expenses; taxes; costs for recreation
333facilities; expenses for refuse collection and utility services;
334expenses for lawn care; costs for building maintenance and
335repair; insurance costs; administration and salary expenses; and
336reserves if maintained by the association.
337     (c)  If 20 percent of the parcel owners petition the board
338for a level of financial reporting higher than that required by
339this section, the association shall duly notice and hold a
340meeting of members within 30 days of receipt of the petition for
341the purpose of voting on raising the level of reporting for that
342fiscal year. Upon approval of a majority of the total voting
343interests of the parcel owners, the association shall prepare or
344cause to be prepared, shall amend the budget or adopt a special
345assessment to pay for the financial report regardless of any
346provision to the contrary in the governing documents, and shall
347provide within 90 days of the meeting or the end of the fiscal
348year, whichever occurs later:
349     1.  Compiled, reviewed, or audited financial statements, if
350the association is otherwise required to prepare a report of
351cash receipts and expenditures;
352     2.  Reviewed or audited financial statements, if the
353association is otherwise required to prepare compiled financial
354statements; or
355     3.  Audited financial statements if the association is
356otherwise required to prepare reviewed financial statements.
357     (d)  If approved by a majority of the voting interests
358present at a properly called meeting of the association, an
359association may prepare or cause to be prepared:
360     1.  A report of cash receipts and expenditures in lieu of a
361compiled, reviewed, or audited financial statement;
362     2.  A report of cash receipts and expenditures or a
363compiled financial statement in lieu of a reviewed or audited
364financial statement; or
365     3.  A report of cash receipts and expenditures, a compiled
366financial statement, or a reviewed financial statement in lieu
367of an audited financial statement.
368     Section 5.  Subsection (2) of section 720.305, Florida
369Statutes, is amended to read:
370     720.305  Obligations of members; remedies at law or in
371equity; levy of fines and suspension of use rights; failure to
372fill sufficient number of vacancies on board of directors to
373constitute a quorum; appointment of receiver upon petition of
374any member.--
375     (2)  If the governing documents so provide, an association
376may suspend, for a reasonable period of time, the rights of a
377member or a member's tenants, guests, or invitees, or both, to
378use common areas and facilities and may levy reasonable fines,
379not to exceed $100 per violation, against any member or any
380tenant, guest, or invitee. A fine may be levied on the basis of
381each day of a continuing violation, with a single notice and
382opportunity for hearing, except that no such fine shall exceed
383$1,000 in the aggregate unless otherwise provided in the
384governing documents. A fine shall not become a lien against a
385parcel unless it is levied for a violation of governing
386documents that have been recorded in the public records of the
387county where the property is located. In any action to recover a
388fine, the prevailing party is entitled to collect its reasonable
389attorney's fees and costs from the nonprevailing party as
390determined by the court.
391     (a)  A fine or suspension may not be imposed without notice
392of at least 14 days to the person sought to be fined or
393suspended and an opportunity for a hearing before a committee of
394at least three members appointed by the board who are not
395officers, directors, or employees of the association, or the
396spouse, parent, child, brother, or sister of an officer,
397director, or employee. If the committee, by majority vote, does
398not approve a proposed fine or suspension, it may not be
399imposed.
400     (b)  The requirements of this subsection do not apply to
401the imposition of suspensions or fines upon any member because
402of the failure of the member to pay assessments or other charges
403when due if such action is authorized by the governing
404documents.
405     (c)  Suspension of common-area-use rights shall not impair
406the right of an owner or tenant of a parcel to have vehicular
407and pedestrian ingress to and egress from the parcel, including,
408but not limited to, the right to park.
409     Section 6.  Subsection (1) of section 720.306, Florida
410Statutes, is amended to read:
411     720.306  Meetings of members; voting and election
412procedures; amendments.--
413     (1)  QUORUM; AMENDMENTS.--
414     (a)  Unless a lower number is provided in the bylaws, the
415percentage of voting interests required to constitute a quorum
416at a meeting of the members shall be 30 percent of the total
417voting interests. Unless otherwise provided in this chapter or
418in the articles of incorporation or bylaws, decisions that
419require a vote of the members must be made by the concurrence of
420at least a majority of the voting interests present, in person
421or by proxy, at a meeting at which a quorum has been attained.
422     (b)  Unless otherwise provided in the governing documents
423or required by law, and other than those matters set forth in
424paragraph (c), any governing document of an association may be
425amended by the affirmative vote of two-thirds of the voting
426interests of the association.
427     (c)  Unless otherwise provided in the governing documents
428as originally recorded or permitted by this chapter or chapter
429617, an amendment may not materially and adversely alter the
430proportionate voting interest appurtenant to a parcel or
431increase the proportion or percentage by which a parcel shares
432in the common expenses of the association unless the record
433parcel owner and all record owners of liens on the parcels join
434in the execution of the amendment. For purposes of this section,
435a change in quorum requirements is not an alteration of voting
436interests. The merger or consolidation of associations under a
437plan of merger or consolidation pursuant to chapter 607 or
438chapter 617 is not a material or adverse alteration of the
439proportionate voting interest appurtenant to a parcel.
440     Section 7.  Paragraph (t) is added to subsection (3) of
441section 720.307, Florida Statutes, to read:
442     720.307  Transition of association control in a
443community.--With respect to homeowners' associations:
444     (3)  At the time the members are entitled to elect at least
445a majority of the board of directors of the homeowners'
446association, the developer shall, at the developer's expense,
447within no more than 90 days deliver the following documents to
448the board:
449     (t)  The financial records, including financial statements
450of the association, and source documents from the incorporation
451of the association through the date of turnover. The records
452shall be audited by an independent certified public accountant
453for the period from the incorporation of the association or from
454the period covered by the last audit, if an audit has been
455performed for each fiscal year since incorporation. All
456financial statements shall be prepared in accordance with
457generally accepted accounting principles and shall be audited in
458accordance with generally accepted auditing standards, as
459prescribed by the Florida Board of Accountancy, pursuant to
460chapter 473. The certified public accountant performing the
461audit shall examine to the extent necessary supporting documents
462and records, including the cash disbursements and related paid
463invoices, to determine if expenditures were for association
464purposes, and the billings, cash receipts, and related records
465to determine that the developer was charged and paid the proper
466amounts of assessments. This paragraph applies to associations
467with a date of incorporation after December 31, 2006.
468     Section 8.  Section 720.308, Florida Statutes, is amended
469to read:
470     720.308  Assessments and charges.--
471     (1)  ASSESSMENTS.--For any community created after October
4721, 1995, the governing documents must describe the manner in
473which expenses are shared and specify the member's proportional
474share thereof. Assessments levied pursuant to the annual budget
475or special assessment must be in the member's proportional share
476of expenses as described in the governing document, which share
477may be different among classes of parcels based upon the state
478of development thereof, levels of services received by the
479applicable members, or other relevant factors. While the
480developer is in control of the homeowners' association, it may
481be excused from payment of its share of the operating expenses
482and assessments related to its parcels for any period of time
483for which the developer has, in the declaration, obligated
484itself to pay any operating expenses incurred that exceed the
485assessments receivable from other members and other income of
486the association. This section does not apply to an association,
487no matter when created, if the association is created in a
488community that is included in an effective development-of-
489regional-impact development order as of the effective date of
490this act, together with any approved modifications thereto.
491     (2)  GUARANTEE OF COMMON EXPENSES.--
492     (a)  Establishment of a guarantee.--If a guarantee of the
493assessments of parcel owners is not included in the purchase
494contracts or declaration, any agreement establishing a guarantee
495shall be effective only upon the approval of a majority of the
496voting interests of the members other than the developer.
497Approval shall be expressed at a meeting of the members, voting
498in person or by limited proxy, or by agreement in writing
499without a meeting if provided in the bylaws. Such guarantee
500shall meet the requirements of this section.
501     (b)  Guarantee period.--The period of time for the
502guarantee shall be indicated by a specific beginning and ending
503date or event.
504     1.  The ending date or event shall be the same for all of
505the members of a homeowners' association, including members in
506different phases of the development.
507     2.  The guarantee may provide for different intervals of
508time during a guarantee period with different dollar amounts for
509each such interval.
510     (c)  Guarantee extension.--The guarantee may provide that
511after the initial stated period the developer has an option to
512extend the guarantee for one or more additional stated periods.
513The extension of a guarantee is limited to extending the ending
514date or event; therefore, the developer does not have the option
515of changing the level of assessments guaranteed.
516     (3)  MAXIMUM LEVEL OF ASSESSMENTS.--The stated dollar
517amount of the guarantee shall be an exact dollar amount for each
518parcel identified in the declaration. Regardless of the stated
519dollar amount of the guarantee, assessments charged to a member
520shall not exceed the maximum obligation of the member based on
521the total amount of the adopted budget and the member's
522proportionate ownership share of the assessments.
523     (4)  CASH FUNDING REQUIREMENTS DURING GUARANTEE.--The cash
524payments required from the guarantor during the guarantee period
525shall be determined as follows:
526     (a)  If at any time during the guarantee period the funds
527collected from member assessments at the guaranteed level and
528other revenues collected by the association are not sufficient
529to provide payment, on a timely basis, of all assessments,
530including the full funding of the reserves unless properly
531waived, the guarantor shall advance sufficient cash to the
532association at the time such payments are due.
533     (b)  Expenses incurred in the production of nonassessment
534revenues, not in excess of the nonassessment revenues, shall not
535be included in the assessments. If the expenses attributable to
536nonassessment revenues exceed nonassessment revenues, only the
537excess expenses must be funded by the guarantor. Interest earned
538on the investment of association funds may be used to pay the
539income tax expense incurred as a result of the investment; such
540expense shall not be charged to the guarantor; and the net
541investment income shall be retained by the association. Each
542such nonassessment revenue-generating activity shall be
543considered separately. Any portion of the parcel assessments
544that is budgeted for designated capital contributions of the
545association shall not be used to pay operating expenses.
546     (5)  CALCULATION OF GUARANTOR'S FINAL OBLIGATION.--The
547guarantor's total financial obligation to the association at the
548end of the guarantee period shall be determined on the accrual
549basis using the following formula: the guarantor shall pay any
550deficits that exceed the guaranteed amount, less the total
551regular periodic assessments earned by the association from the
552members other than the guarantor during the guarantee period,
553regardless of whether the actual level charged was less than the
554maximum guaranteed amount.
555     (6)  EXPENSES.--Expenses incurred in the production of
556nonassessment revenues, not in excess of the nonassessment
557revenues, shall not be included in the operating expenses. If
558the expenses attributable to nonassessment revenues exceed
559nonassessment revenues, only the excess expenses must be funded
560by the guarantor. Interest earned on the investment of
561association funds may be used to pay the income tax expense
562incurred as a result of the investment; such expense shall not
563be charged to the guarantor; and the net investment income shall
564be retained by the association. Each such nonassessment revenue-
565generating activity shall be considered separately. Any portion
566of the parcel assessment that is budgeted for designated capital
567contributions of the association shall not be used to pay
568operating expenses.
569     Section 9.  Subsection (3) is added to section 720.402,
570Florida Statutes, to read:
571     720.402  Publication of false and misleading information.--
572     (3)  This section does not limit any rights provided by
573common law.
574     Section 10.  This act shall take effect July 1, 2006.


CODING: Words stricken are deletions; words underlined are additions.