Senate Bill sb2656c2
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2006 CS for CS for SB 2656
By the Committees on Governmental Oversight and Productivity;
Commerce and Consumer Services; and Senator Atwater
585-2351-06
1 A bill to be entitled
2 An act relating to public records; creating s.
3 288.9623, F.S.; providing definitions; defining
4 the term "proprietary confidential business
5 information" and specifying information that
6 does not constitute proprietary confidential
7 business information; creating an exemption
8 from public-records requirements for
9 proprietary confidential business information
10 held by the Florida Opportunity Fund regarding
11 alternative investments; providing for limited
12 duration of the exemption; authorizing the
13 inspection and copying of confidential and
14 exempt records if the proprietor of the
15 information fails to verify that a record
16 contains certain information within a specified
17 period; authorizing a court to order the
18 release of confidential and exempt records upon
19 making certain findings; providing for future
20 review and repeal; providing a statement of
21 public necessity; providing a contingent
22 effective date.
23
24 Be It Enacted by the Legislature of the State of Florida:
25
26 Section 1. Section 288.9623, Florida Statutes, is
27 created to read:
28 288.9623 Florida Opportunity Fund; public-records
29 exemption.--
30 (1) As used in this section, the term:
31
1
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2006 CS for CS for SB 2656
585-2351-06
1 (a) "Alternative investment" means an investment by
2 the Florida Opportunity Fund in a private equity fund, venture
3 fund, or angel fund or a direct investment in a portfolio
4 company through a distribution of securities to its partners
5 or shareholders by an alternative investment vehicle.
6 (b) "Alternative investment vehicle" means the limited
7 partnership, limited liability company, or similar legal
8 structure through which the Florida Opportunity Fund invests
9 in a portfolio company.
10 (c) "Portfolio company" means a corporation or other
11 issuer, any of whose securities are owned by an alternative
12 investment vehicle or the Florida Opportunity Fund and any
13 subsidiary of such corporation or other issuer.
14 (d) "Portfolio positions" means individual investments
15 in portfolio companies which are made by the alternative
16 investment vehicles, including information or specific
17 investment terms associated with any portfolio company
18 investment.
19 (e) "Proprietor" means an alternative investment
20 vehicle, a portfolio company in which the alternative
21 investment vehicle is invested, or an outside consultant,
22 including the respective authorized officers, employees,
23 agents, or successors in interest, which controls or owns
24 information provided to the Florida Opportunity Fund.
25 (f)1. "Proprietary confidential business information"
26 means information that has been designated by the proprietor
27 when provided to the Florida Opportunity Fund as information
28 that is owned or controlled by a proprietor; that is intended
29 to be and is treated by the proprietor as private, the
30 disclosure of which would harm the business operations of the
31 proprietor and has not been intentionally disclosed by the
2
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2006 CS for CS for SB 2656
585-2351-06
1 proprietor unless pursuant to a private agreement that
2 provides that the information will not be released to the
3 public except as required by law or legal process, or pursuant
4 to law or an order of a court or administrative body; and that
5 concerns:
6 a. Trade secrets as defined in s. 688.002.
7 b. Information provided to the Florida Opportunity
8 Fund regarding a prospective investment in a private equity
9 fund, venture fund, angel fund, or portfolio company which is
10 proprietary to the provider of the information.
11 c. Financial statements and auditor reports of an
12 alternative investment vehicle.
13 d. Meeting materials of an alternative investment
14 vehicle relating to financial, operating, or marketing
15 information of the alternative investment vehicle.
16 e. Information regarding the portfolio positions in
17 which the alternative investment vehicles invest.
18 f. Capital call and distribution notices to investors
19 of an alternative investment vehicle.
20 g. Alternative investment agreements and related
21 records.
22 h. Information concerning investors, other than the
23 Florida Opportunity Fund, in an alternative investment
24 vehicle.
25 2. The term "proprietary confidential business
26 information" does not include:
27 a. The name, address, and vintage year of an
28 alternative investment vehicle and the identity of the
29 principals involved in the management of the alternative
30 investment vehicle.
31
3
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2006 CS for CS for SB 2656
585-2351-06
1 b. The dollar amount of the commitment made by the
2 Florida Opportunity Fund to each alternative investment
3 vehicle since inception.
4 c. The dollar amount and date of cash contributions
5 made by the Florida Opportunity Fund to each alternative
6 investment vehicle since inception.
7 d. The dollar amount, on a fiscal-year-end basis, of
8 cash or other fungible distributions received by the Florida
9 Opportunity Fund from each alternative investment vehicle.
10 e. The dollar amount, on a fiscal-year-end basis, of
11 cash or other fungible distributions received by the Florida
12 Opportunity Fund plus the remaining value of
13 alternative-vehicle assets that are attributable to the
14 Florida Opportunity Fund's investment in each alternative
15 investment vehicle.
16 f. The net internal rate of return of each alternative
17 investment vehicle since inception.
18 g. The investment multiple of each alternative
19 investment vehicle since inception.
20 h. The dollar amount of the total management fees and
21 costs paid on an annual fiscal-year-end basis by the Florida
22 Opportunity Fund to each alternative investment vehicle.
23 i. The dollar amount of cash profit received by the
24 Florida Opportunity Fund from each alternative investment
25 vehicle on a fiscal-year-end basis.
26 (g) "Florida Opportunity Fund" means the Florida
27 Opportunity Fund authorized in s. 288.9621.
28 (2) Proprietary confidential business information held
29 by the Florida Opportunity Fund regarding alternative
30 investments is confidential and exempt from s. 119.07(1) and
31
4
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2006 CS for CS for SB 2656
585-2351-06
1 s. 24(a), Art. I of the State Constitution for 10 years after
2 the termination of the alternative investment.
3 (3) Notwithstanding subsection (2), a request to
4 inspect or copy a public record that contains proprietary
5 confidential business information shall be granted if the
6 proprietor of the information fails, within a reasonable
7 period after the request is received by the Florida
8 Opportunity Fund, to verify the following to the Florida
9 Opportunity Fund through a written declaration in the manner
10 provided by s. 92.525:
11 (a) That the requested record contains proprietary
12 confidential business information and the specific location of
13 such information within the record;
14 (b) If the proprietary confidential business
15 information is a trade secret, that it is a trade secret as
16 defined in s. 688.002;
17 (c) That the proprietary confidential business
18 information is intended to be and is treated by the proprietor
19 as private, is the subject of efforts of the proprietor to
20 maintain its privacy, and is not readily ascertainable or
21 publicly available from any other source; and
22 (d) That the disclosure of the proprietary
23 confidential business information to the public would harm the
24 business operations of the proprietor.
25 (4)(a) Any person may petition a court of competent
26 jurisdiction for an order for the public release of those
27 portions of any record made confidential and exempt by
28 subsection (2).
29 (b) Any action under this subsection must be brought
30 in Orange County, Florida, and the petition or other initial
31 pleading shall be served on the Florida Opportunity Fund and,
5
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2006 CS for CS for SB 2656
585-2351-06
1 if determinable upon diligent inquiry, on the proprietor of
2 the information sought to be released.
3 (c) In any order for the public release of a record
4 under this subsection, the court shall make a finding that:
5 1. The record or portion thereof is not a trade secret
6 as defined in s. 688.002;
7 2. A compelling public interest is served by the
8 release of the record or portions thereof which exceeds the
9 public necessity for maintaining the confidentiality of such a
10 record; and
11 3. The release of the record will not cause damage to
12 or adversely affect the interests of the proprietor of the
13 released information, other private persons or business
14 entities, the Florida Opportunity Fund, or any trust fund, the
15 assets of which are invested by the Florida Opportunity Fund.
16 (5) This section is subject to the Open Government
17 Sunset Review Act in accordance with s. 119.15 and shall stand
18 repealed on October 2, 2011, unless reviewed and saved from
19 repeal through reenactment by the Legislature.
20 Section 2. The Legislature finds that it is a public
21 necessity that proprietary confidential business information
22 held by the Florida Opportunity Fund regarding alternative
23 investments be held confidential and exempt from s. 119.07(1),
24 Florida Statutes, and s. 24(a), Art. I of the State
25 Constitution for 10 years after the termination of the
26 alternative investment. Disclosing proprietary confidential
27 business information, including trade secrets as defined in s.
28 688.002, Florida Statutes, used in determining how private
29 equity investments are made or managed by private partnerships
30 investing assets on behalf of the Florida Opportunity Fund
31 would negatively affect the business interests of private
6
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2006 CS for CS for SB 2656
585-2351-06
1 partnerships that rely heavily on their information advantage
2 to generate investment returns, and competitor partnerships
3 could gain an unfair competitive advantage if provided access
4 to such information. The release of proprietary confidential
5 business information, including trade secrets, revealing how
6 alternative investments are made could result in inadequate
7 returns and ultimately frustrate attainment of the investment
8 objective of the Florida Opportunity Fund. It is the
9 Legislature's intent to allow the public access to sufficient
10 information in order to be informed regarding the alternative
11 investments of the Florida Opportunity Fund and to balance the
12 public's right to information against the right of private
13 business entities to be protected from harmful disclosure of
14 confidential and exempt proprietary confidential business
15 information, the disclosure of which would injure them in the
16 marketplace. It is also the Legislature's intent to establish
17 consistency with regard to the classification of information
18 relating to alternative investments by the Florida Opportunity
19 Fund as either confidential or suitable for public disclosure.
20 In finding that the public-records exemption created by this
21 act is a public necessity, the Legislature finds that the
22 public and private harm in disclosing proprietary confidential
23 business information relating to alternative investments by
24 the Florida Opportunity Fund significantly outweighs any
25 public benefit derived from disclosure; that the exemption
26 created by this act will enhance the ability of the Florida
27 Opportunity Fund to fulfill its duties as an investment
28 fiduciary by making it more effective and competitive in the
29 marketplace as an investor that is able to gain access to the
30 best alternative investment vehicles; and that the public's
31 ability to be informed regarding the alternative investments
7
CODING: Words stricken are deletions; words underlined are additions.
Florida Senate - 2006 CS for CS for SB 2656
585-2351-06
1 made by the Florida Opportunity Fund is preserved by the
2 disclosure of information excepted from the created exemption.
3 Section 3. This act shall take effect July 1, 2006, if
4 Senate Bill 2668 or similar legislation is adopted in the same
5 legislative session or an extension thereof and becomes law.
6
7 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
8 CS/SB 2656
9
10 Establishes definitions that are applicable for the exemption.
11 Exempts proprietary confidential business information held by
the Florida Opportunity Fund regarding alternative investments
12 for 10 years after the termination of the alternative
investment.
13
Requires proprietor to file a verified, written declaration
14 that identifies proprietary confidential business information
in record within reasonable time of receipt by the Florida
15 Opportunity Fund of a public records request. Requires release
of information if proprietor fails to comply.
16
Permits any person to petition a court for release of
17 confidential and exempt information. Establishes standards for
court release.
18
19
20
21
22
23
24
25
26
27
28
29
30
31
8
CODING: Words stricken are deletions; words underlined are additions.