Florida Senate - 2018                              CS for SB 614
       
       
        
       By the Committee on Community Affairs; and Senator Montford
       
       
       
       
       
       578-02144-18                                           2018614c1
    1                        A bill to be entitled                      
    2         An act relating to the Participant Local Government
    3         Advisory Council; amending s. 218.409, F.S.;
    4         abolishing the Participant Local Government Advisory
    5         Council; amending ss. 218.421 and 218.422, F.S.;
    6         conforming provisions to changes made by the act;
    7         providing an effective date.
    8          
    9  Be It Enacted by the Legislature of the State of Florida:
   10  
   11         Section 1. Paragraph (d) of subsection (2), subsection (6),
   12  paragraph (a) of subsection (8), and subsections (9) and (10) of
   13  section 218.409, Florida Statutes, are amended to read:
   14         218.409 Administration of the trust fund; creation of
   15  advisory council.—
   16         (2)
   17         (d) The investment policy shall be reviewed and approved
   18  annually by the trustees or when market changes dictate, and in
   19  each event the investment policy shall be reviewed by the
   20  Investment Advisory Council and by the Participant Local
   21  Government Advisory Council.
   22         (6)(a) The board or a professional money management firm
   23  shall provide a report, at a minimum monthly or upon the
   24  occurrence of a material event, to every participant having a
   25  beneficial interest in the trust fund, the board’s executive
   26  director, the trustees, the Joint Legislative Auditing
   27  Committee, and the Investment Advisory Council, and the
   28  Participant Local Government Advisory Council. The report shall
   29  include:
   30         1. Reports of any material impacts on the trust fund and
   31  any actions or escalations taken by staff to address such
   32  impacts. The trustees shall provide quarterly a report to the
   33  Joint Legislative Auditing Committee that the trustees have
   34  reviewed and approved the monthly reports and actions taken, if
   35  any, to address any impacts.
   36         2. A management summary that provides an analysis of the
   37  status of the current investment portfolio and the individual
   38  transactions executed over the last month. This management
   39  summary shall be prepared in a manner that will allow anyone to
   40  ascertain whether investment activities during the reporting
   41  period have conformed to investment policies. Such reporting
   42  shall be in conformance with best market practices. The board or
   43  a professional money management firm shall furnish upon request
   44  the details of an investment transaction to any participant, the
   45  trustees, and the Investment Advisory Council, and the
   46  Participant Local Government Advisory Council.
   47         (b) The market value of the portfolio shall be calculated
   48  daily. Withdrawals from the trust fund shall be based on a
   49  process that is transparent to participants and will ensure that
   50  advantages or disadvantages do not occur to parties making
   51  deposits or withdrawals on any particular day. A statement of
   52  the market value and amortized cost of the portfolio shall be
   53  issued to participants in conjunction with any deposits or
   54  withdrawals. In addition, this information shall be reported
   55  monthly with the items in paragraph (a) to participants, the
   56  trustees, and the Investment Advisory Council, and the
   57  Participant Local Government Advisory Council. The review of the
   58  investment portfolio, in terms of value and price volatility,
   59  shall be performed with practices consistent with the GFOA
   60  Recommended Practice on “Mark-to-Market Practices for State and
   61  Local Government Investment Portfolios and Investment Pools.” In
   62  defining market value, consideration shall be given to GASB
   63  Statement 31. Additional reporting may be made to pool
   64  participants through regular and frequent ongoing multimedia
   65  educational materials and communications, including, but not
   66  limited to, historical performance, investment holdings,
   67  amortized cost and market value of the trust fund, credit
   68  quality, and average maturity of the trust fund investments.
   69         (8)(a) The principal, and any part thereof, of each account
   70  constituting the trust fund is subject to payment at any time
   71  from the moneys in the trust fund. However, the executive
   72  director may, in good faith, on the occurrence of an event that
   73  has a material impact on liquidity or operations of the trust
   74  fund, for 48 hours limit contributions to or withdrawals from
   75  the trust fund to ensure that the board can invest moneys
   76  entrusted to it in exercising its fiduciary responsibility. Such
   77  action must be immediately disclosed to all participants, the
   78  trustees, the Joint Legislative Auditing Committee, and the
   79  Investment Advisory Council, and the Participant Local
   80  Government Advisory Council. The trustees shall convene an
   81  emergency meeting as soon as practicable from the time the
   82  executive director has instituted such measures and review the
   83  necessity of those measures. If the trustees are unable to
   84  convene an emergency meeting before the expiration of the 48
   85  hour moratorium on contributions and withdrawals, the moratorium
   86  may be extended by the executive director until the trustees are
   87  able to meet to review the necessity for the moratorium. If the
   88  trustees agree with such measures, the trustees shall vote to
   89  continue the measures for up to an additional 15 days. The
   90  trustees must convene and vote to continue any such measures
   91  before the expiration of the time limit set, but in no case may
   92  the time limit set by the trustees exceed 15 days.
   93         (9) The Auditor General shall conduct an annual financial
   94  audit of the trust fund, which shall include testing for
   95  compliance with the investment policy. The completed audit shall
   96  be provided to the participants, the board, the trustees, the
   97  Investment Advisory Council, the Participant Local Government
   98  Advisory Council, and the Joint Legislative Auditing Committee.
   99  As soon as practicable, but no later than 30 days after
  100  completion of the audit, the trustees shall report to the Joint
  101  Legislative Auditing Committee that the trustees have reviewed
  102  the audit of the trust fund and shall certify that any necessary
  103  items are being addressed by a corrective action plan that
  104  includes target completion dates.
  105         (10)(a)There is created a six-member Participant Local
  106  Government Advisory Council for the purposes of regularly
  107  reviewing the administration of the trust fund and making
  108  recommendations regarding such administration to the trustees.
  109  The members of the council shall be appointed by the board and
  110  subject to confirmation by the Senate. Members must possess
  111  special knowledge, experience, and familiarity obtained through
  112  active, long-standing, and material participation in the
  113  dealings of the trust fund. Each member shall serve a 4-year
  114  term. Any vacancy shall be filled for the remainder of the
  115  unexpired term. The council shall annually elect a chair and
  116  vice chair from within its membership. A member may not serve
  117  consecutive terms as chair or vice chair.
  118         (b)The council shall prepare and submit a written biennial
  119  report to the board, trustees, the Investment Advisory Council,
  120  and the Joint Legislative Auditing Committee that describes the
  121  activities and recommendations of the council.
  122         Section 2. Paragraph (c) of subsection (2) and paragraph
  123  (a) of subsection (3) of section 218.421, Florida Statutes, are
  124  amended to read:
  125         218.421 Fund B Surplus Funds Trust Fund; purpose;
  126  rulemaking; administration; reporting.—
  127         (2)
  128         (c) The investment policy shall be reviewed and approved by
  129  the trustees upon the transfer of the funds into the trust fund
  130  or when market changes dictate, and in each event, the
  131  investment policy shall be reviewed by the Investment Advisory
  132  Council and by the Participant Local Government Advisory
  133  Council.
  134         (3)(a) The board or a professional money management firm
  135  shall provide a report at a minimum, monthly, or upon the
  136  occurrence of a material event, to every participant having a
  137  beneficial interest in the trust fund, the board’s executive
  138  director, the trustees, the Joint Legislative Auditing
  139  Committee, and the Investment Advisory Council, and the
  140  Participant Local Government Advisory Council. The report shall
  141  include:
  142         1. Reports of any material impacts on the trust fund, and
  143  any actions or escalations taken by staff to address such
  144  impacts. The trustees shall provide quarterly a report to the
  145  Joint Legislative Auditing Committee that the trustees have
  146  reviewed and approved the monthly reports and actions taken, if
  147  any, to address any impacts.
  148         2. A management summary that provides an analysis of the
  149  status of the current investment portfolio and the individual
  150  transactions executed over the last month. This management
  151  summary shall be prepared in a manner that will allow anyone to
  152  ascertain whether investment activities during the reporting
  153  period have conformed to investment policies. Such reporting
  154  shall be in conformance with best market practices.
  155         3. The board or a professional money management firm shall
  156  furnish upon request the details of an investment transaction to
  157  any participant, the trustees, and the Investment Advisory
  158  Council, and the Participant Local Government Advisory Council.
  159         Section 3. Section 218.422, Florida Statutes, is amended to
  160  read:
  161         218.422 Fund B Surplus Funds Trust Fund; review.—Unless the
  162  Fund B Surplus Funds Trust Fund has been terminated by law or
  163  through self-liquidation, prior to the 2013 Regular Session of
  164  the Legislature, the Auditor General shall review the trust fund
  165  and the steps taken up to that time to return as much of the
  166  principal to the participants as possible and provide a summary
  167  report to the board, the trustees, the President of the Senate,
  168  the Speaker of the House of Representatives, and the Investment
  169  Advisory Council, and the Participant Local Government Advisory
  170  Council.
  171         Section 4. This act shall take effect upon becoming a law.