House Bill 0823e1
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CS/HB 823, First Engrossed
1 A bill to be entitled
2 An act relating to financial matters; amending
3 s. 18.10, F.S., which provides requirements for
4 deposit and investment of state money; revising
5 the standards that certain corporate
6 obligations and state and local government
7 obligations must meet to be qualified for such
8 investment; authorizing investment in certain
9 foreign bonds and certain convertible debt
10 obligations of corporations domiciled in the
11 United States; amending s. 766.315, F.S.;
12 providing that the investment of funds by the
13 Florida Birth-Related Neurological Injury
14 Compensation Association is subject to the
15 provisions of s. 215.47, F.S.; providing an
16 effective date.
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18 Be It Enacted by the Legislature of the State of Florida:
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20 Section 1. Subsection (2) of section 18.10, Florida
21 Statutes, is amended to read:
22 18.10 Deposits and investments of state money.--
23 (2) The Treasurer shall make funds available to meet
24 the disbursement needs of the state. Funds which are not
25 needed for this purpose shall be placed in qualified public
26 depositories that will pay rates established by the Treasurer
27 at levels not less than the prevailing rate for United States
28 Treasury securities with a corresponding maturity. In the
29 event money is available for interest-bearing time deposits or
30 savings accounts as provided herein and qualified public
31 depositories are unwilling to accept such money and pay
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CS/HB 823, First Engrossed
1 thereon the rates established above, then such money which
2 qualified public depositories are unwilling to accept shall be
3 invested in:
4 (a) Direct United States Treasury obligations.
5 (b) Obligations of the Federal Farm Credit Banks.
6 (c) Obligations of the Federal Home Loan Bank and its
7 district banks.
8 (d) Obligations of the Federal Home Loan Mortgage
9 Corporation, including participation certificates.
10 (e) Obligations guaranteed by the Government National
11 Mortgage Association.
12 (f) Obligations of the Federal National Mortgage
13 Association.
14 (g) Commercial paper of prime quality of the highest
15 letter and numerical rating as provided for by at least one
16 nationally recognized rating service.
17 (h) Time drafts or bills of exchange drawn on and
18 accepted by a commercial bank, otherwise known as "bankers
19 acceptances," which are accepted by a member bank of the
20 Federal Reserve System having total deposits of not less than
21 $400 million or which are accepted by a commercial bank which
22 is not a member of the Federal Reserve System with deposits of
23 not less than $400 million and which is licensed by a state
24 government or the Federal Government, and whose senior debt
25 issues are rated in one of the two highest rating categories
26 by a nationally recognized rating service and which are held
27 in custody by a domestic bank which is a member of the Federal
28 Reserve System.
29 (i) Intermediate-term Corporate obligations or
30 corporate master notes of any corporation within the United
31 States, if the long-term obligations of such corporation are
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CS/HB 823, First Engrossed
1 rated by at least two nationally recognized rating services in
2 any one of the four three highest classifications. However, if
3 such obligations are rated by on ly one nationally recognized
4 rating service, then the obligations shall be rated in any one
5 of the two highest classifications.
6 (j) Obligations of the Student Loan Marketing
7 Association.
8 (k) Obligations of the Resolution Funding Corporation.
9 (l) Asset-backed or mortgage-backed securities of the
10 highest credit quality.
11 (m) Any obligations not previously listed which are
12 guaranteed as to principal and interest by the full faith and
13 credit of the United States Government or are obligations of
14 United States agencies or instrumentalities which are rated in
15 the highest category by a nationally recognized rating
16 service.
17 (n) Commingled no-load investment funds or no-load
18 mutual funds in which all securities held by the funds are
19 authorized in this subsection.
20 (o) Money market mutual funds as defined and regulated
21 by the Securities and Exchange Commission.
22 (p) Obligations of state and local governments rated
23 in any of the four three highest classifications by at least
24 two one or more nationally recognized rating services if their
25 purchase is for the purpose of meeting federal investment
26 requirements for funds accumulated from bonds or other
27 obligations. However, if such obligations are rated by only
28 one nationally recognized rating service, then the obligations
29 shall be rated in any one of the two highest classifications.
30 (q) Derivatives of investment instruments authorized
31 in paragraphs (a) through (m).
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CS/HB 823, First Engrossed
1 (r) Covered put and call options on investment
2 instruments authorized in this subsection for the purpose of
3 hedging transactions by investment managers to mitigate risk
4 or to facilitate portfolio management.
5 (s) Negotiable certificates of deposit issued by
6 financial institutions whose long-term debt is rated in one of
7 the three highest categories by at least two nationally
8 recognized rating services, the investment in which shall not
9 be prohibited by any provision of chapter 280.
10 (t) Foreign bonds denominated in United States dollars
11 and registered with the Securities and Exchange Commission for
12 sale in the United States, if the long-term obligations of
13 such issuers are rated by at least two nationally recognized
14 rating services in any one of the four highest
15 classifications. However, if such obligations are rated by
16 only one nationally recognized rating service, the obligations
17 shall be rated in any one of the two highest classifications.
18 (u) Convertible debt obligations of any corporation
19 domiciled within the United States, if the convertible debt
20 issue is rated by at least two nationally recognized rating
21 services in any one of the four highest classifications.
22 However, if such obligations are rated by only one nationally
23 recognized rating service, then the obligations shall be rated
24 in any one of the two highest classifications.
25 (v)(t) Securities not otherwise described in this
26 subsection. However, not more than 3 percent of the funds
27 under the control of the Treasurer shall be invested in
28 securities described in this paragraph.
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30 These investments may be in varying maturities and may be in
31 book-entry form. Investments made pursuant to this subsection
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CS/HB 823, First Engrossed
1 may be under repurchase agreement. The Treasurer is authorized
2 to hire registered investment advisers and other consultants
3 to assist in investment management and to pay fees directly
4 from investment earnings. Investment securities, proprietary
5 investment services related to contracts, performance
6 evaluation services, investment-related equipment or software
7 used directly to assist investment trading or investment
8 accounting operations including bond calculators, telerates,
9 Bloombergs, special program calculators, intercom systems, and
10 software used in accounting, communications, and trading, and
11 advisory and consulting contracts made under this section are
12 exempt from the provisions of chapter 287.
13 Section 2. Paragraph (e) of subsection (5) of section
14 766.315, Florida Statutes, is amended to read:
15 766.315 Florida Birth-Related Neurological Injury
16 Compensation Association; board of directors.--
17 (5)
18 (e) Any Funds held on behalf of the plan are funds of
19 the State of Florida. The association may only invest plan
20 funds in the investments and securities described in s.
21 215.47, and shall be subject to the limitations on investments
22 contained in that section must be invested in interest-bearing
23 investments by the association. All income derived from such
24 investments will be credited to the plan.
25 Section 3. This act shall take effect July 1 of the
26 year in which enacted.
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