House Bill 0823e2

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                                       CS/HB 823, Second 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.; amending s.

16         626.8473, F.S.; providing for funds to be held

17         in trust by a title insurance agent to be held

18         in the same manner required for deposits of

19         state funds; amending ss. 125.31, 136.01,

20         159.09, 166.261, 218.345, 236.24, 255.502, and

21         331.309, F.S.; providing for deposit of certain

22         public funds in qualified public depositories

23         or certain chartered depositories; amending s.

24         280.02, F.S.; defining governmental unit;

25         revising the definition of qualified public

26         depository; amending s. 280.03, F.S.; requiring

27         deposit of public deposits into qualified

28         public depositories; providing exemptions;

29         amending s. 280.04, F.S.; clarifying certain

30         collateral requirements; amending s. 280.05,

31         F.S.; revising provisions providing powers and


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                                       CS/HB 823, Second Engrossed



  1         duties of the Treasurer; amending s. 280.07,

  2         F.S.; requiring qualified public depositories

  3         to execute a form for certain purposes;

  4         amending s. 280.08, F.S.; revising procedures

  5         for payment of losses; amending s. 280.16,

  6         F.S.; providing requirements for qualified

  7         public depositories; amending s. 280.17, F.S.;

  8         revising requirements for public depositors;

  9         amending s. 280.18, F.S.; providing for

10         protection from loss to public depositors;

11         limiting liability of the state and the

12         Treasurer; providing an effective date.

13

14  Be It Enacted by the Legislature of the State of Florida:

15

16         Section 1.  Subsection (2) of section 18.10, Florida

17  Statutes, is amended to read:

18         18.10  Deposits and investments of state money.--

19         (2)  The Treasurer shall make funds available to meet

20  the disbursement needs of the state. Funds which are not

21  needed for this purpose shall be placed in qualified public

22  depositories that will pay rates established by the Treasurer

23  at levels not less than the prevailing rate for United States

24  Treasury securities with a corresponding maturity. In the

25  event money is available for interest-bearing time deposits or

26  savings accounts as provided herein and qualified public

27  depositories are unwilling to accept such money and pay

28  thereon the rates established above, then such money which

29  qualified public depositories are unwilling to accept shall be

30  invested in:

31         (a)  Direct United States Treasury obligations.


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                                       CS/HB 823, Second Engrossed



  1         (b)  Obligations of the Federal Farm Credit Banks.

  2         (c)  Obligations of the Federal Home Loan Bank and its

  3  district banks.

  4         (d)  Obligations of the Federal Home Loan Mortgage

  5  Corporation, including participation certificates.

  6         (e)  Obligations guaranteed by the Government National

  7  Mortgage Association.

  8         (f)  Obligations of the Federal National Mortgage

  9  Association.

10         (g)  Commercial paper of prime quality of the highest

11  letter and numerical rating as provided for by at least one

12  nationally recognized rating service.

13         (h)  Time drafts or bills of exchange drawn on and

14  accepted by a commercial bank, otherwise known as "bankers

15  acceptances," which are accepted by a member bank of the

16  Federal Reserve System having total deposits of not less than

17  $400 million or which are accepted by a commercial bank which

18  is not a member of the Federal Reserve System with deposits of

19  not less than $400 million and which is licensed by a state

20  government or the Federal Government, and whose senior debt

21  issues are rated in one of the two highest rating categories

22  by a nationally recognized rating service and which are held

23  in custody by a domestic bank which is a member of the Federal

24  Reserve System.

25         (i)  Intermediate-term Corporate obligations or

26  corporate master notes of any corporation within the United

27  States, if the long-term obligations of such corporation are

28  rated by at least two nationally recognized rating services in

29  any one of the four three highest classifications. However, if

30  such obligations are rated by on ly one nationally recognized

31


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                                       CS/HB 823, Second Engrossed



  1  rating service, then the obligations shall be rated in any one

  2  of the two highest classifications.

  3         (j)  Obligations of the Student Loan Marketing

  4  Association.

  5         (k)  Obligations of the Resolution Funding Corporation.

  6         (l)  Asset-backed or mortgage-backed securities of the

  7  highest credit quality.

  8         (m)  Any obligations not previously listed which are

  9  guaranteed as to principal and interest by the full faith and

10  credit of the United States Government or are obligations of

11  United States agencies or instrumentalities which are rated in

12  the highest category by a nationally recognized rating

13  service.

14         (n)  Commingled no-load investment funds or no-load

15  mutual funds in which all securities held by the funds are

16  authorized in this subsection.

17         (o)  Money market mutual funds as defined and regulated

18  by the Securities and Exchange Commission.

19         (p)  Obligations of state and local governments rated

20  in any of the four three highest classifications by at least

21  two one or more nationally recognized rating services if their

22  purchase is for the purpose of meeting federal investment

23  requirements for funds accumulated from bonds or other

24  obligations. However, if such obligations are rated by only

25  one nationally recognized rating service, then the obligations

26  shall be rated in any one of the two highest classifications.

27         (q)  Derivatives of investment instruments authorized

28  in paragraphs (a) through (m).

29         (r)  Covered put and call options on investment

30  instruments authorized in this subsection for the purpose of

31


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                                       CS/HB 823, Second Engrossed



  1  hedging transactions by investment managers to mitigate risk

  2  or to facilitate portfolio management.

  3         (s)  Negotiable certificates of deposit issued by

  4  financial institutions whose long-term debt is rated in one of

  5  the three highest categories by at least two nationally

  6  recognized rating services, the investment in which shall not

  7  be prohibited by any provision of chapter 280.

  8         (t)  Foreign bonds denominated in United States dollars

  9  and registered with the Securities and Exchange Commission for

10  sale in the United States, if the long-term obligations of

11  such issuers are rated by at least two nationally recognized

12  rating services in any one of the four highest

13  classifications.  However, if such obligations are rated by

14  only one nationally recognized rating service, the obligations

15  shall be rated in any one of the two highest classifications.

16         (u)  Convertible debt obligations of any corporation

17  domiciled within the United States, if the convertible debt

18  issue is rated by at least two nationally recognized rating

19  services in any one of the four highest classifications.

20  However, if such obligations are rated by only one nationally

21  recognized rating service, then the obligations shall be rated

22  in any one of the two highest classifications.

23         (v)(t)  Securities not otherwise described in this

24  subsection. However, not more than 3 percent of the funds

25  under the control of the Treasurer shall be invested in

26  securities described in this paragraph.

27

28  These investments may be in varying maturities and may be in

29  book-entry form. Investments made pursuant to this subsection

30  may be under repurchase agreement. The Treasurer is authorized

31  to hire registered investment advisers and other consultants


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                                       CS/HB 823, Second Engrossed



  1  to assist in investment management and to pay fees directly

  2  from investment earnings. Investment securities, proprietary

  3  investment services related to contracts, performance

  4  evaluation services, investment-related equipment or software

  5  used directly to assist investment trading or investment

  6  accounting operations including bond calculators, telerates,

  7  Bloombergs, special program calculators, intercom systems, and

  8  software used in accounting, communications, and trading, and

  9  advisory and consulting contracts made under this section are

10  exempt from the provisions of chapter 287.

11         Section 2.  Paragraph (e) of subsection (5) of section

12  766.315, Florida Statutes, is amended to read:

13         766.315  Florida Birth-Related Neurological Injury

14  Compensation Association; board of directors.--

15         (5)

16         (e)  Any Funds held on behalf of the plan are funds of

17  the State of Florida. The association may only invest plan

18  funds in the investments and securities described in s.

19  215.47, and shall be subject to the limitations on investments

20  contained in that section must be invested in interest-bearing

21  investments by the association. All income derived from such

22  investments will be credited to the plan.

23         Section 3.  Subsection (3) of section 626.8473, Florida

24  Statutes, is amended to read:

25         626.8473  Escrow; trust fund.--

26         (3)  All funds received by a title insurance agent to

27  be held in trust shall be immediately placed in an escrow

28  trust account in a financial institution that is located

29  within this state and is a member of the Federal Deposit

30  Insurance Corporation or the National Credit Union Share

31  Insurance Fund. These funds shall be invested in an escrow


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                                       CS/HB 823, Second Engrossed



  1  account in accordance with the investment requirements and

  2  standards established for deposits and investments of state

  3  funds in s. 18.10 insured by an agency of the federal

  4  government and located within this state, where the funds

  5  shall be kept until disbursement thereof is properly

  6  authorized.

  7         Section 4.  Paragraph (c) of subsection (1) and

  8  subsection (2) of section 125.31, Florida Statutes, are

  9  amended to read:

10         125.31  Investment of surplus public funds;

11  regulations.--

12         (1)  Unless otherwise authorized by law or by

13  ordinance, the board of county commissioners shall, by

14  resolution to be adopted from time to time, invest and

15  reinvest any surplus public funds in its control or possession

16  in:

17         (c)  Interest-bearing time deposits or savings accounts

18  in qualified public depositories as defined in s. 280.02 banks

19  organized under the laws of this state, in national banks

20  organized under the laws of the United States and doing

21  business and situated in this state, in savings and loan

22  associations which are under state supervision, or in federal

23  savings and loan associations located in this state and

24  organized under federal law and federal supervision, provided

25  that any such deposits are secured by collateral as may be

26  prescribed by law;

27         (2)(a)  Every security purchased under this section on

28  behalf of the governing body of a county shall be properly

29  earmarked and:

30

31


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                                       CS/HB 823, Second Engrossed



  1         1.  If registered with the issuer or its agents, shall

  2  be immediately placed for safekeeping in a location which

  3  protects the governing body's interest in the security;

  4         2.  If in book entry form, shall be held for the credit

  5  of the governing body of the county by a depository chartered

  6  by either the Federal Government, or the state, or any other

  7  state or territory of the United States, that has a branch or

  8  principal place of business in this state as defined in s.

  9  658.12, and shall be kept by the depository in an account

10  separate and apart from the assets of the financial

11  institution; or

12         3.  If physically issued to the holder but not

13  registered with the issuer or its agents, shall be immediately

14  placed for safekeeping in a safe-deposit box in a financial

15  institution in this state that maintains adequate safe-deposit

16  box insurance.

17         (b)  The board of county commissioners may also receive

18  bank trust receipts in return for investment of surplus funds

19  in securities.  Any trust receipts received must enumerate the

20  various securities held together with the specific number of

21  each security held.  The actual securities on which the trust

22  receipts are issued may be held by any bank depository

23  chartered by the United States Government, or the State of

24  Florida, or any other state or territory of the United States,

25  that has a branch or principal place of business in this state

26  as defined in s. 658.12 their designated agents.

27         Section 5.  Section 136.01, Florida Statutes, is

28  amended to read:

29         136.01  County depositories.--Each county depository

30  shall be a qualified public depository as defined in s. 280.02

31  for the following Any bank or savings association organized


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                                       CS/HB 823, Second Engrossed



  1  under the laws of this state or of the United States and

  2  authorized to do business in this state which, as to the

  3  various funds herein referred to, conforms to the requirements

  4  of chapter 280 is authorized to accept county deposits.  These

  5  funds include: county funds; funds of all county officers,

  6  including constitutional officers; funds of the school board;

  7  and funds of the community college district board of trustees.

  8  This enumeration of funds is made not by way of limitation,

  9  but of illustration; and it is the intent hereof that all

10  funds of the county, the board of county commissioners or the

11  several county officers, the school board, or the community

12  college district board of trustees be included.

13         Section 6.  Section 159.09, Florida Statutes, is

14  amended to read:

15         159.09  Trust agreement.--In the discretion of the

16  governing body, each or any issue of such bonds may be secured

17  by a trust agreement by and between the unit and a corporate

18  trustee, which may be any trust company or bank having the

19  powers of a trust company within or outside the state.  Such

20  trust agreement may pledge or assign the revenues to be

21  received, but shall not convey or mortgage any project or any

22  part thereof. Either the ordinance or resolution providing for

23  the issuance of revenue bonds or such trust agreement may

24  contain such provisions for protecting and enforcing the

25  rights and remedies of the bondholders as may be reasonable

26  and proper and not in violation of law, including covenants

27  setting forth the duties of the unit and the governing body

28  thereof in relation to the acquisition, construction,

29  improvement, maintenance, operation, repair, and insurance of

30  the project, and the custody, safeguarding, and application of

31  all moneys.  It shall be lawful for any bank or trust company


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                                       CS/HB 823, Second Engrossed



  1  incorporated under the laws of this state, or any other state

  2  or territory of the United States, that has a branch or

  3  principal place of business in this state as defined in s.

  4  658.12, to act as such depository and to furnish such

  5  indemnifying bonds or to pledge such securities as may be

  6  required by the governing body. Such ordinance or resolution

  7  or such trust agreement may set forth the rights and remedies

  8  of the bondholders and of the trustee, if any, and may

  9  restrict the individual right of action by bondholders as is

10  customary in trust agreements or trust indentures securing

11  bonds or debentures of corporations.  In addition to the

12  foregoing, such ordinance or resolution or such trust

13  agreement may contain such other provisions as the governing

14  body may deem reasonable and proper for the security of

15  bondholders.  Except as in this part otherwise provided, the

16  governing body may provide, by ordinance or resolution or by

17  such trust agreement, for the payment of the proceeds of the

18  sale of the bonds and the revenues of the project to such

19  officer, board or depository as it may determine for the

20  custody thereof, and for the method of disbursement thereof,

21  with such safeguards and restrictions as it may determine.

22  All expenses incurred in carrying out such trust agreement may

23  be treated as a part of the cost of operation of the project

24  affected by such trust agreement.

25         Section 7.  Paragraph (c) of subsection (1) and

26  subsection (2) of section 166.261, Florida Statutes, are

27  amended to read:

28         166.261  Municipalities; investments.--

29         (1)  Unless otherwise authorized by law or by

30  ordinance, the governing body of each municipality shall, by

31  resolution to be adopted from time to time, invest and


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                                       CS/HB 823, Second Engrossed



  1  reinvest any surplus public funds in its control or possession

  2  in:

  3         (c)  Interest-bearing time deposits or savings accounts

  4  in qualified public depositories as defined in s. 280.02 banks

  5  organized under the laws of this state, in national banks

  6  organized under the laws of the United States and doing

  7  business and situated in this state, in savings and loan

  8  associations which are under state supervision, or in federal

  9  savings and loan associations located in this state and

10  organized under federal law and federal supervision, provided

11  that any such deposits are secured by collateral as may be

12  prescribed by law;

13         (2)(a)  Every security purchased under this section on

14  behalf of the governing body of a municipality shall be

15  properly earmarked and:

16         1.  If registered with the issuer or its agents, shall

17  be immediately placed for safekeeping in a location which

18  protects the interest of the governing body in the security;

19         2.  If in book entry form, shall be held for the credit

20  of the governing body of the municipality by a depository

21  chartered by either the Federal Government, or the state, or

22  any other state or territory of the United States, that has a

23  branch or principal place of business in this state as defined

24  in s. 658.12, and shall be kept by the depository in an

25  account separate and apart from the assets of the financial

26  institution; or

27         3.  If physically issued to the holder, but not

28  registered with the issuer or its agents, shall be immediately

29  placed for safekeeping in a safe-deposit box in a financial

30  institution in this state that maintains adequate safe-deposit

31  box insurance.


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                                       CS/HB 823, Second Engrossed



  1         (b)  The governing body may also receive bank trust

  2  receipts in return for investment of surplus funds in

  3  securities. Any trust receipts received must enumerate the

  4  various securities held, together with the specific number of

  5  each security held. The actual securities on which the trust

  6  receipts are issued may be held by any bank depository

  7  chartered by the United States Government, or the State of

  8  Florida, or any other state or territory of the United States,

  9  that has a branch or principal place of business in this state

10  as defined in s. 658.12, or their designated agents.

11         Section 8.  Paragraph (c) of subsection (1) and

12  paragraph (b) of subsection (2) of section 218.345, Florida

13  Statutes, are amended to read:

14         218.345  Special districts; investments.--

15         (1)  The governing body of each special district shall,

16  by resolution to be adopted from time to time, invest and

17  reinvest any surplus public funds in its control or possession

18  in:

19         (c)  Interest-bearing time deposits or savings accounts

20  in qualified public depositories as defined in s. 280.02 banks

21  organized under the laws of this state, in national banks

22  organized under the laws of the United States and doing

23  business and situated in this state, in savings and loan

24  associations which are under state supervision, or in federal

25  savings and loan associations located in this state and

26  organized under federal law and federal supervision, provided

27  that any such deposits are secured by collateral as may be

28  prescribed by law;

29         (2)

30         (b)  The governing body may also receive bank trust

31  receipts in return for investment of surplus funds in


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                                       CS/HB 823, Second Engrossed



  1  securities. Any trust receipts received must enumerate the

  2  various securities held, together with the specific number of

  3  each security held. The actual securities on which the trust

  4  receipts are issued may be held by any bank depository

  5  chartered by the United States Government, or the State of

  6  Florida, or any other state or territory of the United States,

  7  that has a branch or principal place of business in this state

  8  as defined in s. 658.12, or their designated agents.

  9         Section 9.  Paragraphs (a) and (b) of subsection (2) of

10  section 236.24, Florida Statutes, are amended to read:

11         236.24  Sources of district school fund.--

12         (2)(a)  Unless otherwise authorized by law or by

13  ordinance, each school board shall, by resolution to be

14  adopted from time to time, invest and reinvest any surplus

15  public funds in its control or possession in:

16         1.  The Local Government Surplus Funds Trust Fund;

17         2.  Negotiable direct obligations of, or obligations

18  the principal and interest of which are unconditionally

19  guaranteed by, the United States Government at the then

20  prevailing market price for such securities;

21         3.  Interest-bearing time deposits or savings accounts

22  in qualified public depositories as defined in s. 280.02 banks

23  organized under the laws of this state, in national banks

24  organized under the laws of the United States and doing

25  business and situated in this state, in savings and loan

26  associations which are under state supervision, or in federal

27  savings and loan associations located in this state and

28  organized under federal law and federal supervision, provided

29  that any such deposits are secured by collateral as may be

30  prescribed by law;

31


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                                       CS/HB 823, Second Engrossed



  1         4.  Obligations of the federal farm credit banks; the

  2  Federal Home Loan Mortgage Corporation, including Federal Home

  3  Loan Mortgage Corporation participation certificates; or the

  4  Federal Home Loan Bank or its district banks or obligations

  5  guaranteed by the Government National Mortgage Association;

  6         5.  Obligations of the Federal National Mortgage

  7  Association, including Federal National Mortgage Association

  8  participation certificates and mortgage pass-through

  9  certificates guaranteed by the Federal National Mortgage

10  Association; or

11         6.  Securities of, or other interests in, any open-end

12  or closed-end management type investment company or investment

13  trust registered under the Investment Company Act of 1940, 15

14  U.S.C. ss. 80a-1 et seq., as amended from time to time,

15  provided the portfolio of such investment company or

16  investment trust is limited to obligations of the United

17  States Government or any agency or instrumentality thereof and

18  to repurchase agreements fully collateralized by such United

19  States Government obligations, and provided such investment

20  company or investment trust takes delivery of such collateral

21  either directly or through an authorized custodian.

22         (b)1.  Securities purchased by any such school board

23  under the authority of this law shall be delivered by the

24  seller to the school board or its appointed safekeeper.  The

25  safekeeper shall be a qualified bank or trust company

26  chartered to operate as such by the State of Florida, any

27  other state or territory of the United States, or the United

28  States Government, that has a branch or principal place of

29  business in this state as defined in s. 658.12.  The

30  safekeeper shall issue documentation for each transaction, and

31  a monthly statement detailing all transactions for the period.


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                                       CS/HB 823, Second Engrossed



  1         2.  Securities physically delivered to the school board

  2  shall be placed in a safe-deposit box in a bank or other

  3  institution located within the county and duly licensed and

  4  insured.  Withdrawals from such safe-deposit box shall be only

  5  by persons duly authorized by resolution of the school board.

  6         3.  The school board may also receive bank trust

  7  receipts in return for investment of surplus funds in

  8  securities.  Any trust receipts received must enumerate the

  9  various securities held together with the specific number of

10  each security held.  The actual securities on which the trust

11  receipts are issued may be held by any bank depository

12  chartered by the United States Government, or the State of

13  Florida, or any other state or territory of the United States,

14  that has a branch or principal place of business in this state

15  as defined in s. 658.12, or their designated agents.

16         Section 10.  Paragraph (h) of subsection (4) of section

17  255.502, Florida Statutes, is amended to read:

18         255.502  Definitions; ss. 255.501-255.525.--As used in

19  this act, the following words and terms shall have the

20  following meanings unless the context otherwise requires:

21         (4)  "Authorized investments" means and includes

22  without limitation any investment in:

23         (h)  Savings accounts in, or certificates of deposit

24  of, qualified public depositories as defined in s. 280.02 any

25  bank, savings bank, or savings and loan association which is

26  incorporated under the laws of this state or organized under

27  the laws of the United States and is doing business and

28  situated in this state, the accounts of which are insured by

29  the Federal Government or an agency thereof, in an amount that

30  does not exceed 15 percent of the net worth of the

31  institution, or a lesser amount as determined by rule by the


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                                       CS/HB 823, Second Engrossed



  1  State Board of Administration, provided such savings accounts

  2  and certificates of deposit are secured in the manner

  3  prescribed in chapter 280.

  4

  5  Investments in any security authorized in this subsection may

  6  be under repurchase agreements or reverse repurchase

  7  agreements.

  8         Section 11.  Subsections (11) through (19) of section

  9  280.02, Florida Statutes, are renumbered as subsections (12)

10  through (20), respectively, a new subsection (11) is added to

11  said section, and present subsection (16) is renumbered and

12  amended, to read:

13         280.02  Definitions.--As used in this chapter, the

14  term:

15         (11)  "Governmental unit" means the state or any

16  county, school district, community college district, special

17  district, metropolitan government, or municipality, including

18  any agency, board, bureau, commission, and institution of any

19  of such entities, or any court.

20         (17)(16)  "Qualified public depository" means any bank,

21  savings bank, or savings association that:

22         (a)  Is organized and exists under the laws of the

23  United States, the laws of this state or any other state or

24  territory of the United States.

25         (b)  Has its principal place of business in this state

26  or has a branch office in this state which is authorized under

27  the laws of this state or of the United States to receive

28  deposits in this state.

29         (c)  Has deposit insurance under the provision of the

30  Federal Deposit Insurance Act, as amended, 12 U.S.C. ss. 1811

31  et seq.


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                                       CS/HB 823, Second Engrossed



  1         (d)  Has procedures and practices for accurate

  2  identification, classification, reporting, and

  3  collateralization of public deposits.

  4         (e)(d)  Meets all the requirements of this chapter.

  5         (f)(e)  Has been designated by the Treasurer as a

  6  qualified public depository.

  7         Section 12.  Section 280.03, Florida Statutes, is

  8  amended to read:

  9         280.03  Public deposits to be secured; prohibitions;

10  exemptions exceptions.--

11         (1)(a)  All public deposits shall be secured as

12  provided in this chapter when public depositors comply with

13  the requirements of this chapter.

14         (b)  Public deposits shall be made in a qualified

15  public depository unless exempted by law. Notwithstanding the

16  provisions of any other law, a public deposit as defined in s.

17  280.02(13) may be deposited in a qualified public depository

18  as defined in s. 280.02(16).

19         (2)(b)  Public funds shall not be deposited directly or

20  indirectly in negotiable certificates of deposit.  Except as

21  otherwise provided by law, no public deposit may be made

22  except in a qualified public depository.

23         (3)(2)  The following are exempt from the requirements

24  of, and protection under, this chapter:

25         (a)  Public deposits deposited in a bank or savings

26  association by a trust department or trust company which are

27  fully secured under trust business laws. Every public deposit

28  held by a trust company, which trust company has legal title

29  thereto and is subject to the applicable provisions of

30  chapters 658 and 660 or such federal laws that are applicable

31  to trusts and trust companies, in trust or in escrow pursuant


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                                       CS/HB 823, Second Engrossed



  1  to the provisions of any written trust indenture or escrow

  2  agreement authorized by law, unless provided otherwise in the

  3  documents or proceedings authorizing the terms of and the

  4  execution of the trust indenture or escrow agreement, and

  5         (b)  Moneys of the System Trust Fund, as defined in s.

  6  121.021(36), are exempt from the requirements of this chapter.

  7         (c)(3)  Public deposits held outside the country are

  8  exempt from the requirements and protection of this chapter.

  9         (d)(4)  Wire transfers and transfers of funds for a

10  period not exceeding 7 days solely for the purpose of paying

11  registrars and paying agents are exempt from the requirements

12  of this chapter.

13         (e)  Public deposits which are fully secured under

14  federal regulations.

15         Section 13.  Paragraph (d) of subsection (1) of section

16  280.04, Florida Statutes, is amended to read:

17         280.04  Collateral for public deposits; general

18  provisions.--

19         (1)  Every qualified public depository shall deposit

20  with the Treasurer eligible collateral equal to or in excess

21  of the required collateral of the depository to be held

22  subject to his or her order.  The Treasurer, by rule, shall

23  establish minimum required collateral pledging levels and

24  shall notify each qualified public depository of its required

25  pledging level.  Each qualified public depository shall

26  calculate the amount of its required collateral based upon any

27  one or any combination of the following formulas:

28         (d)  One hundred twenty-five percent of the average

29  daily balance of public deposits in excess of 20 percent of

30  the total average monthly balances of public deposits held by

31  all qualified public depositories of the same type, i.e.,


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                                       CS/HB 823, Second Engrossed



  1  banks or savings associations.  The Treasurer shall determine

  2  the total average monthly balances of public deposits held

  3  during based on the immediately preceding 12-month period

  4  average.  That 12-month average amount must be disseminated to

  5  the qualified public depositories at such time and in such

  6  manner as the Treasurer determines appropriate.

  7         Section 14.  Section 280.05, Florida Statutes, is

  8  amended to read:

  9         280.05  Powers and duties of the Treasurer.--In

10  fulfilling the requirements of this act, the Treasurer has the

11  power to:

12         (1)(6)  Establish criteria, based on the overall

13  financial condition of the participant and applicants, as may

14  be necessary, to protect the integrity of the public deposits

15  program, to:

16         (a)  Refuse entry into the program by an applicant;

17         (b)  Order discontinuance of participation in the

18  program by a qualified public depository;

19         (c)  Restrict the total amount of public deposits a

20  depository may hold;

21         (d)  Establish collateral-pledging levels based on

22  qualitative and quantitative standards; and

23         (e)  Restrict substitutions of collateral subject to

24  the approval of the Treasurer.

25         (2)(9)  Appoint a six-member two separate three-member

26  advisory committee committees, one for banks and one for

27  savings associations, to review and recommend criteria to be

28  used by the Treasurer for purposes stated in subsection (1)

29  (6) in order to protect public deposits and the depositories

30  in the program.  Each member selected to serve on the an

31  advisory committee must be a representative of his or her


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                                       CS/HB 823, Second Engrossed



  1  respective industry.  Advisory committee members must

  2  represent active qualified public depositories, not in the

  3  process of withdrawing from the public deposits program, in

  4  compliance with all applicable rules, regulations, and

  5  reporting requirements of this chapter.  Members must possess

  6  knowledge, skill, and experience in one or more of the

  7  following areas:

  8         (a)  Financial analysis;

  9         (b)  Trend analysis;

10         (c)  Accounting;

11         (d)  Banking;

12         (e)  Risk management; or

13         (f)  Investment management.

14

15  Members' terms shall be for 4 years, except that in making the

16  initial appointments, the Treasurer shall appoint from each

17  group one member to serve 2 years, one member to serve 3

18  years, and one member to serve 4 years.  Any person appointed

19  to fill a vacancy on the advisory committee committees may

20  serve only for the remainder of the unexpired term.  Any

21  member is eligible for reappointment and shall serve until a

22  successor qualifies.  The Treasurer shall appoint a member of

23  each advisory committee to serve as its initial chair. The

24  Thereafter, each advisory committee shall elect a chair and

25  vice chair and shall also designate a secretary who need not

26  be a member of the advisory committee. The Each secretary

27  shall keep a record of the proceedings of the his or her

28  advisory committee and shall be the custodian of all printed

29  materials filed with or by the advisory committee.

30  Notwithstanding the existence of vacancies on the advisory

31  committee, a majority of the members constitutes a quorum. The


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                                       CS/HB 823, Second Engrossed



  1  Neither advisory committee shall not may take official action

  2  in the absence of a quorum.  Each member may name a designee

  3  to serve on the advisory committee on behalf of the member.

  4  However, any designee so named must meet the qualifications

  5  required of the selected member and be approved by the

  6  Treasurer.  The advisory committee committees shall convene as

  7  needed.

  8         (3)(10)  Establish goals and objectives and provide

  9  other data as may be necessary to assist the advisory

10  committee committees established under subsection (2) (9) in

11  developing standards for the program.

12         (4)(11)  Review, implement, monitor, evaluate, and

13  modify, as needed, all or any part of the standards and

14  policies recommended by an advisory committee.

15         (5)(16)  Perform financial analysis of any qualified

16  public depository as needed.

17         (6)(1)  Require such collateral, or increase the

18  collateral-pledging level, of any qualified public depository

19  as may be necessary to administer the provisions of this

20  chapter and to protect the integrity of the public deposits

21  program.

22         (7)(18)  Establish a minimum amount of required

23  collateral as the Treasurer deems necessary to provide for the

24  contingent liability pool pools.

25         (8)(2)  Decline to accept, or reduce the reported value

26  of, collateral as circumstances may require in order to ensure

27  the pledging of sufficient marketable collateral to meet the

28  purposes of this chapter.

29         (9)(15)  Maintain perpetual inventory of pledged

30  collateral and perform monthly market valuations and quality

31  ratings.


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                                       CS/HB 823, Second Engrossed



  1         (10)(13)  Monitor and confirm, as often as deemed

  2  necessary by the Treasurer, the pledged collateral held by

  3  third party custodians.

  4         (11)(17)  Perfect interest in pledged collateral by

  5  having pledged securities moved into an account established in

  6  the Treasurer's name.  This action shall be taken at the

  7  discretion of the Treasurer.

  8         (12)  Furnish written notice to custodians of

  9  collateral to hold interest and principal payments made on

10  securities held as collateral and to deposit or transfer such

11  payments pursuant to the Treasurer's instructions.

12         (13)  Release collateral held in the Treasurer's name,

13  subject to sale and transfer of funds directly from the

14  custodian to public depositors of a withdrawing depository.

15         (14)(7)  Sell pledged securities, or move pledged

16  securities to an account established in the Treasurer's name,

17  for the purpose of paying losses to public depositors not

18  covered by deposit insurance or to perfect the Treasurer's

19  interest in the pledged securities.

20         (15)(8)  Transfer funds directly from the custodian to

21  public depositors or the receiver in order to facilitate

22  prompt payment of claims.

23         (16)(14)  Require the filing of and inspect, review, or

24  analyze the following reports which the Treasurer shall

25  process as provided:

26         (a)  Qualified public depository monthly reports and

27  schedules. The Treasurer shall review the reports of each

28  qualified public depository for material changes in capital

29  accounts or changes in name, address, or type of institution,

30  record the average daily balances of public deposits held, and

31


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                                       CS/HB 823, Second Engrossed



  1  monitor the collateral-pledging levels and required

  2  collateral.

  3         (b)  Quarterly regulatory reports from qualified public

  4  depositories. The Treasurer shall analyze qualified public

  5  depositories ranked in the lowest category based on

  6  established financial condition criteria.

  7         (c)  Qualified public depository annual reports and

  8  public depositor annual reports. The Treasurer shall compare

  9  public deposit information reported by qualified public

10  depositories and public depositors.  Such comparison shall be

11  conducted for qualified public depositories which are ranked

12  in the lowest category based on established financial

13  condition criteria of record on September 30. Additional

14  comparison processes may be performed as public deposits

15  program resources permit.

16         (d)  Public depositors annual reports.

17         (d)(e)  Any related documents, reports, records, or

18  other information deemed necessary by the Treasurer in order

19  to ascertain compliance with this chapter.

20         (17)(4)  Verify the reports of any qualified public

21  depository relating to public deposits it holds when necessary

22  to protect the integrity of the public deposits program.

23         (18)(12)  Confirm public deposits, to the extent

24  possible under current law, when needed.

25         (19)  Require Allow at his or her discretion the filing

26  of any information or forms required under this chapter to be

27  by electronic data transmission. Such filings of information

28  or forms shall have the same enforceability as a signed

29  writing.

30         (20)(3)  Suspend or disqualify or disqualify after

31  suspension any qualified public depository that has violated


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                                       CS/HB 823, Second Engrossed



  1  any of the provisions of this chapter or of rules adopted

  2  hereunder.

  3         (a)  Any qualified public depository that is suspended

  4  or disqualified pursuant to this subsection is subject to the

  5  provisions of s. 280.11(2) governing withdrawal from the

  6  public deposits program and return of pledged collateral. Any

  7  suspension shall not exceed a period of 6 months.  Any

  8  qualified public depository which has been disqualified may

  9  not reapply for qualification until after the expiration of 1

10  year from the date of the final order of disqualification or

11  the final disposition of any appeal taken therefrom.

12         (b)  If the Treasurer finds that one or more grounds

13  exist for the suspension or disqualification of a qualified

14  public depository, he or she may, In lieu of such suspension

15  or disqualification, impose an administrative penalty upon the

16  qualified public depository as provided in s. 280.054.

17         (c)  If the Treasurer has reason to believe that any

18  qualified public depository or any other financial institution

19  holding public deposits is or has been violating any of the

20  provisions of this chapter or of rules adopted hereunder, he

21  or she may issue to the qualified public depository or other

22  financial institution an order to cease and desist from the

23  violation or to correct the condition giving rise to or

24  resulting from the violation.  If any qualified public

25  depository or other financial institution violates a

26  cease-and-desist or corrective order, the Treasurer may impose

27  an administrative penalty upon the qualified public depository

28  or other financial institution as provided in s. 280.054 or s.

29  280.055.  In addition to the administrative penalty, the

30  Treasurer may suspend or disqualify any qualified public

31


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                                       CS/HB 823, Second Engrossed



  1  depository for violation of any order issued pursuant to this

  2  paragraph.

  3         (5)  Allow an exception to public deposit limitations

  4  of any qualified public depository that has contracted with

  5  the Treasurer to clear the receipts of the State of Florida to

  6  the extent, and only to the extent, that clearing the receipts

  7  would violate this chapter.

  8         Section 15.  Section 280.07, Florida Statutes, is

  9  amended to read:

10         280.07  Mutual responsibility.--Any bank or savings

11  association that is designated as a qualified public

12  depository and that is not insolvent shall guarantee public

13  depositors against loss caused by the default or insolvency of

14  other qualified public depositories of the same type. Each

15  qualified public depository shall execute a form prescribed by

16  the Treasurer for such guarantee which shall be approved by

17  the board of directors and shall become an official record of

18  the institution. The Treasurer shall maintain separate and

19  totally independent contingent liability agreements, one such

20  agreement exclusively for banks and another exclusively for

21  savings associations.

22         Section 16.  Subsections (2) and (3) of section 280.08,

23  Florida Statutes, are amended to read:

24         280.08  Procedure for payment of losses.--When the

25  Treasurer determines that a default or insolvency has

26  occurred, he or she shall provide notice as required in s.

27  280.085(1) and implement the following procedures:

28         (2)  The potential loss to public depositors shall be

29  calculated by compiling claims received from such depositors.

30  The Treasurer shall validate claims on public deposit accounts

31  which meet the requirements of s. 280.17 and are confirmed as


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                                       CS/HB 823, Second Engrossed



  1  provided in subsection (1). Such claims shall be validated by

  2  the Treasurer.

  3         (3)(a)  The loss to public depositors shall be

  4  satisfied, insofar as possible, first through any applicable

  5  deposit insurance and then through the sale of securities

  6  pledged or deposited by the defaulting depository. The

  7  Treasurer may assess qualified public depositories as provided

  8  in paragraph (b) for the total loss if the sale of securities

  9  cannot be accomplished within 7 business days.

10         (b)(3)  If the loss to public depositors is not covered

11  by such insurance or the proceeds of such sale, The Treasurer

12  shall provide coverage of any the remaining loss by assessment

13  against the other qualified public depositories of the same

14  type as the depository in default.  However, if the sale of

15  securities cannot be accomplished within 7 days, the Treasurer

16  may proceed with the assessment to qualified public

17  depositories. The Treasurer shall determine such assessment

18  for each qualified public depository shall be determined by

19  multiplying the total amount of any remaining the loss to all

20  public depositors by a percentage which represents the average

21  monthly balance share of public fund deposits held by each

22  that qualified public depository during the previous 12 months

23  divided by the average total average monthly balances of

24  public deposits held by all qualified public depositories,

25  excluding the defaulting depository, of the same type during

26  the same 12-month period. The assessment calculation shall be

27  computed to six decimal places.

28         Section 17.  Section 280.16, Florida Statutes, is

29  amended to read:

30         280.16  Requirements Reports of qualified public

31  depositories; confidentiality.--


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                                       CS/HB 823, Second Engrossed



  1         (1)  In addition to any other requirements specified in

  2  this chapter, qualified public depositories shall:

  3         (a)  Beginning July 1, 1998, take the following actions

  4  for each public deposit account:

  5         1.  Identify the account as a "Florida public deposit"

  6  on the deposit account record with the name of the public

  7  depositor or provide a unique code for the account for such

  8  designation.

  9         2.  When the form prescribed by the Treasurer for

10  acknowledgment of receipt of each public deposit account is

11  presented to the qualified public depository by the public

12  depositor opening an account, the qualified public depository

13  shall execute and return the completed form to the public

14  depositor.

15         3.  When the acknowledgment of receipt form is

16  presented to the qualified public depository by the public

17  depositor due to a change of account name, account number, or

18  qualified public depository name on an existing public deposit

19  account, the qualified public depository shall execute and

20  return the completed form to the public depositor within 45

21  calendar days after such presentation.

22         4.  When the acknowledgment of receipt form is

23  presented to the qualified public depository by the public

24  depositor on an account existing before July 1, 1998, the

25  qualified public depository shall execute and return the

26  completed form to the public depositor within 45 calendar days

27  after such presentation.

28         (b)(1)  Within 15 days after the end of each calendar

29  month, or when requested by the Treasurer, each qualified

30  public depository shall submit to the Treasurer a written

31  report, under oath, indicating the average daily balance of


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                                       CS/HB 823, Second Engrossed



  1  all public deposits held by it during the reported month,

  2  required collateral, a detailed schedule of all securities

  3  pledged as collateral, selected financial information, and any

  4  other information that the Treasurer determines necessary to

  5  administer this chapter.

  6         (c)  Provide to each public depositor annually, not

  7  later than October 30, the following information on all open

  8  accounts identified as a "Florida public deposit" for that

  9  public depositor as of September 30, to be used for

10  confirmation purposes: the federal employer identification

11  number of the qualified public depository, the name on the

12  deposit account record, the federal employer identification

13  number on the deposit account record, and the account number,

14  account type, and actual account balance on deposit. Any

15  discrepancy found in the confirmation process shall be

16  reconciled before November 30.

17         (d)(2)  Submit to the Treasurer annually, not later

18  than November 30 15, each qualified public depository shall

19  cause to be delivered to the Treasurer, from the president or

20  chief executive officer of the depository or a person

21  qualified to conduct audits, a report statement of all public

22  deposits held for the credit of all public depositors at the

23  close of business on September 30 each year. Such annual

24  report shall consist of public deposit information in a report

25  format prescribed by the Treasurer. The manner of required

26  filing may be as a signed writing or electronic data

27  transmission, at the discretion of the Treasurer.

28         (e)(3)  In addition to the reports required in

29  subsections (1) and (2), each qualified public depository

30  shall Submit to the Treasurer not later than within 10 days

31


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                                       CS/HB 823, Second Engrossed



  1  after the date it is required to be filed with the federal

  2  agency:

  3         1.(a)  A copy of the quarterly Consolidated Reports of

  4  Condition and Income, and any amended reports, required by the

  5  Federal Deposit Insurance Act, 12 U.S.C. ss. 1811 et seq., if

  6  such depository is a bank; or

  7         2.(b)  A copy of the Thrift Financial Report, and any

  8  amended reports, required to be filed with the Office of

  9  Thrift Supervision if such depository is a savings and loan

10  association.

11         (2)(4)  In addition to the requirements of subsection

12  (1), The following forms must be made under oath:

13         (a)  The agreement of contingent liability.

14         (b)  The public depository pledge agreement.

15         (c)  The public depository change of name, address, and

16  type of institution.

17         (3)(5)  Any information contained in a report of a

18  qualified public depository required under this chapter or any

19  rule adopted under this chapter, together with any information

20  required of a financial institution that is not a qualified

21  public depository, shall, if made confidential by any law of

22  the United States or of this state, be considered confidential

23  and exempt from the provisions of s. 119.07(1) and not subject

24  to dissemination to anyone other than the Treasurer under the

25  provisions of this chapter; however, it is the responsibility

26  of each qualified public depository and each financial

27  institution from which information is required to inform the

28  Treasurer of information that is confidential and the law

29  providing for the confidentiality of that information, and the

30  Treasurer does not have a duty to inquire into whether

31  information is confidential.


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                                       CS/HB 823, Second Engrossed



  1         Section 18.  Section 280.17, Florida Statutes, is

  2  amended to read:

  3         280.17  Requirements for public depositors; notice to

  4  public depositors and governmental units; loss of

  5  protection.--In addition to any other requirement specified in

  6  this chapter, public depositors shall must comply with the

  7  following requirements:

  8         (1)(a)  Each official custodian of moneys, that meet

  9  the definition of a public deposit under s. 280.02, shall

10  ensure such moneys are placed in a qualified public depository

11  unless the moneys are exempt under the laws of this state.

12         (b)  Each depositor, asserting that moneys meet the

13  definition of a public deposit provided in s. 280.02 and are

14  not exempt under the laws of this state, is responsible for

15  any research or defense required to support such assertion.

16         (2)(1)  Beginning July 1, 1998, each public depositor

17  shall take the following actions for each public deposit

18  account: must

19         (a)  Ensure that the name of the public depositor is on

20  the account or certificate or other form provided to the

21  public depositor by the qualified public depository in a

22  manner sufficient to identify that the account is a Florida

23  public deposit.

24         (b)  Execute a form prescribed by the Treasurer for

25  identification of each public deposit account and obtain

26  acknowledgment of receipt on the form from the qualified

27  public depository at the time of opening the account.  Such

28  public deposit identification and acknowledgment form shall be

29  replaced with a current form as required in subsection (3).  A

30  public deposit account existing before July 1, 1998, must have

31  a form completed before September 30, 1998.


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                                       CS/HB 823, Second Engrossed



  1         (c)  Maintain the current public deposit identification

  2  and acknowledgment form as a valuable record.  Such form is

  3  mandatory for filing a claim with the Treasurer upon default

  4  or insolvency of a qualified public depository.

  5         (3)  Each public depositor shall review the Treasurer's

  6  published list of qualified public depositories and ascertain

  7  the status of depositories used.  A public depositor shall,

  8  for status changes of depositories:

  9         (a)  Execute a replacement public deposit

10  identification and acknowledgment form, as described in

11  subsection (2), for each public deposit account when there is

12  a merger, acquisition, name change, or other event which

13  changes the account name, account number, or name of the

14  qualified public depository.

15         (b)  Move and close public deposit accounts when an

16  institution is not included in the authorized list of

17  qualified public depositories or is shown as withdrawing.

18         (4)(2)  Whenever public deposits are Each public

19  depositor who has assets on deposit in a qualified public

20  depository that has been declared to be is in default or is

21  insolvent, each public depositor shall: must

22         (a)  Notify the Treasurer of that fact immediately by

23  telecommunication after receiving notice of the default or

24  insolvency from the receiver of the depository with subsequent

25  written confirmation and a copy of the notice.

26         (b)  Submit to the Treasurer for each public deposit,

27  within 30 days after the date of official notification from

28  the Treasurer, the following:

29         1.  A claim form and agreement, as prescribed by the

30  Treasurer, executed under oath, accompanied by proof of

31


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                                       CS/HB 823, Second Engrossed



  1  authority to execute the form on behalf of the public

  2  depositor.

  3         2.  A completed public deposit identification and

  4  acknowledgment form, as described in subsection (2).

  5         3.  Evidence of the insurance afforded the deposit

  6  pursuant to the Federal Deposit Insurance Act.

  7         (5)(3)  Each public depositor shall confirm annually

  8  that public deposit information as of the close of business on

  9  September 30 has been provided by each qualified public

10  depository and is in agreement with public depositor records.

11  Such confirmation shall include the federal employer

12  identification number of the qualified public depository, the

13  name on the deposit account record, the federal employer

14  identification number on the deposit account record, and the

15  account number, account type, and actual account balance on

16  deposit. Public depositors shall request such confirmation

17  information from qualified public depositories on or before

18  the fifth calendar day of October and shall allow until

19  October 31 to receive such information.  Any discrepancy found

20  in the confirmation process shall be reconciled before

21  November 30.,

22         (6)  Each public depositor shall submit, not later than

23  November 30 15, an annual report to each public depositor

24  shall notify the Treasurer which shall include:

25         (a)  The of its official name, mailing address, and

26  federal employer identification number of the public

27  depositor, and account balances at the close of business on

28  September 30.

29         (b)  Verification that confirmation of public deposit

30  information as of September 30, as described in subsection

31  (5), has been completed.


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                                       CS/HB 823, Second Engrossed



  1         (c)  Public deposit information in a report format

  2  prescribed by the Treasurer.  The manner of required filing

  3  may be as a signed writing or electronic data transmission, at

  4  the discretion of the Treasurer.

  5         (d)  Confirmation that a current public deposit

  6  identification and acknowledgment form, as described in

  7  subsection (2), has been completed for each public deposit

  8  account and is in the possession of the public depositor. This

  9  notification shall include the name of the institutions with

10  whom accounts are established and, for each institution

11  listed, the account name, number, balance, type, and federal

12  employer identification number.

13         (7)(4)  Notices relating to the public deposits program

14  shall be mailed to public depositors and governmental units

15  from a list developed annually from:

16         (a)  Public depositors that filed an annual report

17  under subsection (6).

18         (b)  Governmental units existing on September 30 that

19  had no public deposits but filed an annual report stating "no

20  public deposits".

21         (c)  Governmental units A public entity established

22  during the year that filed an annual report as a new

23  governmental unit or otherwise furnished in writing to the

24  Treasurer shall furnish its official name, address, and

25  federal employer identification number to the Treasurer prior

26  to making any public deposit.

27         (8)(5)  If a public depositor does not comply with this

28  section on each public deposit account, the protection from

29  loss provided in s. 280.18 is not effective as to that public

30  deposit account depositor.

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                                       CS/HB 823, Second Engrossed



  1         Section 19.  Section 280.18, Florida Statutes, is

  2  amended to read:

  3         280.18  Protection Liability of public depositors;

  4  liability of and the state.--

  5         (1)  When public deposits are made in accordance with

  6  this chapter, there shall be protection from loss to public

  7  depositors, as defined in s. 280.02, no public depositor shall

  8  be liable for any loss thereof resulting from the default or

  9  insolvency of any qualified public depository in the absence

10  of negligence, malfeasance, misfeasance, or nonfeasance on the

11  part of the public depositor depositor's part or on the part

12  of his or her agents or employees.

13         (2)  The liability of the state, the Treasurer, or any

14  state agency, or any employee or agent of the state, the

15  Treasurer, or a state agency, for any action taken in the

16  performance of their powers and duties under this chapter

17  shall be limited to that as a public depositor. Under no

18  circumstance is the state, or any state agency or subdivision

19  of the state, liable for all or any portion of any loss

20  resulting from the default or insolvency of a qualified public

21  depository.

22         Section 20.  Subsection (2) of section 331.309, Florida

23  Statutes, is amended to read:

24         331.309  Treasurer; depositories; fiscal agent.--

25         (2)  The board is authorized to select as depositories

26  in which the funds of the board and of the authority shall be

27  deposited any qualified public depository as defined in s.

28  280.02 banking corporation or other financial institution

29  organized under the laws of the state, or under the laws of

30  the United States and doing business in the state, upon such

31  terms and conditions as to the payment of interest by such


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                                       CS/HB 823, Second Engrossed



  1  depository upon the funds so deposited as the board may deem

  2  just and reasonable. The funds of the authority may be kept in

  3  or removed from the State Treasury upon written notification

  4  from the chair of the board to the state Comptroller.

  5         Section 21.  This act shall take effect July 1 of the

  6  year in which enacted.

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