Senate Bill 1992c1
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Florida Senate - 1999 CS for SB 1992
By the Committee on Comprehensive Planning, Local and Military
Affairs; and Senator Rossin
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1 A bill to be entitled
2 An act relating to investment of public funds;
3 amending s. 218.415, F.S.; prescribing
4 guidelines for investments by units of local
5 government; providing for authorized
6 investments; prohibiting investments not
7 authorized by local investment policy;
8 providing for continuing education for local
9 officials responsible for making investments;
10 prescribing a list of authorized investments;
11 providing alternative investment guidelines for
12 entities not adopting a written investment
13 policy; providing for safeguarding securities;
14 authorizing the sale of investments; providing
15 for investment of funds when made pursuant to
16 agreement or contract; providing for preemption
17 of state requirements; prescribing duties of
18 accountants and the Auditor General; amending
19 s. 112.625, F.S.; revising definitions and
20 defining terms; creating s. 112.661, F.S.;
21 prescribing guidelines for investments by
22 retirement systems or plans; providing for
23 authorized investments; prohibiting investments
24 not authorized by investment policy; providing
25 for continuing education for officials
26 responsible for making investments; providing
27 for the filing of the investment policy with
28 the Division of Retirement, the plan's sponsor,
29 and the consulting actuary; providing for the
30 valuation of illiquid investments; amending s.
31 28.33, F.S.; prescribing requirements for
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1 investment of county funds; amending s.
2 159.416, F.S.; prescribing requirements for
3 investment of bond proceeds and moneys held for
4 payment of debt service on bonds; amending s.
5 219.075, F.S.; prescribing requirements for
6 investment of surplus funds by county officers;
7 amending s. 230.23, F.S.; prescribing
8 requirements for investment of school funds not
9 needed for immediate expenditure; amending s.
10 236.24, F.S.; deleting provisions relating to
11 authorized investment of district school fund
12 moneys; repealing s. 237.161(5), F.S., relating
13 to investment of cash assets by school boards;
14 repealing s. 230.23(10)(k), F.S., relating to
15 investment policies of district school boards;
16 repealing s. 125.31, F.S., relating to
17 investment of surplus public funds by counties;
18 repealing s. 166.261, F.S., relating to
19 investments by municipalities; repealing s.
20 218.345, F.S., relating to investments by
21 special districts; providing an effective date.
22
23 Be It Enacted by the Legislature of the State of Florida:
24
25 Section 1. Section 218.415, Florida Statutes, is
26 amended to read:
27 218.415 Local government investment
28 policies.--Investment activity by a unit of local government
29 must be consistent with a written investment plan adopted by
30 the governing body, or in the absence of the existence of a
31 governing body, the respective principal officer of the unit
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1 of local government and maintained by the unit of local
2 government or, in the alternative, such activity must be
3 conducted in accordance with the investment guidelines set
4 forth in subsection (17) (15). Any such unit of local
5 government shall have an investment policy for any public
6 funds in excess of the amounts needed to meet current expenses
7 as provided in subsections (1)-(16) (1)-(14), or shall meet
8 the alternative investment guidelines contained in subsection
9 (17) (15). Such policies shall be structured to place the
10 highest priority on the safety of principal and liquidity of
11 funds. The optimization of investment returns shall be
12 secondary to the requirements for safety and liquidity. Each
13 unit of local government shall adopt policies that are
14 commensurate with the nature and size of the public funds
15 within their custody.
16 (1) SCOPE.--The investment policy shall apply to funds
17 under the control of the unit of local government in excess of
18 those required to meet current expenses. The investment policy
19 shall not apply to pension funds, including those funds in
20 chapters 175 and 185; trust funds; or funds related to the
21 issuance of debt where there are other existing policies or
22 indentures in effect for such funds.
23 (2) INVESTMENT OBJECTIVES.--The investment policy
24 shall describe the investment objectives of the unit of local
25 government. Investment objectives shall include safety of
26 capital, liquidity of funds, and investment income, in that
27 order.
28 (3) PERFORMANCE MEASUREMENT.--The investment policy
29 unit of local government shall specify develop performance
30 measures as are appropriate for the nature and size of the
31 public funds within its custody.
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1 (4) PRUDENCE AND ETHICAL STANDARDS.--The investment
2 policy shall describe the level of prudence and ethical
3 standards to be followed by the unit of local government in
4 carrying out its investment activities with respect to funds
5 described in this section. The unit of local government shall
6 adopt the Prudent Person Rule, which states that: "Investments
7 should be made with judgment and care, under circumstances
8 then prevailing, which persons of prudence, discretion, and
9 intelligence exercise in the management of their own affairs,
10 not for speculation, but for investment, considering the
11 probable safety of their capital as well as the probable
12 income to be derived from the investment."
13 (5) LISTING OF AUTHORIZED INVESTMENTS.--The investment
14 policy shall list investments authorized by the governing body
15 of the unit of local government, subject to the provisions of
16 subsection (16) investments. Investments not listed in the
17 investment policy are prohibited. If the policy authorizes
18 investments in derivative products, such policy must require
19 that must be specifically authorized in the investment plan
20 and may be considered only if the unit of local government's
21 officials responsible for making investment decisions have
22 chief financial officer has developed sufficient understanding
23 of the derivative products and have has the expertise to
24 manage them. For purposes of this subsection, a "derivative"
25 is defined as a financial instrument the value of which
26 depends on, or is derived from, the value of one or more
27 underlying assets or index or asset values. If the policy
28 authorizes investments in The use of reverse repurchase
29 agreements or other forms of leverage, the policy must limit
30 the investments shall be prohibited or limited by investment
31 policy to transactions in which where the proceeds are
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1 intended to provide liquidity and for which the unit of local
2 government has sufficient resources and expertise.
3 (6) MATURITY AND LIQUIDITY REQUIREMENTS.--The
4 investment policy shall require that the investment portfolio
5 is structured in such manner as to provide sufficient
6 liquidity to pay obligations as they come due. To that end,
7 the investment policy should direct that, to the extent
8 possible, an attempt will be made to match investment
9 maturities with known cash needs and anticipated cash-flow
10 requirements.
11 (7) PORTFOLIO COMPOSITION.--The investment policy
12 shall establish guidelines for investments and limits on
13 security issues, issuers, and maturities. Such guidelines
14 shall be commensurate with the nature and size of the public
15 funds within the custody of the unit of local government.
16 (8) RISK AND DIVERSIFICATION.--The investment policy
17 shall provide for appropriate diversification of the
18 investment portfolio. Investments held should be diversified
19 to the extent practicable to control the risk of loss
20 resulting from overconcentration of assets in a specific
21 maturity, issuer, instrument, dealer, or bank through which
22 financial instruments are bought and sold. Diversification
23 strategies within the established guidelines shall be reviewed
24 and revised periodically, as deemed necessary by the
25 appropriate management staff.
26 (9) AUTHORIZED INVESTMENT INSTITUTIONS AND
27 DEALERS.--The investment policy should specify the authorized
28 securities dealers, issuers, and banks from whom the unit of
29 local government may purchase securities.
30 (10) THIRD-PARTY CUSTODIAL AGREEMENTS.--The investment
31 policy shall provide appropriate arrangements for the holding
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1 of assets of the unit of local government. Securities should
2 be held with a third party; and all securities purchased by,
3 and all collateral obtained by, the unit of local government
4 should be properly designated as an asset of the unit of local
5 government. No withdrawal of securities, in whole or in part,
6 shall be made from safekeeping, except by an authorized staff
7 member of the unit of local government. Securities
8 transactions between a broker-dealer and the custodian
9 involving purchase or sale of securities by transfer of money
10 or securities must be made on a "delivery vs. payment" basis,
11 if applicable, to ensure that the custodian will have the
12 security or money, as appropriate, in hand at the conclusion
13 of the transaction.
14 (11) MASTER REPURCHASE AGREEMENT.--The investment
15 policy unit of local government shall require all approved
16 institutions and dealers transacting repurchase agreements to
17 execute and perform as stated in the Master Repurchase
18 Agreement. All repurchase agreement transactions shall adhere
19 to the requirements of the Master Repurchase Agreement.
20 (12) BID REQUIREMENT.--The investment policy shall
21 require that the unit of local government's staff determine
22 the approximate maturity date based on cash-flow needs and
23 market conditions, analyze and select one or more optimal
24 types of investment, and competitively bid the security in
25 question when feasible and appropriate. Except as otherwise
26 required by law, the most economically advantageous bid must
27 be selected After the unit of local government staff has
28 determined the approximate maturity date based on cash-flow
29 needs and market conditions and has analyzed and selected one
30 or more optimal types of investment, the security in question
31 shall, when feasible and appropriate, be competitively bid.
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1 (13) INTERNAL CONTROLS.--The investment policy shall
2 provide for a system of internal controls and operational
3 procedures. The unit of local government's officials
4 responsible for making investment decisions chief financial
5 officer shall, by January 1, 1996, establish a system of
6 internal controls which shall be in writing and made a part of
7 the governmental entity's operational procedures. The
8 investment policy shall provide for review of such controls by
9 independent auditors as part of any financial audit
10 periodically required of the unit of local government. The
11 internal controls should be designed to prevent losses of
12 funds which might arise from fraud, employee error,
13 misrepresentation by third parties, or imprudent actions by
14 employees of the unit of local government.
15 (14) CONTINUING EDUCATION.--The investment policy
16 shall provide for the continuing education of the unit of
17 local government's officials responsible for making investment
18 decisions. Such officials must annually complete 8 hours of
19 continuing education in subjects or courses of study related
20 to investment practices and products.
21 (15)(14) REPORTING.--The investment policy shall
22 provide for appropriate annual or more frequent reporting of
23 investment activities. To that end, the governmental entity's
24 officials responsible for making investment decisions chief
25 financial officer shall prepare periodic reports for
26 submission to the legislative and governing body of the unit
27 of local government, which shall include securities in the
28 portfolio by class or type, book value, income earned, and
29 market value as of the report date. Such reports shall be
30 available to the public.
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1 (16) AUTHORIZED INVESTMENTS; WRITTEN INVESTMENT
2 POLICIES.--Those units of local government electing to adopt a
3 written investment policy as provided in subsections (1)-(15)
4 may by resolution invest and reinvest any surplus public funds
5 in their control or possession in:
6 (a) The Local Government Surplus Funds Trust Fund or
7 any intergovernmental investment pool authorized pursuant to
8 the Florida Interlocal Cooperation Act as provided in s.
9 163.01.
10 (b) Securities and Exchange Commission registered
11 money market funds with the highest credit quality rating from
12 a nationally recognized rating agency.
13 (c) Savings accounts in, or certificates of deposit
14 of, any bank, savings bank, or savings and loan association
15 that is incorporated under the laws of this state or organized
16 under the laws of the United States, and that is doing
17 business in and is situated in this state, and whose accounts
18 are insured by the Federal Government or an agency thereof,
19 provided that such savings accounts and certificates of
20 deposit are secured in the manner prescribed in chapter 280.
21 (d) Direct obligations of the United States Treasury.
22 (e) Federal agencies and instrumentalities.
23 (f) Securities of, or other interests in, any open-end
24 or closed-end management-type investment company or investment
25 trust registered under the Investment Company Act of 1940, 15
26 U.S.C. ss. 80a-1 et seq., as amended from time to time,
27 provided that the portfolio of such investment company or
28 investment trust is limited to obligations of the United
29 States Government or any agency or instrumentality thereof and
30 to repurchase agreements fully collateralized by such United
31 States Government obligations, and provided that such
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1 investment company or investment trust takes delivery of such
2 collateral either directly or through an authorized custodian.
3 (g) Other investments authorized by law or by
4 ordinance.
5 (17)(15) AUTHORIZED INVESTMENTS; NO WRITTEN INVESTMENT
6 POLICY ALTERNATIVE INVESTMENT GUIDELINES.--Those units of
7 local government electing not to adopt a written investment
8 policy in accordance with investment policies developed as
9 provided in subsections (1)-(15) may invest or reinvest any
10 surplus public funds in their control or possession in: In
11 addition to or in lieu of establishing a written investment
12 plan in accordance with investment policies developed pursuant
13 to subsections (1)-(14), a unit of local government electing
14 to conduct investment activity outside the framework provided
15 by this part shall do so under the guidelines set forth in
16 this section. The unit of local government may invest in the
17 following instruments and may divest itself of such
18 investments, at prevailing market prices or rates, subject to
19 the limitations of this section:
20 (a) The Local Government Surplus Funds Trust Fund, or
21 any intergovernmental investment pool authorized pursuant to
22 the Florida Interlocal Cooperation Act, as provided in s.
23 163.01.
24 (b) Securities and Exchange Commission registered
25 money market funds with the highest credit quality rating from
26 a nationally recognized rating agency.
27 (c) Savings accounts, or certificates of deposit of,
28 any bank, savings bank, or savings and loan association that
29 is incorporated under the laws of this state or organized
30 under the laws of the United States, that is doing business
31 and is situated in this state, and whose accounts are insured
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1 by the Federal Government or an agency thereof, provided that
2 such savings accounts and certificates of deposit are secured
3 in the manner prescribed in chapter 280 in state-certified
4 qualified public depositories, as defined in s. 280.02.
5 (d) Certificates of deposit in state-certified
6 qualified public depositories, as defined in s. 280.02.
7 (d)(e) Direct obligations of the U.S. Treasury.
8 (f) Federal agencies and instrumentalities.
9
10 The securities listed in paragraphs (c) and, (d), (e), and (f)
11 shall be invested to provide sufficient liquidity to pay
12 obligations as they come due match investment maturities with
13 current expenses.
14 (18) SECURITIES; DISPOSITION.--
15 (a) Every security purchased under this section on
16 behalf of the governing body of a unit of local government
17 must be properly earmarked and:
18 1. If registered with the issuer or its agents, must
19 be immediately placed for safekeeping in a location that
20 protects the governing body's interest in the security;
21 2. If in book entry form, must be held for the credit
22 of the governing body by a depository chartered by the Federal
23 Government, the state, or any other state or territory of the
24 United States which has a branch or principal place of
25 business in this state as defined in s. 658.12, or by a
26 national association organized and existing under the laws of
27 the United States of America which is authorized to accept and
28 execute trusts and which is doing business in this state, and
29 must be kept by the depository in an account separate and
30 apart from the assets of the financial institution; or
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1 3. If physically issued to the holder but not
2 registered with the issuer or its agents, must be immediately
3 placed for safekeeping in a secured vault in a financial
4 institution in this state which maintains adequate secured
5 vault insurance.
6 (b) The unit of local government's governing body may
7 also receive bank trust receipts in return for investment of
8 surplus funds in securities. Any trust receipts received must
9 enumerate the various securities held, together with the
10 specific number of each security held. The actual securities
11 on which the trust receipts are issued may be held by any bank
12 depository chartered by the Federal Government, this state, or
13 any other state or territory of the United States, which has a
14 branch or principal place of business in this state as defined
15 in s. 658.12, or by a national association organized and
16 existing under the laws of the United States of America which
17 is authorized to accept and execute trusts and which is doing
18 business in this state as defined by s. 658.12.
19 (19) SALE OF SECURITIES.--When the invested funds are
20 needed in whole or in part for the purposes originally
21 intended, the unit of local government's governing body may
22 sell such investments at the then-prevailing market price and
23 place the proceeds into the proper account or fund of the unit
24 of local government.
25 (20) PREEXISTING CONTRACT.--Any public funds subject
26 to a contract or agreement existing on October 1, 1999, may
27 not be invested contrary to such contract or agreement.
28 (21) PREEMPTION.--Any word, sentence, phrase, or
29 provision of any special act, municipal charter, or other law
30 which prohibits or restricts a local governmental entity from
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1 complying with this section or any rules adopted under this
2 section is void to the extent of the conflict.
3 (22) AUDITS.--Certified public accountants conducting
4 audits of units of local government pursuant to s. 11.45 shall
5 report, as part of the audit, whether or not the unit of local
6 government has complied with s. 218.415.
7 (23) AUDITOR GENERAL; REVIEW.--During the Auditor
8 General's review of audit reports of units of local
9 government, the Auditor General shall notify the Joint
10 Legislative Auditing Committee of any unit of local government
11 not in compliance with this section. Following notification of
12 failure by a local government to comply with s. 218.415, a
13 hearing may be scheduled by the committee. If a hearing is
14 scheduled, the committee shall determine which units of local
15 government will be subjected to further state action. If the
16 committee finds that one or more units of local government
17 should be subjected to further state action, the committee
18 shall:
19 (a) In the case of a county, municipality, or district
20 school board, request the Department of Revenue and the
21 Department of Banking and Finance to withhold any funds
22 payable to such entity until the entity has complied with this
23 section.
24 (b) In the case of a special district, notify the
25 Department of Community Affairs that the special district has
26 failed to comply with this section. Upon receipt of
27 notification, the Department of Community Affairs shall
28 proceed pursuant to the provisions specified in ss. 189.421
29 and 189.422.
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1 Section 2. Subsections (7) and (8) of section 112.625,
2 Florida Statutes, are amended, and subsection (9) is added to
3 that section, to read:
4 112.625 Definitions.--As used in this act:
5 (7) "Statement value" means the value of assets in
6 accordance with s. 302(c)(2) of the Employee Retirement Income
7 Security Act of 1974 and as permitted under regulations
8 prescribed by the Secretary of the Treasury. Assets for which
9 a fair market value is not provided shall be excluded from the
10 assets used in the determination of annual funding cost.
11 (8) "Named fiduciary," "board," or "board of trustees"
12 means the person or persons so designated by the terms of the
13 instrument or instruments, ordinance, or statute under which
14 the plan is operated.
15 (9) "Plan sponsor" means the local governmental entity
16 that has established or that may establish a local retirement
17 system or plan.
18 Section 3. Section 112.661, Florida Statutes, is
19 created to read:
20 112.661 Investment policies.--Investment of the assets
21 of any retirement system or plan must be consistent with a
22 written investment policy adopted by the board. Such policies
23 shall be structured to maximize the financial return to the
24 retirement system or plan consistent with the risks incumbent
25 in each investment and shall be structured to establish and
26 maintain an appropriate diversification of the retirement
27 system or plan's assets.
28 (1) SCOPE.--The investment policy shall apply to funds
29 under the control of the board.
30 (2) INVESTMENT OBJECTIVES.--The investment policy
31 shall describe the investment objectives of the board.
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1 (3) PERFORMANCE MEASUREMENT.--The investment policy
2 shall specify performance measures as are appropriate for the
3 nature and size of the assets within the board's custody.
4 (4) INVESTMENT AND FIDUCIARY STANDARDS.--The
5 investment policy shall describe the level of prudence and
6 ethical standards to be followed by the board in carrying out
7 its investment activities with respect to funds described in
8 this section. The board in performing its investment duties
9 shall comply with the fiduciary standards set forth in the
10 Employee Retirement Income Security Act of 1974 at 29 U.S.C.
11 s. 1104(a)(1)(A) through (C). In case of conflict with other
12 provisions of law authorizing investments, the investment and
13 fiduciary standards set forth in this section shall prevail.
14 (5) AUTHORIZED INVESTMENTS.--
15 (a) The investment policy shall list investments
16 authorized by the board. Investments not listed in the
17 investment policy are prohibited. Unless otherwise authorized
18 by law or ordinance, the investment of the assets of any
19 retirement system or plan covered by this part shall be
20 subject to the limitations and conditions in s. 215.47(1),
21 (2), (3), (4), (5), (6), (7), (8), (10), and (16).
22 (b) If a retirement system or plan has investments
23 that, on October 1, 1999, either exceed the applicable limit
24 or do not satisfy the applicable investment standard, such
25 excess or investment not in compliance with the policy may be
26 continued until such time as it is economically feasible to
27 dispose of such investment. However, no additional investment
28 may be made in the investment category which exceeds the
29 applicable limit, unless authorized by law or ordinance.
30 (6) MATURITY AND LIQUIDITY REQUIREMENTS.--The
31 investment policy shall require that the investment portfolio
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1 is structured in such manner as to provide sufficient
2 liquidity to pay obligations as they come due. To that end,
3 the investment policy should direct that, to the extent
4 possible, an attempt will be made to match investment
5 maturities with known cash needs and anticipated cash-flow
6 requirements.
7 (7) PORTFOLIO COMPOSITION.--The investment policy
8 shall establish guidelines for investments and limits on
9 security issues, issuers, and maturities. Such guidelines
10 shall be commensurate with the nature and size of the funds
11 within the custody of the board.
12 (8) RISK AND DIVERSIFICATION.--The investment policy
13 shall provide for appropriate diversification of the
14 investment portfolio. Investments held should be diversified
15 to the extent practicable to control the risk of loss
16 resulting from overconcentration of assets in a specific
17 maturity, issuer, instrument, dealer, or bank through which
18 financial instruments are bought and sold. Diversification
19 strategies within the established guidelines shall be reviewed
20 and revised periodically, as deemed necessary by the board.
21 (9) EXPECTED ANNUAL RATE OF RETURN.--The investment
22 policy shall require that, for each actuarial valuation, the
23 board determine the total expected annual rate of return for
24 the current year, for each of the next several years, and for
25 the long term thereafter. This determination must be filed
26 promptly with the Division of Retirement and with the plan's
27 sponsor and consulting actuary.
28 (10) THIRD-PARTY CUSTODIAL AGREEMENTS.--The investment
29 policy shall provide appropriate arrangements for the holding
30 of assets of the board. Securities should be held with a third
31 party, and all securities purchased by, and all collateral
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1 obtained by, the board should be properly designated as an
2 asset of the board. No withdrawal of securities, in whole or
3 in part, shall be made from safekeeping except by an
4 authorized member of the board or the board's designee.
5 Securities transactions between a broker-dealer and the
6 custodian involving purchase or sale of securities by transfer
7 of money or securities must be made on a "delivery vs.
8 payment" basis, if applicable, to ensure that the custodian
9 will have the security or money, as appropriate, in hand at
10 the conclusion of the transaction.
11 (11) MASTER REPURCHASE AGREEMENT.--The investment
12 policy shall require all approved institutions and dealers
13 transacting repurchase agreements to execute and perform as
14 stated in the Master Repurchase Agreement. All repurchase
15 agreement transactions shall adhere to the requirements of the
16 Master Repurchase Agreement.
17 (12) BID REQUIREMENT.--The investment policy shall
18 provide that the board determine the approximate maturity date
19 based on cash-flow needs and market conditions, analyze and
20 select one or more optimal types of investment, and
21 competitively bid the security in question when feasible and
22 appropriate. Except as otherwise required by law, the most
23 economically advantageous bid must be selected.
24 (13) INTERNAL CONTROLS.--The investment policy shall
25 provide for a system of internal controls and operational
26 procedures. The board shall establish a system of internal
27 controls which shall be in writing and made a part of the
28 board's operational procedures. The policy shall provide for
29 review of such controls by independent certified public
30 accountants as part of any financial audit periodically
31 required of the board's unit of local government. The internal
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1 controls should be designed to prevent losses of funds which
2 might arise from fraud, error, misrepresentation by third
3 parties, or imprudent actions by the board or employees of the
4 unit of local government.
5 (14) CONTINUING EDUCATION.--The investment policy
6 shall provide for the continuing education of the board
7 members in matters relating to investments and the board's
8 responsibilities.
9 (15) REPORTING.--The investment policy shall provide
10 for appropriate annual or more frequent reporting of
11 investment activities. To that end, the board shall prepare
12 periodic reports for submission to the governing body of the
13 unit of local government which shall include investments in
14 the portfolio by class or type, book value, income earned, and
15 market value as of the report date. Such reports shall be
16 available to the public.
17 (16) FILING OF INVESTMENT POLICY.--Upon adoption by
18 the board, the investment policy shall be promptly filed with
19 the Division of Retirement and the plan's sponsor and
20 consulting actuary. The effective date of the investment
21 policy, and any amendment thereto, shall be the 31st calendar
22 day following the filing date with the plan sponsor.
23 (17) VALUATION OF ILLIQUID INVESTMENTS.--The
24 investment policy shall provide for the valuation of illiquid
25 investments for which a generally recognized market is not
26 available or for which there is no consistent or generally
27 accepted pricing mechanism. If those investments are utilized,
28 the investment policy must include the criteria set forth in
29 s. 215.47(6), except that an Investment Advisory Council is
30 not required. The investment policy shall require that, for
31 each actuarial valuation, the board must verify the
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1 determination of the fair-market value for those investments
2 and ascertain that the determination complies with all
3 applicable state and federal requirements. The investment
4 policy shall require that the board disclose to the Division
5 of Retirement and the plan's sponsor each such investment for
6 which the fair-market value is not provided.
7 Section 4. Section 28.33, Florida Statutes, is amended
8 to read:
9 28.33 Investment of county funds by the clerk of the
10 circuit court.--The clerk of the circuit court in each county
11 shall invest county funds in excess of those required to meet
12 expenses as provided in s. 218.415. make an estimate of his or
13 her projected financial needs for the county and shall invest
14 any funds in designated depository banks in interest-bearing
15 certificates or in any direct obligations of the United States
16 in compliance with federal laws relating to receipt of and
17 withdrawal of deposits. All investments shall be open for bid
18 to all qualified depositories in the county. The clerk shall
19 select the highest and best bid for deposit. All bids
20 received by the clerk shall include, but not be limited to,
21 the interest rate to be earned and the total amount of dollar
22 return to be paid to the clerk. In the event of a like bid
23 between two or more banks, the moneys shall be divided and
24 deposited in each bank, so long as the total interest income
25 from the divided deposits will not be less than the total
26 interest income had the deposits not been divided. If at the
27 time of bid the dollar return on direct obligations of the
28 Federal Government is greater than the highest bank return,
29 then the clerk shall invest in the higher return security.
30 Moneys deposited in the registry of the court shall be
31 deposited in interest-bearing certificates at the discretion
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1 of the clerk, subject to the above guidelines. No clerk
2 investing such funds shall be liable for the loss of any
3 interest when circumstances require the withdrawal of funds
4 placed in a time deposit and needed for immediate payment of
5 county obligations. In any county where local banks refuse to
6 bid on securing such money on interest-bearing certificates,
7 the clerk may request and receive bids from banks in other
8 counties within the state and make such deposits to the
9 successful bidder. Except for interest earned on moneys
10 deposited in the registry of the court, all interest accruing
11 from moneys deposited shall be deemed income of the office of
12 the clerk of the circuit court investing such moneys and shall
13 be deposited in the same account as are other fees and
14 commissions of the clerk's office. The clerk may invest
15 moneys deposited in the registry of the court and shall retain
16 as income of the office of the clerk and as a reasonable
17 investment management fee 10 percent of the interest accruing
18 on those funds with the balance of such interest being
19 allocated in accordance with the interest of the depositors.
20 Each clerk shall, as soon as practicable after the end of the
21 fiscal year, report to the county governing authority the
22 total interest earned on all investments during the preceding
23 year.
24 Section 5. Subsection (9) of section 159.416, Florida
25 Statutes, is amended to read:
26 159.416 Pool financings.--
27 (9) Proceeds of bonds and moneys held for the payment
28 of debt service on bonds, including, but not limited to,
29 amounts held in the loan fund, any reserve fund, or debt
30 service fund for the bonds, may be invested in investments
31 authorized by or pursuant to an ordinance or resolution
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1 providing for the issuance of the bonds or any trust agreement
2 or trust indenture or other instrument approved by such
3 ordinance or resolution, including, but not limited to,
4 investments described in s. 218.415 ss. 28.33, 125.31,
5 166.261, 218.345, 219.075, and 236.24 and chapter 280. The
6 acquisition of any debt obligation or investment contract or
7 investment agreement of any bank, savings and loan
8 association, insurance company, registered broker-dealer, or
9 other financial institution shall be deemed to be an
10 investment and not a loan and therefore need not meet the
11 criteria of subsections (5), (6), and (7).
12 Section 6. Section 219.075, Florida Statutes, is
13 amended to read:
14 219.075 Investment of surplus funds by county
15 officers.--
16 (1)(a) Except when another procedure is prescribed by
17 law or by ordinance as to particular funds, a tax collector or
18 any other county officer having, receiving, or collecting any
19 money, either for his or her office or on behalf of and
20 subject to subsequent distribution to another officer of state
21 or local government, while such money is in excess of that
22 required to meet current expenses surplus to current needs of
23 his or her office or that is pending distribution, shall
24 invest such money, without limitation, as provided in s.
25 218.415. in:
26 1. The Local Government Surplus Funds Trust Fund, as
27 created by s. 218.405;
28 2. Bonds, notes, or other obligations of the United
29 States guaranteed by the United States or for which the credit
30 of the United States is pledged for the payment of the
31 principal and interest or dividends;
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1 3. Interest-bearing time deposits or savings accounts
2 in banks organized under the laws of this state, in national
3 banks organized under the laws of the United States and doing
4 business and situated in this state, in savings and loan
5 associations which are under state supervision, or in federal
6 savings and loan associations located in this state and
7 organized under federal law and federal supervision, provided
8 that any such deposits are secured by collateral as may be
9 prescribed by law; or
10 4. Securities of, or other interests in, any open-end
11 or closed-end management type investment company or investment
12 trust registered under the Investment Company Act of 1940, 15
13 U.S.C. ss. 80a-1 et seq., as amended from time to time,
14 provided the portfolio of such investment company or
15 investment trust is limited to obligations of the United
16 States Government or any agency or instrumentality thereof and
17 to repurchase agreements fully collateralized by such United
18 States Government obligations and provided such investment
19 company or investment trust takes delivery of such collateral
20 either directly or through an authorized custodian.
21 (b) These investments shall be planned so as not to
22 slow the normal distribution of the subject funds. The
23 investment earnings shall be reasonably apportioned and
24 allocated and shall be credited to the account of, and paid
25 to, the office or distributee, together with the principal on
26 which such earnings accrued.
27 (2) Except when another procedure is prescribed by
28 law, ordinance, or court order as to particular funds, the tax
29 collector shall, as soon as feasible after collection, deposit
30 in a bank designated as a depository of public funds, as
31 provided in s. 658.60, all taxes, fees, and other collections
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1 received by him or her and held prior to distribution to the
2 appropriate taxing authority. Immediately after such funds
3 have cleared and have been properly credited to the tax
4 collector's his or her account, the tax collector shall invest
5 such funds according to the provisions of s. 218.415 this
6 section. The earnings from such investments shall be
7 apportioned at least quarterly on a pro rata basis to the
8 appropriate taxing authorities. However, the tax collector
9 may deduct therefrom such reasonable amounts as are necessary
10 to provide for costs of administration of such investments and
11 deposits.
12 (3) The State Board of Administration may establish a
13 schedule and guidelines to be followed by tax collectors
14 making deposits and investments under the provisions of
15 subsection (2).
16 (4) The provisions of this section are subject to the
17 provisions of s. 218.415.
18 Section 7. Section 236.24, Florida Statutes, 1998
19 Supplement, is amended to read:
20 236.24 Sources of district school fund.--
21 (1) The district school fund shall consist of funds
22 derived from the district school tax levy; state
23 appropriations; appropriations by county commissioners; local,
24 state, and federal school food service funds; any and all
25 other sources for school purposes; national forest trust funds
26 and other federal sources; and gifts and other sources.
27 (2)(a) Unless otherwise authorized by law or by
28 ordinance, each school board shall, by resolution to be
29 adopted from time to time, invest and reinvest any surplus
30 public funds in its control or possession in:
31 1. The Local Government Surplus Funds Trust Fund;
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1 2. Negotiable direct obligations of, or obligations
2 the principal and interest of which are unconditionally
3 guaranteed by, the United States Government at the then
4 prevailing market price for such securities;
5 3. Interest-bearing time deposits or savings accounts
6 in qualified public depositories as defined in s. 280.02;
7 4. Obligations of the federal farm credit banks; the
8 Federal Home Loan Mortgage Corporation, including Federal Home
9 Loan Mortgage Corporation participation certificates; or the
10 Federal Home Loan Bank or its district banks or obligations
11 guaranteed by the Government National Mortgage Association;
12 5. Obligations of the Federal National Mortgage
13 Association, including Federal National Mortgage Association
14 participation certificates and mortgage pass-through
15 certificates guaranteed by the Federal National Mortgage
16 Association; or
17 6. Securities of, or other interests in, any open-end
18 or closed-end management type investment company or investment
19 trust registered under the Investment Company Act of 1940, 15
20 U.S.C. ss. 80a-1 et seq., as amended from time to time,
21 provided the portfolio of such investment company or
22 investment trust is limited to obligations of the United
23 States Government or any agency or instrumentality thereof and
24 to repurchase agreements fully collateralized by such United
25 States Government obligations, and provided such investment
26 company or investment trust takes delivery of such collateral
27 either directly or through an authorized custodian.
28 (b)1. Securities purchased by any such school board
29 under the authority of this law shall be delivered by the
30 seller to the school board or its appointed safekeeper. The
31 safekeeper shall be a qualified bank or trust company
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1 chartered to operate as such by the State of Florida, any
2 other state or territory of the United States, or the United
3 States Government, that has a branch or principal place of
4 business in this state as defined in s. 658.12. The safekeeper
5 shall issue documentation for each transaction, and a monthly
6 statement detailing all transactions for the period.
7 2. Securities physically delivered to the school board
8 shall be placed in a safe-deposit box in a bank or other
9 institution located within the county and duly licensed and
10 insured. Withdrawals from such safe-deposit box shall be only
11 by persons duly authorized by resolution of the school board.
12 3. The school board may also receive bank trust
13 receipts in return for investment of surplus funds in
14 securities. Any trust receipts received must enumerate the
15 various securities held together with the specific number of
16 each security held. The actual securities on which the trust
17 receipts are issued may be held by any bank depository
18 chartered by the United States Government, the State of
19 Florida, or any other state or territory of the United States,
20 that has a branch or principal place of business in this state
21 as defined in s. 658.12, or their designated agents.
22 (c) When the money invested in such securities is
23 needed in whole or in part for the purposes originally
24 intended, the school board is authorized to sell such security
25 or securities at the then prevailing market price and to pay
26 the proceeds of such sale into the proper account or fund of
27 the school board.
28 (d) For the purposes of this law, the term "surplus
29 funds" is defined as funds in any general or special account
30 or fund of the school board, held or controlled by the school
31 board, which funds are not reasonably contemplated to be
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1 needed for the purposes intended within a reasonable time from
2 the date of such investment.
3 (e) Any surplus public funds subject to a contract or
4 agreement on the date of this enactment shall not be invested
5 contrary to such contract or agreement.
6 (f) The provisions of this subsection are supplemental
7 to any and all other laws relating to the legal investments by
8 school boards.
9 (3) Investments made pursuant to this section may be
10 in book-entry form and may be under repurchase agreements.
11 (4) The provisions of this section are subject to the
12 provisions of s. 218.415.
13 Section 8. Subsection (5) of section 237.161, Florida
14 Statutes, is repealed.
15 Section 9. Paragraph (k) of subsection (10) of section
16 230.23, Florida Statutes, 1998 Supplement, is repealed.
17 Section 10. Section 125.31, Florida Statutes, as
18 amended by section 4 of chapter 98-409, Laws of Florida;
19 section 166.261, Florida Statutes; and section 218.345,
20 Florida Statutes, as amended by section 8 of chapter 98-409,
21 Laws of Florida, are repealed.
22 Section 11. This act shall take effect October 1,
23 1999.
24
25 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
26 Senate Bill 1992
27
28 Amends ch. 112, F.S., to require that the investment of
retirement plan assets be consistent with a written investment
29 policy. Specifies the contents of the investment policy,
including the requirement that certain fiduciary standards are
30 met. Requires that the investment policy be filed with the
Division of Retirement, the plan's sponsor and actuary.
31
25