Florida Senate - 2009 COMMITTEE AMENDMENT Bill No. SB 538 Barcode 410350 LEGISLATIVE ACTION Senate . House Comm: FAV . 03/10/2009 . . . . ————————————————————————————————————————————————————————————————— ————————————————————————————————————————————————————————————————— The Committee on Community Affairs (Deutch) recommended the following: 1 Senate Amendment (with title amendment) 2 3 Delete lines 631 - 709 4 and insert: 5 Section 10. Subsection (7) is added to section 185.06, 6 Florida Statutes, and subsection (1) of that section is amended 7 to read: 8 185.06 General powers and duties of board of trustees.—For 9 any municipality, chapter plan, local law municipality, or local 10 law plan under this chapter: 11 (1) The board of trustees, subject to the fiduciary 12 standards in ss. 112.656, 112.661, and 518.11 and the Code of 13 Ethics in ss. 112.311-112.3187, may: 14 (a) Invest and reinvest the assets of the retirement trust 15 fund in annuity and life insurance contracts of life insurance 16 companies in amounts sufficient to provide, in whole or in part, 17 the benefits to which all of the participants in the municipal 18 police officers’ retirement trust fund shall be entitled under 19 the provisions of this chapter, and pay the initial and 20 subsequent premiums thereon. 21 (b) Invest and reinvest the assets of the retirement trust 22 fund in: 23 1. Time or savings accounts of a national bank, a state 24 bank insured by the Bank Insurance Fund, or a savings and loan 25 association insured by the Savings Association Insurance Fund 26 which is administered by the Federal Deposit Insurance 27 Corporation or a state or federal chartered credit union whose 28 share accounts are insured by the National Credit Union Share 29 Insurance Fund. 30 2. Obligations of the United States or obligations 31 guaranteed as to principal and interest by the United States. 32 3. Bonds issued by the State of Israel. 33 4. Bonds, stocks, or other evidences of indebtedness issued 34 or guaranteed by a corporation organized under the laws of the 35 United States, any state or organized territory of the United 36 States, or the District of Columbia, provided: 37 a. The corporation is listed on any one or more of the 38 recognized national stock exchanges or on the National Market 39 System of the NASDAQ Stock Market and, in the case of bonds 40 only, holds a rating in one of the three highest classifications 41 by a major rating service; and 42 b. The board of trustees shall not invest more than 5 43 percent of its assets in the common stock or capital stock of 44 any one issuing company, nor shall the aggregate investment in 45 any one issuing company exceed 5 percent of the outstanding 46 capital stock of the company or the aggregate of its investments 47 under this subparagraph at cost exceed 50 percent of the fund’s 48 assets. 49 50 This paragraph shall apply to all boards of trustees and 51 participants. However, in the event that a municipality has a 52 duly enacted pension plan pursuant to, and in compliance with, 53 s. 185.35 and the trustees thereof desire to vary the investment 54 procedures herein, the trustees of such plan shall request a 55 variance of the investment procedures as outlined herein only 56 through a municipal ordinance or special act of the Legislature; 57 where a special act, or a municipality by ordinance adopted 58 prior to July 1, 1998, permits a greater than 50-percent equity 59 investment, such municipality shall not be required to comply 60 with the aggregate equity investment provisions of this 61 paragraph. Notwithstanding any other provision of law to the 62 contrary, nothing in this section may be construed to take away 63 any preexisting legal authority to make equity investments that 64 exceed the requirements of this paragraph. Notwithstanding any 65 law to the contrary, the board of trustees may invest up to 25 6610percent of plan assets in foreign securities on a market 67 value basis. The investment cap on foreign securities may not be 68 revised, amended, repealed, or increased except as provided by 69 general law. 70 (c) Issue drafts upon the municipal police officers’ 71 retirement trust fund pursuant to this act and rules and 72 regulations prescribed by the board of trustees. All such drafts 73 shall be consecutively numbered, be signed by the chair and 74 secretary or by two individuals designated by the board who are 75 subject to the same fiduciary standards as required for the 76 board of trustees under this subsection, and state upon their 77 faces the purposes for which the drafts are drawn. The city 78 treasurer or other depository shall retain such drafts when 79 paid, as permanent vouchers for disbursements made, and no money 80 shall otherwise be drawn from the fund. 81 (d) Finally decide all claims to relief under the board’s 82 rules and regulations and pursuant to the provisions of this 83 act. 84 (e) Convert into cash any securities of the fund. 85 (f) Keep a complete record of all receipts and disbursements and 86 of the board’s acts and proceedings. 87 (7) Notwithstanding the provisions of paragraph (1)(b) and 88 as provided in s. 15.473, the board of trustees must identify 89 and publicly report any direct or indirect holdings it may have 90 in any scrutinized company, as defined in that section, and 91 proceed to sell, redeem, divest, or withdraw all publicly traded 92 securities it may have in such company beginning January 1, 93 2010. The divestiture of any such security must be completed by 94 March 1, 2010. The board and its named officers or investment 95 advisors may not be deemed to have breached their fiduciary duty 96 in any action taken to dispose of any such security, and the 97 board shall have satisfactorily discharged the fiduciary duties 98 of loyalty, prudence, and sole and exclusive benefit to the 99 participants of the pension fund and their beneficiaries if the 100 actions it takes are consistent with the duties imposed by s. 101 215.473, and the manner of the disposition, if any, is 102 reasonable as to the means chosen. For the purposes of effecting 103 compliance with that section, the pension fund shall designate 104 terror-free plans that allocate their funds among securities not 105 subject to divestiture. No person may bring any civil, criminal, 106 or administrative action against the board of trustees or any 107 employee, officer, director, or advisor of such pension fund 108 based upon the divestiture of any security pursuant to this 109 paragraph. 110 111 ================= T I T L E A M E N D M E N T ================ 112 And the title is amended as follows: 113 Delete lines 63 - 65 114 and insert: 115 providing that the investment cap on foreign securities may only 116 be amended, repealed, or increased by an act of the Legislature; 117 authorizing certain individuals to sign drafts issued upon the 118 municipal police officers’ retirement trust fund; requiring the 119 board of trustees to identify and divest of any scrutinized 120 companies by a date certain; amending s. 185.08, F.S.; 121 authorizing certain