CS for CS for SB 732                             First Engrossed
       
       
       
       
       
       
       
       
       2009732e1
       
    1                        A bill to be entitled                      
    2         An act relating to financial instruments; amending s.
    3         17.57, F.S.; requiring that the Chief Financial
    4         Officer and local governments deposit surplus funds in
    5         financial deposit instruments insured by the Federal
    6         Deposit Insurance Corporation rather than in
    7         certificates of deposit; amending s. 215.555, F.S.;
    8         revising the dates of an insurer’s contract year for
    9         purposes of calculating the insurer’s retention;
   10         revising reimbursement contract coverage payment
   11         provisions; extending the application of provisions
   12         relating to reimbursement contracts; amending s.
   13         218.415, F.S.; requiring that the Chief Financial
   14         Officer and local governments deposit surplus funds in
   15         financial deposit instruments insured by the Federal
   16         Deposit Insurance Corporation rather than in
   17         certificates of deposit; deleting a provision relating
   18         to concurrent deposits by a unit of local government
   19         and customers of other federally insured financial
   20         institutions; amending s. 532.01, F.S.; including
   21         payroll debit cards under requirements applicable to
   22         payment instruments; providing an effective date.
   23  
   24  Be It Enacted by the Legislature of the State of Florida:
   25  
   26         Section 1. Subsection (7) of section 17.57, Florida
   27  Statutes, is amended to read:
   28         17.57 Deposits and investments of state money.—
   29         (7) In addition to the deposits authorized under this
   30  section and notwithstanding any other provisions of law, funds
   31  that are not needed to meet the disbursement needs of the state
   32  may be deposited by the Chief Financial Officer in accordance
   33  with the following conditions:
   34         (a) The funds are initially deposited in a qualified public
   35  depository, as defined in s. 280.02, selected by the Chief
   36  Financial Officer.
   37         (b) The selected depository arranges for depositing the
   38  deposit of the funds in financial deposit instruments insured by
   39  the Federal Deposit Insurance Corporation certificates of
   40  deposit in one or more federally insured banks or savings and
   41  loan associations, wherever located, for the account of the
   42  state.
   43         (c) The full amount of the principal and accrued interest
   44  of each financial deposit instrument such certificate of deposit
   45  is insured by the Federal Deposit Insurance Corporation.
   46         (d) The selected depository acts as custodian for the state
   47  with respect to each financial deposit instrument such
   48  certificates of deposit issued for its account.
   49         (e) At the same time the state’s funds are deposited and
   50  the certificates of deposit are issued, the selected depository
   51  receives an amount of deposits from customers of other federally
   52  insured financial institutions, wherever located, equal to or
   53  greater than the amount of the funds initially invested by the
   54  Chief Financial Officer through the selected depository.
   55         Section 2. Paragraph (b) of subsection (4) of section
   56  215.555, Florida Statutes, is amended to read:
   57         215.555 Florida Hurricane Catastrophe Fund.—
   58         (4) REIMBURSEMENT CONTRACTS.—
   59         (b)1. The contract shall contain a promise by the board to
   60  reimburse the insurer for 45 percent, 75 percent, or 90 percent
   61  of its losses from each covered event in excess of the insurer’s
   62  retention, plus 5 percent of the reimbursed losses to cover loss
   63  adjustment expenses.
   64         2. The insurer must elect one of the percentage coverage
   65  levels specified in this paragraph and may, upon renewal of a
   66  reimbursement contract, elect a lower percentage coverage level
   67  if no revenue bonds issued under subsection (6) after a covered
   68  event are outstanding, or elect a higher percentage coverage
   69  level, regardless of whether or not revenue bonds are
   70  outstanding. All members of an insurer group must elect the same
   71  percentage coverage level. Any joint underwriting association,
   72  risk apportionment plan, or other entity created under s.
   73  627.351 must elect the 90-percent coverage level.
   74         3. The contract shall provide that reimbursement amounts
   75  shall not be reduced by reinsurance paid or payable to the
   76  insurer from other sources.
   77         4. Notwithstanding any other provision contained in this
   78  section, the board shall make available to insurers that
   79  purchased coverage provided by this subparagraph in 2008 2007,
   80  insurers qualifying as limited apportionment companies under s.
   81  627.351(6)(c), and insurers that have been approved to
   82  participate in the Insurance Capital Build-Up Incentive Program
   83  pursuant to s. 215.5595 a contract or contract addendum that
   84  provides an additional amount of reimbursement coverage of up to
   85  $10 million. The premium to be charged for this additional
   86  reimbursement coverage shall be 50 percent of the additional
   87  reimbursement coverage provided, which shall include one prepaid
   88  reinstatement. The minimum retention level that an eligible
   89  participating insurer must retain associated with this
   90  additional coverage layer is 30 percent of the insurer’s surplus
   91  as of December 31, 2008, for the 2009-2010 contract year; as of
   92  December 31, 2009, for the contract year beginning June 1, 2010,
   93  and ending December 31, 2010; and as of December 31, 2010, for
   94  the 2011 contract year 2007. This coverage shall be in addition
   95  to all other coverage that may be provided under this section.
   96  The coverage provided by the fund under this subparagraph shall
   97  be in addition to the claims-paying capacity as defined in
   98  subparagraph (c)1., but only with respect to those insurers that
   99  select the additional coverage option and meet the requirements
  100  of this subparagraph. The claims-paying capacity with respect to
  101  all other participating insurers and limited apportionment
  102  companies that do not select the additional coverage option
  103  shall be limited to their reimbursement premium’s proportionate
  104  share of the actual claims-paying capacity otherwise defined in
  105  subparagraph (c)1. and as provided for under the terms of the
  106  reimbursement contract. The optional coverage retention as
  107  specified shall be accessed before the mandatory coverage under
  108  the reimbursement contract, but once the limit of coverage
  109  selected under this option is exhausted, the insurer’s retention
  110  under the mandatory coverage shall apply. Such coverage shall
  111  apply and must be paid concurrently with the mandatory coverage.
  112  Coverage provided in the reimbursement contract shall not be
  113  affected by the additional premiums paid by participating
  114  insurers exercising the additional coverage option allowed in
  115  this subparagraph. This subparagraph expires on December May 31,
  116  2011 2009.
  117         Section 3. Paragraphs (b), (c), (d), and (e) of subsection
  118  (23) of section 218.415, Florida Statutes, are amended to read:
  119         218.415 Local government investment policies.—Investment
  120  activity by a unit of local government must be consistent with a
  121  written investment plan adopted by the governing body, or in the
  122  absence of the existence of a governing body, the respective
  123  principal officer of the unit of local government and maintained
  124  by the unit of local government or, in the alternative, such
  125  activity must be conducted in accordance with subsection (17).
  126  Any such unit of local government shall have an investment
  127  policy for any public funds in excess of the amounts needed to
  128  meet current expenses as provided in subsections (1)-(16), or
  129  shall meet the alternative investment guidelines contained in
  130  subsection (17). Such policies shall be structured to place the
  131  highest priority on the safety of principal and liquidity of
  132  funds. The optimization of investment returns shall be secondary
  133  to the requirements for safety and liquidity. Each unit of local
  134  government shall adopt policies that are commensurate with the
  135  nature and size of the public funds within its custody.
  136         (23) AUTHORIZED DEPOSITS.—In addition to the investments
  137  authorized for local governments in subsections (16) and (17)
  138  and notwithstanding any other provisions of law, a unit of local
  139  government may deposit any portion of surplus public funds in
  140  its control or possession in accordance with the following
  141  conditions:
  142         (b) The selected depository arranges for depositing the
  143  deposit of the funds in financial deposit instruments insured by
  144  the Federal Deposit Insurance Corporation certificates of
  145  deposit in one or more federally insured banks or savings and
  146  loan associations, wherever located, for the account of the unit
  147  of local government.
  148         (c) The full amount of the principal and accrued interest
  149  of each financial deposit instrument such certificate of deposit
  150  is insured by the Federal Deposit Insurance Corporation.
  151         (d) The selected depository acts as custodian for the unit
  152  of local government with respect to each financial deposit
  153  instrument such certificates of deposit issued for its account.
  154         (e)At the same time the unit of local government’s funds
  155  are deposited and the certificates of deposit are issued, the
  156  selected depository receives an amount of deposits from
  157  customers of other federally insured financial institutions,
  158  wherever located, equal to or greater than the amount of the
  159  funds initially invested by the unit of local government through
  160  the selected depository.
  161         Section 4. Section 532.01, Florida Statutes, is amended to
  162  read:
  163         532.01 Payment by check, draft, or other order for
  164  payment.—Any order, check, draft, note, memorandum, payroll
  165  debit card, or other acknowledgment of indebtedness issued in
  166  payment of wages or salary due or to become due must be
  167  negotiable and payable in cash, on demand, without discount, at
  168  some established place of business in the state, the name and
  169  address of which must appear on the instrument or in the payroll
  170  debit card issuing materials, and at the time of its issuance,
  171  and for a reasonable time thereafter, which must be at least 30
  172  days, the maker or drawer must have sufficient funds or credit,
  173  arrangement, or understanding with the drawee for its payment.
  174         Section 5. This act shall take effect July 1, 2009.