HB 1307

1	A bill to be entitled
2	An act relating to state financial matters; amending s.
3	121.4501, F.S.; revising and providing definitions;
4	providing for excess account balances in the Public
5	Employee Optional Retirement Program when an employee
6	transfers to the defined benefit program; providing for
7	the use of such excess balance; requiring the State Board
8	of Administration to develop procedures to resolve
9	complaints; providing for the use of records in resolving
10	such complaints; clarifying the state board's rule
11	authority with respect to the program; amending s.
12	121.4502, F.S.; establishing a forfeiture account in the
13	Public Employee Retirement Program Trust Fund; providing
14	for the use of funds in the account; amending s. 121.591,
15	F.S.; conforming a cross-reference; permitting an
16	application for benefits under the optional retirement
17	program to be submitted by electronic means; amending s.
18	121.74, F.S.; revising the contribution rates for
19	employers participating in the Florida Retirement System;
20	amending s. 121.78, F.S.; exempting the Division of
21	Retirement, the state board, and the third-party
22	administrator from liability for market losses due to acts
23	of God; amending s. 215.44, F.S.; providing reporting
24	requirements for the state board; amending s. 215.441,
25	F.S.; providing minimum qualifications for the executive
26	director of the state board; amending s. 215.444, F.S.;
27	increasing membership of the Investment Advisory Council;
28	revising membership requirements; providing council
29	meeting and reporting requirements; providing certain
30	immunity from liability with respect to authorized actions
31	for members of the council; amending s. 215.47, F.S.;
32	authorizing moneys available for investment by the state
33	board to be invested in certain federally tax-exempt
34	bonds, notes, or obligations not subject to the federal
35	alternative minimum tax; increasing the fund amount that
36	may be invested in a foreign entity; amending s. 215.52,
37	F.S.; providing the state board with certain powers;
38	amending s. 218.409, F.S.; providing for extending a
39	moratorium on contributions to or withdrawals from the
40	Local Government Surplus Funds Trust Fund under certain
41	circumstances; authorizing the state board to develop work
42	products that are subject to trademark, copyright, or
43	patent; providing an effective date.
44
45	Be It Enacted by the Legislature of the State of Florida:
46
47	Section 1.  Subsection (2), paragraph (e) of subsection
48	(4), subsection (6), and paragraphs (a) and (g) of subsection
49	(8) of section 121.4501, Florida Statutes, are amended to read:
50	121.4501  Public Employee Optional Retirement Program.-
51	(2)  DEFINITIONS.-As used in this part, the term:
52	(a)  "Approved provider" or "provider" means a private
53	sector company that is selected and approved by the state board
54	to offer one or more investment products or services to the
55	Public Employee optional retirement program. The term includes a
56	bundled provider that offers participants a range of
57	individually allocated or unallocated investment products and
58	may offer a range of administrative and customer services, which
59	may include accounting and administration of individual
60	participant benefits and contributions; individual participant
61	recordkeeping; asset purchase, control, and safekeeping; direct
62	execution of the participant's instructions as to asset and
63	contribution allocation; calculation of daily net asset values;
64	direct access to participant account information; periodic
65	reporting to participants, at least quarterly, on account
66	balances and transactions; guidance, advice, and allocation
67	services directly relating to the provider's its own investment
68	options or products, but only if the bundled provider complies
69	with the standard of care of s. 404(a)(1)(A-B) of the Employee
70	Retirement Income Security Act of 1974 (ERISA) and if providing
71	such guidance, advice, or allocation services does not
72	constitute a prohibited transaction under s. 4975(c)(1) of the
73	Internal Revenue Code or s. 406 of ERISA, notwithstanding that
74	such prohibited transaction provisions do not apply to the
75	optional retirement program; a broad array of distribution
76	options; asset allocation; and retirement counseling and
77	education. Private sector companies include investment
78	management companies, insurance companies, depositories, and
79	mutual fund companies.
80	(b)  "Average monthly compensation" means one-twelfth of
81	average final compensation as defined in s. 121.021(24).
82	(c)  "Covered employment" means employment in a regularly
83	established position as defined in s. 121.021(52).
84	(d)  "Defined benefit program" means the defined benefit
85	program of the Florida Retirement System administered under part
86	I of this chapter "Department" means the Department of
87	Management Services.
88	(e)  "Division" means the Division of Retirement within the
89	department of Management Services.
90	(f)  "Electronic means" means by telephone, if the required
91	information is received on a recorded line, or through Internet
92	access, if the required information is captured online.
93	(g)(f)  "Eligible employee" means an officer or employee,
94	as defined in s. 121.021, who:
95	1.  Is a member of, or is eligible for membership in, the
96	Florida Retirement System, including any renewed member of the
97	Florida Retirement System initially enrolled before July 1,
98	2010; or
99	2.  Participates in, or is eligible to participate in, the
100	Senior Management Service Optional Annuity Program as
101	established under s. 121.055(6), the State Community College
102	System Optional Retirement Program as established under s.
103	121.051(2)(c), or the State University System Optional
104	Retirement Program established under s. 121.35.
105
106	The term does not include any member participating in the
107	Deferred Retirement Option Program established under s.
108	121.091(13), a retiree of a state-administered retirement system
109	initially reemployed on or after July 1, 2010, or a mandatory
110	participant of the State University System Optional Retirement
111	Program established under s. 121.35.
112	(h)(g)  "Employer" means an employer, as defined in s.
113	121.021(10), of an eligible employee.
114	(i)  "Optional retirement program" or "optional program"
115	means the Public Employee Optional Retirement Program
116	established under this part.
117	(j)(h)  "Participant" means an eligible employee who elects
118	to participate in the Public Employee Optional Retirement
119	Program and enrolls in the such optional program as provided in
120	subsection (4) or a terminated Deferred Retirement Option
121	Program participant as described in subsection (21).
122	(i)  "Public Employee Optional Retirement Program,"
123	"optional program," or "optional retirement program" means the
124	alternative defined contribution retirement program established
125	under this section.
126	(k)(j)  "Retiree" means a former participant of the Florida
127	Retirement System Public Employee optional retirement program
128	who has terminated employment and has taken a distribution as
129	provided in s. 121.591, except for a mandatory distribution of a
130	de minimis account authorized by the state board.
131	(k)  "State board" or "board" means the State Board of
132	Administration.
133	(l)  "Trustees" means Trustees of the State Board of
134	Administration.
135	(l)(m)  "Vested" or "vesting" means the guarantee that a
136	participant is eligible to receive a retirement benefit upon
137	completion of the required years of service under the Public
138	Employee optional retirement program.
139	(4)  PARTICIPATION; ENROLLMENT.-
140	(e)  After the period during which an eligible employee had
141	the choice to elect the defined benefit program or the Public
142	Employee optional retirement program, or the month following the
143	receipt of the eligible employee's plan election, if sooner, the
144	employee shall have one opportunity, at the employee's
145	discretion, to choose to move from the defined benefit program
146	to the Public Employee optional retirement program or from the
147	Public Employee optional retirement program to the defined
148	benefit program. Eligible employees may elect to move between
149	Florida Retirement System programs only if they are earning
150	service credit in an employer-employee relationship consistent
151	with the requirements under s. 121.021(17)(b), excluding leaves
152	of absence without pay. Effective July 1, 2005, such elections
153	are shall be effective on the first day of the month following
154	the receipt of the election by the third-party administrator and
155	are not subject to the requirements regarding an employer-
156	employee relationship or receipt of contributions for the
157	eligible employee in the effective month, except that the
158	employee must meet the conditions of the previous sentence when
159	the election is received by the third-party administrator. This
160	paragraph is shall be contingent upon approval from the Internal
161	Revenue Service for including the choice described herein within
162	the programs offered by the Florida Retirement System.
163	1.  If the employee chooses to move to the Public Employee
164	optional retirement program, the applicable provisions of this
165	section shall govern the transfer.
166	2.  If the employee chooses to move to the defined benefit
167	program, the employee must transfer from his or her Public
168	Employee optional retirement program account, and from other
169	employee moneys as necessary, a sum representing the present
170	value of that employee's accumulated benefit obligation
171	immediately following the time of such movement, determined
172	assuming that attained service equals the sum of service in the
173	defined benefit program and service in the Public Employee
174	optional retirement program. Benefit commencement occurs on the
175	first date the employee is would become eligible for unreduced
176	benefits, using the discount rate and other relevant actuarial
177	assumptions that were used to value the Florida Retirement
178	System defined benefit plan liabilities in the most recent
179	actuarial valuation. For any employee who, at the time of the
180	second election, already maintains an accrued benefit amount in
181	the defined benefit program plan, the then-present value of the
182	such accrued benefit shall be deemed part of the required
183	transfer amount described in this subparagraph. The division
184	shall ensure that the transfer sum is prepared using a formula
185	and methodology certified by an enrolled actuary.
186	3.  Notwithstanding subparagraph 2., an employee who
187	chooses to move to the defined benefit program and who became
188	eligible to participate in the Public Employee optional
189	retirement program by reason of employment in a regularly
190	established position with a state employer after June 1, 2002; a
191	district school board employer after September 1, 2002; or a
192	local employer after December 1, 2002, must transfer from his or
193	her Public Employee optional retirement program account, and,
194	from other employee moneys as necessary, a sum representing the
195	that employee's actuarial accrued liability.
196	4.  An employee's Employees' ability to transfer from the
197	Florida Retirement System defined benefit program to the Public
198	Employee optional retirement program pursuant to paragraphs (a)-
199	(d), and the ability of a for current employee employees to have
200	an option to later transfer back into the defined benefit
201	program under subparagraph 2., shall be deemed a significant
202	system amendment. Pursuant to s. 121.031(4), any such resulting
203	unfunded liability arising from actual original transfers from
204	the defined benefit program to the optional program must shall
205	be amortized within 30 plan years as a separate unfunded
206	actuarial base independent of the reserve stabilization
207	mechanism defined in s. 121.031(3)(f). For the first 25 years, a
208	no direct amortization payment may not shall be calculated for
209	this base. During this 25-year period, the such separate base
210	shall be used to offset the impact of employees exercising their
211	second program election under this paragraph. It is the
212	legislative intent of the Legislature that the actuarial funded
213	status of the Florida Retirement System defined benefit program
214	not be affected plan is neither beneficially nor adversely
215	impacted by such second program elections in any significant
216	manner, after due recognition of the separate unfunded actuarial
217	base. Following the this initial 25-year period, any remaining
218	balance of the original separate base shall be amortized over
219	the remaining 5 years of the required 30-year amortization
220	period.
221	5.  If the employee chooses to transfer from the optional
222	retirement program to the defined benefit program and retains an
223	excess account balance in the optional program after satisfying
224	the buy-in requirements under this paragraph, the excess may not
225	be distributed until the member retires from the defined benefit
226	program. The excess account balance may be rolled over to the
227	defined benefit program and used to purchase service credit or
228	upgrade creditable service in that program.
229	(6)  VESTING REQUIREMENTS.-
230	(a)1.  With respect to employer contributions paid on
231	behalf of the participant to the Public Employee optional
232	retirement program, plus interest and earnings thereon and less
233	investment fees and administrative charges, a participant is
234	shall be vested after completing 1 work year, as defined in s.
235	121.021(54), with an employer, including any service while the
236	participant was a member of the defined benefit retirement
237	program or an optional retirement program authorized under s.
238	121.051(2)(c) or s. 121.055(6).
239	2.  If the participant terminates employment before prior
240	to satisfying the vesting requirements, the nonvested
241	accumulation must shall be transferred from the participant's
242	accounts to the state board for deposit and investment by the
243	state board in the suspense account created within of the Public
244	Employee Optional Retirement Program Trust Fund of the board. If
245	the terminated participant is reemployed as an eligible employee
246	within 5 years, the state board shall transfer to the
247	participant's account any amount of the moneys previously
248	transferred from the participant's accounts to the suspense
249	account of the Public Employee Optional Retirement Program Trust
250	Fund, plus the actual earnings on such amount while in the
251	suspense account.
252	(b)1.  With respect to amounts transferred from the defined
253	benefit program to the investment program, plus interest and
254	earnings, and less investment fees and administrative charges, a
255	participant shall be vested in the amount transferred from the
256	defined benefit program, plus interest and earnings thereon and
257	less administrative charges and investment fees, upon meeting
258	the service requirements for the participant's membership class
259	as set forth in s. 121.021(29). The third-party administrator
260	shall account for such amounts for each participant. The
261	division shall notify the participant and the third-party
262	administrator when the participant has satisfied the vesting
263	period for Florida Retirement System purposes.
264	2.  If the participant terminates employment before prior
265	to satisfying the vesting requirements, the nonvested
266	accumulation must shall be transferred from the participant's
267	accounts to the state board for deposit and investment by the
268	state board in the suspense account created within of the Public
269	Employee Optional Retirement Program Trust Fund of the board. If
270	the terminated participant is reemployed as an eligible employee
271	within 5 years, the state board shall transfer to the
272	participant's account any amount of the moneys previously
273	transferred from the participant's accounts to the suspense
274	account of the Public Employee Optional Retirement Program Trust
275	Fund, plus the actual earnings on such amount while in the
276	suspense account.
277	(c)  Any nonvested accumulations transferred from a
278	participant's account to the suspense account shall be forfeited
279	by the participant if the participant is not reemployed as an
280	eligible employee within 5 years after termination.
281	(8)  ADMINISTRATION OF PROGRAM.-
282	(a)  The Public Employee optional retirement program shall
283	be administered by the state board and affected employers. The
284	board may is authorized to require oaths, by affidavit or
285	otherwise, and acknowledgments from persons in connection with
286	the administration of its statutory duties and responsibilities
287	for this program under this chapter. An No oath, by affidavit or
288	otherwise, may not shall be required of an employee participant
289	at the time of enrollment election. Acknowledgment of an
290	employee's election to participate in the program shall be no
291	greater than necessary to confirm the employee's election. The
292	state board shall adopt rules to carry out its statutory duties
293	with respect to administering the optional retirement program,
294	including, but not limited to, establishing the roles role and
295	responsibilities of affected state, local government, and
296	education-related employers, the state board, the department,
297	and third-party contractors in administering the Public Employee
298	optional retirement program. The department shall adopt rules
299	necessary to administer implement the optional program in
300	coordination with the defined benefit retirement program and the
301	disability benefits available under the optional program.
302	(g)  The state board shall develop procedures to receive
303	and resolve participant complaints against the program, the
304	third-party administrator, or any program vendor or provider;
305	shall resolve any conflict between the third-party administrator
306	and an approved provider if when such conflict threatens the
307	implementation or administration of the program or the quality
308	of services to employees; and may resolve any other conflicts.
309	The third-party administrator shall retain all participant
310	records for at least 5 years for use in resolving any
311	participant conflicts. The state board, the third-party
312	administrator, or a provider is not required to produce
313	documentation or an audio recording to justify action taken with
314	regard to a participant if the action occurred 5 or more years
315	before the complaint is submitted to the state board. It is
316	presumed that all action taken 5 or more years before the
317	complaint is submitted was taken at the request of the
318	participant and with the participant's full knowledge and
319	consent. To overcome this presumption, the participant must
320	present documentary evidence or an audio recording demonstrating
321	otherwise.
322	Section 2.  Subsection (3) is added to section 121.4502,
323	Florida Statutes, to read:
324	121.4502  Public Employee Optional Retirement Program Trust
325	Fund.-
326	(3)  A forfeiture account shall be created within the
327	Public Employee Optional Retirement Program Trust Fund to hold
328	the assets derived from the forfeiture of benefits by
329	participants. Pursuant to a private letter ruling from the
330	Internal Revenue Service, the forfeiture account may be used
331	only for paying expenses of the Public Employee Optional
332	Retirement Program and reducing future employer contributions to
333	the program. Consistent with Rulings 80-155 and 74-340 of the
334	Internal Revenue Service, unallocated reserves within the
335	forfeiture account must be used as quickly and as prudently as
336	possible considering the state board's fiduciary duty. Expected
337	withdrawals from the account must endeavor to reduce the account
338	to zero each fiscal year.
339	Section 3.  Paragraphs (a) and (b) of subsection (1) of
340	section 121.591, Florida Statutes, are amended to read:
341	121.591  Benefits payable under the Public Employee
342	Optional Retirement Program of the Florida Retirement System.-
343	Benefits may not be paid under this section unless the member
344	has terminated employment as provided in s. 121.021(39)(a) or is
345	deceased and a proper application has been filed in the manner
346	prescribed by the state board or the department. The state board
347	or department, as appropriate, may cancel an application for
348	retirement benefits when the member or beneficiary fails to
349	timely provide the information and documents required by this
350	chapter and the rules of the state board and department. In
351	accordance with their respective responsibilities as provided
352	herein, the State Board of Administration and the Department of
353	Management Services shall adopt rules establishing procedures
354	for application for retirement benefits and for the cancellation
355	of such application when the required information or documents
356	are not received. The State Board of Administration and the
357	Department of Management Services, as appropriate, are
358	authorized to cash out a de minimis account of a participant who
359	has been terminated from Florida Retirement System covered
360	employment for a minimum of 6 calendar months. A de minimis
361	account is an account containing employer contributions and
362	accumulated earnings of not more than $5,000 made under the
363	provisions of this chapter. Such cash-out must either be a
364	complete lump-sum liquidation of the account balance, subject to
365	the provisions of the Internal Revenue Code, or a lump-sum
366	direct rollover distribution paid directly to the custodian of
367	an eligible retirement plan, as defined by the Internal Revenue
368	Code, on behalf of the participant. If any financial instrument
369	issued for the payment of retirement benefits under this section
370	is not presented for payment within 180 days after the last day
371	of the month in which it was originally issued, the third-party
372	administrator or other duly authorized agent of the State Board
373	of Administration shall cancel the instrument and credit the
374	amount of the instrument to the suspense account of the Public
375	Employee Optional Retirement Program Trust Fund authorized under
376	s. 121.4501(6). Any such amounts transferred to the suspense
377	account are payable upon a proper application, not to include
378	earnings thereon, as provided in this section, within 10 years
379	after the last day of the month in which the instrument was
380	originally issued, after which time such amounts and any
381	earnings thereon shall be forfeited. Any such forfeited amounts
382	are assets of the Public Employee Optional Retirement Program
383	Trust Fund and are not subject to the provisions of chapter 717.
384	(1)  NORMAL BENEFITS.-Under the Public Employee Optional
385	Retirement Program:
386	(a)  Benefits in the form of vested accumulations as
387	described in s. 121.4501(6) are payable under this subsection in
388	accordance with the following terms and conditions:
389	1.  To the extent vested, benefits are payable only to a
390	participant.
391	2.  Benefits shall be paid by the third-party administrator
392	or designated approved providers in accordance with the law, the
393	contracts, and any applicable board rule or policy.
394	3.  To receive benefits, the participant must be terminated
395	from all employment with all Florida Retirement System
396	employers, as provided in s. 121.021(39).
397	4.  Benefit payments may not be made until the participant
398	has been terminated for 3 calendar months, except that the board
399	may authorize by rule for the distribution of up to 10 percent
400	of the participant's account after being terminated for 1
401	calendar month if the participant has reached the normal
402	retirement date as defined in s. 121.021 of the defined benefit
403	plan.
404	5.  If a member or former member of the Florida Retirement
405	System receives an invalid distribution from the Public Employee
406	Optional Retirement Program Trust Fund, such person must repay
407	the full invalid distribution to the trust fund within 90 days
408	after receipt of final notification by the state board or the
409	third-party administrator that the distribution was invalid. If
410	such person fails to repay the full invalid distribution within
411	90 days after receipt of final notification, the person may be
412	deemed retired from the optional retirement program by the state
413	board, as provided pursuant to s. 121.4501(2)(k)(j), and is
414	subject to s. 121.122. If such person is deemed retired by the
415	state board, any joint and several liability set out in s.
416	121.091(9)(d)2. becomes null and void, and the state board, the
417	department, or the employing agency is not liable for gains on
418	payroll contributions that have not been deposited to the
419	person's account in the retirement program, pending resolution
420	of the invalid distribution. The member or former member who has
421	been deemed retired or who has been determined by the board to
422	have taken an invalid distribution may appeal the agency
423	decision through the complaint process as provided under s.
424	121.4501(9)(g)3. As used in this subparagraph, the term "invalid
425	distribution" means any distribution from an account in the
426	optional retirement program which is taken in violation of this
427	section, s. 121.091(9), or s. 121.4501.
428	(b)  If a participant elects to receive his or her benefits
429	upon termination of employment as defined in s. 121.021, the
430	participant must submit a written application or an application
431	by electronic means an equivalent form to the third-party
432	administrator indicating his or her preferred distribution date
433	and selecting an authorized method of distribution as provided
434	in paragraph (c). The participant may defer receipt of benefits
435	until he or she chooses to make such application, subject to
436	federal requirements.
437	Section 4.  Section 121.74, Florida Statutes, is amended to
438	read:
439	121.74  Administrative and educational expenses.-In
440	addition to contributions required under s. 121.71, effective
441	July 1, 2010, through June 30, 2014, employers participating in
442	the Florida Retirement System shall contribute an amount equal
443	to 0.03 0.05 percent of the payroll reported for each class or
444	subclass of Florida Retirement System membership; effective July
445	1, 2014, the contribution rate shall be 0.04 percent of the
446	payroll reported for each class or subclass of membership. The,
447	which amount contributed shall be transferred by the Division of
448	Retirement from the Florida Retirement System Contributions
449	Clearing Trust Fund to the State Board of Administration's
450	Administrative Trust Fund to offset the costs of administering
451	the optional retirement program and the costs of providing
452	educational services to participants in the defined benefit
453	program and the optional retirement program. Approval of the
454	trustees of the State Board of Administration is required before
455	prior to the expenditure of these funds. Payments for third-
456	party administrative or educational expenses shall be made only
457	pursuant to the terms of the approved contracts for such
458	services.
459	Section 5.  Subsection (3) of section 121.78, Florida
460	Statutes, is amended to read:
461	121.78  Payment and distribution of contributions.-
462	(3)(a)  Employer contributions and accompanying payroll
463	data received after the 5th working day of the month are shall
464	be considered late. The employer shall be assessed by the
465	Division of Retirement a penalty of 1 percent of the
466	contributions due for each calendar month or part thereof that
467	the contributions or accompanying payroll data are late.
468	Proceeds from the 1-percent assessment against contributions
469	made on behalf of participants of the defined benefit program
470	shall be deposited in the Florida Retirement System Trust Fund,
471	and proceeds from the 1-percent assessment against contributions
472	made on behalf of participants of the optional retirement
473	program shall be transferred to the third-party administrator
474	for deposit into participant accounts, as provided in paragraph
475	(b).
476	(b)  If contributions made by an employer on behalf of
477	participants of the optional retirement program or accompanying
478	payroll data are not received within the calendar month they are
479	due, including, but not limited to, contribution adjustments as
480	a result of employer errors or corrections, and if that
481	delinquency results in market losses to participants, the
482	employer shall reimburse each participant's account for market
483	losses resulting from the late contributions. If a participant
484	has terminated employment and taken a distribution, the
485	participant is responsible for returning any excess
486	contributions erroneously provided by employers, adjusted for
487	any investment gain or loss incurred during the period such
488	excess contributions were in the participant's Public Employee
489	Optional Retirement Program account. The state board of
490	Administration or its designated agent shall communicate to
491	terminated participants any obligation to repay such excess
492	contribution amounts. However, the state board of
493	Administration, its designated agents, the Public Employee
494	Optional Retirement Program Trust Fund, the department of
495	Management Services, or the Florida Retirement System Trust Fund
496	may shall not incur any loss or gain as a result of an
497	employer's correction of such excess contributions. The third-
498	party administrator, hired by the state board pursuant to s.
499	121.4501(8), shall calculate the market losses for each affected
500	participant. If When contributions made on behalf of
501	participants of the optional retirement program or accompanying
502	payroll data are not received within the calendar month due, the
503	employer shall also pay the cost of the third-party
504	administrator's calculation and reconciliation adjustments
505	resulting from the late contributions. The third-party
506	administrator shall notify the employer of the results of the
507	calculations and the total amount due from the employer for such
508	losses and the costs of calculation and reconciliation. The
509	employer shall remit to the Division of Retirement the amount
510	due within 30 10 working days after the date of the penalty
511	notice sent by the division. The division shall transfer that
512	said amount to the third-party administrator, which who shall
513	deposit proceeds from the 1-percent assessment and from
514	individual market losses into participant accounts, as
515	appropriate. The state board may is authorized to adopt rules to
516	administer implement the provisions regarding late
517	contributions, late submission of payroll data, the process for
518	reimbursing participant accounts for resultant market losses,
519	and the penalties charged to the employers.
520	(c)  Delinquency fees may be waived by the Division of
521	Retirement, with regard to defined benefit program
522	contributions, and by the state board of Administration, with
523	regard to optional retirement program contributions, only if
524	when, in the opinion of the division or the board, as
525	appropriate, exceptional circumstances beyond the employer's
526	control prevented remittance by the prescribed due date
527	notwithstanding the employer's good faith efforts to effect
528	delivery. Such a waiver of delinquency may be granted an
529	employer only once one time each state fiscal year.
530	(d)  If contributions made by an employer on behalf of
531	participants in the optional retirement program are delayed in
532	posting to participant accounts due to acts of God beyond the
533	control of the Division of Retirement, the state board, or the
534	third-party administrator, as applicable, market losses
535	resulting from the late contributions are not payable to the
536	participants.
537	Section 6.  Subsections (1) and (2) of section 215.44,
538	Florida Statutes, are amended to read:
539	215.44  Board of Administration; powers and duties in
540	relation to investment of trust funds.-
541	(1)  Except when otherwise specifically provided by the
542	State Constitution and subject to any limitations of the trust
543	agreement relating to a trust fund, the Board of Administration,
544	hereinafter sometimes referred to in this chapter as "board," or
545	"Trustees of the State Board of Administration," composed of the
546	Governor as chair, the Chief Financial Officer, and the Attorney
547	General, shall invest all the funds in the System Trust Fund, as
548	defined in s. 121.021(36), and all other funds specifically
549	required by law to be invested by the board pursuant to ss.
550	215.44-215.53 to the fullest extent that is consistent with the
551	cash requirements, trust agreement, and investment objectives of
552	the fund. Notwithstanding any other law to the contrary, the
553	State Board of Administration may invest any funds of any state
554	agency or any unit of local government pursuant to the terms of
555	a trust agreement with the head of the state agency or the
556	governing body of the unit of local government, which trust
557	agreement shall govern the investment of such funds, provided
558	that the board shall approve the undertaking of such investment
559	before execution of the trust agreement by the State Board of
560	Administration. The funds and the earnings therefrom are exempt
561	from the service charge imposed by s. 215.20. As used in this
562	subsection, the term "state agency" has the same meaning as that
563	provided in s. 216.001, and the terms "governing body" and "unit
564	of local government" have the same meaning as that provided in
565	s. 218.403.
566	(2)(a)  The board shall have the power to make purchases,
567	sales, exchanges, investments, and reinvestments for and on
568	behalf of the funds referred to in subsection (1), and it shall
569	be the duty of the board to see that moneys invested under the
570	provisions of ss. 215.44-215.53 are at all times handled in the
571	best interests of the state.
572	(b)  In exercising investment authority pursuant to s.
573	215.47, the board may retain investment advisers or managers, or
574	both, external to in-house staff, to assist the board in
575	carrying out the power specified in paragraph (a).
576	(c)  The board shall produce a set of financial statements
577	for the Florida Retirement System on an annual basis which shall
578	be reported to the Legislature and audited by a commercial
579	independent third-party audit firm.
580	Section 7.  Section 215.441, Florida Statutes, is amended
581	to read:
582	215.441  Board of Administration; appointment of executive
583	director.-The appointment of the executive director of the State
584	Board of Administration shall be subject to the approval by a
585	majority vote of the Board of Trustees of the State Board of
586	Administration, and the Governor must vote on the prevailing
587	side. Such appointment must be reaffirmed in the same manner by
588	the board of trustees on an annual basis. The executive director
589	shall, at a minimum, possess substantial experience, knowledge,
590	and expertise in the oversight of investment portfolios and must
591	meet any other requirements determined by the board to be
592	necessary to the overall management and investment of funds.
593	Section 8.  Section 215.444, Florida Statutes, is amended
594	to read:
595	215.444  Investment Advisory Council.-
596	(1)  There is created a nine-member six-member Investment
597	Advisory Council to review the investments made by the staff of
598	the Board of Administration and to make recommendations to the
599	board regarding investment policy, strategy, and procedures. The
600	council shall meet with staff of the board no less than
601	quarterly and shall provide a quarterly report directly to the
602	Trustees of the State Board of Administration at a meeting of
603	the board.
604	(2)  The members of the council shall be appointed by the
605	board as a resource to the Trustees of the State Board of
606	Administration and shall be subject to confirmation by the
607	Senate. These individuals shall possess special knowledge,
608	experience, and familiarity with financial investments and
609	portfolio management, institutional investments, and fiduciary
610	responsibilities. Members shall be appointed for 4-year terms. A
611	vacancy shall be filled for the remainder of the unexpired term.
612	The council shall annually elect a chair and a vice chair from
613	its membership. A member may not be elected to consecutive terms
614	as chair or vice chair.
615	(3)  In carrying out the provisions of this chapter,
616	members of the Investment Advisory Council shall be officers,
617	employees, or agents of the state for the purposes of s. 768.28.
618	Section 9.  Paragraph (o) is added to subsection (1) of
619	section 215.47, Florida Statutes, and subsection (5) of that
620	section is amended, to read:
621	215.47  Investments; authorized securities; loan of
622	securities.-Subject to the limitations and conditions of the
623	State Constitution or of the trust agreement relating to a trust
624	fund, moneys available for investments under ss. 215.44-215.53
625	may be invested as follows:
626	(1)  Without limitation in:
627	(o)  Bonds, notes, or obligations described in 26 U.S.C. s.
628	149(g)(3)(B) if investment in such bonds, notes, or obligations
629	is necessary in order to comply with covenants in documents or
630	proceedings relating to bonds issued pursuant to s. 215.555(6).
631	Investments made pursuant to this paragraph may be purchased
632	only from the proceeds of bonds issued pursuant to s. 215.555(6)
633	and must be authorized under documents or proceedings relating
634	to such bonds.
635	(5)  With no more than 35 25 percent of any fund in
636	corporate obligations and securities of any kind of a foreign
637	corporation or a foreign commercial entity having its principal
638	office located in any country other than the United States of
639	America or its possessions or territories, not including United
640	States dollar-denominated securities listed and traded on a
641	United States exchange which are a part of the ordinary
642	investment strategy of the board.
643	Section 10.  Section 215.52, Florida Statutes, is amended
644	to read:
645	215.52  Rules and regulations.-The board shall have the
646	power and authority to make reasonable rules and regulations
647	necessary or appropriate to carry out the provisions of ss.
648	215.44-215.53. To ensure full transparency and accountability in
649	fulfillment of its fiduciary duties, the board may implement any
650	policies, restrictions, or guidelines necessary to the
651	application of such provisions, including, but not limited to,
652	policies, restrictions, or guidelines in the areas of
653	compliance, ethics, training, audit procedures, service
654	providers, vendors, and third parties doing business with the
655	board.
656	Section 11.  Paragraph (a) of subsection (8) of section
657	218.409, Florida Statutes, is amended to read:
658	218.409  Administration of the trust fund; creation of
659	advisory council.-
660	(8)(a)  The principal, and any part thereof, of each and
661	every account constituting the trust fund is shall be subject to
662	payment at any time from the moneys in the trust fund. However,
663	the executive director may, in good faith, on the occurrence of
664	an event that has a material impact on liquidity or operations
665	of the trust fund, for 48 hours limit contributions to or
666	withdrawals from the trust fund to ensure that the board can
667	invest moneys entrusted to it in exercising its fiduciary
668	responsibility. Such action must shall be immediately disclosed
669	to all participants, the trustees, the Joint Legislative
670	Auditing Committee, the Investment Advisory Council, and the
671	Participant Local Government Advisory Council. The trustees
672	shall convene an emergency meeting as soon as practicable from
673	the time the executive director has instituted such measures and
674	review the necessity of those measures. If the trustees are
675	unable to convene an emergency meeting before the expiration of
676	the 48-hour moratorium on contributions and withdrawals, the
677	moratorium may be extended by the executive director until the
678	trustees are able to meet to review the necessity for the
679	moratorium. If the trustees agree with such measures, the
680	trustees shall vote to continue the measures for up to an
681	additional 15 days. The trustees must convene and vote to
682	continue any such measures before prior to the expiration of the
683	time limit set, but in no case may the time limit set by the
684	trustees exceed 15 days.
685	Section 12.  Trademarks, copyrights, or patents.-The State
686	Board of Administration, on behalf of the Florida Retirement
687	System or any other trust fund under its jurisdiction, may
688	develop work products that are subject to trademark, copyright,
689	or patent statutes. The board may, in its own name or through
690	the growth initiative program created pursuant to s. 215.47(7),
691	Florida Statutes, or any other program developed with or for the
692	board:
693	(1)  Perform all things necessary to secure letters of
694	patent, copyrights, or trademarks on any work products and
695	enforce its rights therein.
696	(2)  License, lease, assign, or otherwise give written
697	consent to any person for the manufacture or use of its work
698	products on a royalty basis or for such other consideration as
699	the board deems proper.
700	(3)  Take any action necessary, including legal action, to
701	protect its work products against improper or unlawful use or
702	infringement.
703	(4)  Enforce the collection of any sums due the board for
704	the manufacture or use of its work products by any other party.
705	(5)  Sell any of its work products and execute all
706	instruments necessary to consummate any such sale.
707	(6)  Do all other acts necessary and proper for the
708	execution of powers and duties provided under this section.
709	Section 13.  This act shall take effect July 1, 2010.

CODING: Words stricken are deletions; words underlined are additions.