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

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