CS/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	expanding the authority of the state board to use trust
24	agreements; providing reporting requirements for the state
25	board; amending s. 215.441, F.S.; providing minimum
26	qualifications for the executive director of the state
27	board; amending s. 215.444, F.S.; increasing membership of
28	the Investment Advisory Council; revising membership
29	requirements; providing council meeting and reporting
30	requirements; amending s. 215.47, F.S.; expanding the
31	types of investments that the state board is authorized to
32	make; authorizing moneys available for investment by the
33	state 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 requirements for rules made by the state
38	board with respect to certain fiduciary duties; amending
39	s. 218.409, F.S.; providing for extending a moratorium on
40	contributions to or withdrawals from the Local Government
41	Surplus Funds Trust Fund under certain circumstances;
42	authorizing the state board to develop work products that
43	are subject to trademark, copyright, or patent; providing
44	an effective date.
45
46	Be It Enacted by the Legislature of the State of Florida:
47
48	Section 1.  Subsection (2), paragraph (e) of subsection
49	(4), subsection (6), and paragraphs (a) and (g) of subsection
50	(8) of section 121.4501, Florida Statutes, are amended to read:
51	121.4501  Public Employee Optional Retirement Program.-
52	(2)  DEFINITIONS.-As used in this part, the term:
53	(a)  "Approved provider" or "provider" means a private
54	sector company that is selected and approved by the state board
55	to offer one or more investment products or services to the
56	Public Employee optional retirement program. The term includes a
57	bundled provider that offers participants a range of
58	individually allocated or unallocated investment products and
59	may offer a range of administrative and customer services, which
60	may include accounting and administration of individual
61	participant benefits and contributions; individual participant
62	recordkeeping; asset purchase, control, and safekeeping; direct
63	execution of the participant's instructions as to asset and
64	contribution allocation; calculation of daily net asset values;
65	direct access to participant account information; periodic
66	reporting to participants, at least quarterly, on account
67	balances and transactions; guidance, advice, and allocation
68	services directly relating to the provider's its own investment
69	options or products, but only if the bundled provider complies
70	with the standard of care of s. 404(a)(1)(A-B) of the Employee
71	Retirement Income Security Act of 1974 (ERISA) and if providing
72	such guidance, advice, or allocation services does not
73	constitute a prohibited transaction under s. 4975(c)(1) of the
74	Internal Revenue Code or s. 406 of ERISA, notwithstanding that
75	such prohibited transaction provisions do not apply to the
76	optional retirement program; a broad array of distribution
77	options; asset allocation; and retirement counseling and
78	education. Private sector companies include investment
79	management companies, insurance companies, depositories, and
80	mutual fund companies.
81	(b)  "Average monthly compensation" means one-twelfth of
82	average final compensation as defined in s. 121.021(24).
83	(c)  "Covered employment" means employment in a regularly
84	established position as defined in s. 121.021(52).
85	(d)  "Defined benefit program" means the defined benefit
86	program of the Florida Retirement System administered under part
87	I of this chapter "Department" means the Department of
88	Management Services.
89	(e)  "Division" means the Division of Retirement within the
90	department of Management Services.
91	(f)  "Electronic means" means by telephone, if the required
92	information is received on a recorded line, or through Internet
93	access, if the required information is captured online.
94	(g)(f)  "Eligible employee" means an officer or employee,
95	as defined in s. 121.021, who:
96	1.  Is a member of, or is eligible for membership in, the
97	Florida Retirement System, including any renewed member of the
98	Florida Retirement System initially enrolled before July 1,
99	2010; or
100	2.  Participates in, or is eligible to participate in, the
101	Senior Management Service Optional Annuity Program as
102	established under s. 121.055(6), the State Community College
103	System Optional Retirement Program as established under s.
104	121.051(2)(c), or the State University System Optional
105	Retirement Program established under s. 121.35.
106
107	The term does not include any member participating in the
108	Deferred Retirement Option Program established under s.
109	121.091(13), a retiree of a state-administered retirement system
110	initially reemployed on or after July 1, 2010, or a mandatory
111	participant of the State University System Optional Retirement
112	Program established under s. 121.35.
113	(h)(g)  "Employer" means an employer, as defined in s.
114	121.021(10), of an eligible employee.
115	(i)  "Optional retirement program" or "optional program"
116	means the Public Employee Optional Retirement Program
117	established under this part.
118	(j)(h)  "Participant" means an eligible employee who elects
119	to participate in the Public Employee Optional Retirement
120	Program and enrolls in the such optional program as provided in
121	subsection (4) or a terminated Deferred Retirement Option
122	Program participant as described in subsection (21).
123	(i)  "Public Employee Optional Retirement Program,"
124	"optional program," or "optional retirement program" means the
125	alternative defined contribution retirement program established
126	under this section.
127	(k)(j)  "Retiree" means a former participant of the Florida
128	Retirement System Public Employee optional retirement program
129	who has terminated employment and has taken a distribution as
130	provided in s. 121.591, except for a mandatory distribution of a
131	de minimis account authorized by the state board.
132	(k)  "State board" or "board" means the State Board of
133	Administration.
134	(l)  "Trustees" means Trustees of the State Board of
135	Administration.
136	(l)(m)  "Vested" or "vesting" means the guarantee that a
137	participant is eligible to receive a retirement benefit upon
138	completion of the required years of service under the Public
139	Employee optional retirement program.
140	(4)  PARTICIPATION; ENROLLMENT.-
141	(e)  After the period during which an eligible employee had
142	the choice to elect the defined benefit program or the Public
143	Employee optional retirement program, or the month following the
144	receipt of the eligible employee's plan election, if sooner, the
145	employee shall have one opportunity, at the employee's
146	discretion, to choose to move from the defined benefit program
147	to the Public Employee optional retirement program or from the
148	Public Employee optional retirement program to the defined
149	benefit program. Eligible employees may elect to move between
150	Florida Retirement System programs only if they are earning
151	service credit in an employer-employee relationship consistent
152	with the requirements under s. 121.021(17)(b), excluding leaves
153	of absence without pay. Effective July 1, 2005, such elections
154	are shall be effective on the first day of the month following
155	the receipt of the election by the third-party administrator and
156	are not subject to the requirements regarding an employer-
157	employee relationship or receipt of contributions for the
158	eligible employee in the effective month, except that the
159	employee must meet the conditions of the previous sentence when
160	the election is received by the third-party administrator. This
161	paragraph is shall be contingent upon approval from the Internal
162	Revenue Service for including the choice described herein within
163	the programs offered by the Florida Retirement System.
164	1.  If the employee chooses to move to the Public Employee
165	optional retirement program, the applicable provisions of this
166	section shall govern the transfer.
167	2.  If the employee chooses to move to the defined benefit
168	program, the employee must transfer from his or her Public
169	Employee optional retirement program account, and from other
170	employee moneys as necessary, a sum representing the present
171	value of that employee's accumulated benefit obligation
172	immediately following the time of such movement, determined
173	assuming that attained service equals the sum of service in the
174	defined benefit program and service in the Public Employee
175	optional retirement program. Benefit commencement occurs on the
176	first date the employee is would become eligible for unreduced
177	benefits, using the discount rate and other relevant actuarial
178	assumptions that were used to value the Florida Retirement
179	System defined benefit plan liabilities in the most recent
180	actuarial valuation. For any employee who, at the time of the
181	second election, already maintains an accrued benefit amount in
182	the defined benefit program plan, the then-present value of the
183	such accrued benefit shall be deemed part of the required
184	transfer amount described in this subparagraph. The division
185	shall ensure that the transfer sum is prepared using a formula
186	and methodology certified by an enrolled actuary.
187	3.  Notwithstanding subparagraph 2., an employee who
188	chooses to move to the defined benefit program and who became
189	eligible to participate in the Public Employee optional
190	retirement program by reason of employment in a regularly
191	established position with a state employer after June 1, 2002; a
192	district school board employer after September 1, 2002; or a
193	local employer after December 1, 2002, must transfer from his or
194	her Public Employee optional retirement program account, and,
195	from other employee moneys as necessary, a sum representing the
196	that employee's actuarial accrued liability.
197	4.  An employee's Employees' ability to transfer from the
198	Florida Retirement System defined benefit program to the Public
199	Employee optional retirement program pursuant to paragraphs (a)-
200	(d), and the ability of a for current employee employees to have
201	an option to later transfer back into the defined benefit
202	program under subparagraph 2., shall be deemed a significant
203	system amendment. Pursuant to s. 121.031(4), any such resulting
204	unfunded liability arising from actual original transfers from
205	the defined benefit program to the optional program must shall
206	be amortized within 30 plan years as a separate unfunded
207	actuarial base independent of the reserve stabilization
208	mechanism defined in s. 121.031(3)(f). For the first 25 years, a
209	no direct amortization payment may not shall be calculated for
210	this base. During this 25-year period, the such separate base
211	shall be used to offset the impact of employees exercising their
212	second program election under this paragraph. It is the
213	legislative intent of the Legislature that the actuarial funded
214	status of the Florida Retirement System defined benefit program
215	not be affected plan is neither beneficially nor adversely
216	impacted by such second program elections in any significant
217	manner, after due recognition of the separate unfunded actuarial
218	base. Following the this initial 25-year period, any remaining
219	balance of the original separate base shall be amortized over
220	the remaining 5 years of the required 30-year amortization
221	period.
222	5.  If the employee chooses to transfer from the optional
223	retirement program to the defined benefit program and retains an
224	excess account balance in the optional program after satisfying
225	the buy-in requirements under this paragraph, the excess may not
226	be distributed until the member retires from the defined benefit
227	program. The excess account balance may be rolled over to the
228	defined benefit program and used to purchase service credit or
229	upgrade creditable service in that program.
230	(6)  VESTING REQUIREMENTS.-
231	(a)1.  With respect to employer contributions paid on
232	behalf of the participant to the Public Employee optional
233	retirement program, plus interest and earnings thereon and less
234	investment fees and administrative charges, a participant is
235	shall be vested after completing 1 work year, as defined in s.
236	121.021(54), with an employer, including any service while the
237	participant was a member of the defined benefit retirement
238	program or an optional retirement program authorized under s.
239	121.051(2)(c) or s. 121.055(6).
240	2.  If the participant terminates employment before prior
241	to satisfying the vesting requirements, the nonvested
242	accumulation must shall be transferred from the participant's
243	accounts to the state board for deposit and investment by the
244	state board in the suspense account created within of the Public
245	Employee Optional Retirement Program Trust Fund of the board. If
246	the terminated participant is reemployed as an eligible employee
247	within 5 years, the state board shall transfer to the
248	participant's account any amount of the moneys previously
249	transferred from the participant's accounts to the suspense
250	account of the Public Employee Optional Retirement Program Trust
251	Fund, plus the actual earnings on such amount while in the
252	suspense account.
253	(b)1.  With respect to amounts transferred from the defined
254	benefit program to the investment program, plus interest and
255	earnings, and less investment fees and administrative charges, a
256	participant shall be vested in the amount transferred from the
257	defined benefit program, plus interest and earnings thereon and
258	less administrative charges and investment fees, upon meeting
259	the service requirements for the participant's membership class
260	as set forth in s. 121.021(29). The third-party administrator
261	shall account for such amounts for each participant. The
262	division shall notify the participant and the third-party
263	administrator when the participant has satisfied the vesting
264	period for Florida Retirement System purposes.
265	2.  If the participant terminates employment before prior
266	to satisfying the vesting requirements, the nonvested
267	accumulation must shall be transferred from the participant's
268	accounts to the state board for deposit and investment by the
269	state board in the suspense account created within of the Public
270	Employee Optional Retirement Program Trust Fund of the board. If
271	the terminated participant is reemployed as an eligible employee
272	within 5 years, the state board shall transfer to the
273	participant's account any amount of the moneys previously
274	transferred from the participant's accounts to the suspense
275	account of the Public Employee Optional Retirement Program Trust
276	Fund, plus the actual earnings on such amount while in the
277	suspense account.
278	(c)  Any nonvested accumulations transferred from a
279	participant's account to the suspense account shall be forfeited
280	by the participant if the participant is not reemployed as an
281	eligible employee within 5 years after termination.
282	(8)  ADMINISTRATION OF PROGRAM.-
283	(a)  The Public Employee optional retirement program shall
284	be administered by the state board and affected employers. The
285	board may is authorized to require oaths, by affidavit or
286	otherwise, and acknowledgments from persons in connection with
287	the administration of its statutory duties and responsibilities
288	for this program under this chapter. An No oath, by affidavit or
289	otherwise, may not shall be required of an employee participant
290	at the time of enrollment election. Acknowledgment of an
291	employee's election to participate in the program shall be no
292	greater than necessary to confirm the employee's election. The
293	state board shall adopt rules to carry out its statutory duties
294	with respect to administering the optional retirement program,
295	including establishing the roles role and responsibilities of
296	affected state, local government, and education-related
297	employers, the state board, the department, and third-party
298	contractors in administering the Public Employee optional
299	retirement program. The department shall adopt rules necessary
300	to administer implement the optional program in coordination
301	with the defined benefit retirement program and the disability
302	benefits available under the optional program.
303	(g)  The state board shall receive and resolve participant
304	complaints against the program, the third-party administrator,
305	or any program vendor or provider; shall resolve any conflict
306	between the third-party administrator and an approved provider
307	if when such conflict threatens the implementation or
308	administration of the program or the quality of services to
309	employees; and may resolve any other conflicts. The third-party
310	administrator shall retain all participant records for at least
311	5 years for use in resolving any participant conflicts. The
312	state board, the third-party administrator, or a provider is not
313	required to produce documentation or an audio recording to
314	justify action taken with regard to a participant if the action
315	occurred 5 or more years before the complaint is submitted to
316	the state board. It is presumed that all action taken 5 or more
317	years before the complaint is submitted was taken at the request
318	of the 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, any state university or college, or any unit of local
555	government, or any direct-support organization thereof pursuant
556	to the terms of a trust agreement with the head of the state
557	agency or the governing body of the state university or college,
558	unit of local government, or direct-support organization
559	thereof, or pursuant to the enrollment requirements stated in s.
560	218.407, and may invest such funds in the Local Government
561	Surplus Funds Trust Fund created by s. 218.405., which trust
562	agreement shall govern the investment of such funds, provided
563	that The board shall approve the undertaking of investments
564	subject to a trust agreement such investment before execution of
565	such the trust agreement by the State Board of Administration.
566	The funds and the earnings therefrom are exempt from the service
567	charge imposed by s. 215.20. As used in this subsection, the
568	term "state agency" has the same meaning as that provided in s.
569	216.001, and the terms "governing body" and "unit of local
570	government" have the same meaning as that provided in s.
571	218.403.
572	(2)(a)  The board shall have the power to make purchases,
573	sales, exchanges, investments, and reinvestments for and on
574	behalf of the funds referred to in subsection (1), and it shall
575	be the duty of the board to see that moneys invested under the
576	provisions of ss. 215.44-215.53 are at all times handled in the
577	best interests of the state.
578	(b)  In exercising investment authority pursuant to s.
579	215.47, the board may retain investment advisers or managers, or
580	both, external to in-house staff, to assist the board in
581	carrying out the power specified in paragraph (a).
582	(c)  The board shall produce a set of financial statements
583	for the Florida Retirement System on an annual basis which shall
584	be reported to the Legislature and audited by a commercial
585	independent third-party audit firm.
586	Section 7.  Section 215.441, Florida Statutes, is amended
587	to read:
588	215.441  Board of Administration; appointment of executive
589	director.-The appointment of the executive director of the State
590	Board of Administration shall be subject to the approval by a
591	majority vote of the Board of Trustees of the State Board of
592	Administration, and the Governor must vote on the prevailing
593	side. Such appointment must be reaffirmed in the same manner by
594	the board of trustees on an annual basis. The executive director
595	shall, at a minimum, possess substantial experience, knowledge,
596	and expertise in the oversight of investment portfolios and must
597	meet any other requirements determined by the board to be
598	necessary to the overall management and investment of funds.
599	Section 8.  Section 215.444, Florida Statutes, is amended
600	to read:
601	215.444  Investment Advisory Council.-
602	(1)  There is created a nine-member six-member Investment
603	Advisory Council to review the investments made by the staff of
604	the Board of Administration and to make recommendations to the
605	board regarding investment policy, strategy, and procedures. The
606	council shall meet with staff of the board no less than
607	quarterly and shall provide a quarterly report directly to the
608	Trustees of the State Board of Administration at a meeting of
609	the board.
610	(2)  The members of the council shall be appointed by the
611	board as a resource to the Trustees of the State Board of
612	Administration and shall be subject to confirmation by the
613	Senate. These individuals shall possess special knowledge,
614	experience, and familiarity with financial investments and
615	portfolio management, institutional investments, and fiduciary
616	responsibilities. Members shall be appointed for 4-year terms. A
617	vacancy shall be filled for the remainder of the unexpired term.
618	The council shall annually elect a chair and a vice chair from
619	its membership. A member may not be elected to consecutive terms
620	as chair or vice chair.
621	Section 9.  Paragraphs (b) and (c) of subsection (1),
622	paragraph (a) of subsection (2), and subsection (5) of section
623	215.47, Florida Statutes, are amended, and paragraph (o) is
624	added to subsection (1) of that section, to read:
625	215.47  Investments; authorized securities; loan of
626	securities.-Subject to the limitations and conditions of the
627	State Constitution or of the trust agreement relating to a trust
628	fund, moneys available for investments under ss. 215.44-215.53
629	may be invested as follows:
630	(1)  Without limitation in:
631	(b)  State Bonds, notes, or obligations of any state or
632	organized territory of the United States or the District of
633	Columbia that pledge pledging the full faith and credit of the
634	state, territory, or district; and revenue bonds, notes, or
635	obligations of any state or organized territory of the United
636	States or the District of Columbia additionally secured by the
637	full faith and credit of the state, territory, or district.
638	(c)  Bonds, notes, or obligations of the several counties
639	or districts in any the state or organized territory of the
640	United States or the District of Columbia containing a pledge of
641	the full faith and credit of the county or district involved.
642	(o)  Bonds, notes, or obligations described in 26 U.S.C. s.
643	149(g)(3)(B), if investment in such bonds, notes, or obligations
644	is necessary in order to comply with covenants in documents or
645	proceedings relating to bonds issued pursuant to s. 215.555(6).
646	Investments made pursuant to this paragraph may be purchased
647	only from the proceeds of bonds issued pursuant to s. 215.555(6)
648	and must be authorized under documents or proceedings relating
649	to such bonds.
650	(2)  With no more than 25 percent of any fund in:
651	(a)  Bonds, notes, or obligations of any state or organized
652	territory of the United States or the District of Columbia; of
653	any municipality or political subdivision or any agency,
654	district, or authority thereof; or of any agency or authority of
655	this state, if the obligations are rated investment grade by at
656	least one nationally recognized statistical rating organization.
657	(5)  With no more than 35 25 percent of any fund in
658	corporate obligations and securities of any kind of a foreign
659	corporation or a foreign commercial entity having its principal
660	office located in any country other than the United States of
661	America or its possessions or territories, not including United
662	States dollar-denominated securities listed and traded on a
663	United States exchange which are a part of the ordinary
664	investment strategy of the board.
665	Section 10.  Section 215.52, Florida Statutes, is amended
666	to read:
667	215.52  Rules and regulations.-The board shall have the
668	power and authority to make reasonable rules and regulations
669	necessary to carry out the provisions of ss. 215.44-215.53. The
670	rules shall provide for full transparency and accountability in
671	fulfillment of the board's fiduciary duties in the areas of
672	compliance, ethics, training, and audit procedures.
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.