| 1 | A bill to be entitled |
| 2 | An act relating to state financial matters; amending s. |
| 3 | 216.311, F.S.; defining the terms "contract" and |
| 4 | "agreement"; prohibiting an agency or branch of state |
| 5 | government from contracting, without legislative |
| 6 | authority, to pay liquidated damages or early termination |
| 7 | fees resulting from the breach or early termination of a |
| 8 | contract or agreement, to pay interest because of |
| 9 | insufficient budget authority to pay an obligation in the |
| 10 | current year, from obligating the state to make future |
| 11 | payments to cover unpaid payments, or from granting to a |
| 12 | party the right to collect fees or other revenues from |
| 13 | nonparties; providing exceptions for certain agency |
| 14 | contracts or agreements; prohibiting an agency from |
| 15 | entering into certain lease or lease-purchase agreements |
| 16 | unless expressly authorized by the Legislature; providing |
| 17 | an exception for the State Board of Administration to |
| 18 | enter into contracts and other agreements that are |
| 19 | necessary to carry out the investment duties of the board; |
| 20 | providing penalties; creating s. 216.312, F.S.; requiring |
| 21 | the executive and judicial branch to notify the Governor |
| 22 | and the Legislature before entering into contracts or |
| 23 | agreements in excess of a certain amount, which authorize |
| 24 | expenditures in anticipation of revenues, or for which |
| 25 | payment is delayed for a certain time after expenditure; |
| 26 | transferring, renumbering, and amending s. 287.0582, F.S.; |
| 27 | requiring a state contract to identify the appropriation |
| 28 | that funds the contract; providing an exception; expanding |
| 29 | the statement that must be included in state contracts to |
| 30 | include grounds for terminating the contract based on |
| 31 | budget deficits; requiring the judicial branch to include |
| 32 | the statement in its contracts; requiring the agency head, |
| 33 | executive director, or chief judge, as appropriate, or a |
| 34 | designated senior management employee to sign contracts |
| 35 | that exceed a certain amount; requiring the agency head, |
| 36 | executive director, or chief judge to review certain |
| 37 | contracts and certify compliance with ch. 216, F.S.; |
| 38 | requiring contracts exceeding a specified amount to |
| 39 | require written acceptance or rejection of contract |
| 40 | deliverables; providing that contracts in violation of |
| 41 | these provisions are null and void; providing penalties; |
| 42 | amending s. 287.0573, F.S.; requiring the Council on |
| 43 | Efficient Government to develop standards and criteria for |
| 44 | the disclosure of chief executive officer compensation and |
| 45 | executive compensation packages by prospective contractors |
| 46 | under consideration for a proposed outsourcing; amending |
| 47 | s. 287.0574, F.S.; requiring a contract for a proposed |
| 48 | outsourcing by the state to disclose the contractor's |
| 49 | chief executive officer compensation and executive |
| 50 | compensation packages; requiring a contract for a proposed |
| 51 | outsourcing by the state to prohibit a contractor from |
| 52 | authorizing an automatic increase in the salary or |
| 53 | benefits of an employee of the contractor if the employee |
| 54 | is providing an activity or service under the contract; |
| 55 | provides requirements and procedures for approval of such |
| 56 | an increase; requires the Office of Program Policy |
| 57 | Analysis and Government Accountability to submit an annual |
| 58 | report; amending s. 287.063, F.S.; prohibiting certain |
| 59 | lease or deferred-payment purchases by state agencies |
| 60 | unless expressly authorized by the Legislature in the |
| 61 | appropriations act; amending s. 287.064, F.S.; prohibiting |
| 62 | certain master equipment financing agreements unless |
| 63 | expressly authorized by the Legislature in the |
| 64 | appropriations act; amending ss. 376.3075 and 403.1837, |
| 65 | F.S.; conforming cross-references; providing for |
| 66 | application; providing an effective date. |
| 67 |
|
| 68 | Be It Enacted by the Legislature of the State of Florida: |
| 69 |
|
| 70 | Section 1. Section 216.311, Florida Statutes, is amended |
| 71 | to read: |
| 72 | 216.311 Unauthorized contracts in excess of |
| 73 | appropriations; penalty.- |
| 74 | (1) As used in this section and ss. 216.312 and 216.313, |
| 75 | the terms "contract" and "agreement" include the initial |
| 76 | contract or agreement, any amendment to the contract or |
| 77 | agreement, and any extension or renewal of the contract or |
| 78 | agreement. |
| 79 | (2)(1) An No agency or branch of state government may not |
| 80 | enter into any shall contract to spend, or enter into any |
| 81 | agreement: |
| 82 | (a) To spend, any moneys in excess of the amount |
| 83 | appropriated to such agency or branch unless specifically |
| 84 | authorized by law, and any contract or agreement in violation of |
| 85 | this chapter shall be null and void. |
| 86 | (b) That requires the state to pay liquidated damages or |
| 87 | early termination fees for a breach or early termination of a |
| 88 | contract or agreement by such agency or branch due to an act of |
| 89 | the Legislature which provides less than full funding for the |
| 90 | contract during the fiscal year. |
| 91 | (c) That requires the state to pay interest, other than |
| 92 | interest paid pursuant to s. 215.422, to another party because |
| 93 | the agency or branch has insufficient budget authority to pay |
| 94 | the underlying obligation of the contract or agreement in the |
| 95 | current year. |
| 96 | (d) That binds the state to make future-year payments to |
| 97 | offset payments not made in a prior year due to insufficient |
| 98 | budget authority, unless the Legislature expressly authorizes |
| 99 | the agency or branch to enter into such contract or agreement. |
| 100 | (e) To grant to any party the right or privilege to |
| 101 | collect and retain fees or other revenues from persons who are |
| 102 | not a party to the contract which would otherwise be payable to |
| 103 | the state and deposited into the State Treasury, unless the |
| 104 | Legislature expressly authorizes the agency or branch to enter |
| 105 | into such contract or agreement. |
| 106 | (3) Notwithstanding subsection (2), the following agencies |
| 107 | may enter into the following contracts or agreements: |
| 108 | (a) In order to spend funds appropriated for the approved |
| 109 | 5-year work program, the Department of Transportation may enter |
| 110 | into contracts and other agreements that require the state to |
| 111 | pay liquidated damages as a result of a breach of those |
| 112 | contracts or agreements. |
| 113 | (b) In order to administer the state group insurance |
| 114 | program as provided in s. 110.123, the Department of Management |
| 115 | Services may enter into contracts and other agreements that |
| 116 | permit health care providers, health maintenance organizations, |
| 117 | preferred provider organizations, and insurers to collect |
| 118 | premiums and copayments from participants in the group insurance |
| 119 | program. |
| 120 | (c) In order to administer the state Medicaid plan and the |
| 121 | Florida Healthy Kids program, the Agency for Health Care |
| 122 | Administration may enter into contracts and other agreements |
| 123 | that permit health care providers to collect premiums and |
| 124 | copayments from participants in the Medicaid plan and the |
| 125 | Healthy Kids program. |
| 126 | (4) Notwithstanding any law authorizing an agency to enter |
| 127 | into a lease, an agency may not enter into a lease or lease- |
| 128 | purchase agreement for tangible personal property which requires |
| 129 | the state to pay more than $500,000 over the term of the lease |
| 130 | or agreement if the term of the lease or agreement exceeds 1 |
| 131 | fiscal year unless such lease or agreement is expressly |
| 132 | authorized by the Legislature. However, in order to administer |
| 133 | the real estate and other investment portfolios as provided in |
| 134 | s. 215.47, the State Board of Administration may enter into |
| 135 | contracts and such other agreements as necessary to carry out |
| 136 | the investment duties of the board. |
| 137 | (5) Any contract or agreement in violation of this section |
| 138 | is null and void. |
| 139 | (6)(2) Any public officer or employee person who willfully |
| 140 | enters into a contract or other agreement in violation of this |
| 141 | section commits contracts to spend, or enters into an agreement |
| 142 | to spend, any money in excess of the amount appropriated to the |
| 143 | agency or branch for whom the contract or agreement is executed |
| 144 | is guilty of a misdemeanor of the first degree, punishable as |
| 145 | provided in s. 775.082 or s. 775.083. |
| 146 | Section 2. Section 216.312, Florida Statutes, is created |
| 147 | to read: |
| 148 | 216.312 Reporting contract expenditures.- |
| 149 | (1) At least 30 days before an executive or judicial |
| 150 | branch public officer or employee enters into a contract or |
| 151 | agreement, or a series of contracts or agreements between the |
| 152 | same parties, on behalf of the state which require payments by |
| 153 | the state in excess of $10 million in any fiscal or calendar |
| 154 | year, the officer or employee must notify the Governor, the |
| 155 | President of the Senate, and the Speaker of the House of |
| 156 | Representatives of the intent to enter into such contract or |
| 157 | agreement or series of contracts or agreements. |
| 158 | (2) At least 30 days before an executive or judicial |
| 159 | branch public officer or employee enters into a contract or |
| 160 | agreement on behalf of the state which requires minimal or no |
| 161 | payments by the state or authorizes the other party to make |
| 162 | expenditures in anticipation of revenues, the officer or |
| 163 | employee must notify the Governor, the President of the Senate, |
| 164 | and the Speaker of the House of Representatives of the intent to |
| 165 | enter into such contract or agreement. |
| 166 | (3) At least 30 days before an executive or judicial |
| 167 | branch public officer or employee enters into a contract or |
| 168 | agreement on behalf of the state which requires initial |
| 169 | expenditures by the other party and for which the other party |
| 170 | will not receive payment from the state within 180 days after |
| 171 | the expenditure, the officer or employee must notify the |
| 172 | Governor, the President of the Senate, and the Speaker of the |
| 173 | House of Representatives of the intent to enter into such |
| 174 | contract or agreement. |
| 175 | (4) The execution of any contract or agreement described |
| 176 | in this section is an action or proposed action subject to s. |
| 177 | 216.177(2)(b). |
| 178 | Section 3. Section 287.0582, Florida Statutes, is |
| 179 | transferred, renumbered as section 216.313, Florida Statutes, |
| 180 | and amended to read: |
| 181 | 216.313 287.0582 Contract appropriation Contracts which |
| 182 | require annual appropriation; contingency statement; |
| 183 | requirements; penalty.- |
| 184 | (1) An executive or judicial branch public officer or |
| 185 | employee may not enter into any contract or agreement on behalf |
| 186 | of the state or judicial branch which binds the state or its |
| 187 | executive agencies or the judicial branch for the purchase of |
| 188 | services or tangible personal property unless the contract |
| 189 | identifies the specific appropriation of state funds from which |
| 190 | the state will make payment under the contract in the first year |
| 191 | of the contract, or unless the Legislature expressly authorizes |
| 192 | the agency or the judicial branch to enter into such contract |
| 193 | absent a specific appropriation of funds. |
| 194 | (2) An No executive or judicial branch public officer or |
| 195 | employee may not shall enter into any contract or agreement on |
| 196 | behalf of the state, which contract binds the state or its |
| 197 | executive agencies for the purchase of services or |
| 198 | personal property for a period in excess of 1 fiscal year, |
| 199 | unless the following statements are statement is included in the |
| 200 | contract: |
| 201 | (a) "The State of Florida's performance and obligation to |
| 202 | pay under this contract is contingent upon an annual |
| 203 | appropriation by the Legislature." |
| 204 | (b) "This contract may be terminated by the state upon 30 |
| 205 | days' written notice if funding for this contract is |
| 206 | specifically eliminated pursuant to a deficit reduction plan |
| 207 | implemented by: |
| 208 | 1. The Governor or the Chief Justice or by an act of the |
| 209 | Legislature after certification pursuant to section 216.221, |
| 210 | Florida Statutes, that a deficit will occur in the General |
| 211 | Revenue Fund; or |
| 212 | 2. The Governor or Chief Justice pursuant to section |
| 213 | 216.221(10), Florida Statutes, or by an act of the Legislature, |
| 214 | after a determination by the Chief Financial Officer that a |
| 215 | deficit will occur with respect to appropriations from a |
| 216 | specific trust fund in the current fiscal year." |
| 217 | (3) A contract or other agreement that exceeds: |
| 218 | (a) The CATEGORY TWO threshold amount provided in s. |
| 219 | 287.017 must be signed by the agency head, executive director, |
| 220 | or chief judge, as appropriate, or a designated senior |
| 221 | management employee. |
| 222 | (b) A term of 12 months may not be executed by any |
| 223 | executive or judicial branch agency unless the agency head, |
| 224 | executive director, or chief judge, as appropriate, determines |
| 225 | that the contract is in compliance with the requirements of this |
| 226 | chapter and certifies such compliance in writing within the |
| 227 | contract or agreement. |
| 228 | (c) The CATEGORY FIVE threshold amount provided in s. |
| 229 | 287.017 must require the written acceptance or rejection of |
| 230 | contract deliverables. |
| 231 | (4) Any contract or other agreement in violation of this |
| 232 | section is null and void. |
| 233 | (5) Any public officer or employee who willfully enters |
| 234 | into a contract or other agreement in violation of this section |
| 235 | commits a misdemeanor of the first degree, punishable as |
| 236 | provided in s. 775.082 or s. 775.083. |
| 237 | Section 4. Paragraph (i) is added to subsection (8) of |
| 238 | section 287.0573, Florida Statutes, to read: |
| 239 | 287.0573 Council on Efficient Government; membership; |
| 240 | duties.- |
| 241 | (8) The council shall: |
| 242 | (i) For the purpose of fulfilling the contract |
| 243 | requirements specified in s. 287.0574(5)(m), develop standards |
| 244 | and criteria for the disclosure of chief executive officer |
| 245 | compensation and executive compensation packages by prospective |
| 246 | contractors under consideration for a proposed outsourcing. The |
| 247 | council shall develop the standards and criteria based upon |
| 248 | established standards for disclosure of executive compensation |
| 249 | such as Item 402 of Regulation S-K of the Securities and |
| 250 | Exchange Commission. Required disclosure must include, but is |
| 251 | not limited to: |
| 252 | 1. Compensatory information for the contracting entity's |
| 253 | chief executive officer and its four most highly compensated |
| 254 | executive officers other than the chief executive officer. |
| 255 | 2. A series of tables setting forth each compensatory |
| 256 | element for a particular year. |
| 257 | 3. A report by the contractor or subcontractor |
| 258 | articulating the bases for their compensation decisions, |
| 259 | including the relationship to corporate performance. |
| 260 | 4. Where applicable, a comparison of total shareholder |
| 261 | returns of the contracting entity against those of a broad |
| 262 | market index and a peer group. |
| 263 | Section 5. Paragraphs (m) and (n) are added to subsection |
| 264 | (5) of section 287.0574, Florida Statutes, to read: |
| 265 | 287.0574 Business cases to outsource; review and analysis; |
| 266 | requirements.- |
| 267 | (5) In addition to the contract requirements provided in |
| 268 | s. 287.058, each contract for a proposed outsourcing, pursuant |
| 269 | to this section, must include, but need not be limited to, the |
| 270 | following contractual provisions: |
| 271 | (m) A provision that requires disclosure of the |
| 272 | contractor's chief executive officer compensation and executive |
| 273 | compensation packages in accordance with the standards and |
| 274 | criteria developed by the council under s. 287.0573(8)(i). |
| 275 | (n) A provision that: |
| 276 | 1. Prohibits the contractor from authorizing an automatic |
| 277 | increase in the salary or benefits of an employee of the |
| 278 | contractor if the employee is providing an activity or service |
| 279 | under the contract. |
| 280 | 2. Requires the contractor to submit a written request to |
| 281 | the agency for approval of an increase in the salary or benefits |
| 282 | of an employee described in subparagraph 1. |
| 283 | 3. Requires the agency, if the agency approves any |
| 284 | increase in salary or benefits pursuant to subparagraph 2., to |
| 285 | inform the contractor of the reasons that justify the approval |
| 286 | of the increase, including the employee's original base salary |
| 287 | and the percentage of the approved increase. |
| 288 |
|
| 289 | By July 1, 2011, and annually thereafter, the Office of Program |
| 290 | Policy Analysis and Government Accountability shall submit a |
| 291 | report to the President of the Senate and the Speaker of the |
| 292 | House of Representatives which contains the total number of |
| 293 | requests by contractors pursuant to this paragraph for increases |
| 294 | in salaries or benefits of employees, the number of approved |
| 295 | requests, the percentage increase of each approved request for a |
| 296 | salary increase or a description of increased benefits for any |
| 297 | approved request for a benefit increase, and the reasons for |
| 298 | granting approval of the request. |
| 299 | Section 6. Subsection (4) of section 287.063, Florida |
| 300 | Statutes, is amended to read: |
| 301 | 287.063 Deferred-payment commodity contracts; preaudit |
| 302 | review.- |
| 303 | (4) Beginning July 1, 2010, an agency may not enter into a |
| 304 | lease or deferred-payment purchase arrangement for the |
| 305 | acquisition of equipment that has a total cost greater than |
| 306 | $500,000 unless the Legislature has expressly authorized such |
| 307 | lease or deferred-payment purchase arrangement in the General |
| 308 | Appropriations Act. For purposes of this section, deferred- |
| 309 | payment commodity contracts for replacing the state accounting |
| 310 | and cash management systems may include equipment, accounting |
| 311 | software, and implementation and project management services. |
| 312 | Section 7. Subsection (9) of section 287.064, Florida |
| 313 | Statutes, is amended to read: |
| 314 | 287.064 Consolidated financing of deferred-payment |
| 315 | purchases.- |
| 316 | (9) Beginning July 1, 2010, an agency may not enter into a |
| 317 | master equipment financing agreement that has a total cost |
| 318 | greater than $500,000 unless the Legislature has expressly |
| 319 | authorized such agreement in the General Appropriations Act. For |
| 320 | purposes of this section, deferred-payment commodity contracts |
| 321 | for replacing the state accounting and cash management systems |
| 322 | may include equipment, accounting software, and implementation |
| 323 | and project management services. |
| 324 | Section 8. Subsections (4) and (9) of section 376.3075, |
| 325 | Florida Statutes, are amended to read: |
| 326 | 376.3075 Inland Protection Financing Corporation.- |
| 327 | (4) The corporation may enter into one or more service |
| 328 | contracts with the department to provide services to the |
| 329 | department in connection with financing the functions and |
| 330 | activities provided in ss. 376.30-376.317. The department may |
| 331 | enter into one or more such service contracts with the |
| 332 | corporation and provide payment for payments under such |
| 333 | contracts pursuant to s. 376.3071(4)(o), subject to annual |
| 334 | appropriation by the Legislature. The proceeds from such service |
| 335 | contracts may be used for the corporation's administrative costs |
| 336 | and expenses after payments as set forth in subsection (5). Each |
| 337 | service contract may have a term of up to 20 years. Amounts |
| 338 | annually appropriated and applied to make payments under such |
| 339 | service contracts may not include any funds derived from |
| 340 | penalties or other payments received from any property owner or |
| 341 | private party, including payments received under s. |
| 342 | 376.3071(6)(b). In compliance with s. 216.313 287.0641 and other |
| 343 | applicable provisions of law, the obligations of the department |
| 344 | under such service contracts do not constitute a general |
| 345 | obligation of the state or a pledge of the faith and credit or |
| 346 | taxing power of the state nor may such obligations be construed |
| 347 | in any manner as an obligation of the State Board of |
| 348 | Administration or entities for which it invests funds, other |
| 349 | than the department as provided in this section, but are payable |
| 350 | solely from amounts available in the Inland Protection Trust |
| 351 | Fund, subject to annual appropriation. In compliance with this |
| 352 | subsection and s. 287.0582, The service contract must expressly |
| 353 | include the statements required under s. 216.313(2). following |
| 354 | statement: "The State of Florida's performance and obligation to |
| 355 | pay under this contract is contingent upon an annual |
| 356 | appropriation by the Legislature." |
| 357 | (9) The corporation is not a special district for the |
| 358 | purposes of chapter 189 or a unit of local government for the |
| 359 | purposes of part III of chapter 218. The provisions of chapters |
| 360 | 120 and 215, except the limitation on interest rates provided by |
| 361 | s. 215.84 which applies to obligations of the corporation issued |
| 362 | pursuant to this section, and part I of chapter 287, except s. |
| 363 | ss. 287.0582 and 287.0641, does do not apply to this section, |
| 364 | the corporation, the service contracts entered into pursuant to |
| 365 | this section, or debt obligations issued by the corporation as |
| 366 | contemplated in this section. |
| 367 | Section 9. Subsections (5) and (10) of section 403.1837, |
| 368 | Florida Statutes, are amended to read: |
| 369 | 403.1837 Florida Water Pollution Control Financing |
| 370 | Corporation.- |
| 371 | (5) The corporation may enter into one or more service |
| 372 | contracts with the department under which the corporation shall |
| 373 | provide services to the department in connection with financing |
| 374 | the functions, projects, and activities provided for in s. |
| 375 | 403.1835. The department may enter into one or more service |
| 376 | contracts with the corporation and provide payment for payments |
| 377 | under those contracts pursuant to s. 403.1835(9), subject to |
| 378 | annual appropriation by the Legislature. The service contracts |
| 379 | may provide for the transfer of all or a portion of the funds in |
| 380 | the Wastewater Treatment and Stormwater Management Revolving |
| 381 | Loan Trust Fund to the corporation for use by the corporation |
| 382 | for costs incurred by the corporation in its operations, |
| 383 | including, but not limited to, payment of debt service, |
| 384 | reserves, or other costs in relation to bonds issued by the |
| 385 | corporation, for use by the corporation at the request of the |
| 386 | department to directly provide the types of local financial |
| 387 | assistance provided for in s. 403.1835(3), or for payment of the |
| 388 | administrative costs of the corporation. The department may not |
| 389 | transfer funds under any service contract with the corporation |
| 390 | without specific appropriation for such purpose in the General |
| 391 | Appropriations Act, except for administrative expenses incurred |
| 392 | by the State Board of Administration or other expenses necessary |
| 393 | under documents authorizing or securing previously issued bonds |
| 394 | of the corporation. The service contracts may also provide for |
| 395 | the assignment or transfer to the corporation of any loans made |
| 396 | by the department. The service contracts may establish the |
| 397 | operating relationship between the department and the |
| 398 | corporation and must shall require the department to request the |
| 399 | corporation to issue bonds before any issuance of bonds by the |
| 400 | corporation, to take any actions necessary to enforce the |
| 401 | agreements entered into between the corporation and other |
| 402 | parties, and to take all other actions necessary to assist the |
| 403 | corporation in its operations. In compliance with s. 287.0641 |
| 404 | and other applicable provisions of law, the obligations of the |
| 405 | department under the service contracts do not constitute a |
| 406 | general obligation of the state or a pledge of the faith and |
| 407 | credit or taxing power of the state, nor may the obligations be |
| 408 | construed in any manner as an obligation of the State Board of |
| 409 | Administration or entities for which it invests funds, or of the |
| 410 | department except as provided in this section as payable solely |
| 411 | from amounts available under any service contract between the |
| 412 | corporation and the department, subject to appropriation. The In |
| 413 | compliance with this subsection and s. 287.0582, service |
| 414 | contracts must expressly include the statements required under |
| 415 | s. 216.313(2). following statement: "The State of Florida's |
| 416 | performance and obligation to pay under this contract is |
| 417 | contingent upon an annual appropriation by the Legislature." |
| 418 | (10) The corporation is not a special district for |
| 419 | purposes of chapter 189 or a unit of local government for |
| 420 | purposes of part III of chapter 218. The provisions of chapters |
| 421 | 120 and 215, except the limitation on interest rates provided by |
| 422 | s. 215.84, which applies to obligations of the corporation |
| 423 | issued under this section, and part I of chapter 287, except s. |
| 424 | ss. 287.0582 and 287.0641, does do not apply to this section, |
| 425 | the corporation created in this section, the service contracts |
| 426 | entered into under this section, or debt obligations issued by |
| 427 | the corporation as provided in this section. |
| 428 | Section 10. This act shall take effect July 1, 2010, and |
| 429 | applies to initial contracts and agreements, amendments to a |
| 430 | contract or agreement, and extensions or renewals of a contract |
| 431 | or agreement which are executed on or after that date. |