HB 1491

1
A bill to be entitled
2An act relating to state financial matters; amending s.
3216.311, F.S.; defining the terms "contract" and
4"agreement"; prohibiting an agency or branch of state
5government from contracting, without legislative
6authority, to pay liquidated damages or early termination
7fees resulting from the breach or early termination of a
8contract or agreement, to pay interest because of
9insufficient budget authority to pay an obligation in the
10current year, from obligating the state to make future
11payments to cover unpaid payments, or from granting to a
12party the right to collect fees or other revenues from
13nonparties; providing exceptions for certain agency
14contracts or agreements; prohibiting an agency from
15entering into certain lease or lease-purchase agreements
16unless expressly authorized by the Legislature; providing
17an exception for the State Board of Administration to
18enter into contracts and other agreements that are
19necessary to carry out the investment duties of the board;
20providing penalties; creating s. 216.312, F.S.; requiring
21the executive and judicial branch to notify the Governor
22and the Legislature before entering into contracts or
23agreements in excess of a certain amount, which authorize
24expenditures in anticipation of revenues, or for which
25payment is delayed for a certain time after expenditure;
26transferring, renumbering, and amending s. 287.0582, F.S.;
27requiring a state contract to identify the appropriation
28that funds the contract; providing an exception; expanding
29the statement that must be included in state contracts to
30include grounds for terminating the contract based on
31budget deficits; requiring the judicial branch to include
32the statement in its contracts; requiring the agency head,
33executive director, or chief judge, as appropriate, or a
34designated senior management employee to sign contracts
35that exceed a certain amount; requiring the agency head,
36executive director, or chief judge to review certain
37contracts and certify compliance with ch. 216, F.S.;
38requiring contracts exceeding a specified amount to
39require written acceptance or rejection of contract
40deliverables; providing that contracts in violation of
41these provisions are null and void; providing penalties;
42amending s. 287.0573, F.S.; requiring the Council on
43Efficient Government to develop standards and criteria for
44the disclosure of chief executive officer compensation and
45executive compensation packages by prospective contractors
46under consideration for a proposed outsourcing; amending
47s. 287.0574, F.S.; requiring a contract for a proposed
48outsourcing by the state to disclose the contractor's
49chief executive officer compensation and executive
50compensation packages; requiring a contract for a proposed
51outsourcing by the state to prohibit a contractor from
52authorizing an automatic increase in the salary or
53benefits of an employee of the contractor if the employee
54is providing an activity or service under the contract;
55provides requirements and procedures for approval of such
56an increase; requires the Office of Program Policy
57Analysis and Government Accountability to submit an annual
58report; amending s. 287.063, F.S.; prohibiting certain
59lease or deferred-payment purchases by state agencies
60unless expressly authorized by the Legislature in the
61appropriations act; amending s. 287.064, F.S.; prohibiting
62certain master equipment financing agreements unless
63expressly authorized by the Legislature in the
64appropriations act; amending ss. 376.3075 and 403.1837,
65F.S.; conforming cross-references; providing for
66application; providing an effective date.
67
68Be It Enacted by the Legislature of the State of Florida:
69
70     Section 1.  Section 216.311, Florida Statutes, is amended
71to read:
72     216.311  Unauthorized contracts in excess of
73appropriations; penalty.-
74     (1)  As used in this section and ss. 216.312 and 216.313,
75the terms "contract" and "agreement" include the initial
76contract or agreement, any amendment to the contract or
77agreement, and any extension or renewal of the contract or
78agreement.
79     (2)(1)  An No agency or branch of state government may not
80enter into any shall contract to spend, or enter into any
81agreement:
82     (a)  To spend, any moneys in excess of the amount
83appropriated to such agency or branch unless specifically
84authorized by law, and any contract or agreement in violation of
85this chapter shall be null and void.
86     (b)  That requires the state to pay liquidated damages or
87early termination fees for a breach or early termination of a
88contract or agreement by such agency or branch due to an act of
89the Legislature which provides less than full funding for the
90contract during the fiscal year.
91     (c)  That requires the state to pay interest, other than
92interest paid pursuant to s. 215.422, to another party because
93the agency or branch has insufficient budget authority to pay
94the underlying obligation of the contract or agreement in the
95current year.
96     (d)  That binds the state to make future-year payments to
97offset payments not made in a prior year due to insufficient
98budget authority, unless the Legislature expressly authorizes
99the agency or branch to enter into such contract or agreement.
100     (e)  To grant to any party the right or privilege to
101collect and retain fees or other revenues from persons who are
102not a party to the contract which would otherwise be payable to
103the state and deposited into the State Treasury, unless the
104Legislature expressly authorizes the agency or branch to enter
105into such contract or agreement.
106     (3)  Notwithstanding subsection (2), the following agencies
107may enter into the following contracts or agreements:
108     (a)  In order to spend funds appropriated for the approved
1095-year work program, the Department of Transportation may enter
110into contracts and other agreements that require the state to
111pay liquidated damages as a result of a breach of those
112contracts or agreements.
113     (b)  In order to administer the state group insurance
114program as provided in s. 110.123, the Department of Management
115Services may enter into contracts and other agreements that
116permit health care providers, health maintenance organizations,
117preferred provider organizations, and insurers to collect
118premiums and copayments from participants in the group insurance
119program.
120     (c)  In order to administer the state Medicaid plan and the
121Florida Healthy Kids program, the Agency for Health Care
122Administration may enter into contracts and other agreements
123that permit health care providers to collect premiums and
124copayments from participants in the Medicaid plan and the
125Healthy Kids program.
126     (4)  Notwithstanding any law authorizing an agency to enter
127into a lease, an agency may not enter into a lease or lease-
128purchase agreement for tangible personal property which requires
129the state to pay more than $500,000 over the term of the lease
130or agreement if the term of the lease or agreement exceeds 1
131fiscal year unless such lease or agreement is expressly
132authorized by the Legislature. However, in order to administer
133the real estate and other investment portfolios as provided in
134s. 215.47, the State Board of Administration may enter into
135contracts and such other agreements as necessary to carry out
136the investment duties of the board.
137     (5)  Any contract or agreement in violation of this section
138is null and void.
139     (6)(2)  Any public officer or employee person who willfully
140enters into a contract or other agreement in violation of this
141section commits contracts to spend, or enters into an agreement
142to spend, any money in excess of the amount appropriated to the
143agency or branch for whom the contract or agreement is executed
144is guilty of a misdemeanor of the first degree, punishable as
145provided in s. 775.082 or s. 775.083.
146     Section 2.  Section 216.312, Florida Statutes, is created
147to read:
148     216.312  Reporting contract expenditures.-
149     (1)  At least 30 days before an executive or judicial
150branch public officer or employee enters into a contract or
151agreement, or a series of contracts or agreements between the
152same parties, on behalf of the state which require payments by
153the state in excess of $10 million in any fiscal or calendar
154year, the officer or employee must notify the Governor, the
155President of the Senate, and the Speaker of the House of
156Representatives of the intent to enter into such contract or
157agreement or series of contracts or agreements.
158     (2)  At least 30 days before an executive or judicial
159branch public officer or employee enters into a contract or
160agreement on behalf of the state which requires minimal or no
161payments by the state or authorizes the other party to make
162expenditures in anticipation of revenues, the officer or
163employee must notify the Governor, the President of the Senate,
164and the Speaker of the House of Representatives of the intent to
165enter into such contract or agreement.
166     (3)  At least 30 days before an executive or judicial
167branch public officer or employee enters into a contract or
168agreement on behalf of the state which requires initial
169expenditures by the other party and for which the other party
170will not receive payment from the state within 180 days after
171the expenditure, the officer or employee must notify the
172Governor, the President of the Senate, and the Speaker of the
173House of Representatives of the intent to enter into such
174contract or agreement.
175     (4)  The execution of any contract or agreement described
176in this section is an action or proposed action subject to s.
177216.177(2)(b).
178     Section 3.  Section 287.0582, Florida Statutes, is
179transferred, renumbered as section 216.313, Florida Statutes,
180and amended to read:
181     216.313 287.0582  Contract appropriation Contracts which
182require annual appropriation; contingency statement;
183requirements; penalty.-
184     (1)  An executive or judicial branch public officer or
185employee may not enter into any contract or agreement on behalf
186of the state or judicial branch which binds the state or its
187executive agencies or the judicial branch for the purchase of
188services or tangible personal property unless the contract
189identifies the specific appropriation of state funds from which
190the state will make payment under the contract in the first year
191of the contract, or unless the Legislature expressly authorizes
192the agency or the judicial branch to enter into such contract
193absent a specific appropriation of funds.
194     (2)  An No executive or judicial branch public officer or
195employee may not shall enter into any contract or agreement on
196behalf of the state, which contract binds the state or its
197executive agencies for the purchase of services or
198personal property for a period in excess of 1 fiscal year,
199unless the following statements are statement is included in the
200contract:
201     (a)  "The State of Florida's performance and obligation to
202pay under this contract is contingent upon an annual
203appropriation by the Legislature."
204     (b)  "This contract may be terminated by the state upon 30
205days' written notice if funding for this contract is
206specifically eliminated pursuant to a deficit reduction plan
207implemented by:
208     1.  The Governor or the Chief Justice or by an act of the
209Legislature after certification pursuant to section 216.221,
210Florida Statutes, that a deficit will occur in the General
211Revenue Fund; or
212     2.  The Governor or Chief Justice pursuant to section
213216.221(10), Florida Statutes, or by an act of the Legislature,
214after a determination by the Chief Financial Officer that a
215deficit will occur with respect to appropriations from a
216specific 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.
219287.017 must be signed by the agency head, executive director,
220or chief judge, as appropriate, or a designated senior
221management employee.
222     (b)  A term of 12 months may not be executed by any
223executive or judicial branch agency unless the agency head,
224executive director, or chief judge, as appropriate, determines
225that the contract is in compliance with the requirements of this
226chapter and certifies such compliance in writing within the
227contract or agreement.
228     (c)  The CATEGORY FIVE threshold amount provided in s.
229287.017 must require the written acceptance or rejection of
230contract deliverables.
231     (4)  Any contract or other agreement in violation of this
232section is null and void.
233     (5)  Any public officer or employee who willfully enters
234into a contract or other agreement in violation of this section
235commits a misdemeanor of the first degree, punishable as
236provided in s. 775.082 or s. 775.083.
237     Section 4.  Paragraph (i) is added to subsection (8) of
238section 287.0573, Florida Statutes, to read:
239     287.0573  Council on Efficient Government; membership;
240duties.-
241     (8)  The council shall:
242     (i)  For the purpose of fulfilling the contract
243requirements specified in s. 287.0574(5)(m), develop standards
244and criteria for the disclosure of chief executive officer
245compensation and executive compensation packages by prospective
246contractors under consideration for a proposed outsourcing. The
247council shall develop the standards and criteria based upon
248established standards for disclosure of executive compensation
249such as Item 402 of Regulation S-K of the Securities and
250Exchange Commission. Required disclosure must include, but is
251not limited to:
252     1.  Compensatory information for the contracting entity's
253chief executive officer and its four most highly compensated
254executive officers other than the chief executive officer.
255     2.  A series of tables setting forth each compensatory
256element for a particular year.
257     3.  A report by the contractor or subcontractor
258articulating the bases for their compensation decisions,
259including the relationship to corporate performance.
260     4.  Where applicable, a comparison of total shareholder
261returns of the contracting entity against those of a broad
262market 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;
266requirements.-
267     (5)  In addition to the contract requirements provided in
268s. 287.058, each contract for a proposed outsourcing, pursuant
269to this section, must include, but need not be limited to, the
270following contractual provisions:
271     (m)  A provision that requires disclosure of the
272contractor's chief executive officer compensation and executive
273compensation packages in accordance with the standards and
274criteria developed by the council under s. 287.0573(8)(i).
275     (n)  A provision that:
276     1.  Prohibits the contractor from authorizing an automatic
277increase in the salary or benefits of an employee of the
278contractor if the employee is providing an activity or service
279under the contract.
280     2.  Requires the contractor to submit a written request to
281the agency for approval of an increase in the salary or benefits
282of an employee described in subparagraph 1.
283     3.  Requires the agency, if the agency approves any
284increase in salary or benefits pursuant to subparagraph 2., to
285inform the contractor of the reasons that justify the approval
286of the increase, including the employee's original base salary
287and the percentage of the approved increase.
288
289By July 1, 2011, and annually thereafter, the Office of Program
290Policy Analysis and Government Accountability shall submit a
291report to the President of the Senate and the Speaker of the
292House of Representatives which contains the total number of
293requests by contractors pursuant to this paragraph for increases
294in salaries or benefits of employees, the number of approved
295requests, the percentage increase of each approved request for a
296salary increase or a description of increased benefits for any
297approved request for a benefit increase, and the reasons for
298granting approval of the request.
299     Section 6.  Subsection (4) of section 287.063, Florida
300Statutes, is amended to read:
301     287.063  Deferred-payment commodity contracts; preaudit
302review.-
303     (4)  Beginning July 1, 2010, an agency may not enter into a
304lease or deferred-payment purchase arrangement for the
305acquisition of equipment that has a total cost greater than
306$500,000 unless the Legislature has expressly authorized such
307lease or deferred-payment purchase arrangement in the General
308Appropriations Act. For purposes of this section, deferred-
309payment commodity contracts for replacing the state accounting
310and cash management systems may include equipment, accounting
311software, and implementation and project management services.
312     Section 7.  Subsection (9) of section 287.064, Florida
313Statutes, is amended to read:
314     287.064  Consolidated financing of deferred-payment
315purchases.-
316     (9)  Beginning July 1, 2010, an agency may not enter into a
317master equipment financing agreement that has a total cost
318greater than $500,000 unless the Legislature has expressly
319authorized such agreement in the General Appropriations Act. For
320purposes of this section, deferred-payment commodity contracts
321for replacing the state accounting and cash management systems
322may include equipment, accounting software, and implementation
323and project management services.
324     Section 8.  Subsections (4) and (9) of section 376.3075,
325Florida Statutes, are amended to read:
326     376.3075  Inland Protection Financing Corporation.-
327     (4)  The corporation may enter into one or more service
328contracts with the department to provide services to the
329department in connection with financing the functions and
330activities provided in ss. 376.30-376.317. The department may
331enter into one or more such service contracts with the
332corporation and provide payment for payments under such
333contracts pursuant to s. 376.3071(4)(o), subject to annual
334appropriation by the Legislature. The proceeds from such service
335contracts may be used for the corporation's administrative costs
336and expenses after payments as set forth in subsection (5). Each
337service contract may have a term of up to 20 years. Amounts
338annually appropriated and applied to make payments under such
339service contracts may not include any funds derived from
340penalties or other payments received from any property owner or
341private party, including payments received under s.
342376.3071(6)(b). In compliance with s. 216.313 287.0641 and other
343applicable provisions of law, the obligations of the department
344under such service contracts do not constitute a general
345obligation of the state or a pledge of the faith and credit or
346taxing power of the state nor may such obligations be construed
347in any manner as an obligation of the State Board of
348Administration or entities for which it invests funds, other
349than the department as provided in this section, but are payable
350solely from amounts available in the Inland Protection Trust
351Fund, subject to annual appropriation. In compliance with this
352subsection and s. 287.0582, The service contract must expressly
353include the statements required under s. 216.313(2). following
354statement: "The State of Florida's performance and obligation to
355pay under this contract is contingent upon an annual
356appropriation by the Legislature."
357     (9)  The corporation is not a special district for the
358purposes of chapter 189 or a unit of local government for the
359purposes of part III of chapter 218. The provisions of chapters
360120 and 215, except the limitation on interest rates provided by
361s. 215.84 which applies to obligations of the corporation issued
362pursuant to this section, and part I of chapter 287, except s.
363ss. 287.0582 and 287.0641, does do not apply to this section,
364the corporation, the service contracts entered into pursuant to
365this section, or debt obligations issued by the corporation as
366contemplated in this section.
367     Section 9.  Subsections (5) and (10) of section 403.1837,
368Florida Statutes, are amended to read:
369     403.1837  Florida Water Pollution Control Financing
370Corporation.-
371     (5)  The corporation may enter into one or more service
372contracts with the department under which the corporation shall
373provide services to the department in connection with financing
374the functions, projects, and activities provided for in s.
375403.1835. The department may enter into one or more service
376contracts with the corporation and provide payment for payments
377under those contracts pursuant to s. 403.1835(9), subject to
378annual appropriation by the Legislature. The service contracts
379may provide for the transfer of all or a portion of the funds in
380the Wastewater Treatment and Stormwater Management Revolving
381Loan Trust Fund to the corporation for use by the corporation
382for costs incurred by the corporation in its operations,
383including, but not limited to, payment of debt service,
384reserves, or other costs in relation to bonds issued by the
385corporation, for use by the corporation at the request of the
386department to directly provide the types of local financial
387assistance provided for in s. 403.1835(3), or for payment of the
388administrative costs of the corporation. The department may not
389transfer funds under any service contract with the corporation
390without specific appropriation for such purpose in the General
391Appropriations Act, except for administrative expenses incurred
392by the State Board of Administration or other expenses necessary
393under documents authorizing or securing previously issued bonds
394of the corporation. The service contracts may also provide for
395the assignment or transfer to the corporation of any loans made
396by the department. The service contracts may establish the
397operating relationship between the department and the
398corporation and must shall require the department to request the
399corporation to issue bonds before any issuance of bonds by the
400corporation, to take any actions necessary to enforce the
401agreements entered into between the corporation and other
402parties, and to take all other actions necessary to assist the
403corporation in its operations. In compliance with s. 287.0641
404and other applicable provisions of law, the obligations of the
405department under the service contracts do not constitute a
406general obligation of the state or a pledge of the faith and
407credit or taxing power of the state, nor may the obligations be
408construed in any manner as an obligation of the State Board of
409Administration or entities for which it invests funds, or of the
410department except as provided in this section as payable solely
411from amounts available under any service contract between the
412corporation and the department, subject to appropriation. The In
413compliance with this subsection and s. 287.0582, service
414contracts must expressly include the statements required under
415s. 216.313(2). following statement: "The State of Florida's
416performance and obligation to pay under this contract is
417contingent upon an annual appropriation by the Legislature."
418     (10)  The corporation is not a special district for
419purposes of chapter 189 or a unit of local government for
420purposes of part III of chapter 218. The provisions of chapters
421120 and 215, except the limitation on interest rates provided by
422s. 215.84, which applies to obligations of the corporation
423issued under this section, and part I of chapter 287, except s.
424ss. 287.0582 and 287.0641, does do not apply to this section,
425the corporation created in this section, the service contracts
426entered into under this section, or debt obligations issued by
427the corporation as provided in this section.
428     Section 10.  This act shall take effect July 1, 2010, and
429applies to initial contracts and agreements, amendments to a
430contract or agreement, and extensions or renewals of a contract
431or agreement which are executed on or after that date.


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