Florida Senate - 2012                                    SB 1144
       
       
       
       By Senator Garcia
       
       
       
       
       40-01080-12                                           20121144__
    1                        A bill to be entitled                      
    2         An act relating to scrutinized companies; amending s.
    3         215.473, F.S.; providing legislative findings;
    4         revising and providing definitions; requiring the
    5         State Board of Administration to identify all
    6         companies in which public moneys are invested and
    7         which are doing certain types of business in or with
    8         Cuba or Syria; requiring the board to create and
    9         maintain certain scrutinized companies lists that name
   10         all such companies; requiring the board to
   11         periodically contact all scrutinized companies and
   12         encourage them to refrain from engaging in certain
   13         types of business in or with Cuba or Syria; requiring
   14         the board to inform scrutinized companies of their
   15         status as a scrutinized company and to provide notice
   16         of the opportunity to clarify the nature of the
   17         company’s business activities; providing for removal
   18         of a company from the list under certain conditions;
   19         requiring the board to divest all publicly traded
   20         securities of a scrutinized company under certain
   21         conditions; providing for reintroduction of a company
   22         onto the list; providing exceptions to the divestment
   23         requirement; prohibiting the board from acquiring
   24         securities of scrutinized companies that have active
   25         business operations; providing an exemption to the
   26         divestment requirement and investment prohibition;
   27         providing an additional exception from the divestment
   28         requirement and the investment prohibition for certain
   29         indirect holdings in actively managed investment
   30         funds; providing procedures of the board with respect
   31         to requesting removal of scrutinized companies from
   32         actively managed investment funds and defined
   33         contribution plans or the creation of a similar fund
   34         that excludes such companies; providing reporting
   35         requirements of the board; providing for cessation of
   36         assembly of the Scrutinized Companies with Activities
   37         in Cuba List and the Scrutinized Companies with
   38         Activities in Syria List, cessation of engagement and
   39         divestment of such companies, and restoration of
   40         authority to reinvest in such companies under
   41         specified conditions; authorizing the board to cease
   42         divesting or reinvesting in certain companies having
   43         scrutinized active business operations under specified
   44         conditions; amending s. 287.135, F.S.; prohibiting a
   45         state agency or local governmental entity from
   46         contracting for goods and services of more than a
   47         certain amount with a company that is on the
   48         Scrutinized Companies with Activities in Cuba List or
   49         the Scrutinized Companies with Activities in Syria
   50         List; requiring a contract provision that allows for
   51         termination of the contract if the company is found to
   52         have been placed on such list; providing exceptions;
   53         requiring certification upon submission of a bid or
   54         proposal for a contract, or before a company enters
   55         into or renews a contract, with an agency or
   56         governmental entity that the company is not on the
   57         Scrutinized Companies with Activities in Cuba List or
   58         the Scrutinized Companies with Activities in Syria
   59         List; providing procedures upon determination that a
   60         company has submitted a false certification; providing
   61         for civil action; providing penalties; providing for
   62         attorney fees and costs; providing a statute of
   63         repose; prohibiting a private right of action;
   64         requiring the Department of Management Services to
   65         notify the Attorney General after the act becomes law;
   66         providing an effective date.
   67  
   68         WHEREAS, with a population of approximately 11 million,
   69  Cuba is a totalitarian communist state that does not tolerate
   70  opposition to official policy, and
   71         WHEREAS, the current government of Cuba assumed power on
   72  January 1, 1959, and
   73         WHEREAS, although the Cuban constitution recognizes the
   74  unicameral National Assembly as the supreme authority in Cuba,
   75  the Communist Party is recognized in the constitution as the
   76  only legal party and “the superior leading force of society and
   77  of the state,” and
   78         WHEREAS, elections in January 2008 for the Cuban National
   79  Assembly were neither free nor fair, and all of the candidates
   80  had to be preapproved by a Communist Party candidacy commission,
   81  with the result that the Communist Party candidates and their
   82  allies won 98.7 percent of the vote and 607 of 614 seats in the
   83  National Assembly, and
   84         WHEREAS, the Cuban government continues to deny its
   85  citizens their basic human rights, including the right to change
   86  their government, and has committed numerous and serious abuses
   87  against the citizens of Cuba, and
   88         WHEREAS, among the human rights problems reported within
   89  Cuba are beatings and abuse of prisoners and detainees, harsh
   90  and life-threatening prison conditions, including denial of
   91  medical care, harassment, and beatings, and threats against
   92  political opponents by government-recruited mobs, police, and
   93  state security officials who acted with impunity, and
   94         WHEREAS, arbitrary arrest and detention of human rights
   95  advocates and members of independent professional organizations,
   96  and denial of fair trial for at least 194 political prisoners
   97  and as many as 5,000 persons who have been convicted of
   98  potential “dangerousness” without being charged with any
   99  specific crime are also reported, and
  100         WHEREAS, there have also been severe limitations on freedom
  101  of speech and the press, denial of peaceful assembly and
  102  association, restrictions on freedom of movement, including
  103  selective denial of exit permits to citizens and the forcible
  104  removal of persons from Havana to their hometowns, restrictions
  105  on freedom of religion and refusal to recognize domestic human
  106  rights groups or permit them to function legally, discrimination
  107  against persons of African descent, and severe restrictions on
  108  workers’ rights, including the right to form independent unions,
  109  and
  110         WHEREAS, other problems that are prevalent in Cuba include
  111  increasing incidences of domestic violence, underage
  112  prostitution, and trafficking in human beings, and
  113         WHEREAS, Cuba is on the United States Department of State’s
  114  list of State Sponsors of Terrorism, and for nearly half a
  115  century the United States has unilaterally imposed an economic,
  116  commercial, and financial embargo against Cuba, and
  117         WHEREAS, the embargo, partially imposed on Cuba in October
  118  1960, was enacted after Cuba nationalized the properties of
  119  United States citizens and corporations and it was strengthened
  120  to a near-total embargo on February 7, 1962, and
  121         WHEREAS, though the severity and the scope of the sanctions
  122  have varied, depending upon political developments in Cuba, the
  123  United States, and the rest of the world, the United States
  124  Government Accountability Office has stated that “the embargo on
  125  Cuba is the most comprehensive set of United States sanctions on
  126  any country, including other countries designated by the United
  127  States Government to be state sponsors of terrorism,” and	
  128         WHEREAS, also on the Department of State’s list of State
  129  Sponsors of Terrorism is the nation of Syria, and
  130         WHEREAS, on March 8, 1963, the Baath Party in Syria enacted
  131  an emergency law that suspended basic constitutional rights such
  132  as freedom of speech and assembly and instituted martial law,
  133  and
  134         WHEREAS, in February 1982, the Syrian army, under the
  135  orders of Syrian President Hafez al-Assad, effectively ended a
  136  campaign begun in 1976 by Sunni Islamic groups against the Assad
  137  regime with what is now known as “the Hama massacre,” the
  138  quelling of a revolt by the Sunni Muslim community against the
  139  Assad regime which resulted in Syrian deaths, the estimates of
  140  which range from 10,000 to possibly as many as 40,000 Syrian
  141  citizens according to the Syrian Human Rights Committee, and
  142         WHEREAS, the Hama massacre has been described as being
  143  among “the single deadliest acts by any Arab government against
  144  its own people in the Middle East,” and
  145         WHEREAS, in 2011 the “Syrian uprising” began in that
  146  country, and
  147         WHEREAS, the Syrian uprising is an ongoing internal
  148  conflict occurring in Syria which began with protests that
  149  started on January 26, 2011, and then escalated to an uprising
  150  by March 15, 2011, and
  151         WHEREAS, the demands of protesters in this sustained
  152  campaign of civil resistance include the allowance by the ruling
  153  Baath Party of other political parties, the end of President
  154  Bashar al-Assad’s presidency, equal rights for Kurds, and broad
  155  political freedoms such as freedom of the press, free speech,
  156  and freedom to assemble, and
  157         WHEREAS, as protests continued, the Syrian government used
  158  tanks and snipers to force Syrian citizens off the streets,
  159  water and electricity were shut off, and security forces began
  160  confiscating flour and food in various areas of the country, and
  161         WHEREAS, violence escalated as the crisis wore on and as a
  162  result more than 3,000 people were killed, many more were
  163  injured, and thousands of protesters have been detained, with
  164  dozens of detainees reportedly having been tortured and killed,
  165  and
  166         WHEREAS, since the beginning of the uprising, the Syrian
  167  government has made several concessions, including the repeal on
  168  April 21, 2011, of the 1963 emergency law that allowed the
  169  government sweeping authority to suspend constitutional rights,
  170  though the concessions are widely considered trivial and
  171  superficial by protesters demanding more meaningful reform,
  172  especially in light of the fact that government crackdowns on
  173  protesters have continued to heighten, and
  174         WHEREAS, the oppressive Assad regime blatantly murders
  175  protesters of the regime in mass, regularly detains political
  176  and human rights activists and journalists, engages in
  177  widespread media censorship, and is associated with the
  178  disappearance of citizens opposed to the Assad regime, and
  179         WHEREAS, the United States Government and other nations
  180  throughout the world have openly called for President Assad to
  181  step down from office, and
  182         WHEREAS, effective August 18, 2011, President Barack Obama
  183  issued a new Executive Order imposing significant new economic
  184  sanctions on Syria, and
  185         WHEREAS, the action greatly expanded United States
  186  international trade restrictions against Syria and its
  187  government in certain important respects, representing a more
  188  comprehensive unilateral economic embargo, and
  189         WHEREAS, most notably, the sanctions now include a freeze
  190  on the property and interests of property of the Government of
  191  Syria in the United States or held by United States persons,
  192  defined to include entities in the United States and their
  193  foreign branch offices, United States citizens or lawful
  194  permanent residents, and anyone of any nationality acting or
  195  located within the United States, and
  196         WHEREAS, the sanctions include prohibitions on United
  197  States persons engaging in any transactions with the Syrian
  198  Government, making new investments in Syria, providing any
  199  services to Syria, or conducting business dealings in or related
  200  to petroleum or petroleum products of Syrian origin, and
  201         WHEREAS, the sanctions also include a ban on the
  202  importation of Syrian-origin petroleum products into the United
  203  States and a prohibition against United States persons
  204  facilitating, approving, financing, or guaranteeing a
  205  transaction or dealing with a foreign person related to any of
  206  the prohibitions in place against Syria, and
  207         WHEREAS, both the Government of Cuba and the Government of
  208  Syria have repeatedly committed human rights violations through
  209  intimidation by military and security forces, through
  210  bureaucratic and administrative obstruction, through acts of
  211  terrorism and atrocities directed against civilians, and through
  212  the displacement of citizens from their homes, and
  213         WHEREAS, the Federal Government has imposed sanctions
  214  against the Government of Cuba and the Government of Syria, and
  215  such sanctions are monitored through the United States Treasury
  216  Department’s Office of Foreign Assets Control (OFAC), and
  217         WHEREAS, according to a former chair of the United States
  218  Securities and Exchange Commission, the fact that a foreign
  219  company is doing material business with a country, government,
  220  or entity on OFAC’s sanctions list is, in the SEC staff’s view,
  221  substantially likely to be significant to a reasonable
  222  investor’s decision about whether to invest in that company, and
  223         WHEREAS, because the United States Secretary of State has
  224  determined that both Cuba and Syria are countries whose
  225  governments have provided support for acts of international
  226  terrorism, as a result, the United States has restricted
  227  assistance, defense exports, defense sales, financial
  228  transactions, and various other transactions with the Government
  229  of Cuba and the Government of Syria, and
  230         WHEREAS, a 2006 report by the United States House of
  231  Representatives states that “a company’s association with
  232  sponsors of terrorism and human rights abuses, no matter how
  233  large or small, can have a materially adverse result on a public
  234  company’s operations, financial condition, earnings, and stock
  235  prices, all of which can negatively affect the value of an
  236  investment,” and
  237         WHEREAS, in response to the financial risk posed by
  238  investments in companies doing business with a state that
  239  sponsors terrorists, the Securities and Exchange Commission
  240  established its Office of Global Security Risk to provide for
  241  enhanced disclosure of material information regarding such
  242  companies, and
  243         WHEREAS, divestment actions precipitated by such
  244  sponsorship of terrorism and human rights violations encompass
  245  universities, municipalities, states, and private pension plans,
  246  and
  247         WHEREAS, companies facing such widespread divestment
  248  present further material risk to remaining investors, and
  249         WHEREAS, it is a fundamental responsibility of the State of
  250  Florida to decide where, how, and by whom financial resources in
  251  its control should be invested, taking into account numerous
  252  pertinent factors, and
  253         WHEREAS, it is the prerogative and desire of the State of
  254  Florida, with respect to investment resources in its control and
  255  to the extent reasonable, with due consideration for return on
  256  investment on behalf of the state and its investment
  257  beneficiaries, not to participate in an ownership or capital
  258  providing capacity with entities that provide significant
  259  practical support for terrorism and human rights violations,
  260  including certain non-United States companies presently doing
  261  business in such countries, and
  262         WHEREAS, while divestiture should be considered with the
  263  intent to improve investment performance and by the rules of
  264  prudence, fiduciaries must take into account all relevant
  265  substantive factors in arriving at an investment decision, and
  266         WHEREAS, the State of Florida is deeply concerned about
  267  investments in publicly traded companies that have business
  268  activities in and ties to Cuba and Syria as a financial risk to
  269  the shareholders, and
  270         WHEREAS, by investing in publicly traded companies having
  271  ties to Cuba and Syria, the Florida State Board of
  272  Administration is putting the funds it oversees at substantial
  273  financial risk, and
  274         WHEREAS, divestiture from markets that are vulnerable to
  275  embargo, loan restrictions, and sanctions from the United States
  276  and the international community, including the United Nations
  277  Security Council, is in accordance with the rules of prudence,
  278  and
  279         WHEREAS, the Legislature finds that this act should remain
  280  in effect only insofar as it continues to be consistent with and
  281  does not unduly interfere with the foreign policy of the United
  282  States as determined by the Federal Government, and
  283         WHEREAS, to protect Florida’s assets, it is in the best
  284  interest of the state to enact a statutory prohibition regarding
  285  the investments managed by the State Board of Administration
  286  doing business in Cuba and Syria, NOW, THEREFORE,
  287  
  288  Be It Enacted by the Legislature of the State of Florida:
  289  
  290         Section 1. Section 215.473, Florida Statutes, is amended to
  291  read:
  292         215.473 Divestiture by the State Board of Administration;
  293  Sudan; Iran; Cuba; Syria.—
  294         (1) DEFINITIONS.—As used in this act, the term:
  295         (a) “Active business operations” means all business
  296  operations that are not inactive business operations.
  297         (b) “Business operations” means engaging in commerce in any
  298  form in Sudan, or Iran, Cuba, or Syria, including, but not
  299  limited to, acquiring, developing, maintaining, owning, selling,
  300  possessing, leasing, or operating equipment, facilities,
  301  personnel, products, services, personal property, real property,
  302  or any other apparatus of business or commerce.
  303         (c) “Company” means any sole proprietorship, organization,
  304  association, corporation, partnership, joint venture, limited
  305  partnership, limited liability partnership, limited liability
  306  company, or other entity or business association, including all
  307  wholly owned subsidiaries, majority-owned subsidiaries, parent
  308  companies, or affiliates of such entities or business
  309  associations, that exists for the purpose of making profit.
  310         (d) “Complicit” means taking actions during any preceding
  311  20-month period which have directly supported or promoted:
  312         1. The genocidal campaign in Darfur, including, but not
  313  limited to, preventing Darfur’s victimized population from
  314  communicating with each other;
  315         2. Encouraging Sudanese citizens to speak out against an
  316  internationally approved security force for Darfur;
  317         3. Actively working to deny, cover up, or alter the record
  318  on human rights abuses in Darfur; or
  319         4. Other similar actions.
  320         (e) “Cuba” means the nation of Cuba.
  321         (f)(e) “Direct holdings” in a company means all securities
  322  of that company that are held directly by the public fund or in
  323  an account or fund in which the public fund owns all shares or
  324  interests.
  325         (g) “Government of Cuba” means the government of Cuba,
  326  under the control of General Raul Castro and the Cuban Communist
  327  Party, its instrumentalities, and companies owned or controlled
  328  by the government of Cuba.
  329         (h)(f) “Government of Iran” means the government of Iran,
  330  its instrumentalities, and companies owned or controlled by the
  331  government of Iran.
  332         (i)(g) “Government of Sudan” means the government in
  333  Khartoum, Sudan, that is led by the National Congress Party,
  334  formerly known as the National Islamic Front, or any successor
  335  government formed on or after October 13, 2006, including the
  336  coalition National Unity Government agreed upon in the
  337  Comprehensive Peace Agreement for Sudan, and does not include
  338  the regional government of southern Sudan.
  339         (j) “Government of Syria” means the government of Syria,
  340  under the control of President Bashar al-Assad and the Arab
  341  Socialist Baath Party, its instrumentalities, and companies
  342  owned or controlled by the government of Syria.
  343         (k)(h) “Inactive business operations” means the mere
  344  continued holding or renewal of rights to property previously
  345  operated for the purpose of generating revenues but not
  346  presently deployed for such purpose.
  347         (l)(i) “Indirect holdings” in a company means all
  348  securities of that company that are held in an account or fund,
  349  such as a mutual fund, managed by one or more persons not
  350  employed by the public fund, in which the public fund owns
  351  shares or interests together with other investors not subject to
  352  the provisions of this act.
  353         (m)(j) “Iran” means the Islamic Republic of Iran.
  354         (n)(k) “Marginalized populations of Sudan” include, but are
  355  not limited to, the portion of the population in the Darfur
  356  region that has been genocidally victimized; the portion of the
  357  population of southern Sudan victimized by Sudan’s north-south
  358  civil war; the Beja, Rashidiya, and other similarly underserved
  359  groups of eastern Sudan; the Nubian and other similarly
  360  underserved groups in Sudan’s Abyei, Southern Blue Nile, and
  361  Nuba Mountain regions; and the Amri, Hamadab, Manasir, and other
  362  similarly underserved groups of northern Sudan.
  363         (o)(l) “Military equipment” means weapons, arms, military
  364  supplies, and equipment that may readily be used for military
  365  purposes, including, but not limited to, radar systems,
  366  military-grade transport vehicles, or supplies or services sold
  367  or provided directly or indirectly to any force actively
  368  participating in armed conflict in Sudan, Cuba, or Syria.
  369         (p)(m) “Mineral-extraction activities” include the
  370  exploring, extracting, processing, transporting, or wholesale
  371  selling or trading of elemental minerals or associated metal
  372  alloys or oxides (ore), including gold, copper, chromium,
  373  chromite, diamonds, iron, iron ore, silver, tungsten, uranium,
  374  and zinc, as well as facilitating such activities, including
  375  providing supplies or services in support of such activities.
  376         (q)(n) “Oil-related activities” include, but are not
  377  limited to, owning rights to oil blocks; exporting, extracting,
  378  producing, refining, processing, exploring for, transporting,
  379  selling, or trading of oil; constructing, maintaining, or
  380  operating a pipeline, refinery, or other oil-field
  381  infrastructure; and facilitating such activities, including
  382  providing supplies or services in support of such activities,
  383  except that the mere retail sale of gasoline and related
  384  consumer products is not considered an oil-related activity.
  385         (r)(o) “Petroleum resources” means petroleum, petroleum
  386  byproducts, or natural gas.
  387         (s)(p) “Power-production activities” means any business
  388  operation that involves a project commissioned by the National
  389  Electricity Corporation (NEC) of Sudan or other similar entity
  390  of the government of Sudan whose purpose is to facilitate power
  391  generation and delivery, including, but not limited to,
  392  establishing power-generating plants or hydroelectric dams,
  393  selling or installing components for the project, providing
  394  service contracts related to the installation or maintenance of
  395  the project, as well as facilitating such activities, including
  396  providing supplies or services in support of such activities.
  397         (t)(q) “Public fund” means all funds, assets, trustee, and
  398  other designates under the State Board of Administration
  399  pursuant to chapter 121.
  400         (u)(r) “Scrutinized active business operations” means
  401  active business operations that have resulted in a company
  402  becoming a scrutinized company.
  403         (v)(s) “Scrutinized business operations” means business
  404  operations that have resulted in a company becoming a
  405  scrutinized company.
  406         (w)(t) “Scrutinized company” means any company that meets
  407  any of the following criteria:
  408         1. The company has business operations that involve
  409  contracts with or provision of supplies or services to the
  410  government of Sudan, companies in which the government of Sudan
  411  has any direct or indirect equity share, consortiums or projects
  412  commissioned by the government of Sudan, or companies involved
  413  in consortiums or projects commissioned by the government of
  414  Sudan, and:
  415         a. More than 10 percent of the company’s revenues or assets
  416  linked to Sudan involve oil-related activities or mineral
  417  extraction activities; less than 75 percent of the company’s
  418  revenues or assets linked to Sudan involve contracts with or
  419  provision of oil-related or mineral-extracting products or
  420  services to the regional government of southern Sudan or a
  421  project or consortium created exclusively by that regional
  422  government; and the company has failed to take substantial
  423  action; or
  424         b. More than 10 percent of the company’s revenues or assets
  425  linked to Sudan involve power-production activities; less than
  426  75 percent of the company’s power-production activities include
  427  projects whose intent is to provide power or electricity to the
  428  marginalized populations of Sudan; and the company has failed to
  429  take substantial action.
  430         2. The company is complicit in the Darfur genocide.
  431         3. The company supplies military equipment within Sudan,
  432  unless it clearly shows that the military equipment cannot be
  433  used to facilitate offensive military actions in Sudan or the
  434  company implements rigorous and verifiable safeguards to prevent
  435  use of that equipment by forces actively participating in armed
  436  conflict. Examples of safeguards include post-sale tracking of
  437  such equipment by the company, certification from a reputable
  438  and objective third party that such equipment is not being used
  439  by a party participating in armed conflict in Sudan, or sale of
  440  such equipment solely to the regional government of southern
  441  Sudan or any internationally recognized peacekeeping force or
  442  humanitarian organization.
  443         4. The company has business operations that involve
  444  contracts with or provision of supplies or services to the
  445  government of Iran, companies in which the government of Iran
  446  has any direct or indirect equity share, consortiums, or
  447  projects commissioned by the government of Iran, or companies
  448  involved in consortiums or projects commissioned by the
  449  government of Iran and:
  450         a. More than 10 percent of the company’s total revenues or
  451  assets are linked to Iran and involve oil-related activities or
  452  mineral-extraction activities; and the company has failed to
  453  take substantial action; or
  454         b. The company has, with actual knowledge, on or after
  455  August 5, 1996, made an investment of $20 million or more, or
  456  any combination of investments of at least $10 million each,
  457  which in the aggregate equals or exceeds $20 million in any 12
  458  month period, and which directly or significantly contributes to
  459  the enhancement of Iran’s ability to develop the petroleum
  460  resources of Iran.
  461         5. The company has business operations that involve
  462  contracts with or provision of supplies or services to the
  463  government of Cuba, companies in which the government of Cuba
  464  has any direct or indirect equity share, consortiums or projects
  465  commissioned by the government of Cuba, or companies involved in
  466  consortiums or projects commissioned by the government of Cuba
  467  and:
  468         a. More than 10 percent of the company’s total revenues or
  469  assets are linked to Cuba, and the company has failed to take
  470  substantial action; or
  471         b. The company has, with actual knowledge, on or after
  472  January 1, 1959, made an investment of $20 million or more, or
  473  any combination of investments of at least $10 million each,
  474  which in the aggregate equals or exceeds $20 million in any 12
  475  month period.
  476         6. The company supplies military equipment within Cuba,
  477  unless it clearly shows that the military equipment cannot be
  478  used to facilitate offensive military actions in Cuba or the
  479  company implements rigorous and verifiable safeguards to prevent
  480  use of that equipment by forces actively participating in armed
  481  conflict. Examples of safeguards include post-sale tracking of
  482  such equipment by the company, certification from a reputable
  483  and objective third party that such equipment is not being used
  484  by a party participating in armed conflict in Cuba, or sale of
  485  such equipment solely to any internationally recognized
  486  peacekeeping force or humanitarian organization.
  487         7. The company has business operations that involve
  488  contracts with or provision of supplies or services to the
  489  government of Syria, companies in which the government of Syria
  490  has any direct or indirect equity share, consortiums or projects
  491  commissioned by the government of Syria, or companies involved
  492  in consortiums or projects commissioned by the government of
  493  Syria and:
  494         a. More than 10 percent of the company’s total revenues or
  495  assets are linked to Syria and involve oil-related activities,
  496  and the company has failed to take substantial action; or
  497         b. The company has, with actual knowledge, on or after
  498  March 8, 1963, made an investment of $20 million or more, or any
  499  combination of investments of at least $10 million each, which
  500  in the aggregate equals or exceeds $20 million in any 12-month
  501  period, and which directly or significantly contributes to the
  502  enhancement of Syria’s ability to develop the petroleum
  503  resources of Syria.
  504         8. The company supplies military equipment within Syria,
  505  unless it clearly shows that the military equipment cannot be
  506  used to facilitate offensive military actions in Syria or the
  507  company implements rigorous and verifiable safeguards to prevent
  508  use of that equipment by forces actively participating in armed
  509  conflict. Examples of safeguards include post-sale tracking of
  510  such equipment by the company, certification from a reputable
  511  and objective third party that such equipment is not being used
  512  by a party participating in armed conflict in Syria, or sale of
  513  such equipment solely to any internationally recognized
  514  peacekeeping force or humanitarian organization.
  515         (x)(u) “Social-development company” means a company whose
  516  primary purpose in Sudan is to provide humanitarian goods or
  517  services, including medicine or medical equipment; agricultural
  518  supplies or infrastructure; educational opportunities;
  519  journalism-related activities; information or information
  520  materials; spiritual-related activities; services of a purely
  521  clerical or reporting nature; food, clothing, or general
  522  consumer goods that are unrelated to oil-related activities;
  523  mineral-extraction activities; or power-production activities.
  524         (y) “Substantial action specific to Cuba” means adopting,
  525  publicizing, and implementing a formal plan to cease scrutinized
  526  business operations within 1 year and to refrain from any such
  527  new business operations.
  528         (z)(v) “Substantial action specific to Iran” means
  529  adopting, publicizing, and implementing a formal plan to cease
  530  scrutinized business operations within 1 year and to refrain
  531  from any such new business operations.
  532         (aa)(w) “Substantial action specific to Sudan” means
  533  adopting, publicizing, and implementing a formal plan to cease
  534  scrutinized business operations within 1 year and to refrain
  535  from any such new business operations; undertaking humanitarian
  536  efforts in conjunction with an international organization, the
  537  government of Sudan, the regional government of southern Sudan,
  538  or a nonprofit entity evaluated and certified by an independent
  539  third party to be substantially in a relationship to the
  540  company’s Sudan business operations and of benefit to one or
  541  more marginalized populations of Sudan; or, through engagement
  542  with the government of Sudan, materially improving conditions
  543  for the genocidally victimized population in Darfur.
  544         (bb) “Substantial action specific to Syria” means adopting,
  545  publicizing, and implementing a formal plan to cease scrutinized
  546  business operations within 1 year and to refrain from any such
  547  new business operations.
  548         (cc) “Syria” means the nation of Syria.
  549         (2) IDENTIFICATION OF COMPANIES.—
  550         (a) Within 90 days after the effective date of this act,
  551  the public fund shall make its best efforts to identify all
  552  scrutinized companies in which the public fund has direct or
  553  indirect holdings or could possibly have such holdings in the
  554  future. Such efforts include:
  555         1. Reviewing and relying, as appropriate in the public
  556  fund’s judgment, on publicly available information regarding
  557  companies having business operations in Sudan, including
  558  information provided by nonprofit organizations, research firms,
  559  international organizations, and government entities;
  560         2. Contacting asset managers contracted by the public fund
  561  that invest in companies having business operations in Sudan; or
  562         3. Contacting other institutional investors that have
  563  divested from or engaged with companies that have business
  564  operations in Sudan.
  565         4. Reviewing the laws of the United States regarding the
  566  levels of business activity that would cause application of
  567  sanctions for companies conducting business or investing in
  568  countries that are designated state sponsors of terror.
  569         (b) By the first meeting of the public fund following the
  570  90-day period described in paragraph (a), the public fund shall
  571  assemble all scrutinized companies that fit criteria specified
  572  in subparagraphs (1)(w)1., 2., and 3. (1)(t)1., 2., and 3. into
  573  a “Scrutinized Companies with Activities in Sudan List,and
  574  shall assemble all scrutinized companies that fit criteria
  575  specified in subparagraph (1)(w)4. (1)(t)4. into a “Scrutinized
  576  Companies with Activities in the Iran Petroleum Energy Sector
  577  List,.shall assemble all scrutinized companies that fit
  578  criteria specified in subparagraphs (1)(w)5. and 6. into a
  579  “Scrutinized Companies with Activities in Cuba List,” and shall
  580  assemble all scrutinized companies that fit criteria specified
  581  in subparagraphs (1)(w)7. and 8. into a “Scrutinized Companies
  582  with Activities in Syria List.”
  583         (c) The public fund shall update and make publicly
  584  available quarterly the Scrutinized Companies with Activities in
  585  Sudan List, and the Scrutinized Companies with Activities in the
  586  Iran Petroleum Energy Sector List, the Scrutinized Companies
  587  with Activities in Cuba List, and the Scrutinized Companies with
  588  Activities in Syria List based on evolving information from,
  589  among other sources, those listed in paragraph (a).
  590         (d) Notwithstanding the provisions of this act, a social
  591  development company that is not complicit in the Darfur genocide
  592  is not considered a scrutinized company under subparagraph
  593  (1)(w)1. (1)(t)1., subparagraph (1)(w)2. (1)(t)2., or
  594  subparagraph (1)(w)3. (1)(t)3.
  595         (3) REQUIRED ACTIONS.—The public fund shall adhere to the
  596  following procedure for assembling companies on the Scrutinized
  597  Companies with Activities in Sudan List, and the Scrutinized
  598  Companies with Activities in the Iran Petroleum Energy Sector
  599  List, the Scrutinized Companies with Activities in Cuba List,
  600  and the Scrutinized Companies with Activities in Syria List:
  601         (a) Engagement.—
  602         1. The public fund shall immediately determine the
  603  companies on the Scrutinized Companies with Activities in Sudan
  604  List, and the Scrutinized Companies with Activities in the Iran
  605  Petroleum Energy Sector List, the Scrutinized Companies with
  606  Activities in Cuba List, and the Scrutinized Companies with
  607  Activities in Syria List in which the public fund owns direct or
  608  indirect holdings.
  609         2. For each company identified in this paragraph that has
  610  only inactive business operations, the public fund shall send a
  611  written notice informing the company of this act and encouraging
  612  it to continue to refrain from initiating active business
  613  operations in Sudan, or Iran, Cuba, or Syria until it is able to
  614  avoid scrutinized business operations. The public fund shall
  615  continue such correspondence semiannually.
  616         3. For each company newly identified under this paragraph
  617  that has active business operations, the public fund shall send
  618  a written notice informing the company of its scrutinized
  619  company status and that it may become subject to divestment by
  620  the public fund. The notice must inform the company of the
  621  opportunity to clarify its Sudan-related, or Iran-related, Cuba
  622  related, or Syria-related activities and encourage the company,
  623  within 90 days, to cease its scrutinized business operations or
  624  convert such operations to inactive business operations in order
  625  to avoid qualifying for divestment by the public fund.
  626         4. If, within 90 days after the public fund’s first
  627  engagement with a company pursuant to this paragraph, that
  628  company ceases scrutinized business operations, the company
  629  shall be removed from the Scrutinized Companies with Activities
  630  in Sudan List, and the Scrutinized Companies with Activities in
  631  the Iran Petroleum Energy Sector List, the Scrutinized Companies
  632  with Activities in Cuba List, and the Scrutinized Companies with
  633  Activities in Syria List, and the provisions of this act shall
  634  cease to apply to that company unless that company resumes
  635  scrutinized business operations. If, within 90 days after the
  636  public fund’s first engagement, the company converts its
  637  scrutinized active business operations to inactive business
  638  operations, the company is subject to all provisions relating to
  639  inactive business operations. A company may be removed from one
  640  list but remain on the other list, in which case the company
  641  shall be subject to the provisions applicable to the list on
  642  which the company remains.
  643         (b) Divestment.—
  644         1. If, after 90 days following the public fund’s first
  645  engagement with a company pursuant to paragraph (a), the company
  646  continues to have scrutinized active business operations, and
  647  only while such company continues to have scrutinized active
  648  business operations, the public fund shall sell, redeem, divest,
  649  or withdraw all publicly traded securities of the company,
  650  except as provided in paragraph (d), from the public fund’s
  651  assets under management within 12 months after the company’s
  652  most recent appearance on the Scrutinized Companies with
  653  Activities in Sudan List, or on the Scrutinized Companies with
  654  Activities in the Iran Petroleum Energy Sector List, the
  655  Scrutinized Companies with Activities in Cuba List, or the
  656  Scrutinized Companies with Activities in Syria List.
  657         2. If a company that ceased scrutinized active business
  658  operations following engagement pursuant to paragraph (a)
  659  resumes such operations, this paragraph immediately applies, and
  660  the public fund shall send a written notice to the company. The
  661  company shall also be immediately reintroduced onto the
  662  Scrutinized Companies with Activities in Sudan List, or on the
  663  Scrutinized Companies with Activities in the Iran Petroleum
  664  Energy Sector List, the Scrutinized Companies with Activities in
  665  Cuba List, or the Scrutinized Companies with Activities in Syria
  666  List, as applicable.
  667         (c) Prohibition.—The public fund may not acquire securities
  668  of companies on the Scrutinized Companies with Activities in
  669  Sudan List, or the Scrutinized Companies with Activities in the
  670  Iran Petroleum Energy Sector List, the Scrutinized Companies
  671  with Activities in Cuba List, or the Scrutinized Companies with
  672  Activities in Syria List that have active business operations,
  673  except as provided in paragraph (d).
  674         (d) Exemption.—A company that the United States Government
  675  affirmatively declares to be excluded from its present or any
  676  future federal sanctions regime relating to Sudan, or Iran,
  677  Cuba, or Syria is not subject to divestment or the investment
  678  prohibition pursuant to paragraphs (b) and (c).
  679         (e) Excluded securities.—Notwithstanding the provisions of
  680  this act, paragraphs (b) and (c) do not apply to indirect
  681  holdings in actively managed investment funds. However, the
  682  public fund shall submit letters to the managers of such
  683  investment funds containing companies that have scrutinized
  684  active business operations requesting that they consider
  685  removing such companies from the fund or create a similar
  686  actively managed fund having indirect holdings devoid of such
  687  companies. If the manager creates a similar fund, the public
  688  fund shall replace all applicable investments with investments
  689  in the similar fund in an expedited timeframe consistent with
  690  prudent investing standards. For the purposes of this section, a
  691  private equity fund is deemed to be an actively managed
  692  investment fund.
  693         (f) Further exclusions.—Notwithstanding any other provision
  694  of this act, the public fund, when discharging its
  695  responsibility for operation of a defined contribution plan,
  696  shall engage the manager of the investment offerings in such
  697  plans requesting that they consider removing scrutinized
  698  companies from the investment offerings or create an alternative
  699  investment offering devoid of scrutinized companies. If the
  700  manager creates an alternative investment offering and the
  701  offering is deemed by the public fund to be consistent with
  702  prudent investor standards, the public fund shall consider
  703  including such investment offering in the plan.
  704         (4) REPORTING.—
  705         (a) The public fund shall file a report with each member of
  706  the Board of Trustees of the State Board of Administration, the
  707  President of the Senate, and the Speaker of the House of
  708  Representatives that includes the Scrutinized Companies with
  709  Activities in Sudan List, and the Scrutinized Companies with
  710  Activities in the Iran Petroleum Energy Sector List, the
  711  Scrutinized Companies with Activities in Cuba List, and the
  712  Scrutinized Companies with Activities in Syria List within 30
  713  days after the list is created. This report shall be made
  714  available to the public.
  715         (b) At each quarterly meeting of the Board of Trustees
  716  thereafter, the public fund shall file a report, which shall be
  717  made available to the public and to each member of the Board of
  718  Trustees of the State Board of Administration, the President of
  719  the Senate, and the Speaker of the House of Representatives, and
  720  send a copy of that report to the United States Presidential
  721  Special Envoy to Sudan, and the United States Presidential
  722  Special Envoy to Iran, the United States Presidential Special
  723  Envoy to Cuba, and the United States Presidential Special Envoy
  724  to Syria, or an appropriate designee or successor, which
  725  includes:
  726         1. A summary of correspondence with companies engaged by
  727  the public fund under subparagraphs (3)(a)2. and 3.;
  728         2. All investments sold, redeemed, divested, or withdrawn
  729  in compliance with paragraph (3)(b);
  730         3. All prohibited investments under paragraph (3)(c);
  731         4. Any progress made under paragraph (3)(e); and
  732         5. A list of all publicly traded securities held directly
  733  by this state.
  734         (5) EXPIRATION.—This act expires upon the occurrence of all
  735  of the following:
  736         (a) If any of the following occur, the public fund shall no
  737  longer scrutinize companies according to subparagraphs (1)(w)1.,
  738  2., and 3. (1)(t)1., 2., and 3. and shall no longer assemble the
  739  Scrutinized Companies with Activities in Sudan List, shall cease
  740  engagement and divestment of such companies, and may reinvest in
  741  such companies as long as such companies do not satisfy the
  742  criteria for inclusion in the Scrutinized Companies with
  743  Activities in the Iran Petroleum Energy Sector List, the
  744  Scrutinized Companies with Activities in Cuba List, or the
  745  Scrutinized Companies with Activities in Syria List:
  746         1. The Congress or President of the United States,
  747  affirmatively and unambiguously states, by means including, but
  748  not limited to, legislation, executive order, or written
  749  certification from the President to Congress, that the Darfur
  750  genocide has been halted for at least 12 months;
  751         2. The United States revokes all sanctions imposed against
  752  the government of Sudan;
  753         3. The Congress or President of the United States
  754  affirmatively and unambiguously states, by means including, but
  755  not limited to, legislation, executive order, or written
  756  certification from the President to Congress, that the
  757  government of Sudan has honored its commitments to cease attacks
  758  on civilians, demobilize and demilitarize the Janjaweed and
  759  associated militias, grant free and unfettered access for
  760  deliveries of humanitarian assistance, and allow for the safe
  761  and voluntary return of refugees and internally displaced
  762  persons; or
  763         4. The Congress or President of the United States
  764  affirmatively and unambiguously states, by means including, but
  765  not limited to, legislation, executive order, or written
  766  certification from the President to Congress, that mandatory
  767  divestment of the type provided for in this act interferes with
  768  the conduct of United States foreign policy.
  769         (b) If any of the following occur, the public fund shall no
  770  longer scrutinize companies according to subparagraph (1)(w)4.
  771  (1)(t)4. and shall no longer assemble the Scrutinized Companies
  772  with Activities in the Iran Petroleum Energy Sector List and
  773  shall cease engagement, investment prohibitions, and divestment.
  774  The public fund may reinvest in such companies as long as such
  775  companies do not satisfy the criteria for inclusion in the
  776  Scrutinized Companies with Activities in Sudan List, the
  777  Scrutinized Companies with Activities in Cuba List, or the
  778  Scrutinized Companies with Activities in Syria List:
  779         1. The Congress or President of the United States
  780  affirmatively and unambiguously states, by means including, but
  781  not limited to, legislation, executive order, or written
  782  certification from the President to Congress, that the
  783  government of Iran has ceased to acquire weapons of mass
  784  destruction and support international terrorism;
  785         2. The United States revokes all sanctions imposed against
  786  the government of Iran; or
  787         3. The Congress or President of the United States
  788  affirmatively and unambiguously declares, by means including,
  789  but not limited to, legislation, executive order, or written
  790  certification from the President to Congress, that mandatory
  791  divestment of the type provided for in this act interferes with
  792  the conduct of United States foreign policy.
  793         (c) If any of the following occur, the public fund shall no
  794  longer scrutinize companies according to subparagraphs (1)(w)5.
  795  and 6. and shall no longer assemble the Scrutinized Companies
  796  with Activities in Cuba List and shall cease engagement,
  797  investment prohibitions, and divestment. The public fund may
  798  reinvest in such companies as long as such companies do not
  799  satisfy the criteria for inclusion in the Scrutinized Companies
  800  with Activities in Sudan List, the Scrutinized Companies with
  801  Activities in the Iran Petroleum Energy Sector List, or the
  802  Scrutinized Companies with Activities in Syria List:
  803         1. The Congress or President of the United States
  804  affirmatively and unambiguously states, by means including, but
  805  not limited to, legislation, executive order, or written
  806  certification from the President to Congress, that the
  807  government of Cuba has ceased to acquire weapons of mass
  808  destruction and support international terrorism;
  809         2. The United States revokes all sanctions imposed against
  810  the government of Cuba; or
  811         3. The Congress or President of the United States
  812  affirmatively and unambiguously declares, by means including,
  813  but not limited to, legislation, executive order, or written
  814  certification from the President to Congress, that mandatory
  815  divestment of the type provided for in this act interferes with
  816  the conduct of United States foreign policy.
  817         (d) If any of the following occur, the public fund shall no
  818  longer scrutinize companies according to subparagraphs (1)(w)7.
  819  and 8. and shall no longer assemble the Scrutinized Companies
  820  with Activities in Syria List and shall cease engagement,
  821  investment prohibitions, and divestment. The public fund may
  822  reinvest in such companies as long as such companies do not
  823  satisfy the criteria for inclusion in the Scrutinized Companies
  824  with Activities in Sudan List, the Scrutinized Companies with
  825  Activities in the Iran Petroleum Energy Sector List, or the
  826  Scrutinized Companies with Activities in Cuba List:
  827         1. The Congress or President of the United States
  828  affirmatively and unambiguously states, by means including, but
  829  not limited to, legislation, executive order, or written
  830  certification from the President to Congress, that the
  831  government of Cuba has ceased to acquire weapons of mass
  832  destruction and support international terrorism;
  833         2. The United States revokes all sanctions imposed against
  834  the government of Syria; or
  835         3. The Congress or President of the United States
  836  affirmatively and unambiguously declares, by means including,
  837  but not limited to, legislation, executive order, or written
  838  certification from the President to Congress, that mandatory
  839  divestment of the type provided for in this act interferes with
  840  the conduct of United States foreign policy.
  841         (6) INVESTMENT POLICY STATEMENT OBLIGATIONS.—The public
  842  fund’s actions taken in compliance with this act, including all
  843  good faith determinations regarding companies as required by
  844  this act, shall be adopted and incorporated into the public
  845  fund’s investment policy statement (the IPS) as set forth in s.
  846  215.475.
  847         (7) REINVESTMENT IN CERTAIN COMPANIES HAVING SCRUTINIZED
  848  ACTIVE BUSINESS OPERATIONS.—Notwithstanding any other provision
  849  of this act to the contrary, the public fund may cease divesting
  850  from certain scrutinized companies pursuant to paragraph (3)(b)
  851  or reinvest in certain scrutinized companies from which it
  852  divested pursuant to paragraph (3)(b) if clear and convincing
  853  evidence shows that the value of all assets under management by
  854  the public fund becomes equal to or less than 99.50 percent, or
  855  50 basis points, of the hypothetical value of all assets under
  856  management by the public fund assuming no divestment for any
  857  company had occurred under paragraph (3)(b). Cessation of
  858  divestment, reinvestment, or any subsequent ongoing investment
  859  authorized by this act is limited to the minimum steps necessary
  860  to avoid the contingency set forth in this subsection or that no
  861  divestment of any company is required for less than fair value.
  862  For any cessation of divestment, reinvestment, or subsequent
  863  ongoing investment authorized by this act, the public fund shall
  864  provide a written report to each member of the Board of Trustees
  865  of the State Board of Administration, the President of the
  866  Senate, and the Speaker of the House of Representatives in
  867  advance of initial reinvestment, updated semiannually thereafter
  868  as applicable, setting forth the reasons and justification,
  869  supported by clear and convincing evidence, for its decisions to
  870  cease divestment, reinvest, or remain invested in companies
  871  having scrutinized active business operations. This act does not
  872  apply to reinvestment in companies on the grounds that they have
  873  ceased to have scrutinized active business operations.
  874         Section 2. Section 287.135, Florida Statutes, is amended to
  875  read:
  876         287.135 Prohibition against contracting with scrutinized
  877  companies.—
  878         (1) In addition to the terms defined in ss. 287.012 and
  879  215.473, as used in this section, the term:
  880         (a) “Awarding body” means, for purposes of state contracts,
  881  an agency or the department, and for purposes of local
  882  contracts, the governing body of the local governmental entity.
  883         (b) “Local governmental entity” means a county,
  884  municipality, special district, or other political subdivision
  885  of the state.
  886         (2) A company that, at the time of bidding or submitting a
  887  proposal for a new contract or renewal of an existing contract,
  888  is on the Scrutinized Companies with Activities in Sudan List,
  889  or the Scrutinized Companies with Activities in the Iran
  890  Petroleum Energy Sector List, the Scrutinized Companies with
  891  Activities in Cuba List, or the Scrutinized Companies with
  892  Activities in Syria List, created pursuant to s. 215.473, is
  893  ineligible for, and may not bid on, submit a proposal for, or
  894  enter into or renew a contract with an agency or local
  895  governmental entity for goods or services of $1 million or more.
  896         (3)(a) Any contract with an agency or local governmental
  897  entity for goods or services of $1 million or more entered into
  898  or renewed on or after July 1, 2011, through June 30, 2012, must
  899  contain a provision that allows for the termination of such
  900  contract at the option of the awarding body if the company is
  901  found to have submitted a false certification as provided under
  902  subsection (5) or been placed on the Scrutinized Companies with
  903  Activities in Sudan List or the Scrutinized Companies with
  904  Activities in the Iran Petroleum Energy Sector List.
  905         (b) Any contract with an agency or local governmental
  906  entity for goods or services of $1 million or more entered into
  907  or renewed on or after July 1, 2012, must contain a provision
  908  that allows for the termination of such contract at the option
  909  of the awarding body if the company is found to have submitted a
  910  false certification as provided under subsection (5) or been
  911  placed on the Scrutinized Companies with Activities in Sudan
  912  List, the Scrutinized Companies with Activities in the Iran
  913  Petroleum Energy Sector List, the Scrutinized Companies with
  914  Activities in Cuba List, or the Scrutinized Companies with
  915  Activities in Syria List.
  916         (4) Notwithstanding subsection (2) or subsection (3), an
  917  agency or local governmental entity, on a case-by-case basis,
  918  may permit a company on the Scrutinized Companies with
  919  Activities in Sudan List, or the Scrutinized Companies with
  920  Activities in the Iran Petroleum Energy Sector List, the
  921  Scrutinized Companies with Activities in Cuba List, or the
  922  Scrutinized Companies with Activities in Syria List to be
  923  eligible for, bid on, submit a proposal for, or enter into or
  924  renew a contract for goods or services of $1 million or more
  925  under either of the following conditions set forth in paragraph
  926  (a) or the conditions set forth in paragraph (b):
  927         (a)1. With respect to a company on the Scrutinized
  928  Companies with Activities in Sudan List or the Scrutinized
  929  Companies with Activities in the Iran Petroleum Energy Sector
  930  List, all of the following occur:
  931         a.1. The scrutinized business operations were made before
  932  July 1, 2011.
  933         b.2. The scrutinized business operations have not been
  934  expanded or renewed after July 1, 2011.
  935         c.3. The agency or local governmental entity determines
  936  that it is in the best interest of the state or local community
  937  to contract with the company.
  938         d.4. The company has adopted, has publicized, and is
  939  implementing a formal plan to cease scrutinized business
  940  operations and to refrain from engaging in any new scrutinized
  941  business operations.
  942         2. With respect to a company on the Scrutinized Companies
  943  with Activities in Cuba List or the Scrutinized Companies with
  944  Activities in Syria List, all of the following occur:
  945         a. The scrutinized business operations were made before
  946  July 1, 2012.
  947         b. The scrutinized business operations have not been
  948  expanded or renewed after July 1, 2012.
  949         c. The agency or local governmental entity determines that
  950  it is in the best interest of the state or local community to
  951  contract with the company.
  952         d. The company has adopted, has publicized, and is
  953  implementing a formal plan to cease scrutinized business
  954  operations and to refrain from engaging in any new scrutinized
  955  business operations.
  956         (b) One of the following occurs:
  957         1. The local governmental entity makes a public finding
  958  that, absent such an exemption, the local governmental entity
  959  would be unable to obtain the goods or services for which the
  960  contract is offered.
  961         2. For a contract with an executive agency, the Governor
  962  makes a public finding that, absent such an exemption, the
  963  agency would be unable to obtain the goods or services for which
  964  the contract is offered.
  965         3. For a contract with an office of a state constitutional
  966  officer other than the Governor, the state constitutional
  967  officer makes a public finding that, absent such an exemption,
  968  the office would be unable to obtain the goods or services for
  969  which the contract is offered.
  970         (5) At the time a company submits a bid or proposal for a
  971  contract or before the company enters into or renews a contract
  972  with an agency or governmental entity for goods or services of
  973  $1 million or more, the company must certify that the company is
  974  not on the Scrutinized Companies with Activities in Sudan List,
  975  or the Scrutinized Companies with Activities in the Iran
  976  Petroleum Energy Sector List, the Scrutinized Companies with
  977  Activities in Cuba List, or the Scrutinized Companies with
  978  Activities in Syria List.
  979         (a) If, after the agency or the local governmental entity
  980  determines, using credible information available to the public,
  981  that the company has submitted a false certification, the agency
  982  or local governmental entity shall provide the company with
  983  written notice of its determination. The company shall have 90
  984  days following receipt of the notice to respond in writing and
  985  to demonstrate that the determination of false certification was
  986  made in error. If the company does not make such demonstration
  987  within 90 days after receipt of the notice, the agency or the
  988  local governmental entity shall bring a civil action against the
  989  company. If a civil action is brought and the court determines
  990  that the company submitted a false certification, the company
  991  shall pay the penalty described in subparagraph 1. and all
  992  reasonable attorney attorney’s fees and costs, including any
  993  costs for investigations that led to the finding of false
  994  certification.
  995         1. A civil penalty equal to the greater of $2 million or
  996  twice the amount of the contract for which the false
  997  certification was submitted shall be imposed.
  998         2. The company is ineligible to bid on any contract with an
  999  agency or local governmental entity for 3 years after the date
 1000  the agency or local governmental entity determined that the
 1001  company submitted a false certification.
 1002         (b) A civil action to collect the penalties described in
 1003  paragraph (a) must commence within 3 years after the date the
 1004  false certification is submitted.
 1005         (6) Only the agency or local governmental entity that is a
 1006  party to the contract may cause a civil action to be brought
 1007  under this section. This section does not create or authorize a
 1008  private right of action or enforcement of the penalties provided
 1009  in this section. An unsuccessful bidder, or any other person
 1010  other than the agency or local governmental entity, may not
 1011  protest the award of a contract or contract renewal on the basis
 1012  of a false certification.
 1013         (7) This section preempts any ordinance or rule of any
 1014  agency or local governmental entity involving public contracts
 1015  for goods or services of $1 million or more with a company
 1016  engaged in scrutinized business operations.
 1017         (8) The department shall submit to the Attorney General of
 1018  the United States a written notice:
 1019         (a) Describing this section within 30 days after July 1,
 1020  2011.
 1021         (b) Within 30 days after July 1, 2012, apprising the
 1022  Attorney General of the United States of the inclusion of
 1023  companies on the Scrutinized Companies with Activities in Cuba
 1024  List and the Scrutinized Companies with Activities in Syria List
 1025  within the provisions of this section.
 1026         (9) This section becomes inoperative on the date that
 1027  federal law ceases to authorize the states to adopt and enforce
 1028  the contracting prohibitions of the type provided for in this
 1029  section.
 1030         Section 3. This act shall take effect July 1, 2012.