Florida Senate - 2016 COMMITTEE AMENDMENT
Bill No. CS for SB 86
Ì784986hÎ784986
LEGISLATIVE ACTION
Senate . House
Comm: RCS .
11/19/2015 .
.
.
.
—————————————————————————————————————————————————————————————————
—————————————————————————————————————————————————————————————————
The Committee on Appropriations (Negron) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Delete everything after the enacting clause
4 and insert:
5 Section 1. Section 215.4725, Florida Statutes, is created
6 to read:
7 215.4725 Prohibited investments by the State Board of
8 Administration; companies that boycott Israel.—
9 (1) DEFINITIONS.—As used in this section, the term:
10 (a) “Boycott Israel” or “boycott of Israel” means refusing
11 to deal, terminating business activities, or taking other
12 actions to limit commercial relations with Israel, or persons or
13 entities doing business in Israel or in Israeli-controlled
14 territories, in a discriminatory manner. A statement by a
15 company that it is participating in a boycott of Israel, or that
16 it has initiated a boycott in response to a request for a
17 boycott of Israel or in compliance with, or in furtherance of,
18 calls for a boycott of Israel, may be considered by the State
19 Board of Administration to be evidence that a company is
20 participating in a boycott of Israel. The term does not include
21 restrictive trade practices or boycotts fostered or imposed by
22 foreign countries against Israel.
23 (b) “Company” means a sole proprietorship, organization,
24 association, corporation, partnership, joint venture, limited
25 partnership, limited liability partnership, limited liability
26 company, or other entity or business association, including all
27 wholly owned subsidiaries, majority-owned subsidiaries, and
28 parent companies, that exists for the purpose of making profit.
29 (c) “Direct holdings” in a company means all securities of
30 that company that are held directly by the public fund or in an
31 account or fund in which the public fund owns all shares or
32 interests.
33 (d) “Indirect holdings” in a company means all securities
34 of that company that are held in a commingled fund or other
35 collective investment, such as a mutual fund, in which the
36 public fund owns shares or interests, together with other
37 investors not subject to this section or which are held in an
38 index fund.
39 (e) “Public fund” means all funds, assets, trustee, and
40 other designates under the State Board of Administration
41 pursuant to part I of chapter 121.
42 (f) “Scrutinized companies” means companies that boycott
43 Israel or engage in a boycott of Israel.
44 (2) IDENTIFICATION OF COMPANIES.—
45 (a) By August 1, 2016, the public fund shall make its best
46 efforts to identify all scrutinized companies in which the
47 public fund has direct or indirect holdings or could possibly
48 have such holdings in the future. Such efforts include:
49 1. To the extent that the public fund finds it appropriate,
50 reviewing and relying on publicly available information
51 regarding companies that boycott Israel, including information
52 provided by nonprofit organizations, research firms,
53 international organizations, and government entities;
54 2. Contacting asset managers contracted by the public fund
55 for information regarding companies that boycott Israel; or
56 3. Contacting other institutional investors that prohibit
57 such investments or that have engaged with companies that
58 boycott Israel.
59 (b) By the first meeting of the public fund following the
60 identification of scrutinized companies in accordance with
61 paragraph (a), the public fund shall compile and make available
62 the “Scrutinized Companies that Boycott Israel List.”
63 (c) The public fund shall update and make publicly
64 available quarterly the Scrutinized Companies that Boycott
65 Israel List based on evolving information from, among other
66 sources, those listed in paragraph (a).
67 (3) REQUIRED ACTIONS.—The public fund shall adhere to the
68 following procedures for assembling companies on the Scrutinized
69 Companies that Boycott Israel List.
70 (a) Engagement.—
71 1. The public fund shall immediately determine the
72 companies on the Scrutinized Companies that Boycott Israel List
73 in which the public fund owns direct or indirect holdings.
74 2. For each company newly identified under this paragraph
75 after August 1, 2016, the public fund shall send a written
76 notice informing the company of its scrutinized company status
77 and that it may become subject to investment prohibition by the
78 public fund. The notice must inform the company of the
79 opportunity to clarify its activities regarding the boycott of
80 Israel and encourage the company to cease the boycott of Israel
81 within 90 days in order to avoid qualifying for investment
82 prohibition.
83 3. If, within 90 days after the public fund’s first
84 engagement with a company pursuant to this paragraph, the
85 company ceases a boycott of Israel, the company shall be removed
86 from the Scrutinized Companies that Boycott Israel List, and the
87 provisions of this section shall cease to apply to that company
88 unless that company resumes a boycott of Israel.
89 (b) Prohibition.—The public fund may not acquire securities
90 of companies on the Scrutinized Companies that Boycott Israel
91 List, except as provided in paragraph (c) and subsection (6).
92 (c) Excluded securities.—Notwithstanding the provisions of
93 this section, paragraph (b) does not apply to:
94 1. Indirect holdings. However, the public fund shall submit
95 letters to the managers of such investment funds containing
96 companies that boycott Israel requesting that they consider
97 removing such companies from the fund or create a similar fund
98 having indirect holdings devoid of such companies. If the
99 manager creates a similar fund, the public fund shall replace
100 all applicable investments with investments in the similar fund
101 in an expedited timeframe consistent with prudent investing
102 standards. For the purposes of this section, an alternative
103 investment, as the term is defined in s. 215.4401, and
104 securities that are not publicly traded are deemed to be
105 indirect holdings.
106 2. Exchange-traded funds.
107 (4) REPORTING.—
108 (a) The public fund shall file a report with each member of
109 the Board of Trustees of the State Board of Administration, the
110 President of the Senate, and the Speaker of the House of
111 Representatives which includes the Scrutinized Companies that
112 Boycott Israel List within 30 days after the list is created.
113 This report shall be made available to the public.
114 (b) At each quarterly meeting of the Board of Trustees
115 thereafter, the public fund shall file a report, which shall be
116 made available to the public and to each member of the Board of
117 Trustees of the State Board of Administration, the President of
118 the Senate, and the Speaker of the House of Representatives,
119 which includes:
120 1. A summary of correspondence with companies engaged by
121 the public fund under subparagraph (3)(a)2.;
122 2. All prohibited investments under paragraph (3)(b);
123 3. Any progress made under paragraph (3)(c); and
124 4. A list of all publicly traded securities held directly
125 by the public fund.
126 (5) INVESTMENT POLICY STATEMENT OBLIGATIONS.—The public
127 fund’s actions taken in compliance with this section, including
128 all good faith determinations regarding companies as required by
129 this act, shall be adopted and incorporated into the public
130 fund’s investment policy statement as provided in s. 215.475.
131 (6) INVESTMENT IN CERTAIN SCRUTINIZED COMPANIES.
132 Notwithstanding any other provision of this section, the public
133 fund may invest in certain scrutinized companies if clear and
134 convincing evidence shows that the value of all assets under
135 management by the public fund becomes equal to or less than
136 99.50 percent, or 50 basis points, of the hypothetical value of
137 all assets under management by the public fund, assuming no
138 investment prohibition for any company had occurred under
139 paragraph (3)(b). Cessation of the investment prohibition and
140 any new investment in a scrutinized company is limited to the
141 minimum steps necessary to avoid the contingency described in
142 this subsection. For any cessation of the investment prohibition
143 and new investment authorized by this subsection, the public
144 fund shall provide a written report to each member of the Board
145 of Trustees of the State Board of Administration, the President
146 of the Senate, and the Speaker of the House of Representatives
147 in advance of the new investment, updated semiannually
148 thereafter as applicable, setting forth the reasons and
149 justification, supported by clear and convincing evidence, for
150 its decisions to cease the investment prohibition in scrutinized
151 companies.
152 Section 2. Effective October 1, 2016, section 287.135,
153 Florida Statutes, is reenacted and amended to read:
154 287.135 Prohibition against contracting with scrutinized
155 companies.—
156 (1) In addition to the terms defined in ss. 287.012 and
157 215.473, as used in this section, the term:
158 (a) “Awarding body” means, for purposes of state contracts,
159 an agency or the department, and for purposes of local
160 contracts, the governing body of the local governmental entity.
161 (b) “Boycott of Israel” has the same meaning as defined in
162 s. 215.4725.
163 (c)(b) “Business operations” means, for purposes
164 specifically related to Cuba or Syria, engaging in commerce in
165 any form in Cuba or Syria, including, but not limited to,
166 acquiring, developing, maintaining, owning, selling, possessing,
167 leasing, or operating equipment, facilities, personnel,
168 products, services, personal property, real property, military
169 equipment, or any other apparatus of business or commerce.
170 (d)(c) “Local governmental entity” means a county,
171 municipality, special district, or other political subdivision
172 of the state.
173 (2) A company is ineligible to, and may not, bid on, submit
174 a proposal for, or enter into or renew a contract with an agency
175 or local governmental entity for goods or services of $1 million
176 or more if that, at the time of bidding or submitting a proposal
177 for a new contract or renewal of an existing contract, the
178 company:
179 (a) Is on the Scrutinized Companies that Boycott Israel
180 List, created pursuant to s. 215.4725, or is engaged in a
181 boycott of Israel;
182 (b) Is on the Scrutinized Companies with Activities in
183 Sudan List or the Scrutinized Companies with Activities in the
184 Iran Petroleum Energy Sector List, created pursuant to s.
185 215.473;, or
186 (c) Is engaged in business operations in Cuba or Syria, is
187 ineligible for, and may not bid on, submit a proposal for, or
188 enter into or renew a contract with an agency or local
189 governmental entity for goods or services of $1 million or more.
190 (3)(a) Any contract with an agency or local governmental
191 entity for goods or services of $1 million or more entered into
192 or renewed on or after:
193 (a) July 1, 2011, through June 30, 2012, must contain a
194 provision that allows for the termination of such contract at
195 the option of the awarding body if the company is found to have
196 submitted a false certification as provided under subsection (5)
197 or been placed on the Scrutinized Companies with Activities in
198 Sudan List or the Scrutinized Companies with Activities in the
199 Iran Petroleum Energy Sector List.
200 (b) Any contract with an agency or local governmental
201 entity for goods or services of $1 million or more entered into
202 or renewed on or after July 1, 2012, through September 30, 2016,
203 must contain a provision that allows for the termination of such
204 contract at the option of the awarding body if the company is
205 found to have submitted a false certification as provided under
206 subsection (5), been placed on the Scrutinized Companies with
207 Activities in Sudan List or the Scrutinized Companies with
208 Activities in the Iran Petroleum Energy Sector List, or been
209 engaged in business operations in Cuba or Syria.
210 (c) October 1, 2016, must contain a provision that allows
211 for the termination of such contract at the option of the
212 awarding body if the company:
213 1. Is found to have submitted a false certification as
214 provided under subsection (5);
215 2. Has been placed on the Scrutinized Companies that
216 Boycott Israel List, or is engaged in a boycott of Israel;
217 3. Has been placed on the Scrutinized Companies with
218 Activities in Sudan List or the Scrutinized Companies with
219 Activities in the Iran Petroleum Energy Sector List; or
220 4. Has been engaged in business operations in Cuba or
221 Syria.
222 (4) Notwithstanding subsection (2) or subsection (3), an
223 agency or local governmental entity, on a case-by-case basis,
224 may permit a company on the Scrutinized Companies that Boycott
225 Israel List, the Scrutinized Companies with Activities in Sudan
226 List or the Scrutinized Companies with Activities in the Iran
227 Petroleum Energy Sector List, or a company with business
228 operations in Cuba or Syria, to be eligible for, bid on, submit
229 a proposal for, or enter into or renew a contract for goods or
230 services of $1 million or more under the conditions set forth in
231 paragraph (a) or the conditions set forth in paragraph (b):
232 (a)1. With respect to a company on the Scrutinized
233 Companies with Activities in Sudan List or the Scrutinized
234 Companies with Activities in the Iran Petroleum Energy Sector
235 List, all of the following occur:
236 a. The scrutinized business operations were made before
237 July 1, 2011.
238 b. The scrutinized business operations have not been
239 expanded or renewed after July 1, 2011.
240 c. The agency or local governmental entity determines that
241 it is in the best interest of the state or local community to
242 contract with the company.
243 d. The company has adopted, has publicized, and is
244 implementing a formal plan to cease scrutinized business
245 operations and to refrain from engaging in any new scrutinized
246 business operations.
247 2. With respect to a company engaged in business operations
248 in Cuba or Syria, all of the following occur:
249 a. The business operations were made before July 1, 2012.
250 b. The business operations have not been expanded or
251 renewed after July 1, 2012.
252 c. The agency or local governmental entity determines that
253 it is in the best interest of the state or local community to
254 contract with the company.
255 d. The company has adopted, has publicized, and is
256 implementing a formal plan to cease business operations and to
257 refrain from engaging in any new business operations.
258 3. With respect to a company on the Scrutinized Companies
259 that Boycott Israel List, all of the following occur:
260 a. The boycott of Israel was initiated before October 1,
261 2016.
262 b. The company certifies in writing that it has ceased its
263 boycott of Israel.
264 c. The agency or local governmental entity determines that
265 it is in the best interest of the state or local community to
266 contract with the company.
267 d. The company has adopted, has publicized, and is
268 implementing a formal plan to cease scrutinized business
269 operations and to refrain from engaging in any new scrutinized
270 business operations.
271 (b) One of the following occurs:
272 1. The local governmental entity makes a public finding
273 that, absent such an exemption, the local governmental entity
274 would be unable to obtain the goods or services for which the
275 contract is offered.
276 2. For a contract with an executive agency, the Governor
277 makes a public finding that, absent such an exemption, the
278 agency would be unable to obtain the goods or services for which
279 the contract is offered.
280 3. For a contract with an office of a state constitutional
281 officer other than the Governor, the state constitutional
282 officer makes a public finding that, absent such an exemption,
283 the office would be unable to obtain the goods or services for
284 which the contract is offered.
285 (5) At the time a company submits a bid or proposal for a
286 contract or before the company enters into or renews a contract
287 with an agency or governmental entity for goods or services of
288 $1 million or more, the company must certify that the company is
289 not participating in a boycott of Israel, on the Scrutinized
290 Companies with Activities in Sudan List or the Scrutinized
291 Companies with Activities in the Iran Petroleum Energy Sector
292 List, or that it does not have business operations in Cuba or
293 Syria.
294 (a) If, after the agency or the local governmental entity
295 determines, using credible information available to the public,
296 that the company has submitted a false certification, the agency
297 or local governmental entity shall provide the company with
298 written notice of its determination. The company shall have 90
299 days following receipt of the notice to respond in writing and
300 to demonstrate that the determination of false certification was
301 made in error. If the company does not make such demonstration
302 within 90 days after receipt of the notice, the agency or the
303 local governmental entity shall bring a civil action against the
304 company. If a civil action is brought and the court determines
305 that the company submitted a false certification, the company
306 shall pay the penalty described in subparagraph 1. and all
307 reasonable attorney fees and costs, including any costs for
308 investigations that led to the finding of false certification.
309 1. A civil penalty equal to the greater of $2 million or
310 twice the amount of the contract for which the false
311 certification was submitted shall be imposed.
312 2. The company is ineligible to bid on any contract with an
313 agency or local governmental entity for 3 years after the date
314 the agency or local governmental entity determined that the
315 company submitted a false certification.
316 (b) A civil action to collect the penalties described in
317 paragraph (a) must commence within 3 years after the date the
318 false certification is submitted.
319 (6) Only the agency or local governmental entity that is a
320 party to the contract may cause a civil action to be brought
321 under this section. This section does not create or authorize a
322 private right of action or enforcement of the penalties provided
323 in this section. An unsuccessful bidder, or any other person
324 other than the agency or local governmental entity, may not
325 protest the award of a contract or contract renewal on the basis
326 of a false certification.
327 (7) This section preempts any ordinance or rule of any
328 agency or local governmental entity involving public contracts
329 for goods or services of $1 million or more with a company
330 engaged in scrutinized business operations.
331 (8) The contracting prohibitions in this section applicable
332 to companies on the Scrutinized Companies with Activities in
333 Sudan List or the Scrutinized Companies with Activities in the
334 Iran Petroleum Energy Sector List or to companies engaged in
335 business operations in Cuba or Syria become This section becomes
336 inoperative on the date that federal law ceases to authorize the
337 states to adopt and enforce such the contracting prohibitions of
338 the type provided for in this section.
339 Section 3. If any provision of this act or its application
340 to any person or circumstance is held invalid, the invalidity
341 does not affect other provisions or applications of this act
342 which can be given effect without the invalid provision or
343 application, and to this end the provisions of this act are
344 declared severable.
345 Section 4. Except as otherwise expressly provided in this
346 act, this act shall take effect upon becoming a law.
347
348 ================= T I T L E A M E N D M E N T ================
349 And the title is amended as follows:
350 Delete everything before the enacting clause
351 and insert:
352 A bill to be entitled
353 An act relating to scrutinized companies; creating s.
354 215.4725, F.S.; providing definitions; requiring the
355 State Board of Administration to identify all
356 companies that are boycotting Israel or are engaged in
357 a boycott of Israel in which the public fund owns
358 direct or indirect holdings; requiring the public fund
359 to create and maintain the Scrutinized Companies that
360 Boycott Israel List that names all such companies;
361 requiring the public fund to provide written notice to
362 a company that is identified as a scrutinized company;
363 specifying the contents of the notice; specifying
364 circumstances under which a company may be removed
365 from the list; prohibiting the acquisition of certain
366 securities of scrutinized companies; prescribing
367 reporting requirements; requiring that certain
368 information be included in the investment policy
369 statement; authorizing the public fund to invest in
370 certain scrutinized companies if the value of all
371 assets under management by the public fund becomes
372 equal to or less than a specified amount; requiring
373 the public fund to provide a written report to the
374 board of trustees of the state board and the
375 Legislature before such investment occurs; specifying
376 required contents of the report; reenacting and
377 amending s. 287.135, F.S., relating to the prohibition
378 against contracting with scrutinized companies;
379 providing a definition; prohibiting a state agency or
380 local governmental entity from contracting for goods
381 and services that exceed a specified amount if the
382 company has been placed on the Scrutinized Companies
383 that Boycott Israel List; requiring inclusion of a
384 contract provision that authorizes termination of a
385 contract if a company submits certain false
386 certification, has been placed on the scrutinized
387 companies list or is engaged in a boycott of Israel;
388 providing exceptions; requiring certification upon
389 submission of a bid or proposal for certain contracts,
390 or before a company enters into or renews certain
391 contracts, with an agency or local governmental entity
392 that the company is not participating in a boycott of
393 Israel; providing procedures upon determination that a
394 company has submitted a false certification; providing
395 for civil action; providing penalties; providing
396 attorney fees and costs; providing a statute of
397 repose; prohibiting a private right of action;
398 providing for preemption of conflicting ordinances and
399 rules; revising provisions relating to federal
400 preemption; providing for severability; providing
401 effective dates.