Florida Senate - 2017 CS for CS for SB 738 By the Committees on Governmental Oversight and Accountability; and Banking and Insurance; and Senators Mayfield and Steube 585-02944-17 2017738c2 1 A bill to be entitled 2 An act relating to public records; creating ss. 3 663.416 and 663.540, F.S.; defining terms; providing 4 exemptions from public records requirements for 5 certain information held by the Office of Financial 6 Regulation relating to international trust company 7 representative offices or limited service affiliates, 8 respectively, and relating to affiliated international 9 trust entities; authorizing the disclosure of the 10 information by the office to specified persons; 11 providing construction; providing criminal penalties; 12 providing future legislative review and repeal of the 13 exemptions; providing statements of public necessity; 14 amending s. 655.057, F.S.; providing that certain 15 exemptions from public records requirements for 16 information relating to investigations, reports of 17 examinations, operations, or condition, including 18 working papers, and certain materials supplied by 19 governmental agencies are exempt from s. 24(a) of 20 Article I of the State Constitution, as a result of 21 the expansion of such exemptions to include the 22 records of international trust entities and limited 23 service affiliates, as made by CS/SB 736, 2017 Regular 24 Session; providing a statement of public necessity; 25 providing a contingent effective date. 26 27 Be It Enacted by the Legislature of the State of Florida: 28 29 Section 1. Section 663.416, Florida Statutes, is created 30 and incorporated into part III of chapter 663, Florida Statutes, 31 as created by CS/SB 736, 2017 Regular Session, to read: 32 663.416 Public records exemption.— 33 (1) DEFINITIONS.—As used in this section, the term: 34 (a) “Reports of examinations, operations, or condition” 35 means records submitted to or prepared by the office as part of 36 the office’s duties performed pursuant to s. 655.012 or s. 37 655.045. 38 (b) “Working papers” means the records of the procedure 39 followed, the tests performed, the information obtained, and the 40 conclusions reached in an investigation or examination performed 41 under s. 655.032 or s. 655.045. The term includes planning 42 documentation, work programs, analyses, memoranda, letters of 43 confirmation and representation, abstracts of the books and 44 records of a financial institution, as defined in s. 655.005, 45 and schedules or commentaries prepared or obtained in the course 46 of such investigation or examination. 47 (2) PUBLIC RECORDS EXEMPTION.—The following information 48 held by the office is confidential and exempt from s. 119.07(1) 49 and s. 24(a), Art. I of the State Constitution: 50 (a) Any personal identifying information of the customers 51 or prospective customers of an affiliated international trust 52 entity which appears in the books and records of an 53 international trust company representative office or in records 54 relating to reports of examinations, operations, or condition of 55 an international trust company representative office, including 56 working papers. 57 (b) Any portion of a list of names of the shareholders or 58 members of an affiliated international trust entity. 59 (c) Information received by the office from a person from 60 another state or country or the Federal Government which is 61 otherwise confidential or exempt pursuant to the laws of that 62 state or country or pursuant to federal law. 63 (3) AUTHORIZED RELEASE OF CONFIDENTIAL AND EXEMPT 64 INFORMATION.—Information made confidential and exempt under 65 subsection (2) may be disclosed by the office: 66 (a) To the authorized representative or representatives of 67 the international trust company representative office under 68 examination. The authorized representative or representatives 69 must be identified in a resolution or by written consent of the 70 board of directors, or the equivalent, of the international 71 trust entity. 72 (b) To a fidelity insurance company, upon written consent 73 of the board of directors, or the equivalent, of the 74 international trust entity. 75 (c) To an independent auditor, upon written consent of the 76 board of directors, or the equivalent, of the international 77 trust entity. 78 (d) To the liquidator, receiver, or conservator for the 79 international trust entity, if a liquidator, receiver, or 80 conservator is appointed. However, any portion of the 81 information which discloses the identity of a customer or 82 prospective customer of the international trust entity, or a 83 shareholder or member of the international trust entity, must be 84 redacted by the office before releasing such portion to the 85 liquidator, receiver, or conservator. 86 (e) To a law enforcement agency in furtherance of the 87 agency’s official duties and responsibilities. 88 (f) To the appropriate law enforcement or prosecutorial 89 agency for the purpose of reporting any suspected criminal 90 activity. 91 (g) Pursuant to a legislative subpoena. A legislative body 92 or committee that receives records or information pursuant to 93 such a subpoena must maintain the confidential status of the 94 records or information, except in a case involving the 95 investigation of charges against a public official subject to 96 impeachment or removal, in which case the records or information 97 may be disclosed only to the extent necessary as determined by 98 such legislative body or committee. 99 (4) PUBLICATION OF INFORMATION.—This section does not 100 prevent or restrict the publication of a report required by 101 federal law. 102 (5) PENALTY.—A person who willfully, in violation of this 103 section, discloses information made confidential and exempt by 104 this section commits a felony of the third degree, punishable as 105 provided in s. 775.082, s. 775.083, or s. 775.084. 106 (6) OPEN GOVERNMENT SUNSET REVIEW.—This section is subject 107 to the Open Government Sunset Review Act in accordance with s. 108 119.15 and is repealed on October 2, 2022, unless reviewed and 109 saved from repeal through reenactment by the Legislature. 110 Section 2. The Legislature finds that it is a public 111 necessity to make confidential and exempt from s. 119.07(1), 112 Florida Statutes, and s. 24(a), Article I of the State 113 Constitution personal identifying information of the customers 114 or prospective customers of an affiliated international trust 115 entity which appears in the books and records of an 116 international trust company representative office or in records 117 relating to reports of examinations, operations, or condition of 118 an international trust company representative office, including 119 working papers; any portion of a list of names of the 120 shareholders or members of an affiliated international trust 121 entity which is held by the office; and information received by 122 the Office of Financial Regulation from a person from another 123 state or country or the Federal Government which is otherwise 124 confidential or exempt pursuant to the laws of that state or 125 country or pursuant to federal law. 126 (1) An exemption from public records requirements is 127 necessary for such records and information because the Office of 128 Financial Regulation may receive sensitive personal and 129 financial information, including personal identifying 130 information relating to such entities, in the course of its 131 investigation and examination duties. Public disclosure of the 132 personal identifying information of existing customers, 133 prospective customers, shareholders, or members of the 134 affiliated international trust entity could defame or jeopardize 135 the personal and financial safety of those individuals and their 136 family members. The individuals served by the affiliated 137 international trust entity are often individuals of high net 138 worth. Individuals of high net worth and shareholders or members 139 of financial institutions are frequently the targets of criminal 140 predators seeking access to their assets. It is important that 141 the exposure of such individuals and their family members to 142 threats of extortion, kidnapping, and other crimes not be 143 increased. Placing the personal identifying information of these 144 individuals within the public domain would increase the security 145 risk that those individuals or their families could become the 146 target of criminal activity. 147 (2) Public disclosure of information received by the Office 148 of Financial Regulation from a person from another state or 149 country or the Federal Government which is otherwise 150 confidential or exempt pursuant to the laws of that state or 151 country or pursuant to federal law may deteriorate the office’s 152 relationships with other regulatory bodies. The office 153 frequently engages in joint examinations with federal 154 regulators. If such information were subject to disclosure to 155 the public, not only would such disclosure deter other 156 regulatory bodies from communicating vital information to the 157 office, but the office would violate existing information 158 sharing agreements governing the sharing of confidential 159 supervisory information. 160 Section 3. Section 663.540, Florida Statutes, is created 161 and incorporated into part IV of chapter 663, Florida Statutes, 162 as created by CS/SB 736, 2017 Regular Session, to read: 163 663.540 Public records exemption.— 164 (1) DEFINITIONS.—As used in this section, the term: 165 (a) “Reports of examinations, operations, or condition” 166 means records submitted to or prepared by the office as part of 167 the office’s duties performed pursuant to s. 655.012 or s. 168 663.537. 169 (b) “Working papers” means the records of the procedure 170 followed, the tests performed, the information obtained, and the 171 conclusions reached in an investigation or examination performed 172 under s. 655.032 or s. 663.537. The term includes planning 173 documentation, work programs, analyses, memoranda, letters of 174 confirmation and representation, abstracts of the books and 175 records of a financial institution, as defined in s. 655.005, 176 and schedules or commentaries prepared or obtained in the course 177 of such investigation or examination. 178 (2) PUBLIC RECORDS EXEMPTION.—The following information 179 held by the office is confidential and exempt from s. 119.07(1) 180 and s. 24(a), Art. I of the State Constitution: 181 (a) Any personal identifying information of the customers 182 or prospective customers of an affiliated international trust 183 entity which appears in the books and records of a limited 184 service affiliate or in records relating to reports of 185 examinations, operations, or condition of a limited service 186 affiliate, including working papers. 187 (b) Any portion of a list of names of the shareholders or 188 members of a limited service affiliate. 189 (c) Information received by the office from a person from 190 another state or country or the Federal Government which is 191 otherwise confidential or exempt pursuant to the laws of that 192 state or country or pursuant to federal law. 193 (3) AUTHORIZED RELEASE OF CONFIDENTIAL AND EXEMPT 194 INFORMATION.—Information made confidential and exempt under 195 subsection (2) may be disclosed by the office: 196 (a) To the authorized representative or representatives of 197 the limited service affiliate under examination. The authorized 198 representative or representatives must be identified in a 199 resolution or by written consent of the board of directors, if 200 the limited service affiliate is a corporation, or of the 201 managers, if the limited service affiliate is a limited 202 liability company. 203 (b) To a fidelity insurance company, upon written consent 204 of the limited service affiliate’s board of directors, if the 205 limited service affiliate is a corporation, or of the managers, 206 if the limited service affiliate is a limited liability company. 207 (c) To an independent auditor, upon written consent of the 208 limited service affiliate’s board of directors, if the limited 209 service affiliate is a corporation, or of the managers, if the 210 limited service affiliate is a limited liability company. 211 (d) To the liquidator, receiver, or conservator for a 212 limited service affiliate, if a liquidator, receiver, or 213 conservator is appointed. However, any portion of the 214 information which discloses the identity of a customer of the 215 affiliated international trust entity, or a shareholder or 216 member of the limited service affiliate, must be redacted by the 217 office before releasing such portion to the liquidator, 218 receiver, or conservator. 219 (e) To a law enforcement agency in furtherance of the 220 agency’s official duties and responsibilities. 221 (f) To the appropriate law enforcement or prosecutorial 222 agency for the purpose of reporting any suspected criminal 223 activity. 224 (g) Pursuant to a legislative subpoena. A legislative body 225 or committee that receives records or information pursuant to 226 such a subpoena must maintain the confidential status of the 227 records or information, except in a case involving the 228 investigation of charges against a public official subject to 229 impeachment or removal, in which case the records or information 230 may be disclosed only to the extent necessary as determined by 231 such legislative body or committee. 232 (4) PUBLICATION OF INFORMATION.—This section does not 233 prevent or restrict the publication of a report required by 234 federal law. 235 (5) PENALTY.—A person who willfully, in violation of this 236 section, discloses information made confidential and exempt by 237 this section commits a felony of the third degree, punishable as 238 provided in s. 775.082, s. 775.083, or s. 775.084. 239 (6) OPEN GOVERNMENT SUNSET REVIEW.—This section is subject 240 to the Open Government Sunset Review Act in accordance with s. 241 119.15 and is repealed on October 2, 2022, unless reviewed and 242 saved from repeal through reenactment by the Legislature. 243 Section 4. The Legislature finds that it is a public 244 necessity to make confidential and exempt from s. 119.07(1), 245 Florida Statutes, and s. 24(a), Article I of the State 246 Constitution personal identifying information of the customers 247 or prospective customers of an affiliated international trust 248 entity which appears in the books and records of a limited 249 service affiliate or in records relating to reports of 250 examinations, operations, or condition of a limited service 251 affiliate, including working papers; any portion of a list of 252 names of the shareholders or members of a limited service 253 affiliate which is held by the office; and information received 254 by the office from a person from another state or country or the 255 Federal Government which is otherwise confidential or exempt 256 pursuant to the laws of that state or country or pursuant to 257 federal law. 258 (1) An exemption from public records requirements is 259 necessary for personal identifying information of existing and 260 prospective customers of an affiliated international trust 261 entity or shareholders or members of a limited service 262 affiliate, because if such information is available for public 263 access, such access could defame or jeopardize the personal and 264 financial safety of those individuals. The individuals served by 265 the affiliated international trust entity are often individuals 266 of high net worth. Individuals of high net worth and 267 shareholders or members of financial institutions are frequently 268 the targets of criminal predators seeking access to their 269 assets. It is important that the exposure of such individuals 270 and their family members to threats of extortion, kidnapping, 271 and other crimes not be increased. Placing the personal 272 identifying information of these individuals within the public 273 domain would increase the security risk that those individuals 274 or their families could become the target of criminal activity. 275 (2) An exemption from public records requirements is 276 necessary for information received by the Office of Financial 277 Regulation from a person from another state or country or the 278 Federal Government which is otherwise confidential or exempt 279 pursuant to the laws of that state or country or pursuant to 280 federal law, as public disclosure may deteriorate the office’s 281 relationships with other regulatory bodies. The office 282 frequently engages in joint examinations with federal 283 regulators. If such information were subject to disclosure to 284 the public, not only would this disclosure deter other 285 regulatory bodies from communicating vital information to the 286 office, but the office would violate existing information 287 sharing agreements governing the sharing of confidential 288 supervisory information. 289 Section 5. Subsections (1), (2), (5), and (9) of section 290 655.057, Florida Statutes, are amended, and subsection (15) is 291 added to that section, to read: 292 655.057 Records; limited restrictions upon public access.— 293 (1) Except as otherwise provided in this section and except 294 for such portions thereof which are otherwise public record, all 295 records and information relating to an investigation by the 296 office are confidential and exempt from s. 119.07(1) and s. 297 24(a), Art. I of the State Constitution until such investigation 298 is completed or ceases to be active. For purposes of this 299 subsection, an investigation is considered “active” while such 300 investigation is being conducted by the office with a 301 reasonable, good faith belief that it may lead to the filing of 302 administrative, civil, or criminal proceedings. An investigation 303 does not cease to be active if the office is proceeding with 304 reasonable dispatch, and there is a good faith belief that 305 action may be initiated by the office or other administrative or 306 law enforcement agency. After an investigation is completed or 307 ceases to be active, portions of the records relating to the 308 investigation are confidential and exempt from s. 119.07(1) and 309 s. 24(a), Art. I of the State Constitution to the extent that 310 disclosure would: 311 (a) Jeopardize the integrity of another active 312 investigation; 313 (b) Impair the safety and soundness of the financial 314 institution; 315 (c) Reveal personal financial information; 316 (d) Reveal the identity of a confidential source; 317 (e) Defame or cause unwarranted damage to the good name or 318 reputation of an individual or jeopardize the safety of an 319 individual; or 320 (f) Reveal investigative techniques or procedures. 321 (2) Except as otherwise provided in this section and except 322 for such portions thereof which are public record, reports of 323 examinations, operations, or condition, including working 324 papers, or portions thereof, prepared by, or for the use of, the 325 office or any state or federal agency responsible for the 326 regulation or supervision of financial institutions in this 327 state are confidential and exempt from s. 119.07(1) and s. 328 24(a), Art. I of the State Constitution. However, such reports 329 or papers or portions thereof may be released to: 330 (a) The financial institution under examination; 331 (b) Any holding company of which the financial institution 332 is a subsidiary; 333 (c) Proposed purchasers if necessary to protect the 334 continued financial viability of the financial institution, upon 335 prior approval by the board of directors of such institution; 336 (d) Persons proposing in good faith to acquire a 337 controlling interest in or to merge with the financial 338 institution, upon prior approval by the board of directors of 339 such financial institution; 340 (e) Any officer, director, committee member, employee, 341 attorney, auditor, or independent auditor officially connected 342 with the financial institution, holding company, proposed 343 purchaser, or person seeking to acquire a controlling interest 344 in or merge with the financial institution; or 345 (f) A fidelity insurance company, upon approval of the 346 financial institution’s board of directors. However, a fidelity 347 insurance company may receive only that portion of an 348 examination report relating to a claim or investigation being 349 conducted by such fidelity insurance company. 350 (g) Examination, operation, or condition reports of a 351 financial institution shall be released by the office within 1 352 year after the appointment of a liquidator, receiver, or 353 conservator to the financial institution. However, any portion 354 of such reports which discloses the identities of depositors, 355 bondholders, members, borrowers, or stockholders, other than 356 directors, officers, or controlling stockholders of the 357 institution, shall remain confidential and exempt from s. 358 119.07(1) and s. 24(a), Art. I of the State Constitution. 359 360 Any confidential information or records obtained from the office 361 pursuant to this paragraph shall be maintained as confidential 362 and exempt from s. 119.07(1) and s. 24(a), Art. I of the State 363 Constitution. 364 (5) This section does not prevent or restrict: 365 (a) Publishing reports that are required to be submitted to 366 the office pursuant to s. 655.045(2) or required by applicable 367 federal statutes or regulations to be published. 368 (b) Furnishing records or information to any other state, 369 federal, or foreign agency responsible for the regulation or 370 supervision of financial institutions. 371 (c) Disclosing or publishing summaries of the condition of 372 financial institutions and general economic and similar 373 statistics and data, provided that the identity of a particular 374 financial institution is not disclosed. 375 (d) Reporting any suspected criminal activity, with 376 supporting documents and information, to appropriate law 377 enforcement and prosecutorial agencies. 378 (e) Furnishing information upon request to the Chief 379 Financial Officer or the Division of Treasury of the Department 380 of Financial Services regarding the financial condition of any 381 financial institution that is, or has applied to be, designated 382 as a qualified public depository pursuant to chapter 280. 383 (f) Furnishing information to Federal Home Loan Banks 384 regarding its member institutions pursuant to an information 385 sharing agreement between the Federal Home Loan Banks and the 386 office. 387 388 Any confidential information or records obtained from the office 389 pursuant to this subsection shall be maintained as confidential 390 and exempt from s. 119.07(1) and s. 24(a), Art. I of the State 391 Constitution. 392 (9) Materials supplied to the office or to employees of any 393 financial institution by other state or federal governmental 394 agencies remain the property of the submitting agency or the 395 corporation, and any document request must be made to the 396 appropriate agency. Any confidential documents supplied to the 397 office or to employees of any financial institution by other 398 state or federal governmental agencies are confidential and 399 exempt from s. 119.07(1) and s. 24(a), Art. I of the State 400 Constitution. Such information shall be made public only with 401 the consent of such agency or the corporation. 402 (15) Subsections (1), (2), (5), and (9) are subject to the 403 Open Government Sunset Review Act in accordance with s. 119.15 404 and are repealed on October 2, 2022, unless reviewed and saved 405 from repeal through reenactment by the Legislature. 406 Section 6. The Legislature finds that it is a public 407 necessity to make confidential and exempt from s. 119.07(1), 408 Florida Statutes, and s. 24(a), Article I of the State 409 Constitution records and information relating to an 410 investigation by the Office of Financial Regulation; portions of 411 records relating to a completed or inactive investigation by the 412 office which would jeopardize the integrity of another active 413 investigation, impair the safety and soundness of the financial 414 institution, reveal personal financial information, reveal the 415 identity of a confidential source, defame or cause unwarranted 416 damage to the good name or reputation of an individual or 417 jeopardize the safety of an individual, or reveal investigative 418 techniques or procedures; reports of examinations, operations, 419 or condition, including working papers, or portions thereof, 420 prepared by, or for the use of, the office or any state or 421 federal agency responsible for the regulation or supervision of 422 financial institutions in this state; any portion of such 423 reports which discloses the identities of depositors, 424 bondholders, members, borrowers, or stockholders, other than 425 directors, officers, or controlling stockholders of the 426 institution; and materials supplied to the office or to 427 employees of any financial institution by other state or federal 428 governmental agencies. 429 (1) The terms “international trust entity” and “limited 430 service affiliate” referenced in newly created parts III and IV 431 of chapter 663, Florida Statutes, are added to the definition of 432 the term “financial institution” in s. 655.005(1)(i), Florida 433 Statutes, in CS/SB 736. The international trust company 434 representative offices and limited service affiliates servicing 435 international trust entities are thus subject to examination by 436 the Office of Financial Regulation. As a result, the office may 437 receive sensitive personal and financial information relating to 438 such entities in conjunction with its duties under chapters 655 439 and 663, Florida Statutes. An exemption from public records 440 requirements prevents gaps in the law by providing the same 441 protections to international trust entities and limited service 442 affiliates which are afforded to other financial institutions, 443 thereby preventing any disadvantage to these similarly regulated 444 entities in comparison to other entities currently defined as 445 “financial institutions.” An exemption from public records 446 requirements for reports of examinations, operations, or 447 condition, including working papers, is necessary to ensure the 448 office’s ability to effectively and efficiently administer its 449 examination and investigation duties. Examination and 450 investigation are essential components of financial institutions 451 regulation. They deter fraud and ensure the safety and soundness 452 of the financial system. Examinations also provide a means of 453 early detection of violations, allowing for corrective action to 454 be taken before any harm can be done. 455 (2) The Legislature finds that it is a public necessity 456 that information and records relating to an examination or 457 investigation by the office be held confidential and exempt from 458 s. 119.07(1), Florida Statutes, and s. 24(a), Article I of the 459 State Constitution. Public disclosure of records and information 460 relating to an examination or investigation by the office could 461 expose the subject financial institution to unwarranted damage 462 to its good name or reputation and impair its safety and 463 soundness, as well as the safety and soundness of the financial 464 system in the state. Public disclosure of records and 465 information relating to an investigation by the office which 466 could jeopardize the integrity of another active investigation 467 or reveal investigative techniques or procedures of the office 468 would impair the office’s ability to effectively and efficiently 469 administer its duties under ss. 655.032 and 655.045, Florida 470 Statutes. Any portion of a record or information relating to an 471 investigation or examination which reveals personal financial 472 information or the identity of a confidential source may defame, 473 or cause unwarranted damage to the good name or reputation of, 474 those individuals, or jeopardize their safety. 475 Section 7. This act shall take effect on the same date that 476 CS/SB 736 or similar legislation takes effect, if such 477 legislation is adopted in the same legislative session or an 478 extension thereof and becomes a law.