Florida Senate - 2020                        COMMITTEE AMENDMENT
       Bill No. SB 1270
       
       
       
       
       
       
                                Ì116502qÎ116502                         
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  02/10/2020           .                                
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       The Committee on Governmental Oversight and Accountability (Lee)
       recommended the following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. The Division of Law Revision is directed to
    6  create part IX of chapter 112, Florida Statutes, consisting of
    7  s. 112.89, Florida Statutes, to be entitled “Fiduciary Duty of
    8  Care for Appointed Public Officials and Executive Officers.”
    9         Section 2. Section 112.89, Florida Statutes, is created to
   10  read:
   11         112.89Fiduciary duty of care.—
   12         (1) LEGISLATIVE FINDINGS AND PURPOSE.—The Legislature finds
   13  that appointed public officials and executive officers acting on
   14  behalf of governmental entities owe a fiduciary duty to the
   15  entities they serve. The Legislature finds that codifying a
   16  fiduciary duty of care will require that appointed public
   17  officials and executive officers stay adequately informed of
   18  affairs, perform due diligence, perform reasonable oversight,
   19  and practice fiscal responsibility regarding decisions involving
   20  corporate and proprietary commitments on behalf of the entity
   21  they serve.
   22         (2) DEFINITIONS.—
   23         (a)“Appointed public official” means either a “local
   24  officer” as defined in s. 112.3145(1)(a)2. or a “state officer”
   25  as defined in s. 112.3145(1)(c)2. and 3.
   26         (b) “Department” means the Department of Business and
   27  Professional Regulation.
   28         (c) “Executive officer” means the chief executive officer
   29  of a governmental entity to which an appointed public official
   30  is appointed.
   31         (d) “Governmental entity” means the entity, or a board, a
   32  council, a commission, an authority, or other body thereof, to
   33  which an appointed public official or an executive officer is
   34  appointed or hired.
   35         (3) FIDUCIARY DUTY OF CARE.—Each appointed public official
   36  and executive officer owes a fiduciary duty of care to the
   37  applicable entity in accordance with law he or she serves and
   38  has a duty to:
   39         (a) Act in accordance with the laws, ordinances, rules,
   40  policies, and terms governing his or her office or employment.
   41         (b) Act with the care, competence, and diligence normally
   42  exercised by private business professionals in similar corporate
   43  and proprietary circumstances.
   44         (c) Act only within the scope of his or her authority.
   45         (d) Refrain from conduct that is likely to damage the
   46  financial or economic interests of the governmental entity.
   47         (e) Use reasonable efforts to maintain documentation in
   48  accordance with applicable laws.
   49         (f) Maintain reasonable oversight of any delegated
   50  authority and discharge his or her duties with the care that a
   51  reasonably prudent person in a like business position would
   52  believe appropriate under the circumstances, and must:
   53         1. Become reasonably informed in connection with any
   54  decisionmaking function;
   55         2. Become reasonably informed when devoting attention to
   56  any oversight function;
   57         3. Keep reasonably informed concerning the affairs of the
   58  governmental entity; and
   59         4. Keep reasonably informed concerning the performance of a
   60  governmental entity’s executive officers or other officers,
   61  agents, or employees.
   62         (4) TRAINING REQUIREMENT.—
   63         (a) Beginning January 1, 2021, each appointed public
   64  official and executive officer shall complete a minimum of 5
   65  hours of board governance training for each term served.
   66         1. An appointed public official or executive officer
   67  holding office or employed by an entity on January 1, 2021,
   68  shall complete the 5 hours of board governance training before
   69  the expiration of his or her term of service. If an appointed
   70  public official or executive officer is employed under a
   71  contract that does not specify a termination date for
   72  employment, the public official or executive officer shall
   73  complete the 5 hours of training by January 1, 2022, and once
   74  every 4 years thereafter for the duration of their employment.
   75         2. An appointed public official or executive officer who is
   76  appointed, reappointed, or hired after January 1, 2021, shall
   77  complete the 5 hours of board governance training within 180
   78  days after the date of his or her appointment, reappointment, or
   79  hire.
   80         (b) By January 1, 2021, the department shall:
   81         1. Contract for or approve a board governance training
   82  program that includes an affordable web-based electronic media
   83  option; or
   84         2. Publish a list of approved board governance training
   85  providers on its website. A provider may include a Florida
   86  College System institution, a state university, a nationally
   87  recognized entity specializing in board governance education, or
   88  any other entity deemed qualified by the department as capable
   89  of providing the minimum training requirements specified in this
   90  subsection.
   91         (c) The board governance training programs must provide, at
   92  a minimum, educational materials and instruction on the
   93  following:
   94         1. Generally accepted corporate board governance principles
   95  and best practices; corporate board fiduciary duty of care legal
   96  analyses; corporate board oversight and evaluation procedures;
   97  governmental entity responsibilities; executive officer
   98  responsibilities; executive officer performance evaluations;
   99  selecting, monitoring, and evaluating an executive management
  100  team; reviewing and approving proposed investments,
  101  expenditures, and budget plans; financial accounting and capital
  102  allocation principles and practices; and new governmental entity
  103  member orientation.
  104         2.The fiduciary duty of care and obligations imposed upon
  105  appointed public officials and executive officers pursuant to
  106  this section.
  107         (d) A governmental entity complies with the training
  108  requirement under this subsection by providing a department
  109  approved program or contracting with a provider listed by the
  110  department under subparagraph (b)2. However, for governmental
  111  entities with annual revenues of less than $300,000, board
  112  governance training may be provided by in-house counsel of the
  113  governmental entity or the unit of government that created the
  114  governmental entity, if applicable, so long as the training
  115  complies with the minimum course content established by
  116  department rule.
  117         (e)Within 30 days after completion of the board governance
  118  training, each appointed public official and executive officer
  119  shall certify, in writing or electronic form and under oath, to
  120  the department that he or she:
  121         1. Has completed the training required by this subsection;
  122         2. Has read the laws and relevant policies applicable to
  123  his or her position;
  124         3. Will work to uphold such laws and policies to the best
  125  of his or her ability; and
  126         4. Will faithfully discharge his or her fiduciary
  127  responsibility, as imposed by this section.
  128         (f) The department shall adopt rules to implement this
  129  subsection.
  130         (g) This subsection does not apply to:
  131         1. Appointed public officials and executive officers of
  132  governmental entities whose annual revenues are less than
  133  $100,000 or to appointed public officials who hold elected
  134  office in another capacity; or
  135         2. An appointed public official or executive officer who
  136  completes board governance training involving fiduciary duties
  137  or responsibilities which is required under any other state law.
  138         (5) APPOINTMENT OF EXECUTIVE OFFICERS AND GENERAL
  139  COUNSELS.—The appointment of any executive officer or general
  140  counsel is subject to approval by a majority vote of the
  141  governmental entity.
  142         (6) STANDARDS FOR LEGAL COUNSEL.—All legal counsel employed
  143  by a governmental entity must represent the legal interests and
  144  positions of the governmental entity and not the interest of any
  145  individual or employee of the governmental entity, unless such
  146  representation is directed by the governmental entity.
  147         Section 3. This act shall take effect July 1, 2020.
  148  
  149  ================= T I T L E  A M E N D M E N T ================
  150  And the title is amended as follows:
  151         Delete everything before the enacting clause
  152  and insert:
  153                        A bill to be entitled                      
  154         An act relating to the fiduciary duty of care for
  155         appointed public officials and executive officers;
  156         providing a directive to the Division of Law Revision
  157         to create part IX of ch. 112, F.S.; creating s.
  158         112.89, F.S.; providing legislative findings and
  159         purpose; defining terms; establishing standards for
  160         the fiduciary duty of care for appointed public
  161         officials and executive officers of specified
  162         governmental entities; requiring training on board
  163         governance beginning on a specified date; requiring
  164         the Department of Business and Professional Regulation
  165         to contract for or approve such training programs or
  166         publish a list of approved training providers;
  167         specifying requirements for such training; authorizing
  168         training to be provided by in-house counsel for
  169         certain governmental entities; requiring appointed
  170         public officials and executive officers to certify
  171         their completion of the annual training; requiring the
  172         department to adopt rules; providing exceptions to the
  173         training requirement; specifying requirements for the
  174         appointment of executive officers and general counsels
  175         of governmental entities; specifying standards for
  176         legal counsel; providing an effective date.