Florida Senate - 2020                                    SB 1270
       
       
        
       By Senator Lee
       
       
       
       
       
       20-01665E-20                                          20201270__
    1                        A bill to be entitled                      
    2         An act relating to the fiduciary duty of care for
    3         appointed public officials and executive officers;
    4         providing a directive to the Division of Law Revision
    5         to create part IX of ch. 112, F.S.; creating s.
    6         112.89, F.S.; providing legislative findings and
    7         purpose; defining terms; establishing standards for
    8         the fiduciary duty of care for appointed public
    9         officials and executive officers of specified
   10         governmental entities; requiring training on board
   11         governance beginning on a specified date; requiring
   12         the Department of Business and Professional Regulation
   13         to contract for or approve such training programs or
   14         publish a list of approved training providers;
   15         specifying requirements for such training; authorizing
   16         training to be provided by in-house counsel for
   17         certain governmental entities; requiring appointed
   18         public officials and executive officers to certify
   19         their completion of the annual training; requiring the
   20         department to adopt rules; providing an exception to
   21         the training requirement; specifying requirements for
   22         the appointment of executive officers and general
   23         counsels of governmental entities; specifying
   24         standards for legal counsel; providing an effective
   25         date.
   26          
   27  Be It Enacted by the Legislature of the State of Florida:
   28  
   29         Section 1. The Division of Law Revision is directed to
   30  create part IX of chapter 112, Florida Statutes, consisting of
   31  s. 112.89, Florida Statutes, to be entitled “Fiduciary Duty of
   32  Care for Appointed Public Officials and Executive Officers.”
   33         Section 2. Section 112.89, Florida Statutes, is created to
   34  read:
   35         112.89Fiduciary duty of care.—
   36         (1) LEGISLATIVE FINDINGS AND PURPOSE.—The Legislature finds
   37  that appointed public officials and executive officers acting on
   38  behalf of governmental entities owe a fiduciary duty to the
   39  entities they serve. The Legislature finds that codifying a
   40  fiduciary duty of care will require that appointed public
   41  officials and executive officers stay adequately informed of
   42  affairs, perform due diligence, perform reasonable oversight,
   43  and practice fiscal responsibility regarding decisions involving
   44  corporate and proprietary commitments on behalf of a
   45  governmental entity.
   46         (2) DEFINITIONS.—
   47         (a)“Appointed public official” means either a “local
   48  officer” as defined in s. 112.3145(1)(a)2. or a “state officer”
   49  as defined in s. 112.3145(1)(c)2. and 3.
   50         (b) “Department” means the Department of Business and
   51  Professional Regulation.
   52         (c) “Executive officer” means the chief executive officer
   53  of a governmental entity.
   54         (d) “Governmental entity” means the entity, or a board, a
   55  council, a commission, an authority, or other body thereof, to
   56  which an appointed public official or an executive officer is
   57  appointed or hired.
   58         (3) FIDUCIARY DUTY OF CARE.—Each appointed public official
   59  and executive officer owes a fiduciary duty of care to the
   60  governmental entity he or she serves and has a duty to:
   61         (a) Act in accordance with the laws, ordinances, rules,
   62  policies, and terms governing his or her office or employment.
   63         (b) Act with the care, competence, and diligence normally
   64  exercised by private business professionals in similar corporate
   65  and proprietary circumstances.
   66         (c) Act only within the scope of his or her authority.
   67         (d) Refrain from conduct that is likely to damage the
   68  financial or economic interests of the governmental entity.
   69         (e) Use reasonable efforts to maintain documentation in
   70  accordance with applicable laws.
   71         (f) Maintain reasonable oversight of any delegated
   72  authority and discharge his or her duties with the care that a
   73  reasonably prudent person in a like private business position
   74  would believe appropriate under the circumstances, and must:
   75         1. Become reasonably informed in connection with any
   76  decisionmaking function;
   77         2. Become reasonably informed when devoting attention to
   78  any oversight function;
   79         3. Keep reasonably informed concerning the affairs of the
   80  governmental entity; and
   81         4. Keep reasonably informed concerning the performance of a
   82  governmental entity’s executive officers or other officers,
   83  agents, or employees.
   84         (4) TRAINING REQUIREMENT.—
   85         (a) Beginning January 1, 2021, each appointed public
   86  official and executive officer of a governmental entity shall
   87  complete a minimum of 5 hours of board governance training for
   88  each term served.
   89         1. An appointed public official or executive officer
   90  holding office or employed by a governmental entity on January
   91  1, 2021, shall complete the 5 hours of board governance training
   92  before the expiration of his or her term of service.
   93         2. An appointed public official or executive officer who is
   94  appointed, reappointed, or hired after January 1, 2021, shall
   95  complete the 5 hours of board governance training within 180
   96  days after the date of his or her appointment, reappointment, or
   97  hire.
   98         (b) By January 1, 2021, the department shall:
   99         1. Contract for or approve a board governance training
  100  program that includes an affordable web-based electronic media
  101  option; or
  102         2. Publish a list of approved board governance training
  103  providers on its website. A provider may include a Florida
  104  College System institution, a state university, a nationally
  105  recognized entity specializing in board governance education, or
  106  any other entity deemed qualified by the department as capable
  107  of providing the minimum training requirements specified in this
  108  subsection.
  109         (c) The board governance training programs must provide, at
  110  a minimum, educational materials and instruction on the
  111  following:
  112         1. Generally accepted corporate board governance principles
  113  and best practices; corporate board fiduciary duty of care legal
  114  analyses; corporate board oversight and evaluation procedures;
  115  governmental entity responsibilities; executive officer
  116  responsibilities; executive officer performance evaluations;
  117  selecting, monitoring, and evaluating an executive management
  118  team; reviewing and approving proposed investments,
  119  expenditures, and budget plans; financial accounting and capital
  120  allocation principles and practices; and new governmental entity
  121  member orientation.
  122         2.The fiduciary duty of care and liabilities imposed upon
  123  appointed public officials and executive officers pursuant to
  124  this section.
  125         (d) A governmental entity complies with the training
  126  requirement under this subsection by providing a department
  127  approved program or contracting with a provider listed by the
  128  department under subparagraph (b)2. However, for governmental
  129  entities with annual revenues of less than $300,000, board
  130  governance training may be provided by in-house counsel of the
  131  governmental entity or the unit of government that created the
  132  governmental entity, if applicable, so long as the training
  133  complies with the minimum course content established by
  134  department rule.
  135         (e)Within 30 days after completion of the board governance
  136  training, each appointed public official and executive officer
  137  shall certify, in writing or electronic form and under oath, to
  138  the department that he or she:
  139         1. Has completed the training required by this subsection;
  140         2. Has read the laws and relevant policies applicable to
  141  his or her position;
  142         3. Will work to uphold such laws and policies to the best
  143  of his or her ability; and
  144         4. Will faithfully discharge his or her fiduciary
  145  responsibility, as imposed by this section.
  146         (f) The department shall adopt rules to implement this
  147  subsection.
  148         (g) This subsection does not apply to appointed public
  149  officials and executive officers of governmental entities whose
  150  annual revenues are less than $100,000 or to appointed public
  151  officials who hold elected office in another capacity.
  152         (5) APPOINTMENT OF EXECUTIVE OFFICERS AND GENERAL
  153  COUNSELS.—The appointment of any executive officer or general
  154  counsel is subject to approval by a majority vote of the
  155  governing body of the governmental entity.
  156         (6) STANDARDS FOR LEGAL COUNSEL.—All legal counsel employed
  157  by a governmental entity must represent the legal interest and
  158  position of the governing body of the governmental entity and
  159  not the interest of any individual or employee of the
  160  governmental entity.
  161         Section 3. This act shall take effect July 1, 2020.