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.