Senate Bill 1056c1

CODING: Words stricken are deletions; words underlined are additions.



    Florida Senate - 1998                           CS for SB 1056

    By the Committee on Governmental Reform and Oversight and
    Senator Kurth




    302-1940-98

  1                      A bill to be entitled

  2         An act relating to financial matters; amending

  3         s. 18.10, F.S., which provides requirements for

  4         deposit and investment of state money; revising

  5         the standards that certain corporate

  6         obligations and state and local government

  7         obligations must meet to be qualified for such

  8         investment; authorizing investment in certain

  9         foreign bonds and certain convertible debt

10         obligations of corporations domiciled in the

11         United States; amending s. 766.315, F.S.;

12         authorizing the association to invest plan

13         funds only in investments and securities

14         described in s. 215.47, F.S.; providing an

15         effective date.

16

17  Be It Enacted by the Legislature of the State of Florida:

18

19         Section 1.  Subsection (2) of section 18.10, Florida

20  Statutes, is amended to read:

21         18.10  Deposits and investments of state money.--

22         (2)  The Treasurer shall make funds available to meet

23  the disbursement needs of the state. Funds which are not

24  needed for this purpose shall be placed in qualified public

25  depositories that will pay rates established by the Treasurer

26  at levels not less than the prevailing rate for United States

27  Treasury securities with a corresponding maturity. In the

28  event money is available for interest-bearing time deposits or

29  savings accounts as provided herein and qualified public

30  depositories are unwilling to accept such money and pay

31  thereon the rates established above, then such money which

                                  1

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 1998                           CS for SB 1056
    302-1940-98




  1  qualified public depositories are unwilling to accept shall be

  2  invested in:

  3         (a)  Direct United States Treasury obligations.

  4         (b)  Obligations of the Federal Farm Credit Banks.

  5         (c)  Obligations of the Federal Home Loan Bank and its

  6  district banks.

  7         (d)  Obligations of the Federal Home Loan Mortgage

  8  Corporation, including participation certificates.

  9         (e)  Obligations guaranteed by the Government National

10  Mortgage Association.

11         (f)  Obligations of the Federal National Mortgage

12  Association.

13         (g)  Commercial paper of prime quality of the highest

14  letter and numerical rating as provided for by at least one

15  nationally recognized rating service.

16         (h)  Time drafts or bills of exchange drawn on and

17  accepted by a commercial bank, otherwise known as "bankers

18  acceptances," which are accepted by a member bank of the

19  Federal Reserve System having total deposits of not less than

20  $400 million or which are accepted by a commercial bank which

21  is not a member of the Federal Reserve System with deposits of

22  not less than $400 million and which is licensed by a state

23  government or the Federal Government, and whose senior debt

24  issues are rated in one of the two highest rating categories

25  by a nationally recognized rating service and which are held

26  in custody by a domestic bank which is a member of the Federal

27  Reserve System.

28         (i)  Intermediate-term Corporate obligations or

29  corporate master notes of any corporation within the United

30  States, if the long-term obligations of such corporation are

31  rated by at least two nationally recognized rating services in

                                  2

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 1998                           CS for SB 1056
    302-1940-98




  1  any one of the four three highest classifications. However, if

  2  such obligations are rated by only one nationally recognized

  3  rating service, then the obligations shall be rated in any one

  4  of the two highest classifications.

  5         (j)  Obligations of the Student Loan Marketing

  6  Association.

  7         (k)  Obligations of the Resolution Funding Corporation.

  8         (l)  Asset-backed or mortgage-backed securities of the

  9  highest credit quality.

10         (m)  Any obligations not previously listed which are

11  guaranteed as to principal and interest by the full faith and

12  credit of the United States Government or are obligations of

13  United States agencies or instrumentalities which are rated in

14  the highest category by a nationally recognized rating

15  service.

16         (n)  Commingled no-load investment funds or no-load

17  mutual funds in which all securities held by the funds are

18  authorized in this subsection.

19         (o)  Money market mutual funds as defined and regulated

20  by the Securities and Exchange Commission.

21         (p)  Obligations of state and local governments rated

22  in any of the four three highest classifications by at least

23  two one or more nationally recognized rating services if their

24  purchase is for the purpose of meeting federal investment

25  requirements for funds accumulated from bonds or other

26  obligations. However, if such obligations are rated by only

27  one nationally recognized rating service, then the obligations

28  shall be rated in any one of the two highest classifications.

29         (q)  Derivatives of investment instruments authorized

30  in paragraphs (a) through (m).

31

                                  3

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 1998                           CS for SB 1056
    302-1940-98




  1         (r)  Covered put and call options on investment

  2  instruments authorized in this subsection for the purpose of

  3  hedging transactions by investment managers to mitigate risk

  4  or to facilitate portfolio management.

  5         (s)  Negotiable certificates of deposit issued by

  6  financial institutions whose long-term debt is rated in one of

  7  the three highest categories by at least two nationally

  8  recognized rating services, the investment in which shall not

  9  be prohibited by any provision of chapter 280.

10         (t)  Foreign bonds denominated in United States dollars

11  and registered with the Securities and Exchange Commission for

12  sale in the United States, if the long-term obligations of

13  such issuers are rated by at least two nationally recognized

14  rating services in any one of the four highest

15  classifications.  However, if such obligations are rated by

16  only one nationally recognized rating service, the obligations

17  shall be rated in any one of the two highest classifications.

18         (u)  Convertible debt obligations of any corporation

19  domiciled within the United States, if the convertible debt

20  issue is rated by at least two nationally recognized rating

21  services in any one of the four highest classifications.

22  However, if such obligations are rated by only one nationally

23  recognized rating service, then the obligations shall be rated

24  in any one of the two highest classifications.

25         (v)(t)  Securities not otherwise described in this

26  subsection. However, not more than 3 percent of the funds

27  under the control of the Treasurer shall be invested in

28  securities described in this paragraph.

29

30  These investments may be in varying maturities and may be in

31  book-entry form. Investments made pursuant to this subsection

                                  4

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 1998                           CS for SB 1056
    302-1940-98




  1  may be under repurchase agreement. The Treasurer is authorized

  2  to hire registered investment advisers and other consultants

  3  to assist in investment management and to pay fees directly

  4  from investment earnings. Investment securities, proprietary

  5  investment services related to contracts, performance

  6  evaluation services, investment-related equipment or software

  7  used directly to assist investment trading or investment

  8  accounting operations including bond calculators, telerates,

  9  Bloombergs, special program calculators, intercom systems, and

10  software used in accounting, communications, and trading, and

11  advisory and consulting contracts made under this section are

12  exempt from the provisions of chapter 287.

13         Section 2.  Paragraph (e) of subsection (5) of section

14  766.315, Florida Statutes, is amended to read:

15         766.315  Florida Birth-Related Neurological Injury

16  Compensation Association; board of directors.--

17         (5)

18         (e)  Funds held on behalf of the plan are funds of this

19  state, and the association may invest plan funds only in the

20  investments and securities described in s. 215.47 and is

21  subject to the limitations on investments contained in that

22  section. Any funds held on behalf of the plan must be invested

23  in interest-bearing investments by the association. All income

24  derived from such investments will be credited to the plan.

25         Section 3.  This act shall take effect July 1, 1998.

26

27

28

29

30

31

                                  5

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 1998                           CS for SB 1056
    302-1940-98




  1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
  2                         Senate Bill 1056

  3

  4  The committee substitute authorizes the board of the Florida
    Birth-Related Neurological Injury Compensation Association to
  5  invest plan funds only in the investments and securities
    described in s. 215.47, F.S., and subject to the limitations
  6  on investments contained in that section.

  7

  8

  9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

                                  6