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The Committee on Transportation and Economic Development

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Appropriations (Webster) recommended the following substitute for

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amendment (147402):

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     Senate Amendment (with title amendment)

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     Between lines 487 and 488

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insert:

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     Section 13. The Legislature finds that prudent and sound

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infrastructure investments by the State Board of Administration

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of funds from the Lawton Chiles Endowment Fund in Florida

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infrastructure, specifically state-owned toll roads and toll

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facilities, that have potential to earn stable and competitive

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returns will serve the broad interests of the beneficiaries of

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the trust fund. The Legislature further finds that such

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infrastructure investments are being made by public investment

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funds worldwide and are being made or evaluated by public

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investment funds in many other states in this country. Therefore,

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it is a policy of this state that the State Board of

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Administration identify and invest in Florida infrastructure

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investments if such investments are consistent with and do not

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compromise or conflict with the obligations of the State Board of

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Administration.

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          Section 14.  Subsection (5) of section 215.44, Florida

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Statutes, is amended to read:

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     215.44  Board of Administration; powers and duties in

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relation to investment of trust funds.--

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     (5)  On or before January 1 of each year, the board shall

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provide to the Legislature a report including the following items

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for each fund which, by law, has been entrusted to the board for

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investment:

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     (a)  A schedule of the annual beginning and ending asset

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values and changes and sources of changes in the asset value of:

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     1.  Each fund managed by the board; and

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     2.  Each asset class and portfolio within the Florida

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Retirement System Trust Fund;

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     (b)  A description of the investment policy for each fund,

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and changes in investment policy for each fund since the previous

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annual report;

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     (c)  A description of compliance with investment strategy

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for each fund;

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     (d)  A description of the risks inherent in investing in

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financial instruments of the major asset classes held in the

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fund; and

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(e) A summary of the type and amount of infrastructure

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investments held in the fund; and

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     (f)(e) Other information deemed of interest by the

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executive director of the board.

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     Section 15.  Subsection (14) of section 215.47, Florida

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Statutes, is amended to read:

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     215.47  Investments; authorized securities; loan of

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securities.--Subject to the limitations and conditions of the

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State Constitution or of the trust agreement relating to a trust

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fund, moneys available for investments under ss. 215.44-215.53

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may be invested as follows:

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     (14) With no more in aggregate than 10 5 percent of any

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fund in alternative investments, as defined in s.

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215.44(8)(c)1.a., through participation in the vehicles defined

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in s. 215.44(8)(c)1.b. or infrastructure investments or

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securities or investments that are not publicly traded and are

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not otherwise authorized by this section. As used in this

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subsection, the term "infrastructure investments" includes but is

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not limited to investments in transportation, communication,

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social and utility infrastructure assets that have from time to

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time been owned and operated or funded by governments.

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Infrastructure assets include, but are not limited to toll roads,

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toll facilities, tunnels, rail facilities, intermodal facilities,

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airports, seaports, water distribution, sewage and desalination

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treatment facilities, cell towers, cable networks, broadcast

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towers and energy production and transmission facilities.

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Investments that are the subject of this paragraph may be

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effected through separate accounts, commingled vehicles,

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including, but not limited to, limited partnerships or limited

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liability companies, and direct equity, debt, mezzanine, claims,

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leases or other financial arrangements without reference to

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limitations within this section. Expenditures associated with

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the acquisition and operation of actual or potential

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infrastructure assets shall be included as part of the cost of

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infrastructure investment.

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     Section 16.  Paragraph (f) is added to subsection (4) of

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section 215.5601, Florida Statutes, to read:

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     215.5601  Lawton Chiles Endowment Fund.--

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     (4)  ADMINISTRATION.--

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     (f) Notwithstanding other provisions of law, the board,

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consistent with its fiduciary duties, shall lease, for up to 50

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years in whole or in part, the Alligator Alley from the Florida

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Department of Transportation with funds in the endowment if such

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investments are determined to provide an adequate rate of return

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to the endowment considering all investment risks involved, and

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if the amount of such investments shall be no less than 20

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percent and no more than 50 percent of the assets of the

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endowment at the time. The State Board of Administration shall

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make such investments prior to the end of the 2009-2010 fiscal

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year, and shall strive to make such investments prior to the end

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of the 2008-2009 fiscal year, consistent with its fiduciary

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duties. The board shall make a progress report to the President

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of the Senate and Speaker of the House of Representatives by

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March 1, 2009. The board may contract with the Florida Department

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of Transportation, other governmental entities, public benefit

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corporation or private sector entities, as appropriate, to

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operate and maintain the toll facility consistent with applicable

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federal and state laws and rules.

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     Section 17.  Section 334.305, Florida Statutes, is created

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to read:

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     334.305 .-- Lease of transportation facilities.-The

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Legislature finds and declares that there is a public need for

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the lease of transportation facilities to assist in the funding

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of the rapid construction of other safe and efficient

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transportation facilities for the purpose of promoting the

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mobility of persons and goods within this state, and that it is

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in the public's interest to provide for such lease to advance the

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construction of additional safe, convenient, and economical

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transportation facilities. The Legislature further finds and

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declares that any lease agreement of transportation facilities by

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and between the State Board of Administration, acting on behalf

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of a trust fund, and the department, shall be and remain fair to

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the beneficiaries of such trust fund and that any such agreement

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and the resulting infrastructure investment shall not be impaired

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by any act of this state or of any local government of this

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state.

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(1) (a) The department is authorized to enter into a lease

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agreement for up to 50 years with the State Board of

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Administration for Alligator Alley. Before approval, the

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department must determine that the proposed lease is in the

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public's best interest. The department and the State Board of

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Administration may separately engage the services of private

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consultants to assist in developing the lease agreement. In the

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terms and conditions of the lease agreement, the State Board of

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Administration, acting on behalf of trust fund participants and

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beneficiaries, shall not be disadvantaged relative to industry

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standard terms and conditions for institutional infrastructure

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investments. For the purpose of this section, the lease agreement

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may be maintained as an asset within a holding company

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established by the State Board of Administration and the holding

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company may sell non-controlling divisible interests, units or

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notes.

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(b) The department shall deposit all funds received from a

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lease agreement pursuant to this section into the State

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Transportation Trust Fund.

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(2) Agreements entered into pursuant to this section must

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provide for annual financial analysis of revenues and expenses

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required by the lease agreement and for any annual toll increases

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necessary to ensure that the terms of the lease agreement are

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met. The following provisions shall apply to such agreement:

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(a) The department shall lease, for up to 50 years and in

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whole or in part, Alligator Alley to the State Board of

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Administration. The lease agreement must ensure the

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transportation facility is properly operated, maintained,

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reconstructed and restored in accordance with state and federal

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laws and commercial standards applicable to other comparable

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infrastructure investments.

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(b) Any toll revenues shall be regulated pursuant to this

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section and to any provisions of s. 338.165(3) not in conflict

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with this section. The regulations governing the future increase

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of toll or fare revenues shall be included in the lease

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agreement, shall provide an adequate rate of return considering

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all risks involved, and may not subsequently be waived without

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prior express consent of the State Board of Administration.

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(c) If any law or rule of the state or any local

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government, or any Florida constitutional amendment, is passed

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that has the effect of materially impairing the lease agreement

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or the related infrastructure investment, either directly or

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indirectly, then the state, acting through the department or any

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other agency, shall immediately take action to remedy the

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situation by any means available, including taking back the

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leased infrastructure assets and making whole the effected trust

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fund. This provision may be enforced by legal or equitable

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action brought on behalf of the effected trust fund without

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regard to sovereign immunity.

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(d) The department shall provide an independent analysis

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that demonstrates the cost effectiveness and overall public

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benefit of the lease to the Legislature. Prior to completing the

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lease, in whole or in part, of Alligator Alley, the department

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shall submit pursuant to ch. 216 any budget amendments necessary

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for the expenditure of moneys received pursuant to the agreement

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for the operation and maintenance of the toll facility.

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(e) Prior to the development of the lease agreement, the

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department in consultation and concurrence with the State Board

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of Administration shall provide an investment grade traffic and

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revenue study prepared by a qualified and internationally

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recognized traffic and revenue expert that is accepted by the

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national bond rating agencies. The State Board of Administration

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may utilize independent experts to review or conduct such

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studies.

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(f) The agreement between the department and the State Board

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of Administration shall contain a provision that the department

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shall expend any funds received under this agreement only on

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transportation projects. Accountability for funds from the

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endowment which have been paid by the board shall reside with the

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department. The board is not responsible for the proper

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expenditure of or accountability concerning funds from the

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endowment after payment to the department.

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(3) The agreement for each toll facility leased, in whole

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or in part, pursuant to this section shall specify the

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requirements of federal, state, and local laws; state, regional,

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and local comprehensive plans; and department specifications for

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construction and engineering of roads and bridges.

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(4) The department may provide services to the State Board

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of Administration. Agreements for maintenance, law enforcement,

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and other services entered into pursuant to this section shall

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provide for full reimbursement for services rendered.

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(5) Using funds received from such lease, the department

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may submit a plan for approval to the Legislative Budget

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Commission to advance projects programmed in the adopted 5-year

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work program or projects increasing transportation capacity and

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costing greater than $500 million in the 10-year Strategic

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Intermodal Plan.

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(6) Notwithstanding s. 338.165 or any other provision of

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law, any remaining toll revenue shall be used as established in

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the lease agreement and in s.338.26.

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     Section 18. (1)Nothing in this act shall prohibit the State

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Board of Administration from pursuing or making infrastructure

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investments, especially in government-owned infrastructure in

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this state.

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     (2) The State Board of Administration shall report to the

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Legislature prior to the 2009 regular legislative session, on its

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ability to invest in infrastructure, including specifically

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addressing its ability to invest in government-owned

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infrastructure in this state.

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================ T I T L E  A M E N D M E N T ================

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And the title is amended as follows:

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     Between lines 48 and 49

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insert:

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providing legislative findings relating to investment of

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funds from the Lawton Chiles Endowment Fund in Florida

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infrastructure by the State Board of Administration;

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providing that such investment be the policy of the State

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Board of Administration; amending s. 215.44; including

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infrastructure investments in State Board of

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Administration annual reporting requirements; amending s.

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215.47; increasing the maximum allowable percent of any

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fund in alternative investments or infrastructure

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investments; defining infrastructure investments; amending

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s. 215.5601; directing the State Board of Administration

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to lease Alligator Alley for up to 50 years from the

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Department of Transportation using funds from the Lawton

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Chiles Endowment; limiting the investment of funds to

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between 20 and 50 percent of the endowment's assets;

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requiring a report to the Legislature; authorizing the

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board to contract with other government, public, and

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private entities to operate and maintain the toll

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facility; creating s. 334.305; providing a finding of

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public need for leasing transportation facilities to

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expedite provision of additional facilities; providing

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that infrastructure investment agreements may not be

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impaired by state or local act; authorizing a lease

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agreement of up to 50 years for Alligator Alley;

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authorizing the engagement of private consultants to

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develop the agreement; directing funds received by the

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department under this section to the State Transportation

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Trust Fund; providing lease agreement requirements;

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requiring adherence to state and federal laws and

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standards for transportation facilities operation and

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maintenance; requiring regulation of toll increases;

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authorizing state action to remedy impairments to the

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lease agreement; requiring an independent cost

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effectiveness analysis and traffic and revenue study;

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limiting the use of funds received under this act to

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transportation uses; requiring construction, engineering,

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maintenance, and law enforcement specifications in lease

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agreements; allowing the department to submit to the

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Legislative Budget Commission a plan for advancing

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transportation projects using funds received from a lease;

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requiring remaining toll revenue to be used in accordance

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with the lease agreement and s. 338.26; confirming the

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State Board of Administration's ability to invest in

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government-owned infrastructure;  

4/21/2008  2:56:00 PM     TR.TA.08192