Florida Senate - 2011    (Corrected Copy)    (Proposed Committee
       Bill) SPB 7230
       
       
       FOR CONSIDERATION By the Committee on Governmental Oversight and
       Accountability
       
       
       
       585-02961A-11                                         20117230__
    1                        A bill to be entitled                      
    2         An act relating to a review under the Open Government
    3         Sunset Review Act; transferring, renumbering, and
    4         amending s. 215.44(8), F.S., which provides exemptions
    5         from public-records requirements for the State Board
    6         of Administration; creating s. 215.440, F.S.;
    7         specifying information that does not constitute
    8         proprietary confidential business information held by
    9         the State Board of Administration; requiring the State
   10         Board of Administration to maintain a written list of
   11         records covered under a verified, written declaration;
   12         conforming cross-references; making editorial changes;
   13         removing the scheduled repeal of the exemptions;
   14         amending s. 215.47, F.S.; conforming cross-references;
   15         providing an effective date.
   16  
   17  Be It Enacted by the Legislature of the State of Florida:
   18  
   19         Section 1. Subsection (8) of section 215.44, Florida
   20  Statutes, is transferred and renumbered as section 215.440,
   21  Florida Statutes, and is amended to read:
   22         215.440 Board of Administration; public-record exemptions.—
   23         (1)(8)(a) In order to effectively and efficiently
   24  administer the real estate investment program of the State Board
   25  of Administration, the Legislature finds a public necessity in
   26  protecting specified records of the board. Accordingly, records
   27  and information relating to acquiring, hypothecating, or
   28  disposing of real property or related personal property or
   29  mortgage interests in same, as well as interest in collective
   30  real estate investment funds, publicly traded securities, or
   31  private placement investments, are confidential and exempt from
   32  s. 119.07(1) in order to protect proprietary information
   33  requisite to the board’s ability to transact arms length
   34  negotiations necessary to successfully compete in the real
   35  estate investment market. All reports and documents relating to
   36  value, offers, counteroffers, or negotiations are confidential
   37  and exempt from s. 119.07(1) until closing is complete and all
   38  funds have been disbursed. Reports and documents relating to
   39  tenants, leases, contracts, rent rolls, and negotiations in
   40  progress are confidential and exempt from the provisions of s.
   41  119.07(1) until the executive director determines that releasing
   42  such information would not be detrimental to the interests of
   43  the board and would not cause a conflict with the fiduciary
   44  responsibilities of the State Board of Administration.
   45         (2)(b) In order to effectively and efficiently administer
   46  the investment programs of the board, the Legislature finds a
   47  public necessity in protecting records other than those
   48  described in subsection (1) paragraph (a). Accordingly, records
   49  and other information relating to investments made by the board
   50  pursuant to its constitutional and statutory investment duties
   51  and responsibilities are confidential and exempt from s.
   52  119.07(1) until 30 days after completion of an investment
   53  transaction. However, if in the opinion of the executive
   54  director of the board it would be detrimental to the financial
   55  interests of the board or would cause a conflict with the
   56  fiduciary responsibilities of the board, information concerning
   57  service provider fees may be maintained as confidential and
   58  exempt from s. 119.07(1) until 6 months after negotiations
   59  relating to such fees have been terminated. This exemption
   60  prevents the use of confidential internal investment decisions
   61  of the State Board of Administration for improper personal gain.
   62         (3)(a)(c)1. As used in this paragraph, the term:
   63         1.a. “Alternative investment” means an investment by the
   64  State Board of Administration in a private equity fund, venture
   65  fund, hedge fund, or distress fund or a direct investment in a
   66  portfolio company through an investment manager.
   67         2.b. “Alternative investment vehicle” means the limited
   68  partnership, limited liability company, or similar legal
   69  structure or investment manager through which the State Board of
   70  Administration invests in a portfolio company.
   71         3.c. “Portfolio company” means a corporation or other
   72  issuer, any of whose securities are owned by an alternative
   73  investment vehicle or the State Board of Administration and any
   74  subsidiary of such corporation or other issuer.
   75         4.d. “Portfolio positions” means individual investments in
   76  portfolio companies which are made by the alternative investment
   77  vehicles, including information or specific investment terms
   78  associated with any portfolio company investment.
   79         5.e. “Proprietor” means an alternative investment vehicle,
   80  a portfolio company in which the alternative investment vehicle
   81  is invested, or an outside consultant, including the respective
   82  authorized officers, employees, agents, or successors in
   83  interest, which controls or owns information provided to the
   84  State Board of Administration.
   85         6.f. “Proprietary confidential business information” means
   86  information that has been designated by the proprietor when
   87  provided to the State Board of Administration as information
   88  that is owned or controlled by a proprietor; that is intended to
   89  be and is treated by the proprietor as private, the disclosure
   90  of which would harm the business operations of the proprietor
   91  and has not been intentionally disclosed by the proprietor
   92  unless pursuant to a private agreement that provides that the
   93  information will not be released to the public except as
   94  required by law or legal process, or pursuant to law or an order
   95  of a court or administrative body; and that concerns:
   96         a.(I) Trade secrets as defined in s. 688.002.
   97         b.(II) Information provided to the State Board of
   98  Administration regarding a prospective investment in a private
   99  equity fund, venture fund, hedge fund, distress fund, or
  100  portfolio company which is proprietary to the provider of the
  101  information.
  102         c.(III) Financial statements and auditor reports of an
  103  alternative investment vehicle.
  104         d.(IV) Meeting materials of an alternative investment
  105  vehicle relating to financial, operating, or marketing
  106  information of the alternative investment vehicle.
  107         e.(V) Information regarding the portfolio positions in
  108  which the alternative investment vehicles invest.
  109         f.(VI) Capital call and distribution notices to investors
  110  of an alternative investment vehicle.
  111         g.(VII) Alternative investment agreements and related
  112  records.
  113         h.(VIII) Information concerning investors, other than the
  114  State Board of Administration, in an alternative investment
  115  vehicle.
  116         7.g. “Proprietary confidential business information” does
  117  not include:
  118         a.(I) The name, address, and vintage year of an alternative
  119  investment vehicle and the identity of the principals involved
  120  in the management of the alternative investment vehicle.
  121         b.(II) The dollar amount of the commitment made by the
  122  State Board of Administration to each alternative investment
  123  vehicle since inception.
  124         c.(III) The dollar amount and date of cash contributions
  125  made by the State Board of Administration to each alternative
  126  investment vehicle since inception.
  127         d.(IV) The dollar amount, on a fiscal-year-end basis, of
  128  cash distributions received by the State Board of Administration
  129  from each alternative investment vehicle.
  130         e.(V) The dollar amount, on a fiscal-year-end basis, of
  131  cash distributions received by the State Board of Administration
  132  plus the remaining value of alternative-vehicle assets that are
  133  attributable to the State Board of Administration’s investment
  134  in each alternative investment vehicle.
  135         f.(VI) The net internal rate of return of each alternative
  136  investment vehicle since inception.
  137         g.(VII) The investment multiple of each alternative
  138  investment vehicle since inception.
  139         h.(VIII) The dollar amount of the total management fees and
  140  costs paid on an annual fiscal-year-end basis by the State Board
  141  of Administration to each alternative investment vehicle.
  142         i.(IX) The dollar amount of cash profit received by the
  143  State Board of Administration from each alternative investment
  144  vehicle on a fiscal-year-end basis.
  145         j. A description of any compensation, fees, or expenses,
  146  including the amount or value, paid or agreed to be paid by a
  147  proprietor to any person to solicit the board to make an
  148  alternative investment or investment through an alternative
  149  investment vehicle. This does not apply to an executive officer,
  150  general partner, managing member, or other employee of the
  151  proprietor, who is paid by the proprietor to solicit the board
  152  to make such investments.
  153         (b)2. Proprietary confidential business information held by
  154  the State Board of Administration regarding alternative
  155  investments is confidential and exempt from s. 119.07(1) and s.
  156  24(a), Art. I of the State Constitution for 10 years after the
  157  termination of the alternative investment. This exemption
  158  applies to proprietary confidential business information held by
  159  the State Board of Administration before, on, or after October
  160  1, 2006.
  161         (c)1.3. Notwithstanding the provisions of paragraph (b)
  162  subparagraph 2., a request to inspect or copy a record under s.
  163  119.07(1) which contains proprietary confidential business
  164  information shall be granted if the proprietor of the
  165  information fails, within a reasonable period of time after the
  166  request is received by the State Board of Administration, to
  167  verify the following to the State Board of Administration
  168  through a written declaration in the manner provided by s.
  169  92.525:
  170         a. That the requested record contains proprietary
  171  confidential business information and the specific location of
  172  such information within the record;
  173         b. If the proprietary confidential business information is
  174  a trade secret, a verification that it is a trade secret as
  175  defined in s. 688.002;
  176         c. That the proprietary confidential business information
  177  is intended to be and is treated by the proprietor as private,
  178  is the subject of efforts of the proprietor to maintain its
  179  privacy, and is not readily ascertainable or publicly available
  180  from any other source; and
  181         d. That the disclosure of the proprietary confidential
  182  business information to the public would harm the business
  183  operations of the proprietor.
  184         2. The State Board of Administration shall maintain a list
  185  and a description of the records covered by any verified,
  186  written declaration made under this paragraph.
  187         (d)4. Any person may petition a court of competent
  188  jurisdiction for an order for the public release of those
  189  portions of any record made confidential and exempt by paragraph
  190  (b) subparagraph 2. Any action under this subparagraph must be
  191  brought in Leon County, Florida, and the petition or other
  192  initial pleading shall be served on the State Board of
  193  Administration and, if determinable upon diligent inquiry, on
  194  the proprietor of the information sought to be released. In any
  195  order for the public release of a record under this
  196  subparagraph, the court shall make a finding that the record or
  197  portion thereof is not a trade secret as defined in s. 688.002,
  198  that a compelling public interest is served by the release of
  199  the record or portions thereof which exceed the public necessity
  200  for maintaining the confidentiality of such record, and that the
  201  release of the record will not cause damage to or adversely
  202  affect the interests of the proprietor of the released
  203  information, other private persons or business entities, the
  204  State Board of Administration, or any trust fund, the assets of
  205  which are invested by the State Board of Administration.
  206         5. This paragraph is subject to the Open Government Sunset
  207  Review Act in accordance with s. 119.15 and shall stand repealed
  208  on October 2, 2011, unless reviewed and saved from repeal
  209  through reenactment by the Legislature.
  210         Section 2. Subsection (15) of section 215.47, Florida
  211  Statutes, is amended to read:
  212         215.47 Investments; authorized securities; loan of
  213  securities.—Subject to the limitations and conditions of the
  214  State Constitution or of the trust agreement relating to a trust
  215  fund, moneys available for investments under ss. 215.44-215.53
  216  may be invested as follows:
  217         (15) With no more, in the aggregate, than 10 percent of any
  218  fund in alternative investments, as defined in s.
  219  215.440(3)(a)1. 215.44(8)(c)1.a., through participation in the
  220  vehicles defined in s. 215.440(3)(a)2. 215.44(8)(c)1.b., or in
  221  securities or investments that are not publicly traded and are
  222  not otherwise authorized by this section.
  223         Section 3. This act shall take effect October 1, 2011.