Florida Senate - 2020 COMMITTEE AMENDMENT
Bill No. SB 1270
Ì116502qÎ116502
LEGISLATIVE ACTION
Senate . House
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The Committee on Governmental Oversight and Accountability (Lee)
recommended the following:
1 Senate Amendment (with title amendment)
2
3 Delete everything after the enacting clause
4 and insert:
5 Section 1. The Division of Law Revision is directed to
6 create part IX of chapter 112, Florida Statutes, consisting of
7 s. 112.89, Florida Statutes, to be entitled “Fiduciary Duty of
8 Care for Appointed Public Officials and Executive Officers.”
9 Section 2. Section 112.89, Florida Statutes, is created to
10 read:
11 112.89 Fiduciary duty of care.—
12 (1) LEGISLATIVE FINDINGS AND PURPOSE.—The Legislature finds
13 that appointed public officials and executive officers acting on
14 behalf of governmental entities owe a fiduciary duty to the
15 entities they serve. The Legislature finds that codifying a
16 fiduciary duty of care will require that appointed public
17 officials and executive officers stay adequately informed of
18 affairs, perform due diligence, perform reasonable oversight,
19 and practice fiscal responsibility regarding decisions involving
20 corporate and proprietary commitments on behalf of the entity
21 they serve.
22 (2) DEFINITIONS.—
23 (a) “Appointed public official” means either a “local
24 officer” as defined in s. 112.3145(1)(a)2. or a “state officer”
25 as defined in s. 112.3145(1)(c)2. and 3.
26 (b) “Department” means the Department of Business and
27 Professional Regulation.
28 (c) “Executive officer” means the chief executive officer
29 of a governmental entity to which an appointed public official
30 is appointed.
31 (d) “Governmental entity” means the entity, or a board, a
32 council, a commission, an authority, or other body thereof, to
33 which an appointed public official or an executive officer is
34 appointed or hired.
35 (3) FIDUCIARY DUTY OF CARE.—Each appointed public official
36 and executive officer owes a fiduciary duty of care to the
37 applicable entity in accordance with law he or she serves and
38 has a duty to:
39 (a) Act in accordance with the laws, ordinances, rules,
40 policies, and terms governing his or her office or employment.
41 (b) Act with the care, competence, and diligence normally
42 exercised by private business professionals in similar corporate
43 and proprietary circumstances.
44 (c) Act only within the scope of his or her authority.
45 (d) Refrain from conduct that is likely to damage the
46 financial or economic interests of the governmental entity.
47 (e) Use reasonable efforts to maintain documentation in
48 accordance with applicable laws.
49 (f) Maintain reasonable oversight of any delegated
50 authority and discharge his or her duties with the care that a
51 reasonably prudent person in a like business position would
52 believe appropriate under the circumstances, and must:
53 1. Become reasonably informed in connection with any
54 decisionmaking function;
55 2. Become reasonably informed when devoting attention to
56 any oversight function;
57 3. Keep reasonably informed concerning the affairs of the
58 governmental entity; and
59 4. Keep reasonably informed concerning the performance of a
60 governmental entity’s executive officers or other officers,
61 agents, or employees.
62 (4) TRAINING REQUIREMENT.—
63 (a) Beginning January 1, 2021, each appointed public
64 official and executive officer shall complete a minimum of 5
65 hours of board governance training for each term served.
66 1. An appointed public official or executive officer
67 holding office or employed by an entity on January 1, 2021,
68 shall complete the 5 hours of board governance training before
69 the expiration of his or her term of service. If an appointed
70 public official or executive officer is employed under a
71 contract that does not specify a termination date for
72 employment, the public official or executive officer shall
73 complete the 5 hours of training by January 1, 2022, and once
74 every 4 years thereafter for the duration of their employment.
75 2. An appointed public official or executive officer who is
76 appointed, reappointed, or hired after January 1, 2021, shall
77 complete the 5 hours of board governance training within 180
78 days after the date of his or her appointment, reappointment, or
79 hire.
80 (b) By January 1, 2021, the department shall:
81 1. Contract for or approve a board governance training
82 program that includes an affordable web-based electronic media
83 option; or
84 2. Publish a list of approved board governance training
85 providers on its website. A provider may include a Florida
86 College System institution, a state university, a nationally
87 recognized entity specializing in board governance education, or
88 any other entity deemed qualified by the department as capable
89 of providing the minimum training requirements specified in this
90 subsection.
91 (c) The board governance training programs must provide, at
92 a minimum, educational materials and instruction on the
93 following:
94 1. Generally accepted corporate board governance principles
95 and best practices; corporate board fiduciary duty of care legal
96 analyses; corporate board oversight and evaluation procedures;
97 governmental entity responsibilities; executive officer
98 responsibilities; executive officer performance evaluations;
99 selecting, monitoring, and evaluating an executive management
100 team; reviewing and approving proposed investments,
101 expenditures, and budget plans; financial accounting and capital
102 allocation principles and practices; and new governmental entity
103 member orientation.
104 2. The fiduciary duty of care and obligations imposed upon
105 appointed public officials and executive officers pursuant to
106 this section.
107 (d) A governmental entity complies with the training
108 requirement under this subsection by providing a department
109 approved program or contracting with a provider listed by the
110 department under subparagraph (b)2. However, for governmental
111 entities with annual revenues of less than $300,000, board
112 governance training may be provided by in-house counsel of the
113 governmental entity or the unit of government that created the
114 governmental entity, if applicable, so long as the training
115 complies with the minimum course content established by
116 department rule.
117 (e) Within 30 days after completion of the board governance
118 training, each appointed public official and executive officer
119 shall certify, in writing or electronic form and under oath, to
120 the department that he or she:
121 1. Has completed the training required by this subsection;
122 2. Has read the laws and relevant policies applicable to
123 his or her position;
124 3. Will work to uphold such laws and policies to the best
125 of his or her ability; and
126 4. Will faithfully discharge his or her fiduciary
127 responsibility, as imposed by this section.
128 (f) The department shall adopt rules to implement this
129 subsection.
130 (g) This subsection does not apply to:
131 1. Appointed public officials and executive officers of
132 governmental entities whose annual revenues are less than
133 $100,000 or to appointed public officials who hold elected
134 office in another capacity; or
135 2. An appointed public official or executive officer who
136 completes board governance training involving fiduciary duties
137 or responsibilities which is required under any other state law.
138 (5) APPOINTMENT OF EXECUTIVE OFFICERS AND GENERAL
139 COUNSELS.—The appointment of any executive officer or general
140 counsel is subject to approval by a majority vote of the
141 governmental entity.
142 (6) STANDARDS FOR LEGAL COUNSEL.—All legal counsel employed
143 by a governmental entity must represent the legal interests and
144 positions of the governmental entity and not the interest of any
145 individual or employee of the governmental entity, unless such
146 representation is directed by the governmental entity.
147 Section 3. This act shall take effect July 1, 2020.
148
149 ================= T I T L E A M E N D M E N T ================
150 And the title is amended as follows:
151 Delete everything before the enacting clause
152 and insert:
153 A bill to be entitled
154 An act relating to the fiduciary duty of care for
155 appointed public officials and executive officers;
156 providing a directive to the Division of Law Revision
157 to create part IX of ch. 112, F.S.; creating s.
158 112.89, F.S.; providing legislative findings and
159 purpose; defining terms; establishing standards for
160 the fiduciary duty of care for appointed public
161 officials and executive officers of specified
162 governmental entities; requiring training on board
163 governance beginning on a specified date; requiring
164 the Department of Business and Professional Regulation
165 to contract for or approve such training programs or
166 publish a list of approved training providers;
167 specifying requirements for such training; authorizing
168 training to be provided by in-house counsel for
169 certain governmental entities; requiring appointed
170 public officials and executive officers to certify
171 their completion of the annual training; requiring the
172 department to adopt rules; providing exceptions to the
173 training requirement; specifying requirements for the
174 appointment of executive officers and general counsels
175 of governmental entities; specifying standards for
176 legal counsel; providing an effective date.