Florida 2024 Regular Session

Florida House Bill H7071 Compare Versions

Version 1 (Old)

Version 2 (New)

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10	10		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
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14		-	1
	14	+	A bill to be entitled 1
15	15		An act relating to foreign investments by the State 2
16	16		Board of Administration; amending s. 215.47, F.S.; 3
17	17		conforming a provision to changes made by the act; 4
18	18		creating s. 215.4735, F.S.; defining terms; 5
19	19		prohibiting the State Board of Administration from 6
20	20		acquiring certain holdings on behalf of a specified 7
21	21		entity; requiring the board to initiate a review of 8
22	22		its direct holdings to make a specified determination 9
23	23		by a date certain; requiring the board to develop a 10
24	24		certain divestment plan for such holdings by a date 11
25	25		certain; requiring the board to divest from such 12
26	26		holdings according to the required plan by a date 13
27	27		certain; providing for an extension under specified 14
28	28		conditions; requiring that certain actions be adopted 15
29	29		and incorporated into a specified statement; providing 16
30	30		an effective date. 17
31	31		18
32	32		Be It Enacted by the Legislature of the State of Florida: 19
33	33		20
34	34		Section 1. Subsection (10) of section 215.47, Florida 21
35	35		Statutes, is amended to read: 22
36	36		215.47 Investments; authorized securities; loan of 23
37	37		securities.—Subject to the limitations and conditions of the 24
38	38		State Constitution or of the trust agreement relating to a trust 25
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47	47		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
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51	51		fund, moneys available for investments under ss. 215.44 -215.53 26
52	52		may be invested as follows: 27
53	53		(10)(a) As used in this subsection, the term "pecuniary 28
54	54		factor" means a factor that the State Board of Administration 29
55	55		prudently determines is expected to have a material effect on 30
56	56		the risk or returns of an investment b ased on appropriate 31
57	57		investment horizons consistent with applicable investment 32
58	58		objectives and funding policy. The term does not include the 33
59	59		consideration of the furtherance of any social, political, or 34
60	60		ideological interests. 35
61	61		(b) Notwithstanding any other law except for ss. 215.471, 36
62	62		215.4725, and 215.473, and 215.4735, when deciding whether to 37
63	63		invest and when investing the assets of any fund, the State 38
64	64		Board of Administration must make decisions based solely on 39
65	65		pecuniary factors and may not subordinate the interests of the 40
66	66		participants and beneficiaries of the fund to other objectives, 41
67	67		including sacrificing investment return or undertaking 42
68	68		additional investment risk to promote any nonpecuniary factor. 43
69	69		The weight given to any pecuniary factor must appropriate ly 44
70	70		reflect a prudent assessment of its impact on risk or returns. 45
71	71		(c) Investments made by the State Board of Administration 46
72	72		shall be designed to maximize the financial return to the fund 47
73	73		consistent with the risks incumbent in each investment and shall 48
74	74		be designed to preserve an appropriate diversification of the 49
75	75		portfolio. The board shall discharge its duties with respect to 50
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84	84		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
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88	88		a plan solely in the interest of its participants and 51
89	89		beneficiaries. The board in performing the above investment 52
90	90		duties shall comply with the fiduciary standards set forth in 53
91	91		the Employee Retirement Income Security Act of 1974 at 29 U.S.C. 54
92	92		s. 1104(a)(1)(A) through (C). Except as provided in paragraph 55
93	93		(b), in case of conflict with other provisions of law 56
94	94		authorizing investments, the in vestment and fiduciary standards 57
95	95		set forth in this paragraph prevail. 58
96	96		Section 2. Section 215.4735, Florida Statutes, is created 59
97	97		to read: 60
98	98		215.4735 Prohibited foreign investments. — 61
99	99		(1) As used in this section, the term: 62
100	100		(a) "Board" means the State Board of Administration. 63
101	101		(b) "China" means the government of the People's Republic 64
102	102		of China, the Chinese Communist Party, the Chinese military, or 65
103	103		any instrumentality thereof, or any combination thereof. 66
104	104		(c) "Chinese company" means a company that is pu blicly 67
105	105		known to be majority -owned by China. 68
106	106		(d) "Company" means a sole proprietorship, an 69
107	107		organization, an association, a corporation, a partnership, a 70
108	108		joint venture, a limited partnership, a limited liability 71
109	109		partnership, a limited liability company, or any other entity or 72
110	110		business association, including all wholly owned subsidiaries, 73
111	111		majority-owned subsidiaries, and parent companies, or an 74
112	112		affiliate of such entity or business association which exists 75
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125	125		for the purpose of making a profit. 76
126	126		(e) "Direct holdings" in a company means all securities of 77
127	127		that company which are held directly by the Florida Retirement 78
128	128		System Trust Fund or in an account or fund in which the Florida 79
129	129		Retirement System Trust Fund owns all shares or interests. The 80
130	130		term does not include indirect holdings in actively managed 81
131	131		investment funds, including a private equity fund, or holdings 82
132	132		in exchange-traded funds. 83
133	133		(f) "Florida Retirement System Trust Fund" means all 84
134	134		assets of the Florida Retirement System held by the board in its 85
135	135		capacity as a fiduciary pursuant to part I of chapter 121. 86
136	136		(g) "Indirect holdings" in a company means all securities 87
137	137		of that company which are held in a commingled fund or other 88
138	138		collective investment, such as a mutual fund, in which the 89
139	139		Florida Retirement System Trust Fund owns shares or interests, 90
140	140		together with other investors not subject to this section. 91
141	141		(h) "Majority-owned" means to have ownership of 50.1 92
142	142		percent or more of the outstanding equity interests of a 93
143	143		company. 94
144	144		(2)(a) The board may not acquire, on behalf of the Florida 95
145	145		Retirement System Trust Fund, direct holdings in a Chinese 96
146	146		company. 97
147	147		(b) The board must: 98
148	148		1. Initiate, no later than June 1, 2024, a review of all 99
149	149		current direct holdings to determine which direct holdings, if 100
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158	158		F L O R I D A H O U S E O F R E P R E S E N T A T I V E S
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162	162		any, include securitie s of a Chinese company. 101
163	163		2. Develop, no later than September 1, 2024, a divestment 102
164	164		plan for all direct holdings in Chinese companies. The 103
165	165		divestment plan must be developed and implemented consistent 104
166	166		with the fiduciary standards set forth in s. 215.47(10). 105
167	167		3. Complete divestment from direct holdings in Chinese 106
168	168		companies included in the divestment plan developed pursuant to 107
169	169		subparagraph 2. no later than September 1, 2025, or at such 108
170	170		later time if necessary for the board to implement the 109
171	171		divestment plan consistent with the fiduciary standards set 110
172	172		forth in s. 215.47(10). 111
173	173		(3) The board's actions taken in compliance with this 112
174	174		section, including all good faith determinations regarding 113
175	175		companies as required by this section, must be adopted and 114
176	176		incorporated into the investment policy statement as provided in 115
177	177		s. 215.475. 116
178	178		Section 3. This act shall take effect upon becoming a law. 117