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