The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Governmental Oversight and Accountability
BILL: SB 1678
INTRODUCER: Senator Leek and others
SUBJECT: Entities that Boycott Israel
DATE: March 17, 2025
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Harmsen McVaney GO Pre-meeting
2. JU
3. AP
I. Summary:
SB 1678 expands prohibitions on public entities’ engagements with companies that boycott
Israel. Specifically, it:
• Expands the definition of a ‘boycott of Israel’ to include an academic boycott of Israel in
which an educational institution (or any of its departments, centers, or other organs) enacts or
implements restrictive policies or participates in activities that restrict ongoing or potential
academic relationships on the basis of ties to Israel or its academic, educational, or research
institutions.
• Requires that the State Board of Administration (SBA), on behalf of the public fund, divest
from companies and other entities (including educational institutions and foreign
governments) that engage in a boycott of Israel.
• Requires that universities of the State University System endowment and retirement funds
divest from companies and other entities that engage in a boycott of Israel.
• Increases the threshold at which the SBA may take measures to preserve its investments by
requiring the SBA to divest from companies and entities that boycott Israel, until the
investment value of all scrutinized assets related to a scrutinized company or other entity that
boycotts Israel is valued at .50 percent of the total value of the public fund’s assets.
• Requires applicants for the Department of State’s arts and culture grants to certify that they
will comply with all relevant anti-discrimination laws and will not engage in antisemitic
discrimination during the term of their grant project and provides penalties for a violation of
such certification.
• Allows companies or entities that are on the scrutinized companies or other entities list that
boycott Israel list to contract with state agencies and local governments for up to $100,000
per contract. Previously, such companies were totally barred.
• Prohibits foreign educational institutions from entering into a contract of $1,000 or more with
state agencies and local governments, including for payments made to foreign educational
institutions by students who receive study abroad credit at state colleges and universities.
REVISED: BILL: SB 1678 Page 2
The bill likely has an insignificant fiscal impact on state and local government revenues and
expenditures.
The bill takes effect July 1, 2025.
II. Present Situation:
State Definition of Antisemitism
In 2024, the Legislature adopted a definition of “antisemitism” that closely mirrors the working
definition used by the International Holocaust Remembrance Alliance in order to assist with the
monitoring and reporting of anti-Semitic hate crimes and discrimination, and to make residents
aware of, and combat, such incidents.
1
However, the law “may not be construed to diminish or
infringe upon any right protected under the First Amendment to the United States Constitution or
to conflict with federal or state antidiscrimination laws.”
As provided in s. 1.105, F.S., antisemitism is the certain perception of Jewish individuals which
may be expressed as hatred toward such individuals. Rhetorical and physical manifestations of
antisemitism are directed toward Jewish and non-Jewish individuals and their property and
toward Jewish community institutions and religious facilities. Examples of antisemitism include,
but are not limited to:
• Calling for, aiding, or justifying the killing or harming of Jewish individuals.
• Making mendacious, dehumanizing, demonizing, or stereotypical allegations about Jewish
individuals as such or the power of Jewish people as a collective, such as the myth of a
worldwide Jewish conspiracy or of Jewish individuals controlling the media, economy,
government, or other societal institutions.
• Accusing Jewish people as a collective of being responsible for real or imagined wrongdoing
committed by a single Jewish person or group or for acts committed by non-Jewish
individuals.
• Denying the fact, scope, and mechanisms, such as gas chambers, or the intentionality of the
genocide of the Jewish people at the hands of Nazi Germany and its supporters and
accomplices during the Holocaust.
• Accusing Jewish people as a collective, or Israel as a state, of inventing or exaggerating the
Holocaust.
• Accusing Jewish citizens of being more loyal to Israel, or to the alleged priorities of Jewish
individuals worldwide, than to the interests of their respective nations.
• Denying Jewish people their right to self-determination, such as claiming that the existence
of the State of Israel is a racist endeavor.
• Applying double standards by requiring of the Jewish State of Israel a standard of behavior
not expected or demanded of any other democratic nation.
• Using the symbols and images associated with classic antisemitism, such as blood libel, to
characterize Israel or Israelis.
• Drawing comparisons of contemporary Israeli policy to that of the Nazis.
• Holding Jewish individuals collectively responsible for actions of the State of Israel.
1
Chapter 2024-262, Laws of Fla. BILL: SB 1678 Page 3
State Board of Administration - Generally
The State Board of Administration (SBA or Board) is established by the State Constitution.
2
The
Board derives its powers to oversee state funds from Art. XII, s. 9 of the State Constitution and
ch. 215, F.S. The Board serves as the state’s investment management organization, with
authority over 30 funds collectively valued at about $270.5 billion as of December 31, 2024,
including $220.2 billion in the state’s pension and investment plans for public employees, which
accounts for 81 percent of assets under management.
3
Other funds under management include
the Florida Hurricane Catastrophe Fund, Department of the Lottery Fund, Florida Prepaid
College and Florida College Investment Plan, FSU Research Foundation, Florida PRIME
(surplus funds of local governments) and the Police and Firefighters’ Premium Tax Trust Fund.
4
The Governor, Chief Financial Officer, and Attorney General serve as the SBA’s Board of
Trustees (Trustees), and delegate operational authority to an executive director and chief
investment officer.
5
A nine-member Investment Advisory Council provides guidance on
investment policy and strategy.
6
Specific Investment Responsibilities Relating to the Florida Retirement System Pension
Plan
The SBA invests the assets of the Florida Retirement System (both the Pension Plan and the
Investment Plan). As fiduciaries, the Board and its Trustees must act in the best interests of the
plan’s participants and beneficiaries. Generally, when deciding whether to invest, the Board and
the Trustees must make decisions based solely on pecuniary factors and may not subordinate the
interests of participants and beneficiaries to other objectives, including sacrificing investment
return or undertaking additional investment risk to promote any nonpecuniary interest.
7
In this instance, “pecuniary factor” means a factor that the SBA determines will likely have “a
material effect on the risk or returns of an investment based on appropriate investment horizons
consistent with applicable investment objectives and funding policy. The term does not include
the consideration of the furtherance of any social, political, or ideological interests.”
8
Pursuant to
s. 215.444, F.S., a nine-member Investment Advisory Council provides recommendations on
investment policy, strategy, and procedures. The SBA’s authority to invest the funds, including
Florida Retirement System (FRS) assets, is governed by s. 215.47, F.S., which provides a “legal
list” of the types of investments and how much of any fund may be invested in each investment
type.
9
2
Art. IV, s. 4(e) Fla. Const. (1968).
3
State Board of Administration, Performance Report Month Ending December 31, 2024, available at:
https://www.sbafla.com/media/sr1avumn/monthly-trustee-report_december-2024.pdf (last visited Mar. 14, 2025).
4
A full list of SBA-managed investment funds is available in the SBA’s Monthly Performance Report at page 5, supra
footnote 2.
5
Section 215.44, F.S.
6
Section 215.444(2), F.S.
7
Section 214.47(10)(b), F.S.
8
Section 215.47(10)(a), F.S.
9
Section 215.47, F.S., sets some key guidelines, such as:
• No more than 80 percent of assets may be invested in domestic common stocks.
• No more than 75 percent of assets may be invested in internally managed common stocks. BILL: SB 1678 Page 4
The Legislature has enacted three statutory exceptions to the normal fiduciary standards relating
to investments of the FRS. The exceptions apply to investments in (a) certain companies doing
business in Cuba, Syria, and Venezuela;
10
(b) certain companies doing business in Sudan or
Iran;
11
and (c) certain companies that boycott Israel or engage in a boycott of Israel.
12
These
statutory exceptions allow the Board and the Trustees to make decisions regarding investments
in these “scrutinized companies” without regard to the pecuniary factors and nonpecuniary
interests. The definition of “company” for purposes of this section includes all wholly-owned
subsidiaries, majority-owned subsidiaries, or parent companies of such entities or business
associations.
13
FRS Investment Plan Investment Funds
While the SBA manages the funds that constitute the Pension Plan, they do not manage
investments for the Investment Plan. The Investment Plan offers a diversified mix of primary
investment funds in which the member can choose to invest his or her funds. These investment
funds are managed by private providers (such as Fidelity, Prudential, Stephens, T. Rowe Price,
and others) and have associated annual fees, as well as retirement objectives.
14
Prohibited Investments by the SBA for Companies that Boycott Israel
In 2016, the Legislature enacted a requirement that the SBA, on behalf of the public fund,
15
divest from scrutinized companies that boycott Israel.
16
Section 215.4725, F.S., defines the term
“boycott Israel” or “boycott of Israel” to mean refusing to deal, terminating business activities, or
taking other actions to limit commercial relations with Israel, or persons or entities doing
business in Israel or in Israeli-controlled territories, in a discriminatory manner. This definition
does not include restrictive trade practices, or boycotts fostered or imposed by foreign countries
against Israel.
17
• No more than 3 percent of equity assets may be invested in the equity securities of any one corporation, except
when the securities of that corporation are included in any broad equity index or with approval of the Board;
and in such case, no more than 10 percent of equity assets may be invested in the equity securities of any one
corporation.
• No more than 80 percent of assets may be placed in corporate fixed income securities.
• No more than 25 percent of assets may be invested in notes secured by FHA-insured or VA-guaranteed first
mortgages on Florida real property, or foreign government general obligations with a 25-year default-free
history.
• No more than 25 percent of assets may be invested in foreign corporate or commercial securities or obligations.
10
Section 215.471, F.S.
11
Section 215.473, F.S.
12
Section 215.4725, F.S.
13
Section 215.4725(1)(b), F.S.
14
Florida Retirement System, Investment Plan—Investment Fund Summary, p. 6, January 2025,
https://www.myfrs.com/pdf/forms/invest_fund_summary.pdf (last visited Mar. 14, 2025).
15
The “public fund” is defined as “all funds, assets, trustee, and other designates under the SBA pursuant to part I of chapter
121.” This means those assets of the Florida Retirement System—both the pension plan as well as the investment plan.
16
Chapter 2016-36, Laws of Florida, codified as s. 215.4725, F.S.
17
Section 215.4725, F.S. BILL: SB 1678 Page 5
The Board must make its best efforts to identify all scrutinized companies in which the public
fund has direct or indirect holdings,
18
and assemble, update quarterly, and publish a list of the of
those companies
19
in which it has direct or indirect holdings, or could have such holdings in the
future. To this end, the Board has contracted with “external research” providers. After these
providers have identified the potential companies that may meet the definition of a scrutinized
company, the public fund’s staff review the providers’ assessments and, with other publicly
available information, determine whether a company has engaged in boycotts of Israel and
whether those operations have ceased.
20
Companies that engage in a boycott of Israel may be
subject to a divestment or prohibition on investment by the Board. Divestment does not apply to
indirect holdings in actively managed commingled investment funds
21
—i.e., where the SBA is
not the sole investor in the fund. Private equity funds are considered to be actively managed.
Once a company is placed on the list of scrutinized companies that boycott Israel, the Board
must inform the company of its status and that it may become subject to an investment
prohibition or divestment. The notice must also encourage the company to cease its boycott of
Israel within 90 days. If the scrutinized company abandons its boycott within 90 days of the
engagement, then the public fund must remove it from the Scrutinized Companies that Boycott
Israel List. If, after 90 days following the Board’s initial engagement company, the company
continues to boycott Israel, the Board must divest from all of the scrutinized company’s publicly
traded securities. The divestment must occur within 12 months of the company’s most recent
appearance on the scrutinized companies lists.
22
The public fund cannot acquire, on behalf of the
FRS, any securities of companies on the scrutinized companies lists.
23
The Board’s actions to comply with the prohibition on investing with companies on the
Scrutinized Companies that Boycott Israel List are adopted and incorporated into the Florida
Retirement System Trust Fund investment policy statement.
24
Changes to the investment policy
statement are reviewed by the Investment Advisory Council (IAC) and approved by the
Trustees.
25
The public fund may cease its divestment, or reinvest in previously divested companies, if the
value of all the fund’s assets under management decreases by 50 basis points (0.5 percent) or
more as a result of divestment.
26
If cessation of divestment is triggered, the SBA must provide
and update semiannually a written report to each member of the Board of Trustees, the President
of the Senate, and the Speaker of the House of Representatives prior to initial reinvestment.
27
18
Section 215.4725(2)(a), F.S.
19
A “scrutinized company” is one which boycotts Israel or engages in a boycott of Israel. Section 215.4725(1)(f), F.S.
20
Section 215.4725(2)-(3), F.S.
21
Section 215.4725(3)(d), F.S.
22
Section 215.4725(3), F.S.
23
Section 215.4725(3)(c), F.S.
24
See s. 215.475, F.S.
25
Section 215.4725(5), F.S.
26
Section 215.4725(6), F.S.
27
Id. BILL: SB 1678 Page 6
Department of State’s Arts and Cultural Grants
The Department of State (DOS), created in s. 20.10, F.S., houses the Division of Historical
Resources, Division of Cultural Affairs, and Division of Library and Information Services,
which administer grants pursuant to ch. 265, F.S.
Secretary of State – Florida’s Chief Cultural Officer
The Divisions of Cultural Affairs, Historical Resources, and Library and Information Services
within the DOS promote programs having substantial cultural, artistic, and indirect economic
significance that emphasize American creativity.
28
The Secretary of the DOS, as the head of
these divisions, is designated as “Florida's Chief Arts and Culture Officer” and is encouraged to
initiate and develop relationships between the state and foreign governmental officials in order to
promote Florida as the center of American creativity.
29
Division of Arts and Culture
The Division of Arts and Culture (Division) is Florida’s designated state arts agency. The
Division promotes arts and culture as essential to the quality of life for all Floridians. To promote
excellence and encourage access to cultural opportunities, the Division provides funding,
programs, and resources, including grants for programs and projects in: arts in education, local
arts agencies, state service organizations, museums, theater, dance, folk arts, literature, media
arts, multidisciplinary, music, sponsor/presenter, and visual arts.
30
The Florida Arts and Cultural Act (Act) is set forth in ss. 265.281-265.709, F.S., to provide state
support for, and to gain national and international recognition of, the efforts, works, and
performances of Florida artists, art agencies, museums, and nonprofit organizations.
31
The
Division is charged with directly administering and overseeing all programs authorized by the
Act and may adopt rules to do so.
32
This includes:
• Arts and cultural grants to support science museums, youth and children’s museums,
historical museums, local arts agencies, Florida artists, state service organizations, and
organizations that have cultural program activities;
33
• An endowment to provide matching funds to local sponsoring organizations that engage in
programs directly related to cultural activities;
34
and
• Grants to counties, municipalities, and qualifying nonprofit corporations for the acquisition,
renovation, or construction of cultural facilities.
35
28
Section 15.18, F.S.
29
Id.
30
Florida Department of State, Division of Arts and Culture, Mission, https://dos.fl.gov/cultural/about-us/mission/ (last
visited Mar. 14, 2025).
31
Section 265.282, F.S.
32
Section 265.284(3)(j), F.S.
33
Section 265.286, F.S.
34
Sections 265.601-265.606, F.S.
35
Section 265.701(1), F.S. BILL: SB 1678 Page 7
The Florida Council on Arts and Culture must review each application for a grant and must
annually submit to the Secretary for approval lists of all applications recommended by the
council for award of grants, arranged in order of priority.
36
Generally, eligibility for arts and culture grants require that:
37
• Grantees are in good standing with the Division of Arts and Culture and the Department of
State at the time of the application.
• The applicant is a public entity, or a Florida non-profit, tax exempt corporation that is
registered and in active status with Florida’s Division of Corporations.
• Experience in arts and cultural programming of at least 1 year.
• The Applicant register as a vendor with the Department of Financial Services and provide
their most recent Federal 990 form.
Procurement by Governmental Entities
Chapter 287, F.S., regulates state agency
38
procurement of personal property and services.
39
Agencies may use a variety of procurement methods, depending on the cost and characteristics
of the needed good or service, the complexity of the procurement, and the number of available
vendors. These include the following:
• "Single source contracts," which are used when an agency determines that only one vendor is
available to provide a commodity or service at the time of purchase;
• "Invitations to bid," which are used when an agency determines that standard services or
goods will meet needs, wide competition is available, and the vendor's experience will not
greatly influence the agency's results;
• "Requests for proposals," which are used when the procurement requirements allow for
consideration of various solutions and the agency believes more than two or three vendors
exist who can provide the required goods or services; and
• "Invitations to negotiate," which are used when negotiations are determined to be necessary
to obtain the best value and involve a request for high complexity, customized, mission-
critical services, by an agency dealing with a limited number of vendors.
40
36
Sections 265.286, 265.606(1)(c), and 265.701(3), F.S.
37
Florida Department of State, General Program Support Grant Guidelines, p. 5
https://files.floridados.gov/media/706640/gps-grant-guidelines-2025.pdf (last visited Mar. 14, 2025).
38
As defined in s. 287.012(1), F.S., “agency” means any of the various state officers, departments, boards, commissions,
divisions, bureaus, and councils and any other unit of organization, however designated, of the executive branch of state
government. “Agency” does not include the university and college boards of trustees or the state universities and colleges.
39
Generally, local governments are not subject to the provisions of ch. 287, F.S. Local governmental units may look to the
chapter for guidance in the procurement of goods and services, but many have local policies or ordinances to address
competitive solicitations.
40
See ss. 287.012(6) and 287.057, F.S. BILL: SB 1678 Page 8
Contracts for commodities or contractual services in excess of $35,000 must be procured
utilizing a competitive solicitation process.
41
Some specified services and commodities,
however, are not subject to competitive solicitation requirements.
42
Chapter 287, F.S., establishes a process by which a person may file an action protesting a
decision or intended decision pertaining to contracts administered by the Department of
Management Services (DMS), a water management district, or state agencies.
43
The DMS is statutorily designated as the central procurement authority for executive agencies
and its responsibilities include: overseeing agency implementation of the ch. 287, F.S.,
competitive procurement process;
44
creating uniform agency procurement rules;
45
implementing
the online procurement program;
46
and establishing state term contracts.
47
The agency
procurement process is partly decentralized in that an agency, except in the case of state term
contracts, may procure goods and services itself in accordance with requirements set forth in
statute and rule, rather than placing orders through the DMS.
III. Effect of Proposed Changes:
Section 1 expands the SBA’s divestment requirement in s. 215.4725, F.S., to include “other
entities,” in addition to companies, that boycott Israel. The term “other entities” is defined as a
U.S. or foreign educational institution, a nonprofit organization, a state agency, various state
officers, a local governmental entity or unit thereof, and a foreign government, including any of
its public investment funds, public pension funds, sovereign wealth funds, or other government-
sponsored investment funds. Section 1 also requires the SBA to notify each company newly
placed on the Scrutinized Companies that Boycott Israel List that it may become barred from
future grants awarded by the state in virtue of its activities.
The bill makes conforming changes throughout s. 215.4725, F.S., to direct the public fund to
engage with, scrutinize, and ultimately divest from “other entities” that boycott Israel in a similar
manner it engages with companies under the current statute.
Where the SBA is currently permitted to deviate from the requirement to divest from scrutinized
companies that boycott Israel if the value of all the fund’s assets under management would
decrease by 50 basis points (0.5 percent) or more as a result of divestment, the bill instead allows
them to disengage only at the point that the value of the scrutinized assets would equal .5 percent
of the total value of the fund. This means the SBA would be required to divest at large expense
until the asset became of minimal value to the fund.
41
Section 287.057(1), F.S., requires all projects that exceed the Category Two ($35,000) threshold contained in s. 287.017,
F.S., to be competitively bid. As defined in s. 287.012(6), F.S., “competitive solicitation” means the process of requesting
and receiving two or more sealed bids, proposals, or replies submitted by responsive vendors in accordance with the terms of
a competitive process, regardless of the method of procurement.
42
See s. 287.057(3)(e), F.S.
43
See ss. 287.042(2)(c) and 120.57(3), F.S.
44
Sections 287.032 and 287.042, F.S.
45
Sections 287.032(2) and 287.042(3), (4), and (12), F.S.
46
Section 287.057(22), F.S.
47
Sections 287.042(2) and 287.056, F.S. BILL: SB 1678 Page 9
Section 2 amends s. 265.286, F.S., to require each applicant for an arts or culture grant provided
by the Department of State to sign a certification form attesting that it (1) is complying with all
relevant antidiscrimination laws, including Florida’s anti-boycott rules under ss. 215.4725 and
287.135, F.S.; and (2) will not engage in antisemitic discrimination for the duration of the
program or project for which its grant is awarded. Antisemitic discrimination, in this instance,
includes the refusals to deal based on an individual or entity’s real or perceived connection to the
State of Israel.
“Refusals to deal” is a term of art used in antitrust law to describe a refusal to cooperate with
rivals in a manner that can rise to anticompetitive behavior.
48
For this reason, the sponsor may
wish to substitute with a more common phrase, such as even “refusal to deal” (with no ‘s’ on the
end of refusal.)
For these purposes, the bill adopts the definition of antisemitism in s. 1.015, F.S., as the certain
perception of Jewish individuals which may be expressed as hatred toward such individuals.
Rhetorical and physical manifestations of antisemitism are directed toward Jewish and non-
Jewish individuals and their property and toward Jewish community institutions and religious
facilities.
The bill provides that an applicant that violates the above certification by engaging prohibited
boycotts or antisemitic discrimination may be penalized. These penalties include disqualification
from grant eligibility for 10 years after its boycott or discriminatory action has ended, and
subjecting it to a fine equal to three times the grant award received. If the Attorney General fails
to pursue a cause of action within 90 days after the grant awardee’s violation (by engaging in a
boycott or antisemitic behavior), then any individual may file a complaint with the Attorney
General, who must provide a written response within 30 days after his or her receipt.
Section 3 amends s. 287.135, F.S., regarding the prohibition against contracting with scrutinized
companies, to:
• Expand the prohibition to apply to “other entities” as well as companies (“other entities,”
however, is not defined in relevant statute);
• Increase the current threshold to contract with a scrutinized company or other entity that
boycotts Israel to less than $100,000 (current law completely bars any contracts with such
companies);
• Prohibit contracting with a foreign educational institution that is on the Scrutinized
Companies and Other Entities that Boycott Israel List or that engages in a boycott of Israel
49
,
if the contract is for $1,000 or more. This includes payments for tuition made directly to such
institutions by students who receive a study abroad credit at a Florida state college or
university; and
• Make conforming changes, such as allowing both companies and entities that are on the
scrutinized companies and other entities that boycott Israel list to prove that they should not
be on the list; ensuring that both a company and entity certify that they are not engaging in a
boycott of Israel at the beginning of, or renewal of a contract with an agency or local
48
United States v. Google LLC, 747 F. Supp. 3d 1 (D.D.C. 2024).
49
The educational institution must be engaged in the prohibited activity at the time it bids on, submits a proposal for, or
enters into or renews a contract with the agency or local government. BILL: SB 1678 Page 10
government; and providing for a civil action against both a company and entity in the
instance that one has submitted a false certification.
Section 4 provides that the bill takes effect July 1, 2025.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
Not applicable. The bill does not require counties or municipalities to take an action
requiring the expenditure of funds, reduce the authority that counties or municipalities
have to raise revenue in the aggregate, or reduce the percentage of state tax shared with
counties or municipalities.
B. Public Records/Open Meetings Issues:
None identified.
C. Trust Funds Restrictions:
None identified.
D. State Tax or Fee Increases:
None identified.
E. Other Constitutional Issues:
Federal Preemption
The U.S. Constitution’s Supremacy Clause establishes that federal statutes, treaties, and
the U.S. Constitution are "the supreme Law of the Land."
50
Accordingly, federal law may preempt state action that thwarts federal law in three ways:
• By an express statement of its intent to occupy a field. Express preemption need not
be total, however—it can preempt all state laws or only certain state laws.
• With “a framework of regulation so pervasive that Congress left no room for the
States to supplement it or where the federal interest is so dominant that the federal
system will be assumed to preclude enforcement of state laws on the same subject.”
51
• Where state law conflicts, leaving an actor to choose whether to adhere to state or
federal law.
52
The state law may also be subject to conflict preemption where it
“stands as an obstacle to the accomplishment and execution of the full purposes and
objectives of Congress.”
53
50
U.S. CONST. art. VI, cl. 2.
51
Arizona v. U.S., 567 U.S. 387, 399 (2012).
52
Crosby v. Nat’l. Foreign Trade Council, 530 U.S. at 372 (2000).
53
Nat’l Foreign Trade Council, Inc. v. Giannoulias, 523 F. Supp. 2d 731 (N.D. Ill. Feb. 23, 2007), quoting Hines v.
Davidowitz, 312 U.S. 52, 67 (1941). BILL: SB 1678 Page 11
The federal government’s authority to act in the realm of foreign affairs is vested by the
U.S. Constitution.
54
State laws that intrude into this field of foreign affairs and
improperly impact foreign affairs, even where not explicitly preempted by prior federal
action, may be invalid.
55
Courts have generally held, however, that the state’s intrusion
must have more than an “incidental effect” on foreign affairs in order to be considered an
encroachment onto the federal government’s powers.
56
It is likely that any affects this bill
has on foreign affairs would be “incidental,” and, for this reason, permissible under a
purely Supremacy Clause analysis.
Foreign Commerce Clause
Article I, section 8, clause 3 of the U.S. Constitution grants Congress the power to
“regulate commerce with foreign nations ....” Conversely, in conjunction with the
aforementioned Supremacy Clause, this provision serves as a limitation on states’
authority to encroach onto the realm of foreign commerce. The “dormant foreign
commerce power”
57
voids state acts upon foreign commerce because of the Constitution's
overriding concern for national uniformity in foreign commerce—even in instances when
Congress has not affirmatively acted.
58
A state may impermissibly encroach on the
federal government’s prerogative to regulate foreign commerce if the action creates a risk
of conflict or impedes the federal government’s ability to speak in “one voice.”
59
Courts
generally view state action in this context with a heightened scrutiny that assumes the
supremacy of federal action in the realm of foreign relations.
60
A state’s actions may, however, be permissible where the state acts as a market
participant, rather than market regulator—states have generally been found to act as a
participant where they act in their proprietary capacity to spend or invest funds in a
manner that comports with the economic or ideological sentiments of their citizens. This
exception, however, is limited to instances where a state’s acts do not have a substantial
regulatory effect outside the particular market in which it participates. Moreover, it is
unclear whether the market participant exception applies to the Foreign Commerce
Clause.
61
54
See, e.g., U.S. CONST., Art. I, s. 8 (power to declare war, maintain a military, and regulate foreign commerce); U.S.
CONST., Art. II, s. 2 (power to enter into treaties); U.S. CONST., Art. III, s. 2 (power to hear case involving foreign states and
citizens).
55
Zschernig v. Miller, 389 U.S. 429 (1968); American Ins. Ass’n. v. Garamendi, 539 U.S. 396 (2003) (finding that the
President’s powers in foreign policy were so great as to outweigh any need for a direct expression of preemption.)
56
Hines v. Davidowitz, 312 U.S. 52, 67 (1941).
57
See generally, Stephen Mulligan, Congressional Research Service, Constitutional Limits on States’ Power over Foreign
Affairs, 3-4 (Aug. 15, 2022), available at https://crsreports.congress.gov/product/pdf/LSB/LSB10808 (last visited Mar. 14,
2025).
58
United States v. Davila-Mendoza, 972 F.3d 1264 (11th Cir. 2020).
59
Japan Line v. County of Los Angeles, 441 U.S. 434, 446 (1979).
60
“The premise […] is that the Commerce Clause analysis is identical, regardless of whether interstate or foreign commerce
is involved. This premise […] must be rejected. When construing Congress’ power to ‘regulate Commerce with foreign
Nations,’ a more extensive constitutional inquiry is required.” Japan Line at 446.
61
National Foreign Trade Council v. Giannoulias, 523 F.Supp.2d 731, 748 (N.D. Ill. Feb. 23, 2007). BILL: SB 1678 Page 12
A reviewing court may find that the divestment and contracting provisions implicate the
aforementioned constitutional provisions.
Impairment of Contract
The United States Constitution and the State Constitution prohibit the state from passing
any law impairing the obligation of contracts.
62
The courts will subject state actions that
impact state-held contracts to an elevated form of scrutiny when the Legislature passes
laws that impact such contracts.
63
“[T]he first inquiry must be whether the state law has,
in fact, operated as a substantial impairment of a contractual relationship. The severity of
the impairment measures the height of the hurdle the state legislation must clear.”
64
If a
law does impair contracts, the courts will assess whether the law is deemed reasonable
and necessary to serve an important public purpose.
65
Applying the effects of this bill to contracts entered into before its effective date may
raise concerns about legislative impairment of contracts.
Freedom of Speech
Both the federal and state constitutions protect freedom of speech, and, specifically,
prohibit the government from passing laws abridging free speech.
66
“[T]he bedrock
principle underlying” the guarantee of freedom of speech “is that states cannot prohibit
speech merely because it offends the sensibilities of others.”
67
While both the state and
federal constitutions protect freedom of speech, such protection is not absolute. The
government may constitutionally regulate speech in specific instances, so long as the
government has a sufficient government interest justifying the restriction and uses an
appropriately tailored approach. The bill instills a limitation on speech for recipients of
public funds and grants—they may not engage in antisemitic speech or violate the
provisions of specified laws. The question, therefore, is whether the conditions are
sufficiently tailored.
Generally, the government is given more latitude in regulations of speech as conditions of
public funds; moreover, there tend to be additional latitudes where arts and culture are
involved as well.
68
A condition becomes unconstitutional, however, in “situations in
which the government has placed a condition on the recipient of the subsidy rather than
on a particular program or service, thus effectively prohibiting the recipient from
engaging in the protected conduct outside the scope of the federally funded program.”
69
62
U.S. CONST. art. I, s. 10; FLA. CONST., art. 1 s. 10.
63
Cf. Chiles v. United Faculty of Fla., 615 So.2d 671 (Fla. 1993).
64
Pomponio v. Claridge of Pompano Condominium, Inc., 378 So.2d 774 (Fla. 1980). See also General Motors Corp. v.
Romein, 503 U.S. 181 (1992).
65
Park Benzinger & Co. v. Southern Wine & Spirits, Inc., 391 So. 2d 681 (Fla. 1980); Yellow Cab C., v. Dade County, 412
So. 2d 395 (Fla. 3rd DCA 1982). See also Exxon Corp. v. Eagerton, 462 U.S. 176 (1983). For the factors courts consider
when balancing the impairment of contracts with the important public purpose, see Pomponio, 378 So.2d at 779.
66
FLA. CONST. art. I, s. 4; U.S. CONST. amend. I.
67
McElhaney v. Williams, 81 F.4th 550, 557 (6th Cir. 2023), cert. denied, 144 S. Ct. 696 (2024).
68
Nat’l Endowment for the Arts v. Finlay, 524 U.S. 569, 587-588 (1998).
69
Rust v. Sullivan, 500 U.S. 173, 197 (1991) (emphasis in original). BILL: SB 1678 Page 13
A similar provision in one of President Trump’s recent executive orders is currently
enjoined from enforcement following a finding that the provision likely violates the First
Amendment.
70
Should the restrictions on antisemitic speech in this bill apply to use of public funds or
use of any funds in conjunction with the subsidized program (grants), it would likely pass
a First Amendment challenge.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
None identified.
B. Private Sector Impact:
None identified.
C. Government Sector Impact:
The SBA, the DOS, local governments, and state agencies may be required to expend
funds to research entities’ activities to determine whether they impermissibly boycott
Israel or engage in antisemitic behavior.
State agencies and local governments may be required to cancel contracts where the
contractor does not comply with the law. This may require state and local governments to
expend funds to procure an alternative vendor.
The DOS may incur litigation costs to collect fines assessed against grant recipients who
violate their certifications to not violate specific antidiscrimination laws or engage in
antisemitic discrimination.
VI. Technical Deficiencies:
The bill’s definition of “other entities,” from which the public fund must divest if they engage in
boycotts in Israel, is not consistent with the entities listed in the definition of “scrutinized
companies or other entities.” This may result in confusion about what types of entities may be
considered for divestment under the bill.
The bill provides, at line 302, that antisemitic discrimination has the same definition has s. 1.015,
F.S. Section 1.015, F.S., defines antisemitism but does not define antisemitic discrimination.
Section 2 requires a grant awardee to certify that it will comply with the anti-boycott rules in the
proposed language of ss. 215.4725 and 287.135, F.S. These statutes provide instruction to the
SBA in the course of its investment decisions and to local governments and state agencies in the
70
Nat'l Ass'n of Diversity Officers in Higher Education v. Trump, __ F. Supp. 3d __, 2025 WL 573764 (D. Md. Feb. 21,
2025). BILL: SB 1678 Page 14
course of their procurement decisions, respectively. While a grant awardee may be a local
government, it may also be a nonprofit organization or individual. It would be impossible for
such non-regulated entities to comply with these provisions, as there is no applicable law with
which to comply.
Section 2 requires the Attorney General to pursue a cause of action within 90 days after “a
violation.” It is unclear if this means the discovery of the violation, the first day of the violation,
the last day of the violation, or any day of the violation. It is also unclear what cause of action the
Attorney General should pursue.
The bill provides a definition of “other entities” for the purposes of ch. 215, F.S., regarding the
SBA and the public fund—but it does not define the term as it is now used in ch. 287, F.S. The
bill sponsor may wish to provide the same definition in ch. 287, F.S., for consistency.
The bill appears to attempt to prohibit certain contracts over $1,000 that a state university may
engage in with a foreign university for the payment of tuition. This provision is placed in
ch. 287, F.S., which governs contracts entered into by state agencies and local governments. A
state agency is defined in s. 287.012(1), F.S., as any of the various state officers, departments,
boards, commissions, divisions, bureaus, and councils and any other unit of organization,
however designated, of the executive branch of state government. “Agency” does not include the
university and college boards of trustees or the state universities and colleges. Therefore, this
provision should not be codified in ch. 287, F.S.
Line 413 adds the term “or other entity” to the scrutinized companies that invest in Iran or
Sudan, governed by s. 215.473, F.S. This appears to be a drafting error.
VII. Related Issues:
The SBA does not have information on the entities with which the state contracts or provides
grants. Thus, it may be difficult for the SBA to comply with the requirements as directed on lines
172-173.
VIII. Statutes Affected:
This bill substantially amends the following sections of the Florida Statutes: 215.4725, 265.286,
287.135.
IX. Additional Information:
A. Committee Substitute – Statement of Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
None. BILL: SB 1678 Page 15
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.