Florida Senate - 2023                                    SB 10-C
       
       
        
       By Senator Avila
       
       
       
       
       
       39-00006-23C                                           202310C__
    1                        A bill to be entitled                      
    2         An act relating to scrutinized companies; amending s.
    3         215.473, F.S.; defining terms; revising the definition
    4         of the term “scrutinized company”; requiring the State
    5         Board of Administration to identify and maintain the
    6         Scrutinized Companies with Activities in Iran
    7         Terrorism Sectors List; requiring the board to update
    8         and quarterly make such list publicly available;
    9         requiring the State Board of Administration to adhere
   10         to specified procedures to assemble companies on such
   11         list; providing that companies on the Scrutinized
   12         Companies with Activities in the Iran Petroleum Energy
   13         Sector List as of a specified date are deemed,
   14         beginning on a certain date, to be on the Scrutinized
   15         Companies with Activities in Iran Terrorism Sectors
   16         List until removed pursuant to specified procedures;
   17         requiring the board to file a certain report with each
   18         member of its Board of Trustees and the Legislature
   19         within a specified timeframe after the list is created
   20         or updated; requiring the board to no longer
   21         scrutinize companies subject to the Scrutinized
   22         Companies with Activities in Iran Terrorism Sectors
   23         List, to no longer assemble the list, and to cease
   24         engagement, investment prohibitions, and divestment
   25         actions if two specified actions occur; conforming
   26         provisions to changes made by the act; amending s.
   27         287.135, F.S.; providing that certain entities are
   28         ineligible to, and may not, bid on, submit a proposal
   29         for, or enter into or renew certain contracts;
   30         requiring that certain contracts entered into or
   31         renewed on or after a specified date with an agency or
   32         a local governmental entity contain a provision
   33         allowing for the termination of such contract under
   34         specified circumstances; revising the exception
   35         allowing an agency or a local governmental entity to
   36         contract with a company on specified lists or engaged
   37         in business operations with certain countries;
   38         providing the circumstances under which an agency or a
   39         local governmental entity may contract with a company
   40         on the Scrutinized Companies with Activities in the
   41         Iran Petroleum Energy Sector List or the Scrutinized
   42         Companies with Activities in Iran Terrorism Sectors
   43         List; requiring a company to certify that it is not on
   44         certain lists at the time the company submits a bid or
   45         proposal for a contract or before the company enters
   46         into or renews a contract with an agency or a local
   47         governmental entity; conforming provisions to changes
   48         made by the act; amending s. 624.449, F.S.; requiring
   49         domestic insurers to annually provide to the Office of
   50         Insurance Regulation a list of companies in which they
   51         have investments which are on the Scrutinized
   52         Companies with Activities in Iran Terrorism Sectors
   53         List; reenacting s. 215.47(10)(b), F.S., relating to
   54         certain investment decisions made by the State Board
   55         of Administration, to incorporate the amendments made
   56         to s. 215.473, F.S., in a reference thereto; providing
   57         severability; providing an effective date.
   58          
   59  Be It Enacted by the Legislature of the State of Florida:
   60  
   61         Section 1. Section 215.473, Florida Statutes, is amended to
   62  read:
   63         215.473 Divestiture by the State Board of Administration;
   64  Sudan; Iran.—
   65         (1) DEFINITIONS.—As used in this section, the term:
   66         (a) “Active business operations” means all business
   67  operations that are not inactive business operations.
   68         (b) “Board” means the State Board of Administration.
   69         (c) “Business operations” means engaging in commerce in any
   70  form in Sudan or Iran, including, but not limited to, acquiring,
   71  developing, maintaining, owning, selling, possessing, leasing,
   72  or operating equipment, facilities, personnel, products,
   73  services, personal property, real property, or any other
   74  apparatus of business or commerce.
   75         (d) “Company” means a sole proprietorship, organization,
   76  association, corporation, partnership, joint venture, limited
   77  partnership, limited liability partnership, limited liability
   78  company, or other entity or business association, including all
   79  wholly owned subsidiaries, majority-owned subsidiaries, parent
   80  companies, or affiliates of such entities or business
   81  associations, that exists for the purpose of making profit.
   82         (e) “Complicit” means taking actions during any preceding
   83  20-month period which have directly supported or promoted the
   84  genocidal campaign in Darfur, including preventing Darfur’s
   85  victimized population from communicating with each other;
   86  encouraging Sudanese citizens to speak out against an
   87  internationally approved security force for Darfur; actively
   88  working to deny, cover up, or alter the record on human rights
   89  abuses in Darfur; or other similar actions.
   90         (f) “Construction sector” means the production,
   91  procurement, devising, framing, or arranging in Iran of parts or
   92  materials to fabricate, shape, or form buildings or structures,
   93  including the onsite development, assembly, or construction of
   94  residential, commercial, or institutional buildings in Iran.
   95         (g) “Direct holdings” in a company means all securities of
   96  that company that are held directly by the public fund or in an
   97  account or fund in which the public fund owns all shares or
   98  interests.
   99         (h) “Energy sector” means those activities involving the
  100  exploration, extraction, production, refinement, or liquefaction
  101  of petroleum, natural gas, or petroleum products in Iran.
  102         (i) “Financial sector” means any entity, including foreign
  103  branches wherever located, organized under the laws of Iran or
  104  any jurisdiction within Iran, or owned or controlled by the
  105  government of Iran, or located in Iran, or owned or controlled
  106  by any such entities, which is engaged in the business, as
  107  principal or agent, of accepting deposits; making, granting,
  108  transferring, holding, or brokering loans or credits; or
  109  purchasing or selling foreign exchange, securities, or commodity
  110  futures or options, or procuring purchasers and sellers thereof.
  111  Entities that operate in the financial sector of the Iranian
  112  economy include, but are not limited to, depository
  113  institutions, banks, savings banks, money service businesses,
  114  trust companies, insurance companies, securities brokers and
  115  dealers, commodity futures and options brokers and dealers,
  116  forward contract and foreign exchange merchants, securities and
  117  commodities exchanges, clearing corporations, investment
  118  companies, employee benefit plans, dealers in precious metals,
  119  stones, or jewels, and holding companies, affiliates, or
  120  subsidiaries of any such entities.
  121         (j)(g) “Government of Iran” means the government of Iran,
  122  its instrumentalities, and companies owned or controlled by the
  123  government of Iran.
  124         (k)(h) “Government of South Sudan” means the Republic of
  125  South Sudan, that has its capital in Juba, South Sudan.
  126         (l)(i) “Government of Sudan” means the Republic of the
  127  Sudan that has its capital in Khartoum, Sudan.
  128         (m)(j) “Inactive business operations” means the mere
  129  continued holding or renewal of rights to property previously
  130  operated for the purpose of generating revenues but not
  131  presently deployed for such purpose.
  132         (n)(k) “Indirect holdings” in a company means all
  133  securities of that company that are held in a commingled fund or
  134  other collective investment, such as a mutual fund, in which the
  135  public fund owns shares or interests together with other
  136  investors not subject to this section.
  137         (o)(l) “Iran” means the Islamic Republic of Iran.
  138         (p) “Manufacturing sector” means the creation of goods in
  139  Iran by manual labor or machinery which are for export from Iran
  140  or for sale within Iran.
  141         (q)(m) “Marginalized populations of Sudan” include, but are
  142  not limited to, the portion of the population in the Darfur
  143  region that has been genocidally victimized; the portion of the
  144  population of South Sudan victimized by Sudan’s north-south
  145  civil war; the Beja, Rashidiya, and other similarly underserved
  146  groups of eastern Sudan; the Nubian and other similarly
  147  underserved groups in Sudan’s Abyei, Southern Blue Nile, and
  148  Nuba Mountain regions; and the Amri, Hamadab, Manasir, and other
  149  similarly underserved groups of northern Sudan.
  150         (r) “Metals sector” means the sale, supply, or transfer,
  151  directly or indirectly, to or from Iran of raw or semifinished
  152  metals, including, but not limited to, the following types of
  153  such materials and all alloys or compounds containing such
  154  materials: aluminum, americium, antimony, barium, beryllium,
  155  bismuth, boron, cadmium, calcium, cerium, cesium, chromium,
  156  cobalt, copper, dysprosium, erbium, europium, gadolinium,
  157  gallium, germanium, gold, hafnium, hastelloy, inconel, indium,
  158  iridium, iron, lanthanum, lead, lithium, lutetium, magnesium,
  159  manganese, mercury, molybdenum, monel, neodymium, neptunium,
  160  nickel, niobium, osmium, palladium, platinum, plutonium,
  161  polonium, potassium, praseodymium, promethium, radium, rhenium,
  162  rhodium, ruthenium, samarium, scandium, silicon, silver, sodium,
  163  steels, strontium, tantalum, technetium, tellurium, terbium,
  164  thallium, thorium, tin, titanium, tungsten, uranium, vanadium,
  165  ytterbium, yttrium, zinc, and zirconium.
  166         (s)(n) “Military equipment” means weapons, arms, military
  167  supplies, and equipment that may readily be used for military
  168  purposes, including, but not limited to, radar systems,
  169  military-grade transport vehicles, or supplies or services sold
  170  or provided directly or indirectly to any force actively
  171  participating in armed conflict in Sudan.
  172         (t)(o) “Mineral-extraction activities” include the
  173  exploring, extracting, processing, transporting, or wholesale
  174  selling or trading of elemental minerals or associated metal
  175  alloys or oxides (ore), including gold, copper, chromium,
  176  chromite, diamonds, iron, iron ore, silver, tungsten, uranium,
  177  and zinc, as well as facilitating such activities, including
  178  providing supplies or services in support of such activities.
  179         (u) “Mining sector” means any act, process, or industry of
  180  extracting, at the surface or underground, ores, coal, precious
  181  stones, or any other minerals or geological materials from the
  182  earth in Iran.
  183         (v)(p) “Oil-related activities” include, but are not
  184  limited to, owning rights to oil blocks; exporting, extracting,
  185  producing, refining, processing, exploring for, transporting,
  186  selling, or trading of oil; constructing, maintaining, or
  187  operating a pipeline, refinery, or other oil-field
  188  infrastructure; and facilitating such activities, including
  189  providing supplies or services in support of such activities,
  190  except that the mere retail sale of gasoline and related
  191  consumer products is not considered an oil-related activity.
  192         (w) “Petrochemical sector” means those activities involving
  193  any aromatic, olefin, or synthesis gas, or any of their
  194  derivatives, including ethylene, propylene, butadiene, benzene,
  195  toluene, xylene, ammonia, methanol, and urea.
  196         (x)(q) “Petroleum resources” means petroleum, petroleum
  197  byproducts, or natural gas.
  198         (y) “Port sector” means those activities involving the
  199  loading and unloading of cargo and passengers or the
  200  transporting of goods and raw materials.
  201         (z)(r) “Power-production activities” means a business
  202  operation that involves a project commissioned by the National
  203  Electricity Corporation (NEC) of Sudan or other similar entity
  204  of the government of Sudan whose purpose is to facilitate power
  205  generation and delivery, including, but not limited to,
  206  establishing power-generating plants or hydroelectric dams,
  207  selling or installing components for the project, providing
  208  service contracts related to the installation or maintenance of
  209  the project, as well as facilitating such activities, including
  210  providing supplies or services in support of such activities.
  211         (aa)(s) “Public fund” means all assets of the Florida
  212  Retirement System held by the State Board of Administration in
  213  its capacity as a fiduciary pursuant to chapter 121.
  214         (bb)(t) “Scrutinized active business operations” means
  215  active business operations that result in a company becoming a
  216  scrutinized company.
  217         (cc)(u) “Scrutinized business operations” means business
  218  operations that result in a company becoming a scrutinized
  219  company.
  220         (dd)(v) “Scrutinized company” means a company that meets
  221  any of the following criteria:
  222         1. The company has business operations that involve
  223  contracts with or provision of supplies or services to the
  224  government of Sudan, companies in which the government of Sudan
  225  has a direct or indirect equity share, consortiums or projects
  226  commissioned by the government of Sudan, or companies involved
  227  in consortiums or projects commissioned by the government of
  228  Sudan, and:
  229         a. More than 10 percent of the company’s revenues or assets
  230  linked to Sudan involve oil-related activities or mineral
  231  extraction activities; less than 75 percent of the company’s
  232  revenues or assets linked to Sudan involve contracts with or
  233  provision of oil-related or mineral-extracting products or
  234  services to the government of South Sudan; and the company has
  235  failed to take substantial action; or
  236         b. More than 10 percent of the company’s revenues or assets
  237  linked to Sudan involve power-production activities; less than
  238  75 percent of the company’s power-production activities include
  239  projects whose intent is to provide power or electricity to the
  240  marginalized populations of Sudan; and the company has failed to
  241  take substantial action.
  242         2. The company is complicit in the Darfur genocide.
  243         3. The company supplies military equipment within Sudan,
  244  unless it clearly shows that the military equipment cannot be
  245  used to facilitate offensive military actions in Sudan or the
  246  company implements rigorous and verifiable safeguards to prevent
  247  use of that equipment by forces actively participating in armed
  248  conflict. Examples of safeguards include post-sale tracking of
  249  such equipment by the company, certification from a reputable
  250  and objective third party that such equipment is not being used
  251  by a party participating in armed conflict in Sudan, or sale of
  252  such equipment solely to the government of South Sudan or any
  253  internationally recognized peacekeeping force or humanitarian
  254  organization.
  255         4. The company has business operations that involve
  256  contracts with or provision of supplies or services to the
  257  government of Iran, companies in which the government of Iran
  258  has any direct or indirect equity share, consortiums, or
  259  projects commissioned by the government of Iran, or companies
  260  involved in consortiums or projects commissioned by the
  261  government of Iran and:
  262         a. More than 10 percent of the company’s total revenues or
  263  assets are linked to Iran and involve oil-related activities or
  264  mineral-extraction activities, and the company has failed to
  265  take substantial action; or
  266         b. On or after January 10, 2024, more than 10 percent of
  267  the company’s total revenues or assets are linked to Iran and
  268  involve the energy, petrochemical, financial, construction,
  269  manufacturing, textile, mining, metals, shipping, shipbuilding,
  270  or port sectors of Iran, and the company has failed to take
  271  substantial action;
  272         c. The company has, with actual knowledge, on or after
  273  August 5, 1996, made an investment of $20 million or more, or
  274  any combination of investments of at least $10 million each,
  275  which in the aggregate equals or exceeds $20 million in any 12
  276  month period, and which directly or significantly contributes to
  277  the enhancement of Iran’s ability to develop the petroleum
  278  resources of Iran; or
  279         d. The company has, with actual knowledge, on or after
  280  January 10, 2024, an investment of $20 million or more, or any
  281  combination of investments of at least $10 million each, which
  282  in the aggregate equals or exceeds $20 million in any 12-month
  283  period and involves oil-related activities in Iran, mineral
  284  extraction activities in Iran, or the energy, petrochemical,
  285  financial, construction, manufacturing, textile, mining, metals,
  286  shipping, shipbuilding, or port sectors of Iran.
  287         (ee) “Shipbuilding sector” means those activities involving
  288  the construction of seagoing vessels, including oil tankers and
  289  cargo vessels, in Iran.
  290         (ff) “Shipping sector” means those activities involving the
  291  transportation of goods by seagoing vessels, including oil
  292  tankers and cargo vessels, flying the flag of Iran or owned,
  293  controlled, chartered, or operated directly or indirectly by the
  294  government of Iran.
  295         (gg)(w) “Social-development company” means a company whose
  296  primary purpose in Sudan is to provide humanitarian goods or
  297  services, including medicine or medical equipment; agricultural
  298  supplies or infrastructure; educational opportunities;
  299  journalism-related activities; information or information
  300  materials; spiritual-related activities; services of a purely
  301  clerical or reporting nature; food, clothing, or general
  302  consumer goods that are unrelated to oil-related activities;
  303  mineral-extraction activities; or power-production activities.
  304         (hh)(x) “Substantial action specific to Iran” means
  305  adopting, publicizing, and implementing a formal plan to cease
  306  scrutinized business operations within 1 year and to refrain
  307  from such new business operations.
  308         (ii)(y) “Substantial action specific to Sudan” means
  309  adopting, publicizing, and implementing a formal plan to cease
  310  scrutinized business operations within 1 year and to refrain
  311  from such new business operations; undertaking humanitarian
  312  efforts in conjunction with an international organization, the
  313  government of Sudan, the government of South Sudan, or a
  314  nonprofit entity evaluated and certified by an independent third
  315  party to be substantially in a relationship to the company’s
  316  Sudan business operations and of benefit to one or more
  317  marginalized populations of Sudan; or, through engagement with
  318  the government of Sudan, materially improving conditions for the
  319  genocidally victimized population in Darfur.
  320         (jj) “Textile sector” means the fiber synthesis, dyeing,
  321  weaving, knitting, or felting in Iran of textiles, including
  322  apparel, carpets, cloths, fabric, or related goods, which are
  323  for export from Iran.
  324         (2) IDENTIFICATION OF COMPANIES.—
  325         (a) The board shall make its best efforts to identify all
  326  scrutinized companies in which the public fund has direct or
  327  indirect holdings or could possibly have such holdings in the
  328  future. Such efforts include:
  329         1. Reviewing and relying, as appropriate in the board’s
  330  judgment, on publicly available information regarding companies
  331  having business operations in Sudan, including information
  332  provided by nonprofit organizations, research firms,
  333  international organizations, and government entities;
  334         2. Contacting asset managers contracted by the board which
  335  invest in companies having business operations in Sudan;
  336         3. Contacting other institutional investors that have
  337  divested from or engaged with companies that have business
  338  operations in Sudan; or
  339         4. Reviewing the laws of the United States regarding the
  340  levels of business activity that would cause application of
  341  sanctions for companies conducting business or investing in
  342  countries that are designated state sponsors of terror.
  343         (b) The board shall maintain a list of all scrutinized
  344  companies that fit criteria specified in subparagraphs
  345  (1)(dd)1., 2., and 3. (1)(v)1., 2., and 3. labeled the
  346  “Scrutinized Companies with Activities in Sudan List” and a list
  347  of all scrutinized companies that fit criteria specified in
  348  subparagraph (1)(dd)4. (1)(v)4. labeled the “Scrutinized
  349  Companies with Activities in the Iran Terrorism Sectors
  350  Petroleum Energy Sector List.”
  351         (c) The board shall update and make publicly available
  352  quarterly the Scrutinized Companies with Activities in Sudan
  353  List and the Scrutinized Companies with Activities in the Iran
  354  Terrorism Sectors Petroleum Energy Sector List based on evolving
  355  information from, among other sources, those listed in paragraph
  356  (a).
  357         (d) Notwithstanding this section, a social-development
  358  company that is not complicit in the Darfur genocide is not
  359  considered a scrutinized company under subparagraph (1)(dd)1.
  360  (1)(v)1., subparagraph (1)(dd)2. (1)(v)2., or subparagraph
  361  (1)(dd)3. (1)(v)3.
  362         (3) REQUIRED ACTIONS.—The board shall adhere to the
  363  following procedure for assembling companies on the Scrutinized
  364  Companies with Activities in Sudan List and the Scrutinized
  365  Companies with Activities in the Iran Terrorism Sectors
  366  Petroleum Energy Sector List:
  367         (a) Engagement.—
  368         1. The board shall immediately determine the companies on
  369  the Scrutinized Companies with Activities in Sudan List and the
  370  Scrutinized Companies with Activities in the Iran Terrorism
  371  Sectors Petroleum Energy Sector List in which the public fund
  372  owns direct or indirect holdings. Any company on the Scrutinized
  373  Companies with Activities in the Iran Petroleum Energy Sector
  374  List as of November 6, 2023, is deemed to be on the Scrutinized
  375  Companies with Activities in Iran Terrorism Sectors List,
  376  effective November 10, 2023, until the company is subsequently
  377  removed pursuant to this section.
  378         2. For each company identified in this paragraph that has
  379  only inactive business operations, the board shall send a
  380  written notice informing the company of this act and encouraging
  381  it to continue to refrain from initiating active business
  382  operations in Sudan or Iran until it is able to avoid
  383  scrutinized business operations. The board shall continue such
  384  correspondence semiannually.
  385         3. For each company newly identified under this paragraph
  386  which has active business operations, the board shall send a
  387  written notice informing the company of its scrutinized company
  388  status and that it may become subject to divestment by the
  389  public fund. The notice must inform the company of the
  390  opportunity to clarify its Sudan-related or Iran-related
  391  activities and encourage the company to cease its scrutinized
  392  business operations or convert such operations to inactive
  393  business operations within 90 days in order to avoid qualifying
  394  for divestment by the public fund.
  395         4. If, within 90 days after the board’s first engagement
  396  with a company pursuant to this paragraph, that company ceases
  397  scrutinized business operations, the company shall be removed
  398  from the Scrutinized Companies with Activities in Sudan List and
  399  the Scrutinized Companies with Activities in the Iran Terrorism
  400  Sectors Petroleum Energy Sector List, and the provisions of this
  401  act shall cease to apply to that company unless that company
  402  resumes scrutinized business operations. If, within 90 days
  403  after the board’s first engagement, the company converts its
  404  scrutinized active business operations to inactive business
  405  operations, the company is subject to all provisions relating to
  406  inactive business operations. A company may be removed from one
  407  list but remain on the other list, in which case the company
  408  shall be subject to the provisions applicable to the list on
  409  which the company remains.
  410         (b) Divestment.—
  411         1. If, after 90 days following the board’s first engagement
  412  with a company pursuant to paragraph (a), the company continues
  413  to have scrutinized active business operations, and only while
  414  such company continues to have scrutinized active business
  415  operations, the board shall sell, redeem, divest, or withdraw
  416  all publicly traded securities of the company, except as
  417  provided in paragraph (d), from the public fund within 12 months
  418  after the company’s most recent appearance on the Scrutinized
  419  Companies with Activities in Sudan List or on the Scrutinized
  420  Companies with Activities in the Iran Terrorism Sectors
  421  Petroleum Energy Sector List.
  422         2. If a company that ceased scrutinized active business
  423  operations following engagement pursuant to paragraph (a)
  424  resumes such operations, this paragraph immediately applies, and
  425  the board shall send a written notice to the company. The
  426  company shall also be immediately reintroduced onto the
  427  Scrutinized Companies with Activities in Sudan List or on the
  428  Scrutinized Companies with Activities in the Iran Terrorism
  429  Sectors Petroleum Energy Sector List, as applicable.
  430         (c) Prohibition.—The board may not acquire, on behalf of
  431  the public fund, securities of companies on the Scrutinized
  432  Companies with Activities in Sudan List or the Scrutinized
  433  Companies with Activities in the Iran Terrorism Sectors
  434  Petroleum Energy Sector List that have active business
  435  operations, except as provided in paragraph (d).
  436         (d) Exemption.—A company that the United States Government
  437  affirmatively declares to be excluded from its present or any
  438  future federal sanctions regime relating to Sudan or Iran is not
  439  subject to divestment or the investment prohibition pursuant to
  440  paragraphs (b) and (c).
  441         (e) Excluded securities.—
  442         1. Notwithstanding this section, paragraphs (b) and (c) do
  443  not apply to indirect holdings in actively managed investment
  444  funds. However, the board shall submit letters to the managers
  445  of such investment funds containing companies that have
  446  scrutinized active business operations requesting that they
  447  consider removing such companies from the fund or create a
  448  similar actively managed fund having indirect holdings devoid of
  449  such companies. If the manager creates a similar fund, the
  450  board, on behalf of the public fund, shall replace all
  451  applicable investments with investments in the similar fund in
  452  an expedited timeframe consistent with prudent investing
  453  standards. For the purposes of this section, a private equity
  454  fund is deemed to be an actively managed investment fund.
  455         2. Notwithstanding this section, paragraphs (b) and (c) do
  456  not apply to exchange-traded funds.
  457         (f) Further exclusions.—Notwithstanding any other provision
  458  of this act, the board, when discharging its responsibility for
  459  operation of a defined contribution plan, shall engage the
  460  manager of the investment offerings in such plans requesting
  461  that they consider removing scrutinized companies from the
  462  investment offerings or create an alternative investment
  463  offering devoid of scrutinized companies. If the manager creates
  464  an alternative investment offering and the offering is deemed by
  465  the board to be consistent with prudent investor standards, the
  466  board shall consider including such investment offering in the
  467  plan.
  468         (4) REPORTING.—
  469         (a) The board shall file a report with each member of its
  470  Board of Trustees, the President of the Senate, and the Speaker
  471  of the House of Representatives which includes the Scrutinized
  472  Companies with Activities in Sudan List and the Scrutinized
  473  Companies with Activities in the Iran Terrorism Sectors
  474  Petroleum Energy Sector List within 30 days after the list is
  475  created or updated. This report must shall be made available to
  476  the public.
  477         (b) At each quarterly meeting of the Board of Trustees
  478  thereafter, the board shall file a report regarding the public
  479  fund, which must shall be made available to the public and to
  480  each member of its Board of Trustees, the President of the
  481  Senate, and the Speaker of the House of Representatives, and
  482  shall send a copy of that report to the United States
  483  Presidential Special Envoy to Sudan and the United States
  484  Presidential Special Envoy to Iran, or an appropriate designee
  485  or successor, which includes:
  486         1. A summary of correspondence with companies engaged by
  487  the board on behalf of the public fund under subparagraphs
  488  (3)(a)2. and 3.;
  489         2. All investments sold, redeemed, divested, or withdrawn
  490  in compliance with paragraph (3)(b);
  491         3. All prohibited investments under paragraph (3)(c);
  492         4. Any progress made under paragraph (3)(e); and
  493         5. A list of all publicly traded securities held directly
  494  by the public fund.
  495         (5) EXPIRATION.—This section expires upon the occurrence of
  496  all of the following:
  497         (a) If any of the following occurs, the board may no longer
  498  scrutinize companies according to subparagraphs (1)(dd)1., 2.,
  499  and 3. (1)(v)1., 2., and 3. and may no longer assemble the
  500  Scrutinized Companies with Activities in Sudan List, shall cease
  501  engagement and divestment of such companies, and may reinvest in
  502  such companies if such companies do not satisfy the criteria for
  503  inclusion in the Scrutinized Companies with Activities in the
  504  Iran Terrorism Sectors Petroleum Energy Sector List:
  505         1. The Congress or President of the United States
  506  affirmatively and unambiguously states, by means including, but
  507  not limited to, legislation, executive order, or written
  508  certification from the President to Congress, that the Darfur
  509  genocide has been halted for at least 12 months;
  510         2. The United States revokes all sanctions imposed against
  511  the government of Sudan;
  512         3. The Congress or President of the United States
  513  affirmatively and unambiguously states, by means including, but
  514  not limited to, legislation, executive order, or written
  515  certification from the President to Congress, that the
  516  government of Sudan has honored its commitments to cease attacks
  517  on civilians, demobilize and demilitarize the Janjaweed and
  518  associated militias, grant free and unfettered access for
  519  deliveries of humanitarian assistance, and allow for the safe
  520  and voluntary return of refugees and internally displaced
  521  persons; or
  522         4. The Congress or President of the United States
  523  affirmatively and unambiguously states, by means including, but
  524  not limited to, legislation, executive order, or written
  525  certification from the President to Congress, that mandatory
  526  divestment of the type provided for in this section interferes
  527  with the conduct of United States foreign policy.
  528         (b) If both either of the following occur occurs, the board
  529  may no longer scrutinize companies according to subparagraph
  530  (1)(dd)4. (1)(v)4., may no longer assemble the Scrutinized
  531  Companies with Activities in the Iran Terrorism Sectors
  532  Petroleum Energy Sector List, and shall cease engagement,
  533  investment prohibitions, and divestment:
  534         1. The Congress and or President of the United States
  535  affirmatively and unambiguously state states, by means
  536  including, but not limited to, legislation, executive order, or
  537  written certification from the President to Congress, that the
  538  government of Iran has ceased to acquire weapons of mass
  539  destruction and support international terrorism; and or
  540         2. The United States revokes all sanctions imposed against
  541  the government of Iran.
  542  
  543  The board, on behalf of the public fund, may reinvest in such
  544  companies if such companies do not satisfy the criteria for
  545  inclusion in the Scrutinized Companies with Activities in Sudan
  546  List. The board, acting as a fiduciary in accordance with s.
  547  215.47(10), shall monitor events relating to subparagraphs 1.
  548  and 2., and, upon finding that the conditions in subparagraph 1.
  549  or subparagraph 2. have occurred, the board shall report such
  550  finding at a quarterly meeting of its trustees. At each
  551  quarterly meeting of the trustees, the board shall report on the
  552  status of events relating to subparagraphs 1. and 2.
  553         (6) INVESTMENT POLICY STATEMENT OBLIGATIONS.—The board’s
  554  actions taken in compliance with this act, including all good
  555  faith determinations regarding companies as required by this
  556  act, shall be adopted and incorporated into the public fund’s
  557  investment policy statement as provided in s. 215.475.
  558         (7) REINVESTMENT IN CERTAIN COMPANIES HAVING SCRUTINIZED
  559  ACTIVE BUSINESS OPERATIONS.—Notwithstanding any other provision
  560  of this act to the contrary, the public fund may cease divesting
  561  from certain scrutinized companies pursuant to paragraph (3)(b)
  562  or reinvest in certain scrutinized companies from which it
  563  divested pursuant to paragraph (3)(b) if clear and convincing
  564  evidence shows that the value of all assets of the public fund
  565  becomes equal to or less than 99.50 percent, or 50 basis points,
  566  of the hypothetical value of all assets of the public fund
  567  assuming no divestment for any company had occurred under
  568  paragraph (3)(b). Cessation of divestment, reinvestment, or any
  569  subsequent ongoing investment authorized by this act is limited
  570  to the minimum steps necessary to avoid the contingency set
  571  forth in this subsection or that no divestment of any company is
  572  required for less than fair value. For any cessation of
  573  divestment, reinvestment, or subsequent ongoing investment
  574  authorized by this act, the board shall provide a written report
  575  to each member of its Board of Trustees, the President of the
  576  Senate, and the Speaker of the House of Representatives in
  577  advance of initial reinvestment, updated semiannually thereafter
  578  as applicable, setting forth the reasons and justification,
  579  supported by clear and convincing evidence, for its decisions to
  580  cease divestment, reinvest, or remain invested in companies
  581  having scrutinized active business operations. This act does not
  582  apply to reinvestment in companies on the grounds that they have
  583  ceased to have scrutinized active business operations.
  584         Section 2. Section 287.135, Florida Statutes, is amended to
  585  read:
  586         287.135 Prohibition against contracting with scrutinized
  587  companies.—
  588         (1) In addition to the terms defined in ss. 287.012 and
  589  215.473, as used in this section, the term:
  590         (a) “Awarding body” means, for purposes of state contracts,
  591  an agency or the department, and for purposes of local
  592  contracts, the governing body of the local governmental entity.
  593         (b) “Boycott of Israel” has the same meaning as defined in
  594  s. 215.4725.
  595         (c) “Business operations” means, for purposes specifically
  596  related to Cuba or Syria, engaging in commerce in any form in
  597  Cuba or Syria, including, but not limited to, acquiring,
  598  developing, maintaining, owning, selling, possessing, leasing,
  599  or operating equipment, facilities, personnel, products,
  600  services, personal property, real property, military equipment,
  601  or any other apparatus of business or commerce.
  602         (d) “Local governmental entity” means a county,
  603  municipality, special district, or other political subdivision
  604  of the state.
  605         (2) A company is ineligible to, and may not, bid on, submit
  606  a proposal for, or enter into or renew a contract with an agency
  607  or local governmental entity for goods or services of:
  608         (a) Any amount if, at the time of bidding on, submitting a
  609  proposal for, or entering into or renewing such contract, the
  610  company is on the Scrutinized Companies that Boycott Israel
  611  List, created pursuant to s. 215.4725, or is engaged in a
  612  boycott of Israel; or
  613         (b) One million dollars or more if, at the time of bidding
  614  on, submitting a proposal for, or entering into or renewing such
  615  contract, the company:
  616         1. Is on the Scrutinized Companies with Activities in Sudan
  617  List or the Scrutinized Companies with Activities in the Iran
  618  Terrorism Sectors Petroleum Energy Sector List, created pursuant
  619  to s. 215.473; or
  620         2. Is engaged in business operations in Cuba or Syria.
  621         (3)(a) Any contract with an agency or local governmental
  622  entity for goods or services of $1 million or more entered into
  623  or renewed on or after:
  624         1. July 1, 2011, through June 30, 2012, must contain a
  625  provision that allows for the termination of such contract at
  626  the option of the awarding body if the company is found to have
  627  submitted a false certification as provided under subsection (5)
  628  or been placed on the Scrutinized Companies with Activities in
  629  Sudan List or the Scrutinized Companies with Activities in the
  630  Iran Petroleum Energy Sector List.
  631         2. July 1, 2012, through September 30, 2016, must contain a
  632  provision that allows for the termination of such contract at
  633  the option of the awarding body if the company is found to have
  634  submitted a false certification as provided under subsection
  635  (5), been placed on the Scrutinized Companies with Activities in
  636  Sudan List or the Scrutinized Companies with Activities in the
  637  Iran Petroleum Energy Sector List, or been engaged in business
  638  operations in Cuba or Syria.
  639         3. October 1, 2016, through June 30, 2018, must contain a
  640  provision that allows for the termination of such contract at
  641  the option of the awarding body if the company:
  642         a. Is found to have submitted a false certification as
  643  provided under subsection (5);
  644         b. Has been placed on the Scrutinized Companies that
  645  Boycott Israel List, or is engaged in a boycott of Israel;
  646         c. Has been placed on the Scrutinized Companies with
  647  Activities in Sudan List or the Scrutinized Companies with
  648  Activities in the Iran Petroleum Energy Sector List; or
  649         d. Has been engaged in business operations in Cuba or
  650  Syria.
  651         4. July 1, 2018, must contain a provision that allows for
  652  the termination of such contract at the option of the awarding
  653  body if the company is found to have submitted a false
  654  certification as provided under subsection (5), been placed on
  655  the Scrutinized Companies with Activities in Sudan List or the
  656  Scrutinized Companies with Activities in the Iran Petroleum
  657  Energy Sector List, or been engaged in business operations in
  658  Cuba or Syria.
  659         5. July 1, 2018, must contain a provision that allows for
  660  the termination of such contract at the option of the awarding
  661  body if the company is found to have submitted a false
  662  certification as provided under subsection (5) or has been
  663  placed on a list created pursuant to s. 215.473, relating to
  664  scrutinized active business operations in Iran.
  665         (b) Any contract with an agency or local governmental
  666  entity for goods or services of any amount entered into or
  667  renewed on or after July 1, 2018, must contain a provision that
  668  allows for the termination of such contract at the option of the
  669  awarding body if the company is found to have been placed on the
  670  Scrutinized Companies that Boycott Israel List or is engaged in
  671  a boycott of Israel.
  672         (4) Notwithstanding subsection (2) or subsection (3), an
  673  agency or local governmental entity, on a case-by-case basis,
  674  may allow permit a company on the Scrutinized Companies with
  675  Activities in Sudan List, or the Scrutinized Companies with
  676  Activities in the Iran Petroleum Energy Sector List, or the
  677  Scrutinized Companies with Activities in Iran Terrorism Sectors
  678  List, or a company engaged in business operations in Cuba or
  679  Syria, to be eligible for, bid on, submit a proposal for, or
  680  enter into or renew a contract for goods or services of $1
  681  million or more, or may allow permit a company on the
  682  Scrutinized Companies that Boycott Israel List to be eligible
  683  for, bid on, submit a proposal for, or enter into or renew a
  684  contract for goods or services of any amount, under the
  685  conditions set forth in paragraph (a) or the conditions set
  686  forth in paragraph (b):
  687         (a)1. With respect to a company on the Scrutinized
  688  Companies with Activities in Sudan List or the Scrutinized
  689  Companies with Activities in the Iran Petroleum Energy Sector
  690  List, all of the following occur:
  691         a. The scrutinized business operations were made before
  692  July 1, 2011.
  693         b. The scrutinized business operations have not been
  694  expanded or renewed after July 1, 2011.
  695         c. The agency or local governmental entity determines that
  696  it is in the best interest of the state or local community to
  697  contract with the company.
  698         d. The company has adopted, has publicized, and is
  699  implementing a formal plan to cease scrutinized business
  700  operations and to refrain from engaging in any new scrutinized
  701  business operations.
  702         2. With respect to a company engaged in business operations
  703  in Cuba or Syria, all of the following occur:
  704         a. The business operations were made before July 1, 2012.
  705         b. The business operations have not been expanded or
  706  renewed after July 1, 2012.
  707         c. The agency or local governmental entity determines that
  708  it is in the best interest of the state or local community to
  709  contract with the company.
  710         d. The company has adopted, has publicized, and is
  711  implementing a formal plan to cease business operations and to
  712  refrain from engaging in any new business operations.
  713         3. With respect to a company on the Scrutinized Companies
  714  that Boycott Israel List, all of the following occur:
  715         a. The boycott of Israel was initiated before October 1,
  716  2016.
  717         b. The company certifies in writing that it has ceased its
  718  boycott of Israel.
  719         c. The agency or local governmental entity determines that
  720  it is in the best interest of the state or local community to
  721  contract with the company.
  722         d. The company has adopted, has publicized, and is
  723  implementing a formal plan to cease scrutinized business
  724  operations and to refrain from engaging in any new scrutinized
  725  business operations.
  726         4. With respect to a company on the Scrutinized Companies
  727  with Activities in the Iran Petroleum Energy Sector List as of
  728  November 6, 2023, all of the following occur:
  729         a. The scrutinized business operations were made before
  730  July 1, 2011.
  731         b. The scrutinized business operations have not been
  732  expanded or renewed after July 1, 2011.
  733         c. The agency or local governmental entity determines that
  734  it is in the best interest of the state or local community to
  735  contract with the company.
  736         d. The company has adopted, has publicized, and is
  737  implementing a formal plan to cease scrutinized business
  738  operations and to refrain from engaging in any new scrutinized
  739  business operations.
  740         5. With respect to a company on the Scrutinized Companies
  741  with Activities in Iran Terrorism Sectors List other than those
  742  companies included on the Scrutinized Companies with Activities
  743  in the Iran Petroleum Energy Sector List as of November 6, 2023,
  744  all of the following occur:
  745         a. The scrutinized business operations were made before
  746  January 10, 2024.
  747         b. The scrutinized business operations have not been
  748  expanded or renewed on or after January 10, 2024.
  749         c. The agency or local governmental entity determines that
  750  it is in the best interest of the state or local community to
  751  contract with the company.
  752         d. The company has adopted, has publicized, and is
  753  implementing a formal plan to cease those scrutinized business
  754  operations and to refrain from engaging in any new scrutinized
  755  business operations.
  756         (b) One of the following occurs:
  757         1. The local governmental entity makes a public finding
  758  that, absent such an exemption, the local governmental entity
  759  would be unable to obtain the goods or services for which the
  760  contract is offered.
  761         2. For a contract with an executive agency, the Governor
  762  makes a public finding that, absent such an exemption, the
  763  agency would be unable to obtain the goods or services for which
  764  the contract is offered.
  765         3. For a contract with an office of a state constitutional
  766  officer other than the Governor, the state constitutional
  767  officer makes a public finding that, absent such an exemption,
  768  the office would be unable to obtain the goods or services for
  769  which the contract is offered.
  770         (5) At the time a company submits a bid or proposal for a
  771  contract or before the company enters into or renews a contract
  772  with an agency or local governmental entity for goods or
  773  services of $1 million or more, the company must certify that
  774  the company is not on the Scrutinized Companies with Activities
  775  in Sudan List or the Scrutinized Companies with Activities in
  776  the Iran Terrorism Sectors Petroleum Energy Sector List and that
  777  it does not have business operations in Cuba or Syria. At the
  778  time a company submits a bid or proposal for a contract or
  779  before the company enters into or renews a contract with an
  780  agency or local governmental entity for goods or services of any
  781  amount, the company must certify that the company is not
  782  participating in a boycott of Israel.
  783         (a) If, after the agency or the local governmental entity
  784  determines, using credible information available to the public,
  785  that the company has submitted a false certification, the agency
  786  or local governmental entity shall provide the company with
  787  written notice of its determination. The company shall have 90
  788  days following receipt of the notice to respond in writing and
  789  to demonstrate that the determination of false certification was
  790  made in error. If the company does not make such demonstration
  791  within 90 days after receipt of the notice, the agency or the
  792  local governmental entity shall bring a civil action against the
  793  company. If a civil action is brought and the court determines
  794  that the company submitted a false certification, the company
  795  shall pay the penalty described in subparagraph 1. and all
  796  reasonable attorney fees and costs, including any costs for
  797  investigations that led to the finding of false certification.
  798         1. A civil penalty equal to the greater of $2 million or
  799  twice the amount of the contract for which the false
  800  certification was submitted shall be imposed.
  801         2. The company is ineligible to bid on any contract with an
  802  agency or local governmental entity for 3 years after the date
  803  the agency or local governmental entity determined that the
  804  company submitted a false certification.
  805         (b) A civil action to collect the penalties described in
  806  paragraph (a) must commence within 3 years after the date the
  807  false certification is submitted.
  808         (6) Only the agency or local governmental entity that is a
  809  party to the contract may cause a civil action to be brought
  810  under this section. This section does not create or authorize a
  811  private right of action or enforcement of the penalties provided
  812  in this section. An unsuccessful bidder, or any other person
  813  other than the agency or local governmental entity, may not
  814  protest the award of a contract or contract renewal on the basis
  815  of a false certification.
  816         (7) This section preempts any ordinance or rule of any
  817  agency or local governmental entity involving public contracts
  818  for goods or services of:
  819         (a) One million dollars or more with a company engaged in
  820  scrutinized business operations.
  821         (b) Any amount with a company that has been placed on the
  822  Scrutinized Companies that Boycott Israel List or is engaged in
  823  a boycott of Israel.
  824         (8) The contracting prohibitions in this section applicable
  825  to companies on the Scrutinized Companies with Activities in
  826  Sudan List or the Scrutinized Companies with Activities in the
  827  Iran Terrorism Sectors Petroleum Energy Sector List or to
  828  companies engaged in business operations in Cuba or Syria become
  829  inoperative on the date that federal law ceases to authorize the
  830  states to adopt and enforce such contracting prohibitions.
  831         Section 3. Section 624.449, Florida Statutes, is amended to
  832  read:
  833         624.449 Insurer investment in foreign companies.—A domestic
  834  insurer shall provide to the office on an annual basis a list of
  835  investments that the insurer has in companies included on the
  836  “Scrutinized Companies with Activities in Sudan List” and the
  837  “Scrutinized Companies with Activities in the Iran Terrorism
  838  Sectors Petroleum Energy Sector List” compiled by the State
  839  Board of Administration pursuant to s. 215.473(2). The insurer’s
  840  list must include the name of the issuer and the stock, bond,
  841  security, and other evidence of indebtedness.
  842         Section 4. For the purpose of incorporating the amendments
  843  made by this act to section 215.473, Florida Statutes, in a
  844  reference thereto, paragraph (b) of subsection (10) of section
  845  215.47, Florida Statutes, is reenacted to read:
  846         215.47 Investments; authorized securities; loan of
  847  securities.—Subject to the limitations and conditions of the
  848  State Constitution or of the trust agreement relating to a trust
  849  fund, moneys available for investments under ss. 215.44-215.53
  850  may be invested as follows:
  851         (10)
  852         (b) Notwithstanding any other law except for ss. 215.471,
  853  215.4725, and 215.473, when deciding whether to invest and when
  854  investing the assets of any fund, the State Board of
  855  Administration must make decisions based solely on pecuniary
  856  factors and may not subordinate the interests of the
  857  participants and beneficiaries of the fund to other objectives,
  858  including sacrificing investment return or undertaking
  859  additional investment risk to promote any nonpecuniary factor.
  860  The weight given to any pecuniary factor must appropriately
  861  reflect a prudent assessment of its impact on risk or returns.
  862         Section 5. If any provision of this act or its application
  863  to any person or circumstance is held invalid, the invalidity
  864  does not affect other provisions or applications of this act
  865  which can be given effect without the invalid provision or
  866  application, and to this end the provisions of this act are
  867  severable.
  868         Section 6. This act shall take effect upon becoming a law.