The Florida Board of Supervisors’ Committee on Audit met this week to discuss several changes that will affect Florida’s investment performance and foreign investment from certain countries.
SBA Administrator Chris Spencer was appointed by Gov. Ron DeSantis to analyze the state’s budget. During the committee meeting, Spencer noted the budget increased 9.3% from last year, which he attributed to the state’s recruitment and retention efforts and Florida’s focus on IT reform.
During the 2024 legislative session, lawmakers passed Bill 7071, which limits investments the SBA can hold on behalf of Florida retirement systems that invest in Chinese government-owned companies.
The bill prohibits the SBA from making further investments in these Chinese companies. Additionally, the SBA must identify its current holdings and divest from these interests by September 1, 2025.
The bill outlines that 211 Chinese companies hold assets worth about $277.1 million, based on preliminary data from November 2023.
Spencer’s two main focuses in his analysis were overseeing the implementation of the bill and reporting to the state commission. He found that the number of Chinese companies was much higher than initially thought.
“When the governor signed this bill into law in June, we initially identified 547 publicly listed Chinese companies that met this criteria and are now beginning to contact fund managers to effectuate divestment from these companies,” Spencer said during Monday’s audit meeting.
The Florida Legislature has enacted HB5C in 2023, which expands the criteria for prohibited Iran-related investments and “vetting companies” to include companies with assets linked to Iran and involved in the finance, manufacturing, petrochemical, energy, mining and shipbuilding sectors.
Spencer said that as of June 2023, 13 companies had been added to the list of continuing investigations related to the proposed legislation.
“Our corporate governance team will continue to monitor these companies for the remainder of the year to determine what further action is needed with respect to these companies,” Spencer said.
The actuarial assumptions conference will be held in October, and the SBA is expected to make recommendations to the conference, which may include leaving current assumed rates of return unchanged and increasing contributions to defined benefit pension plans.
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This story was republished in partnership with The Center Square.
