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Bill Summary Details

Fiduciary Duty of Care for Appointed Public Officers and Executive Officers (Watch)

HB 1113 (Beltran) and CS/CS/SB 1270 (Lee) create a new statute establishing standards for the fiduciary duty of care for appointed public officers and executive officers of specified governmental entities. “Appointed public official” is defined to include “state officers” as well as “local officers,” such as appointed members of the governing body of a municipality, a board authorized to enforce local code provisions, a board having the power to recommend, create or modify land planning or zoning (but not citizen advisory committees) and community redevelopment boards. “Executive officer” is defined as the chief executive officer of a governmental entity. The bills provide that each appointed public official and executive officer has a fiduciary duty of care to the governmental entity served and has a duty to act in accordance with laws and terms governing the office or employment, act with the care and competence normally exercised by reasonably prudent persons in similar corporate positions, act only within the scope of authority, refrain from conduct likely to damage the economic interests of the governmental entity. Further, such persons must become reasonably informed in connection with any decision-making function and keep reasonably informed concerning the performance of a governmental entity’s officers, agents and employees. The bills impose training requirements on appointed public officers and executive officers that require completion of at least five hours of board governance training per term served. The bills require the Department of Business and Professional Regulation to approve a web-based training program or publish a list of approved training providers. The bills specify the minimum content of such training programs, including board governance best practices and fiduciary duty of care and liabilities imposed by the new law. The bills provide that governmental entities with annual revenues of less than $300,000 may have governance training provided by in-house counsel of the governmental entity. Governmental entities whose annual revenues are less than $100,000 and appointed officials who hold elected office in another capacity are exempt from the training requirement. The bills provide that all legal counsel employed by a governmental entity must represent the legal interest and position of the governing body of the governmental entity and not the interest of any individual or employee of the governmental entity, unless such representation is directed by the governmental entity. CS/CS/SB 1270 passed the Senate by a vote of 38-1 and is awaiting action by the House. (O’Hara)