Senate Bill sb2414c1
CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2007                           CS for SB 2414
    By the Committee on Higher Education; and Senator Ring
    589-2163-07
  1                      A bill to be entitled
  2         An act relating to commercialization of
  3         university research; creating s. 288.956, F.S.;
  4         providing legislative intent for the Sure
  5         Ventures Commercialization Program; creating s.
  6         288.9561, F.S.; creating Sure Ventures
  7         Commercialization, Inc., a not-for-profit
  8         corporation; requiring Enterprise Florida,
  9         Inc., to provide administrative support to the
10         corporation and be its successor in interest;
11         providing for its administration by a board;
12         providing for appointment of board members;
13         providing for terms; providing for service
14         without compensation; providing for
15         reimbursement for per diem, travel, and other
16         direct expenses; providing criteria for
17         membership; providing for powers and duties of
18         the board; providing for hiring employees;
19         providing for meetings of the board;
20         authorizing the board to invest funds through
21         the State Board of Administration; providing
22         for contracts with state universities;
23         requiring the board to prepare and deliver an
24         annual report to the Governor and the
25         Legislature by a specified date; detailing the
26         content of the report; providing for exclusion
27         of liability by the corporation; creating s.
28         288.9562, F.S.; creating the Sure Ventures
29         Commercialization Grant Program; providing for
30         the types of grants that may be made to state
31         universities for the commercialization of
                                  1
CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2007                           CS for SB 2414
    589-2163-07
 1         research projects; creating s. 288.9563, F.S.;
 2         providing for grant application and approval
 3         procedures; providing appropriations; providing
 4         an effective date.
 5  
 6  Be It Enacted by the Legislature of the State of Florida:
 7  
 8         Section 1.  Section 288.956, Florida Statutes, is
 9  created to read:
10         288.956  Sure Ventures Commercialization Program.--
11         (1)  The Sure Ventures Commercialization Program is
12  established for the purpose of financing the commercialization
13  of products and services developed from the research and
14  development conducted at public universities in this state.
15  The purpose of the program is to enhance the economy of this
16  state by:
17         (a)  Converting products from research performed at
18  public universities into viable consumer products; and
19         (b)  Precipitating the formation of new Florida
20  companies to further develop and sell those products in the
21  commercial marketplace.
22         (2)  The Sure Ventures Commercialization Program is
23  designed so that a public university can apply for funding
24  from Sure Ventures Commercialization, Inc., in order to
25  commercially develop products and services resulting from
26  research at the university. Funding from the Sure Ventures
27  Commercialization Trust Fund may be used for a variety of
28  premarketing activities, including, but not limited to,
29  securing patents, establishing start-up companies, developing
30  license agreements, attracting private investment, and
31  supporting other activities that are necessary to establish
                                  2
CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2007                           CS for SB 2414
    589-2163-07
 1  commercially viable ventures for the marketing and sale of
 2  products. Funds may not be used for research or development.
 3         Section 2.  Section 288.9561, Florida Statutes, is
 4  created to read:
 5         288.9561  Sure Ventures Commercialization, Inc.--
 6         (1)  CREATION.--There is created Sure Ventures
 7  Commercialization, Inc., a not-for-profit corporation, which
 8  shall be registered, incorporated, organized, and operated
 9  under chapter 617 with Enterprise Florida, Inc., as its sole
10  member.
11         (a)  The corporation is not a unit of state government
12  or a political subdivision of the state. However, the
13  Legislature declares that the corporation is subject to s. 24,
14  Art. I of the State Constitution and chapter 119, relating to
15  public records, and the provisions of chapter 286 relating to
16  public meetings and records. Furthermore, all officers,
17  directors, and employees of the corporation must comply with
18  the code of ethics for public officers and employees under
19  part III of chapter 112.
20         (b)  The corporation shall adopt suitable articles of
21  incorporation and bylaws and must establish at least one
22  corporate office in this state and appoint a registered agent.
23         (c)  The corporation may hire or contract for all
24  personnel necessary to properly execute the powers and duties
25  bestowed upon it within the funds appropriated to implement
26  ss. 288.956-288.9566. Using funds appropriated to implement
27  this section, the corporation may not expend more than $1
28  million each year for personnel and necessary administrative
29  expenditures, including, but not limited to, travel and per
30  diem, legal fees, consultant's fees, rents and utilities, and
31  audit fees.
                                  3
CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2007                           CS for SB 2414
    589-2163-07
 1         (d)  Subject to appropriations, Enterprise Florida,
 2  Inc., shall contract to provide administrative support to the
 3  corporation as requested by the corporation. If the
 4  corporation is dissolved, Enterprise Florida, Inc., becomes
 5  the corporation's successor in interest and assumes all
 6  rights, duties, and obligations of the corporation under any
 7  contract to which the corporation is then a party and under
 8  law.
 9         (2)  PURPOSE.--The corporation shall be organized to
10  administer a commercialization grants program as defined in
11  this act with funding from the Sure Ventures Commercialization
12  Trust Fund, and the corporation may receive, hold, invest,
13  administer, and disburse funds appropriated by the
14  Legislature.
15         (3)  BOARD; MEMBERSHIP.--The corporation shall be
16  governed by a board of directors.
17         (a)  The board of directors shall consist of nine
18  voting members, of whom the Governor shall appoint three, the
19  President of the Senate shall appoint three, and the Speaker
20  of the House of Representatives shall appoint three.
21         (b)  As a candidate to be selected to the board of
22  directors, an individual must have prior experience with and
23  demonstrated expertise and competence in early stage business
24  investment, corporate management, the fiduciary management of
25  investment funds, or the commercialization of research
26  products. The individual must also demonstrate competence with
27  respect to the administration and management of a publicly
28  listed company, or experience and competence in public
29  accounting, auditing, and fiduciary responsibilities. A board
30  member may not have an interest in any grant proposal
31  submitted to the corporation.
                                  4
CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2007                           CS for SB 2414
    589-2163-07
 1         (c)  Each member of the board of directors shall be
 2  appointed to a term of 4 years, except that for the initial
 3  appointments the Governor, the President of the Senate, and
 4  the Speaker of the House of Representatives each shall appoint
 5  one member for a term of 1 year, one member for a term of 2
 6  years, and one member for a term of 4 years in order to
 7  achieve staggered terms among the members of the board. A
 8  member is not eligible for reappointment to the board, except
 9  that a member appointed to an initial term of 1 year or 2
10  years may be reappointed for an additional term of 4 years,
11  and a person appointed to fill a vacancy having 2 years or
12  less remaining on the term may be reappointed for an
13  additional term of 4 years. The Governor, the President of the
14  Senate, and the Speaker of the House of Representatives shall
15  make their initial appointments to the board by October 1,
16  2007.
17         (d)  The Governor, the President of the Senate, or the
18  Speaker of the House of Representatives, respectively, shall
19  fill a vacancy on the board of directors, according to who
20  appointed the member whose vacancy is to be filled or whose
21  term has expired. A vacancy that occurs before the scheduled
22  expiration of the term of the member shall be filled for the
23  remainder of the unexpired term. A board member whose term has
24  expired shall continue to serve until his or her replacement
25  has been appointed.
26         (e)  Each member of the board of directors who is not
27  otherwise required to file financial disclosure under s. 8,
28  Art. II of the State Constitution or s. 112.3144 shall file
29  disclosure of financial interests under s. 112.3145.
30         (f)1.  A person appointed to the board of directors
31  must agree to refrain from having any direct interest in any
                                  5
CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2007                           CS for SB 2414
    589-2163-07
 1  contract, franchise, privilege, or other benefit arising from
 2  a university project receiving financing from the board during
 3  the term of his or her appointment and for 2 years after the
 4  termination of the appointment.
 5         2.  If a person accepts a direct interest in any
 6  contract, franchise, privilege, or other benefit granted by
 7  the institution, an affiliate, or a corporation benefited by
 8  Sure Ventures Commercialization Grant proceeds within 2 years
 9  after the termination of his or her service on the board, the
10  person commits a misdemeanor of the first degree, punishable
11  as provided in s. 775.083 or s. 775.084.
12         (g)  Members of the board of directors shall receive no
13  compensation for their services, but are entitled to receive
14  reimbursement for necessary expenses, including travel and per
15  diem expenses, incurred in the performance of their duties as
16  provided in s. 112.061.
17         (h)  Each member of the board of directors is
18  accountable for the proper performance of his or her duties of
19  office, and each member owes a fiduciary duty to the people of
20  the state to ensure that funds provided in furtherance of this
21  section are disbursed and used as prescribed by law and
22  contract and in the best interests of the state.
23         (i)  The Governor, the President of the Senate, or the
24  Speaker of the House of Representatives, according to which
25  officer appointed the member, may remove a member for
26  malfeasance, misfeasance, neglect of duty, incompetence,
27  permanent inability to perform official duties, unexcused
28  absence from three consecutive meetings of the board, arrest
29  or indictment for a crime that is a felony or a misdemeanor
30  involving theft or a crime of dishonesty, or pleading nolo
31  contendere to, or being found guilty of, any crime.
                                  6
CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2007                           CS for SB 2414
    589-2163-07
 1         (4)  ORGANIZATION; MEETINGS.--
 2         (a)1.  The board of directors shall annually elect a
 3  chairperson and a vice chairperson from among the board's
 4  members. The members may, by a vote of five of the nine board
 5  members, remove a member from the position of chairperson or
 6  vice chairperson before the expiration of his or her term as
 7  chairperson or vice chairperson. His or her successor shall be
 8  elected to serve for the balance of the removed chairperson's
 9  or vice chairperson's term.
10         2.  The chairperson shall ensure that records are kept
11  of the proceedings of the board of directors and is the
12  custodian of all books, documents, and papers filed with the
13  board; the minutes of meetings of the board; and the official
14  seal of the corporation.
15         (b)1.  The board of directors shall meet upon the call
16  of the chairperson or at the request of a majority of the
17  members, but not less than twice each calendar year if a
18  university request for funding under this section is pending.
19         2.  A majority of the voting members of the board of
20  directors constitutes a quorum. Except as otherwise provided
21  in this section, the board may take official action by a
22  majority vote of the members present at any meeting at which a
23  quorum is present. Members may not vote by proxy.
24         3.  A member of the board may participate in a meeting
25  of the board by telephone or videoconference through which
26  each member may hear every other member.
27         (5)  POWERS AND DUTIES.--The corporation shall be
28  organized to receive, hold, invest, administer, and disburse
29  funds appropriated by the Legislature in support of ss.
30  288.956-288.9566 and to disburse any income generated from the
31  investment of these funds consistent with the purpose and
                                  7
CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2007                           CS for SB 2414
    589-2163-07
 1  provisions of this section. In addition to the powers and
 2  duties prescribed in chapter 617 and the articles and bylaws
 3  adopted under that chapter, the corporation:
 4         (a)  May make and enter into contracts and assume any
 5  other functions that are necessary to carry out the provisions
 6  of this section.
 7         (b)  May enter into leases and hold notes, mortgages,
 8  guarantees, or security agreements to secure the performance
 9  of obligations of the university under a contract.
10         (c)  May perform all acts and things necessary or
11  convenient to carry out the powers expressly granted in ss.
12  288.956-288.9566 and a contract entered into between the
13  corporation and a university.
14         (d)  May make expenditures from funds provided by this
15  state, including any necessary administrative expenditures
16  consistent with its powers.
17         (e)  Shall indemnify, and purchase and maintain
18  insurance on behalf of, directors, officers, and employees of
19  the corporation against any personal liability or
20  accountability.
21         (f)  Shall disburse funds under this section and a
22  contract entered into between the corporation and a
23  university.
24         (g)  Shall receive and review reports and financial
25  documentation provided by a university to ensure compliance
26  with this section and the contract.
27         (h)  Shall prepare an annual report as prescribed in
28  subsection (8).
29         (i)  May accept gifts, grants, donations, in-kind
30  services, or other goods and services for carrying out its
31  purposes.
                                  8
CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2007                           CS for SB 2414
    589-2163-07
 1         (6)  INVESTMENT OF FUNDS.--The corporation may enter
 2  into an agreement with the State Board of Administration under
 3  which funds received by the corporation which are not
 4  disbursed to a university or invested must be invested by the
 5  State Board of Administration on behalf of the corporation.
 6  Funds shall be invested in suitable instruments authorized
 7  under s. 215.47 and specified in investment guidelines
 8  established and agreed to by the State Board of Administration
 9  and the corporation.
10         (7)  CONTRACTS FOR THE AWARD OF GRANTS.--
11         (a)  The corporation shall negotiate and execute
12  contracts with universities governing the terms of grants
13  provided under ss. 288.956-288.9566. Grants must be approved
14  by a two-thirds vote of the board of directors when a quorum
15  is present at a duly noticed meeting.
16         (b)  Each contract, at a minimum, must contain
17  provisions:
18         1.  Specifying the procedures and schedules that govern
19  the disbursement of funds under this section and specifying
20  the conditions or deliverables that the university must
21  satisfy before the release of each disbursement.
22         2.  Requiring the university to expend 95 percent of
23  grant proceeds for described uses in the approved grant
24  application and not otherwise reduce grant proceeds with
25  facilities charges or fees by the university.
26         3.  Requiring the university to submit data to the
27  corporation concerning the activities and performance of
28  projects funded under this section and to provide to the
29  corporation an annual accounting of the expenditure of funds
30  disbursed under this section by August 1 of each year until 1
31  year elapses from the university's final disbursement of all
                                  9
CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2007                           CS for SB 2414
    589-2163-07
 1  grant funds received from the Sure Ventures Commercialization
 2  Program.
 3         (8)  ANNUAL REPORT.--By December 1 of each year, the
 4  corporation shall prepare a report of the activities and
 5  outcomes under ss. 288.956-288.9566 for the preceding fiscal
 6  year and submit the report to the Governor, the President of
 7  the Senate, and the Speaker of the House of Representatives.
 8  The report, at a minimum, must include:
 9         (a)  An accounting of the amount of grants awarded and
10  disbursed during the preceding fiscal year by project and
11  university.
12         (b)  Project level summaries of the information
13  reported by grant recipients in paragraph (7)(b).
14         (c)  A description of the benefits to this state
15  resulting from the grant program, including the number of
16  businesses created, associated industries started, and the
17  growth of related research projects at the university.
18         (d)  An independent audit of the corporation's
19  financial statements, which should include a statement of
20  operations that reports receipts and expenditures during the
21  preceding fiscal year for personnel, administration, and
22  operational costs of the corporation.
23         (e)  A description of those projects funded by the
24  grant program in which two or more universities are working
25  cooperatively together to avoid duplicating the activities,
26  programs, and functions of the cooperating universities and to
27  leverage the expertise offered by other universities.
28         (9)  LIABILITY.--
29         (a)  The appropriation or disbursement of funds under
30  this section does not constitute a debt, liability, or
31  obligation of the state, any political subdivision thereof, or
                                  10
CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2007                           CS for SB 2414
    589-2163-07
 1  the corporation, or a pledge of the faith and credit of the
 2  state or of any political subdivision.
 3         (b)  The appropriation or disbursement of funds under
 4  this section does not subject the state, any political
 5  subdivision, or the corporation to liability related to the
 6  research activities, commercialization activities, and
 7  research products that receive funding under this section.
 8         (10)  DEBT.--The corporation may not incur debt. This
 9  prohibition includes long-term leases, promissory notes,
10  loans, lease-purchase agreements, certificates of
11  participation, the sale of bonds or revenue bonds, or the
12  award or commitment to award grants in excess of the
13  unencumbered cash balance in the Sure Ventures
14  Commercialization Trust Fund.
15         Section 3.  Section 288.9562, Florida Statutes, is
16  created to read:
17         288.9562  Sure Ventures Commercialization Grant
18  Program.--The Sure Ventures Commercialization Grant Program is
19  established to provide early stage capital funding from the
20  Sure Ventures Commercialization Trust Fund in support of the
21  commercialization of university research products. Grants from
22  the Sure Ventures Commercialization Trust Fund shall be
23  disbursed under the following categories:
24         (1)  Phase One grants, which may not exceed $50,000 per
25  project, may be used to assist with early market research,
26  independent evaluation, consultation, and other initial
27  activities that may be required to develop an initial business
28  model for a university research product having the potential
29  for commercialization.
30         (2)  Phase Two grants, which may not exceed $100,000
31  per project, may be used to match private investment in a
                                  11
CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2007                           CS for SB 2414
    589-2163-07
 1  university research commercialization proposal. The university
 2  proposal must have been successfully evaluated and developed
 3  into a level of readiness contemplated for projects that have
 4  received Phase One grants. Phase Two grants shall be used to
 5  develop a complete business plan for the commercialization of
 6  a university research product. For a Phase Two grant proposal,
 7  the university must document the availability of $1 in private
 8  support for each $1 in state funding requested.
 9         (3)  Phase Three grants, which may not exceed $250,000
10  per project, may be used to match private investment relating
11  to the implementation of a completed business plan for a
12  university research product. For a Phase Three grant proposal,
13  the university must document the availability of $1 in private
14  support for each $1 in state funding requested.
15         Section 4.  Section 288.9563, Florida Statutes, is
16  created to read:
17         288.9563  Sure Ventures Commercialization grants;
18  application and approval procedures.--
19         (1)  A university, or any two or more universities,
20  upon approval by an authorized officer of the university, may
21  submit a request to Sure Ventures Commercialization, Inc., for
22  a grant to facilitate the commercialization of a university
23  research product or the commercialization of a patent held by
24  a university.
25         (2)  Subject to the availability of trust funds, the
26  corporation shall periodically solicit specific proposals from
27  universities for grants to be funded by the corporation.
28         (a)1.  The corporation shall meet at least once every 6
29  months for the purpose of evaluating the grant proposals and
30  for awarding grants if the uncommitted balance in the Sure
31  Ventures Commercialization Trust Fund exceeds $750,000.
                                  12
CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2007                           CS for SB 2414
    589-2163-07
 1         2.  The minimum time between the date when the notice
 2  for the solicitation for proposals is issued and the date when
 3  the finished proposal is received by the corporation may not
 4  be less than 60 days. The corporation must approve or deny a
 5  completed proposal not more than 60 days after receiving the
 6  proposal.
 7         3.  The board of directors, by a majority vote, may
 8  increase the time allotted to approve or deny the submitted
 9  proposals by an additional 60 days when complex proposals
10  require additional time for proper evaluation.
11         (b)1.  The board shall establish guidelines prescribing
12  the criteria and format for proposed projects submitted by
13  universities.
14         2.  A university need not receive prior stage grants to
15  be eligible for phase two or phase three grants.
16         (3)  When evaluating the projects submitted for funding
17  support through Sure Ventures Commercialization, Inc., the
18  board must consider the following criteria:
19         (a)  The potential return to the university which may
20  be reasonably assumed based on the business case presented in
21  support of the proposed project;
22         (b)  The potential for the creation of high-wage jobs
23  resulting from the success of the proposed project;
24         (c)  The potential of the proposed project to address
25  pressing needs of the residents of the state;
26         (d)  The potential of the proposed project to
27  "spin-off" other related business enterprises;
28         (e)  The potential of the proposed project to enhance
29  the economic competitiveness of the state and the university;
30  and
31  
                                  13
CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2007                           CS for SB 2414
    589-2163-07
 1         (f)  The technical, financial, organizational, and
 2  marketing feasibility of the project and its business plan.
 3         (4)  The proposed project must be evaluated on its
 4  individual merits.
 5         Section 5.  The nonrecurring sum of $1 million is
 6  appropriated from the General Revenue Fund to Sure Ventures
 7  Commercialization, Inc., for the purpose of creating and
 8  organizing the corporation, implementing a grant program as
 9  defined in this act, and carrying out the administration of
10  administering the Sure Ventures Commercialization Trust Fund
11  during the 2007-2008 fiscal year.
12         Section 6.  The nonrecurring sum of $10 million is
13  appropriated from the General Revenue Fund to the Sure
14  Ventures Commercialization Trust Fund for the purpose of
15  implementing the provisions of this act during the 2007-2008
16  fiscal year.
17         Section 7.  This act shall take effect July 1, 2007.
18  
19  
20  
21  
22  
23  
24  
25  
26  
27  
28  
29  
30  
31  
                                  14
CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2007                           CS for SB 2414
    589-2163-07
 1          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
 2                             SB 2414
 3                                 
 4  The committee substitute clarifies the purpose, organization,
    and financial requirements of the Sure Ventures
 5  Commercialization Program by:
 6  Adding that a purpose of the program is precipitating the
    formation of new Florida companies to develop and sell
 7  products from university research;
 8  Specifying that Enterprise Florida, Inc., is the corporation's
    sole member;
 9  
    Specifying that the corporation must be organized to
10  administer a commercialization grant program with funding from
    the Sure Ventures Commercialization Trust Fund;
11  
    Requiring a two-thirds vote of the board of directors when a
12  quorum is present at a duly noticed meeting to approve grants;
13  Making travel reimbursement and per diem of board members
    subject to s.112.061, F.S.;
14  
    Requiring a university to expend 95 percent of grant proceeds
15  as approved in the grant application;
16  Eliminating a provision that required grant recipients to
    negotiate repayment to the corporation when an approved grant
17  resulted in sufficient revenues to sustain a profitable
    operation;
18  
    Permitting an authorized officer of the university to submit
19  the grant proposal for approval; and
20  Stipulating that a university need not receive prior stage
    grants in order to be eligible for phase two or phase three
21  grants.
22  
23  
24  
25  
26  
27  
28  
29  
30  
31  
                                  15
CODING: Words stricken are deletions; words underlined are additions.