Florida Senate - 2018                                    SB 1314
       
       
        
       By Senator Brandes
       
       
       
       
       
       24-00987A-18                                          20181314__
    1                        A bill to be entitled                      
    2         An act relating to the Florida Capital Formation Act;
    3         amending s. 20.60, F.S.; deleting the requirement that
    4         the Department of Economic Opportunity manage certain
    5         activities related to the commercialization of
    6         specified products, services, and ideas; specifying
    7         that the Institute for Commercialization of Florida
    8         Technology is not an appropriate direct-support
    9         organization; amending s. 288.9621, F.S.; including s.
   10         288.96255, F.S., in the Florida Capital Formation Act;
   11         amending s. 288.9622, F.S.; revising legislative
   12         intent; amending s. 288.9623, F.S.; defining terms;
   13         amending s. 288.9625, F.S.; redesignating the
   14         Institute for the Commercialization of Public Research
   15         as the Institute for Commercialization of Florida
   16         Technology; deleting provisions regarding the
   17         institute’s responsibilities; requiring that the
   18         investment-related affairs of the institute be managed
   19         by the private fund manager and overseen by the board
   20         of directors; restructuring the board of directors and
   21         the selection process for the board of directors;
   22         specifying term limits of the board members under
   23         certain circumstances; requiring the board of
   24         directors to amend the bylaws of the institute under
   25         certain circumstances; providing that a director is
   26         subject to restrictions on certain conflicts of
   27         interest; prohibiting a director from having a
   28         financial interest in certain investments; authorizing
   29         a director to be reimbursed for certain expenses;
   30         granting the institute certain powers; requiring the
   31         institute to indemnify certain persons; delegating
   32         certain duties to the board of directors; revising to
   33         whom the board must provide a copy of the annual
   34         report and who may require and receive supplemental
   35         data relative to the institute’s operation; specifying
   36         that certain requirements be met before the private
   37         fund manager is authorized to make an investment in a
   38         company, on behalf of the institute; deleting
   39         provisions relating to certain duties of the
   40         institute; deleting provisions relating to certain
   41         fees charged by the institute and the prohibition on
   42         using capital in support of certain entities;
   43         specifying that the annual report is considered a
   44         public record subject to certain exemptions; revising
   45         the requirements of the institute’s annual report;
   46         listing requirements and prohibitions for the private
   47         fund manager; stating the purpose of the institute’s
   48         use of the private fund manager; requiring the private
   49         fund manager to assume the management of certain
   50         assets; authorizing the private fund manager to act on
   51         behalf of the institute for certain purposes;
   52         requiring that the private fund manager be paid
   53         certain fees; authorizing the private fund manager to
   54         undertake certain activities on behalf of the
   55         institute; requiring the private fund manager to issue
   56         an annual report to the board of directors by a
   57         specific date; specifying that the annual report is
   58         considered a public record subject to certain
   59         exemptions; requiring that the report contain certain
   60         information; amending s. 288.96255, F.S.; requiring
   61         that certain proceeds be returned to the Florida
   62         Technology Seed Capital Fund after the payment of
   63         certain costs and fees; requiring the institute to
   64         employ a private fund manager; requiring the private
   65         fund manager to perform specific duties; requiring
   66         that the private fund manager receive certain fees and
   67         costs at a specified time; requiring the private fund
   68         manager to use a certain process to evaluate a
   69         proposal; requiring the private fund manager to
   70         consider certain factors when approving a company for
   71         investment; deleting specific requirements for the
   72         investment of funds; authorizing the private fund
   73         manager, in addition to the institute, to perform
   74         certain tasks; amending s. 288.9627, F.S.; conforming
   75         provisions to changes made by this act; providing an
   76         effective date.
   77          
   78  Be It Enacted by the Legislature of the State of Florida:
   79  
   80         Section 1. Paragraph (e) of subsection (4) and paragraph
   81  (b) of subsection (9) of section 20.60, Florida Statutes, are
   82  amended to read:
   83         20.60 Department of Economic Opportunity; creation; powers
   84  and duties.—
   85         (4) The purpose of the department is to assist the Governor
   86  in working with the Legislature, state agencies, business
   87  leaders, and economic development professionals to formulate and
   88  implement coherent and consistent policies and strategies
   89  designed to promote economic opportunities for all Floridians.
   90  To accomplish such purposes, the department shall:
   91         (e) Manage the activities of public-private partnerships
   92  and state agencies in order to avoid duplication and promote
   93  coordinated and consistent implementation of programs in areas
   94  including, but not limited to, tourism; international trade and
   95  investment; business recruitment, creation, retention, and
   96  expansion; minority and small business development; rural
   97  community development; commercialization of products, services,
   98  or ideas developed in public universities or other public
   99  institutions; and the development and promotion of professional
  100  and amateur sporting events.
  101         (9) The executive director shall:
  102         (b) Serve as the manager for the state with respect to
  103  contracts with Enterprise Florida, Inc., the Institute for the
  104  Commercialization of Public Research, and all applicable direct
  105  support organizations. To accomplish the provisions of this
  106  section and applicable provisions of chapter 288, and
  107  notwithstanding the provisions of part I of chapter 287, the
  108  director shall enter into specific contracts with Enterprise
  109  Florida, Inc., the Institute for the Commercialization of Public
  110  Research, and other appropriate direct-support organizations.
  111  Such contracts may be for multiyear terms and must shall include
  112  specific performance measures for each year. For purposes of
  113  this section, the Florida Tourism Industry Marketing Corporation
  114  and the Institute for Commercialization of Florida Technology
  115  are not is not an appropriate direct-support organizations
  116  organization.
  117         Section 2. Section 288.9621, Florida Statutes, is amended
  118  to read:
  119         288.9621 Short title.—Sections 288.9621-288.96255 Sections
  120  288.9621-288.9625 may be cited as the “Florida Capital Formation
  121  Act.”
  122         Section 3. Section 288.9622, Florida Statutes, is amended
  123  to read:
  124         288.9622 Findings and intent.—
  125         (1) The Legislature finds and declares that there is a need
  126  to increase the availability of seed capital and early stage
  127  investment venture equity capital for emerging companies in the
  128  state, including, without limitation, businesses enterprises in
  129  life sciences, information technology, advanced manufacturing
  130  processes, aviation and aerospace, and homeland security and
  131  defense, as well as other industries of strategic importance to
  132  this state strategic technologies.
  133         (2) It is the intent of the Legislature that ss. 288.9621
  134  288.96255 ss. 288.9621-288.9625 serve to mobilize private
  135  investment in a broad variety of venture capital partnerships in
  136  diversified industries and geographies; retain private sector
  137  investment criteria focused on rate of return; allow the use the
  138  services of highly qualified private fund managers experienced
  139  in the seed and early stage development industry in this state;
  140  and outline the use, qualifications, and activities of the
  141  private management by a private fund manager of the assets of
  142  the Seed Capital Accelerator Program and the Florida Technology
  143  Seed Capital Fund investment portfolio of the Institute for
  144  Commercialization of Florida Technology venture capital industry
  145  regardless of location; facilitate the organization of the
  146  Florida Opportunity Fund as an investor in seed and early stage
  147  businesses, infrastructure projects, venture capital funds, and
  148  angel funds; and precipitate capital investment and extensions
  149  of credit to and in the Florida Opportunity Fund.
  150         (3) It is the intent of the Legislature to mobilize
  151  investment venture equity capital for investment in such a
  152  manner as to result in a significant potential to create new
  153  businesses and jobs in this state which that are based on high
  154  growth potential technologies, products, or services and which
  155  that will further diversify the economy of this state.
  156         (4) It is the intent of the Legislature to reduce the
  157  ongoing operational cost and burden of managing the Florida
  158  Technology Seed Capital Fund and the Seed Capital Accelerator
  159  Program to this state by engaging a private asset management
  160  entity in this state which is familiar with the seed and early
  161  stage investment industry in this state. This entity would be
  162  responsible for the management of the assets of the Seed Capital
  163  Accelerator Program and the Florida Technology Seed Capital Fund
  164  investment portfolio without requiring ongoing budget
  165  expenditures by this state that an institute be created to
  166  mentor, market, and attract capital to such commercialization
  167  ventures throughout the state.
  168         Section 4. Section 288.9623, Florida Statutes, is amended
  169  to read:
  170         288.9623 Definitions.—As used in ss. 288.9621-288.96255,
  171  the term ss. 288.9621-288.9625:
  172         (1) “Accelerator program” means the Seed Capital
  173  Accelerator Program managed by the institute.
  174         (2)(1) “Board” means the board of directors of the Florida
  175  Opportunity Fund.
  176         (3)(2) “Fund” means the Florida Opportunity Fund.
  177         (4) “Institute” means the Institute for Commercialization
  178  of Florida Technology.
  179         (5) “Investment portfolio” means individual or collective
  180  investment assets held under the technology fund.
  181         (6) “Net profits” means the total gross proceeds received
  182  from the sale or liquidation of an asset of the investment
  183  portfolio less any costs, legal fees, professional fees,
  184  consulting fees, government fees, brokerage fees, taxes,
  185  management fees pursuant to s. 288.9625(12)(b), disbursement to
  186  private investors pursuant to s. 288.96255(6), or other fees,
  187  costs, and expenses incurred in the sale or liquidation of any
  188  of the investment portfolio assets.
  189         (7) “Portfolio companies” means the companies who are part
  190  of the Florida Technology Seed Capital Fund investment
  191  portfolio.
  192         (8) “Private fund manager” means the private entity, or its
  193  designee, selected to manage the investment portfolio on behalf
  194  of the institute.
  195         (9) “Technology fund” means the Florida Technology Seed
  196  Capital Fund managed by the institute.
  197         Section 5. Section 288.9625, Florida Statutes, is amended
  198  to read:
  199         288.9625 Institute for the Commercialization of Florida
  200  Technology Public Research.—There is established at a public
  201  university or research center in this state the Institute for
  202  the Commercialization of Florida Technology Public Research.
  203         (1) The institute shall be a nonprofit not-for-profit
  204  corporation registered, incorporated, and operated in accordance
  205  with chapter 617.
  206         (2) The purpose of the institute is to assist in the
  207  commercialization of products developed by the research and
  208  development activities of an innovation business, including, but
  209  not limited to, those as defined in s. 288.1089; a publicly
  210  supported college, university, or research institute; or any
  211  other publicly supported organization in this state. The
  212  institute shall fulfill its purpose in the best interests of the
  213  state. The institute:
  214         (a) Is a corporation primarily acting as an instrumentality
  215  of the state pursuant to s. 768.28(2), for the purposes of
  216  sovereign immunity;
  217         (b) Is not an agency within the meaning of s. 20.03(11);
  218         (c) Is subject to the open records and meetings
  219  requirements of s. 24, Art. I of the State Constitution, chapter
  220  119, and s. 286.011;
  221         (d) Is not subject to the provisions of chapter 287;
  222         (e) Is Shall be governed by the code of ethics for public
  223  officers and employees as set forth in part III of chapter 112;
  224  and
  225         (f) May create corporate subsidiaries.;
  226         (g) Shall support existing commercialization efforts at
  227  state universities; and
  228         (h) May not supplant, replace, or direct existing
  229  technology transfer operations or other commercialization
  230  programs, including incubators and accelerators.
  231         (3) The articles of incorporation of the institute must be
  232  approved in a written agreement with the department. The
  233  agreement and the articles of incorporation shall:
  234         (a) Provide that the institute shall provide equal
  235  employment opportunities for all persons regardless of race,
  236  color, religion, gender, national origin, age, handicap, or
  237  marital status;
  238         (b) Provide that the institute is subject to the public
  239  records and meeting requirements of s. 24, Art. I of the State
  240  Constitution;
  241         (c) Provide that all officers, directors, and employees of
  242  the institute are shall be governed by the code of ethics for
  243  public officers and employees as set forth in part III of
  244  chapter 112;
  245         (d) Provide that members of the board of directors of the
  246  institute are responsible for the prudent use of all public and
  247  private funds and that they will ensure that the use of funds is
  248  in accordance with all applicable laws, bylaws, and contractual
  249  requirements; and
  250         (e) Provide that the fiscal year of the institute is from
  251  July 1 to June 30.
  252         (4) The investment-related affairs of the institute shall
  253  be managed by the private fund manager, and overseen by a board
  254  of directors who shall serve without compensation. Each director
  255  shall have only one vote. The chair of the board of directors
  256  shall be selected by a majority vote of the directors, a quorum
  257  being present. The board of directors shall consist of the
  258  following five members:
  259         (a) The executive director of the department, or the
  260  director’s designee.
  261         (b) The president of the university where the institute is
  262  located or the president’s designee unless multiple universities
  263  jointly sponsor the institute, in which case the presidents of
  264  the sponsoring universities shall agree upon a designee.
  265         (a)(c)The board of directors shall consist of three
  266  directors appointed by the Governor to 3-year staggered terms,
  267  to which the directors may be reappointed.
  268         (b) If there is any change to the number of directors by an
  269  amendment to the Florida Capital Formation Act:
  270         1. The term and service for a director appointed by the
  271  Governor must continue through the end of his or her current
  272  term as of the effective date of the amendment;
  273         2. The term and service for a director not appointed by the
  274  Governor and who has served on the board of directors in excess
  275  of 3 years must cease and terminate as of the effective date of
  276  the amendment; and
  277         3. The bylaws of the institute shall be amended accordingly
  278  by the board of directors.
  279         (c) Upon vacancy, or within 90 days before an anticipated
  280  vacancy by the expiration of a term of a director, the private
  281  fund manager shall submit a list of three eligible nominees,
  282  which may include the incumbent director, to replace the
  283  outgoing director. The board of directors, voting along with the
  284  private fund manager, may appoint a director from the nominee
  285  list or may request and appoint a director from a new list of
  286  three nominees that were not included on the previous list.
  287         (d) The persons appointed as replacement directors must
  288  include persons who have expertise in the area of the selection
  289  and supervision of early stage investment managers or in the
  290  fiduciary management of investment funds and other areas of
  291  expertise as considered appropriate.
  292         (e) Directors are subject to any restrictions on conflicts
  293  of interest specified in the organizational documents and may
  294  not have a financial interest in any venture capital investment
  295  in any portfolio company.
  296         (f) Directors may be reimbursed for all reasonable,
  297  necessary, and actual expenses as determined and approved by the
  298  private fund manager pursuant to s. 112.061.
  299         (g) The institute shall have all powers granted under its
  300  organizational documents and shall indemnify its directors and
  301  the private fund manager to the broadest extent permissible
  302  under the laws of this state.
  303         (5) The board of directors shall oversee the private fund
  304  manager to ensure consistency with the Florida Capital Formation
  305  Act, to perform those duties as may be delegated to it in the
  306  bylaws of the institute, and to provide a copy of the
  307  institute’s annual report to the Governor, the President of the
  308  Senate, and the Speaker of the House of Representatives, and the
  309  president of the university at which the institute is located.
  310         (6) The department, the president and the board of trustees
  311  of the university where the institute is located, the Auditor
  312  General, and the Office of Program Policy Analysis and
  313  Government Accountability may require and receive from the
  314  institute or its independent auditor any detail or supplemental
  315  data relative to the operation of the institute.
  316         (7) To the extent funds for investment are available in the
  317  technology fund, the private fund manager, on behalf of the
  318  institute, may make an investment in a company or organization
  319  if all of the following requirements are met:
  320         (a) Before providing assistance, the institute accepted To
  321  be eligible for assistance, the company or organization
  322  attempting to commercialize its product based on the guidelines
  323  under s. 288.96255(4) must be accepted by the institute before
  324  receiving the institute’s assistance.
  325         (b) The company or organization is based in this state
  326  institute shall receive recommendations from any publicly
  327  supported organization that a company that is commercializing
  328  the research, technology, or patents from a qualifying publicly
  329  supported organization should be accepted into the institute.
  330         (c) The institute shall thereafter review the business
  331  plans and technology information of each such recommended
  332  company. If accepted, the institute shall mentor the company,
  333  develop marketing information on the company, and use its
  334  resources to attract capital investment into the company, as
  335  well as bring other resources to the company which may foster
  336  its effective management, growth, capitalization, technology
  337  protection, or marketing or business success.
  338         (8) The institute shall:
  339         (a) Maintain a centralized location to showcase companies
  340  and their technologies and products;
  341         (b) Develop an efficient process to inventory and publicize
  342  companies and products that have been accepted by the institute
  343  for commercialization;
  344         (c) Routinely communicate with private investors and
  345  venture capital organizations regarding the investment
  346  opportunities in its showcased companies;
  347         (d) Facilitate meetings between prospective investors and
  348  eligible organizations in the institute;
  349         (e) Hire full-time staff who understand relevant
  350  technologies needed to market companies to the angel investors
  351  and venture capital investment community; and
  352         (f) Develop cooperative relationships with publicly
  353  supported organizations all of which work together to provide
  354  resources or special knowledge that is likely to be helpful to
  355  institute companies.
  356         (8)(9)Except as provided under s. 288.96255, the institute
  357  may not develop or accrue any ownership, royalty, patent, or
  358  other such rights over or interest in companies or products in
  359  the institute except in connection with financing provided
  360  directly to client companies and shall maintain the
  361  confidentiality of proprietary information.
  362         (10) The institute may not charge for services provided to
  363  state universities and affiliated organizations, community
  364  colleges, or state agencies; however, the institute may deliver
  365  and charge for services to private companies and affiliated
  366  organizations if providing a service does not interfere with the
  367  core mission of the institute. The institute may not use its
  368  capital in support of private companies or affiliated
  369  organizations whose products were not developed by research and
  370  development activities of a publicly supported college,
  371  university, or research institute, or any other organization.
  372         (9)(11) By December 1 of each year, the institute shall
  373  issue an annual report concerning its activities to the
  374  Governor, the President of the Senate, and the Speaker of the
  375  House of Representatives. The annual report shall be considered
  376  a public record, as provided in paragraph (3)(b), subject to any
  377  appropriate exemptions under s. 288.9627. The annual report must
  378  shall include the following:
  379         (a) Information on any assistance provided by the institute
  380  to an innovation business, as defined in s. 288.1089; a publicly
  381  supported college, university, or research institute; or any
  382  other publicly supported organization in the state.
  383         (b) A description of the benefits to this state resulting
  384  from the institute, including the number of businesses created,
  385  associated industries started, the number of jobs created, and
  386  the growth of related projects.
  387         (c) Independently audited financial statements, including
  388  statements that show receipts and expenditures during the
  389  preceding fiscal year for personnel, management fees,
  390  administration, and operational costs of the institute.
  391         (10) The private fund manager:
  392         (a) Must be a for-profit limited liability company or a
  393  for-profit corporation formed, governed, and operated in
  394  accordance with chapter 605 or chapter 607, respectively.
  395         (b) Shall conduct activities on behalf of the institute
  396  which are consistent with the purposes set forth in this
  397  section.
  398         (c) Must have expertise and experience in the management
  399  and operation of early stage companies in this state.
  400         (d) Must have experience with investment in early stage
  401  ventures in this state and have a working knowledge and
  402  understanding of the investment portfolio and the relevant
  403  industries of the portfolio companies in this state.
  404         (e) Shall employ personnel and professionals who have
  405  knowledge of the investment portfolio and portfolio companies of
  406  the institute, as well as financial, technical, and business
  407  expertise to manage the technology fund activity.
  408         (f) May not be a public corporation or instrumentality of
  409  the state.
  410         (g) Is not a corporation primarily acting as an
  411  instrumentality of the state pursuant to s. 768.28(2), for the
  412  purposes of sovereign immunity.
  413         (h) Is not an agency within the meaning of s. 20.03(11).
  414         (i) Is not subject to chapter 287.
  415         (j) May not be governed by the code of ethics for public
  416  officers and employees as set forth in part III of chapter 112.
  417         (11) The purpose of the institute’s use of a private fund
  418  manager is to alleviate the state’s burden of the continued and
  419  future operational and management costs related to the
  420  technology fund and accelerator program, while allowing the
  421  institute, through the activities of the private fund manager,
  422  to continue to foster greater private-sector investment funding,
  423  to encourage seed-stage investments in startup and early stage
  424  companies, and to advise companies about how to restructure
  425  existing management, operations, product development, or service
  426  development to attract advantageous business opportunities.
  427         (12) The private fund manager shall assume the management
  428  of the assets of the accelerator program and the technology fund
  429  investment portfolios associated with the institute.
  430         (a) The private fund manager has the authority on behalf of
  431  the institute to:
  432         1. Negotiate investment, sale, and liquidation terms with
  433  portfolio and nonportfolio companies;
  434         2. Develop and execute contracts, or amendments thereto,
  435  with portfolio and nonportfolio companies;
  436         3. Seek new qualified companies for the investment of funds
  437  from the technology fund;
  438         4. Receive, on behalf of the institute, investment capital
  439  from the sale or liquidation of any portion of the investment
  440  portfolio, loan proceeds, or other investment returns, and remit
  441  such capital, proceeds, and returns to the technology fund
  442  pursuant to s. 288.96255, except as otherwise provided in this
  443  section and s. 288.96255; and
  444         5. Perform additional duties set forth in s. 288.96255.
  445         (b) The private fund manager shall be paid reasonable fees
  446  consistent with industry fund management practices and
  447  consisting of:
  448         1. An operational management fee, including the
  449  reimbursement of expenses, paid from the proceeds of the
  450  repayment of loans from the accelerator program or other
  451  capital, proceeds, and returns available in the technology fund;
  452         2. A portfolio fee paid from the proceeds of each sale or
  453  liquidation of assets or portions of the assets of the
  454  investment portfolio; and
  455         3. A closing fee paid from the investment amount paid by
  456  the technology fund to a company at the closing of each
  457  investment.
  458         (13) The private fund manager may undertake the following
  459  activities on behalf of the institute:
  460         (a) Mentor, assist with the development of marketing
  461  information, and assist with attracting capital investment, as
  462  well as bring other resources to the company which may foster
  463  its effective management, growth, capitalization, technology
  464  protection, or marketing or business success;
  465         (b) Communicate with private investors and venture capital
  466  organizations regarding investment opportunities in the
  467  portfolio companies of the technology fund and accelerator
  468  program;
  469         (c) Facilitate meetings between prospective investors and
  470  the companies; and
  471         (d) Develop cooperative relationships with publicly
  472  supported organizations that work together to provide resources
  473  or special knowledge likely to be helpful to portfolio
  474  companies.
  475         (14)By November 1 of each year, the private fund manager
  476  shall issue an annual report to the board of directors of the
  477  institute concerning the activities the private fund manager
  478  conducted which relate to existing accelerator program and
  479  technology fund investments in order for the board to be in
  480  compliance with its report obligations under subsection (9). The
  481  annual report provided by the private fund manager shall be
  482  considered a public record, as provided in paragraph (3)(b),
  483  subject to any appropriate exemptions under s. 288.9627. The
  484  annual report, at a minimum, must include:
  485         (a) A description of the benefits to this state resulting
  486  from the assets of the accelerator program and technology fund,
  487  including the number of jobs created, the amount of capital the
  488  companies raised, and other benefits relating to increased
  489  research expenditures and company growth.
  490         (b) Independently audited financial statements related to
  491  the receipt and calculation of the net profits of the investment
  492  portfolio.
  493         Section 6. Subsection (1) and subsections (3) through (7)
  494  of section 288.96255, Florida Statutes, are amended to read:
  495         288.96255 Florida Technology Seed Capital Fund; creation;
  496  duties.—
  497         (1) The Institute for the Commercialization of Florida
  498  Technology Public Research shall create the Florida Technology
  499  Seed Capital Fund as a corporate subsidiary. The purpose of the
  500  technology fund is to foster greater private-sector investment
  501  funding, to encourage seed-stage investments in start-up
  502  companies, and to advise companies about how to restructure
  503  existing management, operation, or production to attract
  504  advantageous business opportunities. The net profits of the
  505  proceeds of each sale or liquidation of assets or portions of
  506  the assets of the investment portfolio must a sale of the equity
  507  held by the fund shall be returned to the technology fund for
  508  reinvestment after payment of the applicable costs, professional
  509  fees, expenses, fees pursuant to s. 288.9625(12)(b), and
  510  disbursement to private investors pursuant to paragraph (6)(e).
  511         (3) The institute shall employ a private fund manager
  512  pursuant to s. 288.9625 professionals who have both technical
  513  and business expertise to manage the investment portfolio and
  514  technology fund activity. The private fund manager institute
  515  shall establish an investor advisory board comprised of venture
  516  capital professionals and early-stage investors from this and
  517  other states who shall advise the institute and guide the fund
  518  management of the technology fund and make funding
  519  recommendations, provided that capital for investment is
  520  available in the technology fund. The private fund manager shall
  521  receive reasonable fees consistent with industry practices for
  522  performing due diligence and an investment closing fee paid out
  523  of the technology fund at the closing of each investment in
  524  addition to reasonable attorney fees, other fees prescribed in
  525  s. 288.9625(12)(b), and other costs in connection with making an
  526  investment. Administrative costs paid out of the fund shall be
  527  determined by the investor advisory board.
  528         (4) The private fund manager institute shall use a thorough
  529  and detailed process that is modeled after investment industry
  530  practices the best practices of the investment industry to
  531  evaluate a proposal. In order to approve a company for
  532  investment, the private fund manager, on behalf of the
  533  institute, must consider if:
  534         (a) The company has a strong intellectual property
  535  position, a capable management team, readily identifiable paths
  536  to market or commercialization, significant job-growth
  537  potential, the ability to provide other sources of capital to
  538  leverage the state’s investment, and the potential to attract
  539  additional funding;
  540         (b) The private fund manager has had an opportunity to
  541  complete due diligence to its satisfaction company has been
  542  identified by a publicly funded research institution;
  543         (c) The start-up company is a target industry business as
  544  defined in s. 288.106(2); and
  545         (d) The company has been identified by An approved private
  546  sector lead investor who has demonstrated due diligence typical
  547  of start-up investments in evaluating the potential of the
  548  company has identified the company.; and
  549         (e) The advisory board and fund manager have reviewed the
  550  company’s proposal and recommended it.
  551         (5) (a)Seed Funds from the technology fund may be invested
  552  if the institute approves a company and the initial seed-stage
  553  investment. The initial seed-stage investment must be at least
  554  $50,000, but no more than $300,000. The initial seed-stage
  555  investment requires a one-to-one, private-sector match of
  556  investment.
  557         (b) Additional seed funds may be invested in a company if
  558  approved by the institute. The cumulative total of investment in
  559  a single company may not exceed $500,000. Any additional
  560  investment amount requires a two-to-one, private-sector match of
  561  investment.
  562         (6) The institute or private fund manager may:
  563         (a) Provide a company with value-added support services in
  564  the areas of business plan development and strategy, the
  565  preparation of investor presentations, and other critical areas
  566  identified by the private fund manager institute to increase its
  567  chances for long-term viability and success;
  568         (b) Encourage appropriate investment funds to become
  569  preapproved to match investment funds;
  570         (c) Market the attractiveness of the state as an early
  571  stage investment location; and
  572         (d) Collaborate with state economic-development
  573  organizations, national associations of seed and angel funds,
  574  and other innovation-based associations to create an enhanced
  575  state entrepreneurial ecosystem; and.
  576         (e)Transfer any portion of the assets of the investment
  577  portfolio, on behalf of the institute, into a private fund or
  578  special purpose vehicle, receive additional private investment
  579  in the private fund or special purpose vehicle, manage the
  580  private fund or special purpose vehicle, and distribute to the
  581  technology fund and the private investors the respective pro
  582  rata portion of any net profits from the sale or liquidation of
  583  the assets of such private fund or special purpose vehicle.
  584         (7) The institute shall annually evaluate the activities
  585  and results of the funding, taking into consideration that seed
  586  investment horizons span from 3 to 7 years.
  587         Section 7. Section 288.9627, Florida Statutes, is amended
  588  to read:
  589         288.9627 Exemptions from public records and public meetings
  590  requirements for the Institute for the Commercialization of
  591  Florida Technology Public Research.—
  592         (1) DEFINITIONS.—As used in this section, the term:
  593         (a) “Institute for the Commercialization of Florida
  594  Technology Public Research” or “institute” means the institute
  595  established by s. 288.9625.
  596         (b)1. “Proprietary confidential business information” means
  597  information that has been designated by the proprietor when
  598  provided to the institute as information that is owned or
  599  controlled by a proprietor; that is intended to be and is
  600  treated by the proprietor as private, the disclosure of which
  601  would harm the business operations of the proprietor and has not
  602  been intentionally disclosed by the proprietor unless pursuant
  603  to a private agreement that provides that the information will
  604  not be released to the public except as required by law or legal
  605  process, or pursuant to law or an order of a court or
  606  administrative body; and that concerns:
  607         a. Trade secrets as defined in s. 688.002.
  608         b. Financial statements and internal or external auditor
  609  reports of a proprietor corporation, partnership, or person
  610  requesting confidentiality under this statute, unless publicly
  611  released by the proprietor.
  612         c. Meeting materials related to financial, operating,
  613  investment, or marketing information of the proprietor
  614  corporation, partnership, or person.
  615         d. Information concerning private investors in the
  616  proprietor corporation, partnership, or person.
  617         2. “Proprietary confidential business information” does not
  618  include:
  619         a. The identity and primary address of the proprietor’s
  620  principals.
  621         b. The dollar amount and date of the financial commitment
  622  or contribution made by the institute.
  623         c. The dollar amount, on a fiscal-year-end basis, of cash
  624  repayments or other fungible distributions received by the
  625  institute from each proprietor.
  626         d. The dollar amount, if any, of the total management fees
  627  and costs paid on an annual fiscal-year-end basis by the
  628  institute.
  629         (c) “Proprietor” means a corporation, partnership, or
  630  person that has applied for or received assistance, financial or
  631  otherwise, from the institute and that controls or owns the
  632  proprietary confidential business information.
  633         (2) PUBLIC RECORDS EXEMPTION.—
  634         (a) The following records held by the institute are
  635  confidential and exempt from s. 119.07(1) and s. 24(a), Art. I
  636  of the State Constitution:
  637         1. Materials that relate to methods of manufacture or
  638  production, potential trade secrets, or patentable material
  639  received, generated, ascertained, or discovered during the
  640  course of research or through research projects conducted by
  641  universities and other publicly supported organizations in this
  642  state and that are provided to the institute by a proprietor.
  643         2. Information that would identify an investor or potential
  644  investor who desires to remain anonymous in projects reviewed by
  645  the institute for assistance.
  646         3. Any information received from a person from another
  647  state or nation or the Federal Government which is otherwise
  648  confidential or exempt pursuant to the laws of that state or
  649  nation or pursuant to federal law.
  650         4. Proprietary confidential business information for 7
  651  years after the termination of the institute’s financial
  652  commitment to the company.
  653         (b) At the time any record made confidential and exempt by
  654  this subsection, or portion thereof, is legally available or
  655  subject to public disclosure for any other reason, that record,
  656  or portion thereof, shall no longer be confidential and exempt
  657  and shall be made available for inspection and copying.
  658         (3) PUBLIC MEETINGS EXEMPTION.—
  659         (a) That portion of a meeting of the institute’s board of
  660  directors at which information is discussed which is
  661  confidential and exempt under subsection (2) is exempt from s.
  662  286.011 and s. 24(b), Art. I of the State Constitution.
  663         (b) Any exempt portion of a meeting shall be recorded and
  664  transcribed. The board of directors shall record the times of
  665  commencement and termination of the meeting, all discussion and
  666  proceedings, the names of all persons present at any time, and
  667  the names of all persons speaking. An exempt portion of any
  668  meeting may not be off the record.
  669         (c) A transcript and minutes of exempt portions of meetings
  670  are confidential and exempt from s. 119.07(1) and s. 24(a), Art.
  671  I of the State Constitution.
  672         (4) REQUEST TO INSPECT OR COPY A RECORD.—
  673         (a) Records made confidential and exempt by this section
  674  may be released, upon written request, to a governmental entity
  675  in the performance of its official duties and responsibilities.
  676         (b) Notwithstanding the provisions of paragraph (2)(a), a
  677  request to inspect or copy a public record that contains
  678  proprietary confidential business information shall be granted
  679  if the proprietor of the information fails, within a reasonable
  680  period of time after the request is received by the institute,
  681  to verify the following to the institute through a written
  682  declaration in the manner provided by s. 92.525:
  683         1. That the requested record contains proprietary
  684  confidential business information and the specific location of
  685  such information within the record;
  686         2. If the proprietary confidential business information is
  687  a trade secret, a verification that it is a trade secret as
  688  defined in s. 688.002;
  689         3. That the proprietary confidential business information
  690  is intended to be and is treated by the proprietor as private,
  691  is the subject of efforts of the proprietor to maintain its
  692  privacy, and is not readily ascertainable or publicly available
  693  from any other source; and
  694         4. That the disclosure of the proprietary confidential
  695  business information to the public would harm the business
  696  operations of the proprietor.
  697         (c)1. Any person may petition a court of competent
  698  jurisdiction for an order for the public release of those
  699  portions of any record made confidential and exempt by
  700  subsection (2).
  701         2. Any action under this subsection must be brought in Palm
  702  Beach County or Alachua County, and the petition or other
  703  initial pleading shall be served on the institute and, if
  704  determinable upon diligent inquiry, on the proprietor of the
  705  information sought to be released.
  706         3. In any order for the public release of a record under
  707  this subsection, the court shall make a finding that:
  708         a. The record or portion thereof is not a trade secret as
  709  defined in s. 688.002;
  710         b. A compelling public interest is served by the release of
  711  the record or portions thereof which exceed the public necessity
  712  for maintaining the confidentiality of such record; and
  713         c. The release of the record will not cause damage to or
  714  adversely affect the interests of the proprietor of the released
  715  information, other private persons or business entities, or the
  716  institute.
  717         (5) PENALTIES.—Any person who willfully and knowingly
  718  violates this section commits a misdemeanor of the first degree,
  719  punishable as provided in s. 775.082 or s. 775.083.
  720         Section 8. This act shall take effect July 1, 2018.