Senate Bill sb1074c1
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Florida Senate - 2007 CS for SB 1074
By the Committee on Higher Education Appropriations; and
Senator Lynn
605-2087-07
1 A bill to be entitled
2 An act relating to the State University
3 Research Commercialization Program; creating s.
4 288.9621, F.S.; creating the program for the
5 purpose of promoting the commercialization of
6 university research products; authorizing the
7 use of program funds to secure patents,
8 establish start-up companies, develop license
9 agreements, and support other activities for
10 the purpose of marketing products resulting
11 from university research; creating s. 288.9622,
12 F.S.; creating the State University Research
13 Commercialization Funding Corporation as a
14 not-for-profit corporation; providing
15 requirements for the corporation with respect
16 to corporate governance and a code of ethics
17 for officers and employees; requiring that the
18 State Board of Administration provide
19 administrative support to the corporation;
20 providing for a board of directors to be
21 appointed by the Governor, the President of the
22 Senate, and the Speaker of the House of
23 Representatives; providing for terms of office;
24 requiring financial disclosure by the board of
25 directors; prohibiting certain conflicts of
26 interest during and after service on the board
27 of directors; authorizing board members to
28 receive reimbursement for per diem and travel
29 expenses; providing for the appointing officer
30 to remove a member of the board of directors
31 for cause; providing requirements for the
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1 organization and meetings of the board of
2 directors; specifying the powers and duties of
3 the corporation; requiring the corporation to
4 invest certain funds; providing requirements
5 for the award of grants; requiring an annual
6 report to the Governor and the Legislature;
7 providing that disbursement of funds by the
8 corporation is not a debt or obligation of the
9 state or a political subdivision thereof;
10 prohibiting the corporation from incurring
11 debt; creating s. 288.9623, F.S.; creating the
12 State University Research Commercialization
13 Assistance Grants; providing for the award of
14 grants under specified categories and in
15 certain amounts; requiring matching funds under
16 certain circumstances; creating s. 288.9624,
17 F.S.; providing a process for the application
18 and approval of grants; requiring that the
19 corporation solicit proposals from state
20 universities; providing requirements for the
21 corporation in making final determinations for
22 awarding grants; providing requirements for
23 evaluating proposals; providing for funding the
24 program through the General Appropriations Act;
25 providing an effective date.
26
27 Be It Enacted by the Legislature of the State of Florida:
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29 Section 1. Section 288.9621, Florida Statutes, is
30 created to read:
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1 288.9621 State University Research Commercialization
2 Program.--
3 (1) The State University Research Commercialization
4 Program is established to promote the commercialization of
5 university research products for the purpose of enhancing the
6 state's economy and the state's public universities.
7 (2) A state university may apply for funding through
8 the not-for-profit corporation established in s. 288.9622 for
9 the purpose of developing products and services resulting from
10 university research. An application may include joint
11 participation in the development of products and services by a
12 cooperating university. Such funding may be used by the
13 university to secure patents, establish start-up companies,
14 develop license agreements, attract private investment, and
15 support other activities that are necessary to establish
16 commercially viable ventures for the marketing and sale of
17 products resulting from university research.
18 Section 2. Section 288.9622, Florida Statutes, is
19 created to read:
20 288.9622 State University Research Commercialization
21 Funding Corporation.--
22 (1) CREATION.--There is created a not-for-profit
23 corporation known as the State University Research
24 Commercialization Funding Corporation, which shall be
25 registered, incorporated, organized, and operated under
26 chapter 617.
27 (a) The corporation is not a unit or entity of state
28 government. However, the corporation is subject to the
29 provisions of s. 24, Art. I of the State Constitution and
30 chapter 119, relating to public meetings and records, and the
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1 provisions of chapter 286 relating to public meetings and
2 records.
3 (b) The corporation must establish at least one
4 corporate office in this state and appoint a registered agent.
5 (c) The corporation shall hire or contract for all
6 staff necessary for the proper execution of its powers and
7 duties within the funds appropriated to implement ss.
8 288.9621-288.9624 and shall require that all officers,
9 directors, and employees of the corporation comply with the
10 code of ethics for public officers and employees under part
11 III of chapter 112. In no case may the corporation expend more
12 than $300,000 per year for staffing and necessary
13 administrative expenditures, including, but not limited to,
14 travel and per diem and audit expenditures, using funds
15 appropriated to administer this section.
16 (d) The State Board of Administration shall provide
17 administrative support to the corporation as requested by the
18 corporation. Such administrative support shall consist of
19 moneys and investment guidance as needed by the corporation.
20 In the event of the dissolution of the corporation, the State
21 Board of Administration shall be the corporation's successor
22 in interest and shall assume all rights, duties, and
23 obligations of the corporation under any contract to which the
24 corporation is then a party and under law.
25 (2) PURPOSE.--The corporation shall be organized to
26 receive, hold, invest, administer, and disburse funds
27 appropriated by the Legislature for the State University
28 Research Commercialization Program.
29 (3) BOARD; MEMBERSHIP.--The corporation shall be
30 governed by a board of directors.
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1 (a) The board of directors shall consist of nine
2 voting members, of whom the Governor shall appoint three, the
3 President of the Senate shall appoint three, and the Speaker
4 of the House of Representatives shall appoint three.
5 (b) To be eligible for appointment to the board of
6 directors, an individual must have prior experience in early
7 stage business investment, corporate management, the fiduciary
8 management of investment funds, or the commercialization of
9 research products.
10 (c) Each member of the board of directors shall be
11 appointed to a 4-year term, except that initially the
12 Governor, the President of the Senate, and the Speaker of the
13 House of Representatives shall each appoint one member for a
14 term of 1 year, one member for a term of 2 years, and one
15 member for a term of 4 years in order to achieve staggered
16 terms among the members of the board. The Governor, the
17 President of the Senate, and the Speaker of the House of
18 Representatives shall make their initial appointments to the
19 board by July 31, 2007.
20 (d) The Governor, the President of the Senate, or the
21 Speaker of the House of Representatives, respectively, shall
22 fill a vacancy on the board of directors, according to who
23 appointed the member whose vacancy is to be filled or whose
24 term has expired. A vacancy that occurs before the scheduled
25 expiration of the term of the member shall be filled for the
26 remainder of the unexpired term.
27 (e) Each member of the board of directors who is not
28 otherwise required to file financial disclosure under s. 8,
29 Art. II of the State Constitution or s. 112.3144 shall file
30 disclosure of financial interests under s. 112.3145.
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1 (f) A person appointed to the board of directors must
2 agree to refrain from having any direct interest in any
3 contract, franchise, privilege, or other benefit arising from
4 a university project receiving funding from the board during
5 the term of his or her appointment and for 3 years after the
6 termination of such appointment. It is a misdemeanor of the
7 first degree, punishable as provided in s. 775.082 or s.
8 775.083, for a person to accept appointment to the board of
9 directors in violation of this paragraph or to accept a direct
10 interest in any contract, franchise, privilege, or other
11 benefit granted by the institution or affiliate within 3 years
12 after the termination of his or her service on the board.
13 (g) Each member of the board of directors shall serve
14 without compensation, but is entitled to receive travel and
15 per diem expenses as provided in s. 112.061 while in the
16 performance of his or her duties.
17 (h) Each member of the board of directors is
18 accountable for the proper performance of the 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. The Governor, the President of the Senate, or the
23 Speaker of the House of Representatives, according to which
24 officer appointed the member, may remove a member for
25 malfeasance, misfeasance, neglect of duty, incompetence,
26 permanent inability to perform official duties, unexcused
27 absence from three consecutive meetings of the board, arrest
28 or indictment for a crime that is a felony or a misdemeanor
29 involving theft or a crime of dishonesty, or pleading nolo
30 contendere to, or being found guilty of, any crime.
31 (4) ORGANIZATION; MEETINGS.--
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1 (a)1. The board of directors shall annually elect a
2 chairperson and a vice chairperson from among the board's
3 members. The members may, by a vote of five of the nine board
4 members, remove a member from the position of chairperson or
5 vice chairperson prior to the expiration of his or her term as
6 chairperson or vice chairperson. His or her successor shall be
7 elected to serve for the balance of the removed chairperson's
8 or vice chairperson's term.
9 2. The chairperson shall ensure that records are kept
10 of the proceedings of the board of directors and is the
11 custodian of all books, documents, and papers filed with the
12 board; the minutes of meetings of the board; and the official
13 seal of the corporation.
14 (b)1. The board of directors shall meet upon the call
15 of the chairperson or at the request of a majority of the
16 members, but no less than two times per calendar year if a
17 university request for funding pursuant to this section is
18 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 is organized
28 to receive, hold, invest, administer, and disburse funds
29 appropriated by the Legislature in support of ss.
30 288.9621-288.9624 and to disburse any income generated from
31 the investment of these funds consistent with the purpose and
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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 contracts for the
8 purchase of real property and hold notes, mortgages,
9 guarantees, or security agreements to secure the performance
10 of obligations of the grantee under a contract.
11 (c) May perform all acts and things necessary or
12 convenient to carry out the powers expressly granted in ss.
13 288.9621-288.9624 and in a contract entered into between the
14 corporation and a grantee.
15 (d) May make expenditures from funds provided by the
16 Legislature, including any necessary administrative
17 expenditures consistent with its powers.
18 (e) May indemnify, and purchase and maintain insurance
19 on behalf of, directors, officers, and employees of the
20 corporation against any personal liability or accountability.
21 (f) Shall disburse funds pursuant to the provisions of
22 this section and a contract entered into between the
23 corporation and a grantee.
24 (g) Shall receive and review reports and financial
25 documentation provided by a grantee to ensure compliance with
26 the provisions of this section and provisions of a 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.
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1 (6) INVESTMENT OF FUNDS.--The corporation must 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 grantee shall be invested by the State Board of
5 Administration on behalf of the corporation. Funds shall be
6 invested in suitable instruments authorized under s. 215.47
7 and specified in investment guidelines established and agreed
8 to by the State Board of Administration and the corporation.
9 (7) CONTRACTS FOR THE AWARD OF GRANTS.--
10 (a) The corporation shall negotiate and execute
11 contracts with state universities governing the terms of
12 grants provided pursuant to ss. 288.9621-288.9624. The
13 corporation may not execute the contract unless the contract
14 is approved by the affirmative vote of at least six of the
15 nine members of the board of directors.
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 state university must
21 satisfy before the release of each disbursement.
22 2. Requiring the state university to submit to the
23 corporation a business plan in a form and manner prescribed by
24 the corporation.
25 3. Requiring the state university to submit data to
26 the corporation concerning the activities and performance of
27 projects funded pursuant to this section and to provide to the
28 corporation an annual accounting of the expenditure of funds
29 disbursed under this section.
30 4. Requiring grant recipients to negotiate repayment
31 to the State University Research Commercialization Trust Fund
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1 of the amount of the grant awarded to a project when the
2 project generates sufficient revenues to sustain a profitable
3 operation.
4 (8) ANNUAL REPORT.--By December 1 of each year, the
5 corporation shall prepare a report of the activities and
6 outcomes under ss. 288.9621-288.9624 for the preceding fiscal
7 year. The report, at a minimum, must include:
8 (a) An accounting of the amount of grants awarded and
9 disbursed during the preceding fiscal year by project and
10 university.
11 (b) Information concerning the amount and nature of
12 economic activity generated through projects receiving funding
13 pursuant to ss. 288.9621-288.9624.
14 (c) Project level summaries of the information
15 reported by grant recipients in paragraph (7)(b).
16 (d) An accounting of funds disbursed during the
17 preceding fiscal year for staffing, administration, and
18 operational costs of the corporation.
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20 The corporation shall submit the report to the Governor, the
21 President of the Senate, and the Speaker of the House of
22 Representatives.
23 (9) LIABILITY.--
24 (a) The appropriation or disbursement of funds under
25 this section does not constitute a debt, liability, or
26 obligation of the State of Florida, any political subdivision
27 thereof, or the corporation or a pledge of the faith and
28 credit of the state or of any such political subdivision.
29 (b) The appropriation or disbursement of funds under
30 this section does not subject the State of Florida, any
31 political subdivision thereof, or the corporation to liability
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1 related to the research activities and research products that
2 receive funding pursuant to this section.
3 (10) DEBT.--The corporation is prohibited from
4 incurring long-term debt.
5 Section 3. Section 288.9623, Florida Statutes, is
6 created to read:
7 288.9623 State University Research Commercialization
8 Assistance Grants.--State University Research
9 Commercialization Assistance Grants are established to provide
10 early stage capital funding to support the commercialization
11 of university research products. Grants may be provided under
12 the following categories:
13 (1) Phase One grants, which may not exceed $50,000 per
14 project, shall be used to assist with early market research,
15 independent evaluation, consultation, and other initial
16 activities that may be required to develop an initial business
17 model for a university research product that has the potential
18 for commercialization.
19 (2) Phase Two grants, which may not exceed $100,000
20 per project, shall be available to match private investment in
21 a university research commercialization proposal that has been
22 successfully evaluated and developed into the level of
23 readiness contemplated for projects that have received Phase
24 One grants. Phase Two grants shall be used to assist with the
25 development of a complete business plan for the
26 commercialization of a university research product. One dollar
27 in private support is required to match each $1 in state
28 funding provided for a Phase Two grant.
29 (3) Phase Three grants, which may not exceed $250,000
30 per project, shall be available to match private investment
31 relating to the implementation and execution of a completed
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1 business plan for a university research product. One dollar in
2 private support is required to match each $1 in state funding
3 provided for a Phase Three grant.
4 Section 4. Section 288.9624, Florida Statutes, is
5 created to read:
6 288.9624 Process for the application and approval of
7 State University Research Commercialization Assistance
8 Grants.--
9 (1) Based on the availability of funds, the
10 corporation shall periodically solicit proposals from state
11 universities for grants through the State University Research
12 Commercialization Program.
13 (a) The corporation shall solicit proposals from state
14 universities and meet for the purpose of awarding grants once
15 every 6 months when the uncommitted balance exceeds $750,000.
16 The minimum time between the notification for the solicitation
17 of proposals and the deadline for the submission of proposals
18 by state universities shall be 60 days. The maximum time
19 between the deadline for receiving proposals during a
20 solicitation period and final determination by the corporation
21 to approve or deny a request that is timely submitted in
22 proper form shall be 60 days. However, by a majority vote of
23 the board of directors, the deadline for approval or denial of
24 a specific application may be extended up to an additional 60
25 days for complex proposals that require additional time to
26 properly evaluate.
27 (b) The corporation shall establish guidelines
28 prescribing the criteria and format for the submission of
29 proposed projects by state universities.
30 (2) Any state university, upon approval of its board
31 of trustees, may submit a request to the State University
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1 Research Commercialization Corporation for a grant to
2 facilitate the commercialization of a university research
3 product or the commercialization of a patent held by a state
4 agency under a cooperative agreement between the state agency
5 and the university.
6 (3) When evaluating the projects submitted for funding
7 support through the State University Research
8 Commercialization Program, the corporation shall consider the
9 following criteria:
10 (a) The potential return to the university which may
11 be reasonably assumed based on the business case presented in
12 support of the proposed project;
13 (b) The potential for the creation of high-wage jobs
14 resulting from the success of the proposed project;
15 (c) The potential of the proposed project to address
16 pressing needs of the residents of the state;
17 (d) The potential of the proposed project to enhance
18 the economic competitiveness of the state and the university;
19 and
20 (e) The technical, financial, organizational, and
21 marketing feasibility of the project and its business plan.
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23 Each proposed project shall be evaluated on its individual
24 merits.
25 Section 5. Funding for the State University Research
26 Commercialization Program shall be as specified in the General
27 Appropriations Act. The funds shall be appropriated to the
28 Department of Education for the State University Research
29 Commercialization Funding Corporation to be used pursuant to
30 the provisions of ss. 288.9621-288.9624, Florida Statutes. The
31 Department of Education shall provide the funds to the
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1 corporation upon receiving a copy of the signed agreement
2 entered into by the corporation and the State Board of
3 Administration pursuant to s. 288.9622(6), Florida Statutes.
4 Section 6. This act shall take effect July 1, 2007.
5
6 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
7 SB 1074
8
9 The committee substitute creates the State University Research
Commercialization Program to promote the commercialization of
10 university research products in order to enhance the state's
economy and public universities. The program will be
11 administered by a not-for-profit corporation known as the
State University Research Commercialization Funding
12 Corporation. The corporation shall be governed by a board of
directors which will consist of nine voting members.
13
If funding for the program is appropriated in the General
14 Appropriations Act, a state university may apply for a State
University Research Commercialization Assistance Grant through
15 the corporation to assist in developing products and services
resulting from university research. These early stage capital
16 grants may be used by the university to secure patents,
establish start-up companies, develop license agreements,
17 attract private investment, and support other activities
necessary to establish commercially viable ventures for the
18 marketing and sale of products resulting from university
research.
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