(1) The institute is a nonprofit corporation registered, incorporated, and operated in accordance with chapter 617. The institute is not subject to control, supervision, or direction by the department in any manner, including, but not limited to, personnel, purchasing, transactions involving real or personal property, and budgetary matters.
(2) The purpose of the institute is to assist, without any financial support or specific appropriations from the state, in the commercialization of products developed by the research and development activities of an innovation business, including, but not limited to, those defined in former s. 288.1089. The institute shall fulfill its purpose in the best interests of the state. The institute:(a) Is a corporation primarily acting as an instrumentality of the state pursuant to s. 768.28(2), for the purposes of sovereign immunity; (b) Is not an agency within the meaning of s. 20.03(1); (c) Is subject to the open records and meetings requirements of s. 24, Art. I of the State Constitution, chapter 119, and s. 286.011; (d) Is not subject to chapter 287;
(e) Is governed by the code of ethics for public officers and employees as set forth in part III of chapter 112;
(f) May create corporate subsidiaries; and
(g) May not receive any financial support or specific appropriations from the state.
(3) The articles of incorporation of the institute must:(a) Provide that the institute shall provide equal employment opportunities for all persons regardless of race, color, religion, gender, national origin, age, handicap, or marital status;
(b) Provide that the institute is subject to the public records and meeting requirements of s. 24, Art. I of the State Constitution;
(c) Provide that all officers, directors, and employees of the institute are governed by the code of ethics for public officers and employees as set forth in part III of chapter 112;
(d) Provide that members of the board of directors of the institute are responsible for the prudent use of all public and private funds and that they will ensure that the use of funds is in accordance with all applicable laws, bylaws, and contractual requirements, including those in subsection (15); and
(e) Provide that the fiscal year of the institute is from July 1 to June 30.
(4) The investment-related affairs of the institute shall be managed by the private fund manager, and overseen by a board of directors who shall serve without compensation. Each director shall have only one vote. The chair of the board of directors shall be selected by a majority vote of the directors, a quorum being present.(a) The board of directors shall consist of three directors appointed pursuant to the procedures and requirements of this section to 3-year staggered terms, to which the directors may be reappointed.
(b) For any director appointed before July 1, 2018, the term of service for that director may continue through the end of his or her current term. The vacancy created by the expiration of such term must be filled pursuant to the procedures and requirements of this section.
(c) The bylaws of the institute shall be amended accordingly by the board of directors to reflect the requirements of this section.
(d) Upon vacancy, or within 90 days before an anticipated vacancy by the expiration of a term of a director, the private fund manager shall submit a list of three eligible nominees, which may include the incumbent director, to replace the outgoing director. The board of directors, voting along with the private fund manager, may appoint a director from the nominee list or may request and appoint a director from a new list of three nominees that were not included on the previous list.
(e) The persons appointed as replacement directors must include persons who have expertise in the area of the selection and supervision of early stage investment managers or in the fiduciary management of investment funds and other areas of expertise as considered appropriate.
(f) Directors are subject to any restrictions on conflicts of interest specified in the organizational documents and may not have a financial interest in any venture capital investment in any portfolio company.
(g) Directors may be reimbursed for all reasonable, necessary, and actual expenses as determined and approved by the private fund manager pursuant to s. 112.061. (h) The institute shall have all powers granted under its organizational documents and shall indemnify its directors and the private fund manager to the broadest extent permissible under the laws of this state.
(5) The board of directors shall oversee the private fund manager to ensure consistency with the Florida Capital Formation Act, perform those duties as may be delegated to it in the bylaws of the institute, and provide a copy of the institute’s annual report to the Governor, the President of the Senate, and the Speaker of the House of Representatives.
(6) The Auditor General and the Office of Program Policy Analysis and Government Accountability may require and receive from the institute or its independent auditor any detail or supplemental data relative to the operation of the institute.
(7) To the extent funds for investment are available in the technology fund, the private fund manager, on behalf of the institute, may make an investment in a company or organization if the following requirements are met:(a) Before providing assistance, the institute accepted the company or organization attempting to commercialize its product based on the guidelines under s. 288.96255(4). (b) The company or organization is based in this state.
(8) Except as provided under s. 288.96255, the institute may not develop or accrue any ownership, royalty, patent, or other such rights over or interest in companies or products in the institute except in connection with financing provided directly to client companies and shall maintain the confidentiality of proprietary information. (9) By December 1 of each year, the institute shall issue an annual report concerning its activities to the Governor, the President of the Senate, and the Speaker of the House of Representatives. The annual report shall be considered a public record, as provided in paragraph (3)(b), subject to any appropriate exemptions under s. 288.9627. The annual report must include the following:(a) Information on any assistance provided by the institute to an innovation business, as defined in former s. 288.1089. (b) A description of the benefits to this state resulting from the institute, including the number of businesses created, the associated industries started, the number of jobs created, and the growth of related projects.
(c) Independently audited financial statements, including statements that show receipts and expenditures during the preceding fiscal year for personnel, management fees, administration, and operational costs of the institute.
(10) The private fund manager:(a) Must be a for-profit limited liability company or a for-profit corporation formed, governed, and operated in accordance with chapter 605 or chapter 607, respectively.
(b) Shall conduct activities on behalf of the institute which are consistent with the purposes set forth in this section.
(c) Must have expertise and experience in the management and operation of early stage companies in this state.
(d) Must have experience with investment in early stage ventures in this state and have a working knowledge and understanding of the investment portfolio and the relevant industries of the portfolio companies in this state.
(e) Shall employ personnel and professionals who have knowledge of the investment portfolio and portfolio companies of the institute, as well as financial, technical, and business expertise to manage the technology fund activity.
(f) May not be a public corporation or instrumentality of the state.
(g) Is not a corporation primarily acting as an instrumentality of the state pursuant to s. 768.28(2), for the purposes of sovereign immunity. (h) Is not an agency within the meaning of s. 20.03(1). (i) Is not subject to chapter 287.
(j) May not be governed by the code of ethics for public officers and employees as set forth in part III of chapter 112.
(k) May not receive any specific appropriation from the state in any amount.
(11) The purpose of the institute’s use of a private fund manager is to alleviate the state’s burden of the continued and future operational and management costs related to the technology fund and accelerator program without the financial support of or any specific appropriation from the state, while allowing the institute, through the activities of the private fund manager, to continue to foster greater private-sector investment funding, to encourage seed-stage investments in startup and early stage companies, and to advise companies about how to restructure existing management, operations, product development, or service development to attract advantageous business opportunities.
(12) The private fund manager shall assume the management of the assets of the accelerator program and the technology fund investment portfolios associated with the institute.(a) The private fund manager has the authority on behalf of the institute to:1. Negotiate investment, sale, and liquidation terms with portfolio and nonportfolio companies;
2. Develop and execute contracts, or amendments thereto, with portfolio and nonportfolio companies;
3. Seek new qualified companies for the investment of funds from the technology fund;
4. Receive, on behalf of the institute, investment capital from the sale or liquidation of any portion of the investment portfolio, loan proceeds, or other investment returns, and remit such capital, proceeds, and returns to the technology fund pursuant to s. 288.96255, except as otherwise provided in this section and s. 288.96255; and 5. Perform additional duties set forth in s. 288.96255. (b) The private fund manager shall be paid reasonable fees consistent with industry fund management practices and consisting of:1. An operational management fee, including the reimbursement of expenses, paid from the proceeds of the repayment of loans from the accelerator program or other capital, proceeds, and returns available in the technology fund;
2. A portfolio fee paid from the proceeds of each sale or liquidation of assets or portions of the assets of the investment portfolio; and
3. A closing fee paid from the investment amount paid by the technology fund to a company at the closing of each investment.
(13) The private fund manager may undertake the following activities on behalf of the institute:(a) Mentor, assist with the development of marketing information, and assist with attracting capital investment, as well as bring other resources to the company which may foster its effective management, growth, capitalization, technology protection, or marketing or business success;
(b) Communicate with private investors and venture capital organizations regarding investment opportunities in the portfolio companies of the technology fund and accelerator program;
(c) Facilitate meetings between prospective investors and the companies; and
(d) Develop cooperative relationships with publicly supported organizations that work together to provide resources or special knowledge likely to be helpful to portfolio companies.
(14) By November 1 of each year, the private fund manager shall issue an annual report to the board of directors of the institute concerning the activities the private fund manager conducted which relate to existing accelerator program and technology fund investments in order for the board to be in compliance with its report obligations under subsection (9). The annual report provided by the private fund manager shall be considered a public record, as provided in paragraph (3)(b), subject to any appropriate exemptions under s. 288.9627. The annual report, at a minimum, must include:(a) A description of the benefits to this state resulting from the assets of the accelerator program and technology fund, including the number of jobs created, the amount of capital the companies raised, and other benefits relating to increased research expenditures and company growth.
(b) Independently audited financial statements related to the receipt and calculation of the net profits of the investment portfolio.
(15) If the institute receives any specific appropriation from the state after July 1, 2018, the institute shall immediately transfer such funds to the General Revenue Fund. The institute, and all assets held by the institute, including all assets and ownership interests held by the technology fund pursuant to s. 288.96255, shall be liquidated immediately after the receipt of such appropriation, and all proceeds of the sales of such assets and ownership interests shall revert to the General Revenue Fund. 
