1 HB540
2 213237-4
3 By Representative Poole
4 RFD: Boards, Agencies and Commissions
5 First Read: 11-MAR-21
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1
2 ENROLLED, An Act,
3 To add Article 20, commencing with Section
4 41-10-800, to Chapter 10, Title 41 of the Code of Alabama
5 1975; to create the Alabama Innovation Corporation; to provide
6 legislative findings; to provide for its incorporation; to
7 provide for the creation of a board; to provide for the powers
8 and duties of the corporation; to allow the corporation to
9 enter into contracts; to create an accompanying fund and
10 provide for the management of the fund; to provide for
11 amendments to the governing documents of the corporation; and
12 to provide for the dissolution of the corporation.
13 BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
14 Section 1. Article 20, commencing with Section
15 41-10-800, is added to Chapter 10, Title 41 of the Code of
16 Alabama 1975, to read as follows:
17 41-10-800. Legislative findings.
18 The Legislature finds and declares all of the
19 following:
20 (1) On July 16, 2020, the Governor issued Executive
21 Order No. 720, establishing the Alabama Innovation Commission
22 to "identify policies that will promote entrepreneurship,
23 innovation, and related opportunities in the State of
24 Alabama."
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1 (2) The commission has issued an interim report
2 outlining initial policy recommendations, including all of the
3 following:
4 a. To develop a statewide innovation coordination
5 and incentive structure to generate additional, successful
6 business growth.
7 b. To develop an Alabama branding campaign to evolve
8 the state into an emerging destination place.
9 c. To develop a program offering matching funds to
10 recipients of federal Small Business Innovation Research and
11 Small Business Technology Transfer Research grants.
12 (3) This article creates the structure recommended
13 in paragraph (2)a., to implement the recommendations listed in
14 paragraphs (2)b. and (2)c.
15 (4) Recognizing that this state's economy is rapidly
16 changing, this article should be interpreted and applied to
17 allow the corporation to respond rapidly, as its board deems
18 appropriate, to challenges and opportunities in the fields of
19 technology, research and development, innovation, and
20 entrepreneurship.
21 (5) The corporation is charged with preparing this
22 state for the economy of the future. The corporation shall
23 make this state a hub for technology, research and
24 development, innovation, and entrepreneurship by partnering
25 with the private sector, state agencies, and state policy
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1 makers to develop and implement programs and policies to lead
2 to a more robust, diverse, and resilient economy for this
3 state.
4 41-10-801. Definitions.
5 For the purposes of this article, the following
6 terms shall have the following meanings:
7 (1) ASPIRING ALABAMIAN. A person who has less than
8 one hundred thousand dollars ($100,000) of household net worth
9 and who satisfies at least one of the following criteria:
10 a. The person has a principal residence in a
11 community eligible for investment through the federal New
12 Markets Tax Credit program under 26 U.S.C. 45D(e)(1).
13 b. The person owns at least a majority interest in a
14 business located in a community eligible for investment
15 through the federal New Markets Tax Credit program under 26
16 U.S.C. 45D(e)(1).
17 c. The person does not hold, and is not actively
18 pursuing, a baccalaureate degree or does not have a parent or
19 legal guardian who holds a baccalaureate degree.
20 d. The person has at least one parent who does not
21 have a high school diploma or its equivalent.
22 (2) BOARD. The governing board of the corporation.
23 (3) CORPORATION. The Alabama Innovation Corporation
24 created by this article as an authority organized as a public
25 corporation having a legal existence separate and apart from
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1 the state and any county, municipality, or political
2 subdivision.
3 (4) ECONOMIC DEVELOPMENT AND INNOVATION ENTITY.
4 a. A nonprofit corporation that possesses all of the
5 following characteristics:
6 1. Is organized as a nonprofit corporation exempt
7 from federal income tax under Section 501(c) of the Internal
8 Revenue Code of 1986, as amended.
9 2. Has a record of, or can demonstrate that it is
10 capable of, serving the entire state on matters involving
11 economic development.
12 3. Has a record of, or can demonstrate that it is
13 capable of, managing startup competitions or related
14 programming designed to foster an innovation-based economy.
15 4. Has received, or is eligible to receive, grant
16 funding from the state or from federal or private sources.
17 b. In determining whether a nonprofit corporation
18 qualifies as an economic development and innovation entity,
19 the board may attribute to the nonprofit corporation the
20 experiences of its officers, staff, and directors with other
21 nonprofit corporations.
22 (5) ELIGIBLE INVESTMENTS. All of the following:
23 a. Demand deposits (interest bearing) in federally
24 insured banks, and interest bearing deposits, whether or not
25 evidenced by certificates of deposits, in federally insured
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1 banks; provided, however, that the deposits plus interest
2 shall be fully secured by obligations described in paragraphs
3 b. and c., to the extent that the deposits plus interest
4 exceed insurance available from the Federal Deposit Insurance
5 Corporation, or from any agency of the United States of
6 America that may succeed to the functions of the Federal
7 Deposit Insurance Corporation.
8 b. Bonds, notes, and other evidences of indebtedness
9 that are direct obligations of the United States of America or
10 that are unconditionally guaranteed as to both principal and
11 interest by the United States of America.
12 c. Bonds, debentures, notes, or other evidences of
13 indebtedness issued or guaranteed by any federal agencies or
14 government sponsored enterprises authorized to issue their own
15 debt instruments including, without limitation, to any of the
16 following: Federal Farm Credit Bank, Federal Intermediate
17 Credit Banks, the Export-Import Bank of the United States,
18 Federal Land Banks, the Federal National Mortgage Association,
19 the Governmental National Mortgage Association, the Federal
20 Financing Bank, Federal Banks for Cooperatives, Federal Home
21 Loan Banks, Federal Home and Loan Mortgage Association, or the
22 Farmers Home Administration.
23 d. Repurchase agreements with federally insured
24 banks or with government bond dealers reporting to and trading
25 with the Federal Reserve Bank of New York, provided that the
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1 repurchase agreements are secured by obligations described in
2 paragraphs b. and c.
3 e. Interest-bearing time deposits, whether or not
4 evidenced by certificates of deposit, in savings and loan
5 associations: (i) the deposits of which are insured to the
6 maximum extent possible by the Federal Savings and Loan
7 Insurance Corporation or any agency of the United States of
8 America that may succeed to its functions; and (ii) the
9 principal office of which is located in the state. The
10 deposits plus interest shall be secured by obligations
11 described in paragraphs b. and c., to the extent that the
12 deposits plus interest exceed insurance available from the
13 Federal Savings and Loan Insurance Corporation or from any
14 agency of the United States of America that may succeed to the
15 functions of the Federal Savings and Loan Insurance
16 Corporation.
17 f. Other legal investments which the corporation
18 determines will have the effect of growing an innovative
19 economy.
20 (6) FUND. The Alabama Innovation Fund.
21 (7) SMALL BUSINESS INNOVATION RESEARCH. The grants
22 and programs defined in 15 U.S.C. 638(e)(4).
23 (8) SMALL BUSINESS TECHNOLOGY TRANSFER RESEARCH. The
24 grants and programs defined in 15 U.S.C. 638(e)(6).
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1 (9) STEM. Science, technology, engineering, and
2 mathematics.
3 41-10-802. Incorporation.
4 (a) The Governor, the Speaker of the House of
5 Representatives, and the President Pro Tempore of the Senate
6 shall present to the Secretary of State an application, signed
7 by each of them, for the formation of the Alabama Innovation
8 Corporation, as a public corporation, having a legal existence
9 separate and apart from the state and any county,
10 municipality, or political subdivision, which shall set forth
11 all of the following:
12 (1) The name, official designation, and official
13 office location of each of the applicants, together with a
14 certified copy of the commission evidencing each applicant's
15 right to office.
16 (2) The date on which each applicant was sworn into
17 office and the term of office of each applicant.
18 (3) The name of the proposed public corporation,
19 which shall be the Alabama Innovation Corporation.
20 (4) The location of the principal office of the
21 proposed corporation.
22 (5) Any other matter relating to the corporation
23 that the applicants may choose to insert and that is not
24 inconsistent with this article or state law.
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1 (b) The application shall be subscribed and sworn to
2 by each applicant before an officer authorized by the laws of
3 the state to take acknowledgments to deeds. The Secretary of
4 State shall examine the application, and, if he or she finds
5 that the application substantially complies with the
6 requirements of this section, the application shall be filed
7 and recorded in an appropriate book of records in the office
8 of the Secretary of State.
9 (c) When the application has been made, filed, and
10 recorded as provided in subsection (b), the applicants shall
11 constitute a public corporation under the name stated in the
12 application, and the Secretary of State shall make and issue
13 to the applicants a certificate of incorporation pursuant to
14 this article, under the Great Seal of the State, and shall
15 record the certificate with the application. There shall be no
16 fees paid to the Secretary of State in connection with the
17 corporation.
18 (d) Notwithstanding any provision of law to the
19 contrary, any corporation incorporated pursuant to this
20 section shall not be deemed to be a part of the state for any
21 purpose but shall be treated as a public corporation and body
22 politic separate and apart from the state.
23 14-10-803. Board of directors.
24 (a) The corporation shall be under the management
25 and control of a board of directors, and all powers necessary
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1 or appropriate for the management and control of the
2 corporation shall be vested solely in the board. The board
3 shall be comprised of both ex officio directors and at-large
4 directors, all of whom shall be voting members of the board
5 and shall be considered in determining whether a quorum is
6 present.
7 (b) The board shall have five ex officio directors,
8 consisting of the Governor, the Speaker of the House of
9 Representatives, the President Pro Tempore of the Senate, and
10 the House and Senate minority caucus leaders, or their
11 designees. The service of each ex officio director shall begin
12 and end concurrently with the beginning and end of his or her
13 tenure in office or service as a minority caucus leader,
14 respectively. Each ex officio director may appoint a person to
15 serve in his or her place at any meeting of the board, or may
16 designate a person to serve in his or her place at all
17 meetings of the board until the term of the ex officio
18 director should end, and the appointee or designee shall be
19 counted for purposes of a quorum and voting.
20 (c) The Governor shall select six at-large
21 directors, who shall be persons with experience relevant to
22 the purposes and activities of the corporation including, but
23 not limited to, experience with any of the following:
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1 (1) Participating on boards of, or being employed
2 by, nonprofit corporations which promote business or economic
3 development throughout the state.
4 (2) Having other experience relevant to
5 entrepreneurship and innovation including, but not limited to,
6 any of the following:
7 a. Making more than one investment in seed or
8 pre-seed stage startup companies or managing, or making
9 investments in, one or more seed stage funds or venture
10 capital funds.
11 b. Founding, or working as an executive in, a
12 science or technology based business.
13 c. Founding, or working as an executive in, a
14 business which acquired or commercialized intellectual
15 property from a university or other research institution.
16 d. Founding, or working as an executive in, a
17 business which regularly interacts with persons or businesses
18 described in paragraphs a., b., or c.
19 (3) In making appointments of at-large directors,
20 the Governor shall coordinate his or her appointments so that
21 diversity of gender, race, and geographical areas of the board
22 of directors is reflective of the makeup of the state. The
23 service of each at-large director shall begin upon written
24 acceptance of his or her appointment. The at-large directors
25 selected by the Governor shall serve on the board for a term
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1 ending on the date of the second year following his or her
2 appointment as an at-large director. Each at-large director,
3 regardless of whether a prior Governor selected him or her,
4 shall continue to serve until the director is reappointed, or
5 a successor is appointed, to the office. An at-large director
6 appointed by the Governor may only serve a maximum of two
7 consecutive terms of office, but may be reappointed after he
8 or she has spent at least two years without serving as an
9 at-large director. At-large directors may resign or may be
10 removed by the Governor at any time and for any reason, at
11 which time the Governor shall appoint a different person to
12 serve, so long as that person satisfies the requirements set
13 forth in this section. A person appointed to fill a vacancy
14 shall serve out the remainder of the unexpired term and may be
15 appointed to serve two additional consecutive terms.
16 (d) No director shall receive compensation because
17 of his or her service as a director. Each director shall be
18 reimbursed for actual travel expenses incurred in the
19 performance of his or her duties as a director.
20 (e) Notwithstanding subsections (a) through (d),
21 inclusive, upon the incorporation of the corporation, the
22 Governor shall select as one of the initial at-large directors
23 the individual serving in the leadership of the Alabama
24 Innovation Commission as of January 1, 2021. As long as that
25 individual is serving on the board, he or she shall be the
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1 chair and presiding officer of the board. The individual shall
2 serve on the board for a term ending on the date of the second
3 year following his or her appointment as an at-large director
4 and may be reappointed for additional consecutive two-year
5 terms as an at-large director. At the time that the individual
6 shall resign, be removed, or otherwise no longer serve as
7 chair, the position shall be subject to the appointment
8 provisions for at-large directors provided by this section
9 and, thereafter, the Governor shall appoint any member of the
10 board to be the chair of the board.
11 (f) Notwithstanding any provision of Chapter 25A of
12 Title 36, a majority of the directors shall constitute a
13 quorum for the transaction of business by the board, and
14 decisions shall be made on the basis of a majority of the
15 quorum then present and voting. No vacancy in the membership
16 of the board or the voluntary disqualification or abstention
17 of any director shall impair the right of a quorum to exercise
18 all of the powers and duties of the board. Members of the
19