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Public Act 100-1081


 

Public Act 1081 100TH GENERAL ASSEMBLY

  
  
  

 


 
Public Act 100-1081
 
SB3205 EnrolledLRB100 18941 RJF 34191 b

    AN ACT concerning finance.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Technology Development Act is amended by
changing Sections 5 and 11 as follows:
 
    (30 ILCS 265/5)
    Sec. 5. Policy. The Illinois General Assembly finds that it
is important for the State to encourage technology development
in the State. The purpose of this Act is to attract, assist,
and retain quality technology businesses and promote the growth
of jobs and entrepreneurial and venture capital environments in
Illinois. The creation of the Technology Development Account
will allow the State to bring together, and add to, Illinois'
rich science, technology, agricultural, financial, and
business communities.
(Source: P.A. 92-851, eff. 8-26-02.)
 
    (30 ILCS 265/11)
    Sec. 11. Technology Development Account II.
    (a) Including In addition to the amount provided in Section
10 of this Act, the State Treasurer shall may segregate a
portion of the Treasurer's State investment portfolio, that at
no time shall be greater than 5% 2% of the portfolio, in the
Technology Development Account IIa ("TDA IIa"), an account that
shall be maintained separately and apart from other moneys
invested by the Treasurer. Distributions from the investments
in TDA IIa may be reinvested into TDA IIa without being counted
against the 5% 2% cap. The aggregate investment in TDA IIa and
the aggregate commitment of investment capital in a TDA
II-Recipient Fund shall at no time be greater than 5% of the
State's investment portfolio, which shall be calculated as: (1)
the balance at the inception of the State's fiscal year; or (2)
the average balance in the immediately preceding 5 fiscal
years, whichever number is greater. Distributions from a TDA
II-Recipient Fund, in an amount not to exceed the commitment
amount, may be reinvested into TDA IIa without being counted
against the 5% cap. The Treasurer may make investments from TDA
IIa that help attract, assist, and retain quality technology
businesses in Illinois. The earnings on TDA IIa shall be
accounted for separately from other investments made by the
Treasurer.
    (b) The Treasurer may solicit proposals from entities to
manage and be the General Partner of a separate fund
("Technology Development Account IIb" or "TDA IIb") consisting
of investments from private sector investors that must invest,
at the direction of the general partner Treasurer, in tandem
with TDA IIa in a pro-rata portion. The Treasurer may enter
into an agreement with the entity managing TDA IIb to advise on
the investment strategy of TDA IIa and TDA IIb (collectively
"Technology Development Account II" or "TDA II") and fulfill
other mutually agreeable terms. Funds in TDA IIb shall be kept
separate and apart from moneys in the State treasury.
    (c) All or a portion of the moneys Moneys in TDA IIa shall
may be invested by the State Treasurer to provide venture
capital to technology businesses, including co-investments,
seeking to locate, expand, or remain in Illinois by placing
money with Illinois venture capital firms for investment by the
venture capital firms in technology businesses. "Venture
capital", as used in this Section, means equity financing that
is provided for starting up, expanding, or relocating a
company, or related purposes such as financing for seed
capital, research and development, introduction of a product or
process into the marketplace, or similar needs requiring risk
capital. "Technology business", as used in this Section, means
a company that has as its principal function the providing of
services, including computer, information transfer,
communication, distribution, processing, administrative,
laboratory, experimental, developmental, technical, or testing
services; , manufacture of goods or materials; , the processing
of goods or materials by physical or chemical change; , computer
related activities; , robotics, biological, or pharmaceutical
industrial activities; activity, or technology-oriented
technology oriented or emerging industrial activity. "Illinois
venture capital firm", as used in this Section, means an entity
that: (1) has a majority of its employees in Illinois (more
than 50%) or that has at least one general managing partner or
principal member of the general partner domiciled in Illinois,
and that (2) provides equity financing for starting up or
expanding a company, or related purposes such as financing for
seed capital, research and development, introduction of a
product or process into the marketplace, or similar needs
requiring risk capital. "Illinois venture capital firm" may
also mean an entity that has a track record of identifying,
evaluating, and investing in Illinois companies and that
provides equity financing for starting up or expanding a
company, or related purposes such as financing for seed
capital, research and development, introduction of a product or
process into the marketplace, or similar needs requiring risk
capital. For purposes of this Section, "track record" means
having made, on average, at least one investment in an Illinois
company in each of its funds if the Illinois venture capital
firm has multiple funds or at least 2 investments in Illinois
companies if the Illinois venture capital firm has only one
fund. In no case shall more than 15% 10% of the capital in the
TDA IIa be invested in firms based outside of Illinois.
    (d) Any fund created by an Illinois venture capital firm in
which the State Treasurer places money pursuant to this Section
shall be required by the State Treasurer to seek investments in
technology businesses seeking to locate, expand, or remain in
Illinois. Any fund created by an Illinois venture capital firm
in which the State Treasurer places money under this Section
("TDA II-Recipient Fund") shall invest a minimum of twice (2x)
the aggregate amount of investable capital that is received
from the State Treasurer under this Section in Illinois
companies during the life of the fund. "Illinois companies", as
used in this Section, are companies that are headquartered or
that otherwise have a significant presence in the State at the
time of initial or follow-on investment. Investable capital is
calculated as committed capital, as defined in the firm's
applicable fund's governing documents, less related estimated
fees and expenses to be incurred during the life of the fund.
For the purposes of this subsection (d), "significant presence"
means at least one physical office and one full-time employee
within the geographic borders of this State.
    Any TDA II-Recipient Fund shall also invest additional
capital in Illinois companies during the life of the fund if,
as determined by the fund's manager, the investment:
        (1) is consistent with the firm's fiduciary
    responsibility to its limited partners;
        (2) is consistent with the fund manager's investment
    strategy; and
        (3) demonstrates the potential to create risk-adjusted
    financial returns consistent with the fund manager's
    investment goals.
    In addition to any reporting requirements set forth in
Section 10 of this Act, any TDA II-Recipient Fund shall report
the following additional information to the Treasurer on a
quarterly or annual basis, as determined by the Treasurer, for
all investments:
        (1) the names of portfolio companies invested in during
    the applicable investment period;
        (2) the addresses of reported portfolio companies;
        (3) the date of the initial (and follow-on) investment;
        (4) the cost of the investment;
        (5) the current fair market value of the investment;
        (6) for Illinois companies, the number of Illinois
    employees on the investment date; and
        (7) for Illinois companies, the current number of
    Illinois employees.
    If, as of the earlier to occur of (i) the fourth year of
the investment period of any TDA II-Recipient Fund or (ii) when
that TDA II-Recipient Fund has drawn more than 60% of the
investable capital of all limited partners, that TDA
II-Recipient Fund has failed to invest the minimum amount
required under this subsection (d) in Illinois companies, then
the Treasurer shall deliver written notice to the manager of
that fund seeking compliance with the minimum amount
requirement under this subsection (d). If, after 180 days of
delivery of notice, the TDA II-Recipient Fund has still failed
to invest the minimum amount required under this subsection (d)
in Illinois companies, then the Treasurer may elect, in
writing, to terminate any further commitment to make capital
contributions to that fund which otherwise would have been made
under this Section.
    (e) Notwithstanding the limitation found in subsection (d)
of Section 10 of this Act, the investment of the State
Treasurer in any fund created by an Illinois venture capital
firm in which the State Treasurer places money pursuant to this
Section shall not exceed 15% of the total TDA IIa account
balance investments in the fund.
    (f) (Blank). The State Treasurer shall not invest more than
one-third of Technology Development Account II in any given
calendar year. If in any calendar year less than one-third of
Technology Development Account II is invested, 50% of the
shortfall may be invested in the following calendar year in
addition to the regular one-third investment.
    (g) The Treasurer may deposit no more than 10% of the
earnings of the investments in the Technology Development
Account IIa into the Technology Development Fund.
(Source: P.A. 97-197, eff. 7-25-11.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.

Effective Date: 8/24/2018