Full Text of SB0107 97th General Assembly
SB0107enr 97TH GENERAL ASSEMBLY |
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| 1 | | AN ACT concerning finance.
| 2 | | Be it enacted by the People of the State of Illinois, | 3 | | represented in the General Assembly:
| 4 | | Section 5. The Technology Development Act is amended by | 5 | | adding Section 11 as follows: | 6 | | (30 ILCS 265/11 new) | 7 | | Sec. 11. Technology Development Account II. | 8 | | (a) In addition to the amount provided in Section 10 of | 9 | | this Act, the State Treasurer may segregate a portion of the | 10 | | Treasurer's investment portfolio, that at no time shall be | 11 | | greater than 2% of the portfolio, in the Technology Development | 12 | | Account IIa ("TDA IIa"), an account that shall be maintained | 13 | | separately and apart from other moneys invested by the | 14 | | Treasurer. Distributions from the investments in TDA IIa may be | 15 | | reinvested into TDA IIa without being counted against the 2% | 16 | | cap. The Treasurer may make investments from TDA IIa that help | 17 | | attract, assist, and retain quality technology businesses in | 18 | | Illinois. The earnings on TDA IIa shall be accounted for | 19 | | separately from other investments made by the Treasurer. | 20 | | (b) The Treasurer may solicit proposals from entities to | 21 | | manage and be the General Partner of a separate fund | 22 | | ("Technology Development Account IIb" or "TDA IIb") consisting | 23 | | of investments from private sector investors that must invest, |
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| 1 | | at the direction of the Treasurer, in tandem with TDA IIa in a | 2 | | pro-rata portion. The Treasurer may enter into an agreement | 3 | | with the entity managing TDA IIb to advise on the investment | 4 | | strategy of TDA IIa and TDA IIb (collectively "Technology | 5 | | Development Account II" or "TDA II") and fulfill other mutually | 6 | | agreeable terms. Funds in TDA IIb shall be kept separate and | 7 | | apart from moneys in the State treasury. | 8 | | (c) Moneys in TDA IIa may be invested by the State | 9 | | Treasurer to provide venture capital to technology businesses | 10 | | seeking to locate, expand, or remain in Illinois by placing | 11 | | money with Illinois venture capital firms for investment by the | 12 | | venture capital firms in technology businesses. "Venture | 13 | | capital", as used in this Section, means equity financing that | 14 | | is provided for starting up, expanding, or relocating a | 15 | | company, or related purposes such as financing for seed | 16 | | capital, research and development, introduction of a product or | 17 | | process into the marketplace, or similar needs requiring risk | 18 | | capital. "Technology business", as used in this Section, means | 19 | | a company that has as its principal function the providing of | 20 | | services, including computer, information transfer, | 21 | | communication, distribution, processing, administrative, | 22 | | laboratory, experimental, developmental, technical, or testing | 23 | | services, manufacture of goods or materials, the processing of | 24 | | goods or materials by physical or chemical change, computer | 25 | | related activities, robotics, biological or pharmaceutical | 26 | | industrial activity, or technology oriented or emerging |
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| 1 | | industrial activity. "Illinois venture capital firm", as used | 2 | | in this Section, means an entity that has a majority of its | 3 | | employees in Illinois or that has at least one managing partner | 4 | | or member of the general partner domiciled in Illinois, and | 5 | | that provides equity financing for starting up or expanding a | 6 | | company, or related purposes such as financing for seed | 7 | | capital, research and development, introduction of a product or | 8 | | process into the marketplace, or similar needs requiring risk | 9 | | capital. "Illinois venture capital firm" may also mean an | 10 | | entity that has a track record of identifying, evaluating, and | 11 | | investing in Illinois companies and that provides equity | 12 | | financing for starting up or expanding a company, or related | 13 | | purposes such as financing for seed capital, research and | 14 | | development, introduction of a product or process into the | 15 | | marketplace, or similar needs requiring risk capital. For | 16 | | purposes of this Section, "track record" means having made, on | 17 | | average, at least one investment in an Illinois company in each | 18 | | of its funds if the Illinois venture capital firm has multiple | 19 | | funds or at least 2 investments in Illinois companies if the | 20 | | Illinois venture capital firm has only one fund. In no case | 21 | | shall more than 10% of the capital in the TDA IIa be invested | 22 | | in firms based outside of Illinois. | 23 | | (d) Any fund created by an Illinois venture capital firm in | 24 | | which the State Treasurer places money pursuant to this Section | 25 | | shall be required by the State Treasurer to seek investments in | 26 | | technology businesses seeking to locate, expand, or remain in |
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| 1 | | Illinois. Any fund created by an Illinois venture capital firm | 2 | | in which the State Treasurer places money under this Section | 3 | | ("TDA II-Recipient Fund") shall invest a minimum of twice (2x) | 4 | | the aggregate amount of investable capital that is received | 5 | | from the State Treasurer under this Section in Illinois | 6 | | companies during the life of the fund. "Illinois companies", as | 7 | | used in this Section, are companies that are headquartered or | 8 | | that otherwise have a significant presence in the State at the | 9 | | time of initial or follow-on investment. Investable capital is | 10 | | calculated as committed capital, as defined in the firm's | 11 | | applicable fund's governing documents, less related estimated | 12 | | fees and expenses to be incurred during the life of the fund. | 13 | | Any TDA II-Recipient Fund shall also invest additional | 14 | | capital in Illinois companies during the life of the fund if, | 15 | | as determined by the fund's manager, the investment: | 16 | | (1) is consistent with the firm's fiduciary | 17 | | responsibility to its limited partners; | 18 | | (2) is consistent with the fund manager's investment | 19 | | strategy; and | 20 | | (3) demonstrates the potential to create risk-adjusted | 21 | | financial returns consistent with the fund manager's | 22 | | investment goals. | 23 | | In addition to any reporting requirements set forth in | 24 | | Section 10 of this Act, any TDA II-Recipient Fund shall report | 25 | | the following additional information to the Treasurer on a | 26 | | quarterly basis for all investments: |
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| 1 | | (1) the names of portfolio companies invested in during | 2 | | the applicable investment period; | 3 | | (2) the addresses of reported portfolio companies; | 4 | | (3) the date of the initial (and follow-on) investment; | 5 | | (4) the cost of the investment; | 6 | | (5) the current fair market value of the investment; | 7 | | (6) for Illinois companies, the number of Illinois | 8 | | employees on the investment date; and | 9 | | (7) for Illinois companies, the current number of | 10 | | Illinois employees. | 11 | | If, as of the earlier to occur of (i) the fourth year of | 12 | | the investment period of any TDA II-Recipient Fund or (ii) when | 13 | | that TDA II-Recipient Fund has drawn more than 60% of the | 14 | | investable capital of all limited partners, that TDA | 15 | | II-Recipient Fund has failed to invest the minimum amount | 16 | | required under this subsection (d) in Illinois companies, then | 17 | | the Treasurer shall deliver written notice to the manager of | 18 | | that fund seeking compliance with the minimum amount | 19 | | requirement under this subsection (d). If, after 180 days of | 20 | | delivery of notice, the TDA II-Recipient Fund has still failed | 21 | | to invest the minimum amount required under this subsection (d) | 22 | | in Illinois companies, then the Treasurer may elect, in | 23 | | writing, to terminate any further commitment to make capital | 24 | | contributions to that fund which otherwise would have been made | 25 | | under this Section. | 26 | | (e) Notwithstanding the limitation found in subsection (d) |
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| 1 | | of Section 10 of this Act, the investment of the State | 2 | | Treasurer in any fund created by an Illinois venture capital | 3 | | firm in which the State Treasurer places money pursuant to this | 4 | | Section shall not exceed 15% of the total investments in the | 5 | | fund. | 6 | | (f) The State Treasurer shall not invest more than | 7 | | one-third of Technology Development Account II in any given | 8 | | calendar year. If in any calendar year less than one-third of | 9 | | Technology Development Account II is invested, 50% of the | 10 | | shortfall may be invested in the following calendar year in | 11 | | addition to the regular one-third investment. | 12 | | (g) The Treasurer may deposit no more than 10% of the | 13 | | earnings of the investments in the Technology Development | 14 | | Account IIa into the Technology Development Fund.
| 15 | | Section 99. Effective date. This Act takes effect upon | 16 | | becoming law.
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