Illinois General Assembly - Full Text of Public Act 097-0197
Illinois General Assembly

Previous General Assemblies

Public Act 097-0197


 

Public Act 0197 97TH GENERAL ASSEMBLY



 


 
Public Act 097-0197
 
SB0107 EnrolledLRB097 06114 PJG 46187 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
adding Section 11 as follows:
 
    (30 ILCS 265/11 new)
    Sec. 11. Technology Development Account II.
    (a) In addition to the amount provided in Section 10 of
this Act, the State Treasurer may segregate a portion of the
Treasurer's investment portfolio, that at no time shall be
greater than 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 2%
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 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) Moneys in TDA IIa may be invested by the State
Treasurer to provide venture capital to technology businesses
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 activity, or technology oriented or emerging
industrial activity. "Illinois venture capital firm", as used
in this Section, means an entity that has a majority of its
employees in Illinois or that has at least one managing partner
or member of the general partner domiciled in Illinois, 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. "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 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.
    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 basis 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 investments in the
fund.
    (f) 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.
 
    Section 99. Effective date. This Act takes effect upon
becoming law.

Effective Date: 07/25/2011