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| Public Act 102-1023
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| SB3777 Enrolled | LRB102 23093 RJF 32249 b |
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AN ACT concerning finance.
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Be it enacted by the People of the State of Illinois,
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represented in the General Assembly:
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Section 5. The Technology Development Act is amended by |
changing Sections 11 and 20 as follows:
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(30 ILCS 265/11) |
Sec. 11. Technology Development Account II. |
(a) Including the amount provided in Section 10 of this |
Act, the State Treasurer shall segregate a portion of the |
Treasurer's State investment portfolio, that at no time shall |
be greater than 5% 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% 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 |
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amount and total distributions received, 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, 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 in TDA IIa shall 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 or debt financing that is |
provided for starting up, expanding, or relocating a company, |
or related purposes such as financing for seed capital, |
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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; or 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 partner or principal 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 |
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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% of the capital in |
the TDA IIa be invested in firms based outside of Illinois. |
"Co-investments", as used in this Section, means an indirect |
investment made through an investment vehicle specifically |
organized to act on direct investment opportunities in an |
identified for-profit, Illinois company that is operating as a |
technology business in which one or more funds sponsored by |
Illinois venture capital firms have already invested, or are |
investing alongside such investment vehicle, on the same terms |
as such investment vehicle. Co-investments are limited to |
investments in Illinois companies for the purpose of enhancing |
the overall objectives of this Act. |
(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 |
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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: |
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(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; . |
(8) the fund name or for any co-investments, the |
company name; |
(9) the fund vintage, or for any co-investments, the
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date of investment; |
(10) the total fund size; |
(11) the dollar amount of the capital commitment made |
by the Treasurer; |
(12) the type of strategy pursued, including for |
co-investments; |
(13) to the extent the information is disclosed, |
whether or not the TDA II-Recipient Fund possesses diverse |
general partners and management, as listed under item (iv) |
of paragraph (5) of subsection (h); and |
(14) whether or not the TDA II-Recipient Fund is an |
Illinois venture capital firm. |
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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) 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. |
(f) (Blank). |
(f-5) The aggregate dollar amount available for new |
investments entered into following the effective date of this |
amendatory Act of the 102nd General Assembly shall, as |
applicable, be allocated as follows: |
(1) No more than 15% for emerging TDA II-Recipient |
Funds for which the Treasurer's investment exceeds 15% of |
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the total dollar amount under management in that fund. For |
purposes of this paragraph (1), "emerging TDA II-Recipient |
Fund" means a fund whose management company or sponsor has |
sponsored no more than 2 private investment funds, |
including the prospective TDA II-Recipient Fund in which |
the Treasurer proposes to invest. |
(2) No more than 5% for co-investments. |
(3) No less than 80% for TDA II-Recipient Funds that |
do not meet the criteria in paragraphs (1) or (2) of this |
subsection (f-5). |
(g) The Treasurer may deposit no more than 15% of the |
earnings of the investments in the Technology Development |
Account IIa into the Technology Development Fund.
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(h) The Treasurer shall disclose on the website of the |
Treasurer, at least annually, the following aggregate |
financial performance information for TDA II-Recipient Funds: |
(1) the Treasurer's internal rate of return for the |
past
one, 3, 5, and 10 years, and since 2016; |
(2) the Treasurer's total commitment; |
(3) the capital called; |
(4) the cash distributions; |
(5) the following information regarding the current |
portfolio: (i) the value of the portfolio, committed and |
uncommitted; (ii) the TDA II-Recipient Funds under |
management within Illinois; (iii) the TDA II-Recipient |
Funds under management outside of Illinois; and (iv) to |
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the extent relevant data has been reported to the |
Treasurer, the dollar amount invested in TDA II-Recipient |
Funds that have a general partner who is a qualified |
veteran of the armed forces, qualified service-disabled |
veteran, minority person, woman, or person with a |
disability, as those terms are referenced and defined in |
Section 30 of the State Treasurer Act; and |
(6) the amount invested in each investment strategy, |
including venture capital, growth equity, debt, and |
co-investments. |
(Source: P.A. 100-1081, eff. 8-24-18; 101-657, eff. 3-23-21.)
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(30 ILCS 265/20)
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Sec. 20. Technology Development Fund. |
(a) The Technology Development Fund is
created as a |
nonappropriated trust fund within special fund outside the |
State treasury with the State Treasurer
as custodian. Moneys |
in the Fund may be used by the State Treasurer to pay
expenses |
related to investments from the Technology Development |
Account. Moneys
in the Fund in excess of those expenses may be |
provided as grants to: (i) Illinois
schools to purchase |
computers, upgrade technology, and support career and |
technical education; or (ii) incubators, accelerators, |
innovation research, technology transfer, and educational |
programs that provide training, support, and other resources |
to technology businesses to promote the growth of jobs and |
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entrepreneurial and venture capital environments in |
communities of color or underrepresented or under-resourced |
communities in the State. |
(b) On or before January 31, 2023 and each year |
thereafter, the Treasurer shall publish on his or her official |
website the following information regarding the Technology |
Development Fund for the previous fiscal year: |
(1) moneys spent on administration expenses; |
(2) moneys provided as grants to Illinois schools to |
purchase computers, upgrade technology, and support career |
and technical education; |
(3) moneys provided as grants to incubators, |
accelerators, innovation research, technology transfer, |
and educational programs; and |
(4) notice of all grants awarded.
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(Source: P.A. 101-657, eff. 3-23-21.)
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