Bill Text: IL SB2946 | 2019-2020 | 101st General Assembly | Introduced


Bill Title: Amends the Technology Development Act. Removes a provision specifying that the investment of the State Treasurer in any fund created by an Illinois venture capital firm in which the State Treasurer places money shall not exceed 10% of the total investments in the fund. Provides that distributions from a TDA II-Recipient Fund, in an amount not to exceed the commitment amount and total distributions received, may be reinvested into a specified account without being counted against the 5% cap. Provides that specified moneys in the Technology Development Fund may be provided as grants to technology businesses in order to foster, accelerate, and scale technology innovation in Illinois. Modifies the term "technology business" to expand the meaning of technology oriented or emerging activity. Makes conforming changes. Effective immediately.

Spectrum: Partisan Bill (Democrat 9-0)

Status: (Introduced) 2020-03-05 - Added as Co-Sponsor Sen. Jennifer Bertino-Tarrant [SB2946 Detail]

Download: Illinois-2019-SB2946-Introduced.html


101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB2946

Introduced 2/4/2020, by Sen. Suzy Glowiak Hilton

SYNOPSIS AS INTRODUCED:
30 ILCS 265/10
30 ILCS 265/11
30 ILCS 265/20

Amends the Technology Development Act. Removes a provision specifying that the investment of the State Treasurer in any fund created by an Illinois venture capital firm in which the State Treasurer places money shall not exceed 10% of the total investments in the fund. Provides that distributions from a TDA II-Recipient Fund, in an amount not to exceed the commitment amount and total distributions received, may be reinvested into a specified account without being counted against the 5% cap. Provides that specified moneys in the Technology Development Fund may be provided as grants to technology businesses in order to foster, accelerate, and scale technology innovation in Illinois. Modifies the term "technology business" to expand the meaning of technology oriented or emerging activity. Makes conforming changes. Effective immediately.
LRB101 16723 RJF 66112 b

A BILL FOR

SB2946LRB101 16723 RJF 66112 b
1 AN ACT concerning finance.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Technology Development Act is amended by
5changing Sections 10, 11, and 20 as follows:
6 (30 ILCS 265/10)
7 Sec. 10. Technology Development Account.
8 (a) The State Treasurer may segregate a portion of the
9Treasurer's investment portfolio, that at no time shall be
10greater than 1% of the portfolio, in the Technology Development
11Account, an account that shall be maintained separately and
12apart from other moneys invested by the Treasurer. The
13Treasurer may make investments from the Account that help
14attract, assist, and retain quality technology businesses in
15Illinois. The earnings on the Account shall be accounted for
16separately from other investments made by the Treasurer.
17 (b) Moneys in the Account may be invested by the State
18Treasurer to provide venture capital to technology businesses
19seeking to locate, expand, or remain in Illinois by placing
20money with Illinois venture capital firms for investment by the
21venture capital firms in technology businesses. "Venture
22capital", as used in this Act, means equity financing that is
23provided for starting up, expanding, or relocating a company,

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1or related purposes such as financing for seed capital,
2research and development, introduction of a product or process
3into the marketplace, or similar needs requiring risk capital.
4"Technology business", as used in this Act, means a company
5that has as its principal function the providing of services
6including computer, information transfer, communication,
7distribution, processing, administrative, laboratory,
8experimental, developmental, technical, testing services,
9manufacture of goods or materials, the processing of goods or
10materials by physical or chemical change, computer related
11activities, robotics, biological or pharmaceutical industrial
12activity, or technology oriented or emerging industrial
13activity, including, but not limited to, incubators,
14accelerators, innovation research, technology transfer, and
15educational programs that provide training, support, and other
16resources to current and prospective entrepreneurs. "Illinois
17venture capital firms", as used in this Act, means an entity
18that has a majority of its employees in Illinois or that has at
19least one managing partner domiciled in Illinois that has made
20significant capital investments in Illinois companies and that
21provides equity financing for starting up or expanding a
22company, or related purposes such as financing for seed
23capital, research and development, introduction of a product or
24process into the marketplace, or similar needs requiring risk
25capital.
26 (c) Any fund created by an Illinois venture capital firm in

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1which the State Treasurer places money pursuant to this Act
2shall be required by the State Treasurer to seek investments in
3technology businesses seeking to locate, expand, or remain in
4Illinois.
5 (d) (Blank). The investment of the State Treasurer in any
6fund created by an Illinois venture capital firm in which the
7State Treasurer places money pursuant to this Act shall not
8exceed 10% of the total investments in the fund.
9 (e) The State Treasurer shall not invest more than
10one-third of the Technology Development Account in any given
11calendar year.
12 (f) The Treasurer may deposit no more than 10% of the
13earnings of the investments in the Technology Development
14Account into the Technology Development Fund.
15(Source: P.A. 94-395, eff. 8-1-05.)
16 (30 ILCS 265/11)
17 Sec. 11. Technology Development Account II.
18 (a) Including the amount provided in Section 10 of this
19Act, the State Treasurer shall segregate a portion of the
20Treasurer's State investment portfolio, that at no time shall
21be greater than 5% of the portfolio, in the Technology
22Development Account IIa ("TDA IIa"), an account that shall be
23maintained separately and apart from other moneys invested by
24the Treasurer. Distributions from the investments in TDA IIa
25may be reinvested into TDA IIa without being counted against

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1the 5% cap. The aggregate investment in TDA IIa and the
2aggregate commitment of investment capital in a TDA
3II-Recipient Fund shall at no time be greater than 5% of the
4State's investment portfolio, which shall be calculated as: (1)
5the balance at the inception of the State's fiscal year; or (2)
6the average balance in the immediately preceding 5 fiscal
7years, whichever number is greater. Distributions from a TDA
8II-Recipient Fund, in an amount not to exceed the commitment
9amount and total distributions received, may be reinvested into
10TDA IIa without being counted against the 5% cap. The Treasurer
11may make investments from TDA IIa that help attract, assist,
12and retain quality technology businesses in Illinois. The
13earnings on TDA IIa shall be accounted for separately from
14other investments made by the Treasurer.
15 (b) The Treasurer may solicit proposals from entities to
16manage and be the General Partner of a separate fund
17("Technology Development Account IIb" or "TDA IIb") consisting
18of investments from private sector investors that must invest,
19at the direction of the general partner, in tandem with TDA IIa
20in a pro-rata portion. The Treasurer may enter into an
21agreement with the entity managing TDA IIb to advise on the
22investment strategy of TDA IIa and TDA IIb (collectively
23"Technology Development Account II" or "TDA II") and fulfill
24other mutually agreeable terms. Funds in TDA IIb shall be kept
25separate and apart from moneys in the State treasury.
26 (c) All or a portion of the moneys in TDA IIa shall be

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1invested by the State Treasurer to provide venture capital to
2technology businesses, including co-investments, seeking to
3locate, expand, or remain in Illinois by placing money with
4Illinois venture capital firms for investment by the venture
5capital firms in technology businesses. "Venture capital", as
6used in this Section, means equity financing that is provided
7for starting up, expanding, or relocating a company, or related
8purposes such as financing for seed capital, research and
9development, introduction of a product or process into the
10marketplace, or similar needs requiring risk capital.
11"Technology business", as used in this Section, means a company
12that has as its principal function the providing of services,
13including computer, information transfer, communication,
14distribution, processing, administrative, laboratory,
15experimental, developmental, technical, or testing services;
16manufacture of goods or materials; the processing of goods or
17materials by physical or chemical change; computer related
18activities; robotics, biological, or pharmaceutical industrial
19activities; or technology-oriented or emerging industrial
20activity, including, but not limited to, incubators,
21accelerators, innovation research, technology transfer, and
22educational programs that provide training, support, and other
23resources to current and prospective entrepreneurs. "Illinois
24venture capital firm", as used in this Section, means an entity
25that: (1) has a majority of its employees in Illinois (more
26than 50%) or that has at least one general partner or principal

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1domiciled in Illinois, and that (2) provides equity financing
2for starting up or expanding a company, or related purposes
3such as financing for seed capital, research and development,
4introduction of a product or process into the marketplace, or
5similar needs requiring risk capital. "Illinois venture
6capital firm" may also mean an entity that has a track record
7of identifying, evaluating, and investing in Illinois
8companies and that provides equity financing for starting up or
9expanding a company, or related purposes such as financing for
10seed capital, research and development, introduction of a
11product or process into the marketplace, or similar needs
12requiring risk capital. For purposes of this Section, "track
13record" means having made, on average, at least one investment
14in an Illinois company in each of its funds if the Illinois
15venture capital firm has multiple funds or at least 2
16investments in Illinois companies if the Illinois venture
17capital firm has only one fund. In no case shall more than 15%
18of the capital in the TDA IIa be invested in firms based
19outside of Illinois.
20 (d) Any fund created by an Illinois venture capital firm in
21which the State Treasurer places money pursuant to this Section
22shall be required by the State Treasurer to seek investments in
23technology businesses seeking to locate, expand, or remain in
24Illinois. Any fund created by an Illinois venture capital firm
25in which the State Treasurer places money under this Section
26("TDA II-Recipient Fund") shall invest a minimum of twice (2x)

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1the aggregate amount of investable capital that is received
2from the State Treasurer under this Section in Illinois
3companies during the life of the fund. "Illinois companies", as
4used in this Section, are companies that are headquartered or
5that otherwise have a significant presence in the State at the
6time of initial or follow-on investment. Investable capital is
7calculated as committed capital, as defined in the firm's
8applicable fund's governing documents, less related estimated
9fees and expenses to be incurred during the life of the fund.
10For the purposes of this subsection (d), "significant presence"
11means at least one physical office and one full-time employee
12within the geographic borders of this State.
13 Any TDA II-Recipient Fund shall also invest additional
14capital in Illinois companies during the life of the fund if,
15as 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
24Section 10 of this Act, any TDA II-Recipient Fund shall report
25the following additional information to the Treasurer on a
26quarterly or annual basis, as determined by the Treasurer, for

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1all investments:
2 (1) the names of portfolio companies invested in during
3 the applicable investment period;
4 (2) the addresses of reported portfolio companies;
5 (3) the date of the initial (and follow-on) investment;
6 (4) the cost of the investment;
7 (5) the current fair market value of the investment;
8 (6) for Illinois companies, the number of Illinois
9 employees on the investment date; and
10 (7) for Illinois companies, the current number of
11 Illinois employees.
12 If, as of the earlier to occur of (i) the fourth year of
13the investment period of any TDA II-Recipient Fund or (ii) when
14that TDA II-Recipient Fund has drawn more than 60% of the
15investable capital of all limited partners, that TDA
16II-Recipient Fund has failed to invest the minimum amount
17required under this subsection (d) in Illinois companies, then
18the Treasurer shall deliver written notice to the manager of
19that fund seeking compliance with the minimum amount
20requirement under this subsection (d). If, after 180 days of
21delivery of notice, the TDA II-Recipient Fund has still failed
22to invest the minimum amount required under this subsection (d)
23in Illinois companies, then the Treasurer may elect, in
24writing, to terminate any further commitment to make capital
25contributions to that fund which otherwise would have been made
26under this Section.

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1 (e) The Notwithstanding the limitation found in subsection
2(d) of Section 10 of this Act, the investment of the State
3Treasurer in any fund created by an Illinois venture capital
4firm in which the State Treasurer places money pursuant to this
5Section shall not exceed 15% of the total TDA IIa account
6balance.
7 (f) (Blank).
8 (g) The Treasurer may deposit no more than 10% of the
9earnings of the investments in the Technology Development
10Account IIa into the Technology Development Fund.
11(Source: P.A. 100-1081, eff. 8-24-18.)
12 (30 ILCS 265/20)
13 Sec. 20. Technology Development Fund. The Technology
14Development Fund is created as a special fund outside the State
15treasury with the State Treasurer as custodian. Moneys in the
16Fund may be used by the State Treasurer to pay expenses related
17to investments from the Technology Development Account. Moneys
18in the Fund in excess of those expenses may be provided as
19grants to Illinois schools to purchase computers and to upgrade
20technology, and to technology businesses in order to foster,
21accelerate, and scale technology innovation in Illinois in
22support of this Act.
23(Source: P.A. 94-395, eff. 8-1-05.)
24 Section 99. Effective date. This Act takes effect upon
25becoming law.
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