Public Act 102-1023
 
SB3777 EnrolledLRB102 23093 RJF 32249 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 11 and 20 as follows:
 
    (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 
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, 
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 
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 
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; .
        (8)     the fund name or for any co-investments, the 
    company name;
        (9)     the fund vintage, or for any co-investments, the

    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. 
    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 
    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. 

    (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 
    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.)
 
    (30 ILCS 265/20)

    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 
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.



(Source: P.A. 101-657, eff. 3-23-21.)