June 12, 2008, Introduced by Senator CHERRY and referred to the Committee on Commerce and Tourism.
A bill to amend 1984 PA 270, entitled
"Michigan strategic fund act,"
by amending section 88f (MCL 125.2088f), as added by 2005 PA 225.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 88f. When creating programs for 21st century investments
under this chapter, the fund shall create and operate the venture
capital investment program. The fund board shall authorize
investments that shall invest only in or alongside a qualified
venture capital fund that invests primarily in early stage
businesses. The venture capital investment program shall do all of
the following:
(a) Provide that the return on investment that is sought is
greater than the return on investment under the commercial loan
portion of the loan enhancement program to reflect the greater
risk.
(b) Provide that the qualified venture capital fund will have
an amount at risk greater than the fund's investment.
(c) Provide that a qualified venture capital fund is not
eligible to participate in a venture capital investment program
unless it operates or enters into an agreement for the operation of
a business development office in this state staffed with at least 1
full-time
equivalent employee person
who is actively seeking
opportunities for venture capital investments in businesses located
in this state unless the investment opportunity requested by the
qualified venture capital fund is targeted to a specific
transaction involving a competitive edge technology that will not
occur without the fund's investment as determined by the fund
board.
(d) Provide that a qualified venture capital fund is not
eligible to participate in a venture capital investment program
unless it agrees to make venture capital investments in this state
at a percentage rate that is not less than the percentage rate that
the fund's investment in the qualified venture capital fund bears
to the total amount in the qualified venture capital fund.
(e) Provide that a qualified venture capital fund is not
eligible to participate in a venture capital investment program if
its investment strategy provides for the breakup and liquidation of
businesses. The fund board shall make sure that the agreements with
a venture capital fund have the appropriate provisions to prohibit
the actions described in this subdivision.
(f) Coordinate with the Michigan early stage venture
investment fund as defined in section 3 of the Michigan early stage
venture investment act of 2003, 2003 PA 296, MCL 125.2233, to
ensure that a continuum of venture capital is available in this
state.
(g) Provide that 80% of the funds allocated to a venture
capital investment program shall focus on competitive edge
technologies.
(h) Provide that a qualified venture capital fund may make
follow-up investments that were eligible for investment at the time
of initial investment but that subsequently may not be
characterized as an investment in an early stage business.