Bill Text: GA HB718 | 2011-2012 | Regular Session | Introduced

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Bill Title: Economic Development, Department of; Georgia Capital Acceleration Authority; create

Spectrum: Partisan Bill (Republican 6-0)

Status: (Introduced - Dead) 2012-01-12 - House Second Readers [HB718 Detail]

Download: Georgia-2011-HB718-Introduced.html

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12 LC 34 3201

House Bill 718

By: Representatives Peake of the 137th, Lindsey of the 54th, Sheldon of the 105th, Stephens of the 164th, Williamson of the 111th, and others

A BILL TO BE ENTITLED
AN ACT

To amend Chapter 7 of Title 50 of the Official Code of Georgia Annotated, relating to the Department of Economic Development, so as to create the Georgia Capital Acceleration Authority; so as to provide for legislative findings; to provide for definitions; to provide for a program administrator; to provide for the issuance of premium tax credits to insurance companies or holding companies that purchase such credits to offset liability for state insurance premium taxes; to provide for reports; to provide for related matters; to provide for an effective date; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

SECTION 1.

Chapter 7 of Title 50 of the Official Code of Georgia Annotated, relating to the Department of Economic Development, is amended by adding a new article, to read as follows:

"ARTICLE 8

50-7-90.

The General Assembly declares that its purpose in enacting this legislation is to increase the amount of private investment capital available in this state for Georgia based business enterprises in the seed, early, or growth stages of business development and requiring funding, as well as established Georgia based business enterprises developing new methods or technologies, including the promotion of research and development purposes, thereby increasing employment, creating additional wealth, and otherwise benefiting the economic welfare of the people of this state. Accordingly, it is the intention of the General Assembly that the Georgia Capital Acceleration Authority make investments in support of Georgia based business enterprises in accordance with the investment policy authorized and required under this article and focus its investment policy principally on venture capital funds and private equity organizations investing in Georgia based business enterprises.

50-7-91.

As used in this article, the term:

(1) 'Affiliate' means:

(A) A person who, directly or indirectly, beneficially owns, controls, or holds power to vote any outstanding voting securities or other voting ownership interests of a venture firm or an insurance company; or

(B) A person whose outstanding voting securities or other voting ownership interests are directly or indirectly beneficially owned, controlled, or held with power to vote by a venture firm or an insurance company.

The term does not include an insurance company that becomes a purchaser in accordance with an allocation of investment tax credits under this article solely by reason of the allocation.

(2) 'Authority' means the Georgia Capital Acceleration Authority created under Code Section 50-7-92.

(3) 'Contributed capital' means the amount of money contributed to the Georgia Capital Acceleration Fund for the purchase of insurance premium tax credits.

(4) 'Department' means the Department of Economic Development.

(5) 'Designated capital' means the amount of money committed and invested by the Georgia Capital Acceleration Fund into individual early stage venture capital funds or growth stage venture capital funds.

(6) 'Early stage venture capital fund' means:

(A) A fund that has at least one principal employed to direct the investment of the designated capital;

(B) A fund whose principals have at least five years of experience in the venture capital, angel capital, or private equity sector by investing primarily in Georgia domiciled companies or a fund whose managers have been based, as defined by having a principal office, in the State of Georgia for at least five years prior to the effective date of this article;

(C) At the discretion of the program administrator and the authority, one or more early stage venture capital funds that are first-time Georgia based funds, so long as the fund managers have at least five years of experience in venture capital or angel capital investing in Georgia based business enterprises; and

(D) A fund of which the primary investment strategy must be the achievement of transformational economic development outcomes through focused investments of capital in seed or early stage businesses with high growth potential. The fund principals must have demonstrated the ability to lead investment rounds, advise and mentor entrepreneurs, and facilitate follow-on investments. A minimum of 10 percent of the committed capital of the fund must be committed by the institutional investors, fund principals, or other accredited investors.

(7) 'Growth stage venture capital fund' means:

(A) A fund having its principal office and a majority of its employees in Georgia that has at least two principals employed to direct the investment of the designated capital:

(B) A fund whose principals have at least five years of experience in the venture capital, angel capital, or private equity sector by investing primarily in Georgia domiciled companies or a fund whose principals have been based, as defined by having a principal office, in the State of Georgia for at least five years prior to the effective date of this article; and

(C) A fund which has as its primary investment strategy the achievement of transformational economic development outcomes through focused investments of capital in growth stage businesses with high return potential. The fund principals must have demonstrated the ability to lead investment rounds, advise and mentor entrepreneurs, and facilitate follow-on investments. A minimum of 50 percent of the committed capital of the fund must be committed by the institutional investors, fund principals, or other accredited investors.

(8) 'Insurance premium tax credit' means a credit against insurance premium tax liability offered to a purchaser under Code Section 50-7-98.

(9) 'Insurance premium tax liability' means any liability incurred under Code Sections 33-3-26 and 33-8-4; provided, however, that any insurance premium tax liability incurred under the provisions of Code Section 47-7-61, relating to fire, lightning, or extended coverage, inland marine or allied lines, or windstorm coverage, shall not be offset by any insurance premium tax credits issued under this article.

(10) 'Program administrator' means a state appointed investment advisory firm consisting of experienced investment professionals that will actively pursue investment opportunities for the State of Georgia. The investment advisory firm will evaluate and select Georgia based venture capital funds, in conjunction with the Georgia Capital Acceleration Authority, through a rigorous due diligence process.

(11) 'Purchaser' means:

(A) An insurance company that:

(i) Is authorized to do business in Georgia;

(ii) Has insurance premium tax liability; and

(iii) Pays contributed capital to purchase an allocation of premium tax credits under this article; or

(B) A holding company that:

(i) Has at least one insurance company subsidiary authorized to do business in Georgia; and

(ii) Pays contributed capital on behalf of one or more of these subsidiaries.

(12) 'Qualified distribution' means any distribution or payment by the Georgia Capital Acceleration Fund in connection with any of the following:

(A) Costs and expenses of forming, syndicating, and organizing the Georgia Capital Acceleration Fund, including fees paid for professional services, and the costs of financing and insuring the obligations of the Georgia Capital Acceleration Fund, provided such payments are not made to a participating investor;

(B) An annual management fee in accordance with a fund's partnership agreement and consistent with the fund's other private investors, to offset the costs and expenses of managing and operating the Georgia Capital Acceleration Fund; or

(C) Reasonable and necessary fees in accordance with industry custom for ongoing professional services, including, but not limited to, legal and accounting services related to the operation of the Georgia Capital Acceleration Fund, but not including any lobbying or governmental relations.

(13) 'Qualified early stage' or 'seed' business means a business that, at the time of the first investment in the business by a venture firm:

(A) Has its headquarters located in the State of Georgia;

(B) Has its principal business operations located in the State of Georgia and intends to maintain its principal business operations in the state after receiving an investment from the venture capital firm. In order to discourage the business from relocating outside Georgia within three years from the date of an initial investment, the investment in the business shall be subject to redemption by the venture capital firm within one year from the time the business relocates its principal business operations outside the state, unless the business maintains a significant presence in Georgia as determined by relative number of employees or relative assets remaining in Georgia following the relocation;

(C) Has 20 or fewer employees;

(D) Has a current gross annual revenue run rate of less than $1 million;

(E) Has not obtained during its existence more than $2 million in aggregate cash proceeds from the issuance of its equity or debt investments, not including commercial loans from chartered banks or savings and loan institutions; and

(F) Does not engage substantially in:

(i) Retail sales;

(ii) Real estate development or construction;

(iii) Entertainment, amusement, recreation, or athletic or fitness activity for which an admission is charged;

(iv) The business of insurance, banking, lending, financial, brokerage, or investment activities;

(v) Natural resource extraction, including but not limited to oil, gas, or biomass; or

(vi) The provision of professional services by accountants, attorneys, or physicians.

A business classified as a qualified early stage business at the time of the first qualified investment in the business will remain classified as a qualified early stage business and may receive continuing qualified investments from venture capital firms participating in the Georgia Capital Acceleration Fund. Continuing investments will constitute qualified investments even though the business may not meet the definition of a qualified early stage business at the time of such continuing investments.

(14) 'Qualified growth stage business' means a business that, at the time of the first investment in the business by a venture firm:

(A) Has its headquarters located in the State of Georgia;

(B) Is either a corporation, limited liability company, or a general or limited partnership located in this state;

(C) Has its principal business operations located in the State of Georgia and intends to maintain its principal business operations in the state after receiving an investment from the venture capital firm. In order to discourage the business from relocating outside Georgia within three years from the date of initial investment, the investment in the business shall be subject to redemption by the venture capital firm within one year from the time the business relocates its principal business operations outside the state, unless the business maintains a significant presence in Georgia as determined by relative number of employees or relative assets remaining in Georgia;

(D) Has 100 or fewer employees;

(E) Has a current gross annual revenue run rate of greater than $1 million; and

(F) Does not engage substantially in:

(i) Retail sales;

(ii) Real estate development or construction;

(iii) Entertainment, amusement, recreation, or athletic or fitness activity for which an admission is charged;

(iv) The business of insurance, banking, lending, financial, brokerage, or investment activities;

(v) Natural resource extraction, including but not limited to oil, gas, or biomass; or

(vi) The provision of professional services by accountants, attorneys, or physicians.

A business classified as a qualified growth stage business at the time of the first qualified investment in the business will remain classified as a qualified growth stage business and may receive continuing qualified investments from venture capital funds participating in the Georgia Capital Acceleration Fund. Continuing investments will constitute qualified investments even though the business may not meet the definition of a qualified growth stage business at the time of such continuing investments.

(15) 'Qualified investment' means the investment of money by the Georgia Capital Acceleration Fund in each early or growth stage venture capital fund selected by the program administrator.

50-7-92.

(a) There is hereby created the Georgia Capital Acceleration Authority, which shall exercise the powers and perform the duties prescribed by this article. The exercise by the authority of its powers and duties is hereby declared to be an essential state governmental function. The authority is subject to all laws generally applicable to state agencies and public officials, to the extent those laws do not conflict with the provisions of this article.

(b) The authority shall consist of three members appointed by the Governor, one member appointed by the Lieutenant Governor, and one member appointed by the Speaker of the House of Representatives. Each appointed member shall be a resident of Georgia and shall have experience in at least one of the following areas:

(1) Early stage, angel, or venture capital investing;

(2) Growth stage venture capital investing;

(3) Fund of funds management; or

(4) Entrepreneurship.

No member of the authority shall be affiliated in any way with any venture capital fund that is selected to perform services for the authority.

(c) The commissioner of economic development, revenue commissioner, and Insurance Commissioner or their designees shall serve as nonvoting members of the authority.

(d) Initial appointees to the authority shall serve staggered terms, with all of the initial terms beginning on January 1, 2013. The terms of one member appointed by the Governor and the members appointed by the Lieutenant Governor and the Speaker of the House of Representatives shall expire on December 31, 2015. The terms of the other two initial appointments by the Governor shall expire on December 31, 2017. Thereafter, terms of office for all appointees shall be for four years, with each term ending on the same day of the same month as did the term that it succeeds. A vacancy on the authority shall be filled in the same manner as the original appointment, except that a person appointed to fill a vacancy shall be appointed to the remainder of the unexpired term. Any appointed member of the authority is eligible for reappointment.

(e) A member of the authority may be removed by the member's appointing official for misfeasance, willful neglect of duty, or other cause, after notice and a public hearing, unless the notice and hearing are waived in writing by the member.

(f) Members of the authority shall serve without compensation, The Governor shall designate a member of the authority to serve as chairperson. A majority of the voting members of the authority constitutes a quorum, and the affirmative vote of a majority of the voting members present is necessary for any action taken by the authority. A vacancy in the membership of the authority does not impair the right of a quorum to exercise all rights and perform all duties of the authority.

(g) The authority shall have the power:

(1) To have a seal and alter the same at its pleasure;

(2) To acquire by purchase, lease, or otherwise, including acquisition of land from the state government, and to hold, lease, and dispose of real and personal property of every kind and character for its corporate purpose and to enter into any contracts, leases, or other charges for the use of property or services of the authority and collect and use the same as necessary to operate the authority; and to accomplish any of the purposes of this article and make any purchases or sales necessary for such purposes;

(3) To acquire in its own name by purchase, on such terms and conditions and in such manner as it may deem proper, real property, or rights or easements therein, or franchises necessary or convenient for its corporate purpose, and to use the same so long as its corporate existence shall continue, and to lease or make contracts with respect to the use of such property, or dispose of the same in any manner it deems to be to the best advantage of the authority;

(4) To appoint, select, and employ officers, agents, and employees, including real estate, environmental, engineering, architectural, and construction experts, fiscal agents, and attorneys, and to fix their respective compensations;

(5) To make contracts and leases and to execute all instruments necessary or convenient. Any and all persons, firms, and corporations and any and all political subdivisions, departments, institutions, or agencies of the state and federal government are authorized to enter into contracts, leases, or agreements with the authority upon such terms and for such purposes as they deem advisable; and, without limiting the generality of the foregoing, authority is specifically granted to municipal corporations, counties, political subdivisions, and to the authority relative to entering into contracts, lease agreements, or other undertakings authorized between the authority and private corporations, both inside and outside this state, and between the authority and public bodies, including counties and cities outside this state and the federal government;

(6) To accept loans and grants of money or materials or property of any kind from the United States of America or any agency or instrumentality thereof upon such terms and conditions as the United States of America or such agency or instrumentality may require;

(7) To accept loans and grants of money or materials or property of any kind from the State of Georgia or any agency or instrumentality or political subdivision thereof upon such terms and conditions as the State of Georgia or such agency or instrumentality or political subdivision may require;

(8) To exercise any power usually possessed by private corporations performing similar functions, provided that no such power is in conflict with the Constitution or general laws of this state; and

(9) To do all things necessary or convenient to carry out the powers expressly given in this article.

(h) The department shall provide the authority with office space and such technical assistance as the authority requires and the authority shall be attached to the department for administrative purposes. The department shall also consult with the authority in connection with the administration of the Georgia Capital Acceleration Program created under this article.

50-7-93.

The authority's primary responsibilities include:

(1) Establishing an investment policy for the selection of a program administrator;

(2) Selecting a program administrator to administer the provisions of this article;

(3) Giving final approval to allocations of designated capital to the venture capital funds selected by the program administrator;

(4) Executing and overseeing the contract of the program administrator in order to assure compliance with this article; and

(5) Establishing a policy with respect to use of capital and profits returned to the state pursuant to the provisions of Code Section 50-7-102.

50-7-94.

(a) The program administrator will be selected by the authority through a transparent open bid process and will be responsible for administering the Georgia Capital Acceleration Fund and for making all venture capital fund selections in accordance with the investment policies developed by the authority or contained in this article.

(b) The program administrator will be responsible for selecting a group of Georgia based venture capital funds in two categories, early or seed stage venture capital funds and growth stage venture capital funds.

(c) The early stage venture capital funds shall invest primarily in early or seed stage businesses and shall be selected using a transparent open bid process pursuant to guidelines developed by the authority. The program administrator shall ensure that a diverse cross-section of industry sectors is represented by the selected funds, including technology, health care, life sciences, agribusiness, logistics, energy, and advanced manufacturing.

(d) The growth stage venture capital funds shall be selected using a transparent open bid process pursuant to guidelines developed by the authority. The program administrator shall ensure that a diverse cross-section of industry sectors is represented by the selected funds, including technology, health care, life sciences, agribusiness, logistics, energy, and advanced manufacturing.

(e) In the selection of the early stage venture capital funds and the growth stage venture capital funds the program administrator shall consider the following factors:

(1) The management structure of the fund, including:

(A) The investment experience of the principals;

(B) The applicant's reputation in the venture firm industry and the applicant's ability to attract coinvestment capital and syndicate investments in qualified businesses in Georgia;

(C) The knowledge, experience, and capabilities of the applicant in subject areas relevant to venture stage businesses in Georgia; and

(D) The tenure and turnover history of principals and senior investment professionals of the fund;

(2) The fund's investment strategy, including:

(A) The applicant's record of performance in investing in early and growth stage businesses;

(B) The applicant's history of attracting coinvestment capital and syndicate investments;

(C) The soundness of the applicant's investment strategy and the compatibility of that strategy with business opportunities in Georgia; and

(D) The applicant's history of job creation through investment;

(3) The fund's commitment to making investments, that to the fullest extent possible:

(A) Create employment opportunities in Georgia;

(B) Lead to the growth of the Georgia economy and qualified businesses in Georgia;

(C) Complement the research and development projects of Georgia academic institutions; and

(D) Foster the development of technologies and industries that present opportunities for the growth of qualified businesses in Georgia; and

(4) The fund's commitment to Georgia, including:

(A) The applicant's presence in Georgia through permanent local offices or affiliation with local investment firms;

(B) The local presence of senior investment professionals;

(C) The applicant's history of investing in early and growth stage businesses in Georgia;

(D) The applicant's ability to identify investment opportunities through working relationships with Georgia research and development institutions and Georgia based businesses; and

(E) The applicant's commitment to investing an amount that matches or exceeds the amount of the applicant's designated capital received under this article, in Georgia based qualified early stage businesses and qualified growth stage businesses.

(f) A venture capital fund shall file an application with the authority in the form required by the program administrator. The authority shall begin accepting applications on or before September 1, 2012.

50-7-95.

(a) The Georgia Capital Acceleration Fund will be capitalized through state insurance premium tax credits. The State of Georgia will sell tax credits to purchasers, pursuant to the provisions of this article, and the tax credits shall be used to offset the purchasers' state insurance premium tax liability.

(b) The capital raised through the auction of insurance premium tax credits will be periodically distributed to the venture capital funds selected by the program administrator pursuant to Code Section 50-7-94.

(c) Each year the purchasers shall be issued a tax credit certificate by the authority.

(d) Purchasers will be able to claim their tax credits pursuant to the provisions of Code Section 50-7-98.

50-7-96.

(a) The State of Georgia will sell a maximum of $200 million in insurance premium tax credits over a three-year period through an auction process administered by the program administrator pursuant to guidelines developed by the authority. The $200 million in insurance premium tax credits will be auctioned in the first year of the Georgia Capital Acceleration Program, and the purchasers will be obligated to pay the purchase amount to the authority for deposit in the Georgia Capital Acceleration Fund in three equal amounts over the three-year period.

(b) The program administrator shall obtain the services of an independent third party to conduct the bidding process to secure purchasers for the capital acceleration program.

(c) Using the procedures adopted by the independent third party, each potential purchaser shall make a timely and irrevocable offer, subject only to the authority's issuance to the purchaser of tax credit certificates, to make specified contributions of designated capital to the authority on the dates specified in Code Section 50-7-98.

(d) The offer shall include:

(1) The requested amount of tax credits, which may not be less than $5 million;

(2) The potential purchaser's specified contribution for each tax credit dollar requested, which may not be less than the greater of:

(A) Eighty-five percent of the requested dollar amount of tax credits; or

(B) The percentage of the requested dollar amount of tax credits that the program administrator, on the recommendation of the independent third party, determines to be consistent with market conditions as of the offer date; and

(3) Any other information the independent third party requires.

(e)(1) The deadline for submission of applications for tax credits is February 1, 2013.

(2) Each potential purchaser shall receive a written notice from the program administrator not later than May 1, 2013, indicating whether or not it has been approved as a purchaser and, if so, the amount of tax credits allocated.

50-7-97.

(a) As soon as practicable after the authority receives each installment of contributed capital, the authority and each selected venture capital fund that has been allocated designated capital shall enter into a contract under which the allocated amount of designated capital will be committed by the authority to the selected venture capital funds for investment pursuant to this article.

(b) The authority shall allocate designated capital as follows:

(1) Early stage venture capital funds: Thirty percent of the contributed capital in the Georgia Capital Acceleration Fund shall be allocated among the early stage venture capital funds, in accordance with the following eligibility and requirements:

(A) Each early stage venture capital fund shall be eligible for a minimum $10 million allocation of designated capital and a maximum $15 million allocation to be contributed to the funds over a three-year period coinciding with the sale of the tax credits or in accordance with the fund's partnership agreement and concurrent with the contributions of the fund's other investors;

(B) Each early stage venture capital fund shall be required to obtain other independent investors. A minimum of 10 percent of the committed capital of the early stage venture capital fund must be committed by independent institutional investors, fund principals, or other accredited investors; and

(C) Each early stage venture capital fund shall be required to commit, via a side letter or otherwise, to invest in Georgia based qualified early stage businesses and qualified growth stage businesses, an amount that matches or exceeds the amount of the fund's designated capital received under this article;

(2) Growth stage venture capital funds: Seventy percent of the total contributed capital in the Georgia Capital Acceleration Fund shall be allocated among the growth stage venture capital funds, in accordance with the following eligibility and requirements:

(A) Each growth stage venture capital fund shall be eligible for a minimum $10 million allocation of designated capital over a three-year period coinciding with the sale of the tax credits or in accordance with the fund's partnership agreement and concurrent with the contributions of the fund's other investors;

(B) Each growth stage venture capital fund shall be required to obtain other independent investors. A minimum of 50 percent of the committed capital of the growth stage venture capital fund must be committed by independent institutional investors, fund principals, or other accredited investors; and

(C) Each growth stage venture capital fund shall be required to commit, via a side letter or otherwise, to invest in Georgia based qualified early stage businesses and qualified growth stage businesses, an amount that matches or exceeds the amount of the fund's designated capital received under this article; and

(3) Program administrator: Up to $25 million of the contributed capital shall be held in reserve by the program administrator for coinvestment in funds as provided pursuant to guidelines developed by the authority.

50-7-98.

(a) Contributed capital committed by a purchaser shall be paid to the authority in three equal yearly installments due on June 1 of 2013, 2014, and 2015.

(b) On receipt of each installment of allotted capital, the authority shall issue to each purchaser a tax credit certificate representing a fully vested credit against state insurance premium tax liability equal to one-third of the total insurance premium tax credits allocated to the purchaser.

(c) The tax credit certificate shall state:

(1) The total amount of insurance premium tax credits that the purchaser may claim;

(2) The amount of capital that the purchaser has contributed in return for the issuance of the tax credit certificate;

(3) The dates on which the insurance premium tax credits will be available for use by the purchaser;

(4) Any penalties or other remedies for noncompliance;

(5) The procedures to be used for transferring the insurance premium tax credits; and

(6) Any other requirements the authority, in consultation with the Department of Revenue, considers necessary.

(d)(1) A tax credit certificate may not be issued to any purchaser that fails to make a contribution of capital within the time the authority specifies.

(2) A purchaser that fails to make a contribution of capital within the time the authority specifies shall be subject to a penalty equal to 10 percent of the amount of contributed capital that remains unpaid, payable to the authority within 30 days after demand by the authority.

(3) The authority, after consultation with the program administrator, may offer to reallocate the defaulted contributed capital amount among the other purchasers, so that the result after reallocation is the same as if the initial allocation had been performed without considering the insurance premium tax credit allocation to the defaulting purchaser.

(4) If the reallocation of contributed capital results in the contribution by another purchaser or purchasers of the amount of capital not contributed by the defaulting purchaser, then the authority, in consultation with the program administrator, may waive the penalty provided under this subsection.

(5)(A) A purchaser that fails to make a contribution of capital within the time specified may avoid the imposition of the penalty by transferring the allocation of insurance premium tax credits to a new or existing purchaser within 30 days after the due date of the defaulted installment.

(B) Any transferee of an allocation of insurance premium tax credits of a defaulting purchaser under this paragraph shall agree to make the required contribution of capital within 30 days after the date of the transfer.

50-7-99.

(a)(1) Subject to the restriction in paragraph (2) of this subsection, a purchaser may claim the insurance premium tax credits on an insurance premium tax return filed after December 31, 2013, for a taxable year that begins on or after January 1, 2014.

(2) In each calendar year from 2014 through 2016, a purchaser may claim up to one-third of the insurance premium tax credits allocated to that purchaser.

(b)(1) The credits to be applied against insurance premium tax liability in any one year may not exceed the insurance premium tax liability of the purchaser for that taxable year.

(2) Any unused credits against insurance premium tax liability may be:

(A) Carried forward indefinitely until the insurance premium tax credits are used; and

(B) Used by the purchaser without restriction during any calendar year after 2016.

(3) On 30 days' advance notice to the authority, insurance premium tax credits allocated to a purchaser under this article may be transferred without further restriction to any other entity that:

(A) Meets the definition of a purchaser; and

(B) Agrees to assume all of the transferor's obligations under this article.

(c) A purchaser claiming a credit against insurance premium tax liability earned through an investment under this article is not required to pay any additional tax as a result of claiming the credit.

(d) A purchaser is not required to reduce the amount of premium tax included by the purchaser in connection with rate making for any insurance contract written in Georgia because of a reduction in the purchaser's insurance premium tax derived from the credit granted under this article.

50-7-100.

A purchaser or an affiliate may not directly or indirectly:

(1) Manage a venture capital fund that receives any designated capital under this article;

(2) Beneficially own, through rights, options, convertible interests, or otherwise, greater than 15 percent of the voting securities or other voting ownership interest of a venture capital fund that receives any allotted capital under this article; or

(3) Control the direction of investments for a venture capital fund that receives any designated capital under this article.

50-7-101.

(a) Not later than December 31 of each year, each venture capital fund shall report to the authority:

(1) The amount of designated capital remaining uninvested at the end of the preceding calendar year;

(2) All qualified investments made during the preceding calendar year, including the number of employees of each business at the time the qualified investment was made and as of December 31 of that year;

(3) For any qualified investment in which the venture capital fund no longer has a position as of the end of the calendar year, the number of employees of the business as of the date the investment was terminated; and

(4) Any other information the authority requires to ascertain the impact of this article on the economy of Georgia.

(b) Not later than 180 days after the end of its fiscal year, each venture capital fund shall provide to the authority an audited financial statement that includes the opinion of an independent certified public accountant.

(c) Not later than 60 days after the sale or other disposition of a qualified investment, the selling venture capital fund shall provide to the authority a report on the amount of the interest sold or disposed of and the consideration received for the sale or disposition.

50-7-102.

Designated capital resulting from the qualified investments made under this article shall be retained and used to make additional qualified investments in venture capital funds selected by the program administrator; provided, however, that the Georgia Capital Acceleration Fund shall receive any and all returns representing the principal portion of designated capital and shall receive 80 percent of investment returns in excess of designated capital from each respective venture capital fund with the remaining 20 percent of investment returns in excess of designated capital retained by each respective venture capital fund in accordance with the fund's partnership agreement.

50-7-103.

(a)(1) On or before January 1, 2014, and January 1 of each subsequent year, the program administrator, through the authority, shall submit a report on the implementation of this article to the Governor, the Lieutenant Governor, the Speaker of the House of Representatives, and the chairpersons of the Senate Finance Committee and the House Ways and Means Committee.

(2) The department shall also publish the report on the department's website in a publicly available format.

(3) The report published on the website shall not include any proprietary or confidential information.

(b) The report shall include:

(1) With respect to each purchaser of insurance premium tax credits:

(A) The name of the purchaser of the insurance premium tax credits;

(B) The amount of insurance premium tax credits allocated to the purchaser;

(C) The amount of designated capital the purchaser contributed for the issuance of the tax credit certificate; and

(D) The amount of any insurance premium tax credits that have been transferred under Code Section 50-7-99;

(2) With respect to each venture capital fund or private equity organization that has received an allocation of designated capital:

(A) The name and address of the venture capital fund or private equity organization;

(B) The names of the individuals making qualified investments under this article;

(C) The amount of designated capital received during the previous year;

(D) The cumulative amount of designated capital received;

(E) The amount of designated capital remaining uninvested at the end of the preceding calendar year;

(F) The names and locations of qualified businesses receiving designated capital and the amount of each qualified investment;

(G) The annual performance of each qualified investment, including the investment's fair market value as calculated according to generally accepted accounting principles; and

(H) The amount of any qualified distribution or nonqualified distribution taken during the prior year, including any management fee;

(3) With respect to the Georgia Capital Acceleration Fund:

(A) The amount of designated capital received during the previous year;

(B) The cumulative amount of designated capital received;

(C) The amount of designated capital remaining uninvested at the end of the preceding calendar year;

(D) The names and locations of qualified businesses receiving designated capital and the amount of each qualified investment; and

(E) The annual performance of each qualified investment, including the investment's fair market value as calculated according to generally accepted accounting principles; and

(4) With respect to the qualified businesses in which venture capital funds have invested:

(A) The classification of the qualified businesses according to the industrial sector and the size of the business;

(B) The total number of jobs created in Georgia by the investment and the average wages paid for the jobs; and

(C) The total number of jobs retained in Georgia as a result of the investment and the average wages paid for the jobs."

SECTION 2.

This Act shall become effective upon its approval by the Governor or upon its becoming law without such approval.

SECTION 3.

All laws and parts of laws in conflict with this Act are repealed.