2012 Pennsylvania Consolidated Statutes
Title 64 - PUBLIC AUTHORITIES AND QUASI-PUBLIC CORPORATIONS
Chapter 15 - Commonwealth Financing Authority
Section 1554 - New Pennsylvania Venture Guarantee Program

     § 1554.  New Pennsylvania Venture Guarantee Program.
        (a)  Establishment.--There is established a program to be
     known as the New Pennsylvania Venture Guarantee Program. The
     program shall provide guarantees to venture capital partnerships
     for investments in Pennsylvania-related companies which are in
     the early stage or mid-stage of development.
        (b)  Guarantee applications.--A venture capital partnership
     may submit an application to the authority requesting a
     guarantee of investments of principal to be made in
     Pennsylvania-related companies. The application shall be on the
     form prescribed by the board and shall include or demonstrate
     all of the following:
            (1)  The applicant's name and address and the address of
        all of the applicant's offices located in Pennsylvania.
            (2)  The resumes of the individuals responsible for the
        investment decisions of the applicant.
            (3)  A history of the applicant's development,
        operations, accomplishments and historical investment
        returns, including past performance of principals and
        partners and the applicant's history of investments in
        Pennsylvania-related companies.
            (4)  The applicant's business plan, which may be a
        private placement memorandum pursuant to 17 CFR §§ 230.501
        through 230.508 (relating to Regulation D--rules governing
        the limited offer and sale of securities without registration
        under the Securities Act of 1933).
            (5)  A description of the intended industry sectors and
        stage of investment in which the applicant will invest and
        the anticipated amount of investment to be made in
        Pennsylvania-related companies.
            (6)  A statement of any recent changes in the principals
        or partners of the applicant.
            (7)  A statement of the fees or other payment proposed to
        be paid to the authority by the applicant as consideration
        for the issuance of a guarantee.
            (8)  Any other information required by the board.
        (c)  Application review.--The board shall review the
     application to determine all of the following:
            (1)  That the managing partner of the applicant has
        managed one or more venture capital partnerships which have
        performance rankings in the top quartile nationwide when
        compared to other venture capital partnerships with similar
        investments made over the same period of time.
            (2)  That the applicant will invest at least $15,000,000
        in Pennsylvania-related companies.
            (3)  That the applicant will agree to notify the board of
        all advisory, valuation and annual meetings of the applicant
        for the duration of the guarantee and will permit a
        representative of the board to attend such meetings. The
        board may request that the applicant provide reimbursement
        for reasonable travel expenses if meetings are held outside
        of the Commonwealth or that a board representative be able to
        participate in meetings by acceptable telecommunication
        means.
            (4)  That the applicant has or will open an office in
        Pennsylvania staffed with at least one senior-level partner
        and will maintain the office for the duration of the
        guarantee.
            (5)  That the applicant will provide the board with its
        annual financial statements, audited by a nationally
        recognized independent certified public accountant, for the
        duration of the guarantee. Financial statements shall be
        prepared in accordance with generally accepted accounting
        principles.
            (6)  That the board will have the ability to determine
        that the subject of a proposed investment to be covered by
        the guarantee is a Pennsylvania-related company acceptable to
        the board prior to the applicant making an investment in the
        company.
            (7)  That the applicant has complied with all other
        requirements established by the board.
        (d)  Approval of guarantee.--Upon being satisfied that all
     requirements have been met, the board may approve the
     application, and, if approved, the authority shall execute a
     guarantee agreement in favor of the applicant. In addition to
     any other terms and conditions required by the board, the
     guarantee agreement shall provide for all of the following:
            (1)  The procedure for the submission of a claim for
        payment under the guarantee agreement. A venture capital
        partnership will be required to have an audit performed by a
        nationally recognized independent certified public accounting
        firm prior to notifying the board that it is making a claim
        under the guarantee. No claim may be made prior to the
        completion of the seventh year following the first investment
        by the applicant in a Pennsylvania-related company which is
        covered by the guarantee.
            (2)  A provision that the guarantee will cover the first
        loss of the aggregate amount of principal invested in
        Pennsylvania-related companies covered by the guarantee.
            (3)  A procedure and schedule for the periodic
        reconciliation of amounts payable under the guarantee.
            (4)  A requirement that any increase in the valuation of
        investments in Pennsylvania-related companies covered by the
        guarantee subsequent to the payment of a claim by the
        authority will result in a portion of the payment being
        returned to the authority.
            (5)  A procedure for an expeditious process for the board
        to determine that proposed investments to be covered by the
        guarantee will be made to Pennsylvania-related companies
        acceptable to the board.
            (6)  A prohibition against the transfer of the benefits
        of the guarantee to another person without the prior approval
        of the board.
        (e)  Limitations.--
            (1)  The liability of the authority for any guarantee
        approved under this section shall be limited to the approved
        amount of that guarantee.
            (2)  A  guarantee approved by the board shall not exceed
        50% of the total investments made in Pennsylvania-related
        companies covered by the guarantee or $37,500,000, whichever
        is less.
            (3)  The board may approve one or more guarantees not to
        exceed $50,000,000 in the aggregate for venture capital
        partnerships in which the State Employees' Retirement System
        or the Public School Employees' Retirement System is a
        limited partner.
            (4)  Applications for guarantees may be accepted until
        July 1, 2007, or until the aggregate of approved guarantees
        equals $250,000,000, whichever occurs first.

        Cross References.  Section 1554 is referred to in section
     1543 of this title.