SF 1729

1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am

A bill for an act
relating to the State Board of Investment; authorizing
venture capital investments using the environmental
and natural resources trust fund; classifying data
related to certain venture capital investments;
amending Minnesota Statutes 2004, sections 11A.24,
subdivision 6; 13.635, by adding a subdivision;
proposing coding for new law in Minnesota Statutes,
chapter 116P.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2004, section 11A.24,
subdivision 6, is amended to read:

Subd. 6.

Other investments.

(a) In addition to the
investments authorized in subdivisions 1 to 5, and subject to
the provisions in paragraph (b), the state board may invest
funds in:

(1) venture capital investment businesses through
participation in limited partnerships, trusts, private
placements, limited liability corporations, limited liability
companies, limited liability partnerships, and corporations;

(2) real estate ownership interests or loans secured by
mortgages or deeds of trust or shares of real estate investment
trusts through investment in limited partnerships, bank
sponsored collective funds, trusts, mortgage participation
agreements, and insurance company commingled accounts, including
separate accounts;

(3) regional and mutual funds through bank sponsored
collective funds and open-end investment companies registered
under the Federal Investment Company Act of 1940, and closed-end
mutual funds listed on an exchange regulated by a governmental
agency;

(4) resource investments through limited partnerships,
trusts, private placements, limited liability corporations,
limited liability companies, limited liability partnerships, and
corporations; and

(5) international securities.

(b) The investments authorized in paragraph (a) must
conform to the following provisions:

(1) the aggregate value of all investments made according
to paragraph (a), clauses (1) to (4), may not exceed 35 percent
of the market value of the fund for which the state board is
investing;

(2) there must be at least four unrelated owners of the
investment other than the state board for investments made under
paragraph (a), clause (1), (2), (3), or (4);

(3) state board participation in an investment vehicle is
limited to 20 percent thereof for investments made under
paragraph (a), clause (1), (2), (3), or (4); and

(4) state board participation in a limited partnership does
not include a general partnership interest or other interest
involving general liability. The state board may not engage in
any activity as a limited partner which creates general
liability.

new text begin (c) All financial, business, or proprietary data collected,
created, received, or maintained by the state board in
connection with investments authorized by paragraph (a), clause
(1), (2), or (4), are nonpublic data under section 13.02,
subdivision 9. As used in this paragraph, "financial, business,
or proprietary data" means data, as determined by the
responsible authority for the state board, that is of a
financial, business, or proprietary nature, the release of which
could cause competitive harm to the state board, the legal
entity in which the state board has invested or has considered
an investment, the managing entity of an investment, or a
portfolio company in which the legal entity holds an interest.
Regardless of whether they could be considered financial,
business, or proprietary data, the following data received,
prepared, used, or retained by the state board in connection
with investments authorized by paragraph (a), clause (1), (2),
or (4), are public at all times:
new text end

new text begin (1) the name and industry group classification of the legal
entity in which the state board has invested or in which the
state board has considered an investment;
new text end

new text begin (2) the state board commitment amount, if any;
new text end

new text begin (3) the funded amount of the state board's commitment to
date, if any;
new text end

new text begin (4) the market value of the investment by the state board;
new text end

new text begin (5) the state board's internal rate of return for the
investment, including expenditures and receipts used in the
calculation of the investment's internal rate of return; and
new text end

new text begin (6) the age of the investment in years.
new text end

Sec. 2.

Minnesota Statutes 2004, section 13.635, is
amended by adding a subdivision to read:

new text begin Subd. 1a. new text end

new text begin State board of investment. new text end

new text begin Certain government
data of the State Board of Investment related to investments are
classified under section 11A.24, subdivision 6.
new text end

Sec. 3.

new text begin [116P.081] MINNESOTA EARLY STAGE VENTURE CAPITAL
INVESTMENTS.
new text end

new text begin (a) For purposes of this section, "Minnesota early stage
company" means an early stage company with its headquarters and
principal place of business located in this state.
new text end

new text begin (b) Until June 30, 2019, the State Board of Investment must
invest at least $25,000,000 of the principal of the Minnesota
environmental and natural resources trust fund in early stage
venture capital investments, subject to the following conditions:
new text end

new text begin (1) the board may not make initial investments of more than
a total of $50,000,000 under this section;
new text end

new text begin (2) each separate investment vehicle must commit 50 percent
or more of its assets to investments in Minnesota early stage
companies;
new text end

new text begin (3) the board's investment may not exceed 50 percent of the
total investment in an investment vehicle;
new text end

new text begin (4) no new investment vehicles may be purchased after June
30, 2008; and
new text end

new text begin (5) the board may reinvest returns from investments made
under this section.
new text end

new text begin The board may set evaluation criteria for investment
vehicles and fund managers of investments under this section
different from those it uses for other investments.
new text end

new text begin (c) This section expires August 1, 2019.
new text end

Sec. 4. new text begin EFFECTIVE DATE.
new text end

new text begin This act is effective the day following final enactment.
new text end