Oklahoma 2023 Regular Session

Oklahoma Senate Bill SB209 Compare Versions

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3		-	SB209 HFLR Page 1
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	3	+	ENGR. S. B. NO. 209 Page 1 1
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28		-
29		-	HOUSE OF REPRESENTATIVES - FLOOR VERSION
30		-
31		-	STATE OF OKLAHOMA
32		-
33		-	1st Session of the 59th Legislature (2023)
34	27
35	28		ENGROSSED SENATE
36	29		BILL NO. 209 By: Bergstrom of the Senate
37	30
38	31		and
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40	33		Kendrix of the House
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45	38		An Act relating to capital investments of the
46	39		Oklahoma Center for the Advancement of Science and
47	40		Technology; amending 74 O.S. 2021, Section 50 60.21,
48	41		which relates to the Seed-Capital Revolving Fund;
49	42		requiring certain data reporting to be in cluded in
50	43		certain binding commitments; providing certain
51	44		exception; updating statutory language; and providing
52	45		an effective date.
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57	50		BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
58	51		SECTION 1. AMENDATORY 74 O.S. 2021, Section 5060.21, is
59	52		amended to read as follows:
60	53		Section 5060.21. A. There is hereby created in the State
61	54		Treasury a revolving fund for the Oklahoma Center for the
62	55		Advancement of Science and Technology to be designated the “Seed-
63	56		Capital Revolving Fund ”. The fund shall be a continuing fund, not
64	57		subject to fiscal year limitations. The fund shall consist of all
65	58		monies authorized by law for deposit in the fund including but not
66	59		limited to gifts, grants, priv ate donations, and funds by government
	60	+	entities authorized to provide funding for the purposes authorized
	61	+	for use of the fund and with payments on loan s made from the fund,
	62	+	rents, dividends paid on shares of stock purchased with monies from
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68		-	SB209 HFLR Page 2
69		-	BOLD FACE denotes Committee Amendments. 1
	64	+	ENGR. S. B. NO. 209 Page 2 1
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94		-	entities authorized to provide funding for the purposes authorized
95		-	for use of the fund and with payments on loan s made from the fund,
96		-	rents, dividends paid on shares of stock purchased with monies from
97	89		the fund, royalty proceeds, or any other form of return on
98	90		authorized investments made by the Center. All monies accruing to
99	91		the credit of said the fund are hereby appro priated and may be
100	92		budgeted and expended by the Oklahoma Center for the Advancement of
101	93		Science and Technology for use as seed -capital for enterprises and
102	94		for the purposes set forth in this section, and shall not be used
103	95		for administrative, management, or o perating expenses of the Center.
104	96		Expenditures from said the fund shall be made upon warrants issued
105	97		by the State Treasurer against cla ims filed as prescribed by law
106	98		with the Director of the Office of Management and Enterprise
107	99		Services for approval and payment .
108	100		B. The Seed-Capital Revolving Fund shall be managed consistent
109	101		with the long-term goal that revenues e arned from investment of t he
110	102		fund be used to cover administrative costs of the fund. The Center
111	103		may contract with the Commercialization Center or anot her entity to
112	104		manage the Seed-Capital Revolving Fund and to carry out the
113	105		activities set forth in this se ction.
114	106		C. The Center may use the Seed-Capital Revolving Fund to
115	107		provide seed-capital to enterprises and to carry out the purposes of
116	108		the Oklahoma Science and Technology Research and Developm ent Act
117	109		through authorized investments, including:
	110	+	1. Loans, loans convertible to equity, and equity;
	111	+	2. Leaseholds;
	112	+	3. Management or consultant service agreements;
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119		-	SB209 HFLR Page 3
120		-	BOLD FACE denotes Committee Amendments. 1
	114	+	ENGR. S. B. NO. 209 Page 3 1
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145		-	1. Loans, loans convertible to equity, and equity;
146		-	2. Leaseholds;
147		-	3. Management or consultant service agreements;
148	139		4. Loans with stock subscription or similar war rants that are
149	140		beneficially owned by the Center;
150	141		5. Loans with stock subscription or similar warrants th at are
151	142		beneficially owned by a party other than the Center;
152	143		6. Any other contractual arrangement in which the Center is
153	144		providing scientific and techn ological services to any federal,
154	145		state, county, or municipal agency, or to any individual,
155	146		corporation, enterprise, association , or any other entity involving
156	147		science and technology. The Center, in connection with the
157	148		provision of any form of financial a ssistance, may enter into
158	149		royalty agreements with an enterprise;
159	150		7. Participation as a general or limite d partner in other seed -
160	151		capital funds or participation as a limited partner in individual
161	152		cases as authorized by the board of directors;
162	153		8. Royalty or other interests in patents, licenses, t rade
163	154		secrets, or other technology; and
164	155		9. All other seed-capital investments and qualified s ecurities
165	156		as defined in the Oklahoma Science and Technology Research and
166	157		Development Act.
167	158		D. The Center may use the Seed -Capital Revolving Fund to
168	159		purchase qualified securities issued by enterprises engaged in new
	160	+	product or process innovations subject to the conditions set forth
	161	+	in this section.
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170		-	SB209 HFLR Page 4
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	163	+	ENGR. S. B. NO. 209 Page 4 1
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196		-	product or process innovations subject to the conditions set forth
197		-	in this section.
198	188		E. The Center may use the Seed -Capital Revolving Fund to make
199	189		loans for business incubator facilities in exchange for i nterests in
200	190		the enterprises.
201	191		F. The Center shall make authorized seed-capital investments in
202	192		enterprises engaged in new product or process innovations only
203	193		after:
204	194		1. Receipt of an application from the enterprise wh ich
205	195		contains:
206	196		a. a business plan includi ng a description of the
207	197		enterprise and its management, product , and market,
208	198		b. a statement of the amount, timing, and projected use
209	199		of the capital required,
210	200		c. a statement of the potential economic impact of the
211	201		enterprise, including the number, location, and types
212	202		of jobs expected to be created, and
213	203		d. such other information as the Center board of
214	204		directors shall request; and
215	205		2. Approval of the investment by the Center. Such approval may
216	206		be made after the board of directors finds, based upon the
217	207		application submitted by the enterprise and such additional
218	208		investigation as the staff of the Center sha ll make and incorporate
219	209		in its minutes, or based on the recommendation of the fund manager,
	210	+	if the Center contracts with the Commercialization Center or another
	211	+	entity to manage the Seed-Capital Revolving Fund, that:
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221		-	SB209 HFLR Page 5
222		-	BOLD FACE denotes Committee Amendments. 1
	213	+	ENGR. S. B. NO. 209 Page 5 1
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247		-	if the Center contracts with the Commercialization Center or another
248		-	entity to manage the Seed-Capital Revolving Fund, that:
249	238		a. the proceeds of the investment or fi nancial assistance
250	239		will be used only to cover the seed -capital needs of
251	240		the enterprise except as authorized by this sect ion,
252	241		b. the enterprise has a reasonable chance of success,
253	242		c. the Center’s participation is instrumental to the
254	243		success of the enterpris e and will assist in its
255	244		retention within the state,
256	245		d. the Center’s investment is leveraged by at least one
257	246		additional equity or near-equity investor,
258	247		e. the enterprise has the reasonable potential to enhance
259	248		employment opportunities within the state,
260	249		f. the entrepreneur and other founders of the enterprise
261	250		have already made or are contractually committed to
262	251		make an appropriate financial and time commitment to
263	252		the enterprise,
264	253		g. any securities to be purchased are qualified
265	254		securities,
266	255		h. there is a reasonable possibility that the Center will
267	256		recoup at least its initial investment or financial
268	257		commitment, and
269	258		i. binding commitments have been made to the Center by
270	259		the enterprise for adequate reporting of financial
	260	+	data to the Center, which shall include a req uirement
	261	+	for an annual report, or if required by the board, an
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272		-	SB209 HFLR Page 6
273		-	BOLD FACE denotes Committee Amendments. 1
	263	+	ENGR. S. B. NO. 209 Page 6 1
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298		-	data to the Center, which shall include a req uirement
299		-	for an annual report, or if required by the board, an
300	288		annual audit of the financial and operational records
301	289		of the enterprise, and for such control on the part of
302	290		the Center as the board of directors shall consider
303	291		prudent over the management of t he enterprise, so as
304	292		to protect the investment or financial commitment of
305	293		the Center, including in the discretion of the board
306	294		and without limitation, right of access to financial
307	295		and other records of the enterprise, and memb ership or
308	296		representation on the board of directors of the
309	297		enterprise. The binding commitments made pursuant to
310	298		this subparagraph for adequate reporting of financial
311	299		data shall include data that exhibit the growth rate
312	300		of employment, wages, revenues, and a provided measure
313	301		of profitability reported consistently among the
314	302		enterprises. The growth rates shall be reported both
315	303		on an annual basis and to reflect the growth that has
316	304		occurred since investments were made pursuant to this
317	305		section. The Oklahoma Tax Commission shall
318	306		collaborate with the Center for the reporting of
319	307		financial data. The Center may provide an exception
320	308		to the commitment required pursuant to this
321	309		subparagraph for certain circumstanc es that make the
	310	+	providing of data unfeasible, including but not
	311	+	limited to the death of own ers or management,
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323		-	SB209 HFLR Page 7
324		-	BOLD FACE denotes Committee Amendments. 1
	313	+	ENGR. S. B. NO. 209 Page 7 1
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349		-	providing of data unfeasible, including but not
350		-	limited to the death of own ers or management,
351	338		dissolution of the enterprise, or abandonment of
352	339		projects.
353	340		G. The board of directors shall create an investment committee
354	341		to assist in evaluatin g potential investments in qualified
355	342		securities and provision of other forms of authorized f inancial
356	343		assistance. The membership of this investment committee shall serve
357	344		at the pleasure of the board and shall con sist of:
358	345		1. No more than two members of the board of directors, neither
359	346		of whom serves on any a dvisory committee to the Center; and
360	347		2. Persons drawn from sources other than the Center who meet
361	348		standards similar to those applying t o the board of directors and
362	349		who are recognized by their peers for o utstanding knowledge and
363	350		leadership in their fields, all of whom shall serve at the pleasure
364	351		of the board.
365	352		H. The Center shall not make investments in qualified
366	353		securities issued by enter prises in excess of the amount necessary
367	354		to own more than forty -nine percent (49%) of qualified securities in
368	355		any one enterprise at the time such securities are purchased by the
369	356		Center, after giving effect to the conversion of all outstanding
370	357		convertible qualified securities of t he enterprise; however, in the
371	358		event of severe financial difficulty of the enterprise, threateni ng,
372	359		in the judgment of the board of dire ctors, the investment of the
	360	+	Center therein, a greater percentage of such securities may be owne d
	361	+	by the Center.
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374		-	SB209 HFLR Page 8
375		-	BOLD FACE denotes Committee Amendments. 1
	363	+	ENGR. S. B. NO. 209 Page 8 1
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400		-	Center therein, a greater percentage of such securities ma y be owned
401		-	by the Center.
402	388		SECTION 2. This act shall become e ffective November 1, 2023.
	389	+	Passed the Senate the 9th day of March, 2023.
403	390
404		-	COMMITTEE REPORT BY: COMMITTEE ON RULES, dated 04/11/2023 - DO PASS.
	391	+
	392	+
	393	+	Presiding Officer of the Senate
	394	+
	395	+
	396	+	Passed the House of Representatives the ____ day of __________,
	397	+	2023.
	398	+
	399	+
	400	+
	401	+	Presiding Officer of the House
	402	+	of Representatives
	403	+