 Senate Bill 107 would authorize the state treasurer to invest up
to 2 percent of the state's portfolio into venture capital funds,
which then would invest money into Illinois-based technology
companies.Similar legislation has been introduced in the past and
failed to gain enough support from lawmakers. But now, the state's
treasurer is pushing to get the new plan approved.
"It is actually legislation that we've been trying to get passed
for the past three years, and we're thrilled that Treasurer (Dan)
Rutherford has come out so strongly in support of it," said Maura
O'Hara, executive director of the Illinois Venture Capital
Association, which represents about 120 venture capital and private
equity firms.
The treasurer's office invests the state's roughly $10 billion in
funds. The treasurer currently is allowed to allocate up to 1
percent of its portfolio into technology investment. The treasurer's
office estimates at least 1,200 jobs were created from the $75
million used for technology development since 2004.
Rutherford said he is looking to double the amount under the new
proposal pending approval in the state Senate. The plan would create
a second account dedicated to technology developments and would not
affect the existing account.
The treasurer is responsible for investing the state's money "in
the most secure way possible for the highest returns possible,"
Rutherford said after a Senate committee this week.
"The entire market was down to the extent that the state's
investment portfolio was lower, but we made more money off of the
venture fund than we did in the general investment portfolio,"
Rutherford said. "We are very risk-adverse as the treasurer, but we
are also looking to have the best return that we can."
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About seven Illinois Venture Capital Association member firms
benefited from the state's investment, according to O'Hara. The new
legislation would continue to help small venture capital firms,
which have a tough time attracting large investors, she said.
"It makes sure they have enough money to invest in some of the
great companies in the great state of Illinois," O'Hara said. "But
it also signals to people who might invest in them that in their
home state they are viewed as a success."
State Sen. Dan Kotowski, D-Park Ridge, who is chief sponsor of
the legislation, said it is an opportunity to create technology jobs
and to invest in Illinois companies, "all without raising a single
tax."
"This has been successful. We've had half a billion in
investments in the state of Illinois, made sure that several
thousand jobs were created," Kotowski said. "A lot of Illinois
companies have grown as a result of this, and this is a way to build
on that success."
The legislation passed a Senate committee unanimously and awaits
action from lawmakers in the state Senate.
[Illinois
Statehouse News; By DIANE S.W. LEE]
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