Section 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.2004, April 1, P.L. 163, No. 22, § 1, imd. effective.