90-10-305. Designated investor group duties -- contract with board. (1) The designated investor group shall organize, capitalize, and administer the Montana equity fund and a Montana evergreen fund pursuant to its contract with the board.
     (2) The contract between the board and the designated investor group must contain the following language as part of the designated investor group's implementation plan regarding investments in the Montana equity fund: "For every $1 invested by the Montana equity fund in its aggregate portfolio of fund investments, the designated investor group shall seek to cause a minimum of $1 of equity capital or near-equity capital to be invested in Montana businesses or projects or primary sector businesses, as defined in 39-11-103, that are headquartered in Montana or have at least 50% of gross sales receipts from products principally produced in Montana or services provided from a Montana location".
     (3) The contract between the board and the designated investor group must identify those investments recognized by the designated investor group as meeting the purposes of subsection (2) regarding investments made in Montana businesses or projects or primary sector businesses.
     (4) The designated investor group may receive fees for services. Fees paid to the designated investor group may not be used for lobbying, governmental relations, litigation of the contract with the board, or penalty payments to the state.
     (5) A contract between the designated investor group and the board must include:
     (a) terms under which the designated investor group or fund partners will share with the state any proceeds;
     (b) the term of the contract, which may exceed 7 years, and the effective date of the contract terms;
     (c) provisions for investing as described in subsection (2) and allocating the proceeds; and
     (d) the timing of distributions.
     (6) (a) Proceeds must be reinvested until the Montana equity fund has invested or reserved for investment $60 million in seed and venture capital partnerships or entities.
     (b) Subject to subsection (8), when the condition in subsection (6)(a) is met, distribution of 75% of the proceeds must be made to the Montana evergreen fund and the remainder must be made to the state general fund. When the Montana evergreen fund has invested or reserved for investment $60 million, distribution of all the proceeds must be made to the state general fund.
     (7) The contract must include provisions for the transfer of all investments in the Montana equity fund and the Montana evergreen fund to a new designated investor group upon termination of a contract.
     (8) The contract must contain a termination clause for the Montana equity fund and the Montana evergreen fund providing for the liquidation of investments in both funds 50 years after organization of the Montana equity fund. At termination, the proceeds from both funds must be deposited in the general fund.
     (9) The designated investor group shall submit to the board for review the contract between the designated investor group and investors.

     History: En. Sec. 10, Ch. 537, L. 2005.