(1) The office shall establish by rule the procedures for making an application to become a certified capital company.

(2) An applicant shall:

(a) File an application with the office;

(b) Pay a nonrefundable application fee of seven thousand five hundred dollars at the time of filing the application;

(c) Have an equity capitalization at the time of seeking certification of five hundred thousand dollars or more in the form of unencumbered cash, marketable securities, or other liquid assets. The applicant shall submit as part of its application an audited balance sheet that contains an unqualified opinion of an independent certified public accountant issued not more than thirty-five days before the application date that states whether the applicant satisfies this equity capitalization requirement.

(d) Have at least two principals or at least two persons employed to manage the funds who each have at least two years of money management experience in the venture capital industry; except that an applicant that seeks to be certified with respect to premium tax credits to be allocated pursuant to section 10-3.5-106 (2)(a)(I) need only have at least two principals or at least two persons employed to manage the funds who each have at least two years of experience in either the venture capital or investment banking industry.

(3) The office shall verify whether the applicant meets the requirements of subsection (2) of this section.

(4) Any offering material involving the sale of securities of the certified capital company shall include the following statement:

By authorizing the formation of a certified capital company, the state does not

necessarily endorse the quality of management or the potential for earnings of

such company and is not liable for damages or losses to a certified investor in

the company. Use of the word "certified" in an offering does not constitute a recommendation or endorsement of the investment by the Colorado office of economic development. If any applicable provisions of the "Certified Capital Company Act" are violated, the state may require forfeiture of unused premium tax credits and repayment of used premium tax credits.

(5) The office shall stamp applications for certification with the date and time of receipt. Within thirty days after receipt of an application, the office shall issue the certification or refuse the certification and communicate in detail to the applicant the grounds for the refusal, including suggestions for the removal of such grounds. The office shall review and approve or reject applications in the order submitted, treating all applications received on the same day as being received simultaneously; except that an application that is incomplete or for which additional information is requested by the office shall be treated as having been received on the date originally submitted only if the applicant submits the additional information within fifteen days after the office's request. The deadline for review may be extended by the office an additional ten days. The certification issued by the office shall indicate whether the certification is applicable only to credits to be allocated pursuant to section 10-3.5-106 (2)(a)(I).

(6) (a) No insurance company or affiliate of an insurance company shall, directly or indirectly:

(I) Beneficially own, whether through rights, options, convertible interests, or otherwise, fifteen percent or more of the voting securities or other voting ownership interests of a certified capital company;

(II) Manage a certified capital company; or

(III) Control the direction of investments for a certified capital company.

(b) A certified capital company may obtain a guaranty, indemnity, bond, insurance policy, or other payment undertaking for the benefit of its certified investors from any entity; except that in no case shall more than one certified investor of such certified capital company or affiliate of such certified investor be entitled to provide such guaranty, indemnity, bond, insurance policy, or other payment undertaking in favor of the certified investors of the certified capital company and its affiliates in this state.

(c) This subsection (6) shall not preclude a certified investor, insurance company, or other party from exercising its legal rights and remedies, including, without limitation, interim management of a certified capital company, in the event that a certified capital company is in default of its statutory obligations or its contractual obligations to such certified investor, insurance company, or other party.