(1) (a) There is hereby created as a special purpose authority, as defined in section 24-77-102 (15), the venture capital authority. The authority shall be a body corporate, a political subdivision of the state, and a public instrumentality, and its exercise of the powers conferred by this part 2 shall be deemed and held to be the performance of an essential public function; except that the authority shall not be an agency of state government and shall not be subject to administrative direction by any department, commission, board, or agency of the state. The authority shall constitute an enterprise for the purposes of section 20 of article X of the state constitution so long as it retains the authority to issue revenue bonds and receives less than ten percent of its total annual revenues in grants, as defined in section 24-77-102 (7), from all Colorado state and local governments combined. The authority shall not be a district for purposes of section 20 of article X of the state constitution.

(b)

(I) The governing body of the authority shall be a board of directors consisting of nine members, of whom five shall be appointed by the governor, two shall be appointed by the president of the senate, and two shall be appointed by the speaker of the house of representatives. Board members shall be residents of this state. Board members shall have experience in venture capital, investment banking, institutional investment, fund management, or banking. A board member shall not have a business relationship with a current or proposed fund manager in the previous three years or for at least three years after an allocation of certified capital. Each member shall serve until a successor has been appointed and qualified. Any member shall be eligible for reappointment. The person making the original appointment shall fill any vacancy by appointment for the remainder of an unexpired term.

(II) (A) Subject to sub-subparagraph (B) of this subparagraph (II), the members of the board shall serve four-year terms, expiring on May 5 of each year.

(B) The speaker and the president shall each appoint one member with an initial term of two years and one member with an initial term of three years. Of the members appointed by the governor, two shall have initial terms of one year, two shall have initial terms of two years, and one shall have an initial term of three years.

(c) Any member of the board may be removed by the governor for misfeasance, malfeasance, willful neglect of duty, or other cause, after notice and a public hearing, unless the notice and hearing have been expressly waived in writing.

(d)

(I) The board of directors of the authority shall adopt its own rules of procedure, shall elect a chair and a vice-chair from its membership, and shall keep a record of its proceedings. The authority may hire staff as it deems necessary or convenient to administer this part 2. The Colorado office of economic development and the Colorado economic development commission shall cooperate with the authority in such administration. The authority shall pay the office in advance as agreed upon by the authority and the office for all costs incurred by the office in providing staffing for the authority, including but not limited to the costs of compensation for employees staffing the authority and administration related to such staffing. The office shall credit any payment received from the authority to the venture capital authority staffing fund, which fund is hereby created in the state treasury. The fund is continuously appropriated to the office to pay costs incurred by the office in providing staffing for the authority. Interest and income derived from the deposit and investment of moneys in the fund shall remain in the fund and shall not be transferred to the general fund or any other fund at the end of any fiscal year.

(II) The authority shall meet at least once each quarter. Members shall serve without compensation but shall be entitled to reimbursement for actual and necessary expenses incurred in the performance of their duties.

(2) (a) The authority may, by resolution that meets the requirements of subsection (3) of this section, authorize and issue revenue bonds in an amount not to exceed five million dollars in the aggregate for expenses of the authority. Bonds may be issued only after approval by both houses of the general assembly acting either by bill or joint resolution and after approval by the governor in accordance with section 39 of article V of the state constitution. Bonds shall be payable only from the enterprise fund.

(b) All bonds issued by the authority shall provide that:

(I) No holder of bonds may compel the state or any subdivision thereof to exercise its appropriation or taxing power; and

(II) The bonds do not constitute a debt or financial obligation of the state and are payable only from the net revenues allocated to the authority for expenses as designated in the bonds.

(3) (a) Any resolution authorizing the issuance of bonds under this section shall state:

(I) The date of issuance of the bonds;

(II) A maturity date or dates during a period not to exceed twenty years after the date of issuance of the bonds;

(III) The interest rate or rates on, and the denomination or denominations of, the bonds; and

(IV) The medium of payment of the bonds and the place where the bonds will be paid.

(b) Any resolution authorizing the issuance of bonds under this section may:

(I) State that the bonds are to be issued in one or more series;

(II) State a rank or priority of the bonds; and

(III) Provide for redemption of the bonds prior to maturity, with or without premium.

(4) Any bonds issued pursuant to the terms of this section may be sold at public or private sale. If bonds are to be sold at a public sale, the authority shall advertise the sale in any manner the authority deems appropriate. All bonds issued pursuant to the terms of this section shall be sold at a price not less than the par value thereof, together with all accrued interest up to the date of delivery.

(5) Notwithstanding any provision of law to the contrary, all bonds issued pursuant to this section are negotiable.

(6) (a) A resolution pertaining to issuance of bonds under this section may contain covenants as to:

(I) The purpose to which the proceeds of sale of the bonds may be applied, and the permissible use and disposition thereof;

(II) Such matters as are customary in the issuance of revenue bonds, including, without limitation, the issuance and lien position of other or additional bonds; and

(III) Books of account and the inspection and audit thereof.

(b) Any resolution made pursuant to the terms of this section shall be deemed a contract with the holders of the bonds, and the duties of the authority under the resolution shall be enforceable by any appropriate action in a court having jurisdiction.

(7) Bonds issued under this section and bearing the signatures of the board members of the authority in office on the date of the signing shall be deemed valid and binding obligations regardless of whether, prior to delivery and payment, any or all of the persons whose signatures appear thereon have ceased to be members of the board.

(8) (a) Except as otherwise provided in the resolution authorizing the bonds, all bonds of the same issue under this section shall have a prior and paramount lien on the net revenues pledged therefor. The authority may provide for preferential security for any bonds, both principal and interest, to be issued under this section to the extent deemed feasible and desirable by the authority over any bonds that may be issued thereafter.

(b) Bonds of the same issue or series issued under this section shall be equally and ratably secured, without priority by reason of number, date, sale, execution, or delivery, by a lien on the net revenue pledged in accordance with the terms of the resolution authorizing the bonds.

(9) The authority may accept grants from any source and shall deposit the grants in the enterprise fund, which fund is hereby created in the authority. The enterprise fund shall be a revolving fund administered by the authority as a government-owned business that provides oversight concerning the investment of revenues in the enterprise fund pursuant to this part 2. Revenues earned on the investment or deposit of moneys in the enterprise fund shall be credited to the enterprise fund.

(10) (a) The authority shall utilize the enterprise fund:

(I) As a revolving, evergreen fund to provide continued seed and early-stage investment capital to qualified businesses and qualified rural businesses, and for this purpose the authority shall transfer revenues in the fund to one or more venture capital funds for the purpose of enabling a fund manager to make qualified investments; and

(II) For its direct and indirect expenses in administering this part 2, including repayment of revenue bonds and payment for costs of staffing the authority paid to the Colorado office of economic development pursuant to subparagraph (I) of paragraph (d) of subsection (1) of this section.

(b) The authority shall deposit revenues from the following sources in the enterprise fund:

(I) Distributions of an amount equal to one hundred percent of certified capital prior to the distribution of any remaining proceeds;

(II) Distributions of all remaining proceeds according to the authority's contract with each fund manager;

(III) Fees; and

(IV) Assessed penalties.