Code of the District of Columbia

§ 31–5232. Certification.

(a) The Commissioner shall begin accepting applications for certification as a Certified Capital Company not later than 150 days after March 10, 2004. An applicant for certification as a Certified Capital Company shall pay a nonrefundable application fee of $15,000 at the time of filing the application with the Commissioner. The Commissioner shall establish by rule or regulation the procedures for making an application for certification as a Certified Capital Company.

(b) From the time of the application to the time of allocation of Premium Tax Credits, the applicant shall have equity capitalization of at least $500,000 that must be in the form of unencumbered cash, marketable securities, or other liquid assets.

(c) The Commissioner shall review the organizational documents of each applicant for certification and the business history of the applicant and shall determine whether the applicant’s cash, marketable securities, and other liquid assets meet the requirements of subsection (b) of this section. As part of its application, each applicant shall submit to the Commissioner its balance sheet, audited with an unqualified opinion of an independent certified public accountants, that is dated no earlier than 35 days prior to the date the application is filed under subsection (a) of this section.

(d) The applicant shall certify that the Certified Capital Company does or will, following certification, maintain its principal office within the District and shall commit to maintain a set of its books, records, files, and any other information required by the Commissioner as a condition of certification or as required by rule or regulation.

(e) The Commissioner shall verify that at least 2 principals of the Certified Capital Company or at least 2 persons employed or engaged to manage the funds of the Certified Capital Company each have 3 or more years of experience in the venture capital industry.

(f) 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 District of Columbia does not necessarily endorse the quality of management or the potential for earnings of such company and is not liable for any damages or losses to any investor in the company. Use of the word ‘certified’ in any offering material does not constitute a recommendation or endorsement of the investment by the District of Columbia, its officers, employees, or agents. Upon a violation of the Certified Capital Companies Act of 2003 [Chapter 52A of Title 31 of the D.C. Official Code, § 31-5231 et seq.], the District of Columbia may require forfeiture of unused Premium Tax Credits and repayment of used Premium Tax Credits.”

(g) Within 30 days of receipt of a complete application, the Commissioner shall issue the certification or shall provide the applicant with notice of the disapproval of the certification that shall communicate in detail to the applicant the grounds for the refusal, including suggestions for curing any defects in the application. If an applicant submits an amended application within 15 days of receipt of refusal by the Commissioner, the Commissioner shall have 15 days from the receipt of the complete amended application by which to communicate its approval or refusal of the amended application to the applicant. The Commissioner shall review and approve or reject applications in the order complete applications are received.

(h) No insurance company or any Affiliate of an insurance company shall, directly or indirectly, own (whether through rights, options, convertible interests, or otherwise) 15% or more of the voting equity interests, or other voting ownership interests of or manage a Certified Capital Company or control the direction of investments for a Certified Capital Company. This provision shall not preclude a Certified Investor, insurance company, or any other person from exercising its legal rights and remedies (which may include interim management of a Certified Capital Company): (1) if a Certified Capital Company is in default of its statutory obligations or its contractual obligations to the Certified Investor, insurance company, or other person; or (2) otherwise insure that the Certified Capital Company satisfies the requirements of § 31-5235. Nothing in this section shall limit an insurance company’s ownership of nonvoting equity securities or other nonvoting ownership interests of the Certified Capital Company.


(Mar. 10, 2004, D.C. Law 15-87, § 3, 50 DCR 10982.)

Section References

This section is referenced in § 31-5234.