Amendment ASA2-SB463

SB463-ASA2,14,2 (e) The investment committee's investment of fund capital with any certified venture capital fund is on terms that are substantially equivalent to the terms applicable for other funding sources of the certified venture capital fund for similar investments.

SB463-ASA2,14,8 (f) From any distribution from a certified venture capital fund's investment in a business under this section that includes amounts contributed from the fund, the certified venture capital fund pays to the investment committee an amount equal to 100 percent of the principal amount of fund capital that was contributed from the fund to that investment before the certified venture capital fund makes any payment to a funding source for that investment that is not the fund.

SB463-ASA2,14,13 (g) From any investment of fund capital by a certified venture capital fund under this section, the certified venture capital fund does not pay a fee to itself or to any principal or manager of the certified venture capital fund that equals more than 2 percent of the total amount of fund capital contributed to that investment by the investment committee.

SB463-ASA2,14,17 (h) The certified venture capital fund discloses to the investment committee any interest that it or an owner, stockholder, partner, officer, director, member, employee, or agent of the certified venture capital fund holds in a business in which the certified venture capital fund invests or intends to invest fund capital.

SB463-ASA2,14,20 (i) The certified venture capital fund does not apply the amount of fund capital it receives toward a tax credit under s. 71.07 (5b) or (5d), 71.28 (5b), 71.47 (5b), or 76.638.

SB463-ASA2,14,22 (j) The certified venture capital fund maintains liability insurance in the amounts and for the coverages determined by the investment committee.

SB463-ASA2,15,2 (k) The certified venture capital fund agrees that the investment committee, the corporation, and the state may refer to the certified venture capital fund's name in public announcements or other documents or communications relating to the fund.

SB463-ASA2,15,8 (3) Repayment of fund capital. In addition to any other legal remedies available to the investment committee, if a certified venture capital fund fails to satisfy any of the requirements under sub. (2), the investment committee is entitled to payment from the certified venture capital fund equal to 100 percent of the amount of fund capital the certified venture capital fund received from the investment committee.

SB463-ASA2,15,12 238.435 Angel investor networks. (1) From the appropriation under s. 20.192 (1) (q), and subject to sub. (2), the investment committee may commit up to a total of $5,000,000 to investments proposed to the investment committee by angel investor networks.

SB463-ASA2,15,14 (2) The investment committee may commit fund capital to an investment in a business under this section only if all of the following requirements are satisfied:

SB463-ASA2,15,15 (a) The business is or will be headquartered in this state.

SB463-ASA2,15,17 (b) The angel investor network agrees to invest $2 for every $1 in fund capital that the investment committee commits to the investment.

SB463-ASA2,15,21 (c) The investment committee's profit-sharing agreement with the angel investor network is on terms that are substantially equivalent to the terms applicable for other persons in the angel investor network with respect to the investment.

SB463-ASA2,16,2 238.437 Grants to certified business development organizations. (1) Badger jobs fund grants. From the appropriation under s. 20.192 (1) (q), the investment committee shall make grants to certified business development organizations that total $5,000,000 over the life of the fund for investment in start-up businesses.

SB463-ASA2,16,6 (2) Application. Any person may apply to the investment committee, on a form prescribed by the investment committee, for certification under sub. (3). The application shall include the name, address, and tax identification number of the person and any other information the investment committee requires.

SB463-ASA2,16,13 (3) Certification. The investment committee may certify an applicant who submits an application under sub. (2) to receive a grant under this section if the investment committee determines that the applicant operates a nonprofit or for-profit business incubator, regional economic development partnership, local economic development organization, or non-profit or for-profit entrepreneurial service agency that directly provides one or more of the following services to start-up businesses:

SB463-ASA2,16,17 (a) A facility that offers rent of the facility at a rate lower than the market rate in the community and provides shared administrative services or other assistance designed to reduce the costs and encourage the growth of a start-up business the facility serves.

SB463-ASA2,16,22 (b) As determined by the investment committee, high quality business support that is visible and easily accessible to entrepreneurs and small companies; that offers substantial management services or similar services to portfolio companies; and that integrates sources of deal flow, entrepreneurial support, and capital to effectively grow entrepreneurial commercialization outcomes.

SB463-ASA2,17,2 (4) Contracts. Before the investment committee makes a grant under this section to a certified business development organization, the investment committee shall contract with the certified business development organization, and, in addition to any other terms required by the investment committee, that contract shall include the following requirements:

SB463-ASA2,17,6 (a) The certified business development organization commits to maintaining a significant physical presence in this state, including locating an office in this state that is staffed with at least one full-time employee of the certified business development organization.

SB463-ASA2,17,10 (b) The certified business development organization invests 100 percent of the amount of the grant it receives from the investment committee under this section in a business that meets all of the following conditions at the time the certified business development organization first invests in the business under this paragraph:

SB463-ASA2,17,11 1. The business is headquartered in this state.

SB463-ASA2,17,13 2. The business employs at least 50 percent of its employees, including any subsidiary or other affiliated entity, in this state.

SB463-ASA2,17,17 3. The business agrees to use fund capital only for research and development, the introduction of a new product in the market, the business's entry into a new market, or other activities that are expected to grow the business and create jobs in this state.

SB463-ASA2,17,19 4. The business is not primarily engaged in real estate development or sales, insurance, banking, lending, lobbying, or political consulting.

SB463-ASA2,17,23 5. The business is participating in a business development program that is approved by the investment committee and is operated or approved by the certified business development organization, and the business receives the investment under this paragraph as part of that program.

SB463-ASA2,18,3 (c) 1. When a certified business development organization makes an investment of grant moneys in a business, the certified business development organization at least matches the amount of those grant moneys with an investment of capital in the business that the certified business development organization has raised from other sources.

SB463-ASA2,18,9 2. If an investment of grant moneys subject to subd. 1 is made as part of an existing equity investment portfolio that the certified business development organization already manages and that portfolio has been funded from other sources, the certified business development organization applies those moneys supplied from those other sources for the purpose of satisfying the matching requirement under subd. 1.

SB463-ASA2,18,12 (d) The certified business development organization does not apply the amount of the grant moneys it receives from the investment committee toward a tax credit under s. 71.07 (5b) or (5d), 71.28 (5b), 71.47 (5b), or 76.638.

SB463-ASA2,18,16 238.45 Reporting requirements. (1) Annual report. Annually, the investment committee shall submit to the chief clerk of each house of the legislature, for distribution to the legislature under s. 13.172 (2), and to the governor, a report that includes all of the following:

SB463-ASA2,18,18 (a) An accounting of the financial status of the fund, including the opinion of an independent certified public accountant.

SB463-ASA2,18,19 (b) The investment committee's current investment policy for the fund.

SB463-ASA2,18,21 (c) The investment committee's internal rate of return from its investments of fund capital.

SB463-ASA2,18,24 (d) For each certified venture capital fund in which the investment committee held an investment of fund capital under s. 238.43 during the preceding year, all of the following:

SB463-ASA2,18,25 1. The name and address of the venture capital fund.

SB463-ASA2,19,2 2. The amount of each investment and the amount contributed to the investment by the certified venture capital fund.

SB463-ASA2,19,4 3. The internal rate of return realized by the certified venture capital fund on each investment.

SB463-ASA2,19,7 4. An accounting of any fee the certified venture capital fund paid to itself or any principal or manager of the certified venture capital fund during the preceding year.

SB463-ASA2,19,9 (e) For each business in which a certified venture capital fund held an investment of fund capital during the preceding year, all of the following:

SB463-ASA2,19,10 1. The name and address of the business.

SB463-ASA2,19,11 2. A description of the nature of the business.

SB463-ASA2,19,12 3. The amount of each investment of fund capital in the business.

SB463-ASA2,19,14 4. An identification of the certified venture capital fund that made the investment.

SB463-ASA2,19,19 5. A statement of the number of employees the business employed when the certified venture capital fund first invested in the business, the number of employees the business employed on January 1 of the year preceding the year of the report, and the number of employees the business employed on December 31 of the year preceding the year of the report.

SB463-ASA2,19,21 (f) For each investment of fund capital held by the investment committee in a business under s. 238.435 during the preceding year, all of the following:

SB463-ASA2,19,22 1. The name and address of the business.

SB463-ASA2,19,23 2. A description of the nature of the business.

SB463-ASA2,19,24 3. An identification of the angel investor network.

SB463-ASA2,20,2 4. The amount of the investment and the amount contributed to the investment by the angel investor network.

SB463-ASA2,20,7 5. A statement of the number of employees the business employed when the investment committee first invested in the business, the number of employees the business employed on January 1 of the year preceding the year of the report, and the number of employees the business employed on December 31 of the year preceding the year of the report.

SB463-ASA2,20,8 (g) With respect to grants under s. 238.437, all of the following:

SB463-ASA2,20,10 1. An accounting of the total amount of fund capital the investment committee granted to certified business development organizations during the preceding year.

SB463-ASA2,20,13 2. For each certified business development organization that received a grant from the investment committee during the preceding year, the name and address of the certified business development organization and the amount of the grant.

SB463-ASA2,20,24 3. For each business in which a certified business development organization held an investment of grant moneys during the preceding year, the name and address of the business and a description of the nature of the business and an identification of the certified business development organization that made the investment; the total amount of each investment in the business, including grant moneys and moneys contributed by the certified business development organization or by other funding sources; and a statement of the number of employees the business employed when the certified business development organization first invested grant moneys in the business, the number of employees the business employed on January 1 of the year preceding the year of the report, and the number of employees the business employed on December 31 of the year preceding the year of the report.

SB463-ASA2,21,2 (2) Progress report. In January 2018, the investment committee shall submit a report to the joint committee on finance that includes all of the following:

SB463-ASA2,21,4 (a) A comprehensive assessment of the success to date of the programs administered by the investment committee.

SB463-ASA2,21,8 (b) Any recommendations the investment committee has for improvement of the programs administered by the investment committee and the specific actions the investment committee intends to take or proposes to be taken to implement those recommendations.

SB463-ASA2,21,11 (c) Any recommendations the investment board has for improvement of the programs administered by the investment committee and the specific actions the investment board proposes to be taken to implement those recommendations.

SB463-ASA2,21,17 238.49 Winding up of the investment committee's business. (1) End of business. The secretary of administration shall determine the date that the investment committee satisfies the requirements under sub (2) and shall provide a written notice that states that date to the legislative reference bureau for publication in the Wisconsin Administrative Register. The investment committee may not conduct business of any kind after that date.

SB463-ASA2,21,19 (2) Transfer of assets, property, and contracts. In December 2031, the investment committee shall do all of the following:

SB463-ASA2,21,24 (a) Assign all of the investment committee's assets and any assets of the corporation under this subchapter to the secretary of administration. The secretary of administration shall deposit in the general fund any moneys transferred under this paragraph or generated from contracts or investments assigned to the secretary of administration under par. (c).

SB463-ASA2,22,3 (b) Transfer any tangible personal property owned by the investment committee or owned by the corporation under this subchapter, including records, to the department of administration.

SB463-ASA2,22,7 (c) Assign any contract entered into by the investment committee or entered into by the corporation under this subchapter and any interest in an investment subject to this subchapter that is owned by the investment committee or the corporation to the secretary of administration.

SB463-ASA2,22,8 (End)