2. Commit at least one-half of those moneys to investments in businesses
within 24 months after the venture capital fund receives the moneys and commit all
of the moneys to investments in businesses within 48 months.
3. Invest all of those moneys in businesses in the agriculture, information
technology, engineered products, advanced manufacturing, or medical devices and
imaging industries and attempt to ensure that those moneys are invested in
businesses that are diverse with respect to geographic location within Wisconsin.
4. At least match the amount of the moneys the investment manager
contributes to an investment in a business with an investment of moneys in that
business that the venture capital fund has raised from other funding sources. The
substitute amendment also requires the investment manager to ensure that, on
average, a venture capital fund invests $2 in a business for every $1 the investment
manager contributes to the investment in that business.
5. Provide to the investment manager the information necessary for the
investment manager to make its reports to DOA, described below.
6. Disclose to the investment manager and to DOA any interest that the
venture capital fund or one of its owners or other representatives or agents holds in
a business in which the venture capital fund invests or intends to invest moneys
under the program.
Similarly, the substitute amendment requires the investment manager to
disclose to DOA any interest that it or an owner or other representative or agent of

the investment manager holds in a venture capital fund that receives moneys under
the program or a business in which a venture capital fund invests such moneys. Also,
the investment manager's profit-sharing agreement with a venture capital fund
under the program must be on terms that are substantially equivalent to the terms
applicable for other funding sources of the venture capital fund.
Under the substitute amendment, the investment manager must set aside and
pay to the state its proceeds from investments of the moneys contributed to the
program by the state until the investment manager has paid the state $25,000,000,
the amount of the state's contribution. After that point, the investment manager
must pay 90 percent of its proceeds from such investments to the state.
The substitute amendment requires the investment manager to submit a
report to DOA each year within 120 days after the end of the investment manager's
fiscal year that includes all of the following:
1. An audit of the investment manager's financial statements performed by an
independent certified public accountant.
2. The investment manager's internal rate of return from investments in
venture capital funds under the program.
3. For each venture capital fund that received an investment under the
program: a) the name and address of the venture capital fund; b) the amount of the
investment; c) an accounting of any fees the venture capital fund paid to itself or any
principal or manager, and d) the venture capital fund's average rate of return on its
investments under the program.
4. For each business in which a venture capital fund held an investment of
moneys contributed by the investment manager under the program: a) the name and
address of the business; b) a description of the nature of the business; c) an
identification of the venture capital fund that made the investment; d) the amount
of each investment in the business and the amount contributed by the venture
capital fund; e) the internal rate of return realized by the venture capital fund on the
investment; and f) a statement of the number of employees the business employed
when the venture capital fund first invested in the business under the program, the
number of employees the business employed on the first day of the investment
manager's fiscal year, and the number of employees the business employed on the
last day of the investment manager's fiscal year.
DOA must submit the investment manager's annual report to the legislature.
The investment manager must also submit a quarterly report to DOA for the
preceding quarter that identifies each venture capital fund participating in the
program, each business in which a venture capital fund held an investment under
the program and the amount of each investment, and the number of employees each
business employed when the venture capital fund first invested in the business
under the program and the number of employees the business employed at the end
of the quarter. DOA must publish the information contained in the investment
manager's quarterly report on DOA's Internet site.
The substitute amendment also requires DOA to submit to JCF two progress
reports, one in 2015 and one in 2018. Each report must include all of the following:

1. A comprehensive assessment of the performance to date of the investment
program created in the substitute amendment.
2. Any recommendations DOA has for improving the investment program and
the specific actions DOA intends to take or proposes to be taken to implement those
recommendations.
3. Any recommendations SWIB has for improving the investment program and
the specific actions SWIB proposes to be taken to implement those recommendations.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB181-ASA1,1 1Section 1. 16.295 of the statutes is created to read:
AB181-ASA1,4,3 216.295 Fund of funds investment program. (1) Definition. In this section,
3"investment manager" means the person the committee selects under sub. (3) (a) 1.
AB181-ASA1,4,6 4(2) Establishment of program. The department shall establish and
5administer a program for the investment of moneys in venture capital funds that
6invest in businesses located in this state.
AB181-ASA1,4,13 7(3) Selection of investment manager; contract approval. (a) 1. The secretary
8shall form a committee to select the investment manager. The committee shall
9consist of 3 representatives of the investment board, one representative of the
10department, appointed by the secretary, and one representative of the Wisconsin
11Technology Council, appointed by the board of directors of the Wisconsin Technology
12Council. The committee shall select a person as investment manager who has
13expertise in the venture capital or private equity asset class.
AB181-ASA1,5,214 2. When the department gives the notice under par. (b) 1., the department shall
15submit its proposed contract with the investment manager to the legislative audit
16bureau for review. The legislative audit bureau shall review the proposed contract
17and, within 14 days after it receives the proposed contract for review, submit to the
18joint committee on finance and the department a letter of review that evaluates the

1terms of the contract and offers an opinion concerning the extent to which the
2contract conforms with this section and implements subs. (4) to (7).
AB181-ASA1,5,53 (b) 1. The secretary shall notify in writing the joint committee on finance of the
4investment manager selected under par. (a) 1. The notice shall include the
5department's proposed contract with the investment manager.
AB181-ASA1,5,176 2. If, within 14 working days after the date the joint committee on finance
7receives the legislative audit bureau's letter of review under par. (a) 2., the
8cochairpersons of the joint committee on finance do not notify the secretary that the
9committee has scheduled a meeting to determine whether the department's proposed
10contract with the investment manager is contrary to this section or fails to
11implement an applicable provision of subs. (4) to (7), the department and investment
12manager may execute that contract. If, within 14 working days after the date of that
13notice, the cochairpersons of the committee notify the secretary that the committee
14has scheduled that meeting, the department and investment manager may execute
15the contract unless the committee determines at that meeting that the contract, in
16whole or in part, is contrary to this section or fails to implement an applicable
17provision of subs. (4) to (7).
AB181-ASA1,5,23 18(4) Contract with investment manager; disclosure requirement. (a) Subject
19to sub. (3), the department shall contract with the investment manager. The contract
20shall establish the investment manager's compensation, including any management
21fee. Any management fee may not exceed, annually for no more than 4 years, 1
22percent of the total moneys designated under sub. (5) (b) 1. and raised under sub. (5)
23(b) 3.
AB181-ASA1,6,224 (b) The investment manager shall disclose to the department any interest that
25it or an owner, stockholder, partner, officer, director, member, employee, or agent of

1the investment manager has in a venture capital fund that receives moneys under
2sub. (5) (b) or a business in which a venture capital fund invests those moneys.
AB181-ASA1,6,5 3(5) Investments in venture capital funds. (a) Subject to sub. (4) (a), the
4department shall pay $25,000,000 from the appropriation under s. 20.505 (1) (fm) to
5the investment manager in fiscal year 2013-14.
AB181-ASA1,6,76 (b) The investment manager shall invest the following moneys in at least 4
7venture capital funds:
AB181-ASA1,6,88 1. The moneys under par. (a).
AB181-ASA1,6,99 2. At least $300,000 of the investment manager's own moneys.
AB181-ASA1,6,1110 3. At least $5,000,000 that the investment manager raises from sources other
11than the department.
AB181-ASA1,6,1312 (c) 1. Of the moneys designated under par. (b), the investment manager may
13not invest more than $10,000,000 in a single venture capital fund.
AB181-ASA1,6,1814 2. Of the moneys designated under par. (b), the investment manager shall
15commit at least one-half of those moneys to investments in venture capital funds
16within 12 months after the date the investment manager executes the contract under
17sub. (4) (a), and the investment manager shall commit all of those moneys to
18investments in venture capital funds within 24 months after that date.
AB181-ASA1,6,2119 (d) The investment manager shall contract with each venture capital fund that
20receives moneys under par. (b). Each contract shall require the venture capital fund
21to do all of the following:
AB181-ASA1,7,1222 1. Make new investments in an amount equal to the moneys it receives under
23par. (b) in one or more businesses that are headquartered in this state and employ
24at least 50 percent of their full-time employees, including any subsidiary or other
25affiliated entity, in this state, and invest at least one-half of those moneys in one or

1more businesses that employ fewer than 150 full-time employees, including any
2subsidiary or other affiliated entity, when the venture capital fund first invests
3moneys in the business under this section. The venture capital fund's contract with
4a business in which the venture capital fund makes an investment under this
5subdivision shall require that, if within 3 years after the venture capital fund makes
6that investment, the business relocates its headquarters outside of this state or fails
7to employ at least 50 percent of its full-time employees, including any subsidiary or
8other affiliated entity, in this state, the business shall promptly pay to the venture
9capital fund an amount equal to the total amount of moneys designated under par.
10(b) 1. that the venture capital fund invested in the business. The venture capital fund
11shall reinvest those moneys in one or more businesses that are eligible to receive an
12investment under this subdivision, subject to the requirements of this section.
AB181-ASA1,7,1613 2. Commit at least one-half of any moneys it receives under par. (b) to
14investments in businesses within 24 months after the date it receives those moneys
15and commit all of those moneys to investments in businesses within 48 months after
16that date.
AB181-ASA1,7,2117 3. Invest all of the moneys it receives under par. (b) in businesses in the
18agriculture, information technology, engineered products, advanced manufacturing,
19medical devices, or medical imaging industry and attempt to ensure that all of those
20moneys are invested in businesses that are diverse with respect to geographic
21location within this state.
AB181-ASA1,8,222 4. At least match any moneys it receives under par. (b) and invests in a business
23with an investment in that business of moneys the venture capital fund has raised
24from sources other than the investment manager. The investment manager shall
25ensure that, on average, for every $1 a venture capital fund receives under par. (b)

1and invests in a business, the venture capital fund invests $2 in that business from
2sources other than the investment manager.
AB181-ASA1,8,53 5. Provide to the investment manager the information necessary for the
4investment manager to complete the annual report under sub. (7) (a) and the
5quarterly report under sub. (7) (c).
AB181-ASA1,8,96 6. Disclose to the investment manager and the department any interest that
7the venture capital fund or an owner, stockholder, partner, officer, director, member,
8employee, or agent of the venture capital fund holds in a business in which the
9venture capital fund invests or intends to invest moneys received under par. (b).
AB181-ASA1,8,1310 (e) The investment manager's profit-sharing agreement with each venture
11capital fund that receives moneys under par. (b) shall be on terms that are
12substantially equivalent to the terms applicable for other funding sources of the
13venture capital fund.
AB181-ASA1,8,17 14(6) Special requirements for investments of moneys contributed by the
15state.
(a) The investment manager shall hold in an escrow account its gross proceeds
16from all investments of the moneys designated under sub. (5) (b) 1. until the
17investment manager satisfies par. (b).
AB181-ASA1,8,2018 (b) At least annually, the investment manager shall pay any moneys held under
19par. (a) to the secretary for deposit into the general fund until the investment
20manager has paid a total of $25,000,000 under this paragraph.
AB181-ASA1,8,2321 (c) After the investment manager satisfies par. (b), the investment manager
22shall pay 90 percent of its gross proceeds from investments of the moneys designated
23under sub. (5) (b) 1. to the secretary for deposit into the general fund.
AB181-ASA1,9,2 24(7) Reports of the investment manager; public disclosures. (a) Annually,
25within 120 days after the end of the investment manager's fiscal year, the investment

1manager shall submit a report to the department for that fiscal year that includes
2all of the following:
AB181-ASA1,9,43 1. An audit of the investment manager's financial statements performed by an
4independent certified public accountant.
AB181-ASA1,9,65 2. The investment manager's internal rate of return from investments under
6sub. (5) (b).
AB181-ASA1,9,87 3. For each venture capital fund that contracts with the investment manager
8under sub. (5) (d), all of the following:
AB181-ASA1,9,99 a. The name and address of the venture capital fund.
AB181-ASA1,9,1010 b. The amounts invested in the venture capital fund under sub. (5) (b).
AB181-ASA1,9,1211 c. An accounting of any fee the venture capital fund paid to itself or any
12principal or manager of the venture capital fund.
AB181-ASA1,9,1413 d. The venture capital fund's average internal rate of return on its investments
14of the moneys it received under sub. (5) (b).
AB181-ASA1,9,1615 4. For each business in which a venture capital fund held an investment of
16moneys the venture capital fund received under sub. (5) (b), all of the following:
AB181-ASA1,9,1717 a. The name and address of the business.
AB181-ASA1,9,1818 b. A description of the nature of the business.
AB181-ASA1,9,2019 c. An identification of the venture capital fund that made the investment in the
20business.
AB181-ASA1,9,2221 d. The amount of each investment in the business and the amount invested by
22the venture capital fund from funding sources other than the investment manager.
AB181-ASA1,9,2423 e. The internal rate of return realized by the venture capital fund upon the
24venture capital fund's exit from the investment in the business.
AB181-ASA1,10,5
1f. A statement of the number of employees the business employed when the
2venture capital fund first invested moneys in the business that the venture capital
3fund received under sub. (5) (b), the number of employees the business employed on
4the first day of the investment manager's fiscal year, and the number of employees
5the business employed on the last day of the investment manager's fiscal year.
AB181-ASA1,10,86 (b) No later than 10 days after it receives the investment manager's report
7under par. (a), the department shall submit the report to the chief clerk of each house
8of the legislature, for distribution to the legislature under s. 13.172 (2).
AB181-ASA1,10,109 (c) Quarterly, the investment manager shall submit a report to the department
10for the preceding quarter that includes all of the following:
AB181-ASA1,10,1211 1. An identification of each venture capital fund under contract with the
12investment manager under sub. (5) (d).
AB181-ASA1,10,1713 2. An identification of each business in which a venture capital fund held an
14investment of moneys the venture capital fund received under sub. (5) (b) and a
15statement of the amount of the investment in each business that separately specifies
16the amount of moneys designated under sub. (5) (b) 1. that were contributed to the
17investment.
AB181-ASA1,10,2118 3. A statement of the number of employees the business employed when the
19venture capital fund first invested moneys in the business that the venture capital
20fund received under sub. (5) (b) and the number of employees the business employed
21at the end of the quarter.
AB181-ASA1,10,2322 (d) The department shall make the investment manager's quarterly report
23under par. (c) readily accessible to the public on the department's Internet site.
AB181-ASA1,11,3
1(8) Progress reports. In 2015 and 2018, no later than March 1, the department
2shall submit reports to the joint committee on finance that include all of the
3following:
AB181-ASA1,11,54 (a) A comprehensive assessment of the performance to date of the investment
5program under this section.
AB181-ASA1,11,86 (b) Any recommendations the department has for improvement of the
7investment program under this section and the specific actions the department
8intends to take or proposes to be taken to implement those recommendations.
AB181-ASA1,11,119 (c) Any recommendations the investment board has for improvement of the
10investment program under this section and the specific actions the investment board
11proposes to be taken to implement those recommendations.
AB181-ASA1,11,13 12(9) Exemption from low bid and contractual services requirements. Sections
1316.705 and 16.75 do not apply to this section.
AB181-ASA1,2 14Section 2. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert
15the following amounts for the purposes indicated: - See PDF for table PDF
AB181-ASA1,3 16Section 3. 20.505 (1) (fm) of the statutes is created to read:
AB181-ASA1,11,1817 20.505 (1) (fm) Fund of funds investment program. The amounts in the
18schedule for the venture capital investment program under s. 16.295.
AB181-ASA1,4 19Section 4. 25.17 (72) of the statutes is created to read:
AB181-ASA1,12,2
125.17 (72) Appoint the board's representatives to the committee under s.
216.295 (3) (a).
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