Wisconsin Next Generation Reserve Fund
The bill creates a nonlapsible fund to be known as the "Wisconsin next
generation reserve fund" (fund). From the fund, the Reserve Board may make
grants, loans, and investments, as set forth below. For short-term management, the
fund is included in the state investment fund managed by the Investment Board.
In addition to moneys from other sources, the fund consists of moneys
generated from tax revenue collected from "qualifying companies" in the bioscience
industry. Under the bill, a qualifying company is identified by the company's
principal business activity code under the North American Industry Classification
System (NAICS). The bill directs the Department of Revenue (DOR) to determine
in July 2016 the total amount of withholding taxes due and payable from qualifying
companies for 2015. Then, beginning on July 1, 2017, and ending on July 1, 2031,
DOR must deposit in the fund an amount equal to 95 percent of the withholding taxes
due and payable from qualifying companies the previous year that exceeds the total
amount for 2015, except that DOR may not deposit more than $15,000,000 into the
fund on July 1, 2017, or more than $50,000,000 on any July 1 thereafter. DOR may
not deposit more than a total of $350,000,000 into the fund. However, the Joint
Committee on Finance (JCF), under its passive review process, may approve deposits
of up to an additional $150,000,000.

Grants, loans, and investments
From the fund, the bill authorizes the Reserve Board to make grants and loans
to, and direct investments in, bioscience companies certified by the Reserve Board.
The Reserve Board may certify a bioscience company if the Reserve Board
determines that the company is headquartered and employs at least 75 percent of
its employees in Wisconsin and meets certain other conditions, including that the
company is developing biotechnology or bioscience or bioscience research methods
and demonstrates the potential to generate high levels of successful investment
performance and increase employment in Wisconsin.
Before providing any moneys from the fund to a certified bioscience company,
the Reserve Board must enter into a contract with the company that includes all of
the following requirements:
1. The company must use a grant, loan, or investment from the fund for
research and development related to biotechnology or bioscience or bioscience
research methods.
2. The company must match the amount of any grant, loan, or investment from
the fund with moneys the company has raised from other sources.
3. During the term of the contract, the company may not relocate its
headquarters outside of Wisconsin without the Reserve Board's approval.
Contracting authority
In addition to its general contracting authority, the bill authorizes the Reserve
Board to execute a contract with the Investment Board for the Investment Board's
advice and services related to the Reserve Board's grants, loans, and investments
and for facilities provided by the Investment Board. Under the bill, the Investment
Board may also make a loan to the Reserve Board for the Reserve Board's initial
operations and administrative expenses.
The bill further authorizes the Investment Board to provide advice, services,
and facilities to any state agency or authority or a business entity owned by an
agency or authority. Under the bill, the Investment Board may provide advice or
services related to the management or administration, for any purpose, including
economic development, of money or property that an agency, authority, or eligible
business entity controls. The agency, authority, or eligible business entity must
contract with the Investment Board and pay the Investment Board for any advice,
services, or facilities the Investment Board provides.
Reporting and review
The bill requires the Reserve Board to file a detailed annual report with the
legislature that includes all of the following:
1. An accounting of the revenue deposited in the fund by DOR.
2. An accounting of all expenditures from the fund by the Reserve Board for any
purpose.
3. Information concerning each grant or loan to, or investment in, a certified
bioscience company, including a description of the purposes for which the certified
bioscience company used or is using the grant, loan, or investment and a statement
of the number of employees the certified bioscience company employed on January

1 of the preceding year and the number of employees the company employed on
December 31 of that year.
4. An accounting of the internal rate of return realized by the Reserve Board
on its total loans to, and investments in, certified bioscience companies.
5. An accounting of the internal rate of return realized by the Reserve Board
on each loan to or investment in each certified bioscience company.
Finally, the bill requires the Reserve Board to submit a plan to JCF at the close
of each fiscal biennium that shows the grants, loans, and investments the Reserve
Board intends to make during the next fiscal biennium. The joint committee on
finance may approve, disapprove, or modify and approve the Reserve Board's plan
under JCF's passive review process.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB888,1 1Section 1. 15.07 (1) (a) 6. of the statutes is created to read:
AB888,4,32 15.07 (1) (a) 6. The members of the Wisconsin next generation reserve board
3appointed under s. 15.77 (1) (h) to (j) shall be appointed as provided in that section.
AB888,2 4Section 2. 15.07 (4) of the statutes is amended to read:
AB888,4,115 15.07 (4) Quorum. A majority of the membership of a board constitutes a
6quorum to do business and, unless a more restrictive provision is adopted by the
7board, a majority of a quorum may act in any matter within the jurisdiction of the
8board. This subsection does not apply to actions of the government accountability
9board or the school district boundary appeal board as provided in ss. 5.05 (1e) and
10117.05 (2) (a) or the Wisconsin next generation reserve board as provided in s. 15.77
11(3)
.
AB888,3 12Section 3. 15.07 (4) of the statutes, as affected by 2015 Wisconsin Acts 118 and
13.... (this act), is repealed and recreated to read:
AB888,5,6
115.07 (4) Quorum. A majority of the membership of a board constitutes a
2quorum to do business and, unless a more restrictive provision is adopted by the
3board, a majority of a quorum may act in any matter within the jurisdiction of the
4board. This subsection does not apply to actions of the school district boundary
5appeal board as provided in s. 117.05 (2) (a) or the Wisconsin next generation reserve
6board as provided in s. 15.77 (3).
AB888,4 7Section 4. 15.07 (5) (am) of the statutes is created to read:
AB888,5,98 15.07 (5) (am) Members of the Wisconsin next generation reserve board, $50
9per day.
AB888,5 10Section 5. 15.77 of the statutes is created to read:
AB888,5,14 1115.77 Wisconsin next generation reserve board; creation. (1) There is
12created a next generation reserve board, to be known for statutory purposes as the
13Wisconsin next generation reserve board. The board shall consist of the following
14members:
AB888,5,1615 (a) One member who has expertise in agriculture and is recognized for
16outstanding knowledge and leadership in bioscience or bioscience research.
AB888,5,2017 (b) Two members who, at the time of appointment, serve in senior management
18positions at bioscience companies headquartered in this state that employ fewer
19than 50 employees, including any affiliate, and who, in addition to any other
20responsibilities, have responsibilities related to the financing of the companies.
AB888,5,2421 (c) One member who, at the time of appointment, serves in a senior
22management position at a bioscience company headquartered in this state that
23employs at least 50 employees, including any affiliate, and who, in addition to any
24other responsibilities, has responsibilities related to the financing of the company.
AB888,6,5
1(d) One member who, at the time of appointment, serves in a senior
2management position at a company headquartered in this state that develops or
3manufactures medical devices and employs fewer than 50 employees, including any
4affiliate, and who, in addition to any other responsibilities, has responsibilities
5related to the financing of the company.
AB888,6,106 (e) One member who, at the time of appointment, serves in a senior
7management position at a company headquartered in this state that develops or
8manufactures medical devices and employs at least 50 employees, including any
9affiliate, and who, in addition to any other responsibilities, has responsibilities
10related to the financing of the company.
AB888,6,1411 (f) One member who, at the time of appointment, either has at least 5 years of
12experience directly investing in bioscience companies in this state, or represents a
13group of individual investors that has at least 5 years of experience directly investing
14in bioscience companies in this state.
AB888,6,1615 (g) One member who, at the time of appointment, has at least 3 years of
16experience in the merger and acquisition of bioscience companies.
AB888,6,1717 (h) One member appointed by BioForward, Inc.
AB888,6,2018 (i) One member who has expertise in bioscience or bioscience research, who
19shall be appointed by the Board of Regents of the University of Wisconsin System and
20who shall serve as a nonvoting member at the pleasure of the Board of Regents.
AB888,6,2421 (j) One member who has expertise in bioscience or bioscience research, who
22shall be appointed by the Wisconsin Association of Independent Colleges and
23Universities and who shall serve as a nonvoting member at the pleasure of the
24association.
AB888,7,2
1(k) The executive director of the investment board, or his or her designee, who
2shall serve as a nonvoting member.
AB888,7,4 3(2) The members of the board identified in sub. (1) (a) to (h) shall be appointed
4for 4-year terms.
AB888,7,7 5(3) A majority of the voting members of the board constitutes a quorum for the
6purpose of conducting its business and exercising its powers and for all other
7purposes. Action may be taken by the board upon a vote of a majority of a quorum.
AB888,6 8Section 6. 19.42 (10) (Lm) of the statutes is created to read:
AB888,7,139 19.42 (10) (Lm) The members of the Wisconsin next generation reserve board
10who are appointed by BioForward, Inc., by the Board of Regents of the University of
11Wisconsin System, and by the Wisconsin Association of Independent Colleges and
12Universities and the executive director of the Wisconsin next generation reserve
13board.
AB888,7 14Section 7. 19.42 (13) (km) of the statutes is created to read:
AB888,7,1915 19.42 (13) (km) The members of the Wisconsin next generation reserve board
16who are appointed by BioForward, Inc., by the Board of Regents of the University of
17Wisconsin System, and by the Wisconsin Association of Independent Colleges and
18Universities and the executive director of the Wisconsin next generation reserve
19board.
AB888,8 20Section 8. 20.195 of the statutes is created to read:
AB888,7,22 2120.195 Wisconsin next generation reserve board. There is appropriated
22to the Wisconsin next generation reserve board for the following program:
AB888,8,4 23(1) Assistance to certified bioscience companies. (q) General program
24operations and loans, grants, and investments.
From the Wisconsin next generation
25reserve fund, a sum sufficient to make loans and provide grants to, and make

1investments in, certified bioscience companies as provided in ch. 555 and for general
2program operations and administrative expenses. Not more than the following
3amounts may be expended under this paragraph for general program operations and
4administrative expenses:
AB888,8,65 1. In fiscal year 2017-18, 5 percent of the moneys in the Wisconsin next
6generation reserve fund.
AB888,8,87 2. In fiscal year 2018-19, 5 percent of the moneys in the Wisconsin next
8generation reserve fund.
AB888,8,109 3. In fiscal year 2019-20, 2 percent of the moneys in the Wisconsin next
10generation reserve fund.
AB888,8,1211 4. In fiscal year 2020-21 and in each fiscal year thereafter, 0.5 percent of the
12moneys in the Wisconsin next generation reserve fund.
AB888,8,1513 (r) Additional operational or administrative expenses. From the Wisconsin
14next generation reserve fund, a sum sufficient equal to any amount authorized under
15s. 555.06 for general program operations and administrative expenses.
AB888,9 16Section 9. 20.536 (1) (k) of the statutes is amended to read:
AB888,8,2017 20.536 (1) (k) General program operations. All moneys received from
18assessments made under s. 25.187 (2) and, from charges made under s. 25.17 (9), and
19from assessments or charges made under s. 25.17 (73) or (74),
for the purpose of
20conducting general program operations.
AB888,10 21Section 10. 25.14 (1) (a) (intro.) of the statutes is amended to read:
AB888,9,222 25.14 (1) (a) (intro.) There is created a state investment fund under the
23jurisdiction and management of the board to be operated as an investment trust for
24the purpose of managing the securities of all funds that are required by law to be

1invested in the state investment fund, the Wisconsin next generation reserve fund,
2and all of the state's funds specified in s. 25.17 (1), except all of the following:
AB888,11 3Section 11. 25.17 (73) of the statutes is created to read:
AB888,9,174 25.17 (73) Have authority to provide advice and services requested by a state
5agency, as defined in s. 20.001 (1), or authority, as defined in s. 16.417 (1) (b), or
6business entity owned or controlled by a state agency or authority, relating to
7managing or administering money and property controlled by the agency, authority,
8or business entity for any purpose, including economic development in this state.
9The scope of any advice or services provided to a state agency, authority, or business
10entity under this subsection shall be defined by agreement between the board and
11the agency, authority, or business entity. This agreement shall require the cost of any
12advice or services provided by the board to be paid by the agency, authority, or
13business entity and the agreement may authorize the board to make assessments
14against the money and property controlled by the agency, authority, or business
15entity or to charge the agency, authority, or business entity for the cost of any advice
16or services provided. All moneys received by the board under this subsection shall
17be credited to the appropriation account under s. 20.536 (1) (k).
AB888,12 18Section 12. 25.17 (74) of the statutes is created to read:
AB888,9,2519 25.17 (74) Have authority to provide facilities to any state agency, as defined
20in s. 20.001 (1), or authority, as defined in s. 16.417 (1) (b), or business entity owned
21or controlled by a state agency or authority, in accordance with any agreement
22between the board and the agency, authority, or business entity. This agreement
23shall require the cost of facilities provided by the board to be paid by the agency,
24authority, or business entity. All moneys received by the board under this subsection
25shall be credited to the appropriation account under s. 20.536 (1) (k).
AB888,13
1Section 13. 25.90 of the statutes is created to read:
AB888,10,7 225.90 Wisconsin next generation reserve fund. There is established a
3separate nonlapsible trust fund designated as the Wisconsin next generation reserve
4fund. The fund shall consist of all moneys deposited in the fund under ss. 73.17,
5555.02 (2) (c) and 555.03 (3), together with all donations, gifts, or bequests made to
6the fund, all moneys transferred to the fund from other funds, and all income or
7interest earned by the fund.
AB888,14 8Section 14. 73.17 of the statutes is created to read:
AB888,10,15 973.17 Wisconsin next generation reserve fund. (1) In this section,
10"qualifying company" means a person whose principal business activity code in the
11North American Industry Classification System, 2012 edition, published by the
12federal office of management and budget, is one of the following: 311221, 311224,
13325193, 325199, 325220, 325311, 325312, 325314, 325320, 325411, 325412, 325413,
14325414, 334510, 334516, 334517, 339112, 339113, 339114, 339115, 339116, 541380,
15541711, 541712, 621491, 621493, 621511, 621512, or 622110.
AB888,10,18 16(2) (a) In July 2016, the department of revenue shall determine the total
17amount of withholding taxes due and payable under subch. X of ch. 71 from
18qualifying companies for calendar year 2015.
AB888,10,2319 (b) Subject to par. (d), on July 1, 2017, and on each July 1 thereafter, ending on
20July 1, 2031, the department of revenue shall deposit into the Wisconsin next
21generation reserve fund an amount equal to 95 percent of the amount of withholding
22taxes due and payable under subch. X of ch. 71 from qualifying companies in the
23previous calendar year that exceeds the amount determined under par. (a).
AB888,11,3
1(c) A person who is subject to withholding taxes under subch. X of ch. 71 shall
2indicate to the department of revenue whether it is a qualifying company for
3purposes of this section in the manner determined by the department.
AB888,11,64 (d) The department of revenue shall not deposit into the Wisconsin next
5generation reserve fund more than $15,000,000 on July 1, 2017, or $50,000,000 on
6any July 1 thereafter, and the total amount deposited may not exceed $350,000,000.
AB888,11,197 (e) After the department of revenue deposits a total of $350,000,000 into the
8fund under par. (d), and subject to the requirements of this paragraph, the
9department shall continue depositing moneys into the fund under par. (b), not to
10exceed an additional total amount of $150,000,000 in deposits. Before the
11department continues those deposits, the department shall notify the joint
12committee on finance in writing that the department intends to do so. If, within 14
13working days after the date of that notice, the cochairpersons of the committee do not
14notify the department that the committee has scheduled a meeting to review the
15continuation of deposits into the fund, the department shall continue those deposits.
16If, within 14 working days after the date of that notice, the cochairpersons of the
17committee notify the department that the committee has scheduled a meeting to
18review the department's continuation of deposits into the fund, the department may
19continue those deposits only upon approval of the committee.
AB888,15 20Section 15. 230.08 (2) (yo) of the statutes is created to read:
AB888,11,2221 230.08 (2) (yo) The executive director and administrative assistant of the
22Wisconsin next generation reserve board.
AB888,16 23Section 16. Chapter 555 of the statutes is created to read:
AB888,11,2424 CHAPTER 555
AB888,12,2
1Wisconsin next generation
2 RESERVE board
AB888,12,3 3555.01Definitions. In this chapter:
AB888,12,4 4(1) "Board" means the Wisconsin next generation reserve board.
AB888,12,6 5(2) "Certified bioscience company" means a person certified by the board under
6s. 555.03 (2).
AB888,12,9 7(3) "Qualifying company" has the meaning given in s. 73.17 (1), except that
8"qualifying company" does not include a business that has as its principal business
9activity the operation of a hospital as defined in s. 50.33 (2).
AB888,12,11 10(4) "Fund" means the Wisconsin next generation reserve fund established
11under s. 25.90.
AB888,12,15 12555.02 Wisconsin next generation reserve fund. (1) Executive director.
13The board shall employ an executive director who has expertise in private equity
14investment. In reviewing candidates for executive director, the board shall consider
15all of the following:
AB888,12,1716 (a) The extent of the candidate's experience and expertise in private equity
17investment.
AB888,12,1918 (b) The candidate's investment experience related to start-up bioscience
19companies.
Loading...
Loading...