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(f) The business is not engaged in the development of real estate for resale.
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(g) The business is not engaged in banking or lending and does not make any
11loans to, or investments in, certified capital corporations.
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12(2) Department opinions and exceptions. A certified capital company may,
13prior to making an investment in a specific business, request a written opinion from
14the department that a business in which it proposes to invest is a qualified business.
15If the department determines that the business meets the requirements under sub.
16(1), the department shall issue a written opinion stating that the business is a
17qualified business. If the department determines that the business does not meet
18all of the requirements under sub. (1), the department may nonetheless issue a
19written opinion stating that the business is a qualified business if the department
20determines that the proposed investment in the business will further state economic
21development. Upon receiving a request, the department shall, within 10 working
22days, determine whether or not the business is a qualified business and provide the
23certified capital company with a written opinion stating its determination and
24providing an explanation of the reasons for its determination. If the department fails
25to provide the certified capital company with a written opinion within 10 working
1day after receiving a request for an opinion under this subsection with respect to a
2proposed investment, the business in which the certified capital company proposes
3to invest is a qualified business.
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4560.34 Operation of certified capital companies. (1) Qualified
5investment requirements. (a) In order for a certified capital company to prevent
6disqualification of one of its investment pools under s. 560.37, the certified capital
7company shall ensure that each of its investment pools makes qualified investments
8according to the following schedule:
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1. Within 3 years after the investment date for a particular investment pool,
10at least 30% of the investment pool shall be placed in qualified investments.
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2. Within 5 years after the investment date for a particular investment pool,
12at least 50% of the investment pool shall be placed in qualified investments.
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(b) The department shall promulgate rules governing the extent to which a
14reinvestment of proceeds from a qualified investment in a qualified business may be
15counted toward the percentage requirements under par. (a) and s. 560.36 (3). These
16rules may provide that reinvested proceeds from short-term investments shall be
17only partially counted toward the percentage requirements under par. (a) and s.
18560.36 (3). The rules may also provide that proceeds from an investment in a
19qualified business that are reinvested in that qualified business, or an affiliate of
20that qualified business, shall be only partially counted toward the percentage
21requirements under par. (a) and s. 560.36 (3).
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22(2) Nonqualified investments. All certified capital investments in a certified
23capital company that are not invested in qualified investments may be held or
24invested by the certified capital company as it considers appropriate, except that a
1certified capital company may not invest certified capital investments in an
2insurance company or in an affiliate of an insurance company.
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3(3) Diversification requirement. A certified capital company may not make
4a qualified investment in a person if, at the time of the investment, more than 15%
5of the total certified capital of the certified capital company would be invested in that
6person and affiliates of that person.
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7(4) Restrictions on management. No certified capital company may be
8managed or controlled by, or have a general partner that is, an insurance company
9or an affiliate of an insurance company.
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10560.35 Reporting requirements and fees. (1) Receipts of certified
11capital. As soon as practicable after the receipt of a certified capital investment, a
12certified capital company shall report all of the following to the department:
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(a) The name of the certified investor from which the certified capital was
14received, including the certified investor's tax identification number.
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(b) The amount of the certified capital investment.
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(c) The date on which the certified capital investment was received by the
17certified capital company.
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(d) The investment date for the investment pool of which the certified capital
19will be a part.
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20(2) Annual reports. On or before January 31 annually, a certified capital
21company shall report all of the following to the department:
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(a) The amount of the certified capital company's certified capital at the end of
23the preceding year.
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(b) Whether the certified capital company has invested more than 15% of its
25total certified capital in any one person.
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1(c) All qualified investments that the certified capital company has made
2during the previous calendar year and the investment pool from which each qualified
3investment was made.
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4(3) Financial statements. Within 90 days of the end of the certified capital
5company's fiscal year, the certified capital company shall provide to the department
6a copy of its annual audited financial statements, including the opinion of an
7independent certified public accountant. The audit shall address the methods of
8operation and conduct of the business of the certified capital to determine whether
9the certified capital company is complying with this subchapter and the rules
10promulgated under this subchapter, including whether certified capital has been
11invested in the manner required under s. 560.34. The financial statements provided
12under this subsection shall be segregated by investment pool and shall be separately
13audited on the basis to allow the department to determine whether the certified
14capital company is in compliance with s. 560.34 (1).
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15(4) Fees. On or before January 31 annually, a certified capital company shall
16pay a nonrefundable certification fee of $5,000 to the department, unless January 31
17falls within 6 months of the date on which the certified capital company was certified
18under s. 560.31.
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19(5) Exemption from rights of inspection and copying. If the department
20determines that a document submitted by a certified capital company under this
21section contains a trade secret, as defined in s. 134.90 (1) (c) or a business secret, that
22document is not subject to the right of inspection and copying under s. 19.35.
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23560.36 Distributions. A certified capital company may make a distribution
24only if one of the following conditions is met:
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25(1) Qualified distribution. The distribution is a qualified distribution.
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1(2) Written determination. The department made a written determination
2that the distribution may be made without adversely affecting the ability of the
3certified capital company to place, in qualified investments, an amount equal to
4100% of the certified capital in the investment pool from which the distribution is to
5be made.
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6(3) Placement of 100% of investments in qualified investments. The certified
7capital company has placed in qualified investments an amount equal to 100% of the
8certified capital investments in the investment pool.
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9(4) Debt payments. The distribution is a payment of principal or interest owed
10to a debt holder of a certified capital company, even if the debt holder is also a holder
11of equity and even if the indebtedness is a certified capital investment.
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12560.37 Compliance reviews; decertification; disqualification. (1)
13Annual compliance review. The department shall conduct an annual review of each
14certified capital company to determine if the certified capital company is complying
15with the requirements of this subchapter, to advise the certified capital company
16regarding the status of its investments as qualified investments and to ensure that
17no investment has been made in violation of this subchapter. The cost of the annual
18review shall be paid by each certified capital company according to a reasonable fee
19schedule adopted by the department.
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20(2) Disqualification of an investment pool. Any material violation of s. 560.34
21(1) is a ground for disqualification of the noncomplying investment pool. If the
22department of commerce determines that the certified capital company is not in
23compliance with s. 560.34 (1) with respect to an investment pool, it shall send a
24written notice to the certified capital company and the department of revenue stating
25that the investment pool has been disqualified.
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1(3) Decertification of a certified capital company. Any material violation of
2s. 560.34 (2), (3) or (4) or 560.35 (1), (2), (3) or (4) is a ground for decertification of the
3noncomplying certified capital company. If the department determines that the
4certified capital company is not in compliance with s. 560.34 (2), (3) or (4) or 560.35
5(1), (2), (3) or (4), the department shall send a written notice to the certified capital
6company that the certified capital company may be subject to decertification in 120
7days from the date on which the notice was mailed, unless the certified capital
8company brings itself into full compliance with ss. 560.34 (2), (3) or (4) and 560.35
9(1), (2), (3) and (4). If at the end of the 120-day period the certified capital company
10is not in compliance with ss. 560.34 (2), (3) or (4) and 560.35 (1), (2), (3) and (4), the
11department of commerce shall send a notice to the certified capital company and the
12department of revenue stating that the certified capital company has been
13decertified.
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14(4) Effect of decertification. Decertification of a certified capital company
15or an investment pool has the effects specified in s. 76.635 (4).
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16(5) Notices to certified investors. The department shall notify a certified
17investor when the certified capital company tax credit arising from a certified
18investment is no longer subject to recapture and forfeiture under s. 76.635 (4).
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(1)
Rule making. The department of commerce shall submit in proposed form
21the rules required under sections 560.31 (1) and 560.34 of the statutes, as created by
22this act, to the legislative council staff under section 227.15 (1) of the statutes no later
23than the first day of the 4th month after the effective date of this subsection.
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1(1) The treatment of section 76.635 of the statutes first applies to taxable years
2beginning on January 1 of the year in which this subsection takes effect, except that
3if this subsection takes effect on or after August 1 the treatment of that section first
4applies to taxable years beginning on January 1 of the year following the year in
5which this subsection takes effect.
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(1)
This act takes effect on the first day of the 7th month beginning after
8publication.