Amendment ASA1-AB531

AB531-ASA1,13,2 560.30 (3) "Certified capital company tax credit" means the tax credit under s. ss. 71.07 (7m), 71.28 (7m), 71.47 (7) and (7m), and 76.635.

AB531-ASA1, s. 19 Section 19. 560.30 (5g) of the statutes is created to read:

AB531-ASA1,13,5 560.30 (5g) "Early stage business" means a qualified business that satisfies any of the following criteria:

AB531-ASA1,13,9 (a) At the time that a certified capital company makes an initial investment in the business, the business is involved in activities related to prototype development, establishment of initial production or service processes, or other development of initial product or service offerings.

AB531-ASA1,13,13 (b) During the fiscal year preceding the year in which a certified capital company makes an initial investment in the business, the business had gross revenues of less than $2,000,000, on a consolidated basis, as determined in accordance with generally accepted accounting principles.

AB531-ASA1,13,15 (c) The business is approved as an early stage business by the department under s. 560.33 (2).

AB531-ASA1, s. 20 Section 20. 560.30 (5r) of the statutes is created to read:

AB531-ASA1,13,19 560.30 (5r) "Investment criteria" means the investment criteria submitted to the department under s. 560.31 (2) (j), or any investment criteria subsequently approved as provided under the rules of the department.

AB531-ASA1, s. 21 Section 21. 560.30 (9) of the statutes is renumbered 560.30 (9) (intro.) and amended to read:

AB531-ASA1,13,24 560.30 (9) (intro.) "Qualified debt instrument" means a debt instrument that a certified capital company issues at par value or at a premium; that has and that satisfies all of the following criteria:

AB531-ASA1,14,2 (a) The debt instrument has an original maturity date of at least 5 years from the date on which it was issued; that.

AB531-ASA1,14,4 (b) The debt instrument has a repayment schedule that is no faster than a level principal amortization and, until over 5 years.

AB531-ASA1,14,8 (c) Until the certified capital company may make distributions other than qualified distributions, the interest, distribution or payment features of which the debt instrument are not related to the certified capital company's profitability or the performance of its investment portfolio.

AB531-ASA1, s. 22 Section 22. 560.30 (9) (d) of the statutes is created to read:

AB531-ASA1,14,11 560.30 (9) (d) The debt instrument does not permit the certified investor to receive prepayment of interest.

AB531-ASA1, s. 23 Section 23. 560.30 (10) (intro.) of the statutes is amended to read:

AB531-ASA1,14,14 560.30 (10) (intro.) "Qualified distribution" means a distribution or payment by a certified capital company to its equity holders for any of the following:

AB531-ASA1, s. 24 Section 24. 560.30 (10) (a) of the statutes is amended to read:

AB531-ASA1,14,17 560.30 (10) (a) The costs of forming, and syndicating, managing or operating the certified capital company, up to $750,000.

AB531-ASA1, s. 25 Section 25. 560.30 (10) (b) of the statutes is amended to read:

AB531-ASA1,14,21 560.30 (10) (b) An annual management fee that does not exceed 2.5% of the certified capital company's total certified capital or the cost of managing and operating the certified capital company, whichever is less.

AB531-ASA1, s. 26 Section 26. 560.30 (10) (c) of the statutes is repealed.

AB531-ASA1, s. 27 Section 27. 560.30 (10) (d) of the statutes is amended to read:

AB531-ASA1,15,2 560.30 (10) (d) A projected increase in federal or state taxes, including excluding penalties and interest on those taxes, of the equity owners of the certified capital company if those amounts are related to the certified capital company's ownership, management, or operation.

AB531-ASA1, s. 28 Section 28. 560.30 (10) (e) of the statutes is created to read:

AB531-ASA1,15,5 560.30 (10) (e) Reasonable costs associated with applying for qualified federal funding programs, as determined by the department.

AB531-ASA1, s. 29 Section 29. 560.31 (1) of the statutes is renumbered 560.31 (1) (a) and amended to read:

AB531-ASA1,15,13 560.31 (1) (a) The department shall promulgate rules establishing procedures under which a person may apply to become a certified capital company for receiving certified capital investments under s. 560.32 (2) (b) 1. or a certified capital company for receiving certified capital investments under s. 560.32 (2) (b) 2. The department shall grant or deny an application for certification under this section within 30 days of the date of application.

AB531-ASA1,15,25 (b) If the department denies certification, the department shall include with the denial a detailed description of the grounds for the refusal, including suggestions for removal of those grounds. A person may submit an amended application within 15 days of receipt of a notice of denial. The department shall grant or deny the amended application within 15 days of the date of the amended application. If the department denies certification based upon the amended application, the department shall include with the denial a detailed description of the grounds for the refusal. A person whose amended application is denied may, within 10 days after the department's decision, request a contested case hearing under s. 227.42 from the department. If the final administrative or judicial proceeding results in a determination that the application was denied in error, the department shall revise its determination accordingly.

AB531-ASA1, s. 30 Section 30. 560.31 (2) (intro.) of the statutes is amended to read:

AB531-ASA1,16,4 560.31 (2) Requirements for certification. (intro.) The department shall may certify a person as a certified capital company if the department determines that all of the following conditions have been met:

AB531-ASA1, s. 31 Section 31. 560.31 (2) (b) of the statutes is amended to read:

AB531-ASA1,16,8 560.31 (2) (b) The At the time of application and on the date on which the person is certified, the person has a net worth, at the time of application, of at least $500,000 and has at least $500,000 in cash, cash equivalents , and marketable securities.

AB531-ASA1, s. 32 Section 32. 560.31 (2) (g) of the statutes is created to read:

AB531-ASA1,16,12 560.31 (2) (g) The person agrees to maintain in this state an investment office and staff actively engaged in making investments until all investment pools have been decertified.

AB531-ASA1, s. 33 Section 33. 560.31 (2) (h) of the statutes is created to read:

AB531-ASA1,16,21 560.31 (2) (h) The person has provided the department with a list of all persons that have an ownership interest in the person as provided under this paragraph. The list shall include the percentage ownership interest of each owner and indicate whether the interest is voting or nonvoting. If the person is an entity that is registered under 15 USC 78l (g) or required to file reports under 15 USC 78o (d), the person shall list only those persons having beneficial ownership of equity securities of at least 5 percent. If a list contains the name of a business entity, the person shall also include a list of all persons that have an ownership interest in the entity.

AB531-ASA1, s. 34 Section 34. 560.31 (2) (i) of the statutes is created to read:

AB531-ASA1,16,24 560.31 (2) (i) The person has provided the department with a business plan covering at least the 5-year period following the date of application.

AB531-ASA1, s. 35 Section 35. 560.31 (2) (j) of the statutes is created to read:

AB531-ASA1,17,3 560.31 (2) (j) The person has provided the department with the person's investment strategy, along with a description of the investment criteria the person intends to follow.

AB531-ASA1, s. 36 Section 36. 560.31 (2) (k) of the statutes is created to read:

AB531-ASA1,17,6 560.31 (2) (k) The person has provided the department with the person's organizational chart.

AB531-ASA1, s. 37 Section 37. 560.32 (2) (b) of the statutes is renumbered 560.32 (2) (b) 1. and amended to read:

AB531-ASA1,17,12 560.32 (2) (b) 1. The Prior to the effective date of this subdivision .... [revisor inserts date], the department may certify an investment under this subsection only if, after the certification, the department will not have certified a total of more than $50,000,000 in investments under this subsection.

AB531-ASA1, s. 38 Section 38. 560.32 (2) (b) 2. of the statutes is created to read:

AB531-ASA1,17,19 560.32 (2) (b) 2. Beginning on the effective date of this subdivision .... [revisor inserts date], the department shall certify investments for which notices have been received under par. (a), subject to the limit specified in this subdivision. The department may certify an investment under this subdivision only if, after the certification, the department will not have certified a total of more than $75,000,000 in investments under this subdivision.

AB531-ASA1, s. 39 Section 39. 560.32 (2) (c) of the statutes is renumbered 560.32 (2) (c) 1.

AB531-ASA1, s. 40 Section 40. 560.32 (2) (c) 2. of the statutes is created to read:

AB531-ASA1,18,2 560.32 (2) (c) 2. The department may not certify an investment under par. (b) 2. if, after the certification, the investor, together with all affiliates of the investor, would have in certified capital investments under par. (b) 2. more than the greater of $10,000,000 or 15 percent of the total amount of investments that the department may certify under par. (b) 2.

AB531-ASA1, s. 41 Section 41. 560.32 (2) (d) of the statutes is amended to read:

AB531-ASA1,18,22 560.32 (2) (d) If, as a result of the limitations under par. (b) or (c), the department may not certify the full amount requested in applications for certified capital investments submitted under par. (a), the department shall allocate prorate the amounts available for certification in order of priority based on the date on which the application was filed. If the amounts available for certification are insufficient to certify the full amount of all applications for certified capital investments that are submitted on the same day, the department shall prorate the available amount on the basis of the amount that the investor has committed to invest in the certified capital company under par. (a) among eligible applicants, except as otherwise provided in this paragraph. If the proration would result in a certified capital company having less than $10,000,000 in certified capital, the department may not allocate any amount to that certified capital company. If the proration would result in no certified capital company having $10,000,000 or more in certified capital, the department may promulgate rules to implement an alternative allocation procedure. Notwithstanding s. 227.24 (1) (a), (2) (b), and (3), the department is not required to provide evidence that promulgating a rule under this paragraph as an emergency rule is necessary for the preservation of the public peace, health, safety, or welfare and is not required to provide a finding of an emergency for a rule promulgated under this paragraph.

AB531-ASA1, s. 42 Section 42. 560.32 (3) of the statutes is renumbered 560.32 (3) (a) and amended to read:

AB531-ASA1,19,8 560.32 (3) (a) A certified investor may not, individually, or with or through one or more affiliates, own 10% or more of the equity securities in, be an affiliate, a general partner, or a manager of, or otherwise control the investments of the certified capital company. This subsection paragraph does not preclude a certified investor any person from exercising its legal rights and remedies, including interim management of a certified capital company, in the event that a certified capital company is in default of its statutory or contractual obligations to the certified investor that or any other person.

AB531-ASA1, s. 43 Section 43. 560.32 (3) (b) of the statutes is created to read:

AB531-ASA1,19,12 560.32 (3) (b) Paragraph (a) does not preclude any person from establishing controls to ensure that a certified capital company satisfies the requirements of s. 560.34 (1m).

AB531-ASA1, s. 44 Section 44. 560.33 (1) (intro.) of the statutes is amended to read:

AB531-ASA1,19,17 560.33 (1) Qualifications. (intro.) A Except as provided in sub. (2), a business is a qualified business if all of the following requirements are met, as of the time that a certified capital company, or any affiliate of the certified capital company, makes its first investment in the business, all of the following requirements are met:

AB531-ASA1, s. 45 Section 45. 560.33 (1) (a) of the statutes is amended to read:

AB531-ASA1,19,23 560.33 (1) (a) The business is headquartered in this state and its principal business operations are located in this state or the business commits to relocate its headquarters and its principal business operations to this state within 90 days after the date on which the certified capital company makes its first investment in the business.

AB531-ASA1, s. 46 Section 46. 560.33 (1) (b) of the statutes is renumbered 560.33 (1) (b) (intro.) and amended to read:

AB531-ASA1,20,2 560.33 (1) (b) (intro.) The business has no more than 100 employees, at and any of the following applies:

AB531-ASA1,20,3 1. At least 75% of whom those employees are employed in this state.

AB531-ASA1, s. 47 Section 47. 560.33 (1) (b) 2. of the statutes is created to read:

AB531-ASA1,20,6 560.33 (1) (b) 2. At least 75 percent of the total payroll of the business is paid to employees who are employed in this state.

AB531-ASA1, s. 48 Section 48. 560.33 (1) (e) of the statutes is amended to read:

AB531-ASA1,20,9 560.33 (1) (e) The business is not predominantly engaged in professional services provided by accountants, business consultants, lawyers, or physicians.

AB531-ASA1, s. 49 Section 49. 560.33 (1) (g) of the statutes is amended to read:

AB531-ASA1,20,13 560.33 (1) (g) The business is not engaged in banking or, lending, lobbying, or political consulting and does not make any loans to, or investments in, certified capital companies.

AB531-ASA1, s. 50 Section 50. 560.33 (1) (h) of the statutes is created to read:

AB531-ASA1,20,16 560.33 (1) (h) The business is not predominantly engaged in retail sales, unless the business is approved by the department under sub. (2).

AB531-ASA1, s. 51 Section 51. 560.33 (1) (i) of the statutes is created to read:

AB531-ASA1,20,21 560.33 (1) (i) The business was not organized by a certified capital company or an affiliate of a certified capital company. This paragraph does not prohibit a certified capital company from providing financial, technical, or similar advice to a business before making an investment in the business.

AB531-ASA1, s. 52 Section 52. 560.33 (1) (j) of the statutes is created to read:

AB531-ASA1,20,23 560.33 (1) (j) The business is engaged in at least one of the following activities:

AB531-ASA1,20,24 1. Manufacturing, processing, or assembling products.

AB531-ASA1,21,2 2. Providing services, unless the services are of such a nature that the department disapproves of the business under sub. (2).

AB531-ASA1,21,3 3. Conducting research and development.

AB531-ASA1,21,5 4. Conducting any other business that is not excluded under this subsection and that is approved by the department under sub. (2).

AB531-ASA1, s. 53 Section 53. 560.33 (1) (k) of the statutes is created to read:

AB531-ASA1,21,13 560.33 (1) (k) The business does not have a financial relationship with a certified capital company or any affiliate of a certified capital company before the date on which the certified capital company makes its first investment in the business, unless the business is approved under sub. (2) notwithstanding such a financial relationship. This paragraph does not prohibit a certified capital company from providing financial advice to a business before making an investment in the business.

AB531-ASA1, s. 54 Section 54. 560.33 (2) of the statutes is renumbered 560.33 (2) (a) and amended to read:

AB531-ASA1,22,6 560.33 (2) (a) A certified capital company may shall, prior to making an investment in a specific business, request a written opinion from the department that a business in which it proposes to invest is a qualified business. If the department determines that the business meets the requirements under sub. (1), the department shall issue a written opinion stating that the business is a qualified business provide the department with a description of the proposed investment in the form prescribed by the department. Within 15 business days of receiving the description, the department shall determine whether the business is a qualified business and the proposed investment is consistent with the certified capital company's investment criteria and, if the business is not a qualified business or the proposed investment is not consistent, notify the certified capital company in writing of the determination and the reasons for the determination. If the department fails to so notify the certified capital company within 15 business days of receiving the request, the business shall be deemed a qualified business and the investment shall be deemed consistent, notwithstanding any failure to satisfy sub. (1) or s. 560.34 (1) (f).

AB531-ASA1, s. 55 Section 55. 560.33 (2) (b) and (c) of the statutes are created to read:

AB531-ASA1,22,11 560.33 (2) (b) During the 15 business day period established under par. (a), the department may make a determination that a business is a qualified business, notwithstanding any failure to satisfy sub. (1), if the certified capital company's proposed investment in the business will further the goals of this subchapter.

AB531-ASA1,22,17 (c) If the department determines that a proposed investment is not consistent with a certified capital company's investment criteria, the certified capital company may, within 10 days after the department's decision, request a contested case hearing under s. 227.42 from the department. If the final administrative or judicial proceeding results in a determination that the investment is consistent, the department shall issue a redetermination accordingly.

AB531-ASA1, s. 56 Section 56. 560.34 (1) (intro.) of the statutes is amended to read:

AB531-ASA1,22,24 560.34 (1) Qualified investments requirements. (intro.) In order for a certified capital company to prevent disqualification under s. 560.37 of an investment pool, the certified capital company shall ensure that the investment pool makes qualified investments in accordance with the schedule under sub. (1m). An Except as provided in sub. (1g), an investment is a qualified investment if the investment meets all of the following requirements:

AB531-ASA1, s. 57 Section 57. 560.34 (1) (a) 1. of the statutes is amended to read: