AB531-ASA1,14,1413
560.30
(10) (intro.) "Qualified distribution" means a distribution or payment
14by a certified capital company
to its equity holders for any of the following:
AB531-ASA1,14,1716
560.30
(10) (a) The costs of forming
,
and syndicating
, managing or operating 17the certified capital company
, up to $750,000.
AB531-ASA1,14,2119
560.30
(10) (b) An annual management fee that does not exceed 2.5% of the
20certified capital company's total certified capital
or the cost of managing and
21operating the certified capital company, whichever is less.
AB531-ASA1,15,224
560.30
(10) (d) A projected increase in federal or state taxes,
including 25excluding penalties and interest on those taxes, of the equity owners of the certified
1capital company if those amounts are related to the certified capital company's
2ownership, management
, or operation.
AB531-ASA1,15,54
560.30
(10) (e) Reasonable costs associated with applying for qualified federal
5funding programs, as determined by the department.
AB531-ASA1, s. 29
6Section
29. 560.31 (1) of the statutes is renumbered 560.31 (1) (a) and
7amended to read:
AB531-ASA1,15,138
560.31
(1) (a) The department shall promulgate rules establishing procedures
9under which a person may apply to become a certified capital company
for receiving
10certified capital investments under s. 560.32 (2) (b) 1. or a certified capital company
11for receiving certified capital investments under s. 560.32 (2) (b) 2. The department
12shall grant or deny an application for certification under this section within 30 days
13of the date of application.
AB531-ASA1,15,25
14(b) If the department denies certification, the department shall include with
15the denial a detailed description of the grounds for the refusal, including suggestions
16for removal of those grounds.
A person may submit an amended application within
1715 days of receipt of a notice of denial. The department shall grant or deny the
18amended application within 15 days of the date of the amended application. If the
19department denies certification based upon the amended application, the
20department shall include with the denial a detailed description of the grounds for the
21refusal. A person whose amended application is denied may, within 10 days after the
22department's decision, request a contested case hearing under s. 227.42 from the
23department. If the final administrative or judicial proceeding results in a
24determination that the application was denied in error, the department shall revise
25its determination accordingly.
AB531-ASA1, s. 30
1Section
30. 560.31 (2) (intro.) of the statutes is amended to read:
AB531-ASA1,16,42
560.31
(2) Requirements for certification. (intro.) The department
shall may 3certify a person as a certified capital company if the department determines that all
4of the following conditions have been met:
AB531-ASA1,16,86
560.31
(2) (b)
The At the time of application and on the date on which the person
7is certified, the person has a net worth
, at the time of application, of at least $500,000
8and
has at least $500,000 in cash, cash equivalents
, and marketable securities.
AB531-ASA1,16,1210
560.31
(2) (g) The person agrees to maintain in this state an investment office
11and staff actively engaged in making investments until all investment pools have
12been decertified.
AB531-ASA1,16,2114
560.31
(2) (h) The person has provided the department with a list of all persons
15that have an ownership interest in the person as provided under this paragraph. The
16list shall include the percentage ownership interest of each owner and indicate
17whether the interest is voting or nonvoting. If the person is an entity that is
18registered under
15 USC 78l (g) or required to file reports under
15 USC 78o (d), the
19person shall list only those persons having beneficial ownership of equity securities
20of at least 5 percent. If a list contains the name of a business entity, the person shall
21also include a list of all persons that have an ownership interest in the entity.
AB531-ASA1,16,2423
560.31
(2) (i) The person has provided the department with a business plan
24covering at least the 5-year period following the date of application.
AB531-ASA1,17,3
1560.31
(2) (j) The person has provided the department with the person's
2investment strategy, along with a description of the investment criteria the person
3intends to follow.
AB531-ASA1,17,65
560.31
(2) (k) The person has provided the department with the person's
6organizational chart.
AB531-ASA1, s. 37
7Section
37. 560.32 (2) (b) of the statutes is renumbered 560.32 (2) (b) 1. and
8amended to read:
AB531-ASA1,17,129
560.32
(2) (b) 1.
The Prior to the effective date of this subdivision .... [revisor
10inserts date], the department may certify an investment under this subsection only
11if, after the certification, the department will not have certified a total of more than
12$50,000,000 in investments under this subsection.
AB531-ASA1, s. 38
13Section
38. 560.32 (2) (b) 2. of the statutes is created to read:
AB531-ASA1,17,1914
560.32
(2) (b) 2. Beginning on the effective date of this subdivision .... [revisor
15inserts date], the department shall certify investments for which notices have been
16received under par. (a), subject to the limit specified in this subdivision. The
17department may certify an investment under this subdivision only if, after the
18certification, the department will not have certified a total of more than $75,000,000
19in investments under this subdivision.
AB531-ASA1, s. 39
20Section
39. 560.32 (2) (c) of the statutes is renumbered 560.32 (2) (c) 1.
AB531-ASA1, s. 40
21Section
40. 560.32 (2) (c) 2. of the statutes is created to read:
AB531-ASA1,18,222
560.32
(2) (c) 2. The department may not certify an investment under par. (b)
232. if, after the certification, the investor, together with all affiliates of the investor,
24would have in certified capital investments under par. (b) 2. more than the greater
1of $10,000,000 or 15 percent of the total amount of investments that the department
2may certify under par. (b) 2.
AB531-ASA1,18,224
560.32
(2) (d) If, as a result of the limitations under par. (b) or (c), the
5department may not certify the full amount requested in applications for certified
6capital investments submitted under par. (a), the department shall
allocate prorate 7the amounts available for certification
in order of priority based on the date on which
8the application was filed. If the amounts available for certification are insufficient
9to certify the full amount of all applications for certified capital investments that are
10submitted on the same day, the department shall prorate the available amount on
11the basis of the amount that the investor has committed to invest in the certified
12capital company under par. (a) among eligible applicants, except as otherwise
13provided in this paragraph. If the proration would result in a certified capital
14company having less than $10,000,000 in certified capital, the department may not
15allocate any amount to that certified capital company. If the proration would result
16in no certified capital company having $10,000,000 or more in certified capital, the
17department may promulgate rules to implement an alternative allocation procedure.
18Notwithstanding s. 227.24 (1) (a), (2) (b), and (3), the department is not required to
19provide evidence that promulgating a rule under this paragraph as an emergency
20rule is necessary for the preservation of the public peace, health, safety, or welfare
21and is not required to provide a finding of an emergency for a rule promulgated under
22this paragraph.
AB531-ASA1, s. 42
23Section
42. 560.32 (3) of the statutes is renumbered 560.32 (3) (a) and
24amended to read:
AB531-ASA1,19,8
1560.32
(3) (a) A certified investor may not, individually, or with or through one
2or more affiliates, own 10% or more of the equity securities in, be
an affiliate, a
3general partner
, or
a manager of, or otherwise control the investments of the certified
4capital company. This
subsection paragraph does not preclude
a certified investor 5any person from exercising its legal rights and remedies, including interim
6management of a certified capital company, in the event that a certified capital
7company is in default of its statutory or contractual obligations to
the certified
8investor that or any other person.
AB531-ASA1,19,1210
560.32
(3) (b) Paragraph (a) does not preclude any person from establishing
11controls to ensure that a certified capital company satisfies the requirements of s.
12560.34 (1m).
AB531-ASA1, s. 44
13Section
44. 560.33 (1) (intro.) of the statutes is amended to read:
AB531-ASA1,19,1714
560.33
(1) Qualifications. (intro.)
A Except as provided in sub. (2), a business
15is a qualified business if
all of the following requirements are met, as of the time that
16a certified capital company
, or any affiliate of the certified capital company
, makes
17its first investment in the business
, all of the following requirements are met:
AB531-ASA1,19,2319
560.33
(1) (a) The business is headquartered in this state and its principal
20business operations are located in this state
or the business commits to relocate its
21headquarters and its principal business operations to this state within 90 days after
22the date on which the certified capital company makes its first investment in the
23business.
AB531-ASA1, s. 46
24Section
46. 560.33 (1) (b) of the statutes is renumbered 560.33 (1) (b) (intro.)
25and amended to read:
AB531-ASA1,20,2
1560.33
(1) (b) (intro.) The business has no more than 100 employees
, at and any
2of the following applies:
AB531-ASA1,20,3
31. At least 75% of
whom those employees are employed in this state.
AB531-ASA1,20,65
560.33
(1) (b) 2. At least 75 percent of the total payroll of the business is paid
6to employees who are employed in this state.
AB531-ASA1,20,98
560.33
(1) (e) The business is not predominantly engaged in professional
9services provided by accountants,
business consultants, lawyers
, or physicians.
AB531-ASA1,20,1311
560.33
(1) (g) The business is not engaged in banking
or, lending
, lobbying, or
12political consulting and does not make any loans to, or investments in, certified
13capital companies.
AB531-ASA1,20,1615
560.33
(1) (h) The business is not predominantly engaged in retail sales, unless
16the business is approved by the department under sub. (2).
AB531-ASA1,20,2118
560.33
(1) (i) The business was not organized by a certified capital company or
19an affiliate of a certified capital company. This paragraph does not prohibit a
20certified capital company from providing financial, technical, or similar advice to a
21business before making an investment in the business.
AB531-ASA1,20,2323
560.33
(1) (j) The business is engaged in at least one of the following activities:
AB531-ASA1,20,2424
1. Manufacturing, processing, or assembling products.
AB531-ASA1,21,2
12. Providing services, unless the services are of such a nature that the
2department disapproves of the business under sub. (2).
AB531-ASA1,21,33
3. Conducting research and development.
AB531-ASA1,21,54
4. Conducting any other business that is not excluded under this subsection
5and that is approved by the department under sub. (2).
AB531-ASA1,21,137
560.33
(1) (k) The business does not have a financial relationship with a
8certified capital company or any affiliate of a certified capital company before the
9date on which the certified capital company makes its first investment in the
10business, unless the business is approved under sub. (2) notwithstanding such a
11financial relationship. This paragraph does not prohibit a certified capital company
12from providing financial advice to a business before making an investment in the
13business.
AB531-ASA1, s. 54
14Section
54. 560.33 (2) of the statutes is renumbered 560.33 (2) (a) and
15amended to read:
AB531-ASA1,22,616
560.33
(2) (a) A certified capital company
may shall, prior to making an
17investment in a specific business,
request a written opinion from the department
18that a business in which it proposes to invest is a qualified business. If the
19department determines that the business meets the requirements under sub. (1), the
20department shall issue a written opinion stating that the business is a qualified
21business provide the department with a description of the proposed investment in
22the form prescribed by the department. Within 15 business days of receiving the
23description, the department shall determine whether the business is a qualified
24business and the proposed investment is consistent with the certified capital
25company's investment criteria and, if the business is not a qualified business or the
1proposed investment is not consistent, notify the certified capital company in writing
2of the determination and the reasons for the determination. If the department fails
3to so notify the certified capital company within 15 business days of receiving the
4request, the business shall be deemed a qualified business and the investment shall
5be deemed consistent, notwithstanding any failure to satisfy sub. (1) or s. 560.34 (1)
6(f).
AB531-ASA1, s. 55
7Section
55. 560.33 (2) (b) and (c) of the statutes are created to read:
AB531-ASA1,22,118
560.33
(2) (b) During the 15 business day period established under par. (a), the
9department may make a determination that a business is a qualified business,
10notwithstanding any failure to satisfy sub. (1), if the certified capital company's
11proposed investment in the business will further the goals of this subchapter.
AB531-ASA1,22,1712
(c) If the department determines that a proposed investment is not consistent
13with a certified capital company's investment criteria, the certified capital company
14may, within 10 days after the department's decision, request a contested case hearing
15under s. 227.42 from the department. If the final administrative or judicial
16proceeding results in a determination that the investment is consistent, the
17department shall issue a redetermination accordingly.
AB531-ASA1, s. 56
18Section
56. 560.34 (1) (intro.) of the statutes is amended to read:
AB531-ASA1,22,2419
560.34
(1) Qualified investments requirements. (intro.) In order for a
20certified capital company to prevent disqualification under s. 560.37 of an
21investment pool, the certified capital company shall ensure that the investment pool
22makes qualified investments in accordance with the schedule under sub. (1m).
An 23Except as provided in sub. (1g), an investment is a qualified investment if the
24investment meets all of the following requirements:
AB531-ASA1, s. 57
25Section
57. 560.34 (1) (a) 1. of the statutes is amended to read:
AB531-ASA1,23,7
1560.34
(1) (a) 1.
An equity security Except as otherwise provided in this
2subdivision, equity securities or options, warrants, or other equity participation
3instruments of the qualified business
, unless the certified capital company, after the
4investment and assuming full conversion and exercise of any equity participation
5instrument, owns more than 50 percent of the voting equity of the qualified business.
6The department may grant an exception to this percentage limitation under s. 560.33
7(2).
AB531-ASA1, s. 58
8Section
58. 560.34 (1) (a) 2. a. of the statutes is amended to read:
AB531-ASA1,23,119
560.34
(1) (a) 2. a. The debt is
unsecured not secured by a first priority lien on
10any of the assets of the qualified business at the time of the certified capital
11company's qualified investment in the qualified business.
AB531-ASA1, s. 59
12Section
59. 560.34 (1) (a) 2. b. of the statutes is amended to read:
AB531-ASA1,23,1913
560.34
(1) (a) 2. b.
The Except as otherwise provided in this subd. 2. b., the debt
14is convertible into equity securities or
options, warrants, or other equity
15participation instruments
such as options or warrants
or has attached equity
16participation rights, unless the debt and the equity participation instruments, if
17fully converted and exercised, would result in the certified capital company owning
18more than 50 percent of the voting equity of the qualified business. The department
19may grant an exception to this percentage limitation under s. 560.33 (2).
AB531-ASA1,23,2321
560.34
(1) (b) As a condition of the investment, the qualified business agrees
22not to use the proceeds from the investment for the purpose of relocating its
23operations
other than to this state.
AB531-ASA1,24,3
1560.34
(1) (c) As a condition of the investment, the qualified business agrees,
2as long as the certified capital
corporation company continues to hold the
3investment, not to relocate its headquarters out of this state.
AB531-ASA1, s. 62
4Section
62. 560.34 (1) (d) of the statutes is renumbered 560.34 (1) (d) (intro.)
5and amended to read:
AB531-ASA1,24,86
560.34
(1) (d) (intro.) As a condition of the investment, the qualified business
7agrees, as long as the certified capital
corporation
company continues to hold the
8investment, to
maintain do any of the following:
AB531-ASA1,24,9
91. Maintain at least 75% of its employees in this state.
AB531-ASA1, s. 63
10Section
63. 560.34 (1) (d) 2. of the statutes is created to read:
AB531-ASA1,24,1211
560.34
(1) (d) 2. Pay at least 75 percent of its total payroll to employees who
12are employed in this state.
AB531-ASA1,24,2314
560.34
(1) (e) As a condition of the investment, the qualified business agrees,
15as long as the certified capital
corporation company continues to hold the
16investment, to maintain at least 75% of its employees at work sites that were
17maintained by the qualified business at the time that the investment was made
or
18at work sites that are no more than 25 miles from the place where the headquarters
19or principal business operations of the qualified business are located at the time of
20the investment, unless the qualified business obtains an exemption from the
21department under this paragraph. The department may grant an exemption unless
22it determines that the qualified business is locating the employees at new sites to
23take advantage of lower wage rates in the areas where the new sites are located.