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.
AB531-ASA1,25,2
1560.34
(1) (f) The investment is consistent with the certified capital company's
2investment criteria.
AB531-ASA1,25,84
560.34
(1e) Use of certified investments for particular purposes. (a) Except
5as provided in pars. (b) and (c), a certified capital company may expend moneys in
6an investment pool to purchase, for the benefit of its certified investors, U.S. treasury
7securities, other investment-grade securities, a guaranty, indemnity, bond,
8insurance policy, or other payment undertaking, or any combination thereof.
AB531-ASA1,25,119
(b) No more than one of the certified investors of the certified capital company,
10or affiliate of such a certified investor, may provide a guaranty, indemnity, bond,
11insurance policy, or other payment undertaking under par. (a).
AB531-ASA1,25,1412
(c) With respect to a certified capital company that receives certified capital
13investments under s. 560.32 (2) (b) 2., no more than 25 percent of any particular
14investment pool may be expended under par. (a).
AB531-ASA1,25,1816
560.34
(1g) Discretionary exemptions. The department may grant an
17exemption from any requirement under sub. (1) if the certified capital company is in
18substantial compliance with the requirement.
AB531-ASA1, s. 68
19Section
68. 560.34 (1m) (a) 2. of the statutes is renumbered 560.34 (1m) (a)
202. a. and amended to read:
AB531-ASA1,25,2421
560.34
(1m) (a) 2. a.
Within With respect to a certified capital company that
22receives certified capital investments under s. 560.32 (2) (b) 1., within 5 years after
23the investment date for a particular investment pool, at least
50% 50 percent of the
24investment pool shall be placed in qualified investments.
AB531-ASA1, s. 69
25Section
69. 560.34 (1m) (a) 2. b. of the statutes is created to read:
AB531-ASA1,26,5
1560.34
(1m) (a) 2. b. With respect to a certified capital company that receives
2certified capital investments under s. 560.32 (2) (b) 2., within 5 years after the
3investment date for a particular investment pool, at least 50 percent of the
4investment pool shall be placed in qualified investments and, of such 50 percent, at
5least 50 percent shall be placed in qualified investments in early stage businesses.
AB531-ASA1,26,207
560.34
(1m) (b) The proceeds of all capital of a qualified investment returned
8to a certified capital company by a qualified business may be placed in new qualified
9investments, which shall count toward the percentage requirements under par. (a)
10and s. 560.36
(3) (1) (c). The department shall promulgate rules governing the extent
11to which a reinvestment of proceeds from the sale of a qualified investment in a
12qualified business may be counted toward the percentage requirements under par.
13(a) and ss. 560.36
(3) (1) (c) and 560.37 (3m) (a)
2. These rules may provide that
14reinvested proceeds from the sale of short-term investments shall be only partially
15counted toward the percentage requirements under par. (a) and ss. 560.36
(3) (1) (c) 16and 560.37 (3m) (a)
2. The rules may also provide that proceeds from the sale of an
17investment in a qualified business that are reinvested in that qualified business, or
18an affiliate of that qualified business, shall be only partially counted toward the
19percentage requirements under par. (a) and ss. 560.36
(3) (1) (c) and 560.37 (3m) (a)
202.
AB531-ASA1, s. 71
21Section
71. 560.34 (2) of the statutes is renumbered 560.34 (2) (intro.) and
22amended to read:
AB531-ASA1,27,323
560.34
(2) (intro.)
Nonqualified investments. All certified capital investments
24in a certified capital company that are not invested in qualified investments may be
25held or invested by the certified capital company
as it considers appropriate, except
1that a certified capital company may not invest certified capital investments in an
2insurance company or in an affiliate of an insurance company.
only in any of the
3following:
AB531-ASA1, s. 72
4Section
72. 560.34 (2) (a) to (k) of the statutes are created to read:
AB531-ASA1,27,65
560.34
(2) (a) Deposits with a federally insured financial institution, as defined
6in s. 705.01 (3).
AB531-ASA1,27,87
(b) Certificates of deposit in a federally insured financial institution, as defined
8in s. 705.01 (3).
AB531-ASA1,27,119
(c) Investment securities that are obligations of the United States or its
10agencies or instrumentalities, or that are obligations that are guaranteed fully as to
11principal and interest by the United States.
AB531-ASA1,27,1312
(d) Commercial paper rated at least "A1," "P1," or the equivalent, by a
13nationally recognized credit rating organization.
AB531-ASA1,27,1514
(e) Debt instruments rated at least "AA" or its equivalent by a nationally
15recognized credit rating organization.
AB531-ASA1,27,1916
(f) Debt instruments issued by, or guaranteed with respect to payment by, an
17entity whose unsecured indebtedness is rated at least "AA" or its equivalent by a
18nationally recognized credit rating organization and which are not subordinated to
19other unsecured indebtedness of the issuer or guarantor, as applicable.
AB531-ASA1,27,2220
(g) Swaps designed to realize or protect the value of a qualified investment, if
21the counterparty is rated at least "A" or its equivalent by a nationally recognized
22credit rating organization.
AB531-ASA1,27,2323
(h) Obligations of the state or any political subdivision of the state.
AB531-ASA1,27,2524
(i) Interests in money market or other mutual funds, the portfolios of which are
25limited to cash and other permissible investments described in this subsection.
AB531-ASA1,28,1
1(j) A small business investment company that is approved by the department.
AB531-ASA1,28,22
(k) Any other investments approved in advance in writing by the department.