SB261-SSA2,6,1
171.10 (4) (gwb) Early stage investment credit under s. 71.07 (5b).
SB261-SSA2, s. 9 2Section 9. 71.10 (4) (gx) of the statutes is created to read:
SB261-SSA2,6,33 71.10 (4) (gx) Qualified new business venture credit under s. 71.07 (5d).
SB261-SSA2, s. 10 4Section 10. 71.21 (4) of the statutes is amended to read:
SB261-SSA2,6,75 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di),
6(2dj), (2dL), (2dm), (2ts), (2dx), (3g), and (3s) , and (5b) and passed through to partners
7shall be added to the partnership's income.
SB261-SSA2, s. 11 8Section 11. 71.26 (2) (a) of the statutes is amended to read:
SB261-SSA2,6,239 71.26 (2) (a) Corporations in general. The "net income" of a corporation means
10the gross income as computed under the Internal Revenue Code as modified under
11sub. (3) minus the amount of recapture under s. 71.28 (1di) plus the amount of credit
12computed under s. 71.28 (1), (3), (4), and (5) plus the amount of the credit computed
13under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ts), (1dx), and (3g), and (5b)
14and not passed through by a partnership, limited liability company, or tax-option
15corporation that has added that amount to the partnership's, limited liability
16company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1) (g) plus
17the amount of losses from the sale or other disposition of assets the gain from which
18would be wholly exempt income, as defined in sub. (3) (L), if the assets were sold or
19otherwise disposed of at a gain and minus deductions, as computed under the
20Internal Revenue Code as modified under sub. (3), plus or minus, as appropriate, an
21amount equal to the difference between the federal basis and Wisconsin basis of any
22asset sold, exchanged, abandoned, or otherwise disposed of in a taxable transaction
23during the taxable year, except as provided in par. (b) and s. 71.45 (2) and (5).
SB261-SSA2, s. 12 24Section 12. 71.28 (5b) of the statutes is created to read:
SB261-SSA2,6,2525 71.28 (5b) Early stage investment credit. (a) Definitions. In this subsection:
SB261-SSA2,7,1
11. "Claimant" means a person who files a claim under this subsection.
SB261-SSA2,7,32 2. "Fund manager" means an investment fund manager certified under s.
3560.205 (2).
SB261-SSA2,7,104 (b) Filing claims. For taxable years beginning after December 31, 2004, subject
5to the limitations provided under this subsection and s. 560.205, a claimant may
6claim as a credit against the tax imposed under s. 71.23, up to the amount of those
7taxes, in each taxable year for 10 years, beginning with the taxable year in which the
8claimant's initial investment is made, 4 percent of the claimant's initial investment
9paid to a fund manager that the fund manager invests in a business certified under
10s. 560.205 (1).
SB261-SSA2,7,1311 (c) Limitations. 1. The maximum amount of the credits that may be claimed
12under this subsection and ss. 71.07 (5b) and 71.47 (5b) for all taxable years combined
13is $35,000,000.
SB261-SSA2,7,2214 2. Partnerships, limited liability companies, and tax-option corporations may
15not claim the credit under this subsection, but the eligibility for, and the amount of,
16the credit are based on their payment of amounts under par. (b). A partnership,
17limited liability company, or tax-option corporation shall compute the amount of
18credit that each of its partners, members, or shareholders may claim and shall
19provide that information to each of them. Partners, members of limited liability
20companies, and shareholders of tax-option corporations may claim the credit in
21proportion to their ownership interest or as specially allocated in their
22organizational documents.
SB261-SSA2,7,2423 (d) Administration. Subsection (4) (e) to (h), as it applies to the credit under
24sub. (4), applies to the credit under this subsection.
SB261-SSA2, s. 13 25Section 13. 71.30 (3) (eop) of the statutes is created to read:
SB261-SSA2,8,1
171.30 (3) (eop) Early stage investment credit under s. 71.28 (5b).
SB261-SSA2, s. 14 2Section 14. 71.34 (1) (g) of the statutes is amended to read:
SB261-SSA2,8,53 71.34 (1) (g) An addition shall be made for credits computed by a tax-option
4corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ts), (1dx), (3), and
5(3g), and (5b) and passed through to shareholders.
SB261-SSA2, s. 15 6Section 15. 71.45 (2) (a) 10. of the statutes is amended to read:
SB261-SSA2,8,127 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit
8computed under s. 71.47 (1dd) to (1dx) and (5b) and not passed through by a
9partnership, limited liability company or tax-option corporation that has added that
10amount to the partnership's, limited liability company's or tax-option corporation's
11income under s. 71.21 (4) or 71.34 (1) (g) and the amount of credit computed under
12s. 71.47 (1), (3), (4) and (5).
SB261-SSA2, s. 16 13Section 16. 71.47 (5b) of the statutes is created to read:
SB261-SSA2,8,1414 71.47 (5b) Early stage investment credit. (a) Definitions. In this subsection:
SB261-SSA2,8,1515 1. "Claimant" means a person who files a claim under this subsection.
SB261-SSA2,8,1716 2. "Fund manager" means an investment fund manager certified under s.
17560.205 (2).
SB261-SSA2,8,2418 (b) Filing claims. For taxable years beginning after December 31, 2004, subject
19to the limitations provided under this subsection and s. 560.205, a claimant may
20claim as a credit against the tax imposed under s. 71.43, up to the amount of those
21taxes, in each taxable year for 10 years, beginning with the taxable year in which the
22claimant's initial investment is made, 4 percent of the claimant's initial investment
23paid to a fund manager that the fund manager invests in a business certified under
24s. 560.205 (1).
SB261-SSA2,9,3
1(c) Limitations. 1. The maximum amount of the credits that may be claimed
2under this subsection and ss. 71.07 (5b) and 71.28 (5b) for all taxable years combined
3is $35,000,000.
SB261-SSA2,9,124 2. Partnerships, limited liability companies, and tax-option corporations may
5not claim the credit under this subsection, but the eligibility for, and the amount of,
6the credit are based on their payment of amounts under par. (b). A partnership,
7limited liability company, or tax-option corporation shall compute the amount of
8credit that each of its partners, members, or shareholders may claim and shall
9provide that information to each of them. Partners, members of limited liability
10companies, and shareholders of tax-option corporations may claim the credit in
11proportion to their ownership interest or as specially allocated in their
12organizational documents.
SB261-SSA2,9,1413 (d) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
14s. 71.28 (4), applies to the credit under this subsection.
SB261-SSA2, s. 17 15Section 17. 71.49 (1) (eop) of the statutes is created to read:
SB261-SSA2,9,1616 71.49 (1) (eop) Early stage investment credit under s. 71.47 (5b).
SB261-SSA2, s. 18 17Section 18. 77.92 (4) of the statutes is amended to read:
SB261-SSA2,9,2518 77.92 (4) "Net business income", with respect to a partnership, means taxable
19income as calculated under section 703 of the Internal Revenue Code; plus the items
20of income and gain under section 702 of the Internal Revenue Code, including taxable
21state and municipal bond interest and excluding nontaxable interest income or
22dividend income from federal government obligations; minus the items of loss and
23deduction under section 702 of the Internal Revenue Code, except items that are not
24deductible under s. 71.21; plus guaranteed payments to partners under section 707
25(c) of the Internal Revenue Code; plus the credits claimed under s. 71.07 (2dd), (2de),

1(2di), (2dj), (2dL), (2dm), (2dr), (2ts), (2dx), and (3g), and (3s), and (5b); and plus or
2minus, as appropriate, transitional adjustments, depreciation differences, and basis
3differences under s. 71.05 (13), (15), (16), (17), and (19); but excluding income, gain,
4loss, and deductions from farming. "Net business income", with respect to a natural
5person, estate, or trust, means profit from a trade or business for federal income tax
6purposes and includes net income derived as an employee as defined in section 3121
7(d) (3) of the Internal Revenue Code.
SB261-SSA2, s. 19 8Section 19. 560.03 (25) of the statutes is created to read:
SB261-SSA2,10,129 560.03 (25) In cooperation with the department of financial institutions and
10the board of regents of the University of Wisconsin System, provide education and
11other support to facilitate the development networks of bona fide angel investors, as
12defined in s. 71.07 (5d) (a) 1.
SB261-SSA2, s. 20 13Section 20. 560.205 of the statutes is created to read:
SB261-SSA2,10,20 14560.205 Early stage business investment program. (1) Angel
15investment tax credits.
The department shall implement a program to certify
16businesses for purposes of s. 71.07 (5d). A business desiring certification shall
17submit an application to the department in each taxable year for which the business
18desires certification. Unless otherwise provided under the rules of the department,
19a business may be certified under this subsection, and may maintain such
20certification, only if the business satisfies all of the following conditions:
SB261-SSA2,10,2121 (a) It has its headquarters in this state.
SB261-SSA2,10,2322 (b) At least 51 percent of the employees employed by the business are employed
23in this state.
SB261-SSA2,11,3
1(c) Its average annual net income, if any, for each of the 2 taxable years
2immediately preceding the taxable year to which the certification applies does not
3exceed $5,000,000.
SB261-SSA2,11,54 (d) Its net worth, if any, in the taxable year to which the certification applies
5does not exceed $10,000,000.
SB261-SSA2,11,86 (e) It is engaged in, or has committed to engage in, manufacturing, agriculture,
7or processing or assembling products and conducting research and development or
8developing a new product or business process.
SB261-SSA2,11,129 (f) It is not engaged in real estate development, insurance, banking, lending,
10lobbying, political consulting, professional services provided by attorneys,
11accountants, business consultants, physicians, or health care consultants, wholesale
12or retail trade, leisure, hospitality, transportation, or construction.
SB261-SSA2,11,1313 (g) It has less than 100 employees.
SB261-SSA2,11,1414 (h) It has been in operation in this state for not more than 7 consecutive years.
SB261-SSA2,11,1615 (j) It has not received more than $1,000,000 in investments that have qualified
16for tax credits under s. 71.07 (5d).
SB261-SSA2,12,2 17(2) Early stage seed investment tax credits. The department shall implement
18a program to certify investment fund managers for purposes of ss. 71.07 (5b), 71.28
19(5b), and 71.47 (5b). An investment fund manager desiring certification shall submit
20an application to the department. In determining whether to certify an investment
21fund manager, the department shall consider the investment fund manager's
22experience in managing venture capital funds, the past performance of investment
23funds managed by the applicant, the expected level of investment in the investment
24fund to be managed by the applicant, and any other relevant factors. The

1department may certify only investment fund managers that commit to consider
2placing investments in businesses certified under sub. (1).
SB261-SSA2,12,6 3(3) Administration. (a) List of certified businesses and investment fund
4managers.
The department shall maintain a list of businesses certified under sub.
5(1) and investment fund managers certified under sub. (2) and shall permit public
6access to the lists through the department's Internet website.
SB261-SSA2,12,97 (b) Notification of department of revenue. The department of commerce shall
8notify the department of revenue of every certification issued under sub. (1) and (2)
9and the date on which any such certification is revoked or expires.
SB261-SSA2,12,1210 (c) Annual report. Annually, no later than September 15, the department shall
11submit a report to the chief clerk of each house of the legislature for distribution to
12the legislature under s. 13.172 (2), listing all of the following information:
SB261-SSA2,12,1413 1. The total amount of tax credits claimed under ss. 71.07 (5b) and (5d), 71.28
14(5b), and 71.47 (5b) per taxable year.
SB261-SSA2,12,1715 2. The name of each business in which investments qualifying for such tax
16credits were made, the amount of such tax credits, and the amount of such
17investments.
SB261-SSA2,12,1818 3. Any other information the department considers reasonable to include.
SB261-SSA2,13,219 (d) Rules. The department of commerce, in consultation with the department
20of revenue, shall promulgate rules to administer this section. The rules shall limit
21the aggregate amount of tax credits under s. 71.07 (5d) that may be claimed for
22investments in businesses certified under sub. (1) at $1,500,000 per taxable year for
23taxable years beginning on January 1, 2006, and January 1, 2007, and $3,000,000
24per taxable year for each succeeding taxable year through the taxable year beginning
25on January 1, 2016. The rules may not permit the department of commerce or the

1department of revenue to assign a dollar amount of investments qualifying for the
2tax credits under s. 71.07 (5d) that a particular business may subsequently raise.
SB261-SSA2, s. 21 3Section 21. 560.275 of the statutes is created to read:
SB261-SSA2,13,7 4560.275 Technology commercialization grant and loan program. (1)
5Definition. In this section, "Project costs" means the total cost of a project financed,
6at least in part, by a grant or loan under sub. (2), calculated as provided by rule of
7the department.
SB261-SSA2,13,15 8(2) Authorized grants and loans. (a) Early stage planning grants and loans.
9The department may make a grant or loan from the appropriation under s. 20.143
10(1) (dk) or (ik) for the purpose of funding professional services related to completing
11an application to be submitted to the federal government for the purpose of obtaining
12early stage research and development funding or for the purpose of funding
13professional services that are required to accomplish specific tasks established as a
14condition of receiving early stage financing from 3rd parties that is necessary for
15business development.
SB261-SSA2,13,2016 (b) Matching grants and loans. 1. The department may make a grant or loan
17from the appropriation under s. 20.143 (1) (dk) or (ik) for the purpose of funding
18professional services related to developing a proposed technologically innovative
19product, process, or service, if the applicant has received a grant from the federal
20government for a substantially similar purpose.
SB261-SSA2,13,2521 2. The department may make a grant or loan from the appropriation under s.
2220.143 (1) (dk) or (ik) for the purpose of funding professional services related to the
23accelerated commercialization of a technologically innovative product, process, or
24service, if the federal government has notified the applicant that the applicant will
25receive a grant from the federal government for a substantially similar purpose.
SB261-SSA2,14,10
1(c) Bridge grants and loans. The department may make a grant or loan from
2the appropriation under s. 20.143 (1) (dk) or (ik) to a person who has received early
3stage financing from 3rd parties or a grant from the federal government to fund early
4stage research and development and who has sought additional early stage financing
5from 3rd parties or applied for an additional grant from the federal government to
6fund early stage research and development. A grant or loan under this paragraph
7shall be for the purpose of funding professional services necessary to maintain the
8project research and management team and funding basic operations until the
9applicant's additional 3rd party financing request or federal grant application is
10approved or denied.
SB261-SSA2,14,1311 (d) Venture capital grants and loans. The department may make a grant or loan
12from the appropriation under s. 20.143 (1) (dk) or (ik) for the purpose of enhancing
13the applicant's ability to obtain early stage financing from 3rd parties.
SB261-SSA2,14,1714 (e) Entrepreneurial and technology transfer center grants. The department
15may make a grant from the appropriation under s. 20.143 (1) (dk) or (ik) for the
16purpose of supporting any entrepreneurial and technology transfer center that
17satisfies all of the following criteria:
SB261-SSA2,14,1818 1. The center serves multiple regions of this state.
SB261-SSA2,14,2019 2. The center provides assistance, other than financial assistance, to
20entrepreneurs to facilitate business development.
SB261-SSA2,14,2221 3. The center reviews and analyzes entrepreneurial business plans and offers
22advice concerning the improvement of the plans.
SB261-SSA2,14,2423 4. The center provides advice to entrepreneurs concerning patent, trademark,
24and copyright issues.
SB261-SSA2,14,2525 5. The center provides appropriate referral services to entrepreneurs.
SB261-SSA2,15,4
1(3) Grant and loan amounts. (a) Early stage planning grants and loans. In
2determining the amount of a grant or loan under sub. (2) (a), the department shall
3consider all of the following, in addition to any other information the department
4considers relevant:
SB261-SSA2,15,65 1. The amount of economic impact the applicant, if successful, will have in this
6state.
SB261-SSA2,15,77 2. The quality of any businesses assisting the applicant.
SB261-SSA2,15,88 3. The level of need demonstrated by the applicant.
SB261-SSA2,15,99 4. The applicant's record of obtaining early stage financing in the past.
SB261-SSA2,15,1210 (b) Matching grants and loans. In determining the amount of a grant or loan
11under sub. (2) (b), the department shall consider all of the following criteria, in
12addition to any other information the department considers relevant:
SB261-SSA2,15,1313 1. The viability of the applicant's business.
SB261-SSA2,15,1414 2. The likelihood that the applicant will successfully commercialize technology.
SB261-SSA2,15,1515 3. The applicant's management plan and management team.
SB261-SSA2,15,1716 4. The amount of economic impact the applicant, if successful, will have in this
17state.
SB261-SSA2,15,1818 5. The applicant's record of obtaining early stage financing in the past.
SB261-SSA2,15,20 19(4) Limitations on grant and loan amounts. (a) Early stage planning grants
20and loans.
A grant or loan under sub. (2) (a) may not exceed $15,000.
SB261-SSA2,15,2221 (b) Matching grants and loans. A grant or loan under sub. (2) (b) may not
22exceed 20 percent of the project costs or $250,000, whichever is less.
SB261-SSA2,15,2423 (c) Bridge grants and loans. A grant or loan under sub. (2) (c) may not exceed
2475 percent of the project costs or $100,000, whichever is less.
SB261-SSA2,16,2
1(d) Venture capital grants and loans. A grant or loan under sub. (2) (d) may not
2exceed 50 percent of the project costs or $250,000, whichever is less.
SB261-SSA2,16,43 (e) Entrepreneurial and technology transfer grants. The total amount of grants
4under sub. (2) (e) may not exceed $500,000 in any fiscal year.
SB261-SSA2,16,6 5(5) Eligibility. The department may make a grant or loan under sub. (2) (a)
6to (d) to an applicant only if all of the following apply:
SB261-SSA2,16,77 (a) The applicant:
SB261-SSA2,16,138 1. Is a small business, or individual entrepreneur who intends to form a small
9business, that is completing a grant application to be submitted to the federal
10government for the purpose of obtaining early stage research and development
11funding, except that if the application is for a grant under sub. (2) (b), the
12requirement that the applicant be completing a federal grant application does not
13apply; or
SB261-SSA2,16,1714 2. Is an individual who is starting or developing a business which has
15significant growth potential, as evidenced by the potential to attract and receive
16early stage financing from 3rd parties, but who needs assistance with a specific facet
17of starting or developing the business.
SB261-SSA2,16,2018 (b) If the applicant seeks a grant or loan under sub. (2) (a), the applicant has
19sufficient funding from sources other than the state to finance at least 25% of the
20project costs.
SB261-SSA2,16,2121 (c) The applicant has or will have a business location in this state.
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