AB524: Bill Text

AB524, s. 19 Section 19. 560.20 of the statutes is created to read:

AB524,11,11 560.20 Venture capital and seed capital investment program. (1) Definitions. In this section, "board" means the Wisconsin capital investment board.

AB524,11,15 (2) Certification. (a) The board, in consultation with the department, shall promulgate rules establishing a procedure for the board to certify venture capital funds as eligible to receive equity investments that qualify for the tax credits under ss. 71.07 (2r), 71.28 (2r), and 71.47 (2r). The rules shall do all of the following:

AB524,11,17 1. Require a venture capital fund that desires to obtain a certification to file an application with the board.

AB524,11,22 2. Permit a venture capital fund to obtain a certification only if the venture capital fund is a private seed and venture capital partnership or entity fund, the venture capital fund maintains a physical presence in Wisconsin, and the venture capital fund makes a commitment to consider making equity investments in businesses located in Wisconsin.

AB524,12,2 3. Require an applicant for certification or a certified venture capital fund to provide the board with any information the board determines is necessary to ensure eligibility for certification and compliance with this paragraph and rules promulgated under this paragraph.

AB524,12,6 (b) The board, in consultation with the department, shall promulgate rules establishing a procedure for the board to certify community-based seed capital funds as eligible to receive investments that qualify for the applicable tax credit under s. 71.07 (5d). The rules shall do all of the following:

AB524,12,8 1. Require a community-based seed capital fund that desires to obtain a certification to file an application with the board.

AB524,12,12 2. Permit a community-based seed capital fund to obtain a certification only if the fund is a partnership or limited liability company with a total of both capital commitments from investors and investments in businesses certified under par. (c) of at least $500,000 but not more than $3,000,000.

AB524,12,19 3. Permit a community-based seed capital fund to obtain a certification only if the fund has at least 10 individual investors who are not affiliates with each other and no investor and his or her affiliates own more than 25% of the ownership interests outstanding in the fund. In this subdivision, "affiliate" means a spouse, child, or sibling of an investor or a corporation, partnership, limited liability company, tax-option corporation, or trust in which an investor has a controlling equity interest or in which an investor exercises management control.

AB524,12,23 4. Require an applicant for certification or a certified community-based seed capital fund to provide the board with any information the board determines is necessary to ensure eligibility for certification and compliance with this paragraph and rules promulgated under this paragraph.

AB524,13,2 (c) The board, in consultation with the department, shall promulgate rules establishing a procedure for the board to certify businesses as eligible to receive investments that qualify for the applicable tax credit under s. 71.07 (5d). The rules shall do all of the following:

AB524,13,4 1. Require a business that desires to obtain a certification to file an application with the board.

AB524,13,7 2. Permit a business to obtain a certification only if the business has been in operation for no more than 3 years and if its principal business operations are located in this state.

AB524,13,14 3. Permit a business to obtain a certification only if the owner of the business has at least 3 years of relevant business experience, or any other experience that the board determines is sufficient to increase the likelihood of the success of the business, or has successfully completed an entrepreneurial venture development curriculum; has a degree in business management, business administration, or a related field; or has any other training that the board determines is sufficient to increase the likelihood of the success of the business.

AB524,13,17 4. Permit a business to obtain a certification only if the business is not engaged primarily in retail sales, real estate, or providing health care or other professional services.

AB524,13,19 5. Permit a business to obtain a certification only if the net worth of the business does not exceed $3,000,000.

AB524,13,23 6. Require an applicant for certification or a certified community-based seed capital fund to provide the board with any information the board determines is necessary to ensure eligibility for certification and compliance with this paragraph and rules promulgated under this paragraph.

AB524,14,8 (3) Notice of certification. Upon request of any person, the board shall issue a written notice indicating whether a venture capital fund, community-based seed capital fund, or business is certified under this section. Each notice under this subsection that indicates a venture capital fund, community-based seed capital fund, or business is certified and shall include the following statement: "The Wisconsin Capital Investment Board has not recommended or approved an investment in this entity or assessed the merits or risks of such an investment. Investors should rely solely on their own investigation and analysis and seek investment, financial, legal, and tax advice before making their own decision regarding investment in this entity."

AB524,14,11 (4) Notice of decertification. Upon the issuance or discontinuance of a certification, the board shall notify the department of revenue and provide the department of revenue a copy of the certification or discontinuance.

AB524,14,14 (5) Staff. The board may employ an executive director outside the classified service who may employ staff within the classified service with appropriate expertise to carry out this section.

AB524, s. 20 Section 20 . Nonstatutory provisions.

AB524,14,20 (1) Rules. The Wisconsin capital investment board shall submit in proposed form the rules required under section 560.20 (2) of the statutes, as created by this act, to the legislative council staff under section 227.15 (1) of the statutes no later than the first day of the 6th month beginning after the effective date of this subsection.

AB524,14,23 (2) Staff. There is authorized for the Wisconsin capital investment board 1.0 FTE GPR executive director position and 2.0 FTE GPR other positions to be funded from the appropriation under section 20.143 (1) (a) of the statutes.

AB524, s. 21 Section 21. Initial applicability.

AB524,15,4 (1) This act first applies to taxable years beginning on January 1 of the year in which this subsection takes effect, except that if this subsection takes effect after July 31 this act first applies to taxable years beginning on January 1 of the year following the year in which this subsection takes effect.

AB524, s. 22 Section 22. Effective dates. This act takes effect on the first day of the 8th month beginning after publication, except as follows:

AB524,15,7 (1) Rules. Section 20 (1) of this act takes effect on the day after publication.

AB524,15,8 (2) Staff. Section 20 (2) of this act takes effect on the day after publication.

AB524,15,9 (End)