AB1177: Bill Text

AB1177,23,19 (L) The corporation or partnership and applicable fund manager do not receive any of the profits and gains on assets in any investment fund described in par. (a), unless the total amount distributed to all investors in the fund is at least equal to the total amount invested, plus 80 percent of the profits and gains.

AB1177,24,5 (2) Certification for tax credits. (a) Generally. The board, in consultation with the capital investment corporation or partnership, shall promulgate rules establishing a procedure for the board to certify businesses as eligible to receive from fund managers investments that qualify an investor for tax credits under s. 71.07 (2r) or (2s), 71.28 (2r) or (2s), or 71.47 (2r) or (2s). The rules shall require a business that desires to obtain a certification to file an application with the board. The rules shall require an applicant for certification to provide the board with any information the board determines is necessary to ensure eligibility for certification and compliance with this section and rules promulgated under this section. The board shall consult with the capital investment corporation or partnership in determining whether to certify any applicant.

AB1177,24,9 (b) Early stage seed investments. The board may certify a business, including a Native American business, as eligible to receive from fund managers investments that qualify the investors for tax credits under s. 71.07 (2r) (b) 1. or (2s), 71.28 (2r) (b) 1. or (2s), or 71.47 (2r) (b) 1. or (2s) only if the business satisfies all of the following:

AB1177,24,11 1. The business is headquartered in this state and its principal business operations are located in this state.

AB1177,24,13 2. The business is in need of seed capital and is unable to obtain conventional financing, as defined by the department by rule.

AB1177,24,15 3. The business has no more than 100 employees, at least 75 percent of whom are employed in this state.

AB1177,24,18 4. During its 2 most recent fiscal years, if any, the business had an average annual net income, after federal income taxes, of not more than $2,000,000, as determined in accordance with generally accepted accounting principles.

AB1177,24,20 5. The business has a net worth of not more than $5,000,000, except that this subdivision does not apply if the business is a Native American business.

AB1177,24,22 6. The business is not predominantly engaged in professional services provided by accountants, lawyers, or physicians.

AB1177,24,23 7. The business is not engaged in the development of real estate for resale.

AB1177,24,24 8. The business is not engaged in commercial banking or lending.

AB1177,25,4 (c) Venture growth investments. The board may certify a business, including a Native American business, as eligible to receive from fund managers investments that qualify the investors for tax credits under s. 71.07 (2r) (b) 3. or (2s), 71.28 (2r) (b) 3. or (2s), or 71.47 (2r) (b) 3. or (2s) only if the business satisfies all of the following:

AB1177,25,6 1. The business is headquartered in this state and has significant business operations in this state.

AB1177,25,8 2. At least 51 percent of the business's employees are employed in this state or the business employs more than 500 employees in this state.

AB1177,25,12 3. During its 2 most recent fiscal years, the business had an average annual net income, after federal income taxes and excluding any carry-over losses, of less than $20,000,000, as determined in accordance with generally accepted accounting principles.

AB1177,25,14 4. The business has a net worth of less than $75,000,000, except that this subdivision does not apply if the business is a Native American business.

AB1177,25,16 5. The business is not predominantly engaged in professional services provided by accountants, lawyers, or physicians.

AB1177,25,18 6. The business has been in existence for at least one year, but less than 10 years.

AB1177,25,22 (d) Women-, minority-, and community-based investments. The board may certify a business as eligible to receive from fund managers investments that qualify the investors for tax credits under s. 71.07 (2r) (b) 4. or (2s), 71.28 (2r) (b) 4. or (2s), or 71.47 (2r) (b) 4. or (2s) only if any of the following apply:

AB1177,26,2 1. The business is headquartered in this state, has significant business operations in this state, and is at least 51 percent owned, controlled, and actively managed by one or more women or minority group members, as defined in s. 560.036 (1) (f).

AB1177,26,5 2. The business is headquartered in this state, has significant business operations in this state, and facilitates access to savings and credit by low-income consumers.

AB1177,26,8 3. The investments are made as part of a community-based investment strategy implemented by the fund manager and the business satisfies all of the requirements under par. (b) 1. to 8.

AB1177,26,12 (e) Angel investments. The board may certify a business as eligible to receive from angel investors investments that qualify the investors for tax credits under s. 71.07 (2r) (b) 2. or (2s), 71.28 (2r) (b) 2. or (2s), or 71.47 (2r) (b) 2. or (2s) only if the business satisfies par (b) 1. to 8.

AB1177,26,24 (3) Notice. (a) Certification. Upon approval of an application under sub. (2) (b) to (e), the board shall issue a written notice of certification to the applicable business and shall provide a copy of the notice to the capital investment corporation or partnership, the investment board, and the department of revenue, except that the board need not provide a copy of any notice of certification under sub. (2) (e) to the capital investment corporation or partnership or the investment board. Each notice shall include the following statement: "The Wisconsin economic leadership 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 decisions regarding investment in this entity." The board shall provide any person with a copy of the notice upon request.

AB1177,27,7 (b) Decertification. 1. Upon the discontinuance of a certification under sub. (2), the board shall issue a written notice of decertification to the applicable business and shall provide a copy of the notice to the capital investment corporation or partnership, the investment board, and the department of revenue, except that the board need not provide a copy of any notice of decertification of a business certified under sub. (2) (e) to the capital investment corporation or partnership or the investment board.

AB1177,27,9 2. Discontinuance of a certification under sub. (2) does not affect any current offering of ownership interests in the decertified business.

AB1177,27,19 (4) Other board activities. (a) Promotional activities and legislation. The board, in consultation with the capital investment corporation or partnership, shall actively promote the purposes of this program under this section but shall not recommend that any person make a particular investment. The board shall solicit institutional investors to invest with fund managers, shall encourage fund managers to invest in businesses described in sub. (2) (b) to (d), and shall solicit businesses described in sub. (2) (b) to (d) that may benefit from investments made by fund managers. The board shall recommend to the legislature any statutory changes that the board considers necessary or proper to carry out the purposes of the program under this section.

AB1177,28,2 (b) Report. Annually, no later than September 15, the board shall submit a report to the chief clerk of each house of the legislature for distribution to the legislature under s. 13.172 (2), describing the performance of investments made by fund managers, the total amount of tax credits claimed under ss. 71.07 (2r) or (2s), 71.28 (2r) or (2s), and 71.47 (2r) or (2s) with regard to those investments, and the economic impact, if any, the investments have had on this state. The department of revenue shall provide the board with any information the board requests for preparation of the report under this paragraph.

AB1177, s. 26 Section 26. 560.203 of the statutes is created to read:

AB1177,28,5 560.203 Tribal gaming compact investment rebate. (1) Definitions. In this section:

AB1177,28,6 (a) "Indian gaming receipts" has the meaning given in s. 569.01 (1m).

AB1177,28,7 (b) "Indian tribe" has the meaning given in s. 569.01 (3).

AB1177,28,13 (2) Rebates to Indian tribes. (a) Annually, not later than September 1, the department shall calculate the amount of the rebate to be made to each eligible Indian tribe from which the state has received gaming receipts. The amount of a rebate to an eligible Indian tribe shall be equal to 5 percent of the sum of Indian gaming receipts received by the state in the immediately preceding fiscal year from the eligible Indian tribe, except as follows:

AB1177,28,15 1. A rebate to an eligible Indian tribe under this section may not exceed $10,000,000.

AB1177,28,17 2. The total amount of all rebates under this section may not exceed $100,000,000 per year.

AB1177,28,20 (b) Annually, the department shall make a rebate to an eligible Indian tribe from the appropriation under s. 20.143 (1) (kn) in the amount calculated by the department under par. (a).

AB1177,28,23 (3) Eligibility. An Indian tribe is eligible to receive a rebate under this section if the Indian tribe has entered into an agreement with the department to invest a rebate under this section in an investment fund established under s. 560.20.

AB1177, s. 27 Section 27. Nonstatutory provisions.

AB1177,28,25 (1) Rules.

AB1177,29,10 (a) Emergency rules. Using the procedure under section 227.24 of the statutes, the Wisconsin economic leadership board may promulgate rules required under section 560.20 of the statutes, as created by this act, for the period before the effective date of the rules submitted under paragraph (b ), but not to exceed the period authorized under section 227.24 (1) (c) and (2) of the statutes. Notwithstanding section 227.24 (1) (a), (2) (b), and (3) of the statutes, the board 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 emergency for a rule promulgated under this paragraph.

AB1177,29,15 (b) Permanent rules. The Wisconsin economic leadership board shall submit in proposed form the rules required under section 560.20 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 4th month beginning after the effective date of this paragraph.

AB1177, s. 28 Section 28. Effective date.

AB1177,29,18 (1) This act takes effect on January 1, 2006, or on the day after publication, whichever is later.

AB1177,29,19 (End)