AB129: Bill Text

AB129,51,17 3. The amount of the proposed investment.

AB129,51,20 4. An undertaking by the person to make an investment of designated capital in the amount approved by the authority within 5 business days after the allocation date established by the authority under sub. (2) (b).

AB129,51,25 (b) The authority shall establish a single 15-day period in which applications under par. (a) may be submitted to the authority. The authority shall provide a notice regarding that application period and the investment program under this subchapter that is reasonably calculated to reach all insurance companies or other persons subject to premium tax liability within this state.

AB129,52,2 (c) The authority may establish additional rules consistent with this subchapter regarding the requirements for an application under par. (a).

AB129,52,6 (2) Award. (a) The authority shall approve an investment of designated capital in a certified jobs now fund and, subject to sub. (4) (b), award a premium tax credit to a person who satisfies the application requirements under sub. (1) in an amount equal to 80 percent of the person's proposed investment of designated capital.

AB129,52,12 (b) If the authority approves a person's proposed investment of designated capital under par. (a), the authority shall notify the person and the certified jobs now fund of that approval in writing, stating the amount of the investment approved by the authority, the amount of the premium tax credit the person may claim, the requirements, including those under sub. (3), for making that claim, and the allocation date.

AB129,52,16 (c) The authority may not set an allocation date that is earlier than 30 days after the date of the authority's notice of approval of an investment under par. (b). The first allocation date set by the authority for any participating investor may not be later than 120 days after the effective date of this paragraph .... [LRB inserts date].

AB129,52,20 (3) Claim eligibility and requirements. (a) A participating investor may claim a premium tax credit in the amount the authority awards only after the participating investor makes an investment of designated capital in the certified jobs now fund in the amount approved by the authority under sub. (2).

AB129,52,25 (b) A participating investor may claim up to 25 percent of the premium tax credit approved under sub. (2) in a taxable year, except that a participating investor may not claim any premium tax credit under this subchapter for a taxable year beginning before January 1, 2014, and a premium tax credit may not be applied to quarterly tax payments due during the 2014 taxable year.

AB129,53,2 (4) Limits on premium tax credits. (a) The authority may not award more than $200,000,000 in premium tax credits under this subchapter.

AB129,53,8 (b) If, as a result of the limitations under par. (a), the amount of available premium tax credits is insufficient for approval of the full amount of all applications for capital investments that are received by the authority within the 15-day period established by the authority under sub. (1) (b), the authority shall prorate the awardable amount among the applicants based on the amount the applicant has committed to invest in the certified jobs now fund.

AB129,53,11 (c) The authority may not award more than $50,000,000 in premium tax credits to a single participating investor, including its successor and any affiliate, on a particular allocation date.

AB129,53,14 239.23 Operation of a certified jobs now fund. (1) Required disclosures in securities offerings. Any offering material involving the sale of securities of a certified jobs now fund shall include all of the following statements:

AB129,53,21 (a) "By authorizing the formation of a certified jobs now fund, the Wisconsin Venture Capital Authority does not endorse the quality of management or explicitly or implicitly guarantee or otherwise assure the economic performance of the fund and is not liable for damages or losses to a participating investor in the fund. Use of the word "certified" in an offering is not a recommendation, endorsement, or guarantee of the investment by the Wisconsin Venture Capital Authority or the state."

AB129,54,4 (b) "Investments in a prospective certified jobs now fund prior to the time the fund is certified are not eligible for a premium tax credit under section 76.634 of the Wisconsin Statutes. Investments in a certified jobs now fund are not eligible for a premium tax credit under section 76.634 of the Wisconsin Statutes unless the proposed investment is approved by the Wisconsin Venture Capital Authority under section 239.22 of the Wisconsin Statutes before the investment is made. In the event that certain statutory provisions are violated, the state may require forfeiture of unused premium tax credits and repayment of used premium tax credits."

AB129,54,7 (c) "In addition to any other applicable law, the certified jobs now fund is subject to applicable provisions of subchapter III of chapter 239 of the Wisconsin Statutes and any requirements of the Wisconsin Venture Capital Authority."

AB129,54,10 (2) Qualified investments. A certified jobs now fund may invest designated capital only in a qualified business. A qualified investment shall meet all of the following requirements:

AB129,54,15 (a) The investment is a cash investment in a qualified business for the purchase of debt, debt participation, equity, or hybrid security of any kind, including a debt instrument or security that has the characteristics of debt that provides for conversion into equity or an equity participation instrument such as an option or warrant.

AB129,54,19 (b) If the investment is for the purchase of any debt or debt participation, no more than 10 percent of that debt or debt participation may be used for the refinancing of other debt or the buy-out of other shareholders or owners of the qualified business.

AB129,54,22 (c) As a condition of the investment, the qualified business agrees not to relocate its headquarters outside of this state as long as the certified jobs now fund continues to hold the investment.

AB129,55,2 (d) As a condition of the investment, the qualified business agrees to maintain at least 75 percent of its employees, or pay at least 75 percent of its payroll to employees, including the employees or payroll of any subsidiary or other affiliated entity, in this state as long as the certified jobs now fund continues to hold the investment.

AB129,55,7 (3) Authority determinations regarding qualified businesses. A certified jobs now fund may request a determination from the authority that a business in which the fund proposes to invest is a qualified business or an early stage business. The authority shall issue its determination in writing to the fund within a reasonable time after the fund's request.

AB129,55,12 (4) Schedule of investments. A certified jobs now fund shall make qualified investments according to the following schedule, except that a certified jobs now fund may reinvest proceeds it receives from one qualified investment in another qualified investment and apply the amount of that reinvestment toward the following requirements for that other qualified investment:

AB129,55,15 (a) Within 2 years after an allocation date, at least 35 percent of the designated capital approved by the authority on that date is placed in qualified investments, of which at least 50 percent is invested in early stage businesses.

AB129,55,18 (b) Within 4 years after an allocation date, at least 50 percent of the designated capital approved by the authority on that date is placed in qualified investments, of which at least 50 percent is invested in early stage businesses.

AB129,55,23 (c) Notwithstanding s. 239.24 (1) (c) and (e), if, within 5 years after an allocation date, the certified jobs now fund has not placed at least 80 percent of the designated capital approved by the authority on that date in qualified investments, of which at least 50 percent is invested in early stage businesses, the certified jobs now fund may not pay any management or similar fee until it has made those investments.

AB129,56,3 (d) Notwithstanding s. 239.24 (1) (c) and (e), if, within 7 years after an allocation date, the certified jobs now fund has not placed 100 percent of the designated capital approved on that date in qualified investments, of which at least 50 percent is invested in early stage businesses, the certified jobs now fund may not pay any management or similar fee until it has made those investments.

AB129,56,12 (5) Qualified business relocation out of state. If within 24 months after the date a qualified investment is made, the qualified business relocates its principal business operations to another state and the certified jobs now fund still holds a qualified investment in the business, the amount of the fund's total designated capital and qualified investments may be reduced by the amount of the qualified investment in the relocated business for the purpose only of satisfying the investment schedule under sub. (4). This subsection does not apply if the relocated business returns its principal business operations to this state within 90 days after its initial relocation.

AB129,56,15 (6) Other limitations on investments. (a) A certified jobs now fund may not invest more than 15 percent of its total designated capital in any one qualified business.

AB129,56,17 (b) A certified jobs now fund may invest any designated capital not invested in qualified investments only in the following:

AB129,56,18 1. Cash deposited in a federally insured financial institution.

AB129,56,19 2. Certificates of deposit in a federally insured financial institution.

AB129,56,22 3. Investment securities that are obligations of the United States or its agencies, or obligations that the United States fully guarantees as to principal and interest.

AB129,57,2 4. Debt instruments rated at least "A" or its equivalent by a nationally recognized credit rating organization, or issued or guaranteed by a business whose unsecured debt is rated at least "A" or its equivalent by a nationally recognized credit rating organization if that debt is not subordinated to other unsecured debt of the issuer or the guarantor.

AB129,57,3 5. Obligations of the state or any political subdivision of the state.

AB129,57,5 6. Any other investments of a similar credit quality and risk as those in subds. 1. to 5. that are approved in advance in writing by the authority.

AB129,57,9 (7) Restrictions on management. No certified jobs now fund or its affiliate may be managed or controlled by, or have a partner, member, or other principal that is, an insurance company or other person subject to premium tax liability or an affiliate of that person or insurance company.

AB129,57,11 239.24 Distributions; profit sharing fee. (1) Permissible distributions. A certified jobs now fund may make only the following distributions:

AB129,57,14 (a) A distribution for the repayment of a capital contribution to an equity investor in the fund who was not a participating investor when that capital contribution was made.

AB129,57,17 (b) A distribution for the cost of forming, syndicating, managing, or operating the certified jobs now fund, including a reasonable and necessary fee paid for professional services.

AB129,57,19 (c) A distribution that is an annual management fee in an amount that does not exceed 2 percent of the fund's total designated capital.

AB129,57,22 (d) A distribution to cover a projected increase in state or federal taxes, including penalties and interest, for the certified jobs now fund's equity owners if that increase is related to the fund's ownership, management, or operation.

AB129,57,24 (e) A distribution for the repayment of principal or interest owed to a debt holder of the fund, including a participating investor who is a debt holder.

AB129,58,4 (f) A distribution of any kind from the investment of designated capital approved by the authority on an allocation date after the fund has placed in qualified investments an amount equal to 100 percent of that designated capital approved on that allocation date, at least 50 percent of which is invested in early stage businesses.

AB129,58,7 (2) Profit sharing fee. (a) In this subsection, "net profits realized" means the total amount of money returned to a certified jobs now fund on all qualified investments that exceeds the total amount of those qualified investments.

AB129,58,11 (b) When a certified jobs now fund makes a distribution under sub. (1) (f), the fund shall pay to the authority a fee equal to 20 percent of the net profits realized on all qualified investments from which the distribution is made. The authority shall pay that fee to the secretary of administration for deposit in the general fund.

AB129,58,15 239.25 Certified jobs now fund reporting requirements. (1) Report upon receipt of designated capital. As soon as practicable after it receives designated capital, a certified jobs now fund shall submit a report to the authority that includes:

AB129,58,17 (a) The name of the participating investor from whom the designated capital was received.

AB129,58,18 (b) The amount of designated capital.

AB129,58,19 (c) The date on which the fund received the designated capital.

AB129,58,21 (2) Annual report. By January 31 of each year, a certified jobs now fund shall submit a report to the authority that includes:

AB129,58,25 (a) For each qualified investment made during the preceding year, the amount of designated capital invested, the allocation date of the designated capital, the date of the qualified investment, and the name and address of the business in which the qualified investment was made.

AB129,59,5 (b) For each qualified business in which the fund held an investment during the preceding year, a description of the business, including the number of employees the business employed when the first qualified investment in the business was made by the fund and the number of employees the business employed on December 31 of the preceding year.

AB129,59,7 (c) A statement whether the certified jobs now fund has invested more than 15 percent of its total designated capital in any one business.

AB129,59,9 (d) A detailed accounting of the certified jobs now fund's investment progress according to the schedule of investments required under s. 239.23 (4).

AB129,59,11 (e) An accounting of all distributions the certified jobs now fund made during the year.

AB129,59,12 (f) Any other information the authority requires.

AB129,59,16 (3) Financial statement. Within 90 days after the end of a certified jobs now fund's fiscal year, the fund shall file with the authority a copy of its annual audited financial statement, including the opinion of an independent certified public accountant.

AB129,59,20 (4) Renewal fee. By January 31 of each year, a certified jobs now fund shall pay to the authority a certification renewal fee of $5,000, unless January 31 falls within 6 months after the date on which the certified jobs now fund was first certified under s. 239.21.

AB129,60,2 239.26 Compliance reviews; decertification. (1) Annual compliance review. The authority shall review annually each certified jobs now fund to ensure that the fund continues to satisfy the requirements of this subchapter, to ensure that the fund has not made any investment in violation of this subchapter, and to determine the status of the fund's qualified investments with respect to the schedule of investments required under s. 239.23 (4).

AB129,60,7 (2) Decertification. (a) If the authority determines that a certified jobs now fund is not in compliance with any provision of this subchapter, or any requirement of the authority, the authority shall notify the officers of the fund in writing that the fund may be subject to decertification or a monetary penalty, or both, if the fund is not brought into compliance within 120 days after the fund's receipt of the notice.

AB129,60,12 (b) The authority may decertify a certified jobs now fund if, after opportunity for hearing, the authority determines that the fund is in violation of this subchapter and that the fund's violation has not been corrected to the authority's satisfaction within the period under par. (a). The authority shall notify any appropriate state agency of the decertification.

AB129,60,17 (3) Effect of decertification. Decertification of a certified jobs now fund has the effects specified under s. 76.634 (4) with respect to a participating investor. A certified jobs now fund may agree to indemnify, or purchase insurance for the benefit of, a participating investor for the participating investor's losses under s. 76.634 (4) due to the fund's decertification.

AB129,60,21 (4) Notice of recapture. The authority shall give written notice to each qualified investor whose premium tax credit becomes subject to recapture or forfeiture under s. 76.634 (4), or when a premium tax credit is no longer subject to recapture.

AB129,60,24 (5) Penalties. The authority may fine a person who violates this subchapter in an amount determined by the authority not to exceed $25,000. In determining the amount of a fine under this subsection, the authority shall consider:

AB129,61,2 (a) The seriousness of the violation, including the nature, circumstances, extent, and gravity of the violation.

AB129,61,3 (b) The economic harm caused by the violation.

AB129,61,4 (c) The person's history of previous violations.

AB129,61,5 (d) The amount necessary to deter future violations.

AB129,61,6 (e) The person's efforts to mitigate or correct the violation.

AB129, s. 67 Section 67. 281.75 (4) (b) 3. of the statutes, as affected by 2011 Wisconsin Act 10, is amended to read:

AB129,61,10 281.75 (4) (b) 3. An authority created under subch. II of ch. 114 or ch. 231, 233, 234, 237, or 238, or 239.

AB129, s. 68 Section 68. 285.59 (1) (b) of the statutes, as affected by 2011 Wisconsin Act 10, is amended to read:

AB129,61,22 285.59 (1) (b) "State agency" means any office, department, agency, institution of higher education, association, society, or other body in state government created or authorized to be created by the constitution or any law which is entitled to expend moneys appropriated by law, including the legislature and the courts, the Wisconsin Housing and Economic Development Authority, the Bradley Center Sports and Entertainment Corporation, the University of Wisconsin Hospitals and Clinics Authority, the Fox River Navigational System Authority, the Wisconsin Aerospace Authority, the Wisconsin Economic Development Corporation, the Wisconsin Venture Capital Authority, and the Wisconsin Health and Educational Facilities Authority.

AB129, s. 69 Section 69 . Nonstatutory provisions.

AB129,61,24 (1) Definitions. In this section:

AB129,62,2 (a) "Authority" means the Wisconsin Venture Capital Authority, as created by this act.

AB129,62,3 (b) "Corporation" means the Wisconsin Economic Development Corporation.

AB129,62,4 (2) Initial appointments.

AB129,62,14 (a) Notwithstanding the requirement of advice and consent of the senate under section 239.02 (1) (b) of the statutes, as created by this act, the initial members of the board of directors of the authority nominated by the governor under that section may be provisionally appointed by the governor, subject to later senate confirmation. Any provisional appointment shall be in full force until withdrawn by the governor or acted upon by the senate, and if confirmed by the senate shall continue for the remainder of the unexpired term of the member and until a successor is chosen and qualifies. A provisional appointee may exercise all the powers and duties of board membership to which the person is appointed during the time in which the appointee qualifies.

AB129,62,21 (b) A provisional appointment made under paragraph (a) that is withdrawn by the governor shall, upon withdrawal, lapse and create a vacancy for provisional appointment of another initial member of the board of directors or chairperson of the board of the authority. Any provisional appointment made under paragraph (a) that is rejected by the senate shall upon rejection lapse and create a vacancy for nomination and appointment of another initial board member or chairperson of the board under paragraph (a).

AB129,62,24 (c) Notwithstanding the lengths of terms specified in section 239.02 (2) of the statutes, as created by this act, the initial members of the board of directors of the authority shall be appointed for the following terms:

AB129,63,2 1. One member appointed by the governor under section 239.02 (1) (b) of the statutes, as created by this act, for a term expiring on June 30, 2014.

AB129,63,4 2. One member appointed by the governor under section 239.02 (1) (b) of the statutes, as created by this act, for a term expiring on June 30, 2015.

AB129,63,7 3. One member appointed by the governor under section 239.02 (1) (b) of the statutes, as created by this act, and the member appointed by the speaker of the assembly, for terms expiring on June 30, 2016.

AB129,63,10 4. One member appointed by the governor under section 239.02 (1) (b) of the statutes, as created by this act, and the member appointed by the majority leader of the senate, for terms expiring on July 1, 2017.

AB129,64,4 (3) Temporary administration by the department of commerce. The department of commerce, in coordination with the authority and the secretary of the department of administration, shall administer chapter 239 of the statutes, as created by this act, until the initial appointments by the governor, including any provisional appointments under subsection (2 ) (a), the speaker of the assembly, and the senate majority leader have been made to the authority and the authority has adequate personnel to carry out its powers and duties, or until the effective date of the 2011-13 biennial budget act, whichever is later. During that period, the department of commerce may collect fees under sections 239.12 (3) and 239.21 (3), as created by this act, and may use those fees as appropriate only for administration of subchapters II and III of chapter 239 of the statutes, as created by this act. The department shall credit any fees collected under this subsection to the appropriation account under section 20.143 (1) (a) of the statutes. When the department of commerce ceases to administer the authority's programs under this subsection, the department shall transfer to the authority, or to the Corporation for administration of the authority's programs under subsection (4) if the authority is not prepared to assume administration of its programs on or before the effective date of the 2011-13 biennial budget act, any unused portion of the fees the department collected under this subsection.

AB129,64,20 (4) Temporary administration by the Wisconsin Economic Development Corporation. If the authority is not prepared to assume administration of its programs on or before the effective date of the 2011-13 biennial budget act, then, commencing on that date, the corporation, in coordination with the authority and the secretary of the department of administration, shall administer chapter 239 of the statutes, as created by this act, until the initial appointments by the governor, including any provisional appointments under subsection (2) (a), the speaker of the assembly, and the senate majority leader have been made to the authority and the authority has adequate personnel to carry out its powers and duties. During that interim period, the corporation may collect fees under sections 239.12 (3) and 239.21 (3) of the statutes, as created by this act, and may use those fees as appropriate only for administration of subchapters II and III of chapter 239 of the statutes, as created by this act. When the corporation ceases to administer the authority's programs under this subsection, the corporation shall transfer to the authority any unused portion of fees the department of commerce transferred to the corporation under subsection (3) or that the corporation collected under this subsection.

AB129, s. 70 Section 70. Effective dates. This act takes effect on the day after publication, except as follows: