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2011 - 2012 LEGISLATURE
February 23, 2012 - Introduced by Senators Wanggaard and Taylor, cosponsored
by Representatives Marklein and Molepske Jr. Referred to Committee on
Financial Institutions and Rural Issues.
SB508,1,8 1An Act to amend 15.07 (4), 20.536 (1) (k) and 25.14 (1) (a) (intro.); and to create
215.07 (1) (a) 7., 15.07 (5) (am), 15.77, 19.42 (10) (Lm), 19.42 (13) (km), 20.195,
325.17 (72), 25.17 (73), 25.90, 73.17, 230.08 (2) (yo) and chapter 555 of the
4statutes; relating to: creation of the Wisconsin Next Generation Reserve
5Board and Wisconsin next generation reserve fund, authorizing the State of
6Wisconsin Investment Board to provide certain advice, services, and facilities
7to state agencies and others, requiring the exercise of rule-making authority,
8and making appropriations.
Analysis by the Legislative Reference Bureau
This bill creates the Wisconsin Next Generation Reserve Board (Reserve
Board). The Reserve Board is an independent agency in the executive branch of state
government. The primary functions of the Reserve Board are to make grants and
loans to, and make direct investments in, Wisconsin bioscience companies.
Wisconsin Next Generation Reserve Board
The Reserve Board is composed of 12 members as follows:
1. One member, appointed by the governor for a four-year term, who has
expertise in agriculture and who is recognized for outstanding knowledge and
leadership in bioscience or bioscience research.

2. Three members, appointed by the governor for four-year terms, who serve
in senior management positions at Wisconsin bioscience companies and have
responsibilities related to the financing of their respective companies, two of whom
are from companies that employ less than 50 employees, and one of whom is from a
company that employs 50 or more employees.
3. Two members, appointed by the governor for four-year terms, who serve in
senior management positions at Wisconsin companies that develop or manufacture
medical devices and have responsibilities related to the financing of their respective
companies, one of whom is from a company that employs less than 50 employees, and
one of whom is from a company that employs 50 or more employees.
4. One member, appointed by the governor for a four-year term, who either has
at least five years of experience directly investing in bioscience companies in
Wisconsin, or represents a group of individual investors that has that experience as
a group.
5. One member, appointed by the governor for a four-year term, who has at
least three years of experience in the merger and acquisition of bioscience companies.
6. One member who is appointed by BioForward, Inc., a private bioscience
association in Wisconsin, for a four-year term.
7. Two nonvoting members who have expertise in bioscience or bioscience
research, one of whom is appointed by the Board of Regents of the University of
Wisconsin System and serves at the pleasure of the Board of Regents, and one of
whom is appointed by the Wisconsin Association of Independent Colleges and
Universities and serves at the pleasure of the association.
8. The executive director of the Investment Board, or his or her designee, who
serves as a nonvoting member.
The bill requires that the Reserve Board hire an executive director who has
expertise in private equity investment. The executive director and all of the
members of the Reserve Board are subject to state ethics laws.
The bill authorizes the Reserve Board to execute any contract necessary or
convenient to the Reserve Board's exercise of its powers and duties, including a
contract with the Investment Board for the Investment Board's advice and services
related to the Reserve Board's grants, loans, and investments, discussed below, and
for facilities provided by the Investment Board. Under the bill, the Investment
Board may also make a loan to the Reserve Board for the Reserve Board's initial
operations and administrative expenses.
Additional contracting authority for the Investment Board
The bill further authorizes the Investment Board to provide advice, services,
and facilities to any state agency or authority or a business entity owned by an
agency or authority. Under the bill, the Investment Board may provide advice or
services related to the management or administration, for any purpose, including
economic development, of money or property that an agency, authority, or eligible
business entity controls. The agency, authority, or eligible business entity must
contract with the Investment Board and pay the Investment Board for any advice,
services, or facilities the Investment Board provides.

Wisconsin Next Generation Reserve Fund
The bill creates a nonlapsable fund to be known as the "Wisconsin next
generation reserve fund" (fund). From the fund, the Reserve Board may make
grants, loans, and investments, as set forth below. For short-term management, the
fund is included in the state investment fund managed by the Investment Board.
In addition to any donations, gifts, or bequests made to the fund, any moneys
transferred to the fund, any moneys deposited in the fund by the Reserve Board, and
any income or interest earned by the fund, the fund consists of moneys generated
from tax revenue collected from a specific class of companies, referred to in the bill
as "qualifying companies." Under the bill, a qualifying company is identified by the
company's principal business activity code under the North American Industry
Classification System (NAICS). The bill directs the Department of Revenue (DOR)
to determine in July 2012 the total amount of withholding taxes due and payable
from qualifying companies for the period July 1, 2011 to June 30, 2012. Then, in each
fiscal year, beginning with the fiscal year that begins on July 1, 2012, DOR must
deposit in the fund an amount equal to 95 percent of the withholding taxes due and
payable from qualifying companies that exceeds that total amount for that period.
DOR may not make any deposits into the fund on or after December 31, 2026. In
addition, DOR may not deposit more than $50,000,000 into the fund in any fiscal year
and may not deposit more than $500,000,000 in total into the fund.
Grants, loans, and investments
Under the bill, the Reserve Board may make, from the fund, grants and loans
to, and direct investments in, bioscience companies certified by the Reserve Board.
The Reserve Board may certify a bioscience company if the Reserve Board
determines that the company meets all of the following conditions, in addition to any
further conditions established by the Reserve Board:
1. The company is a qualifying company that does not operate a hospital.
2. The company's headquarters and principal business operations are located
in Wisconsin.
3. The company, including any affiliate, employs at least 75 percent of its
employees in Wisconsin.
4. The company is in need of capital.
5. The company is developing biotechnology or bioscience or bioscience
research methods, as determined by the Reserve Board by rule, and demonstrates
to the Reserve Board that the company has the potential to generate high levels of
successful investment performance and increase employment in this state.
Before providing any moneys from the fund to a certified bioscience company
in the form of a grant, loan, or investment, the Reserve Board must enter into a
contract with the company that includes all of the following requirements:
1. The certified bioscience company must use a grant, loan, or investment from
the fund for research and development related to biotechnology or bioscience or
bioscience research methods.
2. The certified bioscience company must match the amount of any grant, loan,
or investment from the fund with moneys the company has raised from other sources.

3. During the term of the contract, the certified bioscience company may not
relocate its headquarters outside of Wisconsin without the Reserve Board's approval.
Under the bill, any moneys paid to the Reserve Board by a certified bioscience
company must be deposited in the fund and may be re-used by the Reserve Board
for continued grants, loans, and investments subject to the provisions of the bill.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB508, s. 1 1Section 1. 15.07 (1) (a) 7. of the statutes is created to read:
SB508,4,32 15.07 (1) (a) 7. The members of the Wisconsin next generation reserve board
3appointed under s. 15.77 (1) (h) to (j) shall be appointed as provided in that section.
SB508, s. 2 4Section 2. 15.07 (4) of the statutes, as affected by 2011 Wisconsin Act 10, is
5amended to read:
SB508,4,126 15.07 (4) Quorum. A majority of the membership of a board constitutes a
7quorum to do business and, unless a more restrictive provision is adopted by the
8board, a majority of a quorum may act in any matter within the jurisdiction of the
9board. This subsection does not apply to actions of the government accountability
10board or the school district boundary appeal board as provided in ss. 5.05 (1e) and
11117.05 (2) (a) or the Wisconsin next generation reserve board as provided in s. 15.77
12(3)
.
SB508, s. 3 13Section 3. 15.07 (5) (am) of the statutes is created to read:
SB508,4,1514 15.07 (5) (am) Members of the Wisconsin next generation reserve board, $50
15per day.
SB508, s. 4 16Section 4. 15.77 of the statutes is created to read:
SB508,5,3
115.77 Wisconsin next generation reserve board; creation. (1) There is
2created a Wisconsin next generation reserve board. The board shall consist of the
3following members:
SB508,5,54 (a) One member who has expertise in agriculture and is recognized for
5outstanding knowledge and leadership in bioscience or bioscience research.
SB508,5,96 (b) Two members who, at the time of appointment, serve in senior management
7positions at bioscience companies headquartered in this state that employ fewer
8than 50 employees, including any affiliate, and who, in addition to any other
9responsibilities, have responsibilities related to the financing of the companies.
SB508,5,1310 (c) One member who, at the time of appointment, serves in a senior
11management position at a bioscience company headquartered in this state that
12employs at least 50 employees, including any affiliate, and who, in addition to any
13other responsibilities, has responsibilities related to the financing of the company.
SB508,5,1814 (d) One member who, at the time of appointment, serves in a senior
15management position at a company headquartered in this state that develops or
16manufactures medical devices and employs fewer than 50 employees, including any
17affiliate, and who, in addition to any other responsibilities, has responsibilities
18related to the financing of the company.
SB508,5,2319 (e) One member who, at the time of appointment, serves in a senior
20management position at a company headquartered in this state that develops or
21manufactures medical devices and employs at least 50 employees, including any
22affiliate, and who, in addition to any other responsibilities, has responsibilities
23related to the financing of the company.
SB508,6,224 (f) One member who, at the time of appointment, either has at least 5 years of
25experience directly investing in bioscience companies in this state, or represents a

1group of individual investors that has at least 5 years of experience directly investing
2in bioscience companies in this state.
SB508,6,43 (g) One member who, at the time of appointment, has at least 3 years of
4experience in the merger and acquisition of bioscience companies.
SB508,6,55 (h) One member appointed by BioForward, Inc.
SB508,6,86 (i) One member who has expertise in bioscience or bioscience research, who
7shall be appointed by the Board of Regents of the University of Wisconsin System and
8who shall serve as a nonvoting member at the pleasure of the Board of Regents.
SB508,6,129 (j) One member who has expertise in bioscience or bioscience research, who
10shall be appointed by the Wisconsin Association of Independent Colleges and
11Universities and who shall serve as a nonvoting member at the pleasure of the
12association.
SB508,6,1413 (k) The executive director of the investment board, or his or her designee, who
14shall serve as a nonvoting member.
SB508,6,16 15(2) The members of the board identified in sub. (1) (a) to (h) shall be appointed
16for 4-year terms.
SB508,6,19 17(3) A majority of the voting members of the board constitutes a quorum for the
18purpose of conducting its business and exercising its powers and for all other
19purposes. Action may be taken by the board upon a vote of a majority of a quorum.
SB508, s. 5 20Section 5. 19.42 (10) (Lm) of the statutes is created to read:
SB508,6,2521 19.42 (10) (Lm) The members of the Wisconsin next generation reserve board
22who are appointed by BioForward, Inc., by the Board of Regents of the University of
23Wisconsin System, and by the Wisconsin Association of Independent Colleges and
24Universities and the executive director of the Wisconsin next generation reserve
25board.
SB508, s. 6
1Section 6. 19.42 (13) (km) of the statutes is created to read:
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