Amendment SSA1-AB181

AB181-SSA1,23,10 (b) The chief executive officer of the Wisconsin Economic Development Corporation or his or her designee.

AB181-SSA1,23,17 (c) Seven persons nominated by the executive director of the investment board, and with the advice and consent of the senate appointed, for 6-year terms. Six members appointed under this paragraph shall have at least 10 years of experience in equity investing at the time of appointment, and one member appointed under this paragraph shall have at least 10 years of experience in angel or early stage seed investing at the time of appointment. No member appointed under this paragraph may be an officer, director, or other principal of an equity investment firm.

AB181-SSA1,23,20 (d) Two members appointed by the speaker of the assembly, consisting of one majority and one minority party representative to the assembly, appointed as are the members of standing committees in the assembly.

AB181-SSA1,23,23 (e) Two members appointed by the senate majority leader, consisting of one majority and one minority party senator, appointed as are members of standing committees in the senate.

AB181-SSA1,24,2 (2) A majority of the members of the board constitutes a quorum for the purpose of conducting its business and exercising its powers and for all other purposes, notwithstanding the existence of any vacancies. Action may be taken by the board upon a vote of a majority of a quorum.

AB181-SSA1,24,4 (3) A vacancy on the board shall be filled in the same manner as the original appointment to the board for the remainder of the unexpired term, if any.

AB181-SSA1,24,7 (4) A member of the board may not be compensated for the member's services but shall be reimbursed for actual and necessary expenses, including travel expenses, incurred in the performance of the member's duties.

AB181-SSA1,24,11 (5) No cause of action may arise against and no civil liability may be imposed upon a member of the board for any act or omission in the performance of the member's powers and duties under this chapter, unless the person asserting liability proves that the act or omission constitutes willful misconduct.

AB181-SSA1,24,16 (6) The board may hire an executive director. The board may delegate to the executive director or any other employee of the authority any powers or duties the board considers proper. All powers and duties assigned to the authority under this chapter shall be exercised or carried out by the board, unless the board delegates the power or duty to an employee of the authority.

AB181-SSA1,24,20 239.03 Powers of authority. The authority shall have all the powers necessary or convenient to carry out the purposes and provisions of this chapter. In addition to all other powers granted the authority under this chapter, the authority may specifically:

AB181-SSA1,24,22 (1) Adopt, amend, and repeal any bylaws, policies, and procedures for the regulation of its affairs and the conduct of its business.

AB181-SSA1,24,23 (2) Have a seal and alter the seal at pleasure.

AB181-SSA1,24,24 (3) Maintain an office.

AB181-SSA1,24,25 (4) Sue and be sued.

AB181-SSA1,25,2 (5) Accept gifts, grants, loans, or other contributions from private or public sources.

AB181-SSA1,25,4 (6) Establish the annual budget of the authority and monitor its fiscal management.

AB181-SSA1,25,7 (7) Execute contracts and other instruments required for the operation of the authority, including any contract with the investment board under s. 25.17 (72) or (73).

AB181-SSA1,25,9 (8) Employ any officers, agents, and employees that it may require and determine their qualifications, duties, and compensation.

AB181-SSA1,25,10 (9) Issue notes, bonds, and any other obligations.

AB181-SSA1,25,11 (10) Make loans.

AB181-SSA1,25,12 (11) Incur debt.

AB181-SSA1,25,13 (12) Procure liability insurance.

AB181-SSA1,25,19 239.04 Liability limited. Neither the state nor any political subdivision of the state, nor any officer, employee, or agent of the state or a political subdivision of the state who is acting within the scope of employment or agency, is liable for any debt, obligation, act, or omission of the authority. A debt of the authority is not a debt of the state, and the authority may not create a debt of the state. Each note, bond, or other obligation of the authority shall contain on its face a statement to that effect.

AB181-SSA1,25,21 subchapter II Wisconsin forward jobs fund

AB181-SSA1,25,22 239.40 Definitions. In this subchapter:

AB181-SSA1,25,25 (1) "Angel investor network" means a person or group of persons that reviews new businesses or proposed new businesses for the potential investment in those businesses of moneys owned by that person or group.

AB181-SSA1,26,1 (2) "Fund" means the Wisconsin forward jobs fund established under s. 25.90.

AB181-SSA1,26,2 (3) "Fund capital" means moneys in or received from the fund.

AB181-SSA1,26,3 (4) "Fund manager" means the person hired by the authority under s. 239.41.

AB181-SSA1,26,5 (5) "Qualified business development organization" means a person approved by the authority under s. 239.437.

AB181-SSA1,26,7 (6) "Qualified investment capital fund" means a person approved by the authority under s. 239.42 (2).

AB181-SSA1,26,9 239.41 Wisconsin forward jobs fund manager. (1) Subject to sub. (3), the authority shall hire a fund manager to administer the fund.

AB181-SSA1,26,12 (2) The authority shall delegate to the fund manager the powers necessary or convenient for the fund manager to carry out the authority's duties under this subchapter.

AB181-SSA1,26,18 (3) (a) The executive director of the investment board shall appoint a committee that consists of 3 members who shall select a candidate for fund manager. The executive director shall appoint the members of the selection committee based on a member's experience and leadership in capital investment. Members of the selection committee shall serve without compensation, but may be reimbursed for their actual and necessary expenses incurred in the performance of their duties.

AB181-SSA1,27,2 (b) 1. The selection committee appointed under par. (a) shall select a candidate for fund manager to recommend to the authority. In choosing that candidate, the selection committee shall consider an applicant's experience evaluating start-up companies, relationships with regional and national investment capital funds that may make investments in this state, experience managing publicly funded investment funds, performance managing existing portfolio funds and syndication partnerships, and experience gathering and making reports concerning investment fund performance data.

AB181-SSA1,27,4 2. The authority may reject a candidate for fund manager that the selection committee recommends under subd. 1.

AB181-SSA1,27,7 3. If the authority rejects a candidate for fund manager under subd. 2., the selection committee shall make another recommendation to the authority, subject to the requirements under subd. 1.

AB181-SSA1,27,9 (c) The authority shall staff the selection committee and pay the selection committee's administrative or other costs.

AB181-SSA1,27,13 239.42 Qualified capital funds. (1) Application. Any person may apply to the authority on a form prescribed by the authority for approval under this section. The application shall include the name, address, and tax identification number of the applicant and any other information the authority requires.

AB181-SSA1,27,16 (2) Approval for investments. The authority may approve an applicant under sub. (1) to receive fund capital. In determining whether to approve an applicant, the authority shall consider all of the following:

AB181-SSA1,27,17 (a) The applicant's investment experience.

AB181-SSA1,27,18 (b) The past performance of any investment managed by the applicant.

AB181-SSA1,27,20 (c) The applicant's commitment to investing in businesses within this state and maintaining an office in this state.

AB181-SSA1,27,23 (d) The applicant's commitment to making investments that are diverse with respect to the geographic location within this state and industry classification of the businesses in which the applicant invests.

AB181-SSA1,28,2 239.43 Investments of fund capital in qualified investment capital funds; requirements. (1) Fund investments. (a) From the appropriation under s. 20.195 (1) (q), the authority shall invest a total of at least $180,000,000 in qualified investment capital funds over the life of the fund.

AB181-SSA1,28,7 (b) The authority shall ensure that an amount equal to 100 percent of the fund capital it invests under this section is invested in businesses that are headquartered in this state and that at least $170,000,000 of that fund capital is invested in businesses that meet all of the following additional conditions at the time a qualified investment capital fund first invests in the business under this section:

AB181-SSA1,28,9 1. The business employs at least 50 percent of its full-time employees, including any subsidiary or other affiliated entity, in this state.

AB181-SSA1,28,11 2. The business employs fewer than 150 full-time employees in total, including any subsidiary or other affiliated entity.

AB181-SSA1,28,15 3. The business agrees to use fund capital only for research and development, the introduction of a new product in the market, the business's entry into a new market, or other activities that are expected to grow the business and create jobs in this state.

AB181-SSA1,28,18 4. The business is not primarily engaged in real estate development or sales, insurance, banking, lending, lobbying, political consulting, professional services, or retail sales, other than direct sales of products the business itself manufactures.

AB181-SSA1,28,20 (c) The authority may not invest more than $15,000,000 of fund capital in a single qualified investment capital fund.

AB181-SSA1,28,24 (2) Contracts. Before the authority invests any fund capital in a qualified investment capital fund, the authority shall contract with the qualified investment capital fund. In addition to any other terms required or negotiated by the authority, that contract shall include the following requirements:

AB181-SSA1,29,5 (a) The qualified investment capital fund shall commit to maintaining a significant physical presence in this state, including locating an office in this state that is staffed with at least one full-time employee of the qualified investment capital fund whose compensation is paid only by the qualified investment capital fund.

AB181-SSA1,29,10 (b) Within 4 years after the qualified investment capital fund receives a commitment of fund capital from the authority, the qualified investment capital fund shall have made initial investments and maintain reserves for follow-on investments of at least 100 percent of that fund capital in businesses approved by the authority during the life of the fund.

AB181-SSA1,29,12 (c) The qualified investment capital fund may not invest less than $250,000 in fund capital in any one business.

AB181-SSA1,29,19 (d) The qualified investment capital fund may not receive fund capital that exceeds 20 percent of the total moneys for investment, including any outstanding commitment, that the qualified investment capital fund has raised from all sources, except that a Wisconsin-based qualified investment capital fund, as determined by the authority, may not receive fund capital that exceeds 50 percent of the total moneys for investment, including any outstanding commitment, that the qualified investment capital fund has raised from all sources.

AB181-SSA1,29,23 (e) The authority's profit-sharing agreement with any qualified investment capital fund shall be on terms that are substantially equivalent to the terms applicable for other funding sources of the qualified investment capital fund for similar investments.

AB181-SSA1,30,4 (f) From any investment of fund capital by a qualified investment capital fund under this section, the qualified investment capital fund may not pay a fee to itself or to any principal or manager of the qualified investment capital fund that is higher than the average fee it earns on other investments, and the fee may not exceed 2.5 percent of the total amount of fund capital contributed to that investment by the authority.

AB181-SSA1,30,8 (g) The qualified investment capital fund shall disclose to the authority any interest that it or an owner, stockholder, partner, officer, director, member, employee, or agent of the qualified investment capital fund holds in a business in which the qualified investment capital fund invests or intends to invest fund capital.

AB181-SSA1,30,11 (h) The amount of fund capital the qualified investment capital fund receives may not be applied toward a tax credit under s. 71.07 (5b) or (5d), 71.28 (5b), 71.47 (5b), or 76.638.

AB181-SSA1,30,13 (i) The qualified investment capital fund shall maintain liability insurance in the amounts and for the coverages determined by the authority.

AB181-SSA1,30,16 (j) The qualified investment capital fund shall agree that the authority and the state may refer to the qualified investment capital fund's name in public announcements or other documents or communications relating to the fund.

AB181-SSA1,30,21 (3) Repayment of fund capital. In addition to any other legal remedies available to the authority, if a qualified investment capital fund fails to satisfy any of the requirements under sub. (2), the authority is entitled to payment from the qualified investment capital fund equal to 100 percent of the amount of fund capital the qualified investment capital fund received from the authority.

AB181-SSA1,30,24 239.435 Angel investor networks. (1) From the appropriation under s. 20.195 (1) (q), and subject to sub. (2), the authority may commit up to a total of $20,000,000 to investments proposed to the authority by angel investor networks.

AB181-SSA1,31,2 (2) The authority may commit fund capital to an investment in a business under this section only if all of the following requirements are satisfied:

AB181-SSA1,31,3 (a) The business is or will be headquartered in this state.

AB181-SSA1,31,5 (b) The angel investor network agrees to invest $2 for every $1 in fund capital that the authority commits to the investment.

AB181-SSA1,31,8 (c) The authority's profit-sharing agreement with the angel investor network is on terms that are substantially equivalent to the terms applicable for other members of the angel investor network with respect to the investment.

AB181-SSA1,31,12 239.437 Grants to qualified business development organizations. (1) Wisconsin forward jobs fund grants. From the appropriation under s. 20.195 (1) (q), the authority shall make grants to qualified business development organizations that total $8,000,000 over the life of the fund for investment in start-up businesses.

AB181-SSA1,31,16 (2) Application. Any person may apply to the authority, on a form prescribed by the authority, for approval under sub. (3). The application shall include the name, address, and tax identification number of the person and any other information the authority requires.

AB181-SSA1,31,22 (3) Approval. The authority may approve an applicant under sub. (2) to receive a grant under this section if the authority determines that the applicant operates a nonprofit or for-profit business incubator, regional economic development partnership, local economic development organization, or non-profit or for-profit entrepreneurial service agency that directly provides one or more of the following services to start-up businesses:

AB181-SSA1,32,2 (a) A facility that offers rent of the facility at a rate lower than the market rate in the community and provides shared administrative services or other assistance designed to reduce the costs and encourage the growth of a start-up business the facility serves.

AB181-SSA1,32,7 (b) As determined by the authority, high quality business support that is visible and easily accessible to entrepreneurs and small companies; that offers substantial management services or similar services to portfolio companies; and that integrates sources of deal flow, entrepreneurial support, and capital to effectively grow entrepreneurial commercialization outcomes.

AB181-SSA1,32,11 (4) Contracts. Before the authority makes a grant under this section to a qualified business development organization, the authority shall contract with the qualified business development organization. In addition to any other terms required by the authority, that contract shall include the following requirements:

AB181-SSA1,32,15 (a) The qualified business development organization shall commit to maintaining a significant physical presence in this state, including locating an office in this state that is staffed with at least one full-time employee of the qualified business development organization.

AB181-SSA1,32,19 (b) The qualified business development organization shall invest 100 percent of the amount of the grant it receives from the authority under this section in a business that meets all of the following conditions at the time the qualified business development organization first invests in the business under this paragraph:

AB181-SSA1,32,20 1. The business is headquartered in this state.

AB181-SSA1,32,22 2. The business employs at least 50 percent of its employees, including any subsidiary or other affiliated entity, in this state.

AB181-SSA1,33,2 3. The business agrees to use fund capital only for research and development, the introduction of a new product in the market, the business's entry into a new market, or other activities that are expected to grow the business and create jobs in this state.

AB181-SSA1,33,4 4. The business is not primarily engaged in real estate development or sales, insurance, banking, lending, lobbying, or political consulting.

AB181-SSA1,33,8 5. The business is participating in a business development program that is approved by the authority and is operated or approved by the qualified business development organization, and the business receives the investment under this paragraph as part of that program.

AB181-SSA1,33,13 (c) 1. When a qualified business development organization makes an investment of grant moneys in a business, the qualified business development organization shall at least match the amount of those grant moneys with an investment of capital in the business that the qualified business development organization has raised from other sources.

AB181-SSA1,33,19 2. If an investment of grant moneys subject to subd. 1. is made as part of an existing equity investment portfolio that the qualified business development organization already manages and that portfolio has been funded from other sources, the qualified business development organization shall apply those moneys supplied from those other sources for the purpose of satisfying the matching requirement under subd. 1.

AB181-SSA1,33,22 (d) The qualified business development organization may not apply the amount of the grant moneys it receives from the authority toward a tax credit under s. 71.07 (5b) or (5d), 71.28 (5b), 71.47 (5b), or 76.638.

AB181-SSA1,34,2 239.44 Businesses that operate in economically distressed areas. (1) In this section, "distressed community" means an economically distressed area, as designated by the Wisconsin Economic Development Corporation under s. 238.304 (1).

AB181-SSA1,34,5 (2) (a) To the extent feasible, the authority shall attempt to ensure that the moneys it invests under s. 239.435 are invested in businesses that operate in a distressed community.

AB181-SSA1,34,8 (b) To the extent feasible, the authority shall attempt to ensure that the moneys it grants under s. 239.437 are invested by qualified business development organizations in businesses that operate in a distressed community.

AB181-SSA1,34,11 (3) Upon its liquidation of assets under s. 239.49 (2) (a), the authority shall use 25 percent of the amount of those liquidated assets that exceeds $208,000,000 for an economic development program that serves distressed communities.

AB181-SSA1,34,15 239.45 Reporting requirements. (1) Annual report. Annually, the authority shall submit to the chief clerk of each house of the legislature, for distribution to the legislature under s. 13.172 (2), and to the governor, a report that includes all of the following: