SB218: Bill Text

3. Agree to use fund capital only for research and development, the introduction of a new product in the market, entry into a new market, or other activities that are expected to grow the businesses and create jobs in Wisconsin.

4. Are not primarily engaged in real estate development or sales, insurance, banking, lending, lobbying, political consulting, professional services, or retail sales, other than the direct sales of products a business itself manufactures.

The bill provides that a qualified investment capital fund must contract with the authority before receiving any fund capital. In the contract, the qualified investment capital fund must agree to a number of conditions, including the following:

1. The qualified investment capital fund must commit to maintaining a significant physical presence in Wisconsin, including an office that is staffed by at least one full-time employee.

2. Within four years after the qualified investment capital fund receives a commitment of fund capital from the authority, the qualified investment capital fund must have an amount equal to 100 percent of that fund capital either invested in or held in reserve for follow-on investments in businesses that are approved by the authority.

3. Unless the qualified investment capital fund is a Wisconsin-based qualified investment capital fund, as determined by the authority, the qualified investment capital fund may not receive fund capital that exceeds 20 percent of the total capital the investment capital fund has raised from all sources. A Wisconsin-based qualified investment capital fund may not receive fund capital that exceeds 50 percent of the total amount of capital the Wisconsin-based qualified investment capital fund has received from all sources.

4. The authority's profit-sharing agreement with a qualified investment capital fund must be on terms that are substantially equivalent to the terms enjoyed for similar investments by other funding sources of the qualified investment capital fund.

5. From any investment of fund capital by a qualified investment capital fund, 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 greater than the average fee the investment capital fund earns on its other investments or equals more than 2.5 percent of the total amount of fund capital contributed to that investment by the authority.

6. The qualified investment capital fund must disclose to the authority any interest that it holds in a business in which the qualified investment capital fund invests or intends to invest fund capital.

Angel investor networks

Additionally, the bill authorizes the authority to invest fund capital directly in a Wisconsin business if that investment is proposed to the authority by an angel investor or angel group of angel investors (angel investor network). The authority may commit up to a total of $20,000,000 in fund capital to such investments if the business in which the investment is made is a Wisconsin business, the angel investor network agrees to invest at least $2 for every $1 in fund capital that the authority commits to the investment, and the authority's profit-sharing agreement with the angel investor network is comparable to the terms enjoyed by other persons in the angel investor network with respect to the investment. Under the bill the authority must attempt to ensure that its investments in businesses suggested by angel investors or networks are made in businesses that operate in economically distressed areas.

Qualified business development organizations

Under the bill, the authority may commit up to $8,000,000 in fund capital to qualified business development organizations. The authority may approve a person as a qualified business development organization if the authority determines that the person 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 certain business support and other services to start-up businesses.

Under the bill, a qualified business development organization is subject to contract requirements similar to those applicable for qualified investment capital funds. Among other contract requirements, the qualified business development organization must invest fund capital in a business the qualified business development organization itself serves through its business development programs. Also, a qualified business development organization must at least match the amount of moneys it receives from the Wisconsin forward jobs fund with an investment of capital in the business that the qualified business development organization has raised from other sources. The authority must attempt to ensure that qualified business development organizations invest fund capital in businesses that operate in economically distressed areas.

Reporting requirements

Under the bill, the authority must submit an annual report to the legislature and the governor that contains all of the following information:

1. An accounting of the financial status of the Wisconsin forward jobs fund, including the opinion of an independent certified public accountant.

2. The current investment policy of the Wisconsin forward jobs fund.

3. The authority's internal rate of return from its investments of fund capital.

4. For each qualified investment capital fund in which the authority held an investment of fund capital during the preceding year, the name and address of the investment capital fund; the amount of fund capital invested with each qualified investment capital fund; the internal rate of return realized by the qualified investment capital fund on each investment; and an accounting of any fee the qualified investment capital fund paid to itself or any principal or manager of the qualified investment capital fund during the preceding year.

5. For each business in which a qualified investment capital fund held an investment of fund capital during the preceding year, the name and address of the business; a description of the nature of the business; the amount of each investment of fund capital in the business and the amount contributed to that investment by the qualified investment capital fund; an identification of the qualified investment capital fund that made the investment; and a statement of the number of employees the business employed when the qualified investment capital fund first invested fund capital in the business, the number of employees the business employed on January 1 of the preceding year, and the number of employees the business employed on December 31 of the preceding year.

6. For each investment held by the authority with an angel investor network in a business during the preceding year, the name and address of the business; a description of the nature of the business; an identification of the angel investor network; the amount of the investment and the amount contributed to the investment by the angel investor network; and a statement of the number of employees the business employed when the authority first invested fund capital in the business, the number of employees the business employed on January 1 of the preceding year, and the number of employees the business employed on December 31 of the preceding year.

7. With respect to grants to qualified business development organizations, an accounting of the total amount of moneys the authority granted to qualified business development organizations during the preceding year and the name and address of each qualified business development organization and the amount of each grant. For each business in which a qualified business development organization held an investment of grant moneys during the preceding year, the name and address of the business; a description of the nature of the business; an identification of the qualified business development organization that made the investment; the total amount of each investment in the business and the amount contributed to that investment by the qualified business development organization or by other funding sources; and a statement of the number of employees the business employed when the qualified business development organization first invested grant moneys in the business, the number of employees the business employed on January 1 of the preceding year, and the number of employees the business employed on December 31 of the preceding year.

The bill also requires the authority to submit a report to the Joint Committee on Finance in January 2018 that includes all of the following:

1. A comprehensive assessment of the performance to date of the Wisconsin forward jobs fund and the programs administered by the authority concerning the Wisconsin forward jobs fund.

2. Any recommendations the authority has for improvement of the programs administered by the authority concerning the Wisconsin forward jobs fund and the specific actions the authority intends to take or proposes to be taken to implement those recommendations.

3. Any recommendations SWIB has for improvement of the programs administered by the authority concerning the Wisconsin forward jobs fund and the specific actions SWIB proposes to be taken to implement those recommendations.

Winding up of the investment programs

In December 2031, the authority must liquidate all of its assets, including its remaining investments, related to the Wisconsin forward jobs fund and pay the proceeds of that liquidation to the secretary of administration for deposit into the general fund, except that the authority must use 25 percent of the amount of that liquidation that exceeds $208,000,000 for an economic development program that serves economically distressed areas in Wisconsin. After the authority liquidates those assets, makes that payment, transfers any tangible personal property to the Department of Administration, and assigns any contracts to the secretary of administration, the authority may not conduct any more business concerning the Wisconsin forward jobs fund.

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:

SB218,1 Section 1. 1.12 (1) (b) of the statutes is amended to read:

SB218,6,8 1.12 (1) (b) "State agency" means an office, department, agency, institution of higher education, the legislature, a legislative service agency, the courts, a judicial branch agency, an association, society, or other body in state government that is created or authorized to be created by the constitution or by law, for which appropriations are made by law, excluding the Health Insurance Risk-Sharing Plan Authority and, the Wisconsin Economic Development Corporation, and the Wisconsin Venture Capital Authority.

SB218,2 Section 2. 13.172 (1) of the statutes is amended to read:

SB218,7,6 13.172 (1) In this section, "agency" means an 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, that is entitled to expend moneys appropriated by law, including the legislature and the courts, and any authority created in subch. II of ch. 114 or subch. III of ch. 149 or in ch. 231, 233, 234, 238, 239, or 279.

SB218,3 Section 3. 13.48 (13) (a) of the statutes is amended to read:

SB218,7,20 13.48 (13) (a) Except as provided in par. (b) or (c), every building, structure or facility that is constructed for the benefit of or use of the state, any state agency, board, commission or department, the University of Wisconsin Hospitals and Clinics Authority, the Fox River Navigational System Authority, the Wisconsin Economic Development Corporation, the Wisconsin Venture Capital Authority, or any local professional baseball park district created under subch. III of ch. 229 if the construction is undertaken by the department of administration on behalf of the district, shall be in compliance with all applicable state laws, rules, codes and regulations but the construction is not subject to the ordinances or regulations of the municipality in which the construction takes place except zoning, including without limitation because of enumeration ordinances or regulations relating to materials used, permits, supervision of construction or installation, payment of permit fees, or other restrictions.

SB218,4 Section 4. 13.62 (2) of the statutes is amended to read:

SB218,8,2 13.62 (2) "Agency" means any board, commission, department, office, society, institution of higher education, council, or committee in the state government, or any authority created in subch. II of ch. 114 or subch. III of ch. 149 or in ch. 231, 232, 233, 234, 237, 238, 239, or 279, except that the term does not include a council or committee of the legislature.

SB218,5 Section 5. 13.94 (1) (dx) of the statutes is created to read:

SB218,8,8 13.94 (1) (dx) Biennially, beginning in 2013, conduct a financial audit of the Wisconsin Venture Capital Authority and a program evaluation audit of the programs administered by the Wisconsin Venture Capital Authority under ch. 239. The legislative audit bureau shall file a copy of each audit report under this paragraph with the distributees specified in par. (b).

SB218,6 Section 6. 13.94 (1s) (c) 9. of the statutes is created to read:

SB218,8,11 13.94 (1s) (c) 9. The Wisconsin Venture Capital Authority for the cost of the audit required to be performed under sub. (1) (dx).

SB218,7 Section 7. 13.94 (4) (a) 1. of the statutes is amended to read:

SB218,9,4 13.94 (4) (a) 1. Every state department, board, examining board, affiliated credentialing board, commission, independent agency, council or office in the executive branch of state government; all bodies created by the legislature in the legislative or judicial branch of state government; any public body corporate and politic created by the legislature including specifically the Fox River Navigational System Authority, the Lower Fox River Remediation Authority, the Wisconsin Aerospace Authority, and the Wisconsin Economic Development Corporation, and the Wisconsin Venture Capital Authority, a professional baseball park district, a local professional football stadium district, a local cultural arts district, and a long-term care district under s. 46.2895; every Wisconsin works agency under subch. III of ch. 49; every provider of medical assistance under subch. IV of ch. 49; technical college district boards; every county department under s. 51.42 or 51.437; every nonprofit corporation or cooperative or unincorporated cooperative association to which moneys are specifically appropriated by state law; and every corporation, institution, association or other organization which receives more than 50% of its annual budget from appropriations made by state law, including subgrantee or subcontractor recipients of such funds.

SB218,8 Section 8. 13.95 (intro.) of the statutes is amended to read:

SB218,9,19 13.95 Legislative fiscal bureau. (intro.) There is created a bureau to be known as the "Legislative Fiscal Bureau" headed by a director. The fiscal bureau shall be strictly nonpartisan and shall at all times observe the confidential nature of the research requests received by it; however, with the prior approval of the requester in each instance, the bureau may duplicate the results of its research for distribution. Subject to s. 230.35 (4) (a) and (f), the director or the director's designated employees shall at all times, with or without notice, have access to all state agencies, the University of Wisconsin Hospitals and Clinics Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing Plan Authority, the Lower Fox River Remediation Authority, the Wisconsin Economic Development Corporation, the Wisconsin Venture Capital Authority, and the Fox River Navigational System Authority, and to any books, records, or other documents maintained by such agencies or authorities and relating to their expenditures, revenues, operations, and structure.

SB218,9 Section 9. 16.002 (2) of the statutes is amended to read:

SB218,9,25 16.002 (2) "Departments" means constitutional offices, departments, and independent agencies and includes all societies, associations, and other agencies of state government for which appropriations are made by law, but not including authorities created in subch. II of ch. 114 or subch. III of ch. 149 or in ch. 231, 232, 233, 234, 237, 238, 239, or 279.

SB218,10 Section 10. 16.004 (4) of the statutes is amended to read:

SB218,10,7 16.004 (4) Freedom of access. The secretary and such employees of the department as the secretary designates may enter into the offices of state agencies and authorities created under subch. II of ch. 114 and subch. III of ch. 149 and under chs. 231, 233, 234, 237, 238, 239, and 279, and may examine their books and accounts and any other matter that in the secretary's judgment should be examined and may interrogate the agency's employees publicly or privately relative thereto.

SB218,11 Section 11. 16.004 (5) of the statutes is amended to read:

SB218,10,13 16.004 (5) Agencies and employees to cooperate. All state agencies and authorities created under subch. II of ch. 114 and subch. III of ch. 149 and under chs. 231, 233, 234, 237, 238, 239, and 279, and their officers and employees, shall cooperate with the secretary and shall comply with every request of the secretary relating to his or her functions.

SB218,12 Section 12. 16.004 (12) (a) of the statutes is amended to read:

SB218,10,23 16.004 (12) (a) In this subsection, "state agency" means an association, authority, board, department, commission, independent agency, institution, office, society, or other body in state government created or authorized to be created by the constitution or any law, including the legislature, the office of the governor, and the courts, but excluding the University of Wisconsin Hospitals and Clinics Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing Plan Authority, the Lower Fox River Remediation Authority, the Wisconsin Economic Development Corporation, the Wisconsin Venture Capital Authority, and the Fox River Navigational System Authority.

SB218,13 Section 13. 16.015 of the statutes is created to read:

SB218,11,3 16.015 Administrative support; Wisconsin Venture Capital Authority. The department shall provide administrative support services to the Wisconsin Venture Capital Authority.

SB218,14 Section 14. 16.045 (1) (a) of the statutes is amended to read:

SB218,11,10 16.045 (1) (a) "Agency" means an office, department, independent 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, that is entitled to expend moneys appropriated by law, including the legislature and the courts, but not including an authority created in subch. II of ch. 114 or subch. III of ch. 149 or in ch. 231, 232, 233, 234, 237, 238, 239, or 279.

SB218,15 Section 15. 16.15 (1) (ab) of the statutes is amended to read:

SB218,11,16 16.15 (1) (ab) "Authority" has the meaning given under s. 16.70 (2), but excludes the University of Wisconsin Hospitals and Clinics Authority, the Lower Fox River Remediation Authority, the Wisconsin Economic Development Corporation, the Wisconsin Venture Capital Authority, and the Health Insurance Risk-Sharing Plan Authority.

SB218,16 Section 16. 16.41 (4) of the statutes is amended to read:

SB218,11,19 16.41 (4) In this section, "authority" means a body created under subch. II of ch. 114 or subch. III of ch. 149 or under ch. 231, 233, 234, 237, 238, 239, or 279.

SB218,17 Section 17 . 16.417 (1) (b) of the statutes is amended to read:

SB218,11,22 16.417 (1) (b) "Authority" means a body created under subch. II of ch. 114 or ch. 231, 232, 233, 234, 237, 238, 239, or 279.

SB218,18 Section 18. 16.5195 of the statutes is created to read:

SB218,12,3 16.5195 Transfers to the Wisconsin forward jobs fund. The secretary shall transfer the following amounts from the general fund to the Wisconsin forward jobs fund:

SB218,12,4 (1) In fiscal year 2013-14, $25,000,000.

SB218,12,5 (2) In fiscal year 2014-15, $43,000,000.

SB218,12,6 (3) In fiscal year 2015-16, $50,000,000.

SB218,12,7 (4) In fiscal year 2016-17, $50,000,000.

SB218,12,8 (5) In fiscal year 2017-18, $20,000,000.

SB218,12,9 (6) In fiscal year 2018-19, $20,000,000.

SB218,19 Section 19. 16.52 (7) of the statutes is amended to read:

SB218,12,21 16.52 (7) Petty cash account. With the approval of the secretary, each agency that is authorized to maintain a contingent fund under s. 20.920 may establish a petty cash account from its contingent fund. The procedure for operation and maintenance of petty cash accounts and the character of expenditures therefrom shall be prescribed by the secretary. In this subsection, "agency" means an office, department, independent 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, that is entitled to expend moneys appropriated by law, including the legislature and the courts, but not including an authority created in subch. II of ch. 114 or subch. III of ch. 149 or in ch. 231, 233, 234, 237, 238, 239, or 279.

SB218,20 Section 20. 16.528 (1) (a) of the statutes is amended to read:

SB218,13,3 16.528 (1) (a) "Agency" means an office, department, independent 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, that is entitled to expend moneys appropriated by law, including the legislature and the courts, but not including an authority created in subch. II of ch. 114 or subch. III of ch. 149 or in ch. 231, 233, 234, 237, 238, 239, or 279.

SB218,21 Section 21. 16.53 (2) of the statutes is amended to read:

SB218,13,13 16.53 (2) Improper invoices. If an agency receives an improperly completed invoice, the agency shall notify the sender of the invoice within 10 working days after it receives the invoice of the reason it is improperly completed. In this subsection, "agency" means an office, department, independent 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, that is entitled to expend moneys appropriated by law, including the legislature and the courts, but not including an authority created in subch. II of ch. 114 or subch. III of ch. 149 or in ch. 231, 233, 234, 237, 238, 239, or 279.

SB218,22 Section 22. 16.54 (9) (a) 1. of the statutes is amended to read:

SB218,13,20 16.54 (9) (a) 1. "Agency" means an office, department, independent 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, but not including an authority created in subch. II of ch. 114 or subch. III of ch. 149 or in ch. 231, 233, 234, 237, 238, 239, or 279.

SB218,23 Section 23. 16.765 (1) of the statutes is amended to read:

SB218,14,8 16.765 (1) Contracting agencies, the University of Wisconsin Hospitals and Clinics Authority, the Fox River Navigational System Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing Plan Authority, the Lower Fox River Remediation Authority, the Wisconsin Economic Development Corporation, the Wisconsin Venture Capital Authority, and the Bradley Center Sports and Entertainment Corporation shall include in all contracts executed by them a provision obligating the contractor not to discriminate against any employee or applicant for employment because of age, race, religion, color, handicap, sex, physical condition, developmental disability as defined in s. 51.01 (5), sexual orientation as defined in s. 111.32 (13m), or national origin and, except with respect to sexual orientation, obligating the contractor to take affirmative action to ensure equal employment opportunities.

SB218,24 Section 24. 16.765 (2) of the statutes is amended to read:

SB218,15,2 16.765 (2) Contracting agencies, the University of Wisconsin Hospitals and Clinics Authority, the Fox River Navigational System Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing Plan Authority, the Lower Fox River Remediation Authority, the Wisconsin Economic Development Corporation, the Wisconsin Venture Capital Authority, and the Bradley Center Sports and Entertainment Corporation shall include the following provision in every contract executed by them: "In connection with the performance of work under this contract, the contractor agrees not to discriminate against any employee or applicant for employment because of age, race, religion, color, handicap, sex, physical condition, developmental disability as defined in s. 51.01 (5), sexual orientation or national origin. This provision shall include, but not be limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. Except with respect to sexual orientation, the contractor further agrees to take affirmative action to ensure equal employment opportunities. The contractor agrees to post in conspicuous places, available for employees and applicants for employment, notices to be provided by the contracting officer setting forth the provisions of the nondiscrimination clause".

SB218,25 Section 25. 16.765 (5) of the statutes is amended to read:

SB218,15,21 16.765 (5) The head of each contracting agency and the boards of directors of the University of Wisconsin Hospitals and Clinics Authority, the Fox River Navigational System Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing Plan Authority, the Lower Fox River Remediation Authority, the Wisconsin Economic Development Corporation, the Wisconsin Venture Capital Authority, and the Bradley Center Sports and Entertainment Corporation shall be primarily responsible for obtaining compliance by any contractor with the nondiscrimination and affirmative action provisions prescribed by this section, according to procedures recommended by the department. The department shall make recommendations to the contracting agencies and the boards of directors of the University of Wisconsin Hospitals and Clinics Authority, the Fox River Navigational System Authority, the Wisconsin Aerospace Authority, the Health Insurance Risk-Sharing Plan Authority, the Lower Fox River Remediation Authority, the Wisconsin Economic Development Corporation, the Wisconsin Venture Capital Authority, and the Bradley Center Sports and Entertainment Corporation for improving and making more effective the nondiscrimination and affirmative action provisions of contracts. The department shall promulgate such rules as may be necessary for the performance of its functions under this section.