Amendment ASA1-AB640

Innovation fund

This substitute amendment creates a nonlapsible fund to be known as the “innovation fund" (fund). From the interest and income of the fund, the Wisconsin Economic Development Corporation may provide financial assistance in various contexts, as set forth below. The State of Wisconsin Investment Board manages the fund.

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 WEDC, 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 substitute amendment as “qualifying companies." Under the substitute amendment, a qualifying company is identified by the company's principal business activity code under the North American Industry Classification System (NAICS).

The substitute amendment directs the Department of Revenue to determine before May 1, 2019, the total amount of withholding taxes due and payable from qualifying companies for calendar year 2017. Then, on July 1, 2019, and on each July 1 thereafter, ending on July 1, 2033, DOR must deposit in the fund an amount equal to 95 percent of the withholding taxes due and payable from qualifying companies that exceeds the total amount calculated for calendar year 2017. 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.

The substitute amendment also requires corporations, limited liability companies, limited partnerships, limited liability partnerships, and cooperatives to identify their NAICS codes when filing their business formation documents with the Department of Financial Institutions or, with respect to foreign entities, when filing with DFI for authorization to conduct business in this state. DFI must make these NAICS codes available to DOR upon request, which availability may be established by providing access to an electronic database.

Innovation Fund Council

The substitute amendment requires WEDC to establish an Innovation Fund Council to advise WEDC with respect to the use of fund moneys for the financial assistance provided under the substitute amendment and perform other duties as determined by WEDC. The advisory council consists of the following seven members:

1. One member of the board of directors of WEDC who serves as chairperson of the council and is appointed by the chairperson of the board of directors of WEDC.

2. The executive director of the Investment Board or his or her designee.

3. The managing director of the Wisconsin Alumni Research Foundation, Inc., or his or her designee.

4. Four members appointed by the chairperson of the board of directors of WEDC to serve terms of not more than four years, as determined by the chairperson. At least three of those members must have significant experience working in or with a key industry cluster in Wisconsin and at least one must have significant experience in early stage investing. All of those members must have access to national networks of stakeholders in their respective industries.

Economic development programs supported by the fund

Under the substitute amendment, subject to certain additional limitations and requirements set forth in the substitute amendment, WEDC administers the following economic development programs using interest and income of the fund:

1. WEDC may provide financial assistance to businesses and other entities headquartered in Wisconsin for the development or deployment of new technologies, components, systems, or processes to solve or significantly improve upon local problems identified by WEDC with the advisory council's concurrence.

2. WEDC may provide financial assistance to businesses and other entities headquartered in Wisconsin for the development or deployment of a new technology, component, system, or process to solve or significantly improve upon a problem affecting a significant portion of Wisconsin or the nation identified by WEDC.

3. WEDC may provide financial assistance to early stage businesses for the purpose of facilitating rapid prototype development and pilot testing of potentially marketable new technologies, components, or products.

4. WEDC may provide financial assistance under contracts with industry cluster partnerships. WEDC may award a contract to an industry cluster partnership only if it meets certain conditions and may award only one contract per year.

The substitute amendment further authorizes WEDC to expend interest and income of the fund to partially fund any financial assistance WEDC provides under a program WEDC administers to support business accelerators in Wisconsin. The substitute amendment also authorizes WEDC to use interest and income of the fund to partially fund any financial assistance that WEDC provides to match or partially match grants made by the federal small business administration or under the federal Small Business Technology Transfer Program.

Additional contracting authority for the Investment Board

The substitute amendment authorizes the Investment Board to consult and provide advice and services to WEDC relating to the fund and economic development programs funded by it. The Investment Board may charge WEDC for any consultation, advice, or services the Investment Board provides.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB640-ASA1,1 Section 1 . 19.42 (10) (t) of the statutes is created to read:

AB640-ASA1,4,2 19.42 (10) (t) The members of the innovation fund council established under s. 238.41.

AB640-ASA1,2 Section 2 . 19.42 (13) (q) of the statutes is created to read:

AB640-ASA1,4,5 19.42 (13) (q) The members of the innovation fund council established under s. 238.41.

AB640-ASA1,3 Section 3 . 20.192 (1) (t) of the statutes is created to read:

AB640-ASA1,4,13 20.192 (1) (t) Innovation fund and programs; general program operations; financial assistance. From interest and income of the innovation fund, a sum sufficient to provide financial assistance under ss. 238.42, 238.43, 238.44, and 238.45 and for general program operations and administrative expenses related to the innovation fund council and the programs administered under subch. III of ch. 238. Not more than the following amounts may be expended under this paragraph for general program operations and administrative expenses under subch. III of ch. 238:

AB640-ASA1,4,14 1. In fiscal year 2019-20, 5 percent of the moneys in the innovation fund.

AB640-ASA1,4,15 2. In fiscal year 2020-21, 5 percent of the moneys in the innovation fund.

AB640-ASA1,4,16 3. In fiscal year 2021-22, 2 percent of the moneys in the innovation fund.

AB640-ASA1,4,18 4. In fiscal year 2022-23 and in each fiscal year thereafter, 0.5 percent of the moneys in the innovation fund.

AB640-ASA1,4 Section 4 . 20.192 (1) (y) of the statutes is created to read:

AB640-ASA1,4,23 20.192 (1) (y) Innovation fund and programs; additional operational or administrative expenses. From interest and income of the innovation fund, a sum sufficient equal to any amount authorized under s. 238.48 (2) for general program operations and administrative expenses.

AB640-ASA1,5 Section 5 . 20.536 (1) (k) of the statutes is amended to read:

AB640-ASA1,5,4 20.536 (1) (k) General program operations. All moneys received from assessments made under s. 25.187 (2) and from charges made under s. 25.17 (9), and from assessments or charges made under s. 25.17 (73), for the purpose of conducting general program operations.

AB640-ASA1,6 Section 6 . 25.14 (1) (a) 20. of the statutes is created to read:

AB640-ASA1,5,6 25.14 (1) (a) 20. The innovation fund established under s. 25.90.

AB640-ASA1,7 Section 7 . 25.17 (1) (hq) of the statutes is created to read:

AB640-ASA1,5,8 25.17 (1) (hq) Innovation fund (s. 25.90);

AB640-ASA1,8 Section 8 . 25.17 (73) of the statutes is created to read:

AB640-ASA1,5,23 25.17 (73) Have authority to consult and provide advice and services to the Wisconsin Economic Development Corporation relating to the innovation fund and the economic development programs funded by the innovation fund. The scope of any consultation, advice, or services under this subsection shall be defined by agreement between the board and the Wisconsin Economic Development Corporation and shall include the board's consultation with the Wisconsin Economic Development Corporation concerning the board's investment of the fund. This agreement shall require the cost of any consultation, advice, or services provided by the board to be paid by the Wisconsin Economic Development Corporation, and the agreement may authorize the board to make assessments against the money and property controlled by the Wisconsin Economic Development Corporation or to charge the Wisconsin Economic Development Corporation for the cost of any consultation, advice, or services provided. All moneys received by the board under this subsection shall be credited to the appropriation account under s. 20.536 (1) (k).

AB640-ASA1,9 Section 9 . 25.90 of the statutes is created to read:

AB640-ASA1,6,5 25.90 Innovation fund. There is established a separate nonlapsible trust fund designated as the innovation fund. The fund shall consist of all moneys deposited in the fund under s. 73.17, together with all donations, gifts, or bequests made to the fund, all moneys transferred to the fund from other funds, and all income or interest earned by the fund.

AB640-ASA1,10 Section 10 . 73.17 of the statutes is created to read:

AB640-ASA1,6,22 73.17 Innovation fund. (1) In this section, “qualifying company" means a person whose principal business activity code in the North American Industry Classification System, 2017 edition, published by the federal office of management and budget, is one of the following: 111, 112, 311, 424, 445, 481, 3121, 3364, 4244, 4245, 4881, 221111, 221112, 221113, 221114, 221115, 221116, 221117, 221121, 221122, 221210, 221310, 221330, 237990, 238210, 311221, 311224, 324110, 324191, 325193, 325199, 325220, 325311, 325312, 325314, 325320, 325411, 325412, 325413, 325414, 325998, 326122, 326199, 327331, 332410, 332420, 332911, 332913, 332999, 333111, 333249, 333241, 333242, 333318, 333413, 333414, 333415, 333611, 333612, 333613, 333618, 333991, 333993, 333994, 333995, 333996, 333999, 334111, 334290, 334412, 334413, 334416, 334418, 334419, 334510, 334511, 334512, 334513, 334514, 334515, 334516, 334517, 334519, 335110, 335121, 335122, 335129, 335210, 335220, 335311, 335312, 335313, 335314, 335911, 335912, 335921, 335929, 335931, 335999, 339112, 339113, 339114, 339115, 339116, 511210, 517410, 541320, 541330, 541370, 541380, 541511, 541512, 541519, 541620, 541713, 541714, 541715, 611512, 621491, 621493, 621511, 621512, 622110, or 811219.

AB640-ASA1,6,25 (2) (a) Before May 1, 2019, the department of revenue shall determine the total amount of withholding taxes due and payable under subch. X of ch. 71 from qualifying companies for calendar year 2017.

AB640-ASA1,7,5 (b) Subject to par. (d), on July 1, 2019, and on each July 1 thereafter, ending on July 1, 2033, the department of revenue shall deposit into the innovation fund an amount equal to 95 percent of the amount of withholding taxes due and payable under subch. X of ch. 71 from qualifying companies in the previous calendar year that exceeds the amount determined under par. (a).

AB640-ASA1,7,13 (c) A person who is subject to withholding taxes under subch. X of ch. 71 shall indicate to the department of revenue whether it is a qualifying company for purposes of this section in the manner determined by the department. If the person has not identified the person's principal business activity code in the North American Industry Classification System, 2017 edition, published by the federal office of management and budget, for purposes of registering with the department of financial institutions, the person shall provide the code to the department of revenue in the manner determined by the department of revenue.

AB640-ASA1,7,16 (d) The department of revenue may not deposit into the innovation fund more than $50,000,000 in any fiscal year, and the total amount deposited may not exceed $500,000,000.

AB640-ASA1,11 Section 11 . 178.0901 (3) (e) of the statutes is created to read:

AB640-ASA1,7,20 178.0901 (3) (e) The partnership's principal business activity code in the North American Industry Classification System, 2017 edition, published by the federal office of management and budget.

AB640-ASA1,12 Section 12 . 178.1003 (6) of the statutes is created to read:

AB640-ASA1,7,24 178.1003 (6) The partnership's principal business activity code in the North American Industry Classification System, 2017 edition, published by the federal office of management and budget.

AB640-ASA1,13 Section 13 . 179.11 (1) (e) of the statutes is created to read:

AB640-ASA1,8,3 179.11 (1) (e) The limited partnership's principal business activity code in the North American Industry Classification System, 2017 edition, published by the federal office of management and budget.

AB640-ASA1,14 Section 14 . 179.82 (9) of the statutes is created to read:

AB640-ASA1,8,7 179.82 (9) The foreign limited partnership's principal business activity code in the North American Industry Classification System, 2017 edition, published by the federal office of management and budget.

AB640-ASA1,15 Section 15 . 179.85 of the statutes is amended to read:

AB640-ASA1,8,16 179.85 Amendments. If any statement in the application for registration of a foreign limited partnership was false when made or any arrangements or other facts described have changed, making the application inaccurate in any respect, the foreign limited partnership shall promptly file with the department, together with a filing fee of $15, a certificate, signed and sworn to by a general partner, correcting the statement. This section does not apply with respect to changes in the foreign limited partnership's principal business activity and the codes specified in s. 179.82 (9).

AB640-ASA1,16 Section 16 . 180.0202 (1) (j) of the statutes is created to read:

AB640-ASA1,8,20 180.0202 (1) (j) The corporation's principal business activity code in the North American Industry Classification System, 2017 edition, published by the federal office of management and budget.

AB640-ASA1,17 Section 17 . 180.1503 (1) (k) of the statutes is created to read:

AB640-ASA1,8,24 180.1503 (1) (k) The foreign corporation's principal business activity code in the North American Industry Classification System, 2017 edition, published by the federal office of management and budget.

AB640-ASA1,18 Section 18 . 180.1504 (2) of the statutes is amended to read:

AB640-ASA1,9,4 180.1504 (2) The requirements of s. 180.1503 (1) (a) to (h) and (k) and (2) for obtaining an original certificate of authority apply to obtaining an amended certificate under this section except that a foreign corporation is not required to deliver a certificate of status with an application solely to change a fictitious name.

AB640-ASA1,19 Section 19 . 181.0202 (1) (h) of the statutes is created to read:

AB640-ASA1,9,8 181.0202 (1) (h) If applicable, the corporation's principal business activity code in the North American Industry Classification System, 2017 edition, published by the federal office of management and budget.

AB640-ASA1,20 Section 20 . 181.1503 (1) (i) of the statutes is created to read:

AB640-ASA1,9,12 181.1503 (1) (i) If applicable, the foreign corporation's principal business activity code in the North American Industry Classification System, 2017 edition, published by the federal office of management and budget.

AB640-ASA1,21 Section 21 . 182.01 (7) of the statutes is created to read:

AB640-ASA1,9,21 182.01 (7) Transfer of business code information. Upon request by the department of revenue, the department of financial institutions shall make available to the department of revenue, which availability may be established by providing access to an electronic database, the business activity codes under ss. 178.0901 (3) (e), 178.1003 (6), 179.11 (1) (e), 179.82 (9), 180.0202 (1) (j), 180.1503 (1) (k), 181.0202 (1) (h), 181.1503 (1) (i), 183.0202 (7), 183.1004 (8), 185.05 (1) (n), and 193.215 (2) (a) 5. identified by business entities in their filings with the department of financial institutions.

AB640-ASA1,22 Section 22 . 183.0202 (7) of the statutes is created to read:

AB640-ASA1,9,25 183.0202 (7) The limited liability company's principal business activity code in the North American Industry Classification System, 2017 edition, published by the federal office of management and budget.

AB640-ASA1,23 Section 23. 183.1004 (8) of the statutes is created to read:

AB640-ASA1,10,4 183.1004 (8) The foreign limited liability company's principal business activity code in the North American Industry Classification System, 2017 edition, published by the federal office of management and budget.

AB640-ASA1,24 Section 24 . 185.05 (1) (n) of the statutes is created to read:

AB640-ASA1,10,8 185.05 (1) (n) If applicable, the cooperative's principal business activity code in the North American Industry Classification System, 2017 edition, published by the federal office of management and budget.

AB640-ASA1,25 Section 25 . 193.215 (2) (a) 5. of the statutes is created to read:

AB640-ASA1,10,12 193.215 (2) (a) 5. If applicable, the cooperative's principal business activity code in the North American Industry Classification System, 2017 edition, published by the federal office of management and budget.

AB640-ASA1,26 Section 26 . 238.02 (4) of the statutes is amended to read:

AB640-ASA1,10,17 238.02 (4) All powers and duties assigned to the corporation 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 corporation or a committee established by the board or the innovation fund council.

AB640-ASA1,27 Section 27 . 238.04 (7) of the statutes is amended to read:

AB640-ASA1,10,21 238.04 (7) Execute contracts and other instruments required for the operation of the corporation, including the agreement with the investment board under s. 25.17 (73).

AB640-ASA1,28 Section 28 . Subchapter III of chapter 238 [precedes 238.40] of the statutes is created to read:

AB640-ASA1,10,24 Chapter 238

AB640-ASA1,11,2 Subchapter III innovation

AB640-ASA1,11,3 238.40 Definitions. In this subchapter:

AB640-ASA1,11,4 (1) “Council” means the innovation fund council established under s. 238.41.