CORRECTED COPY
LRB-4608/1
MPG/JK/ARG:kjf/emw/amn
2017 - 2018 LEGISLATURE
November 14, 2017 - Introduced by Representatives Neylon, Rohrkaste, Crowley,
Fields, Genrich, Horlacher, Krug, Mursau, Ohnstad, Tusler, Zepnick and
Goyke, cosponsored by Senators Darling, Wanggaard, Feyen,
Johnson and
Olsen. Referred to Committee on Small Business Development.
AB640,1,7
1An Act to amend 20.536 (1) (k) and 25.14 (1) (a) (intro.); and
to create 19.42 (10)
2(t), 19.42 (13) (q), 20.192 (1) (t), 20.192 (1) (y), 25.17 (73), 25.90, 73.17 and
3subchapter III of chapter 238 [precedes 238.40] of the statutes;
relating to:
4creating the innovation fund and economic development programs funded by
5that fund, establishing the Innovation Fund Council, authorizing the State of
6Wisconsin Investment Board to provide certain advice and services to state
7agencies and others, and making appropriations.
Analysis by the Legislative Reference Bureau
Innovation fund
This bill creates a nonlapsible fund to be known as the “innovation fund" (fund).
From the interest earnings of the fund, the Wisconsin Economic Development
Corporation may make grants, and payments under certain contracts, as set forth
below. For short-term management, the fund is included in the state investment
fund managed by the State of Wisconsin 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 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 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 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.
Innovation Fund Council
The bill requires WEDC to establish an Innovation Fund Council to advise
WEDC with respect to the use of fund moneys to make grants and to make payments
under certain contracts, as set forth below. The advisory council consists of the
following 11 members:
1. One member appointed by the executive director of the Investment Board.
2. One member appointed by the managing director of the Wisconsin Alumni
Research Foundation.
3. One member appointed by the governor who serves in a senior management
position at a manufacturing company headquartered in Wisconsin that employs at
least 250 employees and engages in research and development.
4. One member appointed by the governor who serves in a senior management
position at a manufacturing company headquartered in Wisconsin that employs
fewer than 50 employees and who has responsibilities related to the financing of the
company or of its product development activities.
5. One member appointed by the governor who serves in a senior management
position at a technology company headquartered in Wisconsin that employs at least
250 employees and engages in corporate research and development.
6. One member appointed by the governor who serves in a senior management
position at a technology company headquartered in Wisconsin that employs fewer
than 50 employees and who has responsibilities related to the financing of the
company or of its product development activities.
7. One member appointed by the president of the University of Wisconsin
System who has experience in collaborations among universities and industries to
conduct innovative, fundamental research in science, engineering, technology, and
other areas of interest to industry.
8. One member appointed by the president of the Wisconsin Association of
Independent Colleges and Universities who has experience in collaborations among
universities and industries to conduct innovative, fundamental research in science,
engineering, technology, and other areas of interest to industry.
9. Two members appointed by the governor who have experience working for
industry cluster partnerships. Under the bill, an industry cluster partnership is
defined as a nonprofit organization whose primary purpose is to assist in developing
and supporting a regional concentration of industry-specific private sector
businesses that share a common interest in fostering research and development,
worker skills training, and market development.
10. One member appointed by the governor who has at least five years of
experience in the investment activities, merger, and acquisition of technology or
manufacturing companies.
Economic development programs supported by the fund
Under the bill, subject to certain additional limitations and requirements set
forth in the bill, WEDC administers the following economic development programs
using interest earnings from the fund:
1. WEDC may award grants 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 award a grant 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 award grants 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 make payments 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 bill further authorizes WEDC to expend interest earnings from the fund
to partially fund any grant that WEDC provides under a program WEDC
administers to support business accelerators in Wisconsin. The bill also authorizes
WEDC to use interest earnings from the fund to partially fund any grant 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 bill authorizes the Investment Board to provide advice and services 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 or services the Investment Board
provides.
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:
AB640,1
1Section
1. 19.42 (10) (t) of the statutes is created to read:
AB640,4,32
19.42
(10) (t) The members of the innovation fund council established under
3s. 238.41.
AB640,2
4Section
2. 19.42 (13) (q) of the statutes is created to read:
AB640,4,65
19.42
(13) (q) The members of the innovation fund council established under
6s. 238.41.
AB640,3
7Section
3. 20.192 (1) (t) of the statutes is created to read:
AB640,4,148
20.192
(1) (t)
Innovation fund and programs; general program operations;
9grants. From interest earnings of the innovation fund, a sum sufficient to provide
10the grants and other payments under ss. 238.42, 238.43, 238.44, and 238.45 and for
11general program operations and administrative expenses related to the innovation
12fund council and the programs administered under subch. III of ch. 238. Not more
13than the following amounts may be expended under this paragraph for general
14program operations and administrative expenses under subch. III of ch. 238:
AB640,4,1515
1. In fiscal year 2019-20, 5 percent of the moneys in the innovation fund.
AB640,4,1616
2. In fiscal year 2020-21, 5 percent of the moneys in the innovation fund.
AB640,4,1717
3. In fiscal year 2021-22, 2 percent of the moneys in the innovation fund.
AB640,4,1918
4. In fiscal year 2022-23 and in each fiscal year thereafter, 0.5 percent of the
19moneys in the innovation fund.
AB640,4
20Section
4. 20.192 (1) (y) of the statutes is created to read:
AB640,4,2421
20.192
(1) (y)
Innovation fund and programs; additional operational or
22administrative expenses. From interest earnings of the innovation fund, a sum
23sufficient equal to any amount authorized under s. 238.48 (2) for general program
24operations and administrative expenses.
AB640,5
25Section
5. 20.536 (1) (k) of the statutes is amended to read:
AB640,5,4
120.536
(1) (k)
General program operations. All moneys received from
2assessments made under s. 25.187 (2) and from charges made under s. 25.17 (9)
, and
3from assessments or charges made under s. 25.17 (73), for the purpose of conducting
4general program operations.
AB640,6
5Section
6. 25.14 (1) (a) (intro.) of the statutes is amended to read:
AB640,5,106
25.14
(1) (a) (intro.) There is created a state investment fund under the
7jurisdiction and management of the board to be operated as an investment trust for
8the purpose of managing the securities of all funds that are required by law to be
9invested in the state investment fund
, the innovation fund, and all of the state's
10funds specified in s. 25.17 (1), except all of the following:
AB640,7
11Section
7. 25.17 (73) of the statutes is created to read:
AB640,5,2512
25.17
(73) Have authority to provide advice and services requested by a state
13agency, as defined in s. 20.001 (1), or authority, as defined in s. 16.417 (1) (b), or
14business entity owned or controlled by a state agency or authority, relating to
15managing or administering money and property controlled by the agency, authority,
16or business entity for any purpose, including economic development in this state.
17The scope of any advice or services provided to a state agency, authority, or business
18entity under this subsection shall be defined by agreement between the board and
19the agency, authority, or business entity. This agreement shall require the cost of any
20advice or services provided by the board to be paid by the agency, authority, or
21business entity and the agreement may authorize the board to make assessments
22against the money and property controlled by the agency, authority, or business
23entity or to charge the agency, authority, or business entity for the cost of any advice
24or services provided. All moneys received by the board under this subsection shall
25be credited to the appropriation account under s. 20.536 (1) (k).
AB640,8
1Section
8. 25.90 of the statutes is created to read:
AB640,6,6
225.90 Innovation fund. There is established a separate nonlapsible trust
3fund designated as the innovation fund. The fund shall consist of all moneys
4deposited in the fund under s. 73.17, together with all donations, gifts, or bequests
5made to the fund, all moneys transferred to the fund from other funds, and all income
6or interest earned by the fund.
AB640,9
7Section
9. 73.17 of the statutes is created to read: