2023 WISCONSIN ACT 98
An Act to repeal 16.295 (4) (a) 2. and 16.295 (6) (b); to consolidate, renumber and amend 16.295 (4) (a) (intro.) and 1.; to amend 16.295 (5) (c) 3., 16.295 (5) (d) 1., 16.295 (5) (d) 4., 16.295 (6) (a), 16.295 (7) (a) 2., 16.295 (7) (a) 3. (intro.), 16.295 (7) (a) 3. b., 16.295 (7) (a) 3. d., 16.295 (7) (a) 4. (intro.), 16.295 (7) (a) 4. f., 16.295 (7) (c) 1., 16.295 (7) (c) 2., 16.295 (7) (c) 3. and 16.295 (8) (intro.);
to repeal and recreate 16.295 (6) (c); and to create 16.295 (6) (d) of the statutes;
relating to: fund of funds investment program.
The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:
98,1
Section
1. 16.295 (4) (a) (intro.) and 1. of the statutes, as affected by 2023 Wisconsin Act 19, are consolidated, renumbered 16.295 (4) (a) and amended to read:
16.295 (4) (a) Subject to sub. (3), the department shall contract with the investment manager. The contract shall establish the investment manager's compensation, including any management fee. Any management fee may not exceed the following: 1. Annually, for no more than 4 years, on an annual basis, 1 percent of the total moneys designated under sub. (5) (b) 1. and 4., raised under sub. (5) (b) 3., and reinvested under sub. (6) (c).
98,2
Section
2. 16.295 (4) (a) 2. of the statutes, as created by 2023 Wisconsin Act 19, is repealed.
98,3
Section
3. 16.295 (5) (c) 3. of the statutes, as created by 2023 Wisconsin Act 19, is amended to read:
16.295 (5) (c) 3. Of the moneys designated under par. (b) 4., the investment manager shall commit all of those moneys to at least 4 investments in venture capital funds headquartered in this state within 24 months after the date the investment manager receives the moneys.
98,4
Section 4
. 16.295 (5) (d) 1. of the statutes, as affected by 2023 Wisconsin Act 19, is amended to read:
16.295 (5) (d) 1. Make new investments in an amount equal to the moneys it receives under par. (b) in one or more businesses that are headquartered in this state and employ at least 50 percent of their full-time employees, including any subsidiary or other affiliated entity, in this state, and invest at least one-half of those moneys in one or more businesses that employ fewer than 150 full-time employees, including any subsidiary or other affiliated entity, when the venture capital fund first invests moneys in the business under this section. The venture capital fund's contract with a business in which the venture capital fund makes an investment under this subdivision shall require that, if within 3 years after the venture capital fund makes that its initial investment, the business relocates its headquarters outside of this state or fails to employ at least 50 percent of its full-time employees, including any subsidiary or other affiliated entity, in this state, the business shall promptly pay to the venture capital fund an amount equal to the total amount of moneys designated under par. (b) 1. and 4. that the venture capital fund invested in the business. The venture capital fund shall reinvest those moneys in one or more businesses that are eligible to receive an investment under this subdivision, subject to the requirements of this section.
98,5
Section 5
. 16.295 (5) (d) 4. of the statutes is amended to read:
16.295 (5) (d) 4. At least match Ensure that any moneys it receives under par. (b) and invests in a business is accompanied with an investment in that business of moneys the venture capital fund has raised from sources other than the investment manager. The investment manager venture capital fund shall ensure that, on average, for every $1 a venture capital fund receives under par. (b) and invests in a business, the venture capital fund invests $2 in that business from sources other than the investment manager when measured across all individual businesses receiving moneys under this paragraph, the venture capital fund at least matches any moneys it receives under par. (b) with investments in such businesses the venture capital fund has raised from sources other than the investment manager.
98,6
Section 6
. 16.295 (6) (a) of the statutes is amended to read:
16.295 (6) (a) The investment manager shall hold in an escrow account at a bank with its headquarters in this state its gross proceeds from all investments of the moneys designated under sub. (5) (b) 1. and 4. until the investment manager satisfies allocates the proceeds as provided in par. (b) (c).
98,7
Section 7
. 16.295 (6) (b) of the statutes is repealed.
98,8
Section 8
. 16.295 (6) (c) of the statutes is repealed and recreated to read:
16.295 (6) (c) Within 24 months after receiving any proceeds from the investment of the moneys designated under sub. (5) (b) 1. and 4., the investment manager shall commit 90 percent of the gross proceeds to investments in venture capital funds headquartered in this state.
98,9
Section 9
. 16.295 (6) (d) of the statutes is created to read:
16.295 (6) (d) 1. The investment manager shall ensure that the gross proceeds resulting from investments made with moneys designated under sub. (5) (b) 1. and 4. are reinvested so that when averaged across all venture capital fund recipients, for every $1 of moneys reinvested as set forth in par. (c), venture capital fund recipients must receive $2 from sources other than the investment manager. Any individual business that receives an investment made by the investment manager under par. (c) is required to receive additional investments made by sources other than the investment manager.
2. The investment manager shall contract with each venture capital fund that receives moneys under par. (c). Each contract shall require the venture capital fund to:
a. Make new investments in an amount equal to the moneys it receives under par. (c) in one or more businesses that are headquartered in this state and employ at least 50 percent of their full-time employees, including any subsidiary or other affiliated entity, in this state, and invest at least one-half of those moneys in one or more businesses that employ fewer than 150 full-time employees, including any subsidiary or other affiliated entity, when the venture capital fund makes its initial investment of moneys in the business under this section. The venture capital fund's contract with a business in which the venture capital fund makes an investment under this subsection shall require that, if within 3 years after the venture capital fund makes its initial investment, the business relocates its headquarters outside of this state or fails to employ at least 50 percent of its full-time employees, including any subsidiary or other affiliated entity, in this state, the business shall promptly pay to the venture capital fund an amount equal to the total amount of moneys designated under par. (c) that the venture capital fund invested in the business. The venture capital fund shall reinvest those moneys in one or more businesses that are eligible to receive an investment under this subdivision, subject to the requirements of this section.
b. Invest all of the moneys it receives under par. (c) in businesses in the agriculture, information technology, engineered products, advanced manufacturing, medical devices, or medical imaging industry and attempt to ensure that all those moneys are invested in businesses that are diverse with respect to geographic location within this state.
c. Provide to the investment manager the information necessary for the investment manager to complete the annual report under sub. (7) (a) and the quarterly report under sub. (7) (c).
d. Disclose to the investment manager and the department any interest that the venture capital fund or an owner, stockholder, partner, officer, director, member, employee, or agent of the venture capital fund holds in a business in which the venture capital fund invests or intends to invest moneys received under par. (c).
98,10
Section 10
. 16.295 (7) (a) 2. of the statutes is amended to read:
16.295 (7) (a) 2. The investment manager's internal rate of return from investments under sub. subs. (5) (b) and (6) (c).
98,11
Section 11
. 16.295 (7) (a) 3. (intro.) of the statutes is amended to read:
16.295 (7) (a) 3. (intro.) For each venture capital fund that contracts with the investment manager under sub. (5) (d) or (6) (d), all of the following:
98,12
Section 12
. 16.295 (7) (a) 3. b. of the statutes is amended to read:
16.295 (7) (a) 3. b. The amounts invested in the venture capital fund under sub. subs. (5) (b) and (6) (c).
98,13
Section 13
. 16.295 (7) (a) 3. d. of the statutes is amended to read:
16.295 (7) (a) 3. d. The venture capital fund's average internal rate of return on its investments of the moneys it received under sub. (5) (b) or (6) (c).
98,14
Section
14. 16.295 (7) (a) 4. (intro.) of the statutes is amended to read:
16.295 (7) (a) 4. (intro.) For each business in which a venture capital fund held an investment of moneys the venture capital fund received under sub. (5) (b) or (6) (c), all of the following:
98,15
Section 15
. 16.295 (7) (a) 4. f. of the statutes is amended to read:
16.295 (7) (a) 4. f. A statement of the number of employees the business employed when the venture capital fund first invested moneys in the business that the venture capital fund received under sub. (5) (b) or (6) (c), the number of employees the business employed on the first day of the investment manager's fiscal year, and the number of employees the business employed on the last day of the investment manager's fiscal year.
98,16
Section 16
. 16.295 (7) (c) 1. of the statutes is amended to read:
16.295 (7) (c) 1. An identification of each venture capital fund under contract with the investment manager under sub. (5) (d) or (6) (d).
98,17
Section 17
. 16.295 (7) (c) 2. of the statutes, as affected by 2023 Wisconsin Act 19, is amended to read:
16.295 (7) (c) 2. An identification of each business in which a venture capital fund held an investment of moneys the venture capital fund received under sub. (5) (b) or (6) (c) and a statement of the amount of the investment in each business that separately specifies the amount of moneys designated under sub. (5) (b) 1. or 4. that were contributed to the investment.
98,18
Section 18
. 16.295 (7) (c) 3. of the statutes is amended to read:
16.295 (7) (c) 3. A statement of the number of employees the business employed when the venture capital fund first invested moneys in the business that the venture capital fund received under sub. (5) (b) or (6) (c) and the number of employees the business employed at the end of the quarter.
98,19
Section 19
. 16.295 (8) (intro.) of the statutes is amended to read:
16.295 (8) Progress reports. (intro.) In 2015 and, 2018, and 2024, no later than March 1, the department shall submit reports to the joint committee on finance that include all of the following:
