Amendment ASA1-AB531

AB531-ASA1,16,8 560.31 (2) (b) The At the time of application and on the date on which the person is certified, the person has a net worth, at the time of application, of at least $500,000 and has at least $500,000 in cash, cash equivalents , and marketable securities.

AB531-ASA1, s. 32 Section 32. 560.31 (2) (g) of the statutes is created to read:

AB531-ASA1,16,12 560.31 (2) (g) The person agrees to maintain in this state an investment office and staff actively engaged in making investments until all investment pools have been decertified.

AB531-ASA1, s. 33 Section 33. 560.31 (2) (h) of the statutes is created to read:

AB531-ASA1,16,21 560.31 (2) (h) The person has provided the department with a list of all persons that have an ownership interest in the person as provided under this paragraph. The list shall include the percentage ownership interest of each owner and indicate whether the interest is voting or nonvoting. If the person is an entity that is registered under 15 USC 78l (g) or required to file reports under 15 USC 78o (d), the person shall list only those persons having beneficial ownership of equity securities of at least 5 percent. If a list contains the name of a business entity, the person shall also include a list of all persons that have an ownership interest in the entity.

AB531-ASA1, s. 34 Section 34. 560.31 (2) (i) of the statutes is created to read:

AB531-ASA1,16,24 560.31 (2) (i) The person has provided the department with a business plan covering at least the 5-year period following the date of application.

AB531-ASA1, s. 35 Section 35. 560.31 (2) (j) of the statutes is created to read:

AB531-ASA1,17,3 560.31 (2) (j) The person has provided the department with the person's investment strategy, along with a description of the investment criteria the person intends to follow.

AB531-ASA1, s. 36 Section 36. 560.31 (2) (k) of the statutes is created to read:

AB531-ASA1,17,6 560.31 (2) (k) The person has provided the department with the person's organizational chart.

AB531-ASA1, s. 37 Section 37. 560.32 (2) (b) of the statutes is renumbered 560.32 (2) (b) 1. and amended to read:

AB531-ASA1,17,12 560.32 (2) (b) 1. The Prior to the effective date of this subdivision .... [revisor inserts date], the department may certify an investment under this subsection only if, after the certification, the department will not have certified a total of more than $50,000,000 in investments under this subsection.

AB531-ASA1, s. 38 Section 38. 560.32 (2) (b) 2. of the statutes is created to read:

AB531-ASA1,17,19 560.32 (2) (b) 2. Beginning on the effective date of this subdivision .... [revisor inserts date], the department shall certify investments for which notices have been received under par. (a), subject to the limit specified in this subdivision. The department may certify an investment under this subdivision only if, after the certification, the department will not have certified a total of more than $75,000,000 in investments under this subdivision.

AB531-ASA1, s. 39 Section 39. 560.32 (2) (c) of the statutes is renumbered 560.32 (2) (c) 1.

AB531-ASA1, s. 40 Section 40. 560.32 (2) (c) 2. of the statutes is created to read:

AB531-ASA1,18,2 560.32 (2) (c) 2. The department may not certify an investment under par. (b) 2. if, after the certification, the investor, together with all affiliates of the investor, would have in certified capital investments under par. (b) 2. more than the greater of $10,000,000 or 15 percent of the total amount of investments that the department may certify under par. (b) 2.

AB531-ASA1, s. 41 Section 41. 560.32 (2) (d) of the statutes is amended to read:

AB531-ASA1,18,22 560.32 (2) (d) If, as a result of the limitations under par. (b) or (c), the department may not certify the full amount requested in applications for certified capital investments submitted under par. (a), the department shall allocate prorate the amounts available for certification in order of priority based on the date on which the application was filed. If the amounts available for certification are insufficient to certify the full amount of all applications for certified capital investments that are submitted on the same day, the department shall prorate the available amount on the basis of the amount that the investor has committed to invest in the certified capital company under par. (a) among eligible applicants, except as otherwise provided in this paragraph. If the proration would result in a certified capital company having less than $10,000,000 in certified capital, the department may not allocate any amount to that certified capital company. If the proration would result in no certified capital company having $10,000,000 or more in certified capital, the department may promulgate rules to implement an alternative allocation procedure. Notwithstanding s. 227.24 (1) (a), (2) (b), and (3), the department is not required to provide evidence that promulgating a rule under this paragraph as an emergency rule is necessary for the preservation of the public peace, health, safety, or welfare and is not required to provide a finding of an emergency for a rule promulgated under this paragraph.

AB531-ASA1, s. 42 Section 42. 560.32 (3) of the statutes is renumbered 560.32 (3) (a) and amended to read:

AB531-ASA1,19,8 560.32 (3) (a) A certified investor may not, individually, or with or through one or more affiliates, own 10% or more of the equity securities in, be an affiliate, a general partner, or a manager of, or otherwise control the investments of the certified capital company. This subsection paragraph does not preclude a certified investor any person from exercising its legal rights and remedies, including interim management of a certified capital company, in the event that a certified capital company is in default of its statutory or contractual obligations to the certified investor that or any other person.

AB531-ASA1, s. 43 Section 43. 560.32 (3) (b) of the statutes is created to read:

AB531-ASA1,19,12 560.32 (3) (b) Paragraph (a) does not preclude any person from establishing controls to ensure that a certified capital company satisfies the requirements of s. 560.34 (1m).

AB531-ASA1, s. 44 Section 44. 560.33 (1) (intro.) of the statutes is amended to read:

AB531-ASA1,19,17 560.33 (1) Qualifications. (intro.) A Except as provided in sub. (2), a business is a qualified business if all of the following requirements are met, as of the time that a certified capital company, or any affiliate of the certified capital company, makes its first investment in the business, all of the following requirements are met:

AB531-ASA1, s. 45 Section 45. 560.33 (1) (a) of the statutes is amended to read:

AB531-ASA1,19,23 560.33 (1) (a) The business is headquartered in this state and its principal business operations are located in this state or the business commits to relocate its headquarters and its principal business operations to this state within 90 days after the date on which the certified capital company makes its first investment in the business.

AB531-ASA1, s. 46 Section 46. 560.33 (1) (b) of the statutes is renumbered 560.33 (1) (b) (intro.) and amended to read:

AB531-ASA1,20,2 560.33 (1) (b) (intro.) The business has no more than 100 employees, at and any of the following applies:

AB531-ASA1,20,3 1. At least 75% of whom those employees are employed in this state.

AB531-ASA1, s. 47 Section 47. 560.33 (1) (b) 2. of the statutes is created to read:

AB531-ASA1,20,6 560.33 (1) (b) 2. At least 75 percent of the total payroll of the business is paid to employees who are employed in this state.

AB531-ASA1, s. 48 Section 48. 560.33 (1) (e) of the statutes is amended to read:

AB531-ASA1,20,9 560.33 (1) (e) The business is not predominantly engaged in professional services provided by accountants, business consultants, lawyers, or physicians.

AB531-ASA1, s. 49 Section 49. 560.33 (1) (g) of the statutes is amended to read:

AB531-ASA1,20,13 560.33 (1) (g) The business is not engaged in banking or, lending, lobbying, or political consulting and does not make any loans to, or investments in, certified capital companies.

AB531-ASA1, s. 50 Section 50. 560.33 (1) (h) of the statutes is created to read:

AB531-ASA1,20,16 560.33 (1) (h) The business is not predominantly engaged in retail sales, unless the business is approved by the department under sub. (2).

AB531-ASA1, s. 51 Section 51. 560.33 (1) (i) of the statutes is created to read:

AB531-ASA1,20,21 560.33 (1) (i) The business was not organized by a certified capital company or an affiliate of a certified capital company. This paragraph does not prohibit a certified capital company from providing financial, technical, or similar advice to a business before making an investment in the business.

AB531-ASA1, s. 52 Section 52. 560.33 (1) (j) of the statutes is created to read:

AB531-ASA1,20,23 560.33 (1) (j) The business is engaged in at least one of the following activities:

AB531-ASA1,20,24 1. Manufacturing, processing, or assembling products.

AB531-ASA1,21,2 2. Providing services, unless the services are of such a nature that the department disapproves of the business under sub. (2).

AB531-ASA1,21,3 3. Conducting research and development.

AB531-ASA1,21,5 4. Conducting any other business that is not excluded under this subsection and that is approved by the department under sub. (2).

AB531-ASA1, s. 53 Section 53. 560.33 (1) (k) of the statutes is created to read:

AB531-ASA1,21,13 560.33 (1) (k) The business does not have a financial relationship with a certified capital company or any affiliate of a certified capital company before the date on which the certified capital company makes its first investment in the business, unless the business is approved under sub. (2) notwithstanding such a financial relationship. This paragraph does not prohibit a certified capital company from providing financial advice to a business before making an investment in the business.

AB531-ASA1, s. 54 Section 54. 560.33 (2) of the statutes is renumbered 560.33 (2) (a) and amended to read:

AB531-ASA1,22,6 560.33 (2) (a) A certified capital company may shall, prior to making an investment in a specific business, request a written opinion from the department that a business in which it proposes to invest is a qualified business. If the department determines that the business meets the requirements under sub. (1), the department shall issue a written opinion stating that the business is a qualified business provide the department with a description of the proposed investment in the form prescribed by the department. Within 15 business days of receiving the description, the department shall determine whether the business is a qualified business and the proposed investment is consistent with the certified capital company's investment criteria and, if the business is not a qualified business or the proposed investment is not consistent, notify the certified capital company in writing of the determination and the reasons for the determination. If the department fails to so notify the certified capital company within 15 business days of receiving the request, the business shall be deemed a qualified business and the investment shall be deemed consistent, notwithstanding any failure to satisfy sub. (1) or s. 560.34 (1) (f).

AB531-ASA1, s. 55 Section 55. 560.33 (2) (b) and (c) of the statutes are created to read:

AB531-ASA1,22,11 560.33 (2) (b) During the 15 business day period established under par. (a), the department may make a determination that a business is a qualified business, notwithstanding any failure to satisfy sub. (1), if the certified capital company's proposed investment in the business will further the goals of this subchapter.

AB531-ASA1,22,17 (c) If the department determines that a proposed investment is not consistent with a certified capital company's investment criteria, the certified capital company may, within 10 days after the department's decision, request a contested case hearing under s. 227.42 from the department. If the final administrative or judicial proceeding results in a determination that the investment is consistent, the department shall issue a redetermination accordingly.

AB531-ASA1, s. 56 Section 56. 560.34 (1) (intro.) of the statutes is amended to read:

AB531-ASA1,22,24 560.34 (1) Qualified investments requirements. (intro.) In order for a certified capital company to prevent disqualification under s. 560.37 of an investment pool, the certified capital company shall ensure that the investment pool makes qualified investments in accordance with the schedule under sub. (1m). An Except as provided in sub. (1g), an investment is a qualified investment if the investment meets all of the following requirements:

AB531-ASA1, s. 57 Section 57. 560.34 (1) (a) 1. of the statutes is amended to read:

AB531-ASA1,23,7 560.34 (1) (a) 1. An equity security Except as otherwise provided in this subdivision, equity securities or options, warrants, or other equity participation instruments of the qualified business, unless the certified capital company, after the investment and assuming full conversion and exercise of any equity participation instrument, owns more than 50 percent of the voting equity of the qualified business. The department may grant an exception to this percentage limitation under s. 560.33 (2).

AB531-ASA1, s. 58 Section 58. 560.34 (1) (a) 2. a. of the statutes is amended to read:

AB531-ASA1,23,11 560.34 (1) (a) 2. a. The debt is unsecured not secured by a first priority lien on any of the assets of the qualified business at the time of the certified capital company's qualified investment in the qualified business.

AB531-ASA1, s. 59 Section 59. 560.34 (1) (a) 2. b. of the statutes is amended to read:

AB531-ASA1,23,19 560.34 (1) (a) 2. b. The Except as otherwise provided in this subd. 2. b., the debt is convertible into equity securities or options, warrants, or other equity participation instruments such as options or warrants or has attached equity participation rights, unless the debt and the equity participation instruments, if fully converted and exercised, would result in the certified capital company owning more than 50 percent of the voting equity of the qualified business. The department may grant an exception to this percentage limitation under s. 560.33 (2).

AB531-ASA1, s. 60 Section 60. 560.34 (1) (b) of the statutes is amended to read:

AB531-ASA1,23,23 560.34 (1) (b) As a condition of the investment, the qualified business agrees not to use the proceeds from the investment for the purpose of relocating its operations other than to this state.

AB531-ASA1, s. 61 Section 61. 560.34 (1) (c) of the statutes is amended to read:

AB531-ASA1,24,3 560.34 (1) (c) As a condition of the investment, the qualified business agrees, as long as the certified capital corporation company continues to hold the investment, not to relocate its headquarters out of this state.

AB531-ASA1, s. 62 Section 62. 560.34 (1) (d) of the statutes is renumbered 560.34 (1) (d) (intro.) and amended to read:

AB531-ASA1,24,8 560.34 (1) (d) (intro.) As a condition of the investment, the qualified business agrees, as long as the certified capital corporation company continues to hold the investment, to maintain do any of the following:

AB531-ASA1,24,9 1. Maintain at least 75% of its employees in this state.

AB531-ASA1, s. 63 Section 63. 560.34 (1) (d) 2. of the statutes is created to read:

AB531-ASA1,24,12 560.34 (1) (d) 2. Pay at least 75 percent of its total payroll to employees who are employed in this state.

AB531-ASA1, s. 64 Section 64. 560.34 (1) (e) of the statutes is amended to read:

AB531-ASA1,24,23 560.34 (1) (e) As a condition of the investment, the qualified business agrees, as long as the certified capital corporation company continues to hold the investment, to maintain at least 75% of its employees at work sites that were maintained by the qualified business at the time that the investment was made or at work sites that are no more than 25 miles from the place where the headquarters or principal business operations of the qualified business are located at the time of the investment, unless the qualified business obtains an exemption from the department under this paragraph. The department may grant an exemption unless it determines that the qualified business is locating the employees at new sites to take advantage of lower wage rates in the areas where the new sites are located.

AB531-ASA1, s. 65 Section 65. 560.34 (1) (f) of the statutes is created to read:

AB531-ASA1,25,2 560.34 (1) (f) The investment is consistent with the certified capital company's investment criteria.

AB531-ASA1, s. 66 Section 66. 560.34 (1e) of the statutes is created to read:

AB531-ASA1,25,8 560.34 (1e) Use of certified investments for particular purposes. (a) Except as provided in pars. (b) and (c), a certified capital company may expend moneys in an investment pool to purchase, for the benefit of its certified investors, U.S. treasury securities, other investment-grade securities, a guaranty, indemnity, bond, insurance policy, or other payment undertaking, or any combination thereof.

AB531-ASA1,25,11 (b) No more than one of the certified investors of the certified capital company, or affiliate of such a certified investor, may provide a guaranty, indemnity, bond, insurance policy, or other payment undertaking under par. (a).

AB531-ASA1,25,14 (c) With respect to a certified capital company that receives certified capital investments under s. 560.32 (2) (b) 2., no more than 25 percent of any particular investment pool may be expended under par. (a).

AB531-ASA1, s. 67 Section 67. 560.34 (1g) of the statutes is created to read:

AB531-ASA1,25,18 560.34 (1g) Discretionary exemptions. The department may grant an exemption from any requirement under sub. (1) if the certified capital company is in substantial compliance with the requirement.

AB531-ASA1, s. 68 Section 68. 560.34 (1m) (a) 2. of the statutes is renumbered 560.34 (1m) (a) 2. a. and amended to read:

AB531-ASA1,25,24 560.34 (1m) (a) 2. a. Within With respect to a certified capital company that receives certified capital investments under s. 560.32 (2) (b) 1., within 5 years after the investment date for a particular investment pool, at least 50% 50 percent of the investment pool shall be placed in qualified investments.

AB531-ASA1, s. 69 Section 69. 560.34 (1m) (a) 2. b. of the statutes is created to read:

AB531-ASA1,26,5 560.34 (1m) (a) 2. b. With respect to a certified capital company that receives certified capital investments under s. 560.32 (2) (b) 2., within 5 years after the investment date for a particular investment pool, at least 50 percent of the investment pool shall be placed in qualified investments and, of such 50 percent, at least 50 percent shall be placed in qualified investments in early stage businesses.

AB531-ASA1, s. 70 Section 70. 560.34 (1m) (b) of the statutes is amended to read:

AB531-ASA1,26,20 560.34 (1m) (b) The proceeds of all capital of a qualified investment returned to a certified capital company by a qualified business may be placed in new qualified investments, which shall count toward the percentage requirements under par. (a) and s. 560.36 (3) (1) (c). The department shall promulgate rules governing the extent to which a reinvestment of proceeds from the sale of a qualified investment in a qualified business may be counted toward the percentage requirements under par. (a) and ss. 560.36 (3) (1) (c) and 560.37 (3m) (a) 2. These rules may provide that reinvested proceeds from the sale of short-term investments shall be only partially counted toward the percentage requirements under par. (a) and ss. 560.36 (3) (1) (c) and 560.37 (3m) (a) 2. The rules may also provide that proceeds from the sale of an investment in a qualified business that are reinvested in that qualified business, or an affiliate of that qualified business, shall be only partially counted toward the percentage requirements under par. (a) and ss. 560.36 (3) (1) (c) and 560.37 (3m) (a) 2.

AB531-ASA1, s. 71 Section 71. 560.34 (2) of the statutes is renumbered 560.34 (2) (intro.) and amended to read:

AB531-ASA1,27,3 560.34 (2) (intro.) Nonqualified investments. All certified capital investments in a certified capital company that are not invested in qualified investments may be held or invested by the certified capital company as it considers appropriate, except that a certified capital company may not invest certified capital investments in an insurance company or in an affiliate of an insurance company. only in any of the following: