SB261-ASA1,2,1413 71.07 (5b) Early stage seed investment credit. (a) Definitions. In this
14subsection:
SB261-ASA1,2,1515 1. "Claimant" means a person who files a claim under this subsection.
SB261-ASA1,2,1716 2. "Fund manager"means an investment fund manager certified under s.
17560.205 (2).
SB261-ASA1,2,2318 (b) Filing claims. For taxable years beginning after December 31, 2004, subject
19to the limitations provided under this subsection and s. 560.205, a claimant may
20claim as a credit against the tax imposed under ss. 71.02 and 71.08, up to the amount
21of those taxes, 25 percent of the claimant's initial investment paid in the taxable year
22to a fund manager that the fund manager invests in a business certified under s.
23560.205 (1).
SB261-ASA1,3,3
1(c) Limitations. 1. The maximum amount of the credits that may be claimed
2under this subsection and ss. 71.28 (5b) and 71.47 (5b) for all taxable years combined
3is $35,000,000.
SB261-ASA1,3,124 2. Partnerships, limited liability companies, and tax-option corporations may
5not claim the credit under this subsection, but the eligibility for, and the amount of,
6the credit are based on their payment of amounts under par. (b). A partnership,
7limited liability company, or tax-option corporation shall compute the amount of
8credit that each of its partners, members, or shareholders may claim and shall
9provide that information to each of them. Partners, members of limited liability
10companies, and shareholders of tax-option corporations may claim the credit in
11proportion to their ownership interest or as specially allocated in their
12organizational documents.
SB261-ASA1,3,1413 (d) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
14s. 71.28 (4), applies to the credit under this subsection.
SB261-ASA1, s. 5 15Section 5. 71.07 (5d) of the statutes is created to read:
SB261-ASA1,3,1616 71.07 (5d) Angel investment credit. (a) Definitions. In this subsection:
SB261-ASA1,3,1917 1. "Bona fide angel investment" means a purchase of an equity interest, or any
18other expenditure, as determined by rule under s. 560.205, that is made by any of the
19following:
SB261-ASA1,3,2120 a. An individual who reviews new businesses or proposed new businesses for
21potential investment of the individual's money.
SB261-ASA1,3,2222 b. A network of individuals who satisfy subd. 1.
SB261-ASA1,3,2323 2. "Claimant" means an individual who files a claim under this subsection.
SB261-ASA1,3,2524 3. "Qualified new business venture" means a business that is certified under
25s. 560.205 (1).
SB261-ASA1,4,6
1(b) Filing claims. Subject to the limitations provided in this subsection and in
2s. 560.205, a claimant may claim as a credit against the tax imposed under s. 71.02
3or 71.08, up to the amount of those taxes, in each taxable year for 2 years, beginning
4with the taxable year in which the claimant's initial investment is made, an amount
5equal to 12.5 percent of the claimant's bona fide angel investment made directly in
6a qualified new business venture in the taxable year.
SB261-ASA1,4,87 (c) Limitations. 1. The maximum amount of the credits that may be claimed
8under this subsection for all taxable years combined is $30,000,000.
SB261-ASA1,4,119 2. The maximum amount of a claimant's investment that may be used as the
10basis for a credit under this subsection is $500,000 for each investment made directly
11in a business certified under s. 560.205 (1).
SB261-ASA1,4,2112 3. For a claimant who is a nonresident or part-year resident of this state and
13who is a single person or a married person filing a separate return, multiply the
14credit for which the claimant is eligible under par. (b) by a fraction, the numerator
15of which is the individual's Wisconsin adjusted gross income and the denominator of
16which is the individual's federal adjusted gross income. If a claimant is married and
17files a joint return, and if the claimant or the claimant's spouse, or both, are
18nonresidents or part-year residents of this state, multiply the credit for which the
19claimant is eligible under par. (b) by a fraction, the numerator of which is the couple's
20joint Wisconsin adjusted gross income and the denominator of which is the couple's
21joint federal adjusted gross income.
SB261-ASA1,4,2522 (d) Administration. 1. If an investment for which a claimant claims a credit
23under par. (b) is held by the claimant for less than one year, the claimant shall pay
24to the department, in the manner prescribed by the department, the amount of the
25credit that the claimant received related to the investment.
SB261-ASA1,5,2
12. Section 71.28 (4) (e) to (h), as it applies to the credit under s. 71.28 (4), applies
2to the credit under this subsection.
SB261-ASA1,5,43 3. Subsection (9e) (d), to the extent that it applies to the credit under that
4subsection, applies to the credit under this subsection.
SB261-ASA1, s. 6 5Section 6. 71.08 (1) (intro.) of the statutes, as affected by 2003 Wisconsin Act
699
, is amended to read:
SB261-ASA1,5,157 71.08 (1) Imposition. (intro.) If the tax imposed on a natural person, married
8couple filing jointly, trust or estate under s. 71.02, not considering the credits under
9ss. 71.07 (1), (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx), (2fd), (3m), (3s), (3t),
10(5b), (5d), (6), and (9e), 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1fd), (2m),
11(3), and (3t) and 71.47 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1fd), (2m), (3), and
12(3t) and subchs. VIII and IX and payments to other states under s. 71.07 (7), is less
13than the tax under this section, there is imposed on that natural person, married
14couple filing jointly, trust or estate, instead of the tax under s. 71.02, an alternative
15minimum tax computed as follows:
SB261-ASA1, s. 7 16Section 7. 71.10 (4) (gwb) of the statutes is created to read:
SB261-ASA1,5,1717 71.10 (4) (gwb) Early stage seed investment credit under s. 71.07 (5b).
SB261-ASA1, s. 8 18Section 8. 71.10 (4) (gx) of the statutes is created to read:
SB261-ASA1,5,1919 71.10 (4) (gx) Angel investment credit under s. 71.07 (5d).
SB261-ASA1, s. 9 20Section 9. 71.21 (4) of the statutes, as affected by 2003 Wisconsin Act 99, is
21amended to read:
SB261-ASA1,5,2422 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di),
23(2dj), (2dL), (2dm), (2ds), (2dx), (3g), (3s), and (3t), and (5b) and passed through to
24partners shall be added to the partnership's income.
SB261-ASA1, s. 10
1Section 10. 71.26 (2) (a) of the statutes, as affected by 2003 Wisconsin Act 99,
2is amended to read:
SB261-ASA1,6,203 71.26 (2) (a) Corporations in general. The "net income" of a corporation means
4the gross income as computed under the Internal Revenue Code as modified under
5sub. (3) minus the amount of recapture under s. 71.28 (1di) plus the amount of credit
6computed under s. 71.28 (1), (3), (4), and (5) minus, as provided under s. 71.28 (3) (c)
77., the amount of the credit under s. 71.28 (3) that the taxpayer added to income
8under this paragraph at the time that the taxpayer first claimed the credit plus the
9amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm),
10(1ds), (1dx), (3g), and (3t), and (5b) and not passed through by a partnership, limited
11liability company, or tax-option corporation that has added that amount to the
12partnership's, limited liability company's, or tax-option corporation's income under
13s. 71.21 (4) or 71.34 (1) (g) plus the amount of losses from the sale or other disposition
14of assets the gain from which would be wholly exempt income, as defined in sub. (3)
15(L), if the assets were sold or otherwise disposed of at a gain and minus deductions,
16as computed under the Internal Revenue Code as modified under sub. (3), plus or
17minus, as appropriate, an amount equal to the difference between the federal basis
18and Wisconsin basis of any asset sold, exchanged, abandoned, or otherwise disposed
19of in a taxable transaction during the taxable year, except as provided in par. (b) and
20s. 71.45 (2) and (5).
SB261-ASA1, s. 11 21Section 11. 71.28 (5b) of the statutes is created to read:
SB261-ASA1,6,2322 71.28 (5b) Early stage seed investment credit. (a) Definitions. In this
23subsection:
SB261-ASA1,6,2424 1. "Claimant" means a person who files a claim under this subsection.
SB261-ASA1,7,2
12. "Fund manager" means an investment fund manager certified under s.
2560.205 (2).
SB261-ASA1,7,83 (b) Filing claims. For taxable years beginning after December 31, 2004, subject
4to the limitations provided under this subsection and s. 560.205, a claimant may
5claim as a credit against the tax imposed under s. 71.23, up to the amount of those
6taxes, 25 percent of the claimant's initial investment paid in the taxable year to a
7fund manager that the fund manager invests in a business certified under s. 560.205
8(1).
SB261-ASA1,7,119 (c) Limitations. 1. The maximum amount of the credits that may be claimed
10under this subsection and ss. 71.07 (5b) and 71.47 (5b) for all taxable years combined
11is $35,000,000.
SB261-ASA1,7,2012 2. Partnerships, limited liability companies, and tax-option corporations may
13not claim the credit under this subsection, but the eligibility for, and the amount of,
14the credit are based on their payment of amounts under par. (b). A partnership,
15limited liability company, or tax-option corporation shall compute the amount of
16credit that each of its partners, members, or shareholders may claim and shall
17provide that information to each of them. Partners, members of limited liability
18companies, and shareholders of tax-option corporations may claim the credit in
19proportion to their ownership interest or as specially allocated in their
20organizational documents.
SB261-ASA1,7,2221 (d) Administration. Subsection (4) (e) to (h), as it applies to the credit under
22sub. (4), applies to the credit under this subsection.
SB261-ASA1, s. 12 23Section 12. 71.30 (3) (eop) of the statutes is created to read:
SB261-ASA1,7,2424 71.30 (3) (eop) Early stage seed investment credit under s. 71.28 (5b).
SB261-ASA1, s. 13
1Section 13. 71.34 (1) (g) of the statutes, as affected by 2003 Wisconsin Act 99,
2is amended to read:
SB261-ASA1,8,53 71.34 (1) (g) An addition shall be made for credits computed by a tax-option
4corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (3), (3g),
5and (3t), and (5b) and passed through to shareholders.
SB261-ASA1, s. 14 6Section 14. 71.45 (2) (a) 10. of the statutes, as affected by 2003 Wisconsin Act
799
, is amended to read:
SB261-ASA1,8,138 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit
9computed under s. 71.47 (1dd) to (1dx) and (5b) and not passed through by a
10partnership, limited liability company or tax-option corporation that has added that
11amount to the partnership's, limited liability company's or tax-option corporation's
12income under s. 71.21 (4) or 71.34 (1) (g) and the amount of credit computed under
13s. 71.47 (1), (3), (3t), (4) and (5).
SB261-ASA1, s. 15 14Section 15. 71.47 (5b) of the statutes is created to read:
SB261-ASA1,8,1615 71.47 (5b) Early stage seed investment credit. (a) Definitions. In this
16subsection:
SB261-ASA1,8,1717 1. "Claimant" means a person who files a claim under this subsection.
SB261-ASA1,8,1918 2. "Fund manager" means an investment fund manager certified under s.
19560.205 (2).
SB261-ASA1,8,2520 (b) Filing claims. For taxable years beginning after December 31, 2004, subject
21to the limitations provided under this subsection and s. 560.205, a claimant may
22claim as a credit against the tax imposed under s. 71.43, up to the amount of those
23taxes, 25 percent of the claimant's initial investment paid in the taxable year to a
24fund manager that the fund manager invests in a business certified under s. 560.205
25(1).
SB261-ASA1,9,3
1(c) Limitations. 1. The maximum amount of the credits that may be claimed
2under this subsection and ss. 71.07 (5b) and 71.28 (5b) for all taxable years combined
3is $35,000,000.
SB261-ASA1,9,124 2. Partnerships, limited liability companies, and tax-option corporations may
5not claim the credit under this subsection, but the eligibility for, and the amount of,
6the credit are based on their payment of amounts under par. (b). A partnership,
7limited liability company, or tax-option corporation shall compute the amount of
8credit that each of its partners, members, or shareholders may claim and shall
9provide that information to each of them. Partners, members of limited liability
10companies, and shareholders of tax-option corporations may claim the credit in
11proportion to their ownership interest or as specially allocated in their
12organizational documents.
SB261-ASA1,9,1413 (d) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
14s. 71.28 (4), applies to the credit under this subsection.
SB261-ASA1, s. 16 15Section 16. 71.49 (1) (eop) of the statutes is created to read:
SB261-ASA1,9,1616 71.49 (1) (eop) Early stage seed investment credit under s. 71.47 (5b).
SB261-ASA1, s. 17 17Section 17. 77.92 (4) of the statutes, as affected by 2003 Wisconsin Act 99, is
18amended to read:
SB261-ASA1,9,2519 77.92 (4) "Net business income", with respect to a partnership, means taxable
20income as calculated under section 703 of the Internal Revenue Code; plus the items
21of income and gain under section 702 of the Internal Revenue Code, including taxable
22state and municipal bond interest and excluding nontaxable interest income or
23dividend income from federal government obligations; minus the items of loss and
24deduction under section 702 of the Internal Revenue Code, except items that are not
25deductible under s. 71.21; plus guaranteed payments to partners under section 707

1(c) of the Internal Revenue Code; plus the credits claimed under s. 71.07 (2dd), (2de),
2(2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (3g), (3s), and (3t), and (5b); and plus or
3minus, as appropriate, transitional adjustments, depreciation differences, and basis
4differences under s. 71.05 (13), (15), (16), (17), and (19); but excluding income, gain,
5loss, and deductions from farming. "Net business income", with respect to a natural
6person, estate, or trust, means profit from a trade or business for federal income tax
7purposes and includes net income derived as an employee as defined in section 3121
8(d) (3) of the Internal Revenue Code.
SB261-ASA1, s. 18 9Section 18. 560.03 (25) of the statutes is created to read:
SB261-ASA1,10,1310 560.03 (25) In cooperation with the department of financial institutions and
11the board of regents of the University of Wisconsin System, provide education and
12other support to facilitate the development networks of bona fide angel investors, as
13defined in s. 71.07 (5d) (a) 1.
SB261-ASA1, s. 19 14Section 19. 560.03 (26) of the statutes is created to read:
SB261-ASA1,10,2115 560.03 (26) In cooperation with the department of financial institutions and
16the board of regents of the University of Wisconsin System, annually conduct and
17publish the results of a study of Wisconsin businesses to determine new business
18formation trends and identify obstacles faced by new Wisconsin businesses and areas
19where changes in governmental policy may satisfy the needs of new Wisconsin
20businesses. As part of the study, the department of commerce shall conduct a survey
21of Wisconsin businesses.
SB261-ASA1, s. 20 22Section 20. 560.205 of the statutes is created to read:
SB261-ASA1,11,4 23560.205 Early stage business investment program. (1) Angel
24investment tax credits.
The department shall implement a program to certify
25businesses for purposes of s. 71.07 (5d). A business desiring certification shall

1submit an application to the department in each taxable year for which the business
2desires certification. Unless otherwise provided under the rules of the department,
3a business may be certified under this subsection, and may maintain such
4certification, only if the business satisfies all of the following conditions:
SB261-ASA1,11,55 (a) It has its headquarters in this state.
SB261-ASA1,11,76 (b) At least 51 percent of the employees employed by the business are employed
7in this state.
SB261-ASA1,11,108 (f) It is engaged in, or has committed to engage in, manufacturing, agriculture,
9or processing or assembling products and conducting research and development or
10developing a new product or business process.
SB261-ASA1,11,1411 (g) It is not engaged in real estate development, insurance, banking, lending,
12lobbying, political consulting, professional services provided by attorneys,
13accountants, business consultants, physicians, or health care consultants, wholesale
14or retail trade, leisure, hospitality, transportation, or construction.
SB261-ASA1,11,1515 (h) It has less than 100 employees.
SB261-ASA1,11,1616 (j) It has been in operation in this state for not more than 7 consecutive years.
SB261-ASA1,11,1817 (k) It has not received more than $1,000,000 in investments that have qualified
18for tax credits under s. 71.07 (5d).
SB261-ASA1,12,3 19(2) Early stage seed investment tax credits. The department shall implement
20a program to certify investment fund managers for purposes of ss. 71.07 (5b), 71.28
21(5b), and 71.47 (5b). An investment fund manager desiring certification shall submit
22an application to the department. In determining whether to certify an investment
23fund manager, the department shall consider the investment fund manager's
24experience in managing venture capital funds, the past performance of investment
25funds managed by the applicant, the expected level of investment in the investment

1fund to be managed by the applicant, and any other relevant factors. The
2department may certify only investment fund managers that commit to consider
3placing investments in businesses certified under sub. (1).
SB261-ASA1,12,7 4(3) Administration. (a) List of certified businesses and investment fund
5managers.
The department shall maintain a list of businesses certified under sub.
6(1) and investment fund managers certified under sub. (2) and shall permit public
7access to the lists through the department's Internet website.
SB261-ASA1,12,108 (b) Notification of department of revenue. The department of commerce shall
9notify the department of revenue of every certification issued under sub. (1) and (2)
10and the date on which any such certification is revoked or expires.
SB261-ASA1,12,1311 (c) Annual report. Annually, no later than September 15, the department shall
12submit a report to the chief clerk of each house of the legislature for distribution to
13the legislature under s. 13.172 (2), listing all of the following information:
SB261-ASA1,12,1514 1. The total amount of tax credits claimed under ss. 71.07 (5b) and (5d), 71.28
15(5b), and 71.47 (5b) per taxable year.
SB261-ASA1,12,1816 2. The name of each business in which investments qualifying for such tax
17credits were made, the amount of such tax credits, and the amount of such
18investments.
SB261-ASA1,12,1919 3. Any other information the department considers reasonable to include.
SB261-ASA1,13,720 (d) Rules. The department of commerce, in consultation with the department
21of revenue, shall promulgate rules to administer this section. The rules shall further
22define "bona fide angel investment" for purposes of s. 71.07 (5d) (a) 1. The rules shall
23limit the aggregate amount of tax credits under s. 71.07 (5d) that may be claimed for
24investments in businesses certified under sub. (1) at $3,000,000 per taxable year for
25taxable years beginning after December 31, 2004, and before January 1, 2015. The

1rules shall also limit the aggregate amount of the tax credits under ss. 71.07 (5b),
271.28 (5b), and 71.47 (5b) that may be claimed for investments paid to fund managers
3certified under sub. (2) at $3,500,000 per taxable year for taxable years beginning
4after December 31, 2004, and before January 1, 2015. The rules may not permit the
5department of commerce or the department of revenue to assign a dollar amount of
6investments qualifying for tax credits that a particular business may subsequently
7raise.
SB261-ASA1, s. 21 8Section 21. 560.275 of the statutes is created to read:
SB261-ASA1,13,12 9560.275 Technology commercialization grant and loan program. (1)
10Definition. In this section, "Project costs" means the total cost of a project financed,
11at least in part, by a grant or loan under sub. (2), calculated as provided by rule of
12the department.
SB261-ASA1,13,20 13(2) Authorized grants and loans. (a) Early stage planning grants and loans.
14The department may make a grant or loan from the appropriation under s. 20.143
15(1) (dk) or (ik) for the purpose of funding professional services related to completing
16an application to be submitted to the federal government for the purpose of obtaining
17early stage research and development funding or for the purpose of funding
18professional services that are required to accomplish specific tasks established as a
19condition of receiving early stage financing from 3rd parties that is necessary for
20business development.
SB261-ASA1,13,2521 (b) Matching grants and loans. 1. The department may make a grant or loan
22from the appropriation under s. 20.143 (1) (dk) or (ik) for the purpose of funding
23professional services related to developing a proposed technologically innovative
24product, process, or service, if the applicant has received a grant from the federal
25government for a substantially similar purpose.
SB261-ASA1,14,5
12. The department may make a grant or loan from the appropriation under s.
220.143 (1) (dk) or (ik) for the purpose of funding professional services related to the
3accelerated commercialization of a technologically innovative product, process, or
4service, if the federal government has notified the applicant that the applicant will
5receive a grant from the federal government for a substantially similar purpose.
SB261-ASA1,14,156 (c) Bridge grants and loans. The department may make a grant or loan from
7the appropriation under s. 20.143 (1) (dk) or (ik) to a person who has received early
8stage financing from 3rd parties or a grant from the federal government to fund early
9stage research and development and who has sought additional early stage financing
10from 3rd parties or applied for an additional grant from the federal government to
11fund early stage research and development. A grant or loan under this paragraph
12shall be for the purpose of funding professional services necessary to maintain the
13project research and management team and funding basic operations until the
14applicant's additional 3rd party financing request or federal grant application is
15approved or denied.
SB261-ASA1,14,1816 (d) Venture capital grants and loans. The department may make a grant or loan
17from the appropriation under s. 20.143 (1) (dk) or (ik) for the purpose of enhancing
18the applicant's ability to obtain early stage financing from 3rd parties.
SB261-ASA1,14,2219 (e) Entrepreneurial and technology transfer center grants. The department
20may make a grant from the appropriation under s. 20.143 (1) (dk) or (ik) for the
21purpose of supporting any entrepreneurial and technology transfer center that
22satisfies all of the following criteria:
SB261-ASA1,14,2323 1. The center serves multiple regions of this state.
SB261-ASA1,14,2524 2. The center provides assistance, other than financial assistance, to
25entrepreneurs to facilitate business development.
SB261-ASA1,15,2
13. The center reviews and analyzes entrepreneurial business plans and offers
2advice concerning the improvement of the plans.
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