AB705: Bill Text

LRB-3361/3

RJM:cjs:rs

2003 - 2004 LEGISLATURE

2003 Assembly BILL 705

December 19, 2003 - Introduced by Representatives Schooff, Staskunas, J. Lehman, Taylor, Plouff, Shilling, Richards, Albers, Miller, Molepske and Turner, cosponsored by Senators Plale, Lassa, Erpenbach and Wirch. Referred to Committee on Economic Development.

AB705,1,4 An Act to create 20.143 (1) (dk), 20.143 (1) (ik) and 560.275 of the statutes; relating to: creating a technology commercialization grant and loan program, providing an exemption from emergency rule procedures, granting rule-making authority, and making an appropriation.

Analysis by the Legislative Reference Bureau

This bill creates a technology commercialization grant and loan program (program). Significant features of the program include:

Categories of grants and loans

Under the program, the Department of Commerce (department) may provide five types of grants or loans. First, the department may make an early stage planning grant or loan. An early stage planning grant or loan provides funding to assist an applicant in completing a grant application for early stage research and development funding from the federal government or provides funding for professional services that the applicant needs to obtain as a condition of receiving early stage financing from third parties.

Second, the department may provide a matching grant or loan. A matching grant or loan provides funding for professional services related to developing a proposed technologically innovative product, process, or service or provides funding for professional services related to the accelerated commercialization of a technologically innovative product. Depending upon the type of funding sought, an applicant is eligible for a matching grant or loan only if the applicant has received a grant from the federal government for a substantially similar purpose or only if the applicant has received notice that such a grant has been awarded.

Third, the department may make a bridge grant or loan. An applicant is eligible for a bridge grant or loan only if the applicant has received early stage financing from third parties or a grant from the federal government to fund early stage research and development and has sought additional early stage financing from third parties or applied for an additional grant from the federal government to fund early stage research and development. A bridge grant or loan provides funding for professional services necessary to maintain the project research and management team and basic operations until the applicant's additional third party financing request or federal grant application is approved or denied.

Fourth, the department may make a venture capital grant or loan to enhance the applicant's ability to obtain early stage financing from third parties.

Finally, the department may make grants to entrepreneurial and technology transfer centers that satisfy specified criteria.

Grant and loan amounts

The bill specifies certain criteria the department must consider when determining the amount of an early stage planning grant or loan or a matching grant or loan. In determining the amount of an early stage planning grant or loan, the department must consider the amount of economic impact the applicant, if successful, will have in this state; the quality of any businesses assisting the applicant; the level of need demonstrated by the applicant; and the applicant's record of obtaining early stage financing in the past. In determining the amount of a matching grant or loan, the department must consider the viability of the applicant's business; the likelihood that the applicant will successfully commercialize technology; the applicant's management plan and management team; the amount of economic impact the applicant, if successful, will have in this state; and the applicant's record of obtaining early stage financing in the past.

The bill limits the amount of particular grants and loans as follows: - See PDF for table

In addition, the bill limits the total amount of grants to entrepreneurial and technology transfer centers at $500,000 annually.

Eligibility

Generally, the department may make a grant or loan to a small business, or individual entrepreneur who intends to form a small business, that is completing a grant application to be submitted to the federal government for the purpose of obtaining early stage research and development funding. The department may also make a grant or loan to an individual who is starting or developing a business which has significant growth potential, as evidenced by the potential to attract and receive early stage financing from third parties, but who needs assistance with a specific facet of starting or developing the business. In addition, the department may make a grant or loan only to an applicant that has or will have a business location in this state; that will manufacture a product substantially in this state (if the application relates to a product); that will maintain a principal place of business in this state (if the application relates to a service); and that will ensure all grant moneys will be spent in this state. Furthermore, if the applicant seeks an early stage planning grant or loan, the applicant must have funding from sources other than the state to finance at least 25% of the project costs.

These requirements do not apply to grants made to entrepreneurial and technology transfer centers.

Appropriations

This bill provides $5,300,000 in GPR annually to fund grants and loans under the program. The bill also provides $100,000 in the 2003-04 fiscal year and $200,000 in the 2004-05 fiscal year to increase the authorized positions to the department by 2.0 FTE positions and to fund the department's activities to promote the program.

Administration

The bill requires the department to develop a biennial plan for awarding grants and loans under the program and to submit the plan to the governor and to the chief clerk of each house of the legislature, for distribution to the appropriate standing committees. The bill permits the department to contract with, and pay the proceeds of any grant under the program (other than a grant to an entrepreneurial and technology transfer center) directly to, any person who provides services which the grant is intended to fund. In addition, the bill requires the department to promulgate rules, including rules establishing application, reporting, auditing, and monitoring requirements.

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:

AB705, s. 1 Section 1. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert the following amounts for the purposes indicated: - See PDF for table

AB705, s. 2 Section 2. 20.143 (1) (dk) of the statutes is created to read:

AB705,4,4 20.143 (1) (dk) Technology commercialization grant and loan program; assistance. Biennially, the amounts in the schedule for grants and loans under s. 560.275 (2).

AB705, s. 3 Section 3. 20.143 (1) (ik) of the statutes is created to read:

AB705,4,8 20.143 (1) (ik) Technology commercialization grant and loan program; repayments. All moneys received in repayment of grants and loans made under s. 560.275 (2), to be used for grants and loans under s. 560.275 (2).

AB705, s. 4 Section 4. 560.275 of the statutes is created to read:

AB705,4,13 560.275 Technology commercialization grant and loan program. (1) Definition. In this section, "Project costs" means the total cost of a project financed, at least in part, by a grant or loan under sub. (2), calculated as provided by rule of the department.

AB705,5,3 (2) Authorized grants and loans. (a) Early stage planning grants and loans. The department may make a grant or loan from the appropriation under s. 20.143 (1) (dk) or (ik) for the purpose of funding professional services related to completing an application to be submitted to the federal government for the purpose of obtaining early stage research and development funding or for the purpose of funding professional services that are required to accomplish specific tasks established as a condition of receiving early stage financing from 3rd parties that is necessary for business development.

AB705,5,8 (b) Matching grants and loans. 1. The department may make a grant or loan from the appropriation under s. 20.143 (1) (dk) or (ik) for the purpose of funding professional services related to developing a proposed technologically innovative product, process, or service, if the applicant has received a grant from the federal government for a substantially similar purpose.

AB705,5,13 2. The department may make a grant or loan from the appropriation under s. 20.143 (1) (dk) or (ik) for the purpose of funding professional services related to the accelerated commercialization of a technologically innovative product, process, or service, if the federal government has notified the applicant that the applicant will receive a grant from the federal government for a substantially similar purpose.

AB705,5,23 (c) Bridge grants and loans. The department may make a grant or loan from the appropriation under s. 20.143 (1) (dk) or (ik) to a person who has received early stage financing from 3rd parties or a grant from the federal government to fund early stage research and development and who has sought additional early stage financing from 3rd parties or applied for an additional grant from the federal government to fund early stage research and development. A grant or loan under this paragraph shall be for the purpose of funding professional services necessary to maintain the project research and management team and funding basic operations until the applicant's additional 3rd party financing request or federal grant application is approved or denied.

AB705,6,3 (d) Venture capital grants and loans. The department may make a grant or loan from the appropriation under s. 20.143 (1) (dk) or (ik) for the purpose of enhancing the applicant's ability to obtain early stage financing from 3rd parties.

AB705,6,7 (e) Entrepreneurial and technology transfer center grants. The department may make a grant from the appropriation under s. 20.143 (1) (dk) or (ik) for the purpose of supporting any entrepreneurial and technology transfer center that satisfies all of the following criteria:

AB705,6,8 1. The center serves multiple regions of this state.

AB705,6,10 2. The center provides assistance, other than financial assistance, to entrepreneurs to facilitate business development.

AB705,6,12 3. The center reviews and analyzes entrepreneurial business plans and offers advice concerning the improvement of the plans.

AB705,6,14 4. The center provides advice to entrepreneurs concerning patent, trademark, and copyright issues.

AB705,6,15 5. The center provides appropriate referral services to entrepreneurs.

AB705,6,19 (3) Grant and loan amounts. (a) Early stage planning grants and loans. In determining the amount of a grant or loan under sub. (2) (a), the department shall consider all of the following, in addition to any other information the department considers relevant:

AB705,6,21 1. The amount of economic impact the applicant, if successful, will have in this state.

AB705,6,22 2. The quality of any businesses assisting the applicant.

AB705,6,23 3. The level of need demonstrated by the applicant.