AB129: Bill Text

AB129,35,25 100.45 (1) (dm) "State agency" means any office, department, agency, institution of higher education, association, society, or other body in state government created or authorized to be created by the constitution or any law which is entitled to expend moneys appropriated by law, including the legislature and the courts, the Wisconsin Housing and Economic Development Authority, the Bradley Center Sports and Entertainment Corporation, the University of Wisconsin Hospitals and Clinics Authority, the Wisconsin Health and Educational Facilities Authority, the Wisconsin Aerospace Authority, the Wisconsin Economic Development Corporation, the Wisconsin Venture Capital Authority, and the Fox River Navigational System Authority.

AB129, s. 64 Section 64. 101.177 (1) (d) of the statutes, as affected by 2011 Wisconsin Act 10, is amended to read:

AB129,36,13 101.177 (1) (d) "State agency" means any office, department, agency, institution of higher education, association, society, or other body in state government created or authorized to be created by the constitution or any law, that is entitled to expend moneys appropriated by law, including the legislature and the courts, the Wisconsin Housing and Economic Development Authority, the Bradley Center Sports and Entertainment Corporation, the University of Wisconsin Hospitals and Clinics Authority, the Wisconsin Aerospace Authority, the Wisconsin Economic Development Corporation, the Wisconsin Venture Capital Authority, and the Wisconsin Health and Educational Facilities Authority, but excluding the Health Insurance Risk-Sharing Plan Authority and the Lower Fox River Remediation Authority.

AB129, s. 65 Section 65. 230.03 (3) of the statutes, as affected by 2011 Wisconsin Act 10, is amended to read:

AB129,36,25 230.03 (3) "Agency" means any board, commission, committee, council, or department in state government or a unit thereof created by the constitution or statutes if such board, commission, committee, council, department, unit, or the head thereof, is authorized to appoint subordinate staff by the constitution or statute, except a legislative or judicial board, commission, committee, council, department, or unit thereof or an authority created under subch. II of ch. 114 or subch. III of ch. 149 or under ch. 231, 232, 233, 234, 235, 237, 238, 239, or 279. "Agency" does not mean any local unit of government or body within one or more local units of government that is created by law or by action of one or more local units of government.

AB129, s. 66 Section 66. Chapter 239 of the statutes is created to read:

AB129,37,4 Chapter 239 WISCONSIN VENTURE CAPITAL AUTHORITY

AB129,37,6 Subchapter I General provisions

AB129,37,7 239.01 Definitions. In this chapter, except as otherwise provided:

AB129,37,8 (1) "Authority" means the Wisconsin Venture Capital Authority.

AB129,37,9 (2) "Board" means the board of directors of the authority.

AB129,37,12 239.02 Creation and organization of authority. (1) There is created a public body corporate and politic to be known as the "Wisconsin Venture Capital Authority." The members of the board shall consist of the following:

AB129,37,14 (a) The chief executive officer of the Wisconsin Economic Development Corporation.

AB129,37,17 (b) Four persons from the private sector, at least 3 of whom shall have venture capital, investment banking, or substantial entrepreneurial experience, nominated by the governor and appointed with the advice and consent of the senate.

AB129,37,19 (c) One member appointed by the speaker of the assembly who shall have venture capital, investment banking, or substantial entrepreneurial experience.

AB129,37,21 (d) One member appointed by the senate majority leader who shall have venture capital, investment banking, or substantial entrepreneurial experience.

AB129,37,23 (2) The members of the board appointed by the governor, the speaker of the assembly, and the senate majority leader shall serve 3-year terms.

AB129,38,2 (3) A majority of the members of the board constitutes a quorum for the purpose of conducting its business and exercising its powers and for all other purposes, notwithstanding the existence of any vacancies. Action may be taken by the board upon a vote of a majority of the members present.

AB129,38,4 (4) A vacancy on the board shall be filled in the same manner as the original appointment to the board for the remainder of the unexpired term, if any.

AB129,38,7 (5) A member of the board may not be compensated for the member's services but shall be reimbursed for actual and necessary expenses, including travel expenses, incurred in the performance of the member's duties.

AB129,38,11 (6) No cause of action may arise against and no civil liability may be imposed upon a member of the board for any act or omission in the performance of the member's powers and duties under this chapter, unless the person asserting liability proves that the act or omission constitutes willful misconduct.

AB129,38,13 (7) Annually, the governor shall appoint one member as chairperson of the board.

AB129,38,18 (8) The board may hire an executive director. The board may delegate to the executive director or any other employee of the authority any powers or duties the board considers proper. All powers and duties assigned to the authority under this chapter shall be exercised or carried out by the board, unless the board delegates the power or duty to an employee of the authority.

AB129,38,22 239.03 Powers of authority. The authority shall have all the powers necessary or convenient to carry out the purposes and provisions of this chapter. In addition to all other powers granted the authority under this chapter, the authority may specifically:

AB129,38,24 (1) Adopt, amend, and repeal any bylaws, policies, and procedures for the regulation of its affairs and the conduct of its business.

AB129,38,25 (2) Have a seal and alter the seal at pleasure.

AB129,39,1 (3) Maintain an office.

AB129,39,2 (4) Sue and be sued.

AB129,39,4 (5) Accept gifts, grants, loans, or other contributions from private or public sources.

AB129,39,6 (6) Establish the annual budget of the authority and monitor its fiscal management.

AB129,39,9 (7) Execute contracts and other instruments required for the operation of the authority, including contracts with the Wisconsin Economic Development Corporation.

AB129,39,11 (8) Employ any officers, agents, and employees that it may require and determine their qualifications, duties, and compensation.

AB129,39,12 (9) Issue notes, bonds, and any other obligations.

AB129,39,13 (10) Make loans and provide grants.

AB129,39,14 (11) Incur debt.

AB129,39,15 (12) Procure liability insurance.

AB129,39,19 239.04 Liability limited. Neither the state nor any political subdivision of the state, nor any officer, employee, or agent of the state or a political subdivision of the state who is acting within the scope of employment or agency, is liable for any debt, obligation, act, or omission of the authority.

AB129,39,23 239.05 Annual report. Annually, the authority shall submit to the chief clerk of each house of the legislature, for distribution to the legislature under s. 13.172 (2), and to the governor, a report on the programs administered by the authority that includes all of the following:

AB129,39,25 (1) General reporting requirements. For each program administered by the authority, the report shall include all of the following:

AB129,40,1 (a) An assessment of the program's success to date.

AB129,40,3 (b) An accounting of the financial status of the program, including the opinion of an independent certified public accountant.

AB129,40,4 (c) Any recommendations the authority has for improvement of the program.

AB129,40,7 (2) Badger jobs fund. In addition to the information provided under sub. (1), the authority's annual report shall include all of the following for the badger jobs fund administered by the authority under subch. II:

AB129,40,8 (a) The current investment policy of the badger jobs fund.

AB129,40,10 (b) The badger jobs fund's internal rate of return from its investments in certified investors.

AB129,40,12 (c) An accounting of the revenue received by the authority under s. 73.033 (1) (b).

AB129,40,14 (d) An accounting of any compensation, including a management fee, paid to the fund manager during the preceding year.

AB129,40,18 (e) An accounting of the value of tax credits awarded to creditors of the badger jobs fund under s. 239.14 during the preceding year, including a description of the circumstances leading to the award of the credits and the likelihood that the authority will award additional tax credits to fund creditors in the future.

AB129,40,21 (f) For each certified investor in whom the badger jobs fund invested capital under s. 239.13 (2) during the preceding year, the name and address of the investor and the amount of each investment.

AB129,40,22 (g) The internal rate of return realized by each certified investor.

AB129,40,24 (h) An accounting of any fee each certified investor paid to itself or any principal or manager of the certified investor during the preceding year.

AB129,41,7 (i) For each business in which a certified investor held an investment of capital from the badger jobs fund during the preceding year, the name and address of the business and a description of the nature of the business; the amount of each investment in the business; an identification of the certified investor who made the investment; and a statement of the number of employees the business employed when the certified investor first invested in the business and the number of employees the business employed on December 31 of the preceding year.

AB129,41,10 (3) Certified jobs now fund program. In addition to the information provided under sub. (1), the authority's annual report shall include all of the following for the certified jobs now fund program under subch. III:

AB129,41,11 (a) The information required under s. 239.25 (2).

AB129,41,13 (b) An accounting of the value of each tax credit the authority awarded under s. 239.22 (2) during the preceding year.

AB129,41,15 (c) An accounting of the revenue received by the authority under s. 73.033 (2) (b).

AB129,41,17 (d) An accounting of each profit sharing fee paid to the authority under s. 239.24 (2) during the preceding year.

AB129,41,20 (e) A list of certified jobs now funds that the authority decertified under s. 239.26 (2) during the preceding year and a description of the circumstances leading to each decertification.

AB129,41,21 subchapter II

AB129,41,22 Badger jobs fund

AB129,41,23 239.10 Definitions. In this subchapter:

AB129,41,24 (1) "Certified investor" means a person certified under s. 239.12.

AB129,42,2 (2) "Fund creditor" means any holder of a note or bond of the authority under this subchapter.

AB129,42,5 (3) "Debt service obligation" means the authority's obligation, including any payment schedule, to pay principal and interest or other financing costs to a creditor on a note or bond the authority issues under this subchapter.

AB129,42,6 (4) "Fund" means the badger jobs fund.

AB129,42,12 239.11 Creation of fund; management. (1) Fund purpose. There is created a fund to be known as the "badger jobs fund" for the investment of capital in certified investors. The legislature finds that the fund will provide capital for business growth and job creation in this state that is currently not sufficiently available in private financial markets and that the fund will result in increased tax revenues to the state and serve a public purpose.

AB129,42,14 (2) Bonding; debt service. (a) The authority may issue, by resolution, up to $200,000,000 in negotiable bonds or notes of any kind to finance the fund.

AB129,42,18 (b) The state is not liable for a debt service obligation of the authority. The authority's debt is not a debt of the state, and the authority may not create a debt of the state. Each note or bond of the authority shall contain on its face a statement to that effect.

AB129,42,22 (c) Recognizing its moral obligation to do so, the legislature hereby expresses its expectation and aspiration that, if ever called upon to do so, it shall make an appropriation to pay a fund creditor the amount the authority fails to pay or otherwise satisfy under its debt service obligation to that creditor.

AB129,43,2 (d) Neither the members of the board nor any person executing the notes or bonds is liable personally on the notes or bonds or subject to any personal liability or accountability by reason of the issuance of the notes or bonds, unless the personal liability or accountability is the result of willful misconduct.

AB129,43,18 (3) Notice regarding bond limit; dissolution of the fund. (a) The chairperson of the board shall promptly notify the joint committee on finance in writing when the authority has reached its bond limit under sub. (2) (a) and has satisfied 90 percent of its total debt service obligation to fund creditors. Once the authority satisfies 100 percent of its total debt service obligation to fund creditors, the chairperson of the board shall promptly provide a 2nd notice to the joint committee on finance stating that the authority has satisfied 100 percent of its total debt service obligation to fund creditors and that the authority intends to dissolve the fund. If, within 14 working days after the date of that 2nd notice, the cochairpersons of the committee do not notify the authority that the committee has scheduled a meeting to review dissolution of the fund, the authority shall dissolve the fund and liquidate all of the fund's assets and pay the proceeds of that liquidation to the secretary of administration for deposit in the general fund. If, within 14 working days after the date of that 2nd notice, the cochairpersons of the committee notify the authority that the committee has scheduled a meeting to review dissolution of the fund, the authority may dissolve the fund only upon approval of the committee.

AB129,44,2 (b) The authority may reinvest amounts that it receives as returns from its investments in certified investors only if the authority has reached the bond limit under sub. (2) (a), the authority has satisfied 100 percent of its total debt service obligation to fund creditors, and the joint committee on finance schedules a meeting to consider dissolution of the fund under par. (a) but does not approve dissolution of the fund. Any reinvestment by the authority under this paragraph shall meet the requirements under this subchapter with respect to the authority's investments in certified investors.

AB129,44,5 (c) If the authority dissolves the fund under par. (a), the authority shall pay to the secretary of administration for deposit in the general fund any additional amounts the authority receives from certified investors after the fund is dissolved.

AB129,44,13 (4) Fund manager. (a) The authority shall hire a fund manager who has expertise in the venture capital or private equity asset class to manage the fund's investment of capital in certified investors. In reviewing candidates for fund manager, the authority shall consider a candidate's venture capital or private equity asset class experience, investment philosophy, and the performance of any investments in the venture capital asset class managed by the candidate, as well as any other criteria the authority considers relevant. The fund manager may not be a certified investor.

AB129,44,17 (b) The authority may pay the fund manager an annual management fee. That management fee may not equal more than 0.5 percent of the fund's total assets including amount of capital that the authority has raised, committed to, or invested in, certified investors.

AB129,44,21 239.12 Investor certification. (1) Application. Any person may apply to the authority on a form prescribed by the authority for certification under this section. The application shall include the name, address, and tax identification number of the person and any other information the authority requires.

AB129,44,24 (2) Certification. The authority may certify an applicant who submits an application under sub. (1) to receive fund capital for investment. In determining whether to certify an applicant, the authority shall consider:

AB129,45,2 (a) The applicant's venture capital experience or other experience that qualifies the applicant to receive fund capital.

AB129,45,3 (b) The past performance of investments managed by the applicant.

AB129,45,4 (c) The applicant's commitment to investing in businesses within this state.

AB129,45,6 (d) The applicant's commitment to making seed or early stage business investments.

AB129,45,8 (e) Whether the applicant is located in this state or will locate and maintain an office in this state as a condition of the applicant's certification under this section.

AB129,45,10 (f) Any other factors the authority considers relevant that are consistent with the authorities responsibilities under this subchapter.

AB129,45,12 (3) Application fee. An applicant for certification under sub. (1) shall pay to the authority a fee in the amount determined by the authority.

AB129,45,17 239.13 Investment of capital in certified investors; requirements. (1) Investment policy. The fund manager shall establish, and amend as appropriate, a fund investment policy. The authority shall review and approve the investment policy prior to the policy's implementation and shall review the policy and any amendments at least annually thereafter.

AB129,45,21 (2) Fund investments. The authority may invest capital under this subchapter only in certified investors. The authority may not commit more than 15 percent of the total capital that the authority is authorized to raise under s. 239.11 (2) (a) to a single certified investor.

AB129,45,25 (3) Contracts. Before the authority invests any capital in a certified investor, the authority shall contract with the certified investor, and in addition to any other terms required or negotiated by the authority, that contract shall include the following requirements:

AB129,46,3 (a) The certified investor shall commit to maintaining a significant physical presence in this state, including locating an office in this state that is staffed with at least one full-time employee of the certified investor.

AB129,46,7 (b) The certified investor shall invest at least 50 percent of the amount of capital the certified investor receives from the fund in a business that meets all of the following conditions at the time the certified investor first invests in the business under this section: