6. One member appointed by the governor who serves in a senior management
position at a technology company headquartered in Wisconsin that employs fewer
than 50 employees and who has responsibilities related to the financing of the
company or of its product development activities.
7. One member appointed by the president of the University of Wisconsin
System who has experience in collaborations among universities and industries to
conduct innovative, fundamental research in science, engineering, technology, and
other areas of interest to industry.
8. One member appointed by the president of the Wisconsin Association of
Independent Colleges and Universities who has experience in collaborations among
universities and industries to conduct innovative, fundamental research in science,
engineering, technology, and other areas of interest to industry.
9. Two members appointed by the governor who have experience working for
industry cluster partnerships. Under the bill, an industry cluster partnership is
defined as a nonprofit organization whose primary purpose is to assist in developing
and supporting a regional concentration of industry-specific private sector

businesses that share a common interest in fostering research and development,
worker skills training, and market development.
10. One member appointed by the governor who has at least five years of
experience in the investment activities, merger, and acquisition of technology or
manufacturing companies.
Economic development programs supported by the fund
Under the bill, subject to certain additional limitations and requirements set
forth in the bill, WEDC administers the following economic development programs
using interest earnings from the fund:
1. WEDC may award grants to businesses and other entities headquartered in
Wisconsin for the development or deployment of new technologies, components,
systems, or processes to solve or significantly improve upon local problems identified
by WEDC with the advisory council's concurrence.
2. WEDC may award a grant to businesses and other entities headquartered
in Wisconsin for the development or deployment of a new technology, component,
system, or process to solve or significantly improve upon a problem affecting a
significant portion of Wisconsin or the nation identified by WEDC.
3. WEDC may award grants to early stage businesses for the purpose of
facilitating rapid prototype development and pilot testing of potentially marketable
new technologies, components, or products.
4. WEDC may make payments under contracts with industry cluster
partnerships. WEDC may award a contract to an industry cluster partnership only
if it meets certain conditions and may award only one contract per year.
The bill further authorizes WEDC to expend interest earnings from the fund
to partially fund any grant that WEDC provides under a program WEDC
administers to support business accelerators in Wisconsin. The bill also authorizes
WEDC to use interest earnings from the fund to partially fund any grant that WEDC
provides to match or partially match grants made by the federal small business
administration or under the federal Small Business Technology Transfer Program.
Additional contracting authority for the Investment Board
The bill authorizes the Investment Board to provide advice and services to any
state agency or authority or a business entity owned by an agency or authority.
Under the bill, the Investment Board may provide advice or services related to the
management or administration, for any purpose, including economic development,
of money or property that an agency, authority, or eligible business entity controls.
The agency, authority, or eligible business entity must contract with the Investment
Board and pay the Investment Board for any advice or services the Investment Board
provides.
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:
SB525,1
1Section 1. 19.42 (10) (t) of the statutes is created to read:
SB525,4,32 19.42 (10) (t) The members of the innovation fund council established under
3s. 238.41.
SB525,2 4Section 2. 19.42 (13) (q) of the statutes is created to read:
SB525,4,65 19.42 (13) (q) The members of the innovation fund council established under
6s. 238.41.
SB525,3 7Section 3. 20.192 (1) (t) of the statutes is created to read:
SB525,4,148 20.192 (1) (t) Innovation fund and programs; general program operations;
9grants.
From interest earnings of the innovation fund, a sum sufficient to provide
10the grants and other payments under ss. 238.42, 238.43, 238.44, and 238.45 and for
11general program operations and administrative expenses related to the innovation
12fund council and the programs administered under subch. III of ch. 238. Not more
13than the following amounts may be expended under this paragraph for general
14program operations and administrative expenses under subch. III of ch. 238:
SB525,4,1515 1. In fiscal year 2019-20, 5 percent of the moneys in the innovation fund.
SB525,4,1616 2. In fiscal year 2020-21, 5 percent of the moneys in the innovation fund.
SB525,4,1717 3. In fiscal year 2021-22, 2 percent of the moneys in the innovation fund.
SB525,4,1918 4. In fiscal year 2022-23 and in each fiscal year thereafter, 0.5 percent of the
19moneys in the innovation fund.
SB525,4 20Section 4. 20.192 (1) (y) of the statutes is created to read:
SB525,4,2421 20.192 (1) (y) Innovation fund and programs; additional operational or
22administrative expenses.
From interest earnings of the innovation fund, a sum
23sufficient equal to any amount authorized under s. 238.48 (2) for general program
24operations and administrative expenses.
SB525,5 25Section 5. 20.536 (1) (k) of the statutes is amended to read:
SB525,5,4
120.536 (1) (k) General program operations. All moneys received from
2assessments made under s. 25.187 (2) and from charges made under s. 25.17 (9), and
3from assessments or charges made under s. 25.17 (73),
for the purpose of conducting
4general program operations.
SB525,6 5Section 6. 25.14 (1) (a) (intro.) of the statutes is amended to read:
SB525,5,106 25.14 (1) (a) (intro.) There is created a state investment fund under the
7jurisdiction and management of the board to be operated as an investment trust for
8the purpose of managing the securities of all funds that are required by law to be
9invested in the state investment fund, the innovation fund, and all of the state's
10funds specified in s. 25.17 (1), except all of the following:
SB525,7 11Section 7. 25.17 (73) of the statutes is created to read:
SB525,5,2512 25.17 (73) Have authority to provide advice and services requested by a state
13agency, as defined in s. 20.001 (1), or authority, as defined in s. 16.417 (1) (b), or
14business entity owned or controlled by a state agency or authority, relating to
15managing or administering money and property controlled by the agency, authority,
16or business entity for any purpose, including economic development in this state.
17The scope of any advice or services provided to a state agency, authority, or business
18entity under this subsection shall be defined by agreement between the board and
19the agency, authority, or business entity. This agreement shall require the cost of any
20advice or services provided by the board to be paid by the agency, authority, or
21business entity and the agreement may authorize the board to make assessments
22against the money and property controlled by the agency, authority, or business
23entity or to charge the agency, authority, or business entity for the cost of any advice
24or services provided. All moneys received by the board under this subsection shall
25be credited to the appropriation account under s. 20.536 (1) (k).
SB525,8
1Section 8. 25.90 of the statutes is created to read:
SB525,6,6 225.90 Innovation fund. There is established a separate nonlapsible trust
3fund designated as the innovation fund. The fund shall consist of all moneys
4deposited in the fund under s. 73.17, together with all donations, gifts, or bequests
5made to the fund, all moneys transferred to the fund from other funds, and all income
6or interest earned by the fund.
SB525,9 7Section 9. 73.17 of the statutes is created to read:
SB525,6,23 873.17 Innovation fund. (1) In this section, “qualifying company" means a
9person whose principal business activity code in the North American Industry
10Classification System, 2017 edition, published by the federal office of management
11and budget, is one of the following: 111, 112, 311, 424, 445, 481, 3121, 3364, 4244,
124245, 4881, 221111, 221112, 221113, 221114, 221115, 221116, 221117, 221121,
13221122, 221210, 221310, 221330, 237990, 238210, 311221, 311224, 324110, 324191,
14325193, 325199, 325220, 325311, 325312, 325314, 325320, 325411, 325412, 325413,
15325414, 325998, 326122, 326199, 327331, 332410, 332420, 332911, 332913, 322999,
16333111, 333249, 333241, 333242, 333318, 333413, 333414, 333415, 333611, 333612,
17333613, 333618, 333991, 333993, 333994, 333995, 333996, 333999, 334111, 334290,
18334412, 334413, 334416, 334418, 334419, 334510, 334511, 334512, 334513, 334514,
19334515, 334516, 334517, 334519, 335110, 335121, 335122, 335129, 335210, 335220,
20335311, 335312, 335313, 335314, 335911, 335912, 335921, 335929, 335931, 335999,
21339112, 339113, 339114, 339115, 339116, 511210, 517410, 541320, 541330, 541370,
22541380, 541511, 541512, 541519, 541620, 541713, 541714, 541715, 611512, 621491,
23621493, 621511, 621512, 622110, or 811219.
SB525,7,3
1(2) (a) Before May 1, 2019, the department of revenue shall determine the total
2amount of withholding taxes due and payable under subch. X of ch. 71 from
3qualifying companies for calendar year 2017.
SB525,7,84 (b) Subject to par. (d), on July 1, 2019, and on each July 1 thereafter, ending on
5July 1, 2033, the department of revenue shall deposit into the innovation fund an
6amount equal to 95 percent of the amount of withholding taxes due and payable
7under subch. X of ch. 71 from qualifying companies in the previous calendar year that
8exceeds the amount determined under par. (a).
SB525,7,119 (c) A person who is subject to withholding taxes under subch. X of ch. 71 shall
10indicate to the department of revenue whether it is a qualifying company for
11purposes of this section in the manner determined by the department.
SB525,7,1412 (d) The department of revenue may not deposit into the innovation fund more
13than $50,000,000 in any fiscal year, and the total amount deposited may not exceed
14$500,000,000.
SB525,10 15Section 10. Subchapter III of chapter 238 [precedes 238.40] of the statutes is
16created to read:
SB525,7,1717 Chapter 238
SB525,7,1918 Subchapter III
19 innovation
SB525,7,20 20238.40 Definitions. In this subchapter:
SB525,7,21 21(1) “Council” means the innovation fund council established under s. 238.41.
SB525,7,22 22(1m) “Eligible regulatory applicant” means any of the following:
SB525,7,2323 (a) An entity that has received a grant under s. 238.42 or 238.43.
SB525,7,2524 (b) Any business, institution of higher education, technical college, or public
25utility that is a member of an industry cluster partnership.
SB525,8,3
1(c) Any business, institution of higher education, technical college, or public
2utility that participates in a business accelerator, business incubator, or technology
3pilot program facilitated by an industry cluster partnership.
SB525,8,4 4(2) “Fund” means the innovation fund.
SB525,8,12 5(3) “Industry cluster partnership" means a nonprofit organization, including
6its subsidiaries and affiliates, whose primary purpose, or whose subsidiary's or
7affiliate's primary purpose, is to assist in developing and supporting a regional
8concentration of industry-specific private sector businesses in this state and to foster
9industry-specific research and development, worker skills training, and market
10development at institutions of higher education in this state, including technical
11colleges, for the purpose of transferring to the private sector, and commercializing,
12technology developed at those institutions that is related to relevant industries.
SB525,8,18 13238.41 Innovation fund council. (1) Establishment. The corporation shall
14establish an advisory council to be called the “innovation fund council.” Except as
15otherwise provided under this section or in policies and procedures adopted by the
16corporation to govern the council's business, the council shall be subject to s. 15.09.
17The council shall advise the corporation concerning the use of fund moneys and the
18economic development programs administered under this subchapter.
SB525,8,20 19(2) Membership. The council shall consist of the following members, to serve
20staggered 3-year terms:
SB525,8,2121 (a) One member appointed by the executive director of the investment board.
SB525,8,2322 (b) One member appointed by the managing director of the Wisconsin Alumni
23Research Foundation, Inc.
SB525,9,224 (c) One member appointed by the governor who currently serves in a senior
25management position at a manufacturing company headquartered in this state that

1employs at least 250 employees in this state, including any affiliate, and that
2engages in research and development.
SB525,9,73 (d) One member appointed by the governor who currently serves in a senior
4management position at a manufacturing company headquartered in this state that
5employs fewer than 50 employees in this state, including any affiliate, and who, in
6addition to any other responsibilities, has responsibilities related to the financing of
7the company or of its product development activities.
SB525,9,118 (e) One member appointed by the governor who currently serves in a senior
9management position at a technology company headquartered in this state that
10employs at least 250 employees in this state, including any affiliate, and that
11engages in corporate research and development.
SB525,9,1612 (f) One member appointed by the governor who currently serves in a senior
13management position at a technology company headquartered in this state that
14employs fewer than 50 employees in this state, including any affiliate, and who, in
15addition to any other responsibilities, has responsibilities related to the financing of
16the company or of its product development activities.
SB525,9,2017 (g) One member appointed by the president of the University of Wisconsin
18System who has experience in collaborations among universities and industries to
19conduct innovative, fundamental research in science, engineering, technology, and
20other areas of interest to industry.
SB525,9,2421 (h) One member appointed by the president of the Wisconsin Association of
22Independent Colleges and Universities, Inc., who has experience in collaborations
23among universities and industries to conduct innovative, fundamental research in
24science, engineering, technology, and other areas of interest to industry.
SB525,10,2
1(i) Two members appointed by the governor who have experience working for
2industry cluster partnerships.
SB525,10,53 (j) One member appointed by the governor who has at least 5 years of
4experience in the investment activities, merger, and acquisition of technology or
5manufacturing companies.
SB525,10,10 6238.42 Innovation through competition. (1) Local challenges. (a) The
7corporation, in collaboration with the council, may identify local problems affecting
8one or more regions within the state that, in the corporation's opinion, are susceptible
9to being solved over time through private sector innovation and the development and
10use of new technologies, components, systems, or processes.
SB525,10,1511 (b) The corporation may solicit grant applications from and award grants to
12businesses headquartered in this state, or coalitions of such businesses or of such
13businesses and institutions of higher education, for the development or deployment
14of a new technology, component, system, or process to solve or significantly improve
15upon a local problem identified under par. (a).
SB525,10,2216 (c) Each grant under par. (b) shall be made from the appropriation under s.
1720.192 (1) (t). In awarding the grants, the corporation shall give priority to
18applicants that, in the corporation's opinion, present the most compelling potential
19solution to the problem and the most credible business case for eventually marketing
20a solution that solves or significantly improves upon the problem and that
21demonstrates a potential to increase jobs in this state or reduce costs to the state or
22a political subdivision of the state.
SB525,11,2 23(2) Grand challenges. (a) The corporation may identify problems affecting
24a significant portion of the state or nation that, in the corporation's opinion, are

1susceptible to being solved over time through private sector innovation and the
2development and use of new technologies, components, systems, or processes.
SB525,11,73 (b) The corporation may solicit grant applications from and award grants to
4businesses headquartered in this state, or coalitions of such businesses or of such
5businesses and institutions of higher education, for the development or deployment
6of a new technology, component, system, or process to solve or significantly improve
7upon a problem identified under par. (a).
SB525,11,148 (c) Each grant under par. (b) shall made be from the appropriation under s.
920.192 (1) (t). In awarding the grants, the corporation shall give priority to
10applicants that, in the corporation's opinion, present the most compelling potential
11solution to the problem and the most credible business case for eventually marketing
12a solution that solves or significantly improves upon the problem and that
13demonstrates a potential to increase jobs in this state or reduce costs to the state or
14a political subdivision of the state.
SB525,11,21 15(3) Maximizing grant funds. Using available and feasible mechanisms, such
16as matching funds, the corporation shall undertake to maximize the impact of grants
17awarded under this section with the understanding that many grants under this
18section might not immediately result in the development of a marketable technology,
19component, system, or process but that the grants are an important contribution to
20future innovation and manufacturing growth in this state and an important method
21of fostering a culture of private sector collaboration and innovation.
SB525,11,24 22238.43 New product research and development. (1) Definition. In this
23section, “early stage business” means a business that satisfies all of the following
24conditions:
SB525,11,2525 (a) The business satisfies s. 238.15 (1) (a) to (g), (k), (kn), and (L).
SB525,12,2
1(b) At the time it receives a grant under this section, the business has less than
2100 employees.
SB525,12,43 (c) At the time it receives a grant under this section, the business has been in
4operation in this state for not more than 10 consecutive years.
SB525,12,65 (d) The business has not received aggregate private equity investment in cash
6of more than $10,000,000 before it receives a grant under this section.
SB525,12,10 7(2) Grants. (a) From the appropriation under s. 20.192 (1) (t), the corporation
8may make grants to early stage businesses for the purpose of facilitating rapid
9prototype development and pilot testing of potentially marketable new technologies,
10components, or products.
SB525,12,1411 (b) The corporation may make a grant to an early stage business under this
12section only if the early stage business is a member of an industry cluster partnership
13and agrees to consult with the industry cluster partnership concerning expenditures
14of the grant moneys.
SB525,12,21 15(3) Maximizing grant funds. Using available and feasible mechanisms, such
16as matching funds, the corporation shall undertake to maximize the impact of grants
17awarded under this section with the understanding that many grants under this
18section might not immediately result in the development of a marketable technology,
19component, or product but that the grants are an important contribution to future
20innovation and manufacturing and technology growth in this state and an important
21method of fostering a culture of private sector collaboration and innovation.
SB525,13,5 22238.44 Capacity building through industry cluster partnerships. (1)
23Contract application. Any industry cluster partnership in this state may apply for
24a contract under this section. In addition to any other information the corporation
25requires, the application shall include a business plan for the applicant that sets

1forth measurable economic development and business-related goals and the specific
2programming the applicant intends to implement to achieve those goals. The
3business plan shall demonstrate to the corporation's satisfaction how the applicant
4plans to be without need of corporation funding within 10 years after first receiving
5a payment under a contract under this section.
SB525,13,9 6(2) Contract payments. From the appropriation under s. 20.192 (1) (t), the
7corporation may make payments to industry cluster partnerships subject to
8contracts under this section. The corporation may not enter into more than one
9contract per industry under this section each year.
SB525,13,13 10(3) Award of contract; termination. (a) Subject to pars. (b) to (f), the
11corporation may award a contract under this section only to an industry cluster
12partnership that submits an application under sub. (1) and for which the corporation
13has evaluated all of the following:
SB525,13,1614 1. Evidence that the industry cluster partnership will strongly support the
15further development of existing regional concentrations of industry-specific
16businesses in this state.
SB525,13,2017 2. Evidence that the industry cluster partnership has raised funding or funding
18commitments from sources other than the corporation and the state that equal at
19least 10 percent of the annual amount the industry cluster partnership is requesting
20from the corporation.
SB525,13,2321 (b) The corporation may not contract under this section with an industry
22cluster partnership unless the industry cluster partnership is headquartered in this
23state.
SB525,14,524 (c) The corporation may not contract under this section with an industry cluster
25partnership unless the industry cluster partnership is governed by a board of

1directors with members from the public and private sectors who represent the
2businesses within the applicable industry, including businesses in the industry
3cluster partnership, and who represent the interests necessary to ensure a
4collaborative, strategic approach to supporting economic development, job growth,
5and the development of marketable products and services in the applicable industry.
Loading...
Loading...