560.20(1)(b)
(b) "Equity investment" means the purchase of common or preferred capital stock or the purchase of an option or other right to acquire common or preferred capital stock.
560.20(1)(c)
(c) "For-profit business" means any organization or enterprise operated on a for-profit or cooperative basis, including but not limited to a proprietorship, partnership, firm, business trust, joint venture, syndicate, corporation, cooperative or association.
560.20(1)(cf)
(cf) "Management assistance" means engineering and legal services and professional assistance in establishing or improving management systems, policies or procedures in such management concerns as financial planning, personnel, inventory control, production planning, purchasing, bookkeeping, record keeping and marketing.
560.20(1)(d)
(d) "Nonprofit organization" means a nonprofit corporation, as defined in
s. 181.0103 (17), and any organization described in section
501 (c) (3) of the internal revenue code that is exempt from federal income tax under section
501 (a) of the internal revenue code.
560.20(1)(e)
(e) "Person with severe disabilities" means an individual who is eligible for one or more programs or services under
ch. 47 because he or she is a person with a severe disability, as defined in
s. 47.01 (3g).
560.20(1)(f)
(f) "Small business" means a for-profit business having fewer than 25 full-time employes.
560.20(1)(g)
(g) "Technical assistance" includes all of the following:
560.20(1)(g)1.
1. Preparation of preliminary feasibility studies, feasibility studies or business and financial plans.
560.20(1)(g)3.
3. Engineering studies, appraisals or marketing assistance.
560.20(1m)
(1m) Employment opportunities. The department shall develop a program consisting of technical assistance, grants and loans, as described in
subs. (2) and
(3), for the purpose of assisting the expansion and creation of for-profit businesses that are expected to provide employment opportunities for persons with severe disabilities.
560.20(2)
(2) Technical assistance; grants and services. 560.20(2)(a)(a) The department may provide technical assistance to an individual, small business or nonprofit organization. In addition to or in lieu of the technical assistance provided by the department, the department may make a grant to an individual, small business or nonprofit organization from the appropriation under
s. 20.143 (1) (en) to partially fund technical assistance provided to the individual, small business or nonprofit organization. Technical assistance or a grant for technical assistance provided under this paragraph shall be for the purpose of developing and planning, at the preliminary stages, the start-up or expansion of a for-profit business that is or will be located in this state.
560.20(2)(b)
(b) In deciding whether to provide technical assistance or make a grant under
par. (a), or both, the department shall consider all of the following:
560.20(2)(b)1.
1. The likelihood that the for-profit business will actually be profitable.
560.20(2)(b)2.
2. The extent to which the expansion or creation of the for-profit business will increase employment in this state.
560.20(2)(b)3.
3. The extent to which the expansion or creation of the for-profit business is expected to create employment opportunities for persons with severe disabilities, particularly persons with severe disabilities who are minority group members.
560.20(2)(c)
(c) The amount of each grant awarded under
par. (a) may not exceed $15,000. As a condition of receiving a grant, the individual, small business or nonprofit organization shall provide matching funds in an amount equal to at least 25% of the amount of the grant. The department may allow the individual, small business or nonprofit organization to satisfy the matching fund requirement by contributing, or having another person contribute on its behalf, services toward the technical assistance that have a value, as determined by the department, equal to at least 25% of the amount of the grant.
560.20(2)(d)
(d) The department shall do all of the following:
560.20(2)(d)1.
1. Develop an application form to be used by individuals, small businesses and nonprofit organizations seeking technical assistance and grants under
par. (a) and furnish the application upon request.
560.20(2)(d)2.
2. Award grants under
par. (a) on a competitive basis after evaluating applications received by the department for technical assistance and grants under
par. (a).
560.20(3)
(3) Management assistance; loans and grants. 560.20(3)(a)(a) The department may award funds appropriated under
s. 20.143 (1) (en) and
(in) to an individual, small business or nonprofit organization for use in connection with the start-up or expansion of a for-profit business if all of the following apply:
560.20(3)(a)1.
1. The department provided technical assistance or a grant for technical assistance under
sub. (2) for developing and planning the start-up or expansion of the for-profit business.
560.20(3)(a)2.
2. The for-profit business is or will be at least 51% owned by a handicapped person, as defined in
s. 47.01 (3), or by a nonprofit organization that provides services to handicapped persons, as defined in
s. 47.01 (3).
560.20(3)(b)
(b) If the department awards funds under this subsection to an individual, small business or nonprofit organization, up to 20% of the award, or $5,000, whichever is less, may be a grant and the balance shall be a loan.
560.20(3)(c)
(c) An individual, small business or nonprofit organization that receives an award of funds under this subsection may use loan proceeds only for working capital or fixed-asset financing, and may use grant proceeds, if any, only for management assistance.
560.20(3)(d)
(d) The department may not award under this subsection funds that exceed $30,000 in a fiscal biennium to any single individual, small business or nonprofit organization. As a condition of receiving an award under this subsection, an individual, small business or nonprofit organization shall provide matching funds that are at least equal to the amount of the award.
560.20(3)(e)
(e) In deciding whether to make an award under this subsection, the department shall consider all of the following:
560.20(3)(e)1.
1. The likelihood that the for-profit business will actually be profitable.
560.20(3)(e)2.
2. The extent to which the expansion or creation of the for-profit business will increase employment in this state.
560.20(3)(e)3.
3. The extent to which the expansion or creation of the for-profit business is expected to create employment opportunities for persons with severe disabilities, particularly persons with severe disabilities who are minority group members.
560.20(3)(e)4.
4. The extent to which the award is necessary for the successful completion of the start-up or expansion of the for-profit business because funding is unavailable in traditional capital markets, or because credit has been offered on terms that would preclude the success of the for-profit business.
560.20(3)(f)
(f) The department shall do all of the following:
560.20(3)(f)1.
1. Develop an application form to be used by individuals, small businesses and nonprofit organizations seeking an award under this subsection and furnish the application upon request.
560.20(3)(f)2.
2. Before awarding a loan under this subsection, determine the terms for repayment of the principal amount of the loan.
560.20(3)(f)3.
3. Before awarding the loan, establish all other terms and conditions of the loan after considering the circumstances of the individual, small business or nonprofit organization.
560.20(3)(f)4.
4. Deposit in the appropriation account under
s. 20.143 (1) (in) all interest and principal received in repayment of loans under this subsection, any proceeds from equity investments made by the community development finance company under s.
234.965, 1991 stats., that are received by the department or the community development finance company and any unencumbered grant funds returned to the department under
1993 Wisconsin Act 437, section 9115 (1t).
560.20(3)(g)
(g) The department, in agreement with the for-profit business, may convert any equity investments made by the community development finance company in a for-profit business under s.
234.965, 1991 stats., to a grant or a loan under this subsection without regard to the requirements under
par. (b).
560.20(3)(h)
(h) The community development finance company shall transfer to the department any proceeds that the company receives from equity investments made by the community development finance company under s.
234.965, 1991 stats.
CERTIFIED CAPITAL COMPANIES
560.30
560.30
Definitions. In this subchapter:
560.30(1)
(1) "Affiliate" means, with respect to a certified capital company or a certified investor, any of the following:
560.30(1)(a)
(a) A person who, directly or indirectly, owns, controls, or holds power to vote, 10% or more of the outstanding voting securities or other voting ownership interests of the certified capital company or certified investor.
560.30(1)(b)
(b) A person, 10% of whose outstanding voting securities or other voting ownership interests are directly or indirectly owned, controlled or held with power to vote by the certified capital company or certified investor.
560.30(1)(c)
(c) A person directly or indirectly controlling, controlled by, or under common control with, the certified capital company or certified investor.
560.30(1)(d)
(d) A partnership in which the certified capital company or certified investor is a general partner.
560.30(1)(e)
(e) A person who is an officer, director or agent of the certified capital company or certified investor, or is an immediate family member of such an officer, director or agent.
560.30(2)
(2) "Certified capital company" means a person that has been certified by the department under
s. 560.31 and that has not been decertified under
s. 560.37 (3) or
(3m).
560.30(3)
(3) "Certified capital company tax credit" means the tax credit under
s. 76.635.
560.30(4)
(4) "Certified capital investment" means an investment in a certified capital company that is certified under
s. 560.32 (2) and that fully funds either the investor's equity interest in a certified capital company, a qualified debt instrument that a certified capital company issues, or both.
560.30(5)
(5) "Certified investor" means a person who makes a certified capital investment.
560.30(6)
(6) "Investment date" means, with respect to each investment pool, the date on which the last certified capital that is part of that investment pool was invested in the certified capital company.
560.30(7)
(7) "Investment pool" means the aggregate of all investments of certified capital in a certified capital company that are made as part of the same transaction, except that investments received more than 30 days apart may not be considered part of the same investment pool.
560.30(8)
(8) "Qualified business" means a business which is a qualified business under
s. 560.33.
560.30(9)
(9) "Qualified debt instrument" means a debt instrument that a certified capital company issues at par value or at a premium; that has an original maturity date of at least 5 years from the date on which it was issued; that has a repayment schedule that is no faster than a level principal amortization and, until the certified capital company may make distributions other than qualified distributions, the interest, distribution or payment features of which are not related to the certified capital company's profitability or the performance of its investment portfolio.
560.30(10)
(10) "Qualified distribution" means a distribution or payment by a certified capital company to its equity holders for any of the following:
560.30(10)(a)
(a) The costs of forming, syndicating, managing or operating the certified capital company.
560.30(10)(b)
(b) An annual management fee that does not exceed 2.5% of the certified capital company's total certified capital.
560.30(10)(c)
(c) Reasonable and necessary fees paid for professional services related to the operation of the certified capital company.
560.30(10)(d)
(d) A projected increase in federal or state taxes, including penalties and interest on those taxes, of the equity owners of the certified capital company if those amounts are related to the certified capital company's ownership, management or operation.
560.30(11)
(11) "Qualified investment" means an investment in a qualified business by a certified capital company that meets the requirements under
s. 560.34 (1).
560.30 History
History: 1997 a. 215.
560.31
560.31
Certification of certified capital companies. 560.31(1)(1)
Application. The department shall promulgate rules establishing procedures under which a person may apply to become a certified capital company. The department shall grant or deny an application for certification under this section within 30 days of the date of application. If the department denies certification, the department shall include with the denial a detailed description of the grounds for the refusal, including suggestions for removal of those grounds.
560.31(2)
(2) Requirements for certification. The department shall certify a person as a certified capital company if the department determines that all of the following conditions have been met:
560.31(2)(a)
(a) The person is a partnership, corporation, trust or limited liability company, whether organized for profit or not for profit, that has as its primary business activity the investment of cash in qualified businesses.
560.31(2)(b)
(b) 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.
560.31(2)(c)
(c) The directors, officers, general partners, trustees, managers or members or persons having a similar function are familiar with the requirements of this subchapter.
560.31(2)(d)
(d) At least 2 officers, directors, general partners, trustees, managers or members each have at least 2 years of experience in the venture capital industry.
560.31(2)(e)
(e) The person has included, in any offering material involving the sale of securities, the statement required under
s. 560.32 (1).
560.31(2)(f)
(f) The person has paid a nonrefundable application fee of $7,500.
560.31 History
History: 1997 a. 215.
560.32
560.32
Investments in certified capital companies. 560.32(1)(1)
Required disclosures in securities offerings. Any offering material involving the sale of securities of a certified capital company shall include all of the following statements:
560.32(1)(a)
(a) "By authorizing the formation of a certified capital company, the state does not necessarily endorse the quality of management or the potential for earnings of the company and is not liable for damages or losses to a certified investor in the company. Use of the word "certified" in an offering is not a recommendation or endorsement of the investment by the State of Wisconsin Department of Commerce."
560.32(1)(b)
(b) "Investments in a prospective certified capital company prior to the time the company is certified are not eligible for a certified capital company investment credit under section 76.635 of the Wisconsin Statutes. Investments in a certified capital company are not eligible for a certified capital company investment credit under section 76.635 of the Wisconsin Statutes unless the proposed investment is certified under section 560.32 (2) of the Wisconsin Statutes before the investment is made. In the event that certain statutory provisions are violated, the state may require forfeiture of unused certified capital company investment credits and repayment of used certified capital company investment credits."
560.32(2)
(2) Certification of certified capital investments. 560.32(2)(a)(a) A person may apply to make a certified capital investment in a certified capital company by providing notice under this paragraph to the department on a form specified by the department. The notice shall include the name of the person, the name of the certified capital company, the amount of the investment and any other information specified by the department. The notice shall also include an undertaking by the person to make the investment within 5 days after the department notifies the person that the investment has been certified.
560.32(2)(b)
(b) 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.
