Wisconsin Legislature: AB129,47,18

AB129,44,1714 (b) The authority may pay the fund manager an annual management fee. That
15management fee may not equal more than 0.5 percent of the fund's total assets
16including amount of capital that the authority has raised, committed to, or invested
17in, certified investors.

AB129,44,21 18239.12 Investor certification. (1) Application. Any person may apply to the
19authority on a form prescribed by the authority for certification under this section.
20The application shall include the name, address, and tax identification number of the
21person and any other information the authority requires.

AB129,44,24 22(2) Certification. The authority may certify an applicant who submits an
23application under sub. (1) to receive fund capital for investment. In determining
24whether to certify an applicant, the authority shall consider:

AB129,45,2

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

AB129,45,33 (b) The past performance of investments managed by the applicant.

AB129,45,44 (c) The applicant's commitment to investing in businesses within this state.

AB129,45,65 (d) The applicant's commitment to making seed or early stage business
6investments.

AB129,45,87 (e) Whether the applicant is located in this state or will locate and maintain an
8office in this state as a condition of the applicant's certification under this section.

AB129,45,109 (f) Any other factors the authority considers relevant that are consistent with
10the authorities responsibilities under this subchapter.

AB129,45,12 11(3) Application fee. An applicant for certification under sub. (1) shall pay to
12the authority a fee in the amount determined by the authority.

AB129,45,17 13239.13 Investment of capital in certified investors; requirements. (1)
14Investment policy. The fund manager shall establish, and amend as appropriate,
15a fund investment policy. The authority shall review and approve the investment
16policy prior to the policy's implementation and shall review the policy and any
17amendments at least annually thereafter.

AB129,45,21 18(2) Fund investments. The authority may invest capital under this subchapter
19only in certified investors. The authority may not commit more than 15 percent of
20the total capital that the authority is authorized to raise under s. 239.11 (2) (a) to a
21single certified investor.

AB129,45,25 22(3) Contracts. Before the authority invests any capital in a certified investor,
23the authority shall contract with the certified investor, and in addition to any other
24terms required or negotiated by the authority, that contract shall include the
25following requirements:

AB129,46,3

1(a) The certified investor shall commit to maintaining a significant physical
2presence in this state, including locating an office in this state that is staffed with
3at least one full-time employee of the certified investor.

AB129,46,74 (b) The certified investor shall invest at least 50 percent of the amount of capital
5the certified investor receives from the fund in a business that meets all of the
6following conditions at the time the certified investor first invests in the business
7under this section:

AB129,46,88 1. Is headquartered in this state.

AB129,46,109 2. Employs at least 50 percent of its employees, including any subsidiary or
10other affiliated entity, in this state.

AB129,46,1311 3. Agrees to use fund capital only for research and development, the
12introduction of a new product in the market, the business's entry into a new market,
13or other activities that are expected to grow the business and create jobs in this state.

AB129,46,1614 4. Is not primarily engaged in real estate development or sales, insurance,
15banking, lending, lobbying, political consulting, professional services, or retail sales,
16other than direct sales of products the business itself manufactures.

AB129,46,1817 (c) The certified investor may not receive capital from the fund that exceeds 25
18percent of the total capital the investor has raised from all sources.

AB129,46,2119 (d) When a certified investor makes an investment of fund capital in a business,
20the certified investor shall at least match the fund's capital contribution to that
21investment with capital the certified investor has raised from other sources.

AB129,46,2322 (e) The certified investor may not apply the amount of capital it receives from
23the fund toward certification under s. 560.205 (1) or (2).

AB129,46,25 24(4) Sunset. The authority may not make a commitment to invest capital in a
25certified investor under this subchapter after December 31, 2015.

AB129,47,5

1239.14 Tax credits to fund creditors. (1) In lieu of payment of its debt
2service obligation to a fund creditor, the authority may contract with a fund creditor
3to award a tax credit under s. 71.07 (8s), 71.28 (8s), or 71.47 (8s) to the fund creditor
4up to an amount equal to the amount the authority is unable to pay the creditor under
5the authority's debt service obligation to the creditor in a taxable year.

AB129,47,11 6(2) A contract under sub. (1) shall set forth the terms and conditions under
7which the fund creditor may claim a tax credit under this section. A fund creditor
8may not claim a tax credit that exceeds the amount the authority fails to pay under
9the authority's debt service obligation to the fund creditor. The authority shall certify
10to the department of revenue the amount of the tax credit a creditor of the fund may
11claim under this section.

AB129,47,14 12(3) The authority may not award a tax credit under this section that may be
13claimed before January 1, 2016. The authority may not award tax credits under this
14section that total more than $300,000,000.

AB129,47,1515 subchapter iiI

AB129,47,1616 certified jobs now funds

AB129,47,17 17239.20 Definitions. In this subchapter:

AB129,47,18 18(1) "Affiliate" means any of the following:

AB129,47,2119 (a) A person who owns, controls, or holds power to vote 15 percent or more of
20the outstanding voting securities or other voting interests of a certified jobs now fund
21or an insurance company or other person subject to premium tax liability.

AB129,47,2522 (b) A business, 15 percent of whose outstanding voting securities or other
23voting ownership interests are owned, controlled, or held with power to vote by a
24certified jobs now fund or an insurance company or other person subject to premium
25tax liability.

AB129,48,3

1(c) A person who controls, is controlled by, or is under common control with a
2certified jobs now fund or an insurance company or other person subject to premium
3tax liability.

AB129,48,64 (d) A business in which a certified jobs now fund or an insurance company or
5other person subject to premium tax liability is a partner, managing member, or
6other principal.

AB129,48,97 (e) An officer, director, employee, or agent of a certified jobs now fund or an
8insurance company or other person subject to premium tax liability, or an immediate
9family member of the officer, director, employee, or agent.

AB129,48,12 10(2) "Allocation date" means the date stated in the authority's notice under s.
11239.22 (2) (b) that approves a specific amount of designated capital and awards a
12corresponding premium tax credit to a participating investor.

AB129,48,14 13(3) "Certified jobs now fund" or "fund" means an entity that is certified under
14s. 239.21.

AB129,48,21 15(4) "Designated capital" means an investment of cash by a participating
16investor in a certified jobs now fund that is approved by the authority under s. 239.22
17and that fully funds either the participating investor's equity interest in a certified
18jobs now fund, a qualified debt instrument that a certified jobs now fund issues, or
19both. In this subsection, "qualified debt instrument" means a bond, note, or other
20obligation that a certified jobs now fund issues at par value or at a premium or
21discount from par value that meets all of the following conditions:

AB129,48,2322 (a) Has an original maturity date of at least 4 years from the date on which it
23is issued.

AB129,48,2524 (b) Has a repayment schedule that is no faster than a level principal
25amortization over 4 years.

AB129,49,1

1(c) Does not allow the prepayment of interest.

AB129,49,32 (d) Has payment and interest features that are not related to the fund's
3profitability or the performance of the fund's investment portfolio.

AB129,49,6 4(5) "Early stage business" means a qualified business that received, including
5any affiliate, gross revenue of $2,000,000 or less in the fiscal year immediately
6preceding that date.

AB129,49,9 7(6) "Participating investor" means an insurance company or other person
8subject to premium tax liability who the authority approves to invest designated
9capital in a certified jobs now fund under s. 239.22.

AB129,49,10 10(7) "Premium tax credit" means a tax credit under s. 76.634.

AB129,49,12 11(8) "Premium tax liability" means the fees imposed under s. 76.60, 76.63, 76.65,
1276.66, or 76.67.

AB129,49,15 13(9) "Qualified business" means a business that, as of the time a certified jobs
14now fund or its affiliate first invests in the business under this subchapter, meets all
15of the following conditions:

AB129,49,1716 (a) Is headquartered in, and has its principal business operations located in,
17this state.

AB129,49,1918 (b) Is in need of venture capital and is unable to obtain conventional financing,
19as determined by the authority.

AB129,49,2220 (c) Employs 100 or fewer employees, and at least 80 percent of those employees
21are employed in this state or at least 80 percent of its payroll is paid to employees
22employed in this state.

AB129,49,2523 (d) Is not primarily engaged in real estate development or sales, insurance,
24banking, lending, lobbying, political consulting, professional services, or retail sales,
25other than direct sales of products the business itself manufactures.

AB129,50,2

1(10) "Qualified investment" means a certified jobs now fund's investment of
2designated capital in a qualified business.

AB129,50,5 3239.21 Certification of jobs now funds. (1) Application. Any person may
4apply to the authority on a form prescribed by the authority for certification under
5this section. The application shall include all of the following:

AB129,50,66 (a) The name, address, and tax identification number of the applicant.

AB129,50,87 (b) A description of the business activities conducted by the applicant and the
8locations at which those activities are conducted.

AB129,50,119 (c) An audited balance sheet and the audit report, rendered within 35 days
10prior to the date the applicant files its application with the authority, of an
11independent auditor approved by the authority.

AB129,50,1512 (d) The strategic investment plan of the applicant, and an analysis completed
13by an economist or econometric analysis company approved by the authority that
14shows the projected impact that investment plan is expected to have on the economy
15of this state.

AB129,50,18 16(2) Certification. (a) The authority shall certify an applicant under sub. (1)
17if the applicant pays the fee specified under sub. (3) and the authority determines
18after conducting an investigation that all of the following conditions are met:

AB129,50,2019 1. The primary activity of the applicant is the investment of cash in qualified
20businesses.

AB129,50,2221 2. The applicant owns at least $500,000 in unencumbered cash or cash
22equivalents.

AB129,50,2523 3. At least 2 principals or persons employed to manage the applicant's
24investments have at least 5 years of experience in the venture capital or private
25equity industry in this state.

AB129,51,2

14. The strategic investment plan of the applicant will have a beneficial impact
2on the economy of this state.

AB129,51,63 (b) Within 30 days after the date an applicant files an application under sub.
4(1), the authority shall either issue a certification to the applicant or deny the
5application and provide written notice to the applicant that states the grounds for
6denial and includes the authority's suggestions, if any, to remove those grounds.

AB129,51,8 7(3) Application fee. An applicant for certification under sub. (1) shall pay to
8the authority a fee in the amount determined by the authority.

AB129,51,13 9239.22 Participating investors; premium tax credits. (1) Application.
10(a) Any insurance company or other person subject to premium tax liability may
11apply to the authority to make an investment of designated capital in a certified jobs
12now fund and receive a premium tax credit for that investment. The person's
13application shall include all of the following:

AB129,51,1414 1. The person's name, address, and tax identification number.

AB129,51,1615 2. The name and address of the certified jobs now fund in which the person
16proposes to invest.

AB129,51,1717 3. The amount of the proposed investment.

AB129,51,2018 4. An undertaking by the person to make an investment of designated capital
19in the amount approved by the authority within 5 business days after the allocation
20date established by the authority under sub. (2) (b).

AB129,51,2521 (b) The authority shall establish a single 15-day period in which applications
22under par. (a) may be submitted to the authority. The authority shall provide a notice
23regarding that application period and the investment program under this
24subchapter that is reasonably calculated to reach all insurance companies or other
25persons subject to premium tax liability within this state.

AB129,52,2

1(c) The authority may establish additional rules consistent with this
2subchapter regarding the requirements for an application under par. (a).

AB129,52,6 3(2) Award. (a) The authority shall approve an investment of designated capital
4in a certified jobs now fund and, subject to sub. (4) (b), award a premium tax credit
5to a person who satisfies the application requirements under sub. (1) in an amount
6equal to 80 percent of the person's proposed investment of designated capital.

AB129,52,127 (b) If the authority approves a person's proposed investment of designated
8capital under par. (a), the authority shall notify the person and the certified jobs now
9fund of that approval in writing, stating the amount of the investment approved by
10the authority, the amount of the premium tax credit the person may claim, the
11requirements, including those under sub. (3), for making that claim, and the
12allocation date.

AB129,52,1613 (c) The authority may not set an allocation date that is earlier than 30 days
14after the date of the authority's notice of approval of an investment under par. (b).
15The first allocation date set by the authority for any participating investor may not
16be later than 120 days after the effective date of this paragraph .... [LRB inserts date].

AB129,52,20 17(3) Claim eligibility and requirements. (a) A participating investor may claim
18a premium tax credit in the amount the authority awards only after the participating
19investor makes an investment of designated capital in the certified jobs now fund in
20the amount approved by the authority under sub. (2).

AB129,52,2521 (b) A participating investor may claim up to 25 percent of the premium tax
22credit approved under sub. (2) in a taxable year, except that a participating investor
23may not claim any premium tax credit under this subchapter for a taxable year
24beginning before January 1, 2014, and a premium tax credit may not be applied to
25quarterly tax payments due during the 2014 taxable year.

AB129,53,2

1(4) Limits on premium tax credits. (a) The authority may not award more than
2$200,000,000 in premium tax credits under this subchapter.

AB129,53,83 (b) If, as a result of the limitations under par. (a), the amount of available
4premium tax credits is insufficient for approval of the full amount of all applications
5for capital investments that are received by the authority within the 15-day period
6established by the authority under sub. (1) (b), the authority shall prorate the
7awardable amount among the applicants based on the amount the applicant has
8committed to invest in the certified jobs now fund.

AB129,53,119 (c) The authority may not award more than $50,000,000 in premium tax credits
10to a single participating investor, including its successor and any affiliate, on a
11particular allocation date.

AB129,53,14 12239.23 Operation of a certified jobs now fund. (1) Required disclosures
13in securities offerings. Any offering material involving the sale of securities of a
14certified jobs now fund shall include all of the following statements:

AB129,53,2115 (a) "By authorizing the formation of a certified jobs now fund, the Wisconsin
16Venture Capital Authority does not endorse the quality of management or explicitly
17or implicitly guarantee or otherwise assure the economic performance of the fund
18and is not liable for damages or losses to a participating investor in the fund. Use
19of the word "certified" in an offering is not a recommendation, endorsement, or
20guarantee of the investment by the Wisconsin Venture Capital Authority or the
21state."

AB129,54,422 (b) "Investments in a prospective certified jobs now fund prior to the time the
23fund is certified are not eligible for a premium tax credit under section 76.634 of the
24Wisconsin Statutes. Investments in a certified jobs now fund are not eligible for a
25premium tax credit under section 76.634 of the Wisconsin Statutes unless the

1proposed investment is approved by the Wisconsin Venture Capital Authority under
2section 239.22 of the Wisconsin Statutes before the investment is made. In the event
3that certain statutory provisions are violated, the state may require forfeiture of
4unused premium tax credits and repayment of used premium tax credits."

AB129,54,75 (c) "In addition to any other applicable law, the certified jobs now fund is subject
6to applicable provisions of subchapter III of chapter 239 of the Wisconsin Statutes
7and any requirements of the Wisconsin Venture Capital Authority."

AB129,54,10 8(2) Qualified investments. A certified jobs now fund may invest designated
9capital only in a qualified business. A qualified investment shall meet all of the
10following requirements:

AB129,54,1511 (a) The investment is a cash investment in a qualified business for the purchase
12of debt, debt participation, equity, or hybrid security of any kind, including a debt
13instrument or security that has the characteristics of debt that provides for
14conversion into equity or an equity participation instrument such as an option or
15warrant.

AB129,54,1916 (b) If the investment is for the purchase of any debt or debt participation, no
17more than 10 percent of that debt or debt participation may be used for the
18refinancing of other debt or the buy-out of other shareholders or owners of the
19qualified business.

AB129,54,2220 (c) As a condition of the investment, the qualified business agrees not to
21relocate its headquarters outside of this state as long as the certified jobs now fund
22continues to hold the investment.

AB129,55,223 (d) As a condition of the investment, the qualified business agrees to maintain
24at least 75 percent of its employees, or pay at least 75 percent of its payroll to
25employees, including the employees or payroll of any subsidiary or other affiliated

1entity, in this state as long as the certified jobs now fund continues to hold the
2investment.

AB129,55,7 3(3) Authority determinations regarding qualified businesses. A certified
4jobs now fund may request a determination from the authority that a business in
5which the fund proposes to invest is a qualified business or an early stage business.
6The authority shall issue its determination in writing to the fund within a reasonable
7time after the fund's request.