Date of enactment: February 29, 2024
2023 Assembly Bill 890 Date of publication*: March 1, 2024
2023 WISCONSIN ACT 98
AN ACT to repeal 16.295 (4) (a) 2. and 16.295 (6) (b); to consolidate, renumber and amend 16.295 (4) (a) (intro.)
and 1.; to amend 16.295 (5) (c) 3., 16.295 (5) (d) 1., 16.295 (5) (d) 4., 16.295 (6) (a), 16.295 (7) (a) 2., 16.295 (7)
(a) 3. (intro.), 16.295 (7) (a) 3. b., 16.295 (7) (a) 3. d., 16.295 (7) (a) 4. (intro.), 16.295 (7) (a) 4. f., 16.295 (7) (c)
1., 16.295 (7) (c) 2., 16.295 (7) (c) 3. and 16.295 (8) (intro.); to repeal and recreate 16.295 (6) (c); and to create
16.295 (6) (d) of the statutes; relating to: fund of funds investment program.
The people of the state of Wisconsin, represented in
senate and assembly, do enact as follows:
SECTION 1. 16.295 (4) (a) (intro.) and 1. of the
statutes, as affected by 2023 Wisconsin Act 19, are con-
solidated, renumbered 16.295 (4) (a) and amended to
read:
16.295 (4) (a) Subject to sub. (3), the department
shall contract with the investment manager. The contract
shall establish the investment manager’s compensation,
including any management fee. Any management fee
may not exceed the following: 1. Annually, for no more
than 4 years, on an annual basis, 1 percent of the total
moneys designated under sub. (5) (b) 1. and 4., raised
under sub. (5) (b) 3., and reinvested under sub. (6) (c).
SECTION 2. 16.295 (4) (a) 2. of the statutes, as created
by 2023 Wisconsin Act 19, is repealed.
SECTION 3. 16.295 (5) (c) 3. of the statutes, as created
by 2023 Wisconsin Act 19, is amended to read:
16.295 (5) (c) 3. Of the moneys designated under par.
(b) 4., the investment manager shall commit all of those
moneys to at least 4 investments in venture capital funds
headquartered in this state within 24 months after the date
the investment manager receives the moneys.
SECTION 4. 16.295 (5) (d) 1. of the statutes, as
affected by 2023 Wisconsin Act 19, is amended to read:
16.295 (5) (d) 1. Make new investments in an amount
equal to the moneys it receives under par. (b) in one or
more businesses that are headquartered in this state and
employ at least 50 percent of their full−time employees,
including any subsidiary or other affiliated entity, in this
state, and invest at least one−half of those moneys in one
or more businesses that employ fewer than 150 full−time
employees, including any subsidiary or other affiliated
entity, when the venture capital fund first invests moneys
in the business under this section. The venture capital
fund’s contract with a business in which the venture capi-
tal fund makes an investment under this subdivision shall
require that, if within 3 years after the venture capital
fund makes that its initial investment, the business relo-
cates its headquarters outside of this state or fails to
employ at least 50 percent of its full−time employees,
including any subsidiary or other affiliated entity, in this
state, the business shall promptly pay to the venture capi-
tal fund an amount equal to the total amount of moneys
designated under par. (b) 1. and 4. that the venture capital
fund invested in the business. The venture capital fund
* Section 991.11, WISCONSIN STATUTES: Effective date of acts. “Every act and every portion of an act enacted by the legislature over the governor’s
partial veto which does not expressly prescribe the time when it takes effect shall take effect on the day after its date of publication.” − 2 −2023 Wisconsin Act 98 2023 Assembly Bill 890
shall reinvest those moneys in one or more businesses
that are eligible to receive an investment under this subdi-
vision, subject to the requirements of this section.
SECTION 5. 16.295 (5) (d) 4. of the statutes is
amended to read:
16.295 (5) (d) 4. At least match Ensure that any mon-
eys it receives under par. (b) and invests in a business is
accompanied with an investment in that business of mon-
eys the venture capital fund has raised from sources other
than the investment manager. The investment manager
venture capital fund shall ensure that, on average, for
every $1 a venture capital fund receives under par. (b) and
invests in a business, the venture capital fund invests $2
in that business from sources other than the investment
manager when measured across all individual businesses
receiving moneys under this paragraph, the venture capi-
tal fund at least matches any moneys it receives under par.
(b) with investments in such businesses the venture capi-
tal fund has raised from sources other than the investment
manager.
SECTION 6. 16.295 (6) (a) of the statutes is amended
to read:
16.295 (6) (a) The investment manager shall hold in
an escrow account at a bank with its headquarters in this
state its gross proceeds from all investments of the mon-
eys designated under sub. (5) (b) 1. and 4. until the invest-
ment manager satisfies allocates the proceeds as pro-
vided in par. (b) (c).
SECTION 7. 16.295 (6) (b) of the statutes is repealed.
SECTION 8. 16.295 (6) (c) of the statutes is repealed
and recreated to read:
16.295 (6) (c) Within 24 months after receiving any
proceeds from the investment of the moneys designated
under sub. (5) (b) 1. and 4., the investment manager shall
commit 90 percent of the gross proceeds to investments
in venture capital funds headquartered in this state.
SECTION 9. 16.295 (6) (d) of the statutes is created to
read:
16.295 (6) (d) 1. The investment manager shall
ensure that the gross proceeds resulting from investments
made with moneys designated under sub. (5) (b) 1. and
4. are reinvested so that when averaged across all venture
capital fund recipients, for every $1 of moneys reinvested
as set forth in par. (c), venture capital fund recipients must
receive $2 from sources other than the investment man-
ager. Any individual business that receives an invest-
ment made by the investment manager under par. (c) is
required to receive additional investments made by
sources other than the investment manager.
2. The investment manager shall contract with each
venture capital fund that receives moneys under par. (c).
Each contract shall require the venture capital fund to:
a. Make new investments in an amount equal to the
moneys it receives under par. (c) in one or more busi-
nesses that are headquartered in this state and employ at
least 50 percent of their full−time employees, including
any subsidiary or other affiliated entity, in this state, and
invest at least one−half of those moneys in one or more
businesses that employ fewer than 150 full−time employ-
ees, including any subsidiary or other affiliated entity,
when the venture capital fund makes its initial investment
of moneys in the business under this section. The venture
capital fund’s contract with a business in which the ven-
ture capital fund makes an investment under this subsec-
tion shall require that, if within 3 years after the venture
capital fund makes its initial investment, the business
relocates its headquarters outside of this state or fails to
employ at least 50 percent of its full−time employees,
including any subsidiary or other affiliated entity, in this
state, the business shall promptly pay to the venture capi-
tal fund an amount equal to the total amount of moneys
designated under par. (c) that the venture capital fund
invested in the business. The venture capital fund shall
reinvest those moneys in one or more businesses that are
eligible to receive an investment under this subdivision,
subject to the requirements of this section.
b. Invest all of the moneys it receives under par. (c)
in businesses in the agriculture, information technology,
engineered products, advanced manufacturing, medical
devices, or medical imaging industry and attempt to
ensure that all those moneys are invested in businesses
that are diverse with respect to geographic location
within this state.
c. Provide to the investment manager the information
necessary for the investment manager to complete the
annual report under sub. (7) (a) and the quarterly report
under sub. (7) (c).
d. Disclose to the investment manager and the depart-
ment any interest that the venture capital fund or an
owner, stockholder, partner, officer, director, member,
employee, or agent of the venture capital fund holds in a
business in which the venture capital fund invests or
intends to invest moneys received under par. (c).
SECTION 10. 16.295 (7) (a) 2. of the statutes is
amended to read:
16.295 (7) (a) 2. The investment manager’s internal
rate of return from investments under sub. subs. (5) (b)
and (6) (c).
SECTION 11. 16.295 (7) (a) 3. (intro.) of the statutes
is amended to read:
16.295 (7) (a) 3. (intro.) For each venture capital fund
that contracts with the investment manager under sub. (5)
(d) or (6) (d), all of the following:
SECTION 12. 16.295 (7) (a) 3. b. of the statutes is
amended to read:
16.295 (7) (a) 3. b. The amounts invested in the ven-
ture capital fund under sub. subs. (5) (b) and (6) (c).
SECTION 13. 16.295 (7) (a) 3. d. of the statutes is
amended to read:
16.295 (7) (a) 3. d. The venture capital fund’s average
internal rate of return on its investments of the moneys it
received under sub. (5) (b) or (6) (c). − 3 − 2023 Wisconsin Act 98 2023 Assembly Bill 890
SECTION 14. 16.295 (7) (a) 4. (intro.) of the statutes
is amended to read:
16.295 (7) (a) 4. (intro.) For each business in which
a venture capital fund held an investment of moneys the
venture capital fund received under sub. (5) (b) or (6) (c),
all of the following:
SECTION 15. 16.295 (7) (a) 4. f. of the statutes is
amended to read:
16.295 (7) (a) 4. f. A statement of the number of
employees the business employed when the venture capi-
tal fund first invested moneys in the business that the ven-
ture capital fund received under sub. (5) (b) or (6) (c), the
number of employees the business employed on the first
day of the investment manager’s fiscal year, and the num-
ber of employees the business employed on the last day
of the investment manager’s fiscal year.
SECTION 16. 16.295 (7) (c) 1. of the statutes is
amended to read:
16.295 (7) (c) 1. An identification of each venture
capital fund under contract with the investment manager
under sub. (5) (d) or (6) (d).
SECTION 17. 16.295 (7) (c) 2. of the statutes, as
affected by 2023 Wisconsin Act 19, is amended to read:
16.295 (7) (c) 2. An identification of each business
in which a venture capital fund held an investment of
moneys the venture capital fund received under sub. (5)
(b) or (6) (c) and a statement of the amount of the invest-
ment in each business that separately specifies the
amount of moneys designated under sub. (5) (b) 1. or 4.
that were contributed to the investment.
SECTION 18. 16.295 (7) (c) 3. of the statutes is
amended to read:
16.295 (7) (c) 3. A statement of the number of
employees the business employed when the venture capi-
tal fund first invested moneys in the business that the ven-
ture capital fund received under sub. (5) (b) or (6) (c) and
the number of employees the business employed at the
end of the quarter.
SECTION 19. 16.295 (8) (intro.) of the statutes is
amended to read:
16.295 (8) PROGRESS REPORTS. (intro.) In 2015 and,
2018, and 2024, no later than March 1, the department
shall submit reports to the joint committee on finance that
include all of the following: