Creation of the Wisconsin Next Generation Reserve Board and Wisconsin next generation reserve fund, authorizing the State of Wisconsin Investment Board to provide certain advice, services, and facilities to state agencies and others, requiring the exercise of rule-making authority, and making appropriations

1. One member, appointed by the governor for a four-year term, who has expertise in agriculture and who is recognized for outstanding knowledge and leadership in bioscience or bioscience research.

2. Three members, appointed by the governor for four-year terms, who serve in senior management positions at Wisconsin bioscience companies and have responsibilities related to the financing of their respective companies, two of whom are from companies that employ less than 50 employees, and one of whom is from a company that employs 50 or more employees.

3. Two members, appointed by the governor for four-year terms, who serve in senior management positions at Wisconsin companies that develop or manufacture medical devices and have responsibilities related to the financing of their respective companies, one of whom is from a company that employs less than 50 employees, and one of whom is from a company that employs 50 or more employees.

4. One member, appointed by the governor for a four-year term, who either has at least five years of experience directly investing in bioscience companies in Wisconsin, or represents a group of individual investors that has that experience as a group.

5. One member, appointed by the governor for a four-year term, who has at least three years of experience in the merger and acquisition of bioscience companies.

6. One member who is appointed by BioForward, Inc., a private bioscience association in Wisconsin, for a four-year term.

7. Two nonvoting members who have expertise in bioscience or bioscience research, one of whom is appointed by the Board of Regents of the University of Wisconsin System and serves at the pleasure of the Board of Regents, and one of whom is appointed by the Wisconsin Association of Independent Colleges and Universities and serves at the pleasure of the association.

8. The executive director of the Investment Board, or his or her designee, who serves as a nonvoting member.

The bill requires that the Reserve Board hire an executive director who has expertise in private equity investment. The executive director and all of the members of the Reserve Board are subject to state ethics laws.

The bill authorizes the Reserve Board to execute any contract necessary or convenient to the Reserve Board's exercise of its powers and duties, including a contract with the Investment Board for the Investment Board's advice and services related to the Reserve Board's grants, loans, and investments, discussed below, and for facilities provided by the Investment Board. Under the bill, the Investment Board may also make a loan to the Reserve Board for the Reserve Board's initial operations and administrative expenses.

Additional contracting authority for the Investment Board The bill further authorizes the Investment Board to provide advice, services, and facilities 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, services, or facilities the Investment Board provides.

Wisconsin Next Generation Reserve Fund The bill creates a nonlapsable fund to be known as the "Wisconsin next generation reserve fund" (fund). From the fund, the Reserve Board may make grants, loans, and investments, as set forth below. For short-term management, the fund is included in the state investment fund managed by the Investment Board.

In addition to any donations, gifts, or bequests made to the fund, any moneys transferred to the fund, any moneys deposited in the fund by the Reserve Board, and any income or interest earned by the fund, the fund consists of moneys generated from tax revenue collected from a specific class of companies, referred to in the bill as "qualifying companies." Under the bill, a qualifying company is identified by the company's principal business activity code under the North American Industry Classification System (NAICS). The bill directs the Department of Revenue (DOR) to determine in July 2012 the total amount of withholding taxes due and payable from qualifying companies for the period July 1, 2011 to June 30, 2012. Then, in each fiscal year, beginning with the fiscal year that begins on July 1, 2012, DOR must deposit in the fund an amount equal to 95 percent of the withholding taxes due and payable from qualifying companies that exceeds that total amount for that period.

DOR may not make any deposits into the fund on or after December 31, 2026. In addition, DOR may not deposit more than $50,000,000 into the fund in any fiscal year and may not deposit more than $500,000,000 in total into the fund.

Grants, loans, and investments Under the bill, the Reserve Board may make, from the fund, grants and loans to, and direct investments in, bioscience companies certified by the Reserve Board.

The Reserve Board may certify a bioscience company if the Reserve Board determines that the company meets all of the following conditions, in addition to any further conditions established by the Reserve Board:

1. The company is a qualifying company that does not operate a hospital.

2. The company's headquarters and principal business operations are located in Wisconsin.

3. The company, including any affiliate, employs at least 75 percent of its employees in Wisconsin.

4. The company is in need of capital.

5. The company is developing biotechnology or bioscience or bioscience research methods, as determined by the Reserve Board by rule, and demonstrates to the Reserve Board that the company has the potential to generate high levels of successful investment performance and increase employment in this state.

Before providing any moneys from the fund to a certified bioscience company in the form of a grant, loan, or investment, the Reserve Board must enter into a contract with the company that includes all of the following requirements:

1. The certified bioscience company must use a grant, loan, or investment from the fund for research and development related to biotechnology or bioscience or bioscience research methods.

2. The certified bioscience company must match the amount of any grant, loan, or investment from the fund with moneys the company has raised from other sources.

3. During the term of the contract, the certified bioscience company may not relocate its headquarters outside of Wisconsin without the Reserve Board's approval.

Under the bill, any moneys paid to the Reserve Board by a certified bioscience company must be deposited in the fund and may be re-used by the Reserve Board for continued grants, loans, and investments subject to the provisions of the bill.