The state Legislature has passed several bills championed by the Wisconsin Technology Council that would change state laws surrounding startup funding and oversight.
“These bills are examples of how bipartisan review can help to resolve often-complicated issues while helping to improve the Wisconsin economy,” said Tom Still, president of the Tech Council.
One bill would alter the state’s investor tax credits law to allow insurance companies to benefit from the program. According to a release from the Tech Council, the bill would clarify language in the statute, clearing up an issue that was introduced when the program was expanded a decade ago.
The bipartisan Act 255 law took effect in 2005, creating the state’s Qualified New Business Venture Program, which is overseen by WEDC. Investors in qualified QNBV companies can receive a 25 percent tax credit on their investment, capped at $3 million in credits per company for $12 million in eligible investments.
When the program first got its start, credits could be applied to corporate income taxes, individual income taxes and trust income taxes. These various tax liabilities are based in three different sections of state law, with the same language in each section on how the credits can be applied.
When the program was expanded in 2009, lawmakers added gross premium taxes to the eligibility list. These taxes are applied on insurance premiums, similar to a sales tax.
According to a release, language from separate 2009 bills didn’t line up, leading to uncertainty about how the investor tax credits could be applied. The Tech Council says the newly passed bill would “tie up the loose ends” without any adverse fiscal impact.
Lead sponsors for the Senate version of the bill were Sens. Howard Marklein, R-Spring Green, and Lena Taylor, D-Milwaukee. The Assembly version was sponsored by Reps. Shannon Zimmerman, R-River Falls, and Jason Fields, D-Milwaukee.
Another bill recently sent to Gov. Tony Evers’ desk would eliminate a review period for certain faculty-led startups spun out of the UW System. Under current law, contracts exceeding $250,000 over two years that are tied to a faculty or staff entrepreneur must be reviewed by the UW Board of Regents over a 45-day period.
The Tech Council notes this period is required in cases where the contract was previously reviewed, claiming it “slows down the process without adding value,” potentially hampering startup growth. The recently passed bill would require instead that the UW System enact management plans for financial interests.
The legislation was dedicated to the late Dr. Mark Cook, a UW-Madison faculty member who launched multiple tech companies during his time in Madison. The bill was originally conceived of by PROFS, a nonprofit group of UW-Madison faculty.
The “Mark Cook Bill” was sponsored in the Assembly by Reps. David Murphy, R-Greenvillle, and Shelia Stubbs, D-Madison. Lead sponsors in the Senate were Sens. Dan Feyen, R-Fond du Lac, and Fred Risser, D-Madison.
See more on the investor tax credit bill: http://docs.legis.wisconsin.gov/2019/proposals/sb208
See more on the UW System startups bill: http://docs.legis.wisconsin.gov/2019/proposals/sb42