Kickstart Wyoming-economic diversification.

ORIGINAL
Senate
ENGROSSED
File No
.
SF0118

ENROLLED ACT NO. 58,

SENATE

SIXTY-FOURTH LEGISLATURE OF THE STATE OF WYOMING
2018 Budget Session

AN ACT relating to economic development and diversification; providing for matching funds for the small business innovation research program; creating the Wyoming research and innovation program; creating the "startup:Wyoming" and "kickstart:Wyoming" programs; specifying criteria for newly created and existing programs and initiatives; creating subaccounts within the economic diversification account; authorizing use of funds for approved projects; modifying duties of the Wyoming business council to reflect investment authority in start-up entities and to administer other programs; modifying duties of other economic diversification entities; requiring reports; requiring and otherwise providing for rulemaking; providing appropriations and for continuous appropriations; modifying other appropriations; and providing for an effective date.

Be It Enacted by the Legislature of the State of Wyoming:

Section 1
.

W.S. 9
‑
12
‑
408 and 9
‑
12
‑
409 are created to read:

9
‑
12
‑
408
.

Wyoming research and innovation program fund created; authorized expenditures from the fund; rulemaking.

(a)

The council shall administer a Wyoming research and innovation program under which matching funds necessary to access federal research and development grant funds or other nonstate funds may be provided as specified in this section. To be eligible to receive funding under the program an entity shall present to the council its proposal to apply for or an existing application for an externally

funded grant specific to a priority
economic sector
identified in the approved twenty (20) year comprehensive
economic diversification strategy under W.S. 9
‑
12
‑
1402(a)(iv). The entity shall demonstrate that further research funding from nonstate funds is likely to be provided if funding is provided under this section.

(b)

The
Wyoming
business council, in consultation with the ENDOW executive council
and
the University of Wyoming shall promulgate rules necessary to carry out the provisions of this section. The rules shall include but not be limited to application procedures, eligibility requirements, the amount of funding which may be provided for any single project, provision for ensuring adequate consideration to the state in exchange for funding
any project which does not solely involve
a state agency or institution or political subdivision of the state
, recapture of funding if the recipient of funds bre
a
ches any agreement under the program and prioritization for funding requests.
In establishing provisions for adequate consideration to the state, the council may include, but is not limited to, assessment of the following:

(i)

The potential for the creation of a high
‑
growth company and number of new jobs created;

(ii)

The amount of
nonstate
or private financing leveraged

to be used by the business in Wyoming;

(iii)

Potential increase in Wyoming based patents;

(iv)

Increase in Wyoming higher education institutions' capacity to respond to new research developments.

9
‑
12
‑
409
.

Startup
‑
Wyoming investments.

(a)

The
Wyoming
business council
in
coordinat
ion with t
he economically needed diversity options for Wyoming (ENDOW) executive council
, shall prepare
a proposal under which the business council will invest
in
high

growth startup business entities which provide opportunity to advance the entrepreneurial ecosystem in Wyoming
in priority economic sectors identified in the approved twenty (20) year comprehensive economic diversification strategy under W.S. 9
‑
12
‑
1402(a)(iv).
The proposal shall be directed to investments for seed

stage development or growth

stage funding of
business entities.
The council shall include in the proposal:

(i)

A suggested entity or entities
, if any,
to oversee the council
'
s investment decisions under this section;

(ii)

The council
'
s determination of whether existing statutory authority is sufficient to implement the program, and if additional statutory authority is required suggested legislation providing that authority;

(iii)

Whether eligibility requirements
for investment,
beyond those specified in this section
,
should be
provided by law;

(iv)

Whether the council would propose additional rules to implement the program, together with a description of any such rules.

(b)

The proposal shall be submitted to the ENDOW
executive
council not later than Ju
ly
1, 2018. The ENDOW
executive
council shall include the proposal, together with
changes recommended by the ENDOW
executive
council, in the twenty (20) year comprehensive economic diversification strategy plan submitted pursuant to W.S. 9
‑
12
‑
1402(a)(iv)
.

Section 2
.

W.S. 9
‑
12
‑
105(a)
(i
),
(v), (vi), (viii)
and
by creating new subsection
s
(b)
through (
f
)
, 9
‑
12
‑
108 by creating a new subsection (c)

and 9
‑
12
‑
1404 are
amended to read:

9
‑
12
‑
105
.

Economic development and diversification services
; kick
‑
start Wyoming grants; small business innovation research matching program
.

(a)

It shall be the duty of the council to encourage, stimulate and support the development and expansion of the economy of the state. The council is charged with the following duties and responsibilities:

(i)

To see that there are prepared and carried out effective economic development
and diversification
marketing and promotional programs;

(v)

To encourage the coordination of the economic development
and diversification
e
fforts of public institutions, regions, communities and private industry and collect and maintain data on the development and utilization of economic development
and diversification
capabilities;

(vi)

To establish such offices within and without the state that are necessary to the expansion and development of industries and trade. The council shall establish economic development
and diversification
regions and offices within the state based upon socioeconomic and geographic similarities;

(viii)

To advise the University of Wyoming and the Wyoming community college commission in designating technical training and other educational programs in Wyoming
'
s community colleges and the University of Wyoming beneficial to economic development
and diversification
activities in this state.

(b)

The council
,

in consultation
with the coordinator of economic diversification
, shall
implement the
"
startup:Wyoming
"
program
in priority economic sectors identified in the approved twenty (20) year comprehensive economic diversification strategy under W.S. 9
‑
12
‑
1402(a)(iv).
The program shall:

(i)

Foster connectivity between entrepreneurs, investors
and
mentors
,
aligning local entities through coordinated points of contact in participating Wyoming communit
ies
. The efforts shall
include
methods of communication designed to allow interaction between stakeholders on a regular and consistent basis;

(ii)

Provide entrepreneurs with advanced resources to help their business succeed, including mentoring, marketing, legal and other business coaching services;

(iii)

In conjunction with the University of Wyoming, community colleges, localities, chambers of commerce, industrial authorities and other public and private groups
,
develop incubators, accelerators, co
‑
working spaces, makerspaces and other unique work spaces and equipment to foster entrepreneurialism.

(c)

The
council shall administer a
"
kickstart
:
Wyoming
"
program to provide funding to
early stage ventures
of W
yoming based
entrepreneurs.
Funding under this subsection
shall be
provided
upon
approval of the council
. The council shall adopt rules for funding under this subsection in consultation with the coordinator of economic diversification. Funding shall be
in amounts ranging from five thousand dollars ($5,000.00) to fifty thousand dollars ($50,000.00) and be provided under the following conditions
:

(
i
)

To
individuals who reside in
Wyoming and

to
business entities which
are, or agree in writing to be,
headquartered in Wyoming and organized under the laws of the state of Wyoming
and
which
:

(
A
)

Have
committed to maintaining a meaningful nexus to the state of Wyoming, including after commercialization of a
service,
product, concept, design or any oth
er marketable asset developed
with the assistance of
the
funds;

(
B
)

Pro
poses a
service,
product, concept, design or any other marketable asset which has a probability of providing an economic return to the state of Wyoming through creation of jobs, expanded tax base and diversification of the state
'
s economy;

(
C
)

Agree to provide a report to the council on the progress to commercialize
the

service,
product, concept, design or any other marketable asset developed with the assistance of
the
funds
.

(
ii
)

The recipient of funding m
eet
s
other requirements established by rule of the council to ensure
adequate consideration
for the amount of
the funding provided.
In establishing provisions for adequate consideration to the state, the council may include, but is not limited to, requiring a recipient to seek additional
nonstate
investment funding and specifying requirements for maintaining a nexus to the state.

(
d
)

The council shall a
dminister
a
small business innovation research matching program
in accordance with this subsection
. The program shall match federal funds approved for Wyoming based companies as provided in
this subsection
. The program shall be administered by the council in consultation with the University of Wyoming research office.
The following shall apply to the program under this subsection:

(i)

To be eligible to receive funding, an entity shall:

(A)

Be headquartered in Wyoming and organized under the laws of the state of Wyoming;

(B)

Maintain a meaningful nexus to the state of Wyoming
, including
for not less than three (3) years
after commercialization of a
service,
product, concept, design or any other marketable asset developed with the assistance of funds from th
e
program;

(C)

Have received funding under the federal small business innovation research and small business technology transfer programs;

(D)

Propose a
service,
product, concept, design or any other marketable asset which has a probability of providing an economic return to the state of
Wyoming through creation of jobs, expanded tax base and diversification of the state
'
s economy;

(E)

Agree to provide a report to the council on or before July 1 of each year in the following manner:

(I)

Prior to commercialization, the entity shall report on the progress of the entity to commercialize
the

service,
product, concept, design or any other marketable asset developed with the assistance of funds from this program;

(II)

If
the
entity commercializes a
service,
product, concept, design or any other marketable asset, and continues to market the product, concept or design or asset, the entity shall report for t
hree (3)
years on:

(
1
)

The number of jobs the entity has created;

(
2
)

A salary range per job;

(
3
)

The taxable assets of the entity;

(
4
)

All revenues from sales of the
service,
product, concept, design or any other marketable asset of the entity.

(F)

Comply with the requirements of rules
adopted
pursuant to this
sub
section.

(ii)

Matching funds shall be awarded to recipients as determined by the council in an amount not to exceed:

(
A
)

For a recipient of a phase I award, a match up to one hundred percent (100%) of the award, not to exceed one hundred thousand dollars ($100,000.00);

(
B
)

For a recipient of a phase II award, a match up to
one hundred percent (100%) of the award
, not to exceed two hundred fifty thousand dollars ($250,000.00).

(iii)

Matching funds under this subsection shall be awarded to the recipient as soon as practicable after approval of the matching fund application
;

(i
v
)

An entity shall repay all matching funds
provided
under this
sub
section
plus interest at the rate of four percent (4%) per annum compounded annually from the date the matching funds were granted
if:

(
A
)

The entity commercializes a
service,
product, concept, design or any other marketable asset developed with the assistance
of funds from this program; and

(
B
)

The entity fails to maintain a significant nexus with the state of Wyoming within
three
(
3
) years of commercializing a
service,
product, concept, design or any other marketable asset developed with the assistance of funds from this program and continues to market the
service,
product, concept, design or asset.

(v)

The council shall adopt rules for the program in consultation with the coordinator of economic
diversification.
The rules shall include but not be limited to:

(A)

Application procedures;

(B)

The number
of awards
and amount of funds available for award in any fiscal year;

(C)

Timing of issuance of funds awarded under the program;

(D)

Eligibility requirements;

(E)

Provi
sion
for repayment of matching funds
plus interest
as provided in this subsection;

(F)

Provi
sion
for
service,
product, concept, design or asset review and requirements under the program consistent with this subsection
;

(G)

Provisions to ensure adequate consideration
for the amount of
the funding provided. The council may include, but is not limited to, assessment of those items specified in W.S. 9
‑
12
‑
408(b)(i) through (iv), specifying the allowable use of funds, requiring a recipient to seek additional
nonstate
investment funding and requiring the recipient to conduct its research in Wyoming to the extent practical.

(
e
)

Not later than October 15, 201
8
and every October 15 thereafter, the council
s
hall report to the joint minerals, business and economic development interim committee concerning the program
s under subsections (c) and (d) of this section
. The report shall include:

(i)

A yearly and total summary of the number and amounts of matching funds awarded under e
ach
program;

(ii)

A description of an entity and a
service,
product, concept, design or any other marketable asset developed which was commercialized with the assistance of funds from th
ese
program
s
within the prior
three
(
3
) years;

(iii)

The realized economic impact of e
ach
program on the state, including jobs created, salary range per job created and potential impact to the local community.

(
f
)

As used in this section,
"
commercialization
"
means the creation by an entity of commercial processes, products and services derived in whole or in part from research undertaken with matching funds awarded under
subsection (c) or (d) of
this section, which results in realized revenues to the entity of at least three (3) times the matching funds awarded under this section.

9
‑
12
‑
108
.

Coordination of business permits.

(c)

The Wyoming business council shall prepare and present to the economically needed diversity options for Wyoming (ENDOW) executive council a proposal under which the business council, by exercising the duties and authority provided in this section, will assist businesses within the state
in priority economic sectors identified in the approved twenty (20) year comprehensive economic diversification strategy under W.S. 9
‑
12
‑
1402(a)(iv)
in obtaining necessary state, local and federal permits and licenses. The business council shall consult with businesses within Wyoming to identify specific federal, state and local regulations which unduly impede or delay
permitting and licensing in the state and shall identify those regulations recommended for review by the entity with jurisdiction to eliminate unnecessary provisions. The business council proposals shall be submitted to the ENDOW
executive
council not later than Ju
ly
1, 2018. The ENDOW
executive
council shall include recommendations for implementation of the business council proposals in its twenty (20) year comprehensive economic diversification strategy plan submitted pursuant to W.S. 9
‑
12
‑
1402(a)(iv) and in its first action plan under W.S. 9
‑
12
‑
1402(a)(v).

9
‑
12
‑
1404
.

Economic diversification account created; authorized expenditures.

(a)

There is created an economic diversification account. All monies in the account are continuously appropriated to the office of the governor to be used
solely
for the purposes of this article
and as otherwise specified by law
, including per diem, mileage and other administrative expenses of the ENDOW executive council. Notwithstanding W.S. 9
‑
2
‑
1008 and 9
‑
4
‑
207, funds in the account
or subaccounts of the account

shall not lapse at the end of the fiscal period. Interest earned on funds in the account shall be deposited to the account

or appropriate subaccount
.
Within the account shall be subaccounts. For accounting
and
investment purposes only all subaccounts shall be treated as separate account
s
. The s
ubaccounts
are
as follows:

(i)

The Wyoming research and innovation subaccount. Funds within this subaccount may be expended as requested by
the Wyoming
business council and approved by the governor or his designee to provide funding for agreements entered into pursuant to W.S.
9
‑
12
‑
408;

(
i
i)

The
"
startup:
Wyoming
"
subaccount.
Funds within this subaccount may be expended as requested by
the Wyoming
business council and approved by the governor or his designee to provide funding
p
ursuant to W.S. 9
‑
12
‑
105(b) through (f).

(b)

The governor may accept, and shall deposit to the account
, or to the appropriate subaccount within the account
, any gifts, contributions, donations, grants or federal funds specifically designated for purposes of this article
or other ENDOW related program
.

Section 3.

(a)

There is appropriated
from
the legislative stabilization reserve account
:

(i)

Five million dollars ($5,000,000.00) to the
"
startup:Wyoming
"
subaccount
;

(ii)

Six million dollars ($6,000,000.00) to the Wyoming research and innovation subaccount
;

(b)

Notwithstanding any other provision of law, funds appropriated under this section shall not be t
ransferred or expended for any
purpose other than as provided in W.S. 9
‑
12
‑
1404.

(c)

Upon the effective date of this act the appropriation contained in 2018 House Bill 0001, section 321(a)(iii) to the economic diversification account created by W.S. 9
‑
12
‑
1404(a) shall be reduced dollar for dollar by the appropriations in this section.

Section 4
.

This act is effective immediately upon completion of all acts necessary for a bill to become law as provided by Article 4, Section 8 of the Wyoming Constitution.

(END)

Speaker of the House

President of the Senate

Governor

TIME APPROVED: _________

DATE APPROVED: _________

I hereby certify that this act originated in the
Senate
.

Chief Clerk

1