August 2017 Special Session
2017 - 2018 LEGISLATURE
1An Act to renumber
196.192 (2) and 238.399 (4); to renumber and amend
30.195 (7), 61.57, 62.155, 196.192 (1), 196.192 (3) (a), 196.192 (3) (b) and 196.192 3
(4); to amend
30.123 (6m) (intro.), 66.1105 (2) (f) 1. (intro.), 66.1105 (4) (gm) 4. 4
c., 67.05 (10), 71.05 (6) (a) 15., 71.08 (1) (intro.), 71.10 (4) (i), 71.21 (4) (a), 71.26 5
(2) (a) 4., 71.30 (3) (f), 71.34 (1k) (g), 77.70, 84.0145 (2), 180.0622 (2), 183.0304 6
(1), 196.491 (1) (f), 238.12 (1), 238.399 (3) (a), 238.399 (5m), 281.346 (4) (c) 2m., 7
281.36 (3b) (b) and 281.36 (3m) (a); and to create
16.297, 20.395 (6) (ad), 20.445 8
(1) (bg), 20.505 (1) (fr), 20.835 (2) (cp), 20.866 (2) (uuz), 30.12 (1g) (m), 30.123 9
(6) (f), 30.19 (1m) (h), 30.195 (7) (b), 61.57 (1) and (2), 62.155 (1) and (2), 66.0203 10
(2) (bm), 66.0203 (10), 66.0215 (1m), 66.02162 (1m), 66.1105 (20), 67.05 (10m), 11
71.07 (3w) (bm) 5., 71.07 (3wm), 71.28 (3w) (bm) 5., 71.28 (3wm), 73.0306, 77.54 12
(65), 84.585, 106.271, 196.192 (1) (b), 196.192 (2m), 196.49 (5g) (ar) 3., 238.03 13
(5), 238.396, 238.399 (3) (e), 238.399 (4) (b), 238.399 (5) (f) and 281.36 (4m) of 14
the statutes; relating to: authorizing the creation of an electronics and
1information technology manufacturing zone and, in connection with that zone,
2authorizing certain tax benefits, creating special provisions for tax incremental
3districts, and creating exemptions from wetland and waterway permits and
4Public Service Commission certificates; making changes to the enterprise zone
5tax credit program; authorizing limited use of the design-build construction
6process; authorizing certain counties to issue debt backed by sales and use tax
7revenue; facilitating a worker training and employment program; making
8changes to town incorporation procedures; granting contingent highway
9bonding authority; and making appropriations.
Analysis by the Legislative Reference Bureau
The text of Engrossed August 2017 Special Session Assembly Bill 1 consists of
the following documents adopted in the assembly on August 17, 2017: Assembly
Substitute Amendment 1 as affected by Assembly Amendment 24. The text also
includes the August 15, 2017, chief clerk's correction to Assembly Substitute
Contents of Engrossed August 2017 Special Session Assembly Bill 1:
Electronics and information technology manufacturing zone
This substitute amendment authorizes the Wisconsin Economic Development
Corporation to create not more than one electronics and information technology
Under the substitute amendment, WEDC may certify certain businesses to
claim income and franchise tax credits if a business begins operations in the
electronics and information technology manufacturing zone. WEDC may certify
such a business for additional income and franchise tax credits, subject to certain
limitations, if the business makes a significant capital expenditure in the zone. If
the amount of the credit exceeds the taxpayer's tax liability, the taxpayer receives a
refund equal to the excess amount. The total amount of all tax credits WEDC may
certify under the substitute amendment is $2,850,000,000. WEDC may seek
repayment of tax credits under circumstances specified in the substitute
amendment, and WEDC must revoke a certification to claim tax credits if a certified
business does any of the following:
1. Supplies false or misleading information to obtain the tax credits.
2. Leaves the electronics and information technology manufacturing zone to
conduct substantially the same business outside the zone.
3. Ceases operations in the electronics and information technology
manufacturing zone and does not renew operation of the business or a similar
business in the zone within 12 months.
Sales and use tax exemption
The substitute amendment creates a sales and use tax exemption for the sale
of building materials, supplies, and equipment used to construct facilities located in
an electronics and information technology manufacturing zone if the capital
expenditures for constructing the facilities may be claimed as income and franchise
tax credits as certified by WEDC.
Tax incremental financing districts
The substitute amendment creates special provisions that apply to certain tax
incremental financing districts (TIDs) if WEDC creates an electronics and
information technology manufacturing zone, and a city or village creates a TID that
includes the zone.
Under the current tax incremental financing program, a city or village may
create a TID in part of its territory to foster development under certain conditions.
Currently, towns and counties also have a limited ability to create a TID under
certain limited circumstances. Before a city or village may create a TID, several
steps and plans are required. These steps and plans include public hearings on the
proposed TID within specified time frames, adoption of a resolution, submission of
documents to the Department of Revenue within specified time frames, and the
preparation and adoption by the local planning commission of a proposed project
plan for the TID.
Generally, if a resolution creating a TID is adopted between January 2 and
September 30, the TID is considered to have been created on the previous January
1, and if a resolution creating a TID is adopted between October 1 and December 31,
its creation date is considered to be the following January 1. In addition, forms
required by DOR must be submitted to the department by October 31 of the year in
which the TID is created.
Also under current law, once a TID has been created, DOR calculates the “tax
incremental base" value of the TID, which is the equalized value of all taxable
property within the TID at the time of its creation. If the development in the TID
increases the value of the property in the TID above the base value, a value
increment is created. That portion of taxes collected on the value increment in excess
of the base value is called a “tax increment" and is placed in a fund that may be used
only to pay back the project costs of the TID.
The project costs of a TID, which are initially incurred by the creating city or
village, include public works such as sewers, streets, and lighting systems; financing
costs; site preparation costs; and professional service costs. DOR authorizes the
allocation of the tax increments until the TID terminates or, generally, 20 years, 23
years, or 27 years after the TID is created, depending on the type of TID and the year
in which it was created. Also under current law, a city or village may not generally
make expenditures for project costs later than five years before the unextended
termination date of the TID. Under certain circumstances, the life of the TID, the
expenditure period, and the allocation period may be extended.
Generally, under current law, expenditures for project costs must be spent
within the boundaries of the TID, although limited exceptions allow expenditures to
be made within a one-half-mile radius of the TID's boundaries. Also, with regard
to TIDs created after September 30, 2004, the territory of which is mostly suitable
for industrial sites or mixed-use development, the TIDs must generally terminate
not later than 20 years after their creation.
Subject to a number of exceptions, under current law, the equalized value of
taxable property of a new or amended TID plus the value increment of all existing
TIDs may not exceed 12 percent of the total equalized value of taxable property in
the city or village.
Under this substitute amendment, for TIDs that are created in an area that
includes an electronics and information technology manufacturing zone (zone), a
number of exceptions apply to the normal provisions governing TIDs, including the
1. The TID that is created must be an industrial site or mixed-use TID.
2. If the resolution creating the TID is adopted between January 1 and
December 1, the creating city or village may decide if the TID is considered to have
been created on the January 1 of the year in which the resolution is adopted or on
the following January 1, and the forms required by DOR must be submitted before
December 31 of the year in which the resolution is adopted or between the following
April 1 and the following December 1, depending on the TID's creation date.
3. The 12 percent rule regarding the total equalized value for taxable property
in the city or village does not apply to the creation of the TID that includes a zone,
and if the creating city or village then creates another TID, the value increment of
the TID that includes the zone is not included in the calculation under the 12 percent
rule for that new TID.
4. Subject to a number of limitations, the city or village creating the TID may
incur expenditures for project costs for any territory that is located in the same
county in which the TID is located, provided that the expenditure benefits the TID,
and may incur project costs for fire stations, police and fire equipment, and general
government operations related to providing police and fire protection services.
5. Instead of limiting to 20 years the period during which DOR may allocate
positive tax increments, the allocation period is 30 years.
6. Instead of requiring the TID to terminate no later than 20 years after
creation, the TID must terminate within 30 years after it is created.
7. Instead of limiting the time period during which expenditures may be made
to no later than five years before the termination date of the TID, expenditures may
be made up to the termination date.
The substitute amendment authorizes a county in which a zone is located to
issue bonds whose principal and interest are paid only through sales and use tax
revenue. Currently, such county debt may be paid only by property tax revenue. Also
under current law, county sales tax revenue may be used only for the purpose of
directly reducing the county property tax levy.
Town incorporation as a city or village
Once residents of a town file with the circuit court, or the town clerk, a petition
to incorporate as a city or village, and once certain town boards initiate a procedure
to incorporate as a village, the substitute amendment prohibits any city or village
from annexing any of that town's territory until 30 days after the petition is
dismissed, all appeals of the petition dismissal are exhausted, or an incorporation
referendum is held in the town.
The substitute amendment also authorizes a town that is adjacent to a city or
village that contains a zone to incorporate as a city or village if the town approves
an incorporation referendum. None of the current law procedures, including
hearings, circuit court review, and incorporation review board analysis, apply to such
a town's incorporation procedure.
Environmental impact statements
Under current law, all state agencies are required to prepare environmental
impact statements for every recommendation or report on proposals for legislation
and other major actions significantly affecting the quality of the human
environment. A state agency is required to consider an environmental impact
statement in its decision-making process, but the statement has no regulatory
consequence. Current federal law under the National Environmental Policy Act also
requires federal agencies to prepare an environmental impact statement for any
major federal action, including for federal permits that are necessary for actions in
the state. Under the substitute amendment, a determination regarding the issuance
of any permit or approval for a new manufacturing facility within an electronics and
information technology manufacturing zone is not a major action for the purpose of
the environmental impact statement requirement.
Wetlands and waterway permits exemption
Under federal law, activities involving the discharge of dredged or fill material
into “navigable waters” must comply with certain guidelines contained in
regulations promulgated by the federal Environmental Protection Agency in order
for a discharge permit to be issued by the U.S. Army Corps of Engineers (ACE).
Before ACE may issue a permit, the Department of Natural Resources must
determine that the project complies with state water quality standards, including
those for wetlands (water quality certification). Federal law defines “navigable
waters” to be “the waters of the United States.” Generally, courts have interpreted
“the waters of the United States” to exclude nonnavigable, isolated, intrastate
waters (nonfederal wetlands).
Under current state law, subject to exceptions, no person may discharge
dredged material or fill material into a federal or nonfederal wetland unless the
discharge is authorized by a wetland general permit or individual permit or the
discharge is exempt from permitting requirements. Current law requires DNR to
issue wetland general permits for discharges of dredged or fill material into certain
federal and nonfederal wetlands. For a discharge into a wetland that is not
authorized under a wetland general permit, current law requires a person to apply
for and obtain a wetland individual permit. Before DNR may issue a wetland
individual permit, it must require the restoration, enhancement, creation, or
preservation of other wetlands to compensate for adverse impacts to a wetland
resulting from the discharge, also known as mitigation. Under current law, a
wetland general or individual permit issued by DNR constitutes water quality
Under this substitute amendment, a person may, without a permit, discharge
dredged material or fill material into a nonfederal wetland that is located in an
electronics and information technology manufacturing zone if the discharge is
related to the construction, access, or operation of a new manufacturing facility that
is also located in the zone. With respect to a federal wetland located in an electronics
and information technology manufacturing zone, the substitute amendment
provides that no state permit is required and that the state waives water quality
certification. Under the substitute amendment, a federal permit for such a discharge
is still required. The substitute amendment requires any adverse impacts to
functional values of federal or nonfederal wetlands in an electronics and information
technology manufacturing zone to be compensated at a ratio of two acres per each
acre impacted through the purchase of credits from a mitigation bank, participation
in the in lieu fee subprogram or escrow subprogram administered by DNR, or
completion of mitigation within this state. Under current law, the general minimum
ratio is 1.2 acres for each acre affected by the discharge. If compensation occurs
through participation in the in lieu fee subprogram, the substitute amendment
requires DNR to identify and consider mitigation that could be conducted within the
same watershed and authorizes locating mitigation outside the watershed only upon
agreement of DNR and the person exempt from wetland permitting.
Under current law, subject to exceptions, no person may do any of the following
without a permit issued by DNR: 1) deposit any material or place any structure upon
the bed of any navigable water where no bulkhead line has been established or
beyond a lawfully established bulkhead line; 2) construct or maintain a bridge or
construct, place, or maintain a culvert in, on, or over navigable waters; 3) construct,
dredge, or enlarge any artificial water body that connects with an existing navigable
waterway; 4) construct or enlarge any part of an artificial water body that is or will
be located within 500 feet of the ordinary high-water mark of, but that does not or
will not connect with, an existing navigable waterway; 5) grade or remove topsoil
from the bank of any navigable waterway where the area exposed by the grading or
removal will exceed 10,000 square feet; or 6) change the course of or straighten a
Under the substitute amendment, DNR generally may not require a permit for
any of these activities if they relate to the construction, access, or operation of a new
manufacturing facility located in an electronics and information technology
manufacturing zone. However, the substitute amendment provides that DNR may
require a permit for the construction or maintenance of bridges and the construction
or placement and maintenance of culverts in a zone if DNR determines that
conditions specific to the site require restrictions in order to prevent significant
adverse impacts to the public rights and interests, environmental pollution, or
material injury to the riparian rights of any riparian owner.
Department of Natural Resources oversight
Except as otherwise specifically provided, the substitute amendment requires
DNR to ensure that the conditions of applicable permits, licenses, and approvals
under DNR's jurisdiction are met for all activities related to the construction, access,
or operation of a new manufacturing facility within an electronics and information
technology manufacturing zone, including permits, licenses, and approvals required
under current law and any associated rules promulgated by DNR.