Amendment SA4-AB655

2003 - 2004 LEGISLATURE

SENATE AMENDMENT 4, TO 2003 ASSEMBLY BILL 655

January 20, 2004 - Offered by Senators Hansen, Erpenbach, Chvala, Carpenter, Coggs, Breske, Robson and Lassa.

AB655-SA4,1,2 At the locations indicated, amend the bill, as shown by assembly substitute amendment 2, as follows:

AB655-SA4,1,12 1. Page 3, line 10: delete "and granting rule-making authority" and substitute "requiring state agencies, political subdivisions, and housing, redevelopment, and community development authorities, as well as subsidy recipients, to report on subsidies provided to businesses; requiring certain disclosures by business subsidy applicants; prohibiting business subsidies under certain circumstances; requiring the Legislative Audit Bureau to publish a report on business subsidies and to evaluate their effectiveness; defining a full-time job for purposes of development zone tax credits; altering eligibility requirements for development zone and technology zone tax credits; granting rule-making authority; and providing a penalty".

AB655-SA4,1,13 2. Page 3, line 11: before that line insert:

AB655-SA4,2,1 " Section 1b. 13.94 (12) of the statutes is created to read:

AB655-SA4,2,3 13.94 (12) Business subsidies report; compilation and summary. (a) In this subsection:

AB655-SA4,2,4 1. "Business" has the meaning given in s. 20.926 (2).

AB655-SA4,2,5 2. "Business subsidy" has the meaning given in s. 20.926 (3).

AB655-SA4,2,6 3. "Grantor" has the meaning given in s. 20.926 (4).

AB655-SA4,2,17 (b) Annually, by August 1, the legislative audit bureau shall publish a report that summarizes the business subsidies provided in the preceding year. The report shall include any information and analysis that the legislative audit bureau determines is relevant and will assist the legislature in evaluating the cost, effectiveness, and equity of investing public moneys in businesses and economic development. The report may include any information and data that is available to the legislative audit bureau and shall include the reports filed under s. 20.9265 (4) (b) and (c) and a compilation and summary of the reports filed under s. 20.9265 (4) (a). In each year after the year in which the legislative audit bureau receives the report under s. 66.1105 (13), the legislative audit bureau shall include a summary of that report in the report under this subsection.

AB655-SA4,2,20 (c) The portion of the report under this subsection that is the compilation and summary of the reports under s. 20.9265 (4) (a) shall include at least all of the following information:

AB655-SA4,2,21 1. The total amount of business subsidies awarded in each county of the state.

AB655-SA4,2,22 2. Distribution of business subsidies, categorized by subsidy amounts.

AB655-SA4,2,24 3. Distribution of business subsidy amounts, categorized by the length of time over which the subsidy is provided.

AB655-SA4,3,2 4. Distribution of business subsidies, categorized by type of subsidy, amount of subsidy, and public purpose.

AB655-SA4,3,4 5. The percentage and number of recipients that reached their goals by the times specified in their subsidy agreements under s. 20.9265 (2) (a) 6.

AB655-SA4,3,6 6. The percentage and number of recipients that reached their interim goals, if any.

AB655-SA4,3,8 7. The percentage and number of recipients that did not reach their goals by the times specified in their subsidy agreements under s. 20.9265 (2) (a) 6.

AB655-SA4,3,11 8. The total dollar amount of business subsidies provided to recipients that did not reach their goals by the times specified in their subsidy agreements under s. 20.9265 (2) (a) 6.

AB655-SA4,3,13 9. The number of jobs created as a result of business subsidies, shown in separate wage bands, as defined in s. 20.926 (10).

AB655-SA4,3,15 10. Fringe benefits paid or otherwise provided as a result of business subsidies, shown in separate wage bands, as defined in s. 20.926 (10).

AB655-SA4,3,21 (d) The compilation and summary of the reports under s. 20.9265 (4) (a) shall be presented in a manner that allows for comparisons across time periods and among grantors and, in addition, shall include sufficient information to enable comparisons between wages paid and fringe benefits provided by new jobs created as a result of business subsidies and wages paid and fringe benefits provided by comparable jobs in each area in which the new jobs are created.

AB655-SA4,4,3 (e) In addition to summarizing and compiling the reports specified in par. (b), the legislative audit bureau shall include in the report under this subsection a comparison and evaluation of the effectiveness of each business subsidy, or program under which business subsidies are provided, in achieving a public purpose and recommendations for improving the programs. The legislative audit bureau is not required to compare and evaluate under this paragraph the programs included in the reports filed under s. 20.9265 (4) (b) and (c).

AB655-SA4,4,7 (f) The legislative audit bureau may develop a report form for the manual or electronic submission of the report required under s. 20.9265 (4) (a) to ensure that the appropriate data is collected to enable the legislative audit bureau to satisfy the requirements under this subsection.

AB655-SA4,4,8 (g) The report under this subsection is open to public inspection.

AB655-SA4, s. 1c Section 1c. 20.001 (intro.) of the statutes is amended to read:

AB655-SA4,4,11 20.001 Definitions and abbreviations. (intro.) In Except as otherwise provided, in this chapter terms and abbreviations have the following meanings:

AB655-SA4, s. 1d Section 1d. 20.926 of the statutes is created to read:

AB655-SA4,4,14 20.926 Definitions for business subsidy awards and reports. In this section and s. 20.9265:

AB655-SA4,4,15 (1) "Agency" means a state agency or a local government agency.

AB655-SA4,4,16 (2) "Business" means any of the following:

AB655-SA4,4,17 (a) A person engaged in a business enterprise for profit in this state.

AB655-SA4,4,20 (b) An organization or enterprise operating not for profit in this state that has at least 100 full-time positions with a ratio of highest-paid to lowest-paid employee that exceeds 10 to one, determined on the basis of full-time equivalent positions.

AB655-SA4,4,22 (3) (a) Except as provided in par. (b), "business subsidy" means any of the following:

AB655-SA4,4,25 1. Public improvements that cost at least $25,000, that are made to buildings or lands owned by the state or a political subdivision, and that exclusively benefit a single business at the time that the improvements are made.

AB655-SA4,5,2 2. Any of the following that has a cost to an agency or the state of at least $25,000 and that is given to a business by an agency:

AB655-SA4,5,3 a. A grant.

AB655-SA4,5,4 b. A contribution of personal or real property or infrastructure.

AB655-SA4,5,7 2m. Any transfer of property to a business by an agency for at least $25,000 below the property's acquisition cost or fair market value at the time of the transfer, whichever is greater.

AB655-SA4,5,8 3. A loan of at least $75,000 that is given to a business by an agency.

AB655-SA4,5,9 (b) "Business subsidy" does not include any of the following:

AB655-SA4,5,11 1. Assistance for the sole purpose of providing job readiness and training services.

AB655-SA4,5,12 2. Housing assistance.

AB655-SA4,5,13 3. Energy conservation assistance.

AB655-SA4,5,16 4. A reduction or deferral of any tax or fee, including tax credits under ch. 71, general tax reductions, and tax reductions resulting from conformity with federal law.

AB655-SA4,5,18 5. General changes in the tax incremental financing laws and other general tax law changes.

AB655-SA4,5,19 6. Worker's compensation and unemployment compensation.

AB655-SA4,5,20 7. Payment to a person from an agency for the purchase of goods or services.

AB655-SA4,5,21 7m. Payments made under ch. 32.

AB655-SA4,5,24 8. Funds from bonds issued for the benefit of any institution, facility, or organization described in section 501 (c) (3) of the Internal Revenue Code that is exempt from federal taxation under section 501 (a) of the Internal Revenue Code.

AB655-SA4,5,25 9. Assistance for a consortium, as defined in s. 560.60 (3).

AB655-SA4,6,1 10. Any assistance provided by the University of Wisconsin System.

AB655-SA4,6,3 11. Assistance provided by the department of transportation, except for assistance provided under s. 84.185 or any similar programs.

AB655-SA4,6,5 12. Federal loan funds provided through the U.S. economic development administration.

AB655-SA4,6,7 13. Assistance provided by an agency under a statutory provision that identifies the specific recipient or the specific amount.

AB655-SA4,6,8 14. Loans and investments made by the investment board.

AB655-SA4,6,11 (3m) "Development zone" means a development zone under ss. 560.71 to 560.78, a development opportunity zone under s. 560.795, or an enterprise development zone under s. 560.797.

AB655-SA4,6,12 (4) "Grantor" means an agency that awards or provides a business subsidy.

AB655-SA4,6,16 (5) "Local government agency" means any political subdivision, housing authority created under ss. 66.1201 to 66.1211, redevelopment authority created under s. 66.1333, or community development authority created under s. 66.1335, or any entity created or authorized by any of them.

AB655-SA4,6,17 (6) "Political subdivision" means a city, village, town, or county.

AB655-SA4,6,19 (7) "Recipient" means a business that is benefited by a business subsidy under sub. (3) (a) 1. or that receives a business subsidy under sub. (3) (a) 2., 2m., or 3.

AB655-SA4,6,23 (8) "State agency" means any office, department, agency, institution of higher education, association, society, or other body in state government that is created or authorized to be created by the constitution or any law, including any authority created under ch. 231, 233, 234, or 237 but not including the legislature or the courts.

AB655-SA4,6,24 (9) "Technology zone" means a technology zone under s. 560.96.

AB655-SA4,7,6 (10) "Wage bands" means ranges of wages, with the lowest range beginning with the federal minimum wage and ending with the wage reflected by rounding the federal minimum wage up to the nearest whole dollar and subtracting one cent, and with each subsequent range beginning with the nearest whole dollar that is greater than the highest wage included within the previous range and ending with the wage reflected by adding 99 cents to that whole dollar.

AB655-SA4, s. 1e Section 1e. 20.9265 of the statutes is created to read:

AB655-SA4,7,17 20.9265 Business subsidies; awarding and reporting requirements. (1) Developing criteria; application requirements; public hearings; prohibitions. (a) Every grantor shall develop criteria for awarding business subsidies. The criteria shall set minimum requirements that a business must meet to be eligible for a business subsidy. The criteria shall provide that, if the public purpose for the subsidy is job creation, all jobs created as a result of the subsidy must provide compensation that is equal to at least 200% of the federal poverty line, as defined under 42 USC 9902 (2), for a family of 2 persons. Compensation may include health insurance premiums paid by the employer on behalf of the employee, for purposes of determining whether this requirement is met.

AB655-SA4,7,19 (b) No grantor may award a business subsidy until the grantor has developed the criteria required under par. (a).

AB655-SA4,8,2 (c) A copy of the criteria developed under par. (a) shall be submitted along with the first annual report filed by the grantor under sub. (4). A copy of any changes to the original set of criteria developed under par. (a) shall be submitted along with the first annual report that is filed by the grantor after the changes are made. If in awarding a business subsidy a grantor deviates from the criteria developed under par. (a), the grantor shall document the reason for the deviation in writing and submit a copy of that documentation along with the first annual report that is filed by the grantor after the deviation occurs.

AB655-SA4,8,9 (cm) 1. Every applicant for a business subsidy shall reveal in the application whether, in the preceding 5 years, the applicant has been determined by an administrative proceeding, civil action, criminal action, or other legal proceeding to have violated any federal or state environmental or labor law. For purposes of this paragraph, issuance of an order or acceptance of an agreement requiring corrective action or a stipulated fine, forfeiture, or other penalty is considered a determination of a violation, regardless of whether there is a finding or admission of liability.

AB655-SA4,8,12 2. For a violation described in subd. 1. that resulted in a finding, the applicant shall describe the finding and the penalty assessed and shall specify the entity that made the finding and the location of the public records relating to the matter.

AB655-SA4,8,18 3. For a violation described in subd. 1. that resulted in an agreement for corrective action or a stipulated fine, forfeiture, or other penalty, the applicant shall provide a summary description of the violation that led to the agreement or stipulation and, if the agreement or stipulation is a public record, a summary description of the agreement or stipulation and the location of the agreement or stipulation as a public record.

AB655-SA4,9,2 (d) 1. Except as provided in subds. 2. and 3., before awarding a business subsidy in the amount of $500,000 or greater to a subsidy applicant, a grantor shall hold at least one public meeting in the political subdivision in which the applicant proposes to conduct the project for which the subsidy will be used. The public meeting must be held at least 30 days before the final decision is made on whether to award the business subsidy to the applicant for the purpose of providing information, and receiving public comment, about the subsidy. The grantor shall give notice of the meeting in a manner that is likely to give notice in the political subdivision in which the applicant proposes to conduct the project for which the subsidy will be used.

AB655-SA4,9,5 2. The requirement under subd. 1. does not apply if, under another process that is separate and distinct from the process under this section, at least one public hearing has been held with respect to the project for which the subsidy will be used.

AB655-SA4,9,8 3. The requirement under subd. 1. does not apply if the secretary of administration grants a waiver of the requirement because there is insufficient time to hold a public meeting.

AB655-SA4,9,11 (e) A grantor may not award to a business subsidy applicant a business subsidy in the form of a grant, a loan, or a contribution of personal or real property if any of the following applies:

AB655-SA4,9,16 1. The business subsidy will be used to subsidize any portion of the cost of moving the applicant's business operations from one political subdivision in this state to another political subdivision in this state. This subdivision does not apply if the governing body of the political subdivision from which the applicant intends to move consents to the move in writing, which may be by resolution.

AB655-SA4,9,20 2. The business subsidy will be used to subsidize any portion of the cost of moving the applicant's business operations to this state from a state with which this state has entered into an agreement or compact related to businesses moving from one state to another, except as allowed under the terms of the agreement or compact.

AB655-SA4,9,24 (f) 1. Except as provided in subd. 2., a recipient may not apply for another business subsidy, and a grantor may not award another business subsidy to a recipient, if the recipient fails to submit a report required under sub. (3) (a) within 6 months of the time required for submitting such report under sub. (3) (b).

AB655-SA4,10,3 2. A recipient that submits a report more than 6 months after the time required under sub. (3) (b) may apply for, and may be awarded, another business subsidy only upon the approval of the secretary of administration.

AB655-SA4,10,6 (2) Subsidy agreement. (a) Whenever a grantor provides a business subsidy, the recipient shall enter into a subsidy agreement with the grantor. The subsidy agreement shall include all of the following:

AB655-SA4,10,8 1. A description of the subsidy, including the amount, or fair market value, and type of subsidy.