March 14, 1996 - Introduced by Representatives Brandemuehl, Freese, Johnsrud,
Goetsch, Green, Klusman, Gard, Lorge, Ziegelbauer, Musser, Ourada,
Hahn, Plombon
and Kreibich, cosponsored by Senators Schultz, Drzewiecki,
Rosenzweig, Buettner, Zien, Weeden
and Petak, by request of Governor
Tommy G. Thompson. Referred to Joint committee on Finance.
AB1033,2,2 1An Act to repeal 71.07 (2dj) (d), 71.07 (2ds) (c), 71.28 (1dj) (d), 71.28 (1ds) (c),
271.47 (1dj) (d), 71.47 (1ds) (c), 560.71 (1) (cm), 560.72 (4), 560.723, 560.725 (1)
3(a) to (h), 560.73 (1) (c) 6., 560.735 (3), 560.75 (3), 560.763 (1) (a), 560.763 (2),
4560.763 (3) and 560.79; to renumber and amend 560.725 (1) (intro.); to
5amend
20.835 (2) (cm), 20.835 (2) (cn), 71.07 (2dd) (a) 1., 71.07 (2dj) (am) 1.,
671.07 (2dj) (am) 3., 71.07 (2dj) (am) 8m., 71.07 (2dj) (h), 71.07 (2dL) (ar), 71.07
7(2ds) (h), 71.10 (4) (gd), 71.10 (4) (ge), 71.10 (4) (i), 71.28 (1dd) (a) 1., 71.28 (1dj)
8(am) 1., 71.28 (1dj) (am) 3., 71.28 (1dj) (am) 8m., 71.28 (1dj) (h), 71.28 (1dL) (ar),
971.28 (1ds) (h), 71.30 (3) (eb), 71.30 (3) (ec), 71.30 (3) (f), 71.47 (1dd) (a) 1., 71.47
10(1dj) (am) 1., 71.47 (1dj) (am) 3., 71.47 (1dj) (am) 8m., 71.47 (1dj) (h), 71.47 (1dL)
11(ar), 71.47 (1ds) (h), 71.49 (1) (eb), 71.49 (1) (ec), 71.49 (1) (f), 560.70 (4), 560.70
12(6), 560.71 (3) (a), 560.72 (2) (c), 560.72 (3), 560.725 (2), 560.725 (3), 560.73 (1)
13(f), 560.73 (1) (g), 560.73 (3), 560.735 (1) (a), 560.735 (1) (b), 560.735 (1) (c),
14560.735 (6) (a) (intro.), 560.735 (6) (a) 2., 560.735 (6) (a) 3., 560.735 (6) (b),
15560.74 (2), 560.745 (1) (a), 560.745 (1) (b), 560.745 (2) (a), 560.763 (title) and
16560.797 (1) (c); to repeal and recreate 560.71 (1) (e); and to create 71.07 (2dd)
17(f), 71.28 (1dd) (f), 71.47 (1dd) (f), 560.71 (1m) and 560.735 (6) (c) of the statutes;

1relating to: the development zone program, development zones tax credits and
2making an appropriation.
Analysis by the Legislative Reference Bureau
Development zone program changes
The department of development (DOD) administers the development zone
program. Under the program, DOD certifies for a tax credit a person conducting
economic activity in an area of the state that DOD has designated as a development
zone. In order to be designated as a development zone, an area must be nominated
by a local governing body, defined as the governing body of one or more cities, villages
or towns or the elected governing body of a federally recognized American Indian
tribe or band in this state. Two or more local governing bodies, or a local governing
body and the governing body of a county, may also nominate an area as a
development zone. The area must fulfill at least 2 of a number of such criteria as
having a high unemployment rate, low household incomes, falling property values
and permanent layoffs in its workforce. The area must also fulfill other criteria
related to its population size and the valuation of the property in the area in relation
to the valuation of the property of the larger community of which it is a part. DOD
must notify the joint committee on finance of every area that is nominated, and may
not designate an area without the committee's approval if the committee schedules
a meeting for review of the boundary of the area. DOD may designate up to 14
development zones in the state.
Two separate areas may be designated as one development zone, but each of the
2 areas must fulfill all of the criteria that a single area must fulfill. In a 1st class city,
however, up to 4 separate areas may be designated as one development zone.
Development zone designations are effective for 84 months, but the nominating
governing body may request up to 3 12-month extensions. Whenever DOD
designates a development zone, it places a limit on the total tax credits that may be
claimed by persons within the zone. The total tax credits that may be claimed by all
persons in all of the designated zones is $21,155,000. The governing body
nominating an area that is designated as a development zone must assist DOD in
administering the program, with respect to the development zone that it nominated,
and must appoint a 5-member advisory board to assist it in doing so and in
implementing the development zone plan that the governing body included with its
nomination application.
This bill makes a number of changes to the development zone program. The
definition of a local governing body is expanded to include the governing body of one
or more counties. The number of development zones that DOD may designate in the
state is increased to 20 over the life of the program, and the total tax credits that may
be claimed in all zones is increased to $33,155,000. The criteria that an area must
fulfill to be designated as a development zone are changed somewhat, although they
still relate to such factors as the unemployment rate, low household incomes, falling
property values and permanent layoffs in its workforce. An area must fulfill 3

instead of 2 of those criteria. DOD is no longer required to notify the joint committee
on finance of an area's nomination. Up to 8 separate areas in a 1st class city may be
designated as one development zone. The governing body of a county may nominate
up to 4 separate areas as one development zone. An area that is located in a
metropolitan statistical area must contain less than 10%, instead of 5%, of the
valuation of the property of the city, village or town in which it is located. If such an
area is located in a 1st class city, it may not have more than 10%, instead of 5%, of
the city's population. If such an area is located in a village, town or city that is not
a 1st class city, its population may not be less than 1,000, instead of 4,000, or more
than 10,000. An area that is not located in a metropolitan statistical area has no such
limitations under the bill. Under current law, such an area must have a population
that is at least 1,000 but not more than 5,000. The duration of a development zone
is changed from 84 months to 10 years, and a nominating governing body may
request one 5-year extension. A governing body is not required to appoint an
advisory board to assist it in administering the program or implementing its
development zone plan. DOD is no longer required to prepare an annual report on
the effectiveness of the development zone program.
Development zones tax credits
Under current law, the development zones jobs credit applies only to the first
year of an eligible employe's wages and is subject to a $600 maximum per employe.
This bill extends the credit to the 2nd year and increases the maximum to $1,200.
Under current law, employes must be certified within 30 days after they begin
employment if their employer is to be eligible for the development zones jobs credit.
This bill extends that deadline to 90 days.
Under current law, claimants who are located on an Indian reservation and are
American Indians, Indian businesses or tribal enterprises may receive a check from
this state if their development zones jobs credit or development zones sales tax credit
is more than the income tax or franchise tax that they otherwise owe and if the credit
is based on activity in an enterprise development zone. This bill discontinues the
requirement that the activity be in an enterprise development zone. The bill also
allows other claimants to carry forward these 2 credits.
The bill also makes technical and minor substantive changes to the
development zones tax credit.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB1033, s. 1 1Section 1. 20.835 (2) (cm) of the statutes is amended to read:
AB1033,3,32 20.835 (2) (cm) Development zones jobs credit. A sum sufficient to make the
3payments under ss. 71.07 (2dj) (d) (h), 71.28 (1dj) (d) (h) and 71.47 (1dj) (d) (h).
AB1033, s. 2
1Section 2. 20.835 (2) (cn) of the statutes is amended to read:
AB1033,4,32 20.835 (2) (cn) Development zones sales tax credit. A sum sufficient to make
3the payments under ss. 71.07 (2ds) (c) (h), 71.28 (1ds) (c) (h) and 71.47 (1ds) (c) (h).
AB1033, s. 3 4Section 3. 71.07 (2dd) (a) 1. of the statutes, as created by 1995 Wisconsin Act
527
, is amended to read:
AB1033,4,96 71.07 (2dd) (a) 1. "Day care center benefits" means benefits provided at a day
7care facility that is licensed under s. 48.65 or 48.69 and that for compensation
8provides care for at least 6 children or benefits provided at a facility for persons who
9are physically or mentally incapable of caring for themselves
.
AB1033, s. 4 10Section 4. 71.07 (2dd) (f) of the statutes is created to read:
AB1033,4,1311 71.07 (2dd) (f) No credit may be allowed under this subsection unless it is
12claimed within 2 years of the unextended date under s. 71.75 on which the tax return
13was due.
AB1033, s. 5 14Section 5. 71.07 (2dj) (am) 1. of the statutes is amended to read:
AB1033,4,1915 71.07 (2dj) (am) 1. Modify "member of a targeted group", as defined in section
1651 (d) of the internal revenue code as amended to December 31, 1995, to include
17persons unemployed as a result of a business action subject to s. 109.07 (1m) and
18persons specified under 29 USC 1651 (a) and to require a member of a targeted group
19to be a resident of this state.
AB1033, s. 6 20Section 6. 71.07 (2dj) (am) 3. of the statutes is amended to read:
AB1033,4,2321 71.07 (2dj) (am) 3. Modify the rule for certification under section 51 (d) (16) (A)
22of the internal revenue code to allow certification within the 30-day 90-day period
23beginning with the first day of employment of the employe by the claimant.
AB1033, s. 7 24Section 7. 71.07 (2dj) (am) 8m. of the statutes is amended to read:
AB1033,5,6
171.07 (2dj) (am) 8m. For each person, whether or not he or she is a member of
2a targeted group, who is determined by the department of development to be a
3resident of the development zone in which he or she is employed, calculate a credit
4equal to 10% of the wages earned by such person during the first year 1st and 2nd
5years
of the person's employment in the development zone, up to a maximum credit
6of $600 $1,200.
AB1033, s. 8 7Section 8. 71.07 (2dj) (d) of the statutes, as affected by 1995 Wisconsin Act 27,
8is repealed.
AB1033, s. 9 9Section 9. 71.07 (2dj) (h) of the statutes, as created by 1995 Wisconsin Act 27,
10is amended to read:
AB1033,5,1311 71.07 (2dj) (h) For claims based on activity in a zone under s. 560.797, the The
12rules under sub. (2di) (b) and (c) as they apply to the credit under that subsection
13apply to the credit under this subsection.
AB1033, s. 10 14Section 10. 71.07 (2dL) (ar) of the statutes is amended to read:
AB1033,5,2515 71.07 (2dL) (ar) If the credit under par. (a) is claimed for an amount expended
16to acquire property, the property must have been acquired by the claimant after the
17place where the property is located was designated a development zone under s.
18560.71 and the completed project must be placed in service after
the claimant is
19certified for tax benefits under s. 560.765 (3) and the property must not have been
20previously owned by the claimant or a related person during the period the
21development zone is in existence or during the 2 years prior to the designation of the
22development zone under s. 560.71. No credit is allowed for an amount expended to
23acquire property until the property, either in its original state as acquired by the
24claimant or as subsequently constructed, rehabilitated, remodeled or repaired, is
25placed in service.
AB1033, s. 11
1Section 11. 71.07 (2ds) (c) of the statutes, as affected by 1995 Wisconsin Act
227
, is repealed.
AB1033, s. 12 3Section 12. 71.07 (2ds) (h) of the statutes, as created by 1995 Wisconsin Act
427
, is amended to read:
AB1033,6,75 71.07 (2ds) (h) For claims based on activity in a zone under s. 560.797, the The
6rules under sub. (2di) (b) and (c) as they apply to the credit under that subsection
7apply to the credit under this subsection.
AB1033, s. 13 8Section 13. 71.10 (4) (gd) of the statutes, as created by 1995 Wisconsin Act 27,
9is amended to read:
AB1033,6,1110 71.10 (4) (gd) Development zones jobs credit under s. 71.07 (2dj) if the credit
11is based on activity in a zone under s. 560.797
.
AB1033, s. 14 12Section 14. 71.10 (4) (ge) of the statutes, as created by 1995 Wisconsin Act 27,
13is amended to read:
AB1033,6,1514 71.10 (4) (ge) Development zones sales tax credit under s. 71.07 (2ds) if the
15credit is based on activity in a zone under s. 560.797
.
AB1033, s. 15 16Section 15. 71.10 (4) (i) of the statutes, as affected by 1995 Wisconsin Act 27,
17is amended to read:
AB1033,6,2518 71.10 (4) (i) The total of claim of right credit under s. 71.07 (1), farmland
19preservation credit under subch. IX, homestead credit under subch. VIII, farmland
20tax relief credit under s. 71.07 (3m), farmers' drought property tax credit under s.
2171.07 (2fd), development zones sales tax credit under s. 71.07 (2ds) unless the credit
22is based on activity in a zone under s. 560.797, development zones jobs credit under
23s. 71.07 (2dj) unless the credit is based on activity in a zone under s. 560.797,
earned
24income tax credit under s. 71.07 (9e), estimated tax payments under s. 71.09, and
25taxes withheld under subch. X.
AB1033, s. 16
1Section 16. 71.28 (1dd) (a) 1. of the statutes, as created by 1995 Wisconsin Act
227
, is amended to read:
AB1033,7,63 71.28 (1dd) (a) 1. "Day care center benefits" means benefits provided at a day
4care facility that is licensed under s. 48.65 or 48.69 and that for compensation
5provides care for at least 6 children or benefits provided at a facility for persons who
6are physically or mentally incapable of caring for themselves
.
AB1033, s. 17 7Section 17. 71.28 (1dd) (f) of the statutes is created to read:
AB1033,7,108 71.28 (1dd) (f) No credit may be allowed under this subsection unless it is
9claimed within 2 years of the unextended date under s. 71.75 on which the tax return
10was due.
AB1033, s. 18 11Section 18. 71.28 (1dj) (am) 1. of the statutes is amended to read:
AB1033,7,1612 71.28 (1dj) (am) 1. Modify "member of a targeted group", as defined in section
1351 (d) of the internal revenue code as amended to December 31, 1995, to include
14persons unemployed as a result of a business action subject to s. 109.07 (1m) and
15persons specified under 29 USC 1651 (a) and to require a member of a targeted group
16to be a resident of this state.
AB1033, s. 19 17Section 19. 71.28 (1dj) (am) 3. of the statutes is amended to read:
AB1033,7,2018 71.28 (1dj) (am) 3. Modify the rule for certification under section 51 (d) (16) (A)
19of the internal revenue code to allow certification within the 30-day 90-day period
20beginning with the first day of employment of the employe by the claimant.
AB1033, s. 20 21Section 20. 71.28 (1dj) (am) 8m. of the statutes is amended to read:
AB1033,8,222 71.28 (1dj) (am) 8m. For each person, whether or not he or she is a member of
23a targeted group, who is determined by the department of development to be a
24resident of the development zone in which he or she is employed, calculate a credit
25equal to 10% of the wages earned by such person during the first year 1st and 2nd

1years
of the person's employment in the development zone, up to a maximum credit
2of $600 $1,200.
AB1033, s. 21 3Section 21. 71.28 (1dj) (d) of the statutes, as affected by 1995 Wisconsin Act
427
, is repealed.
AB1033, s. 22 5Section 22. 71.28 (1dj) (h) of the statutes, as created by 1995 Wisconsin Act
627
, is amended to read:
AB1033,8,97 71.28 (1dj) (h) For claims based on activity in a zone under s. 560.797, the The
8rules under sub. (1di) (b) and (c) as they apply to the credit under that subsection
9apply to the credit under this subsection.
AB1033, s. 23 10Section 23. 71.28 (1dL) (ar) of the statutes is amended to read:
AB1033,8,2111 71.28 (1dL) (ar) If the credit under par. (a) is claimed for an amount expended
12to acquire property, the property must have been acquired by the claimant after the
13place where the property is located was designated a development zone under s.
14560.71 and the completed project must be placed in service after
the claimant is
15certified for tax benefits under s. 560.765 (3) and the property must not have been
16previously owned by the claimant or a related person during the period the
17development zone is in existence or during the 2 years prior to the designation of the
18development zone under s. 560.71. No credit is allowed for an amount expended to
19acquire property until the property, either in its original state as acquired by the
20claimant or as subsequently constructed, rehabilitated, remodeled or repaired, is
21placed in service.
AB1033, s. 24 22Section 24. 71.28 (1ds) (c) of the statutes, as affected by 1995 Wisconsin Act
2327
, is repealed.
AB1033, s. 25 24Section 25. 71.28 (1ds) (h) of the statutes, as created by 1995 Wisconsin Act
2527
, is amended to read:
AB1033,9,3
171.28 (1ds) (h) For claims based on activity in a zone under s. 560.797, the The
2rules under sub. (1di) (b) and (c) as they apply to the credit under that subsection
3apply to the credit under this subsection.
AB1033, s. 26 4Section 26. 71.30 (3) (eb) of the statutes, as created by 1995 Wisconsin Act 27,
5is amended to read:
AB1033,9,76 71.30 (3) (eb) Development zones jobs credit under s. 71.28 (1dj) if the credit
7is based on activity in a zone under s. 560.797
.
AB1033, s. 27 8Section 27. 71.30 (3) (ec) of the statutes, as created by 1995 Wisconsin Act 27,
9is amended to read:
AB1033,9,1110 71.30 (3) (ec) Development zones sales tax credit under s. 71.28 (1ds) if the
11credit is based on activity in a zone under s. 560.797
.
AB1033, s. 28 12Section 28. 71.30 (3) (f) of the statutes, as affected by 1995 Wisconsin Act 27,
13is amended to read:
AB1033,9,1914 71.30 (3) (f) The total of farmers' drought property tax credit under s. 71.28
15(1fd), farmland preservation credit under subch. IX, farmland tax relief credit under
16s. 71.28 (2m), the development zones sales tax credit under s. 71.28 (1ds) unless the
17credit is based on activity in a zone under s. 560.797, the development zones job credit
18under s. 71.28 (1dj) unless the credit is based on activity in a zone under s. 560.797

19and estimated tax payments under s. 71.29.
AB1033, s. 29 20Section 29. 71.47 (1dd) (a) 1. of the statutes, as created by 1995 Wisconsin Act
2127
, is amended to read:
AB1033,9,2522 71.47 (1dd) (a) 1. "Day care center benefits" means benefits provided at a day
23care facility that is licensed under s. 48.65 or 48.69 and that for compensation
24provides care for at least 6 children or benefits provided at a facility for persons who
25are physically incapable of caring for themselves
.
AB1033, s. 30
1Section 30. 71.47 (1dd) (f) of the statutes is created to read:
AB1033,10,42 71.47 (1dd) (f) No credit may be allowed under this subsection unless it is
3claimed within 2 years of the unextended date under s. 71.75 on which the tax return
4was due.
AB1033, s. 31 5Section 31. 71.47 (1dj) (am) 1. of the statutes is amended to read:
AB1033,10,106 71.47 (1dj) (am) 1. Modify "member of a targeted group", as defined in section
751 (d) of the internal revenue code as amended to December 31, 1995, to include
8persons unemployed as a result of a business action subject to s. 109.07 (1m) and
9persons specified under 29 USC 1651 (a) and to require a member of a targeted group
10to be a resident of this state.
AB1033, s. 32 11Section 32. 71.47 (1dj) (am) 3. of the statutes is amended to read:
AB1033,10,1412 71.47 (1dj) (am) 3. Modify the rule for certification under section 51 (d) (16) (A)
13of the internal revenue code to allow certification within the 30-day 90-day period
14beginning with the first day of employment of the employe by the claimant.
AB1033, s. 33 15Section 33. 71.47 (1dj) (am) 8m. of the statutes is amended to read:
AB1033,10,2116 71.47 (1dj) (am) 8m. For each person, whether or not he or she is a member of
17a targeted group, who is determined by the department of development to be a
18resident of the development zone in which he or she is employed, calculate a credit
19equal to 10% of the wages earned by such person during the first year 1st and 2nd
20years
of the person's employment in the development zone, up to a maximum credit
21of $600 $1,200.
AB1033, s. 34 22Section 34. 71.47 (1dj) (d) of the statutes, as affected by 1995 Wisconsin Act
2327
, is repealed.
AB1033, s. 35 24Section 35. 71.47 (1dj) (h) of the statutes, as created by 1995 Wisconsin Act
2527
, is amended to read:
AB1033,11,3
171.47 (1dj) (h) For claims based on activity in a zone under s. 560.797, the The
2rules under sub. (1di) (b) and (c) as they apply to the credit under that subsection
3apply to the credit under this subsection.
AB1033, s. 36 4Section 36. 71.47 (1dL) (ar) of the statutes is amended to read:
AB1033,11,155 71.47 (1dL) (ar) If the credit under par. (a) is claimed for an amount expended
6to acquire property, the property must have been acquired by the claimant after the
7place where the property is located was designated a development zone under s.
8560.71 and the completed project must be placed in service after
the claimant is
9certified for tax benefits under s. 560.765 (3) and the property must not have been
10previously owned by the claimant or a related person during the period the
11development zone is in existence or during the 2 years prior to the designation of the
12development zone under s. 560.71. No credit is allowed for an amount expended to
13acquire property until the property, either in its original state as acquired by the
14claimant or as subsequently constructed, rehabilitated, remodeled or repaired, is
15placed in service.
AB1033, s. 37 16Section 37. 71.47 (1ds) (c) of the statutes, as affected by 1995 Wisconsin Act
1727
, is repealed.
AB1033, s. 38 18Section 38. 71.47 (1ds) (h) of the statutes, as created by 1995 Wisconsin Act
1927
, is amended to read:
AB1033,11,2220 71.47 (1ds) (h) For claims based on activity in a zone under s. 560.797, the The
21rules under sub. (1di) (b) and (c) as they apply to the credit under that subsection
22apply to the credit under this subsection.
AB1033, s. 39 23Section 39. 71.49 (1) (eb) of the statutes, as created by 1995 Wisconsin Act 27,
24is amended to read:
AB1033,12,2
171.49 (1) (eb) Development zones jobs credit under s. 71.47 (1dj) if the credit
2is based on activity in a zone under s. 560.797
.
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