AB741: Bill Text

Under current law, Commerce must do all of the following:

1. Submit a biennial report to the legislature on the performance and operations of Commerce in the preceding biennium.

2. Periodically prepare an inventory of existing entrepreneurial assistance programs in Wisconsin.

3. Prepare a report documenting the results of an annual survey of Wisconsin businesses concerning the formation of businesses and obstacles to the formation of businesses in Wisconsin.

4. Prepare employment impact estimates related to industrial development revenue bonding.

5. Submit a report to the State of Wisconsin Investment Board describing the types of investments in businesses in Wisconsin that will have the greatest likelihood of enhancing economic development in Wisconsin.

6. Submit a report to both the Department of Natural Resources (DNR) and the federal Environmental Protection Agency concerning the compliance of the state small business stationary source technical and environmental compliance assistance program with certain federal laws.

In addition, under current law, Commerce must submit reports to the legislature incorporating the following information concerning economic development programs administered by Commerce: job gains due to funds provided to Forward Wisconsin, Inc.; the effects of the State Main Street Program on business revitalization in commercial areas having historic significance; the effectiveness of the Brownfields Grant Program; the operation and effectiveness of the Business Employees' Skills Training Grant Program; the total amount of tax credits claimed under the Early State Seed Investment Credit and Angel Investment Credit programs; a description of the activities of the Business Development Assistance Center; a description of Commerce's activities and the results of Commerce's activities coordinating entrepreneurial assistance programs and intermediary assistance programs offered by state agencies; Commerce's technology-based economic development activities; and the disposition and repayment of moneys distributed under the seed capital fund.

The economic development reporting requirements under current law are not uniform: some reports are required annually, others biennially or periodically; some reports are due in January, others in March, September, October, and December.

The bill eliminates all but the following separate reports required of Commerce:

1. A biennial report to the legislature on the performance and operations of Commerce in the preceding biennium.

2. A report to the State of Wisconsin Investment Board identifying recommended investments to enhance economic development in the state.

3. A report on the effects of the State Main Street Program.

4. A report regarding the business development promotion activities conducted by Forward Wisconsin, Inc.

The bill requires Commerce to annually submit a comprehensive report assessing economic development programs administered by Commerce to the Joint Legislative Audit Committee and to the appropriate standing committees of the assembly and the senate. The bill also restores a requirement, repealed under 2007 Wisconsin Act 20 (the budget act), that Commerce evaluate certified capital investments made under Subchapter II of Chapter 560, 2005 statutes.

In addition, under the bill, each of the following entities must submit to the legislature a comprehensive annual report detailing its economic development activities within the preceding fiscal year: 1) the University of Wisconsin System; 2) DATCP; 3) DNR; 4) WHEDA; 5) the Department of Tourism; 6) the Technical College System; and 7) the Department of Transportation. The comprehensive reports of all eight entities are due to the legislature by October 1 of each year.

The state entity annual reports must include information about the number of grants and loans made by each entity in each year; the amount of each grant and loan; the name of the recipient of each grant and loan; and the sum total of all grants and loans received by each recipient. The seven enumerated state entities must collaborate with Commerce to make the reported information available to the public on the Internet.

Programmatic goals and benchmarks

The bill also requires Commerce and the seven enumerated state entities to establish specific goals for each of the economic development programs administered by each entity; quantifiable benchmarks for the program goals; and methods for evaluating the projected or anticipated results of the program. Commerce and the other seven entities must independently verify the accuracy of information reported by the recipient of an economic development grant or loan.

Commerce and the seven enumerated state entities must promulgate the following rules governing economic development grants and loans:

1. A requirement that the recipient of an economic development grant or loan of at least $100,000 submit to the administering state entity a verified statement signed by both an independent accountant licensed or certified by the Accounting Examining Board in the Department of Regulation and Licensing and the director or principal officer of the recipient. The rule must also require the recipient of such a grant or loan to make available for inspection the documents supporting the verified statement.

2. Policies and procedures for the administering state entity to recoup economic development grant or loan payments, withhold future grant or loan payments, and impose a fine or penalty upon the recipient of an economic development grant or loan or tax benefits which submits false or misleading information to the administering state entity has failed to comply with the requirements of a contract entered into with the administering state entity and which has failed to provide a satisfactory explanation to the administering state entity for the failure to comply.

Audit by the Legislative Audit Bureau

The bill requires the Legislative Audit Bureau to prepare a financial and program evaluation audit of state economic development programs administered by the eight state entities no later than July 1, 2012.

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:

AB741, s. 1 Section 1. 13.94 (1) (mm) of the statutes is created to read:

AB741,6,5 13.94 (1) (mm) No later than July 1, 2012, prepare a financial and performance evaluation audit of the economic development programs administered by the department of commerce, the University of Wisconsin System, the department of agriculture, trade and consumer protection, the department of natural resources, the Wisconsin Housing and Economic Development Authority, the department of tourism, the technical college system, and the department of transportation. In this paragraph, economic development program has the meaning given in s. 560.001 (1m). The legislative audit bureau shall file a copy of the report of the audit under this paragraph with the distributees specified in par. (b).

AB741, s. 2 Section 2. 20.002 (11) (d) 3. of the statutes is amended to read:

AB741,6,8 20.002 (11) (d) 3. The industrial building construction loan fund under s. 560.10, 2005 stats.

AB741, s. 3 Section 3. 20.115 (4) (c) of the statutes is amended to read:

AB741,6,12 20.115 (4) (c) Agricultural investment aids. Biennially, the amounts in the schedule for agricultural research and development grants under s. 93.46 (2) and (3) and sustainable agriculture grants under s. 93.47.

AB741, s. 4 Section 4. 20.115 (4) (r) of the statutes is amended to read:

AB741,6,17 20.115 (4) (r) Agricultural investment aids, agrichemical management fund. Biennially, from the agrichemical management fund, the amounts in the schedule for agricultural research and development grants under s. 93.46 (2) and (3) and sustainable agriculture grants under s. 93.47.

AB741, s. 5 Section 5. 20.143 (1) (fm) of the statutes is amended to read:

AB741,6,22 20.143 (1) (fm) Minority business projects; grants and loans. Biennially, the amounts in the schedule for grants and loans under ss. 560.038, 560.039, s. 560.82 and 560.837, grants and loans under s. 560.83, the grant under 1993 Wisconsin Act 110, section 3, and the loans under 1997 Wisconsin Act 9, section 3.

AB741, s. 6 Section 6. 20.143 (1) (ie) of the statutes, as affected by 2007 Wisconsin Act 20, is amended to read:

AB741,7,13 20.143 (1) (ie) Wisconsin development fund, repayments. All moneys received in repayment of grants or loans under s. 560.085 (4) (b), 1985 stats., s. 560.10, 2005 stats., s. 560.147, 2005 stats., s. 560.16, 1995 stats., s. 560.165, 1993 stats., s. 560.275 (2), 2005 stats., s. 560.62, 2005 stats., s. 560.63, 2005 stats., and s. 560.66, 2005 stats., subch. V of ch. 560, and 1989 Wisconsin Act 336, section 3015 (1m), 1989 Wisconsin Act 336, section 3015 (2m), 1989 Wisconsin Act 336, section 3015 (3gx), 1997 Wisconsin Act 27, section 9110 (7f), 1997 Wisconsin Act 310, section 2 (2d), 1999 Wisconsin Act 9, section 9110 (4), and 2007 Wisconsin Act 20, section 9108 (5x), to be used for grants and loans under s. 560.275 (2) and subch. V of ch. 560, for assistance under s. 560.06 (2), for the loan under 1999 Wisconsin Act 9, section 9110 (4), for the grant under 2001 Wisconsin Act 16, section 9110 (7g), for the grants under 2003 Wisconsin Act 33, section 9109 (1d) and (2q), and for reimbursements under s. 560.167.

AB741, s. 7 Section 7. 20.143 (1) (ig) of the statutes is amended to read:

AB741,7,18 20.143 (1) (ig) Gaming economic development and diversification; repayments. Biennially, the amounts in the schedule for grants and loans under ss. 560.137 (2) and s. 560.138. All moneys received in repayment of loans under ss. 560.137 (2), 2005 stats., and 560.138 shall be credited to this appropriation account.

AB741, s. 8 Section 8. 20.143 (1) (im) of the statutes is amended to read:

AB741,7,24 20.143 (1) (im) Minority business projects; repayments. All moneys received in repayment of grants or loans under s. 560.83 560.82 (1m) (b) and (c) and loans under 1997 Wisconsin Act 9, section 3, to be used for grants and loans under ss. s. 560.82, 560.83, and 560.837, the grant under 2001 Wisconsin Act 16, section 9110 (7g), and the loans under 1997 Wisconsin Act 9, section 3.

AB741, s. 9 Section 9. 20.143 (1) (kg) of the statutes is amended to read:

AB741,8,12 20.143 (1) (kg) American Indian economic liaison and gaming grants specialist and program marketing. The amounts in the schedule for the American Indian economic liaison program under s. 560.87, other than for grants under s. 560.87 (6), for the salary and fringe benefits of, and related supplies and services for, the gaming grants specialist for the programs program under ss. 560.137 and s. 560.138, and for marketing the programs program under ss. 560.137 and s. 560.138. From this appropriation, the department may expend in each fiscal year no more than $100,000 for marketing the programs program under ss. 560.137 and s. 560.138. All moneys transferred from the appropriation account under s. 20.505 (8) (hm) 6g. shall be credited to this appropriation account. Notwithstanding s. 20.001 (3) (a), the unencumbered balance on June 30 of each year shall revert to the appropriation account under s. 20.505 (8) (hm).

AB741, s. 10 Section 10. 20.143 (1) (kj) of the statutes is amended to read:

AB741,8,23 20.143 (1) (kj) Gaming economic development and diversification; grants and loans. Biennially, the amounts in the schedule for grants and loans under ss. 560.137 and s. 560.138, for the grants under s. 560.139 (1) (a) and, (2), and (3), and for the grants under 2001 Wisconsin Act 16, section 9110 (2k), (11pk), and (11zx). Of the amounts in the schedule, $500,000 shall be allocated in each fiscal year for the grants under s. 560.137 (3m) 560.139 (3). All moneys transferred from the appropriation account under s. 20.505 (8) (hm) 6j. shall be credited to this appropriation account. Notwithstanding s. 20.001 (3) (b), the unencumbered balance on June 30 of each odd-numbered year shall revert to the appropriation account under s. 20.505 (8) (hm).

AB741, s. 11 Section 11. 20.143 (1) (x) of the statutes is repealed.

AB741, s. 12 Section 12. 23.167 of the statutes is created to read:

AB741,9,5 23.167 Goals and accountability measures for economic development programs. (1) In this section, "economic development program" means a program or activity having the primary purpose of encouraging the establishment and growth of business in this state, including the creation and retention of jobs, and that satisfies all of the following:

AB741,9,7 (a) The program receives funding from the state or federal government that is allocated through an appropriation under ch. 20.

AB741,9,9 (b) The program provides financial assistance, tax benefits, or direct services to specific industries, businesses, local governments, or organizations.

AB741,9,12 (2) The department, in consultation with the department of commerce, shall do all of the following for each economic development program administered by the department:

AB741,9,14 (a) Establish clear and measurable goals for the program that are tied to statutory policy objectives.

AB741,9,16 (b) Establish at least one quantifiable benchmark for each program goal described in par. (a).

AB741,9,20 (c) Require that each recipient of a grant or loan under the program submit a report to the department. Each contract with a recipient of a grant or loan under the program shall specify the frequency and format of the report to be submitted to the department and the performance measures to be included in the report.

AB741,9,23 (d) Establish a method for evaluating the projected results of the program with actual outcomes as determined by evaluating the information described in pars. (a) and (b).

AB741,9,25 (e) Annually and independently verify, from a sample of grants and loans, the accuracy of the information required to be reported under par. (c).

AB741,10,8 (f) Establish by rule a requirement that the recipient of a grant or loan under the program of at least $100,000 submit to the department a verified statement signed by both an independent certified public accountant licensed or certified under ch. 442 and the director or principal officer of the recipient to attest to the accuracy of the verified statement, and make available for inspection the documents supporting the verified statement. The department shall include the requirement established by rule under this paragraph in the contract entered into by a grant or loan recipient.

AB741,10,13 (g) Establish by rule policies and procedures permitting the department to do all of the following if a recipient of a grant or loan or tax benefits under the program submits false or misleading information to the department or fails to comply with the terms of a contract entered into with the department under the program and fails to provide to the satisfaction of the department an explanation for the noncompliance:

AB741,10,14 1. Recoup payments made to the recipient.

AB741,10,15 2. Withhold payments to be made to the recipient.

AB741,10,16 3. Impose a fine or penalty on the recipient.

AB741, s. 13 Section 13. 23.169 of the statutes is created to read:

AB741,10,25 23.169 Economic development assistance reporting. Annually, no later than October 1, the department shall submit to the joint legislative audit committee and to the appropriate standing committees of the legislature under s. 13.172 (3) a comprehensive report assessing economic development programs, as defined in s. 23.167 (1), administered by the department. The report shall include all of the information required under s. 560.01 (2) (am). The department shall collaborate with the department of commerce to make readily accessible to the public on an Internet-based system the information required under this section.

AB741, s. 14 Section 14. 25.17 (1) (hm) of the statutes is amended to read:

AB741,11,3 25.17 (1) (hm) Industrial building construction loan fund (s. 560.10, 2005 stats.);

AB741, s. 15 Section 15. 36.09 (1) (am) of the statutes is created to read:

AB741,11,7 36.09 (1) (am) The board, in consultation with the department of commerce, shall do all of the following for each economic development program, as defined in s. 36.11 (29r) (a), administered by the board:

AB741,11,9 1. Establish clear and measurable goals for the program that are tied to statutory policy objectives.

AB741,11,11 2. Establish at least one quantifiable benchmark for each program goal described in subd. 1.

AB741,11,15 3. Require that each recipient of a grant or loan under the program submit a report to the board. Each contract with a recipient of a grant or loan under the program shall specify the frequency and format of the report to be submitted to the board and the performance measures to be included in the report.

AB741,11,18 4. Establish a method for evaluating the projected results of the program with actual outcomes as determined by evaluating the information described in subds. 1. and 2.

AB741,11,20 5. Annually and independently verify, from a sample of grants and loans, the accuracy of the information required to be reported under subd. 3.

AB741,12,2 6. Establish by rule a requirement that the recipient of a grant or loan under the program of at least $100,000 submit to the board a verified statement signed by both an independent certified public accountant licensed or certified under ch. 442 and the director or principal officer of the recipient to attest to the accuracy of the verified statement, and make available for inspection the documents supporting the verified statement. The board shall include the requirement established by rule under this subdivision in the contract entered into by a grant or loan recipient.

AB741,12,7 7. Establish by rule policies and procedures permitting the board to do all of the following if a recipient of a grant or loan or tax benefits under the program submits false or misleading information to the board or fails to comply with the terms of a contract entered into with the board under the program and fails to provide to the satisfaction of the board an explanation for the noncompliance:

AB741,12,8 a. Recoup payments made to the recipient.

AB741,12,9 b. Withhold payments to be made to the recipient.

AB741,12,10 c. Impose a fine or penalty on the recipient.

AB741, s. 16 Section 16. 36.11 (29r) of the statutes is created to read:

AB741,12,16 36.11 (29r) Economic development assistance reporting. (a) In this subsection, "economic development program" means a program or activity having the primary purpose of encouraging the establishment and growth of business in this state, including the creation and retention of jobs, and that satisfies all of the following:

AB741,12,18 1. The program receives funding from the state or federal government that is allocated through an appropriation under ch. 20.

AB741,12,20 2. The program provides financial assistance, tax benefits, or direct services to specific industries, businesses, local governments, or organizations.

AB741,13,2 (b) Annually, no later than October 1, the board shall submit to the joint legislative audit committee and to the appropriate standing committees of the legislature under s. 13.172 (3) a comprehensive report assessing economic development programs administered by the board. The report shall include all of the information required under s. 560.01 (2) (am). The board shall collaborate with the department of commerce to make readily accessible to the public on an Internet-based system the information required under this subsection.

AB741, s. 17 Section 17. 38.04 (1m) of the statutes is created to read:

AB741,13,8 38.04 (1m) Goals and accountability measures for economic development programs. (a) In this subsection, "economic development program" means a program or activity having the primary purpose of encouraging the establishment and growth of business in this state, including the creation and retention of jobs, and that satisfies all of the following:

AB741,13,10 1. The program receives funding from the state or federal government that is allocated through an appropriation under ch. 20.

AB741,13,12 2. The program provides financial assistance, tax benefits, or direct services to specific industries, businesses, local governments, or organizations.

AB741,13,14 (b) The board, in consultation with the department of commerce, shall do all of the following for each economic development program administered by the board: