LRB-0166/2
GMM:kaf:jlb
1997 - 1998 LEGISLATURE
January 15, 1997 - Introduced by Senators Chvala, Burke, Risser, C. Potter and
Clausing, cosponsored by Representatives Baldwin, R. Young and Black.
Referred to Committee on Labor, Transportation and Financial Institutions.
SB10,1,8
1An Act to amend 66.521 (4m) (title), 66.521 (4m) (a), 66.521 (4m) (b), 66.521 (10)
2(b), 234.65 (3) (a) 2., 560.034 (1), 560.034 (2), 560.034 (3) and 560.034 (5) (a); and
3to create 13.94 (1) (dp), 66.521 (4m) (a) 3., 560.033, 560.16 (3) (g) and 560.605
4(1) (em) of the statutes;
relating to: rules of conduct for a business receiving
5business assistance from the department of commerce and a business entering
6into an industrial development revenue bonding agreement with a
7municipality, the employment impact estimates required to be submitted by
8such a business and providing penalties.
Analysis by the Legislative Reference Bureau
Under current law, the department of commerce (DOC) makes grants and loans
to businesses for various purposes including employe ownership assistance studies,
technology development, research for potential commercial applications, customized
labor training, recycling and major economic development. Currently, cities, villages
and towns (municipalities) may enter into revenue agreements with businesses
under which the municipality issues industrial development revenue (IDR) bonds to
fund the construction by those businesses of industrial projects.
This bill requires any business that receives $25,000 or more in grants, loans
or subsidies from DOC or that receives $25,000 or more in federal tax exemptions as
a result of the issuance of IDR bonds (business assistance) to comply with the
following rules of conduct:
1. To pay every employe of the business employed in this state not less than an
annual wage of $16,000 or its hourly equivalent, with that amount to be adjusted
annually by DOC in proportion to any change in the federal poverty line.
2. To provide health insurance for every employe of the business employed in
this state and to cover the cost of premiums for that insurance, with the employer to
be granted a credit for the cost of health care provided of up to $1 per hour against
the wage required to be paid to an employe.
3. Not to eliminate any employment positions in this state when the employer
moves any part of its operations to another state and not to cease all operations in
this state and move to another state.
Any business receiving $25,000 or more in business assistance that fails to
comply with those rules of conduct is subject to the following penalties:
1. Immediate rescission of all business assistance that was provided to the
business, with the business to repay immediately any business assistance received,
plus a 10% penalty and interest on the business assistance at 18%.
2. If the failure to comply occurs within 10 years after the business enters into
a revenue agreement for the issuance of IDR bonds, a penalty equal to the federal tax
exemption received by the business as a result of the revenue agreement, plus an
additional 10% penalty and interest on the federal tax exemption received at 18%.
3. Ineligibility for any further business assistance for 10 years.
Under current law, a business that enters into a revenue agreement for the
issuance of IDR bonds by a municipality must give notice to DOC specifying the
number of jobs that the business expects to be eliminated, created or maintained on
the project site and elsewhere in the state as a result of the project (employment
impact estimate). DOC then must make its own employment impact estimate and
issue that estimate to the municipality before the municipality may issue the IDR
bonds. The business then must submit to DOC, within 12 months after the project
is completed or 2 years after the loan or IDR bonds are issued, whichever is sooner,
an employment impact statement of the jobs actually eliminated, created or
maintained as a result of the project.
This bill requires employment impact estimates and statements to be prepared
not only in connection with the issuance of IDR bonds, but also when DOC provides
a grant, loan or subsidy under any of the programs mentioned above. The bill also
requires an employment impact estimate or statement to include not only the
number of jobs, but also the types of jobs, with wage rates and benefits, that are
estimated to be or have been eliminated, maintained or created as a result of any
business assistance provided by DOC or a municipality. Finally, the bill requires a
business to submit employment impact statements to DOC annually for the duration
of the business assistance and for 5 years after the end of the business assistance.
For further information see the state and local 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:
SB10, s. 1
1Section
1. 13.94 (1) (dp) of the statutes is created to read:
SB10,3,32
13.94
(1) (dp) Annually, perform a performance audit of the implementation of
3s. 560.033 by the department of commerce.
SB10, s. 2
4Section
2. 66.521 (4m) (title) of the statutes is amended to read:
SB10,3,65
66.521
(4m) (title)
Job protection Employment impact estimates and rules of
6conduct compliance.
SB10, s. 3
7Section
3. 66.521 (4m) (a) of the statutes is amended to read:
SB10,3,98
66.521
(4m) (a) A municipality may
not enter into a revenue agreement with
9any person
unless only if all of the following conditions are met:
SB10,3,1410
1. The person, at least 30 days prior to entering into the revenue agreement,
11has given a notice of intent to enter into the agreement
, on a form prescribed under
12s. 560.034 (1), to the department of commerce and to any collective bargaining agent
13in this state with whom the person has a collective bargaining agreement; and as
14required under s. 560.033 (3) (a) 1.
SB10,3,2015
2. The municipality has received an estimate issued under s. 560.034 (5) (a)
,
16and the department of commerce has estimated whether the project which the
17municipality would finance under the revenue agreement is expected to eliminate,
18create or maintain jobs on the project site and elsewhere in this state and the net
19number of jobs expected to be eliminated, created or maintained as a result of the
20project.
SB10, s. 4
21Section
4. 66.521 (4m) (a) 3. of the statutes is created to read:
SB10,4,3
166.521
(4m) (a) 3. If the amount of federal tax exemption that the person
2receives as a result of the revenue agreement equals $25,000 or more, the person
3agrees to comply with the rules of conduct specified in s. 560.033 (2).
SB10, s. 5
4Section
5. 66.521 (4m) (b) of the statutes is amended to read:
SB10,4,125
66.521
(4m) (b) Any revenue agreement which an eligible participant enters
6into with a municipality to finance a project shall require the eligible participant to
7submit to the department of commerce
within 12 months after the project is
8completed or 2 years after a revenue bond is issued to finance the project, whichever
9is sooner annually for the duration of the project and for 5 years after the completion
10of the project, on a form prescribed under s. 560.034 (1), the
net number
and type of
11jobs
, with the wage rates and benefits for those jobs, eliminated, created or
12maintained on the project site and elsewhere in this state as a result of the project.
SB10, s. 6
13Section
6. 66.521 (10) (b) of the statutes is amended to read:
SB10,5,414
66.521
(10) (b) Upon the adoption of an initial resolution under this section,
15public notice of such adoption shall be given to the electors of the municipality prior
16to the issuance of the bonds therein described, by publication as a class 1 notice,
17under ch. 985. The notice need not set forth the full contents of the resolution, but
18shall state the maximum amount of the bonds; the name of the eligible participant;
19the purpose of the bonds; the
net number
and types of jobs
, with the wage rates and
20benefits for those jobs, which the project which the municipality would finance with
21the bond issue is expected to eliminate, create or maintain on the project site and
22elsewhere in this state which is required to be shown by the proposed eligible
23participant on the form submitted under
sub. (4m) (a) 1. s. 560.033 (3) (a) 1.; and that
24the resolution was adopted under this section. A form of the public notice shall be
25attached to the initial resolution. Prior to adoption of the initial resolution, the open
1meeting notice given to members of the public under s. 19.84 shall indicate that
2information with respect to the job impact of the project will be available at the time
3of consideration of the initial resolution. No other public notice of the authorization,
4issuance or sale of bonds under this section is required.
SB10, s. 7
5Section
7. 234.65 (3) (a) 2. of the statutes is amended to read:
SB10,5,116
234.65
(3) (a) 2. The authority has received an estimate issued under s. 560.034
7(5) (b), and the department of commerce has estimated
whether the number and
8types of jobs, with the wage rates and benefits for those jobs, that the project which
9the authority would finance under the loan is expected to eliminate, create or
10maintain
jobs on the project site and elsewhere in this state
and the net number of
11jobs expected to be eliminated, created or maintained as a result of the project.
SB10, s. 8
12Section
8. 560.033 of the statutes is created to read:
SB10,5,14
13560.033 Business assistance recipient rules of conduct. (1) Definitions. 14In this section:
SB10,5,1615
(a) "Business" means any person engaged in any activity or enterprise for profit
16employing one or more persons in this state.
SB10,5,1917
(b) "Business assistance" means amounts received under a revenue agreement
18entered into by a municipality under s. 66.521 or a grant or loan provided by the
19department under s. 560.16, 560.62, 560.625, 560.63, 560.65 or 560.66.
SB10,5,2220
(c) "Poverty line" means the nonfarm federal poverty line for the continental
21United States, as defined and revised annually by the federal department of labor
22under
42 USC 9902 (2).
SB10,5,25
23(2) Rules of conduct. Any business that receives $25,000 or more in business
24assistance shall agree, as a condition of receiving that business assistance, to comply
25with the following rules of conduct:
SB10,6,8
1(a) To pay every employe of the business employed in this state not less than
2an annual wage of $16,000 or an amount determined by the department under this
3paragraph or the hourly equivalent of that annual wage. The department shall
4adjust that annual wage every year within 30 days after the federal department of
5labor publishes its annual revision of the poverty line. The adjustment shall be in
6proportion to any change in the poverty line since the effective date of the amount
7established under this paragraph or the effective date of the last adjustment of that
8amount under this paragraph.
SB10,6,129
(b) To provide health insurance for every employe of the business employed in
10this state and to cover the cost of premiums for that insurance. The department shall
11grant a credit of up to $1 per hour against the wage required to be paid under par.
12(a) for the cost of health insurance provided under this paragraph.
SB10,6,1413
(c) 1. Not to eliminate any employment positions in this state when the
14employer moves any part of its operations to a site in another state.
SB10,6,1615
2. Not to cease all operations in this state and move those operations to another
16state.
SB10,6,19
17(3) Employment impact estimates. (a) The department or a municipality may
18provide business assistance to a business only if all of the following conditions are
19met:
SB10,6,2420
1. The business, at least 30 days before entering into the agreement governing
21the receipt of the business assistance, has given a notice of intent to enter into the
22agreement, on a form prescribed under s. 560.034 (1), to the department and to any
23collective bargaining agent in this state with whom the business has a collective
24bargaining agreement.
SB10,7,4
12. The subunit of the department or the municipality providing the business
2assistance has received an estimate issued under s. 560.034 (5). A business that
3receives business assistance is not required to satisfy an estimate made under this
4subdivision.
SB10,7,115
(b) A business assistance agreement that a business enters into with the
6department or a municipality to finance a project shall require that the business
7submit to the department annually for the duration of the business assistance and
8for 5 years after the end of the business assistance, on a form prescribed under s.
9560.034 (1), the number and types of jobs, with the wage rates and benefits for those
10jobs, eliminated, created or maintained on the project site and elsewhere in this state
11as a result of the project.
SB10,7,20
12(4) Enforcement and administration. (a) The subunit of the department of
13commerce or the municipality providing business assistance to a business shall
14notify the department of the amount of business assistance provided to the business
15and shall provide to the department any other information that is necessary to
16implement this section. The department shall monitor all businesses receiving
17business assistance for compliance with sub. (2), shall determine whether any
18business receiving business assistance is not in compliance with sub. (2) and shall
19assess and collect any penalties imposed under sub. (5) according to the following
20procedure:
SB10,7,2321
1. The department shall notify the business and the subunit of the department
22or the municipality providing the business assistance that the business is in
23noncompliance with sub. (2) and of the penalty assessed under sub. (5).
SB10,8,3
12. The business may, within 30 days after the date of the notice, appeal in
2writing to the secretary and the secretary shall enter his or her final decision within
330 days after receiving the appeal.
SB10,8,54
3. The business may, within 30 days after the secretary's decision, request a
5contested case hearing under s. 227.42 from the department.
SB10,8,86
(b) The department shall contract with the legislative audit bureau to conduct
7an annual performance audit of the implementation of this section. The legislative
8audit bureau shall file the audit in the manner described in s. 13.94 (1) (b).
SB10,8,11
9(5) Penalties. Any business that is subject to the rules of conduct under sub.
10(2) and that fails to comply with any of those rules is subject to all of the following
11penalties:
SB10,8,1612
(a) Immediate rescission of all business assistance that was provided to the
13business, with the business to repay immediately all business assistance that was
14received by the business, plus a penalty equal to 10% of that business assistance and
15interest on that business assistance at the rate of 18% per year form the date of
16receipt of the business assistance to the date of payment of the amount due.
SB10,8,2217
(b) If the failure to comply with the rules of conduct under sub. (2) occurs within
1810 years after the business enters into a revenue agreement, as defined in s. 66.521
19(2) (L), a penalty equal to the amount of the federal tax exemption received, plus an
20additional penalty equal to 10% of the federal tax exemption received and interest
21on the federal tax exemption received at the rate of 18% per year from the date of the
22federal tax exemption to the date of payment of the amount due.
SB10,8,2423
(c) Ineligibility for any further business assistance for 10 years after the date
24of noncompliance as determined by the department.