GPR - $777,400
PR 777,400
Total $0
Governor: Convert $388,700 annually from GPR to PR for the Physician Loan Assistance Program (PLAP) and Health Care Provider Loan Assistance Program (HCPLAP) and a related contract with the UW Office of Rural Health. The current appropriation used to fund the programs would be converted from GPR to PR. Funding, under the bill, would be provided from tribal gaming revenue provided to the state under the recently completed state-tribal gaming compact amendments. [For more information on the proposed use of tribal gaming revenues, see the summary item relating to Tribal Gaming Revenue Allocations under "Administration -- Division of Gaming."]
The Physician Loan Assistance Program (PLAP) and the Health Care Provider Loan Assistance Program (HCPLAP) programs provide loan repayments for physicians and certain health care professionals who practice in areas in the state which have a shortage of physicians or health care professionals.
[Bill Sections: 202, 562, 2957 thru 2964 and 9210(1)]
6. POSITION TRANSFER TO ADMINISTRATIVE SERVICES
Funding Positions
GPR - $572,400 - 4.50
FED - 322,800 - 3.00
PR 1,292,800 8.00
SEG 79,000 - 0.50
Total $476,600 0.00
Governor: Provide $482,900 PR and 8.0 PR positions annually and delete $161,400 FED, 3.0 FED positions, $286,200 GPR, 4.5 GPR positions, $35,300 SEG and 0.5 SEG positions annually to reflect the transfer of administrative positions to the Department's administrative services charge-back appropriation. The source of program revenue is fees charged to the Department's programs for administrative services provided.
Further, provide $163,200 PR and $74,600 SEG in 1999-00 and $163,800 PR and $75,000 SEG in 2000-01 in various appropriations to fund increased charges for administrative services performed for the various programs. The increased administrative charges would reflect position transfers, pay plan and fringe benefit costs and position reclassifications. This provision would increase expenditure authority in appropriations that would be charged for the increased costs of administrative services.
7. APPLICATIONS DEVELOPMENT POSITIONS
Funding Positions
PR $328,500 3.00
Governor: Provide $156,200 in 1999-00 and $172,300 in 2000-01 and 3.0 positions annually for the Administrative Services Division. The positions would be used for applications development and maintenance of the Department’s computer systems. The source of program revenue is fees charged to the Department’s programs for services provided.
8. WISCONSIN DEVELOPMENT FUND -- FUNDING PROVISIONS
Governor: Provide funding through the Wisconsin Development Fund (WDF) GPR and program revenue repayments appropriations as follows:
a. Annual base level GPR funding of $7,503,800.
b. Annual base level funding of $1,500,000 PR for the program revenue repayments appropriation. [An additional $1,000,000 in annual expenditure authority is provided for the newly created manufacturing extension grants. This funding is reflected under the WDF item #10 for that program.]
c. Authorize the Department to provide an additional $50,000, or a total of $100,000, in WDF funds in fiscal year 1999-00 to a nonprofit organization that provides assistance to organizations and individuals in urban areas. (The funding is the final year of a three-year grant for Reggie White's Wisconsin Urban Hope Initiative that provides entrepreneurial opportunities for individuals in Wisconsin's central cities. State funding is matched by private funds.) The funds must be used in accordance with a memorandum of understanding with DOA that specifies how the monies must be allocated for assistance.
d. Authorize the Department to make a loan of up to $600,000 in WDF funds for a project that includes a pedestrian bridge if all of the following apply: (1) the person submits a plan to the Department detailing the use of the loan and the Secretary of Commerce approves the plan; (2) the person enters into a written agreement with the Department that specifies the loan terms and the conditions for use of the loan proceeds, including reporting and auditing requirements; (3) the person agrees in writing to submit to the Department, within six months after spending the full amount of the loan, a report detailing how the proceeds were used. Loan repayments would be placed in the WDF program revenue appropriation. No loan proceeds could be paid for this purpose after June 30, 2000.
e. Authorize the Department to make a grant of not more than $1,000,000 from the WDF GPR appropriation to a consortium for a manufacturing technology training center if all of the following apply: (1) the consortium is located in the Racine-Kenosha area; (2) the consortium submits a plan to the Department detailing the proposed use of the grant and the Secretary approves the plan; (3) the consortium enters into a written agreement with the Department that specifies the conditions for use of the grant proceeds, including reporting and auditing requirements; and (4) the consortium agrees in writing to submit to the Department, within six months after spending the full amount of the grant, a report detailing how the grant proceeds were used. The Department could not disburse more than $500,000 in grant proceeds in each year of the 1999-2001 biennium. No grants could be paid for this purpose after June 30, 2001.
The Wisconsin Development Fund (WDF) consists of eight programs: (1) technology development grants and loans; (2) customized labor training grants and loans; (3) major economic development grants and loans; (4) Wisconsin trade project; (5) employe ownership assistance grants; (6) manufacturing assistance grants; (7) revolving loan fund capitalization grants; and (8) the rapid response fund. The WDF is funded through both a general purpose revenue (GPR) and a program revenue (PR) appropriation. The GPR appropriation is the primary source of funding for the WDF program.
The program revenue repayments appropriation was established to operate similar to a revolving loan fund. Amounts received from WDF loan repayments are credited to the repayments appropriation and these monies can be used to fund WDF grants and loans. The program revenue repayments appropriation is a continuing appropriation and, consequently, unappropriated and unexpended amounts remain in the appropriation balance and can be used to fund future grants and loans.
Under a provision of 1997 Wisconsin Act 27 (the 1997-99 biennial budget), the Department was authorized to provide financial assistance from the WDF to a nonprofit organization that provides assistance to organizations and individuals (Reggie White's Urban Hope Initiative). A total of $50,000 annually was required to be allocated to the project in 1997-98, 1998-99 and 1999-00. Commerce was required to enter into a memorandum of understanding with DOA that specified how Commerce could use the monies allocated for assistance. A grant of $100,000 was awarded in 1997-98 under this provision.
Act 27 also authorized the Department to provide loans from the WDF totaling not more than $1,200,000 for projects that included a pedestrian bridge. Loans could not be made for this purpose after January 1, 1999.
[Bill Sections: 196, 204, 2931 thru 2933 and 9110(4)&(5)]
9. WISCONSIN DEVELOPMENT FUND -- ADMINISTRATIVE PROVISIONS
PR-REV $47,000
Governor: Make the following modifications to Wisconsin Development Fund (WDF) administrative provisions:
a. Authorize the Department to charge the 1.5% loan origination fee on all WDF awards of $100,000 or more. The Department indicates that applying the loan origination fee to more WDF awards and reducing the threshold amount at which it would be imposed would have raised an additional $23,500 over the past year.
b. Authorize the Department to expend up to 1% of the moneys appropriated under the WDF GPR appropriation for (1) evaluations of proposed technical research projects that apply for technology development grants and loans; and (2) evaluation costs, collection costs, foreclosure costs and other costs, excluding staff salaries, that are associated with administering the WDF loan portfolio. Current law provisions, which give authority to the Development Finance Board to use this funding for certain evaluations and grants, would be deleted.
c. Change the definition of job used for the WDF to mean a position providing full-time equivalent employment.
The WDF currently consists of eight programs: (1) technology development grants and loans; (2) customized labor training grants and loans (CLT); (3) major economic development grants and loans (MED); (4) Wisconsin trade project; (5) employe ownership assistance grants; (6) manufacturing assessment grants; (7) revolving loan fund capitalization grants; and (8) rapid response fund loans. Commerce is authorized to charge a 1.5% loan origination fee on CLT and MED awards over $200,000. Fees are used to fund administrative expenses.
The Development Finance Board is currently authorized to expend or encumber up to 1% of the amount appropriated for the WDF GPR appropriation for: (1) evaluations of proposed technology development grant or loan projects; and (2) grants to small businesses for preparing proposals for the federal small business innovative research program. Under WDF provisions, a job is defined to mean a regular, nonseasonal full-time position in which an individual, as a condition of employment, is required to work at least 2,080 hours per year, including paid leave and holidays.
[Bill Sections: 2985, 2993, 2996 and 2998]
10. WISCONSIN DEVELOPMENT FUND -- MANUFACTURING EXTENSION CENTER GRANTS
PR $2,000,000
Governor: Repeal the manufacturing assistance grant program, including the manufacturing assessments, customized supplier training and technology transfer subprograms, and create a manufacturing extension center grant program under the Wisconsin Development Fund (WDF). The new manufacturing extension center grant program would provide grants to technology-based nonprofit organizations to provide support for manufacturing extension centers. A technology-based nonprofit organization would be defined as a nonprofit corporation as defined under state law or an organization that is exempt from federal taxation under the federal Internal Revenue Code (IRC) and that has a mission to transfer technology to businesses in the state. Technology would include biotechnology, which would mean technology related to life sciences. Business would be defined to mean a company located in the state, that has made a firm commitment to locate a facility in Wisconsin or a group of companies of which at least 80% are located in Wisconsin.
In order to obtain a manufacturing extension center grant, the technology-based nonprofit organization would be required to submit a plan to Commerce that detailed its proposed expenditures and performance measures related to the project and the Secretary of Commerce would have to approve the plan. A technology-based nonprofit organization that received a grant could not receive any other grants or loans under the WDF. Grant recipients would be required to provide a cash match of at least 25% of the cost of the project.
Annual expenditure authority of $1,000,000 would be provided under the WDF repayments appropriation. Commerce could not award more than $1,000,000 in manufacturing extension center grants in a fiscal year.
Commerce could not encumber any funds for manufacturing extension center grants after June 30, 2001.
Currently, the manufacturing assistance grants program consists of three subprograms—the manufacturing assessments, customized supplier training and technology transfer programs. The total amount of grants awarded through all three subprograms cannot exceed $750,000 in a fiscal biennium.
The manufacturing assessment grant program provides funds to small businesses for manufacturing assessments and plans. The maximum grant amount is $2,500. Grants must be used to fund manufacturing assessments and related plans that are designed to assist eligible businesses in adopting readily available and reasonably standardized new manufacturing processes and techniques. The assessments help a company define a basic course of action, recommend strategies and improvements and identify resources to assist in the implementation of actions. Assessments can include: (1) employe attitude surveys, descriptions of basic job skills and identification of potential training needs; (2) review of the current use of technologies; (3) review of order placement, manufacturing and distribution processes; (4) analysis of marketing activities; and (5) identification of financial needs.
The supplier training program provides funding to manufacturers or consortiums of manufacturers of original equipment to fund customized training for employes of supplier businesses. Grants are used to fund costs incurred to have the employes of Wisconsin-based suppliers trained to meet the specific needs of manufacturers of original equipment. Grant funds can be used to cover 50% of the costs of trainers, training materials and related facilities. To be eligible for funding the training must: (1) focus on new technology, industrial skills or manufacturing processes; and (2) be customized to meet the specific needs of the manufacturers of original equipment and the Wisconsin-based suppliers. The maximum amount of a grant that can be awarded to an original equipment manufacturer is $100,000. Each member of a consortium of such businesses is eligible for a grant of $100,000. The maximum amount of a grant that can be used to train employes of any single Wisconsin-based supplier is $20,000. The total amount of grants made through this subprogram cannot exceed $500,000 in a fiscal biennium.
The manufacturing extension grant program provides funds to nonprofit technology-based organizations to provide support for manufacturing extension centers that transfer state-of-the-art technological advances to small- and medium-sized Wisconsin businesses using innovative training methodologies. Financing is provided as grants. Grants can only fund up to 50% of the costs directly related to technology transfer activities between businesses and the organizations that receive the grants. A maximum of $250,000 in total technology transfer grants can be made in a biennium. Grants can be used to fund costs directly related to technology transfer activities. Eligible costs include capital equipment and operating costs for teaching factories, training in new technologies and related services.
[Bill Sections: 204, 2979, 2984, 2986 thru 2992 and 2994, 2995 and 2997]
11. WISCONSIN DEVELOPMENT FUND -- URBAN EARLY PLANNING GRANT PROGRAM
Governor: Create an urban area early planning grant program under the WDF to provide grants to persons for early planning projects. An early planning project would be the preliminary stages of considering and planning the expansion or start-up of a business that is or will be located in an urban area in the state. An urban area would be (a) a city, village or town that is located in a county with a population density of at least 150 persons per square mile; or (b) a city, village or town with a population of more than 6,000.
In order to receive a grant, a person would be required to submit an application to Commerce, in a form determined by the Department, which contained or described all of the following:
a. The location of the new or expanding business.
b. The ownership structure of the new or expanding business.
c. The product or service provided by the new or expanding business.
d. The market for the product or service provided.
e. Competition within the market.
f. Any competitive advantages of the new or expanding business.
g. The person's estimate of the gross revenue of the new or expanding business over a period specified by Commerce.
h. The process for manufacturing the product, or providing the services, of the new or expanding business.
i. The person's experience or training.
j. An estimate of the number of jobs that will be created by the new or expanding business.
k. The person's estimate of the capital required to complete the early planning project.
l. The person's estimate of the profit that will be generated by the new or expanding business over a period specified by the Department.
m. Potential sources of financing for the early planning project.
n. Any other information requested by the Department.
The maximum grant that could be awarded to any one person would be $15,000 in a biennium. Grant recipients would be required to provide a cash match that equaled at least 25% of the total cost of the project. Grant proceeds could only be used to: (a) perform a business feasibility study; (b) prepare a detailed marketing plan; and (c) prepare a detailed business plan. The maximum total amount of urban early planning grants that could be awarded would be $250,000 in a biennium. Funding for urban early planning grants would be from the WDF.
Under current law, early planning grants may be made to eligible applicants under both the Minority Business Development Finance (MBDF) and Rural Economic Development (RED) programs, which are administered by Commerce. Under MBDF, eligible applicants are minority group members or minority-owned businesses. RED early planning grants may be awarded to small businesses that are located in a city, village or town with a population of 6,000 or less or located in a county with a population density of less than 150 persons per square mile.
[Bill Sections: 196, 204 and 2956]
12. STATE OPERATIONS BASE LEVEL FUNDING REDUCTION
GPR - $71,800
Governor: Delete $35,900 GPR annually in base level supplies from the Commerce state operations appropriation to make permanent a lapse required in the 1997-99 biennial budget.
13. DEVELOPMENT AND ENTERPRISE DEVELOPMENT ZONE PROGRAM AND TAX CREDIT MODIFICATIONS
Governor: Modify the development and enterprise development zones programs and tax credits as follows:
a. Limit on Total Tax Credits. The current limit on the total amount of tax credits that can be claimed under the development zone program of $33.2 million would be eliminated. Instead, a maximum limit on the total amount of tax credits that could be claimed under both the development and enterprise development zone programs would be established at $300 million. The enterprise development zone program currently has no overall cap, though each zone is limited to no more than $3 million in tax credits.
b. Enterprise Development Zones. Commerce would be authorized to designate up to 100 enterprise development zones. The current requirement that the Department obtain approval from the Joint Committee on Finance to designate more than 50 zones would be eliminated (64 are currently authorized).
In addition, the Department would be authorized to designate enterprise development zones for environmental remediation projects. Environmental remediation would be defined as removal or containment of environmental pollution and restoration of soil or groundwater that is affected by environmental pollution in a brownfield if that removal, containment or restoration began after the area that contains the site was designated as an enterprise development zone. The Department would be required to determine that the project would likely provide for significant environmental remediation and that other current law criteria were met. Of the total number of enterprise development zones designated, at least 10 enterprise development zones would have to be designated for environmental remediation projects.
c. Development Zones Tax Credit -- Jobs Component. The full-time jobs component of the development zones tax credit would be modified to: (1) increase from $6,500 to $8,000 the maximum credit that could be claimed for each a full-time job that was created and filled by a member of a targeted group; (2) eliminate the credit for retaining a job that is filled by a member of a targeted group; (3) provide a maximum tax credit of $8,000 for retaining a full-time job in an enterprise development zone if Commerce determines that a significant capital investment was made to retain the full time job; (4) increase from $4,000 to $6,000 the maximum tax credit that could be claimed for each full-time job created or retained and filled by an individual who is not a member of a targeted group. In addition, at least one-third of job creation credits claimed would have to be based on jobs created and filled by members of a targeted group. Currently, the credits must be based on jobs created or retained for targeted group members. These modifications would first apply to tax years beginning on January 1, 2000.
d. Administrative Provisions. The requirement that targeted group members for whom tax credits are claimed must be certified within 90 days after the first day of employment would be eliminated. Commerce would be also authorized to specify by rule the circumstances under which an exception could be established from the requirement that the development zones tax credit must be based on regular, full-time nonseasonal jobs that are created or retained.
The bill does not include a fiscal effect to this item.
Wisconsin has two programs which provide tax credits to businesses as incentives to expand and locate in designated economically distressed areas -- development zones (currently 20 are designated) and enterprise development zones (currently 42 are designated). The programs are designed to promote economic growth through job creation and investment in the distressed areas. Designation criteria target areas with high unemployment, low incomes and decreasing property values. Businesses which locate or expand in the different zones are eligible to receive various tax credits.
[Bill Sections: 1708, 1709, 1742, 1743, 1755, 1756, 2999 thru 3014, 9310(1)&(2) and 9343(2)]
14. JOBS SPECIALIST POSITION
Positions
GPR 0.05
Governor: Provide 0.05 jobs specialist position in the Bureau of Enterprise Development to increase the Bureau's 0.95 jobs specialist position to full-time. The person works with businesses in development and enterprise development zones to increase the number of target group members hired by businesses in the zones.
