COMMERCE
Budget Change Items
Departmentwide and Economic Development
Funding Positions
GPR $217,100 - 1.00
FED 398,700 - 2.00
PR 139,800 - 3.00
SEG - 608,600 0.00
Total $147,000 - 6.00
1. STANDARD BUDGET ADJUSTMENTS
Governor/Legislature: Provide annual adjustments of $69,900 PR, -$304,300 SEG, -1.0 GPR position, -2.0 FED positions and -3.0 PR positions. Further, provide $107,900 GPR and $222,800 FED in 1999-00 and $109,200 GPR and $175,900 FED in 2000-01 for standard budget adjustments. Adjustments are for (a) turnover reduction (-$74,500 GPR, -$235,700 PR and -$59,600 SEG annually); (b) removal of noncontinuing items (-$56,000 FED in 1999-00 and -$104,300 FED in 2000-01 and -$200,300 SEG, -2.0 FED, -1.0 GPR and -3.0 PR positions annually); (c) full funding of salaries and fringe benefits ($158,300 GPR, $271,500 FED, $180,300 PR and -$53,500 SEG annually); (d) full funding of financial services ($3,200 GPR, $4,800 PR and $700 SEG annually); (e) position reclassifications ($6,400 GPR and $4,100 FED in 1999-00 and $7,700 GPR and $5,500 FED in 2000-01 and $200 PR and $3,100 SEG annually); (f) overtime ($95,800 PR annually); and (g) fifth week vacation as cash ($14,500 GPR, $3,200 FED, $24,500 PR and $5,300 SEG annually). In total, changes due to standard budget adjustments would increase funding by $96,300 in 1999-00 and $50,700 in 2000-01. Total position authority would be reduced by 6.0 annually.
2. BROWNFIELDS GRANT PROGRAM [LFB Paper 1112]
Governor: Expand the brownfields grant program to add a new component for financial assistance to persons, municipalities or local development corporations for brownfields redevelopment and associated environmental remediation projects which provide jobs primarily to individuals who are eligible to benefit from federal Temporary Assistance to Needy Families (TANF) funding.
Under the new component, Commerce could award a grant to a person, municipality or local development corporation if:
a. The recipient uses the grant proceeds for brownfields redevelopment and related environmental remediation projects;
b. The party that caused the environmental contamination and any person who possessed or controlled the environmental contaminant before it was released is unknown, cannot be located or are financially unable to pay the cost of brownfields redevelopment or associated environmental remediation activities;
c. The recipient contributes the required match to the cost of the project; and
d. The recipient will use the grant proceeds to create or retain jobs, of which at least 80% will be filled by individuals who are parents of minor children and whose family income does not exceed 200% of the poverty line. [Items (a) through (c) are current law requirements.]
In awarding the grants, the Department would be required to consider the following criteria: (a) the potential of the project to promote economic development in the area; (b) the number of jobs likely to be created or retained; (c) whether the project will have a positive effect on the environment; (d) the amount and quality of the recipient's contribution to the project; and (e) the innovativeness of the recipient's proposal for remediation and redevelopment. If possible, the Department would weight the criteria by applying a 50% weight to the first two criteria, a 25% weight to the third criterion, a 15% weight to the fourth criterion and a 10% weight to the fifth criterion.
A total of $5,000,000 PR in federal TANF funds would be provided annually through a new, program revenue continuing appropriation. Current funding limits for the brownfields grant program would be modified to reflect the additional funds. Consequently, total brownfields grant program funds would be required to be annually allocated as follows: (a) $3,000,000 in grants that do not exceed $300,000; (b) $3,000,000 in grants that are greater than $300,000 but do not exceed $700,000; and (c) $4,000,000 in grants that are greater than $700,000 but do not exceed $1,250,000. (Currently, the maximum total amount of grants that can be made for each level of awards is $750,000, $1,750,000 and $2,500,000, respectively.) The maximum grant would remain $1,250,000. In addition, the current provision that annually seven grants be made to municipalities with populations of less than 30,000 would be expanded to require 14 grants to municipalities with populations of less than 50,000.
Commerce would be required to promulgate rules to establish the hours and benefits of employment for eligible low-income individuals who fill project jobs. Applicants for grants would be required to include in the grant application a plan for creating jobs, including those jobs that would be created for eligible low-income individuals.
The Brownfields Grant program was created in the 1997-99 biennial budget to provide financial assistance to persons (individuals, partnerships, corporations, or limited liability companies), municipalities and local development corporations that conduct brownfields redevelopment and related environmental remediation projects. Brownfields are abandoned, idle or underused industrial or commercial facilities or sites, the expansion or redevelopment of which is adversely affected by actual or perceived environmental contamination. Brownfields redevelopment includes any work or undertaking to: (a) acquire a brownfields facility; and (b) raze, demolish, remove, reconstruct, renovate or rehabilitate the facility or existing buildings, structures or other improvements at the site. The redevelopment project must be for promoting the facility or site for commercial, industrial or similar economic development purposes.
Grant recipients are required to provide cash or in-kind matches equal to a certain percent of project costs as follows: (a) 20% for grants of $300,000 or less; (b) 35% for grants between $300,000 and $700,000; and (c) 50% for grants between $700,000 and $1,250,000.
Base level funding of $5,000,000 SEG annually from the environmental fund is appropriated for brownfields grants.
Joint Finance: Delete the new component of the program to provide grants for projects which would create jobs for TANF eligible individuals, TANF funding and the program revenue appropriation. Instead, provide an additional $800,000 SEG in 1999-00 and $1,400,000 SEG in 2000-01 for the existing brownfields grant program. (Revenue would be provided from a $1 title fee increase in the vehicle environmental impact fee.) In addition, the following changes would be made to the current Commerce brownfields grant program:
a. Commerce would be required to award one-half of the annual brownfields grant funding for projects, such as recreational or housing development, that are scored without considering the number of jobs created by the project;
b. Commerce would be authorized to award grant funding for projects that address area-wide groundwater contamination;
c. Grant applicants would be required to document that they were unable to secure funding that was sufficient to support the project from another source; and
d. Grant recipients would be specifically authorized to be awarded other state grants or loans if they were eligible.
Senate: Include Joint Finance provision and, in addition, require Commerce to make a grant of $100,000, under the Brownfields Grant program, to a person for cleanup of a brownfields site in the City of Kenosha and for development of the cleaned-up site as a park if all of the following applied:
a. The person submits a plan to Commerce detailing the proposed use of the grant and the Secretary of Commerce approves the plan;
b. The person enters into a written agreement with the Department that specifies the conditions for use of the grant proceeds, including reporting and auditing requirements;
c. The person agrees in writing to submit to Commerce within six months after spending the entire amount of the grant a report detailing how the grant proceeds were used.
The Department could not make a grant under these provisions after June 30, 2001.
Conference Committee/Legislature: Include Senate provisions. In addition, delete the Joint Finance provisions related to the brownfields grant program that would: (a) require Commerce to make 50% of awards for projects, like recreation or housing, that would be scored without considering the number of jobs created, and (b) require applicants to document their inability to obtain funding from other sources. Instead, beginning in 2000-01 in awarding grants, the Department would be required to reduce the weight accorded to job creation in scoring grant applications by a factor that was approximately 50% lower than that same factor in previous award periods. In addition, in 2000-01, the Department would be required to award $1.4 million for projects that were evaluated without considering the number of jobs created by the projects. Finally, provide that awards of Round III brownfields grants be limited to those who submitted applications by the original deadline established by Commerce (April 16, 1999).
3. GAMING ECONOMIC DEVELOPMENT AND DIVERSIFICATION GRANT AND LOAN PROGRAMS [LFB Paper 161]
Veto by Governor [B-17]: Veto provision as follows: (a) delete authority to award brownfields grants for projects that address area-wide groundwater contamination; (b) delete the requirement that the weight given to job creation in scoring grant applications be reduced; and (c) by striking the "1," reduce from $1.4 million to $400,000, the amount that would be awarded in 2000-01 for projects that were evaluated without considering the number of jobs created.
[Act 9 Sections: 195c, 212d, 2944c, 2945c, 2945d, 2945e, 2945m, 2948c, 9110(8gm) and 9310(6bn)]
[Act 9 Vetoed Sections: 195c, 212d, 2937r thru 2939n, 2945m and 9310(6bn)]
Governor: Create a gaming economic development grant and loan program and a gaming economic diversification grant and loan program to provide financial assistance to businesses that are a located in counties that are affected by Native American gaming operations. Of Wisconsin's 72 counties, 52 either have casinos or are adjacent to counties that do. A total of $2,500,000 in 1999-00, $5,500,000 in 2000-01 and 1.0 position in each year would be provided for grants and loans and to administer the programs. Of the amounts appropriated, not more than $100,000 annually could be expended for marketing the programs. 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."]
Gaming Economic Development Grants and Loans. The gaming economic development grant and loan program would provide financial assistance to businesses located in Wisconsin counties in which a casino operated by a federally recognized American Indian tribe or band was located or to businesses located in adjacent counties. Commerce would be authorized to make a grant or loan to a qualified business if it determined that: (a) the business has been negatively impacted by the existence of the casino; and (b) the business has a legitimate need for the grant or loan to improve the profitability of the business.
Two types of awards could be made under the program: (a) a grant of up to $15,000 for professional services; and (b) a grant or loan of up to $100,000 for fixed asset financing. Professional services would include: (a) preparation of preliminary feasibility studies, feasibility studies or business and financial plans; (b) providing a financial package; (c) engineering studies, appraisals or marketing assistance; and (d) related legal, accounting or managerial services. Award recipients would be required to provide a cash match of at least 25% of the cost of the project. Grants or loans could not be made for purposes related to tourism unless the Department of Tourism concurred in the award. Commerce could waive the matching requirement if it determined that the business was subject to extreme financial hardship. The Department would also be authorized to forgive all or any part of a loan made under the program.
The program would be provided $2,500,000 in 1999-00 and $3,000,000 in 2000-01 and 1.0 position in each year to fund grants and loans and to administer both of the gaming grant and loan programs. Of the total amount provided, $114,000 in 1999-00 and $125,900 in 2000-01 would fund the position and related administrative costs. In addition, the Department would be required to make grants to Brown County of $500,000 in 1999-00 and $1,000,000 in 2000-01. (These funds would be provided in the 1999-01 biennium only and would be used to support construction of a new arena.) Consequently, the total amount of funding available for gaming economic development grants and loans would be $1,886,000 in 1999-00 and $1,874,100 in 2000-01.
In addition, gaming economic development loans that were repaid would be placed in a program revenue repayments appropriation and could be used to make additional grants and loans.
Gaming Economic Diversification Grants and Loans. The gaming economic diversification grant and loan program would provide grants and loans beginning in July, 2000, to businesses located in counties in which a casino operated by a federally recognized American Indian tribe was located in this state or to businesses located in adjacent counties. Commerce would be authorized to make a grant or loan to an eligible business for the purpose of diversifying the economy of a community in proximity to a casino. In determining whether to make an award, the Department would be required to consider all of the following: (a) a project's potential to retain or increase the number of jobs; (b) a project's potential to provide for significant capital investment; and (c) a project's contribution to the economy of the community in proximity to the casino and of the state. Grant or loan recipients would be required to provide a cash match equal to 25% of the project's cost. Awards could not be made for tourism related projects unless the Department of Tourism concurred in the award.
Funding of $2,500,000 would be provided in 2000-01 for gaming economic diversification grants and loans. In addition, a separate, program revenue appropriation would be created for loan repayments.
Joint Finance: Include provisions with the following modifications:
a. Provide an additional $2,000,000 PR in 1999-00 for economic development grants and loans;
b. Require Commerce to make annual grants from the gaming economic development grant and loan program of $1 million to the City of Milwaukee for a matching grant program administered by the Milwaukee Economic Development Corporation for remediation and economic redevelopment activities in the Menomonee Valley;
c. Require Commerce to make annual grants from the gaming economic development grant and loan program of $150,000 to the Northwest Regional Planning Commission to match federal or private funds at the rate of $1 of state funding for each $2 of federal or private funds to establish a community-based venture fund;
d. Require the Department of Commerce to make a grant of $299,800 PR in 1999-00 from the gaming economic developing grants and loans appropriation to a city that was required to replace its city well because of federal highway construction (Richland Center);
e. Require that businesses in all counties be eligible for gaming economic development and diversification grants and loans;
f. Create program revenue repayments appropriations as annual; and
g. Specify that Native American businesses are eligible for grants and loans.
Assembly: Modify Joint Finance provisions as follows:
a. Delete $500,000 in 1999-00 in tribal gaming revenues from the gaming economic development grant and loan program. Further, reduce the grant to the City of Milwaukee for remediation and redevelopment activities in the Menomonee Valley from $1,000,00 to $500,000 in 1999-00. Tribal gaming funding of $500,00 in 1999-00 and $1,000,000 in 2000-01 would remain for the Menomonee Valley Grant.
b. Delete $175,500 in 1999-00 and $185,200 in 2000-01 in tribal gaming revenues from the gaming economic development grant and loan program to provide tribal gaming funds to the Governor's Work-Based Learning Board to make grants to tribal colleges.
c. Provide a grant of up to $1,000,000 in 2000-01 from the gaming economic diversification grant and loan program to fund construction of the Swiss Cultural Center in New Glarus. Each $1 in state funding must be matched by $2 from other sources.
Senate: Modify Joint Finance provisions as follows:
a. Require the Department to make annual grants of $350,000 from the gaming economic development grant and loan program to the College of the Menomonee Nation for work-based programs at the College. Commerce would be required to promulgate rules related to the use of grant proceeds and auditing and reporting requirements.
b. Delete the requirement that Commerce provide gaming economic development grants of $500,000 in 1999-00 and $1,000,000 in 2000-01 to Brown County for construction of a new arena.
c. Provide a grant of up to $1,000,000 in 2000-01 from the gaming economic diversification grant and loan program to fund construction of the Swiss Cultural Center in New Glarus. Each $1 in state funding must be matched by $2 from other sources.
d. Delete $125,000 annually in tribal gaming revenues from the gaming economic development grant and loan program to provide funding to the Lac Courte Oreilles Chippewa tribe to develop a law enforcement assistance grant program.
e. Delete $250,000 annually in tribal gaming revenues from the gaming economic development program to provide funding for a position and grants under the DATCP agricultural development and diversification program to Native American aquaculture facilities, the private aquaculture industry or state owned hatcheries for water quality research and other purposes related to aquaculture.
f. Delete $130,000 in tribal gaming revenues in 1999-00 from the gaming economic development grant and loan program to supplement funding provided for a one-time grant to the Town of Swiss in Burnett County and the St. Croix Band of Chippewa for a drinking water study and for engineering design and feasibility activities related to construction of wastewater and drinking water treatment facilities.
Conference Committee/Legislature: Modify Joint Finance provisions as follows:
a. Reduce, from $1.0 million to $900,000, the annual grant from the gaming economic development appropriation to the City of Milwaukee for remediation and redevelopment activities in the Menomonee Valley. In addition, delete $100,000 annually in tribal gaming revenues from the gaming economic development grant and loan program.
b. Delete $250,700 in 1999-00 and $260,400 in 2000-01 in tribal gaming revenues from the gaming economic development grant and loan program to provide tribal gaming funds to the Governor's Work-Based Learning Board (see DWD, Employment, Training and Vocational Rehabilitation Programs for additional information).
c. Provide a grant of up to $1,000,000 in 2000-01 form the gaming economic diversification grant and loan program to fund construction of the Swiss Cultural Center in New Glarus. Each $1 in state funding must be matched by $2 from other sources (see "Building Program").
d. Delete $130,000 in tribal gaming revenues in 1999-00 from the gaming economic development grant and loan program to supplement funding provided for a one-time grant to the Town of Swiss in Burnett County and the St. Croix Band of Chippewa for a drinking water study and for engineering design and feasibility activities related to construction of wastewater and drinking water treatment facilities (see Natural Resources, "Water Quality").
e. Delete $125,000 annually in tribal gaming revenues from the gaming economic development grant and loan program to provide funding to the Lac Courte Oreilles Chippewa tribe to develop a law enforcement assistance grant program.
Veto by Governor [F-25]: Delete the requirement that the Indian gaming economic development grants to the City of Milwaukee and Northwest Regional Planning Commission be annual grants.
[Act 9 Sections: 203, 205, 207 thru 209, 558, 559, 2952, 2953, 2953g, 2953h, 2953i, 9110(1),(6c)&(7h) and 9410(4)&(5)]
[Act 9 Vetoed Sections: 2953g, 2953h and 2953i]
4. NATIVE AMERICAN ECONOMIC DEVELOPMENT APPROPRIATIONS FUNDING CONVERSION [LFB Paper 162]
Funding Positions
GPR - $201,400 - 1.00
PR 201,400 1.00
Total $0 0.00
Governor/Legislature: Convert $100,700 and 1.0 position annually from GPR to PR for the Department's Native American liaison and Native American economic development liaison and technical assistance grants. The current appropriations used to fund the liaison, economic development liaison grant and technical assistance grant 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."] Base level funding would be maintained for each appropriation as follows: (a) American Indian economic development; liaison--$50,700 PR and 1.0 PR position annually; (b) American Indian economic development; technical assistance--$25,000 PR annually; and (c) American Indian economic development; liaison-grants--$25,000 PR annually.
Currently, a program planning analyst position provides technical and economic development assistance to Native American entrepreneurs and tribal communities. The Department also administers two grant programs which provide funds to the Great Lakes Inter-Tribal Council--an economic development liaison grant and an economic development technical assistance grant.
The economic development liaison grant program provides monies to the Council to partially fund a Council liaison between American Indians, Indian businesses and Indian tribes interested in targeted economic assistance programs and the state agencies that administer them.
The technical assistance grant program provides funding to the Great Lakes Inter-Tribal Council for a position that provides technical assistance for economic development on or near Indian reservations. Entities that are eligible for technical assistance are tribal enterprises, Indian businesses located on Indian reservations and other Indian businesses that directly benefit the economies of Indian reservations.
[Act 9 Sections: 197 thru 199, 555 thru 557, 3022 and 3023]
5. PHYSICIAN AND HEALTH CARE PROVIDER LOAN ASSISTANCE PROGRAMS FUNDING CONVERSION [LFB Paper 158]
GPR - $777,400
PR 777,400
Total $0
Governor/Legislature: 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.
[Act 9 Sections: 202, 562, 2957 thru 2964 and 9210(1)]
6. POSITION TRANSFER TO ADMINISTRATIVE SERVICES [LFB Paper 285]
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.
Joint Finance/Legislature: Approve the Governor's recommendation. In addition, provide $28,900 PR and $9,200 SEG annually to adjust various appropriations to reflect increased administrative service charges related to the transfer of administrative positions to the Administrative Services Division's program revenue charge-back appropriation.
7. APPLICATIONS DEVELOPMENT POSITIONS
Funding Positions
PR $328,500 3.00
Governor/Legislature: 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 [LFB Paper 286]
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.
