Amendment ASA1-AB499

LRBs0340/2

RM/MS/GM/TF/JK/JTK:kmg:ch

2003 - 2004 LEGISLATURE

ASSEMBLY SUBSTITUTE AMENDMENT 1, TO 2003 ASSEMBLY BILL 499

February 10, 2004 - Offered by Representatives Schooff and Shilling.

AB499-ASA1,2,3 An Act to renumber 44.02 (24), 71.10 (4) (dr) and 101.121 (4) (a); to renumber and amend 71.07 (9m) (a), 71.07 (9r) (a), 71.28 (6) (a) and 71.47 (6) (a); to amend 13.48 (7), 13.48 (15), 59.69 (4m), 60.64, 62.23 (7) (em), 71.07 (5m) (a) 4., 71.07 (9m) (c), 71.28 (6) (c), 71.47 (6) (c), 101.121 (4) (b), 101.19 (1) (intro.), 254.61 (1) (f) 2. and 823.21; and to create 13.48 (10) (c), 20.143 (1) (gb), 41.11 (1) (bm), 44.02 (24) (b), 44.02 (24d), 71.07 (9m) (a) 2., 71.07 (9m) (g), 71.07 (9m) (h), 71.07 (9r) (a) 2., 71.28 (6) (a) 2., 71.28 (6) (g), 71.28 (6) (h), 71.47 (6) (a) 2., 71.47 (6) (g), 71.47 (6) (h), 84.013 (3g), 86.36, 86.37, 101.121 (3) (c), 101.121 (4) (a) 2., 101.121 (5), 101.121 (6), 101.975 (4), 560.03 (21m) and 560.083 of the statutes; relating to: the regulation, preservation, and restoration of historic buildings, the supplement to the federal historic rehabilitation tax credit and the state historic rehabilitation tax credit, requiring the certification of downtowns, promoting certain downtown areas in this state, highway projects involving business and downtown areas, the construction of major highway projects involving a bypass, granting rule-making authority, and making appropriations.

Analysis by the Legislative Reference Bureau

This substitute amendment makes numerous changes with regard to downtown development and historic buildings and also makes a change to current law regarding the construction of major highway projects involving a bypass. Significant provisions include the following:

Historic buildings

State Historic Building Code

Current law authorizes the Department of Commerce (department) to regulate the preservation and restoration of qualified historic buildings. A qualified historic building is a building that is listed on the national or state register of historic places, or a certified local register of historic property, or that is located in a district that is listed on the national or state register of historic places and is of historical significance to the district. Current law permits the department, in consultation with the Historic Building Code Council, to promulgate a historic building code that provides specific standards for the preservation or restoration of qualified historic buildings, while still providing for the health, safety, and welfare of occupants of and visitors to historic buildings. In addition, to permit the preservation or restoration of qualified historic buildings, the department may grant a variance from any rule promulgated under the chapters of the statutes relating to the regulation of industry, buildings, and safety or the regulation of plumbing, fire protection systems, and swimming pools.

With certain exceptions, the owner of a qualified historic building may elect to be subject to the State Historic Building Code. With limited exceptions, an owner who makes this election is exempt from any provision of any other building code, including a local building code, that concerns a matter that is dealt with in the State Historic Building Code. Although current law does not contain an administrative procedure designed specifically to determine whether an owner is entitled to this exemption, current law does contain a procedure that an owner may follow to resolve any conflicts between a local order and any order of the department that relates to the safety of places of employment or certain buildings that are open to the public (public buildings).

This substitute amendment specifies that the State Historic Building Code must be liberally interpreted to facilitate the preservation and restoration of qualified historic buildings. The substitute amendment also creates a specific administrative procedure for determining the extent to which a provision in a local building code applies to a qualified historic building. The substitute amendment permits the owner of a qualified historic building who has elected to be governed by the State Historic Building Code to request that the department review any decision of a local governmental unit that requires the owner to comply with a provision in a local ordinance. The department must review the decision to determine whether the provision in the ordinance concerns a matter dealt with in the State Historic Building Code, in which case the owner would be exempt from the provision. The substitute amendment specifies that, in performing this review, the department must follow the existing procedure for resolving conflicts between local orders and orders of the department that relate to the safety of places of employment or public buildings.

This substitute amendment also expands the role of the State Historical Society relating to the State Historic Building Code. Under the substitute amendment, the owner of a qualified historic building may request that the State Historical Society review certain decisions of the department, or of a local governmental unit acting as an agent of the department, relating to the State Historic Building Code, variances under the State Historic Building Code, or the inspection of qualified historic buildings for compliance with the State Historic Building Code. The State Historical Society must review the particular decision and issue an advisory opinion as to whether the decision or an alternate decision is consistent with the State Historic Building Code. The substitute amendment permits the State Historical Society to negotiate with the department or the particular local governmental unit to achieve an alternate decision that would allow the greatest possible degree of restoration and preservation, while still providing for the health, safety, and welfare of occupants of and visitors to the qualified historic building. The substitute amendment also permits the department or the particular local governmental unit to modify a reviewed decision, based upon these negotiations. In addition, the substitute amendment requires the department, in cooperation with the State Historical Society, to develop an informational pamphlet to increase public awareness and use of the State Historic Building Code.

Historic preservation in local governmental units

This substitute amendment directs local governmental units to interpret liberally their regulations that apply to historic structures in order to facilitate the preservation and restoration of historic buildings and structures.

Historic rehabilitation tax credit

Under current law, a person who is eligible to claim a federal income tax credit equal to either 10 percent of qualified expenses related to rehabilitating a qualified building in this state or 20 percent of qualified expenses related to rehabilitating historic property in this state may also claim a supplemental state income or franchise tax credit that is equal to 5 percent of such qualified expenses.

Under the substitute amendment, for taxable years beginning in 2004, a person who is eligible to claim the federal rehabilitation tax credit may claim the supplemental state rehabilitation credit in an amount equal to 20 percent of qualified expenses, if the rehabilitated property is located in a certified downtown or is included in a business area revitalization under the State Main Street Program and the state Historical Society certifies the rehabilitation. In addition, under the bill, a person who is not eligible to claim the federal rehabilitation tax credit because the person's qualified expenses do not satisfy the adjusted-basis requirement under federal law may claim the supplemental state rehabilitation credit in an amount equal to 20 percent of qualified expenses, if the qualified expenses are at least $10,000, the rehabilitated property is located in a certified downtown or is included in a business area revitalization under the State Main Street Program, and the state Historical Society certifies the rehabilitation. The state Historical Society may charge and collect a fee for the certifications described in this paragraph in an amount equal to two percent of the qualified expenses, but not less than $300 nor more than $20,000. Fifty percent of the amount of such fees collected by the Historical Society will be used to provide additional staffing for the administration of the State Main Street Program.

Under current law, a person may claim an income tax credit equal to 25 percent of the qualified expenses to preserve or rehabilitate historic property that is used as an owner-occupied personal residence. The state Historical Society certifies such expenses.

Under this substitute amendment, for taxable years beginning in 2004, a person who is eligible to claim the state income tax credit for preserving or rehabilitating historic property may claim the state income tax credit in an amount equal to 30 percent of qualified expenses, if the preserved or rehabilitated property is located in a certified downtown or is included in a business area revitalization under the State Main Street Program and the state Historical Society approves the preservation or rehabilitation. The state Historical Society may charge and collect a fee of $150 for certifying such expenses.

Under current law, if a person who claims the income tax credit for qualified expenses to preserve or rehabilitate an owner-occupied personal residence sells the property within five years from the date on which the preservation or rehabilitation is completed, or if the state Historical Society determines that the preservation or rehabilitation does not comply with the standards established by the society, the person who claimed the tax credit must pay to the state all, or a portion, of the amount of the credit that the person received, depending on the date on which the person sold the property or on the date on which the preservation or rehabilitation does not comply with state Historical Society standards.

Under this substitute amendment, if a person who claims the supplemental state income or franchise tax credit for qualified expenses related to preserving or rehabilitating historic property in this state sells the property within five years from the date on which the preservation or rehabilitation is completed, or if the state Historical Society determines that the preservation or rehabilitation does not comply with the standards established by the society, the person who claimed the tax credit must pay to the state all, or a portion, of the amount of the credit that the person received, depending on the date on which the person sold the property or the date on which the preservation or rehabilitation does not comply with state Historical Society standards.

Downtown development

Certification and promotion of downtowns

This substitute amendment requires the department to develop and publish guidelines to aid communities in reconstructing central business districts that are destroyed or severely damaged in major disasters. The substitute amendment also requires the department to promulgate rules pursuant to which the department will certify downtowns. In addition, under the substitute amendment, the Department of Tourism must promote travel to these certified downtowns and to business areas that are or have been the subject of revitalization efforts under the State Main Street Program (a program that promotes revitalization efforts in certain business areas).

Currently, the Building Commission submits biennial recommendations to the legislature for revisions to the long-range state building program. No state agency or authority may engage any person to undertake construction of a building for the agency costing more than $100,000 without prior approval of the commission. In addition, the commission has authority to lease land and buildings to be used for state purposes unless that authority is granted by law to another state agency.

This substitute amendment provides that the commission shall not authorize construction of any state office building to be located outside of a downtown area certified by the Department of Commerce as required under the substitute amendment, unless the cost of locating the building inside such a downtown area is more than 10 percent greater than the average cost of locating the building in that portion of the geographic area that is served by the functions to be performed in the building on the date of initial occupancy outside of such a downtown area, as determined by the Department of Administration (DOA). The substitute amendment also provides that the commission, in preparing its recommendations for the long-range building program, shall not recommend construction of a state office building to be located outside of such a downtown area, unless the commission would be authorized to permit construction of that building in the recommended location. In addition, the substitute amendment prohibits the commission from approving the lease of any building for state office facilities to be located outside of such a downtown area unless the cost of locating the facilities inside such a downtown area is more than 10 percent greater than the average cost of locating the facilities in that portion of the geographic area that is served by the functions to be performed in the facilities on the date of initial occupancy under the lease outside of such a downtown area, as determined by DOA.

This substitute amendment imposes additional requirements relating to highway projects that are funded by the Department of Transportation (DOT) and that involve a highway in a business area included in the State Main Street Program or in a downtown certified by the Department of Commerce. First, DOT must consult, during preliminary stages of a proposed highway project, on issues concerning the proposed project and its effect on the business or certified downtown area with the Department of Commerce and, unless none exists, with a local board or downtown planning organization of that municipality. Second, DOT must give priority to retaining any on-street parking with respect to a highway-widening project in a business or certified downtown area.

This substitute amendment specifies that DOT, in providing any matching funds for local highway projects, is required to fund the construction of any highway lane without regard to whether it is a travel lane or a parking lane. This requirement applies only to local highway projects that are in business areas under the State Main Street Program or in downtowns certified by the Department of Commerce.

Major highway projects

Under current law, DOT administers a major highway projects program. A major highway project is a project having a total cost of more than $5,000,000 and involving construction of a new highway 2.5 miles or more in length; reconstruction or reconditioning of an existing highway that relocates at least 2.5 miles of the highway or adds one or more lanes at least five miles in length to the highway; or improvement of an existing multilane divided highway to freeway standards. Any major highway project, unlike other highway construction projects undertaken by DOT, requires the approval of the Transportation Projects Commission and the legislature before the project may be constructed. The current list of major highway projects that are approved for construction includes six projects that involve bypasses.

This substitute amendment provides that, prior to constructing a major highway project involving a bypass, DOT must notify the governing body of the city, village, or town primarily to be affected by the bypass of DOT's proposed construction of the bypass. If the governing body of the city, village, or town adopts a resolution, within 90 days of being notified by DOT, stating that an active bypass is in the best public interest of the city, village, or town and sends a copy of the resolution to DOT within seven days of its adoption, DOT is required to design and construct an active bypass. The substitute amendment defines "active bypass" as a bypass of an existing highway that is designed and constructed in such a way that access to the bypass requires motorists to exit the existing highway in order to travel on the bypass.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB499-ASA1, s. 1 Section 1. 13.48 (7) of the statutes is amended to read:

AB499-ASA1,7,7 13.48 (7) Biennial recommendations. The building commission shall prepare and formally adopt recommendations for the long-range state building program on a biennial basis. The building commission shall include in its report any projects proposed by the state fair park board involving a cost of not more than $250,000, together with the method of financing those projects proposed by the board, without recommendation. Unless a later date is requested by the building commission and approved by the joint committee on finance, the building commission shall, no later than the first Tuesday in April of each odd-numbered year, transmit the report prepared by the department of administration under s. 16.40 (20) and the commission's recommendations for the succeeding fiscal biennium that require legislative approval to the joint committee on finance in the form of proposed legislation prepared in proper form. If the building commission includes any recommendation for construction of a state office building, the commission shall ensure that the recommended location of the building is consistent with construction requirements under sub. (10) (c).

AB499-ASA1, s. 2 Section 2. 13.48 (10) (c) of the statutes is created to read:

AB499-ASA1,7,16 13.48 (10) (c) Unless otherwise required by law, the building commission shall not authorize the construction of any state office building, whether for utilization by a single agency or otherwise, to be located outside of a downtown area, as certified under s. 560.03 (21m), unless the cost of locating the building inside a downtown area is more than 10 percent greater than the average cost of locating the building in that portion of the geographic area that is served by the functions to be performed in the building on the date of initial occupancy outside of any downtown area, as determined by the department of administration.

AB499-ASA1, s. 3 Section 3. 13.48 (15) of the statutes is amended to read:

AB499-ASA1,8,3 13.48 (15) Acquisition of leasehold interests. Subject to the requirements of s. 20.924 (1) (i), the building commission shall have the authority to acquire leasehold interests in land and buildings where such authority is not otherwise provided to an agency by law. The building commission shall not approve any lease for state office facilities, whether for utilization by a single agency or otherwise, to be located outside of a downtown area, as certified under s. 560.03 (21m), unless the cost of locating the facilities inside a downtown area is more than 10 percent greater than the average cost of locating the facilities in that portion of the geographic area that is served by the functions to be performed in the facilities on the date of initial occupancy under the lease outside of any downtown area, as determined by the department of administration.

AB499-ASA1, s. 4 Section 4. 20.143 (1) (gb) of the statutes is created to read:

AB499-ASA1,8,7 20.143 (1) (gb) Certified downtowns and business district reconstruction. All moneys received from the historical society under s. 44.02 (24d) (b) for the purpose of providing staff for the administration of ss. 560.03 (21m) and 560.083.

AB499-ASA1, s. 5 Section 5. 41.11 (1) (bm) of the statutes is created to read:

AB499-ASA1,8,11 41.11 (1) (bm) Promote travel to business areas that are or have been the subject of revitalization efforts under the State Main Street Program under s. 560.081 or that are certified downtowns under s. 560.03 (21m).

AB499-ASA1, s. 6 Section 6. 44.02 (24) of the statutes is renumbered 44.02 (24) (a).

AB499-ASA1, s. 7 Section 7. 44.02 (24) (b) of the statutes is created to read:

AB499-ASA1,8,16 44.02 (24) (b) Charge a fee of $150 for a certification under par. (a). The historical society shall collect the fee under this paragraph when an applicant applies for certification under par. (a).

AB499-ASA1, s. 8 Section 8. 44.02 (24d) of the statutes is created to read:

AB499-ASA1,8,22 44.02 (24d) (a) Promulgate by rule procedures, standards, and forms necessary to certify, and shall certify, expenditures for preservation or rehabilitation of historic property for the purposes of ss. 71.07 (9m) (a), 71.28 (6) (a), and 71.47 (6) (a). Such standards shall be substantially similar to the standards used by the secretary of the interior to certify rehabilitations under 26 USC 47 (c) (2).

AB499-ASA1,9,4 (b) Charge a fee for a certification under par. (a) equal to 2 percent of the qualified rehabilitation expenditures for the historic property that is the subject of the certification, except that no fee under this paragraph may be less than $300 nor more than $20,000. The historical society shall collect the fee under this paragraph when an applicant applies for certification under par. (a). Fifty percent of the amount collected under this paragraph shall be deposited in the appropriation account under s. 20.143 (1) (gb).

AB499-ASA1, s. 9 Section 9. 59.69 (4m) of the statutes is amended to read:

AB499-ASA1,9,16 59.69 (4m) Historic preservation. A county, as an exercise of its zoning and police powers for the purpose of promoting the health, safety and general welfare of the community and of the state, may regulate by ordinance any place, structure or object with a special character, historic interest, aesthetic interest or other significant value, for the purpose of preserving the place, structure or object and its significant characteristics. The county may create a landmarks commission to designate historic landmarks and establish historic districts. The county may regulate all historic landmarks and all property within each historic district to preserve the historic landmarks and property within the district and the character of the district, and shall interpret the county's regulations liberally to facilitate the preservation and restoration of historic buildings and structures.

AB499-ASA1, s. 10 Section 10. 60.64 of the statutes is amended to read:

AB499-ASA1,9,25 60.64 Historic preservation. The town board, in the exercise of its zoning and police powers for the purpose of promoting the health, safety and general welfare of the community and of the state, may regulate any place, structure or object with a special character, historic interest, aesthetic interest or other significant value for the purpose of preserving the place, structure or object and its significant characteristics. The town board may create a landmarks commission to designate historic landmarks and establish historic districts. The board may regulate all historic landmarks and all property within each historic district to preserve the historic landmarks and property within the district and the character of the district, and shall interpret the board's regulations liberally to facilitate the preservation and restoration of historic buildings and structures.

AB499-ASA1, s. 11 Section 11. 62.23 (7) (em) of the statutes is amended to read:

AB499-ASA1,10,20 62.23 (7) (em) Historic preservation. A city, as an exercise of its zoning and police powers for the purpose of promoting the health, safety and general welfare of the community and of the state, may regulate by ordinance, or if a city contains any property that is listed on the national register of historic places in Wisconsin or the state register of historic places shall, not later than 1995, enact an ordinance to regulate, any place, structure or object with a special character, historic, archaeological or aesthetic interest, or other significant value, for the purpose of preserving the place, structure or object and its significant characteristics. A city may create a landmarks commission to designate historic or archaeological landmarks and establish historic districts. The city may regulate, or if the city contains any property that is listed on the national register of historic places in Wisconsin or the state register of historic places shall regulate, all historic or archaeological landmarks and all property within each historic district to preserve the historic or archaeological landmarks and property within the district and the character of the district, and shall interpret the city's regulations liberally to facilitate the preservation and restoration of historic buildings and structures.

AB499-ASA1, s. 12 Section 12. 71.07 (5m) (a) 4. of the statutes is amended to read:

AB499-ASA1,10,23 71.07 (5m) (a) 4. "Net tax liability" means a claimant's income tax liability after he or she completes the computations listed in s. 71.10 (4) (a) to (dr) (dm).