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
1An Act to renumber 44.02 (24), 71.10 (4) (dr) and 101.121 (4) (a);
to renumber
2and amend 71.07 (9m) (a), 71.07 (9r) (a), 71.28 (6) (a) and 71.47 (6) (a);
to
3amend 13.48 (7), 13.48 (15), 59.69 (4m), 60.64, 62.23 (7) (em), 71.07 (5m) (a) 4.,
471.07 (9m) (c), 71.28 (6) (c), 71.47 (6) (c), 101.121 (4) (b), 101.19 (1) (intro.),
5254.61 (1) (f) 2. and 823.21; and
to create 13.48 (10) (c), 20.143 (1) (gb), 41.11
6(1) (bm), 44.02 (24) (b), 44.02 (24d), 71.07 (9m) (a) 2., 71.07 (9m) (g), 71.07 (9m)
7(h), 71.07 (9r) (a) 2., 71.28 (6) (a) 2., 71.28 (6) (g), 71.28 (6) (h), 71.47 (6) (a) 2.,
871.47 (6) (g), 71.47 (6) (h), 84.013 (3g), 86.36, 86.37, 101.121 (3) (c), 101.121 (4)
9(a) 2., 101.121 (5), 101.121 (6), 101.975 (4), 560.03 (21m) and 560.083 of the
10statutes;
relating to: the regulation, preservation, and restoration of historic
11buildings, the supplement to the federal historic rehabilitation tax credit and
12the state historic rehabilitation tax credit, requiring the certification of
13downtowns, promoting certain downtown areas in this state, highway projects
1involving business and downtown areas, the construction of major highway
2projects involving a bypass, granting rule-making authority, and making
3appropriations.
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-ASA1,7,72
13.48
(7) Biennial recommendations. The building commission shall prepare
3and formally adopt recommendations for the long-range state building program on
4a biennial basis. The building commission shall include in its report any projects
5proposed by the state fair park board involving a cost of not more than $250,000,
6together with the method of financing those projects proposed by the board, without
7recommendation. Unless a later date is requested by the building commission and
8approved by the joint committee on finance, the building commission shall, no later
9than the first Tuesday in April of each odd-numbered year, transmit the report
1prepared by the department of administration under s. 16.40 (20) and the
2commission's recommendations for the succeeding fiscal biennium that require
3legislative approval to the joint committee on finance in the form of proposed
4legislation prepared in proper form.
If the building commission includes any
5recommendation for construction of a state office building, the commission shall
6ensure that the recommended location of the building is consistent with construction
7requirements under sub. (10) (c).
AB499-ASA1,7,169
13.48
(10) (c) Unless otherwise required by law, the building commission shall
10not authorize the construction of any state office building, whether for utilization by
11a single agency or otherwise, to be located outside of a downtown area, as certified
12under s. 560.03 (21m), unless the cost of locating the building inside a downtown area
13is more than 10 percent greater than the average cost of locating the building in that
14portion of the geographic area that is served by the functions to be performed in the
15building on the date of initial occupancy outside of any downtown area, as
16determined by the department of administration.
AB499-ASA1,8,318
13.48
(15) Acquisition of leasehold interests. Subject to the requirements
19of s. 20.924 (1) (i), the building commission shall have the authority to acquire
20leasehold interests in land and buildings where such authority is not otherwise
21provided to an agency by law.
The building commission shall not approve any lease
22for state office facilities, whether for utilization by a single agency or otherwise, to
23be located outside of a downtown area, as certified under s. 560.03 (21m), unless the
24cost of locating the facilities inside a downtown area is more than 10 percent greater
25than the average cost of locating the facilities in that portion of the geographic area
1that is served by the functions to be performed in the facilities on the date of initial
2occupancy under the lease outside of any downtown area, as determined by the
3department of administration.
AB499-ASA1, s. 4
4Section
4. 20.143 (1) (gb) of the statutes is created to read:
AB499-ASA1,8,75
20.143
(1) (gb)
Certified downtowns and business district reconstruction. All
6moneys received from the historical society under s. 44.02 (24d) (b) for the purpose
7of providing staff for the administration of ss. 560.03 (21m) and 560.083.
AB499-ASA1,8,119
41.11
(1) (bm) Promote travel to business areas that are or have been the
10subject of revitalization efforts under the State Main Street Program under s.
11560.081 or that are certified downtowns under s. 560.03 (21m).
AB499-ASA1, s. 6
12Section
6. 44.02 (24) of the statutes is renumbered 44.02 (24) (a).
AB499-ASA1, s. 7
13Section
7. 44.02 (24) (b) of the statutes is created to read:
AB499-ASA1,8,1614
44.02
(24) (b) Charge a fee of $150 for a certification under par. (a). The
15historical society shall collect the fee under this paragraph when an applicant
16applies for certification under par. (a).
AB499-ASA1,8,2218
44.02
(24d) (a) Promulgate by rule procedures, standards, and forms necessary
19to certify, and shall certify, expenditures for preservation or rehabilitation of historic
20property for the purposes of ss. 71.07 (9m) (a), 71.28 (6) (a), and 71.47 (6) (a). Such
21standards shall be substantially similar to the standards used by the secretary of the
22interior to certify rehabilitations under
26 USC 47 (c) (2).
AB499-ASA1,9,423
(b) Charge a fee for a certification under par. (a) equal to 2 percent of the
24qualified rehabilitation expenditures for the historic property that is the subject of
25the certification, except that no fee under this paragraph may be less than $300 nor
1more than $20,000. The historical society shall collect the fee under this paragraph
2when an applicant applies for certification under par. (a). Fifty percent of the amount
3collected under this paragraph shall be deposited in the appropriation account under
4s. 20.143 (1) (gb).
AB499-ASA1,9,166
59.69
(4m) Historic preservation. A county, as an exercise of its zoning and
7police powers for the purpose of promoting the health, safety and general welfare of
8the community and of the state, may regulate by ordinance any place, structure or
9object with a special character, historic interest, aesthetic interest or other
10significant value, for the purpose of preserving the place, structure or object and its
11significant characteristics. The county may create a landmarks commission to
12designate historic landmarks and establish historic districts. The county may
13regulate all historic landmarks and all property within each historic district to
14preserve the historic landmarks and property within the district and the character
15of the district
, and shall interpret the county's regulations liberally to facilitate the
16preservation and restoration of historic buildings and structures.
AB499-ASA1,9,25
1860.64 Historic preservation. The town board, in the exercise of its zoning
19and police powers for the purpose of promoting the health, safety and general welfare
20of the community and of the state, may regulate any place, structure or object with
21a special character, historic interest, aesthetic interest or other significant value for
22the purpose of preserving the place, structure or object and its significant
23characteristics. The town board may create a landmarks commission to designate
24historic landmarks and establish historic districts. The board may regulate all
25historic landmarks and all property within each historic district to preserve the
1historic landmarks and property within the district and the character of the district
,
2and shall interpret the board's regulations liberally to facilitate the preservation and
3restoration of historic buildings and structures.
AB499-ASA1,10,205
62.23
(7) (em)
Historic preservation. A city, as an exercise of its zoning and
6police powers for the purpose of promoting the health, safety and general welfare of
7the community and of the state, may regulate by ordinance, or if a city contains any
8property that is listed on the national register of historic places in Wisconsin or the
9state register of historic places shall, not later than 1995, enact an ordinance to
10regulate, any place, structure or object with a special character, historic,
11archaeological or aesthetic interest, or other significant value, for the purpose of
12preserving the place, structure or object and its significant characteristics. A city
13may create a landmarks commission to designate historic or archaeological
14landmarks and establish historic districts. The city may regulate, or if the city
15contains any property that is listed on the national register of historic places in
16Wisconsin or the state register of historic places shall regulate, all historic or
17archaeological landmarks and all property within each historic district to preserve
18the historic or archaeological landmarks and property within the district and the
19character of the district
, and shall interpret the city's regulations liberally to
20facilitate the preservation and restoration of historic buildings and structures.
AB499-ASA1, s. 12
21Section
12. 71.07 (5m) (a) 4. of the statutes is amended to read:
AB499-ASA1,10,2322
71.07
(5m) (a) 4. "Net tax liability" means a claimant's income tax liability after
23he or she completes the computations listed in s. 71.10 (4) (a) to
(dr) (dm).
AB499-ASA1, s. 13
24Section
13. 71.07 (9m) (a) of the statutes is renumbered 71.07 (9m) (a) 1. and
25amended to read:
AB499-ASA1,11,8
171.07
(9m) (a) 1.
Any Except as provided in subd. 2., any person may
claim as
2a credit against
the taxes
otherwise due imposed under
this chapter
s. 71.02, up to
3the amount of those taxes, an amount equal to 5% of the costs of qualified
4rehabilitation expenditures, as defined in section
47 (c) (2) of the
internal revenue
5code Internal Revenue Code, for certified historic structures on property located in
6this state
, if the physical work of construction or destruction in preparation for
7construction begins after December 31, 1988, and the rehabilitated property is
8placed in service after June 30, 1989.
AB499-ASA1,11,1610
71.07
(9m) (a) 2. a. Any person may claim as a credit against the taxes
11otherwise due under this chapter, up to the amount of those taxes, an amount equal
12to 20 percent of the costs of qualified rehabilitation expenditures, as defined in
13section
47 (c) (2) of the Internal Revenue Code, for certified historic structures on
14property located in a certified downtown under s. 560.03 (21m) or included in a
15business revitalization under s. 560.081, if the physical work of construction or
16destruction in preparation for construction begins after December 31, 2003.
AB499-ASA1,12,717
b. A person whose qualified rehabilitation expenditures do not satisfy the
18adjusted basis requirement under section
47 (c) (1) of the Internal Revenue Code, but
19who otherwise would be eligible to claim the rehabilitation credit under section
47 20of the Internal Revenue Code, may claim as a credit against taxes imposed under s.
2171.02, up to the amount of those taxes, an amount equal to 20 percent of the costs of
22qualified rehabilitation expenditures, as defined in section
47 (c) (2) of the Internal
23Revenue Code, if the property is located in a certified downtown under s. 560.03
24(21m) or is included in a business area revitalization under s. 560.081; if the person's
25qualified rehabilitation expenditures, as defined in section
47 (c) (2) of the Internal
1Revenue Code, are at least $10,000; if the rehabilitation is approved by the state
2historical society before the physical work of construction, or destruction in
3preparation for construction, begins; if the person includes evidence of such approval
4with the person's return; if the physical work of construction, or destruction in
5preparation for construction, begins after December 31, 2003; and if the person
6claims the credit for the same taxable year in which the person would have claimed
7the credit for federal purposes.
AB499-ASA1,12,159
71.07
(9m) (c)
No Except as provided in par. (a) 2., no person may claim
the a 10credit under this subsection unless the claimant includes with the claimant's return
11evidence that the rehabilitation was
approved recommended by the state historic
12preservation officer for approval by the secretary of the interior under
36 CFR 67.6 13before the physical work of construction, or destruction in preparation for
14construction, began
; and the claimant claims the credit for the same taxable year in
15which the claimant would have claimed the credit for federal purposes.
AB499-ASA1,12,2417
71.07
(9m) (g) A person who has incurred qualified rehabilitation
18expenditures, as defined in section
47 (c) (2) of the Internal Revenue Code, for
19certified historic structures located in this state, as described in par. (a), but who is
20not a resident of this state and who is not required to file a return under this chapter,
21may enter into an agreement with another person, with the department's approval
22and in the manner prescribed by the department, so that the other person may claim
23the credit under this subsection, if the other person is subject to the taxes imposed
24under s. 71.02.
AB499-ASA1,13,9
171.07
(9m) (h) A person who receives a credit under this subsection shall add
2to the person's liability for taxes imposed under s. 71.02 one of the following
3percentages of the amount of the credits received under this subsection for
4rehabilitating or preserving the property if, within 5 years after the date on which
5the preservation or rehabilitation work that was the basis of the credit is completed,
6the person either sells or conveys the property by deed or land contract or the state
7historical society certifies to the department of revenue that the historic property has
8been altered to the extent that it does not comply with the standards promulgated
9under s. 44.02 (24d):
AB499-ASA1,13,1110
1. If the sale, conveyance, or noncompliance occurs during the first year after
11the date on which the preservation or rehabilitation is completed, 100 percent.
AB499-ASA1,13,1312
2. If the sale, conveyance, or noncompliance occurs during the 2nd year after
13the date on which the preservation or rehabilitation is completed, 80 percent.
AB499-ASA1,13,1514
3. If the sale, conveyance, or noncompliance occurs during the 3rd year after
15the date on which the preservation or rehabilitation is completed, 60 percent.
AB499-ASA1,13,1716
4. If the sale, conveyance, or noncompliance occurs during the 4th year after
17the date on which the preservation or rehabilitation is completed, 40 percent.
AB499-ASA1,13,1918
5. If the sale, conveyance, or noncompliance occurs during the 5th year after
19the date on which the preservation or rehabilitation is completed, 20 percent.
AB499-ASA1, s. 18
20Section
18. 71.07 (9r) (a) of the statutes is renumbered 71.07 (9r) (a) 1. and
21amended to read: