LRB-3761/2
JK&RJM:kjf:jf
2003 - 2004 LEGISLATURE
February 9, 2004 - Introduced by Senators Roessler, Brown, Kanavas, Welch and
Zien, cosponsored by Representatives
Underheim, Nischke, Ott, Van Roy and
Weber. Referred to Committee on Economic Development, Job Creation and
Housing.
SB444,1,11
1An Act to amend 71.07 (2dm) (a) 1., 71.07 (2dm) (a) 3., 71.07 (2dm) (f) 1., 71.07
2(2dm) (j), 71.07 (2dm) (k), 71.07 (2dx) (a) 2., 71.07 (2dx) (b) (intro.), 71.07 (2dx)
3(c), 71.07 (2dx) (d), 71.28 (1dm) (a) 1., 71.28 (1dm) (a) 3., 71.28 (1dm) (f) 1., 71.28
4(1dm) (j), 71.28 (1dm) (k), 71.28 (1dx) (a) 2., 71.28 (1dx) (b) (intro.), 71.28 (1dx)
5(c), 71.28 (1dx) (d), 71.47 (1dm) (a) 1., 71.47 (1dm) (a) 3., 71.47 (1dm) (f) 1., 71.47
6(1dm) (j), 71.47 (1dm) (k), 71.47 (1dx) (a) 2., 71.47 (1dx) (b) (intro.), 71.47 (1dx)
7(c), 71.47 (1dx) (d), 234.03 (2m), 234.03 (11), 234.08 (1), 234.265 (2), 234.40 (4),
8234.50 (4), 234.60 (2), 234.61 (1) and 234.66 (3) (b); and
to create 234.63 and
9560.799 of the statutes;
relating to: creating income and franchise tax credits
10for businesses located in an airport development zone and a loan program for
11certain construction projects in an airport development zone.
Analysis by the Legislative Reference Bureau
This bill creates an airport development zone program which awards income
and franchise tax credits to certain businesses that locate in areas designated as
airport development zones. The bill also creates an airport development zone loan
program which awards loans to finance the construction or expansion of airports in
airport development zones. Significant provisions include:
Designation of airport development zones
Under the bill, the Department of Commerce (department) may designate an
area in this state as an airport development zone if the department determines all
of the following:
1. That a project to construct or expand an airport within the area is desired
by the governing body of each city, village, and town in which territory of the airport
development zone will be located.
2. That the airport development project serves a public purpose.
3. That the airport development project will likely retain or increase
employment in the state.
4. That the airport development project is not likely to occur or continue
without the department's designation of the area as an airport development zone.
5. That the airport development project will likely positively affect the area.
In addition, the bill requires the department to consider all of the following in
making a decision concerning a designation as an airport development zone:
1. The extent of poverty, unemployment, or other factors contributing to
general economic hardship in the area.
2. The prospects for new investment and economic development in the area.
3. The amount of investment that is likely to result from the airport
development project.
4. The number of full-time jobs that are likely to be created as a result of the
airport development project.
5. The number of full-time jobs that are likely to be available to the target
population as a result of the project.
6. The competitive effect of designating the area as an airport development
zone on other businesses in the area.
7. The needs of other areas of the state.
8. Any other factors that the department considers relevant.
Under the bill, the department may not designate as an airport development
zone, or as any part of an airport development zone, an area that is located within
the boundaries of an area that is designated as a development zone, development
opportunity zone, or enterprise development zone under current law.
The bill requires the department to specify the length of time, not to exceed 84
months, that a designation is effective and requires the department to establish a
limit, not to exceed $3,000,000, for tax credits applicable to each airport development
zone. In addition, the department must annually estimate the amount of forgone
state revenue because of tax credits claimed by persons in each airport development
zone. The designation of an area as an airport development zone expires before the
date initially set by the department, if the department determines that the forgone
tax revenues will equal or exceed the limit on tax credits established for the airport
development zone.
Certification for tax credits
The bill allows a person that intends to operate a place of business in an airport
development zone to apply to the department for tax credits. The application must
specify all of the following:
1. The name and address of the person's business for which tax credits will be
claimed.
2. The appropriate Wisconsin tax identification number of the person.
3. The names and addresses of other locations outside of the airport
development zone where the person conducts business and a description of the
business activities conducted at those locations.
4. The amount that the person proposes to invest in the place of business or to
spend on the construction, rehabilitation, repair, or remodeling of a building in the
airport development zone.
5. The estimated total investment of the person in the airport development
zone.
6. The estimated number of full-time jobs that will be created, retained, or
substantially upgraded as a result of the person's place of business in the airport
development zone in relation to the amount of tax credits estimated for the person.
7. The person's plans to make reasonable attempts to hire employees from a
specified target population.
8. The estimated number of full-time jobs that will be filled by members of the
target population.
9. Any other information required by the department or the Department of
Revenue.
The bill requires the department to revoke a person's certification if the
designation of the applicable airport development zone expires. In addition, a
person's certification must be revoked if the person supplied false or misleading
information to obtain the tax credits; leaves the airport development zone to conduct
substantially the same business outside of the airport development zone; or ceases
operations in the airport development zone and does not renew operation of the
business or a similar business in the airport development zone within 12 months.
Tax credits
A person who is certified to claim tax credits based on the person's business
activities in an airport development zone may claim the development zone's capital
investment credit under current law. The amount of that credit is equal to 3 percent
of the purchase price of depreciable, tangible personal property or 3 percent of the
amount expended to acquire, construct, rehabilitate, remodel, or repair real property
that is located in the development zone. In addition, the person may claim a
development zone's credit under current law based on the number of full-time jobs
created in the airport development zone.
Airport development zone loan program
The bill establishes a loan program to be known as the "Airport Development
Zone Loan Program." Under the program, the Wisconsin Housing and Economic
Development Authority (WHEDA) is authorized to award loans to a business for the
purpose of financing the construction or expansion of an airport in an airport
development zone, including financing activities to encourage airlines to serve the
airport or to increase the number of flights to and from the airport. Under the bill,
a loan's interest rate must be determined with reference to the amount required to
repay the principal and interest of the bonds described below, plus the cost of issuing
the bonds.
The bill provides that the program is to be funded from the proceeds of bonds
issued by WHEDA in an aggregate principal amount of up to $200,000,000. The debt
service on the bonds, as well as all costs associated with the issuance of the bonds,
is to be paid by the businesses granted the loans under the program.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB444, s. 1
1Section
1. 71.07 (2dm) (a) 1. of the statutes is amended to read:
SB444,4,32
71.07
(2dm) (a) 1. "Certified" means entitled under s. 560.795 (3) (a) 4. to claim
3tax benefits or certified under s. 560.795 (5)
or, 560.798 (3)
, or 560.799 (4).
SB444, s. 2
4Section
2. 71.07 (2dm) (a) 3. of the statutes is amended to read:
SB444,4,75
71.07
(2dm) (a) 3. "Development zone" means a development opportunity zone
6under s. 560.795 (1) (e) and (f) or 560.798
, or an airport development zone under s.
7560.799.
SB444, s. 3
8Section
3. 71.07 (2dm) (f) 1. of the statutes is amended to read:
SB444,4,119
71.07
(2dm) (f) 1. A copy of a verification from the department of commerce that
10the claimant may claim tax benefits under s. 560.795 (3) (a) 4. or is certified under
11s. 560.795 (5)
or, 560.798 (3)
, or 560.799 (4).
SB444, s. 4
12Section
4. 71.07 (2dm) (j) of the statutes is amended to read:
SB444,5,613
71.07
(2dm) (j) If a person who is entitled under s. 560.795 (3) (a) 4. to claim
14tax benefits becomes ineligible for such tax benefits, or if a person's certification
15under s. 560.795 (5)
or, 560.798 (3)
, or 560.799 (4) is revoked, that person may claim
16no credits under this subsection for the taxable year that includes the day on which
1the person becomes ineligible for tax benefits, the taxable year that includes the day
2on which the certification is revoked, or succeeding taxable years, and that person
3may carry over no unused credits from previous years to offset tax under this chapter
4for the taxable year that includes the day on which the person becomes ineligible for
5tax benefits, the taxable year that includes the day on which the certification is
6revoked, or succeeding taxable years.
SB444, s. 5
7Section
5. 71.07 (2dm) (k) of the statutes is amended to read:
SB444,5,138
71.07
(2dm) (k) If a person who is entitled under s. 560.795 (3) (a) 4. to claim
9tax benefits or certified under s. 560.795 (5)
or, 560.798 (3)
, or 560.799 (4) ceases
10business operations in the development zone during any of the taxable years that
11that zone exists, that person may not carry over to any taxable year following the
12year during which operations cease any unused credits from the taxable year during
13which operations cease or from previous taxable years.
SB444, s. 6
14Section
6. 71.07 (2dx) (a) 2. of the statutes is amended to read:
SB444,5,1815
71.07
(2dx) (a) 2. "Development zone" means a development zone under s.
16560.70, a development opportunity zone under s. 560.795, an enterprise
17development zone under s. 560.797,
or an agricultural development zone under s.
18560.798
, or an airport development zone under s. 560.799.
SB444, s. 7
19Section
7. 71.07 (2dx) (b) (intro.) of the statutes is amended to read:
SB444,5,2520
71.07
(2dx) (b)
Credit. (intro.) Except as provided in pars. (be) and (bg) and
21in s. 73.03 (35), and subject to s. 560.785, for any taxable year for which the person
22is entitled under s. 560.795 (3) to claim tax benefits or certified under s. 560.765 (3),
23560.797 (4)
or, 560.798 (3)
, or 560.799 (4), any person may claim as a credit against
24taxes imposed on the person's income from the person's business activities in a
25development zone the following amounts:
SB444, s. 8
1Section
8. 71.07 (2dx) (c) of the statutes is amended to read: