SB136: Bill Text

March 23, 2005 - Introduced by Senators Roessler, Brown, Erpenbach and Lassa, cosponsored by Representatives Underheim, Pettis, Nass, McCormick, Gunderson, Hines, Townsend and Zepnick. Referred to Committee on Job Creation, Economic Development and Consumer Affairs.

SB136,1,11 An Act to amend 71.07 (2dm) (a) 1., 71.07 (2dm) (a) 3., 71.07 (2dm) (f) 1., 71.07 (2dm) (j), 71.07 (2dm) (k), 71.07 (2dx) (a) 2., 71.07 (2dx) (b) (intro.), 71.07 (2dx) (c), 71.07 (2dx) (d), 71.28 (1dm) (a) 1., 71.28 (1dm) (a) 3., 71.28 (1dm) (f) 1., 71.28 (1dm) (j), 71.28 (1dm) (k), 71.28 (1dx) (a) 2., 71.28 (1dx) (b) (intro.), 71.28 (1dx) (c), 71.28 (1dx) (d), 71.47 (1dm) (a) 1., 71.47 (1dm) (a) 3., 71.47 (1dm) (f) 1., 71.47 (1dm) (j), 71.47 (1dm) (k), 71.47 (1dx) (a) 2., 71.47 (1dx) (b) (intro.), 71.47 (1dx) (c), 71.47 (1dx) (d), 234.03 (2m), 234.03 (11), 234.08 (1), 234.265 (2), 234.40 (4), 234.50 (4), 234.60 (2), 234.61 (1) and 234.66 (3) (b); and to create 234.63 and 560.799 of the statutes; relating to: creating income and franchise tax credits for businesses located in an airport development zone and a loan program for certain construction projects in an airport development zone.

Analysis by the Legislative Reference Bureau

This bill creates an airport development zone program that 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 that 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:

SB136, s. 1 Section 1. 71.07 (2dm) (a) 1. of the statutes is amended to read:

SB136,4,3 71.07 (2dm) (a) 1. "Certified" means entitled under s. 560.795 (3) (a) 4. to claim tax benefits or certified under s. 560.795 (5) or, 560.798 (3), or 560.799 (4).

SB136, s. 2 Section 2. 71.07 (2dm) (a) 3. of the statutes is amended to read:

SB136,4,7 71.07 (2dm) (a) 3. "Development zone" means a development opportunity zone under s. 560.795 (1) (e) and (f) or 560.798, or an airport development zone under s. 560.799.

SB136, s. 3 Section 3. 71.07 (2dm) (f) 1. of the statutes is amended to read:

SB136,4,11 71.07 (2dm) (f) 1. A copy of a verification from the department of commerce that the claimant may claim tax benefits under s. 560.795 (3) (a) 4. or is certified under s. 560.795 (5) or, 560.798 (3), or 560.799 (4).

SB136, s. 4 Section 4. 71.07 (2dm) (j) of the statutes is amended to read:

SB136,5,7 71.07 (2dm) (j) If a person who is entitled under s. 560.795 (3) (a) 4. to claim tax benefits becomes ineligible for such tax benefits, or if a person's certification under s. 560.795 (5) or, 560.798 (3) , or 560.799 (4) is revoked, that person may claim no credits under this subsection for the taxable year that includes the day on which the person becomes ineligible for tax benefits, the taxable year that includes the day on which the certification is revoked, or succeeding taxable years, and that person may carry over no unused credits from previous years to offset tax under this chapter for the taxable year that includes the day on which the person becomes ineligible for tax benefits, the taxable year that includes the day on which the certification is revoked, or succeeding taxable years.

SB136, s. 5 Section 5. 71.07 (2dm) (k) of the statutes is amended to read:

SB136,5,14 71.07 (2dm) (k) If a person who is entitled under s. 560.795 (3) (a) 4. to claim tax benefits or certified under s. 560.795 (5) or, 560.798 (3), or 560.799 (4) ceases business operations in the development zone during any of the taxable years that that zone exists, that person may not carry over to any taxable year following the year during which operations cease any unused credits from the taxable year during which operations cease or from previous taxable years.

SB136, s. 6 Section 6. 71.07 (2dx) (a) 2. of the statutes is amended to read:

SB136,5,19 71.07 (2dx) (a) 2. "Development zone" means a development zone under s. 560.70, a development opportunity zone under s. 560.795, an enterprise development zone under s. 560.797, or an agricultural development zone under s. 560.798, or an airport development zone under s. 560.799.

SB136, s. 7 Section 7. 71.07 (2dx) (b) (intro.) of the statutes is amended to read:

SB136,6,2 71.07 (2dx) (b) Credit. (intro.) Except as provided in pars. (be) and (bg) and in s. 73.03 (35), and subject to s. 560.785, for any taxable year for which the person is entitled under s. 560.795 (3) to claim tax benefits or certified under s. 560.765 (3), 560.797 (4) or, 560.798 (3), or 560.799 (4), any person may claim as a credit against taxes imposed on the person's income from the person's business activities in a development zone the following amounts:

SB136, s. 8 Section 8. 71.07 (2dx) (c) of the statutes is amended to read:

SB136,6,13 71.07 (2dx) (c) Credit precluded. If the certification of a person for tax benefits under s. 560.765 (3), 560.797 (4) or, 560.798 (3), or 560.799 (4) is revoked, or if the person becomes ineligible for tax benefits under s. 560.795 (3), that person may not claim credits under this subsection for the taxable year that includes the day on which the certification is revoked; the taxable year that includes the day on which the person becomes ineligible for tax benefits; or succeeding taxable years and that person may not carry over unused credits from previous years to offset tax under this chapter for the taxable year that includes the day on which certification is revoked; the taxable year that includes the day on which the person becomes ineligible for tax benefits; or succeeding taxable years.

SB136, s. 9 Section 9. 71.07 (2dx) (d) of the statutes is amended to read:

SB136,6,21 71.07 (2dx) (d) Carry-over precluded. If a person who is entitled under s. 560.795 (3) to claim tax benefits or certified under s. 560.765 (3), 560.797 (4) or, 560.798 (3), or 560.799 (4) for tax benefits ceases business operations in the development zone during any of the taxable years that that zone exists, that person may not carry over to any taxable year following the year during which operations cease any unused credits from the taxable year during which operations cease or from previous taxable years.

SB136, s. 10 Section 10. 71.28 (1dm) (a) 1. of the statutes is amended to read:

SB136,6,24 71.28 (1dm) (a) 1. "Certified" means entitled under s. 560.795 (3) (a) 4. to claim tax benefits or certified under s. 560.795 (5) or, 560.798 (3), or 560.799 (4).

SB136, s. 11 Section 11. 71.28 (1dm) (a) 3. of the statutes is amended to read:

SB136,7,3 71.28 (1dm) (a) 3. "Development zone" means a development opportunity zone under s. 560.795 (1) (e) and (f) or 560.798, or an airport development zone under s. 560.799.

SB136, s. 12 Section 12. 71.28 (1dm) (f) 1. of the statutes is amended to read:

SB136,7,7 71.28 (1dm) (f) 1. A copy of a verification from the department of commerce that the claimant may claim tax benefits under s. 560.795 (3) (a) 4. or is certified under s. 560.795 (5) or, 560.798 (3), or 560.799 (4).

SB136, s. 13 Section 13. 71.28 (1dm) (j) of the statutes is amended to read:

SB136,7,18 71.28 (1dm) (j) If a person who is entitled under s. 560.795 (3) (a) 4. to claim tax benefits becomes ineligible for such tax benefits, or if a person's certification under s. 560.795 (5) or, 560.798 (3) , or 560.799 (4) is revoked, that person may claim no credits under this subsection for the taxable year that includes the day on which the person becomes ineligible for tax benefits, the taxable year that includes the day on which the certification is revoked, or succeeding taxable years, and that person may carry over no unused credits from previous years to offset tax under this chapter for the taxable year that includes the day on which the person becomes ineligible for tax benefits, the taxable year that includes the day on which the certification is revoked, or succeeding taxable years.

SB136, s. 14 Section 14. 71.28 (1dm) (k) of the statutes is amended to read:

SB136,7,25 71.28 (1dm) (k) If a person who is entitled under s. 560.795 (3) (a) 4. to claim tax benefits or certified under s. 560.795 (5) or, 560.798 (3), or 560.799 (4) ceases business operations in the development zone during any of the taxable years that that zone exists, that person may not carry over to any taxable year following the year during which operations cease any unused credits from the taxable year during which operations cease or from previous taxable years.

SB136, s. 15 Section 15. 71.28 (1dx) (a) 2. of the statutes is amended to read:

SB136,8,5 71.28 (1dx) (a) 2. "Development zone" means a development zone under s. 560.70, a development opportunity zone under s. 560.795, an enterprise development zone under s. 560.797, or an agricultural development zone under s. 560.798, or an airport development zone under s. 560.799.

SB136, s. 16 Section 16. 71.28 (1dx) (b) (intro.) of the statutes is amended to read:

SB136,8,12 71.28 (1dx) (b) Credit. (intro.) Except as provided in pars. (be) and (bg) and in s. 73.03 (35), and subject to s. 560.785, for any taxable year for which the person is entitled under s. 560.795 (3) to claim tax benefits or certified under s. 560.765 (3), 560.797 (4) or, 560.798 (3), or 560.799 (4), any person may claim as a credit against taxes imposed on the person's income from the person's business activities in a development zone under this subchapter the following amounts:

SB136, s. 17 Section 17. 71.28 (1dx) (c) of the statutes is amended to read:

SB136,8,23 71.28 (1dx) (c) Credit precluded. If the certification of a person for tax benefits under s. 560.765 (3), 560.797 (4) or, 560.798 (3), or 560.799 (4) is revoked, or if the person becomes ineligible for tax benefits under s. 560.795 (3), that person may not claim credits under this subsection for the taxable year that includes the day on which the certification is revoked; the taxable year that includes the day on which the person becomes ineligible for tax benefits; or succeeding taxable years and that person may not carry over unused credits from previous years to offset tax under this chapter for the taxable year that includes the day on which certification is revoked; the taxable year that includes the day on which the person becomes ineligible for tax benefits; or succeeding taxable years.

SB136, s. 18 Section 18. 71.28 (1dx) (d) of the statutes is amended to read:

SB136,9,7 71.28 (1dx) (d) Carry-over precluded. If a person who is entitled under s. 560.795 (3) to claim tax benefits or certified under s. 560.765 (3), 560.797 (4) or, 560.798 (3), or 560.799 (4) for tax benefits ceases business operations in the development zone during any of the taxable years that that zone exists, that person may not carry over to any taxable year following the year during which operations cease any unused credits from the taxable year during which operations cease or from previous taxable years.

SB136, s. 19 Section 19. 71.47 (1dm) (a) 1. of the statutes is amended to read:

SB136,9,10 71.47 (1dm) (a) 1. "Certified" means entitled under s. 560.795 (3) (a) 4. to claim tax benefits or certified under s. 560.795 (5) or, 560.798 (3), or 560.799 (4).

SB136, s. 20 Section 20. 71.47 (1dm) (a) 3. of the statutes is amended to read:

SB136,9,14 71.47 (1dm) (a) 3. "Development zone" means a development opportunity zone under s. 560.795 (1) (e) and (f) or 560.798, or an airport development zone under s. 560.799.

SB136, s. 21 Section 21. 71.47 (1dm) (f) 1. of the statutes is amended to read:

SB136,9,18 71.47 (1dm) (f) 1. A copy of a verification from the department of commerce that the claimant may claim tax benefits under s. 560.795 (3) (a) 4. or is certified under s. 560.795 (5) or, 560.798 (3), or 560.799 (4).

SB136, s. 22 Section 22. 71.47 (1dm) (j) of the statutes is amended to read:

SB136,9,25 71.47 (1dm) (j) If a person who is entitled under s. 560.795 (3) (a) 4. to claim tax benefits becomes ineligible for such tax benefits, or if a person's certification under s. 560.795 (5) or, 560.798 (3) , or 560.799 (4) is revoked, that person may claim no credits under this subsection for the taxable year that includes the day on which the person becomes ineligible for tax benefits, the taxable year that includes the day on which the certification is revoked, or succeeding taxable years, and that person may carry over no unused credits from previous years to offset tax under this chapter for the taxable year that includes the day on which the person becomes ineligible for tax benefits, the taxable year that includes the day on which the certification is revoked, or succeeding taxable years.