LRB-3855/2
TKK:wlj&bx:nwn
2007 - 2008 LEGISLATURE
January 30, 2008 - Introduced by Senators Sullivan, Cowles, Lassa, Vinehout,
Roessler, Harsdorf, Lehman and Olsen, cosponsored by Representatives
Jeskewitz, Strachota, Fields, Hilgenberg, Van Roy, Ballweg, Kerkman,
Smith, Mason, Musser, M. Williams, Hahn, Davis, Hraychuck, Mursau,
Sheridan, Vos, Owens, Hintz, Petersen, Sinicki, Kramer, Moulton and
Garthwaite. Referred to Committee on Economic Development.
SB434,2,16
1An Act to repeal 20.143 (1) (x), 93.47, 234.66, 560.03 (15), 560.038, 560.039,
2560.10, 560.11 (1) (b), 560.13 (7), 560.137 (1) (a), 560.137 (1) (c), 560.137 (2) (a)
3(intro.), 560.137 (2) (bm), 560.137 (2) (c), 560.137 (2) (d), 560.137 (2) (e), 560.137
4(2) (f), 560.14 (3m), 560.155 (2) (b) 3., 560.155 (4), 560.17 (5r), 560.17 (6m) (b),
5560.205 (3) (c), 560.42 (5), 560.52, 560.55, 560.607 (2), 560.81 (title), 560.81 (1)
6to (4), 560.82 (5) (a), 560.83 (title), 560.83 (1), 560.83 (5), 560.91, 560.915,
7560.925 and 560.935;
to renumber 560.137 (1) (b), 560.137 (2) (a) 1., 560.137
8(2) (a) 2., 560.137 (3m), 560.138 (5), 560.83 (2), 560.837 (1) (a) and 560.837 (2);
9to renumber and amend 560.07 (3) (b), 560.17 (6m) (a), 560.80 (5), 560.81
10(intro.), 560.82 (1), 560.82 (5) (b), 560.83 (3), 560.83 (4) (a), 560.83 (4) (b),
11560.837 (1) (intro.) and 560.837 (1) (b);
to amend 20.002 (11) (d) 3., 20.115 (4)
12(c), 20.115 (4) (r), 20.143 (1) (fm), 20.143 (1) (ie), 20.143 (1) (ig), 20.143 (1) (im),
1320.143 (1) (kg), 20.143 (1) (kj), 25.17 (1) (hm), 93.46 (2) (e), 234.03 (2m), 234.265
14(2), 234.40 (4), 234.50 (4), 234.60 (2), 234.61 (1), 234.63 (2) (b), 234.65 (1) (b),
1560.07 (9), 560.138 (3), 560.14 (3) (c) 8., 560.17 (7) (a), subchapter VII (title) of
2chapter 560 [precedes 560.80], 560.80 (3m), 560.80 (4), 560.80 (5m), 560.82
3(title), 560.82 (2) (intro.), 560.82 (3) (intro.), 560.82 (4) (intro.), 560.82 (4) (a)
4(intro.), 560.82 (4) (a) 2., 560.82 (4) (b), 560.84 (1) (intro.), 560.84 (1) (b) 1.,
5560.84 (1) (e) 1., 560.84 (1) (f), 560.84 (2) (a) 1., 560.85 (2), 560.85 (3) (a), 560.85
6(3) (b) and 560.905 (2); and
to create 13.94 (1) (mm), 23.167, 23.169, 36.09 (1)
7(am), 36.11 (29r), 38.04 (1m), 38.04 (10m), 41.11 (1g), 41.11 (1r), 84.01 (6m),
884.01 (11m), 93.07 (18), 93.07 (20), 234.032, 234.255, 560.001 (1m), 560.01 (2)
9(ae), 560.01 (2) (am), 560.01 (2) (as), 560.07 (8) (a), 560.07 (8) (b), 560.07 (8) (c),
10560.138 (2m) (intro.), 560.138 (5) (b), 560.139 (3) (title), 560.155 (5), 560.29 (3),
11560.80 (5) (a) and (b), 560.80 (5) (c) and 560.82 (1m) (b) and (c) of the statutes;
12relating to: cleanup and consolidation of Department of Commerce economic
13development programs, establishing a comprehensive annual reporting
14requirement, requiring the development of programmatic goals and
15accountability measures for economic development grants and loans, requiring
16the exercise of rule-making authority, and making an appropriation.
Analysis by the Legislative Reference Bureau
Pursuant to the recommendations of the Legislative Audit Bureau in Report
06-9, "A Review of State Economic Development Programs," this bill makes a
number of changes to the state's economic development programs.
Definition of an economic development program
Under current law, there is no uniform definition of an economic development
program. This bill defines "economic development program" as a program or activity
having the primary purpose of encouraging the establishment and growth of
business in the state, including the creation and retention of jobs, and that satisfies
all of the following:
1. The program receives funding from the state or federal government that is
allocated through an appropriation under state law.
2. The program provides financial assistance, tax benefits, or direct services to
specific industries, businesses, local governments, or organizations.
Cleanup and consolidation
The bill eliminates the following unfunded or inactive economic development
programs administered by the Department of Commerce (Commerce): minority
nonprofit corporation grants; minority business incubator grants; the industrial
building construction loan fund; community-based economic development revolving
loan fund grants; low-income rural municipality economic development loans; small
business innovative research program grants; and the following technology-based
economic development programs: the seed-capital fund, the information exchange
clearinghouse, and the manufacturing modernization program.
The bill eliminates the sustainable agriculture grant program administered by
the Department of Agriculture, Trade and Consumer Protection (DATCP).
The bill eliminates the beginning farmer program administered by the
Wisconsin Housing and Economic Development Authority (WHEDA).
This bill consolidates the following grant and loan programs, administered by
Commerce, into one minority business grant and loan program: minority business
early planning grants; minority business development grants and loans; minority
business development finance and education training grants; and minority business
revolving fund grants and loans.
The bill also consolidates the gaming economic development grant and loan
program and the gaming economic diversification grant and loan program into one
gaming economic development grant and loan program.
Current law authorizes Commerce to award early planning project grants to
certain eligible recipients. An "early planning project" is defined under current law
as "the preliminary stages of considering and planning the start-up or expansion of
a business that will be a minority business." Under current law, eligible recipients
include individuals who are minority group members and residents of this state. The
bill does not change the definition of "early planning project" or "eligible recipient."
The bill transfers to the Minority Business Development Board the authority to
award grants and permits the board to award early planning project loans as well
as grants.
Changes to reporting requirements
Under current law, Commerce must do all of the following:
1. Submit a biennial report to the legislature on the performance and
operations of Commerce in the preceding biennium.
2. Periodically prepare an inventory of existing entrepreneurial assistance
programs in Wisconsin.
3. Prepare a report documenting the results of an annual survey of Wisconsin
businesses concerning the formation of businesses and obstacles to the formation of
businesses in Wisconsin.
4. Prepare employment impact estimates related to industrial development
revenue bonding.
5. Submit a report to the State of Wisconsin Investment Board describing the
types of investments in businesses in Wisconsin that will have the greatest likelihood
of enhancing economic development in Wisconsin.
6. Submit a report to both the Department of Natural Resources (DNR) and the
federal Environmental Protection Agency concerning the compliance of the state
small business stationary source technical and environmental compliance
assistance program with certain federal laws.
In addition, under current law, Commerce must submit reports to the
legislature incorporating the following information concerning economic
development programs administered by Commerce: job gains due to funds provided
to Forward Wisconsin, Inc.; the effects of the State Main Street Program on business
revitalization in commercial areas having historic significance; the effectiveness of
the Brownfields Grant Program; the operation and effectiveness of the Business
Employees' Skills Training Grant Program; the total amount of tax credits claimed
under the Early State Seed Investment Credit and Angel Investment Credit
programs; a description of the activities of the Business Development Assistance
Center; a description of Commerce's activities and the results of Commerce's
activities coordinating entrepreneurial assistance programs and intermediary
assistance programs offered by state agencies; Commerce's technology-based
economic development activities; and the disposition and repayment of moneys
distributed under the seed capital fund.
The economic development reporting requirements under current law are not
uniform: some reports are required annually, others biennially or periodically; some
reports are due in January, others in March, September, October, and December.
The bill eliminates all but the following separate reports required of Commerce:
1. A biennial report to the legislature on the performance and operations of
Commerce in the preceding biennium.
2. A report to the State of Wisconsin Investment Board identifying
recommended investments to enhance economic development in the state.
3. A report on the effects of the State Main Street Program.
4. A report regarding the business development promotion activities conducted
by Forward Wisconsin, Inc.
The bill requires Commerce to annually submit a comprehensive report
assessing economic development programs administered by Commerce to the Joint
Legislative Audit Committee and to the appropriate standing committees of the
assembly and the senate. The bill also restores a requirement, repealed under
2007
Wisconsin Act 20 (the budget act), that Commerce evaluate certified capital
investments made under Subchapter II of Chapter 560, 2005 statutes.
In addition, under the bill, each of the following entities must submit to the
legislature a comprehensive annual report detailing its economic development
activities within the preceding fiscal year: 1) the University of Wisconsin System;
2) DATCP; 3) DNR; 4) WHEDA; 5) the Department of Tourism; 6) the Technical
College System; and 7) the Department of Transportation. The comprehensive
reports of all eight entities are due to the legislature by October 1 of each year.
The state entity annual reports must include information about the number of
grants and loans made by each entity in each year; the amount of each grant and
loan; the name of the recipient of each grant and loan; and the sum total of all grants
and loans received by each recipient. The seven enumerated state entities must
collaborate with Commerce to make the reported information available to the public
on the Internet.
Programmatic goals and benchmarks
The bill also requires Commerce and the seven enumerated state entities to
establish specific goals for each of the economic development programs administered
by each entity; quantifiable benchmarks for the program goals; and methods for
evaluating the projected or anticipated results of the program. Commerce and the
other seven entities must independently verify the accuracy of information reported
by the recipient of an economic development grant or loan.
Commerce and the seven enumerated state entities must promulgate the
following rules governing economic development grants and loans:
1. A requirement that the recipient of an economic development grant or loan
of at least $100,000 submit to the administering state entity a verified statement
signed by both an independent accountant licensed or certified by the Accounting
Examining Board in the Department of Regulation and Licensing and the director
or principal officer of the recipient. The rule must also require the recipient of such
a grant or loan to make available for inspection the documents supporting the
verified statement.
2. Policies and procedures for the administering state entity to recoup economic
development grant or loan payments, withhold future grant or loan payments, and
impose a fine or penalty upon the recipient of an economic development grant or loan
or tax benefits which submits false or misleading information to the administering
state entity has failed to comply with the requirements of a contract entered into with
the administering state entity and which has failed to provide a satisfactory
explanation to the administering state entity for the failure to comply.
Audit by the Legislative Audit Bureau
The bill requires the Legislative Audit Bureau to prepare a financial and
program evaluation audit of state economic development programs administered by
the eight state entities no later than July 1, 2012.
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:
SB434, s. 1
1Section
1. 13.94 (1) (mm) of the statutes is created to read:
SB434,6,52
13.94
(1) (mm) No later than July 1, 2012, prepare a financial and performance
3evaluation audit of the economic development programs administered by the
4department of commerce, the University of Wisconsin System, the department of
5agriculture, trade and consumer protection, the department of natural resources, the
1Wisconsin Housing and Economic Development Authority, the department of
2tourism, the technical college system, and the department of transportation. In this
3paragraph, economic development program has the meaning given in s. 560.001
4(1m). The legislative audit bureau shall file a copy of the report of the audit under
5this paragraph with the distributees specified in par. (b).
SB434, s. 2
6Section
2. 20.002 (11) (d) 3. of the statutes is amended to read:
SB434,6,87
20.002
(11) (d) 3. The industrial building construction loan fund under s.
8560.10
, 2005 stats.