AB607: Bill Text

LRB-4065/1

TKK:jld:jm

2011 - 2012 LEGISLATURE

2011 Assembly BILL 607

February 22, 2012 - Introduced by Representatives Litjens, Brooks, Endsley, Fields, Kerkman, Marklein, Molepske Jr, Petryk and Spanbauer, cosponsored by Senators Leibham, Lassa and Jauch. Referred to Committee on Jobs, Economy and Small Business.

AB607,2,2 An Act to repeal 234.01 (4n) (a) 3m. a. to d., 234.01 (4n) (a) 3m. e., 234.01 (4n) (b) 1., 234.01 (4n) (b) 2., 234.65 (1) (e), 234.65 (1) (f), 234.65 (1) (gm), 234.65 (1) (gp), 234.65 (2) (a) 2., 234.65 (2) (c), 234.65 (3) (a), 234.65 (3) (b), 234.65 (3) (d), 234.65 (3) (g), 234.65 (5) (b), 238.11 (3) and 238.11 (5) (b); to renumber 234.65 (5) (a), 234.65 (5) (c), 234.65 (5) (d) and 234.65 (5) (e); to renumber and amend 234.01 (4n) (a) 3m. (intro.), 234.01 (4n) (b) (intro.) and 234.65 (5) (intro.); to consolidate, renumber and amend 238.11 (5) (intro.) and (a); to amend 66.1103 (4m) (a) 2., 234.01 (4n) (a) 1., 234.01 (4n) (a) 3., 234.01 (4n) (a) 4., 234.65 (1) (a), 234.65 (1) (c), 234.65 (1) (g), 234.65 (1m), 234.65 (2) (a) 4., 234.65 (3) (intro.), 234.65 (3) (am), 234.65 (3) (dg), 234.65 (3g), 234.65 (3m), 234.65 (3r), 238.11 (1) and 238.25; and to create 234.65 (3) (bm) of the statutes; relating to: economic development activities of the Wisconsin Housing and Economic Development Authority.

Analysis by the Legislative Reference Bureau

This bill makes several changes to the laws governing economic development activities conducted by the Wisconsin Housing and Economic Development Authority (WHEDA).

Under current law, WHEDA may issue negotiable bonds and notes to finance economic development activities, including making economic development loans to finance economic development projects. Current law defines an economic development project to include land, plant, or equipment for facilities for all of the following: 1) manufacturing activities specified under a standard industrial classification manual published by the federal government printing office; 2) the retail sale of goods or services to consumers if the facilities are located in certain areas such as a tax incremental district, an environmental remediation tax incremental district, or a business incubator; 3) research and development activities relating to production of tangible products; and 4) activities of a long-term nature, such as research and development performed by firms engaged in manufacturing activities or firms engaged in research and development of manufactured products. This bill changes those portions of the definition of economic development project to include land, plant, or equipment for facilities for the following: 1) manufacturing or commercial real estate activities; 2) the retail sale of goods or services; 3) research and development activities; and 4) activities of a long-term nature, such as research and development or long-term working capital.

Current law permits WHEDA to issue not more than $200,000,000 in aggregate principal amount of bonds and notes for economic development activities. Current law also imposes certain limits on the total amounts of bonds and notes issued by WHEDA for other purposes, including for housing rehabilitation and for veterans housing loans and other veterans assistance programs, but provides that those limits do not apply to bonds and notes issued by WHEDA for economic development activities. This bill permits WHEDA to issue not more than $150,000,000 in aggregate principal amount of bonds and notes for economic development activities in any fiscal year. The bill also eliminates the exception to the applicability of certain limits on the amounts of bonds and notes issued by WHEDA for bonds and notes issued for economic development activities.

2011 Wisconsin Act 7 created the Wisconsin Economic Development Corporation (WEDC), a public entity authorized to develop and implement programs to provide support, expertise, and financial assistance to companies, including businesses seeking to begin or expand operations in this state, and to develop and implement other programs related to economic development in this state. Prior to the creation of WEDC, the Department of Commerce (Commerce) had responsibility over many economic development activities in Wisconsin. 2011 Wisconsin Act 32 (Act 32) transferred responsibility over economic development activities from Commerce to WEDC, including a requirement that WEDC consent to the issuance by WHEDA of bonds and notes to finance economic development activities. Act 32 also required WEDC to adopt rules to implement the financing of economic development loans by WHEDA and required businesses that received an economic development loan from WHEDA to submit a report to WEDC. Current law prohibits WHEDA from financing an economic development loan unless the business that would have received the loan notified WEDC of its intent to sign the contract. This bill eliminates the role of WEDC in overseeing the identified aspects of WHEDA's economic development activities and requires a business that receives an economic development loan to report directly to WHEDA.

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

AB607, s. 1 Section 1. 66.1103 (4m) (a) 2. of the statutes, as affected by 2011 Wisconsin Act 32, is amended to read:

AB607,3,8 66.1103 (4m) (a) 2. The municipality or county has received an estimate issued under s. 238.11 (5) (a), and the Wisconsin Economic Development Corporation has estimated whether the project which the municipality or county would finance under the revenue agreement is expected to eliminate, create, or maintain jobs on the project site and elsewhere in this state and the net number of jobs expected to be eliminated, created, or maintained as a result of the project.

AB607, s. 2 Section 2. 234.01 (4n) (a) 1. of the statutes is amended to read:

AB607,3,13 234.01 (4n) (a) 1. Facilities for manufacturing or commercial real estate activities specified under division D, standard industrial classification manual, federal office of management and budget, as published by the federal government printing office.

AB607, s. 3 Section 3. 234.01 (4n) (a) 3. of the statutes is amended to read:

AB607,3,16 234.01 (4n) (a) 3. Facilities for the storage or distribution of products of manufacturing activities under subd. 1., materials, components, or equipment.

AB607, s. 4 Section 4. 234.01 (4n) (a) 3m. (intro.) of the statutes is renumbered 234.01 (4n) (a) 3m. and amended to read:

AB607,4,4 234.01 (4n) (a) 3m. Facilities for the retail sale of goods or services to consumers if any of the following applies:.

AB607, s. 5 Section 5. 234.01 (4n) (a) 3m. a. to d. of the statutes are repealed.

AB607, s. 6 Section 6. 234.01 (4n) (a) 3m. e. of the statutes, as affected by 2011 Wisconsin Act 32, is repealed.

AB607, s. 7 Section 7. 234.01 (4n) (a) 4. of the statutes is amended to read:

AB607,4,10 234.01 (4n) (a) 4. Facilities for research and development activities relating to production of tangible products.

AB607, s. 8 Section 8. 234.01 (4n) (b) (intro.) of the statutes is renumbered 234.01 (4n) (b) and amended to read:

AB607,4,14 234.01 (4n) (b) Activities of a long-term nature, such as research and development, performed by any of the following: or long-term working capital.

AB607, s. 9 Section 9. 234.01 (4n) (b) 1. of the statutes is repealed.

AB607, s. 10 Section 10. 234.01 (4n) (b) 2. of the statutes is repealed.

AB607, s. 11 Section 11. 234.65 (1) (a) of the statutes, as affected by 2011 Wisconsin Act 32, is amended to read:

AB607,4,22 234.65 (1) (a) With the consent of the Wisconsin Economic Development Corporation and subject to par. (f), the The authority may issue its negotiable bonds and notes to finance its economic development activities authorized or required under this chapter, including financing economic development loans.

AB607, s. 12 Section 12. 234.65 (1) (c) of the statutes is amended to read:

AB607,5,2 234.65 (1) (c) The authority may not issue more than $200,000,000 $150,000,000 in aggregate principal amount of bonds and notes under this section in any fiscal year, excluding bonds and notes issued to refund outstanding bonds or notes issued under this section.

AB607, s. 13 Section 13. 234.65 (1) (e) of the statutes is repealed.

AB607, s. 14 Section 14. 234.65 (1) (f) of the statutes, as affected by 2011 Wisconsin Act 32, is repealed.

AB607, s. 15 Section 15. 234.65 (1) (g) of the statutes is amended to read:

AB607,5,13 234.65 (1) (g) In granting loans under this section the authority shall give preference to businesses which are more than 50% owned or controlled by women or minorities, to businesses that, together with all of their affiliates, subsidiaries and parent companies, have current gross annual sales of $5,000,000 or less or that employ 25 250 or fewer persons and to new businesses that have less than 50% of their ownership held or controlled by another business and have their principal business operations in this state.

AB607, s. 16 Section 16. 234.65 (1) (gm) of the statutes is repealed.

AB607, s. 17 Section 17. 234.65 (1) (gp) of the statutes is repealed.

AB607, s. 18 Section 18. 234.65 (1m) of the statutes, as affected by 2011 Wisconsin Act 32, is amended to read:

AB607,5,20 234.65 (1m) The Wisconsin Economic Development Corporation authority shall, in consultation with the authority, adopt rules and procedures to implement sub. (3).

AB607, s. 19 Section 19. 234.65 (2) (a) 2. of the statutes is repealed.

AB607, s. 20 Section 20. 234.65 (2) (a) 4. of the statutes is amended to read:

AB607,5,24 234.65 (2) (a) 4. The number of financial institutions participating in the economic development loan program project.

AB607, s. 21 Section 21. 234.65 (2) (c) of the statutes is repealed.

AB607, s. 22 Section 22. 234.65 (3) (intro.) of the statutes is amended to read:

AB607,6,3 234.65 (3) (intro.) Except as provided in sub. (3g), the The authority may finance an economic development loan only if all of the following conditions are met:

AB607, s. 23 Section 23. 234.65 (3) (a) of the statutes, as affected by 2011 Wisconsin Act 32, is repealed.

AB607, s. 24 Section 24. 234.65 (3) (am) of the statutes, as affected by 2011 Wisconsin Act 32, is amended to read: