AB725: Bill Text

Analysis by the Legislative Reference Bureau

Establishment of the Build Milwaukee Initiative Zones

This bill delineates four areas or zones in the city of Milwaukee (build Milwaukee initiative zones) that are to be the subjects of targeted economic and community development as set forth in the bill from July 1, 2012, until June 30, 2016, at which time the bill's requirements except for reporting requirements, generally cease. The build Milwaukee initiative zones are comprised of geographic areas previously designated by ordinance by the common council of the city of Milwaukee.

Build Milwaukee initiative councils

The bill directs the common council of a 1st class city to establish a "build Milwaukee initiative council" for each build Milwaukee initiative zone. That common council is required to determine the number of members for each build Milwaukee initiative council. The members of a build Milwaukee initiative council serve three-year terms and are to be nominated by the mayor of the 1st class city and appointed with the advice and consent of the city's common council. The bill requires the build Milwaukee initiative councils to be strictly nonpartisan.

Under the bill, the common council determines the rules and procedures that govern each build Milwaukee initiative council established by the common council. Those rules and procedures must include all of the following:

1. The members of a build Milwaukee initiative council must be persons who reside in, or are affiliated with a business entity, including any nonprofit corporation, that is headquartered in, that council's build Milwaukee initiative zone.

2. The majority of a build Milwaukee initiative council's members must be persons who reside in that council's build Milwaukee initiative zone.

3. Each build Milwaukee initiative council must include at least one clergy member and at least two minority group members.

4. A vacancy on a build Milwaukee initiative council is to be filled in the same manner as the original appointment to the council for the remainder of that member's unexpired term, if any.

5. All build Milwaukee initiative council members must take and file the official oath.

Goals and implementation

Under the bill, each build Milwaukee initiative council must do all of the following with respect to that council's build Milwaukee initiative zone:

1. Establish clear and measurable goals for the implementation of economic development and housing programs in the build Milwaukee initiative zone.

2. Coordinate with the Wisconsin Economic Development Corporation (WEDC), the Wisconsin Housing and Economic Development Authority (WHEDA), the Wisconsin Health and Educational Facilities Authority (WHEFA), a 1st class city, and a county with a population of 750,000 or more to achieve the requirements of the bill discussed below.

3. Coordinate with public and private economic development entities located in any build Milwaukee initiative zone concerning economic development and housing programs in the council's build Milwaukee initiative zone.

4. To the extent possible, ensure that any job created in the build Milwaukee initiative zone is filled by a person who is qualified to perform that job and is a resident of that zone.

5. To the extent possible, ensure that any job created in the build Milwaukee initiative zone is filled by a person who is qualified to perform that job and is a veteran.

6. To the extent possible, ensure that any job created in the build Milwaukee initiative zone is filled by a person who is qualified to perform that job and has completed a job training program at a job training or workforce development center located in a 1st class city.

7. To the extent possible, coordinate the council's job placement efforts with labor unions, community development corporations, and job training or workforce development centers that are located in a 1st class city.

8. Encourage entrepreneurial activities and business growth in the build Milwaukee initiative zone, including by coordinating with one or more business incubators in that build Milwaukee initiative zone and with the Women's Business Initiative Corporation and other community development corporations.

9. Encourage and support homeownership under housing programs directed to the build Milwaukee initiative zone.

10. Attempt to ensure that any capital improvement project or other development or redevelopment in the build Milwaukee initiative zone is carried out in an environmentally sound manner.

11. Encourage the development of a wealth building center in the build Milwaukee initiative zone that provides comprehensive housing counseling to residents of that zone, encourages the development and retention of businesses in that zone, provides assistance and advice concerning educational opportunities for residents of that zone, and provides financial advice to residents of that zone.

Coordination of Economic Development and Housing Programs

Under current law, WEDC, WHEDA, and WHEFA are primarily responsible for administering this state's economic development and housing programs.

Under the bill, WEDC, WHEDA, and WHEFA, each in coordination with the others and in coordination with the appropriate county board and the build Milwaukee initiative councils must attempt to ensure that at least 10 percent of the total value of all loans, grants, tax benefits, and other financial assistance paid, awarded, or otherwise provided under economic development programs and housing programs by WEDC, WHEDA, and WHEFA is directed to economic development and homeownership in the build Milwaukee initiative zones.

The bill also requires that the board in a county with a population of 750,000 or more coordinate with WEDC and the build Milwaukee initiative councils to attempt to ensure that at least 20 percent of the total value of all loans, grants, and other financial assistance paid, awarded, or otherwise provided by the county under economic development programs and housing programs is directed to economic development and homeownership in the build Milwaukee initiative zones.

Similarly, the bill requires the common council of a 1st class city to coordinate with WEDC and the build Milwaukee initiative councils to attempt to ensure that at least 40 percent of the total value of all loans, grants, and other financial assistance paid, awarded, or otherwise provided by the city under economic development programs and housing programs is directed to economic development and homeownership in the build Milwaukee initiative zones.

Development Opportunity Zone

Under current law, specific areas in certain Wisconsin cities are designated as development opportunity zones. Taxpayers that conduct business or intend to conduct business in a development opportunity zone may receive certain tax benefits after submitting a qualifying project plan in conjunction with the local governing body of the city in which the development opportunity zone is located.

The bill creates a development opportunity zone in the city of Milwaukee that is made up of the build Milwaukee initiative zones. That development opportunity zone is effective for 48 months, beginning July 1, 2012. The total allowable tax benefits for that development opportunity zone is $10,000,000. However, under the bill, WEDC may extend the development opportunity zone for an additional 48 months and an additional $10,000,000 of total tax benefits if WEDC determines that the extension will support economic development in the city of Milwaukee.

Public Purchasing and Contracts with Financial Institutions

Under current law, the Department of Administration (DOA) is authorized to purchase, among other things, all necessary materials, supplies, equipment, and contractual services for all state agencies. DOA may delegate to a state agency the authority to make purchases for that agency. However, in making such a delegation, DOA must require the agency to adhere to all requirements imposed on DOA with respect to such purchases. The legislative and judicial branches make their own purchases. State purchasing contracts are generally required to be awarded based on the lowest responsible bid or most advantageous proposal.

Also under current law, the governing body of a county or city, or the purchasing agent appointed by the county's or city's governing body, is generally responsible for making purchases for the county or city.

Purchases directed to businesses in the build Milwaukee initiative zones

Under the bill, DOA and the legislative and judicial branches must attempt to ensure that at least 10 percent of the purchases made by DOA and the legislative and judicial branches in each fiscal year is paid to businesses that are located in a build Milwaukee initiative zone. Under the bill, DOA may purchase materials, supplies, equipment, and contractual services from any business located in a build Milwaukee initiative zone that submits a qualified responsible competitive bid that is no more than 5 percent higher than the apparent low bid or competitive proposal that is no more than 5 percent higher than the most advantageous proposal.

Also under the bill, the board of a county with a population of 750,000 or more must attempt to ensure that at least 20 percent of the total amount expended by that county in each fiscal year for any materials, supplies, equipment, or services for the various county offices is paid to businesses located in a build Milwaukee initiative zone.

Similarly, the bill requires the common council of a 1st class city to attempt to ensure that at least 40 percent of the total amount expended by the city in each fiscal year for any materials, supplies, equipment, or services for the various city offices is paid to businesses located in a build Milwaukee initiative zone.

Preference for qualifying financial institutions

Also under the bill, before DOA, the board of a county with a population of 750,000 or more, or the common council of a 1st class city enters into a contract with a financial institution for the deposit of public moneys with the financial institution, DOA, the county board, or the common council must consider whether the financial institution meets the criteria listed below. DOA, the county board, or the common council may give preference for such a contract if the financial institution meets all of the following criteria:

1. The financial institution has, in the preceding year, made loans to persons located in a build Milwaukee initiative zone. DOA, the county board, or the common council is required to take into account the amount of those loans.

2. The financial institution agrees to increase its lending activity to persons located in a build Milwaukee initiative zone and provides to DOA, the county board, or the common council, as appropriate, a plan to do so that includes the financial institution's proposal for using the deposits of DOA, the county board, or the common council to increase lending activity to persons located in a build Milwaukee initiative zone, particularly with respect to loans that encourage or support homeownership and business activity in the build Milwaukee initiative zone.

3. The financial institution has, in its most recent evaluation under the Community Reinvestment Act of 1977, received a rating of outstanding or satisfactory.

Reporting Requirements

Under the bill, annually, no later than March 1, WEDC, the board of a county with a population of 750,000 or more, and the common council of a 1st class city must each submit to the governor and the legislature, and make available to the public, a report that details all of the following:

1. For each build Milwaukee initiative zone, a list and description, including amounts, of all loans, grants, and other financial assistance that WEDC, WHEDA, and WHEFA, the county, or the city directed to economic development and homeownership in that build Milwaukee initiative zone during the preceding year.

2. An accounting of the total value of all loans, grants, and other financial assistance that WEDC, WHEDA, and WHEFA, the county, or the city directed to economic development and homeownership in the build Milwaukee initiative zones during the preceding year.

3. An accounting of the total value of all loans, grants, and other financial assistance that WEDC, WHEDA, and WHEFA, the county, or the city paid, awarded, or otherwise provided under economic development programs and housing programs during the preceding year.

Additionally, a county and a city submitting such a report must include in that report an accounting of the purchases the county or the city, as appropriate, made from businesses located in a build Milwaukee initiative zone.

Similarly, the bill requires DOA to maintain and annually publish data, and prepare and submit a report to the governor and to the legislature, on state purchases from businesses located in a build Milwaukee initiative zone and on the state's progress toward achieving compliance with the bill's requirements regarding such purchases.

For further information see the state and local 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:

AB725, s. 1 Section 1. 16.75 (1) (a) 1. of the statutes is amended to read:

AB725,6,10 16.75 (1) (a) 1. All orders awarded or contracts made by the department for all materials, supplies, equipment, and contractual services to be provided to any agency, except as otherwise provided in par. (c) and, subs. (2), (2g), (2m), (3m), (3p), (3t), (6), (7), (8), (9), (10e), and (10m), and (10r), and ss. 16.73 (4) (a), 16.751, 16.754, 16.964 (8), 50.05 (7) (f), 153.05 (2m) (a), and 287.15 (7), shall be awarded to the lowest responsible bidder, taking into consideration life cycle cost estimates under sub. (1m), when appropriate, the location of the agency, the quantities of the articles to be supplied, their conformity with the specifications, and the purposes for which they are required and the date of delivery.

AB725, s. 2 Section 2. 16.75 (3p) of the statutes is created to read:

AB725,6,13 16.75 (3p) (a) In this subsection, "build Milwaukee initiative zone" means a geographic area under s. 238.14 (2) (a), (b), (c), or (d).

AB725,6,17 (b) 1. The department and any agency making purchases under s. 16.74 shall attempt to ensure that at least 10 percent of the total amount expended under this subchapter in each fiscal year is paid to businesses located in any of the build Milwaukee initiative zones.

AB725,6,22 2. Except as provided in sub. (7), the department may purchase materials, supplies, equipment, and contractual services from any business located in a build Milwaukee initiative zone that submits a qualified responsible competitive bid that is no more than 5 percent higher than the apparent low bid or competitive proposal that is no more than 5 percent higher than the most advantageous proposal.

AB725,7,2 (c) The department shall maintain and annually publish data, and prepare and submit a report to the governor and to the chief clerk of each house of the legislature for distribution to the appropriate standing committees under s. 13.172 (3), on state purchases from businesses located in a build Milwaukee initiative zone and on the state's progress toward achieving compliance with par. (b) 1.

AB725,7,3 (d) This subsection does not apply before July 1, 2012, nor after June 30, 2016.

AB725, s. 3 Section 3. 16.75 (10r) of the statutes is created to read:

AB725,7,5 16.75 (10r) (a) In this subsection:

AB725,7,7 1. "Build Milwaukee initiative zone" means a geographic area under s. 238.14 (2) (a), (b), (c), or (d).

AB725,7,9 2. "Financial institution" means an insured depository institution, as defined in 12 USC 1813 (c) (2).

AB725,7,14 (b) Before entering into a contract with a financial institution for the deposit of state moneys with the financial institution, the department shall consider whether the financial institution meets any of the following criteria and may give preference in entering into such contracts to a financial institution that meets all of the following criteria:

AB725,7,18 1. The financial institution has, in the preceding year, made loans to persons located in a build Milwaukee initiative zone. The department shall consider the amount of the financial institution's lending activity in the build Milwaukee initiative zones in providing any preference under this paragraph.

AB725,7,24 2. The financial institution agrees to increase its lending activity to persons located in a build Milwaukee initiative zone and provides to the department a plan to do so. That plan shall include the financial institution's proposal for using the department's deposits to increase lending activity to persons located in a build Milwaukee initiative zone, particularly with respect to loans that encourage or support homeownership and business activity.

AB725,8,3 3. The financial institution has, in its most recent evaluation under the Community Reinvestment Act of 1977, received a rating as specified in 12 USC 2906 (b) of outstanding or satisfactory.

AB725,8,4 (c) This subsection does not apply before July 1, 2012, nor after June 30, 2016.

AB725, s. 4 Section 4. 16.855 (1) of the statutes, as affected by 2011 Wisconsin Act 32, is amended to read:

AB725,8,17 16.855 (1) The department shall let by contract to the lowest qualified responsible bidder all construction work when the estimated construction cost of the project exceeds $50,000, except for construction work authorized under s. 16.858 and except as provided in sub. (10m) or (10mm) or s. 13.48 (19). If a bidder is not a Wisconsin firm and the department determines that the state, foreign nation or subdivision thereof in which the bidder is domiciled grants a preference to bidders domiciled in that state, nation or subdivision in making governmental purchases, the department shall give a preference over that bidder to Wisconsin firms, if any, when awarding the contract, in the absence of compelling reasons to the contrary. The department may enter into agreements with states, foreign nations and subdivisions thereof for the purpose of implementing this subsection.

AB725, s. 5 Section 5. 16.855 (10mm) of the statutes is created to read:

AB725,8,20 16.855 (10mm) (a) In this subsection, "build Milwaukee initiative zone" means a geographic area under s. 238.14 (2) (a), (b), (c), or (d).

AB725,8,24 (b) 1. In awarding construction contracts the department shall attempt to ensure that 10 percent of the total amount expended in each fiscal year is awarded to contractors and subcontractors located in any of the build Milwaukee initiative zones.

AB725,9,3 2. The department may award a contract to a business that is located in a build Milwaukee initiative zone that submits a qualified responsible bid that is no more than 5 percent higher than the apparent low bid.

AB725,9,6 (c) Upon completion of a contract, the contractor shall report to the department any amount of the contract that was subcontracted to a business that is located in a build Milwaukee initiative zone.

AB725,9,9 (d) The department shall maintain and annually publish data on contracts awarded under this subsection to businesses located in a build Milwaukee initiative zone.

AB725,9,10 (e) This subsection does not apply before July 1, 2012, nor after June 30, 2016.

AB725, s. 6 Section 6. 34.05 (4) of the statutes is created to read:

AB725,9,14 34.05 (4) Nothing in this chapter shall be construed to prohibit contracts for deposit entered into under s. 16.75 (10r) or any similar contract entered into by the governing body of a county or municipality.

AB725, s. 7 Section 7. 59.83 of the statutes is created to read:

AB725,9,16 59.83 Build Milwaukee initiative. (1) Definitions. In this section:

AB725,9,18 (a) "Build Milwaukee initiative council" means a council established under s. 62.79 (2).

AB725,9,20 (b) "Build Milwaukee initiative zone" means a geographic area under s. 238.14 (2) (a), (b), (c), or (d).