Wisconsin Legislature: Register480A

(3) The amount of funds requested for each job to be created or retained

may not exceed $20,000. The amount awarded shall depend upon the department's consideration of the factors in sub. (2).

DOD 6.16 Public facilities economic development program. (1) The department may award a grant under the public facilities economic development program upon receipt and consideration of an application from an eligible local government if the department determines all of the following:

(a) Each of the items in s. DOD 6.15 (1) (a), (c), (d), (e), (g) and (h).

(b) The local government has a citizen participation plan as required under 24 CFR 570.486 (a).

(c) The local government will contribute at least 25% of the total cost of the project from funding sources other than the federal or state government.

(2) To make a determination under sub. (1) (a), the department shall consider each of the items in s. DOD 6.15 (2) (a) to (f), (h) and (i).

(3) The amount of public facility economic development program funds requested by an eligible local government for each job created or retained may not exceed $10,000. The amount awarded shall depend upon the department's consideration of the factors set forth in sub. (2).

SECTION 6. DOD 6.18 (1) to (4) (a) are amended to read:

DOD 6.18 (1) Out of each annual allotment grant of federal Wisconsin development CDBG funds administered by the department from the federal government, the department may set aside up to 75% for the economic development program, up to 20% for the public facilities economic development program, or and up to 75% for the public facilities competition program administered under subch. I. The department shall announce the amount of the set aside no later than August 1 of the preceding year. The department shall report semiannually to the chairs of the economic development standing committees of the legislature on the status of the program. Funds in Program income received by the department's revolving loan fund, consisting of department from repayments from of prior economic development program awards, shall be used allocated for economic development, public facilities economic development or public facilities program awards.

(2) (a) The maximum amount available of CDBG funds that may be awarded to any local government for the purpose of making a loan to any a business under the economic development program is shall be $750,000 $1 million. The maximum amount available to any business during any 5 year period shall be $1 million. The maximum aggregate amount available of CDBG funds that may be awarded under the economic development program to any local government, including any amount loaned to a business, is shall be 1.5 million per calendar year.

(b) The maximum amount available to assist any of CDBG funds that may be awarded to any local government for the benefit of a business under the public facilities economic development program is $750,000 shall be $500,000. The maximum aggregate amount available of CDBG funds that may be awarded to any local government under the public facilities economic development program is $1.5 shall be $1 million per calendar year.

(3) Each recipient of eligible local government that is awarded economic development program funds may retain a cumulative amount of program income from all grants awarded after January 1, 1987 subject to subs. (4), and (5) and (6) for the purpose of establishing to establish and capitalize an economic development revolving loan fund. The recipient of funds A local government that establishes an economic development revolving loan fund must comply shall administer and use the fund in accordance with all of the requirements established by the federal government under 24 CFR 570.489 (f) and the procedures established by the department.

(4) (a) Retained Subject to pars. (am) to (e) and subs. (5) and (6), retained cumulative program income from grants awarded after January 1, 1987 may not exceed:

1. $100,000 for an applicant a local government with a population of 1,000 or less.

2. $150,000 for an applicant a local government with a population of more than 1,000 but less than 2,000.

3. $250,000 for an applicant a local government with a population of 2,000 or more but less than 4,000.

4. $500,000 for an applicant a local government with a population of 4,000 or more but less than 10,000.

5. $750,000 for an applicant a local government with a population of 10,000 or more.

SECTION 7. DOD 6.18 (4) (am) is created to read:

DOD 6.18 (4) (am) As an alternative to the cumulative program income limits in par. (a) a local government may elect to retain program income from grants received prior to January 1, 1987 in excess of the limits in par. (a). A local government shall make the election on a form prescribed by the department. Any local government that makes the election under this paragraph, may not retain program income generated after the effective date of this rule from grants received on January 1, 1987 or thereafter except as provided in sub. (5).

SECTION 8. DOD 6.18 (4) (b) to (d) are amended to read:

(b) All program income from grants received by a local government in excess of these amounts the limits in par. (a) or (am), if the local government makes the election under par. (am), shall be returned paid to the state department within 30 days of receipt. The department shall use such program income to fund eligible economic development, public facilities economic development and public facilities activities, except that the department may waive this requirement to the extent such income is applied to continue the activities from which the income was derived.

(c) A recipient of economic development program funds which will generate local government that will generate and retain program income in excess of the amounts allowed in this section from grants awarded prior to January 1, 1987 is par. (a), or (am) if the local government makes the election under par. (am), shall not be eligible to retain the excess program income from grants awarded after January 1, 1987, except as provided in par. (b) sub (5).

(d) All program income from grants awarded prior to January 1, 1987 shall be retained used by the recipient a local government in accordance with 24 CFR Part 570.489 (e) (2) and (f) and the local government's original contract provisions with the department. The department may require the recipient to return any program income from grants awarded prior to January 1, 1987 if funds are not being spent in accordance with federal program regulations and contractual provisions or if program recordkeeping and reporting procedures are not being met.

SECTION 9. DOD 6.18 (4) (e) is created to read:

DOD 6.18 (4) (e) The department may require a local government to return program income if any of the following occurs:

1. The local government fails to use such funds in accordance with the requirements established by the federal government and the department.

2. The local government fails to comply with the recordkeeping and reporting requirements established by the federal government and the department.

3. The local government fails to make any economic development loans with the revolving loan fund for a period of two consecutive years and after receiving a notice from the department, fails to make any economic development loans for a period of 6 months.

4. The local government discontinues its economic development program following the close out of its most recent contract with the department.

SECTION 10. DOD 6.18 (5) is renumbered (6) and as renumbered is amended to read:

DOD 6.18 (6) Any municipality establishing local government that establishes an economic development revolving loan fund pursuant to this subchapter shall report annually to the department on the use of such a fund on forms and at such times as prescribed by the department.

SECTION 11. DOD 6.18 (5) is created to read:

DOD 6.18 (5) (a) Any local government that desires to retain program income in excess of the limits established under sub. (4) (a) or (am), shall submit an application to the department setting forth such information as may be required by the department to justify the retention of 50% of the program income in excess of the limits.

(b) When evaluating applications under par. (a), the department shall consider the following factors:

1. Whether the local government has complied with the administrative, underwriting, recordkeeping and other requirements established by the federal government and the department.

2. The total number and amount of loans made by the local government using program income in the revolving loan fund.

3. The default rate on loans made by the local government using program income in the revolving loan fund.

4. The demonstrated need for an increase above the local government's program income limit.

(c) Any increase above a local government's original program income limit shall be made in increments equal to 25% of the limit established under sub (4) (a) or (am).

(d) Local governments authorized by the department to retain excess program income may keep 50% of the excess program income received, subject to the program income limits in par. (c). The balance of such program income shall be paid to the department within 30 days of receipt.

SECTION 12. DOD 6.20 to 6.23 are repealed.

SECTION 13. DOD 6.24 is renumbered 6.20.

Development

Notice is hereby given that pursuant to s. 560.14 (5) (b), Stats., the Wisconsin Department of Development will hold a hearing to consider the adoption of a proposed order to repeal ss. DOD 15.03 (4), 15.035 (4) and 15.04 (4) to (6) and (9); to renumber ss. DOD 15.03 (5) to (7), 15.04 (3), (7) and (8), 15.05, 15.06, 15.07 and 15.08; to renumber and amend ss. DOD 15.05 (1) and 15.06 (1) and (2); to repeal and recreate ss. DOD 15.03 (3) and 15.035 (3); and to create ss. DOD 15.03 (5) (e), 15.04 (3), 15.045, 15.05 and 15.07 (3) relating to the community-based economic development program at the following place and time: Department of Development, Room 908, 123 West Washington Avenue, Madison, Wisconsin at 10:00 A.M. on Tuesday, January 9, 1996.

Analysis Prepared by the Department of Development

Section 560.14 (5) (b), Stats., gives the Department the authority to adopt the proposed order which interprets s. 560.14, Stats. 1995 Wis. Act 27 created a new program within the Community-Based Economic Development Program for grants to promote regional economic development. The primary purpose of the proposed order is to create the process by which the Department will make grants for regional economic development activities and establish the criteria the Department will consider when comparing applications for regional economic development grants.

Eligible applicants for the regional economic development grants are community-based economic development organizations that jointly apply with a political subdivision in the region where the economic development activity will occur. The proposed economic development activity must be unique, must be consistent with the economic development policy of the political subdivision, must be likely to stimulate investment or create or retain jobs in the region and must be supported by other cash or in-kind contribution.

The criteria that will be used to compare applicants include, the level of economic distress in the region, the amount of investment that is likely to result, the impact on the economy of the region, the relationship of the proposed activities to other economic development efforts in the region, and all of the other criteria that are common to the existing Community-Based Economic Development Programs.

Grants for regional economic development in any fiscal year may equal no more than the greater of $100,000 or 10% of the fiscal year funding for the entire Community Based Economic Development Program.

The other substantial change contained in the proposed rule relates to the criteria the Department must consider before making any of the various grants under the Community-Based Economic Development Program. In place of the seperate sets of criteria contained in the current rules, the proposed order substitutes, to the extent statutory authority allows, a single set of criteria which the Department will employ to examine applications for each of the grant types (i.e.: business assistance grants under s. DOD 15.03, economic diversification planning grants under s. DOD 15.035, business incubator grants under s. DOD 15.04 and the new regional economic development grants under the proposed s. DOD 15.045). This movement toward a single set of criteria is part of an overall effort to produce greater consistency in the Department's economic development grant determinations to the extent that the governing statutes allow.

Other proposed changes include the elimination of the 7% limitation on administrative expense for incubator grants which is contained in the proposed to be repealed s. DOD 15.04 (9) and the addition of another eligible use for business assistance grants under s. DOD 15.03 which provides that funds may be expended for development or implementation of a plan which substantially meets the intent of the section.

Fiscal Estimate

Adoption of the order will produce no fiscal effect on the Department of Development. The order does provide for the shifting of up to the greater of $100,000 or 10% of each fiscal year appropriation from the other Community Based Economic Development Program categories to the regional economic development grants. The total amount available to local governments and community-based organizations under the Community Based Economic Development Program is not changed by the proposed order.

Text of Rule

Pursuant to the authority vested in the Department of Development by s. 560.14 (5) (b), Stats., the Department of Development adopts rules interpreting s. 560.14 (4), Stats., as follows:

SECTION 1. DOD 15.03 (3) is repealed and recreated to read:

DOD 15.03 (3) An application by a community-based organization for a grant under this section shall be in such form as the department may require and shall include information relevant to all the applicable criteria in s. DOD 15.05 (1).

SECTION 2. DOD 15.03 (4) is repealed.

SECTION 3. DOD 15.03 (5) to (7) are renumbered (4) to (6).

SECTION 4. DOD 15.03 (5) (e) is created to read:

DOD 15.03 (5) (e) Development or implementation of a plan which substantially meets the intent of this section.

SECTION 5. DOD 15.035 (3) is repealed and recreated to read:

DOD 15.035 (3) An application by a political subdivision for a grant under this section shall be in such form as the department may require and shall include information relevant to all the applicable criteria in s. DOD 15.05 (1).

SECTION 6. DOD 15.035 (4) is repealed.

SECTION 7. DOD 15.04 (3) is renumbered 15.04 (2).

SECTION 8. DOD 15.04 (3) is created to read:

DOD 15.04 (3) An application by a community based organization for a grant under this section shall be in such form as the department may require and shall include information relevant to all the applicable criteria in s. DOD 15.05.

SECTION 9. DOD 15.04 (4), (6) and (9) are repealed.

SECTION 10. DOD 15.04 (7) and (8) are renumbered 15.04 (4) and (6).

SECTION 11. DOD 15.045, is created to read:

DOD 15.045 Regional economic development grants. (1) The department may make a grant under this section to a community-based economic development organization for regional economic development activity if all of the provisions of s. 560.14 (4) (a), Stats., apply.

(2) Before awarding a grant under this section, the department shall consider all of the following:

(a) Each of the factors in s. DOD 15.05 (1) (a).

(b) The prospects for new investment and economic development in the region.

(d) The likely impact of the economic development activity on the economy of the region.

(e) The likelihood that one or more businesses will relocate outside the region if the economic development activity does not occur.

(f) The size of the region affected by the economic development activity.

(g) The likelihood that the economic development activity will enhance other economic development efforts, compliment an existing development zone, development opportunity zone or enterprise development zone project, or build upon other economic development activities in the region.

(h) The likelihood that the economic development activity will result in increased spending in the region by persons who reside outside the region.

(3) An application for a grant under this section shall be in such form as the department may require and shall include information relevant to the criteria in subs. (1) and (2).

SECTION 12. DOD 15.05 is renumbered 15.06 and as renumbered, 15.06 (1) is amended to read:

DOD 15.06 (1) Out of each annual appropriation under s. 20.143 (1) (fg), Stats., the department shall set aside an amount equal to the greater of $100,000 or 10% for grants under s. DOD 15.045, no less than 25% for grants made under ss. DOD 15.03 and 15.035 and no less than 25% for grants made under s. DOD 15.04. Following the receipt and examination of applications, the department shall determine that part of the remainder of the appropriation that shall be used for grants under ss. DOD 15.03 and 15.035 and that part that shall be used for grants under s. DOD 15.04.

SECTION 13. DOD 15.05 is created to read:

DOD 15.05 Grant considerations. (1) Before making a determination under ss. DOD 15.03, 15.035 or 15.04, the department shall consider all of the following: