Plain language analysis
The rules in this order (1) specify hourly wage ranges and health insurance benefits, and corresponding tax credits for businesses that create full-time jobs having those wages and benefits; (2) define which capital investments are significant, and specify tax credits that may be allocated to those investments; (3) define which employee training is eligible for tax credits, and specify tax credits that may be allocated to that training; (4) define which business offices are corporate headquarters, and specify tax credits that may be allocated to those offices; (5) establish a methodology for designating economically distressed areas; (6) specify additional tax benefits for businesses in economically distressed areas and benefiting members of targeted groups; (7) establish policies, criteria and methodology for reserving a portion of available tax benefits to rural areas; (8) establish policies, criteria and methodology for reserving a portion of available tax benefits to small businesses; (9) establish policies and criteria for certifying a business that may be eligible for tax benefits equal to or greater than $3 million; (10) establish policies and criteria for allocating tax credits beyond the general limits that are otherwise specified; (11) establish a minimum time period for maintaining positions that are created, retained or trained as a result of the tax credits addressed by these rules; and (12) establish the application, certification, verification, reporting, filing and contract procedures for the tax credits addressed by these rules.
Comparison with federal regulations
In researching federal tax incentives, the Department and the Department of Revenue found that there are no tax credits at the federal level which are exactly like the corresponding credits in
2009 Wisconsin Act 2. The following two federal tax credits may apply to the activities under section
560.702 of the Statutes which are addressed by the rules, but these federal tax credits are structured differently than the credits in Act 2.
Job creation that is eligible for tax benefits under section
560.702 (1) of the Statutes may also qualify for the federal consolidated Work Opportunity Tax Credit – which includes tax credits for an employer that hires an individual who is: (1) a qualifying Hurricane Katrina employee, (2) a member of a qualifying family with long-term or recent receipt of Temporary Assistance to Needy Families payments, (3) a qualifying food stamp recipient, (4) a qualifying veteran, (5) a qualifying ex-felon, (6) a resident of a designated community, (7) a qualifying summer youth employee, (8) a qualifying recipient of vocational rehabilitative services, or (9) a qualifying recipient of Supplemental Security income.
Capital investments that are eligible for tax benefits under section
560.702 (2) of the Statutes may also qualify for the federal Investment Credit – which includes tax credits for any qualifying rehabilitation of older structures, solar or geothermal energy equipment, advanced coal projects, and gasification projects.
Comparison with rules in adjacent states
Michigan
Michigan has several tax credit and tax abatement programs targeting specific business activities – development, manufacture and commercialization of advanced batteries; brownfield clean-up; manufacturers seeking defense contracts; promotion of renewable energy operations; tool and die operations; agricultural processing facilities; and forest products processing facilities. None are comparable to the new tax credit program addressed by the rules in this order.
The Michigan Economic Growth Authority Job Creation Tax Credits and Job Retention Tax Credits may be awarded for up to 20 years and up to 100 percent of an amount equal to the salaries and wages and employer-paid health care benefits multiplied by the personal income tax rate.
Minnesota
Minnesota's Job Opportunity Building Zone program offers a variety of tax exemptions and tax credits to businesses beginning operations in a designated zone, expanding in a zone, relocating to a zone from another state or relocating to a zone from another Minnesota location if employment is increased by five jobs or 20 percent, whichever is greater, within the first full year of operation in the zone. Businesses may qualify for exemptions to corporate franchise taxes, and income taxes for operators or investors, including capital gains taxes; sales taxes on goods and services used in the zone; property taxes on commercial and industrial improvements; and wind energy production taxes. The program also includes a refundable job credit that is calculated in much the same manner as Wisconsin's Enterprise Zone job credit.
Iowa
Iowa's Enterprise Zone program offers businesses a local property tax exemption of up to 100 percent of the value added to the property for up to 10 years; a refund of state sales, service or use taxes paid to contractors during construction; and an investment credit of up to 10 percent of the qualifying investment, amortized over 5 years.
Iowa's High Quality Job Creation program offers businesses various combinations of the following: a local property tax exemption of up to 100 percent of the value added to the property for up to 20 years; a refund of state sales, service or use taxes paid to contractors during construction; and an investment credit equal to a percentage of the qualifying investment, amortized over 5 years.
Illinois
The Illinois Economic Development for a Growing Economy (EDGE) program offers tax credits as high as the amount of tax receipts collected from state income taxes paid by newly-hired or retained employees as pertaining to the project. Each project must add to the export potential of Illinois, involve capital investment of at least $5 million and create at least 25 new jobs, or meet requirements set forth by the Illinois Department of Commerce and Economic Opportunity. EDGE credits are available for up to 10 years for each project. Jobs and capital investments must be maintained for the period in which the credits are claimed.
In addition to a variety of tax exemptions, the Illinois Enterprise Zone program offers an investment credit of 0.5 percent and a jobs credit of $500 per eligible employee hired to work in a zone during a taxable year. Eligible employees are individuals who are certified as economically disadvantaged or as dislocated workers.
Summary of factual data and analytical methodologies
The data and methodology for developing these rules were derived from and consisted of (1) incorporating the criteria in
2009 Wisconsin Act 2; (2) incorporating applicable best practices the Department has developed in administering similar programs for economic development, business development, and tax-credit verification; (3) soliciting and utilizing input from the Department of Revenue and from the Wisconsin Economic Development Association; and (4) reviewing Internet-based sources of related federal, state, and private-sector information.
Analysis and supporting documents used to determine effect on small business
The primary document that was used to determine the effect of the rules on small business was
2009 Wis. Act 2. This Act consolidates five of the Department's development-zone tax-credit programs into a single, statewide program. The Act applies its private-sector requirements only to businesses for which a corresponding tax credit is desired.
Small Business Impact
The rules are not expected to impose significant costs or other adverse impacts on small businesses because the rules address submittal of documentation, and other activities, only by applicants that choose to pursue tax credits for job creation, capital investment, employee training and corporate headquarters.
Initial regulatory flexibility analysis
Types of small businesses that will be affected by the rules.
Businesses and individuals that choose to pursue tax benefits for job creation, capital investment, employee training, and corporate headquarters, as established under sections
560.701 to
560.706 of the Statutes.
Reporting, bookkeeping and other procedures required for compliance with the rules.
A business certified under the rules must enter into a written agreement with the Department that establishes the responsibilities which the business will fulfill with regard to the Department's terms and conditions in allocating a tax credit.
Types of professional skills necessary for compliance with the rules.
No new professional skills are necessary for compliance with the rules.
Rules have a significant economic impact on small businesses?
No.
Small business regulatory coordinator
Any inquiries for the Small Business Regulatory Coordinator for the Department of Commerce can be directed to Sam Rockweiler, Department of Commerce, Division of Environmental and Regulatory Services, P.O. Box 14427, Madison, WI 53707, or at
sam.rockweiler@wi.gov, or telephone (608) 266-0797.
Environmental Impact
The Department has considered the environmental impact of the proposed rules. In accordance with Chapter
Comm 1, the proposed rules are a Type III action. A Type III action normally does not have the potential to cause significant environmental effects and normally does not involve unresolved conflicts in the use of available resources. The Department has reviewed these rules and finds no reason to believe that any unusual conditions exist. At this time, the Department has issued this notice to serve as a finding of no significant impact.
Fiscal Estimate
Assumptions used in arriving at fiscal estimate
Although the rules will newly result in review of documentation relating to certifying applicants as eligible to then claim allocated tax credits for job creation, capital investment, employee training, and corporate headquarters, the number of these reviews and allocations is expected to be about the same as in the five development-zone programs that are being replaced by this program. Therefore, the proposed rules are not expected to have any significant fiscal effect on the Department.
The proposed rules are not expected to impose any significant costs on the private sector because the rules address submittal of documentation, and other activities, only by applicants that choose to pursue tax credits for job creation, capital investment, employee training and corporate headquarters.
State fiscal effect
None.
Local government fiscal effect
None.
Long-range fiscal implications
None known.
Agency Contact Person
Todd Jensen, Wisconsin Department of Commerce, Bureau of Business Finance, 201 West Washington Avenue, Madison, WI, 53703; telephone: (608) 266-3074; E-Mail:
Todd.Jensen@commerce.state.wi.us.
Notice of Hearing
Financial Institutions — Banking
NOTICE IS HEREBY GIVEN That pursuant to ss.
224.72 (7) (bm) and
(8),
224.725 (4) (c),
(5) (b) and
(8),
224.73 (3) (a), and
227.11 (2), Stats., the Department of Financial Institutions, Division of Banking will hold a public hearing to consider a rule to repeal and recreate Chapters
DFI-Bkg 40,
41,
42 and
43; amend s.
DFI-Bkg 44.01 (1) (f); create s.
DFI-Bkg 44.01 (1) (g); repeal Chapter
DFI-Bkg 45; and create Chapter
DFI-Bkg 47, relating to the transition from a registration system to a license system under subch.
III of ch. 224, Stats., branch offices, mortgage broker agreements, surety bonds and trade names.
Hearing Information
The public hearing will be held at:
September 14, 2009 at 1:00 pm.
Department of Financial Institutions
345 W. Washington Avenue
5th floor
Madison, Wisconsin
Copies of Proposed Rule, Submission of Written Comments and Contact Persons
To obtain a copy of the proposed rule or fiscal estimate at no charge, to submit written comments regarding the proposed rule, or for questions regarding the agency's internal processing of the proposed rule, contact Mark Schlei, Deputy General Counsel, Department of Financial Institutions, Office of the Secretary, P.O. Box 8861, Madison, WI 53708-8861, tel. (608) 267-1705, e-mail
mark.schlei@wisconsin.gov. A copy of the proposed rule may also be obtained and reviewed at the Department of Financial Institution's website,
www.wdfi.org. Written comments must be received by the conclusion of the department's hearing regarding the proposed rule.
For substantive questions on the rule, contact Michael J. Mach, Administrator, Department of Financial Institutions, Division of Banking, P.O. Box 7876, Madison, WI 53707-7876, tel. (608) 266-0451.
Analysis Prepared by the Department of Financial Institutions, Division of Banking
Statute(s) interpreted
Statutory authority
Related statute or rule
None.
Explanation of agency authority
Summary of proposed rule
The objective of the rule is to repeal and recreate chs.
DFI-Bkg 40,
41,
42 and
43; amend s.
DFI-Bkg 44.01; repeal ch.
DFI-Bkg 45; and create ch.
DFI-Bkg 47. The purpose of this rule is to bring these chapters into conformity with subch. III, ch.
224, Stats., as mandated and affected by
2009 Wisconsin Act 2 and the Secure and Fair Enforcement for Mortgage Licensing (“S.A.F.E.") Act of 2008 regarding the transition from a registration system to a license system for mortgage bankers, mortgage brokers and mortgage loan originators. Primarily affected are provisions regarding terminology, and licensing requirements and procedures. Because of the numerous changes to terminology and deletion of text, the division proposes to repeal and recreate most of these chapters rather than extensively amend and renumber; otherwise the substance of the text remains largely the same. The purpose of the rule is also to provide clarification regarding branch offices, mortgage broker agreements, surety bonds and trade names.
Comparison with federal regulations
The requirements of
2009 Wisconsin Act 2 stem from the Secure and Fair Enforcement for Mortgage Licensing (“S.A.F.E.") Act of 2008.
Comparison with rules in adjacent states
Illinois, Iowa and Michigan have all adopted or are in the process of adopting the S.A.F.E Act of 2008; Minnesota is not adopting this act.
Summary of factual data and analytical methodologies
The changes are largely ones of terminology and procedure that stem directly from the S.A.F.E. Act of 2008 and
2009 Wisconsin Act 2. The division applied its own experience in its regulation of mortgage bankers and mortgage brokers regarding the clarifications on branch offices, surety bonds and trade names.
Small Business Impact
The rule reflects changes imposed congressionally by the S.A.F.E. Act of 2008 and legislatively by
2009 Wisconsin Act 2, and not by the department. Clarifications to matters regarding branch offices, mortgage loan agreements, surety bonds and trade names are already existing obligations for mortgage bankers and mortgage brokers. The rule itself therefore imposes no substantial impact on small businesses.
Fiscal Estimate
The state fiscal effect is an expected increase in costs which may be possible to absorb within the agency's budget; there are no local government costs.
Notice of Hearings
Health Services
Community Services, Chs.
DHS 30—
NOTICE IS HEREBY GIVEN that pursuant to ss.
54.15 (7) and
227.11 (2) (a), Stats., the Department of Health Services will hold public hearings to consider
the repeal and recreation of Chapter
DHS 85, relating to non-profit corporations and unincorporated associations as guardians, and affecting small businesses.
