Amendment ASA1-AB90

LRBs0198/1

MPG:jld&nwn:ph

2011 - 2012 LEGISLATURE

ASSEMBLY SUBSTITUTE AMENDMENT 1, TO 2011 ASSEMBLY BILL 90

October 10, 2011 - Offered by Representative Clark.

AB90-ASA1,1,2 An Act to create 238.14 of the statutes; relating to: entrepreneurial tax credit access grants.

Analysis by the Legislative Reference Bureau

Under current law, the Wisconsin Economic Development Corporation (WEDC) may certify a person to receive, or a person may otherwise qualify for, income and franchise tax credits based on the person's expenditures in this state related to the person's business. This substitute amendment directs WEDC to establish a grant program under which WEDC may award a grant to a person who wishes to secure financing to make expenditures that would qualify for such tax credits. A person is eligible to receive a grant if the expenditures are made for a business located in this state that has fewer than 25 employees in this state or less than $5,000,000 in gross receipts. No person may receive a grant unless the person has submitted business and financing plans to a commercial lending institution and submitted copies of the plans to WEDC. Before awarding a grant, WEDC must verify that the lender has approved the person's plans and will underwrite a loan for expenditures, contingent on the person receiving a grant. Under the substitute amendment, a person who receives a grant to secure financing for making an expenditure that would qualify for a tax credit may not claim a credit for that expenditure.

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

AB90-ASA1, s. 1 Section 1. 238.14 of the statutes is created to read:

AB90-ASA1,2,10 238.14 Entrepreneurial tax credit access grants. (1) The corporation shall establish and administer a program to make grants under this section. The corporation may award a grant under the program to a person who intends to use the grant to secure financing for making expenditures that would qualify for a credit under s. 71.07 (2dy), (3g) (a) 2., (3n), (3p), (3r), (3rm), or (3rn), 71.28 (1dy), (3g) (a) 2., (3n), (3p), (3r), (3rm), or (3rn), or 71.47 (1dy), (3g) (a) 2., (3n), (3p), (3r), (3rm), or (3rn), if the expenditures are made for a business located in this state that has fewer than 25 employees in this state or less than $5,000,000 in gross receipts for the taxable year in which the person applies for a grant under this section.

AB90-ASA1,2,19 (2) Any person who wishes to receive a grant under this section shall complete and submit an application to the corporation and enter into an agreement with the corporation to use the grant to secure financing for making expenditures described under sub. (1) and to repay any or all of the grant proceeds to the corporation if the person fails to comply with the agreement. An agreement under this subsection may provide that repayment shall be obtained through full or partial repayment of the principal amount of the grant plus interest, through receipt of a share of future profits from or an interest in a product or process, or through any other appropriate means.

AB90-ASA1,3,4 (3) (a) No person may receive a grant under this section unless the person has submitted business and financing plans to a commercial lending institution and submitted copies of the plans to the corporation. Before awarding a grant, the corporation shall verify that the lender has approved the person's plans and will underwrite a loan for expenditures described under sub. (1), contingent on the person receiving a grant under this section.

AB90-ASA1,3,8 (b) The amount of any grant awarded under this section is the amount equal to 95 percent of the tax credit that the recipient could otherwise receive for making expenditures described under sub. (1), except that the amount of the grant may not exceed an amount equal to 20 percent of the cost of the project that is being financed.

AB90-ASA1,3,11 (c) The corporation shall require, as a condition of the grant, that the recipient contribute to a project an amount that is not less than the amount the recipient receives as a grant under this section.

AB90-ASA1,3,16 (4) A person who receives a grant under this section to secure financing for making an expenditure described under sub. (1) may not claim a credit under s. 71.07 (2dy), (3g) (a) 2., (3n), (3p), (3r), (3rm), or (3rn), 71.28 (1dy), (3g) (a) 2., (3n), (3p), (3r), (3rm), or (3rn), or 71.47 (1dy), (3g) (a) 2., (3n), (3p), (3r), (3rm), or (3rn) for that expenditure.

AB90-ASA1,3,19 (5) (a) The corporation shall pay grants under this section from the appropriation under s. 20.192 (1) (r). The total amount that the corporation may award under this section in a fiscal year is $8,000,000.

AB90-ASA1,3,21 (b) The corporation shall establish policies and procedures to administer this section.

AB90-ASA1,3,23 (c) The corporation may not award grants under this section after January 1, 2015.

AB90-ASA1,3,24 (End)