AB1045: Bill Text

LRB-5117/3

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1995 - 1996 LEGISLATURE

1995 Assembly BILL 1045

March 18, 1996 - Introduced by Representatives Ward, Morris-Tatum, Seratti, Riley, Kunicki, Green, Klusman and Jensen, cosponsored by Senator Petak. Referred to Committee on Small Business and Economic Development.

AB1045,2,2 An Act to repeal 234.67, 234.68, 234.69, 234.75, 234.76, 234.765, 234.80, 234.82, 234.83 (3) (b), 234.87 (1) (b), 234.87 (1) (c), 234.87 (3) (b), 234.87 (4) (a), 234.87 (5) (b), 234.905, 234.907 and 234.935; to renumber 234.70, 234.802, 234.85 and 234.87 (4) (b); to renumber and amend 144.422 (1), 234.83 (2) (a) and 234.83 (3) (a); to amend 46.255 (7), 46.28 (3), 46.28 (4), 71.05 (1) (c) 2., 100.45 (4) (intro.), 101.177 (2) (intro.), 101.177 (3) (a) (intro.), 144.422 (2) (intro.), 234.03 (2m), 234.265 (2), 234.40 (4), 234.50 (4), 234.60 (2), 234.622 (intro.), 234.65 (1) (b), 234.65 (1) (c), 234.66 (3) (b), 234.83 (title), 234.83 (1) (c), 234.83 (4) (title) and (a), 234.83 (4) (b), 234.87 (title), 234.87 (5) (a), 234.93 (2) (a) (intro.), 234.93 (4) (a) 2., 234.94 (intro.), 560.036 (2) (a), 560.835 (1) (d) and 600.01 (1) (b) 8.; to repeal and recreate 70.11 (35); and to create 100.45 (1) (dm), 101.177 (1) (d), 144.422 (1) (b), subchapter I (title) of chapter 234 [precedes 234.01], 234.01 (4n) (a) 3m. e., subchapter II (title) of chapter 234 [precedes 234.83], 234.83 (2) (a) 1. to 4., 234.93 (2) (bm), 234.93 (4) (a) 3. and subchapter III (title) of chapter 234 [precedes 234.94] of the statutes; relating to: the bonding authority of the Wisconsin Housing and Economic Development Authority for economic development activities; loan guarantee programs funded by the Wisconsin development reserve fund; and the ratio of reserve funding to guaranteed outstanding principal for the Wisconsin development reserve fund.

Analysis by the Legislative Reference Bureau

Under current law, the Wisconsin Housing and Economic Development Authority (WHEDA) guarantees collection of loans from the Wisconsin development reserve fund (fund) for the recycling, stratospheric ozone protection, clean air, small business, business improvement, targeted development, nonpoint source pollution abatement and agricultural chemical cleanup, agricultural production, farm assets reinvestment management, agricultural development and cultural and architectural landmark loan guarantee programs. The total outstanding principal amount of loans that WHEDA may guarantee under any of these loan guarantee programs is limited to a specified amount under each program. For example, WHEDA may guarantee no more than $1,000,000 in outstanding principal under the clean air loan guarantee program, no more than $10,000,000 in outstanding principal under the recycling loan guarantee program and no more than $30,000,000 in outstanding principal under the agricultural production loan guarantee program. Popularity and use vary widely among the programs and, although WHEDA actually guarantees no loans under some of the programs, WHEDA is required to ensure that the cash balance in the fund is maintained at a ratio of $1 of reserve funding to $4 of outstanding principal that WHEDA may guarantee under all of the programs.

This bill eliminates all of the loan guarantee programs for which collection is guaranteed from the fund, except for the agricultural chemical cleanup portion of the nonpoint source pollution abatement and agricultural chemical cleanup loan guarantee program, the agricultural production loan guarantee program and the farm assets reinvestment management loan guarantee program, and in replacement creates a new, more broadly based loan guarantee program, called the small business development loan guarantee program, for which collection is guaranteed from the fund. Under the program, WHEDA may guarantee up to 80% of the principal of a loan to the elected governing body of an American Indian tribe or band or to a business if the business owner is actively engaged in the business, the annual gross revenue of the business does not exceed $10,000,000, the business does not employ more than 150 employes on a full-time basis and the business owner is not delinquent in the payment of child support. The loan proceeds may be used for expenses related to the start-up, expansion or acquisition of a business, including working capital, and must be likely to have a positive economic impact in terms of job retention and creation. Loan proceeds may not be used for real estate investment, entertainment expenses or expenses related to a community-based residential facility, the production of an agricultural commodity or a septic system, well or sewer unless the expenses for the septic system, well or sewer are related to the business start-up, expansion or acquisition. Loans to a single borrower that are guaranteed under the program may not exceed $250,000. The total outstanding guaranteed principal amount of all loans that WHEDA may guarantee under the program may not exceed $30,000,000. This amount compares with a total of $28,000,000 in total outstanding guaranteed principal that WHEDA could guarantee under all of the programs that the bill eliminates. In addition, the bill changes the ratio at which WHEDA must maintain the fund to $1 of reserve funding to $5 of outstanding principal that WHEDA may guarantee under all of the programs guaranteed from the fund, including outstanding guarantees under the eliminated programs, except for the cultural and architectural landmark loan guarantee program, which remains at $1 of reserve funding to $4 of outstanding guaranteed principal.

Also under current law, WHEDA may issue up to $200,000,000 in aggregate principal amount of bonds and notes to finance its economic development activities, including economic development loans. The bill raises that limit to $300,000,000.

WHEDA may finance economic development projects, which are defined in the statutes. One type of economic development project that WHEDA may finance is land, plant or equipment for certain facilities for the sale of goods or services to consumers. The bill provides that another type of facility for the sale of goods or services for which WHEDA may finance an economic development project is one that is located in a targeted area, as determined by WHEDA after considering the same factors that the development finance board considers when determining whether a project is located in a targeted area for the purpose of awarding a grant or loan from the Wisconsin development fund.

In addition, the bill divides the chapter of the statutes that contains the provisions related to WHEDA into subchapters for better organization. The bill repeals the agricultural production drought assistance loan guarantee program because WHEDA is no longer authorized to guarantee loans under the program and no outstanding loans remain.

For further information see the state 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:

AB1045, s. 1 Section 1. 46.255 (7) of the statutes is amended to read:

AB1045,3,7 46.255 (7) The department may provide a certification under sub. (1) to a state agency or authority under s. 21.49 (2) (e), 36.11 (6) (b), 36.25 (14), 36.34 (1), 39.30 (2) (e), 39.38 (2), 39.435 (6), 39.44 (4), 39.47 (2m), 45.351 (2) (c), 45.356 (6), 45.396 (6), 45.74 (6), 144.25 (8) (L), 145.245 (5m) (b), 234.04 (2), 234.49 (1) (c), 234.59 (3) (c), 234.65 (3) (f), 234.83 (2) (a) 4., 234.90 (3) (d) or (3g) (c), 234.905 (3) (d) or 949.08 (2) (g).

AB1045, s. 2 Section 2. 46.28 (3) of the statutes is amended to read:

AB1045,4,3 46.28 (3) The department may authorize the authority to issue revenue bonds under s. 234.70 234.61 to finance any residential facility it approves under sub. (2).

AB1045, s. 3 Section 3. 46.28 (4) of the statutes is amended to read:

AB1045,4,7 46.28 (4) The department may charge sponsors for administrative costs and expenses it incurs in exercising its powers and duties under this section and under s. 234.70 234.61.

AB1045, s. 4 Section 4. 70.11 (35) of the statutes is repealed and recreated to read:

AB1045,4,13 70.11 (35) Cultural and architectural landmarks. Real property and improvements designated in an executive order as a valued historical landmark and an architectural masterpiece, or an educational tourist center located adjacent to the real property and improvements designated in an executive order as a valued historical landmark and an architectural masterpiece.

AB1045, s. 5 Section 5. 71.05 (1) (c) 2. of the statutes, as affected by 1995 Wisconsin Act 56, is amended to read:

AB1045,4,17 71.05 (1) (c) 2. The Wisconsin housing and economic development authority, if the bonds are to fund a loan under s. 234.935, 1993 stats.

AB1045, s. 6 Section 6. 100.45 (1) (dm) of the statutes is created to read:

AB1045,5,2 100.45 (1) (dm) "State agency" means any office, department, agency, institution of higher education, association, society or other body in state government created or authorized to be created by the constitution or any law which is entitled to expend moneys appropriated by law, including the legislature and the courts, the Wisconsin Housing and Economic Development Authority, the Bradley Center Sports and Entertainment Corporation, the University of Wisconsin Hospitals and Clinics Authority and the Wisconsin Health and Educational Facilities Authority.

AB1045, s. 7 Section 7. 100.45 (4) (intro.) of the statutes is amended to read:

AB1045,5,9 100.45 (4) Servicing. (intro.) No person, including a state agency, as defined in s. 234.75 (10), may perform motor vehicle repair that releases or may release ozone-depleting refrigerant from a mobile air conditioner or trailer refrigeration equipment or may install or service a mobile air conditioner or trailer refrigeration equipment that contains ozone-depleting refrigerant unless all of the following apply:

AB1045, s. 8 Section 8. 101.177 (1) (d) of the statutes is created to read:

AB1045,5,18 101.177 (1) (d) "State agency" means any office, department, agency, institution of higher education, association, society or other body in state government created or authorized to be created by the constitution or any law which is entitled to expend moneys appropriated by law, including the legislature and the courts, the Wisconsin Housing and Economic Development Authority, the Bradley Center Sports and Entertainment Corporation, the University of Wisconsin Hospitals and Clinics Authority and the Wisconsin Health and Educational Facilities Authority.

AB1045, s. 9 Section 9. 101.177 (2) (intro.) of the statutes is amended to read:

AB1045,5,23 101.177 (2) Servicing. (intro.) No person, including a state agency, as defined in s. 234.75 (10), may install or service a piece of refrigeration equipment that contains ozone-depleting refrigerant unless the person certifies all of the following to the department:

AB1045, s. 10 Section 10. 101.177 (3) (a) (intro.) of the statutes is amended to read:

AB1045,6,4 101.177 (3) (a) (intro.) After December 31, 1991, no person, including a state agency as defined in s. 234.75 (10), may sell used ozone-depleting refrigerant removed from refrigeration equipment for reuse unless the person certifies all of the following to the department:

AB1045, s. 11 Section 11. 144.422 (1) of the statutes is renumbered 144.422 (1) (intro.) and amended to read:

AB1045,6,8 144.422 (1) (title) Definition Definitions. (intro.) In this section , "ozone-depleting:

AB1045,6,9 (a) "Ozone-depleting refrigerant" has the meaning given in s. 100.45 (1) (d).

AB1045, s. 12 Section 12. 144.422 (1) (b) of the statutes is created to read:

AB1045,6,18 144.422 (1) (b) "State agency" means any office, department, agency, institution of higher education, association, society or other body in state government created or authorized to be created by the constitution or any law which is entitled to expend moneys appropriated by law, including the legislature and the courts, the Wisconsin Housing and Economic Development Authority, the Bradley Center Sports and Entertainment Corporation, the University of Wisconsin Hospitals and Clinics Authority and the Wisconsin Health and Educational Facilities Authority.

AB1045, s. 13 Section 13. 144.422 (2) (intro.) of the statutes is amended to read:

AB1045,6,25 144.422 (2) Salvaging refrigeration equipment. (intro.) After June 30, 1992, except as provided in sub. (2m), no person, including a state agency, as defined in s. 234.75 (10), may perform salvaging or dismantling of mechanical vapor compression refrigeration equipment in the course of which ozone-depleting refrigerant is or may be released or removed unless the person certifies all of the following to the department:

AB1045, s. 14 Section 14. Subchapter I (title) of chapter 234 [precedes 234.01] of the statutes is created to read:

AB1045,7,3 Chapter 234

AB1045,7,7 Subchapter I General provisions; Housing and economic Development programs

AB1045, s. 15 Section 15. 234.01 (4n) (a) 3m. e. of the statutes is created to read:

AB1045,7,10 234.01 (4n) (a) 3m. e. The facility is located in a targeted area, as determined by the authority after considering the factors set out in s. 560.605 (2m) (a) to (h).

AB1045, s. 16 Section 16. 234.03 (2m) of the statutes is amended to read:

AB1045,7,13 234.03 (2m) To issue notes and bonds in accordance with ss. 234.08, 234.40, 234.50, 234.60, 234.61, 234.626, 234.65, and 234.66 and 234.70.

AB1045, s. 17 Section 17. 234.265 (2) of the statutes, as affected by 1995 Wisconsin Acts 116 and 150, is amended to read: