Rule-Making Notices
Notice of Hearing
Commerce
Financial Resources for Businesses and Communities, Chs.
Comm 104—
NOTICE IS HEREBY GIVEN that pursuant to section
560.205 (3) (d) of the Statutes, the Department of Commerce will hold a public hearing on proposed rules revising Chapter
Comm 129, relating to tax credits for angel investments and early stage seed investments, and affecting small businesses.
Hearing Information
The public hearing will be held as follows:
Date and Time:
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Location:
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October 27, 2009
Tuesday
At 10:00 A.M.
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Thompson Commerce Center
Third Floor, Room 3B201 West Washington Avenue
Madison, Wisconsin
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This hearing will be held in an accessible facility. If you have special needs or circumstances that may make communication or accessibility difficult at the hearing, please call Sam Rockweiler at (608) 266-0797 or at Contact Through Relay at least 10 days prior to the hearing date. Accommodations such as interpreters, English translators, or materials in audio tape format will, to the fullest extent possible, be made available upon a request from a person with a disability.
Appearance at Hearing and Submission of Written Comments
Interested persons are invited to appear at the hearing and present comments on the proposed rules. Persons making oral presentations are requested to submit their comments in writing, via e-mail. Persons submitting comments will not receive individual responses. The hearing record on this rulemaking will remain open until October 30, 2009, to permit submittal of written comments from persons who are unable to attend the hearing or who wish to supplement testimony offered at the hearing. E-mail comments should be sent to
sam.rockweiler@wi.gov. If e-mail submittal is not possible, written comments may be submitted to Sam Rockweiler, Department of Commerce, Division of Environmental and Regulatory Services, P.O. Box 14427, Madison, WI 53708-0427.
Copies of Proposed Rules
The proposed rules and an analysis of the rules are available on the Internet by entering “Comm 129" in the search engine at the following Web site:
http://adminrules.wisconsin.gov. Paper copies may be obtained without cost from Sam Rockweiler at the 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, or at Contact Through Relay. Copies will also be available at the public hearing.
Analysis Prepared by Department of Commerce
Statutes interpreted
Statutory authority
Explanation of agency authority
Section
227.11 (2) (a) of the Statutes authorizes the Department to promulgate rules interpreting the provisions of any Statute administered by the Department. Section
560.205 (3) (d) directs the Department to promulgate rules for administering the corresponding statutory requirements for angel investment tax credits and early stage seed investment tax credits.
Related statute or rule
Several statutes and other departmental rules address tax incentives for business development in Wisconsin. For example, (1) Sections
560.70 to
560.7995 of the Statutes and Chapters
Comm 100,
107,
112 and
118 address statewide tax-credit programs for job creation, capital investment, employee training and corporate headquarters; and (2) several other sections of Chapter
560 and other Comm chapters address more-narrowly targeted business development incentives, such as for film productions, dairy manufacturing facilities, and fuel and electricity used in manufacturing.
Plain language analysis
The rules in this order would (1) revise the eligibility requirements for these tax credits, (2) newly enable insurers to apply for these tax credits, (3) substantially increase the aggregate amount of investment in a qualified new business venture that may qualify for the tax credits, (4) substantially increase the aggregate amount of tax credits that may be claimed, (5) newly require investments to be maintained for at least 3 years, (6) newly enable transferring the credits to another person, (7) newly enable carrying forward the early stage tax credits, and (8) newly enable the Department to require a grant or loan origination fee.
Comparison with federal regulations
Neither the Department nor the Department of Revenue is aware of any existing or proposed federal regulation that applies these tax credits.
Comparison with rules in adjacent states
Minnesota
Minnesota offers various tax credit programs, but none that are similar to the Early Stage Business Investment program in Wisconsin. Minnesota has no rules addressing loan and grant origination fees for its economic development programs.
Iowa
Iowa offers a University-Based Research Utilization Program to provide tax credits to businesses and university employees to promote the adoption of new technology developed at the state universities. Businesses must be utilizing technology based on patents awarded to Iowa State University, the University of Iowa, or the University of Northern Iowa and be less than 1 year old. Researchers who developed the intellectual property utilized by the business are also eligible for up to 10 percent of the businesses tax liability in individual income tax credits. Administrative rules for this program are available in the Iowa Administrative Code, 261-Chapter
63. Further information is available through the Iowa Department of Economic Development Web site at
www.iowalifechanging.com. Iowa has no rules addressing loan and grant origination fees for its economic development programs.
Illinois
Illinois offers various tax credit programs, but none that are similar to the Early Stage Business Investment program in Wisconsin. Illinois has no rules addressing loan and grant origination fees for its economic development programs.
Michigan
Michigan offers a High-Tech and High Wage MEGA Tax Credit program that provides tax credits to promote the development of high-tech businesses in traditional and emerging industries. A business is eligible for tax credits to offset their Michigan business tax liability. Tax credit amounts are based on job creation. There are no rules for the program, however guidelines can be found through the Michigan Economic Development Corporation's Web site at
www.themedc.org. Michigan has no rules addressing loan and grant origination fees for its economic development programs.
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
2007 Wisconsin Act 20 and
2009 Wisconsin Acts 2 and
28; (2) incorporating applicable best practices the Department has developed in administering similar programs for business development and tax-credit verification; and (3) 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 documents that were used to determine the effect of the rules on small business were
2007 Wisconsin Act 20 and
2009 Wisconsin Acts 2 and
28. These Acts apply their private-sector requirements only to businesses and individuals 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 angel investments and early stage seed investments.
Small business regulatory coordinator
Any inquiries for the small business regulatory coordinator for the Department of Commerce can be directed to Sam Rockweiler, as listed above.
Initial regulatory flexibility analysis
Types of small businesses that will be affected by the rules.
Reporting, bookkeeping and other procedures required for compliance with the rules.
A certified fund manager who authorizes a fund member to sell or otherwise transfer a credit to another person would need to report the transfer to the Department.
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.
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. -
See PDF for diagram 
Fiscal Estimate
Assumptions used in arriving at fiscal estimate
The applicant information and Departmental review thereof that are addressed in the rules are substantially similar to the currently required information and review — and therefore are not expected to have any significant fiscal effect on the Department.
