Notice of Hearing
Financial Resources for Businesses and Communities, Chs. Comm 100 —
NOTICE IS HEREBY GIVEN that pursuant to section 560.799 (6) (g)
of the Statutes, the Department of Commerce will hold a public hearing on proposed rules in Chapter Comm 102
relating to the Wisconsin Enterprise Zone Program, and affecting small businesses.
The hearing will be held on:
Date and Time Location
March 25, 2011 Thompson Commerce Center
Friday Third Floor, Room 3B
at 1:00 PM 201 West Washington Avenue
Madison, WI 53703
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.
Copies of Proposed Rules
The proposed rules and an analysis of the rules are available by entering “Comm 102" in the search engine at the following Web site: https://health.wisconsin.gov/admrules/
. 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 mail to: email@example.com
, or at telephone (608) 266-0797, or at Contact Through Relay. Copies will also be available at the public hearing.
Appearances at the Hearing and Submittal 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 March 30, 2011
, 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 firstname.lastname@example.org
. 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.
Analysis Prepared by Department of Commerce
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 560.799 (1) (am) 2.
authorizes the Department to promulgate rules specifying circumstances under which “full-time employee" includes individuals who work fewer than 2,080 hours per year. Section 560.799 (6) (g)
requires the Department to promulgate by rule definitions for tier I and tier II counties and municipalities, original equipment manufacturers with significant supply chains in Wisconsin, and significant capital expenditures.
Related statute or rule
Several statutes and other Departmental rules address tax incentives for business development in Wisconsin, but those rules do not include the proposed definitions for tier I and tier II counties and municipalities, and for original equipment manufacturers with significant supply chains in Wisconsin. Chapter Comm 100
defines “full-time job" in a manner similar to the proposed definition of “full-time employee," and defines “significant investment of capital" in a manner similar to the proposed definition of “significant capital expenditures."
Plain language analysis
The rules in this order consist of definitions for (1) full-time employees, (2) tier I and tier II counties and municipalities, (3) original equipment manufacturers with significant supply chains in Wisconsin and (4) significant capital expenditures.
Comparison with existing or proposed federal regulations
In researching federal tax incentives, the Department did not find any tax credits at the federal level that are exactly like the enterprise zone tax credit in sections 71.07 (3w)
, 71.28 (3w)
, 71.47 (3w)
of the Statutes. The following federal tax credit may apply to some of the activities that may be addressed by the proposed rules, but this federal tax credit is structured differently than the credit in these sections of the Statutes.
Job creation that would be eligible for tax credits under the proposed rules may 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.
Comparison with similar rules in adjacent states
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.
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'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'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.
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) implementing the changes to section 560.799
of the Statutes that were enacted in 2009 Wisconsin Acts 11
; and (2) incorporating applicable best practices the Department has developed in administering similar programs for economic development, business development, and tax-credit verification.
Analysis and supporting documents used to determine the effect on small business
The primary documents that were used to determine the effect of the rules on small business were 2009 Wisconsin Acts 11
. These Acts apply their private-sector requirements only to businesses for which a corresponding tax credit is desired.
Effect on Small Business
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 enterprise zones.
Initial regulatory flexibility analysis
Types of small businesses that will be affected by the rules.
These rules may affect any business that elects to pursue tax credits under section 560.799
of the Statutes for qualifying activities in an enterprise zone designated by the Department. The qualifying activities include beginning or expanding operations in, relocating to, or making significant capital expenditures in the zone.
Reporting, bookkeeping and other procedures required for compliance with the rules.
No new reporting, bookkeeping and other procedures would be required.
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?
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.
Notice is hereby given that 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.
Assumptions used in arriving at fiscal estimate
The rules are not expected to have any significant fiscal effect on the Department because they are not expected to result in any substantial increase or decrease in workload.
The rules are not expected to impose any significant costs on the private sector because the rules only create definitions for applicants that choose to pursue tax credits for beginning or expanding operations in, relocating to, or making significant capital expenditures in designated enterprise zones.