Small Business Retirement Savings Board; retirement savings program
The bill creates a Small Business Retirement Savings Board, attached to DFI, and requires the board to establish and oversee a small business retirement savings program for certain privately employed individuals who are not eligible for an employer-sponsored retirement plan. The board must contract with a vendor (investment administrator) to provide specified services in administering the program, including investment services and record-keeping services.
Under the bill, the board consists of the following seven members: the secretary of financial institutions or his or her designee; two members appointed by the governor; two members appointed, respectively, by the speaker of the assembly and president of the senate; one member appointed by the secretary of financial institutions; and one member appointed by the State of Wisconsin Investment Board. The bill requires certain members to possess specified attributes or experience, and all members except the secretary of financial institutions or his or her designee serve four-year terms.
Under the bill, the board must design the program to meet certain requirements. Among these, the program must allow eligible employees to contribute to their accounts through payroll deductions and require participating employers to withhold from employees’ wages, through payroll deductions, employees’ account contributions and remit those contributions directly to the investment administrator. A “participating employer” is a private employer that does not offer a retirement savings plan to all employees; has at least one employee who is a resident of this state; provides notice to the board of its election to participate in the program; and certifies that, on the date of this notice, it had 50 or fewer employees. An “eligible employee” is an individual who resides in this state and who is employed by a private employer that does not offer a retirement savings plan in which the individual may participate. The bill defines “account” as a retirement savings account established for an eligible employee under the program. Other requirements of the program are that the administrative costs must be low and the fee that the investment administrator may charge an eligible employee is limited to a fixed monthly fee in an amount approved by the board. The program must also allow an eligible employee who has established an account to continue the account after separating from employment with a participating employer if the account is maintained with a positive balance.
Under the bill, after electing to participate in the program, a participating employer must provide notice to each of its eligible employees of the eligible employee’s right to opt out of the program. Unless the eligible employee opts out, the participating employer must enroll the eligible employee in the program and begin making payroll deductions, which amounts are remitted to the investment administrator as account contributions of the employee. Unless a different account type is offered, and the employee selects another option, these contributions are made to a Roth IRA for the employee. Unless the employee directs otherwise, during the employee’s first year of enrollment in the program, the participating employer must make a payroll deduction each pay period at a rate of 5 percent of the employee’s gross wages, with this rate increasing by 1 percent per year until a maximum rate of 10 percent is reached. However, the participating employer must make a good faith effort to establish the payroll deduction at a rate that will not result in the employee’s total annual contributions exceeding maximum contribution limits established by the board in accordance with the federal contribution limits for Roth IRAs, although the participating employer is not responsible if excess contributions occur. Under the program, the eligible employee must have certain investment options within each account type, including a stable value or capital preservation fund and a target date index fund or age-based fund. An eligible employee’s first $1,000 of contributions must be deposited in a stable value or capital preservation fund, and thereafter, unless the employee selects a different investment option, the employee’s contributions must be deposited in a target date index fund or age-based fund.
The bill specifies that, in establishing the program, the board may create or impose any requirement or condition not inconsistent with the bill’s requirements that the board considers necessary for the effective functioning and widespread utilization of the program. The bill also authorizes the board to enter into contracts for services necessary for establishing and overseeing the program, including services of financial institutions, attorneys, investment advisers, accountants, consultants, and other professionals. The board may promulgate administrative rules related to the program. DFI must provide the board with assistance necessary for the program, including staff, equipment, and office space. The board may delegate to DFI responsibility for carrying out any day-to-day board function related to the program.
Implementation by DFI of section 529A ABLE savings account program
The bill requires DFI to implement a qualified ABLE program under section 529A of the Internal Revenue Code allowing tax-exempt accounts for qualified expenses incurred by individuals with disabilities. Under current federal law, states may create a qualified Achieving a Better Life Experience program under which an individual may establish a tax-exempt savings account to pay for qualified expenses, such as education, housing, and transportation costs, for a beneficiary who is an individual with disabilities, as defined under federal law. Although these accounts, commonly referred to as “ABLE accounts” or “section 529A accounts,” cannot be established under this state’s law, they can be established under another state’s law, and if so established, withdrawals from these accounts for payment of qualified disability expenses for the account beneficiary are exempt from taxation in this state.
Current law also requires DFI to study and report on establishing a qualified ABLE program, including examination of the advantages and disadvantages of certain options and review and evaluation of related issues. DFI was required to report to the legislature the results of the study, including DFI’s findings and recommendations, by September 1, 2022.
The bill requires DFI to implement and administer a qualified ABLE program, either directly or by entering into an agreement with another state or alliance of states to establish an ABLE program or otherwise administer ABLE program services for the residents of this state. DFI must, within approximately nine months, determine whether implementing the ABLE program directly or by entering into an agreement is the best option for this state’s residents. If DFI enters into an agreement, the agreement may require the party contracting with DFI to do any of the following: 1) develop and implement an ABLE program in accordance with all requirements under federal law and modify the ABLE program as necessary for participants to qualify for federal income tax benefits; 2) contract for professional and technical assistance and advice in developing marketing plans and promotional materials to publicize the ABLE program; 3) work with organizations with expertise in supporting people with disabilities and their families in administering the agreement and ensuring accessibility of the ABLE program for people with disabilities; or 4) take any other action necessary to implement and administer the ABLE program. The bill also requires DFI to provide on its website information concerning ABLE accounts.
Sales by a municipality or county of wine in a public park
The bill allows a municipality or county to sell wine in its public parks without an alcohol beverage license.
Under current law, with limited exceptions, no person may sell alcohol beverages to a consumer unless the seller possesses a license or permit authorizing the sale. Under one exception, no license or permit is required for the sale, by officers or employees of a county or municipality, of fermented malt beverages (beer) in a public park operated by the county or municipality.
The bill applies this exception to wine along with beer.
Closing hours for alcohol beverage retailers during the 2024 Republican National Convention
The bill creates an exception allowing southeast Wisconsin municipalities to authorize extended closing hours for certain alcohol beverage retailers during the time that the 2024 Republican National Convention is held in Milwaukee.
Under current law, a Class “B” license authorizes the retail sale of beer for consumption on or off the licensed premises. Except when issued to a winery, a “Class B” license authorizes the retail sale of intoxicating liquor for consumption on the licensed premises and, subject to restrictions, for consumption off the licensed premises. Class “B” and “Class B” licenses are often issued together for restaurants and taverns. A “Class C” license, which may be issued only for a restaurant, authorizes the retail sale of wine for consumption on the licensed premises. With limited exceptions, a retailer operating under a Class “B,” “Class B,” or “Class C” license may not remain open between the hours of 2 a.m. and 6 a.m. on weekdays or between 2:30 a.m. and 6 a.m. on Saturday and Sunday, and a municipality may not impose different closing hours by ordinance.
The bill creates a closing hour exception that may be available for Class “B,” “Class B,” and “Class C” licensees operating in a municipality any part of which is located within Kenosha, Racine, Walworth, Rock, Milwaukee, Waukesha, Jefferson, Dane, Ozaukee, Washington, Dodge, Columbia, Sheboygan, or Fond du Lac County (southeast Wisconsin municipality). Under the bill, from July 15 to July 19, 2024, the closing hour for a Class “B,” “Class B,” or “Class C” licensed premises in a southeast Wisconsin municipality is 4 a.m. if the municipality issuing the license has adopted a resolution allowing extended closing hours and, upon application by a licensee, has authorized the extended closing hour for that licensee. The bill does not affect the hours during which a Class “B” or “Class B” licensee may make sales for off-premises consumption.
Economic development
WEDC venture capital fund of funds program
The bill directs WEDC to establish and administer a venture capital fund of funds program to invest in venture capital funds that invest in Wisconsin businesses. The bill requires WEDC to create a fund of funds that will continuously reinvest its assets under the program and to create an oversight board whose duties include contracting with an investment manager for the program.
The bill directs the oversight board to establish investment policies for the program. Under the bill, the program’s moneys must be committed for investment to venture capital funds no later than 60 months after the fund of funds is created and no more than $18,750,000 may be committed to any single venture capital fund for investment. The bill requires that at least 20 percent of the investments made through the program be directed to businesses located in parts of the state that typically do not receive significant venture capital fund investment, minority-owned businesses, and women-owned businesses. The bill prohibits any investment in lobbying and law firms.
Under the bill, the investment manager must contract with each venture capital fund that receives moneys through the program. The contract must require the venture capital fund to do all of the following:
1. Make new investments in an amount equal to the moneys it receives through the program in businesses who are headquartered, and whose operations are primarily, in this state.
2. At least match the amount it receives through the program and invests in a business with an investment in that same business of moneys from sources other than the program. The investment manager must ensure that, on average, for every $1 a venture capital fund receives through the program and invests in a business, the venture capital fund invests $2 in that business from sources other than the program.
3. Provide to the investment manager the information necessary to complete the reports described below.
The bill requires the investment manager to annually submit to WEDC an audit of the investment manager’s financial statements, the rate of return from investments made through the program, and certain information on each venture capital fund participating in the program and each business in which investments were made. WEDC must submit this information to the legislature. The bill also requires the investment manager to submit quarterly reports to the oversight board.
WEDC GPR appropriation
The bill adds $40,000,000 to WEDC’s GPR appropriation for general operations and economic development programs in fiscal year 2023-24. The bill also adjusts the calculation used to determine the amount of WEDC’s GPR appropriation.
Business development tax credit changes
Under current law, the tax benefits WEDC may award to a person certified under the business development tax credit program include an amount equal to up to 50 percent of the person’s training costs incurred to undertake activities to enhance an eligible employee’s general knowledge, employability, and flexibility in the workplace; to develop skills unique to the person’s workplace or equipment; or to develop skills that will increase the quality of the person’s product. Under the bill, that criterion for awarding business development tax credits is changed to an amount equal to up to 50 percent of the person’s training costs incurred to undertake activities to upgrade or improve the job-related skills of an eligible employee, train an eligible employee on the use of job-related new technologies, or provide job-related training to an eligible employee whose employment with the person represents the employee’s first full-time job.
Also, under current law, the tax benefits WEDC may award to a person certified under the business development tax credit program include an amount determined by WEDC that is equal to a percentage of the amount of wages that the person paid to an eligible employee in the taxable year, if the position in which the eligible employee was employed was created or retained in connection with the person’s location or retention of the person’s corporate headquarters in this state and the job duties associated with the eligible employee’s position involve the performance of corporate headquarters functions. Under the bill, WEDC may award business development tax credits under that criterion regardless of whether the job duties associated with the eligible employee’s position involve the performance of corporate headquarters functions.
Wage thresholds for business development and enterprise zone tax credits
The bill raises the minimum wage thresholds for the business development and enterprise zone tax credits for businesses that enter into contracts with WEDC after December 31, 2023. Under current law, WEDC may certify businesses that engage in qualifying activities, including full-time job creation and retention, to claim the credits. One requirement for claiming either credit is that the business enter into a contract with WEDC. In its contracts, WEDC uses a definition of “full-time employee” that means an individual who, among other things, is paid at least 150 percent of the federal minimum wage. The bill changes this minimum wage threshold to $32,000 for the business development tax credit and to $32,000 in a tier I county or municipality and $42,390 in a tier II county or municipality for the enterprise zone tax credit, with all these amounts adjusted annually for inflation. Additionally, under current law, the enterprise zone tax credit is partially based on the wages paid to zone employees that are at least 150 percent of the federal minimum wage in a tier I county or municipality or $30,000 in a tier II county or municipality. The bill changes these thresholds to $32,000 and $42,390, respectively, with both amounts adjusted annually for inflation.
The bill also modifies the maximum wage earnings limit for businesses that enter into contracts with WEDC after December 31, 2023. Under current law, the maximum wage earnings that may be considered per employee for the enterprise zone tax credit is $100,000. The bill increases this amount to $141,300, which is adjusted annually for inflation, and establishes the same dollar amount limit for the business development tax credit.
The bill also adjusts the definition of “full-time job” for purposes of the business development tax credit and “full-time employee” for purposes of the enterprise zone jobs tax credit by removing the current requirement that a worker work at least 2,080 hours per year, including paid leave and holidays, in order to be considered “full-time.”
Enterprise zone designations
Under current law, WEDC may designate any number of enterprise zones for purposes of certifying taxpayers to claim tax credits for certain activities carried out within an enterprise zone. However, current law subjects WEDC’s designation of a new enterprise zone to the approval of JCF under passive review.
The bill provides that WEDC may designate no more than 30 enterprise zones and eliminates the requirement that WEDC seek approval for a new enterprise zone from JCF under passive review.
Energy efficiency and renewable energy project expenditures for the business development tax credit
The bill adds a new category of expenditures that qualify for the business development tax credit. Under current law, WEDC may award the tax credit to a certified business on the basis of its qualifying expenses related to job creation and retention, employee training, capital investment, and corporate headquarters location or retention in this state. Under the bill, WEDC may also award the tax credit on the basis of a certified business’s energy efficiency or renewable energy project expenditures. The credit is equal to up to 25 percent of the expenditures and, under the bill, WEDC must ensure that the percentage of expenditures taken into account positively correlates to the scale of the project. The bill applies to credits awarded after December 31, 2023.
Main Street Bounceback grants
The bill creates an annual GPR appropriation for WEDC to award grants to provide assistance to businesses opening a new location or expanding operations in a vacant commercial space. WEDC already administers such a program, which is nonstatutory, with federal American Rescue Plan Act funding. Under the bill, WEDC must establish eligibility requirements and other policies and procedures for grants awarded under the bill that are substantially similar to the eligibility requirements and policies and procedures in effect on June 30, 2023, for the Wisconsin Tomorrow Main Street Bounceback Grant Program administered by WEDC. Additionally, WEDC may not award a grant under the bill to a nonprofit organization.
Cooperative development funding
The bill requires WEDC to allocate at least $500,000 from its economic development appropriations in the 2023-24 fiscal year for the purpose of assisting cooperative development activities in this state.
WEDC’s unassigned fund balance
Current law requires that WEDC establish policies and procedures concerning its unassigned fund balance, which is defined as all moneys held by WEDC that WEDC is not obligated by law or by contract to expend for a particular purpose or that WEDC has not otherwise assigned to be expended for a particular purpose. Under current law, those policies and procedures must include as a target that WEDC’s unassigned fund balance on June 30 of each fiscal year be an amount equal to or less than one-sixth of WEDC’s total administrative expenditures for that fiscal year. The bill eliminates the requirement that WEDC’s policies and procedures include that target for WEDC’s unassigned fund balance.
Information sharing between WEDC and DOR
The bill allows WEDC and DOR to enter into an agreement under which WEDC may obtain copies of tax returns and related documents from DOR. The bill also authorizes WEDC to examine tax returns and related documents held by DOR to the extent necessary to administer WEDC’s economic development programs. Under current law, WEDC’s examination authority is limited to the development zone tax credit program.
WHEFA financing of nonprofit institution working capital costs
Under current law, WHEFA may issue bonds to finance certain projects of health, educational, research, and other nonprofit institutions. The bill authorizes WHEFA to issue bonds for the purpose of financing such institutions’ working capital costs.
Landlord-tenant
Notification of building code violations
Under current law, before entering into a lease with or accepting any earnest money or a security deposit from a prospective tenant, a landlord must disclose to the prospective tenant any building code or housing code violations of which the landlord has actual knowledge if the violation presents a significant threat to the prospective tenant’s health or safety. The bill eliminates the condition that the landlord have actual knowledge of such a violation and that the threat to the prospective tenant’s health or safety be “significant”; under the bill, the landlord must disclose to a prospective tenant a building code or housing code violation, regardless of whether the landlord has actual knowledge of the violation, if the violation presents a threat to the prospective tenant’s health or safety.
Local landlord-tenant ordinances
Current law prohibits cities, villages, towns, and counties (local governments) from enacting certain ordinances relating to landlords and tenants. Local governments may not do any of the following:
1. Prohibit or limit landlords from obtaining or using certain information relating to a tenant or prospective tenant, including monthly household income, occupation, rental history, credit information, court records, and social security numbers.
2. Limit how far back in time a landlord may look at a prospective tenant’s credit information, conviction record, or previous housing.
3. Prohibit or limit a landlord from entering into a rental agreement with a prospective tenant while the premises are occupied by a current tenant.
4. Prohibit or limit a landlord from showing a premises to a prospective tenant during a current tenant’s tenancy.
5. Place requirements on a landlord with respect to security deposits or earnest money or inspections that are in addition to what is required under administrative rules.
6. Limit a tenant’s responsibility for any damage to or neglect of the premises.
7. Require a landlord to provide any information to tenants or to the local government any information that is not required to be provided under federal or state law.
8. Require a residential property to be inspected except under certain circumstances.
9. Impose an occupancy or transfer of tenancy fee on a rental unit.
Current law also prohibits local governments from regulating rent abatement in a way that permits abatement for conditions other than those that materially affect the health or safety of the tenant or that substantially affect the use and occupancy of the premises. The bill eliminates all of these prohibitions.
Local moratorium on evictions
Current law prohibits local governments from imposing a moratorium on landlords from pursuing evictions actions against a tenant. The bill eliminates that prohibition.
Rental property inspection requirements
The bill makes various changes to the requirements relating to inspections of rental properties. The bill eliminates existing limitations on inspection fees that municipalities and counties may charge for rental property inspections. Under the bill, a landlord must provide notice to a tenant of an impending inspection in the same manner the landlord would provide notice under current law to enter for repairs or to show the property to prospective tenants. The bill also provides that rental property inspection fees charged by a municipality or county are not subject to deduction from the municipality or county’s tax levy.
Tourism
American Indian tourism marketing
The bill requires DOA to award an annual grant to the Great Lakes Inter-Tribal Council to provide funding for a program to promote tourism featuring American Indian heritage and culture. The bill also transfers from the Department of Tourism to DOA a contract between the Great Lakes Inter-Tribal Council and the Department of Tourism that relates to the promotion of tourism featuring American Indian heritage and culture.
Major opportunities and events
The bill authorizes the Department of Tourism to expend moneys to attract major opportunities and events to this state, including expenditures for major marketing and professional efforts. The bill requires the department to collaborate with WEDC to implement the department’s duties under the bill.
Marketing clearinghouse
The bill repeals the requirement that the Department of Tourism maintain a marketing clearinghouse to provide marketing services to state agencies.
Cheese distribution
Under current law, the Department of Tourism must distribute donated, Wisconsin-made cheese at tourist information centers that the Department of Tourism operates. The bill eliminates that requirement.
Famous residents in marketing
Under current law, the Council on Tourism must consider using famous current and former residents of this state in tourism marketing strategies. The bill eliminates that requirement.
WPGA Junior Foundation
Under current law, the WPGA Junior Foundation, Inc., which is a nonprofit organization dedicated to promoting the game of golf to Wisconsin junior golfers and their families, must submit to the attorney general and each house of the legislature an audited financial statement of its use of payments paid to the WPGA Junior Foundation, Inc., by the Department of Tourism to fund efforts to provide opportunities, enjoyment, and education to junior golfers in this state. The bill eliminates that reporting requirement.
Marketing efforts reporting requirement
Under current law, the Department of Tourism must annually report the activities, marketing efforts, receipts, and disbursements of the Department of Tourism for the previous fiscal year to the Senate Committee on Natural Resources and Energy and the Assembly Committee on Tourism. The bill designates that these annual reports be sent to the appropriate standing committees of the legislature.
CORRECTIONAL SYSTEM
Adult correctional system
Earned compliance credit
