Chapter 238

238.306(2)(h) (h) Policies, criteria, and methodology for allocating a portion of the tax benefits available under s. 238.303 to rural areas.

238.306(2)(i) (i) Policies, criteria, and methodology for allocating a portion of the tax benefits available under s. 238.303 to small businesses.

238.306(2)(j) (j) Policies and criteria for certifying a person who may be eligible for tax benefits greater than or equal to $3,000,000.

238.306(2)(k) (k) Procedures for implementing ss. 238.301 to 238.306.

238.306(3) (3) Reporting. Annually, 6 months after the report has been submitted under s. 238.07 (2), submit to the joint legislative audit committee and to the appropriate standing committees of the legislature under s. 13.172 (3) a comprehensive report assessing the program under ss. 238.301 to 238.306. The report under this subsection shall update the applicable information provided in the report under s. 238.07 (2).

238.306 History History: 2009 a. 2; 2011 a. 32 s. 3418; Stats. 2011 s. 238.306; 2017 a. 369.

238.308 238.308 Business development tax credit.

238.308(1) (1) Definitions. In this section:

238.308(1)(a) (a) “Eligible employee” means a person employed in a full-time job by a person certified under sub. (2).

238.308(1)(b) (b) For taxable years beginning after December 31, 2023, “full-time job” means a nonseasonal job for which the annual pay is more than the amount determined by multiplying 2,080 by 150 percent of the federal minimum wage and for which the person is offered retirement, health, and other benefits.

238.308(2) (2) Certification.

238.308(2)(a) (a) The corporation may certify a person to receive tax benefits under this section if all of the following apply:

238.308(2)(a)1. 1. The person is operating or intends to operate a business in this state.

238.308(2)(a)2. 2. The person applies under this section and enters into a contract with the corporation.

238.308(2)(b) (b) The certification of a person under par. (a) may remain in effect for no more than 10 cumulative years.

238.308(2)(c) (c) The corporation shall approve or deny the certification of a person under par. (a) within 90 days after receiving a person’s application for certification.

238.308(3) (3) Eligibility for tax benefits.

238.308(3)(a) (a) For taxable years beginning before January 1, 2024, a person is eligible to receive tax benefits if, in each year for which the person claims tax benefits under this section, the person increases net employment in this state in the person’s business above the net employment in this state in the person’s business during the year before the person was certified under sub. (2), as determined by the corporation under its policies and procedures.

238.308(3)(b) (b) For taxable years beginning after December 31, 2023, a person is eligible to receive tax benefits if, in each year for which the person claims tax benefits under this section, all of the following conditions are met:

238.308(3)(b)1. 1. The person makes a capital investment in the person’s business, and the person either creates new full-time jobs or retains existing full-time jobs, as determined by the corporation under its policies and procedures.

238.308(3)(b)2. 2. The person does not decrease net employment in this state in the person’s business below the net employment in this state in the person’s business during the year before the person is certified under sub. (2), as determined by the corporation under its policies and procedures.

238.308(4) (4) Awards, limits, expiration.

238.308(4)(a) (a) The corporation may award all of the following tax benefits to a person certified under sub. (2):

238.308(4)(a)1. 1. An amount equal to up to 10 percent of the amount of wages that the person paid to an eligible employee in the taxable year.

238.308(4)(a)2. 2. In addition to any tax benefits awarded for an eligible employee under subd. 1., an amount equal to up to 5 percent of the amount of wages that the person paid to the eligible employee in the taxable year, if the eligible employee is employed in an economically distressed area, as determined by the corporation.

238.308(4)(a)3. 3. 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.

238.308(4)(a)4. 4. An amount equal to up to 3 percent of the person’s personal property investment and up to 5 percent of the person’s real property investment in a capital investment project, if the project involves a total capital investment of at least $250,000 or, if less than $250,000, the project involves a capital investment that is equal to at least $10,000 per eligible employee employed on the project.

238.308(4)(a)5. 5. An amount, as determined by the corporation, 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 Wisconsin and the job duties associated with the eligible employee’s position involve the performance of corporate headquarters functions.

238.308(4)(a)6. 6. For taxable years beginning after December 31, 2023, an amount equal to up to 15 percent of the person’s investment in workforce housing, as defined in s. 234.66 (1) (i), for employees and up to 15 percent of the person’s investment in establishing an employee child care program for employees. Such investments may include only capital expenditures made by the person.

238.308(4)(b) (b) The corporation may allocate up to $22,000,000 in tax benefits under this section each year. Any unused allocation may be carried forward, including unused allocations from closed awards.

238.308(4)(c) (c) In any year, the corporation may exceed the annual limit on tax benefits specified in par. (b) by up to $10,000,000 if all of the following apply:

238.308(4)(c)1. 1. The corporation notifies the joint committee on finance in writing of its proposal to exceed the annual limit on tax benefits specified in par. (b).

238.308(4)(c)2. 2. The corporation submits with its notification under subd. 1. evidence that shows the corporation’s proposal is necessary to accomplish the corporation’s statewide economic development objectives.

238.308(4)(c)3. 3. Any of the following is true:

238.308(4)(c)3.a. a. The cochairpersons of the joint committee on finance fail to notify the corporation, within 14 working days after the date of the corporation’s notification under subd. 1., that the committee has scheduled a meeting for the purpose of reviewing the corporation’s proposal.

238.308(4)(c)3.b. b. The cochairpersons of the joint committee on finance notify the corporation that the committee has approved the corporation’s proposal.

238.308(5) (5) Duties.

238.308(5)(a) (a) The corporation may require a person to repay any tax benefits the person claims for a year in which the person failed to comply with a contract under sub. (2) (a) 2.

238.308(5)(b) (b) The corporation shall verify, under s. 238.03 (2) (e), the information submitted to the corporation by the person for the purpose of claiming tax benefits.

238.308(5)(c) (c) The corporation shall adopt policies and procedures for the implementation and operation of this section.

238.308 History History: 2015 a. 55; 2017 a. 59, 369; 2023 a. 143.

238.31 238.31 Designation of development zone.

238.31(1) (1) The corporation may designate an area as a development zone if all of the following apply:

238.31(1)(ac) (ac) The corporation has invited a local governing body to nominate the area under s. 238.315.

238.31(1)(am) (am) A local governing body nominates the area as described in s. 238.32.

238.31(1)(b) (b) The corporation has evaluated the local governing body’s application as described in s. 238.325.

238.31(1)(d) (d) The area meets the applicable requirements under s. 238.335.

238.31(1)(e) (e) The corporation determines all of the following:

238.31(1)(e)1. 1. That designation of the area as a development zone will serve a public purpose.

238.31(1)(e)2. 2. That designation of the area as a development zone will likely retain or increase employment in the area.

238.31(1)(e)3. 3. That economic development in the area is not likely to occur or continue without the corporation’s designation of the area as a development zone.

238.31(1)(e)4. 4. That the area meets at least 3 of the following criteria:

238.31(1)(e)4.a. a. The unemployment rate in the area is higher than the state average for the 18 months immediately preceding the date on which the application under s. 238.32 (2) or (3) was submitted to the corporation.

238.31(1)(e)4.b. b. The percentage of persons residing in the area who are members of households with household income levels at or below 80 percent of the statewide median household income is higher than the state average.

238.31(1)(e)4.c. c. The percentage of households in the area receiving unemployment insurance under ch. 108, relief funded by a relief block grant under ch. 49, or aid to families with dependent children under s. 49.19 is higher than the state average.

238.31(1)(e)4.d. d. In the 36 months immediately preceding the date on which the application under s. 238.32 (2) or (3) was submitted to the corporation, a number of workers in the area were permanently laid off by their employer or became unemployed as a result of a business action subject to s. 109.07 (1m).

238.31(1)(e)4.e. e. An employer in the vicinity of the area has given public notice under s. 109.07 (1m) (a) of either a business closing or a mass layoff of at least 25 employees, or 25 percent of the employees, of a business, whichever is greater, that will result in a number of workers in the area being laid off permanently.

238.31(1)(e)4.f. f. Property values in the area have been declining.

238.31(1)(e)4.g. g. There has been a decline in the population in the area.

238.31(1m) (1m) In making a determination under sub. (1) (e), the corporation shall consider all of the following:

238.31(1m)(a) (a) The extent of poverty, unemployment, or other factors contributing to general economic hardship in the area.

238.31(1m)(b) (b) The prospects for new investment and economic development in the area.

238.31(1m)(c) (c) The amount of investment that is likely to result from the designation of the area as a development zone.

238.31(1m)(d) (d) The number of full-time jobs that are likely to be created or retained in the area as a result of its designation as a development zone.

238.31(1m)(e) (e) The number of full-time jobs that are likely to be available to the target population as a result of the designation of the area as a development zone.

238.31(1m)(f) (f) The competitive effect of designating the area as a development zone on other businesses in the vicinity of the area.

238.31(1m)(g) (g) The needs of other areas of the state.

238.31(1m)(h) (h) Any other factors that the corporation considers relevant.

238.31(2) (2) In determining whether an area meets the requirements under sub. (1) (e) or s. 238.335, the corporation may rely on any data provided by the local governing body that the corporation determines is relevant.

238.31(3) (3) The corporation shall do all of the following:

238.31(3)(a) (a) Determine the number of development zones designated under sub. (1) but may not designate more than 22 development zones over the life of the program.

238.31(3)(b) (b) Divide the number of development zones as evenly as possible between metropolitan statistical areas and areas that are not metropolitan statistical areas.

238.31(3)(c) (c)

238.31(3)(c)1. 1. Designate at least one development zone that is entirely within a 1st class city.

238.31(3)(c)2. 2. Designate at least 2 development zones that are each at least partially within an Indian reservation.

238.31(3)(c)3. 3. Of the development zones that are designated after April 25, 1996, designate one that is in an urban area.

238.31(4) (4) No development zone may be designated under this section after March 6, 2009.

238.31 History History: 1987 a. 328; 1989 a. 31, 336; 1993 a. 16; 1995 a. 209; 1997 a. 27, 39, 103; 2009 a. 2, 87; 2011 a. 32 s. 3419; Stats. 2011 s. 238.31.

238.315 238.315 Invitation to nominate area. If the corporation determines that an area has experienced or is about to experience economic distress, the corporation may invite local governing bodies in the area to nominate the area as a development zone.

238.315 History History: 1997 a. 103; 2011 a. 32 s. 3420; Stats. 2011 s. 238.315.

238.32 238.32 Application by local governing bodies.

238.32(1) (1) A local governing body may nominate an area as a development zone, if the corporation has invited the governing body to nominate the area under s. 238.315 and if the governing body does all of the following:

238.32(1)(a) (a) Holds at least one public hearing on the issue of designating the area as a development zone.

238.32(1)(b) (b) Adopts a resolution or ordinance authorizing it to nominate the area under this section.

238.32(2) (2) A local governing body may nominate the area as a development zone by submitting an application to the corporation in a form prescribed by the corporation. The application shall include all of the following:

238.32(2)(a) (a) A copy of the ordinance or resolution authorizing the local governing body to nominate the area as a development zone.

238.32(2)(b) (b) Transcripts of the public hearing under sub. (1) (a).

238.32(2)(c) (c) Evidence that the area meets at least 3 of the criteria under s. 238.31 (1) (e) 4.

238.32(2)(d) (d) Evidence that the area meets the applicable requirements of s. 238.335.