Chapter 238

238.38 History History: 1987 a. 328; 1993 a. 275; 1997 a. 27; 2005 a. 253; 2009 a. 2; 2011 a. 32 s. 3432; Stats. 2011 s. 238.38.

238.385 238.385 Rules on eligibility for tax benefits.

238.385(1) (1) For the development zone program under ss. 238.30 and 238.31 to 238.38, the development opportunity zone program under s. 238.395, and the enterprise development zone program under s. 238.397, the corporation shall adopt rules that further define a person’s eligibility for tax benefits. The rules shall do at least all of the following:

238.385(1)(a) (a) Limit a person’s eligibility to claim tax benefits for retaining full-time jobs to those jobs that likely would not have been retained but for the tax benefits.

238.385(1)(b) (b) Allow a person to claim up to $8,000 in tax benefits during the time that an area is designated as a development zone, as a development opportunity zone, or as an enterprise development zone for creating a full-time job that is filled by a member of the target population.

238.385(1)(bm) (bm) Allow a person to claim up to $8,000 in tax benefits during the time that an area is designated as an enterprise development zone for retaining a full-time job if the corporation determines that the person made a significant capital investment to retain the full-time job.

238.385(1)(c) (c) Allow a person to claim up to $6,000 in tax benefits during the time that an area is designated as a development zone, as a development opportunity zone, or as an enterprise development zone for any of the following:

238.385(1)(c)1. 1. Creating a full-time job that is filled by an individual who is a Wisconsin resident and who is not a member of the target population.

238.385(1)(c)2. 2. Retaining a full-time job that is filled by an individual who is a Wisconsin resident and who is not a member of the target population.

238.385(1)(d) (d) Except for a person claiming tax benefits only for environmental remediation under s. 71.07 (2dx) (b) 1., 71.28 (1dx) (b) 1., 71.47 (1dx) (b) 1., or 76.636, require at least 25 percent of the tax benefits claimed by a person to be based on creating or retaining full-time jobs.

238.385(1)(e) (e) Require at least one-third of the tax benefits claimed by a person that are based on creating full-time jobs to be based on creating full-time jobs that are filled by members of the target population.

238.385(1)(f) (f) Specify how long a full-time job that is created or retained by a person must be maintained in order for the person to claim tax benefits for the full-time job.

238.385(1)(g) (g) Generally provide incentives for the retention of employees filling full-time jobs upon which tax benefits are based.

238.385(1)(h) (h) Provide that a person’s eligibility to claim tax benefits for environmental remediation under s. 71.07 (2dx) (b) 1., 71.28 (1dx) (b) 1., 71.47 (1dx) (b) 1., or 76.636 is not based on creating or retaining jobs.

238.385(2) (2) The corporation may by rule specify circumstances under which the corporation may grant exceptions to any of the following:

238.385(2)(a) (a) The requirements specified under sub. (1) (d) and (e).

238.385(2)(b) (b) The requirement under ss. 238.30 (2m) and 238.397 (1) (am) that an individual’s pay must equal at least 150 percent of the federal minimum wage.

238.385(2)(c) (c) The requirement under ss. 238.30 (2m) and 238.397 (1) (am) that an individual’s position must be regular, nonseasonal, and full-time and that the individual must be required to work at least 2,080 hours per year, including paid leave and holidays.

238.385 History History: 1997 a. 27, 41; 1999 a. 9; 2005 a. 259; 2009 a. 2; 2011 a. 32 s. 3433; Stats. 2011 s. 238.385.

238.395 238.395 Development opportunity zones.

238.395(1) (1) Designation of development opportunity zones. The following areas are designated as development opportunity zones:

238.395(1)(a) (a) An area in the city of Beloit, the legal description of which is provided to the corporation by the local governing body of the city of Beloit.

238.395(1)(b) (b) An area in the city of West Allis, the legal description of which is provided to the corporation by the local governing body of the city of West Allis.

238.395(1)(c) (c) An area in the city of Eau Claire, the legal description of which is provided to the corporation by the local governing body of the city of Eau Claire.

238.395(1)(d) (d) An area in the city of Kenosha, the legal description of which is provided to the corporation by the local governing body of the city of Kenosha.

238.395(1)(e) (e) An area in the city of Milwaukee, the legal description of which is provided to the corporation by the local governing body of the city of Milwaukee.

238.395(1)(f) (f) For the Gateway Project, an area in the city of Beloit, the legal description of which is provided to the corporation by the local governing body of the city of Beloit.

238.395(1)(g) (g) An area in the city of Janesville, the legal description of which is provided to the corporation by the local governing body of the city of Janesville.

238.395(1)(h) (h) An area in the city of Kenosha, the legal description of which is provided to the corporation by the local governing body of the city of Kenosha.

238.395(1)(i) (i) An area in the city of Beloit, the legal description of which is provided to the corporation by the local governing body of the city of Beloit.

238.395(2) (2) Duration, limits and expiration.

238.395(2)(a) (a) Except as provided in par. (d), the designation of each area under sub. (1) (a), (b), and (c) as a development opportunity zone shall be effective for 36 months, with the designation of the areas under sub. (1) (a) and (b) beginning on April 23, 1994, and the designation of the area under sub. (1) (c) beginning on April 28, 1995. Except as provided in par. (d), the designation of each area under sub. (1) (d) and (e) as a development opportunity zone shall be effective for 84 months, with the designation of the area under sub. (1) (d) beginning on January 1, 2000, and the designation of the area under sub. (1) (e) beginning on September 1, 2001. Except as provided in par. (d), the designation of the area under sub. (1) (f) as a development opportunity zone shall be effective for 108 months, beginning on September 1, 2001. Except as provided in pars. (d) and (e), the designation of each area under sub. (1) (g) and (h) as a development opportunity zone shall be effective for 60 months, beginning on the date on which the area is designated under sub. (1). Except as provided in pars. (d) and (e), the designation of the area under sub. (1) (i) shall be effective for 60 months, beginning on August 1, 2011.

238.395(2)(b) (b)

238.395(2)(b)1. 1. The limit for tax benefits for the development opportunity zone under sub. (1) (a) is $7,000,000.

238.395(2)(b)2. 2. The limit for tax benefits for the development opportunity zone under sub. (1) (b) is $3,000,000.

238.395(2)(b)3. 3. The limit for tax benefits for the development opportunity zone under sub. (1) (c) is $3,000,000.

238.395(2)(b)4. 4. The limit for tax benefits for the development opportunity zone under sub. (1) (d) is $7,000,000.

238.395(2)(b)5. 5. The limit for tax benefits for the development opportunity zone under sub. (1) (e) is $4,700,000.

238.395(2)(b)6. 6. The limit for tax benefits for the development opportunity zone under sub. (1) (f) is $6,700,000.

238.395(2)(b)7. 7. Except as provided in par. (e) 1., the limit for tax benefits for the development opportunity zone under sub. (1) (g) is $5,000,000.

238.395(2)(b)8. 8. Except as provided in par. (e) 2., the limit for tax benefits for the development opportunity zone under sub. (1) (h) is $5,000,000.

238.395(2)(b)9. 9. Except as provided in par. (e) 3., the limit for tax benefits for the development opportunity zone under sub. (1) (i) is $5,000,000.

238.395(2)(c) (c) Annually, the corporation shall estimate the amount of forgone state revenue because of tax benefits claimed by persons in each development opportunity zone.

238.395(2)(d) (d)

238.395(2)(d)1. 1. Notwithstanding pars. (a) and (e), the designation of an area as a development opportunity zone shall expire 90 days after the day on which the corporation determines that the forgone tax revenues under par. (c) will equal or exceed the limit for the development opportunity zone.

238.395(2)(d)2. 2. The corporation shall immediately notify the local governing body of the city in which the development opportunity zone is located of a change in the expiration date of the development opportunity zone under this paragraph.

238.395(2)(e) (e)

238.395(2)(e)1. 1. The corporation may extend the designation of an area under sub. (1) (g) as a development opportunity zone for an additional 60 months if the corporation determines that an extension under this subdivision would support economic development within the city. If the corporation extends the designation of the area as a development opportunity zone, the limit for tax benefits for the development opportunity zone under sub. (1) (g) is increased by $5,000,000.

238.395(2)(e)2. 2. The corporation may extend the designation of an area under sub. (1) (h) as a development opportunity zone for an additional 60 months if the corporation determines that an extension under this subdivision would support economic development within the city. If the corporation extends the designation of the area as a development opportunity zone, the limit for tax benefits for the development opportunity zone under sub. (1) (h) is increased by $5,000,000.

238.395(2)(e)3. 3. The corporation may extend the designation of an area under sub. (1) (i) as a development opportunity zone for an additional 60 months if the corporation determines that an extension will support economic development within the city. If the corporation grants an extension under this subdivision, the limit for tax benefits for the development opportunity zone under sub. (1) (i) is increased by $5,000,000.

238.395(3) (3) Application and entitlement to tax benefits.

238.395(3)(a) (a)

238.395(3)(a)1. 1. Any person that is conducting or that intends to conduct economic activity in a development opportunity zone under sub. (1) (a) or (b) and that, in conjunction with the local governing body of the city in which the development opportunity zone is located, submits a project plan as described in par. (b) to the corporation no later than 6 months after April 23, 1994, shall be entitled to claim tax benefits while the area is designated as a development opportunity zone.

238.395(3)(a)2. 2. Any person that is conducting or that intends to conduct economic activity in a development opportunity zone under sub. (1) (c) and that, in conjunction with the local governing body of the city in which the development opportunity zone is located, submits a project plan as described in par. (b) to the corporation no later than 6 months after April 28, 1995, shall be entitled to claim tax benefits while the area is designated as a development opportunity zone.

238.395(3)(a)3. 3. Any person that is conducting or that intends to conduct economic activity in a development opportunity zone under sub. (1) (d) and that, in conjunction with the local governing body of the city in which the development opportunity zone is located, submits a project plan as described in par. (b) to the corporation no later than July 1, 2000, shall be entitled to claim tax benefits while the area is designated as a development opportunity zone.

238.395(3)(a)4. 4. Any person that is conducting or that intends to conduct economic activity in a development opportunity zone under sub. (1) (e), (f), (g), (h), or (i) and that, in conjunction with the local governing body of the city in which the development opportunity zone is located, submits a project plan as described in par. (b) to the corporation shall be entitled to claim tax benefits while the area is designated as a development opportunity zone.

238.395(3)(b) (b) A project plan under par. (a) shall include all of the following:

238.395(3)(b)1. 1. The name and address of the person’s business for which tax benefits will be claimed.

238.395(3)(b)2. 2. The appropriate federal tax identification number of the person.

238.395(3)(b)3. 3. The names and addresses of other locations outside of the development opportunity zone where the person conducts business and a description of the business activities conducted at those locations.

238.395(3)(b)4. 4. The amount that the person proposes to invest in a business, or spend on the construction, rehabilitation, repair, or remodeling of a building, located within the development opportunity zone.

238.395(3)(b)5. 5. The estimated total investment of the person in the development opportunity zone.

238.395(3)(b)6. 6. The number of full-time jobs that will be created, retained, or substantially upgraded as a result of the person’s economic activity in relation to the amount of tax benefits estimated for the person.

238.395(3)(b)7. 7. The person’s plans to make reasonable attempts to hire employees from the targeted population.

238.395(3)(b)8. 8. A description of the commitment of the local governing body of the city in which the development opportunity zone is located to the person’s project.

238.395(3)(b)9. 9. Other information required by the corporation or the department of revenue.

238.395(3)(d) (d) 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.

238.395(4) (4) The corporation shall revoke the entitlement of a person to claim tax benefits under sub. (3) if the person does any of the following:

238.395(4)(a) (a) Supplies false or misleading information to obtain the tax benefits.

238.395(4)(b) (b) Leaves the development opportunity zone to conduct substantially the same business outside of the development opportunity zone.

238.395(4)(c) (c) Ceases operations in the development opportunity zone and does not renew operation of the trade or business or a similar trade or business in the development opportunity zone within 12 months.

238.395(5) (5) Certification based on the activity of another.

238.395(5)(a) (a) The corporation may certify for tax benefits a person that is conducting economic activity in the development opportunity zone under sub. (1) (e) or (f) and that is not otherwise entitled to claim tax benefits if all of the following apply:

238.395(5)(a)1. 1. The person’s economic activity is instrumental in enabling another person to conduct economic activity in the development opportunity zone under sub. (1) (e) or (f).

238.395(5)(a)2. 2. The corporation determines that the economic activity of the other person under subd. 1. would not have occurred but for the involvement of the person to be certified for tax benefits under this subsection.

238.395(5)(a)3. 3. The person to be certified for tax benefits under this subsection will pass the benefits through to the other person conducting the economic activity under subd. 1., as determined by the corporation.

238.395(5)(a)4. 4. The other person conducting the economic activity under subd. 1. does not claim tax benefits under sub. (3).

238.395(5)(b) (b) A person intending to claim tax benefits under this subsection shall submit to the corporation an application, in the form required by the corporation, containing information required by the corporation and by the department of revenue.

238.395(5)(c) (c) The corporation shall notify the department of revenue of all persons certified to claim tax benefits under this subsection.

238.395(5)(d) (d) The corporation annually shall verify information submitted to the corporation under s. 71.07 (2dm) or (2dx), 71.28 (1dm) or (1dx), 71.47 (1dm) or (1dx), or 76.636.

238.395(5)(e) (e) The corporation shall revoke the entitlement of a person to claim tax benefits under this subsection if the person does any of the following:

238.395(5)(e)1. 1. Supplies false or misleading information to obtain the tax benefits.

238.395(5)(e)2. 2. Ceases operations in the development opportunity zone under sub. (1) (e) or (f).

238.395(5)(e)3. 3. Does not pass the benefits through to the other person conducting the economic activity under par. (a) 1., as determined by the corporation.

238.395(5)(f) (f) The corporation shall notify the department of revenue within 30 days after revoking an entitlement under par. (e).

238.395 History History: 1993 a. 232; 1995 a. 2; 1995 a. 27 ss. 6936p, 6936r, 9130 (4); 1997 a. 3, 27; 1999 a. 9, 32; 2001 a. 16, 104; 2003 a. 33; 2005 a. 259; 2007 a. 20; 2009 a. 28; 2011 a. 32 s. 3434; Stats. 2011 s. 238.395; 2011 a. 37 ss. 2 to 6; 2013 a. 166 ss. 52, 53, 59, 76; 2015 a. 55; 2017 a. 369.

238.396 238.396 Electronics and information technology manufacturing zone.

238.396(1) (1) Definition. In this section, “tax benefits” means the income and franchise tax credits under ss. 71.07 (3wm) and 71.28 (3wm).

238.396(1m) (1m) Designation of zone; criteria.