Summer 2010
Newsletter Letter from the President Greetings: The past few months have been busy for the Wisconsin Business Council. As the legislative session in Madison comes to an end, our organization was very successful in promoting and securing legislation that will grow the state economy, while working against legislation that would stifle future growth.
Wisconsin Business Council 14 W. Mifflin Street Suite 314 Madison, WI 53703
Our membership is also growing rapidly, and we have a number of exciting projects we’re working on.
Upcoming Events Infrastructure Symposium – Because of the legislative session, the previously planned symposium on infrastructure development in Wisconsin has been rescheduled for later this summer. The event is tentatively scheduled for July, so we’ll keep you posted as we approach the date.
The WBC Board of Directors has approved the creation of the following WBC Committees: Energy Infrastructure Health Care Economic Development & Regulations/Taxes Education & Workforce Development If you would like to be part of any of these committees please let us know. You can read about all of this, as well as a profile on one of our members – Miller St. Nazianz – in the summer edition of our quarterly newsletter. We look forward to keeping you updated as our efforts to improve the state economy and protect our quality of life continue. Sincerely,
Phillip Prange President & CEO, Wisconsin Business Council
Gubernatorial Candidate Economic Proposals Over the past several months, the Wisconsin Business Council has met with Governor Doyle, Rep. Jeff Fitzgerald, Rep. Mike Sheridan, Sen. Russ Decker, Sen. Scott Fitzgerald, and other legislative leaders to discuss efforts to create new jobs and help businesses expand in the state. As part of those efforts to reach out to policymakers, we’ve had the pleasure of hosting Milwaukee Mayor Tom Barrett and Milwaukee County Executive Scott Walker at WBC luncheons, and heard their visions for improving the Wisconsin business climate. While we haven’t yet had a chance to meet with Mark Neumann regarding his plans for growing Wisconsin’s economy, we thought we should share with you the relevant policy proposals that the Barrett and Walker campaigns have discussed thus far.
Scott Walker Walker has set the goal of creating 250,000 new jobs by the end of his first term, and has provided a six-point plan to accomplish this goal: • Lower Taxes: Walker has suggested lowering the business tax and income, freezing the property tax, and phasing out retirement income taxes. • Less Regulation: State agencies should be more responsive to the customer and standards must be science-based and predictable. • End Frivolous Lawsuits: Enact tort reform to block frivolous lawsuits and lower health care costs. • Better Education: Give the UW System the tools to operate more like a business and pursue economic development opportunities, while increasing accountability. • Improve Healthcare: Eliminate the state tax on Health Savings Accounts, provide full disclosure on medical procedures, and help employers tap into larger health insurance purchasing pools to share the risk. • Strong Infrastructure: Focus on finding reliable energy sources and dependable transportation to strengthen Wisconsin’s infrastructure. More information on Walker’s plans is available at www.scottwalker.org.
Tom Barrett Barrett has released a plan that he says would help the state create 180,000 jobs over the next three years. Among Barrett’s policy proposals are: • Targeted tax cuts and incentives to help spur private sector job creation, including increasing research and development expenditures, • A “Jobs Now” initiative, which includes reducing regulatory barriers for new construction projects, investing in workforce training, and creating a database that links Wisconsin suppliers and encourages more sales for state businesses. • The creation of a centralized “Office of Job Creation” in the Governor’s office that reports directly to the Governor. • An overhauled, streamlined economic development toolkit for the state to employ, including a simplified regulatory process and an expedited permitting process for businesses
in the state. • A state venture capital fund, called the “Wisconsin Entrepreneur’s Fund,” which would commit up to $100 million over the next five years to 8-10 venture capital funds, and raise at least $500 million in aggregate funds. Barrett’s complete plan is available at www.barrettforwisconsin.com.
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Wisconsin Legislative Update The Wisconsin Legislature concluded its final floor period and adjourned for the year at the end of April with a flurry of activity. The following are a handful of bills that the WBC worked on this past session: The learn more about any of these pieces of legislation or how they might affect your business, please contact Brian Taffora at taffora@ wibusiness.org.
2009 Wisconsin Act 112 Recovery Zone Facility Bonds and County Industrial Development Revenue Bonds The ARRA, the Federal Stimulus Act, authorized certain local governments to issue specified amounts of several types of taxexempt bonds, including recovery zone facility bonds (RZF bonds), which are tax-exempt private activity bonds that allow businesses within recovery zones to finance certain depreciable capital projects. Act 112 provides for the waiver of city and county RZF bond allocations and the reallocation of those bond allocations by Commerce. The Act also provides counties with the power to issue industrial development revenue bonds. 2009 Wisconsin Act 205 Conduit Revenue Bonding Commission Act 205 authorizes two or more political subdivisions to enter into an agreement to create a commission to issue conduit revenue bonds. A single commission may be created under Act 205. In order to be
Legislative Update created, the commission must submit its formation agreement to the Attorney General before the first day of the fifth month after the effective date of Act 205 (the Act took effect on May 6, 2010). If more than one formation agreement is submitted to the Attorney General within this time frame, preference must be given to the agreement that demonstrates support from at least one statewide organization located in Wisconsin that represents the interests of political subdivisions and has political subdivisions among its membership. At the time of its creation, all members of a commission shall be a political subdivision of the state. Following creation, political subdivisions located in other states may join the commission. At all times, a majority of the board members shall be public officials or current or former employees of a Wisconsin political subdivision. In addition to the general authority to issue conduit revenue bonds, Act 205 enumerates a list of powers given to a commission, including the power to exercise eminent domain and condemn property. Bonds issued by a commission are not public debt. Unless otherwise expressly provided in the bond resolution, bonds issued by a commission are payable solely from revenues derived by the project to be financed, or from a contract entered into in connection with the bonds and pledged to the payment of the bonds. The bonds issued by a commission are not debts of the state or the political subdivisions creating the commission, and neither would be obligated to levy a tax or make an appropriation for the repayment of the bonds. Before a commission may authorize a bond to finance capital improvement project in Wisconsin, the project must be approved by all political subdivisions within whose boundaries the project is to be located. Subject to certain conditions and approvals, bonds issued by a commission may be exempt from state taxation if the bonds are used to finance projects related to elderly housing, acquisition of information technology by health facilities, or housing and community development.
2009 Wisconsin Act 265 Angel and Early Stage Seed Investment Tax Credits Act 265 increases the maximum amount of angel investment tax credits that may be claimed in a tax year from $5.5 million to $6.5 million for calendar year 2010, and from $18.0 million to $20.0 million for tax years beginning after December 31, 2010. (These limits are in addition to $250,000 in credits that are available for investments in nanotechnology businesses.)
Act 265 also allows a claimant to claim an angel investment credit for an investment in a business that was located out of the state, if the investment was made no more than 60 days before that business relocated to Wisconsin, and the business is certified as a qualified new business venture within 180 days after the relocation to Wisconsin. Act 265 increases the maximum amount of early stage seed investment tax credits that may be claimed in a tax year from $6.0 million to $8.0 million for calendar year 2010, and from $18.5 million to $20.5 million, for tax years beginning after December 31, 2010. (These limits are in addition to $250,000 in credits that are available for investments in nanotechnology businesses.) The Act authorizes Commerce to promulgate rules to reallocate angel investment and early state seed investment tax credits that are unused in any calendar year to persons eligible for the jobs tax credit created under Act 28. Post-Secondary Education Tax Credit Act 265 creates a post-secondary education tax credit under the state individual income and corporate income and franchise taxes generally available for amounts paid for tuition for a nonfamily member who was eligible for a grant from the federal Pell Grant program. The credit may only be claimed for the tax year in which the individual graduates from an education program of a qualified post-secondary institution, but is based on the amount of eligible tuition which the claimant paid for the individual for all tax years. Unused credits may be carried forward up to 15 years to offset future tax liabilities. The tax credit is equal to the following: • 25% of the tuition that the claimant paid for tuition of an individual. • Thirty percent of the tuition that the claimant paid for tuition of an individual if the individual was enrolled in a course of instruction that relates to a projected worker shortage in the state, as determined by the local workforce development boards established under federal law. University of Wisconsin System Wisconsin Small Company Advancement Program Act 265 appropriates $2,000,000 to the UWS and directs the UW Board of Regents to use the funds to make grants of $250,000 each to WiSys Technology Foundation, Inc., (WiSys) for the Wisconsin Small Company Advancement program.
Legislative Update Under the program, WiSys will partner with small companies, (those with 25 or fewer employees and gross annual sales of $3 million or less) in need of research and development services with UWS faculty and academic staff with expertise in a particular field. Partner companies must contribute funds or in-kind-support for the project. The UWS, the UW campus, WiSys, and the inventor will share in the profits from the resulting product or technology through a royalty-bearing contract or license. To receive a grant from the board, WiSys must show that it has secured matching funds from a nonstate source in an amount equal to the grant after January 1, 2010. Up to $75,000 of the amount appropriated may be used for administrative costs related to the program. These funds are exempt from the matching requirement. UWS Business Plan Competition Act 265 provides annual funding of $125,000 GPR to the UWS to support a business plan competition program at institutions other than UW-Madison. This program must make entrepreneurial expertise available to students and have ties to campus-based business plan contests and national organizations that foster student entrepreneurism. The board may only use the funds provided if it receives matching funds from private contributions.
150% of the poverty line. The skills enhancement program must include access to transportation, child care, career counseling, job placement assistance, and financial support for education and training for eligible individuals. Commerce WDF Act 265 increases funding for the WDF by $500,000 GPR annually. The WDF is a biennial appropriation of GPR to Commerce. Currently, the WDF provides moneys for grants to Center for Advanced Technology and Innovation; for technology commercialization grants and loans; for grants and loans to support capital financing, worker training, entrepreneurial development, and other economic development projects; and for reimbursements under the Wisconsin trade project program. Microloan Pilot Program The Act creates a pilot program in Commerce for awarding microloans of up to $25,000 from the WDF at nominal interest rates for the creation of new businesses. Commerce must designate one urban and one rural area of the state that are affected by high unemployment. Residents of those areas are eligible for microloans.
UW-La Crosse Emerging Technology Center
Manufacturing Facility Conversion Grants
The Act provides $400,000 GPR in 2009-10 to the board for the development of an emerging technology center at UW-La Crosse. The funding may be used only if UW-La Crosse receives matching funds from private contributions.
Act 265 creates a manufacturing facility conversion grant program beginning in fiscal year 2010- 11 and increases funding for the WDF by $2,000,000 GPR beginning in 2010-11 for manufacturing facility conversion grants and for other eligible WDF grants and loans.
WTCS Training Program Grants
The grants are to provide incentives to companies for converting existing manufacturing facilities to produce renewable energy or manufacturing equipment used in the production of renewable energy. Up to $2,000,000 in grants may be awarded.
Act 265 increases WTCS funding for grants to district boards for skills training or other education related to the needs of business by $1,000,000 GPR in 2010-11. The Act also deletes a statutory requirement that in awarding grants, priority must be given to welding training. The Act also increases from $1,000,000 to $2,000,000 the amount that is set aside annually under this program for advanced manufacturing skills training. Department of Children and Families Skills Enhancement Program Act 265 allocates $250,000 GPR annually for grants to community action agencies for a skills enhancement program for individuals who work at least 20 hours per week and whose earned income is at or below
Technology Transfer Grant and Loan Program Act 265 creates a technology transfer grant and loan program under which Commerce may award a grant or loan to a research institution, up to a maximum of $100,000 for each institution, to provide money for research and development activities related to the creation or retention of jobs by a business, or to improving the competitive position of a business by improving the innovativeness of the business. Rural Outsourcing Grants
Legislative Update Act 265 authorizes Commerce to award grants during the 2009-11 biennium to businesses for outsourcing work to rural municipalities. The maximum total amount of rural outsourcing grants that may be awarded is $500,000. Grantees must provide equal matching funds from sources other than the state. Grant to Pleasant Prairie Technology Incubator Center Under a provision in Act 28, Commerce is required to make a grant of $70,000 from the WDF to the Pleasant Prairie Technology Incubator Center no later than July 31, 2011, if the center obtains equal matching funds of $70,000. The Act requires Commerce to award the grant no later than June 24, 2010.
economic development organizations. Economic Policy Board The Economic Policy Board (Board) attached to Commerce has various duties related to economic development programs. Act 265 deletes provisions in various statutes that require Commerce to consult or cooperate with the Board before taking certain actions, including promulgating rules, awarding grants or loans, encouraging small businesses to apply for grants or loans, developing policies relating to obtaining reimbursement of grants and loans, and monitoring the use of grants and loans by recipients. The Act also specifies that the Board must do all of the following: • Consult with the Commerce on strategic economic policy for the state. • Suggest legislation to achieve strategic economic policy objectives.
Wisconsin Technology Council Act 265 increases the appropriation for the Wisconsin Technology Council (WTC) by $100,000 GPR annually. WTC must use these funds to employ a grant writer to assist businesses in applying for federal Small Business Innovation Research grants. The Act also provides $100,000 GPR to the WTC to procure an economic modeling database for the use of regional economic development entities. Office of Regulatory Assistance Act 265 renames the current “Regulatory Ombudsman Center” in Commerce as the “Office of Regulatory Assistance” and modifies the duties of the renamed Office pertaining to assisting businesses in the process of obtaining permits. The Act also creates a new position for the office and reassigns a current position from the small business ombudsman clearinghouse to the office. The Act requires the Office of Regulatory Assistance to do all of the following: • Provide assistance with obtaining and maintaining permits, and any licenses and approvals necessary for a business to operate in this state, including doing all of the following on behalf of businesses: o Explaining requirements for obtaining permits. o Tracking the progress of applications for permits. o Helping businesses comply with laws and rules applicable to businesses, including providing plain-language explanations of laws and rules. • Serve as a liaison between businesses and agencies, authorities, municipalities, and local
2009 Wisconsin Act 406 Renewable Resource Credits Act 406 creates a new type of credit under the renewable portfolio standard (RPS) program. Under that program, providers of electric power must ensure that specified percentages of the electricity they sell in a year is derived from renewable resources. An electric provider may create credits if it sells more qualifying electricity in a year than required. Credits can be banked for later use in complying with the RPS requirements or sold in an interstate credit trading market. Act 406 specifies that RPS credits may be created based on the use of certain nonelectric forms of energy by an electric provider or its customers or members, provided that the energy use displaces the use of electricity derived from conventional resources. The forms of energy from which such credits may be created are the following: • • • • • •
Solar energy, including solar water heating and direct solar applications, such as solar light pipe technology. Geothermal energy. Biomass and biogas. Synthetic gas created by the plasma gasification of waste. Fuel produced by the pyrolysis of organic or waste material. Densified fuel pellets made from certain wastes and having certain properties.
Member Profile: Miller St. Nazianz, Inc. Since John Miller’s country store began serving the agricultural community well over 100 years ago, Miller St. Nazianz has grown from a small, local distributor of farming equipment to a manufacturer with products sold worldwide. The first company to sell a horseless tractor in Wisconsin, Miller started small in 1899, dealing McCormick-Deering equipment to local farmers. The company turned its experience in distributing equipment and its knowledge about the products towards manufacturing in the 1980s, and began producing quality products from forage boxes to rotary rakes to trailer sprayers. In the 1990s, the company established Miller Application Technologies to develop new technologies and further advance its reputation for cutting-edge, quality goods. Miller now offers multiple product lines, including the Nitro 4000, N2XP, and Condor series sprayers, Atlas floater chassis, and Ag-Bag silage baggers. Their Condor and Nitro series sprayers have won numerous accolades over the past several years, including the CropLife Iron Product of the Year Award in 2010 and 2008, respectfully, as well as Gold Medals at agricultural expos around the globe. But despite the company’s continue success, the Miller St. Nazianz has remained committed to the community in which it all started. Five generations of Millers have led the company from its headquarters in St. Nazianz, and have maintained the highest standards of quality, integrity, and innovation for decades. For more information on Miller St. Nazianz, please visit their website at www.millerstn.com.