Contact: Cullen Werwie, 608-267-7303
Changes expand WHEDA financing program and strengthen the Angel Investment and
Early Stage Investment Tax Credit Program
Madison— Governor Scott Walker today signed two pieces of legislation designed to spur job growth in Wisconsin.
Senate Bill 459 allows the Wisconsin Housing and Economic Development Authority (WHEDA) to issue federally tax-exempt bonds to finance new business expansion projects. Governor Walker thanked Sen. Joe Leibham (R-Sheboygan) and Rep. Michelle Litjens (R-Oshkosh) for authoring the bill.
“This legislation will open the door for more small business owners,” Governor Walker said. “At a time when we know funding is a challenge, this is a common sense change that offers more people the opportunity to build businesses and create jobs.”
“SB 459 removes 1980s-era restrictions that limit WHEDA financing of business development projects,” said WHEDA Executive Director Wyman Winston. “The law currently restricts the types of businesses that may qualify for WHEDA financing. SB 459 will expand WHEDA’s ability to finance business expansion projects resulting in job creation or retention.”
Current law allows WHEDA to issue bonds and notes to finance only certain types of economic development projects. SB 459 broadens the definition of an eligible economic development project to include manufacturing or commercial real estate projects, retail sales companies, research and development activities, and other activities such as long-term working capital.
In addition, statutes currently place a lifetime limit of $200 million on the aggregate amount of bonds that WHEDA may issue for economic development projects. To date, WHEDA has issued economic development bonds totaling $169 million of the $200 million limit. SB 459 would replace the $200 million lifetime cap with an annual $150 million limit for the next six years.
WHEDA provides low‐cost financing for housing, small business and agricultural development. Over the past 40 years WHEDA has financed more than 68,000 affordable rental units, helped more than 110,000 families purchase their first homes, and made more than 29,000 small business and agricultural loan guarantees. For more information, visit wheda.com or call 1-800-334-6873.
Also today, Governor Walker signed Senate Bill 463 into law, which makes improvements to the state’s Angel Investment and Early Stage Investment Tax Credit Program. This program spurs private investment in early-stage businesses, fostering job creation and new business growth across the state.
“This legislation strengthens one of the nation’s leading angel and early stage investment tax credit programs,” said Governor Walker. “These changes provide additional protections to taxpayers and modernize the program to better meet the needs of entrepreneurs and investors.”
The legislation allows the state to recapture the value of tax credits from companies who move out-of-state within three years of receiving investments that qualify. The bill modifies the criteria the WEDC can use for recertifying a company for participation in the program after it had been approved for tax credits. The bill also allows WEDC to recertify a company if has more than 100 employees or has been in operation more than 10 years, because some companies still fit the mold of an early stage company, regardless of the number of employees.
The angel investment tax credit program allows a taxpayer to claim a tax credit that equals 25 percent of an angel investment made directly in a qualified new business venture, which is certified by the WEDC. Since 2005, 195 entrepreneurial companies have been certified to receive tax credit assistance, which has leveraged more than $163 million in investment in those companies and affected at least 930 new jobs.
Governor Walker thanked the authors of the bill, Sen. Joe Leibham (R-Sheboygan) and Rep. Mike Kuglitsch (R-New Berlin) for their work in bringing the legislation to his desk.
Governor Walker signed the legislation today at Palermo’s Pizza in Milwaukee. Palermo’s produces frozen pizza products distributed nationally to over 2000 stores. In 2005, WHEDA allocated $22 million in New Markets Tax Credits that were used by Palermo’s to construct a new 150,000 square foot manufacturing facility in Milwaukee’s Menomonee Valley and to purchase new equipment. Palermo’s is the largest private label manufacturer of pizzas in the United States.
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