Sen. Tim Cullen signs on to tax credit transfer bill
JANESVILLE—Sen. Tim Cullen said Tuesday he's convinced the ambiguity has been removed from a bill that would allow the transfer of tax credits between companies, a proposal that's long been a top priority for Forward Janesville.
Cullen and five other senators introduced a revised bill Monday that will get its first public hearing Wednesday.
As part of its economic development toolbox, the state for years has provided income tax credits if companies meet benchmarks spelled out in economic development contracts.
Forward Janesville has long maintained that the income tax credits are of little value to many companies because they don't generate enough income to make the credits meaningful.
The group has argued that companies involved in the transfer of tax credits would have a relationship that creates jobs and fosters investment on the local level.
For example, Company A might want to lease space from the more established Company B. Company B makes improvements to its facility to accommodate Company A and therefore assumes a degree of risk. As a way to mitigate that risk, Company A—if it doesn't have sufficient income to use awarded tax credits—would transfer them to Company B.
Introduced on Monday, Senate Bill 449 would allow the transfer of tax credits if the original recipient is a company that either is either headquartered in Wisconsin or plans to move to the state and base the majority of its employees here.
It further mandates that the original recipient increase its Wisconsin workforce by 10 percent or make a significant capital investment in its Wisconsin operation.
The last two conditions were missing from Senate and Assembly bills that kicked around the Capitol for the last two years before dying.
As such, Cullen said at the time the legislation was too vague.
“I was accused of being anti-business because I wouldn't jump on board,” said Cullen, D-Janesville. “I've never been against the transfer of tax credits. My concern was that we were giving tax credits and allowing them to be transferred with no assurance that they were in any way benefiting the taxpayer … that the recipients were doing what they were supposed to be doing.
“It wasn't just me. Others in the Legislature were saying the same thing.”
Cullen said he is now sure the bill will allow the transfer of credits and protect state taxpayers.
“We've looked at it every which way to make sure there's absolutely no way around it,” he said.
Senate Bill 449 has bipartisan support. It was introduced Monday by four Republicans and two Democrats in the Senate. Twelve Republicans and seven Democrats are cosponsoring it in the Assembly.
Locally, it's cosponsors in the Assembly are Amy Loudenbeck, R-Clinton, and Democrats Debra Kolste of Janesville, Andy Jorgensen of Milton and Janis Ringhand of Evansville.
Dan Cunningham, Forward Janesville's vice president of government relations, said his organization is thrilled that the tax credit transfer bill is back on the table.
He plans to be in Madison on Wednesday to offer favorable testimony.
“There's been an awful lot of hard work on this, and the taxpayer accountability issues that Sen. Cullen identified have been resolved,” he said. “We hope it has smooth sailing this time.”