Bills of Note: Big Legislation Signed Into Law & Potential Residency Requirements for Contractors

Governor Walker Signs GAB Overhaul and Campaign Finance Changes

Governor Walker has signed two bills making changes to campaign finance laws and splitting the Government Accountability Board (GAB) into an Elections Commission and an Ethics Commission.

Walker partially vetoed the GAB bill, modifying it to require lawmakers from both parties to provide the governor with a list of three nominees of former judges and former clerks to appoint to the respective commissions.

The campaign finance bill makes significant changes to coordination restrictions and lowers the threshold triggering registration for PACs and IECs from $5,000 to $2,500. In addition, the bill eliminates the automatic consumer price index (CPI) adjustment of contribution limits, limits the amount a corporation, association, labor organization, or Indian tribe may contribute to such a segregated fund to $12,000 in the aggregate in a calendar year, incorporates federal law prohibitions on activities by foreign nationals relating to elections, and makes numerous other changes.

Read more about the changes to campaign finance law here and the GAB overhaul.

Building Materials Tax Exemption Signed Into Law

Gov. Walker also signed SB 227, which provides a sales and use tax exemption for contractors buying materials which will be used in a project for a nonprofit organization or local government municipality.

The proposal was originally included in the tax reform package of the budget by the Joint Finance Committee. However, the governor vetoed the language included in the budget that would allow the exemption, saying the language was “too broad” but he was supportive of the intention. In his veto message, Governor Walker encouraged legislation to be introduced with amended language.

2015 Wisconsin Act 126 allows a sales and use tax exemption for materials sold to a construction contractor who will use the purchase materials for a facility being contracted to be built by the county, municipality, school district, or nonprofit organization and on materials used for county-city hospitals, sewerage commissions, metropolitan sewerage districts, and joint local water authorities.

Residency Requirements for Contracting Bill Gets Hearing

AB 493, authored by Rep. Joel Kitchens (R – Sturgeon Bay), requires out-of-state contractors to follow their residency requirements when bidding on Wisconsin state and local construction projects. Under the bill, the Department of Administration and local government units must give preference to a contractor that can ensure the project will employ the same number of Wisconsin residents at least at the percentage of resident employees required by the other state.

For example, Michigan law requires out of state contractors bidding for projects have at least a 50 percent Michigan workforce. This bill would give preference to a Michigan contractor bidding on a local or state project in Wisconsin who employs 50 percent Wisconsin workforce.

The residency requirements would mirror other Midwestern states including Illinois, Indiana, Iowa, Minnesota and Michigan all of which have set up similar provisions. The bill would apply only when other states enforce their own residency requirements and only impact projects funded with state money.

The Assembly Workforce Development held a hearing on AB 493 on December 15. The committee vote has yet to be scheduled.

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