234.96 Community development project participation.

(1) The community development finance company may purchase a capital participation instrument of a project. The community development finance company may require that the project meet any of the following conditions:

(a) The project shall be located in a target area and be reasonably expected to contribute to the redevelopment and economic well-being of a target area or target group, other than by increasing or maintaining employment that is not primary employment, or be reasonably expected to increase or maintain threatened primary employment.

(b) The project plans conform to all applicable environmental, zoning, building, planning or sanitation laws.

(c) The project will be of public benefit and for a public purpose and, if the purpose is other than to maintain primary employment, the benefit of the project, including increasing primary employment and the provision of capital, will primarily accrue to a target area or target group.

(d) There is a reasonable expectation that the project will be successful.

(e) Private industry has not provided sufficient capital required for the project or sufficient employment opportunities in the project's area.

(f) The purchase is necessary to the successful completion of the proposed project because funding for the project is unavailable in the traditional capital markets, or because credit has been offered on terms that would preclude the success of the project.

(g) Provision has been made by contract for adequate reporting of financial data by the project to the community development finance company. Those provisions may include a requirement for an annual or other periodic audit of the project's financial records.

(h) The community development finance company will not own more than 49 percent of the voting stock in any enterprise as a result of the purchase.

(i) The proceeds of the purchase will be used solely in connection with the costs of the project.

(j) The community development corporation will maintain sufficient control over the project to ensure that public benefit and public purposes are maintained. Control over the project is sufficient if:

1. The project is conducted by a subsidiary which is completely owned by the community development corporation;

2. The community development corporation owns a majority of the voting stock of the corporation conducting the project; or

3. Binding commitments have been made for reporting to the community development corporation so that the community development corporation retains sufficient control to ensure that benefits under par. (c) will accrue to the intended beneficiaries.

(k) Provision has been made by contract to provide that if the community development finance company desires to dispose of the capital participation instrument, other than through a public offering made in compliance with applicable federal securities law, the community development corporation or its nominee may, within 90 days after receiving notice of the proposed disposition, purchase the capital participation instrument at the price and on the terms specified in the notice. The contract shall provide that the community development finance company may dispose of the capital participation instrument only for terms not more favorable than specified in the notice and only after the community development corporation notifies the authority that it will not purchase on or after the expiration of the 90-day period. The community development finance company may include a provision permitting it to extend the period during which the community development corporation may exercise its option by not more than 90 days.

(L) The community development corporation is able to manage its project responsibilities.

(m) The total investment by the community development finance company in any one community development corporation will not exceed 20 percent of the total amount of its investable funds in community development corporations.

(p) The project will not result in a substantial increase in unemployment in the area of original location of any business or establishment relocated as part of the project.

(2) The findings made by the community development finance company under this section are conclusive.

(3) If 25 percent of the membership of the community development corporation or an equal number of adult members of the target group or adults residing in the target area of the project, if any, sign a petition requesting a public hearing and file the petition with the community development corporation, the community development finance company may only purchase capital participation instruments through the community development corporation after the community development corporation holds a public hearing on the desirability of the project. The public hearing shall be held as close as practical to the proposed project site, prior to commencing the project. The community development corporation shall record the names and addresses of all persons appearing for or against the project.

History: 1981 c. 371; 1983 a. 106; 1987 a. 399 s. 431; Stats. 1987 s. 234.96.