Wisconsin Gov. Scott Walker signed into law a $3 billion incentive package for electronics giant Foxconn on Monday, leaving the state's jobs agency and the Taiwanese manufacturing company to negotiate a final contract.
The deal — on track to be the largest subsidy to a foreign company in U.S. history — offers Foxconn environmental exemptions and tax breaks tied to capital investment, employment and construction materials, in exchange for building a $10 billion LCD manufacturing facility in southeastern Wisconsin.
"There's a lot of things we do in our time in office," Walker said to the lawmakers who joined him to sign the bill. "I hope this is one of the proudest. I know it is for me."
Between the state Assembly and Senate, five Democrats supported the bill, while three Republicans voted against it.
According to an analysis by the state's nonpartisan Legislative Fiscal Bureau, Wisconsin will break even on the deal in 25 years.
Foxconn announced its intent in July to build the facility in Wisconsin, a project state officials have said would be "transformational" for the state and for the American manufacturing industry.
Walker said on Monday he believes the state has the talent and supply chain to make the project "one of the most successful ventures in the history of the world."
Under the legislation, Foxconn will be eligible for up to $1.5 billion in credits for $9.5 billion of payroll expenditures over a 16-year period, and $1.35 billion in credits for $10.7 billion of capital expenditures over a five-year period. The company will also be eligible for a sales and use tax exemption on building materials, supplies and equipment used for construction of the facility, amounting to about $139 million.
The bill expedites the legal appeals process for court cases related to businesses within the enterprise zone created under the legislation. Appeals would first be processed by appellate courts, then sent to the state Supreme Court. The Supreme Court could either hear the case or send it back to an appeals court. If a circuit court judge's decision is appealed, the judge's ruling would automatically be put on hold.
The bill includes a provision that encourages Foxconn to hire Wisconsin residents to fill the 3,000 to 13,000 jobs it has pledged to create. It also sets aside $20 million under the state Department of Workforce Development for a worker training and employment program.
The Wisconsin Economic Development Corporation, which will negotiate the final contract with the company, will be required to set job creation thresholds for Foxconn for each year, which the company would be required to meet in order to claim $1.35 billion in capital expenditure tax credits.
The project will be exempted from state wetlands regulations and from preparing an environmental impact statement required by the state for some other projects. If wetlands are destroyed, mitigation efforts will be encouraged to take place within the same watershed. Wetland mitigation will be required to be done on a 2:1 ratio.
Supporters of the legislation say it is a rare opportunity that will benefit the entire state for years to come. Opponents generally say they welcome the creation of jobs, but that the arrangement raises too many concerns.