Foxconn $3B Tax Credits Could See Constitutional Challenge

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By Michael J. Bologna

A Wisconsin legislative agency is casting doubts about the legality of special tax legislation enacted to land the proposed $10 billion Foxconn Technology Group manufacturing campus.

The Wisconsin Legislative Council, a nonpartisan state agency providing legal guidance to lawmakers, issued an opinion Sept. 19 examining potential legal problems with Special Session A.B. 1, now known as 2017 Wisconsin Act 58. The law, signed Sept. 18 by Gov. Scott Walker (R), grants Foxconn $3 billion in tax credits, exemptions, and subsidies for its plan to construct a 20 million-square-foot campus in southeastern Wisconsin.

The opinion focused primarily on the “expedited appellate procedures” created under the tax incentive law. An amendment added during the final phase of the legislative process provides Foxconn with special legal rights if it faces litigation. The amendment specified that circuit court rulings affecting Foxconn could be stayed and appeals would proceed directly to the Wisconsin Supreme Court.

The legislative council said several provisions of Act 58 could face challenges under the state constitution’s separation of powers doctrine.

“Three provisions of the Act appear to be plausibly subject to challenge on separation of power grounds: (1) the provision requiring the Court of Appeals to certify certain orders and judgments to the Supreme Court; (2) the provision requiring the Supreme Court to give preference to such certifications; and, (3) the provision that automatically stays certain circuit court judgments and orders,” the opinion said.

Senate Minority Leader Jennifer Shilling (D) requested the legal review. Shilling, who voted against passage of the Foxconn bill, issued a statement questioning the state’s decision to give preferential treatment to a single large company by diluting the traditional legal review process.

The Walker administration dismissed the findings, saying it believes the new law conforms to all state constitutional principles.

To contact the reporter on this story: Michael J. Bologna in Chicago at mbologna@bna.com

To contact the editor responsible for this story: Jennifer McLoughlin at jmcloughlin@bna.com

For More Information

Text of the opinion is at http://src.bna.com/sLk.

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