2011 - 2012 LEGISLATURE
ASSEMBLY SUBSTITUTE AMENDMENT 1,
TO 2011 ASSEMBLY BILL 376
February 22, 2012 - Offered by Representative Knilans.
AB376-ASA1,1,2 1An Act to create 238.137 of the statutes; relating to: authorizing the transfer
2of tax credits earned in connection with economic development in this state.
Analysis by the Legislative Reference Bureau
Under current law, a tax credit awarded by the Wisconsin Economic
Development Corporation (corporation) may normally only be claimed by the person
certified by the corporation to claim that credit; the credit may not be transferred to
another person.
This substitute amendment directs the corporation to create a program for the
transfer of tax credits awarded by the corporation. Under the substitute
amendment, the corporation may authorize the transfer of a portion of a tax credit
if the corporation determines that the person meets at least one of the following
additional conditions:
1. The person is headquartered in, and employs at least 51 percent of its
employees in, Wisconsin.
2. The person intends to relocate its headquarters to, and employ at least 51
percent of its employees in, Wisconsin.
3. The person intends to expand its operations in Wisconsin, and that
expansion will increase the number of full-time employees employed by the person
in Wisconsin by a number that is at least 10 percent of the person's full-time
employees.

4. The person intends to expand its operations in Wisconsin, and the person will
make a significant capital investment in property in Wisconsin as a result of that
expansion.
Once the corporation authorizes a person to transfer a tax credit, that person
may transfer up to 85 percent of the tax credit to another person who has Wisconsin
tax liability, except that no tax credit may be transferred under the substitute
amendment in exchange for money. The person transferring the credit must notify
the corporation and the Department of Revenue of that transfer. The person to whom
a credit is transferred may carry forward any unused amount of the transferred
value of that credit for up to 15 years until fully claimed. Also, the corporation may
prevent that transferee from claiming the tax credit for up to three years after the
credit is transferred.
The substitute amendment also authorizes the corporation to waive or modify
a requirement of a certification for a tax credit issued by the corporation if a person
who may transfer the tax credit applies to the corporation for that waiver or
modification and the corporation determines that the requested waiver or
modification will support economic development in Wisconsin. The substitute
amendment does not otherwise relieve any person of the person's responsibilities in
connection with a tax credit certification. If the corporation revokes a person's
certification for a tax credit and that person has already transferred a portion of the
tax credit, that person, not the person to whom the credit was transferred, must
repay the full amount of the tax credit to the state.
Under the substitute amendment, the corporation may authorize the transfer
of up to $10,000,000 in partial tax credits over five years. However, if after reaching
that 5-year limit, the corporation determines that an extension of the program will
support significant economic development in Wisconsin, the corporation may
continue the program for up to an additional five years and authorize transfer of up
to an additional $10,000,000 in partial tax credits. However, any such extension of
the program is subject to passive review by the Joint Committee on Finance.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB376-ASA1, s. 1 1Section 1. 238.137 of the statutes is created to read:
AB376-ASA1,3,2 2238.137 Pilot program for the transfer of tax credits earned for
3economic development in this state.
(1) Application and corporation
4authorization.
(a) A person who the corporation certifies or otherwise authorizes
5to claim a tax credit may apply to the corporation on a form prescribed by the
6corporation for authorization to transfer that tax credit under this section. The

1corporation shall notify the person of the corporation's determination within 10
2business days after the corporation receives the application.
AB376-ASA1,3,53 (b) The corporation shall authorize the transfer of a tax credit if a person
4applies for an authorization under par. (a) and the corporation finds that the person
5meets at least one of the following conditions:
AB376-ASA1,3,76 1. The person is headquartered and employs at least 51 percent of its employees
7in this state.
AB376-ASA1,3,98 2. The person intends to relocate its headquarters to this state and employ at
9least 51 percent of its employees in this state.
AB376-ASA1,3,1310 3. The person intends to expand its operations in this state, and that expansion
11will result in an increase in the number of full-time employees employed by the
12person in an amount equal to at least 10 percent of the person's full-time workforce
13at the time of application.
AB376-ASA1,3,1614 4. The person intends to expand its operations in this state, and that expansion
15will result in the person making a significant capital investment in property located
16in this state, as determined by the corporation.
AB376-ASA1,3,2317 (c) 1. Subject to subd. 2. and sub. (2), a person may transfer a tax credit to
18another person who is subject to taxation under ch. 71 if the corporation authorizes
19that transfer and if the person who is certified to claim the credit notifies the
20department of revenue and the corporation of the transfer in the manner prescribed
21by the corporation. The person to whom a tax credit is transferred may carry forward
22any unused amount of the transferred value of that credit as provided under the
23appropriate provision in ch. 71.
AB376-ASA1,3,2524 2. A tax credit may not be transferred under this paragraph in exchange for
25money.
AB376-ASA1,4,4
1(d) The corporation may, as a condition of an authorization under this
2subsection, prohibit a person to whom the tax credit is transferred from claiming that
3credit for a period not to exceed 3 years after the date on which the credit is
4transferred.
AB376-ASA1,4,8 5(2) Limitations on the transfer of tax credits. A person may not transfer
6more than 85 percent of the total value of a tax credit. Once a portion of a tax credit
7is transferred under this section, the remaining portion of that credit may not be
8transferred and may not be claimed against tax liability by any person.
AB376-ASA1,4,12 9(3) Corporation waiver of certification requirements. Notwithstanding s.
10238.303 (2) or any other provision of this chapter or of ch. 71, the corporation may
11modify or waive any requirement of a certification or other authorization to claim a
12tax credit that was issued by the corporation if all of the following conditions are met:
AB376-ASA1,4,1513 (a) The person subject to the requirement applies to the corporation for a
14modification or waiver of that requirement in the manner prescribed by the
15corporation.
AB376-ASA1,4,1716 (b) The corporation authorizes the person to transfer the tax credit under this
17section, and the person does transfer the credit, as authorized.
AB376-ASA1,4,1918 (c) The corporation determines that the requested modification or waiver will
19support economic development in this state.
AB376-ASA1,4,24 20(4) Repayment. (a) If the corporation revokes a person's certification or other
21authorization to claim a tax credit issued by the corporation and at the time of
22revocation that person has transferred a portion of that credit under this section,
23that person shall repay the full amount of the credit to the corporation
24notwithstanding that transfer.
AB376-ASA1,5,2
1(b) The corporation shall pay any amounts it receives under par. (a) to the
2secretary of administration for deposit in the general fund.
AB376-ASA1,5,7 3(5) Program limits and termination. (a) Except as provided in par. (b), the
4corporation may not authorize the transfer of portions of tax credits under this
5section that total more than $10,000,000, and the corporation may not authorize the
6transfer of a tax credit after 60 months after the effective date of this paragraph ....
7[LRB inserts date].
AB376-ASA1,6,28 (b) Upon expiration of the 60-month period under par. (a), the corporation may
9continue to authorize the transfer of tax credits under this section for up to an
10additional 60 months, and the corporation may authorize the transfer of up to an
11additional $10,000,000 in partial tax credits, if the corporation determines that a
12continuation of the program under this section will promote significant economic
13development in this state. Before the corporation authorizes the transfer of a tax
14credit under this paragraph, the chief executive officer of the corporation shall notify
15the joint committee on finance in writing that the corporation intends to continue
16authorizing the transfer of tax credits under this section. That notice shall state the
17reasons supporting the corporation's determination that the transfer of additional
18tax credits will promote significant economic development in this state. If, within
1914 working days after the date of that notice, the cochairpersons of the committee do
20not notify the corporation that the committee has scheduled a meeting to review the
21corporation's proposed continuation of the program, the corporation may proceed to
22authorize the transfer of additional tax credits under this section. If, within 14
23working days after the date of that notice, the cochairpersons of the committee notify
24the corporation that the committee has scheduled a meeting to review the proposed

1continuation of the program, the corporation may proceed to authorize the transfer
2of partial tax credits only upon approval of the committee.
AB376-ASA1, s. 2 3Section 2. Initial applicability.
AB376-ASA1,6,64 (1) This act first applies to a certification or other authorization to claim a tax
5credit issued by the Wisconsin Economic Development Corporation on January 1,
62012.
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