AB752: Bill Text

LRB-4472/1

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2001 - 2002 LEGISLATURE

2001 Assembly BILL 752

January 28, 2002 - Introduced by Representatives Schooff, Balow, Musser, Plale, Riley and Seratti, cosponsored by Senators Robson, Burke and Wirch. Referred to Committee on Ways and Means.

AB752,1,7 An Act to amend 71.05 (6) (a) 15., 71.21 (4), 71.26 (2) (a), 71.34 (1) (g) and 77.92 (4); and to create 16.50 (8), 71.07 (5d), 71.10 (4) (fm), 71.28 (5d), 71.30 (3) (dm), 71.47 (5d), 71.49 (1) (dm) and 560.186 of the statutes; relating to: creating an income and franchise tax credit for businesses that purchase and operate distributed generation power generators and requiring the secretary of administration to reduce expenditure estimates for certain general purpose revenue appropriations.

Analysis by the Legislative Reference Bureau

This bill creates an income tax and franchise tax credit for businesses that purchase and operate distributed generation power generators. Under the bill, a "distributed generation power generator" is a generator that consists of reciprocating engines that are fueled by natural gas or a combination of natural gas and diesel, that has a thermal efficiency of at least 40%, and that has a nitrogen oxide emission level of no more than 1.5 grams per brake horsepower-hour.

Under the bill, a business that is certified by the department of commerce may claim a tax credit that is equal to the amount the business paid in the taxable year to purchase and operate a distributed generation power generator. However, the amount that a business may claim in any taxable year is limited to $400,000. The total amount of the credit for all claimants in any taxable year is limited to $2,000,000. If the total amount of credits claimed in any taxable exceeds $2,000,000, the department of revenue must prorate the credit according to the amount of the purchase costs and operating costs of a distributed generation power generator that are incurred by businesses during the taxable year. If the credit claimed by a business exceeds the business's tax liability, the state will not issue a refund, but the business may carry forward any remaining credit to subsequent taxable years.

Finally, the bill requires the secretary of administration, after the close of each fiscal year, to identify all general purpose revenue appropriations that are made to reimburse the capital improvement fund and from which disbursements were made in the fiscal year in an amount less than the authorized expenditure estimate. From among these appropriations, the secretary must reduce the authorized expenditure estimates for the succeeding fiscal year by an amount equal to the lesser of $2,000,000 or the total amount that is paid for the distributed generation power generator tax credit in the prior calendar year.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB752, s. 1 Section 1. 16.50 (8) of the statutes is created to read:

AB752,2,7 16.50 (8) Re-estimates of certain general purpose revenue appropriations. (a) After the close of each fiscal year, the secretary shall identify all general purpose revenue appropriations that are made to reimburse the capital improvement fund and from which disbursements were made in the fiscal year in an amount less than the estimated expenditure amount approved by the secretary under sub. (2) or the governor under sub. (3) for that fiscal year.

AB752,2,12 (b) Notwithstanding sub. (2), from among the appropriations identified under par. (a), the secretary shall reduce the estimated expenditure amounts for the succeeding fiscal year by an amount equal to the lesser of $2,000,000 or the total amount that is paid under ss. 71.07 (5d), 71.28 (5d), and 71.47 (5d) in the prior calendar year.

AB752, s. 2 Section 2. 71.05 (6) (a) 15. of the statutes, as affected by 2001 Wisconsin Act 16, is amended to read:

AB752,3,7 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (3g), and (3s), and (5d) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership's, company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1) (g).

AB752, s. 3 Section 3. 71.07 (5d) of the statutes is created to read:

AB752,3,10 71.07 (5d) Distributed generation power generator credit. (a) In this subsection:

AB752,3,13 1. "Claimant" means a sole proprietor, a partner, a member of a limited liability company, or a shareholder of a tax-option corporation who files a claim under this subsection.

AB752,3,17 2. "Distributed generation power generator" means a generator consisting of reciprocating engines that are fueled by natural gas or a combination of natural gas and diesel, that has a thermal efficiency of at least 40%, and that has a nitrogen oxide emission level of no more than 1.5 grams per brake horsepower-hour.

AB752,3,22 (b) Subject to the limitations provided in this subsection, a claimant certified under s. 560.186 may claim as a credit against the tax imposed under s. 71.02 an amount, not exceeding $400,000 in any taxable year, that is equal to the amount that the claimant paid in the taxable year to purchase and operate a distributed generation power generator.

AB752,4,3 (c) The total amount of the credit for all claimants under this subsection and ss. 71.28 (5d) and 71.47 (5d) may not exceed $2,000,000 in any taxable year. If the total amount of credits claimed by all claimants in any taxable exceeds $2,000,000, the department shall prorate the credit according to the amount of the purchase costs and operating costs of a distributed generation power generator that are incurred by all claimants during the taxable year.

AB752,4,5 (d) Section 71.28 (4) (e), (f), (g), and (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

AB752,4,13 (e) Partnerships, limited liability companies, and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and the amount of, the credit are based on their payment of amounts under par. (b). A partnership, limited liability company, or tax-option corporation shall compute the amount of credit that each of its partners, members, or shareholders may claim and shall provide that information to each of them. Partners, members of limited liability companies, and shareholders of tax-option corporations may claim the credit in proportion to their ownership interest.

AB752, s. 4 Section 4. 71.10 (4) (fm) of the statutes is created to read:

AB752,4,16 71.10 (4) (fm) The distributed generation power generator credit under s. 71.07 (5d).

AB752, s. 5 Section 5. 71.21 (4) of the statutes, as affected by 2001 Wisconsin Act 16, is amended to read:

AB752,4,21 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2ds), (2dx), (3g), and (3s) , and (5d) and passed through to partners shall be added to the partnership's income.

AB752, s. 6 Section 6. 71.26 (2) (a) of the statutes, as affected by 2001 Wisconsin Act 16, is amended to read:

AB752,5,13 71.26 (2) (a) Corporations in general. The "net income" of a corporation means the gross income as computed under the Internal Revenue Code as modified under sub. (3) minus the amount of recapture under s. 71.28 (1di) plus the amount of credit computed under s. 71.28 (1), (3), (4), (5), plus the amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), and (1dx), (3g) (1dx), and (5d) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership's, limited liability company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1) (g) plus the amount of losses from the sale or other disposition of assets the gain from which would be wholly exempt income, as defined in sub. (3) (L), if the assets were sold or otherwise disposed of at a gain and minus deductions, as computed under the Internal Revenue Code as modified under sub. (3), plus or minus, as appropriate, an amount equal to the difference between the federal basis and Wisconsin basis of any asset sold, exchanged, abandoned, or otherwise disposed of in a taxable transaction during the taxable year, except as provided in par. (b) and s. 71.45 (2) and (5).

AB752, s. 7 Section 7. 71.28 (5d) of the statutes is created to read:

AB752,5,16 71.28 (5d) Distributed generation power generator credit. (a) In this subsection:

AB752,5,17 1. "Claimant" means a corporation that files a claim under this subsection.

AB752,5,21 2. "Distributed generation power generator" means a generator consisting of reciprocating engines that are fueled by natural gas or a combination of natural gas and diesel, that has a thermal efficiency of at least 40%, and that has a nitrogen oxide emission level of no more than 1.5 grams per brake horsepower-hour.

AB752,6,2 (b) Subject to the limitations provided in this subsection, a claimant certified under s. 560.186 may claim as a credit against the tax imposed under s. 71.23 an amount, not exceeding $400,000 in any taxable year, that is equal to the amount that the claimant paid in the taxable year to purchase and operate a distributed generation power generator.

AB752,6,8 (c) The total amount of the credit for all claimants under this subsection and ss. 71.07 (5d) and 71.47 (5d) may not exceed $2,000,000 in any taxable year. If the total amount of credits claimed by all claimants in any taxable exceeds $2,000,000, the department shall prorate the credit according to the amount of the purchase costs and operating costs of a distributed generation power generator that are incurred by all claimants during the taxable year.

AB752,6,10 (d) Subsection (4) (e), (f), (g), and (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

AB752,6,18 (e) Partnerships, limited liability companies, and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and the amount of, the credit are based on their payment of amounts under par. (b). A partnership, limited liability company, or tax-option corporation shall compute the amount of credit that each of its partners, members, or shareholders may claim and shall provide that information to each of them. Partners, members of limited liability companies, and shareholders of tax-option corporations may claim the credit in proportion to their ownership interest.

AB752, s. 8 Section 8. 71.30 (3) (dm) of the statutes is created to read:

AB752,6,21 71.30 (3) (dm) The distributed generation power generator credit under s. 71.28 (5d).

AB752, s. 9 Section 9. 71.34 (1) (g) of the statutes, as affected by 2001 Wisconsin Act 16, is amended to read:

AB752,7,3 71.34 (1) (g) An addition shall be made for credits computed by a tax-option corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (3), and (3g), and (5d) and passed through to shareholders.

AB752, s. 10 Section 10. 71.47 (5d) of the statutes is created to read:

AB752,7,6 71.47 (5d) Distributed generation power generator credit. (a) In this subsection:

AB752,7,7 1. "Claimant" means a corporation that files a claim under this subsection.

AB752,7,11 2. "Distributed generation power generator" means a generator consisting of reciprocating engines that are fueled by natural gas or a combination of natural gas and diesel, that has a thermal efficiency of at least 40%, and that has a nitrogen oxide emission level of no more than 1.5 grams per brake horsepower-hour.

AB752,7,16 (b) Subject to the limitations provided in this subsection, a claimant certified by the department of commerce under s. 560.186 may claim as a credit against the tax imposed under s. 71.43 an amount, not exceeding $400,000 in any taxable year, that is equal to the amount that the claimant paid in the taxable year to purchase and operate a distributed generation power generator.

AB752,7,22 (c) The total amount of the credit for all claimants under this subsection and ss. 71.07 (5d) and 71.28 (5d) may not exceed $2,000,000 in any taxable year. If the total amount of credits claimed by all claimants in any taxable exceeds $2,000,000, the department shall prorate the credit according to the amount of the purchase costs and operating costs of a distributed generation power generator that are incurred by all claimants during the taxable year.