SB120: Bill Text

Analysis by the Legislative Reference Bureau

Under this bill, the Department of Commerce (Commerce) may certify a person who makes a qualified investment in a registered community development financial institution (CDFI) to receive a credit against state income and franchise taxes and against license fees paid by insurers. The bill defines a CDFI as an entity that is organized under the laws of this state and has been certified by the Community Development Financial Institutions Fund established under federal law (fund) as meeting certain eligibility requirements. The bill permits Commerce to register a CDFI that applies to Commerce and complies with annual reporting requirements. The bill defines a "qualified investment" as a loan or deposit that pays no interest of at least $10,000 that is made for a minimum of 60 months and over which the CDFI retains complete control for the duration of the investment period.

Commerce may revoke the registration of a CDFI that fails to comply with annual reporting requirements or that no longer meets the eligibility requirement for certification by the fund. Commerce may certify up to $500,000 in tax credits in any calendar year.

A person certified to receive tax credits may claim 10 percent of the person's qualified investment, if the investment is at least $10,000, but not more than $150,000, or 12 percent of the person's qualified investment, if the investment is more than $150,000, but not more than $500,000. If the person withdraws the qualified investment from the CDFI before the end of the investment period and does not reinvest the qualified investment in another CDFI, the person must repay a portion of the credit amounts that the person received by adding the portion to the person's tax or fee liability in a subsequent year. However, the portion that the person must repay depends on when the person withdraws the investment during the investment period. The portion that the person must repay decreases the longer the person holds the investment during the investment period.

Under current law, the maximum amount of dairy manufacturing facility investment credits that may be claimed by all taxpayers, other than members of dairy cooperatives, in a fiscal year is $700,000 and the maximum amount of dairy manufacturing facility investment credits that may be claimed by members of dairy cooperatives in a fiscal year is $700,000.

Under the bill, the maximum amount of dairy manufacturing facility investment credits that may be claimed by all taxpayers, other than members of dairy cooperatives, in a fiscal year is $1,000,000 and the maximum amount of dairy manufacturing facility investment credits that may be claimed by members of dairy cooperatives in a fiscal year is $1,000,000.

Under current law, the maximum amount of meat processing facility investment credits that may be claimed by all taxpayers in a fiscal year is $700,000. The bill increases the maximum amount of meat processing facility investment credits that may be claimed by all taxpayers in a fiscal year to $1,200,000.

Under current law, for fiscal year beginning on July 1, 2010, the maximum amount of food processing plant and food warehouse investment credits that may be claimed by all taxpayers is $1,200,000. Beginning with fiscal year 2011-12, and in each subsequent fiscal year, the maximum amount of food processing plant and food warehouse investment credits that may be claimed by all taxpayers is $700,000. Under the bill, the maximum amount of food processing plant and food warehouse investment credits that may be claimed by all taxpayers in a fiscal year is $1,200,000.

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:

SB120, s. 1 Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:

SB120,3,7 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (5e), (5f), (5h), (5i), (5j), (5k), (5p), (5r), (5rm), and (8r) 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 (1k) (g).

SB120, s. 2 Section 2. 71.07 (3p) (c) 2m. b. of the statutes is amended to read:

SB120,3,14 71.07 (3p) (c) 2m. b. The maximum amount of the credits that may be claimed by all claimants, other than members of dairy cooperatives, under this subsection and ss. 71.28 (3p) and 71.47 (3p), as allocated under s. 560.207, is $700,000 in fiscal year 2008-09, $700,000 in fiscal year 2009-10, $700,000 in fiscal year 2010-11, and $1,000,000 in fiscal year 2011-12 and in each fiscal year thereafter , is $700,000, as allocated under s. 560.207.

SB120, s. 3 Section 3. 71.07 (3p) (c) 2m. bm. of the statutes is amended to read:

SB120,4,7 71.07 (3p) (c) 2m. bm. The maximum amount of the credits that may be claimed by members of dairy cooperatives under this subsection and ss. 71.28 (3p) and 71.47 (3p), as allocated under s. 560.207, is $600,000 in fiscal year 2009-10 is $600,000, as allocated under s. 560.207, and the maximum amount of the credits that may be claimed by members of dairy cooperatives under this subsection and ss. 71.28 (3p) and 71.47 (3p), $700,000 in fiscal year 2010-11, and $1,000,000 in fiscal year 2011-12 and in each fiscal year thereafter, is $700,000, as allocated under s. 560.207.

SB120, s. 4 Section 4. 71.07 (3r) (c) 3. b. of the statutes is amended to read:

SB120,4,11 71.07 (3r) (c) 3. b. The maximum amount of the credits that may be allocated under this subsection and ss. 71.28 (3r) and 71.47 (3r) in fiscal year 2010-11, and in each fiscal year thereafter, is $700,000, as allocated under s. 560.208.

SB120, s. 5 Section 5. 71.07 (3r) (c) 3. bm. of the statutes is created to read:

SB120,4,15 71.07 (3r) (c) 3. bm. The maximum amount of the credits that may be allocated under this subsection and ss. 71.28 (3r) and 71.47 (3r) in fiscal year 2011-12, and in each fiscal year thereafter, is $1,200,000, as allocated under s. 560.208.

SB120, s. 6 Section 6. 71.07 (3rn) (c) 3. b. of the statutes is amended to read:

SB120,4,19 71.07 (3rn) (c) 3. b. The maximum amount of the credits that may be allocated under this subsection and ss. 71.28 (3rn) and 71.47 (3rn) in fiscal year 2010-11, and in each fiscal year thereafter, is $1,200,000, as allocated under s. 560.2056.

SB120, s. 7 Section 7. 71.07 (3rn) (c) 3. c. of the statutes is repealed.

SB120, s. 8 Section 8. 71.07 (5p) of the statutes is created to read:

SB120,4,24 71.07 (5p) Community development financial institution credit. (a) Definition. In this subsection, "claimant" means a person who files a claim under this subsection.

SB120,5,9 (b) Filing claims. Subject to the limitations provided under this subsection and the requirements under s. 560.295, for taxable years beginning after December 31, 2010, and before January 1, 2013, a claimant may claim as a credit against the tax imposed under s. 71.02, up to the amount of the tax, for the taxable year in which the investment is made, an amount equal to 10 percent of the claimant's qualified investment in a community development financial institution, if the investment is at least $10,000, but not more than $150,000, or 12 percent of the claimant's qualified investment in a community development financial institution, if the investment is more than $150,000, but not more than $500,000.

SB120,5,17 (c) Limitations. 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 interests.

SB120,5,19 (d) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

SB120, s. 9 Section 9. 71.10 (4) (cr) of the statutes is created to read:

SB120,5,22 71.10 (4) (cr) Community development financial institution credit under s. 71.07 (5p).

SB120, s. 10 Section 10. 71.21 (4) of the statutes is amended to read:

SB120,6,2 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5p), (5r), (5rm), and (8r) and passed through to partners shall be added to the partnership's income.

SB120, s. 11 Section 11. 71.26 (2) (a) 4. of the statutes, as affected by 2011 Wisconsin Act 3, is amended to read:

SB120,6,11 71.26 (2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (1dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5p), (5r), (5rm), (8r), and (9s) 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 (1k) (g).

SB120, s. 12 Section 12. 71.28 (3p) (c) 2m. b. of the statutes is amended to read:

SB120,6,18 71.28 (3p) (c) 2m. b. The maximum amount of the credits that may be claimed by all claimants, other than members of dairy cooperatives, under this subsection and ss. 71.07 (3p) and 71.47 (3p), as allocated under s. 560.207, is $700,000 in fiscal year 2008-09, $700,000 in fiscal year 2009-10, $700,000 in fiscal year 2010-11, and $1,000,000 in fiscal year 2011-12 and in each fiscal year thereafter , is $700,000, as allocated under s. 560.207.

SB120, s. 13 Section 13. 71.28 (3p) (c) 2m. bm. of the statutes is amended to read:

SB120,7,2 71.28 (3p) (c) 2m. bm. The maximum amount of the credits that may be claimed by members of dairy cooperatives under this subsection and ss. 71.07 (3p) and 71.47 (3p), as allocated under s. 560.207, is $600,000 in fiscal year 2009-10 is $600,000, as allocated under s. 560.207, and the maximum amount of the credits that may be claimed by members of dairy cooperatives under this subsection and ss. 71.07 (3p) and 71.47 (3p), $700,000 in fiscal year 2010-11, and $1,000,000 in fiscal year 2011-12 and in each fiscal year thereafter, is $700,000, as allocated under s. 560.207.

SB120, s. 14 Section 14. 71.28 (3r) (c) 3. b. of the statutes is amended to read:

SB120,7,6 71.28 (3r) (c) 3. b. The maximum amount of the credits that may be allocated under this subsection and ss. 71.07 (3r) and 71.47 (3r) in fiscal year 2010-11, and in each fiscal year thereafter, is $700,000, as allocated under s. 560.208.

SB120, s. 15 Section 15. 71.28 (3r) (c) 3. bm. of the statutes is created to read:

SB120,7,10 71.28 (3r) (c) 3. bm. The maximum amount of the credits that may be allocated under this subsection and ss. 71.07 (3r) and 71.47 (3r) in fiscal year 2011-12, and in each fiscal year thereafter, is $1,200,000, as allocated under s. 560.208.

SB120, s. 16 Section 16. 71.28 (3rn) (c) 3. b. of the statutes is amended to read:

SB120,7,14 71.28 (3rn) (c) 3. b. The maximum amount of the credits that may be allocated under this subsection and ss. 71.07 (3rn) and 71.47 (3rn) in fiscal year 2010-11, and in each fiscal year thereafter, is $1,200,000, as allocated under s. 560.2056.

SB120, s. 17 Section 17. 71.28 (3rn) (c) 3. c. of the statutes is repealed.

SB120, s. 18 Section 18. 71.28 (5p) of the statutes is created to read:

SB120,7,19 71.28 (5p) Community development financial institution credit. (a) Definition. In this subsection, "claimant" means a person who files a claim under this subsection.

SB120,8,3 (b) Filing claims. Subject to the limitations provided under this subsection and the requirements under s. 560.295, for taxable years beginning after December 31, 2010, and before January 1, 2013, a claimant may claim as a credit against the tax imposed under s. 71.23, up to the amount of the tax, for the taxable year in which the investment is made, an amount equal to 10 percent of the claimant's qualified investment in a community development financial institution, if the investment is at least $10,000, but not more than $150,000, or 12 percent of the claimant's qualified investment in a community development financial institution, if the investment is more than $150,000, but not more than $500,000.

SB120,8,11 (c) Limitations. 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 interests.

SB120,8,13 (d) Administration. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

SB120, s. 19 Section 19. 71.30 (3) (cr) of the statutes is created to read:

SB120,8,16 71.30 (3) (cr) Community development financial institution credit under s. 71.28 (5p).

SB120, s. 20 Section 20. 71.34 (1k) (g) of the statutes is amended to read:

SB120,8,21 71.34 (1k) (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), (1dy), (3), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5p), (5r), (5rm), and (8r) and passed through to shareholders.

SB120, s. 21 Section 21. 71.45 (2) (a) 10. of the statutes, as affected by 2011 Wisconsin Act 3, is amended to read:

SB120,9,5 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit computed under s. 71.47 (1dd) to (1dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5p), (5r), (5rm), (8r), and (9s) 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 (1k) (g) and the amount of credit computed under s. 71.47 (1), (3), (3t), (4), (4m), and (5).

SB120, s. 22 Section 22. 71.47 (3p) (c) 2m. b. of the statutes is amended to read:

SB120,9,12 71.47 (3p) (c) 2m. b. The maximum amount of the credits that may be claimed by all claimants, other than members of dairy cooperatives, under this subsection and ss. 71.07 (3p) and 71.28 (3p), as allocated under s. 560.207, is $700,000 in fiscal year 2008-09, $700,000 in fiscal year 2009-10, $700,000 in fiscal year 2010-11, and $1,000,000 in fiscal year 2011-12 and in each fiscal year thereafter , is $700,000, as allocated under s. 560.207.

SB120, s. 23 Section 23. 71.47 (3p) (c) 2m. bm. of the statutes is amended to read:

SB120,9,20 71.47 (3p) (c) 2m. bm. The maximum amount of the credits that may be claimed by members of dairy cooperatives under this subsection and ss. 71.07 (3p) and 71.28 (3p), as allocated under s. 560.207, is $600,000 in fiscal year 2009-10 is $600,000, as allocated under s. 560.207, and the maximum amount of the credits that may be claimed by members of dairy cooperatives under this subsection and ss. 71.07 (3p) and 71.28 (3p), $700,000 in fiscal year 2010-11, and $1,000,000 in fiscal year 2011-12 and in each fiscal year thereafter, is $700,000, as allocated under s. 560.207.

SB120, s. 24 Section 24. 71.47 (3r) (c) 3. b. of the statutes is amended to read:

SB120,9,24 71.47 (3r) (c) 3. b. The maximum amount of the credits that may be allocated under this subsection and ss. 71.07 (3r) and 71.28 (3r) in fiscal year 2010-11, and in each fiscal year thereafter, is $700,000, as allocated under s. 560.208.

SB120, s. 25 Section 25. 71.47 (3r) (c) 3. bm. of the statutes is created to read:

SB120,10,3 71.47 (3r) (c) 3. bm. The maximum amount of the credits that may be allocated under this subsection and ss. 71.07 (3r) and 71.28 (3r) in fiscal year 2011-12, and in each fiscal year thereafter, is $1,200,000 as allocated under s. 560.208.

SB120, s. 26 Section 26. 71.47 (3rn) (c) 3. b. of the statutes is amended to read:

SB120,10,7 71.47 (3rn) (c) 3. b. The maximum amount of the credits that may be allocated under this subsection and ss. 71.07 (3rn) and 71.28 (3rn) in fiscal year 2010-11, and in each fiscal year thereafter, is $1,200,000, as allocated under s. 560.2056.

SB120, s. 27 Section 27. 71.47 (3rn) (c) 3. c. of the statutes is repealed.

SB120, s. 28 Section 28. 71.47 (5p) of the statutes is created to read:

SB120,10,12 71.47 (5p) Community development financial institution credit. (a) Definition. In this subsection, "claimant" means a person who files a claim under this subsection.

SB120,10,21 (b) Filing claims. Subject to the limitations provided under this subsection and the requirements under s. 560.295, for taxable years beginning after December 31, 2010, and before January 1, 2013, a claimant may claim as a credit against the tax imposed under s. 71.43, up to the amount of the tax, for the taxable year in which the investment is made, an amount equal to 10 percent of the claimant's qualified investment in a community development financial institution, if the investment is at least $10,000, but not more than $150,000, or 12 percent of the claimant's qualified investment in a community development financial institution, if the investment is more than $150,000, but not more than $500,000.

SB120,11,4 (c) Limitations. 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 interests.

SB120,11,6 (d) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

SB120, s. 29 Section 29. 71.49 (1) (cr) of the statutes is created to read:

SB120,11,9 71.49 (1) (cr) Community development financial institution credit under s. 71.47 (5p).

SB120, s. 30 Section 30. 76.634 of the statutes is created to read:

SB120,11,20 76.634 Community development financial institution credit. (1) Filing claims. Subject to the limitations provided under this subsection and the requirements under s. 560.295, for taxable years beginning after December 31, 2010, and before January 1, 2013, an insurer may claim as a credit against the fees due under s. 76.60, 76.63, 76.65, 76.66, or 76.67 for the taxable year in which the investment is made, an amount equal to 10 percent of the insurer's qualified investment in a community development financial institution, if the investment is at least $10,000, but not more than $150,000, or 12 percent of the insurer's qualified investment in a community development financial institution, if the investment is more than $150,000, but not more than $500,000.

SB120,12,2 (2) Carry-forward. If the credit under sub. (1) is not entirely offset against the fees under s. 76.60, 76.63, 76.65, 76.66, or 76.67 otherwise due, the unused balance may be carried forward and credited against those fees for the following 15 years to the extent that it is not offset by those fees otherwise due in all the years between the year in which the expense was made and the year in which the carry-forward credit is claimed.

SB120,12,5 (3) Limitations. No credit may be allowed under this section unless the insurer includes with the insurer's annual return under s. 76.64 a copy of the insurer's certification for tax benefits under s. 560.295 (5) (b).

SB120, s. 31 Section 31. 76.67 (2) of the statutes is amended to read:

SB120,12,16 76.67 (2) If any domestic insurer is licensed to transact insurance business in another state, this state may not require similar insurers domiciled in that other state to pay taxes greater in the aggregate than the aggregate amount of taxes that a domestic insurer is required to pay to that other state for the same year less the credits under ss. 76.634, 76.635, 76.636, 76.637, 76.638, and 76.655, except that the amount imposed shall not be less than the total of the amounts due under ss. 76.65 (2) and 601.93 and, if the insurer is subject to s. 76.60, 0.375% of its gross premiums, as calculated under s. 76.62, less offsets allowed under s. 646.51 (7) or under ss. 76.634, 76.635, 76.636, 76.637, 76.638, and 76.655 against that total, and except that the amount imposed shall not be less than the amount due under s. 601.93.

SB120, s. 32 Section 32. 77.92 (4) of the statutes is amended to read:

SB120,13,8 77.92 (4) "Net business income," with respect to a partnership, means taxable income as calculated under section 703 of the Internal Revenue Code; plus the items of income and gain under section 702 of the Internal Revenue Code, including taxable state and municipal bond interest and excluding nontaxable interest income or dividend income from federal government obligations; minus the items of loss and deduction under section 702 of the Internal Revenue Code, except items that are not deductible under s. 71.21; plus guaranteed payments to partners under section 707 (c) of the Internal Revenue Code; plus the credits claimed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5p), (5r), (5rm), and (8r); and plus or minus, as appropriate, transitional adjustments, depreciation differences, and basis differences under s. 71.05 (13), (15), (16), (17), and (19); but excluding income, gain, loss, and deductions from farming. "Net business income," with respect to a natural person, estate, or trust, means profit from a trade or business for federal income tax purposes and includes net income derived as an employee as defined in section 3121 (d) (3) of the Internal Revenue Code.

SB120, s. 33 Section 33. 560.2056 (2) of the statutes is amended to read:

SB120,13,17 560.2056 (2) If the department of commerce certifies a taxpayer under sub. (1), the department of commerce shall determine the amount of credits to allocate to that taxpayer. The total amount of food processing plant and food warehouse investment credits allocated to taxpayers in any fiscal year 2009-10 may not exceed $600,000 and the total amount of food processing plant and food warehouse investment credits allocated to taxpayers in fiscal year 2010-11, and in each fiscal year thereafter, may not exceed $700,000 the amounts provided under ss. 71.07 (3rn) (c) 3., 71.28 (3rn) (c) 3., and 71.47 (3rn) (c) 3.

SB120, s. 34 Section 34. 560.207 (2) of the statutes is amended to read:

SB120,14,6 560.207 (2) If the department of commerce certifies a taxpayer under sub. (1), the department of commerce shall determine the amount of credits to allocate to that taxpayer. The total amount of dairy manufacturing facility investment credits allocated to taxpayers in any fiscal year 2007-08 may not exceed $600,000 and the total amount of dairy manufacturing facility investment credits allocated to taxpayers who are not members of dairy cooperatives in fiscal year 2008-09, and in each fiscal year thereafter, may not exceed $700,000. The total amount of dairy manufacturing facility investment credits allocated to taxpayers who are members of dairy cooperatives in fiscal year 2009-10 may not exceed $600,000 and the total amount of dairy manufacturing facility investment credits allocated to taxpayers who are members of dairy cooperatives in fiscal year 2010-11, and in each fiscal year thereafter, may not exceed $700,000 the amounts provided under ss. 71.07 (3p) (c) 2m., 71.28 (3p) (c) 2m., and 71.47 (3p) (c) 2m.

SB120, s. 35 Section 35. 560.208 (2) of the statutes is amended to read:

SB120,14,14 560.208 (2) If the department of commerce certifies a taxpayer under sub. (1), the department of commerce shall determine the amount of credits to allocate to that taxpayer. The total amount of meat processing facility investment credits allocated to taxpayers in any fiscal year 2009-10 may not exceed $300,000 and the total amount of meat processing facility investment credits allocated to taxpayers in fiscal year 2010-11, and in each fiscal year thereafter, may not exceed $700,000 the amounts provided under ss. 71.07 (3r) (c) 3., 71.28 (3r) (c) 3., and 71.47 (3r) (c) 3.