LRB-2505/1
JK:kjf:ph
2013 - 2014 LEGISLATURE
August 23, 2013 - Introduced by Representatives Wright, Barca, Bewley,
Berceau, Milroy, Kahl, Kolste, Goyke, Ohnstad, Jorgensen, Sargent,
Bernard Schaber, Ringhand, Richards, Wachs and Hulsey, cosponsored by
Senators Lassa, C. Larson, Shilling and Erpenbach. Referred to Committee
on Jobs, Economy and Mining.
AB338,2,2 1An Act to renumber 238.15 (1) (a) to (L), 238.15 (1) (m) 1. (intro.), a. and b. and
2238.15 (1) (m) 2.; to renumber and amend 238.15 (1) (intro.), 238.15 (1) (m)
31. c., 238.15 (2) and 238.15 (3); to amend 71.07 (3q) (c), 71.07 (5b) (a) 2., 71.07
4(5b) (b), 71.07 (5b) (d) 1., 71.07 (5b) (d) 3., 71.07 (5d) (a) 1. (intro.), 71.07 (5d) (a)
52m., 71.07 (5d) (a) 3., 71.07 (5d) (b) (intro.), 71.07 (5d) (b) 2., 71.07 (5d) (c) 2.,
671.07 (5d) (d) 1., 71.07 (5d) (d) 2., 71.10 (4) (gwb), 71.10 (4) (gx), 71.10 (4) (i),
771.28 (3q) (c) 3., 71.28 (5b) (a) 2., 71.28 (5b) (b), 71.28 (5b) (d) 1., 71.28 (5b) (d)
83., 71.30 (3) (eop), 71.30 (3) (f), 71.47 (3q) (c) 3., 71.47 (5b) (a) 2., 71.47 (5b) (b),
971.47 (5b) (d) 1., 71.47 (5b) (d) 3., 71.49 (1) (eop), 71.49 (1) (f), 73.03 (63), 76.638
10(1), 76.638 (2), 238.16 (4) (c) and 238.303 (1) (a); and to create 20.835 (2) (ba),
1171.07 (5b) (d) 1m., 71.07 (5b) (d) 4., 71.07 (5d) (b) 3., 71.07 (5d) (d) 2m., 71.07 (5d)
12(d) 5., 71.28 (5b) (d) 1m., 71.28 (5b) (d) 4., 71.47 (5b) (d) 1m. and 71.47 (5b) (d)
134. of the statutes; relating to: allowing refunds for the early stage seed and

1angel investment tax credits and having the Department of Administration
2administer the credits and making an appropriation.
Analysis by the Legislative Reference Bureau
Under current law, a taxpayer may claim early stage seed and angel investment
income and franchise tax credits for the taxpayer's investments in qualified new
businesses. If the credit amounts exceed the taxpayer's tax liability, the taxpayer
does not receive a refund, but, instead, may apply the amount of the unused credits
to subsequent taxable years. Under this bill, if the credit amounts exceed the
taxpayer's tax liability, the taxpayer receives a refund. The bill also transfers the
administration of the early stage seed and angel investment credits from the
Wisconsin Economic Development Corporation to the Department of
Administration.
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:
AB338,1 3Section 1. 20.835 (2) (ba) of the statutes is created to read:
AB338,2,64 20.835 (2) (ba) Early stage seed and angel investment credits. A sum sufficient
5to make the payments under ss. 71.07 (5b) (d) 4. and (5d) (d) 5., 71.28 (5b) (d) 4., and
671.47 (5b) (d) 4.
AB338,2 7Section 2. 71.07 (3q) (c) of the statutes is amended to read:
AB338,2,128 71.07 (3q) (c) 3. The maximum amount of credits that may be awarded under
9this subsection and ss. 71.28 (3q) and 71.47 (3q) for the period beginning on January
101, 2010, and ending on June 30, 2013, is $14,500,000, not including the amount of
11any credits reallocated under s. 238.15 (3) (d) or s. 560.205 (3) (d), 2009 stats. 16.296
12(3) (d).
AB338,3 13Section 3. 71.07 (5b) (a) 2. of the statutes is amended to read:
AB338,2,1514 71.07 (5b) (a) 2. "Fund manager" means an investment fund manager certified
15under s. 238.15 (2) or s. 560.205 (2), 2009 stats. 16.296 (2).
AB338,4
1Section 4. 71.07 (5b) (b) of the statutes is amended to read:
AB338,3,82 71.07 (5b) (b) Filing claims. 1. For taxable years beginning after December
331, 2004, subject
Subject to the limitations provided under this subsection and s.
4238.15 or s. 560.205, 2009 stats.
16.296, and except as provided in subd. 2., a claimant
5may claim as a credit against the tax imposed under ss. 71.02 and 71.08, up to the
6amount of those taxes, 25 percent of the claimant's investment paid to a fund
7manager that the fund manager invests in a business certified under s. 238.15 (1) or
8s. 560.205 (1), 2009 stats.
16.296 (1).
AB338,3,179 2. In the case of a partnership, limited liability company, or tax-option
10corporation, the computation of the 25 percent limitation under subd. 1. shall be
11determined at the entity level rather than the claimant level and may be allocated
12among the claimants who make investments in the manner set forth in the entity's
13organizational documents. The entity shall provide to the department of revenue
14and to the department of commerce or the Wisconsin Economic Development
15Corporation
administration the names and tax identification numbers of the
16claimants, the amounts of the credits allocated to the claimants, and the
17computation of the allocations.
AB338,5 18Section 5. 71.07 (5b) (d) 1. of the statutes is amended to read:
AB338,3,2119 71.07 (5b) (d) 1. Section For taxable years beginning before January 1, 2013,
20s.
71.28 (4) (e) to (h), as it applies to the credit under s. 71.28 (4), applies to the credit
21under this subsection.
AB338,6 22Section 6. 71.07 (5b) (d) 1m. of the statutes is created to read:
AB338,3,2523 71.07 (5b) (d) 1m. For taxable years beginning after December 31, 2012, s.
2471.28 (4) (e), (g), and (h), as it applies to the credit under s. 71.28 (4), applies to the
25credit under this subsection.
AB338,7
1Section 7. 71.07 (5b) (d) 3. of the statutes is amended to read:
AB338,4,72 71.07 (5b) (d) 3. Except as provided under s. 238.15 (3) (d) (intro.) 16.296 (3)
3(d) (intro.)
, for investments made after December 31, 2007, if an investment for which
4a claimant claims a credit under par. (b) is held by the claimant for less than 3 years,
5the claimant shall pay to the department, in the manner prescribed by the
6department, the amount of the credit that the claimant received related to the
7investment.
AB338,8 8Section 8. 71.07 (5b) (d) 4. of the statutes is created to read:
AB338,4,149 71.07 (5b) (d) 4. For taxable years beginning after December 31, 2012, if the
10allowable amount of the claim under par. (b) exceeds the tax otherwise due under s.
1171.02 or 71.08, the amount of the claim not used to offset the tax due shall be certified
12by the department of revenue to the department of administration for payment by
13check, share draft, or other draft drawn from the appropriation account under s.
1420.835 (2) (ba).
AB338,9 15Section 9. 71.07 (5d) (a) 1. (intro.) of the statutes is amended to read:
AB338,4,1816 71.07 (5d) (a) 1. (intro.) "Bona fide angel investment" means a purchase of an
17equity interest, or any other expenditure, as determined by rule under s. 238.15 or
18s. 560.205, 2009 stats.
16.296, that is made by any of the following:
AB338,10 19Section 10. 71.07 (5d) (a) 2m. of the statutes is amended to read:
AB338,4,2320 71.07 (5d) (a) 2m. "Person" means a partnership or limited liability company
21that is a nonoperating entity, as determined by the department of commerce or the
22Wisconsin Economic Development Corporation
administration, a natural person, or
23fiduciary.
AB338,11 24Section 11. 71.07 (5d) (a) 3. of the statutes is amended to read:
AB338,5,2
171.07 (5d) (a) 3. "Qualified new business venture" means a business that is
2certified under s. 238.15 (1) or s. 560.205 (1), 2009 stats. 16.296 (1).
AB338,12 3Section 12. 71.07 (5d) (b) (intro.) of the statutes is amended to read:
AB338,5,74 71.07 (5d) (b) (intro.) Filing claims. Subject to the limitations provided in this
5subsection and in s. 238.15 or s. 560.205, 2009 stats. 16.296, a claimant may claim
6as a credit against the tax imposed under s. 71.02 or 71.08, up to the amount of those
7taxes, the following:
AB338,13 8Section 13. 71.07 (5d) (b) 2. of the statutes is amended to read:
AB338,5,139 71.07 (5d) (b) 2. For taxable years beginning after December 31, 2007, and
10before January 1, 2013,
for the taxable year certified by the department of commerce
11or the Wisconsin Economic Development Corporation, an amount equal to 25 percent
12of the claimant's bona fide angel investment made directly in a qualified new
13business venture.
AB338,14 14Section 14. 71.07 (5d) (b) 3. of the statutes is created to read:
AB338,5,1815 71.07 (5d) (b) 3. For taxable years beginning after December 31, 2012, for the
16taxable year certified by the department of administration, an amount equal to 25
17percent of the claimant's bona fide angel investment made directly in a qualified new
18business venture.
AB338,15 19Section 15. 71.07 (5d) (c) 2. of the statutes is amended to read:
AB338,5,2320 71.07 (5d) (c) 2. For taxable years beginning before January 1, 2008, the
21maximum amount of a claimant's investment that may be used as the basis for a
22credit under this subsection is $2,000,000 for each investment made directly in a
23business certified under s. 238.15 (1), 2011 stats. or s. 560.205 (1), 2009 stats.
AB338,16 24Section 16. 71.07 (5d) (d) 1. of the statutes is amended to read:
AB338,6,6
171.07 (5d) (d) 1. Except as provided under s. 238.15 (3) (d) (intro.) 16.296 (3)
2(d) (intro.)
, for investments made after December 31, 2007, if an investment for which
3a claimant claims a credit under par. (b) is held by the claimant for less than 3 years,
4the claimant shall pay to the department, in the manner prescribed by the
5department, the amount of the credit that the claimant received related to the
6investment.
AB338,17 7Section 17. 71.07 (5d) (d) 2. of the statutes is amended to read:
AB338,6,108 71.07 (5d) (d) 2. Section For taxable years beginning before January 1, 2013,
9s.
71.28 (4) (e) to (h), as it applies to the credit under s. 71.28 (4), applies to the credit
10under this subsection.
AB338,18 11Section 18. 71.07 (5d) (d) 2m. of the statutes is created to read:
AB338,6,1412 71.07 (5d) (d) 2m. For taxable years beginning after December 31, 2012, s.
1371.28 (4) (e), (g), and (h), as it applies to the credit under s. 71.28 (4), applies to the
14credit under this subsection.
AB338,19 15Section 19. 71.07 (5d) (d) 5. of the statutes is created to read:
AB338,6,2116 71.07 (5d) (d) 5. For taxable years beginning after December 31, 2012, if the
17allowable amount of the claim under par. (b) exceeds the tax otherwise due under s.
1871.02 or 71.08, the amount of the claim not used to offset the tax due shall be certified
19by the department of revenue to the department of administration for payment by
20check, share draft, or other draft drawn from the appropriation account under s.
2120.835 (2) (ba).
AB338,20 22Section 20. 71.10 (4) (gwb) of the statutes is amended to read:
AB338,6,2423 71.10 (4) (gwb) Early stage seed investment credit under s. 71.07 (5b), except
24as provided under par. (i)
.
AB338,21 25Section 21. 71.10 (4) (gx) of the statutes is amended to read:
AB338,7,2
171.10 (4) (gx) Angel investment credit under s. 71.07 (5d), except as provided
2under par. (i)
.
AB338,22 3Section 22. 71.10 (4) (i) of the statutes is amended to read:
AB338,7,174 71.10 (4) (i) The total of claim of right credit under s. 71.07 (1), farmland
5preservation credit under ss. 71.57 to 71.61, farmland preservation credit, 2010 and
6beyond under s. 71.613, homestead credit under subch. VIII, farmland tax relief
7credit under s. 71.07 (3m), dairy manufacturing facility investment credit under s.
871.07 (3p), jobs tax credit under s. 71.07 (3q), meat processing facility investment
9credit under s. 71.07 (3r), woody biomass harvesting and processing credit under s.
1071.07 (3rm), food processing plant and food warehouse investment credit under s.
1171.07 (3rn), early stage seed investment credit under s. 71.07 (5b) (d) 4., angel
12investment credit under s. 71.07 (5d) (d) 5.,
film production services credit under s.
1371.07 (5f), film production company investment credit under s. 71.07 (5h), veterans
14and surviving spouses property tax credit under s. 71.07 (6e), enterprise zone jobs
15credit under s. 71.07 (3w), beginning farmer and farm asset owner tax credit under
16s. 71.07 (8r), earned income tax credit under s. 71.07 (9e), estimated tax payments
17under s. 71.09, and taxes withheld under subch. X.
AB338,23 18Section 23. 71.28 (3q) (c) 3. of the statutes is amended to read:
AB338,7,2319 71.28 (3q) (c) 3. The maximum amount of credits that may be awarded under
20this subsection and ss. 71.07 (3q) and 71.47 (3q) for the period beginning on January
211, 2010, and ending on June 30, 2013, is $14,500,000, not including the amount of
22any credits reallocated under s. 238.15 (3) (d) or s. 560.205 (3) (d), 2009 stats. 16.296
23(3) (d).
AB338,24 24Section 24. 71.28 (5b) (a) 2. of the statutes is amended to read:
AB338,8,2
171.28 (5b) (a) 2. "Fund manager" means an investment fund manager certified
2under s. 238.15 (2) or s. 560.205 (2), 2009 stats. 16.296 (2).
AB338,25 3Section 25. 71.28 (5b) (b) of the statutes is amended to read:
AB338,8,104 71.28 (5b) (b) Filing claims. 1. For taxable years beginning after December
531, 2004, subject
Subject to the limitations provided under this subsection and s.
6238.15 or s. 560.205, 2009 stats. 16.296, and except as provided in subd. 2., a claimant
7may claim as a credit against the tax imposed under s. 71.23, up to the amount of
8those taxes, 25 percent of the claimant's investment paid to a fund manager that the
9fund manager invests in a business certified under s. 238.15 (1) or s. 560.205 (1), 2009
10stats.
16.296 (1).
AB338,8,1911 2. In the case of a partnership, limited liability company, or tax-option
12corporation, the computation of the 25 percent limitation under subd. 1. shall be
13determined at the entity level rather than the claimant level and may be allocated
14among the claimants who make investments in the manner set forth in the entity's
15organizational documents. The entity shall provide to the department of revenue
16and to the department of commerce or the Wisconsin Economic Development
17Corporation
administration the names and tax identification numbers of the
18claimants, the amounts of the credits allocated to the claimants, and the
19computation of the allocations.
AB338,26 20Section 26. 71.28 (5b) (d) 1. of the statutes is amended to read:
AB338,8,2321 71.28 (5b) (d) 1. Subsection For taxable years beginning before January 1,
222013, sub.
(4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit
23under this subsection.
AB338,27 24Section 27. 71.28 (5b) (d) 1m. of the statutes is created to read:
AB338,9,3
171.28 (5b) (d) 1m. For taxable years beginning after December 31, 2012, sub.
2(4) (e), (g), and (h), as it applies to the credit under sub. (4), applies to the credit under
3this subsection.
AB338,28 4Section 28. 71.28 (5b) (d) 3. of the statutes is amended to read:
AB338,9,105 71.28 (5b) (d) 3. Except as provided under s. 238.15 (3) (d) (intro.) 16.296 (3)
6(d) (intro.)
, for investments made after December 31, 2007, if an investment for which
7a claimant claims a credit under par. (b) is held by the claimant for less than 3 years,
8the claimant shall pay to the department, in the manner prescribed by the
9department, the amount of the credit that the claimant received related to the
10investment.
AB338,29 11Section 29. 71.28 (5b) (d) 4. of the statutes is created to read:
AB338,9,1712 71.28 (5b) (d) 4. For taxable years beginning after December 31, 2012, if the
13allowable amount of the claim under par. (b) exceeds the tax otherwise due under s.
1471.23, the amount of the claim not used to offset the tax due shall be certified by the
15department of revenue to the department of administration for payment by check,
16share draft, or other draft drawn from the appropriation account under s. 20.835 (2)
17(ba).
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