LRB-4605/1
JK:amn
2015 - 2016 LEGISLATURE
February 12, 2016 - Introduced by Representatives Shankland, Barca, Genrich,
Zepnick, Subeck, Berceau, Considine, Ohnstad and Danou, cosponsored by
Senators Lassa, Erpenbach and Harris Dodd. Referred to Committee on
Ways and Means.
AB911,1,5 1An Act to amend 71.05 (6) (a) 15., 71.21 (4) (a), 71.26 (2) (a) 4., 71.34 (1k) (g),
271.45 (2) (a) 10. and 76.67 (2); and to create 71.07 (5p), 71.10 (4) (cs), 71.28 (5p),
371.30 (3) (dr), 71.47 (5p), 71.49 (1) (dr) and 76.634 of the statutes; relating to:
4an income and franchise tax credit for investments in a community
5development financial institution.
Analysis by the Legislative Reference Bureau
Under this bill, a person who makes a qualified investment in a registered
community development financial institution (CDFI) may receive a credit against
state income and franchise taxes, for taxable years beginning after December 31,
2014, and before January 1, 2017, 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 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.
A person 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.
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:
AB911,1 1Section 1. 71.05 (6) (a) 15. of the statutes, as affected by 2015 Wisconsin Act
255
, is amended to read:
AB911,2,83 71.05 (6) (a) 15. Except as provided under s. 71.07 (3p) (c) 5., the amount of the
4credits computed under s. 71.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r),
5(3rm), (3rn), (3s), (3t), (3w), (3y), (4k), (4n), (5e), (5f), (5h), (5i), (5j), (5k), (5p), (5r),
6(5rm), (6n), and (8r) and not passed through by a partnership, limited liability
7company, or tax-option corporation that has added that amount to the partnership's,
8company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1k) (g).
AB911,2 9Section 2. 71.07 (5p) of the statutes is created to read:
AB911,2,1110 71.07 (5p) Steve Hilgenberg community development credit. (a) Definitions.
11In this subsection:
AB911,2,1212 1. "Claimant" means a person who files a claim under this subsection.
AB911,2,1413 2. "Community development financial institution" means an entity that
14satisfies all of the following:
AB911,2,1715a. The entity is certified by the fund under 12 CFR 1805.201 as meeting the
16eligibility requirements for a community development financial institution under 12
17CFR 1805.200
and 1805.201 (b).
AB911,2,1818 b. The entity is organized under the laws of this state.
AB911,3,1
1c. The entity uses qualified investments for projects that are based in this state.
AB911,3,32 3. "Fund" means the Community Development Financial Institutions Fund
3established under 12 USC 4703 (a).
AB911,3,64 4. a. Subject to subd. 4. b., "qualified investment" means a deposit or loan that
5pays no interest to the person who made the deposit or loan if the deposit or loan has
6a value of at least $10,000 and is made for a period of at least 60 months.
AB911,3,137 b. A community development financial institution that receives an investment
8described under subd. 4. a. shall have complete control over the entire investment
9amount, including any interest earned on the investment, for the duration of the
10investment period, but the investment may be subject to any additional terms and
11conditions of the investment agreement between the community development
12financial institution and the investor that are not inconsistent with the
13requirements of this section.
AB911,3,2114 (b) Filing claims. For taxable years beginning after December 31, 2014, and
15before January 1, 2017, a claimant may claim as a credit against the tax imposed
16under s. 71.02, up to the amount of the tax, for the taxable year in which the
17investment is made, an amount equal to 10 percent of the claimant's qualified
18investment in a community development financial institution, if the investment is
19at least $10,000, but not more than $150,000, or 12 percent of the claimant's qualified
20investment in a community development financial institution, if the investment is
21more than $150,000, but not more than $500,000.
AB911,4,422 (c) Limitations. 1. Partnerships, limited liability companies, and tax-option
23corporations may not claim the credit under this subsection, but the eligibility for,
24and the amount of, the credit are based on their payment of amounts under par. (b).
25A partnership, limited liability company, or tax-option corporation shall compute

1the amount of credit that each of its partners, members, or shareholders may claim
2and shall provide that information to each of them. Partners, members of limited
3liability companies, and shareholders of tax-option corporations may claim the
4credit in proportion to their ownership interests.
AB911,4,135 2. A person who makes an investment in a community development financial
6institution in a taxable year, withdraws the investment in that taxable year, and
7immediately reinvests the proceeds into another community development financial
8institution may claim only one credit under this subsection for that taxable year,
9based on the lesser of all such investments in that taxable year. Investments in a
10community development financial institution made before the effective date of this
11subdivision .... [LRB inserts date], may not be withdrawn prior to the end of their
12contractual term and reinvested in a community development financial institution
13in order to claim a credit under this subsection.
AB911,4,2014 3. A claimant who withdraws a qualified investment from a community
15development financial institution prior to the first day of the 61st month after the
16qualified investment was made and who does not immediately reinvest the proceeds
17of the qualified investment as a qualified investment in another community
18development financial institution shall add to the claimant's liability for taxes
19imposed under s. 71.02 one of the following percentages of the amount of the credits
20received under this subsection:
AB911,4,2221 a. If the withdrawal occurs during the first year after the date on which the
22claimant made the qualified investment, 100 percent.
AB911,4,2423 b. If the withdrawal occurs during the 2nd year after the date on which the
24claimant made the qualified investment, 75 percent.
AB911,5,2
1c. If the withdrawal occurs during the 3rd year after the date on which the
2claimant made the qualified investment, 50 percent.
AB911,5,43 d. If the withdrawal occurs during the 4th year after the date on which the
4claimant made the qualified investment, 25 percent.
AB911,5,65 e. If the withdrawal occurs during the 5th year after the date on which the
6claimant made the qualified investment, 10 percent.
AB911,5,87 (d) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
8s. 71.28 (4), applies to the credit under this subsection.
AB911,3 9Section 3. 71.10 (4) (cs) of the statutes is created to read:
AB911,5,1110 71.10 (4) (cs) Steve Hilgenberg community development credit under s. 71.07
11(5p).
AB911,4 12Section 4. 71.21 (4) (a) of the statutes, as affected by 2015 Wisconsin Act 55,
13is amended to read:
AB911,5,1714 71.21 (4) (a) The amount of the credits computed by a partnership under s.
1571.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w),
16(3y), (4k), (4n), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5p), (5r), (5rm), (6n), and (8r) and
17passed through to partners shall be added to the partnership's income.
AB911,5 18Section 5. 71.26 (2) (a) 4. of the statutes, as affected by 2015 Wisconsin Act 55,
19is amended to read:
AB911,5,2520 71.26 (2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dm),
21(1dx), (1dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3t), (3w), (5e), (5f), (5g), (5h),
22(5i), (5j), (5k), (5r), (5p), (5rm), (6n), (8r), and (9s) and not passed through by a
23partnership, limited liability company, or tax-option corporation that has added that
24amount to the partnership's, limited liability company's, or tax-option corporation's
25income under s. 71.21 (4) or 71.34 (1k) (g).
AB911,6
1Section 6. 71.28 (5p) of the statutes is created to read:
AB911,6,32 71.28 (5p) Steve Hilgenberg community development credit. (a) Definitions.
3In this subsection:
AB911,6,44 1. "Claimant" means a person who files a claim under this subsection.
AB911,6,65 2. "Community development financial institution" means an entity that
6satisfies all of the following:
AB911,6,97a. The entity is certified by the fund under 12 CFR 1805.201 as meeting the
8eligibility requirements for a community development financial institution under 12
9CFR 1805.200
and 1805.201 (b).
AB911,6,1010 b. The entity is organized under the laws of this state.
AB911,6,1111 c. The entity uses qualified investments for projects that are based in this state.
AB911,6,1312 3. "Fund" means the Community Development Financial Institutions Fund
13established under 12 USC 4703 (a).
AB911,6,1614 4. a. Subject to subd. 4. b., "qualified investment" means a deposit or loan that
15pays no interest to the person who made the deposit or loan if the deposit or loan has
16a value of at least $10,000 and is made for a period of at least 60 months.
AB911,6,2317 b. A community development financial institution that receives an investment
18described under subd. 4. a. shall have complete control over the entire investment
19amount, including any interest earned on the investment, for the duration of the
20investment period, but the investment may be subject to any additional terms and
21conditions of the investment agreement between the community development
22financial institution and the investor that are not inconsistent with the
23requirements of this section.
Loading...
Loading...