January 19, 2018 - Introduced by Representatives Summerfield, Allen, Goyke,
Horlacher, Kerkman, Kolste, Novak, Petryk, Quinn, Rohrkaste, Spiros and
Subeck, cosponsored by Senators Testin, Feyen, Fitzgerald, Petrowski,
Ringhand and Wirch. Referred to Committee on Housing and Real Estate.
AB869,1,4 1An Act to amend 76.67 (2); and to create 71.07 (8b), 71.10 (4) (cs), 71.28 (8b),
271.30 (3) (cs), 71.47 (8b), 71.49 (1) (cs), 76.639 and 234.45 of the statutes;
3relating to: an income and franchise tax credit for the development of
4low-income housing.
Analysis by the Legislative Reference Bureau
This bill creates a state tax credit program administered by the Wisconsin
Housing and Economic Development Authority that is similar to a federal
low-income housing tax credit program also administered by WHEDA. Under the
state program, WHEDA may certify a person to claim a nonrefundable income and
franchise tax credit if all of the following conditions are satisfied:
1. The person has an ownership interest in a qualified development. Under the
bill, a “qualified development” is a low-income housing project for purposes of the
federal low-income housing tax credit program, located in Wisconsin, and financed
with tax-exempt bonds.
2. The tax credit is necessary for the financial feasibility of the qualified
development.
3. The qualified development is the subject of a recorded restrictive covenant
requiring that for at least 15 years, among other things, the development must be
maintained and operated as a qualified development.
4. The tax credit certification is issued in accordance with a qualified allocation
plan WHEDA is required to establish under the federal low-income housing tax
credit program.

Under the bill, WHEDA must give preference to qualified developments located
in a city, village, or town of fewer than 150,000. The bill also caps at $42,000,000 the
total amount of tax credits WHEDA may issue under the state program in a calendar
year. However, the bill raises that cap for each calendar year by an amount equal
to the total amount of all unallocated state tax credits from previous calendar years
and the total amount of all previously allocated state tax credits that have been
revoked or cancelled or otherwise recovered by WHEDA.
The bill also requires that WHEDA submit an annual report to the legislature
concerning the progress of the program.
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:
AB869,1 1Section 1. 71.07 (8b) of the statutes is created to read:
AB869,2,22 71.07 (8b) Low-income housing credit. (a) Definitions. In this subsection:
AB869,2,63 1. “Allocation certificate” means a statement issued by the authority certifying
4that a qualified development is eligible for a credit under this subsection and
5specifying the amount of the credit that the owners of the qualified development may
6claim.
AB869,2,87 2. “Authority” means the Wisconsin Housing and Economic Development
8Authority.
AB869,2,109 3. “Claimant” means a person who has an ownership interest in a qualified
10development and who files a claim under this subsection.
AB869,2,1211 4. “Compliance period” means the 15-year period beginning with the first
12taxable year of the credit period.
AB869,3,213 5. “Credit period” means the period of 6 taxable years beginning with the
14taxable year in which a qualified development is placed in service. For purposes of
15this subdivision, if a qualified development consists of more than one building, the

1qualified development is placed in service in the taxable year in which the last
2building of the qualified development is placed in service.
AB869,3,43 6. “Qualified basis” means the qualified basis determined under section 42 (c)
4(1) of the Internal Revenue Code.
AB869,3,85 7. “Qualified development” means a qualified low-income housing project
6under section 42 (g) of the Internal Revenue Code that is financed with tax-exempt
7bonds, pursuant to section 42 (i) (2) of the Internal Revenue Code, and located in this
8state.
AB869,3,139 (b) Filing claims. Subject to the limitations provided in this subsection and in
10s. 234.45, for taxable years beginning after December 31, 2017, a claimant may claim
11as a credit against the taxes imposed under s. 71.02, up to the amount of the tax, the
12amount allocated to the claimant by the authority under s. 234.45 for each taxable
13year within the credit period.
AB869,3,1614 (c) Limitations. 1. No person may claim the credit under par. (b) unless the
15claimant includes with the claimant's return a copy of the allocation certificate
16issued to the qualified development.
AB869,4,1017 2. A partnership, limited liability company, or tax-option corporation may not
18claim the credit under this subsection. The partners of a partnership, members of
19a limited liability company, or shareholders in a tax-option corporation may claim
20the credit under this subsection based on eligible costs incurred by the partnership,
21limited liability company, or tax-option corporation. The partnership, limited
22liability company, or tax-option corporation shall calculate the amount of the credit
23that may be claimed by each partner, member, or shareholder and shall provide that
24information to the partner, member, or shareholder. For shareholders of a tax-option
25corporation, the credit may be allocated in proportion to the ownership interest of

1each shareholder. Credits computed by a partnership or limited liability company
2may be claimed in proportion to the ownership interests of the partners or members
3or allocated to partners or members as provided in a written agreement among the
4partners or members that is entered into no later than the last day of the taxable year
5of the partnership or limited liability company, for which the credit is claimed. Any
6partner or member who claims the credit as allocated by a written agreement shall
7provide a copy of the agreement with the tax return on which the credit is claimed.
8A person claiming the credit as provided under this subdivision is solely responsible
9for any tax liability arising from a dispute with the department of revenue related
10to claiming the credit.
AB869,4,1611 (d) Recapture. 1. As of the last day of any taxable year during the compliance
12period, if the amount of the qualified basis of a qualified development with respect
13to a claimant is less than the amount of the qualified basis as of the last day of the
14immediately preceding taxable year, the amount of the claimant's tax liability under
15this subchapter shall be increased by the recapture amount determined by using the
16method under section 42 (j) of the Internal Revenue Code.
AB869,4,1917 2. In the event that the recapture of any credit is required in any taxable year,
18the taxpayer shall include the recaptured proportion of the credit on the return
19submitted for the taxable year in which the recapture event is identified.
AB869,4,2120 (e) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
21s. 71.28 (4), applies to the credit under this subsection.
AB869,2 22Section 2. 71.10 (4) (cs) of the statutes is created to read:
AB869,4,2323 71.10 (4) (cs) Low-income housing credit under s. 71.07 (8b).
AB869,3 24Section 3. 71.28 (8b) of the statutes is created to read:
AB869,4,2525 71.28 (8b) Low-income housing credit. (a) Definitions. In this subsection:
AB869,5,4
11. “Allocation certificate” means a statement issued by the authority certifying
2that a qualified development is eligible for a credit under this subsection and
3specifying the amount of the credit that the owners of the qualified development may
4claim.
AB869,5,65 2. “Authority” means the Wisconsin Housing and Economic Development
6Authority.
AB869,5,87 3. “Claimant” means a person who has an ownership interest in a qualified
8development and who files a claim under this subsection.
AB869,5,109 4. “Compliance period” means the 15-year period beginning with the first
10taxable year of the credit period.
AB869,5,1511 5. “Credit period” means the period of 6 taxable years beginning with the
12taxable year in which a qualified development is placed in service. For purposes of
13this subdivision, if a qualified development consists of more than one building, the
14qualified development is placed in service in the taxable year in which the last
15building of the qualified development is placed in service.
AB869,5,1716 6. “Qualified basis” means the qualified basis determined under section 42 (c)
17(1) of the Internal Revenue Code.
AB869,5,2118 7. “Qualified development” means a qualified low-income housing project
19under section 42 (g) of the Internal Revenue Code that is financed with tax-exempt
20bonds, pursuant to section 42 (i) (2) of the Internal Revenue Code, and located in this
21state.
AB869,6,222 (b) Filing claims. Subject to the limitations provided in this subsection and in
23s. 234.45, for taxable years beginning after December 31, 2017, a claimant may claim
24as a credit against the taxes imposed under s. 71.23, up to the amount of the tax, the

1amount allocated to the claimant by the authority under s. 234.45 for each taxable
2year within the credit period.
AB869,6,53 (c) Limitations. 1. No person may claim the credit under par. (b) unless the
4claimant includes with the claimant's return a copy of the allocation certificate
5issued to the qualified development.
AB869,6,246 2. A partnership, limited liability company, or tax-option corporation may not
7claim the credit under this subsection. The partners of a partnership, members of
8a limited liability company, or shareholders in a tax-option corporation may claim
9the credit under this subsection based on eligible costs incurred by the partnership,
10limited liability company, or tax-option corporation. The partnership, limited
11liability company, or tax-option corporation shall calculate the amount of the credit
12that may be claimed by each partner, member, or shareholder and shall provide that
13information to the partner, member, or shareholder. For shareholders of a tax-option
14corporation, the credit may be allocated in proportion to the ownership interest of
15each shareholder. Credits computed by a partnership or limited liability company
16may be claimed in proportion to the ownership interests of the partners or members
17or allocated to partners or members as provided in a written agreement among the
18partners or members that is entered into no later than the last day of the taxable year
19of the partnership or limited liability company, for which the credit is claimed. Any
20partner or member who claims the credit as allocated by a written agreement shall
21provide a copy of the agreement with the tax return on which the credit is claimed.
22A person claiming the credit as provided under this subdivision is solely responsible
23for any tax liability arising from a dispute with the department of revenue related
24to claiming the credit.
AB869,7,6
1(d) Recapture. 1. As of the last day of any taxable year during the compliance
2period, if the amount of the qualified basis of a qualified development with respect
3to a claimant is less than the amount of the qualified basis as of the last day of the
4immediately preceding taxable year, the amount of the claimant's tax liability under
5this subchapter shall be increased by the recapture amount determined by using the
6method under section 42 (j) of the Internal Revenue Code.
AB869,7,97 2. In the event that the recapture of any credit is required in any taxable year,
8the taxpayer shall include the recaptured proportion of the credit on the return
9submitted for the taxable year in which the recapture event is identified.
AB869,7,1110 (e) Administration. Subsection (4) (e) to (h), as it applies to the credit under
11sub. (4), applies to the credit under this subsection.
AB869,4 12Section 4. 71.30 (3) (cs) of the statutes is created to read:
AB869,7,1313 71.30 (3) (cs) Low-income housing credit under s. 71.28 (8b).
AB869,5 14Section 5. 71.47 (8b) of the statutes is created to read:
AB869,7,1515 71.47 (8b) Low-income housing credit. (a) Definitions. In this subsection:
AB869,7,1916 1. “Allocation certificate” means a statement issued by the authority certifying
17that a qualified development is eligible for a credit under this subsection and
18specifying the amount of the credit that the owners of the qualified development may
19claim.
AB869,7,2120 2. “Authority” means the Wisconsin Housing and Economic Development
21Authority.
AB869,7,2322 3. “Claimant” means a person who has an ownership interest in a qualified
23development and who files a claim under this subsection.
AB869,7,2524 4. “Compliance period” means the 15-year period beginning with the first
25taxable year of the credit period.
AB869,8,5
15. “Credit period” means the period of 6 taxable years beginning with the
2taxable year in which a qualified development is placed in service. For purposes of
3this subdivision, if a qualified development consists of more than one building, the
4qualified development is placed in service in the taxable year in which the last
5building of the qualified development is placed in service.
AB869,8,76 6. “Qualified basis” means the qualified basis determined under section 42 (c)
7(1) of the Internal Revenue Code.
AB869,8,118 7. “Qualified development” means a qualified low-income housing project
9under section 42 (g) of the Internal Revenue Code that is financed with tax-exempt
10bonds, pursuant to section 42 (i) (2) of the Internal Revenue Code, and located in this
11state.
AB869,8,1612 (b) Filing claims. Subject to the limitations provided in this subsection and in
13s. 234.45, for taxable years beginning after December 31, 2017, a claimant may claim
14as a credit against the taxes imposed under s. 71.43, up to the amount of the tax, the
15amount allocated to the claimant by the authority under s. 234.45 for each taxable
16year within the credit period.
AB869,8,1917 (c) Limitations. 1. No person may claim the credit under par. (b) unless the
18claimant includes with the claimant's return a copy of the allocation certificate
19issued to the qualified development.
AB869,9,1320 2. A partnership, limited liability company, or tax-option corporation may not
21claim the credit under this subsection. The partners of a partnership, members of
22a limited liability company, or shareholders in a tax-option corporation may claim
23the credit under this subsection based on eligible costs incurred by the partnership,
24limited liability company, or tax-option corporation. The partnership, limited
25liability company, or tax-option corporation shall calculate the amount of the credit

1that may be claimed by each partner, member, or shareholder and shall provide that
2information to the partner, member, or shareholder. For shareholders of a tax-option
3corporation, the credit may be allocated in proportion to the ownership interest of
4each shareholder. Credits computed by a partnership or limited liability company
5may be claimed in proportion to the ownership interests of the partners or members
6or allocated to partners or members as provided in a written agreement among the
7partners or members that is entered into no later than the last day of the taxable year
8of the partnership or limited liability company, for which the credit is claimed. Any
9partner or member who claims the credit as allocated by a written agreement shall
10provide a copy of the agreement with the tax return on which the credit is claimed.
11A person claiming the credit as provided under this subdivision is solely responsible
12for any tax liability arising from a dispute with the department of revenue related
13to claiming the credit.
AB869,9,1914 (d) Recapture. 1. As of the last day of any taxable year during the compliance
15period, if the amount of the qualified basis of a qualified development with respect
16to a claimant is less than the amount of the qualified basis as of the last day of the
17immediately preceding taxable year, the amount of the claimant's tax liability under
18this subchapter shall be increased by the recapture amount determined by using the
19method under section 42 (j) of the Internal Revenue Code.
AB869,9,2220 2. In the event that the recapture of any credit is required in any taxable year,
21the taxpayer shall include the recaptured proportion of the credit on the return
22submitted for the taxable year in which the recapture event is identified.
AB869,9,2423 (e) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
24s. 71.28 (4), applies to the credit under this subsection.
AB869,6 25Section 6. 71.49 (1) (cs) of the statutes is created to read:
AB869,10,1
171.49 (1) (cs) Low-income housing credit under s. 71.47 (8b).
AB869,7 2Section 7. 76.639 of the statutes is created to read:
AB869,10,3 376.639 Low-income housing credit. (1) Definitions. In this section:
AB869,10,74 (a) “Allocation certificate” means a statement issued by the authority certifying
5that a qualified development is eligible for a credit under this subsection and
6specifying the amount of the credit that the owners of the qualified development may
7claim.
AB869,10,98 (b) “Authority” means the Wisconsin Housing and Economic Development
9Authority.
AB869,10,1110 (c) “Claimant” means an insurer who has an ownership interest in a qualified
11development and who files a claim under this section.
AB869,10,1312 (d) “Compliance period” means the 15-year period beginning with the first
13taxable year of the credit period.
AB869,10,1814 (e) “Credit period” means the period of 6 taxable years beginning with the
15taxable year in which a qualified development is placed in service. For purposes of
16this paragraph, if a qualified development consists of more than one building, the
17qualified development is placed in service in the taxable year in which the last
18building of the qualified development is placed in service.
AB869,10,2019 (f) “Qualified basis” means the qualified basis determined under section 42 (c)
20(1) of the Internal Revenue Code.
AB869,10,2421 (g) “Qualified development” means a qualified low-income housing project
22under section 42 (g) of the Internal Revenue Code that is financed with tax-exempt
23bonds, pursuant to section 42 (i) (2) of the Internal Revenue Code, and located in this
24state.
AB869,11,5
1(2) Filing claims. Subject to the limitations provided in this section and in s.
2234.45, for taxable years beginning after December 31, 2017, a claimant may claim
3as a credit against the fees imposed under s. 76.60, 76.63, 76.65, 76.66, or 76.67 the
4amount allocated to the claimant by the authority under s. 234.45 for each taxable
5year within the credit period.
AB869,11,8 6(3) Limitations. No insurer may claim the credit under sub. (2) unless the
7claimant includes with the claimant's return a copy of the allocation certificate
8issued to the qualified development.
AB869,11,14 9(4) Recapture. (a) As of the last day of any taxable year during the compliance
10period, if the amount of the qualified basis of a qualified development with respect
11to a claimant is less than the amount of the qualified basis as of the last day of the
12immediately preceding taxable year, the amount of the claimant's tax liability under
13s. 76.60, 76.63, 76.65, 76.66, or 76.67 shall be increased by the recapture amount
14determined by using the method under section 42 (j) of the Internal Revenue Code.
AB869,11,1715 (b) In the event that the recapture of any credit is required in any taxable year,
16the taxpayer shall include the recaptured proportion of the credit on the return
17submitted for the taxable year in which the recapture event is identified.
AB869,11,23 18(5) Carry-forward. If the credit under sub. (2) is not entirely offset against the
19fees under s. 76.60, 76.63, 76.65, 76.66, or 76.67 otherwise due, the unused balance
20may be carried forward and credited against those fees for the following 15 years to
21the extent that it is not offset by those fees otherwise due in all the years between
22the year in which the expense was made and the year in which the carry-forward
23credit is claimed.
AB869,8 24Section 8. 76.67 (2) of the statutes is amended to read:
AB869,12,10
176.67 (2) If any domestic insurer is licensed to transact insurance business in
2another state, this state may not require similar insurers domiciled in that other
3state to pay taxes greater in the aggregate than the aggregate amount of taxes that
4a domestic insurer is required to pay to that other state for the same year less the
5credits under ss. 76.635, 76.636, 76.637, 76.638, and 76.655, except that the amount
6imposed shall not be less than the total of the amounts due under ss. 76.65 (2) and
7601.93 and, if the insurer is subject to s. 76.60, 0.375 percent of its gross premiums,
8as calculated under s. 76.62, less offsets allowed under s. 646.51 (7) or under ss.
976.635, 76.636, 76.637, 76.638, 76.639, and 76.655 against that total, and except that
10the amount imposed shall not be less than the amount due under s. 601.93.
AB869,9 11Section 9. 234.45 of the statutes is created to read:
AB869,12,12 12234.45 Low-income housing tax credits. (1) Definitions. In this section:
AB869,12,1513 (a) “Allocation certificate” means a statement issued by the authority certifying
14that a qualified development is eligible for a state tax credit and specifying the
15amount of the credit that the owners of the qualified development may claim.
AB869,12,1716 (b) “Compliance period” means the 15-year period beginning with the first
17taxable year of the credit period.
AB869,12,2218 (c) “Credit period” means the period of 6 taxable years beginning with the
19taxable year in which a qualified development is placed in service. For purposes of
20this paragraph, if a qualified development consists of more than one building, the
21qualified development is placed in service in the taxable year in which the last
22building of the qualified development is placed in service.
AB869,12,2423 (d) “Qualified allocation plan” means the qualified allocation plan adopted by
24the authority pursuant to section 42 (m) of the Internal Revenue Code.
AB869,13,4
1(e) “Qualified development” means a qualified low-income housing project
2under section 42 (g) of the Internal Revenue Code that is financed with tax-exempt
3bonds, pursuant to section 42 (i) (2) of the Internal Revenue Code, and located in this
4state.
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