Analysis by the Legislative Reference Bureau
Under current law, the Wisconsin Housing and Economic Development
Authority administers a low-income housing tax credit program. Under that
program, a person may claim as a credit against the person's income or franchise tax
liability, or against the person's liability for fees imposed on an insurer, the amount
allocated by WHEDA in an “allocation certificate” for a qualified low-income housing
project. The annual amount of tax credits WHEDA certifies under the program may
not exceed $42,000,000. The bill increases that annual cap to $100,000,000.
The bill also requires that WHEDA, if possible, ensure that at least 35 percent
of the tax credits it allocates each year under the program are for qualified
low-income housing projects in rural areas in Wisconsin and removes the
requirement that a qualified low-income housing project be financed with
tax-exempt bonds.
Finally, the bill makes a technical change to the credit for insurers so that an
insurer who is a shareholder of a tax-option corporation, a partner of a partnership,
or a member of a limited liability company may claim the credit.

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:
AB39,1 1Section 1. 71.07 (8b) (e) of the statutes is amended to read:
AB39,2,72 71.07 (8b) (e) Administration. Section 71.28 (4) (e) to (h), as it applies to the
3credit under s. 71.28 (4), applies to the credit under this subsection. In addition, if
4a credit computed under this subsection is not entirely offset against Wisconsin
5income or franchise taxes otherwise due, the unused balance may be carried back
6and credited against Wisconsin income or franchise taxes otherwise due for the
7previous taxable year.
AB39,2 8Section 2. 71.28 (8b) (e) of the statutes is amended to read:
AB39,2,149 71.28 (8b) (e) Administration. Subsection (4) (e) to (h), as it applies to the credit
10under sub. (4), applies to the credit under this subsection. In addition, if a credit
11computed under this subsection is not entirely offset against Wisconsin income or
12franchise taxes otherwise due, the unused balance may be carried back and credited
13against Wisconsin income or franchise taxes otherwise due for the previous taxable
14year.
AB39,3 15Section 3. 71.47 (8b) (e) of the statutes is amended to read:
AB39,2,2116 71.47 (8b) (e) Administration. Section 71.28 (4) (e) to (h), as it applies to the
17credit under s. 71.28 (4), applies to the credit under this subsection. In addition, if
18a credit computed under this subsection is not entirely offset against Wisconsin
19income or franchise taxes otherwise due, the unused balance may be carried back
20and credited against Wisconsin income or franchise taxes otherwise due for the
21previous taxable year.
AB39,4
1Section 4. 76.639 (3) of the statutes is renumbered 76.639 (3) (a).
AB39,5 2Section 5. 76.639 (3) (b) of the statutes is created to read:
AB39,3,193 76.639 (3) (b) A partnership, limited liability company, or tax-option
4corporation may not claim the credit under this section. An insurer, if a partner of
5a partnership, member of a limited liability company, or shareholder in a tax-option
6corporation, may claim the credit under this section based on eligible costs incurred
7by the partnership, limited liability company, or tax-option corporation. The
8partnership, limited liability company, or tax-option corporation shall calculate the
9amount of the credit that may be claimed by the insurer as a partner, member, or
10shareholder and shall provide that information to the insurer. If an insurer is a
11shareholder of a tax-option corporation, the credit may be allocated in proportion to
12its ownership interest as a shareholder. If an insurer is a partner of a partnership
13or member of a limited liability company, credits may be claimed in proportion to the
14insurer's ownership interest or allocated to the insurer as provided in a written
15agreement among the partners or members that is entered into no later than the last
16day of the taxable year of the partnership or limited liability company for which the
17credit is claimed. Any insurer who claims the credit as allocated by a written
18agreement shall provide a copy of the agreement with the tax return on which the
19credit is claimed.
AB39,6 20Section 6. 76.639 (5) of the statutes is amended to read:
AB39,4,521 76.639 (5) Carry-forward; carry-back. If the credit under sub. (2) is not
22entirely offset against the fees under s. 76.60, 76.63, 76.65, 76.66, or 76.67 otherwise
23due, the unused balance may be carried forward and credited against those fees for
24the following 15 years to the extent that it is not offset by those fees otherwise due
25in all the years between the year in which the expense was made and the year in

1which the carry-forward credit is claimed. In addition, if a credit computed under
2sub. (2) is not entirely offset against the fees under s. 76.60, 76.63, 76.65, 76.66, or
376.67 otherwise due, the unused balance may be carried back and credited against
4the fees under s. 76.60, 76.63, 76.65, 76.66, or 76.67 otherwise due for the previous
5taxable year.
AB39,7 6Section 7. 76.67 (2) of the statutes is amended to read:
AB39,4,177 76.67 (2) If any domestic insurer is licensed to transact insurance business in
8another state, this state may not require similar insurers domiciled in that other
9state to pay taxes greater in the aggregate than the aggregate amount of taxes that
10a domestic insurer is required to pay to that other state for the same year less the
11credits under ss. 76.635, 76.636, 76.637, 76.638, 76.639, and 76.655, except that the
12amount imposed shall not be less than the total of the amounts due under ss. 76.65
13(2) and 601.93 and, if the insurer is subject to s. 76.60, 0.375 percent of its gross
14premiums, as calculated under s. 76.62, less offsets allowed under s. 646.51 (7) or
15under ss. 76.635, 76.636, 76.637, 76.638, 76.639, and 76.655 against that total, and
16except that the amount imposed shall not be less than the amount due under s.
17601.93.
AB39,8 18Section 8. 234.45 (1) (e) of the statutes is amended to read:
AB39,4,2219 234.45 (1) (e) “Qualified development” means a qualified low-income housing
20project under section 42 (g) of the Internal Revenue Code that is financed with
21tax-exempt bonds, pursuant to section 42 (i) (2) of the Internal Revenue Code, and

22located in this state.
AB39,9 23Section 9. 234.45 (1) (em) of the statutes is created to read:
AB39,5,3
1234.45 (1) (em) “Rural area” means a city, village, or town in this state that has
2a population of fewer than 10,000 and that is at least 25 miles from any city, village,
3or town that has a population of at least 50,000.
AB39,10 4Section 10. 234.45 (4) of the statutes is amended to read:
AB39,5,115 234.45 (4) Allocation limits. In any calendar year, the aggregate amount of
6all state tax credits for which the authority certifies persons in allocation certificates
7issued under sub. (3) in that year may not exceed $42,000,000 $100,000,000,
8including all amounts each person is eligible to claim for each year of the credit
9period, plus the total amount of all unallocated state tax credits from previous
10calendar years and plus the total amount of all previously allocated state tax credits
11that have been revoked or cancelled or otherwise recovered by the authority.
AB39,11 12Section 11. 234.45 (5m) of the statutes is created to read:
AB39,5,1613 234.45 (5m) Preference for rural communities. (a) Beginning on January
141, 2024, in approving applications for allocation certificates under sub. (3), the
15authority shall ensure that at least 35 percent of the value of all state tax credits the
16authority allocates each year are for qualified developments located in rural areas.
AB39,5,2117 (b) Paragraph (a) does not apply in any year in which the authority cannot
18satisfy the 35 percent allocation threshold because the authority does not receive a
19sufficient number of applications for allocation certificates for qualified
20developments located in rural areas that the authority determines are complete and
21financially prudent.
AB39,5,2222 (End)
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