SB436: Bill Text

This bill creates a refundable individual income tax credit for amounts spent by a claimant for the claimant's dependent child on eligible educational expenses at public schools, certain private schools and home-based educational programs, grades kindergarten through 12. Under the bill, "educational expenses" include amounts that are spent for tutoring, summer courses, transportation costs paid to others, nonreligious instructional materials and up to $500 per year for computers and related educational materials to be used in the claimant's home and not used in a trade or business.

The maximum credit that may be claimed under the bill by a state resident is $1,000 per child per year, up to a maximum credit of $2,000 per family per year. A nonresident or part-year resident of this state is eligible to claim a lesser credit. The credit may not be claimed by a claimant if, for a married couple filing jointly, his or her federal adjusted gross income (AGI) exceeds $30,000 to $60,000, depending on the number of children the claimant has. For a married couple filing separately, the maximum federal AGI is $15,000 to $30,000, depending on the number of children the claimant has, and, for a single person or married person filing as head of household, the maximum federal AGI is $25,000 to $55,000, depending on the number of children the claimant has.

This individual income tax credit is refundable. If the amount of the credit exceeds the taxpayer's income tax liability, the difference will be refunded to the taxpayer by check.

The bill also allows individuals to subtract from their income for tax purposes amounts paid for "educational expenses", as defined in the credit, for dependent children who attend kindergarten through grade 12 at the same types of schools and programs as authorized under the tax credit.

The maximum amount of the deduction is $1,500 per child per year, and may not be claimed for any amount for which a claim is made under the education tax credit that is created in the bill. Also under the bill, the amount of the deduction which a claimant may claim phases down to zero as a claimant's income rises. For a married claimant who files a joint return, the credit phases out as federal AGI increases from more than $80,000 to not more than $100,000; for a married claimant who files a separate return, the credit phases out as federal AGI increases from more than $40,000 to not more than $50,000; and for a single filer or married person filing as head of household, the credit phases out as federal AGI increases from more than $50,000 to not more than $60,000.

The bill also creates a higher education individual income tax deduction for amounts paid for tuition to attend any university, college, technical college or proprietary school, all of which must be located in Wisconsin, or for tuition to attend a public vocational school or public institution of higher education in Minnesota under the state tuition reciprocity program. The maximum amount of the deduction is $3,000 per student per year, and may be claimed for tuition expenses of the claimant or of the claimant's child. The maximum amount of the deduction phases down to zero as the claimant's income rises in the same manner as the "K-12" deduction.

Under current law, federal income tax laws that were enacted during 1997 and that took effect before January 1, 1998, apply for Wisconsin income tax purposes at the same time that they apply for federal purposes. This bill adopts for Wisconsin purposes the parts of those acts that take effect on or after January 1, 1998. The bill makes one exception; the deduction for interest on qualified education loans is limited to interest paid while the taxpayer is a Wisconsin resident.

The bill also allows taxpayers, for taxable years that begin on or after January 1, 1998, to compute their deductions for depreciation under either the Internal Revenue Code in effect for the year that the return is filed or the Internal Revenue Code as amended to December 31, 1997. Under current law, for property placed in service in 1997, taxpayers do not have an option to use federal changes made late in 1997.

Property Taxation

This bill exempts computers and related property from the property tax, beginning with the assessment as of January 1, 1999. The bill also creates a payment to municipalities, counties, school districts and technical college districts that is based in part of the value of the exempt computers and related property in each jurisdiction and that is first paid in the year 2000. On or before June 30, 1999, $64,000,000 is transferred to the computer escrow fund, which is created by the bill, to be used for the payments in the year 2000.

Other taxation

This bill creates a tax amnesty program that runs from June 15, 1998, to August 14, 1998. Under the program, persons who fulfill certain requirements are relieved of some of their financial obligations to this state. The bill also increases the department of revenue's (DOR's) capacity to collect delinquent taxes. Among the means to do so are establishing a collection fee for persons who fail to take advantage of the amnesty programs, expanding the state's authority to subtract delinquent taxes owed from its payments to vendors, allowing DOR to require instalment payments to be made by electronic funds transfer and imposing penalties on late payments of withheld taxes.

Currently, a recipient of public assistance has a right to confidentiality of records and files on the recipient, although the existence of that right does not prohibit the use of those records and files for auditing or accounting purposes. This bill allows the department of workforce development (DWD) to use information obtained from public assistance recipients for purposes related to the collection of delinquent state taxes.

The bill also allows DWD and county child support agencies to release to DOR information obtained under child and spousal support and establishment of paternity and medical liability support programs for purposes related to the collection of delinquent state taxes. Under current law, information obtained under DWD's program may only be disclosed in the administration of that program, as well as other specified support-related programs.

Under current law, certain records relating to worker's compensation maintained by DWD are confidential and may not be disclosed under the open records law. Those records include records that reveal the identity of an employe who claims worker's compensation benefits and records that contain any financial information provided to DWD by a self-insured employer. Those records may, however, be disclosed to the employe or self-insured employer that is the subject of the record or to an insurance carrier or employer that is a party to the employe's worker's compensation claim and may be disclosed on the order of a court of competent jurisdiction in this state. This bill permits worker's compensation records that are otherwise confidential and not subject to disclosure under the open records law to be disclosed to DOR for purposes related to the collection of delinquent taxes.

Finally, the department of corrections (DOC) currently maintains information concerning persons who are in the custody of DOC because they have been either sentenced to imprisonment in the state prisons or placed on probation. DOC also maintains a registry of persons required to register as sex offenders. The sex offender registry contains identifying information about the offender as well as such information as where the offender lives, works or attends school. The records containing information concerning persons in DOC custody are generally open to public inspection unless there is a clear statutory exception to public inspection, a common law limitation on inspection or an overriding public interest in keeping the record confidential. Current law provides a limit to public inspection of the information in the sex offender registry by specifying that the information is generally confidential, although DOC or other state agencies that have custody or control of a sex offender may release certain information from the registry to certain persons, including local law enforcement agencies, certain community organizations and the general public.

This bill allows DOC to release to DOR any information that DOC has concerning a person who is in the custody of DOC and any information in the sex offender registry concerning a person who is required to register as a sex offender.

Under current law, when a person applies to the department of regulation and licensing (DORL) to renew a credential to practice a profession or occupation that was initially issued by DORL or an attached examining board or affiliated credentialing board, the person must provide his or her social security number or, if the person is an entity such as a corporation, its federal employer identification number. DORL must deny an application if a person fails to do so. In addition, before renewing the credential, DORL must request DOR to certify whether the person is liable for delinquent taxes. If DOR certifies that the person is liable for delinquent taxes, DORL must deny the application for credential renewal and notify the person that the person has 30 days to request a hearing before DOR to review the certification. A hearing is limited to questions of mistaken identity and payment of the delinquent taxes. If DOR affirms its certification after a hearing, DOR must notify DORL, which must affirm its denial of the application. A person may seek judicial review of DORL's affirmation of its denial in the circuit court for Dane County.

This bill expands these provisions to cover certain licenses, credentials, permits, approvals, registrations and certifications (licenses) that are issued by the following licensing boards and agencies: DORL; a board in DORL; the department of agriculture, trade and consumer protection; the department of commerce; the ethics board; the department of financial institutions; the department of health and family services; the department of natural resources; the department of public instruction; the office of the commissioner of insurance; and the department of transportation. The bill also expands these provisions to cover property assessor certifications and recertifications made by DOR. For a license granted by a board in DORL, DORL, rather than the board, carries out the duties of a licensing agency that are described below.

Under the bill, a person who applies for a license, for renewal or continuation of a license or for certification or recertification as a property assessor must provide his or her social security number or, if applicable, its federal employer identification number to the applicable licensing agency or, for a property assessor, to DOR. If a person does not do so, the licensing agency or DOR must deny the application. A licensing agency's denial or revocation is subject to administrative review by the licensing agency and to judicial review in the same way as are other decisions by the agency. The bill also requires a licensing agency to request DOR to certify whether an applicant for a license is liable for delinquent taxes. In addition, each licensing agency (except a board that is attached to DORL) must enter into a memorandum of understanding with DOR that requires the licensing agency to request that DOR certify whether a person who holds a license is liable for delinquent taxes. (DORL is required to make such a request on behalf of a board that is attached to DORL.) If DOR certifies a liability for delinquent taxes, the licensing agency must either deny the application for issuance, renewal or continuation of the license or revoke the license. In addition, under the bill, DOR may deny an application for property assessor certification or recertification or revoke such a certification if DOR determines that the applicant or holder of the certification is liable for delinquent taxes.

The bill also provides that a person whose application is denied or whose license or property assessor certification is revoked for tax delinquency has 30 days to request a hearing before DOR to review the certification or, for a property assessor, determination of liability for delinquent taxes. A hearing is limited to questions of mistaken identity and payment of the delinquent taxes. After a hearing, if DOR determines that a person is not liable for delinquent taxes, the licensing agency or, for a property assessor, DOR must grant the application or reinstate the license or property assessor certification, unless there are other grounds for denying the application or revoking the license or property assessor certification. If DOR affirms its certification of liability after a hearing, DOR must provide notice of its affirmation to the licensing agency, which, upon receiving the notice, must affirm its denial or revocation. For a property assessor, DOR must notify the applicant or certification holder that it has affirmed its determination of liability. A person may seek judicial review of a licensing agency's affirmation of its denial or revocation or, for a property assessor, DOR's affirmation of its determination in Dane County Circuit Court.

In addition, the bill prohibits a licensing agency from issuing a license to a person whose application was previously denied or whose license was previously revoked for tax delinquency unless the person submits a certificate issued by DOR that states that the person is not liable for delinquent taxes.

Finally, if the supreme court agrees, the bill's requirements and procedures also apply to licenses to practice law.

Transportation

Under current law, the department of transportation (DOT) may issue annual and consecutive month permits for overweight vehicles and combinations of vehicles that are transporting bulk potatoes from storage facilities to food processing facilities. A permit authorizes the operation of a vehicle or vehicle combination at a maximum gross weight of not more than 90,000 pounds. A permit is valid on designated portions of USH 51 and I 39 that are part of the national system of interstate and defense highways.

This bill provides that any permit DOT issues for an overweight vehicle or vehicle combination that is transporting bulk potatoes from storage facilities to food processing facilities is not valid on any part of the national system of interstate and defense highways, except to the extent permitted by federal law without any loss or reduction of federal aid or other sanction.

Under current law, DOT administers a transportation infrastructure loan program, under which DOT makes loans to local governments and other specified entities for highway projects or transit capital improvement projects. The loans are made from the segregated transportation infrastructure loan fund. That segregated fund is capitalized with federal moneys and state moneys in matching amounts required by the federal government as a condition of receiving these federal moneys. Current law generally prohibits DOT from encumbering or expending any moneys on a project for which a loan is made under the transportation infrastructure loan program. This bill eliminates this prohibition.

Veterans and military affairs

This bill authorizes the department of military affairs (DMA) to provide services to disadvantaged youth under a program established by the federal government. Under the federal program, DMA is required to provide persons aged 16 to 18 who have not completed high school with a 22-week residential program that includes training to enhance the participants' life skills, employment potential and ability to obtain a declaration of equivalency of high school education.

Under current law, an eligible veteran may not receive a veteran's home loan to purchase a home if the price of the home exceeds 2.5 times the median price of a home in the state. This bill prohibits an eligible veteran from receiving a veteran's home loan for any eligible purpose, which includes the purchase of a home, improvements to a home or refinancing of a home loan, if the amount of the loan exceeds 2.5 times the median price of a home in the state.

This bill will be referred to the joint survey committee on tax exemptions for a detailed analysis, which will be printed as an appendix to this bill.

This bill will be referred to the joint survey committee on retirement systems for a detailed analysis, which will be printed as an appendix to this bill.

For further information see the state and local 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:

SB436, s. 1 Section 1. 6.875 (1) (a) of the statutes is amended to read:

SB436,40,4 6.875 (1) (a) "Community-based residential facility" has the meaning given in s. 50.01 (1g), except that the term does not include a place where fewer than 10 unrelated adults who are not related to the operator or administrator reside.

SB436, s. 2 Section 2. 13.63 (1) of the statutes is amended to read:

SB436,41,7 13.63 (1) Licenses. An application for a license to act as a lobbyist may be obtained from and filed with the board. An applicant shall include his or her social security number on the application. The application shall be signed, under the penalty for making false statements under s. 13.69 (6m), by the lobbyist. Upon approval of the application and payment of the applicable license fee under s. 13.75 (1) or (1m) to the board, the board shall issue a license which entitles the licensee to practice lobbying on behalf of each registered principal who or which has filed an authorization under s. 13.65 for that lobbyist and paid the authorization fee under s. 13.75 (4). The license shall expire on December 31 of each even-numbered year. The board shall not issue a license to an applicant who does not provide his or her social security number. The board shall not issue a license to an applicant or shall revoke any license issued to a lobbyist if the department of revenue certifies to the board that the applicant or lobbyist is liable for delinquent taxes under s. 73.0301. No application may be disapproved by the board except an application for a license by a person who is ineligible for licensure under this subsection or s. 13.69 (4) or an application by a lobbyist whose license has been revoked under this subsection or s. 13.69 (7) and only for the period of such ineligibility or revocation. Denial of a license on the basis of a certification by the department of revenue may be reviewed under s. 73.0301. Denial of any other license may be reviewed under ch. 227.

SB436, s. 3 Section 3. 13.64 (1) (a) of the statutes is amended to read:

SB436,41,12 13.64 (1) (a) If the principal is an individual, the name and address of the individual's employer, if any, or the individual's principal place of business if self-employed, and a description of the business activity in which the individual or the individual's employer is engaged and the individual's social security number.

SB436, s. 4 Section 4. 13.64 (2) of the statutes is amended to read:

SB436,41,23 13.64 (2) The registration shall expire on December 31 of each even-numbered year. The board shall not accept a registration statement filed by an individual who does not provide his or her social security number. The board shall not accept a registration statement filed by any person or shall terminate the registration of any principal if the department of revenue certifies to the board that the person or principal is liable for delinquent taxes under s. 73.0301. If all lobbying by or on behalf of the principal which is not exempt under s. 13.621 ceases, the board shall terminate the principal's registration and any authorizations under s. 13.65 as of the day after the principal files a statement of cessation and expense statements under s. 13.68 for the period covering all dates on which the principal was registered.

SB436, s. 5 Section 5. 16.24 (3) (a) (intro.), 1. and 2. of the statutes are amended to read:

SB436,42,3 16.24 (3) (a) (intro.) Except as provided under par. (c), the The department shall contract with an individual, a trust or a legal guardian for the sale of tuition units to that individual, trust or legal guardian if all of the following apply:

SB436,42,4 1. The individual purchaser pays a $50 nonrefundable enrollment fee.

SB436,42,6 2. The individual purchaser is purchasing the tuition units on behalf of a beneficiary named in the contract.

SB436, s. 6 Section 6. 16.24 (3) (a) 3. and 4. of the statutes are repealed and recreated to read:

SB436,42,10 16.24 (3) (a) 3. When the contract is executed, at least one of the following applies:

SB436,42,11 a. The beneficiary is a resident of this state.

SB436,42,12 b. If the purchaser is an individual, he or she is a resident of this state.

SB436,42,14 c. If the purchaser is a legal guardian that is not an individual, the legal guardian is organized under the laws of this state.

SB436,42,15 d. If the purchaser is a trust, the trust is created under the laws of this state.

SB436,42,16 4. At least one of the following applies:

SB436,42,17 a. The beneficiary is the purchaser.

SB436,42,20 b. If the purchaser is an individual, the beneficiary is the child, grandchild, nephew or niece of the individual or is a child who is under the legal guardianship of the individual.

SB436,42,22 c. If the purchaser is a legal guardian that is not an individual, the beneficiary is a child who is under the legal guardianship of the legal guardian.

SB436,42,23 d. If the purchaser is a trust, the beneficiary is the beneficiary of the trust.

SB436, s. 7 Section 7. 16.24 (3) (c) of the statutes is repealed.

SB436, s. 8 Section 8. 16.24 (3) (d) of the statutes is amended to read:

SB436,43,3 16.24 (3) (d) The department shall promulgate rules authorizing an individual a person who has entered into a contract under this subsection to change the beneficiary named in the contract.

SB436, s. 9 Section 9. 16.24 (4) of the statutes is amended to read:

SB436,43,12 16.24 (4) Number of tuition units purchased. An individual A person who enters into a contract under sub. (3) may purchase tuition units at any time and in any number, except that the total number of tuition units purchased on behalf of a single beneficiary may not exceed the number necessary to pay for 4 years of full-time attendance, including mandatory student fees, as a resident undergraduate at the institution within the University of Wisconsin System that has the highest resident undergraduate tuition, as determined by the department, in the anticipated academic years of their use.

SB436, s. 10 Section 10. 16.24 (5) (a) of the statutes is amended to read:

SB436,43,20 16.24 (5) (a) If Except as provided in sub. (7m), if an individual named as beneficiary in a contract under sub. (3) attends an institution of higher education in the United States, each tuition unit purchased on his or her behalf entitles that beneficiary to apply toward the payment of tuition at the institution an amount equal to 1% of the anticipated weighted average tuition of bachelor's degree-granting institutions within the University of Wisconsin System for the year of attendance, as estimated under sub. (2) in the year in which the tuition unit was purchased.

SB436, s. 11 Section 11. 16.24 (6) (a) (intro.) of the statutes is amended to read:

SB436,43,23 16.24 (6) (a) (intro.) A contract under sub. (3) may be terminated by the individual person entering into the contract if any of the following occurs:

SB436, s. 12 Section 12. 16.24 (7) (a) to (e) of the statutes are renumbered 16.24 (7) (a) 1. to 5. and amended to read:

SB436,44,8 16.24 (7) (a) 1. When a beneficiary completes the program in which he or she is enrolled, if the beneficiary has not used all of the tuition units purchased on his or her behalf, the department shall refund to the individual person who entered into the contract an amount equal to 1% of the anticipated weighted average tuition in the academic year in which the beneficiary completed the program, as estimated under sub. (2) in the year in which the tuition units were purchased, multiplied by the number of tuition units purchased by the individual person and not used by the beneficiary.

SB436,44,14 2. If a contract is terminated under sub. (6) (a) 1., 2. or 3., the department shall refund to the individual person who entered into the contract an amount equal to 1% of the anticipated weighted average tuition in the academic year in which the contract is terminated, as estimated under sub. (2) in the year in which the tuition units were purchased, multiplied by the number of tuition units purchased by the individual person and not used by the beneficiary.

SB436,44,20 3. If a contract is terminated under sub. (6) (a) 4. or (b), the department shall refund to the individual person who entered into the contract an amount equal to 99% of the amount determined under par. (b) subd. 2. If a contract is terminated under sub. (6) (a) 4., the department may not issue a refund for one year following receipt of the notice of termination and may not issue a refund of more than 100 tuition units in any year.

SB436,44,23 4. If a contract is terminated under sub. (6) (a) 5., the department shall refund to the individual person who entered into the contract the amount under par. (b) subd. 2. or under par. (c) subd. 3., as determined by the department.

SB436,45,5 5. If the beneficiary is awarded a scholarship, tuition waiver or similar subsidy that cannot be converted into cash by the beneficiary, the department shall refund to the individual person who entered into the contract, upon his or her the person's request, an amount equal to the value of the tuition units that are not needed because of the scholarship, waiver or similar subsidy and that would otherwise have been paid by the department on behalf of the beneficiary during the semester in which the beneficiary is enrolled.

SB436, s. 13 Section 13. 16.24 (7) (a) (intro.) of the statutes is created to read:

SB436,45,8 16.24 (7) (a) (intro.) Except as provided in sub. (7m), the department shall do all of the following:

SB436, s. 14 Section 14. 16.24 (7) (f) of the statutes is renumbered 16.24 (7) (b) and amended to read:

SB436,45,13 16.24 (7) (b) Except as provided under par. (c) (a) 3., the department shall determine the method and schedule for the payment of refunds under this subsection.

SB436, s. 15 Section 15. 16.24 (7m) of the statutes is created to read:

SB436,45,18 16.24 (7m) Tuition unit value adjustment; refund adjustment. (a) The department may adjust the value of a tuition unit based on the actual earnings attributable to the tuition unit less the costs of administering the program under this section that are attributable to the tuition unit if any of the following applies: