Amendment ASA1-AB531

AB531-ASA1,6,24 (e) 1. If a certified capital company is decertified, or an investment pool is disqualified, under s. 560.37 before the certified capital company fulfills the investment requirement under s. 560.34 (1m) (a) 1. with respect to the investment pool, any claimant that has received a credit under this subsection with respect to that investment pool shall repay that credit to the department of revenue and may not claim more credit in respect to that investment pool.

AB531-ASA1,7,10 2. If a certified capital company fulfills the investment requirement under s. 560.34 (1m) (a) 1. with respect to an investment pool but the certified capital company is decertified, or an investment pool is disqualified, under s. 560.37 before the certified capital company fulfills the investment requirement under s. 560.34 (1m) (a) 2. for that investment pool, any claimant that has received a credit under this subsection with respect to that investment pool shall repay all credits that were claimed for taxable years after the taxable year that includes the 3rd anniversary of the investment date of the investment pool and may claim no more credits for taxable years after the taxable year that includes the 3rd anniversary of the investment date of the investment pool.

AB531-ASA1, s. 7 Section 7. 71.30 (3) (dm) of the statutes is created to read:

AB531-ASA1,7,12 71.30 (3) (dm) The certified capital company credit under s. 71.28 (7m).

AB531-ASA1, s. 8 Section 8. 71.34 (1) (g) of the statutes is amended to read:

AB531-ASA1,7,16 71.34 (1) (g) An addition shall be made for credits computed by a tax-option corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (3), and (3g), and (7m) and passed through to shareholders.

AB531-ASA1, s. 9 Section 9. 71.45 (2) (a) 10. of the statutes is amended to read:

AB531-ASA1,7,23 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit computed under s. 71.47 (1dd) to (1dx), (7) and (7m) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership's, limited liability company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1) (g) and the amount of credit computed under s. 71.47 (1), (3), (4), and (5).

AB531-ASA1, s. 10 Section 10. 71.47 (7) of the statutes is created to read:

AB531-ASA1,7,25 71.47 (7) Certified capital company credit. (a) In this subsection:

AB531-ASA1,8,1 1. "Certified capital company" has the meaning given in s. 560.30 (2).

AB531-ASA1,8,2 2. "Certified capital investment" has the meaning given in s. 560.30 (4).

AB531-ASA1,8,3 3. "Investment date" has the meaning given in s. 560.30 (6).

AB531-ASA1,8,4 4. "Investment pool" has the meaning given in s. 560.30 (7).

AB531-ASA1,8,5 5. "Qualified investment" has the meaning given in s. 560.30 (11).

AB531-ASA1,8,13 (b) An insurer who makes a certified capital investment of at least $1,000,000 may claim as a credit against the tax imposed under s. 71.43, for 10 years beginning with the year of the investment, an amount equal to either 7.5 percent of that investment for the first 2 taxable years and 10.625 percent of that investment for the remaining 8 taxable years or the amount by which the sum of the insurer's certified capital investments and the insurer's qualified investments exceeds the insurer's qualified investments in the taxable year before the insurer first claimed the credit under this section, whichever is less.

AB531-ASA1,8,15 (c) Section 71.28 (4) (e), (f), (g), and (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

AB531-ASA1,8,21 (d) 1. If a certified capital company is decertified, or an investment pool is disqualified, under s. 560.37 before the certified capital company fulfills the investment requirement under s. 560.34 (1m) (a) 1. with respect to the investment pool, any insurer that has received a credit under this subsection with respect to that investment pool shall repay that credit to the department of revenue and may not claim more credit in respect to that investment pool.

AB531-ASA1,9,6 2. If a certified capital company fulfills the investment requirement under s. 560.34 (1m) (a) 1. with respect to an investment pool but the certified capital company is decertified, or an investment pool is disqualified, under s. 560.37 before the certified capital company fulfills the investment requirement under s. 560.34 (1m) (a) 2. for that investment pool, any insurer that has received a credit under this subsection with respect to that investment pool shall repay all credits that were claimed for taxable years after the taxable year that includes the 3rd anniversary of the investment date of the investment pool and may claim no more credits for taxable years after the taxable year that includes the 3rd anniversary of the investment date of the investment pool.

AB531-ASA1,9,10 (e) An insurer may sell a credit under this subsection to another insurer who is subject to the tax imposed under s. 71.43 if the insurer notifies the commissioner of insurance and the department of revenue of the sale and includes with such notifications copies of the transfer documents.

AB531-ASA1, s. 11 Section 11. 71.47 (7m) of the statutes is created to read:

AB531-ASA1,9,12 71.47 (7m) Certified capital company credit. (a) In this subsection:

AB531-ASA1,9,13 1. "Certified capital company" has the meaning given in s. 560.30 (2).

AB531-ASA1,9,14 2. "Certified capital investment" has the meaning given in s. 560.30 (4).

AB531-ASA1,9,18 3. "Claimant" means a person who is subject to taxation under subchs. I, II, and IV of ch. 76, a credit union organized under ch. 186, a savings bank organized under ch. 214, a savings and loan association organized under ch. 215, or a bank organized under ch. 221.

AB531-ASA1,9,19 4. "Investment date" has the meaning given in s. 560.30 (6).

AB531-ASA1,9,20 5. "Investment pool" has the meaning given in s. 560.30 (7).

AB531-ASA1,9,21 6. "Qualified investment" has the meaning given in s. 560.30 (11).

AB531-ASA1,9,25 (b) A claimant who makes a certified capital investment of at least $1,000,000 may claim as a credit against the tax imposed under s. 71.43, up to the amount of those taxes, for 10 years beginning with the year of the investment, an amount equal to either 7.5 percent of that investment for the first 2 taxable years and 10.625 percent of that investment for the remaining 8 taxable years or the amount by which the sum of the claimant's certified capital investments and the claimant's qualified investments exceeds the claimant's qualified investments in the taxable year before the claimant first claimed the credit under this subsection, whichever is less.

AB531-ASA1,10,6 (c) Subsection 71.28 (4) (e), (f), (g), and (h), as it applies to the credit under 71.28 (4), applies to the credit under this subsection.

AB531-ASA1,10,14 (d) Partnerships, limited liability companies, and tax-option corporations may not claim the credit under this subsection, but the eligibility for, and the amount of, the credit are based on their payment of a certified capital investment. A partnership, limited liability company, or tax-option corporation shall compute the amount of credit that each of its partners, members, or shareholders may claim and shall provide that information to each of them. Partners, members of limited liability companies, and shareholders of tax-option corporations may claim the credit in proportion to their ownership interest.

AB531-ASA1,10,20 (e) 1. If a certified capital company is decertified, or an investment pool is disqualified, under s. 560.37 before the certified capital company fulfills the investment requirement under s. 560.34 (1m) (a) 1. with respect to the investment pool, any claimant that has received a credit under this subsection with respect to that investment pool shall repay that credit to the department of revenue and may not claim more credit in respect to that investment pool.

AB531-ASA1,11,5 2. If a certified capital company fulfills the investment requirement under s. 560.34 (1m) (a) 1. with respect to an investment pool but the certified capital company is decertified, or an investment pool is disqualified, under s. 560.37 before the certified capital company fulfills the investment requirement under s. 560.34 (1m) (a) 2. for that investment pool, any claimant that has received a credit under this subsection with respect to that investment pool shall repay all credits that were claimed for taxable years after the taxable year that includes the 3rd anniversary of the investment date of the investment pool and may claim no more credits for taxable years after the taxable year that includes the 3rd anniversary of the investment date of the investment pool.

AB531-ASA1, s. 12 Section 12. 71.49 (1) (dm) of the statutes is created to read:

AB531-ASA1,11,7 71.49 (1) (dm) Certified capital company credit under s. 71.47 (7).

AB531-ASA1, s. 13 Section 13. 71.49 (1) (dn) of the statutes is created to read:

AB531-ASA1,11,9 71.49 (1) (dn) The certified capital company credit under s. 71.47 (7m).

AB531-ASA1, s. 14 Section 14. 76.635 (2) of the statutes is renumbered 76.635 (2) (a) and amended to read:

AB531-ASA1,11,18 76.635 (2) (a) An For taxable years beginning before July 1, 2005, an insurer that makes a certified capital investment may credit against the fees due under s. 76.60, 76.63, 76.65, 76.66 or 76.67, for 10 years beginning with the year of the investment, either 10% 10 percent of that investment or the amount by which the sum of the insurer's certified capital investments and the insurer's qualified investments exceeds the insurer's qualified investments in the taxable year before the insurer first claimed the credit under this section, whichever is less.

AB531-ASA1, s. 15 Section 15. 76.635 (2) (b) of the statutes is created to read:

AB531-ASA1,12,2 76.635 (2) (b) For taxable years beginning after June 30, 2005, an insurer that makes a certified capital investment may credit against the fees due under s. 76.60, 76.63, 76.65, 76.66 or 76.67, for 10 years beginning with the year of the investment, either 7.5 percent of that investment for the first 2 taxable years and 10.625 percent of that investment for the remaining 8 taxable years or the amount by which the sum of the insurer's certified capital investments and the insurer's qualified investments exceeds the insurer's qualified investments in the taxable year before the insurer first claimed the credit under this section, whichever is less.

AB531-ASA1, s. 16 Section 16. 77.92 (4) of the statutes is amended to read:

AB531-ASA1,12,18 77.92 (4) "Net business income", with respect to a partnership, means taxable income as calculated under section 703 of the Internal Revenue Code; plus the items of income and gain under section 702 of the Internal Revenue Code, including taxable state and municipal bond interest and excluding nontaxable interest income or dividend income from federal government obligations; minus the items of loss and deduction under section 702 of the Internal Revenue Code, except items that are not deductible under s. 71.21; plus guaranteed payments to partners under section 707 (c) of the Internal Revenue Code; plus the credits claimed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), and (3g), and (3s), and (7m); and plus or minus, as appropriate, transitional adjustments, depreciation differences, and basis differences under s. 71.05 (13), (15), (16), (17), and (19); but excluding income, gain, loss, and deductions from farming. "Net business income", with respect to a natural person, estate, or trust, means profit from a trade or business for federal income tax purposes and includes net income derived as an employee as defined in section 3121 (d) (3) of the Internal Revenue Code.

AB531-ASA1, s. 17 Section 17. Subchapter II (title) of chapter [precedes 560.30] of the statutes is amended to read:

AB531-ASA1,12,21 Chapter 560

AB531-ASA1,12,23 subchapter II certified Wisconsin capital companies

AB531-ASA1, s. 18 Section 18. 560.30 (3) of the statutes is amended to read:

AB531-ASA1,13,2 560.30 (3) "Certified capital company tax credit" means the tax credit under s. ss. 71.07 (7m), 71.28 (7m), 71.47 (7) and (7m), and 76.635.

AB531-ASA1, s. 19 Section 19. 560.30 (5g) of the statutes is created to read:

AB531-ASA1,13,5 560.30 (5g) "Early stage business" means a qualified business that satisfies any of the following criteria:

AB531-ASA1,13,9 (a) At the time that a certified capital company makes an initial investment in the business, the business is involved in activities related to prototype development, establishment of initial production or service processes, or other development of initial product or service offerings.

AB531-ASA1,13,13 (b) During the fiscal year preceding the year in which a certified capital company makes an initial investment in the business, the business had gross revenues of less than $2,000,000, on a consolidated basis, as determined in accordance with generally accepted accounting principles.

AB531-ASA1,13,15 (c) The business is approved as an early stage business by the department under s. 560.33 (2).

AB531-ASA1, s. 20 Section 20. 560.30 (5r) of the statutes is created to read:

AB531-ASA1,13,19 560.30 (5r) "Investment criteria" means the investment criteria submitted to the department under s. 560.31 (2) (j), or any investment criteria subsequently approved as provided under the rules of the department.

AB531-ASA1, s. 21 Section 21. 560.30 (9) of the statutes is renumbered 560.30 (9) (intro.) and amended to read:

AB531-ASA1,13,24 560.30 (9) (intro.) "Qualified debt instrument" means a debt instrument that a certified capital company issues at par value or at a premium; that has and that satisfies all of the following criteria:

AB531-ASA1,14,2 (a) The debt instrument has an original maturity date of at least 5 years from the date on which it was issued; that.

AB531-ASA1,14,4 (b) The debt instrument has a repayment schedule that is no faster than a level principal amortization and, until over 5 years.

AB531-ASA1,14,8 (c) Until the certified capital company may make distributions other than qualified distributions, the interest, distribution or payment features of which the debt instrument are not related to the certified capital company's profitability or the performance of its investment portfolio.

AB531-ASA1, s. 22 Section 22. 560.30 (9) (d) of the statutes is created to read:

AB531-ASA1,14,11 560.30 (9) (d) The debt instrument does not permit the certified investor to receive prepayment of interest.

AB531-ASA1, s. 23 Section 23. 560.30 (10) (intro.) of the statutes is amended to read:

AB531-ASA1,14,14 560.30 (10) (intro.) "Qualified distribution" means a distribution or payment by a certified capital company to its equity holders for any of the following:

AB531-ASA1, s. 24 Section 24. 560.30 (10) (a) of the statutes is amended to read:

AB531-ASA1,14,17 560.30 (10) (a) The costs of forming, and syndicating, managing or operating the certified capital company, up to $750,000.

AB531-ASA1, s. 25 Section 25. 560.30 (10) (b) of the statutes is amended to read:

AB531-ASA1,14,21 560.30 (10) (b) An annual management fee that does not exceed 2.5% of the certified capital company's total certified capital or the cost of managing and operating the certified capital company, whichever is less.

AB531-ASA1, s. 26 Section 26. 560.30 (10) (c) of the statutes is repealed.

AB531-ASA1, s. 27 Section 27. 560.30 (10) (d) of the statutes is amended to read:

AB531-ASA1,15,2 560.30 (10) (d) A projected increase in federal or state taxes, including excluding penalties and interest on those taxes, of the equity owners of the certified capital company if those amounts are related to the certified capital company's ownership, management, or operation.

AB531-ASA1, s. 28 Section 28. 560.30 (10) (e) of the statutes is created to read:

AB531-ASA1,15,5 560.30 (10) (e) Reasonable costs associated with applying for qualified federal funding programs, as determined by the department.

AB531-ASA1, s. 29 Section 29. 560.31 (1) of the statutes is renumbered 560.31 (1) (a) and amended to read:

AB531-ASA1,15,13 560.31 (1) (a) The department shall promulgate rules establishing procedures under which a person may apply to become a certified capital company for receiving certified capital investments under s. 560.32 (2) (b) 1. or a certified capital company for receiving certified capital investments under s. 560.32 (2) (b) 2. The department shall grant or deny an application for certification under this section within 30 days of the date of application.

AB531-ASA1,15,25 (b) If the department denies certification, the department shall include with the denial a detailed description of the grounds for the refusal, including suggestions for removal of those grounds. A person may submit an amended application within 15 days of receipt of a notice of denial. The department shall grant or deny the amended application within 15 days of the date of the amended application. If the department denies certification based upon the amended application, the department shall include with the denial a detailed description of the grounds for the refusal. A person whose amended application is denied may, within 10 days after the department's decision, request a contested case hearing under s. 227.42 from the department. If the final administrative or judicial proceeding results in a determination that the application was denied in error, the department shall revise its determination accordingly.

AB531-ASA1, s. 30 Section 30. 560.31 (2) (intro.) of the statutes is amended to read:

AB531-ASA1,16,4 560.31 (2) Requirements for certification. (intro.) The department shall may certify a person as a certified capital company if the department determines that all of the following conditions have been met:

AB531-ASA1, s. 31 Section 31. 560.31 (2) (b) of the statutes is amended to read:

AB531-ASA1,16,8 560.31 (2) (b) The At the time of application and on the date on which the person is certified, the person has a net worth, at the time of application, of at least $500,000 and has at least $500,000 in cash, cash equivalents , and marketable securities.

AB531-ASA1, s. 32 Section 32. 560.31 (2) (g) of the statutes is created to read:

AB531-ASA1,16,12 560.31 (2) (g) The person agrees to maintain in this state an investment office and staff actively engaged in making investments until all investment pools have been decertified.

AB531-ASA1, s. 33 Section 33. 560.31 (2) (h) of the statutes is created to read:

AB531-ASA1,16,21 560.31 (2) (h) The person has provided the department with a list of all persons that have an ownership interest in the person as provided under this paragraph. The list shall include the percentage ownership interest of each owner and indicate whether the interest is voting or nonvoting. If the person is an entity that is registered under 15 USC 78l (g) or required to file reports under 15 USC 78o (d), the person shall list only those persons having beneficial ownership of equity securities of at least 5 percent. If a list contains the name of a business entity, the person shall also include a list of all persons that have an ownership interest in the entity.

AB531-ASA1, s. 34 Section 34. 560.31 (2) (i) of the statutes is created to read:

AB531-ASA1,16,24 560.31 (2) (i) The person has provided the department with a business plan covering at least the 5-year period following the date of application.

AB531-ASA1, s. 35 Section 35. 560.31 (2) (j) of the statutes is created to read:

AB531-ASA1,17,3 560.31 (2) (j) The person has provided the department with the person's investment strategy, along with a description of the investment criteria the person intends to follow.

AB531-ASA1, s. 36 Section 36. 560.31 (2) (k) of the statutes is created to read: