AB528: Bill Text

The bill allows an employer subject to state income taxation that achieves compliance with the bill before January 1, 2016, to apply for tax credits, a local governmental unit that achieves compliance with the bill before January 1, 2016, to apply for a grant, and a state agency that achieves compliance with the bill before January 1, 2016, to apply for an appropriation supplement in the amount of the difference between the amount of wages paid to achieve that compliance and the amount of the wages that the employer, local governmental unit, or state agency would have paid, but for achieving that compliance (wage differential). To obtain a tax credit, grant, or appropriation supplement, an employer, local governmental unit, or state agency must submit an application and a plan for achieving compliance to the Department of Workforce Development (DWD) that includes all of the following:

1. Information relating to the job classifications in which the applicant's employees are placed and the wage rates paid for those job classifications and documentation of the method, system, calculations, or other bases used to determine the wage rates for the applicant's job classifications.

2. An evaluation of the comparable worth of the applicant's job classifications, as measured by the skill, effort, and responsibility normally required in the performance of the work and the conditions under which the work is normally performed.

3. The amount of the wage differential that the applicant is paying or proposes to pay to achieve compliance with the bill.

4. Any other information required by DWD or the Department of Revenue.

Under the bill, no employer may receive a tax credit for any taxable year that begins on or after January 1, 2016, no local governmental unit provided a grant under the bill may use those grant moneys to pay a wage differential for any work performed after December 31, 2015, and no state agency may use an appropriation supplement provided under the bill to pay a wage differential for any work performed after December 31, 2015.

Sales and use tax on legal services

To fund the grants to local governmental units and the appropriation supplements to state agencies, the bill imposes a sales and use tax on legal services, places those tax moneys in a separate trust fund established under the bill that is designated as the comparable worth fund, and appropriates those moneys for grants to local governmental units, appropriation supplements for state agencies, and administration of the program of tax benefits, grants, and appropriation supplements created under the bill.

School district revenue limit increase

Current law generally limits the total amount of revenue that a school district may receive from general school aids, including equalization aid, and property taxes. Several exceptions to the revenue limit exist. For example, the revenue limit is increased if a school district becomes responsible for performing additional services that are transferred from another school district.

This bill provides that, if DWD approves a school district's plan for achieving compliance with the bill, the school district's revenue limit is increased by an amount that is equal to the wage differential paid by the school district. The revenue limit increase does not apply after the 2015-16 school year.

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:

AB528, s. 1 Section 1. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert the following amounts for the purposes indicated: - See PDF for table

AB528, s. 2 Section 2. 20.445 (1) (sq) of the statutes is created to read:

AB528,4,8 20.445 (1) (sq) Comparable worth; grants; administration. From the comparable worth fund, all moneys not appropriated under s. 20.865 (1) (sq) for grants to local governmental units under s. 111.365 (4) (b) and for the cost of administering the program of tax credits, grants, and appropriation supplements under s. 111.365 (3) to (5).

AB528, s. 3 Section 3. 20.865 (1) (sq) of the statutes is created to read:

AB528,4,13 20.865 (1) (sq) Comparable worth; wage differentials. From the comparable worth fund, the amounts in the schedule to supplement the appropriations to state agencies certified under s. 111.365 (5) (b) for the cost of paying wage differentials, as defined in s. 111.365 (1) (c), to achieve compliance with s. 111.365 (2) (a).

AB528, s. 4 Section 4. 20.928 (1) of the statutes is amended to read:

AB528,5,7 20.928 (1) Each state agency head shall certify to the department of administration, at such time and in such manner as the secretary of administration prescribes, the sum of money needed by the state agency from the appropriations under s. 20.865 (1) (c), (ci), (cj), (d), (i), (ic), (j), (s), (si) , (sq), and (t). Upon receipt of the certifications together with such additional information as the secretary of administration prescribes, the secretary shall determine the amounts required from the respective appropriations to supplement state agency budgets.

AB528, s. 5 Section 5. 25.17 (1) (az) of the statutes is created to read:

AB528,5,9 25.17 (1) (az) Comparable worth fund (s. 25.99);

AB528, s. 6 Section 6. 25.99 of the statutes is created to read:

AB528,5,13 25.99 Comparable worth fund. There is established a separate nonlapsible trust fund designated as the comparable worth fund, to consist of all sales and use taxes on legal fees collected under s. 77.52 (2) (a) 21.

AB528, s. 7 Section 7. 71.05 (6) (a) 15. of the statutes is amended to read:

AB528,5,19 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (3g), (3n), (3s), (3t), (3w), (5b), and (5d) and not passed through by a partnership, limited liability company, or tax-option corporation that has added that amount to the partnership's, company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1) (g).

AB528, s. 8 Section 8. 71.07 (3w) of the statutes is created to read:

AB528,5,23 71.07 (3w) Comparable worth credit. (a) Definition. In this subsection, "claimant" means a person who files a claim under this subsection and who is certified to receive tax benefits under s. 111.365 (3).

AB528,6,4 (b) Filing claims. For taxable years beginning after December 31, 2005, and before January 1, 2016, subject to the limitations provided under this subsection and s. 111.365 (3), a claimant may claim as a credit against the tax imposed under s. 71.02 or 71.08, up to the amount of the tax, an amount equal to the amount of the wage differential the claimant paid to the claimant's employees to achieve compliance with s. 111.365 (2) (a).

AB528,6,12 (c) Limitations. 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 amounts described under par. (b). 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 interests.

AB528,6,14 (d) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

AB528, s. 9 Section 9. 71.10 (4) (cp) of the statutes is created to read:

AB528,6,16 71.10 (4) (cp) Comparable worth credit under s. 71.07 (3w).

AB528, s. 10 Section 10. 71.21 (4) of the statutes is amended to read:

AB528,6,20 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2ds), (2dx), (3g), (3n), (3s), (3t), (3w), and (5b) and passed through to partners shall be added to the partnership's income.

AB528, s. 11 Section 11. 71.26 (2) (a) of the statutes is amended to read:

AB528,7,14 71.26 (2) (a) Corporations in general. The "net income" of a corporation means the gross income as computed under the Internal Revenue Code as modified under sub. (3) minus the amount of recapture under s. 71.28 (1di) plus the amount of credit computed under s. 71.28 (1), (3), (4), and (5) minus, as provided under s. 71.28 (3) (c) 7., the amount of the credit under s. 71.28 (3) that the taxpayer added to income under this paragraph at the time that the taxpayer first claimed the credit plus the amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (3g), (3n), (3t), (3w), and (5b) 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) plus the amount of losses from the sale or other disposition of assets the gain from which would be wholly exempt income, as defined in sub. (3) (L), if the assets were sold or otherwise disposed of at a gain and minus deductions, as computed under the Internal Revenue Code as modified under sub. (3), plus or minus, as appropriate, an amount equal to the difference between the federal basis and Wisconsin basis of any asset sold, exchanged, abandoned, or otherwise disposed of in a taxable transaction during the taxable year, except as provided in par. (b) and s. 71.45 (2) and (5).

AB528, s. 12 Section 12. 71.28 (3w) of the statutes is created to read:

AB528,7,18 71.28 (3w) Comparable worth credit. (a) Definition. In this subsection, "claimant" means a person who files a claim under this subsection and who is certified to receive tax benefits under s. 111.365 (3).

AB528,7,24 (b) Filing claims. For taxable years beginning after December 31, 2005, and before January 1, 2016, subject to the limitations provided under this subsection and s. 111.365 (3), a claimant may claim as a credit against the tax imposed under s. 71.23, up to the amount of the tax, an amount equal to the amount of the wage differential the claimant paid to the claimant's employees to achieve compliance with s. 111.365 (2) (a).

AB528,8,8 (c) Limitations. 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 amounts described under par. (b). 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 interests.

AB528,8,10 (d) Administration. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

AB528, s. 13 Section 13. 71.30 (3) (dm) of the statutes is created to read:

AB528,8,12 71.30 (3) (dm) Comparable worth credit under s. 71.28 (3w).

AB528, s. 14 Section 14. 71.34 (1) (g) of the statutes is amended to read:

AB528,8,16 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), (3g), (3n), (3t), (3w), and (5b) and passed through to shareholders.

AB528, s. 15 Section 15. 71.45 (2) (a) 10. of the statutes is amended to read:

AB528,8,23 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit computed under s. 71.47 (1dd) to (1dx), (3n), (3w), and (5b) 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), (3t), (4), and (5).

AB528, s. 16 Section 16. 71.47 (3w) of the statutes is created to read:

AB528,9,3 71.47 (3w) Comparable worth credit. (a) Definition. In this subsection, "claimant" means a person who files a claim under this subsection and who is certified to receive tax benefits under s. 111.365 (3).

AB528,9,9 (b) Filing claims. For taxable years beginning after December 31, 2005, and before January 1, 2016, subject to the limitations provided under this subsection and s. 111.365 (3), a claimant may claim as a credit against the tax imposed under s. 71.43, up to the amount of the tax, an amount equal to the amount of the wage differential the claimant paid to the claimant's employees to achieve compliance with s. 111.365 (2) (a).

AB528,9,17 (c) Limitations. 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 amounts described under par. (b). 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 interests.

AB528,9,19 (d) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under s. 71.28 (4), applies to the credit under this subsection.

AB528, s. 17 Section 17. 71.49 (1) (dm) of the statutes is created to read:

AB528,9,21 71.49 (1) (dm) Comparable worth credit under s. 71.28 (3w).

AB528, s. 18 Section 18. 77.52 (2) (a) 21. of the statutes is created to read:

AB528,9,23 77.52 (2) (a) 21. Legal services.

AB528, s. 19 Section 19. 77.67 of the statutes is created to read:

AB528,10,3 77.67 Comparable worth fund. The department of revenue shall deposit the amount of the taxes imposed under this subchapter on legal services under s. 77.52 (2) (a) 21. into the comparable worth fund.

AB528, s. 20 Section 20. 77.92 (4) of the statutes is amended to read:

AB528,10,19 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), (3g), (3s), (3n), (3t), (3w), and (5b); 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.

AB528, s. 21 Section 21. 111.365 of the statutes is created to read:

AB528,10,21 111.365 Comparable worth. (1) Definitions. In this section:

AB528,10,25 (a) "Local governmental unit" means a political subdivision of this state, a special purpose district in this state, an instrumentality or corporation of such a political subdivision or special purpose district, a combination or subunit of any of the foregoing, or an instrumentality of the state or any of the foregoing.

AB528,11,2 (b) "Tax benefit" means the comparable worth credit under ss. 71.07 (3w), 71.28 (3w), and 71.47 (3w).

AB528,11,5 (c) "Wage differential" means the difference between the amount of wages paid by an employer to achieve compliance with sub. (2) (a) and the amount of wages that the employer would have paid, but for the employer's compliance with sub. (2) (a).

AB528,11,15 (2) Equal pay for jobs of comparable worth. (a) Beginning on January 1, 2016, employment discrimination because of sex includes discriminating between an employee employed at a place of business in a job that is dominated by employees of a particular sex and an employee employed at the same place of business in a job that is dominated by employees of the opposite sex in compensation paid for work that is of comparable worth, as measured by the composite of the skill, effort, and responsibility normally required in the performance of the work and the conditions under which the work is normally performed. An employer may not achieve compliance with this paragraph by reducing the compensation of any employee or reducing the rate of compensation for any position.

AB528,11,19 (b) Paragraph (a) does not prohibit the payment of different compensation to employees when that compensation is calculated under a bona fide seniority system, a merit system, or a system that measures earnings by quality or quantity of production.

AB528,11,21 (c) No labor organization may cause or attempt to cause an employer to discriminate against an employee in violation of par. (a).

AB528,12,2 (d) Paragraph (a) does not preclude an employer that is subject to taxation under ch. 71, a local governmental unit, or an agency from achieving compliance with par. (a) before January 1, 2016, and receiving tax benefits, a grant, or an appropriation supplement in the amount of the wage differential paid to achieve that compliance as provided in subs. (3) to (5).

AB528,12,7 (3) Tax benefits. (a) The department may certify as eligible for tax benefits an employer subject to taxation under ch. 71 that pays a wage differential to achieve compliance with sub. (2) (a). An employer that pays or proposes to pay a wage differential and that desires to claim tax benefits shall submit to the department an application and a plan for achieving compliance that includes all of the following:

AB528,12,9 1. The name and address of the place of business for which tax benefits will be claimed.

AB528,12,10 2. The appropriate Wisconsin tax identification number of the employer.

AB528,12,14 3. Information relating to the job classifications in which the employer's employees are placed and the wage rates paid for those job classifications and documentation of the method, system, calculations, or other bases used to determine the wage rates for the employer's job classifications.

AB528,12,18 4. An evaluation of the comparable worth of the employer's job classifications, as measured by the skill, effort, and responsibility normally required in the performance of the work and the conditions under which the work is normally performed.

AB528,12,20 5. The amount of the wage differential that the employer is paying or proposes to pay to achieve compliance with sub. (2) (a).

AB528,12,22 6. Any other information required by the department of workforce development or the department of revenue.

AB528,13,5 (b) Subject to par. (f), if the department approves an application and plan submitted under par. (a), the department shall certify the employer as eligible for tax benefits in the amount of the wage differential that the employer is paying or proposes to pay to achieve compliance with sub. (2) (a), as determined by the department. Within 30 days after certifying an employer under this paragraph, the department of workforce development shall notify the department of revenue that the employer has been so certified and shall verify the amount of tax credits that the employer may claim.

AB528,13,7 (c) The department shall annually verify information submitted to the department under ss. 71.07 (3w), 71.28 (3w), and 71.47 (ew).

AB528,13,9 (d) The department shall revoke an employer's certification under par. (b) if the employer does any of the following:

AB528,13,10 1. Supplies false or misleading information to obtain the tax benefits.

AB528,13,11 2. Fails to maintain compliance with sub. (2) (a).

AB528,13,14 (e) Within 30 days after revoking an employer's certification under par. (d), the department of workforce development shall notify the department of revenue of that revocation.

AB528,13,16 (f) No employer may be certified as eligible for tax benefits for any taxable year that begins on or after January 1, 2016.

AB528,13,23 (4) Grants and revenue limit increases. (a) From the appropriation account under s. 20.445 (1) (sq), the department shall provide grants to local governmental units that pay a wage differential to achieve compliance with sub. (2) (a). A local governmental unit that pays or proposes to pay a wage differential and that desires to receive a grant under this paragraph shall submit to the department an application and a plan for achieving compliance that includes the information specified in sub. (3) (a).

AB528,14,11 (b) Subject to par. (e), if the department approves an application and plan submitted under par. (a), the department shall provide a grant to the local governmental unit equal to the amount of the wage differential that the local governmental unit is paying or proposes to pay to achieve compliance with sub. (2) (a), as determined by the department. Subject to par. (e), if the department approves an application and plan submitted by a school district under par. (a), the school district, in addition to receiving a grant under this paragraph, shall receive an increase in its revenue limit under s. 121.91 (2m) as provided in s. 121.91 (4) (L). If in any fiscal year insufficient moneys are available in the appropriation account under s. 20.445 (1) (sq) to fund the full amount of wage differentials paid by all local governmental units, the department shall prorate the grants provided under this paragraph in the proportion that the moneys available bear to the full amount of wage differentials paid by those local governmental units.

AB528,14,13 (c) The department shall revoke a local governmental unit's grant under par. (b) if the local governmental unit does any of the following: