OC3 AB4: Bill Text

LRB-3423/1

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October 2013 Special Session

2013 - 2014 LEGISLATURE

Assembly BILL 4

October 15, 2013 - Introduced by Joint Committee on Finance, by request of Governor Scott Walker. Referred to Joint Committee on Finance.

AB4,1,9 An Act to repeal 71.07 (9m) (a) 1. and 2., 71.28 (6) (a) 1. and 2. and 71.47 (6) (a) 1. and 2.; to renumber 71.10 (4) (dm); to renumber and amend 71.07 (9m) (a) (intro.), 71.07 (9m) (c), 71.28 (6) (a) (intro.), 71.28 (6) (c), 71.47 (6) (a) (intro.) and 71.47 (6) (c); to amend 71.07 (9m) (g) 2., 71.08 (1) (intro.), 71.28 (6) (g) 2. and 71.47 (6) (g) 2.; and to create 71.07 (9m) (a) 2m., 71.07 (9m) (a) 3., 71.07 (9m) (c) 2., 71.07 (9m) (h), 71.28 (6) (a) 2m., 71.28 (6) (a) 3., 71.28 (6) (c) 2., 71.28 (6) (h), 71.47 (6) (a) 2m., 71.47 (6) (a) 3., 71.47 (6) (c) 2. and 71.47 (6) (h) of the statutes; relating to: increasing the amount of the supplement to the federal historic rehabilitation tax credit.

Analysis by the Legislative Reference Bureau

Under current law, a person may claim an income and franchise tax credit for 10 percent of the qualified rehabilitation expenditures, as defined under the federal Internal Revenue Code, for certified historic structures on property located in this state, if construction begins after December 31, 1988, and the rehabilitated property is placed in service after June 30, 1989. The credit is a supplement to the federal tax credit for 20 percent of the qualified rehabilitation expenditures for certified historic structures. The federal credit, and the supplemental state credit, apply to nonresidential real property and residential rental property.

Under this bill, a person may claim an income and franchise tax credit for 20 percent of the qualified rehabilitation expenses, as defined under the federal Internal Revenue Code, for certified historic structures on property located in this state, if the cost of the person's qualified rehabilitation expenditures is at least $50,000 and the rehabilitated property is placed in service after December 31, 2012.

The bill also allows a person to claim a credit equal to 20 percent of the qualified rehabilitation expenses for qualified rehabilitated buildings, as defined under the federal Internal Revenue Code, located in this state. The credit is similar to the federal credit for rehabilitating a building that was first placed in service before 1936, except that the federal credit is 10 percent of the qualified rehabilitation expenses.

Under the bill, the Department of Revenue, in conjunction with the State Historical Society, must submit a report to the Joint Committee on Finance (JCF), no later than June 30, 2016, describing the economic impact of the tax credits and making a recommendation as to whether the tax credits should continue. The recommendation, however, may be implemented only upon approval of JCF.

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:

AB4,1 Section 1. 71.07 (9m) (a) (intro.) of the statutes, as affected by 2013 Wisconsin Act 20, is renumbered 71.07 (9m) (a) 1m. and amended to read:

AB4,2,10 71.07 (9m) (a) 1m. Any For taxable years beginning before January 1, 2013, any person may credit against taxes otherwise due under this chapter, up to the amount of those taxes, an amount equal to one of the following percentages 5 percent of the costs of qualified rehabilitation expenditures, as defined in section 47 (c) (2) of the Internal Revenue Code, for certified historic structures on property located in this state if the physical work of construction or destruction in preparation for construction begins after December 31, 1988, and the rehabilitated property is placed in service after June 30, 1989:, and before January 1, 2013.

AB4,2 Section 2. 71.07 (9m) (a) 1. and 2. of the statutes, as created by 2013 Wisconsin Act 20, are repealed.

AB4,3 Section 3. 71.07 (9m) (a) 2m. of the statutes is created to read:

AB4,3,8 71.07 (9m) (a) 2m. For taxable years beginning after December 31, 2012, any person may claim as a credit against taxes otherwise due under s. 71.02 or 71.08, up to the amount of those taxes, an amount equal to 20 percent of the costs of qualified rehabilitation expenditures, as defined in section 47 (c) (2) of the Internal Revenue Code, for certified historic structures on property located in this state, if the cost of the person's qualified rehabilitation expenditures is at least $50,000 and the rehabilitated property is placed in service after December 31, 2012.

AB4,4 Section 4. 71.07 (9m) (a) 3. of the statutes is created to read:

AB4,3,23 71.07 (9m) (a) 3. For taxable years beginning after December 31, 2012, any person may claim as a credit against taxes otherwise due under s. 71.02 or 71.08, up to the amount of those taxes, an amount equal to 20 percent of the costs of qualified rehabilitation expenditures, as defined in section 47 (c) (2) of the Internal Revenue Code, for qualified rehabilitated buildings, as defined in section 47 (c) (1) of the Internal Revenue Code, on property located in this state, if the cost of the person's qualified rehabilitation expenditures is at least $50,000 and the rehabilitated property is placed in service after December 31, 2012, and regardless of whether the rehabilitated property is used for multiple or revenue-producing purposes. No credit may be claimed under this subdivision for property listed as a contributing building in the state register of historic places or in the national register of historic places and no credit may be claimed under this subdivision for nonhistoric, nonresidential property converted into housing if the property has been previously used for housing.

AB4,5 Section 5. 71.07 (9m) (c) of the statutes is renumbered 71.07 (9m) (c) (intro.) and amended to read:

AB4,4,3 71.07 (9m) (c) (intro.) No person may claim the credit under this subsection par. (a) 2m. unless the claimant includes with the claimant's return evidence each of the following:

AB4,4,8 1. Evidence that the rehabilitation was recommended by the state historic preservation officer for approval by the secretary of the interior under 36 CFR 67.6 before the physical work of construction, or destruction in preparation for construction, began and that the rehabilitation was approved by the secretary of the interior under 36 CFR 67.6 state historic preservation officer.

AB4,6 Section 6. 71.07 (9m) (c) 2. of the statutes is created to read:

AB4,4,11 71.07 (9m) (c) 2. Evidence that the taxpayer obtained written certification from the state historic preservation officer that:

AB4,4,20 a. The property is listed on the national register of historic places in Wisconsin or the state register of historic places, or is determined by the state historical society to be eligible for listing on the national register of historic places in Wisconsin or the state register of historic places, or is located in a historic district that is listed in the national register of historic places in Wisconsin or the state register of historic places and is certified by the state historic preservation officer as being of historic significance to the district, or is an outbuilding of an otherwise eligible property certified by the state historic preservation officer as contributing to the historic significance of the property.

AB4,4,23 b. The proposed preservation or rehabilitation plan complies with standards promulgated under s. 44.02 (24) and the completed preservation or rehabilitation substantially complies with the proposed plan.

AB4,4,25 c. The costs are not incurred to acquire any building or interest in a building or to enlarge an existing building.

AB4,5,2 d. The costs were not incurred before the state historical society approved the proposed preservation or rehabilitation plan.

AB4,7 Section 7. 71.07 (9m) (g) 2. of the statutes is amended to read:

AB4,5,10 71.07 (9m) (g) 2. Notwithstanding s. 71.77, the department may adjust or disallow the credit claimed under this subsection within 4 years after the date that the state historical society notifies the department that the expenditures for which the credit was claimed do not comply with the standards for certification promulgated under s. 44.02 (24). If the department adjusts or disallows, in whole or in part, a credit transferred under par. (h), only the person who originally transferred the credit to another person is liable to repay the adjusted or disallowed amount.

AB4,8 Section 8. 71.07 (9m) (h) of the statutes is created to read:

AB4,5,17 71.07 (9m) (h) Any person, including a nonprofit entity described in section 501 (c) (3) of the Internal Revenue Code, may sell or otherwise transfer the credit under par. (a) 2m. or 3., in whole or in part, to another person who is subject to the taxes imposed under s. 71.02, 71.08, 71.23, or 71.43, if the person notifies the department of the transfer, and submits with the notification a copy of the transfer documents, and the department certifies ownership of the credit with each transfer.

AB4,9 Section 9. 71.08 (1) (intro.) of the statutes is amended to read:

AB4,6,3 71.08 (1) Imposition. (intro.) If the tax imposed on a natural person, married couple filing jointly, trust, or estate under s. 71.02, not considering the credits under ss. 71.07 (1), (2dd), (2de), (2di), (2dj), (2dL), (2dr), (2ds), (2dx), (2dy), (3m), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (5b), (5d), (5e), (5f), (5h), (5i), (5j), (6), (6e), (8r), and (9e), and (9m) 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1dy), (2m), (3), (3n), (3t), and (3w), 71.47 (1dd), (1de), (1di), (1dj), (1dL), (1ds), (1dx), (1dy), (2m), (3), (3n), (3t), and (3w), 71.57 to 71.61, and 71.613 and subch. VIII and payments to other states under s. 71.07 (7), is less than the tax under this section, there is imposed on that natural person, married couple filing jointly, trust or estate, instead of the tax under s. 71.02, an alternative minimum tax computed as follows:

AB4,10 Section 10. 71.10 (4) (dm) of the statutes is renumbered 71.10 (4) (fm).

AB4,11 Section 11. 71.28 (6) (a) (intro.) of the statutes, as affected by 2013 Wisconsin Act 20, is renumbered 71.28 (6) (a) 1m. and amended to read:

AB4,6,14 71.28 (6) (a) 1m. Any For taxable years beginning before January 1, 2013, any person may credit against taxes otherwise due under this chapter, up to the amount of those taxes, an amount equal to one of the following percentages 5 percent of the costs of qualified rehabilitation expenditures, as defined in section 47 (c) (2) of the Internal Revenue Code, for certified historic structures on property located in this state if the physical work of construction or destruction in preparation for construction begins after December 31, 1988, and the rehabilitated property is placed in service after June 30, 1989:, and before January 1, 2013.

AB4,12 Section 12. 71.28 (6) (a) 1. and 2. of the statutes, as created by 2013 Wisconsin Act 20, are repealed.

AB4,13 Section 13. 71.28 (6) (a) 2m. of the statutes is created to read:

AB4,6,24 71.28 (6) (a) 2m. For taxable years beginning after December 31, 2012, any person may claim as a credit against taxes otherwise due under s. 71.23, up to the amount of those taxes, an amount equal to 20 percent of the costs of qualified rehabilitation expenditures, as defined in section 47 (c) (2) of the Internal Revenue Code, for certified historic structures on property located in this state, if the cost of the person's qualified rehabilitation expenditures is at least $50,000 and the rehabilitated property is placed in service after December 31, 2012.

AB4,14 Section 14. 71.28 (6) (a) 3. of the statutes is created to read:

AB4,7,14 71.28 (6) (a) 3. For taxable years beginning after December 31, 2012, any person may claim as a credit against taxes otherwise due under s. 71.23, up to the amount of those taxes, an amount equal to 20 percent of the costs of qualified rehabilitation expenditures, as defined in section 47 (c) (2) of the Internal Revenue Code, for qualified rehabilitated buildings, as defined in section 47 (c) (1) of the Internal Revenue Code, on property located in this state, if the cost of the person's qualified rehabilitation expenditures is at least $50,000 and the rehabilitated property is placed in service after December 31, 2012, and regardless of whether the rehabilitated property is used for multiple or revenue-producing purposes. No credit may be claimed under this subdivision for property listed as a contributing building in the state register of historic places or in the national register of historic places and no credit may be claimed under this subdivision for nonhistoric, nonresidential property converted into housing if the property has been previously used for housing.

AB4,15 Section 15. 71.28 (6) (c) of the statutes is renumbered 71.28 (6) (c) (intro.) and amended to read:

AB4,7,19 71.28 (6) (c) (intro.) No person may claim the credit under this subsection par. (a) 2m. unless the claimant includes with the claimant's return evidence each of the following:

AB4,7,24 1. Evidence that the rehabilitation was recommended by the state historic preservation officer for approval by the secretary of the interior under 36 CFR 67.6 before the physical work of construction, or destruction in preparation for construction, began and that the rehabilitation was approved by the secretary of the interior under 36 CFR 67.6 state historic preservation officer.

AB4,16 Section 16. 71.28 (6) (c) 2. of the statutes is created to read:

AB4,8,2 71.28 (6) (c) 2. Evidence that the taxpayer obtained written certification from the state historic preservation officer that:

AB4,8,11 a. The property is listed on the national register of historic places in Wisconsin or the state register of historic places, or is determined by the state historical society to be eligible for listing on the national register of historic places in Wisconsin or the state register of historic places, or is located in a historic district that is listed in the national register of historic places in Wisconsin or the state register of historic places and is certified by the state historic preservation officer as being of historic significance to the district, or is an outbuilding of an otherwise eligible property certified by the state historic preservation officer as contributing to the historic significance of the property.

AB4,8,14 b. The proposed preservation or rehabilitation plan complies with standards promulgated under s. 44.02 (24) and the completed preservation or rehabilitation substantially complies with the proposed plan.

AB4,8,16 c. The costs are not incurred to acquire any building or interest in a building or to enlarge an existing building.