2013 - 2014 LEGISLATURE
December 16, 2013 - Introduced by Senators Gudex,
Petrowski, Lassa, Moulton,
T. Cullen and Olsen, cosponsored by Representatives Loudenbeck, Krug,
Czaja, Jacque, Kahl, Kleefisch, Kolste, Bernier, Sargent, Murphy, Wright,
Jorgensen, Kuglitsch, Bies, Ringhand, Born, Kestell, Mason and Petryk.
Referred to Committee on Economic Development and Local Government.
1An Act to create
238.3045 of the statutes; relating to: authorizing the transfer
2of certain tax credits earned in connection with economic development in this
Analysis by the Legislative Reference Bureau
Under current law, the Wisconsin Economic Development Corporation
(corporation) may certify a person to claim tax credits against the person's income
or franchise tax liability or against the person's liability for fees imposed on insurers,
if the corporation determines that the person is conducting or will conduct certain
eligible business activities that will result in economic development in Wisconsin
(economic development tax credits). A person may qualify for additional economic
development tax credits if the eligible activity conducted by the person will benefit
a particular group or economically distressed area that the state has targeted for
This bill creates a program under which the corporation may approve the
transfer of economic development tax credits to another Wisconsin taxpayer other
than the person to whom the corporation initially awards the tax credits. Under the
bill, the corporation may approve the transfer of economic development tax credits
if the person to whom the tax credits are initially awarded meets at least one of the
following conditions in addition to being authorized by the corporation to claim the
1. The person is headquartered in, and employs at least 51 percent of its
employees in, Wisconsin.
2. The person intends to relocate its headquarters to, and employ at least 51
percent of its employees in, Wisconsin.
3. The person intends to expand its operations in Wisconsin, and that
expansion will increase the number of full-time employees employed by the person
in Wisconsin by a number that equals at least 10 percent of the person's full-time
4. The person intends to expand its operations in Wisconsin, and the person will
make a significant capital investment in property in Wisconsin as a result of that
If the corporation approves a person to transfer economic development tax
credits, that person must transfer those tax credits to another person previously
identified to the corporation if the tax credits are transferred in exchange for some
valuable consideration, other than money, in connection with the eligible business
activity for which the tax credits were awarded. The person to whom the tax credits
are transferred may carry forward any unused amount of those tax credits for up to
15 years until fully claimed.
Under the bill, if the corporation revokes a person's certification for economic
development tax credits and that person has already transferred the tax credits, that
person is liable for the full amount of the tax credits, and the person to whom the
credits were transferred may not claim any unused credits.
Under the bill, the corporation may authorize the transfer of up to $15,000,000
in economic development tax credits over three years. However, if after reaching that
three-year limit, the corporation determines that an extension of the program will
support significant economic development in Wisconsin, the corporation may
continue the program for up to an additional three years and authorize the transfer
of up to an additional $15,000,000 in economic development tax credits. However,
any such extension of the program is subject to passive review by the Joint
Committee on Finance.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
238.3045 of the statutes is created to read:
2238.3045 Transferability of tax benefits. (1) Application and corporation
(a) An applicant for certification for tax benefits under s. 238.301 may 4
submit with its application under s. 238.301 (1) an application to the corporation on 5
a form prescribed by the corporation to transfer those tax benefits to another person 6
under this section. The application shall include the name, address, and tax 7
identification number of the person to whom the applicant intends to transfer the tax
benefits and any other information the corporation requires. The corporation shall 2
notify the applicant of the corporation's determination concerning the transfer of tax 3
benefits when the corporation notifies the applicant of the corporation's certification 4
determination under s. 238.301.
(b) The corporation may approve the transfer of tax benefits under this section 6
if the corporation certifies the applicant under par. (a) for tax benefits under s. 7
238.301 and finds that the applicant meets at least one of the following conditions:
1. Is headquartered and employs at least 51 percent of its employees in this 9
2. Intends to relocate its headquarters to this state and employ at least 51 11
percent of its employees in this state.
3. Intends to expand its operations in this state, and that expansion will result 13
in an increase in the number of full-time employees employed by the applicant in 14
this state in an amount equal to at least 10 percent of the applicant's full-time 15
workforce in this state at the time of application.
4. Intends to expand its operations in this state, and that expansion will result 17
in the applicant making a significant capital investment in property located in this 18
state, as determined by the corporation.
(c) 1. Subject to subd. 2., a person that receives an approval under par. (b) shall 20
transfer tax benefits in accordance with the terms of the application under par. (a) 21
after the corporation authorizes the person to claim tax benefits under s. 238.303 (2) 22
and provides the notice of eligibility under s. 238.303 (3). The notice of eligibility 23
shall contain all relevant information concerning a transfer of tax benefits under this 24
section. The person to whom tax benefits are transferred may carry forward, 25
beginning on the date of the notice of eligibility, any unused amount of the value of
those tax benefits as provided under the appropriate provision in ch. 71 or in s. 2
2. Tax benefits may be transferred under this paragraph only in exchange for 4
some consideration, other than money, in connection with the eligible activity for 5
which the tax benefits were initially awarded.
(a) If the corporation revokes a person's certification for tax 7
benefits under s. 238.305, and, at the time of revocation, that person has transferred 8
those tax benefits under this section, that person shall be liable for the full value of 9
the tax benefits, and the person to whom the tax benefits were transferred may not 10
claim any tax benefits that were not claimed prior to revocation.
(b) The corporation shall notify the department of revenue of a revocation of tax 12
benefits subject to par. (a), including the value of the tax benefits for which the person 13
(c) The department of revenue has full power to administer tax benefits 15
transferred under this section and may take any action, conduct any proceeding, and 16
proceed as it is authorized in respect to income and franchise taxes imposed under 17
ch. 71. The income and franchise tax provisions in ch. 71 relating to assessments, 18
refunds, appeals, collection, interest, and penalties apply to tax benefits transferred 19
under this section.
20(3) Annual report.
Annually, the corporation shall submit a report to the joint 21
committee on finance that provides a detailed assessment of the progress to date of 22
the program under this section.
23(4) Program limits and termination.
(a) Except as provided in par. (b), the 24
corporation may not authorize the transfer of tax benefits under this section that 25
total more than $15,000,000, and the corporation may not authorize the transfer of
tax benefits after 36 months after the effective date of this paragraph .... [LRB inserts 2
(b) Upon expiration of the 36-month period under par. (a), the corporation may 4
continue to authorize the transfer of tax benefits under this section for up to an 5
additional 36 months, and the corporation may authorize the transfer of up to an 6
additional $15,000,000 in tax benefits, if the corporation determines that a 7
continuation of the program under this section will promote significant economic 8
development in this state. Before the corporation authorizes the transfer of tax 9
benefits under this paragraph, the chief executive officer of the corporation shall 10
notify the joint committee on finance in writing that the corporation intends to 11
continue authorizing the transfer of tax benefits under this section. That notice shall 12
state the reasons supporting the corporation's determination that the transfer of 13
additional tax benefits will promote significant economic development in this state. 14
If, within 14 working days after the date of that notice, the cochairpersons of the 15
committee do not notify the corporation that the committee has scheduled a meeting 16
to review the corporation's proposed continuation of the program, the corporation 17
may proceed to authorize the transfer of additional tax benefits under this section. 18
If, within 14 working days after the date of that notice, the cochairpersons of the 19
committee notify the corporation that the committee has scheduled a meeting to 20
review the proposed continuation of the program, the corporation may proceed to 21
authorize the transfer of additional tax benefits only upon approval of the committee.
(1) This act first applies to taxable years beginning on January 1, 2014.