Amendment ASA1-AB531

LRBs0231/5

RJM&JK:kjf&wlj:rs

2003 - 2004 LEGISLATURE

ASSEMBLY SUBSTITUTE AMENDMENT 1, TO 2003 ASSEMBLY BILL 531

November 12, 2003 - Offered by Joint Committee on Finance.

AB531-ASA1,2,10 An Act to repeal 560.30 (10) (c) and 560.37 (3m) (a) 1.; to renumber 560.32 (2) (c); to renumber and amend 76.635 (2), 560.30 (9), 560.31 (1), 560.32 (2) (b), 560.32 (3), 560.33 (1) (b), 560.33 (2), 560.34 (1) (d), 560.34 (1m) (a) 2., 560.34 (2), 560.36 (intro.) and 560.36 (1) to (4); to consolidate, renumber and amend 560.37 (3m) (a) (intro.) and 2.; to amend 71.05 (6) (a) 15., 71.21 (4), 71.26 (2) (a), 71.34 (1) (g), 71.45 (2) (a) 10., 77.92 (4), subchapter II (title) of chapter [precedes 560.30], 560.30 (3), 560.30 (10) (intro.), 560.30 (10) (a), 560.30 (10) (b), 560.30 (10) (d), 560.31 (2) (intro.), 560.31 (2) (b), 560.32 (2) (d), 560.33 (1) (intro.), 560.33 (1) (a), 560.33 (1) (e), 560.33 (1) (g), 560.34 (1) (intro.), 560.34 (1) (a) 1., 560.34 (1) (a) 2. a., 560.34 (1) (a) 2. b., 560.34 (1) (b), 560.34 (1) (c), 560.34 (1) (e), 560.34 (1m) (b), 560.34 (4), 560.35 (2) (intro.), 560.35 (2) (a), 560.35 (2) (c), 560.35 (3), 560.37 (4) and 560.37 (5); and to create 71.07 (7m), 71.10 (4) (cp), 71.28 (7m), 71.30 (3) (dm), 71.47 (7), 71.47 (7m), 71.49 (1) (dm), 71.49 (1) (dn), 76.635 (2) (b), 560.30 (5g), 560.30 (5r), 560.30 (9) (d), 560.30 (10) (e), 560.31 (2) (g), 560.31 (2) (h), 560.31 (2) (i), 560.31 (2) (j), 560.31 (2) (k), 560.32 (2) (b) 2., 560.32 (2) (c) 2., 560.32 (3) (b), 560.33 (1) (b) 2., 560.33 (1) (h), 560.33 (1) (i), 560.33 (1) (j), 560.33 (1) (k), 560.33 (2) (b) and (c), 560.34 (1) (d) 2., 560.34 (1) (f), 560.34 (1e), 560.34 (1g), 560.34 (1m) (a) 2. b., 560.34 (2) (a) to (k), 560.34 (5), 560.35 (1c), 560.35 (1r), 560.35 (2) (d), 560.36 (2m) and 560.37 (1m) of the statutes; relating to: certified capital companies, creating a certified capital company income and franchise tax credit, requesting a performance audit, providing an exemption from emergency rule procedures, and requiring the exercise of rule-making authority.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB531-ASA1, s. 1 Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:

AB531-ASA1,2,16 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), and (3s), 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, company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1) (g).

AB531-ASA1, s. 2 Section 2. 71.07 (7m) of the statutes is created to read:

AB531-ASA1,2,18 71.07 (7m) Certified capital company credit. (a) In this subsection:

AB531-ASA1,2,19 1. "Certified capital company" has the meaning given in s. 560.30 (2).

AB531-ASA1,2,20 2. "Certified capital investment" has the meaning given in s. 560.30 (4).

AB531-ASA1,3,2 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-ASA1,3,3 4. "Investment date" has the meaning given in s. 560.30 (6).

AB531-ASA1,3,4 5. "Investment pool" has the meaning given in s. 560.30 (7).

AB531-ASA1,3,5 6. "Qualified investment" has the meaning given in s. 560.30 (11).

AB531-ASA1,3,14 (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 ss. 71.02 and 71.08, 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-ASA1,3,16 (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-ASA1,3,24 (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-ASA1,4,6 (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-ASA1,4,16 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. 3 Section 3. 71.10 (4) (cp) of the statutes is created to read:

AB531-ASA1,4,18 71.10 (4) (cp) The certified capital company credit under s. 71.07 (7m).

AB531-ASA1, s. 4 Section 4. 71.21 (4) of the statutes is amended to read:

AB531-ASA1,4,22 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2ds), (2dx), (3g), and (3s) , and (7m) and passed through to partners shall be added to the partnership's income.

AB531-ASA1, s. 5 Section 5. 71.26 (2) (a) of the statutes is amended to read:

AB531-ASA1,5,13 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) plus the amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), and (3g), 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) 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).

AB531-ASA1, s. 6 Section 6. 71.28 (7m) of the statutes is created to read:

AB531-ASA1,5,15 71.28 (7m) Certified capital company credit. (a) In this subsection:

AB531-ASA1,5,16 1. "Certified capital company" has the meaning given in s. 560.30 (2).

AB531-ASA1,5,17 2. "Certified capital investment" has the meaning given in s. 560.30 (4).

AB531-ASA1,5,21 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-ASA1,5,22 4. "Investment date" has the meaning given in s. 560.30 (6).

AB531-ASA1,5,23 5. "Investment pool" has the meaning given in s. 560.30 (7).

AB531-ASA1,5,24 6. "Qualified investment" has the meaning given in s. 560.30 (11).

AB531-ASA1,6,8 (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. 71.23, 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-ASA1,6,10 (c) Subsection (4) (e), (f), (g), and (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

AB531-ASA1,6,18 (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-ASA1,6,24 (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.