SB164: Bill Text

LRB-2902/2

PG/MJL/JK/MES:kmg:pg

2001 - 2002 LEGISLATURE

2001 Senate BILL 164

April 30, 2001 - Introduced by Joint Legislative Council. Referred to Joint survey committee on Tax Exemptions.

SB164,1,8 An Act to amend 44.62 (2), 71.21 (4), 71.26 (2) (a), 71.34 (1) (g) and 77.92 (4); and to create 20.215 (1) (j), 20.220, 25.14 (1) (a) 15., 25.17 (1) (ak), 25.77, 71.07 (5) (a) 10., 71.07 (9t), 71.10 (4) (dg), 71.26 (1) (bo), 71.28 (9t), 71.30 (3) (bm), 71.47 (9t), 71.49 (1) (bm), 73.03 (35m), 73.03 (56), 77.54 (7r) and chapter 247 of the statutes; relating to: creating a Wisconsin Artistic Endowment Foundation and an artistic endowment fund, creating an income tax credit for contributions to the fund, creating a sales tax exemption for sales of tickets and admissions by nonprofit organizations, and making appropriations.

Analysis by the Legislative Reference Bureau

This bill creates the Wisconsin Artistic Endowment Foundation, a nonprofit corporation organized so that contributions to it are tax deductible. The foundation is governed by a 14-member board of directors, eight of whom are appointed by the governor. The other board members are the chairperson of the arts board, two representatives to the assembly, two senators, and the executive secretary of the arts board, who is a nonvoting member.

The bill creates a segregated fund called the "artistic endowment fund". The fund consists of all gifts or other contributions made to the fund. In addition, the bill directs the foundation to deposit in the fund all cash gifts made to the foundation and all noncash gifts made to the foundation that the foundation converts to cash. The interest and earnings of the fund are appropriated to the foundation for the purpose of supporting arts programs. The bill authorizes the foundation to distribute moneys to the arts board for programs that provide operating support to arts organizations and for the Wisconsin regranting program, under which the arts board awards grants to counties, municipalities, and local arts agencies. The foundation may also distribute moneys to arts programs that it establishes, but only if the programs are reviewed biennially by the foundation with the advice of the arts board and statewide arts organizations. Of the total amount distributed by the foundation each year, at least 50% must be distributed to the arts board; however, the bill also prohibits the foundation from distributing moneys to the arts board in any fiscal year in which the amount of general purpose revenue appropriated to the arts board is less than in the previous fiscal year.

The bill creates an individual income tax credit and a corporate income and franchise tax credit. The individual credit may also be claimed by partners of a partnership, members of limited liability companies, and shareholders of tax-option corporations in proportion to their ownership interests. The credit may not be claimed by nonresidents of this state, but may be claimed by part-year residents, based on a ratio of their Wisconsin adjusted gross income to federal adjusted gross income.

The credit may be claimed by an individual in an amount not to exceed $50 each taxable year, or $100 each taxable year by a married couple that files a joint return, or $500 each taxable year by a sole proprietor, by a partner, by a member of a limited liability company, by a shareholder in a tax-option corporation, or by a corporation.

The credit is nonrefundable so, if the amount of a credit for which a taxpayer is eligible exceeds the person's tax liability, no check is refunded to the claimant in the amount by which the credit due exceeds the taxpayer's tax liability. No claims may be filed for the credit once the department of revenue (DOR) determines that the total amount of revenues received by the endowment fund equals $50,150,000. In addition, DOR is required to deny a portion of a credit claimed if the total amount of claims exceeds $7,000,000 in a taxable year that begins after December 31, 2003.

The bill exempts from the sales tax, after December 31, 2001, sales of admissions or tickets to an artistic event sponsored by a nonprofit organization. The bill also requires DOR to include on its tax forms on which the credit may be claimed a statement that a taxpayer may contribute amounts to the artistic endowment fund that exceed the amount for which a credit may be claimed by reducing the taxpayer's refund or by increasing the taxpayer's payment for a tax liability.

This bill will be referred to the joint survey committee on tax exemptions for a detailed analysis, which will be printed as an appendix to this bill.

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:

Prefatory note: This bill, recommended by the joint legislative council's special committee on arts funding, creates an artistic endowment foundation and fund. The foundation will have a 14-member board of directors, 8 of whom are appointed by the governor. The other members are the chairperson of the Wisconsin arts board or the chairperson's designee, the executive secretary of the Wisconsin arts board as a nonvoting member, and 4 legislators representing the majority and minority parties of each house of the legislature. The members appointed by the governor will serve staggered 7-year terms.

The foundation will be financed by revenues from contributions. The bill establishes a tax credit for contributions to the foundation. The individual tax credit is $50 per taxable year (or $100 per year for a married couple filing a joint return) and the corporate tax credit is $500 per taxable year. The tax credits first apply to taxable years beginning after December 31, 2002. The revenues from contributions will be placed in an endowment fund, to be invested by the state of Wisconsin investment board. The tax credits will expire at the end of the calendar year in which total contributions to the artistic endowment fund total $50,150,000.

The earnings on the revenues placed in the endowment fund will be used to provide funding to the Wisconsin arts board for programs that provide operating support to arts organizations and regranting programs of the board. At least 50% of unrestricted earnings, if distributed by the endowment fund, must be used for this purpose.

Also, up to 50% of the unrestricted earnings will be distributed to programs established and reviewed biennially by the foundation with the advice of the Wisconsin arts board and statewide arts organizations. These programs are required, to the extent possible, to use the arts board mechanisms and staff for administering and distributing funds. The bill also provides that the foundation may not distribute funds to the arts board in any fiscal year in which the foundation determines that the amount of general purpose revenues (GPR) appropriated to the arts board programs by the legislature is less than the amount appropriated for those programs in the previous fiscal year. This is a "maintenance of effort" provision to ensure that the earnings of the endowment fund are not used to replace state appropriations to the arts board.

The bill provides $7,500 per year in GPR for start-up costs for the artistic endowment board. It also provides $150,000 GPR for the biennium for public education and marketing relating to the fund which will be repaid by taking 50% of the first $300,000 in contributions to the fund.

The bill directs the department of revenue to include on the forms on which the artistic endowment tax credits are claimed that a taxpayer may contribute amounts to the Wisconsin artistic endowment fund that exceed the amount for which a credit may be claimed by reducing the taxpayer's refund or increasing his or her payment for tax liability with proceeds deposited in the fund.

The bill also establishes a sales tax exemption for sales of tickets and admissions to artistic events sponsored by nonprofit organizations. The tax exemption will take effect on January 1, 2002.

SB164, s. 1 Section 1. 20.005 (3) (schedule) of the statutes: at the appropriate places, insert the following amounts for the purposes indicated: - See PDF for table

SB164, s. 2 Section 2. 20.215 (1) (j) of the statutes is created to read:

SB164,4,5 20.215 (1) (j) Support of arts programs. All moneys received from the Wisconsin Artistic Endowment Foundation under s. 247.06 (1) (a) for operating support of arts organizations and for grants under the Wisconsin regranting program under s. 44.62.

SB164, s. 3 Section 3. 20.220 of the statutes is created to read:

SB164,4,9 20.220 Wisconsin Artistic Endowment Foundation. There is appropriated to the Wisconsin Artistic Endowment Foundation for the following programs:

SB164,4,13 (1) Support of the arts. (a) Wisconsin artistic endowment board; start-up costs. The amounts in the schedule for the start-up costs of the Wisconsin artistic endowment board. No moneys may be encumbered from this appropriation after June 30, 2003.

SB164,4,16 (b) Education and marketing. As a continuing appropriation, the amounts in the schedule for public education and marketing relating to the Wisconsin artistic endowment fund.

SB164,5,2 (q) General program operations. From the artistic endowment fund, the amounts in the schedule for general program operations of the foundation.

SB164,5,6 (r) Support of the arts. From the artistic endowment fund, as a continuing appropriation, all moneys received as interest and earnings of the artistic endowment fund, less the amounts appropriated in par. (q), for support of the arts under s. 247.06.

SB164, s. 4 Section 4. 25.14 (1) (a) 15. of the statutes is created to read:

SB164,5,8 25.14 (1) (a) 15. The artistic endowment fund.

SB164, s. 5 Section 5. 25.17 (1) (ak) of the statutes is created to read:

SB164,5,10 25.17 (1) (ak) Artistic endowment fund (s. 25.77);

SB164, s. 6 Section 6. 25.77 of the statutes is created to read:

SB164,5,14 25.77 Artistic endowment fund. (1) There is established a separate nonlapsible trust fund designated as the artistic endowment fund, to consist of all of the following:

SB164,5,16 (a) All gifts, grants, bequests, or other contributions made to the artistic endowment fund.

SB164,5,18 (b) All gifts, grants, bequests, or other contributions made to the Wisconsin Artistic Endowment Foundation and described under s. 247.05 (2) (f).

SB164,5,21 (2) Notwithstanding sub. (1), only 50% of the first $300,000 of any gifts, grants, bequests, or other contributions received under sub. (1) shall be deposited in the artistic endowment fund.

SB164, s. 7 Section 7. 44.62 (2) of the statutes is amended to read:

SB164,5,25 44.62 (2) Subject to sub. (3), the board shall award grants under the Wisconsin regranting program to local arts agencies and municipalities. Grants shall be awarded from the appropriation appropriations under s. 20.215 (1) (f) and (j).

SB164, s. 8 Section 8. 71.07 (5) (a) 10. of the statutes is created to read:

SB164,6,2 71.07 (5) (a) 10. Any amount claimed as a credit under sub. (9t).

SB164, s. 9 Section 9. 71.07 (9t) of the statutes is created to read:

SB164,6,5 71.07 (9t) Artistic endowment credit. (a) Definition. In this subsection, "claimant" means a person who files a claim under this subsection.

SB164,6,15 (b) Filing claims. For taxable years beginning after December 31, 2002, subject to the limitations provided in this subsection and s. 73.03 (35m), a claimant may claim as a credit against the tax imposed under s. 71.02, up to the amount of those taxes, an amount equal to the amount contributed to the artistic endowment fund under s. 25.77, not to exceed $50 in a taxable year for a claimant who claims the credit as an individual or claims the credit as a married person who files a separate income tax return, not to exceed $100 in a taxable year for a claimant and a claimant's spouse who file a joint return, and not to exceed $500 in a taxable year for a claimant who claims the credit as a sole proprietor, a partner, a member of a limited liability company, or a shareholder in a tax-option corporation.