AB1177: Bill Text

AB1177, s. 13 Section 13. 71.28 (2r) of the statutes is created to read:

AB1177,12,3 71.28 (2r) Venture capital investment credits. (a) Definitions. In this subsection:

AB1177,12,4 1. "Broker-dealer" has the meaning given in s. 551.02 (3).

AB1177,12,5 2. "Claimant" means a person who files a claim under this subsection.

AB1177,12,6 3. "Fund manager" has the meaning given in s. 560.20 (1) (e).

AB1177,12,12 (b) Filing claims. For taxable years beginning on or after January 1, 2006, for amounts claimed under subd. 2., and beginning on or after January 1, 2007, for amounts claimed under subds. 1., 3., and 4., subject to the limitations provided under this subsection and ss. 73.03 (35p) and 560.20, a claimant may claim as a credit against the tax imposed under s. 71.23, up to the amount of those taxes, any of the following amounts:

AB1177,12,16 1. In each taxable year for 6 years, beginning with the taxable year in which the claimant's initial investment is made, 10 percent of the claimant's initial investment paid to a fund manager that the fund manager invests, as an early stage seed investment, in a business certified under s. 560.20 (2) (b).

AB1177,12,20 2. In each taxable year for 4 years, beginning with the taxable year in which the claimants initial investment is made, 15 percent of the claimant's initial investment that the claimant invests, as an angel investment, in a business certified under s. 560.20 (2) (e).

AB1177,12,24 3. In each taxable year for 6 years, beginning with the taxable year in which the claimant's initial investment is made, 7 percent of the claimant's initial investment paid to a fund manager that the fund manager invests, as a venture growth investment, in a business certified under s. 560.20 (2) (c).

AB1177,13,5 4. In each taxable year for 6 years, beginning with the taxable year in which the claimant's initial investment is made, 10 percent of the claimant's initial investment paid to a fund manager that the fund manager invests, as a women-, minority-, and community-based investment, in a business certified under s. 560.20 (2) (d).

AB1177,13,11 (bm) Filing claims; broker-dealer and finder. For taxable years beginning on or after January 1, 2006, subject to the limitations provided under this subsection and s. 560.20, a claimant who is a broker-dealer or a finder may claim as a credit against the tax imposed under s. 71.23, up to the amount of those taxes, an amount equal to 10 percent of the first $500,000 raised in the taxable year in an offering of a business certified under s. 560.20 (2) (b).

AB1177,13,14 (c) Limitations. 1. a. The maximum amount of the credits that may be claimed under par. (b) 1. and ss. 71.07 (2r) (b) 1. and 71.47 (2r) (b) 1. for all taxable years combined is $70,000,000.

AB1177,13,17 b. The maximum amount of the credits that may be claimed under par. (b) 2. and ss. 71.07 (2r) (b) 2. and 71.47 (2r) (b) 2. for all taxable years combined is $25,000,000.

AB1177,13,20 c. The maximum amount of the credits that may be claimed under par. (b) 3. and ss. 71.07 (2r) (b) 3. and 71.47 (2r) (b) 3. for all taxable years combined is $42,000,000.

AB1177,13,23 d. The maximum amount of the credits that may be claimed under par. (b) 4. and ss. 71.07 (2r) (b) 4. and 71.47 (2r) (b) 4. for all taxable years combined is $10,000,000.

AB1177,13,25 e. The maximum amount of the credit that may be claimed under par. (bm) and ss. 71.07 (2r) (bm) and 71.47 (2r) (bm) for all taxable years combined is $3,000,000.

AB1177,14,8 2. Partnerships, limited liability companies, and tax-option corporations may not claim the credit under par. (b), but the eligibility for, and the amount of, the credit are based on their payment of amounts 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 interest or as specially allocated in their organizational documents.

AB1177,14,10 (d) Administration. 1. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

AB1177,14,14 2. A claimant may sell a credit under this subsection to another person who is subject to the taxes imposed under this subchapter, if the claimant notifies the department of the sale and includes with the notification a copy of the transfer documents.

AB1177, s. 14 Section 14. 71.28 (2s) of the statutes is created to read:

AB1177,14,18 71.28 (2s) Tribal gaming compact credit. (a) Definition. In this subsection, "claimant" means a Native American tribe that is located in this state, has entered into a gaming compact with this state, and files a claim under this subsection.

AB1177,14,23 (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2005, a claimant may claim as a credit against the tax imposed under s. 71.23, up to the amount of the taxes, an amount equal to the amount the claimant paid in the taxable year to the state pursuant to a gaming compact, not to exceed $10,000,000 in any taxable year.

AB1177,15,3 (c) Limitations. 1. No credit may be allowed under this subsection unless the claimant, in the taxable year, invests in a business this is certified to receive investments under s. 560.20 (2).

AB1177,15,5 2. No credit may be allowed under this subsection unless the claimant submits with the claimant's return proof of the investment described under subd. 1.

AB1177,15,8 3. The maximum amount of the credit that may be awarded under this subsection and ss. 71.07 (2s) and 71.47 (2s) for all claimants in each taxable year may not exceed $100,000,000.

AB1177,15,16 4. 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 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.

AB1177,15,18 (d) Administration. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

AB1177, s. 15 Section 15. 71.30 (3) (eor) of the statutes is created to read:

AB1177,15,20 71.30 (3) (eor) Venture capital investment credits under s. 71.28 (2r).

AB1177, s. 16 Section 16. 71.30 (3) (eos) of the statutes is created to read:

AB1177,15,22 71.30 (3) (eos) Tribal gaming compact credit under s. 71.28 (2s).

AB1177, s. 17 Section 17. 71.34 (1) (g) of the statutes is amended to read:

AB1177,16,3 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), (2r), (2s), (3), (3g), (3n), (3t), and (5b) and passed through to shareholders.

AB1177, s. 18 Section 18. 71.45 (2) (a) 10. of the statutes is amended to read:

AB1177,16,10 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit computed under s. 71.47 (1dd) to (1dx), (2r), (2s), (3n), 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).

AB1177, s. 19 Section 19. 71.47 (2r) of the statutes is created to read:

AB1177,16,13 71.47 (2r) Venture capital investment credits. (a) Definitions. In this subsection:

AB1177,16,14 1. "Broker-dealer" has the meaning given in s. 551.02 (3).

AB1177,16,15 2. "Claimant" means a person who files a claim under this subsection.

AB1177,16,16 3. "Fund manager" has the meaning given in s. 560.20 (1) (e).

AB1177,16,22 (b) Filing claims. For taxable years beginning on or after January 1, 2006, for amounts claimed under subd. 2., and beginning on or after January 1, 2007, for amounts claimed under subds. 1., 3., and 4., subject to the limitations provided under this subsection and ss. 73.03 (35p) and 560.20, a claimant may claim as a credit against the tax imposed under s. 71.43, up to the amount of those taxes, any of the following amounts:

AB1177,17,2 1. In each taxable year for 6 years, beginning with the taxable year in which the claimant's initial investment is made, 10 percent of the claimant's initial investment paid to a fund manager that the fund manager invests, as an early stage seed investment, in a business certified under s. 560.20 (2) (b).

AB1177,17,6 2. In each taxable year for 4 years, beginning with the taxable year in which the claimant's initial investment is made, 15 percent of the claimant's initial investment that the claimant invests, as an angel investment, in a business certified under s. 560.20 (2) (e).

AB1177,17,10 3. In each taxable year for 6 years, beginning with the taxable year in which the claimant's initial investment is made, 7 percent of the claimant's initial investment paid to a fund manager that the fund manager invests, as a venture growth investment, in a business certified under s. 560.20 (2) (c).

AB1177,17,15 4. In each taxable year for 6 years, beginning with the taxable year in which the claimant's initial investment is made, 10 percent of the claimant's initial investment paid to a fund manager that the fund manager invests, as a women-, minority-, and community-based investment, in a business certified under s. 560.20 (2) (d).

AB1177,17,21 (bm) Filing claims; broker-dealer and finder. For taxable years beginning on or after January 1, 2006, subject to the limitations provided under this subsection and s. 560.20, a claimant who is a broker-dealer or a finder may claim as a credit against the tax imposed under s. 71.43, up to the amount of those taxes, an amount equal to 10 percent of the first $500,000 raised in the taxable year in an offering of a business certified under s. 560.20 (2) (b).

AB1177,17,24 (c) Limitations. 1. a. The maximum amount of the credits that may be claimed under par. (b) 1. and ss. 71.07 (2r) (b) 1. and 71.28 (2r) (b) 1. for all taxable years combined is $70,000,000.

AB1177,18,3 b. The maximum amount of the credits that may be claimed under par. (b) 2. and ss. 71.07 (2r) (b) 2. and 71.28 (2r) (b) 2. for all taxable years combined is $25,000,000.

AB1177,18,6 c. The maximum amount of the credits that may be claimed under par. (b) 3. and ss. 71.07 (2r) (b) 3. and 71.28 (2r) (b) 3. for all taxable years combined is $42,000,000.

AB1177,18,9 d. The maximum amount of the credits that may be claimed under par. (b) 4. and ss. 71.07 (2r) (b) 4. and 71.28 (2r) (b) 4. for all taxable years combined is $10,000,000.

AB1177,18,11 e. The maximum amount of the credit that may be claimed under par. (bm) and ss. 71.07 (2r) (bm) and 71.28 (2r) (bm) for all taxable years combined is $3,000,000.

AB1177,18,19 2. Partnerships, limited liability companies, and tax-option corporations may not claim the credit under par. (b), but the eligibility for, and the amount of, the credit are based on their payment of amounts 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 interest or as specially allocated in their organizational documents.

AB1177,18,21 (d) Administration. 1. 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.

AB1177,18,25 2. A claimant may sell a credit under this subsection to another person who is subject to the taxes imposed under this subchapter, if the claimant notifies the department of the sale and includes with the notification a copy of the transfer documents.

AB1177, s. 20 Section 20. 71.47 (2s) of the statutes is created to read:

AB1177,19,4 71.47 (2s) Tribal gaming compact credit. (a) Definition. In this subsection, "claimant" means a Native American tribe that is located in this state, has entered into a gaming compact with this state, and files a claim under this subsection.

AB1177,19,9 (b) Filing claims. Subject to the limitations provided in this subsection, for taxable years beginning after December 31, 2005, a claimant may claim as a credit against the tax imposed under s. 71.43, up to the amount of the taxes, an amount equal to the amount the claimant paid in the taxable year to the state pursuant to a gaming compact, not to exceed $10,000,000 in any taxable year.

AB1177,19,12 (c) Limitations. 1. No credit may be allowed under this subsection unless the claimant, in the taxable year, invests in a business this is certified to receive investments under s. 560.20 (2).

AB1177,19,14 2. No credit may be allowed under this subsection unless the claimant submits with the claimant's return proof of the investment described under subd. 1.

AB1177,19,17 3. The maximum amount of the credit that may be awarded under this subsection and ss. 71.07 (2s) and 71.28 (2s) for all claimants in each taxable year may not exceed $100,000,000.

AB1177,19,25 4. 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 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.

AB1177,20,2 (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.

AB1177, s. 21 Section 21. 71.49 (1) (eor) of the statutes is created to read:

AB1177,20,4 71.49 (1) (eor) Venture capital investment credits under s. 71.47 (2r).

AB1177, s. 22 Section 22. 71.49 (1) (eos) of the statutes is created to read:

AB1177,20,6 71.49 (1) (eos) Tribal gaming compact credit under s. 71.47 (2s).

AB1177, s. 23 Section 23. 73.03 (35p) of the statutes is created to read:

AB1177,20,11 73.03 (35p) To deny a portion of any credit claimed under s. 71.07 (2r) (b) or (2s) (b), 71.28 (2r) (b) or (2s) (b), or 71.47 (2r) (b) or (2s) (b), if granting the full amount claimed would violate a limitation specified under s. 71.07 (2r) (c) 1. or (2s) (b) or (c) 3., 71.28 (2r) (c) 1. or (2s) (b) or (c) 3., or 71.47 (2r) (c) 1. or (2s) (b) or (c) 3.

AB1177, s. 24 Section 24. 77.92 (4) of the statutes is amended to read:

AB1177,21,2 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), (2r), (2s), (3g), (3s), (3n), (3t), 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.

AB1177, s. 25 Section 25. 560.20 of the statutes is created to read:

AB1177,21,5 560.20 Venture capital investment program. (1) Definitions. In this section:

AB1177,21,6 (a) "Angel investor" means any of the following:

AB1177,21,8 1. An individual who reviews new businesses or proposed new businesses for potential investment of the individual's money.

AB1177,21,9 2. A network of individuals who satisfy subd. 1.

AB1177,21,10 (b) "Board" means the Wisconsin economic leadership board.

AB1177,21,12 (c) "Capital investment corporation or partnership" means the corporation or partnership selected under sub. (1m).

AB1177,21,15 (e) "Fund manager" means a person who is selected by and under contract with the capital investment corporation or partnership to manage investment funds established by the capital investment corporation or partnership.

AB1177,21,19 (f) "Native American business" means a business that is owned or operated by a member of a federally recognized American Indian tribe or band in this state or that is located within the boundaries of a federally recognized American Indian reservation in this state.

AB1177,22,2 (1m) Selection of capital investment corporation or partnership. No later than the first day of the 2nd month beginning after the effective date of this subsection .... [revisor inserts date], the board shall select a corporation organized under ch. 180 or a partnership organized under ch. 179 to perform the duties of a capital investment corporation or partnership as specified under this section. The board shall select a corporation or partnership that satisfies, or, if applicable, makes a commitment to satisfy, all of the following:

AB1177,22,9 (a) The corporation or partnership establishes investment funds that are managed by fund managers, whose fees do not exceed an amount equal to 2.5 percent of the total assets in the applicable fund, annually. The funds shall include at least one fund that makes early stage seed investments in Native American businesses that are certified by the board under sub. (2) (b) and at least one fund that makes venture growth investments in Native American businesses that are certified by the board under sub. (2) (c).

AB1177,22,12 (b) The purposes of the corporation or partnership include coordinating and facilitating investments in investment funds described in par. (a) and investments by fund managers in businesses as described in sub. (2) (b) to (d).

AB1177,22,16 (c) The corporation or partnership is required, under its articles of incorporation, to monitor, analyze, and report to the board information requested by the board concerning the performance of fund managers and the economic impact, if any, the investments made by those fund managers have had on this state.

AB1177,22,18 (d) The corporation or partnership, either directly or through a subsidiary, seeks out and provides assistance to businesses described in sub. (2) (b).

AB1177,22,20 (e) The corporation or partnership works with businesses certified under sub. (2) and fund managers to assist in expanding the businesses.

AB1177,22,23 (f) The corporation or partnership establishes measurable standards for its fund managers and holds the fund managers accountable for meeting those standards.

AB1177,23,3 (g) The corporation or partnership coordinates and oversees a group of economic advisors to measure the economic impact, if any, that investments made by fund managers have had on this state.

AB1177,23,6 (h) The corporation or partnership coordinates and disseminates an economic media message to promote the purposes of this paragraph under this section, as determined by the board.

AB1177,23,9 (i) The corporation or partnership utilizes information technology to administer a management information system that tracks the business activities of the corporation or partnership and the investments made by fund managers.