Analysis by the Legislative Reference Bureau
This bill creates an income tax and franchise tax credit for businesses that pay
tuition for an individual to attend a university, college, or technical college. Sole
proprietorships, corporations, and insurers may claim the credit. Partnerships,
limited liability companies, and tax-option corporations compute the credit but pass
it on to the partners, members, and shareholders in proportion to their ownership
interests. The credit is an amount equal to: 1) 25 percent of the tuition paid by a
business for an individual to attend school, if the individual is enrolled in a course
of instruction and is eligible for a grant from the Federal Pell Grant Program; and
2) 30 percent of the tuition paid by a business for an individual to attend school, if
the individual is enrolled in a course of instruction that relates to a projected worker
shortage in this state and is eligible for a grant from the Federal Pell Grant Program.
The taxpayer claims the total amount of the tuition paid for the individual for the
taxable year in which the individual graduates from the course of instruction. If the
credit claimed by a business exceeds the business's tax liability, the state will not
issue a refund check, but the business may carry forward any remaining credit to
subsequent taxable years.
Under current law, an individual may claim an income tax credit in each
taxable year for two years, beginning with the taxable year certified by the
Department of Commerce (Commerce), in an amount equal to 12.5 percent of the
individual's bona fide angel investment in a new business venture. The total amount
of all bona fide angel investment credits that may be claimed in a calendar year
beginning after 2007 but before 2011 is $5,500,000 and the total amount that may
be claimed in any calendar year beginning after 2010 is $18,000,000. Under the bill,
the total amount of all bona fide angel investment credits that may be claimed in
2010 is $6,500,000, and the total amount that may be claimed in a calendar year
beginning after 2010 is $20,000,000.
Under current law, a taxpayer may claim an early stage seed investment tax
credit for 25 percent of the amount that the taxpayer pays to a fund manager that
the fund manager invests with certain businesses that are certified by Commerce to
receive investments. The total amount of all early stage seed investment credits that
may be claimed in a calendar year beginning after 2007 but before 2011 is $6,000,000
and the total amount that may be claimed in any calendar year beginning after 2010
is $18,500,000. Under the bill, the total amount of all early stage seed investment
credits that may be claimed in 2010 is $8,000,000, and the total amount that may be
claimed in any calendar year beginning after 2010 is $20,500,000
The bill directs the Board of Regents of the University of Wisconsin (UW)
System to award to the WiSys Technology Foundation, Inc. (foundation), grants for
the Wisconsin Small Company Advancement program to provide intellectual
property management services to UW System two-year and four-year schools, other
than the UW-Madison and the UW-Milwaukee. Each grant must be for $250,000,
but the Board of Regents may award a grant only if the foundation shows that it has
secured matching funds for the program from sources other than the state. The bill
provides for a maximum number of eight grants.
The bill appropriates $125,000 annually to the Board of Regents of the UW
System to support a business plan competition program existing on the effective date
of bill at two-year and four-year schools, except for the UW-Madison, that makes
entrepreneurial expertise available to students and that has ties to campus-based
business plan contests and national organizations that foster student
entrepreneurism. The bill also appropriates $400,000 during the 2009-11 fiscal
biennium to the Board of Regents to develop an emerging technology center at the
UW-La Crosse. The bill prohibits the Board of Regents from spending moneys under
either appropriation unless it receives matching funds from private contributions.
Beginning in the 2010-11 school year, the bill requires the Technical College
System Board (system board) to award at least $1,500,000 annually to technical
college district boards for advanced manufacturing skills training. Under current
law, the system board must award at least $1,000,000 annually for such training,
with the same priority. The bill authorizes Commerce to award grants in the 2009-11
fiscal biennium to businesses for outsourcing work to rural municipalities in this
state. Grants under the bill are funded by repayments of grants and loans under a
number of economic development programs. Under the bill, Commerce must require
grantees to obtain funding from sources other than the state in an amount at least
equal to the amount of the grant. The total amount of grants awarded under the bill
may not exceed $500,000.
Under current law, Commerce assists in maintaining a high-technology
business development corporation, for promoting and supporting the creation,
development, and retention of science-based and technology-based businesses in
the state.
The bill requires Commerce to award to the corporation an annual grant of
$100,000 for employing a grant writer to assist businesses to apply for certain federal
small business grants, beginning in fiscal year 2010-11. The bill also requires
Commerce to award the corporation a one-time grant of $100,000 in fiscal year
2010-11 for an economic modeling database for use by regional economic
development entities. The bill increases a current appropriation of general purpose
revenue to Commerce by $200,000 in fiscal year 2010-11 to fund the grants.
The Wisconsin Development Fund (development fund) is a biennial
appropriation of general purpose revenues to Commerce. Currently, the
development fund provides moneys for grants to Center for Advanced Technology
and Innovation; for technology commercialization grants and loans; for grants and
loans to support capital financing, worker training, entrepreneurial development,
and other economic development projects; and for reimbursements under the
Wisconsin trade project program.
The bill increases the appropriation by $3,000,000 for the 2009-11 fiscal
biennium. The bill also requires Commerce to award grants from the development
fund in fiscal year 2010-11 to businesses for converting existing unutilized or
underutilized manufacturing facilities to the production of renewable energy or the
manufacturing of equipment used in the production of renewable energy. The total
amount of grants awarded may not exceed $2,000,000.
This bill also establishes a technology transfer grant and loan program in
Commerce. Under the program, Commerce may award a grant or loan of up to
$100,000 to a research institution to pay for research and development activities that
will result in the creation or retention of jobs in this state or that will improve the
competitive position of a business in this state by improving the innovativeness of
the business. The bill defines a "research institution" as any of the following located
in this state: an accredited college; university; school of medicine, dentistry,
veterinary medicine, medicine and public health, public health, or health
professionals; a center for health sciences; or a hospital in which research is
conducted. Grants and loans under the program are funded from existing economic
development programs, including the Forward Innovation Fund and the
development fund.
The bill directs Commerce to establish a pilot program of making loans of not
more than $25,000 at nominal interest rates for the creation of new businesses.
Under the bill, Commerce must designate two areas of the state, one urban and one
rural, that are affected by high unemployment and must make the loans only to
residents of the areas. Commerce must partner with federal, state, regional, and
local economic development entities to provide business training for applicants and
borrowers. The bill appropriates $500,000 to Commerce in fiscal 2010-11 for the
loans. Commerce may not make loans under the program after July 31, 2013.
Current law requires Commerce to award a $70,000 grant to Pleasant Prairie
Technology Incubator Center no later than July 31, 2011. The bill requires
Commerce to award the grant no later than 30 days after the effective date of the bill.
In addition, the bill increases funding for Commerce by $75,000 in fiscal
2010-11 in order to fund a position for Commerce's Regulatory Ombudsman Center.
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:
AB641, s. 1
1Section
1. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert
2the following amounts for the purposes indicated:
-
See PDF for table AB641,5,123
20.143
(1) (c)
Wisconsin development fund; grants, loans, reimbursements, and
4assistance. Biennially, the amounts in the schedule for grants under s. 560.145; for
5grants and loans under
s. ss. 560.275 (2)
and 560.276 and
under subch. V of ch. 560;
6for reimbursements under s. 560.167; for the costs specified in s. 560.607; for
loans
7under s. 560.203 and the loan under
1999 Wisconsin Act 9, section
9110 (4); and for
8the grants under
1995 Wisconsin Act 27, section
9116 (7gg),
1995 Wisconsin Act 119,
9section
2 (1),
1997 Wisconsin Act 27, section
9110 (6g),
2003 Wisconsin Act 33, section
109109 (1d) and (2q),
2007 Wisconsin Act 20, section
9108 (4u), (6c), (7c), (7f), (8c), (8i),
11(9i), and (10q),
2009 Wisconsin Act 2, section
9110 (2) and (3), and
2009 Wisconsin
12Act 28, section
9110 (17q).
AB641, s. 3
13Section
3. 20.143 (1) (d) of the statutes is amended to read:
AB641,5,1614
20.143
(1) (d)
High-technology business development corporation. The
15amounts in the schedule for the grants specified in s. 560.27 (1) (b)
and (c) and (3)
,
16and for the grant under 2009 Wisconsin Act .... (this act), section 36 (2
).
AB641,6,3
120.143
(1) (fi)
Forward innovation fund; grants and loans. Biennially, the
2amounts in the schedule for grants and loans under
s. 560.276 and under subch. II
3of ch. 560.
AB641,6,196
20.143
(1) (ie)
Wisconsin development fund, repayments. All moneys received
7in repayment of grants or loans under s. 560.085 (4) (b), 1985 stats., s. 560.10, 2005
8stats., s. 560.147, 2005 stats., s. 560.16, 1995 stats., s. 560.165, 1993 stats., s. 560.275
9(2), s. 560.62, 2005 stats., s. 560.63, 2005 stats., s. 560.66, 2005 stats., ss. 560.145,
10560.157, and 560.45, subch. V of ch. 560,
1989 Wisconsin Act 336, section
3015 (1m),
111989 Wisconsin Act 336, section
3015 (2m),
1989 Wisconsin Act 336, section
3015
12(3gx),
1997 Wisconsin Act 27, section
9110 (7f),
1997 Wisconsin Act 310, section
2
13(2d),
1999 Wisconsin Act 9, section
9110 (4), and
2007 Wisconsin Act 20, section
9108
14(5x), not appropriated under par. (gv) to be used for grants and loans under
s. ss. 15560.275 (2),
s. 560.276, and 560.45
, and subch. V of ch. 560, for the loan under
1999
16Wisconsin Act 9, section
9110 (4), for the grant under
2001 Wisconsin Act 16, section
179110 (7g), for the grants under
2003 Wisconsin Act 33, section
9109 (1d) and (2q),
for
18grants under 2009 Wisconsin Act .... (this act), section 36 (1
), for the study under
2009
19Wisconsin Act 28, section
9110 (15u), and for reimbursements under s. 560.167.
AB641,7,222
20.143
(1) (ig)
Gaming economic development and diversification; repayments. 23Biennially, the amounts in the schedule for grants and loans under s. 560.138, for
24grants under
s. 2009 Wisconsin Act .... (this act), section 36 (1), and under ss. 560.276
25and 560.45, and for the study under
2009 Wisconsin Act 28, section
9110 (15u). All
1moneys received in repayment of loans under ss. 560.137 (2), 2005 stats., and 560.138
2shall be credited to this appropriation account.
AB641,7,105
20.143
(1) (im)
Minority business projects; repayments. All moneys received on
6or before June 30, 2009, in repayment of grants or loans under s. 560.82 (1m) (b), 2007
7stats., and s. 560.82 (1m) (c), 2007 stats., and loans under
1997 Wisconsin Act 9,
8section
3, to be used for grants and loans under s. 560.45 and subch. II of ch. 560
, for
9grants under 2009 Wisconsin Act .... (this act), section 36 (1
), and for the study under
102009 Wisconsin Act 28, section
9110 (15u).
AB641,7,1713
20.143
(1) (io)
Grant and loan repayments; forward innovation fund. All
14moneys received in repayment of grants or loans under subch. II of ch. 560, grants
15or loans under s. 560.82 (1m) (b) and (c), 2007 stats., and loans under
1997 Wisconsin
16Act 9, section
3, to be used for grants and loans under
s. 560.276 and under subch.
17II of ch. 560.
AB641,7,2320
20.143
(1) (ir)
Rural economic development loan repayments. All moneys
21received in repayment of loans under s. 560.17, to be used for grants and loans under
22ss. 560.17 and 560.45
, for grants under 2009 Wisconsin Act .... (this act), section 36
23(1), and for the study under
2009 Wisconsin Act 28, section
9110 (15u).
AB641,8,9
120.143
(1) (kj)
Gaming economic development and diversification; grants and
2loans. Biennially, the amounts in the schedule for grants and loans under
s. ss. 3560.138
and 560.276, for the grants under s. 560.139 (1) (a), and for the grants under
42001 Wisconsin Act 16, section
9110 (2k), (11pk), and (11zx), and
2009 Wisconsin Act
528, section
9110 (16i). All moneys transferred from the appropriation account under
6s. 20.505 (8) (hm) 6j. shall be credited to this appropriation account.
7Notwithstanding s. 20.001 (3) (b), the unencumbered balance on June 30 of each
8odd-numbered year shall revert to the appropriation account under s. 20.505 (8)
9(hm).
AB641, s. 11
10Section
11. 20.285 (1) (cd) of the statutes is created to read:
AB641,8,1311
20.285
(1) (cd)
WiSys Technology Foundation grants. A sum sufficient not to
12exceed $2,000,000 for grants to the WiSys Technology Foundation, Inc., under s.
1336.25 (52) (b).
AB641, s. 12
14Section
12. 20.285 (1) (eb) of the statutes is created to read:
AB641,8,1615
20.285
(1) (eb)
Business plan competition. The amounts in the schedule to
16support a business plan competition program under s. 36.25 (53).
AB641, s. 13
17Section
13. 20.285 (1) (eg) of the statutes is created to read:
AB641,8,2018
20.285
(1) (eg)
Emerging technology center. Biennially, the amounts in the
19schedule to develop a business plan for an emerging technology center under s. 36.25
20(54).
AB641, s. 14
21Section
14. 20.285 (1) (eg) of the statutes, as created by 2009 Wisconsin Act
22.... (this act), is repealed.
AB641, s. 15
23Section
15. 36.25 (52) of the statutes is created to read:
AB641,8,2524
36.25
(52) WiSys Technology Foundation grants. (a) In this subsection,
25"foundation" means the WiSys Technology Foundation, Inc.
AB641,9,8
1(b) From the appropriation under s. 20.285 (1) (cd), the board shall award
2grants to the foundation for the Wisconsin Small Company Advancement program
3to provide intellectual property management services to the extension and all
4institutions and college campuses other than the University of Wisconsin-Madison
5and the University of Wisconsin-Milwaukee. The amount of each grant shall be
6$250,000. The board may not award a grant unless the foundation shows to the
7satisfaction of the board that the foundation has secured matching funds for the
8program from sources other than the state that are equal to the amount of the grant.
AB641,9,119
(c) The board shall submit progress reports to the legislature, in the manner
10provided under s. 13.172 (2), at least annually until the program funded by the
11grants under par. (b) is terminated.
AB641, s. 16
12Section
16. 36.25 (53) of the statutes is created to read:
AB641,9,2013
36.25
(53) Business plan competition. The board shall use the moneys
14appropriated under s. 20.285 (1) (eb) to support a business plan competition program
15existing on the effective date of this subsection .... [LRB inserts date], at institutions
16and college campuses other than the University of Wisconsin-Madison that makes
17entrepreneurial expertise available to students and that has ties to campus-based
18business plan contests and national organizations that foster student
19entrepreneurism. The board may use the moneys only if the board receives matching
20funds for the same purpose from private contributions.
AB641, s. 17
21Section
17. 36.25 (54) of the statutes is created to read:
AB641,9,2522
36.25
(54) Emerging technology center. The board shall use the moneys
23appropriated under s. 20.285 (1) (eg) to develop an emerging technology center at the
24University of Wisconsin-La Crosse. The board may use the moneys only if the board
25receives matching funds for the same purpose from private contributions.
AB641, s. 18
1Section
18. 36.25 (54) of the statutes, as created by 2009 Wisconsin Act .... (this
2act), is repealed.
AB641,10,85
38.41
(3) (d) Beginning in the 2008-09 school year, the board shall award at
6least $1,000,000 annually under sub. (1) for training in advanced manufacturing
7skills,
with priority given to welding and beginning in the 2010-11 school year, the
8board shall award at least $1,500,000 annually under sub. (1) for such training.
AB641,10,1611
71.05
(6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de),
12(2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3s),
13(3t), (3w), (5e), (5f), (5h), (5i), (5j), (5k),
(5r), and (8r) and not passed through by a
14partnership, limited liability company, or tax-option corporation that has added that
15amount to the partnership's, company's, or tax-option corporation's income under s.
1671.21 (4) or 71.34 (1k) (g).
AB641, s. 21
17Section
21. 71.07 (5r) of the statutes is created to read:
AB641,10,1918
71.07
(5r) Postsecondary education credit. (a)
Definitions. In this
19subsection:
AB641,10,2220
1. "Claimant" means a sole proprietor, a partner, a member of a limited liability
21company, or a shareholder of a tax-option corporation who files a claim under this
22subsection.
AB641,10,2323
2. "Course of instruction" has the meaning given in s. 38.50 (1) (c).
AB641,10,2424
3. "Family member" has the meaning given in s. 157.061 (7).
AB641,11,3
14. "Managing employee" means an individual who wholly or partially exercises
2operational or managerial control over, or who directly or indirectly conducts, the
3operation of the claimant's business.
AB641,11,54
5. "Paid or incurred" includes any amount paid by the claimant to reimburse
5an individual for the tuition that the individual paid or incurred.
AB641,11,66
6. "Qualified postsecondary institution" means all of the following:
AB641,11,97
a. A University of Wisconsin System institution, a technical college system
8institution, or a regionally accredited 4-year nonprofit college or university having
9its regional headquarters and principal place of business in this state.
AB641,11,1110
b. A school approved under s. 38.50, if the delivery of education occurs in this
11state.
AB641,11,1412
(b)
Filing claims. Subject to the limitations provided in this subsection, a
13claimant may claim as a credit against the tax imposed under s. 71.02 an amount
14equal to the following:
AB641,11,1815
1. Twenty-five percent of the tuition that the claimant paid or incurred for an
16individual to participate in an education program of a qualified postsecondary
17institution, if the individual was enrolled in a course of instruction and eligible for
18a grant from the Federal Pell Grant Program.
AB641,11,2419
2. Thirty percent of the tuition that the claimant paid or incurred for an
20individual to participate in an education program of a qualified postsecondary
21institution, if the individual was enrolled in a course of instruction that relates to a
22projected worker shortage in this state, as determined by the local workforce
23development boards established under
29 USC 2832, and if the individual was
24eligible for a grant from the Federal Pell Grant Program.
AB641,12,3
1(c)
Limitations. 1. No credit may be allowed under par. (b) unless the claimant
2certifies to the department of revenue that the claimant will not be reimbursed for
3any amount of tuition for which the claimant claims a credit under par. (b).
AB641,12,64
2. A claimant may not claim the credit under par. (b) for any tuition amounts
5that the individual described under par. (b) excluded under s. 71.05 (6) (b) 28. or
6under section
127 of the Internal Revenue Code.
AB641,12,97
3. A claimant may not claim the credit under par. (b) for any tuition amounts
8that the claimant paid or incurred for a family member of the claimant or for a family
9member of a managing employee unless all of the following apply:
AB641,12,1310
a. The family member was employed an average of at least 20 hours per week
11as an employee of the claimant, or the claimant's business, during the one-year
12period prior to commencing participation in the education program in connection
13with which the claimant claims a credit under par. (b).
AB641,12,1514
b. The family member is enrolled in a course of instruction that is substantially
15related to the claimant's business.
AB641,12,1716
3m. A claimant may not claim the credit under par. (b) for any tuition amounts
17that the claimant paid or incurred for an individual who is not a resident of this state.
AB641,12,2118
4. The claimant shall claim the credit for the taxable year in which the
19individual graduates from a course of instruction in an amount equal to the total
20amount the claimant paid or incurred under par. (b) for all taxable years in which
21the claimant paid or incurred such amounts related to that individual.
AB641,13,422
5. Partnerships, limited liability companies, and tax-option corporations may
23not claim the credit under this subsection, but the eligibility for, and the amount of,
24the credit are based on their payment of tuition under par. (b). A partnership, limited
25liability company, or tax-option corporation shall compute the amount of credit that
1each of its partners, members, or shareholders may claim and shall provide that
2information to each of them. Partners, members of limited liability companies, and
3shareholders of tax-option corporations may claim the credit in proportion to their
4ownership interest.
AB641,13,65
(d)
Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
6s. 71.28 (4), applies to the credit under this subsection.
AB641, s. 22
7Section
22. 71.10 (4) (cd) of the statutes is created to read:
AB641,13,88
71.10
(4) (cd) Postsecondary education credit under s. 71.07 (5r).
AB641,13,1411
71.21
(4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di),
12(2dj), (2dL), (2dm), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3s), (3t), (3w),
13(5e), (5f), (5g), (5h), (5i), (5j), (5k),
(5r), and (8r) and passed through to partners shall
14be added to the partnership's income.
AB641,13,2217
71.26
(2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dd),
18(1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (1dy), (3g), (3h), (3n), (3p), (3q), (3r), (3t),
19(3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k),
(5r), and (8r) and not passed through by a
20partnership, limited liability company, or tax-option corporation that has added that
21amount to the partnership's, limited liability company's, or tax-option corporation's
22income under s. 71.21 (4) or 71.34 (1k) (g).
AB641, s. 25
23Section
25. 71.28 (5r) of the statutes is created to read:
AB641,13,2524
71.28
(5r) Postsecondary education credit. (a)
Definitions. In this
25subsection:
AB641,14,1
11. "Claimant" means a corporation that files a claim under this subsection.