AB794: Bill Text

MES&JK:nwn:ph

2009 - 2010 LEGISLATURE

2009 Assembly BILL 794

March 2, 2010 - Introduced by Representatives Friske, Molepske Jr., Mursau, Meyer, M. Williams, Brooks, Hraychuck, Kestell, A. Ott, Suder, Tauchen, Townsend and Turner, cosponsored by Senators Kreitlow and Taylor. Referred to Committee on Jobs, the Economy and Small Business.

AB794,1,9 An Act to amend 71.05 (6) (a) 15., 71.21 (4), 71.26 (2) (a) 4., 71.34 (1k) (g), 71.45 (2) (a) 10. and 77.92 (4); and to create 70.11 (45), 71.07 (6f), 71.07 (6g), 71.10 (4) (cf), 71.10 (4) (cg), 71.28 (6f), 71.28 (6g), 71.30 (3) (af), 71.30 (3) (ag), 71.47 (6f), 71.47 (6g), 71.49 (1) (af), 71.49 (1) (ag) and 77.54 (58) of the statutes; relating to: nonrefundable individual and corporate income and franchise tax credits for purchasing a thermal biomass heating system and fuel for such a system, property tax exemptions for thermal biomass heating systems and facilities used to store fuel for such systems, and a sales and use tax exemption for purchasing a thermal biomass heating system.

Analysis by the Legislative Reference Bureau

This bill creates a nonrefundable individual income tax credit, and a corporate income and franchise tax credit, for the purchase of a thermal biomass heating system (system) and a similar nonrefundable credit for the purchase of biomass fuel for such a system. Under the bill, a claimant may claim 100 percent of the cost the claimant spends for the purchase and installation of a system in the claimant's primary residence or place of business. A claimant may also claim a credit for 100 percent of the cost of fuel for a system that is installed in the claimant's primary residence or place of business.

To be eligible for the credit, the system must comply with all state requirements related to emissions of air contaminants, and the provisions of the federal Clean Air Act, that apply to the system on the day it is purchased. The credit related to purchasing a system, or fuel for the system, for an individual's primary residence may not be claimed by a nonresident or part-year resident of the state. Because the credit is nonrefundable, it may be claimed only up to the amount of a taxpayer's income or franchise tax liability.

Under the bill, a system is defined as a stove, furnace, or boiler that generates heat from biomass and provides an energy efficiency conversion of at least 75 percent. Subject to a number of exceptions, such as an exception for garbage and for certain nonvegetation-based waste, biomass is defined under the bill as a resource that derives energy from wood or plant material or residue, biological waste, crops grown for use as such a resource, or landfill gases.

The bill also creates real and personal property tax exemptions for a system and for facilities that are used to store fuel for such a system. Finally, the bill creates a sales and use tax exemption for the purchase of a system, including accessories, attachments, and repair parts.

Because this bill relates to an exemption from state or local taxes, it may be referred to the Joint Survey Committee on Tax Exemptions for a report to be printed as an appendix to the 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:

AB794, s. 1 Section 1. 70.11 (45) of the statutes is created to read:

AB794,2,5 70.11 (45) Thermal biomass heating systems. (a) Thermal biomass heating systems, as defined in s. 71.07 (6f) (a) 4., including accessories, attachments, and repair parts, but not including equipment or components that would be present as part of a conventional energy system.

AB794,2,8 (b) All property of a facility that is used to store fuel made from biomass, as defined in s. 196.378 (1) (ar), if the fuel is sold for use in thermal biomass heating systems, as defined in s. 71.07 (6f) (a) 4.

AB794, s. 2 Section 2. 71.05 (6) (a) 15. of the statutes, as affected by 2009 Wisconsin Acts 2 and 28, is amended to read:

AB794,3,6 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3s), (3t), (3w), (5e), (5f), (5h), (5i), (5j), (5k), (6f), (6g), and (8r) 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 (1k) (g).

AB794, s. 3 Section 3. 71.07 (6f) of the statutes is created to read:

AB794,3,9 71.07 (6f) Thermal biomass heating systems credit. (a) Definitions. In this subsection:

AB794,3,11 1. "Air quality standards" means all requirements under ch. 285 and 42 USC 7401 to 7671q.

AB794,3,12 2. "Biomass" has the meaning given in s. 196.378 (1) (ar).

AB794,3,13 3. "Claimant" means a person who files a claim under this subsection.

AB794,3,17 4. "Thermal biomass heating system" means a stove, furnace, or boiler that generates heat from biomass by providing an energy efficiency conversion of at least 75 percent and meets any air quality standards that apply to the system on the day on which it is purchased.

AB794,3,23 (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.02, up to the amount of those taxes, 100 percent of the installed cost of a thermal biomass heating system that the claimant paid in the taxable year for a system that is installed in the claimant's primary residence in this state or in the claimant's place of business in this state.

AB794,4,3 (c) Limitations. 1. No credit may be claimed under this subsection by a part-year resident or a nonresident of this state for amounts paid to install a thermal biomass heating system in the claimant's primary residence in this state.

AB794,4,11 2. 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.

AB794,4,13 (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.

AB794, s. 4 Section 4. 71.07 (6g) of the statutes is created to read:

AB794,4,15 71.07 (6g) Thermal biomass fuel credit. (a) Definitions. In this subsection:

AB794,4,16 1. "Biomass" has the meaning given in s. 196.378 (1) (ar).

AB794,4,17 2. "Claimant" means a person who files a claims under this subsection.

AB794,4,19 3. "Fuel" means fuel that is made from biomass and is used to power a thermal biomass heating system.

AB794,4,20 4. "Thermal biomass heating system" has the meaning given in sub. (6f) (a) 4.

AB794,5,2 (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.02, up to the amount of those taxes, 100 percent of the amount that the claimant paid in the taxable year for fuel used in a thermal biomass heating system that is installed in the claimant's primary residence in this state or in the claimant's place of business in this state.

AB794,5,5 (c) Limitations. 1. No credit may be claimed under this subsection by a part-year resident or a nonresident of this state for amounts paid for fuel used in a thermal biomass heating system in the claimant's primary residence in this state.

AB794,5,13 2. 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.

AB794,5,15 (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.

AB794, s. 5 Section 5. 71.10 (4) (cf) of the statutes is created to read:

AB794,5,17 71.10 (4) (cf) The thermal biomass heating systems credit under s. 71.07 (6f).

AB794, s. 6 Section 6. 71.10 (4) (cg) of the statutes is created to read:

AB794,5,19 71.10 (4) (cg) The thermal biomass fuel credit under s. 71.07 (6g).

AB794, s. 7 Section 7. 71.21 (4) of the statutes, as affected by 2009 Wisconsin Acts 2 and 28, is amended to read:

AB794,5,25 71.21 (4) Credits computed by a partnership under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3s), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (6f), (6g), and (8r) and passed through to partners shall be added to the partnership's income.

AB794, s. 8 Section 8. 71.26 (2) (a) 4. of the statutes, as affected by 2009 Wisconsin Acts 2 and 28, is amended to read:

AB794,6,8 71.26 (2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (1dy), (3g), (3h), (3n), (3p), (3q), (3r), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (6f), (6g), and (8r) 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 (1k) (g).

AB794, s. 9 Section 9. 71.28 (6f) of the statutes is created to read:

AB794,6,11 71.28 (6f) Thermal biomass heating systems credit. (a) Definitions. In this subsection:

AB794,6,13 1. "Air quality standards" means all requirements under ch. 285 and 42 USC 7401 to 7671q.

AB794,6,14 2. "Biomass" has the meaning given in s. 196.378 (1) (ar).

AB794,6,15 3. "Claimant" means a person who files a claim under this subsection.

AB794,6,19 4. "Thermal biomass heating system" means a stove, furnace, or boiler that generates heat from biomass by providing an energy efficiency conversion of at least 75 percent and meets any air quality standards that apply to the system on the day on which it is purchased.

AB794,6,24 (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.23, up to the amount of those taxes, 100 percent of the installed cost of a thermal biomass heating system that the claimant paid in the taxable year for a system that is installed in the claimant's place of business in this state.

AB794,7,8 (c) Limitations. 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.

AB794,7,10 (d) Administration. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

AB794, s. 10 Section 10. 71.28 (6g) of the statutes is created to read:

AB794,7,12 71.28 (6g) Thermal biomass fuel credit. (a) Definitions. In this subsection:

AB794,7,13 1. "Biomass" has the meaning given in s. 196.378 (1) (ar).

AB794,7,14 2. "Claimant" means a person who files a claims under this subsection.

AB794,7,16 3. "Fuel" means fuel that is made from biomass and is used to power a thermal biomass heating system.

AB794,7,17 4. "Thermal biomass heating system" has the meaning given in sub. (6f) (a) 4.

AB794,7,23 (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.23, up to the amount of those taxes, 100 percent of the amount that the claimant paid in the taxable year for fuel used in a thermal biomass heating system that is installed in the claimant's primary residence in this state or in the claimant's place of business in this state.

AB794,8,6 (c) Limitations. 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.

AB794,8,8 (d) Administration. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

AB794, s. 11 Section 11. 71.30 (3) (af) of the statutes is created to read:

AB794,8,10 71.30 (3) (af) The thermal biomass heating systems credit under s. 71.28 (6f).

AB794, s. 12 Section 12. 71.30 (3) (ag) of the statutes is created to read:

AB794,8,12 71.30 (3) (ag) The thermal biomass fuel credit under s. 71.28 (6g).

AB794, s. 13 Section 13. 71.34 (1k) (g) of the statutes, as affected by 2009 Wisconsin Acts 2 and 28, is amended to read:

AB794,8,18 71.34 (1k) (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), (1dy), (3), (3g), (3h), (3n), (3p), (3q), (3r), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (6f), (6g), and (8r) and passed through to shareholders.

AB794, s. 14 Section 14. 71.45 (2) (a) 10. of the statutes, as affected by 2009 Wisconsin Acts 2 and 28, is amended to read:

AB794,9,2 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit computed under s. 71.47 (1dd) to (1dy), (3g), (3h), (3n), (3p), (3q), (3r), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (6f), (6g), and (8r) 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 (1k) (g) and the amount of credit computed under s. 71.47 (1), (3), (3t), (4), (4m), and (5).

AB794, s. 15 Section 15. 71.47 (6f) of the statutes is created to read:

AB794,9,5 71.47 (6f) Thermal biomass heating systems credit. (a) Definitions. In this subsection:

AB794,9,7 1. "Air quality standards" means all requirements under ch. 285 and 42 USC 7401 to 7671q.

AB794,9,8 2. "Biomass" has the meaning given in s. 196.378 (1) (ar).

AB794,9,9 3. "Claimant" means a person who files a claim under this subsection.

AB794,9,13 4. "Thermal biomass heating system" means a stove, furnace, or boiler that generates heat from biomass by providing an energy efficiency conversion of at least 75 percent and meets any air quality standards that apply to the system on the day on which it is purchased.

AB794,9,18 (b) Filing claims. Subject to the limitations provided in this subsection, a claimant may claim as a credit against the tax imposed under s. 71.43, up to the amount of those taxes, 100 percent of the installed cost of a thermal biomass heating system that the claimant paid in the taxable year for a system that is installed in the claimant's place of business in this state.

AB794,9,24 (c) Limitations. 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.