AB817: Bill Text

2009 Assembly BILL 817

March 9, 2010 - Introduced by Representatives Sinicki, Richards, Pasch, Turner, Fields and Grigsby, cosponsored by Senators Taylor and Robson. Referred to Committee on Housing.

AB817,1,4 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 71.07 (5n), 71.10 (4) (cr), 71.28 (5n), 71.30 (3) (dr), 71.47 (5n), 71.49 (1) (dr) and 234.615 of the statutes; relating to: employer-assisted housing.

Analysis by the Legislative Reference Bureau

This bill directs the Wisconsin Housing and Economic Development Authority (WHEDA) to establish and administer a program to award tax benefits to an employer that implements a qualifying employer-assisted housing program. The bill defines an "employer-assisted housing program" as a plan established in writing by an employer to pay qualified housing expenses of eligible employees. The bill defines "qualified housing expenses" to include the closing costs, downpayments, payments made to refinance a mortgage loan, or rental assistance paid on the eligible property of an eligible employee, and costs to provide technical assistance to a participating employer. The bill defines an "eligible employee" as an employee of a participating employer whose annual gross household income, adjusted for household size, does not exceed 120 percent of the area median gross household income, adjusted for household size. The bill defines "eligible property" as residential real property in this state that an eligible employee owns or rents as a full-time residence, but does not use as a vacation home or for trade or business purposes.

The bill requires WHEDA to establish criteria, policies, and requirements for a qualifying employer-assisted housing program. An employer wishing to establish a qualifying employer-assisted housing program may seek technical assistance from WHEDA directly, or may work with a sponsor. The bill defines a "sponsor" as a nonprofit corporation, exempt from federal income tax, that has as one of its stated purposes home ownership education. An employer who has established a qualifying employer-assisted housing program must obtain certification from WHEDA and pay any administrative fee charged by WHEDA before the employer is eligible to obtain tax benefits. The bill requires WHEDA to establish criteria, policies, and requirements to be met by a participating employer seeking certification under the program, and for a certified participating employer to obtain tax benefits under the program.

An employer may claim tax benefits in any year if, during that year, the employer incurs at least $10,000 in qualified housing expenses. The amount that the employer may claim is equal to either 50 percent of the employer's qualified housing expenses or 90 percent of the employer's qualified housing expenses, if the expenses are paid in connection with an employee purchase of an eligible property that is a foreclosure. However, for each eligible employee assisted under the employer-assisted housing program and on whose behalf the employer incurs $10,000 in qualified housing expenses, the employer may claim an amount that is no more than the lesser of $10,000 or 6 percent of the purchase price of eligible property purchased by the eligible employee. The participating employer may seek renewal of certification if the employer pays any annual administrative fee charged by WHEDA and maintains an employer-assisted housing program that satisfies the requirements for such a program established by WHEDA.

Because this bill directly or substantially affects the development, construction, cost or availability of housing in this state, the Department of Commerce, as required by law, will prepare a report to be printed as an appendix to this bill.

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:

AB817, s. 1 Section 1. 71.05 (6) (a) 15. of the statutes, as affected by 2009 Wisconsin Act 28, is amended to read:

AB817,3,2 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), (5n), 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).

AB817, s. 2 Section 2. 71.07 (5n) of the statutes is created to read:

AB817,3,5 71.07 (5n) Employer-assisted housing credit. (a) Definitions. In this subsection:

AB817,3,7 1. "Claimant" means a participating employer that is certified to receive tax benefits under s. 234.615 (3).

AB817,3,8 2. "Participating employer" has the meaning given in s. 234.615 (1) (e).

AB817,3,9 3. "Qualified housing expenses" has the meaning given in s. 234.615 (1) (g).

AB817,3,17 (b) Filing claims. Subject to the limitations provided in this subsection and s. 234.615 (3), for taxable years beginning after December 31, 2010, a claimant may claim as credit against the taxes imposed under s. 71.02, up to the amount of the taxes, 50 percent of the amount of qualified housing expenses that the claimant paid in the taxable year, except that, if the expenses are paid in connection with an employee purchase of an eligible property that is a foreclosure, the claimant may claim 90 percent of the qualified housing expenses that the claimant paid in the taxable year.

AB817,3,25 (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.

AB817,4,2 (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.

AB817, s. 3 Section 3. 71.10 (4) (cr) of the statutes is created to read:

AB817,4,4 71.10 (4) (cr) Employer-assisted housing credit under s. 71.07 (5n).

AB817, s. 4 Section 4. 71.21 (4) of the statutes, as affected by 2009 Wisconsin Act 28, is amended to read:

AB817,4,10 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), (5n), and (8r) and passed through to partners shall be added to the partnership's income.

AB817, s. 5 Section 5. 71.26 (2) (a) 4. of the statutes, as affected by 2009 Wisconsin Act 28, is amended to read:

AB817,4,18 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), (5n), 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).

AB817, s. 6 Section 6. 71.28 (5n) of the statutes is created to read:

AB817,4,21 71.28 (5n) Employer-assisted housing credit. (a) Definitions. In this subsection:

AB817,4,23 1. "Claimant" means a participating employer that is certified to receive tax benefits under s. 234.615 (3).

AB817,4,24 2. "Participating employer" has the meaning given in s. 234.615 (1) (e).

AB817,4,25 3. "Qualified housing expenses" has the meaning given in s. 234.615 (1) (g).

AB817,5,8 (b) Filing claims. Subject to the limitations provided in this subsection and s. 234.615 (3), for taxable years beginning after December 31, 2010, a claimant may claim as credit against the taxes imposed under s. 71.23, up to the amount of the taxes, 50 percent of the amount of qualified housing expenses that the claimant paid in the taxable year, except that, if the expenses are paid in connection with an employee purchase of an eligible property that is a foreclosure, the claimant may claim 90 percent of the qualified housing expenses that the claimant paid in the taxable year.

AB817,5,16 (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.

AB817,5,18 (d) Administration. Subsection (4) (e) to (h), as it applies to the credit under sub. (4), applies to the credit under this subsection.

AB817, s. 7 Section 7. 71.30 (3) (dr) of the statutes is created to read:

AB817,5,20 71.30 (3) (dr) Employer-assisted housing credit under s. 71.28 (5n).

AB817, s. 8 Section 8. 71.34 (1k) (g) of the statutes, as affected by 2009 Wisconsin Act 28, is amended to read:

AB817,6,2 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), (5n), and (8r) and passed through to shareholders.

AB817, s. 9 Section 9. 71.45 (2) (a) 10. of the statutes, as affected by 2009 Wisconsin Act 28, is amended to read:

AB817,6,11 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), (5n), 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).

AB817, s. 10 Section 10. 71.47 (5n) of the statutes is created to read:

AB817,6,14 71.47 (5n) Employer-assisted housing credit. (a) Definitions. In this subsection:

AB817,6,16 1. "Claimant" means a participating employer that is certified to receive tax benefits under s. 234.615 (3).

AB817,6,17 2. "Participating employer" has the meaning given in s. 234.615 (1) (e).

AB817,6,18 3. "Qualified housing expenses" has the meaning given in s. 234.615 (1) (g).

AB817,7,2 (b) Filing claims. Subject to the limitations provided in this subsection and s. 234.615 (3), for taxable years beginning after December 31, 2010, a claimant may claim as credit against the taxes imposed under s. 71.43, up to the amount of the taxes, 50 percent of the amount of qualified housing expenses that the claimant paid in the taxable year, except that, if the expenses are paid in connection with an employee purchase of an eligible property that is a foreclosure, the claimant may claim 90 percent of the qualified housing expenses that the claimant paid in the taxable year.

AB817,7,10 (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.

AB817,7,12 (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.

AB817, s. 11 Section 11. 71.49 (1) (dr) of the statutes is created to read:

AB817,7,14 71.49 (1) (dr) Employer-assisted housing credit under s. 71.47 (5n).

AB817, s. 12 Section 12. 77.92 (4) of the statutes, as affected by 2009 Wisconsin Act 28, is amended to read:

AB817,8,7 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), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3s), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5n), and (8r); 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.

AB817, s. 13 Section 13. 234.615 of the statutes is created to read:

AB817,8,10 234.615 Tax benefits for employer-assisted housing. (1) Definitions. In this section:

AB817,8,11 (a) "Eligible employee" means any individual who satisfies all of the following:

AB817,8,14 1. The individual's annual gross household income, adjusted for household size, does not exceed 120 percent of the area median gross household income, adjusted for household size.

AB817,8,15 2. The individual is employed by a participating employer.

AB817,8,18 (b) "Eligible property" means residential real property in this state that an eligible employee owns or rents and maintains as a full-time residence, but does not use as a vacation home or for trade or business purposes.

AB817,8,20 (c) "Employer-assisted housing program" means a plan established in writing by an employer to pay qualified housing expenses of eligible employees.

AB817,8,22 (d) "Homeownership assistance" means payment of any of the following towards the purchase of eligible property:

AB817,8,23 1. Closing costs, down payments, and prepaid expenses.

AB817,8,25 2. Payments made to refinance or to buy down the interest rate on a mortgage loan.

AB817,9,3 3. Contributions to 2nd mortgage pools or low-interest loan programs created by a participating employer, administered by a sponsor, and made available to eligible employees.

AB817,9,5 4. Contributions to individual development account programs, as provided under 42 USC 604 (h), that are designed exclusively for the purchase of a home.

AB817,9,7 (e) "Mortgage loan" means a loan secured by a first lien real estate mortgage on eligible property.

AB817,9,9 (f) "Participating employer" means an employer that has established an employer-assisted housing program.

AB817,9,11 (g) "Qualified housing expenses" means any of the following if paid by a participating employer:

AB817,9,13 1. Homeownership assistance or rental assistance paid by a participating employer on behalf of an eligible employee.

AB817,9,15 2. Operating costs incurred directly or indirectly by a sponsor in connection with a participating employer's employer-assisted housing program.

AB817,9,17 3. Costs incurred by a sponsor to provide technical assistance to an employer establishing an employer-assisted housing program.

AB817,9,19 4. Costs incurred by a sponsor to provide homebuyer education and homeownership counseling to eligible employees.

AB817,9,22 (h) "Rental assistance" means payment of deposits, including a security deposit or a deposit that is to be applied as rent for one or more future periods, towards eligible property and rent on eligible property.

AB817,9,23 (i) "Sponsor" means an organization that satisfies all of the following:

AB817,9,25 1. The organization is a nonprofit corporation, as defined in s. 181.0103 (17), organized under the laws of this state.

AB817,10,3 2. The organization is an organization described in section 501 (c) (3) of the Internal Revenue Code that is exempt from federal income tax under section 501 (a) of the Internal Revenue Code.

AB817,10,5 3. The organization has as one of its stated purposes homeownership education.

AB817,10,7 (j) "Tax benefits" mean the credits under ss. 71.07 (5n), 71.28 (5n), and 71.47 (5n).

AB817,10,11 (2) Powers and duties of the authority. The authority shall establish and administer a program to award tax benefits to a participating employer that implements an employer-assisted housing program that satisfies the requirements of this section. To implement the program the authority shall do all of the following:

AB817,10,13 (a) Establish criteria, policies, and requirements to be met by employer-assisted housing programs.

AB817,10,15 (b) Establish criteria, policies, and requirements to be met by a participating employer seeking certification under this section.

AB817,10,18 (c) Establish criteria, policies, and requirements to be met by a participating employer seeking to claim tax benefits under this section for qualified housing expenses incurred by the employer.

AB817,10,20 (d) Establish criteria, policies, and requirements for the transferability of tax credits available under this section.

AB817,10,22 (e) 1. Provide a participating employer certified under this section and the department of revenue with a copy of the certification.

AB817,10,25 2. Provide to the participating employer certified under subd. 1. and to the department of revenue a notice of eligibility to receive tax benefits that reports the amount of tax benefits for which the participating employer is eligible.

AB817,11,2 (f) Provide technical assistance to participating employers seeking to apply for certification under sub. (3) (b).