LRB-0964/1
JK&FFK:sac:jf
2013 - 2014 LEGISLATURE
February 28, 2013 - Introduced by Senators Lassa, Shilling, Erpenbach, C.
Larson
, Miller, Hansen and Harris, cosponsored by Representatives
Vruwink, Bewley, Barca, Kahl, Billings, Berceau, Pope, Ohnstad, Bernard
Schaber
, Barnes, Jorgensen, Sinicki, Hesselbein and Shankland. Referred
to Committee on Economic Development and Local Government.
SB43,1,5 1An Act to amend 71.05 (6) (a) 15., 71.05 (6) (b) 47. b., 71.21 (4) (a), 71.26 (2) (a)
24., 71.34 (1k) (g), 71.45 (2) (a) 10., 76.67 (2) and 77.92 (4); and to create 71.07
3(5p), 71.10 (4) (cs), 71.28 (5p), 71.30 (3) (dr), 71.47 (5p), 71.49 (1) (dr), 76.634 and
4238.17 of the statutes; relating to: an income and franchise tax credit for
5investments in a community development financial institution.
Analysis by the Legislative Reference Bureau
Under this bill, the Wisconsin Economic Development Corporation (WEDC)
may certify a person who makes a qualified investment in a registered community
development financial institution (CDFI) to receive a credit against state income and
franchise taxes, for taxable years beginning after December 31, 2012, and before
January 1, 2015, and against license fees paid by insurers. The bill defines a CDFI
as an entity that is organized under the laws of this state and has been certified by
the Community Development Financial Institutions Fund established under federal
law (fund) as meeting certain eligibility requirements. The bill permits WEDC to
register a CDFI that applies to WEDC and complies with annual reporting
requirements. The bill defines a "qualified investment" as a loan or deposit that pays
no interest of at least $10,000 that is made for a minimum of 60 months and over
which the CDFI retains complete control for the duration of the investment period.
WEDC may revoke the registration of a CDFI that fails to comply with annual
reporting requirements or that no longer meets the eligibility requirement for
certification by the fund. WEDC may certify up to $1,000,000 in tax credits in any
calendar year.

A person certified to receive tax credits may claim 10 percent of the person's
qualified investment, if the investment is at least $10,000, but not more than
$150,000, or 12 percent of the person's qualified investment, if the investment is
more than $150,000, but not more than $500,000. If the person withdraws the
qualified investment from the CDFI before the end of the investment period and does
not reinvest the qualified investment in another CDFI, the person must repay a
portion of the credit amounts that the person received by adding the portion to the
person's tax or fee liability in a subsequent year. However, the portion that the
person must repay depends on when the person withdraws the investment during
the investment period. The portion that the person must repay decreases the longer
the person holds the investment during the investment period.
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:
SB43,1 1Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:
SB43,2,82 71.05 (6) (a) 15. Except as provided under s. 71.07 (3p) (c) 5., the amount of the
3credits computed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds),
4(2dx), (2dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (5e), (5f), (5h),
5(5i), (5j), (5k), (5p), (5r), (5rm), (6n), and (8r) and not passed through by a partnership,
6limited liability company, or tax-option corporation that has added that amount to
7the partnership's, company's, or tax-option corporation's income under s. 71.21 (4)
8or 71.34 (1k) (g).
SB43,2 9Section 2. 71.05 (6) (b) 47. b. of the statutes is amended to read:
SB43,3,1410 71.05 (6) (b) 47. b. With respect to partners and members of limited liability
11companies, for taxable years beginning after December 31, 2010, for 2 consecutive
12taxable years beginning with the taxable year in which the partnership's or limited
13liability company's business locates to this state from another state or another
14country and begins doing business in this state, as defined in s. 71.22 (1r), and subject
15to the limitations provided under subd. 47. d. and e., the partner's or member's

1distributive share of taxable income as calculated under section 703 of the Internal
2Revenue Code; plus the items of income and gain under section 702 of the Internal
3Revenue Code, including taxable state and municipal bond interest and excluding
4nontaxable interest income or dividend income from federal government obligations;
5minus the items of loss and deduction under section 702 of the Internal Revenue
6Code, except items that are not deductible under s. 71.21; plus guaranteed payments
7to partners under section 707 (c) of the Internal Revenue Code; plus the credits
8claimed under s. 71.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2dr), (2ds), (2dx), (2dy),
9(3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (5e), (5f), (5g), (5h), (5i),
10(5j), (5k), (5p), (5r), (5rm), and (8r); and plus or minus, as appropriate, transitional
11adjustments, depreciation differences, and basis differences under s. 71.05 (13), (15),
12(16), (17), and (19), multiplied by the apportionment fraction determined in s. 71.04
13(4) and subject to s. 71.04 (7) or by separate accounting. No amounts subtracted
14under this subd. 47. b. may be included in the modification under par. (b) 9. or 9m.
SB43,3 15Section 3. 71.07 (5p) of the statutes is created to read:
SB43,3,1716 71.07 (5p) Steve Hilgenberg community development credit. (a) Definition.
17In this subsection, "claimant" means a person who files a claim under this subsection.
SB43,4,218 (b) Filing claims. Subject to the limitations provided under this subsection and
19the requirements under s. 238.17, for taxable years beginning after December 31,
202012, and before January 1, 2015, except as provided under s. 238.17 (5) (cm), a
21claimant may claim as a credit against the tax imposed under s. 71.02, up to the
22amount of the tax, for the taxable year in which the investment is made, an amount
23equal to 10 percent of the claimant's qualified investment in a community
24development financial institution, if the investment is at least $10,000, but not more
25than $150,000, or 12 percent of the claimant's qualified investment in a community

1development financial institution, if the investment is more than $150,000, but not
2more than $500,000.
SB43,4,103 (c) Limitations. 1. Partnerships, limited liability companies, and tax-option
4corporations may not claim the credit under this subsection, but the eligibility for,
5and the amount of, the credit are based on their payment of amounts under par. (b).
6A partnership, limited liability company, or tax-option corporation shall compute
7the amount of credit that each of its partners, members, or shareholders may claim
8and shall provide that information to each of them. Partners, members of limited
9liability companies, and shareholders of tax-option corporations may claim the
10credit in proportion to their ownership interests.
SB43,4,1911 2. A person who makes an investment in a community development financial
12institution in a taxable year, withdraws the investment in that taxable year, and
13immediately reinvests the proceeds into another community development financial
14institution may claim only one credit under this subsection for that taxable year,
15based on the lesser of all such investments in that taxable year. Investments in a
16community development financial institution made before the effective date of this
17subdivision .... [LRB inserts date], may not be withdrawn prior to the end of their
18contractual term and reinvested in a community development financial institution
19in order to claim a credit under this subsection.
SB43,5,220 3. A claimant who withdraws a qualified investment from a community
21development financial institution prior to the date of withdrawal specified in the
22written notice provided to the claimant under s. 238.17 (5) (b) and who does not
23immediately reinvest the proceeds of the qualified investment as a qualified
24investment in another community development financial institution shall add to the

1claimant's liability for taxes imposed under s. 71.02 one of the following percentages
2of the amount of the credits received under this subsection:
SB43,5,43 a. If the withdrawal occurs during the first year after the date on which the
4claimant made the qualified investment, 100 percent.
SB43,5,65 b. If the withdrawal occurs during the 2nd year after the date on which the
6claimant made the qualified investment, 75 percent.
SB43,5,87 c. If the withdrawal occurs during the 3rd year after the date on which the
8claimant made the qualified investment, 50 percent.
SB43,5,109 d. If the withdrawal occurs during the 4th year after the date on which the
10claimant made the qualified investment, 25 percent.
SB43,5,1211 e. If the withdrawal occurs during the 5th year after the date on which the
12claimant made the qualified investment, 10 percent.
SB43,5,1413 (d) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
14s. 71.28 (4), applies to the credit under this subsection.
SB43,4 15Section 4. 71.10 (4) (cs) of the statutes is created to read:
SB43,5,1716 71.10 (4) (cs) Steve Hilgenberg community development credit under s. 71.07
17(5p).
SB43,5 18Section 5. 71.21 (4) (a) of the statutes is amended to read:
SB43,5,2319 71.21 (4) (a) The amount of the credits computed by a partnership under s.
2071.07 (2dd), (2de), (2di), (2dj), (2dL), (2dm), (2ds), (2dx), (2dy), (3g), (3h), (3n), (3p),
21(3q), (3r), (3rm), (3rn), (3s), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5p), (5r),
22(5rm), (6n), and (8r) and passed through to partners shall be added to the
23partnership's income.
SB43,6 24Section 6. 71.26 (2) (a) 4. of the statutes is amended to read:
SB43,6,7
171.26 (2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dd),
2(1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (1dy), (3g), (3h), (3n), (3p), (3q), (3r),
3(3rm), (3rn), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5p), (5r), (5rm), (6n), (8r),
4and (9s) and not passed through by a partnership, limited liability company, or
5tax-option corporation that has added that amount to the partnership's, limited
6liability company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1k)
7(g).
SB43,7 8Section 7. 71.28 (5p) of the statutes is created to read:
SB43,6,109 71.28 (5p) Steve Hilgenberg community development credit. (a) Definition.
10In this subsection, "claimant" means a person who files a claim under this subsection.
SB43,6,2011 (b) Filing claims. Subject to the limitations provided under this subsection and
12the requirements under s. 238.17, for taxable years beginning after December 31,
132012, and before January 1, 2015, except as provided under s. 238.17 (5) (cm), a
14claimant may claim as a credit against the tax imposed under s. 71.23, up to the
15amount of the tax, for the taxable year in which the investment is made, an amount
16equal to 10 percent of the claimant's qualified investment in a community
17development financial institution, if the investment is at least $10,000, but not more
18than $150,000, or 12 percent of the claimant's qualified investment in a community
19development financial institution, if the investment is more than $150,000, but not
20more than $500,000.
SB43,7,321 (c) Limitations. 1. Partnerships, limited liability companies, and tax-option
22corporations may not claim the credit under this subsection, but the eligibility for,
23and the amount of, the credit are based on their payment of amounts under par. (b).
24A partnership, limited liability company, or tax-option corporation shall compute
25the amount of credit that each of its partners, members, or shareholders may claim

1and shall provide that information to each of them. Partners, members of limited
2liability companies, and shareholders of tax-option corporations may claim the
3credit in proportion to their ownership interests.
SB43,7,124 2. A person who makes an investment in a community development financial
5institution in a taxable year, withdraws the investment in that taxable year, and
6immediately reinvests the proceeds into another community development financial
7institution may claim only one credit under this subsection for that taxable year,
8based on the lesser of all such investments in that taxable year. Investments in a
9community development financial institution made before the effective date of this
10subdivision .... [LRB inserts date], may not be withdrawn prior to the end of their
11contractual term and reinvested in a community development financial institution
12in order to claim a credit under this subsection.
SB43,7,1913 3. A claimant who withdraws a qualified investment from a community
14development financial institution prior to the date of withdrawal specified in the
15written notice provided to the claimant under s. 238.17 (5) (b) and who does not
16immediately reinvest the proceeds of the qualified investment as a qualified
17investment in another community development financial institution shall add to the
18claimant's liability for taxes imposed under s. 71.23 one of the following percentages
19of the amount of the credits received under this subsection:
SB43,7,2120 a. If the withdrawal occurs during the first year after the date on which the
21claimant made the qualified investment, 100 percent.
SB43,7,2322 b. If the withdrawal occurs during the 2nd year after the date on which the
23claimant made the qualified investment, 75 percent.
SB43,7,2524 c. If the withdrawal occurs during the 3rd year after the date on which the
25claimant made the qualified investment, 50 percent.
SB43,8,2
1d. If the withdrawal occurs during the 4th year after the date on which the
2claimant made the qualified investment, 25 percent.
SB43,8,43 e. If the withdrawal occurs during the 5th year after the date on which the
4claimant made the qualified investment, 10 percent.
SB43,8,65 (d) Administration. Subsection (4) (e) to (h), as it applies to the credit under
6sub. (4), applies to the credit under this subsection.
SB43,8 7Section 8. 71.30 (3) (dr) of the statutes is created to read:
SB43,8,98 71.30 (3) (dr) Steve Hilgenberg community development credit under s. 71.28
9(5p).
SB43,9 10Section 9. 71.34 (1k) (g) of the statutes is amended to read:
SB43,8,1411 71.34 (1k) (g) An addition shall be made for credits computed by a tax-option
12corporation under s. 71.28 (1dd), (1de), (1di), (1dj), (1dL), (1dm), (1ds), (1dx), (1dy),
13(3), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn), (3t), (3w), (5e), (5f), (5g), (5h), (5i), (5j),
14(5k), (5p), (5r), (5rm), (6n), and (8r) and passed through to shareholders.
SB43,10 15Section 10. 71.45 (2) (a) 10. of the statutes is amended to read:
SB43,8,2216 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit
17computed under s. 71.47 (1dd) to (1dy), (3g), (3h), (3n), (3p), (3q), (3r), (3rm), (3rn),
18(3w), (5e), (5f), (5g), (5h), (5i), (5j), (5k), (5p), (5r), (5rm), (6n), (8r), and (9s) and not
19passed through by a partnership, limited liability company, or tax-option
20corporation that has added that amount to the partnership's, limited liability
21company's, or tax-option corporation's income under s. 71.21 (4) or 71.34 (1k) (g) and
22the amount of credit computed under s. 71.47 (1), (3), (3t), (4), (4m), and (5).
SB43,11 23Section 11. 71.47 (5p) of the statutes is created to read:
SB43,8,2524 71.47 (5p) Steve Hilgenberg community development credit. (a) Definition.
25In this subsection, "claimant" means a person who files a claim under this subsection.
SB43,9,10
1(b) Filing claims. Subject to the limitations provided under this subsection and
2the requirements under s. 238.17, for taxable years beginning after December 31,
32012, and before January 1, 2015, except as provided under s. 238.17 (5) (cm), a
4claimant may claim as a credit against the tax imposed under s. 71.43, up to the
5amount of the tax, for the taxable year in which the investment is made, an amount
6equal to 10 percent of the claimant's qualified investment in a community
7development financial institution, if the investment is at least $10,000, but not more
8than $150,000, or 12 percent of the claimant's qualified investment in a community
9development financial institution, if the investment is more than $150,000, but not
10more than $500,000.
SB43,9,1811 (c) Limitations. 1. Partnerships, limited liability companies, and tax-option
12corporations may not claim the credit under this subsection, but the eligibility for,
13and the amount of, the credit are based on their payment of amounts under par. (b).
14A partnership, limited liability company, or tax-option corporation shall compute
15the amount of credit that each of its partners, members, or shareholders may claim
16and shall provide that information to each of them. Partners, members of limited
17liability companies, and shareholders of tax-option corporations may claim the
18credit in proportion to their ownership interests.
SB43,9,2519 2. A person who makes an investment in a community development financial
20institution in a taxable year, withdraws the investment in that taxable year, and
21immediately reinvests the proceeds into another community development financial
22institution may claim only one credit under this subsection for that taxable year,
23based on the lesser of all such investments in that taxable year. Investments in a
24community development financial institution made before the effective date of this
25subdivision .... [LRB inserts date], may not be withdrawn prior to the end of their

1contractual term and reinvested in a community development financial institution
2in order to claim a credit under this subsection.
SB43,10,93 3. A claimant who withdraws a qualified investment from a community
4development financial institution prior to the date of withdrawal specified in the
5written notice provided to the claimant under s. 238.17 (5) (b) and who does not
6immediately reinvest the proceeds of the qualified investment as a qualified
7investment in another community development financial institution shall add to the
8claimant's liability for taxes imposed under s. 71.43 one of the following percentages
9of the amount of the credits received under this subsection:
SB43,10,1110 a. If the withdrawal occurs during the first year after the date on which the
11claimant made the qualified investment, 100 percent.
SB43,10,1312 b. If the withdrawal occurs during the 2nd year after the date on which the
13claimant made the qualified investment, 75 percent.
SB43,10,1514 c. If the withdrawal occurs during the 3rd year after the date on which the
15claimant made the qualified investment, 50 percent.
SB43,10,1716 d. If the withdrawal occurs during the 4th year after the date on which the
17claimant made the qualified investment, 25 percent.
SB43,10,1918 e. If the withdrawal occurs during the 5th year after the date on which the
19claimant made the qualified investment, 10 percent.
SB43,10,2120 (d) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
21s. 71.28 (4), applies to the credit under this subsection.
SB43,12 22Section 12. 71.49 (1) (dr) of the statutes is created to read:
SB43,10,2423 71.49 (1) (dr) Steve Hilgenberg community development credit under s. 71.47
24(5p).
SB43,13 25Section 13. 76.634 of the statutes is created to read:
SB43,11,10
176.634 Steve Hilgenberg community development credit. (1) Filing
2claims.
Subject to the limitations provided under this subsection and the
3requirements under s. 238.17, for taxable years beginning after December 31, 2012,
4and before January 1, 2015, except as provided under s. 238.17 (5) (cm), an insurer
5may claim as a credit against the fees due under s. 76.60, 76.63, 76.65, 76.66, or 76.67
6for the taxable year in which the investment is made, an amount equal to 10 percent
7of the insurer's qualified investment in a community development financial
8institution, if the investment is at least $10,000, but not more than $150,000, or 12
9percent of the insurer's qualified investment in a community development financial
10institution, if the investment is more than $150,000, but not more than $500,000.
SB43,11,16 11(2) Carry-forward. If the credit under sub. (1) is not entirely offset against the
12fees under s. 76.60, 76.63, 76.65, 76.66, or 76.67 otherwise due, the unused balance
13may be carried forward and credited against those fees for the following 15 years to
14the extent that it is not offset by those fees otherwise due in all the years between
15the year in which the expense was made and the year in which the carry-forward
16credit is claimed.
SB43,11,19 17(3) Limitations. (a) No credit may be allowed under this section unless the
18insurer includes with the insurer's annual return under s. 76.64 a copy of the
19insurer's certification for tax benefits under s. 238.17 (5) (b).
SB43,12,320 (b) An insurer who makes an investment in a community development
21financial institution in a taxable year, withdraws the investment in that taxable
22year, and immediately reinvests the proceeds into another community development
23financial institution may claim only one credit under this section for that taxable
24year, based on the lesser of all such investments in that taxable year. Investments
25in a community development financial institution made before the effective date of

1this paragraph .... [LRB inserts date], may not be withdrawn prior to the end of their
2contractual term and reinvested in a community development financial institution
3in order to claim a credit under this section.
SB43,12,11 4(4) Repayment. An insurer who claims a credit under this section and who
5withdraws a qualified investment from a community development financial
6institution prior to the date of withdrawal specified in the written notice provided to
7the insurer under s. 238.17 (5) (b) and does not immediately reinvest the proceeds
8of the qualified investment as a qualified investment in another community
9development financial institution shall add to the insurer's liability for fees imposed
10under s. 76.60, 76.63, 76.65, 76.66, or 76.67 one of the following percentages of the
11amount of the credits received under this subsection:
SB43,12,1312 (a) If the withdrawal occurs during the first year after the date on which the
13insurer made the qualified investment, 100 percent.
SB43,12,1514 (b) If the withdrawal occurs during the 2nd year after the date on which the
15insurer made the qualified investment, 75 percent.
SB43,12,1716 (c) If the withdrawal occurs during the 3rd year after the date on which the
17insurer made the qualified investment, 50 percent.
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