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2023 ASSEMBLY BILL 1170
March 22, 2024 - Introduced by Representatives BARE, GOYKE, BALDEH, C.
ANDERSON, CONLEY, CONSIDINE, EMERSON, JACOBSON, JOERS, OHNSTAD, PALMERI,
RATCLIFF, SHANKLAND, SINICKI, SNODGRASS, STUBBS and SUBECK, cosponsored
by Senators HESSELBEIN, AGARD, CARPENTER, L. JOHNSON, LARSON, ROYS and
SPREITZER. Referred to Committee on State Affairs.
AN ACT to amend 16.705 (9), 71.05 (6) (a) 15., 71.21 (4) (a), 71.26 (2) (a) 4., 71.34
(1k) (g) and 71.45 (2) (a) 10.; and to create 14.57, 14.69, 20.517, 20.923 (4) (c)
7., 25.52, 71.07 (4s), 71.07 (4w), 71.10 (4) (ct) and (cu), 71.28 (4s), 71.28 (4w),
71.30 (3) (ct) and (cu), 71.47 (4s), 71.47 (4w), 71.49 (1) (ct) and (cu) and 230.08
(2) (en) of the statutes; relating to: creating WisEARNS and making an
appropriation.
Analysis by the Legislative Reference Bureau
WisEARNS retirement savings program
This bill creates a program called “WisEARNS” to provide a defined
contribution retirement savings plan for employees of private employers in this state
that do not offer an employer-sponsored retirement plan or that do not offer such a
plan to all employees. A defined contribution retirement savings plan is one that
pays retirement benefits based on an individual's account balance, rather than a
prescribed formula.
The bill creates a WisEARNS Board that is attached to the Office of the State
Treasurer. Under the bill, the board consists of the following nine members: the state
treasurer or his or her designee; the secretary of financial institutions or his or her
designee; two members appointed by the governor; two members appointed,
respectively, by the speaker of the assembly and president of the senate; one member
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appointed by the state treasurer; one member appointed by the State of Wisconsin
Investment Board; and one member appointed by the other members. The bill
requires certain members to possess specified attributes or experience, and all
members serve four-year terms.
Under the bill, the state treasurer recommends a candidate for executive
director of the plan to the board, with the board approving the executive director. The
executive director serves outside the classified service and appoints staff outside the
classified service. The executive director serves at the pleasure of the board.
Under the bill, the board is required to establish the savings plan under which
employees may contribute to retirement savings accounts through payroll
deductions. Before establishing the plan, the board must conduct a legal analysis of
the applicability of the Internal Revenue Code and the Employee Retirement Income
Security Act of 1974 to the proposed plan, and must issue a request for information
from prospective vendors of a variety of defined-contribution retirement accounts
authorized under the Internal Revenue Code.
Under the bill, the default account type is a Roth IRA. The bill requires the
board to design the plan and contract with third-party investment administrators
to operate the plan. Among other requirements, the plan must do at least all of the
following: 1) require automatic participation by private employers in this state; 2)
require automatic enrollment for employees, but allow employees to opt out before
any payroll deduction is made; 3) prohibit employer contributions to employee
retirement accounts; and 4) allow an employee to roll over the amounts in an account
to a different IRS-qualified retirement account.
Also under the bill, unless the employee directs otherwise, during the
employee's first year of enrollment in the plan, the employer must make a payroll
deduction each pay period at a rate of 5 percent of the employee's gross wages, with
this rate increasing by 1 percent per year until the rate is the maximum rate allowed
under the Internal Revenue Code. Under the plan, the eligible employee must have
certain investment options within each account type, including a stable value or
capital preservation fund and a target date index fund or age-based fund. An eligible
employee's first $400 of contributions must be deposited in a savings account that is
not a retirement savings account, and thereafter, unless the employee selects a
different investment option, the employee's contributions must be deposited in a
target date index fund or age-based fund. An employee must be allowed to opt out
of this provision before the first $400 is deposited. The bill requires the board to
establish a policy for emergency withdrawals from a WisEARNS savings account
that is not a retirement savings account.
Under current law, DOA is authorized to purchase contractual services for most
bodies of state government. Under the bill, the board is exempted from some of the
requirements of contracting through DOA and instead must do all of the following
before awarding the contract: 1) conduct a cost-benefit analysis of contracting with
different vendors; 2) review and ensure the independence of the vendor and the
vendor's employees; and 3) require proof of background checks of the vendor and the
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or party to the contract that violates the contract or requirements of the law, and to
provide that list to DOA for inclusion on the ineligible list for state contracts.
Tax credits for retirement plan startup costs and automatic enrollment
The bill creates two income and franchise tax credits that may be claimed by
small businesses that have 100 or fewer employees who received at least $5,000 in
compensation during the preceding year. Both credits are based on similar federal
tax credits. The first credit may be claimed by small businesses for the costs of
setting up and administering a retirement plan and educating employees about the
plan. The credit is 50 percent of the costs, limited to the greater of $500 or the lesser
of $5,000 or $250 multiplied by the number of non-highly compensated employees
who are eligible to participate in the plan. The credit may be claimed for three
consecutive years and may be not be claimed for any costs that were deducted under
federal law. The second credit may be claimed by small businesses that provide for
automatic enrollment in their retirement plans. The credit is $500 and may be
claimed for three consecutive years, beginning with the year in which the small
business first provides for automatic enrollment.
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:
SECTION 1. 14.57 of the statutes is created to read:
14.57 Same; attached boards.
(1) WISEARNS BOARD. There is created a WisEARNS board that is attached
to the state treasurer under s. 15.03. Of the members appointed under pars. (a) to
(e), at least one must have experience in the field of investments, at least one must
have experience as the owner of a business that employs between 5 and 50 people,
and at least one must be an employee who is not eligible for or does not have access
to an employer-sponsored retirement plan. The board shall consist of the following
members appointed for 4-year terms:
(a) The state treasurer or his or her designee.
(b) The secretary of financial institutions or his or her designee.
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(c) One member who has a favorable reputation for skill, knowledge, and
experience in the field of retirement saving and investments, appointed by the
governor.
(d) One member who has a favorable reputation for skill, knowledge, and
experience relating to small business, appointed by the governor.
(e) One member who is a representative of an association representing
employees or who has a favorable reputation for skill, knowledge, and experience in
the interests of employees in retirement saving, appointed by the speaker of the
assembly.
(f) One member who has a favorable reputation for skill, knowledge, and
experience in the interests of employers in retirement saving, appointed by the
president of the senate.
(g) One member who has a favorable reputation for skill, knowledge, and
experience in retirement investment products or retirement plan designs, appointed
by the state treasurer.
(h) One member appointed by the investment board.
(i) One member appointed, notwithstanding s. 15.07 (4), by a majority vote of
all of the members identified in pars. (a) to (h).
(2) MEMBERSHIP PROHIBITED. No individual appointed under sub. (1) (a) to (h)
may be a dealer or broker in securities, or be employed by an entity that is primarily
a dealer or broker in securities, and any member who accepts such employment shall
vacate his or her membership.
SECTION 2. 14.69 of the statutes is created to read:
14.69 WisEARNS program. (1) DEFINITIONS. In this section:
(a) “Board" means the WisEARNS board.
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(b) “Earnings” means all remuneration for employment or services provided to
an individual in this state, including salary, fees, bonuses, and including the cash
value of all remuneration paid in any medium other than cash.
(c) “Eligible employee” means an employee who is 18 years of age or older who
works in this state and whose private employer does not offer a retirement savings
plan or who is not eligible to participate in a qualified retirement savings plan offered
by his or her private employer.
(d) “Investment administrator” means the vendor selected under sub. (3) (e).
(e) “Plan" means the WisEARNS plan established under sub. (3).
(f) “Private employer” means any person engaging in any activity, enterprise
or business in this state that has conducted such activity, enterprise, or business in
this state for at least 2 years after the effective date of this paragraph .... [LRB inserts
date], and did not offer a retirement plan qualified under the Internal Revenue Code
during those 2 years.
(g) “WisEARNS retirement account" means a retirement savings account
established under the plan.
(h) “WisEARNS savings account” means a savings account established under
the plan that is not a retirement savings account.
(2) DUTIES OF TREASURER, EXECUTIVE DIRECTOR, AND BOARD. (a) The treasurer
shall recommend an executive director of the plan to the board, which shall appoint
an executive director outside the classified service, to serve at the pleasure of the
board. The executive director may not be a member of the board.
(b) The executive director appointed under par. (a) shall appoint staff for the
plan outside the classified service.
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(3) ESTABLISHMENT OF PLAN. The board shall establish, implement, and oversee
a plan that meets the requirements specified in sub. (8) that shall enroll eligible
employees beginning not more than 2 years after the effective date of this subsection
.... [LRB inserts date]. Before establishing and implementing the plan, the board
shall do all of the following:
(a) Conduct a legal analysis regarding the applicability of the federal Employee
Retirement Income Security Act of 1974, 29 USC 1001 to 1461, and the Internal
Revenue Code to the proposed plan.
(b) Enter into interagency agreements with the department of revenue, the
department of financial institutions, and the department of workforce development
to assist the board in providing outreach services to private employers and
employees.
(c) Prepare and issue a request for information from prospective vendors of
retirement savings accounts described in 26 USC 408 (a), individual retirement
annuities described in 26 USC 408 (b), individual retirement bonds, and individual
savings accounts to determine the feasibility of the proposed plan and the existence
of plans in the private market that meet the requirements set forth in sub. (8).
(d) Investigate ways of allowing individuals who are not automatically enrolled
in the plan to enroll in the plan and make contributions to retirement savings
accounts.
(e) Based on the results of the request for information under par. (c), prepare
and issue a request for proposals from prospective vendors and select a vendor. The
board shall determine the factors to be considered in selecting a vendor for the plan,
which shall include the ability of the vendor to meet all of the requirements of the
plan set forth in sub. (8) (a) to (z). Sections 16.705 and 16.75 do not apply to a contract
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entered into under this section. Before awarding a contract under this section, the
board shall do all of the following:
1. Conduct a cost-benefit analysis to identify and compare the total cost,
quality, and technical expertise of the vendors that submitted proposals.
2. Review the independence and relationship, if any, of the vendors that
submitted proposals to employees of the board and the disclosure of any former
employment of the vendor or employees of the vendor with the board, to minimize the
likelihood of selection of a vendor that provides or is likely to provide services to
industries, client groups, or individuals who are the object of state regulation or the
recipients of state funding to a degree that the vendor's independence would be
compromised.
3. If the vendor or employees of the vendor have access to federal tax
information received directly from the federal internal revenue service or from a
source that is authorized by the federal internal revenue service, for the performance
of services under the contract under this section, require proof of a background
investigation on each individual performing the services. Such a background check
shall meet the standards established by the federal internal revenue service under
26 USC 6103 (p) (4) (C).
(f) Ensure compliance by the plan with all applicable provisions of the Internal
Revenue Code and U.S. department of treasury regulations.
(5) INELIGIBLE VENDOR LIST. The board shall maintain a list of persons that are
or have been a party to a contract under this section that have violated a provision
of this section or a contract under this section. The board shall annually forward this
list to the department of administration for inclusion in the ineligible vendor list
under s. 16.705 (9).
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(6) POWERS OF BOARD. The board may do any of the following:
(a) Enter into contracts or other arrangements for any of the following services
as necessary for implementing and overseeing the plan and otherwise carrying out
the purposes of this section:
1. The services of financial institutions and depositories and of consultants,
accountants, attorneys, investment advisers, investment administrators, 3rd-party
administrators, and other professionals.
2. The services of other state agencies under interagency agreements under
sub. (3) (b).
(b) Solicit and accept contributions, gifts, grants, and bequests for the
WisEARNS plan administration trust fund or for any other purpose for which a
contribution, gift, grant, or bequest is made and received. Moneys received under
this paragraph shall be deposited in the WisEARNS plan administration trust fund.
(c) Enter into agreements with other governmental entities in this state or
outside this state, which maintain retirement savings programs similar to
WisEARNS, to collectively invest the assets of the plan to the extent allowed by
federal law to benefit retirement savings account holders participating in the plan
by achieving efficiencies designed to minimize costs for the plan and retirement
savings account holders participating in the plan.
(7) DUTIES OF BOARD. The board shall do all of the following:
(a) Promulgate rules for the administration of the plan.
(b) Collect application, account, or administrative fees to defray the costs of
administering the plan at the lowest cost possible. Fees collected under this
paragraph shall be deposited in the WisEARNS plan administration trust fund. Fees
under this paragraph may not be linked to the value of the trust fund.
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(c) Establish a policy for the investment of moneys contributed to a retirement
savings account, and direct the investment of such moneys in a manner that is
consistent with any investment restrictions established by the board. Those
investment restrictions shall be consistent with the objectives of the plan and with
the standard of responsibility specified in s. 25.15 (2).
(d) Evaluate the need for, and procure as needed, insurance to cover any
liabilities of the plan and to cover each member of the board for loss or liability
resulting from the board member's act or omission as a member of the board.
(e) Determine the eligibility of employers, employees, or individuals to
participate in the plan.
(f) Establish policies for emergency withdrawals from WisEARNS savings
accounts.
(g) Annually review the performance of vendors regarding, at a minimum,
investment returns, fees, and customer service, and publish results of the review on
the plan's Internet site.
(h) Exercise any other powers as may be necessary to oversee the plan and
otherwise carry out the purposes of this section.
(8) REQUIREMENTS FOR PLAN. The board shall design the plan so that it meets
all of the following requirements:
(a) The plan allows eligible individuals employed for compensation in this state
by a private employer in this state to contribute to WisEARNS accounts through
payroll deductions. The plan allows self-employed individuals with earnings in this
state to contribute to WisEARNS accounts.
(b) The plan requires all private employers in this state to withhold and remit
employee contributions to the plan through payroll deductions. If an employer offers
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a qualified retirement plan under the Internal Revenue Code, including a plan
qualified under section 401 (a) or (k), 403 (a) or (b), 408 (k), or 457 (b) of the Internal
Revenue Code, the employer does not need to withhold and remit employee
contributions for employees who are eligible to participate in the
employer-sponsored plan.
(c) Except as provided in par. (d), the plan provides that the default individual
retirement account is a Roth IRA account.
(d) If the plan offers options for account types other than a Roth IRA, the plan
allows an enrolled eligible employee to select any of these other account types for
investing contributions under the plan.
(e) The plan provides an eligible employee who is enrolled in the plan with
multiple investment options within each account type, which may include any of the
following investment options:
1. A stable value or capital preservation fund.
2. A target date index fund or age-based fund that automatically rebalances
asset allocations based on the eligible employee's age.
3. A low-cost fund focused on income generation.
4. A low-cost fund focused on asset growth.
5. A low-cost fund focused on balancing risk and return.
(f) The investment policy for the plan includes all of the following concepts:
1. Best practices in the industry for retirement savings vehicles.
2. The promotion of portability of retirement savings accounts.
3. The minimization of fees and expenses.
4. The maximization of possible income replacement, balanced with
appropriate levels of risk.
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(g) The plan requires the investment administrator to offer to each enrolled
eligible employee, before the employee makes his or her investment selections, a tool
allowing the employee to identify the employee's risk tolerance and projected
retirement date as an aid to the employee in selecting suitable investments under
the plan.
(h) The plan requires that the first $400 of an enrolled eligible employee's
contributions be deposited in a WisEARNS savings account and thereafter, unless
the employee selects a different investment option, the employee's contributions be
to a WisEARNS retirement account and deposited in a fund described in par. (e) 2.
The plan shall allow an employee to select a different investment option before the
first $400 is deposited in a WisEARNS retirement account. An employee shall be
allowed to withdraw the first $400 for emergency use from the employee' s
WisEARNS savings account, and contributions subsequent to the withdrawal shall
be deposited in the WisEARNS savings account until the amount in the employee's
WisEARNS savings account is restored to $400.
(i) Except as provided in par. (k), during an eligible employee's first year of
enrollment in the plan, the participating employer's payroll deduction each pay
period shall be at a rate of 5 percent of the employee's gross wages, and this deducted
amount shall be remitted to the investment administrator as the employee's account
contribution.
(j) Except as provided in par. (k), a participating employer shall increase the
payroll deduction rate under par. (i) by 1 percent per year until the payroll deduction
rate is the maximum allowed under the Internal Revenue Code.
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(k) An enrolled eligible employee may elect a different payroll deduction rate
than that provided for in pars. (i) and (j), except that the rate may not be less than
1 percent or more than the maximum allowed under the Internal Revenue Code.
(L) The plan sets forth a process for enrollment of eligible employees in the
plan, which shall include all of the following processes:
1. Automatic enrollment of eligible employees in the plan.
2. Opting out of enrollment in the plan before any payroll deduction is made.
3. Opting out of enrollment in the plan at any time after a payroll deduction
is made.
4. Changing the payroll deduction rate from that provided for in pars. (i) and
(j)
(m) The plan provides a process for all of the following:
1. Employer withholding from employees' wages contributions to WisEARNS
accounts and remittance of those contributions to the investment administrator of
the plan.
2. Eligible employees' and self-employed individuals' nonpayroll contributions
to their WisEARNS retirement accounts.
3. Emergency withdrawals from WisEARNS savings accounts in accordance
with procedures established by the board under sub. (7) (f).
(n) The plan requires contributions to WisEARNS accounts to be deposited
directly with the investment administrator of the plan.
(o) The plan, to the greatest extent possible, uses existing employer and public
infrastructure to facilitate contributions to WisEARNS accounts and outreach to
employees and private employers.
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(p) The plan prohibits employer contribution to an employee WisEARNS
account.
(q) The plan requires the maintenance of separate records and accounting for
each WisEARNS account and provides for reports on the status of accounts to be
provided to plan participants at least once per quarter.
(r) The plan allows the owner of a WisEARNS retirement account to maintain
that account regardless of his or her place of employment and to roll over money from
that account to other retirement accounts as allowed under the Internal Revenue
Code.
(s) The plan provides for the pooling of WisEARNS retirement accounts for
investment purposes by the investment administrator of the plan.
(t) The plan is professionally managed in a way that keeps administrative costs
low. The plan shall allow the investment administrator of the plan to charge and
collect application, account, and administrative fees in an amount that does not
exceed an amount that is sufficient to defray the costs of administering the plan.
(u) The plan provides that the state and any employer participating in the plan
have no proprietary interest in an employee's contributions to a WisEARNS account
or in the earnings of such an account.
(v) The plan provides that the investment administrator of the plan is the
trustee of all contributions to a WisEARNS account and earnings on those
contributions.
(w) The plan does not impose any duties under the federal Employee
Retirement Income Security Act of 1974, 29 USC 1001 to 1461, on an employer and
does not expose any employer or the state, either as an employer or in the
administration of the plan, to any potential liability under that act.
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(x) The plan provides a process for making withdrawals from an employee's
WisEARNS retirement account.
(y) The plan sets forth the requirements that an employer that offers a qualified
retirement plan described in par. (b) must meet in order to obtain an exemption from
the requirement under par. (b) that the employer withhold and remit employee
contributions to the plan through payroll deductions and a process for obtaining such
an exemption.
(z) The plan sets forth the contents and frequency of disclosures that the board
must make to employers, eligible employees and other individuals participating in
the plan. Those disclosures shall include all of the following:
1. A discussion of the benefits and risks associated with making contributions
to a retirement savings account.
2. Instructions on the process for making contributions to a WisEARNS
account, opting out of participation in the plan, and making withdrawals from a
WisEARNS account.
3. Instructions on how to obtain additional information about the plan.
4. A notice advising that employees should contact a financial or investment
adviser for financial or investment advice, that participating employers may not
provide financial or investment advice, and that participating employers are not
liable for financial or investment decisions made by an employee.
5. A notice advising that the plan is not an employer-sponsored retirement
savings plan.
6. A notice that a rate of interest or return on a WisEARNS retirement account,
and the payment of principal, interest, or a return on such an account, are not
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guaranteed by the state and that the state may not be held liable for any loss incurred
by any person as a result of participating in the plan.
(9) CONSTRUCTION. Nothing in this section guarantees any rate of interest or
return on a WisEARNS retirement account or the payment of principal, interest, or
a return on such an account. The state may not be held liable for any loss incurred
by any person as a result of participating in the plan.
(10) CONFIDENTIALITY. All personal and financial information pertaining to the
owner or a beneficiary of a WisEARNS account is confidential and may not be
disclosed except as follows:
(a) As necessary to administer the plan, the tax laws of this state, and the
Internal Revenue Code.
(b) With the prior written consent of the subject of the information.
(11) LIABILITY FOR PRIVATE EMPLOYERS. No private employer is a fiduciary with
respect to the plan. No private employer is liable for any of the following with respect
to the plan or an eligible employee:
(a) An eligible employee's decision to participate in the plan.
(b) Investment decisions made by the board or an eligible employee who
participates in the plan.
(c) The administration or investment performance of the plan, including any
interest rate or other rate of return on any contribution or account balance.
(d) The plan design.
(e) An eligible employee's familiarity with and compliance with the applicable
provisions of the Internal Revenue Code and U.S. department of treasury
regulations related to individual retirement accounts.
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(f) Any loss, failure to realize any gain, or other adverse consequences,
including any adverse tax consequences or loss of favorable tax treatment, public
assistance, or other benefits, incurred by any eligible employee as a result of
participating in the plan.
(12) LIABILITY OF BOARD AND STATE. No cause of action of any nature may arise
against and no civil liability may be imposed upon a member of the board for any act
or omission in the performance of his or her powers and duties related to the plan,
unless the individual asserting liability proves that the act or omission constitutes
willful misconduct. No cause of action of any nature may arise against and no civil
liability may be imposed upon the state or an employee of the state for any act or
omission related to the powers and duties of the state or employee in the performance
of any powers or duties related to the plan unless the individual asserting liability
proves that the act or omission constitutes willful misconduct. No member of the
board, the state, board or commission of the state, appointee, or employee of the state
is liable for any of the following:
(a) An eligible employee's familiarity with and compliance with the applicable
provisions of the Internal Revenue Code and U.S. department of treasury
regulations related to individual retirement accounts.
(b) The interest rate or other rate of return, on an account balance or
investment performance.
(c) Any loss, failure to realize any gain, or other adverse consequences,
including any adverse tax consequences or loss of favorable tax treatment, public
assistance, or other benefits, incurred by any eligible employee as a result of
participating in the plan.
(d) The debts, contracts, and obligations of the plan or the board.
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(13) REPORTS. (a) By October 15 of each year, the board shall submit a report
of its activities to the governor and the appropriate standing committees of the
legislature under s. 13.172 (3). The report shall include information on the
performance of the plan and any recommended changes to the plan.
(b) By January 1, 2028, the board shall submit a report of its activities to the
governor and the appropriate standing committees of the legislature under s. 13.172
(3).
(14) STANDARD OF RESPONSIBILITY. Members of the board and any 3rd-party
administrators of the plan shall discharge their duties as fiduciaries with respect to
the trust fund under s. 25.52 for the interest of eligible employees who participate
in the plan as follows:
(a) To administer assets of the trust fund solely for the purpose of providing
benefits to eligible employees who are enrolled in the plan at a reasonable cost and
not for any other purpose.
(b) To manage the money and property of the trust fund with the care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent
person acting in a similar capacity, with the same resources, and familiar with like
matters exercises in the conduct of an enterprise of a like character with like aims.
(15) ASSISTANCE. The office of the state treasurer shall provide the board with
any assistance necessary to carry out this section, including staff, equipment, and
office space.
SECTION 3. 16.705 (9) of the statutes is amended to read:
16.705 (9) The department shall maintain a list of persons that are or have
been a party to a contract with the state under this subchapter or s. 14.69 who have
violated a provision of this subchapter or a contract under this subchapter or s. 14.69.
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The parties on the list are ineligible for state contracts and no state contract may be
awarded to a party on the ineligible list. The department may remove any party from
the ineligible list if the department determines that the party's practices comply with
this subchapter or s. 14.69 and provide adequate safeguards against future
violations of this subchapter or s. 14.69 or contracts under this subchapter or s. 14.69.
SECTION 4. 20.005 (3) (schedule) of the statutes: at the appropriate place, insert
the following amounts for the purposes indicated:
2023-24 2024-25
20.517 WisEARNS board
(1) WISEARNS PLAN
(a)Establishment and administra
tion of plan GPR B $200,000 $200,000
SECTION 5. 20.517 of the statutes is created to read:
20.517 WisEARNS. There is appropriated to the WisEARNS board for the
following programs:
(1) WISEARNS PLAN. (a) Establishment and administration of plan.
Biennially, the amounts in the schedule to establish and administer the plan under
s. 14.69.
(q) Board operating expenses; WisEARNS plan administration trust fund.
From the WisEARNS plan administration trust fund, all moneys deposited in that
fund under s. 14.69 (7) (b) for the operating expenses of the board.
(r) Gifts and grants; WisEARNS plan administration trust fund. From the
WisEARNS plan administration trust fund, all moneys received as contributions,
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gifts, grants, and bequests for that trust fund under s. 14.69 (6) (b) to carry out the
purposes for which made and received.
SECTION 6. 20.923 (4) (c) 7. of the statutes is created to read:
20.923 (4) (c) 7. State treasurer; WisEARNS board: executive director.
SECTION 7. 25.52 of the statutes is created to read:
25.52 WisEARNS plan administration trust fund. There is established a
separate nonlapsible trust fund designated as the WisEARNS plan administration
trust fund, to consist of all moneys deposited in that fund under s. 14.69 (6) (b) and
(7) (b).
SECTION 8. 71.05 (6) (a) 15. of the statutes is amended to read:
71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dm),
(2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n), (4s), (4w), (5e),
(5i), (5j), (5k), (5r), (5rm), (6n), and (10) 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).
SECTION 9. 71.07 (4s) of the statutes is created to read:
71.07 (4s) RETIREMENT PLAN STARTUP COSTS TAX CREDIT. (a) Definitions. In this
subsection:
1. “Claimant” means an eligible employer, as defined in section 45E (c) of the
Internal Revenue Code, that files a claim under this subsection.
2. “First credit year” has the meaning given in section 45E (d) (3) of the Internal
Revenue Code.
3. “Qualified startup costs” has the meaning given in section 45E (d) (1) of the
Internal Revenue Code.
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(b) Filing claims. Subject to the limitations provided in this subsection, a
claimant may claim as a credit against the taxes imposed under s. 71.02, up to the
amount of the tax, an amount equal to 50 percent of the qualified startup costs paid
or incurred by the claimant during the taxable year.
(c) Limitations. 1. The credit claimed under this subsection in a taxable year
may not exceed the greater of the following:
a. $500.
b. The lesser of $250 for each employee of the claimant who is not a highly
compensated employee, as defined in section 414 (q) of the Internal Revenue Code,
or $5,000.
2. The credit under this subsection may be claimed only for 3 consecutive
taxable years beginning with the first credit year.
3. The rules under section 45E (e) (1) and (3) of the Internal Revenue Code apply
to the credit under this subsection.
4. No credit may be claimed under this subsection for an amount that is
deducted under section 162 of the Internal Revenue Code.
5. A partnership, limited liability company, or tax-option corporation may not
claim the credit under this subsection, but the partners, members, and shareholders
may claim the credit based on the payments of the qualified startup costs by the
partnership, limited liability company, or tax-option corporation. The partnership,
limited liability company, or tax-option corporation shall calculate the amount of the
credit that may be claimed by each partner, member, or shareholder and shall
provide that information to each of them. The partners, members, and shareholders
may claim the credit in proportion to their ownership interests.
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(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.
SECTION 10. 71.07 (4w) of the statutes is created to read:
71.07 (4w) AUTO-ENROLLMENT TAX CREDIT. (a) Definitions. In this subsection:
1. “Claimant” means an eligible employer, as defined in section 408 (p) (2) (C)
(i) of the Internal Revenue Code, that includes an eligible automatic contribution
arrangement in a qualified employer plan that is sponsored by the claimant and that
files a claim under this subsection.
2. “Eligible automatic contribution arrangement” has the meaning given in
section 414 (w) (3) of the Internal Revenue Code.
3. “Qualified employer plan” has the meaning given in section 4972 (d) (1) of
the Internal Revenue Code.
(b) Filing claims. Subject to the limitations provided in this subsection, a
claimant may claim as a credit against the taxes imposed under s. 71.02, up to the
amount of the tax, $500.
(c) Limitations. 1. The credit under this subsection may be claimed only for
3 consecutive taxable years beginning with the first taxable year for which the
claimant includes an eligible automatic contribution arrangement in a qualified
employer plan that is sponsored by the claimant, except that no credit may be
claimed in a taxable year if an eligible automatic contribution arrangement is not
included in the qualified employer plan for that taxable year.
2. A partnership, limited liability company, or tax-option corporation may not
claim the credit under this subsection, but the partners, members, and shareholders
may claim the credit based on the inclusion by the partnership, limited liability
company, or tax-option corporation of an eligible automatic contribution
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SECTION 10 ASSEMBLY BILL 1170
arrangement in a qualified employer plan that is sponsored by the partnership,
limited liability company, or tax-option corporation. The partnership, limited
liability company, or tax-option corporation shall calculate the amount of the credit
that may be claimed by each partner, member, or shareholder and shall provide that
information to each of them. The partners, members, and shareholders may claim
the credit in proportion to their ownership interests.
(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.
SECTION 11. 71.10 (4) (ct) and (cu) of the statutes are created to read:
71.10 (4) (ct) Retirement plan startup costs tax credit under s. 71.07 (4s).
(cu) Auto-enrollment tax credit under s. 71.07 (4w).
SECTION 12. 71.21 (4) (a) of the statutes is amended to read:
71.21 (4) (a) The amount of the credits computed by a partnership under s.
71.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n),
(4s), (4w), (5e), (5g), (5i), (5j), (5k), (5r), (5rm), (6n), and (10) and passed through to
partners shall be added to the partnership's income.
SECTION 13. 71.26 (2) (a) 4. of the statutes is amended to read:
71.26 (2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dm),
(1dx), (1dy), (3g), (3h), (3n), (3q), (3t), (3w), (3wm), (3y), (4s), (4w), (5e), (5g), (5i), (5j),
(5k), (5r), (5rm), (6n), and (10) 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).
SECTION 14. 71.28 (4s) of the statutes is created to read:
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71.28 (4s) RETIREMENT PLAN STARTUP COSTS TAX CREDIT. (a) Definitions. In this
subsection:
1. “Claimant” means an eligible employer, as defined in section 45E (c) of the
Internal Revenue Code, that files a claim under this subsection.
2. “First credit year” has the meaning given in section 45E (d) (3) of the Internal
Revenue Code.
3. “Qualified startup costs” has the meaning given in section 45E (d) (1) of the
Internal Revenue Code.
(b) Filing claims. Subject to the limitations provided in this subsection, a
claimant may claim as a credit against the taxes imposed under s. 71.23, up to the
amount of the tax, an amount equal to 50 percent of the qualified startup costs paid
or incurred by the claimant during the taxable year.
(c) Limitations. 1. The credit claimed under this subsection in a taxable year
may not exceed the greater the following:
a. $500.
b. The lesser of $250 for each employee of the claimant who is not a highly
compensated employee, as defined in section 414 (q) of the Internal Revenue Code,
or $5,000.
2. The credit under this subsection may be claimed only for 3 consecutive
taxable years beginning with the first credit year.
3. The rules under section 45E (e) (1) and (3) of the Internal Revenue Code apply
to the credit under this subsection.
4. No credit may be claimed under this subsection for an amount that is
deducted under section 162 of the Internal Revenue Code.
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SECTION 14 ASSEMBLY BILL 1170
5. A partnership, limited liability company, or tax-option corporation may not
claim the credit under this subsection, but the partners, members, and shareholders
may claim the credit based on the payment of the qualified startup costs by the
partnership, limited liability company, or tax-option corporation. The partnership,
limited liability company, or tax-option corporation shall calculate the amount of the
credit that may be claimed by each partner, member, or shareholder and shall
provide that information to each of them. The partners, members, and shareholders
may claim the credit in proportion to their ownership interests.
(d) Administration. Subsection (4) (e) to (h), as it applies to the credit under
sub. (4), applies to the credit under this subsection.
SECTION 15. 71.28 (4w) of the statutes is created to read:
71.28 (4w) AUTO-ENROLLMENT TAX CREDIT. (a) Definitions. In this subsection:
1. “Claimant” means an eligible employer, as defined in section 408 (p) (2) (C)
(i) of the Internal Revenue Code, that includes an eligible automatic contribution
arrangement in a qualified employer plan that is sponsored by the claimant and that
files a claim under this subsection.
2. “Eligible automatic contribution arrangement” has the meaning given in
section 414 (w) (3) of the Internal Revenue Code.
3. “Qualified employer plan” has the meaning given in section 4972 (d) (1) of
the Internal Revenue Code.
(b) Filing claims. Subject to the limitations provided in this subsection, a
claimant may claim as a credit against the taxes imposed under s. 71.23, up to the
amount of the tax, $500.
(c) Limitations. 1. The credit under this subsection may be claimed only for
3 consecutive taxable years beginning with the first taxable year for which the
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claimant includes an eligible automatic contribution arrangement in a qualified
employer plan that is sponsored by the claimant, except that no credit may be
claimed in a taxable year if an eligible automatic contribution arrangement is not
included in the qualified employer plan for that taxable year.
2. A partnership, limited liability company, or tax-option corporation may not
claim the credit under this subsection, but the partners, members, and shareholders
may claim the credit based on the inclusion by the partnership, limited liability
company, or tax-option corporation of an eligible automatic contribution
arrangement in a qualified employer plan that is sponsored by the partnership,
limited liability company, or tax-option corporation. The partnership, limited
liability company, or tax-option corporation shall calculate the amount of the credit
that may be claimed by each partner, member, or shareholder and shall provide that
information to each of them. The partners, members, and shareholders may claim
the credit in proportion to their ownership interests.
(d) Administration. Subsection (4) (e) to (h), as it applies to the credit under
sub. (4), applies to the credit under this subsection.
SECTION 16. 71.30 (3) (ct) and (cu) of the statutes are created to read:
71.30 (3) (ct) Retirement plan startup costs tax credit under s. 71.28 (4s).
(cu) Auto-enrollment tax credit under s. 71.28 (4w).
SECTION 17. 71.34 (1k) (g) of the statutes is amended to read:
71.34 (1k) (g) An addition shall be made for credits computed by a tax-option
corporation under s. 71.28 (1dm), (1dx), (1dy), (3), (3g), (3h), (3n), (3q), (3t), (3w),
(3wm), (3y), (4), (4s), (4w), (5), (5e), (5g), (5i), (5j), (5k), (5r), (5rm), (6n), and (10) and
passed through to shareholders.
SECTION 18. 71.45 (2) (a) 10. of the statutes is amended to read:
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SECTION 18 ASSEMBLY BILL 1170
71.45 (2) (a) 10. By adding to federal taxable income the amount of credit
computed under s. 71.47 (1dm) to (1dy), (3g), (3h), (3n), (3q), (3w), (3y), (4s), (4w), (5e),
(5g), (5i), (5j), (5k), (5r), (5rm), (6n), and (10) 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 (3), (3t), (4), (4m), and (5).
SECTION 19. 71.47 (4s) of the statutes is created to read:
71.47 (4s) RETIREMENT PLAN STARTUP COSTS TAX CREDIT. (a) Definitions. In this
subsection:
1. “Claimant” means an eligible employer, as defined in section 45E (c) of the
Internal Revenue Code, that files a claim under this subsection.
2. “First credit year” has the meaning given in section 45E (d) (3) of the Internal
Revenue Code.
3. “Qualified startup costs” has the meaning given in section 45E (d) (1) of the
Internal Revenue Code.
(b) Filing claims. Subject to the limitations provided in this subsection, a
claimant may claim as a credit against the taxes imposed under s. 71.43, up to the
amount of the tax, an amount equal to 50 percent of the qualified startup costs paid
or incurred by the claimant during the taxable year.
(c) Limitations. 1. The credit claimed under this subsection in a taxable year
may not exceed the greater the following:
a. $500.
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b. The lesser of $250 for each employee of the claimant who is not a highly
compensated employee, as defined in section 414 (q) of the Internal Revenue Code,
or $5,000.
2. The credit under this subsection may be claimed only for 3 consecutive
taxable years beginning with the first credit year.
3. The rules under section 45E (e) (1) and (3) of the Internal Revenue Code apply
to the credit under this subsection.
4. No credit may be claimed under this subsection for an amount that is
deducted under section 162 of the Internal Revenue Code.
5. A partnership, limited liability company, or tax-option corporation may not
claim the credit under this subsection, but the partners, members, and shareholders
may claim the credit based on the payment of the qualified startup costs by the
partnership, limited liability company, or tax-option corporation. The partnership,
limited liability company, or tax-option corporation shall calculate the amount of the
credit that may be claimed by each partner, member, or shareholder and shall
provide that information to each of them. The partners, members, and shareholders
may claim the credit in proportion to their ownership interests.
(d) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
sub. (4), applies to the credit under this subsection.
SECTION 20. 71.47 (4w) of the statutes is created to read:
71.47 (4w) AUTO-ENROLLMENT TAX CREDIT. (a) Definitions. In this subsection:
1. “Claimant” means an eligible employer, as defined in section 408 (p) (2) (C)
(i) of the Internal Revenue Code, that includes an eligible automatic contribution
arrangement in a qualified employer plan that is sponsored by the claimant and that
files a claim under this subsection.
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SECTION 20 ASSEMBLY BILL 1170
2. “Eligible automatic contribution arrangement” has the meaning given in
section 414 (w) (3) of the Internal Revenue Code.
3. “Qualified employer plan” has the meaning given in section 4972 (d) (1) of
the Internal Revenue Code.
(b) Filing claims. Subject to the limitations provided in this subsection, a
claimant may claim as a credit against the taxes imposed under s. 71.43, up to the
amount of the tax, $500.
(c) Limitations. 1. The credit under this subsection may be claimed only for
3 consecutive taxable years beginning with the first taxable year for which the
claimant includes an eligible automatic contribution arrangement in a qualified
employer plan that is sponsored by the claimant, except that no credit may be
claimed in a taxable year if an eligible automatic contribution arrangement is not
included in the qualified employer plan for that taxable year.
2. A partnership, limited liability company, or tax-option corporation may not
claim the credit under this subsection, but the partners, members, and shareholders
may claim the credit based on the inclusion by the partnership, limited liability
company, or tax-option corporation of an eligible automatic contribution
arrangement in a qualified employer plan that is sponsored by the partnership,
limited liability company, or tax-option corporation. The partnership, limited
liability company, or tax-option corporation shall calculate the amount of the credit
that may be claimed by each partner, member, or shareholder and shall provide that
information to each of them. The partners, members, and shareholders may claim
the credit in proportion to their ownership interests.
(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.
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SECTION 21. 71.49 (1) (ct) and (cu) of the statutes are created to read:
71.49 (1) (ct) Start-up retirement plan costs tax credit under s. 71.47 (4s).
(cu) Auto-enrollment tax credit under s. 71.47 (4w).
SECTION 22. 230.08 (2) (en) of the statutes is created to read:
230.08 (2) (en) State treasurer; WisEARNS board: executive director and staff.
SECTION 23.0Initial applicability.
(1) TAX CREDITS. The treatment of ss. 71.05 (6) (a) 15., 71.07 (4s) and (4w), 71.10
(4) (ct) and (cu), 71.21 (4) (a), 71.26 (2) (a) 4., 71.28 (4s) and (4w), 71.30 (3) (ct) and
(cu), 71.34 (1k) (g), 71.45 (2) (a) 10., 71.47 (4s) and (4w), and 71.49 (1) (ct) and (cu)
first applies to taxable years beginning on January 1 of the year in which this
subsection takes effect, except that if this subsection takes effect after July 31, this
act first applies to taxable years beginning on January 1 of the year following the
year in which this subsection takes effect.
(END)
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