Wisconsin 2023-2024 Regular Session

Wisconsin Senate Bill SB40 Compare Versions

Only one version of the bill is available at this time.

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3	3	2023 - 2024 LEGISLATURE
4	4	2023 SENATE BILL 40
5	5	February 3, 2023 - Introduced by Senators FEYEN and QUINN, cosponsored by
6	6	Representatives ARMSTRONG, KURTZ, ALLEN, DITTRICH, EDMING, GREEN,
7	7	KITCHENS, MAGNAFICI, MURPHY, MURSAU, NOVAK, SNYDER, SPIROS, TUSLER and
8	8	VANDERMEER. Referred to Committee on Housing, Rural Issues and Forestry.
9	9	AN ACT to renumber 76.639 (3); to amend 71.07 (8b) (e), 71.28 (8b) (e), 71.47 (8b)
10	10	(e), 76.639 (5), 76.67 (2), 234.45 (1) (e) and 234.45 (4); and to create 76.639 (3)
11	11	(b), 234.45 (1) (em) and 234.45 (5m) of the statutes; relating to: changes to the
12	12	low-income housing tax credit.
13	13	Analysis by the Legislative Reference Bureau
14	14	Under current law, the Wisconsin Housing and Economic Development
15	15	Authority administers a low-income housing tax credit program. Under that
16	16	program, a person may claim as a credit against the person's income or franchise tax
17	17	liability, or against the person's liability for fees imposed on an insurer, the amount
18	18	allocated by WHEDA in an “allocation certificate” for a qualified low-income housing
19	19	project. The annual amount of tax credits WHEDA certifies under the program may
20	20	not exceed $42,000,000. The bill increases that annual cap to $100,000,000.
21	21	The bill also requires that WHEDA, if possible, ensure that at least 35 percent
22	22	of the tax credits it allocates each year under the program are for qualified
23	23	low-income housing projects in rural areas in Wisconsin and removes the
24	24	requirement that a qualified low-income housing project be financed with
25	25	tax-exempt bonds.
26	26	Finally, the bill makes a technical change to the credit for insurers so that an
27	27	insurer who is a shareholder of a tax-option corporation, a partner of a partnership,
28	28	or a member of a limited liability company may claim the credit.
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34	34	SENATE BILL 40
35	35	For further information see the state fiscal estimate, which will be printed as
36	36	an appendix to this bill.
37	37	The people of the state of Wisconsin, represented in senate and assembly, do
38	38	enact as follows:
39	39	SECTION 1. 71.07 (8b) (e) of the statutes is amended to read:
40	40	71.07 (8b) (e) Administration. Section 71.28 (4) (e) to (h), as it applies to the
41	41	credit under s. 71.28 (4), applies to the credit under this subsection. In addition, if
42	42	a credit computed under this subsection is not entirely offset against Wisconsin
43	43	income or franchise taxes otherwise due, the unused balance may be carried back
44	44	and credited against Wisconsin income or franchise taxes otherwise due for the
45	45	previous taxable year.
46	46	SECTION 2. 71.28 (8b) (e) of the statutes is amended to read:
47	47	71.28 (8b) (e) Administration. Subsection (4) (e) to (h), as it applies to the credit
48	48	under sub. (4), applies to the credit under this subsection. In addition, if a credit
49	49	computed under this subsection is not entirely offset against Wisconsin income or
50	50	franchise taxes otherwise due, the unused balance may be carried back and credited
51	51	against Wisconsin income or franchise taxes otherwise due for the previous taxable
52	52	year.
53	53	SECTION 3. 71.47 (8b) (e) of the statutes is amended to read:
54	54	71.47 (8b) (e) Administration. Section 71.28 (4) (e) to (h), as it applies to the
55	55	credit under s. 71.28 (4), applies to the credit under this subsection. In addition, if
56	56	a credit computed under this subsection is not entirely offset against Wisconsin
57	57	income or franchise taxes otherwise due, the unused balance may be carried back
58	58	and credited against Wisconsin income or franchise taxes otherwise due for the
59	59	previous taxable year.
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83	83	SECTION 4
84	84	SENATE BILL 40
85	85	SECTION 4. 76.639 (3) of the statutes is renumbered 76.639 (3) (a).
86	86	SECTION 5. 76.639 (3) (b) of the statutes is created to read:
87	87	76.639 (3) (b) A partnership, limited liability company, or tax-option
88	88	corporation may not claim the credit under this section. An insurer, if a partner of
89	89	a partnership, member of a limited liability company, or shareholder in a tax-option
90	90	corporation, may claim the credit under this section based on eligible costs incurred
91	91	by the partnership, limited liability company, or tax-option corporation. The
92	92	partnership, limited liability company, or tax-option corporation shall calculate the
93	93	amount of the credit that may be claimed by the insurer as a partner, member, or
94	94	shareholder and shall provide that information to the insurer. If an insurer is a
95	95	shareholder of a tax-option corporation, the credit may be allocated in proportion to
96	96	its ownership interest as a shareholder. If an insurer is a partner of a partnership
97	97	or member of a limited liability company, credits may be claimed in proportion to the
98	98	insurer's ownership interest or allocated to the insurer as provided in a written
99	99	agreement among the partners or members that is entered into no later than the last
100	100	day of the taxable year of the partnership or limited liability company for which the
101	101	credit is claimed. Any insurer who claims the credit as allocated by a written
102	102	agreement shall provide a copy of the agreement with the tax return on which the
103	103	credit is claimed.
104	104	SECTION 6. 76.639 (5) of the statutes is amended to read:
105	105	76.639 (5) CARRY-FORWARD; CARRY-BACK . If the credit under sub. (2) is not
106	106	entirely offset against the fees under s. 76.60, 76.63, 76.65, 76.66, or 76.67 otherwise
107	107	due, the unused balance may be carried forward and credited against those fees for
108	108	the following 15 years to the extent that it is not offset by those fees otherwise due
109	109	in all the years between the year in which the expense was made and the year in
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136	136	SECTION 6 SENATE BILL 40
137	137	which the carry-forward credit is claimed. In addition, if a credit computed under
138	138	sub. (2) is not entirely offset against the fees under s. 76.60, 76.63, 76.65, 76.66, or
139	139	76.67 otherwise due, the unused balance may be carried back and credited against
140	140	the fees under s. 76.60, 76.63, 76.65, 76.66, or 76.67 otherwise due for the previous
141	141	taxable year.
142	142	SECTION 7. 76.67 (2) of the statutes is amended to read:
143	143	76.67 (2) If any domestic insurer is licensed to transact insurance business in
144	144	another state, this state may not require similar insurers domiciled in that other
145	145	state to pay taxes greater in the aggregate than the aggregate amount of taxes that
146	146	a domestic insurer is required to pay to that other state for the same year less the
147	147	credits under ss. 76.635, 76.636, 76.637, 76.638, 76.639, and 76.655, except that the
148	148	amount imposed shall not be less than the total of the amounts due under ss. 76.65
149	149	(2) and 601.93 and, if the insurer is subject to s. 76.60, 0.375 percent of its gross
150	150	premiums, as calculated under s. 76.62, less offsets allowed under s. 646.51 (7) or
151	151	under ss. 76.635, 76.636, 76.637, 76.638, 76.639, and 76.655 against that total, and
152	152	except that the amount imposed shall not be less than the amount due under s.
153	153	601.93.
154	154	SECTION 8. 234.45 (1) (e) of the statutes is amended to read:
155	155	234.45 (1) (e) “Qualified development” means a qualified low-income housing
156	156	project under section 42 (g) of the Internal Revenue Code that is financed with
157	157	tax-exempt bonds, pursuant to section 42 (i) (2) of the Internal Revenue Code, and
158	158	located in this state.
159	159	SECTION 9. 234.45 (1) (em) of the statutes is created to read:
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185	185	SECTION 9
186	186	SENATE BILL 40
187	187	234.45 (1) (em) “Rural area” means a city, village, or town in this state that has
188	188	a population of fewer than 10,000 and that is at least 25 miles from any city, village,
189	189	or town that has a population of at least 50,000.
190	190	SECTION 10. 234.45 (4) of the statutes is amended to read:
191	191	234.45 (4) ALLOCATION LIMITS. In any calendar year, the aggregate amount of
192	192	all state tax credits for which the authority certifies persons in allocation certificates
193	193	issued under sub. (3) in that year may not exceed $42,000,000 $100,000,000,
194	194	including all amounts each person is eligible to claim for each year of the credit
195	195	period, plus the total amount of all unallocated state tax credits from previous
196	196	calendar years and plus the total amount of all previously allocated state tax credits
197	197	that have been revoked or cancelled or otherwise recovered by the authority.
198	198	SECTION 11. 234.45 (5m) of the statutes is created to read:
199	199	234.45 (5m) PREFERENCE FOR RURAL COMMUNITIES. (a) Beginning on January
200	200	1, 2024, in approving applications for allocation certificates under sub. (3), the
201	201	authority shall ensure that at least 35 percent of the value of all state tax credits the
202	202	authority allocates each year are for qualified developments located in rural areas.
203	203	(b) Paragraph (a) does not apply in any year in which the authority cannot
204	204	satisfy the 35 percent allocation threshold because the authority does not receive a
205	205	sufficient number of applications for allocation certificates for qualified
206	206	developments located in rural areas that the authority determines are complete and
207	207	financially prudent.
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