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6. “Credit period” means the 6-year period beginning with the taxable year in
14which a qualified housing development is placed in service. For purposes of this
15subdivision, if a qualified housing development consists of more than one building,
16the qualified housing development is placed in service in the taxable year in which
17the last building is placed in service.
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7. “Qualified basis” means the amount equal to the applicable fraction of the
19adjusted basis of the qualified housing development as of the close of the first taxable
20year of the credit period. The applicable fraction is the smaller of a fraction whose
21numerator is the number of qualified units in the qualified housing development and
22denominator is the total number of residential rental units in the qualified housing
23development or a fraction whose numerator is the total floor space of the qualified
24units in the qualified housing development and denominator is the total floor space
25of all the residential rental units in the qualified housing development. In
1calculating the applicable fraction, the number of qualified units and residential
2rental units and the amount of floor space shall be determined as of the close of the
3taxable year.
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8. “Qualified housing development” means a residential rental property
5development located in this state if at least 25 percent of the residential rental units
6are rent-restricted units and occupied by individuals whose tenant income is at least
761 percent but not more than 100 percent of area median gross income.
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9. “Qualified unit” means a rent-restricted unit that is occupied by individuals
9whose tenant income is at least 61 percent but not more than 100 percent of area
10median gross income.
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10. “Rent-restricted unit” means a residential rental unit if the gross rent with
12respect to the unit does not exceed 30 percent of area median gross income,
13determined as if the unit is occupied by one individual in a unit without a separate
14bedroom and 1.5 individuals for each separate bedroom in any other unit.
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11. “Tenant income” means the income determined under
26 USC 142 (d) (2)
16(B) of individuals occupying a residential rental unit.
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(b)
Filing claims. Subject to the limitations provided in this subsection and in
18s. 234.46, for taxable years beginning after December 31, 2019, a claimant may claim
19as a credit against the taxes imposed under s. 71.43, up to the amount of the tax, the
20amount allocated to the claimant by the authority under s. 234.46 for each taxable
21year within the credit period.
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(c)
Limitations. 1. No person may claim the credit under par. (b) unless the
23claimant includes with the claimant's return a copy of the allocation certificate
24issued for the qualified housing development.
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12. A partnership, limited liability company, or tax-option corporation may not
2claim the credit under this subsection. The partners of a partnership, members of
3a limited liability company, or shareholders in a tax-option corporation may claim
4the credit under this subsection based on eligible costs incurred by the partnership,
5limited liability company, or tax-option corporation. The partnership, limited
6liability company, or tax-option corporation shall calculate the amount of the credit
7that may be claimed by each partner, member, or shareholder and shall provide that
8information to each of them. Credits computed by a partnership or limited liability
9company may be claimed in proportion to the ownership interests of the partners or
10members or allocated to partners or members as provided in a written agreement
11among the partners or members that is entered into no later than the last day of the
12taxable year of the partnership or limited liability company for which the credit is
13claimed. Any partner or member who claims the credit as allocated by a written
14agreement shall provide a copy of the agreement with the tax return on which the
15credit is claimed. For shareholders of a tax-option corporation, the credit may be
16allocated in proportion to the ownership interest of each shareholder. A person
17claiming the credit as provided under this subdivision is solely responsible for any
18tax liability arising from a dispute with the department related to claiming the
19credit.
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(d)
Recapture. 1. As of the last day of any taxable year during the compliance
21period, if the qualified basis of a qualified housing development with respect to a
22claimant is less than the qualified basis as of the last day of the previous taxable year,
23the amount of the claimant's tax liability under this subchapter shall be increased
24by an amount equal to the excess of the aggregate credit claimed under this
25subsection in prior taxable years over the aggregate credit that would be claimed in
1those years if the full credit amount allocated to the claimant for the credit period
2was claimed ratably over 10 years, plus interest at the overpayment rate established
3under
26 USC 6621.
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2. Subdivision 1. does not apply if the reduction in qualified basis for the
5taxable year is by reason of a casualty loss if the loss is restored by reconstruction
6or replacement within a reasonable period; a minimal change in floor space; or a
7disposition of an interest in the qualified housing development if it is reasonably
8expected that the development will continue to be operated as a qualified housing
9development for the remainder of the compliance period.
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3. In the event that the recapture of a credit is required in a taxable year, the
11taxpayer shall include the recaptured amount on the return submitted for the
12taxable year in which the recapture event is identified.
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4. The department shall promulgate rules to implement this paragraph.
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(e)
Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
15s. 71.28 (4), applies to the credit under this subsection.
SB786,6
16Section 6
. 71.49 (1) (cu) of the statutes is created to read:
SB786,13,1717
71.49
(1) (cu) State workforce housing credit under s. 71.47 (8f).
SB786,7
18Section 7
. 76.6395 of the statutes is created to read:
SB786,13,19
1976.6395 State workforce housing credit. (1)
Definitions. In this section:
SB786,13,2320
(a) “Allocation certificate” means a statement issued by the authority certifying
21that a qualified housing development is eligible for a credit under this section and
22specifying the amount of the credit that the owners of the qualified housing
23development may claim for each taxable year of the credit period.
SB786,13,2524
(b) “Area median gross income” has the meaning as used for purposes of
26 USC
2542.
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1(c) “Authority” means the Wisconsin Housing and Economic Development
2Authority.
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(d) “Claimant” means a person who has an ownership interest in a qualified
4housing development and who files a claim under this section.
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(e) “Compliance period” means the 10-year period beginning with the first
6taxable year of the credit period.
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(f) “Credit period” means the 6-year period beginning with the taxable year in
8which a qualified housing development is placed in service. For purposes of this
9paragraph, if a qualified housing development consists of more than one building,
10the qualified housing development is placed in service in the taxable year in which
11the last building is placed in service.
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(g) “Qualified basis” means the amount equal to the applicable fraction of the
13adjusted basis of the qualified housing development as of the close of the first taxable
14year of the credit period. The applicable fraction is the smaller of a fraction whose
15numerator is the number of qualified units in the qualified housing development and
16denominator is the total number of residential rental units in the qualified housing
17development or a fraction whose numerator is the total floor space of the qualified
18units in the qualified housing development and denominator is the total floor space
19of all the residential rental units in the qualified housing development. In
20calculating the applicable fraction, the number of qualified units and residential
21rental units and the amount of floor space shall be determined as of the close of the
22taxable year.
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(h) “Qualified housing development” means a residential rental property
24development located in this state if at least 25 percent of the residential rental units
1are rent-restricted units and occupied by individuals whose tenant income is at least
261 percent but not more than 100 percent of area median gross income.
SB786,15,53
(i) “Qualified unit” means a rent-restricted unit that is occupied by individuals
4whose tenant income is at least 61 percent but not more than 100 percent of area
5median gross income.
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(j) “Rent-restricted unit” means a residential rental unit if the gross rent with
7respect to the unit does not exceed 30 percent of area median gross income,
8determined as if the unit is occupied by one individual in a unit without a separate
9bedroom and 1.5 individuals for each separate bedroom in any other unit.
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(k) “Tenant income” means the income determined under
26 USC 142 (d) (2)
11(B) of individuals occupying a residential rental unit.
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12(2) Filing claims. Subject to the limitations provided in this section and in s.
13234.46, for taxable years beginning after December 31, 2019, a claimant may claim
14as a credit against the fees imposed under s. 76.60, 76.63, 76.65, 76.66, or 76.67 the
15amount allocated to the claimant by the authority under s. 234.46 for each taxable
16year within the credit period.
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17(3) Limitations. No insurer may claim the credit under sub. (2) unless the
18claimant includes with the claimant's return a copy of the allocation certificate
19issued for the qualified housing development.
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20(4) Recapture. (a) As of the last day of any taxable year during the compliance
21period, if the qualified basis of a qualified housing development with respect to a
22claimant is less than the qualified basis as of the last day of the previous taxable year,
23the amount of the claimant's tax liability under s. 76.60, 76.63, 76.65, 76.66, or 76.67
24shall be increased by an amount equal to the excess of the aggregate credit claimed
25under this section in prior taxable years over the aggregate credit that would be
1claimed in those years if the full credit amount allocated to the claimant for the credit
2period was claimed ratably over 10 years, plus interest at the overpayment rate
3established under
26 USC 6621.
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(b) Paragraph (a) does not apply if the reduction in qualified basis for the
5taxable year is by reason of a casualty loss if the loss is restored by reconstruction
6or replacement within a reasonable period; a de minimis change in floor space; or a
7disposition of an interest in the qualified housing development if it is reasonably
8expected that the development will continue to be operated as a qualified housing
9development for the remainder of the compliance period.
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(c) In the event that the recapture of a credit is required in a taxable year, the
11taxpayer shall include the recaptured amount of the credit on the return submitted
12for the taxable year in which the recapture event is identified.
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(d) The department shall promulgate rules to implement this subsection.
SB786,16,19
14(5) Carry-forward. If the credit under sub. (2) is not entirely offset against the
15fees under s. 76.60, 76.63, 76.65, 76.66, or 76.67 otherwise due, the unused balance
16may be carried forward and credited against those fees for the following 15 years to
17the extent that it is not offset by those fees otherwise due in all the years between
18the year in which the expense was made and the year in which the carry-forward
19credit is claimed.
SB786,8
20Section
8. 76.67 (2) of the statutes is amended to read:
SB786,17,621
76.67
(2) If any domestic insurer is licensed to transact insurance business in
22another state, this state may not require similar insurers domiciled in that other
23state to pay taxes greater in the aggregate than the aggregate amount of taxes that
24a domestic insurer is required to pay to that other state for the same year less the
25credits under ss. 76.635, 76.636, 76.637, 76.638,
76.639, 76.6395, and 76.655, except
1that the amount imposed shall not be less than the total of the amounts due under
2ss. 76.65 (2) and 601.93 and, if the insurer is subject to s. 76.60, 0.375 percent of its
3gross premiums, as calculated under s. 76.62, less offsets allowed under s. 646.51 (7)
4or under ss. 76.635, 76.636, 76.637, 76.638, 76.639,
76.6395, and 76.655 against that
5total, and except that the amount imposed shall not be less than the amount due
6under s. 601.93.
SB786,9
7Section 9
. 234.46 of the statutes is created to read:
SB786,17,9
8234.46 State workforce housing tax credits. (1)
Definitions. In this
9section:
SB786,17,1310
(a) “Allocation certificate” means a statement issued by the authority certifying
11that a qualified housing development is eligible for a credit under this section and
12specifying the amount of the credit that the owners of the qualified housing
13development may claim for each taxable year of the credit period.
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(b) “Area median gross income” has the meaning as used for purposes of
26 USC
1542.
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(c) “Compliance period” means the 10-year period beginning with the first
17taxable year of the credit period.
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(d) “Credit period” means the 6-year period beginning with the taxable year
19in which a qualified housing development is placed in service. For purposes of this
20paragraph, if a qualified housing development consists of more than one building,
21the qualified housing development is placed in service in the taxable year in which
22the last building is placed in service.
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(e) “Qualified housing development” means a residential rental property
24development located in this state if at least 25 percent of the development's
25residential rental units are rent-restricted units and occupied by individuals whose
1tenant income is at least 61 percent but not more than 100 percent of area median
2gross income.
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(f) “Qualified unit” means a rent-restricted unit that is occupied by individuals
4whose tenant income is at least 61 percent but not more than 100 percent of area
5median gross income.
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(g) “Rent-restricted unit” means a residential rental unit if the gross rent with
7respect to the unit does not exceed 30 percent of area median gross income,
8determined as if the unit is occupied by one individual in a unit without a separate
9bedroom and 1.5 individuals for each separate bedroom in any other unit.
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(h) “State tax credit” means a tax credit under s. 71.07 (8f), 71.28 (8f), 71.47 (8f),
11or 76.6395.
SB786,18,1312
(i) “Tenant income” means the income determined under
26 USC 142 (d) (2) (B)
13of individuals occupying a residential rental unit.
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14(2) Establishment of program. The authority shall establish a program to
15certify persons to claim state tax credits, in amounts determined by the authority,
16under this section.
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17(3) Certification. The authority may certify a person to claim a state tax credit
18by issuing the person an allocation certificate for the qualified housing development.
19The allocation certificate shall state the amount the authority determines the person
20is eligible to claim for each year of the credit period, the name and address of the
21person, the person's Wisconsin tax identification number, and any other information
22required by the authority or department of revenue. The authority shall provide a
23copy of the allocation certificate to the department of revenue. The authority shall
24issue allocation certificates annually, on a rolling basis, based on eligibility, as
25determined by the authority, except that the authority may develop a competitive
1process to award allocation certificates as a part of its qualified allocation plan under
2sub. (4). The authority may issue an allocation certificate under this subsection only
3if all of the following conditions are satisfied:
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(a) The allocation certificate is issued to a person who has an ownership
5interest in the qualified housing development.
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(b) The state tax credit is necessary for the financial feasibility of the qualified
7housing development.
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(c) The qualified housing development is the subject of a recorded restrictive
9covenant requiring that, for the compliance period or for a longer period agreed to
10by the authority and the owner of the qualified housing development, the
11development shall be maintained and operated as a qualified housing development
12and shall be in compliance with Title VIII of the federal Civil Rights Act of 1968, as
13amended.
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(d) The allocation certificate is issued in accordance with the authority's
15qualified allocation plan under sub. (4).
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16(4) Allocation plan. The authority shall develop a qualified allocation plan
17that sets forth selection criteria to determine housing priorities for individuals
18whose income is at least 61 percent but not more 100 percent of area median gross
19income. The housing priorities shall be appropriate for local conditions. The
20selection criteria shall include project location, housing needs characteristics,
21project characteristics, sponsor characteristics, tenant populations with special
22housing needs, tenant populations of individuals with children, projects intended for
23eventual tenant ownership, the energy efficiency of the project, and the historic
24nature of the project. The plan shall include procedures to monitor noncompliance
25with this section and with habitability standards.
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1(5) Allocation limits. In any calendar year, the aggregate amount of all state
2tax credits for which the authority certifies persons in allocation certificates issued
3under sub. (3) in that year may not exceed $42,000,000, including all amounts each
4person is eligible to claim for each year of the credit period, plus the total amount of
5all unallocated state tax credits from previous calendar years and plus the total
6amount of all previously allocated state tax credits that have been revoked or
7cancelled or otherwise recovered by the authority.
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8(6) Preference for smaller municipalities. In issuing allocation certificates
9under sub. (3), the authority shall give preference to qualified housing developments
10located in a city, village, or town with a population of fewer than 150,000.
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11(7) Report. No later than December 31 of each year, the authority shall submit
12a report to the legislature under s. 13.172 (2) that includes all of the following:
SB786,20,1813
(a) A description of each qualified housing development for which the authority
14issued an allocation certificate that year, including the development's geographic
15location, the household type and any specific demographic information available
16concerning the residents intended to be served by the development, the income levels
17of residents intended to be served by the development, and the rents or set-asides
18authorized for the development.
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(b) An analysis of housing market and demographic information that shows
20how the qualified housing developments for which the authority has issued
21allocation certificates at any time are addressing the need for affordable housing
22within the communities the developments are intended to serve and an analysis of
23remaining disparities in the affordability of housing within those communities.
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1(8) Policies and procedures. The authority, in consultation with the
2department of revenue, shall establish policies and procedures to administer this
3section.