This is the preview version of the Wisconsin State Legislature site.
Please see http://docs.legis.wisconsin.gov for the production version.
LRBs0135/1
EKL:emw
2021 - 2022 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 1,
TO SENATE BILL 172
May 10, 2021 - Offered by Senator Bernier.
SB172-SSA1,1,5 1An Act to renumber 76.639 (3); to amend 71.05 (6) (a) 15., 71.21 (4) (a), 71.26
2(2) (a) 4., 71.34 (1k) (g), 71.45 (2) (a) 10. and 76.67 (2); and to create 71.07 (8f),
371.10 (4) (fd), 71.28 (8f), 71.30 (3) (cu), 71.47 (8f), 71.49 (1) (cu), 76.639 (3) (b),
476.6395 and 234.46 of the statutes; relating to: state workforce housing
5income and franchise tax credit.
Analysis by the Legislative Reference Bureau
This bill creates a state workforce housing tax credit program that is
administered by the Wisconsin Housing and Economic Development Authority.
Under the bill, WHEDA may certify a person to claim a nonrefundable credit
to offset income and franchise taxes if all of the following conditions are satisfied:
1. The person has an ownership interest in a qualified housing development.
Under the bill, a “qualified housing development” is a residential rental property
development located in Wisconsin if at least 25 percent of the rental units are
occupied by individuals whose income is at least 61 percent but not more than 100
percent of area median income and the rents for such units do not exceed 30 percent
of area median income.
2. The tax credit is necessary for the financial feasibility of the development.

3. The qualified housing development is the subject of a recorded restrictive
covenant requiring that the development be maintained and operated as a qualified
housing development for at least 15 years.
4. The tax credit certification is issued in accordance with a qualified allocation
plan established by WHEDA.
The bill requires that WHEDA allocate at least 50 percent of the annual credit
allocation to qualified housing developments located in cities, villages, and towns
with fewer than 150,000 residents. The bill caps at $42,000,000 the total amount of
credits WHEDA may issue each year, including all amounts each person is eligible
to claim for each year of the credit. However, the bill raises that cap for each year
by an amount equal to all unallocated credits from prior years, all previously
allocated credits that have been revoked, canceled, or otherwise recovered by
WHEDA, and credits allocated for qualified housing developments in small
municipalities that were not claimed.
The bill also amends the existing low-income housing tax credit that insurers
may claim against certain state-imposed fees. The bill provides that an insurer that
is a partner or member of a partnership or limited liability company that directly or
indirectly owns a qualified housing development may claim the low-income housing
tax credit in proportion to the insurer's interest or in accordance with the allocation
of credits pursuant to a timely written agreement among the partners or members.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB172-SSA1,1 1Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:
SB172-SSA1,2,72 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 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t),
4(3w), (3wm), (3y), (4k), (4n), (5e), (5i), (5j), (5k), (5r), (5rm), (6n), (8f), and (10) and not
5passed through by a partnership, limited liability company, or tax-option
6corporation that has added that amount to the partnership's, company's, or
7tax-option corporation's income under s. 71.21 (4) or 71.34 (1k) (g).
SB172-SSA1,2 8Section 2 . 71.07 (8f) of the statutes is created to read:
SB172-SSA1,2,99 71.07 (8f) State workforce housing credit. (a) Definitions. In this subsection:
SB172-SSA1,3,210 1. “Allocation certificate” means a statement issued by the authority certifying
11that a qualified housing development is eligible for a credit under this subsection and

1specifying the amount of the credit that the owners of the development may claim
2for each taxable year of the credit period.
SB172-SSA1,3,43 2. “Area median gross income” has the meaning as used for purposes of 26 USC
442
.
SB172-SSA1,3,65 3. “Authority” means the Wisconsin Housing and Economic Development
6Authority.
SB172-SSA1,3,87 4. “Claimant” means a person who has an ownership interest in a qualified
8housing development and who files a claim under this subsection.
SB172-SSA1,3,109 5. “Compliance period” means the 10-year period beginning with the first
10taxable year of the credit period.
SB172-SSA1,3,1511 6. “Credit period” means the 6-year period beginning with the taxable year in
12which a qualified housing development is placed in service. For purposes of this
13subdivision, if a qualified housing development consists of more than one building,
14the qualified housing development is placed in service in the taxable year in which
15the last building is placed in service.
SB172-SSA1,4,216 7. “Qualified basis” means the amount equal to the applicable fraction of the
17adjusted basis of the qualified housing development as of the close of the first taxable
18year of the credit period. The applicable fraction is the smaller of a fraction whose
19numerator is the number of qualified units in the qualified housing development and
20denominator is the total number of residential rental units in the qualified housing
21development or a fraction whose numerator is the total floor space of the qualified
22units in the qualified housing development and denominator is the total floor space
23of all the residential rental units in the qualified housing development. In
24calculating the applicable fraction, the number of qualified units and residential

1rental units and the amount of floor space shall be determined as of the close of the
2taxable year.
SB172-SSA1,4,73 8. “Qualified housing development” means a residential rental property
4development that is located in this state if at least 25 percent of the development's
5residential rental units are rent-restricted units and occupied by individuals whose
6tenant income is at least 61 percent but not more than 100 percent of area median
7gross income.
SB172-SSA1,4,108 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.
SB172-SSA1,4,1411 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.
SB172-SSA1,4,1615 11. “Tenant income” means the income determined under 26 USC 142 (d) (2)
16(B) of individuals occupying a residential rental unit.
SB172-SSA1,4,2117 (b) Filing claims. Subject to the limitations provided in this subsection and in
18s. 234.46, for taxable years beginning after December 31, 2020, a claimant may claim
19as a credit against the taxes imposed under s. 71.02, 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.
SB172-SSA1,4,2422 (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.
SB172-SSA1,5,19
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.
SB172-SSA1,5,2220 3. No credit may be claimed under this subsection for the same costs for which
21a credit is claimed under sub. (8b), (9m), or (9r) or s. 71.28 (6) or (8b), 71.47 (6) or (8b),
22or 76.639.
SB172-SSA1,6,523 (d) Recapture. 1. As of the last day of any taxable year during the compliance
24period, if the qualified basis of a qualified housing development with respect to a
25claimant is less than the qualified basis as of the last day of the previous taxable year,

1the amount of the claimant's tax liability under this subchapter shall be increased
2by an amount equal to the excess of the aggregate credit claimed under this
3subsection in prior taxable years over the aggregate credit that would be claimed in
4those years if the full credit amount allocated to the claimant for the credit period
5was claimed ratably over 10 years.
SB172-SSA1,6,116 2. Subdivision 1. does not apply if the reduction in qualified basis for the
7taxable year is by reason of a casualty loss if the loss is restored by reconstruction
8or replacement within a reasonable period; a minimal change in floor space; or a
9disposition of an interest in the qualified housing development if it is reasonably
10expected that the development will continue to be operated as a qualified housing
11development for the remainder of the compliance period.
SB172-SSA1,6,1412 3. In the event that the recapture of a credit is required in a taxable year, the
13taxpayer shall include the recaptured amount on the return submitted for the
14taxable year in which the recapture event is identified.
SB172-SSA1,6,1615 (e) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
16s. 71.28 (4), applies to the credit under this subsection.
SB172-SSA1,3 17Section 3 . 71.10 (4) (fd) of the statutes is created to read:
SB172-SSA1,6,1818 71.10 (4) (fd) State workforce housing credit under s. 71.07 (8f).
SB172-SSA1,4 19Section 4. 71.21 (4) (a) of the statutes is amended to read:
SB172-SSA1,6,2320 71.21 (4) (a) The amount of the credits computed by a partnership under s.
2171.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n),
22(5e), (5g), (5i), (5j), (5k), (5r), (5rm), (6n), (8f), and (10) and passed through to partners
23shall be added to the partnership's income.
SB172-SSA1,5 24Section 5. 71.26 (2) (a) 4. of the statutes is amended to read:
SB172-SSA1,7,6
171.26 (2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dm),
2(1dx), (1dy), (3g), (3h), (3n), (3q), (3t), (3w), (3wm), (3y), (5e), (5g), (5i), (5j), (5k), (5r),
3(5rm), (6n), (8f), (9s), and (10) and not passed through by a partnership, limited
4liability company, or tax-option corporation that has added that amount to the
5partnership's, limited liability company's, or tax-option corporation's income under
6s. 71.21 (4) or 71.34 (1k) (g).
SB172-SSA1,6 7Section 6 . 71.28 (8f) of the statutes is created to read:
SB172-SSA1,7,88 71.28 (8f) State workforce housing credit. (a) Definitions. In this subsection:
SB172-SSA1,7,129 1. “Allocation certificate” means a statement issued by the authority certifying
10that a qualified housing development is eligible for a credit under this subsection and
11specifying the amount of the credit that the owners of the qualified housing
12development may claim for each taxable year of the credit period.
SB172-SSA1,7,1413 2. “Area median gross income” has the meaning as used for purposes of 26 USC
1442
.
SB172-SSA1,7,1615 3. “Authority” means the Wisconsin Housing and Economic Development
16Authority.
SB172-SSA1,7,1817 4. “Claimant” means a person who has an ownership interest in a qualified
18housing development and who files a claim under this subsection.
SB172-SSA1,7,2019 5. “Compliance period” means the 10-year period beginning with the first
20taxable year of the credit period.
SB172-SSA1,7,2521 6. “Credit period” means the 6-year period beginning with the taxable year in
22which a qualified housing development is placed in service. For purposes of this
23subdivision, if a qualified housing development consists of more than one building,
24the qualified housing development is placed in service in the taxable year in which
25the last building is placed in service.
SB172-SSA1,8,11
17. “Qualified basis” means the amount equal to the applicable fraction of the
2adjusted basis of the qualified housing development as of the close of the first taxable
3year of the credit period. The applicable fraction is the smaller of a fraction whose
4numerator is the number of qualified units in the qualified housing development and
5denominator is the total number of residential rental units in the qualified housing
6development or a fraction whose numerator is the total floor space of the qualified
7units in the qualified housing development and denominator is the total floor space
8of all the residential rental units in the qualified housing development. In
9calculating the applicable fraction, the number of qualified units and residential
10rental units and the amount of floor space shall be determined as of the close of the
11taxable year.
SB172-SSA1,8,1612 8. “Qualified housing development” means a residential rental property
13development located in this state if at least 25 percent of the development's
14residential rental units are rent-restricted units and occupied by individuals whose
15tenant income is at least 61 percent but not more than 100 percent of area median
16gross income.
SB172-SSA1,8,1917 9. “Qualified unit” means a rent-restricted unit that is occupied by individuals
18whose tenant income is at least 61 percent but not more than 100 percent of area
19median gross income.
SB172-SSA1,8,2320 10. “Rent-restricted unit” means a residential rental unit if the gross rent with
21respect to the unit does not exceed 30 percent of area median gross income,
22determined as if the unit is occupied by one individual in a unit without a separate
23bedroom and 1.5 individuals for each separate bedroom in any other unit.
SB172-SSA1,8,2524 11. “Tenant income” means the income determined under 26 USC 142 (d) (2)
25(B) of individuals occupying a residential rental unit.
SB172-SSA1,9,5
1(b) Filing claims. Subject to the limitations provided in this subsection and in
2s. 234.46, for taxable years beginning after December 31, 2020, a claimant may claim
3as a credit against the taxes imposed under s. 71.23, up to the amount of the tax, the
4amount allocated to the claimant by the authority under s. 234.46 for each taxable
5year within the credit period.
SB172-SSA1,9,86 (c) Limitations. 1. No person may claim the credit under par. (b) unless the
7claimant includes with the claimant's return a copy of the allocation certificate
8issued for the qualified housing development.
SB172-SSA1,9,259 2. A partnership, limited liability company, or tax-option corporation may not
10claim the credit under this subsection. The partners of a partnership, members of
11a limited liability company, or shareholders in a tax-option corporation may claim
12the credit under this subsection based on eligible costs incurred by the partnership,
13limited liability company, or tax-option corporation. The partnership, limited
14liability company, or tax-option corporation shall calculate the amount of the credit
15that may be claimed by each partner, member, or shareholder and shall provide that
16information to each of them. Credits computed by a partnership or limited liability
17company may be claimed in proportion to the ownership interests of the partners or
18members or allocated to partners or members as provided in a written agreement
19among the partners or members that is entered into no later than the last day of the
20taxable year of the partnership or limited liability company for which the credit is
21claimed. Any partner or member who claims the credit as allocated by a written
22agreement shall provide a copy of the agreement with the tax return on which the
23credit is claimed. For shareholders of a tax-option corporation, the credit may be
24allocated in proportion to the ownership interest of each shareholder. A person
25claiming the credit as provided under this subdivision is solely responsible for any

1tax liability arising from a dispute with the department related to claiming the
2credit.
SB172-SSA1,10,53 3. No credit may be claimed under this subsection for the same costs for which
4a credit is claimed under sub. (6) or (8b) or s. 71.07 (8b), (9m), or (9r), 71.47 (6) or (8b),
5or 76.639.
SB172-SSA1,10,136 (d) Recapture. 1. As of the last day of any taxable year during the compliance
7period, if the qualified basis of a qualified housing development with respect to a
8claimant is less than the qualified basis as of the last day of the previous taxable year,
9the amount of the claimant's tax liability under this subchapter shall be increased
10by an amount equal to the excess of the aggregate credit claimed under this
11subsection in prior taxable years over the aggregate credit that would be claimed in
12those years if the full credit amount allocated to the claimant for the credit period
13was claimed ratably over 10 years.
SB172-SSA1,10,1914 2. Subdivision 1. does not apply if the reduction in qualified basis for the
15taxable year is by reason of a casualty loss if the loss is restored by reconstruction
16or replacement within a reasonable period; a minimal change in floor space; or the
17disposition of an interest in the qualified housing development if it is reasonably
18expected that the development will continue to be operated as a qualified housing
19development for the remainder of the compliance period.
SB172-SSA1,10,2220 3. In the event that the recapture of a credit is required in a taxable year, the
21taxpayer shall include the recaptured amount on the return submitted for the
22taxable year in which the recapture event is identified.
SB172-SSA1,10,2423 (e) Administration. Subsection (4) (e) to (h), as it applies to the credit under
24sub. (4), applies to the credit under this subsection.
SB172-SSA1,7 25Section 7 . 71.30 (3) (cu) of the statutes is created to read:
SB172-SSA1,11,1
171.30 (3) (cu) State workforce housing credit under s. 71.28 (8f).
SB172-SSA1,8 2Section 8. 71.34 (1k) (g) of the statutes is amended to read:
Loading...
Loading...