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2021 - 2022 LEGISLATURE

2021 Assembly BILL 900

January 21, 2022 - Introduced by Representatives Shankland, VanderMeer, Andraca, Allen, Baldeh, Conley, Considine, Emerson, Hebl, Hong, B. Meyers, Ohnstad, Pope, Shelton, Sinicki, Snodgrass, Spreitzer, Stubbs, Subeck and Vruwink, cosponsored by Senators Smith, Agard, Bewley, Carpenter, Larson and L. Taylor. Referred to Committee on Ways and Means.

AB900,1,4 An Act to amend 71.05 (6) (a) 15., 71.21 (4) (a), 71.26 (2) (a) 4., 71.34 (1k) (g), 71.45 (2) (a) 10. and 76.67 (2); and to create 71.07 (5p), 71.10 (4) (ct), 71.28 (5p), 71.30 (3) (dr), 71.47 (5p), 71.49 (1) (dr) and 76.634 of the statutes; relating to: a tax credit for investments in a community development financial institution.

Analysis by the Legislative Reference Bureau

Under this bill, a person who makes a qualified investment in a registered community development financial institution (CDFI) may receive a credit against state income and franchise taxes for taxable years beginning after December 31, 2021, and before January 1, 2024, and against license fees paid by insurers. The bill defines a CDFI as an entity that is organized under the laws of this state, uses qualified investments for projects that are based in this state, and has been certified by the Community Development Financial Institutions Fund established under federal law as meeting certain eligibility requirements. The bill defines a “qualified investment" as a loan or deposit that has a value of at least $10,000, pays no interest to the person making the loan or deposit, and is made for a minimum of 60 months. The CDFI retains complete control of the loan or deposit for the duration of the investment period.

A person may claim 10 percent of the person's qualified investment, if the investment is at least $10,000 but not more than $150,000, or 12 percent of the person's qualified investment, if the investment is more than $150,000 but not more than $500,000. If the person withdraws the qualified investment from the CDFI before the end of the investment period and does not reinvest the qualified investment in another CDFI, the person must repay a portion of the credit amounts that the person received by adding the portion to the person's tax or fee liability in a subsequent year. However, the portion that the person must repay depends on when the person withdraws the investment during the investment period. The portion that the person must repay decreases the longer the person holds the investment during the investment period.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB900,1 Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:

AB900,2,7 71.05 (6) (a) 15. Except as provided under s. 71.07 (3p) (c) 5., the amount of the credits computed under s. 71.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n), (5e), (5i), (5j), (5k), (5p), (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).

AB900,2 Section 2. 71.07 (5p) of the statutes is created to read:

AB900,2,10 71.07 (5p) Steve Hilgenberg community development credit. (a) Definitions. In this subsection:

AB900,2,11 1. “Claimant" means a person who files a claim under this subsection.

AB900,2,13 2. “Community development financial institution" means an entity that satisfies all of the following:

AB900,2,16 a. The entity is certified by the fund under 12 CFR 1805.201 as meeting the eligibility requirements for a community development financial institution under 12 CFR 1805.200 and 1805.201 (b).

AB900,2,17 b. The entity is organized under the laws of this state.

AB900,2,18 c. The entity uses qualified investments for projects that are based in this state.