LRB-5898/1
KP:amn
2023 - 2024 LEGISLATURE
February 21, 2024 - Introduced by Senators Smith, Larson and Spreitzer,
cosponsored by Representatives Shankland, Conley, Considine, Joers,
Moore Omokunde, Ohnstad, Ratcliff, Sinicki, Stubbs and Subeck. Referred
to Committee on Financial Institutions and Sporting Heritage.
SB1063,1,4 1An Act to amend 71.05 (6) (a) 15., 71.21 (4) (a), 71.26 (2) (a) 4., 71.34 (1k) (g),
271.45 (2) (a) 10. and 76.67 (2); and to create 71.07 (5p), 71.10 (4) (ct), 71.28 (5p),
371.30 (3) (dr), 71.47 (5p), 71.49 (1) (dr) and 76.634 of the statutes; relating to:
4a 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,
2022, and before January 1, 2025, and against license fees paid by insurers for that
same period. 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:
SB1063,1 1Section 1. 71.05 (6) (a) 15. of the statutes is amended to read:
SB1063,2,72 71.05 (6) (a) 15. The amount of the credits computed under s. 71.07 (2dm),
3(2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n), (5e), (5i), (5j),
4(5k), (5p), (5r), (5rm), (6n), and (10) and not passed through by a partnership, limited
5liability company, or tax-option corporation that has added that amount to the
6partnership's, company's, or tax-option corporation's income under s. 71.21 (4) or
771.34 (1k) (g).
SB1063,2 8Section 2. 71.07 (5p) of the statutes is created to read:
SB1063,2,109 71.07 (5p) Steve Hilgenberg community development credit. (a) Definitions.
10In this subsection:
SB1063,2,1111 1. “Claimant" means a person who files a claim under this subsection.
SB1063,2,1312 2. “Community development financial institution" means an entity that
13satisfies all of the following:
SB1063,2,1614a. The entity is certified by the fund under 12 CFR 1805.201 as meeting the
15eligibility requirements for a community development financial institution under 12
16CFR 1805.200
and 1805.201 (b).
SB1063,2,1717 b. The entity is organized under the laws of this state.
SB1063,2,1818 c. The entity uses qualified investments for projects that are based in this state.
SB1063,3,2
13. “Fund" means the Community Development Financial Institutions Fund
2established under 12 USC 4703 (a).
SB1063,3,43 4. “Qualified investment" means a deposit or loan that satisfies all of the
4following:
SB1063,3,65 a. The deposit or loan pays no interest to the person who made the deposit or
6loan.
SB1063,3,77 b. The deposit or loan has a value of at least $10,000.
SB1063,3,88 c. The deposit or loan is made for a period of at least 60 months.
SB1063,3,149 d. The community development financial institution that receives the deposit
10or loan has complete control over the entire deposit or loan amount, including any
11interest earned on the deposit or loan, for the duration of the investment period, but
12the deposit or loan may be subject to any additional terms and conditions of the
13investment agreement between the community development financial institution
14and the investor that are not inconsistent with the requirements of this subsection.
SB1063,3,2215 (b) Filing claims. For taxable years beginning after December 31, 2022, and
16before January 1, 2025, a claimant may claim as a credit against the tax imposed
17under s. 71.02, up to the amount of the tax, for the taxable year in which the
18investment is made, an amount equal to 10 percent of the claimant's qualified
19investment in a community development financial institution, if the investment is
20at least $10,000 but not more than $150,000, or 12 percent of the claimant's qualified
21investment in a community development financial institution, if the investment is
22more than $150,000 but not more than $500,000.
SB1063,4,523 (c) Limitations. 1. Partnerships, limited liability companies, and tax-option
24corporations may not claim the credit under this subsection, but the eligibility for,
25and the amount of, the credit are based on their investment of amounts under par.

1(b). A partnership, limited liability company, or tax-option corporation shall
2compute the amount of credit that each of its partners, members, or shareholders
3may claim and shall provide that information to each of them. Partners, members
4of limited liability companies, and shareholders of tax-option corporations may
5claim the credit in proportion to their ownership interests.
SB1063,4,146 2. A person who makes an investment in a community development financial
7institution in a taxable year, withdraws the investment in that taxable year, and
8immediately reinvests the proceeds into another community development financial
9institution may claim only one credit under this subsection for that taxable year,
10based on the lesser of all such investments in that taxable year. Investments in a
11community development financial institution made before the effective date of this
12subdivision .... [LRB inserts date], may not be withdrawn prior to the end of their
13contractual term and reinvested in a community development financial institution
14in order to claim a credit under this subsection.
SB1063,4,2115 3. A claimant who withdraws a qualified investment from a community
16development financial institution prior to the first day of the 61st month after the
17qualified investment was made and who does not, within 60 days, reinvest the
18proceeds of the qualified investment as a qualified investment in another community
19development financial institution shall, in the taxable year in which the investment
20is withdrawn, add to the claimant's liability for taxes imposed under s. 71.02 one of
21the following percentages of the amount of the credits received under this subsection:
SB1063,4,2322 a. If the withdrawal occurs within one year after the date on which the claimant
23made the qualified investment, 100 percent.
SB1063,4,2524 b. If the withdrawal occurs within 2 years after the date on which the claimant
25made the qualified investment, 75 percent.
SB1063,5,2
1c. If the withdrawal occurs within 3 years after the date on which the claimant
2made the qualified investment, 50 percent.
SB1063,5,43 d. If the withdrawal occurs within 4 years after the date on which the claimant
4made the qualified investment, 25 percent.
SB1063,5,65 e. If the withdrawal occurs within 5 years after the date on which the claimant
6made the qualified investment, 10 percent.
SB1063,5,87 (d) Administration. Section 71.28 (4) (e) to (h), as it applies to the credit under
8s. 71.28 (4), applies to the credit under this subsection.
SB1063,3 9Section 3. 71.10 (4) (ct) of the statutes is created to read:
SB1063,5,1110 71.10 (4) (ct) Steve Hilgenberg community development credit under s. 71.07
11(5p).
SB1063,4 12Section 4. 71.21 (4) (a) of the statutes is amended to read:
SB1063,5,1613 71.21 (4) (a) The amount of the credits computed by a partnership under s.
1471.07 (2dm), (2dx), (2dy), (3g), (3h), (3n), (3q), (3s), (3t), (3w), (3wm), (3y), (4k), (4n),
15(5e), (5g), (5i), (5j), (5k), (5p), (5r), (5rm), (6n), and (10) and passed through to
16partners shall be added to the partnership's income.
SB1063,5 17Section 5. 71.26 (2) (a) 4. of the statutes is amended to read:
SB1063,5,2318 71.26 (2) (a) 4. Plus the amount of the credit computed under s. 71.28 (1dm),
19(1dx), (1dy), (3g), (3h), (3n), (3q), (3t), (3w), (3wm), (3y), (5e), (5g), (5i), (5j), (5k), (5p),
20(5r), (5rm), (6n), and (10) and not passed through by a partnership, limited liability
21company, or tax-option corporation that has added that amount to the partnership's,
22limited liability company's, or tax-option corporation's income under s. 71.21 (4) or
2371.34 (1k) (g).
SB1063,6 24Section 6. 71.28 (5p) of the statutes is created to read:
SB1063,6,2
171.28 (5p) Steve Hilgenberg community development credit. (a) Definitions.
2In this subsection:
SB1063,6,33 1. “Claimant" means a person who files a claim under this subsection.
SB1063,6,54 2. “Community development financial institution" means an entity that
5satisfies all of the following:
SB1063,6,86a. The entity is certified by the fund under 12 CFR 1805.201 as meeting the
7eligibility requirements for a community development financial institution under 12
8CFR 1805.200
and 1805.201 (b).
SB1063,6,99 b. The entity is organized under the laws of this state.
SB1063,6,1010 c. The entity uses qualified investments for projects that are based in this state.
SB1063,6,1211 3. “Fund" means the Community Development Financial Institutions Fund
12established under 12 USC 4703 (a).
SB1063,6,1413 4. “Qualified investment" means a deposit or loan that satisfies all of the
14following:
SB1063,6,1615 a. The deposit or loan pays no interest to the person who made the deposit or
16loan.
SB1063,6,1717 b. The deposit or loan has a value of at least $10,000.
SB1063,6,1818 c. The deposit or loan is made for a period of at least 60 months.
SB1063,6,2419 d. The community development financial institution that receives the deposit
20or loan has complete control over the entire deposit or loan amount, including any
21interest earned on the deposit or loan, for the duration of the investment period, but
22the deposit or loan may be subject to any additional terms and conditions of the
23investment agreement between the community development financial institution
24and the investor that are not inconsistent with the requirements of this subsection.
SB1063,7,8
1(b) Filing claims. For taxable years beginning after December 31, 2022, and
2before January 1, 2025, a claimant may claim as a credit against the tax imposed
3under s. 71.23, up to the amount of the tax, for the taxable year in which the
4investment is made, an amount equal to 10 percent of the claimant's qualified
5investment in a community development financial institution, if the investment is
6at least $10,000 but not more than $150,000, or 12 percent of the claimant's qualified
7investment in a community development financial institution, if the investment is
8more than $150,000 but not more than $500,000.
SB1063,7,169 (c) Limitations. 1. Partnerships, limited liability companies, and tax-option
10corporations may not claim the credit under this subsection, but the eligibility for,
11and the amount of, the credit are based on their investment of amounts under par.
12(b). A partnership, limited liability company, or tax-option corporation shall
13compute the amount of credit that each of its partners, members, or shareholders
14may claim and shall provide that information to each of them. Partners, members
15of limited liability companies, and shareholders of tax-option corporations may
16claim the credit in proportion to their ownership interests.
SB1063,7,2517 2. A person who makes an investment in a community development financial
18institution in a taxable year, withdraws the investment in that taxable year, and
19immediately reinvests the proceeds into another community development financial
20institution may claim only one credit under this subsection for that taxable year,
21based on the lesser of all such investments in that taxable year. Investments in a
22community development financial institution made before the effective date of this
23subdivision .... [LRB inserts date], may not be withdrawn prior to the end of their
24contractual term and reinvested in a community development financial institution
25in order to claim a credit under this subsection.
SB1063,8,7
13. A claimant who withdraws a qualified investment from a community
2development financial institution prior to the first day of the 61st month after the
3qualified investment was made and who does not, within 60 days, reinvest the
4proceeds of the qualified investment as a qualified investment in another community
5development financial institution shall, in the taxable year in which the investment
6is withdrawn, add to the claimant's liability for taxes imposed under s. 71.23 one of
7the following percentages of the amount of the credits received under this subsection:
SB1063,8,98 a. If the withdrawal occurs within one year after the date on which the claimant
9made the qualified investment, 100 percent.
SB1063,8,1110 b. If the withdrawal occurs within 2 years after the date on which the claimant
11made the qualified investment, 75 percent.
SB1063,8,1312 c. If the withdrawal occurs within 3 years after the date on which the claimant
13made the qualified investment, 50 percent.
SB1063,8,1514 d. If the withdrawal occurs within 4 years after the date on which the claimant
15made the qualified investment, 25 percent.
SB1063,8,1716 e. If the withdrawal occurs within 5 years after the date on which the claimant
17made the qualified investment, 10 percent.
SB1063,8,1918 (d) Administration. Subsection (4) (e) to (h), as it applies to the credit under
19sub. (4), applies to the credit under this subsection.
SB1063,7 20Section 7. 71.30 (3) (dr) of the statutes is created to read:
SB1063,8,2221 71.30 (3) (dr) Steve Hilgenberg community development credit under s. 71.28
22(5p).
SB1063,8 23Section 8. 71.34 (1k) (g) of the statutes is amended to read:
SB1063,9,224 71.34 (1k) (g) An addition shall be made for credits computed by a tax-option
25corporation under s. 71.28 (1dm), (1dx), (1dy), (3), (3g), (3h), (3n), (3q), (3t), (3w),

1(3wm), (3y), (4), (5), (5e), (5g), (5i), (5j), (5k), (5p), (5r), (5rm), (6n), and (10) and passed
2through to shareholders.
SB1063,9 3Section 9. 71.45 (2) (a) 10. of the statutes is amended to read:
SB1063,9,104 71.45 (2) (a) 10. By adding to federal taxable income the amount of credit
5computed under s. 71.47 (1dm) to (1dy), (3g), (3h), (3n), (3q), (3w), (3y), (5e), (5g), (5i),
6(5j), (5k), (5p), (5r), (5rm), (6n), and (10) and not passed through by a partnership,
7limited liability company, or tax-option corporation that has added that amount to
8the partnership's, limited liability company's, or tax-option corporation's income
9under s. 71.21 (4) or 71.34 (1k) (g) and the amount of credit computed under s. 71.47
10(3), (3t), (4), (4m), and (5).
SB1063,10 11Section 10. 71.47 (5p) of the statutes is created to read:
SB1063,9,1312 71.47 (5p) Steve Hilgenberg community development credit. (a) Definitions.
13In this subsection:
SB1063,9,1414 1. “Claimant" means a person who files a claim under this subsection.
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