Wisconsin Senate Bill SB942

Wisconsin 2025-2026 Regular Session

• Introduced: 2/6/26
• Refer: 2/6/26
• Failed: 3/23/26

Caption

An Act to renumber 76.639 (3); to amend 71.07 (8b) (a) 7., 71.07 (8b) (c) 2., 71.28 (8b) (a) 7., 71.28 (8b) (c) 2., 71.47 (8b) (a) 7., 71.47 (8b) (c) 2., 76.639 (1) (g), 76.67 (2), 234.45 (1) (e) and 234.45 (4); to create 76.639 (3) (b), 234.45 (1) (em) and 234.45 (5m) of the statutes; Relating to: changes to the low-income housing tax credit. (FE)

Summary

SB942 would substantially expand Wisconsin’s low-income housing tax credit program administered by the Wisconsin Housing and Economic Development Authority (WHEDA). The bill raises the annual statewide cap on credits from $42 million to $100 million and directs WHEDA, when possible, to reserve at least 35% of annual allocations for qualified low-income housing projects in rural areas. It also removes the current requirement that a qualifying project be financed with tax-exempt bonds, broadening the set of projects that may qualify for the credit. The bill makes several conforming and technical changes across the income tax, corporate franchise tax, and insurance premium tax provisions that reference the credit. It updates the definition of “qualified development” in multiple statutes to reflect the removal of the tax-exempt bond financing requirement, and it adds a new provision allowing insurers that are partners, members, or shareholders in pass-through entities to claim their share of the credit. The bill also renumbers one subsection and creates a new rural-area definition for purposes of the allocation preference. In practical terms, SB942 would increase the amount of state tax credit authority available for affordable housing projects and likely expand the number and types of developments that can receive credits. It would affect WHEDA’s allocation process, developers of low-income housing, investors and pass-through entities involved in housing projects, and insurers eligible to use the credit against premium tax liability. The bill’s initial applicability date indicates the broadened definition of qualified development would apply to taxable years beginning after December 31, 2024. The overall sentiment reflected in the bill text is supportive of expanding affordable housing production, especially in rural communities, by making the credit larger and more flexible. Because there were no recorded committee transcripts or votes in the provided materials, there is no documented floor or committee debate to show direct support or opposition. The bill ultimately failed to pass pursuant to Senate Joint Resolution 1, so despite its policy goals, it did not become law. The main points of contention likely would have centered on the larger fiscal exposure from increasing the cap nearly two-and-a-half times, the shift away from a tax-exempt bond financing requirement, and whether the rural allocation preference could be implemented consistently given application volume. The bill itself anticipates a possible exception to the 35% rural target if WHEDA does not receive enough qualifying rural applications, suggesting that rural project availability and administrative feasibility were recognized issues.

Impact

SB942 would amend Wisconsin’s tax credit statutes governing low-income housing credits for income tax, franchise tax, and insurance premium tax purposes, while also changing WHEDA’s housing credit allocation law. It would raise the annual allocation ceiling from $42 million to $100 million, remove the tax-exempt bond financing condition from the definition of a qualified development, and require a rural-area preference in WHEDA’s qualified allocation plan when feasible. The bill also creates a statutory definition of rural area and clarifies that insurers may claim credits through ownership interests in partnerships, LLCs, or tax-option corporations.

Sentiment

The bill appears generally pro-housing and pro-rural development, with its structure indicating an intent to expand affordable housing financing and direct more credits to underserved rural communities. No committee testimony or recorded votes were provided, so there is no documented public debate in the supplied materials. The final legislative outcome was negative, as the bill failed to pass pursuant to Senate Joint Resolution 1.

Contention

Likely areas of contention include the significant increase in the credit cap, which would reduce state revenue capacity and increase fiscal exposure, and the elimination of the tax-exempt bond requirement, which broadens eligibility and could change the program’s targeting. Another possible point of debate is the 35% rural allocation preference: supporters would view it as a needed correction for rural housing shortages, while critics might question whether enough rural projects exist to meet the threshold or whether the mandate could distort allocations. The insurer pass-through credit change is more technical, but it could also draw attention from tax administrators and affected industries.