WEDA Legislative Update: What’s Happening Under the Capitol Dome

WEDA Legislative Update: What’s Happening Under the Capitol Dome

The State Capitol remains an extremely busy place, as hundreds of bills are being introduced, considered, and debated by lawmakers as the Legislature hits the peak and nears the end of the legislative session. Despite the significant legislative activity, WEDA is not only staying on top of newly introduced bills, but we also continue to focus on pushing our remaining legislative priorities across the finish line before lawmakers adjourn for the session in March. Please find below a status report on WEDA’s legislative priorities:

• AB 451 / SB 480 (Residential TID Bill) – This legislation that will create a 100% Residential Tax Increment District (TID) in Wisconsin. Under the bill, municipalities would be able to use the new “Housing” TID to finance residential infrastructure for owner-occupied housing (single-family and duplex) development. This bill exempts Housing TIDs from the current law 12% TIF equalized value limit. Instead, the total value of all Housing TIDs in a municipality would be capped at 3% of the municipality’s equalized property value, allowing communities to address housing needs without crowding out traditional economic development TIDs.
  • Status: This legislation passed the Assembly on a 88-7 vote and the Senate on a 30-3 vote. The bill was amended by the Senate and sent back to the Assembly for concurrence.

• AB 368 / SB 376 (Business Childcare Tax Credit) – This legislation creates a new state tax credit for businesses that provide or support childcare for their employees, matching an existing federal incentive. Under current federal law, employers can receive a tax credit for helping build, expand, or operate childcare facilities, or for covering childcare referral and support services. The credit percentage for qualified expenditures is 40% for large businesses and 50% for small businesses. This legislation allows Wisconsin employers who already qualify for the federal credit to also claim the same amount against their state income taxes. It will allow employers to leverage the value of the federal incentive with a new state tax benefit, increasing access to childcare for families and strengthening the state’s workforce.
  • Status: This legislation passed the Senate on a 33-0 vote and will be voted on by the full Assembly on 02/17/26.

• AB194 / SB 180 (Workforce Housing Revolving Loan Fund Repair Bill) – This legislation makes critical improvements to the following three workforce housing revolving loan fund (RLF) programs administered by the Wisconsin Housing and Economic Development Authority (WHEDA), which were created in 2023 to increase affordable housing options statewide: 1.) Infrastructure Access Program; 2.) Restore Main Street Program; and 3.) Commercial-to-Housing Conversion Program. The bill updates project eligibility criteria and maximum loan amounts to make the programs more attractive and usable for developers and communities. Most importantly, this bill will repeal the “anti-stacking” language in current law that prohibits pairing financing from these programs with Tax Increment Financing (TIF) or historic rehabilitation tax credits, removing a major barrier to project feasibility.
  • Status: This legislation was passed the Assembly and is awaiting further action in the Senate.

• AB 375 / SB 382 (Historic Preservation Tax Credit Modernization Bill)– This legislation enhances Wisconsin’s Historic Preservation Tax Credit (HTC) program, a proven economic development tool that attracts private investment and supports downtown revitalization, job creation, and tourism. Several changes over the years to both the state and federal HTC tax credit programs created eligibility obstacles that have derailed critical historic rehabilitation projects. This bill, which lowers administrative barriers to increase program access and promote additional historic preservation, will make the following changes to the program: 1.) Decouple the state HTC from the federal HTC for projects applying only for the state credit. This will allow smaller projects to qualify for the state credit without meeting the much higher federal expenditure threshold; and 2.) Modify the current $3.5 million project cap to allow reapplication every 15 years for new restoration work on the same parcel.
  • Status: This legislation passed the Assembly in a 99-0 vote. The bill is awaiting further action in the Senate.

Of course, back in December, Gov. Tony Evers signed another top WEDA legislative priority (AB 280) into law as 2025 WI Act 78. The new law enhances the housing and childcare tax credit incentives under the Business Development Tax Credit (BTC) program to encourage greater workforce housing and childcare investment by Wisconsin businesses. More specifically, it allows BTC investments in housing and childcare to include contributions made by eligible businesses to a third party for those purposes. By expanding eligibility beyond capital expenditures, it also gives employers the flexibility to make creative, community-oriented investments in partnership with local organizations. In addition, the law will allow housing development and childcare programs driven by the tax incentives to benefit entire communities rather than just the employees of BTC eligible companies.

The WEDC, which oversees the BTC program, recently issued new program guidelines to reflect changes to the BTC made by Act 78. Please direct any question regarding the new law and/or guidelines to your WEDC Regional Economic Development Director (REDD). You can also contact WEDA Legislative Affairs Director Michael Welsh at mwelsh@weda.org.