2013 - 2014 LEGISLATURE
December 9, 2013 - Introduced by Representatives Weininger, Bies, Genrich,
Kahl and Ohnstad, cosponsored by Senators Cowles,
Gudex and Schultz.
Referred to Committee on State and Local Finance.
1An Act to amend
66.1105 (2) (f) 2. d.; and to create
66.1105 (2) (Le) of the 2
statutes; relating to: expanding the definition of project costs to include
3certain cash payments with regard to a tax incremental financing district.
Analysis by the Legislative Reference Bureau
Under the current tax incremental financing program, a city or village may
create a tax incremental district (TID) in part of its territory to foster development
if at least 50 percent of the area to be included in the TID is blighted, in need of
rehabilitation or conservation, suitable for industrial sites, or suitable for mixed-use
development. Currently, towns and counties also have a limited ability to create a
TID under certain circumstances. Before a city or village may create a TID, several
steps and plans are required. These steps and plans include public hearings on the
proposed TID within specified time frames, preparation and adoption by the local
planning commission of a proposed project plan for the TID, approval of the proposed
project plan by the common council or village board, approval of the city's or village's
proposed TID by a joint review board that consists of members who represent the
overlying taxation districts, and adoption of a resolution by the common council or
village board that creates the TID as of a date provided in the resolution.
Also under current law, once a TID has been created, the Department of
Revenue (DOR) calculates the "tax incremental base" value of the TID, which is the
equalized value of all taxable property within the TID at the time of its creation. If
the development in the TID increases the value of the property in the TID above the
base value, a "value increment" is created. That portion of taxes collected on the
value increment in excess of the base value is called a "tax increment." The tax
increment is placed in a special fund that may be used only to pay back the project
costs of the TID.
The project costs of a TID, which are initially incurred by the creating city or
village, include public works such as sewers, streets, and lighting systems; financing
costs; site preparation costs; and professional service costs. DOR authorizes the
allocation of the tax increments until the TID terminates or, generally, 20 years, 23
years, or 27 years after the TID is created, depending on the type of TID and the year
in which it was created. Also under current law, a city or village may not generally
make expenditures for project costs later than five years before the unextended
termination date of the TID. Under certain circumstances, the life of the TID, the
expenditure period, and the allocation period may be extended.
Under current law, project costs may not include cash grants made by a city or
village to owners, lessees, or developers of land within a TID unless the grant
recipient has signed a development agreement with the city or village. This bill
creates another exception to the general prohibition of a city or village including such
cash grants as project costs of a TID.
Under the bill, such a cash grant may be made to a landlord in a tech park if
the landlord certifies to the city or village that the landlord is renting to the landlord's
tenants at below market rates and that the landlord will pass on the value of the cash
grant to the tenants or researchers who are located within the tech park within five
years of the landlord's receipt of the grant.
For further information see the local 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:
66.1105 (2) (f) 2. d. of the statutes is amended to read:
(f) 2. d. Cash grants made by the city to owners, lessees, or 3
developers of land that is located within the tax incremental district unless one of the
the grant recipient has signed a development agreement with the 5
city, a copy of which shall be sent to the appropriate joint review board or, if that joint 6
review board has been dissolved, retained by the city in the official records for that 7
tax incremental district; or the grant recipient is a landlord in a tech park and the
8landlord certifies to the city that the landlord is renting to the landlord's tenants who
9are located within the tech park at below market rates, and that the landlord will
1pass on to the landlord's tenants or researchers who are located within the tech park,
2within 5 years of receipt of the grant, in the form of reduced rent, capital equipment,
3or furniture, value that is at least equal to the amount of the cash grant
66.1105 (2) (Le) of the statutes is created to read:
(Le) "Tech park" means a real estate development that is dedicated 6
to the promotion of science and technology businesses, including agriculture, 7
advance manufacturing, engineered products, information technology, medical 8
devices, and medical imaging.
(1) This act first applies to a tax incremental district whose project plan is 11
approved or amended on the effective date of this subsection.