2013 - 2014 LEGISLATURE
February 20, 2014 - Introduced by Representatives Jacque, Krug and Weininger,
cosponsored by Senator Grothman. Referred to Committee on State and Local
1An Act to amend
66.1105 (18) (c) 4.; and to create
60.23 (32) (e) of the statutes; 2relating to: expanding the authority of towns to create tax incremental
3financing districts and authorizing certain towns to participate in
4multijurisdictional tax incremental financing districts.
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 the current law limitations on towns to use tax incremental financing
(TIF), a town may create a TID for projects related to tourism, agriculture,
manufacturing, or forestry. A town may also use TIF for residential projects, but only
to the extent that the residential project has a necessary and incidental relationship
to a tourism, agricultural, manufacturing, or forestry project, and for retail projects
to the extent that the retail development is related to the retail sale of a product that
is produced due to an agricultural, forestry, or manufacturing project.
A town may also create a TID in limited circumstances under which the town
enters into a cooperative plan with a city or village under which part or all of the town
will be annexed or attached by the city or village.
This bill authorizes certain towns to exercise all of the powers of a city or village
to create a TID within the town. To create a TID under the bill, a town must have
a population of at least 5,000 and the equalized value of all taxable property within
the town must be at least $500 million in the year before the year in which the town
proposes to create the TID.
Also under current law, any number of cities and villages (municipalities) may
jointly create a multijurisdictional TID (MJTID). Towns may not participate in a
MJTID. To create a MJTID, municipalities must enter into an intergovernmental
cooperation agreement to create the MJTID. The agreement must specify a number
of things, including the proposed membership of the joint review board; a binding
procedure to resolve disputes; a procedure to dissolve the MJTID before it would
otherwise be required to terminate; a description of the responsibilities of each
municipality's clerk, treasurer, and assessor; specification of a lead municipality for
purposes of completing and submitting required documents; and procedures that
will be followed to amend the project plan or boundaries of the MJTID. A copy of the
agreement must be sent to DOR.
With regard to an MJTID, the district must be contiguous, its borders must
contain territory in all municipalities that are a party to the agreement, and at least
one parcel in each municipality must touch at least one parcel in at least one of the
other municipalities. The agreement must specify that the MJTID's application to
DOR will be submitted to DOR as one complete application and that the MJTID will
terminate at one time as a single entity. Generally, the current law provisions that
apply to all TIDs apply to MJTIDs.
Under this bill, the type of towns that are authorized in this bill to exercise all
of the powers of a city or village to create a TID with the town may participate in a
For further information see the state and 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:
60.23 (32) (e) of the statutes is created to read:
(e) 1. In this paragraph, "town" means a town in which the equalized 3
value of all taxable property in the town, in the year before the year in which the town 4
adopts a resolution under s. 66.1105 (4) (gm), is at least $500 million.
2. Subject to subd. 3., a town with a population of at least 5,000 may exercise 6
all powers of cities under s. 66.1105 to create a tax incremental district. If the town 7
board exercises the powers of a city under s. 66.1105, it is subject to the same duties 8
as a common council under s. 66.1105 and the town is subject to the same duties and 9
liabilities as a city under s. 66.1105.
3. a. If a town creates a tax incremental district under s. 60.85, the town may 11
not take any action with regard to that district except by acting under s. 60.85.
b. If a town creates a tax incremental district under par. (a), the town may not 13
take any action with regard to that district except by acting under par. (a).
66.1105 (18) (c) 4. of the statutes is amended to read:
(c) 4. No town, other than a town that is defined in s. 60.23 (32)
may be part of a multijurisdictional tax incremental district.
This act takes effect on October 1, 2014.