2017 - 2018 LEGISLATURE
November 20, 2017 - Introduced by Representatives Loudenbeck, Born,
Brandtjen, E. Brooks, Kuglitsch, Quinn, Spreitzer, Steffen and Subeck,
cosponsored by Senators Petrowski, Feyen and Stroebel. Referred to
Committee on Ways and Means.
1An Act to create
66.0602 (3) (ds) of the statutes; relating to: increasing a
2political subdivision's levy limit upon the subtraction of territory from a tax
3incremental financing district.
Analysis by the Legislative Reference Bureau
Under this bill, if the Department of Revenue recertifies the tax incremental
base of a tax incremental district because part of its territory is subtracted, the
political subdivision in which the TID is located may increase its levy limit by an
amount equal to the political subdivision's maximum allowable levy for the
preceding year, multiplied by a percentage equal to 50 percent of the amount
determined by dividing the value increment of the TID's territory that was
subtracted by the political subdivision's equalized value, as determined by DOR.
Generally, under current law, and subject to a number of exceptions, a city,
village, town, or county may not increase its levy by a percentage that exceeds its
“valuation factor," which is defined as the greater of either zero percent or the
percentage change in the political subdivision's equalized value due to new
construction, less improvements removed. The base amount of a political
subdivision's levy, on which the levy limit is imposed, is the actual levy for the
immediately preceding year.
Under one of the current law exceptions, if DOR does not certify a value
increment for a TID as a result of the district's termination, the levy limit otherwise
applicable to the political subdivision is increased by a certain amount.
Also under current law, once a TID has been created, 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."
Under the current law exception to the levy limit relating to DOR not certifying
a value increment for a TID that is terminated, the allowable increase is an amount
equal to the political subdivision's maximum allowable levy for the preceding year,
multiplied by a percentage equal to 50 percent of the amount determined by dividing
the terminated TID's value increment by the political subdivision's equalized value,
as determined by DOR. This bill allows for a similar adjustment when territory is
subtracted from a TID.
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:
66.0602 (3) (ds) of the statutes is created to read:
(ds) If the department of revenue recertifies the tax incremental 3
base of a tax incremental district as a result of the district's subtraction of territory 4
under s. 66.1105 (4) (h) 2., the levy limit otherwise applicable under this section shall 5
be adjusted in the first levy year in which the subtracted territory is not part of the 6
value increment. In that year, the political subdivision in which the district is located 7
shall increase the levy limit otherwise applicable by an amount equal to the political 8
subdivision's maximum allowable levy for the immediately preceding year, 9
multiplied by a percentage equal to 50 percent of the amount determined by dividing 10
the value increment of the tax incremental district's territory that was subtracted, 11
calculated for the previous year, by the political subdivision's equalized value, 12
exclusive of any tax incremental district value increments, for the previous year, all 13
as determined by the department of revenue.
(1) This act first applies to a levy that is imposed in December 2018.