2017 - 2018 LEGISLATURE
April 13, 2017 - Introduced by Senators Cowles and Olsen, cosponsored by
Representatives Jacque, Thiesfeldt, Skowronski and Allen. Referred to
Committee on Government Operations, Technology and Consumer
1An Act to renumber
66.0627 (1) (a);
to renumber and amend
75.106 (4); to
66.0627 (title), 66.0627 (8) (a), 66.0627 (8) (d), 66.1105 (4) (gm) 4. c., 3
75.106 (2), 292.13 (1m) (intro.) and 292.13 (2); and to create
24.63 (5), 66.0627 4
(1) (ad), 66.1105 (20), 66.1106 (15), 66.1109 (2m), 66.1109 (4g), 66.1110 (4m), 5
75.106 (4) (b), 285.675, 292.15 (1) (c) and 292.15 (2) (at) of the statutes; relating
6to: remediation of contaminated land; air pollution control requirements for
7certain manufacturing facilities constructed on formerly contaminated land;
8reassigning tax deeds on tax delinquent brownfield properties; creating a new
9method for the creation of environmental remediation tax incremental
10financing districts; loans and repayment assistance by a political subdivision
11for certain brownfield revitalization projects and collection of the debt by
12special charge; state trust fund loans for brownfield projects; conversion of
1business improvement districts; and annexations to business improvement
2districts and neighborhood improvement districts.
Analysis by the Legislative Reference Bureau
Remediating contaminated land
Current law requires a person who possesses or controls property where there
is a hazardous substance in the soil or groundwater, or who caused the discharge of
a hazardous substance, to restore the environment and minimize the harmful effects
of the discharge. A person who possesses or controls property where there is a
hazardous substance in the soil or groundwater is exempt from these requirements
if the person did not cause the discharge, if the discharge originated from another
person's property, and if the person agrees to allow the Department of Natural
Resources or the person who caused the discharge to enter the property to investigate
and remedy the discharge.
When there is a hazardous substance in the soil or groundwater, it may be
emitted as a vapor. This bill provides that a person who possesses or controls
property where there is a hazardous substance in vapor emitted from the soil or
groundwater is also exempt from the remediation requirements if the person did not
cause the discharge, if the discharge originated from another person's property, and
if the person agrees to allow DNR or the person who caused the discharge to enter
the property to investigate and remedy the discharge.
Current law also provides that if a person who possesses or controls property
contaminated by a hazardous substance, or who caused the discharge of a hazardous
substance, voluntarily undertakes certain investigation and remediation actions on
the contaminated property that are approved by DNR, the person is exempt from
liability for certain other investigation and remediation actions and their costs.
This bill provides a definition of the term “property" in relation to the voluntary
party liability exemption for remediation of contaminated land. The bill also
provides that a property may be subdivided or transferred without affecting the
liability exemption or requiring a new application.
Current federal law and state law require construction permits and operation
permits for certain stationary sources of air pollution. Under certain circumstances,
DNR may issue a registration permit authorizing construction or operation or both
for a stationary source with low actual or potential emissions.
This bill creates a pilot program under which a participating owner or operator
of a stationary source is not required to make changes to the source's air pollution
controls due to new or modified legal requirements, except as required under the
federal Clean Air Act, for ten years after DNR issues a registration permit for the
source. This exemption would apply only if the source 1) is classified as a minor
source, which is a facility that emits air contaminants from a fixed location in an
amount that is less than an amount specified by DNR by rule; 2) is a manufacturing
facility that is being constructed on formerly contaminated land that has been
certified by DNR as having been remediated; and 3) is included in the Green Tier
Program, under which entities voluntarily undertake actions that are likely to result
in significant reductions in emissions of greenhouse gases or in energy use.
Under current law, before the county takes a foreclosure judgment on a
brownfield property for which the owner has failed to pay property taxes, the county
may assign its foreclosure rights to a person who agrees to remediate, maintain, and
monitor the property according to rules promulgated by DNR.
This bill provides that a county may also assign its right to take a tax deed on
brownfield property to a person who agrees to remediate, maintain, and monitor the
property according to DNR rules.
Tax incremental financing; environmental remediation
This bill changes the way environmental remediation tax incremental districts
Under the current tax incremental financing program, a city or village may
create a 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 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.
Currently, before a TID may be created or its project plan amended, the city or
village must adopt a resolution containing a finding that the equalized value of
taxable property of the TID plus the value increment of all existing TIDs does not
exceed 12 percent of the total equalized value of taxable property in the city or village
(the 12 percent test), subject to one general exception.
Under current law, the environmental remediation tax incremental financing
statute permits a city, village, town, or county to recoup the costs of remediating
contaminated property from property taxes that are levied on the remediated
property. The mechanism for financing remediation costs is similar to the
mechanism for financing project costs under the tax incremental financing program,
including the political subdivision's adoption of a resolution creating the
environmental remediation tax incremental district (ERTID), joint review board
project plan approval, and DOR certification of the district's tax incremental base.
DOR is required to certify the environmental remediation tax incremental base
if the political subdivision submits to DOR all of the following: 1) a statement that
the political subdivision has incurred some eligible costs, together with a detailed
proposed remedial action plan approved by DNR that contains cost estimates for
anticipated eligible costs, a schedule for the design and implementation that is
needed to complete the remediation, and certification from DNR that it has approved
the site investigation report that relates to the parcel; 2) a statement that all taxing
jurisdictions with authority to levy general property taxes on the parcel of property
have been notified that the political subdivision intends to recover its environmental
remediation costs by using an environmental remediation tax increment; and 3) a
statement that the political subdivision has attempted to recover its environmental
remediation costs from the person who is responsible for the environmental pollution
that is being remediated. Thereafter, the political subdivision that created the
ERTID may use positive environmental remediation tax increments to pay eligible
costs of remediating environmental pollution in the ERTID.
Currently, the maximum life of an ERTID is 23 years and no expenditure for
an eligible cost may be made by a political subdivision later than 15 years after the
environmental remediation tax incremental base is certified by DOR. An ERTID
may also terminate when a political subdivision has received sufficient
environmental remediation tax increments to cover all of the eligible costs.
Under this bill, no new ERTIDs may be created under current ERTID law.
Under the bill, ERTIDs may be created under the existing TID statutes and may
operate just like regular TIDs, subject to a number of conditions and exceptions.
Under the bill, the city or village creating the ERTID must obtain from DNR a
certified site investigation report. To obtain the report, the city or village must
submit to DNR detailed information regarding the environmental pollution that
exists within the boundaries of the proposed ERTID and a proposed remediation
plan. If DNR agrees with the description of the problem and the proposed
remediation plan, it must certify the report. Property containing significant
environmental pollution must constitute the majority of the territory in the proposed
ERTID. A city or village may modify and resubmit the report to DNR if the
department does not approve of the proposed report as submitted.
Under the bill, the 12 percent test does not apply to ERTIDs, and the tax
incremental base of an ERTID must be $1 when the district is created. In addition,
an ERTID created under the current TID law would have a maximum life of 27 years.
ERTIDs may be created under the process created in the bill by a city, village, town,
or county to the same extent that such a political subdivision may currently create
Property assessed clean energy loans
Under current law, a city, village, or town may impose a special charge against
real property for services rendered by allocating the cost of the service to the
properties that are served. Generally, a special charge is not payable in installments.
Also under current law, a political subdivision may make a loan to, or enter into a
loan repayment agreement with, an owner or lessee of a premises for making or
installing certain energy or water efficiency improvements (property assessed clean
energy or PACE program). The political subdivision may collect a loan repayment
under the PACE program as a special charge. A special charge imposed under the
PACE program may be collected in installments. Also, a political subdivision may
allow a third party that has provided financing for the PACE program project to
collect the installments.
Under this bill, a political subdivision may make a PACE loan to, or enter a
PACE agreement with, an owner or lessee of a premises for a brownfield
revitalization project. Brownfield revitalization projects are certain actions taken
upon a commercial or industrial premises that is located on, or that constitutes, a
brownfield. A brownfield is an abandoned, idle, or underused industrial or
commercial facility or site, the expansion or redevelopment of which is adversely
affected by actual or perceived environmental contamination. The actions that may
be included within a brownfield revitalization project under this bill are site
assessment, remediation, lead or asbestos abatement, demolition, and other
standard site preparation actions. A political subdivision that makes a PACE loan,
or enters into a PACE agreement, for a brownfield revitalization project must provide
a repayment period of not more than 20 years.
Neighborhood improvement districts and business improvement districts
Under current law, a municipality may create a business improvement district
(BID), upon being petitioned to do so by a business owner whose business is located
in the proposed BID, if a number of steps are taken. A BID consists of contiguous
parcels of land and operates under an operating plan approved by the BID board and
the municipality. The creating municipality may impose special assessments on real
property in the BID, other than real property used exclusively for residential
purposes and property exempt from general property taxes, to provide for
development, redevelopment, maintenance, operation, and promotion of the BID.
Also under current law, a municipality may create a neighborhood
improvement district (NID), upon being petitioned to do so by an owner of real
property that is located in the proposed NID, if a number of steps are taken. In
general, an NID is an area within a municipality consisting of parcels that are nearby
one another, but not necessarily contiguous, at least some of which are used for
residential purposes and are subject to general real estate taxes. An NID operates
under an operating plan approved by the NID board and the municipality. The
creating municipality may impose special assessments on real property located
within the NID, except real property that is used exclusively for fewer than eight
residential dwelling units and real property that is exempt from general property
taxes, to provide for the development, redevelopment, maintenance, operation, and
promotion of the NID.
Under this bill, territory may be annexed to a BID or NID using essentially the
same procedure as for the creation of the BID or NID. Also under this bill, upon
petition by an owner of real property that is subject to general real estate taxes, that
is used exclusively for residential purposes, and that is located in a BID, a BID may
convert to an NID.
State trust fund loans
Under current law, the Board of Commissioners of Public Lands manages the
common school fund, the normal school fund, the university fund, and the
agricultural college fund (trust funds). BCPL also administers a state trust fund
loan program under which it makes loans, from moneys belonging to the trust funds,
to school districts, local governments, and certain other public entities for certain
public purposes. Also under current law, the Wisconsin Constitution prohibits a
municipality from becoming indebted in an amount that exceeds 5 percent of the
taxable property located in the municipality.
This bill provides that a state trust fund loan to a municipality made for the
purpose of funding a project related to brownfields may not be included in arriving
at the constitutional debt limitation if 1) the term of the loan is not more than 15
years, 2) the loan is not in default, and 3) DNR verifies to BCPL that the site on which
the project will occur is a brownfield.
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:
24.63 (5) of the statutes is created to read:
24.63 (5) Brownfield project loans.
A state trust fund loan to a city, village, 3
or town made for the purpose of funding a project related to brownfields, as defined 4
in s. 238.13 (1) (a), may not be included in arriving at the debt limitation under sub. 5
(1) or the constitutional debt limitation under article XI, section 3, of the constitution 6
if all of the following apply:
(a) The term of the loan is not more than 15 years.
(b) The loan is not in default.
(c) The department of natural resources verifies to the board that the site on 3
which the project will occur is a brownfield, or, if the project encompasses more than 4
one site, verifies that not less than 50 percent of the project area is brownfield.
66.0627 (title) of the statutes is amended to read:
(title) Special charges for current services and energy and
7water efficiency improvement loans certain loan repayments.