LRB-4468/1
MES:jlg:km
1999 - 2000 LEGISLATURE
March 9, 2000 - Introduced by Senators Burke, Clausing, Risser, Robson and
Rosenzweig, cosponsored by Representatives Bock, Berceau, Black,
Goetsch, J. Lehman, Owens, Pocan, Musser, Richards, Staskunas, Turner

and Urban. Referred to Committee on Economic Development, Housing and
Government Operations.
SB464,1,3 1An Act to repeal 66.46 (4) (gm) 5.; to amend 66.46 (4) (gm) 1., 66.46 (4) (gm) 4.
2a. and 66.46 (4) (gm) 4. bm.; and to create 66.46 (4) (gm) 4. d. of the statutes;
3relating to: limiting the uses of tax incremental financing.
Analysis by the Legislative Reference Bureau
Under the current tax incremental financing (TIF) program, a city or village
may create a tax incremental district (TID) in part of its territory to foster
development if at least 50% of the area to be included in the TID is blighted, in need
of rehabilitation or suitable for industrial sites. 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, 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 and creation by the city or village of a
joint review board to review the proposal. The joint review board, which is made up
of representatives of the overlying taxing jurisdictions of the proposed TID, must
approve the project plan or the TID may not be created. If an existing TID project
plan is amended by a planning commission, these steps are also required.
Currently, unless the TID is suitable for certain industrial sites, property
standing vacant for an entire seven-year period immediately preceding the adoption
of the resolution that creates the TID may not make up more than 25% of the area
in the TID. The bill eliminates this provision.
Also under current law, once a TID has been created, the department of revenue
(DOR) calculates the "tax increment 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 only be used to pay back the costs of the TID.
The 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 23 years, or 27 years in certain cases,
after the TID is created, whichever is sooner. TIDs are required to terminate, under
current law and with one exception, once these costs are paid back, 16 years, or 20
years in certain cases, after the last expenditure identified in the project plan is made
or when the creating city or village dissolves the TID, whichever occurs first.
This bill limits the use tax incremental financing to areas that are blighted or
in need of rehabilitation and requires the city or village to adopt a finding that no part
of the district includes an area identified as agricultural or forest land.
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:
SB464, s. 1 1Section 1. 66.46 (4) (gm) 1. of the statutes is amended to read:
SB464,3,52 66.46 (4) (gm) 1. Describes the boundaries, which may, but need not, be the
3same as those recommended by the planning commission, of a tax incremental
4district with sufficient definiteness to identify with ordinary and reasonable
5certainty the territory included therein. The boundaries shall include only those
6whole units of property as are assessed for general property tax purposes. Property
7standing vacant for an entire 7-year period immediately preceding adoption of the
8resolution creating a tax incremental district may not comprise more than 25% of the
9area in the tax incremental district, unless the tax incremental district is suitable
10for industrial sites under subd. 4. a. and the local legislative body implements an
11approved project plan to promote industrial development within the meaning of s.
1266.52. In this subdivision, "vacant property" includes property where the fair market

1value or replacement cost value of structural improvements on the parcel is less than
2the fair market value of the land. In this subdivision, "vacant property" does not
3include property acquired by the local legislative body under ch. 32 or property
4included within the abandoned Park East freeway corridor or the abandoned Park
5West freeway corridor in Milwaukee county.
SB464, s. 2 6Section 2. 66.46 (4) (gm) 4. a. of the statutes is amended to read:
SB464,3,107 66.46 (4) (gm) 4. a. Not less than 50%, by area, of the real property within such
8district is at least one of the following: a blighted area; or in need of rehabilitation
9or conservation work, as defined in s. 66.435 (2m) (b); or suitable for industrial sites
10within the meaning of s. 66.52 and has been zoned for industrial use
; and
SB464, s. 3 11Section 3. 66.46 (4) (gm) 4. bm. of the statutes is amended to read:
SB464,3,1512 66.46 (4) (gm) 4. bm. The project costs relate directly to eliminating blight, or
13directly serve to rehabilitate or conserve the area or directly serve to promote
14industrial development
, consistent with the purpose for which the tax incremental
15district is created under subd. 4. a.; and
SB464, s. 4 16Section 4. 66.46 (4) (gm) 4. d. of the statutes is created to read:
SB464,3,1817 66.46 (4) (gm) 4. d. No part of the district includes an area identified as
18agricultural or forest land.
SB464, s. 5 19Section 5. 66.46 (4) (gm) 5. of the statutes is repealed.
SB464, s. 6 20Section 6. Initial applicability.
SB464,3,2221 (1) This act first applies to a tax incremental financing district that is created,
22or whose project plan is amended, on the effective date of this subsection.
SB464,3,2323 (End)
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