EVM:wlj:rs
2013 - 2014 LEGISLATURE
October 4, 2013 - Introduced by Representatives Steineke, Murphy, Born and
Ohnstad, cosponsored by Senator Cowles. Referred to Committee on State
and Local Finance.
AB416,1,3 1An Act to amend 66.1105 (6) (f) 1. (intro.), 66.1106 (1) (i), 66.1106 (2) (c), 66.1106
2(7) (e) (intro.), 66.1106 (7) (e) 1. and 66.1106 (7) (e) 2.; and to create 66.1105 (6)
3(f) 2. d. of the statutes; relating to: the sharing of tax increments.
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. 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, 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 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 be used only to pay back the project
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, 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.
Under certain limited circumstances, a TID that has paid off all of its project
costs but has not reached its mandatory termination date may become a donor TID,
continue to receive tax increments, and forward those increments to a recipient TID
created by the same city or village.
Under current law, the environmental remediation tax incremental financing
program permits a city, village, town, or county (political subdivision) 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 very
similar to the mechanism for financing project costs under the tax incremental
financing program.
Initially, the governing body of a political subdivision adopts a resolution
creating an environmental remediation tax incremental district (ERTID) with
particular boundaries. This resolution is then reviewed by a joint review board made
up of representatives of the overlying taxing jurisdictions. If the joint review board
approves the ERTID, a political subdivision that has incurred eligible costs to
remediate environmental pollution on a parcel of property may apply to DOR to
certify the environmental remediation tax incremental base of the parcel. 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 the Department of Natural Resources
(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 current law, the governing body of a political subdivision may adopt a
resolution requesting that DOR allocate environmental remediation tax increments

from an ERTID that will recover all eligible costs to another ERTID created by the
same governing body. Upon receipt of a copy of this resolution, DOR would continue
to allocate environmental remediation tax increments from the donor ERTID after
all of the eligible costs for that ERTID have been recovered. These increments would
be applied to another ERTID created in the same political subdivision. Increments
from the donor ERTID continue to be generated until the earlier of 1) 23 years after
the creation of the donor ERTID; or 2) the recovery of all eligible costs for the
recipient ERTID.
Under this bill, upon approval by the joint review board, a TID may become a
donor TID and provide increments to a recipient ERTID created by the same city or
village. Also, the governing body of a political subdivision may adopt a resolution
requesting that DOR allocate environmental remediation tax increments from an
ERTID that has recovered all eligible costs to certain TIDs that are not ERTIDs.
Generally, an ERTID may become a donor ERTID to a TID in the same situations
when a TID may become a donor TID. Increments from the donor ERTID may be
generated until the earlier of 1) 23 years after the creation of the donor ERTID; or
2) the recovery of all project costs for the recipient 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:
AB416,1 1Section 1. 66.1105 (6) (f) 1. (intro.) of the statutes is amended to read:
AB416,3,82 66.1105 (6) (f) 1. (intro.) Not later than the date on which a tax incremental
3district terminates under sub. (7) (am), a planning commission may amend under
4sub. (4) (h) the project plan of a tax incremental district to allocate positive tax
5increments generated by that tax incremental district to another tax incremental
6district created by that planning commission or to an environmental remediation tax
7incremental district created under s. 66.1106 by the same governing body
if all of the
8following conditions are met:
AB416,2 9Section 2. 66.1105 (6) (f) 2. d. of the statutes is created to read:
AB416,3,1110 66.1105 (6) (f) 2. d. The recipient district is an environmental remediation tax
11incremental district created under s. 66.1106.
AB416,3 12Section 3. 66.1106 (1) (i) of the statutes is amended to read:
AB416,4,5
166.1106 (1) (i) "Period of certification" means a period of not more than 23 years
2beginning after the department certifies the environmental remediation tax
3incremental base under sub. (4), a period before all eligible costs have been paid, or
4a period before all eligible costs or project costs of a recipient district designated
5under sub. (2) (c) have been paid, whichever occurs first.
AB416,4 6Section 4. 66.1106 (2) (c) of the statutes is amended to read:
AB416,4,187 66.1106 (2) (c) Notwithstanding par. (a) or (b), or sub. (7) (d) 1. or (11) (a), if the
8governing body of a political subdivision determines that all eligible costs of an
9environmental remediation tax incremental district that it created will be paid
10before the date specified in sub. (11) (b), the governing body of that political
11subdivision may adopt a resolution requesting that the department allocate positive
12environmental remediation tax increments generated by that donor environmental
13remediation tax incremental district to pay the eligible costs of another
14environmental remediation tax incremental district created by that governing body
15or to pay project costs, as defined in s. 66.1105 (2) (f), of a tax incremental district
16created under s. 66.1105 and located in the same overlying taxing jurisdictions and
17that satisfies one of the requirements under s. 66.1105 (6) (f) 2
. A resolution under
18this paragraph must be adopted before the expiration of the period of certification.
AB416,5 19Section 5. 66.1106 (7) (e) (intro.) of the statutes is amended to read:
AB416,5,420 66.1106 (7) (e) (intro.) Notwithstanding par. (d), if the governing body of a
21political subdivision adopts a resolution described in sub. (2) (c), it shall provide a
22copy of the resolution to the department. The department shall authorize a positive
23environmental remediation tax increment generated by a donor district, as described
24in sub. (2) (c), to the political subdivision that incurred eligible costs to remediate
25environmental pollution in another district within that political subdivision or that

1incurred project costs, as defined in s. 66.1105 (2) (f), for a tax incremental district
2within that political subdivision that was created under s. 66.1105 and that satisfies
3one of the requirements under s. 66.1105 (6) (f) 2.
, as described in sub. (2) (c), until
4the earlier of the following occurs:
AB416,6 5Section 6. 66.1106 (7) (e) 1. of the statutes is amended to read:
AB416,5,96 66.1106 (7) (e) 1. The political subdivision has received aggregate
7environmental remediation tax increments with respect to the recipient district in
8an amount equal to the aggregate of all of the eligible costs or project costs for that
9district.
AB416,7 10Section 7. 66.1106 (7) (e) 2. of the statutes is amended to read:
AB416,5,1211 66.1106 (7) (e) 2. The donor district terminates under sub. (11) (b) or 66.1105
12(7)
.
AB416,5,1313 (End)
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