LRB-3112/1
MES:jld:rs
September 2011 Special Session
2011 - 2012 LEGISLATURE
October 11, 2011 - Introduced by
Committee on Senate Organization, by request
of Governor Scott Walker, Senator Cowles, and Representative Weininger.
Referred to Committee on Economic Development and Veterans and Military
Affairs.
SB1,1,5
1An Act to amend 66.1105 (4) (gm) 3., 66.1105 (4) (gm) 4. c., 66.1105 (4m) (a),
266.1105 (4m) (ae), 66.1105 (4m) (b) 2., 66.1105 (6) (a) (intro.) and 66.1105 (10)
3(a); and
to create 66.1105 (4m) (as), 66.1105 (6) (ag), 66.1105 (10) (d) and
466.1105 (18) of the statutes;
relating to: authorizing the creation of a
5multijurisdictional tax incremental financing district.
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 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 circumstances, the life of the TID
and the allocation period may be extended.
Under current law, a planning commission may adopt an amendment to a
project plan, which requires the approval of the common council or village board and
the same findings that current law requires for the creation of a new TID. Current
law also authorizes the amendment of a project plan up to four times during a TID's
existence to change the district's boundaries by adding or subtracting territory.
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 exception. Under the exception, a city or village
may simultaneously create a new TID and subtract territory from an existing TID
without adopting a resolution containing the 12 percent test if the city or village
demonstrates to DOR that the value of the territory that is subtracted at least equals
the amount that DOR believes is necessary to ensure that, when the new TID is
created, the 12 percent test is met. The city or village must also certify to DOR that
no other district created under this exception currently exists in the city or village.
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.
This bill authorizes any number of cities and villages (municipalities) to 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 under the bill, the current law provisions that apply to all TIDs apply
to MJTIDs. There are, however, a number of provisions that apply only to MJTIDs,
including the following:
1. A MJTID may not become a donor TID or receive tax increments from a donor
TID.
2. The 12 percent test applies in the aggregate to the municipalities that
participate in a MJTID, but an individual participating municipality may exceed the
12 percent limit for the part of the MJTID that is in that municipality, provided all
of the overlaying taxation districts agree to that municipality exceeding the 12
percent limit.
3. DOR may allocate positive tax increments to each participating municipality
only to the extent that the municipality's component of the MJTID has generated a
positive value increment.
4. Each participating municipality may appoint one public member to the joint
review board.
5. Generally, each school district, union high school district, elementary school
district, technical college district, and county that may levy taxes on the property
within the MJTID may select a representative to the joint review board unless the
unit of government's governing body opts out of this authority.
6. Besides the generally required joint review board majority vote to approve
the creation of a TID or the amendment of its project plan, all representatives of a
participating municipality must be in the majority that votes for such approvals for
a MJTID.
7. A MJTID may not incur project costs for an area that is outside the
boundaries of the MJTID.
This bill grants DOR the authority to require each participating municipality
to submit any forms prescribed by DOR without regard to whether a particular
municipality is the lead municipality or what the agreement specifies as the
responsibility of a particular municipality. DOR is also authorized to resolve any
ambiguity regarding the creation, amendment, administration, and termination of
a MJTID and may use the agreement as a guide to resolving the ambiguity.
Generally, DOR may impose only one $1,000 fee, as authorized under current
law, for determining or redetermining the tax incremental base of a MJTID no
matter how many participating municipalities are part of the district, and DOR may
charge only the lead municipality the $150 annual administrative fee.
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:
SB1, s. 1
1Section
1. 66.1105 (4) (gm) 3. of the statutes is amended to read:
SB1,4,62
66.1105
(4) (gm) 3. Assigns a name to the district for identification purposes.
3The first district created shall be known as "Tax Incremental District Number One,
4City of ...."
and the first district created under sub. (18) shall be known as
5"Multijurisdictional District Number One, City of ...". Each subsequently created
6district shall be assigned the next consecutive number.
SB1, s. 2
7Section
2. 66.1105 (4) (gm) 4. c. of the statutes is amended to read:
SB1,4,198
66.1105
(4) (gm) 4. c. Except as provided in subs. (10) (c)
and, (17),
and (18) (c)
93., the equalized value of taxable property of the district plus the value increment of
10all existing districts does not exceed 12 percent of the total equalized value of taxable
11property within the city. In determining the equalized value of taxable property
12under this subd. 4. c., the department of revenue shall base its calculations on the
13most recent equalized value of taxable property of the district that is reported under
14s. 70.57 (1m) before the date on which the resolution under this paragraph is
15adopted. If the department of revenue determines that a local legislative body
16exceeds the 12 percent limit described in this subd. 4. c., the department shall notify
17the city of its noncompliance, in writing, not later than December 31 of the year in
18which the department receives the completed application or amendment forms
19described in sub. (5) (b).
SB1, s. 3
20Section
3. 66.1105 (4m) (a) of the statutes is amended to read:
SB1,5,2121
66.1105
(4m) (a) Any city that seeks to create a tax incremental district, amend
22a project plan, or incur project costs as described in sub. (2) (f) 1. n. for an area that
23is outside of a district's boundaries, shall convene a temporary joint review board
24under this paragraph, or a standing joint review board under sub. (3) (g), to review
25the proposal. Except as provided in par. (am)
and (as), and subject to par. (ae), the
1board shall consist of one representative chosen by the school district that has power
2to levy taxes on the property within the tax incremental district, one representative
3chosen by the technical college district that has power to levy taxes on the property
4within the tax incremental district, one representative chosen by the county that has
5power to levy taxes on the property within the tax incremental district, one
6representative chosen by the city, and one public member. If more than one school
7district, more than one union high school district, more than one elementary school
8district, more than one technical college district or more than one county has the
9power to levy taxes on the property within the tax incremental district, the unit in
10which is located property of the tax incremental district that has the greatest value
11shall choose that representative to the board. The public member and the board's
12chairperson shall be selected by a majority of the other board members before the
13public hearing under sub. (4) (a) or (h) 1. is held. All board members shall be
14appointed and the first board meeting held within 14 days after the notice is
15published under sub. (4) (a) or (h) 1. Additional meetings of the board shall be held
16upon the call of any member. The city that seeks to create the tax incremental
17district, amend its project plan, or make or incur an expenditure as described in sub.
18(2) (f) 1. n. for an area that is outside of a district's boundaries shall provide
19administrative support for the board. By majority vote, the board may disband
20following approval or rejection of the proposal, unless the board is a standing board
21that is created by the city under sub. (3) (g).
SB1, s. 4
22Section
4. 66.1105 (4m) (ae) of the statutes is amended to read:
SB1,6,223
66.1105
(4m) (ae) 1. A representative chosen by a school district under par. (a)
24or, (am)
, or (as) shall be the president of the school board, or his or her designee. If
25the school board president appoints a designee, he or she shall give preference to the
1school district's finance director or another person with knowledge of local
2government finances.
SB1,6,83
2. The representative chosen by the county under par. (a)
or (as) shall be the
4county executive or, if the county does not have a county executive, the chairperson
5of the county board, or the executive's or chairperson's designee. If the county
6executive or county board chairperson appoints a designee, he or she shall give
7preference to the county treasurer or another person with knowledge of local
8government finances.
SB1,6,139
3. The representative chosen by the city under par. (a)
or (as) shall be the mayor,
10or city manager, or his or her designee. If the mayor or city manager appoints a
11designee, he or she shall give preference to the person in charge of administering the
12city's economic development programs, the city treasurer, or another person with
13knowledge of local government finances.
SB1,6,1814
4. The representative chosen by the technical college district under par. (a)
or
15(as) shall be the district's director or his or her designee. If the technical college
16district's director appoints a designee, he or she shall give preference to the district's
17chief financial officer or another person with knowledge of local government
18finances.
SB1, s. 5
19Section
5. 66.1105 (4m) (as) of the statutes is created to read:
SB1,6,2120
66.1105
(4m) (as) With regard to a multijurisdictional tax incremental district
21created under this section, all of the following apply:
SB1,6,2322
1. Each participating city may appoint one public member to the joint review
23board under par. (a).
SB1,7,524
2. If more than one school district, more than one union high school district,
25more than one elementary school district, more than one technical college district,
1or more than one county has the power to levy taxes on the property within the tax
2incremental district, each such jurisdiction may select a representative to the joint
3review board under par. (a), or 2 representatives as provided under par. (am), unless
4the jurisdiction's governing body opts out of this authority by adopting a resolution
5to that effect.
SB1, s. 6
6Section
6. 66.1105 (4m) (b) 2. of the statutes is amended to read:
SB1,7,207
66.1105
(4m) (b) 2. Except as provided in subd. 2m., no tax incremental district
8may be created and no project plan may be amended unless the board approves the
9resolution adopted under sub. (4) (gm) or (h) 1. by a majority vote within 30 days after
10receiving the resolution.
With regard to a multijurisdictional tax incremental
11district created under this section, each public member of a participating city must
12be part of the majority that votes for approval of the resolution or the district may
13not be created. The board may not approve the resolution under this subdivision
14unless the board's approval contains a positive assertion that, in its judgment, the
15development described in the documents the board has reviewed under subd. 1.
16would not occur without the creation of a tax incremental district. The board may
17not approve the resolution under this subdivision unless the board finds that, with
18regard to a tax incremental district that is proposed to be created by a city under sub.
19(17) (a), such a district would be the only existing district created under that
20subsection by that city.
SB1, s. 7
21Section
7. 66.1105 (6) (a) (intro.) of the statutes is amended to read:
SB1,8,1222
66.1105
(6) (a) (intro.) If the joint review board approves the creation of the tax
23incremental district under sub. (4m), and subject to
par. pars. (ae)
and (ag), positive
24tax increments with respect to a tax incremental district are allocated to the city
25which created the district for each year commencing after the date when a project
1plan is adopted under sub. (4) (g). The department of revenue may not authorize
2allocation of tax increments until it determines from timely evidence submitted by
3the city that each of the procedures and documents required under sub. (4) (d) to (f)
4has been completed and all related notices given in a timely manner. The
5department of revenue may authorize allocation of tax increments for any tax
6incremental district only if the city clerk and assessor annually submit to the
7department all required information on or before the 2nd Monday in June. The facts
8supporting any document adopted or action taken to comply with sub. (4) (d) to (f) are
9not subject to review by the department of revenue under this paragraph. After the
10allocation of tax increments is authorized, the department of revenue shall annually
11authorize allocation of the tax increment to the city that created the district until the
12soonest of the following events:
SB1, s. 8
13Section
8. 66.1105 (6) (ag) of the statutes is created to read:
SB1,8,1714
66.1105
(6) (ag) With regard to a multijurisdictional tax incremental district,
15the department of revenue may allocate positive tax increments to each participating
16city only to the extent that a city's component of the district has generated a positive
17value increment.
SB1, s. 9
18Section
9. 66.1105 (10) (a) of the statutes is amended to read:
SB1,8,2219
66.1105
(10) (a) Subject to any agreement with bondholders,
and except as
20provided in par. (d), a tax incremental district may be created, the boundaries of
21which overlap one or more existing districts, except that districts created as of the
22same date may not have overlapping boundaries.
SB1, s. 10
23Section
10. 66.1105 (10) (d) of the statutes is created to read:
SB1,9,3
166.1105
(10) (d) A proposed tax incremental district, the boundaries of which
2would overlap an existing multijurisdictional tax incremental district, may be
3created only if all of the following apply:
SB1,9,54
1. The creation is approved by a resolution adopted by the governing body of
5each of the multijurisdictional district's participating cities.
SB1,9,76
2. The creation is approved by a resolution adopted by the multijurisdictional
7district's joint review board.
SB1, s. 11
8Section
11. 66.1105 (18) of the statutes is created to read:
SB1,9,129
66.1105
(18) Multijurisdictional districts. (a)
Requirements. Two or more
10cities may enter into an intergovernmental cooperation agreement under s. 66.0301
11to jointly create a multijurisdictional tax incremental district under this section if all
12of the following apply:
SB1,9,1413
1. The district's borders contain territory in all of the cities that are a party to
14the agreement.
SB1,9,1515
2. The district is contiguous.
SB1,9,1716
3. At least one parcel in each participating city touches at least one parcel in
17at least one of the other cities.
SB1,9,2018
(b)
Contents of an agreement. The agreement described under par. (a) shall
19contain provisions that specify at least all of the following with regard to the proposed
20multijurisdictional tax incremental district:
SB1,9,2321
1. A detailed description of how all of the participating cities will be able to
22exercise the powers authorized under sub. (3) and meet the requirements under sub.
23(4).