February 27, 2015 - Introduced by
Joint Legislative Council. Referred to
Committee on Economic Development and Commerce.
SB50,1,10
1An Act to repeal 66.1105 (5) (bg), 66.1105 (6) (am) 4., 66.1105 (6) (dm) 1., 66.1105
2(6) (dm) 3. a., 66.1105 (6) (dm) 4. and 66.1105 (6) (e) 1. c.; and
to amend 60.85
3(4) (b) 2., 66.0602 (3) (dm), 66.1105 (4) (gm) 5., 66.1105 (4) (h) 1., 66.1105 (4e)
4(b) 3., 66.1105 (4m) (b) 2., 66.1105 (4m) (b) 2m., 66.1105 (6) (a) 7., 66.1105 (6) (a)
58., 66.1105 (6) (e) 1. b., 66.1105 (7) (am) 2., 66.1105 (7) (am) 3. and 66.1106 (3)
6(b) 2. of the statutes;
relating to: industrial zoning requirements in tax
7incremental districts, planning commission notice for tax incremental district
8amendments, obsolete references relating to tax incremental districts,
9allocation of tax increments, joint review board review, and calculation of levy
10limits following dissolution of a tax incremental district.
Analysis by the Legislative Reference Bureau
This bill is explained in the Notes provided by the Joint Legislative Council in
the bill.
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:
Joint Legislative Council prefatory note: This bill was prepared for the Joint
Legislative Council's Study Committee on Review of Tax Incremental Financing.
Industrial Zoning Requirements in Tax Incremental Districts
Under current law, a resolution to create a tax incremental district (TID) must
include a finding that not less than 50 percent, by area, of the real property within the
district is at least one of the following: a blighted area; in need of rehabilitation or
conservation work; suitable for industrial sites and zoned for industrial use; or suitable
for mixed-use development. The resolution must also confirm that any real property
within the district that is found suitable for industrial sites and is zoned for industrial
use will remain zoned for industrial use for the life of the tax incremental district, and
must declare that the district is a blighted area district, a rehabilitation or conservation
district, an industrial district, or a mixed-use district based on the identification and
classification of the property included within the district.
The bill specifies that the requirement related to maintenance of industrial zoning
applies only to districts that are declared to be industrial districts.
Planning Commission Notice for TID Amendments
Under current law, a TID's project plan may be amended for several reasons,
including modification of the expenditures allowed in a TID's project plan, addition or
subtraction of territory to the TID's boundaries, extension of the TID's lifespan, and
donation of tax increments to another TID.
Generally, the process to amend a TID's project plan is similar to the process of
creating a TID, requiring a public hearing held by the planning commission and adoption
of resolutions by the planning commission, municipality, and joint review board (JRB) to
approve the plan or amendment. As part of this process, the planning commission must
publish a class 2 notice of its public hearing. The JRB must publish notice of its meeting
as a class 1 notice, at least five days before the meeting.
Under current law, a class 2 notice consists of insertions of the notice for two
consecutive weeks, with the last insertion at least a week prior to the meeting date, in the
appropriate newspaper of record under ch. 985, stats. A class 1 notice, unless otherwise
specified (for example, the requirement that the JRB must publish a notice five days
before its meeting), requires a single insertion of the notice, at least a week prior to the
meeting date, in the appropriate newspaper of record.
The bill amends the notice requirement of the planning commission from a class
2 notice to a class 1 notice with regard to notices relating to the TID amendment process.
Obsolete References
Over time, the statutes relating to tax incremental financing have been amended
to include numerous provisions that are significantly limited in their scope, often relating
to a single municipality or a particular TID. Often, these amendments offer special
statutory authorization regarding creation, amendment, or lifespan of a particular
district or class of districts, or to TIDs in a particular municipality.
The bill repeals certain provisions of the statutes relating to tax incremental
financing that the Department of Revenue (DOR) identified as obsolete.
Timing Penalty
Under current law, certain statutory and administrative deadlines relating to the
allocation of positive tax increments to a TID combine to result in variation in the
maximum number of positive increments that may be allocated to a TID, depending on
the date on which a municipality acted to create the TID and its project plan. In
particular, the maximum number of positive increments that a TID may receive is one
fewer for a TID and project plan created after September 30 and before May 15 than for
TIDs created on or after May 15 and before October 1.
For newly created TIDs, the bill extends a TID's lifespan and allocation period of
positive tax increments by one year if the municipality that creates the TID adopts the
project plan for the TID after September 30 and before May 15.
Joint Review Board Review Period
Before a municipality's resolution to create a TID, amend a TID's project plan, or
require DOR to redetermine a TID's base value may take effect, several steps are
required. One of these steps is JRB approval of a municipality's TID resolution. A JRB
consists of members who represent the overlying taxation districts. In general, the JRB
must approve the resolution by a majority vote within 30 days after receiving the
resolution. The review period applicable to an industry-specific TID located in a town
and an environmental remediation TID is not less than 10 days nor more than 30 days.
The bill amends the maximum review period the JRB has to approve a
municipality's TID resolution from 30 days to 45 days after receiving the resolution.
Calculation of Levy Limit Exception
Generally, under the current local levy law, and subject to a number of exceptions,
a city, village, town, or county (political subdivision) may not increase its base levy (the
prior year's actual levy) in any year by more than the percentage change in the political
subdivision's equalized value due to new construction, less improvements removed,
including new construction that occurs in a TID between the previous year and the
current year, but not less than 0 percent. Also, when determining its levy limit, a
municipality must exclude the amount of any tax increment generated by property in a
TID located in the municipality.
There are numerous exceptions that may be used to adjust a political subdivision's
levy limit. One exception authorizes an increase in a municipality's levy limit for the year
that a TID terminates. If DOR does not certify a TID as a result of the district's
termination, the levy limit otherwise applicable is increased by an amount equal to the
municipality'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 municipality's equalized value, as determined by DOR. The
increase must be applied to the municipality's levy limit in the year that the TID
terminates.
The bill specifies that the municipality's equalized value for the preceding year, as
used in the calculation of the levy limit exception for the year that a TID terminates,
excludes the value of any TID value increments.
SB50,1
1Section
1. 60.85 (4) (b) 2. of the statutes is amended to read:
SB50,3,52
60.85
(4) (b) 2. No tax incremental district may be created and no project plan
3may be amended unless the joint review board approves the resolution adopted
4under sub. (3) (h) or (j) 1. by a majority vote not less than 10 days nor more than
30 545 days after receiving the resolution.
Note: This Section extends the maximum review period that the JRB has to
approve the creation or amendment of an industry-specific town TID from 30 days to 45
days.
SB50,2
6Section
2. 66.0602 (3) (dm) of the statutes is amended to read:
SB50,4,10
166.0602
(3) (dm) If the department of revenue does not certify a value
2increment for a tax incremental district for the current year as a result of the
3district's termination, the levy increase limit otherwise applicable under this section
4in the current year to the political subdivision in which the district is located is
5increased by an amount equal to the political subdivision's maximum allowable levy
6for the immediately preceding year, multiplied by a percentage equal to 50 percent
7of the amount determined by dividing the value increment of the terminated tax
8incremental district, calculated for the previous year, by the political subdivision's
9equalized value
, exclusive of any tax incremental district value increments, for the
10previous year, all as determined by the department of revenue.
Note: This Section excludes the value of any TID increments from the calculation
of the levy limit exception that applies for the year a TID terminates.
SB50,3
11Section
3. 66.1105 (4) (gm) 5. of the statutes is amended to read:
SB50,4,1512
66.1105
(4) (gm) 5.
Confirms If the district is declared to be an industrial
13district under subd. 6., confirms that any real property within the district that is
14found suitable for industrial sites and is zoned for industrial use under subd. 4. a.
15will remain zoned for industrial use for the life of the tax incremental district.
Note: This Section specifies that maintenance of industrial zoning requirements
applies only to districts that are declared to be industrial districts.
SB50,4
16Section
4. 66.1105 (4) (h) 1. of the statutes is amended to read:
SB50,5,1117
66.1105
(4) (h) 1. Subject to subds. 2., 4., 5., and 6., the planning commission
18may, by resolution, adopt an amendment to a project plan. The amendment is subject
19to approval by the local legislative body and approval requires the same findings as
20provided in par. (g) and, if the amendment adds territory to a district under subd. 2.,
21approval also requires the same findings as provided in par. (gm) 4. c. Any
22amendment to a project plan is also subject to review by a joint review board, acting
1under sub. (4m). Adoption of an amendment to a project plan shall be preceded by
2a public hearing held by the plan commission at which interested parties shall be
3afforded a reasonable opportunity to express their views on the amendment. Notice
4of the hearing shall be published as a class
2 1 notice, under ch. 985. The notice shall
5include a statement of the purpose and cost of the amendment and shall advise that
6a copy of the amendment will be provided on request. Before publication, a copy of
7the notice shall be sent by 1st class mail to the chief executive officer or administrator
8of all local governmental entities having the power to levy taxes on property within
9the district and to the school board of any school district which includes property
10located within the proposed district. For a county with no chief executive officer or
11administrator, this notice shall be sent to the county board chairperson.
Note: This Section amends the notice a planning commission must provide with
regard to consideration of a TID amendment.
SB50,5
12Section
5. 66.1105 (4e) (b) 3. of the statutes is amended to read:
SB50,5,1613
66.1105
(4e) (b) 3. A resolution adopted under par. (a) 1. may not take effect
14unless the joint review board approves, by resolution, the designation under subd.
152. The joint review board shall approve or deny the designation within
30 45 days
16after receiving the resolution under subd. 2.
SB50,6
17Section
6. 66.1105 (4m) (b) 2. of the statutes is amended to read:
SB50,6,1018
66.1105
(4m) (b) 2. Except as provided in subd. 2m., no tax incremental district
19may be created and no project plan may be amended unless the board approves the
20resolution adopted under sub. (4) (gm) or (h) 1., and no tax incremental base may be
21redetermined under sub. (5) (h) unless the board approves the resolution adopted
22under sub. (5) (h) 1., by a majority vote within
30
45 days after receiving the
23resolution. With regard to a multijurisdictional tax incremental district created
1under this section, each public member of a participating city must be part of the
2majority that votes for approval of the resolution or the district may not be created.
3The board may not approve the resolution under this subdivision unless the board's
4approval contains a positive assertion that, in its judgment, the development
5described in the documents the board has reviewed under subd. 1. would not occur
6without the creation of a tax incremental district. The board may not approve the
7resolution under this subdivision unless the board finds that, with regard to a tax
8incremental district that is proposed to be created by a city under sub. (17) (a), such
9a district would be the only existing district created under that subsection by that
10city.
SB50,7
11Section
7. 66.1105 (4m) (b) 2m. of the statutes is amended to read:
SB50,6,1812
66.1105
(4m) (b) 2m. The requirement under subd. 2.
, 2013 stats., that a vote
13by the board take place within 30 days after receiving a resolution does not apply to
14a resolution amending a project plan under sub. (4) (h) 1. if the resolution relates to
15a tax incremental district, the application for the redetermination of the tax
16incremental base of which was made in 1998, that is located in a village that was
17incorporated in 1912, has a population of at least 3,800 and is located in a county with
18a population of at least 108,000.
Note: These Sections extend the review period that the JRB has to approve the
designation of a TID as distressed or severely distressed from 30 days to 45 days. They
also extend the review period that the JRB has to approve the creation or amendment of
a TID located in a city or village from 30 days to 45 days and amend the statutory
reference applicable to an exception to the 30-day JRB review period.
SB50,8
19Section
8. 66.1105 (5) (bg) of the statutes is repealed.
Note: This Section repeals an obsolete reference.
SB50,9
20Section
9. 66.1105 (6) (a) 7. of the statutes is amended to read:
SB50,7,9
166.1105
(6) (a) 7. Twenty years after the tax incremental district is created if
2the district is created on or after October 1, 2004, and if the district is at least
3predominantly suitable for mixed-use development or industrial sites under sub. (4)
4(gm) 6., except that if the life of the district is extended under sub. (7) (am) 2. an
5allocation under this subdivision may be made 23 years after such a district is
6created.
For a tax incremental district created after the effective date of this
7subdivision .... [LRB inserts date], the period during which a tax increment may be
8allocated under this subdivision shall be increased by one year if that district's
9project plan is adopted under sub. (4) (g) after September 30 and before May 15.
SB50,10
10Section
10. 66.1105 (6) (a) 8. of the statutes is amended to read:
SB50,7,1911
66.1105
(6) (a) 8. Twenty-seven years after the tax incremental district is
12created if the district is created on or after October 1, 2004, and if the district is a
13district specified under sub. (4) (gm) 6. other than a district specified under subd. 7.,
14except that if the life of the district is extended under sub. (7) (am) 3. an allocation
15under this subdivision may be made 30 years after such a district is created.
For a
16tax incremental district created after the effective date of this subdivision .... [LRB
17inserts date], the period during which a tax increment may be allocated under this
18subdivision shall be increased by one year if that district's project plan is adopted
19under sub. (4) (g) after September 30 and before May 15.
Note: These Sections extend a TID's lifespan and allocation period for tax
increments if a TID project plan is adopted after September 30 and before May 15.
SB50,11
20Section
11. 66.1105 (6) (am) 4. of the statutes is repealed.
SB50,12
21Section
12. 66.1105 (6) (dm) 1. of the statutes is repealed.
SB50,13
22Section
13. 66.1105 (6) (dm) 3. a. of the statutes is repealed.
SB50,14
23Section
14. 66.1105 (6) (dm) 4. of the statutes is repealed.
SB50,15
1Section
15. 66.1105 (6) (e) 1. b. of the statutes is amended to read:
SB50,8,42
66.1105
(6) (e) 1. b. Except as provided in subd. 1.
c. and e., the donor tax
3incremental district and the recipient tax incremental district have been created
4before October 1, 1995.
SB50,16
5Section
16. 66.1105 (6) (e) 1. c. of the statutes is repealed.
Note: These Sections repeal obsolete references.
SB50,17
6Section
17. 66.1105 (7) (am) 2. of the statutes is amended to read:
SB50,9,27
66.1105
(7) (am) 2. For a district that is created after September 30, 2004, about
8which a finding is made under sub. (4) (gm) 4. a. that not less than 50 percent, by area,
9of the real property within the district is suitable for industrial sites or mixed-use
10development, 20 years after the district is created, except that the city that created
11the district may, subject to sub. (8) (e), request that the joint review board extend the
12life of the district for an additional 3 years. Along with its request for a 3-year
13extension, the city may provide the joint review board with an independent audit
14that demonstrates that the district is unable to pay off its project costs within the 20
15years after the district is created. The joint review board may deny or approve a
16request to extend the life of the district for 3 years if the request does not include the
17independent audit, and the board shall approve a request to extend the life of the
18district for 3 years if the request includes the audit. If the joint review board extends
19the district's life, the district shall terminate at the earlier of the end of the extended
20period or the period specified in par. (a).
For a tax incremental district created after
21the effective date of this subdivision .... [LRB inserts date], the termination date for
22a district to which this subdivision applies shall either be increased by one year
23beyond the otherwise applicable termination date under this subdivision if that
1district's project plan is adopted under sub. (4) (g) after September 30 and before May
215, or shall be the period specified in par. (a), whichever is earlier.
SB50,18
3Section
18. 66.1105 (7) (am) 3. of the statutes is amended to read:
SB50,9,224
66.1105
(7) (am) 3. For a district that is created after September 30, 2004, about
5which a finding is made under sub. (4) (gm) 4. a. that not less than 50 percent, by area,
6of the real property within the district is a blighted area or in need of rehabilitation,
727 years after the district is created, except that the city that created the district may,
8subject to sub. (8) (e), request that the joint review board extend the life of the district
9for an additional 3 years. Along with its request for a 3-year extension, the city may
10provide the joint review board with an independent audit that demonstrates that the
11district is unable to pay off its project costs within the 27 years after the district is
12created. The joint review board may deny or approve a request to extend the life of
13the district for 3 years if the request does not include the independent audit, and the
14board shall approve a request to extend the life of the district for 3 years if the request
15includes the audit. If the joint review board extends the district's life, the district
16shall terminate at the earlier of the end of the extended period or the period specified
17in par. (a).
For a tax incremental district created after the effective date of this
18subdivision .... [LRB inserts date], the termination date for a district to which this
19subdivision applies shall either be increased by one year beyond the otherwise
20applicable termination date under this subdivision if that district's project plan is
21adopted under sub. (4) (g) after September 30 and before May 15, or shall be the
22period specified in par. (a), whichever is earlier.
Note: These Sections extend a TID's lifespan and allocation period for TID
increments if a TID project plan is adopted after September 30 and before May 15.
SB50,19
23Section
19. 66.1106 (3) (b) 2. of the statutes is amended to read:
SB50,10,3
166.1106
(3) (b) 2. No written application may be submitted under sub. (4) unless
2the board approves the written proposal under sub. (2) by a majority vote not less
3than 10 days nor more than
30 45 days after receiving the proposal.
Note: This Section extends the maximum review period that the JRB has to
approve the written proposal and statement required for the creation of an
environmental remediation TID.