Amendment SSA1-AB437

5. A town TID is subject to additional reporting requirements when the TID is terminated and must also report to DOR on annual expenditures.

6. Certain owners of taxable property located within or near a town that has created a TID, as well as cities and villages that border the town, and overlaying taxing districts, may request that DOR review whether the TID is expending money or incurring debt for an allowable project. If DOR grants the request for a review, the secretary of revenue, or the secretary's designee, must hold a hearing and make a determination as to whether the town is in compliance with the law or has made expenditures or incurred debts that are not allowed. If the secretary determines that the town has acted improperly, the secretary may order that all ineligible costs be paid back or that the TID be terminated.

7. If a city or village annexes town territory that includes a TID, the city or village must pay the town the eligible costs that are attributable to the annexed territory.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB437-SSA1, s. 1 Section 1. 20.566 (1) (go) of the statutes, as created by 2003 Wisconsin Act 127, is amended to read:

AB437-SSA1,3,6 20.566 (1) (go) Administration of tax incremental financing program. All moneys received from the fees imposed under s. ss. 60.85 (5) (a) and 66.1105 (5) (a) to pay the costs of the department of revenue in providing staff and administrative services associated with tax incremental districts under s. ss. 60.85 and 66.1105.

AB437-SSA1, s. 2 Section 2. 60.85 of the statutes is created to read:

AB437-SSA1,3,9 60.85 Town tax increment law. (1) Definitions. In this section, unless a different intent clearly appears from the context:

AB437-SSA1,3,12 (a) "Agricultural project" means agricultural activities classified in the North American Industry Classification System, 1997 edition, published by the U.S. office of management and budget, under the following industry numbers:

AB437-SSA1,3,13 1. 111 - Crop production

AB437-SSA1,3,14 2. 112 - Animal production

AB437-SSA1,3,15 3. 1151 - Support activities for agriculture.

AB437-SSA1,3,16 4. 1152 - Support activities for animal production.

AB437-SSA1,3,17 (b) "Environmental pollution" has the meaning given in s. 299.01 (4).

AB437-SSA1,4,3 (c) "Forestry project" means forestry activities classified in the North American Industry Classification System, 1997 edition, published by the U.S. office of management and budget, under the following industry numbers:

AB437-SSA1,4,4 1. 113 - Forestry and logging.

AB437-SSA1,4,5 2. 1153 - Support activities for forestry.

AB437-SSA1,4,6 (d) "Highway" has the meaning provided in s. 340.01 (22).

AB437-SSA1,4,9 (e) "Manufacturing project" means manufacturing activities classified in the North American Industry Classification System, 1997 edition, published by the U.S. office of management and budget, under the following industry numbers:

AB437-SSA1,4,10 1. 3116 - Animal slaughtering and processing.

AB437-SSA1,4,11 2. 321 - Wood product manufacturing

AB437-SSA1,4,12 3. 322 - Paper manufacturing.

AB437-SSA1,4,13 4. 325193 - Ethyl alcohol manufacturing.

AB437-SSA1,4,14 (f) "Personal property" has the meaning prescribed in s. 70.04.

AB437-SSA1,4,18 (g) "Planning commission" means a plan commission created under s. 62.23, if the town board exercises zoning authority under s. 60.62 or the town zoning committee under s. 60.61 (4) if the town board is not authorized to exercise village powers.

AB437-SSA1,5,5 (h) 1. "Project costs" means, subject to sub. (2) (b), any expenditures made or estimated to be made or monetary obligations incurred or estimated to be incurred by the town which are listed in a project plan as costs of public works or improvements within a tax incremental district or, to the extent provided in subd. 1. j., without the district, plus any incidental costs, diminished by any income, special assessments, or other revenues, including user fees or charges, other than tax increments, received or reasonably expected to be received by the town in connection with the implementation of the plan. Only a proportionate share of the costs permitted under this subdivision may be included as project costs to the extent that they benefit the tax incremental district. To the extent the costs benefit the town outside the tax incremental district, a proportionate share of the cost is not a project cost. "Project costs" include:

AB437-SSA1,5,12 a. Capital costs including, but not limited to, the actual costs of the construction of public works or improvements, new buildings, structures, and fixtures; the demolition, alteration, remodeling, repair or reconstruction of existing buildings, structures and fixtures other than the demolition of listed properties as defined in s. 44.31 (4); the acquisition of equipment to service the district; the removal or containment of, or the restoration of soil or groundwater affected by, environmental pollution; and the clearing and grading of land.

AB437-SSA1,5,16 b. Financing costs, including, but not limited to, all interest paid to holders of evidences of indebtedness issued to pay for project costs and any premium paid over the principal amount of the obligations because of the redemption of the obligations prior to maturity.

AB437-SSA1,5,19 c. Real property assembly costs, meaning any deficit incurred resulting from the sale or lease as lessor by the town of real or personal property within a tax incremental district for consideration which is less than its cost to the town.

AB437-SSA1,5,21 d. Professional service costs, including, but not limited to, those costs incurred for architectural, planning, engineering, and legal advice and services.

AB437-SSA1,5,24 e. Imputed administrative costs, including, but not limited to, reasonable charges for the time spent by town employees in connection with the implementation of a project plan.

AB437-SSA1,6,2 f. Relocation costs, including, but not limited to, those relocation payments made following condemnation under ss. 32.19 and 32.195.

AB437-SSA1,6,6 g. Organizational costs, including, but not limited to, the costs of conducting environmental impact and other studies and the costs of informing the public with respect to the creation of tax incremental districts and the implementation of project plans.

AB437-SSA1,6,9 h. Payments made, in the discretion of the town board, which are found to be necessary or convenient to the creation of tax incremental districts or the implementation of project plans.

AB437-SSA1,6,14 i. That portion of costs related to the construction or alteration of sewerage treatment plants, water treatment plants or other environmental protection devices, storm or sanitary sewer lines, water lines, or amenities on streets or the rebuilding or expansion of streets the construction, alteration, rebuilding or expansion of which is necessitated by the project plan for a district and is within the district.

AB437-SSA1,6,21 j. That portion of costs related to the construction or alteration of sewerage treatment plants, water treatment plants or other environmental protection devices, storm or sanitary sewer lines, water lines, or amenities on streets outside the district if the construction, alteration, rebuilding or expansion is necessitated by the project plan for a district, and if at the time the construction, alteration, rebuilding or expansion begins there are improvements of the kinds named in this subdivision on the land outside the district in respect to which the costs are to be incurred.

AB437-SSA1,6,24 k. Costs for the removal, or containment, of lead contamination in buildings or infrastructure if the town declares that such lead contamination is a public health concern.

AB437-SSA1,6,25 L. A fee imposed by the department of revenue under sub. (5) (a).

AB437-SSA1,7,2 2. Notwithstanding subd. 1., none of the following may be included as project costs for any tax incremental district:

AB437-SSA1,7,4 a. The cost of constructing or expanding administrative buildings, police and fire buildings, libraries, community and recreational buildings and school buildings.

AB437-SSA1,7,6 b. The cost of constructing or expanding any facility, if the town generally finances similar facilities only with utility user fees.

AB437-SSA1,7,8 c. General government operating expenses, unrelated to the planning or development of a tax incremental district.

AB437-SSA1,7,10 d. Cash grants made by the town to owners, lessees, or developers of land that is located within the tax incremental district.

AB437-SSA1,7,13 (i) "Project plan" means the properly approved plan for the development or redevelopment of a tax incremental district, including all properly approved amendments thereto.

AB437-SSA1,7,14 (j) "Real property" has the meaning prescribed in s. 70.03.

AB437-SSA1,7,18 (k) "Residential development" means sleeping quarters, within a proposed tax incremental district, for employees who work for an employer engaged in a project that is allowed under sub. (2) (b) 1. to 4. but does not include hotels, motels, or general residential housing development within a proposed tax incremental district.

AB437-SSA1,7,25 (L) "Tax increment" means that amount obtained by multiplying the total county, town, school, and other local general property taxes levied on all taxable property within a tax incremental district in a year by a fraction having as a numerator the value increment for that year in the district and as a denominator that year's equalized value of all taxable property in the district. In any year, a tax increment is "positive" if the value increment is positive; it is "negative" if the value increment is negative.

AB437-SSA1,8,4 (m) "Tax incremental base" means the aggregate value, as equalized by the department of revenue, of all taxable property located within a tax incremental district on the date as of which the district is created, determined as provided in sub. (5) (b).

AB437-SSA1,8,13 (n) "Tax incremental district" means a contiguous geographic area within a town defined and created by resolution of the town board, consisting solely of whole units of property as are assessed for general property tax purposes, other than railroad rights-of-way, rivers or highways. Railroad rights-of-way, rivers or highways may be included in a tax incremental district only if they are continuously bounded on either side, or on both sides, by whole units of property as are assessed for general property tax purposes which are in the tax incremental district. "Tax incremental district" does not include any area identified as a wetland on a map under s. 23.32.

AB437-SSA1,8,15 (o) "Taxable property" means all real and personal taxable property located in a tax incremental district.

AB437-SSA1,8,18 (p) "Tourism project" means activities that involve retailers classified in the North American Industry Classification System, 1997 edition, published by the U.S. office of management and budget, under the following industry numbers:

AB437-SSA1,8,19 1. 721214 — Recreational and vacation camps.

AB437-SSA1,8,20 2. 721211 — Recreational vehicle parks and campgrounds.

AB437-SSA1,8,21 3. 711212 — Racetracks.

AB437-SSA1,8,22 4. Dairy product stores included in 445299.

AB437-SSA1,8,23 5. Public golf courses included in 71391.

AB437-SSA1,9,3 (q) "Value increment" means the equalized value of all taxable property in a tax incremental district in any year minus the tax incremental base. In any year "value increment" is positive if the tax incremental base is less than the aggregate value of taxable property as equalized by the department of revenue; it is negative if that base exceeds that aggregate value.

AB437-SSA1,9,7 (2) Powers of towns. (a) Subject to par. (b) and except as provided under par. (c) and in addition to any other powers conferred by law, a town may exercise any powers necessary and convenient to carry out the purposes of this section, including the power to:

AB437-SSA1,9,8 1. Create tax incremental districts and define the boundaries of the districts.

AB437-SSA1,9,10 2. Cause project plans to be prepared, approve the plans, and implement the provisions and effectuate the purposes of the plans.

AB437-SSA1,9,11 3. Deposit moneys into the special fund of any tax incremental district.

AB437-SSA1,9,16 4. Enter into any contracts or agreements, including agreements with bondholders, determined by the town board to be necessary or convenient to implement the provisions and effectuate the purposes of project plans. The contracts or agreements may include conditions, restrictions, or covenants which either run with the land or which otherwise regulate the use of land.

AB437-SSA1,9,18 5. Designate, by ordinance or resolution, the town industrial development agency, as agent of the town, to perform all acts under this section.

AB437-SSA1,9,20 (b) The only projects for which a town may expend money or incur monetary obligations as a project cost are the following:

AB437-SSA1,9,21 1. Agricultural projects.

AB437-SSA1,9,22 2. Forestry projects.

AB437-SSA1,9,23 3. Manufacturing projects.

AB437-SSA1,9,24 4. Tourism projects.

AB437-SSA1,10,2 5. Residential development, but only to the extent that it has a necessary and incidental relationship to a project listed in subds. 1. to 4.

AB437-SSA1,10,4 6. Retail development that is limited to the retail sale of products that are produced due to a project that is developed under subd. 1., 2. or 3.

AB437-SSA1,10,9 (c) No town may exercise any power under this subsection within the extraterritorial zoning jurisdiction of a city or village, as that term is defined in s. 62.23 (7a) (a), unless the city's or village's governing body adopts a resolution which approves the town's exercise of power under this subsection within such an extraterritorial zoning jurisdiction.

AB437-SSA1,10,12 (3) Creation of tax incremental districts and approval of project plans. In order to implement the provisions of this section, the following steps and plans are required:

AB437-SSA1,10,22 (a) Holding of a public hearing by the planning commission at which interested parties are afforded a reasonable opportunity to express their views on the proposed creation of a tax incremental district and the proposed boundaries of the district. Notice of the hearing shall be published as a class 2 notice, under ch. 985. Before publication, a copy of the notice shall be sent by first class mail to the chief executive officer or administrator of all local governmental entities having the power to levy taxes on property located within the proposed district and to the school board of any school district which includes property located within the proposed district. For a county with no chief executive officer or administrator, notice shall be sent to the county board chairperson.

AB437-SSA1,10,25 (b) Designation by the planning commission of the boundaries of a tax incremental district recommended by it and submission of the recommendation to the town board.

AB437-SSA1,11,4 (c) Identification of the specific property to be included in the proposed tax incremental district. Owners of the property identified shall be notified of the proposed finding and the date of the hearing to be held under par. (e) at least 15 days prior to the date of the hearing.

AB437-SSA1,11,6 (d) Preparation and adoption by the planning commission of a proposed project plan for each tax incremental district.

AB437-SSA1,11,18 (e) At least 30 days before adopting a resolution under par. (h), holding of a public hearing by the planning commission at which interested parties are afforded a reasonable opportunity to express their views on the proposed project plan. The hearing may be held in conjunction with the hearing provided for in par. (a). Notice of the hearing shall be published as a class 2 notice, under ch. 985. The notice shall include a statement advising that a copy of the proposed project plan will be provided on request. Before publication, a copy of the notice shall be sent by 1st class mail to the chief executive officer or administrator of all local governmental entities having the power to levy taxes on property within the district and to the school board of any school district which includes property located within the proposed district. For a county with no chief executive officer or administrator, notice shall be sent to the county board chairperson.

AB437-SSA1,12,9 (f) Adoption by the planning commission of a project plan for each tax incremental district and submission of the plan to the town board. The plan shall include a statement listing the kind, number and location of all proposed public works or improvements within the district or, to the extent provided in sub. (1) (h) 1. j., outside the district, an economic feasibility study, a detailed list of estimated project costs, and a description of the methods of financing all estimated project costs and the time when the related costs or monetary obligations are to be incurred. The plan shall also include a map showing existing uses and conditions of real property in the district; a map showing proposed improvements and uses in the district; proposed changes of zoning ordinances, master plan, if any, map, building codes and town ordinances; a list of estimated nonproject costs; and a statement of the proposed method for the relocation of any persons to be displaced. The plan shall indicate how creation of the tax incremental district promotes the orderly development of the town. The town shall include in the plan an opinion of the town attorney or of an attorney retained by the town advising whether the plan is complete and complies with this section.

AB437-SSA1,12,13 (g) Approval by the town board of a project plan prior to or concurrent with the adoption of a resolution under par. (h). The approval shall be by resolution which contains findings that the plan is feasible and in conformity with the master plan, if any, of the town.

AB437-SSA1,12,14 (h) Adoption by the town board of a resolution which:

AB437-SSA1,12,19 1. Describes the boundaries, which may, but need not, be the same as those recommended by the planning commission, of a tax incremental district with sufficient definiteness to identify with ordinary and reasonable certainty the territory included in the district. The boundaries shall include only those whole units of property as are assessed for general property tax purposes.

AB437-SSA1,12,22 2. Creates the district as of January 1 of the same calendar year for a resolution adopted before October 1 or as of January 1 of the next subsequent calendar year for a resolution adopted after September 30.

AB437-SSA1,13,2 3. Assigns a name to the district for identification purposes. The first district created shall be known as "Tax Incremental District Number One, Town of .... in .... County". Each subsequently created district shall be assigned the next consecutive number.

AB437-SSA1,13,6 4. Declares the district to be either an agricultural project district, forestry project district, manufacturing project district, or tourism project district, and identifies the North American Industry Classification System industry number of each activity under each project for which project costs are to be expended.

AB437-SSA1,13,7 5. Contains all of the following findings:

AB437-SSA1,13,10 a. That not less than 75 percent, by area, of the real property within the district is to be used for projects of a single one of the project types listed under sub. (2) (b) 1. to 4. and in accordance with the declaration under subd. 4.

AB437-SSA1,13,13 b. That the improvement of the area is likely to enhance significantly the value of substantially all of the other real property in the district. It is not necessary to identify the specific parcels meeting the criteria.

AB437-SSA1,13,16 c. That the project costs of the district are limited to those specified under sub. (2) (b) and relate directly to promoting agriculture, forestry, manufacturing, or tourism development.