LRBs0218/1
SWB:amn
2023 - 2024 LEGISLATURE
SENATE SUBSTITUTE AMENDMENT 1,
TO SENATE BILL 787
January 18, 2024 - Offered by Senator Marklein.
SB787-SSA1,1,7 1An Act to amend 66.0602 (1) (d), 66.0602 (3) (dq) 1. (intro.) and 66.0602 (3) (dv);
2and to create 66.1105 (5) (bu) and 66.1105 (6) (g) 4. of the statutes; relating
3to:
local levy increase limit calculations and exception to extension of tax
4incremental district lifespan for a tax incremental financing district created in
5the city of Evansville and limitations on the total value of taxable property that
6may be included in a tax incremental financing district created in the city of
7Evansville.
Analysis by the Legislative Reference Bureau
Under current law, cities and villages may use tax incremental financing (TIF)
to encourage development in the city or village. In general, under TIF, a city or
village pays for improvements in a tax incremental district (TID) and then collects
tax moneys attributable to all taxing jurisdictions on the increased property value
in the TID for a certain period of time to pay for the improvements. Ideally, after the
period of time, the city or village will have been repaid for its initial investment and
the property tax base in the TID will have permanently increased in value.
In general and in brief, a city or village makes use of TIF using the following
procedure:

1. The city or village designates an area as a TID and creates a project plan
laying out the expenditures that the city or village will make within the TID.
2. The Department of Revenue establishes the “base value” of the TID. This
value is the equalized value of all taxable property within the TID at the time of its
creation.
3. Each year thereafter, the “value increment” of the property within the TID
is determined by subtracting the base value from the current value of property
within the TID. The portion of taxes collected on any positive value increment is
collected by the city or village for use solely for the project costs of the TID. The taxes
collected by the city or village on positive value increments include taxes that would
have been collected by other taxing jurisdictions, such as counties or school districts,
were the TID not created.
4. Tax increments are collected until the city or village has recovered all of its
project costs or until the TID reaches its statutory termination date.
Under current law, a city or village may extend the life of a TID for up to one
year for housing stock improvement if all of the following occur:
1. The city or village pays off all of the TID's project costs.
2. The city or village adopts a resolution stating that it intends to extend the
life of the TID, the number of months it intends to do so, and how it intends to improve
housing stock.
3. The city or village notifies DOR.
Under the bill, a housing stock improvement extension may not be exercised
with regard to TID Number 10 in the city of Evansville.
Under current law, when creating a new TID or amending a TID, a city or
village must make a finding that the equalized value of taxable property of the new
or amended TID plus the value increment of all existing TIDs in the city or village
does not exceed 12 percent of the total equalized value of taxable property in the city
or village. Under this bill, TID Number 10 created by the city of Evansville must
count as exactly 4 percent of equalized value for purposes of the 12 percent rule.
Generally, under current law, local levy limits are applied to the property tax
levies that are imposed by political subdivisions. A political subdivision may not
increase its levy by a percentage that exceeds its “valuation factor," which is the
greater of either 1) the percentage change in the political subdivision's equalized
value due to new construction, less improvements removed (net new construction),
or 2) 0 percent.
2023 Wisconsin Act 12 changed the standard for determining the “valuation
factor” to include only 90 percent of new construction that occurs within TIDs created
after December 31, 2024, (covered TIDs) and to exclude any improvements removed
within these TIDs. That is, under Act 12, net new construction for a political
subdivision is the percentage change in the political subdivision's equalized value
due to new construction, including 90 percent of the value of new construction
occurring within a covered TID, less improvements removed, other than
improvements removed within a covered TID. The bill expands the standard created
by Act 12 to apply to TID Number 10 created by the city of Evansville.

Under current law, when a city or village creates a TID, 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 this base value, the amount by
which the equalized value exceeds the base value is the TID's “value increment.” The
taxes collected on this value increment pay for the project costs of the TID.
Prior to Act 12, the statutes provided for an increase in a political subdivision's
levy limit upon the termination of a TID. If DOR did not certify a value increment
for a TID for a year because the TID had terminated, the levy limit of the political
subdivision in which the TID is located increased by an amount based on 50 percent
of the previous year's value increment for the TID. (The actual amount was equal
to the 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 political subdivision's equalized value less any TID value
increments.) Also under pre-Act 12 law, a similar increase in levy limit resulted
when a political subdivision amended a TID to subtract territory.
Under Act 12, these existing standards for increasing the levy limit of a political
subdivision upon the termination or amendment of a TID are limited to TIDs created
before January 1, 2025. For TIDs created after December 31, 2024, upon termination
or amendment of the covered TID, the political subdivision's levy limit is increased
by an amount based on 10 percent of the TID's lifetime equalized value increase. (The
actual amount is equal to the aggregate of the annual amounts of new construction
less improvements removed in the covered TID.) This levy limit increase may be
further increased by an amount based on 15 percent of the TID's lifetime equalized
value increase if the TID terminates earlier than anticipated at the time of the
covered TID's creation. The bill applies the standard created by Act 12 for TIDs
created after December 31, 2024, to TID Number 10 created by the city of Evansville.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB787-SSA1,1 1Section 1. 66.0602 (1) (d) of the statutes, as affected by 2023 Wisconsin Act 12,
2is amended to read:
SB787-SSA1,4,33 66.0602 (1) (d) “Valuation factor" means a percentage equal to the greater of
4either the percentage change in the political subdivision's January 1 equalized value
5due to new construction less improvements removed between the previous year and
6the current or 0 percent. For a tax incremental district created after December 31,
72024, and for Tax Incremental District Number 10 created by the common council

1of the city of Evansville,
the valuation factor includes 90 percent of the equalized
2value increase due to new construction that is located in a tax incremental district,
3but does not include any improvements removed in a tax incremental district.
SB787-SSA1,2 4Section 2. 66.0602 (3) (dq) 1. (intro.) of the statutes, as created by 2023
5Wisconsin Act 12
, is amended to read:
SB787-SSA1,4,126 66.0602 (3) (dq) 1. (intro.) For a tax incremental district created after December
731, 2024, and for Tax Incremental District Number 10 created by the common council
8of the city of Evansville,
if the department of revenue does not certify a value
9increment for the tax incremental district for the current year as a result of the
10district's termination, the levy increase limit otherwise applicable under this section
11in the current year to the political subdivision in which the district is located is
12increased by all of the following amounts:
SB787-SSA1,3 13Section 3. 66.0602 (3) (dv) of the statutes, as created by 2023 Wisconsin Act
1412
, is amended to read:
SB787-SSA1,5,315 66.0602 (3) (dv) For a tax incremental district created after December 31, 2024,
16and for Tax Incremental District Number 10 created by the common council of the
17city of Evansville,
if the department of revenue recertifies the tax incremental base
18of a tax incremental district as a result of the district's subtraction of territory under
19s. 66.1105 (4) (h) 2., the levy limit otherwise applicable under this section shall be
20adjusted in the first levy year in which the subtracted territory is not part of the value
21increment. In that year, the political subdivision in which the district is located shall
22increase the levy limit otherwise applicable by an amount equal to the political
23subdivision's maximum allowable levy for the immediately preceding year,
24multiplied by a percentage equal to 10 percent of the amount determined by dividing
25the equalized value increase, calculated as provided in par. (dq) 2., attributable to the

1territory that was subtracted, calculated for the previous year, by the political
2subdivision's equalized value, exclusive of any tax incremental district value
3increments, for the previous year, all as determined by the department of revenue.
SB787-SSA1,4 4Section 4. 66.1105 (5) (bu) of the statutes is created to read:
SB787-SSA1,5,85 66.1105 (5) (bu) The Tax Incremental District Number 10 that is created by the
6common council of the city of Evansville shall count as exactly 4 percent of equalized
7value for purposes of the requirement that the total equalized value not exceed 12
8percent, as described in sub. (4) (gm) 4. c.
SB787-SSA1,5 9Section 5. 66.1105 (6) (g) 4. of the statutes is created to read:
SB787-SSA1,5,1110 66.1105 (6) (g) 4. This paragraph does not apply to Tax Incremental District
11Number 10 in the city of Evansville.
Loading...
Loading...