1999 - 2000 LEGISLATURE
November 5, 1999 - Introduced by Representatives Steinbrink, Porter, Kreuser
and Olsen, cosponsored by Senator Wirch. Referred to Joint committee on
Finance.
AB576,1,4 1An Act to amend 121.07 (6) (a) (intro.) and 121.15 (3m) (a) 1.; and to create
2120.135 and 121.91 (4) (h) of the statutes; relating to: authorizing a school
3board to create a capital improvement fund and adjusting a school district's
4revenue limit.
Analysis by the Legislative Reference Bureau
Under the current tax incremental financing (TIF) program, a city or village
may create a tax incremental district (TID) in part of its territory to foster
development if at least 50% of the area to be included in the TID is blighted, in need
of rehabilitation or suitable for industrial sites. 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 only be used to pay back the project
costs of the TID.
DOR authorizes the allocation of the tax increments until the TID terminates
or 23 years, or 27 years in certain cases, after the TID is created, whichever is sooner.
TIDs are required to terminate, under current law and with one exception, once these
costs are paid back, 16 years, or 20 years in certain cases, after the last expenditure
identified in the project plan is made or when the creating city or village dissolves
the TID, whichever occurs first.

With certain exceptions, current law limits the increase in the total amount of
revenue that a school board may receive each school year through the combination
of general school aids and the property tax levy to approximately $209 per pupil in
the 1998-99 school year and, in subsequent school years, to the amount of revenue
increase allowed per pupil in the previous school year increased by the percentage
change in the consumer price index. The limit is based on the difference between the
average number of pupils enrolled in the three previous school years and the average
of the number of pupils enrolled in the current and two preceding school years.
This bill authorizes a school board, by resolution, to create a capital
improvement fund to finance capital improvements if a TID that is located in the
school district is terminated before the maximum number of years that it could have
existed and if the value increment exceeds $300,000,000. In each year until the year
after the year in which the TID would have been required to terminate, the school
board may deposit in the fund an amount equal to that portion of the school district's
positive tax increment of the TID specified in the school board's resolution, which
shall be calculated by the department of revenue as if the TID has not terminated.
The bill also increases the school district's revenue limit in any school year by the
amount deposited in the capital improvement fund in that school year.
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:
AB576, s. 1 1Section 1. 120.135 of the statutes is created to read:
AB576,2,7 2120.135 Capital improvement fund. (1) By the first day of the 6th month
3commencing after the effective date of this subsection .... [revisor inserts date], by a
4two-thirds vote of the members elect, a school board may adopt a resolution creating
5a capital improvement fund for the purpose of financing the cost of acquiring and
6improving sites, constructing school facilities and major maintenance of or
7remodeling, renovating and improving school facilities if all of the following are true:
AB576,2,108 (a) A tax incremental district that is located in whole or in part in the school
9district is terminated before the maximum number of years that the tax incremental
10district would have existed under s. 66.46 (7) (am) or (ar).
AB576,2,1111 (b) The value increment of the tax incremental district exceeds $300,000,000.
AB576,3,7
1(2) In each year in which the school board adopts a resolution by a two-thirds
2vote of the members elect expressing its intention to do so until the year after the year
3in which the tax incremental district would have been required to terminate under
4s. 66.46 (7) (am) or (ar), the school board may deposit into the capital improvement
5fund the percentage, not to exceed 100%, specified in the resolution of the school
6district's portion of the positive tax increment of the tax incremental district in that
7year, as determined by the department of revenue under s. 66.46.
AB576,3,10 8(3) The school board shall use the balance of the school district's portion of the
9positive tax increment of the tax incremental district to reduce the levy that
10otherwise would be imposed.
AB576,3,13 11(4) (a) Money in the capital improvement fund may not be used for any purpose
12or be transferred to any other fund without the approval of a majority of the electors
13of the school district voting on the question at a referendum.
AB576,3,1514 (b) The school board may not deposit into the capital improvement fund any
15amount other than the percentage specified under sub. (2).
AB576,3,18 16(5) The school board shall submit a report by January 1 of each odd-numbered
17year to the governor and the joint committee on finance describing the use of the
18moneys deposited into the fund under sub. (1) and the effects of that use.
AB576, s. 2 19Section 2. 121.07 (6) (a) (intro.) of the statutes, as affected by 1999 Wisconsin
20Act 9
, is amended to read:
AB576,4,521 121.07 (6) (a) (intro.) "Shared cost" is the sum of the net cost of the general fund
22and the net cost of the debt service fund, except that "shared cost" excludes any costs,
23including attorney fees, incurred by a school district as a result of its participation
24in a lawsuit commenced against the state, beginning with such costs incurred in the
25fiscal year in which the lawsuit is commenced, excludes any expenditures from a

1capital improvement fund created under s. 120.135
and excludes the costs of
2transporting those transfer pupils for whom the school district operating under ch.
3119 does not receive intradistrict transfer aid under s. 121.85 (6) as a result of s.
4121.85 (6) (am). In this paragraph, "net cost of the debt service fund" includes all of
5the following amounts:
AB576, s. 3 6Section 3. 121.15 (3m) (a) 1. of the statutes, as affected by 1999 Wisconsin Act
79
, is amended to read:
AB576,4,158 121.15 (3m) (a) 1. "Partial school revenues" means the sum of state school aids,
9other than the amounts appropriated under s. 20.255 (2) (bi) and (cv), property taxes
10levied for school districts and aid paid to school districts under s. 79.095 (4), less the
11amount of any revenue limit increase under s. 121.91 (4) (a) 2. due to a school board's
12increasing the services that it provides by adding responsibility for providing a
13service transferred to it from another school board and , less the amount of any
14revenue limit increase under s. 121.91 (4) (a) 3. and less the amount of any revenue
15limit increase under s. 121.91 (4) (h)
.
AB576, s. 4 16Section 4. 121.91 (4) (h) of the statutes is created to read:
AB576,4,1917 121.91 (4) (h) The limit otherwise applicable to a school district under sub. (2m)
18in any school year is increased by an amount equal to the amount deposited into the
19capital improvement fund under s. 120.135 (2) in that school year.
AB576,4,2020 (End)
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