LRB-1076/1
MES:cmh:cph
2003 - 2004 LEGISLATURE
May 8, 2003 - Introduced by Representatives Wieckert, Weber, Hines, Schooff,
Ladwig, Balow, Jeskewitz, F. Lasee, Krawczyk, Bies, Ott and Shilling,
cosponsored by Senators Cowles, Schultz, Roessler and Leibham. Referred
to Committee on Ways and Means.
AB319,1,3
1An Act to renumber and amend 66.1105 (6) (am) 1.; and
to create 66.1105 (6)
2(am) 1. c. of the statutes;
relating to: increasing the expenditure period for
3certain tax incremental financing districts.
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. 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, and
adoption of a resolution by the common council or village board that creates the
district as of a date provided in the resolution. Another step that must be taken
before a TID may be created is the creation by the city or village of a joint review
board to review the proposal. The joint review board, which is made up of
representatives of the overlying taxing jurisdictions of the proposed TID, must
approve the project plan within specified time frames or the TID may not be created.
If an existing TID project plan is amended by a planning commission, all of these
steps are also required.
Once these steps are accomplished, the city or village clerk is required to
complete certain forms and an application and submit the documents to the
Department of Revenue (DOR) on or before December 31 of the year in which the TID
is created. Upon receipt of the application, DOR is required to certify the full
aggregate value of the taxable property in the city or village, which constitutes the
tax incremental base of the TID.
Also under current law, once a TID has been created, 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 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 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. Under the exception, which is
limited to certain circumstances, after a TID pays off its project costs, but not later
the date on which it must otherwise terminate, the planning commission may
allocate positive tax increments generated by the TID (the "donor" TID) to another
TID that has been created by the planning commission.
Under this bill, for a TID that is created on or after the effective date of the bill,
the bill increases from seven years to ten years the period during which expenditures
related to the TID may be made by the city or village after the TID's creation.
Currently, the ten year period applies only to TIDs created before October 1, 1995,
and the seven year period applies only to TIDs created after September 30, 1995. The
bill first applies to TIDs that are created on October 1, 2004, and the bill takes effect
on October 1, 2004.
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:
AB319, s. 1
1Section
1. 66.1105 (6) (am) 1. of the statutes is renumbered 66.1105 (6) (am)
21. a. and amended to read:
AB319,3,23
66.1105
(6) (am) 1. a. For a tax incremental district that is created after
4September 30, 1995,
and before the effective date of this subd. 1. a. .... [revisor inserts
1date], no expenditure may be made later than 7 years after the tax incremental
2district is created
, and for.
AB319,3,7
3b. For a tax incremental district that is created before October 1, 1995, no
4expenditure may be made later than 10 years after the tax incremental district is
5created, except that, for a tax incremental district that is created before October 1,
61995, and which receives tax increments under par. (d), no expenditure may be made
7later than 12 years after the tax incremental district is created.
AB319, s. 2
8Section
2. 66.1105 (6) (am) 1. c. of the statutes is created to read:
AB319,3,119
66.1105
(6) (am) 1. c. For a tax incremental district that is created on or after
10the effective date of this subd. 1. c. .... [revisor inserts date], all expenditures shall
11be completed no later than 10 years after the tax incremental district is created.
AB319,3,1413
(1) This act first applies to a tax incremental district that is created on October
141, 2004.
AB319,3,1616
(1)
This act takes effect on October 1, 2004.
