AB999: Bill Text

Environmental remediation tax incremental financing

This bill modifies the environmental remediation tax incremental financing program. Under current law, the environmental remediation tax incremental financing program permits a city, village, town, or county (political subdivision) to defray the costs of remediating contaminated property that is owned by the political subdivision. The mechanism for financing costs that are eligible for remediation is very similar to the mechanism under the tax incremental financing (TIF) program. If the remediated property is transferred to another person and is then subject to property taxation, environmental remediation tax incremental financing may be used to allocate some of the property taxes that are levied on the property to the political subdivision to pay for the costs of remediation.

A political subdivision that has incurred "eligible costs" to remediate environmental pollution on a parcel of property may apply to the Department of Revenue (DOR) to certify the "environmental remediation tax incremental base" of the parcel. DOR is required to certify the environmental remediation tax incremental base if the political subdivision submits to DOR all of the following: 1) a statement that the political subdivision has incurred some eligible costs, together with a detailed proposed remedial action plan approved by DNR that contains cost estimates for anticipated eligible costs, a schedule for the design and implementation that is needed to complete the remediation, and certification from DNR that it has approved the site investigation report that relates to the parcel; 2) a statement that all taxing jurisdictions with authority to levy general property taxes on the parcel of property have been notified that the political subdivision intends to recover its environmental remediation costs by using an "environmental remediation tax increment"; and 3) a statement that the political subdivision has attempted to recover its environmental remediation costs from the person who is responsible for the environmental pollution that is being remediated.

This bill makes technical changes to the environmental remediation tax incremental financing program. These changes include the following:

1. Creating a definition of "environmental remediation tax incremental district" (ERTID) that is somewhat similar to the definition of "tax incremental district" under the TIF program and creating a definition of "project expenditures", which means "eligible costs" and other costs incurred by a political subdivision in creating an operating an ERTID.

2. Making changes to the definitions of "environmental remediation tax increment," "environmental remediation tax incremental base," "period of certification," and "taxable property." The bill increases the period of certification, and an ERTID's maximum life, from 16 to 23 years.

3. Adding to the definition of "eligible costs" the cancellation of unrecovered delinquent property taxes.

4. Creating procedures for the termination of an ERTID that are similar to the termination procedures for a tax incremental district under the TIF program.

5. Prohibiting DOR from certifying the environmental remediation tax incremental base of an ERTID if a political subdivision does not send DOR certain required forms within 180 days of the ERTID's termination.

6. Requiring that the final report under the program include an independent certified financial audit.

7. Requiring that DOR be provided with a final accounting of the ERTID's project expenditures and the final amount of eligible costs that have been paid for an ERTID.

8. Modifying certain provisions of the program to apply to contiguous parcels of property or land, as well as a parcel of property or land.

9. Authorizing DOR to charge a $1,000 fee to determine or redetermine the tax incremental base of an ERTID.

Also under the bill, if a city or village annexes property from a town that is using an ERTID to remediate environmental pollution on all or part of the territory that is annexed, the city or village must pay to the town that portion of the eligible costs that are attributable to the annexed territory. The city or village, and the town, must negotiate an agreement on the amount that must be paid.

The ERTID provisions in the bill take effect on October 1, 2006, and first apply to an ERTID that is in existence or that is created on that date.

Local governmental exemption from solid waste management standards

Current law generally requires a person who possesses or controls a hazardous substance that is discharged or who causes the discharge of a hazardous substance to restore the environment to the extent practicable and to minimize the harmful effects of the discharge on the environment. Current law generally exempts a local governmental unit from these clean-up requirements with respect to hazardous substance discharges on property acquired in specified ways, such as through tax delinquency proceedings and condemnation.

This bill provides that a local governmental unit is exempt from solid waste management standards and other legal requirements relating to solid waste for a property that was acquired in a way that would qualify for the exemption from clean-up requirements, with a number of exceptions and conditions. The exemption from solid waste requirements does not apply to a solid waste facility that was operated by the local governmental unit or owned by the local governmental unit while it was operated or to landfills that were once licensed by DNR. The bill requires a local governmental unit to obtain permission from DNR for any construction on the property and requires the local governmental unit to maintain any health or safety system on the property, such as a system to collect landfill gas, that DNR required before the local governmental unit acquired the property.

Voluntary party liability exemption

Under current law, a person, called a voluntary party, who applies for a liability exemption is exempt from absolute requirements to restore the environment and minimize the harmful effects of a discharge, and from the requirements of other laws relating to hazardous substances, if an environmental investigation of the property is conducted, the property is cleaned up, DNR certifies that the cleanup restored the environment and minimized the harmful effects of the discharge, and the voluntary party maintains and monitors the property as required by DNR. Also, under current law, the voluntary party liability exemption is available even if the cleanup does not get rid of a substance in groundwater as long as DNR determines that the substance will naturally break down (attenuate) and, if required by DNR, the voluntary party obtains insurance to cover the costs of cleanup in case natural attenuation fails.

Under current law, the voluntary party liability exemption is not available for most sites at which solid waste was disposed of. This bill narrows that exemption so that only solid waste facilities that were once licensed by DNR are excluded from the exemption.

In addition this bill provides that, to qualify for the liability exemption for property on which DNR determines that natural attenuation will successfully complete the cleanup, a voluntary party who owns the property must provide access to the property for the purpose of determining whether natural attenuation has failed and, if so, to allow someone else to clean up the property.

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:

AB999, s. 1 Section 1. 66.1106 (1) (c) of the statutes is amended to read:

AB999,6,11 66.1106 (1) (c) "Eligible costs" means capital costs, financing costs, and administrative and professional service costs, incurred or estimated to be incurred by a political subdivision, for the investigation, removal, containment , or monitoring of, or the restoration of soil, air, surface water, sediments, or groundwater affected by, environmental pollution, including monitoring costs incurred within 2 years after the date on which the department of natural resources certifies that environmental pollution on the property has been remediated, cancellation of delinquent taxes if the political subdivision demonstrates that it has not already recovered such costs by any other means, property acquisition costs, demolition costs including asbestos removal, and removing and disposing of underground storage tanks or abandoned containers, as defined in s. 292.41 (1), except that for. For any parcel of land "eligible costs" shall be reduced by any amounts received from persons responsible for the discharge, as defined in s. 292.01 (3), of a hazardous substance on the property to pay for the costs of remediating environmental pollution on the property, by any amounts received, or reasonably expected by the political subdivision to be received, from a local, state, or federal program for the remediation of contamination in the district that do not require reimbursement or repayment, and by the amount of net gain from the sale of the property by the political subdivision. "Eligible costs" associated with groundwater affected by environmental pollution include investigation and remediation costs for groundwater that is located in, and extends beyond, the property that is being remediated.

AB999, s. 2 Section 2. 66.1106 (1) (e) of the statutes is amended to read:

AB999,6,21 66.1106 (1) (e) "Environmental remediation tax increment" means that amount obtained by multiplying the total city, county, school, and other local general property taxes levied on a parcel of real property that is certified under this section taxable property in a year by a fraction having as a numerator the environmental remediation value increment for that year for that parcel in such district and as a denominator that year's equalized value of that parcel taxable property. In any year, an environmental remediation tax increment is "positive" if the environmental remediation value increment is positive; it is "negative" if the environmental remediation value increment is negative.

AB999, s. 3 Section 3. 66.1106 (1) (f) of the statutes is amended to read:

AB999,7,4 66.1106 (1) (f) "Environmental remediation tax incremental base" means the aggregate value, as equalized by the department, of a parcel of real taxable property that is certified under this section as of the January 1 preceding the date on which the department of natural resources issues a certificate certifying that environmental pollution on the property has been remediated in accordance with rules promulgated by the department of natural resources environmental remediation tax incremental district is created, as determined under sub. (1m) (b).

AB999, s. 4 Section 4. 66.1106 (1) (fm) of the statutes is created to read:

AB999,7,16 66.1106 (1) (fm) "Environmental remediation tax incremental district" means a contiguous geographic area within a political subdivision defined and created by resolution of the governing body of the political subdivision 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 an environmental remediation 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 environmental remediation tax incremental district. "Environmental remediation tax incremental district" does not include any area identified as a wetland on a map under s. 23.32.

AB999, s. 5 Section 5. 66.1106 (1) (g) of the statutes is amended to read:

AB999,7,24 66.1106 (1) (g) "Environmental remediation value increment" means the equalized value of a parcel of real taxable property that is certified under this section minus the environmental remediation tax incremental base. In any year, the environmental remediation value increment is "positive" if the environmental remediation tax incremental base of the parcel of taxable property is less than the aggregate value of the parcel of taxable property as equalized by the department; it is "negative" if that base exceeds that aggregate value.

AB999, s. 6 Section 6. 66.1106 (1) (i) of the statutes is amended to read:

AB999,8,4 66.1106 (1) (i) "Period of certification" means a period of not more than 16 23 years beginning after the department certifies the environmental remediation tax incremental base of a parcel of property under sub. (4) or a period before all eligible costs have been paid, whichever occurs first.

AB999, s. 7 Section 7. 66.1106 (1) (je) of the statutes is created to read:

AB999,8,8 66.1106 (1) (je) "Project expenditures" means eligible costs and other costs incurred by a political subdivision to create and operate an environmental remediation tax incremental district.

AB999, s. 8 Section 8. 66.1106 (1) (k) of the statutes is amended to read:

AB999,8,11 66.1106 (1) (k) "Taxable property" means all real and personal taxable property located in an environmental remediation tax incremental district.

AB999, s. 9 Section 9. 66.1106 (1m) of the statutes is created to read:

AB999,8,15 66.1106 (1m) Creation of environmental remediation tax incremental districts. In order to implement the provisions of this section, the governing body of the political subdivision shall adopt a resolution which does all of the following:

AB999,8,18 (a) Describes the boundaries of an environmental remediation tax incremental district with sufficient definiteness to identify with ordinary and reasonable certainty the territory included within the district.

AB999,8,21 (b) 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.

AB999, s. 10 Section 10. 66.1106 (2) (a) of the statutes is amended to read:

AB999,9,9 66.1106 (2) (a) A political subdivision that develops, and whose governing body approves, a written proposal to remediate environmental pollution may use an environmental remediation tax increment to pay the eligible costs of remediating environmental pollution on contiguous parcels of property that are located in an environmental remediation tax incremental district within the political subdivision and that are not part of a tax incremental district created under s. 66.1105, as provided in this section, except that a political subdivision may use an environmental remediation tax increment to pay the cost of remediating environmental pollution of groundwater without regard to whether the property above the groundwater is owned by the political subdivision. No political subdivision may submit an application to the department under sub. (4) until the joint review board approves the political subdivision's written proposal under sub. (3).

AB999, s. 11 Section 11. 66.1106 (4) (intro.) of the statutes is amended to read:

AB999,9,20 66.1106 (4) Certification. (intro.) Upon written application to the department of revenue by the clerk of a political subdivision on or before April 1 of the year following the year in which the certification described in par. (a) is received from the department of natural resources December 31 of the same calendar year for an environmental remediation tax incremental district created before October, as determined under sub. (1m) (b), or December 31 of the subsequent calendar year for an environmental remediation tax incremental district created after September 30, the department of revenue shall certify to the clerk of the political subdivision the environmental remediation tax incremental base of a parcel of real property if all of the following apply:

AB999, s. 12 Section 12. 66.1106 (4) (b) of the statutes is amended to read:

AB999,9,24 66.1106 (4) (b) The political subdivision submits a statement that all taxing jurisdictions with the authority to levy general property taxes on the parcel or contiguous parcels of property have been notified that the political subdivision intends to recover the costs of remediating environmental pollution on the property and have been provided a statement of the estimated costs to be recovered.

AB999, s. 13 Section 13. 66.1106 (7) (a) of the statutes is amended to read:

AB999,10,9 66.1106 (7) (a) Subject to pars. (b), (c) and (d), the department shall annually authorize the positive environmental remediation tax increment with respect to a parcel or contiguous parcels of property during the period of certification to the political subdivision that incurred the costs to remediate environmental pollution on the property, except that an authorization granted under this paragraph does not apply after the department receives the notice described under sub. (10) (b).

AB999, s. 14 Section 14. 66.1106 (7) (d) 1. of the statutes is amended to read:

AB999,10,17 66.1106 (7) (d) 1. The department may not authorize a positive environmental remediation tax increment under par. (a) to pay otherwise eligible costs that are incurred by the political subdivision after the department of natural resources certifies to the department of revenue that environmental pollution on the parcel or contiguous parcels of property has been remediated unless the costs are associated with activities, as determined by the department of natural resources, that are necessary to close the site described in the site investigation report.

AB999, s. 15 Section 15. 66.1106 (9) of the statutes is amended to read:

AB999,11,4 66.1106 (9) Separate accounting required. An environmental remediation tax increment received with respect to a parcel or contiguous parcels of land that is subject to this section shall be deposited in a separate fund by the treasurer of the political subdivision. No money may be paid out of the fund except to pay eligible costs for a parcel or contiguous parcels of land, or to reimburse the political subdivision for such costs or to satisfy claims of holders of bonds or notes issued to pay eligible costs. If an environmental remediation tax increment that has been collected with respect to a parcel of land remains in the fund after the period of certification has expired, it shall be paid to the treasurers of the taxing jurisdictions in which the parcel is located in proportion to the relative share of those taxing jurisdictions in the most recent levy of general property taxes on the parcel.

AB999, s. 16 Section 16. 66.1106 (10) (title) of the statutes is amended to read:

AB999,11,6 66.1106 (10) (title) Reporting requirements ; notice of district termination.

AB999, s. 17 Section 17. 66.1106 (10) (a) of the statutes is amended to read:

AB999,11,12 66.1106 (10) (a) Prepare and make available to the public updated annual reports describing the status of all projects to remediate environmental pollution funded under this section, including revenues and expenditures. A copy of the report shall be sent to all taxing jurisdictions with authority to levy general property taxes on the parcel or contiguous parcels of property by May 1 annually.

AB999, s. 18 Section 18. 66.1106 (10) (b) of the statutes is amended to read:

AB999,11,15 66.1106 (10) (b) Notify the department within 10 days after the period of certification for a parcel or contiguous parcels of property has expired.

AB999, s. 19 Section 19. 66.1106 (10) (c) of the statutes is created to read:

AB999,11,25 66.1106 (10) (c) With regard to an environmental remediation tax incremental district, not later than 12 months after the last expenditure is made or not later than 12 months after an expenditure may be made under sub. (2) (b), whichever comes first, prepare and make available to the public a report that is similar to the report required under par. (a), except that the report required under this paragraph shall also include an independent certified audit of the project to determine if all financial transactions were made in a legal manner and to determine if the environmental remediation tax incremental district complied with this section. A copy of the report shall be sent out to all taxing jurisdictions which received the reports under par. (a).

AB999, s. 20 Section 20. 66.1106 (10) (d) of the statutes is created to read:

AB999,12,4 66.1106 (10) (d) Not later than 180 days after an environmental remediation tax incremental district terminates under sub. (11), provide the department with all of the following on a form that is prescribed by the department:

AB999,12,6 1. A final accounting of project expenditures that are made for the environmental remediation tax incremental district.

AB999,12,8 2. The final amount of eligible costs that have been paid for the environmental remediation tax incremental district.

AB999,12,10 3. The total amount of environmental remediation tax increments that have been paid to the political subdivision.

AB999, s. 21 Section 21. 66.1106 (10) (e) of the statutes is created to read:

AB999,12,15 66.1106 (10) (e) If a political subdivision does not send to the department of revenue the form specified in par. (d) within the time limit specified in par. (d), the department may not certify the environmental remediation tax incremental base of a district under sub. (4) until the form is sent to the department.

AB999, s. 22 Section 22. 66.1106 (11) of the statutes is created to read:

AB999,12,19 66.1106 (11) Termination of environmental remediation tax incremental districts. An environmental remediation tax incremental district terminates when the earliest of the following occurs:

AB999,12,22 (a) The political subdivision has received aggregate environmental remediation tax increments with respect to the district in an amount equal to the aggregate of all eligible costs.

AB999,12,25 (b) Twenty-three years after the department certifies the environmental remediation tax incremental base of a parcel or contiguous parcels of property under sub. (4).

AB999,13,4 (c) The political subdivision's legislative body, by resolution, dissolves the district. Upon dissolving the district, the political subdivision becomes liable for all unpaid eligible costs actually incurred which are not paid from the separate fund under sub. (9).

AB999, s. 23 Section 23. 66.1106 (12) of the statutes is created to read:

AB999,13,9 66.1106 (12) (a) Notice of district termination. A political subdivision that creates an environmental remediation tax incremental district under this section shall give the department written notice within 10 days of the termination of the environmental remediation tax incremental district under sub. (11).

AB999,13,13 (b) If the department receives a notice under par. (a) during the period from January 1 to May 15, the effective date of the notice is the date the notice is received. If the notice is received during the period from May 16 to December 31, the effective date of the notice is the first January 1 after the department receives the notice.

AB999, s. 24 Section 24. 66.1106 (13) (title) of the statutes is amended to read:

AB999,13,16 66.1106 (13) (title) Payment of eligible costs for annexed territory, redetermination of tax incremental base; fees.

AB999, s. 25 Section 25. 66.1106 (13) of the statutes is renumbered 66.1106 (13) (a) and amended to read:

AB999,14,2 66.1106 (13) (a) If a city or village annexes territory from a town and if the town is using an environmental remediation tax increment to remediate environmental pollution on all or part of the territory that is annexed, the city or village shall pay to the town that portion of the eligible costs that are attributable to the annexed territory. The city or village, and the town, shall negotiate an agreement on the amount that must be paid under this subsection. The department shall redetermine the environmental remediation tax incremental base of any parcel of real property for which the environmental remediation tax incremental base was determined under sub. (4) if part of that parcel is annexed under this subsection.

AB999, s. 26 Section 26. 66.1106 (13) (b) of the statutes is created to read:

AB999,14,7 66.1106 (13) (b) The department may impose a fee of $1,000 on a political subdivision to determine or redetermine the environmental remediation tax incremental base of an environmental remediation tax incremental district under this subsection or sub. (4).

AB999, s. 27 Section 27. 74.23 (1) (b) of the statutes is amended to read:

AB999,14,18 74.23 (1) (b) General property taxes. After making the distribution under par. (a), the taxation district treasurer shall pay to each taxing jurisdiction within the district its proportionate share of general property taxes, except that the treasurer shall pay the state's proportionate share to the county. As part of that distribution, the taxation district treasurer shall retain for the taxation district and for each tax incremental district within the taxation district and each environmental remediation tax incremental district created by the taxation district its proportionate share of general property taxes. The taxation district treasurer shall also distribute to the county the proportionate share of general property taxes for each environmental remediation tax incremental district created by the county.