LRB-2033/1
MES:jld:rs
2015 - 2016 LEGISLATURE
March 27, 2015 - Introduced by Joint Legislative Council. Referred to Committee
on Ways and Means.
AB135,1,6 1An Act to repeal 66.1105 (4) (k) and 66.1105 (5) (bm); to renumber and amend
266.1105 (5) (c) and 66.1105 (5) (ce); to amend 66.1105 (4) (gm) 1. and 66.1105
3(5) (b); and to create 66.1105 (5) (c) 2. and 66.1105 (5) (ce) 2. of the statutes;
4relating to: inclusion of vacant land within the boundaries of a tax incremental
5district and exclusion of tax-exempt city-owned property from the initial tax
6incremental base of a tax incremental district.
Analysis by the Legislative Reference Bureau
This bill is explained in the Notes provided by the Joint Legislative Council in
the bill.
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:
Joint Legislative Council prefatory note: This bill was prepared for the Joint
Legislative Council's Study Committee on Review of Tax Incremental Financing.
Background

With certain exceptions, current law specifies that property standing vacant for an
entire seven-year period immediately preceding adoption of the resolution creating a tax
incremental district (TID) may not comprise more than 25 percent of the area in the TID.
With regard to the exceptions to this restriction, current law specifies that the restriction
does not apply to property in a TID if the district is suitable for either industrial sites or
mixed use development and the local legislative body implements an approved project
plan to promote industrial development or mixed-use development. Current law defines
"vacant property" to include property where the fair market value or replacement cost
value of structural improvements on the parcel is less than the fair market value of the
land, and excludes property relating to the Park East and Park West freeway corridors
in Milwaukee County, and also excludes property that is contaminated by environmental
pollution.
Additionally, under current law, the Department of Revenue must certify the
initial tax incremental base of a TID. Generally, this value is calculated as the aggregate
value of all taxable property in the TID, plus the value of all tax-exempt city-owned
property, except real property owned by a city and used for police and fire buildings,
administrative buildings, libraries, community and recreational buildings, parks, streets
and improvements within any street right-of-way, parking facilities, and utilities.
The Bill
This bill removes the restriction that property standing vacant may not comprise
more than 25 percent of the area in a TID for TIDs created after the effective date of the
bill.
Additionally, for a TID created on or after the effective date of the bill, the bill
revises the calculation of the initial tax incremental base of the district to exclude all
tax-exempt city-owned property.
AB135,1 1Section 1. 66.1105 (4) (gm) 1. of the statutes is amended to read:
AB135,3,242 66.1105 (4) (gm) 1. Describes the boundaries, which may, but need not, be the
3same as those recommended by the planning commission, of a tax incremental
4district with sufficient definiteness to identify with ordinary and reasonable
5certainty the territory included in the district. The boundaries of the tax incremental
6district may not include any annexed territory that was not within the boundaries
7of the city on January 1, 2004, unless at least 3 years have elapsed since the territory
8was annexed by the city, unless the city enters into a cooperative plan boundary
9agreement, under s. 66.0301 (6) or 66.0307, with the town from which the territory
10was annexed, or unless the city and town enter into another kind of agreement
11relating to the annexation except that, notwithstanding these conditions, the city
12may include territory that was not within the boundaries of the city on January 1,

12004, if the city pledges to pay the town an amount equal to the property taxes levied
2on the territory by the town at the time of the annexation for each of the next 5 years.
3If, as the result of a pledge by the city to pay the town an amount equal to the property
4taxes levied on the territory by the town at the time of the annexation for each of the
5next 5 years, the city includes territory in a tax incremental district that was not
6within the boundaries of the city on January 1, 2004, the city's pledge is enforceable
7by the town from which the territory was annexed. The boundaries shall include only
8those whole units of property as are assessed for general property tax purposes.
9Property For a tax incremental district created before the effective date of this
10subdivision .... [LRB inserts date], property
standing vacant for an entire 7-year
11period immediately preceding adoption of the resolution creating a tax incremental
12district may not comprise more than 25 percent of the area in the tax incremental
13district, unless the tax incremental district is suitable under subd. 4. a. for either
14industrial sites or mixed use development and the local legislative body implements
15an approved project plan to promote industrial development within the meaning of
16s. 66.1101 if the district has been designated as suitable for industrial sites, or
17mixed-use development if the district has been designated as suitable for mixed-use
18development. In this subdivision, "vacant property" includes property where the fair
19market value or replacement cost value of structural improvements on the parcel is
20less than the fair market value of the land. In this subdivision, "vacant property"
21does not include property acquired by the local legislative body under ch. 32, property
22included within the abandoned Park East freeway corridor or the abandoned Park
23West freeway corridor in Milwaukee County, or property that is contaminated by
24environmental pollution, as defined in s. 66.1106 (1) (d).

Note: This Section removes the restriction that property standing vacant may not
comprise more than 25 percent of the area in a TID for TIDs created after the date on
which the bill takes effect.
AB135,2 1Section 2 . 66.1105 (4) (k) of the statutes is repealed.
AB135,3 2Section 3. 66.1105 (5) (b) of the statutes is amended to read:
AB135,4,173 66.1105 (5) (b) Upon application in writing by the city clerk, in a form
4prescribed by the department of revenue, the department shall determine according
5to its best judgment from all sources available to it the full aggregate value of the
6taxable property and, except as provided in par. (bm), of the city-owned property in
7the tax incremental district. The application shall state the percentage of territory
8within the tax incremental district which the local legislative body estimates will be
9devoted to retail business at the end of the maximum expenditure period specified
10in sub. (6) (am) 1. if that estimate is at least 35%. Subject to sub. (8) (d), the
11department shall certify this aggregate valuation to the city clerk, and the aggregate
12valuation constitutes the tax incremental base of the tax incremental district. The
13city clerk shall complete these forms, including forms for the amendment of a project
14plan, and submit the completed application or amendment forms on or before
15October 31 of the year the tax incremental district is created, as defined in sub. (4)
16(gm) 2. or, in the case of an amendment, on or before October 31 of the year in which
17the changes to the project plan take effect.
AB135,4 18Section 4. 66.1105 (5) (bm) of the statutes is repealed.
AB135,5 19Section 5. 66.1105 (5) (c) of the statutes is renumbered 66.1105 (5) (c) 1. and
20amended to read:
AB135,5,1921 66.1105 (5) (c) 1. If For a tax incremental district created before the effective
22date of this subdivision .... [LRB inserts date], if
the city adopts an amendment to the
23original project plan for any district which subtracts territory from the district or

1which includes additional project costs at least part of which will be incurred after
2the period specified in sub. (6) (am) 1., the tax incremental base for the district shall
3be redetermined, if sub. (4) (h) 2., 4., or 5. applies to the amended project plan, either
4by subtracting from the tax incremental base the value of the taxable property and
5the value of real property owned by the city, other than property described under par.
6s. 66.1105 (5) (bm), 2013 stats. that is subtracted from the existing district or by
7adding to the tax incremental base the value of the taxable property and the value
8of real property owned by the city, other than property described in par. s. 66.1105
9(5)
(bm), 2013 stats., that is added to the existing district under sub. (4) (h) 2., 4., or
105. or, if sub. (4) (h) 2., 4., or 5. does not apply to the amended project plan, under par.
11s. 66.1105 (b), 2013 stats., as of the January 1 next preceding the effective date of the
12amendment if the amendment becomes effective between January 2 and
13September 30, as of the next subsequent January 1 if the amendment becomes
14effective between October 1 and December 31 and if the effective date of the
15amendment is January 1 of any year, the redetermination shall be made on that date.
16With regard to a district to which territory has been added, the tax incremental base
17as redetermined under this paragraph is effective for the purposes of this section only
18if it exceeds the original tax incremental base determined under par. s. 66.1105 (5)
19(b), 2013 stats.
AB135,6 20Section 6. 66.1105 (5) (c) 2. of the statutes is created to read:
AB135,6,1321 66.1105 (5) (c) 2. For a tax incremental district created on or after the effective
22date of this subdivision .... [LRB inserts date], if the city adopts an amendment to the
23original project plan for any district which subtracts territory from the district or
24which includes additional project costs at least part of which will be incurred after
25the period specified in sub. (6) (am) 1., the tax incremental base for the district shall

1be redetermined, if sub. (4) (h) 2. applies to the amended project plan, either by
2subtracting from the tax incremental base the value of the taxable property that is
3subtracted from the existing district or by adding to the tax incremental base the
4value of the taxable property that is added to the existing district under sub. (4) (h)
52. or, if sub. (4) (h) 2. does not apply to the amended project plan, under par. (b), as
6of the January 1 next preceding the effective date of the amendment if the
7amendment becomes effective between January 2 and September 30, as of the next
8subsequent January 1 if the amendment becomes effective between October 1 and
9December 31 and if the effective date of the amendment is January 1 of any year, the
10redetermination shall be made on that date. With regard to a district to which
11territory has been added, the tax incremental base as redetermined under this
12paragraph is effective for the purposes of this section only if it exceeds the original
13tax incremental base determined under par. (b).
AB135,7 14Section 7. 66.1105 (5) (ce) of the statutes is renumbered 66.1105 (5) (ce) 1. and
15amended to read:
AB135,7,816 66.1105 (5) (ce) 1. If For a tax incremental district created before the effective
17date of this subdivision .... [LRB inserts date], if
the city adopts an amendment, to
18which sub. (4) (h) 2., 4., or 5. applies, the tax incremental base for the district shall
19be redetermined, either by subtracting from the tax incremental base the value of the
20taxable property and the value of real property owned by the city, other than property
21described under par. s. 66.1105 (5) (bm), 2013, stats., that is subtracted from the
22existing district or by adding to the tax incremental base the value of the taxable
23property and the value of real property owned by the city, other than property
24described in par. s. 66.1105 (5) (bm), 2013, stats., that is added to the existing district
25under sub. (4) (h) 2., 4., or 5., as of the January 1 next preceding the effective date

1of the amendment if the amendment becomes effective between January 2 and
2September 30, as of the next subsequent January 1 if the amendment becomes
3effective between October 1 and December 31 and if the effective date of the
4amendment is January 1 of any year, the redetermination shall be made on that date.
5With regard to a district to which territory has been added, the tax incremental base
6as redetermined under this paragraph is effective for the purposes of this section only
7if it exceeds the original tax incremental base determined under par. s. 66.1105 (5)
8(b), 2013 stats.
AB135,8 9Section 8 . 66.1105 (5) (ce) 2. of the statutes is created to read:
AB135,7,2310 66.1105 (5) (ce) 2. For a tax incremental district created on or after the effective
11date of this subdivision .... [LRB inserts date], if the city adopts an amendment, to
12which sub. (4) (h) 2. applies, the tax incremental base for the district shall be
13redetermined, either by subtracting from the tax incremental base the value of the
14taxable property that is subtracted from the existing district or by adding to the tax
15incremental base the value of the taxable property that is added to the existing
16district under sub. (4) (h) 2. as of the January 1 next preceding the effective date of
17the amendment if the amendment becomes effective between January 2 and
18September 30, as of the next subsequent January 1 if the amendment becomes
19effective between October 1 and December 31 and if the effective date of the
20amendment is January 1 of any year, the redetermination shall be made on that date.
21With regard to a district to which territory has been added, the tax incremental base
22as redetermined under this paragraph is effective for the purposes of this section only
23if it exceeds the original tax incremental base determined under par. (b).

Note: Sections 2 to 8 revise the calculation of the initial tax incremental base of
a tax incremental district to exclude all tax-exempt city-owned property for districts
created after the date on which the bill takes effect.
AB135,8,11 (End)
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