66.1103 Annotation
The financing of corporate expansion through industrial revenue bonds. Mulcahy, Guszkowski, 57 MLR 201.
66.1105(1)(1)
Short title. This section shall be known and may be cited as the "Tax Increment Law".
66.1105(2)
(2) Definitions. In this section, unless a different intent clearly appears from the context:
66.1105(2)(a)1.a.
a. An area, including a slum area, in which the structures, buildings or improvements, which by reason of dilapidation, deterioration, age or obsolescence, inadequate provision for ventilation, light, air, sanitation, or open spaces, high density of population and overcrowding, or the existence of conditions which endanger life or property by fire and other causes, or any combination of these factors is conducive to ill health, transmission of disease, infant mortality, juvenile delinquency, or crime, and is detrimental to the public health, safety, morals or welfare.
66.1105(2)(a)1.b.
b. An area which is predominantly open and which consists primarily of an abandoned highway corridor, as defined in
s. 66.1333 (2m) (a), or that consists of land upon which buildings or structures have been demolished and which because of obsolete platting, diversity of ownership, deterioration of structures or of site improvements, or otherwise, substantially impairs or arrests the sound growth of the community.
66.1105(2)(a)2.
2. "Blighted area" does not include predominantly open land area that has been developed only for agricultural purposes.
66.1105(2)(c)
(c) "Local legislative body" means the common council.
66.1105(2)(cm)
(cm) "Mixed-use development" means development that contains a combination of industrial, commercial, or residential uses, except that lands proposed for newly platted residential use, as shown in the project plan, may not exceed 35 percent, by area, of the real property within the district.
66.1105(2)(e)
(e) "Planning commission" means a plan commission created under
s. 62.23, a board of public land commissioners if the city has no plan commission, or a city plan committee of the local legislative body, if the city has neither a commission nor a board.
66.1105(2)(f)1.1. "Project costs" mean any expenditures made or estimated to be made or monetary obligations incurred or estimated to be incurred by the city which are listed in a project plan as costs of public works or improvements within a tax incremental district or, to the extent provided in
subds. 1. k.,
1. m., and
1. n., without the district, plus any incidental costs, diminished by any income, special assessments, or other revenues, including user fees or charges, other than tax increments, received or reasonably expected to be received by the city in connection with the implementation of the plan. For any tax incremental district for which a project plan is approved on or after July 31, 1981, only a proportionate share of the costs permitted under this subdivision may be included as project costs to the extent that they benefit the tax incremental district. To the extent the costs benefit the municipality outside the tax incremental district, a proportionate share of the cost is not a project cost. "Project costs" include:
66.1105(2)(f)1.a.
a. Capital costs including, but not limited to, the actual costs of the construction of public works or improvements, new buildings, structures, and fixtures; the demolition, alteration, remodeling, repair or reconstruction of existing buildings, structures and fixtures other than the demolition of listed properties as defined in
s. 44.31 (4); the acquisition of equipment to service the district; the removal or containment of, or the restoration of soil or groundwater affected by, environmental pollution; and the clearing and grading of land.
66.1105(2)(f)1.b.
b. Financing costs, including, but not limited to, all interest paid to holders of evidences of indebtedness issued to pay for project costs and any premium paid over the principal amount of the obligations because of the redemption of the obligations prior to maturity.
66.1105(2)(f)1.c.
c. Real property assembly costs, meaning any deficit incurred resulting from the sale or lease as lessor by the city of real or personal property within a tax incremental district for consideration which is less than its cost to the city.
66.1105(2)(f)1.d.
d. Professional service costs, including, but not limited to, those costs incurred for architectural, planning, engineering, and legal advice and services.
66.1105(2)(f)1.e.
e. Imputed administrative costs, including, but not limited to, reasonable charges for the time spent by city employees in connection with the implementation of a project plan.
66.1105(2)(f)1.f.
f. Relocation costs, including, but not limited to, those relocation payments made following condemnation under
ss. 32.19 and
32.195.
66.1105(2)(f)1.g.
g. Organizational costs, including, but not limited to, the costs of conducting environmental impact and other studies and the costs of informing the public with respect to the creation of tax incremental districts and the implementation of project plans.
66.1105(2)(f)1.i.
i. Payments made, in the discretion of the local legislative body, which are found to be necessary or convenient to the creation of tax incremental districts or the implementation of project plans, including payments made to a town that relate to property taxes levied on territory to be included in a tax incremental district as described in
sub. (4) (gm) 1.
66.1105(2)(f)1.j.
j. That portion of costs related to the construction or alteration of sewerage treatment plants, water treatment plants or other environmental protection devices, storm or sanitary sewer lines, water lines, or amenities on streets or the rebuilding or expansion of streets the construction, alteration, rebuilding or expansion of which is necessitated by the project plan for a district and is within the district.
66.1105(2)(f)1.k.
k. That portion of costs related to the construction or alteration of sewerage treatment plants, water treatment plants or other environmental protection devices, storm or sanitary sewer lines, water lines, or amenities on streets outside the district if the construction, alteration, rebuilding or expansion is necessitated by the project plan for a district, and if at the time the construction, alteration, rebuilding or expansion begins there are improvements of the kinds named in this subdivision on the land outside the district in respect to which the costs are to be incurred.
66.1105(2)(f)1.L.
L. Costs for the removal, or containment, of lead contamination in buildings or infrastructure if the city declares that such lead contamination is a public health concern.
66.1105(2)(f)1.m.
m. With regard to a tax incremental district that is located in a city to which
sub. (6) (d) applies and about which a finding has been made that not less than 50 percent, by area, of the real property within the district is a blighted area, project costs incurred for territory that is located within a one-half mile radius of the district's boundaries.
66.1105(2)(f)1.n.
n. With regard to a tax incremental district that is located anywhere other than a city to which
sub. (6) (d) applies, and subject to
sub. (4m) (d), project costs incurred for territory that is located within a one-half mile radius of the district's boundaries and within the city that created the district.
66.1105(2)(f)2.
2. Notwithstanding
subd. 1., none of the following may be included as project costs for any tax incremental district for which a project plan is approved on or after July 31, 1981:
66.1105(2)(f)2.a.
a. The cost of constructing or expanding administrative buildings, police and fire buildings, libraries, community and recreational buildings and school buildings, unless the administrative buildings, police and fire buildings, libraries and community and recreational buildings were damaged or destroyed before January 1, 1997, by a natural disaster.
66.1105(2)(f)2.b.
b. The cost of constructing or expanding any facility, if the city generally finances similar facilities only with utility user fees.
66.1105(2)(f)2.c.
c. General government operating expenses, unrelated to the planning or development of a tax incremental district.
66.1105(2)(f)2.d.
d. Cash grants made by the city to owners, lessees, or developers of land that is located within the tax incremental district unless the grant recipient has signed a development agreement with the city, a copy of which shall be sent to the appropriate joint review board or, if that joint review board has been dissolved, retained by the city in the official records for that tax incremental district.
66.1105(2)(f)3.
3. Notwithstanding
subd. 1., project costs may include any expenditures made or estimated to be made or monetary obligations incurred or estimated to be incurred by the city for newly platted residential development only for any tax incremental district for which a project plan is approved before September 30, 1995, or for a mixed-use development tax incremental district to which one of the following applies:
66.1105(2)(f)3.a.
a. The density of the residential housing is at least 3 units per acre.
66.1105(2)(g)
(g) "Project plan" means the properly approved plan for the development or redevelopment of a tax incremental district, including all properly approved amendments thereto.
66.1105(2)(i)
(i) "Tax increment" means that amount obtained by multiplying the total county, city, school and other local general property taxes levied on all taxable property within a tax incremental district in a year by a fraction having as a numerator the value increment for that year in the district and as a denominator that year's equalized value of all taxable property in the district. In any year, a tax increment is "positive" if the value increment is positive; it is "negative" if the value increment is negative.
66.1105(2)(j)
(j) "Tax incremental base" means the aggregate value, as equalized by the department of revenue, of all taxable property located within a tax incremental district on the date as of which the district is created, determined as provided in
sub. (5) (b). The base of districts created before October 1, 1980, does not include the value of property exempted under
s. 70.111 (17).
66.1105(2)(k)
(k) "Tax incremental district" means a contiguous geographic area within a city defined and created by resolution of the local legislative body, 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 a 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 tax incremental district. "Tax incremental district" does not include any area identified as a wetland on a map under
s. 23.32.
66.1105(2)(L)
(L) "Taxable property" means all real and personal taxable property located in a tax incremental district.
66.1105(2)(m)
(m) "Value increment" means the equalized value of all taxable property in a tax incremental district in any year minus the tax incremental base. In any year "value increment" is positive if the tax incremental base is less than the aggregate value of taxable property as equalized by the department of revenue; it is negative if that base exceeds that aggregate value.
66.1105(3)
(3) Powers of cities. In addition to any other powers conferred by law, a city may exercise any powers necessary and convenient to carry out the purposes of this section, including the power to:
66.1105(3)(a)
(a) Create tax incremental districts and define the boundaries of the districts;
66.1105(3)(b)
(b) Cause project plans to be prepared, approve the plans, and implement the provisions and effectuate the purposes of the plans;
66.1105(3)(d)
(d) Deposit moneys into the special fund of any tax incremental district; or
66.1105(3)(e)
(e) Enter into any contracts or agreements, including agreements with bondholders, determined by the local legislative body to be necessary or convenient to implement the provisions and effectuate the purposes of project plans. The contracts or agreements may include conditions, restrictions, or covenants which either run with the land or which otherwise regulate the use of land.
66.1105(3)(f)
(f) Designate, by ordinance or resolution, the local housing authority, the local redevelopmental authority, or both jointly, or the local community development authority, as agent of the city, to perform all acts, except the development of the master plan of the city, which are otherwise performed by the planning commission under this section and
s. 66.1337.
66.1105(3)(g)
(g) Create a standing joint review board that may remain in existence for the entire time that any tax incremental district exists in the city. All of the provisions that apply to a joint review board that is convened under
sub. (4m) (a) apply to a standing joint review board that is created under this paragraph. A city may disband a joint review board that is created under this paragraph at any time.
66.1105(4)
(4) Creation of tax incremental districts and approval of project plans. In order to implement the provisions of this section, the following steps and plans are required:
66.1105(4)(a)
(a) Holding of a public hearing by the planning commission at which interested parties are afforded a reasonable opportunity to express their views on the proposed creation of a tax incremental district and the proposed boundaries of the district. Notice of the hearing shall be published as a class 2 notice, under
ch. 985. Before publication, a copy of the notice shall be sent by first class mail to the chief executive officer or administrator of all local governmental entities having the power to levy taxes on property located within the proposed district and to the school board of any school district which includes property located within the proposed district. For a county with no chief executive officer or administrator, notice shall be sent to the county board chairperson.
66.1105(4)(b)
(b) Designation by the planning commission of the boundaries of a tax incremental district recommended by it and submission of the recommendation to the local legislative body.
66.1105(4)(c)
(c) Identification of the specific property to be included under
par. (gm) 4. as blighted or in need of rehabilitation or conservation work. Owners of the property identified shall be notified of the proposed finding and the date of the hearing to be held under
par. (e) at least 15 days prior to the date of the hearing. In cities with a redevelopment authority under
s. 66.1333, the notification required under this paragraph may be provided with the notice required under
s. 66.1333 (6) (b) 3., if the notice is transmitted at least 15 days prior to the date of the hearing to be held under
par. (e).
66.1105(4)(d)
(d) Preparation and adoption by the planning commission of a proposed project plan for each tax incremental district.
66.1105(4)(e)
(e) At least 14 days before adopting a resolution under
par. (gm), holding of a public hearing by the planning commission at which interested parties are afforded a reasonable opportunity to express their views on the proposed project plan. The hearing may be held in conjunction with the hearing provided for in
par. (a). If the city anticipates that the proposed project plan's project costs may include cash grants made by the city to owners, lessees, or developers of land that is located within the tax incremental district, the hearing notice shall contain a statement to that effect. Notice of the hearing shall be published as a class 2 notice, under
ch. 985. The notice shall include a statement advising that a copy of the proposed project plan will be provided on request. Before publication, a copy of the notice shall be sent by 1st class mail to the chief executive officer or administrator of all local governmental entities having the power to levy taxes on property within the district and to the school board of any school district which includes property located within the proposed district. For a county with no chief executive officer or administrator, notice shall be sent to the county board chairperson.
66.1105(4)(f)
(f) Adoption by the planning commission of a project plan for each tax incremental district and submission of the plan to the local legislative body. The plan shall include a statement listing the kind, number and location of all proposed public works or improvements within the district or, to the extent provided in
sub. (2) (f) 1. k. and
1. n., outside the district, an economic feasibility study, a detailed list of estimated project costs, and a description of the methods of financing all estimated project costs and the time when the related costs or monetary obligations are to be incurred. The plan shall also include a map showing existing uses and conditions of real property in the district; a map showing proposed improvements and uses in the district; proposed changes of zoning ordinances, master plan, if any, map, building codes and city ordinances; a list of estimated nonproject costs; and a statement of the proposed method for the relocation of any persons to be displaced. The plan shall indicate how creation of the tax incremental district promotes the orderly development of the city. The city shall include in the plan an opinion of the city attorney or of an attorney retained by the city advising whether the plan is complete and complies with this section.
66.1105(4)(g)
(g) Approval by the local legislative body of a project plan prior to or concurrent with the adoption of a resolution under
par. (gm). The approval shall be by resolution which contains findings that the plan is feasible and in conformity with the master plan, if any, of the city.
66.1105(4)(gm)
(gm) Adoption by the local legislative body of a resolution which:
66.1105(4)(gm)1.
1. Describes the boundaries, which may, but need not, be the same as those recommended by the planning commission, of a tax incremental district with sufficient definiteness to identify with ordinary and reasonable certainty the territory included in the district. The boundaries of the tax incremental district may not include any annexed territory that was not within the boundaries of the city on January 1, 2004, unless at least 3 years have elapsed since the territory was annexed by the city, unless the city enters into a cooperative plan boundary agreement, under
s. 66.0301 (6) or
66.0307, with the town from which the territory was annexed, or unless the city and town enter into another kind of agreement relating to the annexation except that, notwithstanding these conditions, the city may include territory that was not within the boundaries of the city on January 1, 2004, if the city pledges to pay the town an amount equal to the property taxes levied on the territory by the town at the time of the annexation for each of the next 5 years. If, as the result of a pledge by the city to pay the town an amount equal to the property taxes levied on the territory by the town at the time of the annexation for each of the next 5 years, the city includes territory in a tax incremental district that was not within the boundaries of the city on January 1, 2004, the city's pledge is enforceable by the town from which the territory was annexed. The boundaries shall include only those whole units of property as are assessed for general property tax purposes. Property standing vacant for an entire 7-year period immediately preceding adoption of the resolution creating a tax incremental district may not comprise more than 25 percent of the area in the tax incremental district, unless the tax incremental district is suitable under
subd. 4. a. for either industrial sites or mixed use development and the local legislative body implements an approved project plan to promote industrial development within the meaning of
s. 66.1101 if the district has been designated as suitable for industrial sites, or mixed-use development if the district has been designated as suitable for mixed-use development. In this subdivision, "vacant property" includes 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. In this subdivision, "vacant property" does not include property acquired by the local legislative body under
ch. 32, property included within the abandoned Park East freeway corridor or the abandoned Park West freeway corridor in Milwaukee County, or property that is contaminated by environmental pollution, as defined in
s. 66.1106 (1) (d).
66.1105(4)(gm)2.
2. Creates the district as of a date provided in the resolution. If the resolution is adopted during the period between January 2 and September 30, then the date shall be the next preceding January 1. If the resolution is adopted during the period between October 1 and December 31, then the date shall be the next subsequent January 1. If the resolution is adopted on January 1, the district is created on that January 1.
66.1105(4)(gm)3.
3. Assigns a name to the district for identification purposes. The first district created shall be known as "Tax Incremental District Number One, City of ....". Each subsequently created district shall be assigned the next consecutive number.
66.1105(4)(gm)4.a.
a. Not less than 50%, by area, of the real property within the district is at least one of the following: a blighted area; in need of rehabilitation or conservation work, as defined in
s. 66.1337 (2m) (a); suitable for industrial sites within the meaning of
s. 66.1101 and has been zoned for industrial use; or suitable for mixed-use development; and
66.1105(4)(gm)4.b.
b. The improvement of the area is likely to enhance significantly the value of substantially all of the other real property in the district. It is not necessary to identify the specific parcels meeting the criteria; and
66.1105(4)(gm)4.bm.
bm. The project costs relate directly to eliminating blight, directly serve to rehabilitate or conserve the area or directly serve to promote industrial development, consistent with the purpose for which the tax incremental district is created under
subd. 4. a.; and
66.1105(4)(gm)4.c.
c. Except as provided in
sub. (17), the equalized value of taxable property of the district plus the value increment of all existing districts does not exceed 12 percent of the total equalized value of taxable property within the city. In determining the equalized value of taxable property under this
subd. 4. c., the department of revenue shall base its calculations on the most recent equalized value of taxable property of the district that is reported under
s. 70.57 (1m) before the date on which the resolution under this paragraph is adopted.
66.1105(4)(gm)5.
5. Confirms that any real property within the district that is found suitable for industrial sites and is zoned for industrial use under
subd. 4. a. will remain zoned for industrial use for the life of the tax incremental district.
66.1105(4)(gm)6.
6. Declares that the district is a blighted area district, a rehabilitation or conservation district, an industrial district, or a mixed-use district based on the identification and classification of the property included within the district under
par. (c) and
subd. 4. a. If the district is not exclusively blighted, rehabilitation or conservation, industrial, or mixed use, the declaration under this subdivision shall be based on which classification is predominant with regard to the area described in
subd. 4. a.
66.1105(4)(gs)
(gs) Review by a joint review board, acting under
sub. (4m), that results in its approval of the resolution under
par. (gm).
66.1105(4)(h)1.1. Subject to
subds. 2.,
4.,
5., and
6., the planning commission may, by resolution, adopt an amendment to a project plan. The amendment is subject to approval by the local legislative body and approval requires the same findings as provided in
par. (g) and, if the amendment adds territory to a district under
subd. 2., approval also requires the same findings as provided in
par. (gm) 4. c. Any amendment to a project plan is also subject to review by a joint review board, acting under
sub. (4m). Adoption of an amendment to a project plan shall be preceded by a public hearing held by the plan commission at which interested parties shall be afforded a reasonable opportunity to express their views on the amendment. Notice of the hearing shall be published as a class 2 notice, under
ch. 985. The notice shall include a statement of the purpose and cost of the amendment and shall advise that a copy of the amendment will be provided on request. Before publication, a copy of the notice shall be sent by 1st class mail to the chief executive officer or administrator of all local governmental entities having the power to levy taxes on property within the district and to the school board of any school district which includes property located within the proposed district. For a county with no chief executive officer or administrator, this notice shall be sent to the county board chairperson.
66.1105(4)(h)2.
2. Except as provided in
subds. 4.,
5.,
7., and
8., the planning commission may adopt an amendment to a project plan under
subd. 1. to modify the district's boundaries, not more than 4 times during the district's existence, by subtracting territory from the district in a way that does not remove contiguity from the district or by adding territory to the district that is contiguous to the district and that is served by public works or improvements that were created as part of the district's project plan. A single amendment to a project plan that both adds and subtracts territory shall be counted under this subdivision as one amendment of a project plan.
66.1105(4)(h)4.
4. With regard to a village that has a population of less than 10,000, was incorporated in 1914 and is located in a county that has a population of less than 25,000 and that contains a portion of the Yellow River and the Chequamegon Waters Flowage, not more than once during the 11 years after the tax incremental district is created, the planning commission may adopt an amendment to a project plan under
subd. 1. to modify the district's boundaries by adding territory to the district that is contiguous to the district and that is to be served by public works or improvements that were created as part of the district's project plan. Expenditures for project costs that are incurred because of an amendment to a project plan to which this subdivision applies may be made for not more than 5 years after the date on which the local legislative body adopts a resolution amending the project plan.
66.1105(4)(h)5.
5. With regard to a city that has a population of at least 80,000 that was incorporated in 1850 and that is in a county with a population of less than 175,000 that is adjacent to one of the Great Lakes, the planning commission may adopt an amendment to a project plan under
subd. 1. to modify the district's boundaries by adding territory to the district that is contiguous to the district and that is served by public works or improvements that were created as part of the district's project plan not more than once during the expenditure period specified in
sub. (6) (am) 1. for a district that is located in a city to which
sub. (6) (d) applies, except that in no case may expenditures for project costs that are incurred because of an amendment to a project plan that is authorized under this subdivision be made later than 17 years after the district is created. This subdivision does not apply to a tax incremental district that is created after January 1, 2004.
66.1105(4)(h)6.
6. Notwithstanding
subd. 1., a project plan shall be considered to have been amended, without compliance with any of the procedures required under
subd. 1., if the only change to the project plan is the extension of the period during which expenditures may be made under
sub. (6) (am) 1., as authorized under that subdivision by a provision of state law that takes effect after a tax incremental district's project plan is first adopted under
par. (f).
66.1105(4)(h)7.
7. If the department of revenue, acting under
sub. (5) (dm), makes a determination that any of the conditions listed in
sub. (5) (de) apply, a planning commission may amend its project plan to ensure that, with regard to that mixed-use district, the percentage of lands proposed for newly platted residential use does not exceed the percentage specified in
sub. (2) (cm), or that at least one of the conditions specified in
sub. (2) (f) 3. a. to
c. applies, even if such an amendment to a project plan would exceed the number of amendments allowed under
subd. 2.
66.1105(4)(h)8.
8. Notwithstanding the limitation in
subd. 2., the planning commission in the village of Pleasant Prairie may adopt an amendment to a project plan under
subd. 1. to modify the boundaries of tax incremental district number 2 not more than 6 times during the district's existence. A single amendment to a project plan that both adds and subtracts territory shall be counted under this subdivision as one amendment of a project plan.
66.1105(4)(i)
(i) The local legislative body shall provide the joint review board with the following information and projections:
66.1105(4)(i)1.
1. The specific items that constitute the project costs, the total dollar amount of these project costs to be paid with the tax increments, and the amount of tax increments to be generated over the life of the tax incremental district.
66.1105(4)(i)2.
2. The amount of the value increment when the project costs in
subd. 1. are paid in full and the tax incremental district is terminated.
66.1105(4)(i)3.
3. The reasons why the project costs in
subd. 1. may not or should not be paid by the owners of property that benefits by improvements within the tax incremental district.
66.1105(4)(i)4.
4. The share of the projected tax increments in
subd. 1. estimated to be paid by the owners of taxable property in each of the taxing jurisdictions overlying the tax incremental district.
66.1105(4)(i)5.
5. The benefits that the owners of taxable property in the overlying taxing jurisdictions will receive to compensate them for their share of the projected tax increments in
subd. 4.
