TIF Study Committee October Update

In early October, the Legislative Council Study Committee on the Review of Tax Incremental Financing (TIF) met to discuss further options for possible legislation, and look at drafted legislation that had been discussed at the previous committee meeting. A bill draft does not equate approval of the concept; drafts are preliminary and do not necessarily move forward.

The committee discussed the following:

Change in State Statutes Adversely Impacting TIDs: Occasionally, a change in state statutes can adversely impact TIDs. The committee agreed to see a drafted bill that would allow TID project plan amendments when a change in statute affects a TID, with possible approval from the Department of Revenue (DOR) and/or the Joint Revenue Board (JRB).

Donor TIDs: Current statute only allows TIDs with positive tax increments to donate to another TIDs, to donate to another TID, all districts must share the same taxing jurisdiction, which is not always the case for a city or village TID portfolio; for example, the city of Appleton’s TID portfolio falls in multiple counties. Also, not all TIDs are eligible to receive donated increments. The committee agreed to see drafted legislation that would allow TIDs to donate increments that are not in the same taxing jurisdiction, with unanimous approval from the JRB.

Mixed-Use TIDs: Current law states that a municipality may create a mixed-use TID, which contains a combination of industrial, commercial, or residential uses, with the limitation that newly-platted residential land use within the plan may not exceed 35%. The committee unanimously agreed to draft a change to the statute that would allow zoning changes in mixed-use TIDs after a TID has been created, as long as the ratio of 35% does not change. The committee agreed this change in statute was necessary, as the original statute was an unintended consequence of the 2004 TIF reform laws.

Town TIDs: Current statute requires substantially different provisions for town TIDs than other municipal TIDs. Representative Loudenbeck (R-Clinton) and some committee members asked to see drafted legislation that would make statute for town TIDs similar or identical to statutes city or village TIDs.

TID Creation Process: Current DOR rules require a “legal description” in TID applications. After discussion amongst committee members, Legislative Council agreed to speak with the DOR rule-making body to see if this is an agency rule that could be discarded, as it is not part of statute. The committee also agreed to look at drafted legislation that would eliminate the timing penalty for TID creation that occurs after October 31st; currently, TIDs created between October 31 and the end of the year will not start collecting until the following January.

TID Amendment Process: When amendments are made to a project plan currently, there must be a class 1 notice for the JRB meeting, and a class 2 notice for the public hearing that must be held. The committee asked Legislative Council to draft a bill that would only require a class 1 notice (an announcement five days prior) for the public hearing.

Project Plans: TIF statute regarding project plans detail the expenditures, findings, and content that must be contained in each TID project plan. The committee asked for drafted legislation that would eliminate or modify the vacant land test for blighted or redevelopment areas.

The committee members were also able to see bill drafts that had been discussed at the previous committee meeting. The drafted legislation and other documents can be found on the Legislative Council website.

The next Study Committee on the Review of TIF will be held Thursday, November 13th, at 10 AM, in 412 East of the State Capitol.