AB 174

Under current law, the environmental remediation tax incremental financing

program permits a city, village, town, or county (political subdivision) to recoup the

costs of remediating contaminated property from property taxes that are levied on

the remediated property. The mechanism for financing remediation costs is very

similar to the mechanism for financing project costs under the tax incremental

financing program.

Initially, the governing body of a political subdivision adopts a resolution

creating an environmental remediation tax incremental district (ERTID) with

particular boundaries. This resolution is then reviewed by a joint review board made

up of representatives of the overlying taxing jurisdictions. If the joint review board

approves the ERTID, 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 the

Department of Natural Resources (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. Thereafter, the political subdivision that created the

ERTID may use positive environmental remediation tax increments to pay eligible

costs of remediating environmental pollution in the ERTID.

Currently, the maximum life of an ERTID is 23 years and no expenditure for

an eligible cost may be made by a political subdivision later than 15 years after the

environmental remediation tax incremental base is certified by DOR. An ERTID

may also terminate when a political subdivision has received sufficient

environmental remediation tax increments to cover all of the eligible costs.

This bill allows the governing body of a political subdivision to adopt a

resolution requesting that DOR allocate environmental remediation tax increments

from an ERTID that has recovered all eligible costs to another ERTID created by the

same governing body. Upon receipt of a copy of this resolution, DOR would continue

to allocate environmental remediation tax increments from the donor ERTID after

all of the eligible costs for that ERTID have been recovered. These increments would