Authorizing the creation of a multijurisdictional tax incremental financing district

financing costs; site preparation costs; and professional service costs. DOR authorizes the allocation of the tax increments until the TID terminates or, generally, 20 years, 23 years, or 27 years after the TID is created, depending on the type of TID and the year in which it was created. Under certain circumstances, the life of the TID and the allocation period may be extended.

Under current law, a planning commission may adopt an amendment to a project plan, which requires the approval of the common council or village board and the same findings that current law requires for the creation of a new TID. Current law also authorizes the amendment of a project plan up to four times during a TID's existence to change the district's boundaries by adding or subtracting territory.

Currently, before a TID may be created or its project plan amended, the city or village must adopt a resolution containing a finding that the equalized value of taxable property of the TID plus the value increment of all existing TIDs does not exceed 12 percent of the total equalized value of taxable property in the city or village (the "12 percent test"), subject to one exception. Under the exception, a city or village may simultaneously create a new TID and subtract territory from an existing TID without adopting a resolution containing the 12 percent test if the city or village demonstrates to DOR that the value of the territory that is subtracted at least equals the amount that DOR believes is necessary to ensure that, when the new TID is created, the 12 percent test is met. The city or village must also certify to DOR that no other district created under this exception currently exists in the city or village.

Under certain limited circumstances, a TID that has paid off all of its project costs but has not reached its mandatory termination date may become a donor TID, continue to receive tax increments, and forward those increments to a recipient TID created by the same city or village.

This bill authorizes any number of cities and villages (municipalities) to jointly create a multijurisdictional TID (MJTID). Towns may not participate in a MJTID.

To create a MJTID, municipalities must enter into an intergovernmental cooperation agreement to create the MJTID. The agreement must specify a number of things, including the proposed membership of the joint review board; a binding procedure to resolve disputes; a procedure to dissolve the MJTID before it would otherwise be required to terminate; a description of the responsibilities of each municipality's clerk, treasurer, and assessor; specification of a lead municipality for purposes of completing and submitting required documents; and procedures that will be followed to amend the project plan or boundaries of the MJTID. A copy of the agreement must be sent to DOR.

With regard to an MJTID, the district must be contiguous, its borders must contain territory in all municipalities that are a party to the agreement, and at least one parcel in each municipality must touch at least one parcel in at least one of the other municipalities. The agreement must specify that the MJTID's application to DOR will be submitted to DOR as one complete application and that the MJTID will terminate at one time as a single entity.

Generally under the bill, the current law provisions that apply to all TIDs apply to MJTIDs. There are, however, a number of provisions that apply only to MJTIDs, including the following:

1. A MJTID may not become a donor TID or receive tax increments from a donor TID.

2. The 12 percent test applies in the aggregate to the municipalities that participate in a MJTID, but an individual participating municipality may exceed the 12 percent limit for the part of the MJTID that is in that municipality, provided all of the overlaying taxation districts agree to that municipality exceeding the 12 percent limit.

3. DOR may allocate positive tax increments to each participating municipality only to the extent that the municipality's component of the MJTID has generated a positive value increment.

4. Each participating municipality may appoint one public member to the joint review board.

5. Generally, each school district, union high school district, elementary school district, technical college district, and county that may levy taxes on the property within the MJTID may select a representative to the joint review board unless the unit of government's governing body opts out of this authority.

6. Besides the generally required joint review board majority vote to approve the creation of a TID or the amendment of its project plan, all representatives of a participating municipality must be in the majority that votes for such approvals for a MJTID.

7. A MJTID may not incur project costs for an area that is outside the boundaries of the MJTID.

This bill grants DOR the authority to require each participating municipality to submit any forms prescribed by DOR without regard to whether a particular municipality is the lead municipality or what the agreement specifies as the responsibility of a particular municipality. DOR is also authorized to resolve any ambiguity regarding the creation, amendment, administration, and termination of a MJTID and may use the agreement as a guide to resolving the ambiguity.

Generally, DOR may impose only one $1,000 fee, as authorized under current law, for determining or redetermining the tax incremental base of a MJTID no matter how many participating municipalities are part of the district, and DOR may charge only the lead municipality the $150 annual administrative fee.