Expanding the number of tax incremental financing districts that may be designated as distressed or severely distressed

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 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.

Currently, a city or village that acts before October 1, 2011, may designate a TID that was created before October 1, 2008, as a distressed or severely distressed TID (distressed TID) if a number of steps occur. The city or village must adopt a resolution finding that its project costs incurred on the TID exceed the revenues the city or village expects the TID to generate during its lifetime. The municipal clerk must send to DOR and the joint review board a copy of the resolution and the related financial data that the city or village used when it adopted its resolution.

Before the city or village may adopt the resolution concerning its project costs, the common council must hold a public hearing at which interested parties may express their views on the proposed distressed TID. Following receipt of the resolution and financial data, the joint review board must evaluate the information to determine whether designating the district as a distressed TID or allowing increment sharing will likely enhance the ability of the city or village to pay its project costs. The resolution adopted by the city or village may not take effect without joint review board approval of the designation. The board may approve or deny the designation. If the joint review board approves the designation, DOR must certify the designation and notify all overlying taxing jurisdictions of the certification.

A distressed TID may continue to exist and receive tax increments, as well as contributions from a donor TID, for up to 40 years after the distressed TID was created. A distressed TID may not amend its project plan to add any additional project costs, add territory, become a donor TID, make any expenditures after its original expenditure period ends, or expend funds outside of the TID's boundaries.

A distressed TID must terminate whenever all of its project costs have been paid off or 40 years after it was created, whichever occurs first. A donor TID must terminate upon the earlier of the distressed TID's termination or 40 years after the donor TID is created.

This bill repeals the requirement that a TID must have been in existence for at least seven years before the city or village may adopt a resolution designating the TID as a distressed TID.