AB 547

Under the current tax incremental financing program, a city or village may

create a tax incremental district (TID) in part of its territory to foster development

if at least 50 percent of the area to be included in the TID is blighted, in need of

rehabilitation or conservation, suitable for industrial sites, or suitable for mixed-use

development. Currently, towns and counties also have a limited ability to create a

TID under certain circumstances. Before a city or village may create a TID, several

steps and plans are required. These steps and plans include public hearings on the

proposed TID within specified time frames, preparation and adoption by the local

planning commission of a proposed project plan for the TID, approval of the proposed

project plan by the common council or village board, approval of the city's or village's

proposed TID by a joint review board that consists of members who represent the

overlying taxation districts, and adoption of a resolution by the common council or

village board that creates the TID as of a date provided in the resolution.

Also under current law, once a TID has been created, the Department of

Revenue (DOR) calculates the "tax incremental base" value of the TID, which is the

equalized value of all taxable property within the TID at the time of its creation. If

the development in the TID increases the value of the property in the TID above the

base value, a "value increment" is created. That portion of taxes collected on the

value increment in excess of the base value is called a "tax increment." The tax

increment is placed in a special fund that may be used only to pay back the project

costs of the TID.

Generally, under current law, and subject to a number of exceptions, a city,

village, town, or county (political subdivision) may not increase its levy by a

percentage that exceeds its "valuation factor," which is defined as the greater of

either zero percent or the percentage change in the political subdivision's equalized

value due to new construction, less improvements removed. The base amount of a

political subdivision's levy, on which the levy limit is imposed, is the actual levy for

the immediately preceding year.

Under one of the current law exceptions, if DOR does not certify a value

increment for a TID as a result of the district's termination, the levy limit otherwise

applicable to the political subdivision is increased by a certain amount.

Under the current law exception to the levy limit relating to DOR not certifying

a value increment for a TID that is terminated, the allowable increase is an amount

equal to the political subdivision's maximum allowable levy for the preceding year,

multiplied by a percentage equal to 50 percent of the amount determined by dividing

the terminated TID's value increment by the political subdivision's equalized value,

as determined by DOR. This bill increases the percentage from 50 percent to 80

percent.

Also under current law, a city, village, or town (municipality) must annually

prepare and make available to the public updated reports describing the status of