Expanding the authority of towns to create tax incremental financing districts and authorizing certain towns to participate in multijurisdictional tax incremental financing districts. (FE)

The project costs of a TID, which are initially incurred by the creating city or village, include public works such as sewers, streets, and lighting systems; 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. Also under current law, a city or village may not generally make expenditures for project costs later than five years before the unextended termination date of the TID. Under certain circumstances, the life of the TID, the expenditure period, and the allocation period may be extended.

Under the current law limitations on towns to use tax incremental financing (TIF), a town may create a TID for projects related to tourism, agriculture, manufacturing, or forestry. A town may also use TIF for residential projects, but only to the extent that the residential project has a necessary and incidental relationship to a tourism, agricultural, manufacturing, or forestry project, and for retail projects to the extent that the retail development is related to the retail sale of a product that is produced due to an agricultural, forestry, or manufacturing project.

A town may also create a TID in limited circumstances under which the town enters into a cooperative plan with a city or village under which part or all of the town will be annexed or attached by the city or village.

This bill authorizes certain towns to exercise all of the powers of a city or village to create a TID within the town. To create a TID under the bill, a town must have a population of at least 5,000 and the equalized value of all taxable property within the town must be at least $500 million in the year before the year in which the town proposes to create the TID.

Also under current law, any number of cities and villages (municipalities) may 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, the current law provisions that apply to all TIDs apply to MJTIDs.

Under this bill, the type of towns that are authorized in this bill to exercise all of the powers of a city or village to create a TID with the town may participate in a MJTID.