AB 73

Under the current tax incremental financing (TIF) 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 (JRB) 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.

Generally under current law a local planning commission may amend the

project plan of a TID, by adding or subtracting territory from the district, not more

than four times during the TID's existence. If a TID's project plan is amended,

current law authorizes the Department of Revenue (DOR) to redetermine the TID's

tax incremental base. DOR may charge a city or village $1,000 to determine or

redetermine a TID's tax incremental base or, if a project plan amendment both adds

and subtracts territory, DOR may impose a fee of $2,000.

Also under current law a city or village may adopt a resolution, subject to JRB

approval, and not more than once during a TID's life, requiring DOR to redetermine

the tax incremental base of a TID that is in a decrement situation that has continued

for at least two consecutive years. Decrement situation is defined as a situation in

which the current aggregate equalized value of all the taxable property within the

TID is at least 10 percent less than the current value of the TID's tax incremental

base. DOR may charge the city or village $1,000 for the redetermination.

Currently, before a city or village may adopt a resolution requiring DOR to

redetermine the tax incremental base of a TID that is in a decrement situation, the

city or village must complete a financial analysis of the TID and must amend the

TID's project plan to meet at least one of the following three conditions:

1. With regard to the total value of public infrastructure improvements in the

district that occur after JRB approval, at least 51 percent of the value of the

improvements must be financed by a private developer or other private entity in

return for the city's or village's agreement to repay those costs solely through the

payment of cash grants, and that cash grants must be paid under a development

agreement with the city or village.

2. That all project costs are expected to be paid within 90 percent of the TID's

remaining life.