Remediation of contaminated land; air pollution control requirements for certain manufacturing facilities constructed on formerly contaminated land; reassigning tax deeds on tax delinquent brownfield properties; creating a new method for the creation of environmental remediation tax incremental financing districts; loans and repayment assistance by a political subdivision for certain brownfield revitalization projects and collection of the debt by special charge; state trust fund loans for brownfield projects; conversion of business improvement districts; and annexations to business improvement districts and neighborhood improvement districts. (FE)

Current law also provides that if a person who possesses or controls property contaminated by a hazardous substance, or who caused the discharge of a hazardous substance, voluntarily undertakes certain investigation and remediation actions on the contaminated property that are approved by DNR, the person is exempt from liability for certain other investigation and remediation actions and their costs.

This bill provides a definition of the term “property" in relation to the voluntary party liability exemption for remediation of contaminated land. The bill also provides that a property may be subdivided or transferred without affecting the liability exemption or requiring a new application.

Pilot program Current federal law and state law require construction permits and operation permits for certain stationary sources of air pollution. Under certain circumstances, DNR may issue a registration permit authorizing construction or operation or both for a stationary source with low actual or potential emissions.

This bill creates a pilot program under which a participating owner or operator of a stationary source is not required to make changes to the source's air pollution controls due to new or modified legal requirements, except as required under the federal Clean Air Act, for ten years after DNR issues a registration permit for the source. This exemption would apply only if the source 1) is classified as a minor source, which is a facility that emits air contaminants from a fixed location in an amount that is less than an amount specified by DNR by rule; 2) is a manufacturing facility that is being constructed on formerly contaminated land that has been certified by DNR as having been remediated; and 3) is included in the Green Tier Program, under which entities voluntarily undertake actions that are likely to result in significant reductions in emissions of greenhouse gases or in energy use.

Tax deeds Under current law, before the county takes a foreclosure judgment on a brownfield property for which the owner has failed to pay property taxes, the county may assign its foreclosure rights to a person who agrees to remediate, maintain, and monitor the property according to rules promulgated by DNR.

This bill provides that a county may also assign its right to take a tax deed on brownfield property to a person who agrees to remediate, maintain, and monitor the property according to DNR rules.

Tax incremental financing; environmental remediation This bill changes the way environmental remediation tax incremental districts are created.

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

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.

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 general exception.

Under current law, the environmental remediation tax incremental financing statute permits a city, village, town, or county to recoup the costs of remediating contaminated property from property taxes that are levied on the remediated property. The mechanism for financing remediation costs is similar to the mechanism for financing project costs under the tax incremental financing program, including the political subdivision's adoption of a resolution creating the environmental remediation tax incremental district (ERTID), joint review board project plan approval, and DOR certification of the district's tax incremental base.

DOR is required to certify the environmental remediation tax incremental base if the political subdivision submits to DOR all of the following: 1) a statement that the political subdivision has incurred some eligible costs, together with a detailed proposed remedial action plan approved by DNR that contains cost estimates for anticipated eligible costs, a schedule for the design and implementation that is needed to complete the remediation, and certification from DNR that it has approved the site investigation report that relates to the parcel; 2) a statement that all taxing jurisdictions with authority to levy general property taxes on the parcel of property have been notified that the political subdivision intends to recover its environmental remediation costs by using an environmental remediation tax increment; and 3) a statement that the political subdivision has attempted to recover its environmental remediation costs from the person who is responsible for the environmental pollution that is being remediated. Thereafter, the political subdivision that created the ERTID may use positive environmental remediation tax increments to pay eligible costs of remediating environmental pollution in the ERTID.

Currently, the maximum life of an ERTID is 23 years and no expenditure for an eligible cost may be made by a political subdivision later than 15 years after the environmental remediation tax incremental base is certified by DOR. An ERTID may also terminate when a political subdivision has received sufficient environmental remediation tax increments to cover all of the eligible costs.

Under this bill, no new ERTIDs may be created under current ERTID law.

Under the bill, ERTIDs may be created under the existing TID statutes and may operate just like regular TIDs, subject to a number of conditions and exceptions.

Under the bill, the city or village creating the ERTID must obtain from DNR a certified site investigation report. To obtain the report, the city or village must submit to DNR detailed information regarding the environmental pollution that exists within the boundaries of the proposed ERTID and a proposed remediation plan. If DNR agrees with the description of the problem and the proposed remediation plan, it must certify the report. Property containing significant environmental pollution must constitute the majority of the territory in the proposed ERTID. A city or village may modify and resubmit the report to DNR if the department does not approve of the proposed report as submitted.

Under the bill, the 12 percent test does not apply to ERTIDs, and the tax incremental base of an ERTID must be $1 when the district is created. In addition, an ERTID created under the current TID law would have a maximum life of 27 years.

ERTIDs may be created under the process created in the bill by a city, village, town, or county to the same extent that such a political subdivision may currently create a TID.

Property assessed clean energy loans Under current law, a city, village, or town may impose a special charge against real property for services rendered by allocating the cost of the service to the properties that are served. Generally, a special charge is not payable in installments.

Also under current law, a political subdivision may make a loan to, or enter into a loan repayment agreement with, an owner or lessee of a premises for making or installing certain energy or water efficiency improvements (property assessed clean energy or PACE program). The political subdivision may collect a loan repayment under the PACE program as a special charge. A special charge imposed under the PACE program may be collected in installments. Also, a political subdivision may allow a third party that has provided financing for the PACE program project to collect the installments.

Under this bill, a political subdivision may make a PACE loan to, or enter a PACE agreement with, an owner or lessee of a premises for a brownfield revitalization project. Brownfield revitalization projects are certain actions taken upon a commercial or industrial premises that is located on, or that constitutes, a brownfield. A brownfield is an abandoned, idle, or underused industrial or commercial facility or site, the expansion or redevelopment of which is adversely affected by actual or perceived environmental contamination. The actions that may be included within a brownfield revitalization project under this bill are site assessment, remediation, lead or asbestos abatement, demolition, and other standard site preparation actions. A political subdivision that makes a PACE loan, or enters into a PACE agreement, for a brownfield revitalization project must provide a repayment period of not more than 20 years.

Neighborhood improvement districts and business improvement districts Under current law, a municipality may create a business improvement district (BID), upon being petitioned to do so by a business owner whose business is located in the proposed BID, if a number of steps are taken. A BID consists of contiguous parcels of land and operates under an operating plan approved by the BID board and the municipality. The creating municipality may impose special assessments on real property in the BID, other than real property used exclusively for residential purposes and property exempt from general property taxes, to provide for development, redevelopment, maintenance, operation, and promotion of the BID.

Also under current law, a municipality may create a neighborhood improvement district (NID), upon being petitioned to do so by an owner of real property that is located in the proposed NID, if a number of steps are taken. In general, an NID is an area within a municipality consisting of parcels that are nearby one another, but not necessarily contiguous, at least some of which are used for residential purposes and are subject to general real estate taxes. An NID operates under an operating plan approved by the NID board and the municipality. The creating municipality may impose special assessments on real property located within the NID, except real property that is used exclusively for fewer than eight residential dwelling units and real property that is exempt from general property taxes, to provide for the development, redevelopment, maintenance, operation, and promotion of the NID.

Under this bill, territory may be annexed to a BID or NID using essentially the same procedure as for the creation of the BID or NID. Also under this bill, upon petition by an owner of real property that is subject to general real estate taxes, that is used exclusively for residential purposes, and that is located in a BID, a BID may convert to an NID.

State trust fund loans Under current law, the Board of Commissioners of Public Lands manages the common school fund, the normal school fund, the university fund, and the agricultural college fund (trust funds). BCPL also administers a state trust fund loan program under which it makes loans, from moneys belonging to the trust funds, to school districts, local governments, and certain other public entities for certain public purposes. Also under current law, the Wisconsin Constitution prohibits a municipality from becoming indebted in an amount that exceeds 5 percent of the taxable property located in the municipality.

This bill provides that a state trust fund loan to a municipality made for the purpose of funding a project related to brownfields may not be included in arriving at the constitutional debt limitation if 1) the term of the loan is not more than 15 years, 2) the loan is not in default, and 3) DNR verifies to BCPL that the site on which the project will occur is a brownfield.