SB 809

This bill increases the maximum life, the expenditure period, and the tax

increment allocation period for Tax Incremental Districts Number One and Four in

the village of Caledonia.

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

create a TID in part of its territory to foster development under certain conditions.

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.

Under this bill, with regard to TID Number One in the village of Caledonia, the

expenditures for project costs may be made for up to 32 years after the TID was

created, DOR may allocate tax increments for up to 37 years after the TID's creation,

and the maximum life of the TID is extended for 17 years.

Also under this bill, with regard to TID Number Four in the village of

Caledonia, the expenditures for project costs may be made for up to 25 years after

the TID was created, DOR may allocate tax increments for up to 30 years after the

TID's creation, and the maximum life of the TID is extended for 10 years.