AB 306

Generally under current law, once a tax incremental district 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.

Under this bill, for property values reported in 2018, if a city or village

erroneously reports a higher value increment for its TIDs by an aggregate amount

of at least $50 million, the city's or village's TIDs may transfer the excess tax

increment collections resulting from this error to the city's or village's general fund

to reimburse taxpayers for the higher property tax rates imposed on them due to this

error. Before making any such transfers, the city or village must verify with DOR

the amounts involved.