Changes to a tax incremental district joint review board's voting requirements, requiring that a tax incremental district's project plan include alternative economic projections, and limiting the amount of cash grants a city or village may provide to a developer. (FE)

Currently, towns and counties also have a limited ability to create a TID under certain limited 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.

Currently, a project plan must include a number of elements, such as information regarding the kind, number, and location of all proposed public works or improvements within the district, an economic feasibility study, a detailed list of estimated project costs, and a description of financing methods for the project costs.

Generally, project costs are defined to include public works such as sewers, streets, and lighting systems; financing costs; site preparation costs; and professional service costs. Certain items are specifically prohibited from being considered project costs, such as the cost of constructing or expanding certain municipal buildings and cash grants to developers, although exceptions are allowed. For example, current law authorizes a city or village to make cash grants to owners, lessees, or developers of land in a TID if the grant recipient has entered into a development agreement with the city or village.

Under this bill, the total of all such allowable cash grants may not exceed 20 percent of the total project costs of a TID, including financing costs attributable to the grants, unless the grant recipient's development agreement with the city or village specifies that the developer agrees to finance the cost of all public infrastructure improvements within the proposed TID, and further agrees to receive reimbursement for these costs solely from the payment of cash grants.

This bill requires the project plan to also include alternative economic projections of the TID's finances and feasibility under different economic situations, including a slower pace of development and lower rate of property value growth than expected in the TID.

Generally, under current law, a JRB consists of five members, three members who represent the TID's overlying taxation districts (school board, county, and technical college districts), one member from the city or village that created the TID, and one public member. To take certain actions, such as approving the creation of a TID, amending a TID's project plan, or having a TID's tax incremental base redetermined, a majority vote is required.

Under this bill, on October 1, 2020, a majority vote will generally require three affirmative votes. However, the bill requires unanimous JRB approval for a vote to amend a TID's project plan that would either add territory to the TID or extend its original termination date. After October 1, 2020, the bill also removes the limit of four amendments to a TID's project plan to modify the TID's boundaries.