AB 991

This bill increases the maximum life and tax increment allocation period for

Tax Incremental District (TID) Number 1 in the village of Withee.

Under current law, cities and villages may use tax incremental financing (TIF)

to encourage development in the city or village. In general, under TIF, a city or

village pays for improvements in a TID then collects tax moneys attributable to other

taxing jurisdictions for a period of time on the increased property value in the TID

to pay for the improvements. Ideally, after a period of time, the city or village has

been repaid for its initial investment and the property tax base in the TID has

permanently increased in value.

In general and in brief, a city or village makes use of TIF using the following

procedure:

1. The city or village designates an area as a TID and creates a project plan

laying out the expenditures that the city or village will make within the TID.

2. The Department of Revenue establishes the “base value” of the TID. This

value is the equalized value of all taxable property within the TID at the time of its

creation.

3. Each year thereafter, the “value increment” of the property within the TID

is determined by subtracting the base value from the current value of property

within the TID. The portion of taxes collected on any positive value increment is

collected by the city or village for use solely for the project costs of the TID. The taxes

collected by the city or village on positive value increments include taxes that would

have been collected by other taxing jurisdictions, such as counties or school districts,

were the TID not created.

4. Tax increments are collected until the city or village has recovered all of its

project costs or until the TID reaches its statutory termination date. The statutes

provide several different termination dates for different types of TIDs. In most cases,

TIDs must terminate 23 years or 27 years after the TID is created.

TID Number 1 in the village of Withee was created as an industrial TID in May

of 1996. Under current law, the unextended termination date of TID Number 1 in

the village of Withee is 23 years, because the TID is an industrial TID for which no

finding of blight was made and the TID was created after September 30, 1995, and

before October 1, 2004.

Under this bill, the life of TID Number 1 in the village of Withee is extended,

and tax increments may continue to be allocated, for up to 33 years after the TID's

creation.