Wisconsin 2023-2024 Regular Session

Wisconsin Assembly Bill AB879 Compare Versions

Only one version of the bill is available at this time.

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3	3	2023 - 2024 LEGISLATURE
4	4	2023 ASSEMBLY BILL 879
5	5	January 2, 2024 - Introduced by Representatives JACOBSON, RATCLIFF, C. ANDERSON,
6	6	CONSIDINE, J. ANDERSON and JOERS, cosponsored by Senators HESSELBEIN,
7	7	SPREITZER and AGARD. Referred to Committee on Ways and Means.
8	8	*AUTHORS SUBJECT TO CHANGE*
9	9	AN ACT to repeal 66.0602 (3) (dq), 66.0602 (3) (dv) and 66.1105 (4m) (b) 2m.; and
10	10	to amend 66.0602 (1) (d), 66.0602 (3) (dm), 66.0602 (3) (ds) and 66.1105 (6m)
11	11	(c) 8. of the statutes; relating to: local levy increase limit calculations related
12	12	to tax incremental districts.
13	13	Analysis by the Legislative Reference Bureau
14	14	This bill repeals the changes made in 2023 Wisconsin Act 12 to the calculation
15	15	of local property tax levy limits with regard to taxable property located within a tax
16	16	incremental district (TID).
17	17	Generally, under current law, local levy limits are applied to the property tax
18	18	levies that are imposed by political subdivisions. A political subdivision may not
19	19	increase its levy by a percentage that exceeds its “valuation factor," which is the
20	20	greater of either 1) the percentage change in the political subdivision's equalized
21	21	value due to new construction, less improvements removed, (net new construction)
22	22	or 2) 0 percent.
23	23	Act 12 changed the standard for determining the “valuation factor” to include
24	24	only 90 percent of new construction that occurs within TIDs created after December
25	25	31, 2024, (covered TIDs) and to exclude any improvements removed within these
26	26	TIDs. That is, under Act 12, net new construction for a political subdivision is the
27	27	percentage change in the political subdivision's equalized value due to new
28	28	construction, including 90 percent of the value of new construction occurring within
29	29	a covered TID, less improvements removed, other than improvements removed
30	30	within a covered TID. The bill repeals these changes.
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37	37	Also, under current law, when a city or village creates a TID, the Department
38	38	of Revenue calculates the “tax incremental base” value of the TID, which is the
39	39	equalized value of all taxable property within the TID at the time of its creation. If
40	40	the development in the TID increases the value of the property in the TID above this
41	41	base value, the amount by which the equalized value exceeds the base value is the
42	42	TID's “value increment.” The taxes collected on this value increment pay for the
43	43	project costs of the TID.
44	44	Prior to Act 12, the statutes provided for an increase in a political subdivision's
45	45	levy limit upon the termination of a TID. If DOR did not certify a value increment
46	46	for a TID for a year because the TID had terminated, the levy limit of the political
47	47	subdivision in which the TID is located increased by an amount based on 50 percent
48	48	of the previous year's value increment for the TID. (The actual amount was equal
49	49	to the maximum allowable levy for the preceding year, multiplied by a percentage
50	50	equal to 50 percent of the amount determined by dividing the terminated TID's value
51	51	increment by the political subdivision's equalized value less any TID value
52	52	increments.) Also under pre-Act 12 law, a similar increase in levy limit resulted
53	53	when a political subdivision amended a TID to subtract territory.
54	54	Under Act 12, these existing standards for increasing the levy limit of a political
55	55	subdivision upon the termination or amendment of a TID are limited to TIDs created
56	56	before January 1, 2025. For covered TIDs, upon termination or amendment of the
57	57	covered TID, the political subdivision's levy limit is increased by an amount based
58	58	on 10 percent of the TID's lifetime equalized value increase. (The actual amount is
59	59	equal to the aggregate of the annual amounts of new construction less improvements
60	60	removed in the covered TID.) This levy limit increase may be further increased by
61	61	an amount based on 15 percent of the TID's lifetime equalized value increase if the
62	62	TID terminates earlier than anticipated at the time of the covered TID's creation.
63	63	The bill eliminates the changes made by Act 12.
64	64	For further information see the state and local fiscal estimate, which will be
65	65	printed as an appendix to this bill.
66	66	The people of the state of Wisconsin, represented in senate and assembly, do
67	67	enact as follows:
68	68	SECTION 1. 66.0602 (1) (d) of the statutes, as affected by 2023 Wisconsin Act 12,
69	69	is amended to read:
70	70	66.0602 (1) (d) “Valuation factor" means a percentage equal to the greater of
71	71	either the percentage change in the political subdivision's January 1 equalized value
72	72	due to new construction less improvements removed between the previous year and
73	73	the current or 0 percent. For a tax incremental district created after December 31,
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84	84	2024, the valuation factor includes 90 percent of the equalized value increase due to
85	85	new construction that is located in a tax incremental district, but does not include
86	86	any improvements removed in a tax incremental district.
87	87	SECTION 2. 66.0602 (3) (dm) of the statutes, as affected by 2023 Wisconsin Act
88	88	12, is amended to read:
89	89	66.0602 (3) (dm) For a tax incremental district created before January 1, 2025,
90	90	if If the department of revenue does not certify a value increment for a tax
91	91	incremental district for the current year as a result of the district's termination, the
92	92	levy increase limit otherwise applicable under this section in the current year to the
93	93	political subdivision in which the district is located is increased by an amount equal
94	94	to the political subdivision's maximum allowable levy for the immediately preceding
95	95	year, multiplied by a percentage equal to 50 percent of the amount determined by
96	96	dividing the value increment of the terminated tax incremental district, calculated
97	97	for the previous year, by the political subdivision's equalized value, exclusive of any
98	98	tax incremental district value increments, for the previous year, all as determined
99	99	by the department of revenue.
100	100	SECTION 3. 66.0602 (3) (dq) of the statutes, as created by 2023 Wisconsin Act
101	101	12, is repealed.
102	102	SECTION 4. 66.0602 (3) (ds) of the statutes, as affected by 2023 Wisconsin Act
103	103	12, is amended to read:
104	104	66.0602 (3) (ds) For a tax incremental district created before January 1, 2025,
105	105	if If the department of revenue recertifies the tax incremental base of a tax
106	106	incremental district as a result of the district's subtraction of territory under s.
107	107	66.1105 (4) (h) 2., the levy limit otherwise applicable under this section shall be
108	108	adjusted in the first levy year in which the subtracted territory is not part of the value
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136	136	increment. In that year, the political subdivision in which the district is located shall
137	137	increase the levy limit otherwise applicable by an amount equal to the political
138	138	subdivision's maximum allowable levy for the immediately preceding year,
139	139	multiplied by a percentage equal to 50 percent of the amount determined by dividing
140	140	the value increment of the tax incremental district's territory that was subtracted,
141	141	calculated for the previous year, by the political subdivision's equalized value,
142	142	exclusive of any tax incremental district value increments, for the previous year, all
143	143	as determined by the department of revenue.
144	144	SECTION 5. 66.0602 (3) (dv) of the statutes, as created by 2023 Wisconsin Act
145	145	12, is repealed.
146	146	SECTION 6. 66.1105 (4m) (b) 2m. of the statutes, as created by 2023 Wisconsin
147	147	Act 12, is repealed.
148	148	SECTION 7. 66.1105 (6m) (c) 8. of the statutes, as affected by 2023 Wisconsin Act
149	149	12, is amended to read:
150	150	66.1105 (6m) (c) 8. The value of new construction in the tax incremental district
151	151	and, less the value of improvements removed from the tax incremental district.
152	152	(END)
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