02 Oct Fostering Cross Border Development: Multi-Jurisdictional TIDs
A New Tool Can Help Areas That Cross Municipal Boundaries – Multi-Jurisdictional Tax Increment Districts (TIDs)
Effective October 1, 2012, municipalities may collaborate to create a multijurisdictional tax increment financing (TIF) district. This provision of the TIF statutes (2011 Wisconsin Act 77) gives cities and villages a new, potentially powerful tool to jointly plan the development or redevelopment of an area that encompasses multiple political jurisdictions. The basis for creation of a multi-jurisdictional TID is an intergov
ernmental cooperation agreement as described in 66.0301 of Wisconsin statutes. The agreement must cover the following points:
- How the participating cities will meet the requirements for creation and approval of a tax incremental district.
- How determinations will be made that relate to incurring debt, expending funds for project costs, and distributing positive tax increments.
- Who will be the lead jurisdiction for filing documents with the Dept. of Revenue.
- Procedure for resolving disputes and under what circumstances the district will be dissolved and how.
- Membership of the joint review board.
- Establishment of a district planning commission and operating procedures along with a description of responsibilities of each jurisdiction’s planning commission.
- The responsibilities of each jurisdiction’s clerk, treasurer, and assessor.
- The procedures the participating cities will follow to determine whether the district’s life may be extended and how the project plan or boundaries of the district may be amended.
- How any annexation costs will be shared among all of the participating cities if annexed territory is part of the district.
The boundaries of a multi-jurisdictional (MJ) TID must contain at least one parcel in each participating jurisdiction, be contiguous, and at least one parcel in each jurisdiction must touch at least one parcel in at least one of the other jurisdictions. The 12% limit applies on an aggregate basis to all municipalities that are part of a multijurisdictional TID. Currently towns may not be part of a multijurisdictional TID.
Each municipality participating in a multi-jurisdictional TID appoints a public member to the Joint Review Board and each school district, technical college and county that levies taxes on property within the proposed TID may appoint a representative to the Joint Review Board. Each public member of a participating municipality must be part of the majority that votes for approval of the TID. This means the JRB can potentially be a much larger body than is the case under a single jurisdiction TID.
Tax increments are allocated to each participating municipality to the extent that a municipality’s component of the TID has generated a positive value increment. A multijurisdictional TID may not become a donor district or receive increments from a donor district. A multijurisdictional TID may not incur project costs for any area that is outside of the district’s boundaries.
A municipality may create a new TID over an existing multijurisdictional TID if the creation is approved by a resolution adopted by the governing body of each of the multijurisdictional district’s participating municipalities and the creation is approved by a resolution adopted by the multijurisdictional district’s Joint Review Board.
Clearly, the formation of a multijurisdictional TID will take considerably more time and effort, but there are parts of urban areas across the state that are in need of new investment but such investment is hindered because that particular area is covered by multiple jurisdictions and it is difficult for those jurisdictions to come together to establish a vision and plan for the area. The multijurisdictional TID provides an opportunity to give those areas new life.