A new law signed March 12, 2010 changes several administrative procedures that apply to tax incremental districts (TIDs), including how the 12 percent test is calculated.
Under the new law, to determine whether a TID’s taxable property plus the value increment of all existing TIDs in a city or village does not exceed 12 percent of the total equalized value of taxable property in the city or village (the “12 percent test”), the Department must exclude any parcel of land in a newly-created TID that is located in an existing TID. A municipality must submit its resolution recommending a TID to the Department of Revenue by October 31, instead of December 31, and the Department must notify the city or village in writing by December 31 if it has violated the 12 percent test. If in violation, the city or village must either rescind its approval of the resolution creating a TID, or remove parcels from the TID’s boundaries so that it complies with the 12 percent test.
The legislation requires meetings by a joint review board to be preceded by class 1 notice. It also specifies that if a political subdivision receiving tax increment for a TID or environmental remediation TID does not pay the annual administrative fee to the Department by May 15, the Department may not allocate tax increment to that political subdivision.