Municipalities May Prolong the Use of Positive Environmental Remediation Tax Increment

November 25th, 2009

Under a new law, a municipality may donate positive tax increment from an existing environmental remediation tax incremental district (ERTID) to another ERTID created by the same municipality, even after all eligible costs from the donor ERTID have been recovered.

The environmental remediation tax incremental financing program set forth in section 66.1106 of the Wisconsin Statutes allows a city, village, town or county to recover costs associated with the remediation of contaminated property from property taxes levied on the remediated property.

Creation of an ERTID is a three-step process:

  1. The municipality adopts a resolution creating the ERTID and establishing the boundaries of the ERTID.
  2. A joint review board comprised of representatives from the overlying tax jurisdictions approves the creation of the ERTID.
  3. The Wisconsin Department of Revenue certifies the environmental remediation tax incremental base for the property comprising the ERTID.

The maximum life of an ERTID is 23 years, commencing when the ERTID is certified by the DOR. No expenditure for an eligible cost may be made by the municipality later than 15 years after the ERTID is certified.

2009 Wisconsin Act 66 allows a municipality to donate positive tax increments from the donor ERTID to cover the eligible costs of another ERTID created by the same municipality, even if all the eligible costs for the donor ERTID have been recovered. Previously, an ERTID terminated when all eligible costs for the ERTID were recovered.

To donate positive tax increments from the donor ERTID, the municipality adopts a resolution asking the DOR to allocate positive environmental remediation tax increments from an ERTID whose remediation costs have been recovered to another ERTID. The DOR then allocates positive tax increments from the donor ERTID until the earlier of 23 years after the creation of the donor ERTID or when all eligible costs of the recipient ERTID have been recovered.

Filed Under: Government Law

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