Tax Incremental Finance (TIF)

Developer's Agreement

  1. What is the difference between a loan and grant?
  2. Is it necessary to send the Department of Revenue (DOR) a copy of the developer's agreement?
  3. When is it necessary in a class 2 notice to include the cash grant reference and amount?
  4. How long does a developer's agreement need to be, and who makes the final decision on what should be included?

  1. What is the difference between a loan and grant?

    Anytime funding is given to an owner, developer, or lessee of land within a Tax Incremental District (TID) and paid for by TID increments, it is considered a cash grant. The difference between a grant and loan is that a loan is completely paid back; while a grant is paid for by increments from the property taxes of the TID.

  2. Is it necessary to send the Department of Revenue (DOR) a copy of the developer's agreement?

    The statutes do not specifically state that a copy of the agreement must be sent to DOR. However, it does state that a copy of the developer's agreement should be sent to the Joint Review Board or, if dissolved, retained by the city in the official records for the TID.

  3. When is it necessary in a class 2 notice to include the cash grant reference and amount?

    Although the statute does not state that the purpose and exact project costs need to be listed, if the municipality anticipates that the proposed project may include cash grants, the hearing notice shall contain a statement to that effect (sec. 66.1105(4)(e), Wis. Stats.).

  4. How long does a developer's agreement need to be, and who makes the final decision on what should be included?

    The municipal attorney and local governing board should make that decision based on a written agreement covering all of the necessary information.

FOR MORE INFORMATION PLEASE CONTACT:

Wisconsin Department of Revenue
Attn: Office of Technical and Assessment Services
PO Box 8971, MS 6-97
Madison, WI 53708-8971
Phone (608) 266-5708
Fax (608) 264-6897
Email additional questions to tif@revenue.wi.gov

March 22, 2013