Tax Incremental Finance (TIF)

Parcels, Overlaps and Annexations

Parcels

  1. Can parcels be added to the Tax Incremental District (TID) after the hearing notices are published?
  2. How detailed must a boundary description be?
  3. Who is responsible for valuing and classifying the land and buildings in a TID?
  4. A TID must contain contiguous properties, however, can there be parcels omitted from the center of the TID?
  5. Can a municipality combine two parcels, if one is in the TID and the other isn't?
  6. Can a parcel (exempt or non-exempt) be partially in a TID and not in the TID?
  7. If property owned by a utility company is added to a TID, will it be exempt?
  8. How should it be indicated that wetlands have been excluded from the TID?
  9. What is a newly platted residential development?
  10. Can newly platted residential property be included in a TID created after 9/30/95?
  11. Is a road/highway included in determining the calculations for 35% residential use in mixed-use TIDs?
  12. Can a TID's boundaries be set based on something that will happen in the future?
  13. For mixed-use TIDs, does the land need to be zoned correctly before the adoption of the creation resolution?
  14. Are projects within a TID required to follow local zoning?

Overlaps

  1. What is an overlap?
  2. Will a frozen overlap value of a TID be unfrozen if the overlapping TID is terminated?
  3. Which TID is affected by value changes in the overlapped area?

Annexations

  1. Can the TID creation process take place before an annexation is completed?
  2. If annexed property is included in a TID and a court later reverses the annexation how is the TID affected?
  3. If a town is annexed (absorbed) by a city prior to the maximum life of a TID created under a cooperative agreement, can the city continue to collect the increments to pay for the town projects?

Parcels

  1. Can parcels be added to the Tax Incremental District (TID) after the hearing notices are published?

    Yes. Sec. 66.1105(4)(a), Wis. Stats., refers to the proposed boundaries of the district for the public hearing and no mention is made to the hearing notice requiring them. The purpose of the public hearing is to receive/give input on the boundaries.

  2. How detailed must a boundary description be?

    The boundary must have enough detail so it corresponds to the map submitted. A metes and bounds description is the standard. The TID Base Year Packet provides specific information.

  3. Who is responsible for valuing and classifying the land and buildings in a TID?

    The local assessor and manufacturing assessor value the improvements and lands based on state statutes and the Wisconsin Property Assessment Manual.

  4. A TID must contain contiguous properties, however, can there be parcels omitted from the center of the TID?

    Omitted parcels causing, what are called “holes in the donut” are acceptable as long as they don't take away from the contiguity of the TID boundaries.

  5. Can a municipality combine two parcels, if one is in the TID and the other isn't?

    Yes, if the municipality does a territory amendment to add the non-TID parcel.

  6. Can a parcel (exempt or non-exempt) be partially in a TID and not in the TID?

    No. Under state law (sec. 66.1105(2)(k), Wis. Stats.), only whole parcels can be in a TID.

  7. If property owned by a utility company is added to a TID, will it be exempt?

    Yes, as long as it has a tax exempt status. Tax exempt property in a TID does not add to the base value. In addition, tax exempt property does not contribute to the value increment.

  8. How should it be indicated that wetlands have been excluded from the TID?

    Some municipalities describe the boundaries around them, others indicate at the end of the boundary description that all wetlands are excluded.

  9. What is a newly platted residential development?

    An example is a residential development on a previously undeveloped parcel of land that was not divided for residential lots. This would include subdividing a farm field for housing.

    TIF law only allows for increment revenue to be spent on newly platted residential development in mixed-use TIDs if one of the following three applies:

    • density of the residential housing is at least 3 units per acre,
    • residential housing is located in a conservation subdivision, as defined in sec. 66.1027(1)(a), Wis. Stats., or
    • residential housing is located in a traditional neighborhood development, as defined in sec. 66.1027(1)(c), Wis. Stats.

    The municipality must determine what is newly platted land.

  10. Can newly platted residential property be included in a TID created after 9/30/95?

    Yes, however, no project costs associated with it may be incurred. A mixed-use TID created after 10/1/04 can incur project costs for newly platted residential property, but the property may not exceed 35% by area of the TID.

  11. Is a road/highway included in determining the calculations for 35% residential use in mixed-use TIDs?

    No, only real taxable property is included in the calculation.

  12. Can a TID's boundaries be set based on something that will happen in the future?

    No. Any actions (i.e. split or annexations) must occur before the TID is created and be effective as of January 1st of the assessment year.

  13. For mixed-use TIDs, does the land need to be zoned correctly before the adoption of the creation resolution?

    No, they do not need to have final zoning done before the resolution is adopted. 50% of the land must be suitable (not necessarily zoned) for at least two of the following types: industrial, commercial or residential. There are no restrictions as to the percentage allocation between the types.

  14. Are projects within a TID required to follow local zoning?

    The TIF statutes do not change local municipal zoning rules.

Overlaps

  1. What is an overlap?

    An overlap is when the boundary of one TID overlaps one or more existing TIDs. Sec. 66.1105(10), Wis. Stats., contains additional information.

  2. Will a frozen overlap value of a TID be unfrozen if the overlapping TID is terminated?

    No, once this value has been frozen it remains at that level as long as the TID exists.

  3. Which TID is affected by value changes in the overlapped area?

    The TID that is “on top”; i.e. the TID that covered the parcel at the later date.

Annexations

  1. Can the TID creation process take place before an annexation is completed?

    Yes, as long as the annexation ordinance is approved before the creation resolution is adopted by the local governing body. You will need to have two sets of complete forms. One set will be for the annexed property and the other set will include all of the other property.

  2. If annexed property is included in a TID and a court later reverses the annexation how is the TID affected?

    Any annexed property in a TID that is later reversed by a court order would need to be removed from the TID.

  3. If a town is annexed (absorbed) by a city prior to the maximum life of a TID created under a cooperative agreement, can the city continue to collect the increments to pay for the town projects?

    Yes, under sec. 66.1105(16)(c), Wis. Stats, when a town TID is created under a cooperative agreement with a city or village and is absorbed by that city or village, it shall be administered by that city or village as if it had been created by that city or village.

 

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

Page last updated July 9, 2014