Legislature Creates Special Committee to Study Possible TIF Law Changes
By Tom Larson
While the legislative session officially ended on April 1, 2014, the Wisconsin Legislature has created several study committees to review various laws and recommend possible changes over the summer. One of those study committees will look at Wisconsin’s TIF law and consider making changes to the law to improve how TIF districts impact a local government’s finances and property taxes, economic development, and job growth.
The committee was created upon request by several legislators who want to change TIF law to ensure TIF districts in Wisconsin remain economically viable so that taxpayers do not have to bail out the districts if they fail. According to these legislators, a greater number of communities have TIF districts that are struggling financially and are seeking relief from the legislature (e.g., such as an extension of the life of the TIF district) to help the districts remain solvent. Although we have just encountered one of the worst economic periods in decades, some legislators believe these TIF districts would not be struggling if communities were more conservative with their economic projections greater taxpayer protections were in place.
The committee will consist of 10-15 people representing developers, local governments, school districts, technical colleges, joint review boards, and businesses that use TIF. The group will meet 5-6 times between June and November and will likely produce a final report recommending possible law changes for the legislature to consider. In the past, some reports from similar study committees have spurred significant law changes.
NAIOP-WI submitted names of several people to serve on the study committee and will monitor the activities of the committee to ensure that any proposed changes recommended by the committee will not adversely affect the ability of TIF to be used economic development tool at the local level.
WisDOT Proposes to Amend Rules Regulating Subdivisions Near State Highways
By Tom Larson
The Wisconsin Department of Transportation (WisDOT) is proposing to amend Wis. Admin. Code Ch. Trans. 233, which regulates subdivisions adjacent to state highways. WisDOT would like to amend the rule to address issues related to the regulation of improvements within the highway setback, which extends approximately 50 feet from the highway right of way.
Under current law, no improvements are allowed within the highways setback, but the term “improvement” is not defined. In 1999, WisDOT attempted to define “improvement” as part of a comprehensive rule revision, but did so in a manner that prohibited virtually anything of value (structures, driveways, parking lots, signage, etc.) from being placed in the setback. These rule changes were met with fierce opposition by the real estate industry, which maintained that WisDOT was effectively taking thousands of miles of private property without providing just compensation. After a long battle in both the legislature and the courts, the setback provision and other changes to the rule were struck down by a Wisconsin court for both procedural and substantive reasons.
Under WisDOT’s current proposal, a property owner would be allowed to place improvements within the setback provided the property owners assumes the financial risk of removing the improvements if a state highway needs to be expanded into the setback. WisDOT has indicated it will not move forward with the proposed changes to the rules unless the real estate industry and other stakeholders support the proposed changes.
NAIOP-WI has not yet taken a position on the proposed changes, but will studying the proposal in greater detail over the next several months to better understand the impacts on the commercial real estate development industry.