End of Session Recap: 40 Legislative Priorities Signed Into Law
By Tom Larson, NAIOP-WI Lobbyist
On March 15, 2015, the Wisconsin Legislature adjourned and ended the 2015-16 legislative session, which was one of NAIOP-WI’s most productive legislative sessions ever. In the end, NAIOP-WI passed 40 legislative priorities on a variety of issues affecting the commercial real estate industry.
In January of 2015, the NAIOP-WI board of directors approved a comprehensive and ambitious list of legislative priorities for the 2015-16 legislative session. The list consisted of numerous legislative priorities designed to improve various aspects of Wisconsin’s commercial real estate industry and achieve a number of goals such as: (1) removing hurdles to successful real estate transactions; (2) making commercial property ownership more affordable; (3) revitalizing our downtowns; (4) making ownership of rental property less onerous; (5) protecting private property rights; and (6) removing regulatory barriers to commercial development.
Throughout the legislative session, NAIOP-WI has worked closely with Governor Walker’s administration and legislators on both sides of the aisle to pass our legislative priorities. From preserving Wisconsin’s historic rehabilitation tax credit to protecting property rights to improving wetland regulations, state lawmakers have shown tremendous support for issues that are important to the commercial real estate industry.
Summary of the Legislative Priorities Passed Into Law
Removing Hurdles To Successful Real Estate Transactions
1. Time of sale requirements (2015 Wis. Act 55) — Prohibits local time of sale requirements that would limit or impede a property owner’s right to transfer property.
2. Time of sale loophole (2015 Wis. Act 176) – Closes a loophole in the time of sale law by expanding the time of sale restrictions to buyers and the time of occupancy.
3. Right to alienate any interest in property (2015 Wis. Act XXX) — Prohibits local governments from prohibiting or unreasonably restricting the sale or transfer of title to any interest in property.
Making Commercial Property Ownership More Affordable
1. Property tax reduction (2015 Wis. Act 55) — Further reduces property tax bills by (a) continuing to allocate approx. $200M/year in state general purpose revenues to help fund technical colleges thereby reducing property taxes by the same amount (a $131 reduction for the avg. homeowner over the biennium), and (b) modifying the school levy tax credit, resulting in an additional property tax reduction over the biennium (a $3 reduction for the avg. homeowner over the biennium).
2. Property tax freeze/levy limits (2015 Wis. Act 55) — Renews the cap placed on local levies for the next two years, but allows increases under limited circumstances.
Revitalizing Our Downtowns
1. Milwaukee Bucks stadium funding (2015 Wis. Act 60) — Provides partial state funding for new Milwaukee Bucks arena, which will generate positive tax revenues for the state and serve as a catalyst for economic development in Milwaukee.
2. Historic rehabilitation tax credit (2015 Wis. Act 55) — Maintains the 20% state tax credit with no overall caps or per project caps for historic rehabilitation projects which have generated approximately 2,800 jobs and $353 million in economic development activity since the tax credit was increased from 5% to 20% in 2013.
Making Ownership of Rental Property Less Onerous
1. One-strike evictions (2015 Wis. Act XXX) – Allows landlords to terminate a tenancy for criminal or drug-related activity for “market rate” rental housing (similar to Section 8 housing).
2. Right to cure (2015 Wis. Act 258) – Allows landlords to opt for a 5-day right to cure instead of just 14-day eviction or nothing on month-to-month leases.
3. Squatters (2015 Wis. Act 258) – Builds a framework for quick evictions/and disposal of personal property left behind.
4. Technical fixes for new towing rules (2015 Wis. Act XXX) – Modifies rules as they relate to stolen vehicles and towing fee schedule to apply only when there is no ticket issued.
5. Municipal utilities (2015 Wis. Act 258) – Clarifies that municipal utilities have unilateral authority (authorization from PSC is not required) to not offer deferred payment agreements.
6. Landlord registration/fees (2015 Wis. Act 258) – Authorizes municipalities to inspect properties based only on a complaint from a tenant or member of the public, an inspection based on an exterior inspection by a building inspector, or an inspection required by state or federal law and charge a uniform fee.
Protecting Private Property Rights
1. Ambiguities in local ordinances (2015 Wis. Act XXX) – Requires courts to interpret any ambiguities in local ordinances in favor of the free use of property.
2. Standard of review (2015 Wis. Act XXX) – Requires courts to give no deference to state agency decisions of law that restrict a property owner’s free use of property.
3. Supermajority vote to downzone property (2015 Wis. Act XXX) – Requires a supermajority vote by local units of government to downzone a property.
4. OHWM determinations (2015 Wis. Act XXX) – Allows property owners to rely on surveys and plats to determine OHWM for purposes of measuring building setbacks.
5. Conditional use permits (2015 Wis. Act XXX) – Clarifies that a conditional use permit is not required to be consistent with a local comprehensive plan.
6. Nonconforming structures (2015 Wis. Act 55) – Allows property owners to repair, maintain, improve and reconstruct nonconforming principal and accessory structures in shoreland areas.
7. Substandard shoreland lots (2015 Wis. Act 55) – Protects the ability of property owners to use and develop nonconforming lots in shoreland areas.
8. Changes to lake water levels (2015 Wis. Act XXX) — Requires DNR to consider impact on businesses and property values prior to adjusting lake water levels controlled by a dam.
9. Property rights impact statement (2015 Wis. Act XXX) – Requires administrative rules to provide an analysis of the ways and the extent to which the proposed rule would place any limitations on the free use of property, including the alternatives to the proposed rule that would minimize any such limitations.
10. Adverse possession limitations (2015 Wis. Act 200) – Allows property owners to prevent others from acquiring title to their property through adverse possession by establishing a new procedure whereby a property owner may interrupt and restart the clock on an adverse possession claim by filing an affidavit of interruption with the register of deeds and notifying potential adverse possessors.
11. Adverse possession by government (2015 Wis. Act 219) — Clarifies that legal title to government-owned property cannot be acquired by private citizens through adverse possession, and that legal title to private property cannot be acquired by government through adverse possession.
12. ASNRI waters (2015 Wis. Act XXX) – Provides greater certainty for property owners regarding Ch. 30 regulations (activities in/near navigable waterways), by limiting the scope of waters designated as “Areas of Special Natural Resource Interest” to include only specific portions of waters that contain critical habitat for endangered or threatened species.
13. Direct notice for zoning changes (2015 Wis. Act XXX) – Requires local governments to provide annual notice informing property owners how to receive direct notice to property owners of any proposed change to zoning regulations that would change the allowable use or density of a property.
14. Landmark ordinance/historic designation (2015 Wis. Act 258) – Allows property owners to appeal historic landmark designations to local elected governing bodies.
15. Substitution of ALJs (2015 Wis. Act XXX) – Allows a property owner to request one substitution of an administrative law judge overseeing a contested case hearing involving a contract, permit, or other approval issued or denied by the DNR or DATCP.
Removing Regulatory Barriers to Commercial Development
1. Wetlands (2015 Wis. Act XXX) – Makes wetland mitigation more viable by limiting the practicable alternatives analysis to alternatives that exist onsite for smaller projects and for wetland disturbances up to 2 acres.
2. Development moratoria for counties (2015 Wis. Act XXX) – Prohibits counties from enacting development moratoria.
3. Municipal liquor licenses (2015 Wis. Act XXX) — Modifies the quotas on Class B liquor licenses by creating an exception for large economic development districts ($20M increase in property tax base) and allowing for regional sharing of licenses with neighboring communities (w/in 2 miles).
4. Nonpoint water pollution (2015 Wis. Act XXX) – Allows stormwater management ponds to be placed in waterways to achieve performance standards for nonpoint water pollution. Also, requires the DNR to give credit for any pollutant reduction achieved by the placement of such ponds.
5. Stormwater discharges into wetlands (2015 Wis. Act XXX) — Allows for stormwater discharges that are the result of maintenance of a roadside ditch or storm water detention basis into a wetland without a permit.
6. TIF technical changes (2015 Wis. Act 256) — Makes a number of technical changes to Wisconsin’s tax increment financing (TIF) law including specifying that the requirement to maintain industrial zoning applies only to Industrial tax increment districts (TIDs), and not to mixed-use TIDs, and excluding the value of any TID increments from the levy limits upon closure of a TID.
7. Joint review boards (2015 Wis. Act 257) – Makes a JRB a permanent standing committee as long as the TID is in existence, and requires municipalities to file more detailed performance reports with JRB and DOR.
8. Change in TID cash flows (2015 Wis. Act 254) – If legislation or administrative action changes TID cash flow, municipalities are allowed to amend a TID’s boundaries at any time, request redetermination of a TID’s base value, or request an extension of a TID’s life.
9. Vacant land test (2015 Wis. Act 255) — Eliminates the 25% vacant land test, which prohibits inclusion of an area of vacant land comprising more than 25% of the total area of the TID land in a blight or rehab district.
10. Artificial waterbodies (2015 Wis. Act XXX) – Exempts from Ch. 30 regulations artificial water bodies that are not hydrologically connected to a natural navigable waterway. Also, allows dredging without a permit in artificial water bodies that do not connect to a navigable waterway.
11. Private septic systems (2015 Wis. Act 55) – Maintains DSPS regulatory authority over private on-site wastewater treatment systems, rather than transferring such authority to the DNR.
12. Authority of towns to regulate in shoreland areas (2015 Wis. Act 41) — Clarifies that towns may have general zoning authority within shoreland areas if the county does not have general zoning authority.