Tax Incremental Finance (TIF) - Allocation Amendments

Secs. 66.1105 and 66.1106, Wis. Stats.

For more information, review the TIF Project Plan and/or Allocation Amendments web page.

1. Can a municipality allocate increment between its Tax Incremental Districts (TIDs) with different overlying taxing jurisdictions?
   
   
2. Which TID project plan should a municipality amend to allocate increment from one TID to another, the Donor TID or Recipient TID?
   
   
3. If a municipality amends both TID 1 and TID 2 to share with TID 3, how many project plans are needed?
   
   
4. After a municipality completes an allocation amendment, can the municipality decide not to allocate the funds?
   
   
5. If a Donor TID paid off all its project costs, can it stay open solely to allocate to another TID?
   
   
6. After a TID becomes a donor, can the municipality amend the project plan to add new project costs?
   
   
7. When can an allocation transfer take place?
   
   
8. Are allocations made to other TIDs considered a project cost?
   
   
9. Can allocations be made after the expenditure period?
   
   
10. What does project costs for "low-cost housing" mean for a mixed-use or industrial type recipient?
    
    
11. Which TID type can allocate to another?
    
    

1. Can a municipality allocate increment between its Tax Incremental Districts (TIDs) with different overlying taxing jurisdictions?
   
   

   No. State law (sec. 66.1105(6)(f)(1)(a), Wis. Stats.) requires that both Donor and Recipient TIDs have the same overlying taxing jurisdictions.



2. Which TID project plan should a municipality amend to allocate increment from one TID to another, the Donor TID or Recipient TID?
   
   

   A municipality must amend the Donor district's project plan. For details on how to complete an allocation amendment, see Municipal TIF Project Plan and/or Allocation Amendments.



3. If a municipality amends both TID 1 and TID 2 to share with TID 3, how many project plans are needed?
   
   

   If the municipality is amending TID 1 and TID 2 to become Donor TIDs, it must create two project plans. One for each Donor (1 and 2). The economic feasibility section of the project plan must show that the Donor TID has extra increment to share.



4. After a municipality completes an allocation amendment, can the municipality decide not to allocate the funds?
   
   

   After a project plan is amended and resolutions adopted to allocate funds, the municipality can (for whatever reason) choose not to allocate. There is no additional action required if this occurs.



5. If a Donor TID paid off all its project costs, can it stay open solely to allocate to another TID?
   
   

   Yes. If the municipal allocation amendment resolution was approved before the expenditure period ended and the Donor TID has not reached its maximum life.



6. After a TID becomes a donor, can the municipality amend the project plan to add new project costs?
   
   

   Yes. If the TID has not reached the end of its expenditure period.



7. When can an allocation transfer take place?
   
   

   If funds are available from the Donor TID, the allocation transfer can occur after the municipal resolution is adopted and the JRB approves the allocation.



8. Are allocations made to other TIDs considered a project cost?
   
   

   Yes. The Donor TID records the allocation to another TID as an expenditure. The Recipient TID must use the allocated money to pay eligible project costs and track the allocation from another TID as revenue.



9. Can allocations be made after the expenditure period?
   
   

   Yes. However, the municipality must adopt the allocation amendment resolution before the Donor TID's expenditure period ends. The municipality can allocate funds to another TID after the Donor TID's expenditure period until it reaches its maximum life.



10. What does project costs for "low-cost housing" mean for a mixed-use or industrial type recipient?
    
    

    Project plans for a mixed-use or industrial type TID must include costs to create, provide, or rehabilitate low-cost housing to become a recipient of increment funds from a donor TID.

    State law does not define the term "low cost housing." The municipality should consult its attorney to determine if the recipient TID's costs meet the requirement.

    The municipality is responsible for including an explanation of how the donor TID and recipient TID's project plans meet the requirement in sec. 66.1105(6)(f)2a, Wis. Stats. The Wisconsin Department of Revenue (DOR) does not review or approve project costs. However, DOR confirms the recipient TID meets the requirements to become a recipient TID.



11. Which TID type can allocate to another?
    
    See the TID Allocation Fact Sheet​.