What is the difference between a loan and a grant?
Cash grant — when the municipality provides funds to an owner, developer, or lessee of land using Tax Incremental District (TID) increments and the funds are not paid back.
The project plan may also refer to a cash grant as a "developer incentive."
Loan versus a grant:
- Loan — must be paid back in full
- Grant — paid for by increments from property taxes; not required to be paid back
What are the requirements for a municipality to provide a cash grant using increment funds?
- Municipality must have a signed development agreement to provide cash grants to property owners, lessees or developers
- Public hearing notice must indicate the TID costs include cash grants
Cash grants are not allowed for town TIDs under
sec. 60.85, Wis. Stats.
Is the municipality required to send a copy of the developer's agreement to the Wisconsin Department of Revenue (DOR)?
No. The municipality does not need to send the agreement to DOR. However, the law states a copy of the developer's agreement must be sent to the Joint Review Board (JRB) or, if the TID is terminated, saved by the municipality in the official TID records.
When must the public hearing notice include the cash grant reference? Is an amount required?
If the proposed project plan includes cash grants, the municipality must state this information in the published hearing notice under state law (sec. 66.1105(4)(e), Wis. Stats.). The hearing notice does not need to include the purpose of the cash grant or list the exact amount.
A municipality included cash grants in the original project plan. The municipality is now amending the plan. Does the municipality need to repeat the cash grant reference if no new cash grants are being added to the plan?
State law does not require the cash grant wording in this situation. However, continuing to include the cash grants information in public hearing notices provides consistent information to taxpayers.
Who makes the decision on what to include in a developer's agreement?
The municipality and its attorney decide what information to include in the developer's agreement.
FOR QUESTIONS OR COMMENTS CONTACT:
WISCONSIN DEPARTMENT OF REVENUE
Office of Technical and Assessment Services
PO Box 8971
Madison, WI 53708-8971
Phone: (608) 266-7750
Email additional questions to firstname.lastname@example.org