Tax Incremental Finance (TIF) - Extensions

Sec. 66.1105, Wis. Stats.

For more information, review the TIF Extensions web page.

1. What extension types are available for Tax Incremental Districts (TIDs)?


2. To extend the life of a TID, is the municipality required to complete the amendment process?


3. When extending a TID's life, what documents must a municipality provide to the Wisconsin Department of Revenue (DOR)?


4. When a municipality adopts an extension resolution to change the maximum life, does this change the expenditure period?


5. For the Standard or Technical College Extension, is the Joint Review Board (JRB) the only body that needs to approve the extension?


6. Can a municipality use a Standard Extension to lengthen the life of an industrial TID created between 1995 and 2004?


7. Can a municipality request a Technical College Extension for a TID created before 2014 if it added project costs after 2014?


8. Is the municipality required to inform the JRB when it adopts an Affordable Housing Resolution to extend the TID an additional year?


9. When can a municipality request the Affordable Housing Extension?


10. Can a municipality adopt all three extension resolutions at the same time?


11. Does a municipality considering the standard and technical college extensions have to adopt both at the same time (before the maximum life)?


12. Is the JRB required to approve a Technical College extension for three years or can it approve the extension for one or two years?


13. Is a municipality limited to using the affordable housing funds within the TID boundary?


14. What is affordable housing?


15. Can a municipality consider additional restrictions on the housing? For example, can a municipality require housing costs less than the average household income?


16. Does DOR have a list of eligible affordable housing costs?


17. Is a municipality required to use the affordable housing funds within one year?


18. Can a municipality extending a TID for affordable housing use the TID's final shared revenue payments (exempt computer or personal property aid) for affordable housing?


19. Can a municipality extending a TID for affordable housing use more than one year of increment for affordable housing? Can the municipality use the entire surplus in the TID fund for affordable housing?


20. Can a municipality extending a TID for affordable housing use a portion of the final increment to pay off costs and the remainder for affordable housing?


21. Is a TID eligible for the Affordable Housing Extension if its life was extended for other reasons (ex: declared distressed, donor to distressed, granted a Standard Extension or Technical College Extension)?


22. Can a municipality adopt one resolution that includes both an Affordable Housing Extension and the TID termination?


23. How does the municipality identify the affordable housing funds on the TID Final Accounting Report (Form PE-110)?


24. Does DOR have a list of TIDs that were extended?

1. What extension types are available for Tax Incremental Districts (TIDs)?
   
   There are three types of extensions: Standard, Technical College, and Affordable Housing. Each extension has different requirements and exclusions.
   1. Standard – allows an extension (three or four years from the TID's maximum life, depending on TID type) if existing tax increments will not pay project costs within the TID maximum life
   2. Technical College – allows a three-year extension to the TID's maximum life, if tax increments were negatively impacted by 2013 Act 145. The Act increased state aid to technical colleges and may have caused a decrease in tax increment revenue for some TIDs.
   3. Affordable Housing – allows an extension, up to one year from the resolution date, if the municipality uses the final year's increment to benefit affordable housing
   
   For details on each extension type, review the TID Extension Types matrix.
   


2. To extend the life of a TID, is the municipality required to complete the amendment process?
   
   No. The municipality is not required to complete the Wisconsin Department of Revenue (DOR) amendment forms or provide DOR an updated project plan. However, a municipality must document that the TID needs extra time to pay off existing debt or the TID has paid all its project costs and would like one additional year for affordable housing. The municipality must provide DOR an approved resolution for each extension type.
   


3. When extending a TID's life, what documents must a municipality provide to the Wisconsin Department of Revenue (DOR)?
   
   When the extension resolution is adopted, the municipality must email a scanned copy of the resolution to tif@wisconsin.gov. DOR then extends the TID life.
   


4. When a municipality adopts an extension resolution to change the maximum life, does this change the expenditure period?
   
   No. An extension does not change the expenditure period. The expenditure period is five years shorter than the maximum life without the extension. For more information, see Municipal Expenditures and Debt Common Question #2.
   


5. For the Standard or Technical College Extension, is the Joint Review Board (JRB) the only body that needs to approve the extension?
   
   Yes. The municipality must either present the JRB with documents showing the TID cannot repay project costs within its maximum life or provide the JRB with an independent audit. The JRB must adopt a resolution approving the extension.
   


6. Can a municipality use a Standard Extension to lengthen the life of an industrial TID created between 1995 and 2004?
   
   No. The law has no Standard Extension for industrial TIDs created between 1995 and 2004. A municipality could consider requesting the Technical College Extension if it needs more time to pay off a TID's existing debt. Other TID types not eligible for the Standard Extension are listed in the TID Extension Types matrix.
   


7. Can a municipality request a Technical College Extension for a TID created before 2014 if it added project costs after 2014?
   
   Yes. If the TID was created before October 1, 2014, a municipality can request the 3-year Technical College Extension regardless of when the project costs were incurred or updated.
   


8. Is the municipality required to inform the JRB when it adopts an Affordable Housing Resolution to extend the TID an additional year?
   
   No. The law does not require the municipality to notify the JRB; however, it would be beneficial for the municipality to inform the JRB of the Affordable Housing Extension.
   


9. When can a municipality request the Affordable Housing Extension?
   
   A municipality can adopt an Affordable Housing Extension Resolution after it pays all the TID project costs. The Affordable Housing extension resolution must state the year the final tax increment was (or will be) received and describe how the funds will be used for affordable housing. The resolution can extend the TID's life for up to one year from the resolution date.
   
   The municipality must adopt a separate termination resolution before receiving an additional year's increment. April 15 is the deadline for a municipality to terminate a TID and have it removed from the same year's tax roll. Review the Termination Timeframes table for additional details.
   


10. Can a municipality adopt all three extension resolutions at the same time?
    
    No. The Standard and Technical College Extension resolutions are designed to allow more time to pay existing costs and debt. These can be adopted at the same time; however, a municipality cannot adopt an Affordable Housing Extension resolution until all costs are paid.
    


11. Does a municipality considering the standard and technical college extensions have to adopt both at the same time (before the maximum life)?
    
    No. If the TID meets the criteria for both extension types, the municipality can adopt one of the extension resolutions and consider another before the end of the TID's extended life.
    


12. Is the JRB required to approve a Technical College extension for three years or can it approve the extension for one or two years?
    
    If the municipality provides an independent audit demonstrating the need for the extension, the JRB must approve the extension for three years.
    
    If the municipality does not provide an independent audit, the JRB can deny or approve the three year extension. When the JRB approves an extension of less than three years or denies the extension entirely, the municipality may complete an independent audit to show the full three years are needed.
    


13. Is a municipality limited to using the affordable housing funds within the TID boundary?
    
    No. The funds can be used anywhere in the municipality; however, at least 75% must be used for affordable housing and the remainder on housing in general.
    


14. What is affordable housing?
    
    State law defines "affordable housing" as housing that costs a household no more than 30% of the household's gross monthly income.
    
    Example: for a household earning $900 per month, housing must be $270 or less to be considered affordable.
    


15. Can a municipality consider additional restrictions on the housing? For example, can a municipality require housing costs less than the average household income?
    
    Yes, if the housing meets state law, the municipality can include additional requirements. A municipality should consult its attorney to confirm the proposed restrictions comply with state law.
    


16. Does DOR have a list of eligible affordable housing costs?
    
    No. Each municipality must identify its affordable housing needs and develop a plan. State law requires a municipality to use the funds for affordable housing and to describe how it will use the funds in its affordable housing extension resolution. The municipality should consult its attorney to determine whether the planned costs comply with state law.
    


17. Is a municipality required to use the affordable housing funds within one year?
    
    No. However, the municipality must remove the money from the TID fund to terminate the TID. The municipality should keep the funds separate for affordable housing use.
    


18. Can a municipality extending a TID for affordable housing use the TID's final shared revenue payments (exempt computer or personal property aid) for affordable housing?
    
    No. State law refers to using the final increment for affordable housing and does not mention using shared revenue payments for this purpose.


19. Can a municipality extending a TID for affordable housing use more than one year of increment for affordable housing? Can the municipality use the entire surplus in the TID fund for affordable housing?
    
    No. The municipality may only use the amount of the final tax increment for affordable housing.


20. Can a municipality extending a TID for affordable housing use a portion of the final increment to pay off costs and the remainder for affordable housing?
    
    Yes. The municipality must still follow all requirements for the affordable housing extension. The municipality must:
    • Use at least 75% of the amount set aside for affordable housing and the remaining 25% on housing in general
    • Adopt a resolution describing how it will use the funds and provide the resolution to DOR
    
    Example – TID's final tax increment is $250,000. The municipality:
    • Uses $50,000 to pay remaining TID project costs (ex: final audit costs)
    • Uses the remaining $200,000 for the affordable housing extension
      • 75% (or $150,000) must be used on affordable housing
      • 25% (or $50,000) may be used on housing in general


21. Is a TID eligible for the Affordable Housing Extension if its life was extended for other reasons (ex: declared distressed, donor to distressed, granted a Standard Extension or Technical College Extension)?
    
    Yes. A TID that extended its life for other reasons is eligible for the Affordable Housing Extension; however, only TIDs created under sec. 66.1105 Wis. Stats are eligible for the Affordable Housing Extension. Town TIDs (created under sec. 60.85 Wis. Stats.) and ER TIDs (created under sec. 66.1106 Wis. Stats.) are not eligible.


22. Can a municipality adopt one resolution that includes both an Affordable Housing Extension and the TID termination?
    
    No. A municipality must complete separate resolutions. The Affordable Housing Extension Resolution must state the length of the extension, not to exceed 12 months from the date of the resolution. Before the Affordable Housing Extension period ends, the municipality must adopt a separate termination resolution. The termination resolution formally ends the TID.


23. How does the municipality identify the affordable housing funds on the TID Final Accounting Report (Form PE-110)?
    
    The municipality can do either of the following:
    • Include the amounts in the appropriate category (ex: capital expenditures) if the municipality uses the funds before the TID terminates
    • Use "Transfers to other funds" or "Other expenditures" category if the municipality moves the funds to a separate account, for later use, after the TID terminates


24. Does DOR have a list of TIDs that were extended?
    
    The Active TIDs report includes a column for the Life Extended date. Any TID with an extension shows a date in this column, which is the end of the TID's extension period.