Tax Incremental Finance (TIF) - Overlaps

Sec. 66.1105, Wis. Stats.

1. What is an overlap?


2. How are TID values affected by overlapping?


3. Where can the municipality view the TID's frozen overlap value?


4. Does the Wisconsin Department of Revenue (DOR) use the parcel overlap value in determining the 12 percent value limit?


5. Are the parcels in the overlapped area coded to both the new and old TID number on the assessment/tax roll?


6. Will the frozen overlap value of an overlapped TID be deleted if the overlapping TID is terminated?


7. To subtract overlapped parcels, which TID does a municipality amend? The older TID or the newer TID?


8. Will the frozen overlap value of an overlapped TID be reduced if overlapped parcels are subtracted from the overlapping TID?


9. Can a distressed or severely distressed TID be overlapped by a newly created TID?


10. Can an Environmental Remediation (ER) TID created under sec. 66.1105, Wis. Stats., overlap another TID created under the same section? Or another ER TID created under sec. 66.1106, Wis. Stats.?

1. What is an overlap?
   
   An overlap is when the boundary of one Tax Incremental District (TID) covers another existing TID's boundaries. For more information, review state law (sec. 66.1105(10), Wis. Stats.).


2. How are TID values affected by overlapping?
   
   The newest overlapping TID includes the current value in its TID base and will receive future increment value.
   
   The older overlapped TID includes the increment value it received before the overlap, but no longer receives any future increment. The increment value it received before the new overlapping TID was created becomes a 'frozen overlap value.' The Wisconsin Department of Revenue (DOR) establishes the frozen overlap value and includes it in the older TID's total current year value until the TID terminates.


3. Where can the municipality view the TID's frozen overlap value?
   
   The municipality can view the value of the frozen overlap on the TID Statement of Changes report.


4. Does the Wisconsin Department of Revenue (DOR) use the parcel overlap value in determining the 12 percent value limit?
   
   No. Under state law (sec. 66.1105(10)(c), Wis. Stats.), DOR excludes this value from the new TID when determining compliance with the 12 percent limit. The parcel value is already included in the value increment for the existing TID.


5. Are the parcels in the overlapped area coded to both the new and old TID number on the assessment/tax roll?
   
   No. On the assessment/tax roll, the overlapped (older) TID number is removed from the parcel and the overlapping (newer) TID number is added to the parcel. A parcel may only have one TID number on the assessment/tax roll.


6. Will the frozen overlap value of an overlapped TID be deleted if the overlapping TID is terminated?
   
   No. Once a frozen overlap value exists for an overlapped TID, the frozen overlap value is included in the current year TID value until the overlapped TID terminates. The frozen overlap value for the overlapped TID does not change even if the overlapping TID terminates.


7. To subtract overlapped parcels, which TID does a municipality amend? The older TID or the newer TID?
   
   To subtract overlapped parcels, the municipality must subtract the parcels from the TID currently shown on the assessment/tax roll. Generally, this is the newer TID.


8. Will the frozen overlap value of an overlapped TID be reduced if overlapped parcels are subtracted from the overlapping TID?
   
   No. Once a frozen overlap value exists for an overlapped TID, the frozen overlap value is included in the current year TID value until the overlapped TID terminates. The frozen overlap value does not change even if the overlapped parcels are subtracted from the overlapping TID.


9. Can a distressed or severely distressed TID be overlapped by a newly created TID?
   
   No. A newly created TID or an active TID that is adding parcels may not overlap a distressed or severely distressed TID.


10. Can an Environmental Remediation (ER) TID created under sec. 66.1105, Wis. Stats., overlap another TID created under the same section? Or another ER TID created under sec. 66.1106, Wis. Stats.?
    
    Yes. An ER TID created under sec. 66.1105, Wis. Stats., can overlap another TID created under the same section or an ER TID created under sec. 66.1106, Wis. Stats.