In many States, TIF statutes provide local governments with the authority to use tax increment to pay for environmental remediation costs. In Wisconsin, however, to finance redevelopment projects for parcels requiring environmental cleanup, local governments can rely on either the traditional TIF Statute (66.1105) or the Environmental Remediation TIF (ERTIF) Statute (66.1106).
TIF districts established under the ERTIF Statute differ from other TIF districts in Wisconsin in several ways, including:
- ERTIF districts can only be established on environmentally contaminated parcels while traditional TIF districts can include more generally blighted areas;
- An ERTIF district can be established without a public hearing, however, a traditional TIF district requires a public hearing at least 14 days before the resolution establishing the TIF district is adopted;
- Once an ERTIF district is established, the district boundaries can not be amended, however, the boundaries of a traditional TIF district can be amended up to 4 times; and
- Project expenditures in an ERTIF district can be made no later than 15 years after the base is certified while expenditures in a traditional TIF district can only be made for up to 5 years.
In November 2009, the Wisconsin ERTIF Statute was amended by the State legislature, allowing local governments to allocate environmental remediation tax increment from one ERTIF district to another ERTIF district provided that both ERTIF districts are within the same municipality or county and the donor ERTIF district first repays all eligible costs within the donor’s district.
By amending the ERTIF Statute, the Wisconsin legislature strengthened a municipality’s ability to remediate or cause the remediation of environmentally contaminated land. Local governments have already started to implement this amended legislation. For example, the City of Cudahy created a new ERTIF district in April 2010 and approved plans to reallocate tax increment from a separate ERTIF district in the City in which all environmental remediation costs had been repaid. This amended legislation enabled the City to more easily provide remediation funds to a private developer who subsequently acquired this contaminated land and intends to develop a retail project on the property.