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2017 - 2018 LEGISLATURE
November 30, 2017 - Offered by Representative R. Brooks.
AB387-ASA1,1,2 1An Act to amend 70.03 (1) and 70.32 (1); and to create 70.32 (1b) of the statutes;
2relating to: property tax assessments regarding leased property.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB387-ASA1,1 3Section 1. 70.03 (1) of the statutes is amended to read:
AB387-ASA1,2,54 70.03 (1) In chs. 70 to 76, 78, and 79, “real property," “real estate," and “land"
5include not only the land itself but all buildings and , fixtures, improvements thereon,
6and all fixtures and, leases, rights , and privileges appertaining thereto, including
7assets that cannot be taxed separately as real property, but are inextricably
8intertwined with the real property, enable the real property to achieve its highest and
9best use, and are transferable to future owners,
except as provided in sub. (2) and
10except that for the purpose of time-share property, as defined in s. 707.02 (32), real
11property does not include recurrent exclusive use and occupancy on a periodic basis

1or other rights, including, but not limited to, membership rights, vacation services,
2and club memberships. In this subsection, “lease” means a right in real estate that
3is related primarily to the property and not to the labor, skill, or business acumen of
4the property owner or tenant. In this subsection, “highest and best use” has the
5meaning given in s. 70.32 (1).
AB387-ASA1,2 6Section 2. 70.32 (1) of the statutes is amended to read:
AB387-ASA1,3,27 70.32 (1) Real property shall be valued by the assessor in the manner specified
8in the Wisconsin property assessment manual provided under s. 73.03 (2a) at its
9highest and best use
from actual view or from the best information that the assessor
10can practicably obtain, at the full value which could ordinarily be obtained therefor
11at private sale. In determining the value, the assessor shall consider recent
12arm's-length sales of the property to be assessed if according to professionally
13acceptable appraisal practices those sales conform to recent arm's-length sales of
14reasonably comparable property; recent arm's-length sales of reasonably
15comparable property; and all factors that, according to professionally acceptable
16appraisal practices, affect the value of the property to be assessed. In this subsection,
17“arm's-length sale" means a sale between a willing buyer and willing seller, neither
18being under compulsion to buy or sell and each being familiar with the attributes of
19the property sold. In this subsection, “highest and best use" means the specific
20current use of the property or a higher use for which the property may be used as of
21the current assessment date, if the property is marketable for that use and the use
22is legally permissible, physically possible, not highly speculative, and financially
23feasible and provides the highest net return. When the current use of a property is
24the highest and best use of that property, value in the current use equals full market

1value. In this subsection, “legally permissible” does not include a conditional use
2that has not been granted as of the assessment date.
AB387-ASA1,3 3Section 3 . 70.32 (1b) of the statutes is created to read:
AB387-ASA1,3,164 70.32 (1b) In determining the value of real property under sub. (1), the assessor
5shall consider, as part of the valuation under sub. (1), any lease provisions and actual
6rent pertaining to a property and affecting its value, including the lease provisions
7and rent associated with a sale and leaseback of the property, if all such lease
8provisions and rent are the result of an arm's-length transaction involving persons
9who are not related, as provided under section 267 of the Internal Revenue Code for
10the year of the transaction. The assessor shall reconcile the results of such
11consideration with the professionally acceptable appraisal practices regarding
12reasonably comparable sales, the cost approach, and other methods specified in the
13Wisconsin property assessment manual provided under s. 73.03 (2a). In this
14subsection, an “arm's-length transaction" means an agreement between willing
15parties, neither being under compulsion to act and each being familiar with the
16attributes of the property.
AB387-ASA1,4 17Section 4. Initial applicability.
AB387-ASA1,3,1818 (1) This act first applies to the property tax assessments as of January 1, 2018.