Amendment ASA1-AB521

LRBs0199/1

EKL:skw&cjs

2019 - 2020 LEGISLATURE

ASSEMBLY SUBSTITUTE AMENDMENT 1, TO ASSEMBLY BILL 521

March 4, 2020 - Offered by Representative Goyke.

AB521-ASA1,1,6 An Act to renumber and amend 77.70; to amend 20.835 (4) (g), 74.09 (3) (b) 7., 77.76 (3), 79.05 (2) (c), 79.10 (6m) (a) and 79.10 (7m) (cm) 1. a. and b. and 2. a. and b.; and to create 20.835 (3) (g), 74.09 (3) (b) 6p., 77.70 (2), 79.10 (2) (c), 79.10 (5f), 79.10 (7m) (bf), 79.10 (9) (bf), 79.10 (9) (c) 4. and 79.10 (11) (e) of the statutes; relating to: authorizing an additional county sales tax, creating additional property tax credits, and making an appropriation.

Analysis by the Legislative Reference Bureau

Under current law, a county may impose a sales and use tax at the rate of 0.5 percent of the sales price of tangible personal property, goods, and services sold or used in the county. The tax may be imposed only for the purpose of reducing the property tax levy.

Under this bill, with the approval of the electors in the county at a referendum, Milwaukee County may impose an additional sales and use tax at the rate of 1 percent of the sales price of tangible personal property, goods, and services sold or used in the county. The bill requires that the revenue from the additional tax be used as follows:

1. Twelve and one-half percent of the revenue must be used to provide a credit against the county property tax liability of each property owner in Milwaukee County. The credit is calculated by multiplying the county tax rate by the lesser of the property's estimated fair market value or a credit base amount determined by the Department of Revenue. DOR determines the credit base amount by calculating, to the nearest $100, the estimated fair market value necessary to distribute 12.5 percent of the tax revenue as property tax credits.

2. Twelve and one-half percent of the revenue must be used to provide a credit against the municipal property tax liability of each property owner in a municipality in Milwaukee County. The credit is calculated by multiplying the municipal tax rate by the lesser of the property's estimated fair market value or the credit base amount, determined by DOR in the same manner as above.

3. Seven percent of the revenue must be used for public health infrastructure projects.

4. Thirty-four percent of the revenue must be used by Milwaukee County to pay its operational and capital expenses.

5. Thirty-four percent of the revenue must be distributed to each municipality in Milwaukee County and used to pay their operational and capital expenses. The distribution to each municipality is based on the ratio of its population to the county's population.

Under the bill, the expenditure by a municipality of the distributed tax revenue will not affect the municipality's payment under the expenditure restraint program. The bill also provides that the revenue and expenditures will not impact any local government funding formula.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB521-ASA1,1 Section 1. 20.835 (3) (g) of the statutes is created to read:

AB521-ASA1,2,3 20.835 (3) (g) Additional property tax relief credits. All moneys received from the appropriation under s. 20.835 (4) (g), to make the payments under s. 79.10 (5f).

AB521-ASA1,2 Section 2. 20.835 (4) (g) of the statutes is amended to read:

AB521-ASA1,3,2 20.835 (4) (g) County taxes. All moneys received from the taxes imposed under s. 77.70 for distribution to the counties that enact an ordinance imposing taxes under that section and for interest payments on refunds under s. 77.76 (3), except that 1.75 percent of those the tax revenues collected under that section s. 77.70 (1) shall be credited to the appropriation account under s. 20.566 (1) (g) and 25 percent of the tax revenues collected under s. 77.70 (2) shall be credited to the appropriation account under s. 20.835 (3) (g).

AB521-ASA1,3 Section 3 . 74.09 (3) (b) 6p. of the statutes is created to read:

AB521-ASA1,3,6 74.09 (3) (b) 6p. The amount of credits under s. 77.70 (2) (b) 1. and 2. allocable to the property for the previous year and the current year, and the percentage change between those years.

AB521-ASA1,4 Section 4 . 74.09 (3) (b) 7. of the statutes is amended to read:

AB521-ASA1,3,10 74.09 (3) (b) 7. The amount obtained by subtracting the amounts under subds. 6. and, 6m., and 6p. from the amount under subd. 5., for the previous year and the current year, and the percentage change in that amount between those years.

AB521-ASA1,5 Section 5 . 77.70 of the statutes is renumbered 77.70 (1) and amended to read:

AB521-ASA1,4,3 77.70 (1) Any county desiring to may impose county sales and use taxes under this subchapter may do so by the adoption of an ordinance, stating its purpose and referring to this subchapter. The rate of the tax imposed under this section subsection is 0.5 percent of the sales price or purchase price. Except as provided in sub. (2) (b) and s. 66.0621 (3m), the county sales and use taxes may be imposed only for the purpose of directly reducing the property tax levy and only in their entirety as provided in this subchapter. That ordinance shall be effective on the first day of January, the first day of April, the first day of July or the first day of October January 1, April 1, July 1, or October 1. A certified copy of that ordinance shall be delivered to the secretary of revenue at least 120 days prior to its effective date. The repeal of any such ordinance shall be effective on December 31. A certified copy of a repeal ordinance shall be delivered to the secretary of revenue at least 120 days before the effective date of the repeal. Except as provided under s. 77.60 (9), the department of revenue may not issue any assessment nor or act on any claim for a refund or any claim for an adjustment under s. 77.585 after the end of the calendar year that is 4 years after the year in which the county has enacted a repeal ordinance under this section subsection.

AB521-ASA1,6 Section 6 . 77.70 (2) of the statutes is created to read:

AB521-ASA1,4,18 77.70 (2) (a) In addition to the taxes imposed under sub. (1), Milwaukee County may adopt an ordinance to impose sales and use taxes under this subchapter at the rate of 1 percent of the sales price or purchase price. The ordinance may not become effective until approved by the electors of the county at a referendum at the spring election or general election. An ordinance adopted under this paragraph shall be effective on January 1, April 1, July 1, or October 1, and a certified copy of the ordinance shall be delivered to the secretary of revenue at least 120 days prior to its effective date. The repeal of an ordinance shall be effective on December 31, and a certified copy of a repeal ordinance shall be delivered to the secretary of revenue at least 120 days prior to its effective date. Except as provided under s. 77.60 (9), the department of revenue may not issue an assessment or act on a claim for a refund or for an adjustment under s. 77.585 after the end of the calendar year that is 4 years after the year in which the county has enacted a repeal ordinance under this paragraph.

AB521-ASA1,4,20 (b) The revenue from the taxes imposed by Milwaukee County under par. (a) shall be used as follows:

AB521-ASA1,4,22 1. Twelve and one-half percent of the revenue shall be used to provide a credit against the county property tax liability of each property owner in the county.

AB521-ASA1,4,25 2. Twelve and one-half percent of the revenue shall be used to provide a credit against the municipal property tax liability of each property owner in a city, village, or town in the county.

AB521-ASA1,5,2 3. Seven percent of the revenue shall be used for public health infrastructure projects.

AB521-ASA1,5,10 4. From the revenue remaining after the application of subds. 1. to 3., the county shall use 50 percent to pay the county's operational and capital expenses and shall distribute 50 percent to the cities, villages, and towns in the county, and the cities, villages, and towns shall use the revenue to pay their operational and capital expenses. The county shall distribute to each city, village, and town an amount that bears the same ratio to the total amount distributed under this subdivision as the ratio of the population of the city, village, or town to the county's population, using the population estimates under s. 16.96.

AB521-ASA1,7 Section 7 . 77.76 (3) of the statutes is amended to read:

AB521-ASA1,6,10 77.76 (3) From the appropriation under s. 20.835 (4) (g) the department of revenue shall distribute 98.25 percent of the county taxes imposed under s. 77.70 (1) and 75 percent of the county taxes imposed under s. 77.70 (2) reported for each enacting county, minus the county portion of the retailers' discounts, to the county and shall indicate the taxes reported by each taxpayer, no later than 75 days following the last day of the calendar quarter in which such amounts were reported. In this subsection, the “county portion of the retailers' discount" is the amount determined by multiplying the total retailers' discount by a fraction the numerator of which is the gross county sales and use taxes payable and the denominator of which is the sum of the gross state and county sales and use taxes payable. The county taxes distributed shall be increased or decreased to reflect subsequent refunds, audit adjustments, and all other adjustments of the county taxes previously distributed. Interest paid on refunds of county sales and use taxes shall be paid from the appropriation under s. 20.835 (4) (g) at the rate paid by this state under s. 77.60 (1) (a). The Except as provided in s. 77.70 (2) (b), a county may retain the amount it receives or it may distribute all or a portion of the amount it receives to the towns, villages, cities, and school districts in the county. After receiving notice from the department of revenue, a county shall reimburse the department for the amount by which any refunds, including interest, of the county's sales and use taxes that the department pays or allows in a reporting period exceeds the amount of the county's sales and use taxes otherwise payable to the county under this subsection for the same or subsequent reporting period. Any county receiving a report under this subsection is subject to the duties of confidentiality to which the department of revenue is subject under s. 77.61 (5) and (6).

AB521-ASA1,8 Section 8 . 79.05 (2) (c) of the statutes, as affected by 2019 Wisconsin Act 19, is amended to read:

AB521-ASA1,7,7 79.05 (2) (c) Its municipal budget; exclusive of principal and interest on long-term debt and exclusive of revenue sharing payments under s. 66.0305, payments of premiums under s. 66.0137 (5) (c) 1. and 1m., recycling fee payments under s. 289.645, expenditures of grant payments under s. 16.297 (1m), unreimbursed expenses related to an emergency declared under s. 323.10, expenditures from moneys received pursuant to P.L. 111-5, expenditures from moneys received pursuant to s. 77.70 (2) (b) 2. to 4., and expenditures made pursuant to a purchasing agreement with a school district whereby the municipality makes purchases on behalf of the school district; for the year of the statement under s. 79.015 increased over its municipal budget as adjusted under sub. (6); exclusive of principal and interest on long-term debt and exclusive of revenue sharing payments under s. 66.0305, payments of premiums under s. 66.0137 (5) (c) 1. and 1m., recycling fee payments under s. 289.645, expenditures of grant payments under s. 16.297 (1m), unreimbursed expenses related to an emergency declared under s. 323.10, expenditures from moneys received pursuant to P.L. 111-5, expenditures from moneys received pursuant to s. 77.70 (2) (b) 2. to 4., and expenditures made pursuant to a purchasing agreement with a school district whereby the municipality makes purchases on behalf of the school district; for the year before that year by less than the sum of the inflation factor and the valuation factor, rounded to the nearest 0.10 percent.

AB521-ASA1,9 Section 9. 79.10 (2) (c) of the statutes is created to read:

AB521-ASA1,7,16 79.10 (2) (c) On or before November 20 of the year preceding the distribution under sub. (7m) (bf) or (cm), the department of revenue shall notify the Milwaukee County treasurer and the clerk of each city, village, and town in Milwaukee County of the estimated fair market values, as determined under sub. (11) (e) 1. and 2., used to calculate the credits under s. 77.70 (2) (b) 1. and 2. and of the amount to be distributed under sub. (7m) (bf) or (cm). The anticipated receipt of such distribution shall not be taken into consideration in determining the tax rate but shall be applied as tax credits.

AB521-ASA1,10 Section 10. 79.10 (5f) of the statutes is created to read:

AB521-ASA1,7,20 79.10 (5f) Additional property tax relief credits. Each city, village, and town in Milwaukee County shall receive, from the appropriation under s. 20.835 (3) (g), the following amounts:

AB521-ASA1,7,24 (a) In order to provide the credit under s. 77.70 (2) (b) 1., an amount determined by multiplying the county tax rate by the estimated fair market value, not exceeding the value determined under sub. (11) (e) 1., of every parcel of real property that is located in the city, village, or town.

AB521-ASA1,8,4 (b) In order to provide the credit under s. 77.70 (2) (b) 2., an amount determined by multiplying the municipal tax rate by the estimated fair market value, not exceeding the value determined under sub. (11) (e) 2., of every parcel of real property that is located in the city, village, or town.

AB521-ASA1,11 Section 11. 79.10 (6m) (a) of the statutes is amended to read:

AB521-ASA1,8,19 79.10 (6m) (a) Except as provided in pars. (b) and (c), if the department of administration or the department of revenue determines by October 1 of the year of any distribution under subs. (4), (5), (5f), and (5m) that there was an overpayment or underpayment made in that year's distribution by the department of administration to municipalities, as determined under subs. (4), (5), (5f), and (5m), because of an error by the department of administration, the department of revenue or any municipality, the overpayment or underpayment shall be corrected as provided in this paragraph. Any overpayment shall be corrected by reducing the subsequent year's distribution, as determined under subs. (4), (5), (5f), and (5m), by an amount equal to the amount of the overpayment. Any underpayment shall be corrected by increasing the subsequent year's distribution, as determined under subs. (4), (5), (5f), and (5m), by an amount equal to the amount of the underpayment. Corrections shall be made in the distributions to all municipalities affected by the error. Corrections shall be without interest.

AB521-ASA1,12 Section 12. 79.10 (7m) (bf) of the statutes is created to read:

AB521-ASA1,8,24 79.10 (7m) (bf) Additional property tax relief credits. 1. Except as provided in par. (cm), the amounts determined under sub. (5f) shall be distributed from the appropriation under s. 20.835 (3) (g) by the department of administration to Milwaukee County on the 4th Monday in July.

AB521-ASA1,9,5 2. Except as provided in par. (cm), the county treasurer shall settle for the amounts distributed on the 4th Monday in July under this paragraph with each municipality and taxing jurisdiction in the county not later than August 20. Failure to settle timely under this subdivision subjects the county treasurer to the penalties under s. 74.31.

AB521-ASA1,13 Section 13. 79.10 (7m) (cm) 1. a. and b. and 2. a. and b. of the statutes are amended to read:

AB521-ASA1,9,23 79.10 (7m) (cm) 1. a. If, in any year, the total of the amounts determined under subs. (4), (5), (5f), and (5m) for any municipality is $3,000,000 or more, the municipality, with the approval of the majority of the members of the municipality's governing body, may notify the department of administration to distribute the amounts directly to the municipality and the department of administration shall distribute the amounts at the time and in the manner provided under pars. (a) 1., (b) 1., (bf) 1., and (c) 1. Beginning in 2018, if the municipality approves the distribution under this subd. 1. a. by enacting an ordinance and provides a copy of the ordinance to the department of administration and the department of revenue, the department of administration shall distribute the amounts determined under subs. (4), (5), (5f), and (5m) to the municipality as provided under this subd. 1. a. for the year in which the municipality enacts the ordinance and in all subsequent years until the municipality notifies the department of administration and the department of revenue that the municipality has repealed the ordinance or until the total amounts under subs. (4), (5), (5f), and (5m) to be distributed to the municipality in a year is less than $3,000,000.

AB521-ASA1,9,25 b. The treasurer of the municipality shall settle for the amounts distributed under pars. (a) 1., (bf) 1., and (c) 1. on the 4th Monday in July with the appropriate county treasurer not later than August 15. Failure to settle timely under this subdivision subjects the treasurer of the municipality to the penalties under s. 74.31. On or before August 20, the county treasurer shall settle with each taxing jurisdiction, including towns, villages, and cities, except 1st class cities, in the county.

AB521-ASA1,10,9 2. a. The department of administration shall distribute the amounts determined under subs. (4), (5), (5f), and (5m) directly to any municipality that enacts an ordinance under s. 74.12 at the time and in the manner provided under pars. (a) 1., (b) 1., (bf) 1., and (c) 1.

AB521-ASA1,10,16 b. The treasurer of the municipality shall settle for the amounts distributed under pars. (a) 1., (bf) 1., and (c) 1. on the 4th Monday in July with the appropriate county treasurer not later than August 15. Failure to settle timely under this subdivision subjects the treasurer of the municipality to the penalties under s. 74.31. On or before August 20, the county treasurer shall settle with each taxing jurisdiction, including towns, villages, and cities, except 1st class cities, in the county.

AB521-ASA1,14 Section 14. 79.10 (9) (bf) of the statutes is created to read:

AB521-ASA1,10,22 79.10 (9) (bf) Additional property tax relief credits. 1. Except as provided in ss. 79.175 and 79.18, the credit under s. 77.70 (2) (b) 1. shall be allocated to every parcel of real property in an amount determined by multiplying the estimated fair market value of the property, not exceeding the value determined under sub. (11) (e) 1., by the county tax rate.

AB521-ASA1,11,2 2. Except as provided in ss. 79.175 and 79.18, the credit under s. 77.70 (2) (b) 2. shall be allocated to every parcel of real property in an amount determined by multiplying the estimated fair market value of the property, not exceeding the value determined under sub. (11) (e) 2., by the municipal tax rate.