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: