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H.B. 325 Enrolled

             1     

MILITARY INSTALLATION DEVELOPMENT AUTHORITY

             2     
AMENDMENTS

             3     
2013 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Brad L. Dee

             6     
Senate Sponsor: Jerry W. Stevenson

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies the Military Installation Development Authority Act.
             11      Highlighted Provisions:
             12          This bill:
             13          .    defines terms;
             14          .    provides that if an authority levies a resort communities tax, the actual number of
             15      permanent residents within the project area shall be used as part of the tax
             16      determination;
             17          .    provides for payment by a consumer of a municipal energy tax directly to the
             18      authority, if the consumer's energy supplier is not required under federal law to
             19      collect the tax;
             20          .    allows a military installation development authority (MIDA) to levy an energy tax
             21      on an energy supplier within a project area based on the delivered value of the
             22      energy;
             23          .    allows an energy supplier to recover an amount equal to its MIDA energy tax from
             24      its customers;
             25          .    provides that a MIDA energy tax is offset by any municipal energy tax paid by that
             26      customer on the same delivered value;
             27          .    amends MIDA board membership provisions;
             28          .    amends notice provisions for a newspaper of general circulation to within or near a
             29      project area;

             30          .    allows MIDA to use MIDA energy tax revenues for certain purposes, including uses
             31      outside of the project area where the revenue was generated; and
             32          .    makes technical changes.
             33      Money Appropriated in this Bill:
             34          None
             35      Other Special Clauses:
             36          This bill takes effect on July 1, 2013.
             37      Utah Code Sections Affected:
             38      AMENDS:
             39          59-12-401, as last amended by Laws of Utah 2010, Chapter 9
             40          63H-1-102, as last amended by Laws of Utah 2010, Chapter 9
             41          63H-1-203, as last amended by Laws of Utah 2010, Chapter 9
             42          63H-1-302, as last amended by Laws of Utah 2010, Chapter 9
             43          63H-1-403, as last amended by Laws of Utah 2009, Chapters 92 and 388
             44          63H-1-501, as last amended by Laws of Utah 2010, Chapter 9
             45          63H-1-502, as last amended by Laws of Utah 2012, Chapter 80
             46      ENACTS:
             47          63H-1-204, Utah Code Annotated 1953
             48     
             49      Be it enacted by the Legislature of the state of Utah:
             50          Section 1. Section 59-12-401 is amended to read:
             51           59-12-401. Resort communities tax authority for cities, towns, and military
             52      installation development authority -- Base -- Rate -- Collection fees.
             53          (1) (a) In addition to other sales and use taxes, a city or town in which the transient
             54      room capacity as defined in Section 59-12-405 is greater than or equal to 66% of the
             55      municipality's permanent census population may impose a sales and use tax of up to 1.1% on
             56      the transactions described in Subsection 59-12-103 (1) located within the city or town.
             57          (b) Notwithstanding Subsection (1)(a), a city or town may not impose a tax under this

             58      section on:
             59          (i) the sale of:
             60          (A) a motor vehicle;
             61          (B) an aircraft;
             62          (C) a watercraft;
             63          (D) a modular home;
             64          (E) a manufactured home; or
             65          (F) a mobile home;
             66          (ii) the sales and uses described in Section 59-12-104 to the extent the sales and uses
             67      are exempt from taxation under Section 59-12-104 ; and
             68          (iii) except as provided in Subsection (1)(d), amounts paid or charged for food and
             69      food ingredients.
             70          (c) For purposes of this Subsection (1), the location of a transaction shall be
             71      determined in accordance with Sections 59-12-211 through 59-12-215 .
             72          (d) A city or town imposing a tax under this section shall impose the tax on amounts
             73      paid or charged for food and food ingredients if the food and food ingredients are sold as part
             74      of a bundled transaction attributable to food and food ingredients and tangible personal
             75      property other than food and food ingredients.
             76          (2) (a) An amount equal to the total of any costs incurred by the state in connection
             77      with the implementation of Subsection (1) which exceed, in any year, the revenues received by
             78      the state from its collection fees received in connection with the implementation of Subsection
             79      (1) shall be paid over to the state General Fund by the cities and towns which impose the tax
             80      provided for in Subsection (1).
             81          (b) Amounts paid under Subsection (2)(a) shall be allocated proportionally among
             82      those cities and towns according to the amount of revenue the respective cities and towns
             83      generate in that year through imposition of that tax.
             84          (3) (a) Subject to 63H-1-203 , the military installation development authority created in
             85      Section 63H-1-201 may impose a tax under this section on the transactions described in

             86      Subsection 59-12-103 (1) located within a project area described in a project area plan adopted
             87      by the authority under Title 63H, Chapter 1, Military Installation Development Authority Act,
             88      as though the authority were a city or a town.
             89          (b) For purposes of calculating the permanent census population within a project area,
             90      the board as defined in Section 63H-1-102 shall:
             91          (i) [count the population] use the actual number of permanent residents within the
             92      project area as determined by the board;
             93          (ii) adopt a resolution verifying the population number; and
             94          (iii) provide the commission any information required in Section 59-12-405 .
             95          (c) Notwithstanding Subsection (1)(a), a board as defined in Section 63H-1-102 may
             96      impose the sales and use tax under this section if there are no permanent residents.
             97          Section 2. Section 63H-1-102 is amended to read:
             98           63H-1-102. Definitions.
             99          As used in this chapter:
             100          (1) "Authority" means the Military Installation Development Authority, created under
             101      Section 63H-1-201 .
             102          (2) "Base taxable value" means:
             103          (a) for military land or other land that was exempt from a property tax at the time that a
             104      project area was created that included the military land or other land, a taxable value of zero; or
             105          (b) for private property that is included in a project area, the taxable value of the
             106      property within any portion of the project area, as designated by board resolution, from which
             107      tax increment will be collected, as shown upon the assessment roll last equalized before the
             108      year in which the authority issues a building permit for a building within that portion of the
             109      project area.
             110          (3) "Board" means the governing body of the authority created under Section
             111      63H-1-301 .
             112          (4) (a) "Dedicated [supplemental tax increment] tax collections" means [supplemental
             113      tax increment that results from] the property tax that remains after the authority is paid the tax

             114      increment it is entitled to receive under Subsection 63H-1-501 (1), for a property tax levied by:
             115          (i) a county, including [any] a district the county has established under Subsection
             116      17-34-3 (2) to levy a property tax under Title 17, Chapter 34, Municipal-Type Services to
             117      Unincorporated Areas; or
             118          (ii) an included municipality.
             119          (b) "Dedicated [supplemental tax increment] tax collections" does not include a
             120      property tax levied by a county to assess and collect property taxes under Subsections
             121      59-2-1602 (1) and (4).
             122          (5) "Development project" means a project to develop land within a project area.
             123          (6) "Elected member" means a member of the authority board who:
             124          (a) is a mayor or member of a legislative body appointed under Subsection
             125      63H-1-302 (2)(b); or
             126          (b) (i) is appointed to the authority board under Subsection 63H-1-302 (2)(a) or (3); and
             127          (ii) concurrently serves in an elected state, county, or municipal office.
             128          (7) "Included municipality" means a municipality, some or all of which is included
             129      within a project area.
             130          (8) "Military Installation Development Authority energy tax" or "MIDA energy tax"
             131      means the tax levied under Section 63H-1-204 .
             132          [(8)] (9) "Military land" means [any] land or a facility, including [any] leased land or a
             133      leased facility, that is part of or affiliated with a base, camp, post, station, yard, center, or
             134      installation under the jurisdiction of the U.S. Department of Defense or the Utah National
             135      Guard.
             136          [(9)] (10) "Municipal energy tax" means a municipal energy sales and use tax under
             137      Title 10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act.
             138          [(10)] (11) "Municipal services revenue" means revenue that the authority:
             139          (a) collects from the authority's:
             140          (i) levy of a municipal energy tax;
             141          (ii) levy of a MIDA energy tax;

             142          [(ii)] (iii) levy of a telecommunications tax;
             143          [(iii)] (iv) imposition of a transient room tax; and
             144          [(iv)] (v) imposition of a resort communities tax;
             145          (b) receives under Subsection 59-12-205 (2)(b)(ii); and
             146          (c) receives as dedicated [supplemental tax increment] tax collections.
             147          [(11)] (12) "Municipal tax" means a municipal energy tax, MIDA energy tax,
             148      telecommunications tax, transient room tax, or resort communities tax.
             149          [(12)] (13) "Project area" means the land, including military land, whether consisting
             150      of a single contiguous area or multiple noncontiguous areas, described in a project area plan or
             151      draft project area plan, where the development project set forth in the project area plan or draft
             152      project area plan takes place or is proposed to take place.
             153          [(13)] (14) "Project area budget" means a multiyear projection of annual or cumulative
             154      revenues and expenses and other fiscal matters pertaining to a project area that includes:
             155          (a) the base taxable value of property in the project area;
             156          (b) the projected tax increment expected to be generated within the project area;
             157          (c) the amount of the tax increment expected to be shared with other taxing entities;
             158          (d) the amount of the tax increment expected to be used to implement the project area
             159      plan, including the estimated amount of the tax increment to be used for land acquisition,
             160      public improvements, infrastructure improvements, and loans, grants, or other incentives to
             161      private and public entities;
             162          (e) the tax increment expected to be used to cover the cost of administering the project
             163      area plan;
             164          (f) if the tax increment is to be collected at different times or from different portions of
             165      the project area, or both:
             166          (i) (A) the tax identification numbers of the parcels from which the tax increment will
             167      be collected; or
             168          (B) a legal description of the portion of the project area from which the tax increment
             169      will be collected; and

             170          (ii) an estimate of when other portions of the project area will become subject to
             171      collection of the tax increment [collection]; and
             172          (g) for property that the authority owns or leases and expects to sell or sublease, the
             173      expected total cost of the property to the authority and the expected selling price or lease
             174      payments.
             175          [(14)] (15) "Project area plan" means a written plan that, after its effective date, guides
             176      and controls the development within a project area.
             177          [(15)] (16) "Property tax" includes a privilege tax and each levy on an ad valorem basis
             178      on tangible or intangible personal or real property.
             179          [(16)] (17) "Public entity" means:
             180          (a) the state, including [any of its departments or agencies] each department or agency
             181      of the state; or
             182          (b) a political subdivision of the state, including a county, city, town, school district,
             183      local district, special service district, or interlocal cooperation entity.
             184          [(17)] (18) "Publicly owned infrastructure and improvements" means water, sewer,
             185      storm drainage, electrical, telecommunications, and other similar systems and lines, streets,
             186      roads, curb, gutter, sidewalk, walkways, parking facilities, public transportation facilities, and
             187      other buildings, facilities, infrastructure, and improvements that:
             188          (a) benefit the public; and
             189          (b) are:
             190          (i) publicly owned or owned by a utility; or
             191          (ii) [publicly owned or] publicly maintained or operated by the authority or another
             192      public entity.
             193          [(18)] (19) "Remaining municipal services revenue" means municipal services revenue
             194      that the authority has not spent during its fiscal year for municipal services as provided in
             195      Subsection 63H-1-503 (1).
             196          [(19)] (20) "Resort communities tax" means a sales and use tax imposed under Section
             197      59-12-401 .

             198          [(20) "Supplemental tax increment" means tax increment remaining after the authority
             199      is paid the tax increment it is entitled to receive under Subsection 63H-1-501 (1).]
             200          (21) "Taxable value" means the value of property as shown on the last equalized
             201      assessment roll as certified by the county assessor.
             202          (22) "Tax increment" means the difference between:
             203          (a) the amount of property tax revenues generated each tax year by all taxing entities
             204      from the area within a project area designated in the project area plan as the area from which
             205      the tax increment is to be collected, using the current assessed value of the property; and
             206          (b) the amount of property tax revenues that would be generated from that same area
             207      using the base taxable value of the property.
             208          (23) "Taxing entity" means a public entity that levies a tax on property within a project
             209      area.
             210          (24) "Telecommunications tax" means a telecommunications license tax under Title
             211      10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act.
             212          (25) "Transient room tax" means a tax under Section 59-12-352 .
             213          Section 3. Section 63H-1-203 is amended to read:
             214           63H-1-203. Levy of a municipal tax -- Direct tax payment to MIDA.
             215          [Any] (1) A levy of a municipal energy tax, [a] MIDA energy tax, telecommunications
             216      tax, [a] transient room tax, or [a] resort communities tax, including [any] an increase in the
             217      applicable tax rate, requires the affirmative vote of:
             218          [(1)] (a) the authority board; and
             219          [(2)] (b) a majority of all elected members of the authority board.
             220          (2) If the authority board levies a municipal energy tax, a consumer who acquires
             221      taxable energy shall pay the tax directly to the authority on a monthly basis if the consumer's
             222      energy supplier is not required under federal law to collect the tax in the manner described in
             223      Section 10-1-307 .
             224          Section 4. Section 63H-1-204 is enacted to read:
             225          63H-1-204. MIDA energy tax.

             226          (1) By ordinance, an authority board may levy a MIDA energy tax, within a project
             227      area, on an energy supplier as defined in Section 10-1-303 .
             228          (2) The maximum rate of the MIDA energy tax is 6% of the delivered value as defined
             229      in Section 10-1-303 , except that delivered value does not include the amount of a tax paid
             230      under this section.
             231          (3) (a) An energy supplier may recover an amount equal to the MIDA energy tax from
             232      its customers, if the energy supplier includes the amount as a separate billing line item.
             233          (b) The MIDA energy tax levied under this section is in addition to the rate approved
             234      by the Public Service Commission and charged to the customer.
             235          (4) If the authority has levied a municipal energy tax in the project area, the MIDA
             236      energy tax paid by a customer is reduced by any municipal energy tax paid by that customer on
             237      the same delivered value.
             238          (5) (a) The MIDA energy tax is payable by the energy supplier to MIDA on a monthly
             239      basis as described by the ordinance levying the tax.
             240          (b) The ordinance shall allow the energy supplier to retain 1% of the tax remittance
             241      each month to offset the energy supplier's costs of collecting and remitting the tax.
             242          Section 5. Section 63H-1-302 is amended to read:
             243           63H-1-302. Number of board members -- Appointment.
             244          (1) The authority's board shall consist of seven members.
             245          (2) Five members of the board shall be appointed by the governor as follows:
             246          (a) one member shall be appointed who is interested in supporting military efforts in
             247      the state;
             248          (b) subject to Subsection (4)(d), three members shall be appointed, each of whom is a
             249      mayor or member of the legislative body of a municipality or county that is adjacent or in close
             250      proximity to a project area or proposed project area; and
             251          (c) one member shall be appointed from the [governor's office of Economic
             252      Development] executive branch or a state agency that is involved with military issues.
             253          (3) The president of the Senate and the speaker of the House of Representatives shall

             254      each appoint one board member.
             255          (4) (a) Each vacancy shall be filled in the same manner under this section as the
             256      appointment of the member whose vacancy is being filled.
             257          (b) Each person appointed to fill a vacancy shall serve the remaining unexpired term of
             258      the member whose vacancy the person is filling.
             259          (c) If a mayor or member of a legislative body appointed under Subsection (2)(b)
             260      leaves office as mayor or a member of the legislative body, a vacancy on the board occurs and
             261      the governor shall appoint another mayor or member of a legislative body, as provided in
             262      Subsection (2)(b), to fill the vacancy.
             263          (d) If there are more than three project areas located in different counties or
             264      municipalities, at the expiration of a member's term who is appointed under Subsection (2)(b),
             265      the governor shall appoint:
             266          (i) a mayor of a municipality or county that:
             267          (A) is adjacent to or in close proximity to a project area; and
             268          (B) is not already represented on the board; or
             269          (ii) a member of a legislative body of a municipality or county that:
             270          (A) is adjacent to or in close proximity to a project area; and
             271          (B) is not already represented on the board.
             272          (e) A member of the board appointed by the governor, president of the Senate, or
             273      speaker of the House of Representatives serves at the pleasure of and may be removed and
             274      replaced at any time, with or without cause, by the governor, president of the Senate, or speaker
             275      of the House of Representatives, respectively.
             276          (5) The authority may:
             277          (a) appoint nonvoting members of the board; and
             278          (b) set terms for nonvoting members appointed under Subsection (5)(a).
             279          Section 6. Section 63H-1-403 is amended to read:
             280           63H-1-403. Notice of project area plan adoption -- Effective date of plan --
             281      Contesting the formation of the plan.

             282          (1) [(a)] Upon the board's adoption of a project area plan, the board shall provide
             283      notice as provided in Subsection (1)(b) by[: (i)] publishing or causing to be published [a] legal
             284      notice:
             285          [(A)] (a) in a newspaper of general circulation within or near the [authority's
             286      boundaries] project area; and
             287          [(B)] (b) as required [in] by Section 45-1-101 [; or].
             288          [(ii) if there is no newspaper of general circulation within the authority's boundaries
             289      as described in Subsection (1)(a)(i)(A), causing a notice to be posted in at least three public
             290      places within the authority's boundaries.]
             291          [(b)] (2) Each notice under Subsection (1)[(a)] shall include:
             292          [(i)] (a) [set forth] the board resolution adopting the project area plan or a summary of
             293      the resolution; and
             294          [(ii)] (b) [include] a statement that the project area plan is available for general public
             295      inspection and the hours for inspection.
             296          [(2)] (3) The project area plan shall become effective on the date of[:] publication of
             297      the notice.
             298          [(a) if notice was published under Subsection (1)(a), publication of the notice; or]
             299          [(b) if notice was posted under Subsection (1)(a), posting of the notice.]
             300          [(3)] (4) The authority shall make the adopted project area plan available to the general
             301      public at its offices during normal business hours.
             302          [(4)] (5) Within 10 days after [adopting] the day on which a project area plan is
             303      adopted that establishes a project area, or after [adopting] an amendment to a project area plan
             304      is adopted under which the boundary of a project area is modified, the authority shall send
             305      notice of the establishment or modification of the project area and an accurate map or plat of
             306      the project area to:
             307          (a) the State Tax Commission;
             308          (b) the Automated Geographic Reference Center created in Section 63F-1-506 ; and
             309          (c) the assessor and recorder of each county [in which the] where the project area is

             310      located.
             311          Section 7. Section 63H-1-501 is amended to read:
             312           63H-1-501. Authority receipt and use of tax increment -- Distribution of tax
             313      increment.
             314          (1) (a) The authority may:
             315          (i) subject to Subsection (1)(b), receive up to 75% of the tax increment for up to 25
             316      years, as provided in this part; and
             317          (ii) use the tax increment during and after the period described in Subsection (1)(a)(i).
             318          (b) With respect to a parcel located within a project area, the 25-year period described
             319      in Subsection (1)(a)(i) shall begin on the day on which the authority receives the first tax
             320      increment from that parcel.
             321          (2) Improvements on a parcel within a project area become subject to property tax on
             322      January 1 immediately following the day on which the authority issues a certificate of
             323      occupancy with respect to those improvements.
             324          (3) Each county that collects property tax on property within a project area shall pay
             325      and distribute to the authority the tax increment and dedicated [supplemental tax increment] tax
             326      collections that the authority is entitled to collect under this title, in the manner and at the time
             327      provided in Section 59-2-1365 .
             328          (4) (a) The board shall determine by resolution when the entire project area or an
             329      individual parcel within a project area is subject to tax increment.
             330          (b) The board shall amend the project area budget to reflect whether a parcel within a
             331      project area is subject to tax increment.
             332          Section 8. Section 63H-1-502 is amended to read:
             333           63H-1-502. Allowable uses of tax increment and other funds.
             334          (1) [The] Other than municipal services revenue, the authority may use tax increment
             335      and other funds available to the authority[, other than municipal services revenue]:
             336          (a) for any purpose authorized under this chapter;
             337          (b) for administrative, overhead, legal, and other operating expenses of the authority;

             338          (c) to pay for, including financing or refinancing, all or part of the development of land
             339      within the project area from which the tax increment [funds] or other funds were collected,
             340      including assisting the ongoing operation of [any] a development or facility within the project
             341      area;
             342          (d) to pay the cost of the installation and construction of [any] publicly owned
             343      infrastructure and improvements within the project area from which the tax increment funds
             344      were collected;
             345          (e) to pay the cost of the installation of publicly owned infrastructure and
             346      improvements, including a passenger ropeway, as defined in Section 72-11-102 , outside the
             347      project area if:
             348          (i) the authority board determines by resolution that the infrastructure and
             349      improvements are of benefit to the project area; and
             350          (ii) for a passenger ropeway, at least one end of the ropeway is located within the
             351      project area[.]; and
             352          (f) to pay the principal [of] and interest on bonds issued by the authority.
             353          (2) The authority may use revenue generated from the operation of publicly owned
             354      infrastructure operated by the authority or improvements operated by the authority to:
             355          (a) operate and maintain the infrastructure or improvements; and
             356          (b) pay for authority operating expenses, including administrative, overhead, and legal
             357      expenses.
             358          (3) For purposes of Subsection (1), the authority may use:
             359          (a) tax revenues received under Subsection 59-12-205 (2)(b)(ii); [and]
             360          (b) resort communities tax revenues generated from a project area that contains private
             361      land[.]; and
             362          (c) MIDA energy tax revenue, received under Section 63H-1-204 , which does not have
             363      to be used in the project area where the revenue was generated.
             364          (4) The determination of the authority board under Subsection (1)(e) regarding benefit
             365      to the project area [shall be] is final [and conclusive].

             366          Section 9. Effective date.
             367          This bill takes effect on July 1, 2013.

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