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S.B. 70

             1      S [

LIMITING ] s REDEVELOPMENT AGENCY TAX

             2     
INCREMENT FROM SCHOOL DISTRICTS

             3     
2001 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Sponsor: Howard A. Stephenson

            
6      Michael G. Waddoups



             7      This act modifies Special Districts provisions relating to redevelopment agencies to S [ allo w]
             7a      require school representatives on the taxing agency committee to report their votes in support of tax
             7b      increment. h This act requires an agency to report on the value of property within a project area to
             7c      the taxing agency committee. h This act also h provides an effective date and h contains a
             7d      coordination clause.
             8      [ school district boards to choose not to appoint members to the taxing agency committee and
             9      thus not to have the school district portion of tax increment go to the redevelopment agency
             10      for redevelopment and economic development projects. This act also makes technical
             11      changes.
] s

             12      This act affects sections of Utah Code Annotated 1953 as follows:
             13      AMENDS:
             14          17A-2-1247.5, as last amended by Chapters 178, 348 and 349, Laws of Utah 2000
             15      Be it enacted by the Legislature of the state of Utah:
             16          Section 1. Section 17A-2-1247.5 is amended to read:
             17           17A-2-1247.5. Tax increment financing -- Project area budget approval -- Payment
             18      of additional tax increment.
             19          (1) This section applies to projects for which a preliminary plan has been adopted on or
             20      after July 1, 1993.
             21          (2) (a) (i) A taxing agency committee shall be created for each redevelopment, education
             22      housing development, or economic development project. The committee membership shall be
             23      selected as follows:
             24          (A) unless a school district board votes not to appoint representatives under Subsection
             25      (2)(a)(ii)(A), two representatives appointed by the school district in the project area;
             26          (B) two representatives appointed by resolution of the S [ [ ] county commission or county
             27      council for [ ] legislative body of] s
the county in which the project area is located;


             28          (C) two representatives appointed by resolution of the S [ [ ] city or town's [ ] ] s legislative
             28a      body S [ of
             29      the city or town
] s
in which the project area is located if the project is located within a city or town;
             30          (D) unless a school district board votes not to appoint representatives under Subsection
             31      (2)(a)(ii)(A), a representative approved by the State School Board; and
             32          (E) one representative who shall represent all of the remaining governing bodies of the
             33      other local taxing agencies that levy taxes upon the property within the proposed project area. The
             34      representative shall be selected by resolution of each of the governing bodies of those taxing
             35      agencies within 30 days after the notice provided in Subsection 17A-2-1256 (3).
             36          (ii) (A) A school district that levies a tax on property located within a project area may
             37      choose not to appoint representatives to the taxing agency committee under Subsection (2)(a)(i)(A)
             38      if:
             39          (I) the project area is established under an education housing development project S [ [ ] ;
             39a      [  ]  ] s and
             40      S [ [ ] (II) [ ] ] s the project area budget of S [ [ ] the [ ] that] ] s project area S [ [ ] under Subsection
             40a      (2)(a)(ii)(A)(I) [ ] ] s is adopted
             41      on or after May 1, 2000 S [ [ ] . [ ] ; or
             42           (II) the project area is established under a redevelopment or economic development project
             43      and the project area budget of that project area is adopted on or after April 30, 2001.
] s

             44          (B) If a school district board votes not to appoint representatives to the taxing agency
             45      committee under Subsection (2)(a)(ii)(A), the State School Board may not appoint a representative
             46      to the taxing agency committee.
             47          (b) (i) If the project is located within a city or town, a quorum of a taxing agency
             48      committee consists of:
             49          (A) if a school district board votes not to appoint representatives to the taxing agency
             50      committee under Subsection (2)(a)(ii)(A), three members; or
             51          (B) in all other cases, five members.
             52          (ii) If the project is not located within a city or town, a quorum consists of:
             53          (A) if a school district board votes not to appoint representatives to the taxing agency
             54      committee under Subsection (2)(a)(ii)(A), two members; or
             55          (B) in all other cases, four members.
             56          (c) A taxing agency committee formed in accordance with this section has the authority
             57      to:
             58          (i) (A) represent all taxing entities in a project area, except a school district whose board


             59      has voted under Subsection (2)(a)(ii)(A) not to appoint representatives to the taxing agency
             60      committee; and
             61          (B) cast votes that will be binding on the governing boards of all taxing entities in a project
             62      area that the taxing agency committee represents under Subsection (2)(c)(i)(A);
             63          (ii) negotiate with the agency concerning the redevelopment plan;
             64          (iii) approve or disapprove project area budgets under Subsection (3); and
             65          (iv) approve an exception to the limits on the value and size of project areas imposed by
             66      Section 17A-2-1210 , or the time and amount of tax increment financing under this section.
             66a           S (d) EACH TIME A SCHOOL DISTRICT REPRESENTATIVE OR A STATE SCHOOL BOARD
             66b      REPRESENTATIVE VOTES AS A MEMBER OF A TAXING AGENCY COMMITTEE TO ALLOW AN AGENCY
             66c      TO BE PAID TAX INCREMENT OR TO INCREASE THE AMOUNT OR LENGTH OF TIME THAT AN AGENCY
             66d      MAY BE PAID TAX INCREMENT, THAT REPRESENTATIVE SHALL, WITHIN 45 DAYS AFTER THE VOTE,
             66e      PROVIDE TO THE REPRESENTATIVE'S RESPECTIVE SCHOOL BOARD AN EXPLANATION IN WRITING OF
             66f      THE REPRESENTATIVE'S VOTE AND THE REASONS FOR THE VOTE . s
             66g           h (e)(i) h [EACH AGENCY] THE ASSESSOR OF EACH COUNTY IN WHICH THE AGENCY IS
             66h      LOCATED h SHALL h [AT LEAST ANNUALLY ] h PROVIDE A WRITTEN REPORT TO THE
             66h      TAXING AGENCY COMMITTEE STATING, WITH RESPECT TO PROPERTY WITHIN EACH PROJECT
             66i      AREA:
             66j          (A) THE TAXABLE VALUE FOR THE BASE YEAR, REFLECTING ANY ADJUSTMENTS UNDER
             66k      SECTIONS 17A-2-1250.5, 17A-2-1251, 17A-2-1252, AND 17A-2-1253; AND
             66l          (B) THE ASSESSED VALUE.
             66m          (ii) WITH RESPECT TO THE INFORMATION REQUIRED UNDER SUBSECTION (2)(e)(i), THE
             66n      h [AGENCY] COUNTY ASSESSOR h SHALL PROVIDE :
             66o          (A) ACTUAL AMOUNTS FOR EACH YEAR FROM THE ADOPTION OF THE PROJECT AREA PLAN
             66p      TO THE TIME OF THE REPORT; AND
             66q          (B) ESTIMATED AMOUNTS FOR EACH YEAR BEGINNING THE YEAR AFTER THE TIME OF THE
             66r      REPORT AND ENDING THE TIME THAT THE AGENCY EXPECTS NO LONGER TO BE PAID TAX
             66s      INCREMENT FROM PROPERTY WITHIN THE PROJECT AREA. h
             66t           h (iii) THE ASSESSOR OF THE COUNTY IN WHICH THE AGENCY IS LOCATED SHALL PROVIDE A
             66u      REPORT UNDER THIS SUBSECTION (3)(e):
             66v          (A) AT LEAST ANNUALLY; AND
             66w          (B) UPON REQUEST OF THE TAXING AGENCY COMMITTEE, BEFORE A TAXING AGENCY
             66x      COMMITTEE MEETING AT WHICH THE COMMITTEE WILL CONSIDER WHETHER TO ALLOW THE
             66y      AGENCY TO BE PAID TAX INCREMENT OR TO INCREASE THE AMOUNT OR LENGTH OF TIME THAT
             66z      THE AGENCY MAY BE PAID TAX INCREMENT. h
             67          (3) (a) (i) An agency may not collect any tax increment for a project area until after the
             68      agency obtains the majority consent of a quorum of the taxing agency committee for the project
             69      area budget if:
             70          (A) the project area budget was adopted from July 1, 1993 to June 30, 1998 or after May
             71      1, 2000; or
             72          (B) the project area budget:
             73          (I) was adopted from July 1, 1998 to May 1, 2000; and
             74          (II) does not allocate 20% of the tax increment for housing as provided in Subsection
             75      17A-2-1264 (2)(a).
             76          (ii) For a project area budget adopted from July 1, 1998 to May 1, 2000 that allocates 20%
             77      of the tax increment for housing as provided in Subsection 17A-2-1264 (2)(a), an agency may not
             78      collect tax increment from all or part of a project area until after:
             79          (A) the Olene Walker Housing Trust Fund Board, established under Title 9, Chapter 4,
             80      Part 7, Olene Walker Housing Trust Fund, has certified the project area budget as complying with
             81      the requirements of Section 17A-2-1264 ; and
             82          (B) the agency's governing body has approved and adopted the project area budget by a
             83      two-thirds vote.
             84          (iii) (A) (I) Except as provided in Subsection (3)(a)(iii)(A)(II), each project area budget
             85      adopted after May 1, 2000 that provides for more than $100,000 of annual tax increment to be
             86      collected by the agency shall allocate at least 20% of tax increment for housing as provided in
             87      Subsection 17A-2-1264 (3)(a).
             88          (II) The 20% requirement of Subsection (3)(a)(iii)(A)(I) may be waived in whole or in part
             89      by the mutual consent of the Olene Walker Housing Trust Fund Board, established under Title 9,


             90      Chapter 4, Part 7, Olene Walker Housing Trust Fund, and the taxing agency committee upon their
             91      determination that 20% of tax increment is more than is needed to address the community's need
             92      for affordable housing, as defined in Section 17A-2-1264 .
             93          (B) Before the taxing agency committee may give its consent to a project area budget
             94      adopted after May 1, 2000 that is required under Subsection (3)(a)(iii) to allocate tax increment
             95      for housing, the agency shall comply with Subsection 17A-2-1264 (2)(b).
             96          (b) With the majority consent of a quorum of the taxing agency committee, an agency may
             97      amend a project area budget that was adopted under Subsection (3)(a).
             98          (c) (i) Within 30 days after the approval and adoption of a project area budget, each agency
             99      shall file a copy of the budget with the county auditor, the State Tax Commission, the state auditor,
             100      and each property taxing entity affected by the agency's collection of tax increment under the
             101      project area budget.
             102          (ii) Each agency whose project area budget allocates tax increment for housing as provided
             103      in Subsection 17A-2-1264 (3)(a) shall file a copy of the budget with the Olene Walker Housing
             104      Trust Fund established under Title 9, Chapter 4, Part 7, Olene Walker Housing Trust Fund.
             105          (d) (i) Beginning on January 1, 1997, before a project area budget or amendment to a
             106      project area budget is approved, the agency shall advertise and hold one public hearing on the
             107      proposed change in the project area budget.
             108          (ii) The public hearing under Subsection (3)(d)(i) shall be conducted according to the
             109      procedures and requirements of Subsection 17A-2-1222 (2), except that if the amended budget
             110      allocates a greater proportion of tax increment to a project area than was allocated to the project
             111      area under the previous budget, the advertisement shall state the percentage allocated under the
             112      previous budget and the percentage allocated under the amended budget.
             113          (e) If an amendment under Subsection (3)(b) is not approved, the agency shall continue
             114      to operate under the previously approved, unamended project area budget.
             115          (4) (a) Except as provided in Subsections (6) and (8), an agency may collect tax increment
             116      from all or a part of a project area. The tax increment shall be paid to the agency in the same
             117      manner and at the same time as payments of taxes to other taxing agencies to pay the principal of
             118      and interest on loans, moneys advanced to, or indebtedness, whether funded, refunded, assumed,
             119      or otherwise, to finance or refinance, in whole or in part, the redevelopment, education housing
             120      development, or economic development project and the housing projects and programs under


             121      Sections 17A-2-1263 and 17A-2-1264 .
             122          (b) (i) An agency may elect to be paid:
             123          (A) if 20% of the project area budget is not allocated for housing as provided in Subsection
             124      17A-2-1264 (2)(a):
             125          (I) 100% of annual tax increment for 12 years; or
             126          (II) 75% of annual tax increment for 20 years; or
             127          (B) if 20% of the project area budget is allocated for housing as provided in Subsection
             128      17A-2-1264 (2)(a):
             129          (I) 100% of annual tax increment for 15 years; or
             130          (II) 75% of annual tax increment for 24 years.
             131          (ii) Tax increment paid to an agency under this Subsection (4)(b) shall be paid for the
             132      applicable length of time beginning the first tax year the agency accepts tax increment from a
             133      project area.
             134          (c) An agency may receive a greater percentage of tax increment or receive tax increment
             135      for a longer period of time than that specified in Subsection (4)(b) if the agency obtains the
             136      majority consent of the taxing agency committee.
             137          (5) (a) The redevelopment plan shall provide that the portion of the taxes, if any, due to
             138      an increase in the tax rate by a taxing agency after the date the project area budget is approved by
             139      the taxing agency committee may not be allocated to and when collected paid into a special fund
             140      of the redevelopment agency according to the provisions of Subsection (4) unless the taxing
             141      agency committee approves the inclusion of the increase in the tax rate at the time the project area
             142      budget is approved. If approval of the inclusion of the increase in the tax rate is not obtained, the
             143      portion of the taxes attributable to the increase in the rate shall be distributed by the county to the
             144      taxing agency imposing the tax rate increase in the same manner as other property taxes.
             145          (b) The amount of the tax rate to be used in determining tax increment shall be increased
             146      or decreased by the amount of an increase or decrease as a result of:
             147          (i) a statute enacted by the Legislature, a judicial decision, or an order from the State Tax
             148      Commission to a county to adjust or factor its assessment rate under Subsection 59-2-704 (2);
             149          (ii) a change in exemption provided in Utah Constitution Article XIII, Section 2, or Section
             150      59-2-103 ;
             151          (iii) an increase or decrease in the percentage of fair market value, as defined under


             152      Section 59-2-102 ; or
             153          (iv) a decrease in the certified tax rate under Subsection 59-2-924 (2)(c) or (2)(d)(i).
             154          (c) (i) Notwithstanding the increase or decrease resulting from Subsection (5)(b), the
             155      amount of money allocated to, and when collected paid to the agency each year for payment of
             156      bonds or other indebtedness may not be less than would have been allocated to and when collected
             157      paid to the agency each year if there had been no increase or decrease under Subsection (5)(b).
             158          (ii) For a decrease resulting from Subsection (5)(b)(iv), the taxable value for the base year
             159      under Subsection 17A-2-1202 (2) or 17A-2-1247 (2)(a), as the case may be, shall be reduced for any
             160      year to the extent necessary, including below zero, to provide an agency with approximately the
             161      same amount of money the agency would have received without a reduction in the county's
             162      certified tax rate if:
             163          (A) in that year there is a decrease in the certified tax rate under Subsection 59-2-924 (2)(c)
             164      or (2)(d)(i);
             165          (B) the amount of the decrease is more than 20% of the county's certified tax rate of the
             166      previous year; and
             167          (C) the decrease results in a reduction of the amount to be paid to the agency under Section
             168      17A-2-1247 or 17A-2-1247.5 .
             169          (6) (a) For redevelopment plans first adopted before May 4, 1993, beginning January 1,
             170      1994, all of the taxes levied and collected upon the taxable property in the redevelopment project
             171      under Section 59-2-906.1 which are not pledged to support bond indebtedness and other
             172      contractual obligations are exempt from the provisions of Subsection (4).
             173          (b) For redevelopment plans first adopted after May 3, 1993, beginning January 1, 1994,
             174      all of the taxes levied and collected upon the taxable property in the redevelopment project under
             175      Section 59-2-906.1 are exempt from the provisions of Subsection (4).
             176          (7) (a) In addition to the amounts and periods that an agency may elect to be paid tax
             177      increment under Subsection (4)(b), an agency may elect to be paid 100% of annual tax increment
             178      for an additional period, as provided in Subsection (7)(b), beyond those periods provided under
             179      Subsection (4)(b), without the approval of the taxing agency committee, if the tax increment
             180      funding for the additional period is used:
             181          (i) for an agency in a city in which is located all or a portion of an interchange on I-15 or
             182      that would directly benefit from an interchange on I-15, to pay some or all of the cost of the


             183      installation, construction, or reconstruction of:
             184          (A) an interchange on I-15; or
             185          (B) frontage and other roads connecting to the interchange, as determined by the
             186      Department of Transportation created under Section 72-1-201 and the Transportation Commission
             187      created under Section 72-1-301 ; or
             188          (ii) for an agency in a city of the first class, to pay some or all of the cost of the land for
             189      and installation and construction of a recreational facility, as defined in Subsection 59-12-702 (3),
             190      or a cultural facility, including parking and infrastructure improvements related to the recreational
             191      or cultural facility.
             192          (b) The additional period for which an agency may be paid 100% of annual tax increment
             193      under Subsection (7)(a) is an additional:
             194          (i) 13 years, for an agency that initially elected to be paid under Subsection (4)(b)(i)(A)(I);
             195          (ii) five years, for an agency that initially elected to be paid under Subsection
             196      (4)(b)(i)(A)(II);
             197          (iii) ten years, for an agency that initially elected to be paid under Subsection
             198      (4)(b)(i)(B)(I); and
             199          (iv) one year, for an agency that initially elected to be paid under Subsection
             200      (4)(b)(i)(B)(II).
             201          (c) This Subsection (7) applies only to an agency established by a city in which:
             202          (i) for an agency in a city in which is located all or a portion of an interchange on I-15 or
             203      that would directly benefit from an interchange on I-15, the installation, construction, or
             204      reconstruction of an interchange on I-15 or frontage or other roads connecting to the interchange
             205      has begun on or before June 30, 2002; and
             206          (ii) for an agency in a city of the first class, the installation or construction of a recreational
             207      facility, as defined in Subsection 59-12-702 (3), or a cultural facility has begun on or before June
             208      30, 2002.
             209          (d) Notwithstanding any other provision of this Subsection (7), a school district may not
             210      receive less tax increment because of application of the other provisions of this Subsection (7) than
             211      it would have received without those provisions.
             212          (8) If a school district board votes not to appoint representatives to the taxing agency
             213      committee under Subsection (2)(a)(ii)(A), all of the taxes levied and collected upon taxable


             214      property in the redevelopment project by the school district are exempt from Subsection (4) and
             215      the agency may not collect tax increment from taxes levied by the school district in the project
             216      area.
             216a1           h Section 2. Effective date.
             216a2           THIS ACT TAKES EFFECT JUNE 1, 2001. h
             216a      S      Section h [2.] 3. h Coordination clause.
             216b          IF THIS BILL AND 1st SUBSTITUTE H.B. 7, RECODIFICATION AND AMENDMENTS OF
             216c      REDEVELOPMENT AGENCIES STATUTES, BOTH PASS, IT IS THE INTENT OF THE LEGISLATURE
             216d      THAT THE OFFICE OF LEGISLATIVE RESEARCH AND GENERAL COUNSEL, IN PREPARING THE
             216e      UTAH CODE DATABASE FOR PUBLICATION, h [MERGE THESE TWO BILLS BY ADDING] ADD h THE
             216f      FOLLOWING AS h [SUBSECTION] SUBSECTIONS h (7) h AND (8) h IN SECTION 17B-4-1002 AS
             216f1      ENACTED IN 1st SUBSTITUTE H.B. 7:
             216g          "(7) EACH TIME A SCHOOL DISTRICT REPRESENTATIVE OR A REPRESENTATIVE OF THE
             216h      STATE BOARD OF EDUCATION VOTES AS A MEMBER OF A TAXING ENTITY COMMITTEE TO ALLOW
             216i      AN AGENCY TO BE PAID TAX INCREMENT OR TO INCREASE THE AMOUNT OR LENGTH OF TIME
             216j      THAT AN AGENCY MAY BE PAID TAX INCREMENT, THAT REPRESENTATIVE SHALL, WITHIN 45
             216k      DAYS AFTER THE VOTE, PROVIDE TO THE REPRESENTATIVE'S RESPECTIVE SCHOOL BOARD AN
             216l      EXPLANATION IN WRITING OF THE REPRESENTATIVE'S VOTE AND THE REASONS FOR THE VOTE ." s
             216m           h (8)(a) h [EACH AGENCY] THE ASSESSOR OF EACH COUNTY IN WHICH THE AGENCY IS
             216n      LOCATED h SHALL h [AT LEAST ANNUALLY] h PROVIDE A WRITTEN REPORT TO THE
             216n      TAXING ENTITY COMMITTEE STATING, WITH RESPECT TO PROPERTY WITHIN EACH PROJECT
             216o      AREA:
             216p          (i) THE BASE TAXABLE VALUE, AS ADJUSTED BY ANY ADJUSTMENTS UNDER SECTION
             216q      17B-4-1006; AND
             216r          (ii) THE ASSESSED VALUE.
             216s          (b) WITH RESPECT TO THE INFORMATION REQUIRED UNDER SUBSECTION (8)(a), THE
             216t      AGENCY SHALL PROVIDE:
             216u          (i) ACTUAL AMOUNTS FOR EACH YEAR FROM THE ADOPTION OF THE PROJECT AREA PLAN
             216v      TO THE TIME OF THE REPORT; AND
             216w          (ii) ESTIMATED AMOUNTS FOR EACH YEAR BEGINNING THE YEAR AFTER THE TIME OF THE
             216x      REPORT AND ENDING THE TIME THAT THE AGENCY EXPECTS NO LONGER TO BE PAID TAX
             216y      INCREMENT FROM PROPERTY WITHIN THE PROJECT AREA. h
             216z           h (c) THE ASSESSOR OF THE COUNTY IN WHICH THE AGENCY IS LOCATED SHALL PROVIDE
             216aa      A REPORT UNDER THIS SUBSECTION (8):
             216ab          (i) AT LEAST ANNUALLY; AND
             216ac          (ii) UPON REQUEST OF THE TAXING ENTITY COMMITTEE, BEFORE A TAXING ENTITY
             216ad      COMMITTEE MEETING AT WHICH THE COMMITTEE WILL CONSIDER WHETHER TO ALLOW THE
             216ae      AGENCY TO BE PAID TAX INCREMENT OR TO INCREASE THE AMOUNT OR LENGTH OF TIME THAT
             216af      THE AGENCY MAY BE PAID TAX INCREMENT. h     


Legislative Review Note
    as of 1-11-01 1:11 PM

A limited legal review of this legislation raises no obvious constitutional or statutory concerns.
Office of Legislative Research and General Counsel


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