1     
TAX INCREMENT FINANCING REVISIONS

2     
2017 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Howard A. Stephenson

5     
House Sponsor: Steve Eliason

6     Cosponsor:
Lincoln Fillmore

7     

8     LONG TITLE
9     General Description:
10          This bill modifies provisions related to tax increment for community reinvestment
11     agencies.
12     Highlighted Provisions:
13          This bill:
14          ▸     reduces the amount of tax increment that a project area may receive from a school
15     district; and
16          ▸     makes technical and conforming changes.
17     Money Appropriated in this Bill:
18          None
19     Other Special Clauses:
20          None
21     Utah Code Sections Affected:
22     AMENDS:
23          17C-1-102, as last amended by Laws of Utah 2016, Chapter 350
24     

25     Be it enacted by the Legislature of the state of Utah:
26          Section 1. Section 17C-1-102 is amended to read:

27          17C-1-102. Definitions.
28          As used in this title:
29          (1) "Active project area" means a project area that has not been dissolved in accordance
30     with Section 17C-1-702.
31          (2) "Adjusted tax increment" means the percentage of tax increment, if less than 100%,
32     that an agency is authorized to receive :
33          (a) for a pre-July 1, 1993, project area plan, under Section 17C-1-403, excluding tax
34     increment under Subsection 17C-1-403(3);
35          (b) for a post-June 30, 1993, project area plan, under Section 17C-1-404, excluding tax
36     increment under Section 17C-1-406;
37          (c) under a project area budget approved by a taxing entity committee; or
38          (d) under an interlocal agreement that authorizes the agency to receive a taxing entity's
39     tax increment.
40          (3) "Affordable housing" means housing owned or occupied by a low or moderate
41     income family, as determined by resolution of the agency.
42          (4) "Agency" or "community reinvestment agency" means a separate body corporate
43     and politic, created under Section 17C-1-201.5 or as a redevelopment agency or community
44     development and renewal agency under previous law:
45          (a) that is a political subdivision of the state;
46          (b) that is created to undertake or promote project area development as provided in this
47     title; and
48          (c) whose geographic boundaries are coterminous with:
49          (i) for an agency created by a county, the unincorporated area of the county; and
50          (ii) for an agency created by a municipality, the boundaries of the municipality.
51          (5) "Agency funds" means money that an agency collects or receives for the purposes
52     of agency operations or implementing a project area plan, including:
53          (a) project area funds;
54          (b) income, proceeds, revenue, or property derived from or held in connection with the
55     agency's undertaking and implementation of project area development; or
56          (c) a contribution, loan, grant, or other financial assistance from any public or private
57     source.

58          (6) "Annual income" means the same as that term is defined in regulations of the
59     United States Department of Housing and Urban Development, 24 C.F.R. Sec. 5.609, as
60     amended or as superseded by replacement regulations.
61          (7) "Assessment roll" means the same as that term is defined in Section 59-2-102.
62          (8) "Base taxable value" means, unless otherwise adjusted in accordance with
63     provisions of this title, a property's taxable value as shown upon the assessment roll last
64     equalized during the base year.
65          (9) "Base year" means, except as provided in Subsection 17C-1-402(4)(c), the year
66     during which the assessment roll is last equalized:
67          (a) for a pre-July 1, 1993, urban renewal or economic development project area plan,
68     before the project area plan's effective date;
69          (b) for a post-June 30, 1993, urban renewal or economic development project area
70     plan, or a community reinvestment project area plan that is subject to a taxing entity
71     committee:
72          (i) before the date on which the taxing entity committee approves the project area
73     budget; or
74          (ii) if taxing entity committee approval is not required for the project area budget,
75     before the date on which the community legislative body adopts the project area plan;
76          (c) for a project on an inactive airport site, after the later of:
77          (i) the date on which the inactive airport site is sold for remediation and development;
78     or
79          (ii) the date on which the airport that operated on the inactive airport site ceased
80     operations; or
81          (d) for a community development project area plan or a community reinvestment
82     project area plan that is subject to an interlocal agreement, as described in the interlocal
83     agreement.
84          (10) "Basic levy" means the portion of a school district's tax levy constituting the
85     minimum basic levy under Section 59-2-902.
86          (11) "Blight" or "blighted" means the condition of an area that meets the requirements
87     described in Subsection 17C-2-303(1) for an urban renewal project area or Section 17C-5-405
88     for a community reinvestment project area.

89          (12) "Blight hearing" means a public hearing regarding whether blight exists within a
90     proposed:
91          (a) urban renewal project area under Subsection 17C-2-102(1)(a)(i)(C) and Section
92     17C-2-302; or
93          (b) community reinvestment project area under Section 17C-5-405.
94          (13) "Blight study" means a study to determine whether blight exists within a survey
95     area as described in Section 17C-2-301 for an urban renewal project area or Section 17C-5-403
96     for a community reinvestment project area.
97          (14) "Board" means the governing body of an agency, as described in Section
98     17C-1-203.
99          (15) "Budget hearing" means the public hearing on a proposed project area budget
100     required under Subsection 17C-2-201(2)(d) for an urban renewal project area budget,
101     Subsection 17C-3-201(2)(d) for an economic development project area budget, or Subsection
102     17C-5-302(2)(e) for a community reinvestment project area budget.
103          (16) "Closed military base" means land within a former military base that the Defense
104     Base Closure and Realignment Commission has voted to close or realign when that action has
105     been sustained by the president of the United States and Congress.
106          (17) "Combined incremental value" means the combined total of all incremental values
107     from all project areas, except project areas that contain some or all of a military installation or
108     inactive industrial site, within the agency's boundaries under project area plans and project area
109     budgets at the time that a project area budget for a new project area is being considered.
110          (18) "Community" means a county or municipality.
111          (19) "Community development project area plan" means a project area plan adopted
112     under Chapter 4, Part 1, Community Development Project Area Plan.
113          (20) "Community legislative body" means the legislative body of the community that
114     created the agency.
115          (21) "Community reinvestment project area plan" means a project area plan adopted
116     under Chapter 5, Part 1, Community Reinvestment Project Area Plan.
117          (22) "Contest" means to file a written complaint in the district court of the county in
118     which the agency is located.
119          (23) "Economic development project area plan" means a project area plan adopted

120     under Chapter 3, Part 1, Economic Development Project Area Plan.
121          (24) "Fair share ratio" means the ratio derived by:
122          (a) for a municipality, comparing the percentage of all housing units within the
123     municipality that are publicly subsidized income targeted housing units to the percentage of all
124     housing units within the county in which the municipality is located that are publicly
125     subsidized income targeted housing units; or
126          (b) for the unincorporated part of a county, comparing the percentage of all housing
127     units within the unincorporated county that are publicly subsidized income targeted housing
128     units to the percentage of all housing units within the whole county that are publicly subsidized
129     income targeted housing units.
130          (25) "Family" means the same as that term is defined in regulations of the United
131     States Department of Housing and Urban Development, 24 C.F.R. [Section] Sec. 5.403, as
132     amended or as superseded by replacement regulations.
133          (26) "Greenfield" means land not developed beyond agricultural, range, or forestry use.
134          (27) "Hazardous waste" means any substance defined, regulated, or listed as a
135     hazardous substance, hazardous material, hazardous waste, toxic waste, pollutant, contaminant,
136     or toxic substance, or identified as hazardous to human health or the environment, under state
137     or federal law or regulation.
138          (28) "Housing allocation" means tax increment allocated for housing under Section
139     17C-2-203, 17C-3-202, or 17C-5-307 for the purposes described in Section 17C-1-412.
140          (29) "Housing fund" means a fund created by an agency for purposes described in
141     Section 17C-1-411 or 17C-1-412 that is comprised of:
142          (a) project area funds allocated for the purposes described in Section 17C-1-411; or
143          (b) an agency's housing allocation.
144          (30) (a) "Inactive airport site" means land that:
145          (i) consists of at least 100 acres;
146          (ii) is occupied by an airport:
147          (A) (I) that is no longer in operation as an airport; or
148          (II) (Aa) that is scheduled to be decommissioned; and
149          (Bb) for which a replacement commercial service airport is under construction; and
150          (B) that is owned or was formerly owned and operated by a public entity; and

151          (iii) requires remediation because:
152          (A) of the presence of hazardous waste or solid waste; or
153          (B) the site lacks sufficient public infrastructure and facilities, including public roads,
154     electric service, water system, and sewer system, needed to support development of the site.
155          (b) "Inactive airport site" includes a perimeter of up to 2,500 feet around the land
156     described in Subsection (30)(a).
157          (31) (a) "Inactive industrial site" means land that:
158          (i) consists of at least 1,000 acres;
159          (ii) is occupied by an inactive or abandoned factory, smelter, or other heavy industrial
160     facility; and
161          (iii) requires remediation because of the presence of hazardous waste or solid waste.
162          (b) "Inactive industrial site" includes a perimeter of up to 1,500 feet around the land
163     described in Subsection (31)(a).
164          (32) "Income targeted housing" means housing that is owned or occupied by a family
165     whose annual income is at or below 80% of the median annual income for a family within the
166     county in which the housing is located.
167          (33) "Incremental value" means a figure derived by multiplying the marginal value of
168     the property located within a project area on which tax increment is collected by a number that
169     represents the adjusted tax increment from that project area that is paid to the agency.
170          (34) "Loan fund board" means the Olene Walker Housing Loan Fund Board,
171     established under Title 35A, Chapter 8, Part 5, Olene Walker Housing Loan Fund.
172          (35) (a) " Local government building" means a building owned and operated by a
173     community for the primary purpose of providing one or more primary community functions,
174     including:
175          (i) a fire station;
176          (ii) a police station;
177          (iii) a city hall; or
178          (iv) a court or other judicial building.
179          (b) " Local government building" does not include a building the primary purpose of
180     which is cultural or recreational in nature.
181          (36) "Marginal value" means the difference between actual taxable value and base

182     taxable value.
183          (37) "Military installation project area" means a project area or a portion of a project
184     area located within a federal military installation ordered closed by the federal Defense Base
185     Realignment and Closure Commission.
186          (38) "Municipality" means a city, town, or metro township as defined in Section
187     10-2a-403.
188          (39) "Participant" means one or more persons that enter into a participation agreement
189     with an agency.
190          (40) "Participation agreement" means a written agreement between a person and an
191     agency that:
192          (a) includes a description of:
193          (i) the project area development that the person will undertake;
194          (ii) the amount of project area funds the person may receive; and
195          (iii) the terms and conditions under which the person may receive project area funds;
196     and
197          (b) is approved by resolution of the board.
198          (41) "Plan hearing" means the public hearing on a proposed project area plan required
199     under Subsection 17C-2-102(1)(a)(vi) for an urban renewal project area plan, Subsection
200     17C-3-102(1)(d) for an economic development project area plan, Subsection 17C-4-102(1)(d)
201     for a community development project area plan, or Subsection 17C-5-104(3)(e) for a
202     community reinvestment project area plan.
203          (42) "Post-June 30, 1993, project area plan" means a project area plan adopted on or
204     after July 1, 1993, and before May 10, 2016, whether or not amended subsequent to the project
205     area plan's adoption.
206          (43) "Pre-July 1, 1993, project area plan" means a project area plan adopted before July
207     1, 1993, whether or not amended subsequent to the project area plan's adoption.
208          (44) "Private," with respect to real property, means:
209          (a) not owned by a public entity or any other governmental entity; and
210          (b) not dedicated to public use.
211          (45) "Project area" means the geographic area described in a project area plan within
212     which the project area development described in the project area plan takes place or is

213     proposed to take place.
214          (46) "Project area budget" means a multiyear projection of annual or cumulative
215     revenues and expenses and other fiscal matters pertaining to a project area prepared in
216     accordance with:
217          (a) for an urban renewal project area, Section 17C-2-202;
218          (b) for an economic development project area, Section 17C-3-202;
219          (c) for a community development project area, Section 17C-4-204; or
220          (d) for a community reinvestment project area, Section 17C-5-302.
221          (47) "Project area development" means activity within a project area that, as
222     determined by the board, encourages, promotes, or provides development or redevelopment for
223     the purpose of implementing a project area plan, including:
224          (a) promoting, creating, or retaining public or private jobs within the state or a
225     community;
226          (b) providing office, manufacturing, warehousing, distribution, parking, or other
227     facilities or improvements;
228          (c) planning, designing, demolishing, clearing, constructing, rehabilitating, or
229     remediating environmental issues;
230          (d) providing residential, commercial, industrial, public, or other structures or spaces,
231     including recreational and other facilities incidental or appurtenant to the structures or spaces;
232          (e) altering, improving, modernizing, demolishing, reconstructing, or rehabilitating
233     existing structures;
234          (f) providing open space, including streets or other public grounds or space around
235     buildings;
236          (g) providing public or private buildings, infrastructure, structures, or improvements;
237          (h) relocating a business;
238          (i) improving public or private recreation areas or other public grounds;
239          (j) eliminating blight or the causes of blight;
240          (k) redevelopment as defined under the law in effect before May 1, 2006; or
241          (l) any activity described in Subsections (47)(a) through (k) outside of a project area
242     that the board determines to be a benefit to the project area.
243          (48) "Project area funds" means tax increment or sales and use tax revenue that an

244     agency receives under a project area budget adopted by a taxing entity committee or an
245     interlocal agreement.
246          (49) "Project area funds collection period" means the period of time that:
247          (a) begins the day on which the first payment of project area funds is distributed to an
248     agency under a project area budget adopted by a taxing entity committee or an interlocal
249     agreement; and
250          (b) ends the day on which the last payment of project area funds is distributed to an
251     agency under a project area budget adopted by a taxing entity committee or an interlocal
252     agreement.
253          (50) "Project area plan" means an urban renewal project area plan, an economic
254     development project area plan, a community development project area plan, or a community
255     reinvestment project area plan that, after the project area plan's effective date, guides and
256     controls the project area development.
257          (51) (a) "Property tax" means each levy on an ad valorem basis on tangible or
258     intangible personal or real property.
259          (b) "Property tax" includes a privilege tax imposed under Title 59, Chapter 4, Privilege
260     Tax.
261          (52) "Public entity" means:
262          (a) the United States, including an agency of the United States;
263          (b) the state, including any of the state's departments or agencies; or
264          (c) a political subdivision of the state, including a county, municipality, school district,
265     local district, special service district, or interlocal cooperation entity.
266          (53) "Publicly owned infrastructure and improvements" means water, sewer, storm
267     drainage, electrical, natural gas, telecommunication, or other similar systems and lines, streets,
268     roads, curb, gutter, sidewalk, walkways, parking facilities, public transportation facilities, or
269     other facilities, infrastructure, and improvements benefitting the public and to be publicly
270     owned or publicly maintained or operated.
271          (54) "Record property owner" or "record owner of property" means the owner of real
272     property, as shown on the records of the county in which the property is located, to whom the
273     property's tax notice is sent.
274          (55) "Sales and use tax revenue" means revenue that is:

275          (a) generated from a tax imposed under Title 59, Chapter 12, Sales and Use Tax Act;
276     and
277          (b) distributed to a taxing entity in accordance with Sections 59-12-204 and 59-12-205.
278          (56) "Superfund site":
279          (a) means an area included in the National Priorities List under the Comprehensive
280     Environmental Response, Compensation, and Liability Act of 1980, 42 U.S.C. Sec. 9605; and
281          (b) includes an area formerly included in the National Priorities List, as described in
282     Subsection (56)(a), but removed from the list following remediation that leaves on site the
283     waste that caused the area to be included in the National Priorities List.
284          (57) "Survey area" means a geographic area designated for study by a survey area
285     resolution to determine whether one or more project areas within the survey area are feasible.
286          (58) "Survey area resolution" means a resolution adopted by a board under Subsection
287     17C-2-101.5(1) or 17C-5-103(1) designating a survey area.
288          (59) "Taxable value" means:
289          (a) the taxable value of all real property a county assessor assesses in accordance with
290     Title 59, Chapter 2, Part 3, County Assessment, for the current year;
291          (b) the taxable value of all real and personal property the commission assesses in
292     accordance with Title 59, Chapter 2, Part 2, Assessment of Property, for the current year; and
293          (c) the year end taxable value of all personal property a county assessor assesses in
294     accordance with Title 59, Chapter 2, Part 3, County Assessment, contained on the prior year's
295     tax rolls of the taxing entity.
296          (60) (a) "Tax increment" means [the difference between]:
297          (i) the difference between:
298          [(i)] (A) the amount of property tax revenue generated each tax year by a taxing entity
299     from the area within a project area designated in the project area plan as the area from which
300     tax increment is to be collected, using the current assessed value of the property; and
301          [(ii)] (B) the amount of property tax revenue that would be generated from that same
302     area using the base taxable value of the property[.]; or
303          (ii) if the taxing entity is a school district, 50% of the amount described in Subsection
304     (60)(a)(i), unless:
305          (A) the project area plan is adopted before May 9, 2017, regardless of whether the

306     project area plan is subsequently amended; and
307          (B) before May 9, 2017, the revenue is pledged to support bond indebtedness or the
308     agency's other contractual obligations.
309          (b) "Tax increment" does not include revenue generated from taxes levied and
310     collected upon the taxable property in a project area under Section 59-2-1602 on or after
311     January 1, 1994, [upon the taxable property in the project area] unless:
312          (i) the project area plan [was] is adopted before May 4, 1993, regardless of whether [or
313     not] the project area plan [was] is subsequently amended; and
314          (ii) the [taxes were] revenue is pledged to support bond indebtedness or the agency's
315     other contractual obligations [of the agency].
316          (61) "Taxing entity" means a public entity that:
317          (a) levies a tax on property located within a project area; or
318          (b) imposes a sales and use tax under Title 59, Chapter 12, Sales and Use Tax Act.
319          (62) "Taxing entity committee" means a committee representing the interests of taxing
320     entities, created in accordance with Section 17C-1-402.
321          (63) "Unincorporated" means not within a municipality.
322          (64) "Urban renewal project area plan" means a project area plan adopted under
323     Chapter 2, Part 1, Urban Renewal Project Area Plan.






Legislative Review Note
Office of Legislative Research and General Counsel