Section 1. Section 63N-1a-501 is enacted to read:63N-1a-501. Definitions.As used in this part:(1)"Allowable tax increment" means the lesser of:(a)the amount of statutorily authorized tax increment for a given project; or(b)the amount of tax increment described in an approved application.(2)"Application" means a written request, made in a form and in a manner established by the office, submitted by a public entity seeking to begin the process of triggering tax increment.(3)"Application authorization meeting" means a public meeting:(a)conducted by the governing body of a public entity;(b)for which the public entity provides class A notice under Section 63G-30-102:(i)for a minimum of 10 calendar days before the public meeting; and(ii)with a link to the public entity's website where an explanation of each item listed in Subsections 63N-1a-502(2)(a) through (d) may be found; and(c)in which the governing body of the public entity addresses each item listed in Subsections 63N-1a-502(2)(a) through (d).(4)"Approximated discount rate" means the assumed rate of return used to discount future cash flows back to the cash's present value.(5)"But-for analysis" means information or data that demonstrates:(a)the benefits of a potential project to the public;(b)the existing impediments to the potential project;(c)that the potential project would be unable to overcome existing impediments and proceed without the use of tax increment; and(d)that the impact of using tax increment to the public is less than the benefits of the potential project to the public.(6)"Collecting entity" means:(a)the State Tax Commission; or(b)for property tax increment, the relevant county.(7)"Collection time period" means the maximum amount of time a public entity may collect tax increment under an approved application.(8)"Established base year" means the year designated in a proposal for the purpose of calculating tax increment.(9)"Governing body" means:(a)for a municipality, the municipal legislative body;(b)for a county, the county legislative body;(c)for a regional land use authority, the regional land use authority's board;(d)for a public infrastructure district, the public infrastructure district's board of trustees; and(e)for a special district, the special district's board of trustees.(10)"Maximum cap" means the total amount of revenue a public entity seeks in an application.(11)"Particular revenue source" means the revenue source that generates tax increment, including property tax, sales and use tax, or any other revenue source established and collected by a governmental entity.(12)"Public entity" means:(a)a community reinvestment agency created under Title 17C, Limited Purpose Local Government Entities - Community Reinvestment Agency Act;(b)a county;(c)a municipality;(d)a public infrastructure district created under Title 17D, Chapter 4, Public Infrastructure District Act;(e)a regional land use authority; or(f)a special district created under Title 17B, Limited Purpose Local Government Entities - Special Districts.(13)"Regional land use authority" means:(a)the Utah Inland Port Authority created in Section 11-58-201;(b)the Point of the Mountain State Land Authority created in Section 11-59-201;(c)the Utah Fairpark Area Investment and Restoration District created in Section 11-70-201; or(d)the Military Installation Development Authority created in Section 63H-1-201.(14)(a)"Tax increment revenue" means the difference between the tax revenue generated from or within a specific area and the tax revenue generated during an established base year.(b)"Tax increment revenue" includes any concept substantially the same as the definition in Subsection (14)(a), regardless of the name of the concept.(15)"Today's dollars" means a monetary value assessed at the time a public entity makes an application as described in this part, excluding any estimated growth or inflation of revenues.

Section 2. Section 63N-1a-502 is enacted to read:63N-1a-502. Application for use of tax increment.(1)Beginning July 1, 2026, any public entity seeking to utilize tax increment:(a)shall conduct an application authorization meeting;(b)shall approve the public entity to apply to the office by majority vote of the governing body at the application authorization meeting;(c)shall apply to the office as described in this section; and(d)may not begin the process to trigger, collect, or utilize tax increment until approved by the office as described in Section 63N-1a-504.(2)An application authorization meeting may be part of another public meeting of the public entity's governing body if the notice and agenda for the public meeting clearly describe the application authorization meeting portion of the public meeting.(3)An application to utilize tax increment shall:(a)identify the public good to be addressed through the use of tax increment, including a description of the project or projects to be pursued with the use of tax increment;(b)identify the type of tax increment revenue sought for use;(c)identify the maximum cap of tax increment revenue the public entity seeks to collect and utilize for each type of tax, if the public entity seeks to use more than one type of tax increment revenue;(d)provide a but-for analysis of the project or projects the public entity intends to pursue with the use of tax increment;(e)explain how the benefit to residents or taxpayers near the project is proportionate to the benefit to any party benefiting from the public entity's use of tax increment, as described in Section 63N-1a-503; and(f)include a copy of the notice for and the minutes from the public entity's application authorization meeting.(4)A public entity shall comply with the requirements of this part every time the public entity seeks to utilize tax increment.(5)The office may:(a)establish an application fee, in accordance with Section 63J-1-504, to cover the office's costs in administering this part; and(b)make rules, in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, about the form and content of an application.

Section 3. Section 63N-1a-503 is enacted to read:63N-1a-503. Analyzing proportionate benefit.(1)In analyzing the proportionate benefit to residents or taxpayers, a public entity shall prepare an estimate, in present value by using an approximated discount rate of the following:(a)the amount of revenue that will be allocated to any party in the form of tax increment, or bond financing secured by tax increment, each year over the collection time period of the proposed tax increment period or 40 years, whichever is greater; and(b)the amount of revenue expected to be distributed to each affected taxing entity each year over the collection time period of the proposed tax increment period.(2)If the public entity utilizes an approximated discount rate that is lower than 7% in conducting the analysis described in Subsection (1), the public entity shall provide an explanation of the chosen approximated discount rate.(3)In addition to any quantitative assessment of the public benefit expected to be derived from the use of tax increment, the public entity shall provide a quantitative evaluation that:(a)uses the estimate described in Subsection (1); and(b)demonstrates the tax increment to be collected by a public entity during the collection time period is not projected to exceed the revenue that will remain to the taxing entities that would have received the revenue.

Section 4. Section 63N-1a-504 is enacted to read:63N-1a-504. Office review of applications.(1)Within 30 days of the day on which the office receives an application under Section 63N-1a-502 and the application fee set by the office under Subsection 63N-1a-502(5)(a), the office shall determine whether the application meets the requirements of this part and any rules made under this part.(2)The office may not deny an application that provides the information required by Section 63N-1a-502 on the basis of the content of the application unless:(a)the application is so unclear or vague that the office cannot determine whether the application complies with this part; or(b)information in the application is demonstrably inaccurate even without external analysis of the information.(3)(a)If the office determines an application does not meet the requirements of this part, the office shall:(i)deny the application; and(ii)notify the public entity of the denial with an explanation of the determination.(b)A public entity that receives notice under Subsection (3)(a) may submit a new application that addresses the office's determination and request an expedited review of the new application.(4)If the office determines an application meets the requirements of this part, the office shall:(a)approve the application; and(b)notify the public entity and the State Tax Commission of the approval.

Section 5. Section 63N-1a-505 is enacted to read:63N-1a-505. Effect of approved application.(1)A public entity that receives approval of an application under Section 63N-1a-504 may begin the process to trigger tax increment according to:(a)the terms of the approved application;(b)the statutory requirements governing the public entity; and(c)this section.(2)(a)Except as provided in Subsection (2)(b), a public entity described in Subsection (1):(i)shall, within 30 calendar days, notify all taxing entities that will be affected by a planned tax increment area that the public entity:(A)has received approval of an application under Section 63N-1a-504; and(B)intends to begin the process to trigger tax increment;(ii)shall notify the State Tax Commission and the relevant county auditor, county assessor, and county treasurer by no later than December 31 the year before the public entity intends to begin collecting property tax increment; and(iii)shall notify the State Tax Commission no later than 180 days before the beginning of the fiscal quarter during which the public entity intends to begin collecting sales and use tax increment.(b)If the public entity is required to comply with a different notification time period than what is described in Subsection (2)(a), the public entity shall comply with the notification requirement that provides the greater amount of time for notification.(3)(a)If a public entity does not complete the process to trigger tax increment, or the process to trigger a reauthorized tax increment, within one year of the day on which the public entity receives approval from the office:(i)the public entity shall notify the office; and(ii)the office may, within 30 days of receiving the notice described in Subsection (3)(a)(i), request the public entity provide additional information to ensure that any data used by the public entity in the public entity's approved application remains valid.(b)A public entity described in Subsection (3)(a) may proceed with the process to trigger tax increment if the public entity does not timely receive a request for additional information from the office.(c)A public entity that receives a request from the office under Subsection (3)(a)(ii):(i)shall respond to the request; and(ii)may not trigger tax increment until the office reviews the public entity's response and approves the public entity to proceed.(d)The office shall evaluate any additional information received under Subsection (3)(c) and determine whether the public entity's proposal meets the requirements of this part.(4)A public entity that completes the process to trigger tax increment shall inform the office within 30 days of the day on which the process is complete.(5)(a)A public entity that receives more tax increment revenue than expected is required to use the additional or excess revenue to defease any bond issued by the public entity or otherwise accelerate repayment of any debts incurred by the public entity.(b)A public entity may not utilize tax increment revenue for any purpose other than the purpose described in an approved application.(c)(i)A public entity is responsible to monitor the public entity's receipt of tax increment revenue and to notify taxing entities and distributing entities when the public entity is approaching, has met, or has exceeded the maximum cap.(ii)A public entity that receives more than the maximum cap of tax increment revenue:(A)shall immediately inform the county auditor, county assessor, and State Tax Commission;(B)shall be responsible for ensuring the excess tax increment revenue is returned to the appropriate taxing entities; and(C)may request assistance from the county and the State Tax Commission in fulfilling the duty described in Subsection (5)(c)(ii)(B).(6)At the end of a tax increment time period, or upon receipt of the maximum cap sought in an application, the public entity's authorization to receive tax increment expires.(7)A public entity that receives approval of an application under this section:(a)receives approval only as to the contents of that application; and(b)shall comply with the requirements of this part for any additional or subsequent use of tax increment, as described in Subsection 63N-1a-502(3).

Section 6. Section 63N-1a-506 is enacted to read:63N-1a-506. Transparency.(1)(a)The office shall provide information in an approved application to utilize tax increment to the state auditor to be made available on the public finance website established under Section 67-3-12.(b)The state auditor shall coordinate with the office to ensure the information described in Subsection (1)(a) is posted on the public finance website in a uniform manner.(2)The office shall coordinate with collecting entities to recommend processes for the responsible and transparent collection of tax increment, including by implementing processes to ensure a public entity stops receiving tax increment once the public entity has received the maximum cap identified in the approved application.

Section 7. Effective Date.This bill takes effect on May 6, 2026.