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H.B. 316 Enrolled
This act provides incentives for economic development by creating aerospace and
aviation development zones for new commercial development. The act provides partial
rebates of new taxes generated as an incentive for the creation of new jobs and economic
development for qualified new projects that locate in the development zones, with the
incentives financed out of the new state revenues generated by the projects.
This act affects sections of Utah Code Annotated 1953 as follows:
9-2-2001, Utah Code Annotated 1953
9-2-2002, Utah Code Annotated 1953
9-2-2003, Utah Code Annotated 1953
9-2-2004, Utah Code Annotated 1953
9-2-2005, Utah Code Annotated 1953
9-2-2006, Utah Code Annotated 1953
9-2-2007, Utah Code Annotated 1953
9-2-2008, Utah Code Annotated 1953
9-2-2009, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 9-2-2001 is enacted to read:
(1) The Legislature finds that:
(a) the fostering and development of industry in Utah is a state public purpose
necessary to assure the welfare of its citizens, the growth of its economy, and adequate
employment for its citizens; and
(b) Utah loses prospective high paying jobs, economic impacts, and corresponding
incremental new state revenues to competing states due to a wide variety of competing economic
development incentives offered by those states.
(2) This part is enacted to address the loss of new economic growth in Utah and the
corresponding loss of incremental new state revenues by providing tax increment financial
incentives to attract new commercial projects in development zones located on or contiguous to
airports in the state.
Section 2. Section 9-2-2002 is enacted to read:
As used in this part:
(1) "Department" means the Department of Community and Economic Development
acting through its executive director.
(2) "Development zone" means the Aerospace and Aviation Development Zone created
under Section 9-2-2003 .
(3) "Indirect state revenues" means the imputed use of a generally accepted indirect
economic multiplier as defined by a fiscal impact model approved by the Governor's Office of
Planning and Budget to quantify by estimate the indirect state tax revenues that are in addition to
direct state tax revenues.
(4) "New state revenues" means incremental new state tax revenues that are generated as
a result of new economic commercial projects in a development zone, to include the state's
portion of sales taxes, and company and employee income taxes derived from the projects,
together with indirect state revenues generated by the projects, but not to include any portion of
sales taxes earmarked for local governments or other taxing jurisdictions eligible for sales tax
(5) "Partial rebates" means returning a portion of the new state revenues generated by
new commercial projects to companies or individuals that have created new economic growth
within a development zone.
Section 3. Section 9-2-2003 is enacted to read:
9-2-2003. Creation of development zones.
The department, with approval by the board, may create an Aerospace and Aviation
Development Zone at or around any airport in the state that satisfies the following requirements:
(1) the airport shall have an instrumental landing system;
(2) the airport shall have a manned air traffic control tower;
(3) the airport shall have land available for commercial development on, or contiguous
to, the airport; and
(4) Subsections (1) and (2) sunset on January 1, 2006, unless the Legislature determines
Section 4. Section 9-2-2004 is enacted to read:
9-2-2004. Development incentives.
(1) The department, with the approval of the board, may enter into agreements providing
for partial rebates of new state revenues generated by new commercial projects to companies or
individuals that create new economic growth within the development zone.
(2) In no event may the partial rebates be in excess of 50% of the new state revenues in
any given year.
(3) (a) The partial rebates may not exceed 30% of the new state revenues generated over
the life of a new commercial project.
(b) For purposes of this part, the life of a new commercial project is limited to 20 years.
(4) Partial rebates are subject to any other limitations adopted by board rule made in
accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act.
Section 5. Section 9-2-2005 is enacted to read:
9-2-2005. Qualifications for credits and rebates.
The board shall set standards to qualify for partial rebates under this part, subject to the
(1) no partial rebates may be paid prior to verification, by the department, of the new
state revenues upon which the tax rebate is based;
(2) partial rebates can only be paid on projects that are within the development zone;
(3) partial rebates can only be paid on projects that bring new, incremental jobs to the
(4) qualifying projects must involve direct investment within the geographic boundaries
of the development zone;
(5) only aerospace and aviation industry projects, as defined by board rule made in
accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, are eligible for
partial rebates; and
(6) in order to claim payments representing partial rebates of new state revenues, a
(a) enter into a board-approved agreement with the department and affirm by contractual
agreement to keep supporting records for at least four years after final payment of partial rebates
under this part;
(b) submit to audits for verification of the amounts claimed; and
(c) comply with other conditions as are required by the department.
Section 6. Section 9-2-2006 is enacted to read:
9-2-2006. Payment procedure.
Any payment of partial rebates of new state revenues shall be made in accordance with
procedures adopted by the department and approved by the board, to include the following:
(1) within 90 days of the end of each calendar year, any company or individual that has
entered into an agreement with the department under this part shall provide the department with
documentation of the new state revenues it claims to have generated during that calendar year,
the documentation to include the types of taxes and corresponding amounts of taxes paid directly
to the Utah State Tax Commission, and sales taxes paid to Utah vendors and suppliers that are
indirectly paid to the Utah State Tax Commission;
(2) the department shall audit or review the documentation, make a determination of the
amount of partial rebates earned under the agreement, and forward a board-approved request for
payment of that amount to the Division of Finance, together with information regarding the name
and address of the payee and any other information reasonably requested by the division; and
(3) the Division of Finance shall pay a partial rebate from the Economic Incentive
Restricted Account created in Section 9-2-2009 upon receipt of documentation and the
board-approved request from the department under Subsection (2).
Section 7. Section 9-2-2007 is enacted to read:
9-2-2007. Department's authority.
(1) The department, with approval of the board and within the limitations of this part,
(a) the structure and amount of any partial rebates offered under this part;
(b) the economic impacts and job creation necessary to qualify for the incentive; and
(c) the other terms and conditions of any agreement entered into under this part.
(2) In reviewing claims for partial rebates of new state revenues, the department may
(a) as the amount of employee income taxes paid, the amount of employee income taxes
withheld and transmitted to the Utah State Tax Commission as evidenced by payroll records
rather than adjusting for the difference between taxes withheld and taxes actually paid through
filing by employees' annual income tax statements; and
(b) as the amount of company income taxes paid, the amount of corporate franchise and
income taxes estimated and transmitted to the Utah State Tax Commission as evidenced by
quarterly payment records rather than adjusting for the difference between estimated taxes paid
quarterly and taxes actually paid through the filing of the corporation's annual income tax
(3) In accordance with Title 63, Chapter 46a, Utah Administrative Rulemaking Act, the
board may make, amend, and revoke rules regarding the development zone and partial rebates
offered within it, provided the rules are consistent with state and federal law.
(4) (a) The department shall make a report to the Legislature's Workforce and
Community and Economic Development Interim Committee on:
(i) the success of attracting new commercial projects to development zones under this
part and the corresponding increase in new, incremental jobs;
(ii) the period of time over which partial rebates of new state revenues shall be granted
under this part; and
(iii) the economic impact on the state related to generating new state revenues and
rebating a portion of those revenues under this part.
(b) The department shall make the reports prior to the 2005 General Session of the
Legislature to enable the committee to determine whether this part should be modified during the
2005 General Session.
Section 8. Section 9-2-2008 is enacted to read:
9-2-2008. Coordination with Industrial Assistance Fund.
Projects that qualify for partial rebates of new state revenues under this part and enter into
agreements with the department under this part are ineligible to qualify for additional financial
assistance from the Industrial Assistance Fund under Section 9-2-1204 .
Section 9. Section 9-2-2009 is enacted to read:
9-2-2009. Establishment of the Economic Incentive Restricted Account.
(1) There is created a restricted account in the General Fund known as the Economic
Incentive Restricted Account.
(2) The account shall be used to make payments as required under Section 9-2-2006 .
(3) (a) The Division of Finance shall transfer from the General Fund the amount
estimated by the department from new state revenues needed to make the partial rebates as
allowed in Section 9-2-2006 .
(b) The amount transferred into the account shall be reduced by any unencumbered
balances in the account.
(4) Not withstanding Subsections 51-5-3 (23)(b) and 63-38-9 (4)(c), after receiving a
request for payment, in accordance with Subsection 9-2-2006 (2), the Division of Finance shall
pay the partial rebates as allowed in Section 9-2-2006 , from the account.
(5) (a) Prior to the beginning of each fiscal year, the department shall notify the
Governor's Office of Planning and Budget, the Office of Legislative Fiscal Analyst, and the
Division of Finance of:
(i) the estimated amount of new state revenues created from economic growth in the
development zones, the estimate detailed by the amounts from:
(A) sales tax;
(B) income tax; and
(C) corporate franchise and income tax; and
(ii) the estimated amount partial rebates projected to be paid in the upcoming fiscal year,
the estimates detailed by the amounts from:
(A) sales tax;
(B) income tax; and
(C) corporate franchise and income tax.
(b) The department shall update the estimates required by Subsections (5)(a)(i) and (ii)
within 30 days of the signing of each new agreement entered into under this part.
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