Second Substitute S.B. 45

Senator Jerry W. Stevenson proposes the following substitute bill:


             1     
MILITARY INSTALLATION DEVELOPMENT AUTHORITY

             2     
AMENDMENTS

             3     
2014 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Jerry W. Stevenson

             6     
House Sponsor: Brad L. Dee

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill modifies Title 19, Chapter 6, Part 5, Solid Waste Management Act, and Title
             11      63H, Chapter 1, Military Installation Development Authority Act.
             12      Highlighted Provisions:
             13          This bill:
             14          .    modifies the definition of "solid waste management facility" to include an auxiliary
             15      energy facility that is connected to an existing resource recovery facility;
             16          .    repeals Section 19-6-504 , which discusses certain requirements for a public entity
             17      that issues bonds to finance a solid waste management facility;
             18          .    defines the term "development" to include certain activities within a project area;
             19          .    modifies the definition of "property tax" to not include a privilege tax on a portion
             20      of a facility on military land leased back to the military under certain circumstances;
             21          .    describes certain exemptions from the Condominium Ownership Act;
             22          .    modifies the definition of "publicly owned infrastructure and improvements";
             23          .    repeals the MIDA energy tax; and
             24          .    provides that the issuance of a certificate of occupancy by the authority, or an entity
             25      designated by the authority, determines when improvements on a parcel within a


             26      project area become subject to property tax.
             27      Money Appropriated in this Bill:
             28          None
             29      Other Special Clauses:
             30          None
             31      Utah Code Sections Affected:
             32      AMENDS:
             33           19-6-502 , as last amended by Laws of Utah 2008, Chapters 89 and 360
             34           63H-1-102 , as last amended by Laws of Utah 2013, Chapter 362
             35           63H-1-202 , as last amended by Laws of Utah 2010, Chapter 9
             36           63H-1-203 , as last amended by Laws of Utah 2013, Chapter 362
             37           63H-1-501 , as last amended by Laws of Utah 2013, Chapter 362
             38           63H-1-502 , as last amended by Laws of Utah 2013, Chapter 362
             39      REPEALS:
             40           19-6-504 , as renumbered and amended by Laws of Utah 1991, Chapter 112
             41           63H-1-204 , as enacted by Laws of Utah 2013, Chapter 362
             42     
             43      Be it enacted by the Legislature of the state of Utah:
             44          Section 1. Section 19-6-502 is amended to read:
             45           19-6-502. Definitions.
             46          As used in this part:
             47          (1) "Governing body" means the governing board, commission, or council of a public
             48      entity.
             49          (2) "Jurisdiction" means the area within the incorporated limits of:
             50          (a) a municipality;
             51          (b) a special service district;
             52          (c) a municipal-type service district;
             53          (d) a service area; or
             54          (e) the territorial area of a county not lying within a municipality.
             55          (3) "Long-term agreement" means an agreement or contract having a term of more than
             56      five years but less than 50 years.


             57          (4) "Municipal residential waste" means solid waste that is:
             58          (a) discarded or rejected at a residence within the public entity's jurisdiction; and
             59          (b) collected at or near the residence by:
             60          (i) a public entity; or
             61          (ii) a person with whom the public entity has as an agreement to provide solid waste
             62      management.
             63          (5) "Public entity" means:
             64          (a) a county;
             65          (b) a municipality;
             66          (c) a special service district under Title 17D, Chapter 1, Special Service District Act;
             67          (d) a service area under Title 17B, Chapter 2a, Part 9, Service Area Act; or
             68          (e) a municipal-type service district created under Title 17, Chapter 34,
             69      Municipal-Type Services to Unincorporated Areas.
             70          (6) "Requirement" means an ordinance, policy, rule, mandate, or other directive that
             71      imposes a legal duty on a person.
             72          (7) "Residence" means an improvement to real property used or occupied as a primary
             73      or secondary detached single-family dwelling.
             74          (8) "Resource recovery" means the separation, extraction, recycling, or recovery of
             75      usable material, energy, fuel, or heat from solid waste and the disposition of it.
             76          (9) "Short-term agreement" means a contract or agreement having a term of five years
             77      or less.
             78          (10) (a) "Solid waste" means a putrescible or nonputrescible material or substance
             79      discarded or rejected as being spent, useless, worthless, or in excess of the owner's needs at the
             80      time of discard or rejection, including:
             81          (i) garbage;
             82          (ii) refuse;
             83          (iii) industrial and commercial waste;
             84          (iv) sludge from an air or water control facility;
             85          (v) rubbish;
             86          (vi) ash;
             87          (vii) contained gaseous material;


             88          (viii) incinerator residue;
             89          (ix) demolition and construction debris;
             90          (x) a discarded automobile; and
             91          (xi) offal.
             92          (b) "Solid waste" does not include sewage or another highly diluted water carried
             93      material or substance and those in gaseous form.
             94          (11) "Solid waste management" means the purposeful and systematic collection,
             95      transportation, storage, processing, recovery, or disposal of solid waste.
             96          (12) "Solid waste management facility" means a facility employed for solid waste
             97      management, including:
             98          (a) a transfer station;
             99          (b) a transport system;
             100          (c) a baling facility;
             101          (d) a landfill; and
             102          (e) a processing system, including:
             103          (i) a resource recovery facility;
             104          (ii) a facility for reducing solid waste volume;
             105          (iii) a plant or facility for compacting, composting, or pyrolization of solid waste;
             106          (iv) an incinerator;
             107          (v) a solid waste disposal, reduction, or conversion facility; [and]
             108          (vi) a facility for resource recovery of energy consisting of:
             109          (A) a facility for the production, transmission, distribution, and sale of heat and steam;
             110          (B) a facility for the generation and sale of electric energy to a public utility,
             111      municipality, or other public entity that owns and operates an electric power system on March
             112      15, 1982; and
             113          (C) a facility for the generation, sale, and transmission of electric energy on an
             114      emergency basis only to a military installation of the United States[.]; and
             115          (vii) an auxiliary energy facility that is connected to a facility for resource recovery of
             116      energy as described in Subsection (12)(e)(vi), that:
             117          (A) is fueled by natural gas, landfill gas, or both;
             118          (B) consists of a facility for the production, transmission, distribution, and sale of


             119      supplemental heat and steam to meet all or a portion of the heat and steam requirements of a
             120      military installation of the United States; and
             121          (C) consists of a facility for the generation, transmission, distribution, and sale of
             122      electric energy to a public utility, a municipality described in Subsection (12)(e)(vi)(B), or a
             123      political subdivision created under Title 11, Chapter 13, Interlocal Cooperation Act.
             124          Section 2. Section 63H-1-102 is amended to read:
             125           63H-1-102. Definitions.
             126          As used in this chapter:
             127          (1) "Authority" means the Military Installation Development Authority, created under
             128      Section 63H-1-201 .
             129          (2) "Base taxable value" means:
             130          (a) for military land or other land that was exempt from a property tax at the time that a
             131      project area was created that included the military land or other land, a taxable value of zero; or
             132          (b) for private property that is included in a project area, the taxable value of the
             133      property within any portion of the project area, as designated by board resolution, from which
             134      tax increment will be collected, as shown upon the assessment roll last equalized before the
             135      year in which the authority issues a building permit for a building within that portion of the
             136      project area.
             137          (3) "Board" means the governing body of the authority created under Section
             138      63H-1-301 .
             139          (4) (a) "Dedicated tax collections" means the property tax that remains after the
             140      authority is paid the tax increment it is entitled to receive under Subsection 63H-1-501 (1), for a
             141      property tax levied by:
             142          (i) a county, including a district the county has established under Subsection 17-34-3 (2)
             143      to levy a property tax under Title 17, Chapter 34, Municipal-Type Services to Unincorporated
             144      Areas; or
             145          (ii) an included municipality.
             146          (b) "Dedicated tax collections" does not include a property tax levied by a county to
             147      assess and collect property taxes under Subsections 59-2-1602 (1) and (4).
             148          (5) (a) "Development" means an activity occurring on land within a project area that is
             149      owned or operated by the military, the authority, another public entity, or a private entity.


             150          (b) "Development" includes the demolition, construction, reconstruction, modification,
             151      expansion, or improvement of a building, facility, utility, landscape, parking lot, park, trail, or
             152      recreational amenity.
             153          [(5)] (6) "Development project" means a project to develop land within a project area.
             154          [(6)] (7) "Elected member" means a member of the authority board who:
             155          (a) is a mayor or member of a legislative body appointed under Subsection
             156      63H-1-302 (2)(b); or
             157          (b) (i) is appointed to the authority board under Subsection 63H-1-302 (2)(a) or (3); and
             158          (ii) concurrently serves in an elected state, county, or municipal office.
             159          [(7)] (8) "Included municipality" means a municipality, some or all of which is
             160      included within a project area.
             161          [(8) "Military Installation Development Authority energy tax" or "MIDA energy tax"
             162      means the tax levied under Section 63H-1-204 .]
             163          (9) "Military land" means land or a facility, including leased land or a leased facility,
             164      that is part of or affiliated with a base, camp, post, station, yard, center, or installation under the
             165      jurisdiction of the U.S. Department of Defense or the Utah National Guard.
             166          (10) "Municipal energy tax" means a municipal energy sales and use tax under Title
             167      10, Chapter 1, Part 3, Municipal Energy Sales and Use Tax Act.
             168          (11) "Municipal services revenue" means revenue that the authority:
             169          (a) collects from the authority's:
             170          (i) levy of a municipal energy tax;
             171          (ii) levy of a MIDA energy tax;
             172          (iii) levy of a telecommunications tax;
             173          (iv) imposition of a transient room tax; and
             174          (v) imposition of a resort communities tax;
             175          (b) receives under Subsection 59-12-205 (2)(b)(ii); and
             176          (c) receives as dedicated tax collections.
             177          (12) "Municipal tax" means a municipal energy tax, [MIDA energy tax,]
             178      telecommunications tax, transient room tax, or resort communities tax.
             179          (13) "Project area" means the land, including military land, whether consisting of a
             180      single contiguous area or multiple noncontiguous areas, described in a project area plan or draft


             181      project area plan, where the development project set forth in the project area plan or draft
             182      project area plan takes place or is proposed to take place.
             183          (14) "Project area budget" means a multiyear projection of annual or cumulative
             184      revenues and expenses and other fiscal matters pertaining to a project area that includes:
             185          (a) the base taxable value of property in the project area;
             186          (b) the projected tax increment expected to be generated within the project area;
             187          (c) the amount of the tax increment expected to be shared with other taxing entities;
             188          (d) the amount of the tax increment expected to be used to implement the project area
             189      plan, including the estimated amount of the tax increment to be used for land acquisition,
             190      public improvements, infrastructure improvements, and loans, grants, or other incentives to
             191      private and public entities;
             192          (e) the tax increment expected to be used to cover the cost of administering the project
             193      area plan;
             194          (f) if the tax increment is to be collected at different times or from different portions of
             195      the project area, or both:
             196          (i) (A) the tax identification numbers of the parcels from which the tax increment will
             197      be collected; or
             198          (B) a legal description of the portion of the project area from which the tax increment
             199      will be collected; and
             200          (ii) an estimate of when other portions of the project area will become subject to
             201      collection of the tax increment; and
             202          (g) for property that the authority owns or leases and expects to sell or sublease, the
             203      expected total cost of the property to the authority and the expected selling price or lease
             204      payments.
             205          (15) "Project area plan" means a written plan that, after its effective date, guides and
             206      controls the development within a project area.
             207          (16) (a) "Property tax" includes a privilege tax, except as described in Subsection
             208      (16)(b), and each levy on an ad valorem basis on tangible or intangible personal or real
             209      property.
             210          (b) "Property tax" does not include a privilege tax on the taxable value attributable to a
             211      portion of a facility leased to the military for a calendar year when:


             212          (i) a lessee of military land has constructed a facility on the military land that is part of
             213      a project area;
             214          (ii) the lessee leases space in the facility to the military for the entire calendar year; and
             215          (iii) the lease rate paid by the military for the space is $1 or less for the entire calendar
             216      year, not including any common charges that are reimbursements for actual expenses.
             217          (17) "Public entity" means:
             218          (a) the state, including each department or agency of the state; or
             219          (b) a political subdivision of the state, including a county, city, town, school district,
             220      local district, special service district, or interlocal cooperation entity.
             221          [(18) "Publicly owned infrastructure and improvements" means water, sewer, storm
             222      drainage, electrical, telecommunications, and other similar systems and lines, streets, roads,
             223      curb, gutter, sidewalk, walkways, parking facilities, public transportation facilities, and other
             224      buildings, facilities, infrastructure, and improvements that:]
             225          [(a) benefit the public; and]
             226          [(b) are:]
             227          [(i) publicly owned or owned by a utility; or]
             228          [(ii) publicly maintained or operated by the authority or another public entity.]
             229          (18) (a) "Publicly owned infrastructure and improvements" means infrastructure,
             230      improvements, facilities, or buildings that benefit the public and are:
             231          (i) publicly owned by the military, the authority, or another public entity;
             232          (ii) owned by a utility; or
             233          (iii) publicly maintained or operated by the military, the authority, or another public
             234      entity.
             235          (b) "Publicly owned infrastructure and improvements" includes:
             236          (i) facilities, lines, or systems that provide water, chilled water, steam, sewer, storm
             237      drainage, natural gas, electricity, or telecommunications; and
             238          (ii) streets, roads, curb, gutter, sidewalk, walkways, solid waste facilities, parking
             239      facilities, and public transportation facilities.
             240          (19) "Remaining municipal services revenue" means municipal services revenue that
             241      the authority has not spent during its fiscal year for municipal services as provided in
             242      Subsection 63H-1-503 (1).


             243          (20) "Resort communities tax" means a sales and use tax imposed under Section
             244      59-12-401 .
             245          (21) "Taxable value" means the value of property as shown on the last equalized
             246      assessment roll as certified by the county assessor.
             247          (22) "Tax increment" means the difference between:
             248          (a) the amount of property tax revenues generated each tax year by all taxing entities
             249      from the area within a project area designated in the project area plan as the area from which
             250      the tax increment is to be collected, using the current assessed value of the property; and
             251          (b) the amount of property tax revenues that would be generated from that same area
             252      using the base taxable value of the property.
             253          (23) "Taxing entity" means a public entity that levies a tax on property within a project
             254      area.
             255          (24) "Telecommunications tax" means a telecommunications license tax under Title
             256      10, Chapter 1, Part 4, Municipal Telecommunications License Tax Act.
             257          (25) "Transient room tax" means a tax under Section 59-12-352 .
             258          Section 3. Section 63H-1-202 is amended to read:
             259           63H-1-202. Applicability of other law.
             260          (1) The authority or land within a project area is not subject to:
             261          (a) Title 10, Chapter 9a, Municipal Land Use, Development, and Management Act;
             262          (b) Title 17, Chapter 27a, County Land Use, Development, and Management Act;
             263          (c) [any] ordinances or regulations of a county or municipality, including those relating
             264      to land use, health, business license, or franchise; or
             265          (d) the jurisdiction of [any] a local district under Title 17B, Limited Purpose Local
             266      Government Entities - Local Districts, or a special service district under Title 17D, Chapter 1,
             267      Special Service District Act.
             268          (2) The authority is subject to and governed by Sections 63E-2-106 , 63E-2-107 ,
             269      63E-2-108 , 63E-2-109 , 63E-2-110 , and 63E-2-111 , but is not otherwise subject to or governed
             270      by Title 63E, Independent Entities Code.
             271          (3) (a) The definitions in Section 57-8-3 apply to this Subsection (3).
             272          (b) Notwithstanding the provisions of Title 57, Chapter 8, Condominium Ownership
             273      Act:


             274          (i) if the military is the owner of land on which a condominium project is constructed,
             275      it is not required to sign, execute, or record a declaration of a condominium project; and
             276          (ii) if a condominium unit is owned by the authority and leased to the military for $1 or
             277      less per calendar year, not including any common charges that are reimbursements for actual
             278      expenses:
             279          (A) the condominium unit is not subject to any liens under Title 57, Chapter 8,
             280      Condominium Ownership Act; and
             281          (B) condominium unit owners within the same building or commercial condominium
             282      project may agree on any method of allocation and payment of common area expenses,
             283      regardless of the size or par value of each unit.
             284          Section 4. Section 63H-1-203 is amended to read:
             285           63H-1-203. Levy of a municipal tax -- Direct tax payment to MIDA.
             286          (1) A levy of a municipal energy tax, [MIDA energy tax,] telecommunications tax,
             287      transient room tax, or resort communities tax, including an increase in the applicable tax rate,
             288      requires the affirmative vote of:
             289          (a) the authority board; and
             290          (b) a majority of all elected members of the authority board.
             291          (2) If the authority board levies a municipal energy tax, a consumer who acquires
             292      taxable energy shall pay the tax directly to the authority on a monthly basis if the consumer's
             293      energy supplier is not required under federal law to collect the tax in the manner described in
             294      Section 10-1-307 .
             295          Section 5. Section 63H-1-501 is amended to read:
             296           63H-1-501. Authority receipt and use of tax increment -- Distribution of tax
             297      increment.
             298          (1) (a) The authority may:
             299          (i) subject to Subsection (1)(b), receive up to 75% of the tax increment for up to 25
             300      years, as provided in this part; and
             301          (ii) use the tax increment during and after the period described in Subsection (1)(a)(i).
             302          (b) With respect to a parcel located within a project area, the 25-year period described
             303      in Subsection (1)(a)(i) shall begin on the day on which the authority receives the first tax
             304      increment from that parcel.


             305          (2) Improvements on a parcel within a project area become subject to property tax on
             306      January 1 immediately following the day on which the authority or an entity designated by the
             307      authority issues a certificate of occupancy with respect to those improvements.
             308          (3) Each county that collects property tax on property within a project area shall pay
             309      and distribute to the authority the tax increment and dedicated tax collections that the authority
             310      is entitled to collect under this title, in the manner and at the time provided in Section
             311      59-2-1365 .
             312          (4) (a) The board shall determine by resolution when the entire project area or an
             313      individual parcel within a project area is subject to tax increment.
             314          (b) The board shall amend the project area budget to reflect whether a parcel within a
             315      project area is subject to tax increment.
             316          Section 6. Section 63H-1-502 is amended to read:
             317           63H-1-502. Allowable uses of tax increment and other funds.
             318          (1) Other than municipal services revenue, the authority may use tax increment and
             319      other funds available to the authority:
             320          (a) for any purpose authorized under this chapter;
             321          (b) for administrative, overhead, legal, and other operating expenses of the authority;
             322          (c) to pay for, including financing or refinancing, all or part of the development of land
             323      within the project area from which the tax increment or other funds were collected, including
             324      assisting the ongoing operation of a development or facility within the project area;
             325          (d) to pay the cost of the installation and construction of publicly owned infrastructure
             326      and improvements within the project area from which the tax increment funds were collected;
             327          (e) to pay the cost of the installation of publicly owned infrastructure and
             328      improvements, including a passenger ropeway, as defined in Section 72-11-102 , outside the
             329      project area if:
             330          (i) the authority board determines by resolution that the infrastructure and
             331      improvements are of benefit to the project area; and
             332          (ii) for a passenger ropeway, at least one end of the ropeway is located within the
             333      project area; and
             334          (f) to pay the principal and interest on bonds issued by the authority.
             335          (2) The authority may use revenue generated from the operation of publicly owned


             336      infrastructure operated by the authority or improvements operated by the authority to:
             337          (a) operate and maintain the infrastructure or improvements; and
             338          (b) pay for authority operating expenses, including administrative, overhead, and legal
             339      expenses.
             340          (3) For purposes of Subsection (1), the authority may use:
             341          (a) tax revenues received under Subsection 59-12-205 (2)(b)(ii); and
             342          (b) resort communities tax revenues generated from a project area that contains private
             343      land[; and].
             344          [(c) MIDA energy tax revenue, received under Section 63H-1-204 , which does not
             345      have to be used in the project area where the revenue was generated.]
             346          (4) The determination of the authority board under Subsection (1)(e) regarding benefit
             347      to the project area is final.
             348          Section 7. Repealer.
             349          This bill repeals:
             350          Section 19-6-504 , Assurance of sufficient revenue to pay bonds.
             351          Section 63H-1-204 , MIDA energy tax.


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