1     
TAXING ENTITY AMENDMENTS

2     
2022 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Mike Winder

5     
Senate Sponsor: Wayne A. Harper

6     

7     LONG TITLE
8     General Description:
9          This bill modifies provisions of the Community Reinvestment Agency Act.
10     Highlighted Provisions:
11          This bill:
12          ▸     defines the term, "nonagreement tax entity";
13          ▸     authorizes a community reinvestment agency to receive tax increment related to a
14     community reinvestment project area from a tax entity that has not entered into an
15     interlocal agreement with the agency under certain circumstances;
16          ▸     describes the process for an agency to consider and pass a nonagreement tax entity
17     resolution; and
18          ▸     makes technical changes.
19     Money Appropriated in this Bill:
20          None
21     Other Special Clauses:
22          None
23     Utah Code Sections Affected:
24     AMENDS:
25          17C-5-204, as last amended by Laws of Utah 2019, Chapter 333
26     ENACTS:
27          17C-5-207, Utah Code Annotated 1953

28     

29     Be it enacted by the Legislature of the state of Utah:
30          Section 1. Section 17C-5-204 is amended to read:
31          17C-5-204. Community reinvestment project area subject to interlocal agreement
32     -- Consent of a taxing entity to an agency receiving project area funds.
33          (1) As used in this section, "successor taxing entity" means a taxing entity that:
34          (a) is created after the day on which:
35          (i) an interlocal agreement is executed to allow an agency to receive a taxing entity's
36     project area funds; [and] or
37          (ii) a nonagreement tax entity resolution has been passed in accordance with Section
38     17C-5-207; and
39          (b) levies or imposes a tax within the community reinvestment project area.
40          (2) This section applies to:
41          (a) a community reinvestment project area that is subject to an interlocal agreement
42     under Subsection 17C-5-202(1)(a)[.]; and
43          (b) a taxing entity that is subject to a nonagreement tax entity resolution as described in
44     Subsection (11).
45          (3) For the purpose of implementing a community reinvestment project area plan, an
46     agency may negotiate with a taxing entity for all or a portion of the taxing entity's project area
47     funds.
48          (4) A taxing entity may agree to allow an agency to receive the taxing entity's project
49     area funds by executing an interlocal agreement with the agency in accordance with Title 11,
50     Chapter 13, Interlocal Cooperation Act.
51          (5) Before an agency may use project area funds received under an interlocal
52     agreement described in Subsection (4), the agency shall:
53          (a) obtain a written certification, signed by an attorney licensed to practice law in the
54     state, stating that the agency and the taxing entity have each followed all legal requirements
55     relating to the adoption of the interlocal agreement; and
56          (b) provide a signed copy of the certification described in Subsection (5)(a) to the
57     taxing entity.
58          (6) An interlocal agreement described in Subsection (4) shall:

59          (a) if the interlocal agreement provides for the agency to receive tax increment, state:
60          (i) the method of calculating the amount of the taxing entity's tax increment from the
61     community reinvestment project area that the agency receives, including the base year and base
62     taxable value;
63          (ii) the project area funds collection period; and
64          (iii) the percentage of the taxing entity's tax increment or the maximum cumulative
65     dollar amount of the taxing entity's tax increment that the agency receives;
66          (b) if the interlocal agreement provides for the agency to receive the taxing entity's
67     sales and use tax revenue, state:
68          (i) the method of calculating the amount of the taxing entity's sales and use tax revenue
69     that the agency receives;
70          (ii) the project area funds collection period; and
71          (iii) the percentage of sales and use tax revenue or the maximum cumulative dollar
72     amount of sales and use tax revenue that the agency receives;
73          (c) include a copy of the community reinvestment project area budget; and
74          (d) prohibit a taxing entity from proportionately reducing the amount of project area
75     funds the taxing entity consents to pay to an agency under this section by the amount of any
76     direct expenditures the taxing entity makes within the project area for the benefit of the project
77     area or the agency.
78          (7) A school district may consent to allow an agency to receive tax increment from the
79     school district's basic levy only to the extent that the school district also consents to allow the
80     agency to receive tax increment from the school district's local levy.
81          (8) The parties may amend an interlocal agreement under this section by mutual
82     consent.
83          (9) A taxing entity's consent to allow an agency to receive project area funds under this
84     section is not subject to the requirements of Section 10-8-2.
85          (10) An interlocal agreement executed by a taxing entity under this section may be
86     enforced by or against any successor taxing entity.
87          (11) A nonagreement tax entity resolution that has been passed in accordance with
88     Section 17C-5-207 may be enforced against any successor taxing entity.
89          Section 2. Section 17C-5-207 is enacted to read:

90          17C-5-207. Tax increment funding from resolution.
91          (1) As used in this section, a "nonagreement tax entity" means a lone taxing entity
92     within a community reinvestment project area that has not agreed to enter into an interlocal
93     agreement with an agency in accordance with Section 17C-5-204, and where every other taxing
94     entity within the community reinvestment project area has entered into an interlocal agreement
95     with the agency in accordance with Sections 17C-5-204 and 17C-5-205.
96          (2) This section applies only to a community reinvestment project area created on or
97     after May 4, 2022.
98          (3) An agency may receive tax increment from a nonagreement tax entity in accordance
99     with the provisions of this section.
100          (4) (a) Within 30 days after the day on which an open and public meeting, as described
101     in Section 17C-5-205, has been held adopting one or more interlocal agreements such that each
102     taxing entity within a community reinvestment project area save one has entered into an
103     interlocal agreement with an agency, an agency may provide notice to a nonagreement tax
104     entity that the agency will hold an open and public meeting to consider requiring tax increment
105     from the nonagreement tax entity as authorized by this section.
106          (b) An open and public meeting to consider requiring tax increment from the
107     nonagreement tax entity, shall be held no sooner than 30 days after the day on which notice is
108     provided to the nonagreement tax entity in accordance with Subsection (4)(a) and no later than
109     90 days after the day on which the last open and public meeting was held to approve one or
110     more interlocal agreements as described in Subsection (4)(a).
111          (c) At an open and public meeting to consider requiring tax increment from a
112     nonagreement tax entity, the agency board:
113          (i) shall provide the nonagreement tax entity with the opportunity to present to the
114     board the reasons why the nonagreement tax entity has not entered into an interlocal agreement
115     with the agency;
116          (ii) may take no further action or may adopt a resolution requiring the nonagreement
117     tax entity to provide tax increment towards the community reinvestment project:
118          (A) in a percentage determined by the board, but that may be no more than the lowest
119     percentage of tax increment that has been agreed to by each taxing entity that has entered into
120     an interlocal agreement with the agency; and

121          (B) for a time period determined by the board, but that may be no longer than the
122     shortest time period of providing tax increment that has been agreed to by each taxing entity
123     that has entered into an interlocal agreement with the agency.
124          (5) An agency that will receive tax increment for a community reinvestment project
125     area under a nonagreement tax entity resolution as described in Subsection (4) shall, within 30
126     days after the day on which the resolution is adopted, file a copy of the resolution with:
127          (a) the State Tax Commission, the State Board of Education, and the state auditor; and
128          (b) the auditor of the county in which the community reinvestment project area is
129     located.
130          (6) A county that collects property tax on property within a community reinvestment
131     project area that is subject to a nonagreement tax entity resolution shall, in accordance with
132     Section 59-2-1365, pay and distribute to the agency the tax increment that the agency is
133     authorized to receive under the resolution.