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H.B. 112
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REDEVELOPMENT AGENCY FINANCING
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REQUIREMENTS
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2000 GENERAL SESSION
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STATE OF UTAH
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Sponsor: Richard L. Walsh
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AN ACT RELATING TO SPECIAL DISTRICTS; MODIFYING DEFINITIONS RELATING TO
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TAX INCREMENT; LIMITING TAX INCREMENT TO THE EXCESS TAXES GENERATED
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BY THE COUNTY OR MUNICIPALITY THAT CREATED THE REDEVELOPMENT
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AGENCY; AND MAKING TECHNICAL CHANGES.
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This act affects sections of Utah Code Annotated 1953 as follows:
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AMENDS:
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17A-2-1202, as last amended by Chapter 320, Laws of Utah 1995
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17A-2-1247.5, as last amended by Chapters 21 and 194, Laws of Utah 1999
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Be it enacted by the Legislature of the state of Utah:
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Section 1.
Section
17A-2-1202
is amended to read:
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17A-2-1202. Definitions.
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As used in this part:
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(1) "Agency" means the legislative body of a community when designated by the
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legislative body itself to act as a redevelopment agency.
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(2) (a) "Base tax amount" means that portion of taxes that would be produced by the rate
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upon which the tax is levied each year [by or for all taxing agencies] upon the total sum of the
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taxable value of the taxable property in a redevelopment project area by or for:
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(i) for a redevelopment plan adopted before May 1, 2000, all taxing agencies; or
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(ii) for a redevelopment plan adopted on or after May 1, 2000, the community that created
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the agency.
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(b) For purposes of Subsection (2)(b), the taxable value of the taxable property in a
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redevelopment project area shall be as shown upon the assessment roll used in connection with the
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taxation of the property by the applicable taxing agencies, last equalized before the effective date
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of the:
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[(a)] (i) ordinance approving the plan for projects for which a preliminary plan has been
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prepared prior to April 1, 1993, and for which all of the following have occurred prior to July 1,
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1993: the agency blight study has been completed, and a hearing under Section
17A-2-1221
has
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in good faith been commenced by the agency; or
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[(b)] (ii) the first approved project area budget for projects for which a preliminary plan
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has been prepared after April 1, 1993, and for which any of the following have occurred after July
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1, 1993: the completion of the agency blight study, and the good faith commencement of the
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hearing by the agency under Section
17A-2-1221
; and
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[(c)] (iii) as adjusted by Sections
17A-2-1250.5
,
17A-2-1251
,
17A-2-1252
, and
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17A-2-1253
.
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(3) "Blighted area" or "blight" means:
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(a) for projects for which a preliminary plan has been prepared prior to April 1, 1993, and
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for which all of the following have occurred prior to July 1, 1993: the agency blight study has been
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completed, and a hearing under Section
17A-2-1221
has in good faith been commenced by the
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agency, an area used or intended to be used for residential, commercial, industrial, or other
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purposes or any combination of such uses which is characterized by two or more of the following
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factors:
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(i) defective design and character of physical construction;
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(ii) faulty interior arrangement and exterior spacing;
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(iii) high density of population and overcrowding;
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(iv) inadequate provision for ventilation, light, sanitation, open spaces, and recreation
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facilities;
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(v) age, obsolescence, deterioration, dilapidation, mixed character, or shifting of uses;
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(vi) economic dislocation, deterioration, or disuse, resulting from faulty planning;
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(vii) subdividing and sale of lots of irregular form and shape and inadequate size for proper
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usefulness and development;
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(viii) laying out of lots in disregard of the contours and other physical characteristics of
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the ground and surrounding conditions;
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(ix) existence of inadequate streets, open spaces, and utilities; and
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(x) existence of lots or other areas which are subject to being submerged by water.
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(b) For projects for which a preliminary plan has been prepared after April 1, 1993, and
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for which any of the following have occurred after July 1, 1993: the completion of the agency
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blight study, and the good faith commencement of the hearing by the agency under Section
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17A-2-1221
, when a finding of blight is required, an area with buildings or improvements, used
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or intended to be used for residential, commercial, industrial, or other urban purposes or any
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combination of these uses, which:
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(i) contains buildings and improvements, not including out-buildings, on at least 50% of
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the number of parcels and the area of those parcels is at least 50% of the project area; and
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(ii) is unfit or unsafe to occupy or may be conducive to ill health, transmission of disease,
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infant mortality, juvenile delinquency, or crime because of any three or more of the following
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factors:
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(A) defective character of physical construction;
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(B) high density of population and overcrowding;
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(C) inadequate provision for ventilation, light, sanitation, and open spaces;
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(D) mixed character and shifting of uses which results in obsolescence, deterioration, or
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dilapidation;
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(E) economic deterioration or continued disuse;
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(F) lots of irregular form and shape and inadequate size for proper usefulness and
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development, or laying out of lots in disregard of the contours and other physical characteristics
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of the ground and surrounding conditions;
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(G) existence of inadequate streets, open spaces, and utilities;
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(H) existence of lots or other areas which are subject to being submerged by water; and
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(I) existence of any hazardous or solid waste defined as any substance defined, regulated,
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or listed as "hazardous substances," "hazardous materials," "hazardous wastes," "toxic waste,"
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"pollutant," "contaminant," or "toxic substances," or identified as hazardous to human health or
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the environment under state or federal law or regulation.
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(c) For purposes of Subsection (3)(b), if a developer involved in the project area
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redevelopment or economic development causes any of the factors of blight listed in Subsection
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(b)(ii), the developer-caused blight may not be used as one of the three required elements of blight.
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Notwithstanding the provisions of this section, any blight caused by owners or tenants who may
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become developers under the provisions of Section
17A-2-1214
shall not be subject to this
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Subsection (3)(c).
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(4) "Bond" means any bonds, notes, interim certificates, debentures, or other obligations
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issued by an agency.
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(5) "Community" means a city, county, town, or any combination of these.
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(6) "Economic development" means the planning or replanning, design or redesign,
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development or redevelopment, construction or reconstruction, rehabilitation, business relocation
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or any combination of these, within all or part of a project area and the provision of office,
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industrial, manufacturing, warehousing, distribution, parking, public or other facilities, or
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improvements as may benefit the state or the community in order for a public or private employer
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to create additional jobs within the state.
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(7) "Federal government" means the United States or any of its agencies or
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instrumentalities.
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(8) "Legislative body" means the city council, city commission, county legislative body,
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or other legislative body of the community.
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(9) "Planning commission" means a city, town, or county planning commission established
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pursuant to law or charter.
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(10) "Project area" or "redevelopment project area" means an area of a community within
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a designated redevelopment survey area, the redevelopment of which is necessary to eliminate
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blight or provide economic development and which is selected by the redevelopment agency
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pursuant to this part.
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(11) "Project area budget" means, for projects for which a preliminary plan has been
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prepared after April 1, 1993, and for which any of the following have occurred after July 1, 1993:
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the completion of the agency blight study, and the good faith commencement of the hearing by the
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agency under Section
17A-2-1221
, a multiyear budget for the redevelopment plan prepared by the
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redevelopment agency showing:
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(a) the base year taxable value of the project area;
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(b) the projected tax increment of the project area, including the amount of any tax
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increment shared with other taxing districts which shall include:
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(i) the tax increment expected to be used to implement the redevelopment plan including
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the estimated amount of tax increment to be used for land acquisition, public, and infrastructure
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improvements, and loans, grants, or tax incentives to private and public entities; and
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(ii) the total principal amount of bonds expected to be issued by the redevelopment agency
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to finance the project;
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(c) the tax increment expected to be used to cover the cost of administering the project area
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plan;
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(d) a legal description for the portion of the project area from which tax increment will be
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collected pursuant to Section
17A-2-1247.5
, if the area from which tax increment is to be collected
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is less than the entire project area; and
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(e) for properties to be sold, the expected total cost of the property to the agency and the
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expected sales price to be paid by the purchaser.
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(12) "Public body" means the state, or any city, county, district, authority, or any other
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subdivision or public body of the state, their agencies, instrumentalities, or political subdivisions.
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(13) (a) "Redevelopment" means the planning, development, replanning, redesign,
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clearance, reconstruction, or rehabilitation, or any combination of these, of all or part of a project
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area, and the provision of residential, commercial, industrial, public, or other structures or spaces
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that are appropriate or necessary to eliminate blight in the interest of the general welfare, including
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recreational and other facilities incidental or appurtenant to them.
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(b) "Redevelopment" includes:
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(i) the alteration, improvement, modernization, reconstruction, or rehabilitation, or any
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combination of these, of existing structures in a project area;
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(ii) provision for open space types of use, such as streets and other public grounds and
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space around buildings, and public or private buildings, structures and improvements, and
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improvements of public or private recreation areas and other public grounds; and
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(iii) the replanning or redesign or original development of undeveloped areas as to which
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either of the following conditions exist:
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(A) the areas are stagnant or improperly utilized because of defective or inadequate street
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layout, faulty lot layout in relation to size, shape, accessibility, or usefulness, or for other causes;
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or
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(B) the areas require replanning and land assembly for reclamation or development in the
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interest of the general welfare.
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(14) "Redevelopment plan" means a plan developed by the agency and adopted by
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ordinance of the governing body of a community to guide and control redevelopment and
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economic development undertakings in a specific project area.
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(15) "Redevelopment survey area" or "survey area" means an area of a community
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designated by resolution of the legislative body or the governing body of the agency for study by
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the agency to determine if blight exists if redevelopment is planned, and if a redevelopment or
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economic development project or projects within the area are feasible.
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(16) "Taxes" include all levies on an ad valorem basis upon land, real property, personal
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property, or any other property, tangible or intangible.
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(17) "Taxing agencies" mean the public entities, including the state, any city, county, city
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and county, any school district, special district, or other public corporation, which levy property
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taxes within the project area.
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(18) "Tax increment" means:
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(a) for a redevelopment plan adopted before May 1, 2000, that portion of the levied taxes
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each year in excess of the base tax amount which excess amount is to be paid into a special fund
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of an agency; or
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(b) for a redevelopment plan adopted on or after May 1, 2000, that portion of the taxes
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levied each year by the community that created the agency, in excess of the base tax amount, which
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excess amount is to be paid into a special fund of an agency.
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Section 2.
Section
17A-2-1247.5
is amended to read:
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17A-2-1247.5. Tax increment financing -- Project area budget approval -- Payment
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of additional tax increment.
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(1) This section applies to projects for which a preliminary plan has been adopted on or
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after July 1, 1993.
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(2) (a) A taxing agency committee shall be created for each redevelopment or economic
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development project the redevelopment plan for which was adopted before May 1, 2000. The
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committee membership shall be selected as follows:
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(i) two representatives appointed by the school district in the project area;
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(ii) two representatives appointed by resolution of the county commission or county
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council for the county in which the project area is located;
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(iii) two representatives appointed by resolution of the city or town's legislative body in
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which the project area is located if the project is located within a city or town;
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(iv) a representative approved by the State School Board; and
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(v) one representative who shall represent all of the remaining governing bodies of the
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other local taxing agencies that levy taxes upon the property within the proposed project area. The
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representative shall be selected by resolution of each of the governing bodies of those taxing
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agencies within 30 days after the notice provided in Subsection
17A-2-1256
(3).
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(b) If the project is located within a city or town, a quorum of a taxing agency committee
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consists of five members. If the project is not located within a city or town, a quorum consists of
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four members.
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(c) A taxing agency committee formed in accordance with this section has the authority
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to:
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(i) represent all taxing entities in a project area and cast votes that will be binding on the
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governing boards of all taxing entities in a project area;
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(ii) negotiate with the agency concerning the redevelopment plan;
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(iii) approve or disapprove project area budgets under Subsection (3); and
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(iv) approve an exception to the limits on the value and size of project areas imposed by
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Section
17A-2-1210
, or the time and amount of tax increment financing under this section.
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(3) (a)(i) If the project area budget for a redevelopment plan adopted before May 1, 2000,
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does not allocate 20% of the tax increment for housing as provided in Subsection
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17A-2-1264
(2)(a):
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(A) an agency may not collect any tax increment for a project area until after the agency
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obtains the majority consent of a quorum of the taxing agency committee for the project area
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budget; and
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(B) a project area budget adopted under Subsection (3)(a)(i)(A) may be amended if the
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agency obtains the majority consent of a quorum of the taxing agency committee.
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(ii) If the project area budget for a redevelopment plan adopted before May 1, 2000
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allocates 20% of the tax increment for housing as provided in Subsection
17A-2-1264
(2)(a):
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(A) an agency may not collect tax increment from all or part of a project area until after:
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(I) the Olene Walker Housing Trust Fund Board, established under Title 9, Chapter 4, Part
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7, Olene Walker Housing Trust Fund, has certified the project area budget as complying with the
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requirements of Section
17A-2-1264
; and
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(II) the agency's governing body has approved and adopted the project area budget by a
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two-thirds vote; and
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(B) a project area budget adopted under Subsection (3)(a)(ii)(A) may be amended if:
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(I) the Olene Walker Housing Trust Fund Board, established under Title 9, Chapter 4, Part
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7, Olene Walker Housing Trust Fund, certifies the amendment as complying with the requirements
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of Section
17A-2-1264
; and
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(II) the agency's governing body approves and adopts the amendment by a two-thirds vote.
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(b)Within 30 days after the approval and adoption of a project area budget, each agency
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shall file a copy of the budget with the county auditor, the State Tax Commission, the state auditor,
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and each property taxing entity affected by the agency's collection of tax increment under the
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project area budget.
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(c) (i) Beginning on January 1, 1997, before an amendment to a project area budget is
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approved, the agency shall advertise and hold one public hearing on the proposed change in the
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project area budget.
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(ii) The public hearing under Subsection (3)(c)(i) shall be conducted according to the
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procedures and requirements of Subsection
17A-2-1222
(2), except that if the amended budget
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allocates a greater proportion of tax increment to a project area than was allocated to the project
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area under the previous budget, the advertisement shall state the percentage allocated under the
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previous budget and the percentage allocated under the amended budget.
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(d) If an amendment is not approved, the agency shall continue to operate under the
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previously approved, unamended project area budget.
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(4) (a) An agency may collect tax increment from all or a part of a project area. The tax
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increment shall be paid to the agency in the same manner and at the same time as payments of
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taxes to other taxing agencies to pay the principal of and interest on loans, moneys advanced to,
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or indebtedness, whether funded, refunded, assumed, or otherwise, to finance or refinance, in
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whole or in part, the redevelopment or economic development project and the housing projects and
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programs under Sections
17A-2-1263
and
17A-2-1264
.
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(b) (i) An agency may elect to be paid:
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(A) if 20% of the project area budget is not allocated for housing as provided in Subsection
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17A-2-1264
(2)(a):
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(I) 100% of annual tax increment for 12 years; or
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(II) 75% of annual tax increment for 20 years; or
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(B) if 20% of the project area budget is allocated for housing as provided in Subsection
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17A-2-1264
(2)(a):
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(I) 100% of annual tax increment for 15 years; or
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(II) 75% of annual tax increment for 24 years.
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(ii) Tax increment paid to an agency under this Subsection (4)(b) shall be paid for the
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applicable length of time beginning the first tax year the agency accepts tax increment from a
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project area.
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(c) An agency may receive a greater percentage of tax increment or receive tax increment
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for a longer period of time than that specified in Subsection (4)(b) if the agency obtains:
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(i) for a redevelopment plan adopted before May 1, 2000, the majority consent of the
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taxing agency committee; or
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(ii) for a redevelopment plan adopted on or after May 1, 2000, the consent of the
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legislative body of the community that created the agency.
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(5) (a) (i) The redevelopment plan shall provide that the portion of the taxes, if any, due
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to an increase in the tax rate by a taxing agency after the date the project area budget is approved
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[by the taxing agency committee] may not be allocated to and when collected paid into a special
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fund of the redevelopment agency according to the provisions of Subsection (4) unless [the taxing
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agency committee approves], at the time the project area budget is approved, the inclusion of the
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increase in the tax rate [at the time the project area budget] is approved by:
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(A) for a redevelopment plan adopted before May 1, 2000, the taxing agency committee;
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or
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(B) for a redevelopment plan adopted on or after May 1, 2000, the legislative body of the
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community that created the agency.
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(ii) If approval of the inclusion of the increase in the tax rate is not obtained, the portion
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of the taxes attributable to the increase in the rate shall be distributed by the county to the taxing
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agency imposing the tax rate increase in the same manner as other property taxes.
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(b) The amount of the tax rate to be used in determining tax increment shall be increased
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or decreased by the amount of an increase or decrease as a result of:
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(i) a statute enacted by the Legislature, a judicial decision, or an order from the State Tax
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Commission to a county to adjust or factor its assessment rate under Subsection
59-2-704
(2);
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(ii) a change in exemption provided in Utah Constitution Article XIII, Section 2, or Section
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59-2-103
;
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(iii) an increase or decrease in the percentage of fair market value, as defined under
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Section
59-2-102
; or
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(iv) a decrease in the certified tax rate under Subsection
59-2-924
(2)(c) or (2)(d)(i).
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(c) (i) Notwithstanding the increase or decrease resulting from Subsection (5)(b), the
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amount of money allocated to, and when collected paid to the agency each year for payment of
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bonds or other indebtedness may not be less than would have been allocated to and when collected
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paid to the agency each year if there had been no increase or decrease under Subsection (5)(b).
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(ii) For a decrease resulting from Subsection (5)(b)(iv), the taxable value for the base year
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under Subsection
17A-2-1202
(2) or
17A-2-1247
(2)(a), as the case may be, shall be reduced for any
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year to the extent necessary, including below zero, to provide an agency with approximately the
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same amount of money the agency would have received without a reduction in the county's
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certified tax rate if:
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(A) in that year there is a decrease in the certified tax rate under Subsection
59-2-924
(2)(c)
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or (2)(d)(i);
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(B) the amount of the decrease is more than 20% of the county's certified tax rate of the
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previous year; and
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(C) the decrease results in a reduction of the amount to be paid to the agency under Section
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17A-2-1247
or
17A-2-1247.5
.
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(6) (a) For redevelopment plans first adopted before May 4, 1993, beginning January 1,
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1994, all of the taxes levied and collected upon the taxable property in the redevelopment project
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under Section
59-2-906.1
which are not pledged to support bond indebtedness and other
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contractual obligations are exempt from the provisions of Subsection (4).
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(b) For redevelopment plans first adopted after May 3, 1993, beginning January 1, 1994,
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all of the taxes levied and collected upon the taxable property in the redevelopment project under
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Section
59-2-906.1
are exempt from the provisions of Subsection (4).
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(7) (a) In addition to the amounts and periods that an agency may elect to be paid tax
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increment under Subsection (4)(b), an agency may elect to be paid 100% of annual tax increment
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for an additional period, as provided in Subsection (7)(b), beyond those periods provided under
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Subsection (4)(b), without the approval of the taxing agency committee or the legislative body of
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the community that created the agency, if the tax increment funding for the additional period is
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used:
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(i) for an agency in a city in which is located all or a portion of an interchange on I-15 or
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that would directly benefit from an interchange on I-15, to pay some or all of the cost of the
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installation, construction, or reconstruction of:
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(A) an interchange on I-15; or
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(B) frontage and other roads connecting to the interchange, as determined by the
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Department of Transportation created under Section
72-1-201
and the Transportation Commission
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created under Section
72-1-301
; or
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(ii) for an agency in a city of the first class, to pay some or all of the cost of the land for
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and installation and construction of a recreational facility, as defined in Subsection
59-12-702
(3),
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or a cultural facility, including parking and infrastructure improvements related to the recreational
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or cultural facility.
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(b) The additional period for which an agency may be paid 100% of annual tax increment
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under Subsection (7)(a) is an additional:
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(i) 13 years, for an agency that initially elected to be paid under Subsection (4)(b)(i)(A)(I);
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(ii) five years, for an agency that initially elected to be paid under Subsection
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(4)(b)(i)(A)(II);
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(iii) ten years, for an agency that initially elected to be paid under Subsection
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(4)(b)(i)(B)(I); and
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(iv) one year, for an agency that initially elected to be paid under Subsection
327
(4)(b)(i)(B)(II).
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(c) This Subsection (7) applies only to an agency established by a city in which:
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(i) for an agency in a city in which is located all or a portion of an interchange on I-15 or
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that would directly benefit from an interchange on I-15, the installation, construction, or
331
reconstruction of an interchange on I-15 or frontage or other roads connecting to the interchange
332
has begun on or before June 30, 2000; and
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(ii) for an agency in a city of the first class, the installation or construction of a recreational
334
facility, as defined in Subsection
59-12-702
(3), or a cultural facility has begun on or before June
335
30, 2000.
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(d) Notwithstanding any other provision of this Subsection (7), a school district may not
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receive less tax increment because of application of the other provisions of this Subsection (7) than
338
it would have received without those provisions.
Legislative Review Note
as of 1-20-00 4:03 PM
A limited legal review of this legislation raises no obvious constitutional or statutory concerns.