Tax Increment Amendments

3
63N-3-603
0
Tax Increment Amendments
2026 GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Kathleen A. Riebe
House Sponsor:
LONG TITLE
General Description:
This bill addresses tax increments for a housing and transit reinvestment zone proposal.
Highlighted Provisions:
This bill:
amends, for certain housing and transit reinvestment zones proposed by a municipality or
county:
the term of years and period in which a property tax increment may be captured; and
the period in which the collection of a property tax increment is triggered; and
makes technical and conforming changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
63N-3-603
, as last amended by Laws of Utah 2025, First Special Session, Chapter 15
Be it enacted by the Legislature of the state of Utah:
Section 1. Section
63N-3-603
is amended to read:
63N-3-603
. Applicability, requirements, and limitations on a housing and transit
reinvestment zone.
(1)
A housing and transit reinvestment zone proposal created under this part shall
demonstrate how the proposal addresses the following objectives:
(a)
higher utilization of public transit;
(b)
increasing availability of housing, including affordable housing, and fulfillment of
moderate income housing plans;
(c)
promoting and encouraging development of owner-occupied housing;
(d)
improving efficiencies in parking and transportation, including walkability of
communities near public transit facilities;
(e)
overcoming development impediments and market conditions that render a
development cost prohibitive absent the proposal and incentives;
(f)
conserving water resources through efficient land use;
(g)
improving air quality by reducing fuel consumption and motor vehicle trips;
(h)
encouraging transformative mixed-use development and investment in transportation
and public transit infrastructure in strategic areas;
(i)
strategic land use and municipal planning in major transit investment corridors as
described in Subsection
10-20-404(2)
;
(j)
increasing access to employment and educational opportunities; and
(k)
increasing access to child care.
(2)
(a)
In order to accomplish the objectives described in Subsection
(1)
, a municipality
or public transit county that initiates the process to create a housing and transit
reinvestment zone as described in this part shall ensure that the proposal for a
housing and transit reinvestment zone includes:
(i)
except as provided in Subsection
(3)
, at least 12% of the proposed dwelling units
within the housing and transit reinvestment zone are affordable housing units,
with:
(A)
up to 9% of the proposed dwelling units occupied or reserved for occupancy
by households with a gross household income equal to or less than 80% of the
county median gross income for households of the same size; and
(B)
at least 3% of the proposed dwelling units occupied or reserved for occupancy
by households with a gross household income equal to or less than 60% of the
county median gross income for households of the same size;
(ii)
except as provided in Subsection
(2)(c)
, a housing and transit reinvestment zone
shall include:
(A)
at least 51% of the developable area within a housing and transit reinvestment
zone as residential uses; and
(B)
an average of at least 50 dwelling units per acre within the acreage of the
housing and transit reinvestment zone dedicated to residential uses;
(iii)
mixed-use development; and
(iv)
a mix of dwelling units to ensure that at least 25% of the dwelling units have
more than one bedroom.
(b)
(i)
If a housing and transit reinvestment zone is phased, a municipality or public
transit county shall ensure that a housing and transit reinvestment zone is phased
and developed to provide the required 12% of affordable housing units in each
phase of development.
(ii)
A municipality or public transit county may allow a housing and transit
reinvestment zone to be phased and developed in a manner to provide more of the
required affordable housing units in early phases of development.
(iii)
A municipality or public transit county shall include in a housing and transit
reinvestment zone proposal an affordable housing plan, which may include deed
restrictions, to ensure the affordable housing required in the proposal will continue
to meet the definition of affordable housing at least throughout the entire term of
the housing and transit reinvestment zone.
(c)
For a housing and transit reinvestment zone proposed by a public transit county at a
public transit hub, or for a housing and transit reinvestment zone proposed by a
municipality at a bus rapid transit station, the housing and transit reinvestment zone
shall include:
(i)
at least 51% of the developable area within a housing and transit reinvestment
zone as residential uses; and
(ii)
an average of at least 39 dwelling units per acre within the acreage of the housing
and transit reinvestment zone dedicated to residential uses.
(3)
A municipality or public transit county that, at the time the housing and transit
reinvestment zone proposal is approved by the housing and transit reinvestment zone
committee, meets the affordable housing guidelines of the United States Department of
Housing and Urban Development at 60% area median income is exempt from the
requirement described in Subsection
(2)(a)
.
(4)
(a)
A municipality may only propose a housing and transit reinvestment zone at a
commuter rail station, and a public transit county may only propose a housing and
transit reinvestment zone at a public transit hub, that:
(i)
subject to Subsection
(5)(a)
:
(A)
(I)
except as provided in Subsection
(4)(a)(i)(A)(II)
, for a municipality,
does not exceed a 1/3 mile radius of a commuter rail station;
(II)
for a municipality that is a city of the first or second class that is within a
county of the first or second class, with an opportunity zone created in
accordance with Section 1400Z-1, Internal Revenue Code, does not exceed
a 1/2 mile radius of a commuter rail station located within the opportunity
zone; or
(III)
for a public transit county, does not exceed a 1/3 mile radius of a public
transit hub; and
(B)
has a total area of no more than 125 noncontiguous acres;
(ii)
subject to Section
63N-3-607
, proposes the capture of a maximum of 80% of each
taxing entity's property tax increment above the base year for a term of no more
than
25
15
consecutive years on each parcel within a
45-year
30-year
period not
to exceed the property tax increment amount approved in the housing and transit
reinvestment zone proposal; and
(iii)
the commencement of collection of property tax increment, for all or a portion of
the housing and transit reinvestment zone project area, shall be triggered by
providing notice as described in Subsection
(6)
, but a housing and transit
reinvestment zone proposal may not propose or include triggering more than three
property tax increment collection periods for the same project during the
applicable 45-year period
.
(b)
A municipality or public transit county may only propose a housing and transit
reinvestment zone at a light rail station or bus rapid transit station that:
(i)
subject to Subsection
(5)
:
(A)
does not exceed:
(I)
except as provided in Subsection
(4)(b)(i)(A)(II)
, (III), or (4)(e), a 1/4 mile
radius of a bus rapid transit station or light rail station;
(II)
for a municipality that is a city of the first class with a population greater
than 150,000 that is within a county of the first class, a 1/2 mile radius of a
light rail station located in an opportunity zone created in accordance with
Section 1400Z-1, Internal Revenue Code; or
(III)
a 1/2 mile radius of a light rail station located within a master-planned
development of 500 acres or more; and
(B)
has a total area of no more than 100 noncontiguous acres;
(ii)
subject to Subsection
(4)(c)
and Section
63N-3-607
, proposes the capture of a
maximum of 80% of each taxing entity's property tax increment above the base
year for a term of no more than 15 consecutive years on each parcel within a
30-year period not to exceed the property tax increment amount approved in the
housing and transit reinvestment zone proposal; and
(iii)
the commencement of collection of property tax increment, for all or a portion of
the housing and transit reinvestment zone project area, shall be triggered by
providing notice as described in Subsection
(6)
, but a housing and transit
reinvestment zone proposal may not propose or include triggering more than three
property tax increment collection periods for the same project during the
applicable 30-year period.
(c)
For a housing and transit reinvestment zone proposed by a public transit county at a
public transit hub, or for a housing and transit reinvestment zone proposed by a
municipality at a bus rapid transit station, if the proposed housing density within the
housing and transit reinvestment zone is between 39 and 49 dwelling units per acre,
the maximum capture of each taxing entity's property tax increment above the base
year is 60%.
(d)
A municipality that is a city of the first class with a population greater than 150,000
in a county of the first class as described in Subsections
(4)(a)(i)(A)(II)
and
(4)(b)(i)(A)(II)
may only propose one housing and transit reinvestment zone within
an opportunity zone.
(e)
(i)
Subject to Subsection
(4)(e)(ii)
, the radius restrictions described in Subsection
(4)(b)(i)
do not apply, and a housing and transit reinvestment zone may extend to
an area between two light rail stations located within a city of the third class if the
two light rail stations are within a .95 mile distance on the same light rail line.
(ii)
If a housing and transit reinvestment zone is extended to accommodate two light
rail stations as described in Subsection
(4)(e)(i)
:
(A)
the housing and transit reinvestment zone is limited to a total area not to
exceed 100 noncontiguous acres; and
(B)
the housing and transit reinvestment zone may not exceed a 1/4 mile radius
from the light rail stations or any point on the light rail line between the two
stations.
(f)
If a parcel within the housing and transit reinvestment zone is included as an area that
is part of a project area, as that term is defined in Section
17C-1-102
, and created
under Title 17C, Chapter 1, Agency Operations, that parcel may not be triggered for
collection unless the project area funds collection period, as that term is defined in
Section
17C-1-102
, has expired.
(5)
(a)
For a housing and transit reinvestment zone for a commuter rail station, if a parcel
is intersected by the relevant radius limitation, the full parcel may be included as part
of the housing and transit reinvestment zone area and will not count against the
limitations described in Subsection
(4)(a)(i)
.
(b)
For a housing and transit reinvestment zone for a light rail or bus rapid transit
station, if a parcel is intersected by the relevant radius limitation, the full parcel may
be included as part of the housing and transit reinvestment zone area and will not
count against the limitations described in Subsection
(4)(b)(i)
.
(c)
A housing and transit reinvestment zone may not be smaller than 10 acres.
(6)
(a)
The notice of commencement of collection of property tax increment required in
Subsection
(4)(a)(iii)
or
(4)(b)(iii)
shall be sent by mail or electronically to the
following entities no later than December 31 of the year before the year for which the
property tax increment collection is proposed to commence:
(i)
the State Tax Commission;
(ii)
the State Board of Education;
(iii)
the state auditor;
(iv)
the auditor of the county in which the housing and transit reinvestment zone is
located;
(v)
each taxing entity affected by the collection of property tax increment from the
housing and transit reinvestment zone; and
(vi)
the Governor's Office of Economic Opportunity.
(b)
The notice described in Subsection
(4)(a)(iii)
or
(4)(b)(iii)
may not be triggered until
the date on which the housing and transit reinvestment zone proposal is approved by
the housing and transit reinvestment zone committee.
(7)
(a)
The maximum number of housing and transit reinvestment zones at light rail
stations, not including a convention center reinvestment zone, is eight in any given
county.
(b)
Within a county of the first class, the maximum number of housing and transit
reinvestment zones at bus rapid transit stations is three.
(c)
Within a county of the first class, the maximum total combined number of housing
and transit reinvestment zones described in Subsections
(7)(a)
and
(b)
and first home
investment zones created under Part 16, First Home Investment Zone Act, is 11.
(8)
(a)
For purposes of this Subsection
(8)
, "entitlement agreement" means:
(i)
a land use application;
(ii)
a rezone petition; or
(iii)
a request, petition, or application to:
(A)
enact or approve a development agreement; or
(B)
to amend or modify a development agreement.
(b)
This Subsection
(8)
applies to a specified county, as defined in Section
17-80-101
,
that has created a small public transit district on or before January 1, 2022.
(c)
To accomplish the objectives described in Subsection
(1)
, an owner of undeveloped
property within an unincorporated county shall have the right to develop and build a
mixed-use development if:
(i)
the owner has submitted an entitlement agreement to the county on or before
December 31, 2022, and is within a 1/3 mile radius of a public transit hub in a
county described in Subsection
(8)(b)
, including parcels that are intersected by the
1/3 mile radius; and
(ii)
the county described in Subsection
(8)(b)
has failed to approve the entitlement
agreement described in Subsection
(8)(c)(i)
by ordinance before December 31,
2022.
(d)
The mixed use development described in Subsection
(8)(c)
shall include the
following:
(i)
(A)
(I)
a maximum number of dwelling units equal to 30 multiplied by the
total acres of developable area within the mixed-use development dedicated
exclusively to residential use; or
(II)
a maximum number of dwelling units equal to 15 multiplied by the total
acres of the mixed-use development; and
(B)
at least 33% of the dwelling units as affordable housing;
(ii)
commercial uses, including office, retail, educational, and healthcare in support of
the mixed-use development constituting no more than 1/3 of the total planned
gross building square footage of the subject parcels; and
(iii)
any other infrastructure element necessary or reasonable to support the
mixed-use development, including:
(A)
parking infrastructure;
(B)
streets;
(C)
sidewalks;
(D)
parks; and
(E)
trails.
(e)
(i)
The mixed-use development described in this Subsection
(8)
may qualify for a
housing and transit reinvestment zone described in Subsection
(4)(a)
.
(ii)
The county described in Subsection
(8)(b)
may propose a housing and transit
reinvestment zone in accordance with this part, if the housing and transit
reinvestment zone includes:
(A)
(I)
an average of at least 30 dwelling units per acre within the acreage of the
housing and transit reinvestment zone dedicated to residential use; or
(II)
a minimum number of 14 dwelling units per acre on average within the
acreage of the housing and transit reinvestment zone; and
(B)
at least 33% of the dwelling units as affordable housing units.
(f)
A county may not take an action or enforce an agreement, ordinance, regulation, or
requirement that prevents or creates development impediments to the development of
a mixed-use development as described in this Subsection
(8)
.
(g)
A county action to approve or implement the development of a mixed-use
development as described in this Subsection
(8)
shall constitute an administrative
action taken by the county and does not require county legislative action.
Section 2.
Effective Date.
This bill takes effect on
May 6, 2026
.
2-3-26 2:43 PM