Bill Summary – FastDemocracy

Enrolled Copy                                                                          S.B. 84
                      HOUSING AND TRANSIT REINVESTMENT ZONE
                                           AMENDMENTS
                                       2023 GENERAL SESSION
                                           STATE OF UTAH
                               Chief Sponsor: Wayne A. Harper
                                     House Sponsor: Casey Snider
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 LONG TITLE
 General Description:
        This bill amends provisions related to housing and transit reinvestment zones.
 Highlighted Provisions:
        This bill:
        < amends definitions;
        < amends provisions related to the objectives and required characteristics of a housing
 and transit reinvestment zone;
        < restricts how much land a proponent county may own within a housing and transit
 reinvestment zone;
        < requires a housing and transit reinvestment zone proposal to include certain maps of
 the proposed area;
        < requires the Governor's Office of Economic Opportunity to provide notice to certain
 relevant entities after receiving a housing and transit reinvestment zone proposal;
        < requires the State Tax Commission to provide feedback to a housing and transit
 reinvestment zone regarding the State Tax Commission's ability to administer the
 tax implications of the proposal;
        < amends the membership of the housing and transit reinvestment zone committee;
        < amends provisions regarding circumstances in which certain counties are allowed to
 submit a proposal for a housing and transit reinvestment zone;
        < provides a property owner near a public transit hub in a county with a small public
 transit district with certain vested development rights if the county failed to submit
       S.B. 84                                                                         Enrolled Copy
 an application for a housing and transit reinvestment zone before a certain deadline; and
        < makes technical changes.
 Money Appropriated in this Bill:
        None
 Other Special Clauses:
        None
 Utah Code Sections Affected:
 AMENDS:
        63N-3-602, as last amended by Laws of Utah 2022, Chapters 68, 433
        63N-3-603, as last amended by Laws of Utah 2022, Chapters 21, 406 and 433
        63N-3-604, as last amended by Laws of Utah 2022, Chapter 433
        63N-3-605, as last amended by Laws of Utah 2022, Chapter 433
42
 Be it enacted by the Legislature of the state of Utah:
        Section 1. Section 63N-3-602 is amended to read:
        63N-3-602. Definitions.
        As used in this part:
        (1) "Affordable housing" means housing occupied or reserved for occupancy by
 households with a gross household income equal to or less than 80% of the median gross
 income of the applicable municipal or county statistical area for households of the same size.
        (2) "Agency" means the same as that term is defined in Section 17C-1-102.
        (3) "Base taxable value" means a property's taxable value as shown upon the
 assessment roll last equalized during the base year.
        (4) "Base year" means, for a proposed housing and transit reinvestment zone area, a
 year beginning the first day of the calendar quarter determined by the last equalized tax roll
 before the adoption of the housing and transit reinvestment zone.
        (5) "Bus rapid transit" means a high-quality bus-based transit system that delivers fast
 and efficient service that may include dedicated lanes, busways, traffic signal priority,
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       Enrolled Copy                                                                              S.B. 84
 off-board fare collection, elevated platforms, and enhanced stations.
         (6) "Bus rapid transit station" means an existing station, stop, or terminal, or a
 proposed station, stop, or terminal that is specifically identified in a metropolitan planning
 organization's adopted long-range transportation plan and the relevant public transit district's
 five-year plan:
         (a) along an existing bus rapid transit line; or
         (b) along an extension to an existing bus rapid transit line or new bus rapid transit line.
         [(6)] (7) (a) "Commuter rail" means a heavy-rail passenger rail transit facility operated
 by a large public transit district.
         (b) "Commuter rail" does not include a light-rail passenger rail facility of a large public
 transit district.
         [(7) "Commuter rail station" means a station, stop, or terminal along an existing
 commuter rail line, or along an extension to an existing commuter rail line or new commuter
 rail line that is included in a metropolitan planning organization's adopted long-range
 transportation plan.]
         (8) "Commuter rail station" means an existing station, stop, or terminal, or a proposed
 station, stop, or terminal, which has been specifically identified in a metropolitan planning
 organization's adopted long-range transportation plan and the relevant public transit district's
 five-year plan:
         (a) along an existing commuter rail line;
         (b) along an extension to an existing commuter rail line or new commuter rail line; or
         (c) along a fixed guideway extension from an existing commuter rail line.
         [(8)] (9) (a) "Developable area" means the portion of land within a housing and transit
 reinvestment zone available for development and construction of business and residential uses.
         (b) "Developable area" does not include portions of land within a housing and transit
 reinvestment zone that are allocated to:
         (i) parks;
         (ii) recreation facilities;
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        S.B. 84                                                                          Enrolled Copy
         (iii) open space;
         (iv) trails;
         (v) publicly-owned roadway facilities; or
         (vi) other public facilities.
         [(9)] (10) "Dwelling unit" means one or more rooms arranged for the use of one or
 more individuals living together, as a single housekeeping unit normally having cooking,
 living, sanitary, and sleeping facilities.
         [(10)] (11) "Enhanced development" means the construction of mixed uses including
 housing, commercial uses, and related facilities.
         [(11)] (12) "Enhanced development costs" means extra costs associated with structured
 parking costs, vertical construction costs, horizontal construction costs, life safety costs,
 structural costs, conveyor or elevator costs, and other costs incurred due to the increased height
 of buildings or enhanced development.
         (13) "Fixed guideway" means the same as that term is defined in Section 59-12-102.
         [(12)] (14) "Horizontal construction costs" means the additional costs associated with
 earthwork, over excavation, utility work, transportation infrastructure, and landscaping to
 achieve enhanced development in the housing and transit reinvestment zone.
         [(13)] (15) "Housing and transit reinvestment zone" means a housing and transit
 reinvestment zone created pursuant to this part.
         [(14)] (16) "Housing and transit reinvestment zone committee" means a housing and
 transit reinvestment zone committee created pursuant to Section 63N-3-605.
         [(15)] (17) "Large public transit district" means the same as that term is defined in
 Section 17B-2a-802.
         [(16)] (18) "Light rail" means a passenger rail public transit system with right-of-way
 and fixed rails:
         (a) dedicated to exclusive use by light-rail public transit vehicles;
         (b) that may cross streets at grade; and
         (c) that may share parts of surface streets.
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        Enrolled Copy                                                                              S.B. 84
         (19) "Light rail station" means an existing station, stop, or terminal or a proposed
 station, stop, or terminal, which has been specifically identified in a metropolitan planning
 organization's adopted long-range transportation plan and the relevant public transit district's
 five-year plan:
         (a) along an existing light rail line; or
         (b) along an extension to an existing light rail line or new light rail line.
         [(17)] (20) "Metropolitan planning organization" means the same as that term is
 defined in Section 72-1-208.5.
         [(18)] (21) "Mixed use development" means development with a mix of multi-family
 residential use and at least one additional land use.
         [(19)] (22) "Municipality" means the same as that term is defined in Section 10-1-104.
         [(20)] (23) "Participant" means the same as that term is defined in Section 17C-1-102.
         [(21)] (24) "Participation agreement" means the same as that term is defined in Section
 17C-1-102, except that the agency may not provide and the person may not receive a direct
 subsidy.
         [(22)] (25) "Public transit county" means a county that has created a small public
 transit district.
         [(23)] (26) "Public transit hub" means a public transit depot or station where four or
 more routes serving separate parts of the county-created transit district stop to transfer riders
 between routes.
         [(24)] (27) "Sales and use tax base year" means a sales and use tax year determined by
 the first year pertaining to the tax imposed in Section 59-12-103 after the sales and use tax
 boundary for a housing and transit reinvestment zone is established.
         [(25)] (28) "Sales and use tax boundary" means a boundary created as described in
 Section 63N-3-604, based on state sales and use tax collection that corresponds as closely as
 reasonably practicable to the housing and transit reinvestment zone boundary.
         [(26)] (29) "Sales and use tax increment" means the difference between:
         (a) the amount of state sales and use tax revenue generated each year following the
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        S.B. 84                                                                         Enrolled Copy
 sales and use tax base year by the sales and use tax from the area within a housing and transit
 reinvestment zone designated in the housing and transit reinvestment zone proposal as the area
 from which sales and use tax increment is to be collected; and
        (b) the amount of state sales and use tax revenue that was generated from that same
 area during the sales and use tax base year.
        [(27)] (30) "Sales and use tax revenue" means revenue that is generated from the tax
 imposed under Section 59-12-103.
        [(28)] (31) "Small public transit district" means the same as that term is defined in
 Section 17B-2a-802.
        [(29)] (32) "Tax [commission] Commission" means the State Tax Commission created
 in Section 59-1-201.
        [(30)] (33) "Tax increment" means the difference between:
        (a) the amount of property tax revenue generated each tax year by a taxing entity from
 the area within a housing and transit reinvestment zone designated in the housing and transit
 reinvestment zone proposal as the area from which tax increment is to be collected, using the
 current assessed value and each taxing entity's current certified tax rate as defined in Section
 59-2-924; and
        (b) the amount of property tax revenue that would be generated from that same area
 using the base taxable value and each taxing entity's current certified tax rate as defined in
 Section 59-2-924.
        [(31)] (34) "Taxing entity" means the same as that term is defined in Section
 17C-1-102.
        [(32)] (35) "Vertical construction costs" means the additional costs associated with
 construction above four stories and structured parking to achieve enhanced development in the
 housing and transit reinvestment zone.
        Section 2. Section 63N-3-603 is amended to read:
        63N-3-603. Applicability, requirements, and limitations on a housing and transit
 reinvestment zone.
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        Enrolled Copy                                                                             S.B. 84
        (1) A housing and transit reinvestment zone proposal created under this part shall
 promote 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) improving efficiencies in parking and transportation, including walkability of
 communities near public transit facilities;
        (d) overcoming development impediments and market conditions that render a
 development cost prohibitive absent the proposal and incentives;
        [(c)] (e) conservation of water resources through efficient land use;
        [(d)] (f) improving air quality by reducing fuel consumption and motor vehicle trips;
        [(e)] (g) encouraging transformative mixed-use development and investment in
 transportation and public transit infrastructure in strategic areas;
        [(f)] (h) strategic land use and municipal planning in major transit investment corridors
 as described in Subsection 10-9a-403(2);
        [(g)] (i) increasing access to employment and educational opportunities; and
        [(h)] (j) increasing access to child care.
        (2) 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:
        (a) except as provided in Subsection (3), at least 10% of the proposed dwelling units
 within the housing and transit reinvestment zone are affordable housing units;
        (b) at least 51% of the developable area within the housing and transit reinvestment
 zone includes residential uses with, except as provided in Subsection (4)(c), an average of 50
 dwelling units per acre or greater;
        (c) mixed-use development; and
        (d) a mix of dwelling units to ensure that a reasonable percentage of the dwelling units
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        S.B. 84                                                                           Enrolled Copy
 has more than one bedroom.
         (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 class with a population greater than
 150,000 that is within a county of the first class, with an opportunity zone created pursuant to
 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 tax increment above the base year for a term of no more than 25 consecutive
 years on each parcel within a 45-year period not to exceed the tax increment amount approved
 in the housing and transit reinvestment zone proposal; and
         (iii) the commencement of collection of tax increment, for all or a portion of the
 housing and transit reinvestment zone, will be triggered by providing notice as described in
 Subsection (6).
         (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:
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        Enrolled Copy                                                                                S.B. 84
         (i) subject to Subsection (5):
         (A) does not exceed:
         (I) except as provided in Subsection (4)(b)(i)(A)(II) or (III), 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 pursuant to 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 mo