S.B. 206 Tax Amendments: transcript

Thank you. This is kind of a fun bill. It started out simple, just, uh, changing the name of the multi-county, uh, appraisal trust. So we got further into it. We decided there were some things that could be consolidated, including a handful of House and Senate bills into, into this bill here. Um, and by doing that, we, uh, brought in a whole bunch of other stakeholders. So we're, we're dealing with, uh, with a lot of good in this bill. Let me, lemme clarify what's going on here. We're renaming mcat, the Statewide Tax Administration Technology Solutions Program. We're moving some of the, uh, redevelopment agency reporting from the Governor's Office of Economic Opportunity into this new, uh, stats program. The reason for doing that is, is right now each county that has a CRA will go through and submit, will, will have to send information to the CRA and they will have to, and it's, it's all the tax increments data, and they'll have to take that information. The crass have to go through and manually input that, uh, paper stuff that was electronic into the goo into their electronic. And then they add a bunch of data and, uh, descriptors and things like this. This eliminates a huge manual process because this program now will be able to pull from each county and populate the fields as to how much tax increment each entity is receiving, how much they're entitled to receive, how much is left. And then the taxing entities will be able to populate, uh, fields with the regular date of what is going on. Uh, we're putting a additional information on this, uh, system so that you can go through and have all of the initial CRE creation documents from the redevelopment project areas, from the, uh, from the TIFF entities. And those are like mid a inland port pouring of the mountain, uh, development Commission, uh, fair Park Authority. So you'll have everything in one repository, easy to look at, easy to understand, and will allow us as legislators to go and others stakeholders to go through and query the system and see exactly how much tax increment we've authorized and where it is being spent, how much time is left on a project area. Um, it really is a good, um, thing to, to enhance oversight and clarification, property value services and things like that. It's just kind of a fun little bill where it enhances transparency and clarity of what's going on with the taxes in the state. I gotta have fun with one bill today.

It does. Um, so there is a sub, or excuse me, an amendment online and, and I'm assuming you'll want us to adopt that at Some point? Well, that's, that's the amendment to, to sub three, correct? Correct. Yeah. Yeah.

As we are dealing with, uh, with the, uh, taxing entities, we realized we needed to tweak some language in that to make sure that it was operable and administrable by those special taxing entities might, et cetera. So that's what it does. It's a clear cleanup after the third sub was adopted. Okay.

Thank you Mr. Chair. Uh, just a few questions to help me understand this a little better. So, uh, are there policy changes in this or is it just mostly just bringing things together in one place? It is, no, there's no policy changes in this. This is just aggregating data and data providers and, and reporting into a single system. Okay. And then the, when they refer to a commission, are they referring to the tax commission? Tax commission? Yes. Okay. Alright. Just wanna make sure. Um, and, uh, can you just tell me what factoring is?

Yeah, I I can, it, it's, can I have brandy come up? I haven't had to define that term in several, more like six or eight years. 'cause I, I don't want to mislead you on all the different nuances of factoring. I was hoping she'd come up, that's why I asked that tough question.

I'll be brief in the interest of time, but basically when county, We need, just let a big note, just for the record, sorry. Randy Grace, Utah Association of Counties. So essentially when they look at trends in market value and they look at comparisons to what counties have the property valued at, they might issue a factoring order, which basically just means that in mass appraisal practices, they would factor rather than looking at individual parcels, they factor in area according to market, um, analysis of valuation. So it's just an adjustment based on the, the local market area. It's a mass appraisal, um, Technique. Okay. Thank you.

Appreciate it. That's all I have.

Thank you. Thank you. Uh, Mr. Chair? Uh, yeah, I just, uh, had one quick question. I was reading this and it's, it's kind of all over the place a lot in there. Uh, did, does this expand the, the use of any of these, uh, CRAs or PIs or, or zones or, or is it just kind of

No, this, this aggregates reporting that used to be done to multiple places into a single location. So it's uniform and retrievable.

Got it. Thank you. Okay.

Yeah. I'll, uh, I'll move, I'll move the first amendment on SB 2 0 6, third Sub. Okay. That motion is in order. Would you like to speak to that? Uh, no thanks. I'll waive Okay.

It's, it's a good agreed to amendment.

I'll, And this is just for the motion to adopt the amendment. Yeah, No, I'll waive. Okay.

Sure. I'll be glad to, uh, uh, I move that we pass out SB 2 0 6 third sub as amended with a favorable recommendation.

Um, I think it's, I like the idea of simplifying things and bringing it together. 'cause it's all in one area you don't get lost in, in the legislation. So, um, and I appreciate there's no policy changes in this, so thank you.

I appreciate that motion and, uh, I appreciate all the parties have worked with me for a little while to get this bill done. Right.

Nope. I'll pass then back to the motion. Okay.

Yep. Okay.

Thank you. I'd move to DeLeT and Title and Body Senate bill 2 0 6 and replace with first substitute Senate Bill 2 0 6. Um, maybe I can just do this has some technical cleanups to what we're doing. Um, the underlying purpose of this is to clarify how the administration of Utah statewide Property Set tax system is handled. Um, it transfers the responsibilities of multi-county appraisal trust to designated fund manager and clarifies Utah State Tax Commission Division of Finance's role in own in oversight. As you know, uh, the MCAT currently, uh, handles the statewide property tax system known as Cam or Puma, depending on who you talk to for valuation property. There's a designated, uh, two line items on your property tax bill. And in discussion with the stakeholders, we found out that there's a problem with the word trust. You know, having trust in code for what the, that organization is. So we're changing that to fund manager and just moving all the funds and everything through a more, uh, accountable and, uh, managed process. But everything will stay the same. All the assets that the counties have put in will still be used and, uh, the management will be the same, but the name is name will be changed. That's my presentation on the sub and on the bill.

Oh, she can talk now. Why not? It's part of the presentation. Thank

You, Senator. Uh, maybe just some additional clarification. A couple years ago, um, the association was named as trustee, so multi-County Appraisal trust. And first it is a trust, but, um, technically it's actually an interlocal entity. With UAC being named as the trustee. We were trying to create some clarification over responsibility and accountability. And so with the trust having, or the interlocal entity having a board of directors, but UAC being named as the trustee, we were just trying to clarify, is it the UAC executive committee or a board of directors for the interlocal entity that has responsibility for these funds? Mm-hmm. And we were really wanting to clarify that. So what this bill does is just clarify that the funding will go through division of finance. Um, the association will submit a budget, so it does create some accountability as well as clarifying who is responsible. It also requires that we would report to interim committee each October on what I would say is not necessarily a financial audit, but more or less a performance audit because these funds are coming to an entity that has some responsibility to accomplish the goals and directives from the, uh, legislature on creating a statewide property tax system. And we intend to do so. And, and we'll report annually on the progress that's been made on that, uh, development.

The, the, the sub replaces the amendment. Okay. Because more things came in of technical cleanups, we do not need to do the amendment.

Moved. Okay.

Thank you and move that we, uh, favorably recommend pass out for substitute Senate bill to zero six.

I'll let you speak to that and some I'll waive. Okay.

Yes. After meeting with, uh, after having this bill out there public, uh, there's a lot of discussion and what we've done is we've incorporated a handful of other bills into this as well as met with the stakeholders with the redevelopment agencies, uh, goo inland port, uh, might and others. This Bill third substitute represents the agreement on that, uh, dealing with, uh, valuation taxation of, uh, uh, personal property in telecommunication services. And most importantly, this bill goes through and creates a new system which we've lovingly called Stats, which is the statewide tax administration and Technology solution system that replaces the former MCAT system that allows the, uh, the, uh, the program manager at, uh, at the county to go through and put a lot of, put all of the tax information online, easily reportable, and then has an agreed to, uh, and enhanced reporting that used to be done at EO and ZO altogether, which goes through and reduces a lot of manual processes into an automated system for greater transparency and clarity. And we have, uh, I believe, agreement from all the parties on this change and what they're, uh, what they're reporting and, uh, making sure that they get all their documents online and public.

Uh, no. It just, it's a great bill and I think it will really enhance everybody's ability to understand how much tax in tax tax increment is out there and, uh, how it's been authorized.

No, I just have the next bill up.

you. This bill goes to, uh, consolidates a number of other bills and proposals dealing with, uh, tax increment financing, reporting and reforms. Uh, it creates unified statewide program or format focused on transparency reporting and administration of tax increment. It establishes the statewide tax administration Technology solutions program and a program manager in order to operate that. And it consolidates things between the county go EEO and other and local cities into one seamless, uh, software program that will be able to provide us the information that we need and other entities need, uh, dealing with tax increment. That's what the bill does.

Thank you. And move the third substitute Senate bill 2 0 6 pass.

Lewin Aye. Brammer bus colmore Escamia. Aye. Fillmore Grover a Harper Aye. Kins Aye. Ipson Aye. Johnson. Aye. Juab McKay Mikel Milner Musman Owens pitcher Plum rebi Sandal Stevenson Stratton Aye. Bickers er aye. Wilson. Aye. Winterton President Adams

Senator Harper. Senator Harper, we Motion to circle, we do not have the fiscal note.

Senator Vickers, uh, Dito Motion.

Uh, this is the bill that goes through and changes the MCAT into the stats system to go to increase transparency in reporting on, uh, agencies that go through and deal with tax increment. Uh, the house added a couple reporting items, items added one item on transparency, clarified new growth, um, and then uh, did something on, uh, or, uh, clarified the issue. Uh, some of the tax increment reports for local authorities. And that's what the bill does. And with that I move to Concur.

Senator Balderree blew in Ramer. Copy Bus Colmore as Camilla Fillmore Grover Harper Aye. Hankins Ipson Johnson. Kwan McKay Mikel Milner Aye. Musselman Owens pitcher Plum Rebi Sandal Stevenson Stratton Vickers Weiler Wilson Winterton. President Adams Aye.

Representative Walter. Thank you Mr. Speaker move that we adopt the fourth substitute.

Yes. It just clarifies the proper treatment of property, uh, personal property tax, uh, in a, um, uh, at the end of a tiff or a, uh, uh, other kind of public finance tool. So it just, it's proper treatment to, uh, of personal property tax.

Thank you Mr. Speaker. Uh, Senate Bill 2 0 6 is the bill that some of you have been waiting a very long time for. If you've been concerned about or trying to understand what's actually going on with various kinds of tax increment financing. I'm talking about PIs, I'm talking about tiffs, I'm talking about, uh, crass. I'm talking about, uh, the authorities like the Inland Port and MAA and, uh, fair Park, et cetera. If you're, if you're just been trying to figure out how to get your arms around what's happening in this space, uh, this is a very important bill for you. Uh, so what we're doing here is, uh, first of all, uh, looping in all of the various, uh, uh, entities that have access to tax increment. One of the reasons why this bill is so long is because we have to pick up all those pieces of code and then say these particular, uh, um, these particular governmental entities are required to participate in this process of reporting. So then to the actual reporting metrics. In order to use the public finance tools like a pit or a tax increment or an infrastructure financing district, you want to use these tools. What has to happen is there has to be an authorization meeting. This is a meeting where essentially the public body would say, we're going to use a public finance tool. And within 30 days they have to submit a report to the new, uh, it used to be called the Multi-County Appraisal Trust. We're changing the name to stats because it is going to be collecting and holding all of this data. But they're gonna have to submit a report that says, this is the date that the meeting was held. These are the meeting minutes. Uh, this is the, um, benefit to the public. There's a, but for analysis is the analysis that says, um, this project or this, uh, outcome isn't feasible unless we use this tool. They have to submit that, but for analysis. And then they have to submit a projection with a 40 years worth of a 40 year projection that says, this is all of the re all of the funds that will go to the project entity. And this is all of the, uh, funds that would go to the public entity. So think about the county, the city, the school district, et cetera. So we have a comparison of, um, where the cash flows, uh, in the public finance tool will go over a 40 year period. They'll have to disclose all of this to the, um, stats program. And then each year after that, they're gonna have to submit a report that says, this is how much of the in, uh, this is how much of the increment was used, this is where it went. And they'll be accountable for that. Uh, go. Uh, for every year that the, that the, um, public finance tool is in place, uh, starting January 1st, 2027, all of the public finance tools that are being used out there will have to submit a report to the stats program to tell us, uh, to give us a baseline of where they're at with some of these key metrics. Finally, um, there'll be a report that'll come back to the legislatures designated to go to the political subdivisions, uh, committee so that by county we will see how these public finance tools are being used. Uh, we will be able to see, uh, what proportion what, what amount of increment is in place and how much of these developments are le are left un undeveloped. This is gonna give us a tr level of transparency that we've never had before into the use and the effectiveness or lack thereof of the public finance tools. Uh, we worked with the crass, we've worked with the inland port, we worked with Mida, we worked with, uh, uh, our colleagues in the Senate to, to put this, uh, uh, reporting package together. And I'm, I'm happy to say that it took a lot of effort, but we got everybody to the table and were able to get a reporting package that I think is gonna significantly improve transparency for the state of Utah around the use of these public finance tools. Thank you, Mr. Speaker. I'm open to questions.

Thank you Mr. Speaker. I just wanna rise in support of this bill. Um, this is just such an important step as we have created tax increment district after tax increment, district after tax increment district, each with different rules, even the very basics of reporting of how things are going that we have had forever for the old type of redevelopment areas that we made just have not been in place. A person who wanted to know how much was that property worth when we made it, how much is that property worth now, what is the basics of how the money is being spent, has not been able to find that information and this is just a great step in the right direction to have that available to all of us.

I appreciate the body's time on this. I know this is a really important issue for many of our members and I'm really excited, uh, to learn about how, uh, we've actually deployed these tools. So thank you Mr. Speaker. I'll conclude my remarks.

Yes. It just clarifies the proper treatment of property, uh, personal property tax, uh, in a, um, uh, at the end of a tiff or a, uh, uh, other kind of public finance tool. So it just, it's proper treatment to, uh, of personal property tax.

Thank you Mr. Speaker. Uh, Senate Bill 2 0 6 is the bill that some of you have been waiting a very long time for. If you've been concerned about or trying to understand what's actually going on with various kinds of tax increment financing. I'm talking about PIs, I'm talking about tiffs, I'm talking about, uh, crass. I'm talking about, uh, the authorities like the Inland Port and MAA and, uh, fair Park, et cetera. If you're, if you're just been trying to figure out how to get your arms around what's happening in this space, uh, this is a very important bill for you. Uh, so what we're doing here is, uh, first of all, uh, looping in all of the various, uh, uh, entities that have access to tax increment. One of the reasons why this bill is so long is because we have to pick up all those pieces of code and then say these particular, uh, um, these particular governmental entities are required to participate in this process of reporting. So then to the actual reporting metrics. In order to use the public finance tools like a pit or a tax increment or an infrastructure financing district, you want to use these tools. What has to happen is there has to be an authorization meeting. This is a meeting where essentially the public body would say, we're going to use a public finance tool. And within 30 days they have to submit a report to the new, uh, it used to be called the Multi-County Appraisal Trust. We're changing the name to stats because it is going to be collecting and holding all of this data. But they're gonna have to submit a report that says, this is the date that the meeting was held. These are the meeting minutes. Uh, this is the, um, benefit to the public. There's a, but for analysis is the analysis that says, um, this project or this, uh, outcome isn't feasible unless we use this tool. They have to submit that, but for analysis. And then they have to submit a projection with a 40 years worth of a 40 year projection that says, this is all of the re all of the funds that will go to the project entity. And this is all of the, uh, funds that would go to the public entity. So think about the county, the city, the school district, et cetera. So we have a comparison of, um, where the cash flows, uh, in the public finance tool will go over a 40 year period. They'll have to disclose all of this to the, um, stats program. And then each year after that, they're gonna have to submit a report that says, this is how much of the in, uh, this is how much of the increment was used, this is where it went. And they'll be accountable for that. Uh, go. Uh, for every year that the, that the, um, public finance tool is in place, uh, starting January 1st, 2027, all of the public finance tools that are being used out there will have to submit a report to the stats program to tell us, uh, to give us a baseline of where they're at with some of these key metrics. Finally, um, there'll be a report that'll come back to the legislatures designated to go to the political subdivisions, uh, committee so that by county we will see how these public finance tools are being used. Uh, we will be able to see, uh, what proportion what, what amount of increment is in place and how much of these developments are le are left un undeveloped. This is gonna give us a tr level of transparency that we've never had before into the use and the effectiveness or lack thereof of the public finance tools. Uh, we worked with the crass, we've worked with the inland port, we worked with Mida, we worked with, uh, uh, our colleagues in the Senate to, to put this, uh, uh, reporting package together. And I'm, I'm happy to say that it took a lot of effort, but we got everybody to the table and were able to get a reporting package that I think is gonna significantly improve transparency for the state of Utah around the use of these public finance tools. Thank you, Mr. Speaker. I'm open to questions.

Thank you Mr. Speaker. I just wanna rise in support of this bill. Um, this is just such an important step as we have created tax increment district after tax increment, district after tax increment district, each with different rules, even the very basics of reporting of how things are going that we have had forever for the old type of redevelopment areas that we made just have not been in place. A person who wanted to know how much was that property worth when we made it, how much is that property worth now, what is the basics of how the money is being spent, has not been able to find that information and this is just a great step in the right direction to have that available to all of us.

I appreciate the body's time on this. I know this is a really important issue for many of our members and I'm really excited, uh, to learn about how, uh, we've actually deployed these tools. So thank you Mr. Speaker. I'll conclude my remarks.