S.B. 228 Community Reinvestment Agency Amendments: transcript

Yes. Um, Mr. Char, I'd move to delete and title the Body Senate bill 2 28 and replace it with first substitute Senate bill 2 28.

Yeah, we had a whole bunch of reporting and coordination between different taxing entities and the, um, go on that. Um, after a series of meetings, we identified the ability to go through and consolidate about five, if not six bills into one. And I took all of the stuff in my bill on the reporting that we're gonna run it in another bill, uh, contain some House and Senate bills. And what is left in this bill is the really core thing of what I wanted to do was to go and clarify that a redevelopment project area, C-R-A-U-R-A, um, EDA, whatever it is, once it hits its end of collection period, it is done. Right now we have some, uh, project areas that are languishing out there, there are collection periods over, people don't know if they are authorized or not. We're trying to clean that up and say if your 15 year collection period is done, you've got six months to wrap it up. And any remaining funds are dispersed back to the taxing entities and the proportion that they allocated those. So it's really, I think, a clarifying and cleanup bill to, to, uh, deal with our, uh, tax increment financing entities. That's what it seems like to me. Okay.

No, I, I really like this bill. I've had a lot of feedback, not in a, not necessarily on Tiffs, but on PIs. Mm-hmm. Uh, in a similar frame. Can we get something like this in place for PIs? And I don't know that you wanna slay that dragon today, uh, but that's one that, that maybe, uh, down the line, uh, you've worked so much in, in these tax increment spaces, that that's one that I'd love to, to work with you on in the future on it. And so I'm supportive of the bill and, and that's the only additional issue that, that maybe, uh, maybe the next step on something like this.

Yeah, I Would move. Oh, I guess Senator Harper can do it too, but No, he's, he's got it. Okay. Sure. Uh, I would move that we recommend favorably and I gotta make sure I get the number right. Uh, SB 2 28 first substitute? Yes. Yeah.

I'll waive, uh, all in favor

Thank you. Um, this is a fairly simple bill, bill with, uh, important impact. Uh, we've had since I think about 1974, we've created redevelopment project areas with various names, uh, urban renewal areas, economic development areas, uh, community reinvestment areas, redevelopment. There's a whole bunch of acronyms. We've changed and modified that over the year or the years. This bill is simple in its intent, is it's, it creates, uh, some definitions and then it goes through and says that once your, uh, period that you've been authorized for to collect is, is ended, you have basically six months to wrap it up in return. Any excess funds collected to the taxing indies who oppose, impose the, the, uh, uh, impose the, uh, or agreed to the tax increment redevelopment plan and project areas and budgets. It does allow a one time, two year extension, um, if all of the approving parties agree to that. Uh, but when, the reason why that's in there now is there's some question as to how many times a redevelopment project area can actually be renewed. And we're clarifying that if, if the tax committee or the by interlocal agreement wants to do it, it can only be done one time for two years. I think this is going to, uh, enhance the, uh, the, the, the clarity and, and the termination of some of these project areas. Some of them, I think, have been on the books for 30, 40 plus years. We wanna make sure that that's cleaned up. We don't have overlapping and we get, uh, I think it provides a good handle on what's going forward. So that's what the bill does. Thanks, Senator Harper to the committee for clarifying questions.

Uh, thank you, Mr. Chair, members of the committee. Uh, I'll be brief again. Uh, Carson ERs with the Utah of cities and Towns. Just wanna thank Senator Harper for his work on this. There's been quite a bit of, uh, changes suggested and floated around, and, um, we appreciate him working with us and all the other stakeholders to try to get this and the other, uh, tax increment transparency bills to a good place.

Thank you, Mr. Chair. Members of the committee. Uh, first just wanna express appreciation to Senator Harper and for his longstanding support of community reinvestment agencies and working collaboratively with stakeholders and specifically the URA. Um, I do, we do have a little bit of a concern with changing the dormancy period. So in, in 2024, there wasn't a dormancy period. And then in 2024, we established that that would be a five year period. And some of the project areas, um, that were already expired, um, budgeted to expend those funds during that five year period. So there's a little bit of a worry that, uh, the change to the six month period could impact those, those budgets. Um, addition additionally, um, we understand the desire for timely project completion and accountability, which we support. Um, but there is a difference sometimes in the difference of the collection of tax increment and the life of a project area. And sometimes they're not the same. Um, so once increment collection ends, the taxing entities immediately receive a benefit of the increased tax base that happened through the life of the project area. But at the same time, there oftentimes agencies do have some excess funds that are available to still implement existing goals that are outlined in adopted project area plans. So a great example of that would be affordable housing, um, monies and s some community reinvestment agencies will establish affordable housing programs like first time home buyer assistance programs. And, and oftentimes those are go well past the life of the project area. There's some important infrastructure projects that could also go past the life of the project area. So we would just like, uh, and hope that we could get some clarifying discussion with Senator Harper on is this unallocated funds, or, um, any funds that are left after that dormancy period, what happens with those funds? And then we would love to keep the dormancy period at five years if possible. And thank you for your time.

Uh, thank you, Mr. Chair. Um, I move that we recommend favorably Senate Bill 2 28 first substitute. The motion is to recommend favorably first substitute Senate Bill 2 28. We'd like to speak to your motion. Uh, I actually would. Um, I know that, uh, the sponsor's been working really hard, um, for many years in this space. And, uh, I, I know that, uh, this particular bill is one that, um, I think we really need to clarify the dissolution of project areas that we've created many years ago. Um, I understand that there's some, uh, uncertainty that was expressed about that, but, but I think that having a clear process to dissolve, uh, community reinvestment agency project areas is, um, a really important policy for us to have clarified. I do think that there is a process for extension of the dormancy period if needed. Um, if there's, uh, some extenuating circumstance and they need that, there is an, there is an extension provision. I think this is a, a great policy that I'm happy to be supporting today.

of the taxing entities. What this bill does is go through and clarify when a redevelopment project area with all its different iterations is dissolved, which terminates clarifies what happens with the, uh, outstanding funds, allows a one time extension for only two years. Right now you can extend it for however many years you, you want. It really is a bill that goes with and identifies and enables, uh, uh, the agencies, the auditors, uh, county auditors and other stakeholders to really find out what's there with the project areas and to clean those up so that they are absolutely closed out when they should be. And the benefit of that BUN B returned back to the taxing entities who authorized the, uh, sharing of the tax increment. And there is an amendment number two under my name.

Yes, I'm moving it. Um, it goes through and just clarifies there were several cross references that were in there that, uh, needed to be fixed and then, uh, clarifies the eight years after the day in which an agency proved the project area. Uh, review of that project area has not started.

Senator Fillmore. Ah, thank you. Uh, Mr. President, when you're an employer, uh, you know, compensating your employees, it's a hard thing to dial in exactly right. And over time, you know, you might find that you need to change, uh, your salaries. You know, you want always monitoring the market, trying to keep up, keep the best employees, uh, happy, engaged, keep your, uh, keep your team fresh,

Thank you. Uh, this bill goes through and, uh, deals with the process of terminating, uh, redevelopment project areas goes and clarifies when they are done, how they're reported out the return of their, uh, unended funds to the, uh, imposing, taxing entities and, uh, the ability to go through and have a public hearing to continue at one time for up to two years rather than the indefinite the current, uh, currently exists in code.

Thank you. And move it. Uh, first substitute Senate bill 2 28 pass.

Thank you Mr. President. Motion encircle Senate bill 1 54. We have a motion to circle Encircle Senate bill 1 54.

Thank you Mr. President. This bill, uh, clarifies the responsibilities of the state, uh,

Thank you Mr. Speaker ProAm, I move that we adopt amendment number three in my name.

I would, we, uh, in working through, uh, CRA amendment, the this CA amendments bill, we made an accommodation. So this bill deals with dissolution. Some of our crass are in a dissolution process already, and that dissolution process previously gave them five years. We're shortening that up to two years. The amendment allows those that are already in a dissolution process to be grandfathered under the five year provisions that we previously had. Any new dissolutions will be under the two years time period that's in the bill going forward.

Thank you. Uh, Mr. Speaker Pro TE community reinvestment agencies are a tool that, uh, is used to help, uh, create re to create development in specific areas. Um, they are commonly associated with, uh, finance tools that many of you have heard about or familiar with, like tax increments and, and PIDs. They don't have to use those tools, but oftentimes they do. This bill at one time in an earlier version, dealt with some, some transparency issues and reporting. Some of you might see that, uh, language removed in earlier versions of the bill. It's not gone, it's in another bill that, uh, uh, I'll be presenting, uh, later house. Uh, Senate bill 2 28, uh, sorry, 2 0 6. Um, so what's left in this bill is primarily the dissolution process. And what that means is when you get to the end of the life of the community redevelop reinvestment agency, it has to be unwound. And what this does is it tightens up the restrictions, um, and ensures that they're unwound properly. So a couple of specific things. It defines what's called a dormancy period. The dormancy period means once you're at the end of the life, you have six months to unwind. It can be extended, but it has to be unwound. It requires that proceeds that are being held from taxing authorities. So think about, uh, the city, the county, the school district, maybe even the mosquito abatement district. Those proceeds that were held by the CRA have to be distributed to the respective governmental entities. Um, it allows early dissolution if for some reason the CRA is no longer needed. And, uh, it, um, allows for, um, making sure that the, uh, these entities that have been, some of them have been sitting around, uh, that there's an orderly transition back to what would be considered normal business before the CRA. So I, uh, in conclusion, number one, the disclosure provisions that some of you might have been, uh, looking for, uh, they're still, uh, part of, uh, the proposed legislation for this session. They've just been moved to another bill as we've combined policies. And this bill is primarily focused on proper unwinding, uh, and accelerating the unwinding of a community reinvest, uh, reinvestment agency. That concludes my presentation. Mr. Mr. Speaker ProAm.

to the bill Representative Cutler. Thank you Mr. Speaker ProAm. Will the sponsor yield to a series of questions? Will The sponsor yield to a series of questions?

Yes, I will. Go ahead. Thank, thank you.

For those of us who, uh, are not as familiar with community re um, reinvestment areas c could, could you remind us of the difference between a community reinvestment area and a traditional RDA or commercial development, uh, area that uses tax increment financing and, and when, when, when a municipality or a political subdivision would use one versus another?

So typically what they're looking for is to create, uh, development in an area that wouldn't otherwise receive development without the use of, without this particular designation. It's important to note that it's created by the political body. So think it's created by the municipality and it's for a purpose of, uh, promoting and incentivizing, uh, development in a particular area that might not have otherwise receive the development that they're hoping for.

Thank you, Mr. Speaker. And are these still being, are, are new, uh, reinvestment, community reinvestment areas still being used today? Or is this primarily just an, uh, no longer a popular tool

and we're just winding them down? No, They're, they are being used and, uh, they are, uh, they're new ones, but, but we have some that have been around for a very long time and they're at the end of their period, uh, of, uh, at the end of their purpose, rather their intended purpose. And so, um, we're having to unwind some of them. And there are, there've been some issues that we've discovered in unwinding them that need to be clarified. For example, what happens to the funds, uh, that are being held by the CRA. And in this case, again, we're specifying the timelines under which they have to dissolve and also how the, uh, funds that they're holding will be dispersed will be distributed.

Thank you, Mr. Speaker. Uh, our, our good, uh, friend from Draper has introduced, uh, a number of, uh, or, or a bill that consolidates a number of these tax increment tools. Does that bill have any effect on this, uh, community reinvestment area?

So, uh, I can't, I'm not gonna, I, I'm gonna speak to, I can speak to, uh, what is Senate bill 2 0 6, which will be the reporting issues that were previously in this bill. And this bill is, uh, dissolution of those entities. I don't think I'm prepared to speak to any other piece of legislation.

Mr. Ch, Mr. Speaker. Fair enough. Thank you. Thank

Thank you. Mr. Uh, speaker Pro tem. Again, uh, there's a lot of concern about how these tools get used. Um, what we're trying to do is make sure that they're unwound properly. Previously, the bill had additional reporting provisions, uh, right now, uh, this version of the bill that we, that's before us as amended, only deals with the dissolution or the proper unwinding of community reinvestment agencies.

Senator Spry Lewin Aye. Rammer bus Aye. Fillmore as Camia Aye. Fillmore Aye. Roper. Aye. Harper Kins Ipson Johnson Quan McKay Mikel Milner Musselman Musselman Owens pitcher Picture Aye. Plum Rebi Sandal Stevenson Stratton Vicars Weiler Wilson Winterton. President Adams Aye.