S.B. 243 Tax Increment Amendments: transcript

Senate Revenue and Taxation Committee, Feb 13, 2026

1. Sen. Kathleen A. Riebe1:06:33

   So, Senate Bill 2 43. Is this working? Oh, yep. The light doesn't go on. Have you heard that before? No, I didn't. Oh, The light's not on, so it's confusing. Oh, I guess just for me though. Um, hi. Thank you for listening to my bill. This is a very simple bill and it's, um, something that was brought to my attention that creates tension between our, uh, city of a first class and our schools in a city of the first class. So it is changing the timeline of our, uh, tax increments. And it is, um, it's for certain housing and transit reinvestment zones proposed by a municipality or a county. And it changes the terms and periods, uh, within which the property tax increments can be captured. So if you look at lines 1 0 4 2 1 0 8, uh, I'm speaking to the bill and I have an amendment. I was gonna say, you have an amendment on line. Do you wanna move that as, as well? Sure.

2. Chair McCay (presiding)1:07:29

   Senator Escamilla, would you wanna make that amendment? It's Amendment one that's available online. I'm having a hard time with the, the lights there. Okay. Uh, Senator Escamilla makes the amendment to adopt Amendment one for Senate Bill 2 43. Any discussion to that? We'll let you explain it later. All in favor, please say aye. Aye. Any opposed? Passes unanimously. Your bill is amended. Go ahead.

3. Sen. Kathleen A. Riebe1:07:54

   Thanks. When you look at line 1 0 4 2 1 0 6 mm-hmm. These are the numbers that I'm changing. So right now we are capturing 80% of tax increments. I'd like to reduce that to 50. We are doing it for 25 years. I would like to reduce that to 15, and I'd like to take the number 45 and reduce it to 30. Um, consider, like when you think about using these tax increments, those tax increments go from the municipality and the person building and are taken away from our schools. So I think 80% is a really high number, and it really creates, um, this tension between our cities and our schools districts. When you think about the numbers, 25 to 15 and 45 to 30 years, we are not going to be giving debt to our grandkids or our kids. And so I think it's important for us to vote on things that impact us and not our future generations. So the policy still is in place, it just changes the increments that are taken from our schools, and it reduces the long, the longevity of that agreement. And that's my bill.

4. Chair McCay (presiding)1:09:01

   Okay. Thank you. Take that, uh, to the committee for questions in the bill. Senator Brammer,

5. Sen. Brady Brammer1:09:08

   Um, does this, is this only for tax increment financing moving forward, or would this be a renegotiation of existing tax increment financing?

6. Sen. Kathleen A. Riebe1:09:20

   Well, the date the bill goes into effect on May 6th, 2026. So I, I would think that you could only do it on Wednesday. Were going forward. Okay.

7. Sen. Brady Brammer1:09:26

   So it's not, it's not your intent to go back in time if someone's, you know, not retroactive. Yeah, just, just making sure that 'cause there are active Yep. Tax increment finance zones, and Yep. You know, changing contractual terms with bonding is a little rough. And so, okay. That's helpful to know. Thanks.

8. Chair McCay (presiding)1:09:46

   Okay. That conclude your questions?

9. Unknown speaker1:09:50speaker not certain

   I had a similar question and that's, um, I'm a little bit, um, confused. I mean, I know drafters sometimes, uh, assume that we're backward or that we're not backward looking, that we're forward looking. And so I'm a little bit, um, uh, I'm, I'm not sure if this is going to cause any problems with projects that are already, you know, relying on that financing. Um, you know, because usually when we do something like this or we change the timelines, it says for projects approved after this date, it is this, for those project approved before it is this. And so anyway, just, just be aware that's, that's a question that we probably need to think through. Uh, if the bill moves forward, just I would love to put that language in there. Yeah. Just to, I I, i, it just from a clarity standpoint and it, you know, it could go away, but also your drafter may tell you it's not necessary, which, if that's the case too, we don't need to make that change. But just keep that in mind as something to think about.

10. Sen. Kathleen A. Riebe1:10:49

    I would gladly put in, um, this bill is only in effect for bonds or agreements that are negotiate, start negotiation after the State. Yeah. Whatever the date is. Okay.

11. Unknown speaker1:10:59speaker not certain

    I wouldn't even, I wouldn't even make it as of, uh, a negotiation if, you know, if you're gonna have a trigger, it needs to be something that's a bright line. A negotiation could be, Hey, are you interested in this? Right. That could start years ago if I was you and wanted to get your bill intent. Okay. I'd be focused on an agreement that has to be executed by a certain date. Otherwise, those negotiations could drag you out for a while. So, okay. Anyway, I would love to do that. That is great suggestion.

12. Chair McCay (presiding)1:11:22

    Okay. Uh, Senator Brammer has a question.

13. Sen. Brady Brammer1:11:24

    Okay. Um, the next question is more tied to, you know, have you worked with any of the, uh, tax increment financing? Well, there, there's typically a lender behind these. Have you worked with the lenders to see how, how well this does with the terms and with the market and the developers that, that are in this H-H-T-R-Z area to see if this is congruent with the type of deal structure. They may not like the deal structure, but does it work within the deal structure that they're doing? Or are we going to, does this just ultimately kill the project as opposed to amend the terms? Does, does that make sense? Mm-hmm.

14. Sen. Kathleen A. Riebe1:12:09

    Yeah. So I live adjacent to the city of the first class, Sandy. And this was brought to me by concerned citizens from inside that city. And their concern was that, are we going to benefit the developers that are coming into our city or are we gonna protect the children that are going to schools in our city? So I do have some kind of, um, interest in protecting our developers, but not as much as our Citizens. I understand your interest. I totally get it. Yeah. What I'm trying to get at is, does this mean that no deals can happen? Like have you talked to the lenders and the developers to see if this is congruent with, with the deals they will do, or like, does this work within a funding structure? No, I have not talked to them. Okay. I, I just think that 80% of our tax increments is a lot to be giving to developers as a citizen of that area. So I haven't spoken to them. Yeah. Okay. Because what I'm trying to get at is, is this a, an adjustment in policy that still allows viable projects to go forward? Or is this a killing of the policy through technical adjustment? I don't know. My understanding is there is not a lot of land available and the current terms cause people to grab that land up quickly. And if there's any land available still I'd like it to be under different terms. And the people I've spoken to about this bill would like it to be under different terms to protect the students in our districts.

15. Chair McCay (presiding)1:13:32

    Okay. Thanks. Okay, thank you very much. I think that concludes questions. Uh, we'll take it to the public for public comment. Anybody from Sandy would like to come in? No, I'm just kidding. Come on forward. Oh, geez.

16. Michelle Jones, resident1:13:59

    Michelle Jones speaking as a citizen, um, have been, I'm also an educator and have been in many school board meetings where they're talking about TIFs. And the one that this comes to mind was there was currently one that was put in place fairly recently for a Porsche dealership within Granite School District boundaries. And there was a lot of consternation, um, from the school board members talking about how they didn't have the same ability to support small business owners in that same area and concern about that. And because of the concern of the tiff, they almost didn't go forward with it. And so when it comes to your question about is it, is it a deal breaker? I think sometimes because it does prevent so much funding, excuse me, coming to the school district, that on that side it almost becomes a deal breaker because of the reduction of taxes. Thank you. Yeah,

17. Chair McCay (presiding)1:15:03

    Thank you very much. Thanks for signing in. Anybody else like to speak? Yeah, come forward. Kathleen May make room for him.

18. Karson Eilers, Policy Director, Utah League of Cities and Towns1:15:16

    Uh, thank you Mr. Chair, members of the committee. My name is Carson ERs and I'm speaking on behalf of the utility of cities and towns. Our policy committee has not taken a position on this bill yet, so I'm not speaking for it or against it. I just wanna provide a little bit more context. Um, Senator Brener Bremmer, to your point, these projects, especially HT Zs, are, uh, fairly variable. So this could adversely affect some projects going forward. Um, I also want to bring up just a little bit of the, the legislative context this year. There's several bills that are already trying to address HT Zs, not these terms specifically. Um, but, uh, there are several provisions to try to address transparency, enhance the, but for analysis, uh, that you do in preparing these projects. Um, for example, uh, Senator Harper has senate a Bill 2 21, which I don't remember if that was in this committee, but, um, it's trying to provide better reporting. Um, Representative Walter has HB 4 27 to try to enhance some of the analysis done on the, uh, front end. Um, and then, uh, Representative Roberts is House Bill 5 0 7. You may all be well aware of this, but I know there's a lot of bills this year to keep track of. And House Bill 5 0 7 will actually contemplate, uh, Sunset setting future HT Zs in that model in 2028. So giving a little bit of room for projects that are already in the process to finish up and then, uh, steer those kind of projects to the, uh, regionally significant economic development zone model. Um, so trying to streamline some of that process. It's still, um, approved by a, a board that, uh, hosted the governor's office of Economic opportunity with, um, several stakeholders from different groups including school. So again, not speaking for of against it, just wanna provide a little bit more context on some of the other stuff that's happening around housing and transit reinvestment zones this year. Thanks.

19. Chair McCay (presiding)1:16:53

    Thank you very much. Okay. Any other public comment? Okay. Seeing none, we'll bring it back to committee for action on the bill. Senator Escamilla. Oh,

20. Sen. Luz Escamilla1:17:07

    Thank you, Mr. Chair. Um, Motion, I wanna make a motion that we favorably recommend SB 2 43 as amended. Uh, and if I can speak to that Mr. Chair. Yeah, thank you. And I, you know, I appreciate, um, just a comment a minute ago from the League of Students and Towns, and you know, I, I don't envy their role. There's a lot of legislation that comes, um, that will have an impact. And, but we, we created this monster in a way, and now it's our job to try to make sure it works the way I think it was intended. And as we are developing and things are moving, we're seeing some, some, some things that are concerning. And I, I applaud Senator Re always is looking for protecting children in education. She's, I think this is a measure that that makes sense is, is fair to, uh, the way I see it as a policy. And, and I think it gives once, um, a fix on, on, again, a very complex issue that I think we're facing and we're gonna have to have multiple bills, probably forever because it is a, it's a, it's big. And in some cities, when you look at the years, um, that will be, I mean, like our great grandchildren will be paying for some of this stuff. So I, I mean, we need to be very measured in, in the way that we now address something that we created. And I think it does good things, but it also is creating, I think, a, a very long, um, you know, engagement that needs more transparency and needs more, um, oversight. So with that, I, I think this is a, a, a small change that could provide a better way of, of dealing with those things moving forward. So no attractives, we should not be impacting things that are already in place. And I, I think that's appropriate. So whatever language needs to be fixed, I'm sure the senator can work for that amendment on the floor, and I hope my colleagues will support this. Thank you.

21. Chair McCay (presiding)1:19:07

    Thank you, Senator Brammer to the motion?

22. Sen. Brady Brammer1:19:10

    Yeah, I, I'm, I'm gonna be a, a no on it, but it's mostly because I do think that if we're going to adjust this, it needs to be a measured approach that isn't only taking input from one side. I I, you know, I don't know why going from 25 to 15 years is the right number, or from 45 to 30 years is the right number, or from 80% to 50% is the right number because there's been no market research or discussion as to whether it's going to be congruent with the ultimate goal of the HTRZ, which was around our transit stations. We need higher density housing. And so this will create an economic incentive for the right, for the density that will utilize our transit systems. And so if it's just repealing the process of HTRZ, which this might be, but we don't know, then that's another policy discussion. If it's, we want more money out of this and, and we want a different deal, then I, you know, I'd need to know more about whether, like, are we just, is it still a viable deal under these terms? And so, uh, you know, I I don't fully disagree with the policy. I think sometimes Tiffs and PIDs and other, other, other financing mechanisms at times lack transparency. They hold local governments hostage to a feeling like nothing will happen and their revenues won't increase. And are they giving up too much or too little? I think we've got enough groundwork that we can, we can figure out the right measurement. And I guess the, the concern that I have is, you know, to es to Senator Eskin E'S point, this needs to be a measured approach. And I just don't know that we've measured this. I think we've picked some new metrics because we want something else, but I, I'm just not convinced that the background work of working with all of the parties involved and taking into account the, the overall purpose of the HTRZ, you know, policy have been fully measured on it. And so that, that's the concern. It's not necessarily that I totally disagree with this. I think we get taken advantage of sometimes, but it's just hasn't been measured with enough input. So that's gonna be, that's to explain my no vote.

23. Chair McCay (presiding)1:21:15

    Okay. Thank you very much. Senator Reid, do, would you like to sum?

24. Sen. Kathleen A. Riebe1:21:20

    Yes, thank you. You know, um, when we think, when we, when we think, when we think about counties of the first class, cities of the first class and a city of a first class in a county of a first class, it gets very, very calculated. Very, very prescriptive. And as we've had this conversation many times on the floor, my cities are usually the ones that have these types of, um, very particular legislation passed for them. We've had conversations about airports and we've had conversations about, um, other projects that the state is being asked to pay for. Um, when I look at this bill, I think it'd be a great conversation to have on the floor. I think many people should recognize that when we pass these ideas, they do have negative outcomes for the people that are being impacted in the school districts. So I, I don't think it was the intention to have, um, such drastic, um, pushback. But when you bring in, um, you know, a housing development that might have a thousand kids and you're reducing that by 80%, you're asking us to educate kids with no money. And so this is something that people need to think about. We can have this conversation on the floor, and if it doesn't pass, then at least people will be more aware of the negative impacts that are happening in our cities. So, with that, I, I understand this might not be as calculated as you liked, but I think that outten unintended outcomes were more harmful than was intended. So thank you.

25. Chair McCay (presiding)1:22:50

    Okay. Thank you for summation. Uh, I'm gonna go to, uh, Madam Millard for a roll call vote. Senator Escamilla aye. Senator Brammer and Chair McKay? No, thank you. The bill fails. Okay. Thank you. Fails, uh, one to two, uh, with Senator Escamilla voting favor.

26. Chair McCay (presiding)1:23:12

    Motion ajour in favor? Uh, all in favor of Senator Escamilla ass Motion adjourn. Please say aye. Aye. Any opposed? We are adjourned. Thank you.