63M-1-2404 - Creation of economic development zones -- Tax credits -- Assignment of tax credit.
63M-1-2404. Creation of economic development zones -- Tax credits -- Assignmentof tax credit.
(1) The office, with advice from the board, may create an economic development zone inthe state that satisfies all of the following requirements:
(a) the area is zoned commercial, industrial, manufacturing, business park, research park,or other appropriate use in a community-approved master plan;
(b) the request to create a development zone has been forwarded to the office after firstbeing approved by an appropriate local government entity; and
(c) local incentives have been committed or will be committed to be provided within thearea.
(2) (a) By following the procedures and requirements of Title 63G, Chapter 3, UtahAdministrative Rulemaking Act, the office shall make rules establishing the conditions that abusiness entity or local government entity shall meet to qualify for a tax credit under this part.
(b) The office shall ensure that the conditions described in Subsection (2)(a) include thefollowing requirements:
(i) the new commercial project must be within the development zone;
(ii) the new commercial project includes direct investment within the geographicboundaries of the development zone;
(iii) the new commercial project brings new incremental jobs to Utah;
(iv) the new commercial project includes significant capital investment, the creation ofhigh paying jobs, or significant purchases from Utah vendors and providers, or any combinationof these three economic factors;
(v) the new commercial project generates new state revenues; and
(vi) (A) a business entity or local government entity qualifying for the tax credit meetsthe requirements of Section 63M-1-2405; or
(B) a community development and renewal agency to which a local government entityassigns a tax credit under this section meets the requirements of Section 63M-1-2405.
(3) (a) Subject to the other provisions of this Subsection (3), the office, with advice fromthe board, may enter into an agreement with a business entity or local government entityauthorizing a tax credit to the business entity or local government entity if the business entity orlocal government entity meets the standards established under Subsection (2).
(b) (i) With respect to one new commercial project, the office may authorize a tax creditto a business entity or a local government entity, but not both.
(ii) In determining whether to authorize a tax credit with respect to one new commercialproject to a business entity or a local government entity, the office shall authorize the tax credit ina manner that the office determines will result in providing the most effective incentive for thenew commercial project.
(c) The office may not authorize or commit to authorize a tax credit if that tax creditexceeds:
(i) 50% of the new state revenues from the new commercial project in any given year; or
(ii) 30% of the new state revenues from the new commercial project over the life of anew commercial project or 20 years, whichever is less.
(d) (i) A local government entity may by resolution assign a tax credit that the officeauthorizes to the local government entity to a community development and renewal agency.
(ii) The local government entity shall provide a copy of the resolution described in
Subsection (3)(d)(i) to the office.
(iii) If a local government entity assigns a tax credit to a community development andrenewal agency:
(A) the agreement described in this section shall:
(I) be among the office, the local government entity, and the community developmentand renewal agency; and
(II) establish:
(Aa) the obligations of the local government entity and the community development andrenewal agency; and
(Bb) the extent to which any of the local government entity's obligations are transferredto the community development and renewal agency;
(B) the community development and renewal agency shall retain records as described inSubsection (4)(d); and
(C) a tax credit certificate issued in accordance with Section 63M-1-2406 shall list thecommunity development and renewal agency as the name of the applicant.
(4) Subject to Subsection (3), the office shall ensure that the agreement described inSubsection (3):
(a) details the requirements that the business entity or local government entity shall meetto qualify for a tax credit under this part;
(b) specifies the maximum amount of tax credit that the business entity or localgovernment entity may be authorized for a taxable year and over the life of the new commercialproject;
(c) establishes the length of time the business entity or local government entity mayclaim a tax credit;
(d) requires the business entity or local government entity to retain records supporting aclaim for a tax credit for at least four years after the business entity or local government entityclaims a tax credit under this part; and
(e) requires the business entity or local government entity to submit to audits forverification of the tax credit claimed.
Amended by Chapter 164, 2010 General Session