§ 63M-1-2404. Creation of economic development zones -- Tax credits -- Assignment of tax credit.

(1) The office, with advice from the board, may create an economic development zone in the 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 first being approved by an appropriate local government entity; and

(c) local incentives have been committed or will be committed to be provided within the area.

(2)

(a) By following the procedures and requirements of Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the office shall make rules establishing the conditions that a business 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 the following requirements:

(i) the new commercial project must be within the development zone;

(ii) the new commercial project includes direct investment within the geographic boundaries 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 of high paying jobs, or significant purchases from Utah vendors and providers, or any combination of 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 meets the requirements of Section 63M-1-2405; or

(B) a community development and renewal agency to which a local government entity assigns 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 from the board, may enter into an agreement with a business entity or local government entity authorizing a tax credit to the business entity or local government entity if the business entity or local government entity meets the standards established under Subsection (2).

(b)

(i) With respect to one new commercial project, the office may authorize a tax credit to 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 commercial project to a business entity or a local government entity, the office shall authorize the tax credit in a manner that the office determines will result in providing the most effective incentive for the new commercial project.

(c)

(i) The office may not authorize or commit to authorize a tax credit if that tax credit exceeds:

(A) 50% of the new state revenues from the new commercial project in any given year; or

(B) 30% of the new state revenues from the new commercial project over the life of a new commercial project or 20 years, whichever is less.

(ii) Notwithstanding Subsection (3)(c)(i), the office may authorize or commit to authorize a tax credit not exceeding 60% of new state revenues from the new commercial project in any given year, if the eligible business entity creates a significant number of high paying jobs and makes capital expenditures in the state of at least $1,000,000,000.

(d)

(i) A local government entity may by resolution assign a tax credit that the office authorizes 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 and renewal agency:

(A) the agreement described in this section shall:

(I) be among the office, the local government entity, and the community development and renewal agency; and

(II) establish:

(Aa) the obligations of the local government entity and the community development and renewal agency; and

(Bb) the extent to which any of the local government entity's obligations are transferred to the community development and renewal agency;

(B) the community development and renewal agency shall retain records as described in Subsection (4)(d); and

(C) a tax credit certificate issued in accordance with Section 63M-1-2406 shall list the community development and renewal agency as the name of the applicant.

(4) Subject to Subsection (3), the office shall ensure that the agreement described in Subsection (3):

(a) details the requirements that the business entity or local government entity shall meet to qualify for a tax credit under this part;

(b) specifies the maximum amount of tax credit that the business entity or local government entity may be authorized for a taxable year and over the life of the new commercial project;

(c) establishes the length of time the business entity or local government entity may claim a tax credit;

(d) requires the business entity or local government entity to retain records supporting a claim for a tax credit for at least four years after the business entity or local government entity claims a tax credit under this part; and

(e) requires the business entity or local government entity to submit to audits for verification of the tax credit claimed.

Amended by Chapter 392, 2013 General Session