All Roll Calls
Yes: 140 • No: 19
UtahS.B. 262025 General SessionSenateWALLET
Housing and Transit Reinvestment Zone Amendments
Sponsored By: Wayne A. Harper (Republican)
Signed by Governor
Economic DevelopmentLand UseHousingWorkforce ServicesLimited Purpose Local Government EntitiesPolitical Subdivisions (Local Issues)TransportationGovernor's Office of Economic OpportunityPlanning and ZoningPublic TransitTax CreditsTax Increment FinancingPublic Infrastructure DistrictAffordable Housing
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Bill Overview
Analyzed Economic Effects
26 provisions identified: 9 benefits, 4 costs, 13 mixed.
Affordable and larger homes in transit zones
Housing and transit zone proposals must set aside at least 12% of homes as affordable, unless a statutory exemption applies. Up to 9% may serve households earning no more than 80% of county median income; at least 3% must serve households at or below 60%. Income comparisons use households of the same size. At least 25% of proposed homes must have two or more bedrooms. Proposals must also explain how they address housing, transit, water conservation, air quality, and access to jobs, education, and child care.
Qualifying owners gain transit housing development rights
Qualifying owners gain a right to build mixed-use housing on undeveloped land in unincorporated county areas near transit. The county must have created a small public transit district by January 1, 2022. The owner must have submitted an entitlement agreement by December 31, 2022, without county approval by ordinance by that date. Land must lie within one-third mile of a transit hub, including whole parcels crossed by that radius. Density is capped at 30 homes per residential-only developable acre or 15 per acre across the whole project. At least 33% of homes must be affordable, commercial space cannot exceed one-third of planned building area, and supporting infrastructure is required. Counties cannot take actions or enforce requirements that prevent or impede these qualifying developments.
Cities gain help planning water use
The Division of Water Resources must help counties and municipalities develop water use and preservation elements for their general plans. When consulted about regional conservation goals, the division can seek input from watershed councils. This does not itself set household water-use rules or change water bills.
State gains rail safety enforcement powers
Utah's transportation department oversees covered fixed-guideway transit rail safety, excluding systems regulated by the Federal Railroad Administration. It can inspect, audit, require safety fixes, enforce safety plans, and stop unsafe operations to meet federal duties. Qualifying local governments can request transit sales tax funds for oversight and must send received funds to the department. Requests cannot exceed necessary costs or the 20% nonfederal match requirement. Beginning May 7, 2025, localities with public transit district commuter rail can request and send inspection funding to the State Auditor's office. Those requests cannot exceed necessary inspection and related costs; the office need not charge commuter rail inspection fees.
Convention district spending gains county oversight
Convention center districts have five board members: three chosen by the petitioner and two optional city and county representatives. Each mayor selects their government's representative; the petitioner fills declined or vacated seats with people not representing that government. Districts receiving convention zone revenue must sign an agreement giving the county mayor approval over related revitalization spending. That approval excludes district bonds, debt, and revenue governed by a Capital City Revitalization Zone participation agreement.
Older hotels receive loss mitigation payments
The state must pay $2.1 million annually from the Hotel Impact Mitigation Fund to affected hotels built before July 1, 2014. Eligible losses are city-wide event room revenue lost because qualified hotel rooms entered the state market. Losses compare the hotel's 2017–2019 annual average event room revenue with revenue in the applicable year. Each hotel's share matches its portion of all affected hotels' qualified losses. Payments for 2023 and 2024 losses are due June 1, 2025; payments for 2025 and 2026 losses are due February 28, 2026.
Transit housing zones gain project priority
The Transportation Commission must create a written ranking process with transportation officials and regional planners for specified road, walking, and transit projects. Local governments and transit districts can nominate projects that advance statutory goals and provide the required cost share. Transit nominations must identify ongoing operations and maintenance funding. Capacity-increasing transit projects inside housing and transit zones must receive priority consideration, but funding is not guaranteed. The commission may also favor transportation reinvestment zones when the state participates or finds a state-system benefit. After the required notice, qualifying municipalities and unincorporated county areas can receive priority until the state receives notice they no longer qualify.
Infrastructure districts gain broader bond options
Public infrastructure districts can issue bonds to acquire or finance public improvements, regardless of who created the district. Districts within or beside housing and transit reinvestment zones can also finance public or private improvements. Their boards must find that those improvements support the zone's statutory goals. The law does not require a project or set a borrowing amount.
More cities can create transit housing zones
First- or second-class cities in first- or second-class counties can propose zones near commuter rail stations in federal opportunity zones. These zones can extend one-half mile from the station and contain no more than 125 noncontiguous acres. Previously, this option covered only first-class cities above 150,000 people in first-class counties. Zones can include whole parcels crossed by commuter rail, light rail, or bus rapid transit radius boundaries without counting against related radius limits. Convention center zones do not count toward a county's eight-zone limit for light rail stations.
Transit receives sales tax growth funding
Utah transfers 15% of sales tax revenue growth inside a housing and transit zone's sales tax boundary to the Transit Transportation Investment Fund. The calculation uses revenue from the 4.7% state sales and use tax. Transfers begin at a calendar quarter's start, one year after the sales tax boundary is established. Transfers occur at least annually, subject to the law's specified exceptions.
Housing lawsuits cannot recover damages
Plaintiffs in the covered housing-law enforcement cases cannot recover money damages. They can seek only court orders or other nonmonetary relief. The limit applies to enforcement or violation claims under the referenced housing section and Subsection 17-27a-404(5)(c).
Convention districts can add property taxes
Convention center public infrastructure districts can tax property within their boundaries at up to 0.05% of taxable value. At the maximum rate, each $100,000 of taxable value generates $50 in tax. The money can pay only administrative expenses, not construction costs or debt payments.
Railroads pay annual state oversight fees
Beginning May 7, 2025, railroads operating in Utah under the State Auditor's jurisdiction must pay annual regulatory fees. Fees must raise at least enough to cover railroad regulation and the office's duties. Each railroad's share uses applicable measures of crossings and use, hazardous-material tonnage, equipment, track miles, and in-state operating revenue. Fees are adjusted annually for inflation and other budget factors. The law states no fixed dollar amount.
Zone revenue pays capped administration charges
The Tax Commission can retain an administration charge from taxes, fees, and charges administered under the housing and transit zone law. The cap is the smaller of 1.5% of collections or the percentage needed to cover administration costs. City cultural taxes, specified local sales taxes, and MIDA lodging taxes now follow Subsection 59-12-205(3), while keeping their listed exemptions. Specified county transportation-tax distributions must first apply the rule in Subsection 59-12-2206(5). That ordering applies to counties wholly within one transit district, with added first-class county and large-district requirements for one tax.
County housing planning loses zone requirement
A specified county no longer must recommend a housing and transit reinvestment zone strategy in its moderate-income housing plans. This applies to a county covered by the law that created a small public transit district by January 1, 2022. The change removes a planning duty, not household housing eligibility or funding.
Convention areas gain infrastructure districts
Qualifying first-class cities in first-class counties can form districts to finance convention center, arena, and nearby improvements. Districts generally stay within one-half mile of the convention center, but intersected parcels can be included in full. Formation requires a petition with a governing document; public entities cannot petition. Lessee petitioners must lease city- or county-owned property for at least 10 years. A capital city establishing a convention center reinvestment zone must create one or more public infrastructure districts within it.
Convention districts gain broader borrowing powers
Convention center districts can issue bonds for revitalization and qualifying public or private improvements, including convention-related and arena projects. Zone financing requires a district within or beside the zone and a board finding that improvements support its goals. Private improvements must provide a substantial benefit; nearby outside infrastructure must benefit the district's project area within or beside it. Capital-city districts gain authority for qualifying public improvements and improvements directly serving the convention center and zone goals. For bonds paid by the capital-city revitalization tax, private improvements cannot exceed the participation agreement's dollar limit.
Convention redevelopment zones gain boundaries
Utah's economic opportunity office must propose convention center zones addressing redevelopment, jobs, walkability, tourism, and outdoor event space. Zones must use connected parcels in eligible municipalities; exceeding 50 acres requires municipal approval. Capital-city zones must include part of an existing convention center and any city block bordered by one. Capital-city proposals must also address added convention center improvement goals. Their project funds are limited to a convention center, publicly owned entertainment venue, parking, and related infrastructure.
County housing zones require affordable homes
Counties can propose housing and transit zones that include qualifying mixed-use developments. These zones must average at least 30 homes per residential acre or 14 homes per acre across the zone. At least 33% of homes must be affordable. Zone approval does not guarantee a household an affordable home.
Overlapping zones can capture more property taxes
Housing and transit zones overlapping inactive industrial-site reinvestment areas can capture the gap between an area's property-tax growth share and 80%. Convention center zones overlapping community reinvestment areas can capture the gap up to 100%. These rules apply when the overlapping area captures less, a taxing entity does not participate, or the area expires first. After an earlier expiration, zones can collect their allocated share for the rest of their term. Housing and transit zones update the tax base year as required; convention zones keep the overlapping area's established base year.
Construction sales revenue supports development zones
Qualified development zones receive specified sales tax distributions tied to construction materials, including a 50% share of the specified state tax growth. Materials must be delivered to an outlet inside the zone for permanent attachment to property there. Sellers must register the outlet with the Tax Commission and report sales to it, without using a simplified electronic return. Separate portions of qualifying Schedule J revenue go to Utah's General Fund or the jurisdiction entitled to them without the zone. Those sales must appear on Form TC-62M, Schedule J, or a Commission-approved equivalent.
Convention revenue funds districts with limits
Capital-city convention zone property and sales tax growth goes directly to the required convention center infrastructure district. Outside the capital city, proposals can name a municipality or public infrastructure district to receive and use zone revenue. Counties must send authorized property tax growth to the relevant district, capped at the zone committee's approved amount. That money is zone funding, not ordinary taxing-entity or municipal revenue. District spending must stay within the zone or benefit it; outside spending for capital-city zones needs statutory-goal compliance and a board finding of direct benefit. Capital-city zone funds can also cover district debt issuance, repayment, and interest.
Convention zones capture tax growth
Convention zone proposals can capture 100% of specified property and local sales tax growth for 30 years. Capital-city zones can also capture 50% of specified state sales tax growth. Proposals must set base years and start dates; all parcels share one 30-year collection period beginning no earlier than January 1 of the identified collection year. For specified first-class county taxes, transfers of 100% of growth within the established sales tax boundary begin no sooner than January 1, 2026. Transfers occur at least annually and start on the required calendar-quarter date after the specified year. For one county tax, the 80% transit and 20% highway split applies only after the transfer.
Local tax money supports convention renewal
A first-class county can transfer its specified transportation-tax share to a qualifying convention center infrastructure district. The county-owned center must be in a first-class city; funding can support renewal and nearby projects. Another specified sales tax can fund the same work when the city meets the law's project-area requirement. During a qualifying project's bondable term, a city must transfer at least 50% of its specified distribution to the district. The city can transfer up to 100%.
Property tax sharing rules cover more zones
Beginning January 1, 2026, property-tax calculations include convention center zones alongside housing and transit zones. Calculations use the statutory starting property value and account for tax growth assigned to zones. Home ownership promotion and first home investment zones also count as project areas; growth no longer assigned to them counts as new growth. Cities and public transit counties must send collection-start notices by December 31 before the proposed collection year, after zone committee approval. Notices go to affected taxing entities, the Tax Commission, education officials, state and county auditors, and the Governor's Office of Economic Opportunity.
Sales tax growth funds convention districts
Convention center zones receive 100% of the specified local sales tax revenue growth, including county-option and facility-tax growth. The zone proposal names the local-tax recipient; county-option and facility-tax transfers go to the convention center public infrastructure district. Capital-city zones also direct 50% of revenue growth from the 4.7% state sales tax to the named district. Transfers occur at least annually, no sooner than January 1, 2026, after the proposal's designated year and boundary requirements are met. Fairpark, town, and other listed local taxes now follow Section 59-12-205(3), while remaining exempt from subsection (2) and subsections (4) through (6).
Sponsors & Cosponsors
Sponsor
Wayne A. Harper
Republican • Senate
Cosponsors
James A. Dunnigan
Republican • House
Roll Call Votes
House vote • 3/7/2025
House/ uncircled
Yes: 0 • No: 0
House vote • 3/7/2025
House/ circled
Yes: 0 • No: 0
Senate vote • 3/7/2025
Senate/ concurs with House amendment
Yes: 21 • No: 5
House vote • 3/7/2025
House/ passed 3rd reading
Yes: 64 • No: 5
House vote • 3/7/2025
House/ substituted
Yes: 0 • No: 0
House vote • 2/26/2025
House Comm - Substitute Recommendation
Yes: 8 • No: 0
House vote • 2/26/2025
House Comm - Favorable Recommendation
Yes: 8 • No: 0
House vote • 2/25/2025
House Comm - Held
Yes: 8 • No: 0
House vote • 2/25/2025
House Comm - Motion to Recommend Failed
Yes: 2 • No: 6
House vote • 2/25/2025
House Comm - Substitute Recommendation
Yes: 7 • No: 0
Senate vote • 1/21/2025
Senate/ passed 2nd & 3rd readings/ suspension
Yes: 22 • No: 3
House vote • Unknown
House/ circled
Yes: 0 • No: 0
House vote • Unknown
House/ substituted
Yes: 0 • No: 0
House vote • Unknown
House/ uncircled
Yes: 0 • No: 0
Actions Timeline
Governor Signed
3/12/2025Senate/ to Governor
3/12/2025SenateSenate/ received enrolled bill from Printing
3/12/2025SenateSenate/ enrolled bill to Printing
3/11/2025SenateEnrolled Bill Returned to House or Senate
3/11/2025Draft of Enrolled Bill Prepared
3/7/2025Bill Received from Senate for Enrolling
3/7/2025Senate/ signed by President/ sent for enrolling
3/7/2025SenateSenate/ received from House
3/7/2025SenateHouse/ to Senate
3/7/2025HouseHouse/ signed by Speaker/ returned to Senate
3/7/2025HouseHouse/ received from Senate
3/7/2025HouseSenate/ to House
3/7/2025SenateSenate/ concurs with House amendment
3/7/2025SenateSenate/ placed on Concurrence Calendar
3/7/2025SenateSenate/ received from House
3/7/2025SenateHouse/ to Senate
3/7/2025HouseHouse/ passed 3rd reading
3/7/2025HouseHouse/ substituted
3/7/2025HouseHouse/ uncircled
3/7/2025HouseHouse/ circled
3/7/2025HouseHouse/ 3rd reading
3/7/2025HouseHouse/ 2nd reading
3/5/2025HouseHouse/ Rules to 3rd Reading Calendar
3/5/2025HouseHouse/ return to Rules due to fiscal impact
2/27/2025House
Bill Text
Enrolled
3/11/2025
Substitute #6
3/6/2025
Substitute #5
3/4/2025
Substitute #4
3/3/2025
Substitute #3
2/26/2025
Substitute #2
2/24/2025
Substitute #1
1/29/2025
Introduced
12/18/2024