Improved Funding to Support Development

The bill gives city and county housing authorities (housing authority) the power to provide for the levy of a sales tax, sales and use tax, or property tax within the jurisdiction of the authority, the resulting revenue of which will be directed to the housing authority, subject to the following conditions:

• The city or county has adopted a resolution determining that the levying of the tax will fairly distribute the costs of the housing authority's activities among the beneficiaries of the housing authority's activities and will not impose an undue burden on any particular group of people; and
• A ballot question has been submitted to a vote of the registered electors of the city or county and subsequently approved by a majority of such registered electors, and the ballot question describes the purposes for which the tax will be used by the housing authority and complies with section 20 of article X of the state constitution.

If a sales or sales and use tax is approved by the voters of a housing authority:

• The rate of the sales or sales and use tax must not exceed 1% on any transaction taxable by the state;
• The authority shall designate a liaison to coordinate with the department of revenue to implement the collection of the tax and to identify people eligible to collect the sales and use tax; and
• The tax revenue must be directed to a fund of the authority.

If an ad valorem property tax is approved by the voters of a housing authority:

• The rate of the ad valorem property tax must not exceed 5 mills on each dollar of valuation for assessment of the taxable property within the authority's jurisdiction;
• The board of county commissioners of the county in which the housing authority is located shall levy the ad valorem property tax upon the valuation for assessment of all taxable property within the authority's jurisdiction;
• The officials charged with collecting ad valorem property taxes for the county in which the housing authority is located shall collect the taxes at the time and in the form and manner and with like interest and penalties as other property taxes collected within the county;
• The property tax revenue must be directed to a fund of the authority; and
• All property tax revenue, together with interest thereon and penalties for default in payment thereof, and all costs of collecting the same shall constitute, until paid, a perpetual lien on and against the property taxed, and such lien shall be on a parity with the tax lien of other general taxes.

The bill gives county housing authorities the power to issue revenue or general obligation bonds and to pledge the authority's revenues and revenue-raising powers for the payment of such bonds.

The bill allows an urban renewal authority to enter into a shortfall guaranty contract with an urban renewal project developer (developer) specifying that, if the tax increment revenue is insufficient to pay the indebtedness incurred by the authority that is due, the developer is obligated to make a direct payment covering the full amount of the insufficiency. A shortfall guaranty contract:

• Constitutes a lien on the urban renewal project property the same as, and equal in priority to, a tax lien;
• Has priority over any mortgage, lien that is not a tax lien, or other encumbrance;
• Constitutes a covenant running with the land for the term of the contract; and
• May be recorded against the real property upon which the urban renewal project is developed.(Note: This summary applies to this bill as introduced.)