Utah Administrative Code
The Utah Administrative Code is the body of all effective administrative rules as compiled and organized by the Division of Administrative Rules (see Subsection 63G-3-102(5); see also Sections 63G-3-701 and 702).
NOTE: For a list of rules that have been made effective since January 1, 2020, please see the codification segue page.
NOTE TO RULEFILING AGENCIES: Use the RTF version for submitting rule changes.
R357. Governor, Economic Development.
Rule R357-13. Hotel Convention Center Incentive.
As in effect on January 1, 2020
Table of Contents
- R357-13-1. Purpose.
- R357-13-2. Authority.
- R357-13-3. Definitions.
- R357-13-4. Application for Approval of a Qualified Hotel and For Authorization of Incentive.
- R357-13-5. Independent Review Committee.
- R357-13-6. Procedures for Claiming a Convention Incentive.
- R357-13-7. Incremental Property Tax Revenue.
- R357-13-8. Procedures for the Administration of the Hotel Impact Mitigation Fund.
- Date of Enactment or Last Substantive Amendment
- Authorizing, Implemented, or Interpreted Law
(1) This rule identifies:
(a) procedures by which the Governor's Office of Economic Development may enter into an agreement with a qualified hotel owner for the development of a qualified hotel, and authorize and set conditions for a convention incentive under the New Convention Facility Development Incentive Act;
(b) minimum criteria for an agreement with a qualified hotel owner;
(c) roles and responsibilities of the independent review committee;
(d) procedures for calculating and paying the convention incentive; and
(e) administrative procedures for the Hotel Impact Mitigation Fund.
(1) Utah Code Section 63N-2-509 authorizes the Governor's Office of Economic Development to enact rules to carry out its responsibilities under the Act.
(1) Unless otherwise specifically defined in this rule, Utah Code Section 63N-2-502 defines the terms used in this rule.
(2) "Appointing entity" means any of the entities responsible for appointing members to the Independent Review Committee pursuant to Utah Code Section 63N-2-504.
(1) The Office, with the Board's advice and after considering the recommendations of the independent review committee formed in Utah Code Section 63N-2-504, may enter into an agreement with a qualified hotel owner or host local government:
(a) for the development of a qualified hotel; and
(b) to authorize and set conditions for a convention incentive, to be paid from the convention incentive fund as set forth in Utah Code Section 63B-2-503.5 and pursuant to Utah Code Section 63N-2-505 and this Rule.
(2) The initial application to approve the development of a qualified hotel and to authorize and set conditions for an incentive shall include at least the following information:
(a) Identify the hotel property and the hotel owner;
(b) A proposal for the convention center hotel, including construction time lines and proposed spending over the life of the project;
(c) Include the required endorsement letter from the County in which the hotel is located;
(i) The endorsement letter shall include by reference to or attachment of all of the requirements placed on the hotel by the County in relation to the endorsement letter; and
(ii) The endorsement letter shall include by reference to or by attachment the County's expectations regarding compliance with its requirement by the developer or owner, including how compliance with the requirements will be measured and tracked.
(d) Details regarding the capital investment expected, which must be at least $200,000,000.00.
(e) The period of time for which the qualified hotel owner or host local government expects to request and claim an incentive related to the project, subject to the limitations set forth in the New Convention Facility Development Incentives Act.
(f) The maximum amount of incentives that the applicant is requesting, subject to the limitations set forth in Utah Code Section 63N-2-503.
(3) The Office, with advice of the Board and after considering recommendations of the Independent Review Committee established by Utah Code Section 63G-2-504, shall review the application and materials and determine whether to enter into an agreement with the Qualified Hotel, and what conditions to place on the award of an incentive.
(a) The Office shall review and application and respond within 60 days.
(b) If more information is requested by the Office or the Board, the applicant will have 15 days to provide the additional information, and the Office's decision will be extended by 30 days.
(c) If the Office declines to approve the project, it shall publish a notice of agency action and state specifically the reasons for declining, and what, if anything the applicant can do to cure the defects.
(d) If the Office approves the project the approval shall include shall include the terms, conditions, contingencies and requirements related to the convention incentive.
(5) If either the qualified hotel owner or the host local government are aggrieved by the Notice of Agency Action in section (3)(c), the entity may seek review by the Executive Director of the Governor's Office of Economic Development, using the procedures set forth in the Utah Administrative Procedures Act, Utah Code Section 63G-4-301.
(1) Creation of Independent Review Committee
(a) The Board shall establish the independent review committee within thirty days of the RFP award.
(i) All entities with appointing authority shall submit the name(s) of the person(s) that they are appointing to the Board no later than 10 days after the RFP award.
(ii) The appointing authority shall ensure that the person being appointed has accepted the position on the independent review committee and is willing and able to serve, prior to submitting the name to the Board.
(iii) The Board shall appoint its member to independent review committee no later than 10 days after the RFP award.
(iv) If the appointing entity is removing its appointee from the Independent Review Committee, or if the appointee resigns, the appointing entity shall notify GOED within 3 business days, and appoint a replacement person as soon as practically possible.
(2) Conducting Business:
(a) Four members of the Independent Review Committee shall constitute a quorum.
(b) Voting may take place if a quorum is present at meeting
(c) A majority vote of members present during a meeting (either in person or via electronic meeting) constitutes the vote of the Independent Review Committee for the purposes or proceeding with the Committee's duties.
(3) Electronic Meetings:
(a) The independent review committee may conduct its business through electronic meetings pursuant to Utah Code Section 52-4-207.
(b) A quorum of the public body is not required to be present at the anchor location, but at least one member of the independent review committee shall be present at an anchor location for a electronic meeting.
(c) All meetings will provide for the capacity for Board members to participate electronically.
(d) All members participating electronically shall notify the office at least 24 hours in advance of the meeting of their intent to participate electronically.
(4) Role of the Independent Review Committee: The Independent Review Committee may:
(a) Make recommendations to the Office regarding appropriate terms and conditions for an agreement with a qualified hotel;
(b) Consult with the Office regarding compliance with the;
(i) Conditions, contingencies and requirements related to the convention incentive:
(ii) Proof of new tax revenue to support an application or claim for a convention incentive;
(iii) Proof of reduction of the tax credit by $1,900,000 for the first two years of the project;
(c) Specify the maximum dollar amount that the incentive recipient may receive for each application;
(d) Review documentation to ensure that incentives are being used for the purposes set forth in Utah Code Section 63N-2-513.
(1) The applicant for a convention incentive shall be paid in accordance with Utah Code Section 63N-2-505 The entity claiming the convention incentive shall submit a claim in a form prescribed by the Office.
(2) For claims of construction or off-site revenue, each claim shall identify by location, using the nine digit postal code, where the sales and use taxes constituting new tax revenue were paid. For each location identified, the certification shall itemize the amount constituting new tax revenue for each category of sales and use tax identified in Utah Code Section 63N-2-502.
(3) Once an application and the tax returns referenced in Utah Code Section 63N-2-505(2)(b) are received, the Governor's Office of Economic Development shall have 90 days to review the information and determine whether there is sufficient information to certify the claim for payment.
(4) Any additional information requested by the Office shall be provided within 30 days.
(5) Following review of the information requested and received, the Office, shall issue a Notice of Agency Action either approving, modifying, rejecting a claim, or instructing the qualified hotel owner or host local government to resubmit the claim.
(i) Timing and Amount of payment of an approved claim is subject to the availability of funds in the Incentive Fund.
(ii) Notwithstanding Sub-section (i), if the application is approved and there is sufficient funds in the Incentive Fund, payments will be made within 30 days of the notice approving the claim in paragraph 5.
(6) If either the qualified hotel owner or the host local government are aggrieved by the Notice of Agency Action, the entity may seek review by the Executive Director of the Governor's Office of Economic Development, using the procedures set forth in the Utah Administrative Procedures Act, Utah Code Section 63G-4-301.
(1) The Office shall define in an Agreement with the Qualified Hotel how and under what circumstances a county in which a qualified hotel is located shall retain incremental property tax revenue during the eligibility period and that provides assurances that incremental property tax revenue may only be used for the purposes set forth in Utah Code Section 63N-2-508(3).
(1) There is created an expendable special revenue fund known as the Hotel Impact Mitigation Fund.
(2) An affected hotel may apply for mitigation by Filing an Application in a form prescribed by the Office.
(a) Applications for mitigation will be accepted during an "open application" period, with opening and closing dates specified by the Office. Notification of the open application period will be posted on the GOED website.
(b) An applicant who fails to apply for mitigation during the open application period will not be eligible for mitigation funds during that fiscal year.
(c) Applications will be accepted for four consecutive years per Utah Code Section 63N-2-512(5)(a)(ii). An applicant must submit a new application each year, and the application must reflect the direct loss for the preceding calendar year only. Any additional losses reported beyond the preceding calendar year's losses shall be discounted.
(3) Eligibility: In order to be determined eligible for reimbursement from the Hotel Impact Mitigation Fund, an applicant shall demonstrate:
(a) That the applicant is a hotel built in the state before July 1, 2014;
(b) That the hotel has experienced a direct loss as defined in Utah Code Section 63N-2-512(1)(b).
(c) Evidence of Direct Loss must clearly establish the link between the qualified hotel and the applicant's loss. In order to show Direct Loss, the Applicant shall:
(i) Provide the applicant's baseline occupancy rates for the prior 3 years, by year;
(ii) Provide audited financial reports for the prior 3 years, by year.
(iii) Provide Tax Return data showing that the Applicant has reported a financial loss;
(iv) Provide audited statement showing the link between the qualified hotel and the applicant's direct loss, showing that the qualified hotel, and not any other factor, is responsible for the direct loss.
(v) Apply during the open application period as set forth in subsection (2).
(3) In accordance with office rules, the board shall annually pay up to $2,100,000 of money in the mitigation fund:
(a) to affected hotels, on a pro rata basis, based on amount of direct loss claimed and verified by the Office;
(b) and based on the unencumbered money available in the Hotel Impact Mitigation Fund for the fiscal year in which the applications are processed.
(4) The board shall make any required payment within 90 days of the end of the application period, unless an applicant seeks agency review or good cause exists to extend the time.
(5) If an application for reimbursement by the Hotel Impact Mitigation Fund is denied, the entity may seek review by the Executive Director of the Governor's Office of Economic Development, using the procedures set forth in the Utah Administrative Procedures Act, Utah Code Section 63G-4-301.
(a) Review must be filed within 5 business days of notice by the Office that the Application is denied.
hotel convention center incentives, tax credits
March 14, 2016
For questions regarding the content or application of rules under Title R357, please contact the promulgating agency (Governor, Economic Development). A list of agencies with links to their homepages is available at http://www.utah.gov/government/agencylist.html or from http://www.rules.utah.gov/contact/agencycontacts.htm.