Senate passes bill allowing universities to create development areas, allocate privileged tax revenue to institutions and municipalities

Second substitute Senate Bill 129, a bill to create higher‑education development areas and specify revenue distribution, passed the Utah Senate by roll call 25-0 with four absent.

Sponsor Senator Wilson described the bill as a way for universities to unlock revenue from university-owned land development projects and direct those revenues into a newly established fund for capital facilities, operations, maintenance and other university needs. Among the changes in the second substitute, the bill sets Jan. 1, 2035 as the deadline by which an eligible university may designate a development area, caps a development area at 75 acres, allows redevelopment areas inside a development area, and requires a board of trustees to deliver a copy of its resolution to the county auditor (in addition to previous recipients).

A key fiscal and policy change: the bill makes property leased to a for‑profit business in a development area subject to a privileged tax and specifies that the university will receive 80% of the privileged tax revenue while municipalities would receive the remaining 20%. Senator Wilson said the change to a privileged tax model was negotiated with stakeholders and was intended to increase funds available to local municipalities.

Discussion: Senator Reid (seeking clarification) asked why the change to a privileged tax was made and how the funds would be distributed; Senator Wilson replied that stakeholders, including municipalities and the universities, had been involved in negotiations and that the change was designed to increase municipal receipts with an 80/20 split. Wilson said universities consulted and were comfortable with the change. The sponsor also said the substitute removed the requirement for board of trustees to obtain approval from the transportation infrastructure appropriation subcommittee before adopting a development agreement.

Votes and outcome: Second substitute Senate Bill 129 received 25 ayes, 0 nays, 4 absent and will be sent to the House for consideration.

Provenance: Sponsor explanation and roll call on the Senate floor appear in the session transcript where Senator Wilson explained the stakeholder negotiations, the 80/20 privileged tax split and the 75‑acre limit.

Ending: The bill passed the Senate unanimously and proceeds to the House; sponsors said they negotiated broadly with university and municipal stakeholders to secure support.