Downtown Salt Lake City is changing before our eyes--for the better. Businesses are moving in and people are buying into residential and business opportunities. Last week I had the opportunity to participate in a downtown roundtable discussion at the invitation of the Salt Lake Downtown Alliance. The prestigious group of participants included the following other business leaders:

• Mark Gibbons, president, City Creek Reserve
• Mark Bouchard, senior managing partner, CB Richard Ellis
• Carl Barton, partner, Holland & Hart LLP
• Bob Springmeyer, principal, Bonneville Research
• Jim Tozer, managing director and president, Vectra Investments
• Bruce Bingham, partner, Hamilton Partners
• Lane Beattie, president, Salt Lake Chamber

To be sure, many individuals, businesses and groups have worked hard to help shape the bright future of our capital city. And, as you may have read, the accolades keep coming. Last week Kiplinger ranked Salt Lake City #5 in its list of top 10 cities for the next decade. Rankings such as Kiplinger's keep us very busy!

On another subject, it's time once again to publish our quarterly Site Selector newsletter, which we distribute to site selectors, corporate real estate executives and many other readers. The upcoming issue will focus on the laws passed during the 2010 legislative session that may affect economic development. As a precursor to the Site Selector newsletter, today's feature story highlights some of those laws.

Today's Economic Review also includes links to many of the ED-related news stories from the past week. As always, if you have comments, suggestions or topics you'd like to see in the Economic Review, please contact us by clicking the "Comments" link on the bottom of this page. Enjoy!

Jeff Edwards
President and CEO

Utah's 2010 legislative session is now in the history books. Here's a summary of some of the laws passed that will influence economic development in Utah.

Economic Development
Economic Development Incentives Act Amendments (HB 24)
This bill modifies the provisions of the Economic Development Incentives Act related to significant capital investment and the requirements for receiving a tax credit under the act. It defines "significant capital investment" for purposes of the Economic Development Incentives Act to be an amount of at least $10 million used to purchase a capital asset or fixed asset. Furthermore, it requires the applicant of the tax credit to provide the Governor's Office of Economic Development (GOED) with documentation showing that the applicant has satisfied the performance benchmarks required under the act, including the significant capital investment, the creation of high paying jobs, significant purchases from Utah vendors or providers, or any combination of these economic factors.

Economic Development Incentives Modifications (HB 118)
This bill modifies economic development provisions of Title 63M, Chapter 1, the Governor's Office of Economic Development, related to the Industrial Assistance Fund to include the retention of companies whose relocation outside the state would have a significant detrimental economic impact on the state as a whole, regions of the state, or specific components of the state. Furthermore, it increases the percentage of money in the Industrial Assistance Fund that may be used to take timely advantage of economic opportunities as they arise, modifies qualifications for receiving financial assistance from the Industrial Assistance Fund, and modifies the amount of transfer of surplus of General Fund revenue earmarked to the Industrial Assistance Fund.

Economic Development Incentive Amendments (SB 198)
SB 198 amends the Corporate Franchise and Income Taxes chapter, the Individual Income Tax Act, and the Economic Development Incentives Act relating to economic development incentives including tax credits. Among its provisions, the bill provides that a local government entity or community development and renewal agency may claim a refundable economic development tax credit under certain circumstances, and addresses the procedures, requirements, and administration related to the refundable economic development tax credit and the creation of economic development zones.

Sales and Use Tax Exemption Relating to Aircraft (SB 73)
SB 73 exempts the sales and use tax related to aircraft maintenance, repair, and overhaul (MRO). Under provisions in SB 073, MRO's will not be required to collect or pay sales tax. This levels the tax environment with more than 24 other states and further strengthens Utah's position as a great business location for aviation companies. The tax environment will remain favorable to aviation and thus encourage continued growth in this industry. Sales and use taxes related to other individuals, businesses, and local governments are unaffected.

Military Installation Development Authority Modifications (SB 124)
SB 124 makes several modifications to the Military Installation Development Authority (MIDA), increasing an affected city's ability to approve projects undertaken by the MIDA and creating a statewide MIDA board with enhanced municipal participation. The bill also allows, with municipal approval, the creation of larger project areas or non-contiguous project areas. Lastly the bill allows for the implementation of the resort tax in areas that already impose the resort tax.

Health Care
Health System Reform Amendments (HB 294)
HB 294 further improves Utah's leading role in health system reform by modifying the health system exchange program. The exchange, which the Salt Lake Chamber calls "the foundational piece of Utah's health system reform efforts," was created in the 2009 legislative session to facilitate a defined contribution market available to employers as an option to provide health benefits. However, after the exchange's limited launch an artificial price discrepancy was discovered between the exchange and the market outside the exchange, which deterred consumer participation. H.B. 294 resolves the price discrepancy without any mandates. The bill provides greater choice to all involved in Utah's health system, including employers, employees, and insurance carriers; and allows for the establishment of a large group pilot program that, according to the Chamber, has the potential to bring nearly 40,000 individuals to the exchange. It is expected the increased volume will increase competition in the exchange and help unleash market-driven reforms to contain costs.

Medical Malpractice Amendments (SB 145)
SB 145 amends the Utah Health Care Malpractice Act. It amends the cap on non-economic damages that may be awarded in a malpractice action; requires an affidavit of merit from a health care professional to proceed with an action if the pre-litigation panel makes a finding of non-meritorious; and limits the liability of a health care provider, in certain circumstances, for the acts or omissions of an apparent agent.

Energy
Renewable Energy Financing Provision (HB 145)
HB 145 enables Utah's non-profit groups, local governments, schools and churches to take advantage of innovative funding and tax incentives for renewable energy projects. Further, it excludes from the definition of a "public utility" an independent energy producer that provides service to a customer on the real property where an independent power production facility is located. Under certain circumstances this bill provides for actions by the Public Service Commission.

Renewable Energy--Methane Gas (HB 192)
This bill addresses the treatment of electrical energy derived from certain methane gas as a renewable energy source and provides that electrical energy derived from methane gas from certain coal mine facilities be included among the types of waste gases considered as renewable energy sources.

SB 104 Renewable Energy Modifications (SB 104)
This bill classifies certain compressed air energy storage technology as a renewable energy source.

Taxes
Property Tax Amendments (HB 259)
This bill modifies provisions relating to property tax. The bill expands a requirement to conduct an annual update of property values using a mass appraisal system so that the requirement applies to assessors in counties of the third, fourth, fifth, and sixth class in addition to county assessors in first and second class counties. It modifies the distribution of certain funds from the multi-county assessing and collecting levy; modifies a provision relating to a property tax notice that the county auditor is required to provide; and modifies the time within which a taxpayer may file an appeal relating to the value of personal property.

Allocation and Apportionment of Income and Deduction of a Net Loss (SB 165)
SB 165 amends the Revenue and Taxation title to address the allocation and apportionment of income and the deduction of a net loss by an acquired corporation. The bill amends provisions in the Multistate Tax Compact governing allocation and apportionment of income, addresses the apportionment of business income to the state, and addresses the time period during which a taxpayer's determination to use a certain formula to apportion business income to the state is in effect. The bill also addresses the amount of net loss a corporation that is acquired by a unitary group may deduct.

Workforce Services
Unemployment Insurance Amendments (HB 18)
This bill modifies provisions of the Employment Security Act related to unemployment insurance benefits. The bill makes modifications to the definition of base period for purposes related to qualifying for unemployment insurance benefits. It also requires an annual report by the division on the impact of the modifications.

Education
College of Eastern Utah Affiliation with Utah State University (SB 69)
SB 69 establishes Utah State University-College of Eastern Utah as a comprehensive regional college of Utah State University.

Authorization of Charter Schools by Higher Education (SB 55)
SB 55 allows higher education institutions to authorize the establishment and operation of charter schools. The expectation is that the higher educational institutions will set high student achievement standards in schools that they administer and many will focus on STEM (Science, Technology, Engineering and Math) curriculum, helping to produce a quality workforce to fuel Utah's innovative companies.