Legislature raises TIF share, clarifies lighting authority and creates county infrastructure bank funded by Salt Lake County tax

UDOT staff summarized multiple legislative changes that will affect planning and programming, including an increase in the share of state sales tax flowing into the Transportation Investment Fund (TIF), new allowable uses for TIF, project earmarks tied to Salt Lake County and the creation of a county‑level infrastructure bank funded by a Salt Lake County local option sales tax.

Key items summarized by UDOT staff - TIF sales tax increase: Staff said the legislature raised the statewide sales‑tax share earmarked for the Transportation Investment Fund from 20.68% to 27.68% of statewide sales tax collections. UDOT staff described the change as largely revenue‑neutral in the near term because the fiscal package included a roughly $330 million ongoing general‑fund appropriation to offset the increase; staff warned that percentage‑based revenue will grow over time. - Corridor preservation and transit: The legislature clarified that TIF funds may be used for corridor preservation and, in some cases, for corridor preservation that supports transit (for example FrontRunner or similar rail corridors). Staff stressed the commission must balance corridor preservation purchases against programmed capacity projects to avoid creating cash‑flow shortfalls for projects already in the STIP. - Salt Lake County bank and local earmarks: The 2024 session created a County of the First Class Infrastructure Bank, and Salt Lake County’s recently adopted fifth local option sales tax will capitalize that county bank beginning July 1. UDOT staff said statute requires that the initial, legislated uses of those funds be paid first; the statute also requires a commission rule to administer the bank, and staff brought a draft rule for review (the rule mirrors the state infrastructure bank process and sets the interest rate as the state's AAA general obligation bond rate plus 0.5%). - Large earmarks and local projects: Staff identified several legislative earmarks and appropriations cited in the bill summaries: up to $300 million for improvements on 300 West in Salt Lake City, $3 million for an environmental study of I‑15 in the Salem/Benjamin area, $2 million for a local Kane County project near Coral Pink Sand Dunes State Park, and a $20 million ongoing transfer into a corridor preservation account for the "Marta del Rey" corridor (statute name as referenced in the workshop). Staff also described a new Salt Lake County affordable‑housing infrastructure grant program funded with $70 million of transportation bonds; that program will be administered by a board that includes UDOT and housing and economic development officials. - Black license plate revenues: The legislature redirected most proceeds from a popular special black license plate to TIF; staff estimated the change could provide additional annual revenue in the low single‑digit millions depending on continued plate adoption.

County bank rule and SIB applications UDOT presented a draft commission rule to implement the County of the First Class Infrastructure Bank; staff said the rule closely matches the state infrastructure bank rule and sets application, prioritization and repayment procedures (statute authorizes loans and “assistance”; staff noted the language differs slightly across legislative sections and recommended the commission consider a consistent definition). Staff stressed the Salt Lake County tax will fund the bank over several years and that the statute included several legislative directives prescribing how initial proceeds must be used, so UDOT does not expect to accept open competitive applications for several months.

State Infrastructure Bank (SIB) activity UDOT staff provided the SIB balance and reported two pending loans: a Provo City loan (approved by the commission; the loan agreement is being finalized) and a Saratoga Springs application that requested $11 million but, given current SIB cash, UDOT staff said they could only offer about $6.2 million immediately; Saratoga Springs representatives will present the revised request. Staff emphasized that the SIB is capitalized from prior legislative actions and loan repayments and that approvals must reflect available cash and scheduled repayments.

Why it matters The legislative changes change how much recurring sales‑tax revenue flows into TIF, broaden allowable TIF uses (including corridor preservation and some transit uses), create a bank limited to counties of the first class funded by local option tax proceeds, and place several local project earmarks into statute. Those changes will alter long‑range cash flow projections and constrain near‑term discretionary programming choices.

At the workshop several commissioners expressed concern about queueing loan requests and commitments against bank balances that are limited until repayments arrive; commissioners asked staff to be explicit in May about which projects are deliverable under the proposed program levels and to present rule wording that reconciles differing statutory terms ("assistance" vs "grant" language) before the commission adopts the county bank rule.