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Provo staff flag bills that could shrink Transportation Utility Fund revenue by about $250,000
Summary
City staff warned the council that two bills under consideration — a House bill to codify transportation utility fees with classification rules and a Senate bill that would exempt religious nonprofit properties — could reduce Provo's TUF revenue by roughly $251,000 annually if the Senate language exempting religious entities becomes law.
Public Works Director Gordon Haidt and consultant Vern briefed the City Council on potential impacts of two state bills — House Bill 454 and Senate Bill 310 — on Provo’s Transportation Utility Fund (TUF).
Haidt and Vern said House Bill 454 would codify a transparent process for municipal TUFs, permit classification of users, require public reporting and allow local referenda; the Utah League of Cities and Towns supports that bill. Provisions include a 10‑year expiration for the TUF unless the municipality completes a reassessment and reporting obligations to the state auditor.
Senate Bill 310, sponsored in the Senate, would exempt religious nonprofit organizations from TUF charges. Staff estimated that if the senate bill’s religious‑entity exemption were enacted as written, Provo would lose approximately $251,000 in annual TUF revenue — roughly 10% of the program’s current annual yield (staff estimated a baseline of about $2.7 million under the current fee structure).
Haidt and Vern said the proposed House bill contains flexibility for cities to adopt classifications that better align fees to use, which the city’s own study adopted. But they warned Senate Bill 310 would create an allocation and fairness issue because a substantial class of large tax‑exempt property owners (houses of worship, BYU properties and similar) would no longer contribute even though they generate wear on transportation infrastructure.
Staff said the League is monitoring the bills and that the Senate bill was scheduled for committee consideration; councilors were urged to coordinate with the League and monitor committee actions. Staff said they will present the council with a full study of the TUF and an updated fee proposal on March 25.
Ending: Councilors asked for additional analysis of the fiscal impact and different fee classification options; staff said they would return with expanded data and recommended language once the legislative session evolves.
