Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the IPP Project topic
No spam. Unsubscribe anytime.
Senate approves bill enabling third IPP unit and out-of-state participation, preserves tax parity
Summary
Senate Bill 29, allowing out-of-state participation in a proposed third unit at the IPP plant and preserving equivalent tax treatment, passed 25–0 after sponsors reassured members that financing would be structured to prevent state liability for out-of-state bond defaults.
The Utah Senate on Feb. 5 passed Senate Bill 29, a committee bill that amends the Interlocal Cooperation Act to permit a third generating unit at the Independent Power Project (IPP) to include out-of-state ownership while preserving the tax and obligations currently applied to the existing units. The bill passed on a roll-call vote of 25 yeas, no nays, and 4 absent and will move to the third-reading calendar.
Sponsor Sen. Blackcomb said the change is primarily technical and intended to allow a new project participant structure that includes non-Utah ownership while assuring municipalities and joint-action participants (AMPAs/UAMPS) that their tax treatment will remain consistent with the current projects. "We're changing some of the provisions in the code to allow for a third unit at the IPP plant to be built," Blackcomb said, adding that wording may be fine-tuned in a substitute but the bill's intent will not change.
Sen. Hilliard and others asked whether out-of-state bond participation could leave Utah exposed if a participant defaulted. Blackcomb and other sponsors explained the financing would be structured so that each participating entity issues its own bonds (for example, a California participant would issue its own bonds for its share), limiting Utah's exposure. "If they default on their bonds, that's gonna be their problem, not our problem," one floor speaker said in explaining the approach to bonding.
Questions also centered on gross-receipts/in-lieu tax language. Sen. Valentine queried lines 401–405 and whether the provision created a gross-receipts-style tax; Blackcomb said the bill restates existing in-lieu tax treatment and that a substitute would correct misread fiscal notes submitted earlier by the tax commission.
Sen. Stevenson supported the bill's tax parity assurances, saying municipal enterprises should pay comparable taxes to private generators. "This statute... ensures that if IPA adds another unit, they're gonna be paying the same school taxes as their private sector counterparts would be paying," Stevenson said.
With those assurances, the Senate voted to advance SB29 to the third-reading calendar.
