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League flags impact-fee audit and other revenue changes: fuel-tax backfill, HB77 cleanup, transit revenue
Summary
League staff summarized that the state backfilled local fuel-tax shares with general-fund dollars, House Bill 77 closed a collection gap for reauthorized sales taxes, the Legislative Auditor General will audit impact fees this summer, and SP197 created dedicated transit revenue.
In a rapid-fire review of other municipal revenue actions, League presenters said the Legislature reduced the motor-fuel tax rate but backfilled local shares from the state general fund so cities and counties were "held harmless." The presenters urged local officials to monitor state budget actions but noted local distributions remain intact for now.
House Bill 77 addressed a reauthorization/collection issue for local "zap" and "wrap" taxes, requiring jurisdictions to notify the Tax Commission when a reauthorization passes so the commission can continue collections. The League described this as a technical fix to a communication gap that caused collection problems for a small number of jurisdictions in 2025.
Speakers also previewed an audit of impact fees by the Legislative Auditor General (OLA). The OLA plans to review how Utah law, practice and fee studies compare with other states, interview cities, counties, developers and consultants, and deliver recommendations by the end of the interim to inform possible legislation in 2027. The League advised jurisdictions to expect possible audit outreach this summer.
On transit, SP197 creates a dedicated revenue stream tied to state sales-tax growth for transit projects and changes UTA governance; local planners should track how dedicated growth revenue is allocated and programed.
League staff said water-fee policy and HB501 (discussed but not passed) are likely to return given drought concerns, and they reminded participants that additional training on impact fees and related interim topics will be provided at the upcoming League conference.
