Utah lawmakers pass bond-related bills and budget

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Utah lawmakers wrapped up their legislative session earlier this month, sending a fiscal 2026 budget — along with several bills that could spur bond issuance — to Gov. Spencer Cox, who is working his way through the measures. 

Salt Lake City's downtown will get a boost from the creation of a convention center reinvestment zone under Senate Bill 26, which Cox signed into law on Wednesday.

The measure allows the use of certain state and local sales tax revenue generated within the zone — as well as incremental increases in property taxes — to pay off bonds that would be issued to finance renovation and expansion of the Salt Palace convention center and other facilities within the zone. 

"The renovation of the Salt Palace will unlock the potential of the downtown district," Mayor Erin Mendenhall said in a statement. 

Last year, the Republican-led legislature approved up to $900 million of bonds to finance the renovation of the Delta Center,  the home of the National Basketball Association's Utah Jazz, to accommodate professional hockey. In October, the city council approved a 0.5% sales tax increase expected to generate about $1.2 billion over 30 years, to fund the project.

With the Winter Olympics coming to Salt Lake City in 2034, SB 333 would allow a city or county to create a major sporting event venue zone that would capture incremental increases in property and local sales taxes, and — under certain circumstances— a resort communities sales tax, with the revenue used to pay off bonds.

A lengthy bill seeks changes to public infrastructure districts (PID), which were first allowed under a 2019 law to finance public infrastructure for new developments or redevelopments through the issuance of special assessment, general obligation, or limited tax bonds.

Ahead of a House vote on the measure, Republican State Rep. Paul Cutler said the most important thing the bill does is require a registered municipal advisor for limited tax or assessment bond issues.  

"This makes sure that there are independent advisors advising those issuing the bonds and those buying the bonds, so there's no conflict — which we've had in some cases in the past — that would allow the same person to advise both sides and make a killing," he said.

The bill also expands the use of bond proceeds to include certain private infrastructure, including roads, parking, and utilities. 

"It's legislation that will further encourage smart growth in Utah and allows for some pretty cost-effective infrastructure financing," said Benjamin Becker, a managing director in Piper Sandler's special district group.

Under SB 239, which was signed into law March 3, appointments made by the governor to the five-member Utah Inland Port Authority board were increased to three from two.

In September, environmental groups sued the authority and the governor in state court, claiming that while the authority functions as an executive agency, it was directly controlled by Utah lawmakers in violation of the state's constitutionally mandated separation of powers.

As a result, the board "unconstitutionally" formed 10 project areas since 2022 that jeopardize "sensitive ecosystems, public health and safety, public recreational and aesthetic enjoyment, and the property values and quality of life for local homeowners," according to the lawsuit.

Michelle White, an attorney for the plaintiffs, said the groups are evaluating how to proceed with the litigation. 

"The new structure of the UIPA board appointments — which still allows the (Senate) president and (House) speaker to directly appoint and remove two members of the board — does not fully address or resolve our claims," she said in an email.

Jonathan Freedman, who had been a legislatively appointed board member, was sworn in as the governor's appointee at the authority's meeting last week to comply with the new law.

Despite calls by the environmental group plaintiffs to rescind the project areas and conduct environmental, traffic, and water use studies, as well as hold public hearings, the board reapproved resolutions adopting project area plans and amendments, creating public infrastructure districts, and other matters. 

With the enactment of SB 239, UIPA Executive Director Ben Hart said the authority is poised to move forward.

"Next steps should be going to market in the near term, probably in a few of our project areas," he said, adding that bond issuance would total in the tens of millions of dollars. 

The authority's only debt issuance was $150 million of unrated UIPA Crossroads Public Infrastructure District tax differential revenue bonds sold in December 2021 to finance an intermodal transportation center in Salt Lake City. 

Hart would also be a member of a Spaceport Exploration Committee created under SB 62. He said UIPA could have a role in developing a port complex for deliveries to a future spaceport.

Lawmakers passed a $30.8 billion fiscal 2026 all-funds budget that includes $12.7 billion for the general, income tax, and uniform school funds. Utah's flat 4.55% flat individual income tax rate was reduced to 4.5% at an ongoing cost of $103.3 million.

The budget includes a one-time, $10 million appropriation from the general fund for nuclear power development as part of the governor's Operation Gigawatt initiative, which calls for doubling the state's power production over the next 10 years.

House Bill 249, which creates a Nuclear Energy Consortium with the Office of Energy Development, also passed.

"Moving forward with nuclear is of critical importance to our state," Cox told reporters at a March 7 end-of-session press conference. 

A bill was sent to the governor that would give the Utah Board of Higher Education up to $250 million in revenue bond authorization for construction of a Huntsman Cancer Institute Vineyard Campus facility and for a student housing project. The bill also authorizes up to $85 million of bonds or a lease-purchase agreement for the State Building Ownership Authority for a warehouse facility and club store.

Utah was one of several states considering cryptocurrency investment-related legislation this year. 

The version of House Bill 230 that passed eliminated a provision allowing the state treasurer to invest up to 5% of the State Disaster Recovery Restricted Account, General Fund Budget Reserve Account, Income Tax Fund Budget Reserve Account, or Medicaid Growth Reduction and Budget Stabilization Account in a digital asset with a $500 billion market capitalization over the previous 12 months or a stable coin.

The final measure prohibits state and local governments from restricting the acceptance or custody of digital assets and includes protections for digital asset mining.