Government Affairs Update
March 2, 2021
Infrastructure bill revised and passes House unanimously
H.B.433sub2 (Amendments Related to Infrastructure Funding) (Rep. Mike Schultz / Senator Kirk Cullimore)
HB433 has been substituted (revised), reflecting the outcome of discussions about the size, scope, and mix of funding sources for state infrastructure investment. The bill was passed by the House today unanimously. Below is a list of key modifications to the bill. Following that is a full updated summary of the bill.
Key modifications to HB433sub2 (incorporating revisions from sub1 and sub2):
- Total funding for transportation authorized by the bill changes from $2.2B to $1.1B.
- One-time funding for transportation projects is increased from $755.4M to $869.6M, and several projects to be funded are added.
- New bond authorization is reduced from $1.4B to $264M, and that bonding is used for public transit, mainly enhancements of FrontRunner. There was hesitation about the level of bonding proposed in the introduced version of HB433, given the significant one-time funds available to commit to infrastructure and the significant ongoing funding that goes into the UDOT Transportation Investment Fund (TIF).
Even without issuing bonds for road projects, projects will still move forward through the State Transportation Commission prioritization process. Projects will be selected from the TIF Ranked List, which automatically considers projects that are included in phase one of Utah’s Unified Transportation Plan.
- Funding for some items that were in the introduced version of HB433 are now removed from this bill and are funded through other appropriations bills, including $35M (increased from $32.5M) for active transportation, as well as additional funding for trails, outdoor recreation, open space, and state parks.
Summary of HB433sub2
HB433sub2 authorizes $1.1 billion in investments in state roads, public transportation, and active transportation, through a combination of the authorization of new bonding and the appropriation of available one-time revenues (here is a reminder about the recently updated “consensus” revenue estimates for state fiscal years 2021 and 2022).
As we reported to you before the legislative session began, the Governor and Legislature have been expected to authorize additional investments in infrastructure because of the historically low interest rates, a desire to support strong economic performance, and an ongoing need for transportation projects to accommodate growth.
In January, WFRC and Utah’s other MPOs, along with ULCT and UAC, developed a letter of support and principles for infrastructure investment (a similar letter was also submitted to Governor Cox and Lieutenant Governor Henderson):
1.Invest in infrastructure.
HB433 authorizes investment of $1.1 B in Utah’s infrastructure. This is coupled with the significant ongoing investment of State funds in Utah’s transportation system.
2.Support multi-modal transportation choices.
HB433 invests in state roads, and makes an unprecedented investment of state funding in transit and active transportation. The investment in active transportation is consistent with this letter that was signed by over 400 public, private, and community stakeholders across Utah urging the Governor and Legislature to invest in constructing high-priority, regionally important “active transportation” (i.e., biking and walking) projects throughout the State.
3. Utilize the professional planning and prioritization process.
4.Be fiscally prudent - balance current infrastructure investment needs with long-term fiscal stability.
HB433 uses a mix of one-time cash (general fund appropriations) and bonding against future transportation revenues.
Details of HB433sub2 and related appropriations
From one-time general funds, appropriates the following:
- $705M (that goes into the TIF) for the costs of right-of-way acquisition, construction, reconstruction, or renovation of or improvement to the following state highway projects (note that funding is not specified project-by-project; rather the total amount is appropriated to UDOT, who will administer the funding):
- The connector road between Main Street and 1600 North in the city of Vineyard
- Geneva Road from University Parkway to 1800 South in Utah County
- The SR-97 interchange at 5600 South on I-15 in Weber County
- Two lanes on U-111 from Herriman Parkway to 11800 South in Salt Lake County
- Widening I-15 between mileposts 10 and 13 and the interchange at milepost 11 in Washington City
- Improvements to 1600 North in Orem from 1200 West to State Street
- Widening I-15 between mileposts 6 and 8 in St. George
- Widening 1600 South from Main Street in the city of Spanish Fork to SR-51
- Widening US 6 from Sheep Creek to Mill Fork between mileposts 195 and 197 in Spanish Fork Canyon
- I-15 northbound between mileposts 43 and 56, south of Cedar City, near Kanarraville
- A passing lane on SR-132 between mileposts 41.1 and 43.7 between mileposts 43 and 45.1 between Nephi and Fountain Green
- East Zion SR-9 improvements
- Toquerville Parkway in Washington County
- An environmental study on Foothill Boulevard in the city of Saratoga Springs in Utah County
- For construction of an interchange on Bangerter Highway at 13400 South (new in substitute bill)
- An environmental impact study for Kimball Junction in Summit County (new in substitute bill)
- $28M (that goes into the TIF) as pass-through funds, to be distributed as necessary to pay project costs based upon a statement of cash flow that the local jurisdiction where the project is located provides to the department demonstrating the need for money for the project, for the following projects in the following amounts (new in substitute bill):
- $5M for Payson Main Street repair and replacement.
- $8M for a Bluffdale 14600 South railroad bypass.
- $5M for improvements to 4700 South in Taylorsville.
- $10M for improvements to the west side frontage roads adjacent to U.S. 40 between mile markers 7 and 10 Summit County.
- $101.6M (that goes into the TTIF) for transit projects:
- $100M to pay to double track strategic sections of the FrontRunner commuter rail system. In combination with bond funding authorized (see below), this will allow for enhanced speed, frequency, capacity, and reliability of FrontRunner service.
- $1.6M to pay for a rail station in the city of Vineyard.
$35M (that goes into the TIF) for active transportation “paved pedestrian or paved nonmotorized transportation projects.” This is from Senate Bill 2 (New Fiscal Year Supplemental Appropriations Act), line 493. The bill does not specify projects, so these will be prioritized by the State Transportation Commission, based on projects in Utah's Unified Transportation Plan. The bill reduces the required local match for these projects from 40% to 20% of the costs needed for construction, reconstruction, or renovation; this will help local communities participate in advancing these projects.
Authorizes additional bonding for transportation:
- $232M for public transit projects, bonded against future Transit Transportation Investment Fund (TTIF) revenues. This will consume a portion of the anticipated TTIF revenues to pay debt service on the bonds.
- $200M to double track strategic sections of the FrontRunner commuter rail system. UTA will pay $5M per year towards debt service costs, for 15 years.
- $12M to pay for construction and improvements to the S-Line streetcar facilities in Salt Lake City (new in substitute bill).
- $11M for bus rapid transit (BRT) in the Salt Lake midvalley area.
- $5M for an environmental study at the point of the mountain area.
- $4M for a Utah Transit Authority and Sharp-Tintic railroad consolidation project in Utah County.
- $32M for rail projects, to be paid from an existing locomotive fuel sales tax from the Rail Transportation Restricted Account.
- $29M for UDOT to pass through to Brigham City to be used for the Forest Street rail bridge project.
- $3M for UDOT to pass through to the City of North Salt Lake for an environmental study for a grade separation at 1100 North in North Salt Lake (new in substitute bill).
- The bill sets an expectation that the State Transportation Commission will prioritize projects beyond the normal programming time horizon of 4-6 years. Annually, over $700M (the FY21 amount is $765M) in State funding is transferred into the UDOT Transportation Investment Fund (TIF). These funds are used to pay debt service on previously issued bonds and to deliver new projects as programmed by the State Transportation Commission. The Commission will identify the timing for the delivery of prioritized projects by extending the programming time horizon of the ongoing funding that flows into the TIF. (As a reminder, the introduced version of HB433 anticipated issuing bonds over the next four or so years, to be paid off over a 15-year period out of future TIF revenues. This would have enabled the acceleration of some projects, and also would have resulted in additional interest costs.)
The bill provides that bonds will not be issued that would cause total current outstanding general obligation debt of the state to exceed 50% of the constitutional limitation. (In fact, even with the bond issuance authorized in the introduced version of HB433, the debt-limit percentage was expected to decline to below 30% over the next five years.)
Funding for Cottonwood Canyons Transportation (new in substitute bill)
- Creates a Cottonwood Canyons Transportation Investment Fund (CCTIF) within UDOT’s TIF for public transit or transportation projects.
- Funds the CCTIF at a level up to $20M per year, beginning in FY21, from the incremental growth in state sales taxes -- although the actual amount is anticipated to be significantly less than $20M.
- Currently, 20.68% of the state sales tax is deposited into UDOT’s Transportation Investment Fund. If the revenue from that transfer grows by more than 3% year-over-year, then an amount equivalent to 25% of the revenue growth over the 3% will be transferred to the CCTIF, up to a maximum of $20M.
Andrew S. Gruber