Transportation utility fee.
As used in this section: "Transportation facility" means any of the items listed in Subsection 59-12-2212.2(1) as purposes for which revenue from a local option sales and use tax under Section 59-12-2212.2 may be expended. "Transportation fund" means a fund described in and established under Subsection (9) . "Transportation utility fee" means a fee imposed to generate revenue to pay for costs associated with developing, constructing, maintaining, operating, repairing, upgrading, or replacing a transportation facility. "User segment" means a segment of the city's population based on a classification established under Subsection (5) . A city may impose and collect a transportation utility fee: if the city establishes a reasonable relationship between: the amount of the transportation utility fee; and the services provided to, the benefits received by, or the need created by those who pay the transportation utility fee; and only as provided in this section. A city may impose a transportation utility fee to provide funding for any number of transportation facilities but may not have more than a single transportation utility fee in effect at a time. A city may not impose or increase a transportation utility fee unless the city first conducts a study as described in this Subsection (3) . A study under Subsection (3)(a) shall: determine and provide a reasonable estimate of the need for a new transportation facility or for maintaining, operating, repairing, upgrading, or replacing an existing transportation facility; identify and provide a reasonable estimate of existing funding sources that could be used to pay for a new transportation facility or for maintaining, operating, repairing, upgrading, or replacing an existing transportation facility; explain and provide a reasonable calculation showing how existing city funding sources are inadequate to cover the cost of constructing a new transportation facility or maintaining, operating, repairing, upgrading, or replacing an existing transportation facility; determine whether the proposed transportation utility fee is reasonably related to: the services provided to those who pay the transportation utility fee; the benefits received by persons who pay the transportation utility fee; or the need created by those who pay the transportation utility fee; explain the reasonable relationship determined under Subsection (3)(b)(iv) ; and determine whether there is a reasonable basis for different rates within a proposed transportation utility fee based on different levels of services provided to, benefits received by, or need created by those who pay the transportation utility fee, as described in Subsection (7) , and, if so, explain the basis for the proposed different rates. A city that conducts a study under Subsection (3)(a) shall post a copy of the study on the city's website, if the city has a website. In developing a fee calculation for a transportation utility fee, a city shall: use methodologies based on trip generation, vehicle types, and traffic counts, including local data or standard civil engineering manuals; exclude traffic counts from whichever day of the week generates the lowest amount of traffic, on average and as best approximated with the methodologies used under Subsection (4)(a)(i) , for the transportation facility or transportation facility system; and utilize the study described in Subsection (3)(a) . A city may not utilize a fee study or fee calculation that takes into account the ownership or fair market value of a property owned by a user that will be subject to the fee. A city may utilize a fee study or fee calculation that takes the size of a property owned by a user into account to the extent that size is only used to determine trip generation, vehicle types, or traffic counts, based on objective data. A city shall establish different rates within a transportation utility fee for different classifications of users of a transportation facility if the rates and classifications have a reasonable basis. The different types of classifications of users of a transportation facility under Subsection (5)(a) shall include, at a minimum: residential users; commercial users; and other users. A reasonable basis under Subsection (5)(a) may include: different levels of benefits received by users of a transportation utility fee; different impacts on or usage of transportation facilities by those who pay the transportation utility fee; a difference in the cost of providing a transportation facility to different classifications of users; a difference in levels of risk to the operation of a transportation facility for different classifications of users; differing contributions that different classifications of users make, separate from a transportation utility fee, to the cost of constructing, maintaining, or operating a transportation facility; or distinguishable differences in the needs or conditions of different classifications of users based on economic, public policy, or other identifiable elements. A reasonable basis under Subsection (5)(a) may not include: whether a user resides inside or outside the city boundary; a consideration of the age of development within areas with the same zoning designation; or the lack of financial contributions, or the reduced financial contributions, that a tax-exempt organization user makes to the cost of constructing, maintaining, or operating a transportation facility. Before adopting an ordinance imposing or increasing a transportation utility fee, the governing body shall comply with the notice and public hearing requirements established in Sections 10-6-113 and 10-6-114 . The governing body of a city that proposes to impose or increase a transportation utility fee shall, in addition to the notice required under Subsection (6)(a) , provide notice of the proposed fee and the public hearing: in a notice with the city's monthly utility bill, if the city mails or emails residents a monthly utility bill; or through another primary means of communicating with residents, if the city does not provide residents a monthly utility bill. The public hearing required for a proposal to impose or increase a transportation utility fee may be held in conjunction with a budget hearing under Section 10-6-114 but shall be separate and distinct from the budget hearing. A transportation utility fee may be imposed or increased only by an ordinance adopted by the city's governing body. Subject to Subsection (7)(b)(ii) , the governing body may adopt an ordinance imposing or increasing a transportation utility fee at the same meeting in which the governing body adopts the city budget. The governing body vote on the imposition or increase of a transportation utility fee shall be separate from the governing body vote on the city budget or any other item. The amount of a transportation utility fee for the city's population or for any user segment shall be reasonably related to the services provided to, benefits received by, or need created by those within the city's population or user segment who pay the transportation utility fee, as determined in the study under Subsection (3) . Revenue from a transportation utility fee may not supplant existing general fund appropriations that the city has budgeted for transportation facilities as of the date the transportation utility fee becomes effective. The limitation under Subsection (7)(d)(i) does not apply to a designated transportation facilities capital or reserve account established before the effective date of a transportation utility fee under this section. Simultaneously with adopting an ordinance described in Subsection (7) , a city shall establish an appeals process for an individual or entity that wishes to challenge the user classification, as described in Subsection (5) , the city assigns to the individual or entity. As part of an appeal described in Subsection (8)(a) , the individual or entity shall: demonstrate why the city's assignment of a user classification to the individual or entity is not reasonable as applied to the individual or entity; and provide evidence of the individual's or entity's actual traffic count or trip generation. The appeal process described in Subsection (8)(a) shall establish the individual or body at the city that shall hear and make a final decision on the appeal, which shall be: the same individual or body that hears appeals related to other fee appeals, if the city has a process to appeal fees; the governing body; or the mayor, if the city operates under the council-mayor form of government established in Chapter 3b, Part 2, Council-Mayor Form of Municipal Government. A city that imposes a transportation utility fee shall establish a transportation fund as provided in this Subsection (9) . A city shall deposit into the transportation fund all revenue from a transportation utility fee. A city may not: deposit into or commingle with a transportation fund any money from any other source; or use money in a transportation fund for any purpose other than to pay for the cost of: the development or construction of a new transportation facility; upgrading or replacing an existing transportation facility; the maintenance, operation, or repair of an existing transportation facility; or reasonable administrative costs associated with the transportation fund or with activities described in Subsections (9)(c)(ii)(A) , (B), and (C). Notwithstanding Sections 10-6-124 , 10-6-125 , and 10-6-135.5 , a city may not transfer money in a transportation fund to any other fund or to a separate account. A city that imposes a transportation utility fee shall conduct an annual review of the transportation utility fee as provided in this Subsection (10) and prepare a written report of the annual review. In an annual review under Subsection (10)(a) , the governing body shall: review the balance of the transportation fund; review the current amount of the transportation utility fee; demonstrate that there is still a reasonable relationship between the amount of the transportation utility fee and the transportation services provided to, benefits received by, or need created by those who pay the fee; consider other possible revenue sources that the city could use for transportation facilities instead of a transportation utility fee; ensure that the city is compliant with Subsection (7)(d) ; and demonstrate that revenue from the transportation utility fee continues to be needed to provide a transportation facility that the city could not otherwise provide from other existing revenue sources. A city shall submit a copy of the written report under Subsection (10)(a) to the state auditor. A city may fulfill the requirement of Subsection (10)(c)(i) by submitting the written report as part of the city's annual financial reports submitted to the state auditor. A transportation utility fee imposed under this section expires 10 years after the effective date of the ordinance imposing the transportation utility fee. The 10-year period described in Subsection (11)(a) begins again with any subsequent adoption of any ordinance imposing a transportation utility fee after the initial adoption of an ordinance imposing a transportation utility fee. An ordinance imposing a transportation utility fee is subject to local referenda as provided in Title 20A, Chapter 7, Part 6 , Local Referenda - Procedures. A city that, before May 6, 2026, imposes a fee to pay for a transportation facility shall, no later than July 1, 2027: ensure that requirements of this section have been complied with for the fee that the city imposes; or repeal the fee. Nothing in this section precludes or abrogates the property tax exemptions provided for in Utah Constitution, Article XIII, Section 3. To the extent that a court determines a transportation utility fee is a property tax for purposes of Utah Constitution, Article XIII, Section 3, a city may not require a person to pay that transportation utility fee with respect to property or the use of property that is exempt from property tax under Utah Constitution, Article XIII, Section 3.
