S.B. 245 Impact Fee Amendments: transcript

Senate Revenue and Taxation Committee, Feb 13, 2026

1. Committee chair (presiding)32:53

   item number three is, uh, Senator Musselman's impact Fee Amendments Senate Bill 2 45, Senator Musselman.

2. Sen. Calvin R. Musselman33:06

   Thanks, Mr. Chair, for the opportunity to present. Um, there is an amendment that I gonna Say you have an amendment. Yeah. So I'll leave it to the chair's discretion, um, on when you wanna move that, but basically all that amendment does is, uh, I think it's prob, I I thought it was self-explanatory in it, but we're just making sure that everybody's aware this does not go back in time. It's not retroactive. So it's just making sure it only in effect May six going forward. So, pretty simple. Was that at, at the request of the municipalities and, and I thought that it was appropriate. So, um, if I might continue though, Mr. Chair with the, Why don't you, for a purpose of the bill, why don't you go ahead and present the entire bill and the amendment and We'll, we will adopt your amendment later.

3. Committee chair (presiding)33:49

   We know. Okay. We're, I mean, it's, that's not a contentious issue, So go ahead. Okay.

4. Sen. Calvin R. Musselman33:54

   Normally, I just kind of present, I don't necessarily read from a script. I do want to follow along pretty clearly with the language that I want to present here. So it's not ambiguous in any way, but Utah already has one of the strongest, most constitutionally sound impact fee systems in the, in the country. This does not change that framework at all. It simply clarifies that a recent district court ruling found ambiguity in our state regarding whether impact fees must be spent under the impact fee facilities plan that was in place when the fees was collected. The court essentially said the legislature did not clearly limit expenditures to the plan, in effect at the time of collection, impact fees are not taxes. They're constitutionally justified only because they offset the actual impact of the development. If fees can later be spent on new projects not identified when the fee was imposed, the nexus becomes questionable. That's dangerous. That raises due process and ultimately taking concerns. So what the bill does clarifies an impact fees may only be spent on system improvements identified, uh, in the adopted impact fee facilities plan in place when the fees were collected. Number one, number two, requires the service area to be geographically defined using sound planning and engineering principles, and not simply drawn as the entire city. So, as a good policy protects constitution, proportionality strengthens defensible of impact fees. Insurers transparency does not eliminate impact fees in any way. Does not reduce municipality authority in any way, and simply requires clarity of the nexus. So the bottom line, the bill aligns our statute with what the court already require, a clear geographic and proportional connection between the development, paying the fee and the infrastructure funded by the fee. That concludes my presentation. Mr. Chair,

5. Committee chair (presiding)35:57

   Thank you very much for that presentation. We're bringing back to the committee for questions on the bill. Seeing none, uh, seeing no questions.

6. Unknown speaker36:07speaker not certain

   Let me, let me ask you something. Uh, in the fiscal note talks about a $20,000 one-time fee, uh, one time cost in 2026 for revisions to impact fee, um, you know, to impact fee, uh, studies that are done at the municipal level. Can I ask you, um, those by statute are required to be updated on a fairly, uh, on an incremental basis. And I can't remember what that update schedule is on impact fees. Um, but, you know, obviously probably doesn't matter for today, but you may want to look at taking that and saying, Hey, you know, if your plan is to update your impact fee, uh, a study in 2027, there's might not be a need necessarily to do one now and do one in 2027 because there's a statutory requirement on when they have to update those. Do you have a thought on that?

7. Sen. Calvin R. Musselman37:00

   Yeah, two thoughts. One, that's a great suggestion. Two, maybe, and I don't know this, but the amendment may solve that, uh, uh, fiscal note in the first place because we're not going back in time. I don't know that for sure, Mr. Chair. That's a possibility.

8. Unknown speaker37:15speaker not certain

   Okay. So when that lands, let's, I'll see what happens. And if it doesn't, then I'll, I'll do exactly what you're suggesting that that's a fair suggestion. Okay. I just, I, I just know that if there's, uh, you know, trying to minimize local burden.

9. Sen. Calvin R. Musselman37:26

   Sure. Right. Yeah. And so if there's a, if there's a statutory study time period, and I can't remember what those are, instead of looking them up, we'll give you and alleged research a chance to figure that out. But if there's a scheduled thing, maybe what you can do is if they update their study based on this requirement, then maybe they don't need to do the regular statutory one.

10. Unknown speaker37:47speaker not certain

    Was my, was my thought about the issue, so, Yeah. Fair enough. Thank you. Okay. Thank you. Thanks for looking at that. Yeah. Okay.

11. Committee chair (presiding)37:53

    Um, I see. No, oh, I, oh, Senator Fillmore.

12. Sen. Lincoln Fillmore37:57

    There was more move Amendment one. Okay, well, let's do that.

13. Committee chair (presiding)38:01

    Um, all in favor of adopting amendment one, please say aye. Aye. Aye. Any opposed? And I passes unanimously the bill is amended. Okay. That concludes committee questions, I think on the bill. We'll now take it to, uh, the public for public comment.

14. Steven Price, President and Founder, Price Real Estate38:24

    Thank you, Mr. Chair and committee I first became aware of, of how impact fees in Salt Lake City are used in this way. There's a case, the case is called the Sand Lee Hay case. It's working its way through the courts and about $400,000 was collected for improvements in the Northwest quadrant. So the Farr West side of Salt Lake City. And from our perspective, we support impact fees and they should be used for, for road windings and sidewalk, increase the size downstream of, of sanitary sewer. And, um, and, um, you know, um, you know, all those other improvements. Well, these fees were used for roundabout in front of the, um, country club on the far east side of Salt Lake City. So fees are collected on the west side and taken to the east side with no improvement to the west side. Well, I will say access has improved for the country club, so I do appreciate that part. I'm not a golfer, but that is true.

15. Committee chair (presiding)39:23

    So, um, please, uh, they didn't have your name on the record, so make sure please introduce, I'm Sorry, my from Steve?

16. Steven Price, President and Founder, Price Real Estate39:29

    Yes. Steven Price, and I live in Salt Lake City, Utah. Okay. 8 4 1 0 3, right here in the zip code. Yeah, zip uh, social security number. I'm kidding, Steve.

17. Committee chair (presiding)39:38

    Okay. Thank you very much, uh, uh, for putting that, uh, putting that in place.

18. Unknown speaker39:42speaker not certain

    So I thought, and surprisingly, I thought that was something that was already required in the code. Right. So, uh, that's surprising to see that they have fungibility across that, that ability.

19. Committee chair (presiding)39:54

    So, okay. Uh, thank you. Any other public comment? Okay, fine. I'm just kidding. Cities come forward. Call. You wanna make room for, uh, mark or for Justin?

20. Unknown speaker40:08speaker not certain

    Real quick? Mark Junior. I always, you know, mark. Wow. Thanks, Mr. Chair. Well, your predecessor in the LGS office. That's, that's been a few years. Yeah. For the record. Thank you for the reminder. And he Still works with you now.

21. Justin Lee, Deputy Director, Utah League of Cities and Towns40:19

    Um, thank you, Mr. Chair. Justin Lee, deputy director of, um, oh my gosh, I almost said elections because you said that deputy director of the Utah League of Cities and Towns. That would've been my position when Mark was in my old job too. Um, we wanna thank the sponsor for working with us on this build. Uh, some of these changes alleviate our concerns, uh, going forward per, uh, is gonna make a big difference. We were very concerned about this applying retroactively and impacting some of the bonding that cities have done, uh, with these impact fees. Uh, we still have one concern that we're talking about. Um, the sponsor mentioned that the, the service area could not include the entire city. Um, in some cases though, um, particularly with smaller cities, um, or depending what the system looks like, there could be a justification for a service area being the entire city with perhaps with storm water or some of the other water systems. So that's something we've been talking about. Um, we're trying to find a solution to that one to make sure that, so long as that can be justified that the service area is the entire city, that that would be allowed to go forward. Um, but we do appreciate the sponsor working with this. We have a couple more things to, to figure out, but the, the tweaks that are in there, the amendment and, and Mr. Chair, um, your suggestion as well would alleviate some of those concerns around a fiscal note, we believe. Um, so we're continuing to work on this, but, but think it's in a place that it can go forward right now.

22. Committee chair (presiding)41:31

    Okay. Thank you very much. I say we don't wanna leave the builders out.

23. Taz Biesinger, Lobbyist, Utah Home Builders Association41:41

    Oh, Thank you, Mr. Chair. Taaz binger with the Utah Home Builders Association. We, uh, support this bill, uh, like the chair. We, we thought it was fairly clear already in the statute, but obviously not. So we hope you support the bill. Thank you.

24. Committee chair (presiding)41:57

    Thank you. Okay. Uh, we'll conclude public comment. Uh, I'll bring it back to the committee for action on the bill. Senator Fillmore.

25. Sen. Lincoln Fillmore42:05

    Thank you, Mr. Chair. I'd like to move a favorable recommendation, and I'd like to do that twice, because I like the bill so much.

26. Committee chair (presiding)42:13

    Oh, Well, we have a double motion for a to recommend Senate bill 2 45 as amended impact fee amendments. Would you like to sum Senator Mossman?

27. Sen. Calvin R. Musselman42:24

    I, I, I would, I just wanna address some of the concerns that were earlier iterated, and I might have to be a bit pedestrian in the language that I use here. So I, I hope the chair will forgive me, but, um, I used to be a journeyman plumber, as some of you may know. And so I'm, I'm pretty intimately familiar with water systems, storm drain systems and sewer systems. I'm glad you said you were intimately a I'm glad that's what you chose to be aware Of, and I'm glad that you're continuing with the humor. But, um, Uh, As it pertains to systems, I understand that, and I think intuitively we recognize that a supply line in the culinary system supplying the, the, the project could be impacted and maybe the sewer system downstream, or the water system downstream. And as we all intuitively know, but I learned intimately that s**t flows downhill and not uphill. And so I, I asked the cities to consider that in their engineering and planning as we go forward in these plants and ask my son. Well, it does slow downhill, so I appreciate. Yeah. Well, uh, Gail, I apologize. I know those aren't, I know those aren't words that are used in Utah County too frequently, um, but he's a Weber County kid, so, you know, kind of makes sense, doesn't it?

28. Committee chair (presiding)43:46

    All right. The motion before us after that rousing, uh, summation is to pass Senate Bill 2 45 impact fee amendments as, uh, amended. Please. Uh, all in paper, please say aye. Aye. Aye. Aye. Any opposed? The can That passes unanimously. Thank you very much, farmer Musclemen. Okay. Um, we've got a couple of our sponsors did show up, and I let everybody astray.