After more than a year of deliberating, the Utah Supreme Court came out Wednesday with a decision on whether the inland port is unconstitutional and illegally siphoning up a portion of Salt Lake City’s revenue.
In short, the answer is no.
The justices determined formation of the port did not violate Utah law and tossed out the city’s financial claims, though they did leave the issue of tax revenue up for additional debate.
The Utah Legislature formed the inland port in 2018, taking advantage of a growing international airport, a Union Pacific rail hub and the relocation of the Utah State Prison — and its supporting infrastructure — all in close proximity. The port area covers around 16,000 acres. It includes portions of West Valley City and Magna, but the vast majority rests in Salt Lake City’s northwest quadrant, occupying about a fifth of the capital’s landmass.
Lawmakers required that the three impacted municipalities allow zoning for the port to operate in their boundaries. They mandated that the cities allow transportation and storage of “natural resources” — which some have interpreted to mean Utah-mined coal — on port land. They also allowed the Utah Port Authority, formed to manage the facility’s development, a portion of the property, sales and use taxes that cities would have collected in the port area.
Salt Lake City sued the Utah Inland Port Authority and the state in 2019. The lawsuit alleged creation of the port violated the Utah Constitution in two ways:
• First, it treated the three impacted municipalities differently than other cities in the state, running afoul, Salt Lake City argued, of the clause governing uniform operation of laws.
• Second, the city asserted the inland port ran counter to the constitution’s “ripper clause,” which bars legislators from directing a city’s money, taxing authority or property to a “special commission, private corporation or association.”
A 3rd District judge threw out the lawsuit January 2020, and Salt Lake City appealed to the state’s high court, which listened to oral arguments for the case in April 2021.
In their 13-page opinion issued Wednesday, all five justices sided with the district court over the constitutionality of the inland port.
While formation of the port “clearly” created disparate treatment for three cities, Salt Lake City’s lawyers failed to make a case as to how zoning requirements for the port “is not rationally related to a legitimate legislative objective,” Associate Chief Justice Thomas Rex Lee wrote. As such, there was no violation of the uniform operation of laws clause.
“Economic studies underlying the [port’s creation] projected that an inland port could create thousands of jobs, develop natural resource extraction industries, and make Utah a bigger player in the global economy,” wrote Lee, who will be retiring from the court Thursday. “These are legitimate objectives.”
As for the ripper clause, the justices determined lawmakers had not delegated land use or zoning powers to the port authority and dismissed the city’s claims.
“Here the Legislature is not ‘entrusting’ [the port authority] with the task or responsibility of enacting certain zoning ordinances,” Lee wrote. “[It] requires that Salt Lake City, West Valley City, and Magna ‘allow’ an inland port.”
Earlier this year, the Utah Legislature negotiated reforms to the inland port with Salt Lake City, which included a restructured board and greater control for the city over property tax revenue generated by the venture.
Under HB443, the city agreed to turn over 65% of its property tax revenue coming from the port, a figure that decreases over time. In exchange, the port authority is required to invest significant portions of that revenue into environmental controls, traffic mitigation and job creation.
As such, the Supreme Court questioned whether the city’s complaints over its tax authority were moot. It directed the parties to submit supplemental briefings explaining whether they believed this is the case.
Read the entire opinion below:
Salt Lake City v. Inland Port Authority by The Salt Lake Tribune on Scribd
This story will be updated.
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