Steve Griffin, Deseret News
Salt Lake City Council Chair Erin Mendenhall is joined by Gov. Gary R. Herbert and other legislative and local elected leaders as she talks about consensus recommendations for the Utah Inland Port from the Gold Room at the Capitol in Salt Lake City on Monday, July 16, 2018.

SALT LAKE CITY — In a joint news conference with Salt Lake City Council members Monday, Gov. Gary Herbert announced a compromise made up of a long list of changes to the controversial Utah Inland Port Authority law and called a special session for Wednesday.

The governor said the special session will also address changes to 10 other bills, including amendments to Utah's sales tax policy to bring the state in-line with the recent federal ruling on online sales tax.

The announcement comes days after the governor, legislative leaders and members of the Salt Lake City Council spent more than two hours in a closed-door meeting negotiating changes to SB234, the law to govern creation of Utah inland port — which state leaders say is expected to be Utah's largest economic development project in the state's history.

Last Thursday's meeting capped off weeks of behind-the-scenes negotiations.

"This set of recommendations I think will bring us together in what I consider a win-win, mutually beneficial approach on this very significantly important issue," Herbert said, thanking the City Council and state leaders for working together with "a willing attitude of 'let's solve the problem.'"

'We want the mayor'

Meanwhile, Salt Lake City Mayor Jackie Biskupski hasn't played ball.

Monday, while her staff was still combing through the proposed compromise bill, her office issued a statement saying "this remains a questionable bill."

"The mayor's office and administration are currently reviewing the actual draft legislation sent to our office — not just the talking points — to try and understand the full implications for the city," the statement said. "The mayor is reaching out to community leaders to hear their concerns and questions as well.

"The mayor and community's No. 1 question remains: Why are we rushing through legislation which has vast implications, without robust and formal public input?" the statement added.

The proposed changes did not include giving the mayor an appointment on the port authority board.

Biskupski last week refused to endorse the City Council's negotiation with the state, citing concerns with public transparency and how community members have been left out of the closed-door negotiations.

Earlier this spring, the mayor was also participating in private negotiations with the governor for a special session, but those negotiations broke down.

Monday, after spending the last several weeks in their own negotiations with Herbert, Salt Lake City Council leaders endorsed a list of changes to SB234 as a compromise.

"We've turned over a new leaf," City Council Chairwoman Erin Mendenhall said, adding that she looks forward to Wednesday's special session.

"It's critical for our residents that their leaders are here and negotiating our concerns," Mendenhall said. "We know that we can't effectively represent our city residents concerns if we aren't at that table — if we're on the outside looking in."

Herbert indicated Monday he would have liked to have Biskupski participate in the negotiations with the council, noting that she declined several invitations from both his office and the council.

Mendenhall said she hadn't heard from Biskupski about whether she'd be supportive.

But would city and state leaders even need the mayor at this point?

"It's not a matter of do we need the mayor, it's we want the mayor," Herbert said. "We want to have all of us around the table as we work through this process."

During Monday's news conference, critics of the Utah Inland Port Authority's process continued to criticize the transparency around the port authority.

"We're still not happy," said Deeda Seed, a campaigner with the environmental group Center for Biological Diversity, which has been helping spearhead community pushback on the port. "There's a complete lack of public process … We have not even seen a bill and they're going to be voting on it in two days. And that is unacceptable."

Hughes, however, argued against lack of transparency around the bill.

"To say it was rushed, I think there was an incredibly — a deliberate and, I think, measurable effort by I think all parties to work as much as we could together," he said. The speaker said the public will have an opportunity to speak to the bill at a public hearing on Wednesday.

Proposed compromise

In the 2018 session, city leaders protested SB234, largely pushed by House Speaker Greg Hughes, as a bill that would give the 11-member Utah Inland Port Authority board power to usurp ultimate city land use decisions and capture too much of the project area's tax increment, which is projected to equate hundreds of millions.

To city leaders' dismay, a surprise version of SB234 sailed through both the House and Senate on the second-to-last day of the session, expanding the authority's boundaries to more than 20,000 acres and giving the board power to capture 100 percent of the project's tax increment.

While Mendenhall said there are still some minor lingering concerns about the bill that may need to be addressed in the future, "the bulk of our concerns (about) boundary, land use, tax increment and the board makeup have largely been addressed."

"For the most part, I think we've assuaged the city's concerns a great deal," Mendenhall said.

With or without Biskupski, Utah Legislature will be considering amendments to SB234 during Wednesday's special session, called for 2:30 p.m.

The governor's office staff distributed a three-page document highlighting the proposed changes.

Some highlights include, among others:

• Modifications to shrink the port authority's boundaries, excluding wetlands, already developed areas in the south-east, and farmland in the northeast corner near the airport.

• Clarification of the port authority's land use appeal process as a "last resort," specifying appeals would be first considered by the city.

• Increase of transparency, including public notices and processes specific to appeals.

• Assurance that municipalities that provide services will be allocated tax increment.

• A 2 percent cap on property tax increment to be used for port authority operating expenses.

• Provisions to respect existing land use and other agreements between property owners and applicable government authorities.

• A 10 percent set-aside of tax increment for affordable housing.

• Environmental provisions, including sustainability policies to meet or exceed state and federal standards, monitoring and emissions reporting, and strategies that utilize the best available technology to mitigate impact.

• Changes to board member limitations, regarding conflict of interest rules.

Conflict of interest changes

The proposed changes to SB234's conflict of interest rules come after House Speaker Greg Hughes — raising concerns about "ambiguity" in the law's language before it came to light he had property that disqualified him from the board — removed himself from his self-appointed position and chose a different appointee.

At the time, Herbert's deputy chief of staff Paul Edwards said changing the conflict of interest language would be "inappropriate" and would jeopardize public trust, but Monday the governor said it became clear to him that changes need to be made, particularly with regards to Salt Lake City's City Council board seat.

Councilman James Rogers, the city council's representative on the board, owns office rental space in SB234's five-mile restricted area, also disqualifying him from the board. Council members lobbied to change the rule as it related to the council's seat, arguing it could put Rogers and other future elected council members at a disadvantage.

"So that needs to be fixed," the governor said. "There probably needs to be an exclusion for the City Council."

Proposed changes include specifying Salt Lake City's City Council seat would include the council member whose district includes the Salt Lake International Airport, and would "exempt statutorily required board members from conflict issues beyond their control, but still requires transparency and public disclosure of circumstances that would have otherwise precluded them from serving," according to the governor's office's talking points.

The proposed changes to conflict of interest provisions also include clarification for inland port authority employees or board members to mean they'd be restricted from serving if they're associated with a "private" entity that could receive personal financial benefit.

Asked if there may be any other changes to SB234's conflict of interest rules, specifically with regard to Hughes, Herbert said, "I don't think we'll be making any other adjustments, at least at this time."

"That may be down the road," Herbert added. "I personally think the five-mile radius may be a bit too large."

Hughes, who has properties within that five-mile radius, also argued the restrictive area was too large. An earlier version of SB234 included a smaller, two-mile radius.

"That's something that will be debated in the legislature," Herbert said.

Other special session issues

Along with changes to SB234, Herbert called Wednesday's special session to address 10 other issues. Of those, the most significant is changes to the Utah Sales and Use Tax Act to address the recent U.S. Supreme Court ruling on online sales taxes.

The court's ruling overturned decades-old decisions that said companies that didn't have a physical presence in a state didn't have to collect sales taxes from customers there.

"We want to make sure that the results of our changes that result from the federal reform are given enough time," Senate President Wayne Niederhauser, R-Sandy, said. "We don't want our taxpayers being caught off guard. They need time. (There are) six months now in this tax year that remains."

Niederhauser said "we're going to address a couple of issues" to bring Utah in line with the Supreme Court's ruling.

Other items included in the governor's call are:

• Amendments and clarifications to several corporate tax provisions.

• Amendments to class B and C road funds.

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• Legislation to clarify formula for calculating periodic inflationary adjustments to the limits on damages for personal injury claims against governmental entities.

• Reenactment of changes made in HB303, a bill regarding drinking water source and storage requirements, to correct a mistake.

• Amendments to the procurement code to clarify its application to the Utah Communications Authority.

• Amendments creating a conditional license for off-premise beer retailers.

• For the Senate to consent to appointments made by the governor.