Utah House OKs HB 13 to Create Infrastructure Financing Districts to Spur Homebuilding

The Utah House of Representatives on Feb. 5 passed first‑substitute House Bill 13, creating a new financing mechanism intended to help build out entitled but unbuilt residential lots across the state.

Representative James A. Dunnigan, the bill sponsor, told colleagues the measure allows developers to use private, tax‑exempt bond financing for infrastructure — roads, sewers and utilities — at lower interest rates than private construction loans. "Instead of paying 10 to 15%, which they could, it's 5 to 7%," Dunnigan said, arguing the cheaper financing would encourage developers to put in infrastructure and unlock housing supply.

The bill creates an assessment area and authorizes a developer, with approval from a percentage of landowners and registered voters, to form a financing district that borrows in the bond market. Developers would be reimbursed for infrastructure performance from bond proceeds and assessments placed on each lot to cover principal and interest. Dunnigan gave a 100‑lot example to illustrate how assessments would fund the loan and dissolve the district once all lots are occupied.

To protect homebuyers, the bill requires the developer to prove the proportional infrastructure assessment for a lot has been paid off before a final inspection and before the buyer takes occupancy, preventing a new homeowner from inheriting unpaid infrastructure liens. "Before the homeowner takes occupancy, the developer has to prove that they have paid off that proportional assessment," Dunnigan said.

Lawmakers pressed the sponsor on the bill's effects on municipal authority and on lien priority. Representative Karianne Lyman asked why the legislature would restrict a municipality's discretion to issue a certificate of occupancy; Dunnigan said municipalities requested the earlier timing so they would not issue a certificate of occupancy if a development lien remained unpaid. Representative Jason Brammer questioned lien priority against construction or other loans; Dunnigan said bond issuers and developers would sort lien priority and that market participants would decline financing if the lien structure was unacceptable.

Supporters framed HB 13 as a market‑friendly tool to expand housing supply. Representative Paul A. Cutler said it could replace or complement public improvement districts and "be a tool that's more friendly and used frequently to help move developments forward and also protect our cities and homeowners in the future." Representative Walter praised the bill as a cleaner financing solution for permitted but unbuilt lots.

Voting closed and first‑substitute HB 13 passed the House 74–0. The bill will be transmitted to the Senate for consideration. The House debate focused on the bill’s financing mechanics, buyer protections and the bill sponsor’s statement that the measure does not alter local land‑use authority or municipal building codes.

Votes at a glance: first‑substitute HB 13 — passed 74 yes, 0 no; sent to the Senate for consideration.