(c) select and use an official district seal;

(d) subject to Subsections (3) and (4), employ employees and agents, or delegate to district officers power to employ employees and agents, for the operation of the special district and the special district's properties and prescribe or delegate to district officers the power to prescribe the duties, compensation, and terms and conditions of employment of those employees and agents;

(e) require crime insurance for district officers and employees charged with the handling of district funds in an amount set by the board;

(f) contract for or employ professionals to perform work or services for the special district that cannot satisfactorily be performed by the officers or employees of the district;

(g) through counsel, prosecute on behalf of or defend the special district in all court actions or other proceedings in which the district is a party or is otherwise involved;

(h) adopt bylaws for the orderly functioning of the board;

(i) adopt and enforce rules and regulations for the orderly operation of the special district or for carrying out the district's purposes;

(j) prescribe a system of civil service for district employees;

(k) on behalf of the special district, enter into contracts that the board considers to be for the benefit of the district;

(l) acquire, construct or cause to be constructed, operate, occupy, control, and use - 3 - S.B.

197 Enrolled Copy buildings, works, or other facilities for carrying out the purposes of the special district;

(m) on behalf of the special district, acquire, use, hold, manage, occupy, and possess property necessary to carry out the purposes of the district, dispose of property when the board considers it appropriate, and institute and maintain in the name of the district any action or proceeding to enforce, maintain, protect, or preserve rights or privileges associated with district property;

(n) delegate to a district officer the exercise of a district duty;

and (o) exercise all powers and perform all functions in the operation of the special district and the special district's properties as are ordinarily exercised by the governing body of a political subdivision of the state and as are necessary to accomplish the purposes of the district.

(3)(a) As used in this Subsection (3), "interim vacancy period" means:

(i) if any member of the special district board is elected, the period of time that:

(A) begins on the day on which an election is held to elect a special district board member;

and (B) ends on the day on which the special district board member-elect begins the member's term;

or (ii) if any member of the special district board is appointed, the period of time that:

(A) begins on the day on which an appointing authority posts a notice of vacancy in accordance with Section 17B-1-304;

and (B) ends on the day on which the individual who is appointed by the special district board to fill the vacancy begins the individual's term.

(b)(i) The special district may not hire during an interim vacancy period a manager, a chief executive officer, a chief administrative officer, an executive director, or a similar position to perform executive and administrative duties or functions.

(ii) Notwithstanding Subsection (3)(b)(i):

(A) the special district may hire an interim manager, a chief executive officer, a chief administrative officer, an executive director, or a similar position during an interim vacancy period;

and (B) the interim manager's, chief executive officer's, chief administrative officer's, or similar position's employment shall terminate once a new manager, chief executive officer, chief administrative officer, or similar position is hired by the new special district board after the interim vacancy period has ended.

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197 (c) Subsection (3)(b) does not apply if:

(i) all the elected special district board members who held office on the day of the election for the special district board members, whose term of office was vacant for the election are re-elected to the special district board;

and (ii) all the appointed special district board members who were appointed whose term of appointment was expiring are re-appointed to the special district board.

(4) A special district board that hires an interim manager, a chief executive officer, a chief administrative officer, an executive director, or a similar position in accordance with this section may not enter into an employment contract that contains an automatic renewal provision with the interim manager, chief executive officer, chief administrative officer, executive director, or similar position.

Section 2.

Section 17B-1-311 is amended to read:

17B-1-311 (Effective 05/06/26).

Board member prohibited from district employment -- Exception.

(1) No elected or appointed member of the board of trustees of a special district may, while serving on the board, be employed by the district, whether as an employee or under a contract.

(2) No person employed by a special district, whether as an employee or under a contract, may serve on the board of that special district.

(3) A special district is not in violation of a prohibition described in Subsection (1) or (2) if the special district:

(a) treats a member of a board of trustees as an employee for income tax purposes;

and (b) complies with the compensation limits of Section 17B-1-307 for purposes of that member.

(4) This section does not apply to a special district if:

(a) fewer than 3,000 people in the state live within 40 miles of the special district's boundaries or primary place of employment, measured over all weather public roads;

and (b) with respect to the employment of a board of trustees member under Subsection (1):

(i) the job opening has had reasonable public notice;

and (ii) the person employed is the best qualified candidate for the position.

(5) This section does not apply to a [board of trustees] transit commission of a large public transit district as described in Chapter 2a, Part 8, Public Transit District Act.

Section 3.

Section 17B-1-702 is amended to read:

- 5 - S.B.

197 Enrolled Copy 17B-1-702 (Effective 05/06/26).

Special districts to submit budgets.

(1)(a) [Except as provided in Subsection (1)(b), within] Within 30 days after it is approved by the board, and at least 30 days before the board adopts a final budget, the board of each special district with an annual budget of $50,000 or more shall send a copy of its tentative budget and notice of the time and place for its budget hearing to:

(i) each of its constituent entities that has in writing requested a copy;

and (ii) to each of its customer agencies that has in writing requested a copy.

[(b) Within 30 days after it is approved by the board, and at least 30 days before the board adopts a final budget, the board of trustees of a large public transit district as defined in Section 17B-2a-802 shall send a copy of its tentative budget and notice of the time and place for its budget hearing to:] [(i) each of its constituent entities;] [(ii) each of its customer agencies that has in writing requested a copy;] [(iii) the governor;

and] [(iv) the Legislature.] [(c)] (b) The special district shall include with the tentative budget a signature sheet that includes:

(i) language that the constituent entity or customer agency received the tentative budget and has no objection to it;

and (ii) a place for the chairperson or other designee of the constituent entity or customer agency to sign.

(2) Each constituent entity and each customer agency that receives the tentative budget shall review the tentative budget submitted by the district and either:

(a) sign the signature sheet and return it to the district;

or (b) attend the budget hearing or other meeting scheduled by the district to discuss the objections to the proposed budget.

(3)(a) If any constituent entity or customer agency that received the tentative budget has not returned the signature sheet to the special district within 15 calendar days after the tentative budget was mailed, the special district shall send a written notice of the budget hearing to each constituent entity or customer agency that did not return a signature sheet and invite them to attend that hearing.

(b) If requested to do so by any constituent entity or customer agency, the special district shall schedule a meeting to discuss the budget with the constituent entities and - 6 - Enrolled Copy S.B.

197 customer agencies.

(c) At the budget hearing, the special district board shall:

(i) explain its budget and answer any questions about it;

(ii) specifically address any questions or objections raised by the constituent entity, customer agency, or those attending the meeting;

and (iii) seek to resolve the objections.

(4) Nothing in this part prevents a special district board from approving or implementing a budget over any or all constituent entity's or customer agency's protests, objections, or failure to respond.

Section 4.

Section 17B-2a-802 is amended to read:

17B-2a-802 (Effective 05/06/26).

Definitions.

As used in this part:

(1) "Affordable housing" means housing occupied or reserved for occupancy by households that meet certain gross household income requirements based on the area median income for households of the same size.

(a) "Affordable housing" may include housing occupied or reserved for occupancy by households that meet specific area median income targets or ranges of area median income targets.

(b) "Affordable housing" does not include housing occupied or reserved for occupancy by households with gross household incomes that are more than 60% of the area median income for households of the same size.

(2) "Appointing entity" means the person, county, unincorporated area of a county, or municipality appointing a member to a public transit district board of trustees or transit commission.

(3)(a) "Chief executive officer" means a person appointed by the board of trustees of a small public transit district to serve as chief executive officer.

(b) "Chief executive officer" shall enjoy all the rights, duties, and responsibilities defined in Sections 17B-2a-810 and 17B-2a-811 and includes all rights, duties, and responsibilities assigned to the general manager but prescribed by the board of trustees to be fulfilled by the chief executive officer.

(4) "Confidential employee" means a person who, in the regular course of the person's duties:

(a) assists in and acts in a confidential capacity in relation to other persons who formulate, determine, and effectuate management policies regarding labor relations;

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197 Enrolled Copy or (b) has authorized access to information relating to effectuating or reviewing the employer's collective bargaining policies.

(5) "Council of governments" means a decision-making body in each county composed of membership including the county governing body and the mayors of each municipality in the county.

(6) "Department" means the Department of Transportation created in Section 72-1-201.

(7) "Executive director" means a person appointed by [the board of trustees of a large public transit district to serve as executive director] the governor as described in Section 17B-2a-811.1 to serve as executive director of a large public transit district.

(8) "Fixed guideway" means the same as that term is defined in Section 59-12-102.

(9) "Fixed guideway capital development" means the same as that term is defined in Section 72-1-102.

(10)(a) "General manager" means a person appointed by the board of trustees of a small public transit district to serve as general manager.

(b) "General manager" shall enjoy all the rights, duties, and responsibilities defined in Sections 17B-2a-810 and 17B-2a-811 prescribed by the board of trustees of a small public transit district.

(11) "Large public transit district" means a public transit district that provides public transit to an area that includes:

(a) more than 65% of the population of the state based on:

(i) the estimate of the Utah Population Committee created in Section 63C-20-103;

or (ii) if the Utah Population Committee estimate is not available for each county, municipality, and unincorporated area that comprise the district, the most recent official census or census estimate of the United States Bureau of the Census;

and (b) two or more counties.

[(12) "Local advisory council" means the local advisory council created in accordance with Section 17B-2a-808.2.] [(13)] (12)(a) "Locally elected public official" means a person who holds an elected position with a county or municipality.

(b) "Locally elected public official" does not include a person who holds an elected position if the elected position is not with a county or municipality.

[(14)] (13) "Managerial employee" means a person who is:

(a) engaged in executive and management functions;

and - 8 - Enrolled Copy S.B.

197 (b) charged with the responsibility of directing, overseeing, or implementing the effectuation of management policies and practices.

[(15)] (14) "Metropolitan planning organization" means the same as that term is defined in Section 72-1-208.5.

[(16)] (15) "Multicounty district" means a public transit district located in more than one county.

[(17)] (16) "Operator" means a public entity or other person engaged in the transportation of passengers for hire.

[(18)] (17)(a) "Public transit" means regular, continuing, shared-ride, surface transportation services that are open to the general public or open to a segment of the general public defined by age, disability, or low income.

(b) "Public transit" does not include transportation services provided by:

(i) chartered bus;

(ii) sightseeing bus;

(iii) taxi;

(iv) school bus service;

(v) courtesy shuttle service for patrons of one or more specific establishments;

or (vi) intra-terminal or intra-facility shuttle services.

[(19)] (18) "Public transit district" means a special district that provides public transit services.

[(20)] (19) "Public transit innovation grant" means[ ] the same as that term is defined in Section 72-2-401.

[(21)] (20) "Small public transit district" means any public transit district that is not a large public transit district.

[(22)] (21) "Station area plan" means a plan developed and adopted by a municipality in accordance with Section 10-21-203.

[(23)] (22)(a) "Supervisor" means a person who has authority, in the interest of the employer, to:

(i) hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees;

or (ii) adjust another employee's grievance or recommend action to adjust another employee's grievance.

(b) "Supervisor" does not include a person whose exercise of the authority described in Subsection [(23)(a)] (22)(a):

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197 Enrolled Copy (i) is of a merely routine or clerical nature;

and (ii) does not require the person to use independent judgment.

[(24)] (23) "Transit facility" means a transit vehicle, transit station, depot, passenger loading or unloading zone, parking lot, or other facility:

(a) leased by or operated by or on behalf of a public transit district;

and (b) related to the public transit services provided by the district, including:

(i) railway or other right-of-way;

(ii) railway line;

and (iii) a reasonable area immediately adjacent to a designated stop on a route traveled by a transit vehicle.

[(25)] (24) "Transit vehicle" means a passenger bus, coach, railcar, van, or other vehicle operated as public transportation by a public transit district.

[(26)] (25) "Transit-oriented development" means a mixed use residential or commercial area that is designed to maximize access to public transit and includes the development of land owned by a large public transit district.

[(27)] (26) "Transit-supportive development" means a mixed use residential or commercial area that is designed to maximize access to public transit and does not include the development of land owned by a large public transit district.

Section 5.

Section 17B-2a-804 is amended to read:

17B-2a-804 (Effective 05/06/26).

Additional public transit district powers.

(1) In addition to the powers conferred on a public transit district under Section 17B-1-103, a public transit district may:

(a) provide a public transit system for the transportation of passengers and their incidental baggage;

(b) notwithstanding Subsection 17B-1-103(2)(g) and subject to Section 17B-2a-817, levy and collect property taxes only for the purpose of paying:

(i) principal and interest of bonded indebtedness of the public transit district;

or (ii) a final judgment against the public transit district if:

(A) the amount of the judgment exceeds the amount of any collectable insurance or indemnity policy;

and (B) the district is required by a final court order to levy a tax to pay the judgment;

(c) insure against:

(i) loss of revenues from damage to or destruction of some or all of a public transit system from any cause;

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197 (ii) public liability;

(iii) property damage;

or (iv) any other type of event, act, or omission;

(d) subject to Section 72-1-203 pertaining to fixed guideway capital development within a large public transit district, acquire, contract for, lease, construct, own, operate, control, or use:

(i) a right-of-way, rail line, monorail, bus line, station, platform, switchyard, terminal, parking lot, or any other facility necessary or convenient for public transit service;

or (ii) any structure necessary for access by persons and vehicles;

(e)(i) hire, lease, or contract for the supplying or management of a facility, operation, equipment, service, employee, or management staff of an operator;

and (ii) provide for a sublease or subcontract by the operator upon terms that are in the public interest;

(f) operate feeder bus lines and other feeder or ridesharing services as necessary;

(g) accept a grant, contribution, or loan, directly through the sale of securities or equipment trust certificates or otherwise, from the United States, or from a department, instrumentality, or agency of the United States;

(h) study and plan transit facilities in accordance with any legislation passed by Congress;

(i) cooperate with and enter into an agreement with the state or an agency of the state or otherwise contract to finance to establish transit facilities and equipment or to study or plan transit facilities;

(j) subject to Subsection [17B-2a-808.1(4)] 17B-2a-811.1(8), issue bonds as provided in and subject to Chapter 1, Part 11, Special District Bonds, to carry out the purposes of the district;

(k) from bond proceeds or any other available funds, reimburse the state or an agency of the state for an advance or contribution from the state or state agency;

(l) do anything necessary to avail itself of any aid, assistance, or cooperation available under federal law, including complying with labor standards and making arrangements for employees required by the United States or a department, instrumentality, or agency of the United States;

(m) sell or lease property;

(n) except as provided in Subsection (2)(b), [ ]assist in or operate transit-oriented or - 11 - S.B.

197 Enrolled Copy transit-supportive developments;

(o) subject to Subsections (2) and (3), establish, finance, participate as a limited partner or member in a development with limited liabilities in accordance with Subsection (1)(p), construct, improve, maintain, or operate transit facilities, equipment, and, in accordance with Subsection (3), [ ]transit-oriented developments or transit-supportive developments;

and (p) subject to the [ ]restrictions and requirements in Subsections [ ](2) and (3), assist in a transit-oriented development or a transit-supportive development in connection with project area development [ ]as defined in Section 17C-1-102 by:

(i) investing in a project as a limited partner or a member, with limited liabilities;

or (ii) subordinating an ownership interest in real property owned by the public transit district.

(2)(a) A public transit district may only assist in the development of areas under Subsection (1)(p) that have been approved by the board of trustees or transit commission, and in the manners described in Subsection (1)(p).

(b) A public transit district may not invest in a transit-oriented development or transit-supportive development as a limited partner or other limited liability entity under the provisions of Subsection (1)(p)(i), unless the partners, developer, or other investor in the entity, makes an equity contribution equal to no less than 25% of the appraised value of the property to be contributed by the public transit district.

(c)(i) For transit-oriented development projects, a public transit district shall adopt transit-oriented development policies and guidelines that include provisions on affordable housing.

(ii) For transit-supportive development projects, a public transit district shall work with the metropolitan planning organization and city and county governments where the project is located to collaboratively seek to create joint plans for the areas within one-half mile of transit stations, including plans for affordable housing.

(d) A current board member of a public transit district or a transit commissioner to which the board member or transit commissioner is appointed may not have any interest in the transactions engaged in by the public transit district in accordance with Subsection (1)(p)(i) or (ii), except as may be required by the board member's or transit commissioner's fiduciary duty as a board member or transit commissioner.

(3) For any transit-oriented development or transit-supportive development authorized in - 12 - Enrolled Copy S.B.

197 this section, the public transit district shall:

(a) perform a cost-benefit analysis of the monetary investment and expenditures of the development, including effect on:

(i) service and ridership;

(ii) regional plans made by the metropolitan planning agency;

(iii) the local economy;

(iv) the environment and air quality;

(v) affordable housing;

and (vi) integration with other modes of transportation;

(b) provide evidence to the public of a quantifiable positive return on investment, including improvements to public transit service;

and (c) coordinate with the Department of Transportation in accordance with Section 72-1-203 pertaining to fixed guideway capital development and associated parking facilities within a station area plan for a transit oriented development within a large public transit district.

(4) For any fixed guideway capital development project with oversight by the Department of Transportation as described in Section 72-1-203, a large public transit district shall coordinate with the Department of Transportation in all aspects of the project, including planning, project development, outreach, programming, environmental studies and impact statements, impacts on public transit operations, and construction.

(5) A public transit district may participate in a transit-oriented development only if:

(a) for a transit-oriented development involving a municipality:

(i) the relevant municipality has developed and adopted a station area plan;

and (ii) the municipality is in compliance with Sections 10-21-201 and 10-21-202 regarding the inclusion of moderate income housing in the general plan and the required reporting requirements;

or (b) for a transit-oriented development involving property in an unincorporated area of a county, the county is in compliance with Sections 17-79-403 and 17-80-202 regarding inclusion of moderate income housing in the general plan and required reporting requirements.

(6) A public transit district may be funded from any combination of federal, state, local, or private funds.

(7) A public transit district may not acquire property by eminent domain.

Section 6.

Section 17B-2a-807.3 is enacted to read:

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197 Enrolled Copy 17B-2a-807.3 (Effective 05/06/26).

Transit commission of a large public transit district -- Appointment -- Quorum -- Compensation -- Terms.

(1)(a) A large public transit district shall have a transit commission.

(b) For a large public transit district created as provided in this part on or before January 1, 2026, the structure and membership of the board of trustees may remain and serve as constituted as of January 1, 2026, until June 30, 2026.

(c) Beginning on July 1, 2026, a large public transit district shall be governed by a transit commission as provided in this section.

(d) A large public transit district shall provide severance pay and benefits through December 31, 2026, to each member of the board of trustees in place on June 30, 2026.

(2)(a) A large public transit district shall be governed by a transit commission consisting of members appointed as follows:

(i) two members appointed by the speaker of the House of Representatives, in consultation with public transit stakeholders from within the public transit district;

(ii) two members appointed by the president of the Senate, in consultation with public transit stakeholders from within the public transit district;

and (iii) three members appointed by the governor from nominations described in Subsection (2)(b).

(b)(i)(A) The councils of governments of Davis County and Weber County shall each nominate to the governor one or more candidates for transit commissioner.

(B) The Box Elder County legislative body and the chief executives of each municipality within the boundary of the large public transit district in Box Elder County, may jointly nominate one or more candidates for transit commissioner.

(C) The governor shall appoint, with advice and consent of the Senate, one candidate nominated as described in Subsection (2)(b)(i)(A) or (2)(b)(i)(B).

(ii)(A) The council of governments of Utah County shall nominate to the governor one or more candidates for transit commissioner.

(B) The Tooele County legislative body and the chief executives of each municipality within the boundary of the large public transit district in Tooele County, may jointly nominate one or more candidates for transit commissioner.

(C) The governor shall appoint, with advice and consent of the Senate, one candidate nominated as described in Subsection (2)(b)(ii)(A) or (2)(b)(ii)(B).

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197 (iii)(A) The council of governments of Salt Lake County shall nominate to the governor one or more candidates for transit commissioner.

(B) The governor shall appoint, with advice and consent of the Senate, one candidate nominated as described in Subsection (2)(b)(iii)(A).

(iv) The nominations described in Subsections (2)(b)(i) through (iii) shall be made to the governor:

(A) for the initial terms beginning on July 1, 2026, on or before May 1, 2026;

and (B) for nominations after the initial nominations described in Subsection (2)(b)(iv)(A), within 30 days after the day on which notice is given by the executive director to the nominating entity of an upcoming vacancy on the transit commission.

(v)(A) If a nominating body described in this Subsection (2)(b) fails to nominate an individual on or before the deadlines described in Subsection (2)(b)(iv), the governor may, with advice and consent of the Senate, appoint the transit commissioner.

(B) If the governor does not wish to appoint one or more candidates nominated as described in this Subsection (2)(b), the governor may request additional nominations.

(c) Beginning on July 1, 2026, and until June 30, 2027, the executive director of the department shall serve as a nonvoting, ex officio member of the transit commission.

(3)(a) Except as provided in Subsections (3)(b) and (3)(c), each transit commissioner of a large public transit district shall serve for a term of four years.

(b) Each transit commissioner serves at the pleasure of the individual in the office that appointed the transit commissioner.

(c)(i) A transit commissioner may serve an unlimited number of terms.

(ii) For members of the transit commission whose appointments begin on July 1, 2026, the transit commissioners shall serve an initial term as follows:

(A) the speaker of the House of Representatives shall designate one appointee as serving an initial term for three years, and one appointee as serving an initial term of four years;

(B) the president of the Senate shall designate one appointee as serving an initial term for three years, and one appointee as serving an initial term of four years;

and (C) the governor shall designate two appointees as serving an initial term for two - 15 - S.B.

197 Enrolled Copy years, and one appointee as serving an initial term of five years.

(d) Each transit commissioner:

(i) serves and represents the whole of the large public transit district;

and (ii) does not represent a specific geographic portion of the large public transit district.

(4)(a) If a vacancy occurs, the nomination and appointment procedures to replace the individual shall occur in the same manner described in Subsection (2) as for the transit commissioner creating the vacancy.

(b) If a vacancy occurs on the transit commission of a large public transit district and the vacated seat is a transit commissioner nominated as described in Subsection (2)(b), the nominating body described in Subsection (2)(b) relevant for the vacancy shall nominate individuals for appointment by the governor as described in this section within 60 days after the date on which the vacancy occurs.

(c) If the respective nominating body described in Subsection (2)(b) does not nominate to fill the vacancy within 60 days, the governor shall, with the advice and consent of the Senate, appoint an individual to fill the vacancy.

(d) A replacement transit commissioner shall serve for the remainder of the unexpired term, but may serve an unlimited number of terms as provided in Subsection (3)(c)(i).

(5)(a) The nominating and appointing individuals described in this section shall ensure that each individual nominated or appointed to the transit commission of a large public transit district has extensive experience in one or more of the following areas:

(i) public transit and mobility;

(ii) public finance and budgeting;

(iii) community development and engagement;

(iv) law, public policy, or public administration;

or (v) business management.

(b) An individual who holds an elected office is ineligible for nomination, appointment, or service on the transit commission.

(6) A member may not receive compensation or benefits for the member's service, but may receive per diem and local travel expenses in accordance with:

(a) Section 63A-3-106;

(b) Section 63A-3-107;

and (c) rules made by the Division of Finance in accordance with Sections 63A-3-106 and 63A-3-107.

(7) Any four members of the transit commission constitute a quorum.

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197 (8)(a) The governor shall designate one transit commissioner as chair.

(b) The transit commission may select one member as vice chair to act in the chair's absence.

(9) Each transit commissioner shall qualify by taking the constitutional oath of office.

(10) Each transit commissioner is subject to the conflict of interest provisions described in Title 63G, Chapter 24, Part 3, Conflicts of Interest.

(11) For the purposes of Section 63J-1-504, the transit commission is not considered an agency.

Section 7.

Section 17B-2a-808 is amended to read:

17B-2a-808 (Effective 05/06/26).

Small public transit district board of trustees powers and duties -- Adoption of ordinances, resolutions, or orders -- Effective date of ordinances.

(1) The powers and duties of a board of trustees of a small public transit district stated in this section are in addition to the powers and duties stated in Section 17B-1-301.

(2) The board of trustees of each small public transit district shall:

(a) appoint and fix the salary of a general manager, a chief executive officer, or both, as provided in Section 17B-2a-811;

(b) determine the transit facilities that the district should acquire or construct;

(c) supervise and regulate each transit facility that the district owns and operates, including:

(i) fixing rates, fares, rentals, and charges and any classifications of rates, fares, rentals, and charges;

and (ii) making and enforcing rules, regulations, contracts, practices, and schedules for or in connection with a transit facility that the district owns or controls;

(d) control the investment of all funds assigned to the district for investment, including funds:

(i) held as part of a district's retirement system;

and (ii) invested in accordance with the participating employees' designation or direction pursuant to an employee deferred compensation plan established and operated in compliance with Section 457 of the Internal Revenue Code;

(e) invest all funds according to the procedures and requirements of Title 51, Chapter 7, State Money Management Act;

(f) if a custodian is appointed under Subsection (3)(d), pay the fees for the custodian's services from the interest earnings of the investment fund for which the custodian is - 17 - S.B.

197 Enrolled Copy appointed;

(g)(i) cause an annual audit of all district books and accounts to be made by an independent certified public accountant;

(ii) as soon as practicable after the close of each fiscal year, submit to the chief administrative officer and legislative body of each county and municipality with territory within the district a financial report showing:

(A) the result of district operations during the preceding fiscal year;

and (B) the district's financial status on the final day of the fiscal year;

and (iii) supply copies of the report under Subsection (2)(g)(ii) to the general public upon request in a quantity that the board considers appropriate;

(h) report at least annually to the Transportation Commission created in Section 72-1-301 the district's short-term and strategic long-range [public ]transit plans, including the transit portions of applicable regional transportation plans adopted by a metropolitan planning organization established under 23 U.S.C.

Sec.

134;

(i) direct the internal auditor appointed under Section 17B-2a-810 to conduct audits that the board of trustees determines to be the most critical to the success of the organization;[ and] (j) hear audit reports for audits conducted in accordance with Subsection (2)(i)[.] ;

and (k) provide to the Transportation and Infrastructure Appropriations Subcommittee an annual financial report in conformity with generally accepted accounting principles.

(3) A board of trustees of a public transit district may:

(a) subject to Subsection (5), make and pass ordinances, resolutions, and orders that are:

(i) not repugnant to the United States Constitution, the Utah Constitution, or the provisions of this part;

and (ii) necessary for:

(A) the government and management of the affairs of the district;

(B) the execution of district powers;

and (C) carrying into effect the provisions of this part;

(b) provide by resolution, under terms and conditions the board considers fit, for the payment of demands against the district without prior specific approval by the board, if the payment is:

(i) for a purpose for which the expenditure has been previously approved by the board;

(ii) in an amount no greater than the amount authorized;

and - 18 - Enrolled Copy S.B.

197 (iii) approved by the general manager or other officer or deputy as the board prescribes;

(c)(i) hold public hearings and subpoena witnesses;

and (ii) appoint district officers to conduct a hearing and require the officers to make findings and conclusions and report them to the board;

and (d) appoint a custodian for the funds and securities under its control, subject to Subsection (2)(f).

(4) A member of the board of trustees of a public transit district or a hearing officer designated by the board may administer oaths and affirmations in a district investigation or proceeding.

(5)(a) The vote of the board of trustees on each ordinance shall be by roll call vote with each affirmative and negative vote recorded.

(b)(i) Subject to Subsection (5)(b)(ii), the board of trustees may adopt a resolution or order by voice vote.

(ii) The vote of the board of trustees on a resolution or order shall be by roll call vote if a member of the board so demands.

(c)(i) Except as provided in Subsection (5)(c)(ii), the board of trustees of a public transit district may not adopt an ordinance unless it is:

(A) introduced at least a day before the board of trustees adopts it;

or (B) mailed by registered mail, postage prepaid, to each member of the board of trustees at least five days before the day upon which the ordinance is presented for adoption.

(ii) Subsection (5)(c)(i) does not apply if the ordinance is adopted by a unanimous vote of all board members present at a meeting at which at least 3/4 of all board members are present.

(d) Each ordinance adopted by a public transit district's board of trustees shall take effect upon adoption, unless the ordinance provides otherwise.

Section 8.

Section 17B-2a-808.1 is repealed and reenacted to read:

17B-2a-808.1 (Effective 05/06/26).

Large public transit district transit commission powers and duties -- Adoption of ordinances, resolutions, or orders -- Effective date of ordinances.

(1) The powers and duties of the transit commission of a large public transit district stated in this section replace any powers and duties stated in Section 17B-1-301.

(2)(a) The transit commission of each large public transit district shall, at least monthly, - 19 - S.B.

197 Enrolled Copy hold public meetings and receive public comment.

(b) The transit commission may conduct public meetings described in Subsection (2)(a) at various locations throughout the public transit district.

(3) The transit commission shall perform the following duties, which shall occur in a public meeting described in Subsection (2):

(a) approve an annual budget, which shall emphasize fiscal responsibility, increasing ridership, and maintaining a state of good repair;

(b) approve any interlocal agreement with a local jurisdiction;

(c) approve a strategic long-range transit plan for development and operations proposed by the executive director in accordance with Subsection 17B-2a-811.1(5)(b);

(d) vote on adoption of transit commission ordinances and bylaws;

and (e) review and recommend a proposal from the executive director for the issuance of a bond.

(4) The transit commission shall:

(a) in consultation with local stakeholders, work to establish and enhance transit infrastructure to provide cohesive and efficient public transit services throughout the service area of the large public transit district;

(b) cause an annual audit of all public transit district books and accounts to be made by an independent certified public accountant;

(c)(i) as soon as practicable after the close of each fiscal year, submit to each county, municipality, council of governments, and metropolitan planning organization within the public transit district, and make available upon request, a financial report showing:

(A) the result of the transit district operations during the preceding fiscal year;

(B) an accounting of the expenditures of all local sales and use tax revenues generated under Title 59, Chapter 12, Part 22, Local Option Sales and Use Taxes for Transportation Act;

(C) the transit district's financial status on the final day of the fiscal year;

and (D) the transit district's progress and efforts to improve the transit district's fiscal outlook relative to the previous fiscal year;

and (ii) supply copies of the report under Subsection (4)(c)(i) to the general public upon request;

(d)(i) direct the internal auditor appointed under Section 17B-2a-810 to conduct audits that the transit commission determines to be the most critical to the success - 20 - Enrolled Copy S.B.

197 of the organization;

(ii) if requested by the executive director, direct the internal auditor appointed under Section 17B-2a-810 to conduct an audit of an internal issue of the large public transit district;

and (iii) hear audit reports for audits conducted in accordance with this Subsection (4)(d);

(e) at least annually, engage with the safety and security team of the large public transit district to ensure coordination with local municipalities and counties;

(f) at least annually, engage with the relevant metropolitan planning organizations and other stakeholders;

(g) at least annually, for the commissioners nominated by the councils of government, engage with the councils of government about community and local needs, investments, and services;

(h) engage with elected officials or staff from municipalities and counties within the large public transit district;

and (i) consult with local officials and stakeholders:

(i) to review routes, service changes, and service improvements;

and (ii) regarding the approvals described in Subsections (3)(a) through (c).

(5) A transit commission of a large public transit district may:

(a) approve and pass ordinances, resolutions, and orders that are:

(i) not repugnant to the United States Constitution, the Utah Constitution, or the provisions of this part;

and (ii) necessary for:

(A) the governance of the affairs of the district;

and (B) carrying into effect the provisions of this part;

(b) provide by resolution, under terms and conditions the transit commission considers fit, for the payment of demands against the district without prior specific approval by the transit commission, if the payment is:

(i) for a purpose for which the expenditure has been previously approved by the transit commission;

(ii) in an amount no greater than the amount authorized;

and (iii) approved by the executive director or other officer or deputy as the transit commission prescribes;

or (c) appoint a custodian for the funds and securities under large public transit district control.

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197 Enrolled Copy (6) A transit commissioner or a hearing officer designated by the transit commission may administer oaths and affirmations in a public transit district investigation or proceeding.

(7)(a) The vote of the transit commission on each ordinance or resolution shall be by roll call vote with each affirmative and negative vote recorded.

(b) The transit commission may not adopt an ordinance unless the ordinance is introduced at least 48 hours before the transit commission adopts the ordinance.

(c) Each ordinance adopted by the transit commission shall take effect upon adoption, unless the ordinance provides otherwise.

Section 9.

Section 17B-2a-809 is amended to read:

17B-2a-809 (Effective 05/06/26).

Public transit districts to submit agendas and minutes of board meetings.

(1) The board of trustees or transit commission of each public transit district shall submit to each constituent entity, as defined in Section 17B-1-701:

(a) a copy of the board or transit commission agenda and a notice of the location and time of the board or transit commission meeting within the same time frame provided to members of the board [prior to] before the meeting;

and (b) a copy of the minutes of board meetings within five working days following approval of the minutes.

(2) The board may submit notices, agendas, and minutes by electronic mail if agreed to by the constituent entity as defined under Section 17B-1-701.

Section 10.

Section 17B-2a-810 is amended to read:

17B-2a-810 (Effective 05/06/26).

Officers of a public transit district.

(1)(a) The officers of a public transit district shall consist of:

(i) the members of the board of trustees or transit commission;

(ii) for a small public transit district, a chair and vice chair, appointed by the board of trustees, subject to Subsection (1)(c);

(iii) a secretary, appointed by the board of trustees or transit commission;

(iv)(A) for a small public transit district, a general manager, appointed by the board of trustees as provided in Section 17B-2a-811, whose duties may be allocated by the board of trustees, at the board of trustees' discretion, to a chief executive officer, or both;

or (B) for a large public transit district, an executive director appointed by the [board of trustees] governor as provided in Section 17B-2a-811.1;

(v) for a small public transit district, a chief executive officer appointed by the board - 22 - Enrolled Copy S.B.

197 of trustees, as provided in Section 17B-2a-811;

(vi) for a small public transit district, a general counsel, appointed by the board of trustees, subject to Subsection (1)(d);

(vii) a treasurer, appointed as provided in Section 17B-1-633, except that the treasurer of a large public transit district shall be appointed by the executive director;

(viii) a comptroller, appointed by the board of trustees, subject to Subsection (1)(e), except that the comptroller of a large public transit district shall be appointed by the executive director;

(ix) for a large public transit district, an internal auditor, appointed by the [board of trustees] executive director, subject to Subsection (1)(f);

and (x) other officers, assistants, and deputies that the board of trustees or transit commission considers necessary.

(b) The board of trustees of a small public transit district may, at its discretion, appoint a president, who shall also be considered an officer of a public transit district.

(c) The district chair and vice chair of a small public transit district shall be members of the board of trustees.

(d) The person appointed as general counsel for a small public transit district shall:

(i) be admitted to practice law in the state;

and (ii) have been actively engaged in the practice of law for at least seven years next preceding the appointment.

(e) The person appointed as comptroller shall have been actively engaged in the practice of accounting for at least seven years next preceding the appointment.

(f) The person appointed as internal auditor shall be a licensed certified internal auditor or certified public accountant with at least five years experience in the auditing or public accounting profession, or the equivalent, [prior to] before appointment.

(2)(a) For a small public transit district, the district's general manager or chief executive officer, as the board prescribes, or for a large public transit district, the executive director, shall appoint all officers and employees not specified in Subsection (1).

(b) Each officer and employee appointed by the district's general manager or chief executive officer of a small public transit district, or the executive director of a large public transit district, serves at the pleasure of the appointing general manager, chief executive officer, or executive director.

(3) [The] For a small public transit district, the board of trustees shall by ordinance or - 23 - S.B.

197 Enrolled Copy resolution fix the compensation of all district officers and employees, except as otherwise provided in this part.

(4)(a) Each officer appointed by the board of trustees or transit commission, or by the district's general manager, chief executive officer, or executive director shall take the oath of office specified in Utah Constitution, Article IV, Section 10.

(b) Each oath under Subsection (4)(a) shall be subscribed and filed with the district secretary no later than 15 days after the commencement of the officer's term of office.

Section 11.

Section 17B-2a-811.1 is repealed and reenacted to read:

17B-2a-811.1 (Effective 05/06/26).

Executive director of a large public transit district -- Appointment -- Duties -- Reporting.

(1)(a) The governor, with the advice and consent of the Senate, shall appoint an executive director for a large public transit district.

(b) The executive director of a large public transit district in place as of January 1, 2026, shall remain in place until:

(i) reappointed as described in Subsection (1)(a);

or (ii) replaced as described in Subsection (1)(a).

(2)(a) Except as provided in Subsection (2)(b), the salary of the executive director shall be set as described in Section 67-22-2.

(b) For an executive director in place as of January 1, 2026, the salary and other terms of the executive director's employment contract in place as of January 31, 2026, shall remain in force until the expiration of the contract.

(c) After the expiration of the executive director's employment contract as described in Subsection (2)(b), the executive director is eligible to receive the same benefits as other executive employees of the large public transit district.

(3) The executive director manages and directs the operations of the large public transit district, with the primary and overarching mission to:

(a) provide efficient and cost effective public transit services;

(b) increase ridership;

(c) maintain a state of good repair;

and (d) reduce debt and maintain fiscal responsibility.

(4) The executive director:

(a) serves as a full-time officer and devotes full time to the district's business;

(b) serves at the pleasure of the governor;

(c) holds office for an indefinite term;

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197 (d) ensures that all district ordinances are enforced;

(e) advises the transit commission regarding the needs of the district;

(f) ensures district compliance with state and federal requirements;

(g) attends meetings of the transit commission;

and (h) supervises and has supervisory authority over all employees of the large public transit district.

(5) The executive director shall:

(a)(i) as described in Subsection (6), create and present the budget of the large public transit district to the transit commission for approval;

and (ii) provide notice of the proposed budget hearing and a copy of the proposed budget to the counties and municipalities within the large public transit district no later than 30 days before the hearing;

(b)(i) at least as frequently as every four years, in consultation with the transit commission and relevant metropolitan planning organizations, develop a strategic long-range transit plan for the district that aligns with relevant transportation and public transit plans on time horizons of five, 10, and 20 years;

(ii) provide the proposed strategic long-range transit plan described in Subsection (5)(b)(i) to councils of government, counties, municipalities, and other relevant stakeholders for review and input;

and (iii) after considering input received under Subsection (5)(b)(ii), present the proposed strategic long-range transit plan described in Subsection (5)(b)(i) to the transit commission for approval;

(c)(i) propose for transit commission approval any ordinances or bylaws with effect outside the transit district organization;

and (ii) develop and implement internal transit district policies;

(d) in consultation with the transit commission, create and annually report the public transit district's long-term financial plan to the State Finance Review Commission created in Section 63C-25-201;

(e)(i) at least as frequently as every five years, perform a cost-effectiveness and cost-benefit study for each mode of public transit;

and (ii) develop goals for the large public transit district to achieve an effective balance of cost-effective and cost-beneficial services;

(f) subject to Section 72-1-203, in consultation with the transit commission, prepare plans and specifications for the construction of district works;

- 25 - S.B.

197 Enrolled Copy (g) cause to be installed and maintained a system of auditing and accounting that shows the district's financial condition at all times;

(h) notwithstanding Subsections 17B-1-301(2)(l) and (m), have charge of:

(i) the acquisition, construction, maintenance, and operation of public transit facilities;

and (ii) the administration of the public transit district's business affairs;

(i) approve contracts and overall property acquisitions and dispositions for transit-oriented development;

(j) create and pursue funding opportunities for transit capital and service initiatives to meet anticipated growth within the public transit district and in accordance with the strategic long-range transit plan;

(k) regulate each transit facility that the public transit district owns and operates, including:

(i) fix rates, rentals, charges and any classifications of rates, rentals, and charges;

(ii) fix fares;

and (iii) propose rules and approve contracts, practices, and schedules for or in connection with a transit facility that the district owns or controls;

(l) oversee the investment of all funds assigned to the district for investment, including funds:

(i) held as part of a district's retirement system;

and (ii) invested in accordance with the participating employees' designation or direction in accordance with an employee deferred compensation plan established and operated in compliance with Section 457 of the Internal Revenue Code;

(m) if a custodian is appointed under Subsection 17B-2a-808.1(5)(c), pay the fees for the custodian's services from the interest earnings of the investment fund for which the custodian is appointed;

(n) ensure that the policies established by the public transit district meet state and federal regulatory requirements and federal grantee eligibility;

(o) coordinate with political subdivisions within the large public transit district and the department to coordinate public transit services provided by the large public transit district with pilot services related to public transit innovation grants;

and (p) require crime insurance for district officers and employees charged with the handling of district funds in an amount set by the commission.

(6)(a) The executive director shall prepare and submit to the transit commission an - 26 - Enrolled Copy S.B.

197 annual operating budget no later than 60 days before the beginning of each fiscal year.

(i)- estimated1 revenues- from all sources;

(ii) proposed expenditures for all programs, operations, and administrative functions, including:

(A) personnel and overhead costs;

(B) new construction and improvement projects;

(C) operation costs;

(D) maintenance and state of good repair of the public transit system;

and (E) capital expenditures, including vehicle purchases;

(iii) an explanation of significant changes from the budget of the prior fiscal year;

and (iv) other information as requested by the transit commission.

(c)(i) The transit commission shall review the proposed budget and may conduct hearings and request such additional information as the transit commission considers necessary.