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H.B. 378

             1     

STATE ACCOUNTING AND BUDGETARY

             2     
PROCEDURES AMENDMENTS

             3     
2008 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Ron Bigelow

             6     
Senate Sponsor: Lyle W. Hillyard

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill makes certain changes to state accounting and budgetary procedures involving
             11      state funds and accounts and the governor's budget submission.
             12      Highlighted Provisions:
             13          This bill:
             14          .    eliminates certain obsolete fund types;
             15          .    modifies fund types to comply with certain Governmental Accounting Standards
             16      Board requirements; and
             17          .    requires the governor to report certain staff funding information in the governor's
             18      budget.
             19      Monies Appropriated in this Bill:
             20          None
             21      Other Special Clauses:
             22          None
             23      Utah Code Sections Affected:
             24      AMENDS:
             25          51-5-4, as last amended by Laws of Utah 2006, Chapter 323
             26          63-38-2, as last amended by Laws of Utah 2007, Chapter 179
             27     


             28      Be it enacted by the Legislature of the state of Utah:
             29          Section 1. Section 51-5-4 is amended to read:
             30           51-5-4. Funds established -- Titles of funds -- Fund functions.
             31          (1) (a) (i) The funds enumerated in this section are established as major fund types.
             32          (ii) All resources and financial transactions of Utah state government shall be
             33      accounted for within one of these major fund types.
             34          (b) (i) All funds or subfunds shall be consolidated into one of the state's major fund
             35      types.
             36          (ii) Where a specific statute requires that a restricted fund be established, that fund
             37      shall be accounted for as an individual fund or subfund within the major fund type to meet
             38      generally accepted accounting principles.
             39          (iii) Existing and new activities of state government authorized by the Legislature shall
             40      be accounted for within the framework of the major fund types established in this section.
             41          (c) The Division of Finance shall determine the accounting classification that complies
             42      with generally accepted accounting principles for all funds or subfunds created by the
             43      Legislature.
             44          (d) (i) Major fund types shall be added by amending this chapter.
             45          (ii) Whenever a new act creates or establishes a fund without amending this chapter,
             46      the reference to a fund in the new act shall be classified within one of the major fund types
             47      established by this section.
             48          (2) Major Fund Type Titles:
             49          (a) General Fund;
             50          [(b) Education Fund;]
             51          [(c)] (b) Special Revenue Funds;
             52          [(d)] (c) Capital Projects Funds;
             53          [(e)] (d) Debt Service Funds;
             54          [(f)] (e) Permanent Funds;
             55          [(g)] (f) Enterprise Funds;
             56          [(h)] (g) Internal Service Funds;
             57          [(i)] (h) Trust and Agency Funds; and
             58          [(j) General Fixed Assets Account Group;]


             59          [(k) General Long-Term Obligation Account Group; and]
             60          [(l) College and University Funds.]
             61          (i) Discrete Component Unit Funds.
             62          (3) The General Fund shall receive all revenues and account for all expenditures not
             63      otherwise provided for by law in any other fund.
             64          [(4) The Education Fund shall receive all revenues from taxes on intangible property or
             65      from a tax on income and shall be designated for public and higher education.]
             66          [(5)] (4) Special Revenue Funds account for proceeds of specific revenue sources,
             67      other than permanent funds, trust and agency funds, or major capital projects, that are legally
             68      restricted to expenditures for a specific purpose.
             69          (a) The Education Fund is a Special Revenue Fund that:
             70          (i) receives all revenues from taxes on intangible property or from a tax on income; and
             71          (ii) is designated for public and higher education.
             72          [(a)] (b) The Uniform School Fund is a Special Revenue Fund that accounts for all
             73      revenues that are required by law to be expended for the public school programs of the state.
             74          [(b)] (c) The Transportation Fund is a Special Revenue Fund that accounts for all
             75      revenues that are required by law to be expended for highway purposes.
             76          [(c)] (d) (i) A Restricted Special Revenue Fund is a Special Revenue Fund created by
             77      legislation or contractual relationship with parties external to the state that:
             78          (A) identifies specific revenues collected from fees, taxes, dedicated credits, donations,
             79      federal funds, or other sources;
             80          (B) defines the use of the money in the fund for a specific function of government or
             81      program within an agency; and
             82          (C) delegates spending authority or authorization to use the fund's assets to a governing
             83      board, administrative department, or other officials as defined in the enabling legislation or
             84      contract establishing the fund.
             85          (ii) A Restricted Special Revenue Fund may only be created by contractual relationship
             86      with external parties when the sources of revenue for the fund are donated revenues or federal
             87      revenues.
             88          (iii) Restricted Special Revenue Funds are subject to annual legislative review by the
             89      appropriate legislative appropriations subcommittee.


             90          [(6)] (5) Capital Projects Funds account for financial resources to be expended for the
             91      acquisition or construction of major capital facilities, except that when financing for the
             92      acquisition or construction of a major capital facility is obtained from a trust fund or a
             93      proprietary type fund within one of the major fund types, the monies shall be accounted for in
             94      those accounts.
             95          [(7)] (6) Debt Service Funds account for the accumulation of resources for, and the
             96      payment of, the principal and interest on general long-term obligations.
             97          [(8)] (7) Permanent Funds account for assets that are legally restricted to the extent that
             98      only earnings, and not principal, may be used for a specific purpose.
             99          [(9)] (8) Enterprise Funds are designated to account for the following:
             100          (a) operations, financed and operated in a manner similar to private business
             101      enterprises, where the Legislature intends that the costs of providing goods or services to the
             102      public are financed or recovered primarily through user charges;
             103          (b) operations where the Legislature requires periodic determination of revenues
             104      earned, expenses incurred, and net income;
             105          (c) operations for which a fee is charged to external users for goods or services; or
             106          (d) operations that are financed with debt that is secured solely by a pledge of the net
             107      revenues from fees and charges of the operations.
             108          [(10)] (9) Internal Service Funds account for the financing of goods or services
             109      provided by one department, division, or agency to other departments, divisions, or agencies of
             110      the state, or to other governmental units, on a cost-reimbursement basis.
             111          [(11)] (10) (a) Trust and Agency Funds account for assets held by the state as trustee or
             112      agent for individuals, private organizations, or other governmental units.
             113          (b) Pension Trust Funds, Investment Trust Funds, Private-Purpose Trust Funds, and
             114      Agency Funds are Trust and Agency Funds.
             115          [(12) The General Fixed Assets Account Group accounts for all fixed assets acquired
             116      or constructed for use by the state, except for the fixed assets accounted for in the Internal
             117      Service, Enterprise, Trust and Agency, and College and University Funds.]
             118          [(13) The General Long-Term Obligation Account Group accounts for general
             119      obligation bonds, revenue bonds, capital lease obligations, accrued annual and compensatory
             120      leave, and other long-term obligations not otherwise recorded in Internal Service, Enterprise,


             121      Trust and Agency, and College and University Funds.]
             122          [(14)] (11) [College and University Funds] Discrete Component Unit Funds account
             123      for the financial resources used to operate the state's colleges and universities and other discrete
             124      component units.
             125          Section 2. Section 63-38-2 is amended to read:
             126           63-38-2. Governor to submit budget to Legislature -- Contents -- Preparation --
             127      Appropriations based on current tax laws and not to exceed estimated revenues.
             128          (1) (a) The governor shall, within three days after the convening of the Legislature in
             129      the annual general session, submit a budget for the ensuing fiscal year by delivering it to the
             130      presiding officer of each house of the Legislature together with a schedule for all of the
             131      proposed appropriations of the budget, clearly itemized and classified.
             132          (b) The budget message shall include:
             133          (i) a projection of estimated revenues and expenditures for the next fiscal year; and
             134          (ii) the source of all direct, indirect, or in-kind matching funds for all federal grants or
             135      assistance programs included in the budget.
             136          (2) At least 34 days before the submission of any budget, the governor shall deliver a
             137      confidential draft copy of his proposed budget recommendations to the Office of the
             138      Legislative Fiscal Analyst.
             139          (3) (a) The budget shall contain a complete plan of proposed expenditures and
             140      estimated revenues for the next fiscal year based upon the current fiscal year state tax laws and
             141      rates.
             142          (b) The budget may be accompanied by a separate document showing proposed
             143      expenditures and estimated revenues based on changes in state tax laws or rates.
             144          (4) The budget shall be accompanied by a statement showing:
             145          (a) the revenues and expenditures for the last fiscal year;
             146          (b) the current assets, liabilities, and reserves, surplus or deficit, and the debts and
             147      funds of the state;
             148          (c) an estimate of the state's financial condition as of the beginning and the end of the
             149      period covered by the budget;
             150          (d) a complete analysis of lease with an option to purchase arrangements entered into
             151      by state agencies;


             152          (e) the recommendations for each state agency for new full-time employees for the next
             153      fiscal year; which recommendation should be provided also to the State Building Board under
             154      Subsection 63A-5-103 (2);
             155          (f) any explanation the governor may desire to make as to the important features of the
             156      budget and any suggestion as to methods for the reduction of expenditures or increase of the
             157      state's revenue; and
             158          (g) the information detailing certain regulatory fee increases required by Section
             159      63-38-3.2 .
             160          (5) The budget shall include an itemized estimate of the appropriations for:
             161          (a) the Legislative Department as certified to the governor by the president of the
             162      Senate and the speaker of the House;
             163          (b) the Executive Department;
             164          (c) the Judicial Department as certified to the governor by the state court administrator;
             165          (d) payment and discharge of the principal and interest of the indebtedness of the state;
             166          (e) the salaries payable by the state under the Utah Constitution or under law for the
             167      lease agreements planned for the next fiscal year;
             168          (f) other purposes that are set forth in the Utah Constitution or under law; and
             169          (g) all other appropriations.
             170          (6) Deficits or anticipated deficits shall be included in the budget.
             171          (7) (a) (i) For the purpose of preparing and reporting the budget, the governor shall
             172      require from the proper state officials, including public and higher education officials, all heads
             173      of executive and administrative departments and state institutions, bureaus, boards,
             174      commissions, and agencies expending or supervising the expenditure of the state moneys, and
             175      all institutions applying for state moneys and appropriations, itemized estimates of revenues
             176      and expenditures.
             177          (ii) (A) The governor may also require other information under these guidelines and at
             178      times as the governor may direct.
             179          (B) These guidelines may include a requirement for program productivity and
             180      performance measures, where appropriate, with emphasis on outcome indicators.
             181          (b) The estimate for the Legislative Department as certified by the presiding officers of
             182      both houses shall be included in the budget without revision by the governor.


             183          (c) The estimate for the Judicial Department, as certified by the state court
             184      administrator, shall also be included in the budget without revision, but the governor may make
             185      separate recommendations on it.
             186          (d) The governor may require the attendance at budget meetings of representatives of
             187      public and higher education, state departments and institutions, and other institutions or
             188      individuals applying for state appropriations.
             189          (e) The governor may revise all estimates, except those relating to the Legislative
             190      Department, the Judicial Department, and those providing for the payment of principal and
             191      interest to the state debt and for the salaries and expenditures specified by the Utah
             192      Constitution or under the laws of the state.
             193          (8) The total appropriations requested for expenditures authorized by the budget may
             194      not exceed the estimated revenues from taxes, fees, and all other sources for the next ensuing
             195      fiscal year.
             196          (9) If any item of the budget as enacted is held invalid upon any ground, the invalidity
             197      does not affect the budget itself or any other item in it.
             198          (10) (a) In submitting the budgets for the Departments of Health and Human Services
             199      and the Office of the Attorney General, the governor shall consider a separate recommendation
             200      in his budget for funds to be contracted to:
             201          (i) local mental health authorities under Section 62A-15-110 ;
             202          (ii) local substance abuse authorities under Section 62A-15-110 ;
             203          (iii) area agencies under Section 62A-3-104.2 ;
             204          (iv) programs administered directly by and for operation of the Divisions of Substance
             205      Abuse and Mental Health and Aging and Adult Services;
             206          (v) local health departments under Title 26A, Chapter 1, Local Health Departments;
             207      and
             208          (vi) counties for the operation of Children's Justice Centers under Section 67-5b-102 .
             209          (b) In his budget recommendations under Subsections (10)(a)(i), (ii), and (iii), the
             210      governor shall consider an amount sufficient to grant local health departments, local mental
             211      health authorities, local substance abuse authorities, and area agencies the same percentage
             212      increase for wages and benefits that he includes in his budget for persons employed by the
             213      state.


             214          (c) If the governor does not include in his budget an amount sufficient to grant the
             215      increase described in Subsection (10)(b), he shall include a message to the Legislature
             216      regarding his reason for not including that amount.
             217          (11) (a) In submitting the budget for the Department of Agriculture, the governor shall
             218      consider an amount sufficient to grant local conservation districts and Utah Association of
             219      Conservation District employees the same percentage increase for wages and benefits that he
             220      includes in his budget for persons employed by the state.
             221          (b) If the governor does not include in his budget an amount sufficient to grant the
             222      increase described in Subsection (11)(a), he shall include a message to the Legislature
             223      regarding his reason for not including that amount.
             224          (12) (a) In submitting the budget for the Utah State Office of Rehabilitation and the
             225      Division of Services for People with Disabilities, the Division of Child and Family Services,
             226      and the Division of Juvenile Justice Services within the Department of Human Services, the
             227      governor shall consider an amount sufficient to grant employees of corporations that provide
             228      direct services under contract with those divisions, the same percentage increase for
             229      cost-of-living that he includes in his budget for persons employed by the state.
             230          (b) If the governor does not include in his budget an amount sufficient to grant the
             231      increase described in Subsection (12)(a), he shall include a message to the Legislature
             232      regarding his reason for not including that amount.
             233          (13) (a) The Families, Agencies, and Communities Together Council may propose to
             234      the governor under Subsection 63-75-4 (4)(e) a budget recommendation for collaborative
             235      service delivery systems operated under Section 63-75-6.5 .
             236          (b) The Legislature may, through a specific program schedule, designate funds
             237      appropriated for collaborative service delivery systems operated under Section 63-75-6.5 .
             238          (14) The governor shall include in his budget the state's portion of the budget for the
             239      Utah Communications Agency Network established in Title 63C, Chapter 7, Utah
             240      Communications Agency Network Act.
             241          (15) (a) The governor shall include a separate recommendation in the governor's
             242      budget for funds to maintain the operation and administration of the Utah Comprehensive
             243      Health Insurance Pool.
             244          (b) In making the recommendation the governor may consider:


             245          (i) actuarial analysis of growth or decline in enrollment projected over a period of at
             246      least three years;
             247          (ii) actuarial analysis of the medical and pharmacy claims costs projected over a period
             248      of at least three years;
             249          (iii) the annual Medical Care Consumer Price Index;
             250          (iv) the annual base budget for the pool established by the Commerce and Revenue
             251      Appropriations Subcommittee for each fiscal year;
             252          (v) the growth or decline in insurance premium taxes and fees collected by the tax
             253      commission and the insurance department; and
             254          (vi) the availability of surplus General Fund revenue under Section 63-38-2.5 and
             255      Subsection 59-14-204 (5)(b).
             256          (16) In adopting a budget for each fiscal year, the Legislature shall consider an amount
             257      sufficient to grant local health departments, local mental health authorities, local substance
             258      abuse authorities, area agencies on aging, conservation districts, and Utah Association of
             259      Conservation District employees the same percentage increase for wages and benefits that is
             260      included in the budget for persons employed by the state.
             261          (17) (a) In adopting a budget each year for the Utah Comprehensive Health Insurance
             262      Pool, the Legislature shall determine an amount that is sufficient to fund the pool for each
             263      fiscal year.
             264          (b) When making a determination under Subsection (17)(a), the Legislature shall
             265      consider factors it determines are appropriate, which may include:
             266          (i) actuarial analysis of growth or decline in enrollment projected over a period of at
             267      least three years;
             268          (ii) actuarial analysis of the medical and pharmacy claims costs projected over a period
             269      of at least three years;
             270          (iii) the annual Medical Care Consumer Price Index;
             271          (iv) the annual base budget for the pool established by the Commerce and Revenue
             272      Appropriations Subcommittee for each fiscal year;
             273          (v) the growth or decline in insurance premium taxes and fees collected by the tax
             274      commission and the insurance department from the previous fiscal year; and
             275          (vi) the availability of surplus General Fund revenue under Section 63-38-2.5 and


             276      Subsection 59-14-204 (5)(b).
             277          (c) The funds appropriated by the Legislature to fund the Utah Comprehensive Health
             278      Insurance Pool as determined under Subsection (17)(a):
             279          (i) shall be deposited into the enterprise fund established by Section 31A-29-120 ; and
             280          (ii) are restricted and are to be used to maintain the operation, administration, and
             281      management of the Utah Comprehensive Health Insurance Pool created by Section
             282      31A-29-104 .
             283          (18) In considering the factors in Subsections (15)(b)(i), (ii), and (iii) and Subsections
             284      (17)(b)(i), (ii), and (iii), the governor and the Legislature may consider the actuarial data and
             285      projections prepared for the board of the Utah Comprehensive Health Insurance Pool as it
             286      develops its financial statements and projections for each fiscal year.
             287          (19) The governor shall report, for each line item, the average annual dollar amount of
             288      staff funding associated with all positions that were vacant during the last fiscal year.




Legislative Review Note
    as of 1-31-08 12:24 PM


Office of Legislative Research and General Counsel


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