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Second Substitute H.B. 331

Representative James A. Dunnigan proposes the following substitute bill:


             1     
HEALTH REFORM - HEALTH INSURANCE

             2     
COVERAGE IN STATE CONTRACTS

             3     
2009 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: James A. Dunnigan

             6     
Senate Sponsor: Gene Davis

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill requires certain state entities to require a contractor who contracts with the
             11      state entity to offer the contractor's employees qualified health insurance coverage
             12      during the duration of the contract if the contract is over a certain amount, and if the
             13      contract is a construction or design contract.
             14      Highlighted Provisions:
             15          This bill:
             16          .    defines the following terms:
             17              .    "employee";
             18              .    "qualified health insurance coverage"; and
             19              .    "subcontractor";
             20          .    requires the following state entities to require a contractor who contracts with the
             21      state entity to offer qualified health insurance coverage to the contractor's eligible
             22      employees and the employee's dependents if the contract amount is above a certain
             23      amount:
             24              .    the Department of Environmental Quality;
             25              .    the Capitol Preservation Board;


             26              .    the Department of Natural Resources;
             27              .    the Division of Facilities Construction and Management;
             28              .    the Utah Department of Transportation; and
             29              .    public transit districts;
             30          .    establishes enforcement and penalties for a contractor who does not maintain an
             31      offer of qualified health insurance coverage for employees during the duration of the
             32      contract;
             33          .    deposits any penalties collected into the Medicaid Restricted Account; and
             34          .    applies to construction or design contracts entered into on or after July 1, 2009.
             35      Monies Appropriated in this Bill:
             36          None
             37      Other Special Clauses:
             38          None
             39      Utah Code Sections Affected:
             40      AMENDS:
             41          17B-2a-818, as last amended by Laws of Utah 2008, Chapter 382
             42          26-18-402, as last amended by Laws of Utah 1998, Chapter 360
             43          63A-5-205, as last amended by Laws of Utah 2008, Chapter 382
             44      ENACTS:
             45          17B-2a-818.5, Utah Code Annotated 1953
             46          19-1-206, Utah Code Annotated 1953
             47          63-34-22, Utah Code Annotated 1953
             48          63C-9-403, Utah Code Annotated 1953
             49          72-6-107.5, Utah Code Annotated 1953
             50     
             51      Be it enacted by the Legislature of the state of Utah:
             52          Section 1. Section 17B-2a-818 is amended to read:
             53           17B-2a-818. Requirements applicable to public transit district contracts.
             54          (1) If the expenditure required to construct district facilities or works exceeds:
             55          (a) $25,000, the construction shall be let as provided in Title 63G, Chapter 6, Utah
             56      Procurement Code[.]; and


             57          (b) $750,000, the construction shall be let as provided in:
             58          (i) Title 63G, Chapter 6, Utah Procurement Code; and
             59          (ii) Section 17B-2a-818.5 .
             60          (2) (a) The board of trustees of a public transit district shall advertise each bid or
             61      proposal through public notice as the board determines.
             62          (b) A notice under Subsection (2)(a) may:
             63          (i) include publication in:
             64          (A) a newspaper of general circulation in the district;
             65          (B) a trade journal; or
             66          (C) other method determined by the board; and
             67          (ii) be made at least once, not less than ten days before the expiration of the period
             68      within which bids or proposals are received.
             69          (3) (a) The board of trustees may, in its discretion:
             70          (i) reject any or all bids or proposals; and
             71          (ii) readvertise or give notice again.
             72          (b) If, after rejecting bids or proposals, the board of trustees determines and declares by
             73      a two-thirds vote of all members present that in the board's opinion the supplies, equipment,
             74      and materials may be purchased at a lower price in the open market, the board may purchase
             75      the supplies, equipment, and materials in the open market, notwithstanding any provisions
             76      requiring contracts, bids, proposals, advertisement, or notice.
             77          (4) The board of trustees of a public transit district may let a contract without
             78      advertising for or inviting bids if:
             79          (a) the board finds, upon a two-thirds vote of all members present, that a repair,
             80      alteration, or other work or the purchase of materials, supplies, equipment, or other property is
             81      of urgent necessity; or
             82          (b) the district's general manager certifies by affidavit that there is only one source for
             83      the required supplies, equipment, materials, or construction items.
             84          (5) If a public transit district retains or withholds any payment on a contract with a
             85      private contractor to construct facilities under this section, the board shall retain or withhold
             86      and release the payment as provided in Section 13-8-5 .
             87          Section 2. Section 17B-2a-818.5 is enacted to read:


             88          17B-2a-818.5. Contracting powers of public transit districts -- Health insurance
             89      coverage.
             90          (1) For purposes of this section:
             91          (a) "Employee" means an "employee," "worker," or "operative" as defined in Section
             92      34A-2-104 who:
             93          (i) works at least 30 hours per calendar week; and
             94          (ii) meets employer eligibility waiting requirements for health care insurance which
             95      may not exceed 90 days from the date of hire.
             96          (b) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
             97          (c) "Qualified health insurance coverage" means a health benefit plan that at the time
             98      the contract is entered into or renewed:
             99          (i) (A) provides coverage that is actuarially equivalent to the current benefit plan
             100      determined by the Children's Health Insurance Program under Section 26-40-106 ; and
             101          (B) under which the employer pays at least 50% of the premium for the employee and
             102      the dependents of the employee;
             103          (ii) (A) is a federally qualified high deductible health plan that has;
             104          (I) the lowest deductible permitted for a federally qualified high deductible health plan;
             105      and
             106          (II) an out of pocket maximum that does not exceed three times the amount of the
             107      annual deductible; and
             108          (B) under which the employer pays 75% of the premium for the employee and the
             109      dependents of the employee; or
             110          (iii) (A) provides coverage that is actuarially equivalent to 75% of the benefit plan
             111      determined under Subsection (1)(c)(i); and
             112          (B) under which the employer pays at least 75% of the premium of the employee and
             113      the dependents of the employee.
             114          (d) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
             115          (2) Except as provided in Subsection (3), this section applies to all contracts entered
             116      into by the public transit district on or after July 1, 2009, if:
             117          (a) the contract is for design or construction; and
             118          (b) (i) the prime contract is in the amount of $1.5 million or greater; or


             119          (ii) a subcontract is in the amount of $750,000 or greater.
             120          (3) This section does not apply if:
             121          (a) the application of this section jeopardizes the receipt of federal funds;
             122          (b) the contract is a sole source contract; or
             123          (c) the contract is an emergency procurement.
             124          (4) (a) This section does not apply to a change order as defined in Section 63G-6-102 ,
             125      or a modification to a contract, when the contract does not meet the initial threshold required
             126      by Subsection (2).
             127          (b) A person who intentionally uses change orders or contract modifications to
             128      circumvent the requirements of Subsection (2) is guilty of an infraction.
             129          (5) (a) A contractor subject to Subsection (2) shall demonstrate to the public transit
             130      district that the contractor has and will maintain an offer of qualified health insurance coverage
             131      for the contractor's employees and the employee's dependents during the duration of the
             132      contract.
             133          (b) If a subcontractor of the contractor is subject to Subsection (2)(b), the contractor
             134      shall demonstrate to the public transit district that the subcontractor has and will maintain an
             135      offer of qualified health insurance coverage for the subcontractor's employees and the
             136      employee's dependents during the duration of the contract.
             137          (c) (i) (A) A contractor who fails to meet the requirements of Subsection (5)(a) during
             138      the duration of the contract is subject to penalties in accordance with administrative rules
             139      adopted by the public transit district under Subsection (6).
             140          (B) A contractor is not subject to penalties for the failure of a subcontractor to meet the
             141      requirements of Subsection (5)(b).
             142          (ii) (A) A subcontractor who fails to meet the requirements of Subsection (5)(b) during
             143      the duration of the contract is subject to penalties in accordance with administrative rules
             144      adopted by the public transit district under Subsection (6).
             145          (B) A subcontractor is not subject to penalties for the failure of a contractor to meet the
             146      requirements of Subsection (5)(a).
             147          (6) The public transit district shall adopt administrative rules:
             148          (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             149          (b) in coordination with:


             150          (i) the Department of Environmental Quality in accordance with Section 19-1-206 ;
             151          (ii) the Department of Natural Resources in accordance with Section 63-34-22 ;
             152          (iii) the State Building Board in accordance with Section 63A-5-205 ;
             153          (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403 ;
             154          (v) the Department of Transportation in accordance with Section 72-6-107.5 ; and
             155          (vi) the Legislature's Administrative Rules Review Committee; and
             156          (c) which establish:
             157          (i) the requirements and procedures a contractor must follow to demonstrate to the
             158      public transit district compliance with this section which shall include:
             159          (A) that a contractor will not have to demonstrate compliance with Section (5)(a) or (b)
             160      more than twice in any twelve-month period; and
             161          (B) that the actuarially equivalent determination required in Subsection (1) is met by
             162      the contractor if the contractor provides the department or division with a written statement of
             163      actuarial equivalency from either the Utah Department of Insurance or an actuary selected by
             164      the contractor or the contractor's insurer; and
             165          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
             166      violates the provisions of this section, which may include:
             167          (A) a three-month suspension of the contractor or subcontractor from entering into
             168      future contracts with the public transit district upon the first violation;
             169          (B) a six-month suspension of the contractor or subcontractor from entering into future
             170      contracts with the public transit district upon the second violation;
             171          (C) an action for debarment of the contractor or subcontractor in accordance with
             172      Section 63G-6-804 upon the third or subsequent violation; and
             173          (D) monetary penalties which may not exceed 50% of the amount necessary to
             174      purchase qualified health insurance coverage for employees and dependents of employees of
             175      the contractor or subcontractor who were not offered qualified health insurance coverage
             176      during the duration of the contract.
             177          (7) (a) In addition to the penalties imposed under Subsection (6)(c), a contractor or
             178      subcontractor who violates the provisions of this section shall be liable to the employee for
             179      health care costs not covered by insurance.
             180          (b) An employee has a private right of action only against the employee's employer to


             181      enforce the provisions of this Subsection (7).
             182          (8) Any penalties imposed and collected under this section shall be deposited into the
             183      Medicaid Restricted Account created in Section 26-18-402 .
             184          (9) The failure of a contractor or subcontractor to provide health insurance as required
             185      by this section:
             186          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
             187      or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
             188      Legal and Contractual Remedies; and
             189          (b) may not be used by the procurement entity or a prospective bidder, offeror, or
             190      contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
             191      or construction.
             192          Section 3. Section 19-1-206 is enacted to read:
             193          19-1-206. Contracting powers of department -- Health insurance coverage.
             194          (1) For purposes of this section:
             195          (a) "Employee" means an "employee," "worker," or "operative" as defined in Section
             196      34A-2-104 who:
             197          (i) works at least 30 hours per calendar week; and
             198          (ii) meets employer eligibility waiting requirements for health care insurance which
             199      may not exceed 90 days from the date of hire.
             200          (b) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
             201          (c) "Qualified health insurance coverage" means a health benefit plan that at the time
             202      the contract is entered into or renewed:
             203          (i) (A) provides coverage that is actuarially equivalent to the current benefit plan
             204      determined by the Children's Health Insurance Program under Section 26-40-106 ; and
             205          (B) under which the employer pays at least 50% of the premium for the employee and
             206      the dependents of the employee;
             207          (ii) (A) is a federally qualified high deductible health plan that has:
             208          (I) the lowest deductible permitted for a federally qualified high deductible health plan;
             209      and
             210          (II) an out of pocket maximum that does not exceed three times the amount of the
             211      annual deductible; and


             212          (B) under which the employer pays 75% of the premium for the employee and the
             213      dependents of the employee; or
             214          (iii) (A) provides coverage that is actuarially equivalent to 75% of the benefit plan
             215      determined under Subsection (1)(c)(i); and
             216          (B) under which the employer pays at least 75% of the premium of the employee and
             217      the dependents of the employee.
             218          (d) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
             219          (2) Except as provided in Subsection (3), this section applies to all contracts entered
             220      into by or delegated to the department or a division or board of the department on or after July
             221      1, 2009, if:
             222          (a) the contract is for design or construction; and
             223          (b) (i) the prime contract is in the amount of $1.5 million or greater; or
             224          (ii) a subcontract is in the amount of $750,000 or greater.
             225          (3) This section does not apply to contracts entered into by the department or a division
             226      or board of the department if:
             227          (a) the application of this section jeopardizes the receipt of federal funds;
             228          (b) the contract or agreement is between:
             229          (i) the department or a division or board of the department; and
             230          (ii) (A) another agency of the state;
             231          (B) the federal government;
             232          (C) another state;
             233          (D) an interstate agency;
             234          (E) a political subdivision of this state; or
             235          (F) a political subdivision of another state;
             236          (c) the executive director determines that applying the requirements of this section to a
             237      particular contract interferes with the effective response to an immediate health and safety
             238      threat from the environment; or
             239          (d) the contract is:
             240          (i) a sole source contract; or
             241          (ii) an emergency procurement.
             242          (4) (a) This section does not apply to a change order as defined in Section 63G-6-102 ,


             243      or a modification to a contract, when the contract does not meet the initial threshold required
             244      by Subsection (2).
             245          (b) A person who intentionally uses change orders or contract modifications to
             246      circumvent the requirements of Subsection (2) is guilty of an infraction.
             247          (5) (a) A contractor subject to Subsection (2) shall demonstrate to the executive
             248      director that the contractor has and will maintain an offer of qualified health insurance
             249      coverage for the contractor's employees and the employee's dependents during the duration of
             250      the contract.
             251          (b) If a subcontractor of the contractor is subject to Subsection (2), the contractor shall
             252      demonstrate to the executive director that the subcontractor has and will maintain an offer of
             253      qualified health insurance coverage for the subcontractor's employees and the employee's
             254      dependents during the duration of the contract.
             255          (c) (i) (A) A contractor who fails to comply with Subsection (5)(a) during the duration
             256      of the contract is subject to penalties in accordance with administrative rules adopted by the
             257      department under Subsection (6).
             258          (B) A contractor is not subject to penalties for the failure of a subcontractor to meet the
             259      requirements of Subsection (5)(b).
             260          (ii) (A) A subcontractor who fails to meet the requirements of Subsection (5)(b) during
             261      the duration of the contract is subject to penalties in accordance with administrative rules
             262      adopted by the department under Subsection (6).
             263          (B) A subcontractor is not subject to penalties for the failure of a contractor to meet the
             264      requirements of Subsection (5)(a).
             265          (6) The department shall adopt administrative rules:
             266          (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             267          (b) in coordination with:
             268          (i) a public transit district in accordance with Section 17B-2a-815.5 ;
             269          (ii) the Department of Natural Resources in accordance with Section 63-34-22 ;
             270          (iii) the State Building Board in accordance with Section 63A-5-205 ;
             271          (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403 ;
             272          (v) the Department of Transportation in accordance with Section 72-6-107.5 ; and
             273          (vi) the Legislature's Administrative Rules Review Committee; and


             274          (c) which establish:
             275          (i) the requirements and procedures a contractor must follow to demonstrate to the
             276      public transit district compliance with this section which shall include:
             277          (A) that a contractor will not have to demonstrate compliance with Section (5)(a) or (b)
             278      more than twice in any twelve-month period; and
             279          (B) that the actuarially equivalent determination required in Subsection (1) is met by
             280      the contractor if the contractor provides the department or division with a written statement of
             281      actuarial equivalency from either the Utah Department of Insurance or an actuary selected by
             282      the contractor or the contractor's insurer; and
             283          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
             284      violates the provisions of this section, which may include:
             285          (A) a three-month suspension of the contractor or subcontractor from entering into
             286      future contracts with the state upon the first violation;
             287          (B) a six-month suspension of the contractor or subcontractor from entering into future
             288      contracts with the state upon the second violation;
             289          (C) an action for debarment of the contractor or subcontractor in accordance with
             290      Section 63G-6-804 upon the third or subsequent violation; and
             291          (D) notwithstanding Section 19-1-303 , monetary penalties which may not exceed 50%
             292      of the amount necessary to purchase qualified health insurance coverage for an employee and
             293      the dependents of an employee of the contractor or subcontractor who was not offered qualified
             294      health insurance coverage during the duration of the contract.
             295          (7) (a) In addition to the penalties imposed under Subsection (6)(c), a contractor or
             296      subcontractor who violates the provisions of this section shall be liable to the employee for
             297      health care costs not covered by insurance.
             298          (b) An employee has a private right of action only against the employee's employer to
             299      enforce the provisions of this Subsection (7).
             300          (8) Any penalties imposed and collected under this section shall be deposited into the
             301      Medicaid Restricted Account created in Section 26-18-402 .
             302          (9) The failure of a contractor or subcontractor to provide health insurance as required
             303      by this section:
             304          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,


             305      or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
             306      Legal and Contractual Remedies; and
             307          (b) may not be used by the procurement entity or a prospective bidder, offeror, or
             308      contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
             309      or construction.
             310          Section 4. Section 26-18-402 is amended to read:
             311           26-18-402. Medicaid Restricted Account.
             312          (1) There is created a restricted account in the General Fund known as the Medicaid
             313      Restricted Account.
             314          (2) (a) [Any] The following shall be deposited into the Medicaid Restricted Account:
             315          (i) any general funds appropriated to the department for the state plan for medical
             316      assistance or for the Division of Health Care Financing that are not expended by the
             317      department in the fiscal year for which the general funds were appropriated and which are not
             318      otherwise designated as nonlapsing shall lapse into the Medicaid Restricted Account[.]; and
             319          (ii) any penalties imposed and collected under:
             320          (A) Section 17B-2a-818.5 ;
             321          (B) Section 19-1-206 ;
             322          (C) Section 63-34-22 ;
             323          (D) Section 63A-5-205 ;
             324          (E) Section 63C-9-403 ; or
             325          (F) Section 72-6-107.5 .
             326          (b) The account shall earn interest and all interest earned shall be deposited into the
             327      account.
             328          (c) The Legislature may appropriate monies in the restricted account to fund programs
             329      that expand medical assistance coverage and private health insurance plans to low income
             330      persons who have not traditionally been served by Medicaid, including the Utah Children's
             331      Health Insurance Program created in Chapter 40.
             332          Section 5. Section 63-34-22 is enacted to read:
             333          63-34-22. Contracting powers of department -- Health insurance coverage.
             334          (1) For purposes of this section:
             335          (a) "Employee" means an "employee," "worker," or "operative" as defined in Section


             336      34A-2-104 who:
             337          (i) works at least 30 hours per calendar week; and
             338          (ii) meets employer eligibility waiting requirements for health care insurance which
             339      may not exceed 90 days from the date of hire.
             340          (b) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
             341          (c) "Qualified health insurance coverage" means a health benefit plan that at the time
             342      the contract is entered into or renewed:
             343          (i) (A) provides coverage that is actuarially equivalent to the current benefit plan
             344      determined by the Children's Health Insurance Program under Section 26-40-106 ; and
             345          (B) under which the employer pays at least 50% of the premium for the employee and
             346      the dependents of the employee;
             347          (ii) (A) is a federally qualified high deductible health plan that has:
             348          (I) the lowest deductible permitted for a federally qualified high deductible health plan;
             349      and
             350          (II) an out of pocket maximum that does not exceed three times the amount of the
             351      annual deductible; and
             352          (B) under which the employer pays 75% of the premium for the employee and the
             353      dependents of the employee; or
             354          (iii) (A) provides coverage that is actuarially equivalent to 75% of the benefit plan
             355      determined under Subsection (1)(c)(i); and
             356          (B) under which the employer pays at least 75% of the premium of the employee and
             357      the dependents of the employee.
             358          (d) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
             359          (2) Except as provided in Subsection (3), this section applies to all contracts entered
             360      into by, or delegated to the department or a division, board, or council of the department on or
             361      after July 1, 2009, if:
             362          (a) the contract is for design or construction; and
             363          (b) (i) the prime contract is in the amount of $1.5 million or greater; or
             364          (ii) a subcontract is in the amount of $750,000 or greater.
             365          (3) This section does not apply to contracts entered into by the department or a
             366      division, board, or council of the department if:


             367          (a) the application of this section jeopardizes the receipt of federal funds;
             368          (b) the contract or agreement is between:
             369          (i) the department or a division, board, or council of the department; and
             370          (ii) (A) another agency of the state;
             371          (B) the federal government;
             372          (C) another state;
             373          (D) an interstate agency;
             374          (E) a political subdivision of this state; or
             375          (F) a political subdivision of another state; or
             376          (c) the contract or agreement is:
             377          (i) for the purpose of disbursing grants or loans authorized by statute;
             378          (ii) a sole source contract; or
             379          (iii) an emergency procurement.
             380          (4) (a) This section does not apply to a change order as defined in Section 63G-6-102 ,
             381      or a modification to a contract, when the contract does not meet the initial threshold required
             382      by Subsection (2).
             383          (b) A person who intentionally uses change orders or contract modifications to
             384      circumvent the requirements of Subsection (2) is guilty of an infraction.
             385          (5) (a) A contractor subject to Subsection (2)(b)(i) shall demonstrate to the department
             386      that the contractor has and will maintain an offer of qualified health insurance coverage for the
             387      contractor's employees and the employee's dependents during the duration of the contract.
             388          (b) If a subcontractor of the contractor is subject to Subsection (2)(b)(ii), the contractor
             389      shall demonstrate to the department that the subcontractor has and will maintain an offer of
             390      qualified health insurance coverage for the subcontractor's employees and the employee's
             391      dependents during the duration of the contract.
             392          (c) (i) (A) A contractor who fails to meet the requirements of Subsection (5)(a) during
             393      the duration of the contract is subject to penalties in accordance with administrative rules
             394      adopted by the department under Subsection (6).
             395          (B) A contractor is not subject to penalties for the failure of a subcontractor to meet the
             396      requirements of Subsection (5)(b).
             397          (ii) (A) A subcontractor who fails to meet the requirements of Subsection (5)(b) during


             398      the duration of the contract is subject to penalties in accordance with administrative rules
             399      adopted by the department under Subsection (6).
             400          (B) A subcontractor is not subject to penalties for the failure of a contractor to meet the
             401      requirements of Subsection (5)(a).
             402          (6) The department shall adopt administrative rules:
             403          (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             404          (b) in coordination with:
             405          (i) the Department of Environmental Quality in accordance with Section 19-1-206 ;
             406          (ii) a public transit district in accordance with Section 17B-2a-815.5 ;
             407          (iii) the State Building Board in accordance with Section 63A-5-205 ;
             408          (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403 ;
             409          (v) the Department of Transportation in accordance with Section 72-6-107.5 ; and
             410          (vi) the Legislature's Administrative Rules Review Committee; and
             411          (c) which establish:
             412          (i) the requirements and procedures a contractor must follow to demonstrate
             413      compliance with this section to the department which shall include:
             414          (A) that a contractor will not have to demonstrate compliance with Section (5)(a) or (b)
             415      more than twice in any twelve-month period; and
             416          (B) that the actuarially equivalent determination required in Subsection (1) is met by
             417      the contractor if the contractor provides the department or division with a written statement of
             418      actuarial equivalency from either the Utah Department of Insurance or an actuary selected by
             419      the contractor or the contractor's insurer; and
             420          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
             421      violates the provisions of this section, which may include:
             422          (A) a three-month suspension of the contractor or subcontractor from entering into
             423      future contracts with the state upon the first violation;
             424          (B) a six-month suspension of the contractor or subcontractor from entering into future
             425      contracts with the state upon the second violation;
             426          (C) an action for debarment of the contractor or subcontractor in accordance with
             427      Section 63G-6-804 upon the third or subsequent violation; and
             428          (D) monetary penalties which may not exceed 50% of the amount necessary to


             429      purchase qualified health insurance coverage for an employee and a dependent of an employee
             430      of the contractor or subcontractor who was not offered qualified health insurance coverage
             431      during the duration of the contract.
             432          (7) (a) In addition to the penalties imposed under Subsection (6), a contractor or
             433      subcontractor who violates the provisions of this section shall be liable to the employee for
             434      health care costs not covered by insurance.
             435          (b) An employee has a private right of action only against the employee's employer to
             436      enforce the provisions of this Subsection (7).
             437          (8) Any penalties imposed and collected under this section shall be deposited into the
             438      Medicaid Restricted Account created in Section 26-18-402 .
             439          (9) The failure of a contractor or subcontractor to provide health insurance as required
             440      by this section:
             441          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
             442      or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
             443      Legal and Contractual Remedies; and
             444          (b) may not be used by the procurement entity or a prospective bidder, offeror, or
             445      contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
             446      or construction.
             447          Section 6. Section 63A-5-205 is amended to read:
             448           63A-5-205. Contracting powers of director -- Retainage -- Health insurance
             449      coverage.
             450          (1) As used in this section[, "capital developments" and "capital improvements" have]:
             451          (a) "Capital developments" has the same meaning as provided in Section 63A-5-104 .
             452          (b) "Capital improvements" has the same meaning as provided in Section 63A-5-104 .
             453          (c) "Employee" means an "employee," "worker," or "operative" as defined in Section
             454      34A-2-104 who:
             455          (i) works at least 30 hours per calendar week; and
             456          (ii) meets employer eligibility waiting requirements for health care insurance which
             457      may not exceed 90 days from the date of hire.
             458          (d) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
             459          (e) "Qualified health insurance coverage" means a health benefit plan that at the time


             460      the contract is entered into or renewed:
             461          (i) (A) provides coverage that is actuarially equivalent to the current benefit plan
             462      determined by the Children's Health Insurance Program under Section 26-40-106 ; and
             463          (B) under which the employer pays at least 50% of the premium for the employee and
             464      the dependents of the employee;
             465          (ii) (A) is a federally qualified high deductible health plan that has:
             466          (I) the lowest deductible permitted for a federally qualified high deductible health plan;
             467      and
             468          (II) an out of pocket maximum that does not exceed three times the amount of the
             469      annual deductible; and
             470          (B) under which the employer pays 75% of the premium for the employee and the
             471      dependents of the employee; or
             472          (iii) (A) provides coverage that is actuarially equivalent to 75% of the benefit plan
             473      determined under Subsection (1)(e)(i); and
             474          (B) under which the employer pays at least 75% of the premium of the employee and
             475      the dependents of the employee.
             476          (f) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
             477          (2) In accordance with Title 63G, Chapter 6, Utah Procurement Code, the director may:
             478          (a) subject to Subsection (3), enter into contracts for any work or professional services
             479      which the division or the State Building Board may do or have done; and
             480          (b) as a condition of any contract for architectural or engineering services, prohibit the
             481      architect or engineer from retaining a sales or agent engineer for the necessary design work.
             482          (3) (a) Except as provided in Subsection (3)(b), this Subsection (3) applies to all
             483      contracts entered into by the division or the State Building Board on or after July 1, 2009, if:
             484          (i) the contract is for design or construction; and
             485          (ii) (A) the prime contract is in the amount of $1.5 million or greater; or
             486          (B) a subcontract is in the amount of $750,000 or greater.
             487          (b) This Subsection (3) does not apply:
             488          (i) if the application of this Subsection (3) jeopardizes the receipt of federal funds;
             489          (ii) if the contract is a sole source contract;
             490          (iii) if the contract is an emergency procurement; or


             491          (iv) to a change order as defined in Section 63G-6-102 , or a modification to a contract,
             492      when the contract does not meet the threshold required by Subsection (3)(a).
             493          (c) A person who intentionally uses change orders or contract modifications to
             494      circumvent the requirements of Subsection (3)(a) is guilty of an infraction.
             495          (d) (i) A contractor subject to Subsection (3)(a) shall demonstrate to the director that
             496      the contractor has and will maintain an offer of qualified health insurance coverage for the
             497      contractor's employees and the employee's dependents.
             498          (ii) If a subcontractor of the contractor is subject to Subsection (3)(a), the contractor
             499      shall demonstrate to the director that the subcontractor has and will maintain an offer of
             500      qualified health insurance coverage for the subcontractor's employees and the employee's
             501      dependents.
             502          (e) (i) (A) A contractor who fails to meet the requirements of Subsection (3)(d)(i)
             503      during the duration of the contract is subject to penalties in accordance with administrative
             504      rules adopted by the division under Subsection (3)(f).
             505          (B) A contractor is not subject to penalties for the failure of a subcontractor to meet the
             506      requirements of Subsection (3)(d)(ii).
             507          (ii) (A) A subcontractor who fails to meet the requirements of Subsection (3)(d)(ii)
             508      during the duration of the contract is subject to penalties in accordance with administrative
             509      rules adopted by the division under Subsection (3)(f).
             510          (B) A subcontractor is not subject to penalties for the failure of a contractor to meet the
             511      requirements of Subsection (3)(d)(i).
             512          (f) The division shall adopt administrative rules:
             513          (i) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             514          (ii) in coordination with:
             515          (A) the Department of Environmental Quality in accordance with Section 19-1-206 ;
             516          (B) the Department of Natural Resources in accordance with Section 63-34-22 ;
             517          (C) a public transit district in accordance with Section 17B-2a-815.5 ;
             518          (D) the State Capitol Preservation Board in accordance with Section 63C-9-403 ;
             519          (E) the Department of Transportation in accordance with Section 72-6-107.5 ; and
             520          (F) the Legislature's Administrative Rules Review Committee; and
             521          (iii) which establish:


             522          (A) the requirements and procedures a contractor must follow to demonstrate to the
             523      director compliance with this Subsection (3) which shall include:
             524          (I) that a contractor will not have to demonstrate compliance with Section (5)(a) or (b)
             525      more than twice in any twelve-month period; and
             526          (II) that the actuarially equivalent determination required in Subsection (1) is met by
             527      the contractor if the contractor provides the department or division with a written statement of
             528      actuarial equivalency from either the Utah Department of Insurance or an actuary selected by
             529      the contractor or the contractor's insurer; and
             530          (B) the penalties that may be imposed if a contractor or subcontractor intentionally
             531      violates the provisions of this Subsection (3), which may include:
             532          (I) a three-month suspension of the contractor or subcontractor from entering into
             533      future contracts with the state upon the first violation;
             534          (II) a six-month suspension of the contractor or subcontractor from entering into future
             535      contracts with the state upon the second violation;
             536          (III) an action for debarment of the contractor or subcontractor in accordance with
             537      Section 63G-6-804 upon the third or subsequent violation; and
             538          (IV) monetary penalties which may not exceed 50% of the amount necessary to
             539      purchase qualified health insurance coverage for an employee and the dependents of an
             540      employee of the contractor or subcontractor who was not offered qualified health insurance
             541      coverage during the duration of the contract.
             542          (g) (i) In addition to the penalties imposed under Subsection (3)(f)(iii), a contractor or
             543      subcontractor who violates the provisions of this section shall be liable to the employee for
             544      health care costs not covered by insurance.
             545          (ii) An employee has a private right of action only against the employee's employer to
             546      enforce the provisions of this Subsection (3)(g).
             547          (h) Any penalties imposed and collected under this section shall be deposited into the
             548      Medicaid Restricted Account created by Section 26-18-402 .
             549          (i) The failure of a contractor or subcontractor to provide health insurance as required
             550      by this section:
             551          (i) may not be the basis for a protest or other action from a prospective bidder, offeror,
             552      or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,


             553      Legal and Contractual Remedies; and
             554          (ii) may not be used by the procurement entity or a prospective bidder, offeror, or
             555      contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
             556      or construction.
             557          [(3)] (4) The judgment of the director as to the responsibility and qualifications of a
             558      bidder is conclusive, except in case of fraud or bad faith.
             559          [(4)] (5) The division shall make all payments to the contractor for completed work in
             560      accordance with the contract and pay the interest specified in the contract on any payments that
             561      are late.
             562          [(5)] (6) If any payment on a contract with a private contractor to do work for the
             563      division or the State Building Board is retained or withheld, it shall be retained or withheld and
             564      released as provided in Section 13-8-5 .
             565          Section 7. Section 63C-9-403 is enacted to read:
             566          63C-9-403. Contracting power of executive director -- Health insurance coverage.
             567          (1) For purposes of this section:
             568          (a) "Employee" means an "employee," "worker," or "operative" as defined in Section
             569      34A-2-104 who:
             570          (i) works at least 30 hours per calendar week; and
             571          (ii) meets employer eligibility waiting requirements for health care insurance which
             572      may not exceed 90 days from the date of hire.
             573          (b) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
             574          (c) "Qualified health insurance coverage" means a health benefit plan that at the time
             575      the contract is entered into or renewed:
             576          (i) (A) provides coverage that is actuarially equivalent to the current benefit plan
             577      determined by the Children's Health Insurance Program under Section 26-40-106 ; and
             578          (B) under which the employer pays at least 50% of the premium for the employee and
             579      the dependents of the employee;
             580          (ii) (A) is a federally qualified high deductible health plan that has:
             581          (I) the lowest deductible permitted for a federally qualified high deductible health plan;
             582      and
             583          (II) an out of pocket maximum that does not exceed three times the amount of the


             584      annual deductible; and
             585          (B) under which the employer pays 75% of the premium for the employee and the
             586      dependents of the employee; or
             587          (iii) (A) provides coverage that is actuarially equivalent to 75% of the benefit plan
             588      determined under Subsection (1)(c)(i); and
             589          (B) under which the employer pays at least 75% of the premium of the employee and
             590      the dependents of the employee.
             591          (d) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
             592          (2) Except as provided in Subsection (3), this section applies to all contracts entered
             593      into by the board or on behalf of the board on or after July 1, 2009, if:
             594          (a) the contract is for design or construction; and
             595          (b) (i) the prime contract is in the amount of $1.5 million or greater; or
             596          (ii) a subcontract is in the amount of $750,000 or greater.
             597          (3) This section does not apply if:
             598          (a) the application of this section jeopardizes the receipt of federal funds;
             599          (b) the contract is a sole source contract; or
             600          (c) the contract is an emergency procurement.
             601          (4) (a) This section does not apply to a change order as defined in Section 63G-6-102 ,
             602      or a modification to a contract, when the contract does not meet the initial threshold required
             603      by Subsection (2).
             604          (b) A person who intentionally uses change orders or contract modifications to
             605      circumvent the requirements of Subsection (2) is guilty of an infraction.
             606          (5) (a) A contractor subject to Subsection (2) shall demonstrate to the executive
             607      director that the contractor has and will maintain an offer of qualified health insurance
             608      coverage for the contractor's employees and the employee's dependents during the duration of
             609      the contract.
             610          (b) If a subcontractor of the contractor is subject to Subsection (2)(b), the contractor
             611      shall demonstrate to the executive director that the subcontractor has and will maintain an offer
             612      of qualified health insurance coverage for the subcontractor's employees and the employee's
             613      dependents during the duration of the contract.
             614          (c) (i) (A) A contractor who fails to meet the requirements of Subsection (5)(a) during


             615      the duration of the contract is subject to penalties in accordance with administrative rules
             616      adopted by the division under Subsection (6).
             617          (B) A contractor is not subject to penalties for the failure of a subcontractor to meet the
             618      requirements of Subsection (5)(b).
             619          (ii) (A) A subcontractor who fails to meet the requirements of Subsection (5)(b) during
             620      the duration of the contract is subject to penalties in accordance with administrative rules
             621      adopted by the department under Subsection (6).
             622          (B) A subcontractor is not subject to penalties for the failure of a contractor to meet the
             623      requirements of Subsection (5)(a).
             624          (6) The department shall adopt administrative rules:
             625          (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             626          (b) in coordination with:
             627          (i) the Department of Environmental Quality in accordance with Section 19-1-206 ;
             628          (ii) the Department of Natural Resources in accordance with Section 63-34-22 ;
             629          (iii) the State Building Board in accordance with Section 63A-5-205 ;
             630          (iv) a public transit district in accordance with Section 17B-2a-815.5 ;
             631          (v) the Department of Transportation in accordance with Section 72-6-107.5 ; and
             632          (vi) the Legislature's Administrative Rules Review Committee; and
             633          (c) which establish:
             634          (i) the requirements and procedures a contractor must follow to demonstrate to the
             635      executive director compliance with this section which shall include:
             636          (A) that a contractor will not have to demonstrate compliance with Section (5)(a) or (b)
             637      more than twice in any twelve-month period; and
             638          (B) that the actuarially equivalent determination required in Subsection (1) is met by
             639      the contractor if the contractor provides the department or division with a written statement of
             640      actuarial equivalency from either the Utah Department of Insurance or an actuary selected by
             641      the contractor or the contractor's insurer; and
             642          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
             643      violates the provisions of this section, which may include:
             644          (A) a three-month suspension of the contractor or subcontractor from entering into
             645      future contracts with the state upon the first violation;


             646          (B) a six-month suspension of the contractor or subcontractor from entering into future
             647      contracts with the state upon the second violation;
             648          (C) an action for debarment of the contractor or subcontractor in accordance with
             649      Section 63G-6-804 upon the third or subsequent violation; and
             650          (D) monetary penalties which may not exceed 50% of the amount necessary to
             651      purchase qualified health insurance coverage for employees and dependents of employees of
             652      the contractor or subcontractor who were not offered qualified health insurance coverage
             653      during the duration of the contract.
             654          (7) (a) In addition to the penalties imposed under Subsection (6)(c), a contractor or
             655      subcontractor who violates the provisions of this section shall be liable to the employee for
             656      health care costs not covered by insurance.
             657          (ii) An employee has a private right of action only against the employee's employer to
             658      enforce the provisions of this Subsection (7).
             659          (8) Any penalties imposed and collected under this section shall be deposited into the
             660      Medicaid Restricted Account created in Section 26-18-402 .
             661          (9) The failure of a contractor or subcontractor to provide health insurance as required
             662      by this section:
             663          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
             664      or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
             665      Legal and Contractual Remedies; and
             666          (b) may not be used by the procurement entity or a prospective bidder, offeror, or
             667      contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
             668      or construction.
             669          Section 8. Section 72-6-107.5 is enacted to read:
             670          72-6-107.5. Construction of improvements of highway -- Contracts -- Health
             671      insurance coverage.
             672          (1) For purposes of this section:
             673          (a) "Employee" means an "employee," "worker," or "operative" as defined in Section
             674      34A-2-104 who:
             675          (i) works at least 30 hours per calendar week; and
             676          (ii) meets employer eligibility waiting requirements for health care insurance which


             677      may not exceed 90 days from the date of hire.
             678          (b) "Health benefit plan" has the same meaning as provided in Section 31A-1-301 .
             679          (c) "Qualified health insurance coverage" means a health benefit plan that at the time
             680      the contract is entered into or renewed:
             681          (i) (A) provides coverage that is actuarially equivalent to the current benefit plan
             682      determined by the Children's Health Insurance Program under Section 26-40-106 ; and
             683          (B) under which the employer pays at least 50% of the premium for the employee and
             684      the dependents of the employee;
             685          (ii) (A) is a federally qualified high deductible health plan that has:
             686          (I) the lowest deductible permitted for a federally qualified high deductible health plan;
             687      and
             688          (II) an out of pocket maximum that does not exceed three times the amount of the
             689      annual deductible; and
             690          (B) under which the employer pays 75% of the premium for the employee and the
             691      dependents of the employee; or
             692          (iii) (A) provides coverage that is actuarially equivalent to 75% of the benefit plan
             693      determined under Subsection (1)(c)(i); and
             694          (B) under which the employer pays at least 75% of the premium of the employee and
             695      the dependents of the employee.
             696          (d) "Subcontractor" has the same meaning provided for in Section 63A-5-208 .
             697          (2) Except as provided in Subsection (3), this section applies to all contracts entered
             698      into by the department on or after July 1, 2009, for construction or design of highways if:
             699          (a) the prime contract is in the amount of $1.5 million or greater; or
             700          (b) a subcontract is in the amount of $750,000 or greater.
             701          (3) This section does not apply if:
             702          (a) the application of this section jeopardizes the receipt of federal funds;
             703          (b) the contract is a sole source contract; or
             704          (c) the contract is an emergency procurement.
             705          (4) (a) This section does not apply to a change order as defined in Section 63G-6-102 ,
             706      or a modification to a contract, when the contract does not meet the initial threshold required
             707      by Subsection (2).


             708          (b) A person who intentionally uses change orders or contract modifications to
             709      circumvent the requirements of Subsection (2) is guilty of an infraction.
             710          (5) (a) A contractor subject to Subsection (2) shall demonstrate to the department that
             711      the contractor has and will maintain an offer of qualified health insurance coverage for the
             712      contractor's employees and the employee's dependents during the duration of the contract.
             713          (b) If a subcontractor of the contractor is subject to Subsection (2), the contractor shall
             714      demonstrate to the department that the subcontractor has and will maintain an offer of qualified
             715      health insurance coverage for the subcontractor's employees and the employee's dependents
             716      during the duration of the contract.
             717          (c) (i) (A) A contractor who fails to meet the requirements of Subsection (5)(a) during
             718      the duration of the contract is subject to penalties in accordance with administrative rules
             719      adopted by the department under Subsection (6).
             720          (B) A contractor is not subject to penalties for the failure of a subcontractor to meet the
             721      requirements of Subsection (5)(b).
             722          (ii) (A) A subcontractor who fails to meet the requirements of Subsection (5)(b) during
             723      the duration of the contract is subject to penalties in accordance with administrative rules
             724      adopted by the department under Subsection (6).
             725          (B) A subcontractor is not subject to penalties for the failure of a contractor to meet the
             726      requirements of Subsection (5)(a).
             727          (6) The department shall adopt administrative rules:
             728          (a) in accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act;
             729          (b) in coordination with:
             730          (i) the Department of Environmental Quality in accordance with Section 19-1-206 ;
             731          (ii) the Department of Natural Resources in accordance with Section 63-34-22 ;
             732          (iii) the State Building Board in accordance with Section 63A-5-205 ;
             733          (iv) the State Capitol Preservation Board in accordance with Section 63C-9-403 ;
             734          (v) a public transit district in accordance with Section 17B-2a-815.5 ; and
             735          (vi) the Legislature's Administrative Rules Review Committee; and
             736          (c) which establish:
             737          (i) the requirements and procedures a contractor must follow to demonstrate to the
             738      department compliance with this section which shall include:


             739          (A) that a contractor will not have to demonstrate compliance with Section (5)(a) or (b)
             740      more than twice in any twelve-month period; and
             741          (B) that the actuarially equivalent determination required in Subsection (1) is met by
             742      the contractor if the contractor provides the department or division with a written statement of
             743      actuarial equivalency from either the Utah Department of Insurance or an actuary selected by
             744      the contractor or the contractor's insurer; and
             745          (ii) the penalties that may be imposed if a contractor or subcontractor intentionally
             746      violates the provisions of this section, which may include:
             747          (A) a three-month suspension of the contractor or subcontractor from entering into
             748      future contracts with the state upon the first violation;
             749          (B) a six-month suspension of the contractor or subcontractor from entering into future
             750      contracts with the state upon the second violation;
             751          (C) an action for debarment of the contractor or subcontractor in accordance with
             752      Section 63G-6-804 upon the third or subsequent violation; and
             753          (D) monetary penalties which may not exceed 50% of the amount necessary to
             754      purchase qualified health insurance coverage for an employee and a dependent of the employee
             755      of the contractor or subcontractor who was not offered qualified health insurance coverage
             756      during the duration of the contract.
             757          (7) (a) In addition to the penalties imposed under Subsection (6), a contractor or
             758      subcontractor who violates the provisions of this section shall be liable to the employee for
             759      health care costs not covered by insurance.
             760          (ii) An employee has a private right of action only against the employee's employer to
             761      enforce the provisions of this Subsection (7).
             762          (8) Any penalties imposed and collected under this section shall be deposited into the
             763      Medicaid Restricted Account created in Section 26-18-402 .
             764          (9) The failure of a contractor or subcontractor to provide health insurance as required
             765      by this section:
             766          (a) may not be the basis for a protest or other action from a prospective bidder, offeror,
             767      or contractor under Section 63G-6-801 or any other provision in Title 63G, Chapter 6, Part 8,
             768      Legal and Contractual Remedies; and
             769          (b) may not be used by the procurement entity or a prospective bidder, offeror, or


             770      contractor as a basis for any action or suit that would suspend, disrupt, or terminate the design
             771      or construction.


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