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S.B. 5

             1     

REVENUE BOND AND CAPITAL FACILITIES

             2     
AUTHORIZATIONS

             3     
2011 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: J. Stuart Adams

             6     
House Sponsor: Gage Froerer

             7     
             8      LONG TITLE
             9      General Description:
             10          This bill makes modifications to provisions relating to bonding and authorizes certain
             11      state agencies and higher education institutions to issue revenue bonds and to build
             12      capital facilities using agency, institutional, or donated funds.
             13      Highlighted Provisions:
             14          This bill:
             15          .    exempts the 2011-12 fiscal year from funding and construction restrictions relating
             16      to budget deficits;
             17          .    removes an existing authorization for acquisition of the Department of Human
             18      Services office in Brigham City, Utah;
             19          .    authorizes the issuance of revenue bonds by the State Building Ownership
             20      Authority;
             21          .    authorizes the issuance of revenue bonds by the State Board of Regents; and
             22          .    authorizes other capital facility planning, design, and construction to be funded
             23      from agency, institutional, or donated funds.
             24      Money Appropriated in this Bill:
             25          None
             26      Other Special Clauses:
             27          None


             28      Utah Code Sections Affected:
             29      AMENDS:
             30          63A-5-104, as last amended by Laws of Utah 2010, Chapter 338
             31          63B-8-501, as last amended by Laws of Utah 2008, Chapter 382
             32      ENACTS:
             33          63B-20-101, Utah Code Annotated 1953
             34          63B-20-102, Utah Code Annotated 1953
             35          63B-20-201, Utah Code Annotated 1953
             36     
             37      Be it enacted by the Legislature of the state of Utah:
             38          Section 1. Section 63A-5-104 is amended to read:
             39           63A-5-104. Capital development and capital improvement process -- Approval
             40      requirements -- Limitations on new projects -- Emergencies.
             41          (1) As used in this section:
             42          (a) "Capital developments" means a:
             43          (i) remodeling, site, or utility project with a total cost of $2,500,000 or more;
             44          (ii) new facility with a construction cost of $500,000 or more; or
             45          (iii) purchase of real property where an appropriation is requested to fund the purchase.
             46          (b) "Capital improvements" means a:
             47          (i) remodeling, alteration, replacement, or repair project with a total cost of less than
             48      $2,500,000;
             49          (ii) site and utility improvement with a total cost of less than $2,500,000; or
             50          (iii) new facility with a total construction cost of less than $500,000.
             51          (c) (i) "New facility" means the construction of a new building on state property
             52      regardless of funding source.
             53          (ii) "New facility" includes:
             54          (A) an addition to an existing building; and
             55          (B) the enclosure of space that was not previously fully enclosed.
             56          (iii) "New facility" does not mean:
             57          (A) the replacement of state-owned space that is demolished or that is otherwise
             58      removed from state use, if the total construction cost of the replacement space is less than


             59      $2,500,000; or
             60          (B) the construction of facilities that do not fully enclose a space.
             61          (d) "Replacement cost of existing state facilities" means the replacement cost, as
             62      determined by the Division of Risk Management, of state facilities, excluding auxiliary
             63      facilities as defined by the State Building Board.
             64          (e) "State funds" means public money appropriated by the Legislature.
             65          (2) The State Building Board, on behalf of all state agencies, commissions,
             66      departments, and institutions shall submit its capital development recommendations and
             67      priorities to the Legislature for approval and prioritization.
             68          (3) (a) Except as provided in Subsections (3)(b), (d), and (e), a capital development
             69      project may not be constructed on state property without legislative approval.
             70          (b) Legislative approval is not required for a capital development project if the State
             71      Building Board determines that:
             72          (i) the requesting higher education institution has provided adequate assurance that:
             73          (A) state funds will not be used for the design or construction of the facility; and
             74          (B) the higher education institution has a plan for funding in place that will not require
             75      increased state funding to cover the cost of operations and maintenance to, or state funding for,
             76      immediate or future capital improvements to the resulting facility; and
             77          (ii) the use of the state property is:
             78          (A) appropriate and consistent with the master plan for the property; and
             79          (B) will not create an adverse impact on the state.
             80          (c) (i) The Division of Facilities Construction and Management shall maintain a record
             81      of facilities constructed under the exemption provided in Subsection (3)(b).
             82          (ii) For facilities constructed under the exemption provided in Subsection (3)(b), a
             83      higher education institution may not request:
             84          (A) increased state funds for operations and maintenance; or
             85          (B) state capital improvement funding.
             86          (d) Legislative approval is not required for:
             87          (i) the renovation, remodeling, or retrofitting of an existing facility with nonstate funds;
             88          (ii) a facility to be built with nonstate funds and owned by nonstate entities within
             89      research park areas at the University of Utah and Utah State University;


             90          (iii) a facility to be built at This is the Place State Park by This is the Place Foundation
             91      with funds of the foundation, including grant money from the state, or with donated services or
             92      materials;
             93          (iv) a capital project that:
             94          (A) is funded by:
             95          (I) the Uintah Basin Revitalization Fund; or
             96          (II) the Navajo Revitalization Fund; and
             97          (B) does not provide a new facility for a state agency or higher education institution; or
             98          (v) a capital project on school and institutional trust lands that is funded by the School
             99      and Institutional Trust Lands Administration from the Land Grant Management Fund and that
             100      does not fund construction of a new facility for a state agency or higher education institution.
             101          (e) (i) Legislative approval is not required for capital development projects to be built
             102      for the Department of Transportation as a result of an exchange of real property under Section
             103      72-5-111 .
             104          (ii) When the Department of Transportation approves those exchanges, it shall notify
             105      the president of the Senate, the speaker of the House, and the cochairs of the Capital Facilities
             106      and Administrative Services Subcommittee of the Legislature's Joint Appropriation Committee
             107      about any new facilities to be built under this exemption.
             108          (4) (a) (i) The State Building Board, on behalf of all state agencies, commissions,
             109      departments, and institutions shall by January 15 of each year, submit a list of anticipated
             110      capital improvement requirements to the Legislature for review and approval.
             111          (ii) The list shall identify:
             112          (A) a single project that costs more than $1,000,000;
             113          (B) multiple projects within a single building or facility that collectively cost more than
             114      $1,000,000;
             115          (C) a single project that will be constructed over multiple years with a yearly cost of
             116      $1,000,000 or more and an aggregate cost of more than $2,500,000;
             117          (D) multiple projects within a single building or facility with a yearly cost of
             118      $1,000,000 or more and an aggregate cost of more than $2,500,000;
             119          (E) a single project previously reported to the Legislature as a capital improvement
             120      project under $1,000,000 that, because of an increase in costs or scope of work, will now cost


             121      more than $1,000,000; and
             122          (F) multiple projects within a single building or facility previously reported to the
             123      Legislature as a capital improvement project under $1,000,000 that, because of an increase in
             124      costs or scope of work, will now cost more than $1,000,000.
             125          (b) Unless otherwise directed by the Legislature, the State Building Board shall
             126      prioritize capital improvements from the list submitted to the Legislature up to the level of
             127      appropriation made by the Legislature.
             128          (c) In prioritizing capital improvements, the State Building Board shall consider the
             129      results of facility evaluations completed by an architect/engineer as stipulated by the building
             130      board's facilities maintenance standards.
             131          (d) The State Building Board may require an entity that benefits from a capital
             132      improvement project to repay the capital improvement funds from savings that result from the
             133      project.
             134          (e) The State Building Board may provide capital improvement funding to a single
             135      project, or to multiple projects within a single building or facility, even if the total cost of the
             136      project or multiple projects is $2,500,000 or more, if:
             137          (i) the capital improvement project or multiple projects require more than one year to
             138      complete; and
             139          (ii) the Legislature has affirmatively authorized the capital improvement project or
             140      multiple projects to be funded in phases.
             141          (5) The Legislature may authorize:
             142          (a) the total square feet to be occupied by each state agency; and
             143          (b) the total square feet and total cost of lease space for each agency.
             144          (6) (a) Except as provided in Subsection (6)(b) or (c), the Legislature may not fund the
             145      design or construction of any new capital development projects, except to complete the funding
             146      of projects for which partial funding has been previously provided, until the Legislature has
             147      appropriated 1.1% of the replacement cost of existing state facilities to capital improvements.
             148          (b) (i) As used in this Subsection (6)(b):
             149          (A) "Education Fund budget deficit" is as defined in Section 63J-1-312 ; and
             150          (B) "General Fund budget deficit" is as defined in Section 63J-1-312 .
             151          (ii) If the Legislature determines that an Education Fund budget deficit or a General


             152      Fund budget deficit exists, the Legislature may, in eliminating the deficit, reduce the amount
             153      appropriated to capital improvements to 0.9% of the replacement cost of state buildings.
             154          (c) The requirements under Subsections (6)(a) and (b) do not apply to the 2008-09,
             155      2009-10, [and] 2010-11, and 2011-12 fiscal years.
             156          (7) (a) If, after approval of capital development and capital improvement priorities by
             157      the Legislature under this section, emergencies arise that create unforeseen critical capital
             158      improvement projects, the State Building Board may, notwithstanding the requirements of Title
             159      63J, Chapter 1, Budgetary Procedures Act, reallocate capital improvement funds to address
             160      those projects.
             161          (b) The State Building Board shall report any changes it makes in capital improvement
             162      allocations approved by the Legislature to:
             163          (i) the Office of Legislative Fiscal Analyst within 30 days of the reallocation; and
             164          (ii) the Legislature at its next annual general session.
             165          (8) (a) The State Building Board may adopt a rule allocating to institutions and
             166      agencies their proportionate share of capital improvement funding.
             167          (b) The State Building Board shall ensure that the rule:
             168          (i) reserves funds for the Division of Facilities Construction and Management for
             169      emergency projects; and
             170          (ii) allows the delegation of projects to some institutions and agencies with the
             171      requirement that a report of expenditures will be filed annually with the Division of Facilities
             172      Construction and Management and appropriate governing bodies.
             173          (9) It is the intent of the Legislature that in funding capital improvement requirements
             174      under this section the General Fund be considered as a funding source for at least half of those
             175      costs.
             176          Section 2. Section 63B-8-501 is amended to read:
             177           63B-8-501. Revenue bond authorizations.
             178          [(1) (a) It is the intent of the Legislature that the State Building Ownership Authority,
             179      under the authority of Title 63B, Chapter 1, Part 3, State Building Ownership Authority Act,
             180      may issue or execute obligations, or enter into or arrange for a lease purchase agreement in
             181      which participation interests may be created, to provide up to $2,510,000 for the acquisition of
             182      the Department of Human Services Office in Brigham City, together with additional amounts


             183      necessary to pay costs of issuance, pay capitalized interest, and fund any debt service reserve
             184      requirements.]
             185          [(b) It is the intent of the Legislature that amounts representing existing budgets for
             186      rent for the Department of Human Services be used as the primary revenue source for the
             187      Department of Human Services to pay the state for repayment of any obligation created under
             188      authority of this Subsection (1).]
             189          [(2) (a)] It is the intent of the Legislature that:
             190          (1) the State Building Ownership Authority, under the authority of Title 63B, Chapter
             191      1, Part 3, State Building Ownership Authority Act, may issue or execute obligations, or enter
             192      into or arrange for a lease purchase agreement in which participation interests may be created,
             193      to provide up to $6,518,000 for the construction of an office building to house the Department
             194      of Corrections and the Board of Pardons and Parole Administration, together with additional
             195      amounts necessary to pay costs of issuance, pay capitalized interest, and fund any debt service
             196      reserve requirements[.]; and
             197          [(b) It is the intent of the Legislature that]
             198          (2) amounts representing existing budgets for rent for the Department of Corrections
             199      and the Board of Pardons and Parole Administration be used as the primary revenue source for
             200      the Department of Corrections and the Board of Pardons and Parole Administration to pay the
             201      state for repayment of any obligation created under authority of this [Subsection (2)] section.
             202          Section 3. Section 63B-20-101 is enacted to read:
             203     
CHAPTER 20. 2011 FINANCING AUTHORIZATIONS

             204     
Part 1. 2011 Revenue Bond Authorizations

             205          63B-20-101. Revenue Bond Authorizations -- State Building Ownership
             206      Authority.
             207          (1) The Legislature intends that:
             208          (a) the State Building Ownership Authority, under the authority of Title 63B, Chapter
             209      1, Part 3, State Building Ownership Authority Act, may issue or execute obligations, or enter
             210      into or arrange for a lease-purchase agreement in which participation interests may be created,
             211      to provide up to $3,900,000 for the acquisition of the Davis County Courts building and
             212      adjacent land in Farmington City, together with additional amounts necessary to pay costs of
             213      issuance, pay capitalized interest, and fund any debt service reserve requirements;


             214          (b) the judicial branch use existing lease budgets as the primary revenue source for
             215      repayment of any obligation created under authority of this section; and
             216          (c) the judicial branch may not request additional state funds for operation and
             217      maintenance costs.
             218          (2) The Legislature intends that:
             219          (a) the State Building Ownership Authority, under the authority of Title 63B, Chapter
             220      1, Part 3, State Building Ownership Authority Act, may issue or execute obligations, or enter
             221      into or arrange for a lease-purchase agreement in which participation interests may be created,
             222      to provide up to $1,200,000 for the acquisition and construction of the Utah College of Applied
             223      Technology Administration and Training building with up to 8,000 square feet, together with
             224      additional amounts necessary to pay costs of issuance, pay capitalized interest, and fund any
             225      debt service reserve requirements;
             226          (b) the Utah College of Applied Technology use existing lease budgets as the primary
             227      revenue source for repayment of any obligation created under authority of this section; and
             228          (c) the Utah College of Applied Technology may not request additional state funds for
             229      operation and maintenance costs.
             230          Section 4. Section 63B-20-102 is enacted to read:
             231          63B-20-102. Revenue Bond Authorizations -- Board of Regents.
             232          (1) The Legislature intends that:
             233          (a) the Board of Regents, on behalf of Utah Valley University, may issue, sell, and
             234      deliver revenue bonds or other evidences of indebtedness of Utah Valley University to borrow
             235      money on the credit, revenues, and reserves of the university, other than appropriations of the
             236      Legislature, to finance the cost of constructing a Student Life and Wellness building with up to
             237      170,000 square feet;
             238          (b) Utah Valley University use student fees as the primary revenue sources for
             239      repayment of any obligation created under authority of this section;
             240          (c) the maximum amount of revenue bonds or evidences of indebtedness authorized by
             241      this section is $40,000,000, together with other amounts necessary to pay costs of issuance, pay
             242      capitalized interest, and fund any debt service reserve requirements;
             243          (d) the university may plan, design, and construct the Student Life and Wellness
             244      building subject to the requirements of Title 63A, Chapter 5, State Building Board - Division


             245      of Facilities Construction and Management; and
             246          (e) the university may not request state funds for operation and maintenance costs or
             247      capital improvements.
             248          (2) The Legislature intends that:
             249          (a) the Board of Regents, on behalf of Utah Valley University, may issue, sell, and
             250      deliver revenue bonds or other evidences of indebtedness of Utah Valley University to borrow
             251      money on the credit, revenues, and reserves of the university, other than appropriations of the
             252      Legislature, to finance the cost of constructing a parking structure with up to 534 stalls;
             253          (b) Utah Valley University use parking fees as the primary revenue sources for
             254      repayment of any obligation created under authority of this section;
             255          (c) the maximum amount of revenue bonds or evidences of indebtedness authorized by
             256      this section is $8,000,000, together with other amounts necessary to pay costs of issuance, pay
             257      capitalized interest, and fund any debt service reserve requirements;
             258          (d) the university may plan, design, and construct the parking structure, subject to the
             259      requirements of Title 63A, Chapter 5, State Building Board - Division of Facilities
             260      Construction and Management; and
             261          (e) the university may not request state funds for operation and maintenance costs or
             262      capital improvements.
             263          (3) The Legislature intends that:
             264          (a) the Board of Regents, on behalf of the University of Utah, may issue, sell, and
             265      deliver revenue bonds or other evidences of indebtedness of the University of Utah to borrow
             266      money on the credit, revenues, and reserves of the university, other than appropriations of the
             267      Legislature, to finance the cost of constructing a parking structure for the Ambulatory Care
             268      Complex;
             269          (b) the University of Utah use clinical revenues and other institutional funds as the
             270      primary revenue sources for repayment of any obligation created under authority of this
             271      section;
             272          (c) the maximum amount of revenue bonds or evidences of indebtedness authorized by
             273      this section is $16,328,000, together with other amounts necessary to pay costs of issuance, pay
             274      capitalized interest, and fund any debt service reserve requirements;
             275          (d) the university may plan, design, and construct the parking structure, subject to the


             276      requirements of Title 63A, Chapter 5, State Building Board - Division of Facilities
             277      Construction and Management; and
             278          (e) the university may not request state funds for operation and maintenance costs or
             279      capital improvements.
             280          (4) The Legislature intends that:
             281          (a) the Board of Regents, on behalf of the University of Utah, may issue, sell, and
             282      deliver revenue bonds or other evidences of indebtedness of the University of Utah to borrow
             283      money on the credit, revenues, and reserves of the university, other than appropriations of the
             284      Legislature, to finance the cost of constructing a University of Utah Healthcare Medical
             285      Services building with up to 70,000 square feet;
             286          (b) the University of Utah use clinical revenues, donations, and other institutional
             287      funds as the primary revenue sources for repayment of any obligation created under authority of
             288      this section;
             289          (c) the maximum amount of revenue bonds or evidences of indebtedness authorized by
             290      this section is $25,857,000, together with other amounts necessary to pay costs of issuance, pay
             291      capitalized interest, and fund any debt service reserve requirements;
             292          (d) the university may plan, design, and construct the Healthcare Medical Services
             293      building, subject to the requirements of Title 63A, Chapter 5, State Building Board - Division
             294      of Facilities Construction and Management; and
             295          (e) the university may not request state funds for operation and maintenance costs or
             296      capital improvements.
             297          (5) The Legislature intends that:
             298          (a) the Board of Regents, on behalf of Snow College, may issue, sell, and deliver
             299      revenue bonds or other evidences of indebtedness of Snow College to borrow money on the
             300      credit, revenues, and reserves of the university, other than appropriations of the Legislature, to
             301      finance the cost of constructing student housing with up to 93,000 square feet;
             302          (b) Snow College use student housing rental fees as the primary revenue source for
             303      repayment of any obligation created under authority of this section;
             304          (c) the maximum amount of revenue bonds or evidences of indebtedness authorized by
             305      this section is $15,689,000, together with other amounts necessary to pay costs of issuance, pay
             306      capitalized interest, and fund any debt service reserve requirements;


             307          (d) the university may plan, design, and construct the student housing, subject to the
             308      requirements of Title 63A, Chapter 5, State Building Board - Division of Facilities
             309      Construction and Management; and
             310          (e) the university may not request state funds for operation and maintenance costs or
             311      capital improvements.
             312          (6) The Legislature intends that:
             313          (a) the Board of Regents, on behalf of the University of Utah, may issue, sell, and
             314      deliver revenue bonds or other evidences of indebtedness of the University of Utah to borrow
             315      money on the credit, revenues, and reserves of the university, other than appropriations of the
             316      Legislature, to finance the cost of expanding the Dee Glen Smith Athletic Center with up to
             317      58,000 new square feet;
             318          (b) the University of Utah use donations and other institutional funds as the primary
             319      revenue sources for repayment of any obligation created under authority of this section;
             320          (c) the maximum amount of revenue bonds or evidences of indebtedness authorized by
             321      this section is $20,000,000, together with other amounts necessary to pay costs of issuance, pay
             322      capitalized interest, and fund any debt service reserve requirements;
             323          (d) the university may plan, design, and construct the athletic center subject to the
             324      requirements of Title 63A, Chapter 5, State Building Board - Division of Facilities
             325      Construction and Management; and
             326          (e) the university may not request state funds for operation and maintenance costs or
             327      capital improvements.
             328          Section 5. Section 63B-20-201 is enacted to read:
             329     
Part 2. 2011 Capital Facility Design and Construction Authorizations

             330          63B-20-201. Authorizations to design and construct capital facilities using
             331      institutional or agency funds.
             332          (1) The Legislature intends that:
             333          (a) Utah State University may, subject to requirements in Title 63A, Chapter 5, State
             334      Building Board - Division of Facilities Construction and Management, use $2,500,000 in
             335      donations to plan, design, renovate the existing 8,800 square foot structure, and construct an
             336      addition to the Art Barn with up to 3,700 new square feet;
             337          (b) no state funds be used for any portion of this project; and


             338          (c) the university may not request state funds for operation and maintenance costs or
             339      capital improvements.
             340          (2) The Legislature intends that:
             341          (a) Utah State University may, subject to requirements in Title 63A, Chapter 5, State
             342      Building Board - Division of Facilities Construction and Management, use $10,000,000 in
             343      donations and institutional funds to plan, design, and construct a Regional Campuses and
             344      Distance Education building, with up to 38,000 new square feet;
             345          (b) no state funds be used for any portion of this project; and
             346          (c) the university may not request state funds for operation and maintenance costs or
             347      capital improvements.
             348          (3) The Legislature intends that:
             349          (a) Utah State University may, subject to requirements in Title 63A, Chapter 5, State
             350      Building Board - Division of Facilities Construction and Management, use $7,500,000 in
             351      donations to plan, design, and construct an Athletics Competition and Practice Facility, with up
             352      to 28,000 new square feet;
             353          (b) no state funds be used for any portion of this project; and
             354          (c) the university may not request state funds for operation and maintenance costs or
             355      capital improvements.
             356          (4) The Legislature intends that:
             357          (a) the Department of Natural Resources may, subject to requirements in Title 63A,
             358      Chapter 5, State Building Board - Division of Facilities Construction and Management, use
             359      $2,300,000 in donations to plan, design, and construct the Lee Kay Archery Center, with up to
             360      50,000 new square feet;
             361          (b) no state funds be used for any portion of this project; and
             362          (c) the department may not request state funds for operation and maintenance costs or
             363      capital improvements.




Legislative Review Note
    as of 3-2-11 8:43 AM


Office of Legislative Research and General Counsel


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