! The Capitol Complex is closed to the public due to COVID-19. All meetings will be held virtually online. View procedures and guidelines (PDF) for remote public comment and virtual meeting instructions (PDF).

H.B. 193

This document includes House Committee Amendments incorporated into the bill on Wed, Feb 19, 2014 at 10:29 AM by jeyring. -->              1     

APPROPRIATIONS AND BUDGETING AMENDMENTS

             2     
2014 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: Jacob L. Anderegg

             5     
Senate Sponsor: Deidre M. Henderson

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill modifies the Budgetary Procedures Act by amending provisions relating to
             10      legislative review and approval requirements for internal service fund operations.
             11      Highlighted Provisions:
             12          This bill:
             13          .    provides that if an internal service fund agency operates more than one internal
             14      service fund within the internal service fund agency, the internal service fund
             15      agency shall comply with the legislative review and approval requirements for each
             16      internal service fund;
             17          .    requires legislative H. [ approval ] review .H for the number of full-time
             17a      equivalent contract
             18      employees of each internal service fund as part of the annual appropriation process;
             18a      H. . authorizes an internal service fund agency that begins a new service or introduces a
             18b      new product between annual general sessions of the Legislature to acquire contract employees,
             18c      if necessary, for that service or product;
             18d          . requires an internal service fund agency to report any change in the number of
             18e      contract employees to the appropriate legislative appropriations subcommittee for review; .H              19          .    provides that if an internal service fund agency operates an internal service fund and
             20      does not get the required legislative approvals, the internal service fund agency shall
             21      rebate all rates, fees, and amounts collected to those who use the services for the
             22      rates, fees, and amounts collected that were not approved; and
             23          .    makes conforming and technical changes.


             24      Money Appropriated in this Bill:
             25          None
             26      Other Special Clauses:
             27          This bill takes effect on July 1, 2014.


             28      Utah Code Sections Affected:
             29      AMENDS:
             30           63J-1-410 , as renumbered and amended by Laws of Utah 2009, Chapter 183
             31     
             32      Be it enacted by the Legislature of the state of Utah:
             33          Section 1. Section 63J-1-410 is amended to read:
             34           63J-1-410. Internal service funds -- Governance and review.
             35          (1) For purposes of this section:
             36          (a) "Agency" means a department, division, office, bureau, or other unit of state
             37      government, and includes any subdivision of an agency.
             38          (b) "Do not replace vehicles" means a vehicle accounted for in the Division of Fleet
             39      Operations for which charges to an agency for its use do not include amounts to cover
             40      depreciation or to accumulate assets to replace the vehicle at the end of its useful life.
             41          (c) "Internal service fund agency" means an agency that provides goods or services to
             42      other agencies of state government or to other governmental units on a capital maintenance and
             43      cost reimbursement basis, and which recovers costs through interagency billings.
             44          (d) "Revolving loan fund" means each of the revolving loan funds defined in Section
             45      63A-3-205 .
             46          (2) An internal service fund agency is not subject to this section with respect to its
             47      administration of a revolving loan fund.
             48          (3) (a) An internal service fund agency may not bill another agency for services that it
             49      provides for each internal service fund operated by the agency, unless the Legislature has:
             50          [(a)] (i) reviewed and approved [the] each internal service [fund agency's] fund's
             51      budget request;
             52          [(b)] (ii) reviewed and approved [the] each internal service [fund agency's] fund's rates,
             53      fees, and other amounts that it charges those who use its services and included those rates, fees,
             54      and amounts in an appropriation act;
             55          [(c)] (iii) approved the number of full-time, permanent positions of [the] each internal
             56      service fund [agency] as part of the annual appropriation process; [and]
             57          (iv) H. [ approved ] reviewed .H the number of full-time equivalent contract employees
             57a      of each internal
             58      service fund as part of the annual appropriation process; and


             59          [(d)] (v) appropriated to the internal service fund agency [the] each internal service
             60      fund's estimated revenue based upon the rates and fee structure that are the basis for the
             61      estimate.
             62          (b) If an internal service fund agency operates more than one internal service fund
             63      within the internal service fund agency, the internal service fund agency shall comply with the
             64      review and approval requirements under Subsection (3)(a) for each internal service fund.
             65          (c) If an internal service fund agency operates an internal service fund and does not get
             66      the approvals required under Subsection (3)(a) or (4)(b), the internal service fund agency shall
             67      rebate all rates, fees, and amounts collected to those who use the services for the rates, fees,
             68      and amounts collected that were not approved under Subsection (3)(a) or (4)(b).
             69          (4) (a) Except as provided in Subsection (4)(b), an internal service fund agency may
             70      not charge rates, fees, and other amounts that exceed the rates, fees, and amounts established
             71      by the Legislature in the appropriations act.
             72          (b) (i) An internal service fund agency that begins a new service or introduces a new
             73      product between annual general sessions of the Legislature may H. , for that service or product:
             73a          (A) .H establish and charge an interim
             74      rate or amount H. [ for that service or product ] ;
             74a          (B) acquire contract employees, if necessary; or    
             74b          (C) do a combination of Subsections (4)(b)(i)(A) and (B) .H .
             75          (ii) The internal service fund agency shall H. [ submit that ] :
             75a          (A) submit the .H interim rate or amount H. under Subsection (4)(b)(i) .H to the
             76      Legislature for approval at the next annual general session H. ; and
             76a          (B) report any change in the number of contract employees under Subsection (4)(b)(i) to
             76b      the appropriate legislative appropriations subcommittee for review .H .
             77          (5) The internal service fund agency budget request shall separately identify the capital
             78      needs and the related capital budget.
             79          (6) In the fiscal year that the accounting change referred to in Subsection 51-5-6 (2) is
             80      implemented by the Division of Finance, the Division of Finance shall transfer equity created
             81      by that accounting change to any internal service fund agency up to the amount needed to
             82      eliminate any long-term debt and deficit working capital in the fund.
             83          (7) No new internal service fund agency may be established unless reviewed and
             84      approved by the Legislature.
             85          (8) (a) Except as provided in Subsection (8)(f), an internal service fund agency may not
             86      acquire capital assets unless legislative approval for acquisition of the assets has been included
             87      in an appropriations act for the internal service fund agency.
             88          (b) An internal service fund agency may not acquire capital assets after the transfer
             89      mandated by Subsection (6) has occurred unless the internal service fund agency has adequate


             90      working capital.
             91          (c) The internal service fund agency shall provide working capital from the following
             92      sources in the following order:
             93          (i) first, from operating revenues to the extent allowed by state rules and federal
             94      regulations;
             95          (ii) second, from long-term debt, subject to the restrictions of this section; and
             96          (iii) last, from an appropriation.
             97          (d) (i) To eliminate negative working capital, an internal service fund agency may incur
             98      long-term debt from the General Fund or Special Revenue Funds to acquire capital assets.
             99          (ii) The internal service fund agency shall repay all long-term debt borrowed from the
             100      General Fund or Special Revenue Funds by making regular payments over the useful life of the
             101      asset according to the asset's depreciation schedule.
             102          (e) (i) The Division of Finance may not allow an internal service fund agency's
             103      borrowing to exceed 90% of the net book value of the agency's capital assets as of the end of
             104      the fiscal year.
             105          (ii) If an internal service fund agency wishes to purchase authorized assets or enter into
             106      equipment leases that would increase its borrowing beyond 90% of the net book value of the
             107      agency's capital assets, the agency may purchase those assets only with money appropriated
             108      from another fund, such as the General Fund or a special revenue fund.
             109          (f) (i) Except as provided in Subsection (8)(f)(ii), capital assets acquired through
             110      agency appropriation may not be transferred to any internal service fund agency without
             111      legislative approval.
             112          (ii) Vehicles acquired by agencies from appropriated funds or money appropriated to
             113      agencies to be used for vehicle purchases may be transferred to the Division of Fleet
             114      Operations and, when transferred, become part of the Fleet Operations Internal Service Fund.
             115          (iii) Vehicles acquired with funding from sources other than state appropriations or
             116      acquired through the federal surplus property donation program may be transferred to the
             117      Division of Fleet Operations and, when transferred, become part of the Fleet Operations
             118      Internal Service Fund.
             119          (iv) Unless otherwise approved by the Legislature, vehicles acquired under Subsection
             120      (8)(f)(iii) shall be accounted for as "do not replace" vehicles.


             121          (9) The Division of Finance shall adopt policies and procedures related to the
             122      accounting for assets, liabilities, equity, revenues, expenditures, and transfers of internal
             123      service funds agencies.
             124          Section 2. Effective date.
             125          This bill takes effect on July 1, 2014.




Legislative Review Note
    as of 2-7-14 12:29 PM


Office of Legislative Research and General Counsel


[Bill Documents][Bills Directory]