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H.B. 193 Enrolled

             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 review for the number of full-time equivalent contract
             18      employees of each internal service fund as part of the annual appropriation process;
             19          .    authorizes an internal service fund agency that begins a new service or introduces a
             20      new product between annual general sessions of the Legislature to acquire contract
             21      employees, if necessary, for that service or product;
             22          .    requires an internal service fund agency to report any change in the number of
             23      contract employees to the appropriate legislative appropriations subcommittee for
             24      review;
             25          .    provides that if an internal service fund agency operates an internal service fund and
             26      does not get the required legislative approvals, the internal service fund agency shall
             27      rebate all rates, fees, and amounts collected to those who use the services for the
             28      rates, fees, and amounts collected that were not approved; and
             29          .    makes conforming and technical changes.


             30      Money Appropriated in this Bill:
             31          None
             32      Other Special Clauses:
             33          This bill takes effect on July 1, 2014.
             34      Utah Code Sections Affected:
             35      AMENDS:
             36           63J-1-410 , as renumbered and amended by Laws of Utah 2009, Chapter 183
             37     
             38      Be it enacted by the Legislature of the state of Utah:
             39          Section 1. Section 63J-1-410 is amended to read:
             40           63J-1-410. Internal service funds -- Governance and review.
             41          (1) For purposes of this section:
             42          (a) "Agency" means a department, division, office, bureau, or other unit of state
             43      government, and includes any subdivision of an agency.
             44          (b) "Do not replace vehicles" means a vehicle accounted for in the Division of Fleet
             45      Operations for which charges to an agency for its use do not include amounts to cover
             46      depreciation or to accumulate assets to replace the vehicle at the end of its useful life.
             47          (c) "Internal service fund agency" means an agency that provides goods or services to
             48      other agencies of state government or to other governmental units on a capital maintenance and
             49      cost reimbursement basis, and which recovers costs through interagency billings.
             50          (d) "Revolving loan fund" means each of the revolving loan funds defined in Section
             51      63A-3-205 .
             52          (2) An internal service fund agency is not subject to this section with respect to its
             53      administration of a revolving loan fund.
             54          (3) (a) An internal service fund agency may not bill another agency for services that it
             55      provides for each internal service fund operated by the agency, unless the Legislature has:
             56          [(a)] (i) reviewed and approved [the] each internal service [fund agency's] fund's
             57      budget request;


             58          [(b)] (ii) reviewed and approved [the] each internal service [fund agency's] fund's rates,
             59      fees, and other amounts that it charges those who use its services and included those rates, fees,
             60      and amounts in an appropriation act;
             61          [(c)] (iii) approved the number of full-time, permanent positions of [the] each internal
             62      service fund [agency] as part of the annual appropriation process; [and]
             63          (iv) review the number of full-time equivalent contract employees of each internal
             64      service fund as part of the annual appropriation process; and
             65          [(d)] (v) appropriated to the internal service fund agency [the] each internal service
             66      fund's estimated revenue based upon the rates and fee structure that are the basis for the
             67      estimate.
             68          (b) If an internal service fund agency operates more than one internal service fund
             69      within the internal service fund agency, the internal service fund agency shall comply with the
             70      review and approval requirements under Subsection (3)(a) for each internal service fund.
             71          (c) If an internal service fund agency operates an internal service fund and does not get
             72      the approvals required under Subsection (3)(a) or (4)(b), the internal service fund agency shall
             73      rebate all rates, fees, and amounts collected to those who use the services for the rates, fees,
             74      and amounts collected that were not approved under Subsection (3)(a) or (4)(b).
             75          (4) (a) Except as provided in Subsection (4)(b), an internal service fund agency may
             76      not charge rates, fees, and other amounts that exceed the rates, fees, and amounts established
             77      by the Legislature in the appropriations act.
             78          (b) (i) An internal service fund agency that begins a new service or introduces a new
             79      product between annual general sessions of the Legislature may, for that service or product:
             80          (A) establish and charge an interim rate or amount [for that service or product.];
             81          (B) acquire contract employees, if necessary; or
             82          (C) do a combination of Subsections (4)(b)(i)(A) and (B).
             83          (ii) The internal service fund agency shall [submit that]:
             84          (A) submit the interim rate or amount under Subsection (4)(b)(i) to the Legislature for
             85      approval at the next annual general session[.]; and


             86          (B) report any change in the number of contract employees under Subsection (4)(b)(i)
             87      to the appropriate legislative appropriations subcommittee for review.
             88          (5) The internal service fund agency budget request shall separately identify the capital
             89      needs and the related capital budget.
             90          (6) In the fiscal year that the accounting change referred to in Subsection 51-5-6 (2) is
             91      implemented by the Division of Finance, the Division of Finance shall transfer equity created
             92      by that accounting change to any internal service fund agency up to the amount needed to
             93      eliminate any long-term debt and deficit working capital in the fund.
             94          (7) No new internal service fund agency may be established unless reviewed and
             95      approved by the Legislature.
             96          (8) (a) Except as provided in Subsection (8)(f), an internal service fund agency may not
             97      acquire capital assets unless legislative approval for acquisition of the assets has been included
             98      in an appropriations act for the internal service fund agency.
             99          (b) An internal service fund agency may not acquire capital assets after the transfer
             100      mandated by Subsection (6) has occurred unless the internal service fund agency has adequate
             101      working capital.
             102          (c) The internal service fund agency shall provide working capital from the following
             103      sources in the following order:
             104          (i) first, from operating revenues to the extent allowed by state rules and federal
             105      regulations;
             106          (ii) second, from long-term debt, subject to the restrictions of this section; and
             107          (iii) last, from an appropriation.
             108          (d) (i) To eliminate negative working capital, an internal service fund agency may incur
             109      long-term debt from the General Fund or Special Revenue Funds to acquire capital assets.
             110          (ii) The internal service fund agency shall repay all long-term debt borrowed from the
             111      General Fund or Special Revenue Funds by making regular payments over the useful life of the
             112      asset according to the asset's depreciation schedule.
             113          (e) (i) The Division of Finance may not allow an internal service fund agency's


             114      borrowing to exceed 90% of the net book value of the agency's capital assets as of the end of
             115      the fiscal year.
             116          (ii) If an internal service fund agency wishes to purchase authorized assets or enter into
             117      equipment leases that would increase its borrowing beyond 90% of the net book value of the
             118      agency's capital assets, the agency may purchase those assets only with money appropriated
             119      from another fund, such as the General Fund or a special revenue fund.
             120          (f) (i) Except as provided in Subsection (8)(f)(ii), capital assets acquired through
             121      agency appropriation may not be transferred to any internal service fund agency without
             122      legislative approval.
             123          (ii) Vehicles acquired by agencies from appropriated funds or money appropriated to
             124      agencies to be used for vehicle purchases may be transferred to the Division of Fleet
             125      Operations and, when transferred, become part of the Fleet Operations Internal Service Fund.
             126          (iii) Vehicles acquired with funding from sources other than state appropriations or
             127      acquired through the federal surplus property donation program may be transferred to the
             128      Division of Fleet Operations and, when transferred, become part of the Fleet Operations
             129      Internal Service Fund.
             130          (iv) Unless otherwise approved by the Legislature, vehicles acquired under Subsection
             131      (8)(f)(iii) shall be accounted for as "do not replace" vehicles.
             132          (9) The Division of Finance shall adopt policies and procedures related to the
             133      accounting for assets, liabilities, equity, revenues, expenditures, and transfers of internal
             134      service funds agencies.
             135          Section 2. Effective date.
             136          This bill takes effect on July 1, 2014.


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