S.B. 172

This document includes Senate Committee Amendments incorporated into the bill on Tue, Feb 11, 2014 at 10:42 AM by lpoole. -->             


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CAPITAL IMPROVEMENT AND CAPITAL DEVELOPMENT

             2     
PROJECT AMENDMENTS

             3     
2014 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Chief Sponsor: Wayne A. Harper

             6     
House Sponsor: Gage Froerer

             7     

             8      LONG TITLE
             9      General Description:
             10          This bill modifies the Utah Administrative Services Code by amending provisions
             11      relating to capital improvement and capital development projects.
             12      Highlighted Provisions:
             13          This bill:
             14          .    adds infrastructure to the definition of replacement cost of existing state facilities;
             15          .    adds infrastructure to the prohibition that the Legislature may not fund the design or
             16      construction of any new capital development projects until the Legislature has
             17      appropriated a certain percentage of the replacement cost of existing state facilities
             18      and infrastructure to capital improvements;
             18a      S. . prohibits the Legislature from funding the programming, design, and construction of a
             18b      new building or facility in phases over more than one year unless the Legislature has approved
             18c      each phase of the funding for the construction of the new building or facility by the affirmative
             18d      vote of two-thirds of all the members elected to each house; .S
             19          .    repeals the July 1, 2014, sunset date on the provision requiring the State Building
             20      Board, in prioritizing capital improvements, to allocate at least 80% of the funds the
             21      Legislature appropriates for certain capital improvements;
             22          .    repeals the July 1, 2014, sunset date on the provision requiring the State Building
             23      Board, in prioritizing capital improvements, to allocate no more than 20% of the
             24      funds the Legislature appropriates for capital improvements to remodeling and


            
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     aesthetic upgrades or the construction of an addition to an existing building or
             26      facility; and
             27          .    makes technical corrections.



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             28
     Money Appropriated in this Bill:
             29          None
             30      Other Special Clauses:
             31          None
             32      Utah Code Sections Affected:
             33      AMENDS:
             34          63A-5-104, as last amended by Laws of Utah 2013, Chapters 250 and 409
             35          63I-1-263, as last amended by Laws of Utah 2013, Chapters 28, 62, 101, 167, 250, and
             36      413
             37     

             38      Be it enacted by the Legislature of the state of Utah:
             39          Section 1. Section 63A-5-104 is amended to read:
             40           63A-5-104. Definitions -- Capital development and capital improvement process
             41      -- Approval requirements -- Limitations on new projects -- Emergencies.
             42          (1) As used in this section:
             43          (a) "Capital developments" means a:
             44          (i) remodeling, site, or utility project with a total cost of $2,500,000 or more;
             45          (ii) new facility with a construction cost of $500,000 or more; or
             46          (iii) purchase of real property where an appropriation is requested to fund the purchase.
             47          (b) "Capital improvements" means a:
             48          (i) remodeling, alteration, replacement, or repair project with a total cost of less than
             49      $2,500,000;
             50          (ii) site and utility improvement with a total cost of less than $2,500,000; or
             51          (iii) new facility with a total construction cost of less than $500,000.
             52          (c) (i) "New facility" means the construction of a new building on state property
             53      regardless of funding source.
             54          (ii) "New facility" includes:
             55          (A) an addition to an existing building; and
             56          (B) the enclosure of space that was not previously fully enclosed.
             57          (iii) "New facility" does not mean:
             58          (A) the replacement of state-owned space that is demolished or that is otherwise



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



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         (d) Legislative approval is not required for:
             91          (i) the renovation, remodeling, or retrofitting of an existing facility with nonstate funds
             92      that has been approved by the State Building Board;
             93          (ii) a facility to be built with nonstate funds and owned by nonstate entities within
             94      research park areas at the University of Utah and Utah State University;
             95          (iii) a facility to be built at This is the Place State Park by This is the Place Foundation
             96      with funds of the foundation, including grant money from the state, or with donated services or
             97      materials;
             98          (iv) a capital project that:
             99          (A) is funded by:
             100          (I) the Uintah Basin Revitalization Fund; or
             101          (II) the Navajo Revitalization Fund; and
             102          (B) does not provide a new facility for a state agency or higher education institution; or
             103          (v) a capital project on school and institutional trust lands that is funded by the School
             104      and Institutional Trust Lands Administration from the Land Grant Management Fund and that
             105      does not fund construction of a new facility for a state agency or higher education institution.
             106          (e) (i) Legislative approval is not required for capital development projects to be built
             107      for the Department of Transportation:
             108          (A) as a result of an exchange of real property under Section 72-5-111 ; or
             109          (B) as a result of a sale or exchange of real property from a maintenance facility if the
             110      real property is exchanged for, or the proceeds from the sale of the real property are used for,
             111      another maintenance facility, including improvements for a maintenance facility and real
             112      property.
             113          (ii) When the Department of Transportation approves a sale or exchange under
             114      Subsection (3)(e), it shall notify the president of the Senate, the speaker of the House, and the
             115      cochairs of the Infrastructure and General Government Appropriations Subcommittee of the
             116      Legislature's Joint Appropriation Committee about any new facilities to be built or improved
             117      under this exemption.
             118          (4) (a) (i) The State Building Board, on behalf of all state agencies, commissions,
             119      departments, and institutions shall by January 15 of each year, submit a list of anticipated
             120      capital improvement requirements to the Legislature for review and approval.



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         (ii) The list shall identify:
             122          (A) a single project that costs more than $1,000,000;
             123          (B) multiple projects within a single building or facility that collectively cost more than
             124      $1,000,000;
             125          (C) a single project that will be constructed over multiple years with a yearly cost of
             126      $1,000,000 or more and an aggregate cost of more than $2,500,000;
             127          (D) multiple projects within a single building or facility with a yearly cost of
             128      $1,000,000 or more and an aggregate cost of more than $2,500,000;
             129          (E) a single project previously reported to the Legislature as a capital improvement
             130      project under $1,000,000 that, because of an increase in costs or scope of work, will now cost
             131      more than $1,000,000; and
             132          (F) multiple projects within a single building or facility previously reported to the
             133      Legislature as a capital improvement project under $1,000,000 that, because of an increase in
             134      costs or scope of work, will now cost more than $1,000,000.
             135          (b) Unless otherwise directed by the Legislature, the State Building Board shall
             136      prioritize capital improvements from the list submitted to the Legislature up to the level of
             137      appropriation made by the Legislature.
             138          (c) In prioritizing capital improvements, the State Building Board shall consider the
             139      results of facility evaluations completed by an architect/engineer as stipulated by the building
             140      board's facilities maintenance standards.
             141          (d) Beginning on July 1, 2013, in prioritizing capital improvements, the State Building
             142      Board shall allocate at least 80% of the funds that the Legislature appropriates for capital
             143      improvements to:
             144          (i) projects that address:
             145          (A) a structural issue;
             146          (B) fire safety;
             147          (C) a code violation; or
             148          (D) any issue that impacts health and safety;
             149          (ii) projects that upgrade:
             150          (A) an HVAC system;
             151          (B) an electrical system;



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         (C) essential equipment;
             153          (D) an essential building component; or
             154          (E) infrastructure, including a utility tunnel, water line, gas line, sewer line, roof,
             155      parking lot, or road; or
             156          (iii) projects that demolish and replace an existing building that is in extensive
             157      disrepair and cannot be fixed by repair or maintenance.
             158          (e) Beginning on July 1, 2013, in prioritizing capital improvements, the State Building
             159      Board shall allocate no more than 20% of the funds that the Legislature appropriates for capital
             160      improvements to:
             161          (i) remodeling and aesthetic upgrades to meet state programmatic needs; or
             162          (ii) construct an addition to an existing building or facility.
             163          (f) The State Building Board may require an entity that benefits from a capital
             164      improvement project to repay the capital improvement funds from savings that result from the
             165      project.
             166          (g) The State Building Board may provide capital improvement funding to a single
             167      project, or to multiple projects within a single building or facility, even if the total cost of the
             168      project or multiple projects is $2,500,000 or more, if:
             169          (i) the capital improvement project or multiple projects require more than one year to
             170      complete; and
             171          (ii) the Legislature has affirmatively authorized the capital improvement project or
             172      multiple projects to be funded in phases.
             173          (5) The Legislature may authorize:
             174          (a) the total square feet to be occupied by each state agency; and
             175          (b) the total square feet and total cost of lease space for each agency.
             176          (6) If construction of a new building or facility will be paid for by nonstate funds, but
             177      will require an immediate or future increase in state funding for operations and maintenance or
             178      for capital improvements, the Legislature may not authorize the new building or facility until
             179      the Legislature appropriates funds for:
             180          (a) the portion of operations and maintenance, if any, that will require an immediate or
             181      future increase in state funding; and
             182          (b) the portion of capital improvements, if any, that will require an immediate or future



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     increase in state funding.
             184          (7) (a) Except as provided in Subsection (7)(b) or (c), the Legislature may not fund the
             185      design or construction of any new capital development projects, except to complete the funding
             186      of projects for which partial funding has been previously provided, until the Legislature has
             187      appropriated 1.1% of the replacement cost of existing state facilities and infrastructure to
             188      capital improvements.
             189          (b) (i) As used in this Subsection (7)(b):
             190          (A) "Education Fund budget deficit" is as defined in Section 63J-1-312 ; and
             191          (B) "General Fund budget deficit" is as defined in Section 63J-1-312 .
             192          (ii) If the Legislature determines that an Education Fund budget deficit or a General
             193      Fund budget deficit exists, the Legislature may, in eliminating the deficit, reduce the amount
             194      appropriated to capital improvements to 0.9% of the replacement cost of state buildings and
             195      infrastructure.
             196          (c) (i) The requirements under Subsections (6)(a) and (b) do not apply to the 2008-09,
             197      2009-10, 2010-11, 2011-12, and 2012-13 fiscal years.
             198          (ii) For the 2013-14 fiscal year, the amount appropriated to capital improvements shall
             199      be reduced to 0.9% of the replacement cost of state facilities.
             199a      S. (8) It is the policy of the Legislature that a new building or facility be approved and
             199b      funded for construction in a single budget action, therefore the Legislature may not fund the
             199c      programming, design, and construction of a new building or facility in phases over more than
             199d      one year unless the Legislature has approved each phase of the funding for the construction of
             199e      the new building or facility by the affirmative vote of two-thirds of all the members elected to
             199f      each house. .S
             200           S. [ (8) ] (9) .S (a) If, after approval of capital development and capital improvement
             200a      priorities by
             201      the Legislature under this section, emergencies arise that create unforeseen critical capital
             202      improvement projects, the State Building Board may, notwithstanding the requirements of Title
             203      63J, Chapter 1, Budgetary Procedures Act, reallocate capital improvement funds to address
             204      those projects.
             205          (b) The State Building Board shall report any changes it makes in capital improvement
             206      allocations approved by the Legislature to:
             207          (i) the Office of Legislative Fiscal Analyst within 30 days of the reallocation; and
             208          (ii) the Legislature at its next annual general session.
             209           S. [ (9) ] (10) .S (a) The State Building Board may adopt a rule allocating to


            
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     institutions and
             210      agencies their proportionate share of capital improvement funding.
             211          (b) The State Building Board shall ensure that the rule:
             212          (i) reserves funds for the Division of Facilities Construction and Management for
             213      emergency projects; and



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         (ii) allows the delegation of projects to some institutions and agencies with the
             215      requirement that a report of expenditures will be filed annually with the Division of Facilities
             216      Construction and Management and appropriate governing bodies.
             217           S. [ (10) ] (11) .S It is the intent of the Legislature that in funding capital improvement
             217a      requirements
             218      under this section the General Fund be considered as a funding source for at least half of those
             219      costs.
             220           S. [ (11) ] (12) .S (a) Subject to Subsection S. [ (11) ] (12) .S (b), at least 80% of the
             220a      state funds appropriated for
             221      capital improvements shall be used for maintenance or repair of the existing building or
             222      facility.
             223          (b) The State Building Board may modify the requirement described in Subsection
             224      S. [ (11) ] (12) .S (a) if the State Building Board determines that a different allocation of capital
             225      improvements funds is in the best interest of the state.
             226          Section 2. Section 63I-1-263 is amended to read:
             227           63I-1-263. Repeal dates, Titles 63A to 63M.
             228          (1) Section 63A-4-204 , authorizing the Risk Management Fund to provide coverage to
             229      any public school district which chooses to participate, is repealed July 1, 2016.
             230          [(2) Subsections 63A-5-104 (4)(d) and (e) are repealed on July 1, 2014.]
             231          [(3)] (2) Section 63A-5-603 , State Facility Energy Efficiency Fund, is repealed July 1,
             232      2016.
             233          [(4)] (3) Title 63C, Chapter 4a, Constitutional and Federalism Defense Act, is repealed
             234      July 1, 2018.
             235          [(5)] (4) Section 53B-24-402 , rural residency training program, is repealed July 1,
             236      2015.
             237          [(6)] (5) Title 63C, Chapter 13, Prison Relocation and Development Authority Act, is
             238      repealed July 1, 2014.
             239          [(7)] (6) Title 63C, Chapter 14, Federal Funds Commission, is repealed July 1, 2018.
             240          [(8)] (7) Subsection 63G-6a-1402 (7) authorizing certain transportation agencies to
             241      award a contract for a design-build transportation project in certain circumstances, is repealed
             242      July 1, 2015.
             243          [(9)] (8) Title 63H, Chapter 4, Heber Valley Historic Railroad Authority, is repealed
             244      July 1, 2020.



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         [(10)] (9) The Resource Development Coordinating Committee, created in Section
             246      63J-4-501 , is repealed July 1, 2015.
             247          [(11)] (10) Title 63M, Chapter 1, Part 4, Enterprise Zone Act, is repealed July 1, 2018.
             248          [(12)] (11) (a) Title 63M, Chapter 1, Part 11, Recycling Market Development Zone
             249      Act, is repealed January 1, 2021.
             250          (b) Subject to Subsection [(12)] (11)(c), Sections 59-7-610 and 59-10-1007 regarding
             251      tax credits for certain persons in recycling market development zones, are repealed for taxable
             252      years beginning on or after January 1, 2021.
             253          (c) A person may not claim a tax credit under Section 59-7-610 or 59-10-1007 :
             254          (i) for the purchase price of machinery or equipment described in Section 59-7-610 or
             255      59-10-1007 , if the machinery or equipment is purchased on or after January 1, 2021; or
             256          (ii) for an expenditure described in Subsection 59-7-610 (1)(b) or 59-10-1007 (1)(b), if
             257      the expenditure is made on or after January 1, 2021.
             258          (d) Notwithstanding Subsections [(12)] (11)(b) and (c), a person may carry forward a
             259      tax credit in accordance with Section 59-7-610 or 59-10-1007 if:
             260          (i) the person is entitled to a tax credit under Section 59-7-610 or 59-10-1007 ; and
             261          (ii) (A) for the purchase price of machinery or equipment described in Section
             262      59-7-610 or 59-10-1007 , the machinery or equipment is purchased on or before December 31,
             263      2020; or
             264          (B) for an expenditure described in Subsection 59-7-610 (1)(b) or 59-10-1007 (1)(b), the
             265      expenditure is made on or before December 31, 2020.
             266          [(13)] (12) (a) Section 63M-1-2507 , Health Care Compact is repealed on July 1, 2014.
             267          (b) (i) The Legislature shall, before reauthorizing the Health Care Compact:
             268          (A) direct the Health System Reform Task Force to evaluate the issues listed in
             269      Subsection [(13)] (12)(b)(ii), and by January 1, 2013, develop and recommend criteria for the
             270      Legislature to use to negotiate the terms of the Health Care Compact; and
             271          (B) prior to July 1, 2014, seek amendments to the Health Care Compact among the
             272      member states that the Legislature determines are appropriate after considering the
             273      recommendations of the Health System Reform Task Force.
             274          (ii) The Health System Reform Task Force shall evaluate and develop criteria for the
             275      Legislature regarding:



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         (A) the impact of the Supreme Court ruling on the Affordable Care Act;
             277          (B) whether Utah is likely to be required to implement any part of the Affordable Care
             278      Act prior to negotiating the compact with the federal government, such as Medicaid expansion
             279      in 2014;
             280          (C) whether the compact's current funding formula, based on adjusted 2010 state
             281      expenditures, is the best formula for Utah and other state compact members to use for
             282      establishing the block grants from the federal government;
             283          (D) whether the compact's calculation of current year inflation adjustment factor,
             284      without consideration of the regional medical inflation rate in the current year, is adequate to
             285      protect the state from increased costs associated with administering a state based Medicaid and
             286      a state based Medicare program;
             287          (E) whether the state has the flexibility it needs under the compact to implement and
             288      fund state based initiatives, or whether the compact requires uniformity across member states
             289      that does not benefit Utah;
             290          (F) whether the state has the option under the compact to refuse to take over the federal
             291      Medicare program;
             292          (G) whether a state based Medicare program would provide better benefits to the
             293      elderly and disabled citizens of the state than a federally run Medicare program;
             294          (H) whether the state has the infrastructure necessary to implement and administer a
             295      better state based Medicare program;
             296          (I) whether the compact appropriately delegates policy decisions between the
             297      legislative and executive branches of government regarding the development and
             298      implementation of the compact with other states and the federal government; and
             299          (J) the impact on public health activities, including communicable disease surveillance
             300      and epidemiology.
             301          [(14)] (13) The Crime Victim Reparations and Assistance Board, created in Section
             302      63M-7-504 , is repealed July 1, 2017.
             303          [(15)] (14) Title 63M, Chapter 11, Utah Commission on Aging, is repealed July 1,
             304      2017.



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