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7 LONG TITLE
8 General Description:
9 This bill enacts and amends provisions related to capital facilities of institutions of
10 higher education.
11 Highlighted Provisions:
12 This bill:
13 ▸ creates the Higher Education Capital Developments Account;
14 ▸ enacts provisions related to deposits into and use of funds in the account;
15 ▸ enacts provisions related to the State Board of Regents' administration of funds in
16 the account;
17 ▸ enacts provisions related to how an institution of higher education may use funds
18 from the account;
19 ▸ enacts procedures for how an institution of higher education may obtain legislative
20 approval for a capital development project;
21 ▸ amends provisions related to capital developments by institutions of higher
22 education;
23 ▸ amends provisions related to the capital development and capital improvement
24 process;
25 ▸ amends provisions related to the statewide contingency reserve; and
26 ▸ makes technical and conforming changes.
27 Money Appropriated in this Bill:
28 None
29 Other Special Clauses:
30 This bill provides a special effective date.
31 This bill provides a coordination clause.
32 Utah Code Sections Affected:
33 AMENDS:
34 53B-7-101, as last amended by Laws of Utah 2015, Chapter 361
35 53B-20-104, as last amended by Laws of Utah 2012, Chapter 242
36 63A-5-104, as last amended by Laws of Utah 2015, Chapter 297
37 63A-5-209, as last amended by Laws of Utah 2010, Chapter 163
38 ENACTS:
39 53B-7-701, Utah Code Annotated 1953
40 53B-7-702, Utah Code Annotated 1953
41 53B-7-703, Utah Code Annotated 1953
42 53B-7-704, Utah Code Annotated 1953
43 53B-7-705, Utah Code Annotated 1953
44 53B-7-706, Utah Code Annotated 1953
45 63J-1-316, Utah Code Annotated 1953
46 Utah Code Sections Affected by Coordination Clause:
47 63A-5-104, as last amended by Laws of Utah 2015, Chapter 297
48
49 Be it enacted by the Legislature of the state of Utah:
50 Section 1. Section 53B-7-101 is amended to read:
51 53B-7-101. Combined requests for appropriations -- Board review of operating
52 budgets -- Submission of budgets -- Recommendations -- Hearing request --
53 Appropriation formulas -- Allocations -- Dedicated credits -- Financial affairs.
54 (1) As used in this section:
55 (a) (i) "Higher education institution" or "institution" means an institution of higher
56 education listed in Section 53B-1-102.
57 (ii) "Higher education institution" or "institution" does not include the Utah College of
58 Applied Technology.
59 (b) "Research university" means the University of Utah or Utah State University.
60 (2) (a) The board shall recommend a combined appropriation for the operating budgets
61 of higher education institutions for inclusion in a state appropriations act.
62 (b) The board's combined budget recommendation shall include:
63 (i) employee compensation;
64 (ii) mandatory costs, including building operations and maintenance, fuel, and power;
65 (iii) mission based funding described in Subsection (3);
66 (iv) performance funding described in Subsection (4);
67 (v) statewide and institutional priorities, including scholarships, financial aid, and
68 technology infrastructure; and
69 (vi) unfunded historic growth.
70 (c) The board's recommendations shall be available for presentation to the governor
71 and to the Legislature at least 30 days prior to the convening of the Legislature, and shall
72 include schedules showing the recommended amounts for each institution, including separately
73 funded programs or divisions.
74 (d) The recommended appropriations shall be determined by the board only after it has
75 reviewed the proposed institutional operating budgets, and has consulted with the various
76 institutions and board staff in order to make appropriate adjustments.
77 (3) (a) The board shall establish mission based funding.
78 (b) Mission based funding shall include:
79 (i) enrollment growth; and
80 (ii) up to three strategic priorities.
81 (c) The strategic priorities described in Subsection (3)(b)(ii) shall be:
82 (i) approved by the board; and
83 (ii) designed to improve the availability, effectiveness, or quality of higher education in
84 the state.
85 (d) Concurrent with recommending mission based funding, the board shall also
86 recommend to the Legislature ways to address funding any inequities for institutions as
87 compared to institutions with similar missions.
88 (4) (a) The board shall establish performance funding.
89 (b) Performance funding shall include metrics approved by the board, including:
90 (i) degrees and certificates granted;
91 (ii) services provided to traditionally underserved populations;
92 (iii) responsiveness to workforce needs;
93 (iv) institutional efficiency; and
94 (v) for a research university, graduate research metrics.
95 (c) The board shall:
96 (i) award performance funding appropriated by the Legislature to institutions based on
97 the institution's success in meeting the metrics described in Subsection (4)(b); and
98 (ii) reallocate funding that is not awarded to an institution under Subsection (4)(c)(i)
99 for distribution to other institutions that meet the metrics described in Subsection (4)(b).
100 (5) (a) Institutional operating budgets shall be submitted to the board at least 90 days
101 prior to the convening of the Legislature in accordance with procedures established by the
102 board.
103 (b) [
104 capital facilities and land purchases shall be submitted in accordance with procedures
105 prescribed by the State Building Board.
106 (c) Funding requests pertaining to capital developments shall be submitted in
107 accordance with procedures described in Part 7, Capital Developments.
108 (6) (a) The budget recommendations of the board shall be accompanied by full
109 explanations and supporting data.
110 (b) The appropriations recommended by the board shall be made with the dual
111 objective of:
112 (i) justifying for higher educational institutions appropriations consistent with their
113 needs, and consistent with the financial ability of the state; and
114 (ii) determining an equitable distribution of funds among the respective institutions in
115 accordance with the aims and objectives of the statewide master plan for higher education.
116 (7) (a) The board shall request a hearing with the governor on the recommended
117 appropriations.
118 (b) After the governor delivers his budget message to the Legislature, the board shall
119 request hearings on the recommended appropriations with the appropriate committees of the
120 Legislature.
121 (c) If either the total amount of the state appropriations or its allocation among the
122 institutions as proposed by the Legislature or its committees is substantially different from the
123 recommendations of the board, the board may request further hearings with the Legislature or
124 its appropriate committees to reconsider both the total amount and the allocation.
125 (8) The board may devise, establish, periodically review, and revise formulas for its
126 use and for the use of the governor and the committees of the Legislature in making
127 appropriation recommendations.
128 (9) (a) The board shall recommend to each session of the Legislature the minimum
129 tuitions, resident and nonresident, for each institution which it considers necessary to
130 implement the budget recommendations.
131 (b) The board may fix the tuition, fees, and charges for each institution at levels it finds
132 necessary to meet budget requirements.
133 (10) (a) Money allocated to each institution by legislative appropriation may be
134 budgeted in accordance with institutional work programs approved by the board, provided that
135 the expenditures funded by appropriations for each institution are kept within the
136 appropriations for the applicable period.
137 (b) A president of an institution shall:
138 (i) establish initiatives for the president's institution each year that are:
139 (A) aligned with the strategic priorities described in Subsection (3); and
140 (B) consistent with the institution's mission and role; and
141 (ii) allocate the institution's mission based funding to the initiatives.
142 (11) The dedicated credits, including revenues derived from tuitions, fees, federal
143 grants, and proceeds from sales received by the institutions are appropriated to the respective
144 institutions [
145 (12) Each institution may do its own purchasing, issue its own payrolls, and handle its
146 own financial affairs under the general supervision of the board.
147 (13) (a) If the Legislature appropriates money in accordance with this section, it shall
148 be distributed to the board and higher education institutions to fund the items described in
149 Subsection (2)(b).
150 (b) During each general session of the Legislature following a fiscal year in which the
151 Legislature provides an appropriation for mission based funding or performance funding, the
152 board and institutions shall report to the Legislature's Higher Education Appropriations
153 Subcommittee on the use of the previous year's mission based funding and performance
154 funding, including performance outcomes relating to the strategic initiatives approved by the
155 board.
156 Section 2. Section 53B-7-701 is enacted to read:
157
158 53B-7-701. Title.
159 This part is known as "Capital Developments."
160 Section 3. Section 53B-7-702 is enacted to read:
161 53B-7-702. Definitions.
162 As used in this part:
163 (1) "Account" means the Higher Education Capital Developments Account created in
164 Section 63J-1-316.
165 (2) "Capital developments" means the same as that term is defined in Section
166 63A-5-104.
167 (3) "Institution" means:
168 (a) the University of Utah;
169 (b) Utah State University;
170 (c) Southern Utah University;
171 (d) Weber State University;
172 (e) Snow College;
173 (f) Dixie State University;
174 (g) Utah Valley University; or
175 (h) Salt Lake Community College.
176 (4) "Institution's allocation" means the total amount of funds an institution is allocated
177 under Subsection 53B-7-703(3).
178 (5) "Institution's award" means the amount of funds an institution is actually awarded
179 from the institution's allocation.
180 Section 4. Section 53B-7-703 is enacted to read:
181 53B-7-703. Board administration of account -- Improvement plans -- Requests for
182 additional funds .
183 (1) The board shall administer funds in the account in accordance with this part.
184 (2) The board may only distribute the increase described in Subsection 63J-1-316(3)(a)
185 to an institution to use for operations and maintenance costs for a capital development project
186 that has been fully constructed at the time of the distribution.
187 (3) In accordance with the rules described in Subsection 53B-7-704(1), the board shall
188 assign an allocation to each institution.
189 (4) The board shall award an institution all or a portion of the institution's allocation
190 based on the institution's success in meeting the performance funding metrics described in
191 Section 53B-7-101.
192 (5) (a) For an institution that is not awarded all of the institution's allocation under
193 Subsection (4), the board shall place the unawarded portion of the institution's allocation in
194 escrow for the institution for two years.
195 (b) (i) The institution may earn the unawarded portion of the institution's allocation
196 through an improvement plan that is approved by the board and reported to the Higher
197 Education Appropriations Subcommittee.
198 (ii) If an institution does not earn the unawarded portion of the institution's allocation
199 as described in Subsection (5)(a) within two years of the day on which the unawarded portion
200 was placed in escrow, the board shall take the unawarded portion out of escrow and deposit the
201 unawarded portion into the account.
202 (6) (a) An institution may submit a request to the board for funds in addition to the
203 institution's allocation or award.
204 (b) If an institution submits a request described in Subsection (6)(a), the board shall
205 report the request, with the board's recommendations related to the request, to the Infrastructure
206 and General Government Appropriations Subcommittee.
207 (c) Any funds awarded to an institution under this Subsection (6) shall be a debit
208 against the institution's future awards.
209 Section 5. Section 53B-7-704 is enacted to read:
210 53B-7-704. Board rulemaking.
211 On or before July 1, 2017, in accordance with Title 63G, Chapter 3, Utah
212 Administrative Rulemaking Act, the board shall make rules that:
213 (1) establish factors, and assign weights to the factors, to determine how to allocate
214 funds from the account among all institutions; and
215 (2) establish required components for an improvement plan described in Section
216 53B-7-703 that provide measurable outcomes of progress.
217 Section 6. Section 53B-7-705 is enacted to read:
218 53B-7-705. Institution use of award -- Accrual of awards.
219 (1) An institution may use the institution's award:
220 (a) for a capital development project approved by the Legislature;
221 (b) for ongoing operations and maintenance costs for any capital development projects
222 approved by the Legislature;
223 (c) to pay debt service on a bond approved by the Legislature; or
224 (d) to fund a contingency reserve or project reserve, created by the institution, for
225 capital development projects of the institution.
226 (2) An institution may accumulate the institution's awards over more than one year to
227 use for a capital development project.
228 Section 7. Section 53B-7-706 is enacted to read:
229 53B-7-706. Legislative approval of a capital development project -- Oversight.
230 (1) Except as provided in Subsection 63A-5-104(3), an institution shall obtain
231 legislative approval for a capital development project in accordance with this part.
232 (2) An institution shall submit to the board a proposal for each capital development
233 project for which the institution seeks board approval.
234 (3) The board shall:
235 (a) review each submission for approval received in accordance with Subsection (2);
236 (b) based on the submissions described in Subsection (2), create a list of approved
237 capital development projects;
238 (c) submit the list described in Subsection (3)(b) to:
239 (i) the Infrastructure and General Government Appropriations Subcommittee; and
240 (ii) the State Building Board;
241 (d) submit a report to the Higher Education Appropriations Subcommittee regarding
242 the procedures under this section; and
243 (e) obtain approval for each capital development project, on behalf of an institution,
244 from the Legislature in an appropriations act.
245 (4) (a) After receiving the list described in Subsection (3)(b), the State Building Board
246 shall, based on the capital development projects on the list, review and recommend capital
247 development projects to the Infrastructure and General Government Appropriations
248 Subcommittee.
249 (b) The State Building Board, in reviewing and recommending capital development
250 projects as described in Subsection (4)(a), shall require an institution, for each of the
251 institution's capital development projects on the list, to address whether and how, as a result of
252 the project, the institution will:
253 (i) offer courses or other resources that will help meet demand for jobs, training, and
254 employment in the current market and the projected market for the next five years;
255 (ii) respond to individual skilled and technical job demand over the next 3, 5, and 10
256 years;
257 (iii) respond to industry demands for trained workers;
258 (iv) help meet commitments made by the Governor's Office of Economic
259 Development, including relating to training and incentives;
260 (v) respond to changing needs in the economy; and
261 (vi) based on demographics, respond to demands for online or in-class instruction.
262 Section 8. Section 53B-20-104 is amended to read:
263 53B-20-104. Capital facilities projects recommendations -- Rules.
264 (1) The board shall approve all new construction, repair, or purchase of educational
265 and general buildings and facilities financed from any source at all institutions subject to the
266 jurisdiction of the board.
267 (2) An institution may not submit plans or specifications to the State Building Board
268 for the construction or alteration of buildings, structures, or facilities or for the purchases of
269 equipment or fixtures for the structure without the authorization of the board.
270 (3) [
271 Act, the board shall make rules establishing the conditions under which facilities may be
272 eligible to request state funds for operations and maintenance.
273 (4) Before approving the purchase of a building, the board shall:
274 (a) determine whether or not the building will be eligible for state funds for operations
275 and maintenance by applying the rules adopted under Subsection (3); and
276 (b) if the annual request for state funding for operations and maintenance will be
277 greater than $100,000, notify the speaker of the House, the president of the Senate, and the
278 cochairs of the Infrastructure and General Government subcommittee of the Legislature's Joint
279 Appropriation Committee.
280 (5) Before a capital development project may be submitted to the Legislature, the board
281 shall comply with the approval requirements described in Section 53B-7-706.
282 Section 9. Section 63A-5-104 is amended to read:
283 63A-5-104. Definitions -- Capital development and capital improvement process
284 -- Approval requirements -- Limitations on new projects -- Emergencies.
285 (1) As used in this section:
286 (a) (i) "Capital developments" means a:
287 [
288 or more;
289 [
290 [
291 purchase.
292 (ii) "Capital developments" does not include a project described in Subsection
293 (1)(b)(iii).
294 (b) "Capital improvements" means [
295 (i) a remodeling, alteration, replacement, or repair project with a total cost of less than
296 [
297 (ii) a site [
298 $3,500,000;
299 (iii) a utility infrastructure improvement project that:
300 (A) has a total cost of less than $7,000,000;
301 (B) consists of two or more projects that, if done separately, would each cost less than
302 $3,500,000; and
303 (C) the State Building Board determines is more cost effective or feasible to be
304 completed as a single project; or
305 [
306 (c) (i) "New facility" means the construction of a new building on state property
307 regardless of funding source.
308 (ii) "New facility" includes:
309 (A) an addition to an existing building; and
310 (B) the enclosure of space that was not previously fully enclosed.
311 (iii) "New facility" does not [
312 (A) the replacement of state-owned space that is demolished or that is otherwise
313 removed from state use, if the total construction cost of the replacement space is less than
314 [
315 (B) the construction of facilities that do not fully enclose a space.
316 (d) "Replacement cost of existing state facilities and infrastructure" means the
317 replacement cost, as determined by the Division of Risk Management, of state facilities,
318 excluding auxiliary facilities as defined by the State Building Board and the replacement cost
319 of infrastructure as defined by the State Building Board.
320 (e) "State funds" means public money appropriated by the Legislature.
321 (2) (a) [
322 behalf of all state agencies, commissions, departments, and institutions shall submit [
323 State Building Board's capital development recommendations and priorities to the Legislature
324 for approval and prioritization.
325 (b) In developing the State Building Board's capital development recommendations and
326 priorities, the State Building Board shall:
327 (i) require each state agency, commission, department, or institution requesting an
328 appropriation for a capital development project to complete a study that demonstrates the
329 feasibility of the capital development project, including:
330 (A) the need for the capital development project;
331 (B) the appropriateness of the scope of the capital development project;
332 (C) any private funding for the capital development project; and
333 (D) the economic and community impacts of the capital development project; [
334 (ii) verify the completion and accuracy of the feasibility study described in Subsection
335 (2)(b)(i)[
336 (iii) require that an institution described in Section 53B-1-102, except an institution
337 listed in Section 53B-7-702, that submits a request for a capital development project address
338 whether and how, as a result of the project, the institution will:
339 (A) offer courses or other resources that will help meet demand for jobs, training, and
340 employment in the current market and the projected market for the next five years;
341 (B) respond to individual skilled and technical job demand over the next 3, 5, and 10
342 years;
343 (C) respond to industry demands for trained workers;
344 (D) help meet commitments made by the Governor's Office of Economic
345 Development, including relating to training and incentives;
346 (E) respond to changing needs in the economy; and
347 (F) based on demographics, respond to demands for online or in-class instruction.
348 (c) An agency may not modify a capital development project request after the deadline
349 for submitting the request, except to the extent that a modification of the scope of the project,
350 or the amount of funds requested, is necessary due to increased construction costs or other
351 factors outside of the agency's control.
352 (d) The State Building Board shall submit the State Building Board's capital
353 development recommendations for an institution listed in Section 53B-7-702, in accordance
354 with Section 53B-7-706.
355 (3) (a) Except as provided in Subsections (3)(b), (d), and (e), a capital development
356 project may not be constructed on state property without legislative approval.
357 (b) Legislative approval is not required for a capital development project that consists
358 of the design or construction of a new facility if:
359 (i) the State Building Board determines that[
360 commission, department, or institution has provided adequate assurance that[
361 will not be used for the design or construction of the facility; [
362 [
363
364 Board a written document, signed by the head of the state agency:
365 (A) stating that funding or a revenue stream is in place, or will be in place before the
366 project is completed, to ensure that increased state funding will not be required to cover the
367 cost of operations and maintenance to[
368 immediate or future capital improvements [
369 (B) detailing the source of the funding that will be used for the cost of operations and
370 maintenance for immediate and future capital improvements to the resulting facility; and
371 [
372 (A) appropriate and consistent with the master plan for the property; and
373 (B) will not create an adverse impact on the state.
374 (c) (i) The Division of Facilities Construction and Management shall maintain a record
375 of facilities constructed under the exemption provided in Subsection (3)(b).
376 (ii) For facilities constructed under the exemption provided in Subsection (3)(b), a state
377 agency, commission, department, or institution may not request:
378 (A) increased state funds for operations and maintenance; or
379 (B) state capital improvement funding.
380 (d) Legislative approval is not required for:
381 (i) the renovation, remodeling, or retrofitting of an existing facility with nonstate funds
382 that has been approved by the State Building Board;
383 (ii) a facility to be built with nonstate funds and owned by nonstate entities within
384 research park areas at the University of Utah and Utah State University;
385 (iii) a facility to be built at This is the Place State Park by This is the Place Foundation
386 with funds of the foundation, including grant money from the state, or with donated services or
387 materials;
388 (iv) a capital project that:
389 (A) is funded by:
390 (I) the Uintah Basin Revitalization Fund; or
391 (II) the Navajo Revitalization Fund; and
392 (B) does not provide a new facility for a state agency or higher education institution; or
393 (v) a capital project on school and institutional trust lands that is funded by the School
394 and Institutional Trust Lands Administration from the Land Grant Management Fund and that
395 does not fund construction of a new facility for a state agency or higher education institution.
396 (e) (i) Legislative approval is not required for capital development projects to be built
397 for the Department of Transportation:
398 (A) as a result of an exchange of real property under Section 72-5-111; or
399 (B) as a result of a sale or exchange of real property from a maintenance facility if the
400 real property is exchanged for, or the proceeds from the sale of the real property are used for,
401 another maintenance facility, including improvements for a maintenance facility and real
402 property.
403 (ii) When the Department of Transportation approves a sale or exchange under
404 Subsection (3)(e), it shall notify the president of the Senate, the speaker of the House, and the
405 cochairs of the Infrastructure and General Government Appropriations Subcommittee of the
406 Legislature's Joint Appropriation Committee about any new facilities to be built or improved
407 under this exemption.
408 (4) (a) (i) The State Building Board, on behalf of all state agencies, commissions,
409 departments, and institutions shall by January 15 of each year, submit a list of anticipated
410 capital improvement requirements to the Legislature for review and approval.
411 (ii) The list shall identify:
412 (A) a single project that costs more than $1,000,000;
413 (B) multiple projects within a single building or facility that collectively cost more than
414 $1,000,000;
415 (C) a single project that will be constructed over multiple years with a yearly cost of
416 $1,000,000 or more and an aggregate cost of more than [
417 (D) multiple projects within a single building or facility with a yearly cost of
418 $1,000,000 or more and an aggregate cost of more than [
419 (E) a single project previously reported to the Legislature as a capital improvement
420 project under $1,000,000 that, because of an increase in costs or scope of work, will now cost
421 more than $1,000,000; [
422 (F) multiple projects within a single building or facility previously reported to the
423 Legislature as a capital improvement project under $1,000,000 that, because of an increase in
424 costs or scope of work, will now cost more than $1,000,000[
425 (G) projects approved under Subsection (1)(b)(iii).
426 (b) Unless otherwise directed by the Legislature, the State Building Board shall
427 prioritize capital improvements from the list submitted to the Legislature up to the level of
428 appropriation made by the Legislature.
429 (c) In prioritizing capital improvements, the State Building Board shall consider the
430 results of facility evaluations completed by an architect/engineer as stipulated by the building
431 board's facilities maintenance standards.
432 (d) [
433 Building Board shall allocate at least 80% of the funds that the Legislature appropriates for
434 capital improvements to:
435 (i) projects that address:
436 (A) a structural issue;
437 (B) fire safety;
438 (C) a code violation; or
439 (D) any issue that impacts health and safety;
440 (ii) projects that upgrade:
441 (A) an HVAC system;
442 (B) an electrical system;
443 (C) essential equipment;
444 (D) an essential building component; or
445 (E) infrastructure, including a utility tunnel, water line, gas line, sewer line, roof,
446 parking lot, or road; or
447 (iii) projects that demolish and replace an existing building that is in extensive
448 disrepair and cannot be fixed by repair or maintenance.
449 (e) [
450 Building Board shall allocate no more than 20% of the funds that the Legislature appropriates
451 for capital improvements to:
452 (i) remodeling and aesthetic upgrades to meet state programmatic needs; or
453 (ii) construct an addition to an existing building or facility.
454 (f) The State Building Board may require an entity that benefits from a capital
455 improvement project to repay the capital improvement funds from savings that result from the
456 project.
457 (g) The State Building Board may provide capital improvement funding to a single
458 project, or to multiple projects within a single building or facility, even if the total cost of the
459 project or multiple projects is [
460 (i) the capital improvement project [
461
462 (ii) the Legislature has [
463
464 improvement funds .
465 (h) In prioritizing and allocating capital improvement funding, the State Building
466 Board shall comply with the requirement in Subsection 63B-23-101(2)(f).
467 (5) The Legislature may authorize:
468 (a) the total square feet to be occupied by each state agency; and
469 (b) the total square feet and total cost of lease space for each agency.
470 (6) If construction of a new building or facility [
471 will require an immediate or future increase in state funding for operations and maintenance or
472 for capital improvements, the Legislature may not authorize the new building or facility until
473 the Legislature appropriates funds for:
474 (a) the portion of operations and maintenance, if any, that will require an immediate or
475 future increase in state funding; and
476 (b) the portion of capital improvements, if any, that will require an immediate or future
477 increase in state funding.
478 (7) (a) Except as provided in Subsection (7)(b) [
479 the design or construction of any new capital development projects, except to complete the
480 funding of projects for which partial funding has been previously provided, until the
481 Legislature has appropriated 1.1% of the replacement cost of existing state facilities and
482 infrastructure to capital improvements.
483 (b) (i) As used in this Subsection (7)(b):
484 (A) "Education Fund budget deficit" [
485 Section 63J-1-312; and
486 (B) "General Fund budget deficit" [
487 Section 63J-1-312.
488 (ii) If the Legislature determines that an Education Fund budget deficit or a General
489 Fund budget deficit exists, the Legislature may, in eliminating the deficit, reduce the amount
490 appropriated to capital improvements to 0.9% of the replacement cost of state buildings and
491 infrastructure.
492 [
493
494 [
495
496 (8) [
497
498 Chapter 7, Part 7, Capital Developments, the Legislature may not fund the programming,
499 design, and construction of a new building or facility in phases over more than one year unless
500 the Legislature has approved each phase of the funding for the construction of the new building
501 or facility by the affirmative vote of two-thirds of all the members elected to each house.
502 (9) (a) If, after approval of capital development and capital improvement priorities by
503 the Legislature under this section, emergencies arise that create unforeseen critical capital
504 improvement projects, the State Building Board may, notwithstanding the requirements of Title
505 63J, Chapter 1, Budgetary Procedures Act, reallocate capital improvement funds to address
506 those projects.
507 (b) The State Building Board shall report any changes it makes in capital improvement
508 allocations approved by the Legislature to:
509 (i) the Office of the Legislative Fiscal Analyst within 30 days of the reallocation; and
510 (ii) the Legislature at its next annual general session.
511 (10) (a) The State Building Board may adopt a rule allocating to institutions and
512 agencies their proportionate share of capital improvement funding.
513 (b) The State Building Board shall ensure that the rule:
514 (i) reserves funds for the Division of Facilities Construction and Management for
515 emergency projects; and
516 (ii) allows the delegation of projects to some institutions and agencies with the
517 requirement that a report of expenditures will be filed annually with the Division of Facilities
518 Construction and Management and appropriate governing bodies.
519 (11) It is the intent of the Legislature that in funding capital improvement requirements
520 under this section the General Fund be considered as a funding source for at least half of those
521 costs.
522 (12) (a) Subject to Subsection (12)(b), at least 80% of the state funds appropriated for
523 capital improvements shall be used for maintenance or repair of the existing building or
524 facility.
525 (b) The State Building Board may modify the requirement described in Subsection
526 (12)(a) if the State Building Board determines that a different allocation of capital
527 improvements funds is in the best interest of the state.
528 Section 10. Section 63A-5-209 is amended to read:
529 63A-5-209. Building appropriations supervised by director -- Contingencies --
530 Disposition of project reserve funds -- Set aside for Utah Percent-for-Art Program.
531 (1) The director shall:
532 (a) (i) supervise the expenditure of funds in providing plans, engineering
533 specifications, sites, and construction of the buildings for which legislative appropriations are
534 made; and
535 (ii) specifically allocate money appropriated when more than one project is included in
536 any single appropriation without legislative directive;
537 (b) (i) expend the amount necessary from appropriations for planning, engineering, and
538 architectural work; and
539 (ii) (A) allocate amounts from appropriations necessary to cover expenditures
540 previously made from the planning fund under Section 63A-5-211 in the preparation of plans,
541 engineering, and specifications; and
542 (B) return the amounts described in Subsection (1)(b)(ii)(A) to the planning fund; and
543 (c) hold in a statewide contingency reserve the amount budgeted for contingencies:
544 (i) in appropriations for the construction or remodeling of facilities; and
545 (ii) which may be over and above all amounts obligated by contract for planning,
546 engineering, architectural work, sites, and construction contracts.
547 (2) (a) The director shall base the amount budgeted for contingencies on a sliding scale
548 percentage of the construction cost ranging from:
549 (i) 4-1/2% to 6-1/2% for new construction; and
550 (ii) 6% to 9-1/2% for remodeling projects.
551 (b) The director shall hold the statewide contingency funds to cover:
552 (i) costs of change orders; and
553 (ii) unforeseen, necessary costs beyond those specifically budgeted for the project.
554 (c) (i) The Legislature shall annually review the percentage and the amount held in the
555 statewide contingency reserve.
556 (d) An institution listed in Section 53B-7-702 is not eligible to receive statewide
557 contingency reserve funds.
558 (ii) The Legislature may reappropriate to other building needs, including the cost of
559 administering building projects, any amount from the statewide contingency reserve that is in
560 excess of the reserve required to meet future contingency needs.
561 (3) (a) The director shall hold in a separate reserve those state appropriated funds
562 accrued through bid savings and project residual as a project reserve.
563 (b) The director shall account for the funds accrued under Subsection (3)(a) in separate
564 accounts as follows:
565 (i) bid savings and project residual from a capital improvement project, as defined in
566 Section 63A-5-104; and
567 (ii) bid savings and project residual from a capital development project, as defined in
568 Section 63A-5-104.
569 (c) The State Building Board may authorize the use of project reserve funds in the
570 account described in Subsection (3)(b)(i) for a capital improvement project:
571 (i) approved under Section 63A-5-104; and
572 (ii) for which funds are not allocated.
573 (d) The director may:
574 (i) authorize the use of project reserve funds in the accounts described in Subsection
575 (3)(b) for the award of contracts in excess of a project's construction budget if the use is
576 required to meet the intent of the project; and
577 (ii) transfer money from the account described in Subsection (3)(b)(i) to the account
578 described in Subsection (3)(b)(ii) if a capital development project has exceeded its construction
579 budget.
580 (e) The director shall report to the Office of the Legislative Fiscal Analyst within 30
581 days:
582 (i) an authorization under Subsection (3)(c); or
583 (ii) a transfer under Subsection (3)(d).
584 (f) The Legislature shall annually review the amount held in the project reserve for
585 possible reallocation by the Legislature to other building needs, including the cost of
586 administering building projects.
587 (g) An institution listed in Section 53B-7-702 is not eligible to receive statewide
588 project reserve funds.
589 (4) If any part of the appropriation for a building project, other than the part set aside
590 for the Utah Percent-for-Art Program under Title 9, Chapter 6, Part 4, Utah Percent-for-Art
591 Act, remains unencumbered after the award of construction and professional service contracts
592 and establishing a reserve for fixed and moveable equipment, the balance of the appropriation
593 is dedicated to the project reserve and does not revert to the General Fund.
594 (5) (a) One percent of the amount appropriated for the construction of any new state
595 building or facility may be appropriated and set aside for the Utah Percent-for-Art Program
596 administered by the Division of Fine Arts under Title 9, Chapter 6, Part 4, Utah Percent-for-Art
597 Act.
598 (b) The director shall release to the Division of Fine Arts any funds included in an
599 appropriation to the division that are designated by the Legislature for the Utah Percent-for-Art
600 Program.
601 (c) Funds from appropriations for any state building or facility of which any part is
602 derived from the issuance of bonds, to the extent it would jeopardize the federal income tax
603 exemption otherwise allowed for interest paid on bonds, may not be set aside.
604 Section 11. Section 63J-1-316 is enacted to read:
605 63J-1-316. Establishing a Higher Education Capital Developments Account --
606 Providing for deposits into the account -- Providing for interest generated by the account.
607 (1) As used in this section:
608 (a) "Account" means the Higher Education Capital Developments Account, created in
609 Subsection (2)(a).
610 (b) "Capital developments" means the same as that term is defined in Section
611 63A-5-104.
612 (c) "Education Fund revenue surplus" means the same as that term is defined in Section
613 63J-1-313.
614 (d) "Operating deficit" means the same as that term is defined in Section 63J-1-313.
615 (2) (a) There is created within the Education Fund a restricted account known as the
616 Higher Education Capital Developments Account.
617 (b) The account shall be funded by legislative appropriations, the surplus revenue
618 required to be deposited into the account by this section, and other funds required to be
619 deposited into the account under Section 53B-7-703.
620 (c) The account may accrue interest, which shall be deposited into the account.
621 (3) (a) Subject to future budget constraints, each year the Legislature shall increase the
622 amount appropriated to the account by 3% of the capital developments amounts provided by
623 legislative appropriations described in Subsection (2)(b).
624 (b) The State Board of Regents shall ensure that the increase described in Subsection
625 (3)(a) is used exclusively to fund operations and maintenance costs for capital development
626 projects approved by the Legislature.
627 (4) (a) At the end of any fiscal year in which the Division of Finance, in consultation
628 with the legislative fiscal analyst and in conjunction with the completion of the annual audit by
629 the state auditor, determines that there is an Education Fund revenue surplus, the Division of
630 Finance shall transfer 12.5% of the Education Fund revenue surplus into the account.
631 (b) The Division of Finance shall calculate the amount to be transferred under this
632 Subsection (4) excluding any direct legislative appropriation made to the account.
633 (c) The Division of Finance shall transfer the amount required under this Subsection
634 (4):
635 (i) after transferring the Education Fund revenue surplus required to be transferred in
636 accordance with Section 63J-1-313; and
637 (ii) before transferring from the Education Fund revenue surplus any other year-end
638 contingency appropriations, year-end set-asides, or other year-end transfers required by law.
639 (d) Notwithstanding Subsection (4)(a), if, at the end of a fiscal year, the Division of
640 Finance determines that an operating deficit exists, the Division of Finance may reduce the
641 transfer to the account by the amount necessary to eliminate the operating deficit.
642 (5) Expenditures from the account shall be made in accordance with Section
643 53B-7-703.
644 Section 12. Effective date.
645 (1) Except as provided in Subsection (2), this bill takes effect on May 10, 2016.
646 (2) The following sections take effect on January 1, 2020:
647 (a) Section 53B-7-101;
648 (b) Section 53B-7-703;
649 (c) Section 53B-7-705;
650 (d) Section 53B-7-706;
651 (e) Section 53B-20-104;
652 (f) Section 63A-5-103;
653 (g) Section 63A-5-104;
654 (h) Section 63A-5-206; and
655 (i) Section 63A-5-209.
656 Section 13. Coordinating S.B. 188 with S.B. 156 -- Substantive and technical
657 amendments.
658 If this S.B. 188 and S.B. 156, State Facilities Amendments, both pass and become law,
659 it is the intent of the Legislature that the Office of Legislative Research and General Counsel,
660 in preparing the Utah Code database for publication, make the following changes:
661 (1) Subsection 63A-5-104(2)(b)(iii) in S.B. 188 supersedes Subsection
662 63A-5-104(2)(b)(iii) in S.B. 156; and
663 (2) not enact Subsection 63A-5-104(2)(b)(iv) in S.B. 156.