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7 LONG TITLE
8 General Description:
9 This bill amends and enacts provisions related to performance funding for higher
10 education institutions and applied technology colleges.
11 Highlighted Provisions:
12 This bill:
13 ▸ defines terms;
14 ▸ amends the powers and duties of the Utah College of Applied Technology Board of
15 Trustees to include responsibilities related to a model to determine performance;
16 ▸ creates a restricted account;
17 ▸ requires that, up to a limit, certain individual income tax revenue be deposited in the
18 restricted account;
19 ▸ restricts the use of money in the restricted account to performance funding for
20 higher education institutions and applied technology colleges;
21 ▸ requires the Department of Workforce Services to estimate the amount of growth,
22 over a baseline amount, in individual income tax revenue generated by targeted
23 jobs;
24 ▸ directs the Legislature to determine appropriations from the restricted account for
25 higher education institutions and applied technology colleges based on performance;
26 ▸ requires the State Board of Regents and the Utah College of Applied Technology
27 Board of Trustees to:
28 • develop models for measuring the performance of higher education institutions
29 and applied technology colleges; and
30 • report annually to the Higher Education Appropriations Subcommittee on the
31 performance of higher education institutions and applied technology colleges;
32 ▸ provides for the Office of the Legislative Auditor General to conduct an audit,
33 subject to prioritization of the Audit Subcommittee; and
34 ▸ makes technical and conforming changes.
35 Money Appropriated in this Bill:
36 None
37 Other Special Clauses:
38 None
39 Utah Code Sections Affected:
40 AMENDS:
41 53B-2a-104, as last amended by Laws of Utah 2016, Chapter 236
42 53B-7-101, as last amended by Laws of Utah 2015, Chapter 361
43 63I-2-253, as last amended by Laws of Utah 2016, Chapters 128, 229, 236, 271, and
44 318
45 ENACTS:
46 53B-7-701, Utah Code Annotated 1953
47 53B-7-702, Utah Code Annotated 1953
48 53B-7-703, Utah Code Annotated 1953
49 53B-7-704, Utah Code Annotated 1953
50 53B-7-705, Utah Code Annotated 1953
51 53B-7-706, Utah Code Annotated 1953
52 53B-7-707, Utah Code Annotated 1953
53 53B-7-708, Utah Code Annotated 1953
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55 Be it enacted by the Legislature of the state of Utah:
56 Section 1. Section 53B-2a-104 is amended to read:
57 53B-2a-104. Utah College of Applied Technology Board of Trustees -- Powers
58 and duties.
59 (1) The Utah College of Applied Technology Board of Trustees is vested with the
60 control, management, and supervision of applied technology colleges within the Utah College
61 of Applied Technology in a manner consistent with the policy and purpose of this title and the
62 specific powers and responsibilities granted to the board of trustees.
63 (2) The board of trustees shall:
64 (a) ensure that an applied technology college complies with the requirements in Section
65 53B-2a-106;
66 (b) appoint the commissioner of technical education in accordance with Section
67 53B-2a-102;
68 (c) advise the commissioner of technical education and the State Board of Regents on
69 issues related to career and technical education, including articulation with institutions of
70 higher education and public education;
71 (d) ensure that a secondary student in the public education system has access to career
72 and technical education through an applied technology college in the secondary student's
73 service region;
74 (e) in consultation with the State Board of Education, the State Board of Regents, and
75 applied technology college presidents, develop strategies for providing career and technical
76 education in rural areas, considering distances between rural career and technical education
77 providers;
78 (f) receive budget requests from each applied technology college, compile and
79 prioritize the requests, and submit the request to:
80 (i) the Legislature; and
81 (ii) the Governor's Office of Management and Budget;
82 (g) receive funding requests pertaining to capital facilities and land purchases from
83 each applied technology college, ensure that the requests comply with Section 53B-2a-112,
84 prioritize the requests, and submit the prioritized requests to the State Building Board;
85 (h) comply with Chapter 7, Part 7, Performance Funding;
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87 benchmarks, provide oversight, evaluate program performance, and obtain independent audits
88 to ensure that an applied technology college follows the non-credit career and technical
89 education mission described in this part;
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92 College of Applied Technology;
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94 and recommendations on career and technical education issues to the governor and to the
95 Legislature's Education Interim Committee by October 31 of each year, which shall include
96 information detailing:
97 (i) how the career and technical education needs of secondary students are being met,
98 including what access secondary students have to programs offered at applied technology
99 colleges;
100 (ii) how the emphasis on high demand, high wage, and high skill jobs in business and
101 industry described in Section 53B-2a-106 is being provided;
102 (iii) performance outcomes, including:
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105 (A) performance on the metrics described in Section 53B-7-707; and
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107 (iv) student tuition and fees; and
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109 state system of public education, the state system of higher education, the Department of
110 Workforce Services, and the Governor's Office of Economic Development on the delivery of
111 career and technical education.
112 (3) The board of trustees, the commissioner of technical education, or an applied
113 technology college, president, or board of directors may not conduct a feasibility study or
114 perform another act relating to offering a degree or awarding credit.
115 Section 2. Section 53B-7-101 is amended to read:
116 53B-7-101. Combined requests for appropriations -- Board review of operating
117 budgets -- Submission of budgets -- Recommendations -- Hearing request --
118 Appropriation formulas -- Allocations -- Dedicated credits -- Financial affairs.
119 (1) As used in this section:
120 (a) (i) "Higher education institution" or "institution" means an institution of higher
121 education listed in Section 53B-1-102.
122 (ii) "Higher education institution" or "institution" does not include the Utah College of
123 Applied Technology.
124 (b) "Research university" means the University of Utah or Utah State University.
125 (2) (a) The board shall recommend a combined appropriation for the operating budgets
126 of higher education institutions for inclusion in a state appropriations act.
127 (b) The board's combined budget recommendation shall include:
128 (i) employee compensation;
129 (ii) mandatory costs, including building operations and maintenance, fuel, and power;
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133 (B) Part 7, Performance Funding;
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135 and technology infrastructure; and
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137 (v) enrollment growth.
138 (c) The board's recommendations shall be available for presentation to the governor
139 and to the Legislature at least 30 days prior to the convening of the Legislature, and shall
140 include schedules showing the recommended amounts for each institution, including separately
141 funded programs or divisions.
142 (d) The recommended appropriations shall be determined by the board only after it has
143 reviewed the proposed institutional operating budgets, and has consulted with the various
144 institutions and board staff in order to make appropriate adjustments.
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157 (b) Performance funding shall include metrics approved by the board, including:
158 (i) degrees and certificates granted;
159 (ii) services provided to traditionally underserved populations;
160 (iii) responsiveness to workforce needs;
161 (iv) institutional efficiency; and
162 (v) for a research university, graduate research metrics.
163 (c) The board shall:
164 (i) award performance funding appropriated by the Legislature to institutions based on
165 the institution's success in meeting the metrics described in Subsection [
166 (ii) reallocate funding that is not awarded to an institution under Subsection [
167 (3)(c)(i) for distribution to other institutions that meet the metrics described in Subsection [
168 (3)(b).
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170 days prior to the convening of the Legislature in accordance with procedures established by the
171 board.
172 (b) Funding requests pertaining to capital facilities and land purchases shall be
173 submitted in accordance with procedures prescribed by the State Building Board.
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175 explanations and supporting data.
176 (b) The appropriations recommended by the board shall be made with the dual
177 objective of:
178 (i) justifying for higher educational institutions appropriations consistent with their
179 needs, and consistent with the financial ability of the state; and
180 (ii) determining an equitable distribution of funds among the respective institutions in
181 accordance with the aims and objectives of the statewide master plan for higher education.
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183 appropriations.
184 (b) After the governor delivers his budget message to the Legislature, the board shall
185 request hearings on the recommended appropriations with the appropriate committees of the
186 Legislature.
187 (c) If either the total amount of the state appropriations or its allocation among the
188 institutions as proposed by the Legislature or its committees is substantially different from the
189 recommendations of the board, the board may request further hearings with the Legislature or
190 its appropriate committees to reconsider both the total amount and the allocation.
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192 its use and for the use of the governor and the committees of the Legislature in making
193 appropriation recommendations.
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195 minimum tuitions, resident and nonresident, for each institution which it considers necessary to
196 implement the budget recommendations.
197 (b) The board may fix the tuition, fees, and charges for each institution at levels it finds
198 necessary to meet budget requirements.
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200 budgeted in accordance with institutional work programs approved by the board, provided that
201 the expenditures funded by appropriations for each institution are kept within the
202 appropriations for the applicable period.
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209 federal grants, and proceeds from sales received by the institutions are appropriated to the
210 respective institutions and used in accordance with institutional work programs.
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212 handle its own financial affairs under the general supervision of the board.
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214 shall be distributed to the board and higher education institutions to fund the items described in
215 Subsection (2)(b).
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222 Section 3. Section 53B-7-701 is enacted to read:
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224 53B-7-701. Title.
225 This part is known as "Performance Funding."
226 Section 4. Section 53B-7-702 is enacted to read:
227 53B-7-702. Definitions.
228 As used in this part:
229 (1) "Account" means the Performance Funding Restricted Account created in Section
230 53B-7-703.
231 (2) "Applied technology college" means the same as that term is defined in Section
232 53B-2a-101.
233 (3) "Applied technology college graduate" means an individual who:
234 (a) has earned a certificate from an accredited program at an applied technology
235 college; and
236 (b) is no longer enrolled in the applied technology college.
237 (4) "Estimated revenue growth from targeted jobs" means the estimated increase in
238 individual income tax revenue generated by individuals employed in targeted jobs, determined
239 by the Department of Workforce Services in accordance with Section 53B-7-704.
240 (5) "Full new performance funding amount" means the maximum amount of new
241 performance funding that a higher education institution or applied technology college may
242 qualify for in a fiscal year, determined by the Legislature in accordance with Section
243 53B-7-705.
244 (6) "Full-time" means the number of credit hours the board determines is full-time
245 enrollment for a student.
246 (7) "GOED" means the Governor's Office of Economic Development created in
247 Section 63N-1-201.
248 (8) "Higher education institution" means the same as that term is defined in Section
249 53B-7-101.
250 (9) "Job" means an occupation determined by the Department of Workforce Services.
251 (10) "Membership hour" means 60 minutes of scheduled instruction provided by an
252 applied technology college to a student enrolled in the applied technology college.
253 (11) "New performance funding" means the difference between the total amount of
254 money in the account and the amount of money appropriated from the account for performance
255 funding in the current fiscal year.
256 (12) "Performance" means total performance across the metrics described in:
257 (a) Section 53B-7-706 for a higher education institution; or
258 (b) Section 53B-7-707 for an applied technology college.
259 (13) "Research university" means the University of Utah or Utah State University.
260 (14) "Targeted job" means a job designated by the Department of Workforce Services
261 or GOED in accordance with Section 53B-7-704.
262 (15) "Utah College of Applied Technology" means the Utah College of Applied
263 Technology described in Chapter 2a, Utah College of Applied Technology.
264 Section 5. Section 53B-7-703 is enacted to read:
265 53B-7-703. Performance Funding Restricted Account -- Creation -- Deposits into
266 account -- Legislative review.
267 (1) There is created within the Education Fund a restricted account known as the
268 "Performance Funding Restricted Account."
269 (2) Money in the account shall be:
270 (a) used for performance funding for:
271 (i) higher education institutions; and
272 (ii) applied technology colleges; and
273 (b) appropriated by the Legislature in accordance with Section 53B-7-705.
274 (3) (a) Money in the account shall earn interest.
275 (b) All interest earned on account money shall be deposited into the account.
276 (4) (a) Except as provided in Subsection (4)(b)(ii), the Division of Finance shall
277 deposit into the account an amount equal to:
278 (i) 14% of the estimated revenue growth from targeted jobs upon appropriation by the
279 Legislature for the fiscal year beginning on July 1, 2018; and
280 (ii) 20% of the estimated revenue growth from targeted jobs upon appropriation by the
281 Legislature for a fiscal year beginning on or after July 1, 2019.
282 (b) (i) As used in this Subsection (4)(b), "total higher education appropriations" means,
283 for the current fiscal year, the total state funded appropriations to:
284 (A) the State Board of Regents;
285 (B) higher education institutions;
286 (C) the Utah College of Applied Technology; and
287 (D) applied technology colleges.
288 (ii) If a deposit described in Subsection (4)(a) would exceed 10% of total higher
289 education appropriations, upon appropriation by the Legislature, the Division of Finance shall
290 deposit into the account an amount equal to 10% of total higher education appropriations.
291 (c) The Legislature may appropriate money to the account.
292 (5) During the interim following a legislative general session in which an amount
293 described in Subsection (4)(b) is deposited into the account, the Higher Education
294 Appropriations Subcommittee shall review performance funding described in this part and
295 make recommendations to the Legislature about:
296 (a) the performance levels required for higher education institutions and applied
297 technology colleges to receive performance funding as described in Section 53B-7-705;
298 (b) the performance metrics described in Sections 53B-7-706 and 53B-7-707; and
299 (c) the amount of individual income tax revenue dedicated to higher education
300 performance funding.
301 Section 6. Section 53B-7-704 is enacted to read:
302 53B-7-704. Designation of targeted jobs -- Determination of estimated revenue
303 growth from targeted jobs.
304 (1) As used in this section, "baseline amount" means the average annual wages for
305 targeted jobs over calendar years 2014, 2015, and 2016, as determined by the Department of
306 Workforce Services using the best available information.
307 (2) (a) The Department of Workforce Services shall designate, as a targeted job, a job
308 that:
309 (i) has a base employment level of at least 100 individuals;
310 (ii) ranks in the top 20% of jobs for outlook based on:
311 (A) projected number of openings; and
312 (B) projected rate of growth;
313 (iii) ranks in the top 20% of jobs for median annual wage; and
314 (iv) requires postsecondary training.
315 (b) The Department of Workforce Services shall designate targeted jobs every other
316 year.
317 (c) GOED may, after consulting with the Department of Workforce Services and
318 industry representatives, designate a job that has significant industry importance as a targeted
319 job.
320 (d) Annually, the Department of Workforce Services and GOED shall report to the
321 Higher Education Appropriations Subcommittee on targeted jobs, including:
322 (i) the method used to determine which jobs are targeted jobs;
323 (ii) changes to which jobs are targeted jobs; and
324 (iii) the reasons for each change described in Subsection (2)(d)(ii).
325 (3) Based on the targeted jobs described in Subsection (2), the Department of
326 Workforce Services shall annually determine the estimated revenue growth from targeted jobs
327 by:
328 (a) determining the total estimated wages for targeted jobs for the year:
329 (i) based on the average wages for targeted jobs, calculated using the most recently
330 available wage data and data from each of the two years before the most recently available
331 data; and
332 (ii) using the best available information;
333 (b) determining the change in estimated wages for targeted jobs by subtracting the
334 baseline amount from the total wages for targeted jobs described in Subsection (3)(a); and
335 (c) multiplying the change in estimated wages for targeted jobs described in Subsection
336 (3)(b) by 3.6%.
337 (4) Annually, at least 30 days before the first day of the legislative general session, the
338 Department of Workforce Services shall report the estimated revenue growth from targeted
339 jobs to:
340 (a) the Office of the Legislative Fiscal Analyst; and
341 (b) the Division of Finance.
342 Section 7. Section 53B-7-705 is enacted to read:
343 53B-7-705. Determination of full new performance funding amount -- Role of
344 appropriations subcommittee -- Program review.
345 (1) In accordance with this section, and based on money deposited into the account, the
346 Legislature shall, as part of the higher education appropriations budget process, annually
347 determine the full new performance funding amount for each:
348 (a) higher education institution; and
349 (b) applied technology college.
350 (2) The Legislature shall annually allocate:
351 (a) 90% of the money in the account to higher education institutions; and
352 (b) 10% of the money in the account to applied technology colleges.
353 (3) (a) The Legislature shall determine a higher education institution's full new
354 performance funding amount based on the higher education institution's prior year share of:
355 (i) full-time equivalent enrollment in all higher education institutions; and
356 (ii) the total state-funded appropriated budget for all higher education institutions.
357 (b) In determining a higher education institution's full new performance funding
358 amount, the Legislature shall give equal weight to the factors described in Subsections (3)(a)(i)
359 and (ii).
360 (4) (a) The Legislature shall determine an applied technology college's full new
361 performance funding amount based on the applied technology college's prior year share of:
362 (i) membership hours for all applied technology colleges; and
363 (ii) the total state-funded appropriated budget for all applied technology colleges.
364 (b) In determining an applied technology college's full new performance funding
365 amount, the Legislature shall give equal weight to the factors described in Subsections (4)(a)(i)
366 and (ii).
367 (5) Annually, at least 30 days before the first day of the legislative general session:
368 (a) the board shall submit a report to the Higher Education Appropriations
369 Subcommittee on each higher education institution's performance; and
370 (b) the Utah College of Applied Technology Board of Trustees shall submit a report to
371 the Higher Education Appropriations Subcommittee on each applied technology college's
372 performance.
373 (6) (a) In accordance with this Subsection (6), and based on the reports described in
374 Subsection (5), the Legislature shall determine for each higher education institution and each
375 applied technology college:
376 (i) the portion of the full new performance funding amount earned; and
377 (ii) the amount of new performance funding to recommend that the Legislature
378 appropriate, from the account, to the higher education institution or applied technology college.
379 (b) (i) A higher education institution earns the full new performance funding amount if
380 the higher education institution has a positive change in performance of at least 1% compared
381 to the higher education institution's average performance over the previous five years.
382 (ii) (A) Except as provided in Subsection (6)(b)(ii)(B), an applied technology college
383 earns the full new performance funding amount if the applied technology college has a positive
384 change in the applied technology college's performance of at least 5% compared to the applied
385 technology college's average performance over the previous five years.
386 (B) An applied technology college's change in performance may be compared to the
387 applied technology college's average performance over fewer than five years in accordance
388 with Subsection 53B-7-707(3)(b).
389 (c) A higher education institution or applied technology college that has a positive
390 change in performance that is less than a change described in Subsection (6)(b) is eligible to
391 receive a prorated amount of the full new performance funding amount.
392 (d) A higher education institution or applied technology college that has a negative
393 change, or no change, in performance over a time period described in Subsection (6)(b) is not
394 eligible to receive new performance funding.
395 (7) An appropriation described in this section is ongoing.
396 (8) Notwithstanding Section 53B-7-703 and Subsections (6) and (7), the Legislature
397 may, by majority vote, appropriate or refrain from appropriating money for performance
398 funding as circumstances require in a particular year.
399 (9) On or before November 1, 2020, the Education Interim Committee, the Higher
400 Education Appropriations Subcommittee, and the governor shall review the implementation of
401 performance funding described in this part.
402 Section 8. Section 53B-7-706 is enacted to read:
403 53B-7-706. Performance metrics for higher education institutions --
404 Determination of performance.
405 (1) (a) The board shall establish a model for determining a higher education
406 institution's performance.
407 (b) The board shall submit a draft of the model described in this section to the Higher
408 Education Appropriations Subcommittee and the governor for comments and
409 recommendations.
410 (2) (a) The model described in Subsection (1) shall include metrics, including:
411 (i) completion, measured by degrees and certificates awarded;
412 (ii) completion by underserved students, measured by degrees and certificates awarded
413 to underserved students;
414 (iii) responsiveness to workforce needs, measured by degrees and certificates awarded
415 in high market demand fields;
416 (iv) institutional efficiency, measured by degrees and certificates awarded per full-time
417 equivalent student; and
418 (v) for a research university, research, measured by total research expenditures.
419 (b) Subject to Subsection (2)(c), the board shall determine the relative weights of the
420 metrics described in Subsection (2)(a).
421 (c) The board shall assign the responsiveness to workforce needs metric described in
422 Subsection (2)(a)(iii) a weight of at least 25% when determining an institution of higher
423 education's performance.
424 (3) For each higher education institution, the board shall annually determine the higher
425 education institution's:
426 (a) performance; and
427 (b) change in performance compared to the higher education institution's average
428 performance over the previous five years.
429 (4) On or before September 1, 2017, the board shall report to the Higher Education
430 Appropriations Subcommittee on the model described in this section.
431 (5) The board shall use the model described in this section to make the report described
432 in Section 53B-7-705 for determining a higher education institution's performance funding for
433 a fiscal year beginning on or after July 1, 2018.
434 Section 9. Section 53B-7-707 is enacted to read:
435 53B-7-707. Performance metrics for applied technology colleges -- Determination
436 of performance.
437 (1) (a) The Utah College of Applied Technology Board of Trustees shall establish a
438 model for determining an applied technology college's performance.
439 (b) The Utah College of Applied Technology Board of Trustees shall submit a draft of
440 the model described in this section to the Higher Education Appropriations Subcommittee and
441 the governor for comments and recommendations.
442 (2) (a) The model described in Subsection (1) shall include metrics, including:
443 (i) completions, measured by certificates awarded;
444 (ii) short-term occupational training, measured by completions of:
445 (A) short-term occupational training that takes less than 60 hours to complete; and
446 (B) short-term occupational training that takes at least 60 hours to complete;
447 (iii) secondary completions, measured by:
448 (A) completions of competencies sufficient to be recommended for high school credits;
449 (B) certificates awarded to secondary students; and
450 (C) retention of certificate-seeking high school graduates as certificate-seeking
451 postsecondary students;
452 (iv) placements, measured by:
453 (A) total placements in related employment, military service, or continuing education;
454 (B) placements for underserved students; and
455 (C) placements from high impact programs; and
456 (v) institutional efficiency, measured by the number of applied technology college
457 graduates per 900 membership hours.
458 (b) The Utah College of Applied Technology Board of Trustees shall determine the
459 relative weights of the metrics described in Subsection (2)(a).
460 (3) On or before September 1, 2017, the Utah College of Applied Technology Board of
461 Trustees shall report to the Higher Education Appropriations Subcommittee on the model
462 described in this section.
463 (4) (a) For each applied technology college, the Utah College of Applied Technology
464 Board of Trustees shall annually determine the applied technology college's:
465 (i) performance; and
466 (ii) except as provided in Subsection (4)(b), change in performance compared to the
467 applied technology college's average performance over the previous five years.
468 (b) For performance during a fiscal year before fiscal year 2020, if comparable
469 performance data is not available for the previous five years, the Utah College of Applied
470 Technology Board of Trustees may determine an applied technology college's change in
471 performance using the average performance over the previous three or four years.
472 Section 10. Section 53B-7-708 is enacted to read:
473 53B-7-708. Legislative Audit.
474 (1) Subject to prioritization of the Audit Subcommittee, the Office of the Legislative
475 Auditor General established under Section 36-12-15 shall in any fiscal year:
476 (a) conduct an audit of money appropriated for performance funding; and
477 (b) prepare and submit a written report for an audit described in this section in
478 accordance with Subsection 36-12-15(4)(b)(ii).
479 (2) An audit described in this section shall include:
480 (a) an evaluation of the implementation of performance funding; and
481 (b) the use of performance funding.
482 Section 11. Section 63I-2-253 is amended to read:
483 63I-2-253. Repeal dates -- Titles 53, 53A, and 53B.
484 (1) Section 53A-1-403.5 is repealed July 1, 2017.
485 (2) Section 53A-1-411 is repealed July 1, 2017.
486 (3) Section 53A-1-709 is repealed July 1, 2020.
487 (4) Subsection 53A-1a-513(4) is repealed July 1, 2017.
488 (5) Section 53A-1a-513.5 is repealed July 1, 2017.
489 (6) Title 53A, Chapter 1a, Part 10, UPSTART, is repealed July 1, 2019.
490 (7) Title 53A, Chapter 8a, Part 8, Peer Assistance and Review Pilot Program, is
491 repealed July 1, 2017.
492 (8) Sections 53A-24-601 and 53A-24-602 are repealed January 1, 2018.
493 (9) (a) Subsections 53B-2a-103(2) and (4) are repealed July 1, 2019.
494 (b) When repealing Subsections 53B-2a-103(2) and (4), the Office of Legislative
495 Research and General Counsel shall, in addition to its authority under Subsection 36-12-12(3),
496 make necessary changes to subsection numbering and cross references.
497 (10) Subsections 53B-7-101(2)(b)(iii)(A) and (3) are repealed January 1, 2018.
498 (11) Subsection 53B-7-705(6)(b)(ii)(B) is repealed July 1, 2021.
499 (12) Subsection 53B-7-707(4)(b) is repealed July 1, 2021.
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501 is repealed July 1, 2023.