Senator Lyle W. Hillyard proposes the following substitute bill:


1     
SCHOOL MEALS PROGRAM AMENDMENTS

2     
2020 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Dan N. Johnson

5     
Senate Sponsor: Lyle W. Hillyard

6     

7     LONG TITLE
8     General Description:
9          This bill amends provisions related to funding regarding school meals.
10     Highlighted Provisions:
11          This bill:
12          ▸     amends provisions to broaden the use of school lunch revenues to school meals; and
13          ▸     makes technical and conforming changes.
14     Money Appropriated in this Bill:
15          None
16     Other Special Clauses:
17          None
18     Utah Code Sections Affected:
19     AMENDS:
20          32B-2-304, as last amended by Laws of Utah 2019, Chapter 403
21          53E-3-510, as last amended by Laws of Utah 2019, Chapter 186
22          53G-9-205, as last amended by Laws of Utah 2019, Chapter 293
23     

24     Be it enacted by the Legislature of the state of Utah:
25          Section 1. Section 32B-2-304 is amended to read:
26          32B-2-304. Liquor price -- School lunch program -- Remittance of markup.
27          (1) For purposes of this section:
28          (a) (i) "Landed case cost" means:
29          (A) the cost of the product; and
30          (B) inbound shipping costs incurred by the department.
31          (ii) "Landed case cost" does not include the outbound shipping cost from a warehouse
32     of the department to a state store.
33          (b) "Proof gallon" means the same as that term is defined in 26 U.S.C. Sec. 5002.
34          (c) Notwithstanding Section 32B-1-102, "small brewer" means a brewer who
35     manufactures in a calendar year less than 40,000 barrels of beer, heavy beer, and flavored malt
36     beverage.
37          (2) Except as provided in Subsection (3):
38          (a) spirituous liquor sold by the department within the state shall be marked up in an
39     amount not less than 88% above the landed case cost to the department;
40          (b) wine sold by the department within the state shall be marked up in an amount not
41     less than 88% above the landed case cost to the department;
42          (c) heavy beer sold by the department within the state shall be marked up in an amount
43     not less than 66.5% above the landed case cost to the department; and
44          (d) a flavored malt beverage sold by the department within the state shall be marked up
45     in an amount not less than 88% above the landed case cost to the department.
46          (3) (a) Liquor sold by the department to a military installation in Utah shall be marked
47     up in an amount not less than 17% above the landed case cost to the department.
48          (b) Except for spirituous liquor sold by the department to a military installation in
49     Utah, spirituous liquor that is sold by the department within the state shall be marked up 49%
50     above the landed case cost to the department if:
51          (i) the spirituous liquor is manufactured by a manufacturer producing less than 30,000
52     proof gallons of spirituous liquor in a calendar year; and
53          (ii) the manufacturer applies to the department for a reduced markup.
54          (c) Except for wine sold by the department to a military installation in Utah, wine that
55     is sold by the department within the state shall be marked up 49% above the landed case cost to
56     the department if:
57          (i) (A) except as provided in Subsection (3)(c)(i)(B), the wine is manufactured by a
58     manufacturer producing less than 20,000 gallons of wine in a calendar year; or
59          (B) for hard cider, the hard cider is manufactured by a manufacturer producing less
60     than 620,000 gallons of hard cider in a calendar year; and
61          (ii) the manufacturer applies to the department for a reduced markup.
62          (d) Except for heavy beer sold by the department to a military installation in Utah,
63     heavy beer that is sold by the department within the state shall be marked up 32% above the
64     landed case cost to the department if:
65          (i) a small brewer manufactures the heavy beer; and
66          (ii) the small brewer applies to the department for a reduced markup.
67          (e) The department shall verify an amount described in Subsection (3)(b), (c), or (d)
68     pursuant to a federal or other verifiable production report.
69          (f) For purposes of determining whether an alcoholic product qualifies for a markup
70     under this Subsection (3), the department shall evaluate whether the manufacturer satisfies the
71     applicable production requirement without considering the manufacturer's production of any
72     other type of alcoholic product.
73          (4) The department shall deposit 10% of the total gross revenue from sales of liquor
74     with the state treasurer to be credited to the Uniform School Fund and used to support the
75     school [lunch] meals program administered by the State Board of Education under Section
76     53E-3-510.
77          (5) This section does not prohibit the department from selling discontinued items at a
78     discount.
79          Section 2. Section 53E-3-510 is amended to read:
80          53E-3-510. Control of school meals program revenues -- Apportionment -- Costs.
81          (1) (a) School [lunch] meals program revenues shall be under the control of the state
82     board and may only be disbursed, transferred, or drawn upon by [its] the state board's order.
83          (b) The [revenue] school meals program revenues may only be used to provide school
84     [lunches] meals and a school [lunch] meals program in the state's [school districts] LEAs in
85     accordance with standards established by the state board.
86          (2) (a) The state board shall apportion the [revenue] school meals program revenues
87     according to the number of school children receiving school [lunches] meals in each [school
88     district] LEA.
89          (b) The state board and [local school] LEA governing boards shall employ staff to
90     administer and supervise the school [lunch] meals program and purchase supplies and
91     equipment.
92          (3) The costs of the school [lunch] meals program shall be included in the state board's
93     annual budget.
94          Section 3. Section 53G-9-205 is amended to read:
95          53G-9-205. School Breakfast Program -- Review of nonparticipants -- Reporting.
96          (1) (a) [Each local school] Beginning with the 2020-21 academic year, each LEA
97     governing board shall[, at least once every three years,] annually review each [elementary]
98     school in [its district] the LEA governing board's authority that does not participate in the
99     School Breakfast Program as to the school's reasons for nonparticipation.
100          [(b) (i) If the local school board determines that there are valid reasons for the school's
101     nonparticipation, no further action is needed.]
102          [(ii)] (b) Reasons for nonparticipation may include a recommendation from the
103     respective school community council authorized under Section 53G-7-1202 or [a similar group
104     of parents and school employees that the school should not participate in the program] charter
105     trust land council established under Section 53G-7-1205.
106          [(2) (a) After two nonparticipation reviews, a local school board may, by majority vote,
107     waive any further reviews of the nonparticipatory school.]
108          [(b) A waiver of the review process under Subsection (2)(a) does not prohibit
109     subsequent consideration by the local school board of an individual school's nonparticipation in
110     the School Breakfast Program.]
111          [(3)] (2) The requirements of this section shall be nullified by the termination of the
112     entitlement status of the School Breakfast Program by the federal government.