Representative Bradley G. Last proposes the following substitute bill:


1     
USE OF PUBLIC EDUCATION STABILIZATION ACCOUNT

2     
ONE-TIME FUNDING

3     
2022 GENERAL SESSION

4     
STATE OF UTAH

5     
Chief Sponsor: Bradley G. Last

6     
Senate Sponsor: Derrin R. Owens

7     

8     LONG TITLE
9     General Description:
10          This bill provides for the use of certain recurring one-time funding from the Public
11     Education Economic Stabilization Restricted Account within the public education
12     system.
13     Highlighted Provisions:
14          This bill:
15          ▸     defines terms;
16          ▸     creates a capital projects fund known as the Small School District Capital Projects
17     Fund (fund) to provide state funding for certain local capital development projects;
18          ▸     requires the Executive Appropriations Committee, in preparing budget bills, to use
19     one-time appropriations in the Public Education Economic Stabilization Restricted
20     Account for:
21               •     a general distribution to school districts and charter schools for local one-time
22     funding priorities; and
23               •     the Small School District Capital Projects Fund to a certain limit;
24          ▸     establishes the Capital Projects Evaluation Panel (panel) under the State Board of
25     Education (state board);

26          ▸     provides the membership and duties of the panel;
27          ▸     provides state funding for local capital development projects through grants and
28     low-interest or no-interest loans;
29          ▸     grants rulemaking authority to the state board regarding the capital development
30     project proposal and approval process; and
31          ▸     makes technical and conforming changes.
32     Money Appropriated in this Bill:
33          This bill appropriates in fiscal year 2023:
34          ▸     to State Board of Education - Public Education Capital Projects Fund, as a one-time
35     appropriation:
36               •     from the Uniform Public Education Economic Stabilization Restricted Account,
37     One-time, $50,000,000;
38          ▸     to Capital Budgets - Public Education Capital Development, as a one-time
39     appropriation:
40               •     from Public Education Capital Development Fund, One-time, $30,000,000;
41          ▸     to State Board of Education - Minimum School Program - Related to Basic School
42     Programs, as a one-time appropriation:
43               •     from Public Education Economic Stabilization Restricted Account, One-time,
44     $91,500,000; and
45          ▸     to Capital Budget - Public Education Capital Development Fund, as a one-time
46     appropriation:
47               •     from the Public Education Economic Stabilization Restricted Account,
48     One-time, $30,000,000.
49     Other Special Clauses:
50          This bill provides a special effective date.
51          This bill provides revisor instructions.
52     Utah Code Sections Affected:
53     ENACTS:
54          53F-7-202, Utah Code Annotated 1953
55          53F-9-601, Utah Code Annotated 1953
56          53F-10-101, Utah Code Annotated 1953

57          53F-10-102, Utah Code Annotated 1953
58          53F-10-201, Utah Code Annotated 1953
59          53F-10-202, Utah Code Annotated 1953
60          53F-10-301, Utah Code Annotated 1953
61          53F-10-302, Utah Code Annotated 1953
62     Utah Code Sections Affected by Revisor Instructions:
63          53F-10-301, Utah Code Annotated 1953
64     

65     Be it enacted by the Legislature of the state of Utah:
66          Section 1. Section 53F-7-202 is enacted to read:
67          53F-7-202. Distribution of one-time funding for student and school support.
68          (1) Subject to legislative appropriations, the state board shall allocate one-time funding
69     appropriated for student and school support in accordance with this section by:
70          (a) for charter schools:
71          (i) distributing an amount that is equal to the product of:
72          (A) charter school enrollment on October 1 in the prior year, or projected enrollment
73     for a charter school in the charter school's first year of operations, divided by enrollment on
74     October 1 in public schools statewide in the prior year; and
75          (B) the total amount available for distribution; and
76          (ii) allocating to each charter school:
77          (A) an equally divided portion of 20% of the amount described in Subsection (1)(a)(i);
78     and
79          (B) 80% of the amount described in Subsection (1)(a)(i) on a per-student basis; and
80          (b) for school districts, distributing the remainder of funds available for distribution
81     after the distribution to charter schools under Subsection (1)(a) by allocating to each school
82     district:
83          (i) a base allocation relative to student enrollment as follows:
84          (A) for a school district with enrollment less than 1% of total state enrollment,
85     $500,000;
86          (B) for a school district with enrollment of between 1% and 5% of total state
87     enrollment, $350,000; and

88          (C) for a school district with enrollment greater than 5% of total state enrollment,
89     $200,000; and
90          (ii) after the base allocation described in Subsection (1)(b)(i), the remainder on a
91     per-student basis.
92          (2) (a) An LEA shall:
93          (i) use funds that the state board distributes under this section to support students and
94     schools through one-time priorities that the relevant local governing board approves, including
95     student safety, technology, instructional materials, and capital facility improvements; and
96          (ii) submit to the state board an accounting of the use of the LEA's use of the funds that
97     the state board distributes under this section.
98          (b) Subsection (2)(a) does not require state board authorization or approval of an LEA
99     expenditure.
100          Section 2. Section 53F-9-601 is enacted to read:
101          53F-9-601. Small School District Capital Projects Fund.
102          (1) As used in this section:
103          (a) "Capital development project" means the same as that term is defined in Section
104     63A-5b-401.
105          (b) "Fund" means the Small School District Capital Projects Fund created in this
106     section.
107          (2) (a) There is created a capital projects fund known as the Small School District
108     Capital Projects Fund.
109          (b) Subject to legislative appropriations, and except as provided in Subsection (4),
110     money in the fund shall be used for a capital development project in accordance with this
111     section and Title 53F, Chapter 10, State Funding -- Capital Projects.
112          (c) The fund shall:
113          (i) be funded by:
114          (A) one-time appropriations; and
115          (B) repayment and interest on loans described in Section 53F-10-303; and
116          (ii) accrue interest, which shall be deposited into the fund.
117          (3) The state board shall authorize disbursements from the fund.
118          (4) The state board shall administer the fund in accordance with this section.

119          Section 3. Section 53F-10-101 is enacted to read:
120     
CHAPTER 10. STATE FUNDING -- CAPITAL PROJECTS

121     
Part 1. General Provisions

122          53F-10-101. Definitions.
123          As used in this section:
124          (1) "Capital development project" means the same as that term is defined in Section
125     63A-5b-401, including new construction, capital expansion, and renovation.
126          (2) "Capital local levy" means the levy that a local school board imposes under Section
127     53F-8-303.
128          (3) "Capital Projects Evaluation Panel" or "panel" means the panel established in
129     Section 53F-10-201.
130          (4) "Capital projects funding" means funds distributed from the Small School District
131     Capital Projects Fund.
132          (5) "Division" means the Division of Facilities Construction and Management.
133          (6) "Eligible school district" means a school district:
134          (a) in a county of the fourth, fifth, or sixth class; and
135          (b) that qualifies for state guarantee funding related to local levies under Section
136     53F-2-601.
137          (7) "Small School District Capital Projects Fund" or "fund" means the capital projects
138     fund created in Section 53F-9-601.
139          Section 4. Section 53F-10-102 is enacted to read:
140          53F-10-102. Capital development project proposal process -- State board role.
141          (1) The state board shall make rules, in accordance with Title 63G, Chapter 3, Utah
142     Administrative Rulemaking Act, to establish a process for school districts to submit to the
143     panel proposals for funding for capital development projects under this chapter, including:
144          (a) the panel's review, prioritization, and recommendation to the state board;
145          (b) the state board's consideration and approval, if applicable, of proposed capital
146     development projects; and
147          (c) management of panel processes and administration.
148          (2) The state board may fund direct costs and administration of the panel, not to exceed
149     $200,000.

150          (3) The state board shall:
151          (a) evaluate recommendations of the panel regarding proposed capital development
152     projects;
153          (b) approve proposed capital development projects, subject to the availability of capital
154     development funding; and
155          (c) oversee the disbursement of capital development funding.
156          Section 5. Section 53F-10-201 is enacted to read:
157     
Part 2. Capital Projects Evaluation Panel

158          53F-10-201. Capital Projects Evaluation Panel.
159          (1) There is created the Capital Projects Evaluation Panel to review, prioritize, and
160     approve proposals for state funding of capital projects under this chapter.
161          (2) The panel consists of the following members:
162          (a) the state superintendent of public instruction or the state superintendent's designee,
163     who serves as chair of the panel;
164          (b) the deputy superintendent for financial operations or the deputy superintendent's
165     designee;
166          (c) two individuals with expertise in school construction whom the state superintendent
167     appoints;
168          (d) two individuals with construction and construction financing experience, at least
169     one of whom being an employee of the division, whom the governor appoints; and
170          (e) the state treasurer or the state treasurer's designee, only in the case of panel action
171     regarding a loan under Section 53F-10-302.
172          (3) (a) (i) Except as provided under Subsection (3)(a)(ii), an appointed member of the
173     panel shall serve a term of two years.
174          (ii) Notwithstanding Subsection (3)(a)(i), a panel member's term ends on the day on
175     which the member's position allowing the member to serve on the panel under Subsection (2)
176     ends.
177          (b) The state superintendent and governor shall make the respective appointments:
178          (i) for the initial appointments, before July 1, 2022;
179          (ii) for subsequent terms, before July 1 of each even-numbered year, by:
180          (A) reappointing the panel member whose term expires under Subsection (3)(a)(i); or

181          (B) appointing a new panel member; and
182          (iii) in the case of a vacancy created under Subsection (3)(a)(ii), for the remainder of
183     the vacated term.
184          (c) The state superintendent and governor may change the relevant appointment
185     described in Subsection (2) at any time for the remainder of the existing term.
186          (4) A panel member:
187          (a) may not receive compensation or benefits for the member's service on the panel
188     other than a member who is an existing state employee receiving the employee's existing
189     compensation and benefits related to the employee's state employment; and
190          (b) may receive per diem and reimbursement for travel expenses that the member
191     incurs as a panel member at the rates that the Division of Finance establishes under:
192          (i) Sections 63A-3-106 and 63A-3-107; and
193          (ii) rules that the Division of Finance makes under Sections 63A-3-106 and 63A-3-107.
194          (5) (a) A majority of the panel members constitutes a quorum.
195          (b) The action of a majority of a quorum constitutes an action of the panel.
196          (6) (a) The state board shall provide staff support to the panel.
197          (b) The division shall provide technical expertise to the panel as requested by the
198     panel.
199          Section 6. Section 53F-10-202 is enacted to read:
200          53F-10-202. Panel duties.
201          (1) The panel shall:
202          (a) determine criteria for:
203          (i) the allowed uses of capital project fund resources described in Sections 53F-10-301
204     and 53F-10-302 and the prioritization of proposed capital development projects, including the
205     extent to which a proposed project:
206          (A) eliminates risks to student life and safety through renewal or replacement;
207          (B) enhances efficiency of use, including combining necessarily existent small schools,
208     described in Section 53F-2-304;
209          (C) addresses essential program growth and capacity;
210          (D) provides a cost effective solution that is appropriate for the facility's need; and
211          (E) comports with the school district's provision of matching funds and sufficient

212     revenues for ongoing operation and maintenance;
213          (b) evaluate capital development project proposals to ensure viability, efficiency, and
214     adherence to education and construction standards;
215          (c) prioritize capital development projects;
216          (d) recommend that the state board distribute capital project funding to school districts;
217          (e) if necessary based on the circumstances of the capital development project, in
218     partnership with the division, oversee the capital development project; and
219          (f) report to the state board regarding the panel's actions.
220          (2) The panel may:
221          (a) determine that a technical assistance liaison is necessary for an eligible school
222     district applying for capital project funding under this chapter to efficiently complete the
223     project; and
224          (b) facilitate engagement with the division or a willing school district partner having
225     the required technical expertise in similar capital development projects.
226          Section 7. Section 53F-10-301 is enacted to read:
227     
Part 3. Local Capital Development Project Funding

228          53F-10-301. Capital development project grants.
229          (1) (a) Except as provided in Subsection (1)(b), after reviewing an eligible school
230     district's ability to independently generate project funding, the panel may recommend to the
231     state board, and the state board may authorize a distribution of capital project funding in the
232     following amounts to an eligible school district for a capital development project that the panel
233     has prioritized:
234          (i) for an eligible school district with a capital local levy rate of at least 0.00105, up to
235     50% of the total cost of the capital development project as a 1:1 matching grant;
236          (ii) for an eligible school district with a capital local levy rate of at least 0.0015, up to
237     66.67% of the total cost of the capital development project as a 2:1 matching grant;
238          (iii) for an eligible school district with a capital local levy rate of at least 0.0018, up to
239     75% of the total cost of the capital development project as a 3:1 matching grant;
240          (iv) for an eligible school district with a capital local levy rate of at least 0.00225, up to
241     80% of the total cost of the capital development project as a 4:1 matching grant; and
242          (v) up to 100% of the total cost of the capital development project as a non-matching

243     grant for an eligible school district that:
244          (A) has incurred debt equal to 90% of the debt limit imposed by Utah Constitution,
245     Article XIV, Section 4; and
246          (B) unless the school district's capital local levy rate is at least 0.00225, increases the
247     school district's capital local levy by 10% after the effective date of this bill.
248          (b) Notwithstanding Subsection (1)(a), if increasing a capital local levy to a threshold
249     described in Subsection (1)(a) would result in a per-household property tax that, based on
250     county property tax data in the State Tax Commission's annual report, is higher than 125% of
251     the statewide average of property tax as a percentage of household income, based on census
252     household income data, the threshold necessary to qualify for the relevant level of grant
253     funding shall be the capital local levy rate that would result in an overall per-household
254     property tax that is equal to 125% of the statewide average of property tax as a percentage of
255     household income.
256          (2) The panel shall determine the terms of a grant described in Subsection (1), subject
257     to approval by the state board.
258          (3) A school district that receives grant funding under this section shall demonstrate the
259     ability to provide sufficient ongoing funding to support the operation and maintenance of the
260     new or renovated facility resulting from the capital development project based on standards
261     that the panel establishes.
262          Section 8. Section 53F-10-302 is enacted to read:
263          53F-10-302. Capital development project loans.
264          (1) The panel may recommend and the state board may distribute capital project
265     funding for a loan to an eligible school district to provide the required match amount described
266     in Section 53F-10-301 for a capital development project that the panel has prioritized:
267          (a) at an interest rate that the state treasurer establishes that is equal to the state's most
268     recent general obligation bond rate; or
269          (b) at no interest for a school district:
270          (i) with a per-household property tax that is higher than 125% of the statewide average
271     of property tax as a percentage of household income, based on the data sets described in
272     Subsection 53F-10-302(1)(b); and
273          (ii) that has incurred debt equal to 90% of the debt limit imposed by Utah Constitution,

274     Article XIV, Section 4.
275          (2) The panel shall determine the repayment terms of a loan described in Subsection
276     (1), subject to state board approval, based on established standards.
277          (3) Repayment of a loan described in Subsection (1) and associated interest shall be
278     deposited into the Small School District Capital Projects Fund.
279          (4) An LEA that receives loan funding under this section shall demonstrate the ability
280     to provide sufficient ongoing funding to support the operation and maintenance of the new or
281     renovated facility resulting from the capital development project based on standards that the
282     panel establishes.
283          Section 9. Appropriation.
284          The following sums of money are appropriated for the fiscal year beginning July 1,
285     2022, and ending June 30, 2023. These are additions to amounts previously appropriated for
286     fiscal year 2023. Under the terms and conditions of Title 63J, Chapter 1, Budgetary Procedures
287     Act, the Legislature appropriates the following sums of money from the funds or accounts
288     indicated for the use and support of the government of the state of Utah.
289          Section 9(a). Operating and Capital Budgets.
290     ITEM 1
291          To State Board of Education - Public Education Capital Projects Fund
292               From Public Education Economic
293                Stabilization Restricted Account, One-time
$50,000,000

294               Schedule of Programs:
295                    Small School District Capital Projects Fund          $50,000,000
296          The Legislature intends that the State Board of Education distribute appropriated funds
297     from the Small School District Capital Projects Fund, in accordance with Title 53F, Chapter
298     10, State Funding -- Capital Projects.
299     ITEM 2
300          To Capital Budgets -- Public Education Capital Development
301               From Public Education Capital Development Fund One-time
$30,000,000

302               Schedule of Programs:
303                    Schools for the Deaf and the Blind Salt Lake     $15,000,000
304                    Schools for the Deaf and the Blind St. George     $15,000,000

305          The Legislature intends that:
306          (1) the State Board of Education in consultation with the Division of Facilities
307     Construction and Management, evaluate the provision of capital facilities for the Utah Schools
308     for the Deaf and the Blind in southwestern Utah and Salt Lake County to address student
309     academic needs of direct instruction and support services, efficiency of use, and maximizing
310     student capacity, impact of delivering services to students in each region, cost effectiveness,
311     and priority of construction;
312          (2) the State Board of Education report the findings of the evaluation to the Executive
313     Appropriations Committee by October 1, 2022; and
314          (3) that the Division of Finance release appropriated funds to the Division of Facilities
315     Construction and Management to construct facilities as recommended in the report.
316     ITEM 3
317          To State Board of Education - Minimum School Program - Related to Basic
318           School Programs
319               From Public Education Economic
320                Stabilization Restricted Account, One-time
$91,500,000

321               Schedule of Programs:
322                    Public Education Capital and Technology,
323                     One-time                              $91,500,000
324          The Legislature intends that the State Board of Education distribute funds under this
325     item in accordance with Section 53F-7-202.
326     ITEM 4
327          The Legislature intends that the Public Education Appropriations Subcommittee:
328          (a) receive input from the State Board of Education, governor, and local education
329     agencies regarding the distribution of one-time allocations from the Public Education
330     Economic Stabilization Restricted Account to school districts and charter schools described in
331     Items 1 through 3; and
332          (b) report the subcommittee's recommendations to the Executive Appropriations
333     Committee by December 1, 2022.
334          Section 9(b). Capital Projects Fund.
335          The Legislature has reviewed the following capital projects funds. The Legislature

336     authorizes the State Division of Finance to transfer amounts between funds and accounts as
337     indicated.
338     ITEM 5
339          To Capital Budget - Public Education Capital Development Fund
340               From Public Education Economic Stabilization Restricted Account,      
341           One-time
$30,000,000

342                    Schedule of Programs:
343                    Public Education Capital Development Fund     $30,000,000
344          Section 10. Effective date.
345          If approved by two-thirds of all the members elected to each house, this bill takes effect
346     upon approval by the governor, or the day following the constitutional time limit of Utah
347     Constitution, Article VII, Section 8, without the governor's signature, or in the case of a veto,
348     the date of veto override.
349          Section 11. Revisor instructions.
350          The Legislature intends that the Office of Legislative Research and General Counsel, in
351     preparing the Utah Code database for publication, replace the reference in Section 53F-10-301
352     from "the effective date of this bill" to the bill's actual effective date.